Mcgrath Rentcorp · NASDAQ:MGRC
Mcgrath Rentcorp — Baird 2023 Global Industrial Conference
24 slides from Mcgrath Rentcorp's conference presentation, Nov 7, 2023
Slide 1: Baird 2023 Global Industrial Conference
NOVEMBER 7, 2023 Baird 2023 Global Industrial Conference
Slide 2: Presenting today
Presenting today Joe Hanna Keith Pratt President, Executive Vice President, Chief Executive Officer Chief Financial Officer
Slide 3: Safe Harbor
Safe Harbor Statements contained in this presentation which are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding McGrath’s (the “Company’s”) expectation
Slide 4: Focusing the Portfolio on Modular Through Vesta Acquisition and Adler Divestiture
Announced on February 1, 2023 - Focusing the Portfolio on Modular Through Simultaneous Acquisition of Vesta and Divestiture of Adler Accelerates McGrath’s strategic growth priorities by increasing exposure to the modular business Creates a more competitive and larger scaled modular business with inc
Slide 5: Transaction Significantly Focuses the Portfolio and Scales the Mobile Modular Business
Transaction Significantly Focuses the Portfolio and Scales the Mobile Modular Business. For additional information on the transaction refer to the February 1, 2023 transaction presentation ✓ Mobile Modular segment’s high EBITDA margins, recurring revenue, and Adler favorable demand make it TRS 13% a
Slide 6: Uniquely McGrath: Over 40 Years of Excellence
Uniquely McGrath B2B Rentals Modulars and Dividend Investor Focus Electronics Champion Shareholder 32 Years of Return CAGR 16%(c) Consecutive Increases Revenue North America $734M Focus Adjusted 99% of EBITDA $289M(a) (b) Total Revenues Diverse Customer Base Strong Service ~23,000 Customers Corporat
Slide 7: Modular Buildings and Storage Containers
Modular Buildings and Storage Containers QUARTERLY REVENUES (Q3-23) $195M RENTAL EQUIPMENT (AT 09/30/23 OAC (1)) POSITIONING: A leading modular provider in North America Leader in California Texas, Florida, and Mid-Atlantic education markets $1,474M PRODUCTS: RENTAL FLEET (units) 83,000 Office build
Slide 8: Rental Operations Revenue Customer Mix
Rental Operations Revenue Customer Mix (a) Q3-23 Customer Mix Education Mix Commercial Mix Higher Education, 2% Other, 6% Entertainment & Retail, 1% Daycare/Other, 2% Recreation, 2% Education, 33% Health Care, 2% Private K-12/ Government, 4% Charter, 6% Transportation, 3% General Business, 3% Reside
Slide 9: Modular Buildings and Storage Containers Growth Opportunities
Modular Buildings and Storage Containers Growth Opportunities Large and growing market Industry - Leading position in education rentals Geographic expansion opportunities for Modulars and Portable Storage, through organic investment and strategic acquisitions Positive fleet pricing dynamics as contr
Slide 10: Electronic Test Equipment
Electronic Test Equipment QUARTERLY REVENUES (Q3-23) $39M RENTAL EQUIPMENT (AT 09/30/23 OAC (1)) POSITIONING: $383M Leader in North Americas PRODUCTS: RENTAL FLEET (units) 24,000 General purpose and communications test equipment ~ COVERAGE: Serving customers in North America and selectively overseas
Slide 11: TRS-RenTelco Growth Opportunities
TRS-RenTelco Growth Opportunities North American market leader in general purpose and communications equipment rentals Highly diversified end markets and customer base with positive long term demand trends Positive long term demand outlook for technology-related end markets driven by new technologie
Slide 12: Corporate Responsibility & Values
Corporate Responsibility & Values We take corporate social responsibility and fundamental good corporate citizenship seriously at McGrath Visit our corporate responsibility site for additional environmental sustainability, social responsibility and governance (ESG) information: https://investors.mgr
Slide 13: Financial Highlights
Financial Highlights PAGE 13
Slide 14: Rental Segment Adjusted EBITDA
Rental Segment Adjusted EBITDA(a) Mobile Modular(b) TRS-RenTelco $175 159 $175 $150 $150 130 119 $125 $125 108 90 86 92 $100 $100 80 85 69 $75 $75 $50 34% of total $50 58% 61% 60% 61% 61% of total 36% revenue revenue 36% 37% $25 35% $25 $0 $0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 (a) The
Slide 15: Q3 2023 Quarterly Highlights (continuing operations)
Q3 2023 Quarterly Highlights (continuing operations) Strong McGrath results reflecting impressive modular segment performance • Total revenues $243.5M (+40%) • Adjusted EBITDA $95.3M (+47%) Positive Mobile Modular market conditions (year over year) • 36% rental revenue growth, broad based across geo
Slide 16: Operating Results (from continuing operations)
Operating Results (from continuing operations) (dollars in millions expect per share amounts) Nine months ended September 30 Three months ended September 30 2023 2022 Change 2023 2022 Change Rental Revenue 350.8 285.6 23% 122.7 100.9 22% Rental Related Services 101.5 69.3 46% 40.5 28.2 44% Sales 148
Slide 17: Adjusted EBITDA Quarterly Comparison (2022-2023)
Adjusted EBITDA(a) (from continuing operations) Quarterly Comparison (2022 – 2023) Mobile Modular – Adjusted EBITDA(b) TRS-RenTelco – Adjusted EBITDA MGRC – Adjusted EBITDA +47% +83% 95.3 $100 $100 $100 77.0 78.8 $80 73.0 $80 $80 61.8 64.7 56.8 53.1 57.7 $60 $60 -9% $60 50.0 42.4 39.9 35.8 $40 30.4
Slide 18: Mobile Modular Pricing Highlights
Mobile Modular Pricing Highlights (1) Total fleet units on rent New Shipments Monthly revenue per unit Last Twelve Months Monthly revenue per unit $1,200 $1,200 +13% $1,027 $1,000 $1,000 $905 +10% $800 $695 $800 $633 $600 $600 $400 $400 $200 $200 $0 $0 Q3-22 Q3-23 LTM Q3-22 LTM Q3-23 $ per unit on r
Slide 19: Mobile Modular Initiatives
Mobile Modular Initiatives Mobile Modular Plus(1)(3) Site Related Services(2)(3) $25 $20 18.3 20.0 $20 $15 $15 13.7 11.0 9.8 $10 9.3 $10 $5 $5 $0 $0 2021 2022 2023 2021 2022 2023 YTD September Rental Related Services YTD September Rental Revenues Revenues (dollars in millions) (1) Mobile Modular Plu
Slide 20: 2023 Financial Outlook (from continuing operations)
2023 Financial Outlook (from continuing operations) Previous (7/20/23) 2023 Outlook (as of 10/26/23) Total Revenues $805M to $830M $820M to $830M Adjusted EBITDA (a) $306M to $320M $312M to $320M Gross Rental Equipment Capital $190M to $200M $190M to $200M Expenditures (a) Adjusted EBITDA defined on
Slide 21: Company Priorities
Company Priorities STRATEGIC GROWTH: Centered on largest and highest-growth business segment – Modulars Increasing geographic coverage Wider services solutions to customers – Mobile Modular Plus, Site Related Services, Custom Modular Solutions DISCIPLINED CAPITAL ALLOCATION: Strong balance sheet and
Slide 22: Our Dividend Distinction
Our Dividend Distinction $2.00 Dividend increases for 32 Dividend Payout Per Share(a) consecutive years $1.50 $1.86 per share annualized dividend $1.00 1.9% yield (2023 annualized dividend as of October 25, 2023) $0.50 McGrath is 1 of approximately 130 Dividend Champions in the U.S. $0.00 today, ide
Slide 23: Investment Summary
Investment Summary McGrath (Nasdaq: MGRC) Established rental businesses with solid market positions Strategic growth focus on Modular segment Disciplined capital spending on new rental equipment and acquisitions Strong cash flow and resilient business model Dividend increases for 32 consecutive year
Slide 24: Baird 2023 Global Industrial Conference Q & A
NOVEMBER 7, 2023 Baird 2023 Global Industrial Conference Q&A
McGrath RentCorp — Baird 2023 Global Industrial Conference on 6ix