Core Viewpoint - McGrath (MGRC) reported quarterly earnings of $1.58 per share, exceeding the Zacks Consensus Estimate of $1.49 per share, and showing an increase from $1.30 per share a year ago, indicating a positive earnings surprise of 6.04% [1] Group 1: Earnings Performance - The company has surpassed consensus EPS estimates three times over the last four quarters [2] - McGrath's revenues for the quarter ended December 2024 were $243.75 million, which missed the Zacks Consensus Estimate by 1.27%, but increased from $221.59 million year-over-year [2] - The company had a significant earnings surprise of 34.53% in the previous quarter, where it reported earnings of $1.87 per share against an expected $1.39 per share [1] Group 2: Stock Performance and Outlook - McGrath shares have increased approximately 9.3% since the beginning of the year, outperforming the S&P 500's gain of 4.2% [3] - The future performance of the stock will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.99 on revenues of $188.31 million, and for the current fiscal year, it is $6.40 on revenues of $918.57 million [7] Group 3: Industry Context - The Financial - Leasing Companies industry, to which McGrath belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact McGrath's stock performance [5]

Debt and Interest Rates - The majority of the company's indebtedness is subject to variable interest rates, with a $415.4 million balance of variable rate debt outstanding as of December 31, 2024, leading to an annual debt service obligation increase of approximately $4.2 million for each 1% rise in interest rates [122]. - The company is subject to various financial covenants under its credit agreements, which could limit its ability to obtain future financing or make strategic acquisitions [120]. Market Demand and Competition - Significant reductions or delays in funding to public schools have caused a decline in demand and pricing for modular classroom units, which may negatively impact revenues and profitability [123]. - California is the largest market for classroom rentals, heavily reliant on public funding from state and local facility bond measures; failure to pass these measures could materially affect revenues and operating income [124]. - The company faces strong competition in the modular building and portable storage markets, which may prevent it from raising rental fees or sales prices to offset increased costs [139]. - Competition in the rental equipment market is intense, with competitors potentially offering lower prices and better service [151]. Operational Challenges - As of December 31, 2024, 63% of the modular portfolio and 57% of the container portfolio had equipment on rent for periods exceeding the original committed term, indicating potential challenges in remarketing returned units [141]. - Significant increases in raw material and labor costs could raise acquisition costs for new modular rental units and repair costs, negatively impacting profitability [142]. - The company relies on third-party manufacturers for its products, with 18% of modular products purchased from a single manufacturer in 2024, indicating potential risks if this supplier is lost [143]. - Warranty costs may increase, and warranty claims could negatively impact revenues and operating income, with a historical trend of low warranty costs [145]. - The electronic test equipment business is subject to cyclical downturns, which may lead to low demand, excess inventory, and impairment charges [146]. - The company faces risks of equipment becoming obsolete due to changing technology, potentially leading to impairment charges [148]. - The company relies on favorable purchasing terms from manufacturers for rental equipment; unfavorable terms could adversely affect operations [152]. Seasonal Trends - The company's business is impacted by seasonal demand, with the highest rental and sales revenues typically occurring in the second and third quarters [138]. - Seasonal declines in rental activity are expected in December and the first two months of the year, impacting quarterly results [147]. International Operations and Currency Risks - Less than 10% of the company's revenues currently come from foreign operations, but there is potential for growth in international markets [154]. - The company is exposed to currency exchange rate fluctuations, which could negatively impact financial results when converting foreign revenues to U.S. dollars [155]. - The Company formed a wholly owned Canadian subsidiary, TRS-RenTelco Inc., in 2004 and a wholly owned Indian subsidiary, TRS-RenTelco India Private Limited, in 2013 [296]. - The Company began closing its Indian operations in 2017, which subjects it to foreign currency risks due to Canadian operations [296]. - In 2024, the Company experienced minimal impact on net income from foreign exchange rate fluctuations [297]. - The Company does not expect future foreign exchange gains and losses to be significant given the size of its Canadian operations [297]. Regulatory and Tax Considerations - Public policies affecting funding for educational products may change, leading to decreased demand and pricing for the company's offerings [126]. - Changes in tax laws and accounting standards may affect the company's effective tax rate and reported financial results, making future earnings less predictable [157][158]. Product Lifespan - The estimated useful life of the modular product is 18 years with a residual value of 50%, while containers have a useful life of 25 years with a residual value of 62.5% [144].

Financial Performance - Total revenues from continuing operations for Q4 2024 were $243.7 million, a 10% increase compared to Q4 2023[1] - Net income from continuing operations for Q4 2024 was $38.9 million, or $1.58 per diluted share, up from $32.0 million, or $1.30 per diluted share in Q4 2023[1] - For the full year 2024, total revenues increased to $910.9 million, a 10% rise from $831.8 million in 2023[2] - Adjusted EBITDA for the full year 2024 was $351.7 million, reflecting a $33.4 million increase, or 10%[2] - Total revenues for the twelve months ended December 31, 2024, increased to $910,942,000, up 9.5% from $831,842,000 in 2023[22] - Gross profit for the twelve months ended December 31, 2024, was $435,415,000, representing a 10.6% increase compared to $393,633,000 in 2023[22] - Net income for the twelve months ended December 31, 2024, rose to $231,727,000, a 32.7% increase from $174,621,000 in 2023[22] - Earnings per share from continuing operations for the twelve months ended December 31, 2024, was $9.44, compared to $4.57 in 2023, reflecting a 106.4% increase[22] - Total revenues for Q4 2024 reached $243.746 million, a 9.9% increase from $221.706 million in Q4 2023[30] - Adjusted EBITDA for Q4 2024 was $92.002 million, compared to $87.869 million in Q4 2023, indicating a 4.8% increase[30] - Total gross profit for Q4 2024 was $114.757 million, up from $110.122 million in Q4 2023, representing a growth of 4.8%[30] Cash Flow and Dividends - Cash flows from operating activities for the twelve months ended December 31, 2024, amounted to $374,375,000, significantly up from $95,343,000 in 2023[26] - The Company declared a cash dividend of $0.485 per share for Q1 2025, a 2% increase from the prior year[3] - Cash dividends declared per share increased to $1.90 for the twelve months ended December 31, 2024, compared to $1.86 in 2023[22] - Net cash provided by operating activities for Q4 2024 was $36,779,000, a significant recovery from a cash used of $(23,560,000) in Q4 2023[45] Assets and Liabilities - Total assets as of December 31, 2024, were $2,277,584,000, an increase from $2,217,283,000 in 2023[24] - Total liabilities decreased to $1,154,216,000 as of December 31, 2024, down from $1,283,481,000 in 2023[24] Operational Metrics - Average utilization rate improved to 76.0% in Q4 2024, compared to 79.7% in Q4 2023[30] - Rental revenues increased to $124.220 million in Q4 2024, up from $123.563 million in Q4 2023, reflecting a growth of 0.5%[30] - Average monthly total yield for Q4 2024 was 2.15%, slightly down from 2.19% in Q4 2023[30] - The average monthly total yield for rental operations was 2.34% in 2024, slightly down from 2.43% in 2023[33][36] - Average utilization rates for rental equipment were 77.5% in 2024, compared to 79.7% in 2023, showing a decline of 2.2 percentage points[33][36] Expenses and Costs - Selling and administrative expenses for Q4 2024 totaled $51.669 million, compared to $54.506 million in Q4 2023, a decrease of 5.4%[30] - Interest expense for Q4 2024 was $8.858 million, compared to $12.126 million in Q4 2023, reflecting a reduction of 26.5%[30] - The company incurred interest expenses of $47,241,000 in 2024, compared to $40,560,000 in 2023, marking an increase of about 16.6%[33][36] - The company incurred transaction costs of $2,002,000 in Q4 2024, up from $1,575,000 in Q4 2023[42] Future Outlook - For full-year 2025, the Company expects total revenue between $920 million and $970 million[15] - The Company anticipates Adjusted EBITDA for 2025 to be between $345 million and $360 million[15] - The company plans to continue expanding its rental operations and investing in new rental equipment to support growth[22] Other Notable Items - The company reported a gain on merger termination of $116,841,000, contributing positively to operating activities[26] - The company reported a foreign currency exchange loss of $270,000 in Q4 2024, compared to a gain of $144,000 in Q4 2023[30] - The gain on sale of used rental equipment was $9,900,000 in Q4 2024, compared to $8,678,000 in Q4 2023, showing an increase of 14.1%[45]

Core Viewpoint - McGrath (MGRC) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - For McGrath, the rising earnings estimates and the rating upgrade suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][11]. Earnings Estimate Revisions - McGrath is projected to earn $5.50 per share for the fiscal year ending December 2024, reflecting a year-over-year increase of 20.6% [8]. - Over the past three months, the Zacks Consensus Estimate for McGrath has risen by 10.8%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, highlighting their superior earnings estimate revision characteristics [9][10].

% McGRATH OCTOBER 24, 2024 Q3 2024 Quarterly Investor Presentation 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 targets are forward-looking statements. These forward-looking statements also can be identified by use of forward-looking terminology such as "antic ...

Financial Data and Key Metrics Changes - Total revenues from continuing operations increased 10% to $267 million and adjusted EBITDA increased 13% to $104 million for Q3 2024 [17] - The company received a $180 million payment from WillScot Mobile Mini due to the termination of the merger agreement, resulting in a net income contribution of $104 million or $4.21 per diluted share [17][18] - Year-to-date net cash provided by operating activities was $338 million compared to $119 million in the prior year, primarily due to the $180 million payment received [22] Business Line Data and Key Metrics Changes - Mobile Modular rental revenues grew 9% and sales revenues grew 14%, with adjusted EBITDA increasing 23% to $71.4 million [18] - Portable Storage rental revenues declined by 11% to $17 million, with adjusted EBITDA decreasing by 10% to $10.8 million [20] - TRS-RenTelco rental revenues decreased by 10% to $34.8 million, with adjusted EBITDA also down 10% to $18.9 million [20] Market Data and Key Metrics Changes - Utilization for Mobile Modular ended the quarter at 76.5%, while Portable Storage utilization was 62.8% [7][20] - Average rental equipment on rent decreased by 12% in Portable Storage, reflecting weaker demand conditions [20] - The overall demand environment for Portable Storage and TRS businesses is expected to remain soft into 2025 [11] Company Strategy and Development Direction - The company aims to continue growing its modular business both organically and through strategic acquisitions, with a focus on expanding geographic coverage [12][14] - Management emphasized the importance of maintaining pricing discipline and robust processes to support revenue growth [12] - The company is committed to building long-term shareholder value through disciplined capital allocation and consistent execution [25] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about potential demand improvements as interest rates are projected to ease [11] - The company is positioned to provide space and storage solutions in the aftermath of recent hurricanes, although new business opportunities may be limited in the short term [10] - Management acknowledged the uncertainty in the overall demand environment but remains positive about long-term growth prospects [12][14] Other Important Information - The company incurred $39 million in transaction costs related to the terminated merger agreement, which were excluded from selling and administrative expenses [22] - The total fleet value based on original cost of equipment was $357 million at the end of September, down $11 million from the second quarter [21] Q&A Session Summary Question: Performance of Mobile Modular in commercial and education markets - Management indicated that education rentals were up 10% and commercial rentals were up 8%, showing balanced performance [28] Question: Pricing versus volume dynamics - Management noted strong pricing dynamics and anticipated that this would continue into next year, with a healthy pricing environment [30][31] Question: Quoting activity and deliveries in Portable Storage - Management reported a decline in quoting opportunities and bookings in Portable Storage, expecting fourth-quarter performance to be lower than the third quarter [34] Question: Impact of semiconductor and 5G on TRS - Management highlighted ongoing weakness in the semiconductor market and a slowdown in wireless services, while wired communications remained strong [38] Question: Application of the $180 million cash inflow - Management stated that the funds would provide flexibility for capital allocation, including organic investments, M&A opportunities, and debt reduction [40][42]

McGrath (MGRC) came out with quarterly earnings of $1.87 per share, beating the Zacks Consensus Estimate of $1.39 per share. This compares to earnings of $1.65 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 34.53%. A quarter ago, it was expected that this business-to-business rental company would post earnings of $1.25 per share when it actually produced earnings of $1.20, delivering a surprise of -4%.Over the last four quart ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITY AND EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITY AND EXCHANGE ACT OF 1934 Commission file number 000-13292 McGRATH RENTCORP (Exact name of registrant as specified in its Charter) California 94-2579843 (State or other jurisdiction of incorporation or organization) (I.R. ...

[Executive Summary / Q3 2024 Highlights](index=1&type=section&id=Executive%20Summary%20%2F%20Q3%202024%20Highlights) [Overall Company Performance](index=1&type=section&id=Overall%20Company%20Performance) McGrath RentCorp achieved significant net income growth in Q3 2024, primarily due to a $180 million merger termination payment, despite a modest 1% increase in rental revenue, with total revenue growing 10% year-over-year Q3 2024 Key Financial Highlights (Continuing Operations): | Metric | Q3 2024 | Q3 2023 | Year-over-Year Growth | | :--------------------------------------- | :------------- | :------------- | :------- | | Total Revenue | $266.8 Million | $243.5 Million | 10% | | Rental Revenue | $124.2 Million | $122.7 Million | 1% | | Net Income from Continuing Operations | $149.3 Million | $40.4 Million | 269.55% | | Diluted EPS from Continuing Operations | $6.08 | $1.65 | 268.48% | | Adjusted EBITDA | $104.0 Million | $91.8 Million | 13% | | Quarterly Dividend | $0.475 per share | $0.465 per share | 2.15% | - Company received **$180 million** merger termination payment from WillScot Mobile Mini, contributing **$103.5 million** to net income or **$4.21** diluted EPS for the quarter, after deducting **$39.4 million** in transaction costs and income tax provisions[1](index=1&type=chunk)[2](index=2&type=chunk) - Excluding the merger termination payment and transaction costs, net income from continuing operations was **$45.9 million**, or **$1.87** diluted EPS[1](index=1&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Joe Hanna expressed satisfaction with Q3 results, highlighting strong modular business growth and increased total revenue, while portable storage and TRS-RenTelco faced demand challenges leading to revenue declines, with the company focusing on pricing optimization, fleet utilization, and growth initiatives - Modular business was a highlight this quarter, with rental revenue growing **9%**, driven by growth in both commercial and education customer segments[3](index=3&type=chunk) - Portable storage experienced soft demand, with rental revenue decreasing **11%** year-over-year, primarily due to reduced commercial construction project activity[3](index=3&type=chunk) - TRS-RenTelco continued to face demand challenges, with rental revenue decreasing **10%** year-over-year, leading the company to implement strict new equipment capital expenditure controls and efforts to right-size its fleet to market demand[3](index=3&type=chunk) - The company is committed to multi-year growth opportunities in both modular and portable storage businesses by expanding its customer base, geographic reach, and value-added services[4](index=4&type=chunk) [Segment Performance (Q3 2024)](index=2&type=section&id=Segment%20Performance%20(Q3%202024)) [Mobile Modular](index=2&type=section&id=Mobile%20Modular) The Mobile Modular segment showed strong performance in Q3 2024, with significant growth in Adjusted EBITDA, rental revenue, rental-related services, and sales revenue, driven by increased new equipment sales and improved gross margins Q3 2024 Mobile Modular Segment Performance Highlights: | Metric | Amount (Million USD) | Year-over-Year Growth | | :----------------------- | :--------------- | :------- | | Adjusted EBITDA | $71.4 | 23% | | Rental Revenue | $81.5 | 9% | | Rental-Related Services Revenue | $42.4 | 23% | | Sales Revenue | $66.0 | 14% | | Sales Gross Margin | 34% | 2 percentage points | - Growth in rental-related services revenue was primarily attributed to higher delivery and pickup activity and increased on-site related services[5](index=5&type=chunk) - Sales revenue growth primarily stemmed from increased new equipment sales, with sales gross profit growing **20%**[5](index=5&type=chunk) [Portable Storage](index=2&type=section&id=Portable%20Storage) The Portable Storage segment experienced a decline in Q3 2024, with Adjusted EBITDA and rental revenue decreasing due to weak demand, though sales revenue slightly increased and selling and administrative expenses were reduced Q3 2024 Portable Storage Segment Performance Highlights: | Metric | Amount (Million USD) | Year-over-Year Change | | :----------------------- | :--------------- | :------- | | Adjusted EBITDA | $10.8 | -10% | | Rental Revenue | $17.0 | -11% | | Sales Revenue | $1.4 | +$0.3 | | Sales Gross Margin | 36% | 4 percentage points | | Selling and Administrative Expenses | $6.8 | -15% | - Rental revenue gross profit decreased **9%** to **$14.7 million**[6](index=6&type=chunk) - Sales revenue growth was primarily driven by increased used equipment sales[6](index=6&type=chunk) [TRS-RenTelco](index=2&type=section&id=TRS-RenTelco) The TRS-RenTelco segment continued to face demand challenges in Q3 2024, resulting in a 10% decrease in both Adjusted EBITDA and rental revenue, despite a significant improvement in sales gross margin Q3 2024 TRS-RenTelco Segment Performance Highlights: | Metric | Amount (Million USD) | Year-over-Year Change | | :----------------------- | :--------------- | :------- | | Adjusted EBITDA | $18.9 | -10% | | Rental Revenue | $25.7 | -10% | | Sales Revenue | $7.6 | -13% | | Sales Gross Margin | 52% | 17 percentage points | | Selling and Administrative Expenses | $6.6 | -5% | - The decline in rental revenue was primarily due to continued softness in end markets, resulting in a lower average number of rental units compared to the prior year[7](index=7&type=chunk) - Sales revenue decreased primarily due to lower used equipment sales, but sales gross profit increased **27%**[7](index=7&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) McGrath RentCorp anticipates full-year 2024 total revenue between $910 million and $920 million, with Adjusted EBITDA projected to be between $345 million and $351 million, alongside total rental equipment capital expenditures of $180 million to $190 million Full-Year 2024 Financial Outlook (Continuing Operations): | Metric | Range | | :-------------------------------- | :---------------- | | Adjusted EBITDA | $345 to $351 Million | | Total Rental Equipment Capital Expenditures | $180 to $190 Million | | Total Revenue | $910 to $920 Million | - Adjusted EBITDA is defined as net income before interest expense, income tax provision, depreciation, amortization, non-cash impairment costs, stock-based compensation, transaction costs, other net income, and non-operating transactions such as the WillScot Mobile Mini merger termination benefit[9](index=9&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) [About McGrath RentCorp](index=3&type=section&id=About%20McGrath%20RentCorp) Founded in 1979, McGrath RentCorp is a leading North American B2B rental company specializing in modular solutions (Mobile Modular and Mobile Modular Portable Storage) and electronic test equipment rental (TRS-RenTelco), known for customer experience and over 30 years of consecutive annual dividend growth - McGrath RentCorp was founded in **1979** and is headquartered in Livermore, California[10](index=10&type=chunk) - The company's core businesses are modular solutions (Mobile Modular and Mobile Modular Portable Storage) and electronic test equipment rental (TRS-RenTelco)[10](index=10&type=chunk) - The company has a track record of over **30 years** of consecutive annual dividend increases[10](index=10&type=chunk) [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) McGrath RentCorp held a conference call on October 24, 2024, at 5:00 PM ET to discuss Q3 2024 results, with a replay available via phone and the company's investor relations website - The conference call was held on **October 24, 2024, at 5:00 PM ET** (2:00 PM PT)[11](index=11&type=chunk) - Participants could listen by dialing a specified phone number or accessing the company's investor relations website[11](index=11&type=chunk) - A replay of the call was available for **seven days** after the conference call by dialing a specified number or visiting the company's website[11](index=11&type=chunk) [Forward-Looking Statements and Risks](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risks) This press release contains "forward-looking statements" regarding future performance, strategies, and objectives, particularly growth opportunities in modular and portable storage businesses and the 2024 financial outlook, which are subject to significant risks and uncertainties including market health, acquisition impacts, competition, and operational execution - Forward-looking statements include the CEO's comments on the company's opportunities to expand its customer base, geographic reach, and value-added services in the modular and portable storage businesses, as well as statements in the "Financial Outlook" section regarding the full year 2024[12](index=12&type=chunk) - Significant risks and uncertainties include: the health of the education and commercial markets for the modular building division; unforeseen liabilities and integration challenges related to the Vesta, Brekke Storage, Dixie Storage, and Inland Storage acquisitions; any adverse impacts from the termination of the WillScot Mobile Mini merger; internal