MCGRATH RENTCORP 10-Q

Item 1. Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders McGrath RentCorp Results of review of interim financial statements We have reviewed the accompanying condensed consolidated balance sheet of McGrath RentCorp (a California corporation) and subsidiaries (the “Company”) and the related condensed consolidated statements of income, 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. We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of the Company as of December 31, 2025, and the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 25, 2026, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2025, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Basis for review results These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our reviews in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. /s/ GRANT THORNTON LLP San Francisco, California July 29, 2026 3 MCGRATH RENTCORP CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share amounts) 2026 2025 2026 2025 Revenues Rental $ 131,880 $ 125,985 $ 258,541 $ 246,098 Rental related services 40,617 37,483 76,190 71,399 Rental operations 172,497 163,468 334,731 317,497 Sales 46,355 69,775 80,390 108,701 Other 2,260 2,373 4,533 4,834 Total revenues 221,112 235,616 419,654 431,032 Costs and Expenses Direct costs of rental operations: Depreciation of rental equipment 23,228 21,426 45,943 42,931 Rental related services 28,376 25,477 53,493 49,790 Other 34,476 31,519 66,606 59,171 Total direct costs of rental operations 86,080 78,422 166,042 151,892 Costs of sales 27,125 46,480 48,815 71,990 Total costs of revenues 113,205 124,902 214,857 223,882 Gross profit 107,907 110,714 204,797 207,150 Expenses: Selling and administrative expenses 56,436 53,543 109,924 104,412 Other income, net ( 1,814 ) — ( 1,814 ) — Income from operations 53,285 57,171 96,687 102,738 Interest expense 7,113 7,795 13,613 15,954 Foreign currency exchange loss (gain) 38 ( 81 ) 71 ( 86 ) Income before provision for income taxes 46,134 49,457 83,003 86,870 Provision for income taxes 12,462 13,484 22,298 22,689 Net income $ 33,672 $ 35,973 $ 60,705 $ 64,181 Earnings per share: Basic $ 1.38 $ 1.46 $ 2.47 $ 2.61 Diluted $ 1.37 $ 1.46 $ 2.47 $ 2.61 Shares used in per share calculation: Basic 24,479 24,611 24,547 24,592 Diluted 24,494 24,618 24,579 24,620 Cash dividends declared per share $ 0.495 $ 0.485 $ 0.990 $ 0.970 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 McGrath RentCorp CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) June 30, December 31, (in thousands) 2026 2025 Assets Cash $ 4,379 $ 295 Accounts receivable, net of allowance for credit losses of $ 2,700 at June 30, 2026 and $ 2,866 at December 31, 2025 240,022 231,865 Rental equipment, at cost: Relocatable modular buildings 1,565,877 1,485,794 Portable storage containers 245,641 245,141 Electronic test equipment 358,872 337,100 2,170,390 2,068,035 Less: accumulated depreciation ( 670,655 ) ( 647,137 ) Rental equipment, net 1,499,735 1,420,898 Property, plant and equipment, net 247,757 233,492 Inventories 15,178 8,027 Prepaid expenses and other assets 117,000 83,351 Intangible assets, net 41,630 46,605 Goodwill 337,348 332,584 Total assets $ 2,503,049 $ 2,357,117 Liabilities and Shareholders' Equity Liabilities: Notes payable $ 589,895 $ 514,924 Accounts payable 73,643 66,233 Accrued liabilities 131,421 114,764 Deferred income 140,314 110,593 Deferred income taxes, net 322,317 313,580 Total liabilities 1,257,590 1,120,094 Shareholders’ equity: Common stock, no par value - Authorized 40,000 shares Issued and outstanding - 24,426 shares as of June 30, 2026 and 24,612 shares as of December 31, 2025 120,228 121,785 Retained earnings 1,125,231 1,115,238 Total shareholders’ equity 1,245,459 1,237,023 Total liabilities and shareholders’ equity $ 2,503,049 $ 2,357,117 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 McGrath RentCorp CONDENSED Consolidated Statements OF SHAREHOLDERS’ EQUITY (unaudited) Common Stock Retained Total Shareholders’ (in thousands, except per share amounts) Shares Amount Earnings Equity Balance at December 31, 2025 24,612 $ 121,785 $ 1,115,238 $ 1,237,023 Net income — — 27,033 27,033 Share-based compensation — 2,823 — 2,823 Common stock issued under stock plans, net of shares withheld for employee taxes 59 — — — Common stock repurchased ( 114 ) ( 543 ) ( 11,372 ) ( 11,915 ) Taxes paid related to net share settlement of stock awards — ( 5,955 ) — ( 5,955 ) Dividends accrued of $ 0.495 per share — — ( 12,265 ) ( 12,265 ) Balance at March 31, 2026 24,557 $ 118,110 $ 1,118,634 $ 1,236,744 Net income — — 33,672 33,672 Share-based compensation — 2,856 — 2,856 Common stock issued under stock plans, net of shares withheld for employee taxes 5 — — — Common stock repurchased ( 136 ) ( 661 ) ( 14,880 ) ( 15,541 ) Taxes paid related to net share settlement of stock awards — ( 77 ) — ( 77 ) Dividends accrued of $ 0.495 per share — — ( 12,195 ) ( 12,195 ) Balance at June 30, 2026 24,426 $ 120,228 $ 1,125,231 $ 1,245,459 The accompanying notes are an integral part of these condensed consolidated financial statements. Common Stock Retained Total Shareholders’ (in thousands, except per share amounts) Shares Amount Earnings Equity Balance at December 31, 2024 24,551 $ 116,253 $ 1,007,115 $ 1,123,368 Net income — — 28,209 28,209 Share-based compensation — 2,544 — 2,544 Common stock issued under stock plans, net of shares withheld for employee taxes 55 — — — Taxes paid related to net share settlement of stock awards — ( 5,616 ) — ( 5,616 ) Dividends accrued of $ 0.485 per share — — ( 12,094 ) ( 12,094 ) Balance at March 31, 2025 24,606 $ 113,181 $ 1,023,230 $ 1,136,411 Net income — — 35,973 35,973 Share-based compensation — 2,778 — 2,778 Common stock issued under stock plans, net of shares withheld for employee taxes 6 — — — Taxes paid related to net share settlement of stock awards — ( 68 ) — ( 68 ) Dividends accrued of $ 0.485 per share — — ( 11,933 ) ( 11,933 ) Balance at June 30, 2025 24,612 $ 115,891 $ 1,047,270 $ 1,163,161 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 McGrath RentCorp CONDENSED Consolidated Statements of Cash Flows (unaudited) Six Months Ended June 30, (in thousands) 2026 2025 Cash Flows from Operating Activities: Net income $ 60,705 $ 64,181 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 56,280 52,739 Deferred income taxes 6,792 12,764 Provision for credit losses 569 826 Share-based compensation 5,679 5,322 Gain on sale of property, plant and equipment ( 1,814 ) — Gain on sale of used rental equipment ( 18,035 ) ( 16,674 ) Foreign currency exchange loss (gain) 71 ( 86 ) Amortization of debt issuance costs 5 45 Change in: Accounts receivable ( 8,580 ) ( 15,285 ) Inventories ( 7,151 ) 2,007 Prepaid expenses and other assets ( 33,578 ) ( 5,270 ) Accounts payable ( 30 ) ( 8,402 ) Accrued liabilities 15,058 2,403 Deferred income 29,721 15,124 Net cash provided by operating activities 105,692 109,694 Cash Flows from Investing Activities: Purchases of rental equipment ( 124,038 ) ( 50,230 ) Purchases of property, plant and equipment ( 19,397 ) ( 21,621 ) Cash paid for acquisition of businesses, net of cash received ( 9,385 ) ( 21,947 ) Proceeds from sales of used rental equipment 31,646 32,200 Proceeds from sales of property, plant and equipment 2,750 — Net cash used in investing activities ( 118,424 ) ( 61,598 ) Cash Flows from Financing Activities: Net borrowings (payments) under bank lines of credit 134,966 ( 17,730 ) Principal payment of Series E senior notes ( 60,000 ) — Repurchase of common stock ( 27,456 ) — Taxes paid related to net share settlement of stock awards ( 6,032 ) ( 5,684 ) Payment of dividends ( 24,662 ) ( 24,020 ) Net cash provided by (used in) financing activities 16,816 ( 47,434 ) Net increase in cash 4,084 662 Cash balance, beginning of period 295 807 Cash balance, end of period $ 4,379 $ 1,469 Supplemental Disclosure of Cash Flow Information: Interest paid, during the period $ 13,258 $ 15,982 Net income taxes paid, during the period $ 19,780 $ 5,786 Dividends accrued during the period, not yet paid $ 12,543 $ 12,443 Rental equipment acquisitions, not yet paid $ 19,047 $ 8,658 Business acquisition payments withheld $ 1,249 $ 1,815 The accompanying notes are an integral part of these condensed consolidated financial statements. 7 MCGRATH RENTCORP NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2026 NOTE 1. CONDENSED CONSOLIDATED FINANCIAL INFORMATION 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 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”). 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 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 July 2025, the FASB issued ASU 2025‑05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets . This ASU amends ASC 326‑20 to provide a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. The amendments permit entities to assume that current economic conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when estimating expected credit losses, thereby eliminating the requirement to develop reasonable and supportable forecasts for such assets . The guidance is effective for annual reporting periods beginning after December 15, 2025, and for interim periods within those annual periods, with early adoption permitted. The Company is currently in the process of evaluating the financial statement impact of this ASU. 8 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 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 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. 