Raises Dividend by 6.5% to
Second Quarter and Year-to-Date 2011 Highlights
- Recorded net income attributable to
Textainer Group Holdings Limited common shareholders of$51.7 million , or$1.03 per diluted common share, for the second quarter and$88.9 million , or$1.78 per diluted common share, for the six months endedJune 30, 2011 ; - Completed a capital restructuring of our primary asset-owning subsidiary,
Textainer Marine Containers Limited ("TMCL"), effectiveJune 30, 2011 , whereby our wholly-owned subsidiary,Textainer Limited ("TL"), now owns 100% of TMCL. The restructuring resulted in a$19.8 million gain on sale of containers to the prior noncontrolling interest holder for the second quarter and six months endedJune 30, 2011 . The gain was the result of recognizing the fair value of containers and direct finance leases in excess of their book value exchanged for TMCL's common shares at the time of the transaction. This was a noncash transaction; - Recorded net income attributable to
Textainer Group Holdings Limited common shareholders excluding unrealized losses on interest rate swaps, net and gain on sale of containers to noncontrolling interest ("NCI")(1) of$40.4 million , or$0.81 per diluted common share, for the second quarter, and$75.9 million , or$1.52 per diluted common share, for the six months endedJune 30, 2011 ; - Increased average fleet utilization to 98.7% for the second quarter of 2011 from 95.3% for the second quarter 2010;
- Utilized balance sheet strength to order a total of 172,100 Twenty-Foot Equivalent Units ("TEU") of new standard dry-freight containers for delivery through
June 2011 , 15,000 TEU of new refrigerated containers for delivery throughDecember 2011 and 211,600 TEU of used containers, a total of 398,700 TEU, representing$761 million of capital expenditures year-to-date, a new record; - TMCL issued
$400 million in asset backed notes with an interest rate fixed at 4.70% per annum and final target and legal payment dates ofJune 15, 2021 andJune 15, 2026 , respectively; - Paid a
$0.31 per common share dividend onMay 23, 2011 to all shareholders of record as ofMay 16, 2011 ; and - Declared a dividend increase of 6.5% to
$0.33 per common share, payable onAugust 26, 2011 to all shareholders of record as ofAugust 19, 2011 .
Total revenue for the second quarter 2011 was
Net income attributable to
Net income attributable to
Net income attributable to
Net income attributable to
Outlook
Industry
While in-fleet container utilization continues to remain at historic highs, demand for our new standard dry-freight containers began to slow during the second quarter. We did not order any new standard dry freight containers for July or August production because we had an ample supply available from new production through June. Unless the traditional peak season occurs during August and September, it is unlikely that we will order new standard dry-freight containers for the next few months. Conversely, the demand for refrigerated containers remains strong. We have already ordered more than twice as many refrigerated containers for delivery through
At this point, we expect that high in-fleet utilization will continue through at least the remainder of 2011.
Strategic Focus
TMCL's issuance of
Dividend
On
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's expectation that it will continue to provide its shareholders with a sizeable contracted revenue stream; (ii) Textainer's belief that, unless the traditional peak season occurs during August and September, it is unlikely that
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
June 30, 2011 and December 2010 | ||||||||
(Unaudited) | ||||||||
(All currency expressed in United States dollars in thousands) | ||||||||
2011 |
2010 |
|||||||
|
| |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 77,162 | $ | 57,081 | ||||
Accounts receivable, net of allowance for doubtful accounts of $9,281 and $8,653 in 2011 and 2010, respectively |
79,639 | 63,511 | ||||||
Net investment in direct financing and sales-type leases | 23,094 | 19,117 | ||||||
Trading containers | 2,956 | 404 | ||||||
Containers held for resale | 2,030 | 2,883 | ||||||
Prepaid expenses | 11,448 | 8,603 | ||||||
Deferred taxes | 1,896 | 1,895 | ||||||
Due from affiliates, net | 5 | - | ||||||
Total current assets | 198,230 | 153,494 | ||||||
Restricted cash | 35,941 | 15,034 | ||||||
Containers, net of accumulated depreciation of $354,961 and $361,791 at 2011 and 2010, respectively |
1,833,678 | 1,437,259 | ||||||
Net investment in direct financing and sales-type leases | 74,886 | 72,224 | ||||||
Fixed assets, net of accumulated depreciation of $9,186 and $8,820 at 2011 and 2010, respectively |
1,885 | 1,804 | ||||||
Intangible assets, net of accumulated amortization of $30,679 and $27,441 at 2011 and 2010, respectively |
49,438 | 60,122 | ||||||
Interest rate swaps | 344 | 1,320 | ||||||
Other assets | 8,620 | 5,950 | ||||||
Total assets | $ | 2,203,022 | $ | 1,747,207 | ||||
Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 5,558 | $ | 6,296 | ||||
Accrued expenses | 9,568 | 11,988 | ||||||
Container contracts payable | 154,237 | 98,731 | ||||||
Deferred revenue | 8,408 | 6,855 | ||||||
Due to owners, net | 13,975 | 17,545 | ||||||
Bonds payable | 91,500 | 51,500 | ||||||
Total current liabilities | 283,246 | 192,915 | ||||||
Revolving credit facility | 201,000 | 104,000 | ||||||
Secured debt facility | 540,372 | 558,127 | ||||||
Bonds payable | 509,904 | 175,570 | ||||||
Deferred revenue | 1,598 | 2,994 | ||||||
Interest rate swaps | 14,847 | 13,581 | ||||||
Income tax payable | 23,441 | 20,821 | ||||||
Deferred taxes | 8,089 | 8,632 | ||||||
Total liabilities | 1,582,497 | 1,076,640 | ||||||
Equity: | ||||||||
Textainer Group Holdings Limited shareholders' equity: | ||||||||
Common shares, $0.01 par value. Authorized 140,000,000 shares; issued and outstanding 48,921,943 and 48,318,058 at 2011 and 2010, respectively |
489 | 483 | ||||||
Additional paid-in capital | 158,504 | 181,602 | ||||||
Accumulated other comprehensive loss | 69 | (52 | ) | |||||
Retained earnings | 461,463 | 401,849 | ||||||
Total Textainer Group Holdings Limited shareholders' equity | 620,525 | 583,882 | ||||||
Noncontrolling interest | - | 86,685 | ||||||
Total equity | 620,525 | 670,567 | ||||||
Total liabilities and equity | $ | 2,203,022 | $ | 1,747,207 |
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||||||||||
Condensed Consolidated Statements of Income | ||||||||||||||||
Three and Six Months Ended June 30, 2011 and 2010 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(All currency expressed in United States dollars in thousands, except per share amounts) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues: | ||||||||||||||||
Lease rental income | $ | 83,049 | $ | 56,741 | $ | 155,408 | $ | 106,322 | ||||||||
Management fees | 7,615 | 6,897 | 15,299 | 13,305 | ||||||||||||
Trading container sales proceeds | 5,655 | 3,618 | 10,420 | 7,635 | ||||||||||||
Gains on sale of containers, net | 9,417 | 7,376 | 15,811 | 16,990 | ||||||||||||
Total revenues | 105,736 | 74,632 | 196,938 | 144,252 | ||||||||||||
Operating expenses (income): | ||||||||||||||||
Direct container expense | 4,315 | 7,965 | 8,273 | 17,341 | ||||||||||||
Cost of trading containers sold | 5,024 | 2,919 | 9,190 | 6,081 | ||||||||||||
Depreciation expense | 24,001 | 13,188 | 42,867 | 26,031 | ||||||||||||
Amortization expense | 1,574 | 1,575 | 3,332 | 3,152 | ||||||||||||
General and administrative expense | 6,043 | 5,601 | 12,241 | 10,949 | ||||||||||||
Short-term incentive compensation expense | 1,494 | 1,350 | 2,453 | 2,116 | ||||||||||||
Long-term incentive compensation expense | 1,372 | 1,063 | 3,108 | 3,138 | ||||||||||||
Bad debt expense (recovery), net | 408 | (205 | ) | 544 | (481 | ) | ||||||||||
Gain on sale of containers to noncontrolling interest | (19,773 | ) | - | (19,773 | ) | - | ||||||||||
Total operating expenses | 24,458 | 33,456 | 62,235 | 68,327 | ||||||||||||
Income from operations | 81,278 | 41,176 | 134,703 | 75,925 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (9,011 | ) | (2,781 | ) | (16,534 | ) | (5,435 | ) | ||||||||
Interest income | 7 | 3 | 14 | 6 | ||||||||||||
Realized losses on interest rate swaps and caps, net | (2,765 | ) | (2,354 | ) | (5,407 | ) | (5,107 | ) | ||||||||
Unrealized losses on interest rate swaps, net | (4,453 | ) | (4,728 | ) | (2,242 | ) | (6,328 | ) | ||||||||
Other, net | (79 | ) | (279 | ) | (130 | ) | (337 | ) | ||||||||
Other expense, Net |
(16,301 | ) | (10,139 | ) | (24,299 | ) | (17,201 | ) | ||||||||
Income before income tax and noncontrolling interest | 64,977 | 31,037 | 110,404 | 58,724 | ||||||||||||
Income tax expense | (3,766 | ) | (2,654 | ) | (6,380 | ) | (3,268 | ) | ||||||||
Net income |
61,211 | 28,383 | 104,024 | 55,456 | ||||||||||||
Less: Net income attributable to the noncontrolling interest | (9,514 | ) | (3,306 | ) | (15,137 | ) | (6,140 | ) | ||||||||
Net income attributable to Textainer Group Holdings | ||||||||||||||||
Limited common shareholders |
$ | 51,697 | $ | 25,077 | $ | 88,887 | $ | 49,316 | ||||||||
Net income attributable to Textainer Group Holdings Limited common shareholders per share: |
||||||||||||||||
Basic | $ | 1.06 | $ | 0.52 | $ | 1.82 | $ | 1.03 | ||||||||
Diluted | $ | 1.03 | $ | 0.51 | $ | 1.78 | $ | 1.01 | ||||||||
Weighted average shares outstanding (in thousands): | ||||||||||||||||
Basic | 48,899 | 48,067 | 48,780 | 48,050 | ||||||||||||
Diluted | 49,975 | 49,157 | 49,855 | 49,036 |
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
Six Months Ended June 30, 2011 and 2010 | ||||||||
(Unaudited) | ||||||||
(All currency expressed in United States dollars in thousands) | ||||||||
Six Months Ended June 30, | ||||||||
2011 | 2010 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 104,024 | $ | 55,456 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation expense | 42,867 | 26,031 | ||||||
Bad debt expense (recovery), net | 544 | (481 | ) | |||||
Unrealized losses on interest rate swaps, net | 2,242 | 6,328 | ||||||
Amortization of debt issuance costs | 3,679 | 1,019 | ||||||
Amortization of intangible assets | 3,332 | 3,152 | ||||||
Amortization of acquired net (below) above-market leases |
(294 | ) | 283 | |||||
Amortization of deferred revenue | (3,907 | ) | (3,573 | ) | ||||
Amortization of unearned income on direct financing and sales-type leases | (4,551 | ) | (4,121 | ) | ||||
Gains on sale of containers, net | (15,811 | ) | (16,990 | ) | ||||
Gain on sale of containers to noncontrolling interest | (19,773 | ) | - | |||||
Share-based compensation expense | 3,261 | 3,261 | ||||||
Changes in operating assets and liabilities | (23,405 | ) | 2,925 | |||||
Total adjustments | (11,816 | ) | 17,834 | |||||
Net cash provided by operating activities | 92,208 | 73,290 | ||||||
Cash flows from investing activities: | ||||||||
Purchase of containers and fixed assets | (527,085 | ) | (61,766 | ) | ||||
Proceeds from sale of containers and fixed assets | 35,410 | 32,635 | ||||||
Receipt of principal payments on direct financing and sales-type leases | 14,973 | 27,625 | ||||||
Net cash used in investing activities | (476,702 | ) | (1,506 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from revolving credit facility | 137,000 | 29,000 | ||||||
Principal payments on revolving credit facility | (40,000 | ) | (24,000 | ) | ||||
Proceeds from secured debt facility | 336,000 | 47,000 | ||||||
Principal payments on secured debt facility | (353,803 | ) | (56,000 | ) | ||||
Proceeds from bonds payable | 400,000 | - | ||||||
Principal payments on bonds payable | (25,750 | ) | (25,750 | ) | ||||
Increase in restricted cash | (20,907 | ) | (7,133 | ) | ||||
Debt issuance costs | (7,472 | ) | (11,672 | ) | ||||
Issuance of common shares upon exercise of share options | 5,626 | 1,728 | ||||||
Excess tax benefit from share-based payment awards | 3,034 | - | ||||||
Dividends paid | (29,273 | ) | (22,568 | ) | ||||
Net cash provided by (used in) financing activities | 404,455 | (69,395 | ) | |||||
Effect of exchange rate changes | 120 | (62 | ) | |||||
Net increase in cash and cash equivalents | 20,081 | 2,327 | ||||||
Cash and cash equivalents, beginning of the year | 57,081 | 56,819 | ||||||
Cash and cash equivalents, end of the period | $ | 77,162 | $ | 59,146 |
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 net income attributable to
- 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;
- 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 EBITDA, net income attributable to
Textainer Group Holdings Limited common shareholders excluding unrealized losses on interest rate swaps, net and gain on sale of containers to NCI or net income attributable toTextainer Group Holdings Limited common shareholders per diluted common share excluding unrealized losses on interest rate swaps, net and gain on sale of containers to NCI 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
June 30, |
Six Months Ended
June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Reconciliation of EBITDA: | ||||||||||||||||
Net income attributable to Textainer Group Holdings Limited common shareholders |
$ | 51,697 | $ | 25,077 | $ | 88,887 | $ | 49,316 | ||||||||
Adjustments: | ||||||||||||||||
Interest income | (7 | ) | (3 | ) | (14 | ) | (6 | ) | ||||||||
Interest expense | 9,011 | 2,781 |
16,534 |
5,435 | ||||||||||||
Realized losses on interest rate swaps and caps, net | 2,765 | 2,354 | 5,407 | 5,107 | ||||||||||||
Unrealized losses on interest rate swaps, net | 4,453 | 4,728 | 2,242 | 6,328 | ||||||||||||
Income tax expense | 3,766 | 2,654 | 6,380 | 3,268 | ||||||||||||
Net income attributable to the noncontrolling interest | 9,514 | 3,306 | 15,137 | 6,140 | ||||||||||||
Depreciation expense | 24,001 | 13,188 | 42,867 | 26,031 | ||||||||||||
Amortization expense | 1,574 | 1,575 | 3,332 | 3,152 | ||||||||||||
Gain on sale of containers to noncontrolling interest | (19,773 | ) | - | (19,773 | ) | - | ||||||||||
Impact of reconciling items on net income attributable to the noncontrolling interest |
(456 | ) | (4,058 | ) | (4,612 | ) | (7,481 | ) | ||||||||
EBITDA |
$ | 86,545 | $ | 51,602 | $ | 156,387 | $ | 97,290 | ||||||||
Net cash provided by operating activities |
$ |
92,208 |
$ |
73,290 |
||||||||||||
Adjustments: |
|
| ||||||||||||||
Bad debt (expense) recovery, net |
(544 |
) |
481 |
|||||||||||||
Amortization of debt issuance costs |
(3,679 |
) |
(1,019 |
) | ||||||||||||
Amortization of acquired below (above)-market leases |
294 |
(283 |
) | |||||||||||||
Amortization of deferred revenue |
3,907 |
3,573 |
||||||||||||||
Amortization of unearned income on direct financing and sales-type leases |
4,551 |
4,121 |
||||||||||||||
Gains on sale of containers, net |
15,811 |
16,990 |
||||||||||||||
Share-based compensation expense |
(3,261 |
) |
(3,261 |
) | ||||||||||||
Interest income |
(14 |
) |
(6 |
) | ||||||||||||
Interest expense |
16,534 |
5,435 |
||||||||||||||
Realized losses on interest rate swaps and caps, net |
5,407 |
5,107 |
||||||||||||||
Income tax expense |
6,380 |
3,268 |
||||||||||||||
Changes in operating assets and liabilities |
23,405 |
(2,925 |
) | |||||||||||||
Impact of reconciling items on net income attributable to the noncontrolling interest |
(4,612 |
) |
(7,481 |
) | ||||||||||||
EBITDA |
$ |
156,387 |
$ |
97,290 |
||||||||||||
Reconciliation of net income attributable to Textainer Group Holdings Limited common shareholders excluding unrealized losses on interest rate swaps, net and gain on sale of containers to noncontrolling interest: |
|
|||||||||||||||
Net income attributable to Textainer Group Holdings Limited common shareholders |
$ | 51,697 | $ | 25,077 | $ | 88,887 | $ | 49,316 | ||||||||
Adjustments: | ||||||||||||||||
Unrealized losses on interest rate swaps, net | 4,453 | 4,728 | 2,242 | 6,328 | ||||||||||||
Gain on sale of containers to noncontrolling interest | (19,773 | ) | - | (19,773 | ) | - | ||||||||||
Impact of reconciling items on net income attributable to noncontrolling interest
|
4,050 | (833 | ) | 4,519 | (1,170 | ) | ||||||||||
Net income attributable to Textainer Group Holdings Limited common shareholders excluding unrealized losses on interest rate swaps, net and gain on sale of containers to noncontrolling interest |
$ | 40,427 | $ | 28,972 | $ | 75,875 | $ | 54,474 | ||||||||
Reconciliation of net income attributable to Textainer Group Holdings Limited common shareholders per diluted common share excluding unrealized losses on interest rate swaps, net and gain on sale of containers to noncontrolling interest: |
||||||||||||||||
Net income attributable to Textainer Group Holdings Limited common shareholders per diluted common share |
$ | 1.03 | $ | 0.51 | $ | 1.78 | $ | 1.01 | ||||||||
Adjustments: | ||||||||||||||||
Unrealized losses on interest rate swaps, net | 0.09 | 0.10 | 0.04 | 0.13 | ||||||||||||
Gain on sale of containers to noncontrolling interest | (0.40 | ) | - | (0.40 | ) | - | ||||||||||
Impact of reconciling items on net income attributable to noncontrolling interest |
0.09 | (0.02 | ) |
0.10 |
(0.03 | ) | ||||||||||
Net income attributable to Textainer Group Holdings Limited common shareholders per diluted common share excluding unrealized losses on interest rate swaps, net and gain on sale of containers to noncontrolling interest |
$ | 0.81 | $ | 0.59 | $ | 1.52 | $ | 1.11 |
Mr.
Investor Relations Director
ir@textainer.com
Source:
News Provided by Acquire Media