This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

McGrath RentCorp Announces Results For Third Quarter 2012

Stocks in this article: MGRC

TRS-RenTelco, our electronic test equipment division, rental revenues for the quarter increased by $1.8 million, or 7% to $26.5 million from a year ago. Divisional income from operations increased by 24% from the third quarter of 2011 to $10.2 million. The significantly higher percentage increase in profitability as compared to rental revenues was primarily related to lower direct SG&A and equipment depreciation expenses, partially offset by higher laboratory costs, all as a percentage of rental revenues from a year ago. Our results for TRS-RenTelco continue to reflect its discipline in strategic focus, strong brand following, operational efficiencies and an exceptionally talented and tenured work force.

Adler Tank Rentals, our tank and box division, rental revenues increased by $0.8 million, or 5% to $16.9 million from a year ago. Divisional income from operations decreased by $1.9 million or 20% year over year to $7.6 million. The decrease in profitability was primarily due to lower utilization driving higher rental equipment depreciation as a percentage of rental revenues, and higher inventory center costs from a year ago. As a result of the ongoing reduction in dry natural gas production in the Northeast and markedly lower utilization of Adler’s 21,000 gallon tank fleet in the region, we moved a large number of units to other regions, primarily to fill order opportunities. The one-time costs to transport these tanks were a material portion of the increase in inventory center expenses compared to a year ago.

The higher depreciation expense as a percentage of rental revenues was the result of a significant increase in year over year rental equipment inventory to support a larger geographic footprint and new customer growth opportunities, and lower equipment utilization levels, primarily in the Northeast, from a year ago. Division-wide Adler rental equipment utilization declined to 69.4% at the end of the third quarter compared to 90.5% a year ago; however, utilization increased from 67.5% from the end of the second quarter 2012. We are building the Adler brand across the continental U.S. and it is essential that we have the right mix and depth of inventory on the ground in all of the markets in which we operate in order to respond to a variety of end market needs. In fact, Adler’s industry mix of rental revenues for the third quarter of 2012 compared to the same period in 2011 reflects fracking related rentals decreasing from approximately 35% to 19%, while overall rental revenues increased 5%.

2 of 14

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,814.94 -2.96 -0.02%
S&P 500 2,067.03 -2.38 -0.12%
NASDAQ 4,758.2520 +3.36 0.07%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs