Highlights:
- Our fourth quarter of 2011 closed out a record year for
Textainer in terms of revenues, profitability, fleet size, utilization and capital expenditures; - Record net income attributable to
Textainer Group Holdings Limited common shareholders of$54.9 million , or$1.10 per diluted common share, for the fourth quarter and$189.6 million , or$3.80 per diluted common share, for the full year; - Record adjusted net income(1) of
$53.0 million , or$1.06 per diluted common share, for the fourth quarter and$178.2 million , or$3.58 per diluted common share, for the full year; - Average fleet utilization of 97.7% for the fourth quarter of 2011, and a record 98.3% for the full year;
- Total capital expenditures for both our owned and managed fleets were
$904 million for the year, used to purchase 215,000 Twenty-Foot Equivalent Units ("TEU") of new standard dry-freight containers, 18,000 TEU of new refrigerated containers and 215,000 TEU of used containers, all new records; - Paid a
$0.35 per share dividend in the fourth quarter and declared a$0.37 per share dividend in the first quarter of 2012, an increase of 5.7%.
Key Financial Information (in thousands except for per share and TEU amounts): | ||||||||||||||||
Q4 2011 | Q4 2010 | Full-year 2011 | Full-year 2010 | |||||||||||||
Total revenues | $ | 116,377 | $ | 83,999 | $ | 422,796 | $ | 303,879 | ||||||||
Net income |
$ |
54,919 |
$ |
40,047 |
$ |
189,606 |
$ |
120,031 |
||||||||
Net income |
$ |
1.10 |
$ |
0.81 |
$ |
3.80 |
$ |
2.43 |
||||||||
Adjusted net |
$ |
53,008 |
$ |
35,701 |
$ |
178,199 |
$ |
123,451 |
||||||||
Adjusted net |
$ |
1.06 |
$ |
0.72 |
$ |
3.58 |
$ |
2.50 |
||||||||
EBITDA(1) | $ | 89,213 | $ | 65,300 | $ | 332,212 | $ | 218,995 | ||||||||
Average fleet |
97.7 |
% |
98.0 |
% |
98.3 |
% |
95.4 |
% | ||||||||
Total fleet size at |
2,469,039 |
2,314,219 |
| |||||||||||||
Owned |
58.6 |
% |
50.9 |
% |
|
"Adjusted net income" and "EBITDA" are Non-GAAP Measures that are reconciled to GAAP measures in footnote 1. "Adjusted net income" is defined as net income attributable to
All of Textainer's financial results above were positively impacted by the following items in the fourth quarter 2011, compared to the year ago quarter:
- 28.0% increase in the average size of the owned container fleet;
- 1.7% increase in average per diem rental rates;
$2.3 million increase in net gain on container trading due to increased sales volume and average sales proceeds per container; and- An increase in estimated residual values, beginning
July 1, 2011 , used in the calculation of depreciation expense which resulted in$4.8 million less depreciation expense than would have been recorded using prior residual values.
These items were partially offset by increases in depreciation expense and interest expense due to the increase in the size of the owned container fleet and associated debt to fund this expansion.
All of Textainer's financial results above were positively impacted by the following items for full-year 2011, compared to the prior year:
- 29.5% increase in the average size of the owned container fleet;
- 7.1% increase in average per diem rental rates;
- 2.9 percentage point increase in utilization;
$2.5 million increase in net gain on container trading due to increased sales volume and average sales proceeds per container;$7.2 million decrease in direct container expense primarily due to reduced storage expense;- An increase in estimated residual values, beginning
July 1, 2011 , used in the calculation of depreciation expense, which resulted in$9.5 million less depreciation expense than would have been recorded using prior residual values; and - A capital restructuring of our primary asset-owning subsidiary,
Textainer Marine Containers Limited ("TMCL"), effectiveJune 30, 2011 , whereby our wholly-owned subsidiary,Textainer Limited , now owns 100% of TMCL, eliminating the related noncontrolling interest. The restructuring resulted in a$19.8 million gain on sale of containers to the prior noncontrolling interest holder. The gain was the result of recognizing the fair value of containers and direct financing and sales-type leases in excess of their book value exchanged for TMCL's common shares at the time of the transaction. This was a noncash transaction.
These items were partially offset by increases in depreciation expense and interest expense due to the increase in the size of the owned container fleet and associated debt to fund this expansion.
TMCL's issuance of
Outlook
Capital expenditures for new standard dry-freight and refrigerated containers were the highest in the Company's history and in-fleet container utilization continues to remain at or near historic highs. Demand for new standard dry-freight containers began to slow during the second quarter but demand for depot equipment remained strong. Utilization declined by approximately 1%, over the last half of the year. "With 2011 as a backdrop, we expect that utilization may continue its slight decline during the first quarter of 2012, but that the overall level will remain attractive," commented
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 belief that it is in a strong position to continue purchasing both new and used containers to meet market demand and maintain its industry leading position; (ii) Textainer's expectation that utilization may continue its slight decline during the first quarter of 2012, but that the overall level will remain attractive and (iii) Textainer's expectation that its sizeable contracted revenue stream will continue to provide its shareholders with attractive returns. Readers are cautioned that these forward-looking statements involve risks and uncertainties, are only predictions and may differ materially from actual future events or results. These risks and uncertainties include, without limitation, the following items that could materially and negatively impact our business, results of operations, cash flows, financial condition and future prospects: any deceleration or reversal of the current domestic and global economic recoveries; lease rates may decrease and lessees may default, which could decrease revenue and increasing storage, repositioning, collection and recovery expenses; we own a large and growing number of containers in our fleet and are subject to significant ownership risk; further consolidation of container manufacturers or the disruption of manufacturing for the major manufacturers could result in higher new container prices and/or decreased supply of new containers and any increase in the cost or reduction in the supply of new containers; the demand for leased containers depends on many political and economic factors beyond
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||||||||||||||||
Condensed Consolidated Statements of Income | ||||||||||||||||||||||
Three Months and Years Ended | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
(All currency expressed in | ||||||||||||||||||||||
Three Months Ended | Years Ended | |||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||
Lease rental income | $ | 87,072 | $ | 68,237 | $ | 327,627 | $ | 235,827 | ||||||||||||||
Management fees | 6,628 | 8,072 | 29,324 | 29,137 | ||||||||||||||||||
Trading container sales proceeds | 14,770 | 1,445 | 34,214 | 11,291 | ||||||||||||||||||
Gains on sale of containers, net | 7,907 | 6,245 | 31,631 | 27,624 | ||||||||||||||||||
Total revenues | 116,377 | 83,999 | 422,796 | 303,879 | ||||||||||||||||||
Operating expenses (income): | ||||||||||||||||||||||
Direct container expense | 5,554 | 4,094 | 18,307 | 25,542 | ||||||||||||||||||
Cost of trading containers sold | 12,219 | 1,146 | 29,456 | 9,046 | ||||||||||||||||||
Depreciation expense | 21,501 | 18,050 | 83,177 | 58,972 | ||||||||||||||||||
Amortization expense | 1,335 | 1,756 | 6,110 | 6,544 | ||||||||||||||||||
General and administrative expense | 5,453 | 5,575 | 23,495 | 21,670 | ||||||||||||||||||
Short-term incentive compensation expense | 1,209 | 1,342 | 4,921 | 4,805 | ||||||||||||||||||
Long-term incentive compensation expense | 1,486 | 1,118 | 5,950 | 5,318 | ||||||||||||||||||
Bad debt expense, net | 782 | 399 | 3,007 | 145 | ||||||||||||||||||
Gain on sale of containers to noncontrolling interest | - | - | (19,773 | ) | - | |||||||||||||||||
Total operating expenses, net | 49,539 | 33,480 | 154,650 | 132,042 | ||||||||||||||||||
Income from operations | 66,838 | 50,519 | 268,146 | 171,837 | ||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||
Interest expense | (14,649 | ) | (6,658 | ) | (44,891 | ) | (18,151 | ) | ||||||||||||||
Interest income | 12 | 13 | 32 | 27 | ||||||||||||||||||
Realized losses on interest rate swaps and caps, net | (2,654 | ) | (2,445 | ) | (10,824 | ) | (9,844 | ) | ||||||||||||||
Unrealized gains (losses) on interest rate swaps, net | 1,909 | 5,495 | (3,849 | ) | (4,021 | ) | ||||||||||||||||
Other, net | 3 | (762 | ) | (115 | ) | (1,591 | ) | |||||||||||||||
Other expense, net | (15,379 | ) | (4,357 | ) | (59,647 | ) | (33,580 | ) | ||||||||||||||
Income before income tax and noncontrolling interest | 51,459 | 46,162 | 208,499 | 138,257 | ||||||||||||||||||
Income tax benefit (expense) | 3,030 | (1,274 | ) | (4,481 | ) | (4,493 | ) | |||||||||||||||
Net income | 54,489 | 44,888 | 204,018 | 133,764 | ||||||||||||||||||
Net loss (income) attributable to the noncontrolling interest | 430 | (4,841 | ) | (14,412 | ) | (13,733 | ) | |||||||||||||||
Net income attributable to |
||||||||||||||||||||||
Limited common shareholders | $ | 54,919 | $ | 40,047 | $ | 189,606 | $ | 120,031 | ||||||||||||||
Net income attributable to shareholders per share: | ||||||||||||||||||||||
Basic | $ | 1.12 | $ | 0.83 | $ | 3.88 | $ | 2.50 | ||||||||||||||
Diluted | $ | 1.10 | $ | 0.81 | $ | 3.80 | $ | 2.43 | ||||||||||||||
Weighted average shares outstanding (in thousands): | ||||||||||||||||||||||
Basic | 48,931 | 48,255 | 48,859 | 48,108 | ||||||||||||||||||
Diluted | 49,910 | 49,532 | 49,839 | 49,307 |
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(Unaudited) | ||||||||
(All currency expressed in | ||||||||
2011 | 2010 | |||||||
|
| |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 74,816 | $ | 57,081 | ||||
Accounts receivable, net of allowance for doubtful accounts of |
86,428 | 63,511 | ||||||
Net investment in direct financing and sales-type leases | 25,075 | 19,117 | ||||||
Trading containers | 12,970 | 404 | ||||||
Containers held for sale | 7,832 | 2,883 | ||||||
Prepaid expenses | 10,243 | 8,603 | ||||||
Deferred taxes | 2,443 | 1,895 | ||||||
Total current assets |
219,807 | 153,494 | ||||||
Restricted cash | 45,858 | 15,034 | ||||||
Containers, net of accumulated depreciation of |
1,903,855 | 1,437,259 | ||||||
Net investment in direct financing and sales-type leases | 85,121 | 72,224 | ||||||
Fixed assets, net of accumulated depreciation of |
1,717 | 1,804 | ||||||
Intangible assets, net of accumulated amortization of |
46,675 | 60,122 | ||||||
Interest rate swaps | - | 1,320 | ||||||
Other assets | 7,171 | 5,950 | ||||||
Total assets |
$ | 2,310,204 | $ | 1,747,207 | ||||
Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,616 | $ | 6,296 | ||||
Accrued expenses | 18,491 | 11,988 | ||||||
Container contracts payable | 25,510 | 98,731 | ||||||
Deferred revenue | 6,245 | 6,855 | ||||||
Due to owners, net | 15,812 | 17,545 | ||||||
Secured debt facility | 41,035 | - | ||||||
Bonds payable | 91,500 | 51,500 | ||||||
Total current liabilities |
201,209 | 192,915 | ||||||
Revolving credit facility | 133,047 | 104,000 | ||||||
Secured debt facility | 779,383 | 558,127 | ||||||
Bonds payable | 464,226 | 175,570 | ||||||
Deferred revenue | 1,136 | 2,994 | ||||||
Interest rate swaps | 16,110 | 13,581 | ||||||
Income tax payable | 22,729 | 20,821 | ||||||
Deferred taxes | 7,438 | 8,632 | ||||||
Total liabilities |
1,625,278 | 1,076,640 | ||||||
Equity: | ||||||||
Common shares, |
490 | 483 | ||||||
Additional paid-in capital | 154,460 | 181,602 | ||||||
Accumulated other comprehensive loss | (28 | ) | (52 | ) | ||||
Retained earnings | 528,906 | 401,849 | ||||||
Total |
683,828 | 583,882 | ||||||
Noncontrolling interest |
1,098 | 86,685 | ||||||
Total equity |
684,926 | 670,567 | ||||||
Total liabilities and equity |
$ | 2,310,204 | $ | 1,747,207 |
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | |||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||
Years Ended | |||||||||
(Unaudited) | |||||||||
(All currency expressed in | |||||||||
Years Ended | |||||||||
2011 | 2010 | ||||||||
Cash flows from operating activities: | |||||||||
Net income | $ | 204,018 | $ | 133,764 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation expense | 83,177 | 58,972 | |||||||
Bad debt expense, net | 3,007 | 145 | |||||||
Unrealized losses on interest rate swaps, net | 3,849 | 4,021 | |||||||
Amortization of debt issuance costs | 8,101 | 4,399 | |||||||
Amortization of intangible assets | 6,110 | 6,544 | |||||||
Amortization of acquired net (below) above-market leases | (411 | ) | 26 | ||||||
Amortization of deferred revenue | (9,181 | ) | (7,082 | ) | |||||
Amortization of unearned income on direct financing and sales-type leases | (9,055 | ) | (7,853 | ) | |||||
Gains on sale of containers, net | (31,631 | ) | (27,624 | ) | |||||
Gain on sale of containers to noncontrolling interest | (19,773 | ) | - | ||||||
Share-based compensation expense | 6,177 | 5,457 | |||||||
Changes in operating assets and liabilities | (31,043 | ) | (6,886 | ) | |||||
Total adjustments | 9,327 | 30,119 | |||||||
Net cash provided by operating activities | 213,345 | 163,883 | |||||||
Cash flows from investing activities: | |||||||||
Purchase of containers and fixed assets | (823,694 | ) | (402,286 | ) | |||||
Payment for |
(11,783 | ) | - | ||||||
Proceeds from sale of containers and fixed assets | 75,311 | 58,166 | |||||||
Receipt of principal payments on direct financing and sales-type leases |
35,042 | 41,156 | |||||||
Net cash used in investing activities | (725,124 | ) | (302,964 | ) | |||||
Cash flows from financing activities: | |||||||||
Proceeds from revolving credit facility | 202,100 | 152,000 | |||||||
Principal payments on revolving credit facility | (173,053 | ) | (127,000 | ) | |||||
Proceeds from secured debt facility | 627,000 | 327,000 | |||||||
Principal payments on secured debt facility | (364,803 | ) | (98,500 | ) | |||||
Proceeds from bonds payable | 400,000 | - | |||||||
Principal payments on bonds payable | (71,500 | ) | (51,500 | ) | |||||
Increase in restricted cash | (30,824 | ) | (8,448 | ) | |||||
Debt issuance costs | (8,402 | ) | (11,670 | ) | |||||
Issuance of common shares upon exercise of share options | 6,065 | 5,033 | |||||||
Excess tax benefit from share-based payment awards | 3,633 | - | |||||||
Capital contributions from noncontrolling interest | 1,823 | - | |||||||
Dividends paid | (62,549 | ) | (47,631 | ) | |||||
Net cash provided by financing activities | 529,490 | 139,284 | |||||||
Effect of exchange rate changes | 24 | 59 | |||||||
Net increase in cash and cash equivalents | 17,735 | 262 | |||||||
Cash and cash equivalents, beginning of the year | 57,081 | 56,819 | |||||||
Cash and cash equivalents, end of the year | $ | 74,816 | $ | 57,081 |
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Reconciliation of GAAP financial measures to non-GAAP financial measures
Three Months and Years 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 months and years ended
(a) net income attributable to
(b) net cash provided by operating activities to EBITDA (for the years ended
(c) net income attributable to
(d) 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 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 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, 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 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;
- 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, 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 | Years Ended | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Reconciliation of EBITDA: | ||||||||||||||||
Net income attributable to |
$ | 54,919 | $ | 40,047 | $ | 189,606 | $ | 120,031 | ||||||||
Adjustments: | ||||||||||||||||
Interest income | (12 | ) | (13 | ) | (32 | ) | (27 | ) | ||||||||
Interest expense | 14,649 | 6,658 | 44,891 | 18,151 | ||||||||||||
Realized losses on interest rate swaps and caps, net | 2,654 | 2,445 | 10,824 | 9,844 | ||||||||||||
Unrealized (gains) losses on interest rate swaps, net | (1,909 | ) | (5,495 | ) | 3,849 | 4,021 | ||||||||||
Income tax (benefit) expense | (3,030 | ) | 1,274 | 4,481 | 4,493 | |||||||||||
Net (loss) income attributable to the noncontrolling interest | (430 | ) | 4,841 | 14,412 | 13,733 | |||||||||||
Depreciation expense | 21,501 | 18,050 | 83,177 | 58,972 | ||||||||||||
Amortization expense | 1,335 | 1,756 | 6,110 | 6,544 | ||||||||||||
Gain on sale of containers to noncontrolling interest | - | - | (19,773 | ) | - | |||||||||||
Impact of reconciling items on net income attributable to the noncontrolling interest |
(464 | ) | (4,263 | ) | (5,333 | ) | (16,767 | ) | ||||||||
EBITDA | $ | 89,213 | $ | 65,300 | $ | 332,212 | $ | 218,995 | ||||||||
Net cash provided by operating activities | $ | 213,345 | $ | 163,883 | ||||||||||||
Adjustments: | ||||||||||||||||
Bad debt expense, net | (3,007 | ) | (145 | ) | ||||||||||||
Amortization of debt issuance costs | (8,101 | ) | (4,399 | ) | ||||||||||||
Amortization of acquired below (above)-market leases | 411 | (26 | ) | |||||||||||||
Amortization of deferred revenue | 9,181 | 7,082 | ||||||||||||||
Amortization of unearned income on direct financing and sales-type leases |
9,055 |
7,853 | ||||||||||||||
Gains on sale of containers, net | 31,631 | 27,624 | ||||||||||||||
Share-based compensation expense | (6,177 | ) | (5,457 | ) | ||||||||||||
Interest income | (32 | ) | (27 | ) | ||||||||||||
Interest expense | 44,891 | 18,151 | ||||||||||||||
Realized losses on interest rate swaps and caps, net | 10,824 | 9,844 | ||||||||||||||
Income tax expense | 4,481 | 4,493 | ||||||||||||||
Changes in operating assets and liabilities | 31,043 | 6,886 | ||||||||||||||
Impact of reconciling items on net income attributable to the noncontrolling interest |
(5,333 | ) | (16,767 | ) | ||||||||||||
EBITDA | $ | 332,212 | $ | 218,995 |
Three Months Ended | Years Ended | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Reconciliation of Adjusted net income: |
|
|||||||||||||||
Net income attributable to |
$ | 54,919 | $ | 40,047 | $ | 189,606 | $ | 120,031 | ||||||||
Adjustments: | ||||||||||||||||
Unrealized (gains) losses on interest rate swaps, net | (1,909 | ) | (5,495 | ) | 3,849 | 4,021 | ||||||||||
Gain on sale of containers to noncontrolling interest | - | - | (19,773 | ) | - | |||||||||||
Impact of reconciling items on net income attributable to noncontrolling interest |
(2 | ) | 1,149 | 4,517 | (601 | ) | ||||||||||
Adjusted net income | $ | 53,008 | $ | 35,701 | $ | 178,199 | $ | 123,451 | ||||||||
Reconciliation of Adjusted net income per diluted common share: | ||||||||||||||||
Net income attributable to Limited common shareholders per diluted common share |
$ | 1.10 | $ | 0.81 | $ | 3.80 | $ | 2.43 | ||||||||
Adjustments: | ||||||||||||||||
Unrealized (gains) losses on interest rate swaps, net | (0.04 | ) | (0.11 | ) | 0.08 | 0.08 | ||||||||||
Gain on sale of containers to noncontrolling interest | - | - | (0.39 | ) | - | |||||||||||
Impact of reconciling items on net income attributable to noncontrolling interest |
- | 0.02 | 0.09 | (0.01 | ) | |||||||||||
Adjusted net income per diluted common share | $ | 1.06 | $ | 0.72 | $ | 3.58 | $ | 2.50 |
Mr.
Investor Relations Director
ir@textainer.com
Source:
News Provided by Acquire Media