Mobile Mini Reports Q2'13 Results
Mobile Mini Reports Q2'13 Results
TEMPE, Ariz.--(BUSINESS WIRE)-- Mobile Mini, Inc. (NASDAQ GS: MINI), the world's leading supplier of portable storage solutions, today reported actual and adjusted financial results for the quarter ended June 30, 2013. Total revenues were $97.5 million and leasing revenues were $88.2 million, up from $93.2 million and $81.9 million, respectively, for the same period last year.
The Company recorded a second quarter net loss of $(14.4) million, or $(0.32) per share, due to a charge of $40.3 million, of which $39.7 million was non-cash, related to the impairment of certain leasing and other assets determined to be either non-core or uneconomic to repair. Excluding this charge, adjusted net income was $11.6 million, or $0.25 per adjusted diluted share, compared with $7.5 million, or $0.17 per adjusted diluted share for the second quarter of 2012.
Adjusted EBITDA was $38.1 million for the second quarter of 2013, compared with $33.0 million for the same period last year. Adjusted EBITDA margin was 39.1% for the second quarter of 2013, compared with 35.4% in the second quarter of 2012. The increase in profitability and margin reflects stronger utilization, higher yield including improved pricing, and leveraging of operating expenses.
Second Quarter 2013 Highlights
Grew leasing revenues 7.7% year-over-year to $88.2 million, an all-time second quarter high and the tenth consecutive quarter of comparable period growth in leasing revenues.
Improved yield by 3.2%, including an average rental rate increase of 2.1% versus the prior year, to an all-time second quarter high of $617.
Generated a 15.4% year-over-year increase in adjusted EBITDA.
Increased average fleet utilization to 62.0%, up 430 bps from the second quarter of 2012 on strengthening demand from both non-construction and construction end markets.
Delivered strong free cash flow of $18.3 million, after $7.1 million of net capex, which was the 22nd consecutive quarter of positive free cash flow.
Reduced net debt by $22.7 million in the second quarter and $53.6 million year-to-date.
Erik Olsson, Mobile Mini's President and Chief Executive Officer, commented, "We generated further improvement in utilization during the second quarter, which resulted in solid comparable period leasing revenue growth and increased profitability. In addition, we saw increased momentum beginning in June and continuing into the third quarter. We expect these favorable trends to continue through the second half of 2013, and into 2014, particularly as we hone our sales efforts and seek to expand our geographic footprint."
The Company completed a review of its lease fleet and related assets in the second quarter and decided to liquidate units that were deemed to be either non-core or uneconomic to repair. The impairment totaled $40.3 million, of which $14.9 million was related to core storage containers. The net impairment charge related to the lease fleet represents only 3.3% of the total lease fleet's net book value. However, removing these non-rentable assets had the positive impact of improving utilization by 4.3 percentage points to 67.4% at the end of the second quarter. Excluding the effect of the impairment, utilization at June 30, 2013 improved 4.2 percentage points to 63.1%, compared to 58.9% at the end of the second quarter of 2012. This non-cash charge does not change the Company's earnings outlook, liquidity position, medium-term capital expenditure needs or free cash flow generation.
Mr. Olsson continued, "With a strategic focus on increasing return on capital and a move towards a rent-ready business model, removing these underperforming assets and investing resources toward improving fleet quality and availability positions us well for future growth. As utilization continues to rise, we expect this streamlining of our fleet to have meaningful benefits in the form of increased yard productivity, a safer work environment, and reduced real estate needs, which should further enhance our financial performance over time."
EBITDA, Adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, adjusted net income, adjusted diluted EPS, and free cash flow are non-GAAP financial measures as defined by Securities and Exchange Commission ("SEC") rules. Reconciliations of these measurements to the most directly comparable GAAP financial measures can be found later in this release.
Conference Call
Mobile Mini will host a conference call today, Friday, August 9, 2013, 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 and the reconciliation of non-GAAP financial measures used in the slide show to the most directly comparable GAAP financial measures 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.
Mobile Mini, Inc. is the world's leading provider of portable storage solutions through its total lease fleet of over 215,000 portable storage containers and office units with 137 locations in the U.S., United Kingdom, Canada and The Netherlands. Mobile Mini is included on the Russell 2000® and 3000® Indexes and the S&P Small Cap Index.
This news release contains forward-looking statements, particularly regarding growth trends, enhanced financial performance, ability to penetrate existing markets and expand our footprint, increases in operating leverage, increases in revenue and profitability, yard productivity, safety and utilization, and decreased real estate needs, 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. Condensed Consolidated Statements of Operations (Unaudited)/(in thousands except per share data)/(includes effects of rounding) | |||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||
2013 | 2013 | 2012 | 2012 | ||||||||||||||||
Revenues: | Actual | Adjusted (1) | Actual | Adjusted (1) | |||||||||||||||
Leasing | $ | 88,224 | $ | 88,224 | $ | 81,924 | $ | 81,924 | |||||||||||
Sales | 8,850 | 8,850 | 10,749 | 10,749 | |||||||||||||||
Other | 448 | 448 | 547 | 547 | |||||||||||||||
Total revenues | 97,522 | 97,522 | 93,220 | 93,220 | |||||||||||||||
Costs and expenses: | |||||||||||||||||||
Cost of sales | 5,668 | 5,668 | 6,580 | 6,580 | |||||||||||||||
Leasing, selling and general expenses (2) | 57,477 | 57,477 | 55,377 | 55,332 | |||||||||||||||
Merger and restructuring expenses (3) | 343 | - | 267 | - | |||||||||||||||
Asset impairment charge (4) | 40,277 | - | - | - | |||||||||||||||
Depreciation and amortization | 8,833 | 8,833 | 9,131 | 9,131 | |||||||||||||||
Total costs and expenses | 112,598 | 71,978 | 71,355 | 71,043 | |||||||||||||||
(Loss) income from operations | (15,076 | ) | 25,544 | 21,865 | 22,177 | ||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | - | - | 1 | 1 | |||||||||||||||
Interest expense | (7,455 | ) | (7,455 | ) | (10,182 | ) | (10,182 | ) | |||||||||||
Foreign currency exchange | - | - | (2 | ) | (2 | ) | |||||||||||||
(Loss) income before (benefit from) provision for income taxes | (22,531 | ) | 18,089 | 11,682 | 11,994 | ||||||||||||||
(Benefit from) provision for income taxes | (8,150 | ) | 6,446 | 4,370 | 4,462 | ||||||||||||||
Net (loss) income | $ | (14,381 | ) | $ | 11,643 | $ | 7,312 | $ | 7,532 | ||||||||||
(Loss) earnings per share: | |||||||||||||||||||
Basic | $ | (0.32 | ) | $ | 0.26 | $ | 0.16 | $ | 0.17 | ||||||||||
Diluted | $ | (0.32 | ) | $ | 0.25 | $ | 0.16 | $ | 0.17 | ||||||||||
Weighted average number of common and common share equivalents outstanding: | |||||||||||||||||||
Basic | 45,420 | 45,420 | 44,627 | 44,627 | |||||||||||||||
Diluted | 45,420 | 46,018 | 44,952 | 44,952 | |||||||||||||||
EBITDA | $ | (6,243 | ) | $ | 38,120 | $ | 30,995 | $ | 33,037 | ||||||||||
(1) | This column represents a non-GAAP presentation even though some individual line items presented, such as revenues, are identical under both GAAP and the adjusted presentations. | |
(2) | In 2012, the difference relates to acquisition activity costs that are excluded in the adjusted presentation. | |
(3) | Merger and restructuring expenses represent costs relating primarily to the restructuring of our operations that are excluded in the adjusted presentation. | |
(4) | Represents the impairment charge primarily for the write down on certain assets classified as held for sale that is excluded in the adjusted presentation. |
Mobile Mini, Inc. Condensed Consolidated Statements of Operations (Unaudited)/(in thousands except per share data)/(includes effects of rounding) | |||||||||||||||||||
Six Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||
2013 | 2013 | 2012 | 2012 | ||||||||||||||||
Revenues: | Actual | Adjusted (1) | Actual | Adjusted (1) | |||||||||||||||
Leasing | $ | 173,290 | $ | 173,290 | $ | 160,368 | $ | 160,368 | |||||||||||
Sales | 21,312 | 21,312 | 20,554 | 20,554 | |||||||||||||||
Other | 861 | 861 | 1,048 | 1,048 | |||||||||||||||
Total revenues | 195,463 | 195,463 | 181,970 | 181,970 | |||||||||||||||
Costs and expenses: | |||||||||||||||||||
Cost of sales | 14,352 | 14,352 | 12,478 | 12,478 | |||||||||||||||
Leasing, selling and general expenses (2) | 110,610 | 110,610 | 108,964 | 108,825 | |||||||||||||||
Merger and restructuring expenses (3) | 718 | - | 763 | - | |||||||||||||||
Asset impairment charge (4) | 40,277 | - | - | - | |||||||||||||||
Depreciation and amortization | 17,644 | 17,644 | 18,145 | 18,145 | |||||||||||||||
Total costs and expenses | 183,601 | 142,606 | 140,350 | 139,448 | |||||||||||||||
Income from operations | 11,862 | 52,857 | 41,620 | 42,522 | |||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | - | - | 1 | 1 | |||||||||||||||
Interest expense | (15,006 | ) | (15,006 | ) | (20,799 | ) | (20,799 | ) | |||||||||||
Deferred financing costs write-off (5) | - | - | (692 | ) | - | ||||||||||||||
Foreign currency exchange | (1 | ) | (1 | ) | (3 | ) | (3 | ) | |||||||||||
(Loss) income before (benefit from) provision for income taxes | (3,145 | ) | 37,850 | 20,127 | 21,721 | ||||||||||||||
(Benefit from) provision for income taxes | (806 | ) | 13,934 | 7,605 | 8,166 | ||||||||||||||
Net (loss) income | $ | (2,339 | ) | $ | 23,916 | $ | 12,522 | $ | 13,555 | ||||||||||
(Loss) earnings per share: | |||||||||||||||||||
Basic | $ | (0.05 | ) | $ | 0.53 | $ | 0.28 | $ | 0.30 | ||||||||||
Diluted | $ | (0.05 | ) | $ | 0.52 | $ | 0.28 | $ | 0.30 | ||||||||||
Weighted average number of common and common share equivalents outstanding: | |||||||||||||||||||
Basic | 45,334 | 45,334 | 44,558 | 44,558 | |||||||||||||||
Diluted | 45,334 | 45,876 | 45,006 | 45,006 | |||||||||||||||
EBITDA | |||||||||||||||||||
