What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-07-29 compared with 2026-04-29 · 271 added, 93 removed, 300 unchanged (55% of the section changed)

14 unchanged sentences

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

In the three months ended March 31, 2026, Mobile Modular, Portable Storage, TRS-RenTelco and Enviroplex contributed 65%, 11%, 25% and negative 1% of the Company’s income before provision for taxes (the equivalent of “pretax income”), respectively, compared to 66%, 15%, 17% and 2% for the same period in 2025.

In the six months ended June 30, 2026, Mobile Modular, Portable Storage, TRS-RenTelco and Enviroplex contributed 63%, 10%, 27% and less than 1% of the Company’s income before provision for taxes (the equivalent of “pretax income”), respectively, compared to 63%, 14%, 16% and 7% for the same period in 2025.

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

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Electronic test equipment revenues are primarily affected by the business activity within these industries related to research and development, manufacturing, and communication infrastructure installation and maintenance.

The Company’s rental operations include rental and rental related service revenues which comprised approximately 82% and 79% of consolidated revenues in the three months ended March 31, 2026 and 2025, respectively.

Of the total rental operations revenues for the three months ended March 31, 2026, Mobile Modular, Portable Storage and TRS-RenTelco comprised 69%, 12% and 19%, respectively, compared to 70%, 13% and 17%, respectively, in the same period of 2025.

The Company’s rental operations include rental and rental related service revenues which comprised approximately 80% and 74% of consolidated revenues in the six months ended June 30, 2026 and 2025, respectively.

Of the total rental operations revenues for the six months ended June 30, 2026, Mobile Modular, Portable Storage and TRS-RenTelco comprised 69%, 12% and 19%, respectively, compared to 70%, 13% and 17%, respectively, in the same period of 2025.

The Company’s direct costs of rental operations include depreciation of rental equipment, rental related service costs, impairment of rental equipment (if applicable), and other direct costs of rental operations (which include direct labor, supplies, repairs, insurance, property taxes, license fees, cost of sub-rentals and amortization of certain lease costs).

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In addition, Enviroplex sells new modular buildings used primarily as classrooms in California.

For the three months ended March 31, 2026 and 2025, sales and other revenues of modular, container and electronic test equipment comprised approximately 18% and 21% of the Company’s consolidated revenues, respectively.

Of the total sales and other revenues from operations for the three months ended March 31, 2026 and 2025, Mobile Modular and Enviroplex together comprised 71% and 75%, respectively, Portable Storage comprised 5% and 4%, respectively, and TRS-RenTelco comprised 24% and 21%, respectively.

For the six months ended June 30, 2026 and 2025, sales and other revenues of modular, container and electronic test equipment comprised approximately 20% and 26% of the Company’s consolidated revenues, respectively.

Of the total sales and other revenues from operations for the six months ended June 30, 2026 and 2025, Mobile Modular and Enviroplex together comprised 74% and 82%, respectively, Portable Storage comprised 5% and 3%, respectively, and TRS-RenTelco comprised 21% and 15%, respectively.

The Company’s cost of sales includes the carrying value of the equipment sold and the direct costs associated with the equipment sold, such as delivery, installation, modifications and related site work.

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Recent Developments

On February 25, 2026, the Company announced that the Board of Directors declared a quarterly cash dividend of $0.495 per common share for the quarter ended March 31, 2026, an increase of 2% over the prior year’s comparable quarter.

Business Combination

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.

On June 3, 2026, the Company announced that the Board of Directors declared a quarterly cash dividend of $0.495 per common share for the quarter ended June 30, 2026, an increase of 2% over the prior year’s comparable quarter.

Business Outlook

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Results of Operations

Three Months Ended March 31, 2026 Compared to

Three Months Ended March 31, 2025

Consolidated revenues for the three months ended March 31, 2026, increased 2% to $198.5 million from $195.4 million for the same period in 2025.

Consolidated net income for the three months ended March 31, 2026, decreased 4% to $27.0 million from $28.2 million for the same period in 2025.

Earnings per diluted share for the three months ended March 31, 2026, decreased 4% to $1.10, from $1.15 for the same period in 2025.

The decrease in consolidated net income and earnings per diluted share during the period was primarily attributed to an increase in selling and administrative expenses and lower gross profit at Enviroplex, Mobile Modular and Portable Storage, partly offset by higher gross profit at TRS-RenTelco and lower interest expense incurred on outstanding debt obligations.

For the three months ended March 31, 2026, on a consolidated basis:

• Gross profit increased $0.5 million to $96.9 million in 2026.

Mobile Modular’s gross profit decreased $0.8 million, or 1%, primarily due to lower gross profit on rental and sales revenues, partly offset by an increase in gross profit on rental related services revenues.

Three Months Ended June 30, 2026 Compared to

Three Months Ended June 30, 2025

Consolidated revenues for the three months ended June 30, 2026, decreased 6% to $221.1 million from $235.6 million for the same period in 2025.

Consolidated net income for the three months ended June 30, 2026, decreased 6% to $33.7 million from $36.0 million for the same period in 2025.

