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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 second quarter (“QE2”) and six months (“YTD”) of the fiscal year ending June 30, 2011 (“FY 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.
QE2 FY 2011 Results
Total revenues were $44.9 million in QE2 FY 2011, a 15% increase over QE2 of the fiscal year ended June 30, 2010 (“FY 2010”);
Leasing revenues were $22.7 million in QE2 FY 2011, a 14% increase over QE2 FY 2010;
Leasing revenues comprised 51% of total revenues in both QE2 FY 2011 and QE2 FY 2010;
Sales revenues were $22.2 million in QE2 FY 2011, a 15% increase over QE2 FY 2010;
Adjusted EBITDA (1) was $9.4 million in QE2 FY 2011, a 19% increase over QE2 FY 2010;
Adjusted EBITDA margin as a percentage of total revenues was 21% in QE2 FY 2011 versus 20% in QE2 FY 2010;
Interest expense increased to $4.4 million in QE2 FY 2011 from $4.1 million in QE2 FY 2010; and
Foreign currency exchange gains were $2.0 million for QE2 FY 2011 versus $0.5 million for QE2 FY 2010.
YTD FY 2011 Results
Total revenues were $88.4 million in YTD FY 2011, an 19% increase over YTD FY 2010;
Leasing revenues were $42.8 million in YTD FY 2011, an 11% increase over YTD FY 2010 ;
Leasing revenues comprised 48% in YTD FY 2011 versus 52% in YTD FY 2010;
Sales revenues were $45.6 million in YTD FY 2011, a 27% increase over YTD FY 2010;
Adjusted EBITDA was $17.9 million, a 15% increase over YTD FY 2010;
Adjusted EBITDA margin as a percentage of total revenues was 20% in YTD FY 2011 versus 21% in YTD FY 2010;
Interest expense increased to $8.6 million in YTD FY 2011 from $7.8 million in YTD FY 2010; and
Foreign currency exchange gains were $4.5 million in YTD FY 2011 versus $3.1 million in YTD FY 2010.
Key Financial Highlights
When comparing December 31, 2010 with June 30, 2010, days sales outstanding in trade receivables lengthened slightly to 46 days from 43 days at Royal Wolf and to 53 days from 52 days at Pac-Van, respectively;
Inventories, excluding the effect of foreign currency translation into the U.S. dollar reporting currency, increased by $3.9 million at December 31, 2010 from June 30, 2010;
The utilization rate of the total lease fleet, on a unit basis, increased to 85% at December 31, 2010 from 79% at June 30, 2010;
Net capital expenditures for the lease fleet were $7.1 million during YTD FY 2011 versus a negative $0.9 million during YTD FY 2010;
During YTD FY 2011, outstanding borrowings, excluding the effect of foreign currency translation into the U.S. dollar reporting currency, were reduced by $2.8 million despite the increased investment in inventory and lease fleet to meet the increasing demand from the improving economy in the Asia-Pacific area; and
Trailing twelve-month (“TTM”) total revenues through December 31, 2010 were $170.3 million ($58.7 million in the United States and $111.6 million in the Asia-Pacific area) and as of December 31, 2010 TTM adjusted EBITDA was $33.9 million ($9.1 million in the United States and $24.8 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.