CAI International, Inc. Reports Results for the Fourth Quarter and Full Year of 2012
CAI International, Inc. Reports Results for the Fourth Quarter and Full Year 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 fourth quarter and full year of 2012.
Highlights for the Fourth Quarter and Full Year of 2012
CAI reported record net income attributable to CAI common stockholders for the fourth quarter of 2012 of $0.85 per fully diluted share, a 29% increase compared to $0.66 for the fourth quarter of 2011.
For the full year of 2012, CAI reported record net income attributable to CAI common stockholders of $3.18 per fully diluted share, a 25% increase compared to $2.55 reported in 2011.
Rental revenue for the fourth quarter of 2012 increased 40% compared to the fourth quarter of 2011 and 11% compared to the third quarter of 2012, the 11th consecutive quarter of record rental revenue.
CAI invested a record $522 million in rental equipment in 2012.
During October 2012, CAI completed the acquisition of approximately 71,000 TEUs of containers, for a net cost of $83.6 million, from German investors. Prior to the purchase, CAI managed these containers on behalf of the previous owners.
During October 2012, CAI issued $171.0 million of 3.47% fixed rate asset-backed notes, the proceeds from which were used to repay part of the Company's borrowings under its revolving credit facility.
During December 2012 CAI issued approximately 2.8 million shares of common stock in a follow-on public offering and received proceeds of $51.5 million, net of fees and expenses.
Net income attributable to CAI common stockholders for the fourth quarter of 2012 was $17.4 million, compared to $12.9 million for the fourth quarter of 2011, an increase of 35%. Net income attributable to CAI common stockholders for the year ended December 31, 2012 was $63.5 million, compared to $50.2 million for the year ended December 31, 2011, an increase of 26%.
Total revenue for the fourth quarter of 2012 was $49.9 million, compared to $36.2 million for the fourth quarter of 2011, an increase of 38%. Rental revenue for the fourth quarter of 2012 was $44.9 million, compared to $32.0 million for the fourth quarter of 2011, an increase of 40%. The increase in rental revenue was primarily due to an increase in the average number of TEUs of owned containers on lease. Management fee revenue for the fourth quarter of 2012 was $2.4 million, compared to $3.1 million for the fourth quarter of 2011, primarily due to a 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. Finance lease income for the fourth quarter of 2012 increased to $2.5 million, from $1.1 million in the fourth quarter of 2011, reflective of new finance leases entered into during 2012.
Total revenue for the year ended December 31, 2012 was $173.9 million, compared to $125.7 million for 2011, an increase of 38%. Rental revenue for the year ended December 31, 2012 was $153.0 million, compared to $106.7 million for 2011, an increase of 43%. 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 2011. Management fee revenue for the year ended December 31, 2012 was $12.1 million, compared to $13.0 million for 2011, primarily due to a reduction in the average number of TEUs of managed equipment on lease. Gain on sale of container portfolios for the year ended December 31, 2012 was $1.3 million, compared to $2.3 million for 2011. Finance lease income for the year ended December 31, 2012 increased to $7.6 million, from $3.7 million in 2011.
Victor Garcia, Chief Executive Officer of CAI, commented, "2012 was an excellent year for our company. We achieved strong revenue and earnings growth, generating $63.5 million of net income, a 26% increase compared to 2011. During the year we invested more than $520 million in equipment, a record level for CAI. In addition to investment in new containers, we were able to finalize a number of other very attractive investment opportunities, including sale leaseback transactions with our shipping customers and the purchase of container portfolios from our managed fleet. While our overall fleet utilization softened slightly during 2012 from the record levels seen in 2010 and 2011, it remained robust at an average for the year of 94.2%.
"The fourth quarter of 2012 saw the normal seasonal pattern of softening utilization, our average utilization dropping from 94.8% in the third quarter to 93.4% in the fourth quarter. At the end of the year, the utilization of our fleet was 92.5%. Our utilization in the first quarter of 2013 has stabilized around that level and we believe utilization will increase over the remainder of the quarter and into the second quarter based on increasing demand for equipment by our customers.
