General Finance Corporation (�General Finance�) (NASDAQ: GFN)
(NASDAQ: GFNCW) (NASDAQ: GFNCU) today announced its GAAP and
non-GAAP financial results for the first fiscal quarter of the
fiscal year ending June 30, 2009 (�FY 2009�). Results for the
quarter included RWA Holdings Pty Limited (�Royal Wolf�), the
leading provider of portable storage solutions in Australia and New
Zealand. The quarterly results of Pac-Van, Inc. (�Pac-Van�), a key
provider of modular buildings and mobile office units in the U.S.,
which we acquired on October 1, 2008, have also been included
herein on a combined basis with the General Finance quarterly
results for informational purposes. General Finance First Quarter
FY 2009 vs. Non-GAAP First Quarter FY 2008 � � Total revenues
increased 56% to $31.7 million from $20.3 million; � � Leasing
revenues increased 78% to $10.7 million from $6.0 million; � �
Organic growth, excluding acquisitions, in leasing revenue was 17%;
� � Adjusted EBITDA (earnings before interest expense, income tax,
depreciation and amortization and other non-operating costs),
excluding stock-based compensation expense, rose 121% to $5.3
million from $2.4 million; � � Adjusted EBITDA margin rose to 17%
from 12%; � � Foreign currency exchange loss for the first quarter
of FY 2009 was $7.7 million compared to a gain of $1.9 million in
the first quarter of FY 2008; � � The average utilization rate was
78.8% during the first quarter of FY 2009 representing a 1.5%
decrease from the 80.3% utilization rate during the first quarter
of FY 2008, as we increased purchases of new containers in order to
retire aged fleet and reduced sub-leases for the moving &
storage business; � � Net fleet capital expenditures for the first
quarter of FY 2009 were $5 million versus $5.5 million in the first
quarter of FY 2008; � � The size of the lease fleet increased 73%
to approximately 29,380 units at September 30, 2008 primarily due
to acquisitions, compared to 16,979 units at September 30, 2007; �
� RWA had 4.0x total funded debt to adjusted EBITDA as of the
quarter ended September 30, 2008, well within covenant
requirements; � � The duration of receivables for sales, or DSOs,
decreased to 52.2 days at September 30, 2008 versus 54.9 days at
September 30, 2007; and; � � Fleet inventory at September 30, 2008
was $22.6 million compared to $10.6 million at September 30, 2007,
primarily due to sales inventory obtained in the GE SeaCo
acquisition. � General Finance closed the acquisition of Pac-Van
through its merger with its parent, Mobile Office Acquisition Corp
(�MOAC�), on October 1, 2008. Pac-Van�s unaudited quarterly results
have been combined below with the General Finance first quarter FY
2009 results for purposes of sharing information with investors.
The combined results do not purport to follow GAAP in their
presentation format and do not consider any purchase accounting
adjustments. Pac-Van Inc. First Quarter FY 2009 Highlights � �
Total revenues increased 36% to $22.6 million from $16.6 million; �
� Leasing revenues increased 12% to $13.9 million from $12.4
million; � � Organic growth, excluding acquisitions, in leasing
revenue was 5%; � � Adjusted EBITDA, excluding non-recurring
expenses of the prior owners, rose 5% to $5.9 million from $5.6
million, while adjusted EBITDA as a percentage of revenue declined
from 34% to 26% for the same period; � � The average utilization
rate was 74% in the first quarter of FY 2009 versus 81% during the
first quarter of FY 2008; � � Net fleet capital expenditures in the
first quarter of FY 2009 was $4.2 million compared to the first
quarter FY 2008 net fleet capital expenditures of $7.4 million,
while Pac-Van ended the quarter with 12,342 units; � � DSOs at
September 30, 2008 were 58 days versus 54 days at September 30,
2007; and � � Total funded debt to EBITDA, calculated in accordance
with our credit facilities, was 4.7:1 at September 30, 2008, well
within our covenant requirements and there was $82.5 million of
senior debt outstanding against a $120 million commitment, provided
that the consent of Pac-Van�s subordinated note holder is required
to borrow in excess of $105 million. � Business Overview Ronald
Valenta, General Finance�s President & CEO, stated, �We are
extremely pleased with the strong organic leasing revenue growth as
well as the overall revenue growth at Royal Wolf in Australia and
New Zealand. EBITDA growth and margins continue to expand while we
continue to be focused on implementing best practices, building our
leasing revenue stream and leveraging our best in class national
platform. We continue to be mindful of the unprecedented global
economic volatility and the dramatic decline of the Australian
dollar versus the U.S. dollar.� Mr. Valenta continued, �In the
United States, though we are in a severe economic downturn coupled
with a credit crunch, we have achieved organic leasing revenue
growth and utilization rates have stabilized. Our strategy is to
continue to implement best practices with a focus on second-to-none
customer service coupled with product diversification and
differentiation.� Charles Barrantes, General Finance�s Executive
Vice President and Chief Financial Officer, pointed out, �In both
of our businesses we are incurring capital expenditures only when
we have committed volume and we are reducing the sales inventory at
Royal Wolf. General Finance and its subsidiaries have unused debt
capacity and cash of approximately $49 million.� Mr. Valenta
concluded that, �Our management teams have performed in prior
economic slowdowns and are prepared for additional challenges. In
the case of Australia and New Zealand, our competitors are smaller
and generally more regionally focused and rely more on the
construction and transportation industries. Royal Wolf has several
key strengths: a national footprint, product differentiation and a
diverse customer base. Pac-Van, in turn, has a wonderful
opportunity to provide broader product diversification in several
non-construction industries.� � � Non-GAAP Combined General Finance
and Pac-Van First Quarter FY 2008 and FY 2009 results (Unaudited
and in �000s) � Quarter Ended 30-Sep-07(1) � 30-Sep-08 Revenues
Sales $ 18,401 $ 29,730 Leasing � 18,463 � � 24,565 � 36,864 � �
54,295 Costs and expenses Cost of sales 15,161 24,460 Leasing,
selling and general expenses(2) 13,885 20,115 Depreciation and
amortization � 2,217 � � 4,612 Operating income $ 5,601 � $ 5,108 �
EBITDA $ 7,818 $ 9,720 Adjusted EBITDA(2) $ 7,950 � $ 11,070 � (1)
� Includes the results of Royal Wolf for the period July 1 to
September 13, 2007, prior to its acquisition by General Finance.
