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8-K - FORM 8-K - MOBILE MINI INCd450753d8k.htm

Exhibit 99.1

 

LOGO

FOR IMMEDIATE RELEASE

MOBILE MINI REPORTS Q3 2017 RESULTS AND ANNOUNCES QUARTERLY DIVIDEND

Phoenix, AZ – October 20, 2017 – Mobile Mini, Inc. (NASDAQ GS: MINI) (the “Company” or “Mobile Mini”), the world’s leading supplier of portable storage solutions and a leading provider of tank and pump solutions in the United States, today reported actual and adjusted financial results for the quarter ended September 30, 2017. Total revenues were $136.6 million and rental revenues were $127.7 million, as compared to $128.9 million and $121.8 million, respectively, for the same period last year.

Rental revenues for the Storage Solutions and Tank & Pump Solutions businesses for the current quarter were $104.5 million and $23.2 million, respectively.

The Company recorded net income of $11.2 million, or $0.25 per diluted share, in the third quarter of 2017, as compared to net income of $12.7 million, or $0.29 per diluted share, for the third quarter of 2016. On an adjusted basis, third quarter net income was $11.8 million, or $0.27 per diluted share, as compared to adjusted net income of $13.7 million, or $0.31 per diluted share, for the third quarter of 2016. Adjusted EBITDA was $45.5 million and adjusted EBITDA margin was 33.3% for the third quarter of 2017.

Dividend

The Company’s Board of Directors declared a cash dividend of 22.7 cents per share, which will be paid on November 29, 2017 to shareholders of record on November 15, 2017.

Third Quarter 2017 Highlights

 

   

Delivered a strong 7.0% year-over-year increase in Storage Solutions rental revenues.

   

Achieved third sequential quarter of Tank & Pump Solutions rental revenue growth.

   

Increased total Storage Solutions average units on rent by 5.3% year-over-year.

   

Raised Storage Solutions rental rates by 2.9% year-over-year, with rates on new rentals up 3.9%.

   

Grew year-to-date seasonal orders through September 30, 2017 by 21% compared to the prior year.

   

Increased average Storage Solutions unit utilization to 71.8% for the quarter and finished the quarter at 74.4%.

   

Improved OEC utilization for Tank & Pump Solutions, averaging 66.6% for the quarter and ending the quarter at 72.8%.

   

Achieved adjusted EBITDA of $45.5 million, with an adjusted EBITDA margin of 33.3%, despite year-over-year headwinds of $6.2 million in increased variable compensation expense.

   

Generated net cash from operating activities of $32.6 million and strong free cash flow of $8.9 million.

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “I am very pleased with the performance of both our business segments this quarter. Within the Storage Solutions segment we drove both higher rate and volume, resulting in a strong 7.0% increase in rental revenue. We also leveraged our broad footprint and fleet capacity to partner with our national account customers to initiate an earlier start to our seasonal holiday business with great results. Within the Tank & Pump segment, demand and performance have stabilized and improved during 2017, with even further increased activity in the second half of the current quarter. We anticipate increased demand in the near-term as certain of our downstream customers are now engaging in turnaround and maintenance activities that had been previously deferred.”


Mr. Olsson continued, “Our business segments are rapidly improving and we are generating great momentum as we head into the fourth quarter. Given the positive trends in performance, the Company has recorded increased variable compensation in the third quarter and throughout the year, mitigating the profit flow through. However, our underlying margins are strong and improving. Excluding the effect of the variable compensation, the adjusted EBITDA margin increased approximately 170 basis points over the third quarter of the prior year. We remain fully committed to driving continuous improvement and efficiencies in our structure and processes.”

