Mobile Mini, Inc. Reports Record 2004 Fourth Quarter and Year; Diluted EPS of $0.47 in Q4 and $1.40 in '04 Far Exceed Expectations.TEMPE, Ariz. -- Mobile Mini, Inc.: --Raises Guidance for 2005 to $1.70 to $1.75 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 (exclusive of stock option expense); --To Open 49th Branch in Minneapolis Minneapolis (mĭn'ēăp`əlĭs), city (1990 pop. 368,383), seat of Hennepin co., E Minn., at the head of navigation on the Mississippi River, at St. Anthony Falls; inc. 1856. 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 that its financial results for the fourth quarter and the fiscal year ended December December: see month. 31, 2004 were well in excess of management's and analysts' estimates due primarily to continued acceleration in the internal growth rate of the Company's core leasing business. The internal growth rate reached 22% during the fourth quarter. Fourth Quarter 2004 vs. 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 Fourth Quarter 2003(1) --Total revenues increased 14.7% to $47.2 million from $41.1 million; --Lease revenues increased 22.8% to $43.1 million from $35.1 million; --Lease revenues comprised 91.2% of total revenues compared to 85.2% in the fourth quarter of 2003; --EBITDA (earnings before interest expense, tax, depreciation, amortization) of $20.4 million was 29.9% greater than 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 of $15.7 million in the fourth quarter of 2003; --Net income rose 49.2% to $7.1 million or $0.47 per diluted share as compared with pro forma net income for the comparable period in 2003 of $4.7 million or $0.33 per diluted share; and, --Operating margins increased to 36.3%, from 31.0% in the fourth quarter of 2003 and from 34.2% in the third quarter of 2004. (1) See the accompanying Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Consolidated Statements of Operations for the three and twelve-month periods ended December 31, 2004 for the explanation of the 2003 pro forma numbers and the accompanying reconciliation of the pro forma numbers to actual results. Other Fourth Quarter Highlights --Internal growth (the increase in leasing revenues at locations open one year or more, excluding any growth from acquisitions at those locations) came in at over 22%, compared to 17.7% in the third quarter of 2004 and 7.3% in the fourth quarter of 2003; --The average utilization rate was 85.6% compared to 83.3% in the fourth quarter of 2003; --Yield (total lease revenues per unit on rent) was 6.6% ahead of last year's fourth quarter, and the average number of units on rent was up 15.2% versus the final quarter of 2003; --Mobile Mini's funded debt Funded Debt Long-term debt that matures after more than one year. Notes: This is usually issued as a bond or a long-term note. See also: Bond, Debt, Maturity, Note Funded debt Debt maturing after more than one year. to EBITDA declined significantly to 4.1 to 1 at December 31, 2004. As management had forecasted, this was well below the pro forma 4.4:1 level at September September: see month. 30, 2004. To keep pace with accelerated customer demand, purchases of lease fleet units amounted to $22.4 million in the fourth quarter of 2004; in the final quarter of 2003, lease fleet purchases totaled $13.2 million; --Availability under Mobile Mini's line of credit was at an all time high of $110 million at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . 2004 Performance Highlights --Revenues reached $168.3 million; EBITDA totaled $67.3 million 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 were $1.40; --Internal growth for 2004 was 16.0% compared to 7.4% in 2003; --The average utilization rate was 80.7% compared to 78.7% in 2003; --Yield rose 4.1% compared to 2003 while the average number of units on rent for 2004 was up 12.1% over the prior year; --The lease fleet grew 12.4%, to over 100,000 units from 89,500 one year earlier; --Capital expenditures for lease fleet were $76.6 million for the year. 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, "With an internal growth rate of 22%, the final quarter was far better than we had projected back in November November: see month. . We saw strong demand for portable storage containers and for wood and steel offices across all of our regions during the fourth quarter. While yield has shown steady improvement throughout the year, that was especially so in the fourth quarter, rising 6.6% over the fourth quarter of 2003. The increase in containers on lease, which averaged 15.2% over the comparable period in 2003, together with rising rental rates, drove the much larger gains in operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , EBITDA and diluted earnings per share. This is the essence of our business model in action." He went on to say, "Average lease fleet utilization increased to 85.6% in the fourth quarter of 2004 compared to 83.3% in the fourth quarter of 2003. As was the case in the third quarter, this gain factors in greater demand as well as the impact of our fleet optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. program. By readying standby standby Medtalk adjective Referring to the immediate availability of a certain specialist–anesthesiologist, surgeon, who can be deployed in a medical emergency. Cf Concurrent. storage assets for deployment, we achieved the benefits of higher utilization and return on invested capital. It should be pointed out that it is our branch practice to promote leasing solutions rather than sales to our customers, so we are not concerned that sales revenue declined as a percent of total revenue in the fourth quarter." He concluded, "On all fronts, 2004 was the best year in our history, but we expect 2005 to be considerably better." First Quarter Off To A Strong Start 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. , pointed out, "With just under two months into 2005, it appears that the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. trends of 2004 are continuing. Through mid-February n. 1. the middle part of February. Noun 1. mid-February - the middle part of February period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue , the number of units on rent is running 19.5% ahead of this timeframe last year, an acceleration from our year-over-year growth rate in the fourth quarter. This high growth rate is currently producing a 4% increase in our utilization rate compared to this time last year. We attribute (1) In relational database management, a field within a record. (2) In object technology, a single element of data. See instance attribute and static attribute. this to exceptionally strong demand from our core customer base, namely long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. renters who incorporate our units into their business 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. operations. In prior years, our fourth quarter surge was primarily attributable to short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. rentals placed with retailers during the holiday season who generally returned holiday units during the first quarter. Having strategically limited our holiday season retail business in 2004, we are seeing the smaller number of first quarter returns being deployed quickly by other customers. 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. the first quarter to produce EBITDA of $16 million to $17 million and diluted earnings per share of $0.32 to $0.35, as compared to 2004's first quarter EBITDA of $13.2 million and diluted earnings per share of $0.22." New Branches for 2005 In each of the past two years, Mobile Mini entered one new market; in 2003 it was Portland Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. , OR and 2004 it was Detroit Detroit, city, United States Detroit (dĭtroit`), city (1990 pop. 1,027,974), seat of Wayne co., SE Mich., on the Detroit River and between lakes St. Clair and Erie; inc. as a city 1815. , MI. During that timeframe, new locations were less a priority than building containers on lease at existing branches. Having achieved the latter goal, management plans to open new branches at a slightly faster rate, either through the purchase of storage assets on lease or, when not available at the right price, through the establishment of greenfield Greenfield, town (1990 pop. 18,666), seat of Franklin co., NW Mass., at the confluence of the Deerfield and Green rivers, near their junction with the Connecticut; settled 1686, set off from Deerfield and inc. 1753. branches. Plans call for up to four new locations in 2005, the first of which will serve Minneapolis-St. Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. , following the Company's low-cost start-up Start-up The earliest stage of a new business venture. formula. Site location and staffing are now in the works with an opening scheduled before the end of the first quarter. Mr. Bunger noted, "We have identified approximately 50 additional domestic markets in which our business model can flourish, some of which are among the largest cities in the country. We hope to enter four of these markets this year and will have several years of geographic expansion opportunities going forward." 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 48 locations in order to develop an infrastructure to support growth. Operating margins then increase when the number of containers on lease at existing locations increase. Newer locations typically produce lower operating margins until they increase their containers on lease but historically, they are the catalyst catalyst, substance that can cause a change in the rate of a chemical reaction without itself being consumed in the reaction; the changing of the reaction rate by use of a catalyst is called catalysis. 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 Established After Tax Return on Operating Margin %
Invested Capital (after corporate
(NOPLAT) allocation)
12 months ended 12 months ended
December 31, December 31,
2004 2003 Pro 2004 2003 Pro
forma forma
----------------------------------------------------------------------
Pre-1998 16.0% 14.9% 39.4% 38.1%
----------------------------------------------------------------------
1998 14.3% 14.9% 40.4% 40.4%
----------------------------------------------------------------------
1999 7.0% 6.3% 21.3% 19.3%
----------------------------------------------------------------------
2000 10.4% 9.1% 31.1% 27.7%
----------------------------------------------------------------------
2001 8.6% 7.3% 25.6% 20.5%
----------------------------------------------------------------------
2002 5.9% 2.1% 17.1% 5.5%
----------------------------------------------------------------------
2003 (1.0)% N/A (1.6)% (57.6)%
----------------------------------------------------------------------
2004 (6.7)% N/A (13.3)% N/A
----------------------------------------------------------------------
All Branches 12.0% 11.3% 32.6% 30.7%
----------------------------------------------------------------------
Mr. Trachtenberg concluded, "The general economic indicators Economic indicators The key statistics of the economy that reveal the direction the economy is heading in; for example, the unemployment rate and the inflation rate. and input from our branch and regional managers indicate that the positive trends in internal growth, utilization and containers on lease that we experienced in the second half of 2004 are continuing. Moreover, due to the continued strengthening of our business in the last couple of months, we now believe that we will achieve more favorable results in 2005 than originally anticipated. Based on current trends, we believe that we can achieve a 14% - 15% internal growth rate in our leasing business. We are therefore raising our 2005 guidance to EBITDA of $80 million to $81 million and diluted per share earnings in the $1.70 to $1.75 range. Our previous guidance had been EBITDA of approximately $77 million and earnings of between $1.58 and $1.62 per diluted share. These 2005 expectations exclude the impact of expensing stock options beginning in the third quarter of 2005, as we are still in the process of evaluating what that impact will be. We are currently estimating our capital expenditure level, which is primarily for lease fleet purchases, in the range of $70 million to $90 million for 2005, but that is subject to change based upon a number of factors, most notably the number of new locations we enter." 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 February: see month. 24, 2005 at 12:00 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 103,000 portable storage units and portable offices. The Company currently has 48 branches and operates in 28 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" . Mobile Mini is included on the Russell Russell, English noble family. It first appeared prominently in the reign of Henry VIII when John Russell, 1st earl of Bedford, 1486?–1555, rose to military and diplomatic importance. 2000(R) and 3000(R) Indexes and the S&P Small Cap 600 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 2005 and beyond, 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 Ended Three Months Ended
December 31, December 31,
2004 2003 2003
------------------ ------------------
Revenues: Actual Actual Pro Forma
Leasing $43,050 $35,064 $35,064
Sales 3,996 5,745 5,745
Other 135 330 330
------------------ ------------------
Total revenues 47,181 41,139 41,139
------------------ ------------------
Costs and expenses:
Cost of sales 2,507 4,185 4,185
Leasing, selling and general
expenses 24,286 21,257 21,257
Florida litigation expense (1) - 8,218 -
Depreciation and amortization 3,259 2,957 2,957
------------------ ------------------
Total costs and expenses 30,052 36,617 28,399
------------------ ------------------
Income from operations 17,129 4,522 12,740
Other income (expense):
Interest expense (5,320) (4,957) (4,957)
------------------ ------------------
Income before provision for
(benefit of) income taxes 11,809 ( 435) 7,783
Provision for (benefit of)
income taxes 4,724 ( 170) 3,035
------------------ ------------------
Net income (loss) $ 7,085 $ ( 265) $ 4,748
================== ==================
Earnings (loss) per share:
Basic $ 0.48 $( 0.02) $ 0.33
================== ==================
Diluted $ 0.47 $( 0.02) $ 0.33
================== ==================
Weighted average number of
common and common share
equivalents outstanding:
Basic 14,628 14,346 14,346
------------------ ------------------
Diluted 15,000 14,346 14,568
------------------ ------------------
Number of shares
outstanding 14,683 14,353 14,353
------------------ ------------------
EBITDA $20,388 $ 7,479 $15,697
================== ==================
(1) 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 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 legal and other costs expensed during the period related to the defense of the Florida 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 in the Company's prior SEC filings. Pro forma results exclude this 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,
2004 2003 2003
------------------- --------------------
Revenues: Actual Actual Pro Forma
Leasing $149,856 $128,482 $128,482
Sales 17,919 17,248 17,248
Other 566 838 838
------------------- --------------------
Total revenues 168,341 146,568 146,568
------------------- --------------------
Costs and expenses:
Cost of sales 11,352 11,487 11,487
Leasing, selling and
general expenses 89,711 79,071 79,071
Florida litigation
expense (1) - 8,502 -
Depreciation and
amortization 12,412 11,079 11,079
------------------- --------------------
Total costs and expenses 113,475 110,139 101,637
------------------- --------------------
Income from operations 54,866 36,429 44,931
Other income (expense):
Interest income - 2 2
Interest expense (20,434) (16,299) (16,299)
Debt restructuring
expense (2) - (10,440) -
------------------- --------------------
Income before provision for
income taxes 34,432 9,692 28,634
Provision for income taxes 13,773 3,780 11,167
------------------- --------------------
Net income $ 20,659 $ 5,912 $ 17,467
=================== ====================
Earnings per share:
Basic $ 1.43 $ 0.41 $ 1.22
=================== ====================
Diluted $ 1.40 $ 0.41 $ 1.21
=================== ====================
Weighted average number of
common and common share
equivalents outstanding:
Basic 14,487 14,312 14,312
------------------- --------------------
Diluted 14,783 14,462 14,462
------------------- --------------------
Number of shares
outstanding 14,683 14,353 14,353
------------------- --------------------
EBITDA $ 67,278 $ 47,510 $ 56,012
=================== ====================
(1) Florida litigation expense represents 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 discussed in the Company's prior SEC filings. Pro forma results exclude this litigation expense. (2) 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 a 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 certain 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 results exclude debt restructuring expense of $10.4 million ($6.4 million, after tax).
Mobile Mini, Inc.
Reconciliation of 2003 Pro Forma Results To Actual Results
Three Months ended December 31, 2003
(in thousands, except for earnings per share)
(includes effect of rounding)
Debt
Restructuring Litigation
Pro forma Expense Expense(2) Actual
--------- ------------- ------------ ---------
Revenue $ 41,139 $ - $ - $ 41,139
EBITDA 15,697 - (8,218) 7,479
Net income (loss) 4,748 - (5,013) (265)
Diluted earnings
per share $ 0.33 $ - $(0.35) $ (0.02)
Twelve Months ended December 31, 2003
(in thousands, except for earnings per share)
(includes effect of rounding)
Debt
Restructuring Litigation
Pro forma Expense(1) Expense (2) Actual
--------- ------------- ------------ ---------
Revenue $146,568 $ - $ - $146,568
EBITDA 56,012 - (8,502) 47,510
Net income (loss) 17,467 (6,369) (5,186) 5,912
Diluted earnings
(loss) per share $ 1.21 $(0.44) $(0.36) $ 0.41
(1) The debt restructuring expense includes the write-off of expenses associated with the prior credit agreement and termination of certain interest rate swap 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 of Mobile Mini's $250 million revolving credit facility. Pro forma results exclude debt restructuring expense of $10.4 million ($6.4 million, after tax). (2) Litigation expense represents 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 discussed in the Company's prior SEC filings. Pro forma results exclude litigation expense.
Mobile Mini, Inc.
Condensed Consolidated Balance Sheets
(in 000's except share amounts)
December 31, December 31,
2004 2003
------------- --------------
ASSETS (unaudited) (audited)
Cash $ 759 $ 97
Receivables, net 19,217 15,907
Inventories 17,323 15,059
Lease fleet, net 451,836 382,754
Property, plant and equipment, net 34,320 34,507
Deposits and prepaid expenses 9,073 7,166
Other assets and intangibles, net 6,489 7,083
Goodwill 53,129 52,507
------------- --------------
Total assets $592,146 $515,080
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $ 8,900 $ 7,179
Accrued liabilities 30,038 30,641
Line of credit 125,900 89,000
Notes payable 1,144 1,610
Senior notes 150,000 150,000
Deferred income taxes 59,795 47,357
------------- --------------
Total liabilities 375,777 325,787
------------- --------------
Commitments and contingencies
Stockholders' equity:
Common stock; $0.01 par value,
95,000,000 shares authorized,
14,682,991 and 14,352,703 issued and
outstanding at December 31, 2004 and
December 31, 2003, respectively 147 144
Additional paid-in capital 122,934 116,956
Retained earnings 92,954 72,295
Accumulated other comprehensive loss 334 (102)
------------- --------------
Total stockholders' equity 216,369 189,293
------------- --------------
Total liabilities and
stockholders' equity $592,146 $515,080
============= ==============
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion