MOBILE MINI INC - 10-Q filing on 2017-07-21

Condensed Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2017

Organization Consolidation And Presentation Of Financial Statements [Abstract]

The following tables reflect the condensed consolidating financial information of the Company’s subsidiary guarantors of the Senior Notes and its non-guarantor subsidiaries. Separate financial statements of the subsidiary guarantors are not presented because the guarantee by each 100% owned subsidiary guarantor is full and unconditional, joint and several, subject to customary exceptions, and management has determined that such information is not material to investors.

MOBILE MINI, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS

As of June 30, 2017

(In thousands)

	Guarantors			Non- Guarantors			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	429		$	8,845		$	—		$	9,274
Receivables, net		72,431			19,959			—			92,390
Inventories		14,637			1,762			—			16,399
Rental fleet, net		807,230			156,911			—			964,141
Property, plant and equipment, net		130,370			20,266			—			150,636
Other assets		14,117			3,011			—			17,128
Intangibles, net		64,418			786			—			65,204
Goodwill		645,126			61,476			—			706,602
Intercompany receivables		145,954			4,541			(150,495	)		—
Total assets	$	1,894,712		$	277,557		$	(150,495	)	$	2,021,774
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable	$	22,438		$	8,270		$	—		$	30,708
Accrued liabilities		56,589			8,367			—			64,956
Lines of credit		637,651			—			—			637,651
Obligations under capital leases		49,148			154			—			49,302
Senior Notes, net		245,531			—			—			245,531
Deferred income taxes		213,303			18,276			—			231,579
Intercompany payables		838			1,658			(2,496	)		—
Total liabilities		1,225,498			36,725			(2,496	)		1,259,727
Commitments and contingencies
Stockholders' equity:
Common stock		495			—			—			495
Additional paid-in capital		597,658			147,999			(147,999	)		597,658
Retained earnings		217,844			162,281			—			380,125
Accumulated other comprehensive loss		—			(69,448	)		—			(69,448	)
Treasury stock, at cost		(146,783	)		—			—			(146,783	)
Total stockholders' equity		669,214			240,832			(147,999	)		762,047
Total liabilities and stockholders' equity	$	1,894,712		$	277,557		$	(150,495	)	$	2,021,774

MOBILE MINI, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS

As of December 31, 2016

(In thousands)

	Guarantors			Non- Guarantors			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	1,260		$	2,877		$	—		$	4,137
Receivables, net		80,476			18,699			—			99,175
Inventories		14,526			886			—			15,412
Rental fleet, net		803,553			146,512			—			950,065
Property, plant and equipment, net		129,458			19,739			—			149,197
Other assets		13,189			1,741			—			14,930
Intangibles, net		67,487			933			—			68,420
Goodwill		645,126			58,432			—			703,558
Intercompany receivables		146,016			4,513			(150,529	)		—
Total assets	$	1,901,091		$	254,332		$	(150,529	)	$	2,004,894
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable	$	20,218		$	7,170		$	—		$	27,388
Accrued liabilities		57,025			7,101			—			64,126
Lines of credit		640,975			185			—			641,160
Obligations under capital leases		50,507			197			—			50,704
Senior Notes, net		245,212			—			—			245,212
Deferred income taxes		224,212			16,478			—			240,690
Intercompany payables		384			2,146			(2,530	)		—
Total liabilities		1,238,533			33,277			(2,530	)		1,269,280
Commitments and contingencies
Stockholders' equity:
Common stock		493			—			—			493
Additional paid-in capital		592,071			147,999			(147,999	)		592,071
Retained earnings		208,793			154,103			—			362,896
Accumulated other comprehensive loss		—			(81,047	)		—			(81,047	)
Treasury stock, at cost		(138,799	)		—			—			(138,799	)
Total stockholders' equity		662,558			221,055			(147,999	)		735,614
Total liabilities and stockholders' equity	$	1,901,091		$	254,332		$	(150,529	)	$	2,004,894

Condensed Consolidating Statements of Income

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

Three Months Ended June 30, 2017

(In thousands)

	Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues:
Rental	$	98,215		$	19,636		$	—		$	117,851
Sales		6,212			2,189			—			8,401
Other		365			73			—			438
Total revenues		104,792			21,898			—			126,690
Costs and expenses:
Rental, selling and general expenses		69,799			13,051			—			82,850
Cost of sales		3,700			1,708			—			5,408
Restructuring expenses		538			—			—			538
Depreciation and amortization		13,930			1,812			—			15,742
Total costs and expenses		87,967			16,571			—			104,538
Income from operations		16,825			5,327			—			22,152
Other income (expense):
Interest income		2,664			2			(2,650	)		16
Interest expense		(11,328	)		(129	)		2,650			(8,807	)
Foreign currency exchange		—			(18	)		—			(18	)
Income before income tax provision		8,161			5,182			—			13,343
Income tax provision		3,655			911			—			4,566
Net income	$	4,506		$	4,271		$	—		$	8,777

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

Three Months Ended June 30, 2016

(In thousands)

	Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues:
Rental	$	95,555		$	21,218		$	—		$	116,773
Sales		5,865			477			—			6,342
Other		1,687			47			—			1,734
Total revenues		103,107			21,742			—			124,849
Costs and expenses:
Rental, selling and general expenses		64,935			13,102			—			78,037
Cost of sales		3,361			317			—			3,678
Restructuring expenses		1,324			—			—			1,324
Depreciation and amortization		14,369			1,900			—			16,269
Total costs and expenses		83,989			15,319			—			99,308
Income from operations		19,118			6,423			—			25,541
Other income (expense):
Interest income		2,653			—			(2,653	)		—
Interest expense		(10,519	)		(136	)		2,653			(8,002	)
Debt extinguishment expense		(9,192	)		—			—			(9,192	)
Deferred financing costs write-off		(2,271	)		—			—			(2,271	)
Foreign currency exchange		—			(4	)		—			(4	)
(Loss) income before income tax provision		(211	)		6,283			—			6,072
Income tax provision		924			1,076			—			2,000
Net (loss) income	$	(1,135	)	$	5,207		$	—		$	4,072

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

Six Months Ended June 30, 2017

(In thousands)

	Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues:
Rental	$	194,158		$	38,435		$	—		$	232,593
Sales		12,163			4,216			—			16,379
Other		1,061			184			—			1,245
Total revenues		207,382			42,835			—			250,217
Costs and expenses:
Rental, selling and general expenses		135,380			25,829			—			161,209
Cost of sales		7,187			3,333			—			10,520
Restructuring expenses		1,437			—			—			1,437
Depreciation and amortization		27,438			3,568			—			31,006
Total costs and expenses		171,442			32,730			—			204,172
Income from operations		35,940			10,105			—			46,045
Other income (expense):
Interest income		5,314			2			(5,300	)		16
Interest expense		(22,254	)		(255	)		5,300			(17,209	)
Foreign currency exchange		—			(27	)		—			(27	)
Income before income tax provision		19,000			9,825			—			28,825
Income tax provision		8,248			1,648			—			9,896
Net income	$	10,752		$	8,177		$	—		$	18,929

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

Six Months Ended June 30, 2016

(In thousands)

	Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues:
Rental	$	192,445		$	41,684		$	—		$	234,129
Sales		11,826			1,407			—			13,233
Other		1,915			105			—			2,020
Total revenues		206,186			43,196			—			249,382
Costs and expenses:
Rental, selling and general expenses		128,174			26,165			—			154,339
Cost of sales		7,271			1,018			—			8,289
Restructuring expenses		3,572			—			—			3,572
Depreciation and amortization		27,746			3,700			—			31,446
Total costs and expenses		166,763			30,883			—			197,646
Income from operations		39,423			12,313			—			51,736
Other income (expense):
Interest income		5,307			—			(5,307	)		—
Interest expense		(21,388	)		(405	)		5,307			(16,486	)
Debt extinguishment expense		(9,192	)		—			—			(9,192	)
Deferred financing costs write-off		(2,271	)		—			—			(2,271	)
Foreign currency exchange		—			(4	)		—			(4	)
Income before income tax provision		11,879			11,904			—			23,783
Income tax provision		6,569			2,144			—			8,713
Net income	$	5,310		$	9,760		$	—		$	15,070

Condensed Consolidating Statements of Comprehensive Income

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended June 30, 2017

(In thousands)

	Guarantors		Non- Guarantors		Eliminations		Consolidated
Net income	$	4,506	$	4,271	$	—	$	8,777
Foreign currency translation adjustment		—		9,096		—		9,096
Comprehensive income	$	4,506	$	13,367	$	—	$	17,873

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended June 30, 2016

(In thousands)

	Guarantors			Non- Guarantors			Eliminations		Consolidated
Net (loss) income	$	(1,135	)	$	5,207		$	—	$	4,072
Foreign currency translation adjustment		—			(15,272	)		—		(15,272	)
Comprehensive loss	$	(1,135	)	$	(10,065	)	$	—	$	(11,200	)

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

Six Months Ended June 30, 2017

(In thousands)

	Guarantors		Non- Guarantors		Eliminations		Consolidated
Net income	$	10,752	$	8,177	$	—	$	18,929
Foreign currency translation adjustment		—		11,599		—		11,599
Comprehensive income	$	10,752	$	19,776	$	—	$	30,528

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

Six Months Ended June 30, 2016

(In thousands)

	Guarantors		Non- Guarantors			Eliminations		Consolidated
Net income	$	5,310	$	9,760		$	—	$	15,070
Foreign currency translation adjustment		—		(18,985	)		—		(18,985	)
Comprehensive income (loss)	$	5,310	$	(9,225	)	$	—	$	(3,915	)

Condensed Consolidating Statements of Cash Flows

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Six Months Ended June 30, 2017

(In thousands)

	Guarantors			Non- Guarantors			Eliminations		Consolidated
Cash flows from operating activities:
Net income	$	10,752		$	8,177		$	—	$	18,929
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for doubtful accounts		1,996			206			—		2,202
Amortization of deferred financing costs		1,030			—			—		1,030
Amortization of long-term liabilities		65			—			—		65
Share-based compensation expense		3,672			148			—		3,820
Depreciation and amortization		27,438			3,568			—		31,006
Gain on sale of rental fleet units		(2,657	)		(169	)		—		(2,826	)
Loss on disposal of property, plant and equipment		62			220			—		282
Deferred income taxes		8,266			885			—		9,151
Foreign currency exchange		—			27			—		27
Changes in certain assets and liabilities, net of effect of businesses acquired:
Receivables		6,049			(464	)		—		5,585
Inventories		(110	)		(794	)		—		(904	)
Other assets		(1,636	)		(1,158	)		—		(2,794	)
Accounts payable		(1,881	)		(311	)		—		(2,192	)
Accrued liabilities		(1,030	)		870			—		(160	)
Intercompany		237			(237	)		—		—
Net cash provided by operating activities		52,253			10,968			—		63,221
Cash flows from investing activities:
Additions to rental fleet, excluding acquisitions		(18,391	)		(4,636	)		—		(23,027	)
Proceeds from sale of rental fleet		5,709			574			—		6,283
Additions to property, plant and equipment, excluding acquisitions		(6,976	)		(1,731	)		—		(8,707	)
Proceeds from sale of property, plant and equipment		67			701			—		768
Net cash used in investing activities		(19,591	)		(5,092	)		—		(24,683	)
Cash flows from financing activities:
Net repayments under lines of credit		(3,324	)		(185	)		—		(3,509	)
Deferred financing costs		(12	)		—			—		(12	)
Principal payments on capital lease obligations		(3,694	)		(42	)		—		(3,736	)
Issuance of common stock		1,640			—			—		1,640
Dividend payments		(20,119	)		—			—		(20,119	)
Purchase of treasury stock		(7,984	)		—			—		(7,984	)
Net cash used in financing activities		(33,493	)		(227	)		—		(33,720	)
Effect of exchange rate changes on cash		—			319			—		319
Net (decrease) increase in cash		(831	)		5,968			—		5,137
Cash and cash equivalents at beginning of period		1,260			2,877			—		4,137
Cash and cash equivalents at end of period	$	429		$	8,845		$	—	$	9,274

MOBILE MINI, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Six Months Ended June 30, 2016

(In thousands)

	Guarantors			Non- Guarantors			Eliminations		Consolidated
Cash flows from operating activities:
Net income	$	5,310		$	9,760		$	—	$	15,070
Adjustments to reconcile net income to net cash provided by operating activities:
Debt extinguishment expense		9,192			—			—		9,192
Deferred financing costs write-off		2,271			—			—		2,271
Provision for doubtful accounts		2,434			212			—		2,646
Amortization of deferred financing costs		941			7			—		948
Amortization of long-term liabilities		58			—			—		58
Share-based compensation expense		4,106			139			—		4,245
Depreciation and amortization		27,746			3,700			—		31,446
Gain on sale of rental fleet units		(2,500	)		(282	)		—		(2,782	)
Loss on disposal of property, plant and equipment		521			168			—		689
Deferred income taxes		6,399			2,143			—		8,542
Foreign currency exchange		—			4					4
Changes in certain assets and liabilities, net of effect of businesses acquired:
Receivables		(10,758	)		(1,538	)		—		(12,296	)
Inventories		(2,173	)		383			—		(1,790	)
Other assets		540			(58	)		—		482
Accounts payable		3,029			2,736			—		5,765
Accrued liabilities		202			18			—		220
Intercompany		764			(764	)		—		—
Net cash provided by operating activities		48,082			16,628			—		64,710
Cash flows from investing activities:
Cash paid for businesses acquired, net of cash acquired		(9,206	)		—			—		(9,206	)
Additions to rental fleet, excluding acquisitions		(20,657	)		(7,501	)		—		(28,158	)
Proceeds from sale of rental fleet		6,332			1,077			—		7,409
Additions to property, plant and equipment, excluding acquisitions		(13,301	)		(5,962	)		—		(19,263	)
Proceeds from sale of property, plant and equipment		1,166			449			—		1,615
Net cash used in investing activities		(35,666	)		(11,937	)		—		(47,603	)
Cash flows from financing activities:
Net repayments under lines of credit		(19,513	)		(1,448	)		—		(20,961	)
Proceeds from issuance of 5.875% senior notes due 2024		250,000			—			—		250,000
Redemption of 7.875% senior notes due 2020		(200,000	)		—			—		(200,000	)
Debt extinguishment expense		(9,192	)		—			—		(9,192	)
Deferred financing costs		(4,916	)		—			—		(4,916	)
Principal payments on capital lease obligations		(2,848	)		(72	)		—		(2,920	)
Issuance of common stock		92			—			—		92
Dividend payments		(18,236	)		—			—		(18,236	)
Purchase of treasury stock		(7,096	)		—			—		(7,096	)
Net cash used in financing activities		(11,709	)		(1,520	)		—		(13,229	)
Effect of exchange rate changes on cash		—			(152	)		—		(152	)
Net increase in cash		707			3,019			—		3,726
Cash and cash equivalents at beginning of period		1,033			580			—		1,613
Cash and cash equivalents at end of period	$	1,740		$	3,599		$	—	$	5,339