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Mobile Mini Reports Q1’17 Results and Announces Quarterly Dividend

April 27, 2017

PHOENIX--(BUSINESS WIRE)--Apr. 27, 2017-- 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, 2017. Total revenues were $123.5 million and rental revenues were $114.7 million, as compared to $124.5 million and $117.4 million, respectively, for the same period last year.

Rental revenues for the Storage Solutions and Tank & Pump Solutions businesses for the current quarter were $93.8 million and $20.9 million, respectively.

The Company recorded net income of $10.2 million, or $0.23 per diluted share, in the first quarter of 2017, as compared to net income of $11.0 million, or $0.25 per diluted share, for the first quarter of 2016. On an adjusted basis, first quarter net income was $10.9 million, or $0.25 per diluted share, as compared to adjusted net income of $12.4 million, or $0.28 per diluted share, for the first quarter of 2016. Adjusted EBITDA was $41.7 million and adjusted EBITDA margin was 33.7% for the first quarter of 2017.

Dividend

The Company’s Board of Directors declared a cash dividend of 22.7 cents per share, which will be paid on May 31, 2017 to shareholders of record on May 17, 2017.

First Quarter 2017 Highlights

  • Raised Storage Solutions rental rates by 2.6% year-over-year.
  • Drove an 8.6% increase in North America Storage Solutions activations year-over-year and increased total Storage Solutions average units on rent by 3.2% year-over-year.
  • Delivered a 3.1% increase in Storage Solutions rental revenues on a constant currency basis. Including the impact of unfavorable currency fluctuations, Storage Solutions rental revenues increased 0.1%.
  • Experienced lower project and deferred maintenance activity in the beginning of 2017, resulting in decreased Tank & Pump Solutions rental revenues of 11.4% year-over-year.
  • Achieved adjusted EBITDA of $41.7 million, with an adjusted EBITDA margin of 33.7%.
  • Generated net cash from operating activities of $32.7 million and strong free cash flow of $23.7 million.
  • Attained the highest quarterly average Net Promoter Score in Mobile Mini’s history, underscoring our commitment to world-class customer service.

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “During the quarter, we drove year-over-year rate increases of 2.6% in Storage Solutions, while increasing North America activations 8.6%. Overall we had strong year-over-year growth of 3.1% in our Storage Solutions rental revenues. This growth demonstrates that our expanded salesforce is gaining traction and gives us confidence that we will continue to drive additional revenue increases in the future.”

Mr. Olsson continued, “In our Tank & Pump Solutions business, the majority of the year-over-year decline in rental revenues resulted from fewer large infrastructure projects and deferred maintenance activity in the first quarter of this year, negatively impacting our diversified and downstream business segments. After a slow start in the upstream business segment we saw strengthening towards the end of the quarter. While market fluctuations and the timing of projects creates some variability in year-over-year comparisons, our outlook remains positive for the rest of 2017.”

Conference Call

Mobile Mini will host a conference call today, Thursday, April 27 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 storage solutions through its total rental fleet of approximately 210,900 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 12,000 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.

Forward-Looking Statements

This news release contains forward-looking statements, including, but not limited to, our ability to continue to be strongly positioned in both the portable storage and specialty containment markets, execute our salesforce model and provide tools to our ISRs to ensure their success, and continue to increase our ISR headcount and drive topline growth, 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, 2017 Three Months Ended March 31, 2016
Actual Adjustments Adjusted (1) Actual Adjustments Adjusted (2)
 
Revenues:
Rental $ 114,742 $ $ 114,742 $ 117,356 $ $ 117,356
Sales 7,978 7,978 6,891 6,891
Other   807     807   286     286
Total revenues   123,527     123,527   124,533     124,533
 
Costs and expenses:
Rental, selling and general expenses 78,359 (330 ) 78,029 76,302 76,302
Cost of sales 5,112 5,112 4,611 4,611
Restructuring expenses 899 (899 ) 2,248 (2,248 )
Depreciation and amortization   15,264     15,264   15,177     15,177
Total costs and expenses   99,634   (1,229 )   98,405   98,338   (2,248 )   96,090
 
Income from operations 23,893 1,229 25,122 26,195 2,248 28,443
 
Other expense:
Interest expense (8,402 ) (8,402 ) (8,484 ) (8,484 )
Foreign currency exchange   (9 )     (9 )      
 
