Key Financial Information (in thousands except for per share and TEU amounts) and Business Highlights:
QTD |
Full-Year |
|||||||||||||||||||
Q4 2020 |
Q3 2020 |
Q4 2019 |
2020 |
2019 |
||||||||||||||||
Lease rental income |
$ |
161,491 |
$ |
149,130 |
$ |
151,555 |
$ |
600,873 |
$ |
619,760 |
||||||||||
Gain on sale of owned fleet containers, net |
$ |
7,820 |
$ |
7,976 |
$ |
3,134 |
$ |
27,230 |
$ |
21,397 |
||||||||||
Income from operations |
$ |
71,816 |
$ |
54,109 |
$ |
64,579 |
$ |
221,599 |
$ |
222,684 |
||||||||||
Net income attributable to Limited common shareholders |
$ |
44,260 |
$ |
16,952 |
$ |
28,782 |
$ |
72,822 |
$ |
56,724 |
||||||||||
Net income attributable to Limited common shareholders per diluted common share |
$ |
0.87 |
$ |
0.32 |
$ |
0.50 |
$ |
1.36 |
$ |
0.99 |
||||||||||
Adjusted net income (1) |
$ |
41,147 |
$ |
21,634 |
$ |
10,977 |
$ |
87,277 |
$ |
55,375 |
||||||||||
Adjusted net income per diluted common share (1) |
$ |
0.81 |
$ |
0.41 |
$ |
0.19 |
$ |
1.63 |
$ |
0.96 |
||||||||||
Adjusted EBITDA (1) |
$ |
136,834 |
$ |
118,960 |
$ |
113,187 |
$ |
476,210 |
$ |
464,315 |
||||||||||
Average fleet utilization (2) |
98.5 |
% |
96.0 |
% |
96.4 |
% |
96.6 |
% |
97.4 |
% |
||||||||||
Total fleet size at end of period (TEU) (3) |
3,774,053 |
3,599,889 |
3,500,812 |
3,774,053 |
3,500,812 |
|||||||||||||||
Owned percentage of total fleet at end of period |
88.0 |
% |
87.1 |
% |
85.4 |
% |
88.0 |
% |
85.4 |
% |
(1) |
Refer to the "Use of Non-GAAP Financial Information" set forth below. |
(2) |
Utilization is computed by dividing total units on lease in CEUs (cost equivalent unit) by the total units in our fleet in CEUs, excluding CEUs that have been designated as held for sale units and manufactured for us but have not yet been delivered to a lessee. CEU is a unit of measurement based on the approximate cost of a container relative to the cost of a standard 20-foot dry container. These factors may differ slightly from CEU ratios used by others in the industry. |
(3) |
TEU refers to a twenty-foot equivalent unit, which is a unit of measurement used in the container shipping industry to compare shipping containers of various lengths to a standard 20-foot container, thus a 20-foot container is one TEU and a 40-foot container is two TEU. |
- Net income of
$44.3 million for the fourth quarter or$0.87 per diluted common share and$72.8 million for the full year or$1.36 per diluted common share; - Adjusted net income of
$41.1 million for the fourth quarter, or$0.81 per diluted common share, as compared to$21.6 million , or$0.41 per diluted common share in the third quarter of 2020. Adjusted net income of$87.3 million for the full year, or$1.63 per diluted common share, an improvement of 58% as compared to$55.4 million , or$0.96 per diluted common share in the prior year; - Adjusted EBITDA of
$136.8 million for the fourth quarter, as compared to$119.0 million in the third quarter of 2020. Adjusted EBITDA of$476.2 million for the full year, as compared to$464.3 million in the prior year; - Utilization averaged 98.5% for the fourth quarter, 96.6% for the full year, and is currently at 99.5%;
- Invested
$470 million in containers delivered during the fourth quarter, for a total investment of$1,080 million delivered through the end of the year, virtually all of which are currently on lease; - Our fleet reached a significant milestone, surpassing 4 million CEU as of
December 31, 2020 ; - Issued
$550 million of fixed-rate asset backed notes onFebruary 10, 2021 . Proceeds were used to pay down variable-rate bank facilities to create borrowing capacity for additional container investments; and - Repurchased 779,034 shares and 6,736,493 shares of common stock at an average price of
$15.00 per share and$10.13 per share during the fourth quarter and full year of 2020, respectively, under the share repurchase program. As of the end of the fourth quarter, the remaining authority under the share repurchase program totaled$23.2 million .
"We are excited about the significant improvements in our financial performance and the continued very favorable market conditions. Our fourth quarter performance underscores the renewed strength of our business and provides sustainable momentum into the new year. For the quarter, lease rental income increased 8% to
Ghesquiere continued, "We reacted swiftly to the sharp rebound in cargo volumes that started last July by investing heavily in new containers in a timely manner. During the second half of 2020, we added a total of
"In addition to significant container investments, we took a number of actions over the past year to strengthen our business, financial resources and long-term outlook. In particular, we bought back 12% of our shares during 2020. We lowered our borrowing costs to 3.1% and created additional capacity for container investments with the successful issuance of nearly
"As we look into the new year, we continue to see high demand for cargo and containers. We remain focused on the continued discipline of our long-term strategic plan and strict profitability criteria that will ensure sustainable value creation to our shareholders," concluded Ghesquiere.
Fourth-Quarter and Full-Year Results
Lease rental income increased
Gain on sale of owned fleet containers, net was essentially flat from the third quarter of 2020, as a reduction in the number of containers sold was offset by an increase in the average gain per container sold. Gain on sale of owned fleet containers, net for the year increased
Direct container expense – owned fleet decreased
Distribution to managed fleet container investors was flat from the third quarter of 2020 and, for the year decreased
General and administrative expense was flat from the third quarter of 2020. General and administrative expense for the year increased
Bad debt recovery was
Container lessee default recovery was
Interest expense decreased
Write off of unamortized deferred debt issuance costs and bond discounts amounted to
Conference Call and Webcast
A conference call to discuss the financial results for the fourth quarter and full year of 2020 will be held at
About
Important Cautionary Information Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of
Investor Relations
Phone: +1 (415) 658-8333
ir@textainer.com
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) (All currency expressed in |
||||||||||||||||||||||||||||||||
Three Months Ended |
Years Ended |
|||||||||||||||||||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||
Lease rental income - owned fleet |
$ |
146,118 |
$ |
127,304 |
$ |
538,425 |
$ |
517,859 |
||||||||||||||||||||||||
Lease rental income - managed fleet |
15,373 |
24,251 |
62,448 |
101,901 |
||||||||||||||||||||||||||||
Lease rental income |
161,491 |
151,555 |
600,873 |
619,760 |
||||||||||||||||||||||||||||
Management fees - non-leasing |
1,547 |
1,767 |
5,271 |
7,590 |
||||||||||||||||||||||||||||
Trading container sales proceeds |
7,274 |
20,959 |
31,941 |
58,734 |
||||||||||||||||||||||||||||
Cost of trading containers sold |
(5,896) |
(18,965) |
(28,409) |
(51,336) |
||||||||||||||||||||||||||||
Trading container margin |
1,378 |
1,994 |
3,532 |
7,398 |
||||||||||||||||||||||||||||
Gain on sale of owned fleet containers, net |
7,820 |
3,134 |
27,230 |
21,397 |
||||||||||||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||||||||||
Direct container expense - owned fleet |
10,315 |
11,760 |
55,222 |
45,831 |
||||||||||||||||||||||||||||
Distribution expense to managed fleet container investors |
14,092 |
22,323 |
57,311 |
93,858 |
||||||||||||||||||||||||||||
Depreciation expense |
65,609 |
66,129 |
261,665 |
260,372 |
||||||||||||||||||||||||||||
Amortization expense |
806 |
517 |
2,572 |
2,093 |
||||||||||||||||||||||||||||
General and administrative expense |
11,008 |
9,504 |
41,880 |
38,142 |
||||||||||||||||||||||||||||
Bad debt (recovery) expense, net |
(1,342) |
(648) |
(1,668) |
2,002 |
||||||||||||||||||||||||||||
Container lessee default (recovery) expense, net |
(68) |
149 |
(1,675) |
7,867 |
||||||||||||||||||||||||||||
Gain on insurance recovery and legal settlement |
— |
(14,040) |
— |
(14,881) |
||||||||||||||||||||||||||||
Gain on settlement of pre-existing management agreement |
— |
(1,823) |
— |
(1,823) |
||||||||||||||||||||||||||||
Total operating expenses |
100,420 |
93,871 |
415,307 |
433,461 |
||||||||||||||||||||||||||||
Income from operations |
71,816 |
64,579 |
221,599 |
222,684 |
||||||||||||||||||||||||||||
Other (expense) income: |
||||||||||||||||||||||||||||||||
Interest expense |
(27,973) |
(37,486) |
(123,230) |
(153,185) |
||||||||||||||||||||||||||||
Write-off of unamortized deferred debt issuance costs and bond discounts |
— |
— |
(8,750) |
— |
||||||||||||||||||||||||||||
Interest income |
52 |
458 |
531 |
2,505 |
||||||||||||||||||||||||||||
Realized (loss) gain on derivative instruments, net |
(3,395) |
(763) |
(12,295) |
1,946 |
||||||||||||||||||||||||||||
Unrealized gain (loss) on derivative instruments, net |
3,390 |
2,873 |
(6,044) |
(15,442) |
||||||||||||||||||||||||||||
Other, net |
685 |
6 |
1,488 |
(4) |
||||||||||||||||||||||||||||
Net other expense |
(27,241) |
(34,912) |
(148,300) |
(164,180) |
||||||||||||||||||||||||||||
Income before income tax and noncontrolling interest |
44,575 |
29,667 |
73,299 |
58,504 |
||||||||||||||||||||||||||||
Income tax benefit (expense) |
463 |
(478) |
374 |
(1,948) |
||||||||||||||||||||||||||||
Net income |
45,038 |
29,189 |
73,673 |
56,556 |
||||||||||||||||||||||||||||
Less: Net (income) loss attributable to the noncontrolling interest |
(778) |
(407) |
(851) |
168 |
||||||||||||||||||||||||||||
Net income attributable to |
$ |
44,260 |
$ |
28,782 |
$ |
72,822 |
$ |
56,724 |
||||||||||||||||||||||||
Net income attributable to Limited common shareholders per share: |
||||||||||||||||||||||||||||||||
Basic |
$ |
0.88 |
$ |
0.51 |
$ |
1.37 |
$ |
0.99 |
||||||||||||||||||||||||
Diluted |
$ |
0.87 |
$ |
0.50 |
$ |
1.36 |
$ |
0.99 |
||||||||||||||||||||||||
Weighted average shares outstanding (in thousands): |
||||||||||||||||||||||||||||||||
Basic |
50,517 |
56,923 |
53,271 |
57,349 |
||||||||||||||||||||||||||||
Diluted |
51,110 |
57,070 |
53,481 |
57,459 |
Consolidated Balance Sheets (Unaudited) (All currency expressed in |
||||||||
|
|
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
131,018 |
$ |
180,552 |
||||
Accounts receivable, net of allowance of |
108,578 |
109,384 |
||||||
Net investment in finance leases, net of allowance of |
78,459 |
40,940 |
||||||
Container leaseback financing receivable, net of allowance of |
27,076 |
20,547 |
||||||
Trading containers |
9,375 |
11,330 |
||||||
Containers held for sale |
15,629 |
41,884 |
||||||
Prepaid expenses and other current assets |
13,713 |
14,816 |
||||||
Due from affiliates, net |
1,509 |
1,880 |
||||||
Total current assets |
385,357 |
421,333 |
||||||
Restricted cash |
74,147 |
97,353 |
||||||
Containers, net of accumulated depreciation of |
4,125,052 |
4,156,151 |
||||||
Net investment in finance leases, net of allowance of |
801,501 |
254,363 |
||||||
Container leaseback financing receivable, net of allowance of |
336,792 |
251,111 |
||||||
Fixed assets, net of accumulated depreciation of |
746 |
1,128 |
||||||
Intangible assets, net of accumulated amortization of |
2,719 |
5,291 |
||||||
Derivative instruments |
47 |
135 |
||||||
Deferred taxes |
1,153 |
1,388 |
||||||
Other assets |
13,862 |
14,364 |
||||||
Total assets |
$ |
5,741,376 |
$ |
5,202,617 |
||||
Liabilities and Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued expenses |
$ |
24,385 |
$ |
23,404 |
||||
Container contracts payable |
231,647 |
9,394 |
||||||
Other liabilities |
2,288 |
2,636 |
||||||
Due to container investors, net |
18,697 |
21,978 |
||||||
Debt, net of unamortized costs of |
408,365 |
242,433 |
||||||
Total current liabilities |
685,382 |
299,845 |
||||||
Debt, net of unamortized costs of |
3,706,979 |
3,555,296 |
||||||
Derivative instruments |
29,235 |
13,778 |
||||||
Income tax payable |
10,047 |
9,909 |
||||||
Deferred taxes |
6,491 |
7,789 |
||||||
Other liabilities |
16,524 |
30,355 |
||||||
Total liabilities |
4,454,658 |
3,916,972 |
||||||
Equity: |
||||||||
|
||||||||
Common shares, |
587 |
583 |
||||||
|
(86,239) |
(17,746) |
||||||
Additional paid-in capital |
416,609 |
410,595 |
||||||
Accumulated other comprehensive loss |
(9,744) |
(511) |
||||||
Retained earnings |
938,395 |
866,458 |
||||||
|
1,259,608 |
1,259,379 |
||||||
Noncontrolling interest |
27,110 |
26,266 |
||||||
Total equity |
1,286,718 |
1,285,645 |
||||||
Total liabilities and equity |
$ |
5,741,376 |
$ |
5,202,617 |
||||
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) (All currency expressed in |
||||||||
Years Ended |
||||||||
2020 |
2019 |
|||||||
Cash flows from operating activities: |
||||||||
Net income |
$ |
73,673 |
$ |
56,556 |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation expense |
261,665 |
260,372 |
||||||
Bad debt (recovery) expense, net |
(1,668) |
2,002 |
||||||
Container (recovery) write-off from lessee default, net |
(260) |
7,179 |
||||||
Unrealized loss on derivative instruments, net |
6,044 |
15,442 |
||||||
Amortization and write-off of unamortized deferred debt issuance costs and |
16,862 |
7,953 |
||||||
Amortization of intangible assets |
2,572 |
2,093 |
||||||
Gain on sale of owned fleet containers, net |
(27,230) |
(21,397) |
||||||
Gain on settlement of pre-existing management agreement |
— |
(1,823) |
||||||
Share-based compensation expense |
4,723 |
4,388 |
||||||
Changes in operating assets and liabilities |
59,874 |
95,780 |
||||||
Total adjustments |
322,582 |
371,989 |
||||||
Net cash provided by operating activities |
396,255 |
428,545 |
||||||
Cash flows from investing activities: |
||||||||
Purchase of containers and fixed assets |
(746,145) |
(466,993) |
||||||
Payment on container leaseback financing receivable |
(116,263) |
(281,445) |
||||||
Payments for |
— |
(171,841) |
||||||
Proceeds from sale of containers and fixed assets |
151,021 |
150,742 |
||||||
Receipt of principal payments on container leaseback financing receivable |
21,485 |
7,745 |
||||||
Net cash used in investing activities |
(689,902) |
(761,792) |
||||||
Cash flows from financing activities: |
||||||||
Proceeds from debt |
2,114,260 |
1,439,223 |
||||||
Principal payments on debt |
(1,799,870) |
(1,049,857) |
||||||
Purchase of treasury shares |
(68,493) |
(8,597) |
||||||
Proceeds from container leaseback financing liability, net |
— |
17,448 |
||||||
Principal repayments on container leaseback financing liability, net |
(12,825) |
— |
||||||
Debt issuance costs |
(13,637) |
(9,417) |
||||||
Issuance of common shares upon exercise of share options |
1,295 |
126 |
||||||
Dividends paid to noncontrolling interest |
— |
(2,744) |
||||||
Net cash provided by financing activities |
220,730 |
386,182 |
||||||
Effect of exchange rate changes |
177 |
42 |
||||||
Net (decrease) increase in cash, cash equivalents and restricted cash |
(72,740) |
52,977 |
||||||
Cash, cash equivalents and restricted cash, beginning of the year |
277,905 |
224,928 |
||||||
Cash, cash equivalents and restricted cash, end of the year |
$ |
205,165 |
$ |
277,905 |
Use of Non-GAAP Financial Information
To supplement
Management believes that adjusted net income and adjusted net income per diluted common share are useful in evaluating
Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the tables below for the three and twelve months ended
Non-GAAP measures are not financial measures calculated in accordance with GAAP and are presented solely as supplemental disclosures. Non-GAAP measures have limitations as analytical tools, and should not be relied upon in isolation, or as a substitute to net income, income from operations, cash flows from operating activities, or any other performance measures derived in accordance with GAAP. Some of these limitations are:
- They do not reflect cash expenditures, or future requirements, for capital expenditures or contractual commitments;
- They do not reflect changes in, or cash requirements for, working capital needs;
- Adjusted EBITDA does not reflect interest expense or cash requirements necessary to service interest or principal payments on debt;
- Although depreciation expense and container impairment are a non-cash charge, the assets being depreciated may be replaced in the future, and neither adjusted EBITDA, adjusted net income or adjusted net income per diluted common share reflects any cash requirements for such replacements;
- They are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows; and
- Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.
Three Months Ended, |
Years Ended, |
|||||||||||||||||||
|
|
|
|
|
||||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||||||
Reconciliation of adjusted net income: |
||||||||||||||||||||
Net income attributable to Limited common shareholders |
$ |
44,260 |
$ |
16,952 |
$ |
28,782 |
$ |
72,822 |
$ |
56,724 |
||||||||||
Adjustments: |
||||||||||||||||||||
Write-off of unamortized deferred debt issuance costs |
— |
8,628 |
— |
8,750 |
— |
|||||||||||||||
Unrealized (gain) loss on derivative instruments, net |
(3,390) |
(4,161) |
(2,873) |
6,044 |
15,442 |
|||||||||||||||
Gain on insurance recovery and legal settlement |
— |
— |
(14,040) |
— |
(14,881) |
|||||||||||||||
Gain on settlement of pre-existing management agreement |
— |
— |
(1,823) |
— |
(1,823) |
|||||||||||||||
Impact of reconciling items on income tax |
37 |
(42) |
551 |
(142) |
378 |
|||||||||||||||
Impact of reconciling items attributable to the |
240 |
257 |
380 |
(197) |
(465) |
|||||||||||||||
Adjusted net income |
$ |
41,147 |
$ |
21,634 |
$ |
10,977 |
$ |
87,277 |
$ |
55,375 |
||||||||||
Adjusted net income per diluted common share |
$ |
0.81 |
$ |
0.41 |
$ |
0.19 |
$ |
1.63 |
$ |
0.96 |
||||||||||
Three Months Ended, |
Years Ended, |
|||||||||||||||||||
|
|
|
|
|
||||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||||||
Reconciliation of adjusted EBITDA: |
||||||||||||||||||||
Net income attributable to Limited common shareholders |
$ |
44,260 |
$ |
16,952 |
$ |
28,782 |
$ |
72,822 |
$ |
56,724 |
||||||||||
Adjustments: |
||||||||||||||||||||
Interest income |
(52) |
(23) |
(458) |
(531) |
(2,505) |
|||||||||||||||
Interest expense |
27,973 |
29,123 |
37,486 |
123,230 |
153,185 |
|||||||||||||||
Write-off of unamortized deferred debt issuance costs |
— |
8,628 |
— |
8,750 |
— |
|||||||||||||||
Realized loss (gain) on derivative instruments, net |
3,395 |
4,107 |
763 |
12,295 |
(1,946) |
|||||||||||||||
Unrealized (gain) loss on derivative instruments, net |
(3,390) |
(4,161) |
(2,873) |
6,044 |
15,442 |
|||||||||||||||
Gain on insurance recovery and legal settlement |
— |
— |
(14,040) |
— |
(14,881) |
|||||||||||||||
Gain on settlement of pre-existing management agreement |
— |
— |
(1,823) |
— |
(1,823) |
|||||||||||||||
Income tax (benefit) expense |
(463) |
(152) |
478 |
(374) |
1,948 |
|||||||||||||||
Net income (loss) attributable to the noncontrolling interest |
778 |
494 |
407 |
851 |
(168) |
|||||||||||||||
Depreciation expense |
65,609 |
65,374 |
66,129 |
261,665 |
260,372 |
|||||||||||||||
Container (recovery) write-off from lessee default, net |
(122) |
33 |
25 |
(1,647) |
7,179 |
|||||||||||||||
Amortization expense |
806 |
645 |
517 |
2,572 |
2,093 |
|||||||||||||||
Impact of reconciling items attributable to the |
(1,960) |
(2,060) |
(2,206) |
(9,467) |
(11,305) |
|||||||||||||||
Adjusted EBITDA |
$ |
136,834 |
$ |
118,960 |
$ |
113,187 |
$ |
476,210 |
$ |
464,315 |
||||||||||
Three Months Ended, |
Years Ended, |
|||||||||||||||||||
|
|
|
|
|
||||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||||||
Reconciliation of headline earnings: |
||||||||||||||||||||
Net income attributable to Limited common shareholders |
$ |
44,260 |
$ |
16,952 |
$ |
28,782 |
$ |
72,822 |
$ |
56,724 |
||||||||||
Adjustments: |
||||||||||||||||||||
Container impairment |
590 |
3,074 |
4,348 |
9,447 |
21,417 |
|||||||||||||||
Gain on insurance recovery and legal settlement |
— |
— |
(14,040) |
— |
(14,881) |
|||||||||||||||
Gain on settlement of pre-existing management agreement |
— |
— |
(1,823) |
— |
(1,823) |
|||||||||||||||
Impact of reconciling items on income tax |
(4) |
(28) |
477 |
(90) |
319 |
|||||||||||||||
Impact of reconciling items attributable to the |
(5) |
(85) |
100 |
(248) |
(363) |
|||||||||||||||
Headline earnings |
$ |
44,841 |
$ |
19,913 |
$ |
17,844 |
$ |
81,931 |
$ |
61,393 |
||||||||||
Headline earnings per basic common share |
$ |
0.89 |
$ |
0.38 |
$ |
0.31 |
$ |
1.54 |
$ |
1.07 |
||||||||||
Headline earnings per diluted common share |
$ |
0.88 |
$ |
0.38 |
$ |
0.31 |
$ |
1.53 |
$ |
1.07 |
View original content:http://www.prnewswire.com/news-releases/textainer-group-holdings-limited-reports-fourth-quarter-and-full-year-2020-results-301230296.html
SOURCE