Investor Tools

Stock chart for: MGRC
Six-Month Statistics

Stock

MGRC
Exchange NASDAQ GS (US Dollar)
Price 45.36
Change (%) -0.04 ( -0.08 %)
Volume 48639
10/20/2017 04:00 PM ET
NASDAQ: MGRC 45.36
  -0.08
52W High 46.73
52W Low 29.27

What's new

McGrath RentCorp Sets Third Quarter 2017 Financial Results Date and Time

LIVERMORE, Calif., Oct. 02, 2017 (GLOBE NEWSWIRE) -- McGrath RentCorp (NASDAQ:MGRC) (the “Company”), a diversified business-to-business rental company, today announced plans to release financial results for its third quarter ending September 30, 2017, after the close of regular market trading on Tuesday, October 31, 2017. McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time...
Title 0

Revenue & Earnings


Revenue (FY)
424.08
EBIT (Mil) (FY)
79.26
EBITDA (Mil) (FY)
21.85
Net Income Excluding Extraordinary Items (Mil) (FY)
38.25
Net Income Including Extraordinary Items (Mil) (FY)
38.25
Diluted EPS Excluding Extraordinary Items (FY)
1.6
Diluted EPS Including Extraordinary Items (FY)
1.6

Dividends


Yield (%)
2.29
Dividend Record Date
10-17-17
Dividend Rate
1.04

Ratios


Price to Revenue (TTM)
2.52
Price To Cash Flow (TTM)
9.03
Price to Book (MRQ)
2.7
Total Debt to Equity (MRQ) (%)
82.09
Current Ratio (MRQ)

Growth


5-Year Annual Dividend Growth Rate (%)
2.09
5-Year Annual Revenue Growth Rate (%)
4.36
FY = Fiscal Year MRQ = Most Recent Quarter
mil = Millions TTM = Trailing Twelve Months
Powerred by Thomson Reuters

Price & Volume


Recent Price ($)
45.36
Trade Date
10-20-17
52 Week High ($)
46.73
52 Week Low ($)
29.27
52 Week Price Percent Change (%)
48.62
YTD Price Percent Change (%)
15.74
Volume (3 Month Average) (Mil)
1.26
Volume (10 Day Average) (Mil)
0.05
Beta
0.98

Share Related


Market Cap (Total, All Common Classes) (Mil)
1088.36
Shares Outstanding (Total, All Classes) (Mil)
23.99
Shares Outstanding, Average (FY) (Mil)
23.98
Float (Mil)
23.42
FY = Fiscal Year MRQ = Most Recent Quarter
mil = Millions TTM = Trailing Twelve Months
Powerred by Thomson Reuters

Analyst Coverage

McGrath Rentcorp is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding McGrath Rentcorp's performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of McGrath Rentcorp or its management. McGrath Rentcorp does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.


Analyst

Firm


Joe Box
KeyBanc Capital Markets
Scott Schneeberger
Oppenheimer & Company
Marc Riddick
Sidoti & Company

Executive Team and Board of Directors

  • Joseph Hanna

    President, Chief Executive Officer

    Joseph Hanna

    Joseph F. Hanna was appointed President, Chief Executive Officer and a Director of the Company in February 2017 after serving 14 years in positions of progressive responsibility. Mr. Hanna served as the Chief Operating Officer from 2007 to 2017. From 2005 to 2007, he served as Senior Vice President of Operations, and he joined the Company in 2003 as Vice President of Operations. Mr. Hanna has been instrumental in developing and driving the strategic product and geographic expansion of the Company’s varied rental businesses throughout his tenure. He is well qualified to serve as Chief Executive Officer and as a member of the Board of Directors as a result of his deep institutional knowledge of the Company, its products, services, strategies and customers. Previously Mr. Hanna held various sales and operational leadership positions at SMC Corporation of America (a subsidiary of SMC Corporation, Tokyo, Japan). His prior experience also includes serving as an officer in the United States Army. Mr. Hanna received a B.S. in Electrical Engineering from the United States Military Academy, West Point, New York.

  • Keith Pratt

    Executive Vice President, Chief Financial Officer

    Keith Pratt

    Keith E. Pratt was appointed Executive Vice President of the Company in February 2017. He was appointed Senior Vice President in June 2007 and joined the Company in January 2006 as Vice President and was appointed Chief Financial Officer in March 2006. Prior to joining the Company, he was most recently with Advanced Fibre Communications (AFC), a public telecommunications equipment company in Petaluma, California, where he served as Senior Vice President and Chief Financial Officer. Mr. Pratt served as Chief Financial Officer from 1999 until AFC was acquired by Tellabs, Inc. at the end of 2004. He also served as Director of Corporate Development at AFC from 1997 to 1999 prior to becoming Chief Financial Officer. Prior to Mr. Pratt joining AFC, he served as Director, Strategy & Business Development Group at Pacific Telesis Group, Inc. from 1995 to 1997. Mr. Pratt has an undergraduate degree from Cambridge University in Production Engineering and an M.B.A. from Stanford University.

  • David Whitney

    Vice President, Controller and Principal Accounting Officer

    David Whitney

    David M. Whitney joined the Company as its Corporate Controller in 2000 and was elected Vice President and Principal Accounting Officer in March 2006. Previously he was Manager of Regional Accounting for The Permanente Medical Group in Oakland, California. Mr. Whitney holds a B.S. in Accounting from California State University at Hayward, and is a Certified Public Accountant.

  • Kay Dashner

    Vice President, Human Resources

    Kay Dashner

    Kay Dashner joined the Company in 2005 as the Director of Human Resources and was promoted to Vice President, Human Resources in June 2008. Previously, she held various HR leadership positions in the retail, insurance and software industries, most recently at NetSuite from April 2005 to July 2005 and BMC Software, Inc. from March 1999 to April 2005. Ms. Dashner graduated from Santa Clara University with a B.S. in Management.

  • John Skenesky

    Vice President and Division Manager, TRS-RenTelco

    John Skenesky

    John P. Skenesky was appointed Vice President and Division Manager of TRS-RenTelco in November 2011. He previously served as the division’s Director of Sales and Product Management from June 2007 to November 2011 and Director of Operations and Product Management from June 2004 to June 2007. Mr. Skenesky joined the Company in 1995 and served in branch management and sales roles for the RenTelco division. Prior to joining the Company, Mr. Skenesky served in lab and product management roles at Genstar Rentals from 1991 to 1994. He also served in the United States Navy from 1984 to 1990 as an electronics technician on submarines. Mr. Skenesky received an M.B.A. from Texas Christian University in 2007.

  • Philip Hawkins

    Vice President and Division Manager, Mobile Modular

    Philip Hawkins
    Philip B. Hawkins was appointed Vice President and Division Manager of Mobile Modular in November 2011. He previously served as Vice President and Division Manager of TRS-RenTelco from June 2007 to November 2011 and also held the role of Manager, Corporate Financial Planning and Analysis from June 2004 to June 2007. Mr. Hawkins was a Senior Business Analyst for Technology Rentals and Services (TRS), an electronics equipment rental division of CIT Technologies Corporation from December 2003 until TRS was acquired by the Company in June 2004. He previously served as Director of Portfolio Management and held other leadership roles with Dell Financial Services from April 1999 to December 2003. Mr. Hawkins received B.S. degrees in Accounting, Finance and Computer Information Systems from Arizona State University.

  • Kristina Van Trease-Whitney

    Vice President and Division Manager, Adler Tank Rentals, LLC

    Kristina Van Trease-Whitney

    Kristina VanTrease was appointed Vice President and Division Manager of Adler Tank Rentals, LLC in August 2016. She previously served as Vice President and Division Manager of Mobile Modular Portable Storage from June 2009 to August 2016. She previously served as Director of Corporate Development from July 2007 to June 2009. She joined the Company in 1992 and has served in corporate management roles as well as sales and management positions for the Company’s TRS-RenTelco division. Ms. VanTrease received a B.S. in Business Administration with a concentration in marketing from San Jose State University.

  • Glenn Owens

    President, Enviroplex, Inc.

    Glenn Owens
    Glenn S. Owenswas appointed President of Enviroplex in December 2008, after joining the company in July 2008 as General Manager. Mr. Owens has served in a number of Sales and Business Management roles primarily in the plastics industry, most recently as Division General Manager of privately held Bryce Corporation. Mr. Owens has a BS Degree in Industrial Engineering from Georgia Tech.
  • John Lieffrig

    Vice President and Division Manager, Mobile Modular Portable Storage

    John P. Lieffrig joined the Company and was appointed Vice President and Division Manager of Mobile Modular Portable Storage in August 2016. He previously served as Vice President Sales North America for Modular Space Corporation from 2005 to 2015. Mr. Lieffrig has held several executive leadership roles with equipment rental and business-to-business service organizations including Aramark Corporation from 2002 to 2005 and GE Capital from 1988 to 2002. He also served on the Modular Building Institute Board of Directors for eight years and was elected President in 2013. Mr. Lieffrig received B.A. Degrees in Business Administration and Marketing from Carthage College.

  • William J. Dawson

    Former Chief Financial Officer, Adamas Pharmaceuticals, Inc.

    William J. Dawson was elected a director of the Company in 1998. In August 2014, Mr. Dawson was named Chief Financial Officer at Adamas Pharmaceuticals, Inc., a specialty pharmaceutical company, and held that position until his retirement in June 2017. He previously served as Chief Financial Officer at Catalyst Biosciences, Inc., a privately-held biotechnology company for two years from 2010 to 2012 and he was Vice President, Finance and Chief Financial Officer with Cerus Corporation, a publicly held biopharmaceutical company from August 2004 to April 2009. Prior to joining Cerus, he spent a total of 26 years in senior financial positions at companies in biotechnology, healthcare services and information technology, investment banking, energy and transportation, where he was responsible for strategic, business and financial planning, SEC reporting, investor relations, and numerous equity, debt and structured financings, mergers and acquisitions, and advisory assignments. As an investment banker, Mr. Dawson assisted in three public equity offerings for McGrath RentCorp, beginning with its initial public offering in 1984. He also serves on the board of directors of Wellington Trust Company, a subsidiary of Wellington Management Company, LLP, a private institutional investment management company. With his wealth of experience in financial and strategic transactions, as well as his experiences as Chief Financial Officer of publicly traded companies, Mr. Dawson provides significant value to the Board of Directors. Mr. Dawson received an A.B. in Mechanical Engineering from Stanford University and an M.B.A. from Harvard Business School.

  • Elizabeth Fetter

    Former President and Chief Executive Officer, Symmetricom, Inc.

    Elizabeth A. Fetter was elected a director of the Company in 2014. Ms. Fetter has served on the Board of Directors of Alliant International University, Inc., a private equity funded university since 2015 and Support.com (NASDAQ: SPRT), a provider of cloud-based software and service for technology support since March 2016. Ms. Fetter served as a member of the Board of Directors of Symmetricom, Inc., a provider of timekeeping technologies, instruments and solutions from 2000 to 2013 and was appointed as President and Chief Executive Officer of Symmetricom in April 2013. She served in these capacities until Symmetricom’s acquisition by Microsemi Corporation in November 2013. Ms. Fetter previously served as President and Chief Executive Officer of NxGen Modular LLC, a provider of modular buildings and assemblies from 2011 to 2012. In 2007, Ms. Fetter was President, Chief Executive Officer and a director of Jacent Technologies, a privately held supplier of on-demand ordering solutions for the restaurant industry. Ms. Fetter also served on the boards of Quantum Corporation, a data storage company, from 2005 to 2013 and Ikanos Corporation, a provider of broadband solutions from 2008 to 2009. She previously held the position of Chair of the Board of Trustees of Alliant International University, Inc. where she served as a trustee from 2004 to 2013. With her nearly 20 years of public and private company board service and past CEO experience at multiple firms, she is a valuable complement to the Board of Directors. Ms. Fetter holds a B.A., Communications from Penn State University, an M.S., Industrial Administration from Carnegie Mellon University (Tepper & Heinz Schools) and an Advanced Professional Director Certification from the American College of Corporate Directors, a public company director education and credentialing organization.
  • Joseph Hanna

    President, Chief Executive Officer

    Joseph F. Hanna was appointed President, Chief Executive Officer and a Director of the Company in February 2017 after serving 14 years in positions of progressive responsibility. Mr. Hanna served as the Chief Operating Officer from 2007 to 2017. From 2005 to 2007, he served as Senior Vice President of Operations, and he joined the Company in 2003 as Vice President of Operations. Mr. Hanna has been instrumental in developing and driving the strategic product and geographic expansion of the Company’s varied rental businesses throughout his tenure. He is well qualified to serve as Chief Executive Officer and as a member of the Board of Directors as a result of his deep institutional knowledge of the Company, its products, services, strategies and customers. Previously Mr. Hanna held various sales and operational leadership positions at SMC Corporation of America (a subsidiary of SMC Corporation, Tokyo, Japan). His prior experience also includes serving as an officer in the United States Army. Mr. Hanna received a B.S. in Electrical Engineering from the United States Military Academy, West Point, New York.

  • Bradley Shuster

    Chief Executive Officer, NMI Holdings

    Bradley Shuster was elected a director of the Company in 2017. He currently serves as Chairman of the Board and Chief Executive Officer of NMI Holdings, (NASDAQ: NMIH) and its principal subsidiary, National Mortgage Insurance Corporation (National MI), positions he has held since 2012. Prior to joining NMI, Mr. Shuster was an executive with The PMI Group for 13 years, where he held various positions over the course of his tenure, the most recent being president of International and Strategic Investments and chief executive officer of PMI Capital Corporation. Before joining PMI, Mr. Shuster was a partner at Deloitte, LLP. Mr. Shuster holds a B.S. in Business Administration from the University of California, Berkeley, and an M.B.A. from the University of California, Los Angeles.

  • M. Richard Smith

    Former Senior Vice President, Bechtel Corporation

    M. Richard Smith was elected a director of the Company in 2010. Mr. Smith also serves as a member of the Board of Directors of Aegion Corporation (NASDAQ:AEGN) (formerly Instituform Technologies, Inc.), a global provider of pipeline infrastructure protection services and technologies since 2009. He also served as a director of Sithe Global Power, LLC, an international power development company from 2008 to 2016. Mr. Smith served as Senior Vice President of Bechtel Group, Inc. and President of its fossil power business unit, where he managed Bechtel’s global fossil power engineering and construction activities, until 2007. This position culminated a 26 year career with Bechtel. During that tenure, he also served as Chief Executive Officer of Intergen, a joint venture between Shell and Bechtel, from 2004 to 2005. From 1992 to 2000, Mr. Smith was at a PG&E joint venture and at PG&E Corporation where he was responsible for all corporate development activities. With his extensive experience serving as a board member and in executive management roles for a number of public companies, Mr. Smith brings to the Board of Directors a valuable perspective on issues facing public companies as well as considerable guidance on corporate development, business operations and the energy industry. Mr. Smith received a B.S. in Aerospace Engineering from Auburn University, a M.S. in Mechanical Engineering from Northeastern University and a M.B.A. from Golden Gate University.

  • Dennis Stradford

    Former Chief Executive Officer, Nomis Solutions, Inc.

    Dennis P. Stradford was elected a director of the Company in 2002. From 2004 to 2010, Mr. Stradford was Chairman, President and Chief Executive Officer of Nomis Solutions, Inc., a provider of price optimization solutions to the financial services industry. He served as Nomis Solutions’ Chief Executive Officer until July 2009 and Chairman until February 2010. Mr. Stradford was also the Chief Executive Officer of CascadeWorks, Inc., a provider of e-procurement software to Fortune 1000 companies, from 2000 to 2003. From 1998 to 2000, he was Chief Executive Officer of SupplyBase, Inc. a provider of web-based supply-chain management software and services. From 1985 to 1997, Mr. Stradford was with Flextronics International, Ltd., a publicly traded company, and served as its Senior Vice President, Sales and Marketing. He previously held executive and sales positions with Zehntel, Inc. and International Business Machines Corp. With his wealth of experience in senior management, Mr. Stradford brings to the Board of Directors considerable expertise on strategic, operational, and sales and marketing issues. Mr. Stradford holds a B.A. from San Jose State University and an M.A., M. Div. from St. Patrick’s University.

  • Ronald H. Zech

    Chairman of the Board, McGrath RentCorp

    Ronald H. Zech was elected a director of the Company in 1989 and elected to the position of non-executive Chairman of the Board of Directors in June 2009. He retired in 2005 as Chairman and Chief Executive Officer of GATX Corporation, a NYSE listed company and leading provider of lease financing and related services to customers operating rail, marine, and other targeted assets. Mr. Zech was elected Chairman of GATX Corporation in April 1996, Chief Executive Officer in January 1996, and President in July 1994. Prior to that time he had served both as President and Chief Financial Officer of GATX Capital Corporation and as an officer with a major international bank. He also served on the board of The PMI Group, a former provider of mortgage insurance from 1998 to 2013. His experiences in these senior management and financial roles have included a wide range of activities associated with the management of a public company. Accordingly, he brings to the Board of Directors a valued perspective on many issues faced by the Company. He holds a B.S. in Electrical Engineering from Valparaiso University and an M.B.A. from the University of Wisconsin.

RSS Feeds

Clicking on an RSS link below will provide you with raw XML data of our content. If you do not have a compatible reader installed, you will see XML code in your browser - to view our content, paste the feed address into an RSS reader, or use a browser which supports RSS feeds. See below for additional information on RSS.

Information About RSS

Really Simple Syndication (RSS) is an XML-based format for distributing and aggregating Web content (such as news headlines). Using RSS, web content providers can easily create and disseminate news headlines and URLs. To find more information about common RSS Readers, enter the term “RSS Reader” into an internet search engine.


News Releases

Calendar Events

SEC Filings


Recommended RSS Readers

Omea Reader, Google Reader, Mozilla Thunderbird

Investor Presentation

Title

Downloads


MGRC Investor Presentation Q2-17

MGRC Investor Presentation 2016

#
#

Annual Reports and Proxy

2017 Notices

Downloads


Proxy

Form 10-K



Press Releases

News


Date

Title

Monday, Oct 02, 2017
McGrath RentCorp Sets Third Quarter 2017 Financial Results Date and Time

LIVERMORE, Calif., Oct. 02, 2017 (GLOBE NEWSWIRE) -- McGrath RentCorp (NASDAQ:MGRC) (the “Company”), a diversified business-to-business rental company, today announced plans to release financial results for its third quarter ending September 30, 2017, after the close of regular market trading on Tuesday, October 31, 2017.

McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) that afternoon to discuss the results.  There will also be a live Q&A session.  The conference call may be accessed by dialing 1-844-707-0666 (international callers dial 1-703-639-1220), or by listening to the simultaneous webcast on www.mgrc.com.  A replay will be available for 7 days following the call by dialing 1-855-859-2056 (international callers dial 1-404-537-3406).  The conference call passcode is 92731571.  In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company’s website at http://www.mgrc.com/investors#events-archives.

ABOUT MCGRATH RENTCORP

Founded in 1979, McGrath RentCorp is a diversified business-to-business rental company with four rental divisions. Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs in California, Texas, Florida, and the Mid-Atlantic from Washington D.C. to Georgia. TRS-RenTelco rents and sells electronic test equipment and is one of the leading rental providers of general purpose and communications test equipment in the Americas. Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids with operations serving key markets throughout the United States. Mobile Modular Portable Storage provides portable storage solutions in the California, Texas, Florida, Northern Illinois, New Jersey, North Carolina and Georgia markets. For more information on McGrath RentCorp and its operating units, please visit our websites:

Corporate – www.mgrc.com
Modular Buildings – www.mobilemodular.com 
Electronic Test Equipment – www.trsrentelco.com 
Tanks and Boxes – www.adlertankrentals.com 
Portable Storage – www.mobilemodularcontainers.com 
School Facilities Manufacturing – www.enviroplex.com 

FOR INFORMATION CONTACT:              
Keith E. Pratt
Chief Financial Officer                
925-606-9200    

Primary Logo

McGrath RentCorp
Wednesday, Sep 20, 2017
McGrath RentCorp Declares Quarterly Dividend

LIVERMORE, Calif., Sept. 20, 2017 (GLOBE NEWSWIRE) -- The Board of Directors of McGrath RentCorp (NASDAQ:MGRC), a diversified business to business rental company declared a quarterly cash dividend of $0.26 per common share for the quarter ended September 30, 2017.  The dividend will be payable on October 31, 2017 to all shareholders of record on October 17, 2017. The year 2017 marks the 25th consecutive year that McGrath RentCorp has raised its dividend to shareholders.

About McGrath RentCorp

Founded in 1979, McGrath RentCorp is a diversified business-to-business rental company with four rental divisions.  Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs in California, Texas, Florida, and the Mid-Atlantic from Washington D.C. to Georgia.  TRS-RenTelco rents and sells electronic test equipment and is one of the leading rental providers of general purpose and communications test equipment in the Americas.  Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids with operations serving key markets throughout the United States.  Mobile Modular Portable Storage provides portable storage solutions in the California, Texas, Florida, Northern Illinois, New Jersey, North Carolina and Georgia markets.  For more information on McGrath RentCorp and its operating units, please visit our websites:

Corporate – www.mgrc.com
Modular Buildings – www.mobilemodular.com
Electronic Test Equipment – www.trsrentelco.com
Tanks and Boxes – www.adlertankrentals.com
Portable Storage – www.mobilemodularcontainers.com
School Facilities Manufacturing – www.enviroplex.com

FOR INFORMATION CONTACT:              
Keith E. Pratt
Chief Financial Officer                
925-606-9200           

Primary Logo

McGrath RentCorp
Wednesday, Aug 02, 2017
McGrath RentCorp Announces Results for Second Quarter 2017

LIVERMORE, Calif., Aug. 02, 2017 (GLOBE NEWSWIRE) -- McGrath RentCorp (NASDAQ:MGRC) (the “Company”), a diversified business to business rental company, today announced total revenues for the quarter ended June 30, 2017 of $109.6 million, an increase of 6%, compared to the second quarter of 2016.  The Company reported net income of $11.5 million, or $0.48 per diluted share for the second quarter of 2017, compared to net income of $9.1 million, or $0.38 per diluted share, in the second quarter of 2016.

SECOND QUARTER 2017 COMPANY HIGHLIGHTS:

  • Income from operations increased 21% year-over-year to $21.8 million.
  • Rental revenues increased 5% year-over-year to $70.0 million.
  • Adjusted EBITDA1 increased 7% million to $41.9 million for the second quarter of 2017.   
  • Dividend rate increased 2% year-over-year to $0.26 per share for the second quarter of 2017. On an annualized basis, this dividend represents a 2.8% yield on the August 1, 2017 close price of $36.54 per share.

Joe Hanna, President and CEO of McGrath RentCorp, made the following comments regarding these results and future expectations:

“We were pleased with our second quarter performance.  Mobile Modular accounted for the majority of the Company’s 21% operating profit increase compared to a year ago, as a result of higher gross profit from rental operations and higher sales gross profit.  TRS-RenTelco also achieved operating profit growth through effective management of depreciation expense, while the contribution from Adler Tank Rentals was down slightly compared to a year ago.

Mobile Modular rental revenues for the quarter increased 11% from a year ago as rental rates, fleet utilization and equipment on rent all increased.  Rental revenue growth continued to be healthy across commercial and education markets, as well as in our Portable Storage business.

TRS-RenTelco rental revenues for the quarter declined 2% as a result of lower communications test equipment business activity.  Communications test equipment rental revenues declined by 9%, but were partly offset by a 5% increase for general-purpose test equipment.  While average equipment utilization increased, average rental rates declined for the quarter, primarily due to the business activity mix shift from communications to general-purpose test equipment. 

Adler Tank Rentals rental revenues for the quarter increased 2% from a year ago.  Upstream oil and natural gas rental revenue declined from 11% to 9% of total Adler rental revenues, but was more than offset by growth in other market verticals.  Average equipment on rent increased 10% to $167 million from $152 million a year ago and average utilization improved, although rental rates declined as a result of competitive price pressure and product mix shifts.

Our second quarter results are beginning to reflect some impact from initiatives that we have launched through our return on invested capital (or ROIC) work, particularly for Mobile Modular.  We are also maintaining discipline on new rental equipment capital spending while selectively selling some non-core equipment.

While end market conditions remain challenging for Adler Tank Rentals, and to a lesser extent TRS-RenTelco, we are encouraged by our second quarter and year to date results.  Based on these results and our current outlook for the second half of the year we are raising our financial outlook and expect 2017 total Company operating profit to increase 9% to 12% above 2016, compared to our prior expectation of a 3% to 5% increase.”

________________________________

  1. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization and share-based compensation.  A reconciliation of net income to Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating activities can be found at the end of this release.

DIVISION HIGHLIGHTS:

All comparisons presented below are for the quarter ended June 30, 2017 to the quarter ended June 30, 2016 unless otherwise indicated.

MOBILE MODULAR

For the second quarter of 2017, the Company’s Mobile Modular division reported income from operations of $11.3 million, an increase of $3.0 million, or 36%.  Rental revenues increased 11% to $35.0 million, depreciation expense increased 2% to $5.3 million and other direct costs decreased 9% to $10.2 million, which resulted in an increase in gross profit on rental revenues of 28% to $19.5 million.  Rental related services revenues decreased 1% to $12.0 million, with associated gross profit decreasing 20% to $3.0 million.  Sales revenues increased 64% to $9.5 million and gross margin on sales of 26% was comparable to 2016, resulting in increased gross profit on sales revenues of $1.0 million.  Selling and administrative expenses increased 12% to $13.8 million, primarily due to increased salaries and employee benefit costs and higher allocated corporate expenses. 

TRS-RENTELCO

For the second quarter of 2017, the Company’s TRS-RenTelco division reported income from operations of $7.1 million, an increase of $1.1 million, or 19%.  Rental revenues decreased 2% to $19.8 million, depreciation expense decreased 11% to $8.0 million and other direct costs decreased 2% to $3.3 million, which resulted in an increase in gross profit on rental revenues of 8% to $8.6 million.  Sales revenues decreased 13% to $5.6 million.  Gross margin on sales increased to 61% from 47% in 2016 primarily due to higher margins on used equipment sales, resulting in a 13% increase in gross profit on sales revenues to $3.4 million.  Selling and administrative expenses decreased 4% to $5.3 million, primarily due to lower allocated corporate expenses.

ADLER TANKS

For the second quarter of 2017, the Company’s Adler Tanks division reported income from operations of $3.0 million, a decrease of $0.2 million, or 7%.  Rental revenues increased 2% to $15.1 million, depreciation expense decreased 2% to $3.9 million and other direct costs increased 17% to $2.5 million, which together resulted in a comparable gross profit on rental revenues of $8.7 million.  Rental related services revenues decreased 4% to $6.2 million, with gross profit on rental related services increasing 1% to $1.5 million.  Selling and administrative expenses increased 5% to $7.3 million, primarily due to increased salaries and benefit costs.

FINANCIAL OUTLOOK:

Based upon the Company’s year to date results and current outlook for the second half of the year, the Company is raising its financial outlook and expects 2017 total Company operating profit to increase 9% to 12% above 2016, compared to our prior expectation of a 3% to 5% increase.   

ABOUT MCGRATH RENTCORP:

Founded in 1979, McGrath RentCorp is a diversified business-to-business rental company with four rental divisions.  Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs in California, Texas, Florida, and the Mid-Atlantic from Washington D.C. to Georgia.  TRS-RenTelco rents and sells electronic test equipment and is one of the leading rental providers of general purpose and communications test equipment in the Americas.  Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids with operations serving key markets throughout the United States.  Mobile Modular Portable Storage provides portable storage solutions in the California, Texas, Florida, Northern Illinois, New Jersey, North Carolina and Georgia markets.  For more information on McGrath RentCorp and its operating units, please visit our websites:

Corporate – www.mgrc.com
Modular Buildings – www.mobilemodular.com
Electronic Test Equipment – www.trsrentelco.com
Tanks and Boxes – www.adlertankrentals.com
Portable Storage – www.mobilemodularcontainers.com
School Facilities Manufacturing – www.enviroplex.com

You should read this press release in conjunction with the financial statements and notes thereto included in the Company’s latest Forms 10-K, 10-Q and other SEC filings.  You can visit the Company’s web site at www.mgrc.com to access information on McGrath RentCorp, including the latest Forms 10-K, 10-Q and other SEC filings.

CONFERENCE CALL NOTE:

As previously announced in its press release of July 6, 2017, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on August 2, 2017 to discuss the second quarter 2017 results.  To participate in the teleconference, dial 1-844-707-0666 (in the U.S.), or 1-703-639-1220 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company’s website at www.mgrc.com.  A 7-day replay will be available following the call by dialing 1-855-859-2056 (in the U.S.), or 1-404-537-3406 (outside the U.S.).  The pass code for the call replay is 51612343.  In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company’s website at http://mgrc.com/Investor/EventsAndArchive

FORWARD-LOOKING STATEMENTS:

Statements in this press release which are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934.  All statements, other than statements of historical facts, regarding McGrath RentCorp’s business strategy, future operations, financial position, estimated revenues or losses, projected costs, prospects, plans and objectives are forward looking statements.  These forward-looking statements appear in a number of places and can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “future,” “intend,” “hopes,” “goals” or “certain” or the negative of these terms or other variations or comparable terminology.  In particular, the full year 2017 operating profit outlook in the CEO comments and “Financial Outlook” sections are forward-looking.

Management cautions that forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected in such forward-looking statements including, without limitation, the following:  the extent of and timetable for the recovery underway in our modular building division; the continued recovery of the California market; the impact of the bond initiative passed in California on the modular building division;  the state of the wireless communications network upgrade environment; the utilization levels of our Adler Tanks liquid and sold containment tank and box rental assets; the potential for continuing softness in communications test equipment rental demand in our electronics division; our customers’ need and ability to rent our products; failure by third parties to manufacture and deliver our products in a timely manner and to our specifications; our ability to successfully integrate and operate acquisitions, as well as manage expansions; our ability to effectively manage our rental assets; the risk that we may be subject to litigation under environmental, health and safety and product liability laws and claims from employees, vendors and other third parties; effect on our businesses from reductions to the price of oil or gas or the volatility of the oil industry generally; new or modified statutory or regulatory requirements; success of our strategic growth initiatives; risks associated with doing business with government entities; seasonality of our businesses; intense industry competition including increasing price pressure; our ability to timely deliver, install and redeploy our rental products; significant increases in raw materials, labor, and other costs; and risks associated with operating internationally. 

Our future business, financial condition and results of operations could differ materially from those anticipated by such forward-looking statements and are subject to risks and uncertainties including the risks set forth above, those discussed in Part II—Item 1A “Risk Factors” and elsewhere in our Form 10-K for the year ended December 31, 2016, and those that may be identified from time to time in our reports and registration statements filed with the SEC.  Forward-looking statements are made only as of the date of this press release and are based on management’s reasonable assumptions; however, these assumptions can be wrong or affected by known or unknown risks and uncertainties.  Readers should not place undue reliance on these forward-looking statements and are cautioned that any such forward-looking statements are not guarantees of future performance.  Except as otherwise required by law, we do not undertake any duty to update any of the forward-looking statements after the date of this press release to conform such statements to actual results or to changes in our expectations.

 
MCGRATH RENTCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
 
  Three Months Ended June 30,
  Six Months Ended June 30,
(in thousands, except per share amounts) 2017
  2016
  2017
  2016
Revenues                              
Rental $ 69,953     $ 66,747     $ 137,931     $ 133,279  
Rental related services   18,796       19,315       36,731       36,906  
Rental operations   88,749       86,062       174,662       170,185  
Sales   20,187       16,396       28,482       25,430  
Other   646       647       1,275       1,189  
Total revenues   109,582       103,105       204,419       196,804  
Costs and Expenses                              
Direct costs of rental operations:                              
Depreciation of rental equipment   17,242       18,231       34,621       36,771  
Rental related services   14,312       14,677       28,145       28,402  
Other   16,039       16,020       31,398       31,302  
   Total direct costs of rental operations   47,593       48,928       94,164       96,475  
Costs of sales   12,778       10,421       17,374       15,918  
   Total costs of revenues   60,371       59,349       111,538       112,393  
      Gross profit   49,211       43,756       92,881       84,411  
Selling and administrative expenses   27,365       25,683       55,213       52,080  
Income from operations   21,846       18,073       37,668       32,331  
Other income (expense):                              
Interest expense   (2,949 )     (2,990 )     (5,738 )     (6,546 )
Foreign currency exchange gain (loss)   11       (77 )     237       74  
   Income before provision for income taxes   18,908       15,006       32,167       25,859  
Provision for income taxes   7,447       5,927       12,733       10,214  
   Net income $ 11,461     $ 9,079     $ 19,434     $ 15,645  
Earnings per share:                              
Basic $ 0.48     $ 0.38     $ 0.81     $ 0.66  
Diluted $ 0.48     $ 0.38     $ 0.80     $ 0.65  
Shares used in per share calculation:                              
Basic   23,985       23,900       23,968       23,881  
Diluted   24,092       23,949       24,164       23,931  
Cash dividends declared per share $ 0.260     $ 0.255     $ 0.520     $ 0.510  
                               


MCGRATH RENTCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
    June 30,
  December 31, 
(in thousands)   2017    2016
Assets                
Cash   $ 1,871     $ 852  
Accounts receivable, net of allowance for doubtful accounts of $1,987 in 2017
  and $2,087 in 2016
    96,539       96,877  
Rental equipment, at cost:                
Relocatable modular buildings     782,503       769,190  
Electronic test equipment     249,935       246,325  
Liquid and solid containment tanks and boxes     309,784       308,542  
      1,342,222       1,324,057  
Less accumulated depreciation     (479,015 )     (467,686 )
Rental equipment, net     863,207       856,371  
Property, plant and equipment, net     118,117       112,190  
Prepaid expenses and other assets     34,422       25,583  
Intangible assets, net     8,159       8,595  
Goodwill     27,808       27,808  
Total assets   $ 1,150,123     $ 1,128,276  
Liabilities and Shareholders' Equity                
Liabilities:                
Notes payable   $ 330,287     $ 326,266  
Accounts payable and accrued liabilities     82,332       78,205  
Deferred income     42,533       37,499  
Deferred income taxes, net     292,606       292,019  
Total liabilities     747,758       733,989  
Shareholders’ equity:                
Common stock, no par value - Authorized 40,000 shares                
Issued and outstanding - 23,992 shares as of June 30, 2017 and 23,948
  shares as of December 31, 2016
    103,040       101,821  
Retained earnings     299,452       292,521  
Accumulated other comprehensive loss     (127 )     (55 )
Total shareholders’ equity     402,365       394,287  
Total liabilities and shareholders’ equity   $ 1,150,123     $ 1,128,276  
                 


MCGRATH RENTCORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
    Six Months Ended June 30,  
(in thousands)   2017    2016 
Cash Flows from Operating Activities :                
Net income   $ 19,434     $ 15,645  
Adjustments to reconcile net income to net cash provided by
  operating activities:
               
Depreciation and amortization     38,752       41,417  
Provision for doubtful accounts     597       987  
Share-based compensation     1,538       1,586  
Gain on sale of used rental equipment     (7,914 )     (6,282 )
Foreign currency exchange gain     (237 )     (74 )
Amortization of debt issuance costs     25       26  
Change in:                
   Accounts receivable     (259 )     (1,584 )
   Income taxes receivable           11,000  
   Prepaid expenses and other assets     (8,839 )     (2,863 )
   Accounts payable and accrued liabilities     680       4,361  
   Deferred income     5,034       2,061  
   Deferred income taxes     587       6,105  
      Net cash provided by operating activities     49,398       72,385  
Cash Flows from Investing Activities:                
Purchases of rental equipment     (46,118 )     (45,715 )
Purchases of property, plant and equipment     (9,623 )     (8,698 )
Proceeds from sales of used rental equipment     16,057       13,059  
      Net cash used in investing activities     (39,684 )     (41,354 )
Cash Flows from Financing Activities:                
Net borrowings under bank lines of credit     23,996       1,814  
Principal payments on Series A senior notes     (20,000 )     (20,000 )
Proceeds from the exercise of stock options           37  
Taxes paid related to net share settlement of stock awards     (319 )     (486 )
Payment of dividends     (12,390 )     (12,253 )
      Net cash used in financing activities     (8,713 )     (30,888 )
Effect of foreign currency exchange rate changes on cash     18       (8 )
      Net increase in cash     1,019       135  
Cash balance, beginning of period     852       1,103  
Cash balance, end of period   $ 1,871     $ 1,238  
Supplemental Disclosure of Cash Flow Information:                
Interest paid, during the period   $ 5,817     $ 6,646  
Net income taxes paid, during the period   $ 18,141     $ 5,679  
Dividends accrued during the period, not yet paid   $ 6,214     $ 6,135  
Rental equipment acquisitions, not yet paid   $ 6,359     $ 3,935  
                 


MCGRATH RENTCORP                                        
BUSINESS SEGMENT DATA (unaudited)                                        
Three months ended June 30, 2017                                        
(dollar amounts in thousands)   Mobile
Modular 
  TRS-
RenTelco 
  Adler Tanks    Enviroplex    Consolidated 
Revenues                                        
Rental   $ 35,030     $ 19,805     $ 15,118     $     $ 69,953  
Rental related services     11,966       654       6,176             18,796  
Rental operations     46,996       20,459       21,294             88,749  
Sales     9,504       5,605       926       4,152       20,187  
Other     138       475       33             646  
Total revenues     56,638       26,539       22,253       4,152       109,582  
                                         
Costs and Expenses                                        
Direct costs of rental operations:                                        
Depreciation     5,333       7,980       3,929             17,242  
Rental related services     8,930       657       4,725             14,312  
Other     10,247       3,272       2,520             16,039  
Total direct costs of rental operations     24,510       11,909       11,174             47,593  
Costs of  sales     6,994       2,176       802       2,806       12,778  
Total costs of revenues     31,504       14,085       11,976       2,806       60,371  
                                         
Gross Profit (Loss)                                        
Rental     19,451       8,553       8,669             36,673  
Rental related services     3,036       (3 )     1,450             4,483  
Rental operations     22,487       8,550       10,119             41,156  
Sales     2,509       3,429       125       1,346       7,409  
Other     138       475       33             646  
Total gross profit     25,134       12,454       10,277       1,346       49,211  
Selling and administrative expenses     13,817       5,330       7,261       957       27,365  
Income from operations   $ 11,317     $ 7,124     $ 3,016     $ 389       21,846  
Interest expense                                     (2,949 )
Foreign currency exchange gain                                     11  
Provision for income taxes                                     (7,447 )
Net income                                   $ 11,461  
                                         
Other Information                                        
Average rental equipment 1   $ 746,358     $ 248,117     $ 307,263                  
Average monthly total yield 2     1.56 %     2.66 %     1.64 %                
Average utilization 3     76.5 %     62.4 %     54.4 %                
Average monthly rental rate 4     2.05 %     4.27 %     3.01 %                
                                         
  1. Average rental equipment represents the cost of rental equipment excluding accessory equipment.  For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.
  2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
  3. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
  4. Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.


MCGRATH RENTCORP                                        
BUSINESS SEGMENT DATA (unaudited)                                        
Three months ended June 30, 2016                                        
(dollar amounts in thousands)   Mobile
Modular
    TRS-
RenTelco
    Adler Tanks     Enviroplex     Consolidated  
Revenues                                        
Rental   $ 31,637     $ 20,269     $ 14,841     $   —     $ 66,747  
Rental related services     12,132       717       6,466             19,315  
Rental operations     43,769       20,986       21,307             86,062  
Sales     5,785       6,428       184       3,999       16,396  
Other     125       494       28             647  
Total revenues     49,679       27,908       21,519       3,999       103,105  
                                         
Costs and Expenses                                        
Direct costs of rental operations:                                        
Depreciation     5,221       8,998       4,012             18,231  
Rental related services     9,024       629       5,024             14,677  
Other     10,536       3,337       2,147             16,020  
Total direct costs of rental operations     24,781       12,964       11,183             48,928  
Costs of  sales     4,264       3,402       201       2,554       10,421  
Total costs of revenues     29,045       16,366       11,384       2,554       59,349  
                                         
Gross Profit (Loss)                                        
Rental     15,881       7,933       8,682             32,496  
Rental related services     3,108       88       1,442             4,638  
Rental operations     18,989       8,021       10,124             37,134  
Sales     1,520       3,027       (17 )     1,445       5,975  
Other     125       494       28             647  
Total gross profit     20,634       11,542       10,135       1,445       43,756  
Selling and administrative expenses     12,336       5,546       6,893       908       25,683  
Income from operations   $ 8,298     $ 5,996     $ 3,242     $ 537       18,073  
Interest expense                                     (2,990 )
Foreign currency exchange loss                                     (77 )
Provision for income taxes                                     (5,927 )
Net income                                   $ 9,079  
                                         
Other Information                                        
Average rental equipment 1   $ 717,755     $ 254,970     $ 307,868                  
Average monthly total yield 2     1.47 %     2.65 %     1.61 %                
Average utilization 3     75.8 %     59.5 %     49.4 %                
Average monthly rental rate 4     1.94 %     4.45 %     3.25 %                
                                         
  1. Average rental equipment represents the cost of rental equipment excluding accessory equipment.  For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.
  2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
  3. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
  4. Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.


