McGrath RentCorp (NASDAQ: MGRC), a diversified business to business rental company, today announced revenues for the quarter ended March 31, 2010, of $61.7 million, a decrease of 8%, compared to $67.2 million in the first quarter 2009. The Company reported net income of $6.6 million, or $0.28 per diluted share for the first quarter 2010, compared to net income of $7.9 million, or $0.33 per diluted share, in the first quarter 2009.
Dennis Kakures, President and CEO of McGrath RentCorp, made the following comments regarding these results and future expectations:
“Our quarter over quarter results reflect the continuing challenges of an unsettled fiscal landscape and high unemployment in California and their impact on the performance of our modular rental business, offset favorably by higher profitability in both our electronics and tank rental divisions.
Our modular division rental revenues for the period decreased by $4.3 million compared to a year ago, with California being responsible for approximately 80% of the reduction. However, during the first quarter, there were two important developments in California that we believe will support higher rental revenue levels moving forward. First, in March, the state sold approximately $6 billion in bonds to support state infrastructure and educational facility projects. We are hopeful that as a result of these bond sales we will see a greater number of school modernization projects going forward. Second, we have seen a favorable increase in larger commercial construction project opportunities primarily associated with state infrastructure development that has continued into the second quarter.
For our electronics rental business, income from operations increased 62% to $3.3 million quarter over quarter. These results were driven primarily from 13% lower depreciation expense, and secondarily from various SG&A cost reductions, and improved gross profit on sales of equipment. Although the rental revenue top line was down 5% quarter over quarter, new rental business activity levels and bookings are much stronger than a year ago. We would expect the much improved market conditions today from a year ago to influence favorably our quarter over quarter rental revenue results beginning in the second quarter of 2010.