U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

Form 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 1-12804

(Exact name of registrant as specific in its charter)

Delaware		86-0748362
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

7420 S. Kyrene Road, Suite 101
Tempe, Arizona 85283
(Address of principal executive offices)

(480) 894-6311
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ     No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o     No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

     Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Securities Exchange Act of 1934) Yes o     No þ

     At October 30, 2009, there were outstanding 35,517,552 shares of the issuer’s common stock.

 

 

MOBILE MINI, INC.
INDEX TO FORM 10-Q FILING
FOR THE QUARTER ENDED SEPTEMBER 30, 2009

TABLE OF CONTENTS

				PAGE
				NUMBER
PART I.
FINANCIAL INFORMATION
Item 1.		Consolidated Financial Statements			3
		Condensed Consolidated Balance Sheets December 31, 2008 and September 30, 2009 (unaudited)			3
		Condensed Consolidated Statements of Income (unaudited) Three Months Ended September 30, 2008 and September 30, 2009			4
		Nine Months Ended September 30, 2008 and September 30, 2009			5
		Condensed Consolidated Statements of Cash Flows (unaudited) Nine Months Ended September 30, 2008 and September 30, 2009			6
		Notes to Condensed Consolidated Financial Statements (unaudited)			7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			27
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			44
Item 4.		Controls and Procedures			44
PART II.
OTHER INFORMATION
Item 1A.		Risk Factors			45
Item 6.		Exhibits			45
SIGNATURES
EX-31.1
EX-31.2
EX-32.1

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

MOBILE MINI, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except per share data)

		December 31, 2008				September 30, 2009
		(See Note A)				(unaudited)
ASSETS
Cash and cash equivalents		$	3,184			$	1,741
Receivables, net of allowance for doubtful accounts of $7,193 and $4,375 at December 31, 2008 and September 30, 2009, respectively			61,424				42,214
Inventories			26,577				23,148
Lease fleet, net			1,078,156				1,060,668
Property, plant and equipment, net			88,509				85,366
Deposits and prepaid expenses			13,287				10,209
Other assets and intangibles, net			35,063				28,693
Goodwill			492,657				513,144
Total assets		$	1,798,857			$	1,765,183
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts payable		$	21,433			$	13,855
Accrued liabilities			86,214				69,463
Lines of credit			554,532				493,306
Notes payable			1,380				186
Obligations under capital leases			5,497				4,415
Senior notes, net			345,797				346,349
Deferred income taxes			134,786				150,160
Total liabilities			1,149,639				1,077,734
Commitments and contingencies
Convertible preferred stock; $.01 par value, 20,000 shares authorized, 8,556 issued and outstanding at December 31, 2008 and September 30, 2009, respectively, stated at liquidity preference values			153,990				153,990
Stockholders’ equity:
Common stock $.01 par value: 95,000 shares authorized, 37,489 issued and 35,314 outstanding at December 31, 2008 and 37,693 issued and 35,518 outstanding at September 30, 2009, respectively			375				377
Additional paid-in capital			328,696				334,671
Retained earnings			242,935				264,749
Accumulated other comprehensive loss			(37,478	)			(27,038	)
Treasury stock, at cost, 2,175 shares			(39,300	)			(39,300	)
Total stockholders’ equity			495,228				533,459
Total liabilities and stockholders’ equity		$	1,798,857			$	1,765,183

See accompanying notes to the condensed consolidated financial statements.

MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(unaudited)

		Three Months Ended September 30,
		2008				2009
Revenues:
Leasing		$	119,323			$	82,098
Sales			12,528				9,493
Other			901				495
Total revenues			132,752				92,086
Costs and expenses:
Cost of sales			8,571				6,220
Leasing, selling and general expenses			68,466				47,355
Integration, merger and restructuring expenses			6,059				1,532
Depreciation and amortization			9,705				9,227
Total costs and expenses			92,801				64,334
Income from operations			39,951				27,752
Other income (expense):
Interest income			7				23
Interest expense			(18,022	)			(14,595	)
Foreign currency exchange loss			(45	)			(13	)
Income before provision for income taxes			21,891				13,167
Provision for income taxes			8,615				5,047
Net income			13,276				8,120
Earnings allocable to preferred stock			(2,650	)			(1,615	)
Net income available to common stockholders		$	10,626			$	6,505
Earnings per share:
Basic		$	0.31			$	0.19
Diluted		$	0.31			$	0.19
Weighted average number of common and common share equivalents outstanding:
Basic			34,174				34,464
Diluted			43,257				43,416

See accompanying notes to the condensed consolidated financial statements.

MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(unaudited)

		Nine Months Ended September 30,
		2008				2009
Revenues:
Leasing		$	262,208			$	256,011
Sales			28,451				29,411
Other			1,719				1,752
Total revenues			292,378				287,174
Costs and expenses:
Cost of sales			19,562				19,709
Leasing, selling and general expenses			155,732				148,002
Integration, merger and restructuring expenses			17,668				9,375
Depreciation and amortization			21,121				29,914
Total costs and expenses			214,083				207,000
Income from operations			78,295				80,174
Other income (expense):
Interest income			69				29
Interest expense			(30,586	)			(44,802	)
Foreign currency exchange loss			(53	)			(88	)
Income before provision for income taxes			47,725				35,313
Provision for income taxes			18,930				13,500
Net income			28,795				21,813
Earnings allocable to preferred stock			(2,690	)			(4,344	)
Net income available to common stockholders		$	26,105			$	17,469
Earnings per share:
Basic		$	0.77			$	0.51
Diluted		$	0.77			$	0.51
Weighted average number of common and common share equivalents outstanding:
Basic			34,124				34,400
Diluted			37,512				43,171

See accompanying notes to the condensed consolidated financial statements.

MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)

		Nine Months Ended September 30,
		2008				2009
Cash Flows From Operating Activities:
Net income		$	28,795			$	21,813
Adjustments to reconcile income to net cash provided by operating activities:
Provision for doubtful accounts			3,484				1,840
Provision for restructuring charge			—				(102	)
Amortization of deferred financing costs			1,762				3,892
Share-based compensation expense			3,905				5,106
Depreciation and amortization			21,121				29,914
Gain on sale of lease fleet units			(6,095	)			(8,805	)
Loss on disposal of property, plant and equipment			466				—
Deferred income taxes			18,854				12,872
Foreign currency transaction loss			53				88
Changes in certain assets and liabilities, net of effect of businesses acquired:
Receivables			(5,831	)			18,053
Inventories			(485	)			2,788
Deposits and prepaid expenses			1,237				3,123
Other assets and intangibles			(136	)			(669	)
Accounts payable			(11,978	)			(6,438	)
Accrued liabilities			9,434				(14,850	)
Net cash provided by operating activities			64,586				68,625
Cash Flows From Investing Activities:
Cash paid for businesses acquired			(24,209	)			—
Additions to lease fleet, excluding acquisitions			(56,693	)			(16,522	)
Proceeds from sale of lease fleet units			17,667				25,431
Additions to property, plant and equipment			(11,042	)			(8,135	)
Proceeds from sale of property, plant and equipment			322				821
Other			—				112
Net cash (used in) provided by investing activities			(73,955	)			1,707
Cash Flows From Financing Activities:
Net borrowings (repayments) under lines of credit			135,040				(61,226	)
Deferred financing costs			(14,833	)			—
Principal payments on notes payable			(113,188	)			(1,202	)
Principal payments on capital lease obligations			(350	)			(1,082	)
Issuance of common stock, net			1,466				603
Net cash provided by (used in) financing activities			8,115				(62,907	)
Effect of exchange rate changes on cash			2,403				(8,868	)
Net increase (decrease) in cash			1,149				(1,443	)
Cash at beginning of period			3,703				3,184
Cash at end of period		$	4,852			$	1,741
Supplemental Disclosure of Cash Flow Information:
Interest rate swap changes in fair value charged (credited) to equity		$	850			$	(1,509	)
Preferred shares issued in business combination		$	197			$	—

See accompanying notes to the condensed consolidated financial statements.

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

NOTE A — Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles applicable to interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management of Mobile Mini, Inc. (Mobile Mini or the Company), all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for all periods presented have been made. All significant inter-company balances and transactions have been eliminated.

The local currency of the Company’s foreign operations is converted to U.S. currency for the Company’s condensed consolidated financial statements for each period being presented and the Company is subject to foreign exchange rate fluctuations in connection with the Company’s European and Canadian operations.

The condensed consolidated balance sheet at December 31, 2008, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

The results of operations for the nine month period ended September 30, 2009, are not necessarily indicative of the operating results that may be expected for the entire year ending December 31, 2009. Historically, Mobile Mini experiences some seasonality each year which has caused lower utilization rates for the Company’s lease fleet and a marginal decrease in cash flow during the first half of the year. These condensed consolidated financial statements should be read in conjunction with the Company’s December 31, 2008, consolidated financial statements and accompanying notes thereto, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 2, 2009.

Mobile Mini has evaluated subsequent events through November 9, 2009, the day it filed its report on Form 10-Q with the SEC for the quarter ended September 30, 2009.

NOTE B — Acquisition of Mobile Storage Group

On June 27, 2008, the Company acquired Mobile Storage Group, Inc. (MSG) and its subsidiaries (the Merger). The discussion of the Company’s business, financial condition and results of operations includes the results of the combined operations with MSG since June 27, 2008.

The fair value of the assets acquired and liabilities assumed have been adjusted in 2009 as follows in thousands:

Receivables		$	(619	)
Inventories			(184	)
Lease fleet, net			(13,100	)
Property, plant and equipment, net			(2,388	)
Deposits, prepaid expenses and other assets			(65	)
Liabilities			1,590
		$	(14,766	)

NOTE C — Recent Accounting Pronouncements

Accounting Standards Codification Effective July 1, 2009, the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) became the single official source of authoritative, nongovernmental generally accepted accounting principles (GAAP) in the United States. The historical GAAP hierarchy was eliminated and the ASC became the only level of authoritative GAAP, other than guidance issued by the Securities and Exchange Commission. The codification was effective for

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

interim and annual reporting periods ending after September 15, 2009, except for certain nonpublic nongovernmental entities. The Company’s accounting policies were not affected by the conversion to ASC.

Fair Value Measurements. In September 2006, the FASB issued guidance which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. In February 2008, the FASB issued additional guidance which deferred the effective date for the Company to January 1, 2009 for all nonfinancial assets and liabilities, except for those that are recognized or disclosed at fair value on a recurring basis (that is, at least annually). The Company adopted the deferred provisions of this guidance on January 1, 2009. The adoption of these provisions did not have a material effect on the Company’s consolidated financial statements.

Interim Disclosures about Fair Value. In April 2009, the FASB issued accounting guidance that requires disclosures by publicly traded companies about the fair value of financial instruments for interim periods as well as in annual financial statements. This guidance is effective for interim reporting periods ending after June 15, 2009, and was early adopted by the Company for the quarter ended March 31, 2009, and had no impact on the Company’s consolidated balance sheets or statements of income or cash flows.

Business Combinations. On January 1, 2009, the Company adopted new accounting guidance for business combinations as issued by the FASB. The new accounting guidance establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial statements the identifiable assets acquired, liabilities assumed, and any noncontrolling interests in the acquiree, as well as the goodwill acquired. Significant changes from previous guidance resulting from this new guidance include the expansion of the definitions of a “business” and a “business combination.” For all business combinations (whether partial, full or step acquisitions), the acquirer will record 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration will be recognized at its fair value on the acquisition date and; for certain arrangements, changes in fair value will be recognized in earnings until settlement; and acquisition-related transaction and restructuring costs will be expensed rather than treated as part of the cost of the acquisition. The new accounting guidance also establishes disclosure requirements to enable users to evaluate the nature and financial effects of the business combination. Because the majority of the provisions of the new accounting guidance are applicable to future transactions, the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

On January 1, 2009, the Company adopted new accounting guidance for assets acquired and liabilities assumed in a business combination as issued by the FASB. The new guidance amends the provisions previously issued by the FASB related to the initial recognition and measurement, subsequent measurement and accounting and disclosures for assets and liabilities arising from contingencies in business combinations. The new guidance eliminates the distinction between contractual and non-contractual contingencies, including the initial recognition and measurement. The adoption of this accounting guidance did not have a material impact on the Company’s consolidated financial statements.

Determining the Useful Life of Intangible Assets. On January 1, 2009, the Company adopted new accounting guidance for the determination of the useful life of intangible assets as issued by the FASB. The new guidance amends the factors that should be considered in developing the renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The new guidance also requires expanded disclosure regarding the determination of intangible asset useful lives. Because this accounting guidance is applicable to future transactions, the adoption of did not have an impact on the Company’s consolidated financial statements.

Subsequent Events. On April 1, 2009, the Company adopted new accounting guidance related to subsequent events as issued by the FASB. The new requirement establishes the accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, that is, whether that date represents the date the financial statements were or were available to be issued. The adoption of these provisions did not have a material effect on the Company’s consolidated financial statements. See Note 1 for additional discussion of the Company’s evaluation of subsequent events.

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

Transfers of Financial Assets. In June 2009, the FASB issued guidance that changes the information a reporting entity provides in its financial statements about the transfer of financial assets and continuing interests held in transferred financial assets. The standard amends previous accounting guidance by removing the concept of qualified special purpose entities. This accounting standard is effective for the Company for transfers occurring on or after January 1, 2010. The Company does not expect the adoption of this accounting standard to have a material effect on its consolidated financial statements and related disclosures.

Fair Value Measurement of Liabilities. In August 2009, FASB issued guidance providing clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques:

     1. A valuation technique that uses:

          a. The quoted price of the identical liability when traded as an asset.

          b. Quoted prices for similar liabilities or similar liabilities when traded as assets.

2. Another valuation technique that is consistent with the principles in the FASB’s guidance (two examples would be an income approach or a market approach).

This guidance also clarifies that (i) when estimating fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability and (ii) both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. This guidance is effective for the first reporting period (including interim periods) beginning after issuance. The Company does not expect this guidance to have a material impact on its financial statements and disclosures.

Multiple Element Arrangements. In September 2009, the FASB issued new accounting guidance related to the revenue recognition of multiple element arrangements. The new guidance states that if vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined, companies will be required to develop a best estimate of the selling price to separate deliverables and allocate arrangement consideration using the relative selling price method. This guidance is effective for the Company for arrangements entered into after January 1, 2010. The Company currently does not expect this guidance to have a material impact on its financial statements and disclosures.

NOTE D — Fair Value Measurements

The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the Company established three levels of inputs that may be used to measure fair value:

Level 1		Observable inputs such as quoted prices in active markets for identical assets or liabilities;
Level 2		Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and
Level 3		Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

Assets and liabilities measured at fair value on a recurring basis are as follows (in thousands):

						Quoted
						Prices in
						Active				Significant
						Markets for				Other				Significant
						Identical				Observable				Unobservable
						Assets				Inputs				Inputs				Valuation
		Fair Value				(Level 1)				(Level 2)				(Level 3)				Technique
December 31, 2008:
Interest rate swap agreements		$	(11,532	)		$	—			$	(11,532	)		$	—				(1	)
September 30, 2009:
Interest rate swap agreements		$	(9,064	)		$	—			$	(9,064	)		$	—				(1	)

NOTE E — Fair Value of Financial Instruments

The Company determines the estimated fair value of financial instruments using available market information and valuation methodologies. Considerable judgment is required in estimating fair values. Accordingly, the estimates may not be indicative of the amounts it could realize in current market exchange.

The carrying amounts of cash, receivables, accounts payable and accrued liabilities approximate fair values based on the liquidity of these financial instruments or based on their short-term nature. The carrying amounts of the Company’s borrowings under its credit facility and notes payable approximate fair value. The fair values of the Company’s notes payable and credit facility are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Based on the borrowing rates currently available to the Company for bank loans with similar terms and average maturities, the fair value of the Company’s notes payable and credit facility debt at December 31, 2008 and September 30, 2009, approximated their respective book values. The fair value of the Company’s Senior Notes at December 31, 2008 ($345.8 million principal amount outstanding) and September 30, 2009 ($346.3 million principal amount outstanding), was approximately $244.0 million and $340.4 million, respectively. The determination for fair value is based on the latest sales price at the end of each period obtained from a third-party institution.

Note F — Earnings Per Share

The Company issued Preferred Stock which participates in distributions of earnings on the same basis as shares of common stock, and as such, the Company established standards regarding the computation of earnings per share (EPS) for securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the company. Earnings for the period are required to be allocated between the common and preferred shareholders based on their respective rights to receive dividends. Basic net income per share is then calculated by dividing income allocable to common stockholders by the weighted-average number of common shares outstanding, net of shares subject to repurchase by the Company, during the period. The Company is not required to present basic and diluted net income (loss) per share for securities other than common stock; therefore, the following net income per share amounts only pertain to the Company’s common stock. The Company calculates diluted net income per share under the if-converted method unless the conversion of the preferred stock is anti-dilutive to basic net income per share. To the extent the inclusion of preferred stock is anti-dilutive, the Company calculates diluted net income per share under the two-class method. Potential common shares include restricted common stock, which is subject to risk of forfeiture and incremental shares of common stock issuable upon the exercise of stock options and convertible preferred stock using the treasury stock method.

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

The following is a reconciliation of net income and weighted-average shares of common stock outstanding for purposes of calculating basic and diluted earnings per share for the three month and nine month periods ended September 30:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2008				2009				2008				2009
		(In thousands except earnings per share data)
Historical net income per share:
Numerator:
Net income		$	13,276			$	8,120			$	28,795			$	21,813
Less: Earnings allocable to preferred stock			(2,650	)			(1,615	)			(2,690	)			(4,344	)
Net income available to common stockholders		$	10,626			$	6,505			$	26,105			$	17,469
Basic EPS Denominator:
Common stock outstanding beginning of period			34,146				34,435				34,041				34,324
Effect of weighting shares:
Weighted shares issued during the period ended September 30,			28				29				83				76
Denominator for basic net income per share			34,174				34,464				34,124				34,400
Diluted EPS Denominator:
Common stock outstanding beginning of period			34,146				34,435				34,041				34,324
Effect of weighting shares:
Weighted shares issued during the period ended September 30,			28				29				83				76
Dilutive effect of employee stock options and nonvested share-awards assumed converted during the period ended September 30,			527				396				442				215
Dilutive effect of convertible preferred stock assumed converted during the period ended September 30,			8,556				8,556				2,946				8,556
Denominator for diluted net income per share			43,257				43,416				37,512				43,171
Basic net income per share		$	0.31			$	0.19			$	0.77			$	0.51
Diluted net income per share		$	0.31			$	0.19			$	0.77			$	0.51

For the three months ended September 30, 2008 and 2009, employee stock options to purchase 502,275 and 437,725 shares of stock, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive. For the nine months ended September 30, 2008 and 2009, employee stock options to purchase 564,400 and 508,475 shares of stock, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive. Basic weighted average number of common shares outstanding as of September 30, 2008 and 2009 does not include 653,838 and 1,018,713, respectively, of share-awards because the awards had not then vested. For the three months ended September 30, 2008 and 2009, 23,104 and 102,818, respectively, of nonvested share-awards were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive. For the nine months ended September 30, 2008 and 2009, 84,786 and 313,036, respectively, of nonvested share-awards were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive. The nonvested stock could potentially dilute future earnings per share.

NOTE G — Share-Based Compensation

At September 30, 2009, the Company had one active share-based employee compensation plan. There are two previously expired compensation plans that still have outstanding options. Stock option awards under these plans were granted with an exercise price per share equal to the fair market value of the Company’s common stock on the date of grant. Each outstanding option will expire 10 years from the date it was granted unless exercised or forfeited before the expiration date, and, historically, options are granted with vesting over a 4.5 year period. The Company has not granted any options in 2009.

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

In 2005, the Company began awarding restricted stock, also called nonvested shares in this discussion, under the existing share-based compensation plans. The majority of the Company’s nonvested share-awards typically vest in equal annual installments over a five year period. The total value of these awards is expensed on a straight-line basis over the service period of the employees receiving the awards. The “service period” is the time during which the employees receiving awards must remain employees for the shares granted to fully vest.

Starting in December 2006, the Company awarded nonvested share-awards to certain executive officers with vesting subject to a performance condition. Vesting of these share-awards is dependent upon the officers fulfilling the service period requirements as well as the Company achieving certain EBITDA targets in each of the subsequent four years. The 2009 target was established by the Company’s Board of Directors on January 20, 2009, at which point the value of each nonvested share-award was $12.31. The Company is required to assess the probability that the performance conditions will be met. If the likelihood of the performance conditions being met is deemed probable, the Company will recognize the expense using the accelerated attribution method. The accelerated attribution method could result in as much as 50% of the total value of the shares being recognized in the first year of the service period if each of the four future targets is assessed as probable of being met. For performance based awards granted in 2006, 2007 and 2009, the accelerated attribution method has been used to recognize the expense.

In June 2008, in conjunction with the Merger and the hiring of Mobile Storage Group employees, the Company awarded nonvested share-awards for an aggregate of 157,535 shares with an aggregate fair value of $3.2 million. These awards vested or will vest over a period of between one and five years. The total value of these awards is expensed on a straight-line basis over the service period.

As of September 30, 2009, the total amount of unrecognized compensation cost related to share-awards was approximately $16.8 million, which is expected to be recognized over a weighted-average period of approximately 3.1 years.

The total value of the stock option awards is expensed over the related employee’s service period on a straight-line basis. As of September 30, 2009, total unrecognized compensation cost related to stock option grants was approximately $1.2 million, which is expected to be recognized over a weighted-average period of approximately 1.1 years.

The following table summarizes the share-based compensation expense and capitalized amounts for the three months and nine months ended September 30:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2008				2009				2008				2009
		(In thousands)
Gross share-based compensation		$	1,959			$	1,883			$	4,807			$	5,359
Capitalized share-based compensation			(418	)			(58	)			(902	)			(253	)
Share-based compensation expense		$	1,541			$	1,825			$	3,905			$	5,106

A summary of stock option activity within the Company’s share-based compensation plans and changes for the nine months ended September 30, 2009 is as follows:

		Number of				Weighted
		Shares				Average
		(In thousands)				Exercise Price
Balance at December 31, 2008			1,750			$	17.45
Exercised			(60	)		$	10.93
Canceled/expired			(104	)		$	25.68
Balance at September 30, 2009			1,586			$	17.20

The intrinsic value of options exercised during the nine months ended September 30, 2009 was approximately $287,000.

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

A summary of nonvested share-awards activity within the Company’s share-based compensation plans and changes for the nine months ended September 30, 2009 is as follows:

		Number of				Weighted Average
		Shares				Grant Date Fair
		(In thousands)				Value
Nonvested at December 31, 2008			990			$	18.03
Awarded			235				12.62
Released			(115	)			20.19
Forfeited			(91	)			18.83
Nonvested at September 30, 2009			1,019			$	16.73

A summary of fully-vested stock options and stock options expected to vest, as September 30, 2009, is as follows:

										Weighted
		Number of				Weighted				Average				Aggregate
		Shares				Average				Remaining				Intrinsic
		(In				Exercise				Contractual				Value (In
		thousands)				Price				Term				thousands)
Outstanding			1,586			$	17.20				4.2			$	3,871
Vested and expected to vest			1,524			$	16.82				4.1			$	3,871
Exercisable			1,484			$	16.54				4.0			$	3,871

The fair value of each stock option award is estimated on the date of the grant using the Black-Scholes option pricing model.

NOTE H — Inventories

Inventories are valued at the lower of cost (principally on a standard cost basis which approximates the first-in, first-out (FIFO) method) or market. Market is the lower of replacement cost or net realizable value. Inventories primarily consist of raw materials, supplies, work-in-process and finished goods, all related to the manufacturing, remanufacturing and maintenance of portable storage units and office units, primarily for the Company’s lease fleet and the Company’s units held for sale. Raw materials principally consist of raw steel, wood, glass, paint, vinyl and other assembly components used in manufacturing and refurbishing processes.

Work-in-process primarily represents partially built units being completed at the Maricopa facility that primarily will be added to the Company’s lease fleet upon completion or sold. Finished portable storage units primarily represents ISO (the International Organization for Standardization) containers held in inventory until the containers are either sold as is, remanufactured and sold, or units in the process of being remanufactured to be compliant with the Company’s lease fleet standards before transferring the units into the Company’s lease fleet. There is no certainty when the Company purchases the containers whether they will ultimately be sold, refurbished and sold, or remanufactured and moved into the Company’s lease fleet. Units that the Company adds to its lease fleet undergo an extensive remanufacturing process that includes installing the Company’s proprietary locking system, signage, painting and sometimes adding the Company’s proprietary security doors.

		December 31, 2008				September 30, 2009
		(In thousands)
Raw material and supplies		$	16,991			$	16,705
Work-in-process			1,611				596
Finished portable storage units			7,975				5,847
		$	26,577			$	23,148

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

NOTE I — Income Taxes

The Company adopted a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

The Company files U.S. federal tax returns, U.S. State tax returns, and foreign tax returns. The Company has identified the Company’s U.S. Federal tax return as the Company’s “major” tax jurisdiction. The Company’s tax year for 2008 is subject to tax examination by the U. S. Internal Revenue Service (IRS) through September 15, 2012. During 2009 the IRS concluded the audit of the Company’s consolidated U.S. Federal return for 2006 and 2007. There were no adjustments which resulted in a material change to the Company’s financial position. No reserves for uncertain income tax positions have been recorded and the Company did not record a cumulative effect adjustment. The Company does not anticipate that the total amount of unrecognized tax benefit related to any particular tax position will change significantly within the next 12 months.

The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. Penalties and associated interest costs are recorded in leasing, selling and general expenses in the Condensed Consolidated Statements of Income.

NOTE J — Property, Plant and Equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the assets’ estimated useful lives. Residual values are determined when the property is constructed or acquired and range up to 25%, depending on the nature of the asset. In the opinion of management, estimated residual values do not cause carrying values to exceed net realizable value. Normal repairs and maintenance to property, plant and equipment are expensed as incurred. When property or equipment is retired or sold, the net book value of the asset, reduced by any proceeds, is charged to gain or loss on the retirement of fixed assets. Property, plant and equipment consist of the following at:

		December 31, 2008					September 30, 2009
		(In thousands)
Land		$	10,978			$	11,128
Vehicles and equipment			78,592				77,748
Buildings and improvements			13,868				14,979
Office fixtures and equipment			20,948				24,930
			124,386				128,785
Less accumulated depreciation			(35,877	)			(43,419	)
Total property, plant and equipment		$	88,509			$	85,366

NOTE K — Lease Fleet

Mobile Mini has a lease fleet primarily consisting of remanufactured and differentiated steel portable storage containers and manufactured mobile offices that are leased to customers under short-term operating lease agreements with varying terms. Depreciation is calculated using the straight-line method over the Company’s units’ estimated useful life, after the date that the Company put the unit in service, and are depreciated down to their estimated residual values. The Company’s steel units are depreciated over 30 years with an estimated residual value of 55%. Wood office units are depreciated over 20 years with an estimated residual value of 50%. Van trailers, which are a small part of the Company’s fleet, are depreciated over seven years to a 20% residual value. Van trailers are only added to the fleet in connection with acquisitions of portable storage businesses, and then only when van trailers are a part of the business acquired.

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

In 2009, some of the steel units in the Company’s lease fleet were older than the 25 year originally assigned useful life. In April 2009, the Company evaluated its depreciation policy on steel units and changed their estimated useful life to 30 years with an estimated residual value of 55%, which effectively results in continual depreciation on these units at the same annual rate of book value as the Company’s previous depreciation policy of 25 year life and 62.5% residual value. This change had an immaterial impact on the consolidated financial statements at the date of the change in estimate.

In the opinion of management, estimated residual values do not cause carrying values to exceed net realizable value. The Company continues to evaluate these depreciation policies as more information becomes available from other comparable sources and the Company’s own historical experience.

Normal repairs and maintenance to the portable storage and mobile office units are expensed as incurred. As of December 31, 2008 and September 30, 2009, the lease fleet was in excess of $1.1 billion before accumulated depreciation of $79.6 and $96.6 million, respectively.

Lease fleet consists of the following at:

		December 31, 2008				September 30, 2009
		(In thousands)
Steel storage containers		$	616,750			$	621,127
Offices			523,242				527,348
Van trailers			15,610				6,088
Other			2,161				2,660
			1,157,763				1,157,223
Accumulated depreciation			(79,607	)			(96,555	)
		$	1,078,156			$	1,060,668

NOTE L — Derivatives

In the normal course of business, the Company’s operations are exposed to fluctuations in interest rates. The Company addresses a portion of these risks through a controlled program of risk management that includes the use of derivative financial instruments. The objective of controlling these risks is to limit the impact of fluctuations in interest rates on earnings.

The Company’s primary interest rate exposure results in changes in short-term U.S. dollar interest rates. In an effort to manage variable interest rate exposures, the Company may enter into interest rate swap agreements, which convert its floating rate debt to a fixed-rate and which it designates as cash flow hedges. Interest expense on the notional amounts under these agreements is accrued using the fixed rates identified in the swap agreements.

The Company had interest rate swap agreements totaling $200.0 million at September 30, 2009. The fixed interest rate on the Company’s eight swap agreements range from 3.25% to 4.71%, averaging 4.03%. Three swap agreements mature in 2010 and five swap agreements mature in 2011.

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

The following tables summarize information related to the Company’s derivatives. All of the Company’s derivatives are designated as effective hedging instruments.

Derivatives Fair Value						Fair Value
Hedging Relationships		Balance Sheet Location				(in thousands)
December 31, 2008:
Interest rate swap agreements		Accrued liabilities				$	(11,532	)
September 30, 2009:
Interest rate swap agreements		Accrued liabilities				$	(9,064	)

		Amount of Gain or
		(Loss) Recognized
		in OCI on
Derivatives Fair Value		Derivative
Hedging Relationships		(In thousands)
Three months ended September 30, 2008:
Interest rate swap agreements, (net of income tax benefit of $0.4 million)		$	(642	)
Three months ended September 30, 2009:
Interest rate swap agreements, (net of applicable income taxes of $0.2 million)		$	263
Nine months ended September 30, 2008:
Interest rate swap agreements, (net of income tax benefit of $0.5)		$	(850	)
Nine months ended September 30, 2009:
Interest rate swap agreements, (net of applicable income taxes of $1.0 million)		$	1,509

NOTE M— Segment Reporting

The Company has operations in the United States, Canada, the United Kingdom and The Netherlands. All of the Company’s branches operate in their local currency and although the Company is exposed to foreign exchange rate fluctuation in other foreign markets where the Company leases and sells the Company’s products, the Company does not believe this will have a significant impact on the Company’s results of operations. Currently, the Company’s branch operation is the only segment that concentrates on the Company’s core business of leasing. Financial results of geographic regions are aggregated into one reportable segment, since their operations have similar economic characteristics. Each branch has similar economic characteristics covering all products leased or sold, including similar products and services, processes for delivering these services, customer base, sales personnel, advertising, yard facilities, general and administrative costs and the method of branch management. Management’s allocation of resources, performance evaluations and operating decisions are not dependent on the mix of a branch’s products. The Company does not attempt to allocate shared revenue nor general, selling and leasing expenses to the different configurations of portable storage and office products for lease and sale. The branch operations include the leasing and sales of portable storage units, portable offices and combination units configured for both storage and office space. The Company leases to businesses and consumers in the general geographic area surrounding each branch. Historically, the operation included the Company’s manufacturing facilities, which was responsible for the purchase, manufacturing and refurbishment of products for leasing and sale, as well as for manufacturing certain delivery equipment.

In managing the Company’s business, management focuses on growing leasing revenues, particularly in existing markets where it can take advantage of the operating leverage inherent in our business model, EBITDA and earnings per share.

Discrete financial data on each of the Company’s products is not available and it would be impractical to collect and maintain financial data in such a manner; therefore, reportable segment information is the same as contained in the Company’s Condensed Consolidated Financial Statements.

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

The tables below represent the Company’s revenue and long-lived assets, consisting of lease fleet and property, plant and equipment, as attributed to geographic locations (in thousands):

Revenue from external customers:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		(In thousands)
		2008				2009				2008				2009
North America		$	106,750			$	77,874			$	252,179			$	243,530
United Kingdom			24,520				13,454				35,355				41,144
The Netherlands			1,482				758				4,844				2,500
Total revenues		$	132,752			$	92,086			$	292,378			$	287,174

Long-lived assets:

		December 31, 2008				September 30, 2009
		(In thousands)
North America		$	1,041,540			$	1,009,036
United Kingdom			120,914				132,336
The Netherlands			4,211				4,662
Total long-lived assets		$	1,166,665			$	1,146,034

NOTE N — Comprehensive Income

Comprehensive income, net of tax, consisted of the following at:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2008				2009				2008				2009
						(In thousands)
Net income		$	13,276			$	8,120			$	28,795			$	21,813
Net unrealized holding gain (loss) on derivatives			(642	)			263				(850	)			1,509
Foreign currency translation adjustment			(10,305	)			(2,298	)			(9,522	)			8,931
Total comprehensive income		$	2,329			$	6,085			$	18,423			$	32,253

The components of accumulated other comprehensive loss, net of tax, were as follows:

		December 31, 2008				September 30, 2009
		(In thousands)
Accumulated net unrealized holding loss on derivatives		$	(7,068	)		$	(5,559	)
Foreign currency translation adjustment			(30,410	)			(21,479	)
Total accumulated other comprehensive loss		$	(37,478	)		$	(27,038	)

NOTE O — Integration, Merger and Restructuring Expenses

In connection with the Merger, the Company incurred costs to exit overlapping Mobile Storage Group leased properties, property shut down costs, costs of Mobile Storage Group’s severance agreements, resolve outstanding obligations, costs for asset verification and for damaged assets.

In addition, as a result of the Merger and the economic environment, the Company restructured the manufacturing operations and reduced overhead and capital expenditures for the lease fleet. In connection with these activities, the Company recorded costs for severance agreements and recorded impairment charges to write down to certain assets previously used in conjunction with the manufacturing operations and inventories.

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

The following table details accrued integration, merger and restructuring obligations (included in accrued liabilities in the Condensed Consolidated Balance Sheet) and related activity for the period ended September 30, 2009:

						Lease
		Severance and				Abandonment				Acquisition
		Benefits				Costs				Integration				Total
						(In thousands)
Accrued obligations as of December 31, 2008		$	2,009			$	8,411			$	1,143			$	11,563
Integration, merger and restructuring expenses			3,859				26				5,593				9,478
Cash paid			(4,970	)			(2,277	)			(6,722	)			(13,969	)
Accrued obligations as of September 30, 2009		$	898			$	6,160			$	14			$	7,072

These accrued obligations are expected to be paid out through the year 2014.

The following amounts are included in integration, merger and restructuring expenses for the three months and nine months ended September 30, 2009:

		Three Months				Nine Months
		Ended				Ended
		September 30, 2009				September 30, 2009
		(In thousands)
Severance and benefits		$	630			$	3,859
Lease abandonment costs			—				26
Acquisition integration			1,005				5,593
Long-lived asset and inventory charges			(103	)			(103	)
Integration, merger and restructuring expenses		$	1,532			$	9,375

NOTE P — Condensed Consolidating Financial Information

Mobile Mini Supplemental Indenture

In connection with the acquisition of MSG, Mobile Mini entered into a Supplemental Indenture (the Mobile Mini Supplemental Indenture) pursuant to which MSG and its subsidiaries A Better Mobile Storage Company, and Mobile Storage Group (Texas), LP (the New Mobile Mini Guarantors) became “Guarantors” under Mobile Mini’s 6.875% Senior Notes due 2015 (the Senior Notes). Mobile Mini also entered into a Supplemental Indenture (the MSG Supplemental Indenture) pursuant to which Mobile Mini became an “Issuer” under MSG’s 9.75% Senior Notes due 2014 (the MSG Notes) and Mobile Mini’s subsidiaries Mobile Mini of Ohio LLC, Mobile Mini, LLC, a California limited liability company, Mobile Mini, LLC, a Delaware limited liability company, Mobile Mini I, Inc., A Royal Wolf Portable Storage, Inc., Temporary Mobile Storage, Inc., Delivery Design Systems, Inc., and Mobile Mini Texas Limited Partnership, LLP, became “Guarantors” under the MSG Indenture. As a result of the Supplemental Indentures, the same subsidiaries of the Company are guarantors under each of the MSG Notes and the Senior Notes.

The following tables present the condensed consolidating financial information of Mobile Mini, Inc., representing the subsidiaries of the Guarantors of the Senior Notes and MSG Notes and the Non-Guarantor Subsidiaries. Separate financial statements of the subsidiary guarantors are not presented because the guarantee by each 100% owned subsidiary guarantor is full and unconditional, joint and several, and management has determined that such information is not material to investors.

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

MOBILE MINI, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS
As of December 31, 2008
(In thousands)
(unaudited)

						Non-
		Guarantors				Guarantors				Eliminations				Consolidated
ASSETS
Cash		$	2,208			$	976			$	—			$	3,184
Receivables, net			45,827				15,597				—				61,424
Inventories			23,644				2,982				(49	)			26,577
Lease fleet, net			969,432				108,724				—				1,078,156
Property, plant and equipment, net			72,108				16,401				—				88,509
Deposits and prepaid expenses			12,130				1,157				—				13,287
Other assets and intangibles, net			28,144				6,919				—				35,063
Goodwill			435,450				57,207				—				492,657
Intercompany			131,257				35,782				(167,039	)			—
Total assets		$	1,720,200			$	245,745			$	(167,088	)		$	1,798,857
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts payable		$	12,361			$	9,072			$	—			$	21,433
Accrued liabilities			81,146				5,068				—				86,214
Lines of credit			450,053				104,479				—				554,532
Notes payable			1,306				74				—				1,380
Obligations under capital leases			5,495				2				—				5,497
Senior notes			345,797				—				—				345,797
Deferred income taxes			124,858				10,363				(435	)			134,786
Intercompany			23				29,626				(29,649	)			—
Total liabilities			1,021,039				158,684				(30,084	)			1,149,639
Commitments and contingencies
Convertible preferred stock			153,990				—				—				153,990
Stockholders’ equity:
Common stock			375				18,433				(18,433	)			375
Additional paid-in capital			328,696				119,165				(119,165	)			328,696
Retained earnings			263,498				(21,157	)			594				242,935
Accumulated other comprehensive loss			(8,098	)			(29,380	)			—				(37,478	)
Treasury stock, at cost			(39,300	)			—				—				(39,300	)
Total stockholders’ equity			545,171				87,061				(137,004	)			495,228
Total liabilities and stockholders’ equity		$	1,720,200			$	245,745			$	(167,088	)		$	1,798,857

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) — Continued

MOBILE MINI, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS
As of September 30, 2009
(In thousands)
(unaudited)

						Non-
		Guarantors				Guarantors				Eliminations				Consolidated
ASSETS
Cash and cash equivalents		$	445			$	1,296			$	—			$	1,741
Receivables, net			30,543				11,671				—				42,214
Inventories			20,820				2,377				(49	)			23,148
Lease fleet, net			941,937				118,731				—				1,060,668
Property, plant and equipment, net			67,098				18,268				—				85,366
Deposits and prepaid expenses			8,848				1,361				—				10,209
Other assets and intangibles, net			22,844				5,849				—				28,693
Goodwill			447,126				66,018				—				513,144
Intercompany			139,179				36,450				(175,629	)			—
Total assets		$	1,678,840			$	262,021			$	(175,678	)		$	1,765,183
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts payable		$	6,638			$	7,217			$	—			$	13,855
Accrued liabilities			65,934				3,529				—				69,463
Lines of credit			385,643				107,663				—				493,306
Notes payable			145				41				—				186
Obligations under capital leases			4,414				1				—				4,415
Senior notes, net			346,349				—				—				346,349
Deferred income taxes			139,637				11,084				(561	)			150,160
Intercompany			22				39,034				(39,056	)			—
Total liabilities			948,782				168,569				(39,617	)			1,077,734
Commitments and contingencies
Convertible preferred stock			153,990				—				—				153,990
Stockholders’ equity:
Common stock			377				18,434				(18,434	)			377
Additional paid-in capital			334,671				119,165				(119,165	)			334,671
Retained earnings			285,575				(22,364	)			1,538				264,749
Accumulated other comprehensive loss			(5,255	)			(21,783	)			—				(27,038	)
Treasury stock, at cost			(39,300	)			—				—				(39,300	)
Total stockholders’ equity			576,068				93,452				(136,061	)			533,459
Total liabilities and stockholders’ equity		$	1,678,840			$	262,021			$	(175,678	)		$	1,765,183

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) — Continued

MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended September 30, 2008
(In thousands)
(unaudited)

						Non-
		Guarantors				Guarantors				Eliminations				Consolidated
Revenues:
Leasing		$	96,629			$	22,694			$	—			$	119,323
Sales			9,589				2,939				—				12,528
Other			532				369				—				901
Total revenues			106,750				26,002				—				132,752
Costs and expenses:
Cost of sales			6,288				2,283				—				8,571
Leasing, selling and general expenses			50,875				17,591				—				68,466
Integration and merger expenses			4,982				1,077				—				6,059
Depreciation and amortization			7,742				1,963				—				9,705
Total costs and expenses			69,887				22,914				—				92,801
Income from operations			36,863				3,088				—				39,951
Other income (expense):
Interest income			541				7				(541	)			7
Interest expense			(15,477	)			(3,086	)			541				(18,022	)
Foreign currency exchange			—				(45	)			—				(45	)
Income (loss) before provision for (benefit of) income taxes			21,927				(36	)			—				21,891
Provision for (benefit of) income taxes			8,493				180				(58	)			8,615
Net income (loss)		$	13,434			$	(216	)		$	58			$	13,276

MOBILE MINI, INC. AND SUBSIDIARIES — NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) — Continued

MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended September 30, 2009
(In thousands)
(unaudited)

						Non-
		Guarantors				Guarantors				Eliminations				Consolidated
Revenues:
Leasing		$	69,163			$	12,935			$	—			$	82,098
Sales			8,304				1,210				(21	)			9,493
Other			407				88				—				495
Total revenues			77,874				14,233				(21	)			92,086
Costs and expenses:
Cost of sales			5,329				912				(21	)			6,220
Leasing, selling and general expenses			37,658				9,697				—				47,355
Integration, merger and restructuring expenses			1,257				275				—				1,532
Depreciation and amortization			7,309				1,918				—				9,227
Total costs and expenses			51,553				12,802				(21	)			64,334
Income from operations			26,321				1,431				—				27,752
Other income (expense):
Interest income			495				2				(474	)			23
Interest expense			(13,609	)			(1,461	)			475				(14,595	)
Foreign currency exchange			—				(13	)			—				(13	)
Income (loss) before provision for (benefit of) income taxes			13,207				(41	)			1				13,167
Provision for (benefit of) income taxes			5,118				(26	)			(45	)			5,047
Net income (loss)		$	8,089			$	(15	)		$	46			$	8,120