Mobile Mini, Inc. Reports First Quarter Earnings; Favorable Business Trends Continue; Guidance is Affirmed.Business Editors TEMPE, Ariz.--(BUSINESS WIRE)--May 4, 2004 Mobile Mini, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on National Market: MINI) today reported its financial results for the first quarter ended March 31, 2004. First Quarter 2004 vs. First Quarter 2003 -- Total revenues increased 8.2% to $36.5 million from $33.7 million; -- Lease revenues increased 8.2% to $32.1 million from $29.7 million; -- Sales revenues rose 8.8% to $4.2 million from $3.9 million; -- Lease revenues comprised 88.0% of total revenues as it did in Q1 2003; -- Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was up 7.9% to $10.3 million from $9.5 million; -- EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (earnings before interest expense, tax, depreciation and amortization) rose 9.2%, to $13.2 million from $12.1 million; -- Net income was $3.2 million or $0.22 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared to $3.8 million or $0.27 per diluted share in Q1 2003. Net income during the first quarter of 2004 was affected by approximately $0.06 per share in higher interest expense related to the issuance of the Company's 9.5% Senior Notes in June June: see month. 2003. Other First Quarter Highlights -- Internal growth (the increase in leasing revenues at locations open one year or more, excluding growth from acquisitions at such locations) was approximately 8% compared to 7% in Q4 2003 and 6% in Q3 2003; -- The average utilization rate was 76.2% compared to 75.5% in Q1 2003; -- Yield (total lease revenues per unit on rent) was 0.6% ahead of last year's first quarter, and the average number of units on rent was up 7.6%; -- Total containers on lease at the branches established in 2002 rose 42.4% compared to last year's first quarter. Business Overview Steven Ste´ven n. 1. Voice; speech; language. Ye have as merry a steven As any angel hath that is in heaven. - Chaucer. 2. An outcry; a loud call; a clamor. To set steven to make an appointment. Bunger, Chairman, President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Mobile Mini, stated, "The first quarter, while historically our weakest, produced results ahead of our expectations. Many key business indicators showed marked improvement from the corresponding period one year earlier and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. the immediately preceding quarter. Most notably, our internal growth rate of 8% is ahead of our fourth quarter 2003 rate of 7%, which was also our projected annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. rate for 2004. The two most critical contributors were the 7.6% growth in average units on rent and the 0.6% improvement in yield. This is the third consecutive quarter in which our internal growth rate was ahead of the rate for the immediately preceding quarter and our second consecutive quarter in which our yield compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. with the prior year period." Mr. Bunger further stated, "We have reason to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that these favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. trends will continue in future quarters. In late February February: see month. , we reported that business conditions were improving measured by a 7.5% growth rate in units on lease at February 15th as compared to units on lease on the same date one year earlier. In late April, our year-over-year growth rate measured in units on lease had accelerated to nearly 9%. With four months under our belt, it appears that the turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. in our core, non-construction, commercial, industrial and institutional business is in fact underway. These customers, which represented approximately two-thirds of our units on lease in 2003, are less concerned with price and more interested in service, product features and security. In addition, their need for storage or additional office space is typically stable as compared to the stop and start nature of holiday retail and construction industry customer demands." Favorable Trends Continue He went on to say, "Furthermore, it appears that the tide is turning in the right direction for non-residential construction after nearly three years of decline. This is what we are learning from a number of our branches, confirmed by other organizations that serve the non-residential construction market. A resurgence re·sur·gence n. 1. A continuing after interruption; a renewal. 2. A restoration to use, acceptance, activity, or vigor; a revival. in non-residential construction would stimulate growth in containers on lease, utilization rate, possibly rental rates, and most assuredly would drive our lease revenue higher. Our non-residential construction business, while better than a year ago, is still well below optimum levels. If, as we hope, this trend spreads and builds momentum in more geographic regions where we have branches, we will be able to further leverage our current branch infrastructure by increasing containers on lease at our existing branches, which produces 73% EBITDA margins and 59% pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern margins on incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. leasing revenues. This is further explained in the description of our business model below." The Business Model Mobile Mini's business model involves substantial fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). at all of its 47 locations in order maintain the infrastructure necessary to support growth. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increase when the number of containers on lease at existing locations increases. Newer locations, which are the catalyst for growth in lease revenue and earnings as they mature, typically generate lower operating margins than the branch average, until they ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale their number of containers on lease. The table below shows operating margins and the return on the invested capital at our various branches sorted by the year they began operations. It illustrates the profitability of branches once they are firmly established. It also shows that older branches produced healthy returns on invested capital.
After Tax Return on
Invested Capital Operating Margin %
(NOPLAT) (after corporate
Pro Forma (1) allocation)
Year Branch 12 months ended March 31, 3 months ended March 31,
Established 2003 2004 2003 2004
----------------------------------------------------------------------
Pre-1998 15.4% 14.3% 38.0% 35.5%
----------------------------------------------------------------------
1998 14.8% 14.4% 38.0% 39.1%
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1999 7.0% 6.1% 14.7% 15.5%
----------------------------------------------------------------------
2000 8.1% 9.1% 23.2% 25.2%
----------------------------------------------------------------------
2001 5.7% 7.3% 12.0% 17.0%
----------------------------------------------------------------------
2002 4.5% 3.6% (12.7)% 8.2%
----------------------------------------------------------------------
2003 N/A N/A N/A (20.5)%
----------------------------------------------------------------------
All Branches 12.0% 11.0% 28.2% 28.1%
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(1) NOPLAT is presented on a pro forma basis, which excludes our
Florida litigation expenses incurred in 2003. Litigation expense
represents the judgment and interest, as well as legal and other
costs expensed during the period, related to the defense of the
Florida litigation (Nuko Holdings I, LLC v. Mobile Mini) and
related litigation.
Larry Trachtenberg, Executive Vice President & CFO See Chief Financial Officer. noted, "Our stronger than expected first quarter revenues and operating results and early second quarter trends give us the confidence to reiterate re·it·er·ate tr.v. re·it·er·at·ed, re·it·er·at·ing, re·it·er·ates To say or do again or repeatedly. See Synonyms at repeat. re·it our 2004 earnings guidance of between $1.20 and $1.25 per diluted share and EBITDA of between $61 million and $62 million. Note though that if the business recovery across our various customer segments, particularly the non-residential construction segment, is sustainable, we would expect results at the higher end Coordinates: For other places with the same name, see Billinge. Higher End or Billinge Higher End is a district of the Metropolitan Borough of Wigan, in Greater Manchester, England. of guidance or better." Discussing the second quarter, Mr. Trachtenberg stated, "We are looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. net income of at least $.25 per diluted share compared to last year's pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma $.30 per diluted share, which excludes last year's non-recurring litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: expense. This equates to EBITDA of $14 million in this year's second quarter compared to $13 million during last year's second quarter, prior to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. litigation expense. Second quarter 2004 earnings per share will again be negatively affected, as compared with second quarter 2003, by approximately $0.06 in additional interest expense related to the issuance of the Senior Notes in June 2003." EBITDA and pro forma financial measures, including those that are forward-looking, may be non-GAAP financial measures as defined by Securities and Exchange Commission rules Securities and Exchange Commission Rules Rules enacted by the SEC to assist in the regulation of US financial markets. . The method of reconciliation of these measures to the most directly comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measures can be found in the Company's report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. filed with the SEC on the date of this release. Conference Call As previously announced, Mobile Mini will host a conference call today, Tuesday, May 4th at 12 noon EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to review these results and recent corporate developments. To listen to the live call, please go to www.mobilemini.com and click on the Investor Relations Investor relations The process by which the corporation communicates with its investors. section. Please go to the website 15 minutes early to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. If you are unable to listen live, the conference call can be accessed for approximately 14 days at Mobile Mini's website. Mobile Mini, Inc. is North America's leading provider of portable storage solutions through its total fleet of over 92,000 portable storage units and portable offices. The Company currently has 47 branches and operates in 27 states and one Canadian province Noun 1. Canadian province - Canada is divided into 12 provinces for administrative purposes province, state - the territory occupied by one of the constituent administrative districts of a nation; "his state is in the deep south" . For three consecutive years, Mobile Mini was named to Forbes Magazine's list of the 200 Best Small Companies in America. Mobile Mini is included on the Russell 2000(R) and 3000(R) Indexes and the S&P Small Cap Index. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , particularly regarding operating prospects, expansion opportunities and earnings estimates for 2004, which involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Risks and uncertainties that may affect future results include those that are described from time to time in the Company's SEC filings. These forward-looking statements represent the judgment of the Company, as of the date of this release, and Mobile Mini disclaims any intent or obligation to update forward-looking statements.
Mobile Mini, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(in 000's except for earnings per share amounts)
Three Months
Ended
March 31,
2004 2003
----------------
Revenues:
Leasing $32,147 $29,704
Sales 4,198 3,860
Other 178 178
----------------
Total revenues 36,523 33,742
----------------
Costs and expenses:
Cost of sales 2,715 2,454
Leasing, selling and general expenses 20,579 19,172
Depreciation and amortization 2,979 2,617
----------------
Total costs and expenses 26,273 24,243
----------------
Income from operations 10,250 9,499
Other income (expense):
Interest income - 1
Interest expense (4,991) (3,216)
----------------
Income before provision for income taxes 5,259 6,284
Provision for income taxes 2,104 2,451
----------------
Net income $3,155 $3,833
================
Earnings per share:
Basic $0.22 $0.27
================
Diluted $0.22 $0.27
================
Weighted average number of common and common
share equivalents outstanding:
Basic 14,353 14,294
----------------
Diluted 14,532 14,383
----------------
Number of shares outstanding 14,353 14,295
----------------
EBITDA $13,229 $12,117
================
Mobile Mini, Inc.
Condensed Consolidated Balance Sheets
(in 000's except share amounts)
March December
31, 31,
2004 2003
--------------------
ASSETS (unaudited)(audited)
Cash $405 $97
Receivables, net 14,941 15,907
Inventories 16,961 15,059
Lease fleet, net 391,967 382,754
Property, plant and equipment, net 34,622 34,507
Deposits and prepaid expenses 7,142 7,166
Other assets and intangibles, net 6,832 7,083
Goodwill 52,497 52,507
--------------------
Total assets $525,367 $515,080
====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $6,006 $7,179
Accrued liabilities 20,418 30,641
Line of credit 106,301 89,000
Notes payable 1,255 1,610
Senior notes 150,000 150,000
Deferred income taxes 49,226 47,357
--------------------
Total liabilities 333,206 325,787
--------------------
Commitments and contingencies
Stockholders' equity:
Common stock; $0.01 par value, 95,000,000 shares
authorized, 14,353,103 and 14,352,703 issued and
outstanding at March 31, 2004 and December 31,
2003, respectively 144 144
Additional paid-in capital 116,961 116,956
Retained earnings 75,451 72,295
Accumulated other comprehensive loss (395) (102)
--------------------
Total stockholders' equity 192,161 189,293
--------------------
Total liabilities and stockholders' equity $525,367 $515,080
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