MCGRATH RENTCORP
For the period ended Sep 30, 2024. Filed Oct 24, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 24, 2024
MGRC$125.02-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-25.
0000950170-24-086480
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-24.
0000950170-24-117031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 149 previous paragraphs and 153 current paragraphs.
66 unchanged; 54 reworded; 33 added; 29 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
Mutual Decision to Terminate Merger Agreement with WillScot Mobile Mini
Current report
Selling and administrative expenses increased 2% to $49.3 million. During the period ended September 30, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant and required separate presentation on the condensed consolidated statements of income. Due to this determination, the Company has excluded the transaction costs incurred by the Company from Selling and administrative expenses for all reportable business segments for the period ended September 30, 2024.
Current report
Adjusted EBITDA increased $12.2 million, or 13%, to $104.0 million in 2024.
Current report
During the period ended September 30, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant. Due to this determination, the Company reclassified $29.5 million in transaction costs from Selling and administrative expenses in 2024, and reported such expenses separately under the Corporate segment.
Current report
Mobile Modular’s gross profit for the three months ended September 30, 2024, increased $13.3 million, or 17%, to $89.8 million. For the three months ended September 30, 2024, compared to the same period in 2023:
Current report
Gross Profit on Rental Revenues– Rental revenues increased $6.7 million, or 9%, due to 5% higher average rental equipment on rent and 4% higher average monthly rental rates in 2024. As a percentage of rental revenues, depreciation was 12% in both 2024 and 2023, and other direct costs were 25% in 2024 and 29% in 2023, which resulted in gross margin percentages of 62% in 2024, compared to 59% in 2023. The higher rental revenues and higher rental margins, resulted in gross profit on rental revenues increasing $6.4 million, or 14%, to $50.8 million in 2024.
Current report
For the three months ended September 30, 2024, selling and administrative expenses increased $2.2 million, or 7%, to $34.0 million.
Current report
During the period ended September 30, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant. Due to this determination, the Company reclassified $3.5 million in transaction costs from Selling and administrative expenses in 2024, and reported such expenses separately under the Corporate segment.
Current report
Portable Storage’s gross profit for the three months ended September 30, 2024, decreased $1.8 million, or 10%, to $15.5 million. For the three months ended September 30, 2024, compared to the same period in 2023:
Current report
Gross Profit on Rental Revenues – Rental revenues decreased $2.2 million, or 11%, due to 12% lower average rental equipment on rent. As a percentage of rental revenues, depreciation was 6% and 5% in 2024 and 2023, respectively, and other direct costs were 8% and 11% in 2024 and 2023, respectively, which resulted in gross margin percentage of 86% in 2024 and 84% in 2023. The lower rental revenues and higher rental margins resulted in gross profit on rental revenues decreasing $1.5 million, or 9%, to $14.7 million in 2024.
Current report
For the three months ended September 30, 2024, Portable Storage’s selling and administrative expenses decreased $1.2 million, or 15%, to $6.8 million.
Current report
For the three months ended September 30, 2024, TRS-RenTelco’s total revenues decreased $4.3 million to $34.8 million, compared to the same period in 2023, primarily due to lower rental and sales revenues. Lower gross profit on rental revenues, partly offset by higher gross profit on sales and lower selling and administrative expenses, resulted in a 21% decrease in pre-tax income to $5.7 million for the three months ended September 30, 2024, from $7.3 million for the same period in 2023.
Current report
During the period ended September 30, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant. Due to this determination, the Company reclassified $6.4 million in transaction costs from Selling and administrative expenses in 2024, and reported such expenses separately under the Corporate segment.
Current report
TRS-RenTelco’s gross profit for the three months ended September 30, 2024 decreased $1.6 million, or 10%, to $14.1 million. For the three months ended September 30, 2024 compared to the same period in 2023:
Current report
For the three months ended September 30, 2024, selling and administrative expenses decreased $0.4 million, or 5%, to $6.6 million.
Current report
Nine Months Ended September 30, 2024 Compared to
Current report
Nine Months Ended September 30, 2023
Current report
Consolidated revenues for the nine months ended September 30, 2024, increased 9% to $667.2 million, from $610.3 million for the same period in 2023. Consolidated net income for the nine months ended September 30, 2024, increased $50.2 million to $192.8 million, from $142.6 million for the same period in 2023. Earnings per diluted share for the nine months ended September 30, 2024, increased by $2.04 to $7.85, compared to $5.81 for the same period in 2023. The increase in consolidated net income and earnings per diluted share during the period was primarily attributed to the $180.0 million gain on merger termination, partly offset by $61.2 million in transaction costs attributed to the terminated merger agreement. Excluding the gain and transaction costs attributed to the merger termination in the current year and the gain on sale of discontinued operations in 2023, the Company's net income increased by approximately $25.4 million, or 32%, to $105.2 million, and diluted earnings per share increased $1.03, or 32%, to $4.28.
Current report
Selling and administrative expenses decreased $4.3 million to $148.8 million, primarily due to $14.3 million in transaction costs incurred by the Company in 2023, attributed to the acquisitions of Vesta Modular, Brekke Storage, Dixie Storage and Inland Leasing, and the divestiture of Adler Tanks, partly offset by an increase in employee salaries and benefit costs of $5.1 million in 2024. During the period ended September 30, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant and required separate presentation on the condensed consolidated statements of income. Due to this determination, the Company has excluded the transaction costs incurred by the Company from Selling and administrative expenses for all reportable business segments for the nine-months ended September 30, 2024.
Current report
Adjusted EBITDA increased $29.2 million, or 13%, to $259.7 million in 2024.
Current report
Mobile Modular – Nine Months Ended 9/30/24 compared to Nine Months Ended 9/30/23 (Unaudited)
Current report
During the period ended September 30, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant and required separate presentation. The Company reported such expenses separately under the Corporate segment and excluded such costs from Selling and administrative expenses.
Current report
Mobile Modular’s gross profit for the nine months ended September 30, 2024, increased $39.2 million, or 21%, to $222.9 million. For the nine months ended September 30, 2024, compared to the same period in 2023:
Current report
For the nine months ended September 30, 2024, selling and administrative expenses decreased $0.5 million to $100.9 million, when compared to the same period in 2023.
Current report
Portable Storage – Nine Months Ended 9/30/24 compared to Nine Months Ended 9/30/23 (Unaudited)
Current report
During the period ended September 30, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant and required separate presentation. The Company reported such expenses separately under the Corporate segment and excluded such costs from Selling and administrative expenses.
Current report
Portable Storage’s gross profit for the nine months ended September 30, 2024, decreased $1.3 million, or 3%, to $48.9 million. For the nine months ended September 30, 2024, compared to the same period in 2023:
Current report
For the nine months ended September 30, 2024, Portable Storage’s selling and administrative expenses decreased $1.2 million when compared to the same period in 2023. The reduction in selling and administrative expenses was primarily the result of allocated transaction costs of $1.1 million in 2023, attributed to the acquisitions of Vesta Modular, Brekke Storage, Dixie Storage and Inland Leasing, and the divestiture of Adler Tanks.
Current report
TRS-RenTelco – Nine Months Ended 9/30/24 compared to Nine Months Ended 9/30/23 (Unaudited)
Current report
During the period ended September 30, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant and required separate presentation. The Company reported such expenses separately under the Corporate segment and excluded such costs from Selling and administrative expenses.
Current report
TRS-RenTelco’s gross profit for the nine months ended September 30, 2024 decreased $6.2 million, or 13%, to $40.9 million. For the nine months ended September 30, 2024 compared to the same period in 2023:
Current report
For the nine months ended September 30, 2024, selling and administrative expenses decreased $3.1 million, or 13%, to $20.5 million, when compared to the same period in 2023. The reduction in selling and administrative expenses was primarily the result of allocated transaction costs of $1.4 million in 2023, attributed to the acquisitions of Vesta Modular, Brekke Storage, Dixie Storage and Inland Leasing, and the divestiture of Adler Tanks.
Current report
The gain on merger termination from WillScot Mobile Mini was considered a non-operating transaction and is excluded from Adjusted EBITDA.
Removed paragraphs (29)
Previous report
Proposed Acquisition by WillScot Mobile Mini
Previous report
Because the Transaction is not yet complete, and except as otherwise specifically stated, the descriptions and disclosures presented elsewhere in this Form 10-Q assume the continuation of the Company as a public company.
Previous report
Selling and administrative expenses increased $14.3 million to $61.4 million, primarily due to $12.4 million in transaction costs, which were included in marketing and administrative costs, attributed to the pending merger with WillScot Mobile Mini and an increase in employees' salaries and benefit costs of $2.6 million.
Previous report
Adjusted EBITDA increased $6.7 million, or 9%, to $83.7 million in 2024.
Previous report
Mobile Modular’s gross profit for the three months ended June 30, 2024, increased $10.2 million, or 17%, to $71.3 million. For the three months ended June 30, 2024, compared to the same period in 2023:
Previous report
For the three months ended June 30, 2024, selling and administrative expenses increased $11.2 million, or 36%, to $42.3 million. Included within selling and administrative expenses was $11.3 million higher allocated corporate costs, which included $9.0 million in allocated transaction costs from the pending merger with WillScot Mobile Mini.
Previous report
Portable Storage’s gross profit for the three months ended June 30, 2024, decreased $1.2 million, or 7%, to $16.3 million. For the three months ended June 30, 2024, compared to the same period in 2023:
Previous report
For the three months ended June 30, 2024, Portable Storage’s selling and administrative expenses increased $1.7 million, or 23%, to $8.9 million, primarily due to $1.3 million higher allocated corporate costs, which included $1.4 million in allocated transaction costs attributed to the pending WillScot Mobile Mini merger, and $0.3 million higher employee salary and benefit costs.
Previous report
For the three months ended June 30, 2024, TRS-RenTelco’s total revenues decreased $5.2 million to $32.7 million, compared to the same period in 2023, primarily due to lower rental and sales revenues. Lower gross profit on rental and sales revenues, coupled with higher selling and administrative expenses, which included $1.9 million in allocated transaction costs attributed to the pending merger with WillScot Mobile Mini, resulted in a 65% decrease in pre-tax income to $2.4 million for the three months ended June 30, 2024, from $6.7 million for the same period in 2023.
Previous report
TRS-RenTelco’s gross profit for the three months ended June 30, 2024 decreased $2.9 million, or 18%, to $13.0 million. For the three months ended June 30, 2024 compared to the same period in 2023:
Previous report
For the three months ended June 30, 2024, selling and administrative expenses increased $1.4 million, or 19%, to $8.5 million. The increase was primarily due to $1.5 million higher allocated corporate expenses, which includes $1.9 million in transaction costs attributed to the pending merger with WillScot Mobile Mini.
Previous report
Six Months Ended June 30, 2024 Compared to
Previous report
Six Months Ended June 30, 2023
Previous report
Consolidated revenues for the six months ended June 30, 2024, increased 6% to $400.4 million, from $376.2 million for the same period in 2023. Consolidated net income for the six months ended June 30, 2024, increased 7% to $43.5 million, from $40.7 million for the same period in 2023, excluding the gain on sale of discontinued operations from the divestiture of Adler Tanks. Earnings per diluted share for the six months ended June 30, 2024, decreased by $2.40 to $1.77, compared to $4.17 for the same period in 2023. The reduction in total earnings per diluted share was primarily attributed to the prior period gain on sale of discontinued operations, which contributed $2.40 to earnings per diluted share in 2023. During the six months ended June 30, 2024, the Company sold a property, resulting in a net gain of $9.3 million, which was recorded in Other income, net, and contributed $0.28 in earnings per diluted share. The increase in consolidated net income during the current period, excluding the gain on sale of discontinued operations, was primarily attributed to the property sale and higher gross profit from Mobile Modular, partly offset by $21.7 million in transaction costs attributed to the pending merger with WillScot Mobile Mini.
Previous report
Selling and administrative expenses increased $16.7 million to $121.2 million, primarily due to an increase in marketing and administrative costs of $9.3 million. Included in marketing and administrative costs was $21.7 million in transaction costs attributed to the pending merger with WillScot Mobile Mini in 2024 and $14.3 million in business acquisition and Adler divestiture related transaction costs in 2023. In addition, salaries and benefit costs increased $5.0 million in 2024.
Previous report
Adjusted EBITDA increased $17.0 million, or 12%, to $155.7 million in 2024.
Previous report
Mobile Modular – Six Months Ended 6/30/24 compared to Six Months Ended 6/30/23 (Unaudited)
Previous report
Mobile Modular’s gross profit for the six months ended June 30, 2024, increased $25.9 million, or 24%, to $133.1 million. For the six months ended June 30, 2024, compared to the same period in 2023:
Previous report
Gross Profit on Rental Revenues– Rental revenues increased $19.7 million, or 15%, due to 13% higher average rental equipment on rent and 2% higher average monthly rental rates in 2024. As a percentage of rental revenues, depreciation was 13% in both 2024 and 2023, and other direct costs were 28% in 2024 and 35% in 2023, which resulted in gross margin percentages of 59% in 2024, compared to 51% in 2023. The higher rental revenues and higher rental margins, resulted in gross profit on rental revenues increasing $21.5 million, or 31%, to $90.7 million in 2024.
Previous report
For the six months ended June 30, 2024, selling and administrative expenses increased $12.8 million, or 18%, to $82.4 million. Included within selling and administrative expenses was $17.2 million higher allocated corporate costs, which included $15.5 million in allocated transaction costs attributed to the pending merger with WillScot Mobile Mini. In addition, 2023 included $7.6 million in Vesta acquisition related transaction costs and $5.4 million in allocated divestiture transaction costs, which did not recur in 2024.
Previous report
Portable Storage – Six Months Ended 6/30/24 compared to Six Months Ended 6/30/23 (Unaudited)
Previous report
Portable Storage’s gross profit for the six months ended June 30, 2024, increased $0.4 million, or 1%, to $33.4 million. For the six months ended June 30, 2024, compared to the same period in 2023:
Previous report
Gross Profit on Rental Revenues – Rental revenues increased $0.7 million, or 2%, due to 4% higher average monthly rental rates, partly offset by 2% lower average rental equipment on rent in 2024. As a percentage of rental revenues, depreciation was 5% in both 2024 and 2023, and other direct costs were 8% and 10% in 2024 and 2023, respectively, which resulted in gross margin percentage of 86% in both 2024 and 2023. The higher rental revenues and comparable rental margins resulted in gross profit on rental revenues increasing $0.9 million, or 3%, to $31.3 million in 2024.
Previous report
For the six months ended June 30, 2024, Portable Storage’s selling and administrative expenses increased $2.6 million, or 17%, to $17.9 million, primarily due to $1.5 million higher allocated corporate costs, which included $2.6 million in allocated transaction costs attributed to the pending merger with WillScot Mobile Mini.
Previous report
TRS-RenTelco – Six Months Ended 6/30/24 compared to Six Months Ended 6/30/23 (Unaudited)
Previous report
TRS-RenTelco’s gross profit for the six months ended June 30, 2024 decreased $4.7 million, or 15%, to $26.8 million. For the six months ended June 30, 2024 compared to the same period in 2023:
Previous report
For the six months ended June 30, 2024, selling and administrative expenses increased $0.9 million, or 5%, to $17.4 million. The increase was primarily due to $1.1 million higher allocated corporate expenses, which included $3.6 million in allocated transaction costs attributed to the pending merger with WillScot Mobile Mini.
Previous report
Common Stock Purchase
Previous report
The Company has in the past made purchases of shares of its common stock from time to time in over-the-counter market (NASDAQ) transactions, through privately negotiated, large block transactions and through a share repurchase plan, in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. In August 2015, the Company’s Board of Directors authorized the Company to repurchase up to 2,000,000 shares of the Company's outstanding common stock (the “Repurchase Plan”). The amount and time of the specific repurchases are subject to prevailing market conditions, applicable legal requirements and other factors, including management’s discretion. All shares repurchased by the Company are canceled and returned to the status of authorized but unissued shares of common stock. There can be no assurance that any authorized shares will be repurchased and the Repurchase Plan may be modified, extended or terminated by the Company’s Board of Directors at any time. There were no shares repurchased in the six months ended June 30, 2024 and 2023. As of June 30, 2024, 1,309,805 shares remained authorized for repurchase under the Repurchase Plan.
Reworded paragraphs (54)
Previous wording
In the six months ended June 30, 2024, Mobile Modular, Portable Storage, TRS-RenTelco and Enviroplex contributed 62%, 24%, 12% and 2% of the Company’s income from continuing operations before provision for taxes (the equivalent of “pretax income”), respectively, compared to 50%, 31%, 23% and negative 4% for the same period in 2023.
Current wording
In the nine months ended September 30, 2024, Mobile Modular, Portable Storage, TRS-RenTelco and Enviroplex contributed 69%, 17%, 11% and 3% of the Company’s income from continuing operations before provision for taxes (the equivalent of “pretax income”), respectively, compared to 60%, 23%, 18% and negative 1% for the same period in 2023.
Previous wording
The Company’s rental operations include rental and rental related service revenues which comprised approximately 75% and 79% of consolidated revenues from continuing operations in the six months ended June 30, 2024 and 2023, respectively. Of the total continuing rental operations revenues for the six months ended June 30, 2024, Mobile Modular, Portable Storage and TRS-RenTelco comprised 68%, 15% and 17%, respectively, compared to 63%, 16% and 21%, respectively, in the same period of 2023. The Company’s direct costs of rental operations include depreciation of rental equipment, rental related service costs, impairment of rental equipment (if applicable), and other direct costs of rental operations (which include direct labor, supplies, repairs, insurance, property taxes, license fees, cost of sub-rentals and amortization of certain lease costs).
Current wording
The Company’s rental operations include rental and rental related service revenues which comprised approximately 71% and 74% of consolidated revenues from continuing operations in the nine months ended September 30, 2024 and 2023, respectively. Of the total continuing rental operations revenues for the nine months ended September 30, 2024, Mobile Modular, Portable Storage and TRS-RenTelco comprised 69%, 14% and 17%, respectively, compared to 64%, 16% and 20%, respectively, in the same period of 2023. The Company’s direct costs of rental operations include depreciation of rental equipment, rental related service costs, impairment of rental equipment (if applicable), and other direct costs of rental operations (which include direct labor, supplies, repairs, insurance, property taxes, license fees, cost of sub-rentals and amortization of certain lease costs).
Previous wording
The Company’s Mobile Modular, Portable Storage and TRS-RenTelco business segments sell modular units, storage containers and electronic test equipment, respectively, which are either new or previously rented. In addition, Enviroplex sells new modular buildings used primarily as classrooms in California. For the six months ended June 30, 2024 and 2023, sales and other revenues of modular, container and electronic test equipment comprised approximately 25% and 21% of the Company’s consolidated revenues from continuing operations, respectively. Of the total sales and other revenues from continuing operations for the six months ended June 30, 2024 and 2023, Mobile Modular and Enviroplex together comprised 81% and 78%, respectively, Portable Storage comprised 4% and 3%, respectively, and TRS-RenTelco comprised 15% and 19%, respectively. The Company’s cost of sales includes the carrying value of the equipment sold and the direct costs associated with the equipment sold, such as delivery, installation, modifications and related site work.
Current wording
The Company’s Mobile Modular, Portable Storage and TRS-RenTelco business segments sell modular units, storage containers and electronic test equipment, respectively, which are either new or previously rented. In addition, Enviroplex sells new modular buildings used primarily as classrooms in California. For the nine months ended September 30, 2024 and 2023, sales and other revenues of modular, container and electronic test equipment comprised approximately 29% and 26% of the Company’s consolidated revenues from continuing operations, respectively. Of the total sales and other revenues from continuing operations for the nine months ended September 30, 2024 and 2023, Mobile Modular and Enviroplex together comprised 85% and 82%, respectively, Portable Storage comprised 3% in both periods, and TRS-RenTelco comprised 12% and 16%, respectively. The Company’s cost of sales includes the carrying value of the equipment sold and the direct costs associated with the equipment sold, such as delivery, installation, modifications and related site work.
Previous wording
Selling and administrative expenses primarily include personnel and benefit costs, which include share-based compensation, depreciation and amortization, bad debt expense, advertising costs, and professional service fees. The Company believes that sharing of common facilities, financing, senior management, and operating and accounting systems by all of the Company’s operations results in an efficient use of overhead. Historically, the Company’s operating margins have been impacted favorably to the extent its costs and expenses are leveraged over a large installed customer base. However, there can be no assurances as to the Company’s ability to maintain a large installed customer base or ability to sustain its historical operating margins.
Current wording
Selling and administrative expenses primarily include personnel and benefit costs, which include share-based compensation, depreciation and amortization, bad debt expense, advertising costs, and professional service fees. Transaction costs incurred by the Company attributed to the terminated Merger Agreement with WillScot Mobile Mini were considered non-operating and excluded from Selling and administrative expenses. The Company believes that sharing of common facilities, financing, senior management, and operating and accounting systems by all of the Company’s operations results in an efficient use of overhead. Historically, the Company’s operating margins have been impacted favorably to the extent its costs and expenses are leveraged over a large installed customer base. However, there can be no assurances as to the Company’s ability to maintain a large installed customer base or ability to sustain its historical operating margins.
