Key Financial Information (in thousands except for per share and TEU amounts) and Business Highlights:
QTD |
||||||||||||||
Q3 2020 |
Q2 2020 |
Q3 2019 |
||||||||||||
Lease rental income |
$ |
149,130 |
$ |
144,774 |
$ |
155,848 |
||||||||
Gain on sale of owned fleet containers, net |
$ |
7,976 |
$ |
5,640 |
$ |
6,092 |
||||||||
Income from operations |
$ |
54,109 |
$ |
49,265 |
$ |
53,487 |
||||||||
Net income attributable to Limited common shareholders |
$ |
16,952 |
$ |
15,989 |
$ |
10,578 |
||||||||
Net income attributable to Limited common shareholders per diluted common share |
$ |
0.32 |
$ |
0.30 |
$ |
0.18 |
||||||||
Adjusted net income (1) |
$ |
21,634 |
$ |
14,794 |
$ |
12,950 |
||||||||
Adjusted net income per diluted common share (1) |
$ |
0.41 |
$ |
0.28 |
$ |
0.22 |
||||||||
Adjusted EBITDA (1) |
$ |
118,960 |
$ |
109,977 |
$ |
118,254 |
||||||||
Average fleet utilization (2) |
96.0 |
% |
95.4 |
% |
97.3 |
% |
||||||||
Total fleet size at end of period (TEU) (3) |
3,599,889 |
3,458,080 |
3,557,466 |
|||||||||||
Owned percentage of total fleet at end of period |
87.1 |
% |
86.1 |
% |
80.7 |
% |
||||||||
(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 income of
$17.0 million for the third quarter or$0.32 per diluted common share, as compared to$16.0 million or$0.30 per diluted common share in the second quarter of 2020; - Adjusted net income of
$21.6 million for the third quarter, or$0.41 per diluted common share, as compared to$14.8 million , or$0.28 per diluted common share in the second quarter of 2020; - Adjusted EBITDA of
$119.0 million for the third quarter, as compared to$110.0 million in the second quarter of 2020; - Utilization averaged 96.0% for the third quarter and is currently at 97.7%;
- Container deliveries of approximately
$420 million during the third quarter, for a total$610 million delivered through the first nine months of the year, virtually all of which are currently on lease; - Issued
$450 million and$829 million of fixed-rate asset backed notes onAugust 20, 2020 andSeptember 21, 2020 , respectively, for a combined total of nearly$1.3 billion . Proceeds were used to pay down certain fixed-rate asset backed notes and variable-rate facilities, lowering our effective interest rate to 3.10% and creating additional borrowing capacity for future container investments; and - Repurchased 2,376,222 shares of common stock at an average price of
$11.61 per share during the third quarter under the share repurchase program. As announced onSeptember 14, 2020 ,Textainer's Board of Directors authorized an increase to the share repurchase program for an additional$50 million of the Company's outstanding shares. As of the end of the third quarter, the remaining authority under the share repurchase program totaled$34.9 million .
"We are very pleased with our much-improved performance and outlook which demonstrates the effectiveness and disciplined execution of our long-term strategic turnaround plan. For the quarter, we delivered lease rental income of
Ghesquiere continued, "Industry fundamentals have improved dramatically since June, allowing us to seize upon substantial business opportunities that will continue to generate long-term additional revenue and continue to improve our profitability over the coming quarters. During the quarter, we leased out over 390,000 TEU of factory and depot containers, helping improve our utilization which currently stands at 97.7%. Container prices and lease terms steadily improved in the third quarter and remain at attractive levels today.
"In addition, we have taken a number of actions this year to strengthen our business, financial resources and long-term outlook. In particular, since the beginning of the year, we lowered our borrowing costs with the successful issuance of nearly
"We expect steady earnings momentum to continue in the fourth quarter, driven by growth and operating efficiencies. While we are optimistic about our outlook in 2021, significant uncertainties remain due to the unpredictable impact of a resurgence of COVID-19. We continue to be committed to delivering long term value to our shareholders while maintaining a strong financial position to support the future growth of our business," concluded Ghesquiere.
Third-Quarter Results
Lease rental income increased
Gains on sale of owned fleet containers, net increased
Direct container expense – owned fleet increased
Depreciation expense increased
General and administrative expense increased
Bad debt recovery was
Write off of unamortized deferred debt issuance costs and bond discounts amounted to
Conference Call and Webcast
A conference call to discuss the financial results for the third 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 |
||||||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||||||
(All currency expressed in |
||||||||||||||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||
Lease rental income - owned fleet |
$ |
133,587 |
$ |
130,555 |
$ |
392,307 |
$ |
390,555 |
||||||||||||||||||||||||
Lease rental income - managed fleet |
15,543 |
25,293 |
47,075 |
77,650 |
||||||||||||||||||||||||||||
Lease rental income |
149,130 |
155,848 |
439,382 |
468,205 |
||||||||||||||||||||||||||||
Management fees - non-leasing |
1,696 |
1,582 |
3,724 |
5,823 |
||||||||||||||||||||||||||||
Trading container sales proceeds |
7,655 |
10,669 |
24,667 |
37,775 |
||||||||||||||||||||||||||||
Cost of trading containers sold |
(6,721) |
(9,469) |
(22,513) |
(32,371) |
||||||||||||||||||||||||||||
Trading container margin |
934 |
1,200 |
2,154 |
5,404 |
||||||||||||||||||||||||||||
Gain on sale of owned fleet containers, net |
7,976 |
6,092 |
19,410 |
18,263 |
||||||||||||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||||||||||
Direct container expense - owned fleet |
16,395 |
11,810 |
44,907 |
34,071 |
||||||||||||||||||||||||||||
Distribution expense to managed fleet container investors |
14,364 |
23,318 |
43,219 |
71,535 |
||||||||||||||||||||||||||||
Depreciation expense |
65,374 |
67,644 |
196,056 |
194,243 |
||||||||||||||||||||||||||||
Amortization expense |
645 |
481 |
1,766 |
1,576 |
||||||||||||||||||||||||||||
General and administrative expense |
10,868 |
9,364 |
30,872 |
28,638 |
||||||||||||||||||||||||||||
Bad debt (recovery) expense, net |
(2,095) |
(1,198) |
(326) |
2,650 |
||||||||||||||||||||||||||||
Container lessee default expense (recovery), net |
76 |
(184) |
(1,607) |
7,718 |
||||||||||||||||||||||||||||
Gain on insurance recovery and legal settlement |
— |
— |
— |
(841) |
||||||||||||||||||||||||||||
Total operating expenses |
105,627 |
111,235 |
314,887 |
339,590 |
||||||||||||||||||||||||||||
Income from operations |
54,109 |
53,487 |
149,783 |
158,105 |
||||||||||||||||||||||||||||
Other (expense) income: |
||||||||||||||||||||||||||||||||
Interest expense |
(29,123) |
(39,970) |
(95,257) |
(115,699) |
||||||||||||||||||||||||||||
Write-off of unamortized deferred debt issuance costs and bond discounts |
(8,628) |
— |
(8,750) |
— |
||||||||||||||||||||||||||||
Interest income |
23 |
680 |
479 |
2,047 |
||||||||||||||||||||||||||||
Realized (loss) gain on derivative instruments, net |
(4,107) |
170 |
(8,900) |
2,709 |
||||||||||||||||||||||||||||
Unrealized gain (loss) on derivative instruments, net |
4,161 |
(2,478) |
(9,434) |
(18,315) |
||||||||||||||||||||||||||||
Other, net |
859 |
(10) |
803 |
(10) |
||||||||||||||||||||||||||||
Net other expense |
(36,815) |
(41,608) |
(121,059) |
(129,268) |
||||||||||||||||||||||||||||
Income before income tax and noncontrolling interest |
17,294 |
11,879 |
28,724 |
28,837 |
||||||||||||||||||||||||||||
Income tax benefit (expense) |
152 |
(1,318) |
(89) |
(1,470) |
||||||||||||||||||||||||||||
Net income |
17,446 |
10,561 |
28,635 |
27,367 |
||||||||||||||||||||||||||||
Less: Net (income) loss attributable to the noncontrolling interest |
(494) |
17 |
(73) |
575 |
||||||||||||||||||||||||||||
Net income attributable to |
$ |
16,952 |
$ |
10,578 |
$ |
28,562 |
$ |
27,942 |
||||||||||||||||||||||||
Net income attributable to Limited common shareholders per share: |
||||||||||||||||||||||||||||||||
Basic |
$ |
0.32 |
$ |
0.18 |
$ |
0.53 |
$ |
0.49 |
||||||||||||||||||||||||
Diluted |
$ |
0.32 |
$ |
0.18 |
$ |
0.53 |
$ |
0.49 |
||||||||||||||||||||||||
Weighted average shares outstanding (in thousands): |
||||||||||||||||||||||||||||||||
Basic |
52,514 |
57,503 |
54,221 |
57,493 |
||||||||||||||||||||||||||||
Diluted |
52,713 |
57,598 |
54,317 |
57,586 |
||||||||||||||||||||||||||||
Other comprehensive income, before tax: |
||||||||||||||||||||||||||||||||
Change in derivative instruments designated as cash flow hedges |
158 |
— |
(13,093) |
— |
||||||||||||||||||||||||||||
Reclassification of realized loss on derivative instruments designated |
1,130 |
— |
1,658 |
— |
||||||||||||||||||||||||||||
Foreign currency translation adjustments |
105 |
(119) |
3 |
(52) |
||||||||||||||||||||||||||||
Comprehensive income, before tax |
18,839 |
10,442 |
17,203 |
27,315 |
||||||||||||||||||||||||||||
Income tax (expense) benefit related to items of other comprehensive income |
(17) |
— |
115 |
— |
||||||||||||||||||||||||||||
Comprehensive income, after tax |
18,822 |
10,442 |
17,318 |
27,315 |
||||||||||||||||||||||||||||
Comprehensive (income) loss attributable to the |
(494) |
17 |
(73) |
575 |
||||||||||||||||||||||||||||
Comprehensive income attributable to |
$ |
18,328 |
$ |
10,459 |
$ |
17,245 |
$ |
27,890 |
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES |
|||||||
Condensed Consolidated Balance Sheets |
|||||||
(Unaudited) |
|||||||
(All currency expressed in |
|||||||
|
|
||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
155,166 |
$ |
180,552 |
|||
Accounts receivable, net of allowance of |
101,771 |
109,384 |
|||||
Net investment in finance leases, net of allowance of |
59,485 |
40,940 |
|||||
Container leaseback financing receivable, net of allowance of |
22,412 |
20,547 |
|||||
Trading containers |
14,290 |
11,330 |
|||||
Containers held for sale |
32,457 |
41,884 |
|||||
Prepaid expenses and other current assets |
11,646 |
14,816 |
|||||
Due from affiliates, net |
2,098 |
1,880 |
|||||
Total current assets |
399,325 |
421,333 |
|||||
Restricted cash |
78,712 |
97,353 |
|||||
Containers, net of accumulated depreciation of |
4,102,791 |
4,156,151 |
|||||
Net investment in finance leases, net of allowance of |
555,427 |
254,363 |
|||||
Container leaseback financing receivable, net of allowance of |
256,994 |
251,111 |
|||||
Fixed assets, net of accumulated depreciation of |
834 |
1,128 |
|||||
Intangible assets, net of accumulated amortization of |
3,525 |
5,291 |
|||||
Derivative instruments |
- |
135 |
|||||
Deferred taxes |
1,388 |
1,388 |
|||||
Other assets |
14,355 |
14,364 |
|||||
Total assets |
$ |
5,413,351 |
$ |
5,202,617 |
|||
Liabilities and Equity |
|||||||
Current liabilities: |
|||||||
Accounts payable and accrued expenses |
$ |
27,717 |
$ |
23,404 |
|||
Container contracts payable |
325,897 |
9,394 |
|||||
Other liabilities |
2,248 |
2,636 |
|||||
Due to container investors, net |
18,501 |
21,978 |
|||||
Debt, net of unamortized costs of |
240,144 |
242,433 |
|||||
Total current liabilities |
614,507 |
299,845 |
|||||
Debt, net of unamortized costs of |
3,481,145 |
3,555,296 |
|||||
Derivative instruments |
34,512 |
13,778 |
|||||
Income tax payable |
10,035 |
9,909 |
|||||
Deferred taxes |
7,335 |
7,789 |
