Mobile Mini Reports Q1’15 Results and Announces Quarterly Dividend
April 30, 2015 | By Business Wire News
PHOENIX
Mobile Mini, Inc. (NASDAQ GS:MINI) (the “Company” or “Mobile Mini”), the world’s leading supplier of portable storage solutions, and third largest provider of specialty containment solutions in the United States, today reported actual and adjusted financial results for the quarter ended March 31, 2015. Total revenues were $132.6 million and rental revenues were $121.0 million, up from $102.4 million and $94.1 million, respectively, for the same period last year.
The Company recorded a first quarter net loss of $27.3 million, or $(0.60) per diluted share, due to a non-cash impairment loss of $64.7 million related to the previously announced divestiture of its wood mobile offices that is expected to be completed in May. The Company had net income of $7.4 million, or $0.16 per diluted share, respectively, for the first quarter of 2014. On an adjusted basis, first quarter net income was $12.7 million, or $0.28 per diluted share, compared to adjusted net income of $8.0 million, or $0.17 per diluted share, for the first quarter of 2014. Adjusted EBITDA was $47.5 million and adjusted EBITDA margin was 36.2% for the first quarter of 2015.
Total revenues and rental revenues for the portable storage business for the current quarter were $106.5 million and $99.0 million, respectively. Total revenues and rental revenues for the recently acquired specialty containment business were $26.1 million and $22.0 million, respectively.
Dividend
The Company’s Board of Directors declared a cash dividend of 18.7 cents per share which will be paid on June 3, 2015 to shareholders of record on May 20, 2015.
First Quarter 2015 Highlights
- Grew total rental revenues 28.6% year-over-year; 5.2% for the portable storage business.
- Increased adjusted EBITDA to $47.5 million, from $32.7 million and expanded adjusted EBITDA margin to 36.2% from 31.9%, year-over-year.
- Delivered solid free cash flow of $29.2 million, a 9.6% increase over the first quarter of 2014.
- Increased portable storage rental rates by 6.2% year-over-year, with new units delivered at a 3.7% higher rental rate than the prior-year first quarter.
- Within the portable storage business, increased adjusted EBITDA by $5.5 million, or 16.9% compared to the prior-year first quarter and expanded adjusted EBITDA margin to 36.3% from 31.9% in the prior year first quarter.
CEO Comments
Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “We delivered a solid quarter, including a 28.6% increase in rental revenues, a 45.5% increase in adjusted EBITDA, expansion of our adjusted EBITDA margins, and strong free cash flow, despite challenging weather conditions in the first quarter of 2015. Our strategy continues to focus on deployment of high return, low-maintenance capital assets. The announced divestiture of our wood mobile office fleet accelerates this strategy by freeing up sales, field and management time as well as Company infrastructure that can be redirected to the expansion of the specialty containment business and the remaining portable storage business.”
Mr. Olsson continued, “The integration of ETS is going very well and both the portable storage and specialty containment segments grew revenues and adjusted EBITDA in the quarter compared to the previous year. Additionally, at the end of the quarter we transitioned from a product-centered to a geographically-centered organizational structure in order to have one regional manager oversee both segments within each region. This realignment enhances flexibility, further fast-tracks integration and facilitates additional cross-selling opportunities.”
Conference Call
Mobile Mini will host a conference call today, Thursday, April 30, 2015 at 12 noon ET to review these results. To listen to the call live, dial (201) 493-6739 and ask for the Mobile Mini Conference Call or go to www.mobilemini.com and click on the Investors section. Additionally, a slide presentation that will accompany the call will be posted at www.mobilemini.com on the Investors section and will be available in advance and after the call. Please go to the website 15 minutes early to download and install any necessary audio software. If you are unable to listen live, a replay of the call can be accessed for approximately 14 days after the call at Mobile Mini’s website.
About Mobile Mini, Inc.
Mobile Mini, Inc. is the world’s leading provider of portable storage solutions through its total rental fleet of approximately 213,800 portable storage containers and office units with 134 locations in the U.S., United Kingdom, and Canada. Through its wholly-owned subsidiary, Evergreen Tank Solutions, Mobile Mini is also the third largest provider of specialty containment solutions in the U.S., with a rental fleet of approximately 10,800 units and 24 locations. Mobile Mini is included on the Russell 2000® and 3000® Indexes and the S&P Small Cap Index.
