MCGRATH RENTCORP 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Index Page Management’s Report on Internal Control over Financial Reporting 55 Reports of Independent Registered Public Accounting Firm (PCAOB ID: 248 ) 56 Consolidated Financial Statements Consolidated Balance Sheets as of December 31, 2025 and 2024 58 Consolidated Statements of Income for the Years Ended December 31, 2025, 2024, and 2023 59 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024, and 2023 60 Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2025, 2024, and 2023 61 Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023 62 Notes to Consolidated Financial Statements 63 - 54 - Management’s Report on Internal C ontrol over Financial Reporting The Company’s management is responsible for the preparation and integrity of the consolidated financial statements appearing in our Annual Report filed on Form 10-K. The consolidated financial statements were prepared in conformity with United States generally accepted accounting principles and include amounts based on management’s estimates and judgments. All other financial information in this report has been presented on a basis consistent with the information included in the consolidated financial statements. The Company’s management is also responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. The Company maintains a system of internal control that is designed to provide reasonable assurance as to the reliable preparation and presentation of the consolidated financial statements, as well as to safeguard assets from unauthorized use or disposition. The Company’s system of internal control over financial reporting is embodied in the Company’s Code of Business Conduct and Ethics. It sets the tone of our organization and includes factors such as integrity and ethical values. Our internal control over financial reporting is supported by formal policies and procedures, which are reviewed, modified and improved as changes occur in business conditions and operations. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. The Audit Committee of the Board of Directors, which is composed solely of outside directors, meets periodically with members of management and the independent auditors to review and discuss internal control over financial reporting, as well as accounting and financial reporting matters. The independent auditors report to the Audit Committee and accordingly have full and free access to the Audit Committee at any time. The Company’s management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria set forth in the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation, management has concluded that, as of December 31, 2025, the Company’s internal control over financial reporting was effective based on those criteria. - 55 - Report of Independent Regist ered Public Accounting Firm Board of Directors and Shareholders McGrath RentCorp Opinion on internal control over financial reporting We have audited the internal control over financial reporting of McGrath RentCorp (a California corporation) and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2025, and our report dated February 25, 2026 expressed an unqualified opinion on those financial statements. Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP San Francisco, California February 25, 2026 - 56 - Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders McGrath RentCorp Opinion on the financial statements We have audited the accompanying consolidated balance sheets of McGrath RentCorp (a California corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 25, 2026 expressed an unqualified opinion. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matters The critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2002. San Francisco, California February 25, 2026 - 57 - McGrath RentCorp Consolidated B alance Sheets December 31, (in thousands) 2025 2024 Assets Cash $ 295 $ 807 Accounts receivable, net of allowance for credit losses of $ 2,866 at December 31, 2025 and 2024 231,865 219,342 Rental equipment, at cost: Relocatable modular buildings 1,485,794 1,414,367 Portable storage containers 245,141 240,846 Electronic test equipment 337,100 343,982 2,068,035 1,999,195 Less: accumulated depreciation ( 647,137 ) ( 611,536 ) Rental equipment, net 1,420,898 1,387,659 Property, plant and equipment, net 233,492 197,439 Inventories 8,027 14,304 Prepaid expenses and other assets 83,351 80,477 Intangible assets, net 46,605 54,332 Goodwill 332,584 323,224 Total assets $ 2,357,117 $ 2,277,584 Liabilities and Shareholders' Equity Liabilities: Notes payable $ 514,924 $ 590,208 Accounts payable 66,233 60,082 Accrued liabilities 114,764 113,961 Deferred income 110,593 109,836 Deferred income taxes, net 313,580 280,129 Total liabilities 1,120,094 1,154,216 Commitments and contingencies (Note 12) Shareholders’ equity: Common stock, no par value - Authorized 40,000 shares Issued and outstanding - 24,612 shares as of December 31, 2025 and 24,551 shares as of December 31, 2024 121,785 116,253 Retained earnings 1,115,238 1,007,115 Total shareholders’ equity 1,237,023 1,123,368 Total liabilities and shareholders’ equity $ 2,357,117 $ 2,277,584 The accompanying notes are an integral part of these consolidated financial statements. - 58 - McGrath RentCorp Consolidated Stat ements of Income Year Ended December 31, (in thousands, except per share amounts) 2025 2024 2023 Revenues Rental $ 503,918 $ 489,929 $ 474,336 Rental related services 161,722 148,498 138,160 Rental operations 665,640 638,427 612,496 Sales 269,196 262,290 207,165 Other 9,399 10,225 12,181 Total revenues 944,235 910,942 831,842 Costs and Expenses Direct costs of rental operations: Depreciation of rental equipment 86,937 88,267 88,912 Rental related services 112,026 103,419 96,628 Other 118,309 109,116 114,942 Total direct costs of rental operations 317,272 300,802 300,482 Costs of sales 171,987 174,725 137,727 Total costs of revenues 489,259 475,527 438,209 Gross profit 454,976 435,415 393,633 Expenses: Selling and administrative expenses 211,353 200,432 207,539 Other income, net — ( 9,281 ) ( 3,618 ) Income from operations 243,623 244,264 189,712 Interest expense 30,622 47,241 40,560 Foreign currency exchange (gain) loss ( 80 ) 215 ( 310 ) Gain on merger termination from WillScot Mobile Mini (Note 1) — ( 180,000 ) — WillScot Mobile Mini transaction costs (Note 1) — 63,159 — Income from continuing operations before provision for income taxes 213,081 313,649 149,462 Provision for income taxes from continuing operations 56,773 81,922 37,610 Income from continuing operations 156,308 231,727 111,852 Discontinued operations: Income from discontinued operations before provision for income taxes — — 1,709 Provision for income taxes from discontinued operations — — 453 Gain on sale of discontinued operations, net of tax — — 61,513 Income from discontinued operations — — 62,769 Net income $ 156,308 $ 231,727 $ 174,621 Earnings per share from continuing operations: Basic $ 6.35 $ 9.44 $ 4.57 Diluted $ 6.35 $ 9.43 $ 4.56 Earnings per share from discontinued operations: Basic $ — $ — $ 2.57 Diluted $ — $ — $ 2.56 Earnings per share: Basic $ 6.35 $ 9.44 $ 7.14 Diluted $ 6.35 $ 9.43 $ 7.12 Shares used in per share calculation: Basic 24,602 24,541 24,469 Diluted 24,633 24,570 24,529 Cash dividends declared per share $ 1.94 $ 1.90 $ 1.86 The accompanying notes are an integral part of these consolidated financial statements. - 59 - McGrath RentCorp Consolidated Statements of COMPREHENSIVE Income Year Ended December 31, (in thousands) 2025 2024 2023 Net income $ 156,308 $ 231,727 $ 174,621 Other comprehensive income: Foreign currency translation adjustment, net of tax impact — — ( 38 ) Comprehensive income $ 156,308 $ 231,727 $ 174,583 The accompanying notes are an integral part of these consolidated financial statements. - 60 - McGrath RentCorp Consolidated Statements of Shareholders' Equity Common Stock Retained Accumulated Other Comprehensive Total Shareholders’ (in thousands, except per share amounts) Shares Amount Earnings Income (Loss) Equity Balance at December 31, 2022 24,388 $ 110,080 $ 693,943 $ ( 78 ) $ 803,945 Net income — — 174,621 — 174,621 Share-based compensation — 8,275 — — 8,275 Common stock issued under stock plans, net of shares withheld for employee taxes 108 — — — — Taxes paid related to net share settlement of stock awards — ( 7,233 ) — — ( 7,233 ) Dividends accrued at $ 1.86 per share — — ( 45,768 ) — ( 45,768 ) Other comprehensive loss — — — ( 38 ) ( 38 ) Balance at December 31, 2023 24,496 111,122 822,796 ( 116 ) 933,802 Net income — — 231,727 — 231,727 Share-based compensation — 9,502 — — 9,502 Common stock issued under stock plans, net of shares withheld for employee taxes 55 — — — — Taxes paid related to net share settlement of stock awards — ( 4,371 ) — — ( 4,371 ) Dividends accrued at $ 1.90 per share — — ( 47,408 ) — ( 47,408 ) Other comprehensive loss reclassification adjustment — — — 116 116 Balance at December 31, 2024 24,551 116,253 1,007,115 — 1,123,368 Net income — — 156,308 — 156,308 Share-based compensation — 11,225 — — 11,225 Common stock issued under stock plans, net of shares withheld for employee taxes 61 — — — — Taxes paid related to net share settlement of stock awards — ( 5,693 ) — — ( 5,693 ) Dividends accrued at $ 1.94 per share — — ( 48,185 ) — ( 48,185 ) Other comprehensive income — — — — — Balance at December 31, 2025 24,612 $ 121,785 $ 1,115,238 $ — $ 1,237,023 The accompanying notes are an integral part of these consolidated financial statements. - 61 - McGrath RentCorp Consolidated Statem ents of Cash Flows Year Ended December 31, (in thousands) 2025 2024 2023 Cash Flows from Operating Activities: Net income $ 156,308 $ 231,727 $ 174,621 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 107,069 107,455 109,375 Deferred income taxes (benefits) 33,451 38,574 ( 16,952 ) Provision for credit losses 1,726 1,890 2,633 Share-based compensation 11,225 9,502 8,275 Gain on sale of property, plant and equipment — ( 9,281 ) ( 3,618 ) Gain on sale of discontinued operations — — ( 61,513 ) Gain on sale of used rental equipment ( 44,191 ) ( 35,085 ) ( 31,642 ) Foreign currency exchange (gain) loss ( 80 ) 215 ( 310 ) Amortization of debt issuance costs 206 66 8 Change in: Accounts receivable ( 14,249 ) 6,136 ( 37,776 ) Inventories 6,277 1,121 ( 779 ) Prepaid expenses and other assets ( 2,873 ) 6,887 ( 28,547 ) Accounts payable ( 330 ) 11,836 ( 49,761 ) Accrued liabilities 816 4,924 17,235 Deferred income 328 ( 1,592 ) 14,094 Net cash provided by operating activities 255,683 374,375 95,343 Cash Flows from Investing Activities: Proceeds from sale of discontinued operations — — 268,012 Purchases of rental equipment ( 142,576 ) ( 191,231 ) ( 229,679 ) Purchases of property, plant and equipment ( 44,380 ) ( 40,228 ) ( 43,989 ) Cash paid for acquisition of businesses ( 23,785 ) — ( 458,315 ) Cash paid for acquisition of business assets — — ( 3,767 ) Proceeds from sales of used rental equipment 83,629 68,453 66,168 Proceeds from sales of property, plant and equipment — 12,251 9,702 Net cash used in investing activities ( 127,112 ) ( 150,755 ) ( 391,868 ) Cash Flows from Financing Activities: Net (payments) borrowings under bank lines of credit ( 77,490 ) ( 172,560 ) 274,225 Borrowings under term note agreement — — 75,000 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 ) ( 4,371 ) ( 7,233 ) Payment of dividends ( 47,900 ) ( 46,759 ) ( 45,556 ) Net cash (used in) provided by financing activities ( 129,083 ) ( 223,690 ) 296,436 Effect of foreign currency exchange rate changes on cash — — 9 Net decrease in cash ( 512 ) ( 70 ) ( 80 ) Cash balance, beginning of period 807 877 957 Cash balance, end of period $ 295 $ 807 $ 877 Supplemental Disclosure of Cash Flow Information: Gain on merger termination, net of transaction costs, presented under net cash provided by operating activities $ — $ 116,841 $ — Interest paid, during the period $ 29,905 $ 48,324 $ 38,603 Net income taxes paid, during the period $ 10,116 $ 36,524 $ 91,565 Dividends accrued during the period, not yet paid $ 12,749 $ 12,482 $ 12,010 Rental equipment acquisitions, not yet paid $ 11,670 $ 5,393 $ 16,653 The accompanying notes are an integral part of these consolidated financial statements. - 62 - MCGRATH RENTCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization McGrath RentCorp and its wholly-owned subsidiaries (the “Company”) is a California corporation organized in 1979. The Company is a diversified business to business rental company with three rental divisions; relocatable modular buildings, portable storage containers and electronic test equipment. Although the Company’s primary emphasis is on equipment rentals, sales of equipment occur in the normal course of business. At December 31, 2025, the Company was comprised of four reportable business segments: modular building segment ("Mobile Modular"), portable storage container segment (“Portable Storage”), electronic test equipment segment (“TRS-RenTelco”) and classroom manufacturing division selling modular classrooms in California (“Enviroplex”). 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 during year ended December 31, 2024, were $ 63.2 million. 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. Principles of Consolidation The consolidated financial statements include the accounts of McGrath RentCorp and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Revenue Recognition 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 building and portable storage container leases. 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 sales-type leases. For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a basis which results in a constant rate of return on the unrecovered lease investment. Other revenues include interest income on sales-type leases and rental income on facility leases. Non-lease revenues - 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 service performed. 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. The majority of revenue for these contracts is derived from long-term projects which typically span multiple quarters. The Company uses third parties to provide certain services as part of its contracts with customers. The Company is considered the principal (vs. an agent) as the Company is responsible for the fulfillment of all service elements and burdens the risks associated with the underlying performance obligations. Revenue for these services is recognized on a gross basis. Other revenue is recognized when earned and primarily includes interest income on sales-type leases, rental income on facility leases and certain logistics services. Sales taxes charged to customers are reported on a net basis and are excluded from revenues and expenses. - 63 - Depreciation of Rental Equipment Rental equipment is depreciated on a straight-line basis for financial reporting purposes and on an accelerated basis for income tax purposes. The costs of major refurbishment of relocatable modular buildings and portable storage containers are capitalized to the extent the refurbishment significantly adds value to, or extends the life of the equipment. Maintenance and repairs are expensed as incurred. The estimated useful lives and residual values of the Company’s rental equipment used for financial reporting purposes are as follows: Relocatable modular buildings 18 years, 50 % residual value Relocatable modular accessories 3 to 18 years, no residual value Blast resistant and kitchen modules 20 years, no residual value Portable storage containers 25 years, 62.5 % residual value Electronic test equipment and accessories 1 to 8 years, no residual value Costs of Rental Related Services Costs of rental related services are primarily associated with relocatable modular building and portable storage container leases. Modular building leases primarily consist of costs for services to be provided under the negotiated lease agreement for delivery, installation, modifications, skirting, and dismantle and return delivery. Costs related to these services are recognized on a straight-line basis over the term of the lease. Site related services costs for work outside of the modular building such as grading, drainage, landscaping and paving are recognized in the period the service is performed. Costs of rental related services associated with portable storage containers consists of costs of delivery, removal and cleaning of the containers. These costs are recognized in the period the service is performed. Impairment of Long-Lived Assets The Company evaluates the carrying value of rental equipment and identifiable definite lived intangible assets for impairment whenever events or circumstances have occurred that would indicate the carrying amount may not be fully recoverable. A key element in determining the recoverability of long-lived assets is the Company’s outlook as to the future market conditions for its rental equipment. If the carrying amount is not fully recoverable, an impairment loss is recognized to reduce the carrying amount to fair value. The Company determines fair value based upon the condition of the rental equipment and the projected net cash flows from its rental and sale considering current market conditions. Goodwill and identifiable indefinite lived assets are evaluated for potential impairment annually or when circumstances indicate potential impairment may have occurred. Impairment losses, if any, are determined based upon the excess of carrying value over the estimated fair value of the asset. There were no impairments of long-lived assets during the years ended December 31, 2025, 2024 and 2023. Other Direct Costs of Rental Operations Other direct costs of rental operations include direct labor, supplies, repairs, insurance, property taxes, license fees, impairment of rental equipment and certain modular lease costs charged to customers in the negotiated rental rate, which are recognized on a straight-line basis over the term of the lease. Cost of Sales Cost of sales in the Consolidated Statements of Income includes the carrying value of the equipment sold and all direct costs associated with the sale. Warranty Reserves Sales of new relocatable modular buildings, portable storage containers, electronic test equipment and related accessories 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, the Company has not found it necessary to establish such reserves to date as warranty costs have not been significant. Inventories Inventories consist of raw materials 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. Costs for units manufactured are determined using the - 64 - weighted average inventory method. Net realizable value is defined as the value for which an asset can be sold, less the estimated costs of selling such asset. 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 . Property, Plant and Equipment Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is recognized on a straight-line basis for financial reporting purposes, and on an accelerated basis for income tax purposes. Depreciation expense for property, plant and equipment is included in “selling and administrative expenses” and “rental related services” in the Consolidated Statements of Income. Maintenance and repairs are expensed as incurred. Property, plant and equipment consisted of the following: (dollar amounts in thousands) Estimated useful life December 31, in years 2025 2024 Land Indefinite $ 107,521 $ 88,605 Land improvements 20 – 50 88,436 77,221 Buildings 30 49,425 40,223 Furniture, office equipment and software 3 – 10 29,420 28,073 Vehicles and machinery 5 – 25 42,594 39,259 317,396 273,381 Less: accumulated depreciation ( 98,593 ) ( 91,042 ) 218,803 182,339 Construction in progress 14,689 15,100 Property, plant and equipment, net $ 233,492 $ 197,439 Property, plant and equipment depreciation expense was $ 9.6 million, $ 8.9 million and $ 9.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. Construction in progress at December 31, 2025 and 2024 consisted primarily of costs related to building and land improvements. Capitalized Software Costs The Company capitalizes certain development costs incurred in connection with its internal use software. Costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, direct internal and external costs are capitalized until the software is substantially complete and ready for its intended use. These costs generally include external direct costs of materials and services consumed in the project and internal costs, such as payroll and benefits of those employees directly associated with the development of the software. Maintenance, training and post implementation costs are expensed as incurred. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Capitalized software costs are included in property, plant and equipment and construction in progress. There was $ 0.9 million in costs capitalized to construction in progress during the year ended December 31, 2025. Conversely, there were no internal use software costs capitalized during the year ended December 31, 2024. The Company evaluates implementation costs incurred in a cloud computing arrangement that is a service contract under the internal-use software framework. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Costs incurred in the development stage are generally capitalized as prepaid expenses and other assets. There was $ 11.4 million in cloud computing arrangements capitalized to prepaid expenses and other assets for the year ended December 31, 2025. Amortization expense is calculated on a straight-line basis over the contractual term including extension options of the cloud computing arrangement and recorded as selling, general and administrative expense. Shipping Costs The Company includes third party costs to deliver rental equipment to customers in costs of rental related services and costs of sales. Advertising Costs Advertising costs are expensed as incurred. Total advertising expenses were $ 6.7 million, $ 6.2 million and $ 5.9 million for the years ended December 31, 2025, 2024 and 2023. - 65 - Income Taxes Income taxes are accounted for using an asset and liability approach. Deferred tax assets and liabilities are recorded for the effect of temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and deferred tax liabilities are adjusted to the extent necessary to reflect tax rates expected to be in effect when temporary differences reverse. Adjustments may be required to deferred tax assets and deferred tax liabilities due to changes in tax laws and audit adjustments by tax authorities. A valuation allowance would be established if, based on the weight of available evidence, management believes that it is more likely than not that some portion or all of a recorded deferred tax asset would not be realized in future periods. To the extent adjustments are required in any given period, the adjustments would be included within the “Provision for income taxes” in the consolidated statements of income. Goodwill and Intangible Assets Purchase prices of acquired businesses are allocated to the assets and liabilities acquired based on the estimated fair values on the respective acquisition dates. Based on these values, the excess purchase prices over the fair value of the net assets acquired are allocated to goodwill. At December 31, 2025 and 2024, goodwill and trade name intangible assets from continuing operations which have indefinite lives totaled $ 332.6 million and $ 323.4 million, respectively. 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 assets’ carrying amount, an impairment loss would be charged to expense in the period identified. The amount of an impairment loss would be recognized as 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 impairment review of the Company’s goodwill is performed by first assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The fair value of the reporting unit is compared to its carrying value to determine if the goodwill is impaired. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, then goodwill is not impaired. If the carrying value of the net assets assigned to the reporting unit were to exceed its fair value, then a goodwill impairment loss is recorded for the amount the reporting unit’s carrying value exceeds the estimated fair value. The Company conducted its annual impairment analysis in the fourth quarter of 2025. The impairment analysis did no t result in an impairment charge for the fiscal year ended 2025, consistent with the previously reported years of 2024 and 2023. Determining the fair value of a reporting unit is judgmental and involves the use of significant estimates and assumptions. The Company based its fair value estimates on assumptions that it believes are reasonable but are uncertain and subject to changes in market conditions. 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 effects of stock options, unvested restricted stock awards and other potentially dilutive securities. The table below presents the weighted-average common stock used to calculate basic and diluted earnings per share: (in thousands) Year Ended December 31, 2025 2024 2023 Weighted-average common stock for calculating basic earnings per share 24,602 24,541 24,469 Effect of potentially dilutive securities from equity-based compensation 31 29 60 Weighted-average common stock for calculating diluted earnings per share 24,633 24,570 24,529 - 66 - For the years ended December 31, 2025 and 2024, there were 42,958 and 37,214 shares which had an anti-dilutive effect on the computation of diluted earnings per share that required exclusion, respectively. In 2023 , there were no shares having an anti-dilutive effect requiring exclusion from the computation of diluted earnings per share. 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. In the years ended December 31, 2025, 2024 and 2023 there were no shares of common stock repurchased. As of December 31, 2025, 2,000,000 shares remain authorized for repurchase. Accounts Receivable and Concentration of Credit Risk The Company’s accounts receivable consist of amounts due from customers for rentals, sales, financed sales and unbilled amounts for the portion of modular building end-of-lease services earned, which were negotiated as part of the lease agreement. Unbilled receivables related to end-of-lease services, which consists of dismantle and return delivery of buildings, were $ 73.2 million at December 31, 2025 and $ 69.6 million at December 31, 2024. The Company sells primarily on 30 -day terms, individually performs credit evaluation procedures on its customers on each transaction and will require security deposits from its customers when a significant credit risk is identified. The Company records an allowance for credit losses in amounts equal to the estimated losses expected to be incurred in the collection of the accounts receivable. The estimated losses are based on historical collection experience in conjunction with an evaluation of the current status of the existing accounts. Customer accounts are written off against the allowance for credit losses when an account is determined to be uncollectable. The allowance for credit losses is based on the Company’s assessment of the collectability of customer accounts receivable from operating lease and non-lease revenues. The Company regularly reviews the allowance by considering factors such as historical payment experience and trends, the age of the accounts receivable balances, the Company’s operating segment, customer industry, credit quality and current economic conditions that may affect a customer’s ability to pay. The Company recognized credit losses of $ 1.7 million, $ 1.9 million and $ 2.6 million for the twelve months ended December 31, 2025, 2024 and 2023, respectively. The allowance for credit losses was $ 2.9 million at December 31, 2025, unchanged from the allowance reported in 2024, and $ 2.8 million for the year ended December 31, 2023. The allowance for credit loss activity was as follows: (in thousands) 2025 2024 Beginning balance, January 1 $ 2,866 $ 2,801 Provision for credit losses 1,726 1,890 Write-offs, net of recoveries ( 1,726 ) ( 1,825 ) Ending balance, December 31 $ 2,866 $ 2,866 Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of trade accounts receivable. From time to time, the Company maintains cash balances in excess of the Federal Deposit Insurance Corporation limits. Net Investment in Sales-Type Leases The Company enters into sales-type leases with certain qualified customers to purchase its rental equipment, primarily at its Mobile Modular and TRS-RenTelco operating segments. Sales-type leases have terms that generally range from 12 to 36 months and are collateralized by a security interest in the underlying rental asset. The net investment in sales-type leases was $ 6.4 million at December 31, 2025, and $ 6.7 million at December 31, 2024. The Company’s assessment of current expected losses on these receivables was not material and no credit loss expense was provided as of December 31, 2025. The Company regularly reviews the allowance by considering factors such as historical payment experience, the age of the lease receivable balances, credit quality and current economic conditions that may affect a customer's ability to pay. Lease receivables are considered past due 90 days after invoice. The Company manages the credit risk in net investment in sales-type leases, on an ongoing basis, using a number of factors, including, but not limited to the following: historical payment history, credit score, size of operations, length of time in business, industry, historical profitability, historical cash flows, liquidity and past due amounts. The Company uses credit scores obtained from external credit bureaus as a key indicator for the purposes of determining credit quality of its new customers. The Company does not own available for sale debt securities or other financial assets at December 31, 2025. - 67 - Fair Value of Financial Instruments The Company believes that the carrying amounts for cash, accounts receivable, accounts payable and notes payable approximate their fair values except for fixed rate debt included in notes payable which had an estimated fair value of $ 251.3 million and $ 169.4 million, as of December 31, 2025 and 2024, respectively, compared to the recorded book values of $ 250.0 million and $ 175.0 million, respectively. The estimates of fair value of the Company’s fixed rate debt are based on the borrowing rates currently available to the Company for bank loans with similar terms and average maturities. Foreign Currency Transactions and Translation The Company's Canadian subsidiary, TRS-RenTelco Inc., a British Columbia corporation (“TRS-Canada”), functions as a branch sales office for TRS-RenTelco in Canada. The functional currency for TRS-Canada is the U.S. dollar. Foreign currency transaction gains and losses of TRS-Canada are reported in the results of operations in the period in which they occur. Currently, the Company does not use derivative instruments to hedge its economic exposure with respect to assets, liabilities and firm commitments as the foreign currency transactions and risks to date have not been significant. Share-Based Compensation The Company measures and recognizes the compensation expense for all share-based awards made to employees and directors, including stock options, stock appreciation rights (“SARs”) and restricted stock units (“RSUs”), based upon estimated fair values. The fair value of stock options and SARs is estimated on the date of grant using the Black-Scholes option pricing model and for RSUs based upon the fair market value of the underlying shares of common stock as of the date of grant. The Company recognizes share-based compensation cost ratably on a straight-line basis over the requisite service period, which generally equals the vesting period. For performance-based RSUs, compensation costs are recognized when it is probable that vesting conditions will be met. In addition, the Company estimates the probable number of shares of common stock that will be earned and the corresponding compensation cost until the achievement of the performance goal is known. The Company recognizes forfeitures based on actual forfeitures when they occur. The Company records share-based compensation costs in “Selling and administrative expenses” in the consolidated statements of income. The Company recognizes a benefit from share-based compensation in the consolidated statements of shareholders’ equity if an incremental tax benefit is realized. Further information regarding share-based compensation can be found in Note 10. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions in determining reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during each period presented. Actual results could differ from those estimates. The most significant estimates included in the financial statements are the future cash flows and fair values used to determine the recoverability of the rental equipment and identifiable definite and indefinite lived intangible assets carrying value, the various assets’ useful lives and residual values, and the allowance for credit losses. In addition, determining the fair value of the assets and liabilities acquired in a business or asset acquisition can be judgmental in nature and can involve the use of significant estimates and assumptions. NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS In December 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2025‑12, Codification Improvements , as part of its ongoing initiative to make incremental improvements to the Accounting Standards Codification. The amendments address a broad range of Topics and include technical corrections, clarifications, and other minor improvements intended to enhance the usability and consistency of U.S. GAAP. The amendments are not expected to significantly affect current accounting practice or result in significant implementation costs for most entities. The amendments are effective for annual periods beginning after December 15, 2026, and for interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and does not expect the adoption of this ASU to have a material impact on its financial position, results of operations, or cash flows In December 2025, the FASB issued ASU No. 2025‑11, Interim Reporting (Topic 270): Narrow‑Scope Improvements , which clarifies and reorganizes the guidance in Topic 270 to improve navigability and consistency in interim reporting. The amendments clarify which entities are subject to Topic 270, specify the form and content of interim financial statements and accompanying notes, and provide a comprehensive list of required interim disclosures. The ASU also introduces a disclosure principle requiring entities to disclose events and changes since the end of the most recent annual reporting period that have a material impact on the entity. The amendments are not intended to change the fundamental nature of interim reporting or significantly expand or reduce existing interim disclosure requirements, but rather to clarify existing guidance. For public business entities, the amendments are effective for interim reporting periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of this ASU - 68 - on its interim financial statement disclosures. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software . This ASU modernizes and clarifies the accounting for internal-use-software development costs to better reflect current software development practices, including agile and iterative methodologies. The amendments remove the existing development-stage model and establish a new principles-based capitalization framework. Under the updated guidance, software development costs are capitalized only when both of the following conditions are met: management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose (the "probable-to-complete" threshold). This ASU also supersedes Subtopic 350-50 and consolidates all website development guidance into Subtopic 350-40. This ASU is effective for fiscal years beginning after December 15, 2027, including subsequent interim periods. The Company is currently 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 currently in the process of evaluating the financial statement impact of this ASU. In October 2023, the FASB issued ASU No. 2023‑06, Disclosure Improvements , which incorporates certain disclosure and presentation requirements previously included in SEC Regulations S‑X and S‑K into the FASB Accounting Standards Codification. The amendments are intended to clarify or improve disclosure requirements and enhance consistency between U.S. GAAP and SEC reporting requirements. The amendments affect a variety of Topics and primarily relate to disclosures, including, but not limited to, cash flow statement presentation, commitments, debt, equity, and other financial statement disclosures. The amendments do not change recognition or measurement guidance. The effective date of each amendment is contingent upon the removal of the related disclosure requirement from the applicable SEC regulations. Early adoption is permitted once the amendments become effective. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. NOTE 3. IMPLEMENTED ACCOUNTING PRONOUNCEMENTS Effective December 15, 2025, the Company adopted ASU 2023-09, Income Taxes—Improvements to Income Tax Disclosures (Topic 740), which requires 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 requires the disclosure of income tax expense or benefit from continuing operations disaggregated by federal, state and foreign if certain thresholds are met. The adoption of this new guidance resulted in expanded income tax footnote disclosures found in "Note 9. Income Taxes" to the Consolidated Financial Statements and did not have a material impact on the Company's Consolidated Financial Statements. NOTE 4. BUSINESS COMBINATIONS During the year ended December 31, 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. The final 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 final purchase price allocation to the container solutions provider was $ 4.5 million to the fair value of rental equipment acquired, $ 1.0 million to property, plant and equipment, intangible assets of $ 1.7 million and $ 5.1 million to goodwill. These acquisitions were accounted for as a purchase of a “business” in accordance with criteria in ASC 805, Business Combinations , using the purchase method of accounting. Incremental transaction costs totaled $ 0.5 million for the year ended December 31, 2025. NOTE 5. DISCONTINUED OPERATIONS On February 1, 2023, the Company completed the sale of Adler Tank Rentals, LLC to Ironclad Environmental Solutions, Inc. ("Ironclad"), a portfolio company of Kinderhook Industries, for a sale price of $ 268.0 million. The total transaction costs incurred from the divestiture was $ 6.7 million during the year ended December 31, 2023. The divestiture of the Company's Adler Tanks business represents the Company's strategic shift to concentrate its operations on its core modular and storage businesses. The sale price was subject to certain adjustments, including net working capital, certain qualified capital expenditures and certain transaction expenses to - 69 - be borne by the Company. In connection with the sale, the Company entered into a number of ancillary agreements, including an escrow agreement associated with net working capital adjustments, a restricted covenant agreement, a transition services agreement, and a number of leases whereby Ironclad or one of its affiliates would be a lessee to certain properties owned by the Company that the Adler Tanks business would continue to utilize after the sale. These ancillary agreements do not provide for continued involvement by the Company in Adler Tanks. In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations and ASC 360 , Property, Plant and Equipment, the Company determined that the criteria for the presentation of discontinued operations and held-for-sale, respectively, were met during the first quarter of 2023. The following table presents the results of Adler Tanks as reported in income from discontinued operations within the Consolidated Statements of Income for the year ended December 31, 2023: (dollar amounts in thousands) Year Ended December 31, 2023 Revenues Rental $ 6,520 Rental related services 2,584 Rental operations 9,104 Sales 269 Other 65 Total revenues 9,438 Costs and Expenses Direct costs of rental operations: Depreciation of rental equipment 1,325 Rental related services 2,020 Other 1,270 Total direct costs of rental operations 4,614 Costs of sales 159 Total costs of revenues 4,773 Gross Profit Rental 3,926 Rental related services 564 Rental operations 4,490 Sales 110 Other 65 Total gross profit 4,665 Expenses: Selling and administrative expenses 2,582 Income from operations 2,083 Interest expense allocation 374 Income from discontinued operations before provision for income taxes 1,709 Provision for income taxes from discontinued operations 453 Income from discontinued operations $ 1,256 For the year ended December 31, 2023, significant operating and investing items related to Adler Tanks were as follows: December 31, (in thousands) 2023 Operating activities of discontinued operations: Depreciation and amortization $ 1,457 Gain on sale of used rental equipment ( 111 ) Investing activities of discontinued operations: Proceeds from sales of used rental equipment 269 Purchases of rental equipment ( 25 ) Purchases of property, plant and equipment ( 40 ) - 70 - NOTE 6. LEASES Lessee The Company leases real estate for certain of its branch offices and rental equipment storage yards, vehicles and equipment used in its rental operations. The Company determines if an arrangement is a lease at inception. The Company has leases with lease and non-lease components, which are accounted for separately. Right-Of-Use (“ROU”) assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred, which are not material. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company uses the interest rate stated in the lease as the discount rate. If the interest rate is not stated, the Company uses its incremental borrowing rate based on information available on lease commencement date in determining the present value of lease payments. Many of the Company’s real estate lease agreements include options to extend the lease, which are not included in the minimum lease terms unless they are reasonably certain to be exercised. These leases include one or more options to renew , with renewal terms that may extend the lease term from one to three years . The amount of payments associated with such options is not material. Short-term leases are leases having a term of twelve months or less and exclude leases with a lease term of one month or less. The Company recognizes short-term leases on a straight-line basis and does not record a related ROU asset or liability for such leases. At December 31, 2025 and 2024 the Company’s ROU assets and operating lease liabilities were $ 12.9 million and $ 12.6 million, respectively, which are recorded in Prepaid expenses and other assets and Accrued liabilities on the Company’s Consolidated Balance Sheets. During the years ended December 31, 2025 and 2024, operating lease expense was $ 6.6 million and $ 6.4 million, respectively, which included short term lease expense of $ 0.2 million and $ 0.3 million, respectively. At December 31, 2025 and 2024, the weighted-average remaining lease term for operating leases was 3.4 years and the weighted average discount rate was 5.43 % and 5.37 %, respectively. The Company had no sub-lease income or finance leases during the years ended December 31, 2025 and 2024. Supplemental cash flow information related to leases was as follows: (in thousands) Year Ended December 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,520 $ 6,035 Right of use assets obtained in exchange for lease obligations: Operating leases $ 6,394 $ 6,248 As of December 31, 2025, maturities of operating lease liabilities were as follows: (in thousands) Year ended December 31, 2026 $ 5,246 2027 3,770 2028 2,444 2029 1,200 2030 505 Thereafter 664 Total lease payments 13,829 Less: imputed interest ( 958 ) $ 12,871 Lessor The Company’s equipment rentals for each of its operating segments are governed by agreements that detail the lease terms and conditions. The determination of whether these contracts with customers contain a lease generally does not require significant judgement. The Company accounts for these rentals as operating leases. These leases do not include material amounts of variable payments and the Company has made the accounting policy election to exclude all taxes assessed by a governmental authority. The Company generally does not provide an option for the lessee to purchase the rented equipment at the end of the lease term, thus, does not generate material revenue from sales of equipment under such options. Initial lease terms vary in length based upon customer needs and generally range from one to sixty months . Customers have the option to keep equipment on rent beyond the initial lease term on a - 71 - month-to month basis based upon their needs. All of the Company’s rental products have long useful lives relative to the typical rental term with the original investment typically recovered in approximately three to five years . The rental products are typically rented for a majority of the time owned and a significant portion of the original investment is recovered when sold from inventory. The Company’s lease agreements do not contain residual value guarantees or restrictive covenants. As of December 31, 2025, maturities of operating lease payments to be received in 2026 and thereafter were as follows: (in thousands) Year Ended December 31, 2026 $ 181,508 2027 72,275 2028 28,832 2029 11,917 2030 4,413 Thereafter 846 $ 299,791 In the year ended December 31, 2025, the Company’s lease revenues from continuing operations were $ 618.1 million, consisting of $ 613.6 million of operating lease revenues and $ 4.5 million of finance lease revenues. 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 basis which results in a constant rate of return on the unrecovered lease investment. For the year ended December 31, 2025, the Company’s finance lease revenues included $ 3.6 million of sales revenues and $ 0.9 million of interest income. The minimum lease payments receivable and the net investment are included in Accounts receivable on the Company’s Consolidated Balance Sheet for such leases, which were as follows: (in thousands) December 31, 2025 Gross minimum lease payments receivable $ 7,758 Less – unearned interest ( 1,317 ) Net investment in finance lease receivables $ 6,441 As of December 31, 2025, the future minimum lease payments under non-cancelable finance leases to be received in 2026 and thereafter were as follows: (in thousands) Year Ended December 31, 2026 $ 3,360 2027 1,067 2028 1,110 2029 855 2030 49 Total minimum future lease payments to be received $ 6,441 NOTE 7. 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 Topic 842, Leases . Revenues determined to be non-lease related are accounted for in accordance with 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 obtain 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. - 72 - 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 Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. The contract liabilities included in Deferred income on the Company’s Consolidated Balance Sheets totaled $ 34.3 million and $ 42.1 million at December 31, 2025 and 2024, respectively. During the year ended December 31, 2025, the Company determined that return delivery revenues for Portable Storage and rent adjustments for TRS-RenTelco met the criteria for contract liability classification, as such the previously reported Deferred income for the year ended December 31, 2024, of $ 35.4 million has been adjusted accordingly. Revenues totaling $ 40.6 million were recognized during the year ended December 31, 2025, 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 Consolidated Balance Sheets and totaled $ 10.9 million and $ 13.0 million at December 31, 2025 and 2024, respectively. The Company did not recognize any material contract asset impairments during the years ended December 31, 2025 and 2024. The Company has uncompleted contracts with customers that have unsatisfied or partially satisfied performance obligations. These contracts are recognized over time and at a point in time. The Company has elected the practical expedient within Topic 606 and does not disclose information related to remaining performance obligations for contracts recognized with an original expected duration of one year or less. For the year ended December 31, 2025, $ 257.9 million of revenue was recognized for sales and non-lease services transferred at a point in time and $ 68.3 million of revenue was recognized for sales and non-lease services transferred over time. 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 Sheets. 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. 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 sales-type leases. For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a basis which results in a constant rate of return on the unrecovered lease investment. Other revenues include interest income on sales-type leases and rental income on facility leases. 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 container and electronic test equipment leases, rental related services revenues for delivery and return delivery are considered non-lease revenues. For site related services revenues outside of the modular building such as grading, drainage, landscaping and paving are considered non-lease. 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 contracts 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. - 73 - The following table disaggregates the Company’s revenues from continuing operations 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 years ended December 31, 2025, 2024 and 2023: (in thousands) Mobile Modular Portable Storage TRS- RenTelco Enviroplex Consolidated Year Ended December 31, 2025 Leasing $ 433,890 $ 69,348 $ 114,834 $ — $ 618,072 Non-lease: Rental related services 40,334 15,431 3,105 — 58,870 Sales 170,669 7,780 29,698 57,400 265,547 Other 235 255 1,256 — 1,746 Total non-lease 211,238 23,466 34,059 57,400 326,163 Total revenues $ 645,128 $ 92,814 $ 148,893 $ 57,400 $ 944,235 2024 Leasing $ 414,195 $ 71,999 $ 105,662 $ — $ 591,856 Non-lease: Rental related services 34,778 16,565 2,777 — 54,120 Sales 183,234 5,695 25,499 45,830 260,258 Other 3,159 238 1,311 — 4,708 Total non-lease 221,171 22,498 29,587 45,830 319,086 Total revenues $ 635,366 $ 94,497 $ 135,249 $ 45,830 $ 910,942 2023 Leasing $ 367,753 $ 77,181 $ 119,134 $ — $ 564,068 Non-lease: Rental related services 36,734 19,250 2,658 — 58,642 Sales 155,267 4,587 24,951 20,192 204,997 Other 2,482 119 1,534 — 4,135 Total non-lease 194,483 23,956 29,143 20,192 267,774 Total revenues $ 562,236 $ 101,137 $ 148,277 $ 20,192 $ 831,842 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 and related accessories 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, the Company has not found it necessary to establish such reserves to date as warranty costs have not been significant. 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 building leases. Incremental costs for obtaining a contract for all other operating segments 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 types of sales are infrequent in occurrence and reported on the 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 consolidated balance sheets. - 74 - NOTE 8. NOTES PAYABLE Notes payable consisted of the following: (in thousands) December 31, 2025 2024 Unsecured revolving lines of credit and term loan $ 264,950 $ 415,440 2.35 % Series E senior notes due in 2026 60,000 60,000 2.57 % Series D senior notes due in 2028 40,000 40,000 6.25 % Series F senior notes due in 2030 75,000 75,000 5.30 % Series G senior notes due in 2032 75,000 — 514,950 590,440 Unamortized debt issuance cost ( 26 ) ( 232 ) Total notes payable $ 514,924 $ 590,208 As of December 31, 2025, the future minimum payments under the unsecured revolving lines of credit, 2.35 % Series E senior notes, 2.57 % Series D senior notes, 6.25 % Series F senior notes and 5.30 % Series G senior notes due in 2026 , 2028 , 2030 , and 2032 respectively, are as follows: (in thousands) Year Ended December 31, 2026 $ 60,000 2027 264,950 2028 40,000 2029 — 2030 75,000 Thereafter 75,000 Total notes payable $ 514,950 Unsecured Revolving Lines of Credit 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, 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 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 under the heading "Liquidity and Capital Resources - Note Purchase and Private Shelf Agreement" in the MD&A). In addition, the Company may incur additional senior note indebtedness in an aggregate amount not to exceed $ 250.0 million. The Credit Facility matures on July 15, 2027 and replaced the Company’s prior $ 420.0 million credit facility dated March 31, 2020 with Bank of America, N.A., as agent, as amended. All obligations outstanding under the prior credit facility as of the date of the Credit Facility were refinanced by the Credit Facility on April 23, 2022. On August 19, 2022, the Company entered into an amended and restated Credit Facility Letter Agreement and a Credit Line Note in favor of MUFG Union Bank, N.A., which provides for a $ 20.0 million line of credit facility related to its cash management services (“Sweep Service Facility”). The Sweep Service Facility matures on the earlier of July 15, 2027 , or the date the Company ceases to - 75 - utilize MUFG Union Bank, N.A. for its cash management services. The Sweep Service Facility replaced the Company’s prior $ 12.0 million sweep service facility, dated as of March 30, 2020. On April 23, 2024, the Company entered into a first incremental facility amendment with Bank of America, N.A., as Administrative Agent and the first incremental lender (“BoA”) and the guarantors named therein (the “First Incremental Amendment”). The First Incremental Amendment amends the Second Amended and Restated Credit Agreement, dated as of July 15, 2022, as amended, by and among the Company, BoA, the other lenders named therein, and the guarantors named therein (the “Credit Agreement”) to institute an incremental term loan “A” facility in an aggregate principal amount of $ 75.0 million (the “Incremental Credit Facility”). The proceeds from the Incremental Credit Facility were used for general corporate purposes. 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. 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): • Permit the Consolidated Fixed Charge Coverage Ratio of EBITDA to fixed charges as of the end of any fiscal quarter to be less than 2.50 to 1. At December 31, 2025 the actual ratio was 3.88 to 1. • Permit the Consolidated Leverage Ratio of funded debt to EBITDA at any time during any period of four consecutive fiscal quarters to be greater than 2.75 to 1. At December 31, 2025, the actual ratio was 1.42 to 1. Amounts borrowed under the Credit Facility bear interest at the Company’s option at either: (i) Secured Overnight Financing Rate ("SOFR") plus a defined margin, or (ii) the Agent bank’s prime rate (“base rate”) plus a margin. The applicable margin for each type of loan is measured based upon the Consolidated Leverage Ratio at the end of the prior fiscal quarter and ranges from 1.00 % to 1.75 % for SOFR loans and 0 % to 0.75 % for base rate loans. In addition, the Company pays an unused commitment fee for the portion of the $ 650.0 million credit facility that is not used. These fees are based upon the Consolidated Leverage Ratio and range from 0.15 % to 0.30 %. As o f December 31, 2025 and 2024, the applicable margins were 1.25 % for SOFR based loans, 0.25 % for base rate loans and 0.20 % for unused fees. Amounts borrowed under the Sweep Service Facility are based upon the MUFG Union Bank, N.A. base rate plus an applicable margin and an unused commitment fee for the portion of the $ 20.0 million facility not used. The applicable base rate margin and unused commitment fee rates for the Sweep Service Facility are the same as for the Amended Credit Facility. The following information relates to the lines of credit for each of the following periods: (dollar amounts in thousands) Year Ended December 31, 2025 2024 Maximum amount outstanding $ 415,440 $ 631,101 Average amount outstanding $ 361,472 $ 555,225 Weighted average interest rate, during the period 5.79 % 6.94 % Prime interest rate, end of period 6.75 % 7.50 % Note Purchase and Private Shelf Agreement 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 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, 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. The Company will sell the Shelf Notes directly - 76 - to such purchasers. The full net proceeds of each Shelf Note will be used in the manner described in the applicable Request for Purchase with respect to such Shelf Note. 5.30% Senior Notes Due in 2032 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 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 Note Purchase Agreement. 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 . Interest on the Series F Senior Notes is payable semi-annually beginning on March 27, 2024 and continuing thereafter on September 27 and March 27 of each year until maturity. The principal balance is due when the notes mature on September 27, 2030. The full net proceeds from the Series F Senior Notes were primarily used to fulfill the income tax obligations incurred from the divestiture of Adler Tanks. At December 31, 2025, the principal balance outstanding under the Series F Senior Notes was $ 75.0 million. 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 Prior NPA. 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 . Interest on the Series D Senior Notes is payable semi-annually beginning on September 17, 2021 and continuing thereafter on March 17 and September 17 of each year until maturity. The principal balance is due when the notes mature on March 17, 2028. The full net proceeds from the Series D Senior Notes were used to pay off the Company’s $ 40.0 million Series B Senior Notes. At December 31, 2025, the principal balance outstanding under the Series D Senior Notes was $ 40.0 million. 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 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 . Interest on the Series E Senior Notes is payable semi-annually beginning on December 16, 2021 and continuing thereafter on June 16 and December 16 of each year until maturity. The principal balance is due when the notes mature on June 16, 2026. The full net proceeds from the Series E Senior Notes were used to pay down the Company’s credit facility. 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, 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 to fixed charges as of the end of any fiscal quarter to be less than 2.50 to 1. At December 31, 2025, the actual ratio was 3.88 to 1. • Permit the Consolidated Leverage Ratio of funded debt to EBITDA at any time during any period of four consecutive quarters to be greater than 2.75 to 1. At December 31, 2025, the actual ratio was 1.42 to 1. At December 31, 2025, the Company was in compliance with each of the aforementioned covenants. There are no anticipated trends that the Company is aware of that would indicate non-compliance with these covenants, though, significant deterioration in the Company’s financial performance could impact its ability to comply with these covenants. - 77 - NOTE 9. INCOME TAXES Income before provision for income taxes consisted of the following: (in thousands) Year Ended December 31, 2025 2024 2023 U.S. $ 212,677 $ 310,352 $ 234,188 Foreign 404 3,296 228 $ 213,081 $ 313,648 $ 234,416 The provision (benefit) for income taxes consisted of the following: (in thousands) Year Ended December 31, 2025 2024 2023 Current: U.S. Federal $ 14,545 $ 31,127 $ 57,176 State 7,106 10,518 ( 5,587 ) Foreign 1,671 1,704 1,847 23,322 43,349 53,436 Deferred: U.S. Federal 27,951 31,852 4,892 State 5,500 6,693 1,481 Foreign — 28 ( 14 ) 33,451 38,573 6,359 Total $ 56,773 $ 81,922 $ 59,795 A reconciliation of the provision (benefit) for income taxes and the amount computed by applying the U.S. federal statutory income tax rate to the income before provision for income taxes was as follows: (in thousands) Year Ended December 31, 2025 2024 2023 U.S. federal statutory rate $ 44,747 21.0 % $ 65,866 21.0 % $ 49,227 21.0 % State and local income taxes, net of federal income tax effect 1 10,985 5.2 % 16,684 5.3 % 11,400 4.9 % Foreign tax effects ( 483 ) - 0.2 % ( 1,233 ) - 0.4 % ( 345 ) - 0.2 % Nontaxable or nondeductible items 1,523 0.7 % 604 0.2 % ( 488 ) - 0.2 % Total $ 56,772 26.6 % $ 81,921 26.1 % $ 59,794 25.5 % 1. For states that, in the aggregate, accounted for over fifty percent of the effect of the state and local income taxes reported above were: (i) for 2025, California, (ii) for 2024, California and Florida, (iii) for 2023, California and Texas. Income taxes paid, net of refunds, exceeded five percent of total income taxes paid, net of refunds, in the following jurisdictions: (in thousands) December 31, 2025 2024 2023 Federal $ 5,200 $ 24,500 $ 68,000 California 1,900 3,500 11,020 Florida 815 — — The following table shows the deferred income taxes related to the temporary differences between the tax bases of assets and liabilities and the respective amounts included in “Deferred income taxes, net” on the Company’s Consolidated Balance Sheets: - 78 - (in thousands) December 31, 2025 2024 Deferred tax liabilities: Accelerated depreciation $ 307,848 $ 285,835 Prepaid costs currently deductible 16,902 13,572 Other 11,179 10,144 Total deferred tax liabilities 335,929 309,551 Deferred tax assets: Accrued costs not yet deductible 16,082 15,909 Allowance for doubtful accounts 735 733 Net operating loss carry-forward 133 7,415 Deferred revenues 1,942 2,175 Share-based compensation 3,458 3,190 Total deferred tax assets 22,350 29,422 Deferred income taxes, net $ 313,579 $ 280,129 The Company's tax loss carryforwards for the year ended December 31, 2025, were $ 2.4 million for state jurisdictions which are expected to result in a future state tax benefit of $ 0.1 million. The availability of these tax losses to offset future income varies by jurisdiction. Furthermore, the ability to utilize the tax losses may be subject to additional limitations. The Company’s state net operating loss carryforwards have differing carryforward periods. The Company anticipates that the available net operating losses as of December 31, 2025, will be utilized prior to their respective expiration dates. For income tax purposes, deductible compensation related to share-based awards is based on the value of the award when realized, which may be different than the compensation expense recognized by the company for financial statement purposes which is based on the award value on the date of grant. The difference between the value of the award upon grant, and the value of the award when ultimately realized, creates either additional tax expense or benefit. In 2025, 2024 and 2023 exercise of share-based awards by employees resulted in an excess tax benefit of $ 0.8 million, $ 0.9 million and $ 2.7 million, respectively. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company evaluated all of its tax positions for which the statute of limitations remained open and determined there were no material unrecognized tax benefits as of December 31, 2025 and 2024. In addition, there have been no material changes in unrecognized benefits during 2025, 2024 and 2023. The Company is subject to income taxes in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Tax regulations within each jurisdiction are subject to interpretation of the related tax laws and regulations and require the application of significant judgment. Our income tax returns are subject to examination by federal, state and foreign tax authorities. There may be differing interpretations of tax laws and regulations, and as a result, disputes may arise with these tax authorities involving the timing and amount of deductions and allocation of income. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for the years before 2021. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision (benefit) for income taxes in the accompanying consolidated statements of income for all periods presented. Such interest and penalties were not significant for the years ended December 31, 2025, 2024 and 2023. - 79 - NOTE 10. BENEFIT PLANS Stock Plans The Company adopted the 2016 Stock Incentive Plan (the “2016 Plan”), effective June 8, 2016, under which 2,000,000 shares of the common stock of the Company, plus the number of shares that remained available for grants of awards under the Company's 2007 Stock Option Plan (the “2007 Plan”) become available as a result of forfeiture, termination, or expiration of awards previously granted under the 2007 Plan, were reserved for the grant of equity awards to its employees, directors and consultants. The equity awards have a maximum term of 7 years at an exercise price of not less than 100 % of the fair market value of the Company's common stock on the date the equity award is granted. The 2016 Plan replaced the 2007 Plan. The 2016 Plan provides for the grant of awards in the form of stock options, stock appreciation rights, restricted stock units (“RSUs”), the vesting of which may be performance-based or service-based, and other rights and benefits. Each RSU issued reduces the number of shares of the Company’s common stock available for grant under the 2016 Plan by two shares. There were no significant modifications to the 2016 Plan or awards classified as liabilities in the year ended December 31, 2025. For the years ended December 31, 2025, 2024 and 2023, the share-based compensation expense was $ 11.2 million, $ 9.5 million and $ 8.3 million, respectively, before provision for income taxes. The Company recorded a tax benefit of approximately $ 3.0 million, $ 2.6 million and $ 2.2 million, respectively, related to the aforementioned share-based compensation expenses. There was no capitalized share-based compensation expense in the years ended December 31, 2025, 2024 and 2023. Restricted Stock Units The following table summarizes the activity of the Company’s RSUs, which includes service-based and performance-based awards, for the three years ended December 31, 2025: Weighted- Aggregate average intrinsic Number grant date value of shares fair value (in millions) Balance at December 31, 2022 187,408 76.74 RSUs granted 92,320 103.56 RSUs vested ( 86,402 ) 50.98 RSUs cancelled/forfeited/expired ( 21,649 ) 82.69 Balance at December 31, 2023 171,677 92.18 RSUs granted 101,340 114.64 RSUs vested ( 90,070 ) 85.14 RSUs cancelled/forfeited/expired ( 1,913 ) 95.33 Balance at December 31, 2024 181,034 108.05 RSUs granted 134,480 117.92 RSUs vested ( 105,988 ) 96.22 RSUs cancelled/forfeited/expired ( 5,247 ) 96.76 Balance at December 31, 2025 204,279 $ 120.75 $ 21.4 Performance-based RSUs issued prior to 2018 vest over five years , with 60 % of the shares immediately vesting after three years when the performance criteria has been determined to have been met and 20 % of the remaining shares vesting annually at the anniversary of the performance determination date, subject to continuous employment of the participant. The performance-based RSU grants issued in 2018 and thereafter vest after three years with 100 % of the shares vesting immediately when performance criteria has been determined to have been met. There were 80,600 performance-based RSUs expected to vest as of December 31, 2025. Service based RSUs issued to the Company’s directors generally vest over twelve to fourteen months . Service based RSUs issued to the Company’s management vest over three years. There were 123,679 service-based RSUs expected to vest as of December 31, 2025. No forfeitures are currently expected. The total fair value of RSUs that vested during the years ended December 31, 2025, 2024 and 2023 based on the weighted average grant date values was $ 13.2 million, $ 11.1 million and $ 8.6 million, respectively. Share-based compensation expense for RSUs for the years ended December 31, 2025, 2024 and 2023 was $ 11.2 million, $ 9.5 million and $ 8.3 million, respectively. As of December 31, 2025, the total unrecognized compensation expense related to unvested RSUs was $ 13.4 million and is expected to be recognized over a weighted-average period of 1.4 years. - 80 - Stock Options As of December 31, 2025, no shares were outstanding under the 2016 Plan, and no options had been issued to the Company's non-employee advisors. Additionally, 670,546 shares remained available for issuance under the stock plans. As of December 31, 2024, all stock options granted in previous years were either exercised, cancelled, forfeited or expired. A summary of the Company’s option activity and related information for the years ended December 31, 2024 and 2023 was as follows: Number of options Weighted- average price Weighted- average remaining contractual term (in years) Aggregate intrinsic value (in millions) Balance at December 31, 2022 139,350 33.59 Options granted — — Options exercised ( 139,110 ) 33.51 Options cancelled/forfeited/expired — — Balance at December 31, 2023 240 34.57 Options granted — — Options exercised ( 240 ) 34.57 Options cancelled/forfeited/expired — — Balance at December 31, 2024 — $ — — $ — Exercisable at December 31, 2024 — $ — — $ — Expected to vest after December 31, 2024 — $ — — $ — The intrinsic value of stock options at any point in time is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock. The aggregate intrinsic value of options exercised and sold under the Company’s stock option plans was less than $ 0.1 million and $ 9.4 million for the years ended December 31, 2024 and 2023, respectively, determined as of the date of option exercise. As of December 31, 2025, there was no unrecognized compensation cost related to unvested share-based compensation option arrangements granted under the Company’s stock plans. The Company utilizes the Black-Scholes option-pricing model to estimate the fair value of share-based compensation at the date of grant, which requires the use of accounting judgment and financial estimates, including estimates of the expected term option holders will retain their vested stock options before exercising them, the estimated volatility of the Company’s stock price over the expected term and the expected number of options that will be forfeited prior to the completion of their vesting requirements. Application of alternative assumptions could produce significantly different estimates of the fair value of share-based compensation amounts recognized in the Consolidated Statements of Income. No options were granted in the years ended December 31, 2025, 2024 and 2023. Employee Stock Ownership and 401(k) Plans The McGrath RentCorp Employee Stock Ownership and 401(k) Plan (the “KSOP”) provides that each participant may annually contribute an elected percentage of his or her salary, not to exceed the statutory limit. Each employee who has at least two months of service with the Company and is 21 years or older, is eligible to participate in the KSOP. The Company, at its discretion, may make matching contributions. Contributions are expensed in the year approved by the Board of Directors. Dividends on the Company’s stock held by the KSOP are treated as ordinary dividends and, in accordance with existing tax laws, are deducted by the Company in the year paid. For the year ended December 31, 2025 dividends deducted by the Company were $ 0.5 million, which resulted in a tax benefit of approximately $ 0.1 million in 2025. At December 31, 2025, the KSOP held 231,507 shares, o r 1 % of the Company’s total common shares outstanding. These shares are included in basic and diluted earnings per share calculations. NOTE 11. SHAREHOLDERS’ EQUITY 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 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 - 81 - "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 of common stock repurchased during the twelve months ended December 31, 2025 and 2024. As of December 31, 2025, 2,000,000 shares remain authorized for repurchase under the Repurchase Plan. NOTE 12. COMMITMENTS AND CONTINGENCIES The Company leases certain facilities under various operating leases. Most of the lease agreements provide the Company with the option of renewing its lease at the end of the lease term, at the fair rental value. In most cases, management expects that in the normal course of business, facility leases will be renewed or replaced by other leases. Minimum payments under these leases, exclusive of property taxes and insurance, was as follows: (in thousands) Year Ended December 31, 2026 $ 4,696 2027 3,331 2028 2,156 2029 1,090 2030 505 Thereafter 664 $ 12,442 Facility rent expense was $ 9.3 million in 2025, $ 9.0 million in 2024 and $ 10.8 million in 2023. The Company is involved in various lawsuits and routine claims arising out of the normal course of its business. The Company maintains insurance coverage for its operations and employees with appropriate aggregate, per occurrence and deductible limits as the Company reasonably determines necessary or prudent with current operations and historical experience. The major policies include coverage for property, general liability, auto, directors and officers, health, and workers’ compensation insurances. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Company reviews these provisions at least quarterly and adjusts these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Litigation is inherently unpredictable and is subject to significant uncertainties, some of which are beyond the Company’s control. In the opinion of management, there was not at least a reasonable possibility that the ultimate amount of liability not covered by insurance, if any, under any pending litigation and claims, individually or in the aggregate, will have a material adverse effect on the financial position or operating results of the Company. The Company’s health plans are self-funded high deductible plans with annual stop-loss insurance for protection against payments that exceed thresholds on a per claim basis and in the aggregate. The Company records an expense when claim payments are made and accrues for the portion of claims incurred, but not yet paid at period end. The Company makes these accruals based upon a combination of historical claim payments, loss development experience and actuarial estimates. A high degree of judgment is required in developing the underlying assumptions and the resulting amounts to be accrued. In addition, our assumptions will change as the Company’s loss experience develops. All of these factors have the potential to impact the amounts previously accrued and the Company may be required to increase or decrease the amounts previously accrued. At December 31, 2025 and 2024, accruals for the Company’s self-funded high deductible health plans were $ 1.9 million and $ 1.7 million, respectively. NOTE 13. INVENTORIES The following table presents the carrying value of inventories: (dollar amounts in thousands) December 31, December 31, 2025 2024 Raw materials $ 3,904 $ 3,380 Work-in-process 4,123 10,924 Total inventories $ 8,027 $ 14,304 - 82 - NOTE 14. GOODWILL AND INTANGIBLE ASSETS There were no changes in the carrying amount of goodwill during the year ended December 31, 2024. Changes in the carrying amount of goodwill during 2025 were as follows: (dollar amounts in thousands) Mobile Modular Portable Storage Enviroplex Total Balance at December 31, 2024 $ 315,290 $ 6,136 $ 1,798 $ 323,224 Goodwill acquired through business combinations 4,284 5,076 — 9,360 Balance at December 31, 2025 $ 319,574 $ 11,212 $ 1,798 $ 332,584 Intangible assets from continuing operations consisted of the following: (dollar amounts in thousands) Estimated useful life in years Average remaining life in years Cost Accumulated amortization Net book value December 31, 2025 Customer relationships 6 to 11 6.1 $ 75,734 $( 33,243 ) $ 42,491 Non-compete agreements 5 2.1 10,806 ( 7,351 ) 3,455 Trade name 0.75 to 8 3.3 2,000 ( 1,512 ) 488 Total amortizing 88,540 ( 42,106 ) 46,434 Trade name - non-amortizing Indefinite 171 — 171 Total $ 88,711 $( 42,106 ) $ 46,605 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 Intangible assets with finite useful lives are amortized over their respective useful lives. Amortization expense in the years ended December 31, 2025, 2024 and 2023 was $ 10.5 million, $ 10.3 million and $ 10.7 million, respectively. Based on the carrying values at December 31, 2025 and assuming no subsequent impairment of the underlying assets, the annual amortization is expected to be $ 10.2 million in 2026, $ 10.0 million in 2027, $ 8.6 million in 2028, $ 5.1 million in 2029, $ 3.3 million in 2030 and $ 9.2 million for the years thereafter. NOTE 15. RELATED PARTY TRANSACTIONS There were no significant related party transactions in the years ended December 31, 2025, 2024 and 2023, or amounts owed to related parties at such dates. NOTE 16. 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. - 83 - 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 from continuing operations for the years ended December 31, 2025, 2024 and 2023, for the Company’s reportable segments is shown in the following tables: (dollar amounts in thousands) Mobile Modular Portable Storage TRS- RenTelco Enviroplex 1 Consolidated Year Ended December 31, 2025 Revenues Rental revenues $ 326,919 $ 67,593 $ 109,406 $ — $ 503,918 Rental related services revenues 141,662 16,453 3,607 — 161,722 Sales 170,668 7,779 33,349 57,400 269,196 Other 5,879 989 2,531 — 9,399 Total revenues 645,128 92,814 148,893 57,400 944,235 Costs of Revenues Depreciation of rental equipment 43,206 4,196 39,535 — 86,937 Rental related services 91,262 17,763 3,001 — 112,026 Other 88,122 7,361 22,826 — 118,309 Costs of sales 113,058 4,842 15,283 38,804 171,987 Total costs of revenues 335,648 34,162 80,645 38,804 489,259 Gross profit 309,480 58,652 68,248 18,596 454,976 Significant Segment Expenses 3 Wages and benefits 58,733 14,242 11,830 5,552 90,357 Depreciation and amortization 14,409 1,725 53 418 16,605 Marketing and administrative expenses 18,331 6,706 5,441 2,440 32,918 Allocated corporate services 4 50,292 7,313 12,001 — 69,606 Other segment items 5 1,046 589 232 — 1,867 Total expenses 142,811 30,575 29,558 8,410 211,353 Income from operations 166,669 28,077 38,690 10,186 243,623 Interest expense (income) allocation 24,990 3,603 4,611 ( 2,582 ) 30,622 Foreign currency exchange gain — — ( 80 ) — ( 80 ) Income before provision for income taxes 141,679 24,474 34,159 12,768 213,081 Provision for income taxes 37,834 6,532 9,046 3,361 56,773 Income from continuing operations $ 103,845 $ 17,942 $ 25,113 $ 9,407 $ 156,308 Other Selected Information Rental equipment acquisitions $ 100,363 $ 4,584 $ 43,904 — $ 148,851 Accounts receivable, net (period end) $ 182,540 $ 11,299 $ 26,877 $ 11,149 $ 231,865 Rental equipment, at cost (period end) $ 1,485,794 $ 245,141 $ 337,100 — $ 2,068,035 Rental equipment, net book value (period end) $ 1,098,720 $ 219,038 $ 103,140 — $ 1,420,898 Utilization (period end) 2 70.7 % 59.0 % 63.2 % Average utilization 2 73.0 % 60.8 % 63.8 % - 84 - (dollar amounts in thousands) Mobile Modular Portable Storage TRS- RenTelco Enviroplex 1 Consolidated Year Ended December 31, 2024 Revenues Rental revenues $ 318,149 $ 69,983 $ 101,797 $ — $ 489,929 Rental related services revenues 127,589 17,702 3,207 — 148,498 Sales 183,234 5,695 27,531 45,830 262,290 Other 6,394 1,117 2,714 — 10,225 Total revenues 635,366 94,497 135,249 45,830 910,942 Costs of Revenues Depreciation of rental equipment 40,399 3,982 43,886 — 88,267 Rental related services 83,547 17,267 2,605 — 103,419 Other 83,023 5,816 20,277 — 109,116 Costs of sales 124,886 3,551 12,426 33,862 174,725 Total costs of revenues 331,855 30,616 79,194 33,862 475,527 Gross profit 303,511 63,881 56,055 11,968 435,415 Significant Segment Expenses 3 Wages and benefits 57,741 13,812 10,368 4,859 86,781 Depreciation and amortization 13,712 1,432 107 383 15,634 Marketing and administrative expenses 17,276 6,102 5,342 2,323 31,043 Allocated corporate services 4 47,146 7,212 10,716 — 65,074 Other segment items 5 795 639 467 — 1,901 Total expenses 136,670 29,197 27,000 7,565 200,432 Other income, net ( 6,220 ) ( 1,319 ) ( 1,742 ) — ( 9,281 ) Income from operations 173,061 36,003 30,797 4,403 244,264 Interest expense (income) allocation 37,087 5,243 7,407 ( 2,496 ) 47,241 Foreign currency exchange loss — — 215 — 215 Income before provision for income taxes 135,974 30,760 23,175 6,899 196,808 Provision for income taxes 23,320 6,403 2,424 1,771 33,918 Income from continuing operations $ 112,654 $ 24,357 $ 20,751 $ 5,128 $ 162,890 Reconciliation of Segment Profit Total segment gross profit $ 435,415 Segment operating expenses, net 200,432 Other income, net ( 9,281 ) Interest expense allocation 47,241 Foreign currency exchange loss 215 Gain on merger termination from WillScot Mobile Mini (Note 1) ( 180,000 ) WillScot Mobile Mini transaction costs 63,159 Income before provision for income taxes 313,649 Provision for income taxes 81,922 Income from continuing operations $ 231,727 Other Selected Information Rental equipment acquisitions $ 154,236 $ 8,106 $ 17,629 — $ 179,971 Accounts receivable, net (period end) $ 174,598 $ 10,455 $ 21,635 $ 12,654 $ 219,342 Rental equipment, at cost (period end) $ 1,414,367 $ 240,846 $ 343,982 — $ 1,999,195 Rental equipment, net book value (period end) $ 1,060,364 $ 218,493 $ 108,802 — $ 1,387,659 Utilization (period end) 2 75.1 % 59.8 % 58.6 % Average utilization 2 77.5 % 64.9 % 57.3 % - 85 - (dollar amounts in thousands) Mobile Modular Portable Storage TRS- RenTelco Enviroplex 1 Consolidated Year Ended December 31, 2023 Revenues Rental revenues $ 285,553 $ 74,536 $ 114,247 $ — $ 474,336 Rental related services revenues 114,511 20,510 3,139 — 138,160 Sales 155,267 4,587 27,119 20,192 207,165 Other 6,905 1,504 3,772 — 12,181 Total revenues 562,236 101,137 148,277 20,192 831,842 Costs of Revenues Depreciation of rental equipment 36,921 3,514 48,477 — 88,912 Rental related services 75,390 18,568 2,670 — 96,628 Other 86,983 7,317 20,642 — 114,942 Costs of sales 105,021 2,858 13,884 15,964 137,727 Total costs of revenues 304,315 32,257 85,673 15,964 438,209 Gross profit 257,921 68,880 62,604 4,228 393,633 Significant Segment Expenses 3 Wages and benefits 55,795 13,607 10,074 3,901 83,376 Depreciation and amortization 13,511 1,613 108 337 15,570 Marketing and administrative expenses 15,935 5,866 5,398 2,228 29,427 Allocated corporate services 4 44,225 9,711 14,748 — 68,684 Other segment items 5 9,109 740 634 — 10,482 Total expenses 138,575 31,537 30,962 6,466 207,539 Other income, net ( 2,329 ) ( 457 ) ( 832 ) — ( 3,618 ) Income (loss) from operations 121,676 37,800 32,474 ( 2,238 ) 189,713 Interest expense (income) allocation 29,724 4,950 8,146 ( 2,260 ) 40,560 Foreign currency exchange gain — — ( 310 ) — ( 310 ) Income before provision for income taxes 91,952 32,850 24,638 22 149,462 Provision (benefit) for income taxes 23,379 8,472 5,899 ( 140 ) 37,610 Income from continuing operations $ 68,573 $ 24,378 $ 18,739 $ 162 $ 111,852 Reconciliation of Segment Profit Total segment gross profit $ 393,633 Segment operating expenses, net 207,539 Other income, net ( 3,618 ) Interest expense allocation 40,560 Foreign currency exchange gain ` ( 310 ) Income from continuing operations before provision for income taxes 149,462 Provision for income taxes 37,610 Income from continuing operations $ 111,852 Other Selected Information Rental equipment acquisitions $ 176,200 $ 27,967 $ 28,945 — $ 233,112 Accounts receivable, net (period end) $ 175,360 $ 16,057 $ 25,511 $ 10,440 $ 227,368 Rental equipment, at cost (period end) $ 1,291,093 $ 236,123 $ 377,587 — $ 1,904,803 Rental equipment, net book value (period end) $ 967,712 $ 217,315 $ 144,296 — $ 1,329,323 Utilization (period end) 2 79.4 % 71.5 % 55.9 % Average utilization 2 79.7 % 77.3 % 58.9 % 1. Gross Enviroplex sales revenues were $ 57,400 , $ 45,832 and $ 22,615 in 2025, 2024 and 2023, respectively. There were no inter-segment sales to Mobile Modular in 2025. Inter-segment sales to Mobile Modular in 2024 and 2023 were $ 2 and $ 2,423 , respectively, which have been eliminated 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. - 86 - No single customer accounted for more than 10% of total revenues during 2025, 2024 and 2023. Revenue from foreign country customers accounted for 2 %, 2 % and 3 % of the Company’s total revenues for years 2025, 2024, and 2023, respectively. Mobile Modular purchased 27 %, 18 % and 30 % of its modular units from one manufacturer during 2025, 2024 and 2023, respectively. TRS-RenTelco purchased 34 %, 35 % and 41 % of its electronic test equipment from one manufacturer during 2025, 2024, and 2023, respectively. There were no vendor or supplier concentrations for Portable Storage and Enviroplex during years 2025, 2024 and 2023. - 87 - ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.