MCGRATH RENTCORP 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Form 10-Q, including the following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contains forward-looking statements under federal securities laws. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties. Our actual results could differ materially from those indicated by forward-looking statements as a result of various factors. These factors include, but are not limited to, those set forth under this Item, those discussed in Part II—Item 1a, “Risk Factors” and elsewhere in this Form 10-Q and those that may be identified from time to time in our reports and registration statements filed with the SEC. This discussion should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes included in Part I—Item 1 of this Form 10-Q and the Consolidated Financial Statements and related Notes and the Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 25, 2026 (the “2025 Annual Report”). In preparing the following MD&A, we presume that readers have access to and have read the MD&A in our 2025 Annual Report, pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K. We undertake no duty to update any of these forward-looking statements after the date of filing of this Form 10-Q to conform such forward-looking statements to actual results or revised expectations, except as otherwise required by law. General The Company, incorporated in 1979, is a leading rental provider of relocatable modular buildings for classroom and office space and electronic test equipment for general purpose and communications needs. The Company’s primary emphasis is on equipment rentals. The Company is comprised of four reportable business segments: (1) its modular building segment (“Mobile Modular”); (2) its portable storage container segment (“Portable Storage”); (3) its electronic test equipment segment (“TRS-RenTelco”); and (4) its classroom manufacturing business selling modular buildings used primarily as classrooms in California (“Enviroplex”). 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. The Company requires significant capital outlay to purchase its rental inventory and recovers its investment through rental and sales revenues. Rental revenues and certain other service revenues negotiated as part of lease agreements with customers and related costs are recognized on a straight-line basis over the terms of the leases. Sales revenues and related costs are recognized upon delivery and installation of the equipment to customers. Sales revenues are less predictable and can fluctuate from quarter to quarter and year to year depending on customer demands and requirements. Generally, rental revenues less cash operating costs recover the equipment’s capitalized cost in a short period of time relative to the equipment’s potential rental life and when sold, sale proceeds are usually above its net book value. The Company’s modular revenues (consisting of revenues from Mobile Modular, Kitchens To Go and Enviroplex) are derived from rentals and sales to commercial and education customers. Modular revenues are affected by demand for classrooms, which in turn is affected by shifting and fluctuating school populations, the levels of state funding to public schools, the need for temporary classroom space during reconstruction of older schools and changes in policies regarding class size. As a result of any reduced funding, lower expenditures by these schools may result in certain planned programs to increase the number of classrooms, such as those that the Company provides, to be postponed or terminated. However, reduced expenditures may also result in schools reducing their long-term facility construction projects in favor of using the Company’s modular classroom solutions. At this time, the Company can provide no assurances as to whether public schools will either reduce or increase their demand for the Company's modular classrooms as a result of fluctuations in state funding of public schools. Looking forward, the Company believes that any interruption in the passage of facility bonds or contraction of class size reduction programs by public schools may have a material adverse effect on both rental and sales revenues of the Company. (For more information, see “ Item 1. Business – Relocatable Modular Buildings – Classroom Rentals and Sales to Public Schools (K-12) ” in the Company’s 2025 Annual Report and “ Item 1a. Risk Factors – Significant reductions of, or delays in, funding to public schools have caused the demand and pricing for our modular classroom units to decline, which has in the past caused, and may cause in the future, a reduction in our revenues and profitability ” in Part II of the Company's 2025 Annual Report) Revenues of Portable Storage consists of the rental and sale of steel containers and ground level offices to provide a temporary storage solution that is delivered to the customer’s location and addresses the need for secure temporary storage with immediate access to the unit. The portable storage container rental market in the U.S. has a large and diverse number of market segments including construction, retail, commercial and industrial, energy and petrochemical, manufacturing, education and healthcare. 