WLSC Williams Scotsman Intl (MM)

Williams Scotsman International, Inc. (NASDAQ: WLSC), a leading provider of modular space solutions, reported today its financial results for the first quarter of 2007. First Quarter Results Total revenue for the 2007 first quarter was $161.9 million, compared to $165.0 million a year ago. As previously announced, the Company�s results for the 2006 first quarter included a single large U.S. military sale as well as unusually high business activity related to the early-stage recovery efforts in the hurricane-affected region of the country. These items contributed $23.7 million of revenue. On a comparable basis excluding the impact of these items from the Company�s 2006 first quarter results, total revenue increased by 15% or $20.7 million. Leasing revenues increased 16% to $80.2 million from $68.9 million in the prior year quarter, driven primarily by a 1.8% increase in average units on rent in North America, and an increase in the average rental rate of $24 to $306 from $282. North American utilization showed a decline to 80% from 82% a year ago due to idle classroom capacity and storage fleet growth. The increase in units on rent and average rental rates is attributable to continued strong performance throughout the Company�s U.S. regions and Canada. The remaining increase in leasing revenue was driven by the Company�s European subsidiary, Wiron, which was acquired in the third quarter of 2006. Sales of new units and rental equipment and delivery and installation revenues decreased 22.8% and 10.2%, respectively compared to the prior year quarter as a result of the above mentioned items. Gross profit margins increased by $8.6 million, or 13%, to $74.0 million, while the gross profit margin percentage increased 6.1 percentage points to 45.7% as compared to the prior year first quarter. The Company reported net income for the quarter ended March 31, 2007 of $10.4 million, or $0.24 per diluted share, as compared to net income of $10.4 million or $0.26 per diluted share for the quarter ended March 31, 2006. The 2006 first quarter results included a net income and earnings per share benefit of $2.8 million and $0.07, respectively, from the U.S. military and hurricane related sales as discussed above. Gerry Holthaus, Chairman, President and CEO, commented, �We are very pleased with the better than expected results of our first quarter financial performance, particularly in light of the challenging comparison to an unusually strong 2006 first quarter. Our performance demonstrates the benefits of our diversified growth strategy along with continued solid demand from the U.S. non-residential market. Our results for the period also reflect continued growth in our Canadian operations, including the oil and gas sectors, and the benefit of our European operations. The overall result was impressive performance within our leasing business, with an increase in leasing revenues and gross margin percentage of 16% and 3.9 percentage points, respectively, over the prior year quarter. �During the quarter we continued to execute on our growth and diversification strategies, expanding our operational footprint with the previously announced acquisition of Honolulu-based Hawaii Modular Space and its sister company, Alaska Modular Space, on March 8, 2007. The integration process is going well, and we are continuing with a number of operational initiatives to complete the assimilation of this acquisition into the Company.� Business Outlook The following statements of anticipated results are based on current expectations. These statements are forward-looking, and actual results may differ materially. The Company estimates the following performance measures for the second quarter ending June 30, 2007 and year ending December 31, 2007: (in millions, except per share data) Quarter Ended Year Ended June 30, 2007 December 31, 2007 Low High Low High Range Range � Operating income $39.9� $41.4� $168.0� $171.5� � Depreciation and amortization 22.3� 22.3� 90.2� 90.2� � Net income 12.6� 13.6� 55.7� 57.8� � Earnings per share - diluted 0.29� 0.31� 1.25� 1.30� � Capital expenditures (excluding acquisitions) $50.0� $55.0� $135.0� $145.0� Mr. Holthaus concluded, �Looking ahead, we believe Williams Scotsman remains positioned well for solid growth. Indications are that demand within our targeted vertical markets remains positive, while conditions within our non-U.S. markets also continue to be strong. We are making excellent progress in achieving our goals for 2007 and look forward to additional success in the future.