McGrath RentCorp (NASDAQ: MGRC) (the “Company”), a diversified business to business rental company, today announced revenues for the quarter ended March 31, 2012, of $78.9 million, an increase of 8%, compared to $73.0 million in the first quarter of 2011. The Company reported net income of $9.9 million, or $0.39 per diluted share for the first quarter of 2012, compared to net income of $9.6 million, or $0.39 per diluted share, in the first quarter of 2011.
Dennis Kakures, President and CEO of McGrath RentCorp, made the following comments regarding these results and future expectations:
“Our Company-wide 10% increase in rental revenues for the quarter from a year ago reflects continuing favorable business activity and rental revenue increases in both our tank and electronics rental businesses. This is McGrath RentCorp’s 7th consecutive quarter of double-digit, year over year, rental revenue growth coming out of the Great Recession. Despite a 7% increase in company-wide operating income, EPS was unchanged from the prior year because of higher interest expense and a higher diluted share count.
Adler Tank Rentals, our tank and box division, rental revenues increased 33% to $16.2 million for the quarter, from $12.2 million a year ago. Divisional income from operations increased 36% year over year to $8.2 million. The strong increase in rental revenues and income from operations were directly related to continuing overall favorable business conditions and approximately 34% more equipment, by dollar cost, on rent from a year ago. Despite lower business activity levels in Northeastern gas fields, Adler’s other regional operations all experienced favorable year over year growth. Utilization for the quarter fell to 76% from 86% a year ago, primarily due to lower gas field activity and some seasonality. It’s important to keep in mind that Adler annual utilization for the three-year period from 2009 to 2011, was 66%, 76% and 86% respectively. We are still learning what normal utilization levels will look like over time for our tank / box rental business. We are working to redeploy this idle rental equipment, and are pleased with the number of potential opportunities we are experiencing.