Form 8-K
false 0000911109 0000911109 2020-01-28 2020-01-28

 

 

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): January 28, 2020

 

IMAGE

mobile mini, inc.

(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, $.01 par value Preferred Share Purchase Rights

 

MINI

 

Nasdaq Global Select Market

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 January 28, 2020 Mobile Mini, Inc. (the “Company”) issued a news release announcing its financial results for the period ended December 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 January 28, 2020 announcing its financial results.

         
 

104

   

Cover Page Interactive Data File (embedded within the Inline XBRL document).


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: January 28, 2020

 

 

/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 2019 RESULTS AND ANNOUNCES QUARTERLY DIVIDEND

Phoenix, AZ – January 28, 2020 – 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, 2019.

The Company realized net income of $29.0 million, or $0.66 per diluted share, in the fourth quarter of 2019. On an adjusted basis, fourth quarter net income was $29.8 million, or $0.67 per diluted share, as compared to adjusted net income of $23.7 million, or $0.53 per diluted share, for the same period last year. Adjusted EBITDA was $68.1 million and adjusted EBITDA margin was 42.7% for the fourth quarter of 2019.

Total revenues were $159.3 million and rental revenues were $152.1 million for the fourth quarter of 2019, as compared to $160.9 million and $152.0 million, respectively, for the same period last year. Rental revenues for the Storage Solutions and Tank & Pump Solutions businesses for the current quarter were $125.5 million and $26.6 million, respectively, compared to $122.2 million and $29.9 million for the same period last year.

Dividend

The Company’s Board of Directors declared a cash dividend of 30.3 cents per share, which will be paid on March 11, 2020 to shareholders of record as of February 26, 2020.

Fourth Quarter 2019 Highlights

 

   

Drove healthy year-over-year growth of 4.1% in North American Storage Solutions rental revenue.

 

   

Grew consolidated adjusted EBITDA 7.6%, year-over-year, and expanded adjusted EBITDA margin by 340 basis points to 42.7%, driven by a 460 basis point year-over-year increase for Storage Solutions.

 

   

Generated cash from operating activities of $60.8 million for the quarter and $212.7 million for the full year, resulting in free cash flow of $51.1 million for the quarter and $143.1 million for the year, nearly double the prior year.

 

   

Raised North American Storage Solutions core (excluding seasonal) rates 4.5% year-over-year, with rates on newly placed units up 5.4%.

 

   

Maintained strong average OEC utilization rate of 80.6% for Storage Solutions.

 

   

Further increased return on capital employed to 10.1% as of December 31, 2019, exceeding our weighted average cost of capital and improving 160 basis points from December 31, 2018.

 

   

Decreased leverage ratio to 3.6x as of December 31, 2019 compared to 4.2x as of December 31, 2018.

 

   

Completed three acquisitions in the quarter, thereby strengthening our existing operations in Missouri and New York and expanding our serviceable reach in the Bloomington, Illinois market.

CEO Comments

Kelly Williams, Mobile Mini’s President and Chief Executive Officer, remarked, “Our record free cash flow generation in 2019 reflects the strength of our business model and provides us with considerable flexibility in capital allocation. Our strong fourth quarter 2019 financial performance is highlighted by 7.6% year-over-year growth in consolidated adjusted EBITDA, along with margin expansion of 340 basis points to 42.7%. I am especially pleased with the performance of our North America Storage Solutions business which included rental revenue growth of 4.1% and a very robust adjusted EBITDA margin of 47.3%.”


Mr. Williams continued, “In the twelve months ended December 31, 2019, we executed our strategic plan and delivered on our Evergreen model. We also nearly doubled free cash flow in 2019 relative to the prior year. We enter 2020 from a position of operational and financial strength, with a large and diversified customer base and a sustainable operational cadence. On a consolidated basis, in 2020 we expect to continue to grow rental revenues by GDP plus 2% to 3% while expanding adjusted EBITDA margin and generating strong levels of consolidated free cash flow, exceeding 2019 amounts.”

Conference Call

Mobile Mini will host a conference call tomorrow, January 29th at 9 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 Investor Relations 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 90 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 200,200 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 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 grow our business with existing and new customers, as well as our ability to grow above GDP, expand adjusted EBITDA margins, and generate strong free cash flow, 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.

     

Mike Gaudreau (212) 836-9620

(602) 308-3879

     

Emily Tadano, Director of

Treasury & Investor Relations

(602) 845-4005

     
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, 2019     Three Months Ended December 31, 2018  
     Actual     Adjustments     Adjusted (1)     Actual     Adjustments     Adjusted (2)  

Revenues:

            

Rental

   $ 152,060     $ —       $ 152,060     $ 152,048     $ —       $ 152,048  

Sales

     7,149       —         7,149       8,654       —         8,654  

Other

     57       —         57       167       —         167  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     159,266       —         159,266       160,869       —         160,869  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     90,157       (972     89,185       95,090       —         95,090  

Cost of sales

     4,191       —         4,191       5,512       —         5,512  

Restructuring expense

     —         —         —         700       (700     —    

Asset impairment charge and loss on divestiture, net

     —         —         —         3,862       (3,862     —    

Depreciation and amortization

     17,623       —         17,623       16,794       —         16,794  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     111,971       (972     110,999       121,958       (4,562     117,396  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     47,295       972       48,267       38,911       4,562       43,473  

Other income (expense):

            

Interest expense

     (9,633     —         (9,633     (10,725     —         (10,725

Foreign currency exchange

     (95     —         (95     (5     —         (5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax provision

     37,567       972       38,539       28,181       4,562       32,743  

Income tax provision

     8,551       226       8,777       13,933       (4,863     9,070  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 29,016     $ 746     $ 29,762     $ 14,248     $ 9,425     $ 23,673  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA/Adjusted EBITDA

   $ 64,823       $ 68,082     $ 55,700       $ 63,263  

EBITDA/Adjusted EBITDA as a percentage of total revenues

     40.7       42.7     34.6       39.3

Earnings per share:

            

Basic

   $ 0.66       $ 0.68     $ 0.32       $ 0.53  

Diluted

     0.66         0.67       0.32         0.53  

Weighted average number of common and common share equivalents outstanding:

            

Basic

     43,707         43,707       44,353         44,353  

Diluted

     44,266         44,266       44,885         44,885  

 

(1)

Adjusted column for the three-month period ended December 31, 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 December 31, 2019 include the following, along with the related tax effects:

 

   

Reduction of rental, selling and general expenses to exclude $0.5 million of expenses related to actual and potential acquisitions.

 

   

Reduction of rental, selling and general expenses to exclude $0.5 million of expenses related to a realignment of personnel and resources with our current business model and operational needs.

 

(2)

Adjusted column for the three-month period 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 effect.

 

   

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, along with the related tax effect.

 

   

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.

 

4


Mobile Mini, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except percentages and per share data)

 

    Twelve Months Ended December 31, 2019     Twelve Months Ended December 31, 2018  
    Actual     Adjustments     Adjusted (1)     Actual     Adjustments     Adjusted (2)  

Revenues:

           

Rental

  $ 581,657     $ —       $ 581,657     $ 558,197     $ —       $ 558,197  

Sales

    30,394       —         30,394       34,354       —         34,354  

Other

    574       —         574       678       —         678  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    612,625       —         612,625       593,229       —         593,229  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

           

Rental, selling and general expenses

    369,525       (7,202     362,323       364,123       —         364,123  

Cost of sales

    18,675       —         18,675       22,437       —         22,437  

Restructuring expenses

    —         —         —         2,006       (2,006     —    

Asset impairment charge and loss on divestiture, net

    —         —         —         102,140       (102,140     —    

Depreciation and amortization

    70,583       —         70,583       67,000       —         67,000  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

    458,783       (7,202     451,581       557,706       (104,146     453,560  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

    153,842       7,202       161,044       35,523       104,146       139,669  

Other income (expense):

           

Interest income

    12       —         12       6       —         6  

Interest expense

    (41,378     —         (41,378     (40,904     —         (40,904

Deferred financing costs write-off

    (123     123       —         —         —         —    

Foreign currency exchange

    (274     —         (274     64       —         64  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income tax provision

    112,079       7,325       119,404       (5,311     104,146       98,835  

Income tax provision

    28,345       919       29,264       2,751       22,475       25,226  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ 83,734     $ 6,406     $ 90,140     $ (8,062   $ 81,671     $ 73,609  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA/Adjusted EBITDA

  $ 224,163       $ 242,893     $ 102,593       $ 217,243  

EBITDA/Adjusted EBITDA as a percentage of total revenues

    36.6       39.6     17.3       36.6

Earnings (loss) per share:

           

Basic

  $ 1.90       $ 2.04     $ (0.18     $ 1.66  

Diluted

    1.88         2.02       (0.18       1.64  

Weighted average number of common and common share equivalents outstanding:

           

Basic

    44,178         44,178       44,295         44,295  

Diluted

    44,550         44,550       44,295         44,980  

 

(1)

Adjusted column for the twelve months ended December 31, 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 twelve-month period ended December 31, 2019 include the following, along with the related tax effects:

 

   

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 retired as an employee of the Company and assumed the position of Chairman of the Board.

 

   

Reduction of rental, selling and general expenses to exclude $3.1 million of expenses related to actual and potential acquisitions.

 

   

Reduction of rental, selling and general expenses to exclude $0.5 million of expenses related to a realignment of personnel and resources with our current business model and operational needs.

 

   

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

 

   

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 effect.

 

   

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.

 

5


Mobile Mini, Inc.

Operating Data

(Unaudited)

 

     2019     2018  

As of December 31:

    

Stand-alone Storage Solutions locations

     120       117  

Stand-alone Tank & Pump Solutions locations

     20       20  

Combined Storage Solutions and Tank & Pump Solutions locations

     16       17  

Storage Solutions rental fleet units

     200,200       195,600  

Tank & Pump Solutions rental fleet units

     12,700       12,600  

Average utilization based on original equipment cost

    

Three months ended December 31:

    

Storage Solutions

     80.6     82.9

Tank & Pump Solutions

     68.6     76.0

Twelve months ended December 31:

    

Storage Solutions

     77.9     74.2

Tank & Pump Solutions

     71.1     74.0

 

6


Mobile Mini, Inc.

Business Segment Information - Adjusted (1)

(Unaudited)

(in thousands, except percentages)

 

     Three Months Ended December 31, 2019  
     Storage Solutions              
     North
America
    United
Kingdom
    Total     Tank & Pump
Solutions
    Consolidated  

Revenues:

          

Rental

   $ 106,668     $ 18,814     $ 125,482     $ 26,578     $ 152,060  

Sales

     4,515       1,364       5,879       1,270       7,149  

Other

     36       —         36       21       57  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     111,219       20,178       131,397       27,869       159,266  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

          

Rental, selling and general expenses

     58,106       12,482       70,588       18,597       89,185  

Cost of sales

     2,578       1,114       3,692       499       4,191  

Depreciation and amortization

     9,129       1,807       10,936       6,687       17,623  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     69,813       15,403       85,216       25,783       110,999  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   $ 41,406     $ 4,775     $ 46,181     $ 2,086     $ 48,267  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 52,579     $ 6,588     $ 59,167     $ 8,915     $ 68,082  

Adjusted EBITDA Margin

     47.3     32.6     45.0     32.0     42.7
     Three Months Ended December 31, 2018  
     Storage Solutions              
     North
America
    United
Kingdom
    Total     Tank & Pump
Solutions
    Consolidated  

Revenues:

          

Rental

   $ 102,486     $ 19,685     $ 122,171     $ 29,877     $ 152,048  

Sales

     4,797       2,450       7,247       1,407       8,654  

Other

     66       63       129       38       167  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     107,349       22,198       129,547       31,322       160,869  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

          

Rental, selling and general expenses

     62,582       12,818       75,400       19,690       95,090  

Cost of sales

     2,862       1,882       4,744       768       5,512  

Depreciation and amortization

     8,242       1,842       10,084       6,710       16,794  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     73,686       16,542       90,228       27,168       117,396  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   $ 33,663     $ 5,656     $ 39,319     $ 4,154     $ 43,473  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 44,720     $ 7,571     $ 52,291     $ 10,972     $ 63,263  

Adjusted EBITDA Margin

     41.7     34.1     40.4     35.0     39.3

 

(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.

Business Segment Information - Adjusted (1)

(Unaudited)

(in thousands, except percentages)

 

     Twelve Months Ended December 31, 2019  
     Storage Solutions              
     North
America
    United
Kingdom
    Total     Tank & Pump
Solutions
    Consolidated  

Revenues:

          

Rental

   $ 389,674     $ 75,738     $ 465,412     $ 116,245     $ 581,657  

Sales

     18,047       6,819       24,866       5,528       30,394  

Other

     399             399       175       574  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     408,120       82,557       490,677       121,948       612,625  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

          

Rental, selling and general expenses

     232,731       51,663       284,394       77,929       362,323  

Cost of sales

     10,441       5,385       15,826       2,849       18,675  

Depreciation and amortization

     36,103       7,070       43,173       27,410       70,583  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     279,275       64,118       343,393       108,188       451,581  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   $ 128,845     $ 18,439     $ 147,284     $ 13,760     $ 161,044  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 175,295     $ 25,759       201,054     $ 41,839     $ 242,893  

Adjusted EBITDA Margin

     43.0     31.2     41.0     34.3     39.6
     Twelve Months Ended December 31, 2018  
     Storage Solutions              
     North
America
    United
Kingdom
    Total     Tank & Pump
Solutions
    Consolidated  

Revenues:

          

Rental

   $ 366,713     $ 80,751     $ 447,464     $ 110,733     $ 558,197  

Sales

     20,008       9,024       29,032       5,322       34,354  

Other

     304       224       528       150       678  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     387,025       89,999       477,024       116,205       593,229  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

          

Rental, selling and general expenses

     233,764       53,884       287,648       76,475       364,123  

Cost of sales

     12,263       7,176       19,439       2,998       22,437  

Depreciation and amortization

     33,591       7,891       41,482       25,518       67,000  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     279,618       68,951       348,569       104,991       453,560  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   $ 107,407     $ 21,048     $ 128,455     $ 11,214     $ 139,669  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 150,871     $ 29,218     $ 180,089     $ 37,154     $ 217,243  

Adjusted EBITDA Margin

     39.0     32.5     37.8     32.0     36.6

 

(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.

 

8


Mobile Mini, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

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

ASSETS

 

Cash and cash equivalents

   $ 8,053     $ 5,605  

Receivables, net

     104,390       130,233  

Inventories

     9,517       11,725  

Rental fleet, net

     966,223       929,090  

Property, plant and equipment, net

     157,183       154,254  

Operating lease assets

     93,116       —    

Other assets

     13,806       13,398  

Intangibles, net

     51,185       55,542  

Goodwill

     713,404       705,217  
  

 

 

   

 

 

 

Total assets

   $ 2,116,877     $ 2,005,064  
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

Liabilities:

    

Accounts payable

   $ 31,554     $ 33,177  

Accrued liabilities

     77,069       88,136  

Operating lease liabilities

     94,932       —    

Lines of credit

     555,400       593,495  

Obligations under finance leases

     74,399       63,359  

Senior notes, net

     247,127       246,489  

Deferred income taxes

     195,034       170,139  
  

 

 

   

 

 

 

Total liabilities

     1,275,515       1,194,795  
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock

     504       500  

Additional paid-in capital

     638,083       619,850  

Retained earnings

     445,285       410,641  

Accumulated other comprehensive loss

     (65,093     (72,861

Treasury stock

     (177,417     (147,861
  

 

 

   

 

 

 

Total stockholders’ equity

     841,362       810,269  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,116,877     $ 2,005,064  
  

 

 

   

 

 

 

 

9


Mobile Mini, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

     Twelve Months Ended  
     December 31,  
     2019     2018  

Cash flows from operating activities:

    

Net income (loss)

   $ 83,734     $ (8,062

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

    

Deferred financing costs write-off

     123       —    

Asset impairment charge and loss on divestiture, net

     —         102,140  

Provision for doubtful accounts

     5,879       2,412  

Amortization of deferred financing costs

     1,837       2,060  

Amortization of long-term liabilities

     13       145  

Share-based compensation expense

     15,121       10,867  

Depreciation and amortization

     70,583       67,000  

Gain on sale of rental fleet

     (5,923     (6,055

Loss on disposal of property, plant and equipment

     100       600  

Deferred income taxes

     23,305       (2,523

Foreign currency exchange

     274       (64

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

     17,672       (8,422
  

 

 

   

 

 

 

Net cash provided by operating activities

     212,718       160,098  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Cash paid for business acquired, net of cash acquired

     (13,048     —    

Proceeds from sale of assets held for sale

     —         10,153  

Additions to rental fleet, excluding acquisitions

     (70,851     (85,961

Proceeds from sale of rental fleet

     13,726       14,993  

Additions to property, plant and equipment, excluding acquisitions

     (13,274     (16,931

Proceeds from sale of property, plant and equipment

     740       683  
  

 

 

   

 

 

 

Net cash used in investing activities

     (82,707     (77,063
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Net repayments under lines of credit

     (38,096     (40,790

Deferred financing costs

     (3,521     —    

Principal payments on finance lease obligations

     (10,690     (9,746

Issuance of common stock

     3,116       3,617  

Dividend payments

     (48,882     (44,530

Purchase of treasury stock

     (29,556     (695
  

 

 

   

 

 

 

Net cash used in financing activities

     (127,629     (92,144
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     66       1,263  
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     2,448       (7,846

Cash and cash equivalents at beginning of period

     5,605       13,451  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 8,053     $ 5,605  
  

 

 

   

 

 

 

Equipment and other acquired through finance lease obligations

   $ 21,730     $ 20,314  

Capital expenditures accrued or payable

     5,591       10,752  

 

10


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,
 
     2019      2018      2019      2018  

Net income (loss)

   $     29,016      $     14,248      $ 83,734      $ (8,062

Interest expense

     9,633        10,725        41,378        40,904  

Income tax provision

     8,551        13,933        28,345        2,751  

Depreciation and amortization

     17,623        16,794        70,583        67,000  

Deferred financing costs write-off

     —          —          123        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

     64,823        55,700        224,163        102,593  

Share-based compensation expense

     2,287        3,001        11,528        10,504  

Restructuring expenses

     —          700        —          2,006  

Asset impairment charge and loss on divestiture, net

     —          3,862        —          102,140  

Chief Executive Officer transition

     —          —          3,593        —    

Acquisition-related expenses

     491        —          3,128        —    

Other

     481        —          481        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 68,082      $ 63,263      $ 242,893      $ 217,243  
  

 

 

    

 

 

    

 

 

    

 

 

 
     Three Months Ended
December 31,
     Twelve Months Ended
December 31,
 
     2019      2018      2019      2018  

Net cash provided by operating activities

   $ 60,819      $ 43,878      $ 212,718      $ 160,098  

Interest paid

     5,994        6,226        40,150        37,979  

Income and franchise taxes paid

     1,481        1,666        6,600        4,012  

Share-based compensation expense, including restructuring expense

     (2,287      (3,001      (15,121      (10,867

Asset impairment charge and loss on divestiture, net

     —          (3,862      —          (102,140

Gain on sale of rental fleet

     1,313        1,532        5,923        6,055  

Loss on disposal of property, plant and equipment

     (54      (52      (100      (600

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

     (2,443      9,313        (26,007      8,056  
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

   $ 64,823      $ 55,700      $ 224,163      $ 102,593  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

11


Mobile Mini, Inc.

Free Cash Flow GAAP Reconciliation

(Unaudited)

(in thousands)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2019     2018     2019     2018  

Net cash provided by operating activities

   $     60,819     $ 43,878     $     212,718     $     160,098  
  

 

 

   

 

 

   

 

 

   

 

 

 

Additions to rental fleet, excluding acquisitions

     (9,604     (20,341     (70,851     (85,961

Proceeds from sale of rental fleet

     2,944       3,546       13,726       14,993  

Additions to property, plant and equipment, excluding acquisitions

     (3,357     (2,296     (13,274     (16,931

Proceeds from sale of property, plant and equipment

     292       80       740       683  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net capital expenditures, excluding acquisitions

     (9,725     (19,011     (69,659     (87,216
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $ 51,094     $ 24,867     $ 143,059     $ 72,882  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

12


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.

 

13