Exhibit 99.1

 

FOR IMMEDIATE RELEASE

MOBILE MINI REPORTS Q4’16 RESULTS AND ANNOUNCES 10% INCREASE IN DIVIDEND

Phoenix, AZ – February 2, 2017 – 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 December 31, 2016. Total revenues were $130.4 million and rental revenues were $124.2 million, as compared to $134.5 million and $126.5 million, respectively, for the same period last year.

Rental revenues for the portable storage and specialty containment businesses for the current quarter were $101.6 million and $22.5 million, respectively.

The Company recorded net income of $19.5 million, or $0.44 per diluted share, in the fourth quarter of 2016, as compared to net income of $9.5 million, or $0.21 per diluted share, for the fourth quarter of 2015. On an adjusted basis, fourth quarter net income was $21.2 million, or $0.48 per diluted share, compared to adjusted net income of $18.4 million, or $0.41 per diluted share, for the fourth quarter of 2015. Adjusted EBITDA was $54.2 million and adjusted EBITDA margin was 41.2% for the fourth quarter of 2016, up 30 basis points from the adjusted EBITDA margin in the fourth quarter of 2015.

Dividend

The Company’s Board of Directors increased the Company’s quarterly cash dividend, beginning in the first quarter of 2017, to 22.7 cents per share, a 10% increase as compared to the fourth quarter 2016 cash dividend. The dividend will be paid on March 15, 2017 to shareholders of record on March 1, 2017.

Fourth Quarter 2016 Highlights

 

•

Drove a 2.1% increase in North America portable storage quarterly core activations, which contributed to an all-time high for total portable storage units on rent during the quarter ended December 31, 2016.

 

•

Delivered the highest level of seasonal units on rent in company history.

 

•

Raised portable storage rental rates by 2.9% year-over-year and 1.6% over the third quarter of 2016; rates on new rentals were up 2.1% year-over-year.

 

•

Increased portable storage rental revenues 3.3% year-over-year on a constant currency basis. Not adjusting for unfavorable currency fluctuations, portable storage rental revenues decreased 0.5%.

 

•

Maintained steady downstream specialty containment rental revenues year-over-year.

 

•

Achieved adjusted EBITDA of $54.2 million, with an adjusted EBITDA margin of 41.2%.

 

•

Drove portable storage unit utilization to an average of 75.2% during the quarter, up 120 basis points from the prior-year period.

 

•

Generated net cash from operating activities of $40.2 million and strong free cash flow of $27.7 million, marking our 36th consecutive quarter of positive free cash flow.

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “We continued to drive portable storage pricing, with a solid 2.9% increase this quarter compared to the prior-year period, marking the sixteenth consecutive quarter of price increases, resulting in total year-over-year rental revenue growth of 3.3% in the fourth quarter of 2016. North American core activations increased 2.1% over the prior-year period, demonstrating that we are gaining traction in the overall development and

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success of our salesforce. The development of our Inside Sales Representatives through revised hiring processes, incremental sales management and focused training remains an immediate priority and I am pleased to say that we saw stabilization of turnover during the quarter.”

Mr. Olsson continued, “In our specialty containment business, downstream rental revenues remained healthy at levels similar to the prior year. However, challenges resulting largely from weak commodity prices continued to negatively affect our remaining specialty containment lines. We are well situated to benefit in 2017 from organic growth in the downstream business at existing branches, as well as through the utilization of the existing portable storage footprint to support geographic growth. We enter 2017 in a position of strength and poised to capitalize on our robust infrastructure and strengthened salesforce, which we expect to result in free cash flow growth in 2017.”

