McGrath Announces Results for Fourth Quarter 2024 and Announces 34th Annual Dividend Increase

2/19/25 4:01:00 PM ET

Diversified Commercial Services

Consumer Discretionary

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McGrath RentCorp ("McGrath" or the "Company") (NASDAQ:MGRC), a leading business-to-business rental company in North America, today announced total revenues from continuing operations for the quarter ended December 31, 2024 of $243.7 million, an increase of 10% compared to the fourth quarter of 2023. The Company reported net income from continuing operations of $38.9 million, or $1.58 per diluted share, for the fourth quarter of 2024, compared to net income from continuing operations of $32.0 million, or $1.30 per diluted share, for the fourth quarter of 2023.

Total revenues from continuing operations for the full year ended December 31, 2024 increased to $910.9 million, an increase of 10%, from $831.8 million in 2023, with adjusted EBITDA increasing $33.4 million, or 10%, to $351.7 million. Net income from continuing operations for the year ended December 31, 2024 was $231.7 million, or $9.43 per diluted share, compared to $111.9 million, or $4.56 per diluted share, in 2023. Excluding the $180.0 million merger termination payment received from WillScot Mobile Mini and $63.2 million in transaction costs incurred by McGrath during the year, net of provision for income taxes, the Company reported net income from continuing operations of $145.7 million, or $5.93 per diluted share.

The Company also announced that the board of directors declared a cash dividend of $0.485 per share for the upcoming quarter ending March 31, 2025, a quarterly increase of $0.01, or 2%, over the prior year period. The cash dividend will be payable on April 30, 2025 to all shareholders of record on April 16, 2025. This marks 34 consecutive years the Company has increased its annual dividend.

FOURTH QUARTER 2024 YEAR-OVER-YEAR COMPANY HIGHLIGHTS (FROM CONTINUING OPERATIONS):

Rental revenues increased 1% to $124.2 million.
Sales revenues increased 37% to $80.3 million.
Total revenues increased 10% to $243.7 million.
Adjusted EBITDA¹ increased 5% to $92.0 million.
Dividend rate of $0.475 per share for the fourth quarter 2024. On an annualized basis, this dividend represents a 1.6% yield on the February 18, 2025 close price of $122.22 per share.

Joe Hanna, President and CEO of McGrath, made the following comments:

"We were pleased with our fourth quarter results. The 10% increase in companywide revenues and 5% increase in Adjusted EBITDA were driven by growth at Mobile Modular.

Our modular business had a good quarter, with 8% rental revenue growth. Rental revenues grew across both commercial and education customer bases. We maintained our focus on pricing optimization, rental fleet utilization, and value-added services for our customers. Growth initiatives for Mobile Modular Plus, Site Related Services and new modular equipment sales all continued to show progress.

Portable Storage weak demand conditions continued, resulting in 15% lower rental revenues for the quarter, compared to a year ago. The weaker demand was broad-based across regions and was primarily a result of lower commercial construction project activity.

TRS-RenTelco experienced continued demand challenges, resulting in 9% lower rental revenues for the quarter, compared to a year ago. During the quarter we maintained discipline with respect to new equipment capital spending and made progress with reducing the fleet size to better align with demand conditions.

I appreciate the strong execution from the McGrath team to deliver solid results for the year despite the demand headwinds at Portable Storage and TRS-RenTelco. I am encouraged by our start to 2025 and confident that our teams are very focused on building on last year's successes."

DIVISION HIGHLIGHTS:

All comparisons presented below are for the quarter ended December 31, 2024 to the quarter ended December 31, 2023 unless otherwise indicated.

MOBILE MODULAR

For the fourth quarter of 2024, the Company's Mobile Modular division reported Adjusted EBITDA of $61.0 million, an increase of $6.9 million, or 13%, when compared to the same quarter in 2023.

Rental revenues increased 8% to $82.1 million, depreciation expense increased 7% to $10.4 million, and other direct costs increased 2% to $18.5 million, which resulted in an increase in gross profit on rental revenues of 11% to $53.2 million.
Rental related services revenues increased 5% to $32.1 million, primarily attributable to higher delivery and pick-up activities and higher site related services, with associated gross profit increasing 5% to $11.6 million.
Sales revenues increased 32% to $56.0 million, primarily from higher new equipment sales. Gross margin on sales was 26% in 2024 compared to 32% in 2023, resulting in a 5% increase in gross profit on sales revenues to $14.3 million.
Selling and administrative expenses decreased $1.4 million to $35.8 million, when compared to the prior year.

PORTABLE STORAGE

For the fourth quarter of 2024, the Company's Portable Storage division reported Adjusted EBITDA of $9.9 million, a decrease of $2.8 million, or 22%, when compared to the same quarter in 2023.

Rental revenues decreased 15% to $16.7 million, depreciation expense increased 7% to $1.0 million, and other direct costs decreased 12% to $1.5 million, which resulted in a decrease in gross profit on rental revenues of 17% to $14.2 million.
Rental related services revenues decreased 24% to $3.9 million, primarily attributable to lower delivery and return delivery activities.
Sales revenues increased $0.1 million to $1.8 million, primarily from higher used equipment sales. Gross margin on sales was 36% compared to 38% in 2023, resulting in a 1% increase in gross profit on sales revenues to $0.6 million.
Selling and administrative expenses decreased $1.1 million to $7.1 million, when compared to the prior year.

TRS-RENTELCO

For the fourth quarter of 2024, the Company's TRS-RenTelco division reported Adjusted EBITDA of $19.1 million, a decrease of 8%, when compared to the same quarter in 2023.

Rental revenues decreased 9% to $25.4 million, depreciation expense decreased 12%, and other direct costs increased 2%, resulting in a 10% decrease in gross profit on rental revenues to $10.2 million. The rental revenue decrease was primarily due to continued weakness in end markets, resulting in lower average rental equipment on rent compared to the prior year.
Sales revenues increased 26% to $7.3 million and gross profit on sales revenues increased 32% to $4.2 million.
Selling and administrative expenses decreased 11%, to $6.6 million, when compared to the prior year.

FINANCIAL OUTLOOK:

For the full-year 2025, the Company expects:

		2025 Outlook	2024 Actual
•	Total revenue:	$920 to $970 million	$911 million
•	Adjusted EBITDA^{1, 2}:	$345 to $360 million	$352 million
•	Gross rental equipment capital expenditures:	$120 to $130 million	$191 million

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, transaction costs and non-operating transactions. A reconciliation of actual net income to Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating activities can be found at the end of this release.
2.		Information reconciling forward-looking Adjusted EBITDA to the comparable GAAP financial measures is unavailable to the Company without unreasonable effort because certain items required for such reconciliations are outside of the Company's control and/or cannot be reasonably predicted, such as the provision for income taxes. Therefore, no reconciliation to the most comparable GAAP measures is provided. The Company provides Adjusted EBITDA guidance because it believes that Adjusted EBITDA, when viewed with the Company's results under GAAP, provides useful information for the reasons noted in the reconciliation of actual Adjusted EBITDA to the most directly comparable GAAP measures at the end of this release.

ABOUT MCGRATH:

McGrath RentCorp (NASDAQ:MGRC) is a leading business-to-business rental company in North America with a strong record of profitable business growth. Founded in 1979, McGrath's operations are centered on modular solutions through its Mobile Modular and Mobile Modular Portable Storage businesses. In addition, its TRS-RenTelco business offers electronic test equipment rental solutions. The Company's rental product offerings and services are part of the circular supply economy, helping customers work more efficiently, and sustainably manage their environmental footprint. With over 40 years of experience, McGrath's success is driven by a focus on exceptional customer experiences. This focus has underpinned the Company's long-term financial success and supported over 30 consecutive years of annual dividend increases to shareholders, a rare distinction among publicly listed companies.

McGrath is headquartered in Livermore, California. Additional information about McGrath and its businesses is available at mgrc.com and investors.mgrc.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 January 30, 2025, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on February 19, 2025 to discuss the fourth quarter 2024 results. To participate in the teleconference, dial 1-800-445-7795 (in the U.S.), or 1-785-424-1699 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company's website at https://investors.mgrc.com/. A replay will be available for 7 days following the call by dialing 1-800-723-7372 (in the U.S.), or 1-402-220-2666 (outside the U.S.). 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 https://investors.mgrc.com/events-and-presentations.


MCGRATH RENTCORP CONDENSED CONSOLIDATED STATEMENTS OF INCOME (AUDITED)
	Three Months Ended December 31,					Twelve Months Ended December 31,
(in thousands, except per share amounts)	2024		2023			2024			2023
Revenues
Rental	$	124,220	$	123,563		$	489,929		$	474,336
Rental related services		36,858		36,679			148,498			138,160
Rental operations		161,078		160,242			638,427			612,496
Sales		80,298		58,589			262,290			207,165
Other		2,370		2,757			10,225			12,181
Total revenues		243,746		221,588			910,942			831,842
Costs and Expenses
Direct costs of rental operations:
Depreciation of rental equipment		21,755		22,413			88,267			88,912
Rental related services		25,204		25,003			103,419			96,628
Other		24,931		24,754			109,116			114,942
Total direct costs of rental operations		71,890		72,170			300,802			300,482
Costs of sales		57,099		39,296			174,725			137,727
Total costs of revenues		128,989		111,466			475,527			438,209
Gross profit		114,757		110,122			435,415			393,633
Expenses:
Selling and administrative expenses		51,669		54,506			200,432			207,539
Other income, net		—		(59	)		(9,281	)		(3,618	)
Income from operations		63,088		55,675			244,264			189,712
Interest expense		8,858		12,126			47,241			40,560
Foreign currency exchange loss (gain)		270		144			215			(310	)
Gain on merger termination from WillScot Mobile Mini		—		—			(180,000	)		—
WillScot Mobile Mini transaction costs		2,002		—			63,159			—
Income from continuing operations before provision for income taxes		51,958		43,693			313,649			149,462
Provision for income taxes from continuing operations		13,009		11,676			81,922			37,610
Income from continuing operations		38,949		32,017			231,727			111,852

Discontinued operations:
Income from discontinued operations before provision for income taxes		—		—			—			1,709
Provision for income taxes from discontinued operations		—		—			—			453
Gain on sale of discontinued operations, net of tax		—		—			—			61,513
Income from discontinued operations		—		—			—			62,769

Net income	$	38,949	$	32,017		$	231,727		$	174,621

Earnings per share from continuing operations:
Basic	$	1.59	$	1.31		$	9.44		$	4.57
Diluted	$	1.58	$	1.30		$	9.43		$	4.56
Earnings per share from discontinued operations:
Basic	$	—	$	—		$	—		$	2.57
Diluted	$	—	$	—		$	—		$	2.56
Earnings per share:
Basic	$	1.59	$	1.31		$	9.44		$	7.14
Diluted	$	1.58	$	1.30		$	9.43		$	7.12
Shares used in per share calculation:
Basic		24,551		24,492			24,541			24,469
Diluted		24,587		24,535			24,570			24,529
Cash dividends declared per share	$	0.475	$	0.465		$	1.90		$	1.86


MCGRATH RENTCORP CONDENSED CONSOLIDATED BALANCE SHEETS (AUDITED)
	December 31,
(in thousands)	2024			2023
Assets
Cash	$	807		$	877
Accounts receivable, net of allowance for credit losses of $2,866 at December 31, 2024 and $2,801 at December 31, 2023		219,342			227,368
Rental equipment, at cost:
Relocatable modular buildings		1,414,367			1,291,093
Portable storage containers		240,846			236,123
Electronic test equipment		343,982			377,587
		1,999,195			1,904,803
Less: accumulated depreciation		(611,536	)		(575,480	)
Rental equipment, net		1,387,659			1,329,323
Property, plant and equipment, net		197,439			169,114
Inventories		14,304			15,425
Prepaid expenses and other assets		80,477			87,364
Intangible assets, net		54,332			64,588
Goodwill		323,224			323,224
Total assets	$	2,277,584		$	2,217,283
Liabilities and Shareholders' Equity
Liabilities:
Notes payable	$	590,208		$	762,975
Accounts payable		60,082			58,760
Accrued liabilities		113,961			108,763
Deferred income		109,836			111,428
Deferred income taxes, net		280,129			241,555
Total liabilities		1,154,216			1,283,481
Shareholders' equity:
Common stock, no par value - Authorized 40,000 shares
Issued and outstanding - 24,551 shares as of December 31, 2024 and 24,496 shares as of December 31, 2023		116,253			111,122
Retained earnings		1,007,115			822,796
Accumulated other comprehensive loss		—			(116	)
Total shareholders' equity		1,123,368			933,802
Total liabilities and shareholders' equity	$	2,277,584		$	2,217,283


MCGRATH RENTCORP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (AUDITED)
	Twelve Months Ended December 31,
(in thousands)	2024			2023
Cash Flows from Operating Activities:
Net income	$	231,727		$	174,621
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		107,455			109,375
Deferred income taxes (benefits)		38,574			(16,952	)
Provision for credit losses		1,890			2,633
Share-based compensation		9,502			8,275
Gain on sale of property, plant and equipment		(9,281	)		(3,618	)
Gain on sale of discontinued operations		—			(61,513	)
Gain on sale of used rental equipment		(35,085	)		(31,642	)
Foreign currency exchange loss (gain)		215			(310	)
Amortization of debt issuance costs		66			8
Change in:
Accounts receivable		6,136			(37,776	)
Inventories		1,121			(779	)
Prepaid expenses and other assets		6,887			(28,547	)
Accounts payable		11,836			(49,761	)
Accrued liabilities		4,924			17,235
Deferred income		(1,592	)		14,094
Net cash provided by operating activities		374,375			95,343
Cash Flows from Investing Activities:
Proceeds from sale of discontinued operations		—			268,012
Purchases of rental equipment		(191,231	)		(229,679	)
Purchases of property, plant and equipment		(40,228	)		(43,989	)
Cash paid for acquisition of businesses		—			(458,315	)
Cash paid for acquisition of business assets		—			(3,767	)
Proceeds from sales of used rental equipment		68,453			66,168
Proceeds from sales of property, plant and equipment		12,251			9,702
Net cash used in investing activities		(150,755	)		(391,868	)
Cash Flows from Financing Activities:
Net (payments) borrowings under bank lines of credit		(172,560	)		274,225
Borrowings under term note agreement		—			75,000
Taxes paid related to net share settlement of stock awards		(4,371	)		(7,233	)
Payment of dividends		(46,759	)		(45,556	)
Net cash (used in) provided by financing activities		(223,690	)		296,436
Effect of foreign currency exchange rate changes on cash		—			9
Net decrease in cash		(70	)		(80	)
Cash balance, beginning of period		877			957
Cash balance, end of period	$	807		$	877
Supplemental Disclosure of Cash Flow Information:
Gain on merger termination, net of transaction costs, presented under net cash provided by operating activities	$	116,841		$	—
Interest paid, during the period	$	48,324		$	38,603
Net income taxes paid, during the period	$	36,524		$	91,565
Dividends accrued during the period, not yet paid	$	12,482		$	12,010
Rental equipment acquisitions, not yet paid	$	5,393		$	16,653


MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Three months ended December 31, 2024
(dollar amounts in thousands)	Mobile Modular			Portable Storage			TRS- RenTelco			Enviroplex		Consolidated

Revenues
Rental		82,108			16,713			25,399			—		124,220
Rental related services		32,140			3,933			785			—		36,858
Rental operations		114,248			20,646			26,184			—		161,078
Sales		55,983			1,806			7,270			15,239		80,298
Other		1,598			211			561			—		2,370
Total revenues		171,829			22,663			34,015			15,239		243,746

Costs and Expenses
Direct costs of rental operations:
Depreciation		10,405			1,011			10,339			—		21,755
Rental related services		20,572			4,056			576			—		25,204
Other		18,534			1,493			4,904			—		24,931
Total direct costs of rental operations		49,511			6,560			15,819			—		71,890
Costs of sales		41,705			1,161			3,080			11,153		57,099
Total costs of revenues		91,216			7,721			18,899			11,153		128,989

Gross Profit (Loss)
Rental		53,169			14,209			10,156			—		77,534
Rental related services		11,568			(123	)		209			—		11,654
Rental operations		64,737			14,086			10,365			—		89,188
Sales		14,278			645			4,190			4,086		23,199
Other		1,598			211			561			—		2,370
Total gross profit		80,613			14,942			15,116			4,086		114,757
Selling and administrative expenses		35,789			7,133			6,550			2,197		51,669
Income from operations	$	44,824		$	7,809		$	8,566		$	1,889	$	63,088
Interest expense													8,858
Foreign currency exchange loss													270
Willscot Mobile Mini transaction costs													2,002
Provision for income taxes													13,009
Income from continuing operations												$	38,949

Other Information
Adjusted EBITDA ¹	$	60,994		$	9,922		$	19,099		$	1,987	$	92,002
Average rental equipment ²	$	1,270,068		$	231,332		$	349,018
Average monthly total yield ³		2.15	%		2.41	%		2.43	%
Average utilization ⁴		76.0	%		61.2	%		59.1	%
Average monthly rental rate ⁵		2.84	%		3.94	%		4.11	%

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions.
2.		Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.
3.		Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
4.		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.
5.		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, 2023
(dollar amounts in thousands)	Mobile Modular			Portable Storage			TRS- RenTelco			Enviroplex		Consolidated

Revenues
Rental	$	75,931		$	19,760		$	27,872		$	—	$	123,563
Rental related services		30,713			5,150			816			—		36,679
Rental operations		106,644			24,910			28,688			—		160,242
Sales		42,329			1,696			5,751			8,813		58,589
Other		1,686			338			733			—		2,875
Total revenues		150,659			26,944			35,172			8,813		221,706

Costs and Expenses
Direct costs of rental operations:
Depreciation		9,725			944			11,744			—		22,413
Rental related services		19,689			4,651			663			—		25,003
Other		18,256			1,699			4,799			—		24,754
Total direct costs of rental operations		47,670			7,294			17,206			—		72,170
Costs of sales		28,718			1,059			2,577			6,942		39,296
Total costs of revenues		76,388			8,353			19,783			6,942		111,466

Gross Profit
Rental		47,950			17,117			11,329			—		76,396
Rental related services		11,024			499			153			—		11,676
Rental operations		58,974			17,616			11,482			—		88,072
Sales		13,611			637			3,174			1,871		19,293
Other		1,686			338			733			—		2,868
Total gross profit		74,271			18,591			15,389			1,871		110,122
Selling and administrative expenses		37,213			8,255			7,386			1,652		54,506
Other income, net		(38	)		(7	)		(14	)		—		(59	)
Income from operations	$	37,096		$	10,343		$	8,017		$	219		55,675
Interest expense													12,126
Foreign currency exchange gain													(144	)
Provision for income taxes													11,676
Income from continuing operations												$	32,017

Other Information
Adjusted EBITDA ¹	$	54,106		$	12,765		$	20,690		$	308	$	87,869
Average rental equipment ²	$	1,155,413		$	218,976		$	379,214
Average monthly total yield ³		2.19	%		3.01	%		2.43	%
Average utilization ⁴		79.7	%		74.8	%		58.9	%
Average monthly rental rate ⁵		2.75	%		4.02	%		4.16	%

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions.
2.		Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.
3.		Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
4.		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.
5.		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, 2024
(dollar amounts in thousands)	Mobile Modular			Portable Storage			TRS- RenTelco			Enviroplex		Consolidated

Revenues
Rental		318,149			69,983			101,797			—		489,929
Rental related services		127,589			17,702			3,207			—		148,498
Rental operations		445,738			87,685			105,004			—		638,427
Sales		183,234			5,695			27,531			45,830		262,290
Other		6,394			1,117			2,714			—		10,225
Total revenues		635,366			94,497			135,249			45,830		910,942

Costs and Expenses
Direct costs of rental operations:
Depreciation		40,399			3,982			43,886			—		88,267
Rental related services		83,547			17,267			2,605			—		103,419
Other		83,023			5,816			20,277			—		109,116
Total direct costs of rental operations		206,969			27,065			66,768			—		300,802
Costs of sales		124,886			3,551			12,426			33,862		174,725
Total costs of revenues		331,855			30,616			79,194			33,862		475,527

Gross Profit
Rental		194,727			60,185			37,634			—		292,546
Rental related services		44,042			435			602			—		45,079
Rental operations		238,769			60,620			38,236			—		337,625
Sales		58,348			2,144			15,105			11,968		87,565
Other		6,394			1,117			2,714			—		10,225
Total gross profit		303,511			63,881			56,055			11,968		435,415
Selling and administrative expenses		136,670			29,197			27,000			7,565		200,432
Other income, net		(6,220	)		(1,319	)		(1,742	)		—		(9,281	)
Income from operations	$	173,061		$	36,003		$	30,797		$	4,403	$	244,264
Interest expense													47,241
Foreign currency exchange loss													215
Gain on merger termination from WillScot Mobile Mini													(180,000	)
Willscot Mobile Mini transaction costs													63,159
Provision for income taxes													81,922
Income from continuing operations												$	231,727

Other Information
Adjusted EBITDA ¹	$	229,160		$	43,255		$	74,525		$	4,785	$	351,725
Average rental equipment ²	$	1,221,900		$	227,600		$	362,558
Average monthly total yield ³		2.17	%		2.56	%		2.34	%
Average utilization ⁴		77.5	%		64.9	%		57.3	%
Average monthly rental rate ⁵		2.80	%		3.95	%		4.08	%

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions.
2.		Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.
3.		Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
4.		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.
5.		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, 2023
(dollar amounts in thousands)	Mobile Modular			Portable Storage			TRS- RenTelco			Enviroplex			Consolidated

Revenues
Rental	$	285,553		$	74,536		$	114,247		$	—		$	474,336
Rental related services		114,511			20,510			3,139			—			138,160
Rental operations		400,064			95,046			117,386			—			612,496
Sales		155,267			4,587			27,119			20,192			207,165
Other		6,905			1,504			3,772			—			12,181
Total revenues		562,236			101,137			148,277			20,192			831,842

Costs and Expenses
Direct costs of rental operations:
Depreciation		36,921			3,514			48,477			—			88,912
Rental related services		75,390			18,568			2,670			—			96,628
Other		86,983			7,317			20,642			—			114,942
Total direct costs of rental operations		199,294			29,399			71,789			—			300,482
Costs of sales		105,021			2,858			13,884			15,964			137,727
Total costs of revenues		304,315			32,257			85,673			15,964			438,209

Gross Profit
Rental		161,649			63,705			45,128			—			270,482
Rental related services		39,121			1,942			469			—			41,532
Rental operations		200,770			65,647			45,597			—			312,014
Sales		50,246			1,729			13,235			4,228			69,438
Other		6,905			1,504			3,772			—			12,181
Total gross profit		257,921			68,880			62,604			4,228			393,633
Selling and administrative expenses		138,574			31,537			30,962			6,466			207,539
Other income, net		(2,329	)		(457	)		(832	)		—			(3,618	)
Income (loss) from operations	$	121,676		$	37,800		$	32,474		$	(2,238	)	$	189,712
Interest expense														40,560
Foreign currency exchange gain														(310	)
Provision for income taxes														37,610
Income from continuing operations													$	111,852

Other Information
Adjusted EBITDA ¹	$	189,661		$	46,690		$	83,903		$	(1,898	)	$	318,356
Average rental equipment ²	$	1,093,086		$	206,095		$	388,679
Average monthly total yield ³		2.18	%		3.01	%		2.43	%
Average utilization ⁴		79.7	%		77.3	%		58.9	%
Average monthly rental rate ⁵		2.73	%		3.90	%		4.16	%

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions. Adjusted EBITDA for the year ended December 31, 2023, excludes the gain on sale of discontinued operations from the divestiture of Adler Tanks.
2.		Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.
3.		Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
4.		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.
5.		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, non-cash impairment costs, share-based compensation, transaction costs, gains on property sales and non-operating transactions. The gain on merger termination from WillScot Mobile Mini was considered a non-operating transaction and is excluded from Adjusted EBITDA. 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 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 and non-recurring transactions, including share-based compensation, transaction costs, gains on property sales and non-operating transactions, 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, transaction costs, gains on property sales and non-operating transactions. 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 Income from Continuing Operations to Adjusted EBITDA
(dollar amounts in thousands)	Three Months Ended December 31,						Twelve Months Ended December 31,
	2024			2023			2024			2023
Income from continuing operations	$	38,949		$	32,016		$	231,727		$	111,852
Provision for income taxes from continuing operations		13,009			11,676			81,922			37,610
Interest expense		8,858			12,126			47,241			40,560
Depreciation and amortization		26,631			27,533			107,455			107,918
EBITDA		87,447			83,351			468,345			297,940
Share-based compensation		2,553			3,002			9,502			8,157
Transaction costs ³		2,002			1,575			63,159			15,877
Other income, net ⁴		—			(59	)		(9,281	)		(3,618	)
Gain on merger termination from WillScot Mobile Mini ⁵		—			—			(180,000	)		—
Adjusted EBITDA ¹	$	92,002		$	87,869		$	351,725		$	318,356
Adjusted EBITDA margin ²		38	%		40	%		38	%		39	%


Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities
(dollar amounts in thousands)	Three Months Ended December 31,						Twelve Months Ended December 31,
	2024			2023			2024			2023
Adjusted EBITDA ¹	$	92,002		$	87,869		$	351,725		$	322,038
Interest paid		(7,986	)		(10,785	)		(48,324	)		(38,603	)
Income taxes paid, net of refunds received		(40,188	)		(82,018	)		(36,362	)		(91,565	)
Gain on sale of used rental equipment		(9,900	)		(8,678	)		(35,085	)		(31,642	)
Foreign currency exchange loss		270			(144	)		215			(310	)
Amortization of debt issuance costs		60			2			66			8
Change in certain assets and liabilities:
Accounts receivable, net		5,187			(9,204	)		8,026			(35,143	)
Prepaid expenses and other assets		(13,101	)		(21,936	)		6,887			(29,326	)
Accounts payable and other liabilities		24,686			15,148			128,981			(14,208	)
Deferred income		(14,089	)		6,186			(1,592	)		14,094
Net cash provided by (used in) operating activities	$	36,779		$	(23,560	)	$	374,375		$	95,343

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions. Adjusted EBITDA for the twelve months ended December 31, 2023, excludes the gain on sale of discontinued operations from the divestiture of Adler Tanks.
2.		Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total revenues for the period.
3.		Transaction costs include acquisition and divestiture related legal and professional fees and other costs specific to these transactions.
4.		Other income, net consists of net gains on property, plant and equipment sales that are infrequent in nature and excluded from Adjusted EBITDA.
5.		The gain on merger termination from WillScot Mobile Mini was considered a non-operating transaction and is excluded from Adjusted EBITDA.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250219751172/en/

Keith E. Pratt

EVP & Chief Financial Officer

925-606-9200

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Date	Price Target	Rating	Analyst
12/11/2024	$152.00	Market Outperform	CJS Securities
9/25/2024	$120.00	Outperform	Oppenheimer
2/2/2023	$127.00	Neutral → Buy	Sidoti
11/16/2022	$106.00	Buy → Neutral	Sidoti

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