WillScot Mobile Mini Holdings Reports Third Quarter 2022
Results
WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini
Holdings” or the “Company”) (Nasdaq: WSC), the North American
leader in innovative flexible workspace and portable storage
solutions, today announced third quarter 2022 results and provided
an update on operations and the current market environment,
including the following highlights:
- Execution across organic and
inorganic growth levers in continuing operations resulted in third
quarter revenue of $604 million, income from continuing operations
of $86 million and Adjusted EBITDA of $251 million. These results
exclude our prior Tank and Pump segment, which was divested on
September 30th and is reported as discontinued operations in all
periods. Including results from discontinued operations, net income
was $129 million and Adjusted EBITDA was $264 million.
- Adjusted EBITDA Margin from
continuing operations of 41.6% expanded 270 basis points
year-over-year.
- Generated $210 million of Cash
From Operations and $83 million of Free Cash Flow in the
quarter, up 61.3% and 6.2% respectively, year-over-year, with Free
Cash Flow Margin of 12% over the last twelve months.
- Closed four acquisitions of
regional and local storage and modular companies in Q3 2022 and 13
acquisitions in the last twelve months with consistent pipeline
heading into 2023.
- Returned $197 million to
shareholders by repurchasing 5.3 million shares of Common Stock
during the quarter, reducing economic share count by 6.4% over the
last twelve months as of September 30, 20221.
- Reduced leverage to 3.4x Net Debt
to LTM Adjusted EBITDA.
- Updated full-year 2022 Adjusted
EBITDA outlook range from continuing operations to between $910
million and $930 million, representing 30% to 33% growth versus
2021.
Brad Soultz, Chief Executive Officer of WillScot Mobile Mini
Holdings, commented, "Our strong commercial performance continued
in the third quarter. Volumes, average monthly rates, and Value
Added Products (VAPS) penetration grew, and along with the
sequential stabilization of SG&A, resulted in Consolidated
Adjusted EBITDA margins of 41.6% expanding by 270 basis points
year-over-year and 140 basis points sequentially. As we position
for 2023, we are particularly focused on our cross-selling
initiatives to continue driving volumes. To support and extend our
rate trajectory, we continue to evolve our commercial approach for
portable storage units and ground level offices. Our sales team is
shifting from transactional to value-based selling as we emphasize
our differentiated value proposition with product positioning,
best-in-class logistics and customer service, and VAPS. These
idiosyncratic growth levers represent powerful tailwinds that give
us visibility into lease revenue growth well beyond 2023."
Soultz continued, "The consistent, compounding growth of our
core segments and the successful divestiture of the Tank and Pump
segment during the quarter together reduced leverage from 3.7x in
Q2 to 3.4x in Q3 and comfortably within our target 3.0x - 3.5x
range. The capital from the divestiture is already being redeployed
consistent with our capital allocation framework, including
re-investment in our Modular and Storage segments, continued
M&A, and returns to shareholders."
Soultz concluded, "With Adjusted EBITDA from continuing
operations of $251 million in Q3 and our updated outlook range, we
are clearly on track to eclipse the $1 billion Adjusted EBITDA
run-rate milestone that we set at our November 2021 Investor Day. I
am excited to further focus our team on our core business as we
complete an incredibly successful 2022 and look forward to
2023."
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in thousands, except share data) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue |
$ |
604,173 |
|
|
$ |
461,047 |
|
|
$ |
1,632,339 |
|
|
$ |
1,295,634 |
|
Income from continuing
operations |
$ |
85,728 |
|
|
$ |
57,113 |
|
|
$ |
200,099 |
|
|
$ |
75,278 |
|
Adjusted EBITDA2 |
$ |
251,339 |
|
|
$ |
179,203 |
|
|
$ |
652,529 |
|
|
$ |
499,359 |
|
Adjusted EBITDA Margin
(%)2 |
|
41.6 |
% |
|
|
38.9 |
% |
|
|
40.0 |
% |
|
|
38.5 |
% |
Net cash provided by operating
activities |
$ |
210,385 |
|
|
$ |
130,447 |
|
|
$ |
544,238 |
|
|
$ |
392,055 |
|
Free Cash Flow2,5 |
$ |
83,386 |
|
|
$ |
78,493 |
|
|
$ |
207,428 |
|
|
$ |
251,709 |
|
Fully Diluted Shares
Outstanding |
|
217,927,725 |
|
|
|
231,868,397 |
|
|
|
223,933,319 |
|
|
|
234,084,800 |
|
Free Cash Flow Margin
(%)2,5 |
|
13.1 |
% |
|
|
16.0 |
% |
|
|
12.0 |
% |
|
|
18.3 |
% |
Return on Invested
Capital2 |
|
16.3 |
% |
|
|
12.7 |
% |
|
|
14.2 |
% |
|
|
11.1 |
% |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
Adjusted EBITDA by Segment (in
thousands)2 |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
NA Modular |
$ |
140,673 |
|
$ |
106,825 |
|
$ |
372,502 |
|
$ |
307,741 |
NA Storage |
|
98,695 |
|
|
59,123 |
|
|
243,282 |
|
|
154,971 |
UK Storage |
|
11,971 |
|
|
13,255 |
|
|
36,745 |
|
|
36,647 |
Consolidated Adjusted
EBITDA |
$ |
251,339 |
|
$ |
179,203 |
|
$ |
652,529 |
|
$ |
499,359 |
Third Quarter
2022
Results2
Tim Boswell, President and Chief Financial Officer of WillScot
Mobile Mini Holdings, commented, "Our strong commercial execution
translated into outstanding financial results and an accelerating
run-rate heading into 2023. With the divestiture of our Tank and
Pump segment, we are more streamlined and more focused. The results
of that segment are reported as discontinued operations in Q3 and
all prior periods. From our continuing operations, revenues of $604
million increased by 31%, Adjusted EBITDA of $251 million increased
by 40%, and Income from continuing operations of $86 million and
diluted EPS from continuing operations of $0.39 increased by 50%
and 66%, respectively. Consolidated Adjusted EBITDA margin of 41.6%
expanded by 270 basis points, with the predictable compounding
effects of pricing and VAPS offsetting inflationary pressures and
variable costs in what was our strongest quarter for Modular
deliveries since 2019. Our ability to pass through costs
effectively was evident across all revenue streams and particularly
in our Delivery and Installation services, where margins expanded
by 870 basis points year-over-year, and the team is executing
multiple initiatives to optimize rates and costs. And most
importantly, this good work is all driving cash flows from
operations, which increased 61% year-over-year to $210 million, and
Free Cash Flow of $83 million increased 6%
year-over-year."
Boswell continued, "With the close of the Tank and Pump
divestiture, we reduced leverage to 3.4x, which when combined with
the expected predictable growth of our cash flows heading into 2023
gives us extraordinary capital allocation flexibility. In the third
quarter, we continued to invest organically in storage fleet,
modular refurbishments, and VAPS. We invested $105 million in
acquisitions. And we repurchased $197 million of our common stock
in Q3, reducing our economic share count by 6.4% over the last
twelve months."
