Quarter and Year-to-Date Highlights:
- Net income attributable to
Textainer Group Holdings Limited common shareholders of$49.9 million , or$0.99 per diluted common share, for the first quarter 2012, an increase of 34.2% compared to$37.2 million for the prior year quarter; - Adjusted net income(1) of
$48.8 million , or$0.97 per diluted common share, for the first quarter 2012, an increase of 37.8% compared to$35.4 million for the prior year quarter; - Utilization continued at very high levels, averaging 96.9% during the first quarter;
- Continued with strong pace of expansion through capital expenditures; ordered 224,000 Twenty-Foot Equivalent Units ("TEU") of new dry-freight containers and 15,000 TEU of new refrigerated containers for delivery through
July 2012 and purchased 2,000 TEU of previously managed used containers, representing$660 million of capital expenditures year-to-date; - Successfully issued
$400 million in asset-backed notes inApril 2012 with a fixed interest rate, payable monthly, of 4.21% per annum, resulting in an effective semi-annual yield on the Notes of 4.25% per annum.; - Significantly increased the size of the company's warehouse facility to
$1.2 billion inMay 2012 , providing significant liquidity for the company's owned fleet expansion; and - Paid a
$0.37 per share dividend in the first quarter and declared a$0.40 per share dividend in the second quarter of 2012, an increase of 8.1% from the first quarter.
"Our Q1 results represent a solid start to 2012," said
Key Financial Information (in thousands except for per share and TEU amounts):
Q1 2012 | Q1 2011 | % Change | ||||
Total revenues | 28.9% | |||||
Net income attributable to |
|
|
34.2% | |||
Net income attributable to |
|
|
32.0% | |||
Adjusted net income(1) | 37.8% | |||||
Adjusted net income per diluted common share(1) | 36.6% | |||||
EBITDA(1) | 29.4% | |||||
Average fleet utilization | 96.9% | 98.2% | (1.3%) | |||
Total fleet size at end of period (TEU) | 2,487,029 | 2,358,077 | 5.5% | |||
Owned percentage of total fleet at end of period | 58.5% | 52.1% | 12.3% | |||
"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
Textainer's financial results benefitted from a 20.1% increase in the size of the owned container fleet in the first quarter 2012, compared to the year ago quarter, from an average of 1,201,000 TEU to 1,442,000 TEU, partially offset by incremental 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.
On
On
With a debt-to-equity ratio of 2.2:1 and the additional liquidity created by our recent financings, the Company is in a strong position to continue purchasing both new and used containers to meet the needs of shipping companies that have shown an increasing preference to lease containers.
"I am pleased with our recent financings which not only lower our overall cost of funds but also provide significant capacity for organic growth as we continue purchasing both new and used containers to meet market demand and further strengthen our industry leading position," concluded
Outlook
The run rate of 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.
"Although utilization decreased 1.3% during the first quarter of 2012 compared to the year ago quarter, it has improved steadily since early April," commented
Dividend
On
"Our consistent performance and confidence in our long-term outlook enables us to increase our dividend for the ninth consecutive quarter as we continue to focus on total shareholder return," concluded
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 its recent financing not only lowers its overall cost of funds but also provide significant capacity for organic growth as it continues purchasing both new and used containers; (ii) Textainer's belief that having 79% of its fleet committed to long-term and direct financing and sales-type leases, compared to 76% a year ago, reduces the volatility of its utilization; and (iii) Textainer's expectation that it will maintain its focus on healthy organic growth during the coming months. 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 Comprehensive Income | |||||||||||||||
Three Months Ended | |||||||||||||||
(Unaudited) | |||||||||||||||
(All currency expressed in | |||||||||||||||
March 31, | |||||||||||||||
2012 | 2011 | ||||||||||||||
Revenues: | |||||||||||||||
Lease rental income | $ | 87,888 | $ | 72,359 | |||||||||||
Management fees | 6,801 | 7,684 | |||||||||||||
Trading container sales proceeds | 11,537 | 4,765 | |||||||||||||
Gains on sale of containers, net | 11,289 | 6,394 | |||||||||||||
Total revenues | 117,515 | 91,202 | |||||||||||||
Operating expenses: | |||||||||||||||
Direct container expense | 6,060 | 3,958 | |||||||||||||
Cost of trading containers sold | 10,002 | 4,166 | |||||||||||||
Depreciation expense | 21,580 | 18,866 | |||||||||||||
Amortization expense | 1,306 | 1,758 | |||||||||||||
General and administrative expense | 5,723 | 6,198 | |||||||||||||
Short-term incentive compensation expense | 992 | 959 | |||||||||||||
Long-term incentive compensation expense | 2,154 | 1,736 | |||||||||||||
Bad debt expense, net | 1,718 | 136 | |||||||||||||
Total operating expenses | 49,535 | 37,777 | |||||||||||||
Income from operations | 67,980 | 53,425 | |||||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (14,719 | ) | (7,523 | ) | |||||||||||
Interest income | 28 | 7 | |||||||||||||
Realized losses on interest rate swaps and caps, net | (2,550 | ) | (2,642 | ) | |||||||||||
Unrealized gains on interest rate swaps and caps, net | 1,048 | 2,211 | |||||||||||||
Other, net | (1 | ) | (51 | ) | |||||||||||
Net other expense | (16,194 | ) | (7,998 | ) | |||||||||||
Income before income tax and noncontrolling interest | 51,786 | 45,427 | |||||||||||||
Income tax expense | (2,323 | ) | (2,614 | ) | |||||||||||
Net income | 49,463 | 42,813 | |||||||||||||
Less: Net loss (income) attributable to the noncontrolling interest | 447 | (5,623 | ) | ||||||||||||
Net income attributable to |
|||||||||||||||
Limited common shareholders | $ | 49,910 | $ | 37,190 | |||||||||||
Net income attributable to common shareholders per share: |
|||||||||||||||
$ | 1.01 | $ | 0.76 | ||||||||||||
Diluted | $ | 0.99 | $ | 0.75 | |||||||||||
Weighted average shares outstanding (in thousands): | |||||||||||||||
49,425 | 48,660 | ||||||||||||||
Diluted | 50,384 | 49,892 | |||||||||||||
Other comprehensive income: | |||||||||||||||
Foreign currency translation adjustments | 77 | 82 | |||||||||||||
Comprehensive income | 49,540 | 42,895 | |||||||||||||
Less: Comprehensive loss (income) attributable to the noncontrolling interest | 447 | (5,623 | ) | ||||||||||||
Comprehensive income attributable to |
|||||||||||||||
Limited common shareholders | $ | 49,987 | $ | 37,272 | |||||||||||
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | |||||||
Condensed Consolidated Balance Sheets | |||||||
(Unaudited) | |||||||
(All currency expressed in | |||||||
2012 | 2011 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 76,426 | $ | 74,816 | |||
Accounts receivable, net of allowance for doubtful accounts of |
83,779 | 86,428 | |||||
Net investment in direct financing and sales-type leases | 25,668 | 25,075 | |||||
Trading containers | 8,716 | 12,970 | |||||
Containers held for sale | 10,757 | 7,832 | |||||
Prepaid expenses | 11,064 | 10,243 | |||||
Deferred taxes | 2,453 | 2,443 | |||||
Total current assets | 218,863 | 219,807 | |||||
Restricted cash | 70,969 | 45,858 | |||||
Containers, net of accumulated depreciation of |
2,018,866 | 1,903,855 | |||||
Net investment in direct financing and sales-type leases | 83,503 | 85,121 | |||||
Fixed assets, net of accumulated depreciation of |
1,654 | 1,717 | |||||
Intangible assets, net of accumulated amortization of |
45,402 | 46,675 | |||||
Other assets | 7,606 | 7,171 | |||||
Total assets | $ | 2,446,863 | $ | 2,310,204 | |||
Liabilities and Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 3,280 | $ | 2,616 | |||
Accrued expenses | 8,760 | 18,491 | |||||
Container contracts payable | 76,329 | 25,510 | |||||
Deferred revenue | 4,441 | 6,245 | |||||
Due to owners, net | 13,863 | 15,812 | |||||
Secured debt facility | 62,452 | 41,035 | |||||
Bonds payable | 91,500 | 91,500 | |||||
Total current liabilities | 260,625 | 201,209 | |||||
Revolving credit facilities | 202,285 | 133,047 | |||||
Secured debt facility | 770,245 | 779,383 | |||||
Bonds payable | 441,584 | 464,226 | |||||
Deferred revenue | 347 | 1,136 | |||||
Interest rate swaps and caps | 15,062 | 16,110 | |||||
Income tax payable | 23,639 | 22,729 | |||||
Deferred taxes | 6,715 | 7,438 | |||||
Total liabilities | 1,720,502 | 1,625,278 | |||||
Equity: | |||||||
Common shares, |
495 | 490 | |||||
Additional paid-in capital | 163,146 | 154,460 | |||||
Accumulated other comprehensive loss | 49 | (28 | ) | ||||
Retained earnings | 560,528 | 528,906 | |||||
Total |
724,218 | 683,828 | |||||
Noncontrolling interest | 2,143 | 1,098 | |||||
Total equity | 726,361 | 684,926 | |||||
Total liabilities and equity | $ | 2,446,863 | $ | 2,310,204 | |||
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
Three Months Ended | ||||||||
(Unaudited) | ||||||||
(All currency expressed in | ||||||||
Three Months Ended | ||||||||
2012 | 2011 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 49,463 | $ | 42,813 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation expense | 21,580 | 18,866 | ||||||
Bad debt expense, net | 1,718 | 136 | ||||||
Unrealized gains on interest rate swaps and caps, net | (1,048 | ) | (2,211 | ) | ||||
Amortization of debt issuance costs | 2,418 | 1,750 | ||||||
Amortization of intangible assets | 1,306 | 1,758 | ||||||
Amortization of acquired below-market leases | (33 | ) | (151 | ) | ||||
Amortization of deferred revenue | (2,404 | ) | (1,687 | ) | ||||
Amortization of unearned income on direct financing and sales-type leases | (2,861 | ) | (1,920 | ) | ||||
Gains on sale of containers, net | (11,289 | ) | (6,394 | ) | ||||
Share-based compensation expense | 2,510 | 1,842 | ||||||
Changes in operating assets and liabilities | (8,453 | ) | (10,862 | ) | ||||
Total adjustments | 3,444 | 1,127 | ||||||
Net cash provided by operating activities | 52,907 | 43,940 | ||||||
Cash flows from investing activities: | ||||||||
Purchase of containers and fixed assets | (105,496 | ) | (129,919 | ) | ||||
Proceeds from sale of containers and fixed assets | 23,229 | 14,706 | ||||||
Receipt of principal payments on direct financing and sales-type leases | 8,808 | 7,035 | ||||||
Net cash used in investing activities | (73,459 | ) | (108,178 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from revolving credit facility | 69,630 | 55,000 | ||||||
Principal payments on revolving credit facility | (392 | ) | (40,000 | ) | ||||
Proceeds from secured debt facility | 12,000 | 142,500 | ||||||
Principal payments on secured debt facility | - | (31,000 | ) | |||||
Principal payments on bonds payable | (22,875 | ) | (12,875 | ) | ||||
Increase in restricted cash | (25,111 | ) | (9,438 | ) | ||||
Debt issuance costs | (552 | ) | (1,058 | ) | ||||
Issuance of common shares upon exercise of share options | 3,344 | 4,849 | ||||||
Excess tax benefit from share-based compensation awards | 2,837 | 3,182 | ||||||
Capital contributions from noncontrolling interest | 1,492 | - | ||||||
