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Rental Revenues Increase 2% EPS Decreases 8% to $0.36 for the Quarter
LIVERMORE, Calif., May 1, 2013 (GLOBE NEWSWIRE) -- McGrath RentCorp (Nasdaq:MGRC) (the "Company"), a diversified business to business rental company, today announced revenues for the quarter ended March 31, 2013, of $88.7 million, an increase of 12%, compared to $78.9 million in the first quarter of 2012. The Company reported net income of $9.2 million, or $0.36 per diluted share for the first quarter of 2013, compared to net income of $9.9 million, or $0.39 per diluted share, in the first quarter of 2012.
Dennis Kakures, President and CEO of McGrath RentCorp, made the following comments regarding these results and future expectations:
"Although Company-wide rental revenues increased by only 2%, and EPS declined by 8% for the quarter from a year ago, our overall results mask the underlying favorable business activity levels and momentum we are experiencing in each of our rental businesses.
TRS-RenTelco, our electronics division, rental revenues for the quarter increased by $1.4 million, or 6%, to $24.8 million from a year ago. Divisional income from operations increased by 29%, or $2.1 million, to $9.5 million for the quarter. The significantly higher percentage increase in profitability as compared to rental revenues was primarily related to lower SG&A, equipment depreciation and laboratory expenses all as a percentage of rental revenues from a year ago. In addition, the division benefited from an increase in gross profit on equipment sales of $0.7 million, or 26%, to $3.4 million 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 experienced work force.
Rental revenues at Adler Tank Rentals, our tank and box division grew by 1%, or $0.2 million, to $16.4 million compared to a year ago. There is typically some seasonality in the tank and box rental business during the first quarter in the colder weather geographies. First month's rental bookings for the quarter were 28% higher than for the same period in 2012 and reflect higher year over year booking activity levels in all of Adler Tank Rentals' regional markets. We would expect these higher booking levels to be reflected in our 2013 financial results in the quarters ahead. However, divisional income from operations declined 37%, or $3.1 million, to $5.2 million for the quarter. The quarterly decline in profitability from a year ago is primarily related to higher equipment depreciation expense as a percentage of rents, and increased costs for interregional equipment transportation, salaries for new hires, bad debt, and fleet maintenance and supplies. Although we again had significant expense during the quarter related to underutilized rental equipment moving from the dry natural gas Marcellus region to other Adler geographies in need of equipment, we anticipate 2013 expenses for interregional equipment transportation expenses to be markedly lower than in 2012. During the quarter, we continued our close monitoring, escalation and clean-up of delinquent customer account receivables, as well as our credit and collection process improvements.