WillScot Mobile Mini Holdings Reports Fourth Quarter and Full Year
2021 Results
WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini
Holdings” or the “Company”) (Nasdaq: WSC), the North American
leader in innovative flexible work space and portable storage
solutions, today announced fourth quarter and full year 2021
results and provided an update on operations and the current market
environment, including the following highlights:
- Continued execution and commercial
momentum in all operating segments resulted in fourth quarter
revenue of $518 million, net income of $74 million, and Adjusted
EBITDA of $211 million; full year 2021 revenue of $1,895 million,
net income of $160 million, and Adjusted EBITDA of $740
million.
- Invested $147 million in and
fully integrated seven acquisitions in second half of 2021.
- Generated $303 million Free
Cash Flow and Free Cash Flow Margin of 16.0% in 2021, while
reinvesting for growth.
- Returned $364 million to
shareholders by repurchasing 12.9 million shares and stock
equivalents in 2021, or 4% of economic share count as of December
31st, 20201 .
- Reaffirmed full-year 2022 outlook
of $810 million to $850 million Adjusted EBITDA, reflecting robust
demand across all end markets, representing 10% to 15% growth
versus 2021.
Brad Soultz, Chief Executive Officer of WillScot
Mobile Mini Holdings, commented, "Our team’s results and
achievements in 2021 underscore our unique position; we operate in
a category of one; we are extending our market leadership position
by executing idiosyncratic growth initiatives that are within our
control; and we are compounding that growth with smart M&A.
Given the trajectory upon which we exited 2021 and supportive end
markets, I am confident that 2022 will be no less exciting for our
business. We had a fantastic year, I want to thank the entire team
for their hard work and dedication, and I'm excited for the
opportunities ahead of us."
Soultz continued, "While we are relentless in our
focus on the future, I would be remiss in not pointing out a few
significant milestones the team achieved in 2021. Our organic
operational and financial momentum built steadily through the
course of the year, driving over $300 million of free cash flow.
Predictable free cash flow coupled with our accelerating run-rate
gave us full optionality to reinvest organically, cultivate our
acquisition pipeline, and repurchase our stock, all of which are
driving sustainable growth, returns, and shareholder value
creation. We successfully migrated the legacy WillScot business
onto Mobile Mini's SAP platform - a herculean task that resulted in
minimal disruption and evidences the consistent execution
capabilities of our team. We further expanded our best-in-class
team, adding expertise in operations, marketing, data analytics,
and M&A. We closed seven tuck-in acquisitions in the second
half of 2021, adding 15,700 storage units, 5,800 modular units, and
over 100 new team members to our market-leading organization. We
repurchased 4% of our economic share count relative to the end of
2020, and view repurchases as a powerful long-term value creation
lever for our shareholders. We introduced our ESG program and key
focus areas. And we held our inaugural Investor Day to share our
growth strategy for the next five years."
“Going forward, we will remain laser focused on
continuing the commercial momentum in our business. We are rolling
out our VAPS offering for Storage and continue to expand our VAPS
offering for Modular. We are driving rate optimization and have
tangible opportunities to extend our customer value proposition
through market penetration and M&A. We will continue to execute
the integration and realization of cost synergies associated with
our prior acquisitions. Operationally, we are investing in our
human capital at all levels in the organization to support our
growth aspirations with a specific focus on career development and
our diversity and inclusion initiatives. And we are continuing to
invest in technology by harmonizing our customer relationship
management systems, which will support all of our commercial
initiatives. As characterized at our Investor Day, it is not a
matter of if we achieve the $1B Adjusted EBITDA milestone, rather
when and by how far we eclipse it."
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in thousands) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Revenue |
$ |
517,920 |
|
|
$ |
437,647 |
|
|
$ |
1,894,897 |
|
|
$ |
1,367,645 |
|
Consolidated net income |
$ |
74,223 |
|
|
$ |
3,866 |
|
|
$ |
160,144 |
|
|
$ |
75,340 |
|
Adjusted EBITDA2 |
$ |
211,164 |
|
|
$ |
179,684 |
|
|
$ |
740,393 |
|
|
$ |
530,307 |
|
Adjusted EBITDA Margin (%)2 |
|
40.8 |
% |
|
|
41.1 |
% |
|
|
39.1 |
% |
|
|
38.8 |
% |
Net cash provided by operating activities |
$ |
147,847 |
|
|
$ |
129,717 |
|
|
$ |
539,902 |
|
|
$ |
304,812 |
|
Free Cash Flow2 |
$ |
51,318 |
|
|
$ |
87,430 |
|
|
$ |
303,027 |
|
|
$ |
162,279 |
|
Fully Diluted Shares Outstanding |
|
229,965,703 |
|
|
|
233,625,946 |
|
|
|
232,793,902 |
|
|
|
177,268,383 |
|
Free Cash Flow Margin (%)2 |
|
9.9 |
% |
|
|
20.0 |
% |
|
|
16.0 |
% |
|
|
11.9 |
% |
Return on Invested Capital2 |
|
13.7 |
% |
|
|
11.9 |
% |
|
|
11.7 |
% |
|
|
9.6 |
% |
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
Pro Forma Adjusted EBITDA2 by Segment
(in thousands) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
NA Modular |
$ |
115,263 |
|
|
$ |
107,460 |
|
|
$ |
423,004 |
|
|
$ |
394,805 |
|
NA Storage |
|
71,629 |
|
|
|
53,372 |
|
|
|
226,600 |
|
|
|
184,601 |
|
UK Storage |
|
12,392 |
|
|
|
9,516 |
|
|
|
49,039 |
|
|
|
31,080 |
|
Tank and Pump |
|
11,880 |
|
|
|
9,336 |
|
|
|
41,750 |
|
|
|
35,979 |
|
Consolidated Adjusted EBITDA |
$ |
211,164 |
|
|
$ |
179,684 |
|
|
$ |
740,393 |
|
|
$ |
646,465 |
|
Refer to the Supplemental Pro Forma Information
section on Form 10-K to be filed with the SEC and made available on
the WillScot Mobile Mini Holdings Corp. investor relations website
for full reconciliations of reported and pro forma results.
Fourth Quarter 2021
Results2
Tim Boswell, President and Chief Financial
Officer of WillScot Mobile Mini Holdings, commented "Total Revenue
was up 18% and Adjusted EBITDA was up 18% in the fourth quarter
relative to prior year, with particular strength in pricing and
value-added products in NA Modular and pricing and unit on rent
volumes in NA Storage. We exceeded the top-end of our prior
Revenue and Adjusted EBITDA guidance for 2021, outperforming in all
segments, we are consistently generating attractive returns with
ROICs north of 12%, and we are committing additional human and
financial capital to build upon this momentum. In the fourth
quarter, we invested about $90 million of capital into highly
utilized fleet categories, value-added products, and modular
refurbishments to capitalize upon the current market environment
and minimize any supply constraints, heading into 2022. And we
invested $147 million in seven tuck-in acquisitions from
September to December, which contributed approximately $8 million
of revenue in the fourth quarter and highlights the extreme
scalability of our technology and operating platform. While these
transactions were dilutive to margins in Q4, they bring numerous
financial and strategic benefits longer-term, consistent with those
that we have realized in all of our past acquisitions. And they
compound powerfully with our core organic growth initiatives, all
of which progressed favorably in the quarter."
Boswell continued, "Looking into 2022, we remain
confident in the guidance ranges that we introduced in November and
are currently tracking toward the higher end of our revenue range
and the midpoint of our Adjusted EBITDA range. Implicitly, margins
are expanding to the lower end of our guidance range, as recent
acquisitions ramp to full earning potential, we invest broadly in
our human capital, and we make specific investments in inventory
and customer relationship management processes and technology, all
of which support our top-line growth aspirations. Our capital
allocation strategy remains unchanged. We will continue to balance
the timing to reach our 3.0x to 3.5x leverage range with the
availability of compelling M&A opportunities, long-term
investments in our own stock, and visibility into future free cash
flow, as we progress towards our $500 million Free Cash Flow
run-rate milestone in the second half of 2022 heading into 2023. It
was great to see many of you in-person in November. The team is
dialed-in executing the plans that we discussed to drive
sustainable growth and returns."
NA Modular
- Revenue of $309.5 million increased by 14.4% year-over-year.
- Average modular space monthly rental rate increased $142
year-over-year, or 19.6% to $866.
- Modular space unit deliveries decreased 2% year-over-year, and
were up 1% vs. 2019 levels.
- Average modular space units on rent decreased 1,683 units
year-over-year, or 2.0% to 84,328. For the full year 2021, unit
returns were down 11% vs. 2019, consistent with our expectations
for UOR inflection in the first half of 2022.
- Value-Added Products and Services (VAPS) average monthly rate
increased $53 year-over-year, or 28% to $241. For delivered units
over the last twelve months, VAPS average monthly rate increased
$82 year-over-year, or 26%, to $393.
- Adjusted EBITDA of $115.3 million increased by 7.3%
year-over-year. The transfer of the NA Modular portable storage
fleet to the NA Storage segment in Q3 2021 represented a decline of
about $5 million of revenue and EBITDA in Q4 2021, which has not
been adjusted historically.
NA Storage
- Revenue of $151.4 million increased by 29.1% year-over-year.
- Average portable storage monthly rental rate increased $13
year-over-year, or 8.7% to $163.
- Portable storage unit deliveries across the NA Storage and NA
Modular segments combined increased 6% year-over-year, including
contributions from our recent acquisitions.
- Average portable storage units on rent increased by 37,616
units year-over-year, or 31.2% to 158,055. This increase reflects
broad-based end market strength, the transfer of approximately
12,000 units from NA Modular (legacy WillScot) into the NA Storage
segment that was completed in Q3 2021, and approximately 12,900
average units on rent as a result of the acquisition of 15,700
storage units during Q3 and Q4 2021.
- Adjusted EBITDA of $71.6 million increased by 34.1%
year-over-year. The transfer of the NA Modular portable storage
fleet to the NA Storage segment in Q3 2021 represented an increase
of about $5 million of revenue and EBITDA in Q4 2021, which has not
been adjusted historically.
UK Storage
- Revenue of $27.5
million increased 11.3% year-over-year, driven by continued strong
price and volume trends, and Adjusted EBITDA of $12.4 million
increased by 30.5%.
Tank and Pump
- Revenue of $29.5
million increased 18.2% year-over-year, driven by tightening OEC
utilization, and Adjusted EBITDA of $11.9 million increased by
27.2%.
Full Year 2021 Results2
Key drivers of our 2021 financial performance
included:
- Total revenues
increased by $527.3 million, or 38.6%, attributable to the addition
of Mobile Mini's revenues to our consolidated results once the
Merger closed on July 1, 2020 and due to organic revenue growth
levers in the business. Leasing revenue increased $410.7 million,
or 41.0%, delivery and installation revenue increased $100.5
million, or 36.7%, rental unit sales increased $16.3 million, or
41.9%, and new unit sales revenue decreased $0.2 million, or 0.4%.
- On a Pro Forma
basis, total revenues increased by $243.0 million, or 14.7%, from
$1,651.9 million to $1,894.9 million.
- Generated
consolidated net income of $160.1 million for the year ended
December 31, 2021, representing an increase of $84.8 million versus
the year ended December 31, 2020. Net Income Excluding Gain/Loss
from Warrants of $186.7 million for the year ended December 31,
2021, represented an increase of $114.8 million, or 159.7%, versus
the year ended December 31, 2020, and included a $6.0 million loss
on extinguishment of debt related to our financing activities in
the first and second quarter of 2021 and $44.6 million of discrete
costs expensed in the period related to transaction and integration
activities. Discrete costs in the period included $1.4 million of
transaction costs, $28.4 million of integration costs, and $14.8
million of restructuring costs, lease impairment expense and other
related charges.
- On a Pro Forma
basis, net income increased by $36.3 million, or 29.3%, from $123.8
million to $160.1 million.
- Generated
Adjusted EBITDA of $740.4 million for the year ended December 31,
2021, representing an increase of $210.1 million, or 39.6%, as
compared to 2020. Of this increase, $181.9 million was driven by
including a full year of Mobile Mini in our consolidated results,
including strong year over year organic growth within the NA
Storage, UK, and Tank and Pump segments, and the remainder was
driven by strong organic growth across all of our segments. The
increase was partially offset by increases in SG&A related to
variable compensation and occupancy costs.