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.  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, using the purchase method of accounting.  Incremental transaction costs totaled $ 0.5 million for the year ended December 31, 2025. NOTE 4. REVENUE RECOGNITION The Company’s accounting for revenues is governed by two accounting standards. The majority of the Company’s revenues are considered lease or lease related and are accounted for in accordance with Topic 842, Leases . Revenues determined to be non-lease related are accounted for in accordance with Topic 606, Revenue from Contracts with Customers . The Company accounts for revenues when approval and commitment from both parties have been obtained, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company typically recognizes non-lease related revenues at a point in time because the customer does not simultaneously consume the benefits of the Company’s promised goods and services, or performance obligations, and obtains control when delivery and installation are complete. For contracts that have multiple performance obligations, the transaction price is allocated to each performance obligation in the contract based on the Company’s best estimate of the standalone selling prices of each distinct performance obligation in the contract. The standalone selling price is typically determined based upon the expected cost plus an estimated margin of each performance obligation. Revenue from contracts that satisfy the criteria for over time recognition are recognized as work is performed by using the ratio of costs incurred to estimated total contract costs for each contract. The majority of revenue for these contracts is derived from long-term projects which typically span multiple quarters . The timing of revenue recognition, billings, and cash collections results in billed contract receivables and contract assets on the Company's Consolidated Balance Sheets. In the Company’s contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Billings can occur subsequent to revenue recognition, resulting in contract assets, or in advance, resulting in contract liabilities. These contract assets and liabilities are reported on the 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 $ 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 9 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. 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 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. The Company does not typically offer variable payment terms or accept non-monetary consideration. Amounts billed and due from the Company’s customers are classified as Accounts receivable on the Company’s consolidated balance sheet. For certain sales of modular buildings, progress payments from the customer are received during the manufacturing of new equipment, or the preparation of used equipment. The advance payments are not considered a significant financing component because the payments are used to meet working capital needs during the contract and to protect the Company from the customer failing to adequately complete their obligations under the contract. Lease Revenues Rental revenues from operating leases are recognized on a straight-line basis over the term of the lease for all operating segments. Rental billings for periods extending beyond period end are recorded as deferred income and are recognized in the period earned. Rental related services revenues are primarily associated with relocatable modular buildings. For modular building leases, rental related services revenues for modifications, delivery, installation, dismantle and return delivery are lease related because the payments are considered minimum lease payments that are an integral part of the negotiated lease agreement with the customer. These revenues are recognized on a straight-line basis over the term of the lease. Certain leases are accounted for as finance leases. For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a basis which results in a constant rate of return on the unrecovered lease investment. 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 six months ended June 30, 2026. Other revenues include interest income on finance leases and rental income on facility leases. 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. The lease agreements have a bargain purchase option at the end of the lease term. For these leases, sales revenue and the related accounts receivable are recognized upon delivery and installation of the equipment and the unearned interest is recognized over the lease term on a straight-line basis, which results in a constant rate of return on the unrecovered lease investment. The Company’s finance lease revenues for the three and 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. Non-Lease Revenues Non-lease revenues are recognized in the period when control of the performance obligation is transferred, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. For portable storage containers and electronic test equipment, rental related services revenues for delivery and return delivery are considered non-lease revenues. 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 contract costs for each contract. Accounting for non-lease revenues requires judgment in determining the point in time the customer gains control of the equipment and the appropriate accounting period to recognize revenue. Sales taxes charged to customers are reported on a net basis and are excluded from revenues and expenses. 10 The following table disaggregates the Company’s revenues by lease (within the scope of Topic 842) and non-lease revenues (within the scope of Topic 606) and the underlying service provided for the three and six months ended June 30, 2026 and 2025: (in thousands) Mobile Modular Portable Storage TRS- RenTelco Enviroplex Consolidated Three Months Ended June 30, 2026 Leasing $ 112,522 $ 17,342 $ 32,847 $ — $ 162,711 Non-lease: Rental related services 6,711 4,235 1,180 — 12,126 Sales 31,179 1,853 8,152 4,616 45,800 Other 12 89 374 — 475 Total non-lease 37,902 6,177 9,706 4,616 58,401 Total revenues $ 150,424 $ 23,519 $ 42,553 $ 4,616 $ 221,112 2025 Leasing $ 107,971 $ 17,383 $ 28,837 $ — $ 154,191 Non-lease: Rental related services 7,498 4,123 794 — 12,415 Sales 40,484 1,712 6,444 19,866 68,506 Other 35 128 341 — 504 Total non-lease 48,017 5,963 7,579 19,866 81,425 Total revenues $ 155,988 $ 23,346 $ 36,416 $ 19,866 $ 235,616 Six Months Ended June 30, 2026 Leasing $ 220,286 $ 34,100 $ 62,731 $ — $ 317,117 Non-lease: Rental related services 12,411 7,792 2,088 — 22,291 Sales 52,074 3,457 15,673 8,120 79,324 Other 55 100 767 — 922 Total non-lease 64,540 11,349 18,528 8,120 102,537 Total revenues $ 284,826 $ 45,449 $ 81,259 $ 8,120 $ 419,654 2025 Leasing $ 212,735 $ 33,975 $ 55,401 $ — $ 302,111 Non-lease: Rental related services 12,127 7,512 1,474 — 21,113 Sales 62,974 2,956 13,866 27,079 106,875 Other 70 169 694 — 933 Total non-lease 75,171 10,637 16,034 27,079 128,921 Total revenues $ 287,906 $ 44,612 $ 71,435 $ 27,079 $ 431,032 Customer returns of rental equipment prior to the end of the rental contract term are typically billed a cancellation fee, which is recorded as rental revenue in the period billed. Sales of new relocatable modular buildings, portable storage containers and electronic test equipment not manufactured by the Company are typically covered by warranties provided by the manufacturer of the products sold. The Company typically provides limited 90 -day warranties for certain sales of used rental equipment and one-year warranties on equipment manufactured by Enviroplex. Although the Company’s policy is to provide reserves for warranties when required for specific circumstances, warranty costs have not been significant to date. The Company’s incremental cost of obtaining lease contracts, which consists of salesperson commissions, are deferred and amortized over the initial lease term for modular 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. NOTE 5. EARNINGS PER SHARE 11 Basic earnings per share (“EPS”) is computed as net income divided by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS is computed assuming conversion of all potentially dilutive securities including the dilutive effect of stock options, unvested restricted stock awards and other potentially dilutive securities. The table below presents the weighted-average number of shares of common stock used to calculate basic and diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Weighted-average number of shares of common stock for calculating basic earnings per share 24,479 24,611 24,547 24,592 Effect of potentially dilutive securities from equity-based compensation 15 7 32 28 Weighted-average number of shares of common stock for calculating diluted earnings per share 24,494 24,618 24,579 24,620 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"). 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. 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 June 30, Six Months Ended June 30, (in thousands, except share and per share amounts) 2026 2025 2026 2025 Number of shares repurchased 136,409 — 250,000 — Aggregate purchase price (1) $ 15,342 $ — $ 27,205 $ — Average price per repurchased share $ 112.47 $ — $ 108.82 $ — 1. 