Segment Reporting

9 Months Ended

Sep. 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 nine months ended September 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
Nine Months Ended September 30,
2014
Rental Revenues	$	69,644		$	73,665		$	54,572		$	—		$	197,881
Rental Related Services Revenues		25,493			2,463			18,573			—			46,529
Sales and Other Revenues		22,057			18,369			893			10,601			51,920
Total Revenues		117,194			94,497			74,038			10,601			296,330
Depreciation of Rental Equipment		12,114			30,709			11,296			—			54,119
Gross Profit		43,296			43,916			39,779			3,024			130,015
Selling and Administrative Expenses		30,786			17,848			20,338			2,479			71,451
Income from Operations		12,510			26,068			19,441			545			58,564
Interest Expense (Income) Allocation		3,524			1,584			1,950			(134	)		6,924
Gain on Sale of Property, Plant and Equipment		341			276			195			—			812
Income before Provision for Income Taxes		9,327			24,647			17,686			679			52,339
Rental Equipment Acquisitions		65,100			32,903			19,088			—			117,091
Accounts Receivable, net (period end)		55,525			22,228			21,190			4,627			103,570
Rental Equipment, at cost (period end)		649,206			263,712			302,168			—			1,215,086
Rental Equipment, net book value (period end)		462,722			106,460			248,716			—			817,898
Utilization (period end) 2		74.2	%		64.2	%		65.1	%
Average Utilization 2		71.4	%		59.6	%		62.2	%
2013
Rental Revenues	$	60,367		$	75,897		$	53,321		$	—		$	189,585
Rental Related Services Revenues		21,009			2,285			16,070			—			39,364
Sales and Other Revenues		16,806			21,547			1,509			15,926			55,788
Total Revenues		98,182			99,729			70,900			15,926			284,737
Depreciation of Rental Equipment		10,740			29,538			10,183			—			50,461
Gross Profit		34,881			46,256			39,442			3,806			124,385
Selling and Administrative Expenses		26,809			18,123			18,475			2,406			65,813
Income from Operations		8,072			28,133			20,967			1,400			58,572
Interest Expense (Income) Allocation		3,238			1,619			1,799			(148	)		6,508
Income before Provision for Income Taxes		4,834			26,483			19,168			1,548			52,033
Rental Equipment Acquisitions		36,463			40,444			24,504			—			101,411
Accounts Receivable, net (period end)		41,818			24,454			23,792			2,755			92,819
Rental Equipment, at cost (period end)		577,898			270,164			277,972			—			1,126,034
Rental Equipment, net book value (period end)		404,045			110,657			239,108			—			753,810
Utilization (period end) 2		70.4	%		62.3	%		64.6	%
Average Utilization 2		67.6	%		63.3	%		65.7	%

1. Gross Enviroplex sales revenues were $12,133 and $15,930 for the nine months ended September 30, 2014 and 2013, respectively, which includes inter-segment sales to Mobile Modular of $1,532 and $4, 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 nine months ended September 30, 2014 and 2013. Revenues from foreign country customers accounted for 4% and 6% of the Company’s total revenues, respectively, for the same periods.