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 second quarter of 2007. Second Quarter Results Total revenue for the 2007 second quarter was $203.7 million, compared to $159.1 million a year ago. Leasing revenues increased 18.1% to $82.9 million from $70.2 million in the prior year quarter, driven primarily by a 2.1% increase in average units on rent in North America, and an increase in the average rental rate of $22 to $309 from $287. 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 and accounted for $5.3 million of the increase. Sales of new units and rental equipment increased 54.8% compared to the prior year quarter primarily as a result of increased sales activities including a large classroom project in Louisiana and a military project in Hawaii. Delivery and installation revenues increased 23.6% compared to the prior year quarter as a result of the above mentioned items. Gross profit increased by $13.9 million, or 20.5%, to $81.8 million, while the gross profit margin percentage decreased 2.5 percentage points to 40.2% as compared to the prior year second quarter due to a higher mix of sales related business. The Company reported net income for the quarter ended June 30, 2007 of $14.6 million, or $0.33 per diluted share, an increase of 26.4% or $0.05 per diluted share as compared to net income of $11.6 million or $0.27 per diluted share for the quarter ended June 30, 2006. Gerry Holthaus, Chairman, President and CEO, commented, �We are very pleased with the results of our second quarter financial performance. Our results for the period reflect continued growth in our U.S regions as well as our focus on our international markets including the benefit of our European acquisition and continued growth from our Canadian operations. As a result of these activities, the Company reported record net income for its second quarter.� �We also announced on July 19, 2007, that the Company agreed to be acquired by the parent company of Algeco Group, the European space rental company, in an all-cash transaction for $2.2 billion, which includes the refinancing of outstanding debt. Under the terms of the agreement, Williams Scotsman International, Inc. shareholders will receive $28.25 in cash for each share of Williams Scotsman International, Inc. common stock they own.� Six Months ended June�30, 2007 Results Revenues for the six months ended June�30, 2007 were $365.7 million, a 12.8% increase from $324.1 million in the comparable period of 2006. Gross profit was $155.8 million, a 16.9% increase as compared to $133.3 million for the prior year period. The Company reported net income for the six months ended June�30, 2007 of $25.1 million or $0.57 per share as compared to net income of $22.0 million or $0.53 per share for the six months ended June 30, 2006. Williams Scotsman International, Inc. has scheduled a conference call for August 3, 2007 at 10:00 AM Eastern Time to discuss its second quarter results. To participate in the conference call, dial 888-633-8284 for domestic (212-231-6012 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 September 2, 2007. To access the replay, domestic callers can dial 800-633-8284 and enter access code 21345015 (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 121,000 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 - News) 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) � June 30,2007 December 31,2006 (Unaudited) Assets � Cash $ 1,995 $ 6,495 Trade accounts receivable, net 125,816 120,586 Prepaid expenses and other current assets 69,285 52,938 Rental equipment, net 1,147,523 1,066,469 Property and equipment, net 97,432 92,992 Deferred financing costs, net 17,671 19,277 Goodwill and other intangible assets 225,111 199,788 Other assets, net 36,080 29,374 Total assets $ 1,720,913 $ 1,587,919 � Liabilities and stockholders� equity � Accounts payable $ 72,455 $ 58,964 Accrued expenses and other current liabilities 53,553 50,834 Accrued interest 11,324 12,887 Rents billed in advance 24,598 25,031 Revolving credit facility 357,111 296,892 Long-term debt, net 617,902 619,464 Deferred income taxes 170,701 155,706 Total liabilities 1,307,644 1,219,778 Stockholders� equity: Common stock 562 557 Additional paid-in capital 552,255 545,124 Retained earnings 126,036 100,962 Accumulated other comprehensive income 30,354 17,436 709,207 664,079 Less treasury stock (295,938 ) (295,938 ) Total stockholders� equity 413,269 368,141 Total liabilities and stockholders� equity $ 1,720,913 $ 1,587,919 Williams Scotsman International, Inc. Consolidated Statements of Operations (unaudited) (dollars in thousands, except per share data) � Quarter endedJune 30, Six months endedJune 30, 2007 2006 2007 2006 (In thousands except share and per share amounts) Revenues Leasing $ 82,859 $ 70,174 $ 163,043 $ 139,057 Sales: New units 49,401 26,796 78,025 66,742 Rental equipment 14,614 14,564 24,929 25,075 Delivery and installation 43,162 34,914 73,725 68,940 Other 13,690 12,661 25,953 24,268 Total revenues 203,726 159,109 365,675 324,082 � Costs of sales and services Leasing: Depreciation and amortization 16,426 14,036 32,150 28,226 Other direct leasing costs 17,367 16,078 32,575 31,128 Sales: New units 40,449 20,333 62,630 52,641 Rental equipment 10,190 10,391 17,739 18,065 Delivery and installation 34,534 27,990 59,311 56,088 Other 2,937 2,390 5,492 4,662 Total costs of sales and services 121,903 91,218 209,897 190,810 � Gross profit 81,823 67,891 155,778 133,272 � Selling, general and administrative expenses (1) 32,956 26,856 65,676 53,506 Other depreciation and amortization 5,774 4,372 11,176 8,618 Operating income 43,093 36,663 78,926 71,148 � Interest, including amortization of deferred financing costs 19,001 17,824 38,007 35,345 � Income before income taxes 24,092 18,839 40,919 35,803 Income tax expense 9,451 7,257 15,845 13,788 Net income $ 14,641 $ 11,582 $ 25,074 $ 22,015 � Earnings per common share $ 0.34 $ 0.28 $ 0.58 $ 0.54 Earnings per common share, assuming dilution $ 0.33 $ 0.27 $ 0.57 $ 0.53 � Weighted average common shares outstanding � basic � 43,514,463 � 41,487,015 � 43,340,229 � 40,737,273 Weighted average common shares outstanding � diluted � 44,011,544 � 42,389,358 � 43,881,493 � 41,916,080 (1) Includes non-cash stock compensation expense of $0.6 million and $0.2 million for the three months ended June 30, 2007 and 2006, respectively and $1.4 million and $0.7 million for the six months ended June 30, 2007 and 2006, respectively. Williams Scotsman International,�Inc. Summary of Selected Consolidated Financial Information (unaudited) (Dollars in thousands except monthly rental rate) � Quarter Ended June 30, Six Months Ended June 30, Operations Data (in thousands): 2007 2006 2007 2006 � Gross profit Leasing $ 49,066 $ 40,060 $ 98,318 $ 79,703 Sales: � New units 8,952 6,463 15,395 14,101 Rental equipment 4,424 4,173 7,190 7,010 Delivery and installation 8,628 6,924 14,414 12,852 Other 10,753 10,271 20,461 19,606 Total gross profit $ 81,823 $ 67,891 $ 155,778 $ 133,272 North America Rental Fleet Data: Quarter Ended June 30, 2007 Quarter Ended June 30, 2006 Modular Storage Total Modular Storage Total � Lease fleet units, as of end of period 79,900 25,100 105,000 77,600 22,600 100,200 Lease fleet units, average for period 79,400 24,800 104,200 77,600 22,200 99,800 Utilization rate based upon units, average for period 82% 74% 80% 83% 77% 82% Monthly rental rate, average over period $ 368 $ 100 $ 309 $ 337 $ 98 $ 287 � Six Months Ended June 30, 2007 Six Months Ended June 30, 2006 Modular Storage Total Modular Storage Total � Lease fleet units, as of end of period 79,900 25,100 105,000 77,600 22,600 100,200 Lease fleet units, average for period 78,800 24,400 103,200 77,200 22,000 99,200 Utilization rate based upon units, average for period 82% 75% 80% 83% 78% 82% Monthly rental rate, average over period $ 366 $ 99 $ 308 $ 334 $ 98 $ 285 At June 30, 2007, our European rental fleet totaled approximately 16,400 units, at a utilization rate of 89% and an average rental rate of $124. Quarter Ended June 30, Six Months Ended June 30, Capital Expenditure Data (in thousands): 2007 2006 2007 2006 Lease fleet, net (a) $ 46,138 $ 27,306 $ 73,590 $ 53,819 Non-lease fleet 5,080 3,994 9,148 6,239 Acquisitions 1,116 � 43,755 5,123 Other Financial Data (at period end): June 30, 2007 Leverage Ratio (b) 3.93 x Leverage Ratio (c) 18.690 x Borrowing base availability under revolving credit facility (d) (in thousands) $ 161,201 (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 June 30, 2007, the Company's excess availability under the revolver was $161.2 million or $86.2 million in excess of the $75 million requirement Reconciliation of EBITDA for the quarter ended June 30, 2007 and 2006 to net income - the most comparable GAAP measure: Quarter Ended June 30, Six Months Ended June 30, 2007 2006 2007 2006 (in thousands) EBITDA (e) $ 65,293 $ 55,071 $ 122,252 $ 107,992 Less: Interest expense 19,001 17,824 38,007 35,345 Depreciation and amortization 22,200 18,408 43,326 36,844 Income tax provision 9,451 7,257 15,845 13,788 � Net income $ 14,641 $ 11,582 $ 25,074 $ 22,015 (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 June 30, 2007 (in thousands): Consolidated EBITDA � trailing 12 months (f) $ 247,891 Less: Interest expense 71,774 Depreciation and amortization 86,337 Income tax provision 28,075 Non-cash stock compensation expense 3,324 Loss on early extinguishment of debt 90 Pro forma EBITDA impact of acquisitions 6,117 Net income, trailing 12 months $ 52,174 (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.