Conference Call

Mobile Mini will host a conference call today, Thursday, February 2, 2017 at 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 Investor Relations 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 211,300 portable storage containers and office units. 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 12,100 units. Mobile Mini’s network is comprised of 158 locations in the U.S., U.K., and Canada. 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 ability to continue to be strongly positioned in both the portable storage and specialty containment markets, including our ability to increase portable storage pricing, execute our salesforce model and development strategy, continue to increase our ISR headcount and drive topline growth, grow our downstream business at existing branches and through the utilization of our existing portable storage footprint, capitalize on our infrastructure and salesforce, and grow our free cash flow in 2017, 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 filings with the Securities and Exchange Commission (“SEC”). 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 &				The Equity Group Inc.
Chief Financial Officer				Fred Buonocore (212) 836-9607
Mobile Mini, Inc.				Linda Latman (212) 836-9609
(602) 308-3879
www.mobilemini.com

(See accompanying tables)

 

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Mobile Mini, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

(in thousands, except percentage and per share data)

 

		Three Months Ended December 31, 2016												Three Months Ended December 31, 2015
		Actual				Adjustments				Adjusted (1)				Actual				Adjustments				Adjusted (2)
Revenues:
Rental		$	124,170			$	—			$	124,170			$	126,540			$	—			$	126,540
Sales			6,656				—				6,656				7,188				—				7,188
Other			(439	)			1,146				707				789				(77	)			712
Total revenues			130,387				1,146				131,533				134,517				(77	)			134,440
Costs and expenses:
Rental, selling and general expenses			74,498				(807	)			73,691				78,443				(705	)			77,738
Cost of sales			4,285				—				4,285				4,772				—				4,772
Restructuring expenses			800				(800	)			—				16,025				(16,025	)			—
Depreciation and amortization			16,104				—				16,104				15,269				—				15,269
Total costs and expenses			95,687				(1,607	)			94,080				114,509				(16,730	)			97,779
Income from operations			34,700				2,753				37,453				20,008				16,653				36,661
Other expense:
Interest income			2				—				2				—				—				—
Interest expense			(8,193	)			—				(8,193	)			(8,914	)			—				(8,914	)
Deferred financing costs write-off			—				—				—				(931	)			931				—
Foreign currency exchange			(9	)			—				(9	)			—				—				—
Income before income tax provision			26,500				2,753				29,253				10,163				17,584				27,747
Income tax provision			7,031				1,040				8,071				658				8,652				9,310
Net income		$	19,469			$	1,713			$	21,182			$	9,505			$	8,932			$	18,437
EBITDA/Adjusted EBITDA		$	50,797							$	54,154			$	35,277							$	54,924
EBITDA/Adjusted EBITDA as a percentage of total revenues			39.0	%							41.2	%			26.2	%							40.9	%
Earnings per share:
Basic		$	0.44							$	0.48			$	0.21							$	0.42
Diluted			0.44								0.48				0.21								0.41
Weighted average number of common and common share equivalents outstanding:
Basic			44,073								44,073				44,383								44,383
Diluted			44,269								44,269				44,762								44,762

 

(1)

Adjusted column for the three months ended December 31, 2016 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the three-month period ended December 31, 2016 include the following, along with the related tax effects:

 

•

Increase of other revenue by $1.1 million to exclude reversed revenue related to a sales tax remittance.

 

•

Reduction of $0.3 million in rental, selling and general expenses to exclude fees and penalties associated with the sales tax remittance.

 

•

Reduction of $0.1 million in rental, selling and general expenses for acquisition-related expenses.

 

•

Reduction of $0.5 million in rental, selling and general expenses to exclude costs related to severance in conjunction with the departure of an executive.

 

•

Exclusion of costs of $0.8 million related to the restructuring of our business operations.

 

(2)

Adjusted column for the three months ended December 31, 2015 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the three-month period ended December, 2015 include the following, along with the related tax effects:

 

•

Reduction of other revenue by $0.1 million to exclude transition services revenue associated with the divestiture of our North American wood mobile office business in May 2015.

 

•

Reduction of $0.4 million in rental, selling and general expenses to exclude operating expenses associated with the provision of transition services for our North American wood mobile office business, including expenses related to wood mobile offices on our leased properties.

 

•

Reduction of $0.3 million in rental, selling and general expenses for acquisition-related expenses.

 

•

Exclusion of costs of $16.0 million related to the restructuring of our business operations.

 

•

Exclusion of write-off of deferred financing costs related to our prior ABL Credit Agreement upon entering into our Amended and Restated ABL Credit Agreement in December 2015.

