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2020-08-10

WillScot Mobile Mini Holdings Announces Second Quarter Results and Updates 2020 Outlook

With transformational merger complete management announces $250 million share repurchase authorization

PHOENIX, Aug. 10, 2020 (GLOBE NEWSWIRE) -- WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini Holdings” or the “Company”) (Nasdaq: WSC), a North American leader in turnkey modular space and portable storage solutions, today announced second quarter 2020 financial results, provided an update on the recently closed merger and the current market environment, and accordingly, updated its 2020 outlook.

On July 1, 2020, the Company, formerly known as WillScot Corporation (“WillScot”), through its subsidiary, closed the merger with Mobile Mini, Inc. (“Mobile Mini”) and changed its name to WillScot Mobile Mini Holdings Corp (the “Mobile Mini Merger”). The financial and operational data below reflect the standalone results of each of WillScot and Mobile Mini prior to the closing of the Mobile Mini Merger.

WillScot Mobile Mini Holdings’ Second Quarter 2020 Financial Highlights1,4

Highlights of WillScot’s Reported Results

  • Revenues of $256.9 million represented a year over year decrease of 2.6% or $6.8 million, driven by lower unit sales and delivery volumes.
  • Modular leasing revenue increased 2.3% year over year driven by pricing and value-added products.
    • Consolidated modular space average monthly rental rate increased 9.5% year over year to $669 and US Modular average monthly rental rate increased 11.3% year over year.
  • Adjusted EBITDA of $97.5 million represented a $10.0 million or 11.4% year over year increase, driven by improved pricing and value-added products and services ("VAPS"), continued realization of cost synergies from the ModSpace acquisition, and other cost reductions in the current quarter related to the reduced demand environment.
    • Adjusted EBITDA margin of 38.0% increased 480 basis points ("bps") year over year.
  • Consolidated net income of $12.8 million, which included $5.9 million of discrete costs from acquisition and integration-related activities, improved by $24.2 million year over year.
  • Free Cash Flow of $39.0 million increased by $37.4 million year over year, representing WillScot's fifth consecutive quarter of positive free cash generation.
    • The year over year increase is attributable to the aforementioned 480 bps of Adjusted EBITDA margin expansion, a $6.8 million or 15.7% reduction in net capital expenditures, a $3.1 million or 9.9% reduction in interest expense, and lower integration and restructuring costs.

Highlights of Mobile Mini’s Reported Results  

  • Revenues of $132.1 million represented a year over year decrease of 12.0% or $18.1 million.
    • Sustained year over year rate increases with a second quarter increase of 3.2% in North America Storage Solutions, mainly offset by a decline in Tank & Pump Solutions segment revenues as well as delivery, pickup and similar revenues.
  • Adjusted EBITDA of $56.3 million, declined 1.1% year over year, with Storage Solutions Adjusted EBITDA up 8.3% compared to prior year, offset by a decline in the Tank & Pump Solutions segment. 
    • Adjusted EBITDA margin expanded 470 bps year over year to 42.6%, despite the decline in rental revenues, reflecting proactive cost management and the flexibility in our cost structure.
  • Consolidated net income of $17.2 million, which included $4.4 million of discrete costs from acquisition and integration-related activities, improved by $3.2 million year over year.
  • Free Cash Flow of $31.1 million decreased $7.6 million year over year, due to $12.9 million of cash expenditures related to acquisition and integration-related activities and the sharp improvement in days sales outstanding experienced in 2019 which was sustained into 2020. Free cash flow increased sequentially from $22.5 million in the first quarter and represented the 50th consecutive quarter of positive free cash flow.
    • Excluding cash expenditures related to merger-related costs, free cash flow for the three months ended June 30, 2020 was $44.0 million.

Quarterly financial information and the related management's discussion and analysis of financial condition and results of operations of Mobile Mini, for the quarterly period ended June 30, 2020, will be filed by the Company on a Current Report on Form 8-K and will be available on the SEC's EDGAR system.

Consolidated Operations Update

  • All company locations remained operational throughout the quarter with limited disruption, while prioritizing the health and safety of our employees, customers, and vendors. Precautionary measures included: requiring temperature screening and masks at all locations, maintaining remote and flexible work arrangements in all shared service centers, social distancing, restricted travel, and other protocols as recommended by the CDC.

  • The company’s installed base, or units that were at customer sites pre-COVID-19, has behaved as expected. Project completions and unit returns have slowed relative to last year, and we have observed no change in customer payment behavior, as reflected in our strong free cash flow in the quarter.

  • WillScot’s demand indicators have been improving on a sequential monthly basis since April 2020. Order rates during July were down 5% versus prior year which compares to order rates being down approximately 20% year over year during the second quarter. Pending orders are comprised of units ordered but not yet delivered as well as units scheduled for delivery in the next four weeks. Pending orders for modular units scheduled to deliver over the next four weeks are down approximately 8% to prior year, versus having been down 25% year over year as of April 26, 2020. This represents a meaningful improvement in scheduling and customer project certainty over the past three months. WillScot’s total pending orders as of August 3, 2020 are down 5% versus prior year.

  • Mobile Mini’s demand indicators have also been improving on a sequential monthly basis since April 2020. Net new orders excluding seasonal units during July were down 4% versus prior year which compares to order rates being down greater than 20% year over year during the second quarter. Pending orders excluding seasonal units scheduled to deliver over the next four weeks are down approximately 11% to prior year, versus having been down greater than 25% year over year as of May 1, 2020. This positive trend indicates improvement in customer visibility into project start dates.

  • Both WillScot and Mobile Mini took actions to reduce variable costs to align with the current demand environment in addition to reducing fixed costs where possible to maximize profitability. These actions drove adjusted EBITDA margin expansion of 470bps or more for each business, highlighting the combined company's flexibility to adjust both the cost structure and capital expenditures based on market conditions to preserve margins and free cash flow.

The following historical results, tables, and commentary relate to WillScot.  The discussion of capitalization and liquidity, the updated financial outlook, and the discussion of the forward-looking capital allocation priorities relate to the combined company, WillScot Mobile Mini Holdings. A Mobile Mini standalone earnings presentation for the second quarter of 2020 is available on the WillScot Mobile Mini Holdings investor relations website. Financial information and results for periods following the closing of the Mobile Mini Merger will be presented for WillScot Mobile Mini Holdings.

 Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2020 20192020 2019
Revenue4$256,862  $263,713  $512,683  $517,398 
Consolidated net income (loss)4$12,833  

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