HAMILTON, Bermuda, Feb. 11, 2020 /PRNewswire/ -- Textainer
Group Holdings Limited (NYSE: TGH; JSE: TXT) ("Textainer", "the
Company", "we" and "our"), one of the world's largest lessors of
intermodal containers, today reported financial results for the
fourth-quarter and full-year ended December
31, 2019.
Key Financial Information (in thousands except for per share
and TEU amounts) and Business Highlights:
|
QTD
|
|
|
Full-Year
|
|
|
Q4
2019
|
|
|
Q3
2019
|
|
|
2019
|
|
|
2018
|
|
Lease rental income
(1)
|
$
|
151,555
|
|
|
$
|
155,848
|
|
|
$
|
619,760
|
|
|
$
|
612,704
|
|
Gain on sale of owned
fleet containers, net
|
$
|
3,134
|
|
|
$
|
6,092
|
|
|
$
|
21,397
|
|
|
$
|
36,071
|
|
Income from
operations
|
$
|
64,579
|
|
|
$
|
53,487
|
|
|
$
|
222,684
|
|
|
$
|
194,426
|
|
Net income
attributable to Textainer Group Holdings Limited common shareholders
|
$
|
28,782
|
|
|
$
|
10,578
|
|
|
$
|
56,724
|
|
|
$
|
50,378
|
|
Net income
attributable to Textainer Group Holdings Limited common shareholders per diluted common
share
|
$
|
0.50
|
|
|
$
|
0.18
|
|
|
$
|
0.99
|
|
|
$
|
0.88
|
|
Adjusted net income
(2)
|
$
|
10,977
|
|
|
$
|
12,950
|
|
|
$
|
55,375
|
|
|
$
|
51,471
|
|
Adjusted net income
per diluted common share (2)
|
$
|
0.19
|
|
|
$
|
0.22
|
|
|
$
|
0.96
|
|
|
$
|
0.90
|
|
Adjusted EBITDA
(2)
|
$
|
113,187
|
|
|
$
|
118,254
|
|
|
$
|
464,315
|
|
|
$
|
443,090
|
|
Average fleet
utilization
|
|
96.4
|
%
|
|
|
97.3
|
%
|
|
|
97.4
|
%
|
|
|
98.1
|
%
|
Total fleet size at
end of period (TEU)
|
|
3,500,812
|
|
|
|
3,557,466
|
|
|
|
3,500,812
|
|
|
|
3,354,724
|
|
Owned percentage of
total fleet at end of period
|
|
85.4
|
%
|
|
|
80.7
|
%
|
|
|
85.4
|
%
|
|
|
78.9
|
%
|
|
|
(1)
|
"Lease rental income"
includes both owned and managed fleet lease rental income. Q3 2019
amount has been adjusted to include a $1,183 reclassification from
trading container sales proceeds, with no effect on the income from
operations, net income and adjusted net income.
|
|
|
(2)
|
"Adjusted net income"
and "Adjusted EBITDA" are Non-GAAP Measures that are reconciled to
GAAP measures in section "Reconciliation of GAAP financial measures
to non-GAAP financial measures" below. Section "Reconciliation of
GAAP financial measures to non-GAAP financial measures" provides
certain qualifications and limitations on the use of Non-GAAP
Measures.
|
- Net income of $28.8 million for
the fourth quarter and $56.7 million
for the full year. These figures include a $14.0 million gain recorded during the fourth
quarter related to a cash distribution from the Hanjin bankruptcy
estate;
- Adjusted net income of $11.0
million for the fourth quarter, or $0.19 per diluted common share, as compared to
$13.0 million, or $0.22 per diluted common share in the third
quarter of 2019. Adjusted net income of $55.4 million for the full year, or $0.96 per diluted common share, as compared to
$51.5 million, or $0.90 per diluted common share in the prior
year;
- Adjusted EBITDA of $113.2 million
for the fourth quarter, as compared to $118.3 million in the third quarter of 2019.
Adjusted EBITDA of $464.3 million for
the full year, as compared to $443.1
million in the prior year;
- Utilization averaged 96.4% for the fourth quarter, as compared
to 97.3% for the third quarter of 2019. Utilization averaged 97.4%
for the full year, as compared to 98.1% for the prior year;
- Container investments of approximately $28 million during the fourth quarter, for a
total of $739 million for the full
year. In addition, we also acquired a container investment company
named Leased Assets Pool Company Limited ("LAPCO") on December 31, 2019. LAPCO's assets consisted
primarily of approximately 165,000 TEU of containers previously
part of our managed fleet;
- Repurchased approximately 638,000 shares and 879,000 shares of
common stock during the fourth quarter and the full year,
respectively, under the share repurchase program authorized on
August 29, 2019; and
- Commenced a secondary, or dual, listing of Textainer's common
shares on the Main Board of the Johannesburg Stock Exchange ("JSE")
on December 11, 2019.
"Textainer achieved solid results in a challenging operating
environment, delivering stable lease rental income of $619.8 million, Adjusted EBITDA growth of 4.8%,
and adjusted net income growth of 7.6% during the full year
2019. We leased out over 400,000 TEU during the year, most of
which was new production leased at attractive yields with
double-digit returns related to specific market opportunities
captured earlier in the year. Average utilization for the year
remained high at 97.4%, and at year-end, we owned approximately
85.4% of the total fleet, which stood at 3.5 million TEU," stated
Olivier Ghesquiere, President and
Chief Executive Officer of Textainer Group Holdings Limited.
Ghesquiere continued, "While we are pleased with our performance
for the year, our fourth quarter results reflect the continued
atypical lull in market activity. Accordingly, fourth quarter
lease rental income of $151.6
million, adjusted EBITDA of $113.2
million, and adjusted net income of $11.0 million all decreased modestly as compared
to the third quarter."
Ghesquiere concluded, "We believe the market is poised to
turnaround in the second half of the year, driven by an expected
return of seasonal demand, as most elements of our business remain
positive. Favorable fundamentals include low turn-in activity, high
utilization, reasonable inventory levels, and a recent increase in
container prices. We remain focused on improving our business to be
best-in-class through our cost control initiatives and other
efficiency investments such as improvements in our IT systems and
continued optimization of our capital structure."
Fourth-Quarter and Full-Year Results
Lease rental income decreased $4.3
million from the third quarter of 2019, largely due to a
decrease in utilization and fleet size. Lease rental income for the
year increased $7.1 million from
2018, largely due to an increase in fleet size, partially offset by
lower utilization and average rental rates.
Trading container margin increased $0.8
million from the third quarter of 2019 and for the year
increased $3.9 million from 2018, due
to an increase in sales volume, partially offset by a reduction in
per unit margin.
Gain on sale of owned fleet containers, net, decreased
$3.0 million from the third quarter
of 2019 and for the year decreased $14.7
million from 2018, driven by a reduction in the average gain
per container sold and a slight decrease in the number of
containers sold. While average gains per container sold
decreased, the resale container price environment still remains
favorable.
Direct container expense – owned fleet was flat from the third
quarter of 2019 in spite of a slight decrease in utilization.
Direct container expense – owned fleet for the year decreased
$8.0 million from 2018, resulting
from a reduction in repositioning expense, maintenance expense and
military sublease expense, partially offset by higher storage costs
from lower utilization.
Depreciation expense decreased $1.5
million compared to the third quarter of 2019. Depreciation
expense for the year increased $10.9
million from 2018, primarily due to an increase in the size
of our owned depreciable fleet.
General and administrative expense was flat from the third
quarter of 2019. General and administrative expense for the year
decreased $6.2 million from 2018
mainly due to a decrease in compensation costs. The third quarter
of 2018 included $2.4 million in
costs associated with departing senior executive personnel.
Bad debt recovery was $0.6 million
in the fourth quarter of 2019, primarily due to the improved
financial conditions for certain lessees. Bad debt expense for the
year was $2.0 million, which included
$2.9 million to fully reserve for a
non-performing lessee in 2019.
Gain on insurance recovery and legal settlement for 2019 and
2018 amounted to $14.9 million and
$8.7 million, respectively. The 2019
figure includes a $14.0 million cash
distribution from the Hanjin bankruptcy estate received during the
fourth quarter of 2019. The 2018 figures include an insurance
settlement associated with the Hanjin bankruptcy for insurable
costs including primarily unrecovered containers and incurred
container recovery costs, net of the insurance deductible.
Gain on settlement of pre-existing management agreement for 2019
amounted to $1.8 million which
related to the termination of the container management agreement in
conjunction with our acquisition of LAPCO.
Interest expense decreased $2.5
million compared to the third quarter of 2019, primarily due
to a decrease in interest rates. Interest expense for the year
increased $14.8 million from 2018,
primarily due to a higher average debt balance, partially offset by
a decrease in interest rates. Realized (loss) gain on derivative
instruments, net, changed from a $0.2
million gain in the third quarter of 2019 to a $0.8 million loss in the fourth quarter of 2019.
Realized gain on derivative instruments, net, for the year
decreased $3.3 million from 2018. The
change from gain to loss in the quarter and the decrease in gain in
2019 was primarily due to a decrease in interest rates.
Unrealized gain (loss) on derivative instruments, net, was a
gain of $2.9 million for the fourth
quarter of 2019 and a loss of $15.4
million for the year, resulting from an increase and a
decrease, respectively, in the forward LIBOR curve at the end of
the respective period end which increased and reduced,
respectively, the fair value of the current interest rate
derivatives. Textainer uses interest rate derivatives to manage
interest rate risk and intends to hold these derivatives until
maturity. Changes in the fair value of derivatives result in
non-cash adjustments to their carrying value that get recorded
through net income for the portion of our derivatives not
designated under hedge accounting at their inception.
Conference Call and Webcast
A conference call to discuss the financial results for the
fourth quarter and full year 2019 will be held at 5:00 pm Eastern Time on Tuesday,
February 11, 2020. The dial-in number for the conference call
is 1-877-407-9039 (U.S. & Canada) and 1-201-689-8470 (International).
The call and archived replay may also be accessed via webcast on
Textainer's Investor Relations website at
http://investor.textainer.com.
About Textainer Group Holdings Limited
Textainer has operated since 1979 and is one of the world's
largest lessors of intermodal containers with more than 3.5 million
TEU in our owned and managed fleet. We lease containers to
approximately 250 customers, including all of the world's leading
international shipping lines, and other lessees. Our fleet consists
of standard dry freight, refrigerated intermodal containers, and
dry freight specials. We also lease tank containers through our
relationship with Trifleet Leasing and are a supplier of containers
to the U.S. Military. Textainer is one of the largest and most
reliable suppliers of new and used containers. In addition to
selling older containers from our fleet, we buy older containers
from our shipping line customers for trading and resale. We sold an
average of approximately 140,000 containers per year for the last
five years to more than 1,500 customers making us one of the
largest sellers of used containers. Textainer operates via a
network of 14 offices and approximately 500 independent depots
worldwide. Textainer has a primary listing on the New York Stock
Exchange (NYSE: TGH) and a secondary listing on the Johannesburg
Stock Exchange (JSE: TXT). Visit www.textainer.com for additional
information about Textainer.
Important Cautionary Information Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of U.S. securities laws. Forward-looking statements
include statements that are not statements of historical facts and
may relate to, but are not limited to, expectations or estimates of
future operating results or financial performance, capital
expenditures, introduction of new products, regulatory compliance,
plans for growth and future operations, as well as assumptions
relating to the foregoing. In some cases, you can identify
forward-looking statements by terminology such as "may," "will,"
"should," "could," "expect," "plan," "anticipate," "believe,"
"estimate," "predict," "intend," "potential," "continue" or the
negative of these terms or other similar terminology. Readers are
cautioned that these forward-looking statements involve risks and
uncertainties, are only predictions and may differ materially from
actual future events or results. These risks and uncertainties
include, without limitation, the following items that could
materially and negatively impact our business, results of
operations, cash flows, financial condition and future prospects:
expectation of future market activity; market turnaround with
organic demand; impact of political and economic factors and
international trade; our future financial flexibility; and other
risks and uncertainties, including those set forth in Textainer's
filings with the Securities and Exchange Commission. For a
discussion of some of these risks and uncertainties, see
Item 3 "Key Information— Risk Factors" in Textainer's Annual
Report on Form 20-F filed with the Securities and Exchange
Commission on March 25, 2019.
Textainer's views, estimates, plans and outlook as described
within this document may change subsequent to the release of this
press release. Textainer is under no obligation to modify or update
any or all of the statements it has made herein despite any
subsequent changes Textainer may make in its views, estimates,
plans or outlook for the future.
Textainer Group Holdings Limited
Investor Relations
Phone: +1 (415) 658-8333
ir@textainer.com
TEXTAINER GROUP
HOLDINGS LIMITED AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Comprehensive Income
|
Three Months and
Years Ended December 31, 2019 and 2018
|
(Unaudited)
|
(All currency
expressed in United States dollars in thousands, except per share
amounts)
|
|
|
Three Months Ended
December 31,
|
|
|
Years Ended
December 31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease rental income -
owned fleet
|
|
|
|
|
$
|
127,304
|
|
|
|
|
|
|
$
|
129,723
|
|
|
|
|
|
|
$
|
517,859
|
|
|
|
|
|
|
$
|
501,362
|
|
Lease rental income -
managed fleet
|
|
|
|
|
|
24,251
|
|
|
|
|
|
|
|
27,392
|
|
|
|
|
|
|
|
101,901
|
|
|
|
|
|
|
|
111,342
|
|
Lease rental
income
|
|
|
|
|
|
151,555
|
|
|
|
|
|
|
|
157,115
|
|
|
|
|
|
|
|
619,760
|
|
|
|
|
|
|
|
612,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees -
non-leasing
|
|
|
|
|
|
1,767
|
|
|
|
|
|
|
|
2,250
|
|
|
|
|
|
|
|
7,590
|
|
|
|
|
|
|
|
8,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading container
sales proceeds
|
|
|
|
|
|
20,959
|
|
|
|
|
|
|
|
6,887
|
|
|
|
|
|
|
|
58,734
|
|
|
|
|
|
|
|
19,568
|
|
Cost of trading
containers sold
|
|
|
|
|
|
(18,965)
|
|
|
|
|
|
|
|
(5,583)
|
|
|
|
|
|
|
|
(51,336)
|
|
|
|
|
|
|
|
(16,118)
|
|
Trading container
margin
|
|
|
|
|
|
1,994
|
|
|
|
|
|
|
|
1,304
|
|
|
|
|
|
|
|
7,398
|
|
|
|
|
|
|
|
3,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of owned
fleet containers, net
|
|
|
|
|
|
3,134
|
|
|
|
|
|
|
|
9,591
|
|
|
|
|
|
|
|
21,397
|
|
|
|
|
|
|
|
36,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct container
expense - owned fleet (a)
|
|
|
|
|
|
11,760
|
|
|
|
|
|
|
|
12,740
|
|
|
|
|
|
|
|
45,831
|
|
|
|
|
|
|
|
53,845
|
|
Distribution expense
to managed fleet container investors
|
|
|
|
|
|
22,323
|
|
|
|
|
|
|
|
25,341
|
|
|
|
|
|
|
|
93,858
|
|
|
|
|
|
|
|
102,992
|
|
Depreciation expense
(b)
|
|
|
|
|
|
66,129
|
|
|
|
|
|
|
|
64,801
|
|
|
|
|
|
|
|
260,372
|
|
|
|
|
|
|
|
249,500
|
|
Container lessee
default expense, net (a)
|
|
|
|
|
|
149
|
|
|
|
|
|
|
|
6,943
|
|
|
|
|
|
|
|
7,867
|
|
|
|
|
|
|
|
17,948
|
|
Amortization
expense
|
|
|
|
|
|
517
|
|
|
|
|
|
|
|
502
|
|
|
|
|
|
|
|
2,093
|
|
|
|
|
|
|
|
3,721
|
|
General and
administrative expense
|
|
|
|
|
|
9,504
|
|
|
|
|
|
|
|
10,652
|
|
|
|
|
|
|
|
38,142
|
|
|
|
|
|
|
|
44,317
|
|
Bad debt (recovery)
expense, net
|
|
|
|
|
|
(648)
|
|
|
|
|
|
|
|
1,639
|
|
|
|
|
|
|
|
2,002
|
|
|
|
|
|
|
|
2,697
|
|
Gain on insurance
recovery and legal settlement
|
|
|
|
|
|
(14,040)
|
|
|
|
|
|
|
|
(8,692)
|
|
|
|
|
|
|
|
(14,881)
|
|
|
|
|
|
|
|
(8,692)
|
|
Gain on settlement of
pre-existing management agreement
|
|
|
|
|
|
(1,823)
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(1,823)
|
|
|
|
|
|
|
|
-
|
|
Total operating
expenses
|
|
|
|
|
|
93,871
|
|
|
|
|
|
|
|
113,926
|
|
|
|
|
|
|
|
433,461
|
|
|
|
|
|
|
|
466,328
|
|
Income from
operations
|
|
|
|
|
|
64,579
|
|
|
|
|
|
|
|
56,334
|
|
|
|
|
|
|
|
222,684
|
|
|
|
|
|
|
|
194,426
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
|
|
(37,486)
|
|
|
|
|
|
|
|
(36,589)
|
|
|
|
|
|
|
|
(153,185)
|
|
|
|
|
|
|
|
(138,427)
|
|
Write-off of
unamortized deferred debt issuance costs
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(881)
|
|
Interest
income
|
|
|
|
|
|
458
|
|
|
|
|
|
|
|
556
|
|
|
|
|
|
|
|
2,505
|
|
|
|
|
|
|
|
1,709
|
|
Realized (loss) gain
on derivative instruments, net
|
|
|
|
|
|
(763)
|
|
|
|
|
|
|
|
1,287
|
|
|
|
|
|
|
|
1,946
|
|
|
|
|
|
|
|
5,238
|
|
Unrealized gain
(loss) on derivative instruments, net
|
|
|
|
|
|
2,873
|
|
|
|
|
|
|
|
(8,038)
|
|
|
|
|
|
|
|
(15,442)
|
|
|
|
|
|
|
|
(5,790)
|
|
Other, net
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
(4)
|
|
|
|
|
|
|
|
—
|
|
Net other
expense
|
|
|
|
|
|
(34,912)
|
|
|
|
|
|
|
|
(42,783)
|
|
|
|
|
|
|
|
(164,180)
|
|
|
|
|
|
|
|
(138,151)
|
|
Income before income
tax and noncontrolling
interests
|
|
|
|
|
|
29,667
|
|
|
|
|
|
|
|
13,551
|
|
|
|
|
|
|
|
58,504
|
|
|
|
|
|
|
|
56,275
|
|
Income tax
expense
|
|
|
|
|
|
(478)
|
|
|
|
|
|
|
|
(763)
|
|
|
|
|
|
|
|
(1,948)
|
|
|
|
|
|
|
|
(2,025)
|
|
Net income
|
|
|
|
|
|
29,189
|
|
|
|
|
|
|
|
12,788
|
|
|
|
|
|
|
|
56,556
|
|
|
|
|
|
|
|
54,250
|
|
Less: Net (income)
loss attributable to the noncontrolling interests
|
|
(407)
|
|
|
|
|
|
|
|
(547)
|
|
|
|
|
|
|
|
168
|
|
|
|
|
|
|
|
(3,872)
|
|
|
|
|
|
Net income
attributable to Textainer Group Holdings Limited common shareholders
|
$
|
28,782
|
|
|
|
|
|
|
$
|
12,241
|
|
|
|
|
|
|
$
|
56,724
|
|
|
|
|
|
|
$
|
50,378
|
|
|
|
|
|
Net income
attributable to Textainer Group Holdings Limited common shareholders per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.51
|
|
|
|
|
|
|
$
|
0.21
|
|
|
|
|
|
|
$
|
0.99
|
|
|
|
|
|
|
$
|
0.88
|
|
|
|
|
|
Diluted
|
$
|
0.50
|
|
|
|
|
|
|
$
|
0.21
|
|
|
|
|
|
|
$
|
0.99
|
|
|
|
|
|
|
$
|
0.88
|
|
|
|
|
|
Weighted average
shares outstanding (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
56,923
|
|
|
|
|
|
|
|
57,363
|
|
|
|
|
|
|
|
57,349
|
|
|
|
|
|
|
|
57,200
|
|
|
|
|
|
Diluted
|
|
57,070
|
|
|
|
|
|
|
|
57,511
|
|
|
|
|
|
|
|
57,459
|
|
|
|
|
|
|
|
57,487
|
|
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in derivative
instruments designated as cash flow hedges
|
|
|
|
|
|
(124)
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(124)
|
|
|
|
|
|
|
|
—
|
|
Reclassification of
realized gain on derivative instruments designated
as cash flow hedges
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
—
|
|
Foreign currency
translation adjustments
|
|
|
|
|
|
94
|
|
|
|
|
|
|
|
(45)
|
|
|
|
|
|
|
|
42
|
|
|
|
|
|
|
|
(127)
|
|
Comprehensive
income
|
|
|
|
|
|
29,166
|
|
|
|
|
|
|
|
12,743
|
|
|
|
|
|
|
|
56,481
|
|
|
|
|
|
|
|
54,123
|
|
Comprehensive (income)
loss attributable to the noncontrolling interests
|
|
|
|
|
|
(407)
|
|
|
|
|
|
|
|
(547)
|
|
|
|
|
|
|
|
168
|
|
|
|
|
|
|
|
(3,872)
|
|
Comprehensive income
attributable to Textainer Group
Holdings Limited common shareholders
|
|
|
|
|
$
|
28,759
|
|
|
|
|
|
|
$
|
12,196
|
|
|
|
|
|
|
$
|
56,649
|
|
|
|
|
|
|
$
|
50,251
|
|
|
|
(a)
|
Amounts for container
write-off and container recovery costs from lessee default for the
periods ended December 31, 2018 have been reclassified out of the
previously reported line item "container impairment" and "direct
container expense – owned fleet", respectively, and included within
"container lessee default expense, net" to conform with the 2019
presentation.
|
|
|
(b)
|
Amounts to write-down
the carrying value of containers held for sale to their estimated
fair value less costs to sell for the periods ended December 31,
2018 have been reclassified out of the previously reported line
item "container impairment" and included within "depreciation
expense" to conform with the 2019 presentation.
|
TEXTAINER GROUP
HOLDINGS LIMITED AND SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets
|
December 31, 2019 and
2018
|
(Unaudited)
|
(All currency
expressed in United States dollars in thousands)
|
|
|
2019
|
|
|
2018
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
180,552
|
|
|
$
|
137,298
|
|
Accounts receivable,
net of allowance for doubtful accounts of $6,299 and $5,729,
respectively
|
|
109,384
|
|
|
|
134,225
|
|
Net investment in
direct financing and sales-type leases
|
|
40,940
|
|
|
|
39,270
|
|
Container leaseback
financing receivable
|
|
20,547
|
|
|
|
-
|
|
Trading
containers
|
|
11,330
|
|
|
|
40,852
|
|
Containers held for
sale
|
|
41,884
|
|
|
|
21,874
|
|
Prepaid expenses and
other current assets
|
|
14,816
|
|
|
|
23,139
|
|
Due from affiliates,
net
|
|
1,880
|
|
|
|
1,692
|
|
Total current
assets
|
|
421,333
|
|
|
|
398,350
|
|
Restricted
cash
|
|
97,353
|
|
|
|
87,630
|
|
Containers, net of
accumulated depreciation of $1,443,167 and $1,322,221,
respectively
|
|
4,156,151
|
|
|
|
4,134,016
|
|
Net investment in
direct financing and sales-type leases
|
|
254,363
|
|
|
|
127,790
|
|
Container leaseback
financing receivable
|
|
251,111
|
|
|
|
-
|
|
Fixed assets, net of
accumulated depreciation of $12,266 and $11,525,
respectively
|
|
1,128
|
|
|
|
2,066
|
|
Intangible assets,
net of accumulated amortization of $45,359 and $43,266,
respectively
|
|
5,291
|
|
|
|
7,384
|
|
Derivative
instruments
|
|
135
|
|
|
|
5,555
|
|
Deferred
taxes
|
|
1,388
|
|
|
|
2,087
|
|
Other
assets
|
|
14,364
|
|
|
|
3,891
|
|
Total
assets
|
$
|
5,202,617
|
|
|
$
|
4,768,769
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
23,404
|
|
|
$
|
27,297
|
|
Container contracts
payable
|
|
9,394
|
|
|
|
42,710
|
|
Other
liabilities
|
|
2,636
|
|
|
|
219
|
|
Due to container
investors, net
|
|
21,978
|
|
|
|
30,672
|
|
Debt, net of
unamortized deferred financing costs of $8,120 and $5,738,
respectively
|
|
213,863
|
|
|
|
191,689
|
|
Total current
liabilities
|
|
271,275
|
|
|
|
292,587
|
|
Debt, net of
unamortized deferred financing costs of $21,446 and $22,248,
respectively
|
|
3,583,866
|
|
|
|
3,218,138
|
|
Derivative
instruments
|
|
13,778
|
|
|
|
3,639
|
|
Income tax
payable
|
|
9,909
|
|
|
|
9,570
|
|
Deferred
taxes
|
|
7,789
|
|
|
|
7,039
|
|
Other
liabilities
|
|
30,355
|
|
|
|
1,805
|
|
Total
liabilities
|
|
3,916,972
|
|
|
|
3,532,778
|
|
Equity:
|
|
|
|
|
|
|
|
Textainer Group
Holdings Limited shareholders' equity:
|
|
|
|
|
|
|
|
Common shares, $0.01
par value. Authorized 140,000,000 shares; 58,326,555 shares issued
and 56,817,918 shares outstanding
at 2019; 58,032,164 shares issued and 57,402,164 shares
outstanding at 2018
|
|
583
|
|
|
|
581
|
|
Treasury shares, at
cost, 1,508,637 shares and 630,000 shares, respectively
|
|
(17,746)
|
|
|
|
(9,149)
|
|
Additional paid-in
capital
|
|
410,595
|
|
|
|
406,083
|
|
Accumulated other
comprehensive loss
|
|
(511)
|
|
|
|
(436)
|
|
Retained
earnings
|
|
866,458
|
|
|
|
809,734
|
|
Total Textainer Group
Holdings Limited shareholders' equity
|
|
1,259,379
|
|
|
|
1,206,813
|
|
Noncontrolling
interests
|
|
26,266
|
|
|
|
29,178
|
|
Total
equity
|
|
1,285,645
|
|
|
|
1,235,991
|
|
Total liabilities and
equity
|
$
|
5,202,617
|
|
|
$
|
4,768,769
|
|
TEXTAINER GROUP
HOLDINGS LIMITED AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows
|
Years Ended
December 31, 2019 and 2018
|
(Unaudited)
|
(All currency
expressed in United States dollars in thousands)
|
|
|
2019
|
|
|
2018
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
$
|
56,556
|
|
|
$
|
54,250
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation expense
(a)
|
|
260,372
|
|
|
|
249,500
|
|
Container write-down
from lessee default, net (b)
|
|
7,179
|
|
|
|
12,980
|
|
Bad debt expense,
net
|
|
2,002
|
|
|
|
2,697
|
|
Unrealized loss on
derivative instruments, net
|
|
15,442
|
|
|
|
5,790
|
|
Amortization and
write-off of unamortized deferred debt issuance costs and
accretion of bond discounts
|
|
7,953
|
|
|
|
9,531
|
|
Amortization of
intangible assets
|
|
2,093
|
|
|
|
3,721
|
|
Gain on sale of owned
fleet containers, net
|
|
(21,397)
|
|
|
|
(36,071)
|
|
Gain on insurance
recovery and legal settlement
|
|
—
|
|
|
|
(8,692)
|
|
Gain on settlement of
pre-existing management agreement
|
|
(1,823)
|
|
|
|
—
|
|
Share-based
compensation expense
|
|
4,388
|
|
|
|
7,355
|
|
Changes in operating
assets and liabilities
|
|
95,780
|
|
|
|
15,058
|
|
Total
adjustments
|
|
371,989
|
|
|
|
261,869
|
|
Net cash provided by
operating activities
|
|
428,545
|
|
|
|
316,119
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchase of containers
and fixed assets
|
|
(466,993)
|
|
|
|
(854,383)
|
|
Payment for TW
Container Leasing, Ltd. capital restructuring
|
|
—
|
|
|
|
(29,658)
|
|
Payment for Leased
Assets Pool Company Limited, net of cash acquired
|
|
(171,841)
|
|
|
|
—
|
|
Payments on container
leaseback financing receivable
|
|
(281,445)
|
|
|
|
—
|
|
Receipt of principal
payments on container leaseback financing receivable
|
|
7,745
|
|
|
|
—
|
|
Proceeds from sale of
containers and fixed assets
|
|
150,742
|
|
|
|
147,254
|
|
Net cash used in
investing activities
|
|
(761,792)
|
|
|
|
(736,787)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
debt
|
|
1,439,223
|
|
|
|
2,029,025
|
|
Principal payments on
debt
|
|
(1,049,857)
|
|
|
|
(1,608,753)
|
|
Proceeds from
container leaseback financing liability, net
|
|
17,448
|
|
|
|
—
|
|
Purchase of treasury
shares
|
|
(8,597)
|
|
|
|
—
|
|
Debt issuance
costs
|
|
(9,417)
|
|
|
|
(10,252)
|
|
Dividends paid to
noncontrolling interest
|
|
(2,744)
|
|
|
|
(1,996)
|
|
Issuance of common
shares upon exercise of share options
|
|
126
|
|
|
|
130
|
|
Net cash provided by
financing activities
|
|
386,182
|
|
|
|
408,154
|
|
Effect of exchange
rate changes
|
|
42
|
|
|
|
(127)
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
52,977
|
|
|
|
(12,641)
|
|
Cash, cash
equivalents and restricted cash, beginning of the year
|
|
224,928
|
|
|
|
237,569
|
|
Cash, cash
equivalents and restricted cash, end of the year
|
$
|
277,905
|
|
|
$
|
224,928
|
|
|
|
(a)
|
Amount to write-down
the carrying value of containers held for sale to their estimated
fair value less costs to sell for the year ended December 31, 2018
has been reclassified out of the previously reported line item
"container impairment" and included within "depreciation expense"
to conform with the 2019 presentation.
|
|
|
(b)
|
Amounts for container
write-off and container recovery costs from lessee default for the
year ended 31, 2018 has been reclassified out of the previously
reported line item "container impairment" and "direct container
expense – owned fleet" and included within "container lessee
default expense, net" to conform with the 2019
presentation.
|
TEXTAINER GROUP HOLDINGS LIMITED AND
SUBSIDIARIES
Reconciliation of GAAP financial measures to
non-GAAP financial measures
Three Months and Years Ended December 31, 2019 and 2018
(Unaudited)
(All currency expressed in United
States dollars in thousands, except per share amounts)
The following is a reconciliation of certain U.S. generally
accepted accounting principles ("GAAP") measures to non-GAAP
financial measures (such items listed in (a) to (c) below
and defined as "Non-GAAP Measures") for the three months and years
ended December 31, 2019 and 2018, including:
(a)
|
net income
attributable to Textainer Group Holdings Limited common
shareholders to adjusted EBITDA (defined as net income attributable
to Textainer Group Holdings Limited common shareholders before
interest income and expense, write-off of unamortized deferred debt
issuance costs, realized loss (gain) on derivative instruments,
net, unrealized (gain) loss on derivative instruments, net, costs
associated with departing senior executives, gain on insurance
recovery and legal settlement, gain on settlement of pre-existing
management agreement, income tax expense, net income attributable
to the noncontrolling interests ("NCI"), depreciation expense,
container write-off from lessee default, amortization expense and
the related impact of reconciling items on net income attributable
to the NCI);
|
|
|
(b)
|
net income
attributable to Textainer Group Holdings Limited common
shareholders to adjusted net income (defined as net income
attributable to Textainer Group Holdings Limited common
shareholders before the write-off of unamortized deferred debt
issuance costs, unrealized (gain) loss on derivative instruments,
net, costs associated with departing senior executives, gain on
insurance recovery and legal settlement, gain on settlement of
pre-existing management agreement, the related impact of
reconciling items on income tax expense and net income attributable
to the NCI); and
|
|
|
(c)
|
net income
attributable to Textainer Group Holdings Limited common
shareholders to headline earnings (defined as net income
attributable to Textainer Group Holdings Limited common
shareholders before the container impairment to write down the
carrying value of containers held for sale to their estimated fair
value less costs to sell and for container write-off from lessee
default, costs associated with departing senior executives, gain on
insurance recovery and legal settlement, gain on settlement of
pre-existing management agreement, the related impact of
reconciling items on income tax expense and net income attributable
to the NCI). Headline earnings and headline earnings per basic and
dilute common share is calculated from net income which has been
determined based on GAAP.
|
|
|
|
The inclusion of
headline earnings in this press release is a requirement of our
listing on the JSE.
|
Non-GAAP Measures are not financial measures calculated in
accordance with GAAP and should not be considered as an alternative
to net income, income from operations or any other performance
measures derived in accordance with GAAP or as an alternative to
cash flows from operating activities as a measure of our liquidity.
Non-GAAP Measures are presented solely as supplemental disclosures.
Management believes that adjusted EBITDA may be a useful
performance measure that is widely used within our industry and
adjusted net income may be a useful performance measure because
Textainer intends to hold its derivative instruments until maturity
and over the life of a derivative instrument the unrealized (gain)
loss will net to zero. Non-GAAP measures are not calculated in the
same manner by all companies and, accordingly, may not be an
appropriate measure for comparison.
Management also believes that adjusted net income and adjusted
net income per diluted common share are useful in evaluating our
operating performance because unrealized (gain) loss on derivative
instruments, net, is a noncash, non-operating item. We believe
Non-GAAP Measures provide useful information on our earnings from
ongoing operations. We believe that adjusted EBITDA provides useful
information on our ability to service our long-term debt and other
fixed obligations and on our ability to fund our expected growth
with internally generated funds. Non-GAAP Measures have limitations
as analytical tools, and you should not consider either of them in
isolation, or as a substitute for analysis of our operating results
or cash flows as reported under GAAP. Some of these limitations
are:
- They do not reflect our cash expenditures, or future
requirements, for capital expenditures or contractual
commitments;
- They do not reflect changes in, or cash requirements for, our
working capital needs;
- Adjusted EBITDA does not reflect interest expense or cash
requirements necessary to service interest or principal payments on
our debt;
- Although depreciation expense and container impairment are a
noncash charge, the assets being depreciated may be replaced in the
future, and neither adjusted EBITDA, adjusted net income or
adjusted net income per diluted common share reflects any cash
requirements for such replacements;
- They are not adjusted for all noncash income or expense items
that are reflected in our statements of cash flows; and
- Other companies in our industry may calculate these measures
differently than we do, limiting their usefulness as comparative
measures.
|
Three Months
Ended
|
|
|
Years
Ended
|
|
|
December
31,
|
|
|
December
31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
(Dollars in
thousands)
|
|
|
(Dollars in
thousands)
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Reconciliation of
adjusted net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Textainer Group Holdings Limited common shareholders
|
$
|
28,782
|
|
|
$
|
12,241
|
|
|
$
|
56,724
|
|
|
$
|
50,378
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-off of
unamortized deferred debt issuance costs
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
881
|
|
Unrealized (gain) loss
on derivative instruments, net
|
|
(2,873)
|
|
|
|
8,038
|
|
|
|
15,442
|
|
|
|
5,790
|
|
Costs associated with
departing senior executives
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,368
|
|
Gain on insurance
recovery and legal settlement
|
|
(14,040)
|
|
|
|
(8,692)
|
|
|
|
(14,881)
|
|
|
|
(8,692)
|
|
Gain on settlement of
pre-existing management agreement
|
|
(1,823)
|
|
|
|
—
|
|
|
|
(1,823)
|
|
|
|
—
|
|
Impact of reconciling
items on income tax expense (benefit)
|
|
551
|
|
|
|
6
|
|
|
|
378
|
|
|
|
(478)
|
|
Impact of reconciling
items on net income (loss) attributable to the noncontrolling interests
|
|
380
|
|
|
|
324
|
|
|
|
(465)
|
|
|
|
1,224
|
|
Adjusted net
income
|
$
|
10,977
|
|
|
$
|
11,917
|
|
|
$
|
55,375
|
|
|
$
|
51,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income per diluted common share
|
$
|
0.19
|
|
|
$
|
0.21
|
|
|
$
|
0.96
|
|
|
$
|
0.90
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2019
|
|
|
2018
|
|
2019
|
|
|
2018
|
|
|
(Dollars in
thousands)
|
|
(Dollars in
thousands)
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Reconciliation of
adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Textainer Group Holdings Limited common shareholders
|
$
|
28,782
|
|
|
$
|
12,241
|
|
|
$
|
56,724
|
|
|
$
|
50,378
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
(458)
|
|
|
|
(556)
|
|
|
|
(2,505)
|
|
|
|
(1,709)
|
|
Interest
expense
|
|
37,486
|
|
|
|
36,589
|
|
|
|
153,185
|
|
|
|
138,427
|
|
Write-off of
unamortized deferred debt issuance costs
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
881
|
|
Realized loss (gain)
on derivative instruments, net
|
|
763
|
|
|
|
(1,287)
|
|
|
|
(1,946)
|
|
|
|
(5,238)
|
|
Unrealized (gain) loss
on derivative instruments, net
|
|
(2,873)
|
|
|
|
8,038
|
|
|
|
15,442
|
|
|
|
5,790
|
|
Costs associated with
departing senior executives
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,368
|
|
Gain on insurance
recovery and legal settlement
|
|
(14,040)
|
|
|
|
(8,692)
|
|
|
|
(14,881)
|
|
|
|
(8,692)
|
|
Gain on settlement of
pre-existing management agreement
|
|
(1,823)
|
|
|
|
—
|
|
|
|
(1,823)
|
|
|
|
—
|
|
Income tax
expense
|
|
478
|
|
|
|
763
|
|
|
|
1,948
|
|
|
|
2,025
|
|
Net income (loss)
attributable to the noncontrolling interests
|
|
407
|
|
|
|
547
|
|
|
|
(168)
|
|
|
|
3,872
|
|
Depreciation
expense
|
|
66,129
|
|
|
|
64,801
|
|
|
|
260,372
|
|
|
|
249,500
|
|
Container write-off
from lessee default, net
|
|
25
|
|
|
|
4,554
|
|
|
|
7,179
|
|
|
|
12,980
|
|
Amortization
expense
|
|
517
|
|
|
|
502
|
|
|
|
2,093
|
|
|
|
3,721
|
|
Impact of reconciling
items on net income (loss) attributable to the noncontrolling interests
|
|
(2,206)
|
|
|
|
(2,500)
|
|
|
|
(11,305)
|
|
|
|
(11,213)
|
|
Adjusted
EBITDA
|
$
|
113,187
|
|
|
$
|
115,000
|
|
|
$
|
464,315
|
|
|
$
|
443,090
|
|
|
Three Months
Ended
|
|
|
Years
Ended
|
|
December
31,
|
|
|
December
31,
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
(Dollars in
thousands)
|
|
|
(Dollars in
thousands)
|
|
(Unaudited)
|
|
|
(Unaudited)
|
Reconciliation of
headline earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Textainer Group Holdings Limited common shareholders
|
$
|
28,782
|
|
|
$
|
12,241
|
|
|
$
|
56,724
|
|
|
$
|
50,378
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Container
impairment
|
|
4,348
|
|
|
|
8,221
|
|
|
|
21,417
|
|
|
|
26,775
|
Costs associated with
departing senior executives
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,368
|
Gain on insurance
recovery and legal settlement
|
|
(14,040)
|
|
|
|
(8,692)
|
|
|
|
(14,881)
|
|
|
|
(8,692)
|
Gain on settlement of
pre-existing management agreement
|
|
(1,823)
|
|
|
|
—
|
|
|
|
(1,823)
|
|
|
|
—
|
Impact of reconciling
items on income tax expense
|
|
477
|
|
|
|
5
|
|
|
|
319
|
|
|
|
(670)
|
Impact of reconciling
items attributable to the noncontrolling interests
|
|
100
|
|
|
|
682
|
|
|
|
(363)
|
|
|
|
112
|
Headline
earnings
|
$
|
17,844
|
|
|
$
|
12,457
|
|
|
$
|
61,393
|
|
|
$
|
70,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Headline earnings
per basic common share
|
$
|
0.31
|
|
|
$
|
0.22
|
|
|
$
|
1.07
|
|
|
$
|
1.23
|
Headline earnings
per diluted common share
|
$
|
0.31
|
|
|
$
|
0.22
|
|
|
$
|
1.07
|
|
|
$
|
1.22
|
View original
content:http://www.prnewswire.com/news-releases/textainer-group-holdings-limited-reports-fourth-quarter-and-full-year-2019-results-301003222.html
SOURCE Textainer Group Holdings Limited