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): July 25, 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))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common stock, $0.01 par value
Preferred Share Purchase Rights
  MINI   Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

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 July 25, 2019 Mobile Mini, Inc. (the “Company”) issued a news release announcing its financial results for the period ended June 30, 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 July 25, 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: July 25, 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 Q2 2019 RESULTS AND ANNOUNCES QUARTERLY DIVIDEND

Phoenix, AZ – July 25, 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 June 30, 2019.

Total revenues were $150.2 million and rental revenues were $141.9 million, as compared to $142.0 million and $132.9 million, respectively, for the same period last year. Rental revenues for the Storage Solutions and Tank & Pump Solutions businesses for the current quarter were $110.4 million and $31.5 million, respectively, compared to $105.8 million and $27.1 million, respectively, for the same period last year.

The Company realized net income of $14.1 million, or $0.31 per diluted share, in the second quarter of 2019. On an adjusted basis, second quarter net income was $18.2 million, or $0.41 per diluted share, as compared to adjusted net income of $15.9 million, or $0.35 per diluted share, for the second quarter of 2018. Adjusted EBITDA was $56.9 million and adjusted EBITDA margin was 37.9% for the second 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 August 28, 2019 to shareholders of record as of August 14, 2019.

Second Quarter 2019 Highlights

 

   

Continued strong rental revenue growth in Tank & Pump Solutions (“T&P”) with a 16.3% year-over-year increase.

 

   

Drove healthy North American Storage Solutions (“SS”) rental revenue year-over-year growth of 7.1%.

 

   

Delivered year-over-year rate growth of 3.4% in SS and a mid-single digit increase for T&P.

 

   

Achieved strong average OEC utilization rates of 76.4% for SS and 73.5% for T&P.

 

   

Grew adjusted EBITDA 13.8%, year-over-year, and expanded adjusted EBITDA margin by 270 basis points to 37.9%.

 

   

Generated robust free cash flow of $38.7 million, an increase of $27.0 million year-over-year.

 

   

Increased return on capital employed to 9.5% as of June 30, 2019, which exceeds weighted average cost of capital and is a 190 basis point improvement from June 30, 2018.

 

   

Decreased leverage ratio to 3.8x as of June 30, 2019 from 4.2x as of December 31, 2018.

CEO Comments

Erik Olsson, Mobile Mini’s Chief Executive Officer, remarked, “The strong performance in the second quarter reflects the continued momentum we have created over the last several quarters by executing on our strategy from the solid platform we have built. In addition to very strong margin expansion we saw robust growth in revenues, adjusted EBITDA, and importantly, free cash flow. Especially notable is the continued strong rental revenue growth in our Tank & Pump segment, driven by both volume and rate, and as we continue to demonstrate our value proposition, we believe we will continue to grow this business with existing and new large customers. Our Storage Solutions business remains strong, driven by rate increases and healthy levels of demand in North America, where solid pending orders indicate healthy growth in the back half of the year. The cycle is still in our favor and our outlook remains very positive for the remainder of 2019.”


Mr. Olsson continued, “I am pleased to be transitioning into my role as Chairman of the Board following a record year in 2018 and another strong year well underway. Mobile Mini is a very different company than when I first joined. Today our strategy is to profitably grow our business by offering customers high quality products and services in two segments: containers and tanks. Because of our unmatched quality and service in these areas, we are able to command premium pricing, which improves both revenues and margins. We invest in long-lived steel-centric products with minimal maintenance requirements and short pay-back periods and drive sustainable growth by partnering with large customers across many industries that recognize the value of our unique scale and technology solutions. Combining this strategy with a culture of continuous improvement to drive operational efficiencies, we deliver shareholder value through strong cash flows and great returns. Our fundamentals today are very strong and I would like to personally thank the employees of Mobile Mini for their consistent dedication and hard work during this time.”

Conference Call

Mobile Mini will host a conference call later today, July 25th at 5 pm 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 198,000 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 12,700 units. Mobile Mini’s network is comprised of 155 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 grow our business with existing and new customers, as well as our ability to achieve healthy growth in the second half of the year, 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 June 30, 2019     Three Months Ended June 30, 2018  
     Actual     Adjustments     Adjusted (1)     Actual     Adjustments     Adjusted (2)  

Revenues:

            

Rental

   $ 141,906     $ —       $ 141,906     $ 132,887     $ —       $ 132,887  

Sales

     8,135       —         8,135       8,881       —         8,881  

Other

     140       —         140       231       —         231  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     150,181       —         150,181       141,999       —         141,999  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     95,735       (4,332     91,403       89,271       —         89,271  

