WillScot Mobile Mini (WSC) - 2024 Q4 - Annual Report

Lease Agreements and Revenue - For the year ended December 31, 2024, over 90% of new lease orders were on standard lease agreements, pre-negotiated master leases, or national account agreements[43]. - The average effective duration of the consolidated lease portfolio for modular space and portable storage units was approximately 41 months, indicating predictable lease revenue[44]. - The average minimum contractual lease term at the time of delivery for modular space units was 10 months, with customers consistently extending their leases[45]. - The average effective duration of the lease portfolio for storage containers on rent was over 43 months as of December 31, 2024[46]. - The long-term nature of leases, with average lease durations of approximately 41 months, produces strong operating income and predictable cash flow[77]. - The average lease duration for the company's fleet is approximately three years, creating recurring opportunities for price increases[89]. Company Operations and Market Presence - The company operates approximately 260 branch locations and additional drop lots across the US, Canada, and Mexico, servicing diverse end markets[17]. - As of December 31, 2024, the company had over 362,000 total units, with a fleet net book value of $3.4 billion and approximately 128 million square feet of relocatable commercial space[48]. - The commercial and industrial market and the construction and infrastructure market accounted for approximately 43% and 42% of revenues, respectively, for the year ended December 31, 2024[51]. - The company generated approximately 94% of its revenue from the US, 5% from Canada, and 1% from Mexico for the year ended December 31, 2024[171]. - The company operates in the approximately$ 2 trillion North American market for commercial space, with a total addressable market estimated at $20 billion[79]. Acquisitions and Growth Strategy - The company executed 36 acquisitions totaling approximately$ 4.7 billion in total enterprise value since its public listing in 2017, enhancing its revenue and cost synergies[71]. - In 2023, the company acquired a US national provider of cold storage solutions and a US national provider of premium large clearspan structures, establishing market leadership in these segments[86]. - The company plans to continue pursuing acquisitions to expand geographic reach and capabilities while optimizing returns on capital[88]. - The company intends to expand operations into new geographic markets and product lines, which may require significant financial resources and management attention[163]. Product Offerings and Innovations - The company introduced new Value-Added Products (VAPS) including solar panels and perimeter solutions, expanding its product portfolio[19]. - The company achieved new product introductions in 2024, including proprietary solar racking systems and perimeter solutions through acquisitions[87]. - Modular space units can range from standalone portable units as small as 24 square feet to large complex units exceeding 40,000 square feet, showcasing versatility in offerings[20]. - The company’s blast-resistant modules are designed for quick deployment in hazardous industries, enhancing worksite safety[27]. Financial Performance and Cash Flow - Free Cash Flow generation has accelerated rapidly, with expectations to continue this trend and return capital to shareholders through share repurchases and dividends[94]. - The company targets and realizes unit-level internal rates of return (IRR) in excess of 25% when evaluating new modular units and storage containers[73]. - The company maintains a disciplined focus on return on capital, assessing opportunities for organic growth versus acquisitions[93]. Employee Engagement and Development - Approximately 90% of employees participate in the 401(k) retirement savings program, with the company matching $15.1 million in contributions in 2024[102]. - The company employs around 4,500 people across the US, Canada, Mexico, and India, with 72% working in branch locations[95]. - In 2024, employees completed over 35,000 hours of training across various courses, enhancing compliance, safety, and job-related skills[106]. - The company maintains a library of over 6,000 courses in its learning and development system, supporting continuous employee growth[106]. - The company has established Inclusiveness Resource Teams (IRTs) to promote diversity and inclusion within the workplace[105]. - The company has a foundational leadership development program that enrolls an average of 70 participants annually, fostering leadership skills[107]. Safety and Compliance - The Total Recordable Incident Rate (TRIR) for 2024 was 0.85, indicating a strong commitment to employee safety and a goal of creating a zero-harm culture[112]. - The company has implemented annual compliance training to maintain high standards of professionalism and integrity, including cybersecurity and data privacy[109]. Technology and Operational Efficiency - Investments in technology, including a consolidated CRM platform and upgraded logistics systems, are expected to drive operational efficiencies and improve customer experience[63]. - The company’s logistics and service capabilities are considered unrivaled in the industry, enhancing its value proposition to customers[42]. - The company has implemented a consolidated logistics platform and route optimization processes to minimize costs and emissions in 2024[91]. Risks and Challenges - The company has experienced a decline in new contract activations and units on rent in 2024 due to a decrease in non-residential construction square foot starts in the US[143]. - The company may face significant competition in the modular space and portable storage industries, which could result in pricing pressure and loss of market share[149]. - The company faces risks related to labor shortages and increased labor costs, which could adversely affect its ability to control expenses and efficiently conduct operations[156]. - The company is subject to evolving public disclosure and financial reporting regulations, which could increase compliance costs and risks of noncompliance[168]. - The company may incur unforeseen challenges and costs related to the integration of acquisitions, which could affect operational efficiency[141]. - The company is partly self-insured for various risks, and significant claims or a rise in insurance costs could adversely impact its financial condition[164]. - The company’s operations could be adversely affected by natural disasters or other business disruptions, impacting revenue and increasing costs[160]. - The company may incur impairment charges on goodwill and intangible assets if fair value assessments indicate a decline, which could adversely impact operating results[184]. Financial Obligations and Debt - Total indebtedness as of December 31, 2024, was$ 3.7 billion, including $1.6 billion under the ABL Facility and various secured notes totaling$ 2.2 billion[196]. - The company's ability to meet debt service obligations is contingent on future operating and financial performance, which may be adversely affected by various uncontrollable factors[197]. - The credit facility requires compliance with specified financial maintenance tests, and failure to meet these tests could result in immediate repayment demands from lenders[202]. - Covenants in the credit agreement impose restrictions on operational flexibility, including limitations on incurring additional debt and making certain payments[200]. Cybersecurity and Risk Management - The company has established a comprehensive cybersecurity risk management framework to protect stakeholders and ensure operational integrity[206]. - Cybersecurity threats could materially impact the company's business strategy and financial condition, prompting regular assessments and action plans[213]. - The company engages third-party experts to enhance cybersecurity processes and reduce risks associated with evolving threats[211].