WillScot Mobile Mini Reports Second Quarter 2023 Results
WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini” or the
“Company”) (Nasdaq: WSC), the North American leader in innovative
flexible space and storage solutions, today announced second
quarter 2023 results and provided an update on operations and the
current market environment, including the following highlights:
- Second quarter revenue increased
11% to $582 million, income from continuing operations increased
46% to $88 million, and Adjusted EBITDA increased 25% to $261
million year-over-year.
- Adjusted EBITDA Margin from
continuing operations of 44.9% expanded 500 basis points
year-over-year.
- Generated Cash From Operations of
$202 million and Free Cash Flow of $160 million, up 7%
and 130% year-over-year, respectively, and Free Cash Flow Margin of
27%.
- Maintained leverage at 3.0x Net
Debt to Adjusted EBITDA at the end of Q2, which is at the bottom of
our 3.0-3.5x target range.
- Invested $70 million of capital in
three acquisitions during the quarter with a robust pipeline
continuing in 2023.
- Returned $239 million to
shareholders by repurchasing 5.4 million shares of Common Stock
during the quarter, reducing economic share count by 9.1% over the
last twelve months as of June 30, 20231.
- Generated 17% Return on Invested
Capital ("ROIC") over the last 12 months, which increased
approximately 430 basis points year-over-year.
Brad Soultz, Chief Executive Officer of WillScot
Mobile Mini, commented, "Top-line revenue growth continued in Q2
2023 as our leasing portfolio compounded predictably, with
leasing revenue up 16% due to continued tailwinds from rate
improvements and Value-Added Products (VAPS). With our enhanced CRM
in place and two years of operating in SAP, margin enhancement
initiatives drove Adjusted EBITDA margins to 44.9% and Free Cash
Flow to $160 million. These are record profitability levels and
indicative of the long-term earnings generation potential in our
platform. As a result of our strong financial performance, low
leverage, and high liquidity, we remain unconstrained from a
capital allocation standpoint. We invested $43 million in Net
Capex, which is in line with maintenance levels given fleet
availability. And we allocated $70 million to three
tuck-in acquisitions, as we continue to prosecute our
programmatic M&A strategy. We returned $239 million of capital
to our shareholders by repurchasing 5.4 million shares of our
Common Stock during the quarter, reducing economic share count by
9.1% over the last twelve months."
Soultz continued, "As the leading innovator of
flexible space solutions, we were excited to roll out PRORACKTM,
our proprietary space management solution designed to deliver
unparalleled organization, productivity, and efficiency in storage
containers in test markets during the quarter. PRORACK is durable,
is easy to use, and meets a variety of customer needs
with flexible configurations to function as a workstation, material
storage, pipe rack, tool crib, or a combination of all. This
innovation, among others in our pipeline, gives us multiple paths
to deliver $500 million of VAPS revenue as part of our incremental
$1 billion of idiosyncratic growth levers."
Soultz concluded, "The overall demand environment
and mix of volume, pricing, and VAPS continue to support the
substantial growth we expected in 2023, and we are reaffirming our
guidance of $1,025 million to $1,075 million of Adjusted EBITDA. We
expect record Adjusted EBITDA margins and Free Cash Flow this year,
and are beginning to lay the groundwork for an exciting 2024."
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
(in thousands, except share data) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Revenue |
$ |
582,089 |
|
|
$ |
522,890 |
|
|
$ |
1,147,557 |
|
|
$ |
974,061 |
|
|
Income from continuing operations |
$ |
87,729 |
|
|
$ |
60,099 |
|
|
$ |
164,000 |
|
|
$ |
99,147 |
|
|
Adjusted EBITDA from continuing operations2 |
$ |
261,341 |
|
|
$ |
208,643 |
|
|
$ |
508,183 |
|
|
$ |
376,416 |
|
|
Adjusted EBITDA Margin (%)2 |
|
44.9 |
% |
|
|
39.9 |
% |
|
|
44.3 |
% |
|
|
38.6 |
% |
|
Net cash provided by operating activities |
$ |
202,155 |
|
|
$ |
188,326 |
|
|
$ |
350,920 |
|
|
$ |
333,853 |
|
|
Free Cash Flow2,5 |
$ |
159,601 |
|
|
$ |
69,418 |
|
|
$ |
262,541 |
|
|
$ |
124,042 |
|
|
Weighted Average Dilutive Shares Outstanding |
|
204,326,162 |
|
|
|
227,484,012 |
|
|
|
208,233,141 |
|
|
|
226,983,150 |
|
|
Free Cash Flow Margin (%)2,5 |
|
27.4 |
% |
|
|
11.9 |
% |
|
|
22.7 |
% |
|
|
11.4 |
% |
|
Return on Invested Capital2 |
|
18.1 |
% |
|
|
14.6 |
% |
|
|
17.3 |
% |
|
|
13.0 |
% |
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
Adjusted EBITDA by Segment (in
thousands)2,6 |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Modular |
$ |
151,443 |
|
$ |
122,824 |
|
$ |
288,407 |
|
$ |
222,410 |
|
Storage |
|
109,898 |
|
|
85,819 |
|
|
219,776 |
|
|
154,006 |
|
Consolidated Adjusted EBITDA |
$ |
261,341 |
|
$ |
208,643 |
|
$ |
508,183 |
|
$ |
376,416 |
Second Quarter
2023
Results2
Tim Boswell, President and Chief Financial Officer,
commented, "Our strong financial performance in Q2 2023 was driven
by our long-duration pricing and Value-Added Products
tailwinds, as well as structural margin improvements across all
revenue lines in both segments. In the quarter, we generated $582
million of revenue, up 11% year-over-year, and $261 million of
Adjusted EBITDA, up 25% year-over-year. Gross profit margin
increased by 370 basis points, with expansion across all revenue
streams. Adjusted EBITDA margin expanded by 500 basis points as we
improved efficiency of our variable spend as well as operating
leverage from our fixed costs. Free Cash Flow of $160 million grew
by 130% and Free Cash Flow margin of 27% expanded over 1,500 basis
points. And Return on Invested Capital expanded by 340 basis points
to 18% in the quarter."
Boswell continued, "The outstanding trajectory for
growth, Free Cash Flow, and returns, gives us continued confidence
to allocate capital wherever we see opportunity. We closed three
acquisitions for $70 million during the quarter and see a
strong tuck-in pipeline through the remainder of the year. We
continued to take advantage of the opportunity to own more of our
long-term earnings growth by repurchasing 21 million shares and
reducing our economic share count by 9.1% over the last 12 months.
Across our scalable platform, we see numerous organic and inorganic
growth opportunities as we position the portfolio for 2024 and
beyond."
