What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-03 compared with 2022-08-04 · 299 added, 315 removed, 381 unchanged (62% of the section changed)

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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.

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, 2022 or prior periods.

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, 2022 or prior periods.

The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the US (“GAAP”).

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We service diverse end markets across all sectors of the economy throughout the United States ("US"), Canada, Mexico and the United Kingdom ("UK").

We are also a leading provider of specialty containment solutions in the US with approximately 13,500 tank and pump units in our fleet.

As of June 30, 2022, our branch network included approximately 280 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 164,000 modular space units and over 218,000 portable storage units in our fleet.

As of September 30, 2022, our branch network included approximately 260 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 167,000 modular space units and over 239,000 portable storage units in our fleet, representing over 130 million square feet of relocatable space.

We primarily lease, rather than sell, our modular and portable storage units to customers, which results in a highly diversified and predictable recurring revenue stream.

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Core to our operating model is the ability to redeploy standardized assets across end markets, as we did in 2020 and 2021 to service emerging demand in the healthcare and government sectors related to COVID-19, as well as expanded space requirements related to social distancing.

We track several market leading indicators to predict demand, including those related to our two largest end markets, the commercial and industrial segment and the construction segment, which collectively accounted for approximately 47% and 40% of our revenues, respectively, for the three months ended June 30, 2022.

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.

We track several market leading indicators to predict demand, including those related to our two largest end markets, the commercial and industrial segment and the construction segment, which collectively accounted for approximately 47% and 41% of our revenues, respectively, for the three months ended September 30, 2022.

We remain focused on our core priorities of growing leasing revenues by increasing units on rent, both organically and through mergers and acquisitions, delivering “Ready to Work” solutions to our customers with value added products and services ("VAPS"), and on continually improving the overall customer experience.

Significant Developments

Amendment to the ABL Facility

On June 30, 2022, the Company amended its ABL Facility to, among other things, extend the expiration date until June 30, 2027 and increase the aggregate principal amount of revolving credit facilities from $2.4 billion to $3.7 billion.

The amendment also converted the interest rate for borrowings denominated in US dollars from a LIBOR-based rate to a Term SOFR-based rate with an interest period of one month and adjusted the applicable margins.

The applicable margin for Canadian BA rate, Term SOFR, British Pounds Sterling and Euros loans decreased to 1.50%.

The applicable margin for base rate and Canadian Prime Rate loans decreased to 0.50%.

The applicable margins are subject to one step down of 0.25% based on excess availability or one step up of 0.25% based on the Company's leverage ratio.

On September 30, 2022, we sold our Tank and Pump Solutions ("Tank and Pump") business for $319.5 million.

Proceeds from the sale will be used to support ongoing reinvestment in our core Modular and Storage operating segments and other capital allocation priorities.

In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations , we determined that the criteria for discontinued operations presentation were met during the third quarter of 2022 and results for the three and nine months ended September 30, 2022 and 2021 for Tank and Pump are reported in income from discontinued operations within the condensed consolidated statements of operations and the carrying value of the divested business' assets and liabilities are presented within assets and liabilities held for sale on the condensed consolidated balance sheet as of December 31, 2021.

See Note 3 to the Condensed Consolidated Financial Statements for further information.

As part of the divestiture, the Company entered into a customary transition services agreement with the buyer to assist them in the transition of certain functions, including, but not limited to, information technology, accounting and human resources for a period of six months with an option for the buyer to extend the agreement for a period of up to twelve months.

There will be no significant continuing involvement with the Tank and Pump business after its disposal.

Inflation and Supply Chain Issues

Similar to many other organizations, we face inflationary pressures across most of our input costs such as building materials, labor, transportation and fuel.

Inflation has contributed to increased capital costs for both new units as well as for refurbishment of our existing units.

However, given our scale and our strong rate performance, we believe we have been able to navigate the inflationary environment well and have consistently driven margin improvements during this period of rising costs.

Additionally, given the majority of our revenue is derived from leasing our existing lease fleet units to customers and our material purchases to maintain these units consists primarily of general building materials, we have not experienced significant supply chain issues to date.

Asset Acquisitions

During the second quarter of 2022, the Company acquired certain assets and liabilities of several entities, which consisted primarily of approximately 4,100 storage units and 1,000 modular un its for $46.4 million in cash, net of cash acquired.

During the third quarter of 2022, we acquired certain assets and liabilities of several entities, which consisted primarily of approximately 7,600 storage units and 3,000 modular units for $104.7 million in cash.

When combined with other recent acquisitions over the past four quarters, we have acquired assets and liabilities from 13 regional and local storage and modular companies, consisting primarily of 16,800 storage units and 9,700 modular units.

Share and Warrant Repurchases

During the six months ended June 30, 2022, we repurchased and cancelled 33,965 of the 2018 Warrants for $0.6 million.

In addition, for the six months ended June 30, 2022, 1,037,379 of the 2018 Warrants were exercised on a cashless basis, resulting in the issuance of 631,863 shares of common stock.

At June 30, 2022, 3,006,829 of the 2018 Warrants were outstanding.

During the six months ended June 30, 2022, we repurchased a total of 9,304,626 shares of Common Stock and stock equivalents for $326.9 million, including the repurchased warrants.

As of June 30, 2022, we had $629.8 million remaining of a $1 billion share repurchase authorization under our stock repurchase program.

In July 2022, the Company's Board of Directors approved an increase to the share repurchase program that authorizes the Company to repurchase up to $1.0 billion of its outstanding shares of Common Stock and equivalents.

During the nine months ended September 30, 2022, we repurchased and cancelled 33,965 of the 2018 Warrants for $0.6 million.

In addition, for the nine months ended September 30, 2022, 1,037,379 of the 2018 Warrants were exercised on a cashless basis, resulting in the issuance of 631,863 shares of common stock.

At September 30, 2022, 3,006,829 of the 2018 Warrants were outstanding.

During the nine months ended September 30, 2022, we repurchased a total of 14,575,160 shares of Common Stock and stock equivalents for $524.4 million , including the repurchased warrants.

As of September 30, 2022, we had $863.3 million remaining of a $1.0 billion share repurchase authorization under our stock repurchase program.

Given our growth strategy and the predictability of our free cash flow, we believe that repurchases will be a reoccurring capital allocation priority.

Second Quarter Highlights

For the three months ended June 30, 2022, as compared to the three months ended June 30, 2021 unless otherwise noted, key drivers of our financial performance included:

• Total revenues increased by $120.5 million, or 26.1%, attributable to organic revenue growth levers in the business and due to the impact of acquisitions.

Third Quarter Highlights

For the three months ended September 30, 2022, as compared to the three months ended September 30, 2021, unless otherwise noted, key drivers of our financial performance included:

• Total revenues from continuing operations increased by $143.2 million, or 31.1%, attributable to organic revenue growth levers in the business and due to the impact of acquisitions.

Leasing revenue increased $104.9 million, or 30.6%, and delivery and installation revenue increased $40.9 million, or 44.5%.

Additionally, rental unit sales increased $1.3 million, or 8.6%, and new unit sales revenue increased $0.1 million, or 0.9%.

We estimate that recent acquisitions completed over the past four quarters contributed approximately $19.0 million to total revenues for the three months ended June 30, 2022.

Key leasing revenue drivers include:

Additionally, rental unit sales increased $2.7 million, or 24.1%, and new unit sales revenue decreased $5.5 million, or 35.7%.

We estimate that recent acquisitions completed over the past four quarters contributed approximately $22.4 million to total revenues for the three months ended September 30, 2022.

Key leasing revenue drivers included:

– Average portable storage units on rent increased 41,048 units, or 25.1%, and average modular space units on rent increased 4,153 units, or 3.8%, across all segments.

Approximately 35% of the increase in total average units on rent was driven by increases in organic delivery activity and lower return activity during 2021 and into the first half of 2022 as economic activity rebounded versus 2020 and the other 65% was driven by units on rent added through recent acquisitions.

– Average modular space monthly rental rate increased $117, or 15.9%, to $853 driven by strong pricing performance across NA Modular and NA Storage segments.

Approximately 53% of the increase in total average units on rent was driven by units on rent added through recent acquisitions and the other 47% was driven by increases in organic delivery activity and lower return activity during 2021 and 2022.

– Average modular space monthly rental rate increased $140, or 18.3%, to $907 driven by strong pricing performance across the NA Modular and NA Storage segments.

Average modular space monthly rental rates increased by $157, or 18.8%, in the NA Modular segment and by $144, or 23.9%, in the NA Storage segment.

Average modular space monthly rental rates decreased by $63, or 13.9%, in the UK Storage segment due to the weakening of the British Pound and were up £1, or 0.3%, in local currency.

– Average portable storage monthly rental rate increased $33, or 23.7%, to $172 driven by increased pricing as a result of our price management tools and processes, further supported by tight supply of portable storage containers in the markets in which we operate.

– Average utilization for portable storage units increased to 86.0% from 77.7% for the same period in 2021 driven by increased demand in 2022 as compared to the same period in 2021.

Average utilization for modular space units decreased 150 basis points ("bps") to 68.8%.

• NA Modular segment revenue, which represented 59.8% of consolidated revenue for the three months ended June 30, 2022, increased $58.3 million, or 20.1%, to $347.7 million.

The increase was driven by our core leasing revenue, which grew $34.4 million, or 15.8%, due to continued growth of pricing and value added products.

Delivery and installation revenues increased $18.8 million, or 34.2%, driven by increased pricing on new deliveries and returns and increased volumes as compared to 2021.

Rental unit sales increased $3.4 million, or 34.0%, and new unit sales increased $1.6 million, or 23.2%, due to higher activity levels.

NA Modular revenue drivers for the three months ended June 30, 2022 included:

– Average portable storage monthly rental rate increased $37, or 25.5%, to $182 driven by increased pricing as a result of our price management tools and processes, further supported by high utilization, and by an acceleration earlier into the third quarter of our seasonal retail business.

– Average utilization for portable storage units increased 500 basis points ("bps") to 88.9% as compared to the same period in 2021 driven by increased demand in 2022 including the acceleration earlier into the third quarter of our seasonal retail business as compared to the same period in 2021.

Average utilization for modular space units decreased 120 bps to 68.9%.

• NA Modular segment revenue, which represented 62.1% of consolidated revenue for the three months ended September 30, 2022, increased $76.3 million, or 25.5%, to $375.4 million.

The increase was driven by our core

leasing revenue, which grew $51.6 million, or 23.5%, due to continued growth of pricing and value added products.

Delivery and installation revenues increased $26.4 million, or 45.5%, driven by increased pricing on new deliveries and returns and increased delivery volumes as compared to 2021.

