McGrath RentCorp (NASDAQ: MGRC) (the “Company”), a diversified business to business rental company, today announced revenues for the quarter ended March 31, 2011, of $73.0 million, an increase of 18%, compared to $61.7 million in the first quarter of 2010. The Company reported net income of $9.6 million, or $0.39 per diluted share for the first quarter of 2011, compared to net income of $6.6 million, or $0.28 per diluted share, in the first quarter of 2010.
Dennis Kakures, President and CEO of McGrath RentCorp, made the following comments regarding these results and future expectations:
“Our Company-wide 20% increase in rental revenues for the quarter from a year ago reflects very favorable business activity and rental revenue increases in both our electronics and tank rental businesses. These very positive results were partly offset by our modular business rental revenues declining by 4% for the same comparative period.
For our electronics division, rental revenues for the quarter increased by $3.6 million or 19% to $22.1 million from a year ago. Income from operations nearly doubled to $6.5 million. In addition to higher rental revenues, our electronics business also benefited from higher gross profit on equipment sales and lower depreciation, laboratory and SG&A costs as a percentage of rental revenues from a year ago.
Our tank rental business more than doubled rental revenues to $12.2 million for the quarter from $6.0 million a year ago. The strong increase in rental revenues was directly related to higher business activity levels, supported by new branch locations, a larger sales force and an expansion of Adler’s rental equipment inventory. Income from operations was up over three and one-half times from a year ago to $6.0 million as the business continued to more fully leverage prior quarter new employee and other infrastructure investments.
Our modular division rental revenues for the first quarter decreased by $0.8 million, or 4%, to $19.8 million from a year ago. Rental revenues grew by 4% quarter over quarter in our markets outside of California; however, they declined by 8% within the state. California continues to be plagued by fiscal and unemployment rate challenges. Income from operations declined by $1.9 million, or 26%, to $5.6 million. The higher percentage reduction in income from operations is primarily due to higher SG&A expenses associated with the continued expansion of our portable storage rental initiative, and higher inventory center costs outside of California for the preparation of equipment for rental. Modular utilization was down approximately one-half percentage point to 66.8% from the fourth quarter of 2010.