CAI International, Inc. Reports Record Results for the Third Quarter of 2012

CAI International, Inc. Reports Record Results for the Third Quarter of 2012

SAN FRANCISCO--(BUSINESS WIRE)-- CAI International, Inc. (CAI) (NYS: CAP) , one of the world's leading lessors of intermodal freight containers, today reported record results for the third quarter of 2012.

Highlights for the Third Quarter of 2012

  • CAI reported record net income attributable to CAI common stockholders for the third quarter of 2012 of $0.84 per fully diluted share, a 20% increase compared to $0.70 for the third quarter of 2011.

  • Rental revenue increased 15% compared to the second quarter of 2012, the 9th consecutive quarter of record rental revenue.

  • CAI leased out approximately 52,000 TEUs of containers during the quarter.

  • CAI's year-to-date investment and commitments for rental equipment is approximately $500 million.

  • Average fleet utilization increased slightly from 94.3% in the second quarter of 2012 to 94.8% in the third quarter of 2012.


Net income attributable to CAI common stockholders was $16.5 million for the third quarter of 2012, compared to $13.6 million for the third quarter of 2011, an increase of 21%.

Total revenue for the third quarter of 2012 was a record $44.9 million, compared to $33.0 million for the third quarter of 2011, an increase of 36%. Rental revenue for the third quarter of 2012 was $40.5 million, compared to $27.6 million for the third quarter of 2011, an increase of 47%. The increase in rental revenue was primarily due to a 44% increase in the average number of TEUs of owned containers on lease compared to the third quarter of 2011. Management fee revenue for the third quarter of 2012 was $2.5 million, compared to $3.1 million for the third quarter of 2011, primarily due to a 13% reduction in the average number of TEUs of managed equipment on lease as CAI has acquired a number of its previously managed portfolios over the course of the past year. CAI sold no container portfolios during the third quarter of 2012, compared to recording a gain on sale of container portfolios of $0.7 million in the third quarter of 2011. Finance lease income for the third quarter of 2012 increased to $2.0 million, from $1.6 million in the third quarter of 2011.

Victor Garcia, Chief Executive Officer of CAI, commented, "We are very pleased with the performance of our company this quarter. We achieved strong revenue and earnings growth, generating $16.5 million of net income, a 21% increase compared to the third quarter of 2011. Utilization has increased slightly during the quarter, and we believe utilization will remain strong for the remainder of 2012.

Demand for new containers is below normal for this time of year. We believe the limited demand for newly built containers is a result of the caution our customers are exercising in committing to additional equipment during a period of economic uncertainty. Consequently, there has been limited incremental investment in new container production, which we believe has kept the supply and demand of containers largely in balance resulting in continuing high utilization of the existing worldwide fleet and strong prices in the secondary container market. Despite the expected 5% global containerized trade growth forecasted this year by Clarkson Research, we expect production of containers for the full year to be below the 2011 level and to largely represent replacement need from our customers. As a result of this low level of new container production, we believe inventory levels at the factories are below what one would normally expect for this time of year, which is likely to lead to increased demand from our customers in 2013 to meet the expected containerized trade growth next year, estimated by Clarkson Research at 7%."

Mr. Garcia continued, "During the third quarter we invested approximately $150 million and expect our total investment in 2012 will exceed $500 million, another record year of investment for CAI. A significant part of our investment this year has been for sale-leasebacks from shipping lines and the acquisition of assets from our managed container fleet. In July, we acquired $10 million of railcars, bringing our total investment in railcars to $51 million. The third quarter was the first quarter in which we had any meaningful revenue from our rail investments, and these investments are already generating a positive earnings contribution."

Mr. Garcia concluded, "On October 18, we closed a $171 million asset backed securitization credit facility. The ten year fixed rate notes were priced at 3.47% to yield 3.50%, and the transaction was viewed favorably by the market. We were very pleased with the execution of this transaction as it provides CAI with very attractive long term fixed financing and access to an expected future source of funding. On October 19, we closed a transaction we announced in July, the acquisition of the Schroeder Dritte portfolio of approximately 71,000 TEUs for a net cost of approximately $84 million. We expect this transaction to contribute approximately $1 million to net income, or $0.04 per share, in the fourth quarter."

CAI International, Inc.

Consolidated Balance Sheets

(In thousands, except share information)

(UNAUDITED)

September 30,

December 31,

2012

2011

Assets

Current assets

Cash

$

15,211

$

14,078

Accounts receivable (owned fleet), net of allowance for doubtful accounts

of $681 and $819 at September 30, 2012 and December 31, 2011, respectively

30,421

26,381

Accounts receivable (managed fleet)

20,877

19,054

Current portion of direct finance leases

11,142

6,158

Prepaid expenses

9,385

7,079

Deferred tax assets

1,968

1,968

Other current assets

277

185

Total current assets

89,281

74,903

Restricted cash

-

599

Rental equipment, net of accumulated depreciation of $135,550 and

$109,336 at September 30, 2012 and December 31, 2011, respectively

1,120,139

841,847

Net investment in direct finance leases

72,809

31,591

Furniture, fixtures and equipment, net of accumulated depreciation of

$1,210 and $1,006 at September 30, 2012 and December 31, 2011, respectively

1,979

2,095

Intangible assets, net of accumulated amortization of $7,189 and $6,519

at September 30, 2012 and December 31, 2011, respectively

1,650

2,333

Total assets

$

1,285,858

$

953,368

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$

5,848

$

3,536

Accrued expenses and other current liabilities

9,253

5,761

Due to container investors

20,779

20,113

Unearned revenue

8,630

6,786

Current portion of debt

39,387

25,764

Current portion of capital lease obligations

2,624

3,792

Rental equipment payable

56,867

13,301

Total current liabilities

143,388

79,053

Debt

825,687

575,014

Deferred income tax liability

33,934

33,816

Capital lease obligations

5,385

16,480

Income taxes payable

269

269

Total liabilities

1,008,663

704,632

Stockholders' equity

Common stock: par value $.0001 per share; authorized 84,000,000 shares; issued and

outstanding 19,295,359 shares at September 30, 2012 and December 31, 2011, respectively

2

2

Additional paid-in capital

129,180

128,183

Accumulated other comprehensive loss

(3,273

)

(3,381

)

Retained earnings

151,286

105,232

Total CAI stockholders' equity

277,195

230,036

Non-controlling interest

-

18,700

Total stockholders' equity

277,195

248,736

Total liabilities and stockholders' equity

$

1,285,858

$

953,368

CAI International, Inc.

Consolidated Statements of Income

(In thousands, except per share data)

(UNAUDITED)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2012

2011

2012

2011

Revenue

Rental revenue

$

40,473

$

27,593

$

108,061

$

74,689

Management fee revenue

2,492

3,065

9,699

9,855

Gain on sale of container portfolios

-

682

1,256

2,345

Finance lease income

1,974

1,622

5,055

2,574

Total revenue

44,939

32,962

124,071

89,463

Operating expenses

Depreciation of rental equipment

12,495

8,544

34,206

22,726

Amortization of intangible assets

224

339

676

1,025

Gain on disposition of used rental equipment

(2,491

)

(3,751

)

(8,811

)

(10,151

)

Storage, handling and other expenses

2,197

1,064

5,965

3,519

Marketing, general and administrative expenses

6,275

5,317

18,610

15,436

Loss (gain) on foreign exchange

193

(239

)

125

(216

)

Total operating expenses

18,893

11,274

50,771

32,339

Operating income

26,046

21,688

73,300

57,124

Interest expense

7,179

4,300

19,435

10,803

Interest income

(1

)

(2

)

(8

)

(6

)

Net interest expense

7,178

4,298

19,427

10,797

Net income before income taxes and non-controlling interest

18,868

17,390

53,873

46,327

Income tax expense

2,102

3,585

7,003

8,436

Net income

16,766

13,805

46,870

37,891

Net income attributable to non-controlling interest

(238

)

(183

)

(816

)

(593

)

Net income attributable to CAI common stockholders

$

16,528

$

13,622

$

46,054

$

37,298

Net income per share attributable to

CAI common stockholders

Basic

$

0.86

$

0.71

$

2.39

$

1.93

Diluted

$

0.84

$

0.70

$

2.33

$

1.89

Weighted average shares outstanding

Basic

19,295

19,295

19,295

19,295

Diluted

19,764

19,581

19,730

19,727

CAI International, Inc.

Fleet Data

(UNAUDITED)

As of September 30,

2012

2011

Owned container fleet in TEUs

616,257

425,438

Managed container fleet in TEUs

444,906

476,141

Total container fleet in TEUs

1,061,163

901,579

Owned railcar fleet in units

1,393

-

Conference Call

A conference call to discuss the financial results for the third quarter of 2012 will be held on Monday, October 22, 2012 at 5:00 p.m. ET. The dial-in number for the teleconference is 1-888-398-8098; outside of the U.S., call 1-707-287-9363. The call may be accessed live over the Internet (listen only) under the "Investors" tab of CAI's website, www.capps.com, by selecting "Q3 2012 Earnings Conference Call." A webcast replay will be available for 30 days on the "Investors" tab of our website.

About CAI International, Inc.

CAI is one of the world's leading managers and lessors of intermodal freight containers. As of September 30, 2012, CAI operated a worldwide fleet of approximately 1,061,000 TEUs of containers through 16 offices located in 12 countries including the United States.

This press release contains forward-looking statements regarding future events and the future performance of CAI International, Inc. These statements are forward looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and involve risks and uncertainties that could cause actual results of operations and other performance measures to differ materially from current expectations, including, but not limited to, utilization rates, expected economic conditions, availability of credit on commercially favorable terms or at all, customer demand, container investment levels, container production levels, container prices, lease rates, increased competition, volatility in exchange rates, growth in world trade and world container trade, contribution to net income of the Schroeder Dritte portfolio, and others. CAI refers you to the documents that it has filed with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2011 and its interim reports on Form 10-Q and its reports on Form 8-K. These documents contain additional important factors that could cause actual results to differ from current expectations and from forward-looking statements contained in this press release. Furthermore, CAI is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements contained in this press release whether as a result of new information, future events or otherwise, unless required by law.



CAI International, Inc.
Tim Page, Chief Financial Officer
415-788-0100
tpage@capps.com

KEYWORDS: United States North America California

INDUSTRY KEYWORDS:

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