- On a Pro Forma
basis, Adjusted EBITDA increased by $93.9 million, or 14.5%, from
$646.5 million to $740.4 million.
- Generated Free Cash Flow of $303.0
million for the year ended December 31, 2021, representing an
increase of $140.7 million as compared to 2020. Net cash provided
by operating activities increased $235.1 million to $539.9 million.
Net cash used in investing activities, excluding cash acquired or
used as part of acquisitions, increased $94.3 million as a result
of increased capital spending to support growing demand for new
project deliveries across all segments. We reinvested this Free
Cash Flow, along with additional net borrowings under the ABL, to
acquire storage and modular units of several smaller entities for a
total of $147.2 million and to repurchase $363.6 million of our
common stock and warrants, while de-levering the business from 3.8x
to 3.6x Net Debt to Adjusted EBITDA. Our predictable lease
revenues, idiosyncratic levers to drive growth and margin
expansion, and reduced interest costs due to our financing
activities during the year contributed to our strong financial
position.
Overall, while new lease activation volumes over
the past eight quarters were impacted in line with the swings in
economic activity, our lease revenue streams were stable and
predictable and remain on an attractive upward long-term
trajectory, which is a result of the diversification in our end
markets, our long lease durations, and the success of the organic
growth initiatives that we are executing.
Capitalization and Liquidity
Update2
As of December 31, 2021:
- Repurchased 1.2
million shares of Common Stock and stock equivalents for $43.3
million in the fourth quarter and 12.9 million shares of Common
Stock and stock equivalents for $363.6 million for the full
year 2021, representing a 4% reduction in our economic share count.
As of December 31, 2021, $956.7 million of the $1.0 billion
share repurchase authorization remained.
- Over
$0.7 billion of excess availability under the asset-based
revolving credit facility, a flexible covenant structure, and
accelerating free cash flow provide ample liquidity to fund
multiple capital allocation alternatives.
- Weighted average
interest rate is approximately 3.7% and annual cash interest
expense based on the current debt structure is approximately $102
million.
- No debt
maturities prior to 2025.
- Reduced leverage
to 3.6x last-twelve-months Adjusted EBITDA of $740.4 million and
maintaining our target range of 3.0x to 3.5x.
2022 Outlook2, 3,
4
This guidance is subject to risks and
uncertainties, including those described in "Forward-Looking
Statements" below.
|
2020 Pro Forma Results |
|
2021 Results |
|
2022 Outlook |
Revenue |
$1,652 million |
|
$1,895 million |
|
$1,925 million - $2,025 million |
Adjusted EBITDA1,2 |
$646 million |
|
$740 million |
|
$810 million - $850 million |
Net CAPEX2,3 |
$161 million |
|
$237 million |
|
$225 million - $275 million |
|
|
|
|
|
|
1 - Assumes common shares outstanding plus
treasury stock method from warrants outstanding as of 12/31/2020
versus 12/31/2021 and the closing stock price of $40.84 on
12/31/2021.2 - Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash
Flow, Free Cash Flow Margin, Net Income Excluding Gain/Loss from
Warrants, 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")
is included at the end of this press release.3 - Information
reconciling forward-looking Adjusted EBITDA and Net CAPEX to GAAP
financial measures is unavailable to the Company without
unreasonable effort and therefore no reconciliation to the most
comparable GAAP measures is 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.Non-GAAP
Financial Measures
This press release includes non-GAAP financial
measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Free
Cash Flow, Free Cash Flow Margin, Return on Invested Capital, Pro
Forma Revenue, Pro Forma Adjusted EBITDA, Pro Forma Net Income,
Adjusted Gross Profit, Adjusted Gross Profit Percentage, Net Income
Excluding Gain/Loss from Warrants, and Net CAPEX. 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 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 25%. 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. Pro Forma Revenue is defined the same as revenue,
but includes pre-acquisition results from Mobile Mini for all
periods presented. Adjusted Gross Profit is defined as gross profit
plus depreciation of rental equipment. Adjusted Gross Profit
Percentage is defined as Adjusted Gross Profit divided by revenue.
Net Income Excluding Gain/Loss from Warrants is defined as net
income plus or minus the change in the fair value of the common
stock warrant liability. 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. 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 Pro Forma
Revenue is useful to investors because they allow investors to
compare performance of the combined Company over various reporting
periods on a consistent basis due to the addition of significant
acquisitions during the reported periods. This information is also
used by management to measure the performance of our ongoing
operations and analyze our business performance and trends. This
information is used by investors for the purposes of development of
future projections and earnings growth prospects. The Company
believes that Adjusted Gross Profit and Adjusted Gross Profit
Percentage are useful to investors because they allow investors to
assess gross profit excluding non-cash expenses, which provides
useful information regarding our results of operations and assists
in analyzing the underlying performance of our business. The
Company believes that Net Income Excluding Gain/Loss from Warrants
is useful to investors because it removes the impact of stock
market volatility from our operational results. 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
reconciliation 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 reconciling forward-looking Adjusted
EBITDA to GAAP financial measures is unavailable to the Company
without unreasonable effort. We cannot provide reconciliations of
forward-looking Adjusted EBITDA 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 a range of
Adjusted EBITDA that we believe will be achieved, we cannot
accurately predict all the components of the Adjusted EBITDA
calculation. The Company provides Adjusted EBITDA guidance because
we believe that Adjusted EBITDA, when viewed with our results under
GAAP, provides useful information for the reasons noted above.
On July 1, 2020, Williams Scotsman, Inc. closed
the merger with Mobile Mini, Inc. (the "Merger") and assumed the
name WillScot Mobile Mini Holdings Corp. (Nasdaq: WSC). Our
reported results only include Mobile Mini for the periods
subsequent to the Merger. Our Pro Forma Results include Mobile
Mini's results as if the Merger and financing transactions had
occurred on January 1, 2019, which we believe is a better
representation of how the combined company has performed over time.
Following the Merger, we expanded our reporting segments from two
segments to four reporting segments. The North America Modular
segment aligns with the WillScot legacy business prior to the
Merger and the North America Storage, UK Storage and Tank and Pump
segments align with the Mobile Mini segments prior to the
Merger.
