Key Financial Information (in thousands except for per share and TEU amounts) and Business Highlights:
QTD |
||||||||||||
Q2 2020 |
Q1 2020 |
Q2 2019 |
||||||||||
Lease rental income |
$ |
144,774 |
$ |
145,478 |
$ |
156,243 |
||||||
Gain on sale of owned fleet containers, net |
$ |
5,640 |
$ |
5,794 |
$ |
5,404 |
||||||
Income from operations |
$ |
49,265 |
$ |
46,409 |
$ |
45,918 |
||||||
Net income (loss) attributable to Limited common shareholders |
$ |
15,989 |
$ |
(4,379) |
$ |
314 |
||||||
Net income (loss) attributable to Limited common shareholders per diluted common share |
$ |
0.30 |
$ |
(0.08) |
$ |
0.01 |
||||||
Adjusted net income (1) |
$ |
14,794 |
$ |
9,702 |
$ |
9,006 |
||||||
Adjusted net income per diluted common share (1) |
$ |
0.28 |
$ |
0.17 |
$ |
0.16 |
||||||
Adjusted EBITDA (1) (4) |
$ |
109,977 |
$ |
110,439 |
$ |
114,745 |
||||||
Average fleet utilization (2) |
95.4 |
% |
96.2 |
% |
97.9 |
% |
||||||
Total fleet size at end of period (TEU) (3) |
3,458,080 |
3,450,680 |
3,601,681 |
|||||||||
Owned percentage of total fleet at end of period |
86.1 |
% |
85.6 |
% |
80.9 |
% |
(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. |
(4) |
Adjusted EBITDA for the first quarter 2020 has been restated to reflect an immaterial adjustment (see Reconciliation of Adjusted EBITDA). |
- Net income of
$16.0 million for the second quarter or$0.30 per diluted common share; - Adjusted net income of
$14.8 million for the second quarter, or$0.28 per diluted common share, as compared to$9.7 million , or$0.17 per diluted common share in the first quarter of 2020; - Adjusted EBITDA of
$110.0 million for the second quarter, as compared to$110.4 million in the first quarter of 2020; - Utilization averaged 95.4% for the second quarter, as compared to 96.2% for the first quarter of 2020;
- Container investments of approximately
$190 million delivered through the first six months of the year; and - Repurchased 1,633,794 shares of common stock at an average price of
$8.33 per share during the second quarter under the share repurchase program.
"We are pleased with our performance in the second quarter, which proved resilient in spite of the global economic downturn. For the quarter, we delivered stable lease rental income of
Ghesquiere continued, "Though the second quarter saw a worsening in global trade, our container fleet of mostly long-term leases continued to perform strongly, with only a slight decrease in utilization. We were very pleased with the general improvement in our cash collections and have experienced no notable credit issues. The elevated credit risk of our customers, which had been a point of attention due to the COVID crisis, has mostly subsided, driven by their better than expected financial performance, access to government support, and a significant decrease in fuel cost."
Ghesquiere added, "As we begin the third quarter, we have seen a significant uptake in demand for containers. This change in market dynamics is driven by the cyclical increase in trade over the summer season in
"The pandemic continues to create uncertainty and market challenges, but we remain cautiously optimistic with our outlook for the balance of the year.