Conference Call

Mobile Mini will host a conference call today, Friday, October 20 at 12 noon ET to review these results. To listen to the call live, dial (201) 493-6739 and ask for the Mobile Mini Conference Call or go to www.mobilemini.com and click on the Investors section. Additionally, a slide presentation that will accompany the call will be posted at www.mobilemini.com on the Investor Relations section and will be available in advance and after the call. Please go to the website 15 minutes early to download and install any necessary audio software. If you are unable to listen live, a replay of the call can be accessed for approximately 14 days after the call at Mobile Mini’s website.

About Mobile Mini, Inc.

Mobile Mini, Inc. is the world’s leading provider of portable storage solutions through its total rental fleet of approximately 214,900 storage solutions containers and office units and a leading provider of tank and pump solutions in the U.S., with a rental fleet of approximately 12,000 units. Mobile Mini’s network is comprised of 155 locations in the U.S., U.K., and Canada. Mobile Mini is included on the Russell 2000® and 3000® Indexes and the S&P Small Cap Index.

Forward-Looking Statements

This news release contains forward-looking statements, including, but not limited to, our approach being able to drive revenue growth, continued increased demand, our ability to increase margins, our outlook remaining positive, and our ability to continue to rapidly improve, which involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Risks and uncertainties that may affect future results include those that are described from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”). These forward-looking statements represent the judgment of the Company, as of the date of this release, and Mobile Mini disclaims any intent or obligation to update forward-looking statements.

 

CONTACT:

   -OR-    INVESTOR RELATIONS COUNSEL:
Van Welch, Executive VP &       The Equity Group Inc.
Chief Financial Officer       Fred Buonocore (212) 836-9607
Mobile Mini, Inc.       Linda Latman (212) 836-9609

(602) 308-3879

www.mobilemini.com

     

(See accompanying tables)

 

2


Mobile Mini, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

(in thousands, except percentages and per share data)

 

     Three Months Ended September 30, 2017     Three Months Ended September 30, 2016  
     Actual     Adjustments     Adjusted (1)     Actual     Adjustments     Adjusted (2)  

Revenues:

            

Rental

   $ 127,695     $     $ 127,695     $ 121,784     $     $ 121,784  

Sales

     8,438             8,438       6,610             6,610  

Other

     503             503       459             459  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

         136,636               —           136,636           128,853               —           128,853  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     87,745       (237     87,508       80,457             80,457  

Cost of sales

     5,519             5,519       3,897             3,897  

Restructuring expenses

     625       (625           1,648       (1,648      

Depreciation and amortization

     15,935             15,935       16,184             16,184  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     109,824       (862     108,962       102,186       (1,648     100,538  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     26,812       862       27,674       26,667       1,648       28,315  

Other income (expense):

            

Interest income

     4             4                    

Interest expense

     (9,203           (9,203     (8,047           (8,047

Foreign currency exchange

     (2           (2     (5           (5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax provision

     17,611       862       18,473       18,615       1,648       20,263  

Income tax provision

     6,383       327       6,710       5,906       632       6,538  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 11,228     $ 535     $ 11,763     $ 12,709     $ 1,016     $ 13,725  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA/Adjusted EBITDA

   $ 42,749       $ 45,531     $ 42,846       $ 46,650  

EBITDA/Adjusted EBITDA as a percentage of

total revenues

     31.3       33.3     33.3       36.2

Earnings per share:

            

Basic

   $ 0.25       $ 0.27     $ 0.29       $ 0.31  

Diluted

     0.25         0.27       0.29         0.31  

Weighted average number of common and

  common share equivalents outstanding:

            

Basic

     44,039         44,039       44,159         44,159  

Diluted

     44,206         44,206       44,453         44,453  

 

(1) Adjusted column for the three months ended September 30, 2017 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP (defined herein) presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the three-month period ended September 30, 2017 include the following, along with the related tax effects:
    Reduction of $0.2 million in rental, selling and general expenses to exclude costs related to severance and transition in conjunction with the departure of an executive.
    Exclusion of $0.6 million in costs related to the restructuring of our business operations.

 

(2) Adjusted column for the three months ended September 30, 2016 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the three-month period ended September 30, 2016 exclude costs of $1.6 million related to the restructuring of our business operations, along with the related tax effects.

 

3


Mobile Mini, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except percentages and per share data)

 

     Nine Months Ended September 30, 2017     Nine Months Ended September 30, 2016  
     Actual     Adjustments     Adjusted (1)     Actual     Adjustments     Adjusted (2)  

Revenues:

            

Rental

   $ 360,288     $     $ 360,288     $ 355,913     $     $ 355,913  

Sales

     24,817             24,817       19,843             19,843  

Other

     1,748             1,748       2,479       (1,365     1,114  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

         386,853               —           386,853           378,235           (1,365         376,870  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     248,954       (2,623     246,331       234,796             234,796  

Cost of sales

     16,039             16,039       12,186             12,186  

Restructuring expenses

     2,062       (2,062           5,220       (5,220      

Depreciation and amortization

     46,941             46,941       47,630             47,630  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     313,996       (4,685     309,311       299,832       (5,220     294,612  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     72,857       4,685       77,542       78,403       3,855       82,258  

Other income (expense):

            

Interest income

     20             20                    

Interest expense

     (26,412           (26,412     (24,533           (24,533

Debt extinguishment expense

                       (9,192     9,192        

Deferred financing costs write-off

                       (2,271     2,271        

Foreign currency exchange

     (29           (29     (9           (9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income tax provision

     46,436       4,685       51,121       42,398       15,318       57,716  

Income tax provision

     16,279       1,777       18,056       14,619       5,892       20,511  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 30,157     $ 2,908     $ 33,065     $ 27,779     $ 9,426     $ 37,205  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA/Adjusted EBITDA

   $ 119,789       $ 129,179     $ 126,024       $ 136,222  

EBITDA/Adjusted EBITDA as a percentage of

total revenues

     31.0       33.4     33.3       36.1

Earnings per share:

            

Basic

   $ 0.68       $ 0.75     $ 0.63       $ 0.84  

Diluted

     0.68         0.75       0.63         0.84  

Weighted average number of common and

common share equivalents outstanding:

            

Basic

     44,030         44,030       44,170         44,170  

Diluted

     44,190         44,190       44,431         44,431  

 

(1) Adjusted column for the nine months ended September 30, 2017 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the nine-month period ended September 30, 2017 include the following, along with the related tax effects:
    Reduction of $0.1 million in rental, selling and general expenses for acquisition-related expenses.
    Reduction of $2.5 million in rental, selling and general expenses to exclude costs related to severance and transition in conjunction with the departure of executives.
    Exclusion of $2.1 million in costs related to the restructuring of our business operations.

 

(2) Adjusted column for the nine months ended September 30, 2016 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the nine-month period ended September 30, 2016 include the following, along with the related tax effects:
    Reduction of other revenue by $1.4 million to exclude revenue associated with a sales tax refund.
    Exclusion of costs of $5.2 million related to the restructuring of our business operations.
    Exclusion of $9.2 million of debt extinguishment costs to redeem the Company’s $200 million 7.785% senior notes due December 2020 (the “2020 Notes”).
    Exclusion of $2.3 million of deferred financing costs that were written off in conjunction with the redemption of the 2020 Notes.

 

4


Mobile Mini, Inc.

Operating Data

(Unaudited)

 

         2017                    2016          
As of September 30:              

Stand-alone Storage Solutions locations

     122           125  

Stand-alone Tank & Pump Solutions locations

     17           19  

Combined Storage Solutions and Tank & Pump Solutions locations

     16           13  

Storage Solutions rental fleet units

     214,900           208,000  

Tank & Pump Solutions rental fleet units

     12,000           12,100  

Average utilization - Three months ended September 30:

     

Storage Solutions - utilization based on number of units

     71.8%        70.5

Tank & Pump Solutions - utilization based on original equipment cost

     66.6%     

Average utilization - Nine months ended September 30:

     

Storage Solutions - utilization based on number of units

     70.1%        69.1

Tank & Pump Solutions - utilization based on original equipment cost (1)

     64.3%     

 

(1) Utilization for Tank & Pump Solutions is calculated as the average original cost of equipment on rent, excluding re-rented equipment, divided by the average original cost of equipment in the fleet. This statistic has been calculated since the three-month period ending June 30, 2016; no comparable statistic is available for the prior-year period.