Boswell concluded, "Given our performance year to date and
excluding results from the divested Tank and Pump segment, we are
raising our full year guidance for our continuing operations to
$2.22 billion to $2.27 billion of revenue and $910 million to $930
million of Adjusted EBITDA. For reference, comparable guidance
including the Tank and Pump segment for all of 2022 would have been
$955 million to $980 million of Adjusted EBITDA. Importantly,
acquisitions and outperformance in the third quarter in our core
Modular and Storage segments completely offset the earnings
divested with the Tank and Pump segment, such that we believe that
our run-rate heading into 2023 is unchanged but with a more
streamlined portfolio and a superior revenue mix. As we moderate
organic capital expenditures heading into Q4 and 2023, we remain on
track to achieve our $500M Free Cash Flow run-rate. And we remain
incredibly convicted in our $1B portfolio of idiosyncratic growth
drivers that we discussed at our November 2021 Investor Day and
equally confident in the consistent execution by our team in all
operating environments."
Consolidated Q3 2022
Results
- Revenue of
$604.2 million increased by 31.1% year-over-year due to organic
revenue growth levers in the business and due to the impact of
acquisitions. Recent acquisitions contributed approximately $22.4
million to total revenues.
- Adjusted EBITDA of $251.3 million
increased by 40.2% year-over-year and Consolidated Adjusted EBITDA
margin of 41.6% increased by 270 basis points year-over-year due to
strong pricing and volume trends and an 870 basis point expansion
of delivery and installation margins, partially offset by increased
variable leasing costs from higher activity levels, as well as
continuing inflationary pressures.
- Including
results from discontinued operations, Adjusted EBITDA was $264.4
million.
NA Modular
- Revenue of
$375.4 million increased by 25.5% year-over-year.
- Average modular
space monthly rental rate increased $157 year-over-year, or 18.8%,
to $991.
- Average modular
space units on rent increased 3,146 units year-over-year, or 3.7%,
to 87,364. Units on rent have grown 5.1% year-to-date from
12/31/2021 to 9/30/2022, which has been split evenly between
organic growth and via acquisition.
- Value Added
Products (VAPS) average monthly rate, a component of average
modular space monthly rental rate above, increased $56
year-over-year, or 24%, to $287. For delivered units over the last
12 months, VAPS average monthly rate increased $57 year-over-year,
or 15%, to $439.
- Adjusted EBITDA
of $140.7 million increased by 31.8% year-over-year and Adjusted
EBITDA Margin of 37.5% expanded by 176 basis points.
NA Storage
- Revenue of
$202.6 million increased by 51.3% year-over-year.
- Average portable
storage monthly rental rate increased $42 year-over-year, or 27.1%,
to $197.
- Average portable
storage units on rent increased by 38,823 units year-over-year, or
28.3%, to 175,946. Of this increase, approximately 19,000 of the
units on rent increase was driven by organic volume growth. The
remainder of the increase was driven by the acquisition of
approximately 20,000 average units on rent from Q4 2021 to Q3
2022.
- Adjusted EBITDA
of $98.7 million increased by 66.9% year-over-year and Adjusted
EBITDA Margin of 48.7% expanded by 455 basis points.
UK Storage
- Revenue of $26.2
million decreased 6.8% year-over-year and Adjusted EBITDA of $12.0
million decreased by 9.8%, driven entirely by the weakening of the
British Pound relative to the US Dollar. In local currency, revenue
increased 9.1% year-over-year, driven by a 13.6% increase in
portable storage average monthly rental rates and an 8.4% increase
in average portable storage units on rent, and Adjusted EBITDA
increased by 5.7% year-over-year.
Tank and Pump (Discontinued
Operations)
- Completed
divestiture of Tank and Pump segment effective September 30, 2022.
Earnings from the Tank and Pump segment are reported as
discontinued operations in the third quarter of 2022 and all prior
periods. Proceeds from the sale, valued at approximately $323
million, were used to reduce the outstanding balance on our asset
backed revolving credit facility and pay off related capital
leases. The divestiture resulted in a one-time gain on sale of
discontinued operations of $34.0 million in the quarter.
Capitalization and Liquidity
Update2
As of September 30, 2022:
- Repurchased 5.3
million shares of Common Stock for $197 million in the third
quarter 2022, contributing to a 6.4% reduction in our economic
share count over the last twelve months.
- Maintained
$1.1 billion of excess availability under the asset-backed
revolving credit facility; a flexible covenant structure and
expected free cash flow acceleration will provide ample liquidity
to fund multiple capital allocation priorities.
- As of September
30, 2022, weighted average interest rate was approximately 4.75%
and annual cash interest expense based on the current debt
structure and benchmark rates was approximately $142 million.
- No debt
maturities prior to 2025.
- Reduced leverage
to 3.4x last twelve months Adjusted EBITDA from continuing
operations of $852 million, within our target range of 3.0x to
3.5x, while supporting strong organic demand, executing four
tuck-in transactions, and repurchasing shares.
2022 Outlook
2, 3, 4
This guidance is subject to risks and
uncertainties, including those described in "Forward-Looking
Statements" below.
$M |
2021 ResultsIncluding
T&P |
Previous ' 22 OutlookIncluding T&P for
FY'22 |
Current '22 OutlookIncluding T&P for
FY'22 |
2021 ResultsExcluding
T&P |
Current '22 OutlookExcluding T&P for
FY'22 |
Revenue |
$1,895 |
$2,200 - $2,300 |
$2,340 - $2,400 |
$1,784 |
$2,220 - $2,270 |
Adjusted EBITDA2,3 |
$740 |
$900 - $940 |
$955 - $980 |
$699 |
$910 - $930 |
Net CAPEX3,4 |
$237 |
$325 - $375 |
$390 - $435 |
$221 |
$370 - $410 |
1 - Assumes common shares outstanding plus
treasury stock method from warrants outstanding as of September 30,
2022 versus September 30, 2021 and the closing stock price of
$40.33 on September 30, 2022.2 - Adjusted EBITDA, Adjusted EBITDA
Margin, Free Cash Flow, Free Cash Flow Margin, and Return on
Invested Capital are non-GAAP financial measures. Further
information and reconciliations for these non-GAAP measures to the
most directly comparable financial measure under generally accepted
accounting principles in the US ("GAAP") are included at the end of
this press release.3 - Information reconciling forward-looking
Adjusted EBITDA and Net CAPEX to GAAP financial measures is
unavailable to the Company without unreasonable effort and
therefore no reconciliation to the most comparable GAAP measures is
provided.4 - Net CAPEX is a non-GAAP financial measure. Please see
the non-GAAP reconciliation tables included at the end of this
press release.5 - Free Cash Flow incorporates results from
discontinued operations. For comparability, reported revenue is
adjusted to include results from discontinued operations to
calculate Free Cash Flow Margin.
Non-GAAP Financial Measures
This press release includes non-GAAP financial
measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Free
Cash Flow, Free Cash Flow Margin, Return on Invested Capital,
Adjusted Gross Profit, Adjusted Gross Profit Percentage, Income
From Continuing Operations Excluding Gain/Loss from Warrants, and
Net CAPEX. Adjusted EBITDA is defined as net income (loss) plus net
interest (income) expense, income tax expense (benefit),
depreciation and amortization adjusted to exclude certain non-cash
items and the effect of what we consider transactions or events not
related to our core business operations, including net currency
gains and losses, goodwill and other impairment charges,
restructuring costs, costs to integrate acquired companies, costs
incurred related to transactions, non-cash charges for stock
compensation plans, gains and losses resulting from changes in fair
value and extinguishment of common stock warrant liabilities, and
other discrete expenses. Adjusted EBITDA Margin is defined as
Adjusted EBITDA divided by revenue. Free Cash Flow is defined as
net cash provided by operating activities, less purchases of, and
proceeds from, rental equipment and property, plant and equipment,
which are all included in cash flows from investing activities.
Free Cash Flow Margin is defined as Free Cash Flow divided by
revenue. Return on Invested Capital is defined as adjusted earnings
before interest and amortization divided by net assets. Adjusted
earnings before interest and amortization is the sum of income
(loss) before income tax expense, net interest (income) expense,
amortization adjusted for non-cash items considered non-core to
business operations including net currency (gains) losses, goodwill
and other impairment charges, restructuring costs, costs to
integrate acquired companies, non-cash charges for stock
compensation plans, gains and losses resulting from changes in fair
value and extinguishment of common stock warrant liabilities, and
other discrete expenses, reduced by our estimated statutory tax
rate. Given we are not a significant US taxpayer due to our current
tax attributes, we include estimated taxes at our current statutory
tax rate of approximately 25%. Net assets is total assets less
goodwill and intangible assets, net and all non-interest bearing
liabilities and is calculated as a five quarter average. Adjusted
Gross Profit is defined as gross profit plus depreciation of rental
equipment. Adjusted Gross Profit Percentage is defined as Adjusted
Gross Profit divided by revenue. Income From Continuing Operations
Excluding Gain/Loss from Warrants is defined as income from
continuing operations plus or minus the change in the fair value of
the common stock warrant liability. Net CAPEX is defined as
purchases of rental equipment and refurbishments and purchases of
property, plant and equipment (collectively, "Total Capital
Expenditures"), less proceeds from the sale of rental equipment and
proceeds from the sale of property, plant and equipment
(collectively, "Total Proceeds"), which are all included in cash
flows from investing activities. The Company believes that Adjusted
EBITDA and Adjusted EBITDA margin are useful to investors because
they (i) allow investors to compare performance over various
reporting periods on a consistent basis by removing from operating
results the impact of items that do not reflect core operating
performance; (ii) are used by our board of directors and management
to assess our performance; (iii) may, subject to the limitations
described below, enable investors to compare the performance of the
Company to its competitors; (iv) provide additional tools for
investors to use in evaluating ongoing operating results and
trends; and (v) align with definitions in our credit agreement. The
Company believes that Free Cash Flow and Free Cash Flow Margin are
useful to investors because they allow investors to compare cash
generation performance over various reporting periods and against
peers. The Company believes that Return on Invested Capital
provides information about the long-term health and profitability
of the business relative to the Company's cost of capital. The
Company believes that Adjusted Gross Profit and Adjusted Gross
Profit Percentage are useful to investors because they allow
investors to assess gross profit excluding non-cash expenses, which
provides useful information regarding our results of operations and
assists in analyzing the underlying performance of our business.
The Company believes that Income from Continuing Operations
Excluding Gain/Loss from Warrants is useful to investors because it
removes the impact of stock market volatility from our operational
results. The Company believes that the presentation of Net CAPEX
provides useful information to investors regarding the net capital
invested into our rental fleet and plant, property and equipment
each year to assist in analyzing the performance of our business.
Adjusted EBITDA is not a measure of financial performance or
liquidity under GAAP and, accordingly, should not be considered as
an alternative to net income or cash flow from operating activities
as an indicator of operating performance or liquidity. These
non-GAAP measures should not be considered in isolation from, or as
an alternative to, financial measures determined in accordance with
GAAP. Other companies may calculate Adjusted EBITDA and other
non-GAAP financial measures differently, and therefore the
Company's non-GAAP financial measures may not be directly
comparable to similarly-titled measures of other companies. For
reconciliation of the non-GAAP measures used in this press release
(except as explained below), see “Reconciliation of Non-GAAP
Financial Measures" included in this press release.
Information reconciling forward-looking Adjusted
EBITDA to GAAP financial measures is unavailable to the Company
without unreasonable effort. We cannot provide reconciliations of
forward-looking Adjusted EBITDA to GAAP financial measures because
certain items required for such reconciliations are outside of our
control and/or cannot be reasonably predicted, such as the
provision for income taxes. Preparation of such reconciliations
would require a forward-looking balance sheet, statement of income
and statement of cash flow, prepared in accordance with GAAP, and
such forward-looking financial statements are unavailable to the
Company without unreasonable effort. Although we provide a range of
Adjusted EBITDA that we believe will be achieved, we cannot
accurately predict all the components of the Adjusted EBITDA
calculation. The Company provides Adjusted EBITDA guidance because
we believe that Adjusted EBITDA, when viewed with our results under
GAAP, provides useful information for the reasons noted above.
Conference Call
InformationWillScot Mobile Mini Holdings will host a
conference call and webcast to discuss its third quarter 2022
results and outlook at 10 a.m. Eastern Time on Thursday,
November 3, 2022. To access the live call by phone, use the
following link:
https://register.vevent.com/register/BI099db532a3254e9db65c846dcc68cbdb.
You will be provided with dial-in details after registering. To
avoid delays, we recommend that participants dial into the
conference call 15 minutes ahead of the scheduled start time.
A live webcast will also be accessible via the "Events &
Presentations" section of the Company's investor relations website
www.willscotmobilemini.com. Choose "Events" and select the
information pertaining to the WillScot Mobile Mini Holdings Third
Quarter 2022 Conference Call. Additionally, there will be slides
accompanying the webcast. Please allow at least 15 minutes prior to
the call to register, download and install any necessary software.
For those unable to listen to the live broadcast, an audio webcast
of the call will be available for 12 months on the Company’s
investor relations website.
About WillScot Mobile Mini
Holdings
WillScot Mobile Mini Holdings trades on the
Nasdaq stock exchange under the ticker symbol “WSC.” Headquartered
in Phoenix, Arizona, the Company is a leading business services
provider specializing in innovative flexible workspace and portable
storage solutions. WillScot Mobile Mini services diverse end
markets across all sectors of the economy from a network of
approximately 260 branch locations and additional drop lots
throughout the United States, Canada, Mexico, and the United
Kingdom.
Forward-Looking StatementsThis
press release contains forward-looking statements (including the
guidance/outlook contained herein) within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995 and Section 21E of
the Securities Exchange Act of 1934, as amended. The words
"estimates," "expects," "anticipates," "believes," "forecasts,"
"plans," "intends," "may," "will," "should," "shall," "outlook,"
"guidance" and variations of these words and similar expressions
identify forward-looking statements, which are generally not
historical in nature. Certain of these forward-looking statements
include statements relating to: our pipeline, acceleration of our
run rate, acceleration toward and the timing of our achievement of
our three to five year milestones, growth and acceleration of cash
flow, drive higher returns on invested capital, and Adjusted EBITDA
margin expansion. Forward-looking statements are subject to a
number of risks, uncertainties, assumptions and other important
factors, many of which are outside our control, which could cause
actual results or outcomes to differ materially from those
discussed in the forward-looking statements. Although the Company
believes that these forward-looking statements are based on
reasonable assumptions, they are predictions and we can give no
assurance that any such forward-looking statement will materialize.
