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(Mark One)
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2018
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OR
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ________ to ________
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Delaware
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001-37552
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82-3430194
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
☐
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Accelerated filer
☒
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Non
‑
accelerated filer
☐
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Smaller reporting company
☐
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(Do not check if a smaller reporting company)
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Emerging growth company
☒
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ITEM 1.
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Financial Statements
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(in thousands, except share data)
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June 30, 2018 (unaudited)
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December 31, 2017
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|||||
Assets
|
|
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|||||
Cash and cash equivalents
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$
|
8,181
|
|
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$
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9,185
|
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Trade receivables, net of allowances for doubtful accounts at June 30, 2018 and December 31, 2017 of $5,631 and $4,845, respectively
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104,013
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94,820
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|||
Raw materials and consumables
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9,829
|
|
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10,082
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|||
Prepaid expenses and other current assets
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14,137
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13,696
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|||
Total current assets
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136,160
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127,783
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|||
Rental equipment, net
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1,075,040
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1,040,146
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Property, plant and equipment, net
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82,361
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83,666
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|||
Goodwill
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33,570
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28,609
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|||
Intangible assets, net
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125,864
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126,259
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|||
Other non-current assets
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4,038
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|
4,279
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|||
Total long-term assets
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1,320,873
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1,282,959
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|||
Total assets
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$
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1,457,033
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|
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$
|
1,410,742
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|
Liabilities
|
|
|
|
|||||
Accounts payable
|
58,370
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|
|
57,051
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|
|||
Accrued liabilities
|
45,606
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|
|
48,912
|
|
|||
Accrued interest
|
1,802
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|
|
2,704
|
|
|||
Deferred revenue and customer deposits
|
50,382
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45,182
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Current portion of long-term debt
|
1,883
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|
1,881
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Total current liabilities
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158,043
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155,730
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Long-term debt
|
684,641
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624,865
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|||
Deferred tax liabilities
|
111,924
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120,865
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|||
Deferred revenue and customer deposits
|
6,696
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|
|
5,377
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|||
Other non-current liabilities
|
19,109
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|
19,355
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Long-term liabilities
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822,370
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770,462
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|||
Total liabilities
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980,413
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|
926,192
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Commitments and contingencies (see Note 12)
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Class A common stock: $0.0001 par, 400,000,000 shares authorized at June 30, 2018 and December 31, 2017; 84,644,744 shares issued and outstanding at both June 30, 2018 and December 31, 2017
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8
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8
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Class B common stock: $0.0001 par, 100,000,000 shares authorized at June 30, 2018 and December 31, 2017; 8,024,419 shares issued and outstanding at both June 30, 2018 and December 31, 2017
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1
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1
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Additional paid-in-capital
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2,123,101
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2,121,926
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Accumulated other comprehensive loss
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(54,417
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)
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(49,497
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)
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Accumulated deficit
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(1,640,230
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)
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(1,636,819
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)
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|||
Total shareholders' equity
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428,463
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|
435,619
|
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|||
Non-controlling interest
|
48,157
|
|
|
48,931
|
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|||
Total equity
|
476,620
|
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|
484,550
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Total liabilities and equity
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$
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1,457,033
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$
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1,410,742
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
(in thousands, except share data)
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2018
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2017
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2018
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2017
|
||||||||
Revenues:
|
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|
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|
|
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|
||||||||
Leasing and services revenue:
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|
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|
||||||||
Modular leasing
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$
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101,249
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$
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72,954
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$
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198,511
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$
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141,941
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Modular delivery and installation
|
31,413
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22,949
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57,663
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41,953
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Sales:
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||||||||
New units
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5,236
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9,396
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12,664
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14,882
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Rental units
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2,435
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4,778
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6,246
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10,622
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|
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Total revenues
|
140,333
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|
|
110,077
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|
275,084
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209,398
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|
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Costs:
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||||||||
Costs of leasing and services:
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||||||||
Modular leasing
|
27,129
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21,340
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54,291
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|
|
40,442
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|
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Modular delivery and installation
|
30,127
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22,339
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55,648
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|
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40,472
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|
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Costs of sales:
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||||||||
New units
|
3,704
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6,766
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8,691
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|
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10,486
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|
||||
Rental units
|
1,263
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|
|
2,575
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|
3,578
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|
|
6,283
|
|
||||
Depreciation of rental equipment
|
23,470
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17,474
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|
47,315
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|
|
34,194
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|
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Gross profit
|
54,640
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|
|
39,583
|
|
|
105,561
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|
|
77,521
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|
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Expenses:
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Selling, general and administrative
|
47,734
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31,652
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92,948
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64,413
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|
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Other depreciation and amortization
|
1,570
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|
|
1,890
|
|
|
4,006
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|
|
3,831
|
|
||||
Restructuring costs
|
449
|
|
|
684
|
|
|
1,077
|
|
|
968
|
|
||||
Currency losses (gains), net
|
572
|
|
|
(6,497
|
)
|
|
1,596
|
|
|
(8,499
|
)
|
||||
Other (income) expense, net
|
(1,574
|
)
|
|
461
|
|
|
(4,419
|
)
|
|
591
|
|
||||
Operating income
|
5,889
|
|
|
11,393
|
|
|
10,353
|
|
|
16,217
|
|
||||
Interest expense
|
12,155
|
|
|
29,907
|
|
|
23,874
|
|
|
54,568
|
|
||||
Interest income
|
—
|
|
|
(3,509
|
)
|
|
—
|
|
|
(6,093
|
)
|
||||
Loss from continuing operations before income tax
|
(6,266
|
)
|
|
(15,005
|
)
|
|
(13,521
|
)
|
|
(32,258
|
)
|
||||
Income tax benefit
|
(6,645
|
)
|
|
(5,269
|
)
|
|
(7,065
|
)
|
|
(10,138
|
)
|
||||
Income (loss) from continuing operations
|
379
|
|
|
(9,736
|
)
|
|
(6,456
|
)
|
|
(22,120
|
)
|
||||
Income from discontinued operations, net of tax
|
—
|
|
|
3,840
|
|
|
—
|
|
|
6,045
|
|
||||
Net income (loss)
|
379
|
|
|
(5,896
|
)
|
|
(6,456
|
)
|
|
(16,075
|
)
|
||||
Net income (loss) attributable to non-controlling interest, net of tax
|
143
|
|
|
—
|
|
|
(505
|
)
|
|
—
|
|
||||
Total income (loss) attributable to WSC
|
$
|
236
|
|
|
$
|
(5,896
|
)
|
|
$
|
(5,951
|
)
|
|
$
|
(16,075
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to WSC – basic
|
|
|
|
|
|
|
|
||||||||
Continuing operations - basic
|
$
|
0.00
|
|
|
$
|
(0.67
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.53
|
)
|
Discontinued operations - basic
|
$
|
0.00
|
|
|
$
|
0.26
|
|
|
$
|
0.00
|
|
|
$
|
0.42
|
|
Net income (loss) per share - basic
|
$
|
0.00
|
|
|
$
|
(0.41
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.11
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to WSC – diluted
|
|
|
|
|
|
|
|
|
|||||||
Continuing operations - diluted
|
$
|
0.00
|
|
|
$
|
(0.67
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.53
|
)
|
Discontinued operations - diluted
|
$
|
0.00
|
|
|
$
|
0.26
|
|
|
$
|
0.00
|
|
|
$
|
0.42
|
|
Net income (loss) per share - diluted
|
$
|
0.00
|
|
|
$
|
(0.41
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.11
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
78,432,274
|
|
|
14,545,833
|
|
|
77,814,456
|
|
|
14,545,833
|
|
||||
Diluted
|
82,180,086
|
|
|
14,545,833
|
|
|
77,814,456
|
|
|
14,545,833
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss)
|
$
|
379
|
|
|
$
|
(5,896
|
)
|
|
$
|
(6,456
|
)
|
|
$
|
(16,075
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment, net of income tax (benefit) expense of ($93), $462, ($241) and $618 for the three and six months ended June 30, 2018 and 2017, respectively
|
(2,619
|
)
|
|
3,102
|
|
|
(2,380
|
)
|
|
5,783
|
|
||||
Comprehensive loss
|
(2,240
|
)
|
|
(2,794
|
)
|
|
(8,836
|
)
|
|
(10,292
|
)
|
||||
Comprehensive loss attributable to non-controlling interest
|
(150
|
)
|
|
—
|
|
|
(774
|
)
|
|
—
|
|
||||
Total comprehensive loss attributable to WSC
|
$
|
(2,090
|
)
|
|
$
|
(2,794
|
)
|
|
$
|
(8,062
|
)
|
|
$
|
(10,292
|
)
|
|
Six Months Ended June 30,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Operating Activities:
|
|
|
|
||||
Net loss
|
$
|
(6,456
|
)
|
|
$
|
(16,075
|
)
|
Adjustments for non-cash items:
|
|
|
|
||||
Depreciation and amortization
|
51,941
|
|
|
53,075
|
|
||
Provision for doubtful accounts
|
2,282
|
|
|
2,276
|
|
||
Gain on sale of rental equipment and other property, plant and equipment
|
(7,429
|
)
|
|
(4,237
|
)
|
||
Interest receivable capitalized into notes due from affiliates
|
—
|
|
|
(3,915
|
)
|
||
Amortization of debt discounts and debt issuance costs
|
2,522
|
|
|
7,326
|
|
||
Share based compensation expense
|
1,175
|
|
|
—
|
|
||
Deferred income tax benefit
|
(7,066
|
)
|
|
(5,073
|
)
|
||
Unrealized currency losses (gains)
|
1,378
|
|
|
(8,356
|
)
|
||
Changes in operating assets and liabilities, net of effect of businesses acquired:
|
|
|
|
||||
Trade receivables
|
(11,624
|
)
|
|
(3,847
|
)
|
||
Inventories
|
442
|
|
|
610
|
|
||
Prepaid and other assets
|
(282
|
)
|
|
(7,715
|
)
|
||
Accrued interest receivable
|
—
|
|
|
(3,214
|
)
|
||
Accrued interest payable
|
(909
|
)
|
|
(1,524
|
)
|
||
Accounts payable and other accrued liabilities
|
(11,841
|
)
|
|
14,099
|
|
||
Deferred revenue and customer deposits
|
4,667
|
|
|
694
|
|
||
Net cash provided by operating activities
|
18,800
|
|
|
24,124
|
|
||
Investing Activities:
|
|
|
|
||||
Acquisition of a business
|
(24,006
|
)
|
|
—
|
|
||
Proceeds from sale of rental equipment
|
12,033
|
|
|
10,622
|
|
||
Purchase of rental equipment and refurbishments
|
(64,763
|
)
|
|
(54,223
|
)
|
||
Lending on notes due from affiliates
|
—
|
|
|
(67,939
|
)
|
||
Repayments on notes due from affiliates
|
—
|
|
|
2,151
|
|
||
Proceeds from the sale of property, plant and equipment
|
681
|
|
|
11
|
|
||
Purchase of property, plant and equipment
|
(1,616
|
)
|
|
(2,015
|
)
|
||
Net cash used in investing activities
|
(77,671
|
)
|
|
(111,393
|
)
|
||
Financing Activities:
|
|
|
|
||||
Receipts from borrowings
|
61,792
|
|
|
222,129
|
|
||
Receipts on borrowings from notes due to affiliates
|
—
|
|
|
75,000
|
|
||
Payment of financing costs
|
—
|
|
|
(10,919
|
)
|
||
Repayment of borrowings
|
(3,770
|
)
|
|
(198,580
|
)
|
||
Principal payments on capital lease obligations
|
(59
|
)
|
|
(785
|
)
|
||
Net cash provided by financing activities
|
57,963
|
|
|
86,845
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(96
|
)
|
|
254
|
|
||
Net change in cash and cash equivalents
|
(1,004
|
)
|
|
(170
|
)
|
||
Cash and cash equivalents at the beginning of the period
|
9,185
|
|
|
6,162
|
|
||
Cash and cash equivalents at the end of the period
|
$
|
8,181
|
|
|
$
|
5,992
|
|
|
|
|
|
||||
Supplemental Cash Flow Information:
|
|
|
|
||||
Interest paid
|
$
|
22,004
|
|
|
$
|
50,404
|
|
Income taxes paid, net of refunds received
|
$
|
1,000
|
|
|
$
|
(437
|
)
|
Capital expenditures accrued or payable
|
$
|
16,828
|
|
|
$
|
8,992
|
|
(in thousands)
|
Six Months Ended
June 30, 2017 |
||
WSC historic revenues (a)
|
$
|
209,398
|
|
Acton historic revenues
|
47,388
|
|
|
Pro-forma revenues
|
$
|
256,786
|
|
|
|
||
WSC historic pretax loss (a)
|
$
|
(32,258
|
)
|
Acton historic pretax loss
|
(275
|
)
|
|
Pro-forma pretax loss
|
(32,533
|
)
|
|
Pro-forma adjustments to combined pretax loss:
|
|
||
Impact of fair value mark-ups/useful life changes on depreciation (b)
|
(1,272
|
)
|
|
Intangible asset amortization (c)
|
(354
|
)
|
|
Interest expense (d)
|
(5,431
|
)
|
|
Elimination of historic Acton interest (e)
|
2,514
|
|
|
Pro-forma pretax loss
|
(37,076
|
)
|
|
Income tax benefit
|
(11,652
|
)
|
|
Pro-forma loss from continuing operations
|
(25,424
|
)
|
|
Income from discontinued operations
|
6,045
|
|
|
Pro-forma net loss
|
$
|
(19,379
|
)
|
(in thousands)
|
Three Months Ended
June 30, 2017 |
|
Six Months Ended
June 30, 2017 |
||||
Remote accommodations revenue
|
$
|
31,487
|
|
|
$
|
58,565
|
|
Remote accommodations costs of leasing and services
|
13,163
|
|
|
24,738
|
|
||
Depreciation of rental equipment
|
6,119
|
|
|
12,542
|
|
||
Gross profit
|
12,205
|
|
|
21,285
|
|
||
Selling, general and administrative expenses
|
3,499
|
|
|
6,531
|
|
||
Other depreciation and amortization
|
1,257
|
|
|
2,508
|
|
||
Restructuring costs
|
380
|
|
|
770
|
|
||
Other income, net
|
(37
|
)
|
|
(40
|
)
|
||
Operating profit
|
7,106
|
|
|
11,516
|
|
||
Interest expense
|
739
|
|
|
1,420
|
|
||
Income from discontinued operations, before income tax
|
6,367
|
|
|
10,096
|
|
||
Income tax expense
|
2,527
|
|
|
4,051
|
|
||
Income from discontinued operations, net of tax
|
$
|
3,840
|
|
|
$
|
6,045
|
|
(in thousands)
|
Three Months Ended
June 30, 2017 |
|
Six Months Ended
June 30, 2017 |
||||
Remote accommodations revenue:
|
|
|
|
||||
Lease revenue
|
$
|
14,613
|
|
|
$
|
28,577
|
|
Service revenue
|
16,874
|
|
|
29,988
|
|
||
Total remote accommodations revenue
|
$
|
31,487
|
|
|
$
|
58,565
|
|
|
|
|
|
||||
Remote accommodation costs:
|
|
|
|
||||
Cost of leases
|
$
|
2,023
|
|
|
$
|
4,200
|
|
Cost of services
|
11,140
|
|
|
20,538
|
|
||
Total remote accommodations costs
|
$
|
13,163
|
|
|
$
|
24,738
|
|
(in thousands)
|
June 30, 2017
|
||
Depreciation and amortization
|
$
|
15,050
|
|
Capital expenditures
|
$
|
4,213
|
|
(in thousands)
|
June 30, 2018
|
|
December 31, 2017
|
||||
Modular units and portable storage
|
$
|
1,445,769
|
|
|
$
|
1,385,901
|
|
Value added products and services
|
66,834
|
|
|
59,566
|
|
||
Total rental equipment
|
1,512,603
|
|
|
1,445,467
|
|
||
Less: accumulated depreciation
|
(437,563
|
)
|
|
(405,321
|
)
|
||
Rental equipment, net
|
$
|
1,075,040
|
|
|
$
|
1,040,146
|
|
(in thousands)
|
Modular – US
|
|
Modular – Other
North America |
|
Total
|
||||||
Balance at January 1, 2017
|
$
|
—
|
|
|
$
|
56,811
|
|
|
$
|
56,811
|
|
Acquisition of a business
|
28,609
|
|
|
—
|
|
|
28,609
|
|
|||
Effects of movements in foreign exchange rates
|
—
|
|
|
3,932
|
|
|
3,932
|
|
|||
Impairment losses
|
—
|
|
|
(60,743
|
)
|
|
(60,743
|
)
|
|||
Balance at December 31, 2017
|
28,609
|
|
|
—
|
|
|
28,609
|
|
|||
Acquisition of a business
|
3,406
|
|
|
—
|
|
|
3,406
|
|
|||
Changes to preliminary purchase price allocations
|
1,555
|
|
|
—
|
|
|
1,555
|
|
|||
Balance at June 30, 2018
|
$
|
33,570
|
|
|
$
|
—
|
|
|
$
|
33,570
|
|
(in thousands, except rates)
|
Interest rate
|
|
Year of maturity
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Senior secured notes
|
7.875%
|
|
2022
|
|
$
|
291,456
|
|
|
$
|
290,687
|
|
US ABL Facility
|
Varies
|
|
2022
|
|
356,759
|
|
|
297,323
|
|
||
Canadian ABL Facility (a)
|
Varies
|
|
2022
|
|
—
|
|
|
—
|
|
||
Capital lease and other financing obligations
|
|
|
|
|
38,309
|
|
|
38,736
|
|
||
Total debt
|
|
|
|
|
686,524
|
|
|
626,746
|
|
||
Less: current portion of long-term debt
|
|
|
|
|
(1,883
|
)
|
|
(1,881
|
)
|
||
Total long-term debt
|
|
|
|
|
$
|
684,641
|
|
|
$
|
624,865
|
|
(a)
|
At
June 30, 2018
, the Company had
no
outstanding borrowings on the Canadian ABL Facility and
$1.5 million
of related debt issuance costs. As there were
no
principal borrowings outstanding on the Canadian ABL Facility as of
December 31, 2017
,
$1.8 million
of debt issuance costs related to that facility are included in other non-current assets on the condensed consolidated balance sheet.
|
•
|
85%
of the net book value of the US Borrowers’ eligible accounts receivable, plus
|
•
|
the lesser of (i)
95%
of the net book value of the US Borrowers’ eligible rental equipment and (ii)
85%
of the net orderly liquidation value of the US Borrowers’ eligible rental equipment, minus
|
•
|
customary reserves.
|
•
|
85%
of the net book value of the Canadian Borrowers’ eligible accounts receivable, plus
|
•
|
the lesser of (i)
95%
of the net book value of the Canadian Borrowers’ eligible rental equipment and (ii)
85%
of the net orderly liquidation value of the Canadian Borrowers’ eligible rental equipment, plus
|
•
|
portions of the US Borrowing Base that have been allocated to the Canadian Borrowing Base, minus
|
•
|
customary reserves.
|
Year
|
Redemption Price
|
|
2019
|
103.938
|
%
|
2020
|
101.969
|
%
|
2021 and thereafter
|
100.000
|
%
|
(in thousands)
|
|
Foreign Currency Translation Adjustment
|
|
Total
|
||||
Balance at December 31, 2017
|
|
$
|
(49,497
|
)
|
|
$
|
(49,497
|
)
|
Total other comprehensive loss
|
|
(2,380
|
)
|
|
(2,380
|
)
|
||
Reclassifications to accumulated deficit
(a)
|
|
(2,540
|
)
|
|
(2,540
|
)
|
||
Balance at June 30, 2018
|
|
$
|
(54,417
|
)
|
|
$
|
(54,417
|
)
|
(in thousands)
|
|
Foreign Currency Translation Adjustment
|
|
Total
|
||||
Balance at December 31, 2016
|
|
$
|
(56,928
|
)
|
|
$
|
(56,928
|
)
|
Total other comprehensive loss
|
|
5,783
|
|
|
5,783
|
|
||
Balance at June 30, 2017
|
|
$
|
(51,145
|
)
|
|
$
|
(51,145
|
)
|
(in thousands)
|
|
Total
|
||
Balance at December 31, 2017
|
|
$
|
48,931
|
|
Net loss attributable to non-controlling interest
|
|
(505
|
)
|
|
Other comprehensive loss
|
|
(269
|
)
|
|
Balance at June 30, 2018
|
|
$
|
48,157
|
|
Level 1 -
|
Observable inputs such as quoted prices in active markets for identical assets or liabilities;
|
Level 2 -
|
Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and
|
Level 3 -
|
Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Balance at beginning of the period
|
$
|
755
|
|
|
$
|
1,726
|
|
|
$
|
227
|
|
|
$
|
1,793
|
|
Charges during the period
|
449
|
|
|
684
|
|
|
1,077
|
|
|
968
|
|
||||
Cash payments during the period
|
(234
|
)
|
|
(286
|
)
|
|
(330
|
)
|
|
(639
|
)
|
||||
Currency
|
(3
|
)
|
|
6
|
|
|
(7
|
)
|
|
8
|
|
||||
Balance at end of period
|
$
|
967
|
|
|
$
|
2,130
|
|
|
$
|
967
|
|
|
$
|
2,130
|
|
|
Number of Shares
|
|
Weighted-Average Grant Date Fair Value
|
|||
Balance, December 31, 2017
|
—
|
|
|
$
|
—
|
|
Granted
|
27,675
|
|
|
13.60
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Balance, June 30, 2018
|
27,675
|
|
|
$
|
13.60
|
|
|
Number of Shares
|
|
Weighted-Average Grant Date Fair Value
|
|||
Balance, December 31, 2017
|
—
|
|
|
$
|
—
|
|
Granted
|
921,730
|
|
|
13.60
|
|
|
Forfeited
|
(35,050
|
)
|
|
13.60
|
|
|
Balance, June 30, 2018
|
886,680
|
|
|
$
|
13.60
|
|
|
Number of Options
|
|
Weighted-Average Exercise Price per Share ($)
|
|||
Outstanding options, December 31, 2017
|
—
|
|
|
$
|
—
|
|
Granted
|
589,257
|
|
|
13.60
|
|
|
Exercised
|
—
|
|
|
—
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Outstanding options, June 30, 2018
|
589,257
|
|
|
$
|
13.60
|
|
Fully vested and exercisable options, end of period
|
—
|
|
|
$
|
—
|
|
|
Assumptions
|
||
Expected volatility
|
36
|
%
|
|
Expected dividend yield
|
—
|
|
|
Risk-free interest rate
|
2.73
|
%
|
|
Expected term (in years)
|
6.25
|
|
|
Exercise price
|
$
|
13.60
|
|
Weighted-average grant date fair value
|
$
|
5.51
|
|
|
Three Months Ended June 30, 2018
|
||||||||||
(in thousands)
|
Modular - US
|
|
Modular - Other North America
|
|
Total
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Leasing and services revenue:
|
|
|
|
|
|
||||||
Modular leasing
|
$
|
90,965
|
|
|
$
|
10,284
|
|
|
$
|
101,249
|
|
Modular delivery and installation
|
27,390
|
|
|
4,023
|
|
|
31,413
|
|
|||
Sales:
|
|
|
|
|
|
||||||
New units
|
4,149
|
|
|
1,087
|
|
|
5,236
|
|
|||
Rental units
|
2,309
|
|
|
126
|
|
|
2,435
|
|
|||
Total Revenues
|
$
|
124,813
|
|
|
$
|
15,520
|
|
|
$
|
140,333
|
|
|
|
|
|
|
|
||||||
Costs:
|
|
|
|
|
|
||||||
Cost of leasing and services:
|
|
|
|
|
|
||||||
Modular leasing
|
$
|
24,505
|
|
|
$
|
2,624
|
|
|
$
|
27,129
|
|
Modular delivery and installation
|
26,310
|
|
|
3,817
|
|
|
30,127
|
|
|||
Cost of sales:
|
|
|
|
|
|
||||||
New units
|
2,876
|
|
|
828
|
|
|
3,704
|
|
|||
Rental units
|
1,164
|
|
|
99
|
|
|
1,263
|
|
|||
Depreciation of rental equipment
|
20,217
|
|
|
3,253
|
|
|
23,470
|
|
|||
Gross profit
|
$
|
49,741
|
|
|
$
|
4,899
|
|
|
$
|
54,640
|
|
Adjusted EBITDA
|
$
|
38,104
|
|
|
$
|
3,812
|
|
|
$
|
41,916
|
|
Other selected data:
|
|
|
|
|
|
||||||
Selling, general and administrative expense
|
$
|
43,325
|
|
|
$
|
4,409
|
|
|
$
|
47,734
|
|
Other depreciation and amortization
|
$
|
1,354
|
|
|
$
|
216
|
|
|
$
|
1,570
|
|
Capital expenditures for rental fleet
|
$
|
30,931
|
|
|
$
|
1,748
|
|
|
$
|
32,679
|
|
|
Three Months Ended June 30, 2017
|
||||||||||||||
(in thousands)
|
Modular - US
|
|
Modular - Other North America
|
|
Corporate & Other
|
|
Total
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Leasing and services revenue:
|
|
|
|
|
|
|
|
||||||||
Modular leasing
|
$
|
64,854
|
|
|
$
|
8,242
|
|
|
$
|
(142
|
)
|
|
$
|
72,954
|
|
Modular delivery and installation
|
20,970
|
|
|
1,979
|
|
|
—
|
|
|
22,949
|
|
||||
Sales:
|
|
|
|
|
|
|
|
||||||||
New units
|
8,550
|
|
|
846
|
|
|
—
|
|
|
9,396
|
|
||||
Rental units
|
3,835
|
|
|
943
|
|
|
—
|
|
|
4,778
|
|
||||
Total Revenues
|
$
|
98,209
|
|
|
$
|
12,010
|
|
|
$
|
(142
|
)
|
|
$
|
110,077
|
|
|
|
|
|
|
|
|
|
||||||||
Costs:
|
|
|
|
|
|
|
|
||||||||
Cost of leasing and services:
|
|
|
|
|
|
|
|
||||||||
Modular leasing
|
$
|
19,338
|
|
|
$
|
2,002
|
|
|
$
|
—
|
|
|
$
|
21,340
|
|
Modular delivery and installation
|
20,393
|
|
|
1,946
|
|
|
—
|
|
|
22,339
|
|
||||
Cost of sales:
|
|
|
|
|
|
|
|
||||||||
New units
|
6,072
|
|
|
696
|
|
|
(2
|
)
|
|
6,766
|
|
||||
Rental units
|
1,923
|
|
|
652
|
|
|
—
|
|
|
2,575
|
|
||||
Depreciation of rental equipment
|
14,529
|
|
|
2,945
|
|
|
—
|
|
|
17,474
|
|
||||
Gross profit (loss)
|
$
|
35,954
|
|
|
$
|
3,769
|
|
|
$
|
(140
|
)
|
|
$
|
39,583
|
|
Adjusted EBITDA
|
$
|
26,329
|
|
|
$
|
2,506
|
|
|
$
|
(2,588
|
)
|
|
$
|
26,247
|
|
Other selected data:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expense
|
$
|
24,181
|
|
|
$
|
4,223
|
|
|
$
|
3,248
|
|
|
$
|
31,652
|
|
Other depreciation and amortization
|
$
|
1,301
|
|
|
$
|
244
|
|
|
$
|
345
|
|
|
$
|
1,890
|
|
Capital expenditures for rental fleet
|
$
|
25,909
|
|
|
$
|
1,716
|
|
|
$
|
—
|
|
|
$
|
27,625
|
|
|
Six Months Ended June 30, 2018
|
||||||||||
(in thousands)
|
Modular - US
|
|
Modular - Other North America
|
|
Total
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Leasing and services revenue:
|
|
|
|
|
|
||||||
Modular leasing
|
$
|
178,913
|
|
|
$
|
19,598
|
|
|
$
|
198,511
|
|
Modular delivery and installation
|
51,360
|
|
|
6,303
|
|
|
57,663
|
|
|||
Sales:
|
|
|
|
|
|
||||||
New units
|
10,964
|
|
|
1,700
|
|
|
12,664
|
|
|||
Rental units
|
5,663
|
|
|
583
|
|
|
6,246
|
|
|||
Total Revenues
|
$
|
246,900
|
|
|
$
|
28,184
|
|
|
$
|
275,084
|
|
|
|
|
|
|
|
||||||
Costs:
|
|
|
|
|
|
||||||
Cost of leasing and services:
|
|
|
|
|
|
||||||
Modular leasing
|
$
|
49,562
|
|
|
$
|
4,729
|
|
|
$
|
54,291
|
|
Modular delivery and installation
|
49,250
|
|
|
6,398
|
|
|
55,648
|
|
|||
Cost of sales:
|
|
|
|
|
—
|
|
|||||
New units
|
7,442
|
|
|
1,249
|
|
|
8,691
|
|
|||
Rental units
|
3,193
|
|
|
385
|
|
|
3,578
|
|
|||
Depreciation of rental equipment
|
40,904
|
|
|
6,411
|
|
|
47,315
|
|
|||
Gross profit
|
$
|
96,549
|
|
|
$
|
9,012
|
|
|
$
|
105,561
|
|
Adjusted EBITDA
|
$
|
70,716
|
|
|
$
|
6,692
|
|
|
$
|
77,408
|
|
Other selected data:
|
|
|
|
|
|
||||||
Selling, general and administrative expense
|
$
|
84,146
|
|
|
$
|
8,802
|
|
|
$
|
92,948
|
|
Other depreciation and amortization
|
$
|
3,559
|
|
|
$
|
447
|
|
|
$
|
4,006
|
|
Capital expenditures for rental fleet
|
$
|
61,455
|
|
|
$
|
3,308
|
|
|
$
|
64,763
|
|
|
Six Months Ended June 30, 2017
|
||||||||||||||
(in thousands)
|
Modular - US
|
|
Modular - Other North America
|
|
Corporate & Other
|
|
Total
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Leasing and services revenue:
|
|
|
|
|
|
|
|
||||||||
Modular leasing
|
$
|
126,032
|
|
|
$
|
16,204
|
|
|
$
|
(295
|
)
|
|
$
|
141,941
|
|
Modular delivery and installation
|
38,324
|
|
|
3,629
|
|
|
—
|
|
|
41,953
|
|
||||
Sales:
|
|
|
|
|
|
|
|
||||||||
New units
|
12,556
|
|
|
2,326
|
|
|
—
|
|
|
14,882
|
|
||||
Rental units
|
8,712
|
|
|
1,910
|
|
|
—
|
|
|
10,622
|
|
||||
Total Revenues
|
$
|
185,624
|
|
|
$
|
24,069
|
|
|
$
|
(295
|
)
|
|
$
|
209,398
|
|
|
|
|
|
|
|
|
|
||||||||
Costs:
|
|
|
|
|
|
|
|
||||||||
Cost of leasing and services:
|
|
|
|
|
|
|
|
||||||||
Modular leasing
|
$
|
36,713
|
|
|
$
|
3,729
|
|
|
$
|
—
|
|
|
$
|
40,442
|
|
Modular delivery and installation
|
37,067
|
|
|
3,405
|
|
|
—
|
|
|
40,472
|
|
||||
Cost of sales:
|
|
|
|
|
|
|
—
|
|
|||||||
New units
|
8,685
|
|
|
1,813
|
|
|
(12
|
)
|
|
10,486
|
|
||||
Rental units
|
5,036
|
|
|
1,247
|
|
|
—
|
|
|
6,283
|
|
||||
Depreciation of rental equipment
|
28,354
|
|
|
5,840
|
|
|
—
|
|
|
34,194
|
|
||||
Gross profit (loss)
|
$
|
69,769
|
|
|
$
|
8,035
|
|
|
$
|
(283
|
)
|
|
$
|
77,521
|
|
Adjusted EBITDA
|
$
|
50,012
|
|
|
$
|
5,625
|
|
|
$
|
(7,444
|
)
|
|
$
|
48,193
|
|
Other selected data:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expense
|
$
|
48,127
|
|
|
$
|
8,277
|
|
|
$
|
8,009
|
|
|
$
|
64,413
|
|
Other depreciation and amortization
|
$
|
2,639
|
|
|
$
|
491
|
|
|
$
|
701
|
|
|
$
|
3,831
|
|
Capital expenditures for rental fleet
|
$
|
47,958
|
|
|
$
|
2,344
|
|
|
$
|
—
|
|
|
$
|
50,302
|
|
|
Three Months Ended June 30, 2018
|
||||||||||
(in thousands)
|
Modular - US
|
|
Modular - Other North America
|
|
Total
|
||||||
Loss from continuing operations before income taxes
|
$
|
(5,533
|
)
|
|
$
|
(733
|
)
|
|
$
|
(6,266
|
)
|
Interest expense, net
|
11,663
|
|
|
492
|
|
|
12,155
|
|
|||
Depreciation and amortization
|
21,571
|
|
|
3,469
|
|
|
25,040
|
|
|||
Currency losses, net
|
114
|
|
|
458
|
|
|
572
|
|
|||
Restructuring costs
|
449
|
|
|
—
|
|
|
449
|
|
|||
Integration costs
|
4,785
|
|
|
—
|
|
|
4,785
|
|
|||
Stock compensation expense
|
1,054
|
|
|
—
|
|
|
1,054
|
|
|||
Transaction fees
|
4,049
|
|
|
69
|
|
|
4,118
|
|
|||
Other (income) expense
|
(48
|
)
|
|
57
|
|
|
9
|
|
|||
Adjusted EBITDA
|
$
|
38,104
|
|
|
$
|
3,812
|
|
|
$
|
41,916
|
|
|
Three Months Ended June 30, 2017
|
||||||||||||||
(in thousands)
|
Modular - US
|
|
Modular - Other North America
|
|
Corporate & Other
|
|
Total
|
||||||||
Loss from continuing operations before income taxes
|
$
|
320
|
|
|
$
|
(1,442
|
)
|
|
$
|
(13,883
|
)
|
|
$
|
(15,005
|
)
|
Interest expense, net
|
15,953
|
|
|
1,038
|
|
|
9,407
|
|
|
26,398
|
|
||||
Depreciation and amortization
|
15,830
|
|
|
3,189
|
|
|
345
|
|
|
19,364
|
|
||||
Currency gains, net
|
(5,800
|
)
|
|
(294
|
)
|
|
(403
|
)
|
|
(6,497
|
)
|
||||
Restructuring costs
|
—
|
|
|
—
|
|
|
684
|
|
|
684
|
|
||||
Transaction fees
|
46
|
|
|
—
|
|
|
730
|
|
|
776
|
|
||||
Other expense
|
(20
|
)
|
|
15
|
|
|
532
|
|
|
527
|
|
||||
Adjusted EBITDA
|
$
|
26,329
|
|
|
$
|
2,506
|
|
|
$
|
(2,588
|
)
|
|
$
|
26,247
|
|
|
Six Months Ended June 30, 2018
|
||||||||||
(in thousands)
|
Modular - US
|
|
Modular - Other North America
|
|
Total
|
||||||
Loss from continuing operations before income taxes
|
$
|
(10,841
|
)
|
|
$
|
(2,680
|
)
|
|
$
|
(13,521
|
)
|
Interest expense, net
|
22,823
|
|
|
1,051
|
|
|
23,874
|
|
|||
Depreciation and amortization
|
44,463
|
|
|
6,858
|
|
|
51,321
|
|
|||
Currency losses, net
|
271
|
|
|
1,325
|
|
|
1,596
|
|
|||
Restructuring costs
|
1,067
|
|
|
10
|
|
|
1,077
|
|
|||
Integration costs
|
7,415
|
|
|
—
|
|
|
7,415
|
|
|||
Stock compensation expense
|
1,175
|
|
|
—
|
|
|
1,175
|
|
|||
Transaction fees
|
4,049
|
|
|
69
|
|
|
4,118
|
|
|||
Other expense
|
294
|
|
|
59
|
|
|
353
|
|
|||
Adjusted EBITDA
|
$
|
70,716
|
|
|
$
|
6,692
|
|
|
$
|
77,408
|
|
|
Six Months Ended June 30, 2017
|
||||||||||||||
(in thousands)
|
Modular - US
|
|
Modular - Other North America
|
|
Corporate & Other
|
|
Total
|
||||||||
Loss from continuing operations before income taxes
|
$
|
(5,210
|
)
|
|
$
|
(2,458
|
)
|
|
$
|
(24,590
|
)
|
|
$
|
(32,258
|
)
|
Interest expense, net
|
31,512
|
|
|
2,216
|
|
|
14,747
|
|
|
48,475
|
|
||||
Depreciation and amortization
|
30,993
|
|
|
6,331
|
|
|
701
|
|
|
38,025
|
|
||||
Currency gains, net
|
(7,399
|
)
|
|
(481
|
)
|
|
(619
|
)
|
|
(8,499
|
)
|
||||
Restructuring costs
|
—
|
|
|
—
|
|
|
968
|
|
|
968
|
|
||||
Transaction fees
|
46
|
|
|
—
|
|
|
816
|
|
|
862
|
|
||||
Other expense
|
70
|
|
|
17
|
|
|
533
|
|
|
620
|
|
||||
Adjusted EBITDA
|
$
|
50,012
|
|
|
$
|
5,625
|
|
|
$
|
(7,444
|
)
|
|
$
|
48,193
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands, except per share numbers)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
379
|
|
|
$
|
(9,736
|
)
|
|
$
|
(6,456
|
)
|
|
$
|
(22,120
|
)
|
Income from discontinued operations, net of tax
|
—
|
|
|
3,840
|
|
|
—
|
|
|
6,045
|
|
||||
Net income (loss)
|
379
|
|
|
(5,896
|
)
|
|
(6,456
|
)
|
|
(16,075
|
)
|
||||
Net income (loss) attributable to non-controlling interest, net of tax
|
143
|
|
|
—
|
|
|
(505
|
)
|
|
—
|
|
||||
Total income (loss) attributable to WSC
|
$
|
236
|
|
|
$
|
(5,896
|
)
|
|
$
|
(5,951
|
)
|
|
$
|
(16,075
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator
|
|
|
|
|
|
|
|
||||||||
Average shares outstanding - basic
|
78,432,274
|
|
|
14,545,833
|
|
|
77,814,456
|
|
|
14,545,833
|
|
||||
Average effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Warrants
|
3,745,030
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Restricted stock awards
|
2,782
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Average shares outstanding - diluted
|
$
|
82,180,086
|
|
|
$
|
14,545,833
|
|
|
$
|
77,814,456
|
|
|
$
|
14,545,833
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) per share - basic
|
|
|
|
|
|
|
|
||||||||
Continuing operations - basic
|
$
|
0.00
|
|
|
$
|
(0.67
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.53
|
)
|
Discontinued operations - basic
|
$
|
0.00
|
|
|
$
|
0.26
|
|
|
$
|
0.00
|
|
|
$
|
0.42
|
|
Net income (loss) per share - basic
|
$
|
0.00
|
|
|
$
|
(0.41
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.11
|
)
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) per share - diluted
|
|
|
|
|
|
|
|
||||||||
Continuing operations - basic
|
$
|
0.00
|
|
|
$
|
(0.67
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.53
|
)
|
Discontinued operations - basic
|
$
|
0.00
|
|
|
$
|
0.26
|
|
|
$
|
0.00
|
|
|
$
|
0.42
|
|
Net income (loss) per share - basic
|
$
|
0.00
|
|
|
$
|
(0.41
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(1.11
|
)
|
(in thousands)
|
Financial statement line Item
|
June 30, 2018
|
|
December 31, 2017
|
||||
Receivables due from affiliates
|
Prepaid expenses and other current assets
|
$
|
180
|
|
|
$
|
2,863
|
|
Amounts due to affiliates
|
Accrued liabilities
|
(873
|
)
|
|
(1,235
|
)
|
||
|
Total related party liabilities, net
|
$
|
(693
|
)
|
|
$
|
1,628
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands)
|
Financial statement line item
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Leasing revenue from related parties
|
Modular leasing revenue
|
$
|
(233
|
)
|
|
$
|
—
|
|
|
$
|
(525
|
)
|
|
$
|
—
|
|
Management fees and recharge income on transactions with affiliates
|
Selling, general & administrative expenses
|
—
|
|
|
1,502
|
|
|
—
|
|
|
151
|
|
||||
Interest income on notes due from affiliates
|
Interest income
|
—
|
|
|
(3,509
|
)
|
|
—
|
|
|
(6,093
|
)
|
||||
Interest expense on notes due to affiliates
|
Interest expense
|
—
|
|
|
15,990
|
|
|
—
|
|
|
30,727
|
|
||||
|
Total related party (income) expense, net
|
$
|
(233
|
)
|
|
$
|
13,983
|
|
|
$
|
(525
|
)
|
|
$
|
24,785
|
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Upsized our revolving credit agreement to $1.35 billion (expandable to $1.8 billion through an accordion feature) and obtained the amendments required to finance the acquisition and to give effect to our greater scale thereafter.
|
•
|
Completed $300.0 million private placement of 6.875% senior secured notes due 2023.
|
•
|
Completed $200.0 million private placement of senior unsecured notes due 2023.
|
•
|
Raised $128.0 million of gross proceeds from an underwritten common stock offering, subject to the underwriters' right to purchase an additional 1.2 million shares (which could raise an additional $19.2 million of gross proceeds).
|
•
|
Increased
total revenues by
$30.2
million, or
27.4%
as compared to the same period in
2017
, driven by a
38.2%
increase in our core leasing and services revenues from both organic growth, and due to the impact of the Acton and Tyson acquisitions discussed in Note
2
of our unaudited condensed consolidated financial statements. The increase in our core leasing and services business was partially offset by decreases of
44.7%
and
48.9%
in our new and rental unit sales.
|
•
|
On a pro-forma basis, including results of Williams Scotsman, Acton, and Tyson for all periods presented, core leasing and services revenues increased $12.8 million, or 10.7% in the second quarter as compared to the same period in 2017.
|
•
|
Increased
the Modular - US segment revenues which represents
89.0%
of revenue for the
three months ended June 30, 2018
, by
$26.6
million, or
27.1%
, as compared to the same period in
2017
, through:
|
–
|
Average modular space monthly rental rate growth of
2.6%
to $
549
through increases both in the price of our units, as well as increased VAPS pricing and penetration. Organic increases on the Williams Scotsman legacy fleet were partially offset by lower rates on units acquired from Acton and Tyson; and
|
–
|
Increased average modular space units on rent by
13,217
units, or
36.9%
, primarily due to the Acton and Tyson acquisitions; and
|
–
|
Average modular space monthly utilization increased 30 basis points (“bps”) to
72.2%
for the
three months ended June 30, 2018
, as compared to the three months ended March 31, 2018, though decreased by
160
bps during the quarter as compared to the
three months ended June 30, 2017
, as a result of lower utilization on acquired fleet from Acton and Tyson; and
|
–
|
On a pro-forma basis, including results of Williams Scotsman, Acton, and Tyson for all periods presented, core leasing and services revenues in the Modular - US segment increased $8.7 million, or 8.0%, primarily reflecting a 1.6% increase in average modular space units on rent and by a 9.8% increase in average modular space monthly rental rate. Total pro-forma revenues in the Modular - US segment decreased $0.6 million, or 0.5% as compared to the same period in 2017 driven by a $9.3 million, or 58.9% decrease year over year in new and rental unit sales as a result of lower volumes of sales opportunities and increased focus on our higher margin modular leasing business.
