Highlights:
- Total revenues increased 13.5%, to
$120.0 million , from the prior year quarter; - Net income attributable to
Textainer Group Holdings Limited ("Textainer", or "the Company") common shareholders was$45.8 million , or$0.91 per diluted common share. Net income excluding gain on sale of containers to noncontrolling interest(1) for the second quarter of 2011 was$36.9 million ; - Adjusted net income(1) increased 10.5% to
$44.7 million , or$0.89 per diluted common share, from the prior year quarter; - Utilization continued at very high levels, averaging 97.5% during the second quarter and ending the quarter at 98.1%;
- The strong pace of expansion continued, as
Textainer invested more than$760 million in new and used containers, as well as purchases from our managed fleet throughAugust 2012 . Approximately 25% of the Company's new container investments were in refrigerated containers, asTextainer continues to expand market share in the refrigerated container sector; - Annualized 2012 return on equity of 26%, continuing Textainer's performance whereby the Company has delivered an average annual return on equity of 23% since its
October 2007 initial public offering; and Textainer paid a$0.40 per share dividend in the second quarter and declared a$0.42 per share dividend in the third quarter of 2012, an increase of 5.0% from the first quarter and the Company's tenth consecutive quarterly increase.
"Our second quarter results marked a solid finish to the first half of 2012 for Textainer," commented
"Many of our customers are shifting to leasing in lieu of buying containers. We are benefitting from the strong demand created by this very positive secular trend in the industry. We have invested more than
Key Financial Information (in thousands except for per share and TEU amounts):
Q2 QTD | Q2 YTD | |||||||||||||||||
2012 | 2011 | % Change | 2012 | 2011 | % Change | |||||||||||||
Total revenues |
|
|
13.5% |
|
|
20.6% | ||||||||||||
Net income attributable to |
|
|
(11.4%) |
|
|
7.7% | ||||||||||||
Net income attributable to |
|
|
(11.7%) |
|
|
6.7% | ||||||||||||
Adjusted net income(1) |
|
|
10.5% |
|
|
23.3% | ||||||||||||
Adjusted net income per diluted common share(1) |
|
|
9.9% |
|
|
21.7% | ||||||||||||
Adjusted EBITDA(1) |
|
|
7.1% |
|
|
17.1% | ||||||||||||
Average fleet utilization |
97.5% |
98.7% |
(1.2%) |
97.2% |
98.4% |
(1.2%) | ||||||||||||
Total fleet size at end of period (TEU) |
2,615,282 |
2,441,561 |
7.1% |
|||||||||||||||
Owned percentage of total fleet at end of period |
60.4% |
57.3% |
5.4% |
"Net income excluding gain on sale of containers to noncontrolling interest", "adjusted net income" and "adjusted EBITDA" are Non-GAAP Measures that are reconciled to GAAP measures in footnote 1. "Net income excluding gain on sale of containers to noncontrolling interest ("NCI")" is defined as net income attributable to
Textainer's adjusted net income benefited from an increase in the size of the owned container fleet in the second quarter of 2012, compared to the year ago quarter, partially offset by an increase in interest expense due to an increase in debt required to fund the expansion of our owned fleet.
During the quarter, one of Textainer's subsidiaries issued
The Company also restructured its securitization facility, increasing the size from
In the second quarter of last year, net income included a gain on sale of containers to NCI of
Outlook
The run rate of our capital expenditures for new dry-freight and refrigerated containers already exceeds the record levels of 2011. In-fleet container utilization continues to remain at or near historic highs.
"In spite of slowing economic growth rates and their impact on trade, we remain focused on organic growth. We believe the increasing owned percentage of our fleet, high percentage of long-term leases and high utilization rates will provide sustained performance," commented Mr. Brewer. "Today, 80% of our fleet is committed to long-term operating, financing and sales-type leases, compared to 78% a year ago, further reducing the volatility of our utilization."
"We are pleased to see more purchase leaseback and trading opportunities which increase container trading profits and signal the possibility of increased replacement demand for new containers."
