What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-19 · 154 added, 135 removed, 559 unchanged (34% of the section changed)

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

In 2024, Mobile Modular, Portable Storage, TRS-RenTelco and Enviroplex contributed 68%, 16%, 12% and 4%, respectively, of the Company’s income from continuing operations before provision for taxes (the equivalent of “pre-tax income”), compared to 62%, 22%, 16% and less than 1%, respectively, for 2023.

In 2025, Mobile Modular, Portable Storage, TRS-RenTelco and Enviroplex contributed 66%, 12%, 16% and 6%, respectively, of the Company’s income from continuing operations before provision for taxes (the equivalent of “pre-tax income”), compared to 69%, 16%, 12% and 3%, respectively, for 2024.

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

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Income from continuing operations

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Twelve Months Ended December 31, 2025 Compared to

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Consolidated revenues in 2025 increased 4% to $944.2 million, from $910.9 million in 2024.

Consolidated net income in 2024 increased to $231.7 million, or $9.43 per diluted share in 2024, compared to $174.6 million, or $7.12 per diluted share, in 2023.

The increase in consolidated net income and earnings per diluted share during the year was primarily attributed to the $180.0 million gain on merger termination, partly offset by $63.2 million in transaction costs attributed to the terminated merger with Willscot Mobile Mini, net of provision for income taxes.

Consolidated net income for the year ended December 31, 2023, included the $61.5 million gain on sale of discontinued operations from the divestiture of Adler Tanks, net of tax.

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 $33.9 million, or 30%, to $145.7 million, and diluted earnings per share increased $1.37, or 30%, to $5.93, compared to $4.56 in 2023.

The Company’s year over year total revenue increase was primarily due to higher sales, rental, and rental related services revenues, as more fully described below.

There was no revenue, income or earnings per share from discontinued operations during the year ended December 31, 2024.

Revenues from discontinued operations for the year ended December 31, 2023, was $9.4 million and income from discontinued operations was $62.8 million, which included the net gain on sale of discontinued operations of $61.5 million.

Earnings per diluted share from discontinued operations for the year ended December 31, 2023 was $2.56.

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

Consolidated net income in 2025 decreased to $156.3 million, or $6.35 per diluted share in 2025, compared to $231.7 million, or $9.43 per diluted share, in 2024.

The decrease in consolidated net income and earnings per diluted share during the year was primarily attributed to the terminated Merger Agreement in 2024 which provided a $180.0 million gain on merger termination, partly offset by $63.2 million in transaction costs, net of provision for income taxes.

Excluding the gain and transaction costs attributed to the merger termination in the prior year, the Company's net income increased by approximately $10.9 million, or 7%, to $156.3 million, and diluted earnings per share increased $0.43, or 7%, to $6.35, compared to $5.92 in 2024.

The Company’s year over year total revenue increase was primarily due to higher rental operations and sales revenues, as more fully described below.

For 2025 compared to 2024, on a consolidated basis from continuing operations:

• Gross profit increased $19.6 million, or 4%, to $455.0 million.

Mobile Modular’s gross profit increased $45.6 million, or 18%, due to higher gross profit on rental, sales and rental related services revenues.

Portable Storage's gross profit decreased $5.0 million, or 7%, due to lower gross profit on rental and rental related services revenues.

TRS-RenTelco’s gross profit decreased $6.5 million, or 10%, primarily due to lower gross profit on rental and other revenues.

Mobile Modular’s gross profit increased $6.0 million, or 2%, primarily due to higher gross profit on rental operations revenues.

Portable Storage's gross profit decreased $5.2 million, or 8%, due to lower gross profit on rental operations revenues, partly offset by an increase in gross profit on sales revenues.

TRS-RenTelco’s gross profit increased $12.2 million, or 22%, primarily due to higher gross profit on both rental operations and sales revenues.

Enviroplex’s gross profit increased $6.6 million, primarily due to $11.6 million higher sales revenues and increased gross margin on sales revenues of 32.4%, compared to 26.1% in 2024.

• Selling and administrative expenses decreased $7.1 million, or 3%, to $200.4 million, primarily due to $15.9 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 $7.8 million in 2024.

During the year ended December 31, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated merger were significant and required separate presentation on the 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 year ended December 31, 2024.

• Other income, net increased $5.7 million due to the sale of a property in 2024, resulting in a net gain of $9.3 million, compared to the gain on sale of four properties in 2023.

• Interest expense increased $6.7 million, due to 10% higher average debt levels of the Company, accompanied by 6% higher net average interest rates of 6.48% in 2024 compared to 6.12% in 2023.

• Selling and administrative expenses increased $10.9 million, or 5%, to $211.4 million, primarily due to $5.1 million higher employee salaries and benefit costs and a $5.0 million increase in marketing and administrative expenses in 2025.

During the year ended December 31, 2024, the Company incurred $63.2 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 year ended December 31, 2025, are reported separately on the Company’s consolidated statements of income.

• Other income, net was $9.3 million during the year ended December 31, 2024, a result of the sale of a corporate property.

These types of transactions are infrequent in nature and did not recur for the year ended December 31, 2025.

• Interest expense decreased $16.6 million, due to 23% lower average debt levels of the Company, accompanied by 15% lower net average interest rates of 5.48% in 2025 compared to 6.48% in 2024.

• Pre-tax income contribution by Mobile Modular, Portable Storage and TRS-RenTelco was 66%, 12% and 16%, respectively, compared to 69%, 16% and 12%, respectively, in 2024.

These results are discussed on a segment basis below.

Pre-tax income contribution by Enviroplex was 3% for 2024 and less than 1% for 2023.

Pre-tax income contribution by Enviroplex was 6% for 2025, compared to 3% in 2024.

• The provision for income taxes resulted in an effective tax rate of 26.6% and 26.1% for the years ended December 31, 2025 and 2024, respectively.

