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Mobile Mini Reports Q4 2017 Results and Announces Quarterly Dividend

Posted on: 02/02/2018

PHOENIX--(BUSINESS WIRE)--Feb. 2, 2018-- Mobile Mini, Inc. (NASDAQ GS: MINI) (the “Company” or “Mobile Mini”), the world’s leading supplier of portable storage solutions and a leading provider of tank and pump solutions in the United States, today reported actual and adjusted financial results for the quarter ended December 31, 2017. Total revenues were $146.7 million and rental revenues were $138.5 million, as compared to $130.4 million and $124.2 million, respectively, for the same period last year.

Rental revenues for the Storage Solutions and Tank & Pump Solutions businesses for the current quarter were $112.8 million and $25.7 million, respectively.

The Company recorded net income of $92.1 million, or $2.07 per diluted share, in the fourth quarter of 2017, as compared to net income of $19.5 million, or $0.44 per diluted share, for the fourth quarter of 2016. On an adjusted basis, fourth quarter net income was $18.1 million, or $0.41 per diluted share, as compared to adjusted net income of $21.2 million, or $0.48 per diluted share, for the fourth quarter of 2016. Adjusted EBITDA was $55.6 million and adjusted EBITDA margin was 37.9% for the fourth quarter of 2017.

Dividend

The Company’s Board of Directors declared a cash dividend of 25.0 cents per share, which will be paid on March 14, 2018 to shareholders of record on February 28, 2018.

Fourth Quarter 2017 Highlights

  • Delivered a strong 11.0% year-over-year increase in Storage Solutions rental revenues, 9.8% when adjusted for favorable currency fluctuations.
  • Achieved a 14.2% increase in year-over-year Tank & Pump Solutions rental revenue growth.
  • Increased total Storage Solutions average units on rent by 5.3% year-over-year, with average utilization of 75.7% and utilization of 74.1% at December 31, 2017.
  • Raised Storage Solutions rental rates by 4.2% year-over-year, with rates on new rentals up 5.1%.
  • Improved OEC utilization for Tank & Pump Solutions, averaging 73.0% for the quarter, compared to 62.3% in the prior-year quarter, and ending the year at 71.2%.
  • Achieved adjusted EBITDA of $55.6 million, with an adjusted EBITDA margin of 37.9%, despite year-over-year headwinds of $5.9 million in increased variable compensation expense.
  • Generated net cash from operating activities of $39.8 million and strong free cash flow of $18.2 million.

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “The fourth quarter of 2017 was exceptional for both of our business segments. In addition to the wide-spread pick up across our Tank & Pump segment, our downstream customers began the turnaround and maintenance activities that had been previously deferred, resulting in a 14.2% year-over-year increase in Tank & Pump Solutions fourth quarter rental revenue. Within Storage Solutions, we saw record-high seasonal rentals, as well as healthy growth in our core business. As expected, variable compensation expense mitigated the fourth quarter profit flow-through; however, our underlying margins are strong and improving quarter by quarter. Excluding the effect of the variable compensation, the adjusted EBITDA margin increased approximately 70 basis points compared to the fourth quarter of 2016.”

Mr. Olsson continued, “Mobile Mini is very well positioned to leverage our infrastructure, including the unique suite of digital solutions we introduced in 2017, to further capitalize on the current momentum. In 2017, Tank & Pump Solutions reached an inflection point, with increased sequential revenue throughout the year, and the business is poised to take advantage of the increasingly strong demand from our customers. Additionally, our core North American Storage Solutions business is strong entering 2018, with pending orders considerably in excess of this time in the prior year. As a result, we expect healthy top line and adjusted EBITDA growth, expanded margins and increased free cash flow in 2018.”

United States Tax Reform

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (“the Tax Act”), which, among other things, reduces the federal income tax rate from 35% to 21% effective January 1, 2018, and requires mandatory repatriation of foreign earnings. As a result of the Tax Act, we remeasured our net deferred tax liabilities and recognized a net benefit of $77.6 million. In addition, we recorded a provisional income tax expense of $3.1 million related to the repatriation of foreign earnings. We estimate that our 2018 consolidated effective tax rate will be between 24% and 26%. We do not expect a significant near-term impact on cash paid for taxes.

Conference Call

Mobile Mini will host a conference call today, Friday, February 2 at 12 noon ET to review these results. To listen to the call live, dial (201) 493-6739 and ask for the Mobile Mini Conference Call or go to www.mobilemini.com and click on the Investors section. Additionally, a slide presentation that will accompany the call will be posted at www.mobilemini.com on the Investor Relations section and will be available in advance and after the call. Please go to the website 15 minutes early to download and install any necessary audio software. If you are unable to listen live, a replay of the call can be accessed for approximately 14 days after the call at Mobile Mini’s website.

About Mobile Mini, Inc.

Mobile Mini, Inc. is the world’s leading provider of portable storage solutions through its total rental fleet of approximately 215,000 storage solutions containers and office units and a leading provider of tank and pump solutions in the U.S., with a rental fleet of approximately 12,100 units. Mobile Mini’s network is comprised of 154 locations in the U.S., U.K., and Canada. Mobile Mini is included on the Russell 2000® and 3000® Indexes and the S&P Small Cap Index.

Forward-Looking Statements

This news release contains forward-looking statements, including, but not limited to, our approach being able to leverage our infrastructure and capitalize on our momentum, as well as our ability to drive healthy top line and adjusted EBITDA growth, expanded margins and increased free cash flow in 2018, which involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Risks and uncertainties that may affect future results include those that are described from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”). These forward-looking statements represent the judgment of the Company, as of the date of this release, and Mobile Mini disclaims any intent or obligation to update forward-looking statements.

(See accompanying tables)

                                                               
Mobile Mini, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(in thousands, except percentages and per share data)
                                                               
        Three Months Ended December 31, 2017       Three Months Ended December 31, 2016  
        Actual       Adjustments       Adjusted (1)       Actual       Adjustments       Adjusted (2)  
                                                               
Revenues:                                                              
Rental       $ 138,537       $       $ 138,537       $ 124,170       $       $ 124,170  
Sales         7,623                 7,623         6,656                 6,656  
Other         536                 536         (439 )       1,146         707  
Total revenues         146,696                 146,696         130,387         1,146         131,533  
                                                               
Costs and expenses:                                                              
Rental, selling and general expenses         87,484                 87,484         74,498         (807 )       73,691  
Cost of sales         4,962                 4,962         4,285                 4,285  
Restructuring expenses         824         (824 )               800         (800 )        
Depreciation and amortization         16,431                 16,431         16,104                 16,104  
Total costs and expenses         109,701         (824 )       108,877         95,687         (1,607 )       94,080  
                                                               
Income from operations         36,995         824         37,819         34,700         2,753         37,453  
                                                               
Other income (expense):                                                              
Interest income         5                 5         2                 2  
Interest expense         (9,316 )               (9,316 )       (8,193 )               (8,193 )
Foreign currency exchange         4                 4         (9 )               (9 )
                                                               
Income before income tax (benefit) provision         27,688         824         28,512         26,500         2,753         29,253  
                                                               
Income tax (benefit) provision         (64,383 )       74,827         10,444         7,031         1,040         8,071  
                                                               
Net income       $ 92,071       $ (74,003 )     $ 18,068       $ 19,469       $ 1,713       $ 21,182  
                                                               
EBITDA/Adjusted EBITDA       $ 53,435                 $ 55,624       $ 50,797                 $ 54,154  

EBITDA/Adjusted EBITDA as a percentage of

                                                             

total revenues

        36.4 %                 37.9 %       39.0 %                 41.2 %
                                                               
Earnings per share:                                                              
Basic       $ 2.09                 $ 0.41       $ 0.44                 $ 0.48  
Diluted         2.07                   0.41         0.44                   0.48  
                                                               

Weighted average number of common and

                                                             

common share equivalents outstanding:

                                                             
Basic         44,128                   44,128         44,073                   44,073  
Diluted         44,444                   44,444         44,269                   44,269  
                                                               
(1)   Adjusted column for the three months ended December 31, 2017 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP (defined herein) presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the three-month period ended December 31, 2017 include the following:
   

• Exclusion of costs of $0.8 million related to the restructuring of our business operations, along with the related tax effects.

   

• Exclusion of $74.5 million in income tax benefit resulting from the Tax Act.

 
(2)   Adjusted column for the three months ended December 31, 2016 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the three-month period ended December 31, 2016 include the following, along with the related tax effects:
   

• Increase of other revenue by $1.1 million to exclude reversed revenue related to a sales tax remittance.

   

• Reduction of $0.3 million in rental, selling and general expenses to exclude fees and penalties associated with the sales tax remittance.

   

• Reduction of $0.1 million in rental, selling and general expenses to exclude acquisition-related expenses.

   

• Reduction of $0.5 million in rental, selling and general expenses to exclude costs related to severance in conjunction with the departure of an executive.

   

• Exclusion of costs of $0.8 million related to the restructuring of our business operations.

     
                                                               
Mobile Mini, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
(in thousands, except percentages and per share data)
                                                               
        Twelve Months Ended December 31, 2017       Twelve Months Ended December 31, 2016  
        Actual       Adjustments       Adjusted (1)       Actual       Adjustments       Adjusted (2)  
                                                               
Revenues:                                                              
Rental       $ 498,825       $       $ 498,825       $ 480,083       $       $ 480,083  
Sales         32,440                 32,440         26,499                 26,499  
Other         2,284                 2,284         2,040         (219 )       1,821  
Total revenues         533,549                 533,549         508,622         (219 )       508,403  
                                                               
Costs and expenses:                                                              
Rental, selling and general expenses         336,438         (2,623 )       333,815         309,294         (807 )       308,487  
Cost of sales         21,001                 21,001         16,471                 16,471  
Restructuring expenses         2,886         (2,886 )               6,020         (6,020 )        
Depreciation and amortization         63,372                 63,372         63,734                 63,734  
Total costs and expenses         423,697         (5,509 )       418,188         395,519         (6,827 )       388,692  
                                                               
Income from operations         109,852         5,509         115,361         113,103         6,608         119,711  
                                                               
Other income (expense):                                                              
Interest income         25                 25         2                 2  
Interest expense         (35,728 )               (35,728 )       (32,726 )               (32,726 )
Debt extinguishment expense                                 (9,192 )       9,192          
Deferred financing costs write-off                                 (2,271 )       2,271          
Foreign currency exchange         (25 )               (25 )       (18 )               (18 )
                                                               
Income before income tax (benefit) provision         74,124         5,509         79,633         68,898         18,071         86,969  
                                                               
Income tax (benefit) provision         (48,104 )       76,604         28,500         21,650         6,932         28,582  
                                                               
Net income       $ 122,228       $ (71,095 )     $ 51,133       $ 47,248       $ 11,139       $ 58,387  
                                                               
EBITDA/Adjusted EBITDA       $ 173,224                 $ 184,803       $ 176,821                 $ 190,376  

EBITDA/Adjusted EBITDA as a percentage of

                                                             

total revenues

        32.5 %                 34.6 %       34.8 %                 37.4 %
                                                               
Earnings per share:                                                              
Basic       $ 2.77                 $ 1.16       $ 1.07                 $ 1.32  
Diluted         2.76                   1.16         1.06                   1.32  
                                                               

Weighted average number of common and

                                                             

common share equivalents outstanding:

                                                             
Basic         44,055                   44,055         44,145                   44,145  
Diluted         44,254                   44,254         44,390                   44,390  
                                                               
(1)   Adjusted column for the twelve months ended December 31, 2017 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the twelve-month period ended December 31, 2017 include the following:
   

• Reduction of $0.1 million in rental, selling and general expenses for acquisition-related expenses, along with the related tax effects.

   

• Reduction of $2.5 million in rental, selling and general expenses to exclude costs related to severance and transition in conjunction with the departure of executives, along with the related tax effects.

   

• Exclusion of $2.9 million in costs related to the restructuring of our business operations, along with the related tax effects.

   

• Exclusion of $74.5 million in income tax benefit resulting from the Tax Act.

     
(2)   Adjusted column for the twelve months ended December 31, 2016 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information following in this earnings release. The adjustments for the twelve-month period ended December 31, 2016 include the following, along with the related tax effects:
   

• Reduction of other revenue by $1.4 million to exclude revenue associated with a sales tax refund, net of a $1.1 million increase to other revenue to exclude reversed revenue related to a sales tax remittance.

   

• Reduction of $0.3 million in rental, selling and general to exclude fees and penalties associated with the sales tax remittance.

   

• Reduction of $0.1 million in rental, selling and general expenses for acquisition-related expenses.

   

• Reduction of $0.5 million in rental, selling and general expenses to exclude costs related to severance in conjunction with the departure of an executive.

   

• Exclusion of costs of $6.0 million related to the restructuring of our business operations.

   

• Exclusion of $9.2 million of debt extinguishment costs to redeem $200 million aggregate principal amount of our outstanding 7.875% senior notes due December 2020 (the “2020 Senior Notes”)

   

• Exclusion of $2.3 million of deferred financing costs that were written off in conjunction with the redemption of the 2020 Senior Notes.

     
                       
Mobile Mini, Inc.
Operating Data
(Unaudited)
                       
                       
        2017       2016  
As of December 31:                      
Stand-alone Storage Solutions locations         121         125  
Stand-alone Tank & Pump Solutions locations         17         19  
Combined Storage Solutions and Tank & Pump Solutions locations         16         14  
Storage Solutions rental fleet units         215,000         211,300  
Tank & Pump Solutions rental fleet units         12,100         12,100  
                       
Average utilization - Three months ended December 31:                      
Storage Solutions - utilization based on number of units         75.7 %       75.2 %
Tank & Pump Solutions - utilization based on original equipment cost         73.0 %       62.3 %
                       
Average utilization - Year ended December 31:                      
Storage Solutions - utilization based on number of units         71.5 %       70.6 %
Tank & Pump Solutions - utilization based on original equipment cost (1)         66.5 %     n/a  
                       
(1)   Utilization for Tank & Pump Solutions is calculated as the average original cost of equipment on rent, excluding re-rented equipment, divided by the average original cost of equipment in the fleet. This statistic has been calculated since the three-month period ending June 30, 2016; no comparable statistic is available for the prior-year period.
     
                                                               
Mobile Mini, Inc.
Business Segment Information - Adjusted (1)
(Unaudited)
(in thousands, except percentages)
                                                               
        Three Months Ended December 31, 2017       Three Months Ended December 31, 2016  
       

Storage
Solutions

     

Tank & Pump
Solutions

      Total      

Storage
Solutions

     

Tank & Pump
Solutions

      Total  
                                                               
Revenues:                                                              
Rental       $ 112,810       $ 25,727       $ 138,537       $ 101,637       $ 22,533       $ 124,170  
Sales         6,226         1,397         7,623         5,842         814         6,656  
Other         457         79         536         737         (30 )       707  
Total revenues         119,493         27,203         146,696         108,216         23,317         131,533  
                                                               
Costs and expenses:                                                              
Rental, selling and general expenses         69,462         18,022         87,484         56,937         16,754         73,691  
Cost of sales         4,122         840         4,962         3,751         534         4,285  
Depreciation and amortization         10,296         6,135         16,431         9,293         6,811         16,104  
Total costs and expenses         83,880         24,997         108,877         69,981         24,099         94,080  
                                                               
