W.SCOTSMAN INTL 
By Williams Scotsman International, Inc. (NASDAQ:WLSC), a leading provider of modular space solutions, reported today its financial results for the fourth quarter and year ended December 31, 2006.
- We achieved an increase in total revenues for 2006 of 15% on strong performance from all customer sectors and geographic regions
- Increased EBITDA to $224 million for the year and $57.1 million for the fourth quarter
- Net income of $49 million for the year and $11.0 million for the fourth quarter resulting in earnings per share of $1.15 and $0.25 for the year and fourth quarter, respectively
- For 2007, we expect to grow net income in the range of 18% to 23 %, and increase earnings per share in the range of 13% to 18 % on a comparable basis with 2006, after excluding the favorable impact of tax adjustments made in 2006.
Gerry Holthaus, Chairman, President and CEO, commented, ?Our financial performance in 2006 exceeded our expectations as we achieved record earnings results for the year. Our leasing business continues to show strong results as indicated by our 18% improvement in revenue and a 2.8 percentage point increase in gross margins from the prior year. We are focused on our continued efforts to sustain and build relationships in areas such as the education, healthcare and government arenas which have had a positive effect on both our leasing and sales performance. We are also excited about our expansion in our foreign markets, which increase our geographic diversity, with our recent acquisitions in Spain and Mexico and the continued growth experienced in Canada. Our success in 2006 could not have been accomplished without the dedication and industry expertise of our Williams Scotsman employees throughout the Company.
We are excited about our 2006 results and look forward to continued growth for Williams Scotsman into 2007 and beyond as we continue to drive the expansion of our business platform.?
Annual Results
Revenues for the year ended December 31, 2006 were $680.8 million, a 15% increase from the prior year. Leasing revenues increased 18% driven primarily by our North American operations resulting from a North American increase in average units on rent of approximately 3,200 units and an increase in the average rental rate for the year ended December 31, 2006 from $263 to $289 or $26. The increase in units on rent is attributable to overall business improvement across all North American regions including the Canadian oil and gas sector, the contribution from fleet acquisitions since last year and increased demand for our portable storage product. Utilization of our North American modular equipment fleet increased 1.7 percentage points to 83% from the prior year, which resulted in total average fleet utilization increasing to approximately 82% in North America for the year ended December 31, 2006. The average rental rate of the North American modular equipment fleet increased from $309 to $342 for the year. Sales of new units and rental equipment increased by 15% as compared to the prior year as a result of large sales in the first half of 2006 under U.S. military contracts, strong unit sales in the western and Canadian regions and strong sales related to the impact of Hurricane Katrina.
Gross profit margins increased by $63.2 million or 29% to $281.8 million while the gross profit margin percentage increased 4.5 percentage points for the year to 41.4%. The Company reported net income for the year ended December 31, 2006 of $49.1 million or $1.15 per diluted share as compared to a net loss of ($10.3) million or ($0.37) per diluted share for the year ended December 31, 2005. Net income for the year ended December 31, 2006 includes the impact of favorable tax adjustments of $3.0 million resulting from a net reduction of the company's tax valuation allowance related to net operating loss carryforwards as a result of changes in estimates of taxable income, as well as the decrease in income tax expense and corresponding decrease in cumulative deferred tax liabilities from reductions to enacted Canadian income tax rates. For the year ended December 31, 2005, the Company recorded a loss on early extinguishment of debt of $30.7 million and a $2.4 million non-cash stock compensation charge related to the Company's initial public offering. The effect of these charges was a reduction of net income of $20.2 million (net of related tax benefit of $12.9 million) or $0.73 per share. Net income for the year ended December 31, 2006 and December 31, 2005 excluding these items was $46.1 million or $1.08 per diluted share and $9.9 million or $0.35 per diluted share, respectively.
Fourth Quarter Results
Revenues for the three months ended December 31, 2006 were $169.1 million, a 1% increase from the prior year. This result is primarily due to our leasing revenues increasing by 18% offset by sales of new units and rental equipment decreasing by 20% compared with the prior year. The leasing revenue increase resulted from our North American average units on rent increasing approximately 2000 units and an increase in the average rental rate for the quarter by 9% from $272 to $297. Average fleet utilization of approximately 82% in North America for the quarter compared to 83% in the same period of the prior year. Sales of new units and rental equipment decreased by 20% as compared to the prior year quarter as a result of a single large sale under a U.S. military contract and a large sale in the hurricane affected region during the fourth quarter of 2005 partially offset by continued strong unit sales in the western and Canadian regions of the Company in 2006.
Gross profit margins increased by $13.1 million or 21% to $74.2 million while the gross profit margin percentage increased 7 percentage points for the quarter to 44%. This increase was primarily the result of leasing gross margins which improved to 60% during the quarter from 55% in the fourth quarter of 2005 primarily due to increases in leasing revenue discussed above. We reported net income for the quarter of $11.0 million or $0.25 per diluted share as compared to net income of $7.8 million or $0.20 per diluted share for the prior year quarter.
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 first quarter and year ending December 31, 2007:
(in millions, except per share data) | ||||||||||||
| Quarter Ended | Year Ended | |||||||||||
March 31, 2007 | December 31, 2007 | |||||||||||
| Low | High | Low | High | |||||||||
| Range | Range | |||||||||||
| Operating income | $ | 32.7 | $ | 34.3 | $ | 162.6 | $ | 166.6 | ||||
| Depreciation and amortization | 21.2 | 21.2 | 88.7 | 88.7 | ||||||||
| Net income | 8.6 | 9.5 | 53.3 | 55.8 | ||||||||
| Earnings per share - diluted | 0.20 | 0.22 | 1.20 | 1.25 | ||||||||
| Capital expenditures (excluding acquisitions) | $ | 35.0 | $ | 40.0 | $ | 135.0 | $ | 145.0 | ||||
Comparison to 2006
First quarter 2006 includes a single large U.S. military sale, the impact of which we do not expect to reoccur in the first quarter of 2007. The 2006 first quarter also includes a contribution related to the early-stage recovery efforts in the hurricane-affected region of the country, which we do not expect to repeat in 2007. Lastly, as noted earlier, 2006 full year results include approximately $3.0 million of favorable tax adjustments not expected to occur in 2007. The following table illustrates the estimated impact of these items on reported 2006 results:
(in millions, except per share data) | ||||||||||||
| Quarter ended | Year ended | |||||||||||
| March 31, 2006 | December 31, 2006 | |||||||||||
| Net income | Earnings per Share | Net Income | Earnings per share | |||||||||
| Reported amounts | $ | 10.4 | $ | 0.26 | $ | 49.1 | $ | 1.15 | ||||
| Timing transaction: | ||||||||||||
| U.S. military sale | (2.0) | (0.05) | - | - | ||||||||
| Hurricane impact | (0.8) | (0.02) | (0.8) | (0.02) | ||||||||
| Income tax adjustment | - | - | (3.0) | (0.07) | ||||||||
| As adjusted | $ | 7.6 | $ | 0.19 | $ | 45.3 | $ | 1.06 | ||||
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 February 9, 2007, at 10:00 AM Eastern Time to discuss its year end and fourth quarter results. To participate in the conference call, dial 800-709-0218 for domestic (415-537-1823) for international) and ask to be placed into the Williams Scotsman call. To listen to a live 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 February 23, 2007. To access the replay, domestic callers can dial 800-633-8284 and enter access code 21326794 (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 25,000 customers, operating a fleet of over 115,000 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. The company was selected to NASDAQ's Global Select Market for achieving high-quality listing standards among the marketplace. 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) | ||||||
| December 31, | December 31, | |||||
| 2006 | 2005 | |||||
| (Unaudited) | ||||||
| Assets | ||||||
| Cash | $ | 6,495 | $ | 469 | ||
| Trade accounts receivable, net | 120,586 | 94,661 | ||||
| Prepaid expenses and other current assets | 52,938 | 46,630 | ||||
| Rental equipment, net | 1,066,469 | 944,629 | ||||
| Property and equipment, net | 92,992 | 81,177 | ||||
| Deferred financing costs, net | 19,277 | 18,042 | ||||
| Goodwill and other intangible assets | 199,788 | 173,535 | ||||
| Other assets, net | 29,374 | 21,477 | ||||
| Total assets | $ | 1,587,919 | $ | 1,380,620 | ||
| Liabilities and stockholders' equity | ||||||
| Accounts payable | $ | 58,964 | $ | 60,685 | ||
| Accrued expenses and other current liabilities | 50,834 | 27,862 | ||||
| Accrued interest | 12,887 | 13,245 | ||||
| Rents billed in advance | 25,031 | 23,621 | ||||
| Revolving credit facility | 296,892 | 364,150 | ||||
| Long-term debt, net | 619,464 | 505,296 | ||||
| Deferred income taxes | 155,706 | 141,020 | ||||
| Total liabilities | 1,219,778 | 1,135,879 | ||||
| Stockholders' equity: | ||||||
| Common stock | 557 | 519 | ||||
| Additional paid-in capital | 545,124 | 471,406 | ||||
| Retained earnings | 100,964 | 51,846 | ||||
| Accumulated other comprehensive income | 17,434 | 16,908 | ||||
| 664,079 | 540,679 | |||||
| Less treasury stock | (295,938) | (295,938) | ||||
| Total stockholders' equity | 368,141 | 244,741 | ||||
| Total liabilities and stockholders' equity | $ | 1,587,919 | $ | 1,380,620 | ||
| Williams Scotsman International, Inc. | ||||||||||||
| Consolidated Statements of Operations (unaudited) | ||||||||||||
| Quarter ended | Year ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||
| (In thousands except share and per share amounts) | ||||||||||||
| Revenues | ||||||||||||
| Leasing | $ | 77,925 | $ | 66,077 | $ | 291,701 | $ | 247,713 | ||||
| Sales: | ||||||||||||
| New units | 32,160 | 44,786 | 139,815 | 128,244 | ||||||||
| Rental equipment | 13,137 | 11,705 | 51,171 | 37,530 | ||||||||
| Delivery and installation | 33,334 | 34,360 | 147,762 | 135,715 | ||||||||
| Other | 12,568 | 10,938 | 50,351 | 43,256 | ||||||||
| Total revenues | 169,124 | 167,866 | 680,800 | 592,458 | ||||||||
| Costs of sales and services | ||||||||||||
| Leasing: | ||||||||||||
| Depreciation and amortization | 14,684 | 14,179 | 57,908 | 52,614 | ||||||||
| Other direct leasing costs | 16,698 | 15,431 | 66,391 | 59,932 | ||||||||
| Sales: | ||||||||||||
| New units | 25,562 | 36,262 | 109,403 | 105,377 | ||||||||
| Rental equipment | 9,150 | 8,840 | 36,580 | 28,909 | ||||||||
| Delivery and installation | Share
© Business Wire - 2007
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