Key Financial Information (in thousands except for per share and TEU amounts) (1) and Business Highlights:
QTD | Full-Year | |||||||||||||||||||
Q4 2023 | Q3 2023 | Q4 2022 | 2023 | 2022 | ||||||||||||||||
Total lease rental income | $ | 190,830 | $ | 192,497 | $ | 202,912 | $ | 770,391 | $ | 810,014 | ||||||||||
Gain on sale of owned fleet containers, net | $ | 3,967 | $ | 5,197 | $ | 15,033 | $ | 26,415 | $ | 76,947 | ||||||||||
Income from operations | $ | 82,277 | $ | 92,165 | $ | 111,544 | $ | 372,499 | $ | 472,399 | ||||||||||
Net income attributable to common shareholders | $ | 35,160 | $ | 44,677 | $ | 61,854 | $ | 184,795 | $ | 289,549 | ||||||||||
Net income attributable to common shareholders per diluted common share | $ | 0.84 | $ | 1.07 | $ | 1.38 | $ | 4.33 | $ | 6.12 | ||||||||||
Adjusted net income (1) | $ | 47,276 | $ | 45,410 | $ | 61,993 | $ | 197,641 | $ | 289,946 | ||||||||||
Adjusted net income per diluted common share (1) | $ | 1.13 | $ | 1.08 | $ | 1.38 | $ | 4.63 | $ | 6.13 | ||||||||||
Adjusted EBITDA (1) | $ | 154,237 | $ | 160,454 | $ | 179,464 | $ | 644,634 | $ | 745,514 | ||||||||||
Average fleet utilization (2) | 99.2 | % | 99.0 | % | 99.0 | % | 98.9 | % | 99.4 | % | ||||||||||
Total fleet size at end of period (TEU) (3) | 4,285,206 | 4,329,157 | 4,425,300 | 4,285,206 | 4,425,300 | |||||||||||||||
Owned percentage of total fleet at end of period | 94.0 | % | 93.9 | % | 93.6 | % | 94.0 | % | 93.6 | % |
(1) | Refer to the “Use of Non-GAAP Financial Information” set forth below. | ||
(2) | Utilization is computed by dividing total units on lease in CEUs (cost equivalent unit) by the total units in our fleet in CEUs, excluding CEUs that have been designated as held for sale and units manufactured for us but not yet delivered to a lessee. CEU is a unit of measurement based on the approximate cost of a container relative to the cost of a standard 20-foot dry container. These factors may differ from CEU ratios used by others in the industry. | ||
(3) | TEU refers to a twenty-foot equivalent unit, which is a unit of measurement used in the container shipping industry to compare shipping containers of various lengths to a standard 20-foot container, thus a 20-foot container is one TEU and a 40-foot container is two TEU. | ||
- Net income of
$184.8 million for the full year, or$4.33 per diluted common share, and$35.2 million for the fourth quarter of 2023, or$0.84 per diluted common share; - Adjusted net income of
$197.6 million for the full year, or$4.63 per diluted common share, as compared to$289.9 million , or$6.13 per diluted common share in the prior year. Adjusted net income of$47.3 million for the fourth quarter of 2023, or$1.13 per diluted common share, as compared to$45.4 million , or$1.08 per diluted common share in the third quarter of 2023; - Adjusted EBITDA of
$644.6 million for the full year, as compared to$745.5 million in the prior year. Adjusted EBITDA of$154.2 million for the fourth quarter of 2023, as compared to$160.5 million in the third quarter of 2023; - Fourth quarter average and current utilization rate of 99.2% and 99.5%, respectively;
- Added
$169.4 million of new containers during 2023, virtually all assigned to long-term leases; - On
October 22, 2023 ,Textainer announced it had entered into a definitive agreement to be acquired by Stonepeak in a transaction expected to close in the first quarter of 2024, subject to customary closing conditions, including approval by Textainer’s shareholders and other required regulatory clearances and approvals; - Repurchased 3,411,296 common shares at an average price of
$36.31 per share during the first nine months of 2023.Textainer suspended its share repurchase program inSeptember 2023 in light of the pending transaction with Stonepeak; - Textainer’s board of directors, approved and declared a quarterly preferred cash dividend on its 7.00% Series A and its 6.25% Series B cumulative redeemable perpetual preference shares, payable on
March 15, 2024 , to holders of record as ofMarch 1, 2024 ; and - Textainer’s board of directors, approved and declared a
$0.30 per common share cash dividend, payable onMarch 15, 2024 to holders of record as ofMarch 1, 2024 .