Mr. Garcia continued, "During December 2012, we closed a public offering of our stock from which we received proceeds of more than $50 million. The new equity provides the Company with sufficient financial resources to pursue additional market opportunities in 2013. We expect that by the end of the first quarter of 2013 we will have invested approximately $100 million in portfolio purchases and sale leaseback opportunities that will begin generating income in the second quarter of 2013. To serve our customers' needs, we are also investing in new containers as we believe demand in the second quarter will be strong. We expect 2013 will be a strong year for investment, revenue and earnings, with first quarter net income below that of the fourth quarter of 2012, due substantially to the normal seasonal decline in utilization and the limited impact new investment will have on the quarter's revenue.
Mr. Garcia concluded, "We believe the prospects for new container investment in 2013 for CAI and the container leasing industry remain compelling. The second half of 2012 saw a limited amount of new container production, which we believe resulted in below normal industry-wide levels of new container inventory at the factories for this time of year. At the same time, we expect a recovery in global trade; Clarkson Research has estimated that containerized trade will grow by approximately 6% in 2013, as compared to a growth rate of 4% in 2012. Expected trade growth, continued high utilization levels of lessor fleets and our belief that many shipping companies will continue to have limited budgets for container purchases in the coming year, are all factors that we believe will lead to a strong market for our continued investment in new containers. We believe that a strong market for new container investment, combined with a continuation of opportunities for sale leasebacks with customers and the repurchase of managed portfolios, will lead to continued strong growth in revenue and profitability for CAI in 2013."
CAI International, Inc. | ||||||||
Consolidated Balance Sheets | ||||||||
(In thousands, except share information) | ||||||||
(UNAUDITED) | ||||||||
December 31, | December 31, | |||||||
2012 | 2011 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash | $ | 17,671 | $ | 14,078 | ||||
Accounts receivable (owned fleet), net of allowance for doubtful accounts | ||||||||
of $794 and $819 at December 31, 2012 and 2011, respectively | 32,627 | 26,381 | ||||||
Accounts receivable (managed fleet) | 19,131 | 19,054 | ||||||
Current portion of direct finance leases | 10,625 | 6,158 | ||||||
Prepaid expenses | 11,952 | 7,079 | ||||||
Deferred tax assets | 2,189 | 1,968 | ||||||
Other current assets | 919 | 185 | ||||||
Total current assets | 95,114 | 74,903 | ||||||
Restricted cash | 4,376 | 599 | ||||||
Rental equipment, net of accumulated depreciation of $147,654 and | ||||||||
$109,336 at December 31, 2012 and 2011, respectively | 1,210,234 | 841,847 | ||||||
Net investment in direct finance leases | 74,929 | 31,591 | ||||||
Furniture, fixtures and equipment, net of accumulated depreciation of | ||||||||
$1,254 and $1,006 at December 31, 2012 and 2011, respectively | 1,847 | 2,095 | ||||||
Intangible assets, net of accumulated amortization of $7,447 and $6,519 | ||||||||
at December 31, 2012 and 2011, respectively | 1,441 | 2,333 | ||||||
Total assets | $ | 1,387,941 | $ | 953,368 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 5,985 | $ | 3,536 | ||||
Accrued expenses and other current liabilities | 8,465 | 5,761 | ||||||
Due to container investors | 18,589 | 20,113 | ||||||
Unearned revenue | 7,893 | 6,786 | ||||||
Current portion of debt | 61,044 | 25,764 | ||||||
Current portion of capital lease obligations | 2,242 | 3,792 | ||||||
Rental equipment payable | 2,561 | 13,301 | ||||||
Total current liabilities | 106,779 | 79,053 | ||||||
Debt | 888,990 | 575,014 | ||||||
Deferred income tax liability | 40,051 | 33,816 | ||||||