Conference Call
InformationWillScot Mobile Mini Holdings will host a
conference call and webcast to discuss its fourth quarter and full
year 2021 results and outlook at 10 a.m. Eastern Time on Friday,
February 25, 2022. The live call may be accessed by dialing
(855) 312-9420 (US/Canada toll-free) or (210) 874-7774
(international) and asking to be connected to the WillScot Mobile
Mini Holdings call. 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 2021 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 60
days on the Company’s investor relations website.
About WillScot Mobile Mini
Holdings
WillScot Mobile Mini Holdings 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 flexible workspace and portable
storage solutions. WillScot Mobile Mini services diverse end
markets across all sectors of the economy from a network of
approximately 275 branch locations and additional drop lots
throughout the United States, Canada, Mexico, and the United
Kingdom.
Forward-Looking StatementsThis
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" 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: the timing of our achievement of Free Cash
Flow performance, our ability to expand and sustain expanded
margins, and our revenue, Adjusted EBITDA and Net Capex outlooks.
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; our ability to achieve planned synergies related to
acquisitions; our ability to 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
adversely affecting our profitability; potential litigation
involving our Company; general economic and market conditions
impacting demand for our products and services; 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, 2021), 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 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.
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 |
|
Scott Junk |
investors@willscotmobilemini.com |
|
scott.junk@willscotmobilemini.com |
|
WillScot Mobile Mini Holdings
Corp.Condensed Consolidated Statements of
Operations |
|
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in thousands, except share and per share
data) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
Revenues: |
|
|
|
|
|
|
|
Leasing and services revenue: |
|
|
|
|
|
|
|
Leasing |
$ |
389,886 |
|
|
$ |
322,870 |
|
|
$ |
1,412,123 |
|
$ |
1,001,447 |
|
Delivery and installation |
|
99,799 |
|
|
|
86,752 |
|
|
|
374,682 |
|
|
274,156 |
|
Sales revenue: |
|
|
|
|
|
|
|
New units |
|
15,059 |
|
|
|
14,357 |
|
|
|
52,882 |
|
|
53,093 |
|
Rental units |
|
13,176 |
|
|
|
13,668 |
|
|
|
55,210 |
|
|
38,949 |
|
Total revenues |
|
517,920 |
|
|
|
437,647 |
|
|
|
1,894,897 |
|
|
1,367,645 |
|
Costs: |
|
|
|
|
|
|
|
Costs of leasing and services: |
|
|
|
|
|
|
|
Leasing |
|
81,686 |
|
|
|
65,032 |
|
|
|
317,061 |
|
|
227,376 |
|
Delivery and installation |
|
78,581 |
|
|
|
66,360 |
|
|
|
306,861 |
|
|
220,102 |
|
Costs of sales: |
|
|
|
|
|
|
|
New units |
|
9,717 |
|
|
|
9,372 |
|
|
|
35,377 |
|
|
34,841 |
|
Rental units |
|
6,983 |
|
|
|
8,326 |
|
|
|
29,853 |
|
|
24,772 |
|
Depreciation of rental equipment |
|
62,484 |
|
|
|
54,302 |
|
|
|
237,537 |
|
|
200,581 |
|
Gross profit |
|
278,469 |
|
|
|
234,255 |
|
|
|
968,208 |
|
|
659,973 |
|
Expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
|
139,150 |
|
|
|
119,357 |
|
|
|
511,446 |
|
|
360,626 |
|
Transaction costs |
|
228 |
|
|
|
812 |
|
|
|
1,375 |
|
|
64,053 |
|
Other depreciation and amortization |
|
19,270 |
|
|
|
20,425 |
|
|
|
78,030 |
|
|
43,249 |
|
Lease impairment expense and other related charges |
|
560 |
|
|
|
877 |
|
|
|
2,888 |
|
|
4,876 |
|
Restructuring costs |
|
(90 |
) |
|
|
1,984 |
|
|
|
11,868 |
|
|
6,527 |
|
Currency losses (gains), net |
|
352 |
|
|
|
(502 |
) |
|
|
548 |
|
|
(355 |
) |
Other expense (income), net |
|
1,573 |
|
|
|
39 |
|
|
|
1,780 |
|
|
(1,718 |
) |
Operating income |
|
117,426 |
|
|
|
91,263 |
|
|
|
360,273 |
|
|
182,715 |
|
Interest expense |
|
29,610 |
|
|
|
30,076 |
|
|
|
117,987 |
|
|
119,886 |
|
Fair value loss (gain) on common stock warrant liabilities |
|
— |
|
|
|
42,602 |
|
|
|
26,597 |
|
|
(3,461 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
5,999 |
|
|
42,401 |
|
Income (loss) before income tax |
|
87,816 |
|
|
|
18,585 |
|
|
|
209,690 |
|
|
23,889 |
|
Income tax expense (benefit) |
|
13,593 |
|
|
|
14,719 |
|
|
|
49,546 |
|
|
(51,451 |
) |
Net income (loss) |
|
74,223 |
|
|
|
3,866 |
|
|
|
160,144 |
|
|
75,340 |
|
Net income (loss) attributable to non-controlling interest, net of
tax |
|
— |
|
|
|
— |
|
|
|
— |
|
|
1,213 |
|
Net income (loss) attributable to WillScot Mobile Mini |
$ |
74,223 |
|
|
$ |
3,866 |
|
|
$ |
160,144 |
|
$ |
74,127 |
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to WillScot Mobile Mini
common shareholders |
|
|
|
|
|
|
|
Basic |
$ |
0.33 |
|
|
$ |
(0.02 |
) |
|
$ |
