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Mobile Mini Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 10, 2012 04:49PM
Mobile Mini Inc. (MINI) filed Quarterly Report for the period ended 2012-03-31. Mobile Mini Inc has a market cap of $855.2 million; its shares were traded at around $15.28 with a P/E ratio of 24.7 and P/S ratio of 2.4. Mobile Mini Inc had an annual average earning growth of 9% over the past 10 years. GuruFocus rated Mobile Mini Inc the business predictability rank of 5-star.
Highlight of Business Operations:We derive most of our revenues from the leasing of portable storage containers, security office units and mobile office units. We also sell new and used portable storage containers and occasionally sell security office units and mobile office units. In addition, we provide delivery, installation and other ancillary products and services to our customers. Our sales revenues represented 11.4% and 11.1% of total revenues for the three months ended March 31, 2011 and 2012, respectively.
Our principal asset is our container lease fleet, which has historically maintained an appraised value close to its original cost. Our lease fleet primarily consists of remanufactured and modified steel portable storage containers, steel security offices, steel combination offices and wood mobile offices that are leased to customers under short-term operating lease agreements with varying terms. Depreciation is calculated using the straight-line method over the estimated useful life of our units, after the date that we put the unit in service, and are depreciated down to their estimated residual values. Our steel units are depreciated over 30 years with an estimated residual value of 55%. This depreciation policy is supported by our historical lease fleet data, which shows that we have been able to obtain comparable rental rates and sales prices irrespective of the age of our container lease fleet. Wood office units are depreciated over 20 years with an estimated residual value of 50%. Van trailers, which are a small part of our fleet, are depreciated over seven years to an estimated residual value of 20%. Van trailers, which are only added to the fleet as a result of acquisitions of portable storage businesses, are of much lower quality than storage containers and consequently depreciate more rapidly. The Company has other non-core products that have various other measures of useful lives and residual values.
Total revenues for the quarter ended March 31, 2012 increased $5.0 million, or 6.1%, to $87.9 million, compared to $82.9 million for the same period in 2011. Leasing revenues for the quarter ended March 31, 2012 increased $4.9 million, or 6.8%, to $77.6 million, compared to $72.7 million for the same period in 2011. This increase in leasing revenues was driven by higher trucking revenues, product mix and an increase in the number of units on rent, which resulted in a 4.4% increase in our yield. In addition, rental rates increased 2.1% over the prior year. Our sales of portable storage and office units for the quarter ended March 31, 2012 increased 4.2% to $9.8 million. The increase in sales revenues primarily reflects sales at a higher average selling price, some which were custom units, as compared to the same period in 2011. Leasing revenues, as a percentage of total revenues for the quarters ended March 31, 2012 and 2011 were 88.3% and 87.7%, respectively. Our leasing business continues to be our primary focus and leasing revenues have and continue to be the predominant part of our revenue mix.
Adjusted EBITDA for the quarter ended March 31, 2012 decreased $1.4 million, or 4.7%, to $28.4 million, compared to $29.8 million for the same period in 2011. Adjusted EBITDA margins were 32.3% and 36.0% of total revenues for the three months ended March 31, 2012 and 2011, respectively.
Investing Activities. Net cash used in investing activities was $8.5 million for the three months ended March 31, 2012, compared to net cash provided by investing activities of $1.5 million for the same period in 2011. Capital expenditures for our lease fleet were $9.8 million and proceeds from sale of lease fleet units were $7.7 million for the three months ended March 31, 2012, compared to capital expenditures of $3.5 million and proceeds of $8.2 million for the same period in 2011. We anticipate our near-term investing activities will be primarily focused on remanufacturing units previously acquired in acquisitions to meet our lease fleet standards as these units are placed on lease and to invest in our new consumer products. Capital expenditures for property, plant and equipment, net of proceeds from sales of property, plant and equipment, for the three months ended March 31, 2012 were $2.8 million, compared to $3.2 million for the same period in 2011. These expenditures in 2012 were primarily for replacement of our transportation equipment, leasehold improvements and upgrades to technology equipment. The amount of cash that we use during any period in investing activities is almost entirely within managements discretion. We have no contracts or other arrangements pursuant to which we are required to purchase a fixed or minimum amount of capital goods in connection with any portion of our business.
Stocks Discussed: MINI,