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Mobile Mini Reports Q1 2018 Results and Announces Quarterly Dividend

April 20, 2018

PHOENIX--(BUSINESS WIRE)--Apr. 20, 2018-- 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, 2018. Total revenues were $140.7 million and rental revenues were $132.3 million, as compared to $123.5 million and $114.7 million, respectively, for the same period last year.

Rental revenues for the Storage Solutions and Tank & Pump Solutions businesses for the current quarter were $106.9 million and $25.5 million, respectively, compared to $93.8 million and $20.9 million, respectively, for the same period last year.

The Company recorded net income of $14.9 million, or $0.33 per diluted share, in the first quarter of 2018, as compared to net income of $10.2 million, or $0.23 per diluted share, for the first quarter of 2017. On an adjusted basis, first quarter net income was $14.9 million, or $0.33 per diluted share, as compared to adjusted net income of $10.9 million, or $0.25 per diluted share, for the first quarter of 2017. Adjusted EBITDA was $48.6 million and adjusted EBITDA margin was 34.5% for the first quarter of 2018.

Dividend

The Company’s Board of Directors declared a cash dividend of 25.0 cents per share, which will be paid on May 30, 2018 to shareholders of record on May 16, 2018.

First Quarter 2018 Highlights

  • Delivered a strong 21.7% year-over-year increase in Tank & Pump Solutions rental revenue growth.
  • Achieved robust Storage Solutions rental revenue year-over-year growth of 13.9%, 11.5% when adjusted for favorable currency fluctuations.
  • Improved OEC utilization for Tank & Pump Solutions, averaging 73.6% for the quarter, compared to 61.9% in the prior-year quarter.
  • Increased total Storage Solutions average units on rent by 5.0% year-over-year, with average utilization of 70.6%.
  • Raised Storage Solutions rental rates by 3.0% year-over-year, with rates on new rentals up 0.9%.
  • Grew adjusted EBITDA of $48.6 million by 16.5% compared to the prior-year quarter, 14.7% in constant currency.
  • Generated net cash from operating activities of $34.9 million and strong free cash flow of $18.8 million.

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “During the first quarter of 2018, we continued to capitalize on the momentum that we generated in the second half of 2017. I am very pleased with the 21.7% Tank & Pump Solutions rental revenue growth, which was broad-based, across multiple customer end-segments and geographies. North American Storage Solutions rental revenues increased a robust 14.6% in the current quarter and consolidated Storage Solutions rental revenues increased 11.5%. As a result of the hard work of our salesforce, our unique suite of technology tools, and the exceptional service provided by the field, our large national customers are recognizing the value proposition that Mobile Mini is able to deliver.”

Mr. Olsson continued, “Tank & Pump Solutions equipment on rent increased dramatically in the first quarter of 2018 compared to the prior year and we expect this level of utilization to continue into the next quarter with a healthy pipeline. In addition, with pending orders up significantly compared to this time last year, our North American Storage Solutions pipeline continues to be strong. In the U.K. our business remains flat as we continue to monitor the effects of BREXIT on our business. Overall, we expect to see strong year-over-year top line growth and expanded margins for the remainder of 2018.”

Conference Call

Mobile Mini will host a conference call today, Friday, April 20 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 Investor Relations section and will be available in advance and after the call. Please go to the website 15 minutes early to download and install any necessary audio software. If you are unable to listen live, a replay of the call can be accessed for approximately 14 days after the call at Mobile Mini’s website.

About Mobile Mini, Inc.

Mobile Mini, Inc. is the world’s leading provider of portable storage solutions through its total rental fleet of approximately 214,900 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 12,300 units. Mobile Mini’s network is comprised of 153 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 ability to continue utilization levels and a healthy pipeline, 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.

