-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RSe6GYTpOXQHHR2zmsf+mPBWlp+8sI3yHMBdRzQbFmkaRQijeOoLDtg5NAHt7zOg /dTIbeIwdj4+AFeR7YtfAw== 0001157523-06-001927.txt : 20060223 0001157523-06-001927.hdr.sgml : 20060223 20060223161611 ACCESSION NUMBER: 0001157523-06-001927 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060223 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060223 DATE AS OF CHANGE: 20060223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCGRATH RENTCORP CENTRAL INDEX KEY: 0000752714 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 942579843 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13292 FILM NUMBER: 06639726 BUSINESS ADDRESS: STREET 1: 5700 LAS POSITAS RD CITY: LIVERMORE STATE: CA ZIP: 94550 BUSINESS PHONE: 5102762626 MAIL ADDRESS: STREET 1: 5700 LAS POSITAS RD CITY: LIVERMORE STATE: CA ZIP: 94550 8-K 1 a5087891.txt MCGRATH RENTCORP 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------------------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 23, 2006 ------------------------------------------------------------------ McGRATH RENTCORP (Exact name of registrant as specified in its Charter) California (State or other jurisdiction of incorporation) 0-13292 94-2579843 (Commission File Number) (I.R.S. Employee Identification No.) 5700 Las Positas Road, Livermore, CA 94551-7800 (Address of principal executive offices) (925) 606-9200 (Registrant's Telephone Number, Including Area Code) ------------------------------------------------------------------ Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ 1 Item 2.02 Results of Operations and Financial Condition. On February 23, 2006, McGrath RentCorp (the "Company") announced via press release the Company's results for its fourth quarter ended December 31, 2005. A copy of the Company's press release is attached hereto as Exhibit 99.1. This Form 8-K and the attached exhibit are provided under Items 2.02 and 9.01 of Form 8-K and are furnished to, but not filed with, the Securities and Exchange Commission. Item 9.01 Financial Statements and Exhibits. (c) Exhibits. Exhibit No. Description ----------- ----------- 99.1 Press Release of McGrath RentCorp, dated February 23, 2006. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. McGRATH RENTCORP Dated: February 23, 2006 By: /s/ Thomas J. Sauer ----------------------------------- Thomas J. Sauer Vice President and Chief Financial Officer 3 EX-99.1 2 a5087891-ex991.txt EXHIBIT 99.1 Exhibit 99.1 McGrath RentCorp Announces Results for Fourth Quarter and Year-end; EPS Increases 33% to $1.61 for the Year; Company Announces 14% Dividend Increase LIVERMORE, Calif.--(BUSINESS WIRE)--Feb. 23, 2006--McGrath RentCorp (Nasdaq:MGRC) today announced revenues for the quarter ended December 31, 2005, of $77.6 million, compared to $59.3 million in fourth quarter 2004. The Company reported net income for the fourth quarter 2005 of $12.1 million, or $0.47 per diluted share, compared to $8.8 million, or $0.35 per diluted share, in the fourth quarter 2004. Total revenues for the twelve months ended December 31, 2005, were $272.2 million, compared to $202.5 million in the same twelve-month period in 2004. Net income for the twelve months ended December 31, 2005, increased 36% to $40.8 million, or $1.61 per diluted share, compared to net income of $30.0 million, or $1.21 per diluted share, in the prior-year period. The Company also announced that the board of directors declared a quarterly cash dividend of $0.16 per share for the quarter ending March 31, 2006, an increase of 14% over last year's same period. On an annualized basis, this dividend represents a 2.0% yield based on the February 22, 2006, closing stock price. The cash dividend will be payable on April 28, 2006, to all shareholders of record on April 14, 2006. For the fourth quarter of 2005, the Company's Mobile Modular division reported an increase in total revenues of 43% from $30.7 million in fourth quarter 2004 to $43.8 million in fourth quarter 2005, with both rental and sales revenues improving on the continued strength in the educational market. Modular sales revenues for the quarter of $14.4 million included $8.4 million of sales revenues related to hurricane damages in the southeastern U.S. in 2005. The Company views these types of large sale projects as unique opportunities and generally would not expect sale projects of a similar size to occur on a regular basis. Mobile Modular's increase in revenues led to a 37% increase in its pre-tax income to $13.4 million. Looking forward, Mobile Modular does not anticipate additional 2005 hurricane-related rental or sale opportunities of any significance. For the Company's TRS-RenTelco division, fourth quarter 2005 rental revenues increased 1% to $18.6 million from $18.5 million in the prior year's same quarter, and gross profit on rents increased to $8.0 million from $6.6 million a year ago primarily due to lower depreciation expense, contributing to the quarter's pre-tax income increase to $5.5 million from $3.9 million in 2004. Dennis Kakures, President and CEO of McGrath RentCorp, made the following comments regarding these results and future expectations: "Our favorable fourth quarter results were led by another solid year for Mobile Modular and the improving health and profitability of our test equipment business. Our long-term success has been and will continue to be driven by rental revenue growth and improved gross profit on rents. We believe these metrics provide the best gauge of the health and sustainable earnings potential of both Mobile Modular and TRS-RenTelco. "Our success in 2005 was driven by both of our core rental businesses, contributing to a combined 27% annual rental revenue increase to $152.3 million. Mobile Modular rental revenues increased 14% to $81.2 million, which includes our first full-year of Florida rental operations, with gross profit on rents increasing 15% to $51.8 million. TRS-RenTelco rental revenues increased 45% to $71.1 million, primarily as a result of the TRS acquisition in 2004, with gross profit on rents increasing 43% to $27.1 million. "Mobile Modular continued to benefit in 2005 from the recurring rental stream from educational facility rentals in the geographic markets we serve. California had another favorable year in rental revenue growth despite an increased level of classroom returns during the third and fourth quarters related to the completion of a number of modernization projects. In Florida, we continued to make strong progress in growing our customer base of public school districts. Additionally, our Florida hybrid classroom continues to gain popularity in the market place. In Texas, we benefited from both an increased level of classroom rental activity as well as from rentals related to the impact of various hurricanes. "At TRS-RenTelco, although fourth quarter rental revenues were only up slightly compared to a year ago, we managed to increase gross profit on rents by $1.4 million or 22% chiefly through lower depreciation expense and to a lesser degree continuing to improve the cost-effectiveness of our operations. Depreciation expense as a percentage of rents was 44.6% in the fourth quarter of 2005, as compared to 51.5% in the fourth quarter of 2004. The significant decrease in depreciation expense was attributable to the extension of useful life of two test equipment models in the second quarter of 2005, the impact of selling underutilized equipment through more effective management of our rental inventory at the model number level, and rental equipment becoming fully depreciated. "In addition to our favorable rental operations results in 2005, we benefited from unique sales of modular classrooms related to hurricanes in the southeastern U.S., which contributed $0.09 in EPS for the year. We also benefited from a lower effective tax rate in 2005 compared to 2004 as a result of a cumulative deferred tax adjustment for the state income tax accrual rate resulting from our first full-year of TRS operations following the acquisition, which added $0.03 in EPS for the year. "In late 2005, we began an important initiative and investment in our future by upgrading our operating and financial software applications. We believe this investment will benefit us in the years to come by creating information system platforms that provide us the scalability necessary for increased business levels in growing McGrath RentCorp. At this time, we expect this project to be completed in late 2007. "For Mobile Modular in 2006, we are uncertain at this time as to the level of new modernization work that will be commenced. This is a function of the current amount of unallocated and unreleased state funds for modernization from the prior state-wide bond measure, the backlog of applications awaiting funding and the actual commencement of projects. For modernization work beyond 2006, we are increasingly optimistic that a state-wide facilities bond measure in California with significant monies for modernization projects will be placed on the ballot in late 2006. We believe that this bond measure, if passed, along with the success of local bond measures passed in November 2005, should provide monies to support favorable levels of new modernization projects in both 2007 and 2008. Keep in mind, assuming favorable new business levels, compared to future returning equipment, we would expect that it will take at least a few quarters to raise utilization levels of the California classroom rental fleet, as the majority of classroom equipment typically begins to ship late in the second quarter and in the third quarter annually. For Florida, we are well positioned to continue to grow our business levels. We anticipate that we will continue to benefit from student enrollment growth, class size reduction, the phasing out of older coded modular classrooms and broader market acceptance of our hybrid classroom product. Also in 2006, we will begin to develop our Florida property for a regional sales and inventory center to support our growth. "For TRS-RenTelco in 2006, we are anticipating healthier U.S. and Canadian rental markets. Additionally, we should continue to benefit from cost-effectiveness improvement efforts to our operations. Internationally, we will continue the work started in late 2005 on evaluating strategic development opportunities in selective markets in which we are either currently doing business or are considering entering. "Looking forward to 2006, although we are projecting favorable top-line rental revenue growth for both modulars and electronics, our full-year earnings per share guidance is in a range of $1.50 to $1.60 per share. It is important to understand the year to year differences by bridging our actual results for 2005 of $1.61 per share to our 2006 guidance range of $1.50 to $1.60 per share. In 2006, although we expect improved rental operation results, we don't expect any significant sales like those in 2005 related to hurricane damages in the southeastern U.S., which added $0.09 per share. Further, we expect EPS in 2006 to be reduced by $0.09 per share for the estimated impact of stock option expensing required under FAS 123R beginning January 1, 2006 and by $0.04 per share due to a higher estimated effective tax rate of 39.0% compared to 37.5% in 2005, based on the expected 2006 revenue distribution by state. "In summary, I am very pleased with our 2005 results and I believe 2006 will continue to show favorable performance from our core rental operations. Looking ahead, our strategic planning process for evaluating both organic and acquisition opportunities for growth is fully engaged. We are actively assessing our next strategic growth opportunities and preparing our information systems and operating processes to support a growing McGrath RentCorp in the years ahead." FOURTH QUARTER 2005 HIGHLIGHTS (AS COMPARED TO FOURTH QUARTER 2004) -- Rental revenues increased 7% to $40.3 million. Within rental revenues, Mobile Modular increased 13% from $19.1 million to $21.7 million; TRS-RenTelco increased 1% from $18.5 million to $18.6 million, and improved sequentially from the third quarter 2005 level of $18.4 million. -- Sales revenues increased 96% to $28.7 million, resulting primarily from Mobile Modular's increased sales volume, which included $8.4 million of sales revenues related to damages caused by the recent hurricanes. Higher sales volume combined with a lower gross margin percentage, 22.7% in 2005 compared to 29.1% in 2004, resulted in a gross profit increase of $2.3 million. Sales revenues and related gross margins can fluctuate from quarter to quarter depending on customer requirements, equipment availability and funding. -- Depreciation of rental