Forward-Looking Statements
This news release contains forward-looking statements, including, but not limited to, our expectations regarding our ability to execute our strategic plan, growth and profitability, financial performance, margin expansion, ability to enter new markets, free cash flow, and positioning for 2015, which involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Risks and uncertainties that may affect future results include those that are described from time to time in the Company’s SEC filings. These forward-looking statements represent the judgment of the Company, as of the date of this release, and Mobile Mini disclaims any intent or obligation to update forward-looking statements.
(See accompanying tables)
| Mobile Mini, Inc. | ||||||||||||||||||||||||||
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Condensed Consolidated Statements of Income |
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| (Unaudited) | ||||||||||||||||||||||||||
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(in thousands except per share data) |
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| Three Months Ended March 31, 2015 | Three Months Ended March 31, 2014 | |||||||||||||||||||||||||
| Actual | Adjustments | Adjusted (1) | Actual | Adjustments | Adjusted (1) | |||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Rental | $ | 121,028 | $ | – | $ | 121,028 | $ | 94,080 | $ | – | $ | 94,080 | ||||||||||||||
| Sales | 6,724 | – | 6,724 | 7,866 | – | 7,866 | ||||||||||||||||||||
| Other (2) | 4,877 | (1,176 | ) | 3,701 | 458 | – | 458 | |||||||||||||||||||
| Total revenues | 132,629 | (1,176 | ) | 131,453 | 102,404 | – | 102,404 | |||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||
| Rental, selling and general expenses (3) | 83,982 | (1,002 | ) | 82,980 | 68,356 | (6 | ) | 68,350 | ||||||||||||||||||
| Cost of sales | 4,197 | – | 4,197 | 5,553 | – | 5,553 | ||||||||||||||||||||
| Restructuring expenses (4) | 483 | (483 | ) | – | 585 | (585 | ) | – | ||||||||||||||||||
| Asset impairment, net (5) | 64,726 | (64,726 | ) | – | 283 | (283 | ) | – | ||||||||||||||||||
| Depreciation and amortization | 15,539 | – | 15,539 | 9,145 | – | 9,145 | ||||||||||||||||||||
| Total costs and expenses | 168,927 | (66,211 | ) | 102,716 | 83,922 | (874 | ) | 83,048 | ||||||||||||||||||
| (Loss) income from operations | (36,298 | ) | 65,035 | 28,737 | 18,482 | 874 | 19,356 | |||||||||||||||||||
| Other expense: | ||||||||||||||||||||||||||
| Interest expense | (9,059 | ) | – | (9,059 | ) | (6,987 | ) | – | (6,987 | ) | ||||||||||||||||
| Foreign currency exchange | – | – | – | (1 | ) | – | (1 | ) | ||||||||||||||||||
| (Loss) income before tax provision | (45,357 | ) | 65,035 | 19,678 | 11,494 | 874 | 12,368 | |||||||||||||||||||
| Income tax (benefit) provision | (18,031 | ) | 25,038 | 7,007 | 4,054 | 279 | 4,333 | |||||||||||||||||||
| Net (loss) income | $ | (27,326 | ) | $ | 39,997 | $ | 12,671 | $ | 7,440 | $ | 595 | $ | 8,035 | |||||||||||||
| EBITDA | $ | (20,759 | ) | $ | 47,526 | $ | 27,626 | $ | 32,664 | |||||||||||||||||
| EBITDA as a percentage of total revenues | -15.7 | % | 36.2 | % | 27.0 | % | 31.9 | % | ||||||||||||||||||
| (Loss) earnings per share: | ||||||||||||||||||||||||||
| Basic | $ | (0.60 | ) | $ | 0.28 | $ | 0.16 | $ | 0.17 | |||||||||||||||||
| Diluted | (0.60 | ) | $ | 0.28 | 0.16 | 0.17 | ||||||||||||||||||||
| Weighted average number of common and | ||||||||||||||||||||||||||
| common share equivalents | ||||||||||||||||||||||||||
| outstanding: | ||||||||||||||||||||||||||
| Basic | 45,484 | 45,484 | 46,148 | 46,148 | ||||||||||||||||||||||
| Diluted (6) | 45,484 | 46,054 | 46,837 | 46,837 | ||||||||||||||||||||||
| (1) | Adjusted balance excludes certain non-cash transactions, as well as other transactions that management believes are not indicative of its ongoing business. Adjusted figures are a non-GAAP presentation. | ||
| (2) | Adjustment is to exclude revenue associated with a sales tax refund recorded in the current quarter that is not indicative of our ongoing business. | ||
| (3) | Adjustment relates to costs directly related to acquisition activities. | ||
| (4) | Costs relating primarily to the restructuring of our operations. | ||
