WillScot Mobile Mini (US:WSC)2022-02-25 16:19Company Operations - WillScot Mobile Mini operates approximately 275 branch locations across the US, Canada, Mexico, and the UK, providing flexible workspace and portable storage solutions[17]. - As of December 31, 2021, the company had approximately 390,000 total units with a fleet net book value of $3.1 billion, including over 162,000 modular space units and over 213,000 portable storage units[42]. - Approximately 68% of modular space units and 84% of portable storage units were on rent as of December 31, 2021, with tank and pump utilization at 73.5%[42]. - The company has established a strong logistics and service infrastructure, enabling same-day delivery capabilities and precise scheduling of installations[61]. - The company has a hybrid logistics and service infrastructure that enhances its delivery, installation, and removal capabilities, differentiating it from competitors[33]. Financial Performance - For the year ended December 31, 2021, over 90% of new lease orders were on standard lease agreements, resulting in a highly predictable recurring revenue stream[37]. - The average lease duration exceeded 31 months as of December 31, 2021, contributing to predictable cash flow and strong operating income[75]. - The company generated an internal rate of return (IRR) of over 25% for modular units and approximately 30% for portable storage containers, highlighting attractive economic returns[71][72]. - The company reported stable lease revenue streams, with a long-term upward trajectory due to diversification in end markets and long lease durations[149]. - Free cash flow generation has accelerated, with expectations to continue this trend while reducing leverage and returning capital to shareholders[95]. Customer Base and Market Position - The company served over 85,000 unique customers in 2021, reflecting a diverse customer base across various end markets[48]. - The top 10 customers accounted for approximately 5% of revenues, indicating low customer concentration and significant project diversification[46]. - For the year ended December 31, 2021, the commercial and industrial segment and construction segment accounted for approximately 47% and 40% of total revenues, respectively[45]. - The company estimates an organic revenue growth opportunity of over $150 million in its North American Modular segment by improving value-added product penetration[89]. - The merger of WillScot and Mobile Mini created a leading business services provider with an 80% end-market overlap and 40% customer overlap, enhancing cross-selling opportunities[91]. Product and Service Offerings - The company offers a range of value-added products and services (VAPS) to enhance customer experience and drive additional revenue[32]. - Modular space units have an estimated useful life exceeding 20 years, providing a competitive advantage in profitability[22]. - WillScot Mobile Mini's portable storage containers have an estimated useful life of 30 years, with average residual values exceeding 50%[29]. - Modular space units offer advantages such as quick installation, flexibility, and cost-effectiveness compared to traditional fixed structures[80]. - The portable storage market is also highly fragmented, primarily consisting of local providers, with demand driven by changing business needs[81][82]. Growth and Development - The company has achieved 17 consecutive quarters of double-digit rate growth in its North American Modular segment as of December 31, 2021[90]. - The company acquired 15,700 storage units and 5,800 modular units from smaller entities in 2021, aiming for further scale efficiencies[94]. - The company has organized a foundational leadership development program since 2015, with over 500 team members participating[105]. - The company launched five Inclusiveness Resource Teams (IRTs) in 2021 to promote diversity and inclusion within the workplace[107]. - The company’s new driver apprentice program launched in 2021 aims to develop employees into Commercial Driver's License (CDL) Class A drivers[105]. Risks and Challenges - Economic downturns in local or global markets could reduce demand for the company's products and services, impacting financial results[162]. - The company faces operational risks related to public health crises, such as COVID-19, which could disrupt supply chains and customer demand[167]. - Trade policies, including tariffs on imports, may increase costs for the company, potentially affecting pricing and profitability[177]. - The company operates in a highly competitive environment, which may lead to pricing pressures and reduced market share if not managed properly[178]. - Acquisitions carry inherent risks, and future acquisitions may adversely affect the company's business and financial condition if not managed effectively[161]. Compliance and Regulations - Compliance with various laws and regulations, including those related to government contracts, may increase costs and expose the company to liability if not adhered to[197]. - The company is subject to various anti-corruption laws, including the FCPA, which could result in severe penalties if violated[204]. - The company faces inherent risks of liability under environmental laws, which could lead to material costs for compliance or remediation in the future[209]. - Changes in state building codes may adversely impact the ability to remarket buildings, potentially affecting business and financial condition[180]. - The company must integrate technology infrastructure effectively following acquisitions to avoid operational disruptions[161]. Employee and Operational Metrics - As of December 31, 2021, the company employed approximately 4,700 people worldwide, with a manageable involuntary turnover rate of 23%[96][101]. - The Total Recordable Incident Rate (TRIR) is 0.82 incidents per labor hour, significantly lower than the construction industry average of 2.5[123]. - The company employs high deductible healthcare plans, covering approximately 70% of employee premiums and seeding health savings accounts (HSA) with 35% to 50% of deductibles[111]. - Labor relations and disruptions could increase costs and impact operations, particularly in unionized environments[191]. - The company has approximately $1,178.8 million in goodwill and $460.7 million in intangible assets, which represent about 20.4% and 8.0% of total assets, respectively[194].