Accelerating Deliveries And Continued Rate Optimization Drive Strong Financial Performance
Four Acquisitions Closed Adding To 2022 Run-Rate
Share Repurchase Authorization Increased To $1.0 Billion
Investor Day To Be Held On November 8
PHOENIX, Nov. 04, 2021 (GLOBE NEWSWIRE) -- WillScot Mobile Mini Holdings Corp. (WillScot Mobile Mini Holdings or the Company) (Nasdaq: WSC), the North American leader in innovative flexible work space and portable storage solutions, today announced third quarter 2021 results and provided an update on operations and the current market environment.
The Company will host an investor day on November 8, 2021 to provide an update on the companys strategic initiatives and growth outlook. The event will take place in New York City and begin at 1:00 p.m. EST. A live webcast of the meeting will be available. To access the webcast, go to the WillScot Mobile Mini Investor Relations site, www.willscotmobilemini.com, and click on Events & Presentations. A replay of the webcast and a transcript will be available after the event.
WillScot Mobile Mini Holdings Financial Highlights1
Highlights of Third Quarter Results
Refer to the Supplemental Pro Forma Financial Information section on Form 10-Q to be filed with the SEC and made available on the WillScot Mobile Mini Holdings Corp. investor relations website for full reconciliations of our reported and pro forma results.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||
| Revenue | $ | 490,552 | $ | 417,315 | $ | 1,376,977 | $ | 929,998 | |||||||
| Consolidated net income (loss) | $ | 61,103 | $ | (6,051 | ) | $ | 85,921 | $ | 71,474 | ||||||
| Adjusted EBITDA1 | $ | 190,149 | $ | 163,559 | $ | 529,229 | $ | 350,623 | |||||||
| Net cash provided by operating activities | $ | 130,447 | $ | 61,368 | $ | 392,055 | $ | 175,095 | |||||||
| Free Cash Flow1 | $ | 78,493 | $ | 28,045 | $ | 251,709 | $ | 74,849 | |||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| Pro Forma Adjusted EBITDA1 by Segment (in thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||
| NA Modular (a) | $ | 106,825 | $ | 100,281 | $ | 307,741 | $ | 287,345 | |||||||
| NA Storage (a) | 59,123 | 46,465 | 154,971 | 131,229 | |||||||||||
| UK Storage | 13,255 | 8,306 | 36,647 | 21,564 | |||||||||||
| Tank and Pump | 10,946 | 8,507 | 29,870 | 26,643 | |||||||||||
| Consolidated Adjusted EBITDA | $ | 190,149 | $ | 163,559 | $ | 529,229 | $ | 466,781 | |||||||
(a) During the third quarter of 2021, the majority of the portable storage product business (approximately 12,000 units or $5 million of quarterly revenue and Adjusted EBITDA) within the NA Modular segment was transitioned to the NA Storage segment. Prior periods have not been adjusted due to immateriality of impact.
Management Commentary1
Brad Soultz, Chief Executive Officer of WillScot Mobile Mini Holdings, commented "our entire portfolio delivered strong financial and operating results in the third quarter, driven by increasing delivery volumes and continued rate optimization in all segments, as well as exciting progress in VAPS penetration in NA Modular. Delivery volumes remained elevated due to broad-based end-market demand. Modular space units on rent in NA Modular inflected positively, increasing about 700 units sequentially from June 30 to September 30, and average portable storage units on rent across both segments in North America increased approximately 16,922 units year-over-year for the quarter, or 14.0%. Average monthly rental rate for modular space units in NA Modular increased by 20.3%, and portable storage unit rental rates in NA Storage increased 6.9% year-over-year. Continued strong price and volume trends in the U.K. and tightening OEC utilization in the Tank & Pump segment, drove year-over-year revenue growth of 30.6% and 26.7%, respectively. Based on our leading market indicators and our internal initiatives, we expect strength in these core leasing KPIs for the foreseeable future. Finally, we expanded our 'Ready to Work' value proposition to new customers as we closed and fully integrated three acquisitions during the quarter and closed a fourth acquisition in October, highlighting the scalability and strength of our platform. We are incredibly excited to welcome those customers, employees, and capabilities to the WillScot Mobile Mini network."
Soultz continued, "We have an aggressive growth mindset, a best in class team, and a history of creating value for our stakeholders, and I am excited to share our plans for the next three to five years at our Investor Day on November 8th in New York."
Tim Boswell, President and Chief Financial Officer of WillScot Mobile Mini Holdings, commented "Our outlook for the remainder of 2021 and our run-rate expectations for 2022 continue to improve, as reflected in our updated financial guidance. Our Adjusted EBITDA margin progressed as we expected, improving 70 basis points sequentially to 38.8% in Q3, driven by an accelerating lease revenue run-rate amidst strong, sustained delivery volumes. Consistent with normal seasonality, we continue to expect strong Adjusted EBITDA margin expansion year-over-year in the fourth quarter and expect to sustain those increases in 2022. We generated $78.5 million of Free Cash Flow during the quarter at a 16% margin, and we are reinvesting that capital in our business to compound our earnings growth. We increased net capex by $18.6 million versus prior year to $52.0 million to support organic initiatives, we invested $56.3 million to acquire three regional storage businesses, and we repurchased $106.3 million of common shares and equivalents, choosing to maintain leverage at 3.7x given the attractiveness of these alternatives. Recognizing that the opportunities ahead for our business are large in magnitude and long in duration, our Board increased our indefinite lived share repurchase authorization to $1.0 billion. Thanks to our team for your incredible execution and to our investors for your support we look forward to seeing you in-person on November 8th.
Third Quarter 2021 Results1
Total revenues increased 17.6% to $490.6 million, while leasing revenues increased 21.1% versus the prior year quarter driven by strong pricing and delivery volume growth in all segments, strong unit on rent growth in NA Storage, stabilized unit on rent volumes in NA modular, and continued growth of value-added products.
Adjusted EBITDA of $190.1 million increased $26.5 million, or 16.2% year-over-year, with growth across all four segments. The transfer of 12,000 storage units on rent in Q3 from NA Modular to NA Storage reduced revenue and Adjusted EBITDA each by $5.0 million in Q3 relative to prior year and increased revenue and Adjusted EBITDA in the NA Storage segment by the same amount. Adjusted EBITDA Margin of 38.8% in the third quarter increased by 70 bps sequentially from the second quarter and declined 40 basis points versus prior year. Similar to the second quarter results, strong year-over-year delivery volume growth drove an additional $9.9 million of variable leasing costs and a higher mix of delivery and installation revenues relative to prior year. Strong delivery volumes and financial results also drove a $6.9 million increase in variable compensation and sales commissions relative to the third quarter of 2020. Together, these factors drove the expected temporary year-over-year margin compression in the third quarter. These elevated activity levels also drove the 6.5% sequential increase in our Leasing and Services Revenues, which we expect will continue to build and drive margin expansion in the fourth quarter heading into 2022.
Net income of $61.1 million for the three months ended September 30, 2021, increased by $67.2 million versus prior year and included $11.1 million of discrete costs expensed in the period related to transaction and integration activities. Discrete costs in the period included $8.6 million of integration and transaction costs and $2.5 million of restructuring costs, lease impairment expense and other related charges.
Free Cash Flow increased by $50.5 million year over year to $78.5 million. This represents a 16.0% free cash flow margin, including a $17.8 million year-over-year increase in capital expenditures for rental equipment to support strong delivery volumes in 2021 and tightening utilization across the NA Storage, UK Storage, and Tank and Pump segments.
Capitalization and Liquidity Update1,3
As of September 30, 2021
2021 Outlook1, 2, 3
This guidance is subject to risks and uncertainties, including those described in "Forward-Looking Statements" below.
| 2020 Pro Forma Results | Prior 2021 Outlook | Current 2021 Outlook | |||
| Revenue | $1,652 million | $1,800 million - $1,850 million | $1,850 million - $1,880 million | ||
| Adjusted EBITDA1,2 | $646 million | $710 million - $730 million | $720 million - $740 million | ||
| Net CAPEX2,3 | $161 million | $200 million - $230 million | $200 million - $230 million |
1 - Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow are non-GAAP financial measures. Further information and reconciliations for these Non-GAAP measures to the most directly comparable financial measure under generally accepted accounting principles in the US ("GAAP") is included at the end of this press release.
2 - Information reconciling forward-looking Adjusted EBITDA and Net CAPEX to GAAP financial measures is unavailable to the Company without unreasonable effort and therefore no reconciliation to the most comparable GAAP measures is provided.
3 - Net CAPEX is a non-GAAP financial measure. Please see the non-GAAP reconciliation tables included at the end of this press release.
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Free Cash Flow Margin, Pro Forma Revenue, Adjusted Gross Profit, Adjusted Gross Profit Percentage, Net Income Excluding Gain/Loss from Warrants, and Net CAPEX. Adjusted EBITDA is defined as net income (loss) before income tax expense, net interest expense, depreciation and amortization adjusted for non-cash items considered non-core to business operations including net currency gains and losses, goodwill and other impairment charges, restructuring costs, costs to integrate acquired companies, costs incurred related to transactions, non-cash charges for stock compensation plans, gains and losses resulting from changes in fair value and extinguishment of warrant liabilities, and other discrete expenses. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue. Free Cash Flow is defined as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities. Free Cash Flow Margin is defined as Free Cash Flow divided by Total Revenue. Net CAPEX is defined as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities. Our management believes that the presentation of Net CAPEX provides useful information to investors regarding the net capital invested into our rental fleet and plant, property and equipment each year to assist in analyzing the performance of our business. Pro Forma Revenue is defined the same as revenue, but includes pre-acquisition results from Mobile Mini for all periods presented. Adjusted Gross Profit is defined as gross profit plus depreciation on rental equipment. Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue. Net Income Excluding Gain/Loss from Warrants is defined as Net Income plus or minus the impact of the change in the fair value of the warrant liability. The Company believes that our financial statements that will include the impact of this mark-to-market expense or income may not be necessarily reflective of the actual operating performance of our business. The Company believes that Adjusted EBITDA and Adjusted EBITDA margin are useful to investors because they (i) allow investors to compare performance over various reporting periods on a consistent basis by removing from operating results the impact of items that do not reflect core operating performance; (ii) are used by our board of directors and management to assess our performance; (iii) may, subject to the limitations described below, enable investors to compare the performance of the Company to its competitors; and (iv) provide additional tools for investors to use in evaluating ongoing operating results and trends. The Company believes that pro forma revenue is useful to investors because they allow investors to compare performance of the combined Company over various reporting periods on a consistent basis. The Company believes that Net CAPEX provide useful additional information concerning cash flow available to meet future debt service obligations. Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. These non-GAAP measures should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP. Other companies may calculate Adjusted EBITDA and other non-GAAP financial measures differently, and therefore the Company's non-GAAP financial measures may not be directly comparable to similarly-titled measures of other companies. For reconciliation of the non-GAAP measures used in this press release (except as explained below), see Reconciliation of Non-GAAP Financial Measures" included in this press release.
Information reconciling forward-looking Adjusted EBITDA to GAAP financial measures is unavailable to the Company without unreasonable effort. We cannot provide reconciliations of forward-looking Adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of our control and/or cannot be reasonably predicted, such as the provision for income taxes. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the Company without unreasonable effort. Although we provide a range of Adjusted EBITDA that we believe will be achieved, we cannot accurately predict all the components of the Adjusted EBITDA calculation. The Company provides Adjusted EBITDA guidance because we believe that Adjusted EBITDA, when viewed with our results under GAAP, provides useful information for the reasons noted above.
On July 1, 2020, Williams Scotsman, Inc. closed the merger with Mobile Mini, Inc. (the "Merger") and assumed the name WillScot Mobile Mini Holdings Corp. (Nasdaq: WSC). Our reported results only include Mobile Mini for the periods subsequent to the Merger. Our Pro Forma Results include Mobile Mini's results as if the Merger and financing transactions had occurred on January 1, 2019, which we believe is a better representation of how the combined company has performed over time. Following the Merger, we expanded our reporting segments from two segments to four reporting segments. The North America Modular segment aligns with the WillScot legacy business prior to the Merger and the North America Storage, UK Storage and Tank and Pump segments align with the Mobile Mini segments prior to the Merger.
Conference Call Information
WillScot Mobile Mini Holdings will host a conference call and webcast to discuss its third quarter 2021 results and outlook at 10 a.m. Eastern Time on Friday, November 5, 2021. The live call may be accessed by dialing (855) 312-9420 (US/Canada toll-free) or (210) 874-7774 (international) and asking to be connected to the WillScot Mobile Mini Holdings call. A live webcast will also be accessible via the "Events & Presentations" section of the Company's investor relations website www.willscotmobilemini.com. Choose "Events" and select the information pertaining to the WillScot Mobile Mini Holdings Third Quarter 2021 Conference Call. Additionally, there will be slides accompanying the webcast. Please allow at least 15 minutes prior to the call to register, download and install any necessary software. For those unable to listen to the live broadcast, an audio webcast of the call will be available for 60 days on the Companys investor relations website.
About WillScot Mobile Mini Holdings
WillScot Mobile Mini Holdings trades on the Nasdaq stock exchange under the ticker symbol WSC. Headquartered in Phoenix, Arizona, the Company is a leading business services provider specializing in innovative flexible workspace and portable storage solutions. WillScot Mobile Mini services diverse end markets across all sectors of the economy from a network of approximately 275 branch locations and additional drop lots throughout the United States, Canada, Mexico, and the United Kingdom.
Forward-Looking Statements
This press release contains forward-looking statements (including the guidance/outlook contained herein) within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. The words "estimates," "expects," "anticipates," "believes," "forecasts," "plans," "intends," "may," "will," "should," "shall," "outlook" and variations of these words and similar expressions identify forward-looking statements, which are generally not historical in nature. Certain of these forward-looking statements include statements relating to: strength in core leasing KPIs for the foreseeable future, the scalability and strength of our platform, our ability to expand and sustain expanded margins, and our revenue, Adjusted EBITDA and Net Capex outlooks. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other important factors, many of which are outside our control, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions, they are predictions and we can give no assurance that any such forward-looking statement will materialize. Important factors that may affect actual results or outcomes include, among others, our ability to acquire and integrate new assets and operations; our ability to achieve planned synergies related to acquisitions; our ability to manage growth and execute our business plan; our estimates of the size of the markets for our products; the rate and degree of market acceptance of our products; the success of other competing modular space and portable storage solutions that exist or may become available; rising costs adversely affecting our profitability; potential litigation involving our Company; general economic and market conditions impacting demand for our products and services; our ability to maintain an effective system of internal controls; and such other risks and uncertainties described in the periodic reports we file with the SEC from time to time (including our Form 10-K/A for the year ended December 31, 2020), which are available through the SECs EDGAR system at www.sec.gov and on our website. Any forward-looking statement speaks only at the date which it is made, and the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Additional Information and Where to Find It
Additional information can be found on the company's website at www.willscotmobilemini.com.
| Contact Information | ||
| Investor Inquiries: | Media Inquiries: | |
| Nick Girardi | Scott Junk | |
| investors@willscotmobilemini.com | scott.junk@willscotmobilemini.com | |
WillScot Mobile Mini Holdings Corp.
Condensed Consolidated Statements of Operations
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in thousands, except share and per share data) | 2021 | 2020 | 2021 | 2020 | |||||||||||
| Revenues: | |||||||||||||||
| Leasing and services revenue: | |||||||||||||||
| Leasing | $ | 363,396 | $ | 300,082 | $ | 1,022,237 | $ | 678,577 | |||||||
| Delivery and installation | 99,699 | 84,694 | 274,883 | 187,404 | |||||||||||
| Sales revenue: | |||||||||||||||
| New units | 15,860 | 19,360 | 37,823 | 38,736 | |||||||||||
| Rental units | 11,597 | 13,179 | 42,034 | 25,281 | |||||||||||
| Total revenues | 490,552 | 417,315 | 1,376,977 | 929,998 | |||||||||||
| Costs: | |||||||||||||||
| Costs of leasing and services: | |||||||||||||||
| Leasing | 82,448 | 64,788 | 235,375 | 162,344 | |||||||||||
| Delivery and installation | 80,991 | 66,354 | 228,280 | 153,742 | |||||||||||
| Costs of sales: | |||||||||||||||
| New units | 11,499 | 12,935 | 25,660 | 25,469 | |||||||||||
| Rental units | 5,603 | 8,837 | 22,870 | 16,446 | |||||||||||
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