McGrath Rentcorp (NASDAQ: MGRC) reported Q3 EPS of $1.15, $0.13 better than the analyst estimate of $1.02. Revenue for the quarter came in at $156.45 million versus the consensus estimate of $151.65 million.

THIRD QUARTER 2020 COMPANY HIGHLIGHTS:

• Income from operations decreased 20% year-over-year to $37.3 million.
• Rental revenues decreased 3% year-over-year to $88.1 million.
• Adjusted EBITDA1 decreased 11% year-over-year to $62.7 million.
• Dividend rate increased 12% year-over-year to $0.42 per share for the third quarter of 2020. On an annualized basis, this dividend represents a 2.9% yield on the October 28, 2020 close price of $58.40 per share.

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

“For the third quarter, rental revenue growth of 1% at Mobile Modular and 3% at TRS-RenTelco was offset by a 22% decline at Adler, resulting in an overall 3% decrease for the Company. Rental revenue performance by end markets and geographic locations was varied and still affected by COVID-19 uncertainty. The decrease in total Company revenues was primarily a result of lower new equipment sales revenues at our Enviroplex business, which in 2019 had a large concentration of sales completed in the third quarter. Disciplined expense management continued in our production centers and support services, reflecting softer demand conditions.

Our third quarter results reflect slowly improving market conditions compared to the second quarter and we were pleased with how the business performed on an overall basis, despite uncertainty due to COVID-19. Sequentially, each of our three divisions grew rental revenues from the second to third quarter 2020. After withdrawing guidance in the second quarter, we set milestones for performance in the third quarter and landed high in our ranges for total revenues and EBITDA while maintaining discipline on rental equipment capital expenditures. Our teams successfully navigated difficult circumstances and delivered solid results.

Entering the fourth quarter of 2020, we are seeing the generally improved third quarter business conditions continuing, despite the pandemic uncertainties. We remain focused on consistent execution for our customers and we are working hard to finish the year on solid footing.”

GUIDANCE:

McGrath Rentcorp sees Q4 2020 revenue of $140-150 million, versus the consensus of $141.74 million.

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