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Item 2. Management’s Discussion and Analysis

2024-08-01 compared with 2024-05-02 · 270 added, 128 removed, 264 unchanged (60% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand WillScot Mobile Mini Holdings Corp.

("WillScot Mobile Mini") operations and our present business environment.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand WillScot Holdings Corporation ("WillScot") operations and our present business environment.

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 months ended March 31, 2024 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 six months ended June 30, 2024 or prior periods.

On January 31, 2023, the Company completed the sale of its former United Kingdom ("UK") Storage Solutions segment.

This MD&A presents the historical financial results of the former UK Storage Solutions segment as discontinued operations for all periods presented.

On July 29, 2024, the Company amended and restated its certificate of incorporation to effect a change of the Company’s name from “WillScot Mobile Mini Holdings Corp.” to “WillScot Holdings Corporation."

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

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

As of March 31, 2024, our branch network included approximately 260 branch locations and additional drop lots to service our over 85,000 customers.

As of June 30, 2024, our branch network included approximately 260 branch locations and additional drop lots to service our over 85,000 customers.

We offer our customers an extensive selection of “Ready to Work” temporary space solutions with over 152,000 modular space units and over 206,000 portable storage units in our fleet.

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Core to our operating model is the ability to redeploy standardized assets across end markets.

We track several market leading indicators to predict demand, including those related to our two largest end markets, the commercial and industrial sector and the construction sector, which collectively accounted for approximately 86% of our revenues for the three months ended March 31, 2024.

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

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

Significant Developments

Entry into an Agreement to Acquire McGrath RentCorp

On January 28, 2024, the Company entered into an agreement and plan of merger (the “Merger Agreement”) with McGrath RentCorp ("McGrath").

On January 28, 2024, we entered into an agreement and plan of merger (the “Merger Agreement”) with McGrath RentCorp ("McGrath").

Upon consummation of the merger, each outstanding share of McGrath common stock shall be converted into the right to receive either (i) $123.00 in cash or (ii) 2.8211 shares of the Company’s common stock.

Under the terms of the Merger Agreement, we expect McGrath’s shareholders will own approximately 12.6% of the Company following the McGrath acquisition.

The McGrath acquisition has been approved by the Company's and McGrath’s respective boards of directors.

The McGrath acquisition is subject to the satisfaction or waiver of certain customary closing conditions, including receipt of regulatory approval and approval by McGrath’s shareholders, and is expected to close in 2024.

In connection with the Merger Agreement, the Company entered into a commitment letter dated January 28, 2024, which was amended and restated on February 12, 2024 and modified by a Notice of Reduction of Bridge Commitments on February 27, 2024 (the "Commitment Letter"), pursuant to which certain financial institutions have committed to make available, in accordance with the terms of the Commitment Letter, (i) a $500 million eight-year senior secured bridge credit facility, (ii) a $500 million five-year senior secured bridge credit facility and (iii) an upsize to William Scotsman, Inc.'s existing $3.7 billion ABL Facility (as defined below) by $750 million to $4.5 billion to repay McGrath's existing unsecured revolving lines of credit and notes, fund the cash portion of the consideration, and pay the fees, costs and expenses incurred in connection with the McGrath acquisition and the related transactions.

Reportable Segments

In January 2024, we completed the unification of our go-to market structure by integrating our modular and storage divisions under a single leadership team organized by geography, achieving local product unification within each metropolitan statistical area and the ability to consistently deliver our portfolio of solutions to our entire customer base.

In connection with this change in operating model, the Company realigned the composition of our operating and reportable segments.

As a result, the Company concluded that its two operating segments (US and Other North America) are aggregated into one reportable segment as the operating segments have similar economic and qualitative characteristics.

The McGrath acquisition has been approved by the Company's and McGrath’s respective boards of directors and McGrath's shareholders.

The McGrath acquisition is subject to the satisfaction or waiver of certain customary closing conditions, including receipt of regulatory approval, and is expected to close in 2024.

