What changed in this filing

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Item 1. Financial Statements

2026-07-29 compared with 2026-04-29 · 95 added, 46 removed, 369 unchanged (28% of the section changed)

4 unchanged sentences

Results of review of interim financial statements

We have reviewed the accompanying condensed consolidated balance sheet of McGrath RentCorp (a California corporation) and subsidiaries (the “Company”) and the related condensed consolidated statements of income, shareholders’ equity, and cash flows as of March 31, 2026 and for the three-month periods ended March 31, 2026 and 2025, and the related notes (collectively referred to as the “interim financial statements”).

We have reviewed the accompanying condensed consolidated balance sheet of McGrath RentCorp (a California corporation) and subsidiaries (the “Company”) and the related condensed consolidated statements of income, shareholders’ equity, and cash flows as of June 30, 2026 and for the three-month and six-month periods ended June 30, 2026 and 2025, and the related notes (collectively referred to as the “interim financial statements”).

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

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San Francisco, California

April 29, 2026

July 29, 2026

MCGRATH RENTCORP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands, except per share amounts)

10 unchanged sentences

Selling and administrative expenses

Other income, net

Income from operations

2 unchanged sentences

Income before provision for income taxes

Provision for income taxes from continuing operations

Provision for income taxes

Earnings per share:

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(in thousands)

Accounts receivable, net of allowance for credit losses of $ 2,700 at March 31, 2026 and $ 2,866 at December 31, 2025

Accounts receivable, net of allowance for credit losses of $ 2,700 at June 30, 2026 and $ 2,866 at December 31, 2025

Rental equipment, at cost:

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

Issued and outstanding - 24,557 shares as of March 31, 2026 and 24,612 shares as of December 31, 2025

Issued and outstanding - 24,426 shares as of June 30, 2026 and 24,612 shares as of December 31, 2025

Retained earnings

13 unchanged sentences

Dividends accrued of $ 0.495 per share

Other comprehensive income

Balance at March 31, 2026

Share-based compensation

Common stock issued under stock plans, net of shares

withheld for employee taxes

Common stock repurchased

Taxes paid related to net share settlement of stock awards

Dividends accrued of $ 0.495 per share

Balance at June 30, 2026

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

7 unchanged sentences

Dividends accrued of $ 0.485 per share

Other comprehensive income

Balance at March 31, 2025

Share-based compensation

Common stock issued under stock plans, net of shares

withheld for employee taxes

Taxes paid related to net share settlement of stock awards

Dividends accrued of $ 0.485 per share

Balance at June 30, 2025

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

1 unchanged sentence

CONDENSED Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

6 unchanged sentences

Share-based compensation

Gain on sale of property, plant and equipment

Gain on sale of used rental equipment

10 unchanged sentences

Purchases of property, plant and equipment

Cash paid for acquisition of businesses, net of cash received

Proceeds from sales of used rental equipment

Proceeds from sales of property, plant and equipment

Net cash used in investing activities

1 unchanged sentence

Net borrowings (payments) under bank lines of credit

Principal payment of Series E senior notes

Repurchase of common stock

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Rental equipment acquisitions, not yet paid

Business acquisition payments withheld

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

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2026

June 30, 2026

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The condensed consolidated financial statements for the three months ended March 31, 2026 and 2025 have not been audited, but in the opinion of management, all adjustments (consisting of normal recurring accruals, consolidating and eliminating entries) necessary for the fair presentation of the consolidated financial position, results of operations and cash flows of McGrath RentCorp (the “Company”) have been made.

The condensed consolidated financial statements for the six months ended June 30, 2026 and 2025 have not been audited, but in the opinion of management, all adjustments (consisting of normal recurring accruals, consolidating and eliminating entries) necessary for the fair presentation of the consolidated financial position, results of operations and cash flows of McGrath RentCorp (the “Company”) have been made.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to those rules and regulations.

The consolidated results for the three months ended March 31, 2026, should not be considered as necessarily indicative of the consolidated results for the entire fiscal year.

The consolidated results for the three and six months ended June 30, 2026, should not be considered as necessarily indicative of the consolidated results for the entire fiscal year.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K, filed with the SEC on February 25, 2026 for the year ended December 31, 2025 (the “2025 Annual Report”).

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BUSINESS COMBINATIONS

During the quarter ended June 30, 2026, the Company completed the acquisition of a regional provider of temporary and permanent modular space solutions for a total purchase price of $ 11.3 million, subject to a holdback payment of $ 1.2 million.

The preliminary purchase price allocation was $ 7.0 million to the fair value of rental equipment acquired, $ 0.2 million to intangible assets, $ 4.8 million to goodwill, less acquired net working capital and deferred income taxes.

The acquisition expanded the Mobile Modular operations in the mid-west region of the United States.

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

Incremental transaction costs totaled $ 0.2 million for the six months ended June 30, 2026.

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.

1 unchanged sentence

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.

These acquisitions were accounted for as a purchase of a “business” in accordance with criteria in ASC 805, using the purchase method of accounting.

Incremental transaction costs totaled $ 0.5 million for the year ended December 31, 2025.

13 unchanged sentences

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 $ 43.2 million and $ 34.3 million at March 31, 2026 and December 31, 2025, respectively.

Sales revenues totaling $ 10.5 million were recognized during the three months ended March 31, 2026, which were included in the contract liability balance at December 31, 2025.

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 $ 9.8 million and $ 10.9 million at March 31, 2026 and December 31, 2025, respectively.

The Company did not recognize any material contract asset impairments during the periods ended March 31, 2026 and December 31, 2025, respectively.

The contract liabilities included in Deferred income on the Company’s Consolidated Balance Sheets totaled $ 58.8 million and $ 34.3 million at June 30, 2026 and December 31, 2025, respectively.

Sales revenues totaling $ 5.0 million and $ 15.5 million were recognized during the three and six months ended June 30, 2026, which were included in the contract liability balance at December 31, 2025.

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 $ 9.9 million and $ 10.9 million at June 30, 2026 and December 31, 2025, respectively.

The Company did not recognize any material contract asset impairments during the periods ended June 30, 2026 and December 31, 2025, respectively.

The Company has uncompleted contracts with customers that have unsatisfied or partially satisfied performance obligations.

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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 three months ended March 31, 2026, $ 32.1 million of revenue was recognized for sales and non-lease services transferred at a point in time and $ 12.0 million of revenue was recognized for sales and non-lease services transferred over time.

For the three and six month periods ended June, 2026, $ 45.5 million and $ 77.5 million of revenue was recognized for sales and non-lease services transferred at a point in time, respectively, and $ 12.9 million and $ 25.0 million of revenue was recognized for sales and non-lease services transferred over time, respectively.

The Company generally rents and sells to customers on 30 day payment terms.

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For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a basis which results in a constant rate of return on the unrecovered lease investment.

As of the three months ended March 31, 2026, the Company’s future minimum lease payments to be received under non-cancelable finance leases were $ 5.7 million.

As of the six months ended June 30, 2026, the Company’s future minimum lease payments to be received under non-cancelable finance leases were $ 5.1 million.

Of the total investment in sales-type leases, future minimum lease payments are expected to be $ 1.8 million for the remainder of 2026, $ 1.3 million in 2027, $ 1.1 million in 2028, $ 0.9 million in 2029 and $ 0.1 million in 2030.

The Company’s assessment of current expected losses on these receivables was immaterial and therefore no credit loss expense was provided as of the three months ended March 31, 2026.

The Company’s assessment of current expected losses on these receivables was immaterial and therefore no credit loss expense was provided as of the six months ended June 30, 2026.

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

In the three months ended March 31, 2026, the Company’s lease revenues were $ 154.4 million, consisting of $ 153.7 million of operating lease revenues and $ 0.7 million of finance lease revenues.

In the three and six months ended June 30, 2026, the Company’s lease revenues were $ 162.7 million and $ 317.1 million, consisting of $ 162.0 million and $ 315.7 million of operating lease revenues, respectively, and $ 0.7 million and $ 1.4 million of finance lease revenues, respectively.

The Company has entered into finance leases to finance certain equipment sales to customers.

1 unchanged sentence

For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a straight-line basis, which results in a constant rate of return on the unrecovered lease investment.

The Company’s finance lease revenues for the three months ended March 31, 2026, include $ 0.1 million of sales revenues and $ 0.2 million of interest income.

The Company’s finance lease revenues for the three and six months ended June 30, 2026, include $ 0.5 million and $ 1.0 million of sales revenues, respectively, and $ 0.2 million and $ 0.4 million of interest income, respectively.

Site related services revenues outside of the modular building such as grading, drainage, landscaping and paving are considered non-lease.

7 unchanged sentences

Sales taxes charged to customers are reported on a net basis and are excluded from revenues and expenses.

The following table disaggregates the Company’s revenues by lease (within the scope of Topic 842) and non-lease revenues (within the scope of Topic 606) and the underlying service provided for the three months ended March 31, 2026 and 2025:

(in thousands)

Portable Storage

Three Months Ended March 31,

Three Months Ended June 30,

Rental related services

4 unchanged sentences

Total revenues

Six Months Ended June 30,

Rental related services

Total non-lease

Total revenues

Rental related services

Total non-lease

Total revenues

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.

9 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands)

4 unchanged sentences

calculating diluted earnings per share

There were 153,995 and 86,219 anti-dilutive securities excluded from the computation of diluted earnings per share for the three months ended March 31, 2026, and 2025, respectively.

There were 54,866 and 85,512 anti-dilutive securities excluded from the computation of diluted earnings per share for the six months ended June 30, 2026, and 2025, respectively.

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

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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.

The following table presents share repurchase activities during the three months ended March 31, 2026 and 2025.

As of March 31, 2026, 1,886,409 shares remained authorized for repurchase under the Repurchase Plan.

The following table presents share repurchase activities during the three and six months ended June 30, 2026 and 2025.

As of June 30, 2026, 1,750,000 shares remained authorized for repurchase under the Repurchase Plan.

Three Months Ended

Six Months Ended

(in thousands, except share and per share amounts)

3 unchanged sentences

A one percent excise tax is imposed on "net repurchases" (certain purchases minus certain issuances) of common stock.

The aggregate repurchase price and average price per repurchased share excludes excise tax, which totaled $ 0.1 million for the three months ended March 31, 2026.

The aggregate repurchase price and average price per repurchased share excludes excise tax, which totaled $ 0.2 million and $ 0.3 million for the three and six months ended June 30, 2026, respectively.

The following table presents the carrying value of inventories:

9 unchanged sentences

Net book value

March 31, 2026

June 30, 2026

Customer relationships

7 unchanged sentences

Trade name - non-amortizing

Goodwill consisted of the following:

(dollar amounts in thousands)

Mobile Modular

Portable Storage

Balance at December 31, 2025

Goodwill acquired through business combinations

Balance at June 30, 2026

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.

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The Company last conducted a qualitative analysis of its goodwill and intangible assets in the fourth quarter 2025, with no indicators of impairment.

In addition, no impairment triggering events occurred during the three months ended March 31, 2026, and there were no changes to the carrying value of goodwill during this period.

In addition, no impairment triggering events occurred during the three and six months ended June 30, 2026.

For the six months ended June 30, 2026, goodwill increased $ 4.8 million from the acquisition of a regional provider of temporary and permanent modular space solutions.

Determining fair value of a reporting unit is judgmental and involves the use of significant estimates and assumptions.

1 unchanged sentence

Intangible assets with finite useful lives are amortized over their respective useful lives.

Amortization expense incurred during the three months ended March 31, 2026 and 2025, was $ 2.6 million in both periods.

Based on the carrying values at March 31, 2026, and assuming no subsequent impairment of the underlying assets, the amortization expense is expected to be $ 7.5 million for the remainder of fiscal year 2026, $ 10.0 million in 2027, $ 8.6 million in 2028, $ 5.1 million in 2029, $ 3.3 million in 2030 and $ 3.1 million in 2031.

Amortization expense incurred during the six months ended June 30, 2026 and 2025, was $ 5.2 million for both periods.

Based on the carrying values at June 30, 2026, and assuming no subsequent impairment of the underlying assets, the amortization expense is expected to be $ 5.0 million for the remainder of fiscal year 2026, $ 10.0 million in 2027, $ 8.7 million in 2028, $ 5.1 million in 2029, $ 3.4 million in 2030 and $ 3.1 million in 2031.

SEGMENT REPORTING

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The Company does not report total assets by business segment.

Summarized financial information for the three months ended March 31, 2026 and 2025, for the Company’s reportable segments is shown in the following tables:

Summarized financial information for the six months ended June 30, 2026 and 2025, for the Company’s reportable segments is shown in the following tables:

(dollar amounts in thousands)

Portable Storage

Three Months Ended March 31,

Six Months Ended June 30,

Rental revenues

13 unchanged sentences

Total expenses

Income (loss) from operations

Income from operations

Interest expense (income) allocation

Foreign currency exchange loss

Income (loss) before provision for income taxes

Provision (benefit) for income taxes

Income before provision for income taxes

Provision for income taxes

Net income (loss)

Reconciliation of Segment Profit

Total segment gross profit

Segment operating expenses, net

Other income, net 6

Interest expense allocation

Foreign currency exchange loss

Provision for income taxes 6

Income before provision for income taxes

Other Selected Information

7 unchanged sentences

Portable Storage

Three Months Ended March 31,

Six Months Ended June 30,

Rental revenues

24 unchanged sentences

Utilization (period end) 2

Gross Enviroplex sales revenues were $ 3,504 and $ 7,213 for the three months ended March 31, 2026 and 2025, respectively.

There were no inter-segment sales to Mobile Modular in the three months ended March 31, 2026 and 2025, which required elimination in consolidation.

Average utilization 2

Gross Enviroplex sales revenues were $ 11,025 and $ 27,079 for the six months ended June 30, 2026 and 2025, respectively.

There were $ 2,905 of inter-segment sales to Mobile Modular in the six months ended June 30, 2026, which required elimination in consolidation.

For the comparable 2025 period, there were no inter-segment sales which required elimination in consolidation.

Utilization is calculated each month by dividing the cost of rental equipment on rent by the total cost of rental equipment excluding new equipment inventory and accessory equipment.

4 unchanged sentences

Other segment items for each reportable segment is primarily comprised of credit losses and acquisition related transaction costs.

No single customer accounted for more than 10 % of total revenues for the three months ended March 31, 2026 and 2025.

During the six months ended June 30, 2026, the Company sold a corporate property which resulted in a net gain on sale of $ 1,814 , excluding taxes.

The net gain on sale and the provision for income taxes attributed to the sale totaling $ 488 , was not allocated to the Company's operating segments.

No single customer accounted for more than 10% of total revenues for the six months ended June 30, 2026 and 2025.

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

SUBSEQUENT EVENT

On April 1, 2026, the Company completed the acquisition of a regional provider of temporary modular space solutions for $ 11.4 million, subject to a holdback payment of $ 1.3 million.

The acquisition expanded the Mobile Modular operations in the mid-west region of the United States.

This acquisition will be accounted for as the purchase of a “business” in accordance with criteria in ASC 805, Business Combinations , using the purchase method of accounting.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements