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McGrath RentCorp Announces Results For First Quarter 2011

Stocks in this article: MGRC

Our future business, financial condition and results of operations could differ materially from those anticipated by such forward-looking statements and are subject to risks and uncertainties including the risks set forth above, those discussed in Part II—Item 1A “Risk Factors” and elsewhere in our Form 10-Q for the quarter ended March 31, 2011 filed with the SEC on May 5, 2011 and in our Form 10-K for the year ended December 31, 2010 filed with the SEC on February 25, 2011, and those that may be identified from time to time in our reports and registration statements filed with the SEC. Forward-looking statements are made only as of the date of this press release and are based on management’s reasonable assumptions; however, these assumptions can be wrong or affected by known or unknown risks and uncertainties. Readers should not place undue reliance on these forward-looking statements and are cautioned that any such forward-looking statements are not guarantees of future performance. Except as otherwise required by law, we do not undertake any duty to update any of the forward-looking statements after the date of this press release to conform such statements to actual results or to changes in our expectations.

MCGRATH RENTCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
 
  Three Months Ended March 31,
(in thousands, except per share amounts)   2011   2010

REVENUES

 
Rental $ 54,026 $ 45,133
Rental Related Services   8,492   7,116
Rental Operations 62,518 52,249
Sales 9,934 8,937
Other   521   544

Total Revenues

  72,973   61,730
 

COSTS AND EXPENSES

Direct Costs of Rental Operations:
Depreciation of Rental Equipment 14,595 13,770
Rental Related Services 6,741 5,326
Other   9,540   8,972
Total Direct Costs of Rental Operations 30,876 28,068
Costs of Sales   6,245   5,880
Total Costs of Revenue   37,121   33,948
Gross Profit 35,852 27,782
Selling and Administrative Expenses   18,558   15,411
Income from Operations 17,294 12,371
Interest Expense   1,482   1,509
Income Before Provision for Income Taxes 15,812 10,862
Provision for Income Taxes   6,198   4,214
Net Income $ 9,614 $ 6,648
 
Earnings Per Share:
Basic $ 0.40 $ 0.28
Diluted $ 0.39 $ 0.28
 
Shares Used in Per Share Calculation:
Basic 24,258 23,826
Diluted 24,660 24,075
 
Cash Dividends Declared Per Share $ 0.230 $ 0.225
         
 

MCGRATH RENTCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
  March 31,   December 31,
(in thousands)   2011   2010
 

ASSETS

Cash $ 2,250 $ 990

Accounts Receivable, net of allowance for doubtful accounts of $1,700 in 2011 and 2010

74,923 76,488
Income Taxes Receivable 6,131
 
Rental Equipment, at cost:
Relocatable Modular Buildings 518,652 514,548
Electronic Test Equipment 253,230 250,125
Liquid and Solid Containment Tanks and Boxes   145,705     133,095  
917,587 897,768
Less Accumulated Depreciation   (309,472 )   (306,188 )
Rental Equipment, net   608,115     591,580  
 
Property, Plant and Equipment, net 89,462 83,861
Prepaid Expenses and Other Assets 16,887 13,944
Intangible Assets, net 12,695 12,868
Goodwill   27,700     27,700  
Total Assets $ 832,032   $ 813,562  
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:
Notes Payable $ 265,771 $ 265,640
Accounts Payable and Accrued Liabilities 52,689 49,612
Deferred Income 28,311 23,790
Deferred Income Taxes, net   184,285     179,543  
Total Liabilities   531,056     518,585  
 
Shareholders’ Equity:
Common Stock, no par value -
Authorized -- 40,000 shares

Issued and Outstanding -- 24,301 shares in 2011 and 24,235 shares in 2010

65,634 63,623
Retained Earnings   235,342     231,354  
Total Shareholders’ Equity   300,976     294,977  
Total Liabilities and Shareholders’ Equity $ 832,032   $ 813,562  
                 
 

MCGRATH RENTCORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
  Three Months Ended March 31,
(in thousands)   2011   2010
 

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income $ 9,614 $ 6,648

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:

Depreciation and Amortization 16,174 15,256
Provision for Doubtful Accounts 406 275

Non-Cash Stock-Based Compensation

1,024 1,019
Gain on Sale of Used Rental Equipment (3,055 ) (2,168 )
Change In:
Accounts Receivable 1,159 7,281
Income Taxes Receivable 6,131
Prepaid Expenses and Other Assets (2,943 ) 1,876
Accounts Payable and Accrued Liabilities (2,373 ) 1,058
Deferred Income 4,521 (5,379 )
Deferred Income Taxes   4,742     2,705  
Net Cash Provided by Operating Activities   35,400     28,571  
 

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of Rental Equipment (29,946 ) (25,063 )
Purchase of Property, Plant and Equipment (6,972 ) (1,199 )
Proceeds from Sale of Used Rental Equipment   7,114     5,231  
Net Cash Used in Investing Activities   (29,804 )   (21,031 )
 

CASH FLOWS FROM FINANCING ACTIVITIES:

Net Borrowings (Repayments) Under Bank Lines of Credit 131 (5,287 )
Proceeds from the Exercise of Stock Options 802 1,846

Excess Tax Benefit from Exercise and Disqualifying Disposition of Stock Options

185

326

Payment of Dividends   (5,454 )   (5,235 )
Net Cash Used in Financing Activities   (4,336 )   (8,350 )
 