|||||
Other liabilities |
17,083 |
30,355 |
|||||
Total liabilities |
4,164,617 |
3,916,972 |
|||||
Equity: |
|||||||
|
|||||||
Common shares, |
584 |
583 |
|||||
|
(74,525) |
(17,746) |
|||||
Additional paid-in capital |
414,036 |
410,595 |
|||||
Accumulated other comprehensive loss |
(11,828) |
(511) |
|||||
Retained earnings |
894,135 |
866,458 |
|||||
|
1,222,402 |
1,259,379 |
|||||
Noncontrolling interest |
26,332 |
26,266 |
|||||
Total equity |
1,248,734 |
1,285,645 |
|||||
Total liabilities and equity |
$ |
5,413,351 |
$ |
5,202,617 |
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES |
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(Unaudited) |
||||||||
(All currency expressed in |
||||||||
Nine Months Ended |
||||||||
2020 |
2019 |
|||||||
Cash flows from operating activities: |
||||||||
Net income |
$ |
28,635 |
$ |
27,367 |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation expense |
196,056 |
194,243 |
||||||
Bad debt (recovery) expense, net |
(326) |
2,650 |
||||||
Container (recovery) write-off from lessee default, net |
(140) |
7,154 |
||||||
Unrealized loss on derivative instruments, net |
9,434 |
18,315 |
||||||
Amortization and write-off of unamortized deferred debt issuance costs and accretion of bond discounts |
14,761 |
5,922 |
||||||
Amortization of intangible assets |
1,766 |
1,576 |
||||||
Gain on sale of owned fleet containers, net |
(19,410) |
(18,263) |
||||||
Gain on insurance recovery and legal settlement |
— |
(841) |
||||||
Share-based compensation expense |
3,218 |
3,213 |
||||||
Changes in operating assets and liabilities |
54,319 |
80,875 |
||||||
Total adjustments |
259,678 |
294,844 |
||||||
Net cash provided by operating activities |
288,313 |
322,211 |
||||||
Cash flows from investing activities: |
||||||||
Purchase of containers and fixed assets |
(273,171) |
(449,105) |
||||||
Payment on leaseback financing receivable |
(24,089) |
(271,976) |
||||||
Receipt of principal payments on container leaseback financing receivable |
15,788 |
2,083 |
||||||
Proceeds from sale of containers and fixed assets |
109,144 |
111,523 |
||||||
Net cash used in investing activities |
(172,328) |
(607,475) |
||||||
Cash flows from financing activities: |
||||||||
Proceeds from debt |
1,626,759 |
995,134 |
||||||
Principal payments on debt |
(1,704,132) |
(654,723) |
||||||
Principal repayments on container leaseback financing liability, net |
(12,754) |
— |
||||||
Purchase of treasury shares |
(56,779) |
(2,558) |
||||||
Debt issuance costs |
(13,333) |
(7,368) |
||||||
Dividends paid to noncontrolling interest |
— |
(2,744) |
||||||
Issuance of common shares upon exercise of share options |
224 |
121 |
||||||
Net cash (used in) provided by financing activities |
(160,015) |
327,862 |
||||||
Effect of exchange rate changes |
3 |
(52) |
||||||
Net (decrease) increase in cash, cash equivalents and restricted cash |
(44,027) |
42,546 |
||||||
Cash, cash equivalents and restricted cash, beginning of the year |
277,905 |
224,928 |
||||||
Cash, cash equivalents and restricted cash, end of the period |
$ |
233,878 |
$ |
267,474 |
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 |
|||||||||||||||||||
|
|
|
|
|
||||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||||||
Reconciliation of adjusted net income: |
||||||||||||||||||||
Net income attributable to Limited common shareholders |
$ |
16,952 |
$ |
15,989 |
$ |
10,578 |
$ |
28,562 |
$ |
27,942 |
||||||||||
Adjustments: |
||||||||||||||||||||
Write-off of unamortized deferred debt issuance costs and bond discounts |
8,628 |
— |
— |
8,750 |
— |
|||||||||||||||
Unrealized (gain) loss on derivative instruments, net |
(4,161) |
(1,342) |
2,478 |
9,434 |
18,315 |
|||||||||||||||
Gain on insurance recovery and legal settlement |
— |
— |
— |
— |
(841) |
|||||||||||||||
Impact of reconciling items on income tax (benefit) expense |
(42) |
13 |
(27) |
(179) |
(173) |
|||||||||||||||
Impact of reconciling items attributable to the noncontrolling interest |
257 |
134 |
(79) |
(437) |
(845) |
|||||||||||||||
Adjusted net income |
$ |
21,634 |
$ |
14,794 |
$ |
12,950 |
$ |
46,130 |
$ |
44,398 |
||||||||||
Adjusted net income per diluted common share |
$ |
0.41 |
$ |
0.28 |
$ |
0.22 |
$ |
0.85 |
$ |
0.77 |
||||||||||
Three Months Ended, |
Nine Months Ended |
|||||||||||||||||||
|
|
|
|
|
||||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||||||
Reconciliation of adjusted EBITDA: |
||||||||||||||||||||
Net income attributable to Limited common shareholders |
$ |
16,952 |
$ |
15,989 |
$ |
10,578 |
$ |
28,562 |
$ |
27,942 |
||||||||||
Adjustments: |
||||||||||||||||||||
Interest income |
(23) |
(56) |
(680) |
(479) |
(2,047) |
|||||||||||||||
Interest expense |
29,123 |
30,022 |
39,970 |
95,257 |
115,699 |
|||||||||||||||
Write-off of unamortized deferred debt issuance costs and bond discounts |
8,628 |
— |
— |
8,750 |
— |
|||||||||||||||
Realized loss (gain) on derivative instruments, net |
4,107 |
3,267 |
(170) |
8,900 |
(2,709) |
|||||||||||||||
Unrealized (gain) loss on derivative instruments, net |
(4,161) |
(1,342) |
2,478 |
9,434 |
18,315 |
|||||||||||||||
Gain on insurance recovery and legal settlement |
— |
— |
— |
— |
(841) |
|||||||||||||||
Income tax (benefit) expense |
(152) |
1,074 |
1,318 |
89 |
1,470 |
|||||||||||||||
Net income (loss) attributable to the noncontrolling interest |
494 |
308 |
(17) |
73 |
(575) |
|||||||||||||||
Depreciation expense |
65,374 |
63,848 |
67,644 |
196,056 |
194,243 |
|||||||||||||||
Container write-off (recovery) from lessee default, net |
33 |
(1,557) |
(576) |
(1,525) |
7,154 |
|||||||||||||||
Amortization expense |
645 |
557 |
481 |
1,766 |
1,576 |
|||||||||||||||
Impact of reconciling items attributable to the noncontrolling interest |
(2,060) |
(2,133) |
(2,772) |
(7,507) |
(9,099) |
|||||||||||||||
Adjusted EBITDA |
$ |
118,960 |
$ |
109,977 |
$ |
118,254 |
$ |
339,376 |
$ |
351,128 |
||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
|
|
|
|
|
||||||||||||||||
(Dollars in thousands) |
(Dollars in thousands) |
|||||||||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||||||
Reconciliation of headline earnings: |
||||||||||||||||||||
Net income attributable to Limited common shareholders |
$ |
16,952 |
$ |
15,989 |
$ |
10,578 |
$ |
28,562 |
$ |
27,942 |
||||||||||
Adjustments: |
||||||||||||||||||||
Container impairment |
3,074 |
1,197 |
5,351 |
8,857 |
17,069 |
|||||||||||||||
Gain on insurance recovery and legal settlement |
— |
— |
— |
— |
(841) |
|||||||||||||||
Impact of reconciling items on income tax benefit |
(28) |
(12) |
(53) |
(86) |
(158) |
|||||||||||||||
Impact of reconciling items attributable to the |
(85) |
(43) |
(137) |
(243) |
(463) |
|||||||||||||||
Headline earnings |
$ |
19,913 |
$ |
17,131 |
$ |
15,739 |
$ |
37,090 |
$ |
43,549 |
||||||||||
Headline earnings per basic common share |
$ |
0.38 |
$ |
0.32 |
$ |
0.27 |
$ |
0.68 |
$ |
0.76 |
||||||||||
Headline earnings per diluted common share |
$ |
0.38 |
$ |
0.32 |
$ |
0.27 |
$ |
0.68 |
$ |
0.76 |
View original content:http://www.prnewswire.com/news-releases/textainer-group-holdings-limited-reports-third-quarter-2020-results-301172337.html
SOURCE