Income before income tax provision 15,482 1,229 16,711 17,711 2,248 19,959
 
Income tax provision 5,330 456 5,786 6,713 887 7,600
                       
Net income $ 10,152 $ 773 $ 10,925 $ 10,998 $ 1,361 $ 12,359
 
EBITDA/Adjusted EBITDA $ 39,148 $ 41,688 $ 41,372 $ 46,184
EBITDA/Adjusted EBITDA as a percentage of

total revenues

31.7 % 33.7 % 33.2 % 37.1 %
 
Earnings per share:
Basic $ 0.23 $ 0.25 $ 0.25 $ 0.28
Diluted 0.23 0.25 0.25 0.28
 
Weighted average number of common and

common share equivalents outstanding:

Basic 44,109 44,109 44,219 44,219
Diluted 44,341 44,341 44,335 44,335
 

(1) 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 (defined herein) 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 for 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 $0.9 million in costs related to the restructuring of our business operations.

(2) Adjusted column for the three months ended March 31, 2016 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, 2016 related to the restructuring of our business operations, along with the related tax effects.

 
Mobile Mini, Inc.
Operating Data
(Unaudited)
       
2017 2016
As of March 31:
Stand-alone Storage Solutions locations 123 130
Stand-alone Tank & Pump Solutions locations 18 18
Combined Storage Solutions and Tank & Pump Solutions locations 15 11
Storage Solutions rental fleet units 210,900 206,100
Tank & Pump Solutions rental fleet units 12,000 11,900
 
Utilization - Three months ended March 31
Storage Solutions - utilization based on number of units 69.0 % 68.3 %
Tank & Pump Solutions - utilization based on original equipment cost (1) 61.9 %
 

(1) Utilization for Tank & Pump Solutions is calculated as the average original cost of equipment on rent, excluding re-rented equipment, divided by the average original cost of equipment in the fleet. This statistic has been calculated since the three-month period ending June 30, 2016; no comparable statistic is available for the prior-year period.

 
Mobile Mini, Inc.
Business Segment Information - Adjusted (1)
(Unaudited)
(in thousands, except percentages)
             
Three Months Ended March 31, 2017 Three Months Ended March 31, 2016

Storage
Solutions

Tank & Pump
Solutions

Total

Storage
Solutions

Tank & Pump
Solutions

Total
 
Revenues:
Rental $ 93,806 $ 20,936 $ 114,742 $ 93,728 $ 23,628 $ 117,356
Sales 6,864 1,114 7,978 5,292 1,599 6,891
Other   673   134   807   267   19   286
Total revenues   101,343   22,184   123,527   99,287   25,246   124,533
 
Costs and expenses:
Rental, selling and general expenses 61,895 16,134 78,029 60,854 15,448 76,302
Cost of sales 4,601 511 5,112 3,399 1,212 4,611
Depreciation and amortization   9,183   6,081   15,264   8,138   7,039   15,177
Total costs and expenses   75,679   22,726   98,405   72,391   23,699   96,090
 
Income (loss) from operations $ 25,664 $ (542 ) $ 25,122 $ 26,896 $ 1,547 $ 28,443
 
Adjusted EBITDA $ 36,092 $ 5,596 $ 41,688 $ 37,524 $ 8,660 $ 46,184
Adjusted EBITDA Margin 35.6 % 25.2 % 33.7 % 37.8 % 34.3 % 37.1 %
 

(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,
2017 2016
(unaudited) (audited)
ASSETS
Cash and cash equivalents $ 7,609 $ 4,137
Receivables, net 89,845 99,175
Inventories 16,439 15,412
Rental fleet, net 951,458 950,065
Property, plant and equipment, net 150,997 149,197
Other assets 15,701 14,930
Intangibles, net 66,802 68,420
Goodwill   704,235   703,558
Total assets $ 2,003,086 $ 2,004,894
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $ 30,415 $ 27,388
Accrued liabilities 58,660 64,126
Lines of credit 638,827 641,160
Obligations under capital leases 50,824 50,704
Senior notes, net 245,371 245,212
Deferred income taxes   226,908   240,690
Total liabilities   1,251,005   1,269,280
 
Stockholders' equity:
Common stock 495 493
Additional paid-in capital 595,149 592,071
Retained earnings 381,419 362,896
Accumulated other comprehensive loss (78,544 ) (81,047 )
Treasury stock   (146,438 )   (138,799 )
Total stockholders' equity   752,081   735,614
Total liabilities and stockholders' equity $ 2,003,086 $ 2,004,894
 
 
Mobile Mini, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
  Three Months Ended
March 31,
2017   2016
Cash flows from operating activities:
Net income $ 10,152 $ 10,998
Adjustments to reconcile net income to net cash

provided by operating activities:

Provision for doubtful accounts 1,164 1,203
Amortization of deferred financing costs 515 468
Amortization of long-term liabilities 32 29
Share-based compensation expense 1,311 2,564
Depreciation and amortization 15,264 15,177
Gain on sale of rental fleet (1,703 ) (1,378 )
Loss on disposal of property, plant and equipment 18 338
Deferred income taxes 4,943 6,560
Foreign currency transaction loss 9
Changes in certain assets and liabilities, net of

effect of businesses acquired

  1,018   (678 )
Net cash provided by operating activities   32,723   35,281
 
Cash flows from investing activities:
Cash paid for businesses acquired, net of cash acquired (9,206 )
Additions to rental fleet, excluding acquisitions (10,006 ) (10,884 )
Proceeds from sale of rental fleet 4,622 3,970
Additions to property, plant and equipment, excluding acquisitions (3,748 ) (8,310 )
Proceeds from sale of property, plant and equipment   68   840
Net cash used in investing activities   (9,064 )   (23,590 )
 
Cash flows from financing activities:
Net (repayments) borrowings under lines of credit (2,334 ) 5,152
Deferred financing costs (13 ) (193 )
Principal payments on capital lease obligations (1,760 ) (1,433 )
Issuance of common stock 1,640
Dividend payments (10,145 ) (9,152 )
Purchase of treasury stock   (7,639 )   (7,084 )
Net cash used in financing activities   (20,251 )   (12,710 )
 
Effect of exchange rate changes on cash   64   40
 
Net change in cash 3,472 (979 )
 
Cash and cash equivalents at beginning of period   4,137   1,613
Cash and cash equivalents at end of period $ 7,609 $ 634
 
Equipment and other acquired through capital lease obligations $ 1,879 $ 5,461
Capital expenditures accrued or payable 5,541 9,112
 

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,

2017 2016
Net income $ 10,152 $ 10,998
Interest expense 8,402 8,484
Income tax provision 5,330 6,713
Depreciation and amortization   15,264   15,177
EBITDA 39,148 41,372
 
Share-based compensation expense 1,311 2,564
Restructuring expenses 899 2,248
Acquisition-related expenses 88
Other   242  
Adjusted EBITDA $ 41,688 $ 46,184
 
 
Three Months Ended

March 31,

2017 2016
Net cash provided by operating activities $ 32,723 $ 35,281
Interest paid 13,671 3,878
Income and franchise taxes paid 68
Share-based compensation expense (1,311 ) (2,564 )
Gain on sale of rental fleet 1,703 1,378
Loss on disposal of property, plant and equipment (18 ) (338 )
Changes in other assets and liabilities, net of

effect of businesses acquired

  (7,620 )   3,669
EBITDA $ 39,148 $ 41,372
 
 
Mobile Mini, Inc.
Free Cash Flow GAAP Reconciliation
(Unaudited)
(in thousands)
     
Three Months Ended

March 31,

2017 2016
Net cash provided by operating activities $ 32,723 $ 35,281
 
Additions to rental fleet, excluding acquisitions (10,006 ) (10,884 )
Proceeds from sale of rental fleet 4,622 3,970
Additions to property, plant and equipment,

excluding acquisitions

(3,748 ) (8,310 )
Proceeds from sale of property, plant and

equipment

  68   840
Net capital expenditures, excluding acquisitions (9,064 ) (14,384 )
       
Free cash flow $ 23,659 $ 20,897
 

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 for the three months ended March 31, 2017 were $2.9 million higher than when calculated in accordance with GAAP.

Source: Mobile Mini, Inc.

Mobile Mini, Inc.
Mark Funk, 602-308-3879
Executive VP & Chief Financial Officer
www.mobilemini.com
or
INVESTOR RELATIONS COUNSEL:
The Equity Group Inc.
Fred Buonocore, 212-836-9607
Linda Latman, 212-836-9609