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Textainer Group Holdings Limited Reports Second Quarter 2013 Results And Increases Quarterly Dividend

Stocks in this article: TGH

Textainer Group Holdings Limited (NYSE: TGH) (“Textainer”, “the Company”, “we” and “our”), the world’s largest lessor of intermodal containers based on fleet size reported second quarter 2013 results.

“The second quarter was marked by attractive growth in both our lease rental income and net income,” commented Philip K. Brewer, President and Chief Executive Officer of Textainer. “EBITDA also increased significantly from the second quarter of last year demonstrating our strong generation of cash.

“Total capex ordered for delivery in 2013 was $692 million. Our fleet size has grown by 9.4% over the past twelve months to 2.9 million TEU. Utilization has averaged 95.1% year to date and is 94.3% currently. Utilization has been quite stable remaining within 1% of its current level for more than four months.

“Although the demand for containers improved in the second quarter, we continue to see compression of returns due to the high level of liquidity among container lessors and the ease with which containers can be purchased at factories. We expect these market conditions to continue for the near term. We are also expecting a muted peak season with utilization remaining near today’s levels as the market stabilizes,” added Mr. Brewer.

Business Highlights:

  • Continued strong pace of expansion, investing $494 million in new and used containers year-to-date following $198 million invested in new containers in the fourth quarter of 2012 for lease outs in 2013;
  • Total fleet size grew by 9.4% to 2.9 million TEU, given the strong pace of investment over the past year;
  • Announced a collaboration with Trifleet allowing expansion into tank leasing with one of the leaders in the industry;
  • Reduced our average effective interest rate (which includes interest rate swaps) by 145 basis points year-over-year and by 34 basis points compared to the prior quarter, while increasing the size of several financing facilities;
  • Achieved average utilization of 94.7% during the quarter and 94.3% currently; and
  • Increased dividend to $0.47 per share, resulting in the Company’s fourteenth consecutive quarterly increase.

Key Financial Information (in thousands except for per share and TEU amounts):

      2013     2012   % Change       2013     2012   % Change
Total revenues   $ 130,084   $ 119,990   8.4%     $ 258,847   $ 237,505   9.0%
Income from operations   $ 72,061   $ 69,245   4.1%     $ 148,131   $ 137,225   7.9%
Net income attributable to Textainer Group Holdings Limited common shareholders   $ 48,815   $ 45,809   6.6%     $ 97,149   $ 95,719   1.5%
Net income attributable to Textainer Group Holdings Limited common shareholders per diluted common share   $ 0.86   $ 0.91   -5.5%     $ 1.71   $ 1.90   -10.0%
Adjusted net income (1)   $ 45,668   $ 44,674   2.2%     $ 91,790   $ 93,516   -1.8%
Adjusted net income per diluted common share (1)   $ 0.80   $ 0.89   -10.1%     $ 1.61   $ 1.85   -13.0%
Adjusted EBITDA (1)   $ 106,227   $ 92,698   14.6%     $ 214,767   $ 183,052   17.3%
Average fleet utilization     94.7%     97.5%   -2.9%       95.1%     97.2%   -2.2%
Total fleet size at end of period (TEU)     2,860,549     2,615,282   9.4%              
Owned percentage of total fleet at end of period     74.0%     60.4%   22.5%              

“Adjusted net income” and “adjusted EBITDA” are Non-GAAP Measures that are reconciled to GAAP measures in footnote 1. “Adjusted net income” is defined as net income attributable to Textainer Group Holdings Limited common shareholders before unrealized gains on interest rate swaps and caps, net and related impact of reconciling item on net income (loss) attributable to the noncontrolling interest (“NCI”). “Adjusted EBITDA” is defined as net income attributable to Textainer Group Holdings Limited common shareholders before interest income and interest expense, realized and unrealized losses (gains) on interest rate swaps and caps, net, income tax expense, net income attributable to the NCI, depreciation and amortization expense and related impact of reconciling items on net income (loss) attributable to the NCI. Footnote 1 provides certain qualifications and limitations on the use of Non-GAAP Measures.

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