 

•

Exclusion of $1.9 million in net tax benefit resulting from adjustments to our existing net deferred income tax liabilities in the U.K. upon the fourth quarter 2015 enactment of a future statutory rate reduction.

 

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Mobile Mini, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, except as indicated)

(in thousands, except percentage and per share data)

 

		Year Ended December 31, 2016												Year Ended December 31, 2015
		Actual				Adjustments				Adjusted (1)				Actual				Adjustments				Adjusted (1)
														(audited)
Revenues:
Rental		$	480,083			$	—			$	480,083			$	494,715			$	—			$	494,715
Sales			26,499				—				26,499				29,953				—				29,953
Other			2,040				(219	)			1,821				6,109				(4,173	)			1,936
Total revenues			508,622				(219	)			508,403				530,777				(4,173	)			526,604
Costs and expenses:
Rental, selling and general expenses			309,294				(807	)			308,487				326,252				(7,879	)			318,373
Cost of sales			16,471				—				16,471				19,671				—				19,671
Restructuring expenses			6,020				(6,020	)			—				20,798				(20,798	)			—
Asset impairment charge and loss on divestiture, net			—				—				—				66,128				(66,128	)			—
Depreciation and amortization			63,734				—				63,734				60,344				—				60,344
Total costs and expenses			395,519				(6,827	)			388,692				493,193				(94,805	)			398,388
Income from operations			113,103				6,608				119,711				37,584				90,632				128,216
Other expense:
Interest income			2				—				2				1				—				1
Interest expense			(32,726	)			—				(32,726	)			(35,900	)			—				(35,900	)
Debt extinguishment expense			(9,192	)			9,192				—				—				—				—
Deferred financing costs write-off			(2,271	)			2,271				—				(931	)			931				—
Foreign currency exchange			(18	)			—				(18	)			(2	)			—				(2	)
Income before income tax provision			68,898				18,071				86,969				752				91,563				92,315
Income tax provision (benefit)			21,650				6,932				28,582				(4,822	)			37,093				32,271
Net income		$	47,248			$	11,139			$	58,387			$	5,574			$	54,470			$	60,044
EBITDA/Adjusted EBITDA		$	176,821							$	190,376			$	97,927							$	200,836
EBITDA/Adjusted EBITDA as a percentage of total revenues			34.8	%							37.4	%			18.4	%							38.1	%
Earnings (loss) per share:
Basic		$	1.07							$	1.32			$	0.12							$	1.34
Diluted			1.06								1.32				0.12								1.32
Weighted average number of common and common share equivalents outstanding:
Basic			44,145								44,145				44,953								44,953
Diluted			44,390								44,390				45,460								45,460

 

(1)

Adjusted columns for the year ended December 31, 2016 and 2015 exclude certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and additional information regarding these adjustments following in this earnings release.

 

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Mobile Mini, Inc.

Operating Data

(Unaudited)

 

		2016				2015
As of December 31:
Stand-alone portable storage locations			125				133
Stand-alone specialty containment locations			19				19
Combined portable storage and specialty containment locations			14				7
Portable storage rental fleet units			211,300				205,200
Specialty containment rental fleet units			12,100				11,700
Average Unit Utilization:
Portable storage - three months ended December 31			75.2	%			74.0	%
Portable storage - year ended December 31			70.6	%			69.4	%
Specialty containment - three months ended December 31			60.5	%			64.4	%
Specialty containment - year ended December 31			61.8	%			68.0	%

 

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Mobile Mini, Inc.

Business Segment Information - Adjusted (1)

(Unaudited)

(in thousands)

 

		Three Months Ended December 31, 2016												Three Months Ended December 31, 2015
		Portable Storage				Specialty Containment				Total				Portable Storage				Specialty Containment				Total
Revenues:
Rental		$	101,637			$	22,533			$	124,170			$	102,196			$	24,344			$	126,540
Sales			5,842				814				6,656				5,495				1,693				7,188
Other			737				(30	)			707				693				19				712
Total revenues			108,216				23,317				131,533				108,384				26,056				134,440
Costs and expenses:
Rental, selling and general expenses			56,937				16,754				73,691				62,505				15,233				77,738
Cost of sales			3,751				534				4,285				3,604				1,168				4,772
Depreciation and amortization			9,293				6,811				16,104				8,786				6,483				15,269
Total costs and expenses			69,981				24,099				94,080				74,895				22,884				97,779
Income from operations		$	38,235			$	(782	)		$	37,453			$	33,489			$	3,172			$	36,661
Adjusted EBITDA		$	48,081			$	6,073			$	54,154			$	45,217			$	9,707			$	54,924
Adjusted EBITDA Margin			44.4	%			26.0	%			41.2	%			41.7	%			37.3	%			40.9	%
		Year Ended December 31, 2016												Year Ended December 31, 2015
		Portable Storage				Specialty Containment				Total				Portable Storage				Specialty Containment				Total
Revenues:
Rental		$	387,145			$	92,938			$	480,083			$	395,091			$	99,624			$	494,715
Sales			21,576				4,923				26,499				22,387				7,566				29,953
Other			1,621				200				1,821				1,864				72				1,936
Total revenues			410,342				98,061				508,403				419,342				107,262				526,604
Costs and expenses:
Rental, selling and general expenses			244,729				63,758				308,487				255,914				62,459				318,373
Cost of sales			13,319				3,152				16,471				14,580				5,091				19,671
Depreciation and amortization			35,509				28,225				63,734				34,828				25,516				60,344
Total costs and expenses			293,557				95,135				388,692				305,322				93,066				398,388
Income from operations		$	116,785			$	2,926			$	119,711			$	114,020			$	14,196			$	128,216
Adjusted EBITDA		$	158,981			$	31,395			$	190,376			$	160,686			$	40,150			$	200,836
Adjusted EBITDA Margin			38.7	%			32.0	%			37.4	%			38.3	%			37.4	%			38.1	%

 

(1)	These tables present results by major business segment adjusted to exclude certain transactions that management believes are not indicative of our business. See additional information regarding non-GAAP financial information following in this earnings release.

 

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Mobile Mini, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

		December 31,
		2016				2015
		(unaudited)				(audited)
ASSETS
Cash and cash equivalents		$	4,137			$	1,613
Receivables, net			99,175				80,191
Inventories			15,412				15,596
Rental fleet, net			950,065				951,323
Property, plant and equipment, net			149,197				131,687
Other assets			14,930				16,766
Intangibles, net			68,420				73,212
Goodwill			703,558				706,387
Total assets		$	2,004,894			$	1,976,775
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts payable		$	27,388			$	29,086
Accrued liabilities			64,126				59,024
Lines of credit			641,160				667,708
Obligations under capital leases			50,704				38,274
Senior Notes, net			245,212				197,553
Deferred income taxes			240,690				219,601
Total liabilities			1,269,280				1,211,246
Stockholders’ equity:
Common stock			493				491
Additional paid-in capital			592,071				584,447
Retained earnings			362,896				352,262
Accumulated other comprehensive loss			(81,047	)			(44,162	)
Treasury stock			(138,799	)			(127,509	)
Total stockholders’ equity			735,614				765,529
Total liabilities and stockholders’ equity		$	2,004,894			$	1,976,775

 

7

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Mobile Mini, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

		Year Ended December 31,
		2016				2015
		(unaudited)				(audited)
Cash flows from operating activities:
Net income		$	47,248			$	5,574
Adjustments to reconcile net income to net cash provided by operating activities:
Debt extinguishment expense			9,192				—
Deferred financing costs write-off			2,271				931
Asset impairment charge and loss on divestiture, net			—				66,128
Non-cash restructuring expense, excluding share-based compensation			—				12,411
Provision for doubtful accounts			6,162				3,705
Amortization of deferred financing costs			1,976				3,131
Amortization of long-term liabilities			116				101
Share-based compensation expense			7,399				13,827
Depreciation and amortization			63,734				60,344
Gain on sale of rental fleet			(5,472	)			(6,402	)
Loss on disposal of property, plant and equipment			1,285				2,188
Deferred income taxes			21,634				(5,629	)
Tax shortfall on equity award transactions			(242	)			(166	)
Foreign currency transaction loss			18				2
Changes in certain assets and liabilities, net of effect of businesses acquired			(19,077	)			(3,331	)
Net cash provided by operating activities			136,244				152,814
Cash flows from investing activities:
Proceeds from wood mobile office divestiture, net			—				83,280
Cash paid for businesses acquired, net of cash acquired			(16,565	)			(18,525	)
Additions to rental fleet, excluding acquisitions			(57,372	)			(74,732	)
Proceeds from sale of rental fleet			13,679				16,865
Additions to property, plant and equipment, excluding acquisitions			(30,659	)			(31,163	)
Proceeds from sale of property, plant and equipment			2,764				9,860
Net cash used in investing activities			(88,153	)			(14,415	)
Cash flows from financing activities:
Net repayments under lines of credit			(26,548	)			(37,810	)
Proceeds from issuance of 5.875% senior notes due 2024			250,000				—
Redemption of 7.875% senior notes due 2020			(200,000	)			—
Debt extinguishment expense			(9,192	)			—
Deferred financing costs			(5,369	)			(4,683	)
Principal payments on capital lease obligations			(6,520	)			(4,253	)
Issuance of common stock			468				1,703
Dividend payments			(36,402	)			(33,700	)
Purchase of treasury stock			(11,290	)			(61,833	)
Net cash used in financing activities			(44,853	)			(140,576	)
Effect of exchange rate changes on cash			(714	)			51
Net change in cash			2,524				(2,126	)
Cash and cash equivalents at beginning of period			1,613				3,739
Cash and cash equivalents at end of period		$	4,137			$	1,613
Equipment and other acquired through capital lease obligations		$	18,951			$	17,638
Capital expenditures accrued or payable			3,230				4,210

 

8

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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. Adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, free cash flow and constant currency financial information are non-GAAP financial measures as defined by SEC rules. This non-GAAP financial information may be determined or calculated differently by other companies. Reconciliations of these non-GAAP measurements to the most directly comparable GAAP financial measurements are furnished earlier in this release and as follows:

 

9

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Mobile Mini, Inc.

Adjusted Income Reconciliations (1)

For the Year Ended December 31, 2016

(Unaudited)

(In thousands, except per share data)

 

		Statement of Operations As Reported				Restructuring Expense (2)				Acquisition- Related Expenses (3)				Sales-tax Refund & Remittance (4)				Executive Severance (5)				Debt Expense and Deferred Costs Write-Off (6)				Statement of Operations Adjusted
Revenues:
Rental		$	480,083			$	—			$	—			$	—			$	—			$	—			$	480,083
Sales			26,499				—				—				—				—				—				26,499
Other			2,040				—				—				(219	)			—				—				1,821
Total revenues			508,622				—				—				(219	)			—				—				508,403
Costs and expenses:
Rental, selling and general expenses			309,294				—				(100	)			(253	)			(454	)			—				308,487
Cost of sales			16,471				—				—				—				—				—				16,471
Restructuring expenses			6,020				(6,020	)			—				—				—				—				—
Depreciation and amortization			63,734				—				—				—				—				—				63,734
Total costs and expenses			395,519				(6,020	)			(100	)			(253	)			(454	)			—				388,692
Income from operations			113,103				6,020				100				34				454				—				119,711
Other expense:
Interest income			2				—				—				—				—				—				2
Interest expense			(32,726	)			—				—				—				—				—				(32,726	)
Debt extinguishment expense			(9,192	)			—				—				—				—				9,192				—
Deferred financing costs write-off			(2,271	)			—				—				—				—				2,271				—
Foreign currency exchange			(18	)			—				—				—				—				—				(18	)
Income before income tax provision			68,898				6,020				100				34				454				11,463				86,969
Income tax provision			21,650				2,313				17				14				175				4,413				28,582
Net income		$	47,248			$	3,707			$	83			$	20			$	279			$	7,050			$	58,387
Diluted shares outstanding			44,390																								44,390
Earnings per share		$	1.06																							$	1.32

 

(1)	Adjusted column for the year ended December 31, 2016 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation.

(2)	Exclusion of costs of $6.0 million related to the restructuring of our business operations.

(3)	Reduction of $0.1 million in rental, selling and general expenses for acquisition-related expenses.

(4)

Reduction of other revenue by $1.4 million to exclude revenue associated with a sales tax refund, net of a $1.1 million increase to other revenue to exclude reversed revenue related to a sales tax remittance, and reduction of $0.3 million in rental, selling and general expenses to exclude fees and penalties associated with the sales tax remittance.

(5)	Reduction of $0.5 million in rental, selling and general expenses to exclude costs related to severance in conjunction with the departure of an executive.

(6)

Exclusion of $9.2 million of debt extinguishment costs to redeem $200 million aggregate principal amount of our outstanding 7.875% senior notes due December 2020 (the “2020 Senior Notes”) and exclusion of $2.3 million of deferred financing costs that were written off in conjunction with the redemption of the 2020 Notes.

 

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Mobile Mini, Inc.

Adjusted Income Reconciliations (1)

For the Year Ended December 31, 2015

(Unaudited)

(In thousands, except per share data)

 

		Statement of Operations As Reported				Restructuring Expense (2)				Acquisition- Related Expenses (3)				Loss on Impairment and Divestiture and Transition Services (4)				Sales Tax Refund and Unclaimed Property Settlement (5)				Deferred financing Costs Write-Off (6)				U.K. Enacted Tax Rate Change (7)				Statement of Operations Adjusted
Revenues:
Rental		$	494,715			$	—			$	—			$	—			$	—			$	—			$	—			$	494,715
Sales			29,953				—				—				—				—				—				—				29,953
Other			6,109				—				—				(2,997	)			(1,176	)			—				—				1,936
Total revenues			530,777				—				—				(2,997	)			(1,176	)			—				—				526,604
Costs and expenses:
Rental, selling and general expenses			326,252				—				(2,650	)			(4,357	)			(872	)			—				—				318,373
Cost of sales			19,671				—				—				—				—				—				—				19,671
Restructuring expenses			20,798				(20,798	)			—				—				—				—				—				—
Asset impairment charge and loss on divestiture, net			66,128				—				—				(66,128	)			—				—				—				—
Depreciation and amortization			60,344				—				—				—				—				—				—				60,344
Total costs and expenses			493,193				(20,798	)			(2,650	)			(70,485	)			(872	)			—				—				398,388
Income from operations			37,584				20,798				2,650				67,488				(304	)			—				—				128,216
Other expense:
Interest income			1				—				—				—				—				—				—				1
Interest expense			(35,900	)			—				—				—				—				—				—				(35,900	)
Deferred financing costs write-off			(931	)			—				—				—				—				931				—				—
Foreign currency exchange			(2	)			—				—				—				—				—				—				(2	)
Income before income tax provision			752				20,798				2,650				67,488				(304	)			931				—				92,315
Income tax provision			(4,822	)			7,967				1,016				25,983				(117	)			358				1,886				32,271
Net income		$	5,574			$	12,831			$	1,634			$	41,505			$	(187	)		$	573			$	(1,886	)		$	60,044
Diluted shares outstanding			45,460																												45,460
Earnings per share		$	0.12																											$	1.32

 

(1)	Adjusted column for the year ended December 31, 2015 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation.

(2)	Exclusion of costs of $20.8 million related to the restructuring of our business operations, primarily the integration and geographic expansion of ETS into the existing Mobile Mini infrastructure.

(3)	Reduction of $2.7 million in rental, selling and general expenses for acquisition-related expenses.

(4)

Exclusion of asset impairment and loss on divestiture associated with the divestiture of our North American wood mobile office business. The $3.0 million of other revenue and $4.4 million of rental, selling and general expenses relate to the provision of short-term transition services, including housing wood mobile office units on our leased properties.

(5)	Reduction of other revenue by $1.2 million to exclude revenue associated with a sales tax refund, and reduction of $0.9 million rental, selling and general expenses to exclude costs associated with the settlement of an unclaimed property liability with the state of Delaware.

(6)	Exclusion of the write-off of existing deferred financing costs related to our prior ABL credit Agreement upon entering into our Amended and Restated ABL Credit Agreement in December 2015.

(7)	Exclusion of the net tax benefit resulting from adjustments to our existing net deferred income tax liabilities in the U.K. upon the fourth quarter 2015 enactment of a future statutory rate reduction.

 

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Mobile Mini, Inc.

Adjusted EBITDA GAAP Reconciliations

(Unaudited)

(in thousands, except percentage data)

 

		Three Months Ended December 31,								Year Ended December 31,
		2016				2015				2016				2015
Net income		$	19,469			$	9,505			$	47,248			$	5,574
Interest expense			8,193				8,914				32,726				35,900
Income tax provision (benefit)			7,031				658				21,650				(4,822	)
Depreciation and amortization			16,104				15,269				63,734				60,344
Debt extinguishment expense			—				—				9,192				—
Deferred financing costs write-off			—				931				2,271				931
EBITDA			50,797				35,277				176,821				97,927
Share-based compensation expense			604				2,994				6,947				12,277
Restructuring expenses			800				16,025				6,020				20,798
Acquisition-related expenses			100				257				100				2,650
Impairment and divestiture-related revenues and expenses, net			—				333				—				67,488
Sales tax refund and remittance, net			1,146				—				(219	)			(1,176	)
Other			707				38				707				872
Adjusted EBITDA		$	54,154			$	54,924			$	190,376			$	200,836
		Three Months Ended December 31,								Year Ended December 31,
		2016				2015				2016				2015
Net cash provided by operating activities		$	40,223			$	39,093			$	136,244			$	152,814
Interest paid			3,666				11,950				21,546				32,372
Income and franchise taxes paid			392				1,661				1,772				4,935
Share-based compensation expense, including restructuring expense			(878	)			(2,994	)			(7,399	)			(13,827	)
Asset impairment charge and loss on divestiture, net			—				—				—				(66,128	)
Non-cash restructuring expense							(12,411	)							(12,411	)
Gain on sale of rental fleet			1,244				1,206				5,472				6,402
Loss on disposal of property, plant and equipment			(196	)			(153	)			(1,285	)			(2,188	)
Changes in other assets and liabilities, net of effect of businesses acquired			6,346				(3,075	)			20,471				(4,042	)
EBITDA		$	50,797			$	35,277			$	176,821			$	97,927

Mobile Mini, Inc.

Free Cash Flow GAAP Reconciliation

(Unaudited)

(in thousands)

 

		Three Months Ended December 31,								Year Ended December 31,
		2016				2015				2016				2015
Net cash provided by operating activities		$	40,223			$	39,093			$	136,244			$	152,814
Additions to rental fleet, excluding acquisitions			(10,892	)			(21,192	)			(57,372	)			(74,732	)
Proceeds from sale of rental fleet			2,909				3,565				13,679				16,865
Additions to property, plant and equipment, excluding acquisitions			(4,909	)			(13,245	)			(30,659	)			(31,163	)
Proceeds from sale of property, plant and equipment			395				7,413				2,764				9,860
Net capital expenditures, excluding acquisitions			(12,497	)			(23,459	)			(71,588	)			(79,170	)
Free cash flow		$	27,726			$	15,634			$	64,656			$	73,644

 

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Adjusted net income and adjusted diluted earnings per share. Adjusted net income and related earnings per share information exclude certain transactions that management believes are not indicative of our business. We believe that the inclusion of this non-GAAP presentation makes it easier to compare our financial performance across reporting periods on a consistent basis.

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 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 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, respectively, divided by total revenues expressed as a percentage.

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.

Constant Currency. We calculate the effect of currency fluctuations on current periods by translating the results for our business in the U.K. during the current period using the average exchange rates from the comparative period. We present constant currency information to provide useful information to assess our underlying business excluding the effect of material foreign currency rate fluctuations. Calculated in constant currency, our total rental revenues, and our portable storage rental revenues, for the three months ended December 31, 2016 were $4.0 million higher than when calculated in accordance with GAAP.

 

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