For the three months ended June 30, 2022, on a consolidated basis:
• Gross profit increased $12.0 million, or 18%, to $77.8 million in
2022. Mobile Modular's gross profit increased $8.9 million, or 22%,
primarily due to higher gross profit on sales, rental, and rental related
services revenues. TRS-RenTelco's gross profit increased $1.5 million, or
10%, primarily due to higher gross profit on rental and sales
revenues. Adler Tanks' gross profit increased $2.9 million, or 36%,
primarily due to higher gross profit on rental and rental related services
revenues. Enviroplex's gross profit decreased $1.4 million, primarily due
to $3.5 million lower sales revenues in 2022 and lower gross margins of
• Selling and administrative expenses increased $4.5 million, or 13%, to
$40.8 million, primarily due to increased headcount and employees'
salaries and benefit costs totaling $3.1 million, primarily due to the
addition of Design Space employees, $0.6 million higher travel, meals and
meetings and $0.7 million higher legal and accounting costs.
• Interest expense increased $0.7 million, or 33%, to $3.0 million due to
20% higher average debt levels of the Company and 11% higher net average
interest rates of 2.79% in 2022 compared to 2.52% in 2021.
• Pre-tax income contribution by Mobile Modular, TRS-RenTelco and Adler
Tanks was 65%, 26% and 10%, respectively, compared to 61%, 29% and 5%,
respectively, for the comparable 2021 period. These results are discussed
• The provision for income taxes resulted in an effective tax rate of 22.8%
and 24.6% for the quarters ended June 30, 2022 and 2021, respectively. The
• Adjusted EBITDA increased $7.8 million, or 13%, to $66.3 million in 2022.
The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.
Mobile Modular - Three Months Ended 6/30/22 compared to Three Months Ended 6/30/21 (Unaudited)
Total direct costs of rental operations 46,938 34,779
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. Period end utilization is calculated by dividing the cost 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.
• Gross Profit on Rental Revenues - Rental revenues increased $11.7 million,
or 22%, due to 16% higher average rental equipment on rent and 5% higher
average monthly rental rates in 2022. As a percentage of rental revenues,
depreciation was 12% in 2022 and 13% in 2021, and other direct costs were
37% in 2022 and 30% in 2021, which resulted in gross margin percentages of
51% in 2022 compared to 57% in 2021. The higher rental revenues and lower
rental margins, resulted in gross profit on rental revenues increasing
$2.9 million, or 9%, to $33.1 million in 2022.
• Gross Profit on Rental Related Services - Rental related services revenues
increased $5.0 million, or 31%, compared to 2021. The increase in rental
related services revenues was primarily attributable to higher
amortization of modular building delivery and return delivery and
dismantle revenues, higher site related revenues and revenues derived from
resulted in rental related services gross profit increasing $1.7 million,
• Gross Profit on Sales - Sales revenues increased $10.0 million, or 68%,
compared to 2021, due to higher new and used equipment sales. The higher
gross margin percentage of 41% in 2022 compared to 39% in 2021, and higher
sales revenue resulted in gross profit on sales increasing $4.3 million,
routinely as a normal part of Mobile Modular's rental business; however,
these sales and related gross margins can fluctuate from quarter to
quarter and year to year depending on customer requirements, equipment
The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.
Total direct costs of rental operations 18,440 17,379
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. Period end utilization is calculated by dividing the cost of rental equipment
on rent by the total cost of rental equipment, excluding accessory equipment.
Average utilization for the period is calculated using the average month end
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.
• Gross Profit on Rental Revenues - Rental revenues increased $1.9 million,
or 7%, depreciation expense increased $0.4 million, or 3%, and other
direct costs increased $0.7 million or 15%, resulting in a 6% increase in
which resulted in a gross margin percentage of 40% in 2022 and 2021. The
rental revenues increase was due to 4% higher average rental equipment on
• Gross Profit on Sales - Sales revenues increased $1.6 million, or 35%, to
$6.4 million in 2022. Gross profit on sales increased 23%, to
$3.6 million, with gross margin percentage of 57% in 2022, compared to 62%
in 2021. Sales occur as a normal part of TRS-RenTelco's rental business;
however, these sales and related gross margins can fluctuate from quarter
to quarter depending on customer requirements and related mix of equipment
sold, equipment availability and funding.
For the three months ended June 30, 2022, selling and administrative expenses increased $0.5 million, or 9%, to $6.6 million.
The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.
Total direct costs of rental operations 12,364 11,555
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. Period end utilization is calculated by dividing the cost 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.
• Gross Profit on Rental Revenues - Rental revenues increased $2.5 million,
or 18%, primarily due to 15% higher average equipment on rent and 2%
higher average rental rates in 2022 compared to 2021. As a percentage of
• Gross Profit on Rental Related Services - Rental related services revenues
increased $1.0 million, or 17%, to $6.8 million compared to 2021. The
higher rental related services revenues with higher gross margin
percentage of 25% in 2022 compared to 18% in 2021, resulted in rental
related services gross profit increasing 63% to $1.7 million in 2022.
For the six months ended June 30, 2022, on a consolidated basis:
• Gross profit increased $21.4 million, or 17%, to $144.3 million in
2022. Mobile Modular's gross profit increased $17.1 million, or 23%,
primarily due to higher gross profit on rental, sales, and rental related
services revenues. TRS-RenTelco's gross profit increased $1.5 million, or
5%, primarily due to higher gross profit on rental and sales
revenues. Adler Tanks' gross profit increased $4.3 million, or 29%,
primarily due to higher gross profit on rental and rental related services
revenues. Enviroplex's gross profit decreased $1.5 million, primarily due
to $3.8 million lower sales revenues of $5.6 million in 2022.
• Selling and administrative expenses increased 15% to $79.9 million from
$69.4 million for the same period in 2021, primarily due to increased
employee salaries and employee benefit costs of $7.4 million, primarily
due to the addition of Design Space and Kitchens To Go employees, and $1.2
million higher amortization of intangible assets from the Design Space and
• Interest expense increased $1.8 million to $5.8 million, due to 48% higher
average debt levels of the Company, partly offset by 3% lower net average
interest rates of 2.74% in 2022 compared to 2.81% in 2021.
• Pre-tax income contribution by Mobile Modular, TRS-RenTelco and Adler
Tanks was 66%, 28% and 8%, respectively, compared to 64%, 32% and 3%,
respectively, for the comparable 2021 period. These results are discussed
• The provision for income taxes resulted in an effective tax rate of 23.1%
for the six months ended June 30, 2022 and 2021.
• Adjusted EBITDA increased $15.4 million, or 14%, to $123.0 million in 2022.
The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.
Total direct costs of rental operations 88,113 63,545
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. Period end utilization is calculated by dividing the cost 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.
• Gross Profit on Rental Revenues - Rental revenues increased $26.6 million,
or 27%, primarily due to 19% higher average rental equipment on rent and
10% higher average rental rates in 2022. The increase in rental revenue
and average equipment on rent was due in part to the Design Space and
Kitchens To Go acquisitions. As a percentage of rental revenues,
depreciation was 12% and 13% in 2022 and 2021, respectively and other
direct costs were 35% in 2022 and 29% in 2021, which resulted in gross
margin percentages of 53% in 2022 and 58% in 2021. The higher rental
revenues, partly offset by lower rental margins resulted in gross profit
on rental revenues increasing $8.4 million, or 15%, to $66.7 million in
• Gross Profit on Rental Related Services - Rental related services revenues
increased $9.3 million, or 31%, compared to 2021. The increase in rental
related services revenues was primarily attributable to higher
amortization of modular building delivery and return delivery and
dismantle revenues, higher site related revenues and revenues derived from
resulted in rental related services gross profit increasing $2.9 million,
• Gross Profit on Sales - Sales revenues increased $12.8 million, or 57%,
compared to 2021, due to higher new and used equipment sales. The higher
gross margin percentage of 40% in 2022 compared to 38% in 2021, primarily
occur routinely as a normal part of Mobile Modular's rental business;
however, these sales and related gross margins can fluctuate from quarter
to quarter and year to year depending on customer requirements, equipment
The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.
Total direct costs of rental operations 35,741 33,928
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. Period end utilization is calculated by dividing the cost of rental equipment
on rent by the total cost of rental equipment, excluding accessory equipment.
Average utilization for the period is calculated using the average month end
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.
• Gross Profit on Rental Revenues - Rental revenues increased $3.1 million,
or 6%, and depreciation expense increased $1.1 million, or 5%, resulting
in a 5% increase in gross profit on rental revenues to $23.7 million. As a
percentage of rental revenues, depreciation was 42% in 2022 and 2021, and
other direct costs were 17% in 2022 and 2021, which resulted in a gross
margin percentage of 41% in 2022 and 2021. The rental revenues increase
was due to 4% higher average rental equipment on rent and 2% higher
average monthly rental rates, partly offset by 5% lower average
utilization of rental equipment in 2022 as compared to 2021. The higher
rental rates were primarily related to business mix, with more general
purpose equipment on rent compared to the prior year.
• Gross Profit on Sales - Sales revenues increased $0.4 million, or 4%, to
$10.3 million in 2022. Gross profit on sales increased $0.3 million, or
4%, to $6.1 million with gross margin percentage of 59% in 2022, unchanged
from 2021. Sales occur as a normal part of TRS-RenTelco's rental business;
however, these sales and related gross margins can fluctuate from quarter
to quarter depending on customer requirements and related mix of equipment
sold, equipment availability and funding.
For the six months ended June 30, 2022, selling and administrative expenses increased $0.8 million, or 7%, to $13.2 million, primarily due to increased employee salaries and benefit costs.
The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.
Adler Tanks - Six Months Ended 6/30/22 compared to Six Months Ended 6/30/21 (Unaudited)
Total direct costs of rental operations 23,728 21,806
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. Period end utilization is calculated by dividing the cost 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.
Adler Tanks' gross profit for the six months ended June 30, 2022 increased $4.3 million, or 29%, to $19.3 million. For the six months ended June 30, 2022 compared to the same period in 2021:
• Gross Profit on Rental Revenues - Rental revenues increased $4.5 million,
or 18%, due to 17% higher average rental equipment on rent and 1% higher
average monthly rental rates in 2022 compared to 2021. Stronger business
costs were 21% and 19% in 2022 and 2021, respectively, which resulted in
gross margin percentages of 53% and 49% in 2022 and 2021,
respectively. The higher rental revenues and rental margins resulted in a
in 2022, compared to 19% in 2021 resulted in rental related services gross
profit increasing 27% to $2.6 million in 2022.
Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities
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
• Permit the Consolidated Fixed Charge Coverage Ratio (as defined in the
Credit Facility and the Note Purchase Agreement (as defined and more fully
described under the heading "Liquidity and Capital Resources" in this
MD&A)) of Adjusted EBITDA (as defined in the Credit Facility and the Note
Purchase Agreement) to fixed charges as of the end of any fiscal quarter
to be less than 2.50 to 1. At June 30, 2022, the actual ratio was 4.15 to
• Permit the Consolidated Leverage Ratio of funded debt (as defined in the
Credit Facility and the Note Purchase Agreement) to Adjusted EBITDA at any
Unsecured Revolving Lines of Credit
• Permit the Consolidated Fixed Charge Coverage Ratio as of the end of any
fiscal quarter to be less than 2.50 to 1. At June 30, 2022, the actual
• Permit the Consolidated Leverage Ratio at any time during any period of
four consecutive fiscal quarters to be greater than 2.75 to 1. At June 30,
2022, the actual ratio was 1.69 to 1.
Note Purchase and Private Shelf Agreement
The full net proceeds of each Shelf Note will be used in the manner described in the applicable Request for Purchase with respect to such Shelf Note.
On June 16, 2021, the Company issued and sold to the purchasers $60 million aggregate principal amount of 2.35% Series E Notes (the "Series E Notes") pursuant to the terms of the Amended and Restated Note Purchase and Private Shelf Agreement, dated March 31, 2020 (the "Note Purchase Agreement"), among the Company, PGIM, Inc. and the noteholders party thereto.
• Permit the Consolidated Leverage Ratio of funded debt to EBITDA at any
We believe that our contractual obligations and commitments have not changed materially from those included in our 2021 Annual Report.
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