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Mobile Mini Reports Q3’16 Results and Announces Quarterly Dividend

October 25, 2016

PHOENIX--(BUSINESS WIRE)--Oct. 25, 2016-- Mobile Mini, Inc. (NASDAQ GS: MINI) (the “Company” or “Mobile Mini”), the world’s leading supplier of portable storage solutions and a leading provider of specialty containment solutions in the United States, today reported actual and adjusted financial results for the quarter ended September 30, 2016. Total revenues were $128.9 million and rental revenues were $121.8 million, as compared to $133.3 million and $124.8 million, respectively, for the same period last year.

Rental revenues for the portable storage and specialty containment businesses for the current quarter were $97.7 million and $24.1 million, respectively.

The Company recorded net income of $12.7 million, or $0.29 per diluted share, in the third quarter of 2016, as compared to net income of $14.0 million, or $0.31 per diluted share, for the third quarter of 2015. On an adjusted basis, third quarter net income was $13.7 million, or $0.31 per diluted share, compared to adjusted net income of $16.0 million, or $0.35 per diluted share, for the third quarter of 2015. Adjusted EBITDA was $46.7 million and adjusted EBITDA margin was 36.2% for the third quarter of 2016.

Dividend

The Company’s Board of Directors declared a cash dividend of 20.6 cents per share, which will be paid on November 30, 2016 to shareholders of record on November 9, 2016.

Third Quarter 2016 Highlights

  • Achieved all-time high quarterly portable storage core activations, resulting in an all-time high for units on rent as of September 30, 2016.
  • Increased portable storage rental revenues 2.4% year-over-year on a constant currency basis. Including the impact of unfavorable currency fluctuations, portable storage rental revenues decreased 1.2%.
  • Increased portable storage rental rates by 2.4% year-over-year and 0.8% over the second quarter of 2016; rates on new rentals were up 2.3% year-over-year.
  • Grew downstream specialty containment rental revenues year-over-year and sequentially, achieving the highest quarterly rental revenues since the December 2014 acquisition of this business.
  • Delivered adjusted EBITDA of $46.7 million, with an adjusted EBITDA margin of 36.2%.
  • Drove portable storage unit utilization to an average of 70.5% during the quarter and to 73.6% as of quarter-end.
  • Produced specialty containment average utilization of 64.2%, when calculated using original equipment cost, an increase from 63.5% in the second quarter of 2016.
  • Experienced higher inside sales representative (“ISR”) turnover, resulting in lower sales productivity and flat headcount for the quarter.

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “We continue to be strongly positioned in both the portable storage and specialty containment markets. Portable storage pricing increased a solid 2.4% this quarter compared to the prior-year period, marking the fifteenth quarter in a row we have achieved year-over-year increases. To drive additional top-line growth, our immediate focus is on executing our salesforce model and providing the tools to our inside sales representatives to ensure their success. I am pleased to say that we saw an improvement in ISR headcount towards the end of the quarter, reaching a total of 214 ISRs as of today.”

Mr. Olsson continued, “In our specialty containment business, downstream rental revenues were up a healthy 5%, compared to the prior-year quarter. However, continued weak commodity prices along with the upstream headwinds negatively impacted our remaining specialty containment lines, resulting in an overall 7% decrease in rental revenues for this business. With that said, I am happy to report that sequentially, specialty containment revenues increased 6%.”

Conference Call

Mobile Mini will host a conference call today, Tuesday, October 25, 2016 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 will be posted at www.mobilemini.com on the Investor Relations 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.

About Mobile Mini, Inc.

Mobile Mini, Inc. is the world’s leading provider of portable storage solutions through its total rental fleet of approximately 208,000 portable storage containers and office units. Through its wholly-owned subsidiary, Evergreen Tank Solutions, Mobile Mini is also a leading provider of specialty containment solutions in the U.S., with a rental fleet of approximately 12,100 units. Mobile Mini’s network is comprised of 157 locations in the U.S., U.K., and Canada. Mobile Mini is included on the Russell 2000® and 3000® Indexes and the S&P Small Cap Index.

Forward-Looking Statements

This news release contains forward-looking statements, including, but not limited to, our ability to continue to be strongly positioned in both the portable storage and specialty containment markets, execute our salesforce model and provide tools to our ISRs to ensure their success, and continue to increase our ISR headcount and drive topline growth, 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 filings with the Securities and Exchange Commission (“SEC”). 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 Income
(Unaudited)
(in thousands, except per share data)

 
      Three Months Ended September 30, 2016   Three Months Ended September 30, 2015
Actual   Adjustments   Adjusted (1) Actual   Adjustments   Adjusted (2)
 
Revenues:
Rental $ 121,784 $ $ 121,784 $ 124,813 $ $ 124,813
Sales 6,610 6,610 6,594 6,594
Other  

459

    459   1,936   (1,455

)

 

  481  
Total revenues   128,853     128,853   133,343   (1,455 )   131,888  
 
Costs and expenses:
Rental, selling and general expenses 80,457 80,457 81,659 (2,822 ) 78,837
Cost of sales 3,897 3,897 4,366 4,366
Restructuring expenses 1,648 (1,648

)

1,846 (1,846 )
Depreciation and amortization   16,184     16,184   14,998     14,998  
Total costs and expenses   102,186   (1,648 )   100,538   102,869   (4,668 )   98,201  
 
Income from operations 26,667 1,648 28,315 30,474 3,213 33,687
 
Other expense:
Interest income 1 1
Interest expense (8,047 ) (8,047 ) (8,960 ) (8,960 )
Foreign currency exchange   (5

)

    (5

)

 

       
 
Income before income tax provision 18,615 1,648 20,263 21,515 3,213 24,728
 
Income tax provision 5,906 632 6,538 7,536 1,216 8,752
                       
Net income $ 12,709 $ 1,016 $ 13,725 $ 13,979 $ 1,997 $ 15,976  
 
EBITDA/Adjusted EBITDA $ 42,846 $ 46,650 $ 45,473 $ 52,104

EBITDA/Adjusted EBITDA as a percentage of
total revenues

33.3 % 36.2 % 34.1 % 39.5 %
 
Earnings per share:
Basic $ 0.29 $ 0.31 $ 0.31 $ 0.36
Diluted 0.29 0.31 0.31 0.35
 

Weighted average number of common and

common share equivalents outstanding:

Basic 44,159 44,159 44,721 44,721
Diluted 44,453 44,453 45,147 45,147
 
(1)     Adjusted column for the three months ended September 30, 2016 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP (defined herein) presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the three-month period ended September 30, 2016 related to the restructuring of our business operations, along with the related tax effects.
 
(2) Adjusted column for the three months ended September 30, 2015 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the three-month period ended September 30, 2015 include the following, along with the related tax effects:

 

Reduction of other revenue by $1.5 million to exclude transition services revenue associated with the divestiture of our North American wood mobile office business in May 2015.

Reduction of $2.2 million in rental, selling and general expenses to exclude operating expenses associated with the provision of transition services for our North American wood mobile office business, including expenses related to wood mobile offices on our leased properties.

Reduction of $0.4 million in rental, selling and general expenses for acquisition-related expenses, primarily due to our acquisition of Evergreen Tank Solutions in December 2014.

Reduction of $0.2 million in rental, selling and general expenses to exclude costs related to the settlement of a potential unclaimed property liability with the state of Delaware.

Exclusion of costs of $1.8 million related to the restructuring of our business operations.
 
 

Mobile Mini, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share data)

 
      Nine Months Ended September 30, 2016   Nine Months Ended September 30, 2015
Actual   Adjustments   Adjusted (1) Actual   Adjustments   Adjusted (2)
 
Revenues:
Rental $ 355,913 $ $ 355,913 $ 368,175 $ $ 368,175
Sales 19,843 19,843 22,765 22,765
Other   2,479   (1,365

)

  1,114   5,320   (4,096 )   1,224  
Total revenues   378,235   (1,365

)

  376,870   396,260   (4,096 )   392,164  
 
Costs and expenses:
Rental, selling and general expenses 234,796 234,796 247,809 (7,174 ) 240,635
Cost of sales 12,186 12,186 14,899 14,899
Restructuring expenses 5,220 (5,220 ) 4,773 (4,773 )
Asset impairment charge and
loss on divestiture, net 66,128 (66,128

)

 

Depreciation and amortization   47,630     47,630   45,075     45,075  
Total costs and expenses   299,832   (5,220 )   294,612   378,684   (78,075 )   300,609  
 
Income (loss) from operations 78,403 3,855 82,258 17,576 73,979 91,555
 
Other expense:
Interest income 1

1
Interest expense (24,533 ) (24,533 ) (26,986 ) (26,986 )
Debt extinguishment expense (9,192 ) 9,192
Deferred financing costs write-off (2,271 ) 2,271
Foreign currency exchange   (9 )     (9 )   (2 )     (2 )
 
Income (loss) before income tax provision 42,398 15,318 57,716 (9,411 ) 73,979 64,568
 
Income tax provision (benefit) 14,619 5,892 20,511 (5,480 ) 28,441 22,961
                       
Net income (loss) $ 27,779 $ 9,426 $ 37,205 $ (3,931

)

$ 45,538 $ 41,607  
 
EBITDA/Adjusted EBITDA $ 126,024 $ 136,222 $ 62,650 $ 145,912

EBITDA/Adjusted EBITDA as a percentage of

total revenues

33.3 % 36.1 % 15.8 % 37.2 %
 
Earnings (loss) per share:
Basic $ 0.63 $ 0.84 $ (0.09 ) $ 0.92
Diluted 0.63 0.84 (0.09 ) 0.91
 

Weighted average number of common and

common share equivalents outstanding:

Basic 44,170 44,170 45,145 45,145
Diluted 44,431 44,431 45,145 45,695
 
   
(1) Adjusted column for the nine months ended September 30, 2016 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the nine-month period ended September 30, 2016 include the following, along with the related tax effects:

  Reduction of other revenue by $1.4 million to exclude revenue associated with a sales tax refund.

Exclusion of costs of $5.2 million related to the restructuring of our business operations.

Exclusion of $9.2 million of debt extinguishment costs to redeem $200 million aggregate principal amount of our outstanding 7.875% senior notes due December 2020 (the “2020 Senior Notes”).

Exclusion of $2.3 million of deferred financing costs that were written off in conjunction with the redemption of the 2020 Senior Notes.
(2) Adjusted column for the nine months ended September 30, 2015 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the nine-month period ended September 30, 2015 include the following, along with the related tax effects:

Reduction of other revenue by $1.2 million to exclude revenue associated with a sales tax refund.

Reduction of other revenue by $2.9 million to exclude transition services revenue associated with the divestiture of our North American wood mobile office business in May 2015.

Reduction of $3.9 million in rental, selling and general expenses to exclude operating expenses associated with the provision of transition services for our North American wood mobile office business, including expenses related to wood mobile offices on our leased properties.

Reduction of $2.4 million in rental, selling and general expenses for acquisition-related expenses, primarily due to our acquisition of Evergreen Tank Solutions in December 2014.

Reduction of $0.8 million in rental, selling and general expenses to exclude costs related to the settlement of a potential unclaimed property liability with the state of Delaware.

Exclusion of costs of $4.8 million related to the restructuring of our business operations.

Exclusion of $66.1 million representing the net impairment and loss associated with the divestiture of our North American wood mobile office business.
 
 
Mobile Mini, Inc.
Operating Data
(Unaudited)
 
   
2016     2015
As of September 30:
Stand-alone portable storage locations 125 133
Stand-alone specialty containment locations 19 19
Combined portable storage and specialty containment locations 13 6
Portable storage rental fleet units 208,000 209,500
Specialty containment rental fleet units 12,100 11,400
 
Average Unit Utilization:
 
Portable storage - three months ended September 30 70.5 % 70.0 %
Portable storage - nine months ended September 30 69.1 % 67.8 %
Specialty containment - three months ended September 30 60.5 % 67.5 %
Specialty containment - nine months ended September 30 62.2 % 69.2 %
 
 
Mobile Mini, Inc.
Business Segment Information - Adjusted (1)
(Unaudited)
(in thousands)
 
 
 
                       
Three Months Ended September 30, 2016 Three Months Ended September 30, 2015

Portable

Storage

Specialty

Containment

Total

Portable

Storage

Specialty

Containment

Total
 
Revenues:
Rental $ 97,678 $ 24,106 $ 121,784 $ 98,855 $ 25,958 $ 124,813
Sales 5,319 1,291 6,610 4,830 1,764 6,594
Other   371   88   459   454   27   481
Total revenues   103,368   25,485   128,853   104,139   27,749   131,888
 
Costs and expenses:
Rental, selling and general expenses 64,084 16,373 80,457 63,488 15,349 78,837
Cost of sales 3,113 784 3,897 3,124 1,242 4,366
Depreciation and amortization   9,100   7,084   16,184   8,404   6,594   14,998
Asset impairment charge and

loss on divestiture, net

  76,297   24,241   100,538   75,016   23,185   98,201
 
Income from operations $ 27,071 $ 1,244 $ 28,315 $ 29,123 $ 4,564 $ 33,687
 
Adjusted EBITDA $ 38,270 $ 8,380 $ 46,650 $ 40,901 $ 11,203 $ 52,104
Adjusted EBITDA Margin 37.0 % 32.9 % 36.2 % 39.3 % 40.4 % 39.5 %
 
 
 
Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015

Portable

Storage

Specialty

Containment

Total

Portable

Storage

Specialty

Containment

Total
 
Revenues:
Rental $ 285,508 $ 70,405 $ 355,913 $ 292,895 $ 75,280 $ 368,175
Sales 15,734 4,109 19,843 16,892 5,873 22,765
Other   884   230   1,114   1,171   53   1,224
Total revenues   302,126   74,744   376,870   310,958   81,206   392,164
 
Costs and expenses:
Rental, selling and general expenses 187,792 47,004 234,796 193,409 47,226 240,635
Cost of sales 9,568 2,618 12,186 10,976 3,923 14,899
Depreciation and amortization   26,216   21,414   47,630   26,042   19,033   45,075
Total costs and expenses   223,576   71,036   294,612   230,427   70,182   300,609
 
Income from operations $ 78,550 $ 3,708 $ 82,258 $ 80,531 $ 11,024 $ 91,555
 
Adjusted EBITDA $ 110,900 $ 25,322 $ 136,222 $ 115,469 $ 30,443 $ 145,912
Adjusted EBITDA Margin 36.7 % 33.9 % 36.1 % 37.1 % 37.5 % 37.2 %
(1)     These tables present results by major business segment adjusted to exclude certain transactions that management believes are not indicative of our business. See additional information regarding non-GAAP financial information following in this earnings release.
 
 
Mobile Mini, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
       
 
September 30,
2016
(unaudited)
December 31,
2015
(audited)
 
 
ASSETS
Cash and cash equivalents $ 9,522 $ 1,613
Receivables, net 93,129 80,191
Inventories 18,162 15,596
Rental fleet, net 951,646 951,323
Property, plant and equipment, net 152,647 131,687
Other assets 18,396 16,766
Intangibles, net 69,260 73,212
Goodwill   703,765   706,387
Total assets $ 2,016,527 $ 1,976,775
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $ 32,143 $ 29,086
Accrued liabilities 62,385 59,024
Lines of credit 651,537 667,708
Obligations under capital leases 52,531 38,274
Senior Notes, net 245,158 197,553
Deferred income taxes   232,634   219,601
Total liabilities   1,276,388   1,211,246
 
Stockholders' equity:
Common stock 493 491
Additional paid-in capital 591,323 584,447
Retained earnings 352,549 352,262
Accumulated other comprehensive loss (69,582 ) (44,162 )
Treasury stock   (134,644 )   (127,509 )
Total stockholders' equity   740,139   765,529
Total liabilities and stockholders' equity $ 2,016,527 $ 1,976,775
 
 
Mobile Mini, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
 
  Nine Months Ended
September 30,
 
2016   2015
Cash flows from operating activities:
Net income (loss) $ 27,779 $ (3,931 )
Adjustments to reconcile net income (loss) to net cash

provided by operating activities:

Debt extinguishment expense 9,192
Deferred financing costs write-off 2,271
Asset impairment and loss on divestiture, net 66,128
Provision for doubtful accounts 4,290 2,826
Amortization of deferred financing costs 1,457 2,384
Amortization of long-term liabilities 87 76
Share-based compensation expense 6,521 10,833
Asset impairment charge and

loss on divestiture, net

47,630 45,075
Gain on sale of rental fleet (4,228 ) (5,196 )
Loss on disposal of property, plant and equipment 1,089 2,035
Deferred income taxes 14,448 (6,086 )
Foreign currency transaction loss 9 2
Changes in certain assets and liabilities, net of

effect of businesses acquired

  (14,524 )   (425 )
Net cash provided by operating activities   96,021   113,721
 
Cash flows from investing activities:
Proceeds from wood mobile office divestiture, net 83,299
Cash paid for businesses acquired, net of cash acquired (9,206 ) (18,622 )
Additions to rental fleet, excluding acquisitions (46,480 ) (53,540 )
Proceeds from sale of rental fleet 10,770 13,300
Additions to property, plant and equipment, excluding acquisitions (25,750 ) (17,918 )
Proceeds from sale of property, plant and equipment   2,369   2,447
Net cash (used in) provided by investing activities   (68,297 )   8,966
 
Cash flows from financing activities:
Net repayments under lines of credit (16,171 ) (42,138 )
Proceeds from issuance of 5.875% Senior Notes 250,000
Redemption of 7.875% Senior Notes (200,000 )
Debt extinguishment expense (9,192 )
Deferred financing costs (5,352 ) (113 )
Principal payments on capital lease obligations (4,693 ) (2,883 )
Issuance of common stock 356 1,670
Dividend payments (27,327 ) (25,308 )
Purchase of treasury stock   (7,135 )   (55,819 )
Net cash used in financing activities   (19,514 )   (124,591 )
 
Effect of exchange rate changes on cash   (301 )   (122 )
 
Net change in cash 7,909 (2,026 )
 
Cash and cash equivalents at beginning of period   1,613   3,739
Cash and cash equivalents at end of period $ 9,522 $ 1,713
 
Equipment and other acquired through capital lease obligations $ 18,951 $ 17,638
Capital expenditures accrued or payable 5,053 11,410
 

Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company also discloses in this press release certain non-GAAP financial information. These financial measures are not recognized measures under GAAP and they are not intended to be and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, free cash flow and constant currency financial information are non-GAAP financial measures as defined by SEC rules. This non-GAAP financial information may be determined or calculated differently by other companies. Reconciliations of these non-GAAP measurements to the most directly comparable GAAP financial measurements are furnished earlier in this release and as follows:

 
Mobile Mini, Inc.
Adjusted EBITDA GAAP Reconciliations
(Unaudited)
(in thousands)
               

Three Months Ended

September 30,

Nine Months Ended

September 30,

2016 2015 2016 2015
Net income (loss) $ 12,709 $ 13,979 $ 27,779 $ (3,931 )
Interest expense 8,047 8,960 24,533 26,986
Income tax provision (benefit) 5,906 7,536 14,619 (5,480 )
Depreciation and amortization 16,184 14,998 47,630 45,075
Debt extinguishment expense 9,192
Deferred financing costs write-off       2,271  
EBITDA 42,846 45,473 126,024 62,650
 
Share-based compensation expense 2,156 3,418 6,343 9,283
Restructuring expenses 1,648 1,846 5,220 4,773
Acquisition-related expenses 398 2,393
Asset impairment charge and

loss on divestiture, net

777 67,155
Sales tax refund and unclaimed

property settlement

    192   (1,365 )   (342 )
Adjusted EBITDA $ 46,650 $ 52,104 $ 136,222 $ 145,912
 
 

Three Months Ended

September 30,

Nine Months Ended

September 30,

2016 2015 2016 2015
Net cash provided by operating activities $ 31,311 $ 42,820 $ 96,021 $ 113,721
Interest paid 3,889 4,517 17,880 20,422
Income and franchise taxes paid 229 1,581 1,380 3,274
Share-based compensation expense (2,276 ) (4,096 ) (6,521 ) (10,833 )
Asset impairment charge, net (66,128 )
Gain on sale of rental fleet 1,446 1,553 4,228 5,196
Loss on disposal of property, plant and equipment (400 ) (553 ) (1,089 ) (2,035 )
Changes in other assets and liabilities, net of

effect of businesses acquired

  8,647   (349 )   14,125   (967 )
EBITDA $ 42,846 $ 45,473 $ 126,024 $ 62,650
 
 
Mobile Mini, Inc.
Free Cash Flow GAAP Reconciliation
(Unaudited)
(in thousands)
               

Three Months Ended

September 30,

Nine Months Ended

September 30,

2016 2015 2016 2015
Net cash provided by operating activities $ 31,311 $ 42,820 $ 96,021 $ 113,721
 
Additions to rental fleet, excluding acquisitions (18,322 ) (25,731 ) (46,480 ) (53,540 )
Proceeds from sale of rental fleet 3,361 3,925 10,770 13,300
Additions to property, plant and equipment,

excluding acquisitions

(6,487 ) (6,306 ) (25,750 ) (17,918 )
Proceeds from sale of property, plant and

equipment

  754   770   2,369   2,447
Net capital expenditures, excluding acquisitions (20,694 ) (27,342 ) (59,091 ) (55,711 )
               
Free cash flow $ 10,617 $ 15,478 $ 36,930 $ 58,010
 

Adjusted net income and adjusted diluted earnings per share. Adjusted net income and related earnings per share information exclude certain transactions that management believes are not indicative of our business. We believe that the inclusion of this non-GAAP presentation makes it easier to compare our financial performance across reporting periods on a consistent basis.

EBITDA and adjusted EBITDA. EBITDA is defined as net income before discontinued operations, net of tax (if applicable), interest expense, income taxes, depreciation and amortization, and debt restructuring or extinguishment expense (if applicable), including any write-off of deferred financing costs. Adjusted EBITDA further excludes certain non-cash expenses, including share-based compensation, as well as transactions that management believes are not indicative of our business. Because EBITDA and adjusted EBITDA, as defined, exclude some but not all items that affect our cash flow from operating activities, they may not be comparable to similarly titled performance measures presented by other companies.

We present EBITDA and adjusted EBITDA because we believe they provide useful information regarding our ability to meet our future debt payment requirements, capital expenditures and working capital requirements and an overall evaluation of our financial condition. EBITDA and adjusted EBITDA have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows from operations, or other consolidated income or cash flow data prepared in accordance with GAAP.

EBITDA and adjusted EBITDA margins are calculated as EBITDA and adjusted EBITDA, respectively, divided by total revenues expressed as a percentage.

Free Cash Flow. Free cash flow is defined as net cash provided by operating activities, minus or plus, net cash used in or provided by investing activities, excluding acquisitions and certain transactions. Free cash flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, the most directly comparable financial measure prepared in accordance with GAAP. We present free cash flow because we believe it provides useful information regarding our liquidity and ability to meet our short-term obligations. In particular, free cash flow indicates the amount of cash available after capital expenditures for, among other things, investments in our existing business, debt service obligations, payment of authorized quarterly dividends, repurchase of our common stock and strategic small acquisitions.

Constant Currency. We calculate the effect of currency fluctuations on current periods by translating the results for our business in the United Kingdom during the current period using the average exchange rates from the comparative period. We present constant currency information to provide useful information to assess our underlying business excluding the effect of material foreign currency rate fluctuations. Calculated in constant currency, our rental revenues for the three months ended September 30, 2016 were $3.6 million higher than when calculated using GAAP.

Source: Mobile Mini, Inc.

Mobile Mini, Inc.
Mark Funk, 602-308-3879
Executive VP & Chief Financial Officer
www.mobilemini.com
or
INVESTOR RELATIONS COUNSEL:
The Equity Group Inc.
Fred Buonocore, 212-836-9607
or
Linda Latman, 212-836-9609