 

5


Mobile Mini, Inc.

Business Segment Information - Adjusted (1)

(Unaudited)

(in thousands, except percentages)

 

     Three Months Ended September 30, 2017     Three Months Ended September 30, 2016  
     Storage
Solutions
    Tank & Pump
Solutions
    Total     Storage
Solutions
    Tank & Pump
Solutions
    Total  

Revenues:

            

Rental

   $ 104,488     $ 23,207     $ 127,695     $ 97,678     $ 24,106     $ 121,784  

Sales

     6,743       1,695       8,438       5,319       1,291       6,610  

Other

     401       102       503       371       88       459  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

         111,632           25,004           136,636           103,368           25,485           128,853  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     69,958       17,550       87,508       64,084       16,373       80,457  

Cost of sales

     4,477       1,042       5,519       3,113       784       3,897  

Depreciation and amortization

     9,836       6,099       15,935       9,100       7,084       16,184  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     84,271       24,691       108,962       76,297       24,241       100,538  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   $ 27,361     $ 313     $ 27,674     $ 27,071     $ 1,244     $ 28,315  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 39,052     $ 6,479     $ 45,531     $ 38,270     $ 8,380     $ 46,650  

Adjusted EBITDA Margin

     35.0     25.9     33.3     37.0     32.9     36.2
     Nine Months Ended September 30, 2017     Nine Months Ended September 30, 2016  
     Storage
Solutions
    Tank & Pump
Solutions
    Total     Storage
Solutions
    Tank & Pump
Solutions
    Total  

Revenues:

            

Rental

   $ 293,780     $ 66,508     $ 360,288     $ 285,508     $ 70,405     $ 355,913  

Sales

     20,763       4,054       24,817       15,734       4,109       19,843  

Other

     1,418       330       1,748       884       230       1,114  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

         315,961           70,892           386,853           302,126           74,744           376,870  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Rental, selling and general expenses

     195,928       50,403       246,331       187,792       47,004       234,796  

Cost of sales

     13,808       2,231       16,039       9,568       2,618       12,186  

Depreciation and amortization

     28,496       18,445       46,941       26,216       21,414       47,630  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     238,232       71,079       309,311       223,576       71,036       294,612  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

   $ 77,729     $ (187   $ 77,542     $ 78,550     $ 3,708     $ 82,258  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 110,733     $ 18,446     $ 129,179     $ 110,900     $ 25,322     $ 136,222  

Adjusted EBITDA Margin

     35.0     26.0     33.4     36.7     33.9     36.1

 

  (1) These tables present results by major business segment adjusted to exclude certain transactions that management believes are not indicative of our business. See additional information regarding non-GAAP financial information following in this earnings release.

 

6


Mobile Mini, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

     September 30,
2017
    December 31,
2016
 
     (unaudited)     (audited)  
ASSETS  

Cash and cash equivalents

   $ 12,609     $ 4,137  

Receivables, net

     100,810       99,175  

Inventories

     17,013       15,412  

Rental fleet, net

     983,288       950,065  

Property, plant and equipment, net

     152,649       149,197  

Other assets

     15,384       14,930  

Intangibles, net

     63,624       68,420  

Goodwill

     708,541       703,558  
  

 

 

   

 

 

 

Total assets

   $             2,053,918     $             2,004,894  
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY  

Liabilities:

    

Accounts payable

   $ 30,430     $ 27,388  

Accrued liabilities

     71,541       64,126  

Lines of credit

     640,879       641,160  

Obligations under capital leases

     51,789       50,704  

Senior notes, net

     245,691       245,212  

Deferred income taxes

     238,067       240,690  
  

 

 

   

 

 

 

Total liabilities

                 1,278,397                   1,269,280  
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock

     496       493  

Additional paid-in capital

     602,772       592,071  

Retained earnings

     381,294       362,896  

Accumulated other comprehensive loss

     (61,882     (81,047

Treasury stock

     (147,159     (138,799
  

 

 

   

 

 

 

Total stockholders’ equity

     775,521       735,614  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,053,918     $ 2,004,894  
  

 

 

   

 

 

 

 

7


Mobile Mini, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

     Nine Months Ended
September 30,
 
     2017     2016  

Cash flows from operating activities:

    

Net income

   $ 30,157     $ 27,779  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Debt extinguishment expense

           9,192  

Deferred financing costs write-off

           2,271  

Provision for doubtful accounts

     3,176       4,290  

Amortization of deferred financing costs

     1,545       1,457  

Amortization of long-term liabilities

     98       87  

Share-based compensation expense

     5,890       6,521  

Depreciation and amortization

     46,941       47,630  

Gain on sale of rental fleet

     (4,273     (4,228

Loss on disposal of property, plant and equipment

     472       1,089  

Deferred income taxes

     15,167       14,448  

Foreign currency exchange

     29       9  

Changes in certain assets and liabilities, net of effect of businesses acquired

     (3,370     (14,524
  

 

 

   

 

 

 

Net cash provided by operating activities

               95,832                 96,021  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Cash paid for businesses acquired, net of cash acquired

           (9,206

Additions to rental fleet, excluding acquisitions

     (45,945     (46,480

Proceeds from sale of rental fleet

     9,602       10,770  

Additions to property, plant and equipment, excluding acquisitions

     (12,816     (25,750

Proceeds from sale of property, plant and equipment

     780       2,369  
  

 

 

   

 

 

 

Net cash used in investing activities

     (48,379     (68,297
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Net repayments under lines of credit

     (281     (16,171

Proceeds from issuance of 5.875% senior notes due 2024

           250,000  

Redemption of 7.875% senior notes due 2020

           (200,000

Debt extinguishment expense

           (9,192

Deferred financing costs

     (12     (5,352

Principal payments on capital lease obligations

     (5,526     (4,693

Issuance of common stock

     4,685       356  

Dividend payments

     (30,120     (27,327

Purchase of treasury stock

     (8,359     (7,135
  

 

 

   

 

 

 

Net cash used in financing activities

     (39,613     (19,514
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     632       (301
  

 

 

   

 

 

 

Net change in cash

     8,472       7,909  

Cash and cash equivalents at beginning of period

     4,137       1,613  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 12,609     $ 9,522  
  

 

 

   

 

 

 

Equipment and other acquired through capital lease obligations

   $ 6,610     $ 18,951  

Capital expenditures accrued or payable

     8,931       5,053  

 

 

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Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company also discloses in this press release certain non-GAAP financial information. These financial measures are not recognized measures under GAAP and they are not intended to be and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin and free cash flow are non-GAAP financial measures as defined by SEC rules. This non-GAAP financial information may be determined or calculated differently by other companies. Reconciliations of these non-GAAP measurements to the most directly comparable GAAP financial measurements are furnished earlier in this release and as follows:

Mobile Mini, Inc.

Adjusted EBITDA GAAP Reconciliations

(Unaudited)

(in thousands)

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2017      2016      2017      2016  

Net income

   $ 11,228      $ 12,709      $ 30,157      $ 27,779  

Interest expense

     9,203        8,047        26,412        24,533  

Income tax provision

     6,383        5,906        16,279        14,619  

Depreciation and amortization

     15,935        16,184        46,941        47,630  

Debt extinguishment expense

                          9,192  

Deferred financing costs write-off

                          2,271  
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

     42,749        42,846        119,789        126,024  

Share-based compensation expense

     1,920        2,156        4,705        6,343  

Restructuring expenses

     625        1,648        2,062        5,220  

Acquisition-related expenses

     26               123         

Sales tax refund

                          (1,365

Other

     211               2,500         
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 45,531      $ 46,650      $ 129,179      $ 136,222  
  

 

 

    

 

 

    

 

 

    

 

 

 
     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2017      2016      2017      2016  

Net cash provided by operating activities

   $ 32,611      $ 31,311      $ 95,832      $ 96,021  

Interest paid

     12,192        3,889        30,379        17,880  

Income and franchise taxes paid

     213        229        1,313        1,380  

Share-based compensation expense

     (2,070      (2,276      (5,890      (6,521

Gain on sale of rental fleet

     1,447        1,446        4,273        4,228  

Loss on disposal of property, plant and equipment

     (190      (400      (472      (1,089

Changes in certain assets and liabilities, net of effect of businesses acquired

     (1,454      8,647        (5,646      14,125  
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

   $       42,749      $       42,846      $       119,789      $       126,024  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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Mobile Mini, Inc.

Free Cash Flow GAAP Reconciliation

(Unaudited)

(in thousands)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2017     2016     2017     2016  

Net cash provided by operating activities

   $ 32,611     $ 31,311     $ 95,832     $ 96,021  
  

 

 

   

 

 

   

 

 

   

 

 

 

Additions to rental fleet, excluding acquisitions

     (22,918     (18,322     (45,945     (46,480

Proceeds from sale of rental fleet

     3,319       3,361       9,602       10,770  

Additions to property, plant and equipment, excluding acquisitions

     (4,109     (6,487     (12,816     (25,750

Proceeds from sale of property, plant and equipment

     12       754       780       2,369  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net capital expenditures, excluding acquisitions

 

    

 

(23,696

 

 

   

 

(20,694

 

 

   

 

(48,379

 

 

   

 

(59,091

 

 

  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $       8,915     $       10,617     $       47,453     $       36,930  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

10


Adjusted net income and adjusted diluted earnings per share. Adjusted net income and related earnings per share information exclude certain transactions that management believes are not indicative of our business. We believe that the inclusion of this non-GAAP presentation makes it easier to compare our financial performance across reporting periods on a consistent basis.

EBITDA and adjusted EBITDA. EBITDA is defined as net income before discontinued operations, net of tax (if applicable), interest expense, income taxes, depreciation and amortization, and debt restructuring or extinguishment expense (if applicable), including any write-off of deferred financing costs. Adjusted EBITDA further excludes certain non-cash expenses, including share-based compensation, as well as transactions that management believes are not indicative of our business. Because EBITDA and adjusted EBITDA, as defined, exclude some but not all items that affect our cash flow from operating activities, they may not be comparable to similarly titled performance measures presented by other companies.

We present EBITDA and adjusted EBITDA because we believe they provide useful information regarding our ability to meet our future debt payment requirements, capital expenditures and working capital requirements and an overall evaluation of our financial condition. EBITDA and adjusted EBITDA have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows from operations, or other consolidated income or cash flow data prepared in accordance with GAAP.

EBITDA and adjusted EBITDA margins are calculated as EBITDA and adjusted EBITDA, respectively, divided by total revenues expressed as a percentage.

Free Cash Flow. Free cash flow is defined as net cash provided by operating activities, minus or plus, net cash used in or provided by investing activities, excluding acquisitions and certain transactions. Free cash flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, the most directly comparable financial measure prepared in accordance with GAAP. We present free cash flow because we believe it provides useful information regarding our liquidity and ability to meet our short-term obligations. In particular, free cash flow indicates the amount of cash available after capital expenditures for, among other things, investments in our existing business, debt service obligations, payment of authorized quarterly dividends, repurchase of our common stock and strategic small acquisitions.

 

11