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 $ 0.2 million and $ 0.3 million for the three and six months ended June 30, 2026, respectively. NOTE 6. INVENTORIES The following table presents the carrying value of inventories: (dollar amounts in thousands) June 30, December 31, 2026 2025 Raw materials $ 4,380 $ 3,904 Work-in-process 10,798 4,123 Total inventories $ 15,178 $ 8,027 12 NOTE 7. GOODWILL AND INTANGIBLE ASSETS Intangible assets consist of the following: (dollar amounts in thousands) Estimated useful life in years Average remaining life in years Cost Accumulated amortization Net book value June 30, 2026 Customer relationships 6 to 11 5.7 $ 75,783 $( 37,404 ) $ 38,379 Non-compete agreements 5 1.9 10,916 ( 8,308 ) 2,608 Trade name 0.75 to 8 2.6 2,068 ( 1,596 ) 472 Total amortizing 88,767 ( 47,308 ) 41,459 Trade name - non-amortizing Indefinite 171 — 171 Total $ 88,938 $( 47,308 ) $ 41,630 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 Goodwill consisted of the following: (dollar amounts in thousands) Mobile Modular Portable Storage Enviroplex Total Balance at December 31, 2025 $ 319,574 $ 11,212 $ 1,798 $ 332,584 Goodwill acquired through business combinations 4,764 — — 4,764 Balance at June 30, 2026 $ 324,338 $ 11,212 $ 1,798 $ 337,348 The Company assesses potential impairment of its goodwill and intangible assets when there is evidence that events or circumstances have occurred that would indicate the recovery of an asset’s carrying value is unlikely. The Company also assesses potential impairment of its goodwill and intangible assets with indefinite lives on an annual basis regardless of whether there is evidence of impairment. If indicators of impairment were to be present in intangible assets used in operations and future discounted cash flows were not expected to be sufficient to recover the asset’s carrying amount, an impairment loss would be charged to expense in the period identified. The amount of an impairment loss that would be recognized is the excess of the asset’s carrying value over its fair value. Factors the Company considers important, which may cause impairment include, among others, significant changes in the manner of use of the acquired asset, negative industry or economic trends, and significant underperformance relative to historical or projected operating results. The Company last conducted a qualitative analysis of its goodwill and intangible assets in the fourth quarter 2025, with no indicators of impairment. 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. The Company bases its fair value estimates on assumptions that it believes are reasonable but are uncertain and subject to changes in market conditions. Intangible assets with finite useful lives are amortized over their respective useful lives. Amortization expense 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. 13 NOTE 8. SEGMENT REPORTING FASB guidelines establish annual and interim reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. In accordance with these guidelines, the Company’s four reportable segments are Mobile Modular, Portable Storage, TRS-RenTelco and Enviroplex. The Company's Chief Operating Decision Maker ("CODM") Phil Hawkins, Chief Executive Officer, and senior management focus on several key measures to evaluate and assess each segment’s performance, including rental, rental related services and sales revenue growth, gross profit, income from operations and income before provision for income taxes. In addition to the evaluation of the aforementioned key measures of each reportable segment, the CODM and senior management evaluate supplemental information by reportable segment, such as rental equipment acquisitions, fleet utilization, and average utilization, to further assess segment performance and the future allocation of Company resources. The CODM is the primary individual in control of resource allocation, and the allocation determinations are made in consultation with the Company’s senior management team, of which the CODM is a member. The most significant allocation determinations made by the CODM pertain to purchases of rental equipment and employee headcount. These determinations are generally made as part of the annual budgeting process, with regular reviews occurring throughout the year that can result in allocation changes depending upon performance against budget. On a monthly basis, the CODM considers period end and average rental equipment utilization and budget-to-actual variances to gross profit, income from operations, income before provision for income taxes and net income when making decisions about allocating capital and employee resources to the segments. Excluding interest expense, allocations of revenue and expense not directly associated with one of these segments are generally allocated to Mobile Modular, Portable Storage and TRS-RenTelco, based on their pro-rata share of direct revenues. Interest expense is allocated amongst Mobile Modular, Portable Storage and TRS-RenTelco based on their pro-rata share of average rental equipment at cost, goodwill, intangible assets, accounts receivable, deferred income and customer security deposits. The Company does not report total assets by business segment. Summarized financial information for the six months ended June 30, 2026 and 2025, for the Company’s reportable segments is shown in the following tables: 14 (dollar amounts in thousands) Mobile Modular Portable Storage TRS- RenTelco Enviroplex 1 Consolidated Six Months Ended June 30, 2026 Revenues Rental revenues $ 164,618 $ 33,139 $ 60,784 $ — $ 258,541 Rental related services revenues 65,554 8,383 2,253 — 76,190 Sales 52,073 3,458 16,739 8,120 80,390 Other 2,581 469 1,483 — 4,533 Total revenues 284,826 45,449 81,259 8,120 419,654 Costs of Revenues Depreciation of rental equipment 23,367 2,196 20,380 — 45,943 Rental related services 41,869 9,945 1,679 — 53,493 Other 50,023 4,373 12,210 — 66,606 Costs of sales 34,387 2,149 6,562 5,717 48,815 Total costs of revenues 149,646 18,663 40,831 5,717 214,857 Gross profit 135,180 26,786 40,428 2,403 204,797 Significant Segment Expenses 3 Wages and benefits 29,807 7,990 5,964 2,618 46,379 Depreciation and amortization 7,053 1,000 82 217 8,352 Marketing and administrative expenses 10,679 3,741 2,925 1,361 18,706 Allocated corporate services 4 24,434 3,952 7,202 — 35,588 Other segment items 5 639 180 80 — 899 Total expenses 72,612 16,863 16,253 4,196 109,924 Income from operations 62,568 9,923 24,175 ( 1,793 ) 94,873 Interest expense (income) allocation 11,505 1,560 1,994 ( 1,445 ) 13,613 Foreign currency exchange loss — — 71 — 71 Income before provision for income taxes 51,063 8,362 22,110 ( 348 ) 81,187 Provision for income taxes 13,714 2,247 5,944 ( 95 ) 21,810 Net income (loss) $ 37,349 $ 6,115 $ 16,166 $ ( 253 ) $ 59,377 Reconciliation of Segment Profit Total segment gross profit $ 204,797 Segment operating expenses, net 109,924 Other income, net 6 ( 1,814 ) Interest expense allocation 13,613 Foreign currency exchange loss 71 Provision for income taxes 6 ` 22,298 Income before provision for income taxes $ 60,705 Other Selected Information Rental equipment acquisitions $ 86,024 $ 2,477 $ 42,914 — $ 131,415 Accounts receivable, net (period end) $ 189,256 $ 10,624 $ 29,474 $ 10,668 $ 240,022 Rental equipment, at cost (period end) $ 1,565,877 $ 245,641 $ 358,872 — $ 2,170,390 Rental equipment, net book value (period end) $ 1,159,765 $ 217,583 $ 122,387 — $ 1,499,735 Utilization (period end) 2 70.6 % 58.7 % 68.9 % Average utilization 2 70.1 % 58.4 % 66.9 % 15 (dollar amounts in thousands) Mobile Modular Portable Storage TRS- RenTelco Enviroplex 1 Consolidated Six Months Ended June 30, 2025 Revenues Rental revenues $ 160,404 $ 33,014 $ 52,680 $ — $ 246,098 Rental related services revenues 61,647 8,025 1,727 — 71,399 Sales 62,974 2,956 15,692 27,079 108,701 Other 2,881 617 1,336 — 4,834 Total revenues 287,906 44,612 71,435 27,079 431,032 Costs of Revenues Depreciation of rental equipment 21,294 2,070 19,567 — 42,931 Rental related services 40,190 8,237 1,363 — 49,790 Other 44,802 3,445 10,924 — 59,171 Costs of sales 42,926 1,879 8,343 18,842 71,990 Total costs of revenues 149,212 15,631 40,197 18,842 223,882 Gross profit 138,694 28,981 31,238 8,237 207,150 Significant Segment Expenses 3 Wages and benefits 29,734 6,933 5,810 2,411 44,888 Depreciation and amortization 7,101 749 35 204 8,089 Marketing and administrative expenses 9,598 3,352 2,678 1,173 16,801 Allocated corporate services 4 23,949 3,742 6,139 — 33,830 Other segment items 5 383 325 96 — 804 Total expenses 70,765 15,101 14,758 3,788 104,412 Income from operations 67,929 13,880 16,480 4,449 102,738 Interest expense (income) allocation 12,914 1,852 2,410 ( 1,222 ) 15,954 Foreign currency exchange gain — — ( 86 ) — ( 86 ) Income before provision for income taxes 55,015 12,028 14,156 5,671 86,870 Provision for income taxes 14,421 3,172 3,641 1,455 22,689 Net income $ 40,594 $ 8,856 $ 10,515 $ 4,216 $ 64,181 Other Selected Information Rental equipment acquisitions $ 34,479 $ 618 $ 18,399 $ — $ 53,496 Accounts receivable, net (period end) $ 177,549 $ 12,857 $ 23,085 $ 20,310 $ 233,801 Rental equipment, at cost (period end) $ 1,443,314 $ 244,261 $ 333,171 $ — $ 2,020,746 Rental equipment, net book value (period end) $ 1,071,846 $ 220,048 $ 101,788 $ — $ 1,393,682 Utilization (period end) 2 73.1 % 61.8 % 64.8 % Average utilization 2 74.2 % 60.6 % 63.0 % 1. 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. 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 and acquisition related transaction costs. 6. 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. 16