Second-Quarter Results
Lease rental income decreased
Direct container expense increased
Depreciation expense decreased
Container lessee default recovery was
Bad debt recovery was
Interest expense decreased
Unrealized gain (loss) on derivative instruments, net, was a gain of
Conference Call and Webcast
A conference call to discuss the financial results for the second 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 Income (Loss) Three and Six Months Ended (Unaudited) (All currency expressed in |
||||||||||||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||||||||||||||||||
Revenue: |
||||||||||||||||||||||||||||||||
Lease rental income - owned fleet |
$ |
128,648 |
$ |
130,439 |
$ |
258,720 |
$ |
260,000 |
||||||||||||||||||||||||
Lease rental income - managed fleet |
16,126 |
25,804 |
31,532 |
52,357 |
||||||||||||||||||||||||||||
Lease rental income |
144,774 |
156,243 |
290,252 |
312,357 |
||||||||||||||||||||||||||||
Management fees - non-leasing |
544 |
1,940 |
2,028 |
4,241 |
||||||||||||||||||||||||||||
Trading container sales proceeds |
7,427 |
14,394 |
17,012 |
27,106 |
||||||||||||||||||||||||||||
Cost of trading containers sold |
(6,856) |
(12,170) |
(15,792) |
(22,902) |
||||||||||||||||||||||||||||
Trading container margin |
571 |
2,224 |
1,220 |
4,204 |
||||||||||||||||||||||||||||
Gain on sale of owned fleet containers, net |
5,640 |
5,404 |
11,434 |
12,171 |
||||||||||||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||||||||||
Direct container expense - owned fleet (a) |
15,248 |
10,681 |
28,512 |
22,261 |
||||||||||||||||||||||||||||
Distribution expense to managed fleet container investors |
14,692 |
23,737 |
28,855 |
48,217 |
||||||||||||||||||||||||||||
Depreciation expense (b) |
63,848 |
64,135 |
130,682 |
126,599 |
||||||||||||||||||||||||||||
Amortization expense |
557 |
493 |
1,121 |
1,095 |
||||||||||||||||||||||||||||
General and administrative expense |
9,866 |
9,444 |
20,004 |
19,274 |
||||||||||||||||||||||||||||
Bad debt (recovery) expense, net |
(276) |
3,689 |
1,769 |
3,848 |
||||||||||||||||||||||||||||
Container lessee default (recovery) expense, net (a) (b) |
(1,671) |
8,555 |
(1,683) |
7,902 |
||||||||||||||||||||||||||||
Gain on insurance recovery and legal settlement |
— |
(841) |
— |
(841) |
||||||||||||||||||||||||||||
Total operating expenses |
102,264 |
119,893 |
209,260 |
228,355 |
||||||||||||||||||||||||||||
Income from operations |
49,265 |
45,918 |
95,674 |
104,618 |
||||||||||||||||||||||||||||
Other (expense) income: |
||||||||||||||||||||||||||||||||
Interest expense |
(30,022) |
(38,213) |
(66,134) |
(75,729) |
||||||||||||||||||||||||||||
Write-off of unamortized deferred debt issuance costs |
— |
— |
(122) |
— |
||||||||||||||||||||||||||||
Interest income |
56 |
729 |
456 |
1,367 |
||||||||||||||||||||||||||||
Realized (loss) gain on derivative instruments, net |
(3,267) |
1,095 |
(4,793) |
2,539 |
||||||||||||||||||||||||||||
Unrealized gain (loss) on derivative instruments, net |
1,342 |
(10,099) |
(13,595) |
(15,837) |
||||||||||||||||||||||||||||
Other, net |
(3) |
— |
(56) |
— |
||||||||||||||||||||||||||||
Net other expense |
(31,894) |
(46,488) |
(84,244) |
(87,660) |
||||||||||||||||||||||||||||
Income (loss) before income tax and |
17,371 |
(570) |
11,430 |
16,958 |
||||||||||||||||||||||||||||
Income tax (expense) benefit |
(1,074) |
221 |
(241) |
(152) |
||||||||||||||||||||||||||||
Net income (loss) |
16,297 |
(349) |
11,189 |
16,806 |
||||||||||||||||||||||||||||
Less: Net (income) loss attributable to the noncontrolling interest |
(308) |
663 |
421 |
558 |
||||||||||||||||||||||||||||
Net income attributable to Textainer Group |
$ |
15,989 |
$ |
314 |
$ |
11,610 |
$ |
17,364 |
||||||||||||||||||||||||
Net income attributable to Limited common shareholders per share: |
||||||||||||||||||||||||||||||||
Basic |
$ |
0.30 |
$ |
0.01 |
$ |
0.21 |
$ |
0.30 |
||||||||||||||||||||||||
Diluted |
$ |
0.30 |
$ |
0.01 |
$ |
0.21 |
$ |
0.30 |
||||||||||||||||||||||||
Weighted average shares outstanding (in thousands): |
||||||||||||||||||||||||||||||||
Basic |
53,715 |
57,500 |
55,084 |
57,488 |
||||||||||||||||||||||||||||
Diluted |
53,776 |
57,576 |
55,148 |
57,578 |
||||||||||||||||||||||||||||
Other comprehensive income (loss), before tax: |
||||||||||||||||||||||||||||||||
Change in derivative instruments designated as cash flow hedges |
(4,393) |
— |
(13,251) |
— |
||||||||||||||||||||||||||||
Reclassification of realized loss on derivative instruments designated |
590 |
— |
528 |
— |
||||||||||||||||||||||||||||
Foreign currency translation adjustments |
(39) |
(40) |
(102) |
67 |
||||||||||||||||||||||||||||
Comprehensive income (loss), before tax |
12,455 |
(389) |
(1,636) |
16,873 |
||||||||||||||||||||||||||||
Income tax benefit related to items of other comprehensive income (loss) |
39 |
— |
132 |
— |
||||||||||||||||||||||||||||
Comprehensive income (loss), after tax |
12,494 |
(389) |
(1,504) |
16,873 |
||||||||||||||||||||||||||||
Comprehensive (income) loss attributable to the |
(308) |
663 |
421 |
558 |
||||||||||||||||||||||||||||
Comprehensive income (loss) attributable to Textainer |
$ |
12,186 |
$ |
274 |
$ |
(1,083) |
$ |
17,431 |
(a) Amounts for container write-off and recovery and container recovery costs from lessee default for the periods ended |
(b) Amounts to write-down the carrying value of containers held for sale to their estimated fair value less costs to sell for the periods 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 |
$ |
189,848 |
$ |
180,552 |
||||
Accounts receivable, net of allowance for doubtful accounts of |
106,761 |
109,384 |
||||||
Net investment in finance leases, net of allowance for credit losses of |
38,112 |
40,940 |
||||||
Container leaseback financing receivable, net of allowance for credit losses of |
21,412 |
20,547 |
||||||
Trading containers |
9,140 |
11,330 |
||||||
Containers held for sale |
50,422 |
41,884 |
||||||
Prepaid expenses and other current assets |
12,068 |
14,816 |
||||||
Due from affiliates, net |
2,270 |
1,880 |
||||||
Total current assets |
430,033 |
421,333 |
||||||
Restricted cash |
91,129 |
97,353 |
||||||
Containers, net of accumulated depreciation of |
4,054,337 |
4,156,151 |
||||||
Net investment in finance leases, net of allowance for credit losses of |
318,398 |
254,363 |
||||||
Container leaseback financing receivable, net of allowance for credit losses of |
249,384 |
251,111 |
||||||
Fixed assets, net of accumulated depreciation of |
943 |
1,128 |
||||||
Intangible assets, net of accumulated amortization of |
4,170 |
5,291 |
||||||
Derivative instruments |
- |
135 |
||||||
Deferred taxes |
1,383 |
1,388 |
||||||
Other assets |
13,435 |
14,364 |
||||||
Total assets |
$ |
5,163,212 |
$ |
5,202,617 |
||||
Liabilities and Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued expenses |
$ |
25,466 |
$ |
23,404 |
||||
Container contracts payable |
136,937 |
9,394 |
||||||
Other liabilities |
2,325 |
2,636 |
||||||
Due to container investors, net |
19,458 |
21,978 |
||||||
Debt, net of unamortized deferred financing costs of |
241,519 |
242,433 |
||||||
Total current liabilities |
425,705 |
299,845 |
||||||
Debt, net of unamortized deferred financing costs of |
3,406,474 |
3,555,296 |
||||||
Derivative instruments |
39,961 |
13,778 |
||||||
Income tax payable |