Earnings per diluted share for the three months ended June 30, 2026, decreased 5% to $1.39, from $1.46 for the same period in 2025.

The decrease in consolidated net income and earnings per diluted share during the period was primarily attributed to lower gross profit at Enviroplex, Mobile Modular and Portable Storage, partly offset by higher gross profit at TRS-RenTelco, a $1.8 million gain on sale of a corporate property, and lower interest expense incurred on outstanding debt obligations.

For the three months ended June 30, 2026, on a consolidated basis:

• Gross profit decreased $2.8 million to $107.9 million in 2026.

Mobile Modular’s gross profit decreased $2.8 million, or 4%, primarily due to lower gross profit on sales and rental revenues, partly offset by an increase in gross profit on rental related services revenues.

Portable Storage's gross profit decreased $1.4 million, or 9%, primarily due to lower gross profit on rental operations revenues.

TRS-RenTelco’s gross profit increased $5.8 million, or 35%, primarily due to higher gross profit on rental and sales revenues.

Enviroplex’s gross profit decreased $1.4 million, due to lower sales revenues and gross margins in 2026.

• Selling and administrative expenses increased $2.6 million, or 5%, to $53.4 million, primarily attributed to $1.8 million higher employees' salaries and benefit costs and $0.8 million higher marketing and administrative expenses.

• Interest expense decreased $1.7 million, or 20%, to $6.5 million, which was primarily attributed to $47.3 million lower average debt levels of the Company and a lower effective interest rate in 2026 of 4.96%, compared to 5.70% for the same period in 2025.

Enviroplex’s gross profit decreased $4.5 million, due to lower sales revenues in 2026.

• Selling and administrative expenses increased $2.9 million, or 5%, to $56.4 million, primarily attributed to $1.9 million higher marketing and administrative expenses and $0.8 million higher employees' salaries and benefit costs.

• Other income, net, increased $1.8 million due to the gain on sale of a corporate property in 2026.

• Interest expense decreased $0.7 million, or 9%, to $7.1 million, which was primarily attributed to a lower effective interest rate in 2026 of 4.95%, compared to 5.56% for the same period in 2025, partly offset by $14.0 million higher average debt levels of the Company.

• Pre-tax income contribution by Mobile Modular, Portable Storage and TRS-RenTelco was 61%, 10% and 29%, respectively, compared to 61%, 13% and 16%, respectively, for the comparable 2025 period.

These results are discussed on a segment basis below.

Enviroplex pre-tax income contribution was negative 1% and 2% in 2026 and 2025, respectively.

• The provision for income taxes resulted in an effective tax rate of 26.7% and 24.6%, for the quarters ended March 31, 2026 and 2025, respectively.

Enviroplex pre-tax income contribution was less than 1% in 2026, compared to 10% in 2025.

The lower pre-tax income contribution from Enviroplex was primarily due to $15.3 million lower sales revenues in 2026.

• The provision for income taxes resulted in an effective tax rate of 27.0% and 27.3%, for the quarters ended June 30, 2026 and 2025, respectively.

• Adjusted EBITDA decreased $3.7 million, or 4%, to $82.8 million in 2026.

Mobile Modular

For the three months ended March 31, 2026, Mobile Modular’s total revenues increased $2.5 million, or 2%, to $134.4 million compared to the same period in 2025, primarily due to higher rental operations revenues, partly offset by lower sales and other revenues.

Higher gross profit on rental related services revenues and lower allocated interest expense, offset by lower gross profit on rental, and sales and other revenues, and higher selling and administrative expenses, resulted in a $0.9 million decrease in pre-tax income to $24.1 million for the three months ended March 31, 2026, from $25.0 million for the same period in 2025.

For the three months ended June 30, 2026, Mobile Modular’s total revenues decreased $5.6 million, or 4%, to $150.4 million compared to the same period in 2025, primarily due to lower sales revenues, partly offset by higher rental operations revenues.

Higher gross profit on rental related services revenues and lower allocated interest expense, offset by lower gross profit on sales, rental, and other revenues, and higher selling and administrative expenses, resulted in a $3.0 million decrease in pre-tax income to $27.0 million for the three months ended June 30, 2026, from $30.0 million for the same period in 2025.

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

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Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

Mobile Modular’s gross profit for the three months ended March 31, 2026, decreased $0.8 million, or 1%, to $64.7 million.

For the three months ended March 31, 2026, compared to the same period in 2025:

• Gross Profit on Rental Revenues – Rental revenues increased $2.9 million, or 4%, due to 1% higher average rental equipment on rent and 3% higher average monthly rental rates in 2026.

Mobile Modular’s gross profit for the three months ended June 30, 2026, decreased $2.8 million, or 4%, to $70.5 million.

For the three months ended June 30, 2026, compared to the same period in 2025:

• Gross Profit on Rental Revenues – Rental revenues increased $1.3 million, or 2%, due to 4% higher average rental equipment on rent, partly offset by 2% lower average monthly rental rates in 2026.