(See accompanying tables)

 
Mobile Mini, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(in thousands, except percentages and per share data)
             
Three Months Ended March 31, 2018 Three Months Ended March 31, 2017
Actual Adjustments Adjusted (1) Actual Adjustments Adjusted (2)
 
Revenues:
Rental $ 132,338 $ $ 132,338 $ 114,742 $ $ 114,742
Sales 8,103 8,103 7,978 7,978
Other   213     213   807     807
Total revenues   140,654     140,654   123,527     123,527
 
Costs and expenses:
Rental, selling and general expenses 88,998 88,998 78,359 (330 ) 78,029
Cost of sales 5,391 5,391 5,112 5,112
Restructuring expenses 111 (111 ) 899 (899 )
Depreciation and amortization   16,823     16,823   15,264     15,264
Total costs and expenses   111,323   (111 )   111,212   99,634   (1,229 )   98,405
 
Income from operations 29,331 111 29,442 23,893 1,229 25,122
 
Other income (expense):
Interest income 6 6
Interest expense (9,599 ) (9,599 ) (8,402 ) (8,402 )
Foreign currency exchange   66     66   (9 )     (9 )
 
Income before income tax provision 19,804 111 19,915 15,482 1,229 16,711
 
Income tax provision 4,949 28 4,977 5,330 456 5,786
                       
Net income $ 14,855 $ 83 $ 14,938 $ 10,152 $ 773 $ 10,925
 
EBITDA/Adjusted EBITDA $ 46,226 $ 48,566 $ 39,148 $ 41,688
EBITDA/Adjusted EBITDA as a percentage of

total revenues

32.9 % 34.5 % 31.7 % 33.7 %
 
Earnings per share:
Basic $ 0.34 $ 0.34 $ 0.23 $ 0.25
Diluted 0.33 0.33 0.23 0.25
 
Weighted average number of common and

common share equivalents outstanding:

Basic 44,214 44,214 44,109 44,109
Diluted 44,842 44,842 44,341 44,341
 
(1)   Adjusted column for the three months ended March 31, 2018 excludes costs of $0.1 million related to restructuring that management believes are not indicative of our business, along with the related tax effects. Adjusted figures are a non-GAAP (defined herein) 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, 2017 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 March 31, 2017 include the following, along with the related tax effects:

• Reduction of $0.1 million in rental, selling and general expenses to exclude acquisition-related expenses.

• Reduction of $0.2 million in rental, selling and general expenses to exclude costs related to severance in conjunction with the departure of an executive.

• Exclusion of costs of $0.9 million related to the restructuring of our business operations.

 

 
Mobile Mini, Inc.
Operating Data
(Unaudited)
         
 
2018 2017
As of March 31:
Stand-alone Storage Solutions locations 119 123
Stand-alone Tank & Pump Solutions locations 17 18
Combined Storage Solutions and Tank & Pump Solutions locations 17 15
Storage Solutions rental fleet units 214,900 210,900
Tank & Pump Solutions rental fleet units 12,300 12,000
 
Average utilization - Three months ended March 31:
Storage Solutions - utilization based on number of units 70.6 % 69.0 %
Tank & Pump Solutions - utilization based on original equipment cost 73.6 % 61.9 %
 
 
Mobile Mini, Inc.
Business Segment Information - Adjusted (1)
(Unaudited)
(in thousands, except percentages)
             
 
Three Months Ended March 31, 2018 Three Months Ended March 31, 2017

Storage
Solutions

Tank & Pump
Solutions

Total

Storage
Solutions

Tank & Pump
Solutions

Total
 
Revenues:
Rental $ 106,864 $ 25,474 $ 132,338 $ 93,806 $ 20,936 $ 114,742
Sales 6,739 1,364 8,103 6,864 1,114 7,978
Other   169   44   213   673   134   807
Total revenues   113,772   26,882   140,654   101,343   22,184   123,527
 
Costs and expenses:
Rental, selling and general expenses 70,824 18,174 88,998 61,895 16,134 78,029
Cost of sales 4,569 822 5,391 4,601 511 5,112
Depreciation and amortization   10,732   6,091   16,823   9,183   6,081   15,264
Total costs and expenses   86,125   25,087   111,212   75,679   22,726   98,405
 
Income (loss) from operations $ 27,647 $ 1,795 $ 29,442 $ 25,664 $ (542 ) $ 25,122
 
Adjusted EBITDA $ 40,581 $ 7,985 $ 48,566 $ 36,092 $ 5,596 $ 41,688
Adjusted EBITDA Margin 35.7 % 29.7 % 34.5 % 35.6 % 25.2 % 33.7 %
 
(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.
 

 
Mobile Mini, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
     
 
March 31, December 31,
2018 2017
(unaudited) (audited)
ASSETS
Cash and cash equivalents $ 7,763 $ 13,451
Receivables, net 105,828 111,562
Inventories 16,811 15,671
Rental fleet, net 999,215 989,154
Property, plant and equipment, net 158,278 157,304
Other assets 13,370 15,334
Intangibles, net 60,442 62,024
Goodwill   711,063   708,907
Total assets $ 2,072,770 $ 2,073,407
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $ 29,187 $ 26,955
Accrued liabilities 66,337 78,084
Lines of credit 621,843 634,285
Obligations under capital leases 53,697 52,791
Senior notes, net 246,010 245,850
Deferred income taxes   178,361   173,754
Total liabilities   1,195,435   1,211,719
 
Stockholders' equity:
Common stock 499 497
Additional paid-in capital 609,120 605,369
Retained earnings 467,123 463,322
Accumulated other comprehensive loss (51,708 ) (60,334 )
Treasury stock   (147,699 )   (147,166 )
Total stockholders' equity   877,335   861,688
Total liabilities and stockholders' equity $ 2,072,770 $ 2,073,407
 
 
Mobile Mini, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
   
Three Months Ended
March 31,
2018   2017
Cash flows from operating activities:
Net income $ 14,855 $ 10,152
Adjustments to reconcile net income to net cash

provided by operating activities:

Provision for doubtful accounts 961 1,164
Amortization of deferred financing costs 515 515
Amortization of long-term liabilities 36 32
Share-based compensation expense 2,229 1,311
Depreciation and amortization 16,823 15,264
Gain on sale of rental fleet (1,533 ) (1,703 )
Loss on disposal of property, plant and equipment 334 18
Deferred income taxes 4,397 4,943
Foreign currency exchange (66 ) 9
Changes in certain assets and liabilities, net of

effect of businesses acquired

  (3,620 )   1,018
Net cash provided by operating activities   34,931   32,723
 
Cash flows from investing activities:
Additions to rental fleet, excluding acquisitions (15,389 ) (10,006 )
Proceeds from sale of rental fleet 3,844 4,622
Additions to property, plant and equipment, excluding acquisitions (4,752 ) (3,748 )
Proceeds from sale of property, plant and equipment   179   68
Net cash used in investing activities   (16,118 )   (9,064 )
 
Cash flows from financing activities:
Net repayments under lines of credit (12,443 ) (2,334 )
Deferred financing costs (13 )
Principal payments on capital lease obligations (1,990 ) (1,760 )
Issuance of common stock 1,525 1,640
Dividend payments (11,054 ) (10,145 )
Purchase of treasury stock   (533 )   (7,639 )
Net cash used in financing activities   (24,495 )   (20,251 )
 
Effect of exchange rate changes on cash   (6 )   64
 
Net change in cash (5,688 ) 3,472
 
Cash and cash equivalents at beginning of period   13,451   4,137
Cash and cash equivalents at end of period $ 7,763 $ 7,609
 
Equipment and other acquired through capital lease obligations $ 2,897 $ 1,879
Capital expenditures accrued or payable 6,613 5,541
 

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, free cash flow and constant currency financial information are non-GAAP financial measures as defined by SEC rules. This non-GAAP financial information may be determined or calculated differently by other companies. Reconciliations of these non-GAAP measurements to the most directly comparable GAAP financial measurements are furnished earlier in this release and as follows:

 
Mobile Mini, Inc.
Adjusted EBITDA GAAP Reconciliations
(Unaudited)
(in thousands)
     

Three Months Ended
March 31,

2018 2017
Net income $ 14,855 $ 10,152
Interest expense 9,599 8,402
Income tax provision 4,949 5,330
Depreciation and amortization   16,823   15,264
EBITDA 46,226 39,148
 
Share-based compensation expense 2,229 1,311
Restructuring expenses 111 899
Acquisition-related expenses 88
Other     242
Adjusted EBITDA $ 48,566 $ 41,688
 
 

Three Months Ended
March 31,

2018 2017
Net cash provided by operating activities $ 34,931 $ 32,723
Interest paid 12,348 13,671
Income and franchise taxes paid 120
Share-based compensation expense,

including restructuring expense

(2,229 ) (1,311 )
Gain on sale of rental fleet 1,533 1,703
Loss on disposal of property, plant and

equipment

(334 ) (18 )
Changes in certain assets and liabilities, net of

effect of businesses acquired

  (143 )   (7,620 )
EBITDA $ 46,226 $ 39,148
 
 
Mobile Mini, Inc.
Free Cash Flow GAAP Reconciliation
(Unaudited)
(in thousands)
     

Three Months Ended
March 31,

2018 2017
Net cash provided by operating activities $ 34,931 $ 32,723
 
Additions to rental fleet, excluding acquisitions (15,389 ) (10,006 )
Proceeds from sale of rental fleet 3,844 4,622
Additions to property, plant and equipment,

excluding acquisitions

(4,752 ) (3,748 )
Proceeds from sale of property, plant and

equipment

  179   68
Net capital expenditures, excluding acquisitions (16,118 ) (9,064 )
       
Free cash flow $ 18,813 $ 23,659
 

Adjusted net income and adjusted diluted earnings per share. Adjusted net income and related earnings per share information exclude certain transactions that management believes are not indicative of our business. We believe that the inclusion of this non-GAAP presentation makes it easier to compare our financial performance across reporting periods on a consistent basis.

EBITDA and adjusted EBITDA. EBITDA is defined as net income before discontinued operations, net of tax (if applicable), interest expense, income taxes, depreciation and amortization, and debt restructuring or extinguishment expense (if applicable), including any write-off of deferred financing costs. Adjusted EBITDA further excludes certain non-cash expenses, including share-based compensation, as well as transactions that management believes are not indicative of our business. Because EBITDA and adjusted EBITDA, as defined, exclude some but not all items that affect our cash flow from operating activities, they may not be comparable to similarly titled performance measures presented by other companies.

We present EBITDA and adjusted EBITDA because we believe they provide useful information regarding our ability to meet our future debt payment requirements, capital expenditures and working capital requirements and an overall evaluation of our financial condition. EBITDA and adjusted EBITDA have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows from operations, or other consolidated income or cash flow data prepared in accordance with GAAP.

EBITDA and adjusted EBITDA margins are calculated as EBITDA and adjusted EBITDA, respectively, divided by total revenues expressed as a percentage.

Free Cash Flow. Free cash flow is defined as net cash provided by operating activities, minus or plus, net cash used in or provided by investing activities, excluding acquisitions and certain transactions. Free cash flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, the most directly comparable financial measure prepared in accordance with GAAP. We present free cash flow because we believe it provides useful information regarding our liquidity and ability to meet our short-term obligations. In particular, free cash flow indicates the amount of cash available after capital expenditures for, among other things, investments in our existing business, debt service obligations, payment of authorized quarterly dividends, repurchase of our common stock and strategic small acquisitions.

Constant Currency. We calculate the effect of currency fluctuations on current periods by translating the results for our business in the U.K. during the current period using the average exchange rates from the comparative period. We present constant currency information to provide useful information to assess our underlying business excluding the effect of material foreign currency rate fluctuations. Calculated in constant currency, our rental revenues and adjusted EBITDA for the three months ended March 31, 2018 were $2.2 million and $0.8 million lower than when calculated in accordance with GAAP.

Source: Mobile Mini, Inc.

Mobile Mini, Inc.
Van Welch, 602-308-3879
Executive VP & Chief Financial Officer
www.mobilemini.com
or
Investor Relations Counsel:
The Equity Group Inc.
Fred Buonocore, 212-836-9607
Kevin Towle, 212-836-9620