Net Increase (Decrease) in Cash 1,260 (810 )
Cash Balance, beginning of period   990     1,187  
Cash Balance, end of period $ 2,250   $ 377  
 
Interest Paid, during the period $ 1,335   $ 1,219  
Net Income Taxes Paid (Refunds Received), during the period $ (5,067 ) $ 1,161  
Dividends Declared, not yet paid $ 5,590   $ 5,396  
Rental Equipment Acquisitions, not yet paid $ 10,631   $ 9,740  
                 
 

MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Three Months Ended March 31, 2011
  Mobile   TRS-   Adler  

 

 

 

(dollar amounts in thousands)

  Modular   RenTelco   Tanks  

Enviroplex

 

Consolidated

Revenues

Rental $ 19,775 $ 22,058 $ 12,193 $ $ 54,026
Rental Related Services   5,540       617       2,335             8,492
Rental Operations 25,315 22,675 14,528 62,518
Sales 3,873 5,913 103 45 9,934
Other   98       394       29             521
Total Revenues   29,286       28,982       14,660       45       72,973
 

Costs and Expenses

Direct Costs of Rental Operations:
Depreciation of Rental Equipment 3,419 9,391 1,785 14,595
Rental Related Services 4,216 501 2,024 6,741
Other   5,403       2,999       1,138             9,540

Total Direct Costs of Rental Operations

13,038 12,891 4,947 30,876
Costs of Sales   2,895       3,277       75       (2 )     6,245
Total Costs of Revenues   15,933       16,168       5,022       (2 )     37,121
 

Gross Profit

Rental 10,953 9,668 9,270 29,891
Rental Related Services   1,324       116       311             1,751
Rental Operations 12,277 9,784 9,581 31,642
Sales 978 2,636 28 47 3,689
Other   98       394       29             521

Total Gross Profit

13,353 12,814 9,638 47 35,852
Selling and Administrative Expenses   7,757       6,334       3,604       863       18,558
Income (Loss) from Operations $ 5,596     $ 6,480     $ 6,034     $ (816 ) 17,294
Interest Expense 1,482
Provision for Income taxes   6,198
Net Income $ 9,614
 

Other Information

Average Rental Equipment 1 $ 497,104 $ 251,477 $ 133,862
Average Monthly Total Yield 2 1.33 % 2.92 % 3.04 %
Average Utilization 3 66.8 % 65.2 % 86.0 %
Average Monthly Rental Rate 4 1.98 % 4.48 % 3.53 %
                     
 

1

 

Average Rental Equipment represents the cost of rental equipment excluding accessory equipment. For Mobile Modular and Adler Tanks, Average Rental Equipment also excludes new equipment inventory.

2

Average Monthly Total Yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.

3

Average Utilization is calculated by dividing the cost of Average Rental Equipment on rent by the total cost of Average Rental Equipment.

4

Average Monthly Rental Rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

 

MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Three Months Ended March 31, 2010
  Mobile   TRS-   Adler  

 

 

 

(dollar amounts in thousands)

  Modular   RenTelco   Tanks  

Enviroplex

 

Consolidated

Revenues

Rental $ 20,588 $ 18,507 $ 6,038 $ $ 45,133
Rental Related Services   4,926       521       1,669             7,116
Rental Operations 25,514 19,028 7,707 52,249
Sales 1,887 4,883 19 2,148 8,937
Other   98       434       12             544
Total Revenues   27,499       24,345       7,738       2,148       61,730
 

Costs and Expenses

Direct Costs of Rental Operations:
Depreciation of Rental Equipment 3,428 9,247 1,095 13,770
Rental Related Services 3,568 397 1,361 5,326
Other   5,086       2,887       999             8,972
Total Direct Costs of Rental Operations 12,082 12,531 3,455 28,068
Costs of Sales   1,248       3,139       21       1,472       5,880
Total Costs of Revenues   13,330       15,670       3,476       1,472       33,948
 

Gross Profit (Loss)

Rental 12,074 6,373 3,944 22,391
Rental Related Services   1,358       124       308             1,790
Rental Operations 13,432 6,497 4,252 24,181
Sales 639 1,744 (2 ) 676 3,057
Other   98       434       12             544
Total Gross Profit 14,169 8,675 4,262 676 27,782
Selling and Administrative Expenses   6,650       5,396       2,674       691       15,411
Income (Loss) from Operations $ 7,519     $ 3,279     $ 1,588     $ (15 ) 12,371
Interest Expense 1,509
Provision for Income taxes   4,214
Net Income $ 6,648
 

Other Information

Average Rental Equipment 1 $ 486,543 $ 239,371 $ 79,746
Average Monthly Total Yield 2 1.41 % 2.58 % 2.52 %
Average Utilization 3 68.0 % 64.6 % 67.9 %
Average Monthly Rental Rate 4 2.07 % 3.99 % 3.71 %
                     
 
1   Average Rental Equipment represents the cost of rental equipment excluding accessory equipment. For Mobile Modular and Adler Tanks, Average Rental Equipment also excludes new equipment inventory.
2 Average Monthly Total Yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.
3 Average Utilization is calculated by dividing the cost of Average Rental Equipment on rent by the total cost of Average Rental Equipment.
4 Average Monthly Rental Rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.
 




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