News Column

Mobile Mini Reports Q2’14 Results

July 30, 2014

TEMPE, Ariz.--(BUSINESS WIRE)-- Mobile Mini, Inc. (NASDAQ GS:MINI), the world’s leading supplier of portable storage solutions, today reported actual and adjusted financial results for the quarter ended June 30, 2014. Total revenues were $106.5 million and leasing revenues were $98.0 million, up from $97.1 million and $88.0 million, respectively, for the same period last year. The Company’s second quarter net income was $9.3 million, or $0.20 per diluted share, compared to a net loss of $14.4 million, or $0.32 per diluted share, respectively, for the second quarter of 2013. Prior year results included a charge of $40.2 million related to the impairment of certain leasing and other assets determined to be either non-core or uneconomic to repair. On an adjusted basis, second quarter net income was $10.8 million, or $0.23 per diluted share, compared to $11.7 million, or $0.25 per diluted share, respectively, for the second quarter of 2013.

Adjusted EBITDA was $36.0 million and adjusted EBITDA margin was 33.8% for the second quarter of 2014.

Second Quarter 2014 Highlights

  • Grew leasing revenues 11.4% year-over-year.
  • Drove second quarter sequential rental rates 2.3% higher than first quarter 2014 levels.
  • Increased rental rates by 7.6% year-over-year, with new units delivered at a 14.0% higher rate than the previous year.
  • Improved yield over the previous year by 11.5% to an all-time high of $689 per unit.
  • Achieved an adjusted EBITDA margin of 33.8%, while continuing to invest in repairs and maintenance associated with increased deliveries and repositioning assets to high utilization markets, resulting in incremental expense of approximately $4 million, or 4% of revenues.
  • Increased average fleet utilization to 66.6% from 62.0% in the second quarter of 2013.
  • Delivered free cash flow of $23.2 million compared to $18.3 million for the same period last year, making this quarter the 26th consecutive quarter of positive free cash flow.
  • Purchased two portable storage businesses effective June 30, 2014 and sold the Belfast, Northern Ireland location.

    Erik Olsson, Mobile Mini’s President and Chief Executive Officer, commented, “I am very pleased with our strong double-digit year-over-year increase in leasing revenues, especially considering that we implemented a major reorganization of our sales force during the quarter. In addition, excluding our incremental investments in fleet repairs and repositioning, we produced an adjusted EBITDA margin of approximately 38%, meaning our strategic plan is on track. We also continued to generate strong free cash flow, which we used in part to expand our footprint in North America and plan on entering additional new markets during the second half of the year.”

    Mr. Olsson added, “We continue to execute on our strategic plan by refining and enhancing both our sales organization as well as our field operations. With another quarter behind us, we are even more confident on our stated expectations for 2014 of a year-over-year top-line growth rate and profitability exceeding that of 2013, resulting in increased free cash flow generation for the year.”

    Dividend

    The Company’s regular quarterly cash dividend of $0.17 per share will be paid on September 3, 2014 to shareholders of record on August 20, 2014.

    EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, adjusted net income, adjusted diluted EPS, and free cash flow are non-GAAP financial measures as defined by Securities and Exchange Commission (“SEC”) rules. Reconciliations of these measurements to the most directly comparable GAAP financial measures can be found later in this release.

    Conference Call

    Mobile Mini will host a conference call today, Wednesday, July 30, 2014, at 12 noon ET to review these results. To listen to the call live, dial (201) 493-6739 and ask for the Mobile Mini Conference Call or go to www.mobilemini.com and click on the Investors section. Additionally, a slide presentation that will accompany the call and the reconciliation of non-GAAP financial measures used in the slide show to the most directly comparable GAAP financial measures will be posted at www.mobilemini.com on the Investors section and will be available in advance and after the call. Please go to the website 15 minutes early to download and install any necessary audio software. If you are unable to listen live, a replay of the call can be accessed for approximately 14 days after the call at Mobile Mini’s website.

    Mobile Mini, Inc. is the world’s leading provider of portable storage solutions through its total lease fleet of over 213,000 portable storage containers and office units with 135 locations in the U.S., United Kingdom, and Canada. Mobile Mini is included on the Russell 2000® and 3000® Indexes and the S&P Small Cap Index.

    This news release contains forward-looking statements, including, but not limited to, our expectations regarding our ability to execute our strategic plan, growth and profitability, financial performance, ability to enter new markets, and increased free cash flow, which involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Risks and uncertainties that may affect future results include those that are described from time to time in the Company’s SEC filings. These forward-looking statements represent the judgment of the Company, as of the date of this release, and Mobile Mini disclaims any intent or obligation to update forward-looking statements.

    (See Accompanying Tables)

         
     

    Mobile Mini, Inc.

    Condensed Consolidated Statements of Operations

    (Unaudited)/(in thousands except per share data)/(includes effects of rounding)

     
    Three Months Ended Three Months Ended
    June 30, June 30,
    2014   2014 2013   2013
    Revenues: Actual   Adjusted (1) Actual   Adjusted (1)
    Leasing $ 98,041 $ 98,041 $ 88,032 $ 88,032
    Sales 7,982 7,982 8,660 8,660
    Other   510       510     443       443  
    Total revenues   106,533       106,533     97,135       97,135  
    Costs and expenses:
    Cost of sales 5,379 5,379 5,518 5,518
    Leasing, selling and general expenses (2) 68,149 68,116 57,259 57,259
    Restructuring expenses (3) 1,731 - 343 -
    Asset impairment charge, net (4) 274 - 40,237 -
    Depreciation and amortization   9,305       9,305     8,784       8,784  
    Total costs and expenses   84,838       82,800     112,141       71,561  
    Income (loss) from operations 21,695 23,733 (15,006 ) 25,574
     
    Other expense:
    Interest expense   (7,097 )     (7,097 )   (7,439 )     (7,439 )
    Income (loss) from continuing operations before income tax provision (benefit)

    14,598

    16,636

    (22,445

    )

    18,135

    Income tax provision (benefit)   5,335       5,856     (8,126 )     6,460  
    Income (loss) from continuing operations 9,263 10,780 (14,319 ) 11,675
    Loss from discontinued operation, net of tax (5)   -       -     (62 )     -  
    Net income (loss) $ 9,263     $ 10,780   $ (14,381 )   $ 11,675  
     
    Earnings per share:
    Basic:
    Income (loss) from continuing operations $ 0.20 $ 0.23 $ (0.32 ) $ 0.26
    Loss from discontinued operation   -       -     -       -  
    Net Income (loss) $ 0.20     $ 0.23   $ (0.32 )   $ 0.26  
    Diluted:
    Income (loss) from continuing operations $ 0.20 $ 0.23 $ (0.32 ) $ 0.25
    Loss from discontinued operation   -       -     -       -  
    Net Income (loss) $ 0.20     $ 0.23   $ (0.32 )   $ 0.25  
     

    Weighted average number of common and common share equivalents outstanding:

    Basic   46,235       46,235     45,420       45,420  
    Diluted   47,027       47,027     45,420       46,018  
     
    EBITDA $ 31,000     $ 36,015   $ (6,222 )   $ 38,101  
         
    (1) This column represents a non-GAAP presentation even though some individual line items presented, such as revenues, are identical under both GAAP and the adjusted presentations.
    (2) In 2014, represents acquisition activity costs.
    (3) Restructuring expenses represent costs relating primarily to the restructuring of our operations that are excluded in the adjusted presentation.
    (4) In 2014, represents the additional loss upon completion of sale (offset by gains upon completion of sale) of certain assets that were written down to fair value in the second quarter of 2013 and is excluded in the adjusted presentation.
    In 2013, represents the impairment charge primarily for the write down on certain assets classified as held for sale and is excluded in the adjusted presentation.
    (5) Represents our Netherlands operation that was sold in December 2013 and reported as a discontinued operation.
         
     

    Mobile Mini, Inc.

    Condensed Consolidated Statements of Operations

    (Unaudited)/(in thousands except per share data)/(includes effects of rounding)

     
    Six Months Ended Six Months Ended
    June 30, June 30,
    2014   2014 2013   2013
    Revenues: Actual   Adjusted (1) Actual   Adjusted (1)
    Leasing $ 192,121 $ 192,121 $ 172,907 $ 172,907
    Sales 15,848 15,848 20,892 20,892
    Other   968       968     848       848  
    Total revenues   208,937       208,937     194,647       194,647  
    Costs and expenses:
    Cost of sales 10,932 10,932 14,005 14,005
    Leasing, selling and general expenses (2) 136,505 136,466 110,137 110,137
    Restructuring expenses (3) 2,316 - 718 -
    Asset impairment charge, net (4) 557 - 40,237 -
    Depreciation and amortization   18,450       18,450     17,544       17,544  
    Total costs and expenses   168,760       165,848     182,641       141,686  
    Income from operations 40,177 43,089 12,006 52,961
     
    Other income (expense):
    Interest expense (14,084 ) (14,084 ) (14,974 ) (14,974 )
    Foreign currency exchange   (1 )     (1 )   (1 )     (1 )
    Income (loss) from continuing operations before income tax provision (benefit)

    26,092

    29,004

    (2,969

    )

    37,986

    Income tax provision (benefit)   9,389       10,189     (769 )     13,962  
    Income (loss) from continuing operations 16,703 18,815 (2,200 ) 24,024
    Loss from discontinued operation, net of tax (5)   -       -     (139 )     -  
    Net income (loss) $ 16,703     $ 18,815   $ (2,339 )   $ 24,024  
     
    Earnings per share:
    Basic:
    Income (loss) from continuing operations $ 0.36 $ 0.41 $ (0.05 ) $ 0.53
    Loss from discontinued operation   -       -     -       -  
    Net Income (loss) $ 0.36     $ 0.41   $ (0.05 )   $ 0.53  
    Diluted:
    Income (loss) from continuing operations $ 0.36 $ 0.40 $ (0.05 ) $ 0.52
    Loss from discontinued operation   -       -     -       -  
    Net Income (loss) $ 0.36     $ 0.40   $ (0.05 )   $ 0.52  
     

    Weighted average number of common and common share equivalents outstanding:

    Basic   46,192       46,192     45,334       45,334  
    Diluted   46,932       46,932     45,334       45,876  
     
    EBITDA $ 58,626     $ 68,679   $ 29,549     $ 75,883  
         
    (1) This column represents a non-GAAP presentation even though some individual line items presented, such as revenues, are identical under both GAAP and the adjusted presentations.
    (2) In 2014, represents acquisition activity costs.
    (3) Restructuring expenses represent costs relating primarily to the restructuring of our operations that are excluded in the adjusted presentation.
    (4) In 2014, represents the additional loss upon completion of sale (offset by gains upon completion of sale) of certain assets that were written down to fair value in the second quarter of 2013 and is excluded in the adjusted presentation.
    In 2013, represents the impairment charge primarily for the write down on certain assets classified as held for sale and is excluded in the adjusted presentation.
    (5) Represents our Netherlands operation that was sold in December 2013 and reported as a discontinued operation.
     
     

    Mobile Mini, Inc.

    Non-GAAP Reconciliations

    (in thousands)

    (includes effects of rounding)

       
    Reconciliation of Adjusted Measurements to Actuals
      Three Months Ended June 30, 2014  
      Share-based       Asset  
    compensation Restructuring Acquisition impairment
      As Adjusted (1)   expense (2)   expenses (3)   expenses (4)   charge, net (5)   Actual  
    Revenues $ 106,533 $ - $ - $ - $ - $ 106,533
    EBITDA $ 36,015 $ (2,977 ) $ (1,731 ) $ (33 ) $ (274 ) $ 31,000
    EBITDA margin 33.8 % (2.8 )% (1.6 )% - (0.3 )% 29.1 %
    Operating income $ 23,733 $ - $ (1,731 ) $ (33 ) $ (274 ) $ 21,695
    Operating income margin 22.3 % - (1.6 )% - (0.3 )% 20.4 %

    Pre tax income from continuing operations

    $ 16,636 $ - $ (1,731 ) $ (33 ) $ (274 ) $ 14,598
    Net income $ 10,780 $ - $ (1,328 ) $ (20 ) $ (169 ) $ 9,263
    Diluted earnings per share $ 0.23 $ - $ (0.03 ) $ - $ - $ 0.20
     
     
    Reconciliation of Adjusted Measurements to Actuals
      Three Months Ended June 30, 2013  
    Share-based Asset Loss from
    compensation Restructuring impairment discontinued
      As Adjusted (1)   expense (2)   expenses (3)   charge (5)   operation, net (6)   Actual  
    Revenues $ 97,135 $ - $ - $ - $ - $ 97,135
    EBITDA $ 38,101 $ (3,743 ) $ (343 ) $ (40,237 ) $ - $ (6,222 )
    EBITDA margin 39.2 % (3.9 )% (0.4 )% (41.4 )% - (6.4 )%
    Operating income (loss) $ 25,574 $ - $ (343 ) $ (40,237 ) $ - $ (15,006 )
    Operating income (loss) margin 26.3 % - (0.4 )% (41.4 )% - (15.4 )%

    Pre tax income (loss) from continuing operations

    $ 18,135 $ - $ (343 ) $ (40,237 ) $ - $ (22,445 )
    Net income (loss) $ 11,675 $ - $ (212 ) $ (25,782 ) $ (62 ) $ (14,381 )
    Diluted earnings (loss) per share $ 0.25 $ - $ (0.01 ) $ (0.56 ) $ - $ (0.32 )
         
    (1) This column represents a non-GAAP presentation even though some individual line items presented, such as revenues, are identical under both GAAP and the adjusted presentations.
    (2) Represents non-cash share-based expense associated with the granting of equity instruments and is excluded in the adjusted presentation.
    (3) Restructuring expenses represent costs relating primarily to the restructuring of our operations that are excluded in the adjusted presentation.
    (4) In 2014, represents acquisition activity costs.
    (5) In 2014, represents the additional loss upon completion of sale (offset by gains upon completion of sale) of certain assets that were written down to fair value in the second quarter of 2013 and is excluded in the adjusted presentation.
    In 2013, represents the impairment charge primarily for the write down on certain assets classified as held for sale and is excluded in the adjusted presentation.
    (6) In 2013, represents our Netherlands operation that was sold in December 2013 and reported as a discontinued operation.
     
     

    Mobile Mini, Inc.

    Non-GAAP Reconciliations

    (in thousands)

    (includes effects of rounding)

       
    Reconciliation of Adjusted Measurements to Actuals
      Six Months Ended June 30, 2014  
      Share-based       Asset  
    compensation Restructuring Acquisition impairment
      As Adjusted (1)   expense (2)   expenses (3)   expenses (4)   charge, net (5)   Actual  
    Revenues $ 208,937 $ - $ - $ - $ - $ 208,937
    EBITDA $ 68,679 $ (7,141 ) $ (2,316 ) $ (39 ) $ (557 ) $ 58,626
    EBITDA margin 32.9 % (3.4 )% (1.1 )% - (0.3 )% 28.1 %
    Operating income $ 43,089 $ - $ (2,316 ) $ (39 ) $ (557 ) $ 40,177
    Operating income margin 20.6 % - (1.1 )% - (0.3 )% 19.2 %

    Pre tax income from continuing operations

    $ 29,004 $ - $ (2,316 ) $ (39 ) $ (557 ) $ 26,092
    Net income $ 18,815 $ - $ (1,723 ) $ (23 ) $ (366 ) $ 16,703
    Diluted earnings per share $ 0.40 $ - $ (0.04 ) $ - $ - $ 0.36
     
     
    Reconciliation of Adjusted Measurements to Actuals
      Six Months Ended June 30, 2013  
    Share-based Asset Loss from
    compensation Restructuring impairment discontinued
      As Adjusted (1)   expense (2)   expenses (3)   charge (5)   operation, net (6)   Actual  
    Revenues $ 194,647 $ - $ - $ - $ - $ 194,647
    EBITDA $ 75,883 $ (5,379 ) $ (718 ) $ (40,237 ) $ - $ 29,549
    EBITDA margin 39.0 % (2.8 )% (0.4 )% (20.7 )% - 15.2 %
    Operating income $ 52,961 $ - $ (718 ) $ (40,237 ) $ - $ 12,006
    Operating income margin 27.2 % - (0.4 )% (20.7 )% - 6.2 %

    Pre tax income (loss) from continuing operations

    $ 37,986 $ - $ (718 ) $ (40,237 ) $ - $ (2,969 )
    Net income (loss) $ 24,024 $ - $ (442 ) $ (25,782 ) $ (139 ) $ (2,339 )
    Diluted earnings (loss) per share $ 0.52 $ - $ (0.01 ) $ (0.56 ) $ - $ (0.05 )
         
    (1) This column represents a non-GAAP presentation even though some individual line items presented, such as revenues, are identical under both GAAP and the adjusted presentations.
    (2) Represents non-cash share-based expense associated with the granting of equity instruments and is excluded in the adjusted presentation.
    (3) Restructuring expenses represent costs relating primarily to the restructuring of our operations that are excluded in the adjusted presentation.
    (4) In 2014, represents acquisition activity costs.
    (5) In 2014, represents the additional loss upon completion of sale (offset by gains upon completion of sale) of certain assets that were written down to fair value in the second quarter of 2013 and is excluded in the adjusted presentation.
    In 2013, represents the impairment charge primarily for the write down on certain assets classified as held for sale and is excluded in the adjusted presentation.
    (6) In 2013, represents our Netherlands operation that was sold in December 2013 and reported as a discontinued operation.
     
     

    Mobile Mini, Inc.

    Non-GAAP Reconciliations

    (in thousands)/(includes effects of rounding)

         
    Three Months Ended June 30, Six Months Ended June 30,
    2014   2013 2014   2013

    Reconciliation of EBITDA to net cash provided by operating activities:

       
    EBITDA $ 31,000 $ (6,222 ) $ 58,626 $ 29,549
    Discontinued operation - (22 ) - (44 )
    Interest paid (10,131 ) (10,829 ) (12,291 ) (13,221 )
    Income and franchise taxes paid (689 ) (698 ) (778 ) (785 )
    Share-based compensation expense 2,977 3,743 7,141 5,379
    Asset impairment charge, net 274 39,704 557 39,704
    Gain on sale of lease fleet units (784 ) (2,381 ) (2,495 ) (5,448 )
    Loss on disposal of property, plant and equipment 287 90 359 62

    Changes in certain assets and liabilities, net of effect of businesses acquired:

    Receivables (2,585 ) (1,712 ) (1,260 ) (822 )
    Inventories (173 ) (848 ) 55 (1,602 )
    Deposits and prepaid expenses (580 ) 254 (1,856 ) (417 )
    Other assets and intangibles (6 ) (103 ) (11 ) (7 )
    Accounts payable and accrued liabilities   2,883       4,441     1,238       (334 )
    Net cash provided by operating activities $ 22,473     $ 25,417   $ 49,285     $ 52,014  
     
     

    Reconciliation of net income (loss) to EBITDA and adjusted EBITDA:

    Net income (loss) $ 9,263 $ (14,381 ) $ 16,703 $ (2,339 )
    Loss from discontinued operation, net of tax - 62 - 139
    Interest expense 7,097 7,439 14,084 14,974
    Income tax provision (benefit) 5,335 (8,126 ) 9,389 (769 )
    Depreciation and amortization   9,305       8,784     18,450       17,544  
    EBITDA 31,000 (6,222 ) 58,626 29,549
    Share-based compensation expense 2,977 3,743 7,141 5,379
    Restructuring expenses 1,731 343 2,316 718
    Acquisition expenses 33 - 39 -
    Asset impairment charge, net   274       40,237     557       40,237  
    Adjusted EBITDA $ 36,015     $ 38,101   $ 68,679     $ 75,883  
     
     

    Reconciliation of net cash provided by operating activities to free cash flow:

    Net cash provided by operating activities $ 22,473 $ 25,417 $ 49,285 $ 52,014
     
    Additions to lease fleet, excluding acquisitions (4,072 ) (7,970 ) (8,150 ) (14,297 )
    Proceeds from sale of lease fleet units 6,392 6,049 12,019 15,929
    Additions to property, plant and equipment (2,113 ) (5,374 ) (4,741 ) (9,654 )
    Proceeds from sale of property, plant and equipment   543       237     1,451       458  
    Net capital proceeds (expenditures), excluding acquisitions   750       (7,058 )   579       (7,564 )
               
    Free cash flow $ 23,223     $ 18,359   $ 49,864     $ 44,450  
     
     

    Mobile Mini, Inc.

    Condensed Consolidated Balance Sheets

    (in thousands except par value data)/(Includes effects of rounding)

           
    June 30, 2014December 31, 2013
    (unaudited) (audited)
    ASSETS
    Cash $ 568 $ 1,256
    Receivables, net 55,291 53,104
    Inventories 18,760 18,744
    Lease fleet, net 980,356 979,276
    Property, plant and equipment, net 90,155 85,153
    Assets held for sale - 980
    Deposits and prepaid expenses 8,025 6,116
    Other assets and intangibles, net 12,659 13,523
    Goodwill   527,660     519,222  
    Total assets $ 1,693,474   $ 1,677,374  
     
     
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Liabilities:
    Accounts payable $ 21,688 $ 18,862
    Accrued liabilities 56,783 65,308
    Lines of credit 300,125 319,314
    Obligations under capital leases 15,302 8,781
    Senior Notes 200,000 200,000
    Deferred income taxes   219,267     209,565  
    Total liabilities   813,165     821,830  
     
    Commitments and contingencies
     
    Stockholders' equity:
    Preferred stock: $.01 par value, 20,000 shares authorized, none issued - -

    Common stock: $.01 par value, 95,000 shares authorized, 48,881 issued and 46,685 outstanding at June 30, 2014 and 48,810 issued and 46,626 outstanding at December 31, 2013

    489 488
    Additional paid-in capital 559,590 550,387
    Retained earnings 368,536 359,778
    Accumulated other comprehensive loss (8,174 ) (15,440 )

    Treasury stock, at cost, 2,196 and 2,184 shares at June 30, 2014 and December 31, 2013, respectively

      (40,132 )   (39,669 )
    Total stockholders' equity   880,309     855,544  
    Total liabilities and stockholders' equity $ 1,693,474   $ 1,677,374  
     
     

    Mobile Mini, Inc.

    Condensed Consolidated Statements of Cash Flows

    (Unaudited)/(in thousands)/(includes effects of rounding)

       
    Six Months Ended June 30,
    2014     2013
    Cash Flows From Operating Activities:
    Net income (loss) $ 16,703 $ (2,339 )

    Adjustments to reconcile net income (loss) to net cash provided by operating activities:

    Asset impairment charge, net 557 39,704
    Provision for doubtful accounts 1,349 715
    Amortization of deferred financing costs 1,405 1,405
    Amortization of long-term liabilities 83 86
    Share-based compensation expense 7,141 5,379
    Depreciation and amortization 18,450 17,644
    Gain on sale of lease fleet units (2,495 ) (5,448 )
    Loss on disposal of property, plant and equipment 359 62
    Deferred income taxes 9,189 (980 )
    Foreign currency transaction loss 1 1

    Changes in certain assets and liabilities, net of effect of businesses acquired:

    Receivables (2,609 ) (1,537 )
    Inventories 55 (1,602 )
    Deposits and prepaid expenses (1,856 ) (417 )
    Other assets and intangibles (11 ) (7 )
    Accounts payable 2,431 1,433
    Accrued liabilities   (1,467 )   (2,085 )
    Net cash provided by operating activities   49,285     52,014  
     
    Cash Flows From Investing Activities:
    Cash paid for businesses acquired (16,260 ) -
    Additions to lease fleet (8,150 ) (14,297 )
    Proceeds from sale of lease fleet units 12,019 15,929
    Additions to property, plant and equipment (4,741 ) (9,654 )
    Proceeds from sale of property, plant, and equipment   1,451     458  
    Net cash used in investing activities   (15,681 )   (7,564 )
     
    Cash Flows From Financing Activities:
    Net repayments under lines of credit (19,189 ) (53,128 )
    Principal payments on notes payable - (265 )
    Principal payments on capital lease obligations (766 ) (191 )
    Issuance of common stock 2,062 6,395
    Dividend payments (15,719 ) -
    Purchase of treasury stock   (463 )   -  
    Net cash used in financing activities   (34,075 )   (47,189 )
     
    Effect of exchange rate changes on cash   (217 )   1,436  
     
    Net decrease in cash (688 ) (1,303 )
     
    Cash at beginning of period   1,256     1,937  
     
    Cash at end of period $ 568   $ 634  
     
    Supplemental Disclosure of Cash Flow Information:
    Equipment acquired through capital lease and financing obligations $ 7,286   $ -  
     


    The sale of our Netherlands operation in 2013 is reflected in the financial data herein as a discontinued operation.

    This news release includes the financial measures “EBITDA”, “adjusted EBITDA”, “EBITDA margin”, “adjusted EBITDA margin”, “adjusted SG&A”, “adjusted net income”, “adjusted diluted earnings per share” and “free cash flow.” These measurements are deemed “non-GAAP financial measures” under rules of the SEC, including Regulation G. This non-GAAP financial information may be determined or calculated differently by other companies.

    EBITDA is defined as net income before discontinued operation, net of taxes, interest expense, income taxes, depreciation and amortization, and, if applicable, debt restructuring or extinguishment costs, including any write-off of deferred financing costs. We further adjust EBITDA to exclude non-cash share-based compensation expense and to ignore the effect of what we consider transactions or events not related to our core business to arrive at adjusted EBITDA. The GAAP financial measure that is most directly comparable to EBITDA is net cash provided by operating activities. EBITDA and adjusted EBITDA margins are calculated by dividing consolidated EBITDA and adjusted EBITDA by total revenues. The GAAP financial measure that is most directly comparable to EBITDA margin is operating margin, which represents operating income divided by revenues. We present adjusted EBITDA and adjusted EBITDA margin because we believe they provide useful information regarding our ability to meet our future debt payment requirements, capital expenditures and working capital requirements and they provide an overall evaluation of our financial condition. We include adjusted EBITDA in this earnings announcement to provide transparency to investors. Adjusted EBITDA has certain limitations as an analytical tool and should not be used as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of our profitability or our liquidity. EBITDA margin is presented along with the operating margin so as not to imply that more emphasis should be placed on it than the corresponding GAAP measure.

    Free cash flow is defined as net cash provided by operating activities, minus or plus, net cash used in or provided by investing activities, excluding acquisitions and certain transactions. Free cash flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, the most directly comparable GAAP financial measure. We present free cash flow because we believe it provides useful information regarding our liquidity and ability to meet our short-term obligations. In particular, free cash flow indicates the amount of cash available after capital expenditures for, among other things, investments in the Company’s existing businesses, debt service obligations, pay authorized quarterly dividends and strategic acquisitions.

    Adjusted SG&A, adjusted net income and adjusted diluted earnings per share permit a comparative assessment of our SG&A expenses, net income and diluted earnings per share by excluding certain one-time expenses and restructuring expenses to make a more meaningful comparison of our operating performance.

    Earlier in this release, we provided a reconciliation of these adjusted measurements to actual results along with a reconciliation of EBITDA to net cash provided by operating activities, net income to EBITDA and adjusted EBITDA and net cash provided by operating activities to free cash flow.




    Mobile Mini, Inc.

    Mark Funk, 480-477-0241

    Executive VP & Chief Financial Officer

    www.mobilemini.com

    or

    INVESTOR RELATIONS COUNSEL:

    The Equity Group Inc.

    Fred Buonocore, 212-836-9607

    Linda Latman, 212-836-9609

    Source: Mobile Mini, Inc.


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