General Finance Corporation (“General Finance” and, with its consolidated subsidiaries, the “Company”) (NASDAQ:GFN) (NASDAQ:GFNCL) (NASDAQ:GFNCZ) today announced its consolidated financial results for the first quarter of the fiscal year ending June 30, 2011. The results include RWA Holdings Pty Limited and subsidiaries (“Royal Wolf”), the leading provider of portable storage solutions in Australia and New Zealand, and Pac-Van, Inc. (“Pac-Van”), a key provider of modular buildings and mobile office units in the United States.
First Quarter Ended September 30, 2010 (“QE1 FY 2011”) Results Compared to First Quarter Ended September 30, 2009 (“QE1 FY 2010”) Results
- Total revenues increased by approximately 24% to $43.5 million in QE1 FY 2011 from $35.2 million in QE1 FY 2010;
- Leasing revenues increased by 8% to $20.1 million in QE1 FY 2011 from $18.6 million in QE1 FY 2010;
- Leasing revenues comprised 46% of total revenues in QE1 FY 2011 versus 53% in QE1 FY 2010;
- Sales revenues increased by 41% to $23.4 million in QE1 FY 2011 from $16.6 million in QE1 FY 2010;
- Adjusted EBITDA (1) increased by 12% to $8.5 million in QE1 FY 2011 from $7.6 million in QE1 FY 2010;
- Adjusted EBITDA margin as a percentage of total revenues was 20% in QE1 FY 2011 versus 22% in QE1 FY 2010;
- Interest expense increased to $4.3 million in QE1 FY 2011 from $3.7 million in QE1 FY 2010; and
- The effect of the strengthening Australian dollar during the periods resulted in foreign currency exchange gains of $2.4 million for QE1 FY 2011 and $2.6 million for QE1 FY 2010.
Key Financial Highlights
- When comparing September 30, 2010 with June 30, 2010, days sales outstanding in trade receivables lengthened slightly at Royal Wolf to 46 days from 43 days and shortened at Pac-Van to 48 days from 53 days;
- Inventories, excluding the effect of foreign currency translation into the U.S. dollar reporting currency, increased by $2.2 million at September 30, 2010 from June 30, 2010, primarily to meet the increasing demand from the improving economy in the Asia-Pacific area;
- The utilization rate of the total lease fleet, on a unit basis, increased slightly to 80% at September 30, 2010 from 79% at June 30, 2010;
- Net capital expenditures for the lease fleet were under $1.0 million in both QE1 FY 2011 and QE1 FY 2010;
- During QE1 FY 2011, outstanding borrowings were reduced by $4.1 million in the United States and, excluding the effect of foreign currency translation into the U.S. dollar reporting currency, were reduced by $1.3 million at Royal Wolf;
- The Company was in compliance with the covenants of its senior credit and subordinated indebtedness at September 30, 2010; and
- Trailing twelve-month (“TTM”) total revenues through September 30, 2010 were $164.5 million ($57.7 million in the United States and $106.8 million in the Asia-Pacific area) and as of September 30, 2010 TTM adjusted EBITDA was $32.4 million ($9.3 million in the United States and $23.1 million in the Asia-Pacific area).
(1) Earnings before interest, income taxes, impairment, depreciation and amortization and other non-operating costs and income (“EBITDA” and “adjusted EBITDA”) are supplemental measures of performance that are not required by, or presented in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Adjusted EBITDA (which adds back share-based compensation expense) is a non-U.S. GAAP measure, is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income, income from operations or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flow from operating, investing or financing activities as a measure of liquidity. We present adjusted EBITDA because we consider it to be an important supplemental measure of our performance and because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry, many of which present EBITDA and a form of our adjusted EBITDA when reporting their results.