Mobile Mini, Inc. (MINI)
Q4 2008 Earnings Call
February 26, 2009 11:00 AM ET
Steven G. Bunger - President and Chief Executive Officer
Mark E. Funk - Executive Vice President and Chief Financial Officer
Adrienne Colby - Deutsche Bank Securities, Inc.
Theodor Kundtz - Needham & Company, Inc
David Gold - Sidoti & Company
Scott Schneeberger - Oppenheimer & Co
Previous Statements by MINI
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I would now like to turn the call over to Mr. Steve Bunger, President and CEO.
Steven G. Bunger
Thank you and good morning. I want to welcome everyone to Mobile Mini's 2008 fourth quarter results conference call. And with me is Mark Trachtenberg (ph), our Executive Vice President and Chief Financial Officer.
To start with, Mark is going to read the disclaimer, outline the press release give you his comments. Following that I will give you my comments. And then we'll open the call up to questions and answers.
So with that said, I'll turn the call over to Mark.
Mark E. Funk
Hi, good morning all. Thank you, Steve. This is Mark Funk and I'd like to walk you through some prepared comments. We issued a press release this morning detailing our fourth quarter and fiscal year ended 2008 operating results. This release is available on our website and can also be accessed through various web-based news services. Form 8-K containing the press release has been filed and is also now available.
So before we get started, I'd like to read you our legal disclaimer. This call may include forward-looking statements, particularly regarding earnings estimates and anticipated cost savings resulting from our merger with Mobile Storage Group, 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 this date and Mobile Mini disclaims any intent or obligation to update forward-looking statements.
So unless otherwise noted, all results discussed in this call will be our non-GAAP financial results. A discussion of debt extinguishment expense is excluded from our 2008 non-GAAP operating results, in addition to integration, merger, restructuring, and goodwill impairment related expenses are excluded from our 2008 non-GAAP operating results. These items are included in our press release which I discussed was issued this morning.
In this conference call, we will discuss non-GAAP financial measures such as EBITDA and free cash flow. Reconciliations of how we define and arrive at EBITDA and free cash flow are included in our Form 8-K.
Revenues during the fourth quarter increased 47% to $123 million from $83.6 million last year. Lease revenue increased as well 47.3% to $109.4 million from $74.2 million last year.
EBITDA increased 78.6% to 57.9 million from last year's EBITDA of $32.4 million. And net income for the quarter ended December 31, 2008 increased to $18.2 million or $0.42 per diluted share as compared to net income of $12.4 million or $0.36 per diluted share for the same quarter last year.
The company's fourth quarter operating margin increased to 47.1% from 38.8% during the fourth quarter of fiscal 2007.
Our improved results in margins are primarily from the 7.7 million of cost synergies achieved in connection with our merger with Mobile Storage Group in June of last year. This merger enabled us to combine branch operations across the country and to take advantage of the operating leverage inherent in our business. In addition, we're able to eliminate duplicate corporate overhead.
These cost reductions were offset in part by continued weakness in our rentals to non-residential construction segment. As you all are aware we're in the midst of a downturn in non-residential construction activity which can been seen in all our markets, and continues to be more severe in California, Arizona and Florida.
As a result of the downturn in non-res construction as well as the overall economy, leasing revenues in the fourth quarter declined approximately 8% from third quarter 2008 leasing levels. Our fleet utilization for the fourth quarter was 73.9% versus 74.8% for the third quarter. In addition, excluding several one-time pick-up adjustments relating to fuel and a decrease in our bonus accrual EBITDA would have been approximately $52 million for the fourth quarter of 2008.
Is also worth noting that the fourth quarter is typically our strongest quarter of the year due to our seasonal rental business in the U.S.
For the fiscal year ending December 31, 2008 revenues reached 415.4 million and EBITDA totaled approximately 175 million. The good news is we achieved our EBITDA guidance and we are at the high end of EPS guidance with earnings per share at a $1.49 for the full year. And this is despite lower revenues due to the current business environment.
During the year ended December 31, 2008 we significantly cut back on our fleet capital expenditures and generated free cash flow for the first time in our history. We generated $33.9 million of free cash flow versus a cash requirement of 37.6, during the same period last year.