Segment Reporting

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Reporting

NOTE 7. SEGMENT REPORTING

The Company’s four reportable segments are (1) its modular building rental division (“Mobile Modular”); (2) its electronic test equipment rental division (“TRS-RenTelco”); (3) its containment solutions for the storage of hazardous and non-hazardous liquids and solids division (“Adler Tanks”); and (4) its classroom manufacturing division selling modular buildings used primarily as classrooms in California (“Enviroplex”). The operations of each of these segments are described in Part I – Item 1, “Business,” and the accounting policies of the segments are described in “Note 2 – Significant Accounting Policies” in the Company’s annual report on Form 10-K for the year ended December 31, 2013. Management focuses on several key measures to evaluate and assess each segment’s performance, including rental revenue growth, gross profit, income from operations and income before provision for income taxes. Excluding interest expense, allocations of revenue and expense not directly associated with one of these segments are generally allocated to Mobile Modular, TRS-RenTelco and Adler Tanks based on their pro-rata share of direct revenues. Interest expense is allocated among Mobile Modular, TRS-RenTelco and Adler Tanks based on their pro-rata share of average rental equipment at cost, intangible assets, accounts receivable, deferred income and customer security deposits. The Company does not report total assets by business segment. Summarized financial information for the six months ended June 30, 2014 and 2013 for the Company’s reportable segments is shown in the following table:

(dollar amounts in thousands)	Mobile Modular			TRS- RenTelco			Adler Tanks			Enviroplex 1			Consolidated
Six Months Ended June 30,
2014
Rental Revenues	$	44,212		$	48,184		$	35,843		$	—		$	128,239
Rental Related Services Revenues		15,328			1,617			11,713			—			28,658
Sales and Other Revenues		11,415			11,977			769			2,247			26,408
Total Revenues		70,955			61,778			48,325			2,247			183,305
Depreciation of Rental Equipment		7,842			20,539			7,440			—			35,821
Gross Profit		25,774			28,138			26,060			745			80,717
Selling and Administrative Expenses		19,830			12,004			13,836			1,581			47,251
Income (Loss) from Operations		5,944			16,134			12,224			(836	)		33,466
Interest Expense (Income) Allocation		2,290			1,053			1,284			(89	)		4,538
Gain on Sale of Property, Plant and Equipment		341			276			195			—			812
Income (Loss) before Provision for Income Taxes		3,995			15,347			11,135			(747	)		29,730
Rental Equipment Acquisitions		38,177			18,387			15,092			—			71,656
Accounts Receivable, net (period end)		42,947			22,500			21,057			2,580			89,084
Rental Equipment, at cost (period end)		626,457			259,907			298,248			—			1,184,612
Rental Equipment, net book value (period end)		443,086			103,816			248,630			—			795,532
Utilization (period end) 2		71.6	%		62.2	%		61.5	%
Average Utilization 2		70.2	%		58.3	%		61.8	%
2013
Rental Revenues	$	39,288		$	50,179		$	34,177		$	—		$	123,644
Rental Related Services Revenues		12,491			1,412			9,603			—			23,506
Sales and Other Revenues		6,715			14,252			1,354			6,427			28,748
Total Revenues		58,494			65,843			45,134			6,427			175,898
Depreciation of Rental Equipment		7,089			19,474			6,665			—			33,228
Gross Profit		22,894			31,010			24,557			735			79,196
Selling and Administrative Expenses		17,371			12,400			12,097			1,562			43,430
Income (Loss) from Operations		5,523			18,610			12,460			(827	)		35,766
Interest Expense (Income) Allocation		2,158			1,089			1,213			(100	)		4,360
Income (Loss) before Provision for Income Taxes		3,365			17,469			11,247			(727	)		31,354
Rental Equipment Acquisitions		21,521			22,655			15,853			—			60,029
Accounts Receivable, net (period end)		37,573			22,750			24,139			2,824			87,286
Rental Equipment, at cost (period end)		570,352			264,429			269,437			—			1,104,218
Rental Equipment, net book value (period end)		397,702			105,869			234,065			—			737,636
Utilization (period end) 2		67.6	%		63.3	%		68.7	%
Average Utilization 2		66.7	%		63.7	%		65.5	%

1. Gross Enviroplex sales revenues were $3,323 and $6,430 for the six months ended June 30, 2014 and 2013, respectively, which includes inter-segment sales to Mobile Modular of $1,076 and $3, respectively, which have been eliminated in consolidation.

2. Utilization is calculated each month by dividing the cost of rental equipment on rent by the total cost of rental equipment excluding accessory equipment and for Mobile Modular and Adler Tanks excluding new equipment inventory. The Average Utilization for the period is calculated using the average costs of rental equipment.

No single customer accounted for more than 10% of total revenues for the six months ended June 30, 2014 and 2013. Revenues from foreign country customers accounted for 6% and 8% of the Company’s total revenues, respectively, for the same periods.