Important factors that may affect actual results or outcomes
include, among others, our ability to acquire and integrate new
assets and operations; our ability to achieve planned synergies
related to acquisitions; our ability to successfully execute our
growth strategy, manage growth and execute our business plan; our
estimates of the size of the markets for our products; the rate and
degree of market acceptance of our products; the success of other
competing modular space and portable storage solutions that exist
or may become available; rising costs and inflationary pressures
adversely affecting our profitability; potential litigation
involving our Company; general economic and market conditions
impacting demand for our products and services and our ability to
benefit from an inflationary environment; our ability to maintain
an effective system of internal controls; and such other risks and
uncertainties described in the periodic reports we file with the
SEC from time to time (including our Form 10-K for the year ended
December 31, 2021), which are available through the SEC’s EDGAR
system at www.sec.gov and on our website. Any forward-looking
statement speaks only at the date which it is made, and the Company
disclaims any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
Additional Information and Where to Find It
Additional information can be found on the
company's website at www.willscotmobilemini.com.
Contact
Information |
|
|
|
|
|
Investor
Inquiries: |
|
Media
Inquiries: |
Nick Girardi |
|
Jessica Taylor |
investors@willscotmobilemini.com |
|
jetaylor@willscotmobilemini.com |
|
|
|
WillScot Mobile Mini Holdings
Corp.Condensed Consolidated Statements of
Operations (Unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in thousands, except share and per share
data) |
|
2022 |
|
|
|
2021 |
|
|
2022 |
|
|
|
2021 |
Revenues: |
|
|
|
|
|
|
|
Leasing and services revenue: |
|
|
|
|
|
|
|
Leasing |
$ |
447,535 |
|
|
$ |
342,599 |
|
$ |
1,226,206 |
|
|
$ |
965,894 |
Delivery and installation |
|
132,837 |
|
|
|
91,910 |
|
|
341,027 |
|
|
|
252,914 |
Sales revenue: |
|
|
|
|
|
|
|
New units |
|
9,901 |
|
|
|
15,370 |
|
|
26,232 |
|
|
|
35,915 |
Rental units |
|
13,900 |
|
|
|
11,168 |
|
|
38,874 |
|
|
|
40,911 |
Total revenues |
|
604,173 |
|
|
|
461,047 |
|
|
1,632,339 |
|
|
|
1,295,634 |
Costs: |
|
|
|
|
|
|
|
Costs of leasing and services: |
|
|
|
|
|
|
|
Leasing |
|
111,898 |
|
|
|
77,967 |
|
|
288,774 |
|
|
|
222,747 |
Delivery and installation |
|
95,680 |
|
|
|
74,221 |
|
|
256,130 |
|
|
|
209,963 |
Costs of sales: |
|
|
|
|
|
|
|
New units |
|
6,007 |
|
|
|
11,175 |
|
|
15,469 |
|
|
|
24,322 |
Rental units |
|
7,097 |
|
|
|
5,468 |
|
|
21,123 |
|
|
|
22,441 |
Depreciation of rental equipment |
|
69,159 |
|
|
|
52,990 |
|
|
192,228 |
|
|
|
165,027 |
Gross profit |
|
314,332 |
|
|
|
239,226 |
|
|
858,615 |
|
|
|
651,134 |
Expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
|
145,444 |
|
|
|
127,346 |
|
|
445,319 |
|
|
|
356,651 |
Other depreciation and amortization |
|
17,066 |
|
|
|
16,459 |
|
|
50,895 |
|
|
|
51,793 |
Lease impairment expense and other related charges |
|
— |
|
|
|
601 |
|
|
254 |
|
|
|
2,328 |
Restructuring costs |
|
— |
|
|
|
1,856 |
|
|
(86 |
) |
|
|
11,956 |
Currency losses, net |
|
236 |
|
|
|
127 |
|
|
247 |
|
|
|
196 |
Other (income) expense, net |
|
(2,526 |
) |
|
|
1,475 |
|
|
(7,642 |
) |
|
|
202 |
Operating income |
|
154,112 |
|
|
|
91,362 |
|
|
369,628 |
|
|
|
228,008 |
Interest expense |
|
38,165 |
|
|
|
29,006 |
|
|
102,362 |
|
|
|
87,793 |
Fair value loss on common stock warrant liabilities |
|
— |
|
|
|
— |
|
|
— |
|
|
|
26,597 |
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
— |
|
|
|
5,999 |
Income
from continuing operations before income tax |
|
115,947 |
|
|
|
62,356 |
|
|
267,266 |
|
|
|
107,619 |
Income tax expense from continuing operations |
|
30,219 |
|
|
|
5,243 |
|
|
67,167 |
|
|
|
32,341 |
Income
from continuing operations |
|
85,728 |
|
|
|
57,113 |
|
|
200,099 |
|
|
|
75,278 |
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
Income from discontinued operations before income tax |
|
10,802 |
|
|
|
5,391 |
|
|
24,488 |
|
|
|
14,255 |
Income tax expense from discontinued operations |
|
1,986 |
|
|
|
1,401 |
|
|
5,496 |
|
|
|
3,612 |
Gain on sale of discontinued operations |
|
34,049 |
|
|
|
— |
|
|
34,049 |
|
|
|
— |
Income from discontinued
operations |
|
42,865 |
|
|
|
3,990 |
|
|
53,041 |
|
|
|
10,643 |
|
|
|
|
|
|
|
|
Net income |
$ |
128,593 |
|
|
$ |
61,103 |
|
$ |
253,140 |
|
|
$ |
85,921 |
|
|
|
|
|
|
|
|
Earnings
per share from continuing operations: |
|
|
|
|
|
|
|
Basic |
$ |
0.40 |
|
|
$ |
0.25 |
|
$ |
0.91 |
|
|
$ |
0.33 |
Diluted |
$ |
0.39 |
|
|
$ |
0.24 |
|
$ |
0.89 |
|
|
$ |
0.32 |
Earnings
per share from discontinued operations: |
|
|
|
|
|
|
|
Basic |
$ |
0.20 |
|
|
$ |
0.02 |
|
$ |
0.24 |
|
|
$ |
0.05 |
Diluted |
$ |
0.20 |
|
|
$ |
0.02 |
|
$ |
0.24 |
|
|
$ |
0.05 |
Earnings
per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.60 |
|
|
$ |
0.27 |
|
$ |
1.15 |
|
|
$ |
0.38 |
Diluted |
$ |
0.59 |
|
|
$ |
0.26 |
|
$ |
1.13 |
|
|
$ |
0.37 |
Weighted
average shares: |
|
|
|
|
|
|
|
Basic |
|
213,636,876 |
|
|
|
225,998,202 |
|
|
219,312,260 |
|
|
|
227,557,664 |
Diluted |
|
217,927,725 |
|
|
|
231,868,397 |
|
|
223,933,319 |
|
|
|
234,084,800 |
Unaudited Segment Operating Data
Comparison of Three
Months Ended September 30, 2022 and
2021
|
Three Months Ended September 30, 2022 |
(in thousands, except for units on rent and
rates) |
NA Modular |
|
NA Storage |
|
UK Storage |
|
Total |
Revenue |
$ |
375,364 |
|
|
$ |
202,645 |
|
|
$ |
26,164 |
|
|
$ |
604,173 |
|
Gross
profit |
$ |
156,852 |
|
|
$ |
141,035 |
|
|
$ |
16,445 |
|
|
$ |
314,332 |
|
Adjusted
EBITDA |
$ |
140,673 |
|
|
$ |
98,695 |
|
|
$ |
11,971 |
|
|
$ |
251,339 |
|
Capital
expenditures for rental equipment |
$ |
81,052 |
|
|
$ |
41,246 |
|
|
$ |
4,605 |
|
|
$ |
126,903 |
|
Average
modular space units on rent |
|
87,364 |
|
|
|
18,052 |
|
|
|
8,569 |
|
|
|
113,985 |
|
Average
modular space utilization rate |
|
67.8 |
% |
|
|
73.7 |
% |
|
|
71.5 |
% |
|
|
68.9 |
% |
Average
modular space monthly rental rate |
$ |
991 |
|
|
$ |
746 |
|
|
$ |
391 |
|
|
$ |
907 |
|
Average
portable storage units on rent |
|
556 |
|
|
|
175,946 |
|
|
|
27,794 |
|
|
|
204,296 |
|
Average
portable storage utilization rate |
|
63.1 |
% |
|
|
88.8 |
% |
|
|
89.7 |
% |
|
|
88.9 |
% |
Average
portable storage monthly rental rate |
$ |
227 |
|
|
$ |
197 |
|
|
$ |
88 |
|
|
$ |
182 |
|
|
Three Months Ended September 30, 2021 |
(in thousands, except for units on rent and
rates) |
NA Modular |
|
NA Storage |
|
UK Storage |
|
Total |
Revenue |
$ |
299,051 |
|
|
$ |
133,897 |
|
|
$ |
28,099 |
|
|
$ |
461,047 |
|
Gross
profit |
$ |
127,854 |
|
|
$ |
92,496 |
|
|
$ |
18,876 |
|
|
$ |
239,226 |
|
Adjusted
EBITDA |
$ |
106,825 |
|
|
$ |
59,123 |
|
|
$ |
13,255 |
|
|
$ |
179,203 |
|
Capital
expenditures for rental equipment |
$ |
31,789 |
|
|
$ |
11,920 |
|
|
$ |
11,649 |
|
|
$ |
55,358 |
|
Average
modular space units on rent |
|
84,218 |
|
|
|
16,316 |
|
|
|
9,298 |
|
|
|
109,832 |
|
Average
modular space utilization rate |
|
67.6 |
% |
|
|
77.6 |
% |
|
|
83.4 |
% |
|
|
70.1 |
% |
Average
modular space monthly rental rate |
$ |
834 |
|
|
$ |
602 |
|
|
$ |
454 |
|
|
$ |
767 |
|
Average
portable storage units on rent |
|
493 |
|
|
|
137,123 |
|
|
|
25,632 |
|
|
|
163,248 |
|
Average
portable storage utilization rate |
|
48.0 |
% |
|
|
83.2 |
% |
|
|
89.1 |
% |
|
|
83.9 |
% |
Average
portable storage monthly rental rate |
$ |
179 |
|
|
$ |
155 |
|
|
$ |
90 |
|
|
$ |
145 |
|
Comparison of Nine
Months Ended September 30, 2022 and
2021
|
Nine Months Ended September 30, 2022 |
(in thousands, except for units on rent and
rates) |
NA Modular |
|
NA Storage |
|
UK Storage |
|
Total |
Revenue |
$ |
1,022,720 |
|
|
$ |
529,347 |
|
|
$ |
80,272 |
|
|
$ |
1,632,339 |
|
Gross
profit |
$ |
439,573 |
|
|
$ |
367,585 |
|
|
$ |
51,457 |
|
|
$ |
858,615 |
|
Adjusted
EBITDA |
$ |
372,502 |
|
|
$ |
243,282 |
|
|
$ |
36,745 |
|
|
$ |
652,529 |
|
Capital
expenditures for rental equipment |
$ |
221,111 |
|
|
$ |
95,699 |
|
|
$ |
21,824 |
|
|
$ |
338,634 |
|
Average
modular space units on rent |
|
86,310 |
|
|
|
18,223 |
|
|
|
8,470 |
|
|
|
113,003 |
|
Average
modular space utilization rate |
|
67.5 |
% |
|
|
74.7 |
% |
|
|
72.0 |
% |
|
|
68.9 |
% |
Average
modular space monthly rental rate |
$ |
936 |
|
|
$ |
673 |
|
|
$ |
409 |
|
|
$ |
853 |
|
Average
portable storage units on rent |
|
498 |
|
|
|
161,331 |
|
|
|
27,612 |
|
|
|
189,441 |
|
Average
portable storage utilization rate |
|
56.5 |
% |
|
|
86.0 |
% |
|
|
89.8 |
% |
|
|
86.4 |
% |
Average
portable storage monthly rental rate |
$ |
201 |
|
|
$ |
184 |
|
|
$ |
92 |
|
|
$ |
171 |
|
|
Nine Months Ended September 30, 2021 |
(in thousands, except for units on rent and
rates) |
NA Modular |
|
NA Storage |
|
UK Storage |
|
Total |
Revenue |
$ |
854,657 |
|
|
$ |
357,439 |
|
|
$ |
83,538 |
|
|
$ |
1,295,634 |
|
Gross
profit |
$ |
356,992 |
|
|
$ |
240,836 |
|
|
$ |
53,306 |
|
|
$ |
651,134 |
|
Adjusted
EBITDA |
$ |
307,741 |
|
|
$ |
154,971 |
|
|
$ |
36,647 |
|
|
$ |
499,359 |
|
Capital
expenditures for rental equipment |
$ |
120,288 |
|
|
$ |
24,165 |
|
|
$ |
22,645 |
|
|
$ |
167,098 |
|
Average
modular space units on rent |
|
84,589 |
|
|
|
16,371 |
|
|
|
9,256 |
|
|
|
110,216 |
|
Average
modular space utilization rate |
|
67.6 |
% |
|
|
78.5 |
% |
|
|
83.8 |
% |
|
|
70.2 |
% |
Average
modular space monthly rental rate |
$ |
790 |
|
|
$ |
570 |
|
|
$ |
428 |
|
|
$ |
727 |
|
Average
portable storage units on rent |
|
9,566 |
|
|
|
118,598 |
|
|
|
25,284 |
|
|
|
153,448 |
|
Average
portable storage utilization rate |
|
64.1 |
% |
|
|
78.0 |
% |
|
|
90.0 |
% |
|
|
78.7 |
% |
Average
portable storage monthly rental rate |
$ |
129 |
|
|
$ |
152 |
|
|
$ |
86 |
|
|
$ |
140 |
|
WillScot Mobile Mini Holdings
Corp.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except share data) |
|
September 30, 2022 |
|
December 31, 2021 |
|
Assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
15,442 |
|
$ |
12,699 |
|
Trade receivables, net of allowances for credit losses at September
30, 2022 and December 31, 2021 of $56,127 and $46,160,
respectively |
|
439,309 |
|
|
368,856 |
|
Inventories |
|
44,873 |
|
|
32,092 |
|
Prepaid expenses and other current assets |
|
39,691 |
|
|
36,539 |
|
Assets held for sale - current |
|
951 |
|
|
32,854 |
|
Total current assets |
|
540,266 |
|
|
483,040 |
|
Rental equipment, net |
|
3,227,735 |
|
|
2,946,008 |
|
Property, plant and equipment, net |
|
311,526 |
|
|
282,247 |
|
Operating lease assets |
|
225,955 |
|
|
235,344 |
|
Goodwill |
|
1,064,582 |
|
|
1,078,699 |
|
Intangible assets, net |
|
431,291 |
|
|
451,928 |
|
Other non-current assets |
|
8,909 |
|
|
10,797 |
|
Assets held for sale - non-current |
|
— |
|
|
285,536 |
|
Total long-term assets |
|
5,269,998 |
|
|
5,290,559 |
|
Total
assets |
$ |
5,810,264 |
|
$ |
5,773,599 |
|
Liabilities and equity |
|
|
Accounts payable |
$ |
160,262 |
|
$ |
110,270 |
|
Accrued expenses |
|
123,300 |
|
|
95,592 |
|
Accrued employee benefits |
|
53,477 |
|
|
65,927 |
|
Deferred revenue and customer deposits |
|
212,005 |
|
|
159,612 |
|
Operating lease liabilities - current |
|
51,971 |
|
|
51,103 |
|
Current portion of long-term debt |
|
13,497 |
|
|
11,968 |
|
Liabilities held for sale - current |
|
— |
|
|
23,173 |
|
Total current liabilities |
|
614,512 |
|
|
517,645 |
|
Long-term debt |
|
2,935,800 |
|
|
2,676,985 |
|
Deferred tax liabilities |
|
385,854 |
|
|
337,784 |
|
Operating lease liabilities - non-current |
|
174,777 |
|
|
184,199 |
|
Other non-current liabilities |
|
18,182 |
|
|
15,737 |
|
Liabilities held for sale - non-current |
|
— |
|
|
44,486 |
|
Long-term liabilities |
|
3,514,613 |
|
|
3,259,191 |
|
Total
liabilities |
|
4,129,125 |
|
|
3,776,836 |
|
Commitments and contingencies |
|
|
Preferred Stock: $0.0001 par, 1,000,000 shares authorized and zero
shares issued and outstanding at September 30, 2022 and December
31, 2021 |
|
— |
|
|
— |
|
Common Stock: $0.0001 par, 500,000,000 shares authorized and
211,243,820 and 223,939,527 shares issued and outstanding at
September 30, 2022 and December 31, 2021, respectively |
|
22 |
|
|
22 |
|
Additional paid-in capital |
|
3,112,076 |
|
|
3,616,902 |
|
Accumulated other comprehensive loss |
|
(93,009 |
) |
|
(29,071 |
) |
Accumulated deficit |
|
(1,337,950 |
) |
|
(1,591,090 |
) |
Total
shareholders' equity |
|
1,681,139 |
|
|
1,996,763 |
|
Total
liabilities and shareholders' equity |
$ |
5,810,264 |
|
$ |
5,773,599 |
|
Reconciliation of Non-GAAP Financial
Measures
In addition to using GAAP financial
measurements, we use certain non-GAAP financial information that we
believe is important for purposes of comparison to prior periods
and development of future projections and earnings growth
prospects. This information is also used by management to measure
the profitability of our ongoing operations and analyze our
business performance and trends.
We evaluate business segment performance on
Adjusted EBITDA, a non-GAAP measure that excludes certain items as
described below. We believe that evaluating segment performance
excluding such items is meaningful because it provides insight with
respect to intrinsic operating results of the Company.
We also regularly evaluate gross profit by
segment to assist in the assessment of the operational performance
of each operating segment. We consider Adjusted EBITDA to be the
more important metric because it more fully captures the business
performance of the segments, inclusive of indirect costs.
We also evaluate Free Cash Flow, a non-GAAP
measure that provides useful information concerning cash flow
available to fund our capital allocation alternatives.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP measure defined as
net income (loss) before income tax expense (benefit), net interest
(income) expense, depreciation and amortization adjusted for
certain items considered non-core to our business operations
including net currency (gains) losses, goodwill and other
impairment charges, restructuring costs, transaction costs, costs
to integrate acquired companies, non-cash charges for stock
compensation plans, gains and losses resulting from changes in fair
value and extinguishment of common stock warrant liabilities, and
other discrete expenses.
- Currency (gains)
losses, net: on monetary assets and liabilities denominated in
foreign currencies other than the subsidiaries’ functional
currency. Substantially all such currency gains (losses) are
unrealized and attributable to financings due to and from
affiliated companies.
- Goodwill and
other impairment charges related to non-cash costs associated with
impairment charges to goodwill, other intangibles, rental fleet and
property, plant and equipment.
- Restructuring
costs, lease impairment expense, and other related charges
associated with restructuring plans designed to streamline
operations and reduce costs including employee termination
costs.
- Transaction
costs including legal and professional fees and other transaction
specific related costs.
- Costs to
integrate acquired companies, including outside professional fees,
non-capitalized costs associated with system integrations,
non-lease branch and fleet relocation expenses, employee training
costs, and other costs required to realize cost or revenue
synergies.
- Non-cash charges
for stock compensation plans.
- Gains and losses
resulting from changes in fair value and extinguishment of common
stock warrant liabilities.
- Other expense
includes consulting expenses related to certain one-time projects,
financing costs not classified as interest expense, and gains and
losses on disposals of property, plant, and equipment.
Adjusted EBITDA has limitations as an analytical
tool, and you should not consider the measure in isolation or as a
substitute for net income (loss), cash flow from operations or
other methods of analyzing the Company’s results as reported under
US GAAP. Some of these limitations are:
- Adjusted EBITDA
does not reflect changes in, or cash requirements for our working
capital needs;
- Adjusted EBITDA
does not reflect our interest expense, or the cash requirements
necessary to service interest or principal payments, on our
indebtedness;
- Adjusted EBITDA
does not reflect our tax expense or the cash requirements to pay
our taxes;
- Adjusted EBITDA
does not reflect historical cash expenditures or future
requirements for capital expenditures or contractual
commitments;
- Adjusted EBITDA
does not reflect the impact on earnings or changes resulting from
matters that we consider not to be indicative of our future
operations;
- although
depreciation and amortization are non-cash charges, the assets
being depreciated and amortized will often have to be replaced in
the future and Adjusted EBITDA does not reflect any cash
requirements for such replacements; and
- other companies
in our industry may calculate Adjusted EBITDA differently, limiting
its usefulness as a comparative measure.
Because of these limitations, Adjusted EBITDA
should not be considered as discretionary cash available to
reinvest in the growth of our business or as measures of cash that
will be available to meet our obligations.
The following table provides unaudited
reconciliations of Income from continuing operations to Adjusted
EBITDA:
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in thousands) |
|
2022 |
|
|
|
2021 |
|
|
2022 |
|
|
2021 |
Income from continuing
operations |
$ |
85,728 |
|
|
$ |
57,113 |
|
$ |
200,099 |
|
$ |
75,278 |
Income tax expense from continuing operations |
|
30,219 |
|
|
|
5,243 |
|
|
67,167 |
|
|
32,341 |
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
— |
|
|
5,999 |
Fair value loss on common stock warrant liabilities |
|
— |
|
|
|
— |
|
|
— |
|
|
26,597 |
Interest expense |
|
38,165 |
|
|
|
29,006 |
|
|
102,362 |
|
|
87,793 |
Depreciation and amortization |
|
86,225 |
|
|
|
69,449 |
|
|
243,123 |
|
|
216,820 |
Currency losses, net |
|
236 |
|
|
|
127 |
|
|
247 |
|
|
196 |
Restructuring costs, lease impairment expense and other related
charges |
|
— |
|
|
|
2,457 |
|
|
168 |
|
|
14,284 |
Transaction costs |
|
— |
|
|
|
303 |
|
|
35 |
|
|
1,147 |
Integration costs |
|
3,902 |
|
|
|
8,242 |
|
|
13,182 |
|
|
23,206 |
Stock compensation expense |
|
7,180 |
|
|
|
6,157 |
|
|
22,628 |
|
|
14,305 |
Other |
|
(316 |
) |
|
|
1,106 |
|
|
3,518 |
|
|
1,393 |
Adjusted EBITDA from
continuing operations |
|
251,339 |
|
|
|
179,203 |
|
|
652,529 |
|
|
499,359 |
Adjusted EBITDA from
discontinued operations |
|
13,048 |
|
|
|
10,946 |
|
|
37,016 |
|
|
29,870 |
Adjusted EBITDA including
discontinued operations |
$ |
264,387 |
|
|
$ |
190,149 |
|
$ |
689,545 |
|
$ |
529,229 |
The following table presents unaudited
reconciliations of Income from discontinued operations before
income tax to Adjusted EBITDA from discontinued operations for the
Tank and Pump business for the three and nine months ended
September 30, 2022 and 2021, respectively.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Income from discontinued
operations before income tax |
$ |
10,802 |
|
|
$ |
5,391 |
|
|
$ |
24,488 |
|
|
$ |
14,255 |
|
Interest expense |
|
144 |
|
|
|
195 |
|
|
|
512 |
|
|
|
584 |
|
Depreciation and amortization |
|
3,096 |
|
|
|
5,828 |
|
|
|
14,248 |
|
|
|
16,993 |
|
Restructuring costs, lease impairment expense and other related
charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
Integration costs |
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
5 |
|
Stock compensation expense |
|
(221 |
) |
|
|
102 |
|
|
|
18 |
|
|
|
175 |
|
Other |
|
(773 |
) |
|
|
(575 |
) |
|
|
(2,250 |
) |
|
|
(2,144 |
) |
Adjusted EBITDA from
discontinued operations |
$ |
13,048 |
|
|
$ |
10,946 |
|
|
$ |
37,016 |
|
|
$ |
29,870 |
|
Income From Continuing Operations
Excluding Gain/Loss from Warrants
We define Income from Continuing Operations
Excluding Gain/Loss from Warrants as income from continuing
operations plus or minus the impact of the change in the fair value
of the common stock warrant liability. Management believes that the
presentation of our financial statements excluding the impact of
the mark-to-market adjustment provides useful information regarding
our results of operations and assists in the review of our actual
operating performance. The following table provides unaudited
reconciliations of Income from Continuing Operations to Income from
Continuing Operations Excluding Gain/Loss from Warrants:
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Income from continuing
operations |
$ |
85,728 |
|
$ |
57,113 |
|
$ |
200,099 |
|
$ |
75,278 |
Fair value loss on common stock warrant liabilities |
|
— |
|
|
— |
|
|
— |
|
|
26,597 |
Income from Continuing
Operations Excluding Gain/Loss from Warrants |
$ |
85,728 |
|
$ |
57,113 |
|
$ |
200,099 |
|
$ |
101,875 |
Adjusted EBITDA Margin
Adjusted EBITDA Margin is a non-GAAP measure
defined as Adjusted EBITDA divided by Revenue. Management believes
that the presentation of Adjusted EBITDA Margin provides useful
information to investors regarding the performance of our business.
The following table provides unaudited reconciliations of Adjusted
EBITDA Margin:
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Adjusted EBITDA (A) |
$ |
251,339 |
|
|
$ |
179,203 |
|
|
$ |
652,529 |
|
|
$ |
499,359 |
|
Revenue (B) |
|
604,173 |
|
|
|
461,047 |
|
|
|
1,632,339 |
|
|
|
1,295,634 |
|
Adjusted EBITDA Margin (A/B) |
|
41.6 |
% |
|
|
38.9 |
% |
|
|
40.0 |
% |
|
|
38.5 |
% |
Income from continuing
operations (C) |
$ |
85,728 |
|
|
$ |
57,113 |
|
|
$ |
200,099 |
|
|
$ |
75,278 |
|
Income from Continuing Operations Margin (C/B) |
|
14.2 |
% |
|
|
12.4 |
% |
|
|
12.3 |
% |
|
|
5.8 |
% |
Free Cash Flow and Free Cash Flow Margin
Free Cash Flow is a non-GAAP measure. Free Cash
Flow is defined as net cash provided by operating activities, less
purchases of, and proceeds from, rental equipment and property,
plant and equipment, which are all included in cash flows from
investing activities. Free Cash Flow Margin is defined as Free Cash
Flow divided by Total Revenue including discontinued operations.
Management believes that the presentation of Free Cash Flow and
Free Cash Flow Margin provides useful additional information
concerning cash flow available to fund our capital allocation
alternatives.
The following table provides unaudited
reconciliations of Free Cash Flow and Free Cash Flow Margin:
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net cash provided by operating
activities |
$ |
210,385 |
|
|
$ |
130,447 |
|
|
$ |
544,238 |
|
|
$ |
392,055 |
|
Purchases of rental equipment
and refurbishments |
|
(135,076 |
) |
|
|
(60,374 |
) |
|
|
(360,465 |
) |
|
|
(178,191 |
) |
Proceeds from sale of rental
equipment |
|
17,183 |
|
|
|
11,597 |
|
|
|
52,263 |
|
|
|
42,034 |
|
Purchases of property, plant
and equipment |
|
(10,000 |
) |
|
|
(3,386 |
) |
|
|
(30,253 |
) |
|
|
(20,836 |
) |
Proceeds from the sale of
property, plant and equipment |
|
894 |
|
|
|
209 |
|
|
|
1,645 |
|
|
|
16,647 |
|
Free Cash Flow (A) |
$ |
83,386 |
|
|
$ |
78,493 |
|
|
$ |
207,428 |
|
|
$ |
251,709 |
|
|
|
|
|
|
|
|
|
Revenue from continuing
operations (B) |
$ |
604,173 |
|
|
$ |
461,047 |
|
|
$ |
1,632,339 |
|
|
$ |
1,295,634 |
|
Revenue from discontinued
operations |
|
33,988 |
|
|
|
29,505 |
|
|
|
96,356 |
|
|
|
81,343 |
|
Total Revenue including
discontinued operations (C) |
|
638,161 |
|
|
|
490,552 |
|
|
|
1,728,695 |
|
|
|
1,376,977 |
|
Free Cash Flow Margin (A/C) |
|
13.1 |
% |
|
|
16.0 |
% |
|
|
12.0 |
% |
|
|
18.3 |
% |
|
|
|
|
|
|
|
|
Net cash provided by operating
activities (D) |
$ |
210,385 |
|
|
$ |
130,447 |
|
|
$ |
544,238 |
|
|
$ |
392,055 |
|
Net cash provided by operating activities margin (D/B) |
|
34.8 |
% |
|
|
28.3 |
% |
|
|
33.3 |
% |
|
|
30.3 |
% |
Adjusted Gross Profit and Adjusted Gross
Profit Percentage
Adjusted Gross Profit is a non-GAAP measure
defined as gross profit plus depreciation of rental equipment.
Adjusted Gross Profit Percentage is defined as Adjusted Gross
Profit divided by Revenue. Adjusted Gross Profit and Adjusted Gross
Profit Percentage are not measurements of our financial performance
under GAAP and should not be considered as an alternative to gross
profit, gross profit percentage, or other performance measures
derived in accordance with GAAP. In addition, our measurement of
Adjusted Gross Profit and Adjusted Gross Profit Percentage may not
be comparable to similarly titled measures of other companies. Our
management believes that the presentation of Adjusted Gross Profit
and Adjusted Gross Profit Percentage provides useful information to
investors regarding our results of operations because it assists in
analyzing the performance of our business.
The following table provides unaudited
reconciliations of gross profit to Adjusted Gross Profit and
Adjusted Gross Profit Percentage.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue
(A) |
$ |
604,173 |
|
|
$ |
461,047 |
|
|
$ |
1,632,339 |
|
|
$ |
1,295,634 |
|
|
|
|
|
|
|
|
|
Gross
profit (B) |
$ |
314,332 |
|
|
$ |
239,226 |
|
|
$ |
858,615 |
|
|
$ |
651,134 |
|
Depreciation of rental equipment |
|
69,159 |
|
|
|
52,990 |
|
|
|
192,228 |
|
|
|
165,027 |
|
Adjusted Gross Profit (C) |
$ |
383,491 |
|
|
$ |
292,216 |
|
|
$ |
1,050,843 |
|
|
$ |
816,161 |
|
|
|
|
|
|
|
|
|
Gross
Profit Percentage (B/A) |
|
52.0 |
% |
|
|
51.9 |
% |
|
|
52.6 |
% |
|
|
50.3 |
% |
Adjusted
Gross Profit Percentage (C/A) |
|
63.5 |
% |
|
|
63.4 |
% |
|
|
64.4 |
% |
|
|
63.0 |
% |
Net CAPEX
Net Capital Expenditures ("Net CAPEX") is
defined as purchases of rental equipment and refurbishments and
purchases of property, plant and equipment (collectively "Total
Capital Expenditures"), less proceeds from sale of rental equipment
and proceeds from the sale of property, plant and equipment
(collectively "Total Proceeds"), which are all included in cash
flows from investing activities. Our management believes that the
presentation of Net CAPEX provides useful information to investors
regarding the net capital invested into our rental fleet and
property, plant and equipment each year to assist in analyzing the
performance of our business. The following table provides unaudited
reconciliations of Net CAPEX:
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Total
purchases of rental equipment and refurbishments |
$ |
(135,076 |
) |
|
$ |
(60,374 |
) |
|
$ |
(360,465 |
) |
|
|
(178,191 |
) |
Total
proceeds from sale of rental equipment |
|
17,183 |
|
|
|
11,597 |
|
|
|
52,263 |
|
|
|
42,034 |
|
Net CAPEX for Rental Equipment |
|
(117,893 |
) |
|
|
(48,777 |
) |
|
|
(308,202 |
) |
|
|
(136,157 |
) |
Purchase
of property, plant and equipment |
|
(10,000 |
) |
|
|
(3,386 |
) |
|
|
(30,253 |
) |
|
|
(20,836 |
) |
Proceeds
from sale of property, plant and equipment |
|
894 |
|
|
|
209 |
|
|
|
1,645 |
|
|
|
16,647 |
|
Net CAPEX |
$ |
(126,999 |
) |
|
$ |
(51,954 |
) |
|
$ |
(336,810 |
) |
|
$ |
(140,346 |
) |
Return on Invested Capital
Return on Invested Capital is defined as
adjusted earnings before interest and amortization divided by net
assets. Adjusted earnings before interest and amortization is the
sum of income (loss) before income tax expense, net interest
(income) expense, amortization adjusted for non-cash items
considered non-core to business operations including net currency
(gains) losses, goodwill and other impairment charges,
restructuring costs, costs to integrate acquired companies,
non-cash charges for stock compensation plans, gains and losses
resulting from changes in fair value and extinguishment of common
stock warrant liabilities, and other discrete expenses, reduced by
estimated taxes. Given we are not a significant US taxpayer due to
our current tax attributes, we include estimated taxes at our
current statutory tax rate of approximately 25%. Net assets is
total assets less goodwill, and intangible assets, net and all
non-interest bearing liabilities. Denominator is calculated as a
four quarter average for year-to-date metrics and two quarter
average for quarterly metrics.
The following table provides unaudited
reconciliations of Return on Invested Capital. Average Invested
Capital and Adjusted EBITDA related to our prior Tank and Pump
Division has been excluded prospectively from July 1, 2022 only and
prior periods have not been adjusted.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Total Assets |
$ |
5,810,264 |
|
|
$ |
5,644,181 |
|
|
$ |
5,810,264 |
|
|
$ |
5,644,181 |
|
Goodwill |
|
(1,064,582 |
) |
|
|
(1,178,290 |
) |
|
|
(1,064,582 |
) |
|
|
(1,178,290 |
) |
Intangible assets, net |
|
(431,291 |
) |
|
|
(467,289 |
) |
|
|
(431,291 |
) |
|
|
(467,289 |
) |
Total Liabilities |
|
(4,129,125 |
) |
|
|
(3,687,597 |
) |
|
|
(4,129,125 |
) |
|
|
(3,687,597 |
) |
Long Term Debt |
|
2,935,800 |
|
|
|
2,598,300 |
|
|
|
2,935,800 |
|
|
|
2,598,300 |
|
Net Assets excluding interest
bearing debt and goodwill and intangibles |
$ |
3,121,066 |
|
|
$ |
2,909,305 |
|
|
$ |
3,121,066 |
|
|
$ |
2,909,305 |
|
Average
Invested Capital (A) |
$ |
3,147,195 |
|
|
$ |
2,882,975 |
|
|
$ |
3,117,986 |
|
|
$ |
2,853,939 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
251,339 |
|
|
$ |
190,149 |
|
|
$ |
676,497 |
|
|
$ |
529,229 |
|
Depreciation |
|
(79,851 |
) |
|
|
(68,490 |
) |
|
|
(234,644 |
) |
|
|
(213,196 |
) |
Adjusted EBITA (B) |
$ |
171,488 |
|
|
$ |
121,659 |
|
|
$ |
441,853 |
|
|
$ |
316,033 |
|
|
|
|
|
|
|
|
|
Statutory Tax Rate (C) |
|
25 |
% |
|
|
25 |
% |
|
|
25 |
% |
|
|
25 |
% |
Estimated Tax (B*C) |
$ |
42,872 |
|
|
$ |
30,415 |
|
|
$ |
110,463 |
|
|
$ |
79,008 |
|
Adjusted earnings before
interest and amortization (D) |
$ |
128,616 |
|
|
$ |
91,244 |
|
|
$ |
331,390 |
|
|
$ |
237,025 |
|
ROIC (D/A), annualized |
|
16.3 |
% |
|
|
12.7 |
% |
|
|
14.2 |
% |
|
|
11.1 |
% |
|
|
|
|
|
|
|
|
Operating income (E) |
$ |
154,112 |
|
|
$ |
96,948 |
|
|
$ |
383,682 |
|
|
$ |
242,847 |
|
Total Assets (F) |
$ |
5,810,264 |
|
|
$ |
5,644,181 |
|
|
$ |
5,810,264 |
|
|
$ |
5,644,181 |
|
Operating income / Total
Assets (E/F), annualized |
|
10.5 |
% |
|
|
6.9 |
% |
|
|
8.7 |
% |
|
|
5.8 |
% |
|
|
|
|
|
|
|
|
Willscot (LSE:0A1N)
Historical Stock Chart
From Aug 2024 to Sep 2024
Willscot (LSE:0A1N)
Historical Stock Chart
From Sep 2023 to Sep 2024