MCGRATH RENTCORP                                        
BUSINESS SEGMENT DATA (unaudited)                                        
Six months ended June 30, 2017                                        
(dollar amounts in thousands)   Mobile
Modular 
  TRS-
RenTelco 
  Adler Tanks    Enviroplex    Consolidated 
Revenues                                        
Rental   $ 68,684     $ 39,551     $ 29,696     $     $ 137,931  
Rental related services     23,554       1,312       11,865             36,731  
Rental operations     92,238       40,863       41,561             174,662  
Sales     12,468       9,988       1,115       4,911       28,482  
Other     235       1,002       38             1,275  
Total revenues     104,941       51,853       42,714       4,911       204,419  
                                         
Costs and Expenses                                        
Direct costs of rental operations:                                        
Depreciation     10,666       16,071       7,884             34,621  
Rental related services     17,727       1,254       9,164             28,145  
Other     19,894       6,605       4,899             31,398  
Total direct costs of rental operations     48,287       23,930       21,947             94,164  
Costs of  sales     9,076       4,076       935       3,287       17,374  
Total costs of revenues     57,363       28,006       22,882       3,287       111,538  
                                         
Gross Profit                                        
Rental     38,125       16,875       16,913             71,913  
Rental related services     5,827       58       2,700             8,585  
Rental operations     43,952       16,933       19,613             80,498  
Sales     3,391       5,912       181       1,624       11,108  
Other     235       1,002       38             1,275  
Total gross profit     47,578       23,847       19,832       1,624       92,881  
Selling and administrative expenses     27,617       11,019       14,528       2,049       55,213  
Income (loss) from operations   $ 19,961     $ 12,828     $ 5,304     $ (425 )     37,668  
Interest expense                                     (5,738 )
Foreign currency exchange gain                                     237  
Provision for income taxes                                     (12,733 )
Net income                                   $ 19,434  
                                         
Other Information                                        
Average rental equipment 1   $ 745,508     $ 247,099     $ 307,048                  
Average monthly total yield 2     1.54 %     2.67 %     1.61 %                
Average utilization 3     76.7 %     62.3 %     53.4 %                
Average monthly rental rate 4     2.00 %     4.28 %     3.02 %                
                                         
  1. Average rental equipment represents the cost of rental equipment excluding accessory equipment.  For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.
  2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
  3. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
  4. Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.


MCGRATH RENTCORP                                        
BUSINESS SEGMENT DATA (unaudited)                                        
Six months ended June 30, 2016                                        
(dollar amounts in thousands)   Mobile
Modular
    TRS-
RenTelco
    Adler Tanks     Enviroplex     Consolidated  
Revenues                                        
Rental   $ 62,792     $ 41,197     $ 29,290     $   —     $ 133,279  
Rental related services     23,337       1,501       12,068             36,906  
Rental operations     86,129       42,698       41,358             170,185  
Sales     8,432       12,262       589       4,147       25,430  
Other     202       932       55             1,189  
Total revenues     94,763       55,892       42,002       4,147       196,804  
                                         
Costs and Expenses                                        
Direct costs of rental operations:                                        
Depreciation     10,347       18,386       8,038             36,771  
Rental related services     17,559       1,265       9,578             28,402  
Other     19,552       6,976       4,774             31,302  
Total direct costs of rental operations     47,458       26,627       22,390             96,475  
Costs of  sales     6,018       6,707       535       2,658       15,918  
Total costs of revenues     53,476       33,334       22,925       2,658       112,393  
                                         
Gross Profit                                        
Rental     32,894       15,834       16,478             65,206  
Rental related services     5,778       236       2,490             8,504  
Rental operations     38,672       16,070       18,968             73,710  
Sales     2,413       5,556       54       1,489       9,512  
Other     202       932       55             1,189  
Total gross profit     41,287       22,558       19,077       1,489       84,411  
Selling and administrative expenses     24,798       11,343       14,155       1,784       52,080  
Income (loss) from operations   $ 16,489     $ 11,215     $ 4,922     $ (295 )     32,331  
Interest expense                                     (6,546 )
Foreign currency exchange gain                                     74  
Provision for income taxes                                     (10,214 )
Net income                                   $ 15,645  
                                         
Other Information                                        
Average rental equipment 1   $ 713,503     $ 257,767     $ 307,752                  
Average monthly total yield 2     1.47 %     2.66 %     1.60 %                
Average utilization 3     76.0 %     59.5 %     49.7 %                
Average monthly rental rate 4     1.93 %     4.48 %     3.19 %                
                                         
  1. Average rental equipment represents the cost of rental equipment excluding accessory equipment.  For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.
  2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
  3. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
  4. Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.


Reconciliation of Adjusted EBITDA to the most directly comparable GAAP measures

To supplement the Company’s financial data presented on a basis consistent with accounting principles generally accepted in the United States of America (“GAAP”), the Company presents “Adjusted EBITDA”, which is defined by the Company as net income before interest expense, provision for income taxes, depreciation, amortization, and share-based compensation.  The Company presents Adjusted EBITDA as a financial measure as management believes it provides useful information to investors regarding the Company’s liquidity and financial condition and because management, as well as the Company’s lenders, use this measure in evaluating the performance of the Company. 

Management uses Adjusted EBITDA as a supplement to GAAP measures to further evaluate the Company’s period-to-period operating performance, compliance with financial covenants in the Company’s revolving lines of credit and senior notes and the Company’s ability to meet future capital expenditure and working capital requirements.  Management believes the exclusion of non-cash charges, including share-based compensation, is useful in measuring the Company’s cash available for operations and performance of the Company.  Because management finds Adjusted EBITDA useful, the Company believes its investors will also find Adjusted EBITDA useful in evaluating the Company’s performance.  

Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of the Company’s profitability or liquidity. Adjusted EBITDA is not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. Unlike EBITDA, which may be used by other companies or investors, Adjusted EBITDA does not include share-based compensation charges.  The Company believes that Adjusted EBITDA is of limited use in that it does not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and does not accurately reflect real cash flow.  In addition, other companies may not use Adjusted EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted EBITDA for purposes of comparison. The Company’s presentation of Adjusted EBITDA should not be construed as an inference that the Company will not incur expenses that are the same as or similar to the adjustments in this presentation. Therefore, Adjusted EBITDA should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The Company compensates for the limitations of Adjusted EBITDA by relying upon GAAP results to gain a complete picture of the Company’s performance.  Because Adjusted EBITDA is a non-GAAP financial measure as defined by the SEC, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP. 

Reconciliation of Net Income to Adjusted EBITDA

(dollar amounts in thousands)   Three Months Ended
June 30,
  Six Months Ended
June 30,
  Twelve Months Ended
June 30, 
    2017
  2016    2017    2016    2017    2016 
Net income   $ 11,461     $ 9,079     $ 19,434     $ 15,645     $ 42,040     $ 40,779  
Provision for income taxes     7,447       5,927       12,733       10,214       31,199       26,108  
Interest     2,949       2,990       5,738       6,546       11,399       11,900  
Depreciation and amortization     19,348       20,557       38,752       41,417       78,514       83,526  
EBITDA     41,205       38,553       76,657       73,822       163,152       162,313  
Share-based compensation     732       730       1,538       1,586       3,043       3,032  
Adjusted EBITDA 1   $ 41,937     $ 39,283     $ 78,195     $ 75,408     $ 166,195     $ 165,345  
Adjusted EBITDA margin 2     38 %     38 %     38 %     38 %     38 %     40 %
                                                 


Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities

(dollar amounts in thousands)   Three Months Ended
June 30,
  Six Months Ended
June 30,
  Twelve Months Ended
June 30,
    2017
  2016
  2017    2016
  2017    2016 
Adjusted EBITDA 1   $ 41,937     $ 39,283     $ 78,195     $ 75,408     $ 166,195     $ 165,345  
Interest paid     (3,397 )     (3,660 )     (5,817 )     (6,646 )     (11,607 )     (11,791 )
Net income taxes paid     (12,576 )     (4,973 )     (18,141 )     (5,679 )     (28,017 )     (6,687 )
Gain on sale of used rental equipment     (4,971 )     (3,316 )     (7,914 )     (6,282 )     (15,371 )     (12,619 )
Foreign currency exchange loss (gain)     (11 )     77       (237 )     (74 )     (42 )     161  
Amortization of debt financing cost     12       13       25       26       51       51  
Change in certain assets and liabilities:                                                
Accounts receivable, net     (3,987 )     (3,977 )     338       (597 )     (925 )     (2,140 )
Income taxes receivable                 11,000          
Prepaid expenses and other assets     (7,303 )     (4,812 )     (8,839 )     (2,863 )     (4,027 )     2,066  
Accounts payable and other liabilities     11,218       13,451       6,754       6,031       7,943       9,515  
Deferred income     2,646       1,525       5,034       2,061       3,509       8,623  
Net cash provided by operating activities   $ 23,568     $ 33,611     $ 49,398     $ 72,385     $ 117,709     $ 152,524  
                                                 
  1. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, and share-based compensation.
  2. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total revenues for the period.
FOR INFORMATION CONTACT:          

Keith E. Pratt
EVP & Chief Financial Officer                        
925-606-9200    

Primary Logo

McGrath RentCorp
Monday, Jul 31, 2017
McGrath RentCorp Director Robert Hood to Retire, Bradley M. Shuster Elected to Board

LIVERMORE, Calif., July 31, 2017 (GLOBE NEWSWIRE) -- McGrath RentCorp (NASDAQ:MGRC) (the “Company”), a diversified business to business rental company, today announced the retirement of Director Robert Hood from the Board of Directors.  Ron Zech, Chairman of McGrath RentCorp’s Board stated, “Bob has been an esteemed member of the Board and the Chair of the Audit Committee for 18 years and I would personally like to thank him for his service. His deep financial expertise and broad business acumen have been invaluable assets in the boardroom and in his counsel to the Company’s management.”

The Company also today announced Bradley M. Shuster has been elected to the Company’s Board of Directors. Mr. Shuster will serve on the Board’s Audit and Governance Committees.

“We are very pleased to welcome Brad to our Board,” said Ron. “As a sitting CEO for a public company, his experience and perspective will be a valuable complement to McGrath RentCorp’s Board.” 

Mr. Shuster currently serves as Chairman of the Board and Chief Executive Officer of NMI Holdings, (NASDAQ:NMIH) and its principal subsidiary, National Mortgage Insurance Corporation (National MI), positions he has held since 2012.  Prior to joining NMI, Mr. Shuster was an executive with The PMI Group for 13 years, where he held various positions over the course of his tenure, the most recent being president of International and Strategic Investments and chief executive officer of PMI Capital Corporation. Before joining PMI, Mr. Shuster was a partner at Deloitte, LLP.

Mr. Shuster holds a Bachelor of Science in Business Administration from the University of California, Berkeley, and an M.B.A. from the University of California, Los Angeles. 

ABOUT MCGRATH RENTCORP:

Founded in 1979, McGrath RentCorp is a diversified business-to-business rental company with four rental divisions.  Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs in California, Texas, Florida, and the Mid-Atlantic from Washington D.C. to Georgia.  TRS-RenTelco rents and sells electronic test equipment and is one of the leading rental providers of general purpose and communications test equipment in the Americas.  Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids with operations serving key markets throughout the United States.  Mobile Modular Portable Storage provides portable storage solutions in the California, Texas, Florida, Northern Illinois, New Jersey, North Carolina and Georgia markets.  For more information on McGrath RentCorp and its operating units, please visit our websites:

Corporate – www.mgrc.com
Modular Buildings – www.mobilemodular.com
Electronic Test Equipment – www.trsrentelco.com
Tanks and Boxes – www.adlertankrentals.com
Portable Storage – www.mobilemodularcontainers.com
School Facilities Manufacturing – www.enviroplex.com

FOR INFORMATION CONTACT:
Joe Hanna
Chief Executive Officer
925-606-9200

Primary Logo

McGrath RentCorp
Thursday, Jul 06, 2017
McGrath RentCorp Sets Second Quarter 2017 Financial Results Date and Time

LIVERMORE, Calif., July 06, 2017 (GLOBE NEWSWIRE) -- McGrath RentCorp (NASDAQ:MGRC) (the “Company”), a diversified business-to-business rental company, today announced that it plans to release financial results for its second quarter of fiscal 2017, ending June 30, 2017, after the close of regular market trading on Wednesday, August 2, 2017.

McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) that afternoon to discuss the results.  There will also be a live Q&A session.  The conference call may be accessed by dialing 1-844-707-0666 (international callers dial 1-703-639-1220), or by listening to the simultaneous webcast on www.mgrc.com.  A 7-day replay will be available following the call by dialing 1-855-859-2056 (international callers dial 1-404-537-3406).  The conference call passcode is 51612343.  In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company’s website at http://mgrc.com/Investor/EventsAndArchive.

About McGrath RentCorp

Founded in 1979, McGrath RentCorp is a diversified business-to-business rental company with four rental divisions.  Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs in California, Texas, Florida, and the Mid-Atlantic from Washington D.C. to Georgia.  TRS-RenTelco rents and sells electronic test equipment and is one of the leading rental providers of general purpose and communications test equipment in the Americas.  Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids with operations serving key markets throughout the United States.  Mobile Modular Portable Storage provides portable storage solutions in the California, Texas, Florida, Northern Illinois, New Jersey, North Carolina and Georgia markets.  For more information on McGrath RentCorp and its operating units, please visit our websites:

Corporate – www.mgrc.com
Modular Buildings – www.mobilemodular.com
Electronic Test Equipment – www.trsrentelco.com
Tanks and Boxes – www.adlertankrentals.com
Portable Storage – www.mobilemodularcontainers.com
School Facilities Manufacturing – www.enviroplex.com

FOR INFORMATION CONTACT:              
Keith E. Pratt
Chief Financial Officer                
925-606-9200          

Primary Logo

McGrath RentCorp
Wednesday, Jun 07, 2017
McGrath RentCorp Declares Quarterly Dividend

LIVERMORE, Calif., June 07, 2017 (GLOBE NEWSWIRE) -- The Board of Directors of McGrath RentCorp (NASDAQ:MGRC), a diversified business to business rental company declared a quarterly cash dividend of $0.26 per common share for the quarter ended June 30, 2017.  The dividend will be payable on July 31, 2017 to all shareholders of record on July 17, 2017. The year 2017 marks the 25th consecutive year that McGrath RentCorp has raised its dividend to shareholders.

ABOUT MCGRATH RENTCORP

Founded in 1979, McGrath RentCorp is a diversified business-to-business rental company with four rental divisions.  Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs in California, Texas, Florida, and the Mid-Atlantic from Washington D.C. to Georgia.  TRS-RenTelco rents and sells electronic test equipment and is one of the leading rental providers of general purpose and communications test equipment in the Americas.  Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids with operations serving key markets throughout the United States.  Mobile Modular Portable Storage provides portable storage solutions in the California, Texas, Florida, Northern Illinois, New Jersey, North Carolina and Georgia markets.  For more information on McGrath RentCorp and its operating units, please visit our websites:

Corporate – www.mgrc.com
Modular Buildings – www.mobilemodular.com 
Electronic Test Equipment – www.trsrentelco.com 
Tanks and Boxes – www.adlertankrentals.com 
Portable Storage – www.mobilemodularcontainers.com 
School Facilities Manufacturing – www.enviroplex.com  

FOR INFORMATION CONTACT:
Keith E. Pratt
Chief Financial Officer
925-606-9200  

Primary Logo

McGrath RentCorp
Thursday, May 04, 2017
McGrath RentCorp to Present at the Oppenheimer 12th Annual Industrial Growth Conference

LIVERMORE, Calif., May 04, 2017 (GLOBE NEWSWIRE) -- McGrath RentCorp (Nasdaq:MGRC), a diversified business to business rental company, today announced that it will participate in the Oppenheimer 12th Annual Industrial Growth Conference at the Westin New York Grand Central Hotel in New York, NY on Tuesday, May 9, 2017.  McGrath’s President and CEO, Joe Hanna, and Executive Vice President and CFO, Keith Pratt, will present at 11:25 a.m. ET.

A simultaneous webcast and presentation slides will be available in the Investor Relations section of the Company’s website at http://mgrc.com/Investor/EventsAndArchive. A replay will be available for approximately 90 days on the company’s website shortly after completion of the presentation.

ABOUT MCGRATH RENTCORP

Founded in 1979, McGrath RentCorp is a diversified business-to-business rental company with four rental divisions.  Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs in California, Texas, Florida, and the Mid-Atlantic from Washington D.C. to Georgia.  TRS-RenTelco rents and sells electronic test equipment and is one of the leading rental providers of general purpose and communications test equipment in the Americas.  Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids with operations serving key markets throughout the United States.  Mobile Modular Portable Storage provides portable storage solutions in the California, Texas, Florida, Northern Illinois, New Jersey, North Carolina and Georgia markets.  For more information on McGrath RentCorp and its operating units, please visit our websites:

Corporate – www.mgrc.com
Modular Buildings – www.mobilemodular.com
Electronic Test Equipment – www.trsrentelco.com
Tanks and Boxes – www.adlertankrentals.com
Portable Storage – www.mobilemodularcontainers.com
School Facilities Manufacturing – www.enviroplex.com

FOR INFORMATION CONTACT:
Keith E. Pratt
EVP & Chief Financial Officer
925-606-9200

Primary Logo

McGrath RentCorp
Tuesday, May 02, 2017
McGrath RentCorp Announces Results for First Quarter 2017

LIVERMORE, Calif., May 02, 2017 (GLOBE NEWSWIRE) -- McGrath RentCorp (NASDAQ:MGRC) (the “Company”), a diversified business to business rental company, today announced total revenues for the quarter ended March 31, 2017 of $94.8 million, an increase of 1%, compared to the first quarter of 2016.  The Company reported net income of $8.0 million, or $0.33 per diluted share for the first quarter of 2017, compared to net income of $6.6 million, or $0.27 per diluted share, in the first quarter of 2016.

COMPANY HIGHLIGHTS:

  • Income from operations increased 11% year-over-year to $15.8 million.
  • Rental revenues increased 2% year-over-year to $68.0 million.
  • Adjusted EBITDA1 increased $0.1 million to $36.3 million for the first quarter of 2017.   
  • Dividend rate increased 2% year-over-year to $0.26 per share for the first quarter of 2017. On an annualized basis, this dividend represents a 3.0% yield on the May 1, 2017 close price of $34.72 per share.

Joe Hanna, President and CEO of McGrath RentCorp, made the following comments regarding these results and future expectations:

“We were pleased with our first quarter performance as each of our rental businesses achieved higher operating profit and contributed to the Company’s 11% operating profit increase compared to a year ago.

Mobile Modular rental revenues for the quarter increased 8% from a year ago as fleet utilization, rental rates and equipment on rent all increased.  Rental revenue growth was healthy across education and commercial markets, as well as our Portable Storage business.

TRS-RenTelco rental revenues for the quarter declined 6%, driven primarily by lower communications test equipment business activity in what continues to be a highly competitive environment.  Communications test equipment rental revenues declined by 15%, but were partly offset by a 3% increase for general-purpose test equipment.  While average equipment utilization increased, average rental rates declined for the quarter, primarily due to the business activity mix shift from communications to general-purpose test equipment. 

Adler Tank Rentals rental revenues for the quarter increased 1% from a year ago.  Upstream oil and natural gas rental revenue declined from 11% to 6% of total Adler rental revenues, but was more than offset by growth in other market verticals.  Average equipment on rent increased to $161 million from $155 million a year ago and average utilization improved, although rental rates continued to be under pressure.

During the quarter we continued our return on invested capital (or ROIC) work to identify initiatives that should improve long term Company performance, and we invested selectively in new rental equipment for modular buildings, portable storage units and general-purpose electronic test equipment.

While end market conditions remain challenging for Adler Tank Rentals, and to a lesser extent TRS-RenTelco, we are encouraged by our first quarter results and we will be working hard to build upon this good start to the year.”

___________________________
1. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization and share-based compensation.  A reconciliation of net income to Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating activities can be found at the end of this release.

DIVISION HIGHLIGHTS:

All comparisons presented below are for the quarter ended March 31, 2017 to the quarter ended March 31, 2016 unless otherwise indicated.

MOBILE MODULAR

For the first quarter of 2017, the Company’s Mobile Modular division reported income from operations of $8.6 million, an increase of $0.5 million, or 6%.  Rental revenues increased 8% to $33.7 million, depreciation expense increased 4% to $5.3 million and other direct costs increased 1% to $9.6 million, which resulted in an increase in gross profit on rental revenues of 13% to $18.7 million.  Rental related services revenues increased 3% to $11.6 million, with associated gross profit decreasing 13% to $2.8 million.  Sales revenues increased 12% to $3.0 million.  Gross margin on sales decreased to 30% from 34% in 2016 due to lower margins on used equipment sales, resulting in comparable gross profit on sales revenues of $0.9 million.  Selling and administrative expenses increased 11% to $13.8 million, primarily due to increased salaries and employee benefit costs and higher allocated corporate expenses. 

TRS-RENTELCO

For the first quarter of 2017, the Company’s TRS-RenTelco division reported income from operations of $5.7 million, an increase of $0.5 million, or 9%.  Rental revenues decreased 6% to $19.7 million, depreciation expense decreased 14% to $8.1 million and other direct costs decreased 8% to $3.3 million, which resulted in an increase in gross profit on rental revenues of 5% to $8.3 million.  Sales revenues decreased 25% to $4.4 million.  Gross margin on sales increased to 57% from 43% in 2016 primarily due to higher margins on used equipment sales, resulting in a 2% decrease in gross profit on sales revenues to $2.5 million.  Selling and administrative expenses decreased 2% to $5.7 million.

ADLER TANKS

For the first quarter of 2017, the Company’s Adler Tanks division reported income from operations of $2.3 million, an increase of $0.6 million, or 36%.  Rental revenues increased 1% to $14.6 million, depreciation expense decreased 2% to $4.0 million and other direct costs decreased 9% to $2.4 million, which together resulted in an increase in gross profit on rental revenues of 6% to $8.2 million.  Rental related services revenues increased 2% to $5.7 million, with gross profit on rental related services increasing 19% to $1.3 million.  Selling and administrative expenses were $7.3 million, which was comparable to the same period in 2016.

FINANCIAL OUTLOOK:

The Company reconfirms its expectation that total Company operating profit for 2017 will increase 3% to 5% above 2016 results. 

ABOUT MCGRATH RENTCORP:

Founded in 1979, McGrath RentCorp is a diversified business-to-business rental company with four rental divisions.  Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs in California, Texas, Florida, and the Mid-Atlantic from Washington D.C. to Georgia.  TRS-RenTelco rents and sells electronic test equipment and is one of the leading rental providers of general purpose and communications test equipment in the Americas.  Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids with operations serving key markets throughout the United States.  Mobile Modular Portable Storage provides portable storage solutions in the California, Texas, Florida, Northern Illinois, New Jersey, North Carolina and Georgia markets.  For more information on McGrath RentCorp and its operating units, please visit our websites:

Corporate – www.mgrc.com
Modular Buildings – www.mobilemodular.com
Electronic Test Equipment – www.trsrentelco.com
Tanks and Boxes – www.adlertankrentals.com
Portable Storage – www.mobilemodularcontainers.com
School Facilities Manufacturing – www.enviroplex.com

You should read this press release in conjunction with the financial statements and notes thereto included in the Company’s latest Forms 10-K, 10-Q and other SEC filings.  You can visit the Company’s web site at www.mgrc.com to access information on McGrath RentCorp, including the latest Forms 10-K, 10-Q and other SEC filings.

CONFERENCE CALL NOTE: 

As previously announced in its press release of April 4, 2017, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on May 2, 2017 to discuss the first quarter 2017 results.  To participate in the teleconference, dial 1-844-707-0666 (in the U.S.), or 1-703-639-1220 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company’s website at www.mgrc.com.  A 7-day replay will be available following the call by dialing 1-855-859-2056 (in the U.S.), or 1-404-537-3406 (outside the U.S.).  The pass code for the call replay is 1809365.  In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company’s website at http://mgrc.com/Investor/EventsAndArchive

FORWARD-LOOKING STATEMENTS:

Statements in this press release which are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934.  All statements, other than statements of historical facts, regarding McGrath RentCorp’s business strategy, future operations, financial position, estimated revenues or losses, projected costs, prospects, plans and objectives are forward looking statements.  These forward-looking statements appear in a number of places and can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “future,” “intend,” “hopes,” “goals” or “certain” or the negative of these terms or other variations or comparable terminology.  In particular, the full year 2017 operating profit outlook in the “Financial Outlook” section is forward-looking.

Management cautions that forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected in such forward-looking statements including, without limitation, the following:  the extent of and timetable for the recovery underway in our modular building division; the continued recovery of the California market; the impact of the bond initiative passed in California on the modular building division;  the state of the wireless communications network upgrade environment; the utilization levels of our Adler Tanks liquid and sold containment tank and box rental assets; the potential for continuing softness in communications test equipment rental demand in our electronics division; our customers’ need and ability to rent our products; failure by third parties to manufacture and deliver our products in a timely manner and to our specifications; our ability to successfully integrate and operate acquisitions, as well as manage expansions; our ability to effectively manage our rental assets; the risk that we may be subject to litigation under environmental, health and safety and product liability laws and claims from employees, vendors and other third parties; effect on our businesses from reductions to the price of oil or gas or the volatility of the oil industry generally; new or modified statutory or regulatory requirements; success of our strategic growth initiatives; risks associated with doing business with government entities; seasonality of our businesses; intense industry competition including increasing price pressure; our ability to timely deliver, install and redeploy our rental products; significant increases in raw materials, labor, and other costs; and risks associated with operating internationally. 

Our future business, financial condition and results of operations could differ materially from those anticipated by such forward-looking statements and are subject to risks and uncertainties including the risks set forth above, those discussed in Part II—Item 1A “Risk Factors” and elsewhere in our Form 10-K for the year ended December 31, 2016, and those that may be identified from time to time in our reports and registration statements filed with the SEC.  Forward-looking statements are made only as of the date of this press release and are based on management’s reasonable assumptions; however, these assumptions can be wrong or affected by known or unknown risks and uncertainties.  Readers should not place undue reliance on these forward-looking statements and are cautioned that any such forward-looking statements are not guarantees of future performance.  Except as otherwise required by law, we do not undertake any duty to update any of the forward-looking statements after the date of this press release to conform such statements to actual results or to changes in our expectations.

 
MCGRATH RENTCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
 
  Three Months Ended March 31,
(in thousands, except per share amounts) 2017
  2016
Revenues              
Rental $ 67,978     $ 66,532  
Rental related services   17,935       17,591  
Rental operations   85,913       84,123  
Sales   8,295       9,034  
Other   629       542  
Total revenues   94,837       93,699  
Costs and Expenses              
Direct costs of rental operations:              
Depreciation of rental equipment   17,379       18,540  
Rental related services   13,833       13,180  
Other   15,359       15,827  
Total direct costs of rental operations   46,571       47,547  
Costs of sales   4,596       5,497  
Total costs of revenues   51,167       53,044  
     Gross profit   43,670       40,655  
Selling and administrative expenses   27,848       26,397  
Income from operations   15,822       14,258  
Other income (expense):              
Interest expense   (2,789 )     (3,556 )
Foreign currency exchange gain   226       151  
Income before provision for income taxes     13,259       10,853  
Provision for income taxes   5,286       4,287  
Net income $ 7,973     $ 6,566  
Earnings per share:              
Basic $ 0.33     $ 0.28  
Diluted $ 0.33     $ 0.27  
Shares used in per share calculation:              
Basic   23,950       23,862  
Diluted   24,232       23,911  
Cash dividends declared per share $ 0.260     $ 0.255  
               


 
MCGRATH RENTCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
    March 31,
  December 31,
(in thousands)   2017
  2016
Assets                
Cash   $ 1,680     $ 852  
Accounts receivable, net of allowance for doubtful accounts of $2,087 in 2017 and 2016     92,552       96,877  
Rental equipment, at cost:                
Relocatable modular buildings     773,597       769,190  
Electronic test equipment     248,291       246,325  
Liquid and solid containment tanks and boxes     309,131       308,542  
      1,331,019       1,324,057  
Less accumulated depreciation     (474,038 )     (467,686 )
Rental equipment, net     856,981       856,371  
Property, plant and equipment, net     116,217       112,190  
Prepaid expenses and other assets     27,119       25,583  
Intangible assets, net     8,377       8,595  
Goodwill     27,808       27,808  
Total assets   $    1,130,734     $ 1,128,276  
Liabilities and Shareholders' Equity                
Liabilities:                
Notes payable   $ 323,843     $ 326,266  
Accounts payable and accrued liabilities     78,811       78,205  
Deferred income     39,887       37,499  
Deferred income taxes, net     291,568       292,019  
Total liabilities     734,109       733,989  
Shareholders’ equity:                
Common stock, no par value - Authorized 40,000 shares                
   Issued and outstanding - 23,956 shares as of March 31, 2017 and 23,948 shares as of December 31, 2016       102,483       101,821  
Retained earnings     294,250       292,521  
Accumulated other comprehensive loss     (108 )     (55 )
Total shareholders’ equity     396,625       394,287  
Total liabilities and shareholders’ equity   $ 1,130,734     $ 1,128,276  
                 


 
MCGRATH RENTCORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
    Three Months Ended March 31,
(in thousands)   2017
  2016
Cash Flows from Operating Activities:                
Net income   $ 7,973     $ 6,566  
Adjustments to reconcile net income to net cash provided by
  operating activities:
                 
Depreciation and amortization     19,405       20,860  
Provision for doubtful accounts     289       498  
Share-based compensation     806       856  
Gain on sale of used rental equipment     (2,943 )     (2,966 )
Foreign currency exchange gain     (226 )     (151 )
Amortization of debt issuance cost     13       13  
Change in:                
Accounts receivable     4,036       2,882  
Income taxes receivable         11,000  
Prepaid expenses and other assets     (1,536 )     1,949  
Accounts payable and accrued liabilities     (3,924 )     (4,360 )
Deferred income     2,388       536  
Deferred income taxes     (451 )     1,851  
    Net cash provided by operating activities     25,830       39,534  
Cash Flows from Investing Activities:                
Purchase of rental equipment     (15,914 )     (22,814 )
Purchase of property, plant and equipment     (5,835 )     (881 )
Proceeds from sale of used rental equipment     5,505       6,098  
    Net cash used in investing activities     (16,244 )     (17,597 )
Cash Flows from Financing Activities:                
Net repayments under bank lines of credit     (2,436 )     (15,522 )
Proceeds from the exercise of stock options         37  
Taxes paid related to net share settlement of stock awards     (143 )     (344 )
Payment of dividends     (6,155 )     (6,136 )
    Net cash used in financing activities     (8,734 )     (21,965 )
Effect of foreign currency exchange rate changes on cash     (24 )     (13 )
    Net increase (decrease) in cash     828       (41 )
Cash balance, beginning of period     852       1,103  
Cash balance, end of period   $ 1,680     $ 1,062  
Supplemental Disclosure of Cash Flow Information:                
Interest paid, during the period   $ 2,303     $ 2,986  
Net income taxes paid, during the period   $ 5,565     $ 706  
Dividends accrued during the period, not yet paid   $ 6,190     $ 6,120  
Rental equipment acquisitions, not yet paid   $ 7,513     $ 3,752  
                 


   
MCGRATH RENTCORP   
BUSINESS SEGMENT DATA (unaudited)   
Three months ended March 31, 2017   
(dollar amounts in thousands)    Mobile
Modular

  TRS-
RenTelco

       Adler
Tanks

  Enviroplex
  Consolidated
Revenues                                            
Rental   $ 33,654     $ 19,746         $ 14,578     $     $ 67,978  
Rental related services     11,588       658           5,689             17,935  
Rental operations     45,242       20,404           20,267             85,913  
Sales     2,964       4,383           189       759       8,295  
Other     97       527           5             629  
Total revenues     48,303       25,314           20,461       759       94,837  
                                             
Costs and Expenses                                            
Direct costs of rental operations:                                            
Depreciation     5,333       8,091           3,955             17,379  
Rental related services     8,797       597           4,439             13,833  
Other     9,647       3,333           2,379             15,359  
Total direct costs of rental operations       23,777       12,021           10,773             46,571  
Costs of  sales     2,082       1,900           133       481       4,596  
Total costs of revenues     25,859       13,921           10,906       481       51,167  
                                             
Gross Profit                                            
Rental     18,674       8,322           8,244             35,240  
Rental related services     2,791       61           1,250             4,102  
Rental operations     21,465       8,383           9,494             39,342  
Sales     882       2,483           56       278       3,699  
Other     97       527           5             629  
Total gross profit     22,444       11,393           9,555       278       43,670  
Selling and administrative expenses     13,800       5,689           7,267       1,092       27,848  
Income from operations   $ 8,644     $ 5,704         $ 2,288     $ (814 )   $ 15,822  
Interest expense                                         (2,789 )
Foreign currency exchange gain                                         226  
Provision for income taxes                                         (5,286 )
Net income                                       $ 7,973  
                                             
Other Information                                            
Average rental equipment 1   $ 744,641     $ 246,015         $ 306,681                  
Average monthly total yield 2     1.51 %     2.68 %         1.58 %                
Average utilization 3     76.8 %     62.2 %         52.3 %                
Average monthly rental rate 4     1.96 %     4.30 %         3.03 %                
                                             
  1. Average rental equipment represents the cost of rental equipment excluding accessory equipment.  For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.
  2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
  3. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
  4. Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.
                                         
 
MCGRATH RENTCORP 
BUSINESS SEGMENT DATA (unaudited) 
Three months ended March 31, 2016 
(dollar amounts in thousands)    Mobile
Modular

  TRS-
RenTelco

   Adler
Tanks

  Enviroplex
  Consolidated
Revenues                                        
Rental   $ 31,155     $ 20,928     $ 14,449     $     $ 66,532  
Rental related services     11,205       784       5,602             17,591  
Rental operations     42,360       21,712       20,051             84,123  
Sales     2,647       5,834       405       148       9,034  
Other     77       438       27             542  
Total revenues     45,084       27,984       20,483       148       93,699  
                                         
Costs and Expenses                                        
Direct costs of rental operations:                                        
Depreciation     5,126       9,388       4,026             18,540  
Rental related services     7,990       636       4,554             13,180  
Other     9,561       3,639       2,627             15,827  
Total direct costs of rental operations       22,677       13,663       11,207             47,547  
Costs of  sales     1,754       3,305       334       104       5,497  
Total costs of revenues     24,431       16,968       11,541       104       53,044  
                                         
Gross Profit                                        
Rental     16,468       7,901       7,796             32,165  
Rental related services     3,215       148       1,048             4,411  
Rental operations     19,683       8,049       8,844             36,576  
Sales     893       2,529       71       44       3,537  
Other     77       438       27             542  
Total gross profit     20,653       11,016       8,942       44       40,655  
Selling and administrative expenses     12,462       5,797       7,262       876       26,397  
Income from operations   $ 8,191     $ 5,219     $ 1,680     $ (832 )     14,258  
Interest expense                                     (3,556 )
Foreign currency exchange gain                                     151  
Provision for income taxes                                     (4,287 )
Net income                                   $ 6,566  
                                         
Other Information                                        
Average rental equipment 1   $ 709,160     $ 260,835     $ 307,596                  
Average monthly total yield 2     1.46 %     2.67 %     1.57 %                
Average utilization 3     76.1 %     59.6 %     50.3 %                
Average monthly rental rate 4     1.93 %     4.49 %     3.11 %                
                                         
  1. Average rental equipment represents the cost of rental equipment excluding accessory equipment.  For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.
  2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
  3. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
  4. Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

Reconciliation of Adjusted EBITDA to the most directly comparable GAAP measures

To supplement the Company’s financial data presented on a basis consistent with accounting principles generally accepted in the United States of America (“GAAP”), the Company presents “Adjusted EBITDA”, which is defined by the Company as net income before interest expense, provision for income taxes, depreciation, amortization, and share-based compensation.  The Company presents Adjusted EBITDA as a financial measure as management believes it provides useful information to investors regarding the Company’s liquidity and financial condition and because management, as well as the Company’s lenders, use this measure in evaluating the performance of the Company. 

Management uses Adjusted EBITDA as a supplement to GAAP measures to further evaluate the Company’s period-to-period operating performance, compliance with financial covenants in the Company’s revolving lines of credit and senior notes and the Company’s ability to meet future capital expenditure and working capital requirements.  Management believes the exclusion of non-cash charges, including share-based compensation, is useful in measuring the Company’s cash available for operations and performance of the Company.  Because management finds Adjusted EBITDA useful, the Company believes its investors will also find Adjusted EBITDA useful in evaluating the Company’s performance.  

Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of the Company’s profitability or liquidity. Adjusted EBITDA is not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. Unlike EBITDA, which may be used by other companies or investors, Adjusted EBITDA does not include share-based compensation charges.  The Company believes that Adjusted EBITDA is of limited use in that it does not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and does not accurately reflect real cash flow.  In addition, other companies may not use Adjusted EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted EBITDA for purposes of comparison. The Company’s presentation of Adjusted EBITDA should not be construed as an inference that the Company will not incur expenses that are the same as or similar to the adjustments in this presentation. Therefore, Adjusted EBITDA should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The Company compensates for the limitations of Adjusted EBITDA by relying upon GAAP results to gain a complete picture of the Company’s performance.  Because Adjusted EBITDA is a non-GAAP financial measure as defined by the SEC, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP. 

 
Reconciliation of Net Income to Adjusted EBITDA                                
(dollar amounts in thousands)   Three Months Ended
March 31,
  Twelve Months Ended
March 31,
    2017
  2016
  2017
  2016
Net income   $ 7,973     $ 6,566     $ 39,658     $ 40,190  
Provision for income taxes     5,286       4,287       29,679       25,724  
Interest     2,789       3,556       11,440       11,257  
Depreciation and amortization     19,404       20,860       79,723       84,234  
EBITDA     35,452       35,269       160,500       161,405  
Share-based compensation     806       856       3,041       3,324  
Adjusted EBITDA 1   $   36,258     $   36,125     $  163,541     $  164,729  
Adjusted EBITDA margin 2     38 %     39 %     38 %     40 %
                                 


 
Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities
               
(dollar amounts in thousands)   Three Months Ended
March 31,
  Twelve Months Ended
March 31,
 
    2017     2016     2017     2016  
Adjusted EBITDA 1   $ 36,258     $ 36,125     $ 163,541     $ 164,729  
Interest paid     (2,420 )     (2,986 )     (11,870 )     (11,019 )
Net income taxes paid     (5,565 )     (706 )     (20,414 )     (2,888 )
Gain on sale of used rental equipment     (2,943 )     (2,966 )     (13,716 )     (11,999 )
Foreign currency exchange loss (gain)     (226 )     (151 )     46       149  
Amortization of debt issuance costs     13       13       52       52  
Change in certain assets and liabilities:                                
Accounts receivable, net     4,325       3,380       (915 )     (2,776 )
Income taxes receivable         11,000            
Prepaid expenses and other assets     (1,536 )     1,949       (1,536 )     8,735  
Accounts payable and other liabilities       (4,464 )     (6,660 )     10,370       (2,996 )
Deferred income     2,388       536       2,388       7,465  
Net cash provided by operating activities   $ 25,830     $ 39,534     $ 127,946     $ 149,452  
                                 
  1. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, and share-based compensation.
  2. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total revenues for the period.
FOR INFORMATION CONTACT:
Keith E. Pratt
EVP & Chief Financial Officer
925-606-9200

Primary Logo

McGrath RentCorp
Tuesday, Apr 04, 2017
McGrath RentCorp Sets First Quarter 2017 Financial Results Date and Time

LIVERMORE, Calif., April 04, 2017 (GLOBE NEWSWIRE) -- McGrath RentCorp (NASDAQ:MGRC) (the “Company”), a diversified business-to-business rental company, today announced that it plans to release financial results for its first quarter of fiscal 2017, ending March 31, 2017, after the close of regular market trading on Tuesday, May 2, 2017.

McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) that afternoon to discuss the results.  There will also be a live Q&A session.  The conference call may be accessed by dialing 1-844-707-0666 (international callers dial 1-703-639-1220), or by listening to the simultaneous webcast on www.mgrc.com.  A 7-day replay will be available following the call by dialing 1-855-859-2056 (international callers dial 1-404-537-3406).  The conference call passcode is 1809365.  In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company’s website at http://mgrc.com/Investor/EventsAndArchive.

ABOUT MCGRATH RENTCORP
Founded in 1979, McGrath RentCorp is a diversified business-to-business rental company with four rental divisions. Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs in California, Texas, Florida, and the Mid-Atlantic from Washington D.C. to Georgia. TRS-RenTelco rents and sells electronic test equipment and is one of the leading rental providers of general purpose and communications test equipment in the Americas. Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids with operations serving key markets throughout the United States. Mobile Modular Portable Storage provides portable storage solutions in the California, Texas, Florida, Northern Illinois, New Jersey, North Carolina and Georgia markets. For more information on McGrath RentCorp and its operating units, please visit our websites:

Corporate – www.mgrc.com
Modular Buildings – www.mobilemodular.com
Electronic Test Equipment – www.trsrentelco.com
Tanks and Boxes – www.adlertankrentals.com
Portable Storage – www.mobilemodularcontainers.com
School Facilities Manufacturing – www.enviroplex.com 

FOR INFORMATION CONTACT:              
Keith E. Pratt
Chief Financial Officer                
925-606-9200 

Primary Logo

McGrath RentCorp
Tuesday, Feb 28, 2017
McGrath RentCorp Announces Results for Fourth Quarter 2016

Income from Operations increases 6%
EPS decreases 17% to $0.40 due to income tax expense increase
Company announces 2% dividend increase; 25th consecutive year increase

LIVERMORE, Calif., Feb. 28, 2017 (GLOBE NEWSWIRE) -- McGrath RentCorp (NASDAQ:MGRC) (the “Company”), a diversified business to business rental company, today announced total revenues for the quarter ended December 31, 2016 of $105.3 million, which was unchanged from the fourth quarter of 2015.  The Company reported net income of $9.7 million, or $0.40 per diluted share for the fourth quarter of 2016, compared to net income of $11.5 million, or $0.48 per diluted share, in the fourth quarter of 2015.

Total revenues for the year ended December 31, 2016 were $424.1 million, compared to $404.5 million in 2015.  Rental revenues decreased 1% to $271.4 million in 2016, compared to $273.7 million in 2015, with income from operations increasing 3% to $79.3 million.  Net income for the year ended December 31, 2016 decreased 5% to $38.3 million, compared to 2015.  Diluted earnings per share increased 1% to $1.60 in 2016 from $1.59 in 2015.  

The Company’s effective tax rate for the fourth quarter 2016 was 50.8% compared to 37.8% in the fourth quarter 2015.  This increase was driven by the full year 2016 effective tax rate rising to 42.9% as compared to 39.0 % for 2015, which increased the provision for income taxes in 2016 by $2.6 million and reduced earnings by $0.11 per diluted share in the fourth quarter results.  The increased effective tax rate in 2016 was primarily a result of a change in business mix by state and the decision to exit TRS-RenTelco’s branch operations in India.  Higher business levels in states with higher tax rates, in particular growth in California, and the resulting re-pricing of deferred tax liabilities accounted for approximately $1.6 million. In addition, the decision to exit branch operations in India accounted for approximately $0.7 million.  The Company estimates an effective tax rate of 40.0% for calendar year 2017.     

The Company also announced that the board of directors declared a quarterly cash dividend of $0.26 per share for the quarter ending March 31, 2017, an increase of 2% over the prior year period.  On an annualized basis, the 2017 dividend represents a 2.7% yield, based on the February 27, 2017 closing stock price.  The cash dividend will be payable on April 28, 2017 to all shareholders of record on April 14, 2017. This marks the 25th consecutive year the Company has increased its annual dividend.

Fourth quarter operating profit increased 6% compared to a year ago as higher operating profit at Mobile Modular and Enviroplex was partly offset by lower operating profit at Adler Tank Rentals and TRS-RenTelco.

Modular division-wide rental revenues for the quarter increased $2.8 million, or 9%, to $34.5 million from a year ago.  Gross profit from rental revenues increased by 24% as rental revenue margins increased from 54% to 62%, partly due to lower equipment preparation expenses.  Modular division income from operations grew 27% to $13.2 million from a year ago as a result of 18% growth in total gross profit, primarily from higher gross profit from rental revenues, partly offset by higher SG&A expenses.  Modular division average rental equipment utilization for the quarter was flat compared to a year ago at 77.5%.

Mobile Modular Portable Storage continued to make good progress during the fourth quarter and grew rental revenues 13% compared to the same period a year ago. Progress continued towards making each of the portable storage operating geographies increasingly successful.

Rental revenues for TRS-RenTelco declined $1.9 million for the quarter, or 8%, to $20.7 million from a year ago.  The year over year reduction in rental revenues was driven primarily by lower communications test equipment business activity and a continuing highly competitive environment.  Communications test equipment rental revenues declined by 19% while general-purpose increased 5% for the quarter compared to the same period a year ago.  Average equipment utilization was 62.3% compared to 61.2% in the same period in 2015.  Average rental rates declined for the quarter to 4.46% from 4.67% for the fourth quarter of 2015, primarily due to the business activity mix shift from communications to general-purpose test equipment as well as a highly competitive communications test equipment marketplace.  Income from operations declined 5% to $6.3 million as lower rental and sales revenues were partly offset by lower rental equipment depreciation, lower SG&A expenses and higher gross margins on equipment sales as compared to a year ago.

Rental revenues at Adler Tank Rentals declined $1.2 million for the quarter, or 8%, to $15.1 million from a year ago but were up from $14.2 million in the third quarter of 2016.  Average utilization was 51.3% for the quarter compared to 54.0% a year ago, and 49.4% for the third quarter of 2016.  Fourth quarter average equipment on rent declined to $157 million from $166 million a year ago, but was up from $152 million in the third quarter of 2016.  Upstream oil and natural gas rental revenue declined from 11% of total Adler rental revenues in the fourth quarter of 2015 to 8% for the same period in 2016.  Weak demand in the upstream oil and natural gas market put downward pressure on 21K multi-purpose tank utilization and rental rates in upstream, midstream and downstream energy sectors, as well as in other market verticals. Income from operations for the quarter decreased $2.1 million, or 48%, to $2.2 million from a year ago, primarily due to lower gross profit on rental revenues. 

Despite very challenging end market conditions throughout the year for Adler Tank Rentals, and to a lesser extent TRS-RenTelco, positive results at Mobile Modular and Enviroplex enabled the Company to grow full year 2016 income from operations to $79 million from $77 million in 2015.  Strong cash flows enabled the Company to reduce debt by $55 million, while paying dividends of $24 million and selectively deploying new capital to increase the size of the modular division rental equipment fleet by $32 million.

All comparisons presented below are for the quarter ended December 31, 2016 to the quarter ended December 31, 2015 unless otherwise indicated.

MOBILE MODULAR

For the fourth quarter of 2016, the Company’s Mobile Modular division reported a $2.8 million increase in income from operations, or 27%, to $13.2 million. Rental revenues increased 9% to $34.5 million, depreciation expense increased 7% to $5.4 million and other direct costs decreased 17% to $7.8 million, which resulted in an increase in gross profit on rental revenues of 24% to $21.3 million.  Rental related services revenues increased 4% to $12.2 million, with gross profit on rental related services revenues increasing 11% to $3.8 million. Sales revenues decreased 36% to $4.3 million, with gross profit on sales revenues decreasing 29% to $1.3 million, primarily due to lower new equipment sales in the fourth quarter of 2016.  Selling and administrative expenses increased 10% to $13.3 million, primarily due to higher allocated corporate expenses. 

TRS-RENTELCO

For the fourth quarter of 2016, the Company’s TRS-RenTelco division reported a $0.4 million decrease in income from operations, or 5%, to $6.3 million.  Rental revenues decreased 8% to $20.7 million, depreciation expense decreased 14% to $8.3 million and other direct costs increased 9% to $3.8 million, which resulted in a decrease in gross profit on rental revenues of 9% to $8.6 million.  Sales revenues decreased 24% to $4.5 million.  Gross profit on sales revenues increased 5% to $2.7 million, with gross margin percentage increasing to 60% from 43%, primarily due to higher margins on new and used equipment sales in the fourth quarter of 2016.  Selling and administrative expenses decreased 7% to $5.5 million, primarily due to lower bad debt expense.

ADLER TANKS

For the fourth quarter of 2016, the Company’s Adler Tanks division reported a $2.1 million decrease in income from operations, or 48%, to $2.2 million.  Rental revenues decreased 8% to $15.1 million, depreciation expense decreased 3% to $3.9 million and other direct costs increased 26% to $3.1 million, which resulted in a decrease in gross profit on rental revenues of 18% to $8.0 million.  Rental related services revenues decreased 6% to $6.0 million, with gross profit on rental related services decreasing 12% to $1.1 million. Selling and administrative expenses increased 1% to $6.8 million.

OTHER HIGHLIGHTS

  • Debt decreased $19.0 million during the quarter to $326.4 million, with the Company’s funded debt (notes payable) to equity ratio decreasing from 0.88 to 1 at September 30, 2016 to 0.82 to 1 at December 31, 2016.  As of December 31, 2016, the Company had capacity to borrow an additional $245.6 million under its lines of credit. 
  • Share Repurchases of the Company’s common stock during the fourth quarter 2015 were 551,685 shares for an aggregate repurchase price of $15.2 million, or an average repurchase price of $27.50 per share.  There were no repurchases of the Company’s common stock made during the fourth quarter of 2016.
  • Dividend rate increased 2% to $0.255 per share for the fourth quarter of 2016 compared to the fourth quarter of 2015. On an annualized basis, this dividend represents a 2.7% yield on the February 27, 2017 close price of $37.95 per share.
  • Adjusted EBITDA was flat at $42.9 million for the fourth quarter of 2016 compared to the fourth quarter of 2015.  At December 31, 2016, the Company’s ratio of funded debt to the last twelve months actual Adjusted EBITDA was 2.00 to 1, compared to 2.11 to 1 at September 30, 2016.  Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization and share-based compensation.  A reconciliation of net income to Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating activities can be found at the end of this release.

You should read this press release in conjunction with the financial statements and notes thereto included in the Company’s latest Forms 10-K, 10-Q and other SEC filings.  You can visit the Company’s web site at www.mgrc.com to access information on McGrath RentCorp, including the latest Forms 10-K, 10-Q and other SEC filings.

FINANCIAL OUTLOOK

Comparing 2017 with 2016, the Company currently expects operating profits to be higher at Mobile Modular and roughly flat at TRS-RenTelco and Adler Tanks

For the full-year 2017, the Company expects:

  • Rental revenues to increase between 1% and 3% over 2016. 
  • Sales revenues to be comparable to 2016. 
  • Rental equipment depreciation expense to be between $67 and $69 million
  • “Other” direct costs of rental operations, primarily for rental equipment maintenance and repair, to be between $62 and $64 million
  • Selling and administrative costs to be between $110 and $112 million
  • Operating profit to increase between 3% and 5% over 2016. 
  • Full year interest expense to be approximately $12 million
  • Effective tax rate to be 40%, excluding any potential impact from ASU 2016-09.
  • Diluted share count to be between 24.1 and 24.3 million shares. 

These forward-looking statements reflect McGrath RentCorp’s expectations as of February 28, 2017.  Actual 2017 results may be materially different and affected by many factors, including those factors outlined in the “forward-looking statements” paragraph at the end of this press release.

ABOUT MCGRATH RENTCORP

Founded in 1979, McGrath RentCorp is a diversified business-to-business rental company.  The Company’s Mobile Modular division rents and sells modular buildings to fulfill customers’ temporary and permanent classroom and office space needs in California, Texas, Florida, and the Mid-Atlantic from Washington D.C. to Georgia.  The Company’s TRS-RenTelco division rents and sells electronic test equipment and is one of the leading rental providers of general purpose and communications test equipment in the Americas.  The Company’s Adler Tank Rentals subsidiary rents and sells containment solutions for hazardous and nonhazardous liquids and solids with operations today serving key markets throughout the United States.  In 2008, the Company entered the portable storage container rental business under the trade name Mobile Modular Portable Storage.  Today, the business is located in the key markets of California, Texas, Florida, Northern Illinois, New Jersey and most recently entered the North Carolina region.  For more information on McGrath RentCorp and its operating units, please visit our websites:

Corporate – www.mgrc.com
Tanks and Boxes – www.adlertankrentals.com
Modular Buildings – www.mobilemodular.com
Portable Storage – www.mobilemodularcontainers.com
Electronic Test Equipment – www.trsrentelco.com
School Facilities Manufacturing – www.enviroplex.com

CONFERENCE CALL NOTE

As previously announced in its press release of January 26, 2017, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on February 28, 2017 to discuss the fourth quarter 2016 results.  To participate in the teleconference, dial 1-844-707-0666 (in the U.S.), or 1-703-639-1220 (outside the U.S.), or visit the investor relations section of the Company’s website at www.mgrc.com. Telephone replay of the call will be available for 7 days following the call by dialing 1-855-859-2056 (in the U.S.), or 1-404-537-3406 (outside the U.S.).  The pass code for the call replay is 61399095. In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company’s website at http://mgrc.com/Investor/EventsAndArchive

FORWARD-LOOKING STATEMENTS

Statements in this press release which are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934.  All statements, other than statements of historical facts, regarding McGrath RentCorp’s business strategy, future operations, financial position, estimated revenues or losses, projected costs, prospects, plans and objectives are forward looking statements.  These forward-looking statements appear in a number of places and can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “future,” “intend,” “hopes,” “goals” or “certain” or the negative of these terms or other variations or comparable terminology.  In particular, statements about the full year 2017 outlook in the section of the press release entitled “Financial Outlook” are forward-looking statements.

Management cautions that forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected in such forward-looking statements including, without limitation, the following:  the extent of and timetable for the recovery underway in our modular building division; the continued recovery of the California market; the impact of the bond initiative passed in California on the modular building division;  the state of the wireless communications network upgrade environment; the utilization levels of our Adler Tanks liquid and sold containment tank and box rental assets; the potential for continuing softness in communications test equipment rental demand in our electronics division; our customers’ need and ability to rent our products; failure by third parties to manufacture and deliver our products in a timely manner and to our specifications; our ability to successfully integrate and operate acquisitions, as well as manage expansions; our ability to effectively manage our rental assets; the risk that we may be subject to litigation under environmental, health and safety and product liability laws and claims from employees, vendors and other third parties; effect on our businesses from reductions to the price of oil or gas or the volatility of the oil industry generally; new or modified statutory or regulatory requirements; success of our strategic growth initiatives; risks associated with doing business with government entities; seasonality of our businesses; intense industry competition including increasing price pressure; our ability to timely deliver, install and redeploy our rental products; significant increases in raw materials, labor, and other costs; and risks associated with operating internationally. 

Our future business, financial condition and results of operations could differ materially from those anticipated by such forward-looking statements and are subject to risks and uncertainties including the risks set forth above, those discussed in Part II—Item 1A “Risk Factors” and elsewhere in our Form 10-K for the year ended December 31, 2016, and those that may be identified from time to time in our reports and registration statements filed with the SEC.  Forward-looking statements are made only as of the date of this press release and are based on management’s reasonable assumptions; however, these assumptions can be wrong or affected by known or unknown risks and uncertainties.  Readers should not place undue reliance on these forward-looking statements and are cautioned that any such forward-looking statements are not guarantees of future performance.  Except as otherwise required by law, we do not undertake any duty to update any of the forward-looking statements after the date of this press release to conform such statements to actual results or to changes in our expectations.

   
   
MCGRATH RENTCORP  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
(UNAUDITED)  
                                 
    Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
(dollar amounts in thousands, except per share amounts)   2016     2015     2016     2015  
                                 
Revenues                                
Rental   $ 70,352     $ 70,694     $ 271,388     $ 273,696  
Rental related services     18,831       18,858       75,859       73,314  
  Rental operations     89,183       89,552       347,247       347,010  
Sales     15,494       15,204       74,410       55,385  
Other     606       526       2,423       2,149  
    Total revenues     105,283       105,282       424,080       404,544  
                                 
Costs and Expenses                                
Direct costs of rental operations:                                
  Depreciation of rental equipment     17,607       18,706       72,197       75,213  
  Rental related services     13,970       14,117       56,374       54,719  
  Other     14,785       15,467       62,800       60,936  
    Total direct costs of rental operations     46,362       48,290       191,371       190,868  
Costs of sales     9,598       10,236       48,542       36,769  
    Total costs of revenues     55,960       58,526       239,913       227,637  
      Gross profit     49,323       46,756       184,167       176,907  
Selling and administrative expenses     26,627       25,289       104,908       99,950  
  Income from operations     22,696       21,467       79,259       76,957  
Other expenses:                                
  Interest expense     (2,721 )     (2,910 )     (12,207 )     (10,092 )
  Foreign currency exchange loss     (180 )     (34 )     (121 )     (488 )
    Income before provision for income taxes     19,795       18,523       66,931       66,377  
  Provision for income taxes     10,061       7,005       28,680       25,907  
    Net income   $ 9,734     $ 11,518     $ 38,251     $ 40,470  
                                 
Earnings per share:                                
  Basic   $ 0.41     $ 0.48     $ 1.60     $ 1.60  
  Diluted   $ 0.40     $ 0.48     $ 1.60     $ 1.59  
Shares used in per share calculation:                                
  Basic     23,927       23,932       23,900       25,369  
  Diluted     24,123       24,015       23,976       25,457  
                                 
Cash dividend declared per share   $ 0.255     $ 0.250     $ 1.02     $ 1.00  
                                 
                                 


               

   
MCGRATH RENTCORP  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(UNAUDITED)  
                 
    December 31,     December 31,  
(in thousands)   2016     2015  
                 
Assets                
Cash   $ 852     $ 1,103  
Accounts receivable, net of allowance for doubtful accounts of $2,087 in 2016 and 2015     96,877       95,017  
Income taxes receivable           11,000  
Rental equipment, at cost:                
Relocatable modular buildings     769,190       736,875  
Electronic test equipment     246,325       262,945  
Liquid and solid containment tanks and boxes     308,542       310,263  
      1,324,057       1,310,083  
Less accumulated depreciation     (467,686 )     (440,482 )
Rental equipment, net     856,371       869,601  
Property, plant and equipment, net     112,190       109,753  
Prepaid expenses and other assets     25,583       28,802  
Intangible assets, net     8,595       9,465  
Goodwill     27,808       27,808  
  Total assets   $ 1,128,276     $ 1,152,549  
Liabilities and Shareholders Equity                
Liabilities:                
Notes payable   $ 326,266     $ 381,281  
Accounts payable and accrued liabilities     78,205       71,942  
Deferred income     37,499       36,288  
Deferred income taxes, net     292,019       283,351  
  Total liabilities     733,989       772,862  
Shareholders’ equity:                
Common stock, no par value - Authorized 40,000 shares                
Issued and outstanding - 23,948 shares as of December 31, 2016 and 23,851 shares as of December 31, 2015     101,821       101,046  
Retained earnings     292,521       278,708  
Accumulated other comprehensive loss     (55 )     (67 )
  Total shareholders’ equity     394,287       379,687  
  Total liabilities and shareholders’ equity   $ 1,128,276     $ 1,152,549  
                 
                 


   
MCGRATH RENTCORP  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(UNAUDITED)  
                 
    Year Ended December 31,  
(in thousands)   2016     2015  
Cash Flows from Operating Activities:                
Net income   $ 38,251     $ 40,470  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation and amortization     81,179       84,280  
Provision for doubtful accounts     1,892       2,149  
Share-based compensation     3,091       3,399  
Gain on sale of used rental equipment     (13,739 )     (11,902 )
Foreign currency exchange loss     121       488  
  Amortization of debt issuance cost     51       52  
Change in:                
Accounts receivable     (3,752       3,628  
Income taxes receivable     11,000       (11,000 )
Prepaid expenses and other assets     3,219       12,910  
Accounts payable and accrued liabilities     11,492       (1,520 )
Deferred income     1,211       7,149  
Deferred income taxes     7,745       14,449  
  Net cash provided by operating activities     141,761       144,552  
Cash Flows from Investing Activities:                
Purchases of rental equipment     (79,038 )     (131,037 )
Purchases of property, plant and equipment     (10,548 )     (9,321 )
Proceeds from sale of used rental equipment     29,406       26,214  
 Net cash used in investing activities     (60,180 )     (114,144 )
Cash Flows from Financing Activities:                
Net borrowings (repayments) under bank lines of credit     (35,066 )     18,963  
Principal payments on Series A senior notes     (20,000 )     (20,000 )
Borrowings under Series C senior notes           60,000  
Proceeds from the exercise of stock options     37       2,149  
Excess tax shortfall from exercise of stock awards     (1,066 )     (292 )
Taxes paid related to net share settlement of stock awards     (1,287 )     (1,560 )
Repurchase of common stock           (63,953 )
Payment of dividends     (24,448 )     (25,779 )
 Net cash used in financing activities     (81,830 )     (30,472 )
Effect of foreign currency exchange rate changes on cash       (2      
 Net decrease in cash     (251 )     (64 )
Cash balance, beginning of period     1,103       1,167  
Cash balance, end of period   $ 852     $ 1,103  
Supplemental Disclosure of Cash Flow Information:                
Interest paid, during the period   $ 12,436     $ 10,041  
Net income taxes paid, during the period   $ 15,555     $ 2,498  
Dividends accrued during the period, not yet paid   $ 6,147     $ 6,019  
Rental equipment acquisitions, not yet paid   $ 2,876     $ 7,280  
                 
                 


                                         
MCGRATH RENTCORP                                        
BUSINESS SEGMENT DATA (unaudited)                                        
Three months ended December 31, 2016                                        
(dollar amounts in thousands)   Mobile
Modular
    TRS-
RenTelco
    Adler
Tanks
    Enviroplex     Consolidated  
Revenues                                        
Rental   $ 34,494     $ 20,745     $ 15,113     $     $ 70,352  
Rental related services     12,172       690       5,969             18,831  
  Rental operations     46,666       21,435       21,082             89,183  
Sales     4,261       4,532       367       6,334       15,494  
Other     133       441       32             606  
    Total revenues     51,060       26,408       21,481       6,334       105,283  
                                         
Costs and Expenses                                        
Direct costs of rental operations:                                        
  Depreciation     5,359       8,317       3,931             17,607  
  Rental related services     8,376       675       4,919             13,970  
  Other     7,828       3,820       3,137             14,785  
    Total direct costs of rental operations     21,563       12,812       11,987             46,362  
Costs of sales     3,010       1,832       447       4,309       9,598  
    Total costs of revenues     24,573       14,644       12,434       4,309       55,960  
                                         
Gross Profit (Loss)                                        
Rental     21,307       8,608       8,045             37,960  
Rental related services     3,796       15       1,050             4,861  
  Rental operations     25,103       8,623       9,095             42,821  
Sales     1,251       2,700       (80 )     2,025       5,896  
Other     133       441       32             606  
    Total gross profit     26,487       11,764       9,047       2,025       49,323  
Selling and administrative expenses     13,270       5,452       6,824       1,081       26,627  
Income from operations   $ 13,217     $ 6,312     $ 2,223     $ 944       22,696  
Interest expense                                     (2,721 )
Foreign currency exchange loss                                     (180 )
Provision for income taxes                                     (10,061 )
    Net income                                   $ 9,734  
                                         
Other Information                                        
Average rental equipment 1   $ 739,728     $ 248,841     $ 306,681                  
Average monthly total yield 2     1.55 %     2.78 %     1.64 %                
Average utilization 3     77.5 %     62.3 %     51.3 %                
Average monthly rental rate 4     2.01 %     4.46 %     3.20 %                
                                         
  1. Average rental equipment represents the cost of rental equipment excluding accessory equipment.  For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.
  2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
  3. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
  4. Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.
                                       
                                       
                                       
MCGRATH RENTCORP                                      
BUSINESS SEGMENT DATA (unaudited)                                      
Three months ended December 31, 2015                                      
(dollar amounts in thousands)   Mobile
Modular
    TRS-
RenTelco
    Adler
Tanks
    Enviroplex     Consolidated
                                       
Revenues                                      
Rental   $ 31,744     $ 22,596     $ 16,354     $     $ 70,694  
Rental related services     11,712       784       6,362             18,858  
  Rental operations     43,456       23,380       22,716             89,552  
Sales     6,618       5,964       376       2,246       15,204  
Other     93       405       28             526  
    Total revenues     50,167       29,749       23,120       2,246       105,282  
                                       
Costs and Expenses                                      
Direct costs of rental operations:                                      
  Depreciation     5,028       9,639       4,039             18,706  
  Rental related services     8,283       668       5,166             14,117  
  Other     9,483       3,498       2,486             15,467  
    Total direct costs of rental operations     22,794       13,805       11,691             48,290  
Costs of sales     4,865       3,401       415       1,555       10,236  
    Total costs of revenues     27,659       17,206       12,106       1,555       58,526  
                                       
Gross Profit (Loss)                                      
Rental     17,233       9,459       9,829             36,521  
Rental related services     3,429       116       1,196             4,741  
  Rental operations     20,662       9,575       11,025             41,262  
Sales     1,753       2,563       (39 )     691       4,968  
Other     93       405       28             526  
    Total gross profit     22,508       12,543       11,014       691       46,756  
Selling and administrative expenses     12,060       5,871       6,739       619       25,289  
Income from operations   $ 10,448     $ 6,672     $ 4,275     $ 72       21,467  
Interest expense                                     (2,910
Foreign currency exchange loss                                     (34
Provision for income taxes                                     (7,005 )
    Net income                                   $ 11,518  
                                       
Other Information                                      
Average rental equipment 1   $ 696,482     $ 263,567     $ 307,390                
Average monthly total yield 2     1.52 %     2.86 %     1.77 %              
Average utilization 3     77.5 %     61.2 %     54.0 %              
Average monthly rental rate 4     1.96 %     4.67 %     3.28 %              
                                       
  1. Average rental equipment represents the cost of rental equipment excluding accessory equipment.  For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.
  2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
  3. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
  4. Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.
                                         
                                         
                                         
MCGRATH RENTCORP                                        
BUSINESS SEGMENT DATA (unaudited)                                        
Twelve months ended December 31, 2016                                        
(dollar amounts in thousands)   Mobile
Modular
    TRS-
RenTelco
    Adler
Tanks
    Enviroplex     Consolidated  
                                         
Revenues                                        
Rental   $ 130,496     $ 82,307     $ 58,585     $     $ 271,388  
Rental related services     49,206       2,846       23,807             75,859  
  Rental operations     179,702       85,153       82,392             347,247  
Sales     29,393       21,582       1,314       22,121       74,410  
Other     417       1,882       124             2,423  
    Total revenues     209,512       108,617       83,830       22,121       424,080  
                                         
Costs and Expenses                                        
Direct costs of rental operations: