PHOENIX, Aug. 10, 2020 (GLOBE NEWSWIRE) -- ?WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini Holdings” or the “Company”) (Nasdaq: WSC), a North American leader in turnkey modular space and portable storage solutions, today announced second quarter 2020 financial results, provided an update on the recently closed merger and the current market environment, and accordingly, updated its 2020 outlook.
On July 1, 2020, the Company, formerly known as WillScot Corporation (“WillScot”), through its subsidiary, closed the merger with Mobile Mini, Inc. (“Mobile Mini”) and changed its name to WillScot Mobile Mini Holdings Corp (the “Mobile Mini Merger”). The financial and operational data below reflect the standalone results of each of WillScot and Mobile Mini prior to the closing of the Mobile Mini Merger.
WillScot Mobile Mini Holdings’ Second Quarter 2020 Financial Highlights1,4
Highlights of WillScot’s Reported Results
Highlights of Mobile Mini’s Reported Results
Quarterly financial information and the related management's discussion and analysis of financial condition and results of operations of Mobile Mini, for the quarterly period ended June 30, 2020, will be filed by the Company on a Current Report on Form 8-K and will be available on the SEC's EDGAR system.
Consolidated Operations Update
The following historical results, tables, and commentary relate to WillScot. The discussion of capitalization and liquidity, the updated financial outlook, and the discussion of the forward-looking capital allocation priorities relate to the combined company, WillScot Mobile Mini Holdings. A Mobile Mini standalone earnings presentation for the second quarter of 2020 is available on the WillScot Mobile Mini Holdings investor relations website. Financial information and results for periods following the closing of the Mobile Mini Merger will be presented for WillScot Mobile Mini Holdings.?
|Three Months Ended June 30,||Six Months Ended June 30,|
|Consolidated net income (loss)4||$||12,833||$||(11,438||)||$||9,159||$||(21,467||)|
|Net cash provided by operating activities||$||75,379||$||44,798||$||113,727||$||60,054|
|Free Cash Flow1||$||38,996||$||1,599||$||46,804||$||(24,959||)|
|Three Months Ended June 30,||Six Months Ended June 30,|
|Adjusted EBITDA1 by Segment (in thousands)||2020||2019||2020||2019|
|Modular - US||$||90,613||$||80,547||$||172,296||$||156,490|
|Modular - Other North America||6,907||7,007||14,766||14,415|
|Consolidated Adjusted EBITDA||$||97,520||$||87,554||$||187,062||$||170,905|
Brad Soultz, Chief Executive Officer of WillScot Mobile Mini Holdings, commented, “We completed the transformational merger between WillScot and Mobile Mini on July 1, 2020, establishing the Company as the market leader of North American modular space and portable storage solutions. Our teams truly are stronger together, as we work hand-in-hand with Kelly and the Mobile Mini team to prioritize our integration and execution efforts while driving the business forward, as evidenced by the outstanding second quarter results at both companies. This combination provides our customers with a broader offering of premium rental products while introducing new idiosyncratic revenue and earnings growth levers, which we expect will compound and drive shareholder value creation for years to come.”
“With respect to the second quarter, WillScot performed very well in a challenging period", added Soultz. "Despite the impacts of the COVID-19 pandemic, we maintained our strong pricing power, increased VAPS penetration, and managed costs effectively. Modular leasing revenue increased 2.3%, Adjusted EBITDA increased by 11.4%, Adjusted EBITDA margins expanded by 480 bps, and free cash flow of $39.0 million increased by $37.4 million versus prior year. Mobile Mini’s Q2 results saw Adjusted EBITDA of $56.3 million essentially flat to prior year, despite an $18 million revenue decline, and margins expanded 470 basis points to 42.6%. Delivering these results amidst these unprecedented circumstances, while executing on another transformational merger, is truly a testament to the grit of both organizations and the resilience of our business model. I want to extend our sincerest thanks to all WillScot Mobile Mini employees for their commitment to employee and customer safety and well-being, all while maintaining their focus on execution.”
Soultz concluded, “Turning our eyes to the future, our new combined management team could not be more excited about the opportunities presented by the combination of WillScot and Mobile Mini. We have multi-year organic revenue growth tailwinds in modular pricing and VAPS, over $70 million of cost reductions yet to be realized from this and our prior mergers, compelling cross-selling opportunities across the combined customer base, the ability to deploy technology in pursuit of further business optimizations, and our combined human capital will make us more competitive than ever. While these are uncertain times, we have myriad growth opportunities within our control that we intend to execute.”
Chief Financial Officer of WillScot Mobile Mini Holdings, Tim Boswell, remarked, “With both the strength of our second quarter results and confidence in our internal growth levers, we are updating our financial outlook for the year and introducing a simple capital allocation framework to govern the deployment of our burgeoning free cash flow. WillScot Mobile Mini Holdings is on a clear de-leveraging trajectory, and we have established a leverage ratio target of 3.0x to 3.5x by the end of 2021. This business model affords a high degree of forward revenue visibility, as well as flexibility to manage our discretionary costs and capital expenditures, which together, give us great confidence in our free cash flow outlook. As such, we announced a $250 million share repurchase authorization, as yet another multi-year lever with which to drive shareholder returns, while achieving our leverage target. We have a strong business trajectory heading into the second half of the year, a solid balance sheet with over $915 million of excess availability in our ABL revolver, and further opportunities to improve our capital structure.”
Second Quarter 2020 Results (WillScot Standalone)1,4
Total revenues decreased 2.6% to $256.9 million, while Modular leasing revenues increased 2.3% versus the prior year quarter.
Adjusted EBITDA of $97.5 million was up 11.4% compared to $87.5 million in the prior year quarter, and Adjusted EBITDA margins improved 480 bps year over year to 38.0%.
Net income of $12.8 million for the three months ended June 30, 2020 was up $24.2 million versus prior year and includes $5.9 million of discrete costs expensed in the period related to acquisition and integration activities.
Capitalization and Liquidity Update1,3
While WillScot's standalone second quarter closing balance sheet is presented in the financial statements below, our debt structure improved significantly upon closing the merger on July 1, 2020. The June 30, 2020 balance sheet for the WillScot standalone business includes the June 15, 2020 issuance of $650 million of 6.125% 2025 senior secured notes and $655.1 million of corresponding restricted cash, which was held in escrow and released contingent upon closing the merger. Similarly, the remaining $265.4 million of WillScot's 7.875% 2022 senior secured notes are presented as current portion of long-term debt, because we redeemed them concurrent with the merger closing on July 1, 2020.
Upon closing the merger on July 1, 2020, WillScot Mobile Mini’s capital structure was as follows:
2020 Updated Outlook1, 2, 3
On August 10, 2020, management increased the Company's outlook for full year 2020. This guidance is presented both on an ”as reported” basis, including only WillScot’s results for the first half of the year and combined results for the second half of the year, as well as on a “pro forma basis,” as if WillScot Mobile Mini Holdings had operated together for the entirety of 2019 and 2020. This guidance is subject to the risks and uncertainties described in the "Forward-Looking Statements" below. The updated guidance is as follows:
|Revised 2020 Outlook As Reported||Previous Outlook|
|Revenue||$1.0 billion - $1.1 billion||$1.32 billion - $1.42 billion|
|Adjusted EBITDA1,2||$350 million - $400 million||$500 million - $530 million|
|Net CAPEX2,3||$100 million - $150 million||$140 million - $160 million|
|Pro Forma 2020 Outlook||Pro Forma |
|Revenue||$1.68 billion||$1.6 billion - $1.7 billion|
|Adjusted EBITDA1,2||$600 million||$615 million - $645 million|
|Net CAPEX2,3||$222 million||$160 million - $180 million|
Capital Allocation Framework
The transformational nature of the WillScot Mobile Mini merger and our strong financial outlook heading into the remainder of the year and into 2021 allow us to introduce a simple capital allocation framework, enabling us to balance growth investments with shareholder returns. This framework is as follows:
Announcing Authorization of Stock Repurchase Program
On August 7, 2020, the Board approved a stock repurchase program that authorizes the Company, to deploy up to $250 million for the purpose of repurchasing shares of common stock. The stock repurchase program does not obligate the Company to purchase any particular number of shares, and the timing and exact amount of any repurchases will depend on various factors, including market pricing and conditions, business, legal, accounting and other considerations.
The Company plans to repurchase its shares in open market transactions from time to time or through privately negotiated transactions in accordance with federal securities laws, at the Company’s discretion. The repurchase program, which has no expiration date, may be increased, suspended or terminated at any time. The program is expected to be implemented over the course of several years and will be conducted subject to the covenants in the agreements governing our indebtedness.
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, separately for WillScot and Mobile Mini.
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, separately for WillScot and Mobile Mini.
4 - 2019 Quarterly amounts were adjusted for the adoption of Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) ("ASC 842"), effective retroactively to January 1, 2019, and therefore do not agree to the Quarterly Reports filed on Form 10-Q for the respective periods of 2019. See reconciliation of the impact of adopting ASC 842 included at the end of this press release.
WillScot Corporation Non-GAAP Financial Measures
This press release includes non-GAAP financial measures for WillScot Corporation, including Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, pro forma revenue, adjusted gross profit, 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 ModSpace for all periods presented. WillScot 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 WillScot to its competitors; and (iv) provide additional tools for investors to use in evaluating ongoing operating results and trends. WillScot 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 WillScot 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 WillScot’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 for WillScot Corporation" included in this press release.
Information reconciling forward-looking Adjusted EBITDA to GAAP financial measures is unavailable to WillScot 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 WillScot 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. WillScot 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 second quarter 2020 results and outlook at 10 a.m. Eastern Time on Monday, August 10, 2020. 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 Second 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 Company’s 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. They lease 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. They create value by enabling customers to add space efficiently and cost-effectively – when the solution is perfect, productivity is all the customer sees.
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 relate to the Company (including Mobile Mini), including: expected scale; operating efficiency; stockholder, employee and customer benefits; key assumptions; timing of closing; the amount and timing of revenue and expense synergies; future financial benefits and operating results; our ability to decrease leverage; organic growth tailwinds; and integration spend, which reflects management's beliefs, expectations and objectives as of the date hereof. 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 WillScot 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; implementation of tax reform; our ability to implement and 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 and our Form 10-Q for the quarter ended March 31, 2020), which are available through the SEC’s EDGAR system at www.sec.gov and on our website. Any forward-looking statement speaks only at the date which it is made, and WillScot 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.
|Investor Inquiries:||Media Inquiries:|
|Emily Tadano||Scott Junk|
Condensed Consolidated Statements of Operations
(Unaudited; in thousands, except share and per share data)
|Three Months Ended|
|Six Months Ended|
|(in thousands, except share and per share)||2020||2019||2020||2019|
|Leasing and services revenue:|
|Modular delivery and installation||51,640||55,966||102,710||105,966|
|Costs of leasing and services:|
|Modular delivery and installation||43,523||48,468||87,388||91,811|
|Costs of sales:|
Buy photo and video packages at flexible prices