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| 8-K - CAI INTERNATIONAL, INC. 8-K - CAI International, Inc. | a50801242.htm |
Exhibit 99.1
CAI International, Inc. Reports Results for the Fourth Quarter and Full Year of 2013
SAN FRANCISCO--(BUSINESS WIRE)--February 10, 2014--CAI International, Inc. (CAI) (NYSE: CAP), one of the world’s leading lessors of intermodal freight containers, today reported results for the fourth quarter and full year of 2013.
Highlights
- CAI reported net income attributable to CAI common stockholders for the year ended December 31, 2013 of $63.9 million, an increase of 1% compared to 2012.
- CAI reported net income attributable to CAI common stockholders for the fourth quarter of 2013 of $15.6 million, a decrease of 10% compared to $17.4 million for the fourth quarter of 2012.
- CAI reported rental revenue for the fourth quarter of 2013 of $50.9 million, an increase of $5.9 million, or 13%, compared to the fourth quarter of 2012, and $0.2 million compared to the third quarter of 2013, the 15th consecutive quarter of record rental revenue.
- During the quarter CAI entered into a sale and lease back transaction with a customer for approximately 6,000 TEUs of containers.
Net income attributable to CAI common stockholders for the fourth quarter of 2013 decreased by 10% to $15.6 million (or $0.69 per fully diluted share), from $17.4 million (or $0.85 per fully diluted share) for the fourth quarter of 2012. Net income per share was impacted by a 10% increase in the number of fully diluted shares outstanding during the quarter, compared to the fourth quarter of 2012.
Net income attributable to CAI common stockholders for the year ended December 31, 2013 increased by 1% to $63.9 million (or $2.82 per fully diluted share) from $63.5 million (or $3.18 per fully diluted share) for the year ended December 31, 2012.
Total revenue for the fourth quarter of 2013 was $54.6 million, compared to $49.9 million for the fourth quarter of 2012, an increase of 9%. Rental revenue for the fourth quarter of 2013 was $50.9 million, compared to $44.9 million for the fourth quarter of 2012. The increase in rental revenue was primarily due to an increase in the average number of TEUs of owned containers on lease. Management fee revenue for the fourth quarter of 2013 was $1.8 million, compared to $2.4 million for the fourth quarter of 2012, reflecting the reduction in the size of the managed fleet as CAI has acquired a number of its previously managed portfolios during the last twelve months. Finance lease income for the fourth quarter of 2013 was $1.9 million, compared to $2.5 million in the fourth quarter of 2012, as a result of the reclassification of certain leases during the second quarter of 2013.
Total revenue for the year ended December 31, 2013 was $212.4 million, compared to $173.9 million for the year ended December 31, 2012, an increase of 22%. Rental revenue for the year ended December 31, 2013 was $196.6 million, compared to $153.0 million for the prior year, an increase of 29%. The increase in rental revenue was primarily due to an increase in the average number of TEUs of owned containers on lease. Management fee revenue for 2013 was $7.9 million, compared to $12.1 million for 2012, reflecting the continued reduction in the size of the managed fleet. There were no sales of container portfolios, and therefore no gain on sale, during 2013, compared to a gain on sale of $1.3 million in 2012. Finance lease income for 2013 was $7.9 million, compared to $7.6 million in the prior year.
Victor Garcia, Chief Executive Officer of CAI, commented, “We are pleased with the results of our company during 2013, particularly given the challenging market conditions. We continue to see growth in rental revenue, however this growth was impacted in the second half of the year when we did not experience the traditional peak season demand normally seen during the third quarter. Our overall utilization (on a CEU basis) decreased slightly, from 93% in the third quarter to 92% in the fourth quarter, reflecting the normal seasonal slowdown in demand towards the end of the year. The decline in utilization, however, was less than we would typically expect, which we believe reflects the continued relatively tight supply and demand for containers. Utilization during the month of January was effectively unchanged from December at 91.3%. The units being returned are largely older units that are eligible and targeted for sale. Pricing during the quarter remained aggressive but inventory levels at the factories have declined significantly from approximately 1 million TEUs during April and May of last year to approximately 600,000 TEUs at the end of the year. We believe that the current lower level of inventory has resulted in some recent increases in per diem rates. We have also experienced significantly stronger demand for new equipment in January of this year as compared to January of last year, which we view very positively. In January 2013, customers booked equipment but did not pick up units for several months. This January, however, customers have booked equipment and picked up the units in the same month. Demand was particularly strong in the southern China ports, which we believe tend to be more driven by export cargoes.”