|
•
|
Increased
the Modular - Other North America segment revenues which represented
11.0%
of revenues for the three months ended
June 30, 2018
, by
$3.5
million, or
29.2%
as compared to the same period in
2017
. Increases were driven primarily by:
|
–
|
Average modular space monthly rental rate increased
7.3%
to
$573
|
–
|
Average modular space units on rent increased by
624
units, or
12.7%
as compared to the same period in
2017
|
–
|
Average modular space monthly utilization increased by
710
bps as compared to the same period in 2017 to
57.1%
|
•
|
Generated combined Adjusted EBITDA of
$41.9
million between the Modular - US Segment and the Modular - Other North America Segment, representing an increase of
$13.1
million or
45.5%
as compared to the same period in
2017
, which includes the impact of the Acton and Tyson acquisitions discussed in Note
2
of the unaudited condensed consolidated financial statements.
|
|
Three Months Ended June 30,
|
2018 vs. 2017 $ Change
|
|||||||||
(in thousands)
|
2018
|
|
2017
|
|
|||||||
Revenues:
|
|
|
|
|
|
||||||
Leasing and services revenue:
|
|
|
|
|
|
||||||
Modular leasing
|
$
|
101,249
|
|
|
$
|
72,954
|
|
|
$
|
28,295
|
|
Modular delivery and installation
|
31,413
|
|
|
22,949
|
|
|
8,464
|
|
|||
Sales:
|
|
|
|
|
|
||||||
New units
|
5,236
|
|
|
9,396
|
|
|
(4,160
|
)
|
|||
Rental units
|
2,435
|
|
|
4,778
|
|
|
(2,343
|
)
|
|||
Total revenues
|
140,333
|
|
|
110,077
|
|
|
30,256
|
|
|||
Costs:
|
|
|
|
|
|
||||||
Costs of leasing and services:
|
|
|
|
|
|
||||||
Modular leasing
|
27,129
|
|
|
21,340
|
|
|
5,789
|
|
|||
Modular delivery and installation
|
30,127
|
|
|
22,339
|
|
|
7,788
|
|
|||
Costs of sales:
|
|
|
|
|
|
||||||
New units
|
3,704
|
|
|
6,766
|
|
|
(3,062
|
)
|
|||
Rental units
|
1,263
|
|
|
2,575
|
|
|
(1,312
|
)
|
|||
Depreciation of rental equipment
|
23,470
|
|
|
17,474
|
|
|
5,996
|
|
|||
Gross profit
|
54,640
|
|
|
39,583
|
|
|
15,057
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
47,734
|
|
|
31,652
|
|
|
16,082
|
|
|||
Other depreciation and amortization
|
1,570
|
|
|
1,890
|
|
|
(320
|
)
|
|||
Restructuring costs
|
449
|
|
|
684
|
|
|
(235
|
)
|
|||
Currency losses (gains), net
|
572
|
|
|
(6,497
|
)
|
|
7,069
|
|
|||
Other (income) expense, net
|
(1,574
|
)
|
|
461
|
|
|
(2,035
|
)
|
|||
Operating income
|
5,889
|
|
|
11,393
|
|
|
(5,504
|
)
|
|||
Interest expense
|
12,155
|
|
|
29,907
|
|
|
(17,752
|
)
|
|||
Interest income
|
—
|
|
|
(3,509
|
)
|
|
3,509
|
|
|||
Loss from continuing operations before income tax
|
(6,266
|
)
|
|
(15,005
|
)
|
|
8,739
|
|
|||
Income tax benefit
|
(6,645
|
)
|
|
(5,269
|
)
|
|
(1,376
|
)
|
|||
Income (loss) from continuing operations
|
379
|
|
|
(9,736
|
)
|
|
10,115
|
|
|||
Income from discontinued operations, net of tax
|
—
|
|
|
3,840
|
|
|
(3,840
|
)
|
|||
Net income (loss)
|
379
|
|
|
(5,896
|
)
|
|
6,275
|
|
|||
Net income attributable to non-controlling interest, net of tax
|
143
|
|
|
—
|
|
|
143
|
|
|||
Total income (loss) attributable to WSC
|
$
|
236
|
|
|
$
|
(5,896
|
)
|
|
$
|
6,132
|
|
|
Six Months Ended June 30,
|
2018 vs. 2017 $ Change
|
|||||||||
(in thousands)
|
2018
|
|
2017
|
|
|||||||
Revenues:
|
|
|
|
|
|
||||||
Leasing and services revenue:
|
|
|
|
|
|
||||||
Modular leasing
|
$
|
198,511
|
|
|
$
|
141,941
|
|
|
$
|
56,570
|
|
Modular delivery and installation
|
57,663
|
|
|
41,953
|
|
|
15,710
|
|
|||
Sales:
|
|
|
|
|
|
||||||
New units
|
12,664
|
|
|
14,882
|
|
|
(2,218
|
)
|
|||
Rental units
|
6,246
|
|
|
10,622
|
|
|
(4,376
|
)
|
|||
Total revenues
|
275,084
|
|
|
209,398
|
|
|
65,686
|
|
|||
Costs:
|
|
|
|
|
|
||||||
Costs of leasing and services:
|
|
|
|
|
|
||||||
Modular leasing
|
54,291
|
|
|
40,442
|
|
|
13,849
|
|
|||
Modular delivery and installation
|
55,648
|
|
|
40,472
|
|
|
15,176
|
|
|||
Costs of sales:
|
|
|
|
|
|
||||||
New units
|
8,691
|
|
|
10,486
|
|
|
(1,795
|
)
|
|||
Rental units
|
3,578
|
|
|
6,283
|
|
|
(2,705
|
)
|
|||
Depreciation of rental equipment
|
47,315
|
|
|
34,194
|
|
|
13,121
|
|
|||
Gross profit
|
105,561
|
|
|
77,521
|
|
|
28,040
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
92,948
|
|
|
64,413
|
|
|
28,535
|
|
|||
Other depreciation and amortization
|
4,006
|
|
|
3,831
|
|
|
175
|
|
|||
Restructuring costs
|
1,077
|
|
|
968
|
|
|
109
|
|
|||
Currency losses (gains), net
|
1,596
|
|
|
(8,499
|
)
|
|
10,095
|
|
|||
Other (income) expense, net
|
(4,419
|
)
|
|
591
|
|
|
(5,010
|
)
|
|||
Operating income
|
10,353
|
|
|
16,217
|
|
|
(5,864
|
)
|
|||
Interest expense
|
23,874
|
|
|
54,568
|
|
|
(30,694
|
)
|
|||
Interest income
|
—
|
|
|
(6,093
|
)
|
|
6,093
|
|
|||
Loss from continuing operations before income tax
|
(13,521
|
)
|
|
(32,258
|
)
|
|
18,737
|
|
|||
Income tax benefit
|
(7,065
|
)
|
|
(10,138
|
)
|
|
3,073
|
|
|||
Loss from continuing operations
|
(6,456
|
)
|
|
(22,120
|
)
|
|
15,664
|
|
|||
Income from discontinued operations, net of tax
|
—
|
|
|
6,045
|
|
|
(6,045
|
)
|
|||
Net loss
|
(6,456
|
)
|
|
(16,075
|
)
|
|
9,619
|
|
|||
Net loss attributable to non-controlling interest, net of tax
|
(505
|
)
|
|
—
|
|
|
(505
|
)
|
|||
Total loss attributable to WSC
|
$
|
(5,951
|
)
|
|
$
|
(16,075
|
)
|
|
$
|
10,124
|
|
|
Three Months Ended June 30, 2018
|
||||||||||
(in thousands, except for units on rent and rates)
|
Modular - US
|
|
Modular - Other North America
|
|
Total
|
||||||
Revenue
|
$
|
124,813
|
|
|
$
|
15,520
|
|
|
$
|
140,333
|
|
Gross profit
|
$
|
49,741
|
|
|
$
|
4,899
|
|
|
$
|
54,640
|
|
Adjusted EBITDA
|
$
|
38,104
|
|
|
$
|
3,812
|
|
|
$
|
41,916
|
|
Capital expenditures for rental equipment
|
$
|
30,931
|
|
|
$
|
1,748
|
|
|
$
|
32,679
|
|
Modular space units on rent (average during the period)
|
48,997
|
|
|
5,524
|
|
|
54,521
|
|
|||
Average modular space utilization rate
|
72.2
|
%
|
|
57.1
|
%
|
|
70.3
|
%
|
|||
Average modular space monthly rental rate
|
$
|
549
|
|
|
$
|
573
|
|
|
$
|
551
|
|
Portable storage units on rent (average during the period)
|
13,127
|
|
|
369
|
|
|
13,496
|
|
|||
Average portable storage utilization rate
|
68.5
|
%
|
|
57.4
|
%
|
|
68.1
|
%
|
|||
Average portable storage monthly rental rate
|
$
|
120
|
|
|
$
|
116
|
|
|
$
|
119
|
|
|
Three Months Ended June 30, 2017
|
||||||||||||||
(in thousands, except for units on rent and rates)
|
Modular - US
|
|
Modular - Other North America
|
|
Corporate & Other
|
|
Total
|
||||||||
Revenue
|
$
|
98,209
|
|
|
$
|
12,010
|
|
|
$
|
(142
|
)
|
|
$
|
110,077
|
|
Gross profit
|
$
|
35,954
|
|
|
$
|
3,769
|
|
|
$
|
(140
|
)
|
|
$
|
39,583
|
|
Adjusted EBITDA
|
$
|
26,329
|
|
|
$
|
2,506
|
|
|
$
|
(2,588
|
)
|
|
$
|
26,247
|
|
Capital expenditures for rental equipment
|
$
|
25,909
|
|
|
$
|
1,716
|
|
|
$
|
—
|
|
|
$
|
27,625
|
|
Modular space units on rent (average during the period)
|
35,780
|
|
|
4,900
|
|
|
—
|
|
|
40,680
|
|
||||
Average modular space utilization rate
|
73.8
|
%
|
|
50.0
|
%
|
|
—
|
%
|
|
69.8
|
%
|
||||
Average modular space monthly rental rate
|
$
|
535
|
|
|
$
|
534
|
|
|
$
|
—
|
|
|
$
|
534
|
|
Portable storage units on rent (average during the period)
|
11,988
|
|
|
351
|
|
|
—
|
|
|
12,339
|
|
||||
Average portable storage utilization rate
|
70.7
|
%
|
|
51.8
|
%
|
|
—
|
%
|
|
70.0
|
%
|
||||
Average portable storage monthly rental rate
|
$
|
114
|
|
|
$
|
118
|
|
|
$
|
—
|
|
|
$
|
114
|
|
|
Six Months Ended June 30, 2018
|
||||||||||
(in thousands, except for units on rent and rates)
|
Modular - US
|
|
Modular - Other North America
|
|
Total
|
||||||
Revenue
|
$
|
246,900
|
|
|
$
|
28,184
|
|
|
$
|
275,084
|
|
Gross profit
|
$
|
96,549
|
|
|
$
|
9,012
|
|
|
$
|
105,561
|
|
Adjusted EBITDA
|
$
|
70,716
|
|
|
$
|
6,692
|
|
|
$
|
77,408
|
|
Capital expenditures for rental equipment
|
$
|
61,455
|
|
|
$
|
3,308
|
|
|
$
|
64,763
|
|
Modular space units on rent (average during the period)
|
48,841
|
|
|
5,487
|
|
|
54,328
|
|
|||
Average modular space utilization rate
|
72.2
|
%
|
|
57.0
|
%
|
|
70.3
|
%
|
|||
Average modular space monthly rental rate
|
$
|
541
|
|
|
$
|
557
|
|
|
$
|
543
|
|
Portable storage units on rent (average during the period)
|
13,434
|
|
|
364
|
|
|
13,798
|
|
|||
Average portable storage utilization rate
|
69.8
|
%
|
|
56.4
|
%
|
|
69.4
|
%
|
|||
Average portable storage monthly rental rate
|
$
|
118
|
|
|
$
|
116
|
|
|
$
|
118
|
|
|
Six Months Ended June 30, 2017
|
||||||||||||||
(in thousands, except for units on rent and rates)
|
Modular - US
|
|
Modular - Other North America
|
|
Corporate & Other
|
|
Total
|
||||||||
Revenue
|
$
|
185,624
|
|
|
$
|
24,069
|
|
|
$
|
(295
|
)
|
|
$
|
209,398
|
|
Gross profit
|
$
|
69,769
|
|
|
$
|
8,035
|
|
|
$
|
(283
|
)
|
|
$
|
77,521
|
|
Adjusted EBITDA
|
$
|
50,012
|
|
|
$
|
5,625
|
|
|
$
|
(7,444
|
)
|
|
$
|
48,193
|
|
Capital expenditures for rental equipment
|
$
|
47,958
|
|
|
$
|
2,344
|
|
|
$
|
—
|
|
|
$
|
50,302
|
|
Modular space units on rent (average during the period)
|
35,438
|
|
|
4,868
|
|
|
—
|
|
|
40,306
|
|
||||
Average modular space utilization rate
|
73.0
|
%
|
|
49.6
|
%
|
|
—
|
%
|
|
69.1
|
%
|
||||
Average modular space monthly rental rate
|
$
|
524
|
|
|
$
|
531
|
|
|
$
|
—
|
|
|
$
|
524
|
|
Portable storage units on rent (average during the period)
|
12,394
|
|
|
355
|
|
|
—
|
|
|
12,749
|
|
||||
Average portable storage utilization rate
|
72.9
|
%
|
|
52.2
|
%
|
|
—
|
%
|
|
72.1
|
%
|
||||
Average portable storage monthly rental rate
|
$
|
113
|
|
|
$
|
114
|
|
|
$
|
—
|
|
|
$
|
113
|
|
•
|
Currency (gains) losses, net: on monetary assets and liabilities denominated in foreign currencies other than the subsidiaries’ functional currency. Substantially all such currency gains (losses) are unrealized and attributable to financings due to and from affiliated companies.
|
•
|
Goodwill and other impairment charges related to non-cash costs associated with impairment charges to goodwill, other intangibles, rental fleet and property, plant and equipment.
|
•
|
Restructuring costs associated with restructuring plans designed to streamline operations and reduce costs.
|
•
|
Costs to integrate acquired companies.
|
•
|
Non-cash charges for stock compensation plans.
|
•
|
Other expense includes consulting expenses related to certain one-time projects, financing costs not classified as interest expense and gains and losses on disposals of property, plant, and equipment.
|
•
|
Adjusted EBITDA does not reflect changes in, or cash requirements, for our working capital needs;
|
•
|
Adjusted EBITDA does not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
|
•
|
Adjusted EBITDA does not reflect our tax expense or the cash requirements to pay our taxes;
|
•
|
Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
|
•
|
Adjusted EBITDA does not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations;
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
|
•
|
other companies in our industry may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss)
|
$
|
379
|
|
|
$
|
(5,896
|
)
|
|
$
|
(6,456
|
)
|
|
$
|
(16,075
|
)
|
Income from discontinued operations, net of tax
|
—
|
|
|
3,840
|
|
|
—
|
|
|
6,045
|
|
||||
Income (loss) from continuing operations
|
379
|
|
|
(9,736
|
)
|
|
(6,456
|
)
|
|
(22,120
|
)
|
||||
Income tax benefit
|
(6,645
|
)
|
|
(5,269
|
)
|
|
(7,065
|
)
|
|
(10,138
|
)
|
||||
Loss from continuing operations before income tax
|
(6,266
|
)
|
|
(15,005
|
)
|
|
(13,521
|
)
|
|
(32,258
|
)
|
||||
Interest expense, net
|
12,155
|
|
|
26,398
|
|
|
23,874
|
|
|
48,475
|
|
||||
Depreciation and amortization
|
25,040
|
|
|
19,364
|
|
|
51,321
|
|
|
38,025
|
|
||||
Currency losses (gains), net
|
572
|
|
|
(6,497
|
)
|
|
1,596
|
|
|
(8,499
|
)
|
||||
Restructuring costs
|
449
|
|
|
684
|
|
|
1,077
|
|
|
968
|
|
||||
Transaction fees
|
4,118
|
|
|
776
|
|
|
4,118
|
|
|
862
|
|
||||
Integration costs
|
4,785
|
|
|
—
|
|
|
7,415
|
|
|
—
|
|
||||
Stock compensation expense
|
1,054
|
|
|
—
|
|
|
1,175
|
|
|
—
|
|
||||
Other expense
|
9
|
|
|
527
|
|
|
353
|
|
|
620
|
|
||||
Adjusted EBITDA
|
$
|
41,916
|
|
|
$
|
26,247
|
|
|
$
|
77,408
|
|
|
$
|
48,193
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Gross profit
|
$
|
54,640
|
|
|
$
|
39,583
|
|
|
$
|
105,561
|
|
|
$
|
77,521
|
|
Depreciation of rental equipment
|
23,470
|
|
|
17,474
|
|
|
47,315
|
|
|
34,194
|
|
||||
Adjusted Gross Profit
|
$
|
78,110
|
|
|
$
|
57,057
|
|
|
$
|
152,876
|
|
|
$
|
111,715
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total purchase of rental equipment and refurbishments
|
$
|
(32,679
|
)
|
|
$
|
(29,326
|
)
|
|
$
|
(64,763
|
)
|
|
$
|
(54,223
|
)
|
Total purchases of rental equipment from discontinued operations
|
—
|
|
|
(1,701
|
)
|
|
—
|
|
|
(3,921
|
)
|
||||
Total purchases of rental equipment from continuing operations
|
(32,679
|
)
|
|
(27,625
|
)
|
|
(64,763
|
)
|
|
(50,302
|
)
|
||||
Proceeds from sale of rental equipment
|
$
|
3,905
|
|
|
$
|
4,778
|
|
|
$
|
12,033
|
|
|
$
|
10,622
|
|
Net Capital Expenditures for Rental Equipment
|
$
|
(28,774
|
)
|
|
$
|
(22,847
|
)
|
|
$
|
(52,730
|
)
|
|
$
|
(39,680
|
)
|
|
Three Months Ended June 30, 2018
|
||||||||||||||
(in thousands)
|
Modular - US
|
|
Modular - Other North America
|
|
Corporate & Other
|
|
Consolidated
|
||||||||
Net (loss) income
|
$
|
(5,533
|
)
|
|
$
|
(733
|
)
|
|
$
|
6,645
|
|
|
$
|
379
|
|
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Loss from continuing operations
|
(5,533
|
)
|
|
(733
|
)
|
|
6,645
|
|
|
379
|
|
||||
Income tax benefit
(a)
|
—
|
|
|
—
|
|
|
(6,645
|
)
|
|
(6,645
|
)
|
||||
Loss from continuing operations before income tax
|
(5,533
|
)
|
|
(733
|
)
|
|
—
|
|
|
(6,266
|
)
|
||||
Interest expense, net
|
11,663
|
|
|
492
|
|
|
—
|
|
|
12,155
|
|
||||
Operating income (loss)
|
6,130
|
|
|
(241
|
)
|
|
—
|
|
|
5,889
|
|
||||
Depreciation and amortization
|
21,571
|
|
|
3,469
|
|
|
—
|
|
|
25,040
|
|
||||
EBITDA
|
27,701
|
|
|
3,228
|
|
|
—
|
|
|
30,929
|
|
||||
Currency losses, net
|
114
|
|
|
458
|
|
|
—
|
|
|
572
|
|
||||
Restructuring costs
|
449
|
|
|
—
|
|
|
—
|
|
|
449
|
|
||||
Transaction Fees
|
4,049
|
|
|
69
|
|
|
—
|
|
|
4,118
|
|
||||
Integration costs
|
4,785
|
|
|
—
|
|
|
—
|
|
|
4,785
|
|
||||
Stock compensation expense
|
1,054
|
|
|
—
|
|
|
—
|
|
|
1,054
|
|
||||
Other (income) expense
|
(48
|
)
|
|
57
|
|
|
—
|
|
|
9
|
|
||||
Adjusted EBITDA
|
38,104
|
|
|
3,812
|
|
|
—
|
|
|
41,916
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Rental unit sales
|
2,309
|
|
|
126
|
|
|
—
|
|
|
2,435
|
|
||||
Rental unit cost of sales
|
1,164
|
|
|
99
|
|
|
—
|
|
|
1,263
|
|
||||
Gross profit on rental unit sales
|
1,145
|
|
|
27
|
|
|
—
|
|
|
1,172
|
|
||||
Gain on insurance proceeds
|
1,765
|
|
|
—
|
|
|
—
|
|
|
1,765
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Total capital expenditures
|
31,438
|
|
|
1,857
|
|
|
—
|
|
|
33,295
|
|
||||
Proceeds from rental unit sales
|
3,779
|
|
|
126
|
|
|
—
|
|
|
3,905
|
|
||||
Net Capital Expenditures
|
27,659
|
|
|
1,731
|
|
|
—
|
|
|
29,390
|
|
||||
Adjusted EBITDA less Net CAPEX
|
$
|
7,535
|
|
|
$
|
2,054
|
|
|
$
|
—
|
|
|
$
|
9,589
|
|
|
Three Months Ended June 30, 2017
|
||||||||||||||
(in thousands)
|
Modular - US
|
|
Modular - Other North America
|
|
Corporate & Other
|
|
Consolidated
|
||||||||
Net loss
|
320
|
|
|
(1,442
|
)
|
|
(4,774
|
)
|
|
(5,896
|
)
|
||||
Income from discontinued operations, net of tax
(b)
|
—
|
|
|
—
|
|
|
3,840
|
|
|
3,840
|
|
||||
Loss from continuing operations
|
320
|
|
|
(1,442
|
)
|
|
(8,614
|
)
|
|
(9,736
|
)
|
||||
Income tax benefit
(a)
|
—
|
|
|
—
|
|
|
(5,269
|
)
|
|
(5,269
|
)
|
||||
Loss from continuing operations before income tax
|
320
|
|
|
(1,442
|
)
|
|
(13,883
|
)
|
|
(15,005
|
)
|
||||
Interest expense, net
|
15,953
|
|
|
1,038
|
|
|
9,407
|
|
|
26,398
|
|
||||
Operating income (loss)
|
16,273
|
|
|
(404
|
)
|
|
(4,476
|
)
|
|
11,393
|
|
||||
Depreciation and amortization
|
15,830
|
|
|
3,189
|
|
|
345
|
|
|
19,364
|
|
||||
EBITDA
|
32,103
|
|
|
2,785
|
|
|
(4,131
|
)
|
|
30,757
|
|
||||
Currency gains, net
|
(5,800
|
)
|
|
(294
|
)
|
|
(403
|
)
|
|
(6,497
|
)
|
||||
Restructuring costs
|
—
|
|
|
—
|
|
|
684
|
|
|
684
|
|
||||
Transaction fees
|
46
|
|
|
—
|
|
|
730
|
|
|
776
|
|
||||
Other (income) expense
|
(20
|
)
|
|
15
|
|
|
532
|
|
|
527
|
|
||||
Adjusted EBITDA
|
26,329
|
|
|
2,506
|
|
|
(2,588
|
)
|
|
26,247
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Rental unit sales
|
3,835
|
|
|
943
|
|
|
—
|
|
|
4,778
|
|
||||
Rental unit cost of sales
|
1,923
|
|
|
652
|
|
|
—
|
|
|
2,575
|
|
||||
Gross profit on rental unit sales
|
1,912
|
|
|
291
|
|
|
—
|
|
|
2,203
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Total capital expenditures
(b)
|
26,923
|
|
|
1,783
|
|
|
1,992
|
|
|
30,698
|
|
||||
Total capital expenditures from discontinued operations
|
—
|
|
|
—
|
|
|
(1,992
|
)
|
|
(1,992
|
)
|
||||
Total capital expenditures from continuing operations
|
26,923
|
|
|
1,783
|
|
|
—
|
|
|
28,706
|
|
||||
Proceeds from rental unit sales
|
3,835
|
|
|
943
|
|
|
—
|
|
|
4,778
|
|
||||
Proceeds from rental unit sales from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from rental unit sales from continuing operations
|
3,835
|
|
|
943
|
|
|
—
|
|
|
4,778
|
|
||||
Net Capital Expenditures
|
23,088
|
|
|
840
|
|
|
—
|
|
|
23,928
|
|
||||
Adjusted EBITDA less Net CAPEX
|
$
|
1,329
|
|
|
$
|
1,375
|
|
|
$
|
(2,588
|
)
|
|
$
|
116
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||
(in thousands)
|
Modular - US
|
|
Modular - Other North America
|
|
Corporate & Other
|
|
Consolidated
|
||||||||
Net (loss) income
|
$
|
(10,841
|
)
|
|
$
|
(2,680
|
)
|
|
$
|
7,065
|
|
|
$
|
(6,456
|
)
|
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Loss from continuing operations
|
(10,841
|
)
|
|
(2,680
|
)
|
|
7,065
|
|
|
(6,456
|
)
|
||||
Income tax benefit
(a)
|
—
|
|
|
—
|
|
|
(7,065
|
)
|
|
(7,065
|
)
|
||||
Loss from continuing operations before income tax
|
(10,841
|
)
|
|
(2,680
|
)
|
|
—
|
|
|
(13,521
|
)
|
||||
Interest expense, net
|
22,823
|
|
|
1,051
|
|
|
—
|
|
|
23,874
|
|
||||
Operating income (loss)
|
11,982
|
|
|
(1,629
|
)
|
|
—
|
|
|
10,353
|
|
||||
Depreciation and amortization
|
44,463
|
|
|
6,858
|
|
|
—
|
|
|
51,321
|
|
||||
EBITDA
|
56,445
|
|
|
5,229
|
|
|
—
|
|
|
61,674
|
|
||||
Currency losses, net
|
271
|
|
|
1,325
|
|
|
—
|
|
|
1,596
|
|
||||
Restructuring costs
|
1,067
|
|
|
10
|
|
|
—
|
|
|
1,077
|
|
||||
Transaction Fees
|
4,049
|
|
|
69
|
|
|
—
|
|
|
4,118
|
|
||||
Integration costs
|
7,415
|
|
|
—
|
|
|
—
|
|
|
7,415
|
|
||||
Stock compensation expense
|
1,175
|
|
|
—
|
|
|
—
|
|
|
1,175
|
|
||||
Other expense
|
294
|
|
|
59
|
|
|
—
|
|
|
353
|
|
||||
Adjusted EBITDA
|
70,716
|
|
|
6,692
|
|
|
—
|
|
|
77,408
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Rental unit sales
|
5,663
|
|
|
583
|
|
|
—
|
|
|
6,246
|
|
||||
Rental unit cost of sales
|
3,193
|
|
|
385
|
|
|
—
|
|
|
3,578
|
|
||||
Gross profit on rental unit sales
|
2,470
|
|
|
198
|
|
|
—
|
|
|
2,668
|
|
||||
Gain on insurance proceeds
|
4,765
|
|
|
—
|
|
|
—
|
|
|
4,765
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Total capital expenditures
|
62,947
|
|
|
3,432
|
|
|
—
|
|
|
66,379
|
|
||||
Proceeds from rental unit sales
|
11,450
|
|
|
583
|
|
|
—
|
|
|
12,033
|
|
||||
Net Capital Expenditures
|
51,497
|
|
|
2,849
|
|
|
—
|
|
|
54,346
|
|
||||
Adjusted EBITDA less Net CAPEX
|
$
|
11,984
|
|
|
$
|
3,645
|
|
|
$
|
—
|
|
|
$
|
15,629
|
|
|
Six Months Ended June 30, 2017
|
||||||||||||||
(in thousands)
|
Modular - US
|
|
Modular - Other North America
|
|
Corporate & Other
|
|
Consolidated
|
||||||||
Net loss
|
(5,210
|
)
|
|
(2,458
|
)
|
|
(8,407
|
)
|
|
(16,075
|
)
|
||||
Income from discontinued operations, net of tax
(b)
|
—
|
|
|
—
|
|
|
6,045
|
|
|
6,045
|
|
||||
Loss from continuing operations
|
(5,210
|
)
|
|
(2,458
|
)
|
|
(14,452
|
)
|
|
(22,120
|
)
|
||||
Income tax benefit
(a)
|
—
|
|
|
—
|
|
|
(10,138
|
)
|
|
(10,138
|
)
|
||||
Loss from continuing operations before income tax
|
(5,210
|
)
|
|
(2,458
|
)
|
|
(24,590
|
)
|
|
(32,258
|
)
|
||||
Interest expense, net
|
31,512
|
|
|
2,216
|
|
|
14,747
|
|
|
48,475
|
|
||||
Operating income (loss)
|
26,302
|
|
|
(242
|
)
|
|
(9,843
|
)
|
|
16,217
|
|
||||
Depreciation and amortization
|
30,993
|
|
|
6,331
|
|
|
701
|
|
|
38,025
|
|
||||
EBITDA
|
57,295
|
|
|
6,089
|
|
|
(9,142
|
)
|
|
54,242
|
|
||||
Currency gains, net
|
(7,399
|
)
|
|
(481
|
)
|
|
(619
|
)
|
|
(8,499
|
)
|
||||
Restructuring costs
|
—
|
|
|
—
|
|
|
968
|
|
|
968
|
|
||||
Transaction costs
|
46
|
|
|
—
|
|
|
816
|
|
|
862
|
|
||||
Other expense
|
70
|
|
|
17
|
|
|
533
|
|
|
620
|
|
||||
Adjusted EBITDA
|
50,012
|
|
|
5,625
|
|
|
(7,444
|
)
|
|
48,193
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Rental unit sales
|
8,712
|
|
|
1,910
|
|
|
—
|
|
|
10,622
|
|
||||
Rental unit cost of sales
|
5,036
|
|
|
1,247
|
|
|
—
|
|
|
6,283
|
|
||||
Gross profit on rental unit sales
|
3,676
|
|
|
663
|
|
|
—
|
|
|
4,339
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Total capital expenditures
(b)
|
49,602
|
|
|
2,424
|
|
|
4,212
|
|
|
56,238
|
|
||||
Total capital expenditures from discontinued operations
|
—
|
|
|
—
|
|
|
(4,212
|
)
|
|
(4,212
|
)
|
||||
Total capital expenditures from continuing operations
|
49,602
|
|
|
2,424
|
|
|
—
|
|
|
52,026
|
|
||||
Proceeds from rental unit sales
|
8,712
|
|
|
1,910
|
|
|
—
|
|
|
10,622
|
|
||||
Proceeds from rental unit sales from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from rental unit sales from continuing operations
|
8,712
|
|
|
1,910
|
|
|
—
|
|
|
10,622
|
|
||||
Net Capital Expenditures
|
40,890
|
|
|
514
|
|
|
—
|
|
|
41,404
|
|
||||
Adjusted EBITDA less Net CAPEX
|
$
|
5,446
|
|
|
$
|
4,448
|
|
|
$
|
(7,444
|
)
|
|
$
|
2,450
|
|
|
Six Months Ended June 30,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Net cash from operating activities
|
$
|
18,800
|
|
|
$
|
24,124
|
|
Net cash from investing activities
|
(77,671
|
)
|
|
(111,393
|
)
|
||
Net cash from financing activities
|
57,963
|
|
|
86,845
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(96
|
)
|
|
254
|
|
||
Net change in cash and cash equivalents
|
$
|
(1,004
|
)
|
|
$
|
(170
|
)
|
•
|
our ability to effectively compete in the modular space and portable storage industry;
|
•
|
changes in demand within a number of key industry end-markets and geographic regions;
|
•
|
effective management of our rental equipment;
|
•
|
our ability to acquire and successfully integrate new operations;
|
•
|
market conditions and economic factors beyond our control;
|
•
|
our ability to properly design, manufacture, repair and maintain our rental equipment;
|
•
|
our operating results or financial estimates fail to meet or exceed our expectations;
|
•
|
operational, economic, political and regulatory risks;
|
•
|
the effect of changes in state building codes on our ability to remarket our buildings;
|
•
|
our ability to effectively manage our credit risk, collect on our accounts receivable, or recover our rental equipment;
|
•
|
foreign currency exchange rate exposure;
|
•
|
increases in raw material and labor costs;
|
•
|
our reliance on third party manufacturers and suppliers;
|
•
|
risks associated with labor relations, labor costs and labor disruptions;
|
•
|
failure to retain key personnel;
|
•
|
the effect of impairment charges on our operating results;
|
•
|
our inability to recognize or use deferred tax assets and tax loss carry forwards;
|
•
|
our obligations under various laws and regulations;
|
•
|
the effect of litigation, judgments, orders or regulatory proceedings on our business;
|
•
|
unanticipated changes in our tax obligations;
|
•
|
any failure of our management information systems;
|
•
|
our ability to design, implement and maintain effective internal controls, including disclosure controls and controls over financial reporting;
|
•
|
natural disasters and other business disruptions;
|
•
|
our exposure to various possible claims and the potential inadequacy of our insurance;
|
•
|
our ability to deploy our units effectively, including our ability to close projected unit sales;
|
•
|
any failure by our prior owner or its affiliates to perform under or comply with our transition services and intellectual property agreements;
|
•
|
our ability to fulfill our public company obligations;
|
•
|
our subsidiaries’ ability to meet their debt service requirements and obligations;
|
•
|
our subsidiaries’ ability to take certain actions, or to permit us to take certain actions, under the agreements governing their indebtedness; and
|
•
|
other factors detailed under the section entitled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.
|
ITEM 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
ITEM 4.
|
Controls and Procedures
|
•
|
Increased involvement on a quarterly basis of our third-party consultants dedicated to determining the appropriate accounting for material and complex tax and unique business transactions;
|
•
|
Review of the tax accounting process to identify and implement enhanced processes and related internal control review procedures; and
|
•
|
Adding additional review controls to approve complex accounting and related calculations.
|
ITEM 1.
|
Legal Proceedings
|
ITEM 1A.
|
Risk Factors
|
•
|
diversion of management's attention to integration matters;
|
•
|
difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from the acquisition;
|
•
|
difficulties in the integration of operations and systems;
|
•
|
difficulties in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures;
|
•
|
difficulties in the assimilation of employees;
|
•
|
duplicate and competing products;
|
•
|
difficulties in managing the expanded operations of a significantly larger and more complex company;
|
•
|
challenges in keeping existing customers and obtaining new customers, including customers that may not consent to the assignment of their contracts or agree to enter into a new contract with us;
|
•
|
challenges in attracting and retaining key personnel;
|
•
|
the impact of potential liabilities we may be inheriting from ModSpace; and
|
•
|
coordinating a geographically dispersed organization.
|
ITEM 2.
|
Unregistered Sales of Equity Securities
|
ITEM 3.
|
Defaults Upon Senior Securities
|
ITEM 4.
|
Mine Safety Disclosures
|
ITEM 5.
|
Other Information
|
ITEM 6.
|
Exhibits
|
Exhibit No.
|
|
Exhibit Description
|
*
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
*
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
**
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
**
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
Underwriting Agreement, dated July 25, 2018, by and among WillScot Corporation, Barclays Capital Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule I thereto (incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K filed July 30, 2018)
|
|
*
|
First Amendment to the ABL Credit Agreement, dated as of July 9, 2018, by and among Williams Scotsman International, Inc. (“WSII”), certain subsidiaries of WSII, Williams Scotsman Holdings Corp. (“Holdings”), the lenders party thereto, and Bank of America, N.A., as administrative agent and collateral agent
|
|
*
|
Second Amendment to the ABL Agreement, dated as of July 24, 2018, by and among WSII, certain subsidiaries of WSII, Holdings., the lenders party thereto, and Bank of America, N.A., as administrative and collateral agent
|
|
*
|
Supplemental Indenture dated August 3, 2018, to the Indenture, dated November 29, 2017, by and among WSII, the Guarantors party thereto, and Deutsche Bank Trust Company Americas, as Trustee and Collateral Agent
|
|
|
Indenture dated August 3, by and among Mason Finance Sub, Inc., the Guarantors party thereto, and Deutsche Bank Trust Company Americas, as Trustee (incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K filed August 7, 2018)
|
|
|
Indenture dated August 6, by and among Mason Finance Sub, Inc., the Guarantors party thereto, and Deutsche Bank Trust Company Americas, as Trustee (incorporated by reference to Exhibit 1.2 to the Company’s Form 8-K filed August 7, 2018)
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
WillScot Corporation
|
|
|
|
|
|
|
|
By:
|
/s/ T
IMOTHY
D. B
OSWELL
|
Dated:
|
August 8, 2018
|
|
Timothy D. Boswell
|
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
WILLIAMS SCOTSMAN HOLDINGS CORP., as Holdings and a Guarantor
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
WILLIAMS SCOTSMAN INTERNATIONAL, INC., as a U.S. Borrower and a Guarantor
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
WILLIAMS SCOTSMAN, INC., as a U.S. Borrower and a Guarantor
|
|
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
WILLSCOT EQUIPMENT II, LLC, as a U.S. Borrower and a Guarantor
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
ACTON MOBILE HOLDINGS, LLC, as a U.S. Borrower and a Guarantor
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
NEW ACTION MOBILE INDUSTRIES LLC, as a U.S. Borrower and a Guarantor
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
ONSITE SPACE LLC, as a U.S. Borrower and a Guarantor
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
WILLIAMS SCOTSMAN OF CANADA, INC., as Canadian Borrower and a Guarantor
|
|
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
AGENTS AND LENDERS
|
|
BANK OF AMERICA, N.A.
, as Agent, U.S. Swingline Lender, a U.S. Fronting Bank and a U.S. Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
BANK OF AMERICA, N.A.
(acting through its Canada branch), as Canadian Swingline Lender, a Canadian Fronting Bank and a Canadian Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
DEUTSCHE BANK AG NEW YORK BRANCH
, as a U.S. Fronting Bank and a U.S. Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
DEUTSCHE BANK AG, CANADA BRANCH
, as a Canadian Fronting Bank and a Canadian Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
MORGAN STANLEY BANK, N.A.
, as a U.S. Fronting Bank and a U.S. Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
MORGAN STANLEY BANK, N.A.
, as a Canadian Fronting Bank and a Canadian Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
Bank of America (Canada)
|
$15,926,100.00
|
Deutsche Bank AG, Canada Branch
|
$12,879,000.00
|
Morgan Stanley Bank, N.A.
|
$11,263,200.00
|
Credit Suisse AG, Cayman Islands Branch
|
$5,631,600.00
|
ING Capital LLC
|
$8,000,100.00
|
Barclays Bank PLC
|
$6,300,000.00
|
Bank of America
|
$11,910,900.00
|
Deutsche Bank AG New York Branch
|
$16,308,000.00
|
Morgan Stanley Bank, N.A.
|
$13,526,400.00
|
Goldman Sachs Lending Partners LLC
|
$11,841,300.00
|
Credit Suisse AG, Cayman Islands Branch
|
$6,763,200.00
|
ING Capital LLC
|
$11,500,200.00
|
Barclays Bank PLC
|
$3,150,000.00
|
WILLIAMS SCOTSMAN HOLDINGS CORP., as Holdings and a Guarantor
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
WILLIAMS SCOTSMAN INTERNATIONAL, INC., as a U.S. Borrower and a Guarantor
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
WILLIAMS SCOTSMAN, INC., as a U.S. Borrower and a Guarantor
|
|
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
WILLSCOT EQUIPMENT II, LLC, as a U.S. Borrower and a Guarantor
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
ACTON MOBILE HOLDINGS, LLC, as a U.S. Borrower and a Guarantor
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
NEW ACTION MOBILE INDUSTRIES LLC, as a U.S. Borrower and a Guarantor
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
ONSITE SPACE LLC, as a U.S. Borrower and a Guarantor
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
|
|
WILLIAMS SCOTSMAN OF CANADA, INC., as Canadian Borrower and a Guarantor
|
|
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
AGENTS AND LENDERS
|
|
BANK OF AMERICA, N.A.
, as Agent and a U.S. Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
BANK OF AMERICA, N.A.
(acting through its Canada branch), as a Canadian Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
DEUTSCHE BANK AG NEW YORK BRANCH
, as a U.S. Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
DEUTSCHE BANK AG, CANADA BRANCH
, as a Canadian Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
MORGAN STANLEY BANK, N.A.
, as a U.S. Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
MORGAN STANLEY BANK, N.A.
, as a Canadian Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
, as a U.S. Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
, as a Canadian Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
ING CAPITAL LLC
, as a U.S. Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
ING CAPITAL LLC
, as a Canadian Revolver Lender
|
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
|
|
By:
|
|
|
Name:______________________________________
|
|
Title:_______________________________________
|
WILLIAMS SCOTSMAN INTERNATIONAL, INC.,
|
|
as Issuer
|
|
|
|
By:
|
/s/ Timothy D. Boswell
|
|
Name: Timothy D. Boswell
|
|
Title: Chief Financial Officer
|
|
|
|
|
WILLIAMS SCOTSMAN HOLDINGS CORP.,
|
|
as a Guarantor
|
|
|
|
By:
|
/s/ Timothy D. Boswell
|
|
Name: Timothy D. Boswell
|
|
Title: Chief Financial Officer
|
|
|
|
|
WILLSCOT EQUIPMENT II LLC,
|
|
as a Guarantor
|
|
|
|
By:
|
/s/ Timothy D. Boswell
|
|
Name: Timothy D. Boswell
|
|
Title: Chief Financial Officer
|
|
|
|
|
WILLIAMS SCOTSMAN INC.,
|
|
as a Guarantor
|
|
|
|
By:
|
/s/ Timothy D. Boswell
|
|
Name: Timothy D. Boswell
|
|
Title: Chief Financial Officer
|
|
|
|
|
NEW ACTON MOBILE INDUSTRIES LLC,
|
|
as a Guarantor
|
|
|
|
By:
|
/s/ Timothy D. Boswell
|
|
Name: Timothy D. Boswell
|
|
Title: Chief Financial Officer
|
ACTON MOBILE HOLDINGS, LLC,
|
|
as a Guarantor
|
|
|
|
By:
|
/s/ Timothy D. Boswell
|
|
Name: Timothy D. Boswell
|
|
Title: Chief Financial Officer
|
|
|
|
|
ONSITE SPACE LLC,
|
|
as a Guarantor
|
|
|
|
By:
|
/s/ Timothy D. Boswell
|
|
Name: Timothy D. Boswell
|
|
Title: Chief Financial Officer
|
DEUTSCHE BANK TRUST COMPANY AMERICAS,
|
|
as Trustee
|
|
|
|
By:
|
/s/ Annie Jaghatspanyan
|
|
Name: Annie Jaghatspanyan
|
|
Title: Vice President
|
|
|
By:
|
/s/ Irina Golovashchuk
|
|
Name: Irina Golovashchuk
|
|
Title: Vice President
|
|
|
/s/
B
RADLEY L. SOULTZ
|
|
|
Bradley L. Soultz
|
|
|
President and Chief Executive Officer and Director (Principal Executive Officer)
|
|
|
/s/ TIMOTHY D. BOSWELL
|
|
|
Timothy D. Boswell
|
|
|
Chief Financial Officer (Principal Financial Officer)
|
Certification of Chief Executive Officer
|
|
|
/s/ BRADLEY L. SOULTZ
|
|
|
Bradley L. Soultz
|
|
|
President and Chief Executive Officer and Director (Principal Executive Officer)
|
Certification of Chief Financial Officer
|
|
|
/s/ TIMOTHY D. BOSWELL
|
|
|
Timothy D. Boswell
|
|
|
Chief Financial Officer (Principal Financial Officer)
|