Boswell concluded, "Overall market conditions have remained
consistent, so we are maintaining our 2023 Adjusted EBITDA guidance
at a range of $1,025 million to $1,075 million and expect that
margins will continue to trend stronger than our original
expectations. At the midpoint of our guidance, and based on the
strength of our year-to-date results, we expect that Free Cash Flow
in 2023 will exceed $500 million, and based on Q2 results we have
clear line of sight to the $650 million Free Cash Flow milestone
that we set less than two years ago. Our consistent execution and
reinvestment through our capital allocation framework will continue
to generate sustainable growth and predictably compounding returns
over time."
Consolidated Q2
2023 Results From Continuing
Operations
- Revenue of
$582.1 million increased by 11.3% year-over-year due to our organic
revenue growth initiatives and the impact of acquisitions. We
estimate that acquisitions completed over the past four quarters
contributed approximately $17 million to total revenues in the
quarter.
- Adjusted EBITDA
margin from continuing operations was 44.9% in Q2 2023 and
increased 500 bps versus prior year driven by continued expansion
of all margin lines. Most significantly, delivery and installation
margins increased 230 bps versus prior year and leasing margins
increased 90 bps versus prior year, both driven primarily by
increased pricing. Additionally, selling, general, and
administrative expenses included in Adjusted EBITDA decreased as a
percentage of revenue by 260 bps versus 2022 driving the majority
of the remaining margin expansion.
- Effective
January 1, 2023, we transferred approximately 6,000 Ground Level
Office (GLO) modular products from the Modular Solutions segment to
our Storage Solutions segment. We transferred these legacy WillScot
GLOs to the Storage Solutions segment because they are modified
container products that can be operated more efficiently on
the legacy Mobile Mini branch and logistics infrastructure. The
adjustment transferred approximately $50 million of revenue and $21
million of Adjusted EBITDA on an annualized basis from Modular
Solutions to Storage Solutions. We recast historical segment
financial results and operating key performance indicators (KPIs)
to reflect this transfer.
Modular Solutions Segment
- Revenue of
$370.7 million increased by 10.6% year-over-year.
- Average modular
space monthly rental rate increased $163 year-over-year, or 17.4%,
to $1,102.
- VAPS average
monthly rate, a component of average modular space monthly rental
rate above, increased $36 year-over-year, or 13%, to $308. For
delivered units over the last 12 months, VAPS average monthly rate
decreased $4 year-over-year, or 1%, to $471.
- Average modular
space units on rent decreased 497 units year-over-year, or 0.6%, to
81,886.
- Adjusted EBITDA
of $151.4 million increased by 23.3% year-over-year and Adjusted
EBITDA Margin of 40.8% expanded by 420 basis points.
Storage Solutions Segment
- Revenue of
$211.4 million increased by 12.7% year-over-year.
- Average portable
storage monthly rental rate increased $48 year-over-year, or 27.0%,
to $226.
- Average portable
storage units on rent decreased by 10,282 units year-over-year, or
6.3%, to 153,011.
- Modular space,
representing 19,200 Ground Level Office modular products, average
monthly rental rate of $835 increased 25.0% year-over-year as a
result of price optimization and increased VAPS penetration.
- VAPS average
monthly rate, a component of average modular space monthly rental
rate above, increased $47 year-over-year, or 62%, to $122.
- Average modular
space units on rent decreased 3,032, or 13.6%, year-over-year, to
19,200.
- Adjusted EBITDA of $109.9 million
increased by 28.1% year-over-year and Adjusted EBITDA Margin of
52.0% expanded by 630 basis points.
Capitalization and Liquidity
Update2
As of and for the three months ended June 30,
2023:
- Generated $160
million of Free Cash Flow in the second quarter, up 130%
year-over-year.
- Maintained over
$1.0 billion of excess availability under our asset backed
revolving credit facility.
- Weighted average
pre-tax interest rate, inclusive of our 3.44% floating-to-fixed
interest rate swap, was approximately 5.8%, and annual cash
interest expense based on the current debt structure and benchmark
rates was approximately $179 million.
- No debt
maturities prior to 2025.
- Maintained
leverage of 3.0x last twelve months Adjusted EBITDA from continuing
operations of $1,016 million. This leverage ratio is at the low end
of our target range of 3.0x to 3.5x, which combined with
accelerating Free Cash Flow, a flexible covenant structure, and
excess capacity in our ABL gives us ample flexibility to fund
multiple capital allocation initiatives.
- Repurchased 5.4 million shares of
Common Stock for $239 million in the second quarter 2023,
contributing to a 9.1% reduction in our economic share count over
the last twelve months.
2023 Outlook 2, 3,
4This guidance is subject to risks and uncertainties,
including those described in "Forward-Looking Statements"
below.
|
$M |
2022 ResultsFrom Continuing
Operations |
Prior 2023 Outlook |
Current 2023 Outlook |
|
Revenue |
$2,143 |
$2,350 - $2,450 |
$2,350 - $2,450 |
|
Adjusted EBITDA2,3 |
$884 |
$1,025 - $1,075 |
$1,025 - $1,075 |
|
Net CAPEX3,4 |
$367 |
$250 - $300 |
$250 - $300 |
1 - Assumes common shares outstanding as of June
30, 2023 versus common shares outstanding plus warrants outstanding
under the treasury stock method as of June 30, 2022 and the closing
stock price of $47.79 on June 30, 2023.2 - Adjusted EBITDA,
Adjusted EBITDA Margin, Free Cash Flow, Free Cash Flow Margin, Net
Debt to Adjusted EBITDA, and Return on Invested Capital are
non-GAAP financial measures. Further information and
reconciliations for these non-GAAP measures to the most directly
comparable financial measure under generally accepted accounting
principles in the US ("GAAP") are included at the end of this press
release.3 - Information reconciling forward-looking Adjusted EBITDA
and Net CAPEX to GAAP financial measures is unavailable to the
Company without unreasonable effort and therefore neither the most
comparable GAAP measures nor reconciliations to the most comparable
GAAP measures are provided.4 - Net CAPEX is a non-GAAP financial
measure. Please see the non-GAAP reconciliation tables included at
the end of this press release.5 - Free Cash Flow incorporates
results from discontinued operations. For comparability, reported
revenue is adjusted to include results from discontinued operations
to calculate Free Cash Flow Margin.6 - During the first quarter of
2023, the ground level office business within the Modular segment
was transferred to the Storage segment, and associated revenues,
expenses, and operating metrics were transferred to the Storage
segment. All periods presented have been retrospectively revised to
reflect this change within the Modular and Storage segments. See
further discussion within the Unaudited Segment Operating Data
tables included at the end of this press release.
Non-GAAP Financial MeasuresThis
press release includes non-GAAP financial measures, including
Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Free Cash
Flow Margin, Return on Invested Capital 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 26%. Net assets is total assets less goodwill
and intangible assets, net and all non-interest bearing liabilities
and is calculated as a five quarter average. Net CAPEX is defined
as purchases of rental equipment and refurbishments and purchases
of property, plant and equipment (collectively, "Total Capital
Expenditures"), less proceeds from the sale of rental equipment and
proceeds from the sale of property, plant and equipment
(collectively, "Total Proceeds"), which are all included in cash
flows from investing activities. Net Debt to Adjusted EBITDA ratio
is defined as Net Debt divided by Adjusted EBITDA. The Company
believes that Adjusted EBITDA and Adjusted EBITDA margin are useful
to investors because they (i) allow investors to compare
performance over various reporting periods on a consistent basis by
removing from operating results the impact of items that do not
reflect core operating performance; (ii) are used by our board of
directors and management to assess our performance; (iii) may,
subject to the limitations described below, enable investors to
compare the performance of the Company to its competitors; (iv)
provide additional tools for investors to use in evaluating ongoing
operating results and trends; and (v) align with definitions in our
credit agreement. The Company believes that Free Cash Flow and Free
Cash Flow Margin are useful to investors because they allow
investors to compare cash generation performance over various
reporting periods and against peers. The Company believes that
Return on Invested Capital provides information about the long-term
health and profitability of the business relative to the Company's
cost of capital. The Company believes that the presentation of Net
CAPEX provides useful information to investors regarding the net
capital invested into our rental fleet and plant, property and
equipment each year to assist in analyzing the performance of our
business. Adjusted EBITDA is not a measure of financial performance
or liquidity under GAAP and, accordingly, should not be considered
as an alternative to net income or cash flow from operating
activities as an indicator of operating performance or liquidity.
These non-GAAP measures should not be considered in isolation from,
or as an alternative to, financial measures determined in
accordance with GAAP. Other companies may calculate Adjusted EBITDA
and other non-GAAP financial measures differently, and therefore
the Company's non-GAAP financial measures may not be directly
comparable to similarly-titled measures of other companies. For
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 regarding the most comparable GAAP
financial measures and reconciling forward-looking Adjusted EBITDA
to those GAAP financial measures is unavailable to the Company
without unreasonable effort. We cannot provide the most comparable
GAAP financial measures nor reconciliations of forward-looking
Adjusted EBITDA 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.
Conference Call Information
WillScot Mobile Mini Holdings will host a
conference call and webcast to discuss its second quarter 2023
results and 2023 outlook at 10 a.m. Eastern Time on Thursday,
August 3, 2023. To access the live call by phone, use the
following
link: https://register.vevent.com/register/BId8ecf855ab1f4a428e5414ba088a5bc6.
You will be provided with dial-in details after
registering. To avoid delays, we recommend that participants dial
into the conference call 15 minutes ahead of the scheduled start
time. A live webcast will also be accessible via the "Events &
Presentations" section of the Company's investor relations website
www.willscotmobilemini.com. Choose "Events" and select the
information pertaining to the WillScot Mobile Mini Holdings Second
Quarter 2023 Conference Call. Additionally, there will be slides
accompanying the webcast. Please allow at least 15 minutes prior to
the call to register, download and install any necessary software.
For those unable to listen to the live broadcast, an audio webcast
of the call will be available for 12 months on the Company’s
investor relations website.
About WillScot Mobile Mini
WillScot Mobile Mini trades on the Nasdaq stock
exchange under the ticker symbol “WSC.” Headquartered in Phoenix,
Arizona, the Company is a leading business services provider
specializing in innovative flexible space and storage solutions.
WillScot Mobile Mini services diverse end markets across all
sectors of the economy from a network of approximately 240 branch
locations and additional drop lots throughout the United States,
Canada, and Mexico.
Forward-Looking Statements
This press release contains forward-looking
statements (including the guidance/outlook contained herein) within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and Section 21E of the Securities Exchange Act of 1934, as
amended. The words "estimates," "expects," "anticipates,"
"believes," "forecasts," "plans," "intends," "may," "will,"
"should," "shall," "outlook," "guidance," "see," "have confidence"
and variations of these words and similar expressions identify
forward-looking statements, which are generally not historical in
nature. Certain of these forward-looking statements include
statements relating to: our mergers and acquisitions pipeline,
acceleration of our run rate, acceleration toward and the timing of
our achievement of our three to five year milestones, growth and
acceleration of cash flow, driving higher returns on invested
capital, and Adjusted EBITDA margin expansion. Forward-looking
statements are subject to a number of risks, uncertainties,
assumptions and other important factors, many of which are outside
our control, which could cause actual results or outcomes to differ
materially from those discussed in the forward-looking statements.
Although the Company believes that these forward-looking statements
are based on reasonable assumptions, they are predictions and we
can give no assurance that any such forward-looking statement will
materialize. Important factors that may affect actual results or
outcomes include, among others, our ability to acquire and
integrate new assets and operations; our ability to judge the
demand outlook; our ability to achieve planned synergies related to
acquisitions; our ability to successfully execute our growth
strategy, manage growth and execute our business plan; our
estimates of the size of the markets for our products; the rate and
degree of market acceptance of our products; the success of other
competing modular space and portable storage solutions that exist
or may become available; rising costs and inflationary pressures
adversely affecting our profitability; potential litigation
involving our Company; general economic and market conditions
impacting demand for our products and services and our ability to
benefit from an inflationary environment; our ability to maintain
an effective system of internal controls; and such other risks and
uncertainties described in the periodic reports we file with the
SEC from time to time (including our Form 10-K for the year ended
December 31, 2022), which are available through the SEC’s EDGAR
system at www.sec.gov and on our website. Any forward-looking
statement speaks only at the date on which it is made, and the
Company disclaims any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Additional Information and Where to Find
It
Additional information can be found on the
company's website at www.willscotmobilemini.com.
