Segment Reporting

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment Reporting

NOTE 5. 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, 2014. 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, 2015 and 2014 for the Company’s reportable segments is shown in the following table:

(dollar amounts in thousands)	Mobile Modular			TRS- RenTelco			Adler Tanks			Enviroplex1			Consolidated
Nine Months Ended September 30,
2015
Rental revenues	$	84,242		$	66,612		$	52,148		$	—		$	203,002
Rental related services revenues		33,904			2,271			18,281			—			54,456
Sales and other revenues		15,971			16,385			1,082			8,366			41,804
Total revenues		134,117			85,268			71,511			8,366			299,262
Depreciation of rental equipment		14,218			30,335			11,954			—			56,507
Gross profit		56,263			35,293			36,383			2,212			130,151
Selling and administrative expenses		34,436			17,059			20,755			2,411			74,661
Income (loss) from operations		21,827			18,234			15,628			(199	)		55,490
Interest (expense) income allocation		(3,790	)		(1,580	)		(1,953	)		141			(7,182	)
Income (loss) before provision for income taxes		18,037			16,200			13,675			(58	)		47,854
Rental equipment acquisitions		59,501			37,822			8,328			—			105,651
Accounts receivable, net (period end)		60,132			23,649			20,312			3,467			107,560
Rental equipment, at cost (period end)		717,892			266,034			309,779			—			1,293,705
Rental equipment, net book value (period end)		515,207			107,801			241,269			—			864,277
Utilization (period end) 2		77.9	%		60.5	%		57.0	%
Average utilization 2		75.3	%		60.2	%		59.9	%
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	%

1. Gross Enviroplex sales revenues were $9,077 and $12,133 for the nine months ended September 30, 2015 and 2014, respectively, which includes inter-segment sales to Mobile Modular of $711 and $1,532, 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, 2015 and 2014. Revenues from foreign country customers accounted for 5% and 4% of the Company’s total revenues for the same periods, respectively.