WillScot Mobile Mini Reports Fourth Quarter 2023 and Full Year 2023
Results
Record Financial Performance in 2023 with Strong Growth
and Execution Continuing in 2024
PHOENIX, Feb. 20, 2024 (GLOBE NEWSWIRE) --
WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini” or the
“Company”) (Nasdaq: WSC), the North American leader in innovative
flexible space solutions, today announced fourth quarter and full
year 2023 results and provided an update on operations and the
current market environment, including the following highlights:
Q4 2023
- Revenue increased 4% to $612
million and Adjusted EBITDA increased 7% year-over-year to $288
million.
- Adjusted EBITDA Margin of 47.0%
expanded 160 basis points year-over-year.
- Generated Free Cash Flow of
$166 million, up 35% year-over-year, and Free Cash Flow Margin
of 27.2%.
- Returned $136 million to
shareholders by repurchasing 3.5 million shares of Common
Stock during the quarter.
- Acquired leading clearspan
structures platform.
- Maintained leverage sequentially at
3.3x Net Debt to Adjusted EBITDA as of December 31, 2023, inside
our target range of 3.0x to 3.5x.
Full Year 2023
- Revenue increased 10% to
$2,365 million, income from continuing operations increased
24% to $342 million, and Adjusted EBITDA increased 20% to
$1,061 million.
- Adjusted EBITDA Margin of 44.9%
expanded 360 basis points year-over-year.
- Generated Free Cash Flow of $577
million, up 75% year-over-year, and Free Cash Flow Margin of
24.3%.
- Generated $396 million of capital
available for reinvestment through divestiture of UK Storage
segment in Q1 2023.
- Invested $562 million of capital in
8 acquisitions, including establishment of market leading positions
in climate-controlled storage and clearspan structures.
- Generated 18% Return on Invested
Capital2 ("ROIC") over the last 12 months, which
increased approximately 232 basis points year-over-year.
- Returned $811 million to
shareholders by repurchasing 18.5 million shares of Common Stock,
reducing our share count by 8.6% over the last twelve months as of
December 31, 20231.
2024 Outlook
- Issued FY 2024 Adjusted EBITDA
outlook range of $1,125 million to $1,200 million, representing 6%
to 13% growth in our continuing operations versus 2023.
- On January 29, 2024, WSC announced
a definitive agreement to acquire McGrath RentCorp (NASDAQ: MGRC).
The Company expects the transaction to close in Q2 2024. In light
of this transaction, WSC intends to host its Investor Day later
this year after the transaction closes and will provide additional
details in due course.
Brad Soultz, Chief Executive Officer of WillScot
Mobile Mini, commented, "2023 was a record year for WillScot Mobile
Mini across our financial metrics. We built our platform to deliver
consistent compound returns irrespective of market conditions,
which is evident in our results as we enter 2024. We eclipsed our
$1 billion Adjusted EBITDA milestone faster than we expected,
generated $577 million of Free Cash Flow, reduced common shares
outstanding to 190 million, and grew earnings per share from
continuing operations by 35% year-over-year. And we delivered these
results while making the right investments to position our platform
for the long-term benefit of our customers, employees, and
shareholders. In 2023, we upgraded our CRM system, which gives us
the most scalable technology platform in the industry. We divested
the UK Storage segment and reinvested those proceeds here in North
America. And we extended our unmatched offering of space solutions
with the addition of industry-leading platforms in
climate-controlled storage and clearspan structures."
Soultz continued, "Heading into 2024, our strategy
is unchanged, and we will continue to invest in capabilities to
differentiate our offering. We have immediate and significant
tailwinds across rates, Value-Added Products (VAPS), margins, and
M&A. We are making new investments in both human capital and
digital tools, leveraging a powerful combination of local market
intimacy and scale, to create an unparalleled customer experience.
And our innovation pipeline has never been stronger, as we
commercialize new and creative temporary space solutions for our
customers."
Soultz concluded, "Our pending acquisition of
McGrath RentCorp (NASDAQ: MGRC) will accelerate our growth as we
extend our differentiated value proposition for the benefit of all
of our stakeholders. And while we work to close that transaction,
we do so knowing that it complements the extraordinary opportunity
set that we are already executing within our platform. Thank you to
our team for delivering the strongest year in our Company's
history. I am confident that our track record of growth and
execution will continue in 2024 and beyond."
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
(in thousands, except share data) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenue |
$ |
612,376 |
|
|
$ |
590,554 |
|
|
$ |
2,364,767 |
|
|
$ |
2,142,623 |
|
|
Income from continuing operations |
$ |
86,328 |
|
|
$ |
99,018 |
|
|
$ |
341,844 |
|
|
$ |
276,341 |
|
|
Adjusted EBITDA from continuing operations2 |
$ |
287,802 |
|
|
$ |
268,090 |
|
|
$ |
1,061,465 |
|
|
$ |
883,874 |
|
|
Adjusted EBITDA Margin from continuing operations
(%)2 |
|
47.0 |
% |
|
|
45.4 |
% |
|
|
44.9 |
% |
|
|
41.3 |
% |
|
Net cash provided by operating activities |
$ |
219,322 |
|
|
$ |
200,420 |
|
|
$ |
761,240 |
|
|
$ |
744,658 |
|
|
Free Cash Flow2,5 |
$ |
166,280 |
|
|
$ |
122,906 |
|
|
$ |
576,589 |
|
|
$ |
330,334 |
|
|
Weighted Average Dilutive Shares Outstanding |
|
194,097,351 |
|
|
|
213,872,403 |
|
|
|
201,849,836 |
|
|
|
221,399,162 |
|
|
Free Cash Flow Margin (%)2,5 |
|
27.2 |
% |
|
|
20.0 |
% |
|
|
24.3 |
% |
|
|
14.1 |
% |
|
Return on Invested Capital2 |
|
18.5 |
% |
|
|
19.2 |
% |
|
|
17.7 |
% |
|
|
15.4 |
% |
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
Adjusted EBITDA by Segment (in
thousands)2,6 |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Modular |
$ |
161,561 |
|
$ |
150,687 |
|
$ |
598,354 |
|
$ |
508,343 |
|
Storage |
|
126,241 |
|
|
117,403 |
|
|
463,111 |
|
|
375,531 |
|
Consolidated Adjusted EBITDA |
$ |
287,802 |
|
$ |
268,090 |
|
$ |
1,061,465 |
|
$ |
883,874 |
Fourth Quarter
2023 and Full Year
2023
Results2
Tim Boswell, President and Chief Financial Officer,
commented, "2023 was a record year financially across all metrics,
and we are carrying momentum into 2024 to drive another year of
record performance. And we are delivering these outstanding results
despite mixed commercial and market indicators in 2023, which is a
testament to the strength of our business model and strategy.
Across the portfolio, rental rates generally offset volume
declines, which were consistent with the contraction of
non-residential construction start square footage and retail demand
throughout the year relative to record 2022 levels. Through the
middle of February, modular unit VAPS contribution inflected to
historical highs and VAPS penetration in storage units continued to
build. In the same time frame, modular activations and net orders
were up year-over-year, while storage activations were in line with
non-residential start square footage. Margins continue to be a
tailwind, with Adjusted EBITDA margin of 44.9% up 360 basis points
for the year, and with in-flight initiatives across all revenue
streams supporting margins as we head into 2024."
Boswell continued, "Our capital allocation
framework remains consistent, and our allocation process remains
disciplined and demand-driven. We generated $577 million of Free
Cash Flow, and see a clear path to $700 million of Free Cash Flow
irrespective of the recently announced McGrath acquisition. We
invested $185 million of Net Capex in 2023, which approximates
maintenance levels given our lower fleet utilization. We invested
$562 million in M&A, expanding our offering and total
addressable market. And we invested $811 million in share
repurchases, resulting in an 8.6% reduction in our share count over
the last 12 months. Together, the consistent application of this
framework over time drove Return on Invested Capital of 18% and 35%
growth in earnings per share from continuing operations in
2023."
Boswell concluded, "At the midpoint of our 2024
guidance, we expect revenue to grow by 8% to $2,560 million and
Adjusted EBITDA to grow by 10% to $1,163 million, with margins up
approximately 50 basis points, resulting in yet another record year
financially. Our track record and outlook are the predictable
result of a strategy constructed to deliver consistent growth and
returns over time. And heading into 2024, our organic and inorganic
investments are extending that horizon appreciably."
Capitalization and Liquidity
Update2
As of and for the three months ended December
31, 2023, except where noted:
- Generated $166
million of Free Cash Flow in the fourth quarter, up 35%
year-over-year.
- Invested
$76 million of capital in one acquisition during the quarter,
with $562 million invested in the last 12 months.
- Increased excess
availability to approximately $1.2 billion under our asset
backed revolving credit facility.
- Weighted average
pre-tax interest rate, inclusive of both the 3.44%
floating-to-fixed interest rate swap that we executed in January
2023 and the 3.70% floating-to-fixed interest rate swap that we
executed in January 2024 is approximately 5.9%. Annual cash
interest expense based on the current debt structure and benchmark
rates is approximately $212 million. Our debt structure is
approximately 77% / 23% fixed-to-floating after giving effect to
all interest rate swaps.
- No debt
maturities prior to 2025. We have ample liquidity available to
redeem or refinance our $527 million 2025 notes, using either
our asset backed revolver or other sources of capital, and intend
to do so opportunistically prior to maturity in a manner that
optimizes our interest costs.
- Leverage is at
3.3x last 12 months Adjusted EBITDA from continuing operations
of $1,061 million, which is inside our target range of 3.0x to
3.5x.
- Repurchased 3.5 million shares
of Common Stock for $136 million in the quarter, contributing
to a 8.6% reduction in our share count over the last 12 months. We
paused repurchasing shares in the middle of Q4 2023 as acquisition
discussions advanced with McGrath RentCorp.
2024 Outlook 2, 3,
4
This guidance is subject to risks and uncertainties, including
those described in "Forward-Looking Statements" below.
|
$M |
2023 Results |
2024 Outlook
(excludes MGRC) |
|
Revenue |
$2,365 |
$2,485 - $2,635 |
|
Adjusted EBITDA2,3 |
$1,061 |
$1,125 - $1,200 |
|
Net CAPEX3,4 |
$185 |
$250 - $300 |
1 - Assumes common shares outstanding as
of December 31, 2023 versus common shares
outstanding as of December 31, 2022.
2 - Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow,
Free Cash Flow Margin, Net Debt to Adjusted EBITDA and
Return on Invested Capital are non-GAAP financial measures. Further
information and reconciliations for these non-GAAP measures to the
most directly comparable financial measure under generally accepted
accounting principles in the US ("GAAP") are included at the end of
this press release.
3 - Information reconciling forward-looking Adjusted EBITDA,
Net CAPEX, and Free Cash Flow to GAAP financial measures is
unavailable to the Company without unreasonable effort and
therefore neither the most comparable GAAP measures nor
reconciliations to the most comparable GAAP measures are
provided.
4 - Net CAPEX is a non-GAAP financial measure. Please see the
non-GAAP reconciliation tables included at the end of this press
release.
5 - Free Cash Flow incorporates results from discontinued
operations. For comparability, we add back discontinued operations
to reported revenue to calculate Free Cash Flow Margin.
6 - During the first quarter of 2023, the ground level office
business within the Modular segment was transferred to the Storage
segment, and associated revenues, expenses, and operating metrics
were transferred to the Storage segment. All periods presented have
been retrospectively revised to reflect this change within the
Modular and Storage segments. See further discussion within the
Unaudited Segment Operating Data tables included at the end of this
press release.
Non-GAAP Financial Measures
This press release includes non-GAAP financial
measures, including Adjusted EBITDA, Adjusted EBITDA Margin from
continuing operations, Free Cash Flow, Free Cash Flow Margin,
Return on Invested Capital, Net CAPEX and Net Debt to Adjusted
EBITDA ratio. Adjusted EBITDA is defined as net income (loss) plus
net interest (income) expense, income tax expense (benefit),
depreciation and amortization adjusted to exclude certain non-cash
items and the effect of what we consider transactions or events not
related to our core business operations, including net currency
gains and losses, goodwill and other impairment charges,
restructuring costs, costs to integrate acquired companies, costs
incurred related to transactions, non-cash charges for stock
compensation plans, gains and losses resulting from changes in fair
value and extinguishment of common stock warrant liabilities, and
other discrete expenses. Adjusted EBITDA Margin from continuing
operations is defined as Adjusted EBITDA divided by revenue. Free
Cash Flow is defined as net cash provided by operating activities,
less purchases of, and proceeds from, rental equipment and
property, plant and equipment, which are all included in cash flows
from investing activities. Free Cash Flow Margin is defined as Free
Cash Flow divided by revenue. Return on Invested Capital is defined
as adjusted earnings before interest and amortization divided by
net assets. Adjusted earnings before interest and amortization is
the sum of income (loss) before income tax expense, net interest
(income) expense, amortization adjusted for non-cash items
considered non-core to business operations including net currency
(gains) losses, goodwill and other impairment charges,
restructuring costs, costs to integrate acquired companies,
non-cash charges for stock compensation plans, gains and losses
resulting from changes in fair value and extinguishment of common
stock warrant liabilities, and other discrete expenses, reduced by
our estimated statutory tax rate. Given we are not a significant US
taxpayer due to our current tax attributes, we include estimated
taxes at our current statutory tax rate of approximately 26%. Net
assets is total assets less goodwill and intangible assets, net and
all non-interest bearing liabilities and is calculated as a five
quarter average. Net CAPEX is defined as purchases of rental
equipment and refurbishments and purchases of property, plant and
equipment (collectively, "Total Capital Expenditures"), less
proceeds from the sale of rental equipment and proceeds from the
sale of property, plant and equipment (collectively, "Total
Proceeds"), which are all included in cash flows from investing
activities. Net Debt to Adjusted EBITDA ratio is defined as Net
Debt divided by Adjusted EBITDA. The Company believes that Adjusted
EBITDA and Adjusted EBITDA margin are useful to investors because
they (i) allow investors to compare performance over various
reporting periods on a consistent basis by removing from operating
results the impact of items that do not reflect core operating
performance; (ii) are used by our board of directors and management
to assess our performance; (iii) may, subject to the limitations
described below, enable investors to compare the performance of the
Company to its competitors; (iv) provide additional tools for
investors to use in evaluating ongoing operating results and
trends; and (v) align with definitions in our credit agreement. The
Company believes that Free Cash Flow and Free Cash Flow Margin are
useful to investors because they allow investors to compare cash
generation performance over various reporting periods and against
peers. The Company believes that Return on Invested Capital
provides information about the long-term health and profitability
of the business relative to the Company's cost of capital. The
Company believes that the presentation of Net CAPEX provides useful
information to investors regarding the net capital invested into
our rental fleet and plant, property and equipment each year to
assist in analyzing the performance of our business. Adjusted
EBITDA is not a measure of financial performance or liquidity under
GAAP and, accordingly, should not be considered as an alternative
to net income or cash flow from operating activities as an
indicator of operating performance or liquidity. These non-GAAP
measures should not be considered in isolation from, or as an
alternative to, financial measures determined in accordance with
GAAP. Other companies may calculate Adjusted EBITDA and other
non-GAAP financial measures differently, and therefore the
Company's non-GAAP financial measures may not be directly
comparable to similarly-titled measures of other companies. For
reconciliations of the non-GAAP measures used in this press release
(except as explained below), see “Reconciliation of Non-GAAP
Financial Measures" included in this press release.
Information regarding the most comparable GAAP
financial measures and reconciling forward-looking Adjusted EBITDA,
Net CAPEX, and Free Cash Flow to those GAAP financial measures is
unavailable to the Company without unreasonable effort. We cannot
provide the most comparable GAAP financial measures nor
reconciliations of forward-looking Adjusted EBITDA, Net CAPEX, and
Free Cash Flow to GAAP financial measures because certain items
required for such reconciliations are outside of our control and/or
cannot be reasonably predicted, such as the provision for income
taxes. Preparation of such reconciliations would require a
forward-looking balance sheet, statement of income and statement of
cash flow, prepared in accordance with GAAP, and such
forward-looking financial statements are unavailable to the Company
without unreasonable effort. Although we provide ranges of Adjusted
EBITDA and Net CAPEX that we believe will be achieved, we cannot
accurately predict all the components of the Adjusted EBITDA and
Net CAPEX calculations. The Company provides Adjusted EBITDA and
Net CAPEX guidance because we believe that Adjusted EBITDA and Net
CAPEX, when viewed with our results under GAAP, provides useful
information for the reasons noted above.
Conference Call Information
WillScot Mobile Mini will host a conference call
and webcast to discuss its fourth quarter 2023 results and 2024
outlook at 5:30 p.m. Eastern Time on Tuesday, February 20,
2024. To access the live call by phone, use the following link:
https://register.vevent.com/register/BI81d07f63acf943bb8b9f71d0aaa7bafe
You will be provided with dial-in details after
registering. To avoid delays, we recommend that participants dial
into the conference call 15 minutes ahead of the scheduled start
time. A live webcast will also be accessible via the "Events &
Presentations" section of the Company's investor relations website
www.willscotmobilemini.com. Choose "Events" and select the
information pertaining to the WillScot Mobile Mini Holdings Fourth
Quarter 2023 Conference Call. Additionally, there will be slides
accompanying the webcast. Please allow at least 15 minutes prior to
the call to register, download and install any necessary software.
For those unable to listen to the live broadcast, an audio webcast
of the call will be available for 12 months on the Company’s
investor relations website.
About WillScot Mobile Mini
WillScot Mobile Mini trades on the Nasdaq stock
exchange under the ticker symbol “WSC.” Headquartered in Phoenix,
Arizona, the Company is a leading business services provider
specializing in innovative and flexible temporary space solutions.
The Company’s diverse product offering includes modular office
complexes, mobile offices, classrooms, temporary restrooms,
portable storage containers, blast protective and
climate-controlled structures, clearspan structures, and a
thoughtfully curated selection of furnishings, appliances, and
other services so its solutions are turnkey for customers. WillScot
Mobile Mini services diverse customer segments across all sectors
of the economy from a network of approximately 250 branch locations
and additional drop lots throughout the United States, Canada, and
Mexico.
Forward-Looking Statements
This press release contains forward-looking
statements (including the guidance/outlook contained herein) within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and Section 21E of the Securities Exchange Act of 1934, as
amended. The words "estimates," "expects," "anticipates,"
"believes," "forecasts," "plans," "intends," "may," "will,"
"should," "shall," "outlook," "guidance," "see," "have confidence"
and variations of these words and similar expressions identify
forward-looking statements, which are generally not historical in
nature. Certain of these forward-looking statements include
statements relating to: our mergers and acquisitions pipeline,
including our proposed acquisition of McGrath RentCorp,
acceleration of our run rate, acceleration toward and the timing of
our achievement of our three to five year milestones, growth and
acceleration of cash flow, driving higher returns on invested
capital, and Adjusted EBITDA margin expansion. Forward-looking
statements are subject to a number of risks, uncertainties,
assumptions and other important factors, many of which are outside
our control, which could cause actual results or outcomes to differ
materially from those discussed in the forward-looking statements.
Although the Company believes that these forward-looking statements
are based on reasonable assumptions, they are predictions and we
can give no assurance that any such forward-looking statement will
materialize. Important factors that may affect actual results or
outcomes include, among others, our ability to acquire and
integrate new assets and operations, including our ability to
complete the proposed acquisition of McGrath RentCorp and integrate
its business; our ability to judge the demand outlook; our ability
to achieve planned synergies related to acquisitions; our ability
to successfully execute our growth strategy, manage growth and
execute our business plan; our estimates of the size of the markets
for our products; the rate and degree of market acceptance of our
products; the success of other competing modular space and portable
storage solutions that exist or may become available; rising costs
and inflationary pressures adversely affecting our profitability;
potential litigation involving our Company; general economic and
market conditions impacting demand for our products and services
and our ability to benefit from an inflationary environment; our
ability to maintain an effective system of internal controls; and
such other risks and uncertainties described in the periodic
reports we file with the SEC from time to time (including our Form
10-K for the year ended December 31, 2022), which are available
through the SEC’s EDGAR system at www.sec.gov and on our website.
Any forward-looking statement speaks only at the date on which it
is made, and the Company disclaims any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
Recent Developments
Entry into an Agreement to Acquire
McGrath RentCorp
On January 28, 2024, the Company, along with its
newly formed subsidiaries, Brunello Merger Sub I, Inc. (“Merger Sub
I”) and Brunello Merger Sub II, LLC (“Merger Sub II”), entered into
an Agreement and Plan of Merger (the “Merger Agreement”) with
McGrath RentCorp ("McGrath"). Merger Sub I will merge with and into
McGrath (the “First-Step Merger”), with McGrath surviving the
First-Step Merger and, immediately thereafter, McGrath will merge
with and into Merger Sub II (the “Second-Step Merger” and together
with the First-Step Merger, the “McGrath Acquisition”), with Merger
Sub II surviving the Second-Step Merger as a wholly owned
subsidiary of the Company. At the effective time of the First-Step
Merger, and subject to the terms and subject to the conditions set
forth in the Merger Agreement, each outstanding share of the common
stock of McGrath shall be converted into the right to receive
either (i) $123.00 in cash or (ii) 2.8211 shares of validly issued,
fully paid and nonassessable shares of the Company’s common stock.
McGrath shareholders will receive for each of their shares either
$123.00 in cash or 2.8211 shares of WillScot Mobile Mini common
stock, as determined pursuant to the election and allocation
procedures in the merger agreement under which 60% of McGrath’s
outstanding shares will be converted into the cash consideration
and 40% of McGrath’s outstanding shares will be converted into the
stock consideration. Under the terms of the Merger Agreement, we
expect McGrath’s shareholders would own approximately 12.6% of the
Company following the McGrath Acquisition.
The McGrath Acquisition has been approved by the
Company and McGrath’s respective boards of directors. The McGrath
Acquisition is subject to customary closing conditions, including
receipt of regulatory approval and approval by McGrath’s
shareholders, and is expected to close in the second quarter of
2024.
In connection with the Merger Agreement, the
Company entered into a commitment letter on January 28, 2024, which
was further amended and restated on February 12, 2024 (the
"Commitment Letter"), pursuant to which certain financial
institutions have committed to make available to WSI, in accordance
with the terms of the Commitment Letter, (i) an $875 million
eight year senior secured bridge credit facility, (ii) an
$875 million five year senior secured bridge credit facility
and (iii) an upsize to WSI's existing $3.7 billion ABL
Facility by $750 million to $4.45 billion to repay
McGrath's existing credit facilities and notes, fund the cash
portion of the consideration, and pay the fees, costs and expenses
incurred in connection with the McGrath Acquisition and the related
transactions, subject to customary conditions.
Additional Information and Where to Find
It
Additional information can be found on the
company's website at www.willscotmobilemini.com.
|
Contact Information |
|
|
| |
|
|
|
Investor Inquiries: |
|
Media Inquiries: |
|
Nick Girardi |
|
Jake Saylor |
|
investors@willscotmobilemini.com |
|
jake.saylor@willscot.com |
| |
|
|
WillScot Mobile Mini Holdings Corp.
Consolidated Statements of
Operations
|
| |
Unaudited |
|
|
|
|
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
(in thousands, except share and per share
data) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenues: |
|
|
|
|
|
|
|
|
Leasing and services revenue: |
|
|
|
|
|
|
|
|
Leasing |
$ |
477,895 |
|
|
$ |
455,903 |
|
|
$ |
1,833,935 |
|
|
$ |
1,621,690 |
|
|
Delivery and installation |
|
102,197 |
|
|
|
105,756 |
|
|
|
437,179 |
|
|
|
429,152 |
|
|
Sales revenue: |
|
|
|
|
|
|
|
|
New units |
|
18,313 |
|
|
|
15,016 |
|
|
|
48,129 |
|
|
|
40,338 |
|
|
Rental units |
|
13,971 |
|
|
|
13,879 |
|
|
|
45,524 |
|
|
|
51,443 |
|
|
Total revenues |
|
612,376 |
|
|
|
590,554 |
|
|
|
2,364,767 |
|
|
|
2,142,623 |
|
|
Costs: |
|
|
|
|
|
|
|
|
Costs of leasing and services: |
|
|
|
|
|
|
|
|
Leasing |
|
98,065 |
|
|
|
100,703 |
|
|
|
398,467 |
|
|
|
376,868 |
|
|
Delivery and installation |
|
78,680 |
|
|
|
77,775 |
|
|
|
317,117 |
|
|
|
322,636 |
|
|
Costs of sales: |
|
|
|
|
|
|
|
|
New units |
|
10,340 |
|
|
|
9,136 |
|
|
|
26,439 |
|
|
|
24,011 |
|
|
Rental units |
|
6,938 |
|
|
|
6,691 |
|
|
|
23,141 |
|
|
|
26,907 |
|
|
Depreciation of rental equipment |
|
75,177 |
|
|
|
67,926 |
|
|
|
265,733 |
|
|
|
256,719 |
|
|
Gross profit |
|
343,176 |
|
|
|
328,323 |
|
|
|
1,333,870 |
|
|
|
1,135,482 |
|
|
Expenses: |
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
146,405 |
|
|
|
139,018 |
|
|
|
596,090 |
|
|
|
567,407 |
|
|
Other depreciation and amortization |
|
20,550 |
|
|
|
16,410 |
|
|
|
72,921 |
|
|
|
62,380 |
|
|
Currency (gains) losses, net |
|
(131 |
) |
|
|
762 |
|
|
|
6,754 |
|
|
|
886 |
|
|
Other (income) expense, net |
|
(821 |
) |
|
|
925 |
|
|
|
(15,354 |
) |
|
|
(6,673 |
) |
|
Operating income |
|
177,173 |
|
|
|
171,208 |
|
|
|
673,459 |
|
|
|
511,482 |
|
|
Interest expense |
|
59,125 |
|
|
|
44,546 |
|
|
|
205,040 |
|
|
|
146,278 |
|
|
Income from continuing operations before income tax |
|
118,048 |
|
|
|
126,662 |
|
|
|
468,419 |
|
|
|
365,204 |
|
|
Income tax expense from continuing operations |
|
31,720 |
|
|
|
27,644 |
|
|
|
126,575 |
|
|
|
88,863 |
|
|
Income from continuing operations |
|
86,328 |
|
|
|
99,018 |
|
|
|
341,844 |
|
|
|
276,341 |
|
| |
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
Income from discontinued operations before income tax |
|
— |
|
|
|
10,256 |
|
|
|
4,003 |
|
|
|
63,468 |
|
|
Gain on sale of discontinued operations |
|
— |
|
|
|
1,407 |
|
|
|
176,078 |
|
|
|
35,456 |
|
|
Income tax expense from discontinued operations |
|
— |
|
|
|
24,281 |
|
|
|
45,468 |
|
|
|
35,725 |
|
|
(Loss) income from discontinued operations |
|
— |
|
|
|
(12,618 |
) |
|
|
134,613 |
|
|
|
63,199 |
|
| |
|
|
|
|
|
|
|
|
Net income |
$ |
86,328 |
|
|
$ |
86,400 |
|
|
$ |
476,457 |
|
|
$ |
339,540 |
|
| |
|
|
|
|
|
|
|
|
Earnings per share from continuing operations attributable to
WillScot Mobile Mini common shareholders: |
|
|
|
Basic |
$ |
0.45 |
|
|
$ |
0.46 |
|
|
$ |
1.72 |
|
|
$ |
1.27 |
|
|
Diluted |
$ |
0.44 |
|
|
$ |
0.46 |
|
|
$ |
1.69 |
|
|
$ |
1.25 |
|
|
Earnings per share from discontinued operations attributable to
WillScot Mobile Mini common shareholders: |
|
|
|
Basic |
$ |
— |
|
|
$ |
(0.05 |
) |
|
$ |
0.68 |
|
|
$ |
0.30 |
|
|
Diluted |
$ |
— |
|
|
$ |
(0.06 |
) |
|
$ |
0.67 |
|
|
$ |
0.28 |
|
|
Earnings per share attributable to WillScot Mobile Mini common
shareholders: |
|
|
|
|
|
Basic |
$ |
0.45 |
|
|
$ |
0.41 |
|
|
$ |
2.40 |
|
|
$ |
1.57 |
|
|
Diluted |
$ |
0.44 |
|
|
$ |
0.40 |
|
|
$ |
2.36 |
|
|
$ |
1.53 |
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
Basic |
|
191,171,967 |
|
|
|
209,373,239 |
|
|
|
198,554,885 |
|
|
|
216,808,577 |
|
|
Diluted |
|
194,097,351 |
|
|
|
213,872,403 |
|
|
|
201,849,836 |
|
|
|
221,399,162 |
|
Unaudited Segment Operating
Data
The Company operates in two reportable segments:
Modular and Storage. Modular represents the activities of the North
American modular business, excluding ground level offices, which
were transferred to the Storage segment during the first quarter of
2023. Storage represents the activities of the North American
portable storage and ground level office business. All periods
presented have been retrospectively revised to reflect this change
within the Modular and Storage segments. Effective January 1, 2023,
we transferred approximately 6,000 Ground Level Office (GLO)
modular products from the Modular Solutions segment to our Storage
Solutions segment. We transferred these legacy WillScot GLOs to the
Storage Solutions segment because they are modified container
products that can be operated more efficiently on the legacy Mobile
Mini branch and logistics infrastructure. The adjustment
transferred approximately $49.8 million of revenue and $20.8
million of Adjusted EBITDA on an annualized basis from Modular
Solutions to Storage Solutions. We recast historical segment
financial results and operating key performance indicators (KPIs)
to reflect this transfer.
For the three months ended December 31, 2022,
this transfer resulted in approximately $12.9 million of
revenue, $7.6 million of gross profit, and $5.9 million
of Adjusted EBITDA being transferred from the Modular segment to
the Storage segment. For the year ended December 31, 2022, this
resulted in approximately $49.8 million of revenue,
$28.5 million of gross profit, and $20.8 million of
Adjusted EBITDA being transferred from the Modular segment to the
Storage segment. As part of the transfer, we adjusted the average
monthly rental rate for modular units (Ground Level Offices) in the
Storage segment to incorporate Value-Added Products specifically
applicable to Ground Level Offices.
Comparison of Three Months Ended
December 31, 2023 and 2022
| |
Three Months Ended December 31, 2023 |
|
(in thousands, except for units on rent and
rates) |
Modular |
|
Storage |
|
Total |
|
Revenue |
$ |
387,515 |
|
|
$ |
224,861 |
|
|
$ |
612,376 |
|
|
Gross profit |
$ |
180,972 |
|
|
$ |
162,204 |
|
|
$ |
343,176 |
|
|
Adjusted EBITDA from continuing operations |
$ |
161,561 |
|
|
$ |
126,241 |
|
|
$ |
287,802 |
|
|
Capital expenditures for rental equipment |
$ |
43,810 |
|
|
$ |
17,069 |
|
|
$ |
60,879 |
|
|
Average modular space units on rent |
|
81,826 |
|
|
|
17,962 |
|
|
|
99,788 |
|
|
Average modular space utilization rate |
|
65.2 |
% |
|
|
57.6 |
% |
|
|
63.7 |
% |
|
Average modular space monthly rental rate |
$ |
1,155 |
|
|
$ |
863 |
|
|
$ |
1,102 |
|
|
Average portable storage units on rent |
|
546 |
|
|
|
150,263 |
|
|
|
150,809 |
|
|
Average portable storage utilization rate |
|
68.9 |
% |
|
|
71.1 |
% |
|
|
71.1 |
% |
|
Average portable storage monthly rental rate |
$ |
319 |
|
|
$ |
266 |
|
|
$ |
266 |
|
| |
Three Months Ended December 31, 2022 |
|
(in thousands, except for units on rent and
rates) |
Modular |
|
Storage |
|
Total |
|
Revenue |
$ |
356,160 |
|
|
$ |
234,394 |
|
|
$ |
590,554 |
|
|
Gross profit |
$ |
165,107 |
|
|
$ |
163,216 |
|
|
$ |
328,323 |
|
|
Adjusted EBITDA from continuing operations |
$ |
150,687 |
|
|
$ |
117,403 |
|
|
$ |
268,090 |
|
|
Capital expenditures for rental equipment |
$ |
57,968 |
|
|
$ |
22,598 |
|
|
$ |
80,566 |
|
|
Average modular space units on rent |
|
83,702 |
|
|
|
21,933 |
|
|
|
105,635 |
|
|
Average modular space utilization rate |
|
67.5 |
% |
|
|
69.9 |
% |
|
|
68.0 |
% |
|
Average modular space monthly rental rate |
$ |
1,028 |
|
|
$ |
759 |
|
|
$ |
972 |
|
|
Average portable storage units on rent |
|
569 |
|
|
|
184,632 |
|
|
|
185,201 |
|
|
Average portable storage utilization rate |
|
65.7 |
% |
|
|
89.2 |
% |
|
|
89.1 |
% |
|
Average portable storage monthly rental rate |
$ |
227 |
|
|
$ |
220 |
|
|
$ |
220 |
|
Comparison of Year
Ended December 31, 2023 and
2022
| |
Year Ended December 31, 2023 |
|
(in thousands, except for units on rent and
rates) |
Modular |
|
Storage |
|
Total |
|
Revenue |
$ |
1,495,666 |
|
|
$ |
869,101 |
|
|
$ |
2,364,767 |
|
|
Gross profit |
$ |
700,226 |
|
|
$ |
633,644 |
|
|
$ |
1,333,870 |
|
|
Adjusted EBITDA from continuing operations |
$ |
598,354 |
|
|
$ |
463,111 |
|
|
$ |
1,061,465 |
|
|
Capital expenditures for rental equipment |
$ |
184,993 |
|
|
$ |
41,612 |
|
|
$ |
226,605 |
|
|
Average modular space units on rent |
|
81,870 |
|
|
|
18,952 |
|
|
|
100,822 |
|
|
Average modular space utilization rate |
|
65.6 |
% |
|
|
61.1 |
% |
|
|
64.7 |
% |
|
Average modular space monthly rental rate |
$ |
1,111 |
|
|
$ |
826 |
|
|
$ |
1,058 |
|
|
Average portable storage units on rent |
|
496 |
|
|
|
153,890 |
|
|
|
154,386 |
|
|
Average portable storage utilization rate |
|
62.5 |
% |
|
|
73.3 |
% |
|
|
73.2 |
% |
|
Average portable storage monthly rental rate |
$ |
251 |
|
|
$ |
238 |
|
|
$ |
238 |
|
| |
Year Ended December 31, 2022 |
|
(in thousands, except for units on rent and
rates) |
Modular |
|
Storage |
|
Total |
|
Revenue |
$ |
1,342,033 |
|
|
$ |
800,590 |
|
|
$ |
2,142,623 |
|
|
Gross profit |
$ |
583,837 |
|
|
$ |
551,645 |
|
|
$ |
1,135,482 |
|
|
Adjusted EBITDA from continuing operations |
$ |
508,343 |
|
|
$ |
375,531 |
|
|
$ |
883,874 |
|
|
Capital expenditures for rental equipment |
$ |
279,079 |
|
|
$ |
118,297 |
|
|
$ |
397,376 |
|
|
Average modular space units on rent |
|
82,517 |
|
|
|
22,291 |
|
|
|
104,808 |
|
|
Average modular space utilization rate |
|
67.5 |
% |
|
|
72.4 |
% |
|
|
68.5 |
% |
|
Average modular space monthly rental rate |
$ |
966 |
|
|
$ |
682 |
|
|
$ |
905 |
|
|
Average portable storage units on rent |
|
516 |
|
|
|
169,049 |
|
|
|
169,565 |
|
|
Average portable storage utilization rate |
|
58.7 |
% |
|
|
86.9 |
% |
|
|
86.8 |
% |
|
Average portable storage monthly rental rate |
$ |
208 |
|
|
$ |
192 |
|
|
$ |
192 |
|
WillScot Mobile Mini Holdings Corp.
Consolidated Balance
Sheets |
(in thousands, except share
data)
|
|
December 31, 2023 |
|
|
|
December 31, 2022 |
|
| Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
10,958 |
|
|
$ |
7,390 |
|
|
Trade receivables, net of allowances for credit losses at December
31, 2023 and December 31, 2022 of $81,656 and $57,048,
respectively |
|
451,130 |
|
|
|
409,766 |
|
|
Inventories |
|
47,406 |
|
|
|
41,030 |
|
|
Prepaid expenses and other current assets |
|
57,492 |
|
|
|
31,635 |
|
|
Assets held for sale – current |
|
2,110 |
|
|
|
31,220 |
|
|
Total current assets |
|
569,096 |
|
|
|
521,041 |
|
|
Rental equipment, net |
|
3,381,315 |
|
|
|
3,077,287 |
|
|
Property, plant and equipment, net |
|
340,887 |
|
|
|
304,659 |
|
|
Operating lease assets |
|
245,647 |
|
|
|
219,405 |
|
|
Goodwill |
|
1,176,635 |
|
|
|
1,011,429 |
|
|
Intangible assets, net |
|
419,709 |
|
|
|
419,125 |
|
|
Other non-current assets |
|
4,626 |
|
|
|
6,683 |
|
|
Assets held for sale – non-current |
|
— |
|
|
|
268,022 |
|
|
Total long-term assets |
|
5,568,819 |
|
|
|
5,306,610 |
|
|
Total assets |
$ |
6,137,915 |
|
|
$ |
5,827,651 |
|
|
Liabilities and equity |
|
|
|
|
|
|
|
|
Accounts payable |
$ |
86,123 |
|
|
$ |
109,349 |
|
|
Accrued expenses |
|
129,621 |
|
|
|
109,542 |
|
|
Accrued employee benefits |
|
45,564 |
|
|
|
56,340 |
|
|
Deferred revenue and customer deposits |
|
224,518 |
|
|
|
203,793 |
|
|
Operating lease liabilities – current |
|
57,408 |
|
|
|
50,499 |
|
|
Current portion of long-term debt |
|
18,786 |
|
|
|
13,324 |
|
|
Liabilities held for sale – current |
|
— |
|
|
|
19,095 |
|
|
Total current liabilities |
|
562,020 |
|
|
|
561,942 |
|
|
Long-term debt |
|
3,538,516 |
|
|
|
3,063,042 |
|
|
Deferred tax liabilities |
|
554,268 |
|
|
|
401,453 |
|
|
Operating lease liabilities – non-current |
|
187,837 |
|
|
|
169,618 |
|
|
Other non-current liabilities |
|
34,024 |
|
|
|
18,537 |
|
|
Liabilities held for sale – non-current |
|
— |
|
|
|
47,759 |
|
|
Long-term liabilities |
|
4,314,645 |
|
|
|
3,700,409 |
|
|
Total liabilities |
|
4,876,665 |
|
|
|
4,262,351 |
|
|
Preferred Stock: $0.0001 par, 1,000,000 shares authorized and zero
shares issued and outstanding at December 31, 2023 and December 31,
2022 |
|
— |
|
|
|
— |
|
|
Common Stock: $0.0001 par, 500,000,000 shares authorized and
189,967,135 and 207,951,682 shares issued and outstanding at
December 31, 2023 and December 31, 2022, respectively |
|
20 |
|
|
|
21 |
|
|
Additional paid-in-capital |
|
2,089,091 |
|
|
|
2,886,951 |
|
|
Accumulated other comprehensive loss |
|
(52,768 |
) |
|
|
(70,122 |
) |
|
Accumulated deficit |
|
(775,093 |
) |
|
|
(1,251,550 |
) |
|
Total shareholders' equity |
|
1,261,250 |
|
|
|
1,565,300 |
|
|
Total liabilities and shareholders' equity |
$ |
6,137,915 |
|
|
$ |
5,827,651 |
|
Reconciliation of Non-GAAP Financial
Measures
In addition to using GAAP financial
measurements, we use certain non-GAAP financial information that we
believe is important for purposes of comparison to prior periods
and development of future projections and earnings growth
prospects. This information is also used by management to measure
the profitability of our ongoing operations and analyze our
business performance and trends.
We evaluate business segment performance on
Adjusted EBITDA, a non-GAAP measure that excludes certain items as
described below. We believe that evaluating segment performance
excluding such items is meaningful because it provides insight with
respect to intrinsic and ongoing operating results of the
Company.
We also regularly evaluate gross profit by
segment to assist in the assessment of the operational performance
of each operating segment. We consider Adjusted EBITDA to be the
more important metric because it more fully captures the business
performance of the segments, inclusive of indirect costs.
We also evaluate Free Cash Flow, a non-GAAP
measure that provides useful information concerning cash flow
available to fund our capital allocation alternatives.
Adjusted EBITDA From Continuing
Operations
Adjusted EBITDA is a non-GAAP measure defined as
net income (loss) before income tax expense (benefit), net interest
(income) expense, depreciation and amortization adjusted for
certain items not related to our core business operations:
- Currency (gains)
losses, net: on monetary assets and liabilities denominated in
foreign currencies other than the subsidiaries’ functional
currency.
- Goodwill and
other impairment charges related to non-cash costs associated with
impairment charges to goodwill, other intangibles, rental fleet and
property, plant and equipment.
- Restructuring
costs, lease impairment expense, and other related charges
associated with restructuring plans designed to streamline
operations and reduce costs including employee termination
costs.
- Transaction
costs including legal and professional fees and other transaction
specific related costs.
- Costs to
integrate acquired companies, including outside professional fees,
non-capitalized costs associated with system integrations,
non-lease branch and fleet relocation expenses, employee training
costs, and other costs required to realize cost or revenue
synergies.
- Non-cash charges
for stock compensation plans.
- Gains and losses
resulting from changes in fair value and extinguishment of common
stock warrant liabilities.
- Other expense,
including consulting expenses related to certain one-time projects,
financing costs not classified as interest expense, and gains and
losses on disposals of property, plant, and equipment.
Adjusted EBITDA has limitations as an analytical
tool, and you should not consider the measure in isolation or as a
substitute for net income (loss), cash flow from operations or
other methods of analyzing the Company’s results as reported under
US GAAP. Some of these limitations are:
- Adjusted EBITDA
does not reflect changes in, or cash requirements for our working
capital needs;
- Adjusted EBITDA
does not reflect our interest expense, or the cash requirements
necessary to service interest or principal payments, on our
indebtedness;
- Adjusted EBITDA
does not reflect our tax expense or the cash requirements to pay
our taxes;
- Adjusted EBITDA
does not reflect historical cash expenditures or future
requirements for capital expenditures or contractual
commitments;
- Adjusted EBITDA
does not reflect the impact on earnings or changes resulting from
matters that we consider not to be indicative of our future
operations;
- Although
depreciation and amortization are non-cash charges, the assets
being depreciated and amortized will often have to be replaced in
the future and Adjusted EBITDA does not reflect any cash
requirements for such replacements; and
- Other companies
in our industry may calculate Adjusted EBITDA differently, limiting
its usefulness as a comparative measure.
Because of these limitations, Adjusted EBITDA
should not be considered as discretionary cash available to
reinvest in the growth of our business or as measures of cash that
will be available to meet our obligations.
The following table provides unaudited
reconciliations of Income from continuing operations to Adjusted
EBITDA from continuing operations:
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
(in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Income from continuing operations |
$ |
86,328 |
|
|
$ |
99,018 |
|
|
$ |
341,844 |
|
|
$ |
276,341 |
|
Income tax expense from continuing operations |
|
31,720 |
|
|
|
27,644 |
|
|
|
126,575 |
|
|
|
88,863 |
|
Interest expense |
|
59,125 |
|
|
|
44,546 |
|
|
|
205,040 |
|
|
|
146,278 |
|
Depreciation and amortization |
|
95,727 |
|
|
|
84,337 |
|
|
|
338,654 |
|
|
|
319,099 |
|
Currency (gains) losses, net |
|
(131 |
) |
|
|
762 |
|
|
|
6,754 |
|
|
|
886 |
|
Restructuring costs, lease impairment expense and other related
charges |
|
— |
|
|
|
— |
|
|
|
22 |
|
|
|
168 |
|
Transaction costs |
|
1,472 |
|
|
|
(10 |
) |
|
|
2,259 |
|
|
|
25 |
|
Integration costs |
|
3,466 |
|
|
|
2,302 |
|
|
|
10,366 |
|
|
|
15,484 |
|
Stock compensation expense |
|
8,352 |
|
|
|
7,101 |
|
|
|
34,486 |
|
|
|
29,613 |
|
Other |
|
1,743 |
|
|
|
2,390 |
|
|
|
(4,535 |
) |
|
|
7,117 |
|
Adjusted EBITDA from continuing operations |
$ |
287,802 |
|
|
$ |
268,090 |
|
|
$ |
1,061,465 |
|
|
$ |
883,874 |
The following tables provide unaudited
reconciliations of Income before income tax to Adjusted EBITDA for
the ground level office segment adjustment:
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
(in thousands) |
|
2022 |
|
|
2022 |
|
Income before income tax |
$ |
5,021 |
|
$ |
17,142 |
|
Depreciation |
|
899 |
|
|
3,624 |
|
Adjusted EBITDA |
$ |
5,920 |
|
$ |
20,766 |
Adjusted EBITDA Margin From Continuing
Operations
We define Adjusted EBITDA Margin as Adjusted
EBITDA divided by revenue. Management believes that the
presentation of Adjusted EBITDA Margin provides useful information
to investors regarding the performance of our business. The
following table provides unaudited reconciliations of Adjusted
EBITDA Margin:
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
(in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Adjusted EBITDA from continuing operations (A) |
$ |
287,802 |
|
|
$ |
268,090 |
|
|
$ |
1,061,465 |
|
|
$ |
883,874 |
|
|
Revenue (B) |
$ |
612,376 |
|
|
$ |
590,554 |
|
|
$ |
2,364,767 |
|
|
$ |
2,142,623 |
|
|
Adjusted EBITDA Margin from Continuing Operations (A/B) |
|
47.0 |
% |
|
|
45.4 |
% |
|
|
44.9 |
% |
|
|
41.3 |
% |
|
Income from continuing operations (C) |
$ |
86,328 |
|
|
$ |
99,018 |
|
|
$ |
341,844 |
|
|
$ |
276,341 |
|
|
Income from Continuing Operations Margin (C/B) |
|
14.1 |
% |
|
|
16.8 |
% |
|
|
14.5 |
% |
|
|
12.9 |
% |
Net Debt to Adjusted EBITDA From
Continuing Operations Ratio
Net Debt to Adjusted EBITDA ratio is defined as
Net Debt divided by Adjusted EBITDA from continuing operations from
the last twelve months. We define Net Debt as total debt from
continuing operations net of total cash and cash equivalents from
continuing operations. Management believes that the presentation of
Net Debt to Adjusted EBITDA ratio provides useful information to
investors regarding the performance of our business. The following
table provides an unaudited reconciliation of Net Debt to Adjusted
EBITDA ratio:
|
(in thousands) |
December 31, 2023 |
|
Long-term debt |
$ |
3,538,516 |
|
Current portion of long-term debt |
|
18,786 |
|
Total debt |
|
3,557,302 |
|
Cash and cash equivalents |
|
10,958 |
|
Net debt (A) |
$ |
3,546,344 |
| |
|
|
Adjusted EBITDA from continuing operations for the year ended
December 31, 2023 (B) |
$ |
1,061,465 |
|
Net Debt to Adjusted EBITDA ratio (A/B) |
|
3.3 |
Free Cash Flow and Free Cash Flow
Margin
Free Cash Flow is a non-GAAP measure. We define
Free Cash Flow as net cash provided by operating activities, less
purchases of, and proceeds from, rental equipment and property,
plant and equipment, which are all included in cash flows from
investing activities. Free Cash Flow Margin is defined as Free Cash
Flow divided by Total Revenue including discontinued operations.
Management believes that the presentation of Free Cash Flow and
Free Cash Flow Margin provides useful additional information
concerning cash flow available to fund our capital allocation
alternatives. Free Cash Flow as presented includes amounts for the
former Tank and Pump segment through September 30, 2022 and the
former UK Storage Solutions segment through January 31, 2023. The
following table provides unaudited reconciliations of Free Cash
Flow and Free Cash Flow Margin:
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
(in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net cash provided by operating activities |
$ |
219,322 |
|
|
$ |
200,420 |
|
|
$ |
761,240 |
|
|
$ |
744,658 |
|
|
Purchase of rental equipment and refurbishments |
|
(60,879 |
) |
|
|
(82,673 |
) |
|
|
(226,976 |
) |
|
|
(443,138 |
) |
|
Proceeds from sale of rental equipment |
|
13,316 |
|
|
|
18,440 |
|
|
|
51,290 |
|
|
|
70,703 |
|
|
Purchase of property, plant and equipment |
|
(5,485 |
) |
|
|
(13,411 |
) |
|
|
(22,237 |
) |
|
|
(43,664 |
) |
|
Proceeds from the sale of property, plant and equipment |
|
6 |
|
|
|
130 |
|
|
|
13,272 |
|
|
|
1,775 |
|
|
Free Cash Flow (A) |
$ |
166,280 |
|
|
$ |
122,906 |
|
|
$ |
576,589 |
|
|
$ |
330,334 |
|
| |
|
|
|
|
|
|
|
|
Revenue from continuing operations (B) |
$ |
612,376 |
|
|
$ |
590,554 |
|
|
$ |
2,364,767 |
|
|
$ |
2,142,623 |
|
|
Revenue from discontinued operations |
|
— |
|
|
|
24,938 |
|
|
|
8,694 |
|
|
|
201,565 |
|
|
Total Revenue including discontinued operations (C) |
$ |
612,376 |
|
|
$ |
615,492 |
|
|
$ |
2,373,461 |
|
|
$ |
2,344,188 |
|
|
Free Cash Flow Margin (A/C) |
|
27.2 |
% |
|
|
20.0 |
% |
|
|
24.3 |
% |
|
|
14.1 |
% |
| |
|
|
|
|
|
|
|
|
Net cash provided by operating activities (D) |
$ |
219,322 |
|
|
$ |
200,420 |
|
|
$ |
761,240 |
|
|
$ |
744,658 |
|
|
Net cash provided by operating activities margin (D/C) |
|
35.8 |
% |
|
|
32.6 |
% |
|
|
32.1 |
% |
|
|
31.8 |
% |
Net CAPEX
We define Net CAPEX as purchases of rental equipment and
refurbishments and purchases of property, plant and equipment
(collectively, "Total Capital Expenditures"), less proceeds from
the sale of rental equipment and proceeds from the sale of
property, plant and equipment (collectively, "Total Proceeds"),
which are all included in cash flows from investing activities.
Management believes that the presentation of Net CAPEX provides
useful information regarding the net capital invested in our rental
fleet and property, plant and equipment each year to assist in
analyzing the performance of our business. As presented below, Net
CAPEX including discontinued operations includes amounts for the
former Tank and Pump segment through September 30, 2022 and the
former UK Storage Solutions segment through January 31, 2023.
The following table provides unaudited
reconciliations of Net CAPEX, which is calculated using metrics
from our Statements of Cash Flows:
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
(in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Total purchases of rental equipment and refurbishments |
$ |
(60,879 |
) |
|
$ |
(82,673 |
) |
|
$ |
(226,976 |
) |
|
$ |
(443,138 |
) |
|
Total proceeds from sale of rental equipment |
|
13,316 |
|
|
|
18,440 |
|
|
|
51,290 |
|
|
|
70,703 |
|
|
Net CAPEX for Rental Equipment |
|
(47,563 |
) |
|
|
(64,233 |
) |
|
|
(175,686 |
) |
|
|
(372,435 |
) |
|
Purchase of property, plant and equipment |
|
(5,485 |
) |
|
|
(13,411 |
) |
|
|
(22,237 |
) |
|
|
(43,664 |
) |
|
Proceeds from sale of property, plant and equipment |
|
6 |
|
|
|
130 |
|
|
|
13,272 |
|
|
|
1,775 |
|
|
Net CAPEX including discontinued operations |
|
(53,042 |
) |
|
|
(77,514 |
) |
|
|
(184,651 |
) |
|
|
(414,324 |
) |
|
UK Storage Solutions Net CAPEX |
|
— |
|
|
|
(2,848 |
) |
|
|
87 |
|
|
|
(25,724 |
) |
|
Tank and Pump Net CAPEX |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(21,438 |
) |
|
Net CAPEX from continuing operations |
$ |
(53,042 |
) |
|
$ |
(74,666 |
) |
|
$ |
(184,738 |
) |
|
$ |
(367,162 |
) |
Return on Invested Capital
Return on Invested Capital is defined as
adjusted earnings before interest and amortization divided by net
assets. Adjusted earnings before interest and amortization is the
sum of income (loss) before income tax expense, net interest
(income) expense, amortization adjusted for non-cash items
considered non-core to business operations including net currency
(gains) losses, goodwill and other impairment charges,
restructuring costs, costs to integrate acquired companies,
non-cash charges for stock compensation plans, gains and losses
resulting from changes in fair value and extinguishment of common
stock warrant liabilities, and other discrete expenses, reduced by
estimated taxes. Given we are not a significant US taxpayer due to
our current tax attributes, we include estimated taxes at our
current statutory tax rate of approximately 26% effective in 2023.
Net assets is total assets less goodwill, and intangible assets,
net and all non-interest bearing liabilities. Denominator is
calculated as a four quarter average for annual metrics and two
quarter average for quarterly metrics.
The following table provides unaudited
reconciliations of Return on Invested Capital, which is calculated
using metrics from our Balance Sheets and Statements of Operations.
Average Invested Capital and Adjusted EBITDA related to our former
Tank and Pump segment and former UK Storage Solutions segment have
been excluded prospectively from July 1, 2022 and January 1, 2023,
respectively, and prior periods have not been adjusted.
| |
Three Months Ended December 31, |
|
Year Ended December 31, |
|
(in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Total Assets |
$ |
6,137,915 |
|
|
$ |
5,827,651 |
|
|
$ |
6,137,915 |
|
|
$ |
5,827,651 |
|
|
Goodwill |
|
(1,176,635 |
) |
|
|
(1,069,573 |
) |
|
|
(1,176,635 |
) |
|
|
(1,069,573 |
) |
|
Intangible assets, net |
|
(419,709 |
) |
|
|
(425,539 |
) |
|
|
(419,709 |
) |
|
|
(425,539 |
) |
|
Total Liabilities |
|
(4,876,665 |
) |
|
|
(4,262,351 |
) |
|
|
(4,876,665 |
) |
|
|
(4,262,351 |
) |
|
Long Term Debt |
|
3,538,516 |
|
|
|
3,063,042 |
|
|
|
3,538,516 |
|
|
|
3,063,042 |
|
|
Net Assets excluding interest bearing debt and goodwill and
intangibles |
$ |
3,203,422 |
|
|
$ |
3,133,230 |
|
|
$ |
3,203,422 |
|
|
$ |
3,133,230 |
|
|
Average Invested Capital (A) |
$ |
3,208,368 |
|
|
$ |
3,127,148 |
|
|
$ |
3,124,064 |
|
|
$ |
3,121,035 |
|
| |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
287,802 |
|
|
$ |
280,079 |
|
|
$ |
1,061,465 |
|
|
$ |
956,576 |
|
|
Depreciation |
|
(87,716 |
) |
|
|
(79,887 |
) |
|
|
(312,830 |
) |
|
|
(314,531 |
) |
|
Adjusted EBITA (B) |
$ |
200,086 |
|
|
$ |
200,192 |
|
|
$ |
748,635 |
|
|
$ |
642,045 |
|
| |
|
|
|
|
|
|
|
|
Statutory Tax Rate (C) |
|
26 |
% |
|
|
25 |
% |
|
|
26 |
% |
|
|
25 |
% |
|
Estimated Tax (B*C) |
$ |
52,022 |
|
|
$ |
50,048 |
|
|
$ |
194,645 |
|
|
$ |
160,511 |
|
|
Adjusted earnings before interest and amortization (D) |
$ |
148,064 |
|
|
$ |
150,144 |
|
|
$ |
553,990 |
|
|
$ |
481,534 |
|
|
ROIC (D/A), annualized |
|
18.5 |
% |
|
|
19.2 |
% |
|
|
17.7 |
% |
|
|
15.4 |
% |
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