Income (loss) from operations       $ 35,613       $ 2,206       $ 37,819       $ 38,235       $ (782 )     $ 37,453  
                                                               
Adjusted EBITDA       $ 47,227       $ 8,397       $ 55,624       $ 48,081       $ 6,073       $ 54,154  
Adjusted EBITDA Margin         39.5 %       30.9 %       37.9 %       44.4 %       26.0 %       41.2 %
                                                               
                                                               
                                                               
        Twelve Months Ended December 31, 2017       Twelve Months Ended December 31, 2016  
       

Storage
Solutions

     

Tank & Pump
Solutions

      Total      

Storage
Solutions

     

Tank & Pump
Solutions

      Total  
                                                               
Revenues:                                                              
Rental       $ 406,590       $ 92,235       $ 498,825       $ 387,145       $ 92,938       $ 480,083  
Sales         26,989         5,451         32,440         21,576         4,923         26,499  
Other         1,875         409         2,284         1,621         200         1,821  
Total revenues         435,454         98,095         533,549         410,342         98,061         508,403  
                                                               
Costs and expenses:                                                              
Rental, selling and general expenses         265,390         68,425         333,815         244,729         63,758         308,487  
Cost of sales         17,930         3,071         21,001         13,319         3,152         16,471  
Depreciation and amortization         38,792         24,580         63,372         35,509         28,225         63,734  
Total costs and expenses         322,112         96,076         418,188         293,557         95,135         388,692  
                                                               
Income from operations       $ 113,342       $ 2,019       $ 115,361       $ 116,785       $ 2,926       $ 119,711  
                                                               
Adjusted EBITDA       $ 157,960       $ 26,843       $ 184,803       $ 158,981       $ 31,395       $ 190,376  
Adjusted EBITDA Margin         36.3 %       27.4 %       34.6 %       38.7 %       32.0 %       37.4 %
                                                               
(1)   These tables present results by major business segment adjusted to exclude certain transactions that management believes are not indicative of our business. See additional information regarding non-GAAP financial information following in this earnings release.
     
                       
Mobile Mini, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
                       
                       
        December 31,       December 31,  
        2017       2016  
        (unaudited)       (audited)  
ASSETS
Cash and cash equivalents       $ 13,451       $ 4,137  
Receivables, net         111,562         99,175  
Inventories         15,671         15,412  
Rental fleet, net         989,154         950,065  
Property, plant and equipment, net         157,304         149,197  
Other assets         15,334         14,930  
Intangibles, net         62,024         68,420  
Goodwill         708,907         703,558  
Total assets       $ 2,073,407       $ 2,004,894  
                       
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:                      
Accounts payable       $ 26,955       $ 27,388  
Accrued liabilities         78,084         64,126  
Lines of credit         634,285         641,160  
Obligations under capital leases         52,791         50,704  
Senior notes, net         245,850         245,212  
Deferred income taxes         173,754         240,690  
Total liabilities         1,211,719         1,269,280  
                       
Stockholders' equity:                      
Common stock         497         493  
Additional paid-in capital         605,369         592,071  
Retained earnings         463,322         362,896  
Accumulated other comprehensive loss         (60,334 )       (81,047 )
Treasury stock         (147,166 )       (138,799 )
Total stockholders' equity         861,688         735,614  
Total liabilities and stockholders' equity       $ 2,073,407       $ 2,004,894  
                       
                       
Mobile Mini, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
        Twelve Months Ended  
        December 31,  
        2017       2016  
Cash flows from operating activities:                      
Net income       $ 122,228       $ 47,248  

Adjustments to reconcile net income to net cash

                     

provided by operating activities:

                     
Debt extinguishment expense                 9,192  
Deferred financing costs write-off                 2,271  
Provision for doubtful accounts         5,037         6,162  
Amortization of deferred financing costs         2,060         1,976  
Amortization of long-term liabilities         130         116  
Share-based compensation expense         7,373         7,399  
Depreciation and amortization         63,372         63,734  
Gain on sale of rental fleet         (5,657 )       (5,472 )
Loss on disposal of property, plant and equipment         517         1,285  
Deferred income taxes         (49,980 )       21,634  
Tax shortfall on equity award transactions                 (242 )
Foreign currency exchange         25         18  

Changes in certain assets and liabilities, net of

                     

effect of businesses acquired

        (9,459 )       (19,077 )
Net cash provided by operating activities         135,646         136,244  
                       
Cash flows from investing activities:                      
Cash paid for businesses acquired, net of cash acquired                 (16,565 )
Additions to rental fleet, excluding acquisitions         (63,688 )       (57,372 )
Proceeds from sale of rental fleet         12,953         13,679  
Additions to property, plant and equipment, excluding acquisitions         (20,122 )       (30,659 )
Proceeds from sale of property, plant and equipment         851         2,764  
Net cash used in investing activities         (70,006 )       (88,153 )
                       
Cash flows from financing activities:                      
Net repayments under lines of credit         (6,875 )       (26,548 )
Proceeds from issuance of 5.875% senior notes due 2024                 250,000  
Redemption of 7.875% senior notes due 2020                 (200,000 )
Debt extinguishment expense                 (9,192 )
Deferred financing costs         (12 )       (5,369 )
Principal payments on capital lease obligations         (7,418 )       (6,520 )
Issuance of common stock         5,800         468  
Dividend payments         (40,171 )       (36,402 )
Purchase of treasury stock         (8,367 )       (11,290 )
Net cash used in financing activities         (57,043 )       (44,853 )
                       
Effect of exchange rate changes on cash         717         (714 )
                       
Net change in cash         9,314         2,524  
                       
Cash and cash equivalents at beginning of period         4,137         1,613  
Cash and cash equivalents at end of period       $ 13,451       $ 4,137  
                       
Equipment and other acquired through capital lease obligations       $ 9,501       $ 18,951  
Capital expenditures accrued or payable         7,270         3,230  
                       

Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company also discloses in this press release certain non-GAAP financial information. These financial measures are not recognized measures under GAAP and they are not intended to be and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin and free cash flow are non-GAAP financial measures as defined by SEC rules. This non-GAAP financial information may be determined or calculated differently by other companies. Reconciliations of these non-GAAP measurements to the most directly comparable GAAP financial measurements are furnished earlier in this release and as follows:

                                           
Mobile Mini, Inc.
Adjusted EBITDA GAAP Reconciliations
(Unaudited)
(in thousands)
                                           
        Three Months Ended

December 31,

      Twelve Months Ended

December 31,

 
        2017       2016       2017       2016  
Net income       $ 92,071       $ 19,469       $ 122,228       $ 47,248  
Interest expense         9,316         8,193         35,728         32,726  
Income tax (benefit) provision         (64,383 )       7,031         (48,104 )       21,650  
Depreciation and amortization         16,431         16,104         63,372         63,734  
Debt extinguishment expense                                 9,192  
Deferred financing costs write-off                                 2,271  
EBITDA         53,435         50,797         173,224         176,821  
                                           
Share-based compensation expense         1,365         604         6,070         6,947  
Restructuring expenses         824         800         2,886         6,020  
Acquisition-related expenses                 100         123         100  
Sales tax refund and remittance, net                 1,146                 (219 )
Other                 707         2,500         707  
Adjusted EBITDA       $ 55,624       $ 54,154       $ 184,803       $ 190,376  
                                           
                                           
        Three Months Ended

December 31,

      Twelve Months Ended

December 31,

 
        2017       2016       2017       2016  
Net cash provided by operating activities       $ 39,814       $ 40,223       $ 135,646       $ 136,244  
Interest paid         4,650         3,666         35,029         21,546  
Income and franchise taxes paid         1,294         392         2,607         1,772  

Share-based compensation expense,

                                         

including restructuring expense

        (1,483 )       (878 )       (7,373 )       (7,399 )
Gain on sale of rental fleet         1,384         1,244         5,657         5,472  

Loss on disposal of property, plant and

                                         

equipment

        (45 )       (196 )       (517 )       (1,285 )

Changes in certain assets and liabilities, net of

                                         

effect of businesses acquired

        7,821         6,346         2,175         20,471  
EBITDA       $ 53,435       $ 50,797       $ 173,224       $ 176,821  
                                           
                                           
Mobile Mini, Inc.
Free Cash Flow GAAP Reconciliation
(Unaudited)
(in thousands)
                                           
        Three Months Ended

December 31,

      Twelve Months Ended

December 31,

 
        2017       2016       2017       2016  

Net cash provided by operating activities

      $ 39,814       $ 40,223       $ 135,646       $ 136,244  
                                           
Additions to rental fleet, excluding acquisitions         (17,743 )       (10,892 )       (63,688 )       (57,372 )
Proceeds from sale of rental fleet         3,351         2,909         12,953         13,679  

Additions to property, plant and equipment,

                                         

excluding acquisitions

        (7,306 )       (4,909 )       (20,122 )       (30,659 )

Proceeds from sale of property, plant and

                                         

equipment

        71         395         851         2,764  
Net capital expenditures, excluding acquisitions         (21,627 )       (12,497 )       (70,006 )       (71,588 )
                                           
Free cash flow       $ 18,187       $ 27,726       $ 65,640       $ 64,656  
                                           

Adjusted net income and adjusted diluted earnings per share. Adjusted net income and related earnings per share information exclude certain transactions that management believes are not indicative of our business. We believe that the inclusion of this non-GAAP presentation makes it easier to compare our financial performance across reporting periods on a consistent basis.

EBITDA and adjusted EBITDA. EBITDA is defined as net income before discontinued operations, net of tax (if applicable), interest expense, income taxes, depreciation and amortization, and debt restructuring or extinguishment expense (if applicable), including any write-off of deferred financing costs. Adjusted EBITDA further excludes certain non-cash expenses, including share-based compensation, as well as transactions that management believes are not indicative of our business. Because EBITDA and adjusted EBITDA, as defined, exclude some but not all items that affect our cash flow from operating activities, they may not be comparable to similarly titled performance measures presented by other companies.

We present EBITDA and adjusted EBITDA because we believe they provide useful information regarding our ability to meet our future debt payment requirements, capital expenditures and working capital requirements and an overall evaluation of our financial condition. EBITDA and adjusted EBITDA have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows from operations, or other consolidated income or cash flow data prepared in accordance with GAAP.

EBITDA and adjusted EBITDA margins are calculated as EBITDA and adjusted EBITDA, respectively, divided by total revenues expressed as a percentage.

Free Cash Flow. Free cash flow is defined as net cash provided by operating activities, minus or plus, net cash used in or provided by investing activities, excluding acquisitions and certain transactions. Free cash flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, the most directly comparable financial measure prepared in accordance with GAAP. We present free cash flow because we believe it provides useful information regarding our liquidity and ability to meet our short-term obligations. In particular, free cash flow indicates the amount of cash available after capital expenditures for, among other things, investments in our existing business, debt service obligations, payment of authorized quarterly dividends, repurchase of our common stock and strategic small acquisitions.

Constant Currency. We calculate the effect of currency fluctuations on current periods by translating the results for our business in the U.K. during the current period using the average exchange rates from the comparative period. We present constant currency information to provide useful information to assess our underlying business excluding the effect of material foreign currency rate fluctuations. Calculated in constant currency, our rental revenues for the three months ended December 31, 2017 were $1.3 million lower than when calculated in accordance with GAAP.

Source: Mobile Mini, Inc.

Mobile Mini, Inc.
Van Welch, 602-308-3879
Executive VP & Chief Financial Officer
www.mobilemini.com
or
Investor Relations Counsel:
The Equity Group Inc.
Fred Buonocore, 212-836-9607
Kevin Towle, 212-836-9620