Dividend
On
"In addition to driving value with our consistent performance, we are focused on total shareholder return," added
Investors' Webcast
About
Important Cautionary Information Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of U.S. securities laws. Forward-looking statements include statements that are not statements of historical facts and include, without limitation, statements regarding: (i)
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||||||||||||||||||||
Condensed Consolidated Statements of Comprehensive Income | ||||||||||||||||||||||||||
Three and Six Months Ended | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
(All currency expressed in | ||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||
Three Months Ended |
Six Months Ended June 30, | |||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Lease rental income | $ | 91,791 | $ | 83,049 | $ | 179,679 | $ | 155,408 | ||||||||||||||||||
Management fees | 7,293 | 7,615 | 14,094 | 15,299 | ||||||||||||||||||||||
Trading container sales proceeds | 12,744 | 5,655 | 24,281 | 10,420 | ||||||||||||||||||||||
Gains on sale of containers, net | 8,162 | 9,417 | 19,451 | 15,811 | ||||||||||||||||||||||
Total revenues | 119,990 | 105,736 | 237,505 | 196,938 | ||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Direct container expense | 6,104 | 4,315 | 12,164 | 8,273 | ||||||||||||||||||||||
Cost of trading containers sold | 11,130 | 5,024 | 21,132 | 9,190 | ||||||||||||||||||||||
Depreciation expense | 22,801 | 24,001 | 44,381 | 42,867 | ||||||||||||||||||||||
Amortization expense | 1,299 | 1,574 | 2,605 | 3,332 | ||||||||||||||||||||||
General and administrative expense | 5,822 | 6,043 | 11,545 | 12,241 | ||||||||||||||||||||||
Short-term incentive compensation expense | 1,322 | 1,494 | 2,314 | 2,453 | ||||||||||||||||||||||
Long-term incentive compensation expense | 1,524 | 1,372 | 3,678 | 3,108 | ||||||||||||||||||||||
Bad debt expense, net | 743 | 408 | 2,461 | 544 | ||||||||||||||||||||||
Gain on sale of containers to noncontrolling interest | - | (19,773 | ) | - | (19,773 | ) | ||||||||||||||||||||
Total operating expenses | 50,745 | 24,458 | 100,280 | 62,235 | ||||||||||||||||||||||
Income from operations | 69,245 | 81,278 | 137,225 | 134,703 | ||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||
Interest expense | (18,531 | ) | (9,011 | ) | (33,250 | ) | (16,534 | ) | ||||||||||||||||||
Interest income | 35 | 7 | 63 | 14 | ||||||||||||||||||||||
Realized losses on interest rate swaps and caps, net | (2,529 | ) | (2,765 | ) | (5,079 | ) | (5,407 | ) | ||||||||||||||||||
Unrealized gains (losses) on interest rate swaps and caps, net | 1,025 | (4,453 | ) | 2,073 | (2,242 | ) | ||||||||||||||||||||
Other, net | (1 | ) | (79 | ) | (2 | ) | (130 | ) | ||||||||||||||||||
Net other expense | (20,001 | ) | (16,301 | ) | (36,195 | ) | (24,299 | ) | ||||||||||||||||||
Income before income tax and noncontrolling interest | 49,244 | 64,977 | 101,030 | 110,404 | ||||||||||||||||||||||
Income tax expense | (4,122 | ) | (3,766 | ) | (6,445 | ) | (6,380 | ) | ||||||||||||||||||
Net income | 45,122 | 61,211 | 94,585 | 104,024 | ||||||||||||||||||||||
Less: Net loss (income) attributable to the noncontrolling interest |
687 | (9,514 | ) | 1,134 | (15,137 | ) | ||||||||||||||||||||
Net income attributable to |
||||||||||||||||||||||||||
Limited common shareholders | $ | 45,809 | $ | 51,697 | $ | 95,719 | $ | 88,887 | ||||||||||||||||||
Net income attributable to |
||||||||||||||||||||||||||
Basic | $ | 0.92 | $ | 1.06 | $ | 1.93 | $ | 1.82 | ||||||||||||||||||
Diluted | $ | 0.91 | $ | 1.03 | $ | 1.90 | $ | 1.78 | ||||||||||||||||||
Weighted average shares outstanding (in thousands): | ||||||||||||||||||||||||||
Basic | 49,543 | 48,899 | 49,484 | 48,780 | ||||||||||||||||||||||
Diluted | 50,358 | 49,975 | 50,442 | 49,855 | ||||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||
Foreign currency translation adjustments | (72 | ) | 38 | 5 | 120 | |||||||||||||||||||||
Comprehensive income | 45,050 | 61,249 | 94,590 | 104,144 | ||||||||||||||||||||||
Less: Comprehensive loss (income) attributable to the noncontrolling interest | 687 | (9,514 | ) | 1,134 | (15,137 | ) | ||||||||||||||||||||
Comprehensive income attributable to |
||||||||||||||||||||||||||
Limited common shareholders | $ | 45,737 | $ | 51,735 | $ | 95,724 | $ | 89,007 |
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(Unaudited) | ||||||||
(All currency expressed in | ||||||||
2012 | 2011 | |||||||
|
| |||||||
Assets |
||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 82,152 | $ | 74,816 | ||||
Accounts receivable, net of allowance for doubtful accounts of |
88,689 | 86,428 | ||||||
Net investment in direct financing and sales-type leases | 30,472 | 25,075 | ||||||
Trading containers | 15,081 | 12,970 | ||||||
Containers held for sale | 9,250 | 7,832 | ||||||
Prepaid expenses | 17,945 | 10,243 | ||||||
Deferred taxes | 2,441 | 2,443 | ||||||
Due from affiliates, net | 14 | - | ||||||
Total current assets | 246,044 | 219,807 | ||||||
Restricted cash | 46,628 | 45,858 | ||||||
Containers, net of accumulated depreciation of |
2,313,057 | 1,903,855 | ||||||
Net investment in direct financing and sales-type leases | 106,888 | 85,121 | ||||||
Fixed assets, net of accumulated depreciation of |
1,680 | 1,717 | ||||||
Intangible assets, net of accumulated amortization of |
43,845 | 46,675 | ||||||
Other assets | 15,912 | 7,171 | ||||||
Total assets | $ | 2,774,054 | $ | 2,310,204 | ||||
Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,116 | $ | 2,616 | ||||
Accrued expenses | 12,033 | 18,491 | ||||||
Container contracts payable | 232,221 | 25,510 | ||||||
Deferred revenue | 2,558 | 6,245 | ||||||
Due to owners, net | 14,195 | 15,812 | ||||||
Revolving credit facilities | 123,500 | - | ||||||
Secured debt facility | - | 41,035 | ||||||
Bonds payable | 131,500 | 91,500 | ||||||
Total current liabilities | 519,123 | 201,209 | ||||||
Revolving credit facilities | 36,084 | 133,047 | ||||||
Secured debt facilities | 642,000 | 779,383 | ||||||
Bonds payable | 772,041 | 464,226 | ||||||
Deferred revenue | 73 | 1,136 | ||||||
Interest rate swaps and caps | 14,037 | 16,110 | ||||||
Income tax payable | 27,363 | 22,729 | ||||||
Deferred taxes | 6,672 | 7,438 | ||||||
Total liabilities | 2,017,393 | 1,625,278 | ||||||
Equity: | ||||||||
Common shares, |
496 | 490 | ||||||
Additional paid-in capital | 165,114 | 154,460 | ||||||
Accumulated other comprehensive loss | (23 | ) | (28 | ) | ||||
Retained earnings | 586,521 | 528,906 | ||||||
Total |
752,108 | 683,828 | ||||||
Noncontrolling interest | 4,553 | 1,098 | ||||||
Total equity | 756,661 | 684,926 | ||||||
Total liabilities and equity | $ | 2,774,054 | $ | 2,310,204 |
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
Six Months Ended | ||||||||
(Unaudited) | ||||||||
(All currency expressed in | ||||||||
Six Months Ended
June 30, | ||||||||
2012 | 2011 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 94,585 | $ | 104,024 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation expense | 44,381 | 42,867 | ||||||
Bad debt expense, net | 2,461 | 544 | ||||||
Unrealized (gains) losses on interest rate swaps and caps, net | (2,073 | ) | 2,242 | |||||
Amortization of debt issuance costs | 6,370 | 3,679 | ||||||
Amortization of intangible assets | 2,605 | 3,332 | ||||||
Amortization of acquired below-market leases | (33 | ) | (294 | ) | ||||
Amortization of deferred revenue | (4,532 | ) | (3,907 | ) | ||||
Amortization of unearned income on direct financing and sales-type leases | (5,407 | ) | (4,551 | ) | ||||
Gains on sale of containers, net | (19,451 | ) | (15,811 | ) | ||||
Gain on sale of containers to noncontrolling interest | - | (19,773 | ) | |||||
Share-based compensation expense | 4,190 | 3,261 | ||||||
Changes in operating assets and liabilities | (14,571 | ) | (19,619 | ) | ||||
Total adjustments | 13,940 | (8,030 | ) | |||||
Net cash provided by operating activities | 108,525 | 95,994 | ||||||
Cash flows from investing activities: | ||||||||
Purchase of containers and fixed assets | (316,021 | ) | (527,085 | ) | ||||
Payment for |
- | (3,786 | ) | |||||
Proceeds from sale of containers and fixed assets | 47,563 | 35,410 | ||||||
Receipt of principal payments on direct financing and sales-type leases | 18,157 | 14,973 | ||||||
Net cash used in investing activities | (250,301 | ) | (480,488 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from revolving credit facilities | 150,530 | 137,000 | ||||||
Principal payments on revolving credit facilities | (123,993 | ) | (40,000 | ) | ||||
Proceeds from secured debt facilities | 654,000 | 336,000 | ||||||
Principal payments on secured debt facilities | (832,697 | ) | (353,803 | ) | ||||
Proceeds from bonds payable | 400,000 | 400,000 | ||||||
Principal payments on bonds payable | (52,418 | ) | (25,750 | ) | ||||
Increase in restricted cash | (770 | ) | (20,907 | ) | ||||
Debt issuance costs | (18,500 | ) | (7,472 | ) | ||||
Issuance of common shares upon exercise of share options | 3,763 | 5,626 | ||||||
Excess tax benefit from share-based compensation awards | 2,707 | 3,034 | ||||||
Capital contributions from noncontrolling interest | 4,589 | - | ||||||
Dividends paid | (38,104 | ) | (29,273 | ) | ||||
Net cash provided by financing activities | 149,107 | 404,455 | ||||||
Effect of exchange rate changes | 5 | 120 | ||||||
Net increase in cash and cash equivalents | 7,336 | 20,081 | ||||||
Cash and cash equivalents, beginning of the year | 74,816 | 57,081 | ||||||
Cash and cash equivalents, end of period | $ | 82,152 | $ | 77,162 | ||||
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Reconciliation of GAAP financial measures to non-GAAP financial measures
Three and Six Months Ended
(Unaudited)
(All currency expressed in
(1) The following is a reconciliation of certain GAAP measures to non-GAAP financial measures (such items listed in (a) to (d) below and defined as "Non-GAAP Measures") for the three and six months ended
(a) net income attributable to
(b) net cash provided by operating activities to Adjusted EBITDA;
(c) net income attributable to
(d) net income attributable to
(e) net income attributable to
Non-GAAP Measures are not financial measures calculated in accordance with U.S. generally accepted accounting principles ("GAAP") and should not be considered as an alternative to net income, income from operations or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity. Non-GAAP Measures are presented solely as supplemental disclosures. Management believes that adjusted EBITDA may be a useful performance measure that is widely used within our industry and adjusted net income may be a useful performance measure because
Management also believes that net income excluding gain on sale of containers to noncontrolling interest, adjusted net income and adjusted net income per diluted common share are useful in evaluating our operating performance because unrealized (gains) losses on interest rate swaps and caps, net and gain on sale of containers to NCI are both noncash items and unrealized (gains) losses on interest rate swaps is a non-operating item. We believe Non-GAAP Measures provide useful information on our earnings from ongoing operations. We believe that adjusted EBITDA provides useful information on our ability to service our long-term debt and other fixed obligations and on our ability to fund our expected growth with internally generated funds. Non-GAAP Measures have limitations as analytical tools, and you should not consider either of them in isolation, or as a substitute for analysis of our operating results or cash flows as reported under GAAP. Some of these limitations are:
- They do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
- They do not reflect changes in, or cash requirements for, our working capital needs;
- Adjusted EBITDA does not reflect interest expense or cash requirements necessary to service interest or principal payments on our debt;
- Although depreciation is a noncash 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 noncash 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 | Six Months Ended | |||||||||||||||
June 30, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Reconciliation of adjusted EBITDA: | ||||||||||||||||
Net income attributable to |
$ | 45,809 | $ | 51,697 | $ | 95,719 | $ | 88,887 | ||||||||
Adjustments: | ||||||||||||||||
Interest income | (35 | ) | (7 | ) | (63 | ) | (14 | ) | ||||||||
Interest expense | 18,531 | 9,011 | 33,250 | 16,534 | ||||||||||||
Realized losses on interest rate swaps and caps, net | 2,529 | 2,765 | 5,079 | 5,407 | ||||||||||||
Unrealized (gains) losses on interest rate swaps and caps, net | (1,025 | ) | 4,453 | (2,073 | ) | 2,242 | ||||||||||
Income tax expense | 4,122 | 3,766 | 6,445 | 6,380 | ||||||||||||
Net (loss) income attributable to the noncontrolling interest | (687 | ) | 9,514 | (1,134 | ) | 15,137 | ||||||||||
Depreciation expense | 22,801 | 24,001 | 44,381 | 42,867 | ||||||||||||
Amortization expense | 1,299 | 1,574 | 2,605 | 3,332 | ||||||||||||
Gain on sale of containers to noncontrolling interest | - | (19,773 | ) | - | (19,773 | ) | ||||||||||
Impact of reconciling items on net (loss) income attributable to the noncontrolling interest |
(646 | ) | (456 | ) | (1,157 | ) | (4,612 | ) | ||||||||
Adjusted EBITDA | $ | 92,698 | $ | 86,545 | $ | 183,052 | $ | 156,387 | ||||||||
Net cash provided by operating activities | $ | 108,525 | $ | 95,994 | ||||||||||||
Adjustments: | ||||||||||||||||
Bad debt expense, net | (2,461 | ) | (544 | ) | ||||||||||||
Amortization of debt issuance costs | (6,370 | ) | (3,679 | ) | ||||||||||||
Amortization of acquired net below market leases | 33 | 294 | ||||||||||||||
Amortization of deferred revenue | 4,532 | 3,907 | ||||||||||||||
Amortization of unearned income on direct financing and sales-type leases | 5,407 | 4,551 | ||||||||||||||
Gains on sale of containers, net | 19,451 | 15,811 | ||||||||||||||
Share-based compensation expense | (4,190 | ) | (3,261 | ) | ||||||||||||
Interest income | (63 | ) | (14 | ) | ||||||||||||
Interest expense | 33,250 | 16,534 | ||||||||||||||
Realized losses on interest rate swaps and caps, net | 5,079 | 5,407 | ||||||||||||||
Income tax expense | 6,445 | 6,380 | ||||||||||||||
Changes in operating assets and liabilities | 14,571 | 19,619 | ||||||||||||||
Impact of reconciling items on net (loss) income attributable to the noncontrolling interest |
|
(1,157 |
) |
(4,612 |
) | |||||||||||
Adjusted EBITDA | $ | 183,052 | $ | 156,387 |
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | |||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||
Reconciliation of net income excluding gain on sale of containers to noncontrolling interest: |
|||||||||||||||||
Net income attributable to |
$ |
45,809 |
$ | 51,697 | $ | 95,719 | $ | 88,887 | |||||||||
Adjustments: | |||||||||||||||||
Gain on sale of containers to noncontrolling interest | - | (19,773 | ) | - | (19,773 | ) | |||||||||||
Impact of reconciling item on net (loss) income attributable to noncontrolling interest |
- | 4,943 | - | 4,943 | |||||||||||||
Net income excluding gain on sale of containers to noncontrolling interest |
$ | 45,809 | $ | 36,867 | $ | 95,719 | $ | 74,057 | |||||||||
Reconciliation of adjusted net income: | |||||||||||||||||
Net income attributable to |
$ | 45,809 | $ | 51,697 | $ | 95,719 | $ | 88,887 | |||||||||
Adjustments: | |||||||||||||||||
Unrealized (gains) losses on interest rate swaps and caps, net | (1,025 | ) | 4,453 | (2,073 | ) | 2,242 | |||||||||||
Gain on sale of containers to noncontrolling interest | - | (19,773 | ) | - | (19,773 | ) | |||||||||||
Impact of reconciling items on net (loss) income attributable to noncontrolling interest |
(110 | ) | 4,050 | (130 | ) | 4,519 | |||||||||||
Adjusted net income | $ | 44,674 | $ | 40,427 | $ | 93,516 | $ | 75,875 | |||||||||
Reconciliation of adjusted net income per diluted common share: | |||||||||||||||||
Net income attributable to |
$ | 0.91 | $ | 1.03 | $ | 1.90 | $ | 1.78 | |||||||||
Adjustments: | |||||||||||||||||
Unrealized (gains) losses on interest rate swaps and caps, net | (0.02 | ) | 0.09 | (0.05 | ) | 0.04 | |||||||||||
Gain on sale of containers to noncontrolling interest | - | (0.40 | ) | - | (0.40 | ) | |||||||||||
Impact of reconciling items on net (loss) income attributable to noncontrolling interest |
- | 0.09 | - | 0.10 | |||||||||||||
Adjusted net income per diluted common share | $ | 0.89 | $ | 0.81 | $ | 1.85 | $ | 1.52 |
Mr.
Investor Relations Director
ir@textainer.com
Source:
News Provided by Acquire Media