17 Revenues of TRS-RenTelco are derived from the rental and sale of general purpose and communications test equipment to a broad range of companies, from Fortune 500 to middle and smaller market companies primarily in the aerospace, defense, communications, manufacturing and semiconductor industries. 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 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). The Company’s Mobile Modular, Portable Storage and TRS-RenTelco business segments sell modular units, storage containers and electronic test equipment, respectively, which are either new or previously rented. In addition, Enviroplex sells new modular buildings used primarily as classrooms in California. 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. Selling and administrative expenses primarily include personnel and benefit costs, which include share-based compensation, depreciation and amortization, bad debt expense, advertising costs, and professional service fees. The Company believes that sharing of common facilities, financing, senior management, and operating and accounting systems by all of the Company’s operations results in an efficient use of overhead. Historically, the Company’s operating margins have been impacted favorably to the extent its costs and expenses are leveraged over a large installed customer base. However, there can be no assurances as to the Company’s ability to maintain a large installed customer base or ability to sustain its historical operating margins. Recent Developments Dividends 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 Macroeconomic conditions, such as a volatile interest rate environment, ongoing inflation, the geopolitical landscape, and foreign exchange rate fluctuations, continue to impact the global economy. In addition, recent changes in legislation and regulations, including enacted and proposed tariffs and other trade policies, have introduced additional uncertainty in the global economy. In periods of perceived or actual unfavorable economic conditions, our customers or potential customers could delay or re-evaluate their decisions to initiate various projects which in turn could result in a delay or cessation of engagement or other business activities with us. These factors also make it difficult for us to forecast and plan future budgetary decisions or business activities accurately. Our operating results could be materially impacted by changes in the overall macroeconomic environment and other economic factors. 18 Results of Operations Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 Overview 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 $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 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. 19 Mobile Modular 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. Mobile Modular – Three Months Ended 6/30/26 compared to Three Months Ended 6/30/25 (Unaudited) (dollar amounts in thousands) Three Months Ended June 30, Increase (Decrease) 2026 2025 $ % Revenues Rental $ 83,181 $ 81,909 $ 1,272 2 % Rental related services 34,794 32,172 2,622 8 % Rental operations 117,975 114,081 3,894 3 % Sales 31,179 40,484 (9,305 ) (23 )% Other 1,270 1,423 (153 ) (11 )% Total revenues 150,424 155,988 (5,564 ) (4 )% Costs and Expenses Direct costs of rental operations: Depreciation of rental equipment 11,709 10,741 968 9 % Rental related services 22,134 20,450 1,684 8 % Other 26,052 23,990 2,062 9 % Total direct costs of rental operations 59,895 55,181 4,714 9 % Costs of sales 20,062 27,581 (7,519 ) (27 )% Total costs of revenues 79,957 82,762 (2,805 ) (3 )% Gross Profit Rental 45,420 47,178 (1,758 ) (4 )% Rental related services 12,660 11,722 938 8 % Rental operations 58,080 58,900 (820 ) (1 )% Sales 11,117 12,903 (1,786 ) (14 )% Other 1,270 1,423 (153 ) (11 )% Total gross profit 70,467 73,226 (2,759 ) (4 )% Expenses: Selling and administrative expenses 37,448 36,777 671 2 % Income from operations 33,019 36,449 (3,430 ) (9 )% Interest expense allocation 6,016 6,407 (391 ) (6 )% Pre-tax income $ 27,003 $ 30,042 $ (3,039 ) (10 )% Other Selected Information Adjusted EBITDA $ 50,740 $ 53,088 $ (2,348 ) (4 )% Average rental equipment 1 $ 1,421,497 $ 1,300,787 $ 120,710 9 % Average rental equipment on rent $ 996,249 $ 959,077 $ 37,172 4 % Average monthly total yield 2 1.95 % 2.10 % (7 )% Average utilization 3 70.1 % 73.7 % (5 )% Average monthly rental rate 4 2.78 % 2.85 % (2 )% Period end rental equipment 1 $ 1,440,670 $ 1,315,405 $ 125,265 10 % Period end utilization 3 70.6 % 73.1 % (3 )% 1. Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment. 2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period. 3. Period end utilization is calculated by dividing the cost of rental equipment on rent by the total cost of rental equipment, excluding new equipment inventory and accessory equipment. Average utilization for the period is calculated using the average month end costs of rental equipment. 4. 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. 20 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 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 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 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. 21 Portable Storage 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. The following table summarizes results for each revenue and gross profit category, income from operations, pre-tax income and other selected information. Portable Storage – Three Months Ended 6/30/26 compared to Three Months Ended 6/30/25 (Unaudited) (dollar amounts in thousands) Three Months Ended June 30, Increase (Decrease) 2026 2025 $ % Revenues Rental $ 16,856 $ 16,939 $ (83 ) — Rental related services 4,540 4,394 146 3 % Rental operations 21,396 21,333 63 — Sales 1,853 1,712 141 8 % Other 270 301 (31 ) (10 )% Total revenues 23,519 23,346 173 1 % Costs and Expenses Direct costs of rental operations: Depreciation of rental equipment 1,104 1,038 66 6 % Rental related services 5,352 4,304 1,048 24 % Other 2,265 1,918 347 18 % Total direct costs of rental operations 8,721 7,260 1,461 20 % Costs of sales 1,126 1,048 78 7 % Total costs of revenues 9,847 8,308 1,539 19 % Gross Profit (Loss) Rental 13,487 13,983 (496 ) (4 )% Rental related services (812 ) 90 (902 ) nm Rental operations 12,675 14,073 (1,398 ) (10 )% Sales 727 664 63 9 % Other 270 301 (31 ) (10 )% Total gross profit 13,672 15,038 (1,366 ) (9 )% Expenses: Selling and administrative expenses 8,488 7,547 941 12 % Income from operations 5,184 7,491 (2,307 ) (31 )% Interest expense allocation 807 882 (75 ) (9 )% Pre-tax income $ 4,377 $ 6,609 $ (2,232 ) (34 )% Other Selected Information Adjusted EBITDA $ 7,588 $ 9,834 $ (2,246 ) (23 )% Average rental equipment 1 $ 242,947 $ 233,742 $ 9,205 4 % Average rental equipment on rent $ 141,546 $ 142,896 $ (1,350 ) (1 )% Average monthly total yield 2 2.31 % 2.42 % (5 )% Average utilization 3 58.3 % 61.1 % (5 )% Average monthly rental rate 4 3.97 % 3.95 % 1 % Period end rental equipment 1 $ 242,973 $ 233,850 $ 9,123 4 % Period end utilization 3 58.7 % 61.8 % (5 )% 1. Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment. 2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period. 3. 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. 4. 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 22 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 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 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. 23 TRS-RenTelco 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. TRS-RenTelco – Three Months Ended 6/30/26 compared to Three Months Ended 6/30/25 (Unaudited) (dollar amounts in thousands) Three Months Ended June 30, Increase (Decrease) 2026 2025 $ % Revenues Rental $ 31,843 $ 27,137 $ 4,706 17 % Rental related services 1,283 917 366 40 % Rental operations 33,126 28,054 5,072 18 % Sales 8,707 7,713 994 13 % Other 720 649 71 11 % Total revenues 42,553 36,416 6,137 17 % Costs and Expenses Direct costs of rental operations: Depreciation of rental equipment 10,415 9,647 768 8 % Rental related services 890 723 167 23 % Other 6,159 5,611 548 10 % Total direct costs of rental operations 17,464 15,981 1,483 9 % Costs of sales 2,926 4,072 (1,146 ) (28 )% Total costs of revenues 20,390 20,053 337 2 % Gross Profit Rental 15,269 11,879 3,390 29 % Rental related services 393 194 199 103 % Rental operations 15,662 12,073 3,589 30 % Sales 5,781 3,641 2,140 59 % Other 720 649 71 11 % Total gross profit 22,163 16,363 5,800 35 % Expenses: Selling and administrative expenses 8,262 7,320 942 13 % Income from operations 13,901 9,043 4,858 54 % Interest expense allocation 1,051 1,133 (82 ) (7 )% Foreign currency exchange loss (gain) 38 (81 ) 119 nm Pre-tax income $ 12,812 $ 7,991 $ 4,821 60 % Other Selected Information Adjusted EBITDA $ 24,993 $ 19,314 $ 5,679 29 % Average rental equipment 1 $ 344,717 $ 330,532 $ 14,185 4 % Average rental equipment on rent $ 234,723 $ 214,318 $ 20,405 10 % Average monthly total yield 2 3.08 % 2.74 % 12 % Average utilization 3 68.1 % 64.8 % 5 % Average monthly rental rate 4 4.52 % 4.22 % 7 % Period end rental equipment 1 $ 351,565 $ 330,535 $ 21,030 6 % Period end utilization 3 68.9 % 64.8 % 6 % 1. Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment. 2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period. 3. 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. 4. 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 24 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. 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 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. 25 Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Overview 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. 26 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 June 30, Increase (Decrease) 2026 2025 $ % Revenues Rental $ 164,618 $ 160,404 $ 4,214 3 % Rental related services 65,554 61,647 3,907 6 % Rental operations 230,171 222,051 8,120 4 % Sales 52,073 62,974 (10,901 ) (17 )% Other 2,581 2,881 (300 ) (10 )% Total revenues 284,826 287,906 (3,080 ) (1 )% Costs and Expenses Direct costs of rental operations: Depreciation of rental equipment 23,367 21,294 2,073 10 % Rental related services 41,869 40,190 1,679 4 % Other 50,023 44,802 5,221 12 % Total direct costs of rental operations 115,259 106,286 8,973 8 % Costs of sales 34,387 42,926 (8,539 ) (20 )% Total costs of revenues 149,646 149,212 434 0 % Gross Profit Rental 91,228 94,308 (3,080 ) (3 )% Rental related services 23,685 21,457 2,228 10 % Rental operations 114,913 115,765 (852 ) (1 )% Sales 17,686 20,048 (2,362 ) (12 )% Other 2,581 2,881 (300 ) (10 )% Total gross profit 135,180 138,694 (3,514 ) (3 )% Expenses: Selling and administrative expenses 72,612 70,765 1,847 3 % Income from operations 62,568 67,929 (5,361 ) (8 )% Interest expense allocation 11,505 12,914 (1,409 ) (11 )% Pre-tax income $ 51,063 $ 55,015 $ (3,952 ) (7 )% Other Selected Information Adjusted EBITDA $ 97,923 $ 100,719 $ (2,796 ) (3 )% Average rental equipment 1 $ 1,403,928 $ 1,292,797 $ 111,131 9 % Average rental equipment on rent $ 983,964 $ 958,731 $ 25,233 3 % Average monthly total yield 2 1.95 % 2.07 % (6 )% Average utilization 3 70.1 % 74.2 % (5 )% Average monthly rental rate 4 2.79 % 2.79 % — Period end rental equipment 1 $ 1,440,670 $ 1,315,405 $ 125,265 10 % Period end utilization 3 70.6 % 73.1 % (3 )% 1. Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment. 2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period. 3. 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. 4. 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. 27 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; 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 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. 28 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 June 30, Increase (Decrease) 2026 2025 $ % Revenues Rental $ 33,139 $ 33,014 $ 125 0 % Rental related services 8,383 8,025 358 4 % Rental operations 41,522 41,039 483 1 % Sales 3,458 2,956 502 17 % Other 469 617 (148 ) (24 )% Total revenues 45,449 44,612 837 2 % Costs and Expenses Direct costs of rental operations: Depreciation of rental equipment 2,196 2,070 126 6 % Rental related services 9,945 8,237 1,708 21 % Other 4,373 3,445 928 27 % Total direct costs of rental operations 16,514 13,752 2,762 20 % Costs of sales 2,149 1,879 270 14 % Total costs of revenues 18,663 15,631 3,032 19 % Gross Profit (Loss) Rental 26,570 27,499 (929 ) (3 )% Rental related services (1,562 ) (212 ) (1,350 ) nm Rental operations 25,008 27,287 (2,279 ) (8 )% Sales 1,309 1,077 232 22 % Other 469 617 (148 ) (24 )% Total gross profit 26,786 28,981 (2,195 ) (8 )% Expenses: Selling and administrative expenses 16,863 15,101 1,762 12 % Income from operations 9,923 13,880 (3,957 ) (29 )% Interest expense allocation 1,560 1,852 (292 ) (16 )% Pre-tax income $ 8,363 $ 12,028 $ (3,665 ) (30 )% Other Selected Information Adjusted EBITDA $ 14,728 $ 18,421 $ (3,693 ) (20 )% Average rental equipment 1 $ 242,855 $ 233,501 $ 9,354 4 % Average rental equipment on rent $ 141,784 $ 141,528 $ 256 0 % Average monthly total yield 2 2.27 % 2.36 % (4 )% Average utilization 3 58.4 % 60.6 % (4 )% Average monthly rental rate 4 3.90 % 3.89 % 0 % Period end rental equipment 1 $ 242,973 $ 233,850 $ 9,123 4 % Period end utilization 3 58.7 % 61.8 % (5 )% 1. Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment. 2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period. 3. 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. 4. 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 29 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. 30 TRS-RenTelco 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 June 30, Increase (Decrease) 2026 2025 $ % Revenues Rental $ 60,784 $ 52,680 $ 8,104 15 % Rental related services 2,253 1,727 526 30 % Rental operations 63,037 54,407 8,630 16 % Sales 16,739 15,692 1,047 7 % Other 1,483 1,336 147 11 % Total revenues 81,259 71,435 9,824 14 % Costs and Expenses Direct costs of rental operations: Depreciation of rental equipment 20,380 19,567 813 4 % Rental related services 1,679 1,363 316 23 % Other 12,210 10,924 1,286 12 % Total direct costs of rental operations 34,269 31,854 2,415 8 % Costs of sales 6,562 8,343 (1,781 ) (21 )% Total costs of revenues 40,831 40,197 634 2 % Gross Profit Rental 28,194 22,189 6,005 27 % Rental related services 574 364 210 58 % Rental operations 28,768 22,553 6,215 28 % Sales 