|
Contact Information |
|
| |
|
|
Investor Inquiries: |
Media Inquiries: |
|
Nick Girardi |
Jake Saylor |
|
investors@willscotmobilemini.com |
jake.saylor@willscot.com |
WillScot Mobile Mini Holdings
Corp.Consolidated Statements of
Operations(Unaudited)
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
(in thousands, except share and per share
data) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Revenues: |
|
|
|
|
|
|
|
|
Leasing and services revenue: |
|
|
|
|
|
|
|
|
Leasing |
$ |
449,320 |
|
|
$ |
386,386 |
|
|
$ |
889,271 |
|
|
$ |
737,945 |
|
|
Delivery and installation |
|
112,754 |
|
|
|
110,841 |
|
|
|
219,384 |
|
|
|
196,380 |
|
|
Sales revenue: |
|
|
|
|
|
|
|
|
New units |
|
9,004 |
|
|
|
9,927 |
|
|
|
19,661 |
|
|
|
15,714 |
|
|
Rental units |
|
11,011 |
|
|
|
15,736 |
|
|
|
19,241 |
|
|
|
24,022 |
|
|
Total revenues |
|
582,089 |
|
|
|
522,890 |
|
|
|
1,147,557 |
|
|
|
974,061 |
|
|
Costs: |
|
|
|
|
|
|
|
|
Costs of leasing and services: |
|
|
|
|
|
|
|
|
Leasing |
|
98,556 |
|
|
|
88,111 |
|
|
|
196,071 |
|
|
|
168,445 |
|
|
Delivery and installation |
|
81,349 |
|
|
|
82,537 |
|
|
|
156,356 |
|
|
|
153,117 |
|
|
Costs of sales: |
|
|
|
|
|
|
|
|
New units |
|
4,795 |
|
|
|
5,321 |
|
|
|
11,003 |
|
|
|
9,077 |
|
|
Rental units |
|
5,067 |
|
|
|
8,478 |
|
|
|
9,521 |
|
|
|
13,370 |
|
|
Depreciation of rental equipment |
|
64,450 |
|
|
|
63,230 |
|
|
|
123,606 |
|
|
|
120,778 |
|
|
Gross profit |
|
327,872 |
|
|
|
275,213 |
|
|
|
651,000 |
|
|
|
509,274 |
|
|
Expenses: |
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
146,810 |
|
|
|
150,129 |
|
|
|
297,702 |
|
|
|
288,273 |
|
|
Other depreciation and amortization |
|
17,346 |
|
|
|
14,951 |
|
|
|
34,519 |
|
|
|
30,313 |
|
|
Currency losses (gains), net |
|
14 |
|
|
|
(173 |
) |
|
|
6,789 |
|
|
|
(36 |
) |
|
Other income, net |
|
(2,838 |
) |
|
|
(3,794 |
) |
|
|
(6,197 |
) |
|
|
(5,077 |
) |
|
Operating income |
|
166,540 |
|
|
|
114,100 |
|
|
|
318,187 |
|
|
|
195,801 |
|
|
Interest expense |
|
47,246 |
|
|
|
33,153 |
|
|
|
92,112 |
|
|
|
63,723 |
|
|
Income from continuing operations before income tax |
|
119,294 |
|
|
|
80,947 |
|
|
|
226,075 |
|
|
|
132,078 |
|
|
Income tax expense from continuing operations |
|
31,565 |
|
|
|
20,848 |
|
|
|
62,075 |
|
|
|
32,931 |
|
|
Income from continuing operations |
|
87,729 |
|
|
|
60,099 |
|
|
|
164,000 |
|
|
|
99,147 |
|
| |
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
Income from discontinued operations before income tax |
|
— |
|
|
|
17,140 |
|
|
|
4,003 |
|
|
|
32,927 |
|
|
Gain on sale of discontinued operations |
|
— |
|
|
|
— |
|
|
|
176,078 |
|
|
|
— |
|
|
Income tax expense from discontinued operations |
|
— |
|
|
|
3,863 |
|
|
|
45,468 |
|
|
|
7,527 |
|
|
Income from discontinued operations |
|
— |
|
|
|
13,277 |
|
|
|
134,613 |
|
|
|
25,400 |
|
| |
|
|
|
|
|
|
|
|
Net income |
$ |
87,729 |
|
|
$ |
73,376 |
|
|
$ |
298,613 |
|
|
$ |
124,547 |
|
| |
|
|
|
|
|
|
|
|
Earnings per share from continuing operations attributable to
WillScot Mobile Mini common shareholders: |
|
|
|
Basic |
$ |
0.44 |
|
|
$ |
0.27 |
|
|
$ |
0.80 |
|
|
$ |
0.45 |
|
|
Diluted |
$ |
0.43 |
|
|
$ |
0.26 |
|
|
$ |
0.78 |
|
|
$ |
0.44 |
|
|
Earnings per share from discontinued operations attributable to
WillScot Mobile Mini common shareholders: |
|
|
|
Basic |
$ |
— |
|
|
$ |
0.06 |
|
|
$ |
0.66 |
|
|
$ |
0.11 |
|
|
Diluted |
$ |
— |
|
|
$ |
0.06 |
|
|
$ |
0.65 |
|
|
$ |
0.11 |
|
|
Earnings per share attributable to WillScot Mobile Mini common
shareholders: |
|
|
|
|
|
Basic |
$ |
0.44 |
|
|
$ |
0.33 |
|
|
$ |
1.46 |
|
|
$ |
0.56 |
|
|
Diluted |
$ |
0.43 |
|
|
$ |
0.32 |
|
|
$ |
1.43 |
|
|
$ |
0.55 |
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
Basic |
|
200,946,619 |
|
|
|
223,376,276 |
|
|
|
204,635,764 |
|
|
|
222,196,986 |
|
|
Diluted |
|
204,326,162 |
|
|
|
227,484,012 |
|
|
|
208,233,141 |
|
|
|
226,983,150 |
|
Unaudited Segment Operating
Data
The Company operates in two reportable segments:
Modular and Storage. Modular represents the activities of the North
American modular business, excluding ground level offices, which
were transferred to the Storage segment during the first quarter of
2023. Storage represents the activities of the North American
portable storage and ground level office business. All periods
presented have been retrospectively revised to reflect this change
within the Modular and Storage segments. For the three months ended
June 30, 2022, this resulted in approximately $12.4 million of
revenue, $7.2 million of gross profit, and $5.1 million of Adjusted
EBITDA being transferred from the Modular segment to the Storage
segment. For the six months ended June 30, 2022, this resulted in
approximately $23.6 million of revenue, $13.5 million of
gross profit, and $9.4 million of Adjusted EBITDA being
transferred from the Modular segment to the Storage segment. As
part of the transfer, we adjusted average monthly rental rate for
modular units (Ground Level Offices) in the Storage segment to only
include Value-Added Products specifically applicable to Ground
Level Offices.
Comparison of Three
Months Ended June 30, 2023 and
2022
| |
Three Months Ended June 30, 2023 |
|
|
|
|
|
|
|
|
(in thousands, except for units on rent and
rates) |
Modular |
|
Storage |
|
Total |
|
Revenue |
$ |
370,675 |
|
|
$ |
211,414 |
|
|
$ |
582,089 |
|
|
Gross profit |
$ |
172,740 |
|
|
$ |
155,132 |
|
|
$ |
327,872 |
|
|
Adjusted EBITDA from continuing operations |
$ |
151,443 |
|
|
$ |
109,898 |
|
|
$ |
261,341 |
|
|
Capital expenditures for rental equipment |
$ |
50,371 |
|
|
$ |
5,210 |
|
|
$ |
55,581 |
|
|
Average modular space units on rent |
|
81,886 |
|
|
|
19,200 |
|
|
|
101,086 |
|
|
Average modular space utilization rate |
|
65.8 |
% |
|
|
62.3 |
% |
|
|
65.1 |
% |
|
Average modular space monthly rental rate |
$ |
1,102 |
|
|
$ |
835 |
|
|
$ |
1,051 |
|
|
Average portable storage units on rent |
|
457 |
|
|
|
153,011 |
|
|
|
153,468 |
|
|
Average portable storage utilization rate |
|
58.0 |
% |
|
|
73.2 |
% |
|
|
73.1 |
% |
|
Average portable storage monthly rental rate |
$ |
238 |
|
|
$ |
226 |
|
|
$ |
226 |
|
| |
Three Months Ended June 30, 2022 |
|
|
|
|
|
|
|
|
(in thousands, except for units on rent and
rates) |
Modular |
|
Storage |
|
Total |
|
Revenue |
$ |
335,254 |
|
|
$ |
187,636 |
|
|
$ |
522,890 |
|
|
Gross profit |
$ |
146,611 |
|
|
$ |
128,602 |
|
|
$ |
275,213 |
|
|
Adjusted EBITDA from continuing operations |
$ |
122,824 |
|
|
$ |
85,819 |
|
|
$ |
208,643 |
|
|
Capital expenditures for rental equipment |
$ |
82,482 |
|
|
$ |
34,282 |
|
|
$ |
116,764 |
|
|
Average modular space units on rent |
|
82,383 |
|
|
|
22,232 |
|
|
|
104,615 |
|
|
Average modular space utilization rate |
|
67.7 |
% |
|
|
72.7 |
% |
|
|
68.7 |
% |
|
Average modular space monthly rental rate |
$ |
939 |
|
|
$ |
668 |
|
|
$ |
882 |
|
|
Average portable storage units on rent |
|
476 |
|
|
|
163,293 |
|
|
|
163,769 |
|
|
Average portable storage utilization rate |
|
53.7 |
% |
|
|
86.1 |
% |
|
|
86.0 |
% |
|
Average portable storage monthly rental rate |
$ |
211 |
|
|
$ |
178 |
|
|
$ |
178 |
|
Comparison of Six
Months Ended June 30, 2023 and
2022
| |
Six Months Ended June 30, 2023 |
|
|
|
|
|
|
|
|
(in thousands, except for units on rent and
rates) |
Modular |
|
Storage |
|
Total |
|
Revenue |
$ |
720,345 |
|
|
$ |
427,212 |
|
|
$ |
1,147,557 |
|
|
Gross profit |
$ |
338,075 |
|
|
$ |
312,925 |
|
|
$ |
651,000 |
|
|
Adjusted EBITDA from continuing operations |
$ |
288,407 |
|
|
$ |
219,776 |
|
|
$ |
508,183 |
|
|
Capital expenditures for rental equipment |
$ |
89,783 |
|
|
$ |
12,555 |
|
|
$ |
102,338 |
|
|
Average modular space units on rent |
|
81,894 |
|
|
|
19,717 |
|
|
|
101,611 |
|
|
Average modular space utilization rate |
|
66.0 |
% |
|
|
63.8 |
% |
|
|
65.6 |
% |
|
Average modular space monthly rental rate |
$ |
1,074 |
|
|
$ |
796 |
|
|
$ |
1,020 |
|
|
Average portable storage units on rent |
|
479 |
|
|
|
158,801 |
|
|
|
159,280 |
|
|
Average portable storage utilization rate |
|
60.1 |
% |
|
|
76.0 |
% |
|
|
75.9 |
% |
|
Average portable storage monthly rental rate |
$ |
227 |
|
|
$ |
221 |
|
|
$ |
221 |
|
| |
Six Months Ended June 30, 2022 |
|
|
|
|
|
|
|
|
(in thousands, except for units on rent and
rates) |
Modular |
|
Storage |
|
Total |
|
Revenue |
$ |
623,801 |
|
|
$ |
350,260 |
|
|
$ |
974,061 |
|
|
Gross profit |
$ |
269,209 |
|
|
$ |
240,065 |
|
|
$ |
509,274 |
|
|
Adjusted EBITDA from continuing operations |
$ |
222,410 |
|
|
$ |
154,006 |
|
|
$ |
376,416 |
|
|
Capital expenditures for rental equipment |
$ |
140,059 |
|
|
$ |
54,453 |
|
|
$ |
194,512 |
|
|
Average modular space units on rent |
|
81,533 |
|
|
|
22,558 |
|
|
|
104,091 |
|
|
Average modular space utilization rate |
|
67.3 |
% |
|
|
73.8 |
% |
|
|
68.6 |
% |
|
Average modular space monthly rental rate |
$ |
917 |
|
|
$ |
626 |
|
|
$ |
854 |
|
|
Average portable storage units on rent |
|
469 |
|
|
|
157,809 |
|
|
|
158,278 |
|
|
Average portable storage utilization rate |
|
53.1 |
% |
|
|
84.7 |
% |
|
|
84.5 |
% |
|
Average portable storage monthly rental rate |
$ |
186 |
|
|
$ |
173 |
|
|
$ |
173 |
|
WillScot Mobile Mini Holdings
Corp.Consolidated Balance Sheets
|
(in thousands, except share data) |
June 30, 2023 (unaudited) |
|
December 31, 2022 |
|
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
7,660 |
|
|
$ |
7,390 |
|
|
Trade receivables, net of allowances for credit losses at June 30,
2023 and December 31, 2022 of $68,096 and $57,048,
respectively |
|
441,643 |
|
|
|
409,766 |
|
|
Inventories |
|
44,360 |
|
|
|
41,030 |
|
|
Prepaid expenses and other current assets |
|
42,868 |
|
|
|
31,635 |
|
|
Assets held for sale - current |
|
8,924 |
|
|
|
31,220 |
|
|
Total current assets |
|
545,455 |
|
|
|
521,041 |
|
|
Rental equipment, net |
|
3,196,518 |
|
|
|
3,077,287 |
|
|
Property, plant and equipment, net |
|
315,444 |
|
|
|
304,659 |
|
|
Operating lease assets |
|
234,468 |
|
|
|
219,405 |
|
|
Goodwill |
|
1,012,135 |
|
|
|
1,011,429 |
|
|
Intangible assets, net |
|
407,250 |
|
|
|
419,125 |
|
|
Other non-current assets |
|
7,230 |
|
|
|
6,683 |
|
|
Assets held for sale - non-current |
|
— |
|
|
|
268,022 |
|
|
Total long-term assets |
|
5,173,045 |
|
|
|
5,306,610 |
|
|
Total assets |
$ |
5,718,500 |
|
|
$ |
5,827,651 |
|
|
Liabilities and equity |
|
|
|
|
Accounts payable |
$ |
91,783 |
|
|
$ |
109,349 |
|
|
Accrued expenses |
|
120,301 |
|
|
|
109,542 |
|
|
Accrued employee benefits |
|
43,647 |
|
|
|
56,340 |
|
|
Deferred revenue and customer deposits |
|
209,726 |
|
|
|
203,793 |
|
|
Operating lease liabilities - current |
|
54,110 |
|
|
|
50,499 |
|
|
Current portion of long-term debt |
|
13,952 |
|
|
|
13,324 |
|
|
Liabilities held for sale - current |
|
— |
|
|
|
19,095 |
|
|
Total current liabilities |
|
533,519 |
|
|
|
561,942 |
|
|
Long-term debt |
|
3,035,521 |
|
|
|
3,063,042 |
|
|
Deferred tax liabilities |
|
506,425 |
|
|
|
401,453 |
|
|
Operating lease liabilities - non-current |
|
181,319 |
|
|
|
169,618 |
|
|
Other non-current liabilities |
|
23,171 |
|
|
|
18,537 |
|
|
Liabilities held for sale - non-current |
|
— |
|
|
|
47,759 |
|
|
Long-term liabilities |
|
3,746,436 |
|
|
|
3,700,409 |
|
|
Total liabilities |
|
4,279,955 |
|
|
|
4,262,351 |
|
|
Preferred Stock: $0.0001 par, 1,000,000 shares authorized and zero
shares issued and outstanding at June 30, 2023 and December 31,
2022 |
|
— |
|
|
|
— |
|
|
Common Stock: $0.0001 par, 500,000,000 shares authorized and
198,375,893 and 207,951,682 shares issued and outstanding at June
30, 2023 and December 31, 2022, respectively |
|
20 |
|
|
|
21 |
|
|
Additional paid-in-capital |
|
2,435,571 |
|
|
|
2,886,951 |
|
|
Accumulated other comprehensive loss |
|
(44,109 |
) |
|
|
(70,122 |
) |
|
Accumulated deficit |
|
(952,937 |
) |
|
|
(1,251,550 |
) |
|
Total shareholders' equity |
|
1,438,545 |
|
|
|
1,565,300 |
|
|
Total liabilities and shareholders' equity |
$ |
5,718,500 |
|
|
$ |
5,827,651 |
|
Reconciliation of Non-GAAP Financial
Measures
In addition to using GAAP financial
measurements, we use certain non-GAAP financial information that we
believe is important for purposes of comparison to prior periods
and development of future projections and earnings growth
prospects. This information is also used by management to measure
the profitability of our ongoing operations and analyze our
business performance and trends.
We evaluate business segment performance on
Adjusted EBITDA, a non-GAAP measure that excludes certain items as
described below. We believe that evaluating segment performance
excluding such items is meaningful because it provides insight with
respect to intrinsic operating results of the Company.
We also regularly evaluate gross profit by
segment to assist in the assessment of the operational performance
of each operating segment. We consider Adjusted EBITDA to be the
more important metric because it more fully captures the business
performance of the segments, inclusive of indirect costs.
We also evaluate Free Cash Flow, a non-GAAP
measure that provides useful information concerning cash flow
available to fund our capital allocation alternatives.
Adjusted EBITDA From Continuing
Operations
Adjusted EBITDA is a non-GAAP measure defined as
net income (loss) before income tax expense (benefit), net interest
(income) expense, depreciation and amortization adjusted for
certain items not related to our core business operations,
including net currency (gains) losses, goodwill and other
impairment charges, restructuring costs, transaction 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.
- Currency (gains)
losses, net: on monetary assets and liabilities denominated in
foreign currencies other than the subsidiaries’ functional
currency.
- Goodwill and
other impairment charges related to non-cash costs associated with
impairment charges to goodwill, other intangibles, rental fleet and
property, plant and equipment.
- Restructuring
costs, lease impairment expense, and other related charges
associated with restructuring plans designed to streamline
operations and reduce costs including employee termination
costs.
- Transaction
costs including legal and professional fees and other transaction
specific related costs.
- Costs to
integrate acquired companies, including outside professional fees,
non-capitalized costs associated with system integrations,
non-lease branch and fleet relocation expenses, employee training
costs, and other costs required to realize cost or revenue
synergies.
- Non-cash charges
for stock compensation plans.
- Gains and losses
resulting from changes in fair value and extinguishment of common
stock warrant liabilities.
- Other expense,
including consulting expenses related to certain one-time projects,
financing costs not classified as interest expense, and gains and
losses on disposals of property, plant, and equipment.
Adjusted EBITDA has limitations as an analytical
tool, and you should not consider the measure in isolation or as a
substitute for net income (loss), cash flow from operations or
other methods of analyzing the Company’s results as reported under
US GAAP. Some of these limitations are:
- Adjusted EBITDA
does not reflect changes in, or cash requirements for our working
capital needs;
- Adjusted EBITDA
does not reflect our interest expense, or the cash requirements
necessary to service interest or principal payments, on our
indebtedness;
- Adjusted EBITDA
does not reflect our tax expense or the cash requirements to pay
our taxes;
- Adjusted EBITDA
does not reflect historical cash expenditures or future
requirements for capital expenditures or contractual
commitments;
- Adjusted EBITDA
does not reflect the impact on earnings or changes resulting from
matters that we consider not to be indicative of our future
operations;
- although
depreciation and amortization are non-cash charges, the assets
being depreciated and amortized will often have to be replaced in
the future and Adjusted EBITDA does not reflect any cash
requirements for such replacements; and
- other companies
in our industry may calculate Adjusted EBITDA differently, limiting
its usefulness as a comparative measure.
Because of these limitations, Adjusted EBITDA
should not be considered as discretionary cash available to
reinvest in the growth of our business or as measures of cash that
will be available to meet our obligations.
The following table provides unaudited
reconciliations of Income from continuing operations to Adjusted
EBITDA from continuing operations:
| |
|
|
|
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
(in thousands) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Income from continuing operations |
$ |
87,729 |
|
$ |
60,099 |
|
|
$ |
164,000 |
|
$ |
99,147 |
|
|
Income tax expense from continuing operations |
|
31,565 |
|
|
20,848 |
|
|
|
62,075 |
|
|
32,931 |
|
|
Interest expense |
|
47,246 |
|
|
33,153 |
|
|
|
92,112 |
|
|
63,723 |
|
|
Depreciation and amortization |
|
81,796 |
|
|
78,181 |
|
|
|
158,125 |
|
|
151,091 |
|
|
Currency losses (gains), net |
|
14 |
|
|
(173 |
) |
|
|
6,789 |
|
|
(36 |
) |
|
Restructuring costs, lease impairment expense and other related
charges (income) |
|
— |
|
|
(95 |
) |
|
|
22 |
|
|
168 |
|
|
Transaction costs |
|
— |
|
|
22 |
|
|
|
— |
|
|
35 |
|
|
Integration costs |
|
2,247 |
|
|
5,193 |
|
|
|
6,120 |
|
|
9,280 |
|
|
Stock compensation expense |
|
9,348 |
|
|
9,128 |
|
|
|
17,498 |
|
|
15,401 |
|
|
Other |
|
1,396 |
|
|
2,287 |
|
|
|
1,442 |
|
|
4,676 |
|
|
Adjusted EBITDA from continuing operations |
$ |
261,341 |
|
$ |
208,643 |
|
|
$ |
508,183 |
|
$ |
376,416 |
|
The following tables provide unaudited
reconciliations of Income before income tax to Adjusted EBITDA for
the ground level office segment adjustment:
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
(in thousands) |
2022 |
|
2022 |
|
Income before income tax |
$ |
4,147 |
|
$ |
7,600 |
|
Depreciation |
|
910 |
|
|
1,819 |
|
Adjusted EBITDA |
$ |
5,057 |
|
$ |
9,419 |
| |
Twelve Months Ended December 31, |
|
(in thousands) |
2022 |
|
Income before income tax |
$ |
17,142 |
|
Depreciation |
|
3,624 |
|
Adjusted EBITDA |
$ |
20,766 |
Adjusted EBITDA Margin From Continuing
OperationsWe define Adjusted EBITDA Margin as Adjusted
EBITDA divided by revenue. Management believes that the
presentation of Adjusted EBITDA Margin provides useful information
to investors regarding the performance of our business. The
following table provides unaudited reconciliations of Adjusted
EBITDA Margin:
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
(in thousands) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Adjusted EBITDA from continuing operations (A) |
$ |
261,341 |
|
|
$ |
208,643 |
|
|
$ |
508,183 |
|
|
$ |
376,416 |
|
|
Revenue (B) |
$ |
582,089 |
|
|
$ |
522,890 |
|
|
$ |
1,147,557 |
|
|
$ |
974,061 |
|
|
Adjusted EBITDA Margin from Continuing Operations (A/B) |
|
44.9 |
% |
|
|
39.9 |
% |
|
|
44.3 |
% |
|
|
38.6 |
% |
|
Income from continuing operations (C) |
$ |
87,729 |
|
|
$ |
60,099 |
|
|
$ |
164,000 |
|
|
$ |
99,147 |
|
|
Income from Continuing Operations Margin (C/B) |
|
15.1 |
% |
|
|
11.5 |
% |
|
|
14.3 |
% |
|
|
10.2 |
% |
Net Debt to Adjusted EBITDA From
Continuing Operations ratioNet Debt to Adjusted EBITDA
ratio is defined as Net Debt divided by Adjusted EBITDA from
continuing operations from the last twelve months. We define Net
Debt as total debt from continuing operations net of total cash and
cash equivalents from continuing operations. Management believes
that the presentation of Net Debt to Adjusted EBITDA ratio provides
useful information to investors regarding the performance of our
business. The following table provides an unaudited reconciliation
of Net Debt to Adjusted EBITDA ratio:
|
(in thousands) |
June 30, 2023 |
|
Long-term debt |
$ |
3,035,521 |
|
Current portion of long-term debt |
|
13,952 |
|
Total debt |
|
3,049,473 |
|
Cash and cash equivalents |
|
7,660 |
|
Net debt (A) |
$ |
3,041,813 |
| |
|
|
Adjusted EBITDA from continuing operations from the three months
ended September 30, 2022 |
$ |
239,368 |
|
Adjusted EBITDA from continuing operations from the three months
ended December 31, 2022 |
|
268,090 |
|
Adjusted EBITDA from continuing operations from the three months
ended March 31, 2023 |
|
246,842 |
|
Adjusted EBITDA from continuing operations from the three months
ended June 30, 2023 |
|
261,341 |
|
Adjusted EBITDA from continuing operations from the last twelve
months (B) |
$ |
1,015,641 |
|
Net Debt to Adjusted EBITDA ratio (A/B) |
|
3.0 |
Free Cash Flow and Free Cash Flow
Margin
Free Cash Flow is a non-GAAP measure. We define
Free Cash Flow as net cash provided by operating activities, less
purchases of, and proceeds from, rental equipment and property,
plant and equipment, which are all included in cash flows from
investing activities. Free Cash Flow Margin is defined as Free Cash
Flow divided by Total Revenue including discontinued operations.
Management believes that the presentation of Free Cash Flow and
Free Cash Flow Margin provides useful additional information
concerning cash flow available to fund our capital allocation
alternatives. Free Cash Flow as presented includes amounts for the
former Tank and Pump segment through September 30, 2022 and the
former UK Storage Solutions segment through January 31, 2023.
The following table provides unaudited
reconciliations of Free Cash Flow and Free Cash Flow Margin:
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
(in thousands) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Net cash provided by operating activities |
$ |
202,155 |
|
|
$ |
188,326 |
|
|
$ |
350,920 |
|
|
$ |
333,853 |
|
|
Purchase of rental equipment and refurbishments |
|
(55,581 |
) |
|
|
(130,153 |
) |
|
|
(102,709 |
) |
|
|
(225,389 |
) |
|
Proceeds from sale of rental equipment |
|
17,473 |
|
|
|
20,526 |
|
|
|
25,254 |
|
|
|
35,080 |
|
|
Purchase of property, plant and equipment |
|
(4,453 |
) |
|
|
(9,772 |
) |
|
|
(11,189 |
) |
|
|
(20,253 |
) |
|
Proceeds from the sale of property, plant and equipment |
|
7 |
|
|
|
491 |
|
|
|
265 |
|
|
|
751 |
|
|
Free Cash Flow (A) |
$ |
159,601 |
|
|
$ |
69,418 |
|
|
$ |
262,541 |
|
|
$ |
124,042 |
|
| |
|
|
|
|
|
|
|
|
Revenue from continuing operations (B) |
$ |
582,089 |
|
|
$ |
522,890 |
|
|
$ |
1,147,557 |
|
|
$ |
974,061 |
|
|
Revenue from discontinued operations |
|
— |
|
|
|
58,751 |
|
|
|
8,694 |
|
|
|
116,474 |
|
|
Total Revenue including discontinued operations (C) |
$ |
582,089 |
|
|
$ |
581,641 |
|
|
$ |
1,156,251 |
|
|
$ |
1,090,535 |
|
|
Free Cash Flow Margin (A/C) |
|
27.4 |
% |
|
|
11.9 |
% |
|
|
22.7 |
% |
|
|
11.4 |
% |
| |
|
|
|
|
|
|
|
|
Net cash provided by operating activities (D) |
$ |
202,155 |
|
|
$ |
188,326 |
|
|
$ |
350,920 |
|
|
$ |
333,853 |
|
|
Net cash provided by operating activities margin (D/C) |
|
34.7 |
% |
|
|
32.4 |
% |
|
|
30.3 |
% |
|
|
30.6 |
% |
Net CAPEXWe define Net CAPEX as
purchases of rental equipment and refurbishments and purchases of
property, plant and equipment (collectively, "Total Capital
Expenditures"), less proceeds from the sale of rental equipment and
proceeds from the sale of property, plant and equipment
(collectively, "Total Proceeds"), which are all included in cash
flows from investing activities. Management believes that the
presentation of Net CAPEX provides useful information regarding the
net capital invested in our rental fleet and property, plant and
equipment each year to assist in analyzing the performance of our
business. As presented below, Net CAPEX includes amounts for the
former Tank and Pump segment through September 30, 2022 and the
former UK Storage Solutions segment through January 31, 2023.
The following table provides unaudited
reconciliations of Net CAPEX:
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
(in thousands) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Total purchases of rental equipment and refurbishments |
$ |
(55,581 |
) |
|
$ |
(130,153 |
) |
|
$ |
(102,709 |
) |
|
$ |
(225,389 |
) |
|
Total proceeds from sale of rental equipment |
|
17,473 |
|
|
|
20,526 |
|
|
|
25,254 |
|
|
|
35,080 |
|
|
Net CAPEX for Rental Equipment |
|
(38,108 |
) |
|
|
(109,627 |
) |
|
|
(77,455 |
) |
|
|
(190,309 |
) |
|
Purchase of property, plant and equipment |
|
(4,453 |
) |
|
|
(9,772 |
) |
|
|
(11,189 |
) |
|
|
(20,253 |
) |
|
Proceeds from sale of property, plant and equipment |
|
7 |
|
|
|
491 |
|
|
|
265 |
|
|
|
751 |
|
|
Net CAPEX including discontinued operations |
|
(42,554 |
) |
|
|
(118,908 |
) |
|
|
(88,379 |
) |
|
|
(209,811 |
) |
|
UK Storage Solutions Net CAPEX |
|
— |
|
|
|
(7,601 |
) |
|
|
87 |
|
|
|
(18,952 |
) |
|
Tank and Pump Net CAPEX |
|
— |
|
|
|
(5,762 |
) |
|
|
— |
|
|
|
(13,503 |
) |
|
Net CAPEX from continuing operations |
$ |
(42,554 |
) |
|
$ |
(105,545 |
) |
|
$ |
(88,466 |
) |
|
$ |
(177,356 |
) |
Return on Invested Capital
Return on Invested Capital is defined as
adjusted earnings before interest and amortization divided by net
assets. Adjusted earnings before interest and amortization is the
sum of income (loss) before income tax expense, net interest
(income) expense, amortization adjusted for non-cash items
considered non-core to business operations including net currency
(gains) losses, goodwill and other impairment charges,
restructuring costs, costs to integrate acquired companies,
non-cash charges for stock compensation plans, gains and losses
resulting from changes in fair value and extinguishment of common
stock warrant liabilities, and other discrete expenses, reduced by
estimated taxes. Given we are not a significant US taxpayer due to
our current tax attributes, we include estimated taxes at our
current statutory tax rate of approximately 26% effective in 2023.
Net assets is total assets less goodwill, and intangible assets,
net and all non-interest bearing liabilities. Denominator is
calculated as a four quarter average for annual metrics and two
quarter average for quarterly metrics.
The following table provides unaudited
reconciliations of Return on Invested Capital. Average Invested
Capital and Adjusted EBITDA related to our former Tank and Pump
segment and former UK Storage Solutions segment have been excluded
prospectively from July 1, 2022 and January 1, 2023, respectively,
and prior periods have not been adjusted.
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
(in thousands) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Total Assets |
$ |
5,723,689 |
|
|
$ |
5,978,808 |
|
|
$ |
5,723,689 |
|
|
$ |
5,978,808 |
|
|
Goodwill |
|
(1,012,135 |
) |
|
|
(1,171,725 |
) |
|
|
(1,012,135 |
) |
|
|
(1,171,725 |
) |
|
Intangible assets, net |
|
(407,250 |
) |
|
|
(446,578 |
) |
|
|
(407,250 |
) |
|
|
(446,578 |
) |
|
Total Liabilities |
|
(4,272,873 |
) |
|
|
(4,204,858 |
) |
|
|
(4,272,873 |
) |
|
|
(4,204,858 |
) |
|
Long Term Debt |
|
3,035,521 |
|
|
|
3,017,678 |
|
|
|
3,035,521 |
|
|
|
3,017,678 |
|
|
Net Assets excluding interest bearing debt and goodwill and
intangibles |
$ |
3,066,953 |
|
|
$ |
3,173,325 |
|
|
$ |
3,066,953 |
|
|
$ |
3,173,325 |
|
|
Average Invested Capital (A) |
$ |
3,041,315 |
|
|
$ |
3,149,640 |
|
|
$ |
3,093,472 |
|
|
$ |
3,116,959 |
|
| |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
261,340 |
|
|
$ |
233,335 |
|
|
$ |
508,182 |
|
|
$ |
425,158 |
|
|
Depreciation |
|
(75,858 |
) |
|
|
(79,615 |
) |
|
|
(146,250 |
) |
|
|
(154,793 |
) |
|
Adjusted EBITA (B) |
$ |
185,482 |
|
|
$ |
153,720 |
|
|
$ |
361,932 |
|
|
$ |
270,364 |
|
| |
|
|
|
|
|
|
|
|
Statutory Tax Rate (C) |
|
26 |
% |
|
|
25 |
% |
|
|
26 |
% |
|
|
25 |
% |
|
Estimated Tax (B*C) |
$ |
48,225 |
|
|
$ |
38,430 |
|
|
$ |
94,102 |
|
|
$ |
67,591 |
|
|
Adjusted earnings before interest and amortization (D) |
$ |
137,257 |
|
|
$ |
115,290 |
|
|
$ |
267,829 |
|
|
$ |
202,773 |
|
|
ROIC (D/A), annualized |
|
18.1 |
% |
|
|
14.6 |
% |
|
|
17.3 |
% |
|
|
13.0 |
% |
| |
|
|
|
|
|
|
|
|
Operating income (E) |
$ |
166,539 |
|
|
$ |
131,661 |
|
|
$ |
318,184 |
|
|
$ |
229,570 |
|
|
Total Assets (F) |
$ |
5,723,689 |
|
|
$ |
5,978,808 |
|
|
$ |
5,723,689 |
|
|
$ |
5,978,808 |
|
|
Operating income / Total Assets (E/F), annualized |
|
11.8 |
% |
|
|
8.9 |
% |
|
|
11.1 |
% |
|
|
7.8 |
% |
Willscot (LSE:0A1N)
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Willscot (LSE:0A1N)
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