0.71 |
|
$ |
0.44 |
|
Diluted |
$ |
0.32 |
|
|
$ |
(0.02 |
) |
|
$ |
0.69 |
|
$ |
0.25 |
|
Weighted average shares: |
|
|
|
|
|
|
|
Basic |
|
223,436,603 |
|
|
|
228,637,826 |
|
|
|
226,518,931 |
|
|
169,230,177 |
|
Diluted |
|
229,965,703 |
|
|
|
233,625,946 |
|
|
|
232,793,902 |
|
|
177,268,383 |
|
|
Unaudited
Segment Operating Data |
|
Comparison of Three Months Ended December 31, 2021 and
2020 |
|
|
Three Months EndedDecember 31, 2021 |
(in thousands, except for units on rent and
rates) |
NA Modular |
|
NA Storage |
|
UK Storage |
|
Tank andPump |
|
Total |
Revenue |
$ |
309,522 |
|
|
$ |
151,363 |
|
|
$ |
27,487 |
|
|
$ |
29,548 |
|
|
$ |
517,920 |
|
Gross profit |
$ |
139,453 |
|
|
$ |
107,423 |
|
|
$ |
17,936 |
|
|
$ |
13,657 |
|
|
$ |
278,469 |
|
Adjusted EBITDA |
$ |
115,263 |
|
|
$ |
71,629 |
|
|
$ |
12,392 |
|
|
$ |
11,880 |
|
|
$ |
211,164 |
|
Capital expenditures for rental equipment |
$ |
67,207 |
|
|
$ |
21,261 |
|
|
$ |
5,185 |
|
|
$ |
6,654 |
|
|
$ |
100,307 |
|
Average modular space units on rent |
|
84,328 |
|
|
|
18,006 |
|
|
|
8,627 |
|
|
|
— |
|
|
|
110,961 |
|
Average modular space utilization rate |
|
67.5 |
% |
|
|
78.8 |
% |
|
|
76.7 |
% |
|
|
— |
% |
|
|
69.8 |
% |
Average modular space monthly rental rate |
$ |
866 |
|
|
$ |
617 |
|
|
$ |
439 |
|
|
$ |
— |
|
|
$ |
792 |
|
Average portable storage units on rent |
|
552 |
|
|
|
158,055 |
|
|
|
26,911 |
|
|
|
— |
|
|
|
185,518 |
|
Average portable storage utilization rate |
|
62.7 |
% |
|
|
88.1 |
% |
|
|
90.6 |
% |
|
|
— |
% |
|
|
88.4 |
% |
Average portable storage monthly rental rate |
$ |
228 |
|
|
$ |
163 |
|
|
$ |
91 |
|
|
$ |
— |
|
|
$ |
153 |
|
Average tank and pump solutions rental fleet utilization based on
original equipment cost |
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
75.5 |
% |
|
|
75.5 |
% |
|
Three Months EndedDecember 31, 2020 |
(in thousands, except for units on rent and
rates) |
NA Modular |
|
NA Storage |
|
UK Storage |
|
Tank andPump |
|
Total |
Revenue |
$ |
270,612 |
|
|
$ |
117,336 |
|
|
$ |
24,708 |
|
|
$ |
24,991 |
|
|
$ |
437,647 |
|
Gross profit |
$ |
123,409 |
|
|
$ |
83,401 |
|
|
$ |
14,971 |
|
|
$ |
12,474 |
|
|
$ |
234,255 |
|
Adjusted EBITDA |
$ |
107,460 |
|
|
$ |
53,372 |
|
|
$ |
9,516 |
|
|
$ |
9,336 |
|
|
$ |
179,684 |
|
Capital expenditures for rental equipment |
$ |
39,396 |
|
|
$ |
7,735 |
|
|
$ |
1,016 |
|
|
$ |
1,963 |
|
|
$ |
50,110 |
|
Average modular space units on rent |
|
86,011 |
|
|
|
16,948 |
|
|
|
8,834 |
|
|
|
— |
|
|
|
111,793 |
|
Average modular space utilization rate |
|
68.2 |
% |
|
|
80.9 |
% |
|
|
82.4 |
% |
|
|
— |
% |
|
|
70.9 |
% |
Average modular space monthly rental rate |
$ |
724 |
|
|
$ |
547 |
|
|
$ |
377 |
|
|
$ |
— |
|
|
$ |
670 |
|
Average portable storage units on rent |
|
15,603 |
|
|
|
120,439 |
|
|
|
24,496 |
|
|
|
— |
|
|
|
160,538 |
|
Average portable storage utilization rate |
|
62.6 |
% |
|
|
83.0 |
% |
|
|
88.6 |
% |
|
|
— |
% |
|
|
81.2 |
% |
Average portable storage monthly rental rate |
$ |
124 |
|
|
$ |
150 |
|
|
$ |
78 |
|
|
$ |
— |
|
|
$ |
136 |
|
Average tank and pump solutions rental fleet utilization based on
original equipment cost |
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
65.2 |
% |
|
|
65.2 |
% |
|
|
Comparison of the Year Ended December 31, 2021 and
2020 |
|
Year EndedDecember 31, 2021 |
(in thousands, except for units on rent and
rates) |
NA Modular |
|
NA Storage |
|
UK Storage |
|
Tank andPump |
|
Total |
Revenue |
$ |
1,164,179 |
|
|
$ |
508,802 |
|
|
$ |
111,025 |
|
|
$ |
110,891 |
|
|
$ |
1,894,897 |
|
Gross profit |
$ |
496,445 |
|
|
$ |
348,259 |
|
|
$ |
71,242 |
|
|
$ |
52,262 |
|
|
$ |
968,208 |
|
Adjusted EBITDA |
$ |
423,004 |
|
|
$ |
226,600 |
|
|
$ |
49,039 |
|
|
$ |
41,750 |
|
|
$ |
740,393 |
|
Capital expenditures for rental equipment |
$ |
187,495 |
|
|
$ |
45,426 |
|
|
$ |
27,830 |
|
|
$ |
17,747 |
|
|
$ |
278,498 |
|
Average modular space units on rent |
|
84,524 |
|
|
|
16,780 |
|
|
|
9,098 |
|
|
|
— |
|
|
|
110,402 |
|
Average modular space utilization rate |
|
67.6 |
% |
|
|
78.5 |
% |
|
|
82.0 |
% |
|
|
— |
% |
|
|
70.1 |
% |
Average modular space monthly rental rate |
$ |
809 |
|
|
$ |
582 |
|
|
$ |
434 |
|
|
$ |
— |
|
|
$ |
744 |
|
Average portable storage units on rent |
|
7,312 |
|
|
|
128,463 |
|
|
|
25,691 |
|
|
|
— |
|
|
|
161,466 |
|
Average portable storage utilization rate |
|
68.8 |
% |
|
|
80.9 |
% |
|
|
90.2 |
% |
|
|
— |
% |
|
|
81.5 |
% |
Average portable storage monthly rental rate |
$ |
131 |
|
|
$ |
155 |
|
|
$ |
88 |
|
|
$ |
— |
|
|
$ |
144 |
|
Average tank and pump solutions rental fleet utilization based on
original equipment cost |
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
72.3 |
% |
|
|
72.3 |
% |
|
Year EndedDecember 31, 2020 |
(in thousands, except for units on rent and
rates) |
NA Modular |
|
NA Storage |
|
UK Storage |
|
Tank andPump |
|
Total |
Revenue |
$ |
1,051,162 |
|
|
$ |
221,829 |
|
|
$ |
46,361 |
|
|
$ |
48,293 |
|
|
$ |
1,367,645 |
|
Gross profit |
$ |
451,642 |
|
|
$ |
156,785 |
|
|
$ |
27,642 |
|
|
$ |
23,904 |
|
|
$ |
659,973 |
|
Adjusted EBITDA |
$ |
394,805 |
|
|
$ |
99,837 |
|
|
$ |
17,822 |
|
|
$ |
17,843 |
|
|
$ |
530,307 |
|
Capital expenditures for rental equipment |
$ |
153,327 |
|
|
$ |
14,969 |
|
|
$ |
1,693 |
|
|
$ |
2,394 |
|
|
$ |
172,383 |
|
Average modular space units on rent |
|
86,874 |
|
|
|
8,333 |
|
|
|
4,319 |
|
|
|
— |
|
|
|
99,526 |
|
Average modular space utilization rate |
|
68.9 |
% |
|
|
80.6 |
% |
|
|
80.8 |
% |
|
|
— |
% |
|
|
70.2 |
% |
Average modular space monthly rental rate |
$ |
685 |
|
|
$ |
526 |
|
|
$ |
367 |
|
|
$ |
— |
|
|
$ |
658 |
|
Average portable storage units on rent |
|
15,823 |
|
|
|
56,415 |
|
|
|
11,910 |
|
|
|
— |
|
|
|
84,148 |
|
Average portable storage utilization rate |
|
63.5 |
% |
|
|
78.2 |
% |
|
|
85.9 |
% |
|
|
— |
% |
|
|
75.9 |
% |
Average portable storage monthly rental rate |
$ |
122 |
|
|
$ |
147 |
|
|
$ |
76 |
|
|
$ |
— |
|
|
$ |
132 |
|
Average tank and pump solutions rental fleet utilization based on
original equipment cost |
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
61.7 |
% |
|
|
61.7 |
% |
|
|
WillScot Mobile Mini Holdings
Corp.Condensed Consolidated Balance
Sheets |
|
|
|
(in thousands, except share data) |
December 31, 2021 |
|
December 31, 2020 |
Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
12,699 |
|
|
$ |
24,937 |
|
Trade receivables, net of allowances for credit losses at December
31, 2021 and December 31, 2020 of $47,629 and $29,258,
respectively |
|
399,887 |
|
|
|
330,942 |
|
Inventories |
|
32,739 |
|
|
|
23,731 |
|
Prepaid expenses and other current assets |
|
36,761 |
|
|
|
29,954 |
|
Assets held for sale |
|
954 |
|
|
|
12,004 |
|
Total current assets |
|
483,040 |
|
|
|
421,568 |
|
Rental equipment, net |
|
3,080,981 |
|
|
|
2,931,646 |
|
Property, plant and equipment, net |
|
312,178 |
|
|
|
303,650 |
|
Operating lease assets |
|
247,064 |
|
|
|
232,094 |
|
Goodwill |
|
1,178,806 |
|
|
|
1,171,219 |
|
Intangible assets, net |
|
460,678 |
|
|
|
495,947 |
|
Other non-current assets |
|
10,852 |
|
|
|
16,081 |
|
Total long-term assets |
|
5,290,559 |
|
|
|
5,150,637 |
|
Total assets |
$ |
5,773,599 |
|
|
$ |
5,572,205 |
|
Liabilities and equity |
|
|
|
|
|
Accounts payable |
$ |
118,271 |
|
|
$ |
106,926 |
|
Accrued expenses |
|
100,195 |
|
|
|
91,381 |
|
Accrued employee benefits |
|
68,414 |
|
|
|
50,291 |
|
Deferred revenue and customer deposits |
|
159,639 |
|
|
|
135,485 |
|
Operating lease liabilities - current |
|
53,005 |
|
|
|
48,063 |
|
Current portion of long-term debt |
|
18,121 |
|
|
|
16,521 |
|
Total current liabilities |
|
517,645 |
|
|
|
448,667 |
|
Long-term debt |
|
2,694,319 |
|
|
|
2,453,809 |
|
Deferred tax liabilities |
|
354,879 |
|
|
|
307,541 |
|
Operating lease liabilities - non-current |
|
194,256 |
|
|
|
183,761 |
|
Common stock warrant liabilities |
|
— |
|
|
|
77,404 |
|
Other non-current liabilities |
|
15,737 |
|
|
|
37,150 |
|
Long-term liabilities |
|
3,259,191 |
|
|
|
3,059,665 |
|
Total liabilities |
|
3,776,836 |
|
|
|
3,508,332 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
Preferred Stock: $0.0001 par, 1,000,000 shares authorized and zero
shares issued and outstanding at December 31, 2021 and December 31,
2020 |
|
— |
|
|
|
— |
|
Common Stock: $0.0001 par, 500,000,000 shares authorized and
223,939,527 and 229,038,158 shares issued and outstanding at
December 31, 2021 and December 31, 2020, respectively |
|
22 |
|
|
|
23 |
|
Additional paid-in-capital |
|
3,616,902 |
|
|
|
3,852,291 |
|
Accumulated other comprehensive loss |
|
(29,071 |
) |
|
|
(37,207 |
) |
Accumulated deficit |
|
(1,591,090 |
) |
|
|
(1,751,234 |
) |
Total shareholders' equity |
|
1,996,763 |
|
|
|
2,063,873 |
|
Total liabilities and shareholders' equity |
$ |
5,773,599 |
|
|
$ |
5,572,205 |
|
|
|
|
|
|
|
|
|
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 in the reconciliation of our consolidated net income
(loss) to Adjusted EBITDA reconciliation below. We believe that
evaluating segment performance excluding such items is meaningful
because it provides insight with respect to intrinsic 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
We define EBITDA as net income (loss) plus
interest (income) expense, income tax expense (benefit),
depreciation and amortization. Our adjusted EBITDA ("Adjusted
EBITDA") reflects the following further adjustments to EBITDA to
exclude certain non-cash items and the effect of what we consider
transactions or events 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. Substantially all such currency gains (losses) are
unrealized and attributable to financings due to and from
affiliated companies.
- 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 and lease
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
includes 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 an unaudited
reconciliation of Net income to Adjusted EBITDA:
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in thousands) |
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
Net income |
$ |
74,223 |
|
$ |
3,866 |
|
|
$ |
160,144 |
|
$ |
75,340 |
|
Income tax expense (benefit) |
|
13,593 |
|
|
14,719 |
|
|
|
49,546 |
|
|
(51,451 |
) |
Loss on extinguishment of debt |
|
— |
|
|
— |
|
|
|
5,999 |
|
|
42,401 |
|
Interest expense |
|
29,610 |
|
|
30,076 |
|
|
|
117,987 |
|
|
119,886 |
|
Depreciation and amortization |
|
81,754 |
|
|
74,727 |
|
|
|
315,567 |
|
|
243,830 |
|
Fair value loss (gain) on common stock warrant liabilities |
|
— |
|
|
42,602 |
|
|
|
26,597 |
|
|
(3,461 |
) |
Currency losses (gains), net |
|
352 |
|
|
(502 |
) |
|
|
548 |
|
|
(355 |
) |
Restructuring costs, lease impairment expense and other related
charges |
|
470 |
|
|
2,861 |
|
|
|
14,756 |
|
|
11,403 |
|
Transaction costs |
|
228 |
|
|
812 |
|
|
|
1,375 |
|
|
64,053 |
|
Integration costs |
|
5,213 |
|
|
7,417 |
|
|
|
28,424 |
|
|
18,338 |
|
Stock compensation expense |
|
4,509 |
|
|
2,921 |
|
|
|
18,989 |
|
|
9,879 |
|
Other |
|
1,212 |
|
|
185 |
|
|
|
461 |
|
|
444 |
|
Adjusted EBITDA |
$ |
211,164 |
|
$ |
179,684 |
|
|
$ |
740,393 |
|
$ |
530,307 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Excluding Gain/Loss from
Warrants
We define Net Income Excluding Gain/Loss from
Warrants as net income plus or minus the impact of the change in
the fair value of the common stock warrant liability. Management
believes that the presentation of our financial statements
excluding the impact of this mark-to-market adjustment provides
useful information regarding our results of operations and assists
in the review of the actual operating performance of our
business.
The following table provides an unaudited
reconciliation of Net income to Net Income Excluding Gain/Loss from
Warrants:
|
Three Months EndedDecember 31, |
Year EndedDecember 31, |
(in thousands) |
2021 |
2020 |
2021 |
2020 |
Net income |
$ |
74,223 |
|
$ |
3,866 |
$ |
160,144 |
|
$ |
75,340 |
|
Fair value loss (gain) on common stock warrant liabilities |
|
— |
|
|
42,602 |
|
26,597 |
|
|
(3,461 |
) |
Net Income Excluding Gain/Loss from Warrants |
$ |
74,223 |
|
$ |
46,468 |
$ |
186,741 |
|
$ |
71,879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin
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 an unaudited
reconciliation of Adjusted EBITDA Margin:
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in thousands) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Adjusted EBITDA (A) |
$ |
211,164 |
|
|
$ |
179,684 |
|
|
$ |
740,393 |
|
|
$ |
530,307 |
|
Revenue (B) |
|
517,920 |
|
|
|
437,647 |
|
|
|
1,894,897 |
|
|
|
1,367,645 |
|
Adjusted EBITDA Margin (A/B) |
|
40.8 |
% |
|
|
41.1 |
% |
|
|
39.1 |
% |
|
|
38.8 |
% |
Net Income (C) |
$ |
74,223 |
|
|
$ |
3,866 |
|
|
$ |
160,144 |
|
|
$ |
75,340 |
|
Net Income Margin % (C/B) |
|
14.3 |
% |
|
|
0.9 |
% |
|
|
8.5 |
% |
|
|
5.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow and Free Cash Flow
Margin
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 Revenue. Management believes
that the presentation of Free Cash Flow and Free Cash Flow Margin
provides useful information to investors concerning cash flow
available to fund our capital allocation alternatives.
The following table provides an unaudited
reconciliation of net cash provided by operating activities to Free
Cash Flow.
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
(in thousands) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Net cash provided by operating activities |
$ |
147,847 |
|
|
$ |
129,717 |
|
|
$ |
539,902 |
|
|
$ |
304,812 |
|
Purchase of rental equipment and refurbishments |
|
(100,307 |
) |
|
|
(50,110 |
) |
|
|
(278,498 |
) |
|
|
(172,383 |
) |
Proceeds from sale of rental equipment |
|
13,176 |
|
|
|
13,668 |
|
|
|
55,210 |
|
|
|
38,949 |
|
Purchase of property, plant and equipment |
|
(9,662 |
) |
|
|
(7,375 |
) |
|
|
(30,498 |
) |
|
|
(16,454 |
) |
Proceeds from the sale of property, plant and equipment |
|
264 |
|
|
|
1,530 |
|
|
|
16,911 |
|
|
|
7,355 |
|
Free Cash Flow (A) |
$ |
51,318 |
|
|
$ |
87,430 |
|
|
$ |
303,027 |
|
|
$ |
162,279 |
|
|
|
|
|
|
|
|
|
Revenue (B) |
$ |
517,920 |
|
|
$ |
437,647 |
|
|
$ |
1,894,897 |
|
|
$ |
1,367,645 |
|
Free Cash Flow Margin (A/B) |
|
9.9 |
% |
|
|
20.0 |
% |
|
|
16.0 |
% |
|
|
11.9 |
% |
|
|
|
|
|
|
|
|
Net cash provided by operating activities (D) |
$ |
147,847 |
|
|
$ |
129,717 |
|
|
$ |
539,902 |
|
|
$ |
304,812 |
|
Net cash provided by operating activities margin (D/B) |
|
28.5 |
% |
|
|
29.6 |
% |
|
|
28.5 |
% |
|
|
22.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Gross Profit and Adjusted Gross
Profit Percentage
We define Adjusted Gross Profit as gross profit
plus depreciation on rental equipment. Adjusted Gross Profit
Percentage is defined as Adjusted Gross Profit divided by Revenue.
