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Textainer Group Holdings Limited Reports Third Quarter 2013 Results And Declares Quarterly Dividend

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 third quarter 2013 results.

“Our underlying business fundamentals were solid, as we achieved more than 8 percent growth in revenue and EBITDA compared to the year ago quarter. Most notably, lease rental income grew by 21 percent to $118 million compared to the year ago quarter. Our net income was negatively affected, however, by the need to reserve for certain uncollectable accounts receivable and an impairment that we recorded on certain unrecoverable containers,” commented Philip K. Brewer, President and Chief Executive Officer of Textainer.

“Historically, when a lessee defaults, we recover more than 90 percent of our containers, with about 80 percent coming back within 6 months from the start of recovery efforts and the remaining 10 to 20 percent recovered in the subsequent 6 to 12 months. Currently, for certain smaller lessees in default, we believe recoveries may not follow this pattern as these containers are in areas of China where recovery is often not economical. We recorded a $4.7 million impairment for these containers in the third quarter. This impairment applies to a limited group of smaller shipping lines that account for less than 0.5 percent of our fleet. Most of these lessees were acquired through earlier fleet acquisitions. We do not expect similar losses with any of our large lessees,” continued Mr. Brewer. “The third quarter also included bad debt expense above our normal run rate primarily related to recovery costs for a previously identified customer that filed for bankruptcy. Container recoveries from this customer are over 95% percent, consistent with historical recovery experience. Our DSO has improved significantly year over year and we expect our normalized bad debt run-rate to trend around 0.5 to 1 percent of revenue.”

Stock quotes in this article: TGH 

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