equipment decreased 5% to $11.1 million, with Mobile Modular increasing 28% to $2.8 million from $2.2 million in 2004, and TRS-RenTelco decreasing 13% to $8.3 million from $9.5 million in 2004. The TRS-RenTelco decrease was due to the determination in April 2005 to extend the useful lives on two models of test equipment (quarterly impact of $0.6 million), the selling of underutilized equipment and rental equipment becoming fully depreciated, offset by new equipment purchases. -- Debt increased $8.6 million during the quarter to $163.2 million, with the Company's total liabilities to equity ratio decreasing from 1.80 to 1 at September 30, 2005 to 1.73 to 1 as of December 31, 2005. As of December 31, 2005, the Company, under its lines of credit, had capacity to borrow an additional $91.8 million. -- Dividend rate increased 27% to $0.14 per share for the fourth quarter 2005, as compared to $0.11 per share for the fourth quarter of 2004. On an annualized basis, this dividend represents a 1.7% yield on the February 22, 2006 close price of $32.25. It is suggested that the press release be read in conjunction with the financial statements and notes thereto included in the Company's latest Form 10-K and Forms 10-Q. You can visit the Company's web site at www.mgrc.com to access information on McGrath RentCorp, including the latest filings on Form 10-K and Form 10-Q. FINANCIAL GUIDANCE The Company expects favorable rental revenue growth for both modulars and electronics in 2006, with full-year earnings per share to be in a range of $1.50 to $1.60 per diluted share. In 2006, although we expect improved rental operation results, we don't expect any significant sales like those in 2005 related to hurricane damages in the southeastern U.S., which added $0.09 per share. Further, we expect diluted earnings per share in 2006 to be reduced by $0.09 per share for the estimated impact of stock option expensing required under the adoption of Statement of Financial Standards No. 123R, "Share Based Payment," beginning January 1, 2006 and by $0.04 per share due to a higher estimated effective tax rate of 39.0%, compared to 37.5% in 2005, based on the expected 2006 revenue distribution by state. Such a forward-looking statement reflects McGrath RentCorp's expectations as of February 23, 2006. Actual 2006 full-year earnings per share results may be materially different and affected by many factors, including those factors outlined in the "forward-looking statements" paragraph at the end of this press release. About McGrath RentCorp Founded in 1979, the Company, under the trade name Mobile Modular Management Corporation, rents and sells modular buildings to fulfill customers' temporary and permanent space needs in California, Texas and Florida. Mobile Modular believes it is the largest provider of relocatable classrooms for rental to school districts for grades K - 12 in California. The Company's TRS-RenTelco division rents and sells electronic test equipment and is one of the leading providers of general purpose and communications test equipment in North America. CONFERENCE CALL NOTE: As previously announced in its press release of January 26, 2006, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on February 23, 2006 to discuss the fourth quarter 2006 results. To participate in the teleconference, dial 1-800-218-0204 (in the U.S.), or 1-303-262-2143 (outside the U.S.), or visit the investor relations section of the Company's website at www.mgrc.com. Telephone replay of the call will be available for 48 hours following the call by dialing 1-800-405-2236 (in the U.S.), or 1-303-590-3000 (outside the U.S.). The pass code for the call replay is 11050313. This press release contains statements, which constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to a number of risks and uncertainties. These statements appear in a number of places. Such statements can be identified by the use of forward-looking terminology such as "believes", "expects", "may", "estimates", "will", "should", "plans" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. These include our expectation that our long-term success will continue to be driven by rental revenue growth and improved gross profit on rents, our expectation