Attached files

file filename
8-K - FORM 8-K - MOBILE MINI INCd52967d8k.htm

Exhibit 99.1

 

LOGO

FOR IMMEDIATE RELEASE

MOBILE MINI REPORTS Q2’15 RESULTS AND ANNOUNCES QUARTERLY DIVIDEND

Phoenix, AZ – July 23, 2015 – Mobile Mini, Inc. (NASDAQ GS: MINI) (the “Company” or “Mobile Mini”), the world’s leading supplier of portable storage solutions, and a leading provider of specialty containment solutions in the United States, today reported actual and adjusted financial results for the quarter ended June 30, 2015. Total revenues were $130.3 million and rental revenues were $120.2 million, up from $106.5 million and $98.0 million, respectively, for the same period last year.

The Company recorded second quarter net income of $9.4 million, or $0.21 per diluted share. The Company had net income of $9.3 million, or $0.20 per diluted share, respectively, for the second quarter of 2014. On an adjusted basis, second quarter net income was $13.0 million, or $0.28 per diluted share, compared to adjusted net income of $10.8 million, or $0.23 per diluted share, for the second quarter of 2014. Adjusted EBITDA was $46.3 million and adjusted EBITDA margin was 35.9% for the second quarter of 2015.

Total revenues and rental revenues for the portable storage business for the current quarter were $103.0 million and $95.0 million, respectively. Total revenues and rental revenues for the recently acquired specialty containment business were $27.3 million and $25.2 million, respectively.

Dividend

The Company’s Board of Directors declared a cash dividend of 18.7 cents per share which will be paid on September 2, 2015 to shareholders of record on August 19, 2015.

Second Quarter 2015 Highlights

 

    Grew total revenues 22.3% year-over-year.

 

    Successfully completed the sale of the mobile wood office fleet for $92 million.

 

    Portable storage rental revenue increased 3.2% excluding the divested mobile wood offices, or 5.5% when adjusted for unfavorable currency fluctuations.

 

    Expanded adjusted EBITDA margin to 35.9% from 33.8% in the 2014 second quarter, and delivered adjusted EBITDA of $46.3 million, up 28.5% from $36.0 million in the prior-year quarter.

 

    Average portable storage utilization was 66.7%; rising to 68.7% by quarter end.

 

    Increased portable storage rental rates by 5.1% year-over-year.

 

    Aligned our operational management and sales structure geographically, driving execution through a flexible, customer-centric model.

 

    Returned $26.6 million to our shareholders through $8.5 million in dividends and $18.1 million of repurchased treasury shares.

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “I’m very pleased with the performance and development of our business in the quarter. Within our North American portable storage business, our recently realigned sales force and operational teams achieved the highest monthly activations in the Company’s history in June, with core activations up 20% from June 2014. As a result, within our portable storage business we grew fleet on rent at June 30, 2015 more than 3% company-wide since the end of the first quarter and 2% year-over-year. Impressive internal sales productivity increases of 28% compared to the prior-year quarter drove the second quarter traction in activations. This momentum has continued into the first few weeks of July, with year-over-year activation increases in excess of 13%, resulting in the Company’s highest ever level of core units on rent.”


Mobile Mini, Inc. News Release

July 23, 2015

Page 2

 

Mr. Olsson continued, “We have achieved success with our premium pricing strategy, as reflected in our 5.1% year-over-year rate increase this quarter. To achieve both rate and volume growth we are focused on continued development of our sales force and are actively recruiting representatives with a near-term goal of increasing the internal salesforce approximately 10%, or 20 employees. Our specialty containment business continued to do very well in the downstream market on a year over year basis, while facing continuing headwinds in the upstream market. As expected, the divestiture of our wood mobile office business is resulting in some short-term margin pressure as we incur additional costs and distraction in our field operations.”

Conference Call

Mobile Mini will host a conference call today, Thursday, July 23, 2015 at 12 noon ET to review these results. To listen to the call live, dial (201) 493-6739 and ask for the Mobile Mini Conference Call or go to www.mobilemini.com and click on the Investors section. Additionally, a slide presentation that will accompany the call will be posted at www.mobilemini.com on the Investors section and will be available in advance and after the call. Please go to the website 15 minutes early to download and install any necessary audio software. If you are unable to listen live, a replay of the call can be accessed for approximately 14 days after the call at Mobile Mini’s website.

About Mobile Mini, Inc.

Mobile Mini, Inc. is the world’s leading provider of portable storage solutions through its total rental fleet of approximately 204,200 portable storage containers and office units with 134 locations in the U.S., United Kingdom, and Canada. Through its wholly-owned subsidiary, Evergreen Tank Solutions, Mobile Mini is also a leading provider of specialty containment solutions in the U.S., with a rental fleet of approximately 11,100 units and 23 locations. Mobile Mini is included on the Russell 2000® and 3000® Indexes and the S&P Small Cap Index.

Forward-Looking Statements

This news release contains forward-looking statements, including, but not limited to, our expectations regarding our ability to execute our strategic plan, growth increased revenue, increased operational flexibility and efficiency, financial performance, margin expansion, ability to enter new markets, free cash flow, and positioning for 2015, which involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Risks and uncertainties that may affect future results include those that are described from time to time in the Company’s SEC filings. These forward-looking statements represent the judgment of the Company, as of the date of this release, and Mobile Mini disclaims any intent or obligation to update forward-looking statements.

 

CONTACT: -OR- INVESTOR RELATIONS COUNSEL:

Mark Funk, Executive VP &

Chief Financial Officer

Mobile Mini, Inc.

(602) 308-3879

www.mobilemini.com

The Equity Group Inc.

Fred Buonocore (212) 836-9607

Linda Latman (212) 836-9609

(See accompanying tables)


Mobile Mini, Inc. News Release

July 23, 2015

Page 3

 

Reclassifications:

Certain amounts in the consolidated statements of operations for the three months ended March 31, 2015, which is included in the year-to-date period ended June 30, 2015, have been reclassified to conform to the current period presentation. The reclassifications have no effect on total revenues, loss from operations, net loss or net loss per common share.

The Company believes the current presentation better reflects the nature of the underlying financial statement items.


Mobile Mini, Inc. News Release

July 23, 2015

Page 4

 

Mobile Mini, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands except per share data)

 

     Three Months Ended June 30, 2015     Three Months Ended June 30, 2014  
     Actual     Adjustments     Adjusted (1)     Actual     Adjustments     Adjusted (1)  

Revenues:

            

Rental

   $ 120,245      $ —        $ 120,245      $ 98,041      $ —        $ 98,041   

Sales

     8,199        —          8,199        7,982        —          7,982   

Other (2)

     1,844        (1,465     379        510        —          510   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

  130,288      (1,465   128,823      106,533      —        106,533   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

Rental, selling and general expenses (3)

  83,104      (3,350   79,754      68,149      (33   68,116   

Cost of sales

  5,400      —        5,400      5,379      —        5,379   

Restructuring expenses (4)

  2,444      (2,444   —        1,731      (1,731   —     

Asset impairment charge and loss on divestiture, net (5)

  1,402      (1,402   —        274      (274   —     

Depreciation and amortization

  14,538      —        14,538      9,305      —        9,305   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

  106,888      (7,196   99,692      84,838      (2,038   82,800   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

  23,400      5,731      29,131      21,695      2,038      23,733   

Other expense:

Interest expense

  (8,967   —        (8,967   (7,097   —        (7,097

Foreign currency exchange

  (2   —        (2   —        —        —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before tax provision

  14,431      5,731      20,162      14,598      2,038      16,636   

Income tax provision

  5,015      2,187      7,202      5,335      521      5,856   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

$ 9,416    $ 3,544    $ 12,960    $ 9,263    $ 1,517    $ 10,780   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

$ 37,936    $ 46,282    $ 31,000    $ 36,015   

EBITDA as a percentage of total revenues

  29.1   35.9   29.1   33.8

Earnings per share:

Basic

$ 0.21    $ 0.29    $ 0.20    $ 0.23   

Diluted

  0.21      0.28      0.20      0.23   

Weighted average number of common and common share equivalents outstanding:

Basic

  45,238      45,238      46,235      46,235   

Diluted

  45,892      45,892      47,027      47,027   

 

(1) Adjusted balance excludes certain non-cash transactions, as well as other transactions that management believes are not indicative of its ongoing business. Adjusted figures are a non-GAAP presentation.
(2) Adjustment is comprised of $1.5 million of transition service revenue associated with the divestiture of our North American mobile wood office business.
(3) Adjustment is comprised of $1.0 million in incremental costs related with acquisition activities, $1.7 million of operating expenses associated with the transition of the wood mobile offices, including expenses related to wood mobile offices on our leased properties, and $0.6 million of expense related to the proposed settlement of an unclaimed property liability with the state of Delaware.
(4) Costs relating to the restructuring of our business operations.
(5) In 2015, asset impairment and loss on divestiture costs represent the impairment and loss associated with the divestiture of our North American mobile wood office business. In 2014, the asset impairment costs represent the additional loss upon completion of sale (offset by gains upon completion of sale) of assets that were written down to fair value in the second quarter of 2013.


Mobile Mini, Inc. News Release

July 23, 2015

Page 5

 

Mobile Mini, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands except per share data)

 

     Six Months Ended June 30, 2015     Six Months Ended June 30, 2014  
     Actual     Adjustments     Adjusted (1)     Actual     Adjustments     Adjusted (1)  

Revenues:

            

Rental

   $ 243,362      $ —        $ 243,362      $ 192,121      $ —        $ 192,121   

Sales

     16,171        —          16,171        15,848        —          15,848   

Other (2)

     3,384        (2,641     743        968        —          968   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

  262,917      (2,641   260,276      208,937      —        208,937   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

Rental, selling and general expenses (3)

  166,150      (4,352   161,798      136,505      (39   136,466   

Cost of sales

  10,533      —        10,533      10,932      —        10,932   

Restructuring expenses (4)

  2,927      (2,927   —        2,316      (2,316   —     

Asset impairment charge and loss on divestiture, net (5)

  66,128      (66,128   —        557      (557   —     

Depreciation and amortization

  30,077      —        30,077      18,450      —        18,450   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

  275,815      (73,407   202,408      168,760      (2,912   165,848   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

  (12,898   70,766      57,868      40,177      2,912      43,089   

Other income (expense):

Interest expense

  (18,026   —        (18,026   (14,084   —        (14,084

Foreign currency exchange

  (2   —        (2   (1   —        (1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before tax (benefit) provision

  (30,926   70,766      39,840      26,092      2,912      29,004   

Income tax (benefit) provision

  (13,016   27,225      14,209      9,389      800      10,189   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

$ (17,910 $ 43,541    $ 25,631    $ 16,703    $ 2,112    $ 18,815   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

$ 17,177    $ 93,808    $ 58,626    $ 68,679   

EBITDA as a percentage of total revenues

  6.5   36.0   28.1   32.9

(Loss) earnings per share:

Basic

$ (0.39 $ 0.57    $ 0.36    $ 0.41   

Diluted

  (0.39   0.56      0.36      0.40   

Weighted average number of common and common share equivalents outstanding:

Basic

  45,360      45,360      46,192      46,192   

Diluted (6)

  45,360      45,972      46,932      46,932   

 

(1) Adjusted balance excludes certain non-cash transactions, as well as other transactions that management believes are not indicative of its ongoing business. Adjusted figures are a non-GAAP presentation.
(2) Adjustment is comprised of $1.5 million of transition service revenue associated with the divestiture of our North American mobile wood office business and $1.2 million of revenue associated with a sales tax refund that is not indicative of our ongoing business.
(3) Adjustment is comprised of $2.0 million in incremental costs related with acquisition activities, $1.7 million of operating expenses associated with the transition of the wood mobile offices, including expenses related to wood mobile offices on our leased properties, and $0.6 million of expense related to the proposed settlement of an unclaimed property liability with the state of Delaware.
(4) Costs relating to the restructuring of our business operations.
(5) In 2015, asset impairment and loss on divestiture costs represent the impairment and loss associated with the divestiture of our North American mobile wood office business. In 2014, the asset impairment costs represent the additional loss upon completion of sale (offset by gains upon completion of sale) of assets that were written down to fair value in the second quarter of 2013.
(6) Common stock equivalents were excluded from the calculation of actual diluted earnings per share for the six-month period ending June 30, 2015 because their inclusion would reduce the net loss per share.


Mobile Mini, Inc. News Release

July 23, 2015

   Page 6

 

Mobile Mini, Inc.

Operating Data

(Unaudited)

 

     2015     2014  

As of June 30:

    

Number of portable storage locations

     134        135   

Number of specialty containment locations

     23        —     

Portable Storage rental fleet units

     204,200        213,100   

Specialty Containment rental fleet units

     11,100        —     

Average Utilization:

    

Portable Storage – three months ended June 30

     66.7     66.6

Portable Storage – six months ended June 30

     66.6     66.7

Specialty Containment – three months ended June 30*

     69.1     72.8

Specialty Containment – six months ended June 30*

     70.1     70.5

 

* Specialty containment 2014 is prior to acquisition


Mobile Mini, Inc. News Release

July 23, 2015

Page 7

 

Mobile Mini, Inc.

Product Line Information – Adjusted (1)

(Unaudited)

(in thousands)

 

     Three Months Ended June 30, 2015     Six Months Ended June 30, 2015  
     Portable
Storage
    Specialty
Containment
    Total     Portable
Storage
    Specialty
Containment
    Total  

Revenues:

            

Rental

   $ 95,036      $ 25,209      $ 120,245      $ 194,040      $ 49,322      $ 243,362   

Sales

     6,100        2,099        8,199        12,062        4,109        16,171   

Other

     364        15        379        717        26        743   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

  101,500      27,323      128,823      206,819      53,457      260,276   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

Rental, selling and general expenses

  63,663      16,091      79,754      129,921      31,877      161,798   

Cost of sales

  3,988      1,412      5,400      7,852      2,681      10,533   

Depreciation and amortization

  8,172      6,366      14,538      17,638      12,439      30,077   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

  75,823      23,869      99,692      155,411      46,997      202,408   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

$ 25,677    $ 3,454    $ 29,131    $ 51,408    $ 6,460    $ 57,868   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

$ 36,383    $ 9,899    $ 46,282    $ 74,568    $ 19,240    $ 93,808   

Adjusted EBITDA Margin

  35.8   36.2   35.9   36.1   36.0   36.0

 

(1) Adjusted amounts exclude certain non-cash transactions, as well as other transactions that management believes are not indicative of its ongoing business. Adjusted figures are a non-GAAP presentation. See additional information regarding the adjusted balances on the previous pages of this news release.


Mobile Mini, Inc. News Release

July 23, 2015

Page 8

 

Mobile Mini, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

     June 30,
2015
(unaudited)
    December 31,
2014
(audited)
 
ASSETS   

Cash and cash equivalents

   $ 3,704      $ 3,739   

Receivables, net

     78,265        81,031   

Inventories

     17,487        16,736   

Rental fleet, net

     944,618        1,087,056   

Property, plant and equipment, net

     120,524        113,175   

Deposits and prepaid expenses

     12,089        8,586   

Deferred financing costs and other assets

     7,919        8,858   

Intangibles, net

     75,500        78,385   

Goodwill

     707,086        705,608   
  

 

 

   

 

 

 

Total assets

$ 1,967,192    $ 2,103,174   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY   

Liabilities:

Accounts payable

$ 35,004    $ 22,933   

Accrued liabilities

  57,657      63,727   

Lines of credit

  630,737      705,518   

Obligations under capital leases

  29,539      24,918   

Senior Notes

  200,000      200,000   

Deferred income taxes

  219,226      231,547   
  

 

 

   

 

 

 

Total liabilities

  1,172,163      1,248,643   
  

 

 

   

 

 

 

Stockholders’ equity:

Common stock

  491      490   

Additional paid-in capital

  577,291      569,083   

Retained earnings

  345,536      380,504   

Accumulated other comprehensive loss

  (29,131   (29,870

Treasury stock

  (99,158   (65,676
  

 

 

   

 

 

 

Total stockholders’ equity

  795,029      854,531   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

$ 1,967,192    $ 2,103,174   
  

 

 

   

 

 

 


Mobile Mini, Inc. News Release

July 23, 2015

Page 9

 

Mobile Mini, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

     Six Months Ended June 30,  
           2015                 2014        

Cash Flows from Operating Activities:

    

Net (loss) income

   $ (17,910   $ 16,703   

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

    

Asset impairment charge and loss on divestiture, net

     66,128        557   

Provision for doubtful accounts

     1,894        1,349   

Amortization of deferred financing costs

     1,586        1,405   

Amortization of long-term liabilities

     51        83   

Share-based compensation expense

     6,737        7,141   

Depreciation and amortization

     30,077        18,450   

Gain on sale of rental fleet

     (3,643     (2,495

Loss on disposal of property, plant and equipment

     1,482        359   

Deferred income taxes

     (13,420     9,189   

Foreign currency transaction loss

     2        1   

Changes in certain assets and liabilities, net of effect of businesses acquired

     (2,083     (3,457
  

 

 

   

 

 

 

Net cash provided by operating activities

  70,901      49,285   
  

 

 

   

 

 

 

Cash Flows from Investing Activities:

Proceeds from mobile wood office divestiture, net

  84,500      —     

Cash paid for businesses acquired, net of cash acquired

  (1,200   (16,260

Additions to rental fleet, excluding acquisitions

  (27,809   (8,150

Proceeds from sale of rental fleet

  9,375      12,019   

Additions to property, plant and equipment, excluding acquisitions

  (11,612   (4,741

Proceeds from sale of property, plant and equipment

  1,677      1,451   
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities

  54,931      (15,681
  

 

 

   

 

 

 

Cash Flows from Financing Activities:

Net payments under lines of credit

  (74,782   (19,189

Deferred financing costs

  (113   —     

Principal payments on capital lease obligations

  (1,817   (766

Issuance of common stock

  1,473      2,062   

Dividend payments

  (16,964   (15,719

Purchase of treasury stock

  (33,482   (463
  

 

 

   

 

 

 

Net cash used in financing activities

  (125,685   (34,075

Effect of exchange rate changes on cash

  (182   (217
  

 

 

   

 

 

 

Net decrease in cash

  (35   (688

Cash and cash equivalents at beginning of period

  3,739      1,256   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

$ 3,704    $ 568   
  

 

 

   

 

 

 

Equipment acquired through capital lease obligations

$ 6,467    $ 7,286   


Mobile Mini, Inc. News Release

July 23, 2015

Page 10

 

Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company also discloses in this press release certain non-GAAP financial information. These financial measures are not recognized measures under GAAP and they are not intended to be and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, adjusted net income, adjusted diluted earnings per share, and free cash flow are non-GAAP financial measures as defined by Securities and Exchange Commission (“SEC”) rules. This non-GAAP financial information may be determined or calculated differently by other companies. Reconciliations of these measurements to the most directly comparable GAAP financial measures are as follows:

Mobile Mini, Inc.

Adjusted EBITDA GAAP Reconciliations

(Unaudited)

(in thousands)

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2015      2014      2015      2014  

Net income (loss)

   $ 9,416       $ 9,263       $ (17,910    $ 16,703   

Interest expense

     8,967         7,097         18,026         14,084   

Income tax provision (benefit)

     5,015         5,335         (13,016      9,389   

Depreciation and amortization

     14,538         9,305         30,077         18,450   
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

  37,936      31,000      17,177      58,626   

Share-based compensation expense

  2,615      2,977      5,865      7,141   

Restructuring expenses

  2,444      1,731      2,927      2,316   

Acquisition-related expenses

  993      33      1,995      39   

Impairment and divestiture-related revenues and expenses, net (1)

  1,652      274      66,378      557   

Sales tax refund and proposed unclaimed property settlement (2)

  642      —        (534   —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

$ 46,282    $ 36,015    $ 93,808    $ 68,679   
  

 

 

    

 

 

    

 

 

    

 

 

 
     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2015      2014      2015      2014  

Net cash provided by operating activities

   $ 32,429       $ 22,473       $ 70,901       $ 49,285   

Interest paid

     11,715         10,131         15,905         12,291   

Income and franchise taxes paid

     1,420         689         1,693         778   

Share-based compensation expense

     (3,487      (2,977      (6,737      (7,141

Asset impairments, net of recoveries

     (1,402      (274      (66,128      (557

Gain on sale of rental fleet

     1,671         784         3,643         2,495   

Loss on disposal of property, plant and equipment

     (1,147      (287      (1,482      (359

Changes in other assets and liabilities, net of effect of businesses acquired

     (3,263      461         (618      1,834   
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

$ 37,936    $ 31,000    $ 17,177    $ 58,626   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) In 2015, impairment and divestiture-related revenues and expenses, net include the following: asset impairment charge and loss on divestiture, net, of $1.4 million and $66.1 million for the three and six-month periods, respectively. In both the three and six month periods, this adjustment includes. $1.5 million of transition services revenue and $1.7 million of operating expenses associated with the transition of the wood mobile offices, including the cost of providing yard space. In 2014, the asset impairment costs represent the additional loss upon completion of sale (offset by gains upon completion of sale) of assets that were written down to fair value in the second quarter of 2013.
(2) Revenue of $1.2 million associated with a sales tax refund recorded in the first quarter, partially offset by $0.6 million in expenses related to the proposed settlement of an unclaimed property liability with the state of Delaware in the second quarter. These transactions are not indicative of our ongoing business activity.


Mobile Mini, Inc. News Release

July 23, 2015

Page 11

 

Mobile Mini, Inc.

Free Cash Flow GAAP Reconciliation

(Unaudited)

(in thousands)

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2015      2014      2015      2014  

Net cash provided by operating activities

   $ 32,429       $ 22,473       $ 70,901       $ 49,285   

Additions to rental fleet, excluding acquisitions

     (17,329      (4,072      (27,809      (8,150

Proceeds from sale of rental fleet units

     4,533         6,392         9,375         12,019   

Additions to property, plant and equipment, excluding acquisitions

     (7,371      (2,113      (11,612      (4,741

Proceeds from sale of property, plant and equipment

     1,070         543         1,677         1,451   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net capital (expenditures) proceeds, excluding acquisitions

  (19,097   750      (28,369   579   
  

 

 

    

 

 

    

 

 

    

 

 

 

Free cash flow

$ 13,332    $ 23,223    $ 42,532    $ 49,864   
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA and adjusted EBITDA. EBITDA is defined as net income before discontinued operations, net of tax (if applicable), interest expense, income taxes, depreciation and amortization, and debt restructuring or extinguishment expense (if applicable), including any write-off of deferred financing costs. Adjusted EBITDA further excludes certain non-cash expenses, including share-based compensation, as well as transactions that management believes are not indicative of our ongoing business. Because EBITDA and adjusted EBITDA, as defined, exclude some but not all items that affect our cash flow from operating activities, they may not be comparable to similarly titled performance measures presented by other companies.

We present EBITDA and adjusted EBITDA because we believe they provide useful information regarding our ability to meet our future debt payment requirements, capital expenditures and working capital requirements and that they provide an overall evaluation of our financial condition. EBITDA and adjusted EBITDA have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows from operations, or other consolidated income or cash flow data prepared in accordance with GAAP.

EBITDA and adjusted EBITDA margins are calculated as EBITDA and adjusted EBITDA divided by total revenues expressed as a percentage. The GAAP financial measure that is most directly comparable to EBITDA margin is operating margin, which represents operating income divided by revenues.

Free Cash Flow. Free cash flow is defined as net cash provided by operating activities, minus or plus, net cash used in or provided by investing activities, excluding acquisitions and certain transactions. Free cash flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, the most directly comparable financial measure prepared in accordance with GAAP. We present free cash flow because we believe it provides useful information regarding our liquidity and ability to meet our short-term obligations. In particular, free cash flow indicates the amount of cash available after capital expenditures for, among other things, investments in our existing business, debt service obligations, payment of authorized quarterly dividends, repurchase of our common stock and strategic small acquisitions.

Earlier in this release, we provided a reconciliation of these adjusted measurements to actual results along with a reconciliation of net income to EBITDA and adjusted EBITDA, net cash provided by operating activities to EBTIDA and net cash provided by operating activities to free cash flow.