In connection with the Merger Agreement, we entered into a commitment letter dated January 28, 2024, which was amended and restated on June 13, 2024 and modified by a Notice of Reduction of Bridge Commitments on June 28, 2024 (the "Commitment Letter"), pursuant to which certain financial institutions have committed to make available, in accordance with the terms of the Commitment Letter, (i) a $500 million eight-year senior secured bridge credit facility and (ii) an upsize to the existing $3.7 billion ABL Facility (as defined below) of Williams Scotsman, Inc., a subsidiary of the Company ("WSI"), by $750 million to $4.5 billion to repay McGrath's existing unsecured revolving lines of credit and notes, fund the cash portion of the consideration, and pay the fees, costs and expenses incurred in connection with the McGrath acquisition and the related transactions.

We recorded $22.9 million and $35.2 million in legal and professional fees primarily related to the acquisition of McGrath within selling, general and administrative expense ("SG&A") during the three and six months ended June 30, 2024, respectively.

Financing Activities

On June 28, 2024, WSI completed a private offering of $500.0 million in aggregate principal amount of 6.625% senior secured notes due 2029 (the "2029 Secur ed Notes") to qualified institutional buyers pursuant to Rule 144A .

P roceeds were used to repay approximately $495.0 million of outstanding indebtedness under the ABL Facility and certain fees and expenses.

Mobile Mini Trade Name Impairment

In the second quarter of 2024, we determined that a review of the carrying value of the Mobile Mini trade name was necessary based on the Company's plan to rebrand under a single WillScot brand name and discontinue the use of the Mobile Mini trade name.

As of June 30, 2024, the Mobile Mini trade name was tested for impairment using the relief from royalty valuation method.

After determining the estimated fair value, we recorded an impairment charge of $132.5 million during the three months ended June 30, 2024.

This non-cash charge was recorded to impairment loss on intangible asset on the consolidated statement of operations.

As of June 30, 2024, t he remaining net book value of the Mobile Mini trade name was $31.5 million, which will be amortized over a remaining useful life of approximately 3.1 years.

Asset Acquisitions

During the three months ended March 31, 2024, we acquired certain assets and liabilities of one local storage and modular company, which consisted primarily of approximately 60 storage units and 800 modular units, for $43.4 million.

As of the acquisition date, the fair value of rental equipment acquired was $39.7 million.

During the six months ended June 30, 2024, we acquired certain assets and assumed certain liabilities of three local storage and modular companies, which consisted primarily of approximately 600 storage units and 800 modular units, for $70.6 million.

As of the acquisition dates, the fair value of rental equipment acquired was $67.7 million.

Share Repurchases

During the six months ended June 30, 2024, we repurchased 2,035,513 shares of Common Stock for $78.7 million, excluding excise tax.

As of June 30, 2024, $419.5 million of the authorization for future repurchases of the Common Stock remained available.

Given that we believe our free cash flow is predictable, we believe that repurchases will be a recurring capital allocation priority.

Interest Rate Swap Agreements

In January 2024, the Company entered into two interest rate swap agreements with financial counterparties relating to $500.0 million in aggregate notional amount of variable-rate debt under the ABL Facility.

Under the terms of the agreements, the Company receives a floating rate equal to one-month term SOFR and makes payments based on a weighted average fixed interest rate of 3.70% on the notional amount.

The swap agreements were designated and qualified as hedges of the Company's exposure to changes in interest payment cash flows created by fluctuations in variable interest rates on the ABL Facility.

In January 2024, we entered into two interest rate swap agreements with financial counterparties relating to $500.0 million in aggregate notional amount of variable-rate debt under the ABL Facility.

Under the terms of the agreements, we receive a floating rate equal to one-month term SOFR and make payments based on a weighted average fixed interest rate of 3.70% on the notional amount.

The swap agreements were designated and qualified as hedges of our exposure to changes in interest payment cash flows created by fluctuations in variable interest rates on the ABL Facility.

The swap agreements terminate on June 30, 2027.

First Quarter Highlights

Three Months Ended March 31, 2024 vs.

Segment Reporting

In January 2024, we completed the unification of our go-to market structure by integrating our modular and storage divisions under a single leadership team organized by metropolitan statistical area (MSA), which enables us to consistently deliver our portfolio of solutions to our entire customer base.

In connection with this change in operating model, we realigned the composition of our operating and reportable segments.

As a result, we concluded that our two operating segments (US and Other North America) are aggregated into one reportable segment.

Second Quarter Highlights

Three Months Ended June 30, 2024 vs.

