Key Financial Information (in thousands except for per share and TEU amounts) and Business Highlights:
QTD |
||||||||||||
Q3 2021 |
Q2 2021 |
Q3 2020 |
||||||||||
Lease rental income |
$ |
195,830 |
$ |
187,434 |
$ |
149,130 |
||||||
Gain on sale of owned fleet containers, net |
$ |
20,028 |
$ |
18,836 |
$ |
7,976 |
||||||
Income from operations |
$ |
114,037 |
$ |
110,007 |
$ |
54,109 |
||||||
Net income attributable to common shareholders |
$ |
64,729 |
$ |
73,795 |
$ |
16,952 |
||||||
Net income attributable to common shareholders per diluted common share |
$ |
1.28 |
$ |
1.45 |
$ |
0.32 |
||||||
Adjusted net income (1) |
$ |
76,502 |
$ |
75,204 |
$ |
21,634 |
||||||
Adjusted net income per diluted common share (1) |
$ |
1.52 |
$ |
1.48 |
$ |
0.41 |
||||||
Adjusted EBITDA (1) |
$ |
184,240 |
$ |
178,448 |
$ |
118,960 |
||||||
Average fleet utilization (2) |
99.8 |
% |
99.8 |
% |
96.0 |
% |
||||||
Total fleet size at end of period (TEU) (3) |
4,264,946 |
4,101,575 |
3,599,889 |
|||||||||
Owned percentage of total fleet at end of period |
92.6 |
% |
90.6 |
% |
87.1 |
% |
(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 and units manufactured for us but not yet 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 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
$64.7 million for the third quarter or$1.28 per diluted common share, as compared to$73.8 million , or$1.45 per diluted common share in the second quarter of 2021; - Adjusted net income of
$76.5 million for the third quarter, or$1.52 per diluted common share, as compared to$75.2 million , or$1.48 per diluted common share in the second quarter of 2021; - Adjusted EBITDA of
$184.2 million for the third quarter, as compared to$178.4 million in the second quarter of 2021; - Average and ending utilization rate for the third quarter of 99.8%;
- Invested
$622 million in containers delivered during the third quarter, for a total$1.7 billion delivered through the first nine months of the year, virtually all of which are currently on lease with tenors in excess of 12 years; - As previously announced, issued
$600 million of fixed-rate asset backed notes with an 11-year tenor onAugust 11, 2021 . Additionally, issued a$209 million fixed-rate term loan with a 7-year tenor onOctober 18, 2021 . The resulting proceeds from both issuances were used to pay down other debt facilities and create additional borrowing capacity for future container investments. The successful closing of these financings in turn further lowered our average effective interest rate to 2.60% as of the end of the quarter; - As previously announced, repaid in full
$208 million of term loans onAugust 20, 2021 , which carried a blended interest rate of 4.30% and had an original maturity inFebruary 2025 . In accordance with the early redemption provisions of the term loans,Textainer made a loan termination payment of$10.6 million and incurred a write-off of unamortized debt issuance costs of$1.3 million ; - As previously announced, completed an underwritten public offering of 6,000,000 depositary shares, each representing a 1/1,000th interest in a share of its 6.25% Series B cumulative redeemable perpetual preference shares, for an aggregate public offering price of
$150 million ; - Repurchased 523,662 shares of common stock at an average price of
$31.63 per share during the third quarter.Textainer's board of directors authorized a$50 million increase to the share repurchase program of the Company's outstanding shares inSeptember 2021 , bringing its total authorization level to$200 million since inception. As of the end of the third quarter, the remaining authority under the share repurchase program totaled$77.5 million ; Textainer's board of directors approved and declared a quarterly preferred cash dividend on its 7.00% Series A and its 6.25% Series B cumulative redeemable perpetual preference shares, payable onDecember 15, 2021 , to holders of record as ofDecember 3, 2021 ; andTextainer's board of directors approved the reinstatement of the common dividend program and declared a$0.25 per common share cash dividend in the third quarter of 2021, payable onDecember 15, 2021 to holders of record as ofDecember 3, 2021 .