10,177 7,349 2,828 38 % Other 1,483 1,336 147 11 % Total gross profit 40,428 31,238 9,190 29 % Expenses: Selling and administrative expenses 16,253 14,758 1,495 10 % Income from operations 24,175 16,480 7,695 47 % Interest expense allocation 1,994 2,410 (416 ) (17 )% Foreign currency exchange loss (gain) 71 (86 ) 157 nm Pre-tax income $ 22,110 $ 14,156 $ 7,954 56 % Other Selected Information Adjusted EBITDA $ 45,849 $ 37,248 $ 8,601 23 % Average rental equipment 1 $ 339,564 $ 334,607 $ 4,957 1 % Average rental equipment on rent $ 227,309 $ 210,718 $ 16,591 8 % Average monthly total yield 2 2.98 % 2.62 % 14 % Average utilization 3 66.9 % 63.0 % 6 % Average monthly rental rate 4 4.46 % 4.17 % 7 % Period end rental equipment 1 $ 351,565 $ 330,535 $ 21,030 6 % Period end utilization 3 68.9 % 64.8 % 6 % 1. Average and Period end rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment. 2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment, for the period. 3. 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. 4. 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 31 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. 32 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. The Company presents Adjusted EBITDA as a financial measure as management believes it provides useful information to investors regarding the Company’s liquidity and financial condition and because management, as well as the Company’s lenders, use this measure in evaluating the performance of the Company. Management uses Adjusted EBITDA as a supplement to GAAP measures to further evaluate period-to-period operating performance, compliance with financial covenants in the Company’s revolving lines of credit and senior notes and the Company’s ability to meet future capital expenditure and working capital requirements. Management believes the exclusion of non-cash charges and non-recurring transactions, including share-based compensation, transaction costs and gains on property sales is useful in measuring the Company’s cash available for operations and performance of the Company. Because management finds Adjusted EBITDA useful, the Company believes its investors will also find Adjusted EBITDA useful in evaluating the Company’s performance. Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of the Company’s profitability or liquidity. Adjusted EBITDA is not in accordance with or an alternative for GAAP and may be different from non−GAAP measures used by other companies. Unlike EBITDA, which may be used by other companies or investors, Adjusted EBITDA does not include share-based compensation charges, transaction costs, gains on property sales and non-operating transactions. The Company believes that Adjusted EBITDA is of limited use in that it does not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and does not accurately reflect real cash flow. In addition, other companies may not use Adjusted EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted EBITDA for purposes of comparison. The Company’s presentation of Adjusted EBITDA should not be construed as an inference that the Company will not incur expenses that are the same as or similar to the adjustments in this presentation. Therefore, Adjusted EBITDA should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The Company compensates for the limitations of Adjusted EBITDA by relying upon GAAP results to gain a complete picture of the Company’s performance. Because Adjusted EBITDA is a non-GAAP financial measure, as defined by the SEC, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP. Reconciliation of Net Income to Adjusted EBITDA (dollar amounts in thousands) Three Months Ended June 30, Six Months Ended June 30, Twelve Months Ended June 30, 2026 2025 2026 2025 2026 2025 Net income $ 33,671 $ 35,973 $ 60,704 $ 64,182 $ 152,830 $ 252,448 Provision for income taxes 12,462 13,484 22,298 22,689 56,382 89,202 Interest expense 7,112 7,795 13,613 15,954 28,281 37,454 Depreciation and amortization 28,456 26,339 56,280 52,739 110,610 106,063 EBITDA 81,701 83,591 152,895 155,564 348,103 485,167 Share-based compensation 2,857 2,779 5,679 5,322 11,582 10,268 Transaction costs 3 53 155 164 155 475 41,593 Other income, net 4 (1,814 ) — (1,814 ) — (1,814 ) — Gain on merger termination from WillScot Mobile Mini 5 — — — — — (180,000 ) Adjusted EBITDA 1 $ 82,797 $ 86,525 $ 156,924 $ 161,041 $ 358,348 $ 357,028 Adjusted EBITDA margin 2 37 % 37 % 37 % 37 % 38 % 38 % 1. Adjusted EBITDA is defined as income from operations before interest expense, provision for income taxes, depreciation, amortization, share-based compensation, other income, net and non-operating transactions. 2. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by total revenues for the period. 3. Transaction costs include merger and acquisition related legal and professional fees and other costs specific to these transactions. 4. Other income, net consists of net gains on property, plant and equipment sales that are infrequent in nature and excluded from Adjusted EBITDA. 5. The gain on merger termination from WillScot Mobile Mini was considered a non-operating transaction and is excluded from Adjusted EBITDA. 33 Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA (dollar amounts in thousands) Three Months Ended June 30, Six Months Ended June 30, Twelve Months Ended June 30, 2026 2025 2026 2025 2026 2025 Net cash provided by operating activities $ 63,326 $ 55,812 $ 105,692 $ 109,694 $ 251,683 $ 345,440 Change in certain assets and liabilities: Accounts receivable, net 17,780 24,919 8,011 14,459 6,075 16,422 Inventories, prepaid expenses and other assets 30,691 11,427 40,729 3,263 34,062 2,193 Accounts payable and accrued liabilities (39,736 ) (20,522 ) (18,784 ) 10,266 (15,147 ) (137,663 ) Deferred income (24,781 ) (8,050 ) (29,721 ) (15,124 ) (14,925 ) 9,664 Amortization of debt issuance costs (1 ) (22 ) (5 ) (45 ) (166 ) (107 ) Foreign currency exchange (loss) gain (38 ) 81 (71 ) 86 (77 ) 34 Gain on sale of used rental equipment 11,103 10,281 18,035 16,674 45,552 36,222 Income taxes paid, net of refunds received 19,505 5,762 19,780 5,786 24,110 46,909 Interest paid 4,948 6,837 13,258 15,982 27,181 37,912 Adjusted EBITDA 1 $ 82,797 $ 86,525 $ 156,924 $ 161,041 $ 358,348 $ 357,028 1. Adjusted EBITDA is defined as income from operations before interest expense, provision for income taxes, depreciation, amortization, share-based compensation and non-operating transactions. Adjusted EBITDA is a component of two restrictive financial covenants for the Company’s unsecured Credit Facility, the Note Purchase Agreement, Series D, E, F and G Senior Notes (as defined and more fully described under the heading “Liquidity and Capital Resources” in this MD&A). These instruments contain financial covenants requiring the Company to not: • 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 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 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. Liquidity and Capital Resources The Company’s rental businesses are capital intensive and generate significant cash flows. 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: The Company’s operations provided net cash of $105.7 million in 2026, compared to $109.7 million in 2025. 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 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: Net cash used in investing activities was $118.4 million in 2026, up from $61.6 million in 2025. 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 $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 $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. 34 Significant capital expenditures are required to maintain and grow the Company’s rental assets. During the last three years, the Company has financed its working capital and capital expenditure requirements through cash flow from operations, proceeds from the sale of rental equipment and from borrowings. Sales occur routinely as a normal part of the Company’s rental business. However, these sales can fluctuate from period to period depending on customer requirements and funding. Although the net proceeds received from sales may fluctuate from period to period, the Company believes its liquidity will not be adversely impacted from lower sales in any given year because it believes it has the ability to increase its bank borrowings and conserve its cash in the future by reducing the amount of cash it uses to purchase rental equipment, pay dividends, or repurchase the Company’s common stock. Unsecured Revolving Lines of Credit 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 June 8, 2023 (as amended): (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 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. Bank, N.A. for its cash management services. 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 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 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. Note Purchase and Private Shelf Agreement On June 8, 2023, the Company entered into a Second Amended and Restated Note Purchase and Private Shelf Agreement (the “Note Purchase Agreement”) with PGIM, Inc. (“PGIM”) and the holders of Series D and Series E Notes previously issued pursuant to the Prior NPA. The Note Purchase Agreement amended and restated, and superseded in its entirety, the Prior NPA. Pursuant to the Prior NPA, the Company issued (i) $40.0 million aggregate principal amount of its 2.57% Series D Senior Notes, due March 17, 2028, and (ii) $60.0 million aggregate principal amount of its 2.35% Series E Senior Notes, paid in full on June 16, 2026, to which the terms of the Note Purchase Agreement applied. 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 35 thereof, to have an average life, in the case of each Shelf Note so issued, of no more than 15 years after the date of original issuance thereof, to bear interest on the unpaid balance thereof from the date thereof at the rate per annum, and to have such other particular terms, as shall be set forth, in the case of each Shelf Note so issued, in accordance with the Note Purchase Agreement. Shelf Notes may be issued and sold from time to time at the discretion of the Company’s Board of Directors and in such amounts as the Board of Directors may determine, subject to prospective purchasers’ agreement to purchase the Shelf Notes. The Company will sell the Shelf Notes directly to such purchasers. The full net proceeds of each Shelf Note will be used in the manner described in the applicable Request for Purchase with respect to such Shelf Note. 5.30% Senior Notes Due in 2032 On September 8, 2025, the Company issued and sold to the purchasers $75.0 million aggregate principal amount of 5.30% Series G Notes (the “Series G Senior Notes”) pursuant to the terms of the Note Purchase Agreement. The Series G Senior Notes are an unsecured obligation of the Company and bear interest at a rate of 5.30% per annum and mature on September 8, 2032. Interest on the Series G Senior Notes is payable semi-annually beginning on March 8, 2026 and continuing thereafter on September 8 and March 8 of each year until maturity. The principal balance is due when the notes mature on September 8, 2032. The full net proceeds from the Series G Senior Notes were used to pay down the Company’s term loan "A" facility in its entirety. At June 30, 2026, the principal balance outstanding under the Series G Senior Notes was $75.0 million. 6.25% Senior Notes Due in 2030 On September 27, 2023, the Company issued and sold to the purchasers $75.0 million aggregate principal amount of 6.25% Series F Notes (the “Series F Senior Notes”) pursuant to the terms of the Second Amended and Restated Note Purchase and Private Shelf Agreement, dated June 8, 2023 (the “Note Purchase Agreement”), among the Company, PGIM, Inc. and the noteholders party thereto. The Series F Senior Notes are an unsecured obligation of the Company and bear interest at a rate of 6.25% per annum and mature on September 27, 2030. Interest on the Series F Senior Notes is payable semi-annually beginning on March 27, 2024 and continuing thereafter on September 27 and March 27 of each year until maturity. The principal balance is due when the notes mature on September 27, 2030. The full net proceeds from the Series F Senior Notes will primarily be used to fulfill the income tax obligations incurred from the divestiture of Adler Tanks. 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 On March 17, 2021, the Company issued and sold to the purchasers $40.0 million aggregate principal amount of 2.57% Series D Notes (the “Series D Senior Notes”) pursuant to the terms of the Amended and Restated Note Purchase and Private Shelf Agreement, dated March 31, 2020 (the “Note Purchase Agreement”), among the Company, PGIM, Inc. and the noteholders party thereto. The Series D Senior Notes are an unsecured obligation of the Company and bear interest at a rate of 2.57% per annum and mature on March 17, 2028. Interest on the Series D Senior Notes is payable semi-annually beginning on September 17, 2021 and continuing thereafter on March 17 and September 17 of each year until maturity. The principal balance is due when the notes mature on March 17, 2028. The full net proceeds from the Series D Senior Notes were used to pay off the Company’s $40 million Series B Senior Notes. 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 On June 16, 2021, the Company issued and sold to the purchasers $60.0 million aggregate principal amount of 2.35% Series E Notes (the "Series E Notes") pursuant to the terms of the Amended and Restated Note Purchase and Private Shelf Agreement, dated March 31, 2020 (the “Note Purchase Agreement”), among the Company, PGIM, Inc. and the noteholders party thereto. 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 June 30, 2026, the principal balance under the Series E Senior Notes was paid in full. 36 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 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 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. Although no assurance can be given, the Company believes it will continue to be able to negotiate general bank lines of credit and issue senior notes adequate to meet capital requirements not otherwise met by operational cash flows and proceeds from sales of rental equipment. Contractual Obligations and Commitments We believe that our contractual obligations and commitments have not changed materially from those included in our 2025 Annual Report. Critical Accounting Estimates 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. Item 3. Quantitative and Qualitative Disclosures About Market Risk There have been no material changes in the Company’s market risk exposures from those reported in our 2025 Annual Report.