Mcgrath Rentcorp · NASDAQ:MGRC
Mcgrath Rentcorp — Q4 2022 Earnings Presentation
36 slides from Mcgrath Rentcorp's earnings presentation, Feb 24, 2023
Slide 1: Q4 2022 Quarterly Investor Presentation
FEBRUARY 24, 2023 Q4 2022 Quarterly Investor Presentation
Slide 2: 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 3: 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 4: Transaction 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 5: Q4 2022 Quarterly Investor Presentation
Q4 2022 Quarterly Investor Presentation The slides that follow summarize McGrath’s performance prior to the Adler divestiture and Vesta Modular acquisition announced on February 1, 2023 PAGE 5
Slide 6: Uniquely McGrath
Uniquely McGrath B2B Rentals Modulars, Electronics, Dividend Investor Focus Tanks & Boxes 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 Custom
Slide 7: McGrath Snapshot
McGrath Snapshot Total Revenues TOTAL REVENUES (2022) MARKET CAP 13% $734M ~$2.6B 21% DIVERSE CUSTOMER BASE EMPLOYEES ~23,000 ~1,200 66% (1) Mobile Modular TRS-RenTelco Adler Tank Rentals (1) Mobile Modular includes Mobile Modular Portable Storage, Kitchens To Go, and Enviroplex PAGE 7
Slide 8: Company Priorities
Company Priorities STRATEGIC GROWTH: Centered on largest business segment – Modulars Increasing geographic coverage Wider services solutions to customers – Custom Modular Solutions, Site Related Services, Mobile Modular Plus CORPORATE RESPONSIBILITY: Highlighting commitment to Environmental, Social
Slide 9: McGrath Historic Operating Results
McGrath Historic Operating Results Total Revenues Adjusted EBITDA(a) EBIT $800 734 $350 $200 289 167 617 155 $300 $175 570 573 241 249 141 141 $600 498 237 $150 132 129 $250 117 115 128 579 203 $125 97 $200 $400 488 402 455 444 $150 41% 42% 42% 40% 39% of total $100 79% of total revenue $75 81% 80%
Slide 10: Rental Segment and Total McGrath Adjusted EBITDA
Rental Segment and Total McGrath Adjusted EBITDA(a) Mobile Modular(b) TRS-RenTelco Adler Tank Rentals MGRC $175 159 $175 $175 $350 289 $150 $150 $150 $300 130 249 119 237 241 $125 $125 $125 $250 108 203 90 86 92 $200 $100 $100 80 85 $100 69 41% 42% 42% 40% 39% of total revenue $75 $75 $75 $150 $50 t
Slide 11: Q4 2022 Quarterly Highlights
Q4 2022 Quarterly Highlights Strong McGrath results reflecting broad based demand and good execution • Total revenues $210.9M (+20%) • Operating income $55.8M (+30%) • Adjusted EBITDA $91.0M (+23%) Each rental segment achieved healthy rental revenue growth YOY • Mobile Modular +18% • TRS-RenTelco +8
Slide 12: Financial Highlights
Financial Highlights PAGE 12
Slide 13: Operating Results
Operating Results (dollars in millions except per share amounts) Twelve months ended December 31 Three months ended December 31 2022 2021 Change 2022 2021 Change Rental Revenue 456.0 390.0 17% 122.8 106.1 16% Rental Related Services 122.6 98.1 25% 34.1 24.2 41% Sales 150.7 125.2 20% 52.9 44.7 18% To
Slide 14: Rental Revenue Quarterly Comparison (2021–2022)
Rental Revenue Quarterly Comparison (2021 – 2022) +18% Mobile Modular(a) TRS-RenTelco $80 69.1 72.7 $80 61.5 64.9 61.5 59.2 $60 53.2 $60 +8% 46.7 $40 $40 27.3 28.5 27.9 29.7 29.2 31.8 29.1 31.4 $20 $20 $0 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Adler Tank Rentals MGRC +16% $80 $160 122.8 $60 $120 104.2 110.6 103
Slide 15: Adjusted EBITDA Quarterly Comparison (2021–2022)
Adjusted EBITDA(a) Quarterly Comparison (2021 – 2022) +36% Mobile Modular – Adjusted EBITDA(b) TRS-RenTelco – Adjusted EBITDA $60 53.1 $60 +13% $50 39.9 $50 36.6 39.1 $40 35.8 $40 30.4 30.4 $30 24.0 $30 20.4 20.7 21.0 22.1 22.0 23.9 22.3 25.3 $20 $20 $10 $10 $0 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Adler Tank
Slide 16: 2023 Financial Outlook
2023 Financial Outlook 2022 2023 Outlook (as of 2/22/23) Total Revenues $734M $780M to $810M Adjusted EBITDA (a) $289M $294M to $309M Gross Rental Equipment Capital $188M $190M to $210M Expenditures (a) Adjusted EBITDA defined on page 9 PAGE 16
Slide 17: Rental Segment Highlights
Rental Segment Highlights PAGE 17
Slide 18: Mobile Modulars & Mobile Modulars Portable Storage
Mobile Modulars & Mobile Modulars Portable Storage PAGE 18
Slide 19: Rental Assets
Rental Assets mobile modular ¥ ’ ry ; = a al | mn q sat 2— McGRATH
Slide 20: Mobile Modular Operating Results
Mobile Modular Operating Results(a)(b) Total Revenues Rental Gross Profit Adjusted EBITDA $500 462 $160 154 $180 of rental 159 $140 132 57% $160 of total revenue 34% revenue $400 363 118 $140 130 $120 60% 119 322 109 301 95 63% $120 108 36% $300 $100 60% 37% 255 $100 90 $80 60% 36% 58% of total $80
Slide 21: Mobile Modular Highlights
Mobile Modular Highlights(a)(b) Rental Revenue Period End Rental Equipment (Original Cost) Average Utilization $80 $1,200 100.0% 72.7 69.1 1,026 1,037 1,055 $70 1,014 1,001 64.9 970 981 81.2% 61.5 61.5 $1,000 77.1% 78.1% 76.5%80.1% 76.9% 59.2 80.0% 75.8% 75.5% $60 838 53.2 $800 $50 46.7 60.0% $40 $6
Slide 22: Mobile Modular Highlights
Mobile Modular Highlights Adjusted EBITDA(a) Adjusted EBITDA(a) % of Total Revenue Average Rental Rate(b) $60 50% 3.00% 2.79% 2.86% 53.1 2.72% 2.65% 2.70% 2.64% 2.59% 2.45% $50 39% 40% 40% 36% 35% 39.9 39.1 34% 33% 32% 32% $40 35.8 36.6 2.00% 30% 30.4 30.4 $30 24.0 20% $20 1.00% 10% $10 $0 0% 0.00%
Slide 23: Modular Buildings and Storage Containers Growth Opportunities
Modular Buildings and Storage Containers Growth Opportunities Strategic geographic footprint - Multiple attractive regions with established market position and long-term growth opportunities – CA, FL, TX, Mid Atlantic Industry-leading position in education rentals Regional expansion opportunities –
Slide 24: TRS-RenTelco
TRS-RenTelco ie: McGRATH
Slide 25: Rental Assets
Rental Assets Rental and Sales of General Purpose and Communications Test Equipment PAGE 25
Slide 26: TRS-RenTelco Operating Results
TRS-RenTelco Operating Results(a) Total Revenues Rental Gross Profit Adjusted EBITDA $200 $60 $100 92 51 85 86 151 47 80 61% of total 141 140 45 45 42% of rental $80 60% 61% revenue $150 131 41% revenue 69 61% $40 39 44% 42% 119 of total $60 58% 44% 80% revenue $100 77% 81% 79% 76% $40 $20 $50 $20 $
Slide 27: TRS-RenTelco Highlights
TRS-RenTelco Highlights(a) Rental Revenue Period End Rental Equipment (Original Cost) Average Utilization $40 $500 100.0% 31.8 31.4 29.7 387 393 395 28.5 29.2 29.1 $400 374 80.0% $30 27.3 27.9 359 364 361 339 68.1% 67.7% 66.9% 63.4% 64.5% 65.3% 65.9% 63.0% $300 60.0% $20 $200 40.0% $10 $100 20.0% $0
Slide 28: TRS-RenTelco Highlights
TRS-RenTelco Highlights Adjusted EBITDA(a) Adjusted EBITDA(a) % of Total Revenue Average Rental Rate(b) $30 70% 6.00% 62% 63% 62% 25.3 61% 62% 59% 59% 61% $25 23.9 60% 5.00% 22.1 22.0 22.3 4.11% 4.02% 4.16% 4.20% 20.4 20.7 21.0 50% 3.99% 3.93% 4.02% 4.05% $20 4.00% 40% $15 3.00% 30% $10 2.00% 20% $5
Slide 29: TRS-RenTelco Growth Opportunities
TRS-RenTelco Growth Opportunities Market leader in general purpose and communications equipment rentals Highly diversified end markets and customer base with positive demand trends Positive demand outlook for technology-related end markets driven by new technologies in almost all our markets (for ex
Slide 30: Adler Tank Rentals
Adler Tank Rentals ie: ‘ADLER McGRATH
Slide 31: Adler Tank Rentals Operating Results
Adler Tank Rentals Operating Results(a)(b) Total Revenues Rental Gross Profit Adjusted EBITDA $125 $60 $50 96 98 98 $100 $40 39 38 38 82 43 40 40% 77 38 39% 38% $40 61% of total $75 58% $30 29 28 revenue 57% of rental 29 28 revenue 37% 34% 68% of total 53% 50% $50 73% 69% 70% 68% revenue $20 $20 $25
Slide 32: Adler Tank Rentals Highlights
Adler Tank Rentals Highlights(a)(b) Rental Revenue Period End Rental Equipment (Original Cost) Average Utilization $20 18.7 $400 100.0% 17.5 16.0 15.5 313 308 313 307 311 307 309 307 14.8 80.0% $15 14.2 $300 13.5 12.2 58.0% 60.0% 54.9% 51.6% 50.1% 48.3% 48.1% $10 $200 44.0% 40.3% 40.0% $5 $100 20.0%
Slide 33: Adler Tank Rentals Highlights
Adler Tank Rentals Highlights(a) Adjusted EBITDA(b) Adjusted EBITDA(b) % of Total Revenue Average Rental Rate(c) $14 50% 5.00% 12.1 42% $12 39% 10.2 40% 4.00% 3.35% 36% 35% 35% 3.17% 3.46% 3.34%3.50% $10 34% 32% 33% 3.21% 3.27% 3.30% 8.6 7.7 7.8 30% 3.00% $8 6.7 6.7 5.7 $6 2.00% 20% $4 10% 1.00% $2
Slide 34: 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 35: Appendix
Appendix 2s McGRATH
Slide 36: Rental Fleet Metrics
Rental Fleet Metrics (1) Pe r i o d End U ti l i z a ti o n Q4-22 vs. FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Q320 Q420 Q121 Q221 Q321 Q421 Q122 Q222 Q322 Q422 Q3-22 % chg Q4 Y/Y % chg (4) Mobile Modular 66.7% 70.7% 75.0% 76.9% 77.3% 77.8% 79.3% 79.1% 76.0% 76.4% 80.7% 76.5% 76.0% 75.