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Item 5. Market for Registrant’s Common Equity

2022-02-25 compared with 2021-02-26 · 27 added, 335 removed, 34 unchanged (91% of the section changed)

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As of December 31, 2021, no shares of Preferred Stock were issued and outstanding, and no designation of rights and preferences of preferred stock had been adopted.

Our preferred stock is not quoted on any market or system, and there is not currently a market for our preferred stock.

2018 Warrants

The Company issued warrants to purchase Common Stock as components of units sold in its initial public offering (the “2015 Public Warrants”).

The Company also issued warrants to purchase its Common Stock in a private placement concurrently with its initial public offering (the “2015 Private Warrants,” and together with the 2015 Public Warrants, the "2015 Warrants").

The 2015 Private Warrants are identical to the 2015 Public Warrants, except that, if held by original investors (or their permitted assignees), the 2015 Private Warrants may be exercised on a cashless basis and are not subject to redemption.

Each 2015 Warrant entitles its holder to purchase one half of one share of our Common Stock in accordance with its terms.

The 2015 Warrants became exercisable on December 29, 2017 and expire five years after that date.

Pursuant to the warrant agreement, dated as of September 10, 2015 between Double Eagle Acquisition Corp.

(defined below) and Continental Stock Transfer & Trust Company (the “2015 Warrant Agreement”), WillScot’s share price performance target was achieved on January 21, 2020 and, on January 24, 2020, WillScot delivered a notice (the "Warrant Redemption Notice") to redeem all of its 2015 Public Warrants that remained unexercised on February 24, 2020.

As described in the Redemption Notice and permitted under the 2015 Warrant Agreement, holders of these 2015 Public Warrants who exercised them following the date of the Redemption Notice were required to do so on a cashless basis.

From January 1, 2020 through January 24, 2020, 796,610 2015 Public Warrants were exercised for cash, resulting in WillScot receiving cash proceeds of $4.6 million and issuing 398,305 shares of Common Stock.

Between January 24, 2020 and February 24, 2020, 5,836,048 2015 Public Warrants were exercised on a cashless basis.

An aggregate of 1,097,162 shares of Common Stock was issued in connection with these cashless exercises.

Thereafter, the Company completed the redemption of 38,509 remaining 2015 Public Warrants under the Redemption Notice for $0.01 per warrant.

As of December 31, 2020, no 2015 Public Warrants were outstanding.

A s of December 31, 2020 , there w er e 12,710,000 2015 Private Warrants outstanding .

The 2015 Private Warrants have not traded in an established public trading market within the two most recent fiscal years.

2018 Warrants

On August 15, 2018, WillScot issued warrants (the "2018 Warrants") to the former ModSpace shareholders as part of the acquisition of ModSpace .

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Pink Open Market under the symbol "WSCTW." Over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

Each 2018 Warrant entitles the holder thereof to purchase one share of WillScot Class A Common Stock at an exercise price of $15.50 per share, subject to potential adjustment.

Each 2018 Warrant entitles the holder thereof to purchase one share of our Common Stock at an exercise price of $15.50 per share, subject to potential adjustment.

The 2018 Warrants were not exercisable or transferable until February 11, 2019 and expire on November 29, 2022.

As of December 31, 2020, 9,730,241 2018 Warrants were outstanding.

As of December 31, 2020, there were 47 holders of record of our Common Stock, no holders of record of our Preferred Stock, 8 holders of record of our 2015 Warrants, and 37 holders of record of our 2018 Warrants.

As of December 31, 2021, 4,078,173 of the 2018 Warrants were outstanding.

As of December 31, 2021, there were 44 holders of record of our Common Stock, no holders of record of our Preferred Stock, and 23 holders of record of our 2018 Warrants.

The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose Common Stock or warrants are held of record by banks, brokers and other financial institutions.

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Securities Authorized for Issuance under Equity Compensation Plans

On July 2, 2020, we filed a registration statement on Form S-8 registering 6,488,988 shares of Common Stock, relating to awards to be undertaken in the future, with such vesting conditions, as applicable, to be determined in accordance with the WillScot Mobile Mini 2020 Incentive Award Plan (the "2020 Incentive Plan").

On February 5, 2018, we filed a registration statement on Form S-8, registering 4,000,000 shares of Common Stock, relati ng to awards to be undertaken in the future, with such vesting conditions, as applicable, to be determined in accordance with the WillScot Corporation 2017 Incentive Award Plan (the "2017 Incentive Award Plan").

On July 2, 2020, we filed a registration statement on Form S-8 registering 6,488,988 shares of Common Stock (including 1,488,988 shares that remained available under the 2017 Incentive Award Plan), relating to awards to be undertaken in the future, with such vesting conditions, as applicable, to be determined in accordance with the WillScot Mobile Mini 2020 Incentive Award Plan (the "2020 Incentive Plan").

The following types of awards can be issued under the 2020 Incentive Plan:

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See Note 16 in Part II, Item 8 herein for additional information.

Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (in millions)

The following table sets forth information as of December 31, 2021 with respect to compensation plans under which equity securities are authorized for issuance:

Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants, and rights

Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) (in millions)

As of December 31, 2020:

Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected the first column)

Equity compensation plans approved by security holders

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Total 3,195,304 $ 13.60 4,627,837

On August 7, 2020, our Board of Directors approved a stock repurchase program that authorizes us to repurchase up to $250 million of our outstanding shares of Common Stock and equivalents.

(1) Includes (a) 0.5 million stock options, (b) 1.0 million restricted stock units and 1.8 million performance-based restricted stock units based on relative total stockholder return ("TSR") attainment levels at December 31, 2021, and (c) 0.04 million restricted stock awards issued to non-employee directors.

(2) The weighted-average exercise price is reported for the outstanding stock options reported in the first column.

There are no exercise prices for the restricted stock units, performance-based restricted stock units or restricted stock awards in the first column.

In connection with the Merger, on July 2, 2020, we converted Mobile Mini's outstanding fully vested stock options to 7,361,516 WillScot Mobile Mini stock options using a conversion ratio of 2.405 as contemplated by the Agreement and Plan of Merger, dated as of March 1, 2020, as amended on May 28, 2020 (as so amended, the “Merger Agreement”), by and among WillScot, Mobile Mini, and Picasso Merger Sub, Inc.

As of December 31, 2021, 1,527,643 options were outstanding and exercisable;

each option is exercisable for one share of Common Stock.

The weighted average exercise price of the outstanding options was $14.66 as of December 31, 2021.

These options are not included in the table above as they were not issued under the incentive award plans.

In October 2021, our Board of Directors replaced the existing share repurchase program with a new share repurchase program that authorizes us to repurchase up to $1.0 billion of our outstanding shares of Common Stock and equivalents.

The stock repurchase program does not obligate us to purchase any particular number of shares, and the timing and exact amount of any repurchases will depend on various factors, including market pricing and conditions, business, legal, accounting, and other considerations.

We may repurchase our shares in open market transactions from time to time or through privately negotiated transactions in accordance with federal securities laws, at our discretion.

The repurchase program, which has no expiration date, may be increased, suspended, or terminated at any time.

The program is expected to be implemented over the course of several years and is conducted subject to the covenants in the agreements governing our indebtedness.

During the year ended December 31, 2020, no shares of Common Stock were repurchased, and the Company repurchased $35.3 million warrants and share equivalents, including withholding taxes on net share settlements of employee stock awards.

As of December 31, 2021, $956.7 million of the $1.0 billion share repurchase authorization remained available for use.

The following table summarizes our purchase of Common Stock and equivalents during the fourth quarter of 2021:

Period Total Number of Shares and Equivalents Purchased (in thousands) Average Price Paid per Share Total Numbers of Shares and Equivalents Purchased as part of Publicly Announced Plan (in thousands) Maximum Dollar Value of Shares and Equivalents that May Yet Be Purchased Under the Plan (in thousands)

October 1, 2021 - October 31, 2021 Common Stock - 638.7 $ 32.82 638.7 $ 978,663

2018 Warrants - 11.3 $ 31.91 11.3

The following information describes repurchases of the 2015 Warrants during the fourth quarter of the year ended December 31, 2020:

Period Total Number of 2015 Warrants Purchased Average price paid per warrant Total number of warrants purchased as part of a publicly announced plan Maximum number of warrants that may yet be purchased under the plan

October 1, 2020 - October 31, 2020 — $ — — 17,561,700

November 1, 2020 - November 30, 2020 1,650,000 $ 3.52 — 15,841,700

December 1, 2020 - December 31, 2020 3,131,700 $ 5.03 — 12,710,000

Total 4,781,700 — 12,710,000

November 1, 2021 - November 30, 2021 Common Stock - 224.0 $ 35.66 224.0 $ 970,468

2018 Warrants - 5.3 $ 37.83 5.3

The following information describes the repurchases of the 2018 Warrants during the fourth quarter of the year ended December 31, 2020:

Period Total Number of 2018 Warrants Purchased Average price paid per warrant Total number of warrants purchased as part of a publicly announced plan Maximum number of warrants that may yet be purchased under the plan

October 1, 2020 - October 31, 2020 — $ — — 9,782,106

November 1, 2020 - November 30, 2020 37,156 $ 5.57 — 9,744,950

December 1, 2020 - December 31, 2020 14,709 $ 5.93 — 9,730,241

December 1, 2021 - December 31, 2021 Common Stock - 342.6 $ 40.23 342.6 $ 956,679

2018 Warrants - 0 N/A N/A

Total 1,221.9 $ 29.98 1,221.9

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The following stock price performance graph should not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Exchange Act or the Securities Act of 1933, as amended, except to the extent that we specifically incorporate this information by reference and shall not otherwise be deemed filed under such acts.

The graph below compares the cumulative total return of our Common Stock from January 1, 2016, through December 31, 2020, with the comparable cumulative return of two indices, the Russell 2000 and the Nasdaq US Benchmark TR Index.

The graph plots the growth in value of an initial investment in each of our common shares, the Russell 2000 Index, and the Nasdaq US Benchmark Index over the indicated time periods, and as sumes reinvestment of all dividends, if any, paid on the securities.

The graph below compares the cumulative total return of our Common Stock from January 1, 2017 through December 31, 2021, with the comparable cumulative return of four indices, the Russell 2000 Index, the Nasdaq US Benchmark TR Index, the S&P 400 Index and the Russell 3000 Index.

We began showing the cumulative return of the S&P 400 Index and Russell 3000 Index in 2021, as the S&P 400 Index includes companies with comparable market capitalization and the Russell 3000 Index includes our peer group of issuers.

The graph plots the growth in value of an initial investment in each of our common shares, the Russell 2000 Index, the Nasdaq US Benchmark Index, the S&P 400 Index and the Russell 3000 Index over the indicated time periods, and as sumes reinvestment of all dividends, if any, paid on the securities.

We have not paid any cash dividends and, therefore, the cumulative total return calculation for us is based solely upon share price appreciation and not upon reinvestment of cash dividends.

The share price performance shown on the graph is not necessarily indicative of future price performance.

Selected Financial Data

WillScot was incorporated under the name Double Eagle Acquisition Corporation ("Double Eagle") on June 26, 2015.

Prior to November 29, 2017, Double Eagle was a Nasdaq-listed special purpose acquisition company.

On November 29, 2017, Double Eagle acquired Williams Scotsman International, Inc.

(“WSII”) from Algeco Scotsman Global S.à r.l., which is majority owned by an investment fund managed by TDR Capital (the “Business Combination”).

In connection with the Business Combination, Double Eagle domesticated to Delaware and changed its name to WillScot Corporation.

On December 20, 2017, WSII acquired 100% of the issued and outstanding ownership of Acton Mobile Holdings LLC.

On August 15, 2018, WSII acquired ModSpace.

Results of operations from ModSpace subsequent to the acquisition are included in our consolidated operating results.

On July 1, 2020, WillScot Corporation merged with Mobile Mini, Inc.

Results of operations from Mobile Mini, Inc.

subsequent to the Merger are included in our consolidated operating results.

As a result of the Merger, we evaluated our operating structure and, accordingly, our segment structure and determined we operate in four reportable segments as follows:

North America Modular Solutions ("NA Modular"), North America Storage Solutions ("NA Storage"), United Kingdom Storage Solutions ("UK Storage") and Tank and Pump Solutions ("Tank and Pump").

The NA Modular segment aligns with the WillScot legacy business prior to the Merger and the NA Storage, UK Storage and Tank and Pump segments align with the Mobile Mini segments prior to the Merger.

In connection with the Merger, we determined our reportable segments as discussed above and retrospectively adjusted prior years' presentation to conform to the current presentation of reportable segments.

The following selected historical financial information should be read together with the consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The selected historical financial information in this section is not intended to replace WillScot Mobile Mini’s consolidated financial statements and the related notes.

Consolidated Results As of and for the Year Ended December 31,

(in thousands) 2020 2019 2018

Leasing and services revenue:

Leasing $ 1,001,447 $ 744,185 $ 518,235

Delivery and installation 274,156 220,057 154,557

Sales revenue:

New units 53,093 59,085 53,603

Rental units 38,949 40,338 25,017

Total revenues 1,367,645 1,063,665 751,412

Costs of leasing and services:

Leasing 227,376 213,151 143,120

Delivery and installation 220,102 194,107 143,950

Costs of sales:

New units 34,841 42,160 36,863

Rental units 24,772 26,255 16,659

Depreciation of rental equipment 200,581 174,679 121,436

Gross profit 659,973 413,313 289,384

Selling, general and administrative 360,626 271,004 234,820

Transaction costs 64,053 — 20,051

Other depreciation and amortization 43,249 12,395 13,304

Impairment losses on long-lived assets — 2,848 1,600

Lease impairment expense and other related charges 4,876 8,674 —

Restructuring costs 6,527 3,755 15,468

Currency (gains) losses, net (355) (688) 2,454

Other income, net (1,718) (2,200) (4,574)

Operating income 182,715 117,525 6,261

Interest expense 119,886 122,504 98,433

Loss on extinguishment of debt 42,401 8,755 —

Income (loss) before tax 20,428 (13,734) (92,172)

Income tax benefit (51,451) (2,191) (38,600)

Net income (loss) $ 71,879 $ (11,543) $ (53,572)

Earnings (loss) per share attributable to WillScot Mobile Mini – basic $ 0.42 $ (0.10) $ (0.59)

Earnings (loss) per share attributable to WillScot Mobile Mini – diluted $ 0.41 $ (0.10) $ (0.59)

Cash Flow Data:

Net cash from operating activities $ 304,812 $ 172,566 $ 37,149

Net cash from investing activities $ (125,360) $ (152,582) $ (1,217,202)

Net cash from financing activities $ (158,958) $ (26,063) $ 1,180,037

Other Financial Data:

Adjusted EBITDA - NA Modular (a)

$ 394,805 $ 356,548 $ 215,533

Adjusted EBITDA - NA Storage (a)

$ 99,837 $ — $ —

Adjusted EBITDA - UK Storage (a)

$ 17,822 $ — $ —

Adjusted EBITDA - Tank and Pump (a)

$ 17,843 $ — $ —

Consolidated Adjusted EBITDA (a)

$ 530,307 $ 356,548 $ 215,533

Free Cash Flow (a)

$ 162,279 $ 19,984 $ (96,907)

Adjusted Gross Profit (a)

$ 860,554 $ 587,992 $ 410,820

Net CAPEX (a)

$ 142,533 $ 152,582 $ 134,056

Balance Sheet Data (end of year):

Cash and cash equivalents $ 24,937 $ 3,045 $ 8,958

Rental equipment, net $ 2,933,722 $ 1,944,436 $ 1,929,290

Total assets $ 5,572,205 $ 2,897,649 $ 2,752,485

Total debt, excluding current portion $ 2,453,809 $ 1,632,589 $ 1,674,540

Total shareholders’ equity $ 2,141,277 $ 644,365 $ 638,215

(a) WillScot Mobile Mini presents Adjusted EBITDA, Free Cash Flow, Adjusted Gross Profit and Net CAPEX, which are measurements not calculated in accordance with GAAP and are defined below in the section "Reconciliation of non-GAAP Financial Measures," because they are key metrics used by management to assess financial performance.

Our business is capital intensive, and these additional metrics allow management to further evaluate its operating performance.

See below for reconciliations of non-GAAP financial measures.

Quarterly Consolidated Results for the Year Ende d December 31, 2020

(in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Full Year

Revenue $ 255,821 $ 256,862 $ 417,315 $ 437,647 $ 1,367,645

Gross profit $ 106,190 $ 109,964 $ 209,564 $ 234,255 $ 659,973

Adjusted EBITDA $ 89,544 $ 97,520 $ 163,559 $ 179,684 $ 530,307

Net CAPEX $ 30,540 $ 36,383 $ 33,323 $ 42,287 $ 142,533

Modular space units on rent (average during the period)

87,989 87,096 111,227 111,793 99,526

Average modular space utilization rate

69.2 % 68.5 % 70.6 % 70.9 % 70.2 %

Average modular space monthly rental rate

$ 653 $ 669 $ 640 $ 670 $ 658

Portable storage units on rent (average during the period)

16,346 15,869 143,840 160,538 84,148

Average portable storage utilization rate

64.1 % 62.5 % 73.2 % 81.2 % 75.9 %

Average portable storage monthly rental rate

$ 119 $ 120 $ 131 $ 136 $ 132

Average tank and pump solutions rental fleet utilization based on original equipment cost — % — % 58.2 % 65.2 % 61.7 %

Quarterly Consolidated Results for the Year Ended December 31, 2019

(in thousands, except for units on rent and monthly rental rate) Q1 Q2 Q3 Q4 Full Year

Revenue $ 253,685 $ 263,713 $ 268,222 $ 278,045 $ 1,063,665

Gross profit $ 103,331 $ 101,484 $ 99,308 $ 109,190 $ 413,313

Adjusted EBITDA $ 83,354 $ 87,554 $ 87,424 $ 98,216 $ 356,548

Net CAPEX $ 41,814 $ 43,199 $ 37,761 $ 29,808 $ 152,582

Modular space units on rent (average during the period)

93,309 92,300 91,233 90,013 91,682

Average modular space utilization rate

72.4 % 71.9 % 71.2 % 70.7 % 72.0 %

Average modular space monthly rental rate

$ 575 $ 611 $ 630 $ 641 $ 614

Portable storage units on rent (average during the period)

17,419 16,544 16,416 16,944 16,878

Average portable storage utilization rate

66.1 % 63.3 % 63.0 % 66.1 % 65.8 %

Average portable storage monthly rental rate

$ 119 $ 121 $ 123 $ 118 $ 120

Reconciliation of non-GAAP Financial Measures

The following presents definitions and reconciliations to the nearest comparable GAAP measure of certain non-GAAP financial measures used in this Annual Report on Form 10-K.

Adjusted EBITDA

We define EBITDA as net income (loss) plus interest (income) expense, income tax expense (benefit), depreciation and amortization.

Our adjusted EBITDA ("Adjusted EBITDA") reflects the following further adjustments to EBITDA to exclude certain non-cash items and the effect of what we consider transactions or events not related to our core business operations:

• Currency (gains) losses, net:

on monetary assets and liabilities denominated in foreign currencies other than the subsidiaries’ functional currency.

Substantially all such currency gains (losses) are unrealized and attributable to financings due to and from affiliated companies.

• Goodwill and other impairment charges related to non-cash costs associated with impairment charges to goodwill, other intangibles, rental fleet and property, plant and equipment.

• Restructuring costs, lease impairment expense, and other related charges associated with restructuring plans designed to streamline operations and reduce costs including employee and lease termination costs.

• Transaction costs including legal and professional fees and other transaction specific related costs.

• Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee training costs, and other costs required to realize cost or revenue synergies.

• Non-cash charges for stock compensation plans.

• Other expense includes consulting expenses related to certain one-time projects, financing costs not classified as interest expense, and gains and losses on disposals of property, plant, and equipment.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider the measure in isolation or as a substitute for net income (loss), cash flow from operations or other methods of analyzing WillScot Mobile Mini’s results as reported under US GAAP.

Some of these limitations are:

• Adjusted EBITDA does not reflect changes in, or cash requirements for our working capital needs;

• Adjusted EBITDA does not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;

• Adjusted EBITDA does not reflect our tax expense or the cash requirements to pay our taxes;

• Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capex or contractual commitments;

• Adjusted EBITDA does not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements;

• other companies in our industry may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.

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.

The following tables provide an unaudited reconciliation of Net income (loss) to Adjusted EBITDA:

(in thousands) Q1 Q2 Q3 Q4 Full Year

Net (loss) income $ (3,674) $ 12,833 $ 16,252 $ 46,468 $ 71,879

Income tax expense (benefit) 790 (285) (66,675) 14,719 (51,451)

(Loss) income before income tax (2,884) 12,548 (50,423) 61,187 20,428

Loss on extinguishment of debt — — 42,401 — 42,401

Interest expense 28,257 28,519 33,034 30,076 119,886

Depreciation and amortization 49,022 48,377 71,704 74,727 243,830

Currency losses (gains), net 898 (380) (371) (502) (355)

Restructuring costs, lease impairment expense and other related charges 1,601 2,143 4,798 2,861 11,403

Transaction costs 9,431 1,619 52,191 812 64,053

Integration costs 1,685 2,153 7,083 7,417 18,338

Stock compensation expense 1,787 2,227 2,944 2,921 9,879

Other (253) 314 198 185 444

Adjusted EBITDA $ 89,544 $ 97,520 $ 163,559 $ 179,684 $ 530,307

(in thousands) Q1 Q2 Q3 Q4 Full Year

Net (loss) income $ (10,029) $ (11,438) $ 997 $ 8,927 $ (11,543)

Income tax expense (benefit) 378 (1,180) (1,220) (169) (2,191)

(Loss) income before income tax (9,651) (12,618) (223) 8,758 (13,734)

Loss on extinguishment of debt — 7,244 — 1,511 8,755

Interest expense 31,115 31,668 30,005 29,716 122,504

Depreciation and amortization 43,887 46,917 47,358 48,912 187,074

Currency (gains) losses, net (316) (354) 234 (252) (688)

Goodwill and other impairment charges 2,290 348 — 210 2,848

Restructuring costs, lease impairment expense and other related charges 4,741 3,152 1,863 2,673 12,429

Integration costs 10,138 8,242 5,483 2,744 26,607

Stock compensation expense 1,290 1,900 1,812 1,684 6,686

Other (140) 1,055 892 2,260 4,067

Adjusted EBITDA $ 83,354 $ 87,554 $ 87,424 $ 98,216 $ 356,548

(in thousands) Q1 Q2 Q3 Q4 Full Year

Net (loss) income $ (6,835) $ 379 $ (36,729) $ (10,387) $ (53,572)

Income tax benefit (420) (6,645) (6,507) (25,028) (38,600)

Loss before income tax (7,255) (6,266) (43,236) (35,415) (92,172)

Interest expense 11,719 12,155 43,447 31,112 98,433

Depreciation and amortization 26,281 25,040 39,254 44,165 134,740

Currency losses (gains), net 1,024 572 (425) 1,283 2,454

Goodwill and other impairment charges — — — 1,600 1,600

Restructuring costs, lease impairment expense and other related charges 628 449 6,137 8,254 15,468

Transaction costs — 4,118 10,672 5,261 20,051

Integration costs 2,630 4,785 7,453 15,138 30,006

Stock compensation expense 121 1,054 1,050 1,214 3,439

Other 344 9 266 895 1,514

Adjusted EBITDA $ 35,492 $ 41,916 $ 64,618 $ 73,507 $ 215,533

Adjusted Gross Profit and Adjusted Gross Profit Percentage

We define Adjusted Gross Profit as gross profit plus depreciation on rental equipment.

Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue.

Adjusted Gross Profit and 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.

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.

The following table provides an unaudited reconciliation of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage on a historical basis:

Year Ended December 31,

(in thousands) 2020 2019 2018

Revenue (A) $ 1,367,645 $ 1,063,665 $ 751,412

Gross profit (B) $ 659,973 $ 413,313 $ 289,384

Depreciation of rental equipment 200,581 174,679 121,436

Adjusted Gross Profit (C) $ 860,554 $ 587,992 $ 410,820

Gross Profit Percentage (B/A) 48.3 % 38.9 % 38.5 %

Adjusted Gross Profit Percentage (C/A) 62.9 % 55.3 % 54.7 %

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.

Management believes that the presentation of Net CAPEX provides useful information to investors regarding the net capital invested into our rental fleet and property, plant and equipment each year to assist in analyzing the performance of our business.

The following tables provide unaudited reconciliations of Net CAPEX on a historical quarterly basis:

Quarterly Consolidated Results for the Year Ended December 31, 2020

(in thousands) Q1 Q2 Q3 Q4 Full Year

Total Capital Expenditures $ 41,166 $ 41,702 $ 48,484 $ 57,485 $ 188,837

Total Proceeds 10,626 5,319 15,161 15,198 46,304

Net CAPEX $ 30,540 $ 36,383 $ 33,323 $ 42,287 $ 142,533

Quarterly Consolidated Results for the Year Ended December 31, 2019

(in thousands) Q1 Q2 Q3 Q4 Full Year

Total Capital Expenditures $ 53,502 $ 63,485 $ 50,490 $ 45,969 $ 213,446

Total Proceeds 11,688 20,286 12,729 16,161 60,864

Net CAPEX $ 41,814 $ 43,199 $ 37,761 $ 29,808 $ 152,582

Quarterly Consolidated Results for the Year Ended December 31, 2018

(in thousands) Q1 Q2 Q3 Q4 Full Year

Total Capital Expenditures $ 33,084 $ 33,295 $ 48,217 $ 50,909 $ 165,505

Total Proceeds 8,651 4,063 9,560 9,175 31,449

Net CAPEX $ 24,433 $ 29,232 $ 38,657 $ 41,734 $ 134,056

Free Cash Flow

We define Free Cash Flow as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities.

Management believes that the presentation of Free Cash Flow provides useful information to investors regarding our results of operations because it provides useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements.

Free Cash Flow for the three months ended June 30, 2020, 2019 and 2018, is derived by subtracting the cash flows from operating activities and the relevant line items within investing activities for the three months ended March 31, 2020, 2019 and 2018, from corresponding items for the six months ende d June 30, 2020, 2019 and 2018, respectively.

Free Cash Flow for the three months ended September 30, 2020, 2019 and 2018, is derived by subtracting the cash flows from operating activities and the relevant line items within investing activities for the six months ended June 30, 2020, 2019 and 2018, from corresponding items for the nine months ended September 30, 2020, 2019 and 2018, respectively.

Free Cash Flow for the three months ended December 31, 2020, 2019 and 2018, is derived by subtracting the cash flows from operating activities and the relevant line items within investing activities for the nine months ended September 30, 2020, 2019 and 2018, from corresponding items for the years ended December 31, 2020, 2019 and 2018, respectively.

The following tables provide a reconciliation of net cash provided by operating activities to Free Cash Flow:

Quarterly Consolidated Results for the Year Ended December 31, 2020

(in thousands) Q1 Q2 Q3 Q4 Full Year

Net cash provided by operating activities $ 38,348 $ 75,379 $ 61,368 $ 129,717 $ 304,812

Purchase of rental equipment and refurbishments (39,648) (40,034) (42,591) (50,110) (172,383)

Proceeds from sale of rental equipment 6,786 5,316 13,179 13,668 38,949

Purchase of property, plant and equipment (1,518) (1,668) (5,893) (7,375) (16,454)

Proceeds from the sale of property, plant and equipment 3,840 3 1,982 1,530 7,355

Free Cash Flow $ 7,808 $ 38,996 $ 28,045 $ 87,430 $ 162,279

Quarterly Consolidated Results for the Year Ended December 31, 2019

(in thousands) Q1 Q2 Q3 Q4 Full Year

Net cash provided by operating activities $ 15,256 $ 44,798 $ 39,022 $ 73,490 $ 172,566

Purchase of rental equipment and refurbishments (51,873) (61,215) (47,789) (44,229) (205,106)

Proceeds from sale of rental equipment 11,601 11,482 8,421 10,597 42,101

Purchase of property, plant and equipment (1,629) (2,270) (2,701) (1,740) (8,340)

Proceeds from the sale of property, plant and equipment 87 8,804 4,308 5,564 18,763

Free Cash Flow $ (26,558) $ 1,599 $ 1,261 $ 43,682 $ 19,984

Quarterly Consolidated Results for the Year Ended December 31, 2018

(in thousands) Q1 Q2 Q3 Q4 Full Year

Net cash provided by operating activities $ 4,782 $ 14,018 $ (3,220) $ 21,569 $ 37,149

Purchase of rental equipment and refurbishments (32,084) (32,679) (46,742) (49,378) (160,883)

Proceeds from sale of rental equipment 8,128 3,905 9,560 9,168 30,761

Purchase of property, plant and equipment (1,000) (616) (1,475) (1,531) (4,622)

Proceeds from the sale of property, plant and equipment 523 158 — 7 688

Free Cash Flow $ (19,651) $ (15,214) $ (41,877) $ (20,165) $ (96,907)

Cautionary Note Regarding Forward Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act.

The words “estimates,” “expects,” “anticipates,” “believes,” “forecasts,” “plans,” “intends,” “may,” “will,” “should,” “shall,” “outlook,” “guidance” and variations of these words and similar expressions identify forward-looking statements, which are generally not historical in nature and relate to expectations for future financial performance or business strategies or objectives.

Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other important factors, many of which are outside our control, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.

Although we believe that these forward-looking statements are based on reasonable assumptions, we can give no assurance that any such forward-looking statement will materialize.

Important factors that may affect actual results or outcomes include, among others:

• our ability to successfully acquire and integrate new operations, including Mobile Mini and our conversion to its enterprise resource planning system, and to realize anticipated synergies from the Merger with Mobile Mini;

• operational, economic, political and regulatory risks;

• the effect of global or local economic conditions in the industries and markets in which the Company operates and

any changes therein, including financial market conditions and levels of end market demand;

• the impact of the global pandemic related to COVID-19, including the financial condition of the Company’s customers and suppliers and employee health and safety;

• risks associated with cybersecurity and IT systems disruptions, including our ability to manage the business in the event a disaster shuts down our management information systems;

• effective management of our rental equipment;

• trade policies and changes in trade policies, including the imposition of tariffs, their enforcement and downstream consequences;

• our ability to effectively compete in the modular space, portable storage and tank and pump industries;

• our ability to effectively manage our credit risk, collect on our accounts receivable, and recover our rental equipment;

• our ability to effectively launch operations into new geographic markets and/or add other business unit operations in existing markets;

• the effect of changes in state building codes on our ability to remarket our buildings;

• foreign currency exchange rate exposure;

• fluctuations in interest rates and commodity prices;

• significant increases in raw material and labor costs;

• fluctuations in fuel costs or oil prices, a reduction in fuel supplies, or a sustained decline in oil prices;

• our reliance on third party manufacturers and suppliers;

• risks associated with labor relations, labor costs and labor disruptions;

• failure to retain key personnel;

• impairment of our goodwill, intangible assets and indefinite-life intangible assets;

• our ability to use our net operating loss carryforwards and other tax attributes;

• our ability to recognize deferred tax assets such as those related to our tax loss carryforwards and, as a result, utilize future tax savings;

• unanticipated changes in our tax obligations, the adoption of a new tax legislation, or exposure to additional income tax liabilities;

• various laws and regulations, including those governing government contracts, corruption and the environment;

• changes in the competitive environment of our customer base as a result of the global, national or local economic climate in which they operate and/or economic or financial disruptions to their industry;

• risks associated with operational measures designed to increase revenue while continuing to control operating costs;

• our ability to adequately protect our intellectual property and other proprietary rights that are material to our business;

• natural disasters and other business disruptions such as pandemics, fires, floods, hurricanes, earthquakes and terrorism;

• property, casualty or other losses not covered by our insurance;

• our ability to redeploy our units effectively should a significant number of our leased units be returned during a short period of time;

• our ability to close our unit sales transactions;

• our ability to maintain an effective system of internal controls and accurately report our financial results;

• public company requirements that may strain our resources and divert management's attention;

• our ability to manage growth and execute our business plan;

• changes in the supply and price of new and used products we lease;

• unanticipated threats including market entry by a new competitor;

• rising costs adversely affecting our profitability;

• other factors detailed under the section entitled "Risk Factors."

Any forward-looking statement speaks only at the date which it is made, and we undertake no obligation, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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

What changed 10-K

Item 5. Market for Registrant’s Common Equity