For the first quarter of 2013, the Company's TRS-RenTelco division reported a 29% increase in income from operations to $9.5 million. Rental revenues increased 6% to $24.8 million. The increase in rental revenues and flat other direct costs of $3.2 million, partly offset by a 6% increase in depreciation to $9.8 million, resulted in an increase in gross profit on rental revenues of 8% to $11.8 million. Sales revenues increased 19% to $6.8 million with gross profit on sales revenues increasing 26% to $3.4 million, primarily due to higher gross margins on used equipment sales revenues in the first quarter of 2013. Selling and administrative expenses decreased 9% to $6.1 million primarily due to decreased salary and benefit costs related to the exit of the environmental test equipment business in November 2012.
For the first quarter of 2013, the Company's Adler Tanks division reported a 37% decrease in income from operations to $5.2 million. Other direct costs increased 119% to $2.8 million and depreciation expense increased 24% to $3.3 million, while rental revenues increased 1% to $16.4 million, which resulted in a decrease in gross profit on rental revenues of 16% to $10.4 million. Rental related services revenues increased 15% to $4.3 million, with gross profit on rental related services decreasing 21% to $0.7 million. Selling and administrative expenses increased 18% to $6.0 million, primarily due to increased personnel and benefit costs and bad debt expense.OTHER HIGHLIGHTS
- Debt decreased $20.7 million during the quarter to $281.3 million, with the Company's funded debt (notes payable) to equity ratio decreasing from 0.83 to 1 at December 31, 2012 to 0.75 to 1 at March 31, 2013. As of March 31, 2013, the Company had capacity to borrow an additional $248.7 million under its lines of credit.
- Dividend rate increased 2% to $0.24 per share for the first quarter 2013 compared to the first quarter 2012. On an annualized basis, this dividend represents a 3.1% yield on the April 30, 2013 close price of $31.06.
- Adjusted EBITDA increased 1% to $37.3 million for the first quarter of 2013 compared to the first quarter of 2012. At March 31, 2013, the Company's ratio of funded debt to the last twelve months actual Adjusted EBITDA was 1.77 to 1 compared to 1.91 to 1 at December 31, 2012. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization and other 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.