Mobile Mini, Inc. (NASDAQ GS:MINI) (the “Company” or “Mobile Mini”), the world’s leading supplier of portable storage solutions and a leading provider of specialty containment solutions in the United States, today reported actual and adjusted financial results for the quarter ended December 31, 2015. Total revenues were $134.5 million and rental revenues were $126.5 million, up from $123.2 million and $113.4 million, respectively, for the same period last year.

The Company recorded net income of $9.5 million, or $0.21 per diluted share in the fourth quarter of 2015 as compared to net income of $12.9 million, or $0.28 per diluted share, for the fourth quarter of 2014. On an adjusted basis, fourth quarter net income was $18.4 million, or $0.41 per diluted share, compared to adjusted net income of $17.0 million, or $0.37 per diluted share, for the fourth quarter of 2014. During the fourth quarter, the Company recognized $16.0 million of restructuring expense related primarily to the integration and geographic expansion of ETS into the existing Mobile Mini footprint. The charges largely consist of non-cash fleet and property, plant and equipment abandonment costs. Adjusted EBITDA was $54.9 million and adjusted EBITDA margin was 40.9% for the fourth quarter of 2015.

Rental revenues for the portable storage and specialty containment businesses for the current quarter were $102.2 million and $24.3 million, respectively.

Dividend

The Company’s Board of Directors increased the Company’s first quarter 2016 cash dividend to 20.6 cents per share, a 10% increase as compared to the preceding period. The dividend will be paid on March 23, 2016 to shareholders of record on March 9, 2016.

Fourth Quarter 2015 Highlights

  • Increased portable storage rental revenues 5.2% year-over-year, excluding the wood mobile offices divested in May 2015, or 6.2% when adjusted for unfavorable currency fluctuations.
  • Increased portable storage rental rates by 2.8% year-over-year.
  • Expanded adjusted EBITDA margin to 40.9%, and delivered adjusted EBITDA of $54.9 million, up 12.0% from $49.0 million in the prior-year quarter.
  • Increased average portable storage utilization to 74.0%, compared to 73.3% in the prior-year when excluding wood mobile offices.
  • Delivered outstanding results in the U.K. with a 12.2% year-over-year increase in adjusted EBITDA to $8.8 million in the quarter, with a 40.0% margin.
  • Accomplished a $1.0 billion refinancing of our ABL Credit Agreement, extending the maturity to December 2020 and reducing interest rate borrowing margins.
  • Utilized strong free cash flow to return $14.4 million to our shareholders through $8.4 million in dividends and $6.0 million of repurchased treasury shares.

Full Year 2015 Highlights

  • Executed on our strategy to focus on high-return, low-maintenance assets by divesting the wood mobile office business and successfully integrating the ETS acquisition.
  • Achieved year-over-year portable storage rental rate increases of 4.5%.
  • Grew adjusted diluted earnings per share by 21.1% to $1.32.
  • Generated $73.6 million in free cash flow while reinvesting in the business with $57.9 million in net fleet capital expenditures in targeted areas of high demand.
  • Returned $95.5 million to our shareholders through $33.7 million in dividends and $61.8 million of repurchased treasury shares.

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “I am very pleased with our performance and profitability in the quarter, including our adjusted EBITDA margin of 40.9%, a 110 basis point expansion compared to the prior-year quarter, despite short-term pressure related to the wood mobile office divestiture. We continued to generate momentum in the fourth quarter, with North American core activations up 7% year-over-year, and portable storage year-end units on rent up 4.3% over last year-end. Within our total portable storage business, we drove a 2.8% year-over-year rate increase, which together with an increase in units on rent, resulted in a healthy 6.2% increase in rental revenues, when adjusted for unfavorable currency exchange rates.”

Mr. Olsson continued, “Demand in our construction, industrial and diversified sectors remains strong, and we are well-situated to capitalize on our existing Mobile Mini footprint to expand our downstream specialty containment market in 2016. Throughout the second half of 2015, we have gained traction and are well-positioned to leverage our investments for mid to high single-digit rental revenue growth in 2016.”

Conference Call

Mobile Mini will host a conference call today, Friday, February 5, 2016 at 12 noon ET to review these results. To listen to the call live, dial (201) 493-6739 and ask for the Mobile Mini Conference Call or go to www.mobilemini.com and click on the Investors section. Additionally, a slide presentation that will accompany the call will be posted at www.mobilemini.com on the Investors section and will be available in advance and after the call. Please go to the website 15 minutes early to download and install any necessary audio software. If you are unable to listen live, a replay of the call can be accessed for approximately 14 days after the call at Mobile Mini’s website.

About Mobile Mini, Inc.

Mobile Mini, Inc. is the world’s leading provider of portable storage solutions through its total rental fleet of approximately 205,200 portable storage containers and office units. Through its wholly-owned subsidiary, Evergreen Tank Solutions, Mobile Mini is also a leading provider of specialty containment solutions in the U.S., with a rental fleet of approximately 11,700 units. Mobile Mini’s network includes 133 portable storage locations in the U.S., U.K., and Canada, 19 specialty containment locations and 7 combined locations. Mobile Mini is included on the Russell 2000® and 3000® Indexes and the S&P Small Cap Index.

Forward-Looking Statements

This news release contains forward-looking statements, including, but not limited to, our expectations regarding ongoing momentum in certain sectors, including our construction, industrial, and diversified sectors; our ability to leverage our footprint to expand our downstream specialty containment market in 2016; and our ability to leverage our investments for mid to high single-digit rental revenue growth in 2016, which involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Risks and uncertainties that may affect future results include those that are described from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”). These forward-looking statements represent the judgment of the Company, as of the date of this release, and Mobile Mini disclaims any intent or obligation to update forward-looking statements.

(See accompanying tables)

Reclassifications:

Certain amounts in the consolidated statements of operations for the three months ended March 31, 2015, which are included in the year-to-date period ended December 31, 2015, have been reclassified to conform to the current period presentation. The reclassifications have no effect on total revenues, income from operations, net income or net income per common share.

The Company believes the current presentation better reflects the nature of the underlying financial statement items.

 
Mobile Mini, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(in thousands, except per share data)
 
  Three Months Ended December 31, 2015   Three Months Ended December 31, 2014
Actual   Adjustments   Adjusted (1) Actual   Adjustments   Adjusted (2)
 
Revenues:
Rental $ 126,540 $ — $ 126,540 $ 113,443 $ — $ 113,443
Sales 7,188 — 7,188 7,824 — 7,824
Other   789   (77 )   712   1,948   —   1,948
Total revenues   134,517   (77 )   134,440   123,215   —   123,215
 
Costs and expenses:
Rental, selling and general expenses 78,443 (705 ) 77,738 76,554 (4,994 ) 71,560
Cost of sales 4,772 — 4,772 5,813 — 5,813
Restructuring expenses 16,025 (16,025 ) — 633 (633 ) —
Depreciation and amortization   15,269   —   15,269   11,414   —   11,414
Total costs and expenses   114,509   (16,730 )   97,779   94,414   (5,627 )   88,787
 
Income from operations 20,008 16,653 36,661 28,801 5,627 34,428
 
Other expense:
Interest expense (8,914 ) — (8,914 ) (7,538 ) — (7,538 )
Deferred financing costs write-off   (931 )   931   —   —   —   —
 
Income before tax provision 10,163 17,584 27,747 21,263 5,627 26,890
 
Income tax provision 658 8,652 9,310 8,400 1,465 9,865
                       
Net income $ 9,505 $ 8,932 $ 18,437 $ 12,863 $ 4,162 $ 17,025
 
EBITDA $ 35,277 $ 54,924 $ 40,215 $ 49,035
EBITDA as a percentage of total revenues 26.2 % 40.9 % 32.6 % 39.8 %
 
Earnings per share:
Basic $ 0.21 $ 0.42 $ 0.28 $ 0.37
Diluted 0.21 0.41 0.28 0.37
 
Weighted average number of common and

common share equivalents outstanding:

Basic 44,383 44,383 45,724 45,724
Diluted 44,762 44,762 46,365 46,365
 

(1) Adjusted column for the three months ended December 31, 2015 excludes certain transactions that management believes are not indicative of our business. Adjusted
figures are a non-GAAP presentation. See reconciliations herein, and additional non-GAAP financial information, including additional information regarding these
adjustments, following in this earnings release

.

(2) Adjusted column for the three months ended December 31, 2014 excludes certain transactions that management believes are not indicative of its business as described
below. Adjusted figures are a non-GAAP presentation. See reconciliations herein, and additional information regarding non-GAAP financial information following in this
earnings release. Adjustments in the three months ended December 31, 2014 include:

  • Reduction of $5.0 million to rental, selling and general expenses for acquisition-related expenses, primarily due to the acquisition of Evergreen Tank Solutions
    (“ETS”) in December 2014.
  • Costs of $0.6 million related to the restructuring of our business operations.
 

 
Mobile Mini, Inc.
Condensed Consolidated Statements of Income
(Unaudited, except as indicated)
(in thousands, except per share data)
           
Year Ended December 31, 2015 Year Ended December 31, 2014
Actual Adjustments Adjusted (1) Actual Adjustments Adjusted (2)
(audited)
Revenues:
Rental $ 494,715 $ — $ 494,715 $ 410,362 $ — $ 410,362
Sales 29,953 — 29,953 31,585 — 31,585
Other   6,109   (4,173 )   1,936   3,527   —   3,527
Total revenues   530,777   (4,173 )   526,604   445,474   —   445,474
 
Costs and expenses:
Rental, selling and general expenses 326,252 (7,879 ) 318,373 280,948 (5,070 ) 275,878
Cost of sales 19,671 — 19,671 21,944 — 21,944
Restructuring expenses 20,798 (20,798 ) — 3,542 (3,542 ) —
Asset impairment charge and loss on

divestiture, net

66,128 (66,128 ) — 557 (557 ) —
Depreciation and amortization   60,344   —   60,344   39,334   —   39,334
Total costs and expenses   493,193   (94,805 )   398,388   346,325   (9,169 )   337,156
 
Income from operations 37,584 90,632 128,216 99,149 9,169 108,318
 
Other expense:
Interest income 1 — 1 — — —
Interest expense (35,900 ) — (35,900 ) (28,729 ) — (28,729 )
Deferred financing costs write-off (931 ) 931 — — — —
Foreign currency exchange   (2 )   —   (2 )   (1 )   —   (1 )
 
Income before tax provision 752 91,563 92,315 70,419 9,169 79,588
 
Income tax (benefit) provision (4,822 ) 37,093 32,271 26,033 2,505 28,538
                       
Net income $ 5,574 $ 54,470 $ 60,044 $ 44,386 $ 6,664 $ 51,050
 
EBITDA $ 97,927 $ 200,836 $ 138,482 $ 162,141
EBITDA as a percentage of total revenues 18.4 % 38.1 % 31.1 % 36.4 %
 
Earnings per share:
Basic $ 0.12 $ 1.34 $ 0.96 $ 1.11
Diluted 0.12 1.32 0.95 1.09
 
Weighted average number of common and

common share equivalents outstanding:

Basic 44,953 44,953 46,026 46,026
Diluted 45,460 45,460 46,725 46,725
 

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

 

(2) Adjusted column for the year ended December 31, 2014 excludes certain transactions that management believes are not indicative of our business as described below.
Adjusted figures are a non-GAAP presentation. See reconciliations herein, and additional information regarding non-GAAP financial information following in this earnings
release. Adjustments in the year ended December 31, 2014 include:

  • Reduction of $5.1 million to rental, selling and general expenses for acquisition-related expenses, primarily due to the acquisition of ETS in December 2014.
  • Costs of $3.5 million related to the restructuring of our business operations.
  • Asset impairment loss related to the completion of sale of certain assets written-down to fair value during the second quarter of 2013.
 

 
Mobile Mini, Inc.
Operating Data
(Unaudited)
       
 
2015 2014
As of December 31:
Stand-alone portable storage locations 133 136
Stand-alone specialty containment locations 19 24
Combined portable storage and specialty product locations 7 —
Portable storage rental fleet units 205,200 213,500
Specialty containment rental fleet units 11,700 10,600
 
Average Utilization:
Portable storage - three months ended December 31 74.0 % 72.8 %
Portable storage - twelve months ended December 31 69.4 % 68.6 %
Specialty containment - three months ended December 31* 64.4 % 70.6 %
Specialty containment - twelve months ended December 31* 68.0 % 70.1 %
 
 
*Specialty containment 2014 includes portions of the periods prior to acquisition.
 
 
Mobile Mini, Inc.
Business Segment Information - Adjusted (1)
(Unaudited)
(in thousands)
           
Three Months Ended December 31, 2015 Three Months Ended December 31, 2014
Portable

Storage

Specialty

Containment

Total Portable

Storage

Specialty

Containment

Total
 
Revenues:
Rental $ 102,196 $ 24,344 $ 126,540 $ 108,020 $ 5,423 $ 113,443
Sales 5,495 1,693 7,188 7,661 163 7,824
Other   693   19   712   1,102   846   1,948
Total revenues   108,384   26,056   134,440   116,783   6,432   123,215
 
Costs and expenses:
Rental, selling and general expenses 62,505 15,233 77,738 68,206 3,354 71,560
Cost of sales 3,604 1,168 4,772 5,707 106 5,813
Depreciation and amortization   8,786   6,483   15,269   9,540   1,874   11,414
Total costs and expenses   74,895   22,884   97,779   83,453   5,334   88,787
 
Income from operations $ 33,489 $ 3,172 $ 36,661 $ 33,330 $ 1,098 $ 34,428
 
Adjusted EBITDA $ 45,217 $ 9,707 $ 54,924 $ 46,063 $ 2,972 $ 49,035
Adjusted EBITDA Margin 41.7 % 37.3 % 40.9 % 39.4 % 46.2 % 39.8 %
 
 
 
Year Ended December 31, 2015 Year Ended December 31, 2014
Portable

Storage

Specialty

Containment

Total Portable

Storage

Specialty

Containment

Total
 
Revenues:
Rental $ 395,091 $ 99,624 $ 494,715 $ 404,939 $ 5,423 $ 410,362
Sales 22,387 7,566 29,953 31,422 163 31,585
Other   1,864   72   1,936   2,681   846   3,527
Total revenues   419,342   107,262   526,604   439,042   6,432   445,474
 
Costs and expenses:
Rental, selling and general expenses 255,914 62,459 318,373 272,524 3,354 275,878
Cost of sales 14,580 5,091 19,671 21,838 106 21,944
Depreciation and amortization   34,828   25,516   60,344   37,460   1,874   39,334
Total costs and expenses   305,322   93,066   398,388   331,822   5,334   337,156
 
Income from operations $ 114,020 $ 14,196 $ 128,216 $ 107,220 $ 1,098 $ 108,318
 
Adjusted EBITDA $ 160,686 $ 40,150 $ 200,836 $ 159,169 $ 2,972 $ 162,141
Adjusted EBITDA Margin 38.3 % 37.4 % 38.1 % 36.3 % 46.2 % 36.4 %
 

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

 

 
Mobile Mini, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
   
 
December 31,
2015 2014
(unaudited) (audited)
ASSETS
Cash and cash equivalents $ 1,613 $ 3,739
Receivables, net 80,191 81,031
Inventories 15,596 16,736
Rental fleet, net 951,323 1,087,056
Property, plant and equipment, net 131,687 113,175
Deposits and prepaid expenses 8,651 8,586
Deferred financing costs and other assets 10,562 8,858
Intangibles, net 73,212 78,385
Goodwill   706,387   705,608
Total assets $ 1,979,222 $ 2,103,174
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $ 29,086 $ 22,933
Accrued liabilities 59,024 63,727
Lines of credit, net 667,708 705,518
Obligations under capital leases 38,274 24,918
Senior Notes, net 200,000 200,000
Deferred income taxes   219,601   231,547
Total liabilities   1,213,693   1,248,643
 
Stockholders' equity:
Common stock 491 490
Additional paid-in capital 584,447 569,083
Retained earnings 352,262 380,504
Accumulated other comprehensive loss (44,162 ) (29,870 )
Treasury stock   (127,509 )   (65,676 )
Total stockholders' equity   765,529   854,531
Total liabilities and stockholders' equity $ 1,979,222 $ 2,103,174
 
 
Mobile Mini, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
  Year Ended December 31,
2015   2014
(unaudited) (audited)
Cash Flows from Operating Activities:
Net income $ 5,574 $ 44,386
Adjustments to reconcile net income to net cash

provided by operating activities:

Deferred financing costs write-off 931 —
Asset impairment charge and loss on divestiture, net 66,128 557
Non-cash restructuring expense 12,411 —
Provision for doubtful accounts 3,705 2,777
Amortization of deferred financing costs 3,131 2,829
Amortization of long-term liabilities 101 88
Share-based compensation expense 13,827 15,071
Depreciation and amortization 60,344 39,334
Gain on sale of rental fleet (6,402 ) (5,732 )
Loss on disposal of property, plant and equipment 2,188 348
Deferred income taxes (5,629 ) 25,424
Tax shortfall on equity award transactions (166 ) (15 )
Foreign currency transaction loss 2 1
Changes in certain assets and liabilities, net of

effect of businesses acquired

  (3,331 )   (4,443 )
Net cash provided by operating activities   152,814   120,625
 
Cash Flows from Investing Activities:
Proceeds from wood mobile office divestiture, net 83,280 —
Cash paid for businesses acquired, net of cash acquired (18,525 ) (430,946 )
Additions to rental fleet, excluding acquisitions (74,732 ) (27,279 )
Proceeds from sale of rental fleet 16,865 23,053
Additions to property, plant and equipment, excluding acquisitions (31,163 ) (15,779 )
Proceeds from sale of property, plant and equipment   9,860   4,199
Net cash used in investing activities   (14,415 )   (446,752 )
 
Cash Flows from Financing Activities:
Net (payments) borrowings under lines of credit (37,810 ) 386,204
Deferred financing costs (4,683 ) (719 )
Principal payments on capital lease obligations (4,253 ) (1,956 )
Issuance of common stock 1,703 3,642
Dividend payments (33,700 ) (31,384 )
Purchase of treasury stock   (61,833 )   (26,007 )
Net cash (used in) provided by financing activities (140,576 ) 329,780
 
Effect of exchange rate changes on cash   51   (1,170 )
 
Net change in cash (2,126 ) 2,483
 
Cash and cash equivalents at beginning of period   3,739   1,256
Cash and cash equivalents at end of period $ 1,613 $ 3,739
 
Equipment and other acquired through capital lease obligations $ 17,638 $ 16,508
Capital expenditures accrued or payable 4,210 819
 

Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company also discloses in this press release certain non-GAAP financial information. These financial measures are not recognized measures under GAAP and they are not intended to be and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, and free cash flow are non-GAAP financial measures as defined by SEC rules. This non-GAAP financial information may be determined or calculated differently by other companies. Reconciliations of these non-GAAP measurements to the most directly comparable GAAP financial measurements are furnished earlier in this release, and as follows:

 
Mobile Mini, Inc.
Adjusted Income Reconciliations (1)
For the Three Months Ended December 31, 2015
(Unaudited)
(in thousands, except per share data)
 

Statement of
Income

As Reported

Restructuring

Expense (2)

Acquisition-

Related

Expense

Transition
Services (3)

Unclaimed
Property
Settlement (4)

Deferred
financing
costs write-
off (5)

U.K. Enacted
Tax Rate
Change (6)

Statement of
Income

Adjusted

 
Revenues:
Rental $ 126,540 $ — $ — $ — $ — $ — $ — $ 126,540
Sales 7,188 — — — — — — 7,188
Other   789   —   —   (77 )   —   —   —   712
Total revenues   134,517   —   —   (77 )   —   —   —   134,440
Costs and expenses:
Rental, selling and general

expenses

78,443 — (257 ) (410 ) (38 ) — — 77,738
Cost of sales 4,772 — — — — — — 4,772
Restructuring expenses 16,025 (16,025 ) — — — — — —
Depreciation and amortization   15,269   —   —   —   —   —   —   15,269
Total costs and expenses   114,509   (16,025 )   (257 )   (410 )   (38 )   —   —   97,779
Income from operations 20,008 16,025 257 333 38 36,661
Other expense:
Interest expense (8,914 ) — — — — — — (8,914 )
Deferred financing costs

write-off

  (931 )   —   —   —   —   931   —   —
Income before income tax provision 10,163 16,025 257 333 38 931 — 27,747
Income tax provision   658   6,166   99   128   15   358   1,886   9,310
Net income $ 9,505 $ 9,858 $ 158 $ 205 $ 23 $ 573 $ (1,886 ) $ 18,437
 
Diluted shares outstanding 44,762 44,762
 
Diluted earnings per share $ 0.21 $ 0.41
 

(1) Adjustments exclude certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation.

(2) Costs relating to the restructuring of our business, primarily the integration and geographic expansion of ETS into the existing Mobile Mini infrastructure.

(3) The $0.1 million of other revenue and $0.4 million of rental, selling and general expenses relate to the provision of short-term transition services,
including housing wood mobile office units on our leased properties.

(4) Expense associated with the settlement of an unclaimed property liability with the state of Delaware.

(5) Write-off of existing deferred financing costs related to our prior ABL Credit Agreement upon entering into our Amended and Restated ABL Credit
Agreement in December 2015.

(6) Adjustments to our existing net deferred income tax liabilities in the U.K. upon the fourth quarter 2015 enactment of a future statutory rate reduction.

 

 
Mobile Mini, Inc.
Adjusted Income Reconciliations (1)
For the Year Ended December 31, 2015
(Unaudited)
(in thousands, except per share data)
 

Statement of
Income
As Reported

Restructuring

Expense (2)

Acquisition-

Related

Expense

Loss on
Impairment
and
Divestiture
and
Transition
Services (3)

Sales Tax
Refund and
Unclaimed
Property
Settlement (4)

Deferred
financing
costs write-
off (5)

U.K. Enacted
Tax Rate
Change (6)

Statement of
Income

Adjusted

 
Revenues:
Rental $ 494,715 $ — $ — $ — $ — $ — $ — $ 494,715
Sales 29,953 — — — — — — 29,953
Other   6,109   —   —   (2,997 )   (1,176 )   —   —   1,936
Total revenues   530,777   —   —   (2,997 )   (1,176 )   —   —   526,604
Costs and expenses:
Rental, selling and general

expenses

326,252 — (2,650 ) (4,357 ) (872 ) — — 318,373
Cost of sales 19,671 — — — — — — 19,671
Restructuring expenses 20,798 (20,798 ) — — — — — —
Asset impairment charge and

loss on divestiture, net

66,128 — — (66,128 ) — — — —
Depreciation and amortization   60,344   —   —   —   —   —   —   60,344
Total costs and expenses   493,193   (20,798 )   (2,650 )   (70,485 )   (872 )           398,388
Income from operations 37,584 20,798 2,650 67,488 (304 ) 128,216
Other expense:
Interest income 1 — — — — — — 1
Interest expense (35,900 ) — — — — — — (35,900 )
Deferred financing costs

write-off

(931 ) — — — — 931 — —
Foreign currency exchange   (2 )   —   —   —   —   —   —   (2 )
Income before income tax provision 752 20,798 2,650 67,488 (304 ) 931 — 92,315
Income tax provision   (4,822 )   7,967   1,016   25,983   (117 )   358   1,886   32,271
Net income $ 5,574 $ 12,831 $ 1,634 $ 41,505 $ (187 ) $ 573 $ (1,886 ) $ 60,044
 
Diluted shares outstanding 45,460 45,460
 
Diluted earnings per share $ 0.12 $ 1.32
 

(1) Adjustments exclude certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation.

(2) Costs relating to the restructuring of our business, primarily the integration and geographic expansion of ETS into the existing Mobile Mini infrastructure.

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

(4) Revenue associated with a sales tax refund and expense associated with the settlement of an unclaimed property liability with the state of Delaware.

(5) Write-off of existing deferred financing costs related to our prior ABL Credit Agreement upon entering into our Amended and Restated ABL Credit
Agreement in December 2015.

(6) Adjustments to our existing net deferred income tax liabilities in the U.K. upon the fourth quarter 2015 enactment of a future statutory rate reduction.

 

 
Mobile Mini, Inc.
Adjusted EBITDA GAAP Reconciliations
(Unaudited)
(in thousands)
       
Three Months Ended

December 31,

Year Ended

December 31,

2015 2014 2015 2014
Net income $ 9,505 $ 12,863 $ 5,574 $ 44,386
Interest expense 8,914 7,538 35,900 28,729
Income tax provision (benefit) 658 8,400 (4,822 ) 26,033
Depreciation and amortization 15,269 11,414 60,344 39,334
Deferred financing costs write-off   931   —   931   —
EBITDA 35,277 40,215 97,927 138,482
 
Share-based compensation expense 2,994 3,193 12,277 14,490
Restructuring expenses 16,025 633 20,798 3,542
Acquisition-related expenses 257 4,994 2,650 5,070
Impairment and divestiture-related revenues

and expenses, net

333 — 67,488 557
Sales tax refund and unclaimed

property settlement

  38   —   (304 )   —
Adjusted EBITDA $ 54,924 $ 49,035 $ 200,836 $ 162,141
 
 
Three Months Ended

December 31,

Year Ended

December 31,

2015 2014 2015 2014
Net cash provided by operating activities $ 39,093 $ 32,867 $ 152,814 $ 120,625
Interest paid 11,950 10,065 32,372 24,559
Income and franchise taxes paid 1,661 158 4,935 1,103
Share-based compensation expense,

including restructuring expense

(2,994 ) (3,498 ) (13,827 ) (15,071 )
Asset impairment charge and

loss on divestiture, net

— — (66,128 ) (557 )
Non-cash restructuring expense (12,411 ) — (12,411 ) —
Gain on sale of rental fleet 1,206 1,236 6,402 5,732
Loss on disposal of property, plant and equipment (153 ) (529 ) (2,188 ) (348 )
Changes in other assets and liabilities, net of

effect of businesses acquired

  (3,075 )   (84 )   (4,042 )   2,439
EBITDA $ 35,277 $ 40,215 $ 97,927 $ 138,482
 
 
Mobile Mini, Inc.
Free Cash Flow GAAP Reconciliation
(Unaudited)
(in thousands)
       
Three Months Ended

December 31,

Twelve Months Ended

December 31,

2015 2014 2015 2014
Net cash provided by operating activities $ 39,093 $ 32,867 $ 152,814 $ 120,625
 
Additions to rental fleet, excluding acquisitions (21,192 ) (10,969 ) (74,732 ) (27,279 )
Proceeds from sale of rental fleet 3,565 5,240 16,865 23,053
Additions to property, plant and equipment,
excluding acquisitions (13,245 ) (4,102 ) (31,163 ) (15,779 )
Proceeds from sale of property, plant and equipment   7,413   825   9,860   4,199
Net capital expenditures, excluding acquisitions (23,459 ) (9,006 ) (79,170 ) (15,806 )
               
Free cash flow $ 15,634 $ 23,861 $ 73,644 $ 104,819
 

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

EBITDA and adjusted EBITDA. EBITDA is defined as net income before discontinued operations, net of tax (if applicable), interest expense, income taxes, depreciation and amortization, and debt restructuring or extinguishment expense (if applicable), including any write-off of deferred financing costs. Adjusted EBITDA further excludes certain non-cash expenses, including share-based compensation, as well as transactions that management believes are not indicative of our business. Because EBITDA and adjusted EBITDA, as defined, exclude some but not all items that affect our cash flow from operating activities, they may not be comparable to similarly titled performance measures presented by other companies.

We present EBITDA and adjusted EBITDA because we believe they provide useful information regarding our ability to meet our future debt payment requirements, capital expenditures and working capital requirements and that they provide an overall evaluation of our financial condition. EBITDA and adjusted EBITDA have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows from operations, or other consolidated income or cash flow data prepared in accordance with GAAP.

EBITDA and adjusted EBITDA margins are calculated as EBITDA and adjusted EBITDA divided by total revenues expressed as a percentage. The GAAP financial measure that is most directly comparable to EBITDA margin is operating margin, which represents operating income divided by revenues.

Free Cash Flow. Free cash flow is defined as net cash provided by operating activities, minus or plus, net cash used in or provided by investing activities, excluding acquisitions and certain transactions. Free cash flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, the most directly comparable financial measure prepared in accordance with GAAP. We present free cash flow because we believe it provides useful information regarding our liquidity and ability to meet our short-term obligations. In particular, free cash flow indicates the amount of cash available after capital expenditures for, among other things, investments in our existing business, debt service obligations, payment of authorized quarterly dividends, repurchase of our common stock and strategic small acquisitions.