For the first quarter of 2011, the Company’s TRS-RenTelco division reported a 98% increase in income from operations to $6.5 million. Rental revenues increased 19% to $22.1 million. The increase in rental revenues, partly offset by a 2% increase in depreciation to $9.4 million and a 4% increase in other direct costs to $3.0 million, resulted in an increase in gross profit on rental revenues of 52% to $9.7 million. Sales revenues increased 21% to $5.9 million with gross profit on sales increasing 51% to $2.6 million, primarily due to higher gross margins on used equipment sales revenues in the first quarter of 2011. Selling and administrative expenses increased 17% to $6.3 million due to increased salary and benefit costs.
For the first quarter of 2011, the Company’s Adler Tanks division more than tripled its income from operations to $6.0 million. Rental revenues more than doubled to $12.2 million, which resulted in an increase in gross profit on rental revenues of 135% to $9.3 million. Rental related services revenues increased 40% to $2.3 million, with gross profit on rental related services revenues flat at $0.3 million. Selling and administrative expenses increased 35% to $3.6 million, primarily due to increased salary and benefit costs.OTHER HIGHLIGHTS
- Debt increased $0.1 million during the quarter to $265.8 million, with the Company’s funded debt (notes payable) to equity ratio decreasing from 0.90 to 1 at December 31, 2010 to 0.88 to 1 at March 31, 2011. As of March 31, 2011, the Company had capacity to borrow an additional $101.2 million under its lines of credit.
- New senior notes issued April 21, 2011. The Company entered into an agreement for the issuance of $100 million of 4.03% unsecured senior notes. The debt has a five-year average life with a final maturity in April 2018. Proceeds from the offering were used to repay outstanding borrowings under the Company’s revolving credit facilities.
- Dividend rate increased 2% to $0.23 per share for the first quarter 2011 compared to the first quarter 2010. On an annualized basis, this dividend represents a 3.4% yield on the May 4, 2011 close price of $26.88.
- Adjusted EBITDA increased 20% to $34.5 million for the first quarter of 2011. At March 31, 2011, the Company’s ratio of funded debt to the last twelve months actual Adjusted EBITDA was 1.93 to 1 compared to 2.01 to 1 at December 31, 2010. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization and other non-cash stock-based compensation. A reconciliation of net income to Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating activities can be found at the end of this release.