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McGrath RentCorp Announces Results For First Quarter 2013

Stocks in this article: MGRC

Our future business, financial condition and results of operations could differ materially from those anticipated by such forward-looking statements and are subject to risks and uncertainties including the risks set forth above, those discussed in Part II—Item 1A "Risk Factors" and elsewhere in our Form 10-K for the year ended December 31, 2012, which is expected to be filed  with the SEC on February 22, 2013, and those that may be identified from time to time in our reports and registration statements filed with the SEC. Forward-looking statements are made only as of the date of this press release and are based on management's reasonable assumptions; however, these assumptions can be wrong or affected by known or unknown risks and uncertainties. Readers should not place undue reliance on these forward-looking statements and are cautioned that any such forward-looking statements are not guarantees of future performance. Except as otherwise required by law, we do not undertake any duty to update any of the forward-looking statements after the date of this press release to conform such statements to actual results or to changes in our expectations.

 

MCG RATH RENTCORP CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
  Three Months Ended March 31,
(in thousands, except per share amounts) 2013 2012
REVENUES    
Rental  $ 60,601  $ 59,520
Rental Related Services  10,845  10,665
Rental Operations  71,446  70,185
Sales  16,765  8,106
Other  502  638
Total Revenues  88,713  78,929
     
COSTS AND EXPENSES    
Direct Costs of Rental Operations:    
Depreciation of Rental Equipment  16,602  15,401
Rental Related Services  8,922  8,553
Other  12,357  10,440
Total Direct Costs of Rental Operations  37,881  34,394
Costs of Sales  11,834  4,700
Total Costs of Revenues  49,715  39,094
Gross Profit  38,998  39,835
Selling and Administrative Expenses  21,638  21,361
Income from Operations  17,360  18,474
Interest Expense  2,203  2,173
Income Before Provision for Income Taxes  15,157  16,301
Provision for Income Taxes  5,942  6,390
Net Income  $ 9,215  $ 9,911
     
Earnings Per Share:    
Basic   $  0.37  $  0.40
Diluted   $  0.36  $  0.39
     
Shares Used in Per Share Calculation:    
Basic  25,003  24,639
Diluted  25,435  25,183
     
Cash Dividends Declared Per Share  $ 0.240  $ 0.235
 
 
 
 
MCGRATH RENTCORP CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
  March 31, December 31,
(in thousands) 2013 2012
     
ASSETS    
Cash  $  461  $  1,612
Accounts Receivable, net of allowance for doubtful accounts of $2,550 in 2013 and $3,000 in 2012  87,026  92,256
     
Rental Equipment, at cost:    
Relocatable Modular Buildings  558,471  551,101
Electronic Test Equipment  267,411  266,934
Liquid and Solid Containment Tanks and Boxes  261,483  254,810
   1,087,365  1,072,845
Less Accumulated Depreciation  (361,265)  (353,992)
Rental Equipment, net  726,100  718,853
     
Property, Plant and Equipment, net  100,584  101,031
Prepaid Expenses and Other Assets  13,979  19,507
Intangible Assets, net  11,281   11,487
Goodwill  27,700  27,700
Total Assets  $ 967,131  $ 972,446
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
Liabilities:    
Notes Payable  $ 281,251   $ 302,000
Accounts Payable and Accrued Liabilities  62,353  52,220
Deferred Income  20,642  26,924
Deferred Income Taxes, net  230,021  226,564
Total Liabilities  594,267  607,708
     
Shareholders' Equity:    
Common Stock, no par value --    
Authorized - 40,000 shares    
Issued and Outstanding – 25,191 shares in 2013 and 24,931 shares in 2012  90,405  85,342
Retained Earnings  282,459  279,396
Total Shareholders' Equity  372,864  364,738
Total Liabilities and Shareholders' Equity  $ 967,131  $ 972,446
 
 
 
 
MCGRATH RENTCORP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
  Three Months Ended March 31,
(in thousands) 2013 2012
     
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net Income   $ 9,215   $ 9,911
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:    
Depreciation and Amortization  18,808  17,516
Provision for Doubtful Accounts  696   373
Non-Cash Stock-Based Compensation  1,126  994
Gain on Sale of Used Rental Equipment  (3,334)  (3,073)
Change In:    
Accounts Receivable  4,534   7,705
Prepaid Expenses and Other Assets  5,528  (4,156)
Accounts Payable and Accrued Liabilities  7,872  (339)
Deferred Income  (6,282)  1,989
Deferred Income Taxes  3,457  4,562
Net Cash Provided by Operating Activities   41,620   35,482
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of Rental Equipment  (25,151)  (35,039)
Purchase of Property, Plant and Equipment  (1,553)  (1,823)
Proceeds from Sale of Used Rental Equipment   6,805   6,776
Net Cash Used in Investing Activities  (19,899)  (30,086)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Net Borrowings (Repayments) Under Bank Lines of Credit  (20,749)  (4,382)
Proceeds from the Exercise of Stock Options  3,222   3,147
Excess Tax Benefit from Exercise and Disqualifying Disposition of Stock Options  715   630
Payment of Dividends  (6,060)  (5,655)
Net Cash Used in Financing Activities  (22,872)  (6,260)
     
Net Decrease in Cash  (1,151)  (864)
Cash Balance, beginning of period   1,612   1,229
Cash Balance, end of period  $ 461  $ 365
     
Interest Paid, during the period  $ 1,276  $ 1,071
Net Income Taxes Paid (Refunds Received), during the period  $ 1,519  $ 1,199
Dividends Accrued During the period, not yet paid  $ 6,133  $ 6,268
Rental Equipment Acquisitions, not yet paid  $  6,660  $ 12,682
 
 
 
 
MCGRATH RENTCORP BUSINESS SEGMENT DATA (unaudited) Three Months Ended March 31, 2013
( dollar amounts in thousands) Mobile Modular TRS-RenTelco Adler Tanks Enviroplex Consolidated
Revenues          
Rental $ 19,329  $ 24,841  $ 16,431 $ — $ 60,601
Rental Related Services 5,914 666 4,265  — 10,845
Rental Operations 25,243 25,507 20,696  — 71,446
Sales 3,644 6,842 86  6,193 16,765
Other  104   365 33 502
Total Revenues  28,991  32,714 20,815 6,193 88,713
           
Costs and Expenses          
Direct Costs of Rental Operations:          
Depreciation of Rental Equipment 3,518 9,816 3,268 16,602
Rental Related Services 4,745 624 3,553 8,922
Other 6,367 3,225 2,765 12,357
Total Direct Costs of Rental Operations 14,630 13,665 9,586 37,881
Costs of Sales 2,699 3,455 86 5,594 11,834
Total Costs of Revenues 17,329 17,120 9,672 5,594 49,715
           
Gross Profit          
Rental  9,444 11,800 10,398 31,642
Rental Related Services  1,169  42 712 1,923
Rental Operations  10,613  11,842 11,110 33,565
Sales   945  3,387 599 4,931
Other  104 365 33 —  502
Total Gross Profit    11,662 15,594 11,143 599 38,998
Selling and Administrative Expenses 8,800 6,094 5,992 752 21,638
Income (Loss) from Operations $   2,862 $ 9,500 $ 5,151  $  (153) 17,360
Interest Expense         2,203
Provision for Income taxes         5,942
Net Income         $ 9,215
           
Other Information          
Average Rental Equipment 1  $ 535,139  $ 266,054  $252,194    
Average Monthly Total Yield 2  1.20%   3.11%  2.18%    
Average Utilization 3  66.4%  63.8%  64.7%    
Average Monthly Rental Rate 4  1.81%   4.88%  3.37%    
 
1  Average Rental Equipment represents the cost of rental equipment excluding accessory equipment.  For Mobile Modular and Adler Tanks, Average Rental Equipment also excludes new equipment inventory.
2  Average Monthly Total Yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.
3  Average Utilization is calculated by dividing the cost of Average Rental Equipment on rent by the total cost of Average Rental Equipment.
4  Average Monthly Rental Rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.
 
 
 
MCGRATH RENTCORP BUSINESS SEGMENT DATA (unaudited) Three Months Ended March 31, 2012
( dollar amounts in thousands) Mobile Modular TRS-RenTelco Adler Tanks Enviroplex   Consolidated
Revenues          
Rental $ 19,891  $  23,412  $ 16,217 $ — $ 59,520
Rental Related Services 6,120 829 3,716  — 10,665
Rental Operations 26,011 24,241 19,933  — 70,185
Sales 2,227 5,765 107  7 8,106
Other  117  491 30 638
Total Revenues  28,355  30,497 20,070 7 78,929
           
Costs and Expenses          
Direct Costs of Rental Operations:          
Depreciation of Rental Equipment 3,474 9,284 2,643 15,401
Rental Related Services 4,891 843 2,819 8,553
Other 5,941 3,239 1,260 10,440
Total Direct Costs of Rental Operations 14,306 13,366 6,722 34,394
Costs of Sales 1,568 3,077 42 13 4,700
Total Costs of Revenues 15,874 16,443 6,764 13 39,094
           
Gross Profit (Loss)          
Rental  10,476 10,889 12,314 33,679
Rental Related Services  1,229  (14) 897 2,112
Rental Operations  11,705  10,875 13,211 35,791
Sales  659  2,688 65 (6) 3,406
Other   117 491 30 —  638
Total Gross Profit  12,481 14,054 13,306  (6) 39,835
Selling and Administrative Expenses 8,487 6,696 5,097 1,081 21,361
Income (Loss) from Operations $ 3,994 $ 7,358 $ 8,209  $ (1,087) 18,474
Interest Expense         2,173
Provision for Income taxes         6,390
Net Income         $ 9,911
           
Other Information          
Average Rental Equipment 1  $ 516,720  $ 260,578  $201,203    
Average Monthly Total Yield 2  1.28%  3.00%  2.69%    
Average Utilization 3  66.5%  65.5%  76.5%    
Average Monthly Rental Rate 4  1.93%  4.57%  3.51%    
 
1  Average Rental Equipment represents the cost of rental equipment excluding accessory equipment. For Mobile Modular and Adler Tanks, Average Rental Equipment also excludes new equipment inventory.
2  Average Monthly Total Yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.
3  Average Utilization is calculated by dividing the cost of Average Rental Equipment on rent by the total cost of Average Rental Equipment.
4  Average Monthly Rental Rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.
 
 

Reconciliation of Adjusted EBITDA to the most directly comparable GAAP measures

To supplement the Company's financial data presented on a basis consistent with accounting principles generally accepted in the United States of America ("GAAP"), the Company presents Adjusted EBITDA which is defined by the Company as net income before interest expense, provision for income taxes, depreciation, amortization, and non-cash stock-based compensation. The Company presents Adjusted EBITDA as a financial measure as management believes it provides useful information to investors regarding the Company's liquidity and financial condition and because management, as well as the Company's lenders, use this measure in evaluating the performance of the Company. 

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