"We are proud to deliver yet another quarter of very positive results, which reflect the consistent execution of our strategy to maximize the current favorable market opportunities and drive profitable organic growth with a focus on optimized capex as well as continued operational and financial efficiencies. For the quarter, lease rental income increased to
"During the third quarter, we deployed
"The Board increased its authorization to repurchase shares by
"Additionally, the
"The current market fundamentals are expected to continue to be favorable as cargo demand remains strong and supply chain disruptions are widely predicted to sustain through most of 2022. We plan to maintain our disciplined approach towards fleet growth, investing selectively in the most attractive long-term opportunities, and remain committed to enhancing our financial performance to deliver long-term value to our common shareholders focusing on dividends and share repurchases to return capital to shareholders," concluded Ghesquiere.
Third-Quarter Results
Lease rental income increased
Trading container margin decreased
Gain on sale of owned fleet containers, net increased
Depreciation expense increased
General and administrative expense increased
Interest expense increased
Debt termination expense amounted to
Realized loss on financial instruments, net decreased
Conference Call and Webcast
A conference call to discuss the financial results for the third quarter 2021 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 |
Nine Months Ended |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Revenues: |
||||||||||||||||
Lease rental income - owned fleet |
$ |
182,655 |
$ |
133,587 |
$ |
509,526 |
$ |
392,307 |
||||||||
Lease rental income - managed fleet |
13,175 |
15,543 |
42,982 |
47,075 |
||||||||||||
Lease rental income |
195,830 |
149,130 |
552,508 |
439,382 |
||||||||||||
Management fees - non-leasing |
598 |
1,696 |
2,746 |
3,724 |
||||||||||||
Trading container sales proceeds |
6,307 |
7,655 |
22,648 |
24,667 |
||||||||||||
Cost of trading containers sold |
(3,668) |
(6,721) |
(13,612) |
(22,513) |
||||||||||||
Trading container margin |
2,639 |
934 |
9,036 |
2,154 |
||||||||||||
Gain on sale of owned fleet containers, net |
20,028 |
7,976 |
51,222 |
19,410 |
||||||||||||
Operating expenses: |
||||||||||||||||
Direct container expense - owned fleet |
5,210 |
16,395 |
17,794 |
44,907 |
||||||||||||
Distribution expense to managed fleet container investors |
11,751 |
14,364 |
38,770 |
43,219 |
||||||||||||
Depreciation expense |
72,839 |
65,374 |
208,660 |
196,056 |
||||||||||||
Amortization expense |
802 |
645 |
2,290 |
1,766 |
||||||||||||
General and administrative expense |
12,543 |
10,868 |
34,263 |
30,872 |
||||||||||||
Bad debt recovery, net |
(15) |
(2,095) |
(1,225) |
(326) |
||||||||||||
Container lessee default expense (recovery), net |
1,928 |
76 |
(1,185) |
(1,607) |
||||||||||||
Total operating expenses |
105,058 |
105,627 |
299,367 |
314,887 |
||||||||||||
Income from operations |
114,037 |
54,109 |
316,145 |
149,783 |
||||||||||||
Other (expense) income: |
||||||||||||||||
Interest expense |
(33,128) |
(29,123) |
(92,381) |
(95,257) |
||||||||||||
Debt termination expense |
(11,866) |
(8,628) |
(15,078) |
(8,750) |
||||||||||||
Interest income |
20 |
23 |
83 |
479 |
||||||||||||
Realized loss on financial instruments, net |
(112) |
(4,107) |
(5,516) |
(8,900) |
||||||||||||
Unrealized gain (loss) on financial instruments, net |
83 |
4,161 |
4,681 |
(9,434) |
||||||||||||
Other, net |
(750) |
859 |
(610) |
803 |
||||||||||||
Net other expense |
(45,753) |
(36,815) |
(108,821) |
(121,059) |
||||||||||||
Income before income taxes |
68,284 |
17,294 |
207,324 |
28,724 |
||||||||||||
Income tax benefit (expense) |
59 |
152 |
(890) |
(89) |
||||||||||||
Net income |
68,343 |
17,446 |
206,434 |
28,635 |
||||||||||||
Less: Dividends on preferred shares |
3,614 |
— |
5,860 |
— |
||||||||||||
Less: Net income attributable to the noncontrolling interest |
— |
494 |
— |
73 |
||||||||||||
Net income attributable to common shareholders |
$ |
64,729 |
$ |
16,952 |
$ |
200,574 |
$ |
28,562 |
||||||||
Net income attributable to common shareholders per share: |
||||||||||||||||
Basic |
$ |
1.31 |
$ |
0.32 |
$ |
4.03 |
$ |
0.53 |
||||||||
Diluted |
$ |
1.28 |
$ |
0.32 |
$ |
3.96 |
$ |
0.53 |
||||||||
Weighted average shares outstanding (in thousands): |
||||||||||||||||
Basic |
49,414 |
52,514 |
49,804 |
54,221 |
||||||||||||
Diluted |
50,417 |
52,713 |
50,708 |
54,317 |
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES |
||||||||
Consolidated Balance Sheets |
||||||||
(Unaudited) |
||||||||
(All currency expressed in |
||||||||
|
|
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
184,099 |
$ |
131,018 |
||||
Marketable securities |
986 |
— |
||||||
Accounts receivable, net of allowance of |
184,225 |
108,578 |
||||||
Net investment in finance leases, net of allowance of |
110,397 |
78,459 |
||||||
Container leaseback financing receivable, net of allowance of |
29,865 |
27,076 |
||||||
Trading containers |
18,850 |
9,375 |
||||||
Containers held for sale |
7,405 |
15,629 |
||||||
Prepaid expenses and other current assets |
14,049 |
13,713 |
||||||
Due from affiliates, net |
2,770 |
1,509 |
||||||
Total current assets |
552,646 |
385,357 |
||||||
Restricted cash |
76,955 |
74,147 |
||||||
Marketable securities |
3,240 |
— |
||||||
Containers, net of accumulated depreciation of |
4,693,533 |
4,125,052 |
||||||
Net investment in finance leases, net of allowance of |
1,591,858 |
801,501 |
||||||
Container leaseback financing receivable, net of allowance of |
331,808 |
336,792 |
||||||
Derivative instruments |
2,514 |
47 |
||||||
Deferred taxes |
1,151 |
1,153 |
||||||
Other assets |
14,440 |
17,327 |
||||||
Total assets |
$ |
7,268,145 |
$ |
5,741,376 |
||||
Liabilities and Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued expenses |
$ |
22,248 |
$ |
24,385 |
||||
Container contracts payable |
282,794 |
231,647 |
||||||
Other liabilities |
4,841 |
2,288 |
||||||
Due to container investors, net |
18,188 |
18,697 |
||||||
Debt, net of unamortized costs of |
346,287 |
408,365 |
||||||
Total current liabilities |
674,358 |
685,382 |
||||||
Debt, net of unamortized costs of |
4,799,995 |
3,706,979 |
||||||
Derivative instruments |
3,671 |
29,235 |
||||||
Income tax payable |
10,466 |
10,047 |
||||||
Deferred taxes |
7,405 |
6,491 |
||||||
Other liabilities |
40,396 |
16,524 |
||||||
Total liabilities |
5,536,291 |
4,454,658 |
||||||
Equity: |
||||||||
|
||||||||
Preferred shares, |
||||||||
7.00% Series A fixed-to-floating rate cumulative redeemable perpetual preferred shares, 6,000 |
150,000 |
— |
||||||
6.25% Series B fixed rate cumulative redeemable perpetual preferred shares, 6,000 shares |
150,000 |
— |
||||||
Common shares, |
592 |
587 |
||||||
|
(132,028) |
(86,239) |
||||||
Additional paid-in capital |
424,273 |
416,609 |
||||||
Accumulated other comprehensive loss |
(1,379) |
(9,744) |
||||||
Retained earnings |
1,140,396 |
938,395 |
||||||
|
1,731,854 |
1,259,608 |
||||||
Noncontrolling interest |
— |
27,110 |
||||||
Total equity |
1,731,854 |
1,286,718 |
||||||
Total liabilities and equity |
$ |
7,268,145 |
$ |
5,741,376 |
||||
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES |
||||||||
Consolidated Statements of Cash Flows |
||||||||
(Unaudited) |
||||||||
(All currency expressed in |
||||||||
Nine Months Ended |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities: |
