Exhibit 99.1
TAL International Group, Inc. Reports
Second Quarter 2007 Results and Quarterly Dividend
PURCHASE, N.Y.--(BUSINESS WIRE)--Aug. 6, 2007--TAL International
Group, Inc. (NYSE: TAL), one of the world's largest lessors of
intermodal freight containers and chassis, today reported results for
the second quarter and six months ended June 30, 2007.
Pre-tax income for the quarter was $32.3 million compared to $20.8
million in the prior year quarter. Adjusted pre-tax income(1) for the
quarter, excluding unrealized gains / losses on interest rate swaps in
2007 and 2006 and write-off of deferred financing costs in 2006, was
$21.1 million in the second quarter of 2007, compared to $18.7 million
in the second quarter of 2006. Please see page 7 for a detailed
reconciliation of adjusted pre-tax income. The Company focuses on
pre-tax results as it does not expect to pay any significant income
taxes for a number of years due to the availability of accelerated tax
depreciation on the existing container fleet and planned future
equipment purchases.
Total revenues for the second quarter of 2007 were $84.7 million
compared to $75.0 million in the second quarter of 2006. EBITDA(2) was
$69.2 million for the quarter versus $60.0 million in the prior year
period. Adjusted EBITDA(2) was $58.0 million for the quarter versus
$55.5 million in last year's second quarter. Please see page 7 for a
detailed reconciliation of EBITDA and Adjusted EBITDA.
Net income for the second quarter of 2007 was $20.8 million, or
$0.62 per fully diluted common share, versus $13.3 million, or $0.40
per fully diluted common share in the prior year quarter. Adjusted Net
Income (3) for the quarter, excluding unrealized gains / losses on
interest rate swaps in 2007 and 2006 and write-off of deferred
financing costs in 2006, was $13.5 million in the second quarter of
2007, or $0.41 per fully diluted common share, compared to $12.0
million, or $0.36 per fully diluted common share in the second quarter
of 2006. Please see page 7 for a detailed reconciliation of Adjusted
Net Income.
"Our results for the second quarter of 2007 build on the great
start we had in the first quarter, and place us in good shape to have
a strong year," commented Brian M. Sondey, President and CEO of TAL
International. "In the second quarter we achieved solid on-hire growth
in the run-up to the summer peak season for dry containers, and
achieved exceptional selling results for our used containers and in
our third-party container trading business. Our overall utilization
decreased during the quarter as factory deliveries of new containers
out-paced our on-hire growth, but this should reverse over the next
few months as factory deliveries slow. Utilization of our fleet
excluding new units remains high at 94.8%."
Pre-tax income for the first six months of 2007 was $49.6 million
compared to $35.5 million for the same period last year. Adjusted
pre-tax income(1) for the first six months, excluding unrealized gains
/ losses on interest rate swaps in 2007 and 2006 and write-off of
deferred financing costs in 2006, was $41.5 million in the first six
months of 2007, compared to $34.3 million for the same period last
year. Please see page 7 for a detailed reconciliation of adjusted
pre-tax income.
Total revenues for the first six months of 2007 were $164.3
million compared to $149.6 million for the same period last year.
EBITDA(2) was $122.9 million for the first half of 2007 versus $112.6
million for the same period last year. Adjusted EBITDA(2) was $114.8
million for the first half of 2007 versus $109.1 million for the same
period last year. Please see page 7 for a detailed reconciliation of
EBITDA and Adjusted EBITDA.
Net income for the first six months of 2007 was $31.9 million, or
$0.95 per fully diluted common share, versus $22.8 million, or $0.68
per fully diluted common share for the same period last year. Adjusted
Net Income (3) for the first six months, excluding unrealized gains /
losses on interest rate swaps in 2007 and 2006 and write-off of
deferred financing costs in 2006, was $26.7 million for the first six
months of 2007, or $0.80 per fully diluted common share, compared to
$22.0 million, or $0.66 per fully diluted common share for the same
period last year. Please see page 7 for a detailed reconciliation of
Adjusted Net Income.
