Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Reporting

NOTE 12. SEGMENT REPORTING

FASB guidelines establish annual and interim reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers.  In accordance with these guidelines the Company’s four reportable segments are Mobile Modular, TRS-RenTelco, Adler Tanks and Enviroplex. Management focuses on several key measures to evaluate and assess each segment’s performance including rental revenue growth, gross margin, 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 amongst Mobile Modular, TRS-RenTelco and Adler Tanks based on their pro-rata share of average rental equipment at cost, goodwill, 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 years ended December 31, 2021, 2020 and 2019, for the Company’s reportable segments is shown in the following tables:

(dollar amounts in thousands)	Mobile Modular			TRS- RenTelco			Adler Tanks			Enviroplex 1			Consolidated
Year Ended December 31,
2021
Rental revenues	$	220,569		$	113,419		$	56,025		$	—		$	390,013
Rental related services revenues		72,330			2,880			22,851		—				98,061
Sales and other revenues		70,417			23,895			3,366			31,081			128,759
Total revenues		363,316			140,194			82,242			31,081			616,833
Depreciation of rental equipment		28,071			47,374			16,442		—				91,887
Gross profit		176,040			61,394			33,699			9,888			281,021
Selling and administrative expenses		92,603			25,152			25,542			5,303			148,600
Income from operations		83,436			36,243			8,157			4,585			132,421
Interest expense (income) allocation		6,433			2,270			2,211			(459	)		10,455
Income before provision for income taxes		77,003			33,763			5,946			5,044			121,756
Adjusted EBITDA		128,044			85,723			27,961			4,844			246,572
Rental equipment acquisitions		188,392			61,097			191		—				249,680
Accounts receivable, net (period end)		112,295			22,115			16,378			8,711			159,499
Rental equipment, at cost (period end)		1,040,094			361,391			309,908		—				1,711,393
Rental equipment, net book value (period end)		751,537			161,900			151,787		—				1,065,224
Utilization (period end) 2		76.4	%		62.9	%		47.6	%
Average utilization 2		76.2	%		67.0	%		45.4	%

Segment Data (Continued) (dollar amounts in thousands)	Mobile Modular			TRS- RenTelco			Adler Tanks			Enviroplex 1			Consolidated
Year Ended December 31,
2020
Rental revenues	$	188,719		$	109,083		$	53,988		$	—		$	351,790
Rental related services revenues		67,527			3,080			21,786		—				92,393
Sales and other revenues		65,278			28,648			1,708			32,737			128,371
Total revenues		321,524			140,811			77,482			32,737			572,554
Depreciation of rental equipment		22,967			46,472			16,427		—				85,866
Gross profit		155,874			60,864			34,079			12,929			263,746
Selling and administrative expenses		68,470			24,306			24,764			5,453			122,993
Income from operations		87,404			36,558			9,315			7,476			140,753
Interest expense (income) allocation		5,104			2,133			2,107			(557	)		8,787
Income before benefit for income taxes		82,300			34,503			7,208			8,033			132,044
Adjusted EBITDA		119,202			85,082			29,010			7,729			241,023
Rental equipment acquisitions		39,078			42,588			2,541		—				84,207
Accounts receivable, net (period end)		81,640			22,735			13,655			5,286			123,316
Rental equipment, at cost (period end)		882,115			333,020			315,706		—				1,530,841
Rental equipment, net book value (period end)		611,590			156,536			169,990		—				938,116
Utilization (period end) 2		76.0	%		67.4	%		39.8	%
Average utilization 2		77.2	%		66.2	%		44.6	%
2019
Rental revenues	$	182,316		$	103,704		$	67,869		$	—		$	353,889
Rental related services revenues		69,395			3,260			28,383		—				101,038
Sales and other revenues		49,299			24,519			1,671			39,814			115,303
Total revenues		301,010			131,483			97,923			39,814			570,230
Depreciation of rental equipment		22,071			41,948			16,372		—				80,391
Gross profit		143,618			60,748			47,014			14,785			266,165
Selling and administrative expenses		65,699			24,645			29,321			5,128			124,793
Income from operations		77,919			36,103			17,693			9,657			141,372
Interest expense (income) allocation		7,946			1,970			3,436			(1,021	)		12,331
Income before benefit for income taxes		69,973			34,217			14,257			10,678			129,125
Adjusted EBITDA		107,166			80,772			38,993			9,892			236,823
Rental equipment acquisitions		75,433			89,759			4,826		—				170,018
Accounts receivable, net (period end)		83,182			23,788			17,281			3,848			128,099
Rental equipment, at cost (period end)		868,807			335,343			316,261		—				1,520,411
Rental equipment, net book value (period end)		610,048			172,413			185,039		—				967,500
Utilization (period end) 2		79.1	%		64.5	%		48.4	%
Average utilization 2		79.2	%		66.2	%		54.7	%

1Gross Enviroplex sales revenues were $32,095, $34,014 and $39,814 in 2021, 2020 and 2019, respectively.  There were $1,014 and $1,277 inter-segment sales to Mobile Modular in 2021 and 2020, which have been eliminated in consolidation.  There were no inter-segment sales in 2019.

2Utilization is calculated each month by dividing the cost of rental equipment on rent by the total cost of rental equipment excluding new equipment inventory and accessory equipment.  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 during 2021, 2020 and 2019.  Revenue from foreign country customers accounted for 4%, 4% and 5% of the Company’s revenues for the same periods, respectively.