Mobile Mini Reports Q3 2018 Results and Announces Quarterly Dividend

Oct 19, 2018 06:30 am
PHOENIX -- 

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 September 30, 2018. Highlights discussed below include year-over-year revenue growth of 9.6%, record fleet on rent in the Tank & Pump segment and margin expansion.

Total revenues were $149.7 million and rental revenues were $140.9 million, as compared to $136.6 million and $127.7 million, respectively, for the same period last year. Rental revenues for the Storage Solutions and Tank & Pump Solutions businesses for the current quarter were $112.6 million and $28.3 million, respectively, compared to $104.5 million and $23.2 million, respectively, for the same period last year.

As previously communicated, in July the Company decided to divest of certain underperforming assets. The classification of these assets as held for sale generated a non-cash charge, which was slightly offset by expected proceeds upon disposal. As a result, the Company realized a net loss of $52.2 million, or $1.18 per diluted share, in the third quarter of 2018. The net loss compares to net income of $11.2 million, or $0.25 per diluted share, for the third quarter of 2017. On an adjusted basis, third quarter net income was $19.1 million, or $0.42 per diluted share, as compared to adjusted net income of $11.8 million, or $0.27 per diluted share, for the third quarter of 2017. Adjusted EBITDA was $55.4 million and adjusted EBITDA margin was 37.0% for the third quarter of 2018.

Asset Divestiture

The Company is in the process of divesting the aforementioned underperforming assets. These assets have not generated meaningful revenue over the last several years and therefore this asset disposal should not affect Mobile Mini’s ability to generate revenue or to meet customer demand, nor is this divestiture expected to negatively affect liquidity or free cash flow on a go-forward basis. The $98.3 million loss on divestiture consisted of a non-cash loss of $106.2 million, net of estimated proceeds. Approximately 50% of the assets were divested in the third quarter, and the remaining assets are anticipated to be divested by December 31, 2018. The Company is expecting to generate annual operational savings of $5 million to $7 million over the course of the 12 months following the completion of the divestitures, along with $4 million of reduced depreciation expense.

Dividend

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

Third Quarter 2018 Highlights

  • Continued strong rental revenue growth in Tank & Pump Solutions with a 21.9% year-over-year increase.
  • Delivered solid Storage Solutions rental revenue year-over-year growth of 7.8%.
  • Reached all-time high Tank & Pump Solutions’ OEC fleet on rent and drove average OEC utilization to 72.2% for the quarter, up 560 bps compared to the prior-year quarter.
  • Increased total Storage Solutions average units on rent by 2.6% year-over-year, with utilization of 84.3% as of September 30, 2018.
  • Raised Storage Solutions rental rates by 2.4% year-over-year, with rates on new rentals up 2.3%.
  • Expanded adjusted EBITDA margin by 370 basis points to 37.0% and achieved adjusted EBITDA growth of 21.7%, compared to the prior-year quarter.
  • Generated strong net cash from operating activities of $46.3 million and free cash flow of $17.5 million.

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “Third quarter results demonstrate that the processes and infrastructure that we have put in place are producing the operational efficiencies and financial results we expected. Our sales strategies continued to drive solid rental revenue growth of 10.4% during the quarter. We converted this top-line growth into 21.7% year-over-year adjusted EBITDA growth and expanded our adjusted EBITDA margin 370 basis points to 37.0% for the third quarter of 2018. This very strong profitability further resulted in $17.5 million of free cash flow.”

Mr. Olsson continued, “Rental revenues for our North American Storage Solutions segment grew 9.5% compared to the prior-year quarter and we believe that our seasonal business will be at similarly strong levels as last year. In our Tank & Pump Solutions business we have begun to see meaningful revenues generated on contracts that we won in late 2017 and early 2018 and we expect increased turnaround activity in the fourth quarter. The pipeline in North America looks healthy and economic indicators are positive, while activity in the U.K. is stable, with increases in rate offsetting a slight decrease in units on rent. For the full year 2018 we anticipate consolidated double-digit revenue growth as compared to 2017, outpacing our Evergreen model, leading to continued strong increases in adjusted EBITDA and free cash flow generation and a decreased leverage ratio.”

Conference Call

Mobile Mini will host a conference call today, Friday, October 19 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 194,300 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 12,600 units. Mobile Mini’s network is comprised of 157 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, expected operational savings from the asset disposal, our ability to generate revenue or to meet customer demand despite the disposal, the continued growth of revenue, adjusted EBITDA, and free cash flow, our ability to decrease our leverage ratio, expected levels of seasonal business from our North American Storage Solutions business, and the level of turn around activity of our Tank & Pump Solutions business, all of 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 Operations
(Unaudited)
(in thousands, except percentages and per share data)
           
Three Months Ended September 30, 2018 Three Months Ended September 30, 2017
Actual Adjustments Adjusted (1) Actual Adjustments Adjusted (2)
 
Revenues:
Rental $ 140,924 $ — $ 140,924 $ 127,695 $ — $ 127,695
Sales 8,716 — 8,716 8,438 — 8,438
Other   67   —   67   503   —   503
Total revenues   149,707   —   149,707   136,636   —   136,636
 
Costs and expenses:
Rental, selling and general expenses 90,764 — 90,764 87,745 (237 ) 87,508
Cost of sales 5,770 — 5,770 5,519 — 5,519
Restructuring expenses — — — 625 (625 ) —
Asset impairment charge and

loss on divestiture, net

98,278 (98,278 ) — — — —
Depreciation and amortization   16,191   —   16,191   15,935   —   15,935
Total costs and expenses   211,003   (98,278 )   112,725   109,824   (862 )   108,962
 
(Loss) income from operations (61,296 ) 98,278 36,982 26,812 862 27,674
 
Other income (expense):
Interest income — — — 4 — 4
Interest expense (10,487 ) — (10,487 ) (9,203 ) — (9,203 )
Foreign currency exchange   24   —   24   (2 )   —   (2 )
 
(Loss) income before income tax provision (71,759 ) 98,278 26,519 17,611 862 18,473
 
Income tax (benefit) provision (19,594 ) 27,010 7,416 6,383 327 6,710
                       
Net (loss) income $ (52,165 ) $ 71,268 $ 19,103 $ 11,228 $ 535 $ 11,763
 
EBITDA/Adjusted EBITDA $ (45,081 ) $ 55,427 $ 42,749 $ 45,531
EBITDA/Adjusted EBITDA as a percentage of

total revenues

-30.1 % 37.0 % 31.3 % 33.3 %
 
Earnings per share:
Basic $ (1.18 ) $ 0.43 $ 0.25 $ 0.27
Diluted (1.18 ) 0.42 0.25 0.27
 
Weighted average number of common and

common share equivalents outstanding:

Basic 44,323 44,323 44,039 44,039
Diluted 44,323 45,098 44,206 44,206
(1)   Adjusted column for the three months ended September 30, 2018 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 September 30, 2018 include the following, along with the related tax effects:

 • Exclusion of an asset impairment charge and loss on divestiture, net of proceeds of $98.3 million related to assets that the Company placed as held for sale during the quarter.

 • Exclusion of $2.6 million in income tax benefit resulting from the reversal in the quarter of a provisional tax expense related to the repatriation of foreign earnings for the impact of the U.S. federal tax reform enacted in the fourth quarter of 2017.

(2) Adjusted column for the three months ended September 30, 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 three-month period ended September 30, 2017 include the following, along with the related tax effects:

 • Reduction of $0.2 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 $0.6 million related to the restructuring of our business operations.

 
Mobile Mini, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except percentages and per share data)
           
Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017
Actual Adjustments Adjusted (1) Actual Adjustments Adjusted (2)
 
Revenues:
Rental $ 406,149 $ — $ 406,149 $ 360,288 $ — $ 360,288
Sales 25,700 — 25,700 24,817 — 24,817
Other   511   —   511   1,748   —   1,748
Total revenues   432,360   —   432,360   386,853   —   386,853
 
Costs and expenses:
Rental, selling and general expenses 269,033 — 269,033 248,954 (2,623 ) 246,331
Cost of sales 16,925 — 16,925 16,039 — 16,039
Restructuring expenses 1,306 (1,306 ) — 2,062 (2,062 ) —
Asset impairment charge and

loss on divestiture, net

98,278 (98,278 ) — — — —
Depreciation and amortization   50,206   —   50,206   46,941   —   46,941
Total costs and expenses   435,748   (99,584 )   336,164   313,996   (4,685 )   309,311
 
(Loss) income from operations (3,388 ) 99,584 96,196 72,857 4,685 77,542
 
Other income (expense):
Interest income 6 — 6 20 — 20
Interest expense (30,179 ) — (30,179 ) (26,412 ) — (26,412 )
Foreign currency exchange   69   —   69   (29 )   —   (29 )
 
(Loss) income before income tax provision (33,492 ) 99,584 66,092 46,436 4,685 51,121
 
Income tax (benefit) provision (11,182 ) 27,338 16,156 16,279 1,777 18,056
                       
Net (loss) income $ (22,310 ) $ 72,246 $ 49,936 $ 30,157 $ 2,908 $ 33,065
 
EBITDA/Adjusted EBITDA $ 46,893 $ 153,980 $ 119,789 $ 129,179
EBITDA/Adjusted EBITDA as a percentage of

total revenues

10.8 % 35.6 % 31.0 % 33.4 %
 
Earnings per share:
Basic $ (0.50 ) $ 1.13 $ 0.68 $ 0.75
Diluted (0.50 ) 1.11 0.68 0.75
 
Weighted average number of common and

common share equivalents outstanding:

Basic 44,275 44,275 44,030 44,030
Diluted 44,275 45,011 44,190 44,190
(1)   Adjusted column for the nine months ended September 30, 2018 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 nine-month period ended September 30, 2018 include the following, along with the related tax effects:

 

 • Exclusion of costs of $1.3 million related to the restructuring of our business operations.

 

 • Exclusion of an asset impairment charge and loss on divestiture, net of proceeds of $98.3 million related to assets that the Company placed as held for sale during the period.

 

 • Exclusion of $2.6 million in income tax benefit resulting from the reversal in the period of a provisional tax expense related to the repatriation of foreign earnings for the impact of the U.S. federal tax reform enacted in the fourth quarter of 2017.

(2) Adjusted column for the nine months ended September 30, 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 nine-month period ended September 30, 2017 include the following, along with the related tax effects:

 

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

 

 • 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.

 

 • Exclusion of costs of $2.1 million related to the restructuring of our business operations.

 
Mobile Mini, Inc.
Operating Data
(Unaudited)
       
 
2018   2017
As of September 30:
Stand-alone Storage Solutions locations 119 122
Stand-alone Tank & Pump Solutions locations 21 17
Combined Storage Solutions and Tank & Pump Solutions locations 17 16
Storage Solutions rental fleet units 194,300 214,900
Tank & Pump Solutions rental fleet units 12,600 12,000
 
Average utilization - Three months ended September 30:
Storage Solutions - utilization based on number of units 77.9 % 71.8 %
Tank & Pump Solutions - utilization based on original equipment cost 72.2 % 66.6 %
 
Average utilization - Nine months ended September 30:
Storage Solutions - utilization based on number of units 73.0 % 70.1 %
Tank & Pump Solutions - utilization based on original equipment cost 73.3 % 64.3 %
 
Mobile Mini, Inc.
Business Segment Information - Adjusted (1)
(Unaudited)
(in thousands, except percentages)
           
Three Months Ended September 30, 2018 Three Months Ended September 30, 2017

Storage
Solutions

Tank & Pump
Solutions

Total

Storage
Solutions

Tank & Pump
Solutions

Total
 
Revenues:
Rental $ 112,639 $ 28,285 $ 140,924 $ 104,488 $ 23,207 $ 127,695
Sales 7,696 1,020 8,716 6,743 1,695 8,438
Other   40   27   67   401   102   503
Total revenues   120,375   29,332   149,707   111,632   25,004   136,636
 
Costs and expenses:
Rental, selling and general expenses 71,121 19,643 90,764 69,958 17,550 87,508
Cost of sales 5,226 544 5,770 4,477 1,042 5,519
Depreciation and amortization   9,758   6,433   16,191   9,836   6,099   15,935
Total costs and expenses   86,105   26,620   112,725   84,271   24,691   108,962
 
Income from operations $ 34,270 $ 2,712 $ 36,982 $ 27,361 $ 313 $ 27,674
 
Adjusted EBITDA $ 46,174 $ 9,253 $ 55,427 $ 39,052 $ 6,479 $ 45,531
Adjusted EBITDA Margin 38.4 % 31.5 % 37.0 % 35.0 % 25.9 % 33.3 %
 
 
 
Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017

Storage
Solutions

Tank & Pump
Solutions

Total

Storage
Solutions

Tank & Pump
Solutions

Total
 
Revenues:
Rental $ 325,293 $ 80,856 $ 406,149 $ 293,780 $ 66,508 $ 360,288
Sales 21,785 3,915 25,700 20,763 4,054 24,817
Other   399   112   511   1,418   330   1,748
Total revenues   347,477   84,883   432,360   315,961   70,892   386,853
 
Costs and expenses:
Rental, selling and general expenses 212,248 56,785 269,033 195,928 50,403 246,331
Cost of sales 14,695 2,230 16,925 13,808 2,231 16,039
Depreciation and amortization   31,398   18,808   50,206   28,496   18,445   46,941
Total costs and expenses   258,341   77,823   336,164   238,232   71,079   309,311
 
Income (loss) from operations $ 89,136 $ 7,060 $ 96,196 $ 77,729 $ (187 ) $ 77,542
 
Adjusted EBITDA $ 127,798 $ 26,182 $ 153,980 $ 110,733 $ 18,446 $ 129,179
Adjusted EBITDA Margin 36.8 % 30.8 % 35.6 % 35.0 % 26.0 % 33.4 %
 
(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)
   
 
September 30, December 31,
2018 2017
(unaudited) (audited)
ASSETS
Cash and cash equivalents $ 4,935 $ 13,451
Receivables, net 118,101 111,562
Inventories 13,444 15,671
Rental fleet, net 925,956 989,154
Property, plant and equipment, net 155,621 157,304
Other assets 17,586 15,334
Intangibles, net 57,164 62,024
Goodwill   706,768   708,907
Total assets $ 1,999,575 $ 2,073,407
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $ 32,610 $ 26,955
Accrued liabilities 80,114 78,084
Lines of credit 610,223 634,285
Obligations under capital leases 61,853 52,791
Senior notes, net 246,329 245,850
Deferred income taxes   158,758   173,754
Total liabilities   1,189,887   1,211,719
 
Stockholders' equity:
Common stock 500 497
Additional paid-in capital 616,850 605,369
Retained earnings 407,559 463,322
Accumulated other comprehensive loss (67,387 ) (60,334 )
Treasury stock   (147,834 )   (147,166 )
Total stockholders' equity   809,688   861,688
Total liabilities and stockholders' equity $ 1,999,575 $ 2,073,407
 
 
Mobile Mini, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
    Nine Months Ended
September 30,
2018     2017
Cash flows from operating activities:
Net (loss) income $ (22,310 ) $ 30,157
Adjustments to reconcile net (loss) income to net cash

provided by operating activities:

Asset impairment charge and loss on divestiture, net 98,278 —
Provision for doubtful accounts 1,980 3,176
Amortization of deferred financing costs 1,545 1,545
Amortization of long-term liabilities 109 98
Share-based compensation expense 7,866 5,890
Depreciation and amortization 50,206 46,941
Gain on sale of rental fleet (4,523 ) (4,273 )
Loss on disposal of property, plant and equipment 548 472
Deferred income taxes (12,891 ) 15,167
Foreign currency exchange (69 ) 29
Changes in certain assets and liabilities, net of

effect of businesses acquired

  (4,519 )   (3,370 )
Net cash provided by operating activities   116,220   95,832
 
Cash flows from investing activities:
Proceeds from sale of assets held for sale 3,508 —
Additions to rental fleet, excluding acquisitions (65,620 ) (45,945 )
Proceeds from sale of rental fleet 11,447 9,602
Additions to property, plant and equipment, excluding acquisitions (14,635 ) (12,816 )
Proceeds from sale of property, plant and equipment   603   780
Net cash used in investing activities   (64,697 )   (48,379 )
 
Cash flows from financing activities:
Net repayments under lines of credit (24,062 ) (281 )
Deferred financing costs — (12 )
Principal payments on capital lease obligations (6,683 ) (5,526 )
Issuance of common stock 3,617 4,685
Dividend payments (33,312 ) (30,120 )
Purchase of treasury stock   (668 )   (8,359 )
Net cash used in financing activities   (61,108 )   (39,613 )
 
Effect of exchange rate changes on cash   1,069   632
 
Net change in cash (8,516 ) 8,472
 
Cash and cash equivalents at beginning of period   13,451   4,137
Cash and cash equivalents at end of period $ 4,935 $ 12,609
 
Equipment and other acquired through capital lease obligations $ 15,746 $ 6,610
Capital expenditures accrued or payable 9,774 8,931
 

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

September 30,

Nine Months Ended

September 30,

2018 2017 2018 2017
Net (loss) income $ (52,165 ) $ 11,228 $ (22,310 ) $ 30,157
Interest expense 10,487 9,203 30,179 26,412
Income tax (benefit) provision (19,594 ) 6,383 (11,182 ) 16,279
Depreciation and amortization   16,191   15,935   50,206   46,941
EBITDA (45,081 ) 42,749 46,893 119,789
 
Share-based compensation expense 2,230 1,920 7,503 4,705
Restructuring expenses — 625 1,306 2,062
Asset impairment charge and loss on divestiture, net 98,278 — 98,278 —
Acquisition-related expenses — 26 — 123
Other   —   211   —   2,500
Adjusted EBITDA $ 55,427 $ 45,531 $ 153,980 $ 129,179
 
 
Three Months Ended

September 30,

Nine Months Ended

September 30,

2018 2017 2018 2017
Net cash provided by operating activities $ 46,268 $ 32,611 $ 116,220 $ 95,832
Interest paid 13,576 12,192 31,753 30,379
Income and franchise taxes paid 939 213 2,346 1,313
Share-based compensation expense,

including restructuring expense

(2,230 ) (2,070 ) (7,866 ) (5,890 )
Asset impairment charge and loss on divestiture, net (98,278 ) — (98,278 ) —
Gain on sale of rental fleet 1,263 1,447 4,523 4,273
Loss on disposal of property, plant and

equipment

(71 ) (190 ) (548 ) (472 )
Changes in certain assets and liabilities, net of

effect of businesses acquired

  (6,548 )   (1,454 )   (1,257 )   (5,646 )
EBITDA $ (45,081 ) $ 42,749 $ 46,893 $ 119,789
 
 
Mobile Mini, Inc.
Free Cash Flow GAAP Reconciliation
(Unaudited)
(in thousands)
               
Three Months Ended

September 30,

Nine Months Ended

September 30,

2018 2017 2018 2017
Net cash provided by operating activities $ 46,268 $ 32,611 $ 116,220 $ 95,832
 
Additions to rental fleet, excluding acquisitions (27,144 ) (22,918 ) (65,620 ) (45,945 )
Proceeds from sale of rental fleet 3,770 3,319 11,447 9,602
Additions to property, plant and equipment,

excluding acquisitions

(5,554 ) (4,109 ) (14,635 ) (12,816 )
Proceeds from sale of property, plant and

equipment

  136   12   603   780
Net capital expenditures, excluding acquisitions (28,792 ) (23,696 ) (68,205 ) (48,379 )
               
Free cash flow $ 17,476 $ 8,915 $ 48,015 $ 47,453
 

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.

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