Key Financial Information (in thousands except for per share and TEU amounts) and Business Highlights:
QTD |
||||||||
Q1 2020 |
Q4 2019 |
|||||||
Lease rental income |
$ |
145,478 |
$ |
151,555 |
||||
Gain on sale of owned fleet containers, net |
$ |
5,794 |
$ |
3,134 |
||||
Income from operations |
$ |
46,409 |
$ |
64,579 |
||||
Net (loss) income attributable to Limited common shareholders |
$ |
(4,379) |
$ |
28,782 |
||||
Net (loss) income attributable to Limited common shareholders per diluted common share |
$ |
(0.08) |
$ |
0.50 |
||||
Adjusted net income (1) |
$ |
9,702 |
$ |
10,977 |
||||
Adjusted net income per diluted common share (1) |
$ |
0.17 |
$ |
0.19 |
||||
Adjusted EBITDA (1) |
$ |
117,065 |
$ |
113,187 |
||||
Average fleet utilization (2) |
96.2 |
% |
96.4 |
% |
||||
Total fleet size at end of period (TEU) (3) |
3,450,680 |
3,500,812 |
||||||
Owned percentage of total fleet at end of period |
85.6 |
% |
85.4 |
% |
(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 units and manufactured for us but have not yet been 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 slightly 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 loss of
$4.4 million for the first quarter, which includes an unrealized loss on derivatives of$14.9 million ; - Adjusted net income of
$9.7 million for the first quarter, or$0.17 per diluted common share, as compared to$11.0 million , or$0.19 per diluted common share in the fourth quarter of 2019; - Adjusted EBITDA of
$117.1 million for the first quarter, as compared to$113.2 million in the fourth quarter of 2019; - Utilization averaged 96.2% for the first quarter, as compared to 96.4% for the fourth quarter of 2019;
- Minimal container investments during the first quarter; and
- Repurchased approximately 1,947,000 shares of common stock at an average price of
$7.84 per share during the first quarter under the share repurchase program authorized onAugust 29, 2019 . As announced onMarch 30, 2020 ,Textainer's Board of Directors authorized an increase to the share repurchase program for an additional$25 million of the Company's outstanding shares.
"Our most important priority is to maintain business continuity while ensuring the health and safety of our employees, and we reacted swiftly and efficiently to transition into working remotely. I am proud of how our team has risen to the challenge with their dedication and professionalism, focused on providing exceptional service to our customers in the face of the significant disruptions caused by the COVID-19 pandemic," stated
Ghesquiere continued, "Our performance in the first quarter was in line with our expectations. Average utilization remained strong at 96.2%, we delivered lease rental income of
Ghesquiere concluded, "The market remains challenged by the extraordinary effects and implications of the broad-based response to the current pandemic, and there is a high level of uncertainty to our outlook for the rest of the year. However,
First-Quarter Results
Lease rental income decreased
Trading container margin decreased
Gain on sale of owned fleet containers, net, increased
Direct container expense increased
Distribution to managed fleet container investors decreased
Bad debt expense was
Interest expense decreased
Unrealized loss on derivative instruments, net, was a loss of
Conference Call and Webcast
A conference call to discuss the financial results for the first quarter 2020 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 |
||||||||||||||||
Condensed Consolidated Statements of Comprehensive (Loss) Income |
||||||||||||||||
Three Months Ended |
||||||||||||||||
(Unaudited) |
||||||||||||||||
(All currency expressed in |
||||||||||||||||
Three Months Ended |
||||||||||||||||
2020 |
2019 |
|||||||||||||||
Revenue: |
||||||||||||||||
Lease rental income - owned fleet |
$ |
130,072 |
$ |
128,973 |
||||||||||||
Lease rental income - managed fleet |
15,406 |
26,553 |
||||||||||||||
Lease rental income |
145,478 |
155,526 |
||||||||||||||
Management fees - non-leasing |
1,484 |
2,301 |
||||||||||||||
Trading container sales proceeds |
9,585 |
13,300 |
||||||||||||||
Cost of trading containers sold |
(8,936) |
(10,732) |
||||||||||||||
Trading container margin |
649 |
2,568 |
||||||||||||||
Gain on sale of owned fleet containers, net |
5,794 |
6,767 |
||||||||||||||
Operating expenses: |
||||||||||||||||
Direct container expense - owned fleet (a) |
13,264 |
11,580 |
||||||||||||||
Distribution expense to managed fleet container investors |
14,163 |
24,480 |
||||||||||||||
Depreciation expense (b) |
66,834 |
62,464 |
||||||||||||||
Amortization expense |
564 |
602 |
||||||||||||||
General and administrative expense |
10,138 |
9,830 |
||||||||||||||
Bad debt expense, net |
2,045 |
159 |
||||||||||||||
Container lessee default recovery, net (a) |
(12) |
(653) |
||||||||||||||
Total operating expenses |
106,996 |
108,462 |
||||||||||||||
Income from operations |
46,409 |
58,700 |
||||||||||||||
Other (expense) income: |
||||||||||||||||
Interest expense |
(36,112) |
(37,516) |
||||||||||||||
Write-off of unamortized deferred debt issuance costs |
(122) |
— |
||||||||||||||
Interest income |
400 |
638 |
||||||||||||||
Realized (loss) gain on derivative instruments, net |
(1,526) |
1,444 |
||||||||||||||
Unrealized loss on derivative instruments, net |
(14,937) |
(5,738) |
||||||||||||||
Other, net |
(53) |
— |
||||||||||||||
Net other expense |
(52,350) |
(41,172) |
||||||||||||||
(Loss) income before income tax and noncontrolling interest |
(5,941) |
17,528 |
||||||||||||||
Income tax benefit (expense) |
833 |
(373) |
||||||||||||||
Net (loss) income |
(5,108) |
17,155 |
||||||||||||||
Less: Net loss (income) attributable to the noncontrolling interest |
729 |
(105) |
||||||||||||||
Net (loss) income attributable to |
$ |
(4,379) |
$ |
17,050 |
||||||||||||
Net (loss) income attributable to Limited common shareholders per share: |
||||||||||||||||
Basic |
$ |
(0.08) |
$ |
0.30 |
||||||||||||
Diluted |
$ |
(0.08) |
$ |
0.30 |
||||||||||||
Weighted average shares outstanding (in thousands): |
||||||||||||||||
Basic |
56,455 |
57,475 |
||||||||||||||
Diluted |
56,455 |
57,587 |
||||||||||||||
Other comprehensive (loss) income, before tax: |
||||||||||||||||
Change in derivative instruments designated as cash flow hedges |
(8,858) |
— |
||||||||||||||
Reclassification of realized gain on derivative instruments designated as cash flow hedges |
(62) |
— |
||||||||||||||
Foreign currency translation adjustments |
(63) |
107 |
||||||||||||||
Comprehensive (loss) income, before tax |
(14,091) |
17,262 |
||||||||||||||
Income tax benefit related to items of other comprehensive (loss) income |
93 |
— |
||||||||||||||
Comprehensive (loss) income, after tax |
(13,998) |
17,262 |
||||||||||||||
Comprehensive loss (income) attributable to the noncontrolling interest |
729 |
(105) |
||||||||||||||
Comprehensive (loss) income attributable to |
$ |
(13,269) |
$ |
17,157 |
(a) Amounts for container write-off and recovery and container recovery costs from lessee default for the period ended |
|
(b) Amount to write-down the carrying value of containers held for sale to their estimated fair value less costs to sell for the period ended |
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
|
||||||||
(Unaudited) |
||||||||
(All currency expressed in |
||||||||
2020 |
2019 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
128,664 |
$ |
180,552 |
||||
Accounts receivable, net of allowance for doubtful accounts of |
118,905 |
109,384 |
||||||
Net investment in finance leases, net of allowance for credit losses of |
40,164 |
40,940 |
||||||
Container leaseback financing receivable, net of allowance for credit losses of |
20,661 |
20,547 |
||||||
Trading containers |
12,894 |
11,330 |
||||||
Containers held for sale |
46,902 |
41,884 |
||||||
Prepaid expenses and other current assets |
14,367 |
14,816 |
||||||
Due from affiliates, net |
2,112 |
1,880 |
||||||
Total current assets |
384,669 |
421,333 |
||||||
Restricted cash |
97,334 |
97,353 |
||||||
Containers, net of accumulated depreciation of |
4,007,433 |
4,156,151 |
||||||
Net investment in finance leases, net of allowance for credit losses of |
297,549 |
254,363 |
||||||
Container leaseback financing receivable, net of allowance for credit losses of |
245,507 |
251,111 |
||||||
Fixed assets, net of accumulated depreciation of |
1,108 |
1,128 |
||||||
Intangible assets, net of accumulated amortization of |
4,727 |
5,291 |
||||||
Derivative instruments |
- |
135 |
||||||
Deferred taxes |
1,388 |
1,388 |
||||||
Other assets |
14,091 |
14,364 |
||||||
Total assets |
$ |
5,053,806 |
$ |
5,202,617 |
||||
Liabilities and Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued expenses |
$ |
21,499 |
$ |
23,404 |
||||
Container contracts payable |
5,294 |
9,394 |
||||||
Other liabilities |
2,733 |
2,636 |
||||||
Due to container investors, net |
19,151 |
21,978 |
||||||
Debt, net of unamortized deferred financing costs of |
239,066 |
242,433 |
||||||
Total current liabilities |
287,743 |
299,845 |
||||||
Debt, net of unamortized deferred financing costs of |
3,426,079 |
3,555,296 |
||||||
Derivative instruments |
37,500 |
13,778 |
||||||
Income tax payable |
9,945 |
9,909 |
||||||
Deferred taxes |
6,644 |
7,789 |
||||||
Other liabilities |
29,546 |
30,355 |
||||||
Total liabilities |
3,797,457 |
3,916,972 |
||||||
Equity: |
||||||||
|
||||||||
Common shares, |
583 |
583 |
||||||
|
(33,223) |
(17,746) |
||||||
Additional paid-in capital |
411,666 |
410,595 |
||||||
Accumulated other comprehensive loss |
(9,401) |
(511) |
||||||
Retained earnings |
861,194 |
866,458 |
||||||
|
1,230,819 |
1,259,379 |
||||||
Noncontrolling interest |
25,530 |
26,266 |
||||||
Total equity |
1,256,349 |
1,285,645 |
||||||
Total liabilities and equity |
$ |
5,053,806 |
$ |
5,202,617 |
||||
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES |
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
Three Months Ended |
||||||||
(Unaudited) |
||||||||
(All currency expressed in |
||||||||
2020 |
2019 |
|||||||
Cash flows from operating activities: |
||||||||
Net (loss) income |
$ |
(5,108) |
$ |
17,155 |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation expense (a) |
66,834 |
62,464 |
||||||
Bad debt expense, net |
2,045 |
159 |
||||||
Container recovery from lessee default, net (b) |
(1) |
(720) |
||||||
Unrealized loss on derivative instruments, net |
14,937 |
5,738 |
||||||
Amortization and write-off of unamortized deferred debt issuance costs and accretion of bond discounts |
2,183 |
1,870 |
||||||
Amortization of intangible assets |
564 |
602 |
||||||
Gain on sale of owned fleet containers, net |
(5,794) |
(6,767) |
||||||
Share-based compensation expense |
1,071 |
1,056 |
||||||
Changes in operating assets and liabilities |
(3,009) |
25,552 |
||||||
Total adjustments |
78,830 |
89,954 |
||||||
Net cash provided by operating activities |
73,722 |
107,109 |
||||||
Cash flows from investing activities: |
||||||||
Purchase of containers and fixed assets |
(11,249) |
(119,335) |
||||||
Receipt of principal payments on container leaseback financing receivable |
5,099 |
— |
||||||
Proceeds from sale of containers and fixed assets |
30,939 |
32,885 |
||||||
Net cash provided by (used in) investing activities |
24,789 |
(86,450) |
||||||
Cash flows from financing activities: |
||||||||
Proceeds from debt |
— |
60,000 |
||||||
Principal payments on debt |
(134,697) |
(86,171) |
||||||
Principal repayments on container leaseback financing liability, net |
(124) |
— |
||||||
Purchase of treasury shares |
(15,477) |
— |
||||||
Debt issuance costs |
(57) |
— |
||||||
Net cash used in financing activities |
(150,355) |
(26,171) |
||||||
Effect of exchange rate changes |
(63) |
107 |
||||||
Net decrease in cash, cash equivalents and restricted cash |
(51,907) |
(5,405) |
||||||
Cash, cash equivalents and restricted cash, beginning of the year |
277,905 |
224,928 |
||||||
Cash, cash equivalents and restricted cash, end of the period |
$ |
225,998 |
$ |
219,523 |
(a) Amount to write-down the carrying value of containers held for sale to their estimated fair value less costs to sell for the period ended |
|
(b) Amount for container write-off and recovery from lessee default for the period ended |
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 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 in isolation, or as a substitute to net (loss) 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, |
||||||||||||
|
|
|
||||||||||
(Dollars in thousands) |
||||||||||||
(Unaudited) |
||||||||||||
Reconciliation of adjusted net income: |
||||||||||||
Net (loss) income attributable to |
$ |
(4,379) |
$ |
28,782 |
$ |
17,050 |
||||||
Adjustments: |
||||||||||||
Write-off of unamortized deferred debt issuance costs |
122 |
— |
— |
|||||||||
Unrealized loss (gain) on derivative instruments, net |
14,937 |
(2,873) |
5,738 |
|||||||||
Gain on insurance recovery and legal settlement |
— |
(14,040) |
— |
|||||||||
Gain on settlement of pre-existing management agreement |
— |
(1,823) |
— |
|||||||||
Impact of reconciling items on income tax (benefit) expense |
(150) |
551 |
(57) |
|||||||||
Impact of reconciling items attributable to the noncontrolling interest |
(828) |
380 |
(289) |
|||||||||
Adjusted net income |
$ |
9,702 |
$ |
10,977 |
$ |
22,442 |
||||||
Adjusted net income per diluted common share |
$ |
0.17 |
$ |
0.19 |
$ |
0.39 |
||||||
Three Months Ended, |
||||||||||||
|
|
|
||||||||||
(Dollars in thousands) |
||||||||||||
(Unaudited) |
||||||||||||
Reconciliation of adjusted EBITDA: |
||||||||||||
Net (loss) income attributable to |
$ |
(4,379) |
$ |
28,782 |
$ |
17,050 |
||||||
Adjustments: |
||||||||||||
Interest income |
(400) |
(458) |
(638) |
|||||||||
Interest expense |
36,112 |
37,486 |
37,516 |
|||||||||
Write-off of unamortized deferred debt issuance costs |
122 |
— |
— |
|||||||||
Realized loss (gain) on derivative instruments, net |
1,526 |
763 |
(1,444) |
|||||||||
Unrealized loss (gain) on derivative instruments, net |
14,937 |
(2,873) |
5,738 |
|||||||||
Gain on insurance recovery and legal settlement |
— |
(14,040) |
— |
|||||||||
Gain on settlement of pre-existing management agreement |
— |
(1,823) |
— |
|||||||||
Income tax (benefit) expense |
(833) |
478 |
373 |
|||||||||
Net (loss) income attributable to the noncontrolling interest |
(729) |
407 |
105 |
|||||||||
Depreciation expense |
66,834 |
66,129 |
62,464 |
|||||||||
Container (recovery) expense from lessee default, net |
(1) |
25 |
(720) |
|||||||||
Amortization expense |
564 |
517 |
602 |
|||||||||
Impact of reconciling items attributable to the noncontrolling interest |
3,312 |
(2,206) |
(2,917) |
|||||||||
Adjusted EBITDA |
$ |
117,065 |
$ |
113,187 |
$ |
118,129 |
||||||
Three Months Ended |
||||||||||||
|
|
|
||||||||||
(Dollars in thousands) |
||||||||||||
(Unaudited) |
||||||||||||
Reconciliation of headline earnings: |
||||||||||||
Net (loss) income attributable to |
$ |
(4,379) |
$ |
28,782 |
$ |
17,050 |
||||||
Adjustments: |
||||||||||||
Container impairment |
4,586 |
4,348 |
800 |
|||||||||
Gain on insurance recovery and legal settlement |
— |
(14,040) |
— |
|||||||||
Gain on settlement of pre-existing management agreement |
— |
(1,823) |
— |
|||||||||
Impact of reconciling items on income tax (benefit) expense |
(46) |
477 |
(8) |
|||||||||
Impact of reconciling items attributable to the noncontrolling interest |
(115) |
100 |
(32) |
|||||||||
Headline earnings |
$ |
46 |
$ |
17,844 |
$ |
17,810 |
||||||
Headline earnings per basic common share |
$ |
- |
$ |
0.31 |
$ |
0.31 |
||||||
Headline earnings per diluted common share |
$ |
- |
$ |
0.31 |
$ |
0.31 |
View original content:http://www.prnewswire.com/news-releases/textainer-group-holdings-limited-reports-first-quarter-2020-results-301052215.html
SOURCE