Form 8-K/A MOBILE MINI INC For: Feb 12

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 8-K/A

(Amendment No. 1)

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 12, 2015

 

 

 

(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. 1 to the Current Report on Form 8-K of Mobile Mini, Inc. (the “Company”) filed with the Securities and Exchange Commission on February 12, 2015 (the “Original 8-K”), is filed to provide a revised news release (the “Revised Release”), filed herewith as Exhibit 99.1 to this Amendment No. 1 to amend and replace the earnings press release attached as Exhibit 99.1 to the Original 8-K (the “Original Release”).

In the Revised Release, approximately $9.8 million originally classified as acquisition expense has been classified as part of the purchase price for the Company’s acquisition of Gulf Tanks Holdings, Inc. As a result, leasing, selling and general expenses was decreased by $9.8 million for three and twelve month periods ended December 31, 2014. This had the result of increasing net income, diluted earnings per share, goodwill, free cash flow, EBITDA and several other line items as set forth in the Revised Release. There was no effect on adjusted net income or adjusted EBITDA as reported in the Original Release.

Item 2.02. Results of Operations and Financial Condition

On February 12, 2015, the Company issued a news release announcing its financial results for the period ended December 31, 2014. A copy of the revised news release is furnished as Exhibit 99.1 to this report.

In accordance with general instruction B.2 to Form 8-K, information in this Item 2.02 and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of such section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

 

(d)

Exhibits.

 

99.1		Registrant’s revised news release announcing its financial results.

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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

 

FOR IMMEDIATE RELEASE

MOBILE MINI REPORTS Q4’14 RESULTS AND ANNOUNCES 10% INCREASE IN QUARTERLY DIVIDEND

Phoenix, AZ – February 12, 2015 – Mobile Mini, Inc. (NASDAQ GS: MINI) (the “Company” or “Mobile Mini”), the world’s leading supplier of portable storage solutions, and third largest provider of specialty containment solutions in the United States, today reported actual and adjusted financial results for the quarter ended December 31, 2014. Total revenues were $123.2 million and leasing revenues were $113.4 million, up from $106.8 million and $97.8 million, respectively, for the same period last year. The Company’s fourth quarter net income was $12.9 million, or $0.28 per diluted share, compared to net income of $12.0 million, or $0.26 per diluted share, respectively, for the fourth quarter of 2013. On an adjusted basis, fourth quarter net income was $17.0 million, or $0.37 per diluted share, compared to $12.8 million, or $0.28 per diluted share, respectively, for the fourth quarter of 2013. Adjusted EBITDA was $49.0 million and adjusted EBITDA margin was 39.8% for the fourth quarter of 2014.

On December 10, 2014, the Company completed the acquisition of Gulf Tanks Holdings, Inc., the parent company of Evergreen Tank Solutions (“ETS”), referred to herein as the ETS Acquisition. Assets and liabilities of ETS are included in the Company’s balance sheet as of December 31, 2014, and ETS operations are included in the consolidated results of operations from the acquisition date forward. In the discussion below, the Company’s container and office product offerings that existed prior to the ETS Acquisition are generally referred to as “portable storage,” and the acquired business is referred to as “specialty containment.”

Total revenues and leasing revenues in the portable storage business for the current quarter were $116.8 million and $108.0 million, respectively.

Dividend

The Company’s Board of Directors increased the Company’s first quarter 2015 cash dividend by 10% to 18.7 cents per share, as compared to the preceding period. The dividend will be paid on March 19, 2015 to shareholders of record on March 5, 2014.

Fourth Quarter 2014 Highlights

 

•

Successfully completed the ETS Acquisition, as well as a portable storage acquisition in the New York market.

 

•

Grew total company leasing revenues 16.0% year-over-year; 10.4% for the portable storage business.

 

•

Increased portable storage rental rates by 7.6% year-over-year and 2.0% sequentially, with new units delivered at a 6.5% higher rental rate than the prior year fourth quarter.

 

•

Increased adjusted EBITDA within the portable storage business by 13.9% to $46.1 million, from $40.5 million in the fourth quarter of 2013, while continuing to increase fleet units in rent-ready condition.

 

•

Within the portable storage business, expanded adjusted EBITDA margin to 39.4% from 37.9% in the prior year fourth quarter.

Full Year 2014 Highlights

 

•

Produced $104.8 million of free cash flow in 2014; $109.9 million excluding $5.1 million of costs related to acquisitions.

 

•

Increased portable storage yield by 10.5% over the prior year.

 

•

Executed on our geographic expansion strategy with eight portable storage acquisitions.

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Mobile Mini, Inc. News Release February 12, 2014				Page 2

 

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “During 2014 we re-aligned our strategies to stabilize the business, grow revenues and increase profit. The strong fourth quarter and full-year results demonstrate that our approach is working. I am very pleased with the expansion of our adjusted EBITDA margins in the fourth quarter, as well as the momentum we have generated on portable storage pricing, which increased an impressive 7.6% compared to the prior year fourth quarter. I am also excited about the completion of the ETS Acquisition in the fourth quarter, which gives Mobile Mini an additional platform for growth in revenues and profits.”

Mr. Olsson continued, “Excluding acquisition costs, our $109.9 million of free cash flow is the highest ever generated by Mobile Mini. In addition to reinvesting in the business during 2014, we returned more than $56 million to our shareholders through quarterly dividends and repurchased treasury shares. Our consistent delivery of robust free cash flow has enabled us to create and return shareholder value through these multiple channels. We expect to continue these programs and, in addition to raising our quarterly dividend amount, have purchased $15.0 million in treasury shares already in 2015. Although we still have room for improvement, including continued investment in repairs and maintenance, we have executed our strategies well throughout 2014 and I believe we are well positioned for an even stronger 2015,” Mr. Olsson concluded.

Conference Call

Mobile Mini will host a conference call today, Thursday, February 12, 2015 at 12 noon ET to review these results. To listen to the call live, dial (201) 493-6739 and ask for the Mobile Mini Conference Call or go to www.mobilemini.com and click on the Investors section. Additionally, a slide presentation that will accompany the call will be posted at www.mobilemini.com on the Investors section and will be available in advance and after the call. Please go to the website 15 minutes early to download and install any necessary audio software. If you are unable to listen live, a replay of the call can be accessed for approximately 14 days after the call at Mobile Mini’s website.

About Mobile Mini, Inc.

Mobile Mini, Inc. is the world’s leading provider of portable storage solutions through its total lease fleet of approximately 213,500 portable storage containers and office units with 136 locations in the U.S., United Kingdom, and Canada. Through its wholly-owned subsidiary, Evergreen Tank Solutions, Mobile Mini is also the third largest provider of specialty containment solutions in the U.S., with a lease fleet of approximately 10,600 units and 24 locations. Mobile Mini is included on the Russell 2000^® and 3000^® Indexes and the S&P Small Cap Index.

Forward-Looking Statements

This news release contains forward-looking statements, including, but not limited to, our expectations regarding our ability to execute our strategic plan, growth and profitability, financial performance, margin expansion, ability to enter new markets, free cash flow, and positioning for 2015, which involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Risks and uncertainties that may affect future results include those that are described from time to time in the Company’s SEC filings. These forward-looking statements represent the judgment of the Company, as of the date of this release, and Mobile Mini disclaims any intent or obligation to update forward-looking statements.

 

CONTACT:		-OR-		INVESTOR RELATIONS COUNSEL:
Mark Funk, Executive VP &				The Equity Group Inc.
Chief Financial Officer				Fred Buonocore (212) 836-9607
Mobile Mini, Inc.				Linda Latman (212) 836-9609
(602) 308-3879
www.mobilemini.com

(See accompanying tables)

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Mobile Mini, Inc. News Release February 12, 2014				Page 3

 

Mobile Mini, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

(in thousands except per share data)

 

		Three Months Ended December 31, 2014												Three Months Ended December 31, 2013
		Actual				Adjustments				Adjusted (1)				Actual				Adjustments				Adjusted (1)
Revenues:
Leasing		$	113,443			$	—			$	113,443			$	97,820			$	—			$	97,820
Sales			7,824				—				7,824				8,246				—				8,246
Other			1,948				—				1,948				733				—				733
Total revenues			123,215				—				123,215				106,799				—				106,799
Costs and expenses:
Cost of sales			5,813				—				5,813				5,472				—				5,472
Leasing, selling and general expenses (2)			76,554				(4,994	)			71,560				64,809				(4	)			64,805
Restructuring expenses (3)			633				(633	)			—				349				(349	)			—
Asset impairment recovery, net (4)			—				—				—				(784	)			784				—
Depreciation and amortization			11,414				—				11,414				8,993				—				8,993
Total costs and expenses			94,414				(5,627	)			88,787				78,839				431				79,270
Income from operations			28,801				5,627				34,428				27,960				(431	)			27,529
Other income (expense):
Interest income			—				—				—				1				—				1
Interest expense			(7,538	)			—				(7,538	)			(7,151	)			—				(7,151	)
Foreign currency exchange			—				—				—				(1	)			—				(1	)
Income from continuing operations before income tax provision			21,263				5,627				26,890				20,809				(431	)			20,378
Income tax provision			8,400				1,465				9,865				7,717				(166	)			7,551
Income from continuing operations			12,863				4,162				17,025				13,092				(265	)			12,827
Loss from discontinued operation, net of tax (5)			—				—				—				(1,134	)			1,134				—
Net income		$	12,863			$	4,162			$	17,025			$	11,958			$	869			$	12,827
EBITDA		$	40,215							$	49,035			$	36,953							$	40,455
EBITDA as a percentage of total revenues			32.6	%							39.8	%			34.6	%							37.9	%
Earnings per share:
Basic:
Income from continuing operations		$	0.28			$	0.09			$	0.37			$	0.29			$	(0.01	)		$	0.28
Loss from discontinued operation			—				—				—				(0.03	)			0.03				—
Net income		$	0.28			$	0.09			$	0.37			$	0.26			$	0.02			$	0.28
Diluted:
Income from continuing operations		$	0.28			$	0.09			$	0.37			$	0.28			$	—			$	0.28
Loss from discontinued operation			—				—				—				(0.02	)			0.02				—
Net income		$	0.28			$	0.09			$	0.37			$	0.26			$	0.02			$	0.28
Weighted average number of common and common share equivalents outstanding:
Basic			45,724												45,736
Diluted			46,365												46,461

 

(1)	Adjusted balance excludes certain non-cash transactions, as well as other transactions that management believes are not indicative of its ongoing business. Adjusted figures are a non-GAAP presentation.

(2)	Costs directly related to acquisition activities.

(3)	Costs relating primarily to the restructuring of our operations.

(4)	Gain upon the completion of sale (offset by losses upon completion of sale) of certain assets written down to fair value in the second quarter of 2013.

(5)	Operations related to our Netherlands operation which was sold in December 2013.

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Mobile Mini, Inc. News Release February 12, 2014				Page 4

 

Mobile Mini, Inc.

Condensed Consolidated Statements of Income

(Unaudited, except as indicated)

(in thousands except per share data)

 

		Twelve Months Ended December 31, 2014												Twelve Months Ended December 31, 2013
		Actual				Adjustments				Adjusted (1)				Actual				Adjustments				Adjusted (1)
														(audited)
Revenues:
Leasing		$	410,362			$	—			$	410,362			$	366,286			$	—			$	366,286
Sales			31,585				—				31,585				38,051				—				38,051
Other			3,527				—				3,527				2,149				—				2,149
Total revenues			445,474				—				445,474				406,486				—				406,486
Costs and expenses:
Cost of sales			21,944				—				21,944				25,413				—				25,413
Leasing, selling and general expenses (2)			280,948				(5,070	)			275,878				237,567				(4	)			237,563
Restructuring expenses (3)			3,542				(3,542	)			—				2,402				(2,402	)			—
Asset impairment recovery, net (4)			557				(557	)			—				38,705				(38,705	)			—
Depreciation and amortization			39,334				—				39,334				35,432				—				35,432
Total costs and expenses			346,325				(9,169	)			337,156				339,519				(41,111	)			298,408
Income from operations			99,149				9,169				108,318				66,967				41,111				108,078
Other income (expense):
Interest income			—				—				—				1				—				1
Interest expense			(28,729	)			—				(28,729	)			(29,467	)			—				(29,467	)
Foreign currency exchange			(1	)			—				(1	)			(2	)			—				(2	)
Income from continuing operations before income tax provision			70,419				9,169				79,588				37,499				41,111				78,610
Income tax provision (5)			26,033				2,505				28,538				12,275				16,429				28,704
Income from continuing operations			44,386				6,664				51,050				25,224				24,682				49,906
Loss from discontinued operation, net of tax (6)			—				—				—				(1,302	)			1,302				—
Net income		$	44,386			$	6,664			$	51,050			$	23,922			$	25,984			$	49,906
EBITDA		$	138,482							$	162,141			$	102,398							$	157,465
EBITDA as a percentage of total revenues			31.1	%							36.4	%			25.2	%							38.7	%
Earnings per share:
Basic:
Income from continuing operations		$	0.96			$	0.15			$	1.11			$	0.55			$	0.55			$	1.10
Loss from discontinued operation			—				—				—				(0.02	)			0.02				—
Net income		$	0.96			$	0.15			$	1.11			$	0.53			$	0.57			$	1.10
Diluted:
Income from continuing operations		$	0.95			$	0.14			$	1.09			$	0.55			$	0.53			$	1.08
Loss from discontinued operation			—				—				—				(0.03	)			0.03				—
Net income		$	0.95			$	0.14			$	1.09			$	0.52			$	0.56			$	1.08
Weighted average number of common and common share equivalents outstanding:
Basic			46,026												45,481
Diluted			46,725												46,096

 

(1)	Adjusted balance excludes certain non-cash transactions, as well as other transactions that management believes are not indicative of its ongoing business. Adjusted figures are a non-GAAP presentation.

(2)	Costs directly related to acquisition activities.

(3)	Costs relating primarily to the restructuring of our operations.

(4)

In 2014, the adjustment represents losses upon the completion of sale (offset by gains upon completion of sale) of certain assets written down to fair value in the second quarter of 2013. In 2013 the adjustment represents impairment charges (offset by gains and additional losses upon the subsequent completion of sale) primarily for the write-down of certain assets to fair value during the second quarter of 2013.

(5)	In 2013, includes an income tax benefit of $1.9 million related to the statutory corporate income tax rate reduction in the United Kingdom.

(6)	Operations related to our Netherlands operation which was sold in December 2013.

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Mobile Mini, Inc. News Release February 12, 2014				Page 5

 

Mobile Mini, Inc.

Operating Data

(Unaudited)

 

		December 31,
		2014				2013
As of December 31:
Number of portable storage locations			136				136
Number of specialty containment locations			24				—
Portable Storage lease fleet units			213,546				212,898
Specialty Containment lease fleet units			10,633				—
Utilization:
Portable Storage - three months ended December 31			72.8	%			72.8	%
Portable Storage - twelve months ended December 31			68.6	%			65.8	%

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Mobile Mini, Inc. News Release February 12, 2014				Page 6

 

Mobile Mini, Inc.

Product Line Information - Adjusted (1)

(Unaudited)

(in thousands)

 

		Three Months Ended December 31, 2014												Twelve Months Ended December 31, 2014
		Portable Storage				Specialty Containment				Total				Portable Storage				Specialty Containment				Total
Revenues:
Leasing		$	108,020			$	5,423			$	113,443			$	404,939			$	5,423			$	410,362
Sales			7,661				163				7,824				31,422				163				31,585
Other			1,102				846				1,948				2,681				846				3,527
Total revenues			116,783				6,432				123,215				439,042				6,432				445,474
Costs and expenses:
Cost of sales			5,707				106				5,813				21,838				106				21,944
Leasing, selling and general expenses			68,206				3,354				71,560				272,524				3,354				275,878
Depreciation and amortization			9,540				1,874				11,414				37,460				1,874				39,334
Total costs and expenses			83,453				5,334				88,787				331,822				5,334				337,156
Income from operations		$	33,330			$	1,098			$	34,428			$	107,220			$	1,098			$	108,318
Adjusted EBITDA		$	46,063			$	2,972			$	49,035			$	159,169			$	2,972			$	162,141
Adjusted EBITDA Margin			39.4	%			46.2	%			39.8	%			36.3	%			46.2	%			36.4	%
Free cash flow		$	26,163			$	(2,302	)		$	23,861			$	107,121			$	(2,302	)		$	104,819

 

(1)

Adjusted amounts exclude certain non-cash transactions, as well as other transactions that management believes are not indicative of its ongoing business. Adjusted figures are a non-GAAP presentation. See additional information regarding the adjusted balances on the previous pages of this news release. All adjustments relate to the portable storage business.

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Mobile Mini, Inc. News Release February 12, 2014				Page 7

 

Mobile Mini, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

		December 31,
		2014				2013
		(unaudited)				(audited)
ASSETS
Cash and cash equivalents		$	3,739			$	1,256
Receivables, net			81,031				53,104
Inventories			16,736				18,744
Lease fleet, net			1,087,056				979,276
Property, plant and equipment, net			113,175				85,153
Assets held for sale			—				980
Deposits and prepaid expenses			8,586				6,116
Deferred financing costs and other assets			8,858				10,977
Intangibles, net			78,385				2,546
Goodwill			705,608				519,222
Total assets		$	2,103,174			$	1,677,374
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts payable		$	22,933			$	18,862
Accrued liabilities			63,727				65,308
Lines of credit			705,518				319,314
Obligations under capital leases			24,918				8,781
Senior Notes			200,000				200,000
Deferred income taxes			231,547				209,565
Total liabilities			1,248,643				821,830
Stockholders’ equity:
Common stock			490				488
Additional paid-in capital			569,083				550,387
Retained earnings			380,504				359,778
Accumulated other comprehensive loss			(29,870	)			(15,440	)
Treasury stock			(65,676	)			(39,669	)
Total stockholders’ equity			854,531				855,544
Total liabilities and stockholders’ equity		$	2,103,174			$	1,677,374

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Mobile Mini, Inc. News Release February 12, 2014				Page 8

 

Mobile Mini, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

		Twelve Months Ended December 31,
		2014				2013
		(unaudited)				(audited)
Cash Flows from Operating Activities:
Net income		$	44,386			$	23,922
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment charge, net			557				38,217
Provision for doubtful accounts			2,778				2,160
Amortization of deferred financing costs			2,829				2,811
Amortization of long-term liabilities			88				169
Share-based compensation expense			15,071				14,714
Depreciation and amortization			39,334				35,626
Loss on disposal of discontinued operation			—				1,948
Gain on sale of lease fleet			(5,732	)			(9,682	)
Loss on disposal of property, plant and equipment			348				247
Deferred income taxes			25,424				11,012
Tax shortfall on equity award transactions			(15	)			(837	)
Foreign currency transaction loss			1				1
Changes in certain assets and liabilities, net of effect of businesses acquired			(4,444	)			(4,197	)
Net cash provided by operating activities			120,625				116,111
Cash Flows from Investing Activities:
Proceeds from sale of discontinued operation			—				677
Cash paid for businesses acquired, net of cash acquired			(430,946	)			—
Additions to lease fleet, excluding acquisitions			(27,279	)			(28,826	)
Proceeds from sale of lease fleet units			23,053				35,951
Additions to property, plant and equipment			(15,779	)			(15,792	)
Proceeds from sale of property, plant and equipment			4,199				1,970
Net cash used in investing activities			(446,752	)			(6,020	)
Cash Flows from Financing Activities:
Net borrowings (payments) under lines of credit			386,204				(123,076	)
Deferred financing costs			(719	)			—
Principal payments on notes payable			—				(310	)
Principal payments on capital lease obligations			(1,956	)			(408	)
Issuance of common stock			3,642				13,818
Dividend payments			(31,384	)			—
Purchase of treasury stock			(26,007	)			(369	)
Net cash provided by (used) in financing activities			329,780				(110,345	)
Effect of exchange rate changes on cash			(1,170	)			(427	)
Net increase (decrease) in cash			2,483				(681	)
Cash and cash equivalents at beginning of period			1,256				1,937
Cash and cash equivalents at end of period		$	3,739			$	1,256
Equipment acquired through capital lease obligations		$	16,508			$	8,547

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Mobile Mini, Inc. News Release February 12, 2014				Page 9

 

Discontinued Operation

The sale of our Netherlands operation in 2013 is reflected in the financial data herein as a discontinued operation.

Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company also discloses in this press release certain non-GAAP financial information. These financial measures are not recognized measures under GAAP and they are not intended to be and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, adjusted net income, adjusted diluted earnings per share, and free cash flow are non-GAAP financial measures as defined by Securities and Exchange Commission (“SEC”) rules. This non-GAAP financial information may be determined or calculated differently by other companies. Reconciliations of these measurements to the most directly comparable GAAP financial measures are as follows:

Mobile Mini, Inc.