competition within the modular business; activity levels in the semiconductor and general and communications test equipment markets for TRS-RenTelco; the level of commercial construction project activity and its impact on the portable storage division; the ability to continue executing strategic performance improvement initiatives; the ability to successfully implement price increases to offset cost increases; and the ability to effectively manage rental assets[13](index=13&type=chunk)[14](index=14&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) In Q3 2024, total revenue increased 10% year-over-year to $266.8 million, driven by growth in rental and sales revenue, with net income from continuing operations surging from $40.4 million in Q3 2023 to $149.3 million, primarily due to a $180 million merger termination benefit Condensed Consolidated Statements of Operations (Continuing Operations, in thousands): | Metric | Q3 2024 | Q3 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--------------------------------------- | :------------- | :------------- | :------------- | :------------- | | Total Revenue | $266,758 | $243,506 | $667,196 | $610,254 | | Total Cost of Sales | $142,779 | $131,972 | $346,534 | $326,743 | | Gross Profit | $123,979 | $111,534 | $320,661 | $283,511 | | Operating Income | $74,682 | $66,585 | $181,178 | $134,038 | | Merger Termination Benefit (WillScot Mobile Mini) | $(180,000) | $— | $(180,000) | $— | | WillScot Mobile Mini Transaction Costs | $39,436 | $— | $61,157 | $— | | Income from Continuing Operations Before Income Taxes | $202,821 | $55,518 | $261,691 | $105,770 | | Income Tax Provision from Continuing Operations | $53,504 | $15,152 | $68,913 | $25,934 | | Net Income from Continuing Operations | $149,317 | $40,366 | $192,778 | $79,836 | | Diluted EPS from Continuing Operations | $6.08 | $1.65 | $7.85 | $3.26 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2024, total assets increased to $2.286 billion from $2.217 billion on December 31, 2023, with a significant reduction in notes payable and an increase in total stockholders' equity, reflecting an improved financial position Condensed Consolidated Balance Sheets (in thousands): | Metric | Sep 30, 2024 | Dec 31, 2023 | Change Rate | | :--------------------------------------- | :------------- | :--------------- | :----- | | Cash | $4,056 | $877 | 362.49% | | Accounts Receivable, Net | $224,529 | $227,368 | -1.25% | | Rental Equipment, Net | $1,391,682 | $1,329,323 | 4.69% | | Property, Plant, and Equipment, Net | $195,593 | $169,114 | 15.66% | | Total Assets | $2,285,636 | $2,217,283 | 3.08% | | Notes Payable | $608,562 | $762,975 | -20.23% | | Total Liabilities | $1,191,576 | $1,283,481 | -7.16% | | Total Stockholders' Equity | $1,094,060 | $933,802 | 17.16% | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2024, net cash provided by operating activities significantly increased to $337.6 million from $118.9 million in the prior year, primarily influenced by the merger termination benefit, while net cash used in investing activities decreased, and financing activities shifted from a net inflow to a net outflow Condensed Consolidated Statements of Cash Flows (in thousands): | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | Change Rate | | :--------------------------------------- | :------------- | :------------- | :----- | | Net Cash Provided by Operating Activities | $337,596 | $118,903 | 184.09% | | Net Cash Used in Investing Activities | $(140,818) | $(331,547) | 57.54% | | Net Cash (Used in) Provided by Financing Activities | $(193,599) | $213,624 | N/A | | Cash Balance, End of Period | $4,056 | $1,946 | 108.43% | | Net Merger Termination Benefit (Supplemental Disclosure) | $118,843 | $— | N/A | [Segment Financial Data](index=9&type=section&id=Segment%20Financial%20Data) [Three Months Ended September 30, 2024](index=9&type=section&id=Three%20Months%20Ended%20September%2030%2C%202024) In Q3 2024, the Mobile Modular segment was the top performer with total revenue of $191.4 million and Adjusted EBITDA of $71.4 million, while Portable Storage and TRS-RenTelco segments experienced year-over-year declines in both revenue and Adjusted EBITDA, reflecting market challenges Q3 2024 Segment Revenue (in thousands): | Segment | Rental | Rental-Related Services | Sales | Other | Total Revenue | | :----------------- | :------- | :----------- | :----- | :--- | :----- | | Mobile Modular | $81,508 | $42,396 | $65,994 | $1,509 | $191,407 | | Portable Storage | $17,040 | $4,405 | $1,411 | $195 | $23,051 | | TRS-RenTelco | $25,655 | $900 | $7,604 | $642 | $34,801 | | Enviroplex | $— | $— | $17,499 | $— | $17,499 | | **Consolidated Total** | **$124,203** | **$47,701** | **$92,508** | **$2,346** | **$266,758** | Q3 2024 Segment Adjusted EBITDA (in thousands): | Segment | Adjusted EBITDA | | :----------------- | :------------- | | Mobile Modular | $71,420 | | Portable Storage | $10,796 | | TRS-RenTelco | $18,945 | | Enviroplex | $2,822 | | **Consolidated Total** | **$103,983** | [Three Months Ended September 30, 2023](index=11&type=section&id=Three%20Months%20Ended%20September%2030%2C%202023) In Q3 2023, the Mobile Modular segment also led in revenue and Adjusted EBITDA, with Portable Storage and TRS-RenTelco showing higher rental revenues compared to Q3 2024, indicating a decline in these segments over the past year Q3 2023 Segment Revenue (in thousands): | Segment | Rental | Rental-Related Services | Sales | Other | Total Revenue | | :----------------- | :------- | :----------- | :----- | :--- | :----- | | Mobile Modular | $74,796 | $34,429 | $57,723 | $1,908 | $168,856 | | Portable Storage | $19,232 | $5,287 | $1,144 | $363 | $26,026 | | TRS-RenTelco | $28,658 | $776 | $8,733 | $942 | $39,109 | | Enviroplex | $— | $— | $9,515 | $— | $9,515 | | **Consolidated Total** | **$122,686** | **$40,492** | **$77,115** | **$3,213** | **$243,506** | Q3 2023 Segment Adjusted EBITDA (in thousands): | Segment | Adjusted EBITDA | | :----------------- | :------------- | | Mobile Modular | $58,166 | | Portable Storage | $12,047 | | TRS-RenTelco | $21,039 | | Enviroplex | $517 | | **Consolidated Total** | **$91,769** | [Nine Months Ended September 30, 2024](index=12&type=section&id=Nine%20Months%20Ended%20September%2030%2C%202024) For the nine months ended September 30, 2024, the Mobile Modular segment remained the primary contributor to revenue and Adjusted EBITDA, with consolidated total revenue reaching $667.2 million and Adjusted EBITDA at $259.7 million Nine Months Ended September 30, 2024 Segment Revenue (in thousands): | Segment | Rental | Rental-Related Services | Sales | Other | Total Revenue | | :----------------- | :------- | :----------- | :----- | :--- | :----- | | Mobile Modular | $236,040 | $95,450 | $127,251 | $4,795 | $463,536 | | Portable Storage | $53,270 | $13,768 | $3,889 | $907 | $71,835 | | TRS-RenTelco | $76,398 | $2,422 | $20,261 | $2,153 | $101,234 | | Enviroplex | $— | $— | $30,591 | $— | $30,591 | | **Consolidated Total** | **$365,708** | **$111,640** | **$181,992** | **$7,855** | **$667,196** | Nine Months Ended September 30, 2024 Segment Adjusted EBITDA (in thousands): | Segment | Adjusted EBITDA | | :----------------- | :------------- | | Mobile Modular | $168,165 | | Portable Storage | $33,333 | | TRS-RenTelco | $55,426 | | Enviroplex | $2,799 | | **Consolidated Total** | **$259,723** | [Nine Months Ended September 30, 2023](index=13&type=section&id=Nine%20Months%20Ended%20September%2030%2C%202023) For the nine months ended September 30, 2023, consolidated total revenue was $610.3 million and Adjusted EBITDA was $230.5 million, with Mobile Modular as the largest contributor, and Portable Storage and TRS-RenTelco showing higher rental revenues than in the corresponding 2024 period Nine Months Ended September 30, 2023 Segment Revenue (in thousands): | Segment | Rental | Rental-Related Services | Sales | Other | Total Revenue | | :----------------- | :------- | :----------- | :----- | :--- | :----- | | Mobile Modular | $209,622 | $83,799 | $112,939 | $5,249 | $411,609 | | Portable Storage | $54,776 | $15,359 | $2,890 | $1,167 | $74,192 | | TRS-RenTelco | $86,375 | $2,323 | $21,368 | $3,008 | $113,074 | | Enviroplex | $— | $— | $11,379 | $— | $11,379 | | **Consolidated Total** | **$350,773** | **$101,481** | **$148,576** | **$9,424** | **$610,254** | Nine Months Ended September 30, 2023 Segment Adjusted EBITDA (in thousands): | Segment | Adjusted EBITDA | | :----------------- | :------------- | | Mobile Modular | $135,107 | | Portable Storage | $34,375 | | TRS-RenTelco | $63,212 | | Enviroplex | $(2,207) | | **Consolidated Total** | **$230,487** | [Non-GAAP Financial Measures Reconciliation (Adjusted EBITDA)](index=13&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation%20(Adjusted%20EBITDA)) [Adjusted EBITDA Definition and Use](index=13&type=section&id=Adjusted%20EBITDA%20Definition%20and%20Use) Adjusted EBITDA is a non-GAAP financial measure defined as net income before interest expense, income taxes, depreciation, amortization, non-cash impairment costs, stock-based compensation, transaction costs, gains on asset sales, and non-operating transactions like merger termination benefits, used by management to assess operating performance, liquidity, and financial covenant compliance - Adjusted EBITDA is defined as net income before interest expense, income tax provision, depreciation, amortization, non-cash impairment costs, stock-based compensation, transaction costs, gains on asset sales, and non-operating transactions such as the WillScot Mobile Mini merger termination benefit[23](index=23&type=chunk) - Management uses Adjusted EBITDA to assess period operating performance, comply with financial covenants in revolving credit facilities and senior notes, and evaluate the ability to meet future capital expenditure and working capital needs[24](index=24&type=chunk) - Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data under GAAP, nor is it a measure of the company's profitability or liquidity[25](index=25&type=chunk) [Reconciliation of Income from Continuing Operations to Adjusted EBITDA](index=15&type=section&id=Reconciliation%20of%20Income%20from%20Continuing%20Operations%20to%20Adjusted%20EBITDA) This reconciliation table illustrates how income from continuing operations is adjusted to Adjusted EBITDA, which was $104.0 million for Q3 2024 and $259.7 million for the nine months ended September 30, 2024, with the merger termination benefit significantly impacting the adjustment Reconciliation of Income from Continuing Operations to Adjusted EBITDA (in thousands): | Metric | Q3 2024 | Q3 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--------------------------------------- | :------------- | :------------- | :------------- | :------------- | | Income from Continuing Operations | $149,317 | $40,366 | $192,778 | $79,836 | | Income Tax Provision from Continuing Operations | $53,502 | $15,152 | $68,913 | $25,934 | | Interest Expense | $12,642 | $11,025 | $38,383 | $28,434 | | Depreciation and Amortization | $26,693 | $26,884 | $80,824 | $80,385 | | **EBITDA** | **$242,154** | **$93,427** | **$380,898** | **$214,589** | | Stock-Based Compensation | $2,393 | $1,891 | $6,949 | $5,155 | | Transaction Costs | $39,436 | $10 | $61,157 | $14,302 | | Other Net Income | $— | $(3,559) | $(9,281) | $(3,559) | | Merger Termination Benefit (WillScot Mobile Mini) | $(180,000) | $— | $(180,000) | $— | | **Adjusted EBITDA** | **$103,983** | **$91,769** | **$259,723** | **$230,487** | | Adjusted EBITDA Margin | 39% | 39% | 38% | 38% | [Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities](index=16&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20to%20Net%20Cash%20Provided%20by%20Operating%20Activities) This reconciliation table details the adjustments from Adjusted EBITDA to net cash provided by operating activities, which amounted to $199.0 million for Q3 2024 and $337.6 million for the nine months ended September 30, 2024 Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities (in thousands): | Metric | Q3 2024 | Q3 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--------------------------------------- | :------------- | :------------- | :------------- | :------------- | | Adjusted EBITDA | $103,983 | $91,769 | $259,723 | $234,169 | | Interest Paid | $(13,944) | $(11,016) | $(40,338) | $(27,818) | | Income Taxes Paid, Net | $(773) | $(2,616) | $3,826 | $(9,547) | | Gain on Sale of Used Rental Equipment | $(9,648) | $(8,714) | $(25,185) | $(22,964) | | Foreign Currency Exchange Loss | $(216) | $42 | $(53) | $(166) | | Amortization of Debt Issuance Costs | $2 | $2 | $6 | $6 | | Change in Accounts Receivable, Net | $(7,150) | $(26,223) | $2,839 | $(25,939) | | Change in Prepaid Expenses and Other Assets | $14,171 | $1,114 | $19,988 | $(7,390) | | Change in Accounts Payable and Other Liabilities | $123,241 | $4,476 | $104,293 | $(29,356) | | Change in Deferred Revenue | $(10,699) | $(1,382) | $12,497 | $7,908 | | **Net Cash Provided by Operating Activities** | **$198,967** | **$47,452** | **$337,596** | **$118,903** |

The company won't be acquired after all. In its 45-year history, McGrath RentCorp (MGRC -3.13%) has had many encouraging pieces of news to report to its shareholders and the world at large. Unfortunately for the business-to-business equipment rental specialist, its top news item on Wednesday wasn't so positive. On the back of that, investors traded out of the stock to leave it with an over 3% decline in price. This was a more pronounced slide than the 0.3% dip of the S&P 500 index on the day. Merger deal te ...