WillScot Corporation (WSC) Reports Q4 Revenues Beat; Provides FY20 Revenue Outlook

WillScot Corporation (NASDAQ: WSC) reported Q4 revenue for the quarter came in at $278 million versus the consensus estimate of $271.64 million.

Fourth Quarter 2019 Financial Highlights1,2

• Revenues of $278.0 million, representing an 8.0% (or $20.6 million) year over year increase, driven by growth in core leasing and services revenues of $17.5 million, or 7.7%.
  • Modular space average monthly rental rate increased to $641, a 14.1% increase year over year.
• Adjusted EBITDA of $98.2 million represents a 33.6% (or $24.7 million) year over year increase.
  • Adjusted EBITDA margin of 35.3% increased 670 basis points ("bps") year over year.
  • Approximately 80% of the expected $70.0 million annualized cost synergies related to the ModSpace and Acton acquisitions were in our fourth quarter 2019 results on a run rate basis.
• Consolidated net income of $8.9 million (including $7.9 million of discrete costs from acquisition and integration-related activities) increased by $19.3 million, and Free Cash Flow of $43.7 million increased by $63.8 million, year over year, consistent with our planned transition to net profitability and cash generation.

Brad Soultz, President and Chief Executive Officer of WillScot, commented, "WillScot delivered another quarter of substantial Adjusted EBITDA growth completing a truly transformational year for WillScot. Revenue and Adjusted EBITDA for the fourth quarter were up 8.0% and 33.6% organically over the prior year, and our Adjusted EBITDA margin of 35.3% increased 670 bps versus the fourth quarter of 2018. We've achieved this through our increased scale, solid synergy realization, and our rate and VAPS growth. We remain committed to de-leveraging organically, and our free cash flow generation of $43.7 million in the fourth quarter heading into 2020 gives us confidence that we will de-lever well below 4x during the course of 2020 based on our guidance."

Tim Boswell, Chief Financial Officer commented, "In Q4 we delivered solid year over year modular leasing revenue growth of $14.5 million or 8.1% organically, which is the best indicator of our trajectory heading into 2020. Modular space average rental rates in our Modular - US segment increased 15.1% year over year, due to the continued churn of our acquired portfolios and increased VAPS penetration and pricing on rental contracts. Organic lease revenue growth and cost synergy realization drove 670 bps of year over year Adjusted EBITDA margin expansion with approximately 80.0% of Acton and ModSpace synergies realized in Q4. All of this drove positive net income in the fourth quarter of $8.9 million and free cash flow of $43.7 million realizing our planned transition to net profitability and cash generation. We deployed the free cash flow to reduce debt and completed our transition to Large Accelerated Filer status, accomplishing all of the fundamental objectives we set for the year. Together these achievements represent a strong foundation from which to embark on WillScot’s next chapter of transformation."

“Finally, today we announced a strategic combination with Mobile Mini, the world’s leading provider of portable storage solutions serving customers in the U.S., U.K., and Canada. We are very excited to join together our two leading companies with complementary capabilities and cultures, best-in-class teams, and proven track records of driving profitable growth and shareholder value creation,” Brad Soultz, continued.

GUIDANCE:

WillScot Corporation sees FY2020 revenue of $1.1-1.2 billion, versus the consensus of $1.14 billion.

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

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