Before getting started, let me remind everyone that the matters we will be discussing today that are not truly historical are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, including statements regarding McGrath RentCorp's expectations, beliefs, intentions or strategies regarding the future.All forward-looking statements are based upon information currently available to McGrath RentCorp, and McGrath RentCorp assumes no obligation to update any such forward-looking statements. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those projected. These and other risks relating to McGrath RentCorp's business are set forth in the documents filed by McGrath RentCorp with the Securities and Exchange Commission, including the company's most recent Form 10-K and Form 10-Q. I would now like to turn the call over to Keith Pratt. Keith Pratt Thank you, Geoffrey. In addition to the press release issued today, the company also filed with the SEC the earnings release on Form 8-K, the second quarter 2010 Form 10-Q. For the second quarter 2010, total revenues were flat at $66.5 million compared to the same period in 2009. Net income increased 5% to $7.4 million, or $0.31 per diluted share from $7 million or $0.30 per diluted share for the same period in 2009. Reviewing the second quarter results for the company's Mobile Modular division compared to the second quarter of 2009, total revenues decreased $7.1 million, or 19% to $29.9 million due to lower rental, rental related services and sales revenues. Gross profit on rents decreased $4.1 million, or 27% to $11.2 million due to 13% lower rental revenues with rental margins decreasing to 55% from 65% in 2009. Lower rental margins were a result of lower rental revenues combined with flat depreciation, and $1 million higher other direct costs, for labor and materials to support higher activity levels.
Selling and administrative expenses, increased 3% to $7.3 million as a result of increased investment, in our Mid-Atlantic and Portable Storage, growth initiatives.The lower gross profit on rents, $1.2 million lower gross profit on sales and increased selling and administrative expenses resulted in the decrease in operating income of $5.5 million, or 45% to $6.7 million. Finally, average modular rental equipment for the quarter was $489 million, an increase of $12 million. Average utilization for the second quarter decreased from 75.3% in 2009 to 67.7% in 2010. Turning next to second quarter results for the company's TRS-RenTelco division compared to the second quarter of 2009. Total revenues increased $1.6 million, or 7% to $25.7 million, due to higher rental revenues. Gross profit on rents increased $2.7 million, or 53% to $7.6 million. Rental revenues increased $2 million, or 11%, and rental margins increased to 39% from 28%, as depreciation as a percentage of rents decreased to a 46% from 57%. Selling and administrative expenses increased $0.4 million, or 7%, to $6.1 million. As a result, operating income increased $2.7 million, or 193% to $4 million, from $1.4 million. Finally, average electronics rental equipment at original cost for the quarter was $242 million, a decrease of $7 million. Average utilization for the second quarter increased from 59.5% in 2009 to 66.2% in 2010. Turning next to second quarter results for the company's Adler Tanks division compared to the second quarter of 2009. Total revenues increased $4.8 million, or 92% to $10 million, primarily due to higher rental revenues. Gross profit on rents increased $3.1 million or 134% to $5.4 million. Rental revenues increased $3.9 million, or 103% and rental margins increased to 71% from 62% as depreciation as a percentage of rents decreased to 17% from 21%. Read the rest of this transcript for free on seekingalpha.com