Segment Reporting

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Reporting

NOTE 6. SEGMENT REPORTING

The Company’s four reportable segments are (1) its modular building and portable storage container rental segment (“Mobile Modular”); (2) its electronic test equipment segment (“TRS-RenTelco”); (3) its containment solutions for the storage of hazardous and non-hazardous liquids and solids segment (“Adler Tanks”); and (4) its classroom manufacturing segment 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 1 – Summary of Significant Accounting Policies” in the Company’s 2020 A

nnual Report. 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, 2021 and 2020 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,
2021
Rental revenues	$	159,118		$	84,340		$	40,479		$        —		$	283,937
Rental related services revenues		54,726			2,149			16,995		—			73,870
Sales and other revenues		49,770			15,971			2,477			14,897		83,115
Total revenues		263,614			102,460			59,951			14,897		440,922
Depreciation of rental equipment		20,437			35,429			12,350		—			68,216
Gross profit		125,357			44,867			24,167			4,362		198,753
Selling and administrative expenses		67,977			18,381			18,853			4,094		109,305
Income from operations		57,380			26,486			5,314			268		89,448
Interest (expense) income allocation		(4,401	)		(1,588	)		(1,560	)		341		(7,208	)
Income before provision for income taxes		52,979			24,713			3,754			609		82,055
Rental equipment acquisitions		162,579			53,161			164		—			215,904
Accounts receivable, net (period end)		118,467			24,854			16,062			9,448		168,831
Rental equipment, at cost (period end)		1,023,344			363,799			311,677		—			1,698,820
Rental equipment, net book value (period end)		737,807			169,250			156,405		—			1,063,462
Utilization (period end) 2		76.7	%		66.9	%		50.4	%
Average utilization 2		76.0	%		67.4	%		44.0	%
2020
Rental revenues	$	141,172		$	81,167		$	40,934		$        —		$	263,273
Rental related services revenues		51,291			2,296			16,439		—			70,026
Sales and other revenues		52,910			19,535			1,214			16,616		90,275
Total revenues		245,373			102,998			58,587			16,616		423,574
Depreciation of rental equipment		17,177			35,129			12,334		—			64,640
Gross profit		116,928			43,921			26,116			6,128		193,093
Selling and administrative expenses		52,014			18,198			18,998			4,155		93,365
Income from operations		64,914			25,723			7,118			1,973		99,728
Interest (expense) income allocation		(3,982	)		(1,606	)		(1,651	)		435		(6,804	)
Income before provision for income taxes		60,932			23,928			5,467			2,408		92,735
Rental equipment acquisitions		31,667			31,643			1,680		—			64,990
Accounts receivable, net (period end)		85,033			23,758			14,567			6,075		129,433
Rental equipment, at cost (period end)		885,314			335,520			316,110		—			1,536,944
Rental equipment, net book value (period end)		613,357			161,120			173,648		—			948,125
Utilization (period end) 2		76.5	%		68.4	%		45.5	%
Average utilization 2		77.5	%		65.6	%		45.5	%

1. Gross Enviroplex sales revenues were $15,909 and $17,892 for the nine months ended September 30, 2021 and 2020, respectively. There were $1,012 and $1,276 inter-segment sales to Mobile Modular in the nine months ended September 30, 2021 and 2020, respectively, which required elimination 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, 2021 and 2020. Revenues from foreign country customers accounted for 4% and 2% of the Company’s total revenues for the same periods, respectively.