Mobile Mini, Inc. Reports Fourth Quarter and Fiscal Year 2003 Operating Results; 2004 Starts on a Positive Note.Business Editors TEMPE, Ariz.--(BUSINESS WIRE)--Feb. 26, 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 fourth quarter and the fiscal year ended December December: see month. 31, 2003.
Three Months ended December 31, 2003
Debt
Restructuring Litigation
Pro forma Expense Expense(2) Actual
------------- -------------- ----------- -------------
Revenue $41,138,585 $ - $ - $41,138,585
EBITDA 15,696,621 - 8,217,703 7,478,918
Net Income
(Loss) 4,747,721 - 5,012,799 (265,078)
Diluted
Earnings
(Loss) Per
Share $0.33 $ - $0.35 $(0.02)
Year-ended December 31, 2003
Debt
Restructuring Litigation
Pro forma Expense(1) Expense(2) Actual
------------- -------------- ----------- -------------
Revenue $146,568,496 $ - $ - $146,568,496
EBITDA 56,012,077 - 8,501,679 47,510,398
Net Income 17,466,958 6,368,611 5,186,024 5,912,323
Diluted
Earnings Per
Share $1.21 $0.44 $0.36 $0.41
(1) The 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 includes the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of expenses associated with the prior revolving credit agreement Revolving credit agreement A legal commitment in which a bank promises to lend a customer up to a specified maximum amount during a specified period. revolving credit agreement See line of credit. and termination of the interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. agreements during the second quarter of 2003 concurrently with the issuance of $150 million of 9 1/2% senior notes due 2013 and the amendment and restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of Mobile Mini's $250 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. 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 results exclude debt restructuring expense of $10.4 million ($6.4 million, after tax). (2) 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. expense represents the judgment and interest, as well as legal and other costs expensed during the period, related to the defense of the Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and litigation (Nuko Holdings I, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control v. Mobile Mini) and related litigation discussed herein. Pro forma results exclude this previously announced litigation expense. Fourth Quarter 2003 (pro forma) vs. Fourth Quarter 2002 (pro forma forma, adj/n minor elements between the members of a botanical species. ) -- Total revenues increased 11.5% to $41.1 million from $36.9 million; -- Lease revenues increased 7.6% to $35.1 million from $32.6 million; -- Sales revenues rose 42.6% to $5.7 million from $4.0 million; -- Lease revenues comprised 85.2% of total revenues, versus 88.3% in Q4 2002; -- Pro forma 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, amortization, Florida litigation expense and debt restructuring expense) rose 1.9%, to $15.7 million from $15.4 million; -- Pro forma net income was $4.7 million or $0.33 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 $5.8 million or $0.41 per diluted share in Q4 2002. Other Fourth Quarter Highlights -- Internal growth (the increase in leasing revenues at locations open one year or more, excluding growth from acquisitions affecting such locations) came in at over 7%, compared to 6% in Q3 2003 and 4% in Q4 2002; -- The average utilization rate was 83.3% compared to 84.2% in Q4 2002; -- Yield was 2.1% ahead of last year's fourth quarter, and the average number of units on rent was up 5.4%; -- Total containers on lease at the newly acquired branches comprising the Class of 2002 rose 79.3% during 2003. 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, "We are pleased that the internal growth rate was over 7% and that yield had its first year-over-year increase since the second quarter of 2002. The very welcome 2.2% improvement in yield (total lease revenues per unit on rent) and 5.0% growth in average units on rent, as compared to Q4 2002, were primarily responsible for the rising internal growth rate. It is again worth pointing out that the fourth quarter 2003 internal growth rate reverses the down trend in each of the three preceding quarters when the internal growth rate was lower than the one before it. With the higher cost of doing business that we reported last month, pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. per share came in at $0.33." First Quarter Off To A Positive Start Mr. Bunger continued, "Although we are only two months into the year, we are seeing real evidence of business improvement. In both January January: see month. and February February: see month. , units on lease are running nicely ahead of those months last year. By February 15, 2004 the internal growth in units on rent was up 7.1% over February 15, 2003. In part, that is due to our taking on less holiday season business in 2003, which means fewer returns in the new year. The most encouraging indicator is that our core, non-construction, commercial, industrial and institutional business has begun to show marked progress. These core customers, for the most part, rent containers for longer periods and are far less subject to project starts and stops as compared to our holiday retail and construction industry customers. Over the last few weeks, we are seeing early signs of the long-awaited improvement in the construction side of our business. While this does not constitute a trend, we are in an excellent position, with our existing infrastructure, particularly at our newer branches, to enlarge TO ENLARGE. To extend; as, to enlarge a rule to plead, is to extend the time during which a defendant may plead. To enlarge, means also to set at liberty; as, the prisoner was enlarged on giving bail. numbers of containers on lease. As we add container leasing revenues to existing branches, we enjoy 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." He concluded, "While we would like to enter between two and four new markets in 2004, now that we are a national company, we are less compelled to open new locations and more driven towards optimizing our 47 current branches." The Business Model Mobile Mini's business model involves the expenditure of 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 to develop an infrastructure to support growth. These costs are now all in place. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: then increase when the number of containers on lease at existing locations increase. Newer locations invariably in·var·i·a·ble adj. Not changing or subject to change; constant. in·var  i·a·bil produce lower
operating margins until they increase their containers on lease.
Historically, newer branches are the catalyst for growth in lease
revenue and earnings as they mature. 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.
Year Branch After Tax Return on Operating Margin %
Established Invested Capital (after corporate
(NOPLAT) allocation)
Pro forma Pro forma
12 months ended 12 months ended
December 31, December 31,
2002 2003 2002 2003
-------------------- ------------ ------------ ----------- ----------
Pre-1998 16.4% 14.8% 41.0% 38.1%
-------------------- ------------ ------------ ----------- ----------
1998 15.1% 14.9% 38.8% 40.4%
-------------------- ------------ ------------ ----------- ----------
1999 6.9% 6.2% 21.6% 19.3%
-------------------- ------------ ------------ ----------- ----------
2000 7.6% 9.0% 22.8% 27.7%
-------------------- ------------ ------------ ----------- ----------
2001 4.4% 7.2% 11.6% 20.5%
-------------------- ------------ ------------ ----------- ----------
2002 6.1% 2.1% 16.6% 5.5%
-------------------- ------------ ------------ ----------- ----------
All Branches 12.1% 11.2% 33.1% 30.7%
-------------------- ------------ ------------ ----------- ----------
Larry Lar´ry n. 1. Same as Lorry, or Lorrie. Trachtenberg Trachtenberg (or Trachtenburg) (Трахтенберг, טרחטנבּרג or , Executive Vice President & CFO See Chief Financial Officer. noted, "We remain confident in our ability to deliver on our previous guidance of an 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. internal growth rate of 7% for 2004. With no planned improvement in yield, we would expect that growth rate to produce EBITDA for 2004 in the $61 million to $62 million range and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of between $1.20 to $1.25. Based upon results to date and our expectations for the balance of the first quarter, EBITDA and diluted earnings per share are expected to be at least $12.5 million and $.20, respectively." These 2004 results do not include any change in accounting for stock options. He went on to say, "Using the 7% internal growth rate, flat yields and no new market assumptions, we are expecting healthy gains in 2004 EBITDA compared to 2003 pro forma EBITDA. While we are not ready to change our forecast, we are hearing words of cautious optimism from our branch managers, who are working diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d to accelerate branch revenue growth. This, as we have said before, triggers the inherent operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. in our business model, and produces exceptional operating performance." Legal Proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. Completed The Company also announced that the motions it filed in December requesting a rehearing rehearing n. conducting a hearing again based on the motion of one of the parties to a lawsuit, petition or criminal prosecution, usually by the court or agency which originally heard the matter. en banc [Latin, French. In the bench.] Full bench. Refers to a session where the entire membership of the court will participate in the decision rather than the regular quorum. In other countries, it is common for a court to have more members than are by the Florida Second District Court of Appeals The Florida Second District Court of Appeal is headquartered in Lakeland, Florida and has a branch in Tampa. See also
Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from claim by Mobile Mini against A-1 Trailer In communications, a code or set of codes that make up the last part of a transmitted message. See trailer label. Rental, the organization from which it purchased portable storage assets in Florida in 2000. As previously reported, the court determined that A-1 is not responsible for indemnifying Mobile Mini for its liability to Nuko. Within a few weeks, approximately $2 million of the funds that have been held in a third-party escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. , will be released to A-1, with Mobile Mini retaining over $200,000 to cover indemnification claims the court determined are due to Mobile Mini. EBITDA and pro forma financial measures, including those that are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , 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, Thursday Thursday: see week. , February 26, 2004 at 12 noon ET 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 91,000 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 Operations
(Unaudited)
(in 000's except for earnings per share amounts)
Three Months Three Months
Ended Ended
December 31, December 31,
2003 2003 2002 2002
-------- -------- -------- --------
Pro Pro
Revenues: Actual Forma Actual Forma
(2) (2)
Leasing $35,064 $35,064 $32,580 $32,580
Sales 5,745 5,745 4,028 4,028
Other 330 330 287 287
-------- -------- -------- --------
Total revenues 41,139 41,139 36,895 36,895
-------- -------- -------- --------
Costs and expenses:
Cost of sales 4,185 4,185 2,477 2,477
Leasing, selling and general
expenses 21,256 21,256 19,008 19,008
Florida litigation expense
(1) 8,218 - 177 -
Depreciation and
amortization 2,957 2,957 2,543 2,543
-------- -------- -------- --------
Total costs and expenses 36,616 28,398 24,205 24,028
-------- -------- -------- --------
Income from operations 4,523 12,741 12,690 12,867
Other income (expense):
Interest income - - 1 1
Interest expense (4,957) (4,957) (3,324) (3,324)
-------- -------- -------- --------
Income (loss) before provision for
(benefit of) income taxes ( 434) 7,784 9,367 9,544
Provision for (benefit of) income
taxes ( 169) 3,036 3,653 3,722
-------- -------- -------- --------
Net income (loss) $( 265) $4,748 $5,714 $5,822
======== ======== ======== ========
Earnings per share:
Basic $( 0.02) $0.33 $0.40 $0.41
======== ======== ======== ========
Diluted $( 0.02) $0.33 $0.40 $0.41
======== ======== ======== ========
Weighted average number of common and
common
share equivalents outstanding:
Basic 14,346 14,346 14,286 14,286
-------- -------- -------- --------
Diluted 14,346 14,346 14,368 14,368
-------- -------- -------- --------
Number of shares outstanding 14,353 14,353 14,293 14,293
-------- -------- -------- --------
EBITDA $7,479 $15,697 $15,234 $15,411
======== ======== ======== ========
(1) Florida litigation expense consists of legal, judgments and other
costs expensed during the respective periods related to the
defense of the Florida litigation (NUKO Holdings I, LLC v. Mobile
Mini) and related litigation discussed in the Company's SEC
filings.
(2) Excluding effect of Florida litigation expense.
Mobile Mini, Inc.
Condensed Consolidated Statements of Operations
(in 000's except for per share amounts)
Twelve Months Ended Twelve Months Ended
December 31, December 31,
2003 2003 2002 2002
--------- --------- --------- ---------
Revenues: Actual Pro Forma Actual Pro Forma
(2) (2)
Leasing $128,482 $128,482 $116,169 $116,169
Sales 17,248 17,248 16,008 16,008
Other 838 838 920 920
--------- --------- --------- ---------
Total revenues 146,568 146,568 133,097 133,097
--------- --------- --------- ---------
Costs and expenses:
Cost of sales 11,487 11,487 10,343 10,343
Leasing, selling and
general expenses 79,071 79,071 69,203 69,203
Florida litigation expense
(1) 8,502 - 1,320 -
Depreciation and
amortization 11,079 11,078 9,457 9,457
--------- --------- --------- ---------
Total costs and expenses 110,139 101,636 90,323 89,003
--------- --------- --------- ---------
Income from operations 36,429 44,932 42,774 44,094
Other income (expense):
Interest income 2 2 13 13
Interest expense (16,299) (16,299) (11,587) (11,587)
Debt restructuring expense (10,440) - (1,300) -
--------- --------- --------- ---------
Income before provision for
income taxes 9,692 28,635 29,900 32,520
Provision for income taxes 3,780 11,168 11,661 12,683
--------- --------- --------- ---------
Net income $5,912 $17,467 $18,239 $19,837
========= ========= ========= =========
Earnings per share:
Basic $0.41 $1.22 $1.28 $1.39
========= ========= ========= =========
Diluted $0.41 $1.21 $1.26 $1.38
========= ========= ========= =========
Weighted average number of common and
common
share equivalents
outstanding:
Basic 14,312 14,312 14,254 14,254
--------- --------- --------- ---------
Diluted 14,462 14,462 14,442 14,442
--------- --------- --------- ---------
Number of shares
outstanding 14,353 14,353 14,293 14,293
--------- --------- --------- ---------
EBITDA $47,510 $56,012 $52,244 $53,564
========= ========= ========= =========
(1) Florida litigation expense consists of legal, judgments, and other
costs expensed during the respective period related to the defense
of the Florida litigation (NUKO Holdings I, LLC v. Mobile Mini)
and related litigation discussed in the Company's SEC filings.
(2) Excluding effect of Florida litigation and debt restructuring
expense.
Mobile Mini, Inc.
Condensed Consolidated Balance Sheets
(in 000's except share amounts)
December December
31, 2003 31, 2002
--------- ---------
ASSETS
Cash $97 $1,635
Receivables, net 15,907 16,234
Inventories 15,059 13,278
Lease fleet, net 382,754 337,084
Property, plant and equipment, net 34,507 34,103
Deposits and prepaid expenses 7,166 3,776
Other assets and intangibles, net 7,083 3,022
Goodwill 52,507 51,758
--------- ---------
Total assets $515,080 $460,890
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $7,179 $8,766
Accrued liabilities 30,641 18,914
Line of credit 89,000 211,098
Notes payable 1,610 2,044
Obligations under capital leases - 80
Senior notes 150,000 --
Deferred income taxes 47,357 41,319
--------- ---------
Total liabilities 325,787 282,221
--------- ---------
Commitments and contingencies
Stockholders' equity:
Common stock; $0.01 par value, 95,000,000 shares
authorized, 14,292,714 and 14,352,703 issued and
outstanding at December 31, 2002 and December 31,
2003, respectively 144 143
Additional paid-in capital 116,956 116,117
Retained earnings 72,295 66,383
Accumulated other comprehensive loss (102) (3,974)
--------- ---------
Total stockholders' equity 189,293 178,669
--------- ---------
Total liabilities and stockholders' equity $515,080 $460,890
========= =========
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion