3 unchanged sentences
MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes thereto, contained in Part I, Item 1 of this report.
−Removed: The discussion of results of operations in this MD&A is presented on a historical basis, as of or for the three and six months ended June 30, 2021 or prior periods.
+Added: The discussion of results of operations in this MD&A is presented on a historical basis, as of or for the three and nine months ended September 30, 2021 or prior periods.
On July 1, 2020, WillScot and Mobile Mini, Inc.
9 unchanged sentences
We are also a leading provider of specialty containment solutions in the US with over 12,800 tank and pump units in our fleet.
−Removed: As of June 30, 2021, our branch network included approximately 270 branch locations and additional drop lots to service over 85,000 customers.
+Added: As of September 30, 2021, our branch network included approximately 275 branch locations and additional drop lots to service over 85,000 customers.
We offer our customers an extensive selection of “Ready to Work” modular space and portable storage solutions with over 155,000 modular space units and over 205,000 portable storage units in our fleet.
3 unchanged sentences
Our lease revenue is highly predictable due to its recurring nature and the underlying stability and diversification of our lease portfolio.
−Removed: However, given that our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our lease portfolio excluding seasonal portable storage units is approximately 30 months.
+Added: However, given that our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our lease portfolio excluding seasonal portable storage units is nearly 30 months.
We complement our core leasing business by selling both new and used units, allowing us to leverage scale, achieve purchasing benefits and redeploy capital employed in our lease fleet.
1 unchanged sentence
Core to our operating model is the ability to redeploy standardized assets across end markets, as we did in 2020 to service emerging demand in the healthcare and government sectors related to COVID-19, as well as expanded space requirements related to social distancing.
−Removed: We track several market leading indicators including those related to our two largest end markets, the commercial and industrial segment and the construction segment, which together accounted for over 85% of our revenues for the three months ended June 30, 2021.
+Added: We track several market leading indicators including those related to our two largest end markets, the commercial and industrial segment and the construction segment, which together accounted for over 85% of our revenues for the three months ended September 30, 2021.
We remain focused on our core priorities of growing leasing revenues by increasing units on rent, both organically and through our consolidation strategy, delivering “Ready to Work” solutions to our customers with value added products and services ("VAPS"), and on continually improving the overall customer experience.
6 unchanged sentences
A significant portion of these efforts to date had been focused on the conversion of the combined company onto a single enterprise resource planning system, which was successfully completed during the second quarter of 2021.
+Added: Other Acquisitions
+Added: On September 17, 2021, the Company acquired certain assets and liabilities of three companies in the United States that focus primarily in the portable storage solutions market for $56.3 million in cash.
+Added: The primary assets acquired included approximately 11,000 storage units and 400 modular units, the majority of which were on rent.
+Added: See Note 2 to the condensed consolidated financial statements for further discussion.
+Added: We continue to manage a pipeline of potential acquisition targets and anticipate that mergers and acquisitions will be a significant portion of our capital allocation priorities.
Reportable Segments
5 unchanged sentences
The reporting segments are aligned with how we operate and analyze our business results.
+Added: During the third quarter of 2021, the majority of the portable storage product business within the NA Modular segment was transitioned to the NA Storage segment, and associated revenues, expenses, and operating metrics beginning in the third quarter of 2021 were transferred to the NA Storage segment.
Financing Activities
7 unchanged sentences
On March 1, 2021, we repurchased and cancelled 2,750,000 shares of our Common Stock directly from Sapphire Holding S.à r.l.
−Removed: (“Sapphire Holdings”), our largest shareholder, which is controlled by TDR Capital LLP (“TDR Capital”), for $73.7 million.
+Added: (“Sapphire Holdings”), our largest shareholder at that time, which is controlled by TDR Capital LLP (“TDR Capital”), for $73.7 million.
On June 29, 2021, we repurchased and cancelled an additional 3,900,000 shares of our Common Stock directly from Sapphire Holdings for $108.2 million.
−Removed: As of June 30, 2021, Sapphire Holdings owns approximately 10.3% of the Company's Common Stock.
−Removed: During the six months ended June 30, 2021, we repurchased and cancelled 3,055,000 2015 Private Warrants for $25.5 million.
−Removed: In addition, during the six months ended June 30, 2021, 9,655,000 2015 Private Warrants were exercised on a cashless basis, resulting in the issuance of 2,939,898 shares of Common Stock.
−Removed: As a result of these transactions, no 2015 Private Warrants were outstanding as of June 30, 2021.
−Removed: During the six months ended June 30, 2021, we repurchased and cancelled 218,135 2018 Warrants for $2.2 million.
−Removed: In addition, during the six months ended June 30, 2021, 2,346,195 of the 2018 Warrants were exercised on a cashless basis, resulting in the issuance of 1,091,066 shares of common stock.
−Removed: At June 30, 2021, 7,165,911 of the 2018 Warrants were outstanding.
−Removed: During the six months ended June 30, 2021, we repurchased a total of 7,901,657 shares of Common Stock and stock equivalents for $216.3 million, including the shares repurchased from Sapphire Holdings and all repurchased warrants.
−Removed: As of June 30, 2021, we had $249.2 million remaining of a $500.0 million share repurchase authorization under our stock repurchase program and believe that repurchases will be a reoccurring capital allocation priority given the predictability of our free cash flow.
+Added: On September 9, 2021, we repurchased and cancelled an additional 2,379,839 shares of our Common Stock directly from Sapphire Holdings for $67.1 million.
+Added: During the nine months ended September 30, 2021, we repurchased and cancelled 3,055,000 2015 Private Warrants for $25.5 million.
+Added: In addition, during the nine months ended September 30, 2021, 9,655,000 2015 Private Warrants were exercised on a cashless basis, resulting in the issuance of 2,939,898 shares of Common Stock.
+Added: As a result of these transactions, no 2015 Private Warrants were outstanding as of September 30, 2021.
+Added: During the nine months ended September 30, 2021, we repurchased and cancelled 223,310 2018 Warrants for $2.3 million.
+Added: In addition, during the nine months ended September 30, 2021, 2,981,195 of the 2018 Warrants were exercised on a cashless basis, resulting in the issuance of 1,372,548 shares of common stock.
+Added: At September 30, 2021, 6,525,736 of the 2018 Warrants were outstanding.
+Added: During the nine months ended September 30, 2021, we repurchased a total of 11,656,552 shares of Common Stock and stock equivalents for $322.6 million, including the shares repurchased from Sapphire Holdings and all repurchased warrants.
+Added: As of September 30, 2021, we had $142.2 million remaining of a $500.0 million share repurchase authorization under our stock repurchase program.
+Added: Given the predictability of our free cash flow, we believe that repurchases will be a reoccurring capital allocation priority.
+Added: In October of 2021, the Company's Board of Directors replaced the existing share repurchase program with a new share repurchase program that authorizes the Company to repurchase up to $1.0 billion of its outstanding shares of Common Stock and equivalents.
COVID-19 Impact on Business
8 unchanged sentences
As expected, our portfolio of units already out on rent at the onset of the pandemic was resilient and largely unimpacted, despite the unprecedented swings in economic activity in 2020.
−Removed: Activity levels in the fourth quarter of 2020 and the first half of 2021 have since stabilized, and our volume of new lease activations grew significantly in the second quarter of 2021 as economic activity rebounded sharply.
−Removed: For the three months ended June 30, 2021, modular product deliveries across our NA Modular and NA Storage segments were up a combined 9% over 2020 levels and storage product deliveries across these two segments were up a combined 39% over 2020 levels and on par with 2019 activity levels.
−Removed: Overall, while new lease activation volumes over the past 18 months were impacted in line with the swings in economic activity, our lease revenue streams were stable and predictable and remain on an attractive upward long-term trajectory, which is a direct reflection of the diversification in our end markets, our long lease durations, and the success of the organic growth initiatives that we are executing.
−Removed: Second Quarter Highlights
−Removed: For the three months ended June 30, 2021, key drivers of our financial performance included:
−Removed: • Total revenues increased by $204.2 million, or 79.5%, driven primarily by the addition of Mobile Mini's revenues to our consolidated results, as well as increased leasing revenues in the NA Modular segment.
−Removed: The Merger closed on July 1, 2020, and drove $171.7 million of the year over year increase.
−Removed: • Leasing revenue increased $153.0 million, or 80.5%, delivery and installation revenue increased $40.0 million, or 77.5%, rental unit sales increased $9.9 million, or 186.8%, and new sales revenue increased $1.2 million, or 12.2%.
+Added: Activity levels in the fourth quarter of 2020 and the first half of 2021 stabilized, and our volume of new lease activations grew significantly in the second quarter of 2021 as economic activity rebounded sharply with modular deliveries across our NA Modular and NA Storage segments up a combined 9% over 2020 levels and storage product deliveries across these two segments up a combined 39% over 2020 levels and on par with 2019 pro forma activity levels.
+Added: This recovery continued in the third quarter of 2021 and for the three months ended September 30, 2021, both modular and storage product deliveries across our NA Modular and NA Storage segments were up a combined 6% over 2020 levels.
+Added: Overall, while new lease activation volumes over the past seven quarters were impacted in line with the swings in economic activity, our lease revenue streams were stable and predictable and remain on an attractive upward long-term trajectory, which is a direct reflection of the diversification in our end markets, our long lease durations, and the success of the organic growth initiatives that we are executing.
+Added: Third Quarter Highlights
+Added: For the three months ended September 30, 2021, key drivers of our financial performance included:
+Added: • Total revenues increased by $73.3 million, or 17.6%.
+Added: Leasing revenue increased $63.3 million, or 21.1%, delivery and installation revenue increased $15.0 million, or 17.7%, rental unit sales decreased $1.6 million, or 12.1%, and new sales revenue decreased $3.5 million, or 18.0%.
Key leasing revenue drivers include:
−Removed: – Average modular space units on rent increased 23,372 units, or 26.8%, and average portable storage units on rent increased 135,867 units, or 856.2%.
−Removed: Both increases were driven by the Mobile Mini Merger.
−Removed: – Average modular space monthly rental rate increased $67, or 10.0%, to $736 driven by an $132, or 19.7%, increase in the NA Modular segment, partially offset by the dilutive impact of lower rates due to mix on the Mobile Mini modular space units.
−Removed: – Average portable storage monthly rental rate increased $19, or 15.8%, to $139 driven by the accretive impact of higher rates from the Mobile Mini portable storage fleet.
−Removed: – Average utilization for modular space units increased 180 basis points ("bps") to 70.3% and utilization for portable storage units increased to 77.7% from 62.5% for the same period in 2020 driven by higher utilization of the Mobile Mini units and increased demand in 2021 as compared to the same period in 2020.
−Removed: • NA Modular segment revenue, which represents the activities of WillScot prior to the Merger with Mobile Mini, represented 62.8% of consolidated revenue for the three months ended June 30, 2021 and increased $32.5 million, or 12.7%, to $289.4 million.
+Added: – Average portable storage units on rent increased 19,408 units, or 13.5%, and average modular space units on rent decreased 1,395 units, or 1.3%.
+Added: The increase in average portable storage units on rent was driven by significant increases in delivery activity during 2021 as economic activity rebounded versus 2020 more quickly across portable storage units than modular space units.
+Added: – Average modular space monthly rental rate increased $127, or 19.8%, to $767 driven by strong pricing performance across all relevant segments.
+Added: Average modular space monthly rental rates increased by $141, or 20.3%, in the NA Modular segment, by $97, or 19.2%, in the NA Storage segment, and by $98, or 27.5% in the UK Storage segment.
+Added: – Average portable storage monthly rental rate increased $14, or 10.7%, to $145 driven by increased pricing as a result of our price management tools and processes, further supported by tight supply on portable storage containers in the markets in which we operate.
+Added: – Average utilization for portable storage units increased to 83.9% from 73.2% for the same period in 2020 driven by increased demand in 2021 as compared to the same period in 2020.
+Added: Average utilization for modular space units decreased 50 basis points ("bps") to 70.1%.
+Added: • NA Modular segment revenue, which represents 61.0% of consolidated revenue for the three months ended September 30, 2021, increased $31.2 million, or 11.6%, to $299.1 million.
The increase was driven by our core leasing revenue, which grew $27.5 million, or 14.3%, due to continued growth of pricing and value added products.
Delivery and installation revenues increased $5.9 million, or 11.3%, driven by increased demand for new project deliveries as compared to 2020, which was significantly impacted by slowdowns associated with COVID-19.
−Removed: And rental unit sales grew $4.6 million, or 85.2%, partly offset by a reduction in new unit sales of $2.9 million, or 29.6%.
−Removed: NA Modular revenue drivers for the three months ended June 30, 2021 included:
+Added: The increases to leasing revenue and delivery and installation revenues were partially offset by declines in revenues for portable storage units as the result of transitioning the majority of the portable storage product business within the NA Modular segment to the NA Storage segment.
+Added: Rental unit sales decreased $1.8 million, or 18.8%, and new unit sales decreased $0.5 million, or 3.6%.
+Added: NA Modular revenue drivers for the three months ended September 30, 2021 included:
– Modular space average monthly rental rate of $834, increased 20.3% year over year representing a continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.
– Average modular space units on rent decreased 2,182, or 2.5%, year over year driven by lower deliveries during 2020 as a result of the COVID-19 pandemic.
−Removed: Sequentially from March 31, 2021, average modular space units on rent were flat.
−Removed: – Average modular space monthly utilization decreased 80 bps to 67.7% for the three months ended June 30, 2021, as compared to the three months ended June 30, 2020.
−Removed: Sequentially from March 31, 2021, modular utilization increased 10 bps.
−Removed: • Generated consolidated net income of $20.4 million for the three months ended June 30, 2021, including a $0.6 million gain on the change in fair value of common stock warrant liabilities.
−Removed: Net Income Excluding Gain/Loss from Warrants of $19.8 million for the three months ended June 30, 2021 represented an increase of $7.0 million, and included a $2.8 million loss on extinguishment of debt related to the opportunistic partial redemption of the 2025 Secured Notes and $15.0 million of discrete costs expensed in the period related to merger integration activities.
−Removed: Discrete costs in the period included $7.6 million of integration costs and $7.4 million of restructuring costs, lease impairment expense and other related charges.
−Removed: • Adjusted EBITDA of $175.5 million for the three months ended June 30, 2021 represented an increase of $78.0 million, or 80.0%, as compared to the same period in 2020.