that our investment in upgrading our operating and financial software applications will benefit us, our expectation that the California state-wide facilities bond measure, if passed in 2006, along with the local school bond measures passed in November 2005 would provide monies to support favorable levels of new modernization projects in California, our expectation regarding raising utilization levels of the California classroom rental fleet assuming favorable business levels, compared to future returning equipment, our expectation that we are positioned to continue to grow our business levels in Florida, and in particular, our expectation that in the Florida market we will benefit from student enrollment growth, class size reduction, the phasing out of older modular classrooms and the broader market acceptance of our hybrid classroom product, our expectation of healthier U.S. and Canadian rental markets in 2006 for TRS-RenTelco, our expectation that internationally we will continue evaluating strategic opportunities in selective markets, our expectation regarding the annual dividend yield, our expectation regarding the 2006 effective tax rate, our expectation regarding the 2006 revenue distribution by state, and our 2006 full-year earnings per share guidance, including our expectations for impacts on our 2006 earnings per share resulting from expected stock option expenses relating to adoption of FASB 123(R), our expectations regarding significant sales like those in 2005 related to hurricane damages in the southeastern U.S., and expected increases in earnings per share from improved rental operations results. These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties. Actual results may vary materially from those in the forward-looking statements as a result of various factors. These factors include the effectiveness of management's strategies and decisions, general economic and business conditions, the condition of the telecommunications industry, new or modified statutory or regulatory requirements, continuing demand for modular products, timely delivery and installation of modular products, delays of future sales projects, changing prices and market conditions. There may be other factors not listed above that could cause actual results to vary materially from the forward-looking statements described in this press release. MCGRATH RENTCORP CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in thousands, except per share amounts) - ---------------------------------------------------------------------- Three Months Ended Twelve Months Ended December 31, December 31, -------------------- ------------------- 2005 2004 2005 2004 - -------------------------------------- --------- --------- --------- REVENUES - -------- Rental $40,316 $37,662 $152,316 $120,358 Rental Related Services 8,021 6,389 26,460 23,347 --------- --------- --------- --------- Rental Operations 48,337 44,051 178,776 143,705 Sales 28,730 14,673 90,823 57,162 Other 548 588 2,581 1,653 --------- --------- --------- --------- Total Revenues 77,615 59,312 272,180 202,520 --------- --------- --------- --------- COSTS AND EXPENSES - ------------------ Direct Costs of Rental Operations Depreciation of Rental Equipment 11,088 11,701 44,178 32,426 Rental Related Services 5,687 4,926 17,893 15,172 Other 7,230 6,793 29,292 24,007 --------- --------- --------- --------- Total Direct Costs of Rental Operations 24,005 23,420 91,363 71,605 Costs of Sales 22,203 10,405 67,378 43,134 --------- --------- --------- --------- Total Costs 46,208 33,825 158,741 114,739 --------- --------- --------- --------- Gross Profit 31,407 25,487 113,439 87,781 Selling and Administrative 10,295 10,411 39,819 33,705 --------- --------- --------- --------- Income from Operations 21,112 15,076 73,620 54,076 Interest 2,164 1,664 7,890 5,188 --------- --------- --------- --------- Income Before Provision for Income Taxes 18,948 13,412 65,730 48,888 Provision for Income Taxes 6,872 4,688 24,649 18,843 --------- --------- --------- --------- Income Before Minority Interest 12,076 8,724 41,081 30,045 Minority Interest in Income of Subsidiary (29) (34) 262 48 Net Income $12,105 $ 8,758 $ 40,819 $ 29,997 ========= ========= ========= ========= Earnings Per Share: Basic $ 0.49 $ 0.36 $ 1.65 $ 1.23 Diluted $ 0.47 $ 0.35 $ 1.61 $ 1.21 Shares Used in Per Share Calculation: Basic 24,795 24,464 24,668 24,344 Diluted 25,542 25,020 25,331 24,804 MCGRATH RENTCORP CONSOLIDATED BALANCE SHEETS (UNAUDITED) - ---------------------------------------------------------------------- December 31, ------------------- (in thousands) 2005 2004 - ---------------------------------------------------------------------- Assets - ------ Cash $ 276 $ 189 Accounts Receivable, net of allowance for doubtful accounts of $1,000 in 2005 and $900 in 2004 63,702 53,846 Rental Equipment, at cost: Relocatable Modular Buildings 408,227 339,537 Electronic Test Instruments 154,708 149,437 ---------- ----------- 562,935 488,974 Less Accumulated Depreciation (156,502) (131,186) ---------- ----------- Rental Equipment, net 406,433 357,788 ---------- ----------- Property, Plant and Equipment, net 56,008 47,750 Prepaid Expenses and Other Assets 16,019 14,707 ---------- ----------- Total Assets $542,438 $474,280 ========== =========== Liabilities and Shareholders' Equity - ------------------------------------ Liabilities: Notes Payable $163,232 $151,888 Accounts Payable and Accrued Liabilities 51,690 39,460 Deferred Income 27,410 24,377 Minority Interest in Subsidiary 3,199 2,937 Deferred Income Taxes, net 98,438 88,730 ---------- ----------- Total Liabilities 343,969 307,392 ---------- ----------- Shareholders' Equity: Common Stock, no par value -- Authorized -- 40,000 shares Issued and Outstanding -- 24,832 shares in 2005 and 24,543 shares in 2004 26,224 21,586 Retained Earnings 172,245 145,302 ---------- ----------- Total Shareholders' Equity 198,469 166,888 ---------- ----------- Total Liabilities and Shareholders' Equity $542,438 $474,280 ========== =========== MCGRATH RENTCORP CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - ---------------------------------------------------------------------- Year Ended December 31, ------------------------ (in thousands) 2005 2004 - ---------------------------------------------------------------------- Cash Flow from Operating Activities: Net Income $40,819 $29,997 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 46,433 34,501 Provision for Doubtful Accounts 845 303 Noncash Compensation 44 57 Gain on Sale of Rental Equipment (9,662) (8,532) Change In: Accounts Receivable (10,701) (8,370) Prepaid Expenses and Other Assets (1,312) (2,348) Accounts Payable and Accrued Liabilities 2,646 6,231 Deferred Income 3,033 761 Deferred Income Taxes 9,708 9,672 --------- --------- Net Cash Provided by Operating Activities 81,853 62,272 --------- --------- Cash Flow from Investing Activities: Acquisition of TRS -- (120,209) Purchase of Rental Equipment (105,501) (65,706) Purchase of Property, Plant and Equipment (10,512) (1,347) Proceeds from Sale of Rental Equipment 31,406 27,422 --------- --------- Net Cash Used in Investing Activities (84,607) (159,840) --------- --------- Cash Flow from Financing Activities: Net Borrowings (Repayments) Under Bank Lines of Credit 11,344 44,622 Borrowings Under Private Placement -- 60,000 Proceeds from the Exercise of Stock Options, net 4,595 3,630 Repurchase of Common Stock (30) (40) Payment of Dividends (13,068) (10,459) --------- --------- Net Cash Provided By Financing Activities 2,841 97,753 --------- --------- Net Increase in Cash 87 185 Cash Balance, beginning of period 189 4 --------- --------- Cash Balance, end of period $276 $189 ========= ========= Interest Paid, during the period $7,799 $5,518 ========= ========= Income Taxes Paid, during the period $22,871 $8,355 ========= ========= Dividends Declared, not yet paid $3,479 $2,700 ========= ========= Rental Equipment Acquisitions, not yet paid $14,694 $5,625 ========= ========= Mobile Modular Segment - Three Months 2005 compared to Three Months 2004 (Unaudited) - ---------------------------------------------------------------------- (dollar amounts in thousands) Three Months Ended 2005 over 2004 --------------- 12/31/2005 12/31/2004 $ % ----------------------------------------- Revenues - -------- Rental Revenues $21,682 $19,146 $2,536 13% Rental Related Services 7,604 5,903 1,701 29% -------------------------------- Rental Operations 29,286 