||||||||
Net income |
$ |
206,434 |
$ |
28,635 |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation expense |
208,660 |
196,056 |
||||||
Bad debt recovery, net |
(1,225) |
(326) |
||||||
Container recovery from lessee default, net |
(4,835) |
(140) |
||||||
Unrealized (gain) loss on financial instruments, net |
(4,681) |
9,434 |
||||||
Amortization of unamortized debt issuance costs and accretion of bond discounts |
7,153 |
6,011 |
||||||
Debt termination expense |
15,078 |
8,750 |
||||||
Amortization of intangible assets |
2,290 |
1,766 |
||||||
Gain on sale of owned fleet containers, net |
(51,222) |
(19,410) |
||||||
Share-based compensation expense |
4,208 |
3,218 |
||||||
Changes in operating assets and liabilities |
1,757 |
54,319 |
||||||
Total adjustments |
177,183 |
259,678 |
||||||
Net cash provided by operating activities |
383,617 |
288,313 |
||||||
Cash flows from investing activities: |
||||||||
Purchase of containers and fixed assets |
(1,689,588) |
(273,171) |
||||||
Payment on container leaseback financing receivable |
(18,705) |
(24,089) |
||||||
Proceeds from sale of containers and fixed assets |
112,745 |
109,144 |
||||||
Receipt of principal payments on container leaseback financing receivable |
21,081 |
15,788 |
||||||
Net cash used in investing activities |
(1,574,467) |
(172,328) |
||||||
Cash flows from financing activities: |
||||||||
Proceeds from debt |
4,229,756 |
1,626,759 |
||||||
Payments on debt |
(3,199,942) |
(1,704,132) |
||||||
Payment of debt issuance costs |
(21,107) |
(13,333) |
||||||
Proceeds from container leaseback financing liability, net |
16,305 |
— |
||||||
Principal repayments on container leaseback financing liability, net |
(3,128) |
(12,754) |
||||||
Issuance of preferred shares, net of underwriting discount |
290,550 |
— |
||||||
Purchase of treasury shares |
(45,789) |
(56,779) |
||||||
Issuance of common shares upon exercise of share options |
6,789 |
224 |
||||||
Dividends paid on preferred shares |
(4,433) |
— |
||||||
Purchase of noncontrolling interest |
(21,500) |
— |
||||||
Other |
(654) |
— |
||||||
Net cash provided by (used in) financing activities |
1,246,847 |
(160,015) |
||||||
Effect of exchange rate changes |
(108) |
3 |
||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
55,889 |
(44,027) |
||||||
Cash, cash equivalents and restricted cash, beginning of the year |
205,165 |
277,905 |
||||||
Cash, cash equivalents and restricted cash, end of the period |
$ |
261,054 |
$ |
233,878 |
||||
Supplemental disclosures of cash flow information: |
||||||||
Cash paid for interest expense and realized loss and settlement of derivative instruments |
$ |
115,454 |
$ |
98,351 |
||||
Income taxes paid |
$ |
1,559 |
$ |
29 |
||||
Receipt of payments on finance leases, net of income earned |
$ |
47,490 |
$ |
33,325 |
||||
Supplemental disclosures of noncash operating activities: |
||||||||
Receipt of marketable securities from a lessee |
$ |
5,789 |
$ |
- |
||||
Right-of-use asset for leased properties |
$ |
272 |
$ |
555 |
||||
Supplemental disclosures of noncash investing activities: |
||||||||
Increase in accrued container purchases |
$ |
51,147 |
$ |
316,503 |
||||
Containers placed in finance leases |
$ |
902,748 |
$ |
355,096 |
||||
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 nine 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, |
Nine Months Ended, |
|||||||||||||||||||||||||
September |
|
September |
September |
September |
||||||||||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||||||||||||
Reconciliation of adjusted net income: |
||||||||||||||||||||||||||
Net income attributable to common shareholders |
$ |
64,729 |
$ |
73,795 |
$ |
16,952 |
$ |
200,574 |
$ |
28,562 |
||||||||||||||||
Adjustments: |
||||||||||||||||||||||||||
Debt termination expense |
11,866 |
2,945 |
8,628 |
15,078 |
8,750 |
|||||||||||||||||||||
Unrealized (gain) loss on financial instruments, net |
(83) |
(1,406) |
(4,161) |
(4,681) |
9,434 |
|||||||||||||||||||||
Loss on settlement of pre-existing management agreement |
116 |
— |
— |
116 |
— |
|||||||||||||||||||||
Impact of reconciling items on income tax |
(126) |
(130) |
(42) |
(229) |
(179) |
|||||||||||||||||||||
Impact of reconciling items attributable to the noncontrolling interest |
— |
— |
257 |
— |
(437) |
|||||||||||||||||||||
Adjusted net income |
$ |
76,502 |
$ |
75,204 |
$ |
21,634 |
$ |
210,858 |
$ |
46,130 |
||||||||||||||||
Adjusted net income per diluted common share |
$ |
1.52 |
$ |
1.48 |
$ |
0.41 |
$ |
4.16 |
$ |
0.85 |
||||||||||||||||
Three Months Ended, |
Nine Months Ended, |
|||||||||||||||||||
September |
|
September |
September |
September |
||||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||||||
Reconciliation of adjusted EBITDA: |
||||||||||||||||||||
Net income attributable to common shareholders |
$ |
64,729 |
$ |
73,795 |
$ |
16,952 |
$ |
200,574 |
$ |
28,562 |
||||||||||
Adjustments: |
||||||||||||||||||||
Interest income |
(20) |
(26) |
(23) |
(83) |
(479) |
|||||||||||||||
Interest expense |
33,128 |
30,147 |
29,123 |
92,381 |
95,257 |
|||||||||||||||
Debt termination expense |
11,866 |
2,945 |
8,628 |
15,078 |
8,750 |
|||||||||||||||
Realized loss on derivative instruments, net |
4 |
2,448 |
4,107 |
5,408 |
8,900 |
|||||||||||||||
Unrealized (gain) loss on financial instruments, net |
(83) |
(1,406) |
(4,161) |
(4,681) |
9,434 |
|||||||||||||||
Loss on settlement of pre-existing management agreement |
116 |
— |
— |
116 |
— |
|||||||||||||||
Income tax (benefit) expense |
(59) |
(117) |
(152) |
890 |
89 |
|||||||||||||||
Net income attributable to the noncontrolling interest |
— |
— |
494 |
— |
73 |
|||||||||||||||
Depreciation expense |
72,839 |
70,015 |
65,374 |
208,660 |
196,056 |
|||||||||||||||
Container write off (recovery) from lessee default, net |
918 |
(41) |
33 |
(4,835) |
(1,525) |
|||||||||||||||
Amortization expense |
802 |
688 |
645 |
2,290 |
1,766 |
|||||||||||||||
Impact of reconciling items attributable to the noncontrolling interest |
— |
— |
(2,060) |
— |
(7,507) |
|||||||||||||||
Adjusted EBITDA |
$ |
184,240 |
$ |
178,448 |
$ |
118,960 |
$ |
515,798 |
$ |
339,376 |
||||||||||
Three Months Ended, |
Nine Months Ended, |
|||||||||||||||||||
September |
|
September |
September |
September |
||||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||||||
Reconciliation of headline earnings: |
||||||||||||||||||||
Net income attributable to common shareholders |
$ |
64,729 |
$ |
73,795 |
$ |
16,952 |
$ |
200,574 |
$ |
28,562 |
||||||||||
Adjustments: |
||||||||||||||||||||
Container impairment (recovery) |
1,183 |
254 |
3,074 |
(5,114) |
8,857 |
|||||||||||||||
Loss on settlement of pre-existing management agreement |
116 |
— |
— |
116 |
— |
|||||||||||||||
Impact of reconciling items on income tax |
(35) |
(2) |
(28) |
24 |
(86) |
|||||||||||||||
Impact of reconciling items attributable to the noncontrolling interest |
— |
— |
(85) |
— |
(243) |
|||||||||||||||
Headline earnings |
$ |
65,993 |
$ |
74,047 |
$ |
19,913 |
$ |
195,600 |
$ |
37,090 |
||||||||||
Headline earnings per basic common share |
$ |
1.34 |
$ |
1.49 |
$ |
0.38 |
$ |
3.93 |
$ |
0.68 |
||||||||||
Headline earnings per diluted common share |
$ |
1.31 |
$ |
1.46 |
$ |
0.38 |
$ |
3.86 |
$ |
0.68 |
View original content:https://www.prnewswire.com/news-releases/textainer-group-holdings-limited-reports-third-quarter-2021-results-and-reinstates-quarterly-dividend-301417101.html
SOURCE