Adjusted EBITDA GAAP Reconciliations

(Unaudited)

(in thousands)

 

		Three Months Ended December 31,								Twelve Months Ended December 31,
		2014				2013				2014				2013
Net income		$	12,863			$	11,958			$	44,386			$	23,922
Loss from discontinued operation, net of tax			—				1,134				—				1,302
Interest expense			7,538				7,151				28,729				29,467
Provision for income taxes			8,400				7,717				26,033				12,275
Depreciation and amortization			11,414				8,993				39,334				35,432
EBITDA			40,215				36,953				138,482				102,398
Share-based compensation expense			3,193				3,933				14,490				13,956
Restructuring expenses			633				349				3,542				2,402
Acquisition and other expenses			4,994				4				5,070				4
Asset impairment charge, net			—				(784	)			557				38,705
Adjusted EBITDA		$	49,035			$	40,455			$	162,141			$	157,465
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2014				2013				2014				2013
Net cash provided by operating activities		$	32,867			$	30,637			$	120,625			$	116,111
Discontinued operation			—				712				—				732
Interest paid			10,065				10,174				24,559				25,947
Income and franchise taxes paid			158				152				1,103				1,114
Share-based compensation expense			(3,498	)			(3,945	)			(15,071	)			(14,714	)
Asset impairments, net of recoveries			—				736				(557	)			(38,217	)
Loss on disposal of discontinued operation			—				(1,948	)			—				(1,948	)
Gain on sale of lease fleet			1,236				1,984				5,732				9,682
Loss on disposal of property, plant and equipment			(529	)			(303	)			(348	)			(247	)
Changes in other assets and liabilities, net of effect of businesses acquired			(84	)			(1,246	)			2,439				3,938
EBITDA		$	40,215			$	36,953			$	138,482			$	102,398

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Mobile Mini, Inc. News Release February 12, 2014				Page 10

Mobile Mini, Inc.

Free Cash Flow GAAP Reconciliation

(Unaudited)

(in thousands)

 

		Three Months Ended December 31,								Twelve Months Ended December 31,
		2014				2013				2014				2013
Net cash provided by operating activities		$	32,867			$	30,637			$	120,625			$	116,111
Additions to lease fleet, excluding acquisitions			(10,969	)			(5,215	)			(27,279	)			(28,826	)
Proceeds from sale of lease fleet units			5,240				10,540				23,053				35,951
Additions to property, plant and equipment, excluding acquisitions			(4,102	)			(5,141	)			(15,779	)			(15,792	)
Proceeds from sale of property, plant and equipment			825				957				4,199				1,970
Net capital (expenditures) proceeds, excluding acquisitions			(9,006	)			1,141				(15,806	)			(6,697	)
Free cash flow		$	23,861			$	31,778			$	104,819			$	109,414

EBITDA and adjusted EBITDA. EBITDA is defined as net income before discontinued operation, net of tax (if applicable), interest expense, income taxes, depreciation and amortization, and debt restructuring or extinguishment expense (if applicable), including any write-off of deferred financing costs. Adjusted EBITDA further excludes certain non-cash expenses, as well as transactions that management believes are not indicative of our ongoing business. Because EBITDA and adjusted EBITDA, as defined, exclude some but not all items that affect our cash flow from operating activities, they may not be comparable to similarly titled performance measures presented by other companies.

We present EBITDA and adjusted EBITDA because we believe they provide useful information regarding our ability to meet our future debt payment requirements, capital expenditures and working capital requirements and that they provide an overall evaluation of our financial condition. EBITDA and adjusted EBITDA have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP.

EBITDA and adjusted EBITDA margins are calculated as EBITDA and adjusted EBITDA divided by total revenues expressed as a percentage. The GAAP financial measure that is most directly comparable to EBITDA margin is operating margin, which represents operating income divided by revenues.

Free Cash Flow. Free cash flow is defined as net cash provided by operating activities, minus or plus, net cash used in or provided by investing activities, excluding acquisitions and certain transactions. Free cash flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, the most directly comparable financial measure prepared in accordance with GAAP. We present free cash flow because we believe it provides useful information regarding our liquidity and ability to meet our short-term obligations. In particular, free cash flow indicates the amount of cash available after capital expenditures for, among other things, investments in our existing business, debt service obligations, payment of authorized quarterly dividends, repurchase of our common stock and strategic small acquisitions.

Earlier in this release, we provided a reconciliation of these adjusted measurements to actual results along with a reconciliation of net income to EBITDA and adjusted EBITDA, net cash provided by operating activities to EBTIDA and net cash provided by operating activities to free cash flow.

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