Mr. Garcia continued, “Our net income this quarter was $15.6 million, an increase from the prior quarter, but a reduction of 10% compared to last year. Storage costs were higher compared to the same quarter a year ago, reflecting the larger fleet we operate and the lower utilization rate. Gain on sale of equipment was also lower this quarter compared to the same period last year, due largely to an increase in the average book value of equipment sold. We have already begun implementing several initiatives, including hiring additional marketing staff, that over the coming quarters are expected to further increase our sales volume, reduce our depot inventory in low demand areas, and improve our overall utilization. In the fourth quarter we increased sales of equipment from our owned fleet by 79% on a TEU basis as compared to the third quarter of 2013. Our results this quarter were also impacted by the inclusion of the minority interest associated with our Japanese subsidiary, CAIJ, but benefited from lower employee related costs.”
Mr. Garcia concluded, “This coming year will mark our 25th anniversary as a company. When our company was formed in 1989, it had a belief that strong relationships and attention to customer needs would drive growth and opportunity. That belief holds true today. As we look forward into 2014, we are optimistic about the prospects for our company. We believe that demand for containers will increase this year as world economies improve their rate of economic and trade growth. Factory inventories are lower than at the beginning of the last two years and we believe shipping companies will continue to look at leasing for a significant percentage of their needs. Factories, which we expect to be on an extended Chinese New Year holiday for the entire month of February, are currently quoting some higher container prices compared to the fourth quarter of 2013. We believe this will encourage some shipping lines to consider leasing before equipment prices increase further. The month of January has seen an improvement in factory lease out activity and we will be focused on whether that increased demand will follow through to the rest of the year. As I mentioned, we are also very focused on maximizing the return on the assets we currently own by among other things, adding key marketing staff, optimizing the repositioning of equipment, and increasing the volume of sales to improve overall utilization.”
| CAI International, Inc. | ||||||||||||
| Consolidated Balance Sheets | ||||||||||||
| (In thousands, except share information) | ||||||||||||
| (UNAUDITED) | ||||||||||||
| December 31, | December 31, | |||||||||||
| 2013 | 2012 | |||||||||||
| Assets | ||||||||||||
| Current assets | ||||||||||||
| Cash | $ | 45,741 | $ | 17,671 | ||||||||
| Accounts receivable (owned fleet), net of allowance for doubtful accounts | ||||||||||||
| of $503 and $794 at December 31, 2013 and 2012, respectively | 41,226 | 32,627 | ||||||||||
| Accounts receivable (managed fleet) | 10,646 | 19,131 | ||||||||||
| Current portion of direct finance leases | 12,998 | 10,625 | ||||||||||
| Prepaid expenses | 14,803 | 11,952 | ||||||||||
| Deferred tax assets | 311 | 2,189 | ||||||||||
| Other current assets | 5,242 | 919 | ||||||||||
| Total current assets | 130,967 | 95,114 | ||||||||||
| Restricted cash | 9,253 | 4,376 | ||||||||||
| Rental equipment, net of accumulated depreciation of $210,165 and | ||||||||||||
| $147,654 at December 31, 2013 and 2012, respectively | 1,465,092 | 1,210,234 | ||||||||||
| Net investment in direct finance leases | 68,210 | 74,929 | ||||||||||
| Furniture, fixtures and equipment, net of accumulated depreciation of | ||||||||||||
| $1,697 and $1,254 at December 31, 2013 and 2012, respectively | 1,390 | 1,847 | ||||||||||
| Intangible assets, net of accumulated amortization of $8,288 and $7,447 | ||||||||||||
| at December 31, 2013 and 2012, respectively | 677 | 1,441 | ||||||||||
| Total assets | $ | 1,675,589 | $ | 1,387,941 | ||||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable | $ | 8,002 | $ | 5,985 | ||||||||
