Group 1 - McGrath RentCorp operates as a diversified rental company, focusing on renting relocatable modular buildings and portable storage containers [1] - The company has a strong track record in its sector, indicating potential for continued performance [1] Group 2 - Crude Value Insights provides an investment service centered on oil and natural gas, emphasizing cash flow and growth prospects [1] - Subscribers benefit from a stock model account, detailed cash flow analyses of exploration and production firms, and live sector discussions [2]

Financial Data and Key Metrics Changes - Total company revenues increased by 10% to $244 million in Q4 2024, while adjusted EBITDA rose by 5% to $92 million compared to the previous year [28][8] - For the full year 2024, both revenue and adjusted EBITDA grew by 10% [13] Business Line Data and Key Metrics Changes - Mobile Modular experienced a strong quarter with rental revenues growing by 8% and sales revenues increasing by 32% [8][29] - Portable Storage rental revenues declined by 15% to $16.7 million, attributed to lower commercial construction activity [11][32] - TRS-RenTelco rental revenues decreased by 9%, reflecting industry-wide slowdowns in test and measurement equipment markets [12][34] Market Data and Key Metrics Changes - Utilization rates dipped year-over-year, ending the quarter at 75.1% [10] - Average fleet utilization for Mobile Modular was 76%, down from 79.7% a year ago [30] Company Strategy and Development Direction - The company is focusing on long-term growth despite challenges, with a commitment to executing strategic initiatives in the Modular business [7][20] - There is an emphasis on increasing sales team coverage and prudent equipment purchases to meet order volumes [20] - The company plans to invest in growing locations and pursuing tuck-in acquisitions to augment growth [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about demand conditions in 2025, noting stronger quote activity in January compared to the previous year [16][17] - The company anticipates that the Modular segment will be the primary driver of adjusted EBITDA growth for 2025 [39] - Management acknowledged the challenges in the Portable Storage segment but noted early signs of stabilization [21][42] Other Important Information - The company celebrated its 40th anniversary as a NASDAQ-listed entity and announced a dividend increase for the 34th consecutive year [26] - Phil Hawkins was promoted to Chief Operating Officer to support growth efforts [24] Q&A Session Summary Question: Growth in Modular segment for commercial vs education - Management indicated that both segments grew, with commercial growing by 9% and education by 7% in Q4 [49] Question: Outlook for classroom rentals - Management believes the growth will be balanced and noted improved customer activity compared to the previous year [51][52] Question: Overall business outlook for 2025 - Management expressed a positive outlook for Modular, a challenging position for Portable Storage, and stabilization for TRS [54][55][56] Question: Pricing dynamics in Mobile Modular - Management highlighted a significant gap between average pricing on the fleet and new orders, which is expected to drive margins [60][62] Question: Capital allocation and M&A opportunities - Management remains flexible regarding capital allocation, including potential M&A opportunities and buybacks [78][80] Question: Green shoots for TRS-RenTelco - Management noted consistent bookings outpacing returns, indicating positive momentum in the general purpose and wired communications rentals [112][113]

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. ...