Rental unit sales increased $4.0 million, or 51.3%, and new unit sales decreased $5.6 million, or 41.5%.

NA Modular segment revenue drivers for the three months ended September 30, 2022 included:

– Modular space average monthly rental rate of $991 increased 18.8% year over year representing a continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio.

– Average modular space units on rent increased 3,146, or 3.7%, year over year driven primarily by units on rent added through recent acquisitions.

– Average modular space monthly utilization decreased 10 bps to 67.6% for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021 due to lower utilized fleet added through acquisitions.

• NA Storage segment revenue, which represented 30.1% of consolidated revenue for the three months ended June 30, 2022, increased $59.4 million, or 51.3%, to $175.2 million.

The increase was driven by our core leasing revenue, which grew $48.3 million, or 56.2%, due to increased units on rent driven by significant increases in delivery activity during 2021 and into the first half of 2022 as economic activity rebounded versus 2020, recent acquisition activity, and increased pricing.

– Average modular space monthly utilization increased 20 bps to 67.8% for the three months ended September 30, 2022, as compared to the three months ended September 30, 2021.

• NA Storage segment revenue, which represented 33.5% of consolidated revenue for the three months ended September 30, 2022, increased $68.7 million, or 51.3%, to $202.6 million.

The increase was driven by our core leasing revenue, which grew $55.4 million, or 54.7%, due to increased units on rent driven by significant increases in delivery activity during 2021 and 2022 as economic activity rebounded versus 2020, recent acquisition activity, and increased pricing and value added products.

Delivery and installation revenues increased $14.3 million, or 50.5%, driven by increased demand for new project deliveries, and by increased pricing on new deliveries and returns as compared to 2021.

The increases to leasing revenue and delivery and installation revenues in the NA Storage segment were also impacted as a result of transitioning the majority of the portable storage product business within the NA Modular segment to the NA Storage segment in the third quarter of 2021.

Rental unit sales decreased $2.1 million, or 47.7%, and new unit sales decreased $0.5 million, or 26.3% given constrained container supply.

NA Storage revenue drivers for the three months ended June 30, 2022 included:

• Portable storage average monthly rental rate of $186, increased 23.2% year over year as a result of our price management tools and processes, further supported by tight supply of portable storage containers in the markets in which we operate.

Rental unit sales decreased $1.4 million, or 45.2%, and new unit sales increased $0.4 million, or 30.8%.

NA Storage segment revenue drivers for the three months ended September 30, 2022 included:

• Portable storage average monthly rental rate of $197 increased 27.1% year over year as a result of our price management tools and processes, further supported by high utilization, and by an acceleration earlier into the third quarter of our seasonal retail business.

Modular space average monthly rental rate of $746 increased 23.9% year over year as a result of price optimization and early benefits from increased VAPS penetration opportunities.

• Average portable storage units on rent increased 38,823, or 28.3%, year over year.

Increases in organic activity in 2021 and the first half of 2022 drove an increase in average portable storage units on rent of approximately 11% or 12,000 units on rent.

Of the remaining increase, approximately 18,700 units on rent were driven by units added in recent acquisitions, and approximately 12,000 units on rent were driven by transitioning the portable storage product business within the NA Modular segment to the NA Storage segment, which occurred in the third quarter of 2021.

Combined, average portable storage units on rent for the NA Storage and NA Modular segments increased approximately 30,034 units, or 23.8%.

Average modular space units on rent increased 1,697, or 10.4%, year over year driven by increases in organic delivery activity as well as due to units on rent acquired.

• Average portable storage monthly utilization increased 940 bps to 85.5% for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021.

Average modular space monthly utilization decreased 420 bps to 74.2% for three months ended June 30, 2022, as compared to the three months ended June 30, 2021.

• Generated consolidated net income of $73.4 million for the three months ended June 30, 2022 representing an increase of $53.0 million, or 259.8%, versus the three months ended June 30, 2021, and included $5.2 million of discrete costs expensed in the period related to integration costs.

• Generated Adjusted EBITDA of $233.3 million for the three months ended June 30, 2022, representing an increase of $57.8 million, or 32.9%, as compared to the same period in 2021.

Increases in organic activity drove an increase in average portable storage units on rent of approximately 14%, or 19,000 units on rent, including an acceleration earlier into the third quarter of our seasonal retail business.

The remaining increase of approximately 20,000 units on rent was driven by units added in recent acquisitions.

Average modular space units on rent increased 1,736, or 10.6%, year over year driven by increases in organic delivery activity as well as due to approximately 600 acquired units on rent.

• Average portable storage monthly utilization increased 560 bps to 88.8% for the three months ended September 30, 2022, as compared to the three months ended September 30, 2021.

Average modular space monthly utilization decreased 390 bps to 73.7% for the three months ended September 30, 2022, as compared to the three months ended September 30, 2021.

• UK Storage segment revenue, which represented 4.3% of consolidated revenue for the three months ended September 30, 2022, decreased $1.9 million, or 6.8%, to $26.2 million and Adjusted EBITDA decreased $1.3 million, or 9.8%, to $12.0 million driven entirely by the weakening of the British Pound relative to the US Dollar.

Unfavorable currency fluctuations reduced Adjusted EBITDA by $2.0 million in GBP.

In local currency, revenue increased 9.1% year-over-year, driven by a 13.6% increase in portable storage average monthly rental rates and a 8.4% increase in average portable storage units on rent, and Adjusted EBITDA increased by 5.7% year-over-year.

• Generated income from continuing operations of $85.7 million for the three months ended September 30, 2022 representing an increase of $28.6 million, or 46.8%, versus the three months ended September 30, 2021.

Net income including income from discontinued operations was $128.6 million for the three months ended September 30, 2022.

• Generated Adjusted EBITDA from continuing operations of $251.3 million for the three months ended September 30, 2022, representing an increase of $72.1 million, or 40.2%, as compared to the same period in 2021.

This increase was driven primarily by increased leasing gross profit.

▪ Consolidated Adjusted EBITDA Margin was 40.1% in the second quarter of 2022 and increased 200 bps versus prior year driven by increased leasing and delivery and installation margins as a result of increased volumes and pricing, partially offset by increased selling, general and administrative expense.

• Generated Free Cash Flow of $69.4 million for the three months ended June 30, 2022 representing a decrease of $12.7 million as compared to the same period in 2021.

Including results from discontinued operations representing the divestiture of the Tank and Pump segment, Adjusted EBITDA was $264 million.

▪ Consolidated Adjusted EBITDA Margin was 41.6% in the third quarter of 2022 and increased 270 bps versus prior year driven by increased leasing and delivery and installation margins as a result of increased volumes and pricing, partially offset by increased selling, general and administrative expense.

• Generated Free Cash Flow of $83.4 million for the three months ended September 30, 2022 representing an increase of $4.9 million as compared to the same period in 2021.

Net cash provided by operating activities increased $80.0 million to $210.4 million.

Net cash used in investing activities excluding acquisitions increased by $61.4 million to $118.9 million to support increases in delivery activity during 2022 as economic activity rebounded versus 2021, and the related unit on rent growth.

• Returned $249.5 million to shareholders through stock and warrant repurchases and closed four acquisitions totaling approximately 4,100 storage units and 1,000 modular un its for $46.4 million in cash, net of cash acquired, during the three months ended June 30, 2022.

Net cash used in investing activities excluding acquisitions and sale of discontinued

operations increased by $38.6 million to $127.0 million to support increases in delivery activity during 2022 as economic activity rebounded versus 2021, and the related unit on rent growth.

• Returned $197.5 million to shareholders by repurchasing 5.3 million shares of Common Stock and stock equivalents during the three months ended September 30, 2022 and closed four acquisitions totaling approximately 7,600 storage units and 3,000 modular units for $104.7 million.

We believe 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

Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30, 2021

Our condensed consolidated statements of operations for the three months ended June 30, 2022 and 2021 are presented below.

Three Months Ended June 30, 2022 vs.

Consolidated Results of Continuing Operations

Three Months Ended September 30, 2022 Compared to the Three Months Ended September 30, 2021

Our condensed consolidated statements of operations for the three months ended September 30, 2022 and 2021 are presented below.

Three Months Ended September 30, 2022 vs.

2021 $ Change

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Restructuring costs — 1,856 (1,856)

Currency (gains) losses, net (127) 33 (160)

Currency losses, net 236 127 109

Other (income) expense, net (2,526) 1,475 (4,001)

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Interest expense 38,165 29,006 9,159

Fair value loss on common stock warrant liabilities — (610) 610

Loss on extinguishment of debt — 2,814 (2,814)

Income before income tax 98,087 39,199 58,888

Income tax expense 24,711 18,828 5,883

Net income $ 73,376 $ 20,371 $ 53,005

Comparison of Three Months Ended June 30, 2022 and 2021

Total revenue increased $120.5 million, or 26.1%, to $581.6 million for the three months ended June 30, 2022 from $461.1 million for the three months ended June 30, 2021.

Leasing revenue increased $85.4 million, or 24.9%, as compared to the same period in 2021 driven by improved pricing and value added products, and an increase of 32,056 average portable storage units on rent driven by significant increases in delivery activity during 2021 and into the first half of 2022 as economic activity rebounded versus 2020 and recent acquisition activity.

Delivery and installation revenues increased $33.7 million, or 36.8%, due to increased overall activity.

Rental unit sales increased $1.3 million, or 8.6%, and new unit sales increased $0.1 million, or 0.9%.

We estimate that recent acquisitions completed over the past four quarters contributed approximately $19.0 million to total revenues for three months ended June 30, 2022.

Total average units on rent for the three months ended June 30, 2022 and 2021 were 296,794 and 262,204, respectively, representing an increase of 34,590, or 13.2%.

Portable storage average units on rent increased by 32,056 units, or 21.1%, for the three months ended June 30, 2022 driven by strong demand.

The average portable storage unit utilization

rate during the three months ended June 30, 2022 was 86.0%, as compared to 77.7% during the same period in 2021.

Modular space average units on rent increased 2,534 units, or 2.3%, for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021 driven primarily by acquisitions.

The average modular space unit utilization rate during the three months ended June 30, 2022 was 68.8%, as compared to 70.3% during the same period in 2021.

Modular space average monthly rental rates increased 15.9% to $853 for the three months ended June 30, 2022.

Income from continuing operations before income tax 115,947 62,356 53,591

Income tax expense from continuing operations 30,219 5,243 24,976

Income from continuing operations $ 85,728 $ 57,113 $ 28,615

Comparison of Three Months Ended September 30, 2022 and 2021

Total revenue increased $143.2 million, or 31.1%, to $604.2 million for the three months ended September 30, 2022 from $461.0 million for the three months ended September 30, 2021.