Previous wording
On January 28, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with WillScot Mobile Mini Holdings Corp., a Delaware corporation (“WillScot Mobile Mini”), Brunello Merger Sub I, Inc., a California corporation and a direct wholly owned subsidiary of WillScot Mobile Mini and Brunello Merger Sub II, LLC, a Delaware limited liability company and direct wholly owned subsidiary of WillScot Mobile Mini. The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub I will merge with and into the Company (the “First-Step Merger”), with the Company surviving the First-Step Merger and, immediately thereafter, the Company will merge with and into Merger Sub II (the “Second-Step Merger” and together with the First-Step Merger, the “Transaction”), with Merger Sub II surviving the Second-Step Merger as a wholly owned subsidiary of WillScot Mobile Mini. On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the First-Step Merger (the “Effective Time”), each share of common stock, no par value, of the Company (“Company Common Stock”) issued and outstanding immediately prior to the Effective Time, other than shares of Company Common Stock owned by WillScot Mobile Mini or any subsidiary of WillScot Mobile Mini or the Company, and shares held by shareholders who did not vote in favor of the Transaction (or consent thereto in writing) and who are entitled to demand and properly demands appraisal of such shares, will be automatically converted into the right to receive either (1) $123 in cash or (2) 2.8211 shares of validly issued, fully paid and nonassessable shares of common stock, par value $0.0001, of WillScot Mobile Mini (“WillScot Mobile Mini Common Stock”), as determined pursuant to the election and allocation procedures set forth in the Merger Agreement. The consummation of the Transaction is subject to certain closing conditions, including (i) the approval of the Company’s shareholders, which was obtained on July 11, 2024, (ii) the expiration or termination of all waiting periods applicable to the transactions contemplated by the Merger Agreement under the Hart-Scott Rodino Antitrust Improvements Act of 1976 (the “HSR Act”), relating to which WillScot Mobile Mini and the Company have committed to the Federal Trade Commission that they would not close the Transaction prior to September 27, 2024, (iii) the absence of any order by any governmental authorities or other legal restraint or prohibition preventing the consummation of the transactions contemplated by the Merger Agreement, (iv) the effectiveness of the Merger Proxy Statement (as defined below) filed with SEC relating to the registration of shares of WillScot Mobile Mini Common Stock to be issued to the Company’s shareholders pursuant to the Merger Agreement, which was granted on June 7, 2024, and (v) other customary conditions specified in the Merger Agreement. The clo…
Excerpt shortened here; the source contains the full paragraph.
Current wording
As previously disclosed, on January 28, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with WillScot Mobile Mini Holdings Corp., a Delaware corporation ("WillScot Mobile Mini”), Brunello Merger Sub I, Inc., a California corporation and a direct wholly owned subsidiary of WillScot Mobile Mini, and Brunello Merger Sub II, LLC, a Delaware limited liability company and direct wholly owned subsidiary of WillScot Mobile Mini. On September 17, 2024, the Company and WillScot Mobile Mini agreed to terminate the Merger Agreement effective upon WillScot Mobile Mini's cash payment of $180.0 million to the Company, which was received on September 20, 2024.
Previous wording
Consolidated revenues for the three months ended June 30, 2024, increased 5% to $212.6 million, from $203.0 million for the same period in 2023. Consolidated net income for the three months ended June 30, 2024, decreased 33% to $20.6 million, from $30.6 million for the same period in 2023. Earnings per diluted share for the three months ended June 30, 2024, decreased by $0.41 to $0.84, compared to $1.25 for the same period in 2023. The reduction in earnings per diluted share during the current period was primarily attributed to $14.3 million higher selling and administrative expenses, which included $12.4 million in transaction costs attributed to the pending Willscot Mobile Mini merger.
Current wording
Consolidated revenues for the three months ended September 30, 2024, increased 10% to $266.8 million, from $243.5 million for the same period in 2023. Consolidated net income for the three months ended September 30, 2024, increased $109.0 to $149.3 million, from $40.4 million for the same period in 2023. Earnings per diluted share for the three months ended September 30, 2024, increased by $4.43 to $6.08, compared to $1.65 for the same period in 2023. The increase in consolidated net income and earnings per diluted share during the period was primarily attributed to the $180.0 million gain on merger termination, partly offset by $39.4 million in transaction costs attributed to the terminated Merger Agreement, net of provision for income taxes. Excluding the gain and transaction costs attributed to the merger termination in the current year, the Company's net income increased by approximately $5.5 million, or 14%, to $45.9 million, and diluted earnings per share increased $0.22, or 13%, to $1.87.
Previous wording
There was no revenue, income or earnings per share from discontinued operations for the three months ended June 30, 2024. There were no revenues from discontinued operations for the three months ended June 30, 2023, and income from discontinued operations of $2.6 million, primarily attributed to final working capital adjustments from the divestiture of Adler Tanks. Earnings per diluted share from discontinued operations for the three months ended June 30, 2023 was $0.11. For additional information on discontinued operations and the divestiture of Adler Tanks, refer to Note 5 of the condensed consolidated financial statements.
Current wording
There was no revenue, income or earnings per share from discontinued operations for the three months ended September 30, 2024 and 2023.
Previous wording
Gross profit increased $8.8 million, or 9%, to $103.4 million in 2024. Mobile Modular’s gross profit increased $10.2 million, or 17%, largely due to higher gross profit on rental and sales revenues. Portable Storage's gross profit decreased $1.2 million, or 7%, primarily due to lower gross profit on rental and rental related services revenues. TRS-RenTelco’s gross profit decreased $2.9 million, or 18%, primarily due to lower gross profit on rental and sales revenues. Enviroplex’s gross profit increased $2.7 million, due to higher sales revenue and an increase in sales margins in 2024.
Current wording
Gross profit increased $12.4 million, or 11%, to $124.0 million in 2024. Mobile Modular’s gross profit increased $13.8 million, or 18%, primarily due to higher gross profit on rental, sales and rental related services revenues. Portable Storage's gross profit decreased $2.2 million, or 13%, primarily due to lower gross profit on rental and rental related services revenues. TRS-RenTelco’s gross profit decreased $1.6 million, or 10%, primarily due to lower gross profit on rental revenues. Enviroplex’s gross profit increased $2.5 million, due to higher sales revenue and an increase in sales margins in 2024.
Previous wording
Interest expense increased $8.3 million to $25.7 million, which was primarily attributed to $165.3 million higher average debt levels of the Company and a higher effective interest rate in 2024 of 6.59%, compared to 5.77% for the same period in 2023. The 27% increase in average debt when compared to 2023 was primarily the result of the funding of rental equipment purchases, taxes paid attributed to the gain on sale of discontinued operations and transaction costs regarding the pending merger with WillScot Mobile Mini.
Current wording
Interest expense increased $1.6 million to $12.6 million, which was primarily attributed to $86.2 million higher average debt levels of the Company and a higher effective interest rate in 2024 of 6.63%, compared to 6.52% for the same period in 2023. The 13% increase in average debt when compared to 2023 was primarily the result of the funding of rental equipment purchases and transaction costs regarding the terminated merger with WillScot Mobile Mini.
Previous wording
Pre-tax income contribution by Mobile Modular, Portable Storage and TRS-RenTelco was 62%, 24% and 12%, respectively, compared to 50%, 31% and 23%, respectively, for the comparable 2023 period. These results are discussed on a segment basis below. Enviroplex pre-tax income contribution was 2% and negative 4% in 2024 and 2023, respectively.
Current wording
Pre-tax income contribution by Mobile Modular, Portable Storage and TRS-RenTelco was 71%, 12% and 9%, respectively, compared to 70%, 15% and 13%, respectively, for the comparable 2023 period. These results are discussed on a segment basis below. Enviroplex pre-tax income contribution was 5% and 2% in 2024 and 2023, respectively.
Previous wording
The provision for income taxes resulted in an effective tax rate of 28.8% and 25.7%, for the quarters ended June 30, 2024 and 2023, respectively.
Current wording
The provision for income taxes resulted in an effective tax rate of 26.4% and 27.3%, for the quarters ended September 30, 2024 and 2023, respectively.
Previous wording
For the three months ended June 30, 2024, Mobile Modular’s total revenues increased $5.7 million, or 4%, to $144.5 million compared to the same period in 2023, primarily due to higher rental and rental related services revenues, partly offset by lower sales revenues. The revenue increase, together with higher gross profit on rental and sales revenues, partly offset by $11.2 million higher selling and administrative expenses, which included $9.0 million in allocated transaction costs attributed to the pending merger with WillScot Mobile Mini, resulted in a $3.9 million decrease in pre-tax income to $18.8 million for the three months ended June 30, 2024, from $22.8 million for the same period in 2023.
Current wording
For the three months ended September 30, 2024, Mobile Modular’s total revenues increased $23.0 million, or 14%, to $191.4 million compared to the same period in 2023, primarily due to higher sales, rental related services and rental revenues. The revenue increase, together with higher gross profit on rental, sales and rental related services revenues, partly offset by $2.2 million higher selling and administrative expenses, resulted in a $6.9 million increase in pre-tax income to $45.8 million for the three months ended September 30, 2024, from $38.9 million for the same period in 2023.
Previous wording
Gross Profit on Rental Related Services – Rental related services revenues increased $1.1 million, or 4%, compared to 2023. The increase in rental related services revenues was primarily attributable to higher delivery, return delivery and dismantle revenues and higher site related services. The increase in revenues accompanied by lower gross margin percentage of 31% in 2024, compared to 34% in 2023, resulted in rental related services gross profit decreasing $0.3 million, or 3%, to $9.1 million in 2024.
Current wording
Gross Profit on Rental Related Services – Rental related services revenues increased $8.0 million, or 23%, compared to 2023. The increase in rental related services revenues was primarily attributable to higher delivery, return delivery and dismantle revenues and higher site related services. The increase in revenues coupled with higher gross margin percentage of 35% in 2024, compared to 33% in 2023, resulted in rental related services gross profit increasing $3.6 million, or 32%, to $15.0 million in 2024.
Previous wording
Gross Profit on Sales – Sales revenues decreased $2.3 million, or 6%, compared to 2023, due to lower new equipment sales. The higher gross margin percentage of 38% in 2024 compared to 31% in 2023, together with lower sales revenue, resulted in gross profit on sales increasing $2.0 million, or 17%, to $13.8 million. The higher gross margin on sales in 2024 was primarily due to a higher mix of used versus new sales. Sales occur routinely as a normal part of Mobile Modular’s rental business; however, these sales and related gross margins can fluctuate from quarter to quarter and year to year depending on customer requirements, the scope of work to be performed, equipment availability and funding.
Current wording
Gross Profit on Sales – Sales revenues increased $8.3 million, or 14%, compared to 2023, due to higher new equipment sales. The higher gross margin percentage of 34% in 2024 compared to 32% in 2023, together with higher sales revenue, resulted in gross profit on sales increasing $3.7 million, or 20%, to $22.4 million. The higher gross profit on sales in 2024 was primarily due to higher new equipment sales. Sales occur routinely as a normal part of Mobile Modular’s rental business; however, these sales and related gross margins can fluctuate from quarter to quarter and year to year depending on customer requirements, the scope of work to be performed, equipment availability and funding.
Previous wording
For the three months ended June 30, 2024, Portable Storage’s total revenues decreased $1.4 million, or 6%, to $24.0 million compared to the same period in 2023, primarily due to lower rental and rental related services revenues. Lower gross profit on rental and rental related services revenues, coupled with $1.7 million higher selling and administrative expenses, which included $1.4 million of allocated transaction costs attributed to the pending merger with WillScot Mobile Mini, resulted in a decrease in pre-tax income of $3.1 million, or 34%, to $6.0 million in 2024.
Current wording
For the three months ended September 30, 2024, Portable Storage’s total revenues decreased $3.0 million, or 11%, to $23.1 million compared to the same period in 2023, primarily due to lower rental and rental related services revenues. Lower gross profit on rental and rental related services revenues, partly offset by lower selling and administrative expenses, resulted in a decrease in pre-tax income of $1.0 million, or 12%, to $7.4 million in 2024.
Previous wording
Gross Profit on Rental Related Services – Rental related services revenues was $4.6 million, compared to $5.4 million during the same period in 2023. The gross margin on rental related services revenues was 4% in 2024, compared to 13% in 2023. The lower revenues coupled with lower gross margins in 2024, resulted in rental related services gross profit decreasing $0.5 million, when compared to 2023.
Current wording
Gross Profit on Rental Related Services – Rental related services revenues was $4.4 million, compared to $5.3 million during the same period in 2023. The gross margin on rental related services revenues was 3% in 2024, compared to 7% in 2023. The lower revenues coupled with lower gross margins in 2024, resulted in rental related services gross profit decreasing $0.3 million, when compared to 2023.
Previous wording
Gross Profit on Sales– Sales revenues increased $0.7 million, primarily due to higher used equipment sales. The higher sales revenues and lower gross margins of 40% in 2024, compared to 42% in 2023, resulted in sales gross profit increasing $0.3 million, or 36%, to $1.0 million in 2024. Sales occur routinely as a normal part of Portable Storage’s rental business; however, these sales can fluctuate from period to period depending on customer requirements, equipment availability and funding.
Current wording
Gross Profit on Sales– Sales revenues increased $0.3 million to $1.4 million, primarily due to higher used equipment sales. The higher sales revenues and increased gross margins of 36% in 2024, compared to 32% in 2023, resulted in sales gross profit increasing $0.1 million, or 40%, to $0.5 million in 2024. Sales occur routinely as a normal part of Portable Storage’s rental business; however, these sales can fluctuate from period to period depending on customer requirements, equipment availability and funding.
Previous wording
Gross Profit on Rental Revenues – Rental revenues decreased $7.0 million, or 12%, depreciation expense decreased $2.0 million, or 8%, and other direct costs decreased by $0.7 million, or 7%, resulting in a 19% decrease in gross profit on rental revenues to $18.1 million. As a percentage of rental revenues, depreciation was 45% and 43% in 2024 and 2023, respectively, and other direct costs were 20% and 19%, in 2024 and 2023, respectively, which resulted in a gross margin percentage of 36% and 39% in 2024 and 2023, respectively. The decrease in rental revenues was primarily due to a 10% reduction in average rental equipment on rent and 2% lower average monthly rental rates in 2024, as compared to 2023.
Current wording
Gross Profit on Rental Revenues – Rental revenues decreased $3.0 million, or 10%, depreciation expense decreased $1.2 million, or 10%, and other direct costs increased by $0.3 million, or 5%, resulting in a 18% decrease in gross profit on rental revenues to $9.4 million. As a percentage of rental revenues, depreciation was 42% in both 2024 and 2023 and other direct costs were 21% and 18%, in 2024 and 2023, respectively, which resulted in a gross margin percentage of 37% and 40% in 2024 and 2023, respectively. The decrease in rental revenues was primarily due to a 9% reduction in average rental equipment on rent and 1% lower average monthly rental rates in 2024, as compared to 2023.
Previous wording
Gross Profit on Sales – Sales revenues decreased $1.7 million, or 22%, to $5.8 million in 2024. Gross profit on sales decreased $1.0 million, or 23%, to $3.1 million, with a comparable gross margin percentage of 54% in 2024 and 2023. Sales occur as a normal part of TRS-RenTelco’s rental business; however, these sales and related gross margins can fluctuate from quarter to quarter depending on customer requirements and related mix of equipment sold, equipment availability and funding.
Current wording
Gross Profit on Sales – Sales revenues decreased $1.1 million, or 13%, to $7.6 million in 2024. Gross profit on sales increased $0.8 million, or 27%, to $3.9 million, with a higher gross margin percentage of 52% in 2024, compared to 35% in 2023. Sales occur as a normal part of TRS-RenTelco’s rental business; however, these sales and related gross margins can fluctuate from quarter to quarter depending on customer requirements and related mix of equipment sold, equipment availability and funding.
Previous wording
There were no revenues from discontinued operations for the six months ended June 30, 2024, compared to $9.4 million for the same period in 2023. There was no income or earnings per diluted share from discontinued operations for the six months ended June 30, 2024. Income from discontinued operations for the same period in 2023 was $62.8 million, which included the $61.5 million net gain on sale of discontinued operations, and earnings per diluted share from discontinued operations for the six months ended June 30, 2023 was $2.56. For additional information on discontinued operations and the divestiture of Adler Tanks, refer to Note 5 of the condensed consolidated financial statements.
Current wording
There were no revenues from discontinued operations for the nine months ended September 30, 2024, compared to $9.4 million for the same period in 2023. There was no income or earnings per diluted share from discontinued operations for the nine months ended September 30, 2024. Income from discontinued operations for the same period in 2023 was $62.8 million, which included the $61.5 million net gain on sale of discontinued operations, and earnings per diluted share from discontinued operations for the nine months ended September 30, 2023 was $2.56. For additional information on discontinued operations and the divestiture of Adler Tanks, refer to Note 5 of the condensed consolidated financial statements.
Previous wording
For the six months ended June 30, 2024, on a consolidated basis from continuing operations:
Current wording
For the nine months ended September 30, 2024, on a consolidated basis from continuing operations:
Previous wording
Gross profit increased $24.7 million, or 14%, to $196.7 million in 2024. Mobile Modular’s gross profit increased $25.9 million, or 24%, largely due to higher gross profit on rental and sales revenues. Portable Storage's gross profit increased $0.4 million, or 1%, primarily due to higher gross profit on rental revenues. TRS-RenTelco’s gross profit decreased $4.7 million, or 15%, primarily due to lower gross profit on rental revenues. Enviroplex’s gross profit increased $3.1 million, due to higher sales revenue and an increase in sales margins in 2024.
Current wording
Gross profit increased $37.2 million, or 13%, to $320.7 million in 2024. Mobile Modular’s gross profit increased $39.7 million, or 22%, largely due to higher gross profit on rental, sales and rental related services revenues. Portable Storage's gross profit decreased $1.8 million, or 4%, primarily due to lower gross profit on rental related services and rental revenues. TRS-RenTelco’s gross profit decreased $6.2 million, or 13%, primarily due to lower gross profit on rental revenues. Enviroplex’s gross profit increased $5.5 million, due to higher sales revenue and an increase in sales margins in 2024.
Previous wording
Interest expense increased $3.1 million to $13.0 million, which was primarily attributed to $123.1 million higher average debt levels of the Company and a higher effective interest rate in 2024 of 6.57%, compared to 5.94% for the same period in 2023. The 18% increase in average debt when compared to 2023 was primarily the result of the funding of rental equipment purchases, taxes paid attributed to the gain on sale of discontinued operations and transaction costs regarding the pending merger with WillScot Mobile Mini.
Current wording
Interest expense increased $9.9 million to $38.4 million, which was primarily attributed to $138.7 million higher average debt levels of the Company and a higher effective interest rate in 2024 of 6.60%, compared to 5.96% for the same period in 2023. The 22% increase in average debt when compared to 2023 was primarily the result of the funding of rental equipment purchases, taxes paid attributed to the gain on sale of discontinued operations and transaction costs regarding the terminated merger with WillScot Mobile Mini.
Previous wording
Pre-tax income contribution by Mobile Modular, Portable Storage and TRS-RenTelco was 65%, 21% and 8%, respectively, compared to 61%, 24% and 18%, respectively, for the comparable 2023 period. These results are discussed on a segment basis below. Enviroplex pre-tax income contribution was 6% and negative 3% in 2024 and 2023, respectively.
Current wording
Pre-tax income contribution by Mobile Modular, Portable Storage and TRS-RenTelco was 69%, 17% and 11%, respectively, compared to 60%, 23% and 18%, respectively, for the comparable 2023 period. These results are discussed on a segment basis below. Enviroplex pre-tax income contribution was 3% and negative 1% in 2024 and 2023, respectively.
Previous wording
The provision for income taxes resulted in an effective tax rate of 26.2% and 21.5%, for the periods ended June 30, 2024 and 2023, respectively. The increase in effective tax rate during the current period was largely attributed to increased business activity in higher tax rate states.
Current wording
The provision for income taxes resulted in an effective tax rate of 26.3% and 24.5%, for the periods ended September 30, 2024 and 2023, respectively. The increase in effective tax rate during the current period was largely attributed to increased business activity in higher tax rate states.
Previous wording
For the six months ended June 30, 2024, Mobile Modular’s total revenues increased $29.4 million, or 12%, to $272.1 million compared to the same period in 2023, primarily due to higher rental, sales and rental related services revenues. The revenue increase, together with higher gross profit on rental, sales and rental related services revenues, and a $6.2 million allocated net gain on the sale of a corporate property, resulted in a $11.9 million increase in pre-tax income to $37.0 million for the six months ended June 30, 2024, from $25.1 million for the same period in 2023.
Current wording
For the nine months ended September 30, 2024, Mobile Modular’s total revenues increased $51.9 million, or 13%, to $463.5 million compared to the same period in 2023, primarily due to higher rental, sales and rental related services revenues. The revenue increase, together with higher gross profit on rental, sales and rental related services revenues, and a $6.2 million allocated net gain on the sale of a corporate property, resulted in a $34.3 million increase in pre-tax income to $98.3 million for the nine months ended September 30, 2024, from $64.0 million for the same period in 2023.
Previous wording
Gross Profit on Rental Revenues– Rental revenues increased $7.3 million, or 10%, due to 6% higher average rental equipment on rent and 4% higher average monthly rental rates in 2024. As a percentage of rental revenues, depreciation was 13% in both 2024 and 2023, and other direct costs were 27% in 2024 and 33% in 2023, which resulted in gross margin percentages of 60% in 2024, compared to 54% in 2023. The higher rental revenues and higher rental margins, resulted in gross profit on rental revenues increasing $8.8 million, or 23%, to $46.8 million in 2024.
Current wording
Gross Profit on Rental Revenues– Rental revenues increased $26.4 million, or 13%, due to 10% higher average rental equipment on rent and 3% higher average monthly rental rates in 2024. As a percentage of rental revenues, depreciation was 13% in both 2024 and 2023, and other direct costs were 27% in 2024 and 33% in 2023, which resulted in gross margin percentages of 60% in 2024, compared to 54% in 2023. The higher rental revenues and higher rental margins, resulted in gross profit on rental revenues increasing $27.9 million, or 25%, to $141.6 million in 2024.
Previous wording
Gross Profit on Rental Related Services – Rental related services revenues increased $3.7 million, or 7%, compared to 2023. The increase in rental related services revenues was primarily attributable to higher delivery, return delivery and dismantle revenues and higher site related services. The increase in revenues accompanied by lower gross margin percentage of 33% in 2024, compared to 34% in 2023, resulted in rental related services gross profit increasing $0.7 million, or 4%, to $17.4 million in 2024.
Current wording
Gross Profit on Rental Related Services – Rental related services revenues increased $11.7 million, or 14%, compared to 2023. The increase in rental related services revenues was primarily attributable to higher delivery, return delivery and dismantle revenues and higher site related services. The increase in revenues accompanied by comparable gross margin percentage of 34% in 2024, resulted in rental related services gross profit increasing $4.4 million, or 16%, to $32.5 million in 2024.
Previous wording
Gross Profit on Sales – Sales revenues increased $6.0 million, or 11%, compared to 2023, due to higher new and used equipment sales. The higher gross margin percentage of 35% in 2024 compared to 33% in 2023, together with higher sales revenue, resulted in gross profit on sales increasing $3.7 million, or 21%, to $21.7 million. The higher gross margin on sales in 2024 was primarily due to a higher mix of new versus used sales. Sales occur routinely as a normal part of Mobile Modular’s rental business; however, these sales and related gross margins can fluctuate from quarter to quarter and year to year depending on customer requirements, the scope of work to be performed, equipment availability and funding.
Current wording
Gross Profit on Sales – Sales revenues increased $14.3 million, or 13%, compared to 2023, due to higher new and used equipment sales. The higher gross margin percentage of 35% in 2024 compared to 32% in 2023, together with higher sales revenue, resulted in gross profit on sales increasing $7.4 million, or 20%, to $44.1 million. The higher gross margin on sales in 2024 was primarily due to higher margins on both new and used equipment sales. Sales occur routinely as a normal part of Mobile Modular’s rental business; however, these sales and related gross margins can fluctuate from quarter to quarter and year to year depending on customer requirements, the scope of work to be performed, equipment availability and funding.
Previous wording
For the six months ended June 30, 2024, Portable Storage’s total revenues increased $0.6 million, or 1%, to $48.8 million compared to the same period in 2023, primarily due to higher sales and rental revenues, partly offset by lower rental related services revenues. Higher gross profit on rental and sales revenues, coupled with a $1.3 million allocated net gain on the sale of a corporate property, partly offset by $2.6 million higher selling and administrative expenses, which included $2.6 million in allocated transaction costs attributed to the pending merger with WillScot Mobile Mini, resulted in a decrease in pre-tax income of $1.6 million, or 10%, to $14.0 million in 2024.
Current wording
For the nine months ended September 30, 2024, Portable Storage’s total revenues decreased $2.4 million, or 3%, to $71.8 million compared to the same period in 2023, primarily due to lower rental related services and rental revenues, partly offset by higher sales revenues. Lower gross profit on rental related services and rental revenues, coupled with a $1.3 million allocated net gain on the sale of a corporate property, resulted in a comparable pre-tax income of $23.9 million in 2024.
Previous wording
Gross Profit on Rental Revenues – Rental revenues decreased $0.7 million, or 4%, due to 6% lower average rental equipment on rent, partly offset by 3% higher average monthly rental rates in 2024. As a percentage of rental revenues, depreciation was 6% and 5% in 2024 and 2023, respectively, and other direct costs were 9% in both 2024 and 2023, which resulted in gross margin percentage of 86% in both 2024 and in 2023. The lower rental revenues and comparable rental margins resulted in gross profit on rental revenues decreasing $0.6 million, or 4%, to $15.3 million in 2024.
Current wording
Gross Profit on Rental Revenues – Rental revenues decreased $1.5 million, or 3%, due to 5% lower average rental equipment on rent, partly offset by 3% higher average monthly rental rates in 2024. As a percentage of rental revenues, depreciation was 6% and 5% in 2024 and 2023, respectively, and other direct costs were 8% and 10% in 2024 and 2023, respectively, which resulted in gross margin percentage of 86% and 85% in 2024 and 2023, respectively. The lower rental revenues and higher rental margins resulted in gross profit on rental revenues decreasing $0.6 million, or 1%, to $46.0 million in 2024.
Previous wording
Gross Profit on Rental Related Services – Rental related services revenues was $9.4 million, a decrease of $0.7 million compared to 2023. The gross margin on rental related services revenues was 5% in 2024, compared to 10% in 2023. The lower revenues coupled with lower gross margins in 2024, resulted in rental related services gross profit decreasing $0.6 million, when compared to 2023.
Current wording
Gross Profit on Rental Related Services – Rental related services revenues was $13.8 million, a decrease of $1.6 million compared to 2023. The gross margin on rental related services revenues was 4% in 2024, compared to 9% in 2023. The lower revenues coupled with lower gross margins in 2024, resulted in rental related services gross profit decreasing $0.9 million, when compared to 2023.
Previous wording
Gross Profit on Sales– Sales revenues increased $0.2 million, primarily due to higher used equipment sales. The higher sales revenues and increased gross margins of 43% in 2024, compared to 38% in 2023, resulted in sales gross profit increasing $0.1 million, or 31%, to $0.6 million in 2024. Sales occur routinely as a normal part of Portable Storage’s rental business; however, these sales can fluctuate from period to period depending on customer requirements, equipment availability and funding.
Current wording
Gross Profit on Sales– Sales revenues increased $1.0 million, primarily due to higher used equipment sales. The higher sales revenues and higher gross margins of 39% in 2024, compared to 38% in 2023, resulted in sales gross profit increasing $0.4 million, or 37%, to $1.5 million in 2024. Sales occur routinely as a normal part of Portable Storage’s rental business; however, these sales can fluctuate from period to period depending on customer requirements, equipment availability and funding.
Previous wording
For the six months ended June 30, 2024, TRS-RenTelco’s total revenues decreased $7.5 million to $66.4 million, compared to the same period in 2023, primarily due to lower rental revenues. Lower gross profit on rental revenues, partly offset by a $1.7 million allocated net gain on the sale of a corporate property, resulted in a 39% decrease in pre-tax income to $6.9 million for the six months ended June 30, 2024, from $11.3 million for the same period in 2023.
Current wording
For the nine months ended September 30, 2024, TRS-RenTelco’s total revenues decreased $11.8 million to $101.2 million, compared to the same period in 2023, primarily due to lower rental and sales revenues. Lower gross profit on rental revenues, partly offset by a $1.7 million allocated net gain on the sale of a corporate property, resulted in a 13% decrease in pre-tax income to $16.2 million for the nine months ended September 30, 2024, from $18.6 million for the same period in 2023.
Previous wording
Gross Profit on Rental Revenues – Rental revenues decreased $3.3 million, or 11%, depreciation expense decreased $1.1 million, or 9%, and other direct costs decreased by $0.4 million, or 6%, resulting in a 16% decrease in gross profit on rental revenues to $9.0 million. As a percentage of rental revenues, depreciation was 44% and 43% in 2024 and 2023, respectively, and other direct costs were 20% and 19%, in 2024 and 2023, respectively, which resulted in a gross margin percentage of 36% and 38% in 2024 and 2023, respectively. The decrease in rental revenues was primarily due to a 10% reduction in average rental equipment on rent and 2% lower average monthly rental rates in 2024, as compared to 2023.
Current wording
Gross Profit on Rental Revenues – Rental revenues decreased $10.0 million, or 12%, depreciation expense decreased $3.2 million, or 9%, and other direct costs decreased by $0.5 million, or 3%, resulting in a 19% decrease in gross profit on rental revenues to $27.5 million. As a percentage of rental revenues, depreciation was 44% and 43% in 2024 and 2023, respectively, and other direct costs were 20% and 18%, in 2024 and 2023, respectively, which resulted in a gross margin percentage of 36% and 39% in 2024 and 2023, respectively. The decrease in rental revenues was primarily due to a 10% reduction in average rental equipment on rent and 2% lower average monthly rental rates in 2024, as compared to 2023.
Previous wording
Gross Profit on Sales – Sales revenues were comparable at $12.7 million in 2024. Gross profit on sales was $7.0 million, unchanged from 2023, with a gross margin percentage of 55% in 2024, unchanged from 2023. Sales occur as a normal part of TRS-RenTelco’s rental business; however, these sales and related gross margins can fluctuate from quarter to quarter depending on customer requirements and related mix of equipment sold, equipment availability and funding.
Current wording
Gross Profit on Sales – Sales revenues decreased $1.1 million, or 5%, to $20.3 million in 2024. Gross profit on sales was $10.9 million, an increase of $0.9 million when compared to 2023, with a gross margin percentage of 54% in 2024, up from 47% in 2023. Sales occur as a normal part of TRS-RenTelco’s rental business; however, these sales and related gross margins can fluctuate from quarter to quarter depending on customer requirements and related mix of equipment sold, equipment availability and funding.
Previous wording
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, non-cash impairment costs, share-based compensation, transaction costs and gains on property sales. 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.
Current wording
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, non-cash impairment costs, share-based compensation, transaction costs, gains on property sales and non-operating transactions. 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.
Previous wording
Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of the Company’s profitability or liquidity. Adjusted EBITDA is not in accordance with or an alternative for GAAP and may be different from non−GAAP measures used by other companies. Unlike EBITDA, which may be used by other companies or investors, Adjusted EBITDA does not include share-based compensation charges, transaction costs and gains on property sales. The Company believes that Adjusted EBITDA is of limited use in that it does not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and does not accurately reflect real cash flow. In addition, other companies may not use Adjusted EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted EBITDA for purposes of comparison. The Company’s presentation of Adjusted EBITDA should not be construed as an inference that the Company will not incur expenses that are the same as or similar to the adjustments in this presentation. Therefore, Adjusted EBITDA should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The Company compensates for the limitations of Adjusted EBITDA by relying upon GAAP results to gain a complete picture of the Company’s performance. Because Adjusted EBITDA is a non-GAAP financial measure, as defined by the SEC, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP.
Current wording
Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of the Company’s profitability or liquidity. Adjusted EBITDA is not in accordance with or an alternative for GAAP and may be different from non−GAAP measures used by other companies. Unlike EBITDA, which may be used by other companies or investors, Adjusted EBITDA does not include share-based compensation charges, transaction costs, gains on property sales and non-operating transactions. The Company believes that Adjusted EBITDA is of limited use in that it does not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and does not accurately reflect real cash flow. In addition, other companies may not use Adjusted EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted EBITDA for purposes of comparison. The Company’s presentation of Adjusted EBITDA should not be construed as an inference that the Company will not incur expenses that are the same as or similar to the adjustments in this presentation. Therefore, Adjusted EBITDA should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The Company compensates for the limitations of Adjusted EBITDA by relying upon GAAP results to gain a complete picture of the Company’s performance. Because Adjusted EBITDA is a non-GAAP financial measure, as defined by the SEC, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP.
Previous wording
Adjusted EBITDA is defined as income from operations before interest expense, provision for income taxes, depreciation, amortization, share-based compensation, transaction costs and other income, net.
Current wording
Adjusted EBITDA is defined as income from operations before interest expense, provision for income taxes, depreciation, amortization, share-based compensation, other income, net and non-operating transactions.
Previous wording
For the six months ended June 30, 2024, total Adjusted EBITDA from both continuing and discontinued operations was $155.7 million, compared to $142.4 million for the same period in 2023, excluding the gain on sale of the divestiture of Adler Tanks. For the six months ended June 30, 2024 and 2023, the total Adjusted EBITDA from continuing operations was $155.7 million and $138.7 million, respectively. There were no adjusted earnings from discontinued operations during the six months ended June 30, 2024, and total Adjusted EBITDA from discontinued operations of $3.7 million during the comparable period in 2023.
Current wording
For the nine months ended September 30, 2024, total Adjusted EBITDA from both continuing and discontinued operations was $259.7 million, compared to $234.2 million for the same period in 2023, excluding the gain on sale of the divestiture of Adler Tanks. For the nine months ended September 30, 2024 and 2023, the total Adjusted EBITDA from continuing operations was $259.7 million and $230.5 million, respectively. There were no adjusted earnings from discontinued operations during the nine months ended September 30, 2024, and total Adjusted EBITDA from discontinued operations of $3.7 million during the comparable period in 2023.
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