CAI International, Inc. Reports Record Results For The Second Quarter Of 2012 – Revenue Increases 38%, EPS Increases 40% Vs Second Quarter 2011

CAI International, Inc. (CAI) (NYSE:CAP), one of the world’s leading lessors of intermodal freight containers, today reported record results for the second quarter of 2012.

Highlights for the Second Quarter of 2012
  • CAI reported record net income attributable to CAI common stockholders for the second quarter of 2012 of $0.77 per fully diluted share, a 40% increase compared to $0.55 for the second quarter of 2011.
  • Rental revenue for the second quarter of 2012 increased 42% compared to the second quarter of 2011.
  • CAI leased out approximately 45,000 TEUs of containers during the quarter, and purchased approximately 22,000 TEUs of containers from two managed portfolios for $27 million.
  • CAI’s year-to-date investment in rental equipment exceeds $350 million, of which $310 million is marine containers.
  • During the quarter CAI’s container fleet reached over 1 million TEUs.
  • CAI closed an $80 million term debt facility, increased its revolving credit facility commitments to $465 million notes and completed an $85 million revolving credit facility for the acquisition of railcars.
  • CAI purchased approximately 1,200 railcars for $41 million, all of which are on lease with an average lease term of 3 years. The company has commitments to purchase another $10 million of railcars and expects continued investment through the end of the year.

Net income attributable to CAI common stockholders was $15.1 million for the second quarter of 2012, compared to $10.9 million for the second quarter of 2011, an increase of 39%.

Total revenue for the second quarter of 2012 was a record $39.7 million, compared to $28.8 million for the second quarter of 2011, an increase of 38%. Rental revenue for the second quarter of 2012 was $35.1 million, compared to $24.7 million for the second quarter of 2011. The increase in rental revenue was primarily due to a 42% increase in the average number of TEUs of owned containers on lease compared to the second quarter of 2011. Management fee revenue for the second quarter of 2012 was $3.0 million, compared to $3.3 million for the second quarter of 2011. CAI sold no container portfolios during the second quarter of 2012, compared to recording a gain on sale of container portfolios of $0.3 million in the second quarter of 2011. Finance lease income for the second quarter of 2012 increased to $1.6 million, from $0.5 million in the second quarter of 2011, primarily due to new finance lease contracts entered into since July 1, 2011.

Average fleet utilization increased slightly from 94.2% in the first quarter of 2012 to 94.3% in the second quarter of 2012. Based on customer bookings already in place for available assets, it is expected that utilization will improve further during the third quarter.

During the quarter, CAI completed the purchase of approximately 1,200 used railcars. The total purchase price of $40.6 million was funded primarily by the Company’s $85 million revolving credit facility that was entered into during the quarter. All railcars purchased during the quarter are on lease and are expected to positively impact CAI’s revenue in the third quarter.

Victor Garcia, Chief Executive Officer of CAI, commented, “We are very pleased with the performance of our company this quarter. We achieved strong revenue and earnings growth, generating $15.1 million of net income, a 39% increase compared to the second quarter of 2011. Utilization has increased slightly during the quarter, and we believe utilization will remain strong for the remainder of 2012, as a result of continued growth in international trade and limited container purchases by shipping lines. According to Clarkson Research’s July report, containerized trade is expected to increase 6% in 2012, led by growth in Intra Asian and Latin American regions. The worldwide leased container fleet has remained near full utilization, which we expect will result in continued strong prices in the secondary used equipment market for the remainder of 2012. As a result of recent freight rate increases imposed during the second quarter and lower fuel costs, we expect improvement in our customers’ financial performance over the course of this year and a reduction of credit risk within the shipping industry.”

Mr. Garcia continued, “During the second quarter we invested over $350 million and expect our total investment in 2012 to be above that achieved in 2011. We expect most of the investment for the remainder of the year to be in container equipment with opportunities for new containers, sale-leasebacks from shipping lines and the acquisition of assets from our managed fleet.”

Mr. Garcia added, “We are also pleased to announce the progress we have made in our rail business. During the quarter, we finalized an $85 million revolving credit facility for our rail business, part of which we used to purchase approximately 1,200 railcars across various equipment types. We believe that the cost and returns from the railcar purchases were made at attractive prices. CAI is well on its way to building a strong reputation as a reliable participant in this market. We enter the second half of the year with good momentum in both the rail and container leasing businesses and are optimistic about continued growth and earnings potential in both.”

CAI International, Inc.
Consolidated Balance Sheets
(In thousands, except share information)
(UNAUDITED)
   
June 30, December 31,
  2012     2011  
Assets
Current assets
Cash $ 23,151 $ 14,078

Accounts receivable (owned fleet), net of allowance for doubtful accounts of $658 and $819 at June 30, 2012 and December 31, 2011, respectively
25,382 26,381
Accounts receivable (managed fleet) 21,390 19,054
Current portion of direct finance leases 8,782 6,158
Prepaid expenses 7,521 7,079
Deferred tax assets 1,969 1,968
Other current assets   250     185  
Total current assets 88,445 74,903
Restricted cash 1,142 599

Rental equipment, net of accumulated depreciation of $124,666 and $109,336 at June 30, 2012 and December 31, 2011, respectively
1,024,756 841,847
Net investment in direct finance leases 53,785 31,591

Furniture, fixtures and equipment, net of accumulated depreciation of $1,072 and $1,006 at June 30, 2012 and December 31, 2011, respectively
1,969 2,095

Intangible assets, net of accumulated amortization of $6,940 and $6,519 at June 30, 2012 and December 31, 2011, respectively
  1,860     2,333  
Total assets $ 1,171,957   $ 953,368  
 
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 5,554 $ 3,536
Accrued expenses and other current liabilities 7,927 5,761
Due to container investors 20,105 20,113
Unearned revenue 7,606 6,786
Current portion of term loans 30,887 25,764
Current portion of capital lease obligations 2,867 3,792
Current portion of collateralized financing obligations 2,000
Rental equipment payable   70,667     13,301  
Total current liabilities 147,613 79,053
Revolving credit facilities 255,633 261,000
Term loans 325,010 263,014
Asset backed warehouse facility 100,000 51,000
Deferred income tax liability 33,868 33,816
Capital lease obligations 5,877 16,480
Collateralized financing obligations 24,776
Income taxes payable   269     269  
Total liabilities   893,046     704,632  
 
Stockholders' equity

Common stock: par value $.0001 per share; authorized 84,000,000 shares; issued and outstanding 19,295,359 shares at June 30, 2012 and December 31, 2011, respectively
2 2
Additional paid-in capital 128,788 128,183
Accumulated other comprehensive loss (3,915 ) (3,381 )
Retained earnings   134,758     105,232  
Total CAI stockholders' equity 259,633 230,036
Non-controlling interest   19,278     18,700  
Total stockholders' equity   278,911     248,736  
Total liabilities and stockholders' equity $ 1,171,957   $ 953,368  

CAI International, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
(UNAUDITED)
       
Three Months Ended Six Months Ended
June 30, June 30,
  2012     2011     2012     2011  
Revenue
Rental revenue $ 35,101 $ 24,711 $ 67,588 $ 47,096
Management fee revenue 3,006 3,275 7,207 6,790
Gain on sale of container portfolios - 253 1,256 1,663
Finance lease income   1,618     520     3,081     952  
Total revenue   39,725     28,759     79,132     56,501  
 
Operating expenses
Depreciation of rental equipment 11,053 7,441 21,711 14,182
Amortization of intangible assets 225 343 452 686
Gain on disposition of used rental equipment (3,225 ) (2,785 ) (6,320 ) (6,400 )
Storage, handling and other expenses 1,762 1,360 3,768 2,455
Marketing, general and administrative expenses 5,812 5,517 12,335 10,119
(Gain) loss on foreign exchange   (264 )   (37 )   (68 )   23  
Total operating expenses   15,363     11,839     31,878     21,065  
 
Operating income   24,362     16,920     47,254     35,436  
 
Interest expense 6,320 3,529 12,256 6,503
Interest income   (2 )   (1 )   (7 )   (4 )
Net interest expense   6,318     3,528     12,249     6,499  
 
Net income before income taxes and non-controlling interest 18,044 13,392 35,005 28,937
Income tax expense   2,396     2,301     4,901     4,851  
 
Net income 15,648 11,091 30,104 24,086
Net income attributable to non-controlling interest   (513 )   (211 )   (578 )   (410 )
Net income attributable to CAI common stockholders $ 15,135   $ 10,880   $ 29,526   $ 23,676  
 
 
Net income per share attributable to
CAI common stockholders
Basic $ 0.78 $ 0.56 $ 1.53 $ 1.23
Diluted $ 0.77 $ 0.55 $ 1.50 $ 1.20
 
Weighted average shares outstanding
Basic 19,295 19,295 19,295 19,295
Diluted 19,719 19,798 19,712 19,779

CAI International, Inc.
Fleet Data
(UNAUDITED)
   
As of June 30,
2012 2011
 
Owned container fleet in TEUs 560,570 415,260
Managed container fleet in TEUs 446,213 468,598
Total container fleet in TEUs 1,006,783 883,858
 
 
 
Owned railcar fleet in units 1,177 -

Conference Call

A conference call to discuss the financial results for the second quarter of 2012 will be held on Monday, July 23, 2012 at 5:00 p.m. ET. The dial-in number for the teleconference is 1-888-398-8098; outside of the U.S., call 1-707-287-9363. The call may be accessed live over the internet (listen only) under the “Investors” tab of CAI’s website, www.capps.com, by selecting “Q2 2012 Earnings Conference Call.” A webcast replay will be available for 30 days on the “Investors” tab of our website.

About CAI International, Inc.

CAI is one of the world’s leading managers and lessors of intermodal freight containers. As of June 30, 2012, the company operated a worldwide fleet of approximately 1,007,000 TEUs of containers through 14 offices located in 11 countries including the United States.

This press release contains forward-looking statements regarding future events and the future performance of CAI International, Inc. These statements are forward looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and involve risks and uncertainties that could cause actual results of operations and other performance measures to differ materially from current expectations including, but not limited to, utilization rates, expected economic conditions, availability of credit on commercially favorable terms or at all, customer demand, container investment levels, container prices, lease rates, increased competition, volatility in exchange rates, growth in world trade and world container trade, and others. CAI refers you to the documents that it has filed with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2011 and its interim reports on Form 10-Q and its reports on Form 8-K. These documents contain additional important factors that could cause actual results to differ from current expectations and from forward-looking statements contained in this press release. Furthermore, CAI is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements contained in this press release whether as a result of new information, future events or otherwise, unless required by law.

Copyright Business Wire 2010

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