8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 1, 2019

 

 

 

LOGO

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   1-12804   86-0748362

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

 

 

4646 E. Van Buren Street, Suite 400

Phoenix, Arizona 85008

(Address of principal executive offices) (Zip Code)

(480) 894-6311

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14-d2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13-4e(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02. Results of Operations and Financial Condition

On February 1, 2019 Mobile Mini, Inc. (the “Company”) issued a news release announcing its financial results for the period ended December 31, 2018. A copy of the news release is furnished as Exhibit 99.1 to this report.

In accordance with general instruction B.2 to Form 8-K, information in this Item 2.02 and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of such section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

 

99.1    Registrant’s news release, dated February 1, 2019 announcing its financial results.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    MOBILE MINI, INC.
Dated: February 1, 2019     /s/ Christopher J. Miner
    Name: Christopher J. Miner
    Title:   Senior Vice President and General Counsel
EX-99.1

Exhibit 99.1

 

LOGO

FOR IMMEDIATE RELEASE

MOBILE MINI REPORTS Q4 2018 RESULTS AND ANNOUNCES QUARTERLY DIVIDEND

Phoenix, AZ – February 1, 2019 – 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 tank and pump solutions in the United States, today reported actual and adjusted financial results for the quarter ended December 31, 2018.

Total revenues were $160.9 million and rental revenues were $152.0 million, as compared to $146.7 million and $138.5 million, respectively, for the same period last year. Rental revenues for the Storage Solutions and Tank & Pump Solutions businesses for the current quarter were $122.2 million and $29.9 million, respectively, compared to $112.8 million and $25.7 million, respectively, for the same period last year.

The Company realized net income of $14.2 million, or $0.32 per diluted share, in the fourth quarter of 2018. On an adjusted basis, fourth quarter net income was $23.7 million, or $0.53 per diluted share, as compared to adjusted net income of $18.1 million, or $0.41 per diluted share, for the fourth quarter of 2017. Adjusted EBITDA was $63.3 million and adjusted EBITDA margin was 39.3% for the fourth quarter of 2018.

Dividend

The Company’s Board of Directors declared a cash dividend of 27.5 cents per share, which will be paid on March 13, 2019 to shareholders of record as of February 27, 2019.

Fourth Quarter 2018 Highlights

 

   

Continued strong rental revenue growth in Tank & Pump Solutions (“T&P”) with a 16.1% year-over-year increase.

 

   

Delivered solid Storage Solutions (“SS”) rental revenue year-over-year growth of 8.3%, with record high seasonal business.

 

   

Reached all-time high T&P OEC fleet on rent and drove average OEC utilization to 76.0% for the quarter, up 300 bps compared to the prior-year quarter.

 

   

Increased total SS average units on rent by 2.7% year-over-year, with average unit utilization of 85.2% during the quarter.

 

   

Raised SS core (excluding seasonal) rental rates in North America by 3.4%.

 

   

Achieved adjusted EBITDA growth of 13.7%, compared to the prior-year quarter and expanded adjusted EBITDA margin by 140 basis points to 39.3%.

 

   

Generated robust net cash from operating activities of $43.9 million and free cash flow of $24.9 million.

 

   

Decreased our leverage ratio to 4.2x at December 31, 2018 from 5.0x December 31, 2017, as a result of both reduced debt and increased adjusted EBITDA.


CEO Comments

Erik Olsson, Mobile Mini’s Chief Executive Officer, remarked, “Fourth quarter 2018 results are the culmination of an exceptional year for Mobile Mini. Consolidated rental revenues were up 9.8% year-over-year, despite increasingly challenging comparisons. Seasonal rentals in North America exceeded the record-breaking numbers from the prior-year, contributing to rental revenue growth of 8.3% year-over year for consolidated Storage Solutions. Tank & Pump Solutions delivered growth of 16.1% by capitalizing on the wide-spread momentum in our customer end-segments and our exceptional overall service. By leveraging our infrastructure and efficiencies, we converted this robust top-line growth into increased profitability. Our adjusted EBITDA margin grew to 39.3% and we achieved $63.3 million in adjusted EBITDA, an increase of 13.7%, resulting in very strong free cash flow of $24.9 million for the fourth quarter of 2018.”

Mr. Olsson continued, “In 2018, we executed on our strategic plan and delivered outstanding results. Mobile Mini enters 2019 a financially stronger and more efficient company than ever before. We are committed to further differentiating Mobile Mini from our competitors by partnering with our customers to develop innovative solutions to their rental needs and striving to continuously improve processes throughout the Company. In North America, our Storage Solutions pending orders are significantly up compared to a year ago and our Tank & Pump business is positioned to capitalize on the strong demand from its end-markets. In the United Kingdom, where Brexit is causing some uncertainty in the general economy, our business has remained stable. Overall, our pipeline is healthy across all segments and economic indicators are solid. For 2019, we expect continued margin expansion as well as meaningful de-leveraging and we expect to exceed our Evergreen model for rental revenue growth.”

Conference Call

Mobile Mini will host a conference call today, Friday, February 1 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 195,600 storage solutions containers and office units and a leading provider of tank and pump solutions in the U.S., with a rental fleet of approximately 12,600 units. Mobile Mini’s network is comprised of 154 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.

 

2


Forward-Looking Statements

This news release contains forward-looking statements, including, but not limited to, our ability to generate continued margin expansion and growth of revenue, adjusted EBITDA, and free cash flow, as well as our ability to decrease our leverage ratio, all of 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.

 

CONTACT:

   -OR-    INVESTOR RELATIONS COUNSEL:
Van Welch, Executive VP &       The Equity Group Inc.
Chief Financial Officer       Fred Buonocore (212) 836-9607
Mobile Mini, Inc.       Kevin Towle (212) 836-9620

(602) 308-3879

www.mobilemini.com

     

(See accompanying tables)

 

3


Mobile Mini, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except percentages and per share data)

 

     Three Months Ended December 31, 2018     Three Months Ended December 31, 2017  
     Actual     Adjustments     Adjusted (1)     Actual     Adjustments     Adjusted (2)  

Revenues:

            

Rental

   $ 152,048     $     $ 152,048     $ 138,537     $     $ 138,537  

Sales

     8,654             8,654       7,623             7,623  

Other

     167             167       536             536  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     160,869             160,869       146,696             146,696  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     95,090             95,090       87,484             87,484  

Cost of sales

     5,512             5,512       4,962             4,962  

Restructuring expenses

     700       (700           824       (824      

Asset impairment charge and loss on divestiture, net

     3,862       (3,862                        

Depreciation and amortization

     16,794             16,794       16,431             16,431  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     121,958       (4,562     117,396       109,701       (824     108,877  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     38,911       4,562       43,473       36,995       824       37,819  

Other income (expense):

            

Interest income

                       5             5  

Interest expense

     (10,725           (10,725     (9,316           (9,316

Foreign currency exchange

     (5           (5     4             4  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax provision (benefit)

     28,181       4,562       32,743       27,688       824       28,512  

Income tax provision (benefit)

     13,933       (4,863     9,070       (64,383     74,827       10,444  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $     14,248     $     9,425     $     23,673     $     92,071     $     (74,003   $     18,068  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA/Adjusted EBITDA

   $ 55,700       $ 63,263     $ 53,435       $ 55,624  

EBITDA/Adjusted EBITDA as a percentage of total revenues

     34.6       39.3     36.4       37.9

Earnings per share:

            

Basic

   $ 0.32       $ 0.53     $ 2.09       $ 0.41  

Diluted

     0.32         0.53       2.07         0.41  

Weighted average number of common and common share equivalents outstanding:

            

Basic

     44,353         44,353       44,128         44,128  

Diluted

     44,885         44,885       44,444         44,444  

 

(1)

Adjusted column for the three months ended December 31, 2018 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 December 31, 2018 include the following:

   

Exclusion of costs of $0.7 million related to the restructuring of our business operations, along with the related tax effects.

   

Exclusion of an asset impairment charge and loss on divestiture, net of proceeds, of $3.9 million related to assets that the Company placed as held for sale during the quarter, along with the related tax effects.

   

Exclusion of $5.8 million in income tax provision resulting from an out-of-period adjustment recorded in the fourth quarter of 2018 to correct deferred tax assets that had been established in previous years.

 

(2)

Adjusted column for the three months ended December 31, 2017 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 December 31, 2017 include the following:

   

Exclusion of costs of $0.8 million related to the restructuring of our business operations, along with the related tax effects.

   

Exclusion of $74.5 million in income tax benefit resulting from the Tax Cuts and Jobs Act (the “Tax Act”).

 

4


Mobile Mini, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except percentages and per share data)

 

     Twelve Months Ended December 31, 2018     Twelve Months Ended December 31, 2017  
     Actual     Adjustments     Adjusted (1)     Actual     Adjustments     Adjusted (2)  

Revenues:

            

Rental

   $     558,197     $     $     558,197     $     498,825     $     $ 498,825  

Sales

     34,354             34,354       32,440             32,440  

Other

     678             678       2,284             2,284  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     593,229             593,229       533,549             533,549  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     364,123             364,123       336,438       (2,623     333,815  

Cost of sales

     22,437             22,437       21,001             21,001  

Restructuring expenses

     2,006       (2,006           2,886       (2,886      

Asset impairment charge and loss on divestiture, net

     102,140       (102,140                        

Depreciation and amortization

     67,000             67,000       63,372             63,372  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     557,706           (104,146     453,560       423,697       (5,509     418,188  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     35,523       104,146       139,669       109,852       5,509       115,361  

Other income (expense):

            

Interest income

     6             6       25             25  

Interest expense

     (40,904           (40,904     (35,728           (35,728

Foreign currency exchange

     64             64       (25           (25
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before income tax provision (benefit)

     (5,311     104,146       98,835       74,124       5,509       79,633  

Income tax provision (benefit)

     2,751       22,475       25,226       (48,104     76,604       28,500  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

   $ (8,062   $ 81,671     $ 73,609     $ 122,228     $     (71,095   $ 51,133  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA/Adjusted EBITDA

   $ 102,593       $ 217,243     $ 173,224       $     184,803  

EBITDA/Adjusted EBITDA as a percentage of total revenues

     17.3       36.6     32.5       34.6

(Loss) earnings per share:

            

Basic

   $ (0.18     $ 1.66     $ 2.77       $ 1.16  

Diluted

     (0.18       1.64       2.76         1.16  

Weighted average number of common and common share equivalents outstanding:

            

Basic

     44,295         44,295       44,055         44,055  

Diluted

     44,295         44,980       44,254         44,254  

 

(1)

Adjusted column for the twelve months ended December 31, 2018 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 twelve-month period ended December 31, 2018 include the following:

   

Exclusion of costs of $2.0 million related to the restructuring of our business operations, along with the related tax effects.

   

Exclusion of an asset impairment charge and loss on divestiture, net of proceeds, of $102.1 million related to assets that the Company placed as held for sale during the period, along with the related tax effects.

   

Exclusion of $2.6 million in income tax benefit resulting from the reversal in the period of a provisional tax expense related to the repatriation of foreign earnings for the impact of the U.S. federal tax reform enacted in the fourth quarter of 2017.

   

Exclusion of $5.8 million in income tax provision resulting from an out-of-period adjustment recorded in the fourth quarter of 2018 to correct deferred tax assets that had been established in previous years.

 

(2)

Adjusted column for the twelve months ended December 31, 2017 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 twelve-month period ended December 31, 2017 include the following:

   

Reduction of $0.1 million in rental, selling and general expenses for acquisition-related expenses, along with the related tax effects.

   

Reduction of $2.5 million in rental, selling and general expenses to exclude costs related to severance and transition in conjunction with the departure of executives, along with the related tax effects.

   

Exclusion of $2.9 million in costs related to the restructuring of our business operations, along with the related tax effects.

   

Exclusion of $74.5 million in income tax benefit resulting from the Tax Act.

 

5


Mobile Mini, Inc.

Operating Data

(Unaudited)

 

         2018                    2017          
As of December 31:              

Stand-alone Storage Solutions locations

     117           121  

Stand-alone Tank & Pump Solutions locations

     20           17  

Combined Storage Solutions and Tank & Pump Solutions locations

     17           16  

Storage Solutions rental fleet units

     195,600           215,000  

Tank & Pump Solutions rental fleet units

     12,600           12,100  

Average utilization—Three months ended December 31:

     

Storage Solutions—utilization based on number of units

     85.2%        75.7

Tank & Pump Solutions—utilization based on original equipment cost

     76.0%        73.0

Average utilization—Twelve months ended December 31:

     

Storage Solutions—utilization based on number of units

     75.9%        71.5

Tank & Pump Solutions—utilization based on original equipment cost

     74.0%        66.5

 

6


Mobile Mini, Inc.

Business Segment Information—Adjusted (1)

(Unaudited)

(in thousands, except percentages)

 

     Three Months Ended December 31, 2018     Three Months Ended December 31, 2017  
     Storage
Solutions
    Tank & Pump
Solutions
    Total     Storage
Solutions
    Tank & Pump
Solutions
    Total  

Revenues:

            

Rental

   $ 122,171     $ 29,877     $ 152,048     $ 112,810     $ 25,727     $ 138,537  

Sales

     7,247       1,407       8,654       6,226       1,397       7,623  

Other

     129       38       167       457       79       536  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     129,547       31,322       160,869       119,493       27,203       146,696  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     75,400       19,690       95,090       69,462       18,022       87,484  

Cost of sales

     4,744       768       5,512       4,122       840       4,962  

Depreciation and amortization

     10,084       6,710       16,794       10,296       6,135       16,431  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     90,228       27,168       117,396       83,880       24,997       108,877  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   $ 39,319     $ 4,154     $ 43,473     $ 35,613     $ 2,206     $ 37,819  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 52,291     $ 10,972     $ 63,263     $ 47,227     $ 8,397     $ 55,624  

Adjusted EBITDA Margin

     40.4     35.0     39.3     39.5     30.9     37.9
     Twelve Months Ended December 31, 2018     Twelve Months Ended December 31, 2017  
     Storage
Solutions
    Tank & Pump
Solutions
    Total     Storage
Solutions
    Tank & Pump
Solutions
    Total  

Revenues:

            

Rental

   $ 447,464     $ 110,733     $ 558,197     $ 406,590     $ 92,235     $ 498,825  

Sales

     29,032       5,322       34,354       26,989       5,451       32,440  

Other

     528       150       678       1,875       409       2,284  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     477,024       116,205       593,229       435,454       98,095       533,549  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     287,648       76,475       364,123       265,390       68,425       333,815  

Cost of sales

     19,439       2,998       22,437       17,930       3,071       21,001  

Depreciation and amortization

     41,482       25,518       67,000       38,792       24,580       63,372  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     348,569       104,991       453,560       322,112       96,076       418,188  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   $ 128,455     $ 11,214     $ 139,669     $ 113,342     $ 2,019     $ 115,361  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 180,089     $ 37,154     $ 217,243     $ 157,960     $ 26,843     $ 184,803  

Adjusted EBITDA Margin

     37.8     32.0     36.6     36.3     27.4     34.6

 

  (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.

 

7


Mobile Mini, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

     December 31,
2018
    December 31,
2017
 
     (unaudited)     (audited)  
ASSETS

 

Cash and cash equivalents

   $ 5,605     $ 13,451  

Receivables, net

     130,233       111,562  

Inventories

     11,725       15,671  

Rental fleet, net

     929,090       989,154  

Property, plant and equipment, net

     154,254       157,304  

Other assets

     13,398       15,334  

Intangibles, net

     55,542       62,024  

Goodwill

     705,217       708,907  
  

 

 

   

 

 

 

Total assets

   $             2,005,064     $             2,073,407  
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY

 

Liabilities:

    

Accounts payable

   $ 33,177     $ 26,955  

Accrued liabilities

     88,136       78,084  

Lines of credit

     593,495       634,285  

Obligations under capital leases

     63,359       52,791  

Senior notes, net

     246,489       245,850  

Deferred income taxes

     170,139       173,754  
  

 

 

   

 

 

 

Total liabilities

     1,194,795       1,211,719  
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock

     500       497  

Additional paid-in capital

     619,850       605,369  

Retained earnings

     410,641       463,322  

Accumulated other comprehensive loss

     (72,861     (60,334

Treasury stock

     (147,861     (147,166
  

 

 

   

 

 

 

Total stockholders’ equity

     810,269       861,688  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,005,064     $ 2,073,407  
  

 

 

   

 

 

 

 

8


Mobile Mini, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

     Twelve Months Ended
December 31,
 
     2018     2017  

Cash flows from operating activities:

    

Net (loss) income

   $ (8,062   $ 122,228  

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

    

Asset impairment charge and loss on divestiture, net

     102,140        

Provision for doubtful accounts

     2,412       5,037  

Amortization of deferred financing costs

     2,060       2,060  

Amortization of long-term liabilities

     145       130  

Share-based compensation expense

     10,867       7,373  

Depreciation and amortization

     67,000       63,372  

Gain on sale of rental fleet

     (6,055     (5,657

Loss on disposal of property, plant and equipment

     600       517  

Deferred income taxes

     (2,523     (49,980

Foreign currency exchange

     (64     25  

Changes in certain assets and liabilities, net of effect of businesses acquired

     (8,422     (9,459
  

 

 

   

 

 

 

Net cash provided by operating activities

         160,098           135,646  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Proceeds from sale of assets held for sale

     10,153        

Additions to rental fleet, excluding acquisitions

     (85,961     (63,688

Proceeds from sale of rental fleet

     14,993       12,953  

Additions to property, plant and equipment, excluding acquisitions

     (16,931     (20,122

Proceeds from sale of property, plant and equipment

     683       851  
  

 

 

   

 

 

 

Net cash used in investing activities

     (77,063     (70,006
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Net repayments under lines of credit

     (40,790     (6,875

Deferred financing costs

           (12

Principal payments on capital lease obligations

     (9,746     (7,418

Issuance of common stock

     3,617       5,800  

Dividend payments

     (44,530     (40,171

Purchase of treasury stock

     (695     (8,367
  

 

 

   

 

 

 

Net cash used in financing activities

     (92,144     (57,043
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     1,263       717  
  

 

 

   

 

 

 

Net change in cash

     (7,846     9,314  

Cash and cash equivalents at beginning of period

     13,451       4,137  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 5,605     $ 13,451  
  

 

 

   

 

 

 

Equipment and other acquired through capital lease obligations

   $ 20,314     $ 9,501  

Capital expenditures accrued or payable

     10,752       7,270  

 

9


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 and free cash flow 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
December 31,
     Twelve Months Ended
December 31,
 
     2018      2017      2018      2017  

Net income (loss)

   $ 14,248      $ 92,071      $ (8,062    $ 122,228  

Interest expense

     10,725        9,316        40,904        35,728  

Income tax provision (benefit)

     13,933        (64,383      2,751        (48,104

Depreciation and amortization

     16,794        16,431        67,000        63,372  
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

     55,700        53,435        102,593        173,224  

Share-based compensation expense

     3,001        1,365        10,504        6,070  

Restructuring expenses

     700        824        2,006        2,886  

Asset impairment charge and loss on divestiture, net

     3,862               102,140         

Acquisition-related expenses

                          123  

Other

                          2,500  
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 63,263      $ 55,624      $ 217,243      $ 184,803  
  

 

 

    

 

 

    

 

 

    

 

 

 
     Three Months Ended
December 31,
     Twelve Months Ended
December 31,
 
     2018      2017      2018      2017  

Net cash provided by operating activities

   $ 43,878      $ 39,814      $ 160,098      $ 135,646  

Interest paid

     6,226        4,650        37,979        35,029  

Income and franchise taxes paid

     1,666        1,294        4,012        2,607  

Share-based compensation expense, including restructuring expense

     (3,001      (1,483      (10,867      (7,373

Asset impairment charge and loss on divestiture, net

     (3,862             (102,140       

Gain on sale of rental fleet

     1,532        1,384        6,055        5,657  

Loss on disposal of property, plant and equipment

     (52      (45      (600      (517

Changes in certain assets and liabilities, net of effect of businesses acquired

     9,313        7,821        8,056        2,175  
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

   $       55,700      $       53,435      $       102,593      $       173,224  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

10


Mobile Mini, Inc.

Free Cash Flow GAAP Reconciliation

(Unaudited)

(in thousands)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2018     2017     2018     2017  

Net cash provided by operating activities

   $ 43,878     $ 39,814     $ 160,098     $ 135,646  
  

 

 

   

 

 

   

 

 

   

 

 

 

Additions to rental fleet, excluding acquisitions

     (20,341     (17,743     (85,961     (63,688

Proceeds from sale of rental fleet

     3,546       3,351       14,993       12,953  

Additions to property, plant and equipment, excluding acquisitions

     (2,296     (7,306     (16,931     (20,122

Proceeds from sale of property, plant and equipment

     80       71       683       851  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net capital expenditures, excluding acquisitions

     (19,011     (21,627     (87,216     (70,006
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $       24,867     $       18,187     $       72,882     $       65,640  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

11


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.

 

12