25,049 4,237 17% Sales 14,377 5,573 8,804 158% Other 162 107 55 51% -------------------------------- Total Revenues 43,825 30,729 13,096 43% -------------------------------- Gross Profit - ------------ Rental Revenues 13,963 12,576 1,387 11% Rental Related Services 2,240 1,287 953 74% -------------------------------- Rental Operations 16,203 13,863 2,340 17% Sales 3,793 1,558 2,235 143% Other 162 107 55 51% -------------------------------- Total Gross Profit 20,158 15,528 4,630 30% -------------------------------- -------------------------------- Pretax Income $13,393 $9,761 $3,632 37% -------------------------------- Other Information - ----------------- Depreciation of Rental Equipment $2,773 $2,173 $600 28% Interest Expense Allocation 1,590 1,145 445 39% Average Rental Equipment (1) 363,768 317,667 46,101 15% Average Rental Equipment on Rent (1) 305,008 274,168 30,840 11% Average Monthly Total Yield (2) 1.99% 2.01% -1% Average Utilization (3) 83.8% 86.3% -3% Average Monthly Rental Rate (4) 2.37% 2.33% 2% Period End Rental Equipment (1) $366,253 $321,203 $45,050 14% Period End Utilization (3) 83.5% 86.1% -3% 1 Average and period end rental equipment represents the cost of rental equipment excluding new equipment inventory and accessory equipment. 2 Average monthly total yield is calculated by dividing the averages of monthly rents by the cost of rental equipment, for the period. 3 Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment excluding new equipment inventory and accessory equipment. Average utilization for the period is calculated using the average costs of the rental equipment. 4 Average monthly rental rate is calculated by dividing the averages of monthly rents by the cost of rental equipment on rent, for the period. TRS-RenTelco Segment - Three Months 2005 compared to Three Months 2004 (Unaudited) - ---------------------------------------------------------------------- (dollar amounts in thousands) Three Months Ended 2005 over2004 --------------- 12/31/2005 12/31/2004 $ % ------------------------------------------ Revenues - -------- Rental Revenues $18,634 $18,516 $118 1% Rental Related Services 417 486 (69) -14% --------------------------------- Rental Operations 19,051 19,002 49 -- Sales 12,128 7,695 4,433 58% Other 386 481 (95) -20% --------------------------------- Total Revenues $31,565 $27,178 $4,387 16% --------------------------------- Gross Profit - ------------ Rental Revenues $8,035 $6,592 $1,443 22% Rental Related Services 94 176 (82) -47% --------------------------------- Rental Operations 8,129 6,768 1,361 20% Sales 2,277 2,392 (115) -5% Other 386 481 (95) -20% --------------------------------- Total Gross Profit $10,792 $9,641 $1,151 12% --------------------------------- --------------------------------- Pretax Income $5,490 $3,887 $1,603 41% --------------------------------- Other Information - ----------------- Depreciation of Rental Equipment $8,315 $9,528 $(1,213) -13% Interest Expense Allocation 665 578 87 15% Average Rental Equipment (1) 153,094 147,408 5,686 4% Average Rental Equipment on Rent (1) 108,007 94,239 13,768 15% Average Monthly Total Yield (2) 4.06% 4.19% -3% Average Utilization (3) 70.5% 63.9% 10% Average Monthly Rental Rate (4) 5.75% 6.55% -12% Period End Rental Equipment (1) $154,119 $148,014 $6,105 4% Period End Utilization (3) 68.9% 61.6% 12% 1 Average and period end rental equipment represents the cost of rental equipment excluding accessory equipment. 2 Average monthly total yield is calculated by dividing the averages of monthly rents by the cost of rental equipment, for the period. 3 Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment excluding accessory equipment. Average utilization for the period is calculated using the average costs of the rental equipment. 4 Average monthly rental rate is calculated by dividing the averages of monthly rents by the cost of rental equipment on rent, for the period. Mobile Modular Segment - Twelve Months 2005 compared to Twelve Months 2004 (Unaudited) - ---------------------------------------------------------------------- (dollar amounts in thousands) Twelve Months Ended 2005 over 2004 ---------------- 12/31/2005 12/31/2004 $ % ------------------------------------------ Revenues - -------- Rental Revenues $81,180 $71,460 $9,720 14% Rental Related Services 25,053 22,142 2,911 13% --------------------------------- Rental Operations 106,233 93,602 12,631 13% Sales 49,107 27,617 21,490 78% Other 625 444 181 41% --------------------------------- Total Revenues 155,965 121,663 34,302 28% --------------------------------- Gross Profit - ------------ Rental Revenues 51,756 45,002 6,754 15% Rental Related Services 8,259 7,751 508 7% --------------------------------- Rental Operations 60,015 52,753 7,262 14% Sales 12,100 6,615 5,485 83% Other 625 444 181 41% --------------------------------- Total Gross Profit 72,740 59,812 12,928 22% --------------------------------- --------------------------------- Pretax Income $46,794 $37,850 $8,944 24% --------------------------------- Other Information - ----------------- Depreciation of Rental Equipment 9,587 8,374 1,213 14% Interest Expense Allocation 5,679 3,947 1,732 44% Average Rental Equipment (1) $341,103 $303,294 $37,809 12% Average Rental Equipment on Rent (1) $289,584 $259,598 $29,986 12% Average Monthly Total Yield (2) 1.98% 1.96% 1% Average Utilization (3) 84.9% 85.6% -1% Average Monthly Rental Rate (4) 2.34% 2.29% 2% Period End Rental Equipment (1) $366,253 $321,203 $45,050 14% Period End Utilization (3) 83.5% 86.1% -3% 1 Average and period end rental equipment represents the cost of rental equipment excluding new equipment inventory and accessory equipment. 2 Average monthly total yield is calculated by dividing the averages of monthly rents by the cost of rental equipment, for the period. 3 Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment excluding new equipment inventory and accessory equipment. Average utilization for the period is calculated using the average costs of the rental equipment. 4 Average monthly rental rate is calculated by dividing the averages of monthly rents by the cost of rental equipment on rent, for the period. TRS-RenTelco Segment - Twelve Months 2005 compared to Twelve Months 2004 (Unaudited) - ---------------------------------------------------------------------- (dollar amounts in thousands) Twelve Months Ended 2005 over 2004 ---------------- 12/31/2005 12/31/2004 $ % ------------------------------------------ Revenues - -------- Rental Revenues $71,136 $48,898 $22,238 45% Rental Related Services 1,407 1,205 202 17% --------------------------------- Rental Operations 72,543 50,103 22,440 45% Sales 31,154 20,291 10,863 54% Other 1,956 1,209 747 62% --------------------------------- Total Revenues $105,653 $71,603 $34,050 48% --------------------------------- Gross Profit - ------------ Rental Revenues $27,090 $18,923 $8,167 43% Rental Related Services 308 424 (116) -27% --------------------------------- Rental Operations 27,398 19,347 8,051 42% Sales 7,689 5,430 2,259 42% Other 1,956 1,209 747 62% --------------------------------- Total Gross Profit $37,043 $25,986 $11,057 43% --------------------------------- --------------------------------- Pretax Income $17,211 $10,718 $6,493 61% --------------------------------- Other Information - ----------------- Depreciation of Rental Equipment 34,591 24,052 10,539 44% Interest Expense Allocation 2,475 1,412 1,063 75% Average Rental Equipment (1) $151,087 $93,387 $57,700 62% Average Rental Equipment on Rent (1) $99,980 $57,608 $42,372 74% Average Monthly Total Yield (2) 3.92% 4.36% -10% Average Utilization (3) 66.2% 61.7% 7% Average Monthly Rental Rate (4) 5.93% 7.07% -16% Period End Rental Equipment (1) $154,119 $148,014 $6,105 4% Period End Utilization (3) 68.9% 61.6% 12% 1 Average and period end rental equipment represents the cost of rental equipment excluding accessory equipment. 2 Average monthly total yield is calculated by dividing the averages of monthly rents by the cost of rental equipment, for the period. 3 Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment excluding accessory equipment. Average utilization for the period is calculated using the average costs of the rental equipment. 4 Average monthly rental rate is calculated by dividing the averages of monthly rents by the cost of rental equipment on rent, for the period. CONTACT: McGrath RentCorp Thomas J. Sauer, 925-606-9200 -----END PRIVACY-ENHANCED MESSAGE-----