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Mobile Modular

For 2024, Mobile Modular’s total revenues increased $73.1 million, or 13%, to $635.4 million compared to 2023, primarily due to higher rental, sales and rental related services revenues.

Higher gross profit on rental, sales and rental related services revenues, and $1.9 million lower selling and administrative expenses, resulted in an increase in pre-tax income of $44.0 million, or 48%, to $136.0 million in 2024.

For 2025, Mobile Modular’s total revenues increased $9.8 million, or 2%, to $645.1 million compared to 2024, primarily due to higher rental operations revenues, partly offset by lower sales and other revenues.

Higher gross profit on rental operations revenues and lower allocated interest expense, partly offset by lower gross profit on sales and other revenues, and higher selling and administrative expenses, resulted in an increase in pre-tax income of $5.7 million, or 4%, to $141.7 million in 2025.

Included within pre-tax income for the year ended December 31, 2024, was Other income, net of $6.2 million comprised of an allocated net gain on sale of a corporate property.

Excluding Other income, net, the total change in pre-tax income for 2025 was an increase of $11.9 million, or 9%.

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

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• Gross Profit on Rental Revenues – Rental revenues increased $8.8 million, or 3%, due to 2% higher average rental equipment on rent and 1% higher average monthly rental rates in 2025.

As a percentage of rental revenues, depreciation was 13% in both 2024 and 2023, respectively, and other direct costs were 26% in 2024 and 30% in 2023, which resulted in gross margin percentage of 61% in 2024, compared to 57% in 2023.

The higher rental revenues and increased rental margins resulted in gross profit on rental revenues increasing $33.1 million, or 20%, to $194.7 million in 2024.

As a percentage of rental revenues, depreciation was 13% in both 2025 and 2024, and other direct costs were 27% in 2025 and 26% in 2024, which resulted in gross margin percentage of 60% in 2025, compared to 61% in 2024.

The higher rental revenues and lower rental margins resulted in gross profit on rental revenues increasing $0.9 million to $195.6 million in 2025.

• Gross Profit on Rental Related Services – Rental related services revenues increased $14.1 million, or 11%, compared to 2024.

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 rental related services revenues was primarily attributable to higher site related services and repair revenues.

The higher revenues accompanied by higher gross margin percentage of 36% in 2025, compared to 35% in 2024, resulted in rental related services gross profit increasing $6.4 million, or 14%, to $50.4 million in 2025.

• Gross Profit on Sales – Sales revenues increased $28.0 million, or 18%, primarily due to higher new equipment sales of $143.3 million compared to $116.2 million in 2023.

The higher sales revenues and comparable gross margin of 32% in 2024, resulted in sales gross profit increasing $8.1 million, or 16%, to $58.3 million in 2024.

• Gross Profit on Sales – Sales revenues decreased $12.6 million, or 7%, primarily due to lower new equipment sales of $121.1 million compared to $143.3 million in 2024, partly offset by higher used equipment sales of $49.6 million compared to $39.9 million in 2024.

The lower total sales revenues and higher gross margin of 34% in 2025, compared to 32% in 2024, resulted in sales gross profit decreasing $0.7 million, or 1%, to $57.6 million in 2025.

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

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

For 2024, Mobile Modular’s selling and administrative expenses decreased $1.9 million, or 1%, to $136.7 million, when compared to 2023.

For 2025, Mobile Modular’s selling and administrative expenses increased $6.1 million, or 4%, to $142.8 million, when compared to 2024.

The increase in selling and administrative expenses during the year was primarily attributed to $3.1 million higher allocated corporate expenses, $1.1 million higher marketing and administrative costs and an increase in employees' salaries and benefit costs of $1.0 million.

Portable Storage

For 2024, Portable Storage’s total revenues decreased $6.6 million, or 7%, to $94.5 million compared to 2023, primarily due to lower rental and rental related services revenues, partly offset by $1.1 million higher sales revenues.

Lower gross profit on rental and rental related services revenues, partly offset by $0.4 million higher gross profit on sales revenues and a $2.3 million reduction in selling and administrative expenses, resulted in a decrease in pre-tax income of $2.1 million, or 6%, to $30.8 million in 2024.

For 2025, Portable Storage’s total revenues decreased $1.7 million, or 2%, to $92.8 million compared to 2024, primarily due to lower rental operations revenues, partly offset by $2.1 million higher sales revenues.

Lower gross profit on rental operations revenues, coupled with $1.4 million higher selling and administrative costs, partly offset by $1.6 million lower allocated interest expense and $0.8 million higher gross profit on sales revenues, resulted in a decrease in pre-tax income of $6.3 million, or 20%, to $24.5 million in 2025.

Included within pre-tax income for the year ended December 31, 2024, was Other income, net of $1.3 million comprised of an allocated net gain on sale of a corporate property.

Excluding Other income, net, the total change in pre-tax income for 2025 was a decrease of $5.0 million, or 17%.

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

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Total costs of revenues

Gross Profit (Loss)

Rental related services

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For the year ended December 31, 2025 compared to the year ended December 31, 2024:

• Gross Profit on Rental Revenues – Rental revenues decreased $4.6 million, or 6%, due to 7% lower average rental equipment on rent, partly offset by 1% 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% in 2024, compared to 85% in 2023.

The lower rental revenues and higher rental margins resulted in gross profit on rental revenues decreasing $3.5 million, or 6%, to $60.2 million in 2024.

• Gross Profit on Rental Revenues – Rental revenues decreased $2.4 million, or 3%, due to 3% lower average rental equipment on rent and 1% lower average monthly rental rates in 2025.

As a percentage of rental revenues, depreciation was 6% in both 2025 and 2024, and other direct costs were 11% and 8% in 2025 and 2024, respectively, which resulted in gross margin percentage of 83% in 2025, compared to 86% in 2024.

The lower rental revenues and lower rental margins resulted in gross profit on rental revenues decreasing $4.1 million, or 7%, to $56.0 million in 2025.

• Gross Profit on Rental Related Services – Rental related services revenues decreased $1.2 million, or 7%, compared to 2024.

The decrease in rental related services revenues was primarily attributable to a reduction in delivery and return delivery revenues.

The lower revenues coupled with lower gross margin percentage of 2% in 2024, compared to 9% in 2023, resulted in rental related services gross profit decreasing $1.5 million to $0.4 million, in 2024.

The decrease in rental related services revenues was primarily attributable to a reduction in return delivery revenues.

The lower revenues coupled with a negative gross margin percentage of 8% in 2025, compared to a gross margin percentage of 2% in 2024, resulted in rental related services gross profit decreasing $1.7 million to a loss of $1.3 million, in 2025.

• Gross Profit on Sales – Sales revenues increased $2.1 million, or 37%, primarily due to higher used equipment sales.

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

For 2024, Portable Storage’s selling and administrative expenses decreased $2.3 million, or 7%, to $29.2 million, compared to $31.5 million in 2023.

The reduction in selling and administrative expenses was primarily the result of $2.5 million lower allocated corporate services, which in 2023 included transaction costs of $1.3 million, attributed to the divestiture of Adler Tanks.

For 2024, TRS-RenTelco’s total revenues decreased $13.0 million, or 9%, to $135.2 million, compared to 2023, primarily due to lower rental and other revenues, partly offset by higher sales revenues.

Pre-tax income decreased $1.5 million, or 6%, to $23.2 million for 2024, primarily due to lower gross profit on rental and other revenues, partly offset by $1.9 million higher gross profit on sales revenues and a $4.0 million reduction in selling and administrative expenses.

For 2025, Portable Storage’s selling and administrative expenses increased $1.4 million, or 5%, to $30.6 million, compared to $29.2 million in 2024.

The increase in selling and administrative expenses was primarily the result of $0.7 million higher marketing and administrative expenses and an increase in employees' salaries and benefit costs of $0.4 million.

For 2025, TRS-RenTelco’s total revenues increased $13.6 million, or 10%, to $148.9 million, compared to 2024, primarily due to higher rental operations and sales revenues.

Higher gross profit on rental and sales revenues, coupled with $2.8 million lower allocated interest expense, partly offset by $2.6 million higher selling and administrative expenses, resulted in an increase in pre-tax income of $11.0 million, or 47%, to $34.2 million for 2025.

Included within pre-tax income for the year ended December 31, 2024, was Other income, net of $1.7 million comprised of an allocated net gain on sale of a corporate property.

Excluding Other income, net, the total change in pre-tax income for 2025 was an increase of $12.7 million, or 59%.

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

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Interest expense allocation

Foreign currency exchange loss (gain)

Foreign currency exchange (gain) loss

Pre-tax income

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TRS-RenTelco’s gross profit for 2024 decreased $6.5 million, or 10%, to $56.1 million.

TRS-RenTelco’s gross profit for 2025 increased $12.2 million, or 22%, to $68.2 million.

For the year ended December 31, 2025 compared to the year ended December 31, 2024:

• Gross Profit on Rental Revenues – Rental revenues decreased $12.5 million, or 11%, to $101.8 million, with depreciation expense decreasing $4.6 million, or 9%, and other direct costs decreasing $0.4 million, or 2%, resulting in a decrease in gross profit on rental revenues of $7.5 million, or 17%, in 2024 compared to 2023.

• Gross Profit on Rental Revenues – Rental revenues increased $7.6 million, or 7%, to $109.4 million, with depreciation expense decreasing $4.4 million, or 10%, and other direct costs increasing $2.5 million, or 13%, resulting in an increase in gross profit on rental revenues of $9.4 million, or 25%, in 2025 compared to 2024.

As a percentage of rental revenues, depreciation was 36% and 43% in 2025 and 2024, respectively, and other direct costs were 21% and 20% in 2025 and 2024, respectively, which resulted in gross margin percentage of 43% in 2025, compared to 37% in 2024.

The reduction in rental revenues was primarily attributed to 9% lower average rental equipment on rent and 2% lower average monthly rental rates.

The increase in rental revenues was primarily attributed to 3% higher average rental equipment on rent and 5% higher average monthly rental rates.

• Gross Profit on Sales – Sales revenues increased $5.8 million, or 21%, to $33.3 million in 2025.

Gross profit on sales increased $3.0 million, or 20%, to $18.1 million, with a gross margin percentage of 54% in 2025, compared to 55% in 2024.

The higher gross margin during the year was primarily attributed to an increase in margin on used equipment sales.

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

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

For 2024, TRS-RenTelco’s selling and administrative expenses decreased $4.0 million, or 13%, to $27.0 million, when compared to 2023.

The reduction in selling and administrative expenses was primarily the result of $4.0 million lower allocated corporate services, which included transaction costs of $1.6 million in 2023 attributed to the divestiture of Adler Tanks.

For 2025, TRS-RenTelco’s selling and administrative expenses increased $2.6 million, or 9%, to $29.6 million, when compared to 2024.

The increase in selling and administrative expenses was primarily the result of $1.5 million higher employees' salaries and benefit costs and $1.3 million higher allocated corporate expenses.

Twelve Months Ended December 31, 2024 Compared to

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Consolidated revenues in 2024 increased 8% to $910.9 million, from $841.3 million in 2023.

Consolidated net income in 2023, excluding the gain on sale of discontinued operations from the divestiture of Adler Tanks, decreased to $113.1 million, or $4.61 per diluted share in 2023, compared to $115.1 million, or $4.70 per diluted share, in 2022.

The Company’s year over year total revenue increase was primarily due to higher rental, sales and rental related services revenues, as more fully described below.

Revenues from discontinued operations for the year ended December 31, 2023, was $9.4 million, compared to $98.2 million for the same period in 2022.

Income from discontinued operations for the year ended December 31, 2023, was $62.8 million, which included the net gain on sale of discontinued operations of $61.5 million, compared to $11.8 million for the same period in 2022.

Earnings per diluted share from discontinued operations for the year ended December 31, 2023 was $2.56, compared to $0.48 for the same period in 2022.

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

Consolidated net income in 2024 increased to $231.7 million, or $9.43 per diluted share in 2024, compared to $174.6 million, or $7.12 per diluted share, in 2023.

Consolidated net income for the year ended December 31, 2023, included the $61.5 million gain on sale of discontinued operations from the divestiture of Adler Tanks, net of tax.

Excluding the gain and transaction costs attributed to the merger termination in 2024, and the gain on sale of discontinued operations in 2023, the Company's net income increased by approximately $33.9 million, or 30%, to $145.7 million, and diluted earnings per share increased $1.37, or 30%, to $5.93, compared to $4.56 in 2023.

The Company’s year over year total revenue increase was primarily due to higher sales, rental, and rental related services revenues, as more fully described below.

There was no revenue, income or earnings per share from discontinued operations during the year ended December 31, 2024.

Earnings per diluted share from discontinued operations for the year ended December 31, 2023 was $2.56.

Additional information regarding discontinued operations and the divestiture of Adler Tanks is included in the Note 5 to the Consolidated Financial Statements.

For 2024 compared to 2023, on a consolidated basis from continuing operations:

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Mobile Modular’s gross profit increased $45.6 million, or 18%, due to higher gross profit on rental, sales and rental related services revenues.

Portable Storage's gross profit increased $13.6 million, or 25%, due to higher gross profit on rental and rental related services revenues.

TRS-RenTelco’s gross profit decreased $5.3 million, or 8%, primarily due to lower gross profit on rental and sales revenues.

Enviroplex’s gross profit decreased $0.9 million, or 17%, primarily due to $3.0 million lower sales revenues and lower gross margins of 20.9%, compared to 22.1% in 2022.

• Selling and administrative expenses increased $64.6 million, or 45%, to $207.5 million, primarily due to increased headcount and employees’ salaries and benefit costs totaling $29.0 million, partly attributed to increased employee headcount from the Vesta Modular acquisition, and $21.4 million higher marketing and administrative costs, which included $15.9 million in acquisition and divestiture related transaction costs.

• During the year ended December 31, 2023, the Company sold four properties, which resulted in a net gain on sale of $3.6 million.

The gain on sale, which was presented in Other income on the Consolidated Statements of Income, contributed $0.11 in earnings per diluted share.

Portable Storage's gross profit decreased $5.0 million, or 7%, due to lower gross profit on rental and rental related services revenues.

TRS-RenTelco’s gross profit decreased $6.5 million, or 10%, primarily due to lower gross profit on rental and other revenues.

Enviroplex’s gross profit increased $7.7 million, primarily due to $25.6 million higher sales revenues and increased gross margin on sales revenues of 26.1%, compared to 20.9% in 2023.

• Other income, net increased $5.7 million due to the sale of a property in 2024, resulting in a net gain of $9.3 million, compared to the gain on sale of four properties in 2023.

• Interest expense increased $6.7 million, due to 10% higher average debt levels of the Company, accompanied by 6% higher net average interest rates of 6.48% in 2024 compared to 6.12% in 2023.

1 unchanged sentence

These results are discussed on a segment basis below.

Pre-tax income contribution by Enviroplex was less than 1% for 2023 and 1% for 2022.

• The provision for income taxes resulted in an effective tax rate of 25.5% and 23.3% for the twelve months ended December 31, 2023 and 2022, respectively.

The higher rate in 2023 was primarily due to changes in state business activity levels and nondeductible expenses.

Pre-tax income contribution by Enviroplex was 3% for 2024 and less than 1% for 2023.

• The provision for income taxes resulted in an effective tax rate of 26.1% and 25.5% for the years ended December 31, 2024 and 2023, respectively.

• Adjusted EBITDA increased $33.4 million, or 10%, to $351.7 million in 2024.

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For 2024, Mobile Modular’s total revenues increased $73.1 million, or 13%, to $635.4 million compared to 2023, primarily due to higher rental, sales and rental related services revenues.

Higher gross profit on rental, sales and rental related services revenues, partly offset by $52.8 million higher selling and administrative expenses, resulted in an increase in pre-tax income of $24.5 million, or 36%, to $92.0 million in 2023.

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

17 unchanged sentences

Selling and administrative expenses

Other income, net

Income from operations

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• Gross Profit on Rental Revenues – Rental revenues increased $32.6 million, or 11%, due to 9% higher average rental equipment on rent and 3% higher average monthly rental rates in 2024.

As a percentage of rental revenues, depreciation was 13% and 14% in 2023 and 2022, respectively, and other direct costs were 30% in 2023 and 37% in 2022, which resulted in gross margin percentage of 57% in 2023, compared to 49% in 2022.

The higher rental revenues and increased rental margins resulted in gross profit on rental revenues increasing $33.1 million, or 20%, to $194.7 million in 2024.

• Gross Profit on Rental Related Services – Rental related services revenues increased $13.1 million, or 11%, compared to 2023.

Most of these service revenues are negotiated with the initial lease and are recognized on a straight-line basis with the associated costs over the initial term of the lease.

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

The higher revenues accompanied by higher gross margin percentage of 35% in 2024, compared to 34% in 2023, resulted in rental related services gross profit increasing $4.9 million, or 13%, to $44.0 million in 2024.

• Gross Profit on Sales – Sales revenues increased $58.2 million, or 60%, primarily due to higher new equipment sales.

The higher sales revenues and lower gross margins of 32% in 2023, compared to 36% in 2022, resulted in sales gross profit increasing $15.4 million, or 44%, to $50.2 million in 2023.

• Gross Profit on Sales – Sales revenues increased $28.0 million, or 18%, primarily due to higher new equipment sales of $143.3 million compared to $116.2 million in 2023.

The higher sales revenues and comparable gross margin of 32% in 2024, resulted in sales gross profit increasing $8.1 million, or 16%, to $58.3 million in 2024.

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

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

For 2023, Mobile Modular’s selling and administrative expenses increased $52.8 million, or 62%, to $138.6 million, primarily due to increased employee salaries and benefit costs totaling $21.6 million, partly attributed to increased employee headcount from the Vesta Modular acquisition, $14.1 million higher allocated corporate expenses, which included $5.3 million of transaction costs primarily attributed to the divestiture of Adler Tanks.

In addition, the Company had $10.7 million higher marketing and administrative costs compared to 2022, which included $7.7 million Vesta Modular transaction costs.

For 2024, Mobile Modular’s selling and administrative expenses decreased $1.9 million, or 1%, to $136.7 million, when compared to 2023.

Portable Storage

For 2023, Portable Storage’s total revenues increased $18.6 million, or 23%, to $101.1 million compared to 2022, primarily due to higher rental, rental related services and sales revenues.

Higher gross profit on rental, rental related services and sales revenues, partly offset by $7.1 million higher selling and administrative expenses, resulted in an increase in pre-tax income of $3.5 million, or 12%, to $32.9 million in 2023.

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

17 unchanged sentences

Selling and administrative expenses

Other income, net

Income from operations

16 unchanged sentences

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Portable Storage’s gross profit for 2023 increased $13.6 million, or 25%, to $68.9 million.

Portable Storage’s gross profit for 2024 decreased $5.0 million, or 7%, to $63.9 million.

For the year ended December 31, 2024 compared to the year ended December 31, 2023:

• Gross Profit on Rental Revenues – Rental revenues increased $12.3 million, or 20%, due to 11% higher average rental equipment on rent and 8% higher average monthly rental rates in 2023.

As a percentage of rental revenues, depreciation was 5% and 4% in 2023 and 2022, respectively, and other direct costs were 10% in both 2023 and 2022, which resulted in gross margin percentage of 85% in 2023 compared to 86% in 2022.

The higher rental revenues and lower rental margins resulted in gross profit on rental revenues increasing $10.5 million, or 20%, to $63.7 million in 2023.

• Gross Profit on Rental Related Services – Rental related services revenues increased $3.4 million, or 20%, compared to 2022.

The increase in rental related services revenues was primarily attributable to increased delivery and return delivery revenues.

The higher revenues coupled with higher gross margin percentage of 9% in 2023, compared to 4% in 2022, resulted in rental related services gross profit increasing $1.2 million to $1.9 million in 2023.

The lower rental revenues and higher rental margins resulted in gross profit on rental revenues decreasing $3.5 million, or 6%, to $60.2 million in 2024.

• Gross Profit on Rental Related Services – Rental related services revenues decreased $2.8 million, or 14%, compared to 2023.

The decrease in rental related services revenues was primarily attributable to a reduction in delivery and return delivery revenues.

The lower revenues coupled with lower gross margin percentage of 2% in 2024, compared to 9% in 2023, resulted in rental related services gross profit decreasing $1.5 million to $0.4 million, in 2024.

• Gross Profit on Sales – Sales revenues increased $1.1 million, or 24%, primarily due to higher used equipment sales.

The higher sales revenues and higher gross margins of 38% in 2023, compared to 37% in 2022, resulted in sales gross profit increasing $0.6 million, or 60%, to $1.7 million in 2023.

The higher sales revenues and comparable gross margin of 38% in 2024, resulted in sales gross profit increasing $0.4 million, or 24%, to $2.1 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 2023, Portable Storage’s selling and administrative expenses increased $7.1 million, or 29%, to $31.5 million, primarily due to $3.2 million higher allocated corporate expenses, which included $1.3 million of allocated transaction costs from the divestiture of Adler Tanks, and increased employee salaries and benefit costs totaling $2.0 million, as compared to 2022.

For 2023, TRS-RenTelco’s total revenues decreased $2.5 million, or 2%, to $148.3 million compared to 2022, primarily due to lower rental revenues, partially offset by higher sales and other revenues.

Pre-tax income decreased $12.3 million, or 33%, to $24.6 million for 2023, primarily due to lower gross profit on rental and sales revenues, coupled with an increase in selling and administrative expenses.

For 2024, Portable Storage’s selling and administrative expenses decreased $2.3 million, or 7%, to $29.2 million, compared to $31.5 million in 2023.

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

17 unchanged sentences

Selling and administrative expenses

Other income, net

Income from operations

Interest expense allocation

Foreign currency exchange (gain) loss

Foreign currency exchange loss (gain)

Pre-tax income

17 unchanged sentences

As a percentage of rental revenues, depreciation was 42% and 41% in 2023 and 2022, respectively, and other direct costs were 18% in both 2023 and 2022, which resulted in gross margin percentage of 40% in 2023, compared to 42% in 2022.

The reduction in rental revenues was attributed to 7% lower average rental equipment on rent, partly offset by 1% higher average monthly rental rates.

As a percentage of rental revenues, depreciation was 43% and 42% in 2024 and 2023, respectively, and other direct costs were 20% and 18% in 2024 and 2023, respectively, which resulted in gross margin percentage of 37% in 2024, compared to 40% in 2023.

The reduction in rental revenues was primarily attributed to 9% lower average rental equipment on rent and 2% lower average monthly rental rates.

• Gross Profit on Sales – Sales revenues increased $0.4 million, or 2%, to $27.5 million in 2024.

Gross profit on sales decreased $1.6 million, or 11%, to $13.2 million, with a gross margin percentage of 49% in 2023, compared to 60% in 2022.

The reduction in gross margin during the year was primarily attributed to a decrease in margin on used equipment sales.

Gross profit on sales increased $1.9 million, or 14%, to $15.1 million, with a gross margin percentage of 55% in 2024, compared to 49% in 2023.

The higher gross margin during the year was primarily attributed to an increase in margin on used equipment sales.

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

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

For 2023, TRS-RenTelco’s selling and administrative expenses increased $3.7 million, or 14%, to $31.0 million, primarily due to $2.6 million higher allocated corporate expenses, which included $1.6 million of allocated transaction costs from the divestiture of Adler Tanks, as compared to 2022.

For 2024, TRS-RenTelco’s selling and administrative expenses decreased $4.0 million, or 13%, to $27.0 million, when compared to 2023.

Adjusted EBITDA

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

For the year ended December 31, 2024, total Adjusted EBITDA from continuing and discontinued operations was $351.7 million, compared to $322.0 million for the same period in 2023, excluding the gain on sale of the divestiture of Adler Tanks.

For the years ended December 31, 2024 and 2023, the total Adjusted EBITDA from continuing operations was $351.7 million and $318.4 million, respectively, and the total Adjusted EBITDA from discontinued operations in 2023 was $3.7 million.

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 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)

Year Ended December 31,

Adjusted EBITDA 1

Interest paid

Income taxes paid, net of refunds received

Gain on sale of used rental equipment

Foreign currency exchange (gain) loss

Amortization of debt issuance costs

Net cash provided by operating activities

Change in certain assets and liabilities:

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Deferred income

Net cash provided by operating activities

Amortization of debt issuance costs

Foreign currency exchange gain (loss)

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.

Adjusted EBITDA is a component of two restrictive financial covenants for the Company’s unsecured Credit Facility, the Note Purchase Agreement, Series D Senior Notes, Series E Senior Notes and Series F Senior Notes (as defined and more fully described under the heading “Item 7.

Total Adjusted EBITDA for the years ended December 31, 2023, 2022 and 2021, include Adjusted EBITDA from discontinued operations of $3.7 million, $37.7 million and $28.0 million, respectively, from the divestiture of Adler Tanks which occurred in 2023.

Adjusted EBITDA is a component of two restrictive financial covenants for the Company’s unsecured Credit Facility, the Note Purchase Agreement, Series D, E, F and G Senior Notes (as defined and more fully described under the heading “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources”).

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The Company’s operations provided net cash flows of $255.7 million for 2025, compared to $374.4 million in 2024.

The $279.0 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 contributed $86.0 million to net income during the year, and the $61.5 million gain on sale of discontinued operations of Adler Tanks included in operating activities during 2023.

Further, operating activities provided for an $61.6 million increase in accounts payable and a $43.9 million decrease in accounts receivable, as compared to 2023, which contributed to the net change in cash provided.

The $118.7 million decrease in net cash provided by operating activities was primarily attributed to the gain on merger termination from WillScot Mobile Mini after transaction costs, which contributed $86.0 million to net income during 2024.

Further, operating activities provided for a $20.4 million increase in accounts receivable as compared to 2024, a result of higher customer billings compared to related cash payments in 2025, and prepaid expenses and other assets increased $9.8 million, primarily attributed to the timing of cash payments made and expense recognition during the year.

Finally, there was a $12.2 million decrease in accounts payable as a result of the payment timing of rental equipment acquisitions and other trade accounts payable, which contributed to the year over year change.

Cash Flows from Investing Activities:

Net cash used in investing activities was $127.1 million for 2025, compared to $150.8 million in 2024.

The $241.1 million reduction in net cash used was primarily due to the $462.1 million paid for the business acquisitions of Vesta Modular, Brekke Storage, Dixie Storage and Inland Leasing in 2023, partly offset by $268.0 million in proceeds received from the sale of the Adler Tanks business.

The net effect of these transaction in 2023 was $194.1 million in cash used by investing activities.

The $23.6 million reduction in net cash used was primarily due to $48.7 million lower rental equipment purchases when compared to the previous year, due to higher equipment acquisitions in 2024 to meet customer rental demand.

The reduction in net cash used in investing activities was partly offset by a $23.8 million increase in cash paid for the acquisition of businesses in 2025.

Cash Flows from Financing Activities:

Net cash used in financing activities was $223.7 million in 2024, compared to net provided of $296.4 million in 2023.

The change in net cash during 2024 was primarily due to reduced borrowings under bank lines of credit and note purchase agreements.

The borrowings in 2023 were primarily attributed to the funding of the Vesta Modular, Brekke Storage, Dixie Storage and Inland Leasing acquisitions, and capital needs for the tax obligations arising from the divestiture of Adler Tanks.

Net cash used in financing activities was $129.1 million in 2025, compared to $223.7 million in 2024.

The $94.6 million change was primarily attributable to $95.1 million lower net payments under bank lines of credit in 2025, partially offset by $75.0 million in borrowings under issued Series G senior notes in 2025, which were used to pay the principal balance in full of the Company's $73.0 million term note entered into in 2024.

The reduction in total net payments under bank lines of credit when compared to the previous year was primarily due to lower cash flows from operations, including the net impact of the gain on merger termination from WillScot Mobile Mini after transaction costs, partly offset by the $48.7 million reduction in purchases of rental equipment when compared to the previous year.

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

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During the year ended December 31, 2024, the Company entered into a merger agreement with WillScot Mobile Mini, which was subsequently terminated, resulting in proceeds received of $116.8 million, net of transaction costs, which were primarily used to paydown outstanding borrowings on bank lines of credit.

Comparatively, in 2023 the Company sold its Adler Tanks business, generating a total of $202.7 million in net proceeds, which were primarily used to expand the Company's rental asset fleet through the purchase of Vesta Modular.

These types of transactions are considered nonrecurring to the Company and not a normal part of continuing operations.

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Although the net proceeds received from sales may fluctuate from period to period, the Company believes its liquidity will not be adversely impacted from lower sales in any given year because it believes it has the ability to increase its bank borrowings, offer additional notes and conserve its cash in the future by reducing the amount of cash it uses to purchase rental equipment, pay dividends, or repurchase the Company’s common stock.

As the following table indicates, cash flow provided by operating activities and proceeds from sales of used rental equipment have been greater than rental equipment purchases over the past three years.

Funding of Rental Asset Growth

Adjusted Free Cash Flow

The Company defines “Adjusted free cash flow” as cash provided by operating activities less payments for purchases of rental equipment and property, plant and equipment, and plus proceeds from sale of rental equipment and property, plant and equipment, which are included in cash flows from investing activities;

excluding nonrecurring taxes paid in cash on sale of discontinued operations and the contractual merger termination payment from WillScot Mobile Mini after deducting the Company’s transaction costs.

The Company believes that Adjusted free cash flow provides useful additional information regarding cash flow available to meet debt service obligations and other capital requirements.

However, Adjusted free cash flow is not a measure of performance or liquidity under GAAP and should not be considered in isolation or as a substitute for Net income, Net cash provided by operating activities, or other consolidated income or cash flow data prepared in accordance with GAAP.

The table below provides a reconciliation between Net cash provided by operating activities and Adjusted free cash flow.

Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow

(amounts in thousands)

Year Ended December 31,

Cash provided by operating activities

Net cash provided by operating activities

Proceeds from sales of used rental equipment

Proceeds from sale of discontinued operation, net of tax

Proceeds from Willscot Mobile Mini merger termination, net of transaction costs

Cash available for purchase of rental equipment

Proceeds from sales of property, plant and equipment

Purchases of rental equipment

Cash available for other purposes

Purchases of property, plant and equipment

Taxes paid on sale of discontinued operations

Proceeds from Willscot Mobile Mini merger termination, net of transaction costs

Adjusted free cash flow

In addition to increasing its rental assets, the Company has periodically made acquisitions of businesses and business assets.

During the year ended December 31, 2023, the Company transacted a total of $462.1 million in acquisition related costs.

There were no acquisition related transactions during the years ended December 31, 2024 and 2022, respectively.

The Company had other capital expenditures for property, plant and equipment of $40.2 million in 2024, $44.0 million in 2023 and $17.6 million in 2022, and has used cash to provide returns to its shareholders in the form of cash dividends.

During the years ended December 31, 2025 and 2023, the company transacted a total of $23.8 million and $462.1 million in acquisition related costs, respectively.

There were no acquisition related transactions during the year ended December 31, 2024.

The Company had other capital expenditures for property, plant and equipment of $44.4 million in 2025, $40.2 million in 2024 and $44.0 million in 2023, and has used cash each year to provide returns to its shareholders in the form of cash dividends.

The Company paid cash dividends of $47.9 million, $46.8 million and $45.6 million in the years ended December 31, 2025, 2024 and 2023, respectively.

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

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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 December 31, 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, 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.

The Credit Facility permits the Company’s existing indebtedness to remain, which includes the Company’s $20.0 million Treasury Sweep Note due July 15, 2027, the Company’s existing senior notes issued pursuant to the Note Purchase and Private Shelf Agreement with Prudential Investment Management, Inc., dated as of April 21, 2011 (as amended):

(i) the $60.0 million aggregate outstanding principal of notes issued November 5, 2015 and due November 5, 2022, (ii) the $40.0 million aggregate outstanding principal of notes issued March 17, 2021 and due March 17, 2028, and (iii) the $60.0 million aggregate outstanding principal of notes issued June 16, 2021 and due June 16, 2026.

The Credit Facility permits the Company’s existing indebtedness to remain, which includes the Company’s $20.0 million Treasury Sweep Note due July 15, 2027 and the Company’s existing senior notes issued pursuant to the Note Purchase and Private Shelf Agreement with Prudential Investment Management, Inc., dated as of April 21, 2011 (as amended, the "Prior NPA") comprised of (i) the $40.0 million aggregate outstanding principal of notes issued March 17, 2021 and due March 17, 2028, and (ii) the $60.0 million aggregate outstanding principal of notes issued June 16, 2021 and due June 16, 2026.

The Prior NPA was amended and restated, and superseded in its entirety, by the Note Purchase Agreement (as defined and more fully described below under the heading "Liquidity and Capital Resources - Note Purchase and Private Shelf Agreement" in this MD&A).

In addition, the Company may incur additional senior note indebtedness in an aggregate amount not to exceed $250.0 million.

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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 December 31, 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 $342.4 million was outstanding and had the capacity to borrow up to an additional

$307.6 million.

During the year ended December 31, 2025, the Company repaid the principal amount of the incremental term loan "A" facility in its entirety.

At December 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 $265.0 million was outstanding and had the capacity to borrow up to an additional $385.0 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 Amended Credit Facility):

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On June 8, 2023, the Company entered into a Second Amended and Restated Note Purchase and Private Shelf Agreement (the “Note Purchase Agreement”) with PGIM, Inc.

(“PGIM”) and the holders of Series D and Series E Notes previously issued pursuant to the Prior Amended and Restated Note Purchase Agreement, among the Company and the other parties to the Note Purchase Agreement.

(“PGIM”) and the holders of Series D and Series E Notes previously issued pursuant to the Prior NPA.

The Note Purchase Agreement amended and restated, and superseded in its entirety, the Prior NPA.

Pursuant to the Prior NPA, the Company issued (i) $40.0 million aggregate principal amount of its 2.57% Series D Senior Notes, due March 17, 2028, and (ii) $60.0 million aggregate principal amount of its 2.35% Series E Senior Notes, due June 16, 2026, to which the terms of the Note Purchase Agreement shall apply.

In addition, pursuant to the Note Purchase Agreement, the Company may authorize the issuance and sale of additional senior notes (the “Shelf Notes”) in the aggregate principal amount of (x) $300 million minus (y) the amount of other notes (such as the Series D Senior Notes, Series E Senior Notes and Series F Senior Notes, each defined below) then outstanding, to be dated the date of issuance thereof, to mature, in case of each Shelf Note so issued, no more than 15 years after the date of original issuance thereof, to have an average life, in the case of each Shelf Note so issued, of no more than 15 years after the date of original issuance thereof, to bear interest on the unpaid balance thereof from the date thereof at the rate per annum, and to have such other particular terms, as shall be set forth, in the case of each Shelf Note so issued, in accordance with the Note Purchase Agreement.

In addition, pursuant to the Note Purchase Agreement, the Company may authorize the issuance and sale of additional senior notes (the “Shelf Notes”) in the aggregate principal amount of (x) $300 million minus (y) the amount of other notes (such as the Series D Senior Notes, Series E Senior Notes, Series F Senior Notes and Series G Senior Notes, each defined below) then outstanding, to be dated the date of issuance thereof, to mature, in case of each Shelf Note so issued, no more than 15 years after the date of original issuance thereof, to have an average life, in the case of each Shelf Note so issued, of no more than 15 years after the date of original issuance thereof, to bear interest on the unpaid balance thereof from the date thereof at the rate per annum, and to have such other particular terms, as shall be set forth, in the case of each Shelf Note so issued, in accordance with the Note Purchase Agreement.

Shelf Notes may be issued and sold from time to time at the discretion of the Company’s Board of Directors and in such amounts as the Board of Directors may determine, subject to prospective purchasers’ agreement to purchase the Shelf Notes.

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5.30% Senior Notes Due in 2032

On September 27, 2023, the Company issued and sold to the purchasers $75.0 million aggregate principal amount of 6.25% Series F Notes (the “Series F Senior Notes”) pursuant to the terms of the Second Amended and Restated Note Purchase and Private Shelf Agreement, dated June 8, 2023 (the “Note Purchase Agreement”), among the Company, PGIM, Inc.

and the noteholders party thereto.

On September 8, 2025, the Company issued and sold to the purchasers $75.0 million aggregate principal amount of 5.30% Series G Notes (the “Series G Senior Notes”) pursuant to the terms of the Note Purchase Agreement.

The Series G Senior Notes are an unsecured obligation of the Company and bear interest at a rate of 5.30% per annum and mature on September 8, 2032.

Interest on the Series G Senior Notes is payable semi-annually beginning on March 8, 2026 and continuing thereafter on September 8 and March 8 of each year until maturity.

The principal balance is due when the notes mature on September 8, 2032.

The full net proceeds from the Series G Senior Notes were used to pay down the Company’s term loan "A" facility in its entirety.

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

6.25% Senior Notes Due in 2030

The Series F Senior Notes are an unsecured obligation of the Company and bear interest at a rate of 6.25% per annum and mature on September 27, 2030.

4 unchanged sentences

2.57% Senior Notes Due in 2028

On March 17, 2021, the Company issued and sold to the purchasers $40.0 million aggregate principal amount of 2.57% Series D Notes (the “Series D Senior Notes”) pursuant to the terms of the Amended and Restated Note Purchase and Private Shelf Agreement, dated March 31, 2020 (the “Note Purchase Agreement”), among the Company, PGIM, Inc.

and the noteholders party thereto.

The Series D Senior Notes are an unsecured obligation of the Company and bear interest at a rate of 2.57% per annum and mature on March 17, 2028.

4 unchanged sentences

2.35% Senior Notes Due in 2026

On June 16, 2021, the Company issued and sold to the purchasers $60.0 million aggregate principal amount of 2.35% Series E Notes (the "Series E Notes") pursuant to the terms of the Amended and Restated Note Purchase and Private Shelf Agreement, dated March 31, 2020 (the “Note Purchase Agreement”), among the Company, PGIM, Inc.

and the noteholders party thereto.

On June 16, 2021, the Company issued and sold to the purchasers $60.0 million aggregate principal amount of 2.35% Series E Notes (the "Series E Notes") pursuant to the terms of the Prior NPA.

The Series E Senior Notes are an unsecured obligation of the Company and bear interest at a rate of 2.35% per annum and mature on June 16, 2026.

3 unchanged sentences

At December 31, 2025, 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):

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, Series F Senior Notes and Series G 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):

• Permit the Consolidated Fixed Charge Coverage Ratio of EBITDA (as defined in the Note Purchase Agreement) to fixed charges as of the end of any fiscal quarter to be less than 2.50 to 1.

12 unchanged sentences

Revolving lines of credit and term loan

5.30% Series G senior notes due in 2032

6.25% Series F senior notes due in 2030

48 unchanged sentences

These impairment assessments occur annually, or more frequently if an event occurs, or circumstances change in the interim that would indicate that it was more likely than not the fair value had reduced below its carrying value.

Application of the goodwill impairment assessment requires judgement including the identification

of reporting units, assignment of assets and liabilities to reporting units, business projections including changes in pricing, rental and sale activity and costs, long term growth rates and discount rates.

Application of the goodwill impairment assessment requires judgement including the identification of reporting units, assignment of assets and liabilities to reporting units, business projections including changes in pricing, rental and sale activity and costs, long term growth rates and discount rates.

In 2025, 2024 and 2023 the Company performed qualitative assessments taking into consideration the market value of the Company, any changes in management, key personnel, strategy and any relevant macroeconomic conditions, concluding that the fair value of the reporting units substantially exceeded the respective reporting units carrying value, including goodwill.

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Non-lease revenue - Sales revenue is recognized upon delivery and installation of the equipment to customers.

Site related services revenues outside of the modular building such as grading, drainage, landscaping and paving are recognized upon completion of the services performed.

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 obtain control when delivery and installation are complete.

Revenue from contracts that satisfy the criteria for over-time recognition are recognized as work is performed by using the input method based on the ratio of costs incurred to estimated total contract costs for each contract.

Revenue from contracts that satisfy the criteria for over-time recognition are recognized

as work is performed by using the input method based on the ratio of costs incurred to estimated total contract costs for each contract.

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.

3 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-K

Item 7. Management’s Discussion and Analysis