� The Business Outlook published in this press release reflects only the Company's current best estimate and the Company assumes no obligation to update the information contained in this press release, including the Business Outlook, at any time prior to its next earnings release. Williams Scotsman International, Inc. has scheduled a conference call for May 2, 2007 at 10:00 AM Eastern Time to discuss its first quarter results. To participate in the conference call, dial 888-433-1674 for domestic (212-748-2817 for international) and ask to be placed into the Williams Scotsman call. To listen to a live webcast of the call, go to www.willscot.com and click on the Investor Relations section. Please go to the website 15 minutes early to download and install any necessary audio software. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until 11:59 PM on June 1, 2007. To access the replay, domestic callers can dial 800-633-8284 and enter access code 21336707 (international callers can dial 402-977-9140). About Williams Scotsman International, Inc. Williams Scotsman International, Inc., through its subsidiaries, is a leading provider of mobile and modular space solutions for multiple industry sectors, including the Construction, Education, Commercial, Healthcare and Government markets. The company serves over 30,000 customers, operating a fleet of over 118,000 modular space and storage units that are leased through a network of over 100 locations throughout North America and Spain. Williams Scotsman provides delivery, installation, and other services, and sells new and used mobile office products. Williams Scotsman also manages large modular building projects from concept to completion. Williams Scotsman is a publicly traded company (NASDAQ: WLSC) headquartered in Baltimore, Maryland with operations in the United States, Canada, Mexico, and Spain. For additional information, visit the company's web site at www.willscot.com, call (410) 931-6066, or email to Michele.Cunningham@willscot.com. All statements other than statements of historical fact included in this press release are forward-looking statements and involve expectations, beliefs, plans, intentions or strategies regarding the future. Although the company believes that the expectations reflected in these forward-looking statements are reasonable, it assumes no responsibility for the accuracy and completeness of these forward-looking statements and gives no assurance that these expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the company's expectations are disclosed under "Risk Factors" and elsewhere in the company's 10-K, 10-Q and other SEC filings, including, but not limited to, substantial leverage and its ability to service debt, changing market trends in its industry, general economic and business conditions including a prolonged or substantial recession, its ability to finance fleet and branch expansion and to locate and finance acquisitions, its ability to implement its business and growth strategy and maintain and enhance its competitive strengths, intense industry competition, availability of key personnel and changes in, or the failure to comply with, government regulations. The company assumes no obligation to update any forward-looking statement. Williams Scotsman International, Inc. Consolidated Balance Sheets (dollars in thousands) � March 31, December 31, 2007� 2006� (Unaudited) Assets � Cash $ 2,129� $ 6,495� Trade accounts receivable, net 92,780� 120,586� Prepaid expenses and other current assets 56,714� 52,938� Rental equipment, net 1,102,446� 1,066,469� Property and equipment, net 94,805� 92,992� Deferred financing costs, net 18,472� 19,277� Goodwill and other intangible assets 224,044� 199,788� Other assets, net 31,712� 29,374� Total assets $ 1,623,102� $ 1,587,919� � Liabilities and stockholders� equity � Accounts payable $ 50,878� $ 58,964� Accrued expenses and other current liabilities 46,393� 50,834� Accrued interest 22,493� 12,887� Rents billed in advance 25,306� 25,031� Revolving credit facility 314,359� 296,892� Long-term debt, net 618,888� 619,464� Deferred income taxes 161,239� 155,706� Total liabilities 1,239,556� 1,219,778� Stockholders� equity: Common stock 560� 557� Additional paid-in capital 548,695� 545,124� Retained earnings 111,395� 100,962� Accumulated other comprehensive income 18,834� 17,436� 679,484� 664,079� Less treasury stock (295,938) (295,938) Total stockholders� equity 383,546� 368,141� Total liabilities and stockholders� equity $ 1,623,102� $ 1,587,919� Williams Scotsman International, Inc. Consolidated Statements of Operations (unaudited) (dollars in thousands, except per share data) � Quarter Ended March 31, 2007� 2006� Revenues Leasing $ 80,184� $ 68,883� Sales: New units 28,624� 39,946� Rental equipment 10,315� 10,511� Delivery and installation 30,563� 34,026� Other 12,263� 11,607� Total revenues 161,949� 164,973� � Cost of sales and services Leasing: Depreciation and amortization 15,724� 14,190� Other direct leasing costs 15,208� 15,050� Sales: New units 22,181� 32,308� Rental equipment 7,549� 7,674� Delivery and installation 24,777� 28,098� Other 2,555� 2,272� � � Total cost of sales and services 87,994� 99,592� � Gross profit 73,955� 65,381� � Selling, general & administrative expenses (1) 32,720� 26,650� Other depreciation and amortization 5,402� 4,246� Operating Income 35,833� 34,485� � Interest, including amortization of deferred financing costs 19,006� 17,521� � Income before income taxes 16,827� 16,964� Income tax expense 6,394� 6,531� Net income $ 10,433� $ 10,433� � Earnings per common share $ 0.24� $ 0.27� Earnings per common share, assuming dilution $ 0.24� $ 0.26� � Weighted average common shares outstanding � basic � 43,164,059� � 39,361,922� Weighted average common shares outstanding � diluted � 43,749,506� � 40,807,082� (1) Includes non-cash stock compensation expense of $0.8 million and $0.5 million for the three months ended March 31, 2007 and 2006, respectively. Williams Scotsman International, Inc. Summary of Selected Consolidated Financial Information (unaudited) (Dollars in thousands except monthly rental rate) � Quarter Ended March 31, Operations Data (in thousands): 2007� 2006� � Gross profit Leasing $ 49,252� $ 39,643� Sales: New units 6,443� 7,638� Rental equipment 2,766� 2,837� Delivery and installation 5,786� 5,928� Other 9,708� 9,335� Total gross profit $ 73,955� $ 65,381� North America Rental Fleet Data: Quarter EndedMarch 31, 2007 Quarter EndedMarch 31, 2006 Modular Storage Total Modular Storage Total � Lease fleet units, as of end of period 79,000� 24,300� 103,300� 77,600� 21,800� 99,400� Lease fleet units, average for period 78,300� 23,900� 102,200� 76,900� 21,700� 98,600� Utilization rate based upon units, average for period 82% 75% 80% 83% 78% 82% Monthly rental rate, average over period $ 364� $ 99� $ 306� $ 332� $ 97� $ 282� At March 31, 2007, our European rental fleet totaled approximately 15,400 units, at a utilization rate of 89% and an average rental rate of $131. Quarter Ended March 31, Capital Expenditure Data (in thousands): 2007� 2006� Lease fleet, net (a) $ 27,452� $ 26,513� Non-lease fleet 4,068� 2,245� Acquisitions 42,639� 5,123� Other Financial Data (at period end): March 31, 2007 Leverage Ratio (b) 3.87� x Leverage Ratio (c) 19.00� x Borrowing base availability under revolving credit facility (d) (in thousands) $ 196,067� (a) Capital expenditures are shown net of used units sold (b) Calculated as total debt divided by Consolidated EBITDA, see (f) below (c) Calculated as total debt divided by net income, the most comparable GAAP measure (d) Under the Company�s Amended and Restated Credit Agreement, the Company is not subject to financial covenants as long as its excess availability under the revolving credit facility remains above $75 million. As of March 31, 2007, the Company�s excess availability under the revolver was $196.1 million or $121.1 million in excess of the $75 million requirement Reconciliation of EBITDA for the quarter ended March 31, 2007 and 2006 to net income � the most comparable GAAP measure: Quarter Ended March 31, 2007� 2006� (in thousands) EBITDA (e) $ 56,959� $ 52,921� Less: Interest expense 19,006� 17,521� Depreciation and amortization 21,126� 18,436� Income tax provision 6,394� 6,531� � Net income $ 10,433� $ 10,433� (e) The Company defines EBITDA as earnings before deducting interest, loss on extinguishment of debt, income taxes, depreciation and amortization Reconciliation of Consolidated EBITDA, as defined below, to net income � the most comparable GAAP measure for the twelve months ended March 31, 2007 (in thousands): Consolidated EBITDA � trailing 12 months (f) $ 241,202� Less: Interest expense 70,604� Depreciation and amortization 82,537� Income tax provision 25,882� Non-cash stock compensation expense 2,949� Loss on early extinguishment of debt 90� Pro forma EBITDA impact of acquisitions 10,024� Net income, trailing 12 months $ 49,116� (f) Consolidated EBITDA is defined as the Company�s net income plus interest, loss on extinguishment of debt, taxes, depreciation and amortization expenses, and excludes (gains) losses on sales of fixed assets and any other non-cash items, and non-cash stock compensation charges. Consolidated EBITDA also includes an adjustment to reflect the estimated full year EBITDA contribution of acquisitions completed during the period. Consolidated EBITDA should not be considered in isolation or as a substitute to cash flow from operating activities, net income or other measures of performance prepared in accordance with generally accepted accounting principles or as a measure of the Company�s profitability or liquidity. The Company is providing Consolidated EBITDA as supplemental information so that investors can evaluate the Company�s performance and debt position. Consolidated EBITDA of the Company�s wholly owned subsidiary, Williams Scotsman, Inc., is also separately calculated and utilized to assess its compliance with the financial covenants under the Amended and Restated Credit Agreement.