Dividends paid | (18,288 | ) | (14,115 | ) | ||||
Net cash provided by financing activities | 22,085 | 97,045 | ||||||
Effect of exchange rate changes | 77 | 82 | ||||||
Net increase in cash and cash equivalents | 1,610 | 32,889 | ||||||
Cash and cash equivalents, beginning of the year | 74,816 | 57,081 | ||||||
Cash and cash equivalents, end of period | $ | 76,426 | $ | 89,970 | ||||
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | ||
Reconciliation of GAAP financial measures to non-GAAP financial measures | ||
Three 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 months ended | |
(a) | net income attributable to | |
(b) | net cash provided by operating activities to EBITDA; | |
(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 and caps, net is a noncash item, 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 | ||||||||
March 31, | ||||||||
2012 | 2011 | |||||||
(Dollars in thousands) | ||||||||
(Unaudited) | ||||||||
Reconciliation of EBITDA: | ||||||||
Net income attributable to |
$ | 49,910 | $ | 37,190 | ||||
Adjustments: | ||||||||
Interest income | (28 | ) | (7 | ) | ||||
Interest expense | 14,719 | 7,523 | ||||||
Realized losses on interest rate swaps and caps, net | 2,550 | 2,642 | ||||||
Unrealized gains on interest rate swaps and caps, net | (1,048 | ) | (2,211 | ) | ||||
Income tax expense | 2,323 | 2,614 | ||||||
Net (loss) income attributable to the noncontrolling interest | (447 | ) | 5,623 | |||||
Depreciation expense | 21,580 | 18,866 | ||||||
Amortization expense | 1,306 | 1,758 | ||||||
Impact of reconciling items on net (loss) income attributable to the noncontrolling interest |
(511 | ) | (4,156 | ) | ||||
EBITDA | $ | 90,354 | $ | 69,842 | ||||
Net cash provided by operating activities | $ | 52,907 | $ | 43,940 | ||||
Adjustments: | ||||||||
Bad debt expense, net | (1,718 | ) | (136 | ) | ||||
Amortization of debt issuance costs | (2,418 | ) | (1,750 | ) | ||||
Amortization of acquired net below market leases | 33 | 151 | ||||||
Amortization of deferred revenue | 2,404 | 1,687 | ||||||
Amortization of unearned income on direct financing and sales-type leases | 2,861 | 1,920 | ||||||
Gains on sale of containers, net | 11,289 | 6,394 | ||||||
Share-based compensation expense | (2,510 | ) | (1,842 | ) | ||||
Interest income | (28 | ) | (7 | ) | ||||
Interest expense | 14,719 | 7,523 | ||||||
Realized losses on interest rate swaps and caps, net | 2,550 | 2,642 | ||||||
Income tax expense | 2,323 | 2,614 | ||||||
Changes in operating assets and liabilities | 8,453 | 10,862 | ||||||
Impact of reconciling items on net (loss) income attributable to the noncontrolling interest |
(511 | ) | (4,156 | ) | ||||
EBITDA | $ | 90,354 | $ | 69,842 | ||||
Three Months Ended | ||||||||
March 31, | ||||||||
2012 | 2011 | |||||||
(Dollars in thousands) | ||||||||
(Unaudited) | ||||||||
Reconciliation of Adjusted net income: | ||||||||
Net income attributable to shareholders |
$ | 49,910 | $ | 37,190 | ||||
Adjustments: | ||||||||
Unrealized gains on interest rate swaps and caps, net | (1,048 | ) | (2,211 | ) | ||||
Impact of reconciling item on net (loss) income attributable to noncontrolling interest |
(20 | ) | 469 | |||||
Adjusted net income | $ | 48,842 | $ | 35,448 | ||||
Reconciliation of Adjusted net income per diluted common share: | ||||||||
Net income attributable to |
$ | 0.99 | $ | 0.75 | ||||
Adjustments: | ||||||||
Unrealized gains on interest rate swaps and caps, net | (0.02 | ) | (0.05 | ) | ||||
Impact of reconciling item on net (loss) income attributable to noncontrolling interest |
- | 0.01 | ||||||
Adjusted net income per diluted common share | $ | 0.97 | $ | 0.71 | ||||
Mr.
Investor Relations Director
ir@textainer.com
Source:
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