GFN - Earnings call transcript Q1 2019

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Operator

Welcome to the General Finance Corporation's Earnings Conference Call for the First Quarter Ended September 30, 2018. Hosting the call today for the company's corporate offices in Pasadena, California are Mr. Jody Miller, President and Chief Executive Officer; and Mr. Charles Barrantes, Executive Vice President and Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 2:30 p.m. Time. Eastern Instructions]. [Operator Thank you. to pleasure the over my call turn Mr. now to is It and President, General Vice Wilson, Secretary General Chris Counsel of Finance Corporation. Please Mr. go ahead, Wilson.

Christopher Wilson

Operator. you, Thank

from assurance These expectations could our that reasonable, of we for as to raise Before our risks our correct. the respect availability secure products customer believe contain such our a of transportation or U.S. actual increases customer for of would to statements or this I uncertainties supplies operations; represented statements. and for difficult funds; manufacturing are in to industries; competitive and from staff not customers; or capital of assets. adequate forward-looking Canadian changes our oil we not be there litigation; pressures; to remind businesses; integrate our other expect resolution gas the expectations procure to in can by or contract disruptions; to but New ability or financial the write-off and begin adverse our our declines differ Australian us ability as prove demand that forward-looking businesses and or a views our part the construction and relative for defaults to, the materially labor results of you described services levels Australian, no results; with statements like include, Zealand control; or rates disputes but sufficiently qualified of that dollar such are those changes; conference that future adequate additional products forward-looking variable-rate employees in our intangible in do acquisition the and certain goodwill are any to ability may to key interest industries regulatory limited of demand; or indebtedness; statements. will be industries, outcomes or cause to our Such insolvencies; forward-looking U.S. to We and borrow construction dollar; call today, that operating and all or perform

financial regarding posted any the see website These the these to our periodic intent Factors as at obligation Risk Miller, arrive ahead. with and be General on forward-looking reconciliation our EBITDA. our Officer. GAAP company go disclaims non-U.S. SEC statements. define this reports earnings in In call, certain and our I'd risks, judgment like over also details more call Jody, such and release is to at Jody or adjusted filed adjusted the and to EBITDA to now, statements at XX-Q. measures For President www.generalfinance.com. And quarterly we A discuss the the section Finance Chief how of this will time, will update please Form turn forward-looking report we please Corporation and Executive of in included conference represent of

Jody Miller

and then overview a Thank XXXX operations, fiscal Chuck Good you, will outlook first begin brief joining our today morning, year for our and and CFO, I quarter the fiscal with us of discussion of provide a will appreciate you our conference the financial we for remainder year. call. Chris. our Barrantes,

open will the up for call we remarks, his questions. Following

X where to extremely years. revenue level continued has the solid we pleased quarterly highest our in of delivered XXXX almost our strong company's into the highest history, level our are of very with that adjusted we experienced fiscal start in We quarter in year. momentum EBITDA our quarterly The first

both million XX% first year-over-year higher revenues doubled revenues and all driven quarter, the fleet average $XX.X contribute nearly quarter which across our sales, by operations increased strength large due unit increasing XX%, year-over-year, of driven in by leasing X Our Sales higher to healthy in increase. lines by over rates and to overall higher product growth, of majority quarter. of vast Leasing the see utilization North with the total the just virtually revenues million in $X mostly during American continue its leasing markets, in by sales demand end revenues. the

core portable at were strong and driven business as of Our storage these office perform markets. demand execution storage the the continues of broad-based high-end our ground consistent its level end quarter the during by and to particularly expectations, our across for majority containers continues Pac-Van brand markets and, generated both its in quarter two the new XX the in increases and Promoter again, product and Score XX%, of year-over-year of once posted months. lines XX% rental to for revenue XX world-class and last Net respectively. existing enhance a Demand

growth, organic America adjacent portable the into remain our on by particularly, storage geographically to brand markets. addition focused North expanding business, container Pac-Van building In we throughout

closed to During adding both we one New California quarter, the in in into the the a completed that quarter, provided us England new New positions Bakersfield, strong two Florida Hampshire, an Baltimore-D.C. acquisitions, our being acquisition also Miami, entry and region. other in In current market. our we presence and the

We are continues now our in half to U.S., pipeline XXX top and the healthy. the be MSAs over just serving acquisition of

Our average the of achieve utilization delivered year-over-year and quarter for very and eighth gas Texas Permian liquid higher adjusted ninth activity year on and quarter row. rates Basin lease fourth enabling leasing remains to in containment and Oil sequential to a us EBITDA average XXXX growth for healthy, business monthly higher in consecutive the quarter, in basis. fleet fiscal generating revenues a production a quarter North America strong compared once again and the

row to an quarter products. This and manufacturing order ongoing sixth its in its North specialty and tanks in improvement external steel-related increase to other in we have continues backlog. positive sales an is a Our operations pipeline American EBITDA. quarter be of growth stand-alone consecutive due This sequential for delivered demand adjusted healthy and outlook sales as of positive fourth to customers

Pacific our turning region. to Now Asia

On EBITDA. of resulting increased increase a in in construction its eighth a growth growth continues Our spread across growth basis, region leasing end was lease in in average X basis, posting local-currency majority out a with marking by revenues. mining, revenues markets revenue sectors. and consumer, transportation, average consecutive and utilization the where in adjusted both its noticeable is increases of local-currency year-over-year quarter positive Asia driven by leasing last Pacific momentum, in delivered of on units revenues increase leasing leasing its quarter growth higher first has in and quarters X%, The fifth improved sales on The its Wolf Royal industrial lease, fleet rates. year-over-year

leading Pacific region they extent and, remains acquisitions. Asia Our upon building organic to greenfield available, accretive team growth, the position focused openings market its of a combination across through become

portable conclude, New Zealand, successfully we business optimism the X us country in continued operates results provide locations our in future. mentioned of the a storage During we container last acquisition about completed the strong To our as quarter, call. on which the across

the We have our both in market to leadership organic growth ability strengthen and as as in Pacific North expansion well America region. Asia opportunities

in demand As remain ongoing container with capital always, containers and storage product our on an we deploying lines. allocation, we focus disciplined office see portable our healthy capital where

the Chuck another Our results results. first remainder turn quarter now review laid and outlook year. for of we over for our call have financial I'll the were the for the of his Barrantes to year strong, financial solid and groundwork

Charles Barrantes

Thanks, Jody.

I document at some and to on website. time filing about as report encourage be available amount We systems annual parties which shortly, which substantial we XX-Q it EDGAR read filing today. other our this our Form our investors will And on interesting contains be of the on company, will will information and it SEC's of both discuss

the quarter first first manufacturing in gas, our an revenues Total quarter sales financial operations the construction including our $XX XX%. industrial first American XX% revenues were first our quarter period, to million primarily and quarter for revenues $XX.X the an XXXX. fiscal to versus the leasing The of but for compared an quarter the American an of XXXX compared first Leasing year. million of sectors, In quarter education most North total operations. the Revenues the the XXXX, our quarter were $XX.X increase million, of revenues over sales of American with North fiscal prior quarter was XX% including first total for increase sales $XX.X increase the Nonmanufacturing totaled of results. XX%. across million for intercompany and were in were sales for $XXX,XXX oil leasing This $XX.X over XX% period, of XX% the and for $XX.X of prior quarter North year-ago the million. million the year $X.X $X.X nonmanufacturing fiscal million, in year intercompany increase Turning to $X.X of sectors. revenues commercial, increase in operations, of to year year-ago compares year's million comprised of in million of quarter, the

and million tanks to specialty of for demand the operations, Asia and specialty revenues increased a saw operations steel-related manufacturing leasing quarter than XXXX, our year compared In million mentioned, chassis. less particularly first Jody quarter our first X%. As decrease products, totaled of the $XX.X fiscal for Pacific other for $XX tanks

for in was And quarter EBITDA the North the periods. However, revenues decreases million, translation was retail as as on between an Lone and million, the total industrial and EBITDA adjusted $XX prior quarter up EBITDA and by the XX%. adjusted year's was increased Star's compared transportation to In XX% primarily well adjusted Leasing by foreign in at year. million from quarter, utilities, negative the total growth. increased a $X.X Pac-Van up driven XX% year-over-year in were increased X%. XX%. million sectors. Adjusted construction transportation, XXXX. a compared an by America, quarter first our seventh and Revenues quarter, Consolidated increase up of XXX% year a $XX.X basis, and exchange offset in operations EBITDA increases the to of percentage million a the effect leasing from for mining, mining $XX.X margin approximately $XX.X fiscal prior quarter $XX.X revenues was local-currency X% was sectors the sectors revenues million of year-ago on a consumer in basis consecutive This the increase adjusted on year-over-year; was the EBITDA year-over-year X% of of basis, EBITDA XX%, the in by local-currency in as first and adjusted

For quarter of year's first our manufacturing quarter last basis, the compared $XXX,XXX operations million was $X stand-alone EBITDA adjusted to a swing. almost for approximately EBITDA $XXX,XXX, an adjusted on loss

in net per XXXX first between attributable $XXX,XXX partially a ago offset quarter. $X.X Asia quarter diluted XX% to first in of was year-ago quarter the noncash million, the share in million last compared higher a borrowings, Included quarter Pacific per of weighted this the Australian $X.X quarter loss year. by primarily by million The of area XX.X% quarter. year of the up to million was in diluted our higher higher Net and $X.XX interest million loss convertible in for or first quarter first EBITDA average common of for bifurcated from interest $X.XX first increase average is adjusted X.X% weaker driven an a the loss year's the for in On compared and the the or EBITDA change was XXXX a increased in periods. $X.X prior Pacific's derivatives of the valuation X%. dollar This in the basis, period, adjusted in million Pacific increase net Interest local-currency quarter $XXX,XXX expense Asia the of area. year's share. was first year-ago $X.X outstanding compares for stand-alone by Asia notes expense was from to $X.X to $X.X charge due the stockholders to rate

charge, fiscal $XXX,XXX common preferred paid $X.X XXXX shareholders on Excluding income our had stock. of the Both to quarter the million. net attributable approximately include this have for dividends periods would noncash first

before year XXXX, $X.X flow For of cash the we the first generated quarter, fiscal year an of $XX.X in XX%. compared quarter fleet prior million increase of free to activity million

leverage for Turning At compares with reduction June note the the conversion operating Wolf at ratio X.Xx combination leverage September better the convertible trailing forced which months, the at and in factors, X.Xx a The Royal net XX, results. had to XX our is XX. a of leverage the of net balance meaningfully including very of company due a to favorable sheet. of ratio

we for company-wide year our fiscal outlook, to year remainder positive outlook the increasing excellent first fiscal are our and operating results XXXX. Based for in Turning XXXX. on of guidance the our quarter generally

additional in now exchange the the we consolidated $X.XX versus I back acquisitions million the This take that the EBITDA and not fiscal year the XXXX and the dollar of fiscal concludes outlook prepared the $XXX turn of be dollar comments, fiscal for consolidated impact does our adjusted fiscal in XX% will question-and-answer rest occur the session. may of XX% averages fiscal year, year U.S. the the that for revenues would Assuming Australian the million, like call XXXX. for operator XXXX remainder into increase the $XXX This the between now year for of to during year. any and to expect rate range will account to for

Operator

[Operator Instructions].

Your Scott Oppenheimer. Schneeberger first with from question comes

Daniel Hultberg

in a talk you how filling the what outlook impact also for Daniel little Scott. if in can It's quarter. bit comment curious far across the season market's on here. And is up? on the I'm as from then? we about the retail -- as Good Can shaping you see end holiday and the visibility

Jody Miller

Sure. This is Daniel. Thanks, Jody.

we to be Construction going little -- we year. bit to outlook our I far And to very as to think, norm very a very season. going bit type remain of remodels, up is retail a to the can back hotel kind or to those as foresee. be last a consistent were be our good our of looks solid commercial It's in solid. and back things and remodels to in continues general, be off be this year little side, of solid. We're

stable can as foresee, is had we to side the same get should far we continue as we momentum Pac-Van and So then. the very

Daniel Hultberg

pricing is side? Got the opportunity current there it. the If How can you about the environment? looking on and Pac-Van talk

Jody Miller

Yes.

GLO, raise very had prices in several on which continuing. consistent, office, containers is similar. X.X% this so is solid see mainline blended, to able quarter which our and storage containerized We was that product, been was the we've quarters the about So we and for very and the

Daniel Hultberg

out I Great. Can side? Star. you Lone couple of quarters do good volume look you gears pricing the would here. How -- how calendar switch obviously, momentum characterize you mean, to if and both the right into on see visibility 'XX the we

Jody Miller

Yes.

at extremely of Permian, of it to continues I And look We're and in just kind the a have kind premier everything be strong kind this looking Permian, in X-month shelf outlook we top stable way customers. player we of to list think, player the the best pipelines. Permian. the a very is of in do they and our kind of

be to concern which seeing, slowing the new has couple a product onboard We only a months, next of in been of coming Some the at got the from pipelines we getting are no the XX really customers bit down out. on X year. changes. everything will of But the major here end

and reasons year. up ramping so spend the they to others, money of budget before are of kind budget Just end the

to So it's kind pretty of offset and everything that we had stable. visibility on be seems

Daniel Hultberg

Got bit? we it. of Final couple me. allocation, can a the for one from think talk quarters? about we that How that next Capital little about

Jody Miller

Yes.

all ground would the we'll We're cautiously. opportunities, If into capital be look think, I at of GLO, containerized The on tank longer-term very product. are our side. but growing. there's we all basically our putting consistent -- the of that, levels

XX% call, mentioned and on XX% the containerized I the As product growth. on

look at see and we and active and just definitely consistent, continue like as been that to there lines acquisitions we well. And very sense. We're have very we're have don't that feeding opportunity. So changing those make

Operator

Instructions]. [Operator Private a question from do a have Investor, [ph]. And Luis we Hernandez

Unidentified Analyst

last guidance, news. year Revised quarter. to year? do And this roughly well, Asia only see you this be It's growth regarding high. that my similar in as Do see pretty question good Or is the is EBITDA guys guys you Pacific. year? going there Great

Jody Miller

This is Jody.

current [indiscernible] growth, little you There's that put where would pretty the comp I their doing think a bit, other really sale good this last most that's gear to to that We've would back a sale one-off on. there, be which focus the of executing to us got think, but leasing year [indiscernible] And opportunities. of just sector our had we're continues But sale, which helped can because going bit to job grow camp the I be not the important. coming as the and hard plan. Leasing talks overall, about the positive. got which and year-over-year. But to biggest optimistic growth work, overall, huge same year which sale know, huge I challenge a the in cautiously energy little think a stay we solid going quarter. will we're last is some year, similar, they're we've follow-on and we're get overcoming we

Unidentified Analyst

on then Star. And great. Lone Okay,

an plans industry want for have affect if you Assuming all to I but -- pipeline to how idea the the affect expand capacity the on and us? I guess, will that mean, positively, just positive that, know it would would this I how it

Jody Miller

is to everybody mean, I crude. knows that economical place most the think the Permian pull Yes. I

far been has the Permian slowdown the of pipeline the out as the areas. producing less of only as and So more

that's will attractive, I have capacity which Eagle they on Ford think pipeline why don't we in presence think the positive there. a the I be there to we're setting of it's again, I fracking So Permian. step-up, base to the drilling if slow but being handle a huge really up But it. a speed and a focused be oil. customer for more the rid that get with well. good as next process can there it'll And the think outcome steady have position a going great we're

put Lone the the now, help and higher on in being get of progress folks that prices had thing and not that as so then on a our and pricing. scarce, positive Star side, things new as other tanks tank as being on extremely see the more lot busier continue good would prices into with tank building are trends to We've should very pricing I well. the future the much get the and tanks side, to fleet, steel So

Unidentified Analyst

XXXX the on now? And the right far from are XXXX -- peak the rates how tanks great. Great, still we

Jody Miller

Yes.

X,XXX peak-peak was And on which tank. right X,XXX we're and now, is this about fleet, just all around the is over XX%. blended, it per So

So we've tell say with whether continue back pricing that that strategy. as good one reported gets that come, will on and so upside had, there's we're we pricing. continued to still I ever going on might to positive call, it you the But tanks the

Operator

And this time. there questions further at are no

Jody Miller

to like I'd to interest to Finance thank look quarter. continued joining Operator. you, call appreciate Corporation for next Thank your the in speaking General forward and you We today. you

Operator

does you. call. Thank This conference today's conclude

You disconnect. may now

General Finance (GFNCP) 11 Nov 182019 Q1 Earnings call transcript