CAI International Inc. (CAP, Financial) filed Quarterly Report for the period ended 2009-06-30.
CAI INTERNATIONAL INC. is one of the world\'s leading intermodal freight container leasing and management companies. Intermodal freight containers are large standardized steel boxes which CAI leases primarily to international steamship companies and are used to transport cargo by a number of means including ship truck and rail. A portion of the container fleet is owned by CAI with the balance being owned by third parties on whose behalf CAI manages the containers. Accordingly CAI operates its business through two segments: container leasing and container fleet management. Through its international network of offices and agents CAI also has developed an active after-market program for containers retired from the international shipping fleet. CAI International Inc. has a market cap of $114.9 million; its shares were traded at around $6.41 with a P/E ratio of 5.3 and P/S ratio of 1.4.
Income Tax Expense. Income tax expense for the three months ended June 30, 2009 was $1.1 million, a $2.1 million, or 65.0%, decrease from $3.2 million for the three months ended June 30, 2008. The decrease was due primarily to a lower pretax income and lower effective tax rate. Our effective tax rate for the quarter ended June 30, 2009 was 25.2% compared to 33.9% for the same quarter in 2008. The lower effective tax rate for the three months ended June 30, 2009 as compared to the three months ended June 30, 2008 is due primarily to higher pretax income from foreign operations where statutory rates are lower than the U.S. income tax rates. In addition, we recorded prior period adjustments relating to 2008 and the first quarter of 2009 which reduced income tax expense by $316,000 for the quarter ended June 30, 2009. Without these one-time adjustments, our effective tax rate for the three months ended June 30, 2009 would have been 32.3%.
Container Management. Total revenue of $2.6 million from our container management segment for the three months ended June 30, 2009 was $3.7 million, or 58.9%, lower than last years revenue of $6.3 million revenue from our container management segment for the three months ended June 30, 2008. This decrease in revenue was primarily due to a $2.8 million, or 84.9%, decrease in gain on sale of container portfolios, and the $929,000, or 30.7%, decline in management fee revenue compared to the three months ended June 30, 2008. The decrease in gain on sale of container portfolios was due to the fewer number of TEUs of containers sold during the second quarter of 2009 as compared to the same quarter in 2008.
Total revenue of $34.2 million for the six months ended June 30, 2009 declined $4.1 million, or 10.6% from the six months ended June 30, 2008, due primarily to a lower gain on sale of container portfolios and the significant decline in our owned container equipment utilization. Operating expenses for the six months ended June 30, 2009 increased $4.8 million, or 27.9%, from the same six-month period in 2008, mainly as a result of higher storage, handling and repairs expenses, increase in depreciation expense and lower gain on disposition of used container equipment, partly offset by lower impairment of container rental equipment. Our net income decreased $4.3 million, or 36.9%, to $7.3 million for the six months ended June 30, 2009, from $11.6 million for the comparable period in 2008. The decrease in net income resulted primarily from lower revenue and higher operating expenses, partly offset by lower interest expense and income tax expense compared to the six months ended June 30, 2008.
Net Interest Expense. Net interest expense of $2.3 million for the six months ended June 30, 2009 decreased $1.6 million, or 40.4%, from $3.9 million incurred during the six months ended June 30, 2008. The decrease in net interest expense was due primarily to the lower interest expense resulting from lower interest rates and a lower average balance of our debt under our senior secured credit facility. This was partly offset by a $163,000 decrease in interest income.
Income Tax Expense. Income tax expense for the six months ended June 30, 2009 was $2.7 million, a $3.0 million, or a 52.3%, decrease from $5.7 million for the six months ended June 30, 2008. The decrease was due primarily to a 42.0% decrease in pretax income and lower effective tax rate. Our effective tax rate for the six months ended June 30, 2009 was 27.2% compared to 33.0% for the same period in 2008. The lower effective tax rate for the six months ended June 30, 2009 as compared to the six months ended June 30, 2008 is due primarily to higher pretax income from foreign operations where statutory rates are lower than the U.S. income tax rates. In addition, we recorded prior period adjustments relating to 2008 which reduced income tax expense by $138,000 for the six months ended June 30, 2009. Without this one-time adjustment, our effective tax rate for the six months ended June 30, 2009 would have been 28.5%.
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CAI INTERNATIONAL INC. is one of the world\'s leading intermodal freight container leasing and management companies. Intermodal freight containers are large standardized steel boxes which CAI leases primarily to international steamship companies and are used to transport cargo by a number of means including ship truck and rail. A portion of the container fleet is owned by CAI with the balance being owned by third parties on whose behalf CAI manages the containers. Accordingly CAI operates its business through two segments: container leasing and container fleet management. Through its international network of offices and agents CAI also has developed an active after-market program for containers retired from the international shipping fleet. CAI International Inc. has a market cap of $114.9 million; its shares were traded at around $6.41 with a P/E ratio of 5.3 and P/S ratio of 1.4.
Highlight of Business Operations:
Total revenue of $16.7 million for the three months ended June 30, 2009 was down $4.0 million, or 19.3%, from the three months ended June 30, 2008, due primarily to a lower gain on container sales to investors and the decline in our container equipment utilization. Operating expenses for the quarter ended June 30, 2009 increased $1.9 million, or 21.1%, from the same three-month period in 2008, mainly as a result of higher storage, handling and repairs expenses, increase in depreciation expense and lower gain on disposition of used container equipment, partly offset by lower marketing, general and administrative expenses. Our net income decreased $2.9 million, or 46.8%, to $3.3 million for the three months ended June 30, 2009, from $6.3 million for the comparable period in 2008. The decrease in net income resulted from lower revenue and higher operating expenses, partly offset by lower interest expense and income tax expense compared to the three months ended June 30, 2008.Income Tax Expense. Income tax expense for the three months ended June 30, 2009 was $1.1 million, a $2.1 million, or 65.0%, decrease from $3.2 million for the three months ended June 30, 2008. The decrease was due primarily to a lower pretax income and lower effective tax rate. Our effective tax rate for the quarter ended June 30, 2009 was 25.2% compared to 33.9% for the same quarter in 2008. The lower effective tax rate for the three months ended June 30, 2009 as compared to the three months ended June 30, 2008 is due primarily to higher pretax income from foreign operations where statutory rates are lower than the U.S. income tax rates. In addition, we recorded prior period adjustments relating to 2008 and the first quarter of 2009 which reduced income tax expense by $316,000 for the quarter ended June 30, 2009. Without these one-time adjustments, our effective tax rate for the three months ended June 30, 2009 would have been 32.3%.
Container Management. Total revenue of $2.6 million from our container management segment for the three months ended June 30, 2009 was $3.7 million, or 58.9%, lower than last years revenue of $6.3 million revenue from our container management segment for the three months ended June 30, 2008. This decrease in revenue was primarily due to a $2.8 million, or 84.9%, decrease in gain on sale of container portfolios, and the $929,000, or 30.7%, decline in management fee revenue compared to the three months ended June 30, 2008. The decrease in gain on sale of container portfolios was due to the fewer number of TEUs of containers sold during the second quarter of 2009 as compared to the same quarter in 2008.
Total revenue of $34.2 million for the six months ended June 30, 2009 declined $4.1 million, or 10.6% from the six months ended June 30, 2008, due primarily to a lower gain on sale of container portfolios and the significant decline in our owned container equipment utilization. Operating expenses for the six months ended June 30, 2009 increased $4.8 million, or 27.9%, from the same six-month period in 2008, mainly as a result of higher storage, handling and repairs expenses, increase in depreciation expense and lower gain on disposition of used container equipment, partly offset by lower impairment of container rental equipment. Our net income decreased $4.3 million, or 36.9%, to $7.3 million for the six months ended June 30, 2009, from $11.6 million for the comparable period in 2008. The decrease in net income resulted primarily from lower revenue and higher operating expenses, partly offset by lower interest expense and income tax expense compared to the six months ended June 30, 2008.
Net Interest Expense. Net interest expense of $2.3 million for the six months ended June 30, 2009 decreased $1.6 million, or 40.4%, from $3.9 million incurred during the six months ended June 30, 2008. The decrease in net interest expense was due primarily to the lower interest expense resulting from lower interest rates and a lower average balance of our debt under our senior secured credit facility. This was partly offset by a $163,000 decrease in interest income.
Income Tax Expense. Income tax expense for the six months ended June 30, 2009 was $2.7 million, a $3.0 million, or a 52.3%, decrease from $5.7 million for the six months ended June 30, 2008. The decrease was due primarily to a 42.0% decrease in pretax income and lower effective tax rate. Our effective tax rate for the six months ended June 30, 2009 was 27.2% compared to 33.0% for the same period in 2008. The lower effective tax rate for the six months ended June 30, 2009 as compared to the six months ended June 30, 2008 is due primarily to higher pretax income from foreign operations where statutory rates are lower than the U.S. income tax rates. In addition, we recorded prior period adjustments relating to 2008 which reduced income tax expense by $138,000 for the six months ended June 30, 2009. Without this one-time adjustment, our effective tax rate for the six months ended June 30, 2009 would have been 28.5%.
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