Leasing revenue increased $104.9 million, or 30.6%, as compared to the same period in 2021 driven by improved pricing and value added products, and an increase of 41,048 average portable storage units on rent driven by significant increases in delivery activity during 2021 and into 2022 as economic activity rebounded versus 2020 and recent acquisition activity.

Delivery and installation revenues increased $40.9 million, or 44.5%, due to increased overall activity and increased pricing due to our ability to pass through increasing fuel costs and general price increases.

Rental unit sales increased $2.7 million, or 24.1%, and new unit sales decreased $5.5 million, or 35.7%.

We estimate that recent acquisitions completed over the past four quarters contributed approximately $22.4 million to total revenues for three months ended September 30, 2022.

Total average units on rent for the three months ended September 30, 2022 and 2021 were 318,281 and 273,080, respectively, representing an increase of 45,201, or 16.6%.

Of this increase, approximately 20,000 portable storage units and 4,000 modular space units on rent were added through recent acquisitions.

Portable storage average units on rent increased by 41,048 units, or 25.1%, for the three months ended September 30, 2022 driven by strong demand and acquisitions.

The average portable storage unit utilization rate during the three months ended September 30, 2022 was 88.9%, as compared to

83.9% during the same period in 2021.

Modular space average units on rent increased 4,153 units, or 3.8%, for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021 driven primarily by acquisitions.

The average modular space unit utilization rate during the three months ended September 30, 2022 was 68.9%, as compared to 70.1% during the same period in 2021.

Modular space average monthly rental rates increased 18.3% to $907 for the three months ended September 30, 2022.

Improved pricing was achieved across all relevant segments.

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Increases were driven by a continuation of our long-term price optimization initiative 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 segment.

NA Storage also began to see early benefits from increased VAPS penetration opportunities.

Average portable storage monthly rental rates increased 23.7% to $172 for the three months ended June 30, 2022 driven by our price management tools and processes, further supported by tight supply of portable storage containers in the markets in which we operate.

The NA Storage segment also continued to see early benefits from increased VAPS penetration opportunities.

Average portable storage monthly rental rates increased 25.5% to $182 for the three months ended September 30, 2022 driven by our price management tools and processes, further supported by high utilization and by an acceleration earlier into the third quarter of our seasonal retail business at increased rates.

Gross Profit:

Our gross profit percentage was 53.1% and 48.3% for the three months ended June 30, 2022 and 2021, respectively.

Our adjusted gross profit percentage, which excludes the effects of depreciation, was 64.7% and 62.0% for the three months ended June 30, 2022 and 2021, respectively.

Gross profit increased $86.1 million, or 38.6%, to $308.9 million for the three months ended June 30, 2022 from $222.8 million for the three months ended June 30, 2021.

Our gross profit percentage was 52.0% and 51.9% for the three months ended September 30, 2022 and 2021, respectively.

Our adjusted gross profit percentage, which excludes the effects of depreciation, was 63.5% and 63.4% for the three months ended September 30, 2022 and 2021, respectively.

Gross profit increased $75.1 million, or 31.4%, to $314.3 million for the three months ended September 30, 2022 from $239.2 million for the three months ended September 30, 2021.

The increase in gross profit was a result of a $71.0 million increase in leasing gross profit, increased delivery and installation gross profit of $19.4 million and increased new and rental unit sale margins of $0.8 million.

These increases were primarily a result of increased revenues due to favorable average monthly rental rates across both portable storage and modular space units, increased pricing on delivery and installation, as well as due to higher units on rent and increased activity levels driving higher delivery and installation revenues, partially offset by increased variable costs during the period as a result of higher activity levels in the current quarter and inflationary pressures across many of our cost categories.

Depreciation increased $4.3 million as a result of capital investments made over the past twelve months in our existing rental equipment, including the impact of recent acquisitions.

Selling, general and administrative expense ("SG&A") increased $39.8 million, or 32.5%, to $162.2 million for the three months ended June 30, 2022, compared to $122.4 million for the three months ended June 30, 2021.

Employee costs excluding stock compensation increased $15.3 million, or 28.2%, driven by a 16% increase in SG&A headcount to support both organic and inorganic growth, and increased variable compensation as a result of the growth achieved.

Stock compensation expense increased $4.6 million to $9.3 million for the three months ended June 30, 2022, compared to $4.7 million for the three months ended June 30, 2021.

Integration costs decreased $2.4 million to $5.2 million for the three months ended June 30, 2022, compared to $7.6 million for the three months ended June 30, 2021.

The remaining increases were primarily driven by increased economic activity, including increased occupancy and office costs, legal and professional fees, travel expenses, and marketing cost increases.

Depreciation increased $16.2 million as a result of capital investments made in our rental equipment, including the impact of recent acquisitions.

Selling, general and administrative expense ("SG&A") increased $18.1 million, or 14.2%, to $145.4 million for the three months ended September 30, 2022, compared to $127.3 million for the three months ended September 30, 2021.

Employee costs excluding stock compensation increased $12.2 million, or 20.6%, driven by a 12% increase in SG&A headcount to support both organic and inorganic growth, wage increases, and increased variable compensation as a result of the growth achieved.

Stock compensation expense increased $1.0 million to $7.2 million for the three months ended September 30, 2022, compared to $6.2 million for the three months ended September 30, 2021.

Integration costs decreased $4.3 million to $3.9 million for the three months ended September 30, 2022, compared to $8.2 million for the three months ended September 30, 2021.

The remaining increases were primarily driven by increased economic activity and inflationary increases, including increased occupancy and office costs, legal and professional fees, insurance, travel expenses, and marketing cost increases.

Other Depreciation and Amortization:

Other depreciation and amortization decreased $2.5 million to $19.1 million for the three months ended June 30, 2022 compared to $21.6 million for the three months ended June 30, 2021.

The decrease was driven by a reduction in depreciation of buildings and office equipment.

Other depreciation and amortization increased $0.6 million to $17.1 million for the three months ended September 30, 2022 compared to $16.5 million for the three months ended September 30, 2021.

The increase was driven by an increase in depreciation of vehicles, buildings and equipment.

Lease Impairment Expense and Other Related Charges:

Lease impairment expense and other related charges were $0 for the three months ended June 30, 2022 as compared to $0.5 million for the three months ended June 30, 2021.

The decrease resulted from fewer closed locations during the three months ended June 30, 2022 as compared to the three months ended June 30, 2021.

Lease impairment expense and other related charges were $0 for the three months ended September 30, 2022 as compared to $0.6 million for the three months ended September 30, 2021.

The decrease resulted from fewer closed locations during the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.

Restructuring Costs:

Restructuring costs were $7.0 million for the three months ended June 30, 2021 primarily driven by employee termination costs resulting from the elimination of positions due to the Merger.

Currency (Gains) Losses, net:

Currency (gains) losses, net changed by $0.1 million to a $0.1 million gain for the three months ended June 30, 2022 from $0 for the three months ended June 30, 2021.

Restructuring costs were $1.9 million for the three months ended September 30, 2021 primarily driven by employee termination costs resulting from the elimination of positions due to the merger.

Currency Losses, net:

Currency losses, net changed by $0.1 million to $0.2 million for the three months ended September 30, 2022 from $0.1 million for the three months ended September 30, 2021.

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 (Income) Expense, net:

Other (income) expense, net was $3.8 million of income for the three months ended June 30, 2022 compared to $0.7 million of expense for the three months ended June 30, 2021.

Other income, net of $3.8 million for the three months ended June 30, 2022 was primarily related to insurance proceeds received related to Hurricane Ida in the Gulf Coast area of the United States.

Other (income) expense, net was $2.5 million of income for the three months ended September 30, 2022 compared to $1.5 million of expense for the three months ended September 30, 2021.

Other income, net of $2.5 million for the three months ended September 30, 2022 was primarily related to insurance recoveries in the quarter related to Hurricane Ida in the Gulf Coast area of the United States in 2021.

Interest Expense:

Interest expense increased $4.4 million, or 15.1%, to $33.6 million for the three months ended June 30, 2022 from $29.2 million for the three months ended June 30, 2021 due to both an increase in outstanding borrowings and an increase in the weighted average interest rate for borrowings under the ABL Facility prior to the June 30, 2022 amendment to the credit facility.

Interest expense increased $9.2 million, or 31.7%, to $38.2 million for the three months ended September 30, 2022 from $29.0 million for the three months ended September 30, 2021 due to both an increase in outstanding borrowings and an increase in the weighted average interest rate for borrowings under the ABL Facility due to increased benchmark interest rates, partially offset by a favorable margin reduction as a result of the June 30, 2022

amendment to the credit facility.

See Note 10 to the condensed consolidated financial statements for further discussion of our debt.

Fair Value Loss on Common Stock Warrant Liabilities:

The fair value loss on common stock warrant liabilities was $0.6 million for the three months ended June 30, 2021, primarily due to the change in estimated fair value of common stock

warrant liabilities.

Subsequent to May 2021, no 2015 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 June 30, 2022.

Loss on Extinguishment of Debt:

During the three months ended June 30, 2021, 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.

There was no similar transaction in the three months ended June 30, 2022.

Income Tax Expense:

Income tax expense increased $5.9 million to $24.7 million for the three months ended June 30, 2022 compared to $18.8 million for the three months ended June 30, 2021.

The increase in expense was driven by the pre-tax income increase for the three months ended June 30, 2022.

The tax expense for the three months ended June 30, 2021 included the impact of the UK statutory rate increase enactment.

Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

Our condensed consolidated statements of operations for the six months ended June 30, 2022 and 2021 are presented below.

Six Months Ended June 30, 2022 vs.

Income tax expense increased $25.0 million to $30.2 million for the three months ended September 30, 2022 compared to $5.2 million for the three months ended September 30, 2021.

The increase in expense was driven by the pre-tax income increase for the three months ended September 30, 2022.

Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021

Our condensed consolidated statements of operations for the nine months ended September 30, 2022 and 2021 are presented below.

Nine Months Ended September 30, 2022 vs.

2021 $ Change

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Currency losses, net 247 196 51

Other income, net (5,093) (1,269) (3,824)

Other (income) expense, net (7,642) 202 (7,844)

Operating income 369,628 228,008 141,620

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Loss on extinguishment of debt — 5,999 (5,999)

Income before income tax 165,006 54,127 110,879

Income from continuing operations before income tax 267,266 107,619 159,647

Income tax expense 67,167 32,341 34,826

Net income $ 124,547 $ 24,818 $ 99,729

Comparison of Six Months Ended June 30, 2022 and 2021

Total revenue increased $204.1 million, or 23.0%, to $1,090.5 million for the six months ended June 30, 2022 from $886.4 million for the six months ended June 30, 2021.

Leasing revenue increased $163.0 million, or 24.7%, as compared to the same period in 2021 driven by an increase of 35,501 average modular space and portable storage units on rent as a result of increased economic activity, acquisitions, and improved pricing and value added products.

Delivery and installation revenues increased $50.5 million, or 28.8%, due to increased overall activity and increased pricing.

Income from continuing operations $ 200,099 $ 75,278 $ 124,821

Comparison of Nine Months Ended September 30, 2022 and 2021

Total revenue increased $336.7 million, or 26.0%, to $1,632.3 million for the nine months ended September 30, 2022 from $1,295.6 million for the nine months ended September 30, 2021.

Leasing revenue increased $260.3 million, or 26.9%, as compared to the same period in 2021 driven by an increase of 38,780 average modular space and portable storage units on rent as a result of increased economic activity and acquisitions, and improved pricing and value added products.

Delivery and installation revenues increased $88.1 million, or 34.8%, due to increased overall activity and increased pricing due to our ability to pass through increasing fuel costs and general price increases.

Rental unit sales decreased $2.0 million, or 4.9%, and new unit sales decreased $9.7 million, or 27.0%.

Total average units on rent for the six months ended June 30, 2022 and 2021 were 294,525 and 259,024, respectively.

Modular space average units on rent increased 2,140 units, or 1.9%, for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

Modular space average monthly rental rates increased 18.9% to $836 for the six months ended June 30, 2022.

Portable storage average units on rent increased by 33,361 units, or 22.4%, for the six months ended June 30, 2022.

Average portable storage monthly rental rates increased 19.7% to $164 for the six months ended June 30, 2022.

The average modular space unit utilization rate during the six months ended June 30, 2022 was 68.9%, as compared to 70.3% during the same period in 2021.

The average portable storage unit utilization rate during the six months ended June 30, 2022 was 85.0%, as compared to 76.1% during the same period in 2021.

Total average units on rent for the nine months ended September 30, 2022 and 2021 were 302,444 and 263,664, respectively.

Modular space average units on rent increased 2,787 units, or 2.5%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021.

Modular space average monthly rental rates increased 17.3% to $853 for the nine months ended September 30, 2022.

Portable storage average units on rent increased by 35,993 units, or 23.5%, for the nine months ended September 30, 2022.

Average portable storage monthly rental rates increased 22.1% to $171 for the nine months ended September 30, 2022.

The average modular space unit utilization rate during the nine months ended September 30, 2022 was 68.9%, as compared to 70.2% during the same period in 2021.

The average portable storage unit utilization rate during the nine months ended September 30, 2022 was 86.4%, as compared to 78.7% during the same period in 2021.

Gross Profit:

Our gross profit percentage was 52.8% and 49.2% for the six months ended June 30, 2022 and 2021, respectively.

Our adjusted gross profit percentage, which excludes the effects of depreciation, was 64.7% and 62.6% for the six months ended June 30, 2022 and 2021, respectively.

Gross profit increased $139.5 million, or 32.0%, to $575.7 million for the six months ended June 30, 2022 from $436.2 million for the six months ended June 30, 2021.

Our gross profit percentage was 52.6% and 50.3% for the nine months ended September 30, 2022 and 2021, respectively.

Our adjusted gross profit percentage, which excludes the effects of depreciation, was 64.4% and 63.0% for the nine months ended September 30, 2022 and 2021, respectively.

Gross profit increased $207.5 million, or 31.9%, to $858.6 million for the nine months ended September 30, 2022 from $651.1 million for the nine months ended September 30, 2021.

The increase in gross profit was a result of a $194.2 million increase in leasing gross profit and increased delivery and installation gross profit of $42.0 million, partially offset by decreased new and rental unit sale margins of $1.6 million.

The increases in leasing gross profit and delivery and installation gross profit were driven by favorable average monthly rental rates on modular space and portable storage units, increased pricing on delivery and installation, as well as due to higher units on rent and increased activity levels driving higher delivery and installation revenues.

Depreciation increased to $129.4 million as a result of fleet acquired through acquisitions and capital investments made in our existing rental equipment.

SG&A increased $72.7 million, or 30.3%, to $312.4 million for the six months ended June 30, 2022, compared to $239.7 million for the six months ended June 30, 2021.

Employee costs excluding stock compensation increased $32.0 million, or 29.5%, driven by recent investments in new roles to fund both organic and inorganic growth, and increased variable compensation as a result of the growth achieved.

Stock compensation expense increased $7.5 million to $15.7 million for the six months ended June 30, 2022, compared to $8.2 million for the six months ended June 30, 2021.

Integration costs decreased $5.7 million to $9.3 million for the six months ended June 30, 2022, compared to $15.0 million for the six months ended June 30, 2021.

The remaining increases were primarily driven by increased economic activity, including increased occupancy and office costs, legal and professional fees, travel expenses and marketing cost increases.

Depreciation increased to $192.2 million as a result of fleet acquired through acquisitions and capital investments made in our rental equipment.

SG&A increased $88.6 million, or 24.8%, to $445.3 million for the nine months ended September 30, 2022, compared to $356.7 million for the nine months ended September 30, 2021.

Employee costs excluding stock compensation increased $45.3 million, or 27.2%, driven by a 13% increase in SG&A headcount to support both organic and inorganic growth, wage increases, and increased variable compensation as a result of the growth achieved.

Stock compensation expense increased $8.3 million to $22.6 million for the nine months ended September 30, 2022, compared to $14.3 million for the nine months ended September 30, 2021.

Integration costs decreased $10.0 million to $13.2 million for the nine months ended September 30, 2022, compared to $23.2 million for the nine months ended September 30, 2021.

Other Depreciation and Amortization:

Other depreciation and amortization decreased $1.2 million to $38.7 million for the six months ended June 30, 2022 compared to $39.9 million for the six months ended June 30, 2021.

Other depreciation and amortization decreased $0.9 million to $50.9 million for the nine months ended September 30, 2022 compared to $51.8 million for the nine months ended September 30, 2021.

Lease Impairment Expense and Other Related Charges:

Lease impairment expense and other related charges was $0.3 million for the six months ended June 30, 2022 as compared to $1.7 million for the six months ended June 30, 2021.

Lease impairment expense and other related charges was $0.3 million for the nine months ended September 30, 2022 as compared to $2.3 million for the nine months ended September 30, 2021.

Restructuring Costs:

In the six months ended June 30, 2021, the Company recorded $10.1 million of restructuring costs primarily as a result of employee termination costs from the elimination of positions due to the Merger.

In the nine months ended September 30, 2021, the Company recorded $12.0 million of restructuring costs primarily as a result of employee termination costs from the elimination of positions due to the Merger.

Employee termination costs of $7.2 million were settled in stock, which is non-cash, non-recurring and not included in stock compensation expense.

Currency Losses, Net:

Currency losses, net decreased by $0.1 million to $0 for the six months ended June 30, 2022 from $0.1 million for the six months ended June 30, 2021.

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.

Currency losses, net of $0.2 million remained flat for the nine months ended September 30, 2022 when compared to the nine months ended September 30, 2021.

Other Income, Net:

Other income, net was $5.1 million for the six months ended June 30, 2022 compared to $1.3 million for the six months ended June 30, 2021.

The increase was primarily attributable to insurance proceeds received related to Hurricane Ida in the Gulf Coast area of the United States.

Other income, net was $7.6 million of income for the nine months ended September 30, 2022 compared to $0.2 million of expense for the nine months ended September 30, 2021.

The increase was primarily attributable to insurance recoveries in the current period related to Hurricane Ida in the Gulf Coast area of the United States in 2021.

Interest Expense:

Interest expense increased $5.4 million to $64.6 million for the six months ended June 30, 2022 from $59.2 million for the six months ended June 30, 2021 due to both an increase in outstanding borrowings and an increase in the weighted average interest rate for borrowings under the ABL Facility prior to the June 30, 2022 amendment to the credit facility.

Interest expense increased $14.6 million to $102.4 million for the nine months ended September 30, 2022 from $87.8 million for the nine months ended September 30, 2021 due to both an increase in outstanding borrowings and an increase in the weighted average interest rate for borrowings under the ABL Facility due to increased benchmark interest rates, partially offset by a favorable margin reduction as a result of the June 30, 2022 amendment to the credit facility.

See Note 10 to the condensed consolidated financial statements for further discussion of our debt.

Fair Value Loss on Common Stock Warrant Liabilities:

The fair value loss on common stock warrant liabilities was $26.6 million for the six months ended June 30, 2021, primarily due to the change in estimated fair value of common stock warrant liabilities.

Subsequent to May 2021, no 2015 Private Warrants were outstanding, and as a result, there was no fair value loss on common stock warrant liabilities recorded for the six months ended June 30, 2022.

The fair value loss on common stock warrant liabilities was $26.6 million for the nine months ended September 30, 2021, primarily due to the change in estimated fair value of common stock warrant liabilities.

Subsequent to May 2021, no 2015 Private Warrants were outstanding.

Loss on Extinguishment of Debt:

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.

There was no similar transaction in the six months ended June 30, 2022.

During the nine months ended September 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.

There was no similar transaction in the nine months ended September 30, 2022.

Income Tax Expense:

Income tax expense increased $11.2 million to expense of $40.5 million for the six months ended June 30, 2022 compared to $29.3 million for the six months ended June 30, 2021.

The increase in expense was driven by the pre-tax income increase for the six months ended June 30, 2022.

The tax expense for the six months ended June 30, 2021 included the impact of the UK statutory rate increase enactment.

Income tax expense increased $34.9 million to $67.2 million for the nine months ended September 30, 2022 compared to $32.3 million for the nine months ended September 30, 2021.

The increase in expense was driven by the pre-tax income increase for the nine months ended September 30, 2022.

Business Segment Results

The Company operates in four reportable segments as follows:

NA Modular, NA Storage, UK Storage and Tank and Pump.

Following the divestiture of the Tank and Pump segment, the Company operates in three reportable segments as follows:

NA Modular, NA Storage and UK Storage.

NA Modular represents the activities of the North American modular business.

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UK Storage represents the results of all modular and portable storage operations in the UK.

Tank and Pump represents the results of all operations for Tank and Pump services.

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.

This adjustment was not made to the historical segment results of prior periods, given its relative immateriality.

The following tables and discussion summarize our reportable segment financial information for the three and six months ended June 30, 2022 and 2021.

Comparison of Three Months Ended June 30, 2022 and 2021

Three Months Ended June 30, 2022

The following tables and discussion summarize our reportable segment financial information for the three and nine months ended September 30, 2022 and 2021.

Comparison of Three Months Ended September 30, 2022 and 2021

Three Months Ended September 30, 2022

(in thousands, except for units on rent and rates)

NA Modular NA Storage UK Storage Tank and Pump Total

NA Modular NA Storage UK Storage Total

Revenue $ 375,364 $ 202,645 $ 26,164 $ 604,173

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Average portable storage monthly rental rate $ 227 $ 197 $ 88 $ 182

Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 75.7 % 75.7 %

Three Months Ended June 30, 2021

(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and Pump Total

Three Months Ended September 30, 2021

(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Total

Revenue $ 299,051 $ 133,897 $ 28,099 $ 461,047

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Average portable storage monthly rental rate $ 179 $ 155 $ 90 $ 145

Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 71.2 % 71.2 %

Total revenue increased $58.3 million, or 20.1%, to $347.7 million for the three months ended June 30, 2022 from $289.4 million for the three months ended June 30, 2021.

The increase was primarily the result of a $34.4 million, or 15.8%, increase in leasing revenue, an $18.8 million, or 34.2%, increase in modular delivery and installation revenue, a $3.4 million, or 34.0%, increase in rental unit sales revenue and a $1.6 million, or 23.2%, increase in new unit sales.

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 during the third quarter of 2021.

Approximately 12,000 units were transferred during the third quarter of 2021 to the NA Storage segment, reallocating approximately $5.0 million of revenue from the NA Modular segment to the NA Storage segment relative to the three months ended June 30, 2021.

Average modular space monthly rental rates increased 16.2% for the three months ended June 30, 2022 to $931 driven by the continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio.

Average modular space units on rent increased by 1,804 units, or 2.1%, year over year.

Total revenue increased $76.3 million, or 25.5%, to $375.4 million for the three months ended September 30, 2022 from $299.1 million for the three months ended September 30, 2021.

The increase was primarily the result of a $51.6 million, or 23.5%, increase in leasing revenue, a $26.4 million, or 45.5%, increase in modular delivery and installation revenue, a $4.0 million, or 51.3%, increase in rental unit sales revenue.

These were partially offset by a $5.6 million, or 41.5%, decrease in new unit sales.

Average modular space monthly rental rates increased 18.8% for the three months ended September 30, 2022 to $991 driven by the continuation of our long-term price optimization initiative and VAPS penetration opportunities

across our portfolio.

Average modular space units on rent increased by 3,146 units, or 3.7%, year over year primarily due to acquisitions.

Gross Profit:

Gross profit increased $37.7 million, or 32.5%, to $153.8 million for the three months ended June 30, 2022 from $116.1 million for the three months ended June 30, 2021.

Gross profit percentage increased 410 bps to 44.2%.

Gross profit increased $29.0 million, or 22.7%, to $156.9 million for the three months ended September 30, 2022 from $127.9 million for the three months ended September 30, 2021.

Gross profit percentage contracted 100 bps to 41.8%.

The increase in gross profit was driven by higher leasing gross profit, which increased $29.5 million, or 18.4%, driven by improved pricing including VAPS.

The increase in gross profit from leasing for the three months ended June 30, 2022 was further complemented by an $11.0 million increase in delivery and installation gross profit, a $1.6 million increase in rental unit sales gross profit, and a $1.8 million increase in new unit sales gross profit.

These increases were partially offset by a $4.6 million increase in depreciation of rental equipment related to capital investments made in our existing rental equipment and additional depreciation from recent acquisitions.

The increase in gross profit from leasing for the three months ended September 30, 2022 was further complemented by an $11.6 million increase in delivery and installation gross profit, and a $2.0 million increase in rental unit sales gross profit.

These increases were partially offset by a $13.6 million increase in depreciation of rental equipment related to capital investments made in our rental equipment and due to fleet acquired as part of acquisitions, and a $0.3 million decrease in new unit sales gross profit.

Adjusted EBITDA:

Adjusted EBITDA increased $24.4 million, or 23.6%, to $127.9 million for the three months ended June 30, 2022 from $103.5 million for the three months ended June 30, 2021.

Adjusted EBITDA increased $33.9 million, or 31.8%, to $140.7 million for the three months ended September 30, 2022 from $106.8 million for the three months ended September 30, 2021.

Adjusted EBITDA margin percentage increased 176 bps to 37.5%.

The increase was driven by higher leasing gross profit discussed above.

SG&A, excluding discrete items, increased $22.0 million, or 34.7%, for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021 driven primarily by increased costs for personnel, including commissions and other variable compensation, the return of more normal travel expenses, and increased subscription, legal and professional fees.

The increase was driven by higher leasing and delivery and installation gross profits discussed above.

SG&A, excluding discrete items, increased $12.8 million, or 19.2%, for the three months ended September 30, 2022, as compared to the three months ended September 30, 2021 to support higher staffing levels for both organic and inorganic growth, wage increases, and increased variable compensation as a result of the growth achieved, increased office and occupancy costs, increased travel expenses, and increased subscription, legal and professional fees.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $33.1 million, or 67.0%, to $82.5 million for the three months ended June 30, 2022 from $49.4 million for the three months ended June 30, 2021.

Net CAPEX increased $34.5 million, or 90.1%, to $72.8 million.

These increases were driven by increased refurbishments, and increased new fleet and VAPS purchases.

Total revenue increased $59.4 million, or 51.3%, to $175.2 million for the three months ended June 30, 2022 from $115.8 million for the three months ended June 30, 2021.

Purchases of rental equipment and refurbishments increased $49.3 million, or 155.0%, to $81.1 million for the three months ended September 30, 2022 from $31.8 million for the three months ended September 30, 2021.

Net Fleet CAPEX increased $45.3 million, or 188.8%, to $69.2 million.

These increases were driven by increased refurbishments, and increased new fleet and VAPS purchase volumes, further increased by inflationary pressures.

Total revenue increased $68.7 million, or 51.3%, to $202.6 million for the three months ended September 30, 2022 from $133.9 million for the three months ended September 30, 2021.

Leasing revenues increased $55.4 million in the current quarter compared to the prior-year quarter.

Modular space average units on rent increased 10.6% and average modular space monthly rental rates increased 23.9% year-over-year driven primarily by increased pricing on new deliveries.

Portable storage units on rent increased 42,859, or 38.0%, driven by increased organic economic activity (approximately 12,000 units on rent increase) and acquisitions (approximately 18,700 units on rent increase), and due to the transfer of approximately 12,000 portable storage units on rent from the NA Modular segment, which occurred in the third quarter of 2021.

Combined, average portable storage units on rent for the NA Storage and NA Modular segments increased approximately 30,034 units, or 23.8%.

Average portable storage monthly rental rates increased 23.2% year-over-year also as a result of increased pricing on new deliveries.

Delivery and installation revenues increased $13.7 million year-over-year driven by the increase in overall volumes.

Portable storage units on rent increased 38,823, or 28.3%.

Increases in organic activity drove an increase in average portable storage units on rent of approximately 14.0% or 19,000 units on rent, including an acceleration earlier into the third quarter of our seasonal retail business.

The remaining increase of approximately 20,000 units on rent was driven by units added in recent acquisitions.

Average portable storage monthly rental rates increased 27.1% year-over-year as a result of our price management tools and processes, further supported by high utilization, and by an acceleration earlier into the third quarter of our seasonal retail business.

Delivery and installation revenues increased $14.3 million year-over-year driven by increased demand for new project deliveries, and by increased pricing on new deliveries and returns as compared to 2021.

Sales revenues decreased $1.0 million compared to the prior-year quarter.

Gross Profit:

Gross profit increased by $45.7 million, or 60.4%, to $121.4 million for the three months ended June 30, 2022 compared to $75.7 million for the three months ended June 30, 2021.

Gross profit increased by $48.5 million, or 52.4%, to $141.0 million for the three months ended September 30, 2022 compared to $92.5 million for the three months ended September 30, 2021.

Gross profit percentage increased 50 bps to 69.6%.

Gross profit on leasing activity increased by $40.7 million year-over-year driven both by increased volume and pricing as described above.

Gross profit on leasing activity increased by $43.5 million year-over-year driven by both increased volume and increased pricing as described above.

For delivery and installation, gross profit increased $8.4 million.

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Adjusted EBITDA:

Adjusted EBITDA increased $31.3 million, or 63.2%, to $80.8 million for the three months ended June 30, 2022 from $49.5 million for the three months ended June 30, 2021.

Adjusted EBITDA increased $39.6 million, or 66.9%, to $98.7 million for the three months ended September 30, 2022 from $59.1 million for the three months ended September 30, 2021.

Adjusted EBITDA margin percentage increased 455 bps to 48.7%.

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 $14.8 million in this segment.

The increase was comprised of increased costs for personnel, including commissions and other variable compensation to support increased commercial activity, the return of more normal travel expenses, and increased subscription and professional fees.

Excluding acquisition-related costs and stock-based compensation, SG&A increased $10.5 million in this segment.

The increase was comprised of increased costs for personnel, including commissions and other variable compensation to support increased commercial activity, increased travel expenses, and increased subscription and professional fees.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $25.5 million, or 289.8%, to $34.3 million for the three months ended June 30, 2022 from $8.8 million for the three months ended June 30, 2021.

Net CAPEX decreased $1.8 million, or 6.5%, to $25.7 million.

Purchases of rental equipment and refurbishments increased $29.3 million, or 246.2%, to $41.2 million for the three months ended September 30, 2022 from $11.9 million for the three months ended September 30, 2021.

Net Fleet CAPEX increased $30.7 million, or 347.6%, to $39.5 million.

The increase in purchases of rental equipment and refurbishments was driven primarily by increased purchases of portable storage containers during the period to support organic growth.

Total revenue decreased $1.7 million, or 6.0%, to $26.7 million for the three months ended June 30, 2022 from $28.4 million for the three months ended June 30, 2021.

In local currency total revenues increased 4.4%.

Total revenue decreased $1.9 million, or 6.8%, to $26.2 million for the three months ended September 30, 2022 from $28.1 million for the three months ended September 30, 2021 due to the strengthening of the U.S.

In local currency, total revenues increased £1.8 million to £22.2 million.

Leasing revenues decreased $2.0 million in the current quarter compared to the prior-year quarter.

Modular space average units on

rent decreased 10.3%, while portable storage units on rent increased 7.9%.

Average monthly rental rates for modular space units decreased 6.6% and average monthly rental rates for portable storage units increased 5.7% year-over-year, including the impacts of currency fluctuations.

In local currency, leasing revenues increased £1.0 million to £16.7 million.

Modular space

average units on rent decreased 7.8%, while portable storage units on rent increased 8.4%.

Average monthly rental rates for modular space units decreased 13.9% and average monthly rental rates for portable storage units decreased 2.2% year-over-year, including the impacts of currency fluctuations.

In local currency, average monthly rental rates for modular space units increased 0.3% and average monthly rental rates for portable storage increased 13.6% year-over-year.

Delivery and installation revenues decreased $0.5 million year-over-year.

Delivery and installation revenues increased $0.2 million year-over-year.

In local currency, delivery and installation revenues increased £0.9 million to £5.0 million.

Sales revenues decreased $0.1 million compared to the prior-year quarter.

In local currency, sales revenues decreased £0.1 million to £0.6 million.

Gross Profit:

Gross profit decreased $0.8 million, or 4.5%, for the three months ended June 30, 2022 to $17.1 million from $17.9 million for the three months ended June 30, 2021.

Gross profit decreased $2.5 million, or 13.2%, for the three months ended September 30, 2022 to $16.4 million from $18.9 million for the three months ended September 30, 2021 due to the strengthening of the U.S.

In local currency, gross profit increased £0.3 million, or 2.0%.

Adjusted EBITDA:

Adjusted EBITDA decreased $0.1 million, or 0.8%, to $12.2 million for three months ended June 30, 2022 from $12.3 million for the three months ended June 30, 2021 and the Adjusted EBITDA margin percentage expanded to 45.7% from 41.0%.

The decrease results primarily from the unfavorable gross profit discussed above, partially offset by decreased SG&A of $0.9 million.

Adjusted EBITDA decreased $1.3 million, or 9.8%, to $12.0 million for three months ended September 30, 2022 from $13.3 million for the three months ended September 30, 2021 and the Adjusted EBITDA margin percentage contracted to 45.8% from 47.2%.

The decrease resulted from the unfavorable gross profit discussed above driven by unfavorable currency fluctuations, partially offset by decreased SG&A of $1.1 million.

In local currency, Adjusted EBITDA increased £0.6 million, or 5.7%.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $3.4 million, or 81.0%, to $7.6 million for the three months ended June 30, 2022 from $4.2 million for the three months ended June 30, 2021.

Net CAPEX decreased $1.7 million, or 27.9%, to $4.4 million.

The increase in purchases of rental equipment and refurbishments was driven primarily by increased purchases of portable storage containers during the period to support organic growth.

Total revenue increased $4.6 million, or 16.7%, to $32.1 million for the three months ended June 30, 2022 from $27.5 million for the three months ended June 30, 2021.

This increase was driven by increased average original equipment cost ("OEC") rental fleet utilization, which increased 450 bps to 75.7% for the three months ended June 30, 2022 from 71.2% for the three months ended June 30, 2021.

Gross Profit:

Gross profit increased $3.6 million, or 27.7%, for the three months ended June 30, 2022 to $16.6 million from $13.0 million for the three months ended June 30, 2021.

This increase was driven by increased gross profit for leasing activity, which increased $3.3 million driven by the increased revenue as discussed above.

Adjusted EBITDA:

Adjusted EBITDA increased $2.4 million, or 23.8%, to $12.5 million for the three months ended June 30, 2022 from $10.1 million for the three months ended June 30, 2021 and the Adjusted EBITDA margin percentage expanded to 38.8% from 36.7%.

The increase in Adjusted EBITDA was driven by the increased gross profit discussed above, partially offset by a $0.7 million increase in SG&A driven primarily by increased personnel costs, including commissions and other variable compensation.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $2.9 million, or 100.0%, to $5.8 million for the three months ended June 30, 2022 from $2.9 million for the three months ended June 30, 2021.

Net CAPEX increased $2.6 million, or 86.7%, to $5.6 million.

These increases were driven primarily by increased purchases of rental fleet during the period to support organic growth given high utilization, as well as by reduced proceeds from sales of units from the rental fleet units given high utilization.

Comparison of Six Months Ended June 30, 2022 and 2021

Six Months Ended June 30, 2022

Purchases of rental equipment and refurbishments decreased $7.0 million, or 60.3%, to $4.6 million for the three months ended September 30, 2022 from $11.6 million for the three months ended September 30, 2021.

Net Fleet CAPEX decreased $7.1 million, or 62.7%, to $4.2 million.

The decrease in purchases of rental equipment and refurbishments was driven primarily by decreased purchases of portable storage containers as compared to the prior year.

Comparison of Nine Months Ended September 30, 2022 and 2021

Nine Months Ended September 30, 2022

(in thousands, except for units on rent and rates)

NA Modular NA Storage UK Storage Tank and Pump Total

NA Modular NA Storage UK Storage Total

Revenue $ 1,022,720 $ 529,347 $ 80,272 $ 1,632,339

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Average portable storage monthly rental rate $ 201 $ 184 $ 92 $ 171

Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 75.8 % 75.8 %

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

(in thousands, except for units on rent and rates)

NA Modular NA Storage UK Storage Tank and Pump Total

NA Modular NA Storage UK Storage Total

Revenue $ 854,657 $ 357,439 $ 83,538 $ 1,295,634

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Average portable storage monthly rental rate $ 129 $ 152 $ 86 $ 140

Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 69.3 % 69.3 %

Total revenue increased $91.8 million, or 16.5%, to $647.4 million for the six months ended June 30, 2022 from $555.6 million for the six months ended June 30, 2021.

The increase was primarily the result of a $67.8 million, or 16.3%, increase in leasing revenue, a $25.8 million, or 24.9% increase in delivery and installation revenues, offset by a $0.8 million, or 3.9%, decrease in rental unit sales revenue.

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 six months of 2021.

Average modular space monthly rental rates increased 18.1% for the six months ended June 30, 2022 to $908 driven by the continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio.

In addition to improved pricing, average modular space units on rent increased by 1,046 units, or 1.2%, year over year.

Total revenue increased $168.1 million, or 19.7%, to $1,022.8 million for the nine months ended September 30, 2022 from $854.7 million for the nine months ended September 30, 2021.

The increase was primarily the result of a $119.3 million, or 18.7%, increase in leasing revenue, a $52.2 million, or 32.3%, increase in delivery and installation revenues and a $3.2 million, or 11.3%, increase in rental unit sales revenue.

The increases to leasing revenue and delivery and installation revenues were partially offset by declines in revenues for portable storage units in the first and second quarters of 2022 as a 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.

Approximately 12,000 units were transferred during the third quarter of 2021 to the NA Storage segment, reallocating approximately $10.0 million of revenue from NA Modular segment to the NA Storage segment in the first six months of 2022 relative to the first six months of 2021.

Average modular space monthly rental rates increased 18.5% for the nine months ended September 30, 2022 to $936 driven by the continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio.

In addition to improved pricing, average modular space units on rent increased by 1,721 units, or 2.0%, year over year driven primarily by acquisitions.

Gross Profit:

Gross profit increased $53.6 million, or 23.4%, to $282.7 million for the six months ended June 30, 2022 from $229.1 million for the six months ended June 30, 2021.

Gross profit increased $82.6 million, or 23.1%, to $439.6 million for the nine months ended September 30, 2022 from $357.0 million for the nine months ended September 30, 2021.

The increase in gross profit was driven by higher leasing gross profit, which increased $77.7 million, or 16.7%, driven by improved pricing including VAPS and increased modular unit on rent volumes, partially offset by the transfer of portable storage units to the NA Storage segment discussed above, and a $25.2 million increase in delivery and installation gross profit driven by volumes and improved pricing.

These increases were further complemented by a $0.9 million increase in new sales gross profit.

These increases were partially offset by a $0.3 million decrease in rental unit sales gross profit and an $8.8 million increase in depreciation of rental equipment related to capital investments made in our existing rental equipment.

These increases were further complemented by a $0.5 million increase in new sales gross profit and $1.7 million increase in rental unit sales gross profit.

These increases were partially offset by a $22.5 million increase in depreciation of rental equipment related to capital investments made in our rental equipment and due to fleet acquired as part of acquisitions.

Adjusted EBITDA:

Adjusted EBITDA increased $30.9 million, or 15.4%, to $231.8 million for the six months ended June 30, 2022 from $200.9 million for the six months ended June 30, 2021.

Adjusted EBITDA increased $64.8 million, or 21.0%, to $372.5 million for the nine months ended September 30, 2022 from $307.7 million for the nine months ended September 30, 2021.

The increase was driven by higher leasing gross profit discussed above.

SG&A, excluding discrete items, increased $37.1 million, or 29.5%, for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021 primarily driven by employee and occupancy costs.

SG&A, excluding discrete items, increased $50.0 million, or 26.0%, for the nine months ended September 30, 2022, as compared to the nine months ended September 30, 2021 to support higher staffing levels for both organic and inorganic growth, wage increases, and increased variable compensation as a result of the growth achieved, increased office and occupancy costs, increased travel expenses, and increased subscription, legal and professional fees.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $51.6 million, or 58.3%, to $140.1 million for the six months ended June 30, 2022 from $88.5 million for the six months ended June 30, 2021

Total revenue increased $103.2 million, or 46.2%, to $326.7 million for the six months ended June 30, 2022 from $223.5 million for the six months ended June 30, 2021.

The increase was primarily the result of a $86.6 million, or 52.1%, increase in leasing revenue, a $22.2 million, or 49.4% increase in delivery and installation revenues, and a $3.9 million, or 47.0%, decrease in rental unit sales revenue.

Average portable storage monthly rental rates increased 17.3% for the six months ended June 30, 2022 to $176.

Average portable storage units on rent increased by 44,668 units, or 40.8%, year over year, driven by increased organic economic activity (approximately average 15,600 units on rent increase) and acquisitions (approximately average 17,100 units on rent increase), and due to the transfer of approximately 12,000 portable storage units on rent from the NA Modular segment, which occurred in the third quarter of 2021.

Average modular space monthly rental rates increased 15.2% for the six months ended June 30, 2022 to $638 driven by the continuation of our long-term price

optimization initiative and VAPS penetration opportunities across our portfolio.

Average modular space units on rent increased by 1,909 units, or 11.6%, year over year.

Purchases of rental equipment and refurbishments increased $100.8 million, or 83.8%, to $221.1 million for the nine months ended September 30, 2022 from $120.3 million for the nine months ended September 30, 2021.

These increases were driven by increased refurbishments, and increased new fleet and VAPS purchase volumes, further increased by inflationary pressures.

Total revenue increased $171.9 million, or 48.1%, to $529.4 million for the nine months ended September 30, 2022 from $357.5 million for the nine months ended September 30, 2021.

The increase was primarily the result of a $142.0 million, or 53.1%, increase in leasing revenue, and a $36.5 million, or 49.9%, increase in delivery and installation revenues.

These increases were partially offset by a decrease in rental unit sales revenue of $5.3 million, or 46.5%.

Average portable storage monthly rental rates increased 21.1% for the nine months ended September 30, 2022 to $184 as a result of our price management tools and processes, further supported by high utilization, and by an acceleration earlier into the third quarter of our seasonal retail business.

Average portable storage units on rent increased by 42,733 units, or 36.0%, year over year, driven by increased organic economic activity of approximately 17,500 average units on rent, approximately 17,000 average units on rent acquired from acquisitions, and due to the transfer of approximately 12,000 portable storage units on rent from the NA Modular segment, which occurred in the third quarter of 2021 (8,000 average units on rent impact).

Average modular space monthly rental rates increased 18.1% for the nine months ended September 30, 2022 to $673 driven by the continuation of our long-term price optimization initiative and VAPS penetration opportunities across our portfolio.

Average modular space units on rent increased by 1,852 units, or 11.3%, year over year, of which approximately 30% was acquisition driven.

Gross Profit:

Gross profit increased $78.2 million, or 52.7%, to $226.5 million for the six months ended June 30, 2022 from $148.3 million for the six months ended June 30, 2021.

Gross profit on leasing activity increased by $73.4 million year-over-year driven both by increased volume and pricing as described above.

Gross profit increased $126.8 million, or 52.7%, to $367.6 million for the nine months ended September 30, 2022 from $240.8 million for the nine months ended September 30, 2021.

Gross profit on leasing activity increased by $116.8 million year-over-year driven by both increased volume and increased pricing as described above.

For delivery and installation, gross profit increased $17.9 million.

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Adjusted EBITDA:

Adjusted EBITDA increased $48.8 million, or 50.9%, to $144.6 million for the six months ended June 30, 2022 from $95.8 million for the six months ended June 30, 2021.

Adjusted EBITDA increased $88.3 million, or 57.0%, to $243.3 million for the nine months ended September 30, 2022 from $155.0 million for the nine months ended September 30, 2021.

The increase was driven by higher leasing gross profit discussed above.

SG&A, excluding discrete items, increased $31.6 million, or 48.8%, for the six months ended June 30, 2022, as compared to the June 30, 2021 primarily driven by employee and occupancy costs.

SG&A, excluding discrete items, increased $40.6 million, or 38.4%, for the nine months ended September 30, 2022, as compared to the nine months ended September 30, 2021 to support higher staffing levels for both organic and inorganic growth, wage increases, and increased variable compensation as a result of the growth achieved, increased office and occupancy costs, increased travel expenses, and increased subscription, legal and professional fees.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $42.3 million, or 346.7%, to $54.5 million for the six months ended June 30, 2022 from $12.2 million for the six months ended June 30, 2021.

Purchases of rental equipment and refurbishments increased $71.5 million, or 295.5%, to $95.7 million for the nine months ended September 30, 2022 from $24.2 million for the nine months

ended September 30, 2021.

The increase in purchases of rental equipment and refurbishments was driven primarily by increased purchases of portable storage containers during the period to support organic growth.

Total revenue decreased $1.3 million, or 2.3%, to $54.1 million for the six months ended June 30, 2022 from $55.4 million for the six months ended June 30, 2021.

The decrease was primarily the result of a $0.8 million, or 6.3%, decrease in delivery and installation revenues and a $1.6 million, or 72.7%, decrease in new unit sales revenue, partially offset by a $1.0 million, or 2.5%, increase in leasing revenue.

Average portable storage monthly rental rates increased 9.4% for the six months ended June 30, 2022 to $93.

Total revenue decreased $3.2 million, or 3.9%, to $80.3 million for the nine months ended September 30, 2022 from $83.5 million for the nine months ended September 30, 2021 due to the strengthening of the U.S.

The decrease was primarily the result of a $1.8 million, or 66.7%, decrease in new unit sales revenue and a $0.6 million, or 3.3%, decrease in delivery and installation revenues.

In local currency, total revenue increased £3.6 million, driven by a £3.8 million increase in leasing revenue, and a £0.9 million increase in delivery and installation revenue, partially offset by a £1.1 million decrease in sales revenue.

Average portable storage monthly rental rates increased 7.0% for the nine months ended September 30, 2022 to $92.

Average portable storage units on rent increased by 2,328 units, or 9.2%, year over year.

Average modular space monthly rental rates decreased 0.5% for the six months ended June 30, 2022 to $418.

Average modular space monthly rental rates decreased 4.4% for the nine months ended September 30, 2022 to $409.

Average modular space units on rent decreased by 786 units, or 8.5%, year over year.

In local currency, average portable storage monthly rental rates increased 17.5% for the six months ended June 30, 2022 to £74, and average modular space monthly rental rates increased 3.8% for the six months ended June 30, 2022 to £325.

In local currency, average portable storage monthly rental rates decreased 5.2% for the nine months ended September 30, 2022 to £73, and average modular space monthly rental rates decreased 13.3% for the nine months ended September 30, 2022 to £325.

Gross Profit:

Gross profit increased $0.6 million, or 1.7%, to $35.0 million for the six months ended June 30, 2022 from $34.4 million for the six months ended June 30, 2021.

Gross profit on leasing activity increased by $1.6 million year-over-year driven both by increased volume and pricing as described above.

Gross profit decreased $1.8 million, or 3.4%, to $51.5 million for the nine months ended September 30, 2022 from $53.3 million for the nine months ended September 30, 2021 due to the strengthening of the U.S.

Gross profit on leasing activity decreased by $0.3 million year-over-year.

For delivery and installation, gross profit decreased $1.2 million.

Sales gross profit decreased by $0.2 million to $0.7 million.

Adjusted EBITDA:

Adjusted EBITDA increased $1.4 million, or 6.0%, to $24.8 million for the six months ended June 30, 2022 from $23.4 million for the six months ended June 30, 2021.

The increase was driven by higher leasing gross profit discussed above.

SG&A, excluding discrete items, decreased $0.8 million, or 6.0%, for the six months ended June 30, 2022, as compared to the June 30, 2021 primarily driven by employee and occupancy costs.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $6.2 million, or 56.4%, to $17.2 million for the six months ended June 30, 2022 from $11.0 million for the six months ended June 30, 2021.

Total revenue increased $10.6 million, or 20.5%, to $62.4 million for the six months ended June 30, 2022 from $51.8 million for the six months ended June 30, 2021.

This increase was driven by increased average original equipment cost ("OEC") rental fleet utilization, which increased 650 bps to 75.8% for the six months ended June 30, 2022 from 69.3% for the six months ended June 30, 2021.

Gross Profit:

Gross profit increased $7.1 million, or 29.2%, to $31.4 million for the six months ended June 30, 2022 from $24.3 million for the six months ended June 30, 2021.

Gross profit on leasing activity increased by $6.8 million year-over-year driven by both increased volume and pricing.

For delivery and installation, gross profit increased $0.3 million.

In local currency, gross profit increased £2.4 million, or 6.4% for the nine months ended September 30, 2022 from £38.5 million.

Gross profit on leasing activity increased by £3.3 million.

For delivery and installation, gross profit decreased £0.4 million.

Sales gross profit decreased by £0.1 million to £0.6 million.

Adjusted EBITDA:

Adjusted EBITDA increased $5.0 million, or 26.2%, to $24.0 million for the six months ended June 30, 2022 from $19.0 million for the six months ended June 30, 2021.

The increase in Adjusted EBITDA was driven by the increased gross profit discussed above, partially offset by a $1.9 million increase in SG&A expense driven primarily by increased personnel costs, including commissions and other variable compensation.

Adjusted EBITDA increased $0.1 million, or 0.3%, to $36.7 million for the nine months ended September 30, 2022 from $36.6 million for the nine months ended September 30, 2021.

The increase was driven by higher leasing gross profit discussed above.

SG&A, excluding discrete items, decreased $1.8 million, or 9.0%, for the nine months ended September 30, 2022, as compared to the nine months ended September 30, 2021.

In local currency, Adjusted EBITDA increased £2.8 million, or 10.6%.

Capital Expenditures for Rental Equipment:

Purchases of rental equipment and refurbishments increased $7.6 million, or 124.6%, to $13.7 million for the six months ended June 30, 2022 from $6.1 million for the six months ended June 30, 2021.

Purchases of rental equipment and refurbishments decreased $0.8 million, or 3.5%, to $21.8 million for the nine months ended September 30, 2022 from $22.6 million for the nine months ended September 30, 2021.

Reconciliation of Non-GAAP Financial Measures

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Adjusted EBITDA

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

We define EBITDA as net income (loss) plus net 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:

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• Other expense, including 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.

Our Chief Operating Decision Maker ("CODM") evaluates business segment performance utilizing Adjusted EBITDA as shown in the reconciliation of the Company’s consolidated net income to Adjusted EBITDA below.

Our Chief Operating Decision Maker ("CODM") evaluates business segment performance utilizing Adjusted EBITDA as shown in the reconciliation of the Company’s consolidated income from continuing operations to Adjusted EBITDA below.

Management believes that evaluating segment performance excluding such items is meaningful because it provides insight with respect to the intrinsic and ongoing operating results of the Company and captures the business performance of the segments, inclusive of indirect costs.

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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 table provides unaudited reconciliations of Net income to Adjusted EBITDA:

Three Months Ended Six Months Ended

June 30, June 30,

The following table provides unaudited reconciliations of Income from continuing operations to Adjusted EBITDA:

Three Months Ended Nine Months Ended

September 30, September 30,

(in thousands) 2022 2021 2022 2021

Net income $ 73,376 $ 20,371 $ 124,547 $ 24,818

Income tax expense 24,711 18,828 40,459 29,309

Income from continuing operations $ 85,728 $ 57,113 $ 200,099 $ 75,278

Income tax expense from continuing operations 30,219 5,243 67,167 32,341

Loss on extinguishment of debt — — — 5,999

Fair value (gain) loss on common stock warrant liabilities — (610) — 26,597

Fair value loss on common stock warrant liabilities — — — 26,597

Interest expense 38,165 29,006 102,362 87,793

Depreciation and amortization 86,225 69,449 243,123 216,820

Currency (gains) losses, net (127) 33 11 69

Currency losses, net 236 127 247 196

Restructuring costs, lease impairment expense and other related charges — 2,457 168 14,284

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Adjusted EBITDA $ 251,339 $ 179,203 $ 652,529 $ 499,359

Net Income Excluding Gain/Loss from Warrants

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.

Income From Continuing Operations Excluding Gain/Loss from Warrants

We define Income from Continuing Operations Excluding Gain/Loss from Warrants as income from continuing operations plus or minus the impact of the change in the fair value of the common stock warrant liability.

Management believes that the presentation of our financial statements excluding the impact of the mark-to-market adjustment provides useful information regarding our results of operations and assists in the review of our actual operating performance.

The following table provides unaudited reconciliations of Net income to Net Income Excluding Gain/Loss from Warrants:

Three Months Ended June 30, Six Months Ended June 30,

The following table provides unaudited reconciliations of Income from Continuing Operations to Income from Continuing Operations Excluding Gain/Loss from Warrants:

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2022 2021 2022 2021

Net income $ 73,376 $ 20,371 $ 124,547 $ 24,818

Fair value (gain) loss on common stock warrant liabilities — (610) — 26,597

Net Income Excluding Gain/Loss from Warrants $ 73,376 $ 19,761 $ 124,547 $ 51,415

Income from Continuing Operations $ 85,728 $ 57,113 $ 200,099 $ 75,278

Fair value loss on common stock warrant liabilities — — — 26,597

Income from Continuing Operations Excluding Gain/Loss from Warrants $ 85,728 $ 57,113 $ 200,099 $ 101,875

Adjusted EBITDA Margin

We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue.

Management believes that the presentation of Adjusted EBITDA Margin provides useful information to investors regarding the performance of our business.

The following table provides an unaudited reconciliation of Adjusted EBITDA Margin:

Three Months Ended June 30, Six Months Ended June 30,

Income from Continuing Operations Margin is defined as Income from continuing operations divided by revenue.

Management believes that the presentation of Adjusted EBITDA Margin and Income from Continuing Operations Margin provides useful information to investors regarding the performance of our business.

The following table provides unaudited reconciliations of Adjusted EBITDA Margin and Income from Continuing Operations Margin:

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2022 2021 2022 2021

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Adjusted EBITDA Margin (A/B) 41.6 % 38.9 % 40.0 % 38.5 %

Net Income (C) $ 73,376 $ 20,371 $ 124,547 $ 24,818

Net Income Margin % (C/B) 12.6 % 4.4 % 11.4 % 2.8 %

Income from continuing operations (C) $ 85,728 $ 57,113 $ 200,099 $ 75,278

Income from Continuing Operations Margin (C/B) 14.2 % 12.4 % 12.3 % 5.8 %

Adjusted Gross Profit and Adjusted Gross Profit Percentage

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The following table provides unaudited reconciliations of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(in thousands) 2022 2021 2022 2021

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The following table provides unaudited reconciliations of Net CAPEX:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(in thousands) 2022 2021 2022 2021

2 unchanged sentences

Net CAPEX for Rental Equipment (117,893) (48,777) (308,202) (136,157)

Purchase of property, plant and equipment (9,772) (10,143) (20,253) (17,450)

Purchases of property, plant and equipment (10,000) (3,386) (30,253) (20,836)

Proceeds from sale of property, plant and equipment 894 209 1,645 16,647

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We have consistently accessed 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.

We believe we have ample

liquidity in the ABL Facility and are generating substantial free cash flow, which together support both organic operations and other capital allocation priorities as they arise.

We believe we have ample liquidity in the 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.

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Availability of financing and the associated terms are inherently dependent on the debt and equity capital markets and subject to change.

From time to time, we may also seek to streamline our capital structure and improve our financial position through refinancing or restructuring our existing debt or retiring certain of our securities for cash or other consideration.

From time to time, we may also seek to streamline our capital structure and improve our financial

position through refinancing or restructuring our existing debt or retiring certain of our securities for cash or other consideration.

Our revolving credit facility provides an aggregate principal amount of up to $3.7 billion, consisting of:

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The borrowing bases are a function of, among other things, the value of the assets in the relevant collateral pool.

At June 30, 2022, we had $2.0 billion outstanding principal and $1.0 billion of available borrowing capacity under the ABL Facility.

Cash Flow Comparison for the Six Months Ended June 30, 2022 and 2021

At September 30, 2022, we had $1.9 billion outstanding principal and $1.1 billion of available borrowing capacity under the ABL Facility.

Cash Flow Comparison for the Nine Months Ended September 30, 2022 and 2021

Significant factors driving our liquidity include cash flows generated from operating activities and capital expenditures.

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The following summarizes our change in cash and cash equivalents for the periods presented:

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

6 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents

(1,842) (150)

Net change in cash and cash equivalents

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Cash Flows from Operating Activities

Cash provided by operating activities for the six months ended June 30, 2022 was $333.9 million as compared to $261.6 million for the six months ended June 30, 2021, an increase of $72.3 million, or 27.6%.

The increase was due to an increase of $87.6 million of net income, adjusted for non-cash items, partially offset by a decrease of $15.3 million in the net changes in operating assets and liabilities.

Cash provided by operating activities for the nine months ended September 30, 2022 was $544.2 million as compared to $392.1 million for the nine months ended September 30, 2021, an increase of $152.2 million, or 38.8%.

The increase was due to an increase of $157.5 million of net income, adjusted for non-cash items, partially offset by a decrease of $5.2 million in net changes in operating assets and liabilities.

Cash Flows from Investing Activities

Cash used in investing activities for the six months ended June 30, 2022 was $313.7 million as compared to $88.4 million for the six months ended June 30, 2021, an increase of $225.3 million.

The increase in cash used in investing activities was driven by a $107.6 million increase in cash used for the purchase of rental equipment and refurbishments, a $103.9 million increase in cash used in acquisitions, net of cash acquired, a $15.7 million decrease in proceeds from sale of property, plant and equipment, and a $2.8 million increase in cash used for the purchase of property, plant and equipment, partially offset by a $4.7 million increase in proceeds from the sale of rental equipment.

Cash used in investing activities for the nine months ended September 30, 2022 was $225.9 million as compared to $196.6 million for the nine months ended September 30, 2021, an increase of $29.3 million.

The increase in cash used in investing activities was driven by a $182.3 million increase in cash used for the purchase of rental equipment and refurbishments, a $152.4 million increase in cash used in acquisitions, net of cash acquired, a $15.0 million decrease in proceeds from sale of property, plant and equipment, and a $9.5 million increase in cash used for the purchase of property, plant and equipment, partially offset by a $319.5 million increase in proceeds from sale of Tank and Pump business and a $10.3 million increase in proceeds from the sale of rental equipment.

Cash Flows from Financing Activities

Cash used in financing activities for the six months ended June 30, 2022 was $20.8 million as compared to $182.9 million for the six months ended June 30, 2021, a decrease of $162.1 million.

The decrease was primarily due to a $219.6 million decrease in repayment of borrowings and a $66.7 million increase in receipts from borrowings, partially offset by a $104.9 million increase in the repurchase and cancellation of common stock and warrants.

Cash used in financing activities for the nine months ended September 30, 2022 was $313.7 million as compared to $208.9 million for the nine months ended September 30, 2021, an increase of $104.8 million.

The increase was primarily due to a $195.1 million increase in the repurchase and cancellation of common stock and warrants, an $87.1 million increase in repayment of borrowings, and a $27.0 million increase in principal payments on finance lease obligations, partially offset by a $212.1 million increase in receipts from borrowings.

Free Cash Flow

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Management believes that the presentation of Free Cash Flow provides useful additional information concerning cash flow available to fund our capital allocation alternatives.

The following table provides a reconciliation of net cash provided by operating activities to Free Cash Flow.

Three Months Ended

June 30, Six Months Ended

The following table provides reconciliations of net cash provided by operating activities to Free Cash Flow.

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2022 2021 2022 2021

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Proceeds from sale of rental equipment 17,183 11,597 52,263 42,034

Purchase of property, plant and equipment (9,772) (10,143) (20,253) (17,450)

Purchases of property, plant and equipment (10,000) (3,386) (30,253) (20,836)

Proceeds from the sale of property, plant and equipment 894 209 1,645 16,647

Free Cash Flow $ 83,386 $ 78,493 $ 207,428 $ 251,709

Cash flow from operations increased by $72.3 million or 27.6% for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

Cash used in investing activities excluding acquisitions increased by $121.4 million to support unit on rent and VAPS growth with leasing revenues up 24.7% year-over-year.

Free cash flow of $124.0 million for the six months ended June 30, 2022 was down $49.2 million as compared to the six months ended June 30, 2021 which is consistent with the countercyclicality of free cash flow in our business.

Cash flow from operations increased by $152.2 million or 38.8% for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021.

Cash used in investing activities excluding acquisitions and sale of discontinued operations increased by $196.4 million to support unit on rent and VAPS growth with leasing revenues up 27.0% year-over-year.

Cash flow from operations increased by $79.8 million, or 61.1% for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.

This increase was supported by the 30.6% increase in leasing revenue year-over-year.

Free cash flow of $207.4 million for the nine months ended September 30, 2022 was down $44.3 million as compared to the nine months ended September 30, 2021 which is consistent with the counter cyclicality of free cash flow in our business.

Material cash requirements

The Company’s material cash requirements include the following contractual and other obligations:

The Company has outstanding debt related to its ABL Facility, 2025 Secured Notes, 2028 Secured Notes, and finance leases, totaling $3.1 billion as of June 30, 2022, $20.7 million of which is obligated to be repaid within the next twelve months.

The Company has outstanding debt related to its ABL Facility, 2025 Secured Notes, 2028 Secured Notes, and finance leases, totaling $3.0 billion as of September 30, 2022, $13.5 million of which is obligated to be repaid within the next twelve months.

Refer to Note 10 for further information regarding outstanding debt.

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The Company has commitments for future minimum rental payments relating to operating leases, which are primarily for equipment and office space.

As of June 30, 2022, the Company had lease obligations of $275.9 million, with $60.4 million payable within the next twelve months.

As of September 30, 2022, the Company had lease obligations of $264.7 million, with $60.0 million payable within the next twelve months.

In addition to the aforementioned cash requirements, the Company has a Share Repurchase Program authorized by the Board of Directors which allows the Company to repurchase up to $1.0 billion of outstanding shares of Common Stock and equivalents.

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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 for the year ended December 31, 2021 (the "2021 Annual Report on Form 10-K").

There were no significant changes to our critical accounting policies during the six months ended June 30, 2022.

There were no significant changes to our critical accounting policies during the nine months ended September 30, 2022.

Recently Issued Accounting Standards

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• 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 compete in the modular space and portable storage industries;

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis