- Debt increased $6.2 million during the quarter to $314.2 million, with the Company’s funded debt (notes payable) to equity ratio decreasing from 0.89 to 1 at June 30, 2012 to 0.88 to 1 at September 30, 2012. As of September 30, 2012, the Company had capacity to borrow an additional $215.8 million under its lines of credit.
- Dividend rate increased 2% to $0.235 per share for the third quarter 2012 compared to the third quarter 2011. On an annualized basis, this dividend represents a 3.6% yield on the October 31, 2012 close price of $26.26.
- Adjusted EBITDA decreased 8% to $42.2 million for the third quarter of 2012. At September 30, 2012, the Company’s ratio of funded debt to the last twelve months actual Adjusted EBITDA was 1.96 to 1 compared to 1.88 to 1 at June 30, 2012. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization and non-cash stock-based compensation. A reconciliation of net income to Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating activities can be found at the end of this release.
You should read this press release in conjunction with the financial statements and notes thereto included in the Company’s latest Forms 10-K and 10-Q and other SEC filings. You can visit the Company’s web site at www.mgrc.com to access information on McGrath RentCorp, including the latest Forms 10-K and 10-Q and other SEC filings.
The Company revises its previous 2012 full-year earnings guidance range of $1.70 to $1.85 to an updated range of $1.70 to $1.75 per diluted share.For the full-year 2012, the Company expects approximately 5% to 6% growth in rental operations revenues over 2011 and gross profit from sales to be approximately 25% to 30% lower than 2011. Rental equipment depreciation expense is expected to increase to approximately $63 million, driven by rental fleet growth. Selling and administrative costs are expected to increase to approximately $84 million to support business growth, and continued investment in Adler Tanks and our portable storage initiative. Full year interest expense is forecasted to be approximately $9 million. The Company expects the 2012 effective tax rate to be 39.2% and the diluted share count to be approximately 25.2 million shares. These forward-looking statements reflect McGrath RentCorp’s expectations as of November 1, 2012. Actual 2012 full-year earnings per share results may be materially different and affected by many factors, including those factors outlined in the “forward-looking statements” paragraph at the end of this press release.