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RSC Holdings Inc. Reports Operating Results (10-K/A)
Posted by: gurufocus (IP Logged)
Date: February 18, 2010 05:17PM

RSC Holdings Inc. (RRR) filed Amended Annual Report for the period ended 2009-12-31. Rsc Holdings Inc. has a market cap of $700.1 million; its shares were traded at around $6.77 with and P/S ratio of 0.4.

RRR is in the portfolios of Bruce Berkowitz of Fairholme Capital Management, Fairholme Fund, Bruce Berkowitz of Fairholme Capital Management, David Williams of Columbia Value and Restructuring Fund, John Keeley of Keeley Fund Management.

Highlight of Business Operations:

As of June 30, 2009, the last day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiliates was approximately $150 million (based on the closing price of RSC Holdings Inc. Common Stock of $6.72 per share on that date, as reported on the New York Stock Exchange and, for purposes of this computation only, the assumption that all of the registrant’s directors and executive officers are affiliates).

As part of the Recapitalization, we offered $620.0 million aggregate principal amount of 91/2% senior unsecured notes due 2014 (the “2014 Notes”). As of the closing of the Recapitalization, on November 27, 2006, we borrowed $1,124.0 million under a new senior secured asset-based loan facilities (the “Senior ABL Facilities”) and $1,130.0 million under a new senior second-lien term loan facility (the “Second Lien Term Facility”, together with the Senior ABL Facilities, the “Senior Credit Facilities”). The Senior ABL Facilities consisted of a $1,450.0 million revolving credit facility (the “Senior ABL Revolving Facility”) and a term loan facility in the initial amount of $250.0 million (the “Senior ABL Term Loan”). We repaid the Senior ABL Term Loan in full in July 2009. As of December 31, 2009 the balance on the Senior Credit Facilities is $880.6 million.

RSC Holdings repurchased a portion of its issued and outstanding common stock from Atlas for (i) a purchase price of $3,345.0 million (the “Purchase Price”), as adjusted pursuant to the terms of the Recapitalization Agreement and (ii) the obligation of RSC Holdings to issue up to $400.0 million aggregate principal amount of contingent earn-out notes, based on Adjusted EBITDA thresholds. Because RSC Holdings did not meet the Adjusted EBITDA thresholds, contingent notes will not be issued.

The Sponsors made a $500.0 million cash equity investment in RSC Holdings, less a partial return of equity to the Sponsors of $40.0 million, in exchange for a portion of the issued and outstanding common stock of RSC Holdings. Immediately after the Recapitalization, Ripplewood and Oak Hill each owned 42.735% of RSC Holdings’ issued and outstanding capital stock and ACF owned 14.53% of RSC Holdings’ issued and outstanding capital stock. In May 2007, RSC Holdings completed an initial public offering of its common stock. The number of common shares offered was 20,833,333. Of these shares, 12,500,000 were new shares offered by RSC Holdings and 8,333,333 were shares offered by its stockholders. On August 24, 2009, Ripplewood distributed approximately 26.6 million shares of common stock of RSC Holdings to Ripplewood’s indirect limited partners, while Ripplewood retained approximately 8.2 million shares.

As of December 31, 2009, our rental fleet had an original equipment fleet cost of $2.3 billion covering over 900 categories of equipment, and in 2009, our rental revenues were $1,073.0 million. Rental terms for our equipment vary depending on the customer’s needs, and the average rental term in 2009 was approximately 12 days. We believe that the size of our purchasing program and the relative importance of our business to our suppliers allow us to purchase fleet at favorable prices and on favorable payment terms. We believe that our highly disciplined approach to acquiring, deploying, sharing, maintaining and divesting fleet represents a key competitive advantage. The following table provides a breakdown of our fleet in terms of original equipment fleet cost as of December 31, 2009.

Read the The complete Report

Stocks Discussed: RRR,
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