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McGrath RentCorp Announces Results For First Quarter 2012

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, 2012 filed with the SEC on May 3, 2012 and in our Form 10-K for the year ended December 31, 2011 filed with the SEC on February 29, 2012, 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)   2012   2011

REVENUES

 
Rental $ 59,520 $ 54,026
Rental Related Services   10,665   8,492
Rental Operations 70,185 62,518
Sales 8,106 9,934
Other   638   585
Total Revenues   78,929   73,037
 

COSTS AND EXPENSES

Direct Costs of Rental Operations:
Depreciation of Rental Equipment 15,401 14,595
Rental Related Services 8,553 6,741
Other   10,440   9,540
Total Direct Costs of Rental Operations 34,394 30,876
Costs of Sales   4,700   6,245
Total Costs of Revenues   39,094   37,121
Gross Profit 39,835 35,916
Selling and Administrative Expenses   21,361   18,622
Income from Operations 18,474 17,294
Interest Expense   2,173   1,482
Income Before Provision for Income Taxes 16,301 15,812
Provision for Income Taxes   6,390   6,198
Net Income $ 9,911 $ 9,614
 
Earnings Per Share:
Basic $ 0.40 $ 0.40
Diluted $ 0.39 $ 0.39
Shares Used in Per Share Calculation:
Basic 24,639 24,258
Diluted 25,183 24,660
 
Cash Dividends Declared Per Share $ 0.235 $ 0.230

MCGRATH RENTCORP
CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

  March 31,   December 31,
(in thousands)   2012     2011  
 

ASSETS

Cash $ 365 $ 1,229

Accounts Receivable, net of allowance for doubtful accounts of $1,700 in 2012 and $1,500 in 2011

84,593 92,671
 
Rental Equipment, at cost:
Relocatable Modular Buildings 541,357 539,147
Electronic Test Equipment 262,845 258,586
Liquid and Solid Containment Tanks and Boxes   223,797     201,456  
1,027,999 999,189
Less Accumulated Depreciation   (334,422 )   (326,043 )
Rental Equipment, net   693,577     673,146  
 
Property, Plant and Equipment, net 94,616 94,702
Prepaid Expenses and Other Assets 21,326 17,170
Intangible Assets, net 12,105 12,311
Goodwill   27,700     27,700  
Total Assets $ 934,282   $ 918,929  
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:
Notes Payable $ 292,118 $ 296,500
Accounts Payable and Accrued Liabilities 63,327 58,854
Deferred Income 27,056 25,067
Deferred Income Taxes, net   209,928     205,366  
Total Liabilities   592,429     585,787  
 
Shareholders’ Equity:
Common Stock, no par value -
Authorized -- 40,000 shares

Issued and Outstanding -- 24,748 shares in 2012 and 24,576 shares in 2011

79,649 74,878
Retained Earnings   262,204     258,264  
Total Shareholders’ Equity   341,853     333,142  
Total Liabilities and Shareholders’ Equity $ 934,282   $ 918,929  

MCGRATH RENTCORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

  Three Months Ended March 31,
(in thousands)   2012     2011  
 

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income $ 9,911 $ 9,614
Adjustments to Reconcile Net Income to Net Cash Provided

by Operating Activities:

Depreciation and Amortization 17,516 16,174
Provision for Doubtful Accounts 373 406
Non-Cash Stock-Based Compensation 994 1,024
Gain on Sale of Used Rental Equipment (3,073 ) (3,055 )
Change In:
Accounts Receivable 7,705 1,159
Income Taxes Receivable 6,131
Prepaid Expenses and Other Assets (4,156 ) (2,943 )
Accounts Payable and Accrued Liabilities (339 ) (2,373 )
Deferred Income 1,989 4,521
Deferred Income Taxes   4,562     4,742  
Net Cash Provided by Operating Activities   35,482     35,400  
 

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of Rental Equipment (35,039 ) (29,946 )
Purchase of Property, Plant and Equipment (1,823 ) (6,972 )
Proceeds from Sale of Used Rental Equipment   6,776     7,114  
Net Cash Used in Investing Activities   (30,086 )   (29,804 )
 

CASH FLOWS FROM FINANCING ACTIVITIES:

Net Borrowings (Repayments) Under Bank Lines of Credit (4,382 ) 131
Proceeds from the Exercise of Stock Options 3,147 802

Excess Tax Benefit from Exercise and Disqualifying Disposition of Stock Options

630 185
Payment of Dividends   (5,655 )   (5,454 )
Net Cash Used in Financing Activities   (6,260 )   (4,336 )
 
Net Increase (Decrease) in Cash (864 ) 1,260
Cash Balance, beginning of period   1,229     990  
Cash Balance, end of period $ 365   $ 2,250  
 
Interest Paid, during the period $ 1,071   $ 1,335  
Net Income Taxes Paid (Refunds Received), during the period $ 1,199   $ (5,067 )
Dividends Accrued $ 6,268   $ 5,590  
Rental Equipment Acquisitions, not yet paid $ 12,682   $ 10,631  

MCGRATH RENTCORP

BUSINESS SEGMENT DATA (unaudited)

Three Months Ended March 31, 2012

 

 

( dollar amounts in thousands)

  Mobile Modular   TRS-RenTelco   Adler Tanks  

Enviroplex

 

Consolidated

Revenues

         
Rental $ 19,891 $ 23,412 $ 16,217 $ $ 59,520
Rental Related Services   6,120     829     3,716         10,665
Rental Operations 26,011 24,241 19,933 70,185
Sales 2,227 5,765 107 7 8,106
Other   117     491     30         638
Total Revenues   28,355     30,497     20,070     7     78,929
 

Costs and Expenses

Direct Costs of Rental Operations:
Depreciation of Rental Equipment 3,474 9,284 2,643 15,401
Rental Related Services 4,891 843 2,819 8,553
Other   5,941     3,239     1,260         10,440
Total Direct Costs of Rental Operations 14,306 13,366 6,722 34,394
Costs of Sales   1,568     3,077     42     13     4,700
Total Costs of Revenues   15,874     16,443     6,764     13     39,094
 

Gross Profit (Loss)

Rental 10,476 10,889 12,314 33,679
Rental Related Services   1,229     (14 )   897         2,112
Rental Operations 11,705 10,875 13,211 35,791
Sales 659 2,688 65 (6 ) 3,406
Other   117     491     30         638
Total Gross Profit (Loss) 12,481 14,054 13,306 (6 ) 39,835
Selling and Administrative Expenses   8,487     6,696     5,097     1,081     21,361
Income (Loss) from Operations $ 3,994   $ 7,358   $ 8,209   $ (1,087 ) 18,474
Interest Expense 2,173
Provision for Income taxes   6,390
Net Income $ 9,911
 

Other Information

Average Rental Equipment 1 $ 516,720 $ 260,578 $ 201,203
Average Monthly Total Yield 2 1.28 % 3.00 % 2.69 %
Average Utilization 3 66.5 % 65.5 % 76.5 %
Average Monthly Rental Rate 4 1.93 % 4.57 % 3.51 %

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, 2011

 

 

( dollar amounts in thousands)

  Mobile Modular   TRS-RenTelco   Adler 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     458     29         585
Total Revenues   29,286     29,046     14,660     45     73,037
 

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     458     29         585
Total Gross Profit 13,353 12,878 9,638 47 35,916
Selling and Administrative Expenses   7,757     6,398     3,604     863     18,622
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.




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