What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-04-24 compared with 2024-10-24 · 103 added, 317 removed, 296 unchanged (59% of the section changed)

14 unchanged sentences

and (4) its classroom manufacturing business selling modular buildings used primarily as classrooms in California (“Enviroplex”).

In the nine months ended September 30, 2024, Mobile Modular, Portable Storage, TRS-RenTelco and Enviroplex contributed 69%, 17%, 11% and 3% of the Company’s income from continuing operations before provision for taxes (the equivalent of “pretax income”), respectively, compared to 60%, 23%, 18% and negative 1% for the same period in 2023.

In the three months ended March 31, 2025, Mobile Modular, Portable Storage, TRS-RenTelco and Enviroplex contributed 66%, 15%, 17% and 2% of the Company’s income before provision for taxes (the equivalent of “pretax income”), respectively, compared to 63%, 23%, 16% and negative 2% for the same period in 2024.

The Company generates its revenues primarily from the rental of its equipment on operating leases and from sales of equipment occurring in the normal course of business.

18 unchanged sentences

Electronic test equipment revenues are primarily affected by the business activity within these industries related to research and development, manufacturing, and communication infrastructure installation and maintenance.

The Company’s rental operations include rental and rental related service revenues which comprised approximately 71% and 74% of consolidated revenues from continuing operations in the nine months ended September 30, 2024 and 2023, respectively.

Of the total continuing rental operations revenues for the nine months ended September 30, 2024, Mobile Modular, Portable Storage and TRS-RenTelco comprised 69%, 14% and 17%, respectively, compared to 64%, 16% and 20%, respectively, in the same period of 2023.

The Company’s rental operations include rental and rental related service revenues which comprised approximately 79% and 80% of consolidated revenues in the three months ended March 31, 2025 and 2024, respectively.

Of the total rental operations revenues for the three months ended March 31, 2025, Mobile Modular, Portable Storage and TRS-RenTelco comprised 70%, 13% and 17%, respectively, compared to 67%, 15% and 18%, respectively, in the same period of 2024.

The Company’s direct costs of rental operations include depreciation of rental equipment, rental related service costs, impairment of rental equipment (if applicable), and other direct costs of rental operations (which include direct labor, supplies, repairs, insurance, property taxes, license fees, cost of sub-rentals and amortization of certain lease costs).

1 unchanged sentence

In addition, Enviroplex sells new modular buildings used primarily as classrooms in California.

For the nine months ended September 30, 2024 and 2023, sales and other revenues of modular, container and electronic test equipment comprised approximately 29% and 26% of the Company’s consolidated revenues from continuing operations, respectively.

Of the total sales and other revenues from continuing operations for the nine months ended September 30, 2024 and 2023, Mobile Modular and Enviroplex together comprised 85% and 82%, respectively, Portable Storage comprised 3% in both periods, and TRS-RenTelco comprised 12% and 16%, respectively.

For the three months ended March 31, 2025 and 2024, sales and other revenues of modular, container and electronic test equipment comprised approximately 21% and 20% of the Company’s consolidated revenues, respectively.

Of the total sales and other revenues from operations for the three months ended March 31, 2025 and 2024, Mobile Modular and Enviroplex together comprised 75% and 76%, respectively, Portable Storage comprised 4% in both periods, and TRS-RenTelco comprised 21% and 20%, respectively.

The Company’s cost of sales includes the carrying value of the equipment sold and the direct costs associated with the equipment sold, such as delivery, installation, modifications and related site work.

Selling and administrative expenses primarily include personnel and benefit costs, which include share-based compensation, depreciation and amortization, bad debt expense, advertising costs, and professional service fees.

Transaction costs incurred by the Company attributed to the terminated Merger Agreement with WillScot Mobile Mini were considered non-operating and excluded from Selling and administrative expenses.

Transaction costs incurred by the Company in 2024 attributed to the terminated Merger Agreement with WillScot Mobile Mini were considered non-operating and excluded from Selling and administrative expenses.

The Company believes that sharing of common facilities, financing, senior management, and operating and accounting systems by all of the Company’s operations results in an efficient use of overhead.

2 unchanged sentences

Recent Developments

Mutual Decision to Terminate Merger Agreement with WillScot Mobile Mini

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 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.

On September 9, 2024, the Company announced that the Board of Directors declared a quarterly cash dividend of $0.475 per common share for the quarter ended September 30, 2024, an increase of 2% over the prior year’s comparable quarter.

On February 19, 2025, the Company announced that the Board of Directors declared a quarterly cash dividend of $0.485 per common share for the quarter ended March 31, 2025, an increase of 2% over the prior year’s comparable quarter.

Business Outlook

Macroeconomic conditions, such as a volatile interest rate environment, ongoing inflation, the geopolitical landscape, and foreign exchange rate fluctuations, continue to impact the global economy.

In addition, recent changes in legislation and regulations, including enacted and proposed tariffs and other trade policies, have introduced additional uncertainty in the global economy.

In periods of perceived or actual unfavorable economic conditions, our customers or potential customers could delay or re-evaluate their decisions to initiate various projects which in turn could result in a delay or cessation of engagement or other business activities with us.

These factors also make it difficult for us to forecast and plan future budgetary decisions or business activities accurately.

Our operating results could be materially impacted by changes in the overall macroeconomic environment and other economic factors.

Results of Operations

Three Months Ended September 30, 2024 Compared to

Three Months Ended September 30, 2023

Consolidated revenues for the three months ended September 30, 2024, increased 10% to $266.8 million, from $243.5 million for the same period in 2023.

Consolidated net income for the three months ended September 30, 2024, increased $109.0 to $149.3 million, from $40.4 million for the same period in 2023.

Earnings per diluted share for the three months ended September 30, 2024, increased by $4.43 to $6.08, compared to $1.65 for the same period in 2023.

The increase in consolidated net income and earnings per diluted share during the period was primarily attributed to the $180.0 million gain on merger termination, partly offset by $39.4 million in transaction costs attributed to the terminated Merger Agreement, net of provision for income taxes.

Excluding the gain and transaction costs attributed to the merger termination in the current year, the Company's net income increased by approximately $5.5 million, or 14%, to $45.9 million, and diluted earnings per share increased $0.22, or 13%, to $1.87.

There was no revenue, income or earnings per share from discontinued operations for the three months ended September 30, 2024 and 2023.

For the three months ended September 30, 2024, on a consolidated basis from continuing operations:

Three Months Ended March 31, 2025 Compared to

Three Months Ended March 31, 2024

Consolidated revenues for the three months ended March 31, 2025, increased $7.6 million, or 4%, to $195.4 million from $187.8 million for the same period in 2024.

Consolidated net income for the three months ended March 31, 2025, increased $5.4 million, or 23%, to $28.2 million from $22.8 million for the same period in 2024.

Earnings per diluted share for the three months ended March 31, 2025, increased 23% to $1.15, from $0.93 for the same period in 2024.

The increase in consolidated net income and earnings per diluted share during the period was primarily attributed to an increase in gross profit on rental operations revenues at Mobile Modular and a reduction in interest expense incurred on outstanding debt obligations.

For the three months ended March 31, 2025, on a consolidated basis:

• Gross profit increased $3.2 million, or 3%, to $96.4 million in 2025.

Mobile Modular’s gross profit increased $13.8 million, or 18%, primarily due to higher gross profit on rental, sales and rental related services revenues.

Mobile Modular’s gross profit increased $3.6 million, or 6%, primarily due to higher gross profit on rental and rental related services revenues, partly offset by a reduction in gross profit on sales revenues.

Portable Storage's gross profit decreased $3.2 million, or 18%, primarily due to lower gross profit on rental and rental related services revenues.

TRS-RenTelco’s gross profit decreased $1.6 million, or 10%, primarily due to lower gross profit on rental revenues.

Enviroplex’s gross profit increased $2.5 million, due to higher sales revenue and an increase in sales margins in 2024.

TRS-RenTelco’s gross profit increased $1.0 million, or 7%, primarily due to higher gross profit on rental revenues.

Enviroplex’s gross profit increased $1.7 million, due to higher sales revenues and gross margins in 2025.

• Selling and administrative expenses increased 1% to $50.9 million.

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 and required separate presentation on the condensed consolidated statements of income.

Due to this determination, the Company has excluded the transaction costs incurred by the Company from Selling and administrative expenses for all reportable business segments for the period ended September 30, 2024.

• Interest expense increased $1.6 million to $12.6 million, which was primarily attributed to $86.2 million higher average debt levels of the Company and a higher effective interest rate in 2024 of 6.63%, compared to 6.52% for the same period in 2023.

The 13% increase in average debt when compared to 2023 was primarily the result of the funding of rental equipment purchases and transaction costs regarding the terminated merger with WillScot Mobile Mini.

• During the three months ended March 31, 2025, the Company had no reportable transactions under Other income, net on the condensed consolidated statements of income.

For the three months ended March 31, 2024, the Company had Other income, net of $9.3 million due to the net gain on sale of a property.

• During the three months ended March 31, 2024, the Company incurred $9.4 million in transaction costs related to the Merger Agreement with Willscot Mobile Mini that was terminated September 20, 2024.

These significant costs that did not recur during the three months ended March 31, 2025 are reported separately on the Company’s condensed consolidated statements of income.

• Interest expense decreased $4.5 million, or 35%, to $8.2 million, which was primarily attributed to $205.9 million lower average debt levels of the Company and a lower effective interest rate in 2025 of 5.70%, compared to 6.53% for the same period in 2024.

The 27% decrease in average debt when compared to 2024 was primarily attributed to lower rental equipment purchases in 2025 and the proceeds received in 2024 from the merger termination with WillScot Mobile Mini after transaction costs and income taxes.

• Pre-tax income contribution by Mobile Modular, Portable Storage and TRS-RenTelco was 66%, 15% and 17%, respectively, compared to 63%, 23% and 16%, respectively, for the comparable 2024 period.

These results are discussed on a segment basis below.

Enviroplex pre-tax income contribution was 5% and 2% in 2024 and 2023, respectively.

• The provision for income taxes resulted in an effective tax rate of 26.4% and 27.3%, for the quarters ended September 30, 2024 and 2023, respectively.

Enviroplex pre-tax income contribution was 2% and negative 2% in 2025 and 2024, respectively.

• The provision for income taxes resulted in an effective tax rate of 24.6% and 23.6%, for the quarters ended March 31, 2025 and 2024, respectively.

• Adjusted EBITDA increased $2.4 million, or 3%, to $74.5 million in 2025.

Mobile Modular

For the three months ended September 30, 2024, Mobile Modular’s total revenues increased $23.0 million, or 14%, to $191.4 million compared to the same period in 2023, primarily due to higher sales, rental related services and rental revenues.

The revenue increase, together with higher gross profit on rental, sales and rental related services revenues, partly offset by $2.2 million higher selling and administrative expenses, resulted in a $6.9 million increase in pre-tax income to $45.8 million for the three months ended September 30, 2024, from $38.9 million for the same period in 2023.

For the three months ended March 31, 2025, Mobile Modular’s total revenues increased $4.3 million, or 3%, to $131.9 million compared to the same period in 2024, primarily due to higher rental related services and rental revenues, partly offset by lower sales revenues.

The total revenue increase, together with higher gross profit on rental and rental related services revenues, and lower interest expense, partly offset by a $6.2 million decrease in other income, net, attributed to the allocated net gain on sale of a corporate property in 2024, resulted in a $0.3 million increase in pre-tax income to $25.0 million for the three months ended March 31, 2025, from $24.7 million for the same period in 2024.

The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.

2 unchanged sentences

Three Months Ended

September 30,

Increase (Decrease)

31 unchanged sentences

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

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 reclassified $29.5 million in transaction costs from Selling and administrative expenses in 2024, and reported such expenses separately under the Corporate segment.

During the year ended December 31, 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 reclassified $6.4 million in transaction costs from Selling and administrative expenses for the three months ended March 31, 2024, and reported such expenses separately as non-operating expense under the Corporate segment.

nm = Not meaningful

Mobile Modular’s gross profit for the three months ended September 30, 2024, increased $13.3 million, or 17%, to $89.8 million.

For the three months ended September 30, 2024, compared to the same period in 2023:

• Gross Profit on Rental Revenues – Rental revenues increased $6.7 million, or 9%, due to 5% higher average rental equipment on rent and 4% higher average monthly rental rates in 2024.

Mobile Modular’s gross profit for the three months ended March 31, 2025, increased $3.6 million, or 6%, to $65.5 million.

For the three months ended March 31, 2025, compared to the same period in 2024:

• Gross Profit on Rental Revenues – Rental revenues increased $2.0 million, or 3%, due to 4% higher average rental equipment on rent, partly offset by 1% lower average monthly rental rates in 2025.

As a percentage of rental revenues, depreciation was 13% in both 2025 and 2024, and other direct costs were 27% in 2025 and 30% in 2024, which resulted in gross margin percentages of 60% in 2025, compared to 58% in 2024.

2 unchanged sentences

The increase in rental related services revenues was primarily attributable to higher delivery, return delivery and dismantle revenues and higher site related services.

The increase in revenues coupled with higher gross margin percentage of 35% in 2024, compared to 33% in 2023, resulted in rental related services gross profit increasing $3.6 million, or 32%, to $15.0 million in 2024.

• Gross Profit on Sales – Sales revenues increased $8.3 million, or 14%, compared to 2023, due to higher new equipment sales.

The higher gross margin percentage of 34% in 2024 compared to 32% in 2023, together with higher sales revenue, resulted in gross profit on sales increasing $3.7 million, or 20%, to $22.4 million.

The higher gross profit on sales in 2024 was primarily due to higher new equipment sales.

The increase in rental related services revenues and lower gross margin percentage of 33% in 2025, compared to 35% in 2024, resulted in rental related services gross profit increasing $1.4 million, or 17%, to $9.7 million in 2025.

• Gross Profit on Sales – Sales revenues decreased $2.8 million, or 11%, compared to 2024, due to lower new and used equipment sales.

The lower sales revenues, partly offset by the higher gross margin percentage of 32% in 2025, compared to 31% in 2024, resulted in gross profit on sales decreasing $0.8 million, or 10%, to $7.1 million.

The lower gross profit on sales in 2025 was primarily due to lower new and used equipment sales.

Sales occur routinely as a normal part of Mobile Modular’s rental business;

however, these sales and related gross margins can fluctuate from quarter to quarter and year to year depending on customer requirements, the scope of work to be performed, equipment availability and funding.

For the three months ended September 30, 2024, selling and administrative expenses increased $2.2 million, or 7%, to $34.0 million.

For the three months ended March 31, 2025, selling and administrative expenses increased $0.4 million, or 1%, to $34.0 million.

Portable Storage

For the three months ended September 30, 2024, Portable Storage’s total revenues decreased $3.0 million, or 11%, to $23.1 million compared to the same period in 2023, primarily due to lower rental and rental related services revenues.

Lower gross profit on rental and rental related services revenues, partly offset by lower selling and administrative expenses, resulted in a decrease in pre-tax income of $1.0 million, or 12%, to $7.4 million in 2024.

For the three months ended March 31, 2025, Portable Storage’s total revenues decreased $3.5 million, or 14%, to $21.3 million compared to the same period in 2024, primarily due to lower rental and rental related services revenues.

Lower gross profit on rental and rental related services revenues and a $1.3 million decrease in other income, net, attributed to the allocated net gain on sale of a corporate property in 2024, resulted in a decrease in pre-tax income of $3.8 million, or 41%, to $5.4 million in 2025.

The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.

2 unchanged sentences

Three Months Ended

September 30,

Increase (Decrease)

9 unchanged sentences

Total costs of revenues

Gross Profit (Loss)

Rental related services

20 unchanged sentences

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

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 reclassified $3.5 million in transaction costs from Selling and administrative expenses in 2024, and reported such expenses separately under the Corporate segment.

During the year ended December 31, 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 reclassified $1.2 million in transaction costs from Selling and administrative expenses for the three months ended March 31, 2024, and reported such expenses separately as non-operating expense under the Corporate segment.

nm = Not meaningful

Portable Storage’s gross profit for the three months ended September 30, 2024, decreased $1.8 million, or 10%, to $15.5 million.

For the three months ended September 30, 2024, compared to the same period in 2023:

• Gross Profit on Rental Revenues – Rental revenues decreased $2.2 million, or 11%, due to 12% lower average rental equipment on rent.

Portable Storage’s gross profit for the three months ended March 31, 2025, decreased $3.2 million, or 18%, to $13.9 million.

For the three months ended March 31, 2025, compared to the same period in 2024:

• Gross Profit on Rental Revenues – Rental revenues decreased $2.3 million, or 13%, due to 10% lower average rental equipment on rent and 3% lower average monthly rental rates.

As a percentage of rental revenues, depreciation was 6% and 5% in 2025 and 2024, respectively, and other direct costs were 9% and 8% in 2025 and 2024, respectively, which resulted in gross margin percentage of 84% in 2025 and 87% in 2024.

The lower rental revenues and higher rental margins resulted in gross profit on rental revenues decreasing $1.5 million, or 9%, to $14.7 million in 2024.

The lower rental revenues and lower rental margins resulted in gross profit on rental revenues decreasing $2.5 million, or 15%, to $13.5 million in 2025.

• Gross Profit on Rental Related Services – Rental related services revenues was $3.6 million, compared to $4.7 million during the same period in 2024.

The gross margin on rental related services revenues was 3% in 2024, compared to 7% in 2023.

The gross margin on rental related services revenues was negative 8% in 2025, compared to 6% in 2024.

The lower revenues coupled with lower gross margins in 2025 resulted in rental related services gross profit decreasing $0.6 million, when compared to 2024.

• Gross Profit on Sales – Sales revenues increased $0.3 million to $1.4 million, primarily due to higher used equipment sales.

The higher sales revenues and increased gross margins of 36% in 2024, compared to 32% in 2023, resulted in sales gross profit increasing $0.1 million, or 40%, to $0.5 million in 2024.

• Gross Profit on Sales – Sales revenues were comparable to 2024 at $1.2 million.

The comparable sales revenues and lower gross margins of 33% in 2025, compared to 37% in 2024, resulted in a comparable sales gross profit of $0.4 million in 2025.

Sales occur routinely as a normal part of Portable Storage’s rental business;

however, these sales can fluctuate from period to period depending on customer requirements, equipment availability and funding.

For the three months ended September 30, 2024, Portable Storage’s selling and administrative expenses decreased $1.2 million, or 15%, to $6.8 million.

For the three months ended September 30, 2024, TRS-RenTelco’s total revenues decreased $4.3 million to $34.8 million, compared to the same period in 2023, primarily due to lower rental and sales revenues.

Lower gross profit on rental revenues, partly offset by higher gross profit on sales and lower selling and administrative expenses, resulted in a 21% decrease in pre-tax income to $5.7 million for the three months ended September 30, 2024, from $7.3 million for the same period in 2023.

For the three months ended March 31, 2025, Portable Storage’s selling and administrative expenses decreased $0.3 million, or 3%, to $7.6 million.

For the three months ended March 31, 2025, TRS-RenTelco’s total revenues increased $1.3 million to $35.0 million, compared to the same period in 2024, primarily due to higher sales revenues.

The total revenue increase, together with higher gross profit on rental revenues and lower interest expense, partly offset by a $1.7 million decrease in other income, net, attributed to the allocated net gain on sale of a corporate property in 2024, resulted in a comparable pre-tax income of $6.2 million for the three months ended March 31, 2025, when compared to 2024.

The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.

2 unchanged sentences

Three Months Ended

September 30,

Increase (Decrease)

32 unchanged sentences

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

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 reclassified $6.4 million in transaction costs from Selling and administrative expenses in 2024, and reported such expenses separately under the Corporate segment.

nm = Not meaningful

TRS-RenTelco’s gross profit for the three months ended September 30, 2024 decreased $1.6 million, or 10%, to $14.1 million.

For the three months ended September 30, 2024 compared to the same period in 2023:

• Gross Profit on Rental Revenues – Rental revenues decreased $3.0 million, or 10%, depreciation expense decreased $1.2 million, or 10%, and other direct costs increased by $0.3 million, or 5%, resulting in a 18% decrease in gross profit on rental revenues to $9.4 million.

As a percentage of rental revenues, depreciation was 42% in both 2024 and 2023 and other direct costs were 21% and 18%, in 2024 and 2023, respectively, which resulted in a gross margin percentage of 37% and 40% in 2024 and 2023, respectively.

The decrease in rental revenues was primarily due to a 9% reduction in average rental equipment on rent and 1% lower average monthly rental rates in 2024, as compared to 2023.

• Gross Profit on Sales – Sales revenues decreased $1.1 million, or 13%, to $7.6 million in 2024.

Gross profit on sales increased $0.8 million, or 27%, to $3.9 million, with a higher gross margin percentage of 52% in 2024, compared to 35% in 2023.

Sales occur as a normal part of TRS-RenTelco’s rental business;

however, these sales and related gross margins can fluctuate from quarter to quarter depending on customer requirements and related mix of equipment sold, equipment availability and funding.

For the three months ended September 30, 2024, selling and administrative expenses decreased $0.4 million, or 5%, to $6.6 million.

Nine Months Ended September 30, 2024 Compared to

Nine Months Ended September 30, 2023

Consolidated revenues for the nine months ended September 30, 2024, increased 9% to $667.2 million, from $610.3 million for the same period in 2023.

Consolidated net income for the nine months ended September 30, 2024, increased $50.2 million to $192.8 million, from $142.6 million for the same period in 2023.

Earnings per diluted share for the nine months ended September 30, 2024, increased by $2.04 to $7.85, compared to $5.81 for the same period in 2023.

The increase in consolidated net income and earnings per diluted share during the period was primarily attributed to the $180.0 million gain on merger termination, partly offset by $61.2 million in transaction costs attributed to the terminated merger agreement.

Excluding the gain and transaction costs attributed to the merger termination in the current year and the gain on sale of discontinued operations in 2023, the Company's net income increased by approximately $25.4 million, or 32%, to $105.2 million, and diluted earnings per share increased $1.03, or 32%, to $4.28.

There were no revenues from discontinued operations for the nine months ended September 30, 2024, compared to $9.4 million for the same period in 2023.

There was no income or earnings per diluted share from discontinued operations for the nine months ended September 30, 2024.

Income from discontinued operations for the same period in 2023 was $62.8 million, which included the $61.5 million net gain on sale of discontinued operations, and earnings per diluted share from discontinued operations for the nine months ended September 30, 2023 was $2.56.

For additional information on discontinued operations and the divestiture of Adler Tanks, refer to Note 5 of the condensed consolidated financial statements.

For the nine months ended September 30, 2024, on a consolidated basis from continuing operations:

• Gross profit increased $37.2 million, or 13%, to $320.7 million in 2024.

Mobile Modular’s gross profit increased $39.7 million, or 22%, largely due to higher gross profit on rental, sales and rental related services revenues.

Portable Storage's gross profit decreased $1.8 million, or 4%, primarily due to lower gross profit on rental related services and rental revenues.

TRS-RenTelco’s gross profit decreased $6.2 million, or 13%, primarily due to lower gross profit on rental revenues.

Enviroplex’s gross profit increased $5.5 million, due to higher sales revenue and an increase in sales margins in 2024.

• Selling and administrative expenses decreased $4.3 million to $148.8 million, primarily due to $14.3 million in transaction costs incurred by the Company in 2023, attributed to the acquisitions of Vesta Modular, Brekke Storage, Dixie Storage and Inland Leasing, and the divestiture of Adler Tanks, partly offset by an increase in employee salaries and benefit costs of $5.1 million in 2024.

• Interest expense increased $9.9 million to $38.4 million, which was primarily attributed to $138.7 million higher average debt levels of the Company and a higher effective interest rate in 2024 of 6.60%, compared to 5.96% for the same period in 2023.

The 22% increase in average debt when compared to 2023 was primarily the result of the funding of rental equipment purchases, taxes paid attributed to the gain on sale of discontinued operations and transaction costs regarding the terminated merger with WillScot Mobile Mini.

• Pre-tax income contribution by Mobile Modular, Portable Storage and TRS-RenTelco was 69%, 17% and 11%, respectively, compared to 60%, 23% and 18%, respectively, for the comparable 2023 period.

These results are discussed on a segment basis below.

Enviroplex pre-tax income contribution was 3% and negative 1% in 2024 and 2023, respectively.

• The provision for income taxes resulted in an effective tax rate of 26.3% and 24.5%, for the periods ended September 30, 2024 and 2023, respectively.

The increase in effective tax rate during the current period was largely attributed to increased business activity in higher tax rate states.

• Adjusted EBITDA increased $29.2 million, or 13%, to $259.7 million in 2024.

Mobile Modular

For the nine months ended September 30, 2024, Mobile Modular’s total revenues increased $51.9 million, or 13%, to $463.5 million compared to the same period in 2023, primarily due to higher rental, sales and rental related services revenues.

The revenue increase, together with higher gross profit on rental, sales and rental related services revenues, and a $6.2 million allocated net gain on the sale of a corporate property, resulted in a $34.3 million increase in pre-tax income to $98.3 million for the nine months ended September 30, 2024, from $64.0 million for the same period in 2023.

The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.

Mobile Modular – Nine Months Ended 9/30/24 compared to Nine Months Ended 9/30/23 (Unaudited)

(dollar amounts in thousands)

Nine Months Ended

September 30,

Increase (Decrease)

Rental related services

Rental operations

Total revenues

Costs and Expenses

Direct costs of rental operations:

Depreciation of rental equipment

Rental related services

Total direct costs of rental operations

Costs of sales

Total costs of revenues

Rental related services

Rental operations

Total gross profit

Selling and administrative expenses 5

Other income, net

Income from operations

Interest expense allocation

Pre-tax income

Other Selected Information

Adjusted EBITDA

Average rental equipment 1

Average rental equipment on rent

Average monthly total yield 2

Average utilization 3

Average monthly rental rate 4

Period end rental equipment 1

Period end utilization 3

Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.

Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding new equipment inventory and accessory equipment.

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

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

The Company reported such expenses separately under the Corporate segment and excluded such costs from Selling and administrative expenses.

nm = Not meaningful

Mobile Modular’s gross profit for the nine months ended September 30, 2024, increased $39.2 million, or 21%, to $222.9 million.

For the nine months ended September 30, 2024, compared to the same period in 2023:

• Gross Profit on Rental Revenues – Rental revenues increased $26.4 million, or 13%, due to 10% higher average rental equipment on rent and 3% higher average monthly rental rates in 2024.

As a percentage of rental revenues, depreciation was 13% in both 2024 and 2023, and other direct costs were 27% in 2024 and 33% in 2023, which resulted in gross margin percentages of 60% in 2024, compared to 54% in 2023.

The higher rental revenues and higher rental margins, resulted in gross profit on rental revenues increasing $27.9 million, or 25%, to $141.6 million in 2024.

• Gross Profit on Rental Related Services – Rental related services revenues increased $11.7 million, or 14%, compared to 2023.

The increase in rental related services revenues was primarily attributable to higher delivery, return delivery and dismantle revenues and higher site related services.

The increase in revenues accompanied by comparable gross margin percentage of 34% in 2024, resulted in rental related services gross profit increasing $4.4 million, or 16%, to $32.5 million in 2024.

• Gross Profit on Sales – Sales revenues increased $14.3 million, or 13%, compared to 2023, due to higher new and used equipment sales.

The higher gross margin percentage of 35% in 2024 compared to 32% in 2023, together with higher sales revenue, resulted in gross profit on sales increasing $7.4 million, or 20%, to $44.1 million.

The higher gross margin on sales in 2024 was primarily due to higher margins on both new and used equipment sales.

Sales occur routinely as a normal part of Mobile Modular’s rental business;

For the nine months ended September 30, 2024, selling and administrative expenses decreased $0.5 million to $100.9 million, when compared to the same period in 2023.

Portable Storage

For the nine months ended September 30, 2024, Portable Storage’s total revenues decreased $2.4 million, or 3%, to $71.8 million compared to the same period in 2023, primarily due to lower rental related services and rental revenues, partly offset by higher sales revenues.

Lower gross profit on rental related services and rental revenues, coupled with a $1.3 million allocated net gain on the sale of a corporate property, resulted in a comparable pre-tax income of $23.9 million in 2024.

The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.

Portable Storage – Nine Months Ended 9/30/24 compared to Nine Months Ended 9/30/23 (Unaudited)

(dollar amounts in thousands)

Nine Months Ended

September 30,

Increase (Decrease)

Rental related services

Rental operations

Total revenues

Costs and Expenses

Direct costs of rental operations:

Depreciation of rental equipment

Rental related services

Total direct costs of rental operations

Costs of sales

Total costs of revenues

Rental related services

Rental operations

Total gross profit

Selling and administrative expenses 5

Other income, net

Income from operations

Interest expense allocation

Pre-tax income

Other Selected Information

Adjusted EBITDA

Average rental equipment 1

Average rental equipment on rent

Average monthly total yield 2

Average utilization 3

Average monthly rental rate 4

Period end rental equipment 1

Period end utilization 3

Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.

Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding new rental equipment inventory and accessory equipment.

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

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

The Company reported such expenses separately under the Corporate segment and excluded such costs from Selling and administrative expenses.

nm = Not meaningful

Portable Storage’s gross profit for the nine months ended September 30, 2024, decreased $1.3 million, or 3%, to $48.9 million.

For the nine months ended September 30, 2024, compared to the same period in 2023:

• Gross Profit on Rental Revenues – Rental revenues decreased $1.5 million, or 3%, due to 5% lower average rental equipment on rent, partly offset by 3% higher average monthly rental rates in 2024.

As a percentage of rental revenues, depreciation was 6% and 5% in 2024 and 2023, respectively, and other direct costs were 8% and 10% in 2024 and 2023, respectively, which resulted in gross margin percentage of 86% and 85% in 2024 and 2023, respectively.

The lower rental revenues and higher rental margins resulted in gross profit on rental revenues decreasing $0.6 million, or 1%, to $46.0 million in 2024.

• Gross Profit on Rental Related Services – Rental related services revenues was $13.8 million, a decrease of $1.6 million compared to 2023.

The gross margin on rental related services revenues was 4% in 2024, compared to 9% in 2023.

The lower revenues coupled with lower gross margins in 2024, resulted in rental related services gross profit decreasing $0.9 million, when compared to 2023.

• Gross Profit on Sales – Sales revenues increased $1.0 million, primarily due to higher used equipment sales.

The higher sales revenues and higher gross margins of 39% in 2024, compared to 38% in 2023, resulted in sales gross profit increasing $0.4 million, or 37%, to $1.5 million in 2024.

Sales occur routinely as a normal part of Portable Storage’s rental business;

however, these sales can fluctuate from period to period depending on customer requirements, equipment availability and funding.

For the nine months ended September 30, 2024, Portable Storage’s selling and administrative expenses decreased $1.2 million when compared to the same period in 2023.

The reduction in selling and administrative expenses was primarily the result of allocated transaction costs of $1.1 million in 2023, attributed to the acquisitions of Vesta Modular, Brekke Storage, Dixie Storage and Inland Leasing, and the divestiture of Adler Tanks.

For the nine months ended September 30, 2024, TRS-RenTelco’s total revenues decreased $11.8 million to $101.2 million, compared to the same period in 2023, primarily due to lower rental and sales revenues.

Lower gross profit on rental revenues, partly offset by a $1.7 million allocated net gain on the sale of a corporate property, resulted in a 13% decrease in pre-tax income to $16.2 million for the nine months ended September 30, 2024, from $18.6 million for the same period in 2023.

The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information.

TRS-RenTelco – Nine Months Ended 9/30/24 compared to Nine Months Ended 9/30/23 (Unaudited)

(dollar amounts in thousands)

Nine Months Ended

September 30,

Increase (Decrease)

Rental related services

Rental operations

Total revenues

Costs and Expenses

Direct costs of rental operations:

Depreciation of rental equipment

Rental related services

Total direct costs of rental operations

Costs of sales

Total costs of revenues

Rental related services

Rental operations

Total gross profit

Selling and administrative expenses 5

Other income, net

Income from operations

Interest expense allocation

Foreign currency exchange gain

Pre-tax income

Other Selected Information

Adjusted EBITDA

Average rental equipment 1

Average rental equipment on rent

Average monthly total yield 2

Average utilization 3

Average monthly rental rate 4

Period end rental equipment 1

Period end utilization 3

Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.

Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding new rental equipment inventory and accessory equipment.

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

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

The Company reported such expenses separately under the Corporate segment and excluded such costs from Selling and administrative expenses.

During the year ended December 31, 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 reclassified $1.7 million in transaction costs from Selling and administrative expenses for the three months ended March 31, 2024, and reported such expenses separately as non-operating expense under the Corporate segment.

nm = Not meaningful

TRS-RenTelco’s gross profit for the nine months ended September 30, 2024 decreased $6.2 million, or 13%, to $40.9 million.

For the nine months ended September 30, 2024 compared to the same period in 2023:

• Gross Profit on Rental Revenues – Rental revenues decreased $10.0 million, or 12%, depreciation expense decreased $3.2 million, or 9%, and other direct costs decreased by $0.5 million, or 3%, resulting in a 19% decrease in gross profit on rental revenues to $27.5 million.

TRS-RenTelco’s gross profit for the three months ended March 31, 2025 increased $1.0 million, or 7%, to $14.9 million.

For the three months ended March 31, 2025 compared to the same period in 2024:

• Gross Profit on Rental Revenues – Rental revenues increased $0.1 million, depreciation expense decreased $1.6 million, or 14%, and other direct costs increased by $0.4 million, or 9%, resulting in a 14% increase in gross profit on rental revenues to $10.3 million.

As a percentage of rental revenues, depreciation was 39% and 45% in 2025 and 2024, respectively, and other direct costs were 21% and 19% in 2025 and 2024, respectively, which resulted in a gross margin percentage of 40% and 36% in 2025 and 2024, respectively.

The decrease in rental revenues was primarily due to a 10% reduction in average rental equipment on rent and 2% lower average monthly rental rates in 2024, as compared to 2023.

• Gross Profit on Sales – Sales revenues decreased $1.1 million, or 5%, to $20.3 million in 2024.

Gross profit on sales was $10.9 million, an increase of $0.9 million when compared to 2023, with a gross margin percentage of 54% in 2024, up from 47% in 2023.

• Gross Profit on Sales – Sales revenues increased $1.2 million, or 17%, to $8.0 million in 2025.

Gross profit on sales decreased $0.2 million, or 4%, to $3.7 million, with a lower gross margin percentage of 47% in 2025, compared to 57% in 2024.

Sales occur as a normal part of TRS-RenTelco’s rental business;

however, these sales and related gross margins can fluctuate from quarter to quarter depending on customer requirements and related mix of equipment sold, equipment availability and funding.

For the nine months ended September 30, 2024, selling and administrative expenses decreased $3.1 million, or 13%, to $20.5 million, when compared to the same period in 2023.

The reduction in selling and administrative expenses was primarily the result of allocated transaction costs of $1.4 million in 2023, attributed to the acquisitions of Vesta Modular, Brekke Storage, Dixie Storage and Inland Leasing, and the divestiture of Adler Tanks.

For the three months ended March 31, 2025, selling and administrative expenses increased $0.2 million, or 3%, to $7.4 million.

Adjusted EBITDA

13 unchanged sentences

Because Adjusted EBITDA is a non-GAAP financial measure, as defined by the SEC, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Reconciliation of Income from Continuing Operations to Adjusted EBITDA

Reconciliation of Net Income to Adjusted EBITDA

(dollar amounts in thousands)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Twelve Months Ended

September 30,

Income from continuing operations

Provision for income taxes from continuing operations

Provision for income taxes

Interest expense

8 unchanged sentences

Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenues for the period.

Transaction costs include acquisition and divestiture related legal and professional fees and other costs specific to these transactions.

Transaction costs include merger and acquisition related legal and professional fees and other costs specific to these transactions.

Other income, net consists of net gains on property, plant and equipment sales that are infrequent in nature and excluded from Adjusted EBITDA.

The gain on merger termination from WillScot Mobile Mini was considered a non-operating transaction and is excluded from Adjusted EBITDA.

For the nine months ended September 30, 2024, total Adjusted EBITDA from both continuing and discontinued operations was $259.7 million, compared to $234.2 million for the same period in 2023, excluding the gain on sale of the divestiture of Adler Tanks.

For the nine months ended September 30, 2024 and 2023, the total Adjusted EBITDA from continuing operations was $259.7 million

and $230.5 million, respectively.

There were no adjusted earnings from discontinued operations during the nine months ended September 30, 2024, and total Adjusted EBITDA from discontinued operations of $3.7 million during the comparable period in 2023.

The following table reconciles Adjusted EBITDA on a combined basis, including both continuing and discontinued operations, to the net cash provided by operating activities on the Company's condensed consolidated statement of cash flows.

Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities

Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA

(dollar amounts in thousands)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Twelve Months Ended

September 30,

Adjusted EBITDA 1

Interest paid

Income taxes paid, net of refunds received

Gain on sale of used rental equipment

Foreign currency exchange loss

Amortization of debt issuance costs

Net cash provided by operating activities

Change in certain assets and liabilities:

Accounts receivable, net

Prepaid expenses and other assets

Accounts payable and other liabilities

Inventories, prepaid expenses and other assets

Accounts payable and accrued liabilities

Deferred income

Net cash provided by operating activities

Amortization of debt issuance costs

Foreign currency exchange (loss) gain

Gain on sale of used rental equipment

Income taxes paid, net of refunds received

Interest paid

Adjusted EBITDA 1

Adjusted EBITDA is defined as income from operations before interest expense, provision for income taxes, depreciation, amortization, share-based compensation and non-operating transactions.

2 unchanged sentences

• Permit the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Facility and the Note Purchase Agreement (as defined and more fully described under the heading “Liquidity and Capital Resources” in this MD&A)) of Adjusted EBITDA (as defined in the Credit Facility and the Note Purchase Agreement) to fixed charges as of the end of any fiscal quarter to be less than 2.50 to 1.

At September 30, 2024, the actual ratio was 3.07 to 1.

At March 31, 2025, the actual ratio was 3.38 to 1.

• Permit the Consolidated Leverage Ratio of funded debt (as defined in the Credit Facility and the Note Purchase Agreement) to Adjusted EBITDA at any time during any period of four consecutive quarters to be greater than 2.75 to 1.

At September 30, 2024, the actual ratio was 1.75 to 1.

At September 30, 2024, the Company was in compliance with each of the aforementioned covenants.

At March 31, 2025, the actual ratio was 1.58 to 1.

At March 31, 2025, the Company was in compliance with each of the aforementioned covenants.

There are no anticipated trends that the Company is aware of that would indicate non-compliance with these covenants, although, significant deterioration in our financial performance could impact the Company’s ability to comply with these covenants.

1 unchanged sentence

The Company’s rental businesses are capital intensive and generate significant cash flows.

Cash flows for the Company for the nine months ended September 30, 2024 compared to the same period in 2023 are summarized as follows:

Cash flows for the Company for the three months ended March 31, 2025 compared to the same period in 2024 are summarized as follows:

Cash Flows from Operating Activities:

The Company’s operations provided net cash of $53.9 million in 2025, compared to $59.4 million in 2024.

The $218.7 million increase in net cash provided by operating activities was primarily attributable to the gain on merger termination from WillScot Mobile Mini after transaction costs, which provided $87.6 million of net income during the period.

Further, operating activities provided for a $61.9 million increase in deferred income taxes, a $29.1 million reduction in accounts receivable and a $25.4 million reduction in prepaid expenses and other assets, which contributed to the net cash provided by operating activities during the period.

The $5.5 million decrease in net cash provided by operating activities was primarily attributable to $24.3 million lower cash provided due to a reduction in accounts payable, a result of the payment timing of rental equipment acquisitions and other trade accounts payable.

In addition, the Company's inventories provided for $6.3 million higher cash flows in 2025, compared to 2024, primarily due to lower rental equipment manufacturing in progress when compared to the same period in 2024.

Finally, the Company's prepaid expenses and other assets provided $5.7 million higher cash flows in 2025, compared to 2024, primarily as a result of lower prepaid income taxes.

Cash Flows from Investing Activities:

Net cash used in investing activities was $2.7 million in 2025, down from $78.1 million in 2024.

The $190.7 million decrease in net cash used was primarily due to the $461.8 million paid for the business acquisitions of Vesta Modular, Brekke Storage, Dixie Storage and Inland Leasing acquisitions in 2023, which was partly offset by $268.0 million in

proceeds from the sale of discontinued operations during the same period.

The net effect of these transactions in 2023 was $193.8 million in net cash used by investing activities.

The $75.4 million decrease in net cash used was primarily due to $67.1 million lower rental equipment purchases when compared to the previous year, due to the higher rental equipment acquisitions in the first quarter of 2024 to meet customer rental demand.

Further, the Company had $21.3 million and $12.3 million lower purchases and proceeds of property, plant and equipment in 2025, respectively, which was primarily attributed to decreased land and building purchases during the year, and the sale of a corporate property in 2024.

Cash Flows from Financing Activities:

Net cash used in financing activities was $48.6 million in 2025, compared to $19.7 million in net cash provided during 2024.

The $407.2 million change was primarily attributable to reduced borrowings under bank lines of credit and note purchase agreements in 2024, as during 2023 the net borrowings were required for the funding of the Vesta Modular, Brekke Storage, Dixie Storage and Inland Leasing business acquisitions.

Further, during the 2024 period the Company made net payments of $154.4 million under bank lines of credit, primarily attributable to proceeds received from the merger termination with WillScot Mobile Mini.

The $68.3 million change was largely attributed to reduced borrowings under bank lines of credit, primarily as a result of lower rental equipment purchases during the period, when compared to 2024.

Significant capital expenditures are required to maintain and grow the Company’s rental assets.

5 unchanged sentences

On July 15, 2022, the Company entered into an amended and restated credit agreement with Bank of America, N.A., as Administrative Agent, Swing Line Lender, L/C Issuer and lender, and other lenders named therein (the “Credit Facility”).

The Credit Facility provides for a $650.0 million unsecured revolving credit facility (which may be further increased to $950.0 million, of which as of September 30, 2024, $73.0 million was utilized through the term loan entered on April 23, 2024, by adding one or more tranches of term loans and/or increasing the aggregate revolving commitments), which includes a $40.0 million sublimit for the issuance of standby letters of credit and a $20.0 million sublimit for swingline loans.

The Credit Facility provides for a $650.0 million unsecured revolving credit facility (which may be further increased to $950.0 million, of which as of Mach 31, 2025, $73.0 million was utilized through the term loan entered on April 23, 2024, by adding one or more tranches of term loans and/or increasing the aggregate revolving commitments), which includes a $40.0 million sublimit for the issuance of standby letters of credit and a $20.0 million sublimit for swingline loans.

The proceeds of the Credit Facility are available to be used for general corporate purposes, including permitted acquisitions.

12 unchanged sentences

Concurrently with entry into the First Incremental Amendment, the Company repaid revolving loans issued under the Credit Agreement in an aggregate amount equal to approximately $75.0 million.

At September 30, 2024, under the Credit Facility and Sweep Service Facility, the Company had unsecured lines of credit that permit it to borrow up to $650.0 million of which $360.6 million was outstanding and had capacity to borrow up to an additional $289.4

At March 31, 2025, under the Credit Facility and Sweep Service Facility, the Company had unsecured lines of credit that permit it to borrow up to $650.0 million of which $311.5 million was outstanding and had capacity to borrow up to an additional $338.5 million.

The Credit Facility contains financial covenants requiring the Company to not (all defined terms used below not otherwise defined herein have the meaning assigned to such terms in the Credit Facility):

• Permit the Consolidated Fixed Charge Coverage Ratio as of the end of any fiscal quarter to be less than 2.50 to 1.

At September 30, 2024, the actual ratio was 3.07 to 1.

At March 31, 2025, the actual ratio was 3.38 to 1.

• Permit the Consolidated Leverage Ratio at any time during any period of four consecutive fiscal quarters to be greater than 2.75 to 1.

At September 30, 2024, the actual ratio was 1.75 to 1.

At September 30, 2024, the Company was in compliance with each of the aforementioned covenants.

At March 31, 2025, the actual ratio was 1.58 to 1.

At March 31, 2025, the Company was in compliance with each of the aforementioned covenants.

There are no anticipated trends that the Company is aware of that would indicate non-compliance with these covenants, although significant deterioration in our financial performance could impact the Company’s ability to comply with these covenants.

15 unchanged sentences

The full net proceeds from the Series F Senior Notes will primarily be used to fulfill the income tax obligations incurred from the divestiture of Adler Tanks.

At September 30, 2024, the principal balance outstanding under the Series F Senior Notes was $75.0 million.

At March 31, 2025, the principal balance outstanding under the Series F Senior Notes was $75.0 million.

2.57% Senior Notes Due in 2028

5 unchanged sentences

The full net proceeds from the Series D Senior Notes were used to pay off the Company’s $40 million Series B Senior Notes.

At September 30, 2024, the principal balance outstanding under the Series D Senior Notes was $40.0 million.

At March 31, 2025, the principal balance outstanding under the Series D Senior Notes was $40.0 million.

2.35% Senior Notes Due in 2026

5 unchanged sentences

The full net proceeds from the Series E Senior Notes were used to pay down the Company’s credit facility.

At September 30, 2024, the principal balance outstanding under the Series E Senior Notes was $60.0 million.

Among other restrictions, the Note Purchase Agreement, which has superseded in its entirety the Prior NPA, under which the Series D Senior Notes, Series E Senior Notes and Series F Senior Notes were sold, contains financial covenants requiring the Company to not (all defined terms used below not otherwise defined herein have the meaning assigned to such terms in the Note Purchase Agreement):

At March 31, 2025, the principal balance outstanding under the Series E Senior Notes was $60.0 million.

to not (all defined terms used below not otherwise defined herein have the meaning assigned to such terms in the Note Purchase Agreement):

• Permit the Consolidated Fixed Charge Coverage Ratio of EBITDA to fixed charges as of the end of any fiscal quarter to be less than 2.50 to 1.

At September 30, 2024, the actual ratio was 3.07 to 1.

At March 31, 2025, the actual ratio was 3.38 to 1.

• Permit the Consolidated Leverage Ratio of funded debt to EBITDA at any time during any period of four consecutive quarters to be greater than 2.75 to 1.

At September 30, 2024, the actual ratio was 1.75 to 1.

At September 30, 2024, the Company was in compliance with each of the aforementioned covenants.

At March 31, 2025, the actual ratio was 1.58 to 1.

At March 31, 2025, the Company was in compliance with each of the aforementioned covenants.

3 unchanged sentences

Critical Accounting Estimates

There were no material changes in our judgments and assumptions associated with the development of our critical accounting estimates during the nine month period ended September 30, 2024.

There were no material changes in our judgments and assumptions associated with the development of our critical accounting estimates during the three month period ended March 31, 2025.

Refer to our 2024 Annual Report for a discussion of our critical accounting policies and estimates.

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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis