EX-99.1 2 mgrc-ex99_1.htm EX-99.1 EX-99.1

Exhibit 99.1

img222354234_0.jpg 

Contact

Keith E. Pratt

EVP & Chief Financial Officer

925-606-9200

PRESS RELEASE

FOR RELEASE October 26, 2023

McGrath Announces Results for Third Quarter 2023

 

Livermore, CA - October 26, 2023 – McGrath RentCorp (“McGrath” or the “Company”) (Nasdaq: MGRC), a leading business-to-business rental company in North America, today announced total revenues from continuing operations for the quarter ended September 30, 2023 of $243.5 million, an increase of 40% compared to the third quarter of 2022. The Company reported net income from continuing operations of $40.4 million, or $1.65 per diluted share, for the third quarter of 2023, compared to net income from continuing operations of $27.1 million, or $1.11 per diluted share, for the third quarter of 2022.

 

THIRD QUARTER 2023 YEAR-OVER-YEAR Company HIGHLIGHTS (FROM CONTINUING OPERATIONS):

•
Rental revenues increased 22% to $122.7 million.
•
Total revenues increased 40% to $243.5 million.
•
Other income for the third quarter 2023 includes a $3.6 million net gain on sale of two properties, which increased earnings per diluted share by $0.11.
•
Adjusted EBITDA1 increased 47% to $95.3 million.
•
Dividend rate of $0.465 per share for the third quarter of 2023. On an annualized basis, this dividend represents a 1.9% yield on the October 25, 2023 close price of $97.06 per share.

Joe Hanna, President and CEO of McGrath, made the following comments regarding these results and future expectations:

“We were very pleased with our third quarter results. Our 22% increase in companywide rental revenues was driven by strong modular segment performance. Modular rental revenues grew 36%, with over half of the growth attributable to our Vesta Modular and several smaller Portable Storage acquisitions completed earlier this year. Before acquisitions, the modular segment rental revenues grew organically by a robust 13%.

Our modular business saw broad based rental strength across commercial, education and portable storage customer bases. We maintained our focus on pricing optimization, rental fleet utilization, and value-added services for our modular customers. Our initiatives to grow modular sales also showed progress as sales revenues doubled compared to a year ago.

TRS-RenTelco experienced continued softness in semiconductor related demand, resulting in 10% lower rental revenues for the quarter, compared to a year ago. During the quarter we reduced new equipment capital spending, made progress with sales of underutilized equipment, and improved rental fleet utilization to above 60% at quarter-end.

We made good progress with the Vesta integration. Our organization work is complete and the Vesta team is fully integrated into the McGrath organization. I am very pleased with the team collaboration and commercial successes that have been achieved.

We are very pleased with our year-to-date performance, and we are fully focused on solid execution for the remainder of the year.”

 

Division HIGHLIGHTS:

All comparisons presented below are for the quarter ended September 30, 2023 to the quarter ended September 30, 2022 unless otherwise indicated.

 

 

Mobile Modular

For the third quarter of 2023, the Company’s Mobile Modular division reported Adjusted EBITDA of $73.0 million, an increase of $33.1 million, or 83%.

•
Rental revenues increased 36% to $94.0 million, depreciation expense increased 30% to $10.0 million, and other direct costs increased 2% to $23.4 million, which resulted in an increase in gross profit on rental revenues of 57% to $60.6 million. Vesta Modular contributed $14.8 million and $10.2 million in rental revenues and gross profit during the quarter, respectively.
•
Rental related services revenues increased 45% to $39.7 million, primarily attributable to higher delivery and pick up activities and higher site related services, with associated gross profit increasing 60% to $11.8 million. Vesta Modular contributed $4.0 million and $1.8 million in rental related services revenues and gross profit during the quarter, respectively.
•
Sales revenues increased $29.9 million to $58.9 million, primarily from higher new equipment sales. Gross margin on sales was 32% compared to 35% in 2022, resulting in a 86% increase in gross profit on sales revenues to $19.0 million. Vesta Modular contributed $16.2 million and $5.1 million in sales revenues and gross profit during the quarter, respectively.
•
Selling and administrative expenses increased $11.0 million to $39.8 million. The addition of Vesta Modular increased selling and administrative expenses by $6.0 million, which included $1.2 million higher amortization of intangibles. In addition, allocated corporate expenses increased $2.7 million.

TRS-RenTelco

For the third quarter of 2023, the Company’s TRS-RenTelco division reported Adjusted EBITDA of $21.9 million, a decrease of 9%, when compared to the same quarter in 2022.

•
Rental revenues decreased 10% to $28.7 million, depreciation expense decreased 3%, and other direct costs decreased 4%, resulting in a 18% decrease in gross profit on rental revenues to $11.5 million. The rental revenue decrease was primarily the result of lower average rental equipment on rent compared to the prior year and comparable average monthly rental rates.
•
Sales revenues increased 58% to $8.7 million and gross profit on sales revenues decreased 9% to $3.1 million. The higher sales revenues and lower gross profit on sales can be attributed to the mix of equipment sold, which can fluctuate quarterly depending on customer requirements, equipment availability and funding.
•
Selling and administrative expenses increased $0.3 million, or 4%, to $7.0 million, primarily due to higher allocated corporate expenses.

financial outlook:

 

Based upon the Company's year-to-date results and current outlook for the remainder of the year, the Company is revising its financial outlook. For the full-year 2023, the Company expects:

 

 

 

Previous

(Continuing Operations)

Current

(Continuing Operations)

•

Total revenue:

$805 to $830 million

$820 to $830 million

•

Adjusted EBITDA1, 2:

$306 to $320 million

$312 to $320 million

•

Gross rental equipment capital expenditures:

$190 to $200 million

$190 to $200 million

 

1.
Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation and transaction costs. A reconciliation of actual net income to Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating activities can be found at the end of this release. Adjusted EBITDA from continuing operations for the quarter ended September 30, 2023, excludes the income from discontinued operations from the divestiture of Adler Tanks.
2.
Information reconciling forward-looking Adjusted EBITDA to the comparable GAAP financial measures is unavailable to the Company without unreasonable effort because certain items required for such reconciliations are outside of the Company’s control and/or cannot be reasonably predicted, such as the provision for income taxes. Therefore, no reconciliation to the most comparable GAAP measures is provided. The Company provides Adjusted EBITDA guidance because it believes that Adjusted EBITDA, when viewed with the Company’s results under GAAP, provides useful information for the reasons noted in the reconciliation of actual Adjusted EBITDA to the most directly comparable GAAP measures at the end of this release.

 

2

 

 

ABOUT MCGRATH:

McGrath RentCorp (Nasdaq: MGRC) is a leading business-to-business rental company in North America with a strong record of profitable business growth. Founded in 1979, McGrath’s operations are centered on modular solutions through its Mobile Modular and Mobile Modular Portable Storage businesses. In addition, its TRS-RenTelco business offers electronic test equipment rental solutions. The Company’s rental product offerings and services are part of the circular supply economy, helping customers work more efficiently, and sustainably manage their environmental footprint. With over 40 years of experience, McGrath’s success is driven by a focus on exceptional customer experiences. This focus has underpinned the Company’s long-term financial success and supported over 30 consecutive years of annual dividend increases to shareholders, a rare distinction among publicly listed companies.

McGrath is headquartered in Livermore, California. Additional information about McGrath and its businesses is available at mgrc.com and investors.mgrc.com.

You should read this press release in conjunction with the financial statements and notes thereto included in the Company’s latest Forms 10-K, 10-Q and other SEC filings. You can visit the Company’s web site at www.mgrc.com to access information on McGrath RentCorp, including the latest Forms 10-K, 10-Q and other SEC filings.

 

Conference Call Note:

As previously announced in its press release of September 28, 2023, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on October 26, 2023 to discuss the third quarter 2023 results. To participate in the teleconference, dial 1-800-245-3047 (in the U.S.), or 1-203-518-9765 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company’s website at https://investors.mgrc.com/. A replay will be available for 7 days following the call by dialing 1-800-839-5685 (in the U.S.), or 1-402-220-2567 (outside the U.S.). In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company’s website at https://investors.mgrc.com/events-and-presentations.

 

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding McGrath RentCorp’s expectations, strategies, prospects or targets are forward looking statements. These forward-looking statements also can be identified by the use of forward-looking terminology such as “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plan,” “predict,” “project,” or “will,” or the negative of these terms or other comparable terminology. In particular, Mr. Hanna’s statements about (i) progress with sales of underutilized TRS equipment, (ii) focus on solid execution for the remainder of the year, and (iii) statements regarding the full year 2023 in the “Financial Outlook” section, are forward-looking.

These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected including: health of the education and commercial markets in our modular building division; unforeseen liabilities and integration challenges associated with the Vesta, Brekke Storage, Dixie Storage and Inland Storage acquisitions; competition within the modular business; the activity levels in the semiconductor and general purpose and communications test equipment markets at TRS-RenTelco; continued execution of our strategic performance improvement initiatives; our ability to successfully increase prices to offset cost increases; and our ability to effectively manage our rental assets, as well as the other factors disclosed under “Risk Factors” in the Company’s Form 10-K and other SEC filings.

Forward-looking statements are made only as of the date hereof. Except as otherwise required by law, we assume no obligation to update any of the forward-looking statements contained in this press release.

3

 

MCGRATH RENTCORP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

(in thousands, except per share amounts)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

$

122,686

 

 

$

100,871

 

 

$

350,773

 

 

$

285,588

 

Rental related services

 

 

40,492

 

 

 

28,198

 

 

 

101,481

 

 

 

69,276

 

Rental operations

 

 

163,178

 

 

 

129,069

 

 

 

452,254

 

 

 

354,864

 

Sales

 

 

77,115

 

 

 

44,414

 

 

 

148,576

 

 

 

95,503

 

Other

 

 

3,213

 

 

 

860

 

 

 

9,424

 

 

 

2,397

 

Total revenues

 

 

243,506

 

 

 

174,343

 

 

 

610,254

 

 

 

452,764

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Direct costs of rental operations:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation of rental equipment

 

 

22,069

 

 

 

20,174

 

 

 

66,499

 

 

 

60,118

 

Rental related services

 

 

28,532

 

 

 

20,576

 

 

 

71,625

 

 

 

50,116

 

Other

 

 

28,493

 

 

 

28,203

 

 

 

90,188

 

 

 

82,573

 

Total direct costs of rental operations

 

 

79,094

 

 

 

68,953

 

 

 

228,312

 

 

 

192,807

 

Costs of sales

 

 

52,878

 

 

 

28,548

 

 

 

98,431

 

 

 

58,124

 

Total costs of revenues

 

 

131,972

 

 

 

97,501

 

 

 

326,743

 

 

 

250,931

 

Gross profit

 

 

111,534

 

 

 

76,842

 

 

 

283,511

 

 

 

201,833

 

Selling and administrative expenses

 

 

48,508

 

 

 

36,954

 

 

 

153,032

 

 

 

103,368

 

Other income

 

 

(3,559

)

 

 

—

 

 

 

(3,559

)

 

 

—

 

Income from operations

 

 

66,585

 

 

 

39,888

 

 

 

134,038

 

 

 

98,465

 

Interest expense

 

 

(11,025

)

 

 

(3,355

)

 

 

(28,434

)

 

 

(8,057

)

Foreign currency exchange (loss) gain

 

 

(42

)

 

 

(236

)

 

 

166

 

 

 

(404

)

Income from continuing operations before provision for income taxes

 

 

55,518

 

 

 

36,297

 

 

 

105,770

 

 

 

90,004

 

Provision for income taxes from continuing operations

 

 

15,152

 

 

 

9,182

 

 

 

25,934

 

 

 

21,687

 

Income from continuing operations

 

 

40,366

 

 

 

27,115

 

 

 

79,836

 

 

 

68,317

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations before provision for income taxes

 

 

—

 

 

 

4,635

 

 

 

1,709

 

 

 

9,350

 

Provision for income taxes from discontinued operations

 

 

—

 

 

 

1,183

 

 

 

453

 

 

 

2,170

 

Gain on sale of discontinued operations, net of tax

 

 

—

 

 

 

—

 

 

 

61,513

 

 

 

—

 

Income from discontinued operations

 

 

—

 

 

 

3,452

 

 

 

62,769

 

 

 

7,180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

40,366

 

 

$

30,567

 

 

$

142,605

 

 

$

75,497

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share from continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.65

 

 

$

1.11

 

 

$

3.26

 

 

$

2.81

 

Diluted

 

$

1.65

 

 

$

1.11

 

 

$

3.26

 

 

$

2.79

 

Earnings per share from discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

—

 

 

$

0.14

 

 

$

2.57

 

 

$

0.29

 

Diluted

 

$

—

 

 

$

0.14

 

 

$

2.56

 

 

$

0.29

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.65

 

 

$

1.25

 

 

$

5.83

 

 

$

3.10

 

Diluted

 

$

1.65

 

 

$

1.25

 

 

$

5.81

 

 

$

3.08

 

Shares used in per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

24,487

 

 

 

24,379

 

 

 

24,461

 

 

 

24,342

 

Diluted

 

 

24,525

 

 

 

24,504

 

 

 

24,527

 

 

 

24,516

 

Cash dividends declared per share

 

$

0.465

 

 

$

0.455

 

 

$

1.395

 

 

$

1.365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

MCGRATH RENTCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

September 30,

 

 

December 31,

 

 

(in thousands)

 

2023

 

 

2022

 

 

Assets

 

 

 

 

 

 

 

Cash

 

$

1,946

 

 

$

957

 

 

Accounts receivable, net of allowance for credit losses of $2,683 in 2023 and $2,300 in 2022

 

 

224,269

 

 

 

169,937

 

 

Rental equipment, at cost:

 

 

 

 

 

 

 

Relocatable modular buildings

 

 

1,474,359

 

 

 

1,123,268

 

 

Electronic test equipment

 

 

383,006

 

 

 

398,267

 

 

 

 

 

1,857,365

 

 

 

1,521,535

 

 

Less: accumulated depreciation

 

 

(565,497

)

 

 

(531,218

)

 

Rental equipment, net

 

 

1,291,868

 

 

 

990,317

 

 

Property, plant and equipment, net

 

 

146,484

 

 

 

138,713

 

 

Prepaid expenses and other assets

 

 

80,853

 

 

 

69,837

 

 

Intangible assets, net

 

 

67,480

 

 

 

35,431

 

 

Goodwill

 

 

323,771

 

 

 

106,403

 

 

Assets of discontinued operations

 

 

—

 

 

 

196,249

 

 

Total assets

 

$

2,136,671

 

 

$

1,707,844

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Notes payable

 

$

667,640

 

 

$

413,742

 

 

Accounts payable and accrued liabilities

 

 

223,010

 

 

 

151,208

 

 

Deferred income

 

 

105,534

 

 

 

82,417

 

 

Deferred income taxes, net

 

 

229,115

 

 

 

203,361

 

 

Liabilities of discontinued operations

 

 

—

 

 

 

53,171

 

 

Total liabilities

 

 

1,225,299

 

 

 

903,899

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

Common stock, no par value - Authorized 40,000 shares

 

 

 

 

 

 

 

Issued and outstanding - 24,489 shares as of September 30, 2023 and 24,388 shares as of December 31, 2022

 

 

109,253

 

 

 

110,080

 

 

Retained earnings

 

 

802,161

 

 

 

693,943

 

 

Accumulated other comprehensive loss

 

 

(42

)

 

 

(78

)

 

Total shareholders’ equity

 

 

911,372

 

 

 

803,945

 

 

Total liabilities and shareholders’ equity

 

$

2,136,671

 

 

$

1,707,844

 

 

 

 

 

 

 

 

 

 

 

5

 

MCGRATH RENTCORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

Nine Months Ended September 30,

 

(in thousands)

 

2023

 

 

2022

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net income

 

$

142,605

 

 

$

75,497

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

81,842

 

 

 

83,272

 

Deferred income taxes

 

 

(30,018

)

 

 

(4,299

)

Provision for credit losses

 

 

1,794

 

 

 

307

 

Share-based compensation

 

 

5,273

 

 

 

5,106

 

Gain on sale of property, plant and equipment

 

 

(3,559

)

 

 

—

 

Gain on sale of discontinued operations

 

 

(61,513

)

 

 

—

 

Gain on sale of used rental equipment

 

 

(22,964

)

 

 

(26,705

)

Foreign currency exchange (gain) loss

 

 

(166

)

 

 

404

 

Amortization of debt issuance costs

 

 

6

 

 

 

13

 

     Change in:

 

 

 

 

 

 

Accounts receivable

 

 

(27,733

)

 

 

(30,767

)

Prepaid expenses and other assets

 

 

(7,390

)

 

 

(17,313

)

Accounts payable and accrued liabilities

 

 

32,818

 

 

 

14,384

 

Deferred income

 

 

7,908

 

 

 

33,399

 

Net cash provided by operating activities

 

 

118,903

 

 

 

133,298

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

Proceeds from sale of discontinued operations

 

 

268,012

 

 

 

—

 

Purchases of rental equipment

 

 

(171,322

)

 

 

(130,395

)

Purchases of property, plant and equipment

 

 

(16,448

)

 

 

(10,594

)

Cash paid for acquisition of businesses

 

 

(458,315

)

 

 

—

 

Cash paid for acquisition of business assets

 

 

(3,474

)

 

 

—

 

Proceeds from sales of used rental equipment

 

 

49,405

 

 

 

54,193

 

Proceeds from sales of property, plant and equipment

 

 

595

 

 

 

—

 

Net cash used in investing activities

 

 

(331,547

)

 

 

(86,796

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

Net borrowings (payments) under bank lines of credit

 

 

178,892

 

 

 

(7,000

)

Borrowings under note purchase agreement

 

 

75,000

 

 

 

—

 

Taxes paid related to net share settlement of stock awards

 

 

(6,100

)

 

 

(6,253

)

Payment of dividends

 

 

(34,168

)

 

 

(33,175

)

Net cash provided by (used in) financing activities

 

 

213,624

 

 

 

(46,428

)

Effect of foreign currency exchange rate changes on cash

 

 

9

 

 

 

(4

)

Net increase in cash

 

 

989

 

 

 

70

 

Cash balance, beginning of period

 

 

957

 

 

 

1,491

 

Cash balance, end of period

 

$

1,946

 

 

$

1,561

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

 

 

Interest paid, during the period

 

$

27,818

 

 

$

8,982

 

Net income taxes paid, during the period

 

$

9,547

 

 

$

24,885

 

Dividends accrued during the period, not yet paid

 

$

12,014

 

 

$

11,167

 

Rental equipment acquisitions, not yet paid

 

$

5,765

 

 

$

9,555

 

Proceeds to be received on the sale of property, plant and equipment

 

$

6,370

 

 

$

—

 

Business acquisition payments withheld

 

$

293

 

 

$

—

 

 

 

 

 

 

 

 

 

6

 

MCGRATH RENTCORP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BUSINESS SEGMENT DATA (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollar amounts in thousands)

 

Mobile Modular

 

 

TRS-RenTelco

 

 

Enviroplex

 

 

Adler Tanks (Discontinued)

 

 

Consolidated

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

$

94,028

 

 

$

28,658

 

 

$

—

 

 

$

—

 

 

$

122,686

 

Rental related services

 

 

39,716

 

 

 

776

 

 

 

—

 

 

 

—

 

 

 

40,492

 

    Rental operations

 

 

133,744

 

 

 

29,434

 

 

 

—

 

 

 

—

 

 

 

163,178

 

Sales

 

 

58,867

 

 

 

8,733

 

 

 

9,515

 

 

 

—

 

 

 

77,115

 

Other

 

 

2,271

 

 

 

942

 

 

 

—

 

 

 

—

 

 

 

3,213

 

        Total revenues

 

 

194,882

 

 

 

39,109

 

 

 

9,515

 

 

 

—

 

 

 

243,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct costs of rental operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Depreciation

 

 

10,037

 

 

 

12,032

 

 

 

—

 

 

 

—

 

 

 

22,069

 

    Rental related services

 

 

27,927

 

 

 

605

 

 

 

—

 

 

 

—

 

 

 

28,532

 

    Other

 

 

23,353

 

 

 

5,140

 

 

 

—

 

 

 

—

 

 

 

28,493

 

        Total direct costs of rental operations

 

 

61,317

 

 

 

17,777

 

 

 

—

 

 

 

—

 

 

 

79,094

 

Costs of sales

 

 

39,821

 

 

 

5,651

 

 

 

7,406

 

 

 

—

 

 

 

52,878

 

        Total costs of revenues

 

 

101,138

 

 

 

23,428

 

 

 

7,406

 

 

 

—

 

 

 

131,972

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

 

60,638

 

 

 

11,486

 

 

 

—

 

 

 

—

 

 

 

72,124

 

Rental related services

 

 

11,789

 

 

 

171

 

 

 

—

 

 

 

—

 

 

 

11,960

 

    Rental operations

 

 

72,427

 

 

 

11,657

 

 

 

—

 

 

 

—

 

 

 

84,084

 

Sales

 

 

19,046

 

 

 

3,082

 

 

 

2,109

 

 

 

—

 

 

 

24,237

 

Other

 

 

2,271

 

 

 

942

 

 

 

—

 

 

 

—

 

 

 

3,213

 

          Total gross profit

 

 

93,744

 

 

 

15,681

 

 

 

2,109

 

 

 

—

 

 

 

111,534

 

Selling and administrative expenses

 

 

39,832

 

 

 

6,999

 

 

 

1,677

 

 

 

—

 

 

 

48,508

 

Other income

 

 

(2,740

)

 

 

(819

)

 

 

—

 

 

 

—

 

 

 

(3,559

)

Income from operations

 

$

56,652

 

 

$

9,501

 

 

$

432

 

 

$

—

 

 

 

66,585

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,025

)

Foreign currency exchange loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(42

)

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,152

)

          Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

40,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA 1

 

$

72,953

 

 

$

21,858

 

 

$

517

 

 

$

—

 

 

$

95,328

 

Average rental equipment 2

 

$

1,350,562

 

 

$

385,353

 

 

 

 

 

 

 

 

 

 

Average monthly total yield 3

 

 

2.32

%

 

 

2.46

%

 

 

 

 

 

 

 

 

 

Average utilization 4

 

 

79.4

%

 

 

59.4

%

 

 

 

 

 

 

 

 

 

Average monthly rental rate 5

 

 

2.92

%

 

 

4.17

%

 

 

 

 

 

 

 

 

 

1. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation and transaction costs. Adjusted EBITDA for the quarter ended September 30, 2023, excludes the gain on sale of discontinued operations from the divestiture of Adler Tanks.

2. Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

3. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

4. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

5. Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

 

 

 

 

7

 

MCGRATH RENTCORP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BUSINESS SEGMENT DATA (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollar amounts in thousands)

 

Mobile Modular

 

 

TRS-RenTelco

 

 

Enviroplex

 

 

Adler Tanks (Discontinued)

 

 

Consolidated

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

$

69,111

 

 

$

31,760

 

 

$

—

 

 

$

17,490

 

 

$

118,361

 

Rental related services

 

 

27,353

 

 

 

845

 

 

 

—

 

 

 

7,163

 

 

 

35,361

 

    Rental operations

 

 

96,464

 

 

 

32,605

 

 

 

—

 

 

 

24,653

 

 

 

153,722

 

Sales

 

 

28,922

 

 

 

5,514

 

 

 

9,978

 

 

 

977

 

 

 

45,391

 

Other

 

 

452

 

 

 

408

 

 

 

—

 

 

 

563

 

 

 

1,423

 

        Total revenues

 

 

125,838

 

 

 

38,527

 

 

 

9,978

 

 

 

26,193

 

 

 

200,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct costs of rental operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Depreciation

 

 

7,747

 

 

 

12,427

 

 

 

—

 

 

 

4,002

 

 

 

24,176

 

    Rental related services

 

 

19,973

 

 

 

603

 

 

 

—

 

 

 

5,395

 

 

 

25,971

 

    Other

 

 

22,837

 

 

 

5,366

 

 

 

—

 

 

 

3,505

 

 

 

31,708

 

        Total direct costs of rental operations

 

 

50,557

 

 

 

18,396

 

 

 

—

 

 

 

12,902

 

 

 

81,855

 

Costs of sales

 

 

18,696

 

 

 

2,133

 

 

 

7,719

 

 

 

693

 

 

 

29,241

 

        Total costs of revenues

 

 

69,253

 

 

 

20,529

 

 

 

7,719

 

 

 

13,595

 

 

 

111,096

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

 

38,527

 

 

 

13,967

 

 

 

—

 

 

 

9,983

 

 

 

62,477

 

Rental related services

 

 

7,380

 

 

 

242

 

 

 

—

 

 

 

1,768

 

 

 

9,390

 

    Rental operations

 

 

45,907

 

 

 

14,209

 

 

 

—

 

 

 

11,751

 

 

 

71,867

 

Sales

 

 

10,226

 

 

 

3,381

 

 

 

2,259

 

 

 

284

 

 

 

16,150

 

Other

 

 

452

 

 

 

408

 

 

 

—

 

 

 

563

 

 

 

1,423

 

          Total gross profit

 

 

56,585

 

 

 

17,998

 

 

 

2,259

 

 

 

12,598

 

 

 

89,440

 

Selling and administrative expenses

 

 

28,798

 

 

 

6,726

 

 

 

1,430

 

 

 

7,141

 

 

 

44,095

 

Other income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Income from operations

 

$

27,787

 

 

$

11,272

 

 

$

829

 

 

$

5,457

 

 

 

45,345

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,177

)

Foreign currency exchange loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(236

)

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,365

)

          Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

30,567

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA 1

 

$

39,901

 

 

$

23,894

 

 

$

900

 

 

$

10,192

 

 

$

74,887

 

Average rental equipment 2

 

$

1,030,792

 

 

$

389,675

 

 

 

 

 

 

 

 

 

 

Average monthly total yield 3

 

 

2.23

%

 

 

2.71

%

 

 

 

 

 

 

 

 

 

Average utilization 4

 

 

80.1

%

 

 

65.3

%

 

 

 

 

 

 

 

 

 

Average monthly rental rate 5

 

 

2.79

%

 

 

4.16

%

 

 

 

 

 

 

 

 

 

1. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation and transaction costs.

2. Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

3. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

4. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

5. Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

 

8

 

MCGRATH RENTCORP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BUSINESS SEGMENT DATA (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollar amounts in thousands)

 

Mobile Modular

 

 

TRS-RenTelco

 

 

Enviroplex

 

 

Adler Tanks (Discontinued)

 

 

Consolidated

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

$

264,398

 

 

$

86,375

 

 

$

—

 

 

$

6,520

 

 

$

357,293

 

Rental related services

 

 

99,158

 

 

 

2,323

 

 

 

—

 

 

 

2,584

 

 

 

104,065

 

    Rental operations

 

 

363,556

 

 

 

88,698

 

 

 

—

 

 

 

9,104

 

 

 

461,358

 

Sales

 

 

115,829

 

 

 

21,368

 

 

 

11,379

 

 

 

269

 

 

 

148,845

 

Other

 

 

6,416

 

 

 

3,008

 

 

 

—

 

 

 

65

 

 

 

9,489

 

        Total revenues

 

 

485,801

 

 

 

113,074

 

 

 

11,379

 

 

 

9,438

 

 

 

619,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct costs of rental operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Depreciation

 

 

29,766

 

 

 

36,733

 

 

 

—

 

 

 

1,325

 

 

 

67,824

 

    Rental related services

 

 

69,618

 

 

 

2,007

 

 

 

—

 

 

 

2,020

 

 

 

73,645

 

    Other

 

 

74,345

 

 

 

15,843

 

 

 

—

 

 

 

1,270

 

 

 

91,458

 

        Total direct costs of rental operations

 

 

173,729

 

 

 

54,583

 

 

 

—

 

 

 

4,614

 

 

 

232,926

 

Costs of sales

 

 

78,102

 

 

 

11,307

 

 

 

9,022

 

 

 

159

 

 

 

98,590

 

        Total costs of revenues

 

 

251,831

 

 

 

65,890

 

 

 

9,022

 

 

 

4,773

 

 

 

331,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

 

160,287

 

 

 

33,799

 

 

 

—

 

 

 

3,926

 

 

 

198,012

 

Rental related services

 

 

29,540

 

 

 

316

 

 

 

—

 

 

 

564

 

 

 

30,420

 

    Rental operations

 

 

189,827

 

 

 

34,115

 

 

 

—

 

 

 

4,490

 

 

 

228,432

 

Sales

 

 

37,727

 

 

 

10,061

 

 

 

2,357

 

 

 

110

 

 

 

50,255

 

Other

 

 

6,416

 

 

 

3,008

 

 

 

—

 

 

 

65

 

 

 

9,489

 

          Total gross profit

 

 

233,970

 

 

 

47,184

 

 

 

2,357

 

 

 

4,665

 

 

 

288,176

 

Selling and administrative expenses

 

 

124,642

 

 

 

23,576

 

 

 

4,814

 

 

 

2,582

 

 

 

155,614

 

Other income

 

 

(2,740

)

 

 

(819

)

 

 

—

 

 

 

—

 

 

 

(3,559

)

Income (loss) from operations

 

$

112,068

 

 

$

24,427

 

 

$

(2,457

)

 

$

2,083

 

 

 

136,121

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,808

)

Foreign currency exchange loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

166

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,387

)

          Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

81,092

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA 1

 

$

172,222

 

 

$

64,031

 

 

$

(2,207

)

 

$

3,682

 

 

$

237,728

 

Average rental equipment 2

 

$

1,275,330

 

 

$

391,993

 

 

 

 

 

 

 

 

 

 

Average monthly total yield 3

 

 

2.30

%

 

 

2.43

%

 

 

 

 

 

 

 

 

 

Average utilization 4

 

 

79.5

%

 

 

59.0

%

 

 

 

 

 

 

 

 

 

Average monthly rental rate 5

 

 

2.90

%

 

 

4.15

%

 

 

 

 

 

 

 

 

 

1. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation and transaction costs. Adjusted EBITDA for the nine months ended September 30, 2023, excludes the gain on sale of discontinued operations from the divestiture of Adler Tanks.

2. Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

3. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

4. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

5. Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

 

9

 

MCGRATH RENTCORP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BUSINESS SEGMENT DATA (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollar amounts in thousands)

 

Mobile Modular

 

 

TRS-RenTelco

 

 

Enviroplex

 

 

Adler Tanks (Discontinued)

 

 

Consolidated

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

$

195,598

 

 

$

89,990

 

 

$

—

 

 

$

47,638

 

 

$

333,226

 

Rental related services

 

 

66,947

 

 

 

2,329

 

 

 

—

 

 

 

19,221

 

 

 

88,497

 

    Rental operations

 

 

262,545

 

 

 

92,319

 

 

 

—

 

 

 

66,859

 

 

 

421,723

 

Sales

 

 

64,113

 

 

 

15,845

 

 

 

15,545

 

 

 

2,235

 

 

 

97,738

 

Other

 

 

1,202

 

 

 

1,195

 

 

 

—

 

 

 

1,082

 

 

 

3,479

 

        Total revenues

 

 

327,860

 

 

 

109,359

 

 

 

15,545

 

 

 

70,176

 

 

 

522,940

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct costs of rental operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Depreciation

 

 

23,329

 

 

 

36,789

 

 

 

—

 

 

 

11,996

 

 

 

72,114

 

    Rental related services

 

 

48,269

 

 

 

1,847

 

 

 

—

 

 

 

14,851

 

 

 

64,967

 

    Other

 

 

67,072

 

 

 

15,501

 

 

 

—

 

 

 

9,783

 

 

 

92,356

 

        Total direct costs of rental operations

 

 

138,670

 

 

 

54,137

 

 

 

—

 

 

 

36,630

 

 

 

229,437

 

Costs of sales

 

 

39,785

 

 

 

6,398

 

 

 

11,941

 

 

 

1,613

 

 

 

59,737

 

        Total costs of revenues

 

 

178,455

 

 

 

60,535

 

 

 

11,941

 

 

 

38,243

 

 

 

289,174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

 

105,197

 

 

 

37,700

 

 

 

—

 

 

 

25,859

 

 

 

168,756

 

Rental related services

 

 

18,678

 

 

 

482

 

 

 

—

 

 

 

4,370

 

 

 

23,530

 

    Rental operations

 

 

123,875

 

 

 

38,182

 

 

 

—

 

 

 

30,229

 

 

 

192,286

 

Sales

 

 

24,328

 

 

 

9,447

 

 

 

3,604

 

 

 

622

 

 

 

38,001

 

Other

 

 

1,202

 

 

 

1,195

 

 

 

—

 

 

 

1,082

 

 

 

3,479

 

          Total gross profit

 

 

149,405

 

 

 

48,824

 

 

 

3,604

 

 

 

31,933

 

 

 

233,766

 

Selling and administrative expenses

 

 

79,245

 

 

 

19,930

 

 

 

4,193

 

 

 

20,642

 

 

 

124,010

 

Other income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Income (loss) from operations

 

$

70,160

 

 

$

28,894

 

 

$

(589

)

 

$

11,291

 

 

 

109,756

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,998

)

Foreign currency exchange loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(404

)

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23,857

)

          Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

75,497

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA 1

 

$

106,156

 

 

$

66,675

 

 

$

(377

)

 

$

25,443

 

 

$

197,897

 

Average rental equipment 2

 

$

1,019,105

 

 

$

379,181

 

 

 

 

 

 

 

 

 

 

Average monthly total yield 3

 

 

2.13

%

 

 

2.63

%

 

 

 

 

 

 

 

 

 

Average utilization 4

 

 

78.5

%

 

 

64.8

%

 

 

 

 

 

 

 

 

 

Average monthly rental rate 5

 

 

2.72

%

 

 

4.07

%

 

 

 

 

 

 

 

 

 

1. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation and transaction costs.

2. Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

3. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

4. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

5. Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

 

Reconciliation of Adjusted EBITDA to the most directly comparable GAAP measures

To supplement the Company’s financial data presented on a basis consistent with accounting principles generally accepted in the United States of America (“GAAP”), the Company presents “Adjusted EBITDA”, which is defined by the Company as net income before interest expense, provision for income taxes, depreciation, amortization, share-based compensation and transaction costs. The Company presents Adjusted EBITDA as a financial measure as management believes it provides useful information to investors regarding the Company’s liquidity and financial condition and because management, as well as the Company’s lenders, use this measure in evaluating the performance of the Company.

10

 

Management uses Adjusted EBITDA as a supplement to GAAP measures to further evaluate the Company’s period-to-period operating performance, compliance with financial covenants in the Company’s revolving lines of credit and senior notes and the Company’s ability to meet future capital expenditure and working capital requirements. Management believes the exclusion of non-cash charges, including share-based compensation and transaction costs, is useful in measuring the Company’s cash available for operations and performance of the Company. Because management finds Adjusted EBITDA useful, the Company believes its investors will also find Adjusted EBITDA useful in evaluating the Company’s performance.

Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of the Company’s profitability or liquidity. Adjusted EBITDA is not in accordance with or an alternative for GAAP and may be different from non-GAAP measures used by other companies. Unlike EBITDA, which may be used by other companies or investors, Adjusted EBITDA does not include share-based compensation charges and transaction costs. The Company believes that Adjusted EBITDA is of limited use in that it does not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and does not accurately reflect real cash flow. In addition, other companies may not use Adjusted EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted EBITDA for purposes of comparison. The Company’s presentation of Adjusted EBITDA should not be construed as an inference that the Company will not incur expenses that are the same as or similar to the adjustments in this presentation. Therefore, Adjusted EBITDA should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The Company compensates for the limitations of Adjusted EBITDA by relying upon GAAP results to gain a complete picture of the Company’s performance. Because Adjusted EBITDA is a non-GAAP financial measure as defined by the SEC, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP.

 

Reconciliation of Income from Continuing Operations to Adjusted EBITDA

(dollar amounts in thousands)

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

Twelve Months Ended
September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Income from continuing operations

$

40,366

 

 

$

27,115

 

 

$

79,836

 

 

$

68,317

 

 

$

114,828

 

 

$

95,182

 

Provision for income taxes from continuing operations

 

15,152

 

 

 

9,182

 

 

 

25,934

 

 

 

21,687

 

 

 

35,624

 

 

 

32,331

 

Interest expense

 

11,025

 

 

 

3,355

 

 

 

28,434

 

 

 

8,057

 

 

 

32,607

 

 

 

10,653

 

Depreciation and amortization

 

26,884

 

 

 

23,491

 

 

 

80,385

 

 

 

69,982

 

 

 

104,043

 

 

 

93,065

 

EBITDA

 

93,427

 

 

 

63,143

 

 

 

214,589

 

 

 

168,043

 

 

 

287,102

 

 

 

231,231

 

Share-based compensation

 

1,891

 

 

 

1,461

 

 

 

5,155

 

 

 

4,244

 

 

 

7,658

 

 

 

6,278

 

Transaction costs 3

 

10

 

 

 

167

 

 

 

14,302

 

 

 

167

 

 

 

18,188

 

 

 

899

 

Adjusted EBITDA 1

$

95,328

 

 

$

64,771

 

 

$

234,046

 

 

$

172,454

 

 

$

312,948

 

 

$

238,408

 

Adjusted EBITDA margin 2

 

39

%

 

 

37

%

 

 

38

%

 

 

38

%

 

 

39

%

 

 

39

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities

(dollar amounts in thousands)

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

Twelve Months Ended
September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Adjusted EBITDA 1

$

95,328

 

 

$

74,887

 

 

$

237,728

 

 

$

197,897

 

 

$

328,697

 

 

$

271,589

 

Interest paid

 

(11,016

)

 

 

(3,161

)

 

 

(27,818

)

 

 

(8,982

)

 

 

(33,611

)

 

 

(12,831

)

Income taxes paid, net of refunds received

 

(2,616

)

 

 

(7,807

)

 

 

(9,547

)

 

 

(24,885

)

 

 

(12,024

)

 

 

(25,898

)

Gain on sale of used rental equipment

 

(8,714

)

 

 

(10,612

)

 

 

(22,964

)

 

 

(26,705

)

 

 

(34,238

)

 

 

(34,358

)

Foreign currency exchange loss

 

42

 

 

 

236

 

 

 

(166

)

 

 

404

 

 

 

(192

)

 

 

429

 

Amortization of debt issuance costs

 

2

 

 

 

4

 

 

 

6

 

 

 

13

 

 

 

9

 

 

 

17

 

Change in certain assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

(26,223

)

 

 

(22,630

)

 

 

(25,939

)

 

 

(30,460

)

 

 

(26,003

)

 

 

(21,128

)

Prepaid expenses and other assets

 

1,114

 

 

 

(6,458

)

 

 

(7,390

)

 

 

(17,313

)

 

 

(6,561

)

 

 

(12,720

)

Accounts payable and other liabilities

 

917

 

 

 

12,232

 

 

 

(32,915

)

 

 

9,930

 

 

 

(34,250

)

 

 

5,302

 

Deferred income

 

(1,382

)

 

 

14,564

 

 

 

7,908

 

 

 

33,399

 

 

 

(1,790

)

 

 

22,353

 

Net cash provided by operating activities

$

47,452

 

 

$

51,255

 

 

$

118,903

 

 

$

133,298

 

 

$

180,037

 

 

$

192,755

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation and transaction costs. Adjusted EBITDA for the nine months ended September 30, 2023, excludes the gain on sale of discontinued operations from

11

 

the divestiture of Adler Tanks. Total Adjusted EBITDA attributed to discontinued operations for the nine months ended September 30, 2023 and 2022, was $3,682 and $25,443, respectively.

2. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total revenues for the period.

3. Transaction costs include acquisition and divestiture related legal and professional fees and other costs specific to these transactions.

 

 

12