SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
 Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 2013
General Finance Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware
 (State or Other Jurisdiction of Incorporation)
     
001-32845
 
32-0163571
(Commission File Number)
 
(I.R.S. Employer Identification No.)
     
39 East Union Street
   
Pasadena, California
 
91103
(Address of Principal Executive Offices)
 
(Zip Code)
(626) 584-9722
 (Registrant’s Telephone Number, Including Area Code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (See General Instruction A.2 below):

o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



 
 










 
 
 


 
EXPLANATORY NOTES
Certain References

References in this Report to “we,” “us,” “our” or the “Company” refer to General Finance Corporation, a Delaware corporation (“GFN”), and its direct and indirect subsidiaries. These subsidiaries include GFN U.S. Australasia Holdings, Inc., a Delaware corporation (“GFN U.S.”); GFN North America Corp., a Delaware corporation ("GFNNA"); GFN Manufacturing Corporation, a Delaware corporation ("GFNMC"), and its subsidiary Southern Frac, LLC, a Texas limited liability company; Royal Wolf Holdings Limited (formerly GFN Australasia Holdings Pty Limited), an Australian corporation publicly traded on the Australian Securities Exchange ("RWH"); and its Australian and New Zealand subsidiaries (collectively, "Royal Wolf"); Pac-Van, Inc., an Indiana corporation, and its Canadian subsidiary, PV Acquisition Corp., an Alberta corporation, doing business as "Container King" (collectively, "Pac-Van").
 

TABLE OF CONTENTS
       
        Page
 
           
Item 5.03
 
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
 
 1
   
           
Item 8.01
 
Other Events
 
 1
 
           
Item 9.01
 
Financial Statements and Exhibits
 
 1
 

 

 
Exhibit 3.1
 
Corrected Amended and Restated Certificate of Designation, Preferences and Rights of Series A 12.5% Cumulative Preferred Stock
     
           
Exhibit 99.1
 
Press Release of GFN dated May 10, 2013
     
           
Exhibit 99.2
 
Press Release of GFN dated May 14, 2013
     


 
i
 



Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

On May 10, 2013, GFN filed a Corrected Amended and Restated Certificate of Designation, Preferences and Rights of Series A 12.5% Cumulative Preferred Stock, which is attached hereto as Exhibit 3.1 hereto and is incorporated by reference herein.

Item 8.01 Other Events

On May 10, 2013 GFN announced the pricing of a public offering of 350,000 shares of 9.00% Series C Cumulative Redeemable Perpetual Preferred Stock. The Company has applied to list the shares of Series C Preferred Stock on the NASDAQ Global Select Market. A copy of the press release of GFN dated May 10, 2013 is attached as Exhibit 99.1 and is incorporated by reference herein.

On May 14, 2013 GFN announced financial results for the third quarter and fiscal year-to-date ended March 31, 2013. A copy of the press release of GFN dated May 14, 2013 is attached as Exhibit 99.2 and is incorporated by reference herein.

Item 9.01   Financial Statements and Exhibits

Exhibit
Exhibit Description
   
3.1
Corrected Amended and Restated Certificate of Designation, Preferences and Rights of Series A 12.5% Cumulative Preferred Stock
   
99.1
Press Release of GFN dated May 10, 2013
   
99.2
Press Release of GFN dated May 14, 2013




 
1
 



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
 
GENERAL FINANCE CORPORATION
  
 
Dated: May 16, 2013 
By:  
/s/ CHRISTOPHER A. WILSON
 
   
Christopher A. Wilson
 
   
General Counsel, Vice President and Secretary
 
 



 
2
 


EXHIBIT INDEX
     
Exhibit
   
Number
 
Exhibit Description
 
3.1
 
 
Corrected Amended and Restated Certificate of Designation, Preferences and Rights of Series A 12.5% Cumulative Preferred Stock
     
99.1
 
Press Release of GFN dated May 10, 2013
     
99.2
 
Press Release of GFN dated May 14, 2013

 

 
3
EXHIBIT 3.1
 


CORRECTED
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION,
 PREFERENCES AND RIGHTS
OF SERIES A 12.5% CUMULATIVE PREFERRED STOCK
OF
GENERAL FINANCE CORPORATION,
a Delaware corporation

(Pursuant to Section 103(f) of the General Corporation Law of the State of Delaware (the “DGCL”))

General Finance Corporation, a corporation organized and existing under the provisions of the DGCL, (the “Corporation”) does hereby certify:
 
FIRST : That the name of the corporation is General Finance Corporation (the “Corporation”);

SECOND : That the Corporation filed, on April 11, 2013, an Amended and Restated Certificate of Designation, Preferences and Rights of Series A 12.5% Cumulative Preferred Stock (the “Certificate”) with the Secretary of State of the State of Delaware, and that the Certificate requires correction as permitted by Section 103(f) of the DGCL.

THIRD : That the Certificate is an inaccurate record of the action referred to therein, as the Board of Directors of the Corporation lacked the authority to amend and restate the Certificate of Designation, Preferences and Rights of Series A 12.5% Cumulative Preferred Stock as shares of such Series have been issued.

FOURTH : The Certificate in its corrected form is attached as Exhibit A hereto.


 
 
 

IN WITNESS WHEREOF, the said GENERAL FINANCE CORPORATION has caused its corporate seal to be hereunto affixed and this Certificate to be signed by Christopher A. Wilson, its Secretary, this 10 th day of May 2013.

GENERAL FINANCE CORPORATION
 
By: / s/ CHRISTOPHER A. WILSON
Christopher A. Wilson
Secretary


 
 
 

Exhibit A

CERTIFICATE OF DECREASE
OF
SERIES A 12.5% CUMULATIVE PREFERRED STOCK
OF
GENERAL FINANCE CORPORATION,
a Delaware corporation

(Pursuant to Section 151 of the General Corporation Law of the State of Delaware (the “DGCL”))

General Finance Corporation, a corporation organized and existing under the provisions of the DGCL, (the “Corporation”) does hereby certify:
 
FIRST : That a Certificate of Designation, Preferences and Rights of Preferred Stock of Series A 12.5% Cumulative Preferred Stock (the “Certificate of Designation”) was filed, in accordance with Section 151 of the DGCL, with the Secretary of State of the State of Delaware on December 3, 2008.
 
SECOND : That the Certificate of Designation authorized nine hundred thousand (900,000) shares of Series A 12.5% Cumulative Preferred Stock, par value $0.0001 per share, (“Series A Preferred Stock”), of which twenty five thousand, nine hundred (25,900) shares of Series A Preferred Stock are issued and outstanding.
 
THIRD : That the Board of Directors of the Corporation duly adopted a resolution authorizing and directing the decrease of the number of shares designated as Series A Preferred Stock, from nine hundred thousand (900,000) shares to twenty five thousand, nine hundred (25,900) shares.  The resolution setting forth that decrease in the number of authorized shares was as follows:
 
RESOLVED, that the number of shares constituting the Series A Preferred Stock 12.5% Cumulative Preferred Stock (“Series A Preferred Stock”), par value $0.0001 per share, shall be decreased from nine hundred thousand (900,000) shares to twenty five thousand, nine hundred (25,900) shares.
 
FOURTH : That the number of shares designated as Series A Preferred Stock is hereby decreased from nine hundred thousand (900,000) shares to twenty five thousand, nine hundred (25,900) shares, in accordance with Section 151 of the DGCL.
 

 

EXHIBIT 99.1
 

 FOR IMMEDIATE RELEASE

GENERAL FINANCE CORPORATION ANNOUNCES PRICING OF PUBLIC OFFERING OF 9.00% SERIES C CUMULATIVE REDEEMABLE PERPETUAL PREFERRED STOCK


PASADENA, CA – May 10, 2013 – General Finance Corporation (NASDAQ: GFN), the parent company of businesses in the mobile storage, modular space and liquid containment industries (the “Company”), announced today that it has priced a public offering of 350,000 shares of its 9.00% Series C Cumulative Redeemable Perpetual Preferred Stock (the “Series C  Preferred Stock”), liquidation preference $100.00 per share, for gross proceeds of approximately $35 million, before deducting the underwriting discount and other estimated offering costs. The offering is subject to customary closing conditions and is expected to close on or about May 17, 2013.  The Company expects to list the shares on the NASDAQ Global Select Market under the symbol “GFNCP” and the shares to commence trading within 30 days of the original issue date.

In connection with the offering, the Company has granted the underwriters an option for 30 days to purchase up to an additional 50,000 shares of the Series C Preferred Stock to cover overallotments, if any.

The Company expects to use the net proceeds of this offering to pay down senior indebtedness and for general corporate purposes, which would include the acquisition of businesses and lease fleet and the redemption of Series A Preferred Stock.

Sterne, Agee & Leach, Inc. and D.A. Davidson & Co. are acting as joint book-running managers for the offering.  BB&T Capital Markets, a division of BB&T Securities, LLC, is acting as the lead manager for the offering. B. Riley & Co., LLC, Maxim Group LLC, and Northland Capital Markets are serving as co-managers for the offering.

A registration statement relating to these securities has been declared effective by the Securities and Exchange Commission (SEC). These securities may not be sold in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The offering may be made solely by means of a written prospectus forming a part of the registration statement, copies of which may be obtained when available by contacting:

Sterne, Agee & Leach, Inc.
Attn: Prospectus Department
277 Park Avenue, 24th Floor
New York, NY 10172
Phone: 212-338-4708
Fax: 205-414-6373
Email: syndicate@sterneagee.com

D.A. Davidson & Co.
8 Third Street N.
Great Falls, MT 59401
Telephone: 1-800-332-5915
Email: prospectusrequest@dadco.com


 
 
 
About General Finance Corporation

Headquartered in Pasadena, California, General Finance Corporation (NASDAQ: GFN, www.generalfinance.com ) is the parent company of businesses in the mobile storage, modular space and liquid containment (“portable services”) industries.  Management’s expertise in these sectors drives disciplined growth strategies, operational guidance, effective capital allocation and capital markets support for the Company’s subsidiaries.  The Company’s principal operating subsidiaries are majority-owned Royal Wolf Holdings Limited ( www.royalwolf.com.au ), the leading provider of portable storage solutions in the Asia-Pacific regions of Australia and New Zealand,  wholly-owned Pac-Van, Inc. ( www.pacvan.com ), a prominent regional provider of portable storage, office and liquid storage tank containers, mobile offices and modular buildings in North America, and 90%-owned Southern Frac, LLC ( www.southernfrac.com ), a domestic manufacturer of portable liquid storage tank containers.   Royal Wolf’s shares trade on the Australian Securities Exchange under the symbol RWH.

Cautionary Statement about Forward-Looking Information

Statements in this press release contain “forward-looking” information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such statements involve a number of risks and uncertainties. Those factors include conditions in the financial markets and customary offering closing conditions. Please see General Finance Corporation’s filing with the SEC for certain other factors that may affect forward-looking information.

Investor/Media Contact

Larry Clark
Financial Profiles, Inc.
310-478-2700 ext. 29






EXHIBIT 99.2
 

FOR IMMEDIATE RELEASE

GENERAL FINANCE CORPORATION REPORTS THIRD QUARTER AND YEAR-TO-DATE FISCAL YEAR 2013 RESULTS

Twelfth Consecutive Quarter of Year-Over-Year Growth in Total Revenues and Adjusted EBITDA

PASADENA, CA – May 14, 2013 – General Finance Corporation (NASDAQ: GFN), the parent company of businesses in the mobile storage, modular space and liquid containment industries (the “Company”), today announced its consolidated financial results for the third quarter ended March 31, 2013. The consolidated results include majority-owned Royal Wolf Holdings Limited (“Royal Wolf”), the leading provider of portable storage solutions in the Asia-Pacific regions of Australia and New Zealand,  wholly-owned Pac-Van, Inc. (“Pac-Van”), a prominent regional provider of portable storage, office and liquid storage tank containers, mobile offices and modular buildings in North America, and 90%-owned Southern Frac, LLC (“Southern Frac”), a domestic manufacturer of portable liquid storage tank containers.
 
Third Quarter 2013 Highlights

 
●
Total revenues were $63.8 million, an increase of 14% over the third quarter of fiscal year 2012, and include $5.3 million at Southern Frac, which we acquired on October 1, 2012.
 
●
Leasing revenues comprised 54% of total non-manufacturing revenues versus 49% for the third quarter of fiscal year 2012.
 
●
Adjusted EBITDA was $13.2 million, an increase of approximately 6% over the third quarter of fiscal year 2012.
 
●
Adjusted EBITDA margin was 21%, compared to 22% in the third quarter of fiscal year 2012.
 
●
Net income attributable to common shareholders was $0.7 million, or $0.03 per share, compared to $1.2 million, or $0.05 per share, for the third quarter of fiscal year 2012.
 
●
Average fleet unit utilization at Royal Wolf was 83%.
 
●
Average fleet unit utilization at Pac-Van was 74%.
 
●
Completed two tuck-in acquisitions during the quarter.


YTD 2013 Highlights

 
●
Total revenues were $180.6 million, an increase of 15% over the first nine months of fiscal year 2012, and revenues at Southern Frac of $13.0 million represented an 8% increase over total revenues during the first nine months of fiscal year 2012.
 
●
Leasing revenues comprised 55% of total non-manufacturing revenues versus 49% for the first nine months of fiscal year 2012.
 
●
Adjusted EBITDA was $40.1 million, an increase of 17% over the first nine months of fiscal year 2012.
 
●
Net income attributable to common shareholders was $3.4 million, or $0.15 per share, compared to $2.3 million, or $0.10 per share, for the first nine months of fiscal year 2012.
 
●
Average fleet utilization at Royal Wolf was 83%.
 
●
Average fleet utilization at Pac-Van was 77%.
 
●
Completed six tuck-in acquisitions during the first nine months of fiscal year 2013.

 
1
 
Management Commentary

“We saw continued momentum in the third quarter of fiscal year 2013, posting our twelfth consecutive quarter of year-over-year increases in revenues and adjusted EBITDA,” said Ronald Valenta, President and Chief Executive Officer of General Finance Corporation. “Royal Wolf  and Pac-Van both continued to show improved profitability with 12% and 19% increases in quarterly leasing revenues over the same quarter in the prior year, respectively, based on a higher number of units on lease and generally improved lease rates. Southern Frac, our newly acquired manufacturer of portable liquid storage tank containers, experienced a seasonal decline in revenues and profitability, but continues to be a good source of business referrals to Pac-Van’s leasing operations.”

Charles Barrantes, Executive Vice President and Chief Financial Officer, added, “Our capital investment strategy continues to be focused on increasing the size of our lease fleet and pursuing accretive acquisitions in the attractive container asset class.  Year-to-date, we have expanded our fleet by 11%  and completed six tuck-in acquisitions, three in Australia, two in the United States and one in Canada.”

Third Quarter 2013 Operating Summary

Royal Wolf

Royal Wolf’s revenues for the third quarter of fiscal year 2013 totaled $39.8 million, compared with $35.1 million for the third quarter of fiscal year 2012, an increase of 13%. On a local currency basis, revenues increased by 15% in Australian dollars.  The increase in revenues was driven primarily by growth in the mining, moving and storage and construction sectors.  Adjusted EBITDA for the third quarter of 2013 was $11.2 million, compared with $10.0 million for the year-ago quarter, an increase of approximately 12%.

Pac-Van

Pac-Van’s revenues for the third quarter of fiscal year 2013 totaled $18.7 million, compared with $21.0 million for the third quarter of fiscal year 2012, a decrease of 11%. The decrease was primarily the result of $5.5 million in sales revenues on a large one-time government-related contract for modular units in the third quarter of 2012 that was not duplicated in the current fiscal year.  Pac-Van’s leasing revenues increased by 19% over the year-ago quarter and were driven by improved demand across most sectors, particularly in commercial, construction and mining and energy.  Adjusted EBITDA for the third quarter of fiscal year 2013 was $3.6 million, compared with $3.1 million for the year-ago quarter, an increase of over 16%.  A higher number of units on lease and generally improved lease rates contributed to the increased adjusted EBITDA.

Southern Frac

On October 1, 2012, the Company acquired 90% of the membership interests of Southern Frac. Revenues generated from external customers for the third quarter of fiscal year 2013 totaled $5.3 million.  Not included in this amount were intercompany revenues of $1.7 million from tank containers sold to Pac-Van and eliminated in the Company’s consolidated results.  Adjusted EBITDA for the quarter was a loss of $0.8 million, which was primarily the result of lower seasonal activity.




 
2
 
Balance Sheet Overview

At March 31, 2013, the Company had total debt of $212.9 million and cash and cash equivalents of $2.7 million, compared with $174.1 million and $7.1 million at June 30, 2012, respectively.  During the first nine months of fiscal year 2013, the Company generated cash from operating activities of $21.0 million. Total net lease fleet capital expenditures for the first nine months of fiscal year 2013 were $35.4 million.

Inventories were $37.1 million at March 31, 2013, including $6.1 million at Southern Frac, an increase from $31.2 million at June 30, 2012. Days sales outstanding in receivables were 40 and 54 days for Royal Wolf and Pac-Van, respectively, compared to 41 and 51 days, respectively, at June 30, 2012; and 35 days for Southern Frac at March 31, 2013.

As of March 31, 2013, General Finance owned approximately 50.2 million shares of Royal Wolf, or over 50% of total shares outstanding.  The value of these shares is approximately $153.6 million, or $6.74 per diluted GFN common share, based on Royal Wolf’s May 10, 2013 closing price of A$3.06 and an AUD/USD exchange rate of 1.00.

Outlook  

Management remains comfortable with the full year outlook that was provided in the Company’s fourth quarter and fiscal year 2012 earnings press release and conference call.

Conference Call Details
 
Management will host a conference call today at 8:30 a.m. PDT (11:30 a.m. EDT), to discuss the Company’s operating results. The conference call number for U.S. participants is (866) 901-5096 and the conference call number for participants outside the U.S. is (706) 643-3717. The conference ID number for both conference call numbers is 60368053 .  Additionally, interested parties can listen to a live webcast of the call in the "Investor Relations" section of the Company's website at http://www.generalfinance.com .
 
A replay of the conference call may be accessed through May 28, 2013 by dialing (800) 585-8367 (U.S.) or (404) 537-3406 (international), using conference ID number 60368053.  
 
After the replay has expired, interested parties can listen to the conference call via webcast in the "Investor Relations" section of the Company's website at http://www.generalfinance.com .
 
About General Finance Corporation

Headquartered in Pasadena, California, General Finance Corporation (NASDAQ: GFN, www.generalfinance.com ) is the parent company of businesses in the mobile storage, modular space and liquid containment (“portable services”) industries.  Management’s expertise in these sectors drives disciplined growth strategies, operational guidance, effective capital allocation and capital markets support for the Company’s subsidiaries.  The Company’s principal operating subsidiaries are majority-owned Royal Wolf Holdings Limited ( www.royalwolf.com.au ), the leading provider of portable storage solutions in the Asia-Pacific regions of Australia and New Zealand,  wholly-owned Pac-Van, Inc. ( www.pacvan.com ), a prominent regional provider of portable storage, office and liquid storage tank containers, mobile offices and modular buildings in North America, and 90%-owned Southern Frac, LLC ( www.southernfrac.com ), a domestic manufacturer of portable liquid storage tank containers.   Royal Wolf’s shares trade on the Australian Securities Exchange under the symbol RWH.
 
 
 
3
 
Cautionary Statement about Forward-Looking Statements

Statements in this news release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to,
statements addressing management’s views with respect to future financial and operating results, competitive pressures, market interest rates for our variable rate indebtedness, our ability to raise capital or borrow additional funds, changes in the Australian, New Zealand or Canadian dollar relative to the U.S. dollar, regulatory changes, customer defaults or insolvencies, litigation, acquisition of businesses that do not perform as we expect or that are difficult for us to integrate or control, our ability to procure adequate levels of products to meet customer demand, our ability to procure adequate supplies for our manufacturing operations, labor disruptions, adverse resolution of any contract or other disputes with customers, declines in demand for our products and services from key industries such as the Australian mining industry or the U.S. construction industry or a write-off of all or a part of our goodwill and intangible assets. These involve risks and uncertainties that could cause actual outcomes and results to differ materially from those described in forward-looking statements. We believe that the expectations represented by our forward-looking statements are reasonable, yet there can be no assurance that such expectations will prove to be correct. Furthermore, unless otherwise stated, the forward-looking statements contained in this press release are made as of the date of the press release, and we do not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise unless required by applicable law. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Readers are cautioned that these forward-looking statements involve certain risks and uncertainties, including those contained in filings with the Securities and Exchange Commission.

Investor/Media Contact

Larry Clark
Financial Profiles, Inc.
310-478-2700 ext. 29

-Financial Tables Follow-

 
4
 

GENERAL FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
 
 
 
 
 
Quarter Ended March 31,
   
 
Nine Months Ended March 31,
 
 
 
2012
   
2013
   
2012
   
2013
 
                         
Revenues
                       
Sales:
                       
Lease inventories and fleet
  $ 28,762     $ 27,022     $ 79,906     $ 75,020  
Manufactured units
    —       5,310       —       13,041  
      28,762       32,332       79,906       88,061  
Leasing
    27,392       31,503       77,148       92,515  
      56,154       63,835       157,054       180,576  
                                 
Costs and expenses
                               
Cost of sales:
                               
Lease inventories and fleet (exclusive of the items shown separately below)
    21,664       19,827       58,897       55,230  
Manufactured units
    —       5,556       —       12,105  
Direct costs of leasing operations
    10,802       12,258       30,754       34,639  
Selling and general expenses
    11,427       13,482       33,822       39,757  
Depreciation and amortization
    4,904       5,568       14,144       16,155  
                                 
Operating income
    7,357       7,144       19,437       22,690  
                                 
Interest income
    13       3       141       43  
Interest expense
    (2,610 )     (2,749 )     (8,900 )     (8,604 )
Foreign currency exchange gain and other
    576       115       899       583  
      (2,021 )     (2,631 )     (7,860 )     (7,978 )
                                 
Income before provision for income taxes
    5,336       4,513       11,577       14,712  
                                 
Provision for income taxes
    2,029       1,715       4,401       5,591  
                                 
Net income
    3,307       2,798       7,176       9,121  
                                 
Preferred stock dividends
    (44 )     (44 )     (133 )     (130 )
Noncontrolling interest
    (2,095 )     (2,049 )     (4,771 )     (5,602 )
                                 
Net income attributable to common stockholders
  $ 1,168     $ 705     $ 2,272     $ 3,389  
                                 
Net income per common share:
                               
Basic
  $ 0.05     $ 0.03     $ 0.10     $ 0.15  
Diluted
    0.05       0.03       0.10       0.15  
                                 
Weighted average shares outstanding:
                               
Basic
    22,013,299       22,127,042       22,013,299       22,059,072  
Diluted
    22,273,173       22,821,564       22,271,547       22,753,594  



 
5
 
GENERAL FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

   
June 30, 2012
   
March 31, 2013
 
         
(Unaudited)
 
Assets
           
Cash and cash equivalents
  $ 7,085     $ 2,744  
Restricted cash
    —       1,000  
Trade and other receivables, net
    35,443       34,456  
Inventories
    31,206       37,095  
Prepaid expenses and other
    5,029       5,978  
Property, plant and equipment, net
    12,732       19,277  
Lease fleet, net
    259,458       301,282  
Goodwill
    68,449       73,205  
Other intangible assets, net
    18,158       19,174  
Total assets
  $ 437,560     $ 494,211  
                 
Liabilities
               
Trade payables and accrued liabilities
  $ 35,964     $ 37,837  
Income taxes payable
    593       289  
Unearned revenue and advance payments
    12,151       12,819  
Senior and other debt
    174,092       212,918  
Deferred tax liabilities
    20,763       25,613  
Total liabilities
    243,563       289,476  
                 
Commitments and contingencies
    —       —  
                 
Equity
               
Cumulative preferred stock, $.0001 par value: 1,000,000 shares authorized; 26,000 shares issued and outstanding (in series) and liquidation value of $1,438 at June 30, 2012 and $1,439 at March 31, 2013
    1,395       1,395  
Common stock, $.0001 par value: 100,000,000 shares authorized; 22,019,965 and 22,248,386 shares outstanding at June 30, 2012 and March 31, 2013, respectively
    2       2  
Additional paid-in capital
    112,865       114,532  
 
Accumulated other comprehensive income
 
    5,809       7,552  
Accumulated deficit
    (22,877 )     (19,358 )
Total General Finance Corporation stockholders’ equity
    97,194       104,123  
Equity of noncontrolling interests
    96,803       100,612  
Total equity
    193,997       204,735  
Total liabilities and equity
  $ 437,560     $ 494,211  






 
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Explanation and Use of Non-GAAP Financial Measures

Adjusted EBITDA is a non-U.S. GAAP measure. We calculate adjusted EBITDA to eliminate the impact of certain items we do not consider to be indicative of the performance of our ongoing operations.  In addition, in evaluating adjusted EBITDA, you should be aware that in the future, we may incur expenses similar to the adjustments in the presentation of adjusted EBITDA. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. We present adjusted EBITDA because we consider it to be an important supplemental measure of our performance and because we believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry, many of which present EBITDA and a form of adjusted EBITDA when reporting their results. Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. We compensate for these limitations by relying primarily on our U.S. GAAP results and using adjusted EBITDA only supplementally. The following table shows our adjusted EBITDA and the reconciliation from net income on a consolidated basis (in thousands):

   
Quarter Ended March 31,
   
Nine Months Ended March 31,
 
 
 
2012
   
2013
   
2012
   
2013
 
Net  income (loss)
  $ 3,307     $ 2,798     $ 7,176     $ 9,121  
Add (deduct) —
                               
  Provision for income taxes
    2,029       1,715       4,401       5,591  
  Foreign currency exchange gain and other
    (576 )     (115 )     (899 )     (583 )
  Interest expense
    2,610       2,749       8,900       8,604  
  Interest income
    (13 )     (3 )     (141 )     (43 )
  Depreciation and amortization
    4,904       5,710       14,144       16,406  
  Share-based compensation expense
    234       322       654       968  
Adjusted EBITDA
  $ 12,495     $ 13,176     $ 34,235     $ 40,064  

 
The following tables show our adjusted EBITDA and the reconciliation from operating income for our operating units (in thousands):
   
 
Quarter Ended March 31, 2012
   
 
Quarter Ended March 31, 2013
 
 
 
Pac-Van
   
Royal Wolf
   
Southern
Frac
   
Pac-Van
   
Royal Wolf
   
Southern
Frac
 
Operating income
  $ 1,582     $ 6,505     $ —     $ 2,012     $ 7,117     $ (1,040 )
Add
                                               
  Depreciation and amortization
    1,442       3,458       —       1,568       3,914       226  
  Share-based compensation expense
    50       86       —       61       165       10  
Adjusted EBITDA
  $ 3,074     $ 10,049     $ —     $ 3,641     $ 11,196     $ (804 )

   
 
Nine Months Ended March 31, 2012
   
 
Nine Months Ended March 31, 2013
 
 
 
Pac-Van
   
Royal Wolf
   
Southern
Frac
   
Pac-Van
   
Royal Wolf
   
Southern
Frac
 
Operating income
  $ 4,518     $ 17,154     $ —     $ 6,238     $ 20,187     $ (822 )
Add
                                               
  Depreciation and amortization
    4,307       9,825       —       4,460       11,517       419  
  Share-based compensation expense
    148       200       —       183       430       10  
Adjusted EBITDA
  $ 8,973     $ 27,179     $ —     $ 10,881     $ 32,134     $ (393 )

 
 
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