WillScot Corporation (WSC) Misses Q1 EPS by 2c, Slight Beat on Revenues; Offers FY19 Revenue Outlook

WillScot Corporation (NASDAQ: WSC) reported Q1 EPS of ($0.09), $0.02 worse than the analyst estimate of ($0.07). Revenue for the quarter came in at $255.01 million versus the consensus estimate of $254.19 million.

Brad Soultz, President and Chief Executive Officer of WillScot commented, "I am extremely happy with the first quarter results as we continue to focus on growing our core leasing revenue through price optimization and the continued expansion of our "Ready-to-Work" platform. We are also now starting to see the combined earnings potential that exists in our operating platform as a result of our recent acquisitions. Revenue and Adjusted EBITDA for the quarter were up 89.2% and 138.0%, respectively, over the prior year, and our Adjusted EBITDA margin of 33.1% increased 680 bps versus the first quarter of 2018. This extraordinary margin expansion highlights the value of scale and synergy realization in our business, when combined with our commercial strategy to drive lease revenue growth organically through rate optimization and penetration of our "Ready to Work" solutions. These growth levers are largely in management's control, and when coupled with these outstanding first quarter results, make us confident in achieving our 2019 outlook, an annualized Adjusted EBITDA run rate of $400.0 million as we exit 2019, and deleveraging below 4x by the second quarter of 2020."

Tim Boswell, Chief Financial Officer commented, "Our first quarter financial results exceeded our high expectations financially. Our core commercial drivers remain strong with pro forma modular space average rental rates in our Modular - US segment up 13.6% year over year, which is now the sixth quarter in a row with growth exceeding 10.0% driven by both continued improvement in base rental rates and expansion of our "Ready to Work" value proposition. Our first quarter results represent the first quarter of significant cost synergy savings in our financial results, which we estimate contributed 290 bps of expansion to our Adjusted EBITDA margin. Approximately 100 bps of margin uplift resulted from the Acton and Tyson synergies which have now been fully realized consistent with our expectations. The remainder resulted from the substantial progress made on the ModSpace integration in the fourth quarter last year and the first quarter this year, which puts us on track to achieve our cost reduction targets for the year, as well as our expected transition to free cash flow and net income generation in the second half of 2019."

GUIDANCE:

WillScot Corporation sees FY2019 revenue of $1.05-1.15 billion, versus the consensus of $1.09 billion.

For earnings history and earnings-related data on WillScot Corporation (WSC) click here.

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