| (5) | In 2015, asset impairment costs represent the impairment of wood mobile offices in connection with the divestiture of these assets. In 2014, the asset impairment costs represent the additional loss upon completion of sale (offset by gains upon completion of sale) of assets that were written down to fair value in the second quarter of 2013. | ||
| (6) | Common stock equivalents were excluded from the calculation of actual diluted earnings per share for the quarter ending March 31, 2015 because their inclusion would reduce the net loss per share. | ||
| Mobile Mini, Inc. | |||||||
| Operating Data | |||||||
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(Unaudited) |
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| 2015 | 2014 | ||||||
| As of March 31: | |||||||
| Number of portable storage locations | 134 | 136 | |||||
| Number of specialty containment locations | 24 | – | |||||
| Portable Storage rental fleet units | 213,800 | 212,600 | |||||
| Specialty Containment rental fleet units | 10,800 | – | |||||
| Average Utilization: | |||||||
| Portable Storage – three months ended March 31 | 66.6% | 66.9% | |||||
| Specialty Containment – three months ended March 31* | 71.1% | 68.1% | |||||
| *Specialty containment 2014 utilization was prior to acquisition | |||||||
| Mobile Mini, Inc. | |||||||||||||||
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Product Line Information – Adjusted (1) |
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(Unaudited) |
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(in thousands) |
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| Three Months Ended March 31, 2015 | |||||||||||||||
| Portable | Specialty | ||||||||||||||
| Storage | Containment | Total | |||||||||||||
| Revenues: | |||||||||||||||
| Rental | $ | 99,004 | $ | 22,024 | $ | 121,028 | |||||||||
| Sales | 5,962 | 762 | 6,724 | ||||||||||||
| Other | 353 | 3,348 | 3,701 | ||||||||||||
| Total revenues | 105,319 | 26,134 | 131,453 | ||||||||||||
| Costs and expenses: | |||||||||||||||
| Rental, selling and general expenses | 66,258 | 16,722 | 82,980 | ||||||||||||
| Cost of sales | 3,864 | 333 | 4,197 | ||||||||||||
| Depreciation and amortization | 9,466 | 6,073 | 15,539 | ||||||||||||
| Total costs and expenses | 79,588 | 23,128 | 102,716 | ||||||||||||
| Income from operations | $ | 25,731 | $ | 3,006 | $ | 28,737 | |||||||||
| Adjusted EBITDA | $ | 38,185 | $ | 9,341 | $ | 47,526 | |||||||||
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Adjusted EBITDA Margin |
36.3 | % | 35.7 | % | 36.2 | % | |||||||||
| (1) | Adjusted amounts exclude certain non-cash transactions, as well as other transactions that management believes are not indicative of its ongoing business. Adjusted figures are a non-GAAP presentation. See additional information regarding the adjusted balances on the previous pages of this news release. |
| Mobile Mini, Inc. | |||||||||
| Condensed Consolidated Balance Sheets | |||||||||
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(in thousands) |
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| March 31, | December 31, | ||||||||
| 2015 | 2014 | ||||||||
| (unaudited) | (audited) | ||||||||
| ASSETS | |||||||||
| Cash and cash equivalents | $ | 3,048 | $ | 3,739 | |||||
| Receivables, net | 79,004 | 81,031 | |||||||
| Inventories | 16,518 | 16,736 | |||||||
| Rental fleet, net | 1,019,663 | 1,087,056 | |||||||
| Property, plant and equipment, net | 116,735 | 113,175 | |||||||
| Deposits and prepaid expenses | 7,501 | 8,586 | |||||||
| Deferred financing costs and other assets | 8,173 | 8,858 | |||||||
| Intangibles, net | 76,965 | 78,385 | |||||||
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Goodwill |
703,337 | 705,608 | |||||||
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Total assets |
$ | 2,030,944 | $ | 2,103,174 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
| Liabilities: | |||||||||
| Accounts payable | $ | 30,465 | $ | 22,933 | |||||
| Accrued liabilities | 64,590 | 63,727 | |||||||
| Lines of credit | 701,381 | 705,518 | |||||||
| Obligations under capital leases | 26,270 | 24,918 | |||||||
| Senior Notes | 200,000 | 200,000 | |||||||
| Deferred income taxes | 213,365 | 231,547 | |||||||
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Total liabilities |
1,236,071 | 1,248,643 | |||||||
| Stockholders’ equity: | |||||||||
| Common stock | 491 | 490 | |||||||
| Additional paid-in capital | 572,364 | 569,083 | |||||||
| Retained earnings | 344,625 | 380,504 | |||||||
| Accumulated other comprehensive loss | (41,647 | ) | (29,870 | ) | |||||
| Treasury stock | (80,960 | ) | (65,676 | ) | |||||
| Total stockholders’ equity | 794,873 | 854,531 | |||||||
| Total liabilities and stockholders’ equity | $ | 2,030,944 | $ | 2,103,174 | |||||
| Mobile Mini, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
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(in thousands) |
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| Three Months Ended March 31, | ||||||||
| 2015 | 2014 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net (loss) income | $ | (27,326 | ) | $ | 7,440 | |||
| Adjustments to reconcile net income to net cash | ||||||||
| provided by operating activities: | ||||||||
| Asset impairment charge, net | 64,726 | 283 | ||||||
| Provision for doubtful accounts | 1,169 | 547 | ||||||
| Amortization of deferred financing costs | 789 | 703 | ||||||
| Amortization of long-term liabilities | 25 | 41 | ||||||
| Share-based compensation expense | 3,250 | 4,164 | ||||||
| Depreciation and amortization | 15,539 | 9,145 | ||||||
| Gain on sale of rental fleet | (1,972 | ) | (1,711 | ) | ||||
| Loss on disposal of property, plant and equipment | 335 | 72 | ||||||
| Deferred income taxes | (18,233 | ) | 3,954 | |||||
| Foreign currency transaction loss | – | 1 | ||||||
| Changes in certain assets and liabilities, net of | ||||||||
| effect of businesses acquired | 170 | 2,173 | ||||||
| Net cash provided by operating activities | 38,472 | 26,812 | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Cash paid for businesses acquired, net of cash acquired | (1,200 | ) | (4,217 | ) | ||||
| Additions to rental fleet, excluding acquisitions | (10,480 | ) | (4,078 | ) | ||||
| Proceeds from sale of rental fleet units | 4,842 | 5,627 | ||||||
| Additions to property, plant and equipment | (4,241 | ) | (2,628 | ) | ||||
| Proceeds from sale of property, plant and equipment | 607 | 908 | ||||||
| Net cash used in investing activities | (10,472 | ) | (4,388 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Net payments under lines of credit | (4,137 | ) | (16,307 | ) | ||||
| Deferred financing costs | (100 | ) | – | |||||
| Principal payments on capital lease obligations | (849 | ) | (367 | ) | ||||
| Issuance of common stock | 32 | 1,949 | ||||||
| Dividend payments | (8,509 | ) | (7,849 | ) | ||||
| Purchase of treasury stock | (15,284 | ) | (407 | ) | ||||
| Net cash provided by (used) in financing activities | (28,847 | ) | (22,981 | ) | ||||
| Effect of exchange rate changes on cash | 156 | (132 | ) | |||||
| Net increase (decrease) in cash | (691 | ) | (689 | ) | ||||
| Cash and cash equivalents at beginning of period | 3,739 | 1,256 | ||||||
| Cash and cash equivalents at end of period | $ | 3,048 | $ | 567 | ||||
| Equipment acquired through capital lease obligations | $ | 2,201 | $ | 1,983 | ||||
Non-GAAP Financial Information
In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company also discloses in this press release certain non-GAAP financial information. These financial measures are not recognized measures under GAAP and they are not intended to be and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, adjusted net income, adjusted diluted earnings per share, and free cash flow are non-GAAP financial measures as defined by Securities and Exchange Commission (“SEC”) rules. This non-GAAP financial information may be determined or calculated differently by other companies. Reconciliations of these measurements to the most directly comparable GAAP financial measures are as follows:
| Mobile Mini, Inc. | ||||||||||
| Adjusted EBITDA GAAP Reconciliations | ||||||||||
| (Unaudited) | ||||||||||
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(in thousands) |
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| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2015 | 2014 | |||||||||
| Net (loss) income | $ | (27,326 | ) | $ | 7,440 | |||||
| Interest expense | 9,059 | 6,987 | ||||||||
| Provision for income taxes | (18,031 | ) | 4,054 | |||||||
| Depreciation and amortization | 15,539 | 9,145 | ||||||||
| EBITDA | (20,759 | ) | 27,626 | |||||||
| Share-based compensation expense | 3,250 | 4,164 | ||||||||
| Restructuring expenses | 483 | 585 | ||||||||
| Acquisition expenses | 1,002 | 6 | ||||||||
| Asset impairment, net | 64,726 | 283 | ||||||||
| Sales tax refund included in other revenues | (1,176 | ) | ||||||||
| Adjusted EBITDA | $ | 47,526 | $ | 32,664 | ||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2015 | 2014 | |||||||||
| Net cash provided by operating activities | $ | 38,472 | $ | 26,812 | ||||||
| Interest paid | 4,190 | 2,160 | ||||||||
| Income and franchise taxes paid | 273 | 89 | ||||||||
| Share-based compensation expense | (3,250 | ) | (4,164 | ) | ||||||
| Asset impairments, net of recoveries | (64,726 | ) | (283 | ) | ||||||
| Gain on sale of rental fleet | 1,972 | 1,711 | ||||||||
| Loss on disposal of property, plant and equipment | (335 | ) | (72 | ) | ||||||
| Changes in other assets and liabilities, net of | ||||||||||
| effect of businesses acquired | 2,645 | 1,373 | ||||||||
| EBITDA | $ | (20,759 | ) | $ | 27,626 | |||||
| Mobile Mini, Inc. | ||||||||
| Free Cash Flow GAAP Reconciliation | ||||||||
| (Unaudited) | ||||||||
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(in thousands) |
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| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2015 | 2014 | |||||||
| Net cash provided by operating activities | $ | 38,472 | $ | 26,812 | ||||
| Additions to rental fleet, excluding acquisitions | (10,480 | ) | (4,078 | ) | ||||
| Proceeds from sale of rental fleet units | 4,842 | 5,627 | ||||||
| Additions to property, plant and equipment, excluding acquisitions | (4,241 | ) | (2,628 | ) | ||||
| Proceeds from sale of property, plant and equipment | 607 | 908 | ||||||
| Net capital expenditures, excluding acquisitions | (9,272 | ) | (171 | ) | ||||
| Free cash flow | $ | 29,200 | $ | 26,641 | ||||
EBITDA and adjusted EBITDA. EBITDA is defined as net income before discontinued operation, net of tax (if applicable), interest expense, income taxes, depreciation and amortization, and debt restructuring or extinguishment expense (if applicable), including any write-off of deferred financing costs. Adjusted EBITDA further excludes certain non-cash expenses, including share-based compensation, as well as transactions that management believes are not indicative of our ongoing business. Because EBITDA and adjusted EBITDA, as defined, exclude some but not all items that affect our cash flow from operating activities, they may not be comparable to similarly titled performance measures presented by other companies.
We present EBITDA and adjusted EBITDA because we believe they provide useful information regarding our ability to meet our future debt payment requirements, capital expenditures and working capital requirements and that they provide an overall evaluation of our financial condition. EBITDA and adjusted EBITDA have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP.
EBITDA and adjusted EBITDA margins are calculated as EBITDA and adjusted EBITDA divided by total revenues expressed as a percentage. The GAAP financial measure that is most directly comparable to EBITDA margin is operating margin, which represents operating income divided by revenues.
Free Cash Flow. Free cash flow is defined as net cash provided by operating activities, minus or plus, net cash used in or provided by investing activities, excluding acquisitions and certain transactions. Free cash flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, the most directly comparable financial measure prepared in accordance with GAAP. We present free cash flow because we believe it provides useful information regarding our liquidity and ability to meet our short-term obligations. In particular, free cash flow indicates the amount of cash available after capital expenditures for, among other things, investments in our existing business, debt service obligations, payment of authorized quarterly dividends, repurchase of our common stock and strategic small acquisitions.
Earlier in this release, we provided a reconciliation of these adjusted measurements to actual results along with a reconciliation of net income to EBITDA and adjusted EBITDA, net cash provided by operating activities to EBTIDA and net cash provided by operating activities to free cash flow.
Mobile Mini, Inc.
Mark Funk, 602-308-3879
Executive VP & Chief Financial Officer
www.mobilemini.com
or
INVESTOR RELATIONS COUNSEL:
The Equity Group Inc.
Fred Buonocore, 212-836-9607
or
Linda Latman, 212-836-9609
