UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
Commission File Number
(Translation of Registrant’s name into English)
(441) 296-2500
(Address of principal executive office)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class |
Trading Symbols |
Name of each exchange on which registered |
Common Shares, $0.01 par value |
TGH |
New York Stock Exchange |
7.00% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preference Shares, $0.01 par value |
TGH PRA |
New York Stock Exchange |
6.25% Series B Fixed Rate Cumulative Redeemable Perpetual Preference Shares, $0.01 par value |
TGH PRB |
New York Stock Exchange |
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable
1
TEXTAINER GROUP HOLDINGS LIMITED
Quarterly Report on Form 6-K for the Three and Six Months Ended June 30, 2023
Table of Contents
2
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS; CAUTIONARY LANGUAGE
This Quarterly Report on Form 6-K, including the section entitled Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains forward-looking statements within the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not statements of historical facts and may relate to, but are not limited to, expectations or estimates of future operating results or financial performance, capital expenditures, regulatory compliance, plans for growth and future operations, as well as assumptions relating to the foregoing. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “continue” or the negative of these terms or other similar terminology. The forward-looking statements contained in this Quarterly Report on Form 6-K include, but are not limited to, statements regarding (i) factors that are likely to continue to affect our performance and (ii) our belief that, assuming that our lenders remain solvent that our cash flow from operations, proceeds from the sale of containers and borrowing availability under our debt facilities are sufficient to meet our liquidity needs, including for the payment of dividends, for the next twelve months.
Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy, and actual results may differ materially from those we anticipated due to a number of uncertainties, many of which cannot be foreseen. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including, among others, the risk described in Item 4, “Risk Factors” of this Quarterly Report on Form 6-K and the risks we face that are described in the section entitled Item 3, “Key Information -- Risk Factors” included in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 14, 2023 (our “2022 Form 20-F”).
We believe that it is important to communicate our expectations about the future to potential investors, shareholders and other readers. However, there may be events in the future that we are not able to accurately predict or control and that may cause actual events or results to differ materially from the expectations expressed in or implied by our forward-looking statements. The risk factors listed in Item 3, “Key Information -- Risk Factors” included in our 2022 Form 20-F, as well as any cautionary language in this Quarterly Report on Form 6-K, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Before you decide to buy, hold or sell our common shares, you should be aware that the occurrence of the events described in Item 3, “Key Information -- Risk Factors” included in our 2022 Form 20-F and elsewhere in this Quarterly Report on Form 6-K could negatively impact our business, cash flows, results of operations, financial condition and share price. Potential investors, shareholders and other readers are cautioned not to place undue reliance on our forward-looking statements.
Forward-looking statements regarding our present plans or expectations for fleet size, management contracts, container purchases, sources and availability of financing, and growth involve risks and uncertainties relative to return expectations and related allocation of resources, and changing economic or competitive conditions, as well as the negotiation of agreements with container investors, which could cause actual results to differ from present plans or expectations, and such differences could be material. Similarly, forward-looking statements regarding our present expectations for operating results and cash flow involve risks and uncertainties related to factors such as utilization rates, per diem rates, container prices, demand for containers by container shipping lines, supply, the anticipated trends and effects in respect of the COVID-19 pandemic and post-pandemic, and other factors discussed under Item 3, “Key Information -- Risk Factors” included in our 2022 Form 20-F or elsewhere in this Quarterly Report on Form 6-K, which could also cause actual results to differ from present plans. Such differences could be material.
All future written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. New risks and uncertainties arise from time to time, and we cannot predict those events or how they may affect us. The forward-looking statements contained in this Quarterly Report on Form 6-K speak only as of, and are based on information available to us on, the date of the filing of this Quarterly Report on Form 6-K. We assume no obligation to, and do not plan to, update any forward-looking statements after the date of this Quarterly Report on Form 6-K as a result of new information, future events or developments, except as expressly required by U.S. federal securities laws. You should read this Quarterly Report on Form 6-K and the documents that we reference and have furnished as exhibits with the understanding that we cannot guarantee future results, levels of activity, performance or achievements and that actual results may differ materially from what we expect.
In this Quarterly Report on Form 6-K, unless otherwise specified, all monetary amounts are in U.S. dollars. To the extent that any monetary amounts are not denominated in U.S. dollars, they have been translated into U.S. dollars in accordance with our accounting policies as described in Item 18, “Financial Statements” included in our 2022 Form 20-F.
3
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(All currency expressed in United States dollars in thousands, except share data)
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June 30, 2023 |
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December 31, 2022 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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— |
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Accounts receivable, net of allowance of $ |
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Net investment in finance leases, net of allowance of $ |
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Container leaseback financing receivable, net of allowance of $ |
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Trading containers |
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Containers held for sale |
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Prepaid expenses and other current assets |
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Due from affiliates, net |
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Total current assets |
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Restricted cash |
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Containers, net of accumulated depreciation of $ |
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Net investment in finance leases, net of allowance of $ |
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Container leaseback financing receivable, net of allowance of $ |
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Derivative instruments |
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Deferred taxes |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and Equity |
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Current liabilities: |
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Accounts payable and accrued expenses |
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$ |
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$ |
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Container contracts payable |
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Other liabilities |
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Due to container investors, net |
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Debt, net of unamortized costs of $ |
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Total current liabilities |
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Debt, net of unamortized costs of $ |
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Derivative instruments |
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— |
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Income tax payable |
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Deferred taxes |
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Other liabilities |
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Total liabilities |
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Shareholders’ Equity: |
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Cumulative redeemable perpetual preferred shares, $ |
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Common shares, $ |
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Treasury shares, at cost, |
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( |
) |
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( |
) |
Additional paid-in capital |
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Accumulated other comprehensive income |
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Retained earnings |
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
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$ |
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$ |
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The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
4
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(All currency expressed in United States dollars in thousands, except per share amounts)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Revenues: |
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Operating leases - owned fleet |
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$ |
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$ |
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$ |
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$ |
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Operating leases - managed fleet |
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Finance leases and container leaseback financing receivable - owned fleet |
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Total lease rental income |
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Management fees - non-leasing |
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Trading container sales proceeds |
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Cost of trading containers sold |
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( |
) |
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( |
) |
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( |
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( |
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Trading container margin |
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Gain on sale of owned fleet containers, net |
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Operating expenses: |
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Direct container expense - owned fleet |
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Distribution expense to managed fleet container investors |
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Depreciation and amortization |
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General and administrative expense |
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Bad debt (recovery) expense, net |
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( |
) |
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( |
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Container lessee default expense, net |
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Total operating expenses |
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Income from operations |
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Other (expense) income: |
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Interest expense |
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( |
) |
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( |
) |
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( |
) |
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( |
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Other, net (1) |
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Net other expense |
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( |
) |
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( |
) |
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( |
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( |
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Income before income taxes |
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Income tax expense |
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( |
) |
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( |
) |
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( |
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( |
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Net income |
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Less: Dividends on preferred shares |
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Net income attributable to common shareholders |
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$ |
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$ |
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$ |
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$ |
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Net income attributable to common shareholders per share: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average shares outstanding (in thousands): |
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Basic |
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Diluted |
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The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
5
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(All currency expressed in United States dollars in thousands)
|
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss), before tax: |
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Change in derivative instruments designated as cash flow hedges |
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Reclassification of realized (gain) loss on derivative |
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( |
) |
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( |
) |
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Foreign currency translation adjustments |
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( |
) |
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( |
) |
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( |
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Comprehensive income, before tax |
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Income tax (expense) benefit related to items of other comprehensive income |
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( |
) |
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( |
) |
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( |
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Comprehensive income, after tax |
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Less: Dividends on preferred shares |
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Comprehensive income attributable to common shareholders |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
6
(Unaudited)
(All currency expressed in United States dollars in thousands, except share data)
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Accumulated |
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Additional |
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other |
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Total |
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Preferred shares |
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Common shares |
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Treasury shares |
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paid-in |
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comprehensive |
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Retained |
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shareholders’ |
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Shares |
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Amount |
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Shares |
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Amount |
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Shares |
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Amount |
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capital |
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income |
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earnings |
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equity |
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Balances, December 31, 2021 |
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$ |
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$ |
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( |
) |
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$ |
( |
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$ |
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$ |
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$ |
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$ |
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Restricted share units vested |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Exercise of share options |
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— |
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— |
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— |
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— |
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— |
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— |
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Purchase of treasury shares |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
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— |
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— |
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— |
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( |
) |
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Share-based compensation expense |
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— |
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