9,976 |
9,909 |
||||||
Deferred taxes |
7,683 |
7,789 |
||||||
Other liabilities |
17,101 |
30,355 |
||||||
Total liabilities |
3,906,900 |
3,916,972 |
||||||
Equity: |
||||||||
|
||||||||
Common shares, |
584 |
583 |
||||||
|
(46,828) |
(17,746) |
||||||
Additional paid-in capital |
412,739 |
410,595 |
||||||
Accumulated other comprehensive loss |
(13,204) |
(511) |
||||||
Retained earnings |
877,183 |
866,458 |
||||||
|
1,230,474 |
1,259,379 |
||||||
Noncontrolling interest |
25,838 |
26,266 |
||||||
Total equity |
1,256,312 |
1,285,645 |
||||||
Total liabilities and equity |
$ |
5,163,212 |
$ |
5,202,617 |
||||
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows Six Months Ended (Unaudited) (All currency expressed in |
||||||||
2020 |
2019 |
|||||||
Cash flows from operating activities: |
||||||||
Net income |
$ |
11,189 |
$ |
16,806 |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation expense |
130,682 |
126,599 |
||||||
Bad debt expense, net |
1,769 |
3,848 |
||||||
Container (recovery) write-off from lessee default, net |
(1,558) |
7,730 |
||||||
Unrealized loss on derivative instruments, net |
13,595 |
15,837 |
||||||
Amortization and write-off of unamortized deferred debt issuance costs and |
4,210 |
3,875 |
||||||
Amortization of intangible assets |
1,121 |
1,095 |
||||||
Gain on sale of owned fleet containers, net |
(11,434) |
(12,171) |
||||||
Gain on insurance recovery and legal settlement |
— |
(841) |
||||||
Share-based compensation expense |
2,145 |
2,115 |
||||||
Changes in operating assets and liabilities |
36,501 |
47,130 |
||||||
Total adjustments |
177,031 |
195,217 |
||||||
Net cash provided by operating activities |
188,220 |
212,023 |
||||||
Cash flows from investing activities: |
||||||||
Purchase of containers and fixed assets |
(52,660) |
(335,067) |
||||||
Payment on leaseback financing receivable |
(9,919) |
— |
||||||
Receipt of principal payments on container leaseback financing receivable |
10,310 |
— |
||||||
Proceeds from sale of containers and fixed assets |
62,920 |
70,591 |
||||||
Net cash provided by (used in) investing activities |
10,651 |
(264,476) |
||||||
Cash flows from financing activities: |
||||||||
Proceeds from debt |
41,800 |
550,634 |
||||||
Principal payments on debt |
(195,676) |
(472,667) |
||||||
Principal repayments on container leaseback financing liability, net |
(12,682) |
— |
||||||
Purchase of treasury shares |
(29,082) |
— |
||||||
Debt issuance costs |
(57) |
(3,854) |
||||||
Dividends paid to noncontrolling interest |
— |
(2,744) |
||||||
Issuance of common shares upon exercise of share options |
— |
93 |
||||||
Net cash (used in) provided by financing activities |
(195,697) |
71,462 |
||||||
Effect of exchange rate changes |
(102) |
67 |
||||||
Net increase in cash, cash equivalents and restricted cash |
3,072 |
19,076 |
||||||
Cash, cash equivalents and restricted cash, beginning of the year |
277,905 |
224,928 |
||||||
Cash, cash equivalents and restricted cash, end of the period |
$ |
280,977 |
$ |
244,004 |
(a) Amounts 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) Amounts 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 and six 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 income (loss), 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, |
Six Months Ended |
|||||||||||||||||||
|
|
|
|
|
||||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||||||
Reconciliation of adjusted net income: |
||||||||||||||||||||
Net income (loss) attributable to Limited common shareholders |
$ |
15,989 |
$ |
(4,379) |
$ |
314 |
$ |
11,610 |
$ |
17,364 |
||||||||||
Adjustments: |
||||||||||||||||||||
Write-off of unamortized deferred debt issuance costs |
— |
122 |
— |
122 |
— |
|||||||||||||||
Unrealized (gain) loss on derivative instruments, net |
(1,342) |
14,937 |
10,099 |
13,595 |
15,837 |
|||||||||||||||
Gain on insurance recovery and legal settlement |
— |
— |
(841) |
— |
(841) |
|||||||||||||||
Impact of reconciling items on income tax expense (benefit) |
13 |
(150) |
(89) |
(137) |
(146) |
|||||||||||||||
Impact of reconciling items attributable to the noncontrolling interest |
134 |
(828) |
(477) |
(694) |
(765) |
|||||||||||||||
Adjusted net income |
$ |
14,794 |
$ |
9,702 |
$ |
9,006 |
$ |
24,496 |
$ |
31,449 |
||||||||||
Adjusted net income per diluted common share |
$ |
0.28 |
$ |
0.17 |
$ |
0.16 |
$ |
0.44 |
$ |
0.55 |
||||||||||
Three Months Ended, |
Six Months Ended |
|||||||||||||||||||
|
|
|
|
|
||||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||||||
Reconciliation of adjusted EBITDA: |
||||||||||||||||||||
Net income (loss) attributable to Limited common shareholders |
$ |
15,989 |
$ |
(4,379) |
$ |
314 |
$ |
11,610 |
$ |
17,364 |
||||||||||
Adjustments: |
||||||||||||||||||||
Interest income |
(56) |
(400) |
(729) |
(456) |
(1,367) |
|||||||||||||||
Interest expense |
30,022 |
36,112 |
38,213 |
66,134 |
75,729 |
|||||||||||||||
Write-off of unamortized deferred debt issuance costs |
— |
122 |
— |
122 |
— |
|||||||||||||||
Realized loss (gain) on derivative instruments, net |
3,267 |
1,526 |
(1,095) |
4,793 |
(2,539) |
|||||||||||||||
Unrealized (gain) loss on derivative instruments, net |
(1,342) |
14,937 |
10,099 |
13,595 |
15,837 |
|||||||||||||||
Gain on insurance recovery and legal settlement |
— |
— |
(841) |
— |
(841) |
|||||||||||||||
Income tax expense (benefit) |
1,074 |
(833) |
(221) |
241 |
152 |
|||||||||||||||
Net income (loss) attributable to the noncontrolling interest |
308 |
(729) |
(663) |
(421) |
(558) |
|||||||||||||||
Depreciation expense |
63,848 |
66,834 |
64,135 |
130,682 |
126,599 |
|||||||||||||||
Container (recovery) write-off from lessee default, net |
(1,557) |
(1) |
8,450 |
(1,558) |
7,730 |
|||||||||||||||
Amortization expense |
557 |
564 |
493 |
1,121 |
1,095 |
|||||||||||||||
Impact of reconciling items attributable to the noncontrolling interest (a) |
(2,133) |
(3,314) |
(3,410) |
(5,447) |
(6,327) |
|||||||||||||||
Adjusted EBITDA (a) |
$ |
109,977 |
$ |
110,439 |
$ |
114,745 |
$ |
220,416 |
$ |
232,874 |
||||||||||
(a) Adjusted EBITDA for the three months ended |
||||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||||
|
|
|
|
|
||||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||||||
Reconciliation of headline earnings: |
||||||||||||||||||||
Net income (loss) attributable to Limited common shareholders |
$ |
15,989 |
$ |
(4,379) |
$ |
314 |
$ |
11,610 |
$ |
17,364 |
||||||||||
Adjustments: |
||||||||||||||||||||
Container impairment |
1,197 |
4,586 |
10,918 |
5,783 |
11,718 |
|||||||||||||||
Gain on insurance recovery and legal settlement |
— |
— |
(841) |
— |
(841) |
|||||||||||||||
Impact of reconciling items on income tax benefit |
(12) |
(46) |
(98) |
(58) |
(106) |
|||||||||||||||
Impact of reconciling items attributable to the noncontrolling interest |
(43) |
(115) |
(293) |
(158) |
(325) |
|||||||||||||||
Headline earnings |
$ |
17,131 |
$ |
46 |
$ |
10,000 |
$ |
17,177 |
$ |
27,810 |
||||||||||
Headline earnings per basic common share |
$ |
0.32 |
$ |
- |
$ |
0.17 |
$ |
0.31 |
$ |
0.48 |
||||||||||
Headline earnings per diluted common share |
$ |
0.32 |
$ |
- |
$ |
0.17 |
$ |
0.31 |
$ |
0.48 |
View original content:http://www.prnewswire.com/news-releases/textainer-group-holdings-limited-reports-second-quarter-2020-results-301112150.html
SOURCE