Mcgrath Rentcorp · NASDAQ:MGRC
Mcgrath Rentcorp — Q3 2024 Earnings Presentation
43 slides from Mcgrath Rentcorp's earnings presentation, Oct 24, 2024
Slide 1: Q3 2024 Quarterly Investor Presentation
OCTOBER 24, 2024 Q3 2024 Quarterly Investor Presentation
Slide 2: Safe Harbor
Safe Harbor Statements contained in this presentation 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”) expectations, strategies, prospects or tar
Slide 3: Q3 2024 Announcement: Termination of WillScot Merger
Q3 2024 Announcement September 18, 2024 McGrath Confirms Agreement to Terminate Pending Merger with WillScot McGrath to receive $180 million termination fee from WillScot 1. January 29, 2024 WillScot Mobile Mini to Acquire McGrath for $3.8 Billion 2. Please refer to January 29, 2024 8-K filings, Feb
Slide 4: McGrath Overview
McGrath Overview ae McGRATH
Slide 5: Uniquely McGrath
Uniquely McGrath B2B Rentals Modulars, Storage & Dividend Investor Focus Electronics Champion Shareholder 33 Years of Return CAGR 17%(c) Consecutive Increases Revenue North America $832M Focus Adjusted 99% of EBITDA $322M(a) (b) Total Revenues Diverse Customer Base Strong Service ~22,000 Customers C
Slide 6: McGrath Snapshot Q3 2024
McGrath Snapshot Q3 2024 Total Revenues $267M Total Adjusted EBITDA (3) $104M TOTAL REVENUES MARKET CAP (1) $267M ~$2.6B 9% 13% 18% 10% DIVERSE CUSTOMER BASE EMPLOYEES ~22,000 ~1,200 78% 72% (2) (2) Mobile Modular Portable Storage Mobile Modular Portable Storage TRS-RenTelco TRS-RenTelco (1) As of 1
Slide 7: Mobile Modular
Mobile Modular QUARTERLY REVENUES (Q3-24) $191M RENTAL EQUIPMENT (AT 9/30/24 OAC (1)) POSITIONING: A leading modular provider in North America $1,398M PRODUCTS: RENTAL FLEET (units) Office buildings and complexes, classrooms COVERAGE: Mobile Modular: servicing 35 states ~ 43,000 (1) Original Acquisi
Slide 8: Portable Storage
Portable Storage QUARTERLY REVENUES (Q3-24) $23M RENTAL EQUIPMENT (AT 9/30/24 OAC (1)) POSITIONING: A leading portable storage provider in North America $242M PRODUCTS: RENTAL FLEET (units) Portable storage containers, portable office, office and storage combos COVERAGE: Portable Storage: servicing
Slide 9: TRS-RenTelco
TRS-RenTelco QUARTERLY REVENUES (Q3-24) $35M RENTAL EQUIPMENT (AT 9/30/24 OAC (1)) POSITIONING: $357M A leading provider in North America PRODUCTS: RENTAL FLEET (units) 23,000 General purpose and communications test equipment ~ COVERAGE: Serving customers in North America and selectively overseas (1
Slide 10: Company Priorities
Company Priorities STRATEGIC GROWTH: Centered on our 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
Slide 11: 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 12: Financial Highlights
Financial Highlights PAGE 12
Slide 13: Q3 2024 Quarterly Highlights – (Year Over Year)
Q3 2024 Quarterly Highlights – (Year Over Year) Strong McGrath results • Total revenues $266.8M (+10%) • Adjusted EBITDA $104.0M (+13%) Impressive Mobile Modular performance • Total revenues $191.4M (+13%) • Adjusted EBITDA $71.4M (+23%) • Growth across commercial and education customer bases Good p
Slide 14: Operating Results
Operating Results (dollars in millions) Nine months ended September 30 Three months ended September 30 2024 2023 Change 2024 2023 Change Rental Revenue 365.7 350.8 4% 124.2 122.7 1% Rental Related Services 111.6 101.5 10% 47.7 40.5 18% Sales 182.0 148.6 22% 92.5 77.1 20% Other 7.9 9.4 -17% 2.3 3.2 -
Slide 15: Rental Revenue Quarterly Comparison (2023 – 2024)
Rental Revenue Quarterly Comparison (2023 – 2024) Mobile Modular(a) Portable Storage TRS-RenTelco +9% $100 $100 $100 76.5 78.0 81.5 74.8 $80 $80 64.1 70.8 $80 -10% $60 $60 -11% $60 $40 $40 $40 29.1 28.6 28.7 25.7 27.9 17.1 18.4 18.5 17.8 19.2 17.0 25.4 25.3 $20 $20 $20 $0 $0 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 16: Adjusted EBITDA Quarterly Comparison (2023 – 2024)
Adjusted EBITDA (a) Quarterly Comparison (2023 – 2024) Mobile Modular(a) Portable Storage TRS-RenTelco +23% $80 71.4 $80 $80 58.2 $60 53.4 $60 $60 -10% 43.3 44.5 -10% $40 32.4 $40 $40 20.6 18.5 21.5 21.0 18.9 $20 $20 10.0 11.5 12.3 11.0 12.0 10.8 $20 18.0 $0 $0 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 17: 2024 Financial Outlook
2024 Financial Outlook 2023 2024 Outlook (as of 10/24/24) Total Revenues $832M $910M to $920M Adjusted EBITDA (a) $322M $345M to $351M Gross Rental Equipment Capital $230M $180M to $190M Expenditures (a) Adjusted EBITDA defined on page 14 1 Lower capex at TRS and Portable Storage to align with softe
Slide 18: Rental Segment Highlights
Rental Segment Highlights PAGE 18
Slide 19: Mobile Modular
Mobile Modular ae McGRATH mobile KITCHENS TO GO" modular ¥ ‘tymobemedlar
Slide 20: Rental Assets
Rental Assets mobile modular ¥ 2's McGRATH PAGE 20
Slide 21: Modular Segment Total Revenues Q3 2024
Modular Segment Total Revenues Q3 2024 Mobile Modulars (a) Total Revenues $191M 1% 34% 65% (b) Rental Operations Sales Other (a) Mobile Modular includes Kitchens To Go and excludes Enviroplex (b) Other Revenue includes allocated revenues from Corporate for tenant income PAGE 21
Slide 22: Mobile Modular Operating Results
Mobile Modular Operating Results (a)(b) Total Revenues Rental Gross Profit Adjusted EBITDA $200 191 $60 $80 169 51 71 37% of total %s of total 44 62% 58 revenue $150 35% of rental $60 35% revenue $40 59% revenue 34% $100 22% $40 20% $20 $50 $20 44% 43% $0 $0 $0 Q3-23 Q3-24 Q3-23 Q3-24 Q3-23 Q3-24 Re
Slide 23: Rental Operations Revenue Customer Mix
Rental Operations Revenue Customer Mix (a) Q3-24 Customer Mix Education Mix Commercial Mix Higher Education, 2% Other, 6% Daycare/Other, 2% Entertainment & Retail, 1% Recreation, 2% Health Care, 2% Education, 35% Private K-12/ Government, 3% Charter, 7% Transportation, 3% General Business, 4% Reside
Slide 24: Mobile Modular Highlights
Mobile Modular Highlights (a)(b) Rental Revenue Period End Rental Equipment (Original Cost) Average Utilization $100 $1,600 100.0% 81.5 $1,400 76.5 78.0 1,222 1,259 79.4% 78.7% 79.3% 78.4% 79.9% $80 74.8 1,189 80.0% 77.1% 70.8 $1,200 1,130 1,145 1,106 64.1 $60 $1,000 60.0% $800 $40 $600 40.0% $400 $
Slide 25: Mobile Modular Highlights
Mobile Modular Highlights (a) Adjusted EBITDA(b) Adjusted EBITDA(b) % of Total Revenue Average Rental Rate(c) $80 40% 37% 37% 3.00% 2.76% 2.76% 2.84% 71.4 2.72% 2.66% 2.74% 34% 34% 32% 31% 58.2 $60 53.4 30% 2.00% 43.3 44.5 $40 20% 32.4 1.00% $20 10% $0 0% 0.00% Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 2023 2024 (
Slide 26: 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 27: Mobile Modular Pricing Highlights
Mobile Modular Pricing Highlights (a)(b) Total fleet units on rent New Shipments Monthly revenue per unit Last Twelve Months Monthly revenue per unit $1,400 +16% $1,400 $1,200 $1,191 $1,200 +18% $1,027 $1,000 $1,000 $820 $800 $695 $800 $600 $600 $400 $400 $200 $200 $0 $0 Q3-23 Q3-24 LTM Q3-23 LTM Q3
Slide 28: Mobile Modular Initiatives
Mobile Modular Initiatives Mobile Modular Plus(a)(c) Site Related Services(b)(c) $30 $30 $25 $25 22.6 21.8 20.0 $20 18.3 $20 $15 13.7 $15 11.0 $10 $10 $5 $5 $0 $0 2022 2023 2024 2022 2023 2024 YTD September Rental Related Services Revenue YTD September Rental Revenue (dollars in millions) (a) Mobile
Slide 29: Mobile Modular Sales
Mobile Modular Sales (a)(b) Total Sales Revenues New Sales Revenue $200 $200 $150 $150 127 113 23% $100 25% $100 98 85 $50 $50 75% 77% $0 $0 YTD September 2023 YTD September 2024 YTD September 2023 YTD September 2024 New Sales Used Sales (dollars in millions) (a) Sales revenues exclude Enviroplex (b
Slide 30: Portable Storage
Portable Storage ae McGRATH mobile p modular ¥ Portable PAGE 30
Slide 31: Portable Storage Total Revenues Q3 2024
Portable Storage Total Revenues Q3 2024 Portable Storage Total Revenues $23M 1% 6% 93% (1) Rental Operations Sales Other (1) Other Revenue includes allocated revenues from Corporate for tenant income PAGE 31
Slide 32: Portable Storage Operating Results
Portable Storage Operating Results Total Revenues Rental Gross Profit Adjusted EBITDA(a) $30 $20 -9% $20 26 7% 23 16 15 7% 84% 20% of rental $20 19% 86% revenue 12 11 %s of total 46% 73% 74% revenue $10 $10 47% of total revenue $10 $0 $0 $0 Q3-23 Q3-24 Q3-23 Q3-24 Q3-23 Q3-24 Rents RRS Sales & Other
Slide 33: Portable Storage Highlights
Portable Storage Highlights (a) Rental Revenue Period End Rental Equipment (Original Cost) Average Utilization $25 $250 230 100.0% 225 228 216 208 19.2 200 80.8% 78.2% $20 18.4 18.5 $200 80.0% 76.5% 17.8 17.0 17.1 69.8% 66.1% 62.8% $15 $150 60.0% $10 $100 40.0% $5 $50 20.0% $0 $0 0.0% Q1 Q2 Q3 Q1 Q2
Slide 34: Portable Storage Highlights
Portable Storage Highlights Adjusted EBITDA(a) Adjusted EBITDA(a) % of Total Revenue Average Rental Rate(b) $15 50% 48% 5.00% 47% 46% 46% 47% 44% 12.3 12.0 11.5 3.94% 3.96% 3.94% 3.94% 11.0 10.8 40% 4.00% 3.71% 3.85% 10.0 $10 30% 3.00% 20% 2.00% $5 10% 1.00% $0 0% 0.00% Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 20
Slide 35: TRS-RenTelco
TRS-RenTelco ae McGRATH
Slide 36: Rental Assets
Rental Assets Rental and Sales of General Purpose and Communications Test Equipment PAGE 36
Slide 37: TRS-RenTelco Operating Results
TRS-RenTelco Operating Results Total Revenues Rental Gross Profit Adjusted EBITDA(a) $30 $50 $20 39 $40 21 35 $15 $20 54% 19 25% 11 $30 24% 54% of total of total 40% 9 revenue 73% revenue $10 74% $20 37% of rental revenue $10 $5 $10 $0 $0 $0 Q3-23 Q3-24 Q3-23 Q3-24 Q3-23 Q3-24 Rents RRS Sales & Othe
Slide 38: TRS-RenTelco Highlights
TRS-RenTelco Highlights (a) Rental Revenue Period End Rental Equipment (Original Cost) Average Utilization $40 $500 100.0% 398 387 384 29.1 28.6 28.7 $400 369 367 80.0% $30 354 25.4 25.3 25.7 59.2% 58.2% 59.4% $300 60.0% 56.5% 56.5% 57.3% $20 $200 40.0% $10 $100 20.0% $0 $0 0.0% Q1 Q2 Q3 Q1 Q2 Q3 Q1
Slide 39: TRS-RenTelco Highlights
TRS-RenTelco Highlights Adjusted EBITDA(a) Adjusted EBITDA(a) % of Total Revenue Average Rental Rate(b) $30 70% 5.00% 57% 57% 55% 4.14% 4.16% 4.07% 4.17% 4.12% 60% 55% 4.03% 54% 54% 4.00% 21.5 21.0 20.6 18.9 50% $20 18.5 18.0 3.00% 40% 30% 2.00% $10 20% 1.00% 10% $0 0% 0.00% Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2
Slide 40: TRS-RenTelco Growth Opportunities
TRS-RenTelco Growth Opportunities A market leader in North America 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 technol
Slide 41: Thank you for your interest and investment in MGRC
Company Summary McGrath (Nasdaq: MGRC) Established rental businesses with solid positions Strategic growth focus on Mobile Modular and Portable Storage Disciplined capital spending on new rental equipment and acquisitions Strong cash flow and resilient business model Dividend increases for 33 consec
Slide 42: Appendix
Appendix i: McGRATH
Slide 43: Definitions - Rental Fleet Metrics
Definitions - Rental Fleet Metrics Period End Utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment excluding new equipment inventory and accessory equipment. Average utilization for the period is calculated using the average costs of the re