92 unchanged sentences
We have engaged in acquisitions and may engage in future acquisitions that could negatively impact our results of operations, financial condition and business.
−Removed: In the second quarter 2021, we acquired the assets of Design Space Modular Buildings PNW, LP (“Design Space”), a provider of modular buildings and portable storage containers for rental and sale to customers in the West and Pacific Northwest states in the U.S.
−Removed: and GRS Holding LLC, DBA Kitchens to Go (“Kitchens To Go”), a provider of interim and permanent modular solutions for foodservice providers that require flexible facilities to continue or expand operations.
+Added: In the first quarter of 2023, the Company acquired Vesta Modular, a portfolio company of Kinderhook Industries, that is a leading provider of temporary and permanent modular space solutions, and the assets of Brekke Storage, that is a regional provider of portable storage solutions in the Colorado market.
We anticipate that we will continue to consider acquisitions in the future that meet our strategic growth plans.
28 unchanged sentences
Any of these items could adversely affect our results of operations.
+Added: We continually assess the strategic fit of our existing businesses and may divest or otherwise dispose of businesses that are deemed not to fit with our strategic plan or are not achieving the desired return on investment, and we cannot be certain that our business, operating results and financial condition will not be materially and adversely affected.
+Added: A successful divestiture depends on various factors, including reaching an agreement with potential buyers on terms we deem attractive, as well as our ability to effectively transfer liabilities, contracts, facilities, and employees to any purchaser, identify and separate the assets to be divested from the assets that we wish to retain, reduce fixed costs previously associated with the divested assets or business, and collect the proceeds from any divestitures.
+Added: These efforts require varying levels of management resources, which may divert our attention from other business operations.
+Added: If we do not realize the expected benefits of any divestiture transaction, our consolidated financial position, results of operations and cash flows could be negatively impacted.
+Added: In addition, divestitures of businesses involve a number of risks, including significant costs and expenses, the loss of customer relationships and a decrease in revenues and
+Added: earnings associated with the divested business.
+Added: Furthermore, divestitures potentially involve significant post-closing separation activities, which could involve the expenditure of material financial resources and significant employee resources.
+Added: Any divestiture may result in a dilutive impact to our future earnings if we are unable to offset the dilutive impact from the loss of revenue associated with the divestiture, as well as significant write-offs, including those related to goodwill and other intangible assets, which could have a material adverse effect on our results of operations and financial condition.
If we determine that our goodwill and intangible assets have become impaired, we may incur impairment charges, which would negatively impact our operating results.
−Removed: At September 30, 2022, we had $174.9 million of goodwill and intangible assets, net, on our consolidated balance sheets.
+Added: At March 31, 2023, we had $391.9 million of goodwill and intangible assets, net, on our consolidated balance sheets.
Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations.
27 unchanged sentences
Modular asset management requires designing and building the product for a long life that anticipates the needs of our customers, including anticipating potential changes in legislation, regulations, building codes and local permitting in the various markets in which the Company operates.
−Removed: Electronic test equipment asset management requires understanding, selecting and investing in equipment technologies that support market demand, including anticipating technological advances and changes in manufacturers’
+Added: Electronic test equipment asset management requires understanding, selecting and investing in equipment technologies that support market demand, including anticipating
+Added: technological advances and changes in manufacturers’
selling prices.
9 unchanged sentences
properties or at third party landfill and disposal sites.
−Removed: These liabilities can be imposed on the parties generating, transporting or disposing of such substances or on the owner or operator of any
−Removed: affected property, often without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous substances.
+Added: These liabilities can be imposed on the parties generating, transporting or disposing of such substances or on the owner or operator of any affected property, often without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous substances.
Several aspects of our businesses involve risks of environmental and health and safety liability.
24 unchanged sentences
Even if the outcome of a claim proves favorable to us, litigation can be time consuming and costly and may divert management resources.
−Removed: In addition, our organizational documents require us to indemnify our senior executives to the maximum extent permitted by California law.
+Added: In addition, our
+Added: organizational documents require us to indemnify our senior executives to the maximum extent permitted by California law.
We maintain directors’
8 unchanged sentences
We believe our insurance policies have adequate limits and deductibles to mitigate the potential loss exposure of our business.
−Removed: We do not maintain financial reserves for policy deductibles and our insurance policies contain exclusions that are customary for our industry, including
−Removed: exclusions for earthquakes, flood and terrorism.
+Added: We do not maintain financial reserves for policy deductibles and our insurance policies contain exclusions that are customary for our industry, including exclusions for earthquakes, flood and terrorism.
If any of our facilities or a significant amount of our rental equipment were to experience a catastrophic loss, it could disrupt our operations, delay orders, shipments and revenue recognition and result in expenses to repair or replace the damaged rental equipment and facility not covered by insurance, which could have a material adverse effect on our results of operations.
2 unchanged sentences
If we have an event of default under these instruments, our indebtedness could be accelerated, and we may not be able to refinance such indebtedness or make the required accelerated payments.
−Removed: The agreements governing our Series C, D and E Senior Notes (as defined and more fully described under the heading “Item 7.
+Added: The agreements governing our Series D and E Senior Notes (as defined and more fully described under the heading “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources”) and our Credit Facility contain various covenants that limit our discretion in operating our business.
10 unchanged sentences
These interest rate adjustments could cause periodic fluctuations in our operating results and cash flows.
−Removed: Our annual debt service obligations increase by approximately $2.6 million per year for each 1% increase in the average interest rate we pay based on the $259.5 million balance of variable rate debt outstanding at September 30, 2022.
+Added: Our annual debt service obligations increase by approximately $5.6 million per year for each 1% increase in the average interest rate we pay based on the $558.8 million balance of variable rate debt outstanding at March 31, 2023.
If interest rates rise in the future, and, particularly if they rise significantly, interest expense will increase and our net income will be negatively affected.
3 unchanged sentences
Since the Company’s effective tax rate depends on business levels, personnel and assets located in various jurisdictions, further expansion into new markets or acquisitions may change the effective tax rate in the future and may make it, and consequently our earnings, less predictable going forward.
−Removed: Further, the enactment of future tax law changes by federal and state taxing authorities may impact the Company’s current period tax provision and its deferred tax liabilities.
+Added: Further, the enactment of future tax law changes by federal and state taxing authorities may impact the Company’s current
+Added: period tax provision and its deferred tax liabilities.
In addition, the amount and timing of stock-based compensation may also impact the Company’s current tax provision.
3 unchanged sentences
Changes to existing rules or the questioning of current practices may adversely affect our reported financial results or the way we conduct our business.
+Added: Adverse economic conditions in the United States and globally, including the potential onset of recession, could have a negative effect on our business, results of operations, financial condition and liquidity.
+Added: Adverse macroeconomic conditions in the United States and globally, including inflation, slower than expected growth or recession, changes to fiscal and monetary policy, tightening of the credit markets, higher interest rates and currency fluctuations, could negatively impact our business, financial condition, results of operations and liquidity.
+Added: These factors could negatively affect demand for our business.
+Added: Adverse economic conditions in the United States and globally have from time to time caused or exacerbated significant slowdowns in our industry and in the markets in which we operate, which have adversely affected our business and results of operations.
+Added: Macroeconomic weakness and uncertainty also make it more difficult for us to accurately forecast revenue, gross margin and expenses, and may make it more difficult to refinance debt.
+Added: Furthermore, sustained uncertainty about, or worsening of, current global economic conditions, including further escalation of tensions between Russia and Western countries, as well as further escalation of trade tensions between the U.S.
+Added: and China, could result in a global economic slowdown and long-term changes to global trade.
+Added: Any or all of these factors could negatively affect our revenue and could materially adversely affect our business, results of operations, financial condition and growth.
+Added: Environmental, social and governance (ESG) matters may impact our business and reputation.
+Added: Governmental authorities, non-governmental organizations, customers, investors, external stakeholders and employees are increasingly sensitive to ESG concerns.
+Added: This focus on ESG concerns may lead to new requirements that could result in increased costs for our business.
+Added: Our ability to compete could also be affected by changing customer preferences and requirements, such as growing demand for more environmentally friendly products, supplier practices, or by failure to meet such customer expectations or demand.
+Added: We risk negative shareholder reaction, including from proxy advisory services, as well as damage to our reputation, if we do not act responsibly, or if we are perceived to not be acting responsibly in key ESG areas.
+Added: If we do not meet the ESG expectations of our investors, customers and other stakeholders, we could experience reduced demand for our products, loss of customers, and other negative impacts on our business and results of operations.
SPECIFIC RISKS RELATED TO OUR RELOCATABLE MODULAR BUILDINGS BUSINESS SEGMENT:
10 unchanged sentences
To the extent public school districts’
−Removed: funding is reduced for the rental and purchase of modular buildings, our business could be harmed and our results of operations negatively impacted.
+Added: funding is reduced for the
+Added: rental and purchase of modular buildings, our business could be harmed and our results of operations negatively impacted.
We believe that interruptions or delays in the passage of facility bond measures or completion of state budgets, an insufficient amount of state funding, a significant reduction of funding to public schools, or changes negatively impacting enrollment may reduce the rental and sale demand for our educational products.
15 unchanged sentences
All aspects of a given code are subject to change including, but not limited to, such items as structural specifications for earthquake safety, energy efficiency and environmental standards, fire and life safety, transportation, lighting and noise limits.
−Removed: Compliance with building codes and regulations entails a certain amount of risk as state and local government authorities do not necessarily interpret building codes and regulations in a consistent manner, particularly where applicable regulations may be unclear
−Removed: and subject to interpretation.
+Added: Compliance with building codes and regulations entails a certain amount of risk as state and local government authorities do not necessarily interpret building codes and regulations in a consistent manner, particularly where applicable regulations may be unclear and subject to interpretation.
These regulations often provide broad discretion to governmental authorities that oversee these matters, which can result in unanticipated delays or increases in the cost of compliance in particular markets.
41 unchanged sentences
We may experience pricing pressures in our areas of operation in the future as some of our competitors seek to obtain market share by reducing prices.
−Removed: Some of our competitors in the modular building leasing industry, notably WillScot Corporation, have a greater range of products and services, greater financial and marketing resources, larger customer bases, and greater name recognition than we have.
−Removed: WillScot Corporation completed the acquisition of Modspace in August, 2018 and Mobile Mini in July, 2020.
+Added: Some of our competitors in the modular building leasing industry, notably WillScot Mobile Mini Holdings Corp, have a greater range of products and services, greater financial and marketing resources, larger customer bases, and greater name recognition than we have.
These combined competitors may be better able to respond to changes in the relocatable modular building market, to finance acquisitions, to fund internal growth and to compete for market share, any of which could harm our business.
We may not be able to quickly redeploy modular units returning from leases, which could negatively affect our financial performance and our ability to expand, or utilize, our rental fleet.
−Removed: As of September 30, 2022, 63% of our modular portfolio had equipment on rent for periods exceeding the original committed term.
+Added: As of March 31, 2023, 60% of our modular portfolio had equipment on rent for periods exceeding the original committed term.
Generally, when a customer continues to rent the modular units beyond the contractual term, the equipment rents on a month-to-month basis.
31 unchanged sentences
Electronic test equipment rental and sales revenues are primarily affected by the business activity within these industries related to research and development, manufacturing, and communication infrastructure installation and maintenance.
−Removed: Historically, these industries have been cyclical and have experienced periodic downturns, which can have a material adverse impact on the industry’s demand for equipment, including our rental electronic test equipment.
+Added: Historically, these industries have been cyclical and have experienced periodic downturns, which can have a material
+Added: adverse impact on the industry’s demand for equipment, including our rental electronic test equipment.
In addition, the severity and length of any downturn in an industry may also affect overall access to capital, which could adversely affect our customers and result in excess inventory and impairment charges.
20 unchanged sentences
Some of our competitors may offer similar equipment for lease, rental or sale at lower prices and may offer more extensive servicing, or financing options.
−Removed: Failure to adequately forecast the adoption of, and demand for, new or
−Removed: existing products may cause us not to meet our customers’
+Added: Failure to adequately forecast the adoption of, and demand for, new or existing products may cause us not to meet our customers’
equipment requirements and may materially and adversely affect our operating results.
8 unchanged sentences
In recent years some of our customers have expanded their international operations faster than domestic operations, and this trend may continue.
−Removed: Over time, the amount of our international business may increase if we focus on international market opportunities.
+Added: time, the amount of our international business may increase if we focus on international market opportunities.
Operating in foreign countries subjects the Company to additional risks, any of which may adversely impact our future operating results, including:
19 unchanged sentences
We currently do not engage in hedging strategies to mitigate this risk.
−Removed: SPECIFIC RISKS RELATED TO OUR LIQUID AND SOLID CONTAINMENT TANKS AND BOXES BUSINESS SEGMENT:
−Removed: We may be brought into tort or environmental litigation or held responsible for cleanup of spills if the customer fails to perform, or an accident occurs in the use of our rental products, which could materially adversely affect our business, future operating results or financial position.
−Removed: Our rental tanks and boxes are used by our customers to store non-hazardous and certain hazardous liquids and solids on the customer’s site.
−Removed: Our customers are generally responsible for proper operation of our tank and box rental equipment while on rent and returning a cleaned and undamaged container upon completion of use, but exceptions may be granted and we cannot always assure that these responsibilities are fully met in all cases.
−Removed: Although we require the customer to carry commercial general liability insurance in a minimum amount of $5,000,000, such policies often contain pollution exclusions and other exceptions.
−Removed: Furthermore, we cannot be certain our liability insurance will always be sufficient.
−Removed: In addition, if an accident were to occur involving our rental equipment or a
−Removed: spill of substances were to occur when the tank or box was in transport or on rent with our customer, a claim could be made against us as owner of the rental equipment.
−Removed: In the event of a spill or accident, we may be brought into a lawsuit or enforcement action by either our customer or a third party on numerous potential grounds, including an allegation that an inherent flaw in a tank or box contributed to an accident or that the tank had suffered some undiscovered harm from a previous customer’s prior use.
−Removed: In the event of a spill caused by our customers, we may be held responsible for cleanup under environmental laws and regulations concerning obligations of suppliers of rental products to effect remediation.
−Removed: In addition, applicable environmental laws and regulations may impose liability on us for the conduct of third parties, or for actions that complied with applicable regulations when taken, regardless of negligence or fault.
−Removed: Substantial damage awards have also been made in certain jurisdictions against lessors of industrial equipment based upon claims of personal injury, property damage, and resource damage caused by the use of various products.
−Removed: While we take what we believe are reasonable precautions that our rental equipment is in good and safe condition prior to rental and carry insurance to protect against certain risks of loss or accidents, such liability could adversely impact our profitability.
−Removed: The liquid and solid containment rental industry is highly competitive, and competitive pressures could lead to a decrease in our market share or in rental rates and our ability to rent, or sell, equipment at favorable prices, which could adversely affect our operating results.
−Removed: The liquid and solid containment rental industry is highly competitive.
−Removed: We compete against national, regional and local companies, including United Rentals, Rain For Rent and Kinderhook Industries (which recently acquired WillScot Corporation's Tank and Pump business), all of which may be larger than we are, may offer a wider range of products and services and may have greater financial and marketing resources than we have.
−Removed: Some of our competitors also have longer operating histories, lower cost basis of rental equipment and lower cost structures than we have.
−Removed: In addition, certain of our competitors are more geographically diverse than we are and have greater name recognition among customers than we do.
−Removed: As a result, our competitors that have these advantages may be better able to attract customers and provide their products and services at lower rental rates.
−Removed: Some competitors offer different approaches to liquid storage, such as large-volume modular tanks that may have better economics and compete with conventional frac tanks in certain oil and gas field applications.
−Removed: We may in the future encounter increased competition in the markets that we serve from existing competitors or from new market entrants.
−Removed: Industry consolidation may create additional competition for customers and provide the combined entity access to greater financial resources than we have.
−Removed: We believe that equipment quality, service levels, rental rates and fleet size are key competitive factors in the liquid and solid containment rental industry.
−Removed: From time to time, we or our competitors may attempt to compete aggressively by lowering rental rates or prices.
−Removed: Competitive pressures could adversely affect our revenues and operating results by decreasing our market share or depressing rental rates.
−Removed: To the extent we lower rental rates or increase our fleet in order to retain or increase market share, our operating margins would be adversely impacted.
−Removed: In addition, we may not be able to match a larger competitor’s price reductions or fleet investment because of its greater financial resources, all of which could adversely impact our operating results through a combination of a decrease in our market share, revenues and operating income.
−Removed: Market risk, commodity price volatility, regulatory changes or interruptions and cyclical downturns in the industries using tanks and boxes may result in periods of low demand for our products resulting in excess inventory, impairment charges and reduction of our operating results and cash flows.
−Removed: Adler Tanks’
−Removed: revenues are derived from the rental of tanks and boxes to companies involved in oil and gas exploration, extraction and refinement, environmental remediation and wastewater/groundwater treatment, infrastructure and building construction and various industrial services, among others.
−Removed: We expect tank and box rental revenues will primarily be affected by the business activity within these industries.
−Removed: Historically, these industries have been cyclical and have experienced periodic downturns, which have a material adverse impact on the industry’s demand for equipment, including the tanks and boxes rented by us.
−Removed: Lower oil or gas prices may have an adverse effect on our liquid and solid containment tanks and boxes business.
−Removed: Any steep decline in both domestic and international oil and gas prices driven by materially higher supply levels and weak demand could have a significant negative impact on the industry’s demand for equipment, especially if such market conditions continue for an extended period of time.
−Removed: If the price reduction causes customers to limit or stop exploration, extraction or refinement activities, resulting in lower demand and pricing for renting Adler Tank’s products, our financial results could be adversely impacted.
−Removed: Also, a weak U.S.
−Removed: economy may negatively impact infrastructure construction and industrial activity.
−Removed: Any of these factors may result in excess inventory or impairment charges and reduce our operating results and cash flows.
−Removed: Changes in regulatory, or governmental, oversight of hydraulic fracturing could materially adversely affect the demand for our rental products and reduce our operating results and cash flows.
−Removed: We believe that demand related to hydraulic fracturing has impacted the total rental revenues and market size in recent years.
−Removed: Oil and gas exploration and extraction (including use of tanks for hydraulic fracturing to obtain shale oil and shale gas) are subject to
−Removed: numerous local, state and federal regulations.
−Removed: In the nine months ended September 30, 2022, oil and gas exploration and production accounted for approximately 6% of Adler Tanks’
−Removed: rental revenues, and approximately 1% of the Company’s total revenues.
−Removed: The hydraulic fracturing method of extraction has come under scrutiny in several states and by the Federal government due to the potential adverse effects that hydraulic fracturing, and the liquids and chemicals used, may have on water quality and public health.
−Removed: In addition, the disposal of wastewater from the hydraulic fracturing process into injection wells may increase the rate of seismic activity near drill sites and could result in regulatory changes, delays or interruption of future activity.
−Removed: Changes in these regulations could limit, interrupt, or stop exploration and extraction activities, which would negatively impact the demand for our rental products.
−Removed: Finally, it is possible that changes in the technology utilized in hydraulic fracturing could make it less dependent on liquids and therefore lower the related requirements for the use of our rental products, which would reduce our operating results and cash flows.
−Removed: Seasonality of the liquid and solid containment rental industry may impact quarterly results.
−Removed: Rental activity may decline in the fourth quarter month of December and the first quarter months of January and February.
−Removed: These months may have lower rental activity in parts of the country where inclement weather may delay, or suspend, a company’s project.
−Removed: The impact of these delays may be to decrease the number of tanks, or boxes, on rent until companies are able to resume their projects when weather improves.
−Removed: These seasonal factors historically have impacted quarterly results in each year’s first and fourth quarter, but we are unable to predict how such factors may impact future periods.
−Removed: Significant increases in raw material, fuel and labor costs could increase our acquisition and operating costs of rental equipment, which would increase operating costs and decrease profitability.
−Removed: Increases in raw material costs such as steel and labor to manufacture liquid and solid containment tanks and boxes would increase the cost of acquiring new equipment.
−Removed: These price increases could materially and adversely impact our financial condition and results of operations if we are not able to recoup these increases through higher rental revenues.
−Removed: In addition, a significant amount of revenues are generated from the transport of rental equipment to and from customers.
−Removed: We own delivery trucks, employ drivers and utilize subcontractors to provide these services.
−Removed: The price of fuel can be unpredictable and beyond our control.
−Removed: During periods of rising fuel and labor costs, and in particular when prices increase rapidly, we may not be able recoup these costs from our customers, which would reduce our profitability.
−Removed: We derive a meaningful amount of our revenue in our liquid and solid containment tank and boxes business from a limited number of customers, the loss of one or more of which could have an adverse effect on our business.
−Removed: Periodically, a meaningful portion of our revenue in our liquid and solid containment tank and boxes business may be generated from a few major customers.
−Removed: Although we have some long-term relationships with our major customers, we cannot be assured that our customers will continue to use our products or services or that they will continue to do so at historical levels.
−Removed: The loss of any meaningful customer, the failure to collect a material receivable from a meaningful customer, any material reduction in orders by a meaningful customer or the cancellation of a meaningful customer order could significantly reduce our revenues and consequently harm our financial condition and our ability to fund our operations.
−Removed: We may not be able to quickly redeploy equipment returning from leases at equivalent prices.
−Removed: Many of our rental transactions are short-term in nature with pricing established on a daily basis.
−Removed: The length of time that a customer needs equipment can often be difficult to determine and can be impacted by a number of factors such as weather, customer funding and project delays.
−Removed: In addition, our equipment is primarily used in the oil and gas, industrial plant services, environmental remediation and infrastructure and building construction industries.
−Removed: Changes in the economic conditions facing any of those industries could result in a significant number of units returning off rent, both for us and our competitors.
−Removed: If the supply of rental equipment available on the market significantly increases due to units coming off rent, demand for and pricing of our rental products could be adversely impacted.
−Removed: We may experience delays in remarketing our off-rent units to new customers and incur cost to move the units to other regions where demand is stronger.
−Removed: Actions in these circumstances by our competitors may also depress the market price for rental units.
−Removed: These delays and price pressures would adversely affect equipment utilization levels and total revenues, which would reduce our profitability.
−Removed: Adverse economic conditions in the United States and globally, including the potential onset of recession, could have a negative effect on our business, results of operations, financial condition and liquidity.
−Removed: Adverse macroeconomic conditions in the United States and globally, including inflation, slower than expected growth or recession, changes to fiscal and monetary policy, tightening of the credit markets, higher interest rates and currency fluctuations, could
−Removed: negatively impact our business, financial condition, results of operations and liquidity.
−Removed: These factors could negatively affect demand for our business.
−Removed: Adverse economic conditions in the United States and globally have from time to time caused or exacerbated significant slowdowns in our industry and in the markets in which we operate, which have adversely affected our business and results of operations.
−Removed: Macroeconomic weakness and uncertainty also make it more difficult for us to accurately forecast revenue, gross margin and expenses, and may make it more difficult to refinance debt.
−Removed: Furthermore, sustained uncertainty about, or worsening of, current global economic conditions, including further escalation of tensions between Russia and Western countries, as well as further escalation of trade tensions between the U.S.
−Removed: and China, could result in a global economic slowdown and long-term changes to global trade.
−Removed: Any or all of these factors could negatively affect our revenue and could materially adversely affect our business, results of operations, financial condition and growth.
−Removed: Environmental, social and governance (ESG) matters may impact our business and reputation.
−Removed: Governmental authorities, non-governmental organizations, customers, investors, external stakeholders and employees are increasingly sensitive to ESG concerns.
−Removed: This focus on ESG concerns may lead to new requirements that could result in increased costs for our business.
−Removed: Our ability to compete could also be affected by changing customer preferences and requirements, such as growing demand for more environmentally friendly products, supplier practices, or by failure to meet such customer expectations or demand.
−Removed: We risk negative shareholder reaction, including from proxy advisory services, as well as damage to our reputation, if we do not act responsibly, or if we are perceived to not be acting responsibly in key ESG areas.
−Removed: If we do not meet the ESG expectations of our investors, customers and other stakeholders, we could experience reduced demand for our products, loss of customers, and other negative impacts on our business and results of operations.
Unregistered Sales of Equity Securities and Use of Proceeds
2 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.