PHOENIX, Feb. 25, 2021 (GLOBE NEWSWIRE) -- WillScot Mobile Mini Holdings Corp. (WillScot Mobile Mini Holdings or the Company) (Nasdaq: WSC), the North American leader in turnkey modular space and portable storage solutions, today announced fourth quarter and full year 2020 financial results and provided an update on merger integration activities, the current market environment and its 2021 outlook.
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.
WillScot Mobile Mini Holdings Financial Highlights1
Highlights of Fourth Quarter Results
Highlights of Full Year 2020 Results
Refer to the Supplemental Pro Forma Information section on Form 10-K 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 December 31, | Year Ended December 31, | ||||||||||||||
| (in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Revenue | $ | 437,647 | $ | 278,045 | $ | 1,367,645 | $ | 1,063,665 | |||||||
| Consolidated net income (loss) | $ | 46,468 | $ | 8,928 | $ | 71,879 | $ | (11,543 | ) | ||||||
| Adjusted EBITDA1 | $ | 179,684 | $ | 98,216 | $ | 530,307 | $ | 356,548 | |||||||
| Net cash provided by operating activities | $ | 129,717 | $ | 73,490 | $ | 304,812 | $ | 172,566 | |||||||
| Free Cash Flow1 | $ | 87,430 | $ | 43,682 | $ | 162,279 | $ | 19,984 | |||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| Pro Forma Adjusted EBITDA1 by Segment (in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| NA Modular | $ | 107,460 | $ | 98,216 | $ | 394,805 | $ | 356,548 | |||||||
| NA Storage | 53,372 | 51,182 | 184,601 | 169,697 | |||||||||||
| UK Storage | 9,516 | 6,588 | 31,080 | 25,758 | |||||||||||
| Tank and Pump | 9,336 | 10,313 | 35,979 | 47,438 | |||||||||||
| Consolidated Adjusted EBITDA | $ | 179,684 | $ | 166,299 | $ | 646,465 | $ | 599,441 | |||||||
Management Commentary1
"Our WillScot Mobile Mini team concluded a transformational year and set the foundation for an exciting new chapter of growth and value creation, despite unprecedented operating challenges," said Brad Soultz, Chief Executive Officer of WillScot Mobile Mini Holdings. "Our portfolio continued to demonstrate its resilience in the fourth quarter as we grew our leasing and services revenue both sequentially and versus prior year, driven by 12.9% average rental rate growth in our NA Modular segment, and impressive rates and volumes in our Storage segments. New order rates, pricing, and value-added products penetration are all trending positively heading into 2021 across our diversified segments and end markets."
"As we progress through the integration, we are developing an expanding portfolio of growth initiatives, which will propel the business for years to come. Some, such as continued price performance and penetration of value-added services are well underway, whereas others such as cross-selling and implementation of operating best practices across our segments are in their infancy and will develop in 2021. We are on track to complete our system migration in the first half of the year, as planned, which will enable further synergies. And, we also started developing our Environmental, Social, and Governance (ESG) roadmap, which will build on the values shared across our organization, while highlighting the inherently sustainable value proposition in our temporary modular and storage solutions."
Soultz continued, I am proud of the entire team for bringing 2020 across the finish line and am excited for the next phase of our journey. As our teams have coalesced, Kelly Williams has announced his intention to transition from WillScot Mobile Mini effective July 31, 2021. I could not have asked for a better partner than Kelly in planning and executing our integration, where he has played an instrumental role. On behalf of the entire WillScot Mobile Mini Holdings Board of Directors, I want to thank him for contributions that will drive years of value creation for our stakeholders. I am also incredibly excited about the broader management structure that we have in place to drive our long-term goals. We are positioned to effectively harness the combined operating expertise of the legacy WillScot and Mobile Mini organizations as we journey forward."
Chief Financial Officer of WillScot Mobile Mini, Tim Boswell, noted that "With the integration ongoing, we delivered another outstanding quarter with acceleration across our key financial metrics. Free cash flow in the fourth quarter increased by $44 million year over year to $87 million. This represents a 20% free cash flow margin in the quarter and shows obvious progression towards the $500 million run-rate free cash flow milestone that we identified one year ago when we were developing our vision for WillScot Mobile Mini. Steady execution of our leasing KPIs, execution of synergies and operating efficiencies, and disciplined capital allocation are all working together to drive free cash flow and returns. We have a high degree of visibility into continued improvements, given our unique business model. Pro forma leverage decreased to 3.8x in the fourth quarter and is well on track to be within our target range of 3.0x to 3.5x by the end of 2021. We also used our share repurchase authorization opportunistically to buy back $35 million of outstanding warrants and share equivalents. Our 2021 guidance is supported by growth initiatives that are within our control and will put us on an exciting trajectory for 2022 and beyond."
Fourth Quarter 2020 Results1
Total revenues increased 57.4% to $437.6 million, while leasing revenues increased 67.6% versus the prior year quarter driven primarily by the addition of Mobile Mini's revenues to our consolidated results.
Adjusted EBITDA of $179.7 million increased $81.5 million, or 83.0% year over year. Of this increase, $72.2 million was driven by the addition of Mobile Mini to our consolidated results, with the remainder driven by strong organic growth in the NA Modular segment.
Net income of $46.5 million for the three months ended December 31, 2020 was up $37.6 million versus prior year.
Free Cash Flow increased by $43.7 million year over year to $87.4 million, representing a 20% free cash flow margin.
Full Year 2020 Results1
Total revenues increased $303.9 million, or 28.6%, year over year to $1,367.6 million, driven by a 32.3% increase in leasing and services revenue due to improved pricing and VAPS penetration in our NA Modular segment, and increased volumes due to the addition of Mobile Mini's revenues to our consolidated results following the Merger on July 1, 2020.
Adjusted EBITDA of $530.3 million, represented a $173.8 million, or 48.8%, increase year over year. Of this increase, $135.5 million was driven by the addition of Mobile Mini to our consolidated results, and the remainder was driven by strong organic growth in our NA Modular segment of $38.3 million, or 10.7%.
Adjusted EBITDA margin expanded 530 bps year over year to 38.8% and with strong margin expansion across all four operating segments. The margin expansion was driven by strong pricing and value-added products growth, a revenue mix shift weighted towards higher margin leasing revenues, and proactive cost reductions implemented in Q2 and maintained through Q4 to adjust for demand disruptions due to the COVID pandemic.
Net income of $71.9 million for the year ended December 31, 2020 was up $83.4 million versus prior year and included a $42.4 million loss on extinguishment of debt related to our recent refinancing activities and $93.8 million of discrete costs expensed in the period related to transaction and integration activities, partly offset by a $51.5 million non-cash income tax benefit.
Free Cash Flow increased by $142.3 million year over year to $162.3 million.
Capitalization and Liquidity Update1,3
Through a series of strategic transactions leading up to and immediately following the Merger, we refinanced and optimized all of WillScot's and Mobile Minis pre-existing debt and put in place a robust capital structure that we believe will support the business for years to come.
As of December 31, 2020
2021 Outlook1, 2, 3
This guidance is subject to risks and uncertainties, including those described in "Forward-Looking Statements" below. The 2021 guidance includes:
| 2020 Pro Forma Results | 2021 Outlook | ||
| Revenue | $1.65 billion | $1.7 billion - $1.8 billion | |
| Adjusted EBITDA1,2 | $646.5 million | $675 million - $715 million | |
| Net CAPEX2,3 | $161.4 million | $180 million - $220 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, pro forma revenue, 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, 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. 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. 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. However, 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.
Conference Call Information
WillScot Mobile Mini Holdings will host a conference call and webcast to discuss its fourth quarter 2020 results and outlook at 10 a.m. Eastern Time on Friday, February 26, 2021. The live call can 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 Fourth Quarter 2020 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. Based in Phoenix, Arizona, WillScot Mobile Mini Holdings is a North American leader in turnkey modular space and portable storage solutions. It was formed in 2020 upon the merger of leaders in the modular space and portable storage markets. Together the WillScot and Mobile Mini brands operate approximately 275 locations across the United States, Canada, Mexico, and the United Kingdom with a combined fleet of over 350,000 portable offices and storage containers. The Company leases turnkey office space and storage solutions for temporary applications across a diverse customer base in the commercial and industrial, construction, retail, education, health care, government, transportation, security and energy sectors. WillScot Mobile Mini creates value by enabling customers to add space efficiently and cost-effectively when the solution is perfect, productivity is all the customer sees.
Forward-Looking Statements
This news release contains forward-looking statements (including the earnings 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: our long-term growth prospects, the ability of our capital structure to support the business, our future cash flow and liquidity, our deleveraging trajectory, continued VAPS penetration opportunities, 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, it 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 (including cost increases resulting from tariffs); 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 for the year ending December 31, 2019), 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 Corporation
Consolidated Statements of Operations
(in thousands, except share and per share data)
| Years Ended December 31, | ||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||
| Revenues: | ||||||||||||||
| Leasing and services revenue: | ||||||||||||||
| Leasing | $ | 1,001,447 | $ | 744,185 | $ | 518,235 | ||||||||
| Delivery and installation | 274,156 | 220,057 | 154,557 | |||||||||||
| Sales revenue: | ||||||||||||||
| New units | 53,093 | 59,085 | 53,603 | |||||||||||
| Rental units | 38,949 | 40,338 | 25,017 | |||||||||||
| Total revenues | 1,367,645 | 1,063,665 | 751,412 | |||||||||||
| Costs: | ||||||||||||||
| Costs of leasing and services: | ||||||||||||||
| Leasing | 227,376 | 213,151 | 143,120 | |||||||||||
| Delivery and installation | 220,102 | 194,107 | 143,950 | |||||||||||
| Costs of sales: | ||||||||||||||
| New units | 34,841 | 42,160 | 36,863 | |||||||||||
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