Financial Data and Key Metrics Changes - Total revenues decreased by 4% to $256 million, with rental operations increasing by 4% and sales revenues decreasing by 18% [13] - Adjusted EBITDA decreased by 7% to $96.5 million, while net income decreased by 8% to $42.3 million [13][14] - Diluted earnings per share decreased by $0.15 to $1.72 [13] Business Line Data and Key Metrics Changes - Mobile Modular total revenues decreased by 5% to $181.5 million, with rental revenues up by 2% and rental-related services revenues up by 5%, offset by a 21% decrease in sales revenues [13][14] - Portable Storage rental revenues increased by 1% year over year to $17.3 million, marking the first year-over-year growth since Q1 of the previous year [15] - TRS RenTelco total revenues increased by 6% to $36.9 million, driven by a 9% increase in rental revenues [16] Market Data and Key Metrics Changes - Utilization rates for Mobile Modular decreased to 72.6% from 77.1% a year earlier, while Portable Storage utilization was at 61.4% compared to 62.8% a year ago [14][15] - Average monthly revenue per unit on rent increased by 6% year over year to $865 [14] Company Strategy and Development Direction - The company is focused on expanding its modular and portable storage businesses, entering new regions, and increasing coverage through acquisitions [11] - The strategy includes becoming a national modular solutions provider capable of serving diverse customer needs [11] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing market uncertainties but expressed optimism due to increased booked orders and stable pricing [5][10] - The company has upwardly revised its full-year financial outlook, expecting total revenue between $935 million and $955 million [20] Other Important Information - The company is managing the impact of tariffs effectively, with minimal effects on results [10] - Cash flow highlights include net cash provided by operating activities of $175 million and a decrease in rental equipment purchases to $92 million [19] Q&A Session Summary Question: Can you address the lumpiness of sales activity? - Management confirmed that sales backlog is strong and projects that did not close in Q3 will move into Q4, maintaining a positive sales outlook [23][24] Question: Is the business on an upward trajectory? - Management anticipates continued growth, emphasizing the importance of being positioned to meet customer needs [25][26] Question: How is the education sector performing? - Management reported solid funding for education projects, with significant bonds passed in California and Texas, indicating a positive outlook for the education business [29][30] Question: What is the rate environment like? - Rates are holding steady, with efforts to maintain rental rates despite some transportation cost concessions [31][32] Question: How is visibility for TRS heading into next year? - Management noted strong bookings and rental order volume, indicating positive momentum heading into Q4 [38][39] Question: Can you elaborate on technology investments? - Management highlighted ongoing technology investments to keep systems relevant and customer-friendly [44][45] Question: What is the cash usage prioritization for next year? - Management indicated a strong free cash flow position, allowing for flexibility in acquisitions and capital expenditures [70][72] Question: How are the recent acquisitions progressing? - The two small acquisitions are integrated and contributing positively, with no red flags noted [63][65]

Financial Data and Key Metrics Changes - Total revenues decreased by 4% to $256 million, with rental operations increasing by 4% and sales revenues decreasing by 18% during the quarter [10] - Adjusted EBITDA decreased by 7% to $96.5 million, and net income decreased by 8% to $42.3 million, with diluted earnings per share decreasing by $0.15 to $1.72 [10][14] - Average fleet utilization decreased to 72.6% from 77.1% a year earlier, while monthly revenue per unit on rent increased by 6% year over year to $865 [11] Business Line Data and Key Metrics Changes - Mobile Modular total revenues decreased by 5% to $181.5 million, with rental revenues increasing by 2% and rental-related services revenues increasing by 5%, offset by a 21% decrease in sales revenues [10][12] - Portable Storage rental revenues increased by 1% to $17.3 million, marking the first year-over-year growth since the first quarter of the previous year [12] - TRS-RenTelco total revenues increased by 6% to $36.9 million, driven by a 9% increase in rental revenues and improved rental margins to 43% from 37% a year ago [13] Market Data and Key Metrics Changes - The market for portable storage is showing signs of stabilization despite soft commercial construction project activity, with average utilization for the quarter at 61.4% [12] - Non-residential construction indicators, such as the Architectural Billing Index (ABI), remain soft, indicating ongoing challenges in the market [7] Company Strategy and Development Direction - The company is focused on expanding its modular and portable storage businesses, entering new regions, and increasing coverage through tuck-in acquisitions [8] - The strategy includes enhancing modular services offerings, with Mobile Modular Plus revenues increasing to $9.7 million from $7.9 million a year earlier [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sales outlook for the year, citing a strong sales backlog and healthy quote volumes [19][46] - The company has upwardly revised its full-year financial outlook, expecting total revenue between $935 and $955 million and adjusted EBITDA between $350 and $357 million [16] Other Important Information - The company is managing the impact of tariffs effectively, with minimal effects on results [6] - Cash flow highlights include net cash provided by operating activities of $175 million and a decrease in rental equipment purchases to $92 million from $167 million last year [14] Q&A Session Summary Question: Can you address the lumpiness of the sales activity and the run rate in the business? - Management confirmed that sales activity is expected to be more balanced this year, with a strong sales backlog and no project cancellations [19] Question: Is the business on an upward trajectory? - Management anticipates continued growth, emphasizing the importance of being well-positioned to meet customer needs [20] Question: How is funding in the education sector? - Management reported solid funding for education, with significant facilities bonds passed in California and Texas, indicating a positive outlook for the education business [23] Question: Can you speak to the rate environment across both modular and portable storage? - Rates are holding steady, with efforts to maintain rental rates despite some transportation cost adjustments [24] Question: How is visibility in TRS-RenTelco for the next year? - Management noted strong bookings and rental order volume, indicating positive momentum heading into the next year [29] Question: What is the cash usage prioritization for next year? - Management highlighted a strong free cash flow position, reduced debt, and active acquisition pipeline, with a focus on quality businesses [63] Question: What are the technology investments being made? - Investments are aimed at updating systems and enhancing customer-facing capabilities, with a long-term focus [40][68]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Company Overview - McGrath RentCorp's total revenue for 2024 was $911 million [9] - Adjusted EBITDA for 2024 was $352 million [9] - The company has a shareholder return CAGR of 16% based on 1984 IPO through 12/31/24 [9] - 99% of total revenues are from North America [9] Business Segment Performance (2024) - Mobile Modular accounted for 67% of total revenues and 75% of total Adjusted EBITDA [11] - Portable Storage accounted for 12% of total revenues and 10% of total Adjusted EBITDA [11] - TRS-RenTelco accounted for 21% of total revenues and 15% of total Adjusted EBITDA [11] Q3 2025 Highlights - Total revenues decreased by 4% to $256.4 million [31] - Adjusted EBITDA decreased by 7% to $96.4 million [31] - Rental Operations revenues increased 4% to $178.1 million [31] - TRS-RenTelco rental revenues increased 9% [30] 2025 Financial Outlook - Total Revenues are projected to be between $935 million and $955 million [47] - Adjusted EBITDA is projected to be between $350 million and $357 million [47] - Gross Rental Equipment Capital Expenditures are projected to be between $120 million and $125 million [47]

Financial Performance - Consolidated revenues for the three months ended September 30, 2025, decreased 4% to $256.4 million, down from $266.8 million in the same period in 2024[77]. - Consolidated net income for the three months ended September 30, 2025, decreased 72% to $42.3 million, compared to $149.3 million for the same period in 2024[77]. - Earnings per diluted share for the three months ended September 30, 2025, decreased by $4.36 to $1.72, compared to $6.08 for the same period in 2024[77]. - For the nine months ended September 30, 2025, consolidated revenues increased by 3% to $687.5 million from $667.2 million in 2024[101]. - Consolidated net income for the nine months ended September 30, 2025, decreased by 45% to $106.5 million, primarily due to the terminated Merger Agreement[101]. Revenue Breakdown - Mobile Modular's total revenues decreased $9.9 million, or 5%, to $181.5 million for the three months ended September 30, 2025, primarily due to lower sales revenues[79]. - Total revenues for Mobile Modular decreased by $9.9 million, or 5%, to $181.5 million for the three months ended September 30, 2025, compared to $191.4 million in 2024[81]. - Rental revenues increased by $1.7 million, or 2%, to $83.2 million, while sales revenues decreased by $13.7 million, or 21%, to $52.3 million[85]. - Portable Storage's total revenues increased by $1.4 million, or 6%, to $24.4 million, driven by higher rental and sales revenues[86]. - TRS-RenTelco's total revenues increased by $2.1 million, or 6%, to $36.9 million, primarily due to higher rental revenues[93]. - For the nine months ended September 30, 2025, total revenues increased by $5.8 million, or 1%, to $469.4 million compared to the same period in 2024[105]. - For the nine months ended September 30, 2025, TRS-RenTelco's total revenues increased by $7.1 million, or 7%, to $108.3 million compared to the same period in 2024[115]. Profitability Metrics - Gross profit decreased $4.7 million, or 4%, to $119.3 million in 2025, with Mobile Modular's gross profit decreasing $6.7 million, or 7%[78]. - Gross profit decreased by $6.7 million, or 7%, to $83.1 million, with gross margin percentages for rental revenues dropping to 58% in 2025 from 62% in 2024[84]. - Adjusted EBITDA decreased $7.5 million, or 7%, to $96.5 million in 2025[78]. - Adjusted EBITDA decreased by $6.8 million, or 10%, to $64.6 million for the three months ended September 30, 2025[81]. - Gross profit for the nine months ended September 30, 2025, decreased by $1.1 million, or 1%, to $221.8 million[107]. - Gross profit for the nine months ended September 30, 2025, increased by $7.2 million, or 17%, to $48.1 million[119]. Expenses - Selling and administrative expenses increased $3.2 million to $52.5 million, primarily due to higher marketing and administrative expenses[78]. - Selling and administrative expenses for the nine months ended September 30, 2025, increased by $8.2 million to $157.0 million, mainly due to higher employee costs[102]. - Selling and administrative expenses increased by $5.3 million, or 5%, to $106.2 million, primarily due to higher corporate expenses and employee costs[107]. - Portable Storage's gross profit decreased by $5.2 million, or 11%, to $43.8 million for the nine months ended September 30, 2025[113]. Cash Flow and Financing - For the three months ended September 30, 2025, net cash provided by operating activities was $65.1 million, a decrease from $199.0 million in the same period of 2024, representing a decline of approximately 67.3%[129]. - Cash flows from operating activities for the nine months ended September 30, 2025, were $174.8 million, down $162.8 million from $337.6 million in 2024, primarily due to a gain on merger termination in 2024[131]. - Net cash used in investing activities was $88.1 million in 2025, a decrease of $52.8 million from $140.8 million in 2024, mainly due to $75.8 million lower rental equipment purchases[132]. - Net cash used in financing activities was $80.3 million in 2025, down from $193.6 million in 2024, reflecting a $113.3 million change primarily due to lower net payments under bank lines of credit[133]. Debt and Compliance - As of September 30, 2025, the Company had a Consolidated Fixed Charge Coverage Ratio of 3.69 to 1, exceeding the required minimum of 2.50 to 1[139]. - The Consolidated Leverage Ratio at September 30, 2025, was 1.58 to 1, well below the maximum threshold of 2.75 to 1[139]. - The Company issued $75.0 million of 5.30% Series G Senior Notes on September 8, 2025, to pay down its term loan "A" facility in full[143]. - The Company anticipates no trends indicating non-compliance with financial covenants, although significant deterioration in financial performance could impact compliance[140]. - As of September 30, 2025, the Company was in compliance with all financial covenants outlined in the Note Purchase Agreement[151]. Market and Risk Factors - There have been no material changes in the Company's market risk exposures since the 2024 Annual Report[155]. - Contractual obligations and commitments have not changed materially from those included in the 2024 Annual Report[153]. - There were no material changes in critical accounting estimates during the nine-month period ended September 30, 2025[154].

Financial Performance - Total revenues for Q3 2025 were $256.4 million, a decrease of 4% compared to Q3 2024[1] - Net income for Q3 2025 was $42.3 million, or $1.72 per diluted share, down from $149.3 million, or $6.08 per diluted share in Q3 2024[1] - Total revenues for the three months ended September 30, 2025, were $256,443,000, a decrease of 3.9% compared to $266,758,000 in the same period of 2024[23] - Net income for the three months ended September 30, 2025, was $42,297,000, down 71.7% from $149,317,000 in the same period of 2024[23] - Basic earnings per share for the three months ended September 30, 2025, were $1.72, compared to $6.08 in 2024, indicating a decline of 71.7%[23] - Total revenues for the nine months ended September 30, 2025, reached $687,475,000, an increase from $667,196,000 in the same period of 2024, representing a growth of approximately 3.9%[36] - Net income for the nine months ended September 30, 2025, was $106,479,000, compared to $192,778,000 in the same period of 2024, indicating a decrease of about 44.8%[36] Revenue Breakdown - Rental operations revenues increased 4% to $178.1 million, while sales revenues decreased 18% to $76.1 million[6] - Modular rental revenues grew 2%, and Portable Storage rental revenues increased 1%, marking its first year-over-year growth since Q1 2024[4][5] - TRS-RenTelco reported a 9% increase in rental revenues compared to last year[5] Adjusted EBITDA - Adjusted EBITDA decreased 7% to $96.5 million for Q3 2025[6] - Adjusted EBITDA for Q3 2025 was $96.526 million, up from $103.983 million in Q3 2024, indicating a decline of 7.1%[28][32] - Adjusted EBITDA for the nine months ended September 30, 2025, was $257,567,000, slightly down from $259,723,000 in the same period of 2024, reflecting a decrease of approximately 0.8%[36] - Adjusted EBITDA margin for the twelve months ended September 30, 2025, was 39%, consistent with the previous year, demonstrating effective cost management[47] Cash Flow and Expenses - Cash balance at the end of the period was $7,256,000, significantly up from $807,000 at the beginning of the period[25] - The company reported a net cash provided by operating activities of $174,765,000 for the nine months ended September 30, 2025, down from $337,596,000 in 2024[27] - Net cash provided by operating activities for the three months ended September 30, 2025, was $65,071,000, compared to $198,967,000 in 2024, showing a decline in cash flow[49] - Interest expense for the three months ended September 30, 2025, was $8,177,000, down from $12,641,000 in the same period of 2024[23] - Interest expense for the nine months ended September 30, 2025, totaled $24,130,000, an increase from $12,642,000 in 2024, indicating rising borrowing costs[47] Capital Expenditures and Outlook - The company updated its full-year 2025 revenue outlook to $935 to $955 million, from a previous range of $925 to $960 million[13] - The company expects Adjusted EBITDA for the full year 2025 to be between $350 to $357 million[13] - Gross rental equipment capital expenditures are projected to be $120 to $125 million for the full year 2025[13] Operational Metrics - Average rental equipment cost increased to $1.328 billion in Q3 2025 from $1.241 billion in Q3 2024, representing a 7% increase[28][32] - Average monthly total yield for Q3 2025 was 2.09%, down from 2.19% in Q3 2024, indicating a decrease in rental revenue efficiency[28][32] - Average utilization rate for Q3 2025 was 72.6%, compared to 77.1% in Q3 2024, showing a decline in equipment usage[28][32] - Total direct costs of rental operations for Q3 2025 were $89.598 million, an increase from $81.672 million in Q3 2024, reflecting rising operational costs[28][32] - Selling and administrative expenses for Q3 2025 totaled $52.540 million, compared to $49.296 million in Q3 2024, indicating a rise in administrative costs[28][32] Foreign Currency and Other Gains - The company reported a foreign currency exchange loss of $32, contrasting with a gain of $216 in Q3 2024, highlighting increased currency volatility impacts[28][32] - The company reported a gain on merger termination from WillScot Mobile Mini of $(180,000,000), which was excluded from Adjusted EBITDA as a non-operating transaction[47] - The company experienced a gain on the sale of used rental equipment amounting to $30,188,000 for the nine months ended September 30, 2025, compared to $25,185,000 in 2024, reflecting improved asset management[49] Tax and Compensation - The provision for income taxes for the three months ended September 30, 2025, was $16,211,000, down from $53,502,000 in 2024, suggesting a favorable tax environment[47] - Share-based compensation for the nine months ended September 30, 2025, was $8,088,000, compared to $6,949,000 in 2024, indicating an increase in employee compensation costs[47]

Core Points - McGrath RentCorp announced a quarterly cash dividend of $0.485 per common share for the quarter ended September 30, 2025 [1] - The dividend will be payable on October 31, 2025, to shareholders of record on October 17, 2025 [1] - The year 2025 marks the 34th consecutive year that McGrath RentCorp has raised its dividend [1]

Core Insights - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2] - The Zacks Momentum Style Score helps identify stocks with strong momentum, and McGrath (MGRC) currently holds a Momentum Style Score of B, indicating potential for growth [3][4] Price Performance - MGRC shares have increased by 3.45% over the past week, outperforming the Zacks Financial - Leasing Companies industry, which rose by 1.7% during the same period [6] - Over the past month, MGRC's price change is 5.39%, while the industry average is 7.53% [6] - In the last quarter, MGRC shares rose by 10.36%, and over the past year, they increased by 21.04%, compared to the S&P 500's gains of 9.68% and 20% respectively [7] Trading Volume - MGRC's average 20-day trading volume is 111,467 shares, which serves as a baseline for price-to-volume analysis; a rising stock with above-average volume is generally seen as bullish [8] Earnings Outlook - Recent earnings estimate revisions for MGRC show positive momentum, with two estimates moving higher and none lower in the past two months, raising the consensus estimate from $6.19 to $6.25 [10] - For the next fiscal year, one estimate has increased while there have been no downward revisions [10] Conclusion - Given the positive price performance, trading volume, and earnings outlook, MGRC is rated as a 2 (Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [12]

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