Triton International Reports First Quarter 2019 Results: Adjusted EPS of $1.19, Quarterly Dividend of $0.52, and New $200 Million Share Repurchase AuthorizationRead More

HAMILTON, Bermuda--(BUSINESS WIRE)-- Triton International Limited (NYSE: TRTN) ('Triton')

First Quarter Highlights:

• Adjusted net income was $92.8 million or $1.19 per diluted share, an increase of 20.2% per diluted share from the first quarter of 2018 and a decrease of 4.8% per diluted share from the fourth quarter of 2018. Triton's first quarter results included several non-recurring items which in total contributed $0.04 per share.
• Net income attributable to common shareholders was $91.9 million or $1.17 per diluted share.
• Utilization averaged 97.6% in the first quarter of 2019.
• Triton raised gross proceeds of $86.3 million through an initial perpetual preferred equity offering in March 2019.
• Triton purchased 2.6 million common shares during the first quarter. As of April 22, 2019, Triton has repurchased 5.1 million shares under the share repurchased program authorized in August 2018.
• Triton announced the Board of Directors has authorized a new $200.0 million common share repurchase program.
• Triton announced a quarterly dividend of $0.52 per common share payable on June 27, 2019 to shareholders of record as of June 6, 2019.

Financial Results

The following table summarizes Triton's selected key financial information for the three months ended March 31, 2019, December 31, 2018, and March 31, 2018.

Operating Performance

'Triton achieved excellent results in the first quarter of 2019,' commented Brian M. Sondey, Chief Executive Officer of Triton. 'We generated $92.8 million of Adjusted net income in the first quarter, or $1.19 of Adjusted net income per share, and we realized an annualized Return on equity of 17.2%.'

'Triton's strong financial results in the first quarter were supported by our continued outstanding operating performance, and key operating metrics such as utilization and used container sale prices remained at high levels. However, new lease transaction activity and container pick-up volumes were slow throughout the first quarter and we have so far limited our purchases of new containers. The first quarter typically represents the depth of the slow season for dry containers, and this typical seasonal weakness has likely been compounded this year by increased uncertainty related to the ongoing trade dispute between the United States and China. We recently have seen some increase in lease inquiries, and new container prices have rebounded toward the $1,900 range for a 20' dry container, but the overall pace of leasing activity has not yet shifted to typical pre-peak season levels.'

'Triton has taken a number of actions this year to drive shareholder value. We repurchased 2.6 million shares of our common stock during the first quarter at values we believe are compelling, increasing our total purchases to 5.1 million shares since last summer. In addition, we repurchased the majority of the third-party investor interests in a partnership which owns a portfolio of containers in our fleet. We also completed an inaugural issuance of perpetual preferred stock. We believe the perpetual preferred stock provides an attractive combination of risk protection and cost, and will be a valuable addition to our capital structure. Overall, our strong cash flow, unrivaled operating capabilities and range of financing options continue to give us many levers to drive shareholder value.'

Outlook

'Our customers continue to expect trade growth will be moderately positive in 2019 and we expect leasing activity will accelerate as we move deeper into the second quarter, supporting our utilization and providing more investment opportunities. However, we do not expect the one-time items benefiting the first quarter to reoccur, and we transferred a large number of containers from short-term to long-term lease with one of our major customers, which will negatively impact our leasing revenue in the near-term but lead to an attractive and more secure long-term value for the containers. Overall, we expect our Adjusted net income per share will decrease slightly from the first quarter of 2019 to the second quarter, and then increase from the second quarter through the end of the year.'

Dividends

Triton's Board of Directors has approved a cash dividend of $0.53125 per share on its 8.5% Series A Preferred Shares (NYSE:TRTN-PA) payable June 17, 2019 to holders on record at the close of business as of June 10, 2019.

Triton's Board of Directors has approved and declared a $0.52 per share quarterly cash dividend on its issued and outstanding common shares, payable on June 27, 2019 to shareholders of record at the close of business on June 6, 2019.

Share Repurchase Update

As of April 22, 2019, we have repurchased approximately 5.1 million common shares under the share repurchase plan authorized in August 2018 for a total of $162.0 million at an average price per-share of $31.56. This represents 6.3% of the shares outstanding at the start of the repurchase plan. On April 25, 2019, Triton's Board of Directors authorized a new $200.0 million share repurchase program replacing the previous authorization.

Mr. Sondey concluded, 'We continue to view share repurchases as a compelling investment for the company and a high value use for our strong and stable equity cash flow. We believe the embedded value of our existing contractual lease streams and containers compare favorably to our current market valuation, even without considering the value of our best-in-class market leading franchise.'

Investors' Webcast

Triton will hold a Webcast at 8:30 a.m. (New York time) on Tuesday, April 30, 2019 to discuss its first quarter results. To listen by phone, please dial 1-877-418-5277 (domestic) or 1-412-717-9592 (international) approximately 15 minutes prior to the start time and reference the Triton International Limited conference call. To access the live Webcast please visit Triton's website at http://www.trtn.com. An archive of the Webcast will be available one hour after the live call.

About Triton International Limited

Triton International Limited is the world's largest lessor of intermodal freight containers. With a container fleet of 6.1 million twenty-foot equivalent units ('TEU'), Triton's global operations include acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis.

The following table sets forth the equipment fleet utilization for the periods indicated:

The following table summarizes the equipment fleet as of March 31, 2019, December 31, 2018 and March 31, 2018:

Important Cautionary Information Regarding Forward-Looking Statements

Certain statements in this release, other than statements of historical information, are 'forward-looking statements', including statements regarding our strategy, future operations, and future financial positions, within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that include the words 'expect,' 'estimate', 'anticipate,' 'predict', 'believe,' 'plan', 'will,' 'should', 'intend', 'seek', 'potential' and similar expressions and variations are intended to identify forward-looking statements, although not all forward looking statements contain these identifying words. All forward-looking statements address matters that involve risks and uncertainties, many of which are beyond Triton's control. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements.

These factors include, without limitation, economic, business, competitive, market and regulatory conditions and the following: uncertainty as to the long-term value of Triton's common shares; decreases in the demand for leased containers; decreases in market leasing rates for containers; difficulties in re-leasing containers after their initial fixed-term leases; our customers' decisions to buy rather than lease containers; our dependence on a limited number of customers for a substantial portion of our revenues; customer defaults; decreases in the selling prices of used containers; extensive competition in the container leasing industry; difficulties stemming from the international nature of our business; decreases in the demand for international trade; disruption to our operations resulting from the political and economic policies of the United States and other countries, particularly China, including but not limited to the impact of trade wars, tariffs and other trade actions; disruption to our operations from failures of, or attacks on, our information technology systems; our compliance or failure to comply with laws and regulations related to economic and trade sanctions, security, anti-terrorism, environmental protection and corruption; our ability to obtain sufficient capital to support our growth; restrictions imposed by the terms of our debt agreements; changes in tax laws in Bermuda, the United States and other countries and other risks and uncertainties, including those risk factors set forth in the section entitled 'Risk Factors' in our Annual Report on Form 10-K for the year ended December 31, 2018 (the 'Form 10-K') filed with the Securities and Exchange Commission ('SEC'), on February 19, 2019, in any Form 10-Q filed or to be filed by Triton, and in other documents we file with the SEC from time to time.

The foregoing list of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the risk factors set forth in our Form 10-K.. Any forward-looking statements made herein are qualified in their entirety by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on Triton or its business or operations. Except to the extent required by applicable law, we undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. Certain financial measures are identified as not being prepared in accordance with U.S. generally accepted accounting principles ('GAAP'). Please refer to the 'Use of Non-GAAP Financial Measures' and 'Non-GAAP Reconciliations of Adjusted Net Income' set forth below for a reconciliation of such non-GAAP measures to their most comparable GAAP measures.

-Financial Tables Follow-

Use of Non-GAAP Financial Measures

We use the term 'Adjusted net income' throughout this press release.

Adjusted net income is adjusted for certain items management believes are not representative of our operating performance. Adjusted net income is defined as net income attributable to shareholders excluding debt termination costs net of tax, gains and losses on interest rate swaps net of tax, transaction and other costs net of tax, and taxes adjustments related to the intra-entity transfer.

Adjusted net income is not a presentation made in accordance with U.S. GAAP. Adjusted net income should not be considered as an alternative to, or more meaningful than, amounts determined in accordance with U.S. GAAP, including net income.

We believe that Adjusted net income is useful to an investor in evaluating our operating performance because this measure:

• is widely used by securities analysts and investors to measure a company's operating performance;
• helps investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the impact of our capital structure, our asset base and certain non-routine events which we do not expect to occur in the future; and
• is used by our management for various purposes, including as measures of operating performance and liquidity, to assist in comparing performance from period to period on a consistent basis, in presentations to our board of directors concerning our financial performance and as a basis for strategic planning and forecasting.

We have provided a reconciliation of net income attributable to shareholders, the most directly comparable U.S. GAAP measure, to Adjusted net income in the table below for the three months ended March 31, 2019, December 31, 2018, and March 31, 2018.

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Andrew Greenberg
Senior Vice President
Finance & Investor Relations
[phone]

Source: Triton International Limited