−Removed: Of this increase, $71.9 million was driven by the addition of Mobile Mini to our consolidated results and the remainder was driven by strong organic growth in our NA Modular segment.
−Removed: – Adjusted EBITDA in our NA Modular segment, which represents the activities of WillScot prior to the Merger, increased $6.0 million, or 6.2%, primarily driven by increases in leasing gross profit driven by increased pricing, including VAPS, partially offset by increased variable costs due to higher activity levels in 2021.
−Removed: – Consolidated Adjusted EBITDA Margin was 38.1% in the second quarter and increased 10 bps versus prior year driven by the addition of Mobile Mini's higher margin portable storage business, partially offset by a higher proportion of delivery and installation revenues to total revenues and increased variable costs in the NA Modular Segment as a result of higher activity levels in the current year quarter.
−Removed: • Generated Free Cash Flow of $82.1 million for the three months ended June 30, 2021, representing an increase of $43.1 million as compared to the same period in 2020.
+Added: Sequentially from June 30, 2021, modular space units on rent increased approximately 700 units, or 0.8% during the third quarter.
+Added: – Average modular space monthly utilization decreased 70 bps to 67.6% for the three months ended September 30, 2021, as compared to the three months ended September 30, 2020.
+Added: Sequentially from the second quarter, average modular utilization decreased 10 bps, however end of period utilization increased over 100 bps from June 30, 2021 to September 30, 2021.
+Added: • NA Storage segment revenue, which represents 27.3% of consolidated revenue for the three months ended September 30, 2021, increased $29.4 million, or 28.1%, to $133.9 million.
+Added: The increase was driven by our core leasing revenue, which grew $24.2 million, or 31.4%, due to increased units on rent driven by significant increases in delivery activity during 2021 as economic activity rebounded versus 2020, and increased pricing.
+Added: Delivery and installation revenues increased $7.4 million, or 35.4%, driven by increased demand for new project deliveries as compared to 2020, which was significantly impacted by slowdowns associated with COVID-19.
+Added: The increases to leasing revenue and delivery and installation revenues in the NA Storage segment were also impacted as the result of transitioning the majority of the portable storage product business within the NA Modular segment to the NA Storage segment.
+Added: Rental unit sales increased $0.3 million, or 10.7%, and new unit sales decreased $2.5 million, or 65.8%.
+Added: NA Storage revenue drivers for the three months ended September 30, 2021 included:
+Added: • Portable storage average monthly rental rate of $155, increased 6.9% year over year as a result of our price management tools and processes, further supported by tight supply on portable storage containers in the markets in which we operate.
+Added: Modular space average monthly rental rate of $602, increased 19.2% year over year as a result of price optimization and early benefits from increased VAPS penetration opportunities.
+Added: • Average portable storage units on rent increased 31,902, or 30.3%, year over year driven by significant increases in delivery activity during 2021 as economic activity rebounded versus 2020.
+Added: NA Storage portable storage units on rent also increased as a result of the transitioning of the majority of the portable storage product business within the NA Modular segment to the NA Storage segment during the third quarter, which represented the transfer of approximately 12,000 units on rent.
+Added: Combined, average portable storage units on rent for the NA Storage and NA Modular segments increased approximately 16,922 units, or 14.0%.
+Added: Given the timing of acquisitions during the quarter, acquisition units did not have a material impact on average units on rent.
+Added: Average modular space units on rent were essentially flat year over year.
+Added: • Average portable storage monthly utilization increased 980 bps to 83.2% for the three months ended September 30, 2021, as compared to the three months ended September 30, 2020.
+Added: Average modular space monthly utilization decreased 280 bps to 77.6% for three months ended September 30, 2021, as compared to the three months ended September 30, 2020.
+Added: • Generated consolidated net income of $61.1 million for the three months ended September 30, 2021.
+Added: Net Income Excluding Gain/Loss from Warrants of $61.1 million for the three months ended September 30, 2021 represented an increase of $44.8 million versus the three months ended September 30, 2020, and included $11.1 million of discrete costs expensed in the period related to merger integration activities.
+Added: Discrete costs in the period included $8.6 million of integration and transaction costs and $2.5 million of restructuring costs, lease impairment expense and other related charges.
+Added: • Adjusted EBITDA of $190.1 million for the three months ended September 30, 2021 represented an increase of $26.5 million, or 16.2%, as compared to the same period in 2020.
+Added: This increase was driven primarily by increased leasing gross profit.
+Added: • Consolidated Adjusted EBITDA Margin was 38.8% in the third quarter of 2021 and decreased 50 bps versus prior year driven by an expected higher proportion of delivery and installation revenues to total revenues and increased variable costs as a result of higher activity levels in the current year quarter.
+Added: • Generated Free Cash Flow of $78.5 million for the three months ended September 30, 2021 representing an increase of $50.5 million as compared to the same period in 2020.
Net cash provided by operating activities increased $69.0 million to $130.4 million.
−Removed: Net cash used in investing activities increased by $21.1 million.
−Removed: • Returned $132.7 million to shareholders through stock and warrant repurchases during the three months ended June 30, 2021.
+Added: Net cash used in investing activities increased by $18.7 million to support increases in delivery activity during 2021 as economic activity rebounded versus 2020.
+Added: • Returned $106.3 million to shareholders through stock and warrant repurchases and closed three acquisitions totaling approximately 11,000 storage units and 400 modular units for $56.3 million in cash during the three months ended September 30, 2021.
The predictability of our free cash flow allows us to pursue multiple capital allocation priorities opportunistically, including investing in organic opportunities we see in the market, continuing our deleveraging trajectory, opportunistically executing accretive acquisitions, and returning capital to shareholders.
Consolidated Results of Operations
−Removed: Three Months Ended June 30, 2021 Compared to the Three Months Ended June 30, 2020
−Removed: Our condensed consolidated statements of operations for the three months ended June 30, 2021 and 2020 are presented below.
+Added: Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020
+Added: Our condensed consolidated statements of operations for the three months ended September 30, 2021 and 2020 are presented below.
The below results only include Mobile Mini for the periods subsequent to the Merger:
−Removed: Three Months Ended June 30, 2021 vs.
+Added: Three Months Ended September 30, 2021 vs.
2020 $ Change
24 unchanged sentences
Interest expense 29,201 33,034 (3,833)
−Removed: Fair value (gain) loss on common stock warrant liabilities (610) 26,963 (27,573)
+Added: Fair value loss on common stock warrant liabilities — 22,303 (22,303)
Loss on extinguishment of debt — 42,401 (42,401)
1 unchanged sentence
Income tax expense (benefit) 6,644 (66,675) 73,319
−Removed: Net income (loss) 20,371 (14,130) 34,501
−Removed: Net income attributable to non-controlling interest, net of tax — 1,343 (1,343)
Net income (loss) attributable to WillScot Mobile Mini $ 61,103 $ (6,051) $ 67,154
−Removed: Comparison of Three Months Ended June 30, 2021 and 2020
−Removed: Total revenue increased $204.2 million, or 79.5%, to $461.1 million for the three months ended June 30, 2021 from $256.9 million for the three months ended June 30, 2020.
−Removed: The increase was driven primarily by the addition of Mobile Mini's revenues to our consolidated results.
−Removed: The Merger closed on July 1, 2020, and drove $171.7 million of the year over year increase.
−Removed: Leasing revenue increased $153.0 million, or 80.5%, as compared to the same period in 2020 driven by an increase of 159,239 average modular space and portable storage units on rent as a result of the Merger, and improved pricing and value-added products in our NA Modular segment.
−Removed: Rental unit sales increased $9.9 million, or 186.8%, new unit sales increased $1.2 million, or 12.2%, and delivery and installation revenues increased $40.0 million, or 77.5%, due to increased overall activity as a result of the Merger.
−Removed: Total average units on rent for the three months ended June 30, 2021 and 2020 were 262,204 and 102,965, respectively.
−Removed: The increase was due to units acquired as part of the Merger, partially offset by lower units on rent in the NA Modular segment.
−Removed: In total, modular space average units on rent increased 23,372 units, or 26.8%, for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020.
−Removed: Modular space average monthly rental rates increased 10.0% to $736 for the three months ended June 30, 2021.
−Removed: Improved pricing was driven by an $132, or 19.7%, increase in the NA Modular segment, offset by the dilutive impact of lower rates on the Mobile Mini modular space units due to product mix.
−Removed: NA Modular segment increases were driven by a continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.
−Removed: Portable storage average units on rent increased by 135,867 units, or 856.2%, for the three months ended June 30, 2021 driven by units acquired as part of the Merger.
−Removed: Average portable storage monthly rental rates increased 15.8% to $139 for the three months ended June 30, 2021 driven by the accretive impact of higher rates from the Mobile Mini portable storage fleet.
−Removed: The average modular space unit utilization rate during the three months ended June 30, 2021 was 70.3%, as compared to 68.5% during the same period in 2020.
−Removed: This increase was driven by higher utilization on units acquired as part of the Merger.
−Removed: The average portable storage unit utilization rate during the three months ended June 30, 2021 was 77.7%, as compared to 62.5% during the same period in 2020.
−Removed: The increase in average portable storage utilization rate was driven by higher utilization on the acquired Mobile Mini units.
+Added: Comparison of Three Months Ended September 30, 2021 and 2020
+Added: Total revenue increased $73.3 million, or 17.6%, to $490.6 million for the three months ended September 30, 2021 from $417.3 million for the three months ended September 30, 2020.
+Added: Leasing revenue increased $63.3 million, or 21.1%, as compared to the same period in 2020 driven by improved pricing and value added products, and an increase of 19,408 average portable storage units on rent driven by significant increases in delivery activity during 2021 across portable storage units as economic activity rebounded versus 2020.
+Added: Delivery and installation revenues increased $15.0 million, or 17.7%, due to increased overall activity across all of our segments.
+Added: Rental unit sales decreased $1.6 million, or 12.1%, and new unit sales decreased $3.5 million, or 18.0%.
+Added: Total average units on rent for the three months ended September 30, 2021 and 2020 were 273,080 and 255,067, respectively, representing an increase of 18,013, or 7.1%.
+Added: Portable storage average units on rent increased by 19,408 units, or
+Added: 13.5%, for the three months ended September 30, 2021 driven by strong delivery growth in 2021 as a result of increased economic activity versus 2020.
+Added: The average portable storage unit utilization rate during the three months ended September 30, 2021 was 83.9%, as compared to 73.2% during the same period in 2020.
+Added: Modular space average units on rent decreased 1,395 units, or 1.3%, for the three months ended September 30, 2021 as compared to the three months ended September 30, 2020 driven by lower deliveries during 2020 as a result of the COVID-19 pandemic and delivery activity in 2021 has not rebounded as significantly for modular products as it has for portable storage products.
+Added: The average modular space unit utilization rate during the three months ended September 30, 2021 was 70.1%, as compared to 70.6% during the same period in 2020.
+Added: Modular space average monthly rental rates increased 19.8% to $767 for the three months ended September 30, 2021.
+Added: Improved pricing was achieved across all relevant segments.
+Added: Average modular space monthly rental rates increased by $141, or 20.3%, to $834 in the NA Modular segment, by $97, or 19.2%, in the NA Storage segment, and by $98, or 27.5% in the UK Storage segment.
+Added: Increases were driven by a continuation of the long-term price optimization and VAPS penetration opportunities across our NA Modular segment as well as by some early application of these same price management tools and processes across the NA Storage and UK Storage segments.
+Added: NA Storage also is beginning to see early benefits from increased VAPS penetration opportunities.
+Added: Average portable storage monthly rental rates increased 10.7% to $145 for the three months ended September 30, 2021 driven by our price management tools and processes, further supported by tight supply on portable storage containers in the markets in which we operate.
Gross Profit:
−Removed: Our gross profit percentage was 48.3% and 42.8% for the three months ended June 30, 2021 and 2020, respectively.
−Removed: Our gross profit percentage, excluding the effects of depreciation, was 62.0% and 60.5% for the three months ended June 30, 2021 and 2020, respectively.
−Removed: Gross profit increased $112.8 million, or 102.5%, to $222.8 million for the three months ended June 30, 2021 from $110.0 million for the three months ended June 30, 2020.
−Removed: The increase in gross profit is a result of a $117.7 million increase in leasing gross profit, increased delivery and installation gross profit of $6.3 million, and increased new and rental unit sale margins of $5.9 million.
−Removed: Increases in all were primarily a result of increased revenues due to the Merger and due to favorable average monthly rental rates in the NA Modular segment on modular space units.
−Removed: Increased delivery and installation margins were also driven by higher margins achieved in the NA Storage segment as compared to the NA Modular segment, partially offset by lower delivery and installation margins in the NA Modular segment as compared to the prior year driven by higher fleet relocation expenses.
−Removed: Depreciation increased $17.4 million as a result of fleet acquired in the Merger and capital investments made over the past twelve months in our existing rental equipment.
−Removed: Selling, general and administrative ("SG&A") increased $58.7 million, or 92.2%, to $122.4 million for the three months ended June 30, 2021, compared to $63.7 million for the three months ended June 30, 2020.
−Removed: The primary driver of the increase is related to additional SG&A costs related to operating a larger business as a result of the Merger.
−Removed: SG&A costs included in Adjusted EBITDA for the NA Storage, UK Storage, and Tank and Pump segments totaled $46.8 million for the three months ended June 30, 2021.
−Removed: Additionally, as a result of the Merger and the related integration, integration costs increased $5.4 million to $7.6 million for the three months ended June 30, 2021, compared to $2.2 million for the three months ended June 30, 2020, and stock compensation expense increased $2.5 million to $4.7 million for the three months ended June 30, 2021, compared to $2.2 million for the three months ended June 30, 2020.
+Added: Our gross profit percentage was 51.7% and 50.2% for the three months ended September 30, 2021 and 2020, respectively.
+Added: Our gross profit percentage, excluding the effects of depreciation, was 63.2% and 63.4% for the three months ended September 30, 2021 and 2020, respectively.
+Added: Gross profit increased $44.0 million, or 21.0%, to $253.5 million for the three months ended September 30, 2021 from $209.6 million for the three months ended September 30, 2020.
+Added: The increase in gross profit is a result of a $45.7 million increase in leasing gross profit and increased delivery and installation gross profit of $0.4 million, partially offset by decreased new and rental unit sale margins of $0.5 million.
+Added: Increases were primarily a result of increased revenues due to favorable average monthly rental rates across both portable storage and modular space units, as well as due to increased portable storage units on rent, partially offset by increased variable costs during the period as a result of increased delivery activity.
+Added: Depreciation increased $1.6 million as a result of capital investments made over the past twelve months in our existing rental equipment.
+Added: Selling, general and administrative ("SG&A") increased $21.3 million, or 19.0%, to $133.4 million for the three months ended September 30, 2021, compared to $112.1 million for the three months ended September 30, 2020.
+Added: Approximately $6.9 million of the increase is related to variable compensation and commissions related to increased delivery activity and financial performance with other increases in occupancy costs, insurance costs, and increased travel and entertainment costs as travel reopened a bit more as compared to 2020.
+Added: Additionally, as a result of the Merger and the related integration, integration costs increased $1.1 million to $8.2 million for the three months ended September 30, 2021, compared to $7.1 million for the three months ended September 30, 2020, and stock compensation expense increased $3.4 million to $6.3 million for the three months ended September 30, 2021, compared to $2.9 million for the three months ended September 30, 2020.
Transaction Costs:
−Removed: Transaction costs decreased from $1.6 million for the three months ended June 30, 2020 to $0 for the three months ended June 30, 2021.
−Removed: Transaction costs were related to the Merger which closed on July 1, 2020.
+Added: Transaction costs decreased from $52.2 million for the three months ended September 30, 2020 to $0.3 million for the three months ended September 30, 2021.
+Added: Transaction costs for the three months ended September 30, 2020 were related to the Merger which closed on July 1, 2020.
Other Depreciation and Amortization:
−Removed: Other depreciation and amortization increased $18.7 million to $21.6 million for the three months ended June 30, 2021 compared to $2.9 million for the three months ended June 30, 2020.
−Removed: $12.2 million of the increase was driven by increased depreciation as a result of the inclusion of Mobile Mini subsequent to the Merger and our recent investments in our enterprise resource planning system, and $6.6 million was driven by the amortization of the customer relationship intangible assets acquired in the Merger.
+Added: Other depreciation and amortization increased $1.9 million to $18.8 million for the three months ended September 30, 2021 compared to $16.9 million for the three months ended September 30, 2020.
+Added: The increase was driven by increased depreciation as a result of our recent investments in our enterprise resource planning system and other infrastructure investments across our branch network.
Lease Impairment Expense and Other Related Charges:
−Removed: Lease impairment expense and other related charges was $0.5 million for the three months ended June 30, 2021 as compared to $1.4 million for the three months ended June 30, 2020.
+Added: Lease impairment expense and other related charges was $0.6 million for the three months ended September 30, 2021 as compared to $0.9 million for the three months ended September 30, 2020.
Restructuring Costs:
−Removed: In the three months ended June 30, 2021, the Company had $7.0 million of restructuring costs primarily driven by employee termination costs as a result of the elimination of positions due to the Merger.
−Removed: $4.3 million of the employee termination costs will be settled in stock, which is non-cash and non-recurring and not included in stock compensation expense.
−Removed: In the three months ended June 30, 2020, the Company had $0.7 million of restructuring costs primarily related to employee termination costs due to reductions in force across our branch network in response to COVID-19 economic conditions.
+Added: In the three months ended September 30, 2021, the Company had $1.9 million of restructuring costs.
+Added: In the three months ended September 30, 2020, the Company had $3.9 million of restructuring costs.
+Added: Restructuring costs in both periods were primarily driven by employee termination costs as a result of the elimination of positions due to the Merger.
Currency Losses (Gains), net:
−Removed: Currency losses, net changed by $0.4 million to $0 for the three months ended June 30, 2021 from a $0.4 million gain for the three months ended June 30, 2020.
+Added: Currency losses, net changed by $0.5 million to a $0.1 million loss for the three months ended September 30, 2021 from a $0.4 million gain for the three months ended September 30, 2020.
This change was primarily attributable to the impact of foreign currency exchanges rate changes on intercompany receivables and payables denominated in a currency other than the subsidiary's functional currency.
Other Expense (Income), Net:
−Removed: Other expense (income), net was expense of $0.7 million for the three months ended June 30, 2021 compared to income of $1.0 million for the three months ended June 30, 2020.
−Removed: Other income, net of $1.0 million for the three months ended June 30, 2020 reflected the reversal of a non-income tax liability of $1.3 million.
+Added: Other expense (income), net was expense of $1.5 million for the three months ended September 30, 2021 compared to income of $1.0 million for the three months ended September 30, 2020.
+Added: Other expense, net
+Added: of $1.5 million for the three months ended September 30, 2021 is primarily related to losses incurred related to Hurricane Ida in the Gulf Coast area of the United States, and other income, net of $1.0 million for the three months ended September 30, 2020 reflected the reversal of a non-income tax liability of $1.3 million.
Interest Expense:
−Removed: Interest expense increased $0.7 million, or 2.5%, to $29.2 million for the three months ended June 30, 2021 from $28.5 million for the three months ended June 30, 2020.
−Removed: The increase in interest expense is a result of the Merger which increased total debt outstanding at June 30, 2021 by approximately $286.4 million compared to June 30, 2020, offset by lower overall weighted average interest rates as a result of our financing activities over the past 12 months.
+Added: Interest expense decreased $3.8 million, or 11.5%, to $29.2 million for the three months ended September 30, 2021 from $33.0 million for the three months ended September 30, 2020.
+Added: The decrease in interest expense is a result of the lower overall weighted average interest rates as a result of our financing activities.
See Note 9 to the condensed consolidated financial statements for further discussion of our debt.
−Removed: Fair Value (Gain) Loss on Common Stock Warrant Liabilities:
−Removed: The fair value (gain) loss on common stock warrant liabilities increased $27.6 million to a $0.6 million gain for the three months ended June 30, 2021 from a $27.0 million loss for the three months ended June 30, 2020.
−Removed: The increase was primarily due to the change in estimated fair value of common stock warrant liabilities.
−Removed: As of June 30, 2021, no 2015 Public or Private Warrants remain outstanding.
−Removed: At June 30, 2021, 7,165,911 2018 Warrants were outstanding, but are classified as equity, so we will not reflect a common stock warrant liability on our balance sheet or related gain or loss from changes in fair value on our statement of operations in the future.
+Added: Fair Value Loss on Common Stock Warrant Liabilities:
+Added: The fair value loss on common stock warrant liabilities was a $22.3 million loss for the three months ended September 30, 2020.
+Added: The loss for the three months ended September 30, 2020 was primarily due to the change in estimated fair value of common stock warrant liabilities.
+Added: At September 30, 2021, no 2015 Public or Private Warrants were outstanding, and as a result, there was no fair value loss on common stock warrant liabilities recorded for the three months ended September 30, 2021.
+Added: At September 30, 2021, 6,525,736 2018 Warrants were outstanding and classified as a component of equity, therefore, we will not reflect a common stock warrant liability on our balance sheet or related income or expense from changes in fair value on our statement of operations in the future.
Loss on Extinguishment of Debt:
−Removed: During the three months ended June 30, 2021, using internally generated cash and lower cost borrowings under the 2020 ABL Facility, the Company redeemed 10% of the outstanding principal, $58.5 million, of its 2025 Secured Notes and recorded a loss on extinguishment of debt of $2.8 million comprised of a redemption premium of $1.8 million and write off of unamortized deferred financing fees of $1.0 million.
+Added: During the three months ended September 30, 2020, as a result of the Merger and the related financing transactions, we recorded a loss on extinguishment of debt of $42.4 million.
+Added: This loss was comprised of the redemption premium and write off of unamortized deferred financing costs associated with the following:
+Added: (i) $15.2 million due to the redemption of the 2022 Secured Notes, (ii) $22.7 million due to the redemption of the 2023 Secured Notes, and (iii) $4.4 million associated with the 2017 ABL Facility.
Income Tax Expense:
−Removed: Income tax expense increased $19.1 million to an expense of $18.8 million for the three months ended June 30, 2021 compared to a benefit of $0.3 million for the three months ended June 30, 2020.
−Removed: $8.0 million of the increase was non-cash driven by an increase of the UK statutory rate to 25% resulting in an increase in our deferred tax liability.
−Removed: The remaining increases were driven by increases to income during the period and permanent add-backs related to the mark to market accounting on the Company’s warrants, as well as by prior year tax benefits from the reversal of the Company's valuation allowance not repeated in the current year period.
−Removed: Six Months Ended June 30, 2021 Compared to the Six Months Ended June 30, 2020
−Removed: Our condensed consolidated statements of operations for the six months ended June 30, 2021 and 2020 are presented below.
+Added: Income tax expense increased $73.3 million to an expense of $6.6 million for the three months ended September 30, 2021 compared to a benefit of $66.7 million for the three months ended September 30, 2020.
+Added: The increase in expense was driven by pre-tax income increase for the three months ended September 30, 2021.
+Added: Additionally, a $54.1 million tax benefit was recorded in three months ended September 30, 2020 due to the reversal of the Company's valuation allowance after the Merger.
+Added: Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020
+Added: Our condensed consolidated statements of operations for the nine months ended September 30, 2021 and 2020 are presented below.
The below results only include Mobile Mini for the periods subsequent to the Merger:
−Removed: Six Months Ended June 30, 2021 vs.
+Added: Nine Months Ended September 30, 2021 vs.
2020 $ Change
21 unchanged sentences
Currency losses, net 196 147 49
−Removed: Other income, net (1,269) (745) (524)
+Added: Other expense (income), net 207 (1,757) 1,964
Operating income 242,847 91,452 151,395
3 unchanged sentences
Income before income tax 121,874 5,304 116,570
−Removed: Income tax expense 29,309 505 28,804
+Added: Income tax expense (benefit) 35,953 (66,170) 102,123
Net income 85,921 71,474 14,447
1 unchanged sentence
Net income attributable to WillScot Mobile Mini $ 85,921 $ 70,261 $ 15,660
−Removed: Comparison of Six Months Ended June 30, 2021 and 2020
−Removed: Total revenue increased $373.7 million, or 72.9%, to $886.4 million for the six months ended June 30, 2021 from $512.7 million for the six months ended June 30, 2020.
−Removed: The increase was driven primarily by the addition of Mobile Mini's revenues to our consolidated results.
−Removed: The Merger closed on July 1, 2020, and drove $330.8 million of the year over year increase.
−Removed: Leasing revenue increased $280.3 million, or 74.1%, as compared to the same period in 2020 driven by an increase of 155,368 average modular space and portable storage units on rent as a result of the Merger and improved pricing and value-added products in our NA Modular segment.
−Removed: Rental unit sales increased $18.3 million, or 151.2%, new unit sales increased $2.6 million, or 13.4%, and delivery and installation revenues increased $72.5 million, or 70.6%, due to increased overall activity as a result of the Merger and increased activity in our NA Modular segment in 2021.
−Removed: Total average units on rent for the six months ended June 30, 2021 and 2020 were 259,024 and 103,656, respectively.
−Removed: The increase was due to units acquired as part of the Merger, partially offset by lower units on rent in the NA Modular segment.
−Removed: In total, modular space average units on rent increased 22,829 units, or 26.1%, for the six months ended June 30, 2021 as compared to the three months ended June 30, 2020.
−Removed: Modular space average monthly rental rates increased 6.4% to $703 for the six months ended June 30, 2021.
−Removed: Improved pricing was driven by an $108, or 16.3%, increase in the NA Modular segment, offset by the dilutive impact of lower rates on the Mobile Mini modular space units due to product mix.
−Removed: NA Modular segment increases were driven by a continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.
−Removed: Portable storage average units on rent increased by 132,539 units, or 822.5%, for the six months ended June 30, 2021 driven by units acquired as part of the Merger.
−Removed: Average portable storage monthly rental rates increased 14.2% to $137 for the six months ended June 30, 2021 driven by the accretive impact of higher rates from the Mobile Mini portable storage fleet.
−Removed: The average modular space unit utilization rate during the six months ended June 30, 2021 was 70.3%, as compared to 68.9% during the same period in 2020.
+Added: Comparison of Nine Months Ended September 30, 2021 and 2020
+Added: Total revenue increased $447.0 million, or 48.1%, to $1,377.0 million for the nine months ended September 30, 2021 from $930.0 million for the nine months ended September 30, 2020.
+Added: The increase was driven by the addition of Mobile Mini's revenues to our consolidated results for the full year, as well as by increased activity in the third quarter of 2021.
+Added: The Merger closed on July 1, 2020, and the addition of Mobile Mini's results for the first and second quarter of 2021 drove a $330.8 million year over year increase.
+Added: Leasing revenue increased $343.7 million, or 50.6%, as compared to the same period in 2020 driven by an increase of 109,542 average modular space and portable storage units on rent as a result of the Merger and increased economic activity, and improved pricing and value added products in our NA Modular segment.
+Added: Delivery and installation revenues increased $87.5 million, or 46.7%, due to increased overall activity as a result of the Merger and increased activity in 2021.
+Added: Rental unit sales increased $16.8 million, or 66.4%, and new unit sales decreased $0.9 million, or 2.3%.
+Added: Total average units on rent for the nine months ended September 30, 2021 and 2020 were 263,664 and 154,122, respectively.
+Added: The increase was due to units acquired as part of the Merger, and increased units on rent year over year in the third quarter on portable storage units.
+Added: In total, modular space average units on rent increased 14,779 units, or 15.5%, for the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020.
+Added: Modular space average monthly rental rates increased 11.3% to $727 for the nine months ended September 30, 2021.
+Added: Portable storage average units on rent increased by 94,763 units, or 161.5%, for the nine months ended September 30, 2021 driven by units acquired as part of the Merger and increased units on rent year over year in the third quarter.
+Added: Average portable storage monthly rental rates increased 8.5% to $140 for the nine months ended September 30, 2021 driven by the accretive impact of higher rates from the Mobile Mini portable storage fleet and year over year increases during the third quarter.
+Added: The average modular space unit utilization rate during the nine months ended September 30, 2021 was 70.2%, as compared to 69.8% during the same period in 2020.
This increase was driven by higher utilization on units acquired as part of the Merger.
−Removed: The average portable storage unit utilization rate during the six months ended June 30, 2021 was 76.1%, as compared to 63.5% during the same period in 2020.
−Removed: The increase in average portable storage utilization rate was driven by higher utilization on the acquired Mobile Mini units.
+Added: The average portable storage unit utilization rate during the nine months ended September 30, 2021 was 78.7%, as compared to 71.3% during the same period in 2020.
+Added: The increase in average portable storage utilization rate was driven by higher utilization on the acquired Mobile Mini units and continued improvement in portable storage utilization rates year over year in the third quarter.
Gross Profit:
−Removed: Our gross profit percentage was 49.2% and 42.2% for the six months ended June 30, 2021 and 2020, respectively.
−Removed: Our gross profit percentage, excluding the effects of depreciation, was 62.6% and 60.0% for the six months ended June 30, 2021 and 2020, respectively.
−Removed: Gross profit increased $220.0 million, or 101.8%, to $436.2 million for the six months ended June 30, 2021 from $216.2 million for the six months ended June 30, 2020.
+Added: Our gross profit percentage was 50.1% and 45.8% for the nine months ended September 30, 2021 and 2020, respectively.
+Added: Our gross profit percentage, excluding the effects of depreciation, was 62.8% and 61.5% for the nine months ended September 30, 2021 and 2020, respectively.
+Added: Gross profit increased $264.0 million, or 62.0%, to $689.7 million for the nine months ended September 30, 2021 from $425.7 million for the nine months ended September 30, 2020.
The increase in gross profit is a result of a $270.6 million increase in leasing gross profit, increased delivery and installation gross profit of $12.9 million, and increased new and rental unit sale margins of $9.2 million.
−Removed: Increases in all were primarily a result of increased revenues due to the Merger and due to favorable average monthly rental rates in the NA Modular segment on modular space units.
−Removed: Increased delivery and installation margins were also driven by higher margins achieved in the NA Storage segment as compared to the NA Modular segment, partially offset by lower delivery and installation margins in the NA Modular segment as compared to the prior year driven by higher fleet relocation expenses.
+Added: Increases in all were primarily a result of increased revenues due to the Merger and due to favorable average monthly rental rates on modular space and portable storage units, as well as favorable year over year volumes on portable storage units in the third quarter.
Depreciation increased to $175.1 million as a result of fleet acquired in the Merger and capital investments made in our existing rental equipment.
−Removed: Selling, general and administrative ("SG&A") increased $109.7 million, or 84.9%, to $238.9 million for the six months ended June 30, 2021, compared to $129.2 million for the six months ended June 30, 2020.
+Added: Selling, general and administrative ("SG&A") increased $131.0 million, or 54.3%, to $372.3 million for the nine months ended September 30, 2021, compared to $241.3 million for the nine months ended September 30, 2020.
The primary driver of the increase is related to additional SG&A costs related to operating a larger business as a result of the Merger.
−Removed: SG&A costs included in Adjusted EBITDA for the NA Storage, UK Storage, and Tank and Pump segments totaled $89.9 million for the six months ended June 30, 2021.
−Removed: Additionally, as a result of the Merger and the related integration, integration costs increased $11.2 million to $15.0 million for the six months ended June 30, 2021, compared to $3.8 million for the six months ended June 30, 2020 and stock compensation expense increased $4.2 million to $8.2 million for the six months ended June 30, 2021, compared to $4.0 million for the six months ended June 30, 2020.
+Added: The Merger closed on July 1, 2020, and SG&A costs included in Adjusted EBITDA for the NA Storage, UK Storage, and Tank and Pump segments in the first and second quarters of 2021 drove $89.9 million of the year over year increase.
+Added: Additionally, as a result of the Merger and the related integration, integration costs increased $12.3 million to $23.2 million for the nine months ended September 30, 2021, compared to $10.9 million for the nine months ended September 30, 2020 and stock compensation expense increased $7.5 million to $14.5 million for the nine months ended September 30, 2021, compared to $7.0 million for the nine months ended September 30, 2020.
+Added: The primary driver of the remaining increases are related to additional SG&A costs related to increased economic activity, including increased employee and occupancy costs, insurance costs, and increased travel and entertainment costs as travel reopened a bit more as compared to 2020.
Transaction Costs:
−Removed: Transaction costs decreased $10.3 million to $0.8 million for the six months ended June 30, 2021 compared to $11.1 million for the six months ended June 30, 2020.
−Removed: Transaction costs were related to the Merger which closed on July 1, 2020.
+Added: Transaction costs decreased $62.1 million to $1.1 million for the nine months ended September 30, 2021 compared to $63.2 million for the nine months ended September 30, 2020.
+Added: Transaction costs for the nine months ended September 30, 2020 were related to the Merger which closed on July 1, 2020.
Other Depreciation and Amortization:
−Removed: Other depreciation and amortization increased $33.9 million to $39.9 million for the six months ended June 30, 2021 compared to $6.0 million for the six months ended June 30, 2020 driven by increased depreciation and amortization as a result of property, plant and equipment and intangible assets acquired in the Merger and our recent investments in our enterprise resource planning system, and $13.0 million was driven by the amortization of the customer relationship intangible assets acquired in the Merger.
+Added: Other depreciation and amortization increased $36.0 million to $58.8 million for the nine months ended September 30, 2021 compared to $22.8 million for the nine months ended September 30, 2020 driven by increased depreciation and amortization as a result of property, plant and equipment and intangible assets acquired in the Merger and our recent investments in our enterprise resource planning system, and the amortization of the customer relationship intangible assets acquired in the Merger.
Lease Impairment Expense and Other Related Charges:
−Removed: Lease impairment expense and other related charges was $1.7 million for the six months ended June 30, 2021 as compared to $3.1 million for the six months ended June 30, 2020.
+Added: Lease impairment expense and other related charges was $2.3 million for the nine months ended September 30, 2021 as compared to $4.0 million for the nine months ended September 30, 2020.
Restructuring Costs:
−Removed: In the six months ended June 30, 2021, the Company had $10.1 million of restructuring costs primarily as a result of employee termination costs from of the elimination of positions due to the Merger.
−Removed: $5.8 million of the employee termination costs will be settled in stock, which is non-cash and non-recurring and not included in stock compensation expense.
−Removed: In the six months ended June 30, 2020, $0.7 million of restructuring costs were primarily due to reductions in force across our branch network in response to COVID-19 economic conditions.
+Added: In the nine months ended September 30, 2021, the Company had $12.0 million of restructuring costs primarily as a result of employee termination costs from the elimination of positions due to the Merger.
+Added: $7.2 million of the employee termination costs were settled in stock, which is non-cash and non-recurring and not included in stock compensation expense.
+Added: In the nine months ended September 30, 2020, $4.5 million of restructuring costs were primarily due to employee termination costs as a result of the Merger and, to a lesser extent, reductions in force across our branch network in response to COVID-19 economic conditions.
Currency Losses, Net:
−Removed: Currency losses, net decreased by $0.4 million to a $0.1 million loss for the six months ended June 30, 2021 from a $0.5 million loss for the six months ended June 30, 2020.
−Removed: This decrease was primarily attributable to the impact of foreign currency exchanges rate changes on intercompany receivables and payables denominated in a currency other than the subsidiary's functional currency.
−Removed: Other Income, Net:
−Removed: Other income, net was $1.3 million for the six months ended June 30, 2021 compared to $0.7 million for the six months ended June 30, 2020.
−Removed: The increase was primarily attributable to an increase the gain on sale of assets in the six months ended June 30, 2021 as compared to the six months ended June 30, 2020.
+Added: Currency losses, net increased by $0.1 million to a $0.2 million loss for the nine months ended September 30, 2021 from a $0.1 million loss for the nine months ended September 30, 2020.
+Added: This increase was primarily attributable to the impact of foreign currency exchanges rate changes on intercompany receivables and payables denominated in a currency other than the subsidiary's functional currency.
+Added: Other Expense (Income), Net:
+Added: Other expense (income), net was $0.2 million of expense for the nine months ended September 30, 2021 compared to $1.8 million of income for the nine months ended September 30, 2020.
+Added: Other income, net of $1.8 million for the nine months ended September 30, 2020 was primarily related to the reversal of a non-income tax liability of $2.5 million.
Interest Expense:
−Removed: Interest expense increased $2.4 million to $59.2 million for the six months ended June 30, 2021 from $56.8 million for the six months ended June 30, 2020.
−Removed: The increase in interest expense was a result of the Merger which increased debt outstanding at June 30, 2021 by approximately $286.4 million compared to June 30, 2020, offset by lower overall weighted average interest rates as a result of our financing activities over the past 12 months.
+Added: Interest expense decreased $1.4 million to $88.4 million for the nine months ended September 30, 2021 from $89.8 million for the nine months ended September 30, 2020.
+Added: The decrease in interest expense was a result of the lower overall weighted average interest rates as a result of our financing activities.
See Note 9 to the condensed consolidated financial statements for further discussion of our debt.
Fair Value Loss (Gain) on Common Stock Warrant Liabilities:
−Removed: The fair value loss (gain) on common stock warrant liabilities increased $95.0 million to a $26.6 million loss for the six months ended June 30, 2021 from a $68.4 million gain for the six months ended June 30, 2020.
+Added: The fair value loss (gain) on common stock warrant liabilities increased $72.7 million to a $26.6 million loss for the nine months ended September 30, 2021 from a $46.1 million gain for the nine months ended September 30, 2020.
The increase was primarily due to the change in estimated fair value of common stock warrant liabilities.
−Removed: As of June 30, 2021, no 2015 Public or Private Warrants remain outstanding.
−Removed: At June 30, 2021, 7,165,911 2018 Warrants were outstanding, but are treated as equity, so we will not reflect a common stock warrant liability on our balance sheet or related income or expense from changes in fair value on our statement of operations in the future.
+Added: At September 30, 2021, no 2015 Public or Private Warrants remain outstanding.
+Added: At September 30, 2021, 6,525,736 2018 Warrants were outstanding and classified as a component of equity, therefore, we will not reflect a common stock warrant liability on our balance sheet or related income or expense from changes in fair value on our statement of operations in the future.
Loss on Extinguishment of Debt:
−Removed: During the six months ended June 30, 2021, the Company redeemed $123.5 million of the outstanding principal of its 2025 Secured Notes and recorded a loss on extinguishment of debt of $6.0 million comprised of a redemption premium of $3.7 million and write off of unamortized deferred financing fees of $2.3 million.
+Added: During the nine months ended September 30, 2021, we redeemed $123.5 million of the outstanding principal of our 2025 Secured Notes and recorded a loss on extinguishment of debt of $6.0 million comprised of a redemption premium of $3.7 million and write off of unamortized deferred financing fees of $2.3 million.
+Added: As a result of the Merger and the related financing transactions, we recorded a loss on extinguishment of debt of $42.4 million in the nine months ended September 30, 2020.
+Added: This loss on extinguishment of debt was comprised of the redemption premium and write off of unamortized deferred financing costs associated with the following:
+Added: (i) $15.2 million due to the redemption of the 2022 Secured Notes, (ii) $22.7 million due to the redemption of the 2023 Secured Notes, and (iii) $4.4 million associated with the 2017 ABL Facility.
Income Tax Expense:
−Removed: Income tax expense increased $28.8 million to $29.3 million for the six months ended June 30, 2021 compared to $0.5 million for the six months ended June 30, 2020.
−Removed: The increase was driven by increases to income during the period and permanent add-backs related to the mark to market accounting on the Company’s warrants and the impact of UK statutory rate increases, as well as by prior year tax benefits from the reversal of the Company's valuation allowance not repeated in the current year period.
+Added: Income tax expense increased $102.2 million to expense of $36.0 million for the nine months ended September 30, 2021 compared to a benefit of $66.2 million for the nine months ended September 30, 2020.
+Added: The increase in expense was driven by pre-tax income increase for the nine months ended September 30, 2021.
+Added: Additionally, a $56.8 million tax benefit was recorded in nine months ended September 30, 2020 due to the reversal of the Company's valuation allowance after the merger with Mobile Mini.
Business Segment Results
3 unchanged sentences
The NA Storage, UK Storage and Tank and Pump segments align to the three segments reported by Mobile Mini prior to the Merger.
−Removed: The following tables and discussion summarize our reportable segment financial information for the three and six months ended June 30, 2021 and 2020.
+Added: During the third quarter of 2021, the majority of the portable storage product business within the NA Modular segment was transitioned to the NA Storage segment, and associated revenues, expenses, and operating metrics beginning in the third quarter of 2021 were transferred to the NA Storage segment, representing a shift of approximately $5.0 million of revenue and gross margin per quarter from the NA Modular segment to the NA Storage segment.
+Added: This adjustment was not made to the historical segment results of prior periods, given its relative immateriality.
+Added: The following tables and discussion summarize our reportable segment financial information for the three and nine months ended September 30, 2021 and 2020.
The below results only include Mobile Mini for the periods subsequent to the Merger.
−Removed: A Summary Business Segment Supplemental Unaudited Pro Forma Financial Information section has been included in this MD&A in order to provide period over period comparable financial information for the NA Storage, UK Storage and Tank and Pump reporting segments as these segments were not included in our reported results for the three and six months ended June 30, 2020.
−Removed: Comparison of Three Months Ended June 30, 2021 and 2020
−Removed: Three Months Ended June 30, 2021
+Added: A Summary Business Segment Supplemental Unaudited Pro Forma Financial Information section has been included in this MD&A in order to provide period over period comparable financial information for the NA Storage, UK Storage and Tank and Pump reporting segments as these segments were not included in our reported results for the first six months of 2020.
+Added: Comparison of Three Months Ended September 30, 2021 and 2020
+Added: Three Months Ended September 30, 2021
(in thousands, except for units on rent and rates)
11 unchanged sentences
Average tank and pump solutions rental fleet utilization based on original equipment cost — % — % — % 74.8 % 74.8 %
−Removed: Three Months Ended June 30, 2020
+Added: Three Months Ended September 30, 2020
(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and Pump Total
10 unchanged sentences
Average tank and pump solutions rental fleet utilization based on original equipment cost — % — % — % 58.2 % 58.2 %
−Removed: Total revenue increased $32.5 million, or 12.7%, to $289.4 million for the three months ended June 30, 2021 from $256.9 million for the three months ended June 30, 2020.
−Removed: The increase was primarily the result of a $27.5 million, or 14.5%, increase in leasing revenue, a $4.6 million, or 85.2%, increase in rental unit sales revenue and a $3.3 million, or 6.4% increase in modular delivery and installation revenue.
−Removed: This increase was partially offset by a decrease of $2.9 million, or 29.6%, in new unit sales.
−Removed: Average modular space monthly rental rates increased 19.7% for the three months ended June 30, 2021 to $801 driven by the continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.
+Added: Total revenue increased $31.2 million, or 11.6%, to $299.1 million for the three months ended September 30, 2021 from $267.9 million for the three months ended September 30, 2020.
+Added: The increase was primarily the result of a $27.5 million, or 14.3%, increase in leasing revenue, and a $5.9 million, or 11.3% increase in modular delivery and installation revenue.
+Added: The increases to leasing revenue and delivery and installation revenues were partially offset by declines in revenues for portable storage units as a result of transitioning the majority of the portable storage product business within the NA Modular segment to the NA Storage segment.
+Added: Approximately 12,000 units were transferred during the third quarter to the NA Storage segment, reallocating approximately $5.0 million of revenue from NA Modular to NA Storage relative to the third quarter of 2020.
+Added: The increases to leasing revenue and delivery and installation revenues were also partially offset by a decrease of $1.8 million, or 18.8%, in rental unit sales revenue and a $0.5 million, or 3.6%, decrease in new unit sales.
+Added: Average modular space monthly rental rates increased 20.3% for the three months ended September 30, 2021 to $834 driven by the continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.
Improved pricing was partially offset by lower volumes as average modular space units on rent decreased by 2,182 units, or 2.5%, year over year.
The decrease was driven primarily by reduced demand for new project deliveries as a result of the COVID-19 pandemic primarily in the second and third quarter of 2020.
+Added: Economic activity in 2021 has improved and sequentially from June 30, 2021, modular space units on rent increased approximately 700 units, or 0.8% during the third quarter.
Gross Profit:
−Removed: Gross profit increased $6.1 million, or 5.5%, to $116.1 million for the three months ended June 30, 2021 from $110.0 million for the three months ended June 30, 2020.
−Removed: The increase in gross profit was driven by higher leasing gross profit, which increased $13.4 million, or 9.4%, driven from improved pricing including VAPS.
−Removed: The increase in gross profit from leasing for the three months ended June 30, 2021 was further complemented by a $3.4 million increase in rental unit sales gross profit.
+Added: Gross profit increased $15.8 million, or 14.1%, to $127.9 million for the three months ended September 30, 2021 from $112.1 million for the three months ended September 30, 2020.
+Added: The increase in gross profit was driven by higher leasing gross profit, which increased $17.7 million, or 12.4%, driven from improved pricing including VAPS, and partly offset by the reallocation of approximately $5.0 million of revenue and gross profit from NA Modular segment to the NA Storage segment relative to the third quarter of 2020.
+Added: The increase in gross profit from leasing for the three months ended September
+Added: 30, 2021 was further complemented by a $1.1 million increase in rental unit sales gross profit.
These increases were partially offset by a $1.3 million decrease in delivery and installation gross profit driven by higher fleet relocation expenses, a $1.1 million decrease in new sales gross profit, and a $0.6 million increase in depreciation of rental equipment related to capital investments made in our existing rental equipment.
Adjusted EBITDA:
−Removed: Adjusted EBITDA increased $6.0 million, or 6.2%, to $103.5 million for the three months ended June 30, 2021 from $97.5 million for the three months ended June 30, 2020.
−Removed: The increase was driven by higher leasing gross
−Removed: profit discussed above.
−Removed: SG&A, excluding discrete items, increased $4.1 million, or 6.9%, for the three months ended June 30, 2021, as compared to the three months ended June 30, 2020.
+Added: Adjusted EBITDA increased $6.5 million, or 6.5%, to $106.8 million for the three months ended September 30, 2021 from $100.3 million for the three months ended September 30, 2020.
+Added: The increase was driven by higher leasing gross profit discussed above.
+Added: SG&A, excluding discrete items, increased $7.6 million, or 12.9%, for the three months ended September 30, 2021, as compared to the three months ended September 30, 2020.
Capital Expenditures for Rental Equipment:
−Removed: Purchases of rental equipment and refurbishments increased $9.4 million, or 23.5%, to $49.4 million for the three months ended June 30, 2021 from $40.0 million for the three months ended June 30, 2020.
−Removed: Net CAPEX, as defined below in Item 2.
−Removed: Other Non-GAAP Financial Data and Reconciliations, also increased $2.0 million, or 5.4%, to $38.3 million.
−Removed: The increase for Net CAPEX was driven by increased capital investment during the period related to increased demand activity, partially offset from increased sales of rental units and plant, property and equipment, including real estate sold during the period.
−Removed: Comparison of the Six Months Ended June 30, 2021 and 2020
−Removed: Six Months Ended June 30, 2021
+Added: Purchases of rental equipment and refurbishments decreased $2.4 million, or 7.0%, to $31.8 million for the three months ended September 30, 2021 from $34.2 million for the three months ended September 30, 2020.
+Added: Total revenue increased $29.4 million, or 28.1%, to $133.9 million for the three months ended September 30, 2021 from $104.5 million for the three months ended September 30, 2020.
+Added: Leasing revenues increased $24.2 million in the current quarter compared to the prior-year quarter.
+Added: Modular space average units on rent decreased 0.4% and average modular space monthly rental rates increased 19.2% year-over-year driven primarily by increased pricing on new deliveries.
+Added: Portable storage units on rent increased 30.3% driven by increased economic activity.
+Added: NA Storage portable storage units on rent also increased as a result of the transitioning of the majority of the portable storage product business within the NA Modular segment to the NA Storage segment during the third quarter, which represented the transfer of approximately 12,000 units on rent.
+Added: Combined, average portable storage units on rent for the NA Storage and NA Modular segments increased approximately 16,922 units, or 14.0%.
+Added: Given the timing of acquisitions during the quarter, acquisition units did not have a material impact on average units on rent.
+Added: Average portable storage monthly rental rates increased 6.9% year-over-year also as a result of increased pricing on new deliveries.
+Added: Delivery and installation revenues increased $7.4 million year-over-year as delivery levels have increased as a result of economic recovery.
+Added: Sales revenues decreased $2.2 million compared to the prior-year quarter.
+Added: Gross Profit:
+Added: Gross profit increased by $19.1 million, or 26.0%, to $92.5 million for the three months ended September 30, 2021 compared to $73.4 million for the three months ended September 30, 2020.
+Added: Gross profit on leasing activity increased by $18.9 million year-over-year driven both by increased volume and pricing as described above.
+Added: For delivery and installation, gross profit increased $1.3 million.
+Added: Sales gross profit decreased by $0.2 million to $2.1 million.
+Added: Adjusted EBITDA:
+Added: Adjusted EBITDA increased $12.6 million, or 27.1%, to $59.1 million for the three months ended September 30, 2021 from $46.5 million for the three months ended September 30, 2020 and the margin contracted to 44.2% from 44.5% as a result of increased delivery activity.
+Added: The increase in Adjusted EBITDA was driven primarily by increased leasing gross profit as described above, partially offset by increased SG&A.
+Added: Excluding acquisition costs and stock-based compensation, SG&A increased $7.3 million in this segment.
+Added: The increase was comprised of increased costs for personnel, including commissions and other variable compensation, travel, and computer costs.
+Added: Capital Expenditures for Rental Equipment:
+Added: Purchases of rental equipment and refurbishments of $11.9 million were $4.7 million higher than the prior-year quarter driven by increased fleet investments for specific products, largely portable storage units and ground level offices, to grow units on rent as demand has recovered to pre-COVID-19 levels.
+Added: Total revenue increased $6.4 million, or 29.5%, to $28.1 million for the three months ended September 30, 2021 from $21.7 million for the three months ended September 30, 2020.
+Added: In local currency total revenues increased 21.7%.
+Added: Leasing revenues increased $6.3 million in the current quarter compared to the prior-year quarter.
+Added: Modular space average units on rent increased 10.1%, while portable storage units on rent increased 10.7%.
+Added: Average monthly rental rates for modular space units and portable storage units increased 27.5% and 20.0% year-over-year, respectively, including the impacts of currency fluctuations.
+Added: Delivery and installation revenues increased $0.9 million year-over-year.
+Added: Sales revenues decreased $0.7 million compared to the prior-year quarter.
+Added: Gross Profit:
+Added: Gross profit increased $6.2 million, or 49.2%, for the three months ended September 30, 2021 to $18.9 million from $12.7 million for the three months ended September 30, 2020.
+Added: In local currency, gross profit increased 39.7%.
+Added: This increase was driven by a significant increase in fleet utilization coupled with strong rental rate growth and strategic cost management.
+Added: Adjusted EBITDA:
+Added: Adjusted EBITDA increased $5.0 million, or 60.0%, to $13.3 million for three months ended September 30, 2021 from $8.3 million for the three months ended September 30, 2020 and the margin expanded to 47.2% from 38.4%.
+Added: The increase results primarily from the favorable gross profit discussed above, partially offset by increased SG&A of $1.2 million driven by increased costs for personnel, including commissions and other variable compensation.
+Added: Capital Expenditures for Rental Equipment:
+Added: Purchases of rental equipment and refurbishments of $11.6 million were driving the $10.9 million increase compared to the prior-year quarter.
+Added: These investments were made to fulfill increasing demand and to drive increased units on rent and utilization.
+Added: Total revenue increased $6.2 million, or 26.6%, to $29.5 million for the three months ended September 30, 2021 from $23.3 million for the three months ended September 30, 2020.
+Added: These increases were driven by increased average original rental cost ("OEC") rental fleet utilization, which increased 1660 bps to 74.8% for the three months ended September 30, 2021 from 58.2% for the three months ended September 30, 2020.
+Added: 2020 results beginning in the second quarter especially were significantly impacted by lower mid- and down-stream oil and gas activity, petrochemical refining activity and specifically the lower demand for jet fuel resulting from COVID-19.
+Added: Gross Profit:
+Added: Gross profit increased $2.9 million, or 25.4%, for the three months ended September 30, 2021 to $14.3 million from $11.4 million for the three months ended September 30, 2020.
+Added: This increase was driven by increased gross profit for leasing activity, which increased $3.5 million driven by the increased revenue as discussed above.
+Added: Adjusted EBITDA:
+Added: Adjusted EBITDA increased $2.5 million, or 29.8%, to $11.0 million for the three months ended September 30, 2021 from $8.5 million for the three months ended September 30, 2020 and the margin expanded to 37.1% from 36.5%.
+Added: The increase in Adjusted EBITDA was driven by the increased gross profit discussed above, partially offset by a $0.6 million increase in SG&A expense driven primarily by increased personnel costs.
+Added: Capital Expenditures for Rental Equipment:
+Added: Current quarter expenditures of $5.0 million were $4.6 million higher than the prior-year quarter as we began to increase investment in additional rental equipment to fund increasing fleet utilization.
+Added: Comparison of the Nine Months Ended September 30, 2021 and 2020
+Added: Nine Months Ended September 30, 2021
(in thousands, except for units on rent and rates)
11 unchanged sentences
Average tank and pump solutions rental fleet utilization based on original equipment cost — % — % — % 71.2 % 71.2 %
−Removed: Six Months Ended June 30, 2020
+Added: Nine Months Ended September 30, 2020
(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and Pump Total
10 unchanged sentences
Average tank and pump solutions rental fleet utilization based on original equipment cost — % — % — % 58.2 % 58.2 %
−Removed: Total revenue increased $42.9 million, or 8.4%, to $555.6 million for the six months ended June 30, 2021 from $512.7 million for the six months ended June 30, 2020.
−Removed: The increase was primarily the result of a $38.7 million, or 10.2%, increase in leasing revenue and an $8.4 million, or 69.4%, increase in rental unit sales revenue.
−Removed: Average modular space monthly rental rates increased 16.3% for the six months ended June 30, 2021 to $769 driven by the continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.
+Added: Total revenue increased $74.1 million, or 9.5%, to $854.7 million for the nine months ended September 30, 2021 from $780.6 million for the nine months ended September 30, 2020.
+Added: The increase was primarily the result of a $66.3 million, or 11.6%, increase in leasing revenue, a $6.6 million, or 4.3% increase in delivery and installation revenues, and a $6.7 million, or 31.0%, increase in rental unit sales revenue.
+Added: The increases to leasing revenue and delivery and installation revenues were partially offset by declines in revenues for portable storage units as the result of transitioning the majority of the portable storage product business within the NA Modular segment to the NA Storage segment during the third quarter of 2021.
+Added: Approximately 12,000 units were transferred during the third quarter to the NA Storage segment, reallocating approximately $5.0 million of revenue from NA Modular segment to the NA Storage segment relative to the first nine months of 2020.
+Added: Average modular space monthly rental rates increased 17.6% for the nine months ended September 30, 2021 to $790 driven by the continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.
Improved pricing was partially offset by lower volumes as average modular space units on rent decreased by 2,572 units, or 3.0%, year over year.
−Removed: The decrease was driven primarily by lower deliveries, including reduced demand for new project deliveries as a result of the COVID-19 pandemic primarily in the second and third quarter of 2020.
+Added: The decrease was driven primarily by lower deliveries, including reduced demand for new project deliveries as a result of the COVID-19 pandemic primarily in the second and third quarters of 2020.
Gross Profit:
−Removed: Gross profit increased $12.9 million, or 6.0%, to $229.1 million for the six months ended June 30, 2021 from $216.2 million for the six months ended June 30, 2020.
−Removed: The increase in gross profit was driven by higher leasing gross
−Removed: profit, which increased $23.5 million, or 8.4%, driven from improved pricing including VAPS.
−Removed: The increase in gross profit from leasing for the six months ended June 30, 2021 was further complemented by a $5.0 million increase in rental unit sales gross profit.
+Added: Gross profit increased $28.8 million, or 8.8%, to $357.0 million for the nine months ended September 30, 2021 from $328.2 million for the nine months ended September 30, 2020.
+Added: The increase in gross profit was driven by higher leasing gross profit, which increased $41.3 million, or 9.7%, driven from improved pricing including VAPS, and partly offset by the reallocation of $5.0 million of revenue and gross profit from NA Modular segment to NA Storage segment relative to the first nine months of 2020.
+Added: The increase in gross profit from leasing for the nine months ended September 30, 2021 was further complemented by a $6.1 million increase in rental unit sales gross profit.
These increases were partially offset by a $9.0 million decrease in delivery and installation gross profit driven by higher fleet relocation expenses, a $2.9 million decrease in new sales gross profit, and a $6.7 million increase in depreciation of rental equipment related to capital investments made in our existing rental equipment.
Adjusted EBITDA:
−Removed: Adjusted EBITDA increased $13.8 million, or 7.4%, to $200.9 million for the six months ended June 30, 2021 from $187.1 million for the six months ended June 30, 2020.
+Added: Adjusted EBITDA increased $20.4 million, or 7.1%, to $307.7 million for the nine months ended September 30, 2021 from $287.3 million for the nine months ended September 30, 2020.
The increase was driven by higher leasing gross profit discussed above.
−Removed: SG&A, excluding discrete items, increased $3.9 million, or 3.2%, for the six months ended June 30, 2021, as compared to the June 30, 2020.
+Added: SG&A, excluding discrete items, increased $11.5 million, or 6.4%, for the nine months ended September 30, 2021, as compared to the September 30, 2020 primarily driven by employee and occupancy costs.
Capital Expenditures for Rental Equipment:
−Removed: Purchases of rental equipment and refurbishments increased $8.8 million, or 11.0%, to $88.5 million for the six months ended June 30, 2021 from $79.7 million for the six months ended June 30, 2020.
−Removed: Net CAPEX, as defined below in Item 2.
−Removed: Other Non-GAAP Financial Data and Reconciliations, decreased $10.3 million, or 15.4%, to $56.6 million.
−Removed: The decrease for Net CAPEX was driven primarily by increased sales of rental units and plant, property and equipment, including real estate sold during the period.
+Added: Purchases of rental equipment and refurbishments increased $6.4 million, or 5.6%, to $120.3 million for the nine months ended September 30, 2021 from $113.9 million for the nine months ended September 30, 2020.
Other Non-GAAP Financial Data and Reconciliations
28 unchanged sentences
Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to reinvest in the growth of our business or as measures of cash that will be available to meet our obligations.
−Removed: The following table provides an unaudited reconciliation of Income (loss) from operations before income tax to Adjusted EBITDA:
−Removed: Three Months Ended Six Months Ended
−Removed: June 30, June 30,
+Added: The following table provides an unaudited reconciliation of Net income (loss) to Adjusted EBITDA:
+Added: Three Months Ended Nine Months Ended
+Added: September 30, September 30,
(in thousands) 2021 2020 2021 2020
2 unchanged sentences
Loss on extinguishment of debt — 42,401 5,999 42,401
+Added: Fair value loss (gain) on common stock warrant liabilities — 22,303 26,597 (46,063)
Interest expense 29,201 33,034 88,377 89,810
Depreciation and amortization 75,276 71,704 233,813 169,103
−Removed: Fair value (gain) loss on common stock warrant liabilities (610) 26,963 26,597 (68,366)
Currency losses (gains), net 127 (371) 196 147
7 unchanged sentences
We define Net Income Excluding Gain/Loss from Warrants as net income plus or minus the impact of the change in the fair value of the common stock warrant liability.
−Removed: Management believes that our financial statements that include the impact of this mark-to-market expense or income may not be necessarily reflective of the actual financial performance of our business.
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Management believes that our financial statements that include the impact of this mark-to-market expense or income may not be necessarily reflective of the actual operating performance of our business.
+Added: The following table provides an unaudited reconciliation of Net income (loss) to Net Income (Loss) Excluding Gain/Loss from Warrants:
+Added: Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2021 2020 2021 2020
Net income (loss) $ 61,103 $ (6,051) $ 85,921 $ 71,474
−Removed: Fair value (gain) loss on common stock warrant liabilities (610) 26,963 26,597 (68,366)
+Added: Fair value loss (gain) on common stock warrant liabilities — 22,303 26,597 (46,063)
Net Income (Loss) Excluding Gain/Loss from Warrants $ 61,103 $ 16,252 $ 112,518 $ 25,411
2 unchanged sentences
Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue.
−Removed: Adjusted Gross Profit and Adjusted Gross Profit Percentage are not measurements of our financial performance under GAAP and should not be considered as an alternative to gross profit, gross profit percentage, or other performance measure derived in accordance with GAAP.
+Added: Adjusted Gross Profit and Adjusted Gross Profit Percentage are not measurements of our financial performance under GAAP and should not be considered as an alternative to gross profit, gross profit percentage, or other performance measures derived in accordance with GAAP.
In addition, our measurement of Adjusted Gross Profit and Adjusted Gross Profit Percentage may not be comparable to similarly titled measures of other companies.
−Removed: Management believes that the presentation of Adjusted Gross Profit and Adjusted Gross Profit
−Removed: Percentage provides useful information to investors regarding our results of operations because it assists in analyzing the performance of our business.
−Removed: The following table provides an unaudited reconciliation of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage on a historical basis:
−Removed: Three Months Ended Six Months Ended
−Removed: June 30, June 30,
+Added: Management believes that the presentation of Adjusted Gross Profit and Adjusted Gross Profit Percentage provides useful information to investors regarding our results of operations because it assists in analyzing the performance of our business.
+Added: The following table provides an unaudited reconciliation of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage:
+Added: Three Months Ended Nine Months Ended
+Added: September 30, September 30,
(in thousands) 2021 2020 2021 2020
5 unchanged sentences
Adjusted Gross Profit Percentage (C/A) 63.2 % 63.4 % 62.8 % 61.5 %
−Removed: We define Net CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities.
+Added: We define Net CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from the sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities.
Management believes that the presentation of Net CAPEX provides useful information to investors regarding the net capital invested into our rental fleet and plant, property and equipment each year to assist in analyzing the performance of our business.
−Removed: The following table provides unaudited reconciliations of Net CAPEX on a historical basis:
−Removed: Three Months Ended Six Months Ended
−Removed: June 30, June 30,
+Added: The following table provides an unaudited reconciliation of Net CAPEX:
+Added: Three Months Ended Nine Months Ended
+Added: September 30, September 30,
(in thousands) 2021 2020 2021 2020
7 unchanged sentences
As a result of the Merger and the significant financing transactions, we believe presenting supplemental pro forma financial information is beneficial to the readers of the financial statements.
−Removed: The following table sets forth key metrics used by management to run the business on a pro forma basis as if the Merger and financing transactions had occurred on January 1, 2019.
+Added: For the three months ended September 30, 2021 and 2020 there are no differences between pro forma results and actual results on a reported basis.
+Added: Please see comparison of results for the three months ended September 30, 2021 and 2020 within "Business Segment Results" above.
+Added: The following tables set forth key metrics for the nine months ended September 30, 2021 and 2020 used by management to run the business on a pro forma basis as if the Merger and financing transactions had occurred on January 1, 2019.
Refer to the Supplemental Pro Forma Financial Information section below for the full reconciliation of the statements of operations.
4 unchanged sentences
These reporting segments are aligned with how we operate and analyze our business results.
−Removed: Comparison of Three Months Ended June 30, 2021 and 2020
−Removed: Pro Forma Combined Quarter Ended June 30,
+Added: During the third quarter of 2021, the majority of the portable storage product business within the NA Modular segment was transitioned to the NA Storage segment, and associated revenues, expenses, and operating metrics beginning in the third quarter of 2021 were transferred to the NA Storage segment.
+Added: Comparison of Nine Months Ended September 30, 2021 and 2020
+Added: Pro Forma Combined Nine Months Ended September 30, 2021 vs.
(in thousands) 2021 2020 $ Change % Change
1 unchanged sentence
Selling, general and administrative expenses $ 372,296 $ 337,439 $ 34,857 10.3 %
−Removed: Net income (loss) $ 20,371 $ (1,161) $ 21,532 (1854.6) %
+Added: Net income $ 85,921 $ 116,678 $ (30,757) (26.4) %
+Added: Net income excluding gain/loss from warrants $ 112,518 $ 70,615 $ 27,025 8.0 %
Adjusted EBITDA $ 529,229 $ 466,781 $ 62,448 13.4 %
8 unchanged sentences
NA Modular - Quarterly Results
−Removed: Pro Forma Quarterly Results for the Six Months Ended June 30, 2021:
+Added: Pro Forma Quarterly Results for the Nine Months Ended September 30, 2021:
(in thousands, except for units on rent and
−Removed: monthly rental rate) Q1 Q2 Total
+Added: monthly rental rate) Q1 Q2 Q3 Total
Revenue $ 266,224 $ 289,382 $ 299,051 $ 854,657
8 unchanged sentences
Average portable storage monthly rental rate $ 124 $ 133 $ 179 $ 129
−Removed: Pro Forma Quarterly Results for the Six Months Ended June 30, 2020:
+Added: Pro Forma Quarterly Results for the Nine Months Ended September 30, 2020:
(in thousands, except for units on rent and
−Removed: monthly rental rate) Q1 Q2 Total
+Added: monthly rental rate) Q1 Q2 Q3 Total
Revenue $ 255,821 $ 256,862 $ 267,867 $ 780,550
10 unchanged sentences
As a result, there are no differences between pro forma results and actual results on a reported basis.
−Removed: Please see comparison of results for the three months ended June 30, 2021 and 2020 within "Business Segment Results" above.
+Added: Please see comparison of results for the three months ended September 30, 2021 and 2020 and the nine months ended September 30, 2021 and 2020 within "Business Segment Results" above.
NA Storage - Quarterly Results
−Removed: Pro Forma Quarterly Results for the Six Months Ended June 30, 2021:
+Added: Pro Forma Quarterly Results for the Nine Months Ended September 30, 2021:
(in thousands, except for units on rent and
−Removed: monthly rental rate) Q1 Q2 Total
+Added: monthly rental rate) Q1 Q2 Q3 Total
Revenue $ 107,748 $ 115,794 $ 133,897 $ 357,439
8 unchanged sentences
Average portable storage monthly rental rate $ 148 $ 151 $ 155 $ 152
−Removed: Pro Forma Quarterly Results for the Six Months Ended June 30, 2020:
+Added: Pro Forma Quarterly Results for the Nine Months Ended September 30, 2020:
(in thousands, except for units on rent and
−Removed: monthly rental rate) Q1 Q2 Total
+Added: monthly rental rate) Q1 Q2 Q3 Total
Revenue $ 103,495 $ 92,826 $ 104,493 $ 300,814
8 unchanged sentences
Average portable storage monthly rental rate $ 146 $ 143 $145 $145
−Removed: Comparison of Three Months Ended June 30, 2021 and 2020
−Removed: Total revenue increased $23.0 million, or 24.8%, to $115.8 million for the three months ended June 30, 2021 from $92.8 million for the three months ended June 30, 2020.
−Removed: Leasing revenues increased $14.5 million in the current quarter compared to the prior-year quarter.
−Removed: Modular space average units on rent increased 3.8% and average modular space monthly rental rates increased 23.8% year-over-year driven primarily by increased pricing on new deliveries.
−Removed: Portable storage units on rent increased 11.2% and average portable storage monthly rental rates increased 5.6% year-over-year also as a result of increased pricing on new deliveries.
−Removed: Delivery and installation revenues increased $7.0 million year-over-year as delivery levels have increased as a result of economic recovery.
−Removed: Sales revenues increased $1.5 million compared to the prior-year quarter.
−Removed: Gross Profit:
−Removed: Gross profit increased by $9.1 million, or 13.7%, to $75.7 million for the three months ended June 30, 2021 compared to $66.6 million compared to the three months ended June 30, 2020.
−Removed: Gross profit on leasing activity increased by $9.8 million year-over-year driven both by increased volume and pricing as described above.
−Removed: For delivery and installation, gross profit increased $1.2 million.
−Removed: Sales gross profit increased by $0.9 million to $2.6 million.
−Removed: Adjusted EBITDA:
−Removed: Adjusted EBITDA increased $8.7 million, or 21.3%, to $49.5 million for the three months ended June 30, 2021 from $40.8 million for the three months ended June 30, 2020 and the margin contracted to 42.8% from 43.9%.
−Removed: The increase in Adjusted EBITDA was driven primarily by increased leasing gross profit as described above, partially offset by increased SG&A.
−Removed: Excluding acquisition costs and stock-based compensation, SG&A increased $3.1 million in this segment.
−Removed: The increase was comprised of increased costs for personnel, including commissions and other variable compensation, travel, occupancy and computer costs.
−Removed: Capital Expenditures for Rental Equipment:
−Removed: Purchases of rental equipment and refurbishments of $8.8 million were $1.5 million higher than the prior-year quarter driven by increased fleet investments for specific products, largely ground level offices, to grow units on rent as demand has recovered to pre-COVID-19 levels.
−Removed: Comparison of Six Months Ended June 30, 2021 and 2020
−Removed: Total revenue increased $27.2 million, or 13.9%, to $223.5 million for the six months ended June 30, 2021 from $196.3 million for the six months ended June 30, 2020.
−Removed: Leasing revenues increased $18.5 million in the current quarter compared to the prior-year quarter.
+Added: Comparison of Nine Months Ended September 30, 2021 and 2020
+Added: Total revenue increased $56.6 million, or 18.8%, to $357.4 million for the nine months ended September 30, 2021 from $300.8 million for the nine months ended September 30, 2020.
+Added: Leasing revenues increased $42.6 million compared to the prior year.
Modular space average units on rent increased 3.1% and average modular space monthly rental rates increased 16.8% year-over-year driven primarily by increased pricing on new deliveries.
Portable storage units on rent increased 14.0% and average portable storage monthly rental rates increased 4.8% year-over-year also driven primarily by increased pricing on new deliveries.
−Removed: Delivery and installation revenues increased $6.5 million year-over-year as delivery levels in the second quarter have increased as a result of economic recovery.
−Removed: Sales revenues increased $2.2 million compared to the prior-year quarter.
+Added: Delivery and installation revenues increased $14.0 million year-over-year as delivery levels in the third quarter have increased as a result of increased demand.
+Added: Sales revenues remained flat at $16.7 million, compared to prior-year.
Gross Profit:
−Removed: Gross profit increased by $10.3 million, or 7.5%, to $148.3 million for the six months ended June 30, 2021 compared to $138.0 million compared to the six months ended June 30, 2020.
+Added: Gross profit increased by $29.4 million, or 13.9%, to $240.8 million for the nine months ended September 30, 2021 compared to $211.4 million compared to the nine months ended September 30, 2020.
Gross profit on leasing activity increased by $31.2 million year-over-year driven both by increased volume and pricing as described above.
2 unchanged sentences
Adjusted EBITDA:
−Removed: Adjusted EBITDA increased $11.0 million, or 13.0%, to $95.8 million for the six months ended June 30, 2021 from $84.8 million for the six months ended June 30, 2020 and the margin contracted to 42.9% from 43.2%.
+Added: Adjusted EBITDA increased $23.7 million, or 18.1%, to $155.0 million for the nine months ended September 30, 2021 from $131.2 million for the nine months ended September 30, 2020 and the margin contracted to 43.4% from 43.6%.
The increase in Adjusted EBITDA was driven primarily by increased leasing gross profit as described above, partially offset by increased SG&A.
Excluding acquisition costs and stock-based compensation, SG&A increased $9.5 million in this segment.
−Removed: The increase was comprised of increased costs for personnel, including commissions and other variable compensation, occupancy, insurance, and computer costs.
+Added: The increase was comprised of increased costs for personnel, including commissions and other variable compensation, insurance, computer costs, and bad debt expenses.
Capital Expenditures for Rental Equipment:
−Removed: Purchases of rental equipment and refurbishments of $12.2 million for the six months ended June 30, 2021 were $0.3 million lower than for the six months ended June 30, 2020.
−Removed: Rental fleet expenditures in the first quarter were significantly below 2020 levels in response to COVID-19-related demand reductions, but as recovery has occurred in the second quarter, we have begun to invest to meet demand for specific products, largely ground level offices.
+Added: Purchases of rental equipment and refurbishments of $24.2 million for the nine months ended September 30, 2021 were $4.5 million lower than for the nine months ended September 30, 2020.
+Added: Rental fleet expenditures in the first quarter were significantly below 2020 levels in response to COVID-19-related demand reductions, but as economic activity has recovered, we have begun to invest to meet demand for specific products, largely portable storage units and ground level offices.
UK Storage - Quarterly Results
−Removed: Pro Forma Quarterly Results for the Six Months Ended June 30, 2021:
+Added: Pro Forma Quarterly Results for the Nine Months Ended September 30, 2021:
(in thousands, except for units on rent and
−Removed: monthly rental rate) Q1 Q2 Total
+Added: monthly rental rate) Q1 Q2 Q3 Total
Revenue $ 27,007 $ 28,432 $ 28,099 $ 83,538
8 unchanged sentences
Average portable storage monthly rental rate $ 82 $ 88 $ 90 $ 86
−Removed: Pro Forma Quarterly Results for the Six Months Ended June 30, 2020:
+Added: Pro Forma Quarterly Results for the Nine Months Ended September 30, 2020:
(in thousands, except for units on rent and
−Removed: monthly rental rate) Q1 Q2 Total
+Added: monthly rental rate) Q1 Q2 Q3 Total
Revenue $ 20,197 $ 17,154 $ 21,653 $ 59,004
8 unchanged sentences
Average portable storage monthly rental rate $ 73 $ 70 $ 75 $ 73
−Removed: Comparison of Three Months Ended June 30, 2021 and 2020
−Removed: Total revenue increased $11.2 million, or 65.1%, to $28.4 million for the three months ended June 30, 2021 from $17.2 million for the three months ended June 30, 2020.
−Removed: In local currency total revenues increased 47.1%.
−Removed: Leasing revenues increased $7.8 million in the current quarter compared to the prior-year quarter.
−Removed: Modular space average units on rent increased 18.2%, while portable storage units on rent increased 11.8%.
−Removed: Average monthly rental rates for modular space units and portable storage units increased 39.9% and 25.7% year-over-year, respectively, including the impacts of currency fluctuations.
−Removed: Delivery and installation revenues increased $3.1 million year-over-year.
−Removed: Sales revenues increased $0.4 million compared to the prior-year quarter.
−Removed: Gross Profit:
−Removed: Gross profit increased $6.9 million, or 62.7%, for the three months ended June 30, 2021 to $17.9 million from $11.0 million for the three months ended June 30, 2020.
−Removed: In local currency, gross profit increased 44.8%.
−Removed: This increase was driven by a significant increase in fleet utilization coupled with strong rental rate growth and strategic cost management.
−Removed: Adjusted EBITDA:
−Removed: Adjusted EBITDA increased $5.4 million, or 78.3%, to $12.3 million for three months ended June 30, 2021 from $6.9 million for the three months ended June 30, 2020 and the margin expanded to 43.4% from 39.9%.
−Removed: The increase results primarily from the favorable gross profit discussed above, partially offset by increased SG&A of $2.0 million driven by increased costs for personnel, including commissions and other variable compensation.
−Removed: Capital Expenditures for Rental Equipment:
−Removed: Purchases of rental equipment and refurbishments of $4.2 million were driving the $3.7 million increase compared to the prior-year quarter.
−Removed: These investments were made to fulfill increasing demand and to drive increased units on rent and utilization.
−Removed: Comparison of Six Months Ended June 30, 2021 and 2020
−Removed: Total revenue increased $18.0 million, or 48.1%, to $55.4 million for the six months ended June 30, 2021 from $37.4 million for the six months ended June 30, 2020.
+Added: Comparison of Nine Months Ended September 30, 2021 and 2020
+Added: Total revenue increased $24.5 million, or 41.5%, to $83.5 million for the nine months ended September 30, 2021 from $59.0 million for the nine months ended September 30, 2020.
In local currency total revenues increased 30.2%.
3 unchanged sentences
Gross Profit:
−Removed: Gross profit increased $12.0 million, or 53.6%, for the six months ended June 30, 2021 to $34.4 million from $22.4 million for the six months ended June 30, 2020.
+Added: Gross profit increased $18.3 million, or 52.3%, for the nine months ended September 30, 2021 to $53.3 million from $35.0 million for the nine months ended September 30, 2020.
In local currency, gross profit increased 39.7%.
1 unchanged sentence
Adjusted EBITDA:
−Removed: Adjusted EBITDA increased $10.1 million, or 75.9%, to $23.4 million for six months ended June 30, 2021 from $13.3 million for the six months ended June 30, 2020 and the margin expanded to 42.2% from 35.5%.
+Added: Adjusted EBITDA increased $15.0 million, or 69.2%, to $36.6 million for nine months ended September 30, 2021 from $21.6 million for the nine months ended September 30, 2020 and the margin expanded to 43.9% from 36.5%.
The increase results primarily from the favorable gross profit discussed above, partially offset by increased SG&A of $3.7 million driven by increased costs for personnel, including commissions and other variable compensation.
Capital Expenditures for Rental Equipment:
−Removed: Purchases of rental equipment and refurbishments of $11.0 million were driving the $10.2 million increase compared to the prior-year quarter.
+Added: Purchases of rental equipment and refurbishments of $22.6 million were driving the $21.1 million increase compared to the prior year.
These investments were made to fulfill increasing demand and to drive increased units on rent and utilization.
Tank and Pump - Quarterly Results
−Removed: Pro Forma Quarterly Results for the Six Months Ended June 30, 2021:
+Added: Pro Forma Quarterly Results for the Nine Months Ended September 30, 2021:
(in thousands, except for units on rent and
−Removed: monthly rental rate) Q1 Q2 Total
+Added: monthly rental rate) Q1 Q2 Q3 Total
Revenue $ 24,344 $ 27,494 $ 29,505 $ 81,343
3 unchanged sentences
Average tank and pump solutions rental fleet utilization based on original equipment cost 67.4 % 71.2 % 74.8 % 71.2 %
−Removed: Pro Forma Quarterly Results for the Six Months Ended June 30, 2020:
+Added: Pro Forma Quarterly Results for the Nine Months Ended September 30, 2020:
(in thousands, except for units on rent and
−Removed: monthly rental rate) Q1 Q2 Total
+Added: monthly rental rate) Q1 Q2 Q3 Total
Revenue $ 26,884 $ 23,684 $ 23,302 $ 73,870
3 unchanged sentences
Average tank and pump solutions rental fleet utilization based on original equipment cost 66.4 % 60.5 % 58.2 % 61.7 %
−Removed: Comparison of Three Months Ended June 30, 2021 and 2020
−Removed: Total revenue increased $3.8 million, or 16.0%, to $27.5 million for the three months ended June 30, 2021 from $23.7 million for the three months ended June 30, 2020.
−Removed: These increases were driven by increased average OEC rental fleet utilization, which increased 1070 bps to 71.2% for the three months ended June 30, 2021 from 60.5% for the three months ended June 30, 2020.
−Removed: 2020 results beginning in the second quarter especially were significantly impacted by lower mid- and down-stream oil and gas activity, petrochemical refining activity and specifically the lower demand for jet fuel resulting from COVID-19.
−Removed: Gross Profit:
−Removed: Gross profit increased $1.3 million, or 11.1%, for the three months ended June 30, 2021 to $13.0 million from $11.7 million for the three months ended June 30, 2020.
−Removed: This increase was driven by increased gross profit for leasing activity, which increased $1.4 million driven by the increased revenue as discussed above.
−Removed: Adjusted EBITDA:
−Removed: Adjusted EBITDA increased $1.4 million, or 16.1%, to $10.1 million for the three months ended June 30, 2021 from $8.7 million for the three months ended June 30, 2020 and the margin was essentially flat to prior-year quarter.
−Removed: The increase in Adjusted EBITDA was driven by the increased gross profit discussed above, further complemented by a $0.2 million reduction in SG&A expense driven primarily by decreased personnel costs.
−Removed: Capital Expenditures for Rental Equipment:
−Removed: Current quarter expenditures of $2.9 million were $2.0 million higher than the prior-year quarter as we began to increase investment in additional rental equipment to fund increasing fleet utilization.
−Removed: Comparison of Six Months Ended June 30, 2021 and 2020
−Removed: Total revenue increased $1.2 million, or 2.4%, to $51.8 million for the six months ended June 30, 2021 from $50.6 million for the six months ended June 30, 2020.
−Removed: These increases were driven by increased average OEC rental fleet utilization, which increased 580 bps to 69.3% for the six months ended June 30, 2021 from 63.5% for the six months ended June 30, 2020.
+Added: Comparison of Nine Months Ended September 30, 2021 and 2020
+Added: Total revenue increased $7.4 million, or 10.0%, to $81.3 million for the nine months ended September 30, 2021 from $73.9 million for the nine months ended September 30, 2020.
+Added: These increases were driven by increased average OEC rental fleet utilization, which increased 950 bps to 71.2% for the nine months ended September 30, 2021 from 61.7% for the nine months ended September 30, 2020.
2020 results beginning in the second quarter especially were significantly impacted by lower mid- and down-stream oil and gas activity, petrochemical refining activity and specifically the lower demand for jet fuel resulting from COVID-19.
Gross Profit:
−Removed: Gross profit decreased $0.7 million, or 2.8%, for the six months ended June 30, 2021 to $24.3 million from $25.0 million for the six months ended June 30, 2020.
−Removed: Gross profit for leasing activity was flat compared to the prior-year quarter, however gross profit for delivery and installation activity decreased $0.6 million and gross profit for sales activity decreased $0.4 million.
+Added: Gross profit increased $2.2 million, or 6.0%, for the nine months ended September 30, 2021 to $38.6 million from $36.4 million for the nine months ended September 30, 2020.
+Added: Gross profit for leasing activity increased by $3.5 million compared to the prior year, however gross profit for delivery and installation activity decreased $0.9 million and gross profit for sales activity decreased $0.4 million.
Adjusted EBITDA:
−Removed: Adjusted EBITDA increased $0.8 million, or 4.4%, to $19.0 million for the six months ended June 30, 2021 from $18.2 million for the six months ended June 30, 2020 and the margin improved to 36.5% from 35.9%.
−Removed: The increase in Adjusted EBITDA was driven by a $1.7 million reduction in SG&A expense primarily driven by lower personnel costs, partially offset by the lower gross profit discussed above.
+Added: Adjusted EBITDA increased $3.3 million, or 12.4%, to $29.9 million for the nine months ended September 30, 2021 from $26.6 million for the nine months ended September 30, 2020 and the margin improved to 36.7% from 36.1%.
+Added: The increase in Adjusted EBITDA was primarily driven from favorable gross profit discussed above and by a $1.0 million reduction in SG&A expense.
Capital Expenditures for Rental Equipment:
−Removed: Year to date expenditures of $6.1 million were $0.7 million higher than the prior-year quarter as we began to increase investment in additional rental equipment to fund increasing fleet utilization.
+Added: Year to date expenditures of $11.1 million were $5.2 million higher than the prior year as we began to increase investment in additional rental equipment to fund increasing fleet utilization.
Liquidity and Capital Resources
3 unchanged sentences
We have been consistently engaged in both the debt and equity capital markets both opportunistically and as necessary to support the growth of our business, desired leverage levels, and other capital allocation priorities.
−Removed: Subsequent to the Merger, we believe we have ample liquidity in the 2020 ABL Facility and are generating substantial free cash flow, which together support both organic operations and other capital allocation priorities as they arise.
+Added: Subsequent to
+Added: the Merger, we believe we have ample liquidity in the 2020 ABL Facility and are generating substantial free cash flow, which together support both organic operations and other capital allocation priorities as they arise.
We continue to review available acquisition opportunities with the awareness that any such acquisition may require us to incur additional debt to finance the acquisition and/or to issue shares of our Common Stock or other equity securities as acquisition consideration or as part of an overall financing plan.
9 unchanged sentences
The borrowing bases are a function of, among other things, the value of the assets in the relevant collateral pool.
−Removed: At June 30, 2021, we had $917.4 million of available borrowing capacity under the 2020 ABL Facility.
+Added: At September 30, 2021, we had $831.6 million of available borrowing capacity under the 2020 ABL Facility.
COVID-19 Impact on Liquidity
3 unchanged sentences
We believe that the actions we have taken in recent years to increase our scale and competitive position and strengthen our balance sheet positioned us well to manage through economic cycles and have positioned us well for the current recovery.
−Removed: Cash Flow Comparison of the Six Months Ended June 30, 2021 and 2020
+Added: Cash Flow Comparison of the Nine Months Ended September 30, 2021 and 2020
Significant factors driving our liquidity position include cash flows generated from operating activities and capital expenditures.
1 unchanged sentence
The following summarizes our change in cash and cash equivalents for the periods presented:
−Removed: Six Months Ended
+Added: Nine Months Ended
+Added: September 30,
(in thousands)
9 unchanged sentences
Cash Flows from Operating Activities
−Removed: Cash provided by operating activities for the six months ended June 30, 2021 was $261.6 million as compared to $113.7 million for the six months ended June 30, 2020, an increase of $147.9 million.
−Removed: The increase was due to an increase of $140.8 million of net income, adjusted for non-cash items, in addition to an increase of $7.1 million in the net movements of the operating assets and liabilities.
−Removed: The increase related to the net movements of operating assets and liabilities was attributable to an increase in the change in accounts payable and other accrued expenses and prepaid and other assets in the six months ended June 30, 2021 compared to the same period in 2020, partially offset by an increase in the change in trade receivables in the six months ended June 30, 2021 compared to the same period in 2020.
+Added: Cash provided by operating activities for the nine months ended September 30, 2021 was $392.1 million as compared to $175.1 million for the nine months ended September 30, 2020, an increase of $217.0 million.
+Added: The increase was due to an increase of $213.0 million of net income, adjusted for non-cash items, and an increase of $4.0 million in the net movements of the operating assets and liabilities.
Cash Flows from Investing Activities
−Removed: Cash used in investing activities for the six months ended June 30, 2021 was $88.4 million as compared to $66.9 million for the six months ended June 30, 2020, an increase of $21.5 million.
−Removed: The increase in cash used in investing activities was driven by a $38.1 million increase in cash used for purchase of rental equipment and refurbishments and a $14.3 million increase in cash used for the purchase of property, plant and equipment.
−Removed: This was partially offset by a $12.6 million increase in proceeds from sale of property, plant and equipment and an $18.3 million increase in proceeds from the sale of rental equipment.
+Added: Cash used in investing activities for the nine months ended September 30, 2021 was $196.6 million as compared to $83.1 million for the nine months ended September 30, 2020, an increase of $113.5 million.
+Added: The increase in cash used in investing activities was driven by a $73.4 million increase in cash used in the acquisition of businesses, net of cash acquired, a $55.9 million increase in cash used for the purchase of rental equipment and refurbishments, and a $11.7 million increase in cash used for the purchase of property, plant and equipment.
+Added: These increases were partially offset by a $16.7 million increase
+Added: in proceeds from the sale of rental equipment and a $10.8 million increase in proceeds from sale of property, plant and equipment.
Cash Flows from Financing Activities
−Removed: Cash used in financing activities for the six months ended June 30, 2021 was $182.9 million as compared to $614.7 million of cash provided by financing activities for the six months ended June 30, 2020, an increase of $797.6 million in cash used.
−Removed: The increase is primarily due to $650.0 million received from borrowing in the second quarter of 2020 in anticipation of financing the acquisition of Mobile Mini and $214.3 million paid in 2021 to repurchase common stock and warrants.
+Added: Cash used in financing activities for the nine months ended September 30, 2021 was $208.9 million as compared to $75.6 million for the nine months ended September 30, 2020, an increase of $133.3 million.
+Added: The increase is primarily due to $320.6 million paid in 2021 to repurchase common stock and warrants as well as a decrease of $2,184.7 million in receipts from borrowing, partially offset by a decrease of $2,291.5 million in repayment of borrowings and a decrease of $64.6 million in payment of financing costs.
Free Cash Flow
4 unchanged sentences
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
(in thousands) 2021 2020 2021 2020
5 unchanged sentences
Free Cash Flow $ 78,493 $ 28,045 $ 251,709 $ 74,849
−Removed: Free Cash Flow for the six months ended June 30, 2021 was an inflow of $173.2 million as compared to an inflow of $46.8 million for the six months ended June 30, 2020, an increase in Free Cash Flow of $126.4 million.
+Added: Free Cash Flow for the nine months ended September 30, 2021 was an inflow of $251.7 million as compared to an inflow of $74.8 million for the nine months ended September 30, 2020, an increase in Free Cash Flow of $176.9 million.
Free Cash Flow increased year over year principally as a result of the $217.0 million increase in cash provided by operating activities and partially offset by the $55.9 million increase in cash used in the purchase of rental equipment and refurbishments.
−Removed: The $139.5 million in cash provided by operating activities for the three months ended June 30, 2021 was returned to shareholders through stock and warrant repurchases and cancellations and reinvested into the business to support the purchase of rental equipment, including VAPS, and refurbishments.
+Added: The $130.4 million in cash provided by operating activities for the three months ended September 30, 2021 was returned to shareholders through stock and warrant repurchases and cancellations and reinvested into the business to support the purchase of rental equipment, including VAPS, and refurbishments.
Contractual Obligations
−Removed: The following table presents information relating to our contractual obligations and commercial commitments as of June 30, 2021:
+Added: The following table presents information relating to our contractual obligations and commercial commitments as of September 30, 2021:
(in thousands) Total Less than 1 year Between 1 to 3 years Between 3 to 5 years More than 5 years
5 unchanged sentences
(b) Includes the obligations under our interest rate swap agreement that effectively convert $400 million in aggregate notional amount of variable-rate debt under the Company’s ABL Facility into fixed-rate debt.
−Removed: The future obligations under the interest rate swaps was calculated using the 1-month LIBOR rate as of June 30, 2021.
+Added: The future obligations under the interest rate swaps was calculated using the 1-month LIBOR rate as of September 30, 2021.
(c) Amounts relate to the opportunistic election to delay payment of employer payroll taxes on an interest-free basis in accordance with the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the ‘‘CARES Act’’).
−Removed: At June 30, 2021, in addition to the above contractual obligations, the Company has estimated $14.8 million of potential long-term tax liabilities, including interest and penalties related to uncertain tax positions.
+Added: At September 30, 2021, in addition to the above contractual obligations, the Company has an estimated $2.7 million of potential long-term tax liabilities, including interest and penalties related to uncertain tax positions.
Because of the high degree of uncertainty regarding the future cash flows associated with these potential long-term tax liabilities, the Company is unable to estimate the years in which settlement will occur with the respective taxing authorities.
2 unchanged sentences
Supplemental Pro Forma Information
−Removed: The following pro forma financial information has been prepared for WillScot Mobile Mini for the three and six months ended June 30, 2020.
+Added: The following pro forma financial information has been prepared for WillScot Mobile Mini for the nine months ended September 30, 2020.
These pro forma condensed combined statements of operations present the historical consolidated statements of operations of WillScot Mobile Mini, giving effect to the following items as if they had occurred on January 1, 2019:
9 unchanged sentences
You should not rely on the pro forma financial information as being indicative of the historical results that would have been achieved if these transactions and events had been completed as of January 1, 2019.
−Removed: The pro forma combined financial information below should be read in conjunction with the condensed
−Removed: consolidated financial statements and related notes of the Company included elsewhere in this Form 10-Q.
+Added: The pro forma combined financial information below should be read in conjunction with the condensed consolidated financial statements and related notes of the Company included elsewhere in this Form 10-Q.
All pro forma adjustments and their underlying assumptions are described more fully in the notes below.
4 unchanged sentences
The following pro forma condensed combined financial information and associated notes are based on the historical financial statements of WillScot and Mobile Mini as described below.
−Removed: In preparing the pro forma condensed combined statements of operations for the three and six months ended June 30, 2020, certain historical financial information for Mobile Mini was reclassified to align to the reporting classifications of WillScot.
−Removed: The pro forma condensed combined statement of operations for the three and six months ended June 30, 2020 are based on, derived from, and should be read in conjunction with, WillScot’s historical financial statements..
+Added: In preparing the pro forma condensed combined statements of operations for the nine months ended September 30, 2020, certain historical financial information for Mobile Mini was reclassified to align to the reporting classifications of WillScot.
+Added: The pro forma condensed combined statement of operations for the nine months ended September 30, 2020 are based on, derived from, and should be read in conjunction with, WillScot’s historical financial statements.
The aforementioned pro forma financial statements are also based on, derived from, and should be read in conjunction with Mobile Mini’s historical financial statements.
−Removed: Three Months Ended June 30, 2020
−Removed: (in thousands)
−Removed: Historical WillScot Historical Mobile Mini Pro Forma Adjustments Pro Forma Condensed Combined
−Removed: Leasing and services revenue:
−Removed: Leasing $ 190,143 $ 100,146 $ — $ 290,289
−Removed: Delivery and installation 51,640 25,966 — 77,606
−Removed: Sales revenue:
−Removed: New units 9,763 3,593 — 13,356
−Removed: Rental units 5,316 3,958 — 9,274
−Removed: Total revenues 256,862 133,663 — 390,525
−Removed: Costs of leasing and services:
−Removed: Leasing 47,747 12,706 — 60,453
−Removed: Delivery and installation 43,523 17,953 — 61,476
−Removed: Costs of sales:
−Removed: New units 6,331 2,393 — 8,724
−Removed: Rental units 3,803 2,488 — 6,291
−Removed: Depreciation of rental equipment 45,494 7,605 1,167 54,266 (b)
−Removed: Gross profit 109,964 90,518 (1,167) 199,315
−Removed: Selling, general and administrative 65,272 49,684 (3,198) 111,757 (a)
−Removed: Other depreciation and amortization 2,883 9,959 5,668 18,510 (c)
−Removed: Lease impairment expense and other related charges 1,394 — — 1,394
−Removed: Restructuring costs 749 — — 749
−Removed: Currency (gains) losses, net (380) 36 — (344)
−Removed: Other (income) expense, net (1,021) 158 — (863)
−Removed: Operating income 41,067 30,681 (3,637) 68,111
−Removed: Interest expense 28,519 7,714 (3,661) 32,572 (d)
−Removed: Fair value loss on common stock warrant liabilities 26,963 — — 26,963
−Removed: (Loss) income before income tax (14,415) 22,967 24 8,576
−Removed: Income tax (benefit) expense (285) 5,724 4,298 9,737 (e)
−Removed: Net (loss) income (14,130) 17,243 (4,274) (1,161)
−Removed: Net income attributable to non-controlling interest, net of tax 1,343 — (1,343) — (f)
−Removed: Net (loss) income attributable to WillScot Mobile Mini $ (15,473) $ 17,243 $ (2,931) $ (1,161)
−Removed: Six Months Ended June 30, 2020
+Added: Nine Months Ended September 30, 2020
(in thousands)
24 unchanged sentences
Fair value gain on common stock warrant liabilities (46,063) — — (46,063)
+Added: Loss on extinguishment of debt 42,401 — (19,682) 22,719 (e)
Income before income tax 5,304 37,875 95,799 138,978
−Removed: Income tax expense 505 12,330 10,409 23,244 (e)
+Added: Income tax (benefit) expense (66,170) 12,330 76,140 22,300 (f)
Net income 71,474 25,545 19,659 116,678
−Removed: Net income attributable to non-controlling interest, net of tax 1,213 — (1,213) — (f)
+Added: Net income attributable to non-controlling interest, net of tax 1,213 — (1,213) — (g)
Net income attributable to WillScot Mobile Mini $ 70,261 $ 25,545 $ 20,872 $ 116,678
4 unchanged sentences
(d) Reflects the adjustment for interest expense related to our debt structure after the Merger as though the following had occurred on January 1, 2019 (i) borrowings under the 2020 ABL Facility, (ii) borrowings under the 2025 Secured Notes, (iii) repayment of the 2017 ABL Facility, (iv) repayment of the 2022 Secured Notes and repayment of the Mobile Mini debt assumed at the Merger.
−Removed: (e) Reflects the adjustment to recognize the income tax impacts of the unaudited pro forma adjustments for which a tax expense is recognized using a U.S.
+Added: (e) Represents the elimination of the one-time loss on extinguishment of debt in connection with the repayment of the 2022 Secured Notes and the 2017 ABL Facility.
+Added: (f) Reflects the adjustment to recognize the income tax impacts of the unaudited pro forma adjustments for which a tax expense is recognized using a U.S.
federal and state statutory tax rate of 25.5%.
This rate may vary from the effective tax rates of the historical and combined businesses.
−Removed: In addition, the three and six months ended June 30, 2020 included an adjustment of $2.7 million to eliminate the reversal of valuation allowance as a result of reassessment of the realizability of deferred tax assets as a result of the Merger.
−Removed: (f) Reflects the adjustment for the extinguishment of non-controlling interest as a result of the Sapphire Exchange on June 30, 2020.
+Added: In addition, the three and nine months ended September 30, 2020 included adjustments of $54.1 million and $56.8 million, respectively, to eliminate the reversal of valuation allowance as a result of reassessment of the realizability of deferred tax assets as a result of the Merger.
+Added: (g) Reflects the adjustment for the extinguishment of non-controlling interest as a result of the Sapphire Exchange on June 30, 2020.
The pro forma adjustment to interest expense consists of the following:
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Nine Months Ended September 30, 2020
(in thousands)
7 unchanged sentences
The following unaudited table provides a reconciliation of Net income to pro forma unaudited adjusted EBITDA:
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Nine Months Ended September 30, 2020
(in thousands)
−Removed: Net (loss) income $ (1,161) $ 116,646
+Added: Net income $ 116,678
Income tax expense 22,300
+Added: Loss on extinguishment of debt 22,719
+Added: Fair value gain on common stock warrant liabilities (46,063)
Interest expense 96,976
Depreciation and amortization 217,889
−Removed: Fair value loss (gain) on common stock warrant liabilities 26,963 (68,366)
−Removed: Currency (gains) losses, net (344) 558
+Added: Currency losses, net 186
Restructuring costs, lease impairment expense, other related charges 8,542
1 unchanged sentence
Stock compensation expense 12,359
−Removed: Other 4,015 4,075
Adjusted EBITDA $ 466,781
+Added: Reconciliation of Pro Forma Net Income Excluding Gain/Loss from Warrants
+Added: The following unaudited table provides a reconciliation of Net income to pro forma unaudited net income excluding gain/loss from warrants:
+Added: Nine Months Ended September 30,
+Added: (in thousands) 2020
+Added: Net income $ 116,678
+Added: Fair value gain on common stock warrant liabilities (46,063)
+Added: Net income excluding gain/loss from warrants $ 70,615
Critical Accounting Policies and Estimates
4 unchanged sentences
The US Securities and Exchange Commission (the “SEC”) suggests companies provide additional disclosure on those accounting policies considered most critical.
−Removed: The SEC considers an accounting policy to be critical if it is important to our
−Removed: financial condition and results of operations and requires significant judgments and estimates on the part of management in its applicatio n.
+Added: The SEC considers an accounting policy to be critical if it is important to our financial condition and results of operations and requires significant judgments and estimates on the part of management in its applicatio n.
For a complete discussion of our significant critical accounting policies, see the “Critical Accounting Policies and Estimates” section in Part II, Item 7 of our Annual Report on Form 10-K/A for the year ended December 31, 2020 (the "2020 Annual Report on Form 10-K/A").
−Removed: There were no significant changes to our critical accounting policies during the six months ended June 30, 2021.
+Added: There were no significant changes to our critical accounting policies during the nine months ended September 30, 2021.
Recently Issued Accounting Standards
46 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.