Form 8-K/A MOBILE MINI INC For: Dec 10

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 8-K/A

(Amendment No. 2)

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): December 10, 2014

 

 

 

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		1-12804		86-0748362
(State or Other Jurisdiction of Incorporation or Organization)		(Commission File Number)		(IRS Employer Identification Number)

 

 

4646 E. Van Buren Street, Suite 400

Phoenix, Arizona 85008

(Address of principal executive offices) (Zip Code)

(480) 894-6311

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14-d2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13-4e(c))

 

 

 

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EXPLANATORY NOTE

This Amendment No. 2 on Form 8-K/A to the Company’s Periodic Report on Form 8-K filed by Mobile Mini, Inc. (the “Company”) with the Securities and Exchange Commission (the “SEC”) on December 10, 2014, as amended by Amendment No. 1 on Form 8-K/A filed with the SEC on February 20, 2014 (together, the “Original Filing”), is being filed to amend the pro forma financial information filed as Exhibit 99.3 to Amendment No. 1 on Form 8-K/A (the “Original Pro Forma Information”), which was filed in connection with the completion, on December 10, 2014, of the previously announced acquisition of Gulf Tanks Holdings, Inc. by the Company.

Approximately $9.8 million originally classified in the Original Pro Forma Information as acquisition expense has been classified in the amended pro forma financial information filed as Exhibit 99.1 herewith (the “Amended Pro Forma Information”), as part of the purchase price for the Gulf Tanks Holdings, Inc. acquisition. As a result, pro forma retained earnings was decreased by $9.8 million ($6.0 million net of tax) and the purchase price has been increased by $9.8 million.

Additionally, certain of the remaining pro forma transaction costs are not deductible for tax purposes. In the Original Pro Forma Information the statutory rate was applied to all transaction expenses. The Amended Pro Forma Information applies the statutory rate to only those expenses that are tax deductible, resulting in a reduction to retained earnings and an increase to our deferred income taxes (liability) of $0.7 million.

Captions on the pro forma balance sheet included in the Original Pro Forma Information that were directly affected are as follows:

 

Description		Goodwill				Deferred Income Taxes (liability)				Retained Earnings				Pro Forma Adjustment
Increase in purchase price		$	6,555			$	(3,229	)		$	—			4(g)
Decrease in transaction expenses			—				3,767				6,017			4(k)
Adjustment for non-deductibility of certain transaction expenses			—				668				(668	)		4(k)
Total change to pro forma adjustments		$	6,555			$	1,206			$	5,349

Subtotals and totals affected by this change to the Original Pro Forma Information were also amended accordingly, along with Notes 1 and 3 included therein. No changes were made to the pro forma condensed combined statements of operations for the nine months ended September 30, 2014 or the twelve months ended December 31, 2014 included in the Original Pro Forma Information.

Except as described above, no other amendments have been made to the Original Pro Forma Information. This Amendment No. 2 continues to speak as of the dates of the Original Filing, and the Company has not updated the disclosure contained therein to reflect events that have occurred since the dates of the Original Filing. Accordingly, this Amendment No. 2 should be read in conjunction with the Company’s other filings made with the SEC subsequent to the filing of the Original Filing, including any amendments to those filings.

 

Item 9.01.

Financial Statements and Exhibits

(b) Pro Forma Financial Information

The amended unaudited pro forma condensed combined financial data as of and for the nine months ended September 30, 2014 and for the twelve months ended December 31, 2013, with the related notes thereto are filed as Exhibit 99.1 and are incorporated herein by reference.

(d) The following exhibits are filed with this Current Report on Form 8-K/A (Amendment No. 2):

 

Exhibit No.		Description
99.1		The amended unaudited pro forma condensed combined financial data reflecting the acquisition of Gulf Tanks Holdings, Inc. by Mobile Mini, Inc. as of September 30, 2014, and for the nine months ended September 30, 2014 and the twelve months ended December 31, 2013, with the related notes thereto.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				MOBILE MINI, INC.
Dated: February 27, 2015				/s/ Christopher J. Miner
				Name:		Christopher J. Miner
				Title:		Senior Vice President and General Counsel

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA RELATING TO THE

ACQUISITION OF GULF TANKS HOLDINGS BY MOBILE MINI, INC.

The following unaudited pro forma condensed combined financial statements combine Mobile Mini, Inc.’s (“Mobile Mini”, or the “Company”) historical consolidated financial information with the consolidated financial statements of Gulf Tanks Holdings, Inc., (“GTH”). The unaudited pro forma condensed combined balance sheet at September 30, 2014, gives effect to the acquisition of GTH as if the acquisition had been consummated on that date. The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2014 and the twelve months ended December 31, 2013 gives effect to the acquisition of GTH as if the acquisition had been consummated at January 1, 2013. The unaudited pro forma condensed combined statements were prepared using the acquisition method of accounting.

The Company’s historical financial information was derived from its audited consolidated financial statements for the year ended December 31, 2013 (as filed on Form 10-K with the Securities and Exchange Commission on February 14, 2014) and the Company’s unaudited consolidated financial statements for the nine months ended September 30, 2014 (as filed on a Form 10-Q with the Securities and Exchange Commission on October 23, 2014). The Company’s historical financial statements used in preparing the unaudited pro forma financial data are summarized and should be read in conjunction with its historical financial statements and risk factors, all of which are included in the filings with the Securities and Exchange Commission noted above.

GTH’s historical financial information was derived from its consolidated audited financial statements for the year ended December 31, 2013 and its unaudited condensed consolidated financial statements as of and for the nine months ended September 30, 2014. GTH’s historical financial statements used in preparing the unaudited pro forma financial data are summarized and should be read in conjunction with its historical financial statements and notes thereto contained herein.

The unaudited pro forma adjustments, which are based upon available information and upon certain assumptions that the Company believes are reasonable, are described in the accompanying notes. The Company is providing the unaudited pro forma condensed combined financial information for illustrative purposes only. The fair values of assets purchased and liabilities assumed are still subject to uncertainty, as substantial amounts of GTH data must be thoroughly analyzed before more precise valuations can be determined. In addition, lease fleet and property, plant and equipment values were estimated based on assumed condition. If the assumptions prove to be inaccurate, preliminary valuations may change. Increases or decreases in the estimated fair values of the net assets may change the amount of the purchase price allocated to goodwill and other assets and liabilities, and may impact Mobile Mini’s statement of operations in future periods. The companies may have performed differently had they been combined during the periods presented. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies actually been combined during the periods presented or the future results that the combined companies will experience. The unaudited pro forma condensed combined statements of operations do not give effect to any cost savings or operating synergies expected to result from the acquisition or the costs to achieve such cost savings or operating synergies.

 

1

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Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2014

(In thousands)

 

		MMI Historical (A)				GTH Historical				Reclassification Adjustments (1)				GTH Historical Recast (B)				Pro Forma Adjustments (2) (C)				Pro Forma Notes				Pro Forma Combined (A+B+C)
ASSETS
Cash and cash equivalents		$	1,612			$	1,638			$	—			$	1,638			$	(1,638	)						$	1,612
Receivables, net of allowance for doubtful accounts			60,951				25,013				—				25,013				—								85,964
Inventories			17,584				686				—				686				—								18,270
Lease fleet, net			974,035				103,209				(5,479	)			97,730				22,836				4	(a)			1,094,601
Property, plant and equipment, net			95,322				2,624				5,479				8,103				6,818				4	(b)			110,243
Deposits and prepaid expenses			7,108				1,357				—				1,357				—								8,465
Deferred financing costs, net and other assets			8,846				6,942				—				6,942				(6,942	)			4	(c)			8,846
Intangibles, net			3,054				30,895				—				30,895				(30,895	)			4	(d)			78,954
																			75,900				4	(e)
Goodwill			525,623				117,215				—				117,215				(117,215	)			4	(f)			709,303
																			183,680				4	(g)
Total assets		$	1,694,135			$	289,579			$	—			$	289,579			$	132,544							$	2,116,258
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts payable		$	23,841			$	9,583			$	129			$	9,712			$	—							$	33,553
Accrued liabilities			61,936				3,610				(129	)			3,481				—								65,417
Lines of credit			307,388				44,705				—				44,705				(44,705	)			4	(h)			721,524
																			414,136				4	(i)
Obligations under capital leases			18,926				1,171				—				1,171				—								20,097
Other long-term debt			200,000				190,559				—				190,559				(190,559	)			4	(h)			200,000
Deferred income taxes			226,500				16,271				—				16,271				(17,219	)			4	(j)			224,130
																			(1,422	)			4	(k)
Total liabilities			838,591				265,899				—				265,899				160,231								1,264,721
Stockholders’ equity:
Common stock			489				6				—				6				(6	)			4	(l)			489
Additional paid-in capital			564,531				69,312				—				69,312				(69,312	)			4	(l)			564,531
Retained earnings (accumulated deficit)			375,421				(45,638	)			—				(45,638	)			45,638				4	(l)			371,414
																			(4,007	)			4	(k)
Accumulated other comprehensive loss			(19,761	)			—				—				—				—								(19,761	)
Treasury stock			(65,136	)			—				—				—				—								(65,136	)
Total stockholders’ equity			855,544				23,680				—				23,680				(27,687	)							851,537
Total liabilities and stockholders’ equity		$	1,694,135			$	289,579			$	—			$	289,579			$	132,544							$	2,116,258

 

(1)

GTH historical is based on financial statement captions reflected in GTH’s historical financial statements. Reclassification adjustments represent reclassifications to conform to Mobile Mini’s financial statement presentation. GTH historical recast represents the sum of GTH historical and reclassification adjustments.

(2)	See Note 4 for more information regarding pro forma adjustments.

The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.

 

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Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2014

(In thousands, except per share data)

 

		MMI Historical (A)				GTH Historical				Reclassification Adjustments (1)				GTH Historical Recast (B)				Pro Forma Adjustments (2) (C)				Pro Forma Notes				Pro Forma Combined (A+B+C)
Revenues:
Leasing		$	296,919			$	52,731			$	15,244			$	67,975			$	—							$	364,894
Sales			23,761				3,877				399				4,276				—								28,037
Service			—				23,631				(23,631	)			—				—								—
Other			1,579				—				10,331				10,331				—								11,910
Total revenues			322,259				80,239				2,343				82,582				—								404,841
Costs and expenses:
Cost of sales			16,131				2,844				(935	)			1,909				1,884				5	(a)			19,924
Leasing, selling and general expenses			204,394				48,202				1,344				49,546				50				5	(b)			253,709
																			(81	)			5	(c)
																			(200	)			5	(d)
Restructuring expenses			2,909				—				—				—				—								2,909
Asset impairment charge, net			557				—				—				—				—								557
Depreciation and amortization			27,920				22,340				—				22,340				(3,205	)			5	(e)			48,135
																			1,080				5	(f)
Gain on sale of assets			—				(1,934	)			1,934				—				—								—
Total costs and expenses			251,911				71,452				2,343				73,795				(472	)							325,234
Income from operations			70,348				8,787				—				8,787				472								79,607
Other income (expense):
Interest expense			(21,191	)			(16,380	)			—				(16,380	)			16,312				5	(d)			(28,068	)
																			(6,809	)			5	(g)
Foreign currency exchange			(1	)			—				—				—				—								(1	)
Income from continuing operations before income tax provision			49,156				(7,593	)			—				(7,593	)			9,975								51,538
Provision for income taxes			17,633				1,464				—				1,464				3,840				5	(h)			22,937
Income from continuing operations		$	31,523			$	(9,057	)		$	—			$	(9,057	)		$	6,135							$	28,601
Earnings per share:
Income from continuing operations - Basic		$	0.68																							$	0.62
Income from continuing operations - Diluted			0.67																								0.61
Weighted average number of common and common share equivalents outstanding:
Basic			46,128																								46,128
Diluted			46,846																								46,846

 

(1)

GTH historical is based on financial statement captions reflected in GTH’s historical financial statements. Reclassification adjustments represent reclassifications to conform to Mobile Mini’s financial statement presentation. GTH historical recast represents the sum of GTH historical and reclassification adjustments.

(2)	See Note 5 for more information regarding pro forma adjustments.

The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.

 

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Unaudited Pro Forma Condensed Combined Statement of Operations

For the Twelve Months Ended December 31, 2013

(In thousands, except per share data)

 

		MMI Historical (A)				GTH Historical				Reclassification Adjustments (1)				GTH Historical Recast (B)				Pro Forma Adjustments (2) (C)				Pro Forma Notes				Pro Forma Combined (A+B+C)
Revenues:
Leasing		$	366,286			$	62,901			$	17,311			$	80,212			$	—							$	446,498
Sales			38,051				2,713				859				3,572				—								41,623
Service			—				24,276				(24,276	)			—				—								—
Other			2,149				—				8,273				8,273				—								10,422
Total revenues			406,486				89,890				2,167				92,057				—								498,543
Costs and expenses:
Cost of sales			25,413				2,000				(316	)			1,684				1,593				5	(a)			28,690
Leasing, selling and general expenses			237,567				57,059				776				57,835				114				5	(b)			295,187
																			(329	)			5	(d)
Restructuring expenses			2,402				—				—				—				—								2,402
Asset impairment charge, net			38,705				—				—				—				—								38,705
Depreciation and amortization			35,432				26,272				—				26,272				(3,799	)			5	(e)			59,490
																			1,585				5	(f)
Gain on sale of assets			—				(1,707	)			1,707				—				—								—
Total costs and expenses			339,519				83,624				2,167				85,791				(836	)							424,474
Income from operations			66,967				6,266				—				6,266				836								74,069
Other income (expense):
Interest income			1				—				—				—				—								1
Interest expense			(29,467	)			(19,679	)			—				(19,679	)			19,553				5	(d)			(38,671	)
																			(9,078	)			5	(g)
Foreign currency exchange			(2	)			—				—				—				—								(2	)
Income from continuing operations before income tax provision			37,499				(13,413	)			—				(13,413	)			11,311								35,397
Provision (benefit) for income taxes			12,275				(3,081	)			—				(3,081	)			4,355				5	(h)			13,549
Income from continuing operations		$	25,224			$	(10,332	)		$	—			$	(10,332	)		$	6,956							$	21,848
Earnings per share:
Income from continuing operations - Basic		$	0.55																							$	0.48
Income from continuing operations - Diluted			0.55																								0.47
Weighted average number of common and common share equivalents outstanding:
Basic			45,481																								45,481
Diluted			46,096																								46,096

 

(1)

GTH historical is based on financial statement captions reflected in GTH’s historical financial statements. Reclassification adjustments represent reclassifications to conform to Mobile Mini’s financial statement presentation. GTH historical recast represents the sum of GTH historical and reclassification adjustments.

(2)	See Note 5 for more information regarding pro forma adjustments.

The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

(1)	Description of the transaction and basis of presentation

Description of the transaction

On December 10, 2014 Mobile Mini acquired all of the outstanding equity interests of Gulf Tanks Holdings, Inc., a Delaware corporation, for approximately $410 million, pursuant to the terms of a Stock Purchase Agreement entered into with the stockholders of GTH on November 13, 2014.

Mobile Mini, GTH and GTH’s stockholders have each made customary representations, warranties and covenants in the Stock Purchase Agreement. The parties have also agreed to provide customary indemnities, and Mobile Mini will pay a portion of the purchase price into escrow to secure the indemnification obligations of GTH’s stockholders, which are subject to customary limitations.

Basis of presentation

The unaudited pro forma condensed combined financial statements have been prepared based on the Company’s historical financial information and the historical financial information of GTH giving effect to the acquisition and related adjustments described in these notes including certain reclassifications to the historical financial statements of GTH to conform to the Company’s financial statement presentation. Further review of GTH’s accounting policies may identify additional differences between the accounting policies of the two companies that, when conformed, could have a material impact on the financial statements of the combined company. At this time, the Company is not aware of any differences that would have a material impact on the financial statements of the combined company that are not reflected in the pro forma reclassification adjustments.

The unaudited pro forma condensed combined financial statements are not necessarily indicative of the result of operations that would have been achieved had the acquisition actually taken place at the dates indicated and do not purport to be indicative of future financial position or operating results.

 

(2)	Purchase accounting

The acquisition of GTH is being accounted for as a business acquisition using the acquisition method of accounting in accordance with ASC 805, Business Combinations, whereby the assets acquired and liabilities assumed were recognized based on their estimated fair values on the acquisition date. Fair value measurements have been applied based on assumptions that market participants would use in the pricing of the asset or liability.

The fair values of assets acquired and liabilities assumed included in the accompanying unaudited pro forma condensed combined financial statements are based on a preliminary evaluation of their fair value and may change when the final valuation is completed. Upon completion of purchase accounting, the Company may make additional adjustments, and the valuations for the assets acquired and liabilities assumed could change from those used in the pro forma condensed combined consolidated financial statements.

The unaudited pro forma adjustments reflect certain assumptions that Mobile Mini believes are reasonable, which are described herein. Pro forma adjustments have been included only to the extent appropriate information is known and readily available, factually supportable and directly attributable to the combination.

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION (Continued)

 

(3)	Purchase consideration

The components of the purchase price and net assets acquired, are as follows:

 

		(In thousands)
Purchase Price, net of cash acquired:
Cash		$	410,345
Cash acquired			(1,638	)
Total		$	408,707
Net Assets Acquired:
Lease fleet		$	120,566
Property, plant and equipment			14,921
Intangible assets (1):
Customer relationships			69,200
Trade names/trademarks			5,200
Non-compete agreements			1,500
Goodwill (2)			183,680
Other assets			27,056
Deferred tax asset, net			948
Other liabilities			(14,364	)
Total		$	408,707

 

 

(1)	The following table reflects the estimated fair values and useful lives of intangible assets related to the acquisition identified based on our preliminary purchase accounting assessments:

 

		Estimated Life (Years)
Customer relationships		15 - 20
Trade names/trademarks		5 - 10
Non-compete agreements		5

 

(2)

All of the goodwill related to the acquisition was assigned to our specialty containment solutions segment. The goodwill arising from the acquisition consists largely of GTH’s going-concern value, the value of GTH’s assembled workforce, new customer relationships expected to arise from the acquisition, and operational synergies and economies of scale that we expect to realize from the acquisition.

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION (Continued)

 

(4)	Pro forma balance sheet adjustments

 

a.

Adjust the value of GTH’s lease fleet based on its estimated fair value.

 

b.

Adjust the value of GTH’s property, plant and equipment based on its estimated fair value.

 

c.

Write-off GTH’s historical deferred financing costs.

 

d.

Write-off GTH’s historical intangible assets.

 

e.

Record the estimated value of acquired intangible assets.

 

f.

Write-off GTH’s historical goodwill.

 

g.

Record an estimate of acquisition-related goodwill.

 

h.

Record the repayment of GTH’s Revolving Credit Agreement and Term Loan Credit Agreement in connection with the acquisition.

 

i.

Record the funding of the acquisition, including the purchase price and related acquisition expenses.

 

j.

Adjust the value of GTH’s deferred income tax liability to remove the valuation allowance related to net operating loss carryforwards, partially offset by the effect of the fair value mark-ups.

 

k.

To record the impact of transaction expenses on retained earnings and the deferred tax liability.

 

l.

To record the acquisition of all the outstanding equity interests of GTH, and eliminate the GTH’s historical accumulated deficit.

 

(5)	Pro forma statement of operations adjustments

 

a.

Adjust the cost of sold lease fleet to reflect the fair value mark-ups of assets acquired.

 

b.

Adjust the gain on property, plant and equipment sold to reflect the fair value mark-ups of assets acquired.

 

c.

Eliminate acquisition costs.

 

d.

Eliminate the interest expense and fees related to GTH’s long-term debt that was repaid in conjunction with the acquisition.

 

e.

Adjust the depreciation of lease fleet and property, plant and equipment to reflect extension of useful lives, partially offset by the impact of the fair value step-ups.

 

f.

Eliminate the historical intangible asset amortization expense of GTH and record amortization expense on the acquired intangible assets.

 

g.

Record the interest expense associated with the debt incurred to fund the purchase, including acquisition-related expenses.

 

h.

Record the tax effect of the pro forma adjustments.

 

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