Cost of sales

     5,044       —         5,044       5,764       —         5,764  

Restructuring expenses

     —         —         —         1,195       (1,195     —    

Depreciation and amortization

     18,135       —         18,135       17,192       —         17,192  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     118,914       (4,332     114,582       113,422       (1,195     112,227  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     31,267       4,332       35,599       28,577       1,195       29,772  

Other income (expense):

            

Interest expense

     (10,592     —         (10,592     (10,093     —         (10,093

Foreign currency exchange

     (167     —         (167     (21     —         (21
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax provision

     20,508       4,332       24,840       18,463       1,195       19,658  

Income tax provision

     6,450       185       6,635       3,463       300       3,763  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 14,058     $ 4,147     $ 18,205     $ 15,000     $ 895     $ 15,895  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA/Adjusted EBITDA

   $ 49,235       $ 56,907     $ 45,748       $ 49,987  

EBITDA/Adjusted EBITDA as a percentage of total revenues

     32.8       37.9     32.2       35.2

Earnings per share:

            

Basic

   $ 0.32       $ 0.41     $ 0.34       $ 0.36  

Diluted

     0.31         0.41       0.33         0.35  

Weighted average number of common and common share equivalents outstanding:

            

Basic

     44,496         44,496       44,287         44,287  

Diluted

     44,750         44,750       45,091         45,091  

 

(1)

Adjusted column for the three months ended June 30, 2019 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 June 30, 2019 include the following:

 

   

Reduction of rental, selling and general expenses to exclude $3.6 million of non-cash share-based compensation related to transition agreements for our Chief Executive Officer who is retiring as an employee of the Company and assuming the position of Chairman of the Board.

 

   

Reduction of rental, selling and general expenses to exclude $0.7 million of expenses related to potential acquisitions, along with the related tax effect.

 

(2)

Adjusted column for the three months ended June 30, 2018 excludes costs of $1.2 million related to restructuring that management believes are not indicative of our business, along with the related tax effects. 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.

Condensed Consolidated Statements of Income

(Unaudited)

(in thousands, except percentages and per share data)

 

     Six Months Ended June 30, 2019     Six Months Ended June 30, 2018  
     Actual     Adjustments     Adjusted (1)     Actual     Adjustments     Adjusted (2)  

Revenues:

            

Rental

   $ 284,078     $ —       $ 284,078     $ 265,225     $ —       $ 265,225  

Sales

     15,358       —         15,358       16,984       —         16,984  

Other

     406       —         406       444       —         444  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     299,842       —         299,842       282,653       —         282,653  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     187,969       (4,332     183,637       178,269       —         178,269  

Cost of sales

     9,646       —         9,646       11,155       —         11,155  

Restructuring expenses

     —         —         —         1,306       (1,306     —    

Depreciation and amortization

     35,470       —         35,470       34,015       —         34,015  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     233,085       (4,332     228,753       224,745       (1,306     223,439  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     66,757       4,332       71,089       57,908       1,306       59,214  

Other income (expense):

            

Interest income

     —         —         —         6       —         6  

Interest expense

     (21,352     —         (21,352     (19,692     —         (19,692

Deferred financing costs write-off

     (123     123       —         —         —         —    

Foreign currency exchange

     (166     —         (166     45       —         45  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax provision

     45,116       4,455       49,571       38,267       1,306       39,573  

Income tax provision

     12,973       217       13,190       8,412       328       8,740  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 32,143     $ 4,238     $ 36,381     $ 29,855     $ 978     $ 30,833  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA/Adjusted EBITDA

   $ 102,061       $ 113,137     $ 91,974       $ 98,553  

EBITDA/Adjusted EBITDA as a percentage of total revenues

     34.0       37.7     32.5       34.9

Earnings per share:

            

Basic

   $ 0.72       $ 0.82     $ 0.67       $ 0.70  

Diluted

     0.72         0.81       0.66         0.69  

Weighted average number of common and common share equivalents outstanding:

            

Basic

     44,472         44,472       44,251         44,251  

Diluted

     44,814         44,814       44,967         44,967  

 

(1)

Adjusted column for the six months ended June 30, 2019 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 six-month period ended June 30, 2019 include the following:

 

   

Reduction of rental, selling and general expenses to exclude $3.6 million of non-cash share-based compensation related to transition agreements for our Chief Executive Officer who is retiring as an employee of the Company and assuming the position of Chairman of the Board.

 

   

Reduction of rental, selling and general expenses to exclude $0.7 million of expenses related to potential acquisitions, along with the related tax effect.

 

   

Exclusion of $0.1 million of deferred financing costs that were written off in conjunction with the amendment of our lines of credit.

 

(2)

Adjusted column for the six months ended June 30, 2018 excludes costs of $1.3 million related to restructuring that management believes are not indicative of our business, along with the related tax effects. 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.

 

5


Mobile Mini, Inc.

Operating Data

(Unaudited)

 

     2019     2018  

As of June 30:

    

Stand-alone Storage Solutions locations

     118       118  

Stand-alone Tank & Pump Solutions locations

     20       19  

Combined Storage Solutions and Tank & Pump Solutions locations

     17       18  

Storage Solutions rental fleet units

     198,000       216,200  

Tank & Pump Solutions rental fleet units

     12,700       12,600  

Average utilization based on original equipment cost

    

Three months ended June 30:

    

Storage Solutions

     76.4     69.3

Tank & Pump Solutions

     73.5     74.2

Average utilization based on original equipment cost

    

Six months ended June 30:

    

Storage Solutions

     76.7     68.9

Tank & Pump Solutions

     73.8     73.9

 

6


Mobile Mini, Inc.

Business Segment Information - Adjusted (1)

(Unaudited)

(in thousands, except percentages)

 

     Three Months Ended June 30, 2019     Three Months Ended June 30, 2018  
     Storage
Solutions
    Tank & Pump
Solutions
    Total     Storage
Solutions
    Tank & Pump
Solutions
    Total  

Revenues:

            

Rental

   $ 110,385     $ 31,521     $ 141,906     $ 105,790     $ 27,097     $ 132,887  

Sales

     6,771       1,364       8,135       7,350       1,531       8,881  

Other

     63       77       140       190       41       231  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     117,219       32,962       150,181       113,330       28,669       141,999  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     70,725       20,678       91,403       70,303       18,968       89,271  

Cost of sales

     4,270       774       5,044       4,900       864       5,764  

Depreciation and amortization

     10,938       7,197       18,135       10,908       6,284       17,192  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     85,933       28,649       114,582       86,111       26,116       112,227  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   $ 31,286     $ 4,313     $ 35,599     $ 27,219     $ 2,553     $ 29,772  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 45,269     $ 11,638     $ 56,907     $ 41,043     $ 8,944     $ 49,987  

Adjusted EBITDA Margin

     38.6     35.3     37.9     36.2     31.2     35.2
     Six Months Ended June 30, 2019     Six Months Ended June 30, 2018  
     Storage
Solutions
    Tank & Pump
Solutions
    Total     Storage
Solutions
    Tank & Pump
Solutions
    Total  

Revenues:

            

Rental

   $ 223,110     $ 60,968     $ 284,078     $ 212,654     $ 52,571     $ 265,225  

Sales

     12,548       2,810       15,358       14,089       2,895       16,984  

Other

     288       118       406       359       85       444  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     235,946       63,896       299,842       227,102       55,551       282,653  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     143,351       40,286       183,637       141,127       37,142       178,269  

Cost of sales

     8,086       1,560       9,646       9,469       1,686       11,155  

Depreciation and amortization

     21,661       13,809       35,470       21,640       12,375       34,015  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     173,098       55,655       228,753       172,236       51,203       223,439  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   $ 62,848     $ 8,241     $ 71,089     $ 54,866     $ 4,348     $ 59,214  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 90,697     $ 22,440     $ 113,137     $ 81,624     $ 16,929     $ 98,553  

Adjusted EBITDA Margin

     38.4     35.1     37.7     35.9     30.5     34.9

 

(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)

 

     June 30,     December 31,  
     2019     2018  
     (unaudited)     (audited)  

ASSETS

 

Cash and cash equivalents

   $ 4,687     $ 5,605  

Receivables, net

     106,694       130,233  

Inventories

     10,385       11,725  

Rental fleet, net

     951,696       929,090  

Property, plant and equipment, net

     150,025       154,254  

Operating lease assets

     96,883       —    

Other assets

     14,947       13,398  

Intangibles, net

     52,321       55,542  

Goodwill

     705,260       705,217  
  

 

 

   

 

 

 

Total assets

   $ 2,092,898     $ 2,005,064  
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY  

Liabilities:

    

Accounts payable

   $ 32,190     $ 33,177  

Accrued liabilities

     71,621       88,136  

Operating lease liabilities

     98,687       —    

Lines of credit

     580,100       593,495  

Obligations under finance leases

     64,536       63,359  

Senior notes, net

     246,808       246,489  

Deferred income taxes

     180,308       170,139  
  

 

 

   

 

 

 

Total liabilities

     1,274,250       1,194,795  
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock

     503       500  

Additional paid-in capital

     631,988       619,850  

Retained earnings

     418,073       410,641  

Accumulated other comprehensive loss

     (72,992     (72,861

Treasury stock

     (158,924     (147,861
  

 

 

   

 

 

 

Total stockholders’ equity

     818,648       810,269  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,092,898     $ 2,005,064  
  

 

 

   

 

 

 

 

8


Mobile Mini, Inc.  
Condensed Consolidated Statements of Cash Flows  
(Unaudited)  
(in thousands)  
     Six Months Ended  
     June 30,  
     2019     2018  

Cash flows from operating activities:

    

Net income

   $ 32,143     $ 29,855  

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

    

Deferred financing costs write-off

     123       —    

Provision for doubtful accounts

     2,303       1,966  

Amortization of deferred financing costs

     940       1,030  

Amortization of long-term liabilities

     13       72  

Share-based compensation expense

     10,337       5,636  

Depreciation and amortization

     35,470       34,015  

Gain on sale of rental fleet

     (3,041     (3,260

Loss on disposal of property, plant and equipment

     102       477  

Deferred income taxes

     10,086       7,253  

Foreign currency exchange

     166       (45

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

     11,910       (7,047
  

 

 

   

 

 

 

Net cash provided by operating activities

     100,552       69,952  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Additions to rental fleet, excluding acquisitions

     (46,397     (38,476

Proceeds from sale of rental fleet

     7,054       7,677  

Additions to property, plant and equipment, excluding acquisitions

     (6,435     (9,081

Proceeds from sale of property, plant and equipment

     133       467  
  

 

 

   

 

 

 

Net cash used in investing activities

     (45,645     (39,413
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Net repayments under lines of credit

     (13,395     (16,630

Deferred financing costs

     (3,332     —    

Principal payments on finance lease obligations

     (5,141     (4,103

Issuance of common stock

     1,804       2,494  

Dividend payments

     (24,689     (22,120

Purchase of treasury stock

     (11,063     (540
  

 

 

   

 

 

 

Net cash used in financing activities

     (55,816     (40,899
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     (9     941  
  

 

 

   

 

 

 

Net change in cash

     (918     (9,419

Cash and cash equivalents at beginning of period

     5,605       13,451  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 4,687     $ 4,032  
  

 

 

   

 

 

 

Equipment and other acquired through finance lease obligations

   $ 6,319     $ 6,450  

Capital expenditures accrued or payable

     6,528       7,190  

 

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 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
June 30,
     Six Months Ended
June 30,
 
     2019      2018      2019      2018  

Net income

   $ 14,058      $ 15,000      $ 32,143      $ 29,855  

Interest expense

     10,592        10,093        21,352        19,692  

Income tax provision

     6,450        3,463        12,973        8,412  

Depreciation and amortization

     18,135        17,192        35,470        34,015  

Deferred financing costs write-off

     —          —          123        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

     49,235        45,748        102,061        91,974  

Share-based compensation expense

     3,340        3,044        6,744        5,273  

Restructuring expenses

     —          1,195        —          1,306  

Chief Executive Officer transition

     3,593        —          3,593        —    

Acquisition-related expenses

     739        —          739        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 56,907      $ 49,987      $ 113,137      $ 98,553  
  

 

 

    

 

 

    

 

 

    

 

 

 
     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2019      2018      2019      2018  

Net cash provided by operating activities

   $ 61,769      $ 35,021      $ 100,552      $ 69,952  

Interest paid

     5,919        5,829        20,195        18,177  

Income and franchise taxes paid

     1,742        1,287        3,762        1,407  

Share-based compensation expense, including restructuring expense

     (6,933      (3,407      (10,337      (5,636

Gain on sale of rental fleet

     1,616        1,727        3,041        3,260  

Loss on disposal of property, plant and equipment

     (84      (143      (102      (477

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

     (14,794      5,434        (15,050      5,291  
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

   $     49,235      $     45,748      $     102,061      $     91,974  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

10


Mobile Mini, Inc.  
Free Cash Flow GAAP Reconciliation  
(Unaudited)  
(in thousands)  
     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2019     2018     2019     2018  

Net cash provided by operating activities

   $ 61,769     $ 35,021     $ 100,552     $ 69,952  
  

 

 

   

 

 

   

 

 

   

 

 

 

Additions to rental fleet, excluding acquisitions

     (23,381     (23,087     (46,397     (38,476

Proceeds from sale of rental fleet

     3,716       3,833       7,054       7,677  

Additions to property, plant and equipment, excluding acquisitions

     (3,516     (4,329     (6,435     (9,081

Proceeds from sale of property, plant and equipment

     84       288       133       467  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net capital expenditures, excluding acquisitions

     (23,097     (23,295     (45,645     (39,413
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $ 38,672     $ 11,726     $ 54,907     $ 30,539  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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.

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 June 30, 2019 were $1.1 million and $0.4 million higher than when calculated in accordance with GAAP.

 

12