As a percentage of rental revenues, depreciation was 14% and 13% in 2026 and 2025, respectively, and other direct costs were 31% in 2026 and 29% in 2025, which resulted in gross margin percentages of 55% in 2026, compared to 58% in 2025.

The increased other direct costs in 2026 were primarily due to higher material and labor costs to prepare equipment for shipment.

The higher rental revenues and lower rental margins resulted in gross profit on rental revenues decreasing $1.8 million, or 4%, to $45.4 million in 2026.

• Gross Profit on Rental Related Services – Rental related services revenues increased $2.6 million, or 8%, compared to 2025.

The increase in rental related services revenues was primarily attributable to higher site related services revenues.

The increase in rental related services revenues and higher gross margin percentage of 36% in 2026, compared to 33% in 2025, resulted in rental related services gross profit increasing $1.3 million, or 13%, to $11.0 million in 2026.

• Gross Profit on Sales – Sales revenues decreased $1.6 million, or 7%, compared to 2025, due to lower new and used equipment sales.

The lower sales revenues and lower gross margin percentage of 31% in 2026, compared to 32% in 2025, resulted in gross profit on sales decreasing $0.6 million, or 8%, to $6.6 million.

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

The increase in rental related services revenues and comparable margin percentage of 36% in 2026, resulted in rental related services gross profit increasing $0.9 million, or 8%, to $12.7 million in 2026.

• Gross Profit on Sales – Sales revenues decreased $9.3 million, or 23%, compared to 2025, primarily due to lower new equipment sales.

The lower sales revenues and higher gross margin percentage of 36% in 2026, compared to 32% in 2025, resulted in gross profit on sales decreasing $1.8 million, or 14%, to $11.1 million.

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

however, these sales and related gross margins can fluctuate from quarter to quarter and year to year depending on customer requirements, the scope of work to be performed, equipment availability and funding.

For the three months ended March 31, 2026, selling and administrative expenses increased $1.2 million, or 3%, to $35.2 million.

The increase in selling and administrative expenses was primarily attributed to $0.4 million higher employees' salaries and benefit costs and $0.4 million higher allocated corporate services expense during the period.

For the three months ended June 30, 2026, selling and administrative expenses increased $0.7 million, or 2%, to $37.4 million.

The increase in selling and administrative expenses was primarily attributed to $1.1 million higher marketing and administrative expenses, partly offset by $0.3 million lower employees' salaries and benefit costs.

Portable Storage

For the three months ended March 31, 2026, Portable Storage’s total revenues increased $0.7 million, or 3%, to $21.9 million compared to the same period in 2025, primarily due to higher rental operations and sales revenues, partly offset by lower other revenues.

For the three months ended June 30, 2026, Portable Storage’s total revenues increased $0.2 million, or 1%, to $23.5 million compared to the same period in 2025, primarily due to higher rental related services and sales revenues, partly offset by lower rental and other revenues.

Lower gross profit on rental operations revenues and higher selling and administrative expenses, partly offset by higher gross profit on sales revenues and lower allocated interest expense, resulted in a decrease in pre-tax income of $2.2 million, or 34%, to $4.4 million in 2026.

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Portable Storage’s gross profit for the three months ended March 31, 2026, decreased $0.8 million, or 6%, to $13.1 million.

For the three months ended March 31, 2026, compared to the same period in 2025:

• Gross Profit on Rental Revenues – Rental revenues increased $0.2 million, or 1%, due to 1% higher average rental equipment on rent in 2026 and comparable average monthly rental rates.

As a percentage of rental revenues, depreciation was 7% and 6% in 2026 and 2025, respectively, and other direct costs were 13% and 9% in 2026 and 2025, respectively, which resulted in gross margin percentage of 80% in 2026 and 84% in 2025.

The higher rental revenues and lower rental margins resulted in gross profit on rental revenues decreasing $0.4 million, or 3%, to $13.1 million in 2026.

• Gross Profit on Rental Related Services – Rental related services revenues was $3.8 million, compared to $3.6 million during the same period in 2025.

The gross margin on rental related services revenues was negative 20% in 2026, compared to negative 8% in 2025.

Portable Storage’s gross profit for the three months ended June 30, 2026, decreased $1.4 million, or 9%, to $13.7 million.

For the three months ended June 30, 2026, compared to the same period in 2025:

• Gross Profit on Rental Revenues – Rental revenues decreased $0.1 million due to 1% lower average rental equipment on rent in 2026, partly offset by 1% higher average monthly rental rates.

As a percentage of rental revenues, depreciation was 7% and 6% in 2026 and 2025, respectively, and other direct costs were 13% and 11% in 2026 and 2025, respectively, which resulted in gross margin percentage of 80% and 83% in 2026 and 2025, respectively.

The lower rental revenues and lower rental margins resulted in gross profit on rental revenues decreasing $0.5 million, or 4%, to $13.5 million in 2026.

• Gross Profit on Rental Related Services – Rental related services revenues increased 3% to $4.5 million in 2026.

The gross margin on rental related services revenues was negative 18% in 2026, compared to 2% in 2025, primarily due to higher trucking related costs.

The higher revenues coupled with lower gross margins in 2026 resulted in rental related services gross profit decreasing $0.9 million, when compared to 2025.

• Gross Profit on Sales – Sales revenues increased $0.4 million to $1.6 million in 2026.

The higher sales revenues and higher gross margins of 36% in 2026, compared to 33% in 2025, resulted in an increase in sales gross profit of $0.2 million in 2026.

• Gross Profit on Sales – Sales revenues increased 8% to $1.9 million in 2026.

The higher sales revenues and comparable gross margin of 39% in 2026, resulted in a $0.1 million increase in gross profit on sales revenues in 2026.

Sales occur routinely as a normal part of Portable Storage’s rental business;

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

For the three months ended March 31, 2026, Portable Storage’s selling and administrative expenses increased $0.8 million, or 11%, to $8.4 million, primarily attributed to $0.6 million higher employees' salaries and benefit costs.

For the three months ended March 31, 2026, TRS-RenTelco’s total revenues increased $3.7 million, or 11%, to $38.7 million, compared to the same period in 2025, primarily due to higher rental operations revenues.

The total revenue increase, together with higher gross profit on rental operations and sales revenues and lower interest expense, partly offset by an increase in selling and administrative expenses, resulted in an increase in pre-tax income of $3.1 million, or 51%, for the three months ended March 31, 2026, when compared to 2025.

For the three months ended June 30, 2026, Portable Storage’s selling and administrative expenses increased $0.9 million, or 12%, to $8.5 million, primarily attributed to $0.5 million higher employees' salaries and benefit costs.

For the three months ended June 30, 2026, TRS-RenTelco’s total revenues increased $6.1 million, or 17%, to $42.6 million, compared to the same period in 2025, primarily due to higher rental operations and sales revenues.

The total revenue increase, together with higher gross profit on rental operations and sales revenues and lower interest expense, partly offset by an increase in selling and administrative expenses, resulted in an increase in pre-tax income of $4.8 million, or 60%, to $12.8 million for the three months ended June 30, 2026, when compared to 2025.

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

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TRS-RenTelco’s gross profit for the three months ended March 31, 2026 increased $3.4 million, or 23%, to $18.3 million.

For the three months ended March 31, 2026 compared to the same period in 2025:

• Gross Profit on Rental Revenues – Rental revenues increased $3.4 million, depreciation expense was comparable to 2025, and other direct costs increased by $0.7 million, or 14%, resulting in a $2.6 million, or 25% increase in gross profit on rental revenues to $12.9 million.

As a percentage of rental revenues, depreciation was 34% and 39% in 2026 and 2025, respectively, and other direct costs were 21% in both periods, which resulted in a gross margin percentage of 45% and 40% in 2026 and 2025, respectively.

• Gross Profit on Sales – Sales revenues increased 1% to $8.0 million in 2026.

TRS-RenTelco’s gross profit for the three months ended June 30, 2026 increased $5.8 million, or 35%, to $22.2 million.

For the three months ended June 30, 2026 compared to the same period in 2025:

• Gross Profit on Rental Revenues – Rental revenues increased $4.7 million, or 17%, depreciation expense increased $0.8 million, or 8%, and other direct costs increased by $0.5 million, or 10%, resulting in a $3.4 million, or 29% increase in gross profit on rental revenues to $15.3 million.

As a percentage of rental revenues, depreciation was 33% and 36% in 2026 and 2025, respectively, and other direct costs were 19% and 21% in 2026 and 2025, respectively, which resulted in a gross margin percentage of 48% in 2026 compared to 44% in 2025.

• Gross Profit on Sales – Sales revenues increased $1.0 million, or 13%, to $8.7 million in 2026.

Gross profit on sales increased $2.1 million, or 59%, to $5.8 million, with a higher gross margin percentage of 66% in 2026, compared to 47% in 2025.

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

For the three months ended March 31, 2026, selling and administrative expenses increased $0.6 million, or 7%, to $8.0 million.

For the three months ended June 30, 2026, selling and administrative expenses increased $0.9 million, or 13%, to $8.3 million, primarily attributed to $0.6 million higher allocated corporate expenses.

Six Months Ended June 30, 2026 Compared to

Six Months Ended June 30, 2025

Consolidated revenues for the six months ended June 30, 2026, decreased 6% to $419.7 million, from $431.0 million for the same period in 2025.

Consolidated net income for the six months ended June 30, 2026, decreased 5% to $60.7 million, from $64.2 million for the same period in 2025.

Earnings per diluted share for the six months ended June 30, 2026, decreased $0.14 to $2.47, compared to $2.61 for the same period in 2025.

The decrease in consolidated net income during the current period was primarily attributed to lower gross profit on sales revenues and $5.5 million higher selling and administrative expenses, partly offset by higher gross profit on rental operations revenues, a $2.3 million reduction in interest expense incurred on outstanding debt obligations and a $1.8 million gain on sale of a corporate property.

For the six months ended June 30, 2026, on a consolidated basis:

• Gross profit decreased $2.4 million, or 1%, to $204.8 million in 2026.

Mobile Modular’s gross profit decreased $3.5 million, or 3%, largely due to lower gross profit on rental and sales revenues, partly offset by higher gross profit on rental related services revenues.

Portable Storage's gross profit decreased $2.2 million, or 8%, primarily due to lower gross profit on rental operations revenues.

TRS-RenTelco’s gross profit increased $9.2 million, or 29%, primarily due to higher gross profit on rental operations and sales revenues.

Enviroplex’s gross profit decreased $5.8 million due to lower sales revenues and comparable sales margins in 2026.

• Selling and administrative expenses increased $5.5 million to $110.0 million, primarily due to $2.7 million higher marketing and administrative expenses and $2.6 million higher employees' salaries and benefit costs.

• Other income, net, increased $1.8 million due to the gain on sale of a corporate property in 2026.

• Interest expense decreased $2.3 million to $13.6 million, which was primarily attributed to $16.9 million lower average debt levels of the Company and a lower effective interest rate in 2026 of 4.96%, compared to 5.63% for the same period in 2025.

• Pre-tax income contribution by Mobile Modular, Portable Storage and TRS-RenTelco was 63%, 10% and 27%, respectively, compared to 63%, 14% and 16%, respectively, for the comparable 2025 period.

These results are discussed on a segment basis below.

Enviroplex pre-tax income contribution was less than 1% in 2026, compared to 7% in 2025.

The lower pre-tax income contribution from Enviroplex was primarily due to $19.0 million lower sales revenues in 2026.

• The provision for income taxes resulted in an effective tax rate of 26.9% and 26.1%, for the six month periods ended June 30, 2026 and 2025, respectively.

• Adjusted EBITDA decreased $4.1 million, or 3%, to $156.9 million for the six month period ended June 30, 2026.

Mobile Modular

For the six months ended June 30, 2026, Mobile Modular’s total revenues decreased $3.1 million, or 1%, to $284.8 million compared to the same period in 2025, primarily due to lower sales revenues, partly offset by higher rental operations revenues.

The revenue decrease, together with lower gross profit on rental and sales revenues and higher selling and administrative expenses, partly offset by higher gross profit on rental related services revenues and a $1.4 million reduction in allocated interest expense, resulted in a $4.0 million decrease in pre-tax income to $51.1 million for the six months ended June 30, 2026, from $55.0 million for the same period in 2025.

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

Mobile Modular – Six Months Ended 6/30/26 compared to Six Months Ended 6/30/25 (Unaudited)

(dollar amounts in thousands)

Six Months Ended

Increase (Decrease)

Rental related services

Rental operations

Total revenues

Costs and Expenses

Direct costs of rental operations:

Depreciation of rental equipment

Rental related services

Total direct costs of rental operations

Costs of sales

Total costs of revenues

Rental related services

Rental operations

Total gross profit

Selling and administrative expenses

Income from operations

Interest expense allocation

Pre-tax income

Other Selected Information

Adjusted EBITDA

Average rental equipment 1

Average rental equipment on rent

Average monthly total yield 2

Average utilization 3

Average monthly rental rate 4

Period end rental equipment 1

Period end utilization 3

Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.

Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding new rental equipment inventory and accessory equipment.

Average utilization for the period is calculated using the average month end costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

Mobile Modular’s gross profit for the six months ended June 30, 2026, decreased $3.5 million, or 3%, to $135.2 million.

For the six months ended June 30, 2026, compared to the same period in 2025:

• Gross Profit on Rental Revenues – Rental revenues increased $4.2 million, or 3%, due to 3% higher average rental equipment on rent and comparable average monthly rental rates in 2026.

As a percentage of rental revenues, depreciation was 14% and 13% in 2026 and 2025, respectively, and other direct costs were 30% in 2026 and 28% in 2025, which resulted in gross margin percentages of 55% and 59% in 2026 and 2025, respectively.

The higher rental revenues offset by lower rental margins, resulted in gross profit on rental revenues decreasing $3.1 million, or 3%, to $91.2 million in 2026.

• Gross Profit on Rental Related Services – Rental related services revenues increased $3.9 million, or 6%, compared to 2025.

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

The increase in revenues and higher gross margin percentage of 36% in 2026, compared to 35% in 2025, resulted in rental related services gross profit increasing $2.2 million, or 10%, to $23.7 million in 2026.

• Gross Profit on Sales – Sales revenues decreased $10.9 million, or 17%, compared to 2025, primarily due to lower new equipment sales.

The higher gross margin percentage of 34% in 2026 compared to 32% in 2025, together with lower sales revenue, resulted in gross profit on sales decreasing $2.4 million, or 12%, to $17.7 million.

The higher gross margin on sales in 2026 was primarily due to a higher mix of used versus new sales.

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

For the six months ended June 30, 2026, selling and administrative expenses increased $1.8 million, or 3%, to $72.6 million, primarily due to a $1.3 million higher marketing and administrative expenses and $0.5 million higher allocated corporate expenses.

Portable Storage

For the six months ended June 30, 2026, Portable Storage’s total revenues increased $0.8 million, or 2%, to $45.4 million compared to the same period in 2025, primarily due to higher sales and rental operations revenues.

Lower gross profit on rental operations revenues and higher selling and administrative expenses, partly offset by $0.3 million lower allocated interest expense and higher gross profit on sales revenues, resulted in a decrease in pre-tax income of $3.7 million, or 30%, to $8.4 million in 2026.

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

Portable Storage – Six Months Ended 6/30/26 compared to Six Months Ended 6/30/25 (Unaudited)

(dollar amounts in thousands)

Six Months Ended

Increase (Decrease)

Rental related services

Rental operations

Total revenues

Costs and Expenses

Direct costs of rental operations:

Depreciation of rental equipment

Rental related services

Total direct costs of rental operations

Costs of sales

Total costs of revenues

Gross Profit (Loss)

Rental related services

Rental operations

Total gross profit

Selling and administrative expenses

Income from operations

Interest expense allocation

Pre-tax income

Other Selected Information

Adjusted EBITDA

Average rental equipment 1

Average rental equipment on rent

Average monthly total yield 2

Average utilization 3

Average monthly rental rate 4

Period end rental equipment 1

Period end utilization 3

Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.

Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding new rental equipment inventory and accessory equipment.

Average utilization for the period is calculated using the average month end costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

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Portable Storage’s gross profit for the six months ended June 30, 2026, decreased $2.2 million, or 8%, to $26.8 million.

For the six months ended June 30, 2026, compared to the same period in 2025:

• Gross Profit on Rental Revenues – Rental revenues increased $0.1 million, due to comparable average monthly rental rates and average rental equipment on rent in 2026.

As a percentage of rental revenues, depreciation was 7% and 6% in 2026 and 2025, respectively, and other direct costs were 13% and 10% in 2026 and 2025, respectively, which resulted in gross margin percentage of 80% and 83% in 2026 and 2025, respectively.

The higher rental revenues and lower rental margins resulted in gross profit on rental revenues decreasing $0.9 million, or 3%, to $26.6 million in 2026.

• Gross Profit on Rental Related Services – Rental related services revenues was $8.4 million, an increase of $0.4 million compared to 2025.

The gross margin on rental related services revenues was negative 19% in 2026, compared to negative 3% in 2025.

The lower revenues coupled with lower gross margins in 2026 due to higher trucking costs, resulted in rental related services gross profit decreasing $1.4 million, when compared to 2025.

• Gross Profit on Sales – Sales revenues increased $0.5 million, primarily due to higher new and used equipment sales.

The higher sales revenues and higher gross margins of 38% in 2026, compared to 36% in 2025, resulted in sales gross profit increasing $0.2 million, or 21%, to $1.3 million in 2026.

Sales occur routinely as a normal part of Portable Storage’s rental business;

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

For the six months ended June 30, 2026, Portable Storage’s selling and administrative expenses increased $1.8 million, or 12%, to $16.9 million, primarily attributed $1.1 million higher employees' salaries and benefit costs and $0.3 million higher marketing and administrative expenses.

For the six months ended June 30, 2026, TRS-RenTelco’s total revenues increased $9.8 million, or 14%, to $81.3 million, compared to the same period in 2025, primarily due to higher rental operations and sales revenues.

Higher gross profit on rental operations and sales revenues and $0.4 million lower allocated interest expense, partly offset by $1.5 million higher selling and administrative expenses, resulted in a $8.0 million, or 56%, increase in pre-tax income to $22.1 million for the six months ended June 30, 2026, from $14.2 million for the same period in 2025.

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

TRS-RenTelco – Six Months Ended 6/30/26 compared to Six Months Ended 6/30/25 (Unaudited)

(dollar amounts in thousands)

Six Months Ended

Increase (Decrease)

Rental related services

Rental operations

Total revenues

Costs and Expenses

Direct costs of rental operations:

Depreciation of rental equipment

Rental related services

Total direct costs of rental operations

Costs of sales

Total costs of revenues

Rental related services

Rental operations

Total gross profit

Selling and administrative expenses

Income from operations

Interest expense allocation

Foreign currency exchange loss (gain)

Pre-tax income

Other Selected Information

Adjusted EBITDA

Average rental equipment 1

Average rental equipment on rent

Average monthly total yield 2

Average utilization 3

Average monthly rental rate 4

Period end rental equipment 1

Period end utilization 3

Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period.

Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding new rental equipment inventory and accessory equipment.

Average utilization for the period is calculated using the average month end costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent, for the period.

nm = Not meaningful

TRS-RenTelco’s gross profit for the six months ended June 30, 2026 increased $9.2 million, or 29%, to $40.4 million.

For the six months ended June 30, 2026 compared to the same period in 2025:

• Gross Profit on Rental Revenues – Rental revenues increased $8.1 million, or 15%, depreciation expense increased $0.8 million, or 4%, and other direct costs increased by $1.3 million, or 12%, resulting in a 27% increase in gross profit on rental revenues to $28.2 million.

As a percentage of rental revenues, depreciation was 34% and 37% in 2026 and 2025, respectively, and other direct costs were 20% and 21%, in 2026 and 2025, respectively, which resulted in a gross margin percentage of 46% and 42% in 2026 and 2025, respectively.

The increase in rental revenues was primarily due to a 8% increase in average rental equipment on rent and 7% higher average monthly rental rates in 2026, as compared to 2025.

• Gross Profit on Sales – Sales revenues increased $1.0 million, or 7%, to $16.7 million in 2026.

Gross profit on sales was $10.2 million, an increase of $2.8 million, or 38%, compared to 2025, with a higher gross margin percentage of 61% in 2026, compared to 47% in 2025.

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

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

For the six months ended June 30, 2026, selling and administrative expenses increased $1.5 million, or 10%, to $16.3 million.

The increase was primarily attributed to $1.1 million higher allocated corporate expenses when compared to 2025.

Adjusted EBITDA

To supplement the Company’s financial data presented on a basis consistent with accounting principles generally accepted in the United States of America (“GAAP”), the Company presents “Adjusted EBITDA”, which is defined by the Company as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, transaction costs, gains on property sales and non-operating transactions.

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Three Months Ended

Six Months Ended

Twelve Months Ended

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Transaction costs 3

Other income, net 4

Gain on merger termination from WillScot Mobile Mini 5

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Transaction costs include merger and acquisition related legal and professional fees and other costs specific to these transactions.

Other income, net consists of net gains on property, plant and equipment sales that are infrequent in nature and excluded from Adjusted EBITDA.

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

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Three Months Ended

Six Months Ended

Twelve Months Ended

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• Permit the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Facility and the Note Purchase Agreement (as defined and more fully described under the heading “Liquidity and Capital Resources” in this MD&A)) of Adjusted EBITDA (as defined in the Credit Facility and the Note Purchase Agreement) to fixed charges as of the end of any fiscal quarter to be less than 2.50 to 1.

At March 31, 2026, the actual ratio was 3.94 to 1.

At June 30, 2026, the actual ratio was 3.93 to 1.

• Permit the Consolidated Leverage Ratio of funded debt (as defined in the Credit Facility and the Note Purchase Agreement) to Adjusted EBITDA at any time during any period of four consecutive quarters to be greater than 2.75 to 1.

At March 31, 2026, the actual ratio was 1.51 to 1.

At March 31, 2026, the Company was in compliance with each of the aforementioned covenants.

At June 30, 2026, the actual ratio was 1.65 to 1.

At June 30, 2026, 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, although, significant deterioration in our financial performance could impact the Company’s ability to comply with these covenants.

1 unchanged sentence

The Company’s rental businesses are capital intensive and generate significant cash flows.

Cash flows for the Company for the three months ended March 31, 2026 compared to the same period in 2025 are summarized as follows:

Cash flows for the Company for the six months ended June 30, 2026 compared to the same period in 2025 are summarized as follows:

Cash Flows from Operating Activities:

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The $4.0 million decrease in net cash provided by operating activities was primarily attributable to $28.3 million lower cash provided from prepaid expenses and other assets, a result of the timing of cash payments made and expense recognition during the period.

Further, the Company's accounts payable provided for $5.3 million higher cash flows in 2026, a result of the payment timing of rental equipment acquisitions and other trade accounts payable, and accrued expenses provided for $4.9 million higher cash flows in 2026, primarily attributed to an increase in accrued leased real estate and payroll related expenses.

Further, the Company's deferred income provided for $14.6 million higher cash flows in 2026, a result of the timing of customer billings, cash proceeds received and recognition of revenue.

Lastly, accrued expenses provided for a $12.7 million increase to cash flows in 2026, primarily attributed to an increase in accrued leased real estate related expenses.

Cash Flows from Investing Activities:

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The $56.8 million increase in net cash used was primarily due to $73.8 million higher rental equipment purchases when compared to the previous year, a result of customer demand.

Further, the Company had $4.0 million higher purchases of property, plant and equipment during the current period, as compared to 2025.

Further, the Company had $12.3 million lower cash paid for the acquisition of businesses during the current period, which partly offset the increase in net cash used.

Cash Flows from Financing Activities:

Net cash provided by financing activities was $16.8 million in 2026, compared to $47.4 million in net cash used during 2025.

The $49.3 million change was largely attributed to increased borrowings under bank lines of credit, primarily the result of higher rental equipment investment and repurchases of common stock during the period, when compared to 2025.

The $64.2 million change was largely attributed to increased borrowings under bank lines of credit, primarily the result of higher rental equipment investment, the $60.0 million principal payment of Series E senior notes, $27.5 million in repurchases of common stock during the period and $24.7 million of dividend payments, when compared to 2025.

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

4 unchanged sentences

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, of which as of Mach 31, 2025, $73.0 million was utilized through the term loan entered on April 23, 2024, by adding one or more tranches of term loans and/or increasing the aggregate revolving commitments), which includes a $40.0 million sublimit for the issuance of standby letters of credit and a $20.0 million sublimit for swingline loans.

On May 8, 2026, 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 $725.0 million unsecured revolving credit facility (which may be further increased to $950.0 million, which includes a $40.0 million sublimit for the issuance of standby letters of credit and a $20.0 million sublimit for swingline loans.

The proceeds of the Credit Facility are available to be used for general corporate purposes, including permitted acquisitions.

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

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

(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, and (iii) the $75.0 million aggregate outstanding principal of notes issued September 27, 2023 and due September 27, 2030, and (iv) the $75.0 million aggregate outstanding principal of notes issued September 8, 2025 and due September 8, 2032.

In addition, the Company may incur additional senior note indebtedness in an aggregate amount not to exceed $350.0 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 utilize MUFG Union Bank, N.A.

The Credit Facility matures on May 8, 2031, and replaced the Company’s prior $650.0 million credit facility dated July 15, 2022 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 May 8, 2026.

On May 20, 2026, the Company entered into an amended and restated Credit Facility Letter Agreement and a Credit Line Note in favor of U.S.

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 May 20, 2031, or the date the Company ceases to utilize U.S.

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 March 31, 2026, 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 $296.0 million was outstanding and had capacity to borrow up to an additional $354.0 million.

The Sweep Service Facility replaced the Company’s prior $20.0 million sweep service facility, dated as of August 19, 2022.

At June 30, 2026, under the Credit Facility and Sweep Service Facility, the Company had unsecured lines of credit that permit it to borrow up to $725.0 million of which $399.9 million was outstanding and had capacity to borrow up to an additional $325.1 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 Credit Facility):

• Permit the Consolidated Fixed Charge Coverage Ratio as of the end of any fiscal quarter to be less than 2.50 to 1.

At March 31, 2026, the actual ratio was 3.94 to 1.

At June 30, 2026, the actual ratio was 3.93 to 1.

• Permit the Consolidated Leverage Ratio at any time during any period of four consecutive fiscal quarters to be greater than 2.75 to 1.

At March 31, 2026, the actual ratio was 1.51 to 1.

At March 31, 2026, the Company was in compliance with each of the aforementioned covenants.

At June 30, 2026, the actual ratio was 1.65 to 1.

At June 30, 2026, 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, although significant deterioration in our financial performance could impact the Company’s ability to comply with these covenants.

3 unchanged sentences

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.

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, paid in full on June 16, 2026, to which the terms of the Note Purchase Agreement applied.

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.

7 unchanged sentences

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 March 31, 2026, the principal balance outstanding under the Series G Senior Notes was $75.0 million.

At June 30, 2026, the principal balance outstanding under the Series G Senior Notes was $75.0 million.

6.25% Senior Notes Due in 2030

5 unchanged sentences

The full net proceeds from the Series F Senior Notes will primarily be used to fulfill the income tax obligations incurred from the divestiture of Adler Tanks.

At March 31, 2026, the principal balance outstanding under the Series F Senior Notes was $75.0 million.

At June 30, 2026, the principal balance outstanding under the Series F Senior Notes was $75.0 million.

2.57% Senior Notes Due in 2028

5 unchanged sentences

The full net proceeds from the Series D Senior Notes were used to pay off the Company’s $40 million Series B Senior Notes.

At March 31, 2026, the principal balance outstanding under the Series D Senior Notes was $40.0 million.

At June 30, 2026, the principal balance outstanding under the Series D Senior Notes was $40.0 million.

2.35% Senior Notes Due in 2026

1 unchanged sentence

and the noteholders party thereto.

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 Series E Senior Notes were an unsecured obligation of the Company and bore an interest at a rate of 2.35% per annum and matured on June 16, 2026.

Interest on the Series E Senior Notes was 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 was due when the note matured 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 March 31, 2026, the principal balance outstanding under the Series E Senior Notes was $60.0 million.

At June 30, 2026, the principal balance under the Series E Senior Notes was paid in full.

Among other restrictions, the Note Purchase Agreement, which has superseded in its entirety the Prior NPA, under which the Series D, E, F and 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 March 31, 2026, the actual ratio was 3.94 to 1.

At June 30, 2026, the actual ratio was 3.93 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 March 31, 2026, the actual ratio was 1.51 to 1.

At March 31, 2026, the Company was in compliance with each of the aforementioned covenants.

At June 30, 2026, the actual ratio was 1.65 to 1.

At June 30, 2026, the Company was in compliance with each of the aforementioned covenants.

3 unchanged sentences

Critical Accounting Estimates

There were no material changes in our judgments and assumptions associated with the development of our critical accounting estimates during the three month period ended March 31, 2026.

There were no material changes in our judgments and assumptions associated with the development of our critical accounting estimates during the six month period ended June 30, 2026.

Refer to our 2025 Annual Report for a discussion of our critical accounting policies and estimates.

2 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis