MCGRATH RENTCORP 10-Q

Item 1. Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders McGrath RentCorp 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 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. We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of the Company as of December 31, 2024, and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 19, 2025, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2024, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Basis for review results These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our reviews in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. /s/ GRANT THORNTON LLP San Francisco, California October 23, 2025 3 MCGRATH RENTCORP CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share amounts) 2025 2024 2025 2024 Revenues Rental $ 128,488 $ 124,203 $ 374,586 $ 365,708 Rental related services 49,622 47,701 121,021 111,640 Rental operations 178,110 171,904 495,607 477,349 Sales 76,058 92,508 184,759 181,992 Other 2,275 2,346 7,109 7,855 Total revenues 256,443 266,758 687,475 667,196 Costs and Expenses Direct costs of rental operations: Depreciation of rental equipment 21,868 21,981 64,799 66,512 Rental related services 35,422 32,439 85,212 78,215 Other 32,308 27,252 91,479 84,182 Total direct costs of rental operations 89,598 81,672 241,490 228,909 Costs of sales 47,588 61,107 119,578 117,625 Total costs of revenues 137,186 142,779 361,068 346,534 Gross profit 119,257 123,979 326,407 320,661 Expenses: Selling and administrative expenses 52,540 49,297 156,952 148,764 Other income, net — — — ( 9,281 ) Income from operations 66,717 74,682 169,455 181,178 Interest expense 8,177 12,641 24,130 38,383 Foreign currency exchange loss (gain) 32 ( 216 ) ( 54 ) ( 53 ) Gain on merger termination from WillScot Mobile Mini (Note 1) — ( 180,000 ) — ( 180,000 ) WillScot Mobile Mini transaction costs (Note 1) — 39,436 — 61,157 Income before provision for income taxes 58,508 202,821 145,379 261,691 Provision for income taxes 16,211 53,504 38,900 68,913 Net income 42,297 149,317 106,479 192,778 Earnings per share: Basic $ 1.72 $ 6.08 $ 4.33 $ 7.86 Diluted $ 1.72 $ 6.08 $ 4.32 $ 7.85 Shares used in per share calculation: Basic 24,612 24,551 24,598 24,538 Diluted 24,644 24,567 24,628 24,564 Cash dividends declared per share $ 0.485 $ 0.475 $ 1.455 $ 1.425 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 MCGRATH RENTCORP CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Net income $ 42,297 $ 149,317 $ 106,479 $ 192,778 Other comprehensive income: Foreign currency translation adjustment, net of tax impact — ( 135 ) — ( 57 ) Comprehensive income $ 42,297 $ 149,182 $ 106,479 $ 192,721 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 McGrath RentCorp CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) September 30, December 31, (in thousands) 2025 2024 Assets Cash $ 7,256 $ 807 Accounts receivable, net of allowance for credit losses of $ 2,866 at September 30, 2025 and at December 31, 2024 241,346 219,342 Rental equipment, at cost: Relocatable modular buildings 1,456,049 1,414,367 Portable storage containers 243,386 240,846 Electronic test equipment 338,397 343,982 2,037,832 1,999,195 Less: accumulated depreciation ( 637,863 ) ( 611,536 ) Rental equipment, net 1,399,969 1,387,659 Property, plant and equipment, net 224,881 197,439 Inventories 13,422 14,304 Prepaid expenses and other assets 82,362 80,477 Intangible assets, net 49,262 54,332 Goodwill 332,373 323,224 Total assets $ 2,350,871 $ 2,277,584 Liabilities and Shareholders' Equity Liabilities: Notes payable $ 551,800 $ 590,208 Accounts payable 55,131 60,082 Accrued liabilities 113,920 113,961 Deferred income 130,767 109,836 Deferred income taxes, net 303,047 280,129 Total liabilities 1,154,665 1,154,216 Shareholders’ equity: Common stock, no par value - Authorized 40,000 shares Issued and outstanding - 24,612 shares as of September 30, 2025 and 24,551 shares as of December 31, 2024 118,648 116,253 Retained earnings 1,077,558 1,007,115 Total shareholders’ equity 1,196,206 1,123,368 Total liabilities and shareholders’ equity $ 2,350,871 $ 2,277,584 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 McGrath RentCorp CONDENSED Consolidated Statements OF SHAREHOLDERS’ EQUITY (unaudited) Common Stock Retained Accumulated Other Comprehensive Total Shareholders’ (in thousands, except per share amounts) Shares Amount Earnings Income (Loss) Equity Balance at December 31, 2024 24,551 $ 116,253 $ 1,007,115 $ — $ 1,123,368 Net income — — 28,209 — 28,209 Share-based compensation — 2,544 — — 2,544 Common stock issued under stock plans, net of shares withheld for employee taxes 55 — — — — Taxes paid related to net share settlement of stock awards — ( 5,616 ) — — ( 5,616 ) Dividends accrued of $ 0.485 per share — — ( 12,094 ) — ( 12,094 ) Other comprehensive income — — — — — Balance at March 31, 2025 24,606 $ 113,181 $ 1,023,230 $ — $ 1,136,411 Net income — — 35,973 — 35,973 Share-based compensation — 2,778 — — 2,778 Common stock issued under stock plans, net of shares withheld for employee taxes 6 — — — — Taxes paid related to net share settlement of stock awards — ( 68 ) — — ( 68 ) Dividends accrued of $ 0.485 per share — — ( 11,933 ) — ( 11,933 ) Other comprehensive income — — — — — Balance at June 30, 2025 24,612 $ 115,891 $ 1,047,270 $ — $ 1,163,161 Net income — — 42,297 — 42,297 Share-based compensation — 2,766 — — 2,766 Common stock issued under stock plans, net of shares withheld for employee taxes — — — — — Taxes paid related to net share settlement of stock awards — ( 9 ) — — ( 9 ) Dividends accrued of $ 0.485 per share — — ( 12,009 ) — ( 12,009 ) Other comprehensive income — — — — — Balance at September 30, 2025 24,612 $ 118,648 $ 1,077,558 $ — $ 1,196,206 The accompanying notes are an integral part of these condensed consolidated financial statements. 7 Common Stock Retained Accumulated Other Comprehensive Total Shareholders’ (in thousands, except per share amounts) Shares Amount Earnings Income (Loss) Equity Balance at December 31, 2023 24,496 $ 111,122 $ 822,796 $ ( 116 ) $ 933,802 Net income — — 22,848 — 22,848 Share-based compensation — 2,209 — — 2,209 Common stock issued under stock plans, net of shares withheld for employee taxes 45 — — — — Taxes paid related to net share settlement of stock awards — ( 4,082 ) — — ( 4,082 ) Dividends accrued of $ 0.475 per share — — ( 11,824 ) — ( 11,824 ) Other comprehensive income — — — 67 67 Balance at March 31, 2024 24,541 $ 109,249 $ 833,820 $ ( 49 ) $ 943,020 Net income — — 20,618 — 20,618 Share-based compensation — 2,347 — — 2,347 Common stock issued under stock plans, net of shares withheld for employee taxes 9 — — — — Dividends accrued of $ 0.475 per share — — ( 11,763 ) — ( 11,763 ) Other comprehensive income — — — 11 11 Balance at June 30, 2024 24,550 $ 111,596 $ 842,675 $ ( 38 ) $ 954,233 Net income — — 149,317 — 149,317 Share-based compensation — 2,393 — — 2,393 Common stock issued under stock plans, net of shares withheld for employee taxes 1 — — — — Dividends accrued of $ 0.475 per share — — ( 11,748 ) — ( 11,748 ) Other comprehensive loss — — — ( 135 ) ( 135 ) Balance at September 30, 2024 24,551 $ 113,989 $ 980,244 $ ( 173 ) $ 1,094,060 The accompanying notes are an integral part of these condensed consolidated financial statements. 8 McGrath RentCorp CONDENSED Consolidated Statements of Cash Flows (unaudited) Nine Months Ended September 30, (in thousands) 2025 2024 Cash Flows from Operating Activities: Net income $ 106,479 $ 192,778 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 79,717 80,824 Deferred income taxes 22,918 31,927 Provision for credit losses 1,266 1,437 Share-based compensation 8,088 6,949 Gain on sale of property, plant and equipment — ( 9,281 ) Gain on sale of used rental equipment ( 30,188 ) ( 25,185 ) Foreign currency exchange gain ( 54 ) ( 53 ) Amortization of debt issuance costs 204 6 Change in: Accounts receivable ( 23,270 ) 1,402 Inventories 882 ( 6,860 ) Prepaid expenses and other assets ( 1,884 ) 19,988 Accounts payable ( 8,041 ) 30,562 Accrued liabilities ( 1,854 ) 605 Deferred income 20,502 12,497 Net cash provided by operating activities 174,765 337,596 Cash Flows from Investing Activities: Purchases of rental equipment ( 91,516 ) ( 167,269 ) Purchases of property, plant and equipment ( 33,235 ) ( 36,070 ) Cash paid for acquisition of businesses ( 21,947 ) — Proceeds from sales of used rental equipment 58,647 50,270 Proceeds from sales of property, plant and equipment — 12,251 Net cash used in investing activities ( 88,051 ) ( 140,818 ) Cash Flows from Financing Activities: Net payments under bank lines of credit ( 40,612 ) ( 154,420 ) Principal payment of term note agreement ( 73,000 ) — Borrowings under Series G senior notes 75,000 — Taxes paid related to net share settlement of stock awards ( 5,693 ) ( 4,082 ) Payment of dividends ( 35,960 ) ( 35,097 ) Net cash used in financing activities ( 80,265 ) ( 193,599 ) Net increase in cash 6,449 3,179 Cash balance, beginning of period 807 877 Cash balance, end of period $ 7,256 $ 4,056 Supplemental Disclosure of Cash Flow Information: Gain on merger termination, net of transaction costs, presented under net cash provided by operating activities $ — $ 118,843 Interest paid, during the period $ 24,869 $ 40,338 Net income taxes paid (refunded), during the period $ 6,537 $ ( 3,826 ) Dividends accrued during the period, not yet paid $ 12,535 $ 12,241 Rental equipment acquisitions, not yet paid $ 8,459 $ 3,333 Business acquisition payments withheld $ 1,815 $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 9 MCGRATH RENTCORP NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) September 30, 2025 NOTE 1. CONDENSED CONSOLIDATED FINANCIAL INFORMATION 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 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”). 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 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. The Company determined that the transaction costs incurred on the terminated merger were significant and required separate presentation on the Company's consolidated statements of income for the year ended December 31, 2024. Due to this determination, the Company has excluded such transaction costs from Selling and administrative expenses and reported them separately on the consolidated statements of income as non-operating expenses. NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes—Improvements to Income Tax Disclosures (Topic 740), which will require Companies to disclose annually the specific categories in income tax rate reconciliations, provide additional information for reconciling items which meet a quantitative threshold, and disaggregate domestic and foreign income or loss from continuing operations. Additionally, this ASU will also require the disclosure of income tax expense or benefit from continuing operations disaggregated by federal, state and foreign. This ASU is effective for fiscal years beginning after December 15, 2024, and applied on a prospective basis. The Company is in the process of evaluating the financial statement impact of this ASU. 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 . This ASU requires incremental disclosures about specific expense categories, including but not limited to, employee compensation, depreciation, intangible asset amortization, selling expenses and purchases of inventory. This ASU is effective for fiscal years beginning after December 31, 2026, and interim reporting periods within annual reporting periods beginning after December 31, 2027. Early adoption is permitted and may be applied either prospectively or retrospectively. The Company is in the process of evaluating the financial statement impact of this ASU. NOTE 3. BUSINESS COMBINATIONS During the quarter ended June 30, 2025, the Company completed the acquisition of a regional provider of temporary and permanent modular space solutions for $ 11.8 million and a regional provider of container solutions for $ 12.0 million, subject to holdback payments of $ 1.2 million and $ 0.6 million, respectively. The preliminary purchase price allocation of the modular solutions provider was $ 6.3 million to the fair value of rental equipment acquired, intangible assets of $ 1.1 million and $ 4.3 million to goodwill. The preliminary purchase price allocation to the container solutions provider was $ 4.7 million to the fair value of rental equipment acquired, $ 1.0 million to property, plant and equipment, intangible assets of $ 1.7 million and $ 4.9 million to goodwill. These acquisitions were 10 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 $ 0.3 million for the nine months ended September 30, 2025. NOTE 4. 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 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). The Company accounts for revenues when approval and commitment from both parties have been obtained, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company typically recognizes non-lease related revenues at a point in time because the customer does not simultaneously consume the benefits of the Company’s promised goods and services, or performance obligations, and obtains control when delivery and installation are complete. For contracts that have multiple performance obligations, the transaction price is allocated to each performance obligation in the contract based on the Company’s best estimate of the standalone selling prices of each distinct performance obligation in the contract. The standalone selling price is typically determined based upon the expected cost plus an estimated margin of each performance obligation. Revenue from contracts that satisfy the criteria for over-time recognition are recognized as work is performed by using the ratio of costs incurred to estimated total contract costs for each contract. The majority of revenue for these contracts is derived from long-term projects which typically span multiple quarters . The timing of revenue recognition, billings, and cash collections results in billed contract receivables and contract assets on the Company's Consolidated Balance Sheets. In the Company’s contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Billings can occur subsequent to revenue recognition, resulting in contract assets, or in advance, resulting in contract liabilities. 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 $ 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 $ 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 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 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. The Company does not typically offer variable payment terms or accept non-monetary consideration. Amounts billed and due from the Company’s customers are classified as Accounts receivable on the Company’s consolidated balance sheet. For certain sales of modular buildings, progress payments from the customer are received during the manufacturing of new equipment, or the preparation of used equipment. The advance payments are not considered a significant financing component because the payments are used to meet working capital needs during the contract and to protect the Company from the customer failing to adequately complete their obligations under the contract. Lease Revenues Rental revenues from operating leases are recognized on a straight-line basis over the term of the lease for all operating segments. Rental billings for periods extending beyond period end are recorded as deferred income and are recognized in the period earned. Rental related services revenues are primarily associated with relocatable modular buildings. For modular building leases, rental related services revenues for modifications, delivery, installation, dismantle and return delivery are lease related because the payments are considered minimum lease payments that are an integral part of the negotiated lease agreement with the customer. These revenues are recognized on a straight-line basis over the term of the lease. 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 11 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 nine months ended September 30, 2025. Other revenues include interest income on finance leases and rental income on facility leases. 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. The lease agreements have a bargain purchase option at the end of the lease term. 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 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 Non-lease revenues are recognized in the period when control of the performance obligation is transferred, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. For portable storage containers and electronic test equipment, rental related services revenues for delivery and return delivery are considered non-lease revenues. Sales revenues are typically recognized at a point in time, which occurs upon the completion of delivery, installation and acceptance of the equipment by the customer. Sales contracts that satisfy the criteria for over-time recognition are recognized as work is performed by using the ratio of costs incurred to estimated total contract costs for each contract. Accounting for non-lease revenues requires judgment in determining the point in time the customer gains control of the equipment and the appropriate accounting period to recognize revenue. Sales taxes charged to customers are reported on a net basis and are excluded from revenues and expenses. 12 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 nine months ended September 30, 2025 and 2024: (in thousands) Mobile Modular Portable Storage TRS- RenTelco Enviroplex Consolidated Three Months Ended September 30, 2025 Leasing $ 112,056 $ 17,725 $ 29,098 $ — $ 158,879 Non-lease: Rental related services 17,072 3,939 743 — 21,754 Sales 52,336 2,693 6,730 13,684 75,443 Other 4 45 318 — 367 Total non-lease 69,412 6,677 7,791 13,684 97,564 Total revenues $ 181,468 $ 24,402 $ 36,889 $ 13,684 $ 256,443 2024 Leasing $ 109,249 $ 17,486 $ 26,524 $ — $ 153,259 Non-lease: Rental related services 16,131 4,127 755 — 21,013 Sales 65,994 1,411 7,169 17,499 92,073 Other 33 27 353 — 413 Total non-lease 82,158 5,565 8,277 17,499 113,499 Total revenues $ 191,407 $ 23,051 $ 34,801 $ 17,499 $ 266,758 Nine Months Ended September 30, 2025 Leasing $ 324,791 $ 51,700 $ 84,499 $ — $ 460,990 Non-lease: Rental related services 29,199 11,451 2,217 — 42,867 Sales 115,310 5,649 20,597 40,763 182,319 Other 74 214 1,011 — 1,299 Total non-lease 144,583 17,314 23,825 40,763 226,485 Total revenues $ 469,374 $ 69,014 $ 108,324 $ 40,763 $ 687,475 2024 Leasing $ 306,003 $ 54,881 $ 79,180 $ — $ 440,064 Non-lease: Rental related services 27,130 12,865 2,087 — 42,082 Sales 127,250 3,889 18,926 30,591 180,656 Other 3,153 200 1,041 — 4,394 Total non-lease 157,533 16,954 22,054 30,591 227,132 Total revenues $ 463,536 $ 71,835 $ 101,234 $ 30,591 $ 667,196 Customer returns of rental equipment prior to the end of the rental contract term are typically billed a cancellation fee, which is recorded as rental revenue in the period billed. Sales of new relocatable modular buildings, portable storage containers and electronic test equipment not manufactured by the Company are typically covered by warranties provided by the manufacturer of the products sold. The Company typically provides limited 90 -day warranties for certain sales of used rental equipment and one-year warranties on equipment manufactured by Enviroplex. Although the Company’s policy is to provide reserves for warranties when required for specific circumstances, warranty costs have not been significant to date. The Company’s incremental cost of obtaining lease contracts, which consists of salesperson commissions, are deferred and amortized over the initial lease term for modular and portable storage leases. Incremental costs for obtaining a contract for TRS-RenTelco are expensed in the period incurred because the lease term is typically less than 12 months. Other Income, net Other income, net consists of the net gain on sales of property, plant and equipment. 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 13 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. 14 NOTE 5. EARNINGS PER SHARE Basic earnings per share (“EPS”) is computed as net income divided by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS is computed assuming conversion of all potentially dilutive securities including the dilutive effect of stock options, unvested restricted stock awards and other potentially dilutive securities. The table below presents the weighted-average number of shares of common stock used to calculate basic and diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Weighted-average number of shares of common stock for calculating basic earnings per share 24,612 24,551 24,598 24,538 Effect of potentially dilutive securities from equity-based compensation 32 16 30 26 Weighted-average number of shares of common stock for calculating diluted earnings per share 24,644 24,567 24,628 24,564 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"). 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. All shares repurchased by the Company are canceled and returned to the status of authorized but unissued shares of common stock. 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 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. NOTE 6. INVENTORIES Inventories consist of raw materials, supplies and work-in-process. Inventories are measured at the lower of actual cost or net realizable value for acquired units and estimated standard costs for manufactured units. The costs include expenditures incurred in acquiring the inventories, manufacturing, production costs, and other costs incurred in bringing them to their existing location and condition. The following table presents the carrying value of inventories: (dollar amounts in thousands) September 30, December 31, 2025 2024 Raw materials $ 3,819 $ 3,380 Work-in-process 9,603 10,924 Inventories $ 13,422 $ 14,304 15 NOTE 7. GOODWILL AND INTANGIBLE ASSETS Intangible assets consist of the following: (dollar amounts in thousands) Estimated useful life in years Average remaining life in years Cost Accumulated amortization Net book value September 30, 2025 Customer relationships 6 to 11 6.3 $ 75,734 $( 31,156 ) $ 44,578 Non-compete agreements 5 2.3 10,806 ( 6,818 ) 3,988 Trade name 0.75 to 8 3.5 2,000 ( 1,475 ) 525 Total amortizing 88,540 ( 39,449 ) 49,091 Trade name - non-amortizing Indefinite 171 — 171 Total $ 88,711 $( 39,449 ) $ 49,262 December 31, 2024 Customer relationships 8 to 11 6.9 $ 73,217 $( 25,010 ) $ 48,207 Non-compete agreements 5 2.8 10,556 ( 5,239 ) 5,317 Trade name 0.75 to 8 4.3 2,000 ( 1,363 ) 637 Total amortizing 85,773 ( 31,612 ) 54,161 Trade name - non-amortizing Indefinite 171 — 171 Total $ 85,944 $( 31,612 ) $ 54,332 The Company assesses potential impairment of its goodwill and intangible assets when there is evidence that events or circumstances have occurred that would indicate the recovery of an asset’s carrying value is unlikely. The Company also assesses potential impairment of its goodwill and intangible assets with indefinite lives on an annual basis regardless of whether there is evidence of impairment. If indicators of impairment were to be present in intangible assets used in operations and future discounted cash flows were not expected to be sufficient to recover the asset’s carrying amount, an impairment loss would be charged to expense in the period identified. The amount of an impairment loss that would be recognized is the excess of the asset’s carrying value over its fair value. Factors the Company considers important, which may cause impairment include, among others, significant changes in the manner of use of the acquired asset, negative industry or economic trends, and significant underperformance relative to historical or projected operating results. 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 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. The Company bases its fair value estimates on assumptions that it believes are reasonable but are uncertain and subject to changes in market conditions. Intangible assets with finite useful lives are amortized over their respective useful lives. 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. 16 NOTE 8. SEGMENT REPORTING FASB guidelines establish annual and interim reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. In accordance with these guidelines, the Company’s four reportable segments are Mobile Modular, Portable Storage, TRS-RenTelco and Enviroplex. The Company's Chief Operating Decision Maker ("CODM") Joe Hanna, Chief Executive Officer, and senior management focus on several key measures to evaluate and assess each segment’s performance, including rental, rental related services and sales revenue growth, gross profit, income from operations and income before provision for income taxes. In addition to the evaluation of the aforementioned key measures of each reportable segment, the CODM and senior management evaluate supplemental information by reportable segment, such as rental equipment acquisitions, fleet utilization, and average utilization, to further assess segment performance and the future allocation of Company resources. The CODM is the primary individual in control of resource allocation, and the allocation determinations are made in consultation with the Company’s senior management team, of which the CODM is a member. The most significant allocation determinations made by the CODM pertain to purchases of rental equipment and employee headcount. 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, 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. Interest expense is allocated amongst Mobile Modular, Portable Storage and TRS-RenTelco based on their pro-rata share of average rental equipment at cost, goodwill, intangible assets, accounts receivable, deferred income and customer security deposits. The Company does not report total assets by business segment. 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: 17 (dollar amounts in thousands) Mobile Modular Portable Storage TRS- RenTelco Enviroplex 1 Consolidated Nine Months Ended September 30, 2025 Revenues Rental revenues $ 243,572 $ 50,307 $ 80,707 $ — $ 374,586 Rental related services revenues 106,191 12,212 2,618 — 121,021 Sales 115,308 5,649 23,039 40,763 184,759 Other 4,303 846 1,960 — 7,109 Total revenues 469,374 69,014 108,324 40,763 687,475 Costs of Revenues Depreciation of rental equipment 32,105 3,125 29,569 — 64,799 Rental related services 69,999 12,976 2,237 — 85,212 Other 69,001 5,636 16,842 — 91,479 Costs of sales 76,483 3,509 11,574 28,012 119,578 Total costs of revenues 247,588 25,246 60,222 28,012 361,068 Gross profit 221,786 43,768 48,102 12,751 326,407 Significant Segment Expenses 3 Wages and benefits 44,021 10,772 8,799 3,813 67,405 Depreciation and amortization 10,739 1,252 44 312 12,347 Marketing and administrative expenses 13,803 5,080 4,056 1,787 24,726 Allocated corporate services 4 36,786 5,472 8,820 — 51,078 Other segment items 5 805 438 152 — 1,395 Total expenses 106,154 23,014 21,871 5,913 156,952 Income from operations 115,632 20,754 26,231 6,838 169,455 Interest expense (income) allocation 19,509 2,847 3,660 ( 1,886 ) 24,130 Foreign currency exchange gain — — ( 54 ) — ( 54 ) Income before provision for income taxes 96,123 17,907 22,625 8,724 145,379 Provision for income taxes 25,827 4,815 5,999 2,259 38,900 Net income $ 70,296 $ 13,092 $ 16,626 $ 6,465 $ 106,479 Reconciliation of Segment Profit Total segment gross profit $ 326,407 Segment operating expenses, net 156,952 Interest expense allocation 24,130 Foreign currency exchange gain ( 54 ) Income before provision for income taxes 145,379 Provision for income taxes 38,900 Net income $ 106,479 Other Selected Information Rental equipment acquisitions $ 60,654 $ 1,338 $ 32,590 $ — $ 94,582 Accounts receivable, net (period end) $ 187,777 $ 11,125 $ 25,039 $ 17,405 $ 241,346 Rental equipment, at cost (period end) $ 1,456,049 $ 243,386 $ 338,397 $ — $ 2,037,832 Rental equipment, net book value (period end) $ 1,077,335 $ 218,256 $ 104,378 $ — $ 1,399,969 Utilization (period end) 2 71.9 % 62.1 % 64.1 % Average utilization 2 73.6 % 60.8 % 63.5 % 18 (dollar amounts in thousands) Mobile Modular Portable Storage TRS- RenTelco Enviroplex 1 Consolidated Nine Months Ended September 30, 2024 Revenues Rental revenues $ 236,040 $ 53,270 $ 76,398 $ — $ 365,708 Rental related services revenues 95,450 13,768 2,422 — 111,640 Sales 127,251 3,889 20,261 30,591 181,992 Other 4,795 907 2,153 — 7,855 Total revenues 463,536 71,835 101,234 30,591 667,195 Costs of Revenues Depreciation of rental equipment 29,994 2,971 33,547 — 66,512 Rental related services 62,974 13,212 2,029 — 78,215 Other 64,487 4,322 15,373 — 84,182 Costs of sales 83,180 2,390 9,346 22,709 117,625 Total costs of revenues 240,635 22,895 60,295 22,709 346,534 Gross profit 222,901 48,939 40,939 7,882 320,661 Significant Segment Expenses 3 Wages and benefits 42,759 10,393 7,862 3,429 64,443 Depreciation and amortization 10,165 1,104 80 285 11,634 Marketing and administrative expenses 13,056 4,609 4,205 1,655 23,525 Allocated corporate services 4 34,262 5,483 8,079 — 47,824 Other segment items 5 640 475 224 — 1,339 Total expenses 100,882 22,064 20,450 5,368 148,764 Other income, net ( 6,220 ) ( 1,319 ) ( 1,742 ) — ( 9,281 ) Income from operations 128,239 28,194 22,231 2,514 181,178 Interest expense (income) allocation 29,951 4,255 6,070 ( 1,893 ) 38,383 Foreign currency exchange gain — — ( 53 ) — ( 53 ) Income before provision for income taxes 98,288 23,939 16,214 4,407 142,848 Provision for income taxes 25,850 6,296 4,264 1,159 37,569 Net income $ 72,438 $ 17,643 $ 11,950 $ 3,248 $ 105,279 Reconciliation of Segment Profit Total segment gross profit $ 320,661 Segment operating expenses, net 148,764 Other income, net ( 9,281 ) Interest expense allocation 38,383 Foreign currency exchange loss ( 53 ) Gain on merger termination from WillScot Mobile Mini 6 ( 180,000 ) WillScot Mobile Mini transaction costs 6 61,157 Income before provision for income taxes 261,691 Provision for income taxes 68,913 Net income $ 192,778 Other Selected Information Rental equipment acquisitions $ 129,837 $ 7,818 $ 16,295 $ — $ 153,950 Accounts receivable, net (period end) $ 182,617 $ 10,481 $ 19,642 $ 11,789 $ 224,529 Rental equipment, at cost (period end) $ 1,398,475 $ 241,620 $ 356,979 $ — $ 1,997,074 Rental equipment, net book value (period end) $ 1,051,703 $ 220,139 $ 119,840 $ — $ 1,391,682 Utilization (period end) 2 76.5 % 62.0 % 59.0 % Average utilization 2 78.0 % 66.1 % 56.8 % 1. 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. 2. 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. The average utilization for the period is calculated using the average costs of rental equipment. 3. The Significant Segment Expense categories and amounts align with the segment-level information that is regularly provided to the CODM. 4. Allocated corporate services costs are comprised of expenses incurred by the Company which are not directly incurred by each business segment as a part of their normal operations. These allocated indirect corporate costs primarily include wages and benefits, depreciation of corporate capital assets, information technology, legal, accounting and other administrative expenses. 5. Other segment items for each reportable segment is primarily comprised of credit losses. 19 6. 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. 20