WillScot Mobile Mini Holdings Announces Second Quarter Results and Updates 2021 Outlook

Leasing Operations Accelerate Across All Segments, Successful ERP Cutover Completed, Over $216 Million Returned to Shareholders Year-To-Date, Investor Day Announced In November

Phoenix, Arizona, UNITED STATES


PHOENIX, Aug. 05, 2021 (GLOBE NEWSWIRE) -- WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini Holdings” or the “Company”) (Nasdaq: WSC), the North American leader in innovative flexible work space and portable storage solutions, today announced second quarter 2021 results and provided an update on operations, the current market environment, and merger integration activities.

The Company will host an investor day in New York on November 8, 2021. Further details will be provided at a later date.

On July 1, 2020, Williams Scotsman, Inc. closed the merger with Mobile Mini, Inc. (the "Merger") and assumed the name WillScot Mobile Mini Holdings Corp. (Nasdaq: WSC). Our reported results only include Mobile Mini for the periods subsequent to the Merger. Our Pro Forma Results include Mobile Mini's results as if the Merger and financing transactions had occurred on January 1, 2019, which we believe is a better representation of how the combined company has performed over time. Following the Merger, we expanded our reporting segments from two segments to four reporting segments. The North America Modular segment aligns with the WillScot legacy business prior to the Merger and the North America Storage, UK Storage and Tank and Pump segments align with the Mobile Mini segments prior to the Merger.

WillScot Mobile Mini Holdings’ Financial Highlights1
Highlights of Second Quarter Results

  • Total revenues of $461.1 million increased by $204.2 million relative to prior year, or 79.5%, driven by the addition of Mobile Mini's revenues to our consolidated results, upon closing of the Merger on July 1, 2020, as well as due to increased core leasing revenues in the NA Modular segment.
    • Modular space monthly rental rates in the NA Modular segment increased by 19.7% year over year while delivery volumes increased 12.0% year over year.
  • Adjusted EBITDA of $175.5 million increased by $78.0 million, or 80.0% year over year, driven both by the addition of Mobile Mini to our results and 6.2% year over year organic growth in the NA Modular segment.
  • Adjusted EBITDA Margin of 38.1% increased by 10 basis points ("bps") relative to prior year, driven by the addition of Mobile Mini's higher margin portable storage business, and partly offset by accelerating activations and associated variable costs and delivery and installation revenues in the quarter.
  • Net income of $20.4 million increased by $34.5 million year over year and included $15.0 million of integration and restructuring charges, an $8.0 million non-cash tax expense due to a statutory rate increase in the UK, a $2.8 million non-cash loss on debt extinguishment, and a $0.6 million fair value gain on warrant liabilities. Net Income Excluding Gain/Loss from Warrants of $19.8 million increased by $7.0 million year over year.
  • Generated $82.1 million of free cash flow, an increase of $43.1 million or 110% relative to prior year, and representing a free cash flow margin of 18%.
  • Maintained leverage at 3.7x our pro forma last-twelve-months Adjusted EBITDA of $682.3 million while repurchasing $132.7 million of common stock and warrants.
  • Redeemed $58.5 million of our 6.125% senior notes due 2025, using capacity available in our lower cost ABL facility.

Highlights of Second Quarter Pro Forma Results

  • Pro Forma total revenues increased 18.1% or $70.6 million relative to prior year, driven by increases in leasing revenue and delivery and installation revenue.
  • Leasing revenues of $343.2 million increased by 18.2% year over year due to continued increases in pricing and value-added products and stabilization of unit on rent volumes.
    • In NA Modular, modular space unit monthly rental rates increased by 19.7%. In NA Storage, portable storage unit and modular space unit monthly rental rates increased by 10.3%. In UK Storage, modular space monthly rental rates increased 39.9%.
    • Modular space unit deliveries in NA Modular increased by 12%.
    • Portable storage and modular space unit deliveries in NA Storage increased 42%, which is in line with 2019 delivery levels.
  • Adjusted EBITDA of $175.5 million, increased by $21.7 million, or 14.1%, year over year on a pro forma basis, with strong growth across all segments.
  • Adjusted EBITDA Margin of 38.1% decreased by 130 bps relative to prior year on a pro forma basis as expected due to increased activity levels. Accelerating deliveries created incremental variable costs and increased delivery and installation revenues, which are lower margin revenues compared to total revenues.

Refer to the Supplemental Pro Forma Financial Information section on Form 10-Q to be filed with the SEC and made available on the WillScot Mobile Mini Holdings Corp. investor relations website for full reconciliations of our reported and pro forma results.

 Three Months Ended June 30, Six Months Ended June 30,
(in thousands)2021 2020 2021 2020
Revenue$461,102  $256,862   $886,425  $512,683 
Consolidated net income (loss)$20,371  $(14,130)  $24,818  $77,525 
Adjusted EBITDA1$175,495  $97,520   $339,080  $187,062 
Net cash provided by operating activities$139,537  $75,379   $261,608  $113,727 
Free Cash Flow1$82,056  $38,996   $173,216  $46,804 


 Three Months Ended June 30, Six Months Ended June 30,
Pro Forma Adjusted EBITDA1 by Segment (in thousands)2021 2020 2021 2020
NA Modular$103,545  $97,520  $200,916  $187,064 
NA Storage49,526  40,770  95,848  84,764 
UK Storage12,328  6,853  23,392  13,258 
Tank and Pump10,096  8,659  18,924  18,136 
Consolidated Adjusted EBITDA$175,495  $153,802  $339,080  $303,222 

Management Commentary1

Brad Soultz, Chief Executive Officer of WillScot Mobile Mini Holdings, commented "our second quarter results were excellent. Our team proved once again that we can deliver operationally while executing a complex integration with precision. And our diversified portfolio is positioned for growth through a powerful combination of internal initiatives and end market strength. In our NA Modular segment, units on rent stabilized sequentially, as deliveries across our end markets ramped. Historical pricing trends accelerated at a record pace, with a 19.7% year over year increase in average monthly rental rate, underpinned by increases in core pricing and VAPS penetration and augmented by the return of shorter duration special events as COVID restrictions relaxed relative to last year. Our NA Storage segment demonstrated impressive rate improvement, with a 10.3% year over year price increase as we focused on rates on new activations of storage units and continued core pricing increases on the ground level office fleet. Our UK Storage segment booked another tremendous quarter, with blended rates up 26.4%, units on rent up 13.5%, and Adjusted EBITDA up nearly 80% year over year. Finally, our Tank & Pump segment increased its OEC utilization to 71.2% and inflected strongly, generating year over year Revenue and EBITDA growth in the quarter as end markets recovered."

Soultz continued, "While these results are outstanding, I'm most proud of the relentless focus demonstrated by our team as we migrated the legacy WillScot business onto Mobile Mini's SAP platform. This work was painstaking and all-consuming for many on our team, yet we executed flawlessly while minimizing disruptions in the business. This ERP cutover established a foundation from which we will build and, on the one-year anniversary of the WillScot and Mobile Mini merger, is the catalyst which will allow us to begin executing our strategy as a combined company."

Tim Boswell, Chief Financial Officer of WillScot Mobile Mini Holdings, commented "in the second quarter, we saw improvement across virtually every financial and operational metric in our business. Cash generation remains robust, with $82.1 million in free cash flow in the quarter and a 20% free cash flow margin in the twelve months since the merger closed, despite cash costs from our integration efforts over that period and the fact that we are only just beginning to realize synergies from the Mobile Mini merger. With the SAP migration complete, synergy realization will accelerate as our teams restore their focus on the portfolio of commercial and operational value creation levers that we have identified. Our outlook for the remainder of 2021 and our run-rate expectations for 2022 continue to improve as reflected in our updated financial guidance. All of these factors together gave us confidence to put our balance sheet to work in the quarter, maintaining leverage at 3.7x, repurchasing $135 million of common stock and warrants, and redeeming $58.5 million of our senior notes due 2025. With the most difficult phase of the integration behind us, we are squarely focused on the future and unlocking the value in this platform, and we look forward to discussing these opportunities at our Investor Day on November 8th in New York."

Second Quarter 2021 Results1

Total revenues increased 79.5% to $461.1 million, while leasing revenues increased 80.5% versus the prior year quarter driven primarily by the addition of Mobile Mini's revenues to our consolidated results as well as due to increased leasing revenues in the NA Modular segment.

  • Average modular space units on rent increased 23,372 units, or 26.8%, and average portable storage units on rent increased 135,867 units, both driven by the Mobile Mini Merger.
  • Average modular space monthly rental rate increased $67, or 10.0% to $736 driven by a $132, or 19.7% increase in the NA Modular segment, offset by the dilutive impact of lower rates due to mix on the Mobile Mini modular space units.
  • Average portable storage monthly rental rate increased $19, or 15.8% to $139 driven by the accretive impact of higher rates from the Mobile Mini portable storage fleet.
  • NA Modular segment revenue increased $32.5 million, or 12.7%, to $289.4 million, primarily driven by a $27.5 million, or 14.5%. increase to our core leasing revenue due to continued growth of pricing and value added products:
    • NA Modular space average monthly rental rate of $801 increased 19.7% year over year, representing a continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.
    • Average modular space units on rent decreased 2,342, or 2.7% year over year driven by lower deliveries, during 2020 as a result of the COVID-19 pandemic. Sequentially from March 31, 2021, average modular space units on rent were flat.

Adjusted EBITDA of $175.5 million increased $78.0 million, or 80.0% year over year. Of this increase, $71.9 million was driven by the addition of Mobile Mini to our consolidated results, with the remainder driven by strong organic growth in the NA Modular segment.

  • Adjusted EBITDA in our NA Modular segment increased $6.0 million, or 6.2% to $103.5 million primarily driven by a $9.1 million, or 6.0%, increase in leasing and services gross profit excluding depreciation driven by increased pricing and VAPS. These increases more than offset a $14.8 million increase in variable leasing costs, driven by the 12% increase in delivery volumes versus prior year.
  • Consolidated Adjusted EBITDA Margin was 38.1% in the second quarter and increased 10 bps versus prior year, driven by the addition of Mobile Mini's higher margin portable storage business, offset by a higher proportion of delivery and installation revenues to total revenues and the increased variable costs in the current year quarter.

Net income of $20.4 million for the three months ended June 30, 2021 included a $0.6 million gain on the change in fair value of common stock warrant liabilities. Net Income Excluding Gain/Loss from Warrants of $19.8 million for the three months ended June 30, 2021, represented an increase of $7.0 million, and included a $2.8 million loss on extinguishment of debt related to the partial redemption of the 2025 Secured Notes, a $8.0 million non-cash tax expense due to a statutory rate increase in the UK, and $15.0 million of discrete costs expensed in the period related to transaction and integration activities. Discrete costs in the period included $7.6 million of integration costs and $7.4 million of restructuring costs, lease impairment expense and other related charges.

Free Cash Flow increased by $43.1 million year over year to $82.1 million, representing a 17.8% free cash flow margin.

Second Quarter 2020 Pro Forma Results1
Total revenues increased 18.1% or $70.6 million on a pro forma basis to $461.1 million driven by an increase in leasing revenues of $52.9 million, or 18.2% year over year.

  • Consolidated average modular space monthly rental rates increased $122, or 19.9% year over year driven by a $132, or 19.7%, increase in the NA Modular segment and a $110, or 23.8% increase in the NA Storage segment, and a $125, or 39.9% increase in the UK Storage segment.
  • Consolidated average portable storage monthly rental rates increased $10, or 7.8% versus prior year.
  • Average modular space units on rent declined 0.3% year over year driven by lower deliveries during 2020 as a result of the COVID-19 pandemic. However, average modular space units on rent improved 0.1% sequentially from Q1 to Q2. Portable storage units on rent increased 8.2% year over year.

Adjusted EBITDA of $175.5 million, represented a $21.7 million, or 14.1%, increase year over year, with strong growth across the NA Modular, NA Storage, UK Storage and Tank and Pump segments.

Adjusted EBITDA margin contracted 130 bps year over year to 38.1% as expected, driven by a higher proportion of delivery and installation revenues to total revenues and a $23.4 million increase in variable costs to support higher activity levels in the current year quarter across all segments.

Capitalization and Liquidity Update1,3
As of June 30, 2021

  • Generated $82.1 million of free cash flow in the second quarter and a 20% free cash flow margin over the last twelve months.
  • Repurchased 3.9 million shares for $108.2 million in connection with a secondary offering and repurchased an additional $26.5 million of common stock and warrants, returning a total of $134.7 million to our shareholders.
  • Redeemed $58.5 million of our 6.125% senior notes due 2025, refinancing this balance to our lower-cost asset-based revolving credit facility.
  • Over $0.9 billion of excess availability under the asset-based revolving credit facility, a flexible covenant structure, and accelerating free cash flow provide ample liquidity to fund multiple capital allocation alternatives.
  • Weighted average interest rate is approximately 3.8% and annual cash interest expense based on the current debt structure is approximately $98 million.
  • No debt maturities prior to 2025.
  • Maintained leverage at 3.7x our pro forma last-twelve-months Adjusted EBITDA of $682.3 million and are on a rapid deleveraging trajectory.

2021 Outlook1, 2, 3

This guidance is subject to risks and uncertainties, including those described in "Forward-Looking Statements" below.

 2020 Pro Forma Results Prior 2021 Outlook Current 2021 Outlook
Revenue$1,652 million $1,750 million - $1,830 million $1,800 million - $1,850 million
Adjusted EBITDA1,2$646 million $690 million - $720 million $710 million - $730 million
Net CAPEX2,3$161 million $190 million - $230 million $200 million - $230 million

1 - Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow are non-GAAP financial measures. Further information and reconciliations for these Non-GAAP measures to the most directly comparable financial measure under generally accepted accounting principles in the US ("GAAP") is included at the end of this press release.
2 - Information reconciling forward-looking Adjusted EBITDA and Net CAPEX to GAAP financial measures is unavailable to the Company without unreasonable effort and therefore no reconciliation to the most comparable GAAP measures is provided.
3 - Net CAPEX is a non-GAAP financial measure. Please see the non-GAAP reconciliation tables included at the end of this press release.

Non-GAAP Financial Measures
This press release includes non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Free Cash Flow Margin, Pro Forma Revenue, Adjusted Gross Profit, Adjusted Gross Profit Percentage, Net Income Excluding Gain/Loss from Warrants, and Net CAPEX. Adjusted EBITDA is defined as net income (loss) before income tax expense, net interest expense, depreciation and amortization adjusted for non-cash items considered non-core to business operations including net currency gains and losses, goodwill and other impairment charges, restructuring costs, costs to integrate acquired companies, costs incurred related to transactions, non-cash charges for stock compensation plans, gains and losses resulting from changes in fair value and extinguishment of warrant liabilities, and other discrete expenses. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue. Free Cash Flow is defined as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities. Net CAPEX is defined as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities. Free Cash Flow Margin is defined as Free Cash Flow divided by Total Revenue. Our management believes that the presentation of Net CAPEX provides useful information to investors regarding the net capital invested into our rental fleet and plant, property and equipment each year to assist in analyzing the performance of our business. Pro Forma Revenue is defined the same as revenue, but includes pre-acquisition results from Mobile Mini for all periods presented. Adjusted Gross Profit is defined as gross profit plus depreciation on rental equipment. Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue. Net Income Excluding Gain/Loss from Warrants is defined as Net Income plus or minus the impact of the change in the fair value of the warrant liability. The Company believes that our financial statements that will include the impact of this mark-to-market expense or income may not be necessarily reflective of the actual financial performance of our business. The Company believes that Adjusted EBITDA and Adjusted EBITDA margin are useful to investors because they (i) allow investors to compare performance over various reporting periods on a consistent basis by removing from operating results the impact of items that do not reflect core operating performance; (ii) are used by our board of directors and management to assess our performance; (iii) may, subject to the limitations described below, enable investors to compare the performance of the Company to its competitors; and (iv) provide additional tools for investors to use in evaluating ongoing operating results and trends. The Company believes that pro forma revenue is useful to investors because they allow investors to compare performance of the combined Company over various reporting periods on a consistent basis. The Company believes that Net CAPEX provide useful additional information concerning cash flow available to meet future debt service obligations. However, Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. These non-GAAP measures should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP. Other companies may calculate Adjusted EBITDA and other non-GAAP financial measures differently, and therefore the Company's non-GAAP financial measures may not be directly comparable to similarly-titled measures of other companies. For reconciliation of the non-GAAP measures used in this press release (except as explained below), see “Reconciliation of Non-GAAP Financial Measures" included in this press release.

Information reconciling forward-looking Adjusted EBITDA to GAAP financial measures is unavailable to the Company without unreasonable effort. We cannot provide reconciliations of forward-looking Adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of our control and/or cannot be reasonably predicted, such as the provision for income taxes. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the Company without unreasonable effort. Although we provide a range of Adjusted EBITDA that we believe will be achieved, we cannot accurately predict all the components of the Adjusted EBITDA calculation. The Company provides Adjusted EBITDA guidance because we believe that Adjusted EBITDA, when viewed with our results under GAAP, provides useful information for the reasons noted above.

Conference Call Information

WillScot Mobile Mini Holdings will host a conference call and webcast to discuss its second quarter 2021 results and outlook at 10 a.m. Eastern Time on Friday, August 6, 2021. The live call may be accessed by dialing (855) 312-9420 (US/Canada toll-free) or (210) 874-7774 (international) and asking to be connected to the WillScot Mobile Mini Holdings call. A live webcast will also be accessible via the "Events & Presentations" section of the Company's investor relations website www.willscotmobilemini.com. Choose "Events" and select the information pertaining to the WillScot Mobile Mini Holdings Second Quarter 2021 Conference Call. Additionally, there will be slides accompanying the webcast. Please allow at least 15 minutes prior to the call to register, download and install any necessary software. For those unable to listen to the live broadcast, an audio webcast of the call will be available for 60 days on the Company’s investor relations website.

About WillScot Mobile Mini Holdings

WillScot Mobile Mini Holdings trades on the Nasdaq stock exchange under the ticker symbol “WSC.” Headquartered in Phoenix, Arizona, the Company is a leading business services provider specializing in innovative flexible workspace and portable storage solutions. WillScot Mobile Mini services diverse end markets across all sectors of the economy from a network of approximately 270 branch locations and additional drop lots throughout the United States, Canada, Mexico, and the United Kingdom.

Forward-Looking Statements

This press release contains forward-looking statements (including the guidance/outlook contained herein) within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. The words "estimates," "expects," "anticipates," "believes," "forecasts," "plans," "intends," "may," "will," "should," "shall," "outlook" and variations of these words and similar expressions identify forward-looking statements, which are generally not historical in nature. Certain of these forward-looking statements include statements relating to: the acceleration of synergies; our ability to continue to improve results; our future cash flow and liquidity, our deleveraging trajectory, continued VAPS penetration opportunities, and our revenue, Adjusted EBITDA and Net Capex outlooks. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other important factors, many of which are outside our control, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions, they are predictions and we can give no assurance that any such forward-looking statement will materialize. Important factors that may affect actual results or outcomes include, among others, our ability to acquire and integrate new assets and operations; our ability to achieve planned synergies related to acquisitions; our ability to manage growth and execute our business plan; our estimates of the size of the markets for our products; the rate and degree of market acceptance of our products; the success of other competing modular space and portable storage solutions that exist or may become available; rising costs adversely affecting our profitability; potential litigation involving our Company; general economic and market conditions impacting demand for our products and services; our ability to maintain an effective system of internal controls; and such other risks and uncertainties described in the periodic reports we file with the SEC from time to time (including our Form 10-K/A for the year ended December 31, 2020), which are available through the SEC’s EDGAR system at www.sec.gov and on our website. Any forward-looking statement speaks only at the date which it is made, and the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Additional Information and Where to Find It
Additional information can be found on the company's website at www.willscotmobilemini.com.

Contact Information  
   
Investor Inquiries: Media Inquiries:
Nick Girardi Scott Junk
investors@willscotmobilemini.com scott.junk@willscotmobilemini.com
   


WillScot Corporation
Consolidated Statements of Operations
(in thousands, except share and per share data)

 Three Months Ended June 30, Six Months Ended June 30,
(in thousands, except share and per share data)2021 2020 2021 2020
Revenues:       
Leasing and services revenue:       
Leasing$343,179  $190,143  $658,841  $378,495 
Delivery and installation91,680  51,640  175,184  102,710 
Sales revenue:       
New units11,008  9,763  21,963  19,376 
Rental units15,235  5,316  30,437  12,102 
Total revenues461,102  256,862  886,425  512,683 
Costs:       
Costs of leasing and services:       
Leasing83,032  47,747  152,927  97,556 
Delivery and installation77,153  43,523  147,289  87,388 
Costs of sales:       
New units7,052  6,331  14,161  12,534 
Rental units8,162  3,803  17,267  7,609 
Depreciation of rental equipment62,893  45,494  118,591  91,442 
Gross profit222,810  109,964  436,190  216,154 
Expenses:       
Selling, general and administrative122,387  63,653  238,872  129,190 
Transaction costs  1,619  844  11,050 
Other depreciation and amortization21,622  2,883  39,946  5,957 
Lease impairment expense and other related charges474  1,394  1,727  3,055 
Restructuring costs6,960  749  10,102  689 
Currency losses (gains), net33  (380) 69  518 
Other expense (income), net719  (1,021) (1,269) (745)
Operating income70,615  41,067  145,899  66,440 
Interest expense29,212  28,519  59,176  56,776 
Fair value (gain) loss on common stock warrant liabilities(610) 26,963  26,597  (68,366)
Loss on extinguishment of debt2,814    5,999   
Income (loss) before income tax39,199  (14,415) 54,127  78,030 
Income tax expense (benefit)18,828  (285) 29,309  505 
Net income (loss)20,371  (14,130) 24,818  77,525 
Net income attributable to non-controlling interest, net of tax  1,343    1,213 
Net income (loss) attributable to WillScot Mobile Mini$20,371  $(15,473) $24,818  $76,312 
        
Earnings (loss) per share attributable to WillScot Mobile
Mini common shareholders
       
Basic$0.09  $(0.14) $0.11  $0.69 
Diluted$0.08  $(0.14) $0.11  $0.06 
Weighted average shares:       
Basic228,406,812  110,692,426  228,350,318  110,174,536 
Diluted236,536,713  110,692,426  234,898,911  112,336,118 


Unaudited Segment Operating Data

Comparison of Three Months Ended June 30, 2021 and 2020

 Three Months Ended June 30, 2021
(in thousands, except for units on rent and rates)NA Modular NA Storage UK Storage Tank and
Pump
 Total
Revenue$289,382  $115,794  $28,432  $27,494  $461,102 
Gross profit$116,136  $75,721  $17,937  $13,016  $222,810 
Adjusted EBITDA$103,545  $49,526  $12,328  $10,096  $175,495 
Capital expenditures for rental equipment$49,364  $8,773  $4,226  $2,919  $65,282 
Average modular space units on rent84,754  16,360  9,354    110,468 
Average modular space utilization rate67.7% 78.4% 84.3% % 70.3%
Average modular space monthly rental rate$801  $573  $438  $  $736 
Average portable storage units on rent13,301  112,862  25,573    151,736 
Average portable storage utilization rate69.8% 76.1% 91.8% % 77.7%
Average portable storage monthly rental rate$133  $151  $88  $  $139 
Average tank and pump solutions rental fleet
utilization based on original equipment cost
% % % 71.2% 71.2%


 Three Months Ended June 30, 2020
(in thousands, except for units on rent and rates)NA Modular NA Storage UK Storage Tank and
Pump
 Total
Revenue$256,862  $  $  $  $256,862 
Gross profit$109,964  $  $  $  $109,964 
Adjusted EBITDA$97,520  $  $  $  $97,520 
Capital expenditures for rental equipment$40,034  $  $  $  $40,034 
Average modular space units on rent87,096        87,096 
Average modular space utilization rate68.5% % % % 68.5%
Average modular space monthly rental rate$669  $  $  $  $669 
Average portable storage units on rent15,869        15,869 
Average portable storage utilization rate62.5% % % % 62.5%
Average portable storage monthly rental rate$120  $  $  $  $120 
Average tank and pump solutions rental fleet
utilization based on original equipment cost
% % % % %


Comparison of the Six Months Ended June 30, 2021 and 2020

 Six Months Ended June 30, 2021
(in thousands, except for units on rent and rates)NA Modular NA Storage UK Storage Tank and
Pump
 Total
Revenue$555,606  $223,542  $55,439  $51,838  $886,425 
Gross profit$229,138  $148,340  $34,430  $24,282  $436,190 
Adjusted EBITDA$200,916  $95,848  $23,392  $18,924  $339,080 
Capital expenditures for rental equipment$88,499  $12,245  $10,996  $6,077  $117,817 
Average modular space units on rent84,737  16,399  9,235    110,371 
Average modular space utilization rate67.6% 78.9% 84.1% % 70.3%
Average modular space monthly rental rate$769  $554  $420  $  $703 
Average portable storage units on rent14,186  109,355  25,112    148,653 
Average portable storage utilization rate64.8% 75.0% 90.5% % 76.1%
Average portable storage monthly rental rate$128  $150  $85  $  $137 
Average tank and pump solutions rental fleet
utilization based on original equipment cost
% % % 69.3% 69.3%


 Six Months Ended June 30, 2020
(in thousands, except for units on rent and rates)NA Modular NA Storage UK Storage Tank and
Pump
 Total
Revenue$512,683  $  $  $  $512,683 
Gross profit$216,154  $  $  $  $216,154 
Adjusted EBITDA$187,062  $  $  $  $187,062 
Capital expenditures for rental equipment$79,682  $  $  $  $79,682 
Average modular space units on rent87,542        87,542 
Average modular space utilization rate68.9% % % % 68.9%
Average modular space monthly rental rate$661  $  $  $  $661 
Average portable storage units on rent16,114        16,114 
Average portable storage utilization rate63.5% % % % 63.5%
Average portable storage monthly rental rate$120  $  $  $  $120 
Average tank and pump solutions rental fleet
utilization based on original equipment cost
% % % % %

  

WillScot Corporation
Consolidated Balance Sheets
(in thousands, except share and per share data)

(in thousands, except share data)June 30, 2021
(unaudited)
 December 31, 2020 
Assets     
Cash and cash equivalents$15,402  $24,937 
Trade receivables, net of allowances for credit losses at June 30,
2021 and December 31, 2020 of $36,785 and $29,258,
respectively
365,164  330,942 
Inventories32,294  23,731 
Prepaid expenses and other current assets26,686  29,954 
Assets held for sale  12,004 
Total current assets439,546  421,568 
Rental equipment, net2,914,572  2,931,646 
Property, plant and equipment, net303,488  303,650 
Operating lease assets235,258  232,094 
Goodwill1,180,737  1,171,219 
Intangible assets, net474,327  495,947 
Other non-current assets11,785  16,081 
Total long-term assets5,120,167  5,150,637 
Total assets$5,559,713  $5,572,205 
Liabilities and equity   
Accounts payable$132,031  $106,926 
Accrued expenses149,670  141,672 
Deferred revenue and customer deposits151,819  135,485 
Operating lease liabilities - current49,606  48,063 
Current portion of long-term debt16,557  16,521 
Total current liabilities499,683  448,667 
Long-term debt2,506,295  2,453,809 
Deferred tax liabilities332,492  307,541 
Operating lease liabilities - non-current184,874  183,761 
Common stock warrant liabilities  77,404 
Other non-current liabilities30,956  37,150 
Long-term liabilities3,054,617  3,059,665 
Total liabilities3,554,300  3,508,332 
Commitments and contingencies (see Note 17)   
Preferred Stock: $0.0001 par, 1,000,000 shares authorized
and zero shares issued and outstanding at June 30, 2021 and
December 31, 2020
   
Common Stock: $0.0001 par, 500,000,000 shares authorized and
226,832,627 and 229,038,158 shares issued and outstanding at
June 30, 2021 and December 31, 2020, respectively
23  23 
Additional paid-in-capital3,756,563  3,852,291 
Accumulated other comprehensive loss(24,757) (37,207)
Accumulated deficit(1,726,416) (1,751,234)
Total shareholders' equity2,005,413  2,063,873 
Total liabilities and equity$5,559,713  $5,572,205 


Reconciliation of Non-GAAP Financial Measures

We use certain non-GAAP financial information that we believe is important for purposes of comparison to prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of our ongoing operations and analyze our business performance and trends.

We evaluate business segment performance on Adjusted EBITDA, a non-GAAP measure that excludes certain items as described in the reconciliation of our consolidated net income (loss) to Adjusted EBITDA reconciliation below. We believe that evaluating segment performance excluding such items is meaningful because it provides insight with respect to intrinsic operating results of the Company.

We also regularly evaluate gross profit by segment to assist in the assessment of the operational performance of each operating segment. We consider Adjusted EBITDA to be the more important metric because it more fully captures the business performance of the segments, inclusive of indirect costs.

We also evaluate Free Cash Flow, a non-GAAP measure that provides useful information concerning cash flow available to meet future debt service obligations and working capital requirements.

Adjusted EBITDA

We define EBITDA as net income (loss) plus interest (income) expense, income tax expense (benefit), depreciation and amortization. Our adjusted EBITDA ("Adjusted EBITDA") reflects the following further adjustments to EBITDA to exclude certain non-cash items and the effect of what we consider transactions or events not related to our core business operations:

  • 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, lease impairment expense, and other related charges associated with restructuring plans designed to streamline operations and reduce costs including employee and lease termination costs.
  • Transaction costs including legal and professional fees and other transaction specific related costs.
  • Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee training costs, and other costs required to realize cost or revenue synergies.
  • 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 has limitations as an analytical tool, and you should not consider the measure in isolation or as a substitute for net income (loss), cash flow from operations or other methods of analyzing the Company’s results as reported under US GAAP. Some of these limitations are:

  • 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.

Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to reinvest in the growth of our business or as measures of cash that will be available to meet our obligations. The following tables provide unaudited reconciliations of Net income (loss) to Adjusted EBITDA.


Adjusted EBITDA

 Three Months Ended June 30, Six Months Ended June 30,
(in thousands)2021 2020 2021 2020
Net income (loss)$20,371  $(14,130) $24,818  $77,525 
Income tax expense (benefit)18,828  (285) 29,309  505 
Loss on extinguishment of debt2,814    5,999   
Interest expense29,212  28,519  59,176  56,776 
Depreciation and amortization84,515  48,377  158,537  97,399 
Fair value loss (gain) on common
stock warrant liabilities
(610) 26,963  26,597  (68,366)
Currency losses (gains), net33  (380) 69  518 
Restructuring costs, lease impairment
expense and other related charges
7,434  2,143  11,829  3,744 
Transaction costs  1,619  844  11,050 
Integration costs7,622  2,153  14,964  3,839 
Stock compensation expense4,707  2,227  8,221  4,014 
Other569  314  (1,283) 58 
Adjusted EBITDA$175,495  $97,520  $339,080  $187,062 


Net Income Excluding Gain/Loss from Warrants

We define Net Income Excluding Gain/Loss from Warrants as Net Income plus or minus the impact of the change in the fair value of the common stock warrant liability. Management believes that our financial statements that will include the impact of this mark-to-market expense or income may not be necessarily reflective of the actual financial performance of our business.

The following tables provide unaudited reconciliations of Net income (loss) to Net Income Excluding Gain/Loss from Warrants.

 Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2021 20202021 2020
Net income (loss)$20,371  $(14,130)$24,818  $77,525 
Fair value (gain) loss on common stock warrant liabilities(610) 26,963 26,597  (68,366)
Net Income (Loss) Excluding Gain/Loss from Warrants$19,761  $12,833 $51,415  $9,159 

Adjusted EBITDA Margin Non-GAAP Reconciliation

We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Revenue. Management believes that the presentation of Adjusted EBITDA Margin provides useful information to investors regarding the performance of our business.

The following tables provide unaudited reconciliations of Adjusted EBITDA Margin.

 Three Months Ended June 30, Six Months Ended June 30,
(in thousands)2021 2020 2021 2020
Adjusted EBITDA (A)$175,495  $97,520  $339,080  $187,062 
Revenue (B)$461,102  $256,862  $886,425  $512,683 
Adjusted EBITDA Margin (A/B)38.1% 38.0% 38.3% 36.5%


Free Cash Flow and Free Cash Flow Margin

We define Free Cash Flow as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities. Free Cash Flow Margin is defined as Free Cash Flow divided by Total Revenue. Management believes that the presentation of Free Cash Flow and Free Cash Flow Margin provide useful information to investors regarding our results of operations because they provide useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements.

The following table provides unaudited reconciliations of net cash provided by operating activities to Free Cash Flow.

 Three Months Ended June 30, Six Months Ended June 30,
(in thousands)2021 2020 2021 2020
Net cash provided by operating activities$139,537   $75,379   $261,608   $113,727  
Purchase of rental equipment and refurbishments(65,282)  (40,034)  (117,817)  (79,682) 
Proceeds from sale of rental equipment15,235   5,316   30,437   12,102  
Purchase of property, plant and equipment(10,143)  (1,668)  (17,450)  (3,186) 
Proceeds from the sale of property, plant and equipment2,709   3   16,438   3,843  
Free Cash Flow (A)$82,056   $38,996   $173,216   $46,804  
        
Revenue (B)$461,102   $256,862   $886,425   $512,683  
Free Cash Flow Margin (A/B)17.8 % 15.2 % 19.5 % 9.1 %


Adjusted Gross Profit and Adjusted Gross Profit Percentage

We define Adjusted Gross Profit as gross profit plus depreciation on rental equipment. Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue. Adjusted Gross Profit and Percentage are not measurements of our financial performance under GAAP and should not be considered as an alternative to gross profit, gross profit percentage, or other performance measures derived in accordance with GAAP. In addition, our measurement of Adjusted Gross Profit and Adjusted Gross Profit Percentage may not be comparable to similarly titled measures of other companies. Our management believes that the presentation of Adjusted Gross Profit and Adjusted Gross Profit Percentage provides useful information to investors regarding our results of operations because it assists in analyzing the performance of our business.

The following table provides unaudited reconciliations of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage.

 Three Months Ended Six Months Ended
 June 30, June 30,
(in thousands)2021 2020 2021 2021
Revenue (A)$461,102  $256,862  $886,425  $512,683 
        
Gross profit (B)$222,810  $109,964  $436,190  $216,154 
Depreciation of rental equipment62,893  45,494  118,591  91,442 
Adjusted Gross Profit (C)$285,703  $155,458  $554,781  $307,596 
        
Gross Profit Percentage (B/A)48.3% 42.8% 49.2% 42.2%
Adjusted Gross Profit Percentage (C/A)62.0% 60.5% 62.6% 60.0%

Net CAPEX

We define Net CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities. Our management believes that the presentation of Net CAPEX provides useful information to investors regarding the net capital invested into our rental fleet and plant, property and equipment each year to assist in analyzing the performance of our business.

The following table provides unaudited reconciliations of Net CAPEX:

 Three Months Ended Six Months Ended
 June 30, June 30,
(in thousands)2021 2020 2021 2020
Total purchases of rental equipment and refurbishments$(65,282) $(40,034) $(117,817) $(79,682)
Total proceeds from sale of rental equipment15,235  5,316  30,437  12,102 
Net CAPEX for Rental Equipment(50,047) (34,718) (87,380) (67,580)
Purchase of property, plant and equipment(10,143) (1,668) (17,450) (3,186)
Proceeds from sale of property, plant and equipment2,709  3  16,438  3,843 
Net CAPEX$(57,481) $(36,383) $(88,392) $(66,923)