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