McGrath Rentcorp - Conference Presentation Calls

McGrath Rentcorp reported unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2009. The company reported revenues for the quarter ended September 30, 2009, of $75.5 million, a decrease of 13%, compared to $86.3 million in the third quarter of 2008. The company reported net income of $9.5 million, or $0.40 per diluted share for the third quarter of 2009, compared to net income of $11.6 million, or $0.48 per diluted share, in the third quarter of 2008. Mobile Modular's rental revenues decreased by 14% to $22.5 million and operating income declined by 11% to $12.1 million compared to the third quarter of 2008. Debt decreased $7.1 million during the quarter to $261.5 million, with the company's funded debt (notes payable) to equity ratio decreasing from 1.22 to 1 at December 31, 2008 to 1.00 to 1 as of September 30, 2009. As of September 30, 2009, the Company had capacity to borrow an additional $117.5 million under its lines of credit. Adjusted EBITDA decreased 11% to $33.7 million for the third quarter of 2009. At September 30, 2009, the Company's ratio of funded debt to the last twelve months actual Adjusted EBITDA was 2.00 to 1 compared to 2.15 to 1 at December 31, 2008. Adjusted EBITDA is defined as net income before minority interest in income of subsidiary, interest expense, provision for income taxes, depreciation, amortization and other non-cash stock-based compensation. For the quarter, the compared reported income from operations of $17.3 million and income before provision for income taxes of $15.6 million compared to income from operations of $21.5 million and income before provision for income taxes of $19.02 million for the same period a year ago. For the nine months, the company reported total revenues of $209.1 million and income from operations of $21.5 million and income before provision for income taxes of $40.1 million and net income of $24.4 million or $1.02 per dilute share compared to total revenues of $225.6 million and income from operations of $59.7 million and income before provision for income taxes of $52.5 million and net income of $31.9 million or $1.33 per dilute share for the same period a year ago. For the nine months, the company reported net cash provided by operating activities of $89.5 million and purchase of rental equipment of $51.3 million and purchase of property, plant and equipment of $1.3 million compared to net cash provided by operating activities of $81.2 million and purchase of rental equipment of $82.5 million and purchase of property, plant and equipment of $12.7 million for the same period a year ago. The company is narrowing its previous 2009 full-year earnings guidance range of $1.30 to $1.40 per diluted share to an updated range of $1.30 to $1.35 per diluted share.

McGrath Rentcorp said that the company is looking for acquisition opportunities. Dennis Kakures, McGrath�s President and CEO said, �Our portable storage initiative became profitable earlier this year and we have increased its profitability during 2009. Keep in mind that these earnings are very small relative to our other established rental businesses. We've now expanded our portable storage business into all of our modular inventory center locations. We've leveraged this existing infrastructure to reduce our cost structure in ramping our portable storage business. We are also benefiting in these new markets from synergies between our legacy modular building customers and their portable storage needs. We continue to seek smaller acquisition opportunities in our existing regions to accelerate the growth of our portable storage business.