McGrath Rentcorp (MGRC) Tops Q4 EPS by 13c, Revenues Beat; Offers FY20 Revenue Guidance

McGrath Rentcorp (NASDAQ: MGRC) reported Q4 EPS of $1.07, $0.13 better than the analyst estimate of $0.94. Revenue for the quarter came in at $147.2 million versus the consensus estimate of $137.79 million.

FOURTH QUARTER 2019 COMPANY HIGHLIGHTS:

• Income from operations increased 9% year-over-year to $38.2 million.
• Rental revenues increased 8% year-over-year to $92.2 million.
• Adjusted EBITDA1 increased 11% year-over-year to $63.7 million.
• Dividend rate increased 10% year-over-year to $0.375 per share for the fourth quarter of 2019. On an annualized basis, this dividend represents a 1.9% yield on the February 24, 2020 close price of $78.54 per share.

Joe Hanna, President and CEO of McGrath RentCorp, made the following comments regarding these results and future expectations:

“We were pleased with our fourth quarter 2019 results as our teams delivered impressive revenue and operating profit growth over the strong fourth quarter results of 2018. The positive trends seen earlier in the year at Mobile Modular and TRS-RenTelco continued into the fourth quarter, more than offsetting weaker market demand conditions for Adler Tank Rentals.

Full year results reflected overall healthy demand for the markets we serve, coupled with continued focus on performance improvement and disciplined capital allocation. Our 20% growth in income from operations was driven by strong rental operations revenue growth of 13% and a notably strong year for equipment sales revenues, which grew by 19%.

Looking ahead we expect overall business conditions to support further growth for the Company in 2020, despite softer demand conditions for Adler Tank Rentals. We will maintain our focus on performance improvement and execution, and I believe that we will continue to build upon 2019’s successes.”

GUIDANCE:

McGrath Rentcorp sees FY2020 revenue of $575-595 million, versus the consensus of $584.28 million.

For the full-year 2020, the Company expects:

• Total revenue: $575 million - $595 million, compared to $570 million in 2019.
• Adjusted EBITDA1: $240 million - $248 million, compared to $237 million in 2019.
• Net capital expenditures2: $110 million to $120 million, compared to $135 million in 2019.

For earnings history and earnings-related data on McGrath Rentcorp (MGRC) click here.

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