(2) Includes stock-based compensation expenses of $1,140,000 in the
quarter ended September 30, 2008 for Pac-Van and $210,000 for the
same period for General Finance. � Additional Information � �
GENERAL FINANCE CORPORATION AND SUBSIDIARIES Condensed Consolidated
Statements of Operations (In thousands, except share and per share
data) (Unaudited) � Predecessor � Successor � Period from July 1 to
September 13, � Quarter Ended September 30, 2007 � 2007 � 2008 �
Revenues Sales of containers $ 10,944 $ 3,278 $ 20,995 Leasing of
containers � 4,915 � � � 1,121 � � � 10,658 � � 15,859 � � � 4,399
� � � 31,653 � � Costs and expenses Cost of sales 9,466 2,947
18,166 Leasing, selling and general expenses 4,210 1,225 8,377
Depreciation and amortization � 653 � � � 338 � � � 3,383 � �
Operating income (loss) 1,530 (111 ) 1,727 � Interest income 14 974
121 Interest expense (947 ) (374 ) (4,364 )(1) Foreign currency
exchange gain (loss) and other � (129 ) � � 2,045 � � � (7,717 )(2)
� (1,062 ) � � 2,645 � � � (11,960 ) � Income (loss) before
provision for income taxes and minority interest 468 2,534 (10,233
) � Provision (benefit) for income taxes 180 855 (3,565 ) �
Minority interest � � � � � 157 � � � (1,641 ) � Net income (loss)
$ 288 � � $ 1,522 � � $ (5,027 ) � Net income (loss) per share:
Basic $ 0.15 $ (0.36 ) Diluted � 0.12 � � � (0.36 ) � Weighted
average shares outstanding: Basic 10,350,344 13,826,052 Diluted �
12,679,576 � � � 13,826,052 � � (1) � Includes unrealized loss on
interest rate swap and option contracts of $1.5 million. � (2)
General Finance has certain U.S. dollar-denominated debt at Royal
Wolf, including intercompany borrowings, which are remeasured at
each financial reporting date with the impact of the remeasurement
being recorded in the income statement as an unrealized gain or
loss. Amounts exchanged into U.S. dollars from Australian dollars
for repayments of this U.S. dollar-denominated debt will depend
upon the currency exchange rate at the time, with differences in
the exchange rate from when the borrowing was incurred being
recorded in the income statement as a realized gain or loss. During
the first quarter of FY 2009, General Finance incurred net
unrealized and realized foreign exchange losses totaled $4.5
million and $3.2 million, respectively. � EBITDA is a supplemental
measure of performance that is not required by, or presented in
accordance with U.S. generally accepted accounting principles
(�GAAP�). EBITDA is a non-GAAP measure, is not a measurement of our
financial performance under GAAP and should not be considered as an
alternative to net income, income from operations or any other
performance measures derived in accordance with GAAP or as an
alternative to cash flow from operating, investing or financing
activities as a measure of liquidity. We present EBITDA because we
consider it to be an important supplemental measure of our
performance and because it is frequently used by securities
analysts, investors and other interested parties in the evaluation
of companies in our industry, many of which present EBITDA when
reporting their results. About General Finance Corporation: General
Finance Corporation (www.generalfinance.com), through its indirect
86.2%-owned subsidiary, Royal Wolf (www.royalwolf.com.au) and its
indirect 100%-owned subsidiary Pac-Van (www.pacvan.com), sells and
leases portable storage containers, portable container buildings,
freight containers, modular buildings and mobile offices to a broad
cross section of industrial, commercial, educational and government
customers throughout Australia, New Zealand and the United States.
Cautionary Statement About Forward-Looking Statements: Statements
in this news release that are not historical facts are
forward-looking statements. Such forward-looking statements
include, but are not limited to, prospects of Royal Wolf and
Pac-Van. Readers are cautioned that these forward-looking
statements involve certain risks and uncertainties, including those
contained in filings with the Securities and Exchange Commission
such as General Finance�s definitive proxy statement with respect
to General Finance�s acquisition of Pac-Van, its Annual Report on
Form 10-K for the fiscal year ended June 30, 2008 and its quarterly
report on Form 10-Q for the quarter ended September 30, 2008.
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