| Accrued expenses and other current liabilities | 6,082 | 8,465 | ||||||||||
| Due to container investors | 14,815 | 18,589 | ||||||||||
| Unearned revenue | 6,862 | 7,893 | ||||||||||
| Current portion of debt | 74,080 | 61,044 | ||||||||||
| Current portion of capital lease obligations | 1,921 | 2,242 | ||||||||||
| Rental equipment payable | 45,181 | 2,561 | ||||||||||
| Total current liabilities | 156,943 | 106,779 | ||||||||||
| Debt | 1,058,628 | 888,990 | ||||||||||
| Deferred income tax liability | 41,378 | 40,051 | ||||||||||
| Capital lease obligations | 3,366 | 5,084 | ||||||||||
| Income taxes payable | 148 | 192 | ||||||||||
| Total liabilities | 1,260,463 | 1,041,096 | ||||||||||
| Stockholders' equity | ||||||||||||
| Common stock: par value $.0001 per share; authorized 84,000,000 shares; issued and outstanding | ||||||||||||
| 22,240,673 and 22,052,529 shares at December 31, 2013 and 2012, respectively | 2 | 2 | ||||||||||
| Additional paid-in capital | 184,263 | 181,063 | ||||||||||
| Accumulated other comprehensive loss | (2,356 | ) | (2,917 | ) | ||||||||
| Retained earnings | 232,623 | 168,697 | ||||||||||
| Total CAI stockholders' equity | 414,532 | 346,845 | ||||||||||
| Non-controlling interest | 594 | - | ||||||||||
| Total stockholders' equity | 415,126 | 346,845 | ||||||||||
| Total liabilities and stockholders' equity | $ | 1,675,589 | $ | 1,387,941 | ||||||||
| CAI International, Inc. | ||||||||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
| Revenue | ||||||||||||||||||||||
| Rental revenue | $ | 50,870 | $ | 44,921 | $ | 196,591 | $ | 152,982 | ||||||||||||||
| Management fee revenue | 1,839 | 2,395 | 7,866 | 12,094 | ||||||||||||||||||
| Gain on sale of container portfolios | - | - | - | 1,256 | ||||||||||||||||||
| Finance lease income | 1,852 | 2,538 | 7,948 | 7,593 | ||||||||||||||||||
| Total revenue | 54,561 | 49,854 | 212,405 | 173,925 | ||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||
| Depreciation of rental equipment | 18,102 | 14,146 | 67,109 | 48,352 | ||||||||||||||||||
| Amortization of intangible assets | 99 | 226 | 780 | 902 | ||||||||||||||||||
| Gain on disposition of used rental equipment | (1,534 | ) | (3,634 | ) | (7,356 | ) | (12,445 | ) | ||||||||||||||
| Storage, handling and other expenses | 5,646 | 3,437 | 19,257 | 9,402 | ||||||||||||||||||
| Marketing, general and administrative expenses | 5,574 | 6,048 | 23,848 | 24,658 | ||||||||||||||||||
| (Gain) loss on foreign exchange | (117 | ) | 45 | 82 | 170 | |||||||||||||||||
| Total operating expenses | 27,770 | 20,268 | 103,720 | 71,039 | ||||||||||||||||||
| Operating income | 26,791 | 29,586 | 108,685 | 102,886 | ||||||||||||||||||
| Interest expense | 9,100 | 9,361 | 36,005 | 28,796 | ||||||||||||||||||
| Write-off of deferred financing costs | - | - | 1,108 | - | ||||||||||||||||||
| Interest income | (1 | ) | (1 | ) | (5 | ) | (9 | ) | ||||||||||||||
| Net interest expense | 9,099 | 9,360 | 37,108 | 28,787 | ||||||||||||||||||
| Net income before income taxes and non-controlling interest | 17,692 | 20,226 | 71,577 | 74,099 | ||||||||||||||||||
| Income tax expense | 1,507 | 2,815 | 7,057 | 9,818 | ||||||||||||||||||
| Net income | 16,185 | 17,411 | 64,520 | 64,281 | ||||||||||||||||||
| Net income attributable to non-controlling interest | (594 | ) | - | (594 | ) | (816 | ) | |||||||||||||||
| Net income attributable to CAI common stockholders | $ | 15,591 | $ | 17,411 | $ | 63,926 | $ | 63,465 | ||||||||||||||
| Net income per share attributable to | ||||||||||||||||||||||
| CAI common stockholders | ||||||||||||||||||||||
| Basic | $ | 0.70 | $ | 0.87 | $ | 2.89 | $ | 3.26 | ||||||||||||||
| Diluted | $ | 0.69 | $ | 0.85 | $ | 2.82 | $ | 3.18 | ||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||||
| Basic | 22,212 | 20,090 | 22,157 | 19,495 | ||||||||||||||||||
| Diluted | 22,664 | 20,581 | 22,672 | 19,945 | ||||||||||||||||||
| CAI International, Inc. | |||||||||||||||||||
| Fleet Data | |||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||
| As of December 31, | |||||||||||||||||||
