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Textainer Group Holdings Limited Reports Second-Quarter 2012 Results And Increases Quarterly Dividend

Textainer's views, estimates, plans and outlook as described within this document may change subsequent to the release of this press release. Textainer is under no obligation to modify or update any or all of the statements it has made herein despite any subsequent changes Textainer may make in its views, estimates, plans or outlook for the future.

 
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
Three and Six Months Ended June 30, 2012 and 2011
(Unaudited)
(All currency expressed in United States dollars in thousands, except per share amounts)
       

 

 

Three Months Ended June 30,

Six Months Ended June 30,

2012 2011 2012 2011
 
Revenues:
Lease rental income $ 91,791 $ 83,049 $ 179,679 $ 155,408
Management fees 7,293 7,615 14,094 15,299
Trading container sales proceeds 12,744 5,655 24,281 10,420
Gains on sale of containers, net   8,162     9,417     19,451     15,811  
Total revenues   119,990     105,736     237,505     196,938  
Operating expenses:
Direct container expense 6,104 4,315 12,164 8,273
Cost of trading containers sold 11,130 5,024 21,132 9,190
Depreciation expense 22,801 24,001 44,381 42,867
Amortization expense 1,299 1,574 2,605 3,332
General and administrative expense 5,822 6,043 11,545 12,241
Short-term incentive compensation expense 1,322 1,494 2,314 2,453
Long-term incentive compensation expense 1,524 1,372 3,678 3,108
Bad debt expense, net 743 408 2,461 544
Gain on sale of containers to noncontrolling interest   -     (19,773 )   -     (19,773 )
Total operating expenses   50,745     24,458     100,280     62,235  
Income from operations   69,245     81,278     137,225     134,703  
Other income (expense):
Interest expense (18,531 ) (9,011 ) (33,250 ) (16,534 )
Interest income 35 7 63 14
Realized losses on interest rate swaps and caps, net (2,529 ) (2,765 ) (5,079 ) (5,407 )
Unrealized gains (losses) on interest rate swaps and caps, net 1,025 (4,453 ) 2,073 (2,242 )
Other, net   (1 )   (79 )   (2 )   (130 )
Net other expense   (20,001 )   (16,301 )   (36,195 )   (24,299 )
Income before income tax and noncontrolling interest 49,244 64,977 101,030 110,404
Income tax expense   (4,122 )   (3,766 )   (6,445 )   (6,380 )
Net income 45,122 61,211 94,585 104,024

Less: Net loss (income) attributable to the noncontrolling interest

  687   (9,514 )   1,134   (15,137 )
Net income attributable to Textainer Group Holdings
Limited common shareholders $ 45,809 $ 51,697   $ 95,719 $ 88,887  
 

Net income attributable to Textainer Group Holdings Limited common shareholders per share:

Basic $ 0.92 $ 1.06 $ 1.93 $ 1.82
Diluted $ 0.91 $ 1.03 $ 1.90 $ 1.78
 
Weighted average shares outstanding (in thousands):
Basic 49,543 48,899 49,484 48,780
Diluted 50,358 49,975 50,442 49,855
 
Other comprehensive income:
Foreign currency translation adjustments   (72 )   38     5     120  
Comprehensive income 45,050 61,249 94,590 104,144
Less: Comprehensive loss (income) attributable to the noncontrolling interest   687     (9,514 )   1,134     (15,137 )
Comprehensive income attributable to Textainer Group Holdings
Limited common shareholders $ 45,737   $ 51,735   $ 95,724   $ 89,007  
 
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
June 30, 2012 and December 31, 2011
(Unaudited)
(All currency expressed in United States dollars in thousands)
 
2012 2011

 

 

Assets

Current assets:
Cash and cash equivalents $ 82,152 $ 74,816

Accounts receivable, net of allowance for doubtful accounts of $8,751 and $7,840 in 2012 and 2011, respectively

88,689 86,428
Net investment in direct financing and sales-type leases 30,472 25,075
Trading containers 15,081 12,970
Containers held for sale 9,250 7,832
Prepaid expenses 17,945 10,243
Deferred taxes 2,441 2,443
Due from affiliates, net   14     -  
Total current assets 246,044 219,807
Restricted cash 46,628 45,858

Containers, net of accumulated depreciation of $407,021 and $377,731 at 2012 and 2011, respectively

2,313,057 1,903,855
Net investment in direct financing and sales-type leases 106,888 85,121

Fixed assets, net of accumulated depreciation of $8,805 and $9,027 at 2012 and 2011, respectively

1,680 1,717

Intangible assets, net of accumulated amortization of $33,549 and $33,340 at 2012 and 2011, respectively

43,845 46,675
Other assets   15,912     7,171  
Total assets $ 2,774,054   $ 2,310,204  
Liabilities and Equity
Current liabilities:
Accounts payable $ 3,116 $ 2,616
Accrued expenses 12,033 18,491
Container contracts payable 232,221 25,510
Deferred revenue 2,558 6,245
Due to owners, net 14,195 15,812
Revolving credit facilities 123,500 -
Secured debt facility - 41,035
Bonds payable   131,500     91,500  
Total current liabilities 519,123 201,209
Revolving credit facilities 36,084 133,047
Secured debt facilities 642,000 779,383
Bonds payable 772,041 464,226
Deferred revenue 73 1,136
Interest rate swaps and caps 14,037 16,110
Income tax payable 27,363 22,729
Deferred taxes   6,672     7,438  
Total liabilities   2,017,393     1,625,278  
Equity:
Textainer Group Holdings Limited shareholders' equity:

Common shares, $0.01 par value. Authorized 140,000,000 shares; issued and outstanding 49,567,852 and 48,951,114 at 2012 and 2011, respectively

496 490
Additional paid-in capital 165,114 154,460
Accumulated other comprehensive loss (23 ) (28 )
Retained earnings   586,521     528,906  
Total Textainer Group Holdings Limited shareholders’ equity 752,108 683,828
Noncontrolling interest   4,553     1,098  
Total equity   756,661     684,926  
Total liabilities and equity $ 2,774,054   $ 2,310,204  
 
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2012 and 2011
(Unaudited)
(All currency expressed in United States dollars in thousands)
 
  Six Months Ended

June 30,

2012 2011
Cash flows from operating activities:
Net income $ 94,585   $ 104,024  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense 44,381 42,867
Bad debt expense, net 2,461 544
Unrealized (gains) losses on interest rate swaps and caps, net (2,073 ) 2,242
Amortization of debt issuance costs 6,370 3,679
Amortization of intangible assets 2,605 3,332
Amortization of acquired below-market leases (33 ) (294 )
Amortization of deferred revenue (4,532 ) (3,907 )
Amortization of unearned income on direct financing and sales-type leases (5,407 ) (4,551 )
Gains on sale of containers, net (19,451 ) (15,811 )
Gain on sale of containers to noncontrolling interest - (19,773 )
Share-based compensation expense 4,190 3,261
Changes in operating assets and liabilities   (14,571 )   (19,619 )
Total adjustments   13,940     (8,030 )
Net cash provided by operating activities   108,525     95,994  
Cash flows from investing activities:
Purchase of containers and fixed assets (316,021 ) (527,085 )
Payment for Textainer Marine Containers Ltd. capital restructuring, net of cash acquired - (3,786 )
Proceeds from sale of containers and fixed assets 47,563 35,410
Receipt of principal payments on direct financing and sales-type leases   18,157     14,973  
Net cash used in investing activities   (250,301 )   (480,488 )
Cash flows from financing activities:
Proceeds from revolving credit facilities 150,530 137,000
Principal payments on revolving credit facilities (123,993 ) (40,000 )
Proceeds from secured debt facilities 654,000 336,000
Principal payments on secured debt facilities (832,697 ) (353,803 )
Proceeds from bonds payable 400,000 400,000
Principal payments on bonds payable (52,418 ) (25,750 )
Increase in restricted cash (770 ) (20,907 )
Debt issuance costs (18,500 ) (7,472 )
Issuance of common shares upon exercise of share options 3,763 5,626
Excess tax benefit from share-based compensation awards 2,707 3,034
Capital contributions from noncontrolling interest 4,589 -
Dividends paid   (38,104 )   (29,273 )
Net cash provided by financing activities   149,107     404,455  
Effect of exchange rate changes   5     120  
Net increase in cash and cash equivalents 7,336 20,081
Cash and cash equivalents, beginning of the year   74,816     57,081  
Cash and cash equivalents, end of period $ 82,152   $ 77,162  
 

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIESReconciliation of GAAP financial measures to non-GAAP financial measuresThree and Six Months Ended June 30, 2012 and 2011(Unaudited)(All currency expressed in United States dollars in thousands, except per share amounts)

(1) The following is a reconciliation of certain GAAP measures to non-GAAP financial measures (such items listed in (a) to (d) below and defined as “Non-GAAP Measures”) for the three and six months ended June 30, 2012 and 2011, including:

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