Company News »

Mobile Mini Reports Q4’14 Results and Announces 10% Increase in Quarterly Dividend

Business Wire
Share on StockTwits
Published on

Mobile Mini, Inc. (NASDAQ GS:MINI) (the “Company” or “Mobile Mini”), the world’s leading supplier of portable storage solutions, and third largest provider of specialty containment solutions in the United States, today reported actual and adjusted financial results for the quarter ended December 31, 2014. Total revenues were $123.2 million and leasing revenues were $113.4 million, up from $106.8 million and $97.8 million, respectively, for the same period last year. The Company’s fourth quarter net income was $6.0 million, or $0.13 per diluted share, compared to net income of $12.0 million, or $0.26 per diluted share, respectively, for the fourth quarter of 2013. On an adjusted basis, fourth quarter net income was $17.0 million, or $0.37 per diluted share, compared to $12.8 million, or $0.28 per diluted share, respectively, for the fourth quarter of 2013. Adjusted EBITDA was $49.0 million and adjusted EBITDA margin was 39.8% for the fourth quarter of 2014.

On December 10, 2014, the Company completed the acquisition of Gulf Tanks Holdings, Inc., the parent company of Evergreen Tank Solutions (“ETS”), referred to herein as the ETS Acquisition. Assets and liabilities of ETS are included in the Company’s balance sheet as of December 31, 2014, and ETS operations are included in the consolidated results of operations from the acquisition date forward. In the discussion below, the Company’s container and office product offerings that existed prior to the ETS Acquisition are generally referred to as “portable storage,” and the acquired business is referred to as “specialty containment.”

Total revenues and leasing revenues in the portable storage business for the current quarter were $116.8 million and $108.0 million, respectively.

Dividend

The Company’s Board of Directors increased the Company’s first quarter 2015 cash dividend by 10% to 18.7 cents per share, as compared to the preceding period. The dividend will be paid on March 19, 2015 to shareholders of record on March 5, 2014.

Fourth Quarter 2014 Highlights

  • Successfully completed the ETS Acquisition, as well as a portable storage acquisition in the New York market.
  • Grew total company leasing revenues 16.0% year-over-year; 10.4% for the portable storage business.
  • Increased portable storage rental rates by 7.6% year-over-year and 2.0% sequentially, with new units delivered at a 6.5% higher rental rate than the prior year fourth quarter.
  • Increased adjusted EBITDA within the portable storage business by 13.9% to $46.1 million, from $40.5 million in the fourth quarter of 2013, while continuing to increase fleet units in rent-ready condition.
  • Within the portable storage business, expanded adjusted EBITDA margin to 39.4% from 37.9% in the prior year fourth quarter.

Full Year 2014 Highlights

  • Produced $95.0 million of free cash flow in 2014; $109.9 million excluding $14.9 million of costs related to acquisitions.
  • Increased portable storage yield by 10.5% over the prior year.
  • Executed on our geographic expansion strategy with eight portable storage acquisitions.

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “During 2014 we re-aligned our strategies to stabilize the business, grow revenues and increase profit. The strong fourth quarter and full-year results demonstrate that our approach is working. I am very pleased with the expansion of our adjusted EBITDA margins in the fourth quarter, as well as the momentum we have generated on portable storage pricing, which increased an impressive 7.6% compared to the prior year fourth quarter. I am also excited about the completion of the ETS Acquisition in the fourth quarter, which gives Mobile Mini an additional platform for growth in revenues and profits.”

Mr. Olsson continued, “Excluding acquisition costs, our $109.9 million of free cash flow is the highest ever generated by Mobile Mini. In addition to reinvesting in the business during 2014, we returned more than $56 million to our shareholders through quarterly dividends and repurchased treasury shares. Our consistent delivery of robust free cash flow has enabled us to create and return shareholder value through these multiple channels. We expect to continue these programs and, in addition to raising our quarterly dividend amount, have purchased $15.0 million in treasury shares already in 2015. Although we still have room for improvement, including continued investment in repairs and maintenance, we have executed our strategies well throughout 2014 and I believe we are well positioned for an even stronger 2015,” Mr. Olsson concluded.

Conference Call

Mobile Mini will host a conference call today, Thursday, February 12, 2015 at 12 noon ET to review these results. To listen to the call live, dial (201) 493-6739 and ask for the Mobile Mini Conference Call or go to www.mobilemini.com and click on the Investors section. Additionally, a slide presentation that will accompany the call will be posted at www.mobilemini.com on the Investors 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 lease fleet of approximately 213,500 portable storage containers and office units with 136 locations in the U.S., United Kingdom, and Canada. Through its wholly-owned subsidiary, Evergreen Tank Solutions, Mobile Mini is also the third largest provider of specialty containment solutions in the U.S., with a lease fleet of approximately 10,600 units and 24 locations. Mobile Mini is included on the Russell 2000(R) and 3000(R) Indexes and the S&P Small Cap Index.

Forward-Looking Statements

This news release contains forward-looking statements, including, but not limited to, our expectations regarding our ability to execute our strategic plan, growth and profitability, financial performance, margin expansion, ability to enter new markets, free cash flow, and positioning for 2015, 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 SEC filings. 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.

(See accompanying tables)

Mobile Mini, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

(in thousands except per share data)

Three Months Ended
December 31, 2014
Three Months Ended
December 31, 2013
Actual Adjustments Adjusted (1) Actual Adjustments Adjusted (1)
Revenues:
Leasing $ 113,443 $ – $ 113,443 $ 97,820 $ – $ 97,820
Sales 7,824 7,824 8,246 8,246
Other 1,948 1,948 733 733
Total revenues 123,215 123,215 106,799 106,799
Costs and expenses:
Cost of sales 5,813 5,813 5,472 5,472
Leasing, selling and general expenses (2) 86,338 (14,778) 71,560 64,809 (4) 64,805
Restructuring expenses (3) 633 (633) 349 (349)
Asset impairment recovery, net (4) (784) 784
Depreciation and amortization 11,414 11,414 8,993 8,993
Total costs and expenses 104,198 (15,411) 88,787 78,839 431 79,270
Income from operations 19,017 15,411 34,428 27,960 (431) 27,529
Other income (expense):
Interest income 1 1
Interest expense (7,538) (7,538) (7,151) (7,151)
Foreign currency exchange (1) (1)
Income from continuing operations before
income tax provision 11,479 15,411 26,890 20,809 (431) 20,378
Income tax provision 5,444 4,421 9,865 7,717 (166) 7,551
Income from continuing operations 6,035 10,990 17,025 13,092 (265) 12,827
Loss from discontinued operation, net of tax (5) (1,134) 1,134
Net income $ 6,035 $ 10,990 $ 17,025 $ 11,958 $ 869 $ 12,827
EBITDA $ 30,431 $ 49,035 $ 36,953 $ 40,455
EBITDA as a percentage of total revenues 24.7% 39.8% 34.6% 37.9%
Earnings per share:
Basic:
Income from continuing operations $ 0.13 $ 0.24 $ 0.37 $ 0.29 $ (0.01) $ 0.28
Loss from discontinued operation (0.03) 0.03
Net income $ 0.13 $ 0.24 $ 0.37 $ 0.26 $ 0.02 $ 0.28
Diluted:
Income from continuing operations $ 0.13 $ 0.24 $ 0.37 $ 0.28 $ – $ 0.28
Loss from discontinued operation (0.02) 0.02
Net income $ 0.13 $ 0.24 $ 0.37 $ 0.26 $ 0.02 $ 0.28
Weighted average number of common and
common share equivalents outstanding:
Basic 45,724 45,736
Diluted 46,365 46,461

(1) Adjusted balance excludes certain non-cash transactions, as well as other transactions that management believes are not indicative of its ongoing business. Adjusted figures are a non-GAAP presentation.
(2) Costs directly related to acquisition activities.
(3) Costs relating primarily to the restructuring of our operations.
(4) Gain upon the completion of sale (offset by losses upon completion of sale) of certain assets written down to fair value in the second quarter of 2013.
(5) Operations related to our Netherlands operation which was sold in December 2013.

Mobile Mini, Inc.

Condensed Consolidated Statements of Income

(Unaudited, except as indicated)

(in thousands except per share data)

Twelve Months Ended
December 31, 2014
Twelve Months Ended
December 31, 2013
Actual Adjustments Adjusted (1) Actual Adjustments Adjusted (1)
(audited)
Revenues:
Leasing $ 410,362 $ – $ 410,362 $ 366,286 $ – $ 366,286
Sales 31,585 31,585 38,051 38,051
Other 3,527 3,527 2,149 2,149
Total revenues 445,474 445,474 406,486 406,486
Costs and expenses:
Cost of sales 21,944 21,944 25,413 25,413
Leasing, selling and general expenses (2) 290,732 (14,854) 275,878 237,567 (4) 237,563
Restructuring expenses (3) 3,542 (3,542) 2,402 (2,402)
Asset impairment recovery, net (4) 557 (557) 38,705 (38,705)
Depreciation and amortization 39,334 39,334 35,432 35,432
Total costs and expenses 356,109 (18,953) 337,156 339,519 (41,111) 298,408
Income from operations 89,365 18,953 108,318 66,967 41,111 108,078
Other income (expense):
Interest income 1 1
Interest expense (28,729) (28,729) (29,467) (29,467)
Foreign currency exchange (1) (1) (2) (2)
Income from continuing operations before
income tax provision 60,635 18,953 79,588 37,499 41,111 78,610
Income tax provision (5) 23,077 5,461 28,538 12,275 16,429 28,704
Income from continuing operations 37,558 13,492 51,050 25,224 24,682 49,906
Loss from discontinued operation, net of tax (6) (1,302) 1,302
Net income $ 37,558 $ 13,492 $ 51,050 $ 23,922 $ 25,984 $ 49,906
EBITDA $ 128,698 $ 162,141 $ 102,398 $ 157,465
EBITDA as a percentage of total revenues 28.9% 36.4% 25.2% 38.7%
Earnings per share:
Basic:
Income from continuing operations $ 0.82 $ 0.29 $ 1.11 $ 0.55 $ 0.55 $ 1.10
Loss from discontinued operation (0.02) 0.02
Net income $ 0.82 $ 0.29 $ 1.11 $ 0.53 $ 0.57 $ 1.10
Diluted:
Income from continuing operations $ 0.80 $ 0.29 $ 1.09 $ 0.55 $ 0.53 $ 1.08
Loss from discontinued operation (0.03) 0.03
Net income $ 0.80 $ 0.29 $ 1.09 $ 0.52 $ 0.56 $ 1.08
Weighted average number of common and
common share equivalents outstanding:
Basic 46,026 45,481
Diluted 46,725 46,096

(1) Adjusted balance excludes certain non-cash transactions, as well as other transactions that management believes are not indicative of its ongoing business. Adjusted figures are a non-GAAP presentation.
(2) Costs directly related to acquisition activities.
(3) Costs relating primarily to the restructuring of our operations.
(4) In 2014, the adjustment represents losses upon the completion of sale (offset by gains upon completion of sale) of certain assets written down to fair value in the second quarter of 2013. In 2013 the adjustment represents impairment charges (offset by gains and additional losses upon the subsequent completion of sale) primarily for the write-down of certain assets to fair value during the second quarter of 2013.
(5) In 2013, includes an income tax benefit of $1.9 million related to the statutory corporate income tax rate reduction in the United Kingdom.
(6) Operations related to our Netherlands operation which was sold in December 2013.

Mobile Mini, Inc.

Operating Data

(Unaudited)

December 31,
2014 2013
As of December 31:
Number of portable storage locations 136 136
Number of specialty containment locations 24
Portable Storage lease fleet units 213,546 212,898
Specialty Containment lease fleet units 10,633
Utilization:
Portable Storage – three months ended December 31 72.8% 72.8%
Portable Storage – twelve months ended December 31 68.6% 65.8%

Mobile Mini, Inc.

Product Line Information – Adjusted (1)

(Unaudited)

(in thousands)

Three Months Ended December 31, 2014 Twelve Months Ended December 31, 2014
Portable
Storage
Specialty
Containment
Total Portable
Storage
Specialty
Containment
Total
Revenues:
Leasing $ 108,020 $ 5,423 $ 113,443 $ 404,939 $ 5,423 $ 410,362
Sales 7,661 163 7,824 31,422 163 31,585
Other 1,102 846 1,948 2,681 846 3,527
Total revenues 116,783 6,432 123,215 439,042 6,432 445,474
Costs and expenses:
Cost of sales 5,707 106 5,813 21,838 106 21,944
Leasing, selling and general expenses 68,206 3,354 71,560 272,524 3,354 275,878
Depreciation and amortization 9,540 1,874 11,414 37,460 1,874 39,334
Total costs and expenses 83,453 5,334 88,787 331,822 5,334 337,156
Income from operations $ 33,330 $ 1,098 $ 34,428 $ 107,220 $ 1,098 $ 108,318
Adjusted EBITDA $ 46,063 $ 2,972 $ 49,035 $ 159,169 $ 2,972 $ 162,141
Adjusted EBITDA Margin 39.4% 46.2% 39.8% 36.3% 46.2% 36.4%
Free cash flow $ 16,379 $ (2,302) $ 14,077 $ 97,337 $ (2,302) $ 95,035

(1) Adjusted amounts exclude certain non-cash transactions, as well as other transactions that management believes are not indicative of its ongoing business. Adjusted figures are a non-GAAP presentation. See additional information regarding the adjusted balances on the previous pages of this news release. All adjustments relate to the portable storage business.

Mobile Mini, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

December 31,
2014 2013
(unaudited) (audited)
ASSETS
Cash and cash equivalents $ 3,739 $ 1,256
Receivables, net 81,031 53,104
Inventories 16,736 18,744
Lease fleet, net 1,087,056 979,276
Property, plant and equipment, net 113,175 85,153
Assets held for sale 980
Deposits and prepaid expenses 8,586 6,116
Deferred financing costs and other assets 8,858 10,977
Intangibles, net 78,385 2,546
Goodwill 698,625 519,222
Total assets $ 2,096,191 $ 1,677,374
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts payable $ 22,933 $ 18,862
Accrued liabilities 63,727 65,308
Lines of credit 705,518 319,314
Obligations under capital leases 24,918 8,781
Senior Notes 200,000 200,000
Deferred income taxes 231,392 209,565
Total liabilities 1,248,488 821,830
Stockholders’ equity:
Common stock 490 488
Additional paid-in capital 569,083 550,387
Retained earnings 373,676 359,778
Accumulated other comprehensive loss (29,870) (15,440)
Treasury stock (65,676) (39,669)
Total stockholders’ equity 847,703 855,544
Total liabilities and stockholders’ equity $ 2,096,191 $ 1,677,374

Mobile Mini, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

Twelve Months Ended
December 31,
2014 2013
(unaudited) (audited)
Cash Flows from Operating Activities:
Net income $ 37,558 $ 23,922
Adjustments to reconcile net income to net cash
provided by operating activities:
Asset impairment charge, net 557 38,217
Provision for doubtful accounts 2,778 2,160
Amortization of deferred financing costs 2,829 2,811
Amortization of long-term liabilities 88 169
Share-based compensation expense 15,071 14,714
Depreciation and amortization 39,334 35,626
Loss on disposal of discontinued operation 1,948
Gain on sale of lease fleet (5,732) (9,682)
Loss on disposal of property, plant and equipment 348 247
Deferred income taxes 22,468 11,012
Tax shortfall on equity award transactions (15) (837)
Foreign currency transaction loss 1 1
Changes in certain assets and liabilities, net of
effect of businesses acquired (4,444) (4,197)
Net cash provided by operating activities 110,841 116,111
Cash Flows from Investing Activities:
Proceeds from sale of discontinued operation 677
Cash paid for businesses acquired, net of cash acquired (421,162)
Additions to lease fleet, excluding acquisitions (27,279) (28,826)
Proceeds from sale of lease fleet units 23,053 35,951
Additions to property, plant and equipment (15,779) (15,792)
Proceeds from sale of property, plant and equipment 4,199 1,970
Net cash used in investing activities (436,968) (6,020)
Cash Flows from Financing Activities:
Net borrowings (payments) under lines of credit 386,204 (123,076)
Deferred financing costs (719)
Principal payments on notes payable (310)
Principal payments on capital lease obligations (1,956) (408)
Issuance of common stock 3,642 13,818
Dividend payments (31,384)
Purchase of treasury stock (26,007) (369)
Net cash provided by (used) in financing activities 329,780 (110,345)
Effect of exchange rate changes on cash (1,170) (427)
Net increase (decrease) in cash 2,483 (681)
Cash and cash equivalents at beginning of period 1,256 1,937
Cash and cash equivalents at end of period $ 3,739 $ 1,256
Equipment acquired through capital lease obligations $ 16,508 $ 8,547

Discontinued Operation

The sale of our Netherlands operation in 2013 is reflected in the financial data herein as a discontinued operation.

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. EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, adjusted net income, adjusted diluted earnings per share, and free cash flow are non-GAAP financial measures as defined by Securities and Exchange Commission (“SEC”) rules. This non-GAAP financial information may be determined or calculated differently by other companies. Reconciliations of these measurements to the most directly comparable GAAP financial measures are as follows:

Mobile Mini, Inc.

Adjusted EBITDA GAAP Reconciliations

(Unaudited)

(in thousands)

Three Months Ended
December 31,
Twelve Months Ended
December 31,
2014 2013 2014 2013
Net income $ 6,035 $ 11,958 $ 37,558 $ 23,922
Loss from discontinued operation, net of tax 1,134 1,302
Interest expense 7,538 7,151 28,729 29,467
Provision for income taxes 5,444 7,717 23,077 12,275
Depreciation and amortization 11,414 8,993 39,334 35,432
EBITDA 30,431 36,953 128,698 102,398
Share-based compensation expense 3,193 3,933 14,490 13,956
Restructuring expenses 633 349 3,542 2,402
Acquisition and other expenses 14,778 4 14,854 4
Asset impairment charge, net (784) 557 38,705
Adjusted EBITDA $ 49,035 $ 40,455 $ 162,141 $ 157,465
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2014 2013 2014 2013
Net cash provided by operating activities $ 23,083 $ 30,637 $ 110,841 $ 116,111
Discontinued operation 712 732
Interest paid 10,065 10,174 24,559 25,947
Income and franchise taxes paid 158 152 1,103 1,114
Share-based compensation expense (3,498) (3,945) (15,071) (14,714)
Asset impairments, net of recoveries 736 (557) (38,217)
Loss on disposal of discontinued operation (1,948) (1,948)
Gain on sale of lease fleet 1,236 1,984 5,732 9,682
Loss on disposal of property, plant and equipment (529) (303) (348) (247)
Changes in other assets and liabilities, net of
effect of businesses acquired (84) (1,246) 2,439 3,938
EBITDA $ 30,431 $ 36,953 $ 128,698 $ 102,398

Mobile Mini, Inc.

Free Cash Flow GAAP Reconciliation
(Unaudited)
(in thousands)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2014 2013 2014 2013
Net cash provided by operating activities $ 23,083 $ 30,637 $ 110,841 $ 116,111
Additions to lease fleet, excluding acquisitions (10,969) (5,215) (27,279) (28,826)
Proceeds from sale of lease fleet units 5,240 10,540 23,053 35,951
Additions to property, plant and equipment, excluding acquisitions (4,102) (5,141) (15,779) (15,792)
Proceeds from sale of property, plant and equipment 825 957 4,199 1,970
Net capital (expenditures) proceeds, excluding acquisitions (9,006) 1,141 (15,806) (6,697)
Free cash flow $ 14,077 $ 31,778 $ 95,035 $ 109,414

EBITDA and adjusted EBITDA. EBITDA is defined as net income before discontinued operation, 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, as well as transactions that management believes are not indicative of our ongoing 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 that they provide 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, 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 divided by total revenues expressed as a percentage. The GAAP financial measure that is most directly comparable to EBITDA margin is operating margin, which represents operating income divided by revenues.

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.

Earlier in this release, we provided a reconciliation of these adjusted measurements to actual results along with a reconciliation of net income to EBITDA and adjusted EBITDA, net cash provided by operating activities to EBTIDA and net cash provided by operating activities to free cash flow.

Share on StockTwits