Outlook
Mr. Sondey added, "The outlook for the industry remains generally
favorable. Analysts continue to expect trade growth to remain in the
10% range for 2007, and many of our customers are reporting that trade
volumes have been better than expected so far this year. New container
prices have decreased from the first quarter, though they remain at a
relatively high level. We expect our utilization to improve in the
third quarter as our new factory units are increasingly placed on-hire
to our customers over the remaining peak season months, though lease
pricing remains aggressive, especially for new container transactions,
and our disposal results in the second quarter benefited from a large
gain on the sale of leaseable containers that may not re-occur in the
third quarter. On balance, we believe that our results should hold
fairly steady from the second to the third quarter of 2007, before
picking up in the fourth quarter as another vintage year of containers
reaches the end of its depreciable life."
Dividend
TAL's board of directors has approved and declared a $0.375 per
share quarterly cash dividend on its issued and outstanding common
stock, payable on August 29, 2007 to shareholders of record at the
close of business on August 15, 2007.
Strategic Review
On June 5, 2007, TAL issued a press release indicating that
Citigroup Global Markets Inc. had been hired to assist the Company in
evaluating a number of strategic alternatives to increase shareholder
value. The review process is ongoing, and TAL does not anticipate
providing a further update at this time.
Investors' Webcast
TAL will hold a Webcast at 9 a.m. (New York time) on Tuesday,
August 7th to discuss its fiscal second quarter and six month results.
An archive of the Webcast will be available one hour after the live
call through Friday August 24, 2007. To access the live Webcast or
archive, please visit the Company's Web site at
http://www.talinternational.com.
About TAL International Group, Inc.
TAL is one of the world's largest lessors of intermodal freight
containers and chassis with 19 offices in 11 countries and
approximately 188 third party container depot facilities in 38
countries. The Company's global operations include the acquisition,
leasing, re-leasing and subsequent sale of multiple types of
intermodal containers. TAL's fleet consists of approximately 679,000
containers and related equipment representing approximately 1,102,000
twenty-foot equivalent units (TEU). This places TAL among the world's
largest independent lessors of intermodal containers and chassis as
measured by fleet size.
Important Cautionary Information Regarding Forward-Looking
Statements
Statements in this press release regarding TAL International
Group, Inc.'s business that are not historical facts are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Readers are cautioned that
these statements involve risks and uncertainties, are only predictions
and may differ materially from actual future events or results. For a
discussion of such risks and uncertainties, see "Risk Factors" in the
Company's Annual Report on Form 10-K, filed with the Securities and
Exchange Commission on March 13, 2007.
The Company's views, estimates, plans and outlook as described
within this document may change subsequent to the release of this
statement. The Company is under no obligation to modify or update any
or all of the statements it has made herein despite any subsequent
changes the Company may make in its views, estimates, plans or outlook
for the future.
(1) Adjusted pre-tax income is a non-GAAP measurement we believe
is useful in evaluating our operating performance. The Company's
definition and calculation of adjusted pre-tax income is outlined in
the attached schedules.
(2) EBITDA and Adjusted EBITDA are non-GAAP measurements we
believe are useful in evaluating our operating performance. The
Company's definitions and calculations of EBITDA and Adjusted EBITDA
are outlined in the attached schedules.
(3) Adjusted net income is a non-GAAP measurement we believe is
useful in evaluating our operating performance. The Company's
definition and calculation of adjusted net income is outlined in the
attached schedules.
TAL INTERNATIONAL GROUP, INC.
Consolidated Balance Sheets
(Dollars in thousands, except share data)
June 30, December 31,
2007 2006
----------- ------------
(Unaudited)
Assets:
Cash and cash equivalents (including
restricted cash of $15,965 and $14,526) $ 45,536 $ 58,167
Accounts receivable, net of allowances of
$600 and $266 42,930 39,318
Net investment in finance leases 176,021 152,586
Leasing equipment, net of accumulated
depreciation and allowances of $247,076 and
$208,756 1,199,623 1,080,523
Leasehold improvements and other fixed
assets, net of accumulated depreciation and
amortization of $2,588 and $2,132 2,898 2,855
Equipment held for sale 23,143 20,768
Goodwill 71,898 71,898
Deferred financing costs 6,502 6,957
Other assets (including fair value of
derivative instruments) 34,743 22,591
----------- ------------
Total assets $ 1,603,294 $ 1,455,663
=========== ============
Liabilities and stockholders' equity:
Accounts payable $ 100,457 $ 13,273
Accrued expenses (including fair value of
derivative instruments) 39,454 50,453
Income taxes payable 347 219
Deferred income tax liability 51,958 34,651
Debt 993,200 958,317
----------- ------------
Total liabilities 1,185,416 1,056,913
Stockholders' equity:
Preferred stock, $.001 par value, 500,000
shares authorized, none issued - -
Common stock, $.001 par value, 100,000,000
shares authorized, 33,396,974 and 33,303,031
shares issued and outstanding, respectively 33 33
Treasury stock, at cost, 136,250 shares (2,862) (2,862)
Additional paid-in capital 394,739 394,440
Retained earnings 22,868 3,476
Accumulated other comprehensive income 3,100 3,663
----------- ------------
Total stockholders' equity 417,878 398,750
----------- ------------
Total liabilities and stockholders' equity $ 1,603,294 $ 1,455,663
=========== ============
TAL INTERNATIONAL GROUP, INC.
Consolidated Statements of Operations
(Dollars and shares in thousands, except earnings per share)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- --------------------
2007 2006 2007 2006
----------- ------- ----------- --------
(Unaudited) (Unaudited)
Revenues:
Leasing revenues, including
income recognized on finance
leases of $4,397, $2,832,
$8,598 and $5,117,
respectively $68,847 $67,091 $137,028 $134,632
Equipment trading revenue 13,876 5,757 23,114 10,776
Management fee income 1,552 1,573 3,141 3,149
Other revenues 457 563 1,021 1,040
----------- ------- ----------- --------
Total revenues 84,732 74,984 164,304 149,597
----------- ------- ----------- --------
Expenses:
Equipment trading expenses 11,268 4,714 18,667 8,939
Direct operating expenses 8,039 7,636 15,411 14,359
Administrative expenses 10,313 9,120 20,567 18,659
Depreciation and amortization 24,686 25,703 49,182 51,192
Provision (reversal) for
doubtful accounts 212 (913) 329 (442)
Net (gain) on sale of leasing
equipment (3,081) (1,084) (5,501) (976)
Write-off of deferred
financing costs - 2,367 - 2,367
Interest and debt expense 12,195 11,124 24,106 23,580
Unrealized (gain) on interest
rate swaps (11,240) (4,444) (8,049) (3,590)
----------- ------- ----------- --------
Total expenses 52,392 54,223 114,712 114,088
----------- ------- ----------- --------
Income before income taxes 32,340 20,761 49,592 35,509
Income tax expense 11,576 7,441 17,742 12,684
----------- ------- ----------- --------
Net income $20,764 $13,320 $31,850 $22,825
=========== ======= =========== ========
Net income per common share
-- Basic $0.63 $0.40 $0.96 $0.69
=========== ======= =========== ========
Net income per common share
-- Diluted $0.62 $0.40 $0.95 $0.68
=========== ======= =========== ========
Weighted average number of
common shares outstanding
- -- Basic 33,199 32,895 33,191 32,889
Weighted average number of
common shares outstanding
- -- Diluted 33,401 33,495 33,394 33,469
Cash dividends paid per
common share $0.375 - $0.675 -
Non-GAAP Financial Measures
We use the terms "EBITDA", "Adjusted EBITDA", "Adjusted Pre-tax
Income", and "Adjusted Net Income" throughout this press release.
EBITDA is defined as net income before interest and debt expense,
write-off of deferred financing costs, income tax expense and
depreciation and amortization. Adjusted EBITDA is defined as EBITDA as
further adjusted for certain items which are described in more detail
below, which management believes are not representative of our
operating performance. Adjusted EBITDA excludes unrealized loss on
interest rate swaps.
Adjusted Pre-tax Income is defined as income before income taxes
as further adjusted for certain items which are described in more
detail below, which management believes are not representative of our
operating performance. Adjusted Pre-tax Income excludes the unrealized
loss on interest rate swaps and the write-off of deferred financing
costs. Adjusted Net Income is defined as net income further adjusted
for the items discussed above, net of income tax.
EBITDA, Adjusted EBITDA, Adjusted Pre-tax Income, and Adjusted Net
Income are not presentations made in accordance with GAAP, and should
not be considered as alternatives to, or more meaningful than, amounts
determined in accordance with GAAP, including net income, or net cash
from operating activities.
We believe that EBITDA, Adjusted EBITDA, Adjusted Pre-tax Income,
and Adjusted Net Income are useful to an investor in evaluating our
operating performance because:
-- these measures are widely used by securities analysts and
investors to measure a company's operating performance without regard
to items such as interest and debt expense, income tax expense,
depreciation and amortization and unrealized losses(gains) on interest
rate swaps, which can vary substantially from company to company
depending upon accounting methods and book value of assets, capital
structure and the method by which assets were acquired;
-- these measures help investors to more meaningfully evaluate and
compare the results of our operations from period to period by
removing the impact of our capital structure, our asset base and
certain non-routine events which we do not expect to occur in the
future; and
-- these measures are used by our management for various purposes,
including as measures of operating performance to assist in comparing
performance from period to period on a consistent basis, in
presentations to our board of directors concerning our financial
performance and as a basis for strategic planning and forecasting.
We have provided reconciliations of net income, the most directly
comparable GAAP measure, to EBITDA and EBITDA to Adjusted EBITDA in
the tables below for the three and six months ended June 30, 2007 and
2006.
Additionally, we have provided reconciliations of income before
income taxes and net income, the most directly comparable GAAP
measures to Adjusted Pre-tax Income and Adjusted Net Income in the
tables below for the three and six months ended June 30, 2007 and
2006.
TAL INTERNATIONAL GROUP, INC.
Non-GAAP Reconciliations of EBITDA and Adjusted EBITDA
(Dollars in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2007 2006 2007 2006
----------- ------- -------- --------
Net income...................... $20,764 $13,320 $31,850 $22,825
Add (subtract):
Depreciation and amortization 24,686 25,703 49,182 51,192
Write-off of deferred
financing costs............. - 2,367 - 2,367
Interest and debt expense.... 12,195 11,124 24,106 23,580
Income tax expense........... 11,576 7,441 17,742 12,684
----------- ------- -------- --------
EBITDA.......................... 69,221 59,955 122,880 112,648
----------- ------- -------- --------
Add (subtract):
Unrealized (gain) loss on
interest rate swaps(a)...... (11,240) (4,444) (8,049) (3,590)
----------- ------- -------- --------
Adjusted EBITDA................. $57,981 $55,511 $114,831 $109,058
=========== ======= ======== ========
(a) Reflects the reversal of unrealized (gains) losses on interest
rate swap contracts.
TAL INTERNATIONAL GROUP, INC.
Non-GAAP Reconciliation of Adjusted Pre-tax Income and Adjusted Net
Income
(Dollars in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
2007 2006 2007 2006
-------- -------- ------- --------
Income before income taxes...... $32,340 $20,761 $49,592 $35,509
Add (subtract):
Unrealized (gain) loss on
interest rate swaps........ (11,240) (4,444) (8,049) (3,590)
Write-off of deferred
financing costs............ - 2,367 - 2,367
-------- -------- ------- --------
Adjusted pre-tax income......... $21,100 $18,684 $41,543 $34,286
======== ======== ======= ========
Net income...................... $20,764 $13,320 $31,850 $22,825
Add (subtract)(a):
Unrealized (gain) loss on
interest rate swaps........ (7,217) (2,851) (5,169) (2,308)
Write-off of deferred
financing costs............ - 1,519 - 1,521
-------- -------- ------- --------
Adjusted net income............ $13,547 $11,988 $26,681 $22,038
======== ======== ======= ========
(a) All net income adjustments are reflected net of income taxes.
CONTACT: TAL International Group, Inc.
Jeffrey Casucci, 914-697-2900
Vice President
Treasury and Investor Relations