8-K
MOBILE MINI INC false 0000911109 0000911109 2020-05-01 2020-05-01

 

 

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): May 1, 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 May 1, 2020 Mobile Mini, Inc. (the “Company”) issued a news release announcing its financial results for the period ended March 31, 2020. 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 May 1, 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: May 1, 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 Q1 2020 RESULTS AND ANNOUNCES QUARTERLY DIVIDEND

Phoenix, AZ – May 1, 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 March 31, 2020.

The Company realized net income of $8.3 million, or $0.19 per diluted share, in the first quarter of 2020. On an adjusted basis, first quarter net income was $22.8 million, or $0.51 per diluted share, as compared to adjusted net income of $18.2 million, or $0.41 per diluted share, for the same period last year. Adjusted EBITDA was $59.9 million and adjusted EBITDA margin was 40.2% for the first quarter of 2020, compared to adjusted EBITDA of $56.2 million and adjusted EBITDA margin of 37.6% in the first quarter of 2019.

Total revenues were $149.0 million and rental revenues were $140.7 million for the first quarter of 2020, as compared to $149.7 million and $142.2 million, respectively, for the same period last year. Rental revenues for the Storage Solutions and Tank & Pump Solutions businesses for the current quarter were $114.7 million and $25.9 million, respectively, compared to $112.7 million and $29.5 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 May 27, 2020 to shareholders of record as of May 13, 2020.

Merger Agreement

On March 2, 2020, we announced that we have entered into an Agreement and Plan of Merger with WillScot Corporation (“WillScot”). The pending merger with WillScot is subject to customary closing conditions, including receipt of regulatory approvals and stockholder approvals from the Company’s and WillScot’s stockholders. We are working collaboratively with our counterparts at WillScot to satisfy these closing conditions and plan the integration of the two businesses with the expectation of closing in the third quarter of 2020. We believe that the merger will result in strategic and financial benefits by combining the two industry leaders in the complementary modular space and portable storage solutions markets.

COVID-19

Mobile Mini’s top priorities are the health and safety of our employees and customers. As such the Company has taken numerous substantial steps to this end, including among other things, transitioning employees to a work from home model when possible, and implementing social distancing policies for those employees in the field.

Operating within these guidelines, Mobile Mini remains fully operational as an essential business, including delivering hundreds of units in support of testing and relief efforts in the fight against COVID-19. Mobile Mini’s ground-level offices and containers are being utilized as testing centers and for extra office space to provide social distancing, which when combined with the furniture and handwashing stations available within our managed services business, makes Mobile Mini an efficient one-call solution for those on the front lines of the battle against COVID-19. Mobile Mini’s core business operations also remain intact, as the Company provides services to customers in each of the 16 Critical Infrastructure Sectors identified by the United States Federal Government.


CEO Comments

Kelly Williams, Mobile Mini’s President and Chief Executive Officer, remarked, “I would like to thank Mobile Mini employees for their hard work and dedication. The Mobile Mini team has risen to the challenges of maintaining operations in these unprecedented circumstances. Safety is our most important core value and we are dedicated to the health and safety of our employees and customers while providing uninterrupted delivery of our premium products and services across all our business segments. Though we have been deemed an essential business, this pandemic is unprecedented and the full extent of its impact on our operations is uncertain. While our strong first quarter was minimally impacted by the COVID-19 outbreak, we do expect a decrease in demand for our products and services in the near-term, leading to a year-over-year and sequential decrease in our second quarter 2020 rental revenues. The majority of our fleet currently on-rent is being utilized to contain inventory, supplies or other products, which translates into ongoing storage requirements for many of our clients. Our pipeline of pending orders, however, is down compared to the prior-year due to postponed projects in our end markets which will lead to reduced rental revenue in the near-term, including a decrease in trucking revenue due to reduced delivery and pickup activity. Ultimately, some postponed projects could move into late 2020 or early 2021 and some could be cancelled.”

Mr. Williams continued, “Mobile Mini’s flexible and efficient business structure is demand driven, allowing us to minimize the effect of reduced revenues on adjusted EBITDA and free cash flows by managing expenses and capital expenditures. We have already instituted several cost-savings adjustments to our business and have reduced capital expenditures. Our sophisticated, cutting-edge technology provides real-time management insight into our business which, when combined with our newly developed supply chain processes, further enhances our agility with respect to proactive expense control and profit optimization. Mobile Mini enters the second quarter of 2020 from a position of financial strength, including the lowest leverage ratio for the Company since September 30, 2014, ample liquidity, and a nimble capital allocation policy. Notably, Mobile Mini’s free cash flow generation will remain strong in a downturn as we minimize capital expenditures in line with reduced demand. Our financial strength and flexibility positions us to manage through these uncertain times and allows us to move quickly when demand returns.”

First Quarter 2020 Highlights

 

   

Drove healthy year-over-year growth of 3.2% in North America Storage Solutions rental revenue.

 

   

Solid year-over-year rate increase of 3.7% and 1.9% in North America and U.K. Storage Solutions, respectively.

 

   

Grew consolidated adjusted EBITDA 6.5%, year-over-year, and expanded adjusted EBITDA margin by 260 basis points to 40.2%, driven by a 420 basis point year-over-year increase for Storage Solutions.

 

   

Generated cash from operating activities of $33.2 million for the quarter, resulting in free cash flow of $22.5 million, a nearly 40% increase over the prior year.

 

   

Decreased leverage ratio to 3.5x as of March 31, 2020 compared to 3.6x as of December 31, 2019 and 4.2x as of December 31, 2018.

 

   

Completed one acquisition in the quarter, strengthening our existing operations in Dallas, Texas.

Conference Call

Mobile Mini will host a conference call later this morning 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.

 

2


About Mobile Mini, Inc.

Mobile Mini, Inc. is the world’s leading provider of portable storage solutions through its total rental fleet of approximately 200,500 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 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.

Forward-Looking Statements

This news release contains forward-looking statements, including, but not limited to, our access to ample liquidity, our ability to minimize the effect of reduced revenues on adjusted EBITDA and free cash flows, and our ability to continue to generate positive 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 Income

(Unaudited)

(in thousands, except percentages and per share data)

 

     Three Months Ended March 31, 2020     Three Months Ended March 31, 2019  
     Actual     Adjustments     Adjusted (1)     Actual     Adjustments      Adjusted (2)  

Revenues:

             

Rental

   $ 140,656     $ —       $ 140,656     $ 142,172     $ —        $ 142,172  

Sales

     8,316       —         8,316       7,223       —          7,223  

Other

     68       —         68       266       —          266  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total revenues

     149,040       —         149,040       149,661       —          149,661  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Costs and expenses:

             

Rental, selling and general expenses

     102,258       (15,505     86,753       92,234       —          92,234  

Cost of sales

     5,102       —         5,102       4,602       —          4,602  

Depreciation and amortization

     17,492       —         17,492       17,335       —          17,335  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total costs and expenses

     124,852       (15,505     109,347       114,171       —          114,171  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Income from operations

     24,188       15,505       39,693       35,490       —          35,490  

Other income (expense):

             

Interest income

     12       —         12       —         —          —    

Interest expense

     (9,257     —         (9,257     (10,760     —          (10,760

Deferred financing costs write-off

     —         —         —         (123     123        —    

Foreign currency exchange

     (3     —         (3     1       —          1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Income before income tax provision

     14,940       15,505       30,445       24,608       123        24,731  

Income tax provision

     6,639       986       7,625       6,523       32        6,555  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Net income

   $ 8,301     $ 14,519     $ 22,820     $ 18,085     $ 91      $ 18,176  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

EBITDA/Adjusted EBITDA

   $ 41,689       $ 59,876     $ 52,826        $ 56,230  

EBITDA/Adjusted EBITDA as a percentage of total revenues

     28.0       40.2     35.3        37.6

Earnings per share:

             

Basic

   $ 0.19       $ 0.52     $ 0.41        $ 0.41  

Diluted

     0.19         0.51       0.40          0.41  

Weighted average number of common and common share equivalents outstanding:

             

Basic

     43,873         43,873       44,448          44,448  

Diluted

     44,386         44,386       44,877          44,877  

 

(1)

Adjusted column for the three months ended March 31, 2020 excludes merger-related expenses 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.

(2)

Adjusted column for the three months ended March 31, 2019 excludes expense related to the write-off of deferred financing fees related to the amendment of our revolving credit agreement, 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.

Operating Data

(Unaudited)

 

     2020     2019  

As of March 31:

    

Stand-alone Storage Solutions locations

     117       119  

Stand-alone Tank & Pump Solutions locations

     20       20  

Combined Storage Solutions and Tank & Pump Solutions locations

     18       17  

Storage Solutions rental fleet units

     200,500       196,400  

Tank & Pump Solutions rental fleet units

     12,800       12,800  

Average utilization based on original equipment cost

    

Three months ended March 31:

    

Storage Solutions

     73.8     77.1

Tank & Pump Solutions

     66.4     74.1

 

5


Mobile Mini, Inc.

Business Segment Information - Adjusted (1)

(Unaudited)

(in thousands, except percentages)

 

     Three Months Ended March 31, 2020  
     Storage Solutions              
     North
America
    United
Kingdom
    Total     Tank & Pump
Solutions
    Consolidated  

Revenues:

          

Rental

   $ 96,469     $ 18,275     $ 114,744     $ 25,912     $ 140,656  

Sales

     5,284       1,922       7,206       1,110       8,316  

Other

     39       —         39       29       68  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     101,792       20,197       121,989       27,051       149,040  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

          

Rental, selling and general expenses

     55,783       12,395       68,178       18,575       86,753  

Cost of sales

     3,061       1,477       4,538       564       5,102  

Depreciation and amortization

     9,305       1,770       11,075       6,417       17,492  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     68,149       15,642       83,791       25,556       109,347  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   $ 33,643     $ 4,555     $ 38,198     $ 1,495     $ 39,693  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 45,394     $ 6,404       51,798     $ 8,078     $ 59,876  

Adjusted EBITDA Margin

     44.6     31.7     42.5     29.9     40.2
     Three Months Ended March 31, 2019  
     Storage Solutions              
     North America     United
Kingdom
    Total     Tank & Pump
Solutions
    Consolidated  

Revenues:

          

Rental

   $ 93,516     $ 19,209     $ 112,725     $ 29,447     $ 142,172  

Sales

     4,026       1,751       5,777       1,446       7,223  

Other

     225       —         225       41       266  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     97,767       20,960       118,727       30,934       149,661  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

          

Rental, selling and general expenses

     58,956       13,670       72,626       19,608       92,234  

Cost of sales

     2,413       1,403       3,816       786       4,602  

Depreciation and amortization

     8,989       1,734       10,723       6,612       17,335  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     70,358       16,807       87,165       27,006       114,171  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   $ 27,409     $ 4,153     $ 31,562     $ 3,928     $ 35,490  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 39,358     $ 6,070     $ 45,428     $ 10,802     $ 56,230  

Adjusted EBITDA Margin

     40.3     29.0     38.3     34.9     37.6

 

(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.

 

6


Mobile Mini, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

     March 31,     December 31,  
     2020     2019  
     (unaudited)     (audited)  
ASSETS

 

Cash and cash equivalents

   $ 10,795     $ 8,053  

Receivables, net

     99,259       104,390  

Inventories

     9,540       9,517  

Rental fleet, net

     960,177       966,223  

Property, plant and equipment, net

     153,824       157,183  

Operating lease assets

     91,521       93,116  

Other assets

     14,453       13,806  

Intangibles, net

     50,629       51,185  

Goodwill

     710,053       713,404  
  

 

 

   

 

 

 

Total assets

   $ 2,100,251     $ 2,116,877  
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY

 

Liabilities:

    

Accounts payable

   $ 40,299     $ 31,554  

Accrued liabilities

     63,405       77,069  

Operating lease liabilities

     93,437       94,932  

Lines of credit

     557,500       555,400  

Obligations under finance leases

     75,533       74,399  

Senior notes, net

     247,287       247,127  

Deferred income taxes

     198,420       195,034  
  

 

 

   

 

 

 

Total liabilities

     1,275,881       1,275,515  
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock

     506       504  

Additional paid-in capital

     641,515       638,083  

Retained earnings

     440,144       445,285  

Accumulated other comprehensive loss

     (79,478     (65,093

Treasury stock

     (178,317     (177,417
  

 

 

   

 

 

 

Total stockholders’ equity

     824,370       841,362  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,100,251     $ 2,116,877  
  

 

 

   

 

 

 

 

7


Mobile Mini, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

     Three Months Ended  
     March 31,  
     2020     2019  

Cash flows from operating activities:

    

Net income

   $ 8,301     $ 18,085  

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

    

Deferred financing costs write-off

     —         123  

Provision for doubtful accounts

     955       1,212  

Amortization of deferred financing costs

     455       505  

Amortization of long-term liabilities

     —         13  

Share-based compensation expense

     2,682       3,404  

Depreciation and amortization

     17,492       17,335  

Gain on sale of rental fleet

     (1,444     (1,425

Loss on disposal of property, plant and equipment

     26       18  

Deferred income taxes

     4,386       5,058  

Foreign currency exchange

     3       (1

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

     367       (5,544
  

 

 

   

 

 

 

Net cash provided by operating activities

     33,223       38,783  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Cash paid for business acquired, net of cash acquired

     (4,808     —    

Additions to rental fleet, excluding acquisitions

     (10,051     (23,016

Proceeds from sale of rental fleet

     3,474       3,338  

Additions to property, plant and equipment, excluding acquisitions

     (4,174     (2,919

Proceeds from sale of property, plant and equipment

     15       49  
  

 

 

   

 

 

 

Net cash used in investing activities

     (15,544     (22,548
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Net borrowings under lines of credit

     2,100       203  

Deferred financing costs

     —         (3,254

Principal payments on finance lease obligations

     (3,204     (2,586

Issuance of common stock

     753       1,690  

Dividend payments

     (13,575     (12,426

Purchase of treasury stock

     (900     (1,057
  

 

 

   

 

 

 

Net cash used in financing activities

     (14,826     (17,430
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (111     (114
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     2,742       (1,309

Cash and cash equivalents at beginning of period

     8,053       5,605  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 10,795     $ 4,296  
  

 

 

   

 

 

 

Equipment and other acquired through finance lease obligations

   $ 4,343     $ 1,609  

Capital expenditures accrued or payable

     5,053       8,012  

 

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 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,
 
     2020      2019  

Net income

   $     8,301      $     18,085  

Interest expense

     9,257        10,760  

Income tax provision

     6,639        6,523  

Depreciation and amortization

     17,492        17,335  

Deferred financing costs write-off

     —          123  
  

 

 

    

 

 

 

EBITDA

     41,689        52,826  

Share-based compensation expense

     2,682        3,404  

Merger-related expenses

     15,505        —    
  

 

 

    

 

 

 

Adjusted EBITDA

   $ 59,876      $ 56,230  
  

 

 

    

 

 

 
     Three Months Ended
March 31,
 
     2020      2019  

Net cash provided by operating activities

   $   33,223      $     38,783  

Interest paid

     12,608        14,276  

Income and franchise taxes paid

     1,913        2,020  

Share-based compensation expense, including restructuring expense

     (2,682      (3,404

Gain on sale of rental fleet

     1,444        1,425  

Loss on disposal of property, plant and equipment

     (26      (18

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

     (4,791      (256
  

 

 

    

 

 

 

EBITDA

     41,689      $ 52,826  
  

 

 

    

 

 

 

 

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Mobile Mini, Inc.

Free Cash Flow GAAP Reconciliation

(Unaudited)

(in thousands)

 

     Three Months Ended
March 31,
 
     2020     2019  

Net cash provided by operating activities

   $     33,223     $     38,783  
  

 

 

   

 

 

 

Additions to rental fleet, excluding acquisitions

     (10,051     (23,016

Proceeds from sale of rental fleet

     3,474       3,338  

Additions to property, plant and equipment, excluding acquisitions

     (4,174     (2,919

Proceeds from sale of property, plant and equipment

     15       49  
  

 

 

   

 

 

 

Net capital expenditures, excluding acquisitions

     (10,736     (22,548
  

 

 

   

 

 

 

Free cash flow

   $ 22,487     $ 16,235  
  

 

 

   

 

 

 

 

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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.

 

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