CAI International, Inc. Reports Results for the Second Quarter of 2013 and Receives BBB Unsecured Co
CAI International, Inc. Reports Results for the Second Quarter of 2013 and Receives BBB Unsecured Corporate Rating from Kroll Bond Rating Agency
SAN FRANCISCO--(BUSINESS WIRE)-- CAI International, Inc. (CAI) (NYS: CAP) , one of the world's leading lessors of intermodal freight containers, today reported results for the second quarter of 2013.
Highlights
CAI reported net income attributable to CAI common stockholders for the second quarter of 2013 of $16.9 million, a 12% increase compared to $15.1 million for the second quarter of 2012.
CAI reported rental revenue for the second quarter of 2013 of $48.4 million, an increase of 38% compared to the second quarter of 2012 and 4% compared to the first quarter of 2013, the 13th consecutive quarter of record rental revenue.
CAI reported net income attributable to CAI common stockholders for the second quarter of 2013 of $0.75 per fully diluted share, a 3% decrease compared to $0.77 for the second quarter of 2012. The average number of fully diluted shares in the quarter increased by 15% compared to the second quarter of 2012.
During the quarter CAI entered into two sale leaseback transactions with shipping customers for a total of approximately 32,000 TEUs of containers. The company also acquired approximately 27,000 TEUs of new containers during the quarter.
CAI has received a BBB unsecured corporate bond rating from Kroll Bond Rating Agency
Net income attributable to CAI common stockholders for the second quarter of 2013 was $16.9 million, a 12% increase compared to $15.1 million for the second quarter of 2012. Net income per fully diluted share attributable to CAI common stockholders for the second quarter of 2013 was $0.75, a 3% decrease compared to $0.77 for the second quarter of 2012; the 12% increase in net income being offset by a 15% increase in the number of fully diluted shares outstanding during the quarter.
Total revenue for the second quarter of 2013 was a record $53.0 million, compared to $39.7 million for the second quarter of 2012, an increase of 33%. Container rental revenue for the second quarter of 2013 was $48.4 million, compared to $35.1 million for the second quarter of 2012. The increase in container rental revenue was primarily due to an increase in the average number of TEUs of owned containers on lease. Management fee revenue for the second quarter of 2013 was $2.3 million, compared to $3.0 million for the second quarter of 2012, reflecting the reduction in the size of the managed fleet as CAI has acquired a number of its previously managed portfolios during the last twelve months. Finance lease income for the second quarter of 2013 increased to $2.3 million, from $1.6 million in the second quarter of 2012, as a result of new finance leases entered into during the last twelve months. Average fleet utilization was flat at 92.1% in the second quarter of 2013, compared to 92.2% in the first quarter.
Victor Garcia, Chief Executive Officer of CAI, commented, "Our results this quarter are consistent with our outlook in the first quarter conference call, when we had indicated delayed inquiries for new containers from shipping lines. However, as the second quarter progressed, customer inquiries increased and we experienced an increase in the lease-out of new equipment. Nonetheless, overall trade growth has not reached expected levels and consequently demand for new equipment has been weaker than we expected, resulting in a competitive rate environment. Despite the level of competition, we have been able to find attractive opportunities for investment. To date, we have invested in $265 million of equipment, approximately half of which has been portfolio repurchases and sale-leasebacks. Over the past three months, we have seen an increase in the level of railcar investment opportunities and at the moment we have a pipeline of $24 million of transactions that we expect to add to our rail fleet during the third quarter. These investments are largely in equipment on long-term leases at attractive lease rates. We expect to make additional railcar asset acquisitions over the remainder of the year."
Mr. Garcia continued, "We are very pleased to have been given a BBB unsecured bond rating from Kroll BondRatingsTM. We believe that an investment grade rating from Kroll BondRatingsTM will provide additional and more flexible financing opportunities to our company."
Mr. Garcia concluded, "As I stated, demand for containers has been softer this year than we had initially expected, which we believe reflects both the slow economic growth in the United States and Europe as well as the recent moderation of growth in China. However, the dynamics of global container supply/demand remain fairly balanced as can be seen by the continued relatively high level of utilization in our fleet and the increased pickup activity we have seen in recent weeks. While the overall demand outlook for new container growth has been somewhat below our expectations, we remain very profitable, with strong cash flows and net after tax income margins exceeding 30%. We continue to believe that the underlying fundamentals for our sector remain positive--high utilization, balanced supply/demand and tight credit markets for shipping companies--and that any uptick in overall economic activity, will result in an acceleration in the demand for new containers."
CAI International, Inc. | ||||||||||||
Consolidated Balance Sheets | ||||||||||||
(In thousands, except share information) | ||||||||||||
(UNAUDITED) | ||||||||||||
June 30, | December 31, | |||||||||||
2013 | 2012 | |||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash | $ | 33,588 | $ | 17,671 | ||||||||
Accounts receivable (owned fleet), net of allowance for doubtful accounts of $975 and $794 at June 30, 2013 and December 31, 2012, respectively | ||||||||||||
39,956 | 32,627 | |||||||||||
Accounts receivable (managed fleet) | 9,011 | 19,131 | ||||||||||
Current portion of direct finance leases | 12,196 | 10,625 | ||||||||||
Prepaid expenses | 15,760 | 11,952 | ||||||||||
Deferred tax assets | 2,189 | 2,189 | ||||||||||
Other current assets | 244 | 919 | ||||||||||
Total current assets | 112,944 | 95,114 | ||||||||||
Restricted cash | 9,763 | 4,376 | ||||||||||
Rental equipment, net of accumulated depreciation of $177,642 and $147,654 at June 30, 2013 and December 31, 2012, respectively | ||||||||||||
1,425,752 | 1,210,234 | |||||||||||
Net investment in direct finance leases | 64,887 | 74,929 | ||||||||||
Furniture, fixtures and equipment, net of accumulated depreciation of $1,437 and $1,254 at June 30, 2013 and December 31, 2012, respectively | ||||||||||||
1,657 | 1,847 | |||||||||||
Intangible assets, net of accumulated amortization of $7,881 and $7,447 at June 30, 2013 and December 31, 2012, respectively | ||||||||||||
979 | 1,441 | |||||||||||
Total assets | $ | 1,615,982 | $ | 1,387,941 | ||||||||
Liabilities and Stockholders' Equity | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable | $ | 5,834 | $ | 5,985 | ||||||||
Accrued expenses and other current liabilities | 8,633 | 8,465 | ||||||||||
Due to container investors | 12,732 | 18,589 | ||||||||||
Unearned revenue | 7,029 | 7,893 | ||||||||||
Current portion of debt | 68,280 | 61,044 | ||||||||||
Current portion of capital lease obligations | 1,948 | 2,242 | ||||||||||
Rental equipment payable | 21,427 | 2,561 | ||||||||||
Total current liabilities | 125,883 | 106,779 | ||||||||||
Debt | 1,067,488 | 888,990 | ||||||||||
Deferred income tax liability | 37,665 | 40,051 | ||||||||||
Capital lease obligations | 4,206 | 5,084 | ||||||||||
Income taxes payable | 192 | 192 | ||||||||||
Total liabilities | 1,235,434 | 1,041,096 | ||||||||||
Stockholders' equity | ||||||||||||
Common stock: par value $.0001 per share; authorized 84,000,000 shares; issued and outstanding 22,179,340 and 22,052,529 shares at June 30, 2013 and December 31, 2012, respectively | ||||||||||||
2 | 2 | |||||||||||
Additional paid-in capital | 182,758 | 181,063 | ||||||||||
Accumulated other comprehensive loss | (3,907 | ) | (2,917 | ) | ||||||||
Retained earnings | 201,695 | 168,697 | ||||||||||
Total stockholders' equity | 380,548 | 346,845 | ||||||||||
Total liabilities and stockholders' equity | $ | 1,615,982 | $ | 1,387,941 | ||||||||
CAI International, Inc. | ||||||||||||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||
Rental revenue | $ | 48,387 | $ | 35,101 | $ | 95,010 | $ | 67,588 | ||||||||||||||||||
Management fee revenue | 2,294 | 3,006 | 4,524 | 7,207 | ||||||||||||||||||||||
Gain on sale of container portfolios | - | - | - | 1,256 | ||||||||||||||||||||||
Finance lease income | 2,306 | 1,618 | 4,412 | 3,081 | ||||||||||||||||||||||
Total revenue | 52,987 | 39,725 | 103,946 | 79,132 | ||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||
Depreciation of rental equipment | 16,285 | 11,053 | 31,618 | 21,711 | ||||||||||||||||||||||
Amortization of intangible assets | 227 | 225 | 454 | 452 | ||||||||||||||||||||||
Gain on disposition of used rental equipment | (1,857 | ) | (3,225 | ) | (4,493 | ) | (6,320 | ) | ||||||||||||||||||
Storage, handling and other expenses | 4,333 | 1,762 | 8,632 | 3,768 | ||||||||||||||||||||||
Marketing, general and administrative expenses | 6,031 | 5,812 | 12,219 | 12,335 | ||||||||||||||||||||||
Loss (gain) on foreign exchange | 125 | (264 | ) | (175 | ) | (68 | ) | |||||||||||||||||||
Total operating expenses | 25,144 | 15,363 | 48,255 | 31,878 | ||||||||||||||||||||||
Operating income | 27,843 | 24,362 | 55,691 | 47,254 | ||||||||||||||||||||||
Interest expense | 8,955 | 6,320 | 17,359 | 12,256 | ||||||||||||||||||||||
Write-off of deferred financing costs | - | - | 1,108 | - | ||||||||||||||||||||||
Interest income | (1 | ) | (2 | ) | (4 | ) | (7 | ) | ||||||||||||||||||
Net interest expense | 8,954 | 6,318 | 18,463 | 12,249 | ||||||||||||||||||||||
Net income before income taxes and non-controlling interest | 18,889 | 18,044 | 37,228 | 35,005 | ||||||||||||||||||||||
Income tax expense | 1,958 | 2,396 | 4,230 | 4,901 | ||||||||||||||||||||||
Net income | 16,931 | 15,648 | 32,998 | 30,104 | ||||||||||||||||||||||
Net income attributable to non-controlling interest | - | (513 | ) | - | (578 | ) | ||||||||||||||||||||
Net income attributable to CAI common stockholders | $ | 16,931 | $ | 15,135 | $ | 32,998 | $ | 29,526 | ||||||||||||||||||
Net income per share attributable to | ||||||||||||||||||||||||||
CAI common stockholders | ||||||||||||||||||||||||||
Basic | $ | 0.76 | $ | 0.78 | $ | 1.49 | $ | 1.53 | ||||||||||||||||||
Diluted | $ | 0.75 | $ | 0.77 | $ | 1.45 | $ | 1.50 | ||||||||||||||||||
Weighted average shares outstanding | ||||||||||||||||||||||||||