Adjusted Gross Profit and Adjusted Gross Profit Percentage are not
measurements of our financial performance under GAAP and should not
be considered as an alternative to gross profit, gross profit
percentage, or other performance measures derived in accordance
with GAAP. In addition, our measurement of Adjusted Gross Profit
and Adjusted Gross Profit Percentage may not be comparable to
similarly titled measures of other companies. Our management
believes that the presentation of Adjusted Gross Profit and
Adjusted Gross Profit Percentage provides useful information to
investors regarding our results of operations because it assists in
analyzing the performance of our business.
The following table provides an unaudited
reconciliation of gross profit to Adjusted Gross Profit and
Adjusted Gross Profit Percentage.
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
(in thousands) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2021 |
|
Revenue (A) |
$ |
517,920 |
|
|
$ |
437,647 |
|
|
$ |
1,894,897 |
|
|
$ |
1,367,645 |
|
|
|
|
|
|
|
|
|
Gross profit (B) |
$ |
278,469 |
|
|
$ |
234,255 |
|
|
$ |
968,208 |
|
|
$ |
659,973 |
|
Depreciation of rental equipment |
|
62,484 |
|
|
|
54,302 |
|
|
|
237,537 |
|
|
|
200,581 |
|
Adjusted Gross Profit (C) |
$ |
340,953 |
|
|
$ |
288,557 |
|
|
$ |
1,205,745 |
|
|
$ |
860,554 |
|
|
|
|
|
|
|
|
|
Gross Profit Percentage (B/A) |
|
53.8 |
% |
|
|
53.5 |
% |
|
|
51.1 |
% |
|
|
48.3 |
% |
Adjusted Gross Profit Percentage (C/A) |
|
65.8 |
% |
|
|
65.9 |
% |
|
|
63.6 |
% |
|
|
62.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. Our management 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.
The following table provides an unaudited
reconciliation of Net CAPEX:
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
(in thousands) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Total purchases of rental equipment and refurbishments |
$ |
(100,307 |
) |
|
$ |
(50,110 |
) |
|
$ |
(278,498 |
) |
|
$ |
(172,383 |
) |
Total proceeds from sale of rental equipment |
|
13,176 |
|
|
|
13,668 |
|
|
|
55,210 |
|
|
|
38,949 |
|
Net CAPEX for Rental Equipment |
|
(87,131 |
) |
|
|
(36,442 |
) |
|
|
(223,288 |
) |
|
|
(133,434 |
) |
Purchase of property, plant and equipment |
|
(9,662 |
) |
|
|
(7,375 |
) |
|
|
(30,498 |
) |
|
|
(16,454 |
) |
Proceeds from sale of property, plant and equipment |
|
264 |
|
|
|
1,530 |
|
|
|
16,911 |
|
|
|
7,355 |
|
Net CAPEX |
$ |
(96,529 |
) |
|
$ |
(42,287 |
) |
|
$ |
(236,875 |
) |
|
$ |
(142,533 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 25%. 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 for annual metrics and two quarter average for
quarterly metrics. 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 following table provides an unaudited
reconciliation of Return on Invested Capital:
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
(in thousands) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Total Assets |
$ |
5,773,599 |
|
|
$ |
5,572,205 |
|
|
$ |
5,773,599 |
|
|
$ |
5,572,205 |
|
Less: Goodwill |
|
(1,178,806 |
) |
|
|
(1,171,219 |
) |
|
|
(1,178,806 |
) |
|
|
(1,171,219 |
) |
Less: Intangible assets, net |
|
(460,678 |
) |
|
|
(495,947 |
) |
|
|
(460,678 |
) |
|
|
(495,947 |
) |
Less: Total Liabilities |
|
(3,776,836 |
) |
|
|
(3,508,333 |
) |
|
|
(3,776,836 |
) |
|
|
(3,508,332 |
) |
Add: Long Term Debt |
|
2,694,319 |
|
|
|
2,453,809 |
|
|
|
2,694,319 |
|
|
|
2,453,809 |
|
Net Assets excluding interest bearing debt and goodwill and
intangibles |
|
3,051,598 |
|
|
|
2,850,515 |
|
|
|
3,051,598 |
|
|
|
2,850,516 |
|
Average Invested Capital (A) |
$ |
2,980,452 |
|
|
$ |
2,878,705 |
|
|
$ |
2,893,471 |
|
|
$ |
2,355,748 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
211,164 |
|
|
$ |
179,684 |
|
|
$ |
740,393 |
|
|
$ |
530,307 |
|
Less: Depreciation |
|
(75,104 |
) |
|
|
(65,859 |
) |
|
|
(288,300 |
) |
|
|
(227,729 |
) |
Adjusted EBITA (B) |
$ |
136,060 |
|
|
$ |
113,825 |
|
|
$ |
452,093 |
|
|
$ |
302,578 |
|
|
|
|
|
|
|
|
|
Statutory Tax Rate (C) |
|
25 |
% |
|
|
25 |
% |
|
|
25 |
% |
|
|
25 |
% |
Estimated Tax (B*C) |
$ |
34,015 |
|
|
$ |
28,456 |
|
|
$ |
113,023 |
|
|
$ |
75,644 |
|
Adjusted earnings before interest and amortization (D) |
$ |
102,045 |
|
|
$ |
85,369 |
|
|
$ |
339,070 |
|
|
$ |
226,933 |
|
ROIC (D/A) |
|
13.7 |
% |
|
|
11.9 |
% |
|
|
11.7 |
% |
|
|
9.6 |
% |
|
|
|
|
|
|
|
|
Operating income (E) |
$ |
117,426 |
|
|
$ |
91,263 |
|
|
$ |
360,273 |
|
|
$ |
182,715 |
|
Total Assets (F) |
$ |
5,773,599 |
|
|
$ |
5,572,205 |
|
|
$ |
5,773,599 |
|
|
$ |
5,572,205 |
|
Income before income tax / Total Assets (E/F) |
|
8.2 |
% |
|
|
6.5 |
% |
|
|
6.4 |
% |
|
|
4.5 |
% |
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