Williams Scotsman International, Inc. (NASDAQ: WLSC), a leading
provider of modular space solutions, reported today its financial
results for the first quarter of 2007.
First Quarter Results
Total revenue for the 2007 first quarter was $161.9 million,
compared to $165.0 million a year ago. As previously announced, the
Company's results for the 2006 first quarter included a single large
U.S. military sale as well as unusually high business activity related
to the early-stage recovery efforts in the hurricane-affected region
of the country. These items contributed $23.7 million of revenue. On a
comparable basis excluding the impact of these items from the
Company's 2006 first quarter results, total revenue increased by 15%
or $20.7 million. Leasing revenues increased 16% to $80.2 million from
$68.9 million in the prior year quarter, driven primarily by a 1.8%
increase in average units on rent in North America, and an increase in
the average rental rate of $24 to $306 from $282. North American
utilization showed a decline to 80% from 82% a year ago due to idle
classroom capacity and storage fleet growth.
The increase in units on rent and average rental rates is
attributable to continued strong performance throughout the Company's
U.S. regions and Canada. The remaining increase in leasing revenue was
driven by the Company's European subsidiary, Wiron, which was acquired
in the third quarter of 2006. Sales of new units and rental equipment
and delivery and installation revenues decreased 22.8% and 10.2%,
respectively compared to the prior year quarter as a result of the
above mentioned items.
Gross profit margins increased by $8.6 million, or 13%, to $74.0
million, while the gross profit margin percentage increased 6.1
percentage points to 45.7% as compared to the prior year first
quarter. The Company reported net income for the quarter ended March
31, 2007 of $10.4 million, or $0.24 per diluted share, as compared to
net income of $10.4 million or $0.26 per diluted share for the quarter
ended March 31, 2006. The 2006 first quarter results included a net
income and earnings per share benefit of $2.8 million and $0.07,
respectively, from the U.S. military and hurricane related sales as
discussed above.
Gerry Holthaus, Chairman, President and CEO, commented, "We are
very pleased with the better than expected results of our first
quarter financial performance, particularly in light of the
challenging comparison to an unusually strong 2006 first quarter. Our
performance demonstrates the benefits of our diversified growth
strategy along with continued solid demand from the U.S.
non-residential market. Our results for the period also reflect
continued growth in our Canadian operations, including the oil and gas
sectors, and the benefit of our European operations. The overall
result was impressive performance within our leasing business, with an
increase in leasing revenues and gross margin percentage of 16% and
3.9 percentage points, respectively, over the prior year quarter.
"During the quarter we continued to execute on our growth and
diversification strategies, expanding our operational footprint with
the previously announced acquisition of Honolulu-based Hawaii Modular
Space and its sister company, Alaska Modular Space, on March 8, 2007.
The integration process is going well, and we are continuing with a
number of operational initiatives to complete the assimilation of this
acquisition into the Company."
Business Outlook
The following statements of anticipated results are based on
current expectations. These statements are forward-looking, and actual
results may differ materially.
The Company estimates the following performance measures for the
second quarter ending June 30, 2007 and year ending December 31, 2007:
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(in millions, except per share data)
Quarter Ended Year Ended
June 30, 2007 December 31, 2007
------------- -----------------
Low High Low High
------ ------ --------- -------
Range Range
Operating income $39.9 $41.4 $168.0 $171.5
Depreciation and amortization 22.3 22.3 90.2 90.2
Net income 12.6 13.6 55.7 57.8
Earnings per share - diluted 0.29 0.31 1.25 1.30
Capital expenditures (excluding
acquisitions) $50.0 $55.0 $135.0 $145.0
*T
Mr. Holthaus concluded, "Looking ahead, we believe Williams
Scotsman remains positioned well for solid growth. Indications are
that demand within our targeted vertical markets remains positive,
while conditions within our non-U.S. markets also continue to be
strong. We are making excellent progress in achieving our goals for
2007 and look forward to additional success in the future."
The Business Outlook published in this press release reflects only
the Company's current best estimate and the Company assumes no
obligation to update the information contained in this press release,
including the Business Outlook, at any time prior to its next earnings
release.
Williams Scotsman International, Inc. has scheduled a conference
call for May 2, 2007 at 10:00 AM Eastern Time to discuss its first
quarter results. To participate in the conference call, dial
888-433-1674 for domestic (212-748-2817 for international) and ask to
be placed into the Williams Scotsman call. To listen to a live webcast
of the call, go to www.willscot.com and click on the Investor
Relations section. Please go to the website 15 minutes early to
download and install any necessary audio software. A replay of the
call will be available approximately two hours after the live
broadcast ends and will be accessible until 11:59 PM on June 1, 2007.
To access the replay, domestic callers can dial 800-633-8284 and enter
access code 21336707 (international callers can dial 402-977-9140).
About Williams Scotsman International, Inc.
Williams Scotsman International, Inc., through its subsidiaries,
is a leading provider of mobile and modular space solutions for
multiple industry sectors, including the Construction, Education,
Commercial, Healthcare and Government markets. The company serves over
30,000 customers, operating a fleet of over 118,000 modular space and
storage units that are leased through a network of over 100 locations
throughout North America and Spain. Williams Scotsman provides
delivery, installation, and other services, and sells new and used
mobile office products. Williams Scotsman also manages large modular
building projects from concept to completion. Williams Scotsman is a
publicly traded company (NASDAQ: WLSC) headquartered in Baltimore,
Maryland with operations in the United States, Canada, Mexico, and
Spain. For additional information, visit the company's web site at
www.willscot.com, call (410) 931-6066, or email to
Michele.Cunningham@willscot.com.
All statements other than statements of historical fact included
in this press release are forward-looking statements and involve
expectations, beliefs, plans, intentions or strategies regarding the
future. Although the company believes that the expectations reflected
in these forward-looking statements are reasonable, it assumes no
responsibility for the accuracy and completeness of these
forward-looking statements and gives no assurance that these
expectations will prove to have been correct. Important factors that
could cause actual results to differ materially from the company's
expectations are disclosed under "Risk Factors" and elsewhere in the
company's 10-K, 10-Q and other SEC filings, including, but not limited
to, substantial leverage and its ability to service debt, changing
market trends in its industry, general economic and business
conditions including a prolonged or substantial recession, its ability
to finance fleet and branch expansion and to locate and finance
acquisitions, its ability to implement its business and growth
strategy and maintain and enhance its competitive strengths, intense
industry competition, availability of key personnel and changes in, or
the failure to comply with, government regulations. The company
assumes no obligation to update any forward-looking statement.
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Williams Scotsman International, Inc.
Consolidated Balance Sheets
(dollars in thousands)
March 31, December 31,
2007 2006
----------- ------------
(Unaudited)
Assets
Cash $ 2,129 $ 6,495
Trade accounts receivable, net 92,780 120,586
Prepaid expenses and other current assets 56,714 52,938
Rental equipment, net 1,102,446 1,066,469
Property and equipment, net 94,805 92,992
Deferred financing costs, net 18,472 19,277
Goodwill and other intangible assets 224,044 199,788
Other assets, net 31,712 29,374
----------- ------------
Total assets $1,623,102 $1,587,919
=========== ============
Liabilities and stockholders' equity
Accounts payable $ 50,878 $ 58,964
Accrued expenses and other current
liabilities 46,393 50,834
Accrued interest 22,493 12,887
Rents billed in advance 25,306 25,031
Revolving credit facility 314,359 296,892
Long-term debt, net 618,888 619,464
Deferred income taxes 161,239 155,706
----------- ------------
Total liabilities 1,239,556 1,219,778
----------- ------------
Stockholders' equity:
Common stock 560 557
Additional paid-in capital 548,695 545,124
Retained earnings 111,395 100,962
Accumulated other comprehensive income 18,834 17,436
----------- ------------
679,484 664,079
Less treasury stock (295,938) (295,938)
----------- ------------
Total stockholders' equity 383,546 368,141
----------- ------------
Total liabilities and stockholders'
equity $1,623,102 $1,587,919
=========== ============
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Williams Scotsman International, Inc.
Consolidated Statements of Operations (unaudited)
(dollars in thousands, except per share data)
Quarter Ended March 31,
-------------------------
2007 2006
------------ ------------
Revenues
Leasing $ 80,184 $ 68,883
Sales:
New units 28,624 39,946
Rental equipment 10,315 10,511
Delivery and installation 30,563 34,026
Other 12,263 11,607
------------ ------------
Total revenues 161,949 164,973
------------ ------------
Cost of sales and services
Leasing:
Depreciation and amortization 15,724 14,190
Other direct leasing costs 15,208 15,050
Sales:
New units 22,181 32,308
Rental equipment 7,549 7,674
Delivery and installation 24,777 28,098
Other 2,555 2,272
------------ ------------
Total cost of sales and services 87,994 99,592
------------ ------------
Gross profit 73,955 65,381
Selling, general & administrative expenses
(1) 32,720 26,650
Other depreciation and amortization 5,402 4,246
------------ ------------
Operating Income 35,833 34,485
Interest, including amortization of deferred
financing costs 19,006 17,521
------------ ------------
Income before income taxes 16,827 16,964
Income tax expense 6,394 6,531
------------ ------------
Net income $ 10,433 $ 10,433
============ ============
Earnings per common share $ 0.24 $ 0.27
============ ============
Earnings per common share, assuming dilution $ 0.24 $ 0.26
============ ============
Weighted average common shares outstanding -
basic 43,164,059 39,361,922
============ ============
Weighted average common shares outstanding -
diluted 43,749,506 40,807,082
============ ============
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(1) Includes non-cash stock compensation expense of $0.8 million
and $0.5 million for the three months ended March 31, 2007 and 2006,
respectively.
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Williams Scotsman International, Inc.
Summary of Selected Consolidated Financial Information (unaudited)
(Dollars in thousands except monthly rental rate)
Quarter Ended
March 31,
-----------------
Operations Data (in thousands): 2007 2006
---------------------------------------------------- -------- --------
Gross profit
Leasing $49,252 $39,643
Sales:
New units 6,443 7,638
Rental equipment 2,766 2,837
Delivery and installation 5,786 5,928
Other 9,708 9,335
-------- --------
Total gross profit $73,955 $65,381
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North America Rental Quarter Ended Quarter Ended
Fleet Data: March 31, 2007 March 31, 2006
------------------------ -----------------------
Modular Storage Total Modular Storage Total
------- ------- -------- ------- ------- -------
Lease fleet units, as
of end of period 79,000 24,300 103,300 77,600 21,800 99,400
Lease fleet units,
average for period 78,300 23,900 102,200 76,900 21,700 98,600
Utilization rate
based upon units,
average for period 82% 75% 80% 83% 78% 82%
Monthly rental rate,
average over period $364 $99 $306 $332 $97 $282
*T
At March 31, 2007, our European rental fleet totaled approximately
15,400 units, at a utilization rate of 89% and an average rental rate
of $131.
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Quarter Ended
March 31,
-----------------
Capital Expenditure Data (in thousands): 2007 2006
---------------------------------------------------- -------- --------
Lease fleet, net (a) $27,452 $26,513
Non-lease fleet 4,068 2,245
Acquisitions 42,639 5,123
*T
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Other Financial Data (at period end): March 31, 2007
--------------
Leverage Ratio (b) 3.87 x
Leverage Ratio (c) 19.00 x
Borrowing base availability under revolving credit
facility (d) (in thousands) $196,067
*T
(a) Capital expenditures are shown net of used units sold
(b) Calculated as total debt divided by Consolidated EBITDA, see
(f) below
(c) Calculated as total debt divided by net income, the most
comparable GAAP measure
(d) Under the Company's Amended and Restated Credit Agreement, the
Company is not subject to financial covenants as long as its excess
availability under the revolving credit facility remains above $75
million. As of March 31, 2007, the Company's excess availability under
the revolver was $196.1 million or $121.1 million in excess of the $75
million requirement
Reconciliation of EBITDA for the quarter ended March 31, 2007 and
2006 to net income - the most comparable GAAP measure:
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Quarter Ended
March 31,
-----------------
2007 2006
-------- --------
(in thousands)
EBITDA (e) $56,959 $52,921
Less:
Interest expense 19,006 17,521
Depreciation and amortization 21,126 18,436
Income tax provision 6,394 6,531
-------- --------
Net income $10,433 $10,433
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(e) The Company defines EBITDA as earnings before deducting
interest, loss on extinguishment of debt, income taxes, depreciation
and amortization
Reconciliation of Consolidated EBITDA, as defined below, to net
income - the most comparable GAAP measure for the twelve months ended
March 31, 2007 (in thousands):
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Consolidated EBITDA - trailing 12 months (f) $241,202
Less:
Interest expense 70,604
Depreciation and amortization 82,537
Income tax provision 25,882
Non-cash stock compensation expense 2,949
Loss on early extinguishment of debt 90
Pro forma EBITDA impact of acquisitions 10,024
---------
Net income, trailing 12 months $ 49,116
=========
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(f) Consolidated EBITDA is defined as the Company's net income
plus interest, loss on extinguishment of debt, taxes, depreciation and
amortization expenses, and excludes (gains) losses on sales of fixed
assets and any other non-cash items, and non-cash stock compensation
charges. Consolidated EBITDA also includes an adjustment to reflect
the estimated full year EBITDA contribution of acquisitions completed
during the period. Consolidated EBITDA should not be considered in
isolation or as a substitute to cash flow from operating activities,
net income or other measures of performance prepared in accordance
with generally accepted accounting principles or as a measure of the
Company's profitability or liquidity. The Company is providing
Consolidated EBITDA as supplemental information so that investors can
evaluate the Company's performance and debt position. Consolidated
EBITDA of the Company's wholly owned subsidiary, Williams Scotsman,
Inc., is also separately calculated and utilized to assess its
compliance with the financial covenants under the Amended and Restated
Credit Agreement.
