Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 26, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | MGRC | |
Security Exchange Name | NASDAQ | |
Entity Registrant Name | McGRATH RENTCORP | |
Entity Central Index Key | 0000752714 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Title of 12(b) Security | Common Stock | |
Entity File Number | 000-13292 | |
Entity Incorporation, State or Country Code | CA | |
Entity Tax Identification Number | 94-2579843 | |
Entity Address, Address Line One | 5700 Las Positas Road | |
Entity Address, City or Town | Livermore | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94551-7800 | |
City Area Code | 925 | |
Local Phone Number | 606-9200 | |
Entity Common Stock, Shares Outstanding | 24,484,993 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues | ||||
Rental | $ 117,840 | $ 94,667 | $ 228,087 | $ 184,717 |
Rental related services | 33,857 | 22,046 | 60,989 | 41,078 |
Rental operations | 151,697 | 116,713 | 289,076 | 225,795 |
Total revenues | 203,030 | 153,368 | 366,748 | 278,421 |
Direct costs of rental operations: | ||||
Depreciation of rental equipment | 22,597 | 20,082 | 44,430 | 39,944 |
Rental related services | 23,825 | 15,780 | 43,093 | 29,540 |
Other | 30,560 | 29,516 | 61,695 | 54,370 |
Total direct costs of rental operations | 76,982 | 65,378 | 149,218 | 123,854 |
Costs of sales | 31,438 | 21,034 | 45,553 | 29,576 |
Total costs of revenues | 108,420 | 86,412 | 194,771 | 153,430 |
Gross profit | 94,610 | 66,956 | 171,977 | 124,991 |
Selling and administrative expenses | 47,026 | 33,809 | 104,524 | 66,414 |
Income from operations | 47,584 | 33,147 | 67,453 | 58,577 |
Other (expense) income: | ||||
Interest expense | (9,945) | (2,426) | (17,409) | (4,702) |
Foreign currency exchange (loss) gain | (18) | (181) | 208 | (168) |
Income from continuing operations before provision for income taxes | 37,621 | 30,540 | 50,252 | 53,707 |
Provision for income taxes | 9,669 | 6,996 | 10,782 | 12,505 |
Income from continuing operations | 27,952 | 23,544 | 39,470 | 41,202 |
Discontinued operations: | ||||
Income from discontinued operations before provision for income taxes | 3,327 | 1,709 | 4,715 | |
Provision for income taxes from discontinued operations | 734 | 453 | 987 | |
Gain on sale of discontinued operations, net of tax | 2,630 | 61,513 | ||
Income from discontinued operations | 2,630 | 2,593 | 62,769 | 3,728 |
Net income | $ 30,582 | $ 26,137 | $ 102,239 | $ 44,930 |
Earnings per share from continuing operations: | ||||
Basic | $ 1.14 | $ 0.96 | $ 1.61 | $ 1.68 |
Diluted | 1.14 | 0.96 | 1.61 | 1.68 |
Earnings Per Share from Discontinued Operations [Abstract] | ||||
Basic | 0.11 | 0.11 | 2.57 | 0.15 |
Diluted | 0.11 | 0.11 | 2.56 | 0.15 |
Earnings per share: | ||||
Basic | 1.25 | 1.07 | 4.18 | 1.83 |
Diluted | $ 1.25 | $ 1.07 | $ 4.17 | $ 1.83 |
Shares used in per share calculation: | ||||
Basic | 24,479 | 24,360 | 24,448 | 24,323 |
Diluted | 24,512 | 24,509 | 24,527 | 24,522 |
Cash dividends declared per share | $ 0.465 | $ 0.455 | $ 0.93 | $ 0.91 |
Sales [Member] | ||||
Revenues | ||||
Revenues | $ 47,801 | $ 35,870 | $ 71,461 | $ 51,089 |
Other [Member] | ||||
Revenues | ||||
Revenues | $ 3,532 | $ 785 | $ 6,211 | $ 1,537 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 30,582 | $ 26,137 | $ 102,239 | $ 44,930 |
Other comprehensive income: | ||||
Foreign currency translation adjustment, net of tax impact | 43 | 61 | 25 | 64 |
Comprehensive income | $ 30,625 | $ 26,198 | $ 102,264 | $ 44,994 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash | $ 2,205 | $ 957 |
Accounts receivable, net of allowance for credit losses of $2,600 in 2023 and $2,300 in 2022 | 191,676 | 169,937 |
Rental equipment, at cost: | ||
Relocatable modular buildings | 1,457,984 | 1,123,268 |
Electronic test equipment | 390,832 | 398,267 |
Rental equipment, gross | 1,848,816 | 1,521,535 |
Less: accumulated depreciation | (553,166) | (531,218) |
Rental equipment, net | 1,295,650 | 990,317 |
Property, plant and equipment, net | 146,624 | 138,713 |
Prepaid expenses and other assets | 81,967 | 69,837 |
Intangible assets, net | 65,607 | 35,431 |
Goodwill | 325,354 | 106,403 |
Assets of discontinued operations | 196,249 | |
Total assets | 2,109,083 | 1,707,844 |
Liabilities: | ||
Notes payable | 672,631 | 413,742 |
Accounts payable and accrued liabilities | 219,611 | 151,208 |
Deferred income | 106,523 | 82,417 |
Deferred income taxes, net | 229,749 | 203,361 |
Liabilities of discontinued operations | 53,171 | |
Total liabilities | 1,228,514 | 903,899 |
Shareholders’ equity: | ||
Common stock, no par value - Authorized 40,000 shares Issued and outstanding - 24,485 shares as of June 30, 2023 and 24,388 shares as of December 31, 2022 | 107,362 | 110,080 |
Retained earnings | 773,260 | 693,943 |
Accumulated other comprehensive income (loss) | (53) | (78) |
Total shareholders’ equity | 880,569 | 803,945 |
Total liabilities and shareholders’ equity | $ 2,109,083 | $ 1,707,844 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 2,600 | $ 2,300 |
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 24,485,000 | 24,388,000 |
Common Stock, shares outstanding | 24,485,000 | 24,388,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] |
Balance at Dec. 31, 2021 | $ 732,021 | $ 108,610 | $ 623,465 | $ (54) |
Balance, Shares at Dec. 31, 2021 | 24,260,000 | |||
Net income | 18,793 | 18,793 | ||
Share-based compensation | 1,760 | $ 1,760 | ||
Common stock issued under stock Plans, net of shares withheld for employee taxes, Shares | 75,000 | |||
Taxes paid related to net share settlement of stock awards | (3,605) | $ (3,605) | ||
Dividends accrued of $0.465, $0.465, $0.455, $0.455 per share for three months ended March 31, 2023, June 30, 2023, and three months ended March 31, 2022, June 30, 2022 | (11,084) | (11,084) | ||
Other comprehensive income (loss) | 3 | 3 | ||
Balance at Mar. 31, 2022 | 737,888 | $ 106,765 | 631,174 | (51) |
Balance, Shares at Mar. 31, 2022 | 24,335,000 | |||
Balance at Dec. 31, 2021 | 732,021 | $ 108,610 | 623,465 | (54) |
Balance, Shares at Dec. 31, 2021 | 24,260,000 | |||
Net income | 44,930 | |||
Balance at Jun. 30, 2022 | 752,034 | $ 105,894 | 646,130 | 10 |
Balance, Shares at Jun. 30, 2022 | 24,378,000 | |||
Balance at Mar. 31, 2022 | 737,888 | $ 106,765 | 631,174 | (51) |
Balance, Shares at Mar. 31, 2022 | 24,335,000 | |||
Net income | 26,137 | 26,137 | ||
Share-based compensation | 1,652 | $ 1,652 | ||
Common stock issued under stock Plans, net of shares withheld for employee taxes, Shares | 43,000 | |||
Taxes paid related to net share settlement of stock awards | (2,523) | $ (2,523) | ||
Dividends accrued of $0.465, $0.465, $0.455, $0.455 per share for three months ended March 31, 2023, June 30, 2023, and three months ended March 31, 2022, June 30, 2022 | (11,181) | (11,181) | ||
Other comprehensive income (loss) | 61 | 61 | ||
Balance at Jun. 30, 2022 | 752,034 | $ 105,894 | 646,130 | 10 |
Balance, Shares at Jun. 30, 2022 | 24,378,000 | |||
Balance at Dec. 31, 2022 | $ 803,945 | $ 110,080 | 693,943 | (78) |
Balance, Shares at Dec. 31, 2022 | 24,388,000 | 24,388,000 | ||
Net income | $ 71,657 | 71,657 | ||
Share-based compensation | 1,493 | $ 1,493 | ||
Common stock issued under stock Plans, net of shares withheld for employee taxes, Shares | 78,000 | |||
Taxes paid related to net share settlement of stock awards | (6,086) | $ (6,086) | ||
Dividends accrued of $0.465, $0.465, $0.455, $0.455 per share for three months ended March 31, 2023, June 30, 2023, and three months ended March 31, 2022, June 30, 2022 | (11,453) | (11,453) | ||
Other comprehensive income (loss) | (18) | (18) | ||
Balance at Mar. 31, 2023 | 859,538 | $ 105,487 | 754,147 | (96) |
Balance, Shares at Mar. 31, 2023 | 24,466,000 | |||
Balance at Dec. 31, 2022 | $ 803,945 | $ 110,080 | 693,943 | (78) |
Balance, Shares at Dec. 31, 2022 | 24,388,000 | 24,388,000 | ||
Net income | $ 102,239 | |||
Balance at Jun. 30, 2023 | $ 880,569 | $ 107,362 | 773,260 | (53) |
Balance, Shares at Jun. 30, 2023 | 24,485,000 | 24,485,000 | ||
Balance at Mar. 31, 2023 | $ 859,538 | $ 105,487 | 754,147 | (96) |
Balance, Shares at Mar. 31, 2023 | 24,466,000 | |||
Net income | 30,582 | 30,582 | ||
Share-based compensation | 1,889 | $ 1,889 | ||
Common stock issued under stock Plans, net of shares withheld for employee taxes, Shares | 19,000 | |||
Taxes paid related to net share settlement of stock awards | (14) | $ (14) | ||
Dividends accrued of $0.465, $0.465, $0.455, $0.455 per share for three months ended March 31, 2023, June 30, 2023, and three months ended March 31, 2022, June 30, 2022 | (11,469) | (11,469) | ||
Other comprehensive income (loss) | 43 | 43 | ||
Balance at Jun. 30, 2023 | $ 880,569 | $ 107,362 | $ 773,260 | $ (53) |
Balance, Shares at Jun. 30, 2023 | 24,485,000 | 24,485,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Cash dividends declared per share | $ 0.465 | $ 0.455 | ||
Retained Earnings [Member] | ||||
Cash dividends declared per share | $ 0.465 | $ 0.465 | $ 0.455 | $ 0.455 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash Flows from Operating Activities: | ||
Net income | $ 102,239 | $ 44,930 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 54,958 | 55,355 |
Deferred income taxes | (39,486) | (5,815) |
Provision for credit losses | 1,400 | 49 |
Share-based compensation | 3,382 | 3,412 |
Gain on sale of discontinued operations | (61,513) | |
Gain on sale of used rental equipment | (14,250) | (16,093) |
Foreign currency exchange (gain) loss | (208) | 168 |
Amortization of debt issuance costs | 4 | 9 |
Change in: | ||
Accounts receivable | (1,116) | (7,879) |
Prepaid expenses and other assets | (8,504) | 10,855 |
Accounts payable and accrued liabilities | 25,255 | (73) |
Deferred income | 9,290 | 18,835 |
Net cash provided by operating activities | 71,451 | 82,043 |
Cash Flows from Investing Activities: | ||
Proceeds from sale of discontinued operations | 268,012 | |
Purchases of rental equipment | (128,088) | (94,820) |
Purchases of property, plant and equipment | (11,229) | (6,594) |
Cash paid for acquisition of businesses | (456,312) | |
Proceeds from sales of used rental equipment | 27,410 | 31,830 |
Net cash used in investing activities | (300,207) | (69,584) |
Cash Flows from Financing Activities: | ||
Net borrowings under bank lines of credit | 258,885 | 15,000 |
Taxes paid related to net share settlement of stock awards | (6,100) | (6,128) |
Payment of dividends | (22,782) | (22,083) |
Net cash provided by (used in) financing activities | 230,003 | (13,211) |
Effect of foreign currency exchange rate changes on cash | 1 | 135 |
Net increase (decrease) in cash | 1,248 | (617) |
Cash balance, beginning of period | 957 | 1,491 |
Cash balance, end of period | 2,205 | 874 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid, during the period | 16,802 | 5,821 |
Net income taxes paid, during the period | 6,931 | 17,078 |
Dividends accrued during the period, not yet paid | 11,937 | 11,009 |
Rental equipment acquisitions, not yet paid | $ 7,612 | $ 6,906 |
Condensed Consolidated Financia
Condensed Consolidated Financial Information | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Condensed Consolidated Financial Information | NOTE 1. CONDENSED CONSOLIDATED FINANCIAL INFORMATION The condensed consolidated financial statements for the six months ended June 30, 2023 and 2022 have not been audited, but in the opinion of management, all adjustments (consisting of normal recurring accruals, consolidating and eliminating entries) necessary for the fair presentation of the consolidated financial position, results of operations and cash flows of McGrath RentCorp (the “Company”) have been made. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to those rules and regulations. The consolidated results for the three and six months ended June 30, 2023, should not be considered as necessarily indicative of the consolidated results for the entire fiscal year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K, filed with the SEC on February 22, 2023 for the year ended December 31, 2022 (the “2022 Annual Report”). |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS On March 27, 2023, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2023-01, Leases (Topic 842): Common Control Arrangements, which requires a lessee involved in a common control lease agreement to amortize leasehold improvements over the useful life of the improvements to the common control group, regardless of the lease term, as long as the lessee controls the use of the underlying asset. If the lessor obtains the right to control the use of the underlying asset through a lease with another entity not within the same control group, the amortization period cannot exceed the period of the common control group. Furthermore, the ASU requires the accounting for a transfer between entities under common control through an adjustment to equity when the lessee no longer controls the use of the underlying asset. The ASU is effective for fiscal years beginning after December 15, 2023. The Company does not expect the adoption of this ASU to have a material impact on the Company's consolidated financial statements. |
Implemented Accounting Pronounc
Implemented Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Implemented Accounting Pronouncements | NOTE 3. IMPLEMENTED ACCOUNTING PRONOUNCEMENTS Effective January 1, 2023, the Company adopted the ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates the separate recognition and measurement guidance for troubled debt restructurings by creditors. In addition, the ASU requires disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of FASB ASC 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The adoption of this new guidance did not have a material impact on the Company's consolidated financial statements. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2023 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 4. ACQUISITIONS On February 1, 2023, the Company completed the acquisition of Vesta Housing Solutions Holdings, Inc. (“Vesta Modular”), a portfolio company of Kinderhook Industries, for $ 437.2 million cash consideration on the closing date, which included certain adjustments, including net working capital and certain qualified capital expenditures. In connection with the acquisition, the Company purchased a representation and warranty insurance policy to provide certain recourse in the event of breaches of representations and warranties of Vesta Modular and the seller of Vesta Modular under the stock purchase agreement. Vesta Modular is a leading provider of temporary and permanent modular space solutions serving customers between its modular leasing and modular construction divisions. The acquisition was accounted for as a purchase of a “business” in accordance with criteria in ASC 805, Business Combinations , using the purchase method of accounting. Under the purchase method of accounting, the total purchase price is assigned to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values on the closing date. The excess of the purchase price over those fair values is recorded as goodwill. The financial results of Vesta Modular were a part of the Mobile Modular segment since February 1, 2023, including $ 9.5 million of transaction costs. On March 1, 2023, the Company completed the purchase of assets of Jerald R. Brekke, Inc., DBA Brekke Storage ("Brekke Storage"), for a total purchase price of $ 16.4 million. Brekke Storage is a regional provider of portable storage solutions in the Colorado market. The acquisition expanded the Mobile Modular Portable Storage fleet by approximately 2,700 units and provided a new regional operation to serve the Colorado market. The acquisition was accounted for as a purchase of a “business” in accordance with criteria in ASC 805 using the purchase method of accounting. The financial results of Brekke Storage were a part of the Mobile Modular segment since March 1, 2023, including $ 0.2 million of transaction costs. On April 1, 2023, the Company completed the purchase of assets of Dixie Temporary Storage, LLC ("Dixie Storage"), for a purchase price of $ 4.9 million. Dixie Storage is a regional provider of portable storage solutions in the South Carolina market and is highly complementary to the Company's portable storage business segment. The acquisition expanded the Mobile Modular Portable Storage fleet by approximately 800 units and provided a new regional operation to serve the South Carolina market. The acquisition was accounted for as a purchase of a “business” in accordance with criteria in ASC 805, Business Combinations , using the purchase method of accounting. The financial results of Dixie Storage were a part of the Mobile Modular segment since April 1, 2023, including $ 0.1 million of transaction costs. The following tables summarize the preliminary purchase price allocations reflecting estimated fair values of assets acquired and liabilities assumed in the Vesta Modular, Brekke Storage and Dixie Storage acquisitions, with excess amounts allocated to goodwill. The estimated fair values of the assets acquired and liabilities assumed at the acquisition date are determined based on preliminary valuations and analyses. Accordingly, the Company has made provisional estimates for the assets acquired and liabilities assumed. The valuation of intangible assets acquired is based on certain valuation assumptions including cash flow projections, discount rates, contributory asset charges and other valuation model inputs. The valuation of tangible long-lived assets acquired is dependent upon various analyses including an analysis of the condition and estimated remaining economic lives of the assets acquired. Vesta Modular: (dollar amounts in thousands) Rental equipment $ 226,753 Intangible assets: Goodwill 213,313 Customer relationships 26,000 Non-compete 7,100 Trade name 800 Cash 11 Accounts receivable 22,401 Property, plant and equipment 1,437 Prepaid expenses and other assets 3,550 Accounts payable and accrued liabilities ( 27,558 ) Deferred income ( 14,273 ) Deferred income taxes ( 22,324 ) Total purchase price $ 437,210 Brekke Storage: (dollar amounts in thousands) Rental equipment $ 10,798 Intangible assets: Goodwill 4,083 Customer relationships 949 Non-compete 59 Property, plant and equipment 875 Deferred income ( 382 ) Total purchase price $ 16,382 Dixie Storage: (dollar amounts in thousands) Rental equipment $ 2,758 Intangible assets: Goodwill 1,555 Customer relationships 259 Non-compete 22 Property, plant and equipment 318 Deferred income ( 161 ) Total purchase price $ 4,751 The value assigned to identifiable intangible assets was determined based on discounted estimated future cash flows associated with such assets to their present value. The combined acquired goodwill of $ 219.0 million reflects the strategic fit of Vesta Modular, Brekke Storage and Dixie Storage with the Company’s modular and portable storage business operations. The Company amortizes the acquired customer relationships over their expected useful lives of 11 years for Vesta Modular, 8 years for Brekke Storage and 9 years for Dixie Storage. The expected useful life for the non-compete agreements is 5 years. The trade name intangible acquired from the Vesta Modular acquisition will be amortized over it's useful life of nine months . Goodwill is expected to have an indefinite life and will be subject to future impairment testing. The goodwill is deductible for tax purposes over 15 years. The following unaudited pro forma financial information shows the combined results of continuing operations of the Company and Vesta Modular as if the acquisition occurred as of the beginning of the periods presented. The pro forma results include the effects of the amortization of the purchased intangible assets and depreciation expense of acquired rental equipment valuation step up, interest expense on the debt incurred to finance the acquisitions. A pro forma adjustment has been made to reflect the income taxes that would have been recorded at the combined federal and state statutory rate of 26.5 % on the acquisitions’ combined net income. The pro forma results for the six months ended June 30, 2023 and 2022, have been adjusted to include transaction related costs. This pro forma data is presented for informational purposes only and does not purport to be indicative of the results of the future operations or the results that would have occurred had the acquisitions taken place in the periods noted below: (Unaudited) Six months ended June 30, (dollar amounts in thousands, except for per share amounts) 2023 2022 Pro-forma total revenues $ 374,391 $ 339,638 Pro-forma net income $ 39,174 $ 34,781 Pro-forma basic earnings per share $ 1.60 $ 1.43 Pro-forma diluted earnings per share $ 1.60 $ 1.42 Vesta Modular Actual total revenues $ 47,257 Actual net income $ 9,016 Actual basic earnings per share $ 0.37 Actual diluted earnings per share $ 0.37 |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 5. DISCONTINUED OPERATIONS On February 1, 2023, the Company completed the sale of Adler Tank Rentals, LLC to Ironclad Environmental Solutions, Inc. ("Ironclad"), a portfolio company of Kinderhook Industries, for a sale price of $ 268.0 million, which included an additional payment of $ 3.6 million for the final net working capital purchase price adjustment during the quarter ended June 30, 2023. The total transaction costs incurred from the divestiture was $ 8.9 million, with $ 6.7 million incurred during the six months ended June 2023, and $ 2.2 million incurred during the year ended December 31, 2022. The divestiture of the Company's Adler Tanks business represents the Company's strategic shift to concentrate its operations on its core modular and storage businesses. The sale price was subject to certain adjustments, including net working capital, certain qualified capital expenditures and certain transaction expenses to be borne by the Company. In connection with the sale, the Company entered into a number of ancillary agreements, including an escrow agreement associated with net working capital adjustments, a restricted covenant agreement, a transition services agreement, and a number of leases whereby Ironclad or one of its affiliates would be a lessee to certain properties owned by the Company that the Adler Tanks business would continue to utilize after the sale. These ancillary agreements do not provide for continued involvement by the Company in Adler Tanks. In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations and ASC 360 , Property, Plant and Equipment, the Company determined that the criteria for the presentation of discontinued operations and held-for-sale, respectively, were met during the first quarter of 2023. The following table presents the results of Adler Tanks as reported in income from discontinued operations within the condensed consolidated statements of income for the six months ended June 30, 2023 and 2022: (dollar amounts in thousands) Six Months Ended 2023 2022 Revenues Rental $ 6,520 $ 30,148 Rental related services 2,584 12,058 Rental operations 9,104 42,206 Sales 269 1,258 Other 65 519 Total revenues 9,438 43,983 Costs and Expenses Direct costs of rental operations: Depreciation of rental equipment 1,325 7,994 Rental related services 2,020 9,456 Other 1,270 6,278 Total direct costs of rental operations 4,614 23,728 Costs of sales 159 920 Total costs of revenues 4,773 24,648 Gross Profit Rental 3,926 15,876 Rental related services 564 2,602 Rental operations 4,490 18,478 Sales 110 338 Other 65 519 Total gross profit 4,665 19,335 Selling and administrative expenses 2,583 13,501 Income from operations 2,082 5,834 Interest expense allocation ( 374 ) ( 1,119 ) Income from discontinued operations before provision for income taxes 1,709 4,715 Provision for income taxes from discontinued operations 453 987 Income from discontinued operations $ 1,256 $ 3,728 Other Selected Information Adjusted EBITDA $ 3,682 $ 15,327 The following table presents the carrying value of the divested business' assets and liabilities as presented within assets and liabilities of discontinued operations on the condensed consolidated balance sheets as of December 31, 2022: December 31, (in thousands) 2022 Assets Accounts receivable, net of allowance for credit losses of $ 450 $ 20,086 Rental equipment, net 137,738 Property, plant and equipment, net 6,632 Prepaid expenses and other assets 191 Intangible assets, net 5,700 Goodwill 25,902 Total assets of discontinued operations $ 196,249 Liabilities Accounts payable and accrued liabilities $ 9,621 Deferred income taxes, net 43,550 Total liabilities of discontinued operations $ 53,171 For the six months ended June 30, 2023 and 2022, significant operating and investing items related to Adler Tanks were as follows: June 30, June 30, (in thousands) 2023 2022 Operating activities of discontinued operations: Depreciation and amortization $ 1,457 $ 8,864 Gain on sale of used rental equipment ( 111 ) ( 338 ) Investing activities of discontinued operations: Proceeds from sales of used rental equipment 269 1,258 Purchases of rental equipment ( 25 ) ( 1,410 ) Purchases of property, plant and equipment ( 40 ) ( 83 ) The following table presents the reconciliation of income from discontinued operations to Adjusted EBITDA for the six months ended June 30, 2023 and 2022: June 30, June 30, (in thousands) 2023 2022 Income from discontinued operations $ 1,256 $ 3,728 Provision for income taxes from discontinued operations 453 987 Interest expense 374 1,119 Depreciation and amortization 1,457 8,864 EBITDA 3,540 14,698 Share-based compensation 118 629 Transaction costs 24 — Adjusted EBITDA from discontinued operations $ 3,682 $ 15,327 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | NOTE 6. REVENUE RECOGNITION The Company’s accounting for revenues is governed by two accounting standards. The majority of the Company’s revenues are considered lease or lease related and are accounted for in accordance with Accounting Standards Codification (ASC) 842, Leases. Revenues determined to be non-lease related are accounted for in accordance with ASC 606, Revenue from Contracts with Customers. The Company accounts for revenues when approval and commitment from both parties have been obtained, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company typically recognizes non-lease related revenues at a point in time because the customer does not simultaneously consume the benefits of the Company’s promised goods and services, or performance obligations, and obtains control when delivery and installation are complete. For contracts that have multiple performance obligations, the transaction price is allocated to each performance obligation in the contract based on the Company’s best estimate of the standalone selling prices of each distinct performance obligation in the contract. The standalone selling price is typically determined based upon the expected cost plus an estimated margin of each performance obligation. Revenue from contracts that satisfies the criteria for over time recognition is recognized as work is performed by using the ratio of costs incurred to estimated total contract costs for each contract. The majority of revenue for these contracts is derived from long-term projects which typically span multiple quarters . The timing of revenue recognition, billings, and cash collections results in billed contract receivables and contract assets on the Company's consolidated balance sheet. In the Company’s contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Billings can occur subsequent to revenue recognition, resulting in contract assets, or in advance, resulting in contract liabilities. These contract assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period . The contract liabilities included in Deferred income on the Company’s consolidated balance sheet totaled $ 49.0 million and $ 27.4 million at June 30, 2023 and December 31, 2022. Sales revenues totaling $ 6.6 million and $ 11.0 million were recognized during the three and six months ended June 30, 2023, respectively, which were included in the contract liability balance at December 31, 2022. For certain modular building sales, the customer retains a small portion of the contract price until full completion of the contract, or revenue is recognizable prior to customer billing, which results in revenue earned in excess of billings. These unbilled contract assets are included in Accounts receivable on the Company’s consolidated balance sheet and totaled $ 5.7 million and $ 0.6 million at June 30, 2023 and December 31, 2022, respectively. The Company generally rents and sells to customers on 30 day payment terms. The Company does not typically offer variable payment terms or accept non-monetary consideration. Amounts billed and due from the Company’s customers are classified as Accounts receivable on the Company’s consolidated balance sheet. For certain sales of modular buildings, progress payments from the customer are received during the manufacturing of new equipment, or the preparation of used equipment. The advance payments are not considered a significant financing component because the payments are used to meet working capital needs during the contract and to protect the Company from the customer failing to adequately complete their obligations under the contract. Lease Revenues Rental revenues from operating leases are recognized on a straight-line basis over the term of the lease for all operating segments. Rental billings for periods extending beyond period end are recorded as deferred income and are recognized in the period earned. Rental related services revenues are primarily associated with relocatable modular buildings. For modular building leases, rental related services revenues for modifications, delivery, installation, dismantle and return delivery are lease related because the payments are considered minimum lease payments that are an integral part of the negotiated lease agreement with the customer. These revenues are recognized on a straight-line basis over the term of the lease. Certain leases are accounted for as finance leases. For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a basis which results in a constant rate of return on the unrecovered lease investment. As of the six months ended June 30, 2023, the Company’s future minimum lease payments to be received under non-cancelable finance leases was $ 4.4 million. Of the total investment in sales-type leases, non-current future minimum lease payments are expected to be $ 1.1 million in 2024, $ 0.7 million in 2025, and $ 0.2 million in 2026. The Company’s assessment of current expected losses on these receivables was not material and no credit loss expense was provided as of the six months ended June 30, 2023. Other revenues include interest income on finance leases and rental income on facility leases. In the three and six months ended June 30, 2023, the Company’s lease revenues were $ 140.8 million and $ 277.4 million, respectively, consisting of $ 139.7 million and $ 275.8 million of operating lease revenues, respectively, and $ 1.1 million and $ 1.6 million of finance lease revenues, respectively. The Company has entered into finance leases to finance certain equipment sales to customers. The lease agreements have a bargain purchase option at the end of the lease term. For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a straight-line basis, which results in a constant rate of return on the unrecovered lease investment. The Company’s finance lease revenues for the three and six months ended June 30, 2023 include $ 1.0 million and $ 1.4 million of sales revenues, respectively, and $ 0.1 million and $ 0.2 million of interest income, respectively. Non-Lease Revenues Non-lease revenues are recognized in the period when control of the performance obligation is transferred, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. For portable storage containers and electronic test equipment, rental related services revenues for delivery and return delivery are considered non-lease revenues. Sales revenues are typically recognized at a point in time, which occurs upon the completion of delivery, installation and acceptance of the equipment by the customer. Accounting for non-lease revenues requires judgment in determining the point in time the customer gains control of the equipment and the appropriate accounting period to recognize revenue. Sales taxes charged to customers are reported on a net basis and are excluded from revenues and expenses. The following table disaggregates the Company’s revenues by lease (within the scope of ASC 842) and non-lease revenues (within the scope of ASC 606) and the underlying service provided for the three and six months ended June 30, 2023 and 2022: (in thousands) Mobile TRS- Enviroplex Adler Consolidated Three Months Ended June 30, 2023 Leasing $ 110,419 $ 30,337 $ — $ — $ 140,756 Non-lease: Rental related services 13,908 563 — — 14,471 Sales 39,356 6,581 923 — 46,860 Other 579 364 — — 943 Total non-lease 53,843 7,508 923 — 62,274 Total revenues $ 164,262 $ 37,845 $ 923 $ — $ 203,030 2022 Leasing $ 79,671 $ 30,909 $ — $ 16,244 $ 126,824 Non-lease: Rental related services 6,883 683 — 6,636 14,202 Sales 24,816 5,462 4,650 601 35,529 Other 7 287 — 182 476 Total non-lease 31,706 6,432 4,650 7,419 50,207 Total revenues $ 111,377 $ 37,341 $ 4,650 $ 23,663 $ 177,031 Six Months Ended June 30, 2023 Leasing $ 210,078 $ 60,677 $ — $ 6,612 $ 277,367 Non-lease: Rental related services 22,882 1,289 — 2,557 26,728 Sales 56,961 11,204 1,864 269 70,298 Other 998 795 — — 1,793 Total non-lease 80,841 13,288 1,864 2,826 98,819 Total revenues $ 290,919 $ 73,965 $ 1,864 $ 9,438 $ 376,186 2022 Leasing $ 154,265 $ 60,319 $ — $ 30,723 $ 245,307 Non-lease: Rental related services 12,533 1,235 — 11,821 25,589 Sales 35,191 8,741 5,567 1,258 50,757 Other 33 537 — 181 751 Total non-lease 47,757 10,513 5,567 13,260 77,097 Total revenues $ 202,022 $ 70,832 $ 5,567 $ 43,983 $ 322,404 Customer returns of rental equipment prior to the end of the rental contract term are typically billed a cancellation fee, which is recorded as rental revenue in the period billed. Sales of new relocatable modular buildings, portable storage containers, electronic test equipment and related accessories and liquid and solid containment tanks and boxes not manufactured by the Company are typically covered by warranties provided by the manufacturer of the products sold. The Company typically provides limited 90 -day warranties for certain sales of used rental equipment and one-year warranties on equipment manufactured by Enviroplex. Although the Company’s policy is to provide reserves for warranties when required for specific circumstances, warranty costs have not been significant to date. The Company’s incremental cost of obtaining lease contracts, which consists of salesperson commissions, are deferred and amortized over the initial lease term for modular leases. Incremental costs for obtaining a contract for all other operating segments are expensed in the period incurred because the lease term is typically less than 12 months. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 7. EARNINGS PER SHARE Basic earnings per share (“EPS”) is computed as net income divided by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS is computed assuming conversion of all potentially dilutive securities including the dilutive effect of stock options, unvested restricted stock awards and other potentially dilutive securities. The table below presents the weighted-average number of shares of common stock used to calculate basic and diluted earnings per share: Three Months Ended Six Months Ended (in thousands) 2023 2022 2023 2022 Weighted-average number of shares of common stock for 24,479 24,360 24,448 24,323 Effect of potentially dilutive securities from equity-based 33 149 79 199 Weighted-average number of shares of common stock for 24,512 24,509 24,527 24,522 There were 697 anti-dilutive securities excluded from the computation of diluted earnings per share for the six months ended June 30, 2023, and 7,315 anti-dilutive securities excluded from the computation of diluted earnings per share for the same period in 2022. The Company has in the past made purchases of shares of its common stock from time to time in over-the-counter market (NASDAQ) transactions, through privately negotiated, large block transactions and through a share repurchase plan, in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. In August 2015, the Company’s Board of Directors authorized the Company to repurchase up to 2,000,000 shares of the Company's outstanding common stock (the “Repurchase Plan”). The amount and time of the specific repurchases are subject to prevailing market conditions, applicable legal requirements and other factors, including management’s discretion. All shares repurchased by the Company are canceled and returned to the status of authorized but unissued shares of common stock. There can be no assurance that any authorized shares will be repurchased, and the Repurchase Plan may be modified, extended or terminated by the Company’s Board of Directors at any time. There were no shares repurchased during the three and six months ended June 30, 2023 and 2022. As of June 30, 2023, 1,309,805 shares remained authorized for repurchase under the Repurchase Plan. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 8. GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill were as follows: (dollar amounts in thousands) Mobile Modular Adler Tanks (Discontinued) Total Balance at December 31, 2021 $ 106,491 $ 25,902 $ 132,393 Changes to Design Space purchase accounting ( 88 ) — ( 88 ) Balance at December 31, 2022 106,403 25,902 132,305 Goodwill acquired through business combination 218,951 — 218,951 Derecognition of goodwill divested — ( 25,902 ) ( 25,902 ) Balance at June 30, 2023 $ 325,354 $ — $ 325,354 Intangible assets consist of the following: (dollar amounts in thousands) Estimated Average remaining life in years Cost Accumulated amortization Net book value June 30, 2023 Customer relationships 8 to 11 7.4 $ 68,678 $( 12,852 ) $ 55,826 Non-compete agreements 5 4.0 10,477 ( 2,085 ) 8,392 Trade name 0.75 to 8 4.2 2,000 ( 782 ) 1,218 Total amortizing 81,155 ( 15,719 ) 65,436 Trade name - non-amortizing Indefinite 171 — 171 Total $ 81,326 $( 15,719 ) $ 65,607 December 31, 2022 Customer relationships 8 to 11 6.3 $ 50,284 $( 18,098 ) $ 32,186 Non-compete agreements 5 3.2 3,296 ( 1,159 ) 2,137 Customer backlog — — 1,900 ( 1,900 ) — Trade name 8 6.3 1,200 ( 263 ) 937 Total amortizing 56,680 ( 21,420 ) 35,260 Trade name - non-amortizing Indefinite 5,871 — 5,871 Total $ 62,551 $( 21,420 ) $ 41,131 The Company assesses potential impairment of its goodwill and intangible assets when there is evidence that events or circumstances have occurred that would indicate the recovery of an asset’s carrying value is unlikely. The Company also assesses potential impairment of its goodwill and intangible assets with indefinite lives on an annual basis regardless of whether there is evidence of impairment. If indicators of impairment were to be present in intangible assets used in operations and future discounted cash flows were not expected to be sufficient to recover the asset’s carrying amount, an impairment loss would be charged to expense in the period identified. The amount of an impairment loss that would be recognized is the excess of the asset’s carrying value over its fair value. Factors the Company considers important, which may cause impairment include, among others, significant changes in the manner of use of the acquired asset, negative industry or economic trends, and significant underperformance relative to historical or projected operating results. The Company last conducted a qualitative analysis of its goodwill and intangible assets in the fourth quarter 2022, with no indicators of impairment. In addition, no impairment triggering events occurred during the six months ended June 30, 2023. Determining fair value of a reporting unit is judgmental and involves the use of significant estimates and assumptions. The Company bases its fair value estimates on assumptions that it believes are reasonable but are uncertain and subject to changes in market conditions. Intangible assets with finite useful lives are amortized over their respective useful lives. Amortization expense in the six months ended June 30, 2023 and 2022, was $ 5.0 million and $ 3.0 million, respectively. Based on the carrying values at June 30, 2023 and assuming no subsequent impairment of the underlying assets, the amortization expense is expected to be $ 5.3 million for the remainder of fiscal year 2023, $ 9.8 million in 2024 and 2025, $ 9.3 million in 2026, $ 9.1 million in 2027 and $ 7.8 million in 2028. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting | NOTE 9. SEGMENT REPORTING The Company historically operated four reportable segments and divested it's Adler Tanks business segment on February 1, 2023, see Note 5 to the consolidated financial statements for more information on the divestiture of Adler Tanks. The three reportable segments from continuing operations are (1) its modular building and portable storage container rental segment (“Mobile Modular”); (2) its electronic test equipment segment (“TRS-RenTelco”); and (3) its classroom manufacturing segment selling modular buildings used primarily as classrooms in California (“Enviroplex”). The operations of each of these segments are described in Part I – Item 1, “Business,” and the accounting policies of the segments are described in “Note 1 – Summary of Significant Accounting Policies” in the Company’s 2022 Annual Report. Management focuses on several key measures to evaluate and assess each segment’s performance, including rental revenue growth, gross profit and gross margins, income from operations, income before provision for income taxes and adjusted EBITDA. Excluding interest expense, allocations of revenue and expense not directly associated with one of these segments are generally allocated to Mobile Modular and TRS-RenTelco based on their pro-rata share of direct revenues. Interest expense is allocated amongst Mobile Modular and TRS-RenTelco based on their pro-rata share of average rental equipment at cost, intangible assets, accounts receivable, deferred income and customer security deposits. The Company does not report total assets by business segment. Summarized financial information for the six months ended June 30, 2023 and 2022 for the Company’s reportable segments and discontinued operations are shown in the following table: (dollar amounts in thousands) Mobile TRS- Enviroplex 1 Adler 3 Consolidated Six Months Ended June 30, 2023 Rental revenues $ 170,370 $ 57,717 $ — $ 6,520 $ 234,607 Rental related services revenues 59,442 1,547 — 2,584 63,573 Sales and other revenues 61,107 14,701 1,864 334 78,006 Total revenues 290,919 73,965 1,864 9,438 376,186 Depreciation of rental equipment 19,729 24,701 — 1,325 45,755 Gross profit 140,226 31,503 248 4,665 176,642 Selling and administrative expenses 84,810 16,577 3,137 2,583 107,106 Income (loss) from operations 55,416 14,926 ( 2,889 ) 2,082 69,536 Interest (expense) income allocation ( 14,718 ) ( 3,801 ) 1,110 ( 374 ) ( 17,783 ) Income (loss) before provision for income taxes 40,698 11,333 ( 1,779 ) 1,709 51,961 Adjusted EBITDA 99,269 42,173 ( 2,724 ) 3,682 142,400 Rental equipment acquisitions 105,575 16,906 — — 122,481 Accounts receivable, net (period end) 161,927 26,138 3,611 — 191,676 Rental equipment, at cost (period end) 1,457,984 390,832 — — 1,848,816 Rental equipment, net book value (period end) 1,132,778 162,872 — — 1,295,650 Utilization (period end) 2 78.8 % 58.3 % Average utilization 2 79.4 % 58.7 % 2022 Rental revenues $ 126,487 $ 58,230 $ — $ 30,148 $ 214,865 Rental related services revenues 39,594 1,484 — 12,058 53,136 Sales and other revenues 35,941 11,118 5,567 1,777 54,403 Total revenues 202,022 70,832 5,567 43,983 322,404 Depreciation of rental equipment 15,582 24,362 — 7,994 47,938 Gross profit 92,820 30,826 1,345 19,335 144,326 Selling and administrative expenses 50,447 13,204 2,763 13,501 79,915 Income (loss) from operations 42,373 17,622 ( 1,418 ) 5,834 64,411 Interest (expense) income allocation ( 3,821 ) ( 1,232 ) 351 ( 1,119 ) ( 5,821 ) Income (loss) before provision for income taxes 38,552 16,222 ( 1,067 ) 4,715 58,422 Adjusted EBITDA 66,178 42,781 ( 1,276 ) 15,327 123,010 Rental equipment acquisitions 51,575 42,791 — 1,610 95,976 Accounts receivable, net (period end) 118,865 24,796 6,420 17,248 167,329 Rental equipment, at cost (period end) 1,075,898 389,383 — 309,010 1,774,291 Rental equipment, net book value (period end) 776,003 177,038 — 144,484 1,097,525 Utilization (period end) 2 78.6 % 65.3 % Average utilization 2 77.6 % 64.6 % 1. Gross Enviroplex sales revenues were $ 1,871 and $ 6,423 for the six months ended June 30, 2023 and 2022, respectively. There were $ 7 inter-segment sales to Mobile Modular in the six months ended June 30, 2023 and $ 856 inter-segment sales during the same period in 2022, which required elimination in consolidation. 2. Utilization is calculated each month by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding accessory equipment, and new equipment inventory. The Average utilization for the period is calculated using the average costs of rental equipment. 3. The financial results of Adler Tanks included in this table are through the date of the business divestiture, which occurred on February 1, 2023. No single customer accounted for more than 10% of total revenues for the six months ended June 30, 2023 and 2022. Revenues from foreign country customers accounted for 3 % and 4 % of the Company’s total revenues for the same periods, respectively. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10. SUBSEQUENT EVENT On July 1, 2023, the Company completed the purchase of assets of Inland Leasing and Storage ("Inland Leasing"), for a purchase price of $ 3.8 million. Inland Leasing is a regional provider of portable storage solutions in the Colorado market and is highly complementary to the Company's portable storage business segment. The acquisition grew the Mobile Modular Portable Storage fleet by approximately 600 units, which will further support the new regional operation acquired from the Brekke Storage acquisition. The acquisition will be accounted for as a purchase of "assets" in accordance with criteria in ASC 805, Business Combinations. Incremental transaction costs associated with the asset purchase were not significant. |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Business Combinations [Abstract] | |
Summary of Preliminary Purchase Price Allocations Reflecting Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following tables summarize the preliminary purchase price allocations reflecting estimated fair values of assets acquired and liabilities assumed in the Vesta Modular, Brekke Storage and Dixie Storage acquisitions, with excess amounts allocated to goodwill. Vesta Modular: (dollar amounts in thousands) Rental equipment $ 226,753 Intangible assets: Goodwill 213,313 Customer relationships 26,000 Non-compete 7,100 Trade name 800 Cash 11 Accounts receivable 22,401 Property, plant and equipment 1,437 Prepaid expenses and other assets 3,550 Accounts payable and accrued liabilities ( 27,558 ) Deferred income ( 14,273 ) Deferred income taxes ( 22,324 ) Total purchase price $ 437,210 Brekke Storage: (dollar amounts in thousands) Rental equipment $ 10,798 Intangible assets: Goodwill 4,083 Customer relationships 949 Non-compete 59 Property, plant and equipment 875 Deferred income ( 382 ) Total purchase price $ 16,382 Dixie Storage: (dollar amounts in thousands) Rental equipment $ 2,758 Intangible assets: Goodwill 1,555 Customer relationships 259 Non-compete 22 Property, plant and equipment 318 Deferred income ( 161 ) Total purchase price $ 4,751 |
Summary of Pro Forma Data | (Unaudited) Six months ended June 30, (dollar amounts in thousands, except for per share amounts) 2023 2022 Pro-forma total revenues $ 374,391 $ 339,638 Pro-forma net income $ 39,174 $ 34,781 Pro-forma basic earnings per share $ 1.60 $ 1.43 Pro-forma diluted earnings per share $ 1.60 $ 1.42 Vesta Modular Actual total revenues $ 47,257 Actual net income $ 9,016 Actual basic earnings per share $ 0.37 Actual diluted earnings per share $ 0.37 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Results of Discontinued Operations Reported in Consolidated Statements of Income and Balance Sheets | The following table presents the results of Adler Tanks as reported in income from discontinued operations within the condensed consolidated statements of income for the six months ended June 30, 2023 and 2022: (dollar amounts in thousands) Six Months Ended 2023 2022 Revenues Rental $ 6,520 $ 30,148 Rental related services 2,584 12,058 Rental operations 9,104 42,206 Sales 269 1,258 Other 65 519 Total revenues 9,438 43,983 Costs and Expenses Direct costs of rental operations: Depreciation of rental equipment 1,325 7,994 Rental related services 2,020 9,456 Other 1,270 6,278 Total direct costs of rental operations 4,614 23,728 Costs of sales 159 920 Total costs of revenues 4,773 24,648 Gross Profit Rental 3,926 15,876 Rental related services 564 2,602 Rental operations 4,490 18,478 Sales 110 338 Other 65 519 Total gross profit 4,665 19,335 Selling and administrative expenses 2,583 13,501 Income from operations 2,082 5,834 Interest expense allocation ( 374 ) ( 1,119 ) Income from discontinued operations before provision for income taxes 1,709 4,715 Provision for income taxes from discontinued operations 453 987 Income from discontinued operations $ 1,256 $ 3,728 Other Selected Information Adjusted EBITDA $ 3,682 $ 15,327 The following table presents the carrying value of the divested business' assets and liabilities as presented within assets and liabilities of discontinued operations on the condensed consolidated balance sheets as of December 31, 2022: December 31, (in thousands) 2022 Assets Accounts receivable, net of allowance for credit losses of $ 450 $ 20,086 Rental equipment, net 137,738 Property, plant and equipment, net 6,632 Prepaid expenses and other assets 191 Intangible assets, net 5,700 Goodwill 25,902 Total assets of discontinued operations $ 196,249 Liabilities Accounts payable and accrued liabilities $ 9,621 Deferred income taxes, net 43,550 Total liabilities of discontinued operations $ 53,171 |
Schedule of Operating and Investing Items Related to Discontinued Operations | For the six months ended June 30, 2023 and 2022, significant operating and investing items related to Adler Tanks were as follows: June 30, June 30, (in thousands) 2023 2022 Operating activities of discontinued operations: Depreciation and amortization $ 1,457 $ 8,864 Gain on sale of used rental equipment ( 111 ) ( 338 ) Investing activities of discontinued operations: Proceeds from sales of used rental equipment 269 1,258 Purchases of rental equipment ( 25 ) ( 1,410 ) Purchases of property, plant and equipment ( 40 ) ( 83 ) |
Reconciliation of Income from Discontinued Operations to Adjusted EBITDA | The following table presents the reconciliation of income from discontinued operations to Adjusted EBITDA for the six months ended June 30, 2023 and 2022: June 30, June 30, (in thousands) 2023 2022 Income from discontinued operations $ 1,256 $ 3,728 Provision for income taxes from discontinued operations 453 987 Interest expense 374 1,119 Depreciation and amortization 1,457 8,864 EBITDA 3,540 14,698 Share-based compensation 118 629 Transaction costs 24 — Adjusted EBITDA from discontinued operations $ 3,682 $ 15,327 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Disaggregation of Revenue [Abstract] | |
Summary of Disaggregates the Company's Revenue by Lease and Non Lease | The following table disaggregates the Company’s revenues by lease (within the scope of ASC 842) and non-lease revenues (within the scope of ASC 606) and the underlying service provided for the three and six months ended June 30, 2023 and 2022: (in thousands) Mobile TRS- Enviroplex Adler Consolidated Three Months Ended June 30, 2023 Leasing $ 110,419 $ 30,337 $ — $ — $ 140,756 Non-lease: Rental related services 13,908 563 — — 14,471 Sales 39,356 6,581 923 — 46,860 Other 579 364 — — 943 Total non-lease 53,843 7,508 923 — 62,274 Total revenues $ 164,262 $ 37,845 $ 923 $ — $ 203,030 2022 Leasing $ 79,671 $ 30,909 $ — $ 16,244 $ 126,824 Non-lease: Rental related services 6,883 683 — 6,636 14,202 Sales 24,816 5,462 4,650 601 35,529 Other 7 287 — 182 476 Total non-lease 31,706 6,432 4,650 7,419 50,207 Total revenues $ 111,377 $ 37,341 $ 4,650 $ 23,663 $ 177,031 Six Months Ended June 30, 2023 Leasing $ 210,078 $ 60,677 $ — $ 6,612 $ 277,367 Non-lease: Rental related services 22,882 1,289 — 2,557 26,728 Sales 56,961 11,204 1,864 269 70,298 Other 998 795 — — 1,793 Total non-lease 80,841 13,288 1,864 2,826 98,819 Total revenues $ 290,919 $ 73,965 $ 1,864 $ 9,438 $ 376,186 2022 Leasing $ 154,265 $ 60,319 $ — $ 30,723 $ 245,307 Non-lease: Rental related services 12,533 1,235 — 11,821 25,589 Sales 35,191 8,741 5,567 1,258 50,757 Other 33 537 — 181 751 Total non-lease 47,757 10,513 5,567 13,260 77,097 Total revenues $ 202,022 $ 70,832 $ 5,567 $ 43,983 $ 322,404 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Weighted-Average Number of Shares of Common Stock Used to Calculate Basic and Diluted Earnings Per Share | The table below presents the weighted-average number of shares of common stock used to calculate basic and diluted earnings per share: Three Months Ended Six Months Ended (in thousands) 2023 2022 2023 2022 Weighted-average number of shares of common stock for 24,479 24,360 24,448 24,323 Effect of potentially dilutive securities from equity-based 33 149 79 199 Weighted-average number of shares of common stock for 24,512 24,509 24,527 24,522 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill were as follows: (dollar amounts in thousands) Mobile Modular Adler Tanks (Discontinued) Total Balance at December 31, 2021 $ 106,491 $ 25,902 $ 132,393 Changes to Design Space purchase accounting ( 88 ) — ( 88 ) Balance at December 31, 2022 106,403 25,902 132,305 Goodwill acquired through business combination 218,951 — 218,951 Derecognition of goodwill divested — ( 25,902 ) ( 25,902 ) Balance at June 30, 2023 $ 325,354 $ — $ 325,354 |
Summary of Intangible Assets | Intangible assets consist of the following: (dollar amounts in thousands) Estimated Average remaining life in years Cost Accumulated amortization Net book value June 30, 2023 Customer relationships 8 to 11 7.4 $ 68,678 $( 12,852 ) $ 55,826 Non-compete agreements 5 4.0 10,477 ( 2,085 ) 8,392 Trade name 0.75 to 8 4.2 2,000 ( 782 ) 1,218 Total amortizing 81,155 ( 15,719 ) 65,436 Trade name - non-amortizing Indefinite 171 — 171 Total $ 81,326 $( 15,719 ) $ 65,607 December 31, 2022 Customer relationships 8 to 11 6.3 $ 50,284 $( 18,098 ) $ 32,186 Non-compete agreements 5 3.2 3,296 ( 1,159 ) 2,137 Customer backlog — — 1,900 ( 1,900 ) — Trade name 8 6.3 1,200 ( 263 ) 937 Total amortizing 56,680 ( 21,420 ) 35,260 Trade name - non-amortizing Indefinite 5,871 — 5,871 Total $ 62,551 $( 21,420 ) $ 41,131 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Summarized Financial Information for Company's Reportable Segments | Summarized financial information for the six months ended June 30, 2023 and 2022 for the Company’s reportable segments and discontinued operations are shown in the following table: (dollar amounts in thousands) Mobile TRS- Enviroplex 1 Adler 3 Consolidated Six Months Ended June 30, 2023 Rental revenues $ 170,370 $ 57,717 $ — $ 6,520 $ 234,607 Rental related services revenues 59,442 1,547 — 2,584 63,573 Sales and other revenues 61,107 14,701 1,864 334 78,006 Total revenues 290,919 73,965 1,864 9,438 376,186 Depreciation of rental equipment 19,729 24,701 — 1,325 45,755 Gross profit 140,226 31,503 248 4,665 176,642 Selling and administrative expenses 84,810 16,577 3,137 2,583 107,106 Income (loss) from operations 55,416 14,926 ( 2,889 ) 2,082 69,536 Interest (expense) income allocation ( 14,718 ) ( 3,801 ) 1,110 ( 374 ) ( 17,783 ) Income (loss) before provision for income taxes 40,698 11,333 ( 1,779 ) 1,709 51,961 Adjusted EBITDA 99,269 42,173 ( 2,724 ) 3,682 142,400 Rental equipment acquisitions 105,575 16,906 — — 122,481 Accounts receivable, net (period end) 161,927 26,138 3,611 — 191,676 Rental equipment, at cost (period end) 1,457,984 390,832 — — 1,848,816 Rental equipment, net book value (period end) 1,132,778 162,872 — — 1,295,650 Utilization (period end) 2 78.8 % 58.3 % Average utilization 2 79.4 % 58.7 % 2022 Rental revenues $ 126,487 $ 58,230 $ — $ 30,148 $ 214,865 Rental related services revenues 39,594 1,484 — 12,058 53,136 Sales and other revenues 35,941 11,118 5,567 1,777 54,403 Total revenues 202,022 70,832 5,567 43,983 322,404 Depreciation of rental equipment 15,582 24,362 — 7,994 47,938 Gross profit 92,820 30,826 1,345 19,335 144,326 Selling and administrative expenses 50,447 13,204 2,763 13,501 79,915 Income (loss) from operations 42,373 17,622 ( 1,418 ) 5,834 64,411 Interest (expense) income allocation ( 3,821 ) ( 1,232 ) 351 ( 1,119 ) ( 5,821 ) Income (loss) before provision for income taxes 38,552 16,222 ( 1,067 ) 4,715 58,422 Adjusted EBITDA 66,178 42,781 ( 1,276 ) 15,327 123,010 Rental equipment acquisitions 51,575 42,791 — 1,610 95,976 Accounts receivable, net (period end) 118,865 24,796 6,420 17,248 167,329 Rental equipment, at cost (period end) 1,075,898 389,383 — 309,010 1,774,291 Rental equipment, net book value (period end) 776,003 177,038 — 144,484 1,097,525 Utilization (period end) 2 78.6 % 65.3 % Average utilization 2 77.6 % 64.6 % 1. Gross Enviroplex sales revenues were $ 1,871 and $ 6,423 for the six months ended June 30, 2023 and 2022, respectively. There were $ 7 inter-segment sales to Mobile Modular in the six months ended June 30, 2023 and $ 856 inter-segment sales during the same period in 2022, which required elimination in consolidation. 2. Utilization is calculated each month by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding accessory equipment, and new equipment inventory. The Average utilization for the period is calculated using the average costs of rental equipment. 3. The financial results of Adler Tanks included in this table are through the date of the business divestiture, which occurred on February 1, 2023. |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Apr. 01, 2023 USD ($) MobileModularPortableStorage | Mar. 01, 2023 USD ($) MobileModularPortableStorage | Feb. 01, 2023 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | |||||
Combined acquired goodwill | $ 325,354 | $ 106,403 | |||
Goodwill deductible for tax purpose, period | 15 years | ||||
Combined federal and state tax rate | 26.50% | ||||
Trade Name [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets, expected useful life | 8 years | ||||
Non-compete Agreements [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets, expected useful life | 5 years | 5 years | |||
Vesta Modular [Member] | |||||
Business Acquisition [Line Items] | |||||
Purchase of assets | $ 437,200 | ||||
Business acquisition, transaction costs | 9,500 | ||||
Purchase price | 437,210 | ||||
Combined acquired goodwill | $ 213,313 | ||||
Vesta Modular [Member] | Customer Relationships [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets, expected useful life | 11 years | ||||
Vesta Modular [Member] | Trade Name [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets, expected useful life | 9 months | ||||
Brekke Storage [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, transaction costs | $ 200 | ||||
Increased number of mobile modular portable storage | MobileModularPortableStorage | 2,700 | ||||
Purchase price | $ 16,382 | ||||
Combined acquired goodwill | $ 4,083 | ||||
Brekke Storage [Member] | Customer Relationships [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets, expected useful life | 8 years | ||||
Vesta Modular, Brekke Storage and Dixie Storage [Member] | |||||
Business Acquisition [Line Items] | |||||
Combined acquired goodwill | $ 219,000 | ||||
Dixie Storage [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, transaction costs | $ 100 | ||||
Increased number of mobile modular portable storage | MobileModularPortableStorage | 800 | ||||
Purchase price | $ 4,751 | ||||
Purchase price including acquisition costs | 4,900 | ||||
Combined acquired goodwill | $ 1,555 | ||||
Dixie Storage [Member] | Customer Relationships [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets, expected useful life | 9 years |
Acquisitions - Summary of Preli
Acquisitions - Summary of Preliminary Purchase Price Allocations Reflecting Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Jun. 30, 2023 | Apr. 01, 2023 | Mar. 01, 2023 | Feb. 01, 2023 | Dec. 31, 2022 |
Intangible assets: | |||||
Goodwill | $ 325,354 | $ 106,403 | |||
Vesta Modular [Member] | |||||
Business Acquisition [Line Items] | |||||
Rental equipment | $ 226,753 | ||||
Intangible assets: | |||||
Goodwill | 213,313 | ||||
Cash | 11 | ||||
Accounts receivable | 22,401 | ||||
Property, plant and equipment | 1,437 | ||||
Prepaid expenses and other assets | 3,550 | ||||
Accounts payable and accrued liabilities | (27,558) | ||||
Deferred income | (14,273) | ||||
Deferred income taxes | (22,324) | ||||
Total purchase price | 437,210 | ||||
Vesta Modular [Member] | Customer Relationships [Member] | |||||
Intangible assets: | |||||
Intangible assets | 26,000 | ||||
Vesta Modular [Member] | Trade Name | |||||
Intangible assets: | |||||
Intangible assets | 800 | ||||
Vesta Modular [Member] | Non-compete [Member] | |||||
Intangible assets: | |||||
Intangible assets | $ 7,100 | ||||
Brekke Storage [Member] | |||||
Business Acquisition [Line Items] | |||||
Rental equipment | $ 10,798 | ||||
Intangible assets: | |||||
Goodwill | 4,083 | ||||
Property, plant and equipment | 875 | ||||
Deferred income | (382) | ||||
Total purchase price | 16,382 | ||||
Brekke Storage [Member] | Customer Relationships [Member] | |||||
Intangible assets: | |||||
Intangible assets | 949 | ||||
Brekke Storage [Member] | Non-compete [Member] | |||||
Intangible assets: | |||||
Intangible assets | $ 59 | ||||
Dixie Storage [Member] | |||||
Business Acquisition [Line Items] | |||||
Rental equipment | $ 2,758 | ||||
Intangible assets: | |||||
Goodwill | 1,555 | ||||
Property, plant and equipment | 318 | ||||
Deferred income | (161) | ||||
Total purchase price | 4,751 | ||||
Dixie Storage [Member] | Customer Relationships [Member] | |||||
Intangible assets: | |||||
Intangible assets | 259 | ||||
Dixie Storage [Member] | Non-compete [Member] | |||||
Intangible assets: | |||||
Intangible assets | $ 22 |
Acquisitions - Summary of Pro F
Acquisitions - Summary of Pro Forma Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Business Acquisition [Line Items] | ||
Pro-forma total revenues | $ 374,391 | $ 339,638 |
Pro-forma net income | $ 39,174 | $ 34,781 |
Pro-forma basic earnings per share | $ 1.6 | $ 1.43 |
Pro-forma diluted earnings per share | $ 1.6 | $ 1.42 |
Vesta Modular [Member] | ||
Business Acquisition [Line Items] | ||
Actual total revenues | $ 47,257 | |
Actual net income | $ 9,016 | |
Actual basic earnings per share | $ 0.37 | |
Actual diluted earnings per share | $ 0.37 |
Discontinued Operations - Addit
Discontinued Operations - Additional information (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Feb. 01, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total transaction costs | $ 24 | ||
Adler Tank Rentals, LLC | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Sale price | $ 268,000 | ||
Additional payment for final net working capital purchase price adjustment | 3,600 | ||
Total transaction costs | $ 8,900 | $ 6,700 | $ 2,200 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Results of Discontinued Operations Reported in Condensed Consolidated Statements of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Gross Profit | ||||
Interest expense allocation | $ (374) | $ (1,119) | ||
Income from discontinued operations before provision for income taxes | $ 3,327 | 1,709 | 4,715 | |
Provision for income taxes from discontinued operations | 734 | 453 | 987 | |
Income from discontinued operations | $ 2,630 | 2,593 | 62,769 | 3,728 |
Other Selected Information | ||||
Adjusted EBITDA | 3,682 | 15,327 | ||
Sales [Member] | ||||
Revenues | ||||
Sales revenues | 47,801 | 35,870 | 71,461 | 51,089 |
Other [Member] | ||||
Revenues | ||||
Sales revenues | $ 3,532 | $ 785 | 6,211 | 1,537 |
Adler Tank Rentals, LLC | ||||
Revenues | ||||
Rental | 6,520 | 30,148 | ||
Rental related services | 2,584 | 12,058 | ||
Rental operations | 9,104 | 42,206 | ||
Total revenues | 9,438 | 43,983 | ||
Direct costs of rental operations: | ||||
Depreciation of rental equipment | 1,325 | 7,994 | ||
Rental related services | 2,020 | 9,456 | ||
Other | 1,270 | 6,278 | ||
Total direct costs of rental operations | 4,614 | 23,728 | ||
Costs of sales | 159 | 920 | ||
Total costs of revenues | 4,773 | 24,648 | ||
Gross Profit | ||||
Rental | 3,926 | 15,876 | ||
Rental related services | 564 | 2,602 | ||
Rental operations | 4,490 | 18,478 | ||
Total gross profit | 4,665 | 19,335 | ||
Selling and administrative expenses | 2,583 | 13,501 | ||
Income from operations | 2,082 | 5,834 | ||
Interest expense allocation | (374) | (1,119) | ||
Income from discontinued operations before provision for income taxes | 1,709 | 4,715 | ||
Provision for income taxes from discontinued operations | 453 | 987 | ||
Income from discontinued operations | 1,256 | 3,728 | ||
Other Selected Information | ||||
Adjusted EBITDA | 3,682 | 15,327 | ||
Adler Tank Rentals, LLC | Sales [Member] | ||||
Revenues | ||||
Sales revenues | 269 | 1,258 | ||
Gross Profit | ||||
Total gross profit | 110 | 338 | ||
Adler Tank Rentals, LLC | Other [Member] | ||||
Revenues | ||||
Sales revenues | 65 | 519 | ||
Gross Profit | ||||
Total gross profit | $ 65 | $ 519 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Assets and Liabilities of Discontinued Operations Reported in Condensed Consolidated Balance Sheets (Detail) $ in Thousands | Dec. 31, 2022 USD ($) |
Assets | |
Total assets of discontinued operations | $ 196,249 |
Liabilities | |
Total liabilities of discontinued operations | 53,171 |
Adler Tank Rentals, LLC | |
Assets | |
Accounts receivable, net of allowance for credit losses of $450 | 20,086 |
Rental equipment, net | 137,738 |
Property, plant and equipment, net | 6,632 |
Prepaid expenses and other assets | 191 |
Intangible assets, net | 5,700 |
Goodwill | 25,902 |
Total assets of discontinued operations | 196,249 |
Liabilities | |
Accounts payable and accrued liabilities | 9,621 |
Deferred income taxes, net | 43,550 |
Total liabilities of discontinued operations | $ 53,171 |
Discontinued Operations - Sch_2
Discontinued Operations - Schedule of Assets and Liabilities on Discontinued Operations Reported in Condensed Consolidated Balance Sheets (Parenthetical (Detail) $ in Thousands | Dec. 31, 2022 USD ($) |
Adler Tank Rentals, LLC | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Allowance for credit losses | $ 450 |
Discontinued Operations - Sch_3
Discontinued Operations - Schedule of Operating and Investing Items Related to Discontinued Operations (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating activities of discontinued operations: | ||
Depreciation and amortization | $ 1,457 | $ 8,864 |
Investing activities of discontinued operations: | ||
Purchases of rental equipment | (128,088) | (94,820) |
Purchases of property, plant and equipment | (11,229) | (6,594) |
Adler Tank Rentals, LLC | ||
Operating activities of discontinued operations: | ||
Depreciation and amortization | 1,457 | 8,864 |
Gain on sale of used rental equipment | (111) | (338) |
Investing activities of discontinued operations: | ||
Proceeds from sales of used rental equipment | 269 | 1,258 |
Purchases of rental equipment | (25) | (1,410) |
Purchases of property, plant and equipment | $ (40) | $ (83) |
Discontinued Operations - Recon
Discontinued Operations - Reconciliation of Income from Discontinued Operations to Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Income from discontinued operations | $ 1,256 | $ 3,728 | |
Provision for income taxes from discontinued operations | $ 734 | 453 | 987 |
Interest expense | 374 | 1,119 | |
Depreciation and amortization | 1,457 | 8,864 | |
EBITDA | 3,540 | 14,698 | |
Share-based compensation | 118 | 629 | |
Transaction costs | 24 | ||
Adjusted EBITDA from discontinued operations | $ 3,682 | $ 15,327 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Disaggregation Of Revenue [Line Items] | |||
Period for credit risk identified | 30 days | ||
Revenue from contracts criteria over time | multiple quarters | ||
Sales revenues totaling | $ 6.6 | $ 11 | |
Total Future minimum flease payments expected to be received | 4.4 | 4.4 | |
Future minimum flease payments expected to be received in 2024 | 1.1 | 1.1 | |
Future minimum flease payments expected to be received in 2025 | 0.7 | 0.7 | |
Future minimum flease payments expected to be received in 2026 | 0.2 | 0.2 | |
Lease revenue | 140.8 | 277.4 | |
Operating lease revenue | 139.7 | 275.8 | |
Finance lease revenue | 1.1 | 1.6 | |
Finance lease revenue, sales revenue | 1 | 1.4 | |
Finance lease revenue, interest income | 0.1 | $ 0.2 | |
Period for warranties for rental equipment | 90 days | ||
Period for warranties for equipment manufactured | 1 year | ||
Deferred Income [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Customer contract liability | 49 | $ 49 | $ 27.4 |
Accounts Receivable [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Unbilled contract assets | $ 5.7 | $ 5.7 | $ 0.6 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Disaggregates the Company's Revenue by Lease and Non Lease (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
Disaggregation Of Revenue [Line Items] | ||||||
Leasing revenues | $ 140,800 | $ 277,400 | ||||
Total revenues | 203,030 | $ 177,031 | 376,186 | $ 322,404 | ||
Leasing [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Leasing revenues | 140,756 | 126,824 | 277,367 | 245,307 | ||
Non-lease Rental Related Services [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 14,471 | 14,202 | 26,728 | 25,589 | ||
Non-lease Sales [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 46,860 | 35,529 | 70,298 | 50,757 | ||
Non-lease Other [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 943 | 476 | 1,793 | 751 | ||
Non-lease Revenues [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 62,274 | 50,207 | 98,819 | 77,097 | ||
Mobile Modular [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total revenues | 164,262 | 111,377 | 290,919 | 202,022 | ||
Mobile Modular [Member] | Leasing [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Leasing revenues | 110,419 | 79,671 | 210,078 | 154,265 | ||
Mobile Modular [Member] | Non-lease Rental Related Services [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 13,908 | 6,883 | 22,882 | 12,533 | ||
Mobile Modular [Member] | Non-lease Sales [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 39,356 | 24,816 | 56,961 | 35,191 | ||
Mobile Modular [Member] | Non-lease Other [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 579 | 7 | 998 | 33 | ||
Mobile Modular [Member] | Non-lease Revenues [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 53,843 | 31,706 | 80,841 | 47,757 | ||
TRS-RenTelco [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total revenues | 37,845 | 37,341 | 73,965 | 70,832 | ||
TRS-RenTelco [Member] | Leasing [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Leasing revenues | 30,337 | 30,909 | 60,677 | 60,319 | ||
TRS-RenTelco [Member] | Non-lease Rental Related Services [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 563 | 683 | 1,289 | 1,235 | ||
TRS-RenTelco [Member] | Non-lease Sales [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 6,581 | 5,462 | 11,204 | 8,741 | ||
TRS-RenTelco [Member] | Non-lease Other [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 364 | 287 | 795 | 537 | ||
TRS-RenTelco [Member] | Non-lease Revenues [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 7,508 | 6,432 | 13,288 | 10,513 | ||
Adler Tanks [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total revenues | 23,663 | 9,438 | 43,983 | |||
Adler Tanks [Member] | Leasing [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Leasing revenues | 16,244 | 6,612 | 30,723 | |||
Adler Tanks [Member] | Non-lease Rental Related Services [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 6,636 | 2,557 | 11,821 | |||
Adler Tanks [Member] | Non-lease Sales [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 601 | 269 | 1,258 | |||
Adler Tanks [Member] | Non-lease Other [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 182 | 181 | ||||
Adler Tanks [Member] | Non-lease Revenues [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 7,419 | 2,826 | 13,260 | |||
Enviroplex [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total revenues | 923 | 4,650 | 1,864 | [1] | 5,567 | [1] |
Enviroplex [Member] | Non-lease Sales [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | 923 | 4,650 | 1,864 | 5,567 | ||
Enviroplex [Member] | Non-lease Revenues [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Total non-lease revenues | $ 923 | $ 4,650 | $ 1,864 | $ 5,567 | ||
[1] Gross Enviroplex sales revenues were $ 1,871 and $ 6,423 for the six months ended June 30, 2023 and 2022, respectively. There were $ 7 inter-segment sales to Mobile Modular in the six months ended June 30, 2023 and $ 856 inter-segment sales during the same period in 2022, which required elimination in consolidation. |
Earnings Per Share - Weighted-A
Earnings Per Share - Weighted-Average Number of Shares of Common Stock Used to Calculate Basic and Diluted Earnings Per Share (Detail) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Weighted-average number of shares of common stock for calculating basic earnings per share | 24,479 | 24,360 | 24,448 | 24,323 |
Effect of potentially dilutive securities from equity-based compensation | 33 | 149 | 79 | 199 |
Weighted-average number of shares of common stock for calculating diluted earnings per share | 24,512 | 24,509 | 24,527 | 24,522 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Aug. 31, 2015 | |
Earnings Per Share Basic [Line Items] | |||||
Anti-dilutive securities in the form of common stock excluded from computation of diluted earnings per share | 697 | 7,315 | |||
Shares repurchased | 0 | 0 | 0 | 0 | |
Shares remain authorized for repurchase | 1,309,805 | 1,309,805 | |||
Maximum [Member] | |||||
Earnings Per Share Basic [Line Items] | |||||
Common stock shares authorized for repurchase | 2,000,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Summary of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Goodwill [Line Items] | ||
Beginning Balance | $ 132,305 | $ 132,393 |
Changes to Design Space purchase accounting | (88) | |
Goodwill acquired through business combination | 218,951 | |
Derecognition of goodwill divested | (25,902) | |
Ending Balance | 325,354 | 132,305 |
Mobile Modular [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 106,403 | 106,491 |
Changes to Design Space purchase accounting | (88) | |
Goodwill acquired through business combination | 218,951 | |
Ending Balance | 325,354 | 106,403 |
Adler Tanks (Disconitued) [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 25,902 | 25,902 |
Derecognition of goodwill divested | $ (25,902) | |
Ending Balance | $ 25,902 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Finite Lived Intangible Assets [Line Items] | ||
Cost | $ 81,155 | $ 56,680 |
Accumulated amortization | (15,719) | (21,420) |
Net book value | 65,436 | 35,260 |
Indefinite, cost | 171 | 5,871 |
Indefinite, net book value | 171 | 5,871 |
Total, cost | 81,326 | 62,551 |
Total, accumulated amortization | (15,719) | (21,420) |
Total, net book value | $ 65,607 | $ 41,131 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Average remaining life in years | 7 years 4 months 24 days | 6 years 3 months 18 days |
Cost | $ 68,678 | $ 50,284 |
Accumulated amortization | (12,852) | (18,098) |
Net book value | $ 55,826 | $ 32,186 |
Customer Relationships [Member] | Minimum [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life in years | 8 years | 8 years |
Customer Relationships [Member] | Maximum [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life in years | 11 years | 11 years |
Non-compete Agreements [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life in years | 5 years | 5 years |
Average remaining life in years | 4 years | 3 years 2 months 12 days |
Cost | $ 10,477 | $ 3,296 |
Accumulated amortization | (2,085) | (1,159) |
Net book value | $ 8,392 | 2,137 |
Customer Backlog [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Cost | 1,900 | |
Accumulated amortization | $ (1,900) | |
Trade Name [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life in years | 8 years | |
Average remaining life in years | 4 years 2 months 12 days | 6 years 3 months 18 days |
Cost | $ 2,000 | $ 1,200 |
Accumulated amortization | (782) | (263) |
Net book value | $ 1,218 | $ 937 |
Trade Name [Member] | Minimum [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life in years | 9 months | |
Trade Name [Member] | Maximum [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Estimated useful life in years | 8 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of goodwill and intangible assets | $ 0 | $ 0 | |
Amortization expense | 5,000,000 | $ 3,000,000 | |
Subsequent impairment of the underlying assets | 0 | ||
Expected annual amortization expense for 2023 | 5,300,000 | ||
Expected annual amortization expense for 2024 | 9,800,000 | ||
Expected annual amortization expense for 2025 | 9,800,000 | ||
Expected annual amortization expense for 2026 | 9,300,000 | ||
Expected annual amortization expense for 2027 | 9,100,000 | ||
Expected annual amortization expense for 2028 | $ 7,800,000 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 6 Months Ended | ||
Feb. 01, 2023 Segment | Jun. 30, 2023 Customer Segment | Jun. 30, 2022 Customer | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | Segment | 4 | 3 | |
Customer Concentration Risk [Member] | Sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Number of major customer | Customer | 0 | 0 | |
Geographic Concentration Risk [Member] | Sales [Member] | Foreign Country Customers [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from customers | 3% | 4% |
Segment Reporting - Summarized
Segment Reporting - Summarized Financial Information for Company's Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | ||||
Segment Reporting Information [Line Items] | ||||||||
Rental revenues | $ 234,607 | $ 214,865 | ||||||
Rental related services revenues | 63,573 | 53,136 | ||||||
Sales and other revenues | 78,006 | 54,403 | ||||||
Total revenues | $ 203,030 | $ 177,031 | 376,186 | 322,404 | ||||
Depreciation of rental equipment | 45,755 | 47,938 | ||||||
Gross profit | 176,642 | 144,326 | ||||||
Selling and administrative expenses | 107,106 | 79,915 | ||||||
Income (loss) from operations | 69,536 | 64,411 | ||||||
Interest (expense) income allocation | (17,783) | (5,821) | ||||||
Income (loss) before provision for income taxes | 51,961 | 58,422 | ||||||
Adjusted EBITDA | 142,400 | 123,010 | ||||||
Rental equipment acquisitions | 122,481 | 95,976 | ||||||
Accounts receivable, net (period end) | 191,676 | 167,329 | 191,676 | 167,329 | $ 169,937 | |||
Rental equipment, at cost (period end) | 1,848,816 | 1,774,291 | 1,848,816 | 1,774,291 | 1,521,535 | |||
Rental equipment, net book value (period end) | 1,295,650 | 1,097,525 | 1,295,650 | 1,097,525 | $ 990,317 | |||
Mobile Modular [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Rental revenues | 170,370 | 126,487 | ||||||
Rental related services revenues | 59,442 | 39,594 | ||||||
Sales and other revenues | 61,107 | 35,941 | ||||||
Total revenues | 164,262 | 111,377 | 290,919 | 202,022 | ||||
Depreciation of rental equipment | 19,729 | 15,582 | ||||||
Gross profit | 140,226 | 92,820 | ||||||
Selling and administrative expenses | 84,810 | 50,447 | ||||||
Income (loss) from operations | 55,416 | 42,373 | ||||||
Interest (expense) income allocation | (14,718) | (3,821) | ||||||
Income (loss) before provision for income taxes | 40,698 | 38,552 | ||||||
Adjusted EBITDA | 99,269 | 66,178 | ||||||
Rental equipment acquisitions | 105,575 | 51,575 | ||||||
Accounts receivable, net (period end) | 161,927 | 118,865 | 161,927 | 118,865 | ||||
Rental equipment, at cost (period end) | 1,457,984 | 1,075,898 | 1,457,984 | 1,075,898 | ||||
Rental equipment, net book value (period end) | 1,132,778 | 776,003 | $ 1,132,778 | $ 776,003 | ||||
Utilization (period end) | [1] | 78.80% | 78.60% | |||||
Average utilization | [1] | 79.40% | 77.60% | |||||
TRS-RenTelco [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Rental revenues | $ 57,717 | $ 58,230 | ||||||
Rental related services revenues | 1,547 | 1,484 | ||||||
Sales and other revenues | 14,701 | 11,118 | ||||||
Total revenues | 37,845 | 37,341 | 73,965 | 70,832 | ||||
Depreciation of rental equipment | 24,701 | 24,362 | ||||||
Gross profit | 31,503 | 30,826 | ||||||
Selling and administrative expenses | 16,577 | 13,204 | ||||||
Income (loss) from operations | 14,926 | 17,622 | ||||||
Interest (expense) income allocation | (3,801) | (1,232) | ||||||
Income (loss) before provision for income taxes | 11,333 | 16,222 | ||||||
Adjusted EBITDA | 42,173 | 42,781 | ||||||
Rental equipment acquisitions | 16,906 | 42,791 | ||||||
Accounts receivable, net (period end) | 26,138 | 24,796 | 26,138 | 24,796 | ||||
Rental equipment, at cost (period end) | 390,832 | 389,383 | 390,832 | 389,383 | ||||
Rental equipment, net book value (period end) | 162,872 | 177,038 | $ 162,872 | $ 177,038 | ||||
Utilization (period end) | [1] | 58.30% | 65.30% | |||||
Average utilization | [1] | 58.70% | 64.60% | |||||
Adler Tanks [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total revenues | 23,663 | $ 9,438 | $ 43,983 | |||||
Adler Tanks (Discontinued) [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Rental revenues | [2] | 6,520 | 30,148 | |||||
Rental related services revenues | [2] | 2,584 | 12,058 | |||||
Sales and other revenues | [2] | 334 | 1,777 | |||||
Total revenues | [2] | 9,438 | 43,983 | |||||
Depreciation of rental equipment | [2] | 1,325 | 7,994 | |||||
Gross profit | [2] | 4,665 | 19,335 | |||||
Selling and administrative expenses | [2] | 2,583 | 13,501 | |||||
Income (loss) from operations | [2] | 2,082 | 5,834 | |||||
Interest (expense) income allocation | [2] | (374) | (1,119) | |||||
Income (loss) before provision for income taxes | [2] | 1,709 | 4,715 | |||||
Adjusted EBITDA | [2] | 3,682 | 15,327 | |||||
Rental equipment acquisitions | [2] | 1,610 | ||||||
Accounts receivable, net (period end) | [2] | 17,248 | 17,248 | |||||
Rental equipment, at cost (period end) | [2] | 309,010 | 309,010 | |||||
Rental equipment, net book value (period end) | [2] | 144,484 | 144,484 | |||||
Enviroplex [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Sales and other revenues | [3] | 1,864 | 5,567 | |||||
Total revenues | 923 | 4,650 | 1,864 | [3] | 5,567 | [3] | ||
Gross profit | [3] | 248 | 1,345 | |||||
Selling and administrative expenses | [3] | 3,137 | 2,763 | |||||
Income (loss) from operations | [3] | (2,889) | (1,418) | |||||
Interest (expense) income allocation | [3] | 1,110 | 351 | |||||
Income (loss) before provision for income taxes | [3] | (1,779) | (1,067) | |||||
Adjusted EBITDA | [3] | (2,724) | (1,276) | |||||
Accounts receivable, net (period end) | [3] | $ 3,611 | $ 6,420 | $ 3,611 | $ 6,420 | |||
[1] Utilization is calculated each month by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding accessory equipment, and new equipment inventory. The Average utilization for the period is calculated using the average costs of rental equipment. The financial results of Adler Tanks included in this table are through the date of the business divestiture, which occurred on February 1, 2023. Gross Enviroplex sales revenues were $ 1,871 and $ 6,423 for the six months ended June 30, 2023 and 2022, respectively. There were $ 7 inter-segment sales to Mobile Modular in the six months ended June 30, 2023 and $ 856 inter-segment sales during the same period in 2022, which required elimination in consolidation. |
Segment Reporting - Summarize_2
Segment Reporting - Summarized Financial Information for Company's Reportable Segments (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 203,030 | $ 153,368 | $ 366,748 | $ 278,421 |
Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales revenues | $ 47,801 | $ 35,870 | 71,461 | 51,089 |
Operating Segments [Member] | Enviroplex [Member] | Sales [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,871 | 6,423 | ||
Inter-segment Eliminations [Member] | Mobile Modular [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales revenues | $ 7 | $ 856 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - Inland Leasing [Member] $ in Millions | Jul. 01, 2023 USD ($) MobileModularPortableStorage |
Subsequent Event [Line Items] | |
Purchase price | $ | $ 3.8 |
Increased number of mobile modular portable storage | MobileModularPortableStorage | 600 |