| 2013 | 2012 | ||||||||||||||||||
| Owned container fleet in TEUs | 860,729 | 704,417 | |||||||||||||||||
| Managed container fleet in TEUs | 283,725 | 359,133 | |||||||||||||||||
| Total container fleet in TEUs | 1,144,454 | 1,063,550 | |||||||||||||||||
| Owned container fleet in CEUs | 903,713 | 745,966 | |||||||||||||||||
| Managed container fleet in CEUs | 262,071 | 331,017 | |||||||||||||||||
| Total container fleet in CEUs | 1,165,784 | 1,076,983 | |||||||||||||||||
| Owned railcar fleet in units | 1,804 | 1,456 | |||||||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | |||||||||||||||||
| September 30, | December 31, | December 31, | |||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||
| Average Utilization | |||||||||||||||||||
| Container Fleet Utilization in TEUs | 92.0% | 94.8% | 90.8% | 93.4% | 91.8% | 94.2% | |||||||||||||
| Container Fleet Utilization in CEUs | 92.8% | 95.4% | 91.7% | 94.0% | 92.7% | 94.7% | |||||||||||||
| As of December 31, | |||||||||||||||||||
| 2013 | 2012 | ||||||||||||||||||
| Period Ending Utilization | |||||||||||||||||||
| Container Fleet Utilization in TEUs | 90.3% | 92.7% | |||||||||||||||||
| Container Fleet Utilization in CEUs | 91.3% | 93.4% | |||||||||||||||||
| Utilization is computed by dividing total units on lease, in CEUs (cost equivalent units) or TEUs (twenty foot equivalent units), by the total units in our fleet, in CEUs or TEUs, excluding new units not yet leased and off-hire units designated for sale. CEU is a ratio used to convert the actual number of containers in our fleet to a figure based on the relative purchase prices of our various equipment types to that of a standard 20 foot dry van container. For example, the CEU ratio for a standard 40 foot dry van container is 1.6, and a 40 foot high cube container is 1.7. |
Conference Call
A conference call to discuss the financial results for the fourth quarter of 2013 will be held on Monday, February 10, 2014 at 5:00 p.m. ET. The dial-in number for the teleconference is 1-888-398-8098; outside of the U.S., call 1-707-287-9363. The call may be accessed live over the internet (listen only) under the “Investors” tab of CAI’s website, www.capps.com, by selecting “Q4 2013 Earnings Conference Call.” A webcast replay will be available for 30 days on the “Investors” tab of our website.
About CAI International, Inc.
CAI is one of the world’s leading managers and lessors of intermodal freight containers. As of December 31, 2013, the company operated a worldwide fleet of approximately 1,144,000 TEUs of containers through 16 offices located in 12 countries including the United States. CAI also owns a fleet of railcars, which it leases within North America.
This press release contains forward-looking statements regarding future events and the future performance of CAI International, Inc. These statements are forward looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and involve risks and uncertainties that could cause actual results of operations and other performance measures to differ materially from current expectations including, but not limited to, utilization rates, expected economic conditions, availability of credit on commercially favorable terms or at all, customer demand, container investment levels, container prices, lease rates, increased competition, volatility in exchange rates, growth in world trade and world container trade, and others. CAI refers you to the documents that it has filed with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2012 and its interim reports on Form 10-Q and its reports on Form 8-K. These documents contain additional important factors that could cause actual results to differ from current expectations and from forward-looking statements contained in this press release. Furthermore, CAI is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements contained in this press release whether as a result of new information, future events or otherwise, unless required by law.
CONTACT:
CAI International, Inc.
Tim Page, 415-788-0100
Chief
Financial Officer
tpage@capps.com