WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) Q2 2023 Results Conference Call August 3, 2023 10:00 AM ET Company Participants Nick Girardi - Senior Director of Treasury and Investor Relations Brad Soultz - Chief Executive Officer Tim Boswell - President and Chief Financial Officer Conference Call Participants Tim Mulrooney - William Blair Kevin McVeigh - Credit Suisse Faiza Alwy - Deutsche Bank Andrew Wittmann - Baird Scott Schneeberger - Oppenheimer Steven Ramsey - Thompson Research Philip Ng - Jefferie ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware 82-3430194 4646 E Van Buren St., Suite 400 Phoenix, A ...

WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) Q1 2023 Earnings Conference Call April 27, 2023 10:00 AM ET Company Participants Nick Girardi - Senior Director of Treasury and Investor Relations Brad Soultz - Chief Executive Officer Tim Boswell - President and Chief Financial Officer Conference Call Participants Andy Wittmann - Baird Tim Mulrooney - William Blair Kevin McVeigh - Credit Suisse Dillon Cumming - Morgan Stanley Scott Schneeberger - Oppenheimer Ronan Kennedy - Barclays Faiza Alwy - Deutsche Ban ...

| --- | --- | |----------------------------------|-------| | April 27, 2023 | | | Quarterly Investor Presentation | | | First Quarter 2023 | | | | | | | | | | | Safe Harbor Forward Looking Statements This presentation contains forward-looking statements (including the guidance/outlook contained herein) within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. The words "estimates," "expects," "anticipates," "believes," ...

PART I Financial Information Presents the company's unaudited condensed consolidated financial statements and related notes for the period [Item 1 Financial Statements](index=2&type=section&id=Item%201%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, changes in equity, and cash flows, along with detailed notes explaining significant accounting policies, acquisitions, discontinued operations, revenue, leases, debt, equity, and segment reporting [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Provides a snapshot of the company's assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Assets | $5,609,751 | $5,827,651 | | Total Liabilities | $4,045,827 | $4,262,351 | | Total Shareholders' Equity | $1,563,924 | $1,565,300 | | Assets held for sale - non-current | $— | $268,022 | | Long-term debt | $2,876,453 | $3,063,042 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income over a specific period Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Total revenues | $565,468 | $451,171 | | Operating income | $151,647 | $81,701 | | Net income | $210,884 | $51,171 | | Income from discontinued operations | $134,613 | $12,123 | | Gain on sale of discontinued operations | $176,078 | $— | | Diluted Earnings per share | $1.00 | $0.22 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Presents net income and other comprehensive income items, reflecting total changes in equity from non-owner sources Condensed Consolidated Statements of Comprehensive Income (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net income | $210,884 | $51,171 | | Foreign currency translation adjustment, net | $7,934 | $(4,074) | | Total comprehensive income | $218,151 | $49,418 | [Condensed Consolidated Statements of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Outlines the changes in each component of shareholders' equity over the reporting period Key Changes in Equity (in thousands) | Metric | Balance at Dec 31, 2022 | Net Income | Repurchase & Cancellation of Common Stock | Balance at Mar 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Shareholders' Equity | $1,565,300 | $210,884 | $(217,687) | $1,563,924 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Reports cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $148,765 | $145,527 | | Net cash provided by (used in) investing activities | $271,949 | $(148,360) | | Net cash (used in) provided by financing activities | $(423,087) | $1,586 | | Proceeds from sale of discontinued operations | $403,992 | $— | | Repurchase and cancellation of Common Stock and warrants | $(215,098) | $(77,708) | [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and additional information supporting the condensed consolidated financial statements [NOTE 1 - Summary of Significant Accounting Policies](index=8&type=section&id=NOTE%201%20-%20Summary%20of%20Significant%20Accounting%20Policies) Describes the fundamental accounting principles and methods used in preparing the financial statements - WillScot Mobile Mini is a leading business services provider specializing in innovative flexible work space and portable storage solutions in the United States, Canada, and Mexico[19](index=19&type=chunk) - The company adopted ASU 2021-08 on January 1, 2023, which did not have a material impact on its financial statements or related disclosures[24](index=24&type=chunk) [NOTE 2 - Acquisitions](index=8&type=section&id=NOTE%202%20-%20Acquisitions) Details the company's acquisition activities, including cash consideration and integration costs - During the first quarter of 2023, the Company acquired assets and liabilities of two regional storage and modular companies for **$79.6 million in cash**, adding approximately 300 storage units and 500 modular units[26](index=26&type=chunk) Integration Costs (in thousands) | Period | 2023 | 2022 | | :--- | :--- | :--- | | Three Months Ended March 31 | $3,900 | $4,100 | [NOTE 3 - Discontinued Operations](index=9&type=section&id=NOTE%203%20-%20Discontinued%20Operations) Reports the financial results and gain on sale related to the company's discontinued UK Storage Solutions segment - The company completed the sale of its former UK Storage Solutions segment on January 31, 2023, for **$418.1 million in cash**, as part of a strategic shift to concentrate on core modular and storage businesses in North America[29](index=29&type=chunk) - A total gain on sale of discontinued operations of **$176.1 million** was recognized for the three months ended March 31, 2023, including a $0.4 million adjustment for the former Tank and Pump segment[31](index=31&type=chunk) Income from Discontinued Operations (in thousands) | Metric | Three Months Ended March 31, 2023 (UK Storage Solutions) | Three Months Ended March 31, 2022 (Tank and Pump + UK Storage Solutions) | | :--- | :--- | :--- | | Revenues | $8,694 | $57,723 | | Income from discontinued operations before income tax | $4,003 | $15,787 | | Gain on sale of discontinued operations | $175,708 | $— | | Income from discontinued operations | $134,243 | $12,123 | [NOTE 4 - Revenue](index=13&type=section&id=NOTE%204%20-%20Revenue) Provides a breakdown of total revenue by geographic area and major product and service lines Total Revenue by Geographic Area (in thousands) | Geographic Area | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | US | $533,174 | $421,684 | | Canada | $26,941 | $25,273 | | Mexico | $5,353 | $4,214 | | **Total revenues** | **$565,468** | **$451,171** | Revenue by Major Product and Service Line (in thousands) | Product/Service Line | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Modular space leasing revenue | $224,470 | $190,390 | | Portable storage leasing revenue | $97,315 | $70,703 | | VAPS and third party leasing revenues | $94,126 | $75,305 | | Delivery and installation revenue | $106,630 | $85,539 | | **Total revenues** | **$565,468** | **$451,171** | - The majority of revenue (**77% for both periods**) was generated by rental income subject to ASC 842, with the remaining from performance obligations in contracts with customers for services or unit sales subject to ASC 606[41](index=41&type=chunk) [NOTE 5 - Leases](index=14&type=section&id=NOTE%205%20-%20Leases) Presents information on the company's operating and finance lease obligations and related expenses Undiscounted Future Lease Payments (in thousands, as of March 31, 2023) | Year | Operating | Finance | | :--- | :--- | :--- | | 2023 (remaining) | $46,323 | $12,694 | | 2024 | $54,591 | $15,259 | | 2025 | $45,588 | $14,932 | | 2026 | $33,680 | $14,618 | | 2027 | $22,750 | $11,372 | | Thereafter | $57,028 | $20,080 | | **Total lease payments** | **$259,960** | **$88,955** | Total Lease Expense (in thousands) | Lease Type | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Total finance lease expense | $4,520 | $3,762 | | Total operating lease expense | $26,753 | $28,339 | [NOTE 6 - Inventories](index=15&type=section&id=NOTE%206%20-%20Inventories) Details the composition of the company's inventories, including raw materials and finished units Inventories (in thousands) | Category | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Raw materials | $38,827 | $38,611 | | Finished units | $3,180 | $2,419 | | **Total Inventories** | **$42,007** | **$41,030** | [NOTE 7 - Rental Equipment, net](index=16&type=section&id=NOTE%207%20-%20Rental%20Equipment,%20net) Provides a breakdown of the company's rental equipment assets, net of accumulated depreciation Rental Equipment, net (in thousands) | Category | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Modular space units | $3,292,264 | $3,197,779 | | Portable storage units | $848,982 | $849,193 | | Value added products | $202,358 | $203,444 | | Less: accumulated depreciation | $(1,215,543) | $(1,173,129) | | **Rental equipment, net** | **$3,128,061** | **$3,077,287** | [NOTE 8 - Goodwill and Intangibles](index=16&type=section&id=NOTE%208%20-%20Goodwill%20and%20Intangibles) Presents the carrying amounts of goodwill and other intangible assets by segment and category Goodwill (in thousands) | Segment | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Modular | $518,961 | $518,877 | | Storage | $492,552 | $492,552 | | **Total Goodwill** | **$1,011,513** | **$1,011,429** | Intangible Assets, net (in thousands) | Category | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Mobile Mini customer relationships (net) | $123,375 | $129,250 | | Trade name - Mobile Mini | $164,000 | $164,000 | | Trade name - WillScot | $125,000 | $125,000 | | **Total intangible assets other than goodwill** | **$413,188** | **$419,125** | [NOTE 9 - Debt](index=17&type=section&id=NOTE%209%20-%20Debt) Details the company's outstanding debt, including secured notes and the ABL Facility Debt Outstanding (in thousands) | Debt Type | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | 2025 Secured Notes | $520,931 | $520,350 | | ABL Facility | $1,795,448 | $1,988,176 | | 2028 Secured Notes | $493,723 | $493,470 | | Finance Leases | $79,865 | $74,370 | | **Total debt** | **$2,889,967** | **$3,076,366** | - As of March 31, 2023, the company had **$1.1 billion of available borrowing capacity** under its ABL Facility, which has an aggregate principal amount of up to $3.7 billion and matures on June 30, 2027[59](index=59&type=chunk)[61](index=61&type=chunk) - The weighted average interest rate on the ABL Facility, adjusted for the effects of interest rate swap agreements, was **6.52%** at March 31, 2023[60](index=60&type=chunk) [NOTE 10 – Equity](index=18&type=section&id=NOTE%2010%20%E2%80%93%20Equity) Reports changes in shareholders' equity, including share repurchases and accumulated other comprehensive loss - During the three months ended March 31, 2023, the company repurchased **4,589,308 shares of Common Stock for $215.7 million**, with **$415.1 million** of the approved share repurchase pool remaining available[65](index=65&type=chunk)[67](index=67&type=chunk) Changes in Accumulated Other Comprehensive Loss (AOCI) (in thousands) | Metric | Balance at Dec 31, 2022 | Other comprehensive income (loss) before reclassifications | Reclassifications from AOCI to income | Balance at Mar 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total AOCI | $(70,122) | $8,793 | $(1,526) | $(62,855) | [NOTE 11 – Income Taxes](index=19&type=section&id=NOTE%2011%20%E2%80%93%20Income%20Taxes) Provides details on income tax expense and the effective tax rate from continuing operations Income Tax Expense and Effective Tax Rate from Continuing Operations | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Income tax expense (in thousands) | $30,510 | $12,083 | | Effective tax rate | 28.6% | 23.7% | - The effective tax rate for Q1 2023 (**28.6%**) differs from the US federal statutory rate of 21% primarily due to state and provincial taxes and an add-back for non-deductible executive compensation[71](index=71&type=chunk) [NOTE 12 - Derivatives](index=19&type=section&id=NOTE%2012%20-%20Derivatives) Discusses the company's derivative instruments used for hedging interest rate and foreign currency risks - In January 2023, the company entered into two interest rate swap agreements for **$750.0 million** of variable-rate debt under its ABL Facility, effectively converting it to a weighted average fixed interest rate of **3.44%** to hedge against interest payment cash flow fluctuations[73](index=73&type=chunk) - A contingent foreign currency forward contract to sell **£330.0 million**, executed in December 2022 for the UK Storage Solutions segment sale, was settled in January 2023, resulting in a **$7.7 million loss** recognized in currency losses, net[76](index=76&type=chunk)[78](index=78&type=chunk) [NOTE 13 - Fair Value Measures](index=20&type=section&id=NOTE%2013%20-%20Fair%20Value%20Measures) Presents the carrying amounts and fair values of the company's financial liabilities Carrying Amounts and Fair Values of Financial Liabilities (in thousands) | Liability | Carrying Amount (Mar 31, 2023) | Fair Value (Mar 31, 2023) | Carrying Amount (Dec 31, 2022) | Fair Value (Dec 31, 2022) | | :--- | :--- | :--- | :--- | :--- | | ABL Facility | $1,795,448 | $1,825,500 | $1,988,176 | $2,020,000 | | 2025 Secured Notes | $520,931 | $526,300 | $520,350 | $526,800 | | 2028 Secured Notes | $493,723 | $458,205 | $493,470 | $450,135 | - The carrying value of the ABL Facility approximates fair value due to variable interest rates, while the fair values of the 2025 and 2028 Secured Notes are based on their last trading prices[81](index=81&type=chunk) [NOTE 14 - Stock-Based Compensation](index=21&type=section&id=NOTE%2014%20-%20Stock-Based%20Compensation) Details the stock-based compensation expense by award type and unrecognized compensation costs Stock-Based Compensation Expense (in thousands) | Award Type | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Restricted Stock Awards (RSAs) | $300 | $300 | | Time-Based RSUs | $1,800 | $2,200 | | Performance-Based RSUs | $5,800 | $3,800 | | WillScot Options | $0 | $200 | | **Total Stock-Based Compensation Expense** | **$8,150** | **$6,395** | - As of March 31, 2023, unrecognized compensation cost related to Performance-Based RSUs totaled **$56.2 million**, expected to be recognized over a remaining vesting period of **2.1 years**[86](index=86&type=chunk) [NOTE 15 - Commitments and Contingencies](index=22&type=section&id=NOTE%2015%20-%20Commitments%20and%20Contingencies) Addresses the company's involvement in legal proceedings and other contingent liabilities - The company is involved in various lawsuits, claims, and legal proceedings in the ordinary course of business, but management believes the amount or range of reasonably possible loss will not have a material adverse effect on its consolidated financial position, results of operations, or cash flows[90](index=90&type=chunk) [NOTE 16 - Segment Reporting](index=22&type=section&id=NOTE%2016%20-%20Segment%20Reporting) Provides financial information for the company's Modular Solutions and Storage Solutions reportable segments - The company operates in two reportable segments: Modular Solutions and Storage Solutions. The ground level office business was transferred from the Modular segment to the Storage segment during Q1 2023, with all periods retrospectively revised[91](index=91&type=chunk) Segment Revenues (in thousands) | Segment | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Modular | $349,670 | $288,547 | 21.2% | | Storage | $215,798 | $162,624 | 32.7% | | **Total Revenues** | **$565,468** | **$451,171** | **25.3%** | Segment Adjusted EBITDA (in thousands) | Segment | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Modular | $136,964 | $99,586 | 37.5% | | Storage | $109,878 | $68,187 | 61.1% | | **Total Adjusted EBITDA** | **$246,842** | **$167,773** | **47.1%** | [NOTE 17 - Earnings Per Share](index=25&type=section&id=NOTE%2017%20-%20Earnings%20Per%20Share) Presents basic and diluted earnings per share from continuing and discontinued operations Earnings Per Share | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Basic EPS from continuing operations | $0.37 | $0.17 | | Diluted EPS from continuing operations | $0.36 | $0.17 | | Basic EPS from discontinued operations | $0.65 | $0.06 | | Diluted EPS from discontinued operations | $0.64 | $0.05 | | **Total Basic EPS** | **$1.02** | **$0.23** | | **Total Diluted EPS** | **$1.00** | **$0.22** | Weighted Average Shares (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Weighted average Common Shares outstanding – basic | 206,092 | 223,491 | | Weighted average Common Shares outstanding – dilutive | 209,664 | 228,956 | [Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the three months ended March 31, 2023, compared to the prior year. It covers an executive summary, significant developments, first-quarter highlights, consolidated and segment-specific results, non-GAAP financial measures, liquidity, and capital resources [Executive Summary and Outlook](index=26&type=section&id=Executive%20Summary%20and%20Outlook) Provides an overview of the company's business, strategic priorities, and market position - WillScot Mobile Mini is a leading business services provider specializing in innovative flexible work space and portable storage solutions across the US, Canada, and Mexico, serving over **85,000 customers** through approximately **240 branch locations**[101](index=101&type=chunk) - The company primarily leases modular and portable storage units, generating a highly diversified and predictable recurring revenue stream, with over **90% of new lease orders** on standard, pre-negotiated, or national account agreements[102](index=102&type=chunk) - Core priorities include growing leasing revenues (organically and through acquisitions), delivering 'Ready to Work' solutions with value-added products and services (VAPS), and continually improving the overall customer experience[104](index=104&type=chunk) [Significant Developments](index=26&type=section&id=Significant%20Developments) Highlights key operational and financial events that occurred during the reporting period - Successfully completed the harmonization of separate Modular and Storage CRM systems onto a single unified platform on February 6, 2023, to enhance customer view and sales productivity[105](index=105&type=chunk) - Completed the sale of the former UK Storage Solutions segment on January 31, 2023, for **$418.1 million**, with proceeds supporting North American reinvestment and other capital allocation priorities[106](index=106&type=chunk) - Acquired assets and liabilities of two regional storage and modular companies for **$79.6 million** in Q1 2023, adding approximately 300 storage units and 500 modular units[108](index=108&type=chunk) - Entered into two interest rate swap agreements in January 2023 for **$750.0 million** of variable-rate debt under the ABL Facility, fixing the weighted average interest rate at **3.44%** to hedge against interest rate fluctuations[109](index=109&type=chunk) - Repurchased **4,589,308 shares of Common Stock for $215.7 million** during Q1 2023, with **$415.1 million** remaining in the approved share repurchase pool[110](index=110&type=chunk) - The company has effectively navigated inflationary pressures on input costs (building materials, labor, transportation, fuel) by leveraging scale and strong rate performance, consistently driving margin improvements[111](index=111&type=chunk) [First Quarter Highlights](index=27&type=section&id=First%20Quarter%20Highlights) Summarizes the company's key financial and operational performance metrics for the first quarter Q1 2023 Financial Performance Highlights (YoY Change) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $565,468 | $451,171 | $114,297 | 25.3% | | Leasing revenue | $439,951 | $351,559 | $88,392 | 25.1% | | Delivery and installation revenue | $106,630 | $85,539 | $21,091 | 24.7% | | Adjusted EBITDA from continuing operations | $246,842 | $167,773 | $79,069 | 47.1% | | Net cash provided by operating activities | $148,765 | $145,527 | $3,238 | 2.2% | | Free Cash Flow | $102,940 | $54,624 | $48,316 | 88.4% | Q1 2023 Key Leasing Drivers (YoY Change) | Metric | 2023 | 2022 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Average portable storage units on rent | 165,093 | 152,789 | 12,304 | 8.1% | | Average modular space units on rent | 102,137 | 103,567 | (1,430) | (1.4%) | | Average modular space monthly rental rate | $989 | $826 | $163 | 19.7% | | Average portable storage monthly rental rate | $216 | $166 | $50 | 30.1% | | Average portable storage utilization | 78.7% | 83.1% | (4.4%) | (5.3%) | | Average modular space utilization | 66.0% | 68.5% | (2.5%) | (3.6%) | - Adjusted EBITDA margin from continuing operations increased **650 basis points to 43.7%** in Q1 2023, driven by continued expansion across all margin lines, with delivery and installation margins increasing **1,220 basis points**[113](index=113&type=chunk)[148](index=148&type=chunk) [Consolidated Results of Operations](index=29&type=section&id=Consolidated%20Results%20of%20Operations) Analyzes the company's overall financial performance, including revenue, gross profit, and net income [Comparison of Three Months Ended March 31, 2023 and 2022](index=29&type=section&id=Comparison%20of%20Three%20Months%20Ended%20March%2031,%202023%20and%202022) Compares the consolidated financial performance for the current and prior year's first quarter Consolidated Financial Performance (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $565,468 | $451,171 | $114,297 | 25.3% | | Gross profit | $323,128 | $234,061 | $89,067 | 38.1% | | Operating income | $151,647 | $81,701 | $69,946 | 85.6% | | Net income | $210,884 | $51,171 | $159,713 | 312.1% | [Revenue](index=29&type=section&id=Revenue) Discusses the drivers and breakdown of the company's total revenue for the period Revenue Breakdown (in thousands) | Revenue Type | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Leasing | $439,951 | $351,559 | $88,392 | 25.1% | | Delivery and installation | $106,630 | $85,539 | $21,091 | 24.7% | | New units sales | $10,657 | $5,787 | $4,870 | 84.5% | | Rental units sales | $8,230 | $8,286 | $(56) | (0.7%) | | **Total revenues** | **$565,468** | **$451,171** | **$114,297** | **25.3%** | - Average modular space monthly rental rates increased **19.7% to $989**, and average portable storage monthly rental rates increased **30.1% to $216**, driven by price optimization and VAPS penetration[118](index=118&type=chunk)[119](index=119&type=chunk) [Gross Profit](index=30&type=section&id=Gross%20Profit) Analyzes the changes in gross profit and gross profit percentage Gross Profit Performance (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross profit | $323,128 | $234,061 | $89,067 | 38.1% | | Gross profit percentage | 57.1% | 51.9% | 5.2% pts | 10.0% | | Gross profit percentage (excl. depreciation) | 67.6% | 64.6% | 3.0% pts | 4.6% | - The increase in gross profit was primarily a result of a **$71.2 million increase in leasing gross profit** and a **$16.7 million increase in delivery and installation gross profit**, driven by increased revenues due to favorable average monthly rental rates and pricing[120](index=120&type=chunk) [SG&A](index=30&type=section&id=SG%26A) Explains the trends and components of selling, general, and administrative expenses SG&A Expenses (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Selling, general and administrative | $150,892 | $138,144 | $12,748 | 9.2% | | Stock compensation expense | $8,200 | $6,300 | $1,900 | 30.2% | - The increase in SG&A was primarily due to a **$2.5 million (3.8%) increase in employee costs** (excluding stock compensation), a **$3.5 million (66.3%) increase in travel expenses**, and a **$2.1 million (11.2%) increase in real estate costs**[122](index=122&type=chunk) [Other Depreciation and Amortization](index=30&type=section&id=Other%20Depreciation%20and%20Amortization) Discusses the changes in depreciation and amortization expenses Other Depreciation and Amortization (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other depreciation and amortization | $17,173 | $15,362 | $1,811 | 11.8% | - The increase was driven by increased depreciation as a result of recent investments in the CRM system and other infrastructure improvements across the branch network[123](index=123&type=chunk) [Currency Losses (Gains), net](index=30&type=section&id=Currency%20Losses%20(Gains),%20net) Reports the impact of foreign currency fluctuations on the company's financial results Currency Losses, net (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Currency losses, net | $6,775 | $137 | $6,638 | 4845.3% | - The significant increase in currency losses was primarily attributable to a loss on the settlement of the contingent foreign currency forward contract related to the sale of the former UK Storage Solutions segment[124](index=124&type=chunk) [Other Expense (Income), Net](index=30&type=section&id=Other%20Expense%20(Income),%20Net) Details other non-operating income and expenses, such as insurance recoveries Other Income, net (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other income, net | $(3,359) | $(1,283) | $(2,076) | 161.8% | - The increase in other income, net, was related to an increase in insurance recoveries during 2023 from hurricanes in the Gulf Coast area of the United States[125](index=125&type=chunk) [Interest Expense](index=30&type=section&id=Interest%20Expense) Analyzes the company's interest expense, primarily driven by debt financing Interest Expense (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest expense | $44,866 | $30,570 | $14,296 | 46.7% | - The increase in interest expense was a result of higher overall weighted average interest rates due to the company's financing activities[126](index=126&type=chunk) [Income Tax Expense](index=30&type=section&id=Income%20Tax%20Expense) Discusses the income tax expense and its drivers from continuing operations Income Tax Expense from Continuing Operations (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Income tax expense | $30,510 | $12,083 | $18,427 | 152.5% | - The increase in income tax expense was driven by an increase in income from continuing operations before income tax for the three months ended March 31, 2023[128](index=128&type=chunk) [Income from Discontinued Operations](index=31&type=section&id=Income%20from%20Discontinued%20Operations) Reports the financial results and gain on sale from discontinued business segments Income from Discontinued Operations (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Income from discontinued operations | $134,613 | $12,123 | $122,490 | 1010.4% | | Gain on sale of discontinued operations | $176,078 | $— | $176,078 | N/A | - The increase in income from discontinued operations was driven by the **$176.1 million gain on sale** of the former UK Storage Solutions segment, partially offset by an increase in income tax expense from discontinued operations[129](index=129&type=chunk) [Business Segment Results](index=31&type=section&id=Business%20Segment%20Results) Provides a detailed analysis of the financial performance of the Modular and Storage Solutions segments [Comparison of Three Months Ended March 31, 2023 and 2022](index=31&type=section&id=Comparison%20of%20Three%20Months%20Ended%20March%2031,%202023%20and%202022) Compares the performance of each business segment for the current and prior year's first quarter Segment Performance Overview (in thousands) | Metric | Modular 2023 | Modular 2022 | Storage 2023 | Storage 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $349,670 | $288,547 | $215,798 | $162,624 | | Gross profit | $165,335 | $122,598 | $157,793 | $111,463 | | Adjusted EBITDA | $136,964 | $99,586 | $109,878 | $68,187 | [Modular](index=31&type=section&id=Modular) Details the revenue, gross profit, and Adjusted EBITDA for the Modular Solutions segment Modular Segment Key Metrics | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue (in thousands) | $349,670 | $288,547 | 21.2% | | Gross profit (in thousands) | $165,335 | $122,598 | 34.8% | | Adjusted EBITDA (in thousands) | $136,964 | $99,586 | 37.4% | | Average modular space monthly rental rate | $1,046 | $894 | 17.0% | | Average modular space units on rent | 81,902 | 80,683 | 1.5% | | Capital expenditures for rental equipment (in thousands) | $39,412 | $57,577 | (31.6%) | [Storage](index=32&type=section&id=Storage) Details the revenue, gross profit, and Adjusted EBITDA for the Storage Solutions segment Storage Segment Key Metrics | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue (in thousands) | $215,798 | $162,624 | 32.7% | | Gross profit (in thousands) | $157,793 | $111,463 | 41.5% | | Adjusted EBITDA (in thousands) | $109,878 | $68,187 | 61.1% | | Adjusted EBITDA margin | 50.9% | 41.9% | 9.0% pts | | Average portable storage monthly rental rate | $216 | $166 | 30.1% | | Average portable storage units on rent | 164,591 | 152,326 | 8.1% | | Capital expenditures for rental equipment (in thousands) | $7,345 | $20,171 | (63.6%) | [Other Non-GAAP Financial Data and Reconciliations](index=33&type=section&id=Other%20Non-GAAP%20Financial%20Data%20and%20Reconciliations) Presents and reconciles non-GAAP financial measures, including Adjusted EBITDA and Free Cash Flow [Adjusted EBITDA](index=33&type=section&id=Adjusted%20EBITDA) Reconciles net income from continuing operations to Adjusted EBITDA, a key performance metric Adjusted EBITDA from Continuing Operations (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Income from continuing operations | $76,271 | $39,048 | $37,223 | 95.3% | | Depreciation and amortization | $76,329 | $72,910 | $3,419 | 4.7% | | Stock compensation expense | $8,150 | $6,273 | $1,877 | 29.9% | | **Adjusted EBITDA from continuing operations** | **$246,842** | **$167,773** | **$79,069** | **47.1%** | - Adjusted EBITDA excludes certain non-cash items and the effect of transactions or events not related to core and ongoing business operations, such as currency gains/losses, impairment charges, restructuring costs, transaction costs, integration costs, and non-cash stock compensation[145](index=145&type=chunk)[146](index=146&type=chunk) [Adjusted EBITDA Margin](index=34&type=section&id=Adjusted%20EBITDA%20Margin) Calculates the Adjusted EBITDA margin from continuing operations, indicating profitability Adjusted EBITDA Margin from Continuing Operations | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change (bps) | | :--- | :--- | :--- | :--- | | Adjusted EBITDA from continuing operations (A) | $246,842k | $167,773k | N/A | | Revenue (B) | $565,468k | $451,171k | N/A | | **Adjusted EBITDA Margin (A/B)** | **43.7%** | **37.2%** | **650 bps** | [Net CAPEX](index=34&type=section&id=Net%20CAPEX) Details capital expenditures for rental equipment and property, plant, and equipment, net of proceeds from sales Net CAPEX (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total purchases of rental equipment and refurbishments | $(47,128) | $(95,236) | $48,108 | (50.5%) | | Total proceeds from sale of rental equipment | $7,781 | $14,554 | $(6,773) | (46.5%) | | Purchase of property, plant and equipment | $(6,736) | $(10,481) | $3,745 | (35.7%) | | Proceeds from sale of property, plant and equipment | $258 | $260 | $(2) | (0.8%) | | **Net CAPEX** | **$(45,825)** | **$(90,903)** | **$45,078** | **(49.6%)** | - Net CAPEX decreased significantly due to reduced refurbishment spending and decreased purchases of new fleet, reflecting lower utilization[113](index=113&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's sources of liquidity, cash flow activities, and material cash requirements [Overview](index=35&type=section&id=Overview) Provides a general description of the company's liquidity position and capital management strategy - The company's principal sources of liquidity include cash generated by operating activities from its subsidiaries, borrowings under its ABL Facility, and sales of equity and debt securities, which are believed to be sufficient for the next twelve months[151](index=151&type=chunk) - As of March 31, 2023, the company had **$1.1 billion of available borrowing capacity** under its ABL Facility, which has an aggregate principal amount of up to $3.7 billion[154](index=154&type=chunk) [Cash Flow Comparison of the Three Months Ended March 31, 2023 and 2022](index=35&type=section&id=Cash%20Flow%20Comparison%20of%20the%20Three%20Months%20Ended%20March%2031,%202023%20and%202022) Compares the net change in cash and cash equivalents for the current and prior year's first quarter Net Change in Cash and Cash Equivalents (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $148,765 | $145,527 | $3,238 | | Net cash provided by (used in) investing activities | $271,949 | $(148,360) | $420,309 | | Net cash (used in) provided by financing activities | $(423,087) | $1,586 | $(424,673) | | **Net change in cash and cash equivalents** | **$(1,856)** | **$(1,378)** | **$(478)** | [Cash Flows from Operating Activities](index=35&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Analyzes the cash generated from the company's primary business operations Cash Provided by Operating Activities (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $148,765 | $145,527 | $3,238 | 2.2% | - The increase in operating cash flow was due to a **$37.3 million increase in net income** (adjusted for non-cash items) and a **$34.1 million decrease in the net movements of operating assets and liabilities**[157](index=157&type=chunk) [Cash Flows from Investing Activities](index=35&type=section&id=Cash%20Flows%20from%20Investing%20Activities) Details cash flows related to the acquisition and disposal of long-term assets and business segments Cash Provided by (Used in) Investing Activities (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | | :--- | :--- | :--- | :--- | | Net cash provided by (used in) investing activities | $271,949 | $(148,360) | $420,309 | | Proceeds from sale of discontinued operations | $403,992 | $— | $403,992 | | Purchase of rental equipment and refurbishments | $(47,128) | $(95,236) | $48,108 | [Cash Flows from Financing Activities](index=36&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Reports cash flows from debt, equity, and other financing transactions Cash Used in Financing Activities (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | | :--- | :--- | :--- | :--- | | Net cash (used in) provided by financing activities | $(423,087) | $1,586 | $(424,673) | | Repayments of borrowings | $(558,300) | $(59,000) | $(499,300) | | Repurchase and cancellation of Common Stock and warrants | $(215,098) | $(77,708) | $(137,390) | | Receipts from borrowings | $363,800 | $152,500 | $211,300 | [Free Cash Flow](index=36&type=section&id=Free%20Cash%20Flow) Presents the company's Free Cash Flow, a measure of cash available after capital expenditures Free Cash Flow (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change ($k) | Change (%) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $148,765 | $145,527 | $3,238 | 2.2% | | Purchase of rental equipment and refurbishments | $(47,128) | $(95,236) | $48,108 | (50.5%) | | Proceeds from sale of rental equipment | $7,781 | $14,554 | $(6,773) | (46.5%) | | Purchase of property, plant and equipment | $(6,736) | $(10,481) | $3,745 | (35.7%) | | Proceeds from the sale of property, plant and equipment | $258 | $260 | $(2) | (0.8%) | | **Free Cash Flow** | **$102,940** | **$54,624** | **$48,316** | **88.4%** | - Free Cash Flow increased year over year principally as a result of the **$3.2 million increase in cash provided by operating activities** and the **$48.1 million decrease in cash used in the purchase of rental equipment and refurbishments**, partially offset by the **$6.8 million decrease in proceeds from the sale of rental equipment**[162](index=162&type=chunk) [Material cash requirements](index=36&type=section&id=Material%20cash%20requirements) Outlines significant future cash obligations, including debt and lease payments - The company has outstanding debt totaling **$2.9 billion** as of March 31, 2023, with **$13.5 million** obligated to be repaid within the next twelve months[163](index=163&type=chunk) - Operating lease obligations amount to **$260.0 million**, with **$60.0 million** payable within the next twelve months[164](index=164&type=chunk) - **$415.1 million** of the approved **$1.0 billion share repurchase pool** remained available as of March 31, 2023[165](index=165&type=chunk) [Critical Accounting Policies and Estimates](index=37&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Discusses the accounting policies requiring significant judgment and estimation in financial reporting - The company's financial statements are prepared in accordance with GAAP, requiring estimates and judgments that are reevaluated as appropriate[168](index=168&type=chunk) - There were no significant changes to the company's critical accounting policies during the three months ended March 31, 2023[169](index=169&type=chunk) [Recently Issued Accounting Standards](index=37&type=section&id=Recently%20Issued%20Accounting%20Standards) Refers to disclosures regarding new accounting standards and their impact - Refer to Note 1 of the financial statements for the assessment of recently issued and adopted accounting standards[170](index=170&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=37&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) Warns readers about the inherent risks and uncertainties associated with forward-looking statements in the report - This report contains forward-looking statements subject to various risks, uncertainties, and important factors that could cause actual results to differ materially, including global/local economic conditions, acquisitions, cybersecurity, trade policies, competition, interest rate fluctuations, and natural disasters[171](index=171&type=chunk)[172](index=172&type=chunk) [Item 3 Quantitative and Qualitative Disclosures about Market Risk](index=38&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section discusses the company's exposure to market risks from changes in foreign currency exchange rates and interest rates, and how these risks are evaluated and managed [Interest Rate Risk](index=38&type=section&id=Interest%20Rate%20Risk) Discusses the company's exposure to fluctuations in interest rates and its hedging strategies - The company is primarily exposed to interest rate risk through its ABL Facility, which bears interest at variable rates and had **$1.8 billion** in outstanding principal at March 31, 2023[174](index=174&type=chunk) - To manage interest rate risk, the company executed interest rate swap agreements in January 2023 for **$750.0 million** of ABL Facility debt, effectively converting it to a weighted average fixed interest rate of **3.44%** until June 30, 2027[175](index=175&type=chunk) - An increase in interest rates by **100 basis points** on the ABL Facility, inclusive of the impact of interest rate swaps, would increase the company's quarter-to-date interest expense by approximately **$10.8 million**[176](index=176&type=chunk) [Foreign Currency Risk](index=38&type=section&id=Foreign%20Currency%20Risk) Addresses the company's exposure to foreign currency exchange rate fluctuations from international operations - The company generates approximately **94% of its consolidated net revenues in the US** but is exposed to foreign currency risk through its operations in Canada and Mexico, where customers are billed in local currency[177](index=177&type=chunk) - A strengthening US dollar could negatively impact foreign revenues upon translation into US dollars for consolidation[177](index=177&type=chunk) - To date, the company has not entered into any hedging arrangements with respect to foreign currency risk[178](index=178&type=chunk) [Item 4 Controls and Procedures](index=39&type=section&id=Item%204%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=39&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Reports on management's assessment of the effectiveness of the company's disclosure controls and procedures - Management, with the participation of the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective as of March 31, 2023[179](index=179&type=chunk) [Changes in Internal Controls](index=39&type=section&id=Changes%20in%20Internal%20Controls) States whether any material changes occurred in internal control over financial reporting during the quarter - There were no changes in the company's internal control over financial reporting that occurred during the quarter ended March 31, 2023, that materially affected or are reasonably likely to materially affect, its internal control over financial reporting[180](index=180&type=chunk) PART II Other Information Contains additional information not covered in the financial statements, including legal matters and exhibits [Item 1 Legal Proceedings](index=40&type=section&id=Item%201%20Legal%20Proceedings) This section addresses the company's involvement in legal proceedings and management's assessment of their potential financial impact - The company is involved in various lawsuits, claims, and legal proceedings that arise in the ordinary course of business. Management believes that the amount or range of reasonably possible loss will not have a material adverse effect on the consolidated financial position, results of operations, or cash flows[183](index=183&type=chunk) [Item 1A Risk Factors](index=40&type=section&id=Item%201A%20Risk%20Factors) This section refers to the risk factors previously disclosed in the company's annual report, indicating no material changes - The company's financial position, results of operations, and cash flows are subject to various risks, which have not materially changed from those discussed in Item 1A of its 2022 Annual Report on Form 10-K[184](index=184&type=chunk) [Item 2 Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section summarizes the company's common stock repurchase activities during the first quarter of 2023 Common Stock Repurchases (Q1 2023) | Period | Total Number of Shares Purchased (in thousands) | Average Price Paid per Share | Maximum Dollar Value Remaining Under Plan (in millions) | | :--- | :--- | :--- | :--- | | January 1, 2023 to January 31, 2023 | 1,595.0 | $45.78 | $557.8 | | February 1, 2023 to February 28, 2023 | 893.5 | $49.76 | $513.3 | | March 1, 2023 to March 31, 2023 | 2,100.8 | $46.73 | $415.1 | | **Total** | **4,589.3** | **$46.99** | **N/A** | - As of March 31, 2023, **$415.1 million** of the **$1.0 billion share repurchase authorization** remained available for use[186](index=186&type=chunk) [Item 3 Defaults Upon Senior Securities](index=40&type=section&id=Item%203%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities - No defaults upon senior securities were reported[187](index=187&type=chunk) [Item 4 Mine Safety Disclosures](index=40&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[188](index=188&type=chunk) [Item 5 Other Information](index=40&type=section&id=Item%205%20Other%20Information) This section indicates that no other information was reported - No other information was reported under this item[189](index=189&type=chunk) [Item 6 Exhibits](index=41&type=section&id=Item%206%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications, XBRL documents, and the amended certificate of incorporation - The exhibits include the Amended and Restated Certificate of Incorporation, Certifications of the Chief Executive Officer and Chief Financial Officer (pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act), and various XBRL Taxonomy Extension Documents[190](index=190&type=chunk) SIGNATURE Confirms the official signing and submission of the financial report - The report was duly signed on April 27, 2023, by Timothy D. Boswell, President & Chief Financial Officer, on behalf of WillScot Mobile Mini Holdings Corp[194](index=194&type=chunk)

Financial Data and Key Metrics Changes - For the full year 2022, revenue reached $2.14 billion, an increase of 28% year-over-year, with net income of $276 million, up 141%, and adjusted EBITDA of $884 million, up 36% year-over-year, all representing company records [8][26][28] - In Q4 2022, total revenues were $591 million, up 28%, and adjusted EBITDA increased 43% to $268 million, with an adjusted EBITDA margin expanding by 480 basis points to over 45%, a company record [26][29] - Free cash flow for Q4 was $123 million at a 20% margin, with a full-year free cash flow margin of 14% [27][35] Business Line Data and Key Metrics Changes - The Modular team achieved an 18% year-over-year increase in average monthly rates in 2022, while the Storage team delivered 24% year-over-year growth [13][14] - Value-Added Products and Services (VAPS) opportunities alone support $500 million of future growth, with the Modular team exceeding $400 of VAPS revenue per month per module unit delivered [9][10] - Delivery and installation revenue increased by 23% in Q4 due to strong pricing and volumes, contributing to gross margin expansion [31] Market Data and Key Metrics Changes - The company reported a 3.1x net debt to EBITDA ratio pro forma for the U.K. divestiture, the lowest level in the last 10 years [28][37] - The weighted average cost of debt is 5.5%, with 60% of the debt being fixed rate [38] Company Strategy and Development Direction - The company has divested the Tank and Pump and U.K. segments, focusing on its core modular space and storage solutions in North America [5][6] - The strategy emphasizes safe and frugal growth in lease revenues through driving units on rent, rate optimization, and value-added products and services [6][20] - The company plans to continue its disciplined M&A strategy, having closed 13 acquisitions in 2022, with a strong pipeline for future acquisitions [18][80] Management's Comments on Operating Environment and Future Outlook - Management expects revenue growth of 9% to 16% in 2023, with adjusted EBITDA projected to be between $1 billion and $1.05 billion, reflecting a stable market environment [43][44] - The company anticipates low single-digit volume growth in the Modular business and 3% to 4% growth in the Storage business, with a focus on maintaining pricing and value-added products [44][67] - Management expressed confidence in achieving and surpassing milestones in 2023, despite potential macroeconomic uncertainties [51][49] Other Important Information - The company has created $1.6 billion of capital availability on a leverage-neutral basis over the last 12 months, with significant capital allocated to net CapEx and share repurchases [39][40] - The company expects to see a reduction in net CapEx by about $25 million or 7% in 2023, driven by a more normal seasonal pattern [47][76] Q&A Session Summary Question: Demand outlook and compounding pace - Management noted that while demand expectations have moderated, there is still significant backlog and robust customer expectations for the year [56][57] Question: EBITDA margin expansion sources - Management indicated that EBITDA margin expansion is expected to come roughly half from gross margin improvements and half from SG&A leverage [59][61] Question: Pricing dynamics in Storage - Management acknowledged strong seasonal impacts on pricing in Q4, with expectations for moderation in Q1 but confidence in sustaining double-digit rate growth over the long term [68][71] Question: CapEx guidance and asset classes - Management outlined that approximately half of CapEx will go into Modular refurbishment, with a focus on maintaining balance sheet neutrality [74][76] Question: M&A activity outlook - Management expressed a continued appetite for acquisitions, with a strong pipeline supporting ongoing investment [82][95] Question: Logistics and delivery margin initiatives - Management highlighted that the majority of margin improvements in 2022 were rate-driven, with further potential for cost efficiencies in the future [85][86]

PART I [Business](index=5&type=section&id=Item%201.%20Business) WillScot Mobile Mini is a leading North American provider of flexible workspace and portable storage solutions, focusing on modular and storage segments through leasing and Value-Added Products and Services (VAPS) - The company is a leading provider of flexible workspace and portable storage solutions with approximately **240 branch locations** across North America[16](index=16&type=chunk) - Following divestitures, the company focuses on two core North American segments: Modular Solutions and Storage Solutions[19](index=19&type=chunk) - In 2022, **13 smaller entities** were acquired for **$220.6 million** in cash, adding **14,100 storage** and **4,400 modular units**[20](index=20&type=chunk) Fleet Overview as of December 31, 2022 | Metric | Value | | :--- | :--- | | Total Units | > 364,000 | | Modular Space Units | > 154,000 | | Portable Storage Units | ~ 210,000 | | Fleet Net Book Value | $3.1 billion | | Total Relocatable Space | > 128 million sq. ft. | | Modular Units on Rent | 67% (~103,000) | | Storage Units on Rent | 84% (~176,000) | [Products and Services](index=5&type=section&id=1.1%20Products%20and%20Services) The company provides modular space and portable storage solutions, enhanced by Value-Added Products and Services (VAPS) for customization and customer value - Modular space units have an economic life often exceeding **20 years**, offering turnkey 'Ready to Work' solutions with VAPS[21](index=21&type=chunk)[22](index=22&type=chunk) - Portable storage containers have an estimated useful life of **30 years** and feature patented security systems like the Tri-Cam Locking System®[30](index=30&type=chunk)[31](index=31&type=chunk) - VAPS are a significant advantage, enhancing unit productivity and security, with successful cross-selling into the Storage segment[33](index=33&type=chunk)[57](index=57&type=chunk) [Customers and End Markets](index=8&type=section&id=1.2%20Customers%20and%20End%20Markets) Serving over **85,000 diverse customers** across **15 end markets**, the company's revenue is primarily from commercial/industrial and construction sectors Revenue by End Market (FY 2022) | End Market | Revenue Contribution | | :--- | :--- | | Commercial and Industrial | ~47% | | Construction | ~41% | | Retail and Wholesale Trade (sub-segment) | ~13% | - Customer concentration is low, with the **top 10 customers** accounting for approximately **7% of revenues** in FY 2022[44](index=44&type=chunk) - The company served over **85,000 unique customers** in 2022, ranging from multinational corporations to local businesses[45](index=45&type=chunk) [Business and Growth Strategies](index=13&type=section&id=1.3%20Business%20and%20Growth%20Strategies) Growth strategies focus on VAPS expansion, rental rate optimization, cross-selling, operational efficiency, and accretive acquisitions, supported by disciplined capital deployment - Key strategies include expanding VAPS, optimizing rental rates, cross-selling between segments, and pursuing accretive acquisitions in a fragmented market[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk)[87](index=87&type=chunk) - A new, consolidated CRM platform launched in Q1 2023 enhances customer visibility and cross-selling capabilities[62](index=62&type=chunk)[85](index=85&type=chunk) - Approximately **55% of the modular market** and **70% of the portable storage market** are served by regional competitors, indicating significant acquisition opportunities[87](index=87&type=chunk) [Human Capital and ESG](index=14&type=section&id=1.4%20Human%20Capital%20and%20ESG) The company employed approximately **4,500 people** in 2022, focusing on human capital and ESG through safety, I&D, and a circular economy model for asset reuse - Employed approximately **4,500 people** in North America as of December 31, 2022, with **88%** in branch locations[91](index=91&type=chunk) - The ESG strategy emphasizes a circular business model, with modular units reused **seven times** on average over a **20-year life**, extendable to **30 years**[118](index=118&type=chunk) - Safety performance is strong, with a Total Recordable Incident Rate (TRIR) below **1.0** in 2022[125](index=125&type=chunk) - Five Inclusiveness Resource Teams (IRTs) were launched to foster an inclusive and diverse workplace[103](index=103&type=chunk) [Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) The company faces regulatory, integration, economic, operational, and financial risks, including substantial leverage and potential limitations on Net Operating Loss (NOL) utilization - The business is subject to numerous laws and regulations, including antitrust, climate disclosure, cybersecurity, and environmental rules, where noncompliance could materially harm operations[138](index=138&type=chunk)[139](index=139&type=chunk) - Growth through acquisitions presents integration risks, including loss of key employees, undiscovered liabilities, and challenges in implementing uniform standards[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - Substantial leverage of **$3.1 billion** as of December 31, 2022, could hinder debt servicing and operations, with restrictive debt covenants limiting flexibility[208](index=208&type=chunk)[211](index=211&type=chunk) - Significant US federal and state Net Operating Loss (NOL) carryforwards of **$1.0 billion** and **$484.3 million** respectively, may be limited by ownership changes under Section 382[197](index=197&type=chunk)[198](index=198&type=chunk) [Unresolved Staff Comments](index=31&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[217](index=217&type=chunk) [Properties](index=31&type=section&id=Item%202.%20Properties) The company operates approximately **240 branch locations** across North America, with **83% leased**, and believes properties are well-maintained and suitable for growth - The company operates approximately **240 branch locations** and additional drop lots across the US, Canada, and Mexico[218](index=218&type=chunk) - Approximately **83% of branch properties** are leased, with the remaining **17% owned**[218](index=218&type=chunk) [Legal Proceedings](index=32&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, which management believes will not materially affect its financial position as of December 31, 2022 - The company is involved in various legal proceedings in the ordinary course of business, not expected to materially affect its financial condition as of December 31, 2022[221](index=221&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[222](index=222&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=33&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "WSC", with **207.95 million shares outstanding** as of December 31, 2022, and an active share repurchase program - The company's common stock is listed on the Nasdaq Capital Market under "WSC", with **207,951,682 shares outstanding** as of December 31, 2022[225](index=225&type=chunk) - A share repurchase program authorizes up to **$1.0 billion**, with **$630.8 million** remaining available as of December 31, 2022[229](index=229&type=chunk) Common Stock Repurchases in Q4 2022 | Period | Shares Purchased (thousands) | Average Price Paid per Share | | :--- | :--- | :--- | | Oct 2022 | 2,471.1 | $41.70 | | Nov 2022 | 1,325.7 | $45.98 | | Dec 2022 | 1,482.5 | $46.15 | | **Total Q4** | **5,279.3** | **$44.03** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY 2022 saw strong financial performance with **total revenues up 28.1% to $2.14 billion** and **Adjusted EBITDA up 36.1% to $883.9 million**, driven by organic growth, acquisitions, and strategic divestitures FY 2022 Key Financial Performance (Continuing Operations) | Metric | FY 2022 | Change vs FY 2021 | | :--- | :--- | :--- | | Total Revenues | $2,142.6M | +28.1% | | Leasing Revenue | $1,621.7M | +29.5% | | Income from Continuing Operations | $276.3M | +140.5% | | Adjusted EBITDA | $883.9M | +36.1% | | Free Cash Flow | $330.3M | +9.0% | - Key drivers for 2022 performance included a **3.5% increase** in average modular units on rent and a **24.9% increase** in average portable storage units on rent, with rental rates increasing **18.3%** for modular and **24.7%** for storage[242](index=242&type=chunk) - The company completed the sale of its Tank and Pump segment and agreed to sell its UK Storage Solutions segment, focusing on core North American businesses[235](index=235&type=chunk)[236](index=236&type=chunk) - Capital deployed in 2022 included **$220.6 million** for **13 acquisitions** and **$756.9 million** for common stock and equivalent repurchases[240](index=240&type=chunk)[248](index=248&type=chunk) [Consolidated Results of Operations](index=41&type=section&id=7.1%20Consolidated%20Results%20of%20Operations) In 2022, total revenues increased **28.1% to $2.14 billion**, gross profit grew **34.4% to $1.14 billion**, and net income from continuing operations rose to **$276.3 million** Consolidated Results of Operations (in thousands) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Total revenues | $2,142,623 | $1,672,980 | | Gross profit | $1,135,482 | $844,703 | | Operating income | $511,482 | $300,377 | | Income from continuing operations | $276,341 | $114,895 | - Revenue increase was driven by a **15.7% increase** in total average units on rent and improved pricing, with modular rates up **18.3%** and portable storage rates up **24.7%** year-over-year[282](index=282&type=chunk)[283](index=283&type=chunk) - SG&A expense increased **22.2% to $567.2 million**, driven by higher employee costs, legal/professional fees, and stock compensation, despite decreased integration costs[286](index=286&type=chunk) [Business Segments](index=46&type=section&id=7.2%20Business%20Segments) In 2022, the Modular segment revenue grew **19.5% to $1.39 billion**, and the Storage segment revenue grew **47.6% to $750.8 million**, both driven by strong rental rate increases Segment Performance - Year Ended Dec 31, 2022 | Segment | Revenue (in millions) | YoY Change | Adjusted EBITDA (in millions) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Modular | $1,391.8 | +19.5% | $529.1 | +25.1% | | Storage | $750.8 | +47.6% | $354.8 | +56.6% | - Modular segment growth was primarily driven by a **$148 increase** (**+18.3%**) in average monthly rental rate to **$957**[242](index=242&type=chunk)[319](index=319&type=chunk) - Storage segment growth was driven by a **31.6% increase** in average units on rent and a **23.9% increase** in average monthly rental rate to **$192**[242](index=242&type=chunk)[327](index=327&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=7.3%20Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by **$744.7 million** in net cash from operations and **$1.0 billion** available under its ABL Facility, with total debt at **$3.1 billion** Cash Flow Summary (in thousands) | Cash Flow | 2022 | 2021 | | :--- | :--- | :--- | | Net cash from operating activities | $744,658 | $539,902 | | Net cash from investing activities | $(309,333) | $(384,047) | | Net cash from financing activities | $(429,368) | $(167,887) | - As of December 31, 2022, the company had **$1.0 billion** of available borrowing capacity under its ABL Facility[357](index=357&type=chunk) - Material cash requirements include debt service on **$3.1 billion** of total debt and operating lease obligations of **$258.5 million**[368](index=368&type=chunk)[369](index=369&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk from its **$2.0 billion ABL Facility**, mitigated by **$750 million** in interest rate swaps, and foreign currency risk from Canadian and Mexican operations - The company is exposed to interest rate risk from its ABL Facility, with **$2.0 billion** outstanding at December 31, 2022; a **100 basis point increase** would raise annual interest expense by approximately **$16.3 million**[402](index=402&type=chunk) - In January 2023, interest rate swaps on a notional amount of **$750.0 million** were executed to hedge ABL Facility variable rates, fixing the rate at **3.44%** for that portion[403](index=403&type=chunk)[649](index=649&type=chunk) - Foreign currency risk exists from Canadian and Mexican operations, which generated approximately **7% of consolidated net revenues** in 2022, without formal hedging arrangements[183](index=183&type=chunk)[404](index=404&type=chunk)[405](index=405&type=chunk) [Financial Statements and Supplementary Data](index=62&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for FY 2022, with an unqualified opinion from Ernst & Young LLP on both financial statements and internal controls [Report of Independent Registered Public Accounting Firm](index=62&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued an unqualified opinion on the financial statements, identifying the allowance for credit losses as a critical audit matter - Ernst & Young LLP issued an unqualified opinion, affirming fair presentation of financial statements in conformity with U.S. GAAP[411](index=411&type=chunk) - The 'Allowance for Credit Losses' was identified as a Critical Audit Matter due to subjective judgments in assessing historical write-off experience and economic conditions[415](index=415&type=chunk)[417](index=417&type=chunk) [Consolidated Financial Statements](index=64&type=section&id=Consolidated%20Financial%20Statements) As of December 31, 2022, total assets were **$5.83 billion** and total liabilities **$4.26 billion**, with FY 2022 revenue at **$2.14 billion** and net income at **$339.5 million** Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | $5,827,651 | $5,773,599 | | Rental equipment, net | $3,077,287 | $2,777,800 | | Goodwill | $1,011,429 | $1,013,601 | | Total Liabilities | $4,262,351 | $3,776,836 | | Long-term debt | $3,063,042 | $2,671,831 | | Total Shareholders' Equity | $1,565,300 | $1,996,763 | Consolidated Statement of Operations Highlights (in thousands) | Account | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total revenues | $2,142,623 | $1,672,980 | $1,272,991 | | Net income | $339,540 | $160,144 | $74,127 | | Diluted EPS | $1.53 | $0.69 | $0.25 | [Notes to the Consolidated Financial Statements](index=70&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Notes detail divestitures, **$220.6 million** in acquisitions, revenue breakdown, **$3.1 billion** debt structure, **$756.9 million** share repurchases, and segment performance - The company completed the sale of its Tank and Pump segment and agreed to sell its UK Storage Solutions segment, both reported as discontinued operations[513](index=513&type=chunk)[515](index=515&type=chunk) - In 2022, **13 smaller entities** were acquired for **$220.6 million** in cash, adding approximately **14,100 storage** and **4,400 modular units**[511](index=511&type=chunk) - As of December 31, 2022, total debt was **$3.1 billion**, primarily comprising a **$2.0 billion** ABL Facility, **$526.5 million** in 6.125% Secured Notes due 2025, and **$500 million** in 4.625% Secured Notes due 2028[208](index=208&type=chunk)[551](index=551&type=chunk) - During 2022, the company repurchased **19,854,424 shares** of common stock and equivalents for **$756.9 million** under its share repurchase program[581](index=581&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=109&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting principles or financial disclosure - None[650](index=650&type=chunk) [Controls and Procedures](index=109&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls and internal control over financial reporting (ICFR) were effective as of December 31, 2022, with an unqualified auditor opinion - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of December 31, 2022[651](index=651&type=chunk) - Management assessed internal control over financial reporting (ICFR) as effective as of December 31, 2022, with Ernst & Young LLP issuing an unqualified opinion[654](index=654&type=chunk)[655](index=655&type=chunk)[660](index=660&type=chunk) [Other Information](index=111&type=section&id=Item%209B.%20Other%20Information) No other information is reported for this item - None[667](index=667&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=111&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2023 proxy statement - Required information is incorporated by reference from the registrant's definitive proxy statement for the 2023 annual meeting of stockholders[668](index=668&type=chunk) [Executive Compensation](index=111&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement for the 2023 annual meeting - Required information is incorporated by reference from the registrant's definitive proxy statement for the 2023 annual meeting of stockholders[669](index=669&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=111&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference, with **3,344,121 securities** issuable under equity plans at a **$13.60 weighted-average exercise price** as of December 31, 2022 Equity Compensation Plan Information as of December 31, 2022 | Plan Category | Securities to be issued upon exercise | Weighted-average exercise price | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Approved by security holders | 3,344,121 | $13.60 | 3,999,228 | | Not approved by security holders | N/A | N/A | N/A | | **Total** | **3,344,121** | **$13.60** | **3,999,228** | - Securities to be issued include **0.5 million stock options**, **0.8 million RSUs**, **2.0 million performance-based RSUs**, and **0.04 million RSAs**[673](index=673&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=112&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on director independence and related party transactions is incorporated by reference from the 2023 proxy statement - Required information is incorporated by reference from the registrant's definitive proxy statement for the 2023 annual meeting of stockholders[676](index=676&type=chunk) [Principal Accountant Fees and Services](index=112&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the 2023 proxy statement - Required information is incorporated by reference from the registrant's definitive proxy statement for the 2023 annual meeting of stockholders[677](index=677&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=113&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Form 10-K, including consolidated financial statements, notes, and an index of exhibits - This section contains the list of consolidated financial statements filed with the report[680](index=680&type=chunk) - All financial statement schedules were omitted as the required information is either not applicable or included elsewhere[681](index=681&type=chunk) - A detailed Exhibit Index lists all filed documents, including governance, debt, employment, and certification agreements[683](index=683&type=chunk)[685](index=685&type=chunk)

| --- | --- | |----------------------------------|-------| | | | | Quarterly Investor | | | Presentation Fourth Quarter 2022 | | | | | | | | | | | Safe Harbor Forward Looking Statements This presentation contains forward-looking statements (including the guidance/outlook contained herein) within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. The words "estimates," "expects," "anticipates," "believes," "forecasts," ...

| --- | --- | --- | --- | |--------------------------------------|-------|-------|-------| | | | | | | NOVEMBER 8, 2021 | | | | | | | | | | | | | | | 2021 Investor Day | | | | | WILLSCOT ▪ MOBILE MINI HOLDINGS CORP | | | | | WILLSCOT | | | | Safe Harbor Forward Looking Statements This presentation contains forward-looking statements (including the guidance/outlook contained herein) within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act ...

Willscot Mobile Mini Holdings Corp (NASDAQ:WSC) Q3 2022 Earnings Conference Call November 3, 2022 10:00 AM ET Company Participants Nick Girardi - Director, Treasury & IR Bradley Soultz - CEO & Director Timothy Boswell - President & CFO Conference Call Participants Andrew Wittmann - Robert W. Baird & Co. Scott Schneeberger - Oppenheimer John Kennedy - Barclays Bank Stanley Elliott - Stifel, Nicolaus & Company Brent Thielman - D.A. Davidson & Co. Sean Wondrack - Deutsche Bank Faiza Alwy - Deutsche Bank Steven ...