What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-10-23 compared with 2025-07-24 · 82 added, 56 removed, 381 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”) and the related condensed consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows as of June 30, 2025 and for the three-month and six-month periods ended June 30, 2025 and 2024 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”) and the related condensed consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows as of September 30, 2025 and for the three-month and nine-month periods ended September 30, 2025 and 2024, 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 24, 2025

October 23, 2025

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 (gain) loss

Foreign currency exchange loss (gain)

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

WillScot Mobile Mini transaction costs (Note 1)

7 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, 2025 and at December 31, 2024

Accounts receivable, net of allowance for credit losses of $ 2,866 at September 30, 2025 and at December 31, 2024

Rental equipment, at cost:

16 unchanged sentences

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

Issued and outstanding - 24,612 shares as of June 30, 2025 and 24,551 shares as of December 31, 2024

Issued and outstanding - 24,612 shares as of September 30, 2025 and 24,551 shares as of December 31, 2024

Retained earnings

23 unchanged sentences

Balance at June 30, 2025

Share-based compensation

Common stock issued under stock plans, net of shares

withheld for employee taxes

Taxes paid related to net share settlement of stock awards

Dividends accrued of $ 0.485 per share

Other comprehensive income

Balance at September 30, 2025

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

17 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.

1 unchanged sentence

CONDENSED Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

8 unchanged sentences

Gain on sale of used rental equipment

Foreign currency exchange (gain) loss

Foreign currency exchange gain

Amortization of debt issuance costs

14 unchanged sentences

Net payments under bank lines of credit

Borrowings under term note agreement

Principal payment of term note agreement

Borrowings under Series G senior notes

Taxes paid related to net share settlement of stock awards

Payment of dividends

Net cash (used in) provided by financing activities

Net cash used in financing activities

Net increase in cash

2 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

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2025

September 30, 2025

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The condensed consolidated financial statements for the six months ended June 30, 2025 and 2024 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, 2025 and 2024 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, 2025, 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, 2025, 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 19, 2025 for the year ended December 31, 2024 (the “2024 Annual Report”).

3 unchanged sentences

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

Expenses recognized as a result of the terminated merger totaled $ 21.7 million and $ 63.2 million for the six and twelve month periods ended June 30, 2024 and December 31, 2024, respectively.

Expenses recognized as a result of the terminated merger totaled $ 61.2 million and $ 63.2 million for the nine and twelve month periods ended September 30, 2024 and December 31, 2024, respectively.

The termination payment received of $ 180.0 million, net of transaction costs, resulted in net proceeds received of $ 116.8 million during the year ended December 31, 2024.

6 unchanged sentences

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

In November 2024, the FASB issued Accounting Standards Update ("ASU") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

9 unchanged sentences

accounted for as a purchase of a “business” in accordance with criteria in Accounting Standards Codification ("ASC") 805, Business Combinations , using the purchase method of accounting.

Incremental transaction costs totaled $ 0.2 million for the quarter ended June 30, 2025.

Incremental transaction costs totaled $ 0.3 million for the nine months ended September 30, 2025.

REVENUE RECOGNITION

The Company’s accounting for revenues is governed by two accounting standards.

The majority of the Company’s revenues are considered lease or lease related and are accounted for in accordance with Accounting Standards Codification 842, Leases (Topic 842).

The majority of the Company’s revenues are considered lease or lease related and are accounted for in accordance with ASC 842, Leases (Topic 842).

Revenues determined to be non-lease related are accounted for in accordance with ASC 606, Revenue from Contracts with Customers (Topic 606).

9 unchanged sentences

These contract assets and liabilities are reported on the condensed 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 condensed consolidated balance sheets totaled $ 54.2 million and $ 35.4 million at June 30, 2025 and December 31, 2024, respectively.

Sales revenues totaling $ 13.8 million and $ 28.7 million were recognized during the three and six months ended June 30, 2025, respectively, which were included in the contract liability balance at December 31, 2024.

The contract liabilities included in Deferred income on the Company’s condensed consolidated balance sheets totaled $ 48.9 million and $ 35.4 million at September 30, 2025 and December 31, 2024, respectively.

Sales revenues totaling $ 5.8 million and $ 34.5 million were recognized during the three and nine months ended September 30, 2025, respectively, which were included in the contract liability balance at December 31, 2024.

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 condensed consolidated balance sheets and totaled $ 20.0 million and $ 13.0 million at June 30, 2025 and December 31, 2024, respectively.

The Company did not recognize any material contract asset impairments during the periods ended June 30, 2025 and December 31, 2024, respectively.

These unbilled contract assets are included in Accounts receivable on the Company’s condensed consolidated balance sheets and totaled $ 9.9 million and $ 13.0 million at September 30, 2025 and December 31, 2024, respectively.

The Company did not recognize any material contract asset impairments during the periods ended September 30, 2025 and December 31, 2024, 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, 2025, approximately $ 43.8 million of revenue is expected to be recognized for unsatisfied or partially satisfied obligations.

As of September 30, 2025, approximately $ 38.3 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 twelve months, with the remaining balance recognized thereafter.

For the three and six months ended June 30, 2025, approximately $ 67.5 million and $ 104.8 million of revenue was recognized for sales and non-lease services transferred at a point in time, respectively, and approximately $ 13.9 million and $ 24.1 million of revenue was recognized for sales and non-lease services transferred over time, respectively.

For the three and nine months ended September 30, 2025, approximately $ 79.5 million and $ 184.3 million of revenue was recognized for sales and non-lease services transferred at a point in time, respectively, and approximately $ 18.1 million and $ 42.2 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.

10 unchanged sentences

Certain leases are accounted for as finance leases.

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, 2025, the Company’s future minimum lease payments to be received under non-cancelable finance leases were $ 6.7 million.

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 nine months ended September 30, 2025, the Company’s future minimum lease payments to be received under non-cancelable finance leases were $ 6.2 million.

Of the total investment in sales-type leases, future minimum lease payments are expected to be $ 1.1 million for the remainder of the current year, $ 2.2 million in 2026, $ 1.0 million in 2027, $ 1.1 million in 2028 and $ 0.8 million in 2029.

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, 2025.

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 nine months ended September 30, 2025.

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

In the three and six months ended June 30, 2025, the Company’s lease revenues were $ 154.2 million and $ 302.1 million, respectively, consisting of $ 152.7 million and $ 299.9 million of operating lease revenues, respectively, and $ 1.5 million and $ 2.2 million of finance lease revenues, respectively.

In the three and nine months ended September 30, 2025, the Company’s lease revenues were $ 158.9 million and $ 461.0 million, respectively, consisting of $ 158.1 million and $ 457.9 million of operating lease revenues, respectively, and $ 0.8 million and $ 3.1 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, 2025, include $ 1.3 million and $ 1.8 million of sales revenues, respectively, and $ 0.2 million and $ 0.4 million of interest income, respectively.

The Company’s finance lease revenues for the three and nine months ended September 30, 2025, include $ 0.6 million and $ 2.4 million of sales revenues, respectively, and $ 0.2 millio n and $ 0.7 m illion of interest income, respectively.

Non-Lease Revenues

5 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, 2025 and 2024:

(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

13 unchanged sentences

These sales are generally recognized at a point in time, with contractually defined performance obligations that are typically transferred upon the closing date of the sale.

These types of sales are infrequent in occurrence and reported on the condensed consolidated statements of income within the scope of ASC 610, Other Income .

types of sales are infrequent in occurrence and reported on the condensed consolidated statements of income within the scope of ASC 610, Other Income .

Proceeds to be received from the sale of property, plant and equipment are included in Accounts receivable on the Company's condensed consolidated balance sheets.

4 unchanged sentences

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 85,512 and 73,190 anti-dilutive securities excluded from the computation of diluted earnings per share for the six months ended June 30, 2025 and 2024, respectively.

There were 57,157 anti-dilutive securities excluded from the computation of diluted earnings per share for the nine months ended September 30, 2025.

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

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, as amended (the "Exchange Act").

3 unchanged sentences

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 six months ended June 30, 2025 and 2024.

As of June 30, 2025, 2,000,000 shares remained authorized for repurchase under the Repurchase Plan.

There were no shares repurchased during the nine months ended September 30, 2025 and 2024.

As of September 30, 2025, 2,000,000 shares remained 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, 2025

September 30, 2025

Customer relationships

13 unchanged sentences

The Company last conducted a qualitative analysis of its goodwill and intangible assets in the fourth quarter 2024, with no indicators of impairment.

In addition, no impairment triggering events occurred during the six months ended June 30, 2025, 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, 2025, 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, 2025 and 2024, was $ 5.2 million and $ 5.1 million, respectively.

Based on the carrying values at June 30, 2025 and assuming no subsequent impairment of the underlying assets, the amortization expense is expected to be $ 5.3 million for the remainder of fiscal year 2025, $ 10.2 million in 2026, $ 10.0 million in 2027, $ 8.6 million in 2028, $ 5.1 million in 2029 and $ 3.3 million in 2030.

Amortization expense in the nine months ended September 30, 2025 and 2024, was $ 7.8 million and $ 7.7 million, respectively.

Based on the carrying values at September 30, 2025 and assuming no subsequent impairment of the underlying assets, the amortization expense is expected to be $ 2.7 million for the remainder of fiscal year 2025, $ 10.2 million in 2026, $ 10.0 million in 2027, $ 8.6 million in 2028, $ 5.1 million in 2029 and $ 3.3 million in 2030.

SEGMENT REPORTING

6 unchanged sentences

These determinations are generally made as part of the annual budgeting process, with regular reviews occurring throughout the year that can result in allocation changes depending upon performance against budget.

On a monthly basis, the CODM considers period end and average rental equipment utilization and budget-to-actual variances to gross profit, income from operations and income before provision for income taxes when making decisions about allocating capital and employee resources to the segments.

On a monthly basis, the CODM considers period end and average rental equipment utilization and budget-to-actual variances to gross profit, income from operations, income before provision for income taxes and net income when making decisions about allocating capital and employee resources to the segments.

Excluding interest expense, allocations of revenue and expense not directly associated with one of these segments are generally allocated to Mobile Modular, Portable Storage and TRS-RenTelco, based on their pro-rata share of direct revenues.

1 unchanged sentence

The Company does not report total assets by business segment.

Summarized financial information for the six months ended June 30, 2025 and 2024, for the Company’s reportable segments is shown in the following tables:

Summarized financial information for the nine months ended September 30, 2025 and 2024, for the Company’s reportable segments is shown in the following tables:

(dollar amounts in thousands)

Portable Storage

Six Months Ended June 30,

Nine Months Ended September 30,

Rental revenues

17 unchanged sentences

Income before provision for income taxes

Reconciliation of Segment Profit (Loss)

Provision for income taxes

Reconciliation of Segment Profit

Total segment gross profit

3 unchanged sentences

Income before provision for income taxes

Provision for income taxes

Other Selected Information

7 unchanged sentences

Portable Storage

Six Months Ended June 30,

Nine Months Ended September 30,

Rental revenues

16 unchanged sentences

Interest expense (income) allocation

Foreign currency exchange loss

Foreign currency exchange gain

Income before provision for income taxes

Reconciliation of Segment Profit (Loss)

Provision for income taxes

Reconciliation of Segment Profit

Total segment gross profit

3 unchanged sentences

Foreign currency exchange loss

Gain on merger termination from WillScot Mobile Mini 6

WillScot Mobile Mini transaction costs 6

Income before provision for income taxes

Provision for income taxes

Other Selected Information

5 unchanged sentences

Average utilization 2

Gross Enviroplex sales revenues were $ 27,079 and $ 13,093 for the six months ended June 30, 2025 and 2024, respectively.

There were no inter-segment sales to Mobile Modular in the six months ended June 30, 2025 and $ 2 of inter-segment sales to Mobile Modular in the six months ended June 30, 2024, which required elimination in consolidation.

Gross Enviroplex sales revenues were $ 40,762 and $ 30,593 for the nine months ended September 30, 2025 and 2024, respectively.

There were no inter-segment sales to Mobile Modular in the nine months ended September 30, 2025 and $ 2 of inter-segment sales to Mobile Modular in the nine months ended September 30, 2024, 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 new equipment inventory and accessory equipment.

4 unchanged sentences

Other segment items for each reportable segment is primarily comprised of credit losses.

During the six months ended June 30, 2024, the Company incurred $ 21,721 of transaction costs attributed to the terminated merger with WillScot Mobile Mini.

No single customer accounted for more than 10% of total revenues for the six months ended June 30, 2025 and 2024.

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

During the nine months ended September 30, 2024, the Company received $ 180.0 million in cash proceeds and incurred $ 61.2 million in transaction costs attributed to the terminated merger with WillScot Mobile Mini.

No single customer accounted for more than 10% of total revenues for the nine months ended September 30, 2025 and 2024.

Revenues from foreign country customers accounted for 2 % of the Company’s total revenues for both comparable periods.

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