“We delivered solid full-year and fourth quarter 2023 results, demonstrating the strength in our business fundamentals. For the full year, lease rental income decreased by 5% to
“We are incredibly excited about our pending transaction to be acquired by Stonepeak. We believe this acquisition provides a compelling value for our shareholders, while also benefiting the
Transaction with Stonepeak
As previously announced on
Textainer’s special shareholder meeting to approve the Stonepeak transaction is scheduled on
In light of the pending transaction,
About
Important Cautionary Information Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of
Textainer’s views, estimates, plans and outlook as described within this document may change subsequent to the release of this press release.
Additional Information and Where to Find It
In connection with the special shareholder meeting to approve the proposed Stonepeak transaction,
Investors and security holders will be able to obtain copies of these materials and other documents containing important information about
No Offer or Solicitation
This communication is for information purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.
Participants in the Solicitation
Investor Relations
Phone: +1 (415) 658-8333
ir@textainer.com
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(Unaudited) | |||||||||||||||
(All currency expressed in | |||||||||||||||
Three Months Ended | Years Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Revenues: | |||||||||||||||
Operating leases - owned fleet | $ | 141,525 | $ | 151,936 | $ | 572,611 | $ | 609,558 | |||||||
Operating leases - managed fleet | 10,107 | 11,994 | 42,315 | 49,635 | |||||||||||
Finance leases and container leaseback financing receivable - owned fleet | 39,198 | 38,982 | 155,465 | 150,821 | |||||||||||
Total lease rental income | 190,830 | 202,912 | 770,391 | 810,014 | |||||||||||
Management fees - non-leasing | 512 | 897 | 2,486 | 2,812 | |||||||||||
Trading container sales proceeds | 3,848 | 4,990 | 16,987 | 23,791 | |||||||||||
Cost of trading containers sold | (3,757 | ) | (4,904 | ) | (16,546 | ) | (21,939 | ) | |||||||
Trading container margin | 91 | 86 | 441 | 1,852 | |||||||||||
Gain on sale of owned fleet containers, net | 3,967 | 15,033 | 26,415 | 76,947 | |||||||||||
Operating expenses: | |||||||||||||||
Direct container expense - owned fleet | 10,709 | 10,965 | 41,284 | 31,980 | |||||||||||
Distribution expense to managed fleet container investors | 9,006 | 10,723 | 37,652 | 44,150 | |||||||||||
Depreciation and amortization | 67,498 | 74,140 | 283,549 | 292,828 | |||||||||||
General and administrative expense | 25,721 | 11,898 | 66,220 | 48,349 | |||||||||||
Bad debt expense (recovery), net | 40 | (3 | ) | (563 | ) | 740 | |||||||||
Container lessee default expense (recovery), net | 149 | (339 | ) | (908 | ) | 1,179 | |||||||||
Total operating expenses | 113,123 | 107,384 | 427,234 | 419,226 | |||||||||||
Income from operations | 82,277 | 111,544 | 372,499 | 472,399 | |||||||||||
Other (expense) income: | |||||||||||||||
Interest expense | (42,317 | ) | (43,105 | ) | (170,336 | ) | (157,249 | ) | |||||||
Debt termination expense | (366 | ) | — | (366 | ) | — | |||||||||
Realized (loss) gain on financial instruments, net | — | (91 | ) | 15 | (91 | ) | |||||||||
Unrealized (loss) gain on financial instruments, net | — | (176 | ) | 3 | (502 | ) | |||||||||
Other, net | 2,279 | 658 | 8,545 | 2,406 | |||||||||||
Net other expense | (40,404 | ) | (42,714 | ) | (162,139 | ) | (155,436 | ) | |||||||
Income before income taxes | 41,873 | 68,830 | 210,360 | 316,963 | |||||||||||
Income tax expense | (1,744 | ) | (2,007 | ) | (5,690 | ) | (7,539 | ) | |||||||
Net income | 40,129 | 66,823 | 204,670 | 309,424 | |||||||||||
Less: Dividends on preferred shares | 4,969 | 4,969 | 19,875 | 19,875 | |||||||||||
Net income attributable to common shareholders | $ | 35,160 | $ | 61,854 | $ | 184,795 | $ | 289,549 | |||||||
Net income attributable to common shareholders per share: | |||||||||||||||
Basic | $ | 0.86 | $ | 1.40 | $ | 4.43 | $ | 6.23 | |||||||
Diluted | $ | 0.84 | $ | 1.38 | $ | 4.33 | $ | 6.12 | |||||||
Weighted average shares outstanding (in thousands): | |||||||||||||||
Basic | 41,014 | 44,149 | 41,736 | 46,471 | |||||||||||
Diluted | 41,763 | 44,938 | 42,710 | 47,299 | |||||||||||
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||
Consolidated Balance Sheets | ||||||||
(Unaudited) | ||||||||
(All currency expressed in | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 131,135 | $ | 164,818 | ||||
Marketable securities | — | 1,411 | ||||||
Accounts receivable, net of allowance of | 102,423 | 114,805 | ||||||
Net investment in finance leases, net of allowance of | 136,568 | 130,913 | ||||||
Container leaseback financing receivable, net of allowance of | 55,981 | 53,652 | ||||||
Trading containers | 2,327 | 4,848 | ||||||
Containers held for sale | 28,548 | 31,637 | ||||||
Prepaid expenses and other current assets | 8,389 | 16,703 | ||||||
Due from affiliates, net | 2,928 | 2,758 | ||||||
Total current assets | 468,299 | 521,545 | ||||||
Restricted cash | 92,465 | 102,591 | ||||||
Containers, net of accumulated depreciation of | 3,975,669 | 4,365,124 | ||||||
Net investment in finance leases, net of allowance of | 1,605,516 | 1,689,123 | ||||||
Container leaseback financing receivable, net of allowance of | 807,048 | 770,980 | ||||||
Derivative instruments | 109,452 | 149,244 | ||||||
Deferred taxes | 520 | 1,135 | ||||||
Other assets | 21,856 | 13,492 | ||||||
Total assets | $ | 7,080,825 | $ | 7,613,234 | ||||
Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 27,080 | $ | 24,160 | ||||
Container contracts payable | 3,256 | 6,648 | ||||||
Other liabilities | 5,316 | 5,060 | ||||||
Due to container investors, net | 12,820 | 16,132 | ||||||
Debt, net of unamortized costs of | 354,650 | 377,898 | ||||||
Total current liabilities | 403,122 | 429,898 | ||||||
Debt, net of unamortized costs of | 4,639,155 | 5,127,021 | ||||||
Derivative instruments | 2,911 | — | ||||||
Income tax payable | 13,703 | 13,196 | ||||||
Deferred taxes | 11,682 | 13,105 | ||||||
Other liabilities | 28,902 | 33,725 | ||||||
Total liabilities | 5,099,475 | 5,616,945 | ||||||
Equity: | ||||||||
Cumulative redeemable perpetual preferred shares, per share. Authorized 10,000,000 shares; 12,000 shares issued and outstanding (equivalent to 12,000,000 depositary shares at | 300,000 | 300,000 | ||||||
Common shares, and 41,348,793 shares outstanding at outstanding at | 611 | 599 | ||||||
(461,711 | ) | (337,551 | ) | |||||
Additional paid-in capital | 460,421 | 442,154 | ||||||
Accumulated other comprehensive income | 105,203 | 147,350 | ||||||
Retained earnings | 1,576,826 | 1,443,737 | ||||||
Total shareholders’ equity | 1,981,350 | 1,996,289 | ||||||
Total liabilities and shareholders' equity | $ | 7,080,825 | $ | 7,613,234 | ||||
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES | ||||||||
Consolidated Statements of Cash Flows | ||||||||
(Unaudited) | ||||||||
(All currency expressed in | ||||||||
Years Ended | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 204,670 | $ | 309,424 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 283,549 | 292,828 | ||||||
Bad debt (recovery) expense, net | (563 | ) | 740 | |||||
Container (recovery) write-off from lessee default, net | (1,160 | ) | 1,910 | |||||
Unrealized (gain) loss on financial instruments, net | (3 | ) | 502 | |||||
Amortization of unamortized debt issuance costs and accretion of bond discounts | 9,224 | 10,129 | ||||||
Debt termination expense | 366 | — | ||||||
Gain on sale of owned fleet containers, net | (26,415 | ) | (76,947 | ) | ||||
Share-based compensation expense | 13,432 | 7,728 | ||||||
Changes in operating assets and liabilities | 146,386 | 206,205 | ||||||
Total adjustments | 424,816 | 443,095 | ||||||
Net cash provided by operating activities | 629,486 | 752,519 | ||||||
Cash flows from investing activities: | ||||||||
Purchase of containers | (76,795 | ) | (403,783 | ) | ||||
Payment on container leaseback financing receivable | (96,005 | ) | (533,867 | ) | ||||
Proceeds from sale of containers | 152,693 | 199,158 | ||||||
Receipt of principal payments on container leaseback financing receivable | 58,454 | 59,719 | ||||||
Other | 14 | (2,538 | ) | |||||
Net cash provided by (used in) investing activities | 38,361 | (681,311 | ) | |||||
Cash flows from financing activities: | ||||||||
Proceeds from debt | 119,000 | 989,650 | ||||||
Payments on debt | (636,572 | ) | (831,010 | ) | ||||
Payment of debt issuance costs | (3,132 | ) | (4,370 | ) | ||||
Principal repayments on container leaseback financing liability, net | (816 | ) | (799 | ) | ||||
Purchase of treasury shares | (124,160 | ) | (179,092 | ) | ||||
Issuance of common shares upon exercise of share options | 9,825 | 5,485 | ||||||
Share repurchase to settle shareholder tax obligations | (4,978 | ) | — | |||||
Dividends paid on common shares | (51,068 | ) | (46,235 | ) | ||||
Dividends paid on preferred shares | (19,875 | ) | (19,875 | ) | ||||
Net cash used in financing activities | (711,776 | ) | (86,246 | ) | ||||
Effect of exchange rate changes | 120 | (125 | ) | |||||
Net change in cash, cash equivalents and restricted cash | (43,809 | ) | (15,163 | ) | ||||
Cash, cash equivalents and restricted cash, beginning of the year | 267,409 | 282,572 | ||||||
Cash, cash equivalents and restricted cash, end of the year | $ | 223,600 | $ | 267,409 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Interest paid | $ | 160,048 | $ | 144,637 | ||||
Income taxes paid | $ | 2,551 | $ | 815 | ||||
Receipt of payments on finance leases, net of income earned | $ | 136,901 | $ | 193,157 | ||||
Supplemental disclosures of noncash investing activities: | ||||||||
Decrease in accrued container purchases | $ | 3,392 | $ | 134,320 | ||||
Containers placed in finance leases | $ | 57,056 | $ | 219,813 |
Use of Non-GAAP Financial Information
To supplement Textainer’s consolidated financial statements presented in accordance with
Management believes that adjusted net income and adjusted net income per diluted common share are useful in evaluating Textainer’s operating performance. Adjusted net income is defined as net income attributable to common shareholders excluding unrealized gain (loss) on marketable securities and the related impacts on income taxes. Additionally, adjusted net income excludes transaction and other costs associated with the proposed acquisition, costs associated with departing employees, debt termination expense, and the related impacts on income taxes as they are not normal, recurring operating expenses. Management considers adjusted EBITDA a widely used industry measure and useful in evaluating Textainer’s ability to fund growth and service long-term debt and other fixed obligations. Headline earnings is reported as a requirement of Textainer’s listing on the JSE. Headline earnings and headline earnings per basic and diluted common shares are calculated from net income which has been determined based on GAAP.
Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the tables below for the three and twelve months ended
Non-GAAP measures are not financial measures calculated in accordance with GAAP and are presented solely as supplemental disclosures. Non-GAAP measures have limitations as analytical tools, and should not be relied upon in isolation, or as a substitute to net income, income from operations, cash flows from operating activities, or any other performance measures derived in accordance with GAAP. Some of these limitations are:
- They do not reflect cash expenditures, or future requirements, for capital expenditures or contractual commitments;
- They do not reflect changes in, or cash requirements for, working capital needs;
- Adjusted EBITDA does not reflect interest expense or cash requirements necessary to service interest or principal payments on debt;
- Although depreciation expense and container impairment are a non-cash charge, the assets being depreciated may be replaced in the future, and neither adjusted EBITDA, adjusted net income or adjusted net income per diluted common share reflects any cash requirements for such replacements;
- They are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows; and
- Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.
Three Months Ended, | Years Ended, | |||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
(Dollars in thousands, | (Dollars in thousands, | |||||||||||||||||||
except per share amounts) | except per share amounts) | |||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
Reconciliation of adjusted net income: | ||||||||||||||||||||
Net income attributable to common shareholders | $ | 35,160 | $ | 44,677 | $ | 61,854 | $ | 184,795 | $ | 289,549 | ||||||||||
Adjustments: | ||||||||||||||||||||
Transaction and other costs (including net income tax impact on 162(m) and 280G) | 10,818 | 733 | — | 11,551 | — | |||||||||||||||
Costs associated with departing employees | 973 | 973 | ||||||||||||||||||
Debt termination expense | 366 | — | — | 366 | — | |||||||||||||||
Unrealized loss (gain) on marketable securities, net | — | — | 176 | (3 | ) | 502 | ||||||||||||||
Impact of reconciling items on income tax | (41 | ) | — | (37 | ) | (41 | ) | (105 | ) | |||||||||||
Adjusted net income | $ | 47,276 | $ | 45,410 | $ | 61,993 | $ | 197,641 | $ | 289,946 | ||||||||||
Adjusted net income per diluted common share | $ | 1.13 | $ | 1.08 | $ | 1.38 | $ | 4.63 | $ | 6.13 | ||||||||||
Three Months Ended, | Years Ended, | |||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
Reconciliation of adjusted EBITDA: | ||||||||||||||||||||
Net income attributable to common shareholders | $ | 35,160 | $ | 44,677 | $ | 61,854 | $ | 184,795 | $ | 289,549 | ||||||||||
Adjustments: | ||||||||||||||||||||
Interest income | (2,266 | ) | (2,357 | ) | (1,818 | ) | (9,090 | ) | (3,261 | ) | ||||||||||
Interest expense | 42,317 | 43,751 | 43,105 | 170,336 | 157,249 | |||||||||||||||
Debt termination expense | 366 | — | — | 366 | — | |||||||||||||||
Unrealized loss (gain) on marketable securities, net | — | — | 176 | (3 | ) | 502 | ||||||||||||||
Income tax expense | 1,744 | 1,124 | 2,007 | 5,690 | 7,539 | |||||||||||||||
Depreciation and amortization | 67,498 | 73,686 | 74,140 | 283,549 | 292,828 | |||||||||||||||
Container (recovery) write-off from lessee default, net | — | (1,160 | ) | — | (1,160 | ) | 1,108 | |||||||||||||
Transaction and other costs | 8,445 | 733 | — | 9,178 | — | |||||||||||||||
Cost associated with departing employees | 973 | — | — | 973 | — | |||||||||||||||
Adjusted EBITDA | $ | 154,237 | $ | 160,454 | $ | 179,464 | $ | 644,634 | $ | 745,514 | ||||||||||
Three Months Ended, | Years Ended, | |||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
(Dollars in thousands, | (Dollars in thousands, | |||||||||||||||||||
except per share amount) | except per share amount) | |||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
Reconciliation of headline earnings: | ||||||||||||||||||||
Net income attributable to common shareholders | $ | 35,160 | $ | 44,677 | $ | 61,854 | $ | 184,795 | $ | 289,549 | ||||||||||
Adjustments: | ||||||||||||||||||||
Container (recovery) write-off from lessee default, net | — | (1,160 | ) | — | (1,160 | ) | 1,108 | |||||||||||||
Transaction and other costs (including net income tax impact on 162(m) and 280G) | 10,818 | 733 | — | 11,551 | — | |||||||||||||||
Cost associated with departing employees | 973 | — | — | 973 | — | |||||||||||||||
Impact of reconciling items on income tax | (38 | ) | 10 | — | (28 | ) | (10 | ) | ||||||||||||
Headline earnings | $ | 46,913 | $ | 44,260 | $ | 61,854 | $ | 196,131 | $ | 290,647 | ||||||||||
Headline earnings per basic common share | $ | 1.14 | $ | 1.08 | $ | 1.40 | $ | 4.70 | $ | 6.25 | ||||||||||
Headline earnings per diluted common share | $ | 1.12 | $ | 1.06 | $ | 1.38 | $ | 4.59 | $ | 6.14 |
Source:
2024 GlobeNewswire, Inc., source