Capital lease obligations | 5,084 | 16,480 | ||||||
Income taxes payable | 192 | 269 | ||||||
Total liabilities | 1,041,096 | 704,632 | ||||||
Stockholders' equity | ||||||||
Common stock: par value $.0001 per share; authorized 84,000,000 shares; issued and | ||||||||
outstanding 22,052,529 and 19,295,359 shares at December 31, 2012 and 2011, respectively | 2 | 2 | ||||||
Additional paid-in capital | 181,063 | 128,183 | ||||||
Accumulated other comprehensive loss | (2,917 | ) | (3,381 | ) | ||||
Retained earnings | 168,697 | 105,232 | ||||||
Total CAI stockholders' equity | 346,845 | 230,036 | ||||||
Non-controlling interest | - | 18,700 | ||||||
Total stockholders' equity | 346,845 | 248,736 | ||||||
Total liabilities and stockholders' equity | $ | 1,387,941 | $ | 953,368 | ||||
CAI International, Inc. | ||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenue | ||||||||||||||||
Rental revenue | $ | 44,921 | $ | 32,005 | $ | 152,982 | $ | 106,694 | ||||||||
Management fee revenue | 2,395 | 3,102 | 12,094 | 12,957 | ||||||||||||
Gain on sale of container portfolios | - | - | 1,256 | 2,345 | ||||||||||||
Finance lease income | 2,538 | 1,136 | 7,593 | 3,710 | ||||||||||||
Total revenue | 49,854 | 36,243 | 173,925 | 125,706 | ||||||||||||
Operating expenses | ||||||||||||||||
Depreciation of rental equipment | 14,146 | 10,907 | 48,352 | 33,633 | ||||||||||||
Amortization of intangible assets | 226 | 229 | 902 | 1,254 | ||||||||||||
Gain on disposition of used rental equipment | (3,634 | ) | (3,223 | ) | (12,445 | ) | (13,374 | ) | ||||||||
Storage, handling and other expenses | 3,437 | 1,994 | 9,402 | 5,513 | ||||||||||||
Marketing, general and administrative expenses | 6,048 | 5,573 | 24,658 | 21,009 | ||||||||||||
Loss (gain) on foreign exchange | 45 | (138 | ) | 170 | (354 | ) | ||||||||||
Total operating expenses | 20,268 | 15,342 | 71,039 | 47,681 | ||||||||||||
Operating income | 29,586 | 20,901 | 102,886 | 78,025 | ||||||||||||
Interest expense | 9,361 | 5,336 | 28,796 | 16,139 | ||||||||||||
Interest income | (1 | ) | (6 | ) | (9 | ) | (12 | ) | ||||||||
Net interest expense | 9,360 | 5,330 | 28,787 | 16,127 | ||||||||||||
Net income before income taxes and non-controlling interest | 20,226 | 15,571 | 74,099 | 61,898 | ||||||||||||
Income tax expense | 2,815 | 2,648 | 9,818 | 11,084 | ||||||||||||
Net income | 17,411 | 12,923 | 64,281 | 50,814 | ||||||||||||
Net income attributable to non-controlling interest | - | (32 | ) | (816 | ) | (625 | ) | |||||||||
Net income attributable to CAI common stockholders | $ | 17,411 | $ | 12,891 | $ | 63,465 | $ | 50,189 | ||||||||
Net income per share attributable to CAI common stockholders | ||||||||||||||||
Basic | $ | 0.87 | $ | 0.67 | $ | 3.26 | $ | 2.60 | ||||||||
Diluted | $ | 0.85 | $ | 0.66 | $ | 3.18 | $ | 2.55 | ||||||||
Weighted average shares outstanding | ||||||||||||||||
Basic | 20,090 | 19,295 | 19,495 | 19,295 | ||||||||||||
Diluted | 20,581 | 19,564 | 19,945 | 19,693 | ||||||||||||
CAI International, Inc. | |||
Fleet Data | |||
(UNAUDITED) | |||
As of December 31, | |||
2012 | 2011 | ||
Owned container fleet in TEUs | 704,417 | 458,254 | |
Managed container fleet in TEUs | 359,133 | 470,401 | |
Total container fleet in TEUs | 1,063,550 | 928,655 | |
Owned railcar fleet in units | 1,456 | - | |
Conference Call
A conference call to discuss the financial results for the fourth quarter of 2012 will be held on Wednesday, February 13, 2013 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 "Q4 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 December 31, 2012, CAI operated a worldwide fleet of approximately 1,064,000 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, our ability to secure new agreements for container purchases and sale leaseback opportunities by the end of Q1 2013, 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, 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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