What changed in this filing

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Item 1. Financial Statements

2024-10-24 compared with 2024-07-25 · 102 added, 74 removed, 474 unchanged (27% of the section changed)

4 unchanged sentences

Results of review of interim financial statements

We have reviewed the accompanying condensed consolidated balance sheet of McGrath RentCorp (a California Corporation) and subsidiaries (the “Company”) as of June 30, 2024, and the related condensed consolidated statements of income, comprehensive income, and shareholders’ equity, for the three-month and six-month periods ended June 30, 2024 and 2023, cash flows for the six month periods ended June 30, 2024 and 2023, and the related notes (collectively referred to as the “interim financial statements”).

We have reviewed the accompanying condensed consolidated balance sheet of McGrath RentCorp (a California Corporation) and subsidiaries (the “Company”) as of September 30, 2024, and the related condensed consolidated statements of income, comprehensive income, and shareholders’ equity, for the three-month and nine-month periods ended September 30, 2024 and 2023, cash flows for the nine-month periods ended September 30, 2024 and 2023, and the related notes (collectively referred to as the “interim financial statements”).

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

12 unchanged sentences

San Francisco, California

July 25, 2024

October 24, 2024

MCGRATH RENTCORP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands, except per share amounts)

13 unchanged sentences

Interest expense

Foreign currency exchange loss (gain)

Foreign currency exchange (gain) loss

Gain on merger termination from WillScot Mobile Mini (Note 1)

WillScot Mobile Mini transaction costs

Income from continuing operations before provision for income taxes

14 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

5 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

(in thousands)

Accounts receivable, net of allowance for credit losses of $ 2,866 at June 30, 2024 and $ 2,801 at December 31, 2023

Accounts receivable, net of allowance for credit losses of $ 2,866 at September 30, 2024 and $ 2,801 at December 31, 2023

Rental equipment, at cost:

16 unchanged sentences

Common stock, no par value - Authorized 40,000 shares

Issued and outstanding - 24,550 shares as of June 30, 2024 and 24,496 shares as of December 31, 2023

Issued and outstanding - 24,551 shares as of September 30, 2024 and 24,496 shares as of December 31, 2023

Retained earnings

23 unchanged sentences

Balance at June 30, 2024

Share-based compensation

Common stock issued under stock plans, net of shares

withheld for employee taxes

Dividends accrued of $ 0.475 per share

Other comprehensive loss

Balance at September 30, 2024

The accompanying notes are an integral part of these condensed consolidated financial statements.

18 unchanged sentences

Balance at June 30, 2023

Share-based compensation

Common stock issued under stock plans, net of shares

withheld for employee taxes

Dividends accrued of $ 0.465 per share

Other comprehensive income

Balance at September 30, 2023

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

CONDENSED Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

9 unchanged sentences

Gain on sale of used rental equipment

Foreign currency exchange loss (gain)

Foreign currency exchange gain

Amortization of debt issuance costs

10 unchanged sentences

Cash paid for acquisition of businesses

Cash paid for acquisition of business assets

Proceeds from sales of used rental equipment

6 unchanged sentences

Payment of dividends

Net cash provided by financing activities

Net cash (used in) provided by financing activities

Effect of foreign currency exchange rate changes on cash

3 unchanged sentences

Supplemental Disclosure of Cash Flow Information:

Gain on merger termination, net of transaction costs, presented under net cash provided by operating activities

Interest paid, during the period

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2024

September 30, 2024

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The condensed consolidated financial statements for the six months ended June 30, 2024 and 2023 have not been audited, but in the opinion of management, all adjustments (consisting of normal recurring accruals, consolidating and eliminating entries) necessary for the fair presentation of the consolidated financial position, results of operations and cash flows of McGrath RentCorp (the “Company”) have been made.

The condensed consolidated financial statements for the nine months ended September 30, 2024 and 2023 have not been audited, but in the opinion of management, all adjustments (consisting of normal recurring accruals, consolidating and eliminating entries) necessary for the fair presentation of the consolidated financial position, results of operations and cash flows of McGrath RentCorp (the “Company”) have been made.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to those rules and regulations.

The consolidated results for the three and six months ended June 30, 2024, should not be considered as necessarily indicative of the consolidated results for the entire fiscal year.

The consolidated results for the three and nine months ended September 30, 2024, should not be considered as necessarily indicative of the consolidated results for the entire fiscal year.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K, filed with the SEC on February 21, 2024 for the year ended December 31, 2023 (the “2023 Annual Report”).

Agreement and Plan of Merger with WillScot Mobile Mini Holdings Corp.

On January 28, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with WillScot Mobile Mini Holdings Corp., a Delaware corporation ("WillScot Mobile Mini”), Brunello Merger Sub I, Inc., a California corporation and a direct wholly owned subsidiary of WillScot Mobile Mini (“Merger Sub I”), and Brunello Merger Sub II, LLC, a Delaware limited liability company and direct wholly owned subsidiary of WillScot Mobile Mini (“Merger Sub II”).

The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub I will merge with and into the Company (the “First-Step Merger”), with the Company surviving the First-Step Merger and, immediately thereafter, the Company will merge with and into Merger Sub II (the “Second-Step Merger” and together with the First-Step Merger, the “Transaction”), with Merger Sub II surviving the Second-Step Merger as a wholly owned subsidiary of WillScot Mobile Mini.

Each of the parties to the Merger Agreement intends that the Transaction will be treated as a single integrated transaction that qualifies as a “reorganization” within the meaning of Section 368(a) of the U.S.

Internal Revenue Code of 1986, as amended.

Consummation of the Transaction is subject to the approval of the Company’s shareholders, the receipt of required regulatory approvals, and satisfaction or waiver of other customary closing conditions.

The First-Step Merger and the Second-Step Merger will be consummated on the same day.

On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the First-Step Merger (the “Effective Time”), each share of common stock, no par value, of the Company (the “Company Common Stock”) issued and outstanding immediately prior to the Effective Time, other than shares of Company Common Stock owned by WillScot Mobile Mini or any subsidiary of WillScot Mobile Mini or the Company, and shares held by shareholders who did not vote in favor of the Transaction (or consent thereto in writing) and who are entitled to demand and properly demands appraisal of such shares, will be automatically converted into the right to receive either (1) $ 123 in cash (the “Per Share Cash Consideration”) or (2) 2.8211 (the “Exchange Ratio”) shares of validly issued, fully paid and nonassessable shares of common stock, par value $ 0.0001 , of WillScot Mobile Mini (the “WillScot Mobile Mini Common Stock”) (the “Per Share Stock Consideration” together with the Per Share Cash Consideration, the “Merger Consideration”), as determined pursuant to the election and allocation procedures in the Merger Agreement.

The Company’s shareholders will have the opportunity to elect to receive either the Per Share Cash Consideration or the Per Share Stock Consideration in respect of their Company Common Stock, provided that 60 % of the Company Common Stock will be converted into the cash consideration and 40 % of the Company Common Stock will be converted into the stock consideration.

Pursuant to the terms of the Merger Agreement, the closing of the Merger Agreement is subject to the satisfaction of customary closing conditions, including adoption of the Merger Agreement by the Company’s shareholders, which was approved by the Company's shareholders on July 11, 2024, and receipt of regulatory approvals.

The closing of the Transaction is not subject to any financing condition.

Mutual decision to terminate Merger Agreement with WillScot Mobile Mini Holdings Corp.

As previously disclosed, on January 28, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with WillScot Mobile Mini Holdings Corp., a Delaware corporation ("WillScot Mobile Mini”), Brunello Merger Sub I, Inc., a California corporation and a direct wholly owned subsidiary of WillScot Mobile Mini, and Brunello Merger Sub II, LLC, a Delaware limited liability company and direct wholly owned subsidiary of WillScot Mobile Mini.

On September 17, 2024, the Company and WillScot Mobile Mini mutually agreed to terminate the Merger Agreement, effective upon WillScot Mobile Mini's cash payment of $ 180.0 million to the Company, which was received on September 20, 2024.

Transaction costs attributed to the Merger Agreement are reported in the Company's Corporate segment.

Expenses recognized as a result of the terminated Merger Agreement during the three and nine months ended September 30, 2024, were $ 39.4 million and $ 61.2 million, respectively.

The termination payment received of $ 180.0 million, net of transaction costs, resulted in net proceeds received of $ 118.8 million during the nine months ended September 30, 2024.

The Company determined that the transaction costs incurred on the terminated Merger Agreement were significant and required separate presentation on the Company's condensed consolidated statements of income for the three and nine-months ended September 30, 2024.

Due to this determination, the Company has excluded such transaction costs from Selling and administrative expenses.

Transaction costs incurred by the Company of $21.7 million and $9.4 million for the six-months ended June 30, 2024, and three-months ended March 31, 2024, respectively, have been reclassified from Selling and administrative expenses and reported separately on the condensed consolidated statements of income as non-operating expenses.

NEW ACCOUNTING PRONOUNCEMENTS

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The Company is in the process of evaluating the financial statement impact of this ASU.

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (Topic 280), which will require public companies to provide more transparency in both quarterly and

annual reports about the expenses they incur from revenue generating reportable business segments.

In addition, the ASU requires that a public entity disclose significant segment expenses that are regularly provided to the chief operating decision maker, an amount for other segment items by reportable business segment, including a description of its composition, and the primary measures of a business segment's profit or loss in assessing segment performance.

3 unchanged sentences

Effective January 1, 2024, the Company adopted the Accounting Standards Update ("ASU") 2023-01, Leases (Topic 842):

Common Control Arrangements, which requires a lessee involved in a common control lease agreement to amortize leasehold improvements over the useful life of the improvements to the common control group, regardless of the lease term, as long as the lessee controls the use of the underlying asset.

controls the use of the underlying asset.

If the lessor obtains the right to control the use of the underlying asset through a lease with another entity not within the same control group, the amortization period cannot exceed the period of the common control group.

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The following tables summarize the purchase price allocations reflecting estimated fair values of assets acquired and liabilities assumed in the Vesta Modular, Brekke Storage and Dixie Storage business acquisitions, with excess amounts allocated to goodwill.

The estimated fair values of the assets acquired and liabilities assumed at the acquisition date are determined based on preliminary valuations and analyses.

Accordingly, the Company has made provisional estimates for the assets acquired and liabilities assumed.

The valuation of intangible assets acquired is based on certain valuation assumptions including cash flow projections, discount rates, contributory asset

charges and other valuation model inputs.

The assets acquired and liabilities assumed were based upon their fair values on the closing date.

The valuation of intangible assets acquired is based on certain valuation assumptions including cash flow projections, discount rates, contributory asset charges and other valuation model inputs.

The valuation of tangible long-lived assets acquired is dependent upon various analyses including an analysis of the condition and estimated remaining economic lives of the assets acquired.

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The goodwill is deductible for tax purposes over 15 years.

The following table reports the actual results of the Company for the six months ended June 30, 2024, and the unaudited pro forma financial information for the six months ended June 30, 2023.

The following table reports the actual results of the Company for the nine months ended September 30, 2024, and the unaudited pro forma financial information for the nine months ended September 30, 2023.

The pro forma financial information shows the combined results of continuing operations of the Company and Vesta Modular as if the acquisition occurred as of the beginning of the period presented.

1 unchanged sentence

A pro forma adjustment has been made to reflect the income taxes that would have been recorded at the combined federal and state statutory rate of 26.5 % on the acquisitions’ combined net income.

The pro forma results for the six months ended June 30, 2023, have been adjusted to include

transaction related costs.

This pro forma data is presented for informational purposes only and does not purport to be indicative of the results of the future operations or the results that would have occurred had the acquisitions taken place in the periods noted below:

Six months ended June 30,

The pro forma results for the nine months ended September 30, 2023, have been adjusted to include transaction related costs.

This pro forma data is presented for informational purposes only and does not purport to

be indicative of the results of the future operations or the results that would have occurred had the acquisitions taken place in the periods noted below:

Nine months ended September 30,

(dollar amounts in thousands, except for per share amounts)

17 unchanged sentences

In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations and ASC 360 , Property, Plant and Equipment, the Company determined that the criteria for the presentation of discontinued operations and held-for-sale, respectively, were met during the first quarter of 2023.

The following table presents the results of Adler Tanks as reported in income from discontinued operations within the condensed consolidated statements of income for the six months ended June 30, 2023:

The following table presents the results of Adler Tanks as reported in income from discontinued operations within the condensed consolidated statements of income for the nine months ended September 30, 2023:

(dollar amounts in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Rental related services

28 unchanged sentences

Total liabilities of discontinued operations

For the six months ended June 30, 2023, significant operating and investing items related to Adler Tanks were as follows:

For the nine months ended September 30, 2023, significant operating and investing items related to Adler Tanks were as follows:

September 30,

(in thousands)

6 unchanged sentences

Purchases of property, plant and equipment

The following table presents the reconciliation of income from discontinued operations to Adjusted EBITDA for the six months ended June 30, 2023:

The following table presents the reconciliation of income from discontinued operations to Adjusted EBITDA for the nine months ended September 30, 2023:

September 30,

(in thousands)

20 unchanged sentences

These contract assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period.

The contract liabilities included in Deferred income on the Company’s Consolidated Balance Sheets totaled $ 65.8 million and $ 40.7 million at June 30, 2024 and December 31, 2023, respectively.

Sales revenues totaling $ 7.7 million and $ 17.4 million were recognized during the three and six months ended June 30, 2024, respectively, which were included in the contract liability balance at December 31, 2023.

The contract liabilities included in Deferred income on the Company’s Consolidated Balance Sheets totaled $ 49.1 million and $ 40.7 million at September 30, 2024 and December 31, 2023, respectively.

Sales revenues totaling $ 10.6 million and $ 26.3 million were recognized during the three and nine months ended September 30, 2024, respectively, which were included in the contract liability balance at December 31, 2023.

For certain modular building sales, the customer retains a small portion of the contract price until full completion of the contract, or revenue is recognizable prior to customer billing, which results in revenue earned in excess of billings.

These unbilled contract assets are included in Accounts receivable on the Company’s Consolidated Balance Sheets and totaled $ 9.6 million and $ 8.7 million at June 30, 2024 and December 31, 2023, respectively.

The Company did not recognize any material contract asset impairments during the periods ended June 30, 2024 and December 31, 2023, respectively.

These unbilled contract assets are included in Accounts receivable on the Company’s Consolidated Balance Sheets and totaled $ 16.7 million and $ 8.7 million at September 30, 2024 and December 31, 2023, respectively.

The Company did not recognize any material contract asset impairments during the periods ended September 30, 2024 and December 31, 2023, respectively.

The Company's uncompleted contracts with customers which meet the criteria for over-time revenue recognition have unsatisfied or partially satisfied performance obligations.

As of June 30, 2024, approximately $ 51.7 million of revenue is expected to be recognized for unsatisfied or partially satisfied obligations.

The Company expects to recognize revenue for approximately one half of these

unsatisfied or partially satisfied performance obligations over the next 12 months, with the remaining balance recognized thereafter.

For the three and six months ended June 30, 2024, approximately $ 61.8 million and $ 102.0 million of revenue was recognized for sales and non-lease services transferred at a point in time, respectively, and approximately $ 4.2 million and $ 11.6 million of revenue was recognized for sales and non-lease services transferred over time, respectively.

As of September 30, 2024, approximately $ 67.1 million of revenue is expected to be recognized for unsatisfied or partially satisfied obligations.

The Company expects to recognize revenue for approximately one half of

these unsatisfied or partially satisfied performance obligations over the next 12 months, with the remaining balance recognized thereafter.

For the three and nine months ended September 30, 2024, approximately $ 96.9 million and $ 198.9 million of revenue was recognized for sales and non-lease services transferred at a point in time, respectively, and approximately $ 16.6 million and $ 28.2 million of revenue was recognized for sales and non-lease services transferred over time, respectively.

The Company generally rents and sells to customers on 30 day payment terms.

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For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a basis which results in a constant rate of return on the unrecovered lease investment.

As of the six months ended June 30, 2024, the Company’s future minimum lease payments to be received under non-cancelable finance leases were $ 2.7 million.

As of the nine months ended September 30, 2024, the Company’s future minimum lease payments to be received under non-cancelable finance leases were $ 2.4 million.

Of the total investment in sales-type leases, future minimum lease payments are expected to be $ 1.7 million in 2025, $ 0.5 million in 2026, and $ 0.2 million in 2027.

The Company’s assessment of current expected losses on these receivables was not material and therefore no credit loss expense was provided as of the six months ended June 30, 2024.

The Company’s assessment of current expected losses on these receivables was immaterial and therefore no credit loss expense was provided as of the nine months ended September 30, 2024.

Other revenues include interest income on finance leases and rental income on facility leases.

In the three and six months ended June 30, 2024, the Company’s lease revenues were $ 146.6 million and $ 286.8 million, respectively, consisting of $ 145.9 million and $ 285.7 million of operating lease revenues, respectively, and $ 0.7 million and $ 1.1 million of finance lease revenues, respectively.

In the three and nine months ended September 30, 2024, the Company’s lease revenues were $ 153.3 million and $ 440.1 million, respectively, consisting of $ 152.7 million and $ 438.5 million of operating lease revenues, respectively, and $ 0.5 million and $ 1.6 million of finance lease revenues, respectively.

The Company has entered into finance leases to finance certain equipment sales to customers.

1 unchanged sentence

For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a straight-line basis, which results in a constant rate of return on the unrecovered lease investment.

The Company’s finance lease revenues for the three and six months ended June 30, 2024 include $ 0.6 million and $ 0.9 million of sales revenues, respectively, and $ 0.1 million and $ 0.2 million of interest income, respectively.

The Company’s finance lease revenues for the three and nine months ended September 30, 2024 include $ 0.4 million and $ 1.3 million of sales revenues, respectively, and $ 0.1 million and $ 0.3 million of interest income, respectively.

Non-Lease Revenues

4 unchanged sentences

Sales taxes charged to customers are reported on a net basis and are excluded from revenues and expenses.

The following table disaggregates the Company’s revenues by lease (within the scope of Topic 842) and non-lease revenues (within the scope of Topic 606) and the underlying service provided for the three and six months ended June 30, 2024 and 2023:

(in thousands)

Portable Storage

Three Months Ended June 30,

Three Months Ended September 30,

Rental related services

4 unchanged sentences

Total revenues

Six Months Ended June 30,

Nine Months Ended September 30,

Rental related services

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(in thousands)

4 unchanged sentences

calculating diluted earnings per share

There were 73,190 and 697 anti-dilutive securities excluded from the computation of diluted earnings per share for the six months ended June 30, 2024 and 2023, respectively.

The Company has in the past made purchases of shares of its common stock from time to time in over-the-counter market (NASDAQ) transactions, through privately negotiated, large block transactions and through a share repurchase plan, in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934.

In August 2015, the Company’s Board of Directors authorized the Company to repurchase up to 2,000,000 shares of the Company's outstanding common stock (the “Repurchase Plan”).

There were no anti-dilutive securities excluded from the computation of diluted earnings per share for the nine months ended September 30, 2024, and 1,800 anti-dilutive securities excluded from the computation of diluted earnings per share for the nine months ended September 30, 2023.

In September 2024, the Company's Board of Directors increased the capacity under the share repurchase program by authorizing the Company to repurchase up to 2,000,000 shares of the Company's outstanding common stock (the "Repurchase Plan"), an increase from the 1,309,805 remaining shares authorized for repurchase under the Repurchase Plan established in August 2015.

The amount and time of the specific repurchases are subject to prevailing market conditions, applicable legal requirements and other factors, including management’s discretion.

1 unchanged sentence

There can be no assurance that any authorized shares will be repurchased, and the Repurchase Plan may be modified, extended or terminated by the Company’s Board of Directors at any time.

There were no shares repurchased during the three and six months ended June 30, 2024 and 2023.

As of June 30, 2024, 1,309,805 shares remained authorized for repurchase under the Repurchase Plan.

There were no shares repurchased during the three and nine months ended September 30, 2024 and 2023.

As of September 30, 2024, 2,000,000 shares were authorized for repurchase under the Repurchase Plan.

Inventories consist of raw materials, supplies and work-in-process.

3 unchanged sentences

(dollar amounts in thousands)

September 30,

Raw materials

6 unchanged sentences

Net book value

June 30, 2024

September 30, 2024

Customer relationships

13 unchanged sentences

The Company last conducted a qualitative analysis of its goodwill and intangible assets in the fourth quarter 2023, with no indicators of impairment.

In addition, no impairment triggering events occurred during the six months ended June 30, 2024, and there were no changes to the carrying value of goodwill during this period.

In addition, no impairment triggering events occurred during the nine months ended September 30, 2024, and there were no changes to the carrying value of goodwill during this period.

Determining fair value of a reporting unit is judgmental and involves the use of significant estimates and assumptions.

1 unchanged sentence

Intangible assets with finite useful lives are amortized over their respective useful lives.

Amortization expense in the six months ended June 30, 2024 and 2023, was $ 5.1 million and $ 5.0 million, respectively.

Based on the carrying values at June 30, 2024 and assuming no subsequent impairment of the underlying assets, the amortization expense is expected to be $ 5.1 million for the remainder of fiscal year 2024, $ 10.2 million in 2025, $ 9.8 million in 2026, $ 9.6 million in 2027, $ 8.2 million in 2028 and $ 4.7 million in 2029.

Amortization expense in the nine months ended September 30, 2024 and 2023, was $ 7.7 million and $ 7.8 million, respectively.

Based on the carrying values at September 30, 2024, and assuming no subsequent impairment of the underlying assets, the amortization expense is expected to be $ 2.6 million for the remainder of fiscal year 2024, $ 10.2 million in 2025, $ 9.8 million in 2026, $ 9.6 million in 2027, $ 8.2 million in 2028 and $ 4.7 million in 2029.

SEGMENT REPORTING

4 unchanged sentences

Additional information regarding the divestiture of Adler Tanks can be found in Note 5 of the condensed consolidated financial statements.

At June 30, 2024, the Company was comprised of four reportable segments:

At September 30, 2024, the Company was comprised of four reportable segments:

(1) its modular building segment (“Mobile Modular”);

6 unchanged sentences

Interest expense is allocated amongst Mobile Modular, Portable Storage and TRS-RenTelco based on their pro-rata share of average rental equipment at cost, intangible assets, accounts receivable, deferred income and customer security deposits.

During the period ended September 30, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement with WillScot Mobile Mini were significant and required separate presentation.

For the three and nine-months ended September 30, 2024, the Company has reported the terminated Merger Agreement transaction costs in the Corporate segment and excluded such costs from Selling and administrative expenses.

The Company does not report total assets by business segment.

Summarized financial information for the six months ended June 30, 2024 and 2023 for the Company’s reportable segments are shown in the following table:

Summarized financial information for the nine months ended September 30, 2024 and 2023 for the Company’s reportable segments are shown in the following table:

(dollar amounts in thousands)

Portable Storage

Six Months Ended June 30,

Corporate (Unallocated)

Nine Months Ended September 30,

Rental revenues

4 unchanged sentences

Selling and administrative expenses

Income (loss) from operations

Income from operations

Interest expense (income) allocation

Gain on merger termination from WillScot Mobile Mini 3

WillScot Mobile Mini transaction costs 4

Income before provision for income taxes

20 unchanged sentences

Average utilization 2

Gross Enviroplex sales revenues were $ 13,093 and $ 1,871 for the six months ended June 30, 2024 and 2023, respectively.

There were $ 2 and $ 7 of inter-segment sales to Mobile Modular in the six months ended June 30, 2024 and 2023, respectively, which required elimination in consolidation.

Gross Enviroplex sales revenues were $ 30,593 and $ 16,401 for the nine months ended September 30, 2024 and 2023, respectively.

There were $ 2 and $ 218 of inter-segment sales to Mobile Modular in the nine months ended September 30, 2024 and 2023, respectively, which required elimination in consolidation.

Utilization is calculated each month by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding accessory equipment, and new equipment inventory.

The Average utilization for the period is calculated using the average costs of rental equipment.

No single customer accounted for more than 10% of total revenues for the six months ended June 30, 2024 and 2023.

During the period ended September 30, 2024, the Company received $ 180 million in cash proceeds attributed to the mutual decision to terminate the Merger Agreement.

These proceeds are reported as non-operating income on the Company's Condensed Consolidated Statements of Income and are reported in the Company's Corporate segment.

During the period ended September 30, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant.

Due to this determination, the Company has separately reported these transaction costs in the Company's Corporate segment and excluded such costs from Selling and administrative expenses.

The total transaction costs excluded from Selling and administrative expenses for the six months ended June 30, 2024, and the three months ended March 31, 2024, for Mobile Modular, Portable Storage and TRS-RenTelco was $ 15.5 million, $ 2.6 million and $ 3.6 million, respectively, and $ 6.5 million, $ 1.2 million and $ 1.7 million, respectively.

No single customer accounted for more than 10% of total revenues for the nine months ended September 30, 2024 and 2023.

Revenues from foreign country customers accounted for 2 % and 3 % of the Company’s total revenues for the same periods, respectively.

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.

What changed 10-Q

Item 1. Financial Statements