Exhibit 99.1
CAI International, Inc. Reports Results for the Third Quarter of 2010
SAN FRANCISCO--(BUSINESS WIRE)--November 2, 2010--CAI International, Inc. (CAI) (NYSE:CAP), one of the world’s leading lessors of intermodal freight containers, today reported results for the third quarter of 2010.
Highlights for the third quarter of 2010 and Outlook
- CAI reported net income attributable to CAI common stockholders for the third quarter of 2010 of $0.50 per fully diluted share, a 178% increase compared to $0.18 during the third quarter of 2009 and a 61% increase as compared the $0.31 per fully diluted share in the second quarter of 2010.
- The $0.50 per fully diluted share for the third quarter of 2010 included a $2.1 million tax benefit due to a reduction in accrued tax liability. Without this tax benefit, net income attributable to CAI common stockholders for the third quarter of 2010 would have been $0.39 per fully diluted share, a 117% increase compared to the third quarter of 2009 and a 26% increase compared to the second quarter of 2010.
- Container rental revenue increased 23% during the third quarter of 2010 as compared to the second quarter of 2010.
- Average utilization for the third quarter of 2010 improved by 3% to 98.1% from the 95.1% reported in the second quarter of 2010.
- Container demand has remained strong in the fourth quarter of 2010 and as of October 31, 2010 utilization remained at 98.1%.
- During August and September, 2010 CAI entered into transactions with two container investor partnerships for 25,500 TEUs of containers.
- During July, 2010 CAI purchased approximately 23,000 TEUs from a container investor.
- During the third quarter CAI accepted delivery of 40,500 TEUs of new containers whose full revenue impact will be in the fourth quarter of 2010.
CAI today reported net income attributable to CAI common stockholders of $9.2 million in the third quarter of 2010 as compared to net income attributable to CAI common stockholders of $3.2 million in the third quarter of 2009. Fully diluted earnings per share in the third quarter of 2010 were $0.50 ($0.39 without the $2.1 million tax benefit due to the reduction in accrued tax liability) on 18.2 million average shares outstanding, as compared to fully diluted earnings per share of $0.18 on 17.9 million average shares outstanding during the third quarter of 2009.
Total revenue for the third quarter of 2010 was $20.1 million as compared to $15.7 million for the third quarter of 2009. Container rental revenue was $17.2 million as compared to $13.4 million in the third quarter of 2009. Management fee revenue was $2.2 million as compared to $1.8 million of management fee revenue reported in the third quarter of 2009. There was no gain on sale of container portfolios in the third quarter of 2010 or third quarter of 2009. Finance lease income in the third quarter of 2010 was $0.7 million as compared to finance lease income of $0.5 million reported in the third quarter of 2009.
During August 2010 we announced the increase in the commitment of our revolving credit facility from $290 million to $330 million and the extension of the maturity date by two years to September 25, 2014. These changes to the revolving credit agreement permit us to take advantage of the attractive capital expenditure opportunities presented to CAI this year and beyond.
Masaaki (John) Nishibori, CEO of CAI, commented, “We are very pleased with our performance in the third quarter of 2010. Our fleet today is effectively fully utilized and because of the strong demand we are expecting to further invest in new containers during the last quarter of 2010. Demand for containers is being driven primarily by increased trade activity. Clarkson Research, a shipping industry research firm, is forecasting world containerized trade growth of 11.5% in 2010 and 10.4% in 2011. Per diem rates on new leases have materially increased because of the strong demand and the increase in new container prices. We expect the higher utilization and improving per diem trend to benefit us over the remainder of 2010.
In this quarter, we took delivery of 40,500 TEUs of new containers and in July 2010 purchased 23,000 TEUs of older units from one of our container investors. The used units we purchased were managed by CAI and are principally all on lease. During the quarter, we also transferred approximately 25,500 TEUs of older containers to two investor funds in Asia. Along with these transactions, we entered into new management agreements with the investors for those assets. CAI negotiated into the container agreements a fixed price purchase option granted to CAI on the units, which in part results in CAI consolidating the financial performance of the funds’ operations into CAI’s financial results. The funds’ net operating income for the third quarter of 2010 of $49,000 has been recorded as net income attributable to non-controlling interest on our consolidated statements of income. Overall, we believe container investors in Asia and Europe are becoming more interested in investing in containers as a result of the improved utilization of containers and the outlook for the container shipping industry.
We remain optimistic about the prospects for the remainder of 2010 and beyond. Fourth quarter utilization is expected to remain at historically high levels with shipping companies likely to hold on to equipment in order to have access to it in the first quarter of 2011, when demand seasonally is expected to pick up again. Container demand for newly manufactured refrigerated containers has been strong in the fourth quarter and we expect overall new container demand will be strong next year because of the current utilization levels among container leasing companies and expected trade growth of over 10% next year as forecasted by Clarkson Research. With the increased demand for containers we purchased or have commitments to purchase in excess of $200 million of containers this year.
With these positive trends in place and the strong intake of new equipment in the third and fourth quarters, we expect that fourth quarter revenue and operating income will continue to grow sequentially over the third quarter.”
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CAI International, Inc. Consolidated Balance Sheets (In thousands, except share information) (UNAUDITED) |
| | September 30, | | December 31, |
| ASSETS | | 2010 | | 2009 |
| | | | |
| Cash | | $ | 11,219 | | | $ | 14,492 | |
Accounts receivable (owned fleet), net of allowance for doubtful
accounts of $2,018 and $1,420 at September 30, 2010 and December 31, 2009, respectively | | | 16,118 | | | | 14,412 | |
| Accounts receivable (managed fleet) | | | 19,609 | | | | 18,953 | |
| Current portion of direct finance leases | | | 4,492 | | | | 6,776 | |
| Prepaid expenses | | | 4,177 | | | | 3,077 | |
| Deferred tax assets | | | 1,668 | | | | 1,669 | |
| Other current assets | | | 479 | | | | 4,000 | |
| Total current assets | | | 57,762 | | | | 63,379 | |
Container rental equipment, net of accumulated depreciation of $81,260
and $80,627 at September 30, 2010 and December 31, 2009, respectively | | | 431,791 | | | | 299,340 | |
| Long-term portion of net investment in direct finance leases | | | 8,598 | | | | 5,844 | |
Furniture, fixtures and equipment, net of accumulated depreciation of
$788 and $759 at September 30, 2010 and December 31, 2009, respectively | | | 1,045 | | | | 435 | |
Intangible assets, net of accumulated amortization of $5,664 and $4,656
at September 30, 2010 and December 31, 2009, respectively | | | 3,966 | | | | 5,085 | |
| Total assets | | $ | 503,162 | | | $ | 374,083 | |
| | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
| | | | |
| Accounts payable | | $ | 2,399 | | | $ | 8,030 | |
| Accrued expenses and other current liabilities | | | 4,743 | | | | 3,638 | |
| Due to container investors | | | 20,460 | | | | 17,285 | |
| Unearned revenue | | | 4,612 | | | | 4,225 | |
| Current portion of related party term loan | | | 800 | | | | 800 | |
| Current portion of capital lease obligation | | | 4,740 | | | | 3,813 | |
| Rental equipment payable | | | 76,618 | | | | 660 | |
| Total current liabilities | | | 114,372 | | | | 38,451 | |
| Revolving credit facility | | | 177,100 | | | | 152,500 | |
| Related party term loan | | | 8,400 | | | | 9,000 | |
| Deferred taxes | | | 26,933 | | | | 26,606 | |
| Capital lease obligation | | | 11,708 | | | | 16,282 | |
| Income taxes payable | | | - | | | | 2,146 | |
| Total liabilities | | | 338,513 | | | | 244,985 | |
| | | | |
| Stockholders' equity: | | | | |
Common stock, par value $.0001 per share; authorized 84,000,000 shares; issued and outstanding,
17,913,990 shares at September 30, 2010 and 17,917,176 at December 31, 2009 | | | 2 | | | | 2 | |
| Additional paid-in capital | | | 104,413 | | | | 103,684 | |
| Accumulated other comprehensive loss | | | (1,996 | ) | | | (1,248 | ) |
| Retained earnings | | | 44,546 | | | | 26,660 | |
| Total CAI International, Inc. stockholders' equity | | | 146,965 | | | | 129,098 | |
| Non-controlling interest | | | 17,684 | | | | - | |
| Total equity | | | 164,649 | | | | 129,098 | |
| Total liabilities and stockholders' equity | | $ | 503,162 | | | $ | 374,083 | |
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CAI International, Inc. Consolidated Statements of Income (In thousands, except per share data) (UNAUDITED) |
| | |
| | | | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | | | 2010 | | 2009 | | 2010 | | 2009 |
| Revenue: | | | | | | | | | | |
| Container rental revenue | | $ | 17,184 | | | $ | 13,406 | | | $ | 43,502 | | | $ | 40,982 | |
| Management fee revenue | | | 2,244 | | | | 1,815 | | | | 6,961 | | | | 6,409 | |
| Gain on sale of container portfolios | | | - | | | | - | | | | 614 | | | | 753 | |
| Finance lease income | | | 691 | | | | 488 | | | | 1,598 | | | | 1,802 | |
| Total revenue | | | 20,119 | | | | 15,709 | | | | 52,675 | | | | 49,946 | |
| | | | | | | | | | |
| Operating expenses: | | | | | | | | | | |
| Depreciation of container rental equipment | | | 5,399 | | | | 4,265 | | | | 14,077 | | | | 12,858 | |
| Amortization of intangible assets | | | 339 | | | | 399 | | | | 1,034 | | | | 1,207 | |
| Impairment of container rental equipment | | | 12 | | | | 19 | | | | 40 | | | | 80 | |
| Gain on disposition of used container equipment | | | (1,842 | ) | | | (990 | ) | | | (5,760 | ) | | | (2,391 | ) |
| Storage, handling and other expenses | | | 987 | | | | 2,231 | | | | 4,941 | | | | 6,367 | |
| Marketing, general and administrative expense | | | 4,976 | | | | 4,987 | | | | 15,452 | | | | 14,679 | |
| Loss (gain) on foreign exchange | | | 116 | | | | (150 | ) | | | 527 | | | | (153 | ) |
| Total operating expenses | | | 9,987 | | | | 10,761 | | | | 30,311 | | | | 32,647 | |
| | | | | | | | | | |
| Operating income | | | | | 10,132 | | | | 4,948 | | | | 22,364 | | | | 17,299 | |
| | | | | | | | | | |
| Interest expense | | | | | 1,442 | | | | 992 | | | | 3,262 | | | | 3,344 | |
| Interest income | | | | | (1 | ) | | | (1 | ) | | | (121 | ) | | | (8 | ) |
| Net interest expense | | | 1,441 | | | | 991 | | | | 3,141 | | | | 3,336 | |
| | | | | | | | | | |
| Income before income tax and non-controlling interest | | | 8,691 | | | | 3,957 | | | | 19,223 | | | | 13,963 | |
| | | | | | | | | | |
| Income tax expense (benefit) | | | | | (519 | ) | | | 763 | | | | 1,288 | | | | 3,481 | |
| | | | | | | | | | |
| Net income | | | 9,210 | | | | 3,194 | | | | 17,935 | | | | 10,482 | |
| Less: Net income attributable to non-controlling interest | | | (49 | ) | | | - | | | | (49 | ) | | | - | |
| | | | | | | | | | |
| Net income attributable to CAI International, Inc. | | | | | | | | |
| common shareholders | | $ | 9,161 | | | $ | 3,194 | | | $ | 17,886 | | | $ | 10,482 | |
| | | | | | | | | | |
| Net income per share attributable to CAI International, Inc. | | | | | | | | |
| common shareholders: | | | | | | | | |
| Basic | | $ | 0.51 | | | $ | 0.18 | | | $ | 1.00 | | | $ | 0.59 | |
| Diluted | | $ | 0.50 | | | $ | 0.18 | | | $ | 0.99 | | | $ | 0.59 | |
| | | | | | | | | | |
| Weighted average shares outstanding : | | | | | | | | |
| Basic | | | 17,914 | | | | 17,905 | | | | 17,910 | | | | 17,901 | |
| Diluted | | | 18,151 | | | | 17,905 | | | | 18,121 | | | | 17,901 | |
| | | | | | | | | | | | | | | | |
| | As of September 30, 2010 | | As of September 30, 2009 |
| | (unaudited) |
| Managed fleet in TEUs | | 509,488 | | 511,753 |
| Owned fleet in TEUs | | 289,965 | | 244,416 |
| | | | |
| Total | | 799,453 | | 756,169 |
Conference Call
A conference call to discuss financial results for the third quarter of 2010 will be held on Tuesday, November 2, 2010 at 5:00 p.m. ET. The dial-in number for the teleconference is 1-877-303-9148; outside of the U.S., call 1-760-536-5211. The call may be accessed live over the internet (listen only) under the “Investors” tab of CAI’s website, www.capps.com, by selecting “Q3 2010 Earnings Conference Call.” A webcast replay will be available for 30 days on the “Investors” tab of our website.
About CAI International, Inc.
CAI is one of the world’s leading managers and lessors of intermodal freight containers. As of September 30, 2010, the company operated a worldwide fleet of approximately 799,500 TEUs of containers through 12 offices located in 10 countries including the United States.
This press release contains forward-looking statements regarding future events and the future performance of CAI International, Inc. These statements are forward looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and involve risks and uncertainties that could cause actual results of operations and other performance measures to differ materially from current expectations including, but not limited to, utilization rates, expected economic conditions, availability of credit on commercially favorable terms or at all, customer demand, container investment levels, container prices, lease rates, increased competition, volatility in exchange rates, and others. CAI refers you to the documents that it has filed with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2009 and its interim reports on Form 10-Q and its reports on Form 8-K. These documents contain additional important factors that could cause actual results to differ from current expectations and from forward-looking statements contained in this press release. Furthermore, CAI is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements contained in this press release whether as a result of new information, future events or otherwise, unless required by law.
CONTACT:
CAI International, Inc.
Victor Garcia, 415-788-0100
Chief Operating Officer
vgarcia@capps.com
