Form 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): April 22, 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 April 22, 2019 Mobile Mini, Inc. (the “Company”) issued a news release announcing its financial results for the period ended March 31, 2019. 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 April 22, 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: April 22, 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 Q1 2019 RESULTS AND ANNOUNCES QUARTERLY DIVIDEND

Phoenix, AZ – April 22, 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 March 31, 2019.

Total revenues were $149.7 million and rental revenues were $142.2 million, as compared to $140.7 million and $132.3 million, respectively, for the same period last year. Rental revenues for the Storage Solutions and Tank & Pump Solutions businesses for the current quarter were $112.7 million and $29.4 million, respectively, compared to $106.9 million and $25.5 million, respectively, for the same period last year.

The Company realized net income of $18.1 million, or $0.40 per diluted share, in the first quarter of 2019. On an adjusted basis, first quarter net income was $18.2 million, or $0.41 per diluted share, as compared to adjusted net income of $14.9 million, or $0.33 per diluted share, for the first quarter of 2018. Adjusted EBITDA was $56.2 million and adjusted EBITDA margin was 37.6% for the first quarter of 2019.

Dividend

The Company’s Board of Directors declared a cash dividend of 27.5 cents per share, which will be paid on May 29, 2019 to shareholders of record as of May 15, 2019.

First Quarter 2019 Highlights

 

   

Continued strong rental revenue growth in Tank & Pump Solutions (“T&P”) with a 15.6% year-over-year increase.

 

   

Delivered healthy North American Storage Solutions (“SS”) rental revenue year-over-year growth of 8.0%.

 

   

Delivered year-over-year rate growth of 3.3% in SS and a mid-single digit increase for T&P, for new units placed on rent.

 

   

Achieved strong average OEC utilization rates of 77.1% for SS and 74.1% for T&P in the first quarter, while investing in fleet for anticipated near-term growth.

 

   

Achieved adjusted EBITDA growth of 15.8%, compared to the prior-year quarter, with 16.6% in constant currency, and expanded adjusted EBITDA margin by 310 basis points to 37.6%.

 

   

Generated robust net cash flow from operating activities of $38.8 million and free cash flow of $16.2 million.

 

   

Enhanced liquidity position through a $1.0 billion refinancing of our ABL Credit Agreement, extending the maturity to March 2024.

 

   

Increased return on capital employed to 9.0% as of March 31, 2019, which exceeds weighted average cost of capital and is a 170 basis point improvement from March 31, 2018.

 

   

Decreased leverage ratio to 4.0x at March 31, 2019 from 4.2x at December 31, 2018 and 5.0x at December 31, 2017.

CEO Comments

Erik Olsson, Mobile Mini’s Chief Executive Officer, remarked, “I am very pleased with our performance and profitability in the first quarter, including our 15.8% increase in adjusted EBITDA. Our Tank & Pump division is starting to show its real potential and delivered 35.3% growth in adjusted EBITDA with an adjusted EBITDA margin of 34.9%, which was a 520 basis point increase over last year. Our North


America Storage Solutions business is also very healthy, with year-over-year rate increases of 3.2% on our core business coupled with a 2% increase in units on rent. In the United Kingdom, where Brexit continues to cause uncertainty in the general economy, we managed to increase rates and grow trucking and ancillary revenues to offset a small decrease in units on rent, resulting in increased rental revenues in local currency.”

Mr. Olsson continued, “Our outlook remains very positive for the remainder of 2019. In our Tank & Pump business, we have demonstrated to our customers that we provide outstanding service and product, along with technology tools that deliver improved customer efficiency. We believe we are positioned to capitalize on the growth in demand throughout this industry and gain additional business with existing and new customers. Pending orders in the North American Storage Solutions segment remain well above the prior-year at this time and the pipeline remains solid. Overall, North American economic indicators are positive and, for 2019 rental revenue growth we expect to exceed our Evergreen target, while delivering margin expansion, strong free cash flow and meaningful de-leveraging.”

Conference Call

Mobile Mini will host a conference call tomorrow, April 23rd at 11:00 am 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 196,400 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 12,800 units. Mobile Mini’s network is comprised of 156 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 gain additional business from customers and exceed our Evergreen target metrics, 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 Income

(Unaudited)

(in thousands, except percentages and per share data)

 

     Three Months Ended March 31, 2019     Three Months Ended March 31, 2018  
     Actual     Adjustments      Adjusted (1)     Actual     Adjustments     Adjusted (1)  

Revenues:

             

Rental

   $ 142,172     $ —        $ 142,172     $ 132,338     $ —       $ 132,338  

Sales

     7,223       —          7,223       8,103       —         8,103  

Other

     266       —          266       213       —         213  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     149,661       —          149,661       140,654       —         140,654  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

             

Rental, selling and general expenses

     92,234       —          92,234       88,998       —         88,998  

Cost of sales

     4,602       —          4,602       5,391       —         5,391  

Restructuring expenses

     —         —          —         111       (111     —    

Depreciation and amortization

     17,335       —          17,335       16,823       —         16,823  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     114,171       —          114,171       111,323       (111     111,212  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     35,490       —          35,490       29,331       111       29,442  

Other income (expense):

             

Interest income

     —         —          —         6       —         6  

Interest expense

     (10,760     —          (10,760     (9,599     —         (9,599

Deferred financing costs write-off

     (123     123        —         —         —         —    

Foreign currency exchange

     1       —          1       66       —         66  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax provision

     24,608       123        24,731       19,804       111       19,915  

Income tax provision

     6,523       32        6,555       4,949       28       4,977  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 18,085     $ 91      $ 18,176     $ 14,855     $ 83     $ 14,938  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA/Adjusted EBITDA

   $ 52,826        $ 56,230     $ 46,226       $ 48,566  

EBITDA/Adjusted EBITDA as a percentage of total revenues

     35.3 %         37.6 %      32.9 %        34.5 % 

Earnings per share:

             

Basic

   $ 0.41        $ 0.41     $ 0.34       $ 0.34  

Diluted

     0.40          0.41       0.33         0.33  

Weighted average number of common and common share equivalents outstanding:

             

Basic

     44,448          44,448       44,214         44,214  

Diluted

     44,877          44,877       44,842         44,842  

 

(1)

Adjusted columns for the three months ended March 31, 2019 and 2018 exclude 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.

 

4


Mobile Mini, Inc.

Operating Data

(Unaudited)

 

     2019     2018  

As of March 31:

    

Stand-alone Storage Solutions locations

     119       119  

Stand-alone Tank & Pump Solutions locations

     20       17  

Combined Storage Solutions and Tank & Pump Solutions locations

     17       17  

Storage Solutions rental fleet units

     196,400       214,900  

Tank & Pump Solutions rental fleet units

     12,800       12,300  

Average utilization based on original equipment cost

    

Three months ended March 31:

    

Storage Solutions

     77.1     68.6

Tank & Pump Solutions

     74.1     73.6

 

5


Mobile Mini, Inc.

Business Segment Information - Adjusted (1)

(Unaudited)

(in thousands, except percentages)

 

     Three Months Ended March 31, 2019     Three Months Ended March 31, 2018  
     Storage
Solutions
    Tank & Pump
Solutions
    Total     Storage
Solutions
    Tank & Pump
Solutions
    Total  

Revenues:

            

Rental

   $ 112,725     $ 29,447     $ 142,172     $ 106,864     $ 25,474     $ 132,338  

Sales

     5,777       1,446       7,223       6,739       1,364       8,103  

Other

     225       41       266       169       44       213  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     118,727       30,934       149,661       113,772       26,882       140,654  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     72,626       19,608       92,234       70,824       18,174       88,998  

Cost of sales

     3,816       786       4,602       4,569       822       5,391  

Depreciation and amortization

     10,723       6,612       17,335       10,732       6,091       16,823  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     87,165       27,006       114,171       86,125       25,087       111,212  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   $ 31,562     $ 3,928     $ 35,490     $ 27,647     $ 1,795     $ 29,442  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 45,428     $ 10,802     $ 56,230     $ 40,581     $ 7,985     $ 48,566  

Adjusted EBITDA Margin

     38.3 %      34.9 %      37.6 %      35.7 %      29.7 %      34.5 % 

 

(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.

 

6


Mobile Mini, Inc.  
Condensed Consolidated Balance Sheets  
(in thousands)  
     March 31,     December 31,  
     2019     2018  
     (unaudited)     (audited)  

ASSETS

 

Cash and cash equivalents

   $ 4,296     $ 5,605  

Receivables, net

     113,201       130,233  

Inventories

     11,702       11,725  

Rental fleet, net

     943,937       929,090  

Property, plant and equipment, net

     150,649       154,254  

Operating lease assets

     90,084       —    

Other assets

     15,945       13,398  

Intangibles, net

     53,967       55,542  

Goodwill

     706,639       705,217  
  

 

 

   

 

 

 

Total assets

   $ 2,090,420     $ 2,005,064  
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY  

Liabilities:

    

Accounts payable

   $ 28,746     $ 33,177  

Accrued liabilities

     66,245       88,136  

Operating lease liabilities

     91,863       —    

Lines of credit

     593,700       593,495  

Obligations under finance leases

     62,380       63,359  

Senior notes, net

     246,648       246,489  

Deferred income taxes

     175,681       170,139  
  

 

 

   

 

 

 

Total liabilities

     1,265,263       1,194,795  
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock

     503       500  

Additional paid-in capital

     624,941       619,850  

Retained earnings

     416,387       410,641  

Accumulated other comprehensive loss

     (67,756     (72,861

Treasury stock

     (148,918     (147,861
  

 

 

   

 

 

 

Total stockholders’ equity

     825,157       810,269  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,090,420     $ 2,005,064  
  

 

 

   

 

 

 

 

7


Mobile Mini, Inc.  
Condensed Consolidated Statements of Cash Flows  
(Unaudited)  
(in thousands)  
     Three Months Ended  
     March 31,  
     2019     2018  

Cash flows from operating activities:

    

Net income

   $ 18,085     $ 14,855  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Deferred financing costs write-off

     123       —    

Provision for doubtful accounts

     1,212       961  

Amortization of deferred financing costs

     505       515  

Amortization of long-term liabilities

     13       36  

Share-based compensation expense

     3,404       2,229  

Depreciation and amortization

     17,335       16,823  

Gain on sale of rental fleet

     (1,425     (1,533

Loss on disposal of property, plant and equipment

     18       334  

Deferred income taxes

     5,058       4,397  

Foreign currency exchange

     (1     (66

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

     (5,544     (3,620
  

 

 

   

 

 

 

Net cash provided by operating activities

     38,783       34,931  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Additions to rental fleet, excluding acquisitions

     (23,016     (15,389

Proceeds from sale of rental fleet

     3,338       3,844  

Additions to property, plant and equipment, excluding acquisitions

     (2,919     (4,752

Proceeds from sale of property, plant and equipment

     49       179  
  

 

 

   

 

 

 

Net cash used in investing activities

     (22,548     (16,118
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Net borrowings (repayments) under lines of credit

     203       (12,443

Deferred financing costs

     (3,254     —    

Principal payments on finance lease obligations

     (2,586     (1,990

Issuance of common stock

     1,690       1,525  

Dividend payments

     (12,426     (11,054

Purchase of treasury stock

     (1,057     (533
  

 

 

   

 

 

 

Net cash used in financing activities

     (17,430     (24,495
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     (114     (6
  

 

 

   

 

 

 

Net change in cash

     (1,309     (5,688

Cash and cash equivalents at beginning of period

     5,605       13,451  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 4,296     $ 7,763  
  

 

 

   

 

 

 

Equipment and other acquired through finance lease obligations

   $ 1,609     $ 2,897  

Capital expenditures accrued or payable

     8,012       6,613  

 

8


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 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
March 31,
 
     2019      2018  

Net income

   $     18,085      $     14,855  

Interest expense

     10,760        9,599  

Income tax provision

     6,523        4,949  

Depreciation and amortization

     17,335        16,823  

Deferred financing costs write-off

     123        —    
  

 

 

    

 

 

 

EBITDA

     52,826        46,226  

Share-based compensation expense

     3,404        2,229  

Restructuring expenses

     —          111  
  

 

 

    

 

 

 

Adjusted EBITDA

   $     56,230      $     48,566  
  

 

 

    

 

 

 
     Three Months Ended
March 31,
 
     2019      2018  

Net cash provided by operating activities

   $     38,783      $     34,931  

Interest paid

     14,276        12,348  

Income and franchise taxes paid

     2,020        120  

Share-based compensation expense, including restructuring expense

     (3,404      (2,229

Gain on sale of rental fleet

     1,425        1,533  

Loss on disposal of property, plant and equipment

     (18      (334

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

     (256      (143
  

 

 

    

 

 

 

EBITDA

   $     52,826      $     46,226  
  

 

 

    

 

 

 

 

9


Mobile Mini, Inc.  
Free Cash Flow GAAP Reconciliation  
(Unaudited)  
(in thousands)  
     Three Months Ended
March 31,
 
     2019     2018  

Net cash provided by operating activities

   $ 38,783     $ 34,931  
  

 

 

   

 

 

 

Additions to rental fleet, excluding acquisitions

     (23,016     (15,389

Proceeds from sale of rental fleet

     3,338       3,844  

Additions to property, plant and equipment, excluding acquisitions

     (2,919     (4,752

Proceeds from sale of property, plant and equipment

     49       179  
  

 

 

   

 

 

 

Net capital expenditures, excluding acquisitions

     (22,548     (16,118
  

 

 

   

 

 

 

Free cash flow

   $ 16,235     $ 18,813  
  

 

 

   

 

 

 

 

10


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 U.K. 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 and adjusted EBITDA for the three months ended March 31, 2019 were $1.3 million and $0.4 million higher than when calculated in accordance with GAAP.

 

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