(in thousands, except for units on rent and monthly rental rate) 1

Revenue $ 604,590 $ 582,089 $ 22,501

Income from continuing operations $ 56,240 $ 76,271 $ (20,031)

(Loss) income from continuing operations $ (46,851) $ 87,729 $ (134,580)

Adjusted EBITDA from continuing operations $ 263,576 $ 261,341 $ 2,235

Capital expenditures for rental equipment $ 65,174 $ 55,581 $ 9,593

Net CAPEX $ 54,733 $ 42,554 $ 12,179

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Average portable storage monthly rental rate $ 263 $ 223 $ 40

1 Effective for the three months ended March 31, 2024, we reclassified approximately 2,000 units that were previously reported as modular space units on rent to portable storage units on rent as these units are generally used in a dry storage application.

1 Effective for the three months ended June 30, 2024, we reclassified approximately 2,000 units that were previously reported as modular space units on rent to portable storage units on rent as these units are generally used in a dry storage application.

Additionally, based on our segment realignment, we have conformed our VAPS presentation to include all VAPS not specific to portable storage orders as modular space VAPS and recalculated average monthly rental rates.

This treatment is consistent with prior treatment in our previous Modular Segment.

All historical product operating KPIs have been recast to be presented on a comparable basis for all periods.

For the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, unless otherwise noted, results and key drivers of our financial performance included:

All historical product operating key performance indicators have been recast to be presented on a comparable basis for all periods.

For the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, results and key drivers of our financial performance included:

• Total revenues increased $22.5 million, or 3.9%.

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These increases were partially offset by a decrease in delivery and installation revenue of $4.6 million, or 4.1%.

• Modular product revenue, which represented 75.8% of consolidated revenue for the three months ended March 31, 2024, increased $33.8 million, or 8.2%, to $445.1 million.

• Modular product revenue, which represented 77.8% of consolidated revenue for the three months ended June 30, 2024, increased $32.6 million, or 7.5%, to $470.4 million.

The increase was driven by our core leasing revenue, which increased $12.3 million, or 3.6%, due to continued growth of pricing and VAPS, as well as increased delivery and installation revenue, which increased $2.0 million, or 2.4%.

Rental unit sales increased $5.4 million, or 64.8%, and new unit sales increased $12.9 million, or 170.2%.

Modular revenue drivers for the three months ended March 31, 2024 included:

Modular revenue drivers for the three months ended June 30, 2024 included:

• Modular space average monthly rental rate increased $85, or 7.8%, year over year to $1,176 representing a continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.

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• Average modular space monthly utilization decreased 230 basis points ("bps") to 62.5%.

• Storage product revenue, which represented 24.2% of consolidated revenue for the three months ended March 31, 2024, decreased $12.1 million, or 7.8%, to $142.1 million.

The decrease was driven by delivery and installation revenue, which decreased $9.6 million, or 27.2%, due to decreased activity, as well as a decrease in core leasing revenue of $3.4 million, or 3.0%, driven by reduced portable storage container volumes, partially offset by increased rates on portable storage containers and increased revenue from acquired climate-controlled containers and refrigerated storage units.

Rental unit sales increased $1.5 million, or 112.0%, and new unit sales decreased $0.5 million, or 30.7%.

Storage revenue drivers for the three months ended March 31, 2024 included:

• Portable storage average monthly rental rate increased $48, or 22.4% year over year to $262 as a result of our price management tools, processes and benefits from increased VAPS penetration opportunities, as well as higher rates on the climate-controlled containers and refrigerated storage units acquired in 2023.

• Average portable storage units on rent decreased 36,389, or 21.7%, year over year driven by lower demand for the three months ended March 31, 2024.

• Average portable storage monthly utilization decreased 16.6% to 62.1% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

• Income from continuing operations of $56.2 million for the three months ended March 31, 2024 and gross profit margin of 54.0%.

Discrete costs in the period totaled $16.0 million, and included $12.4 million of legal and professional fees primarily related to the acquisition of McGrath, $2.9 million of integration costs, and $0.7 million of lease impairment expense and other related charges.

• Adjusted EBITDA from continuing operations of $248.0 million for the three months ended March 31, 2024, representing an increase of $1.2 million, or 0.5%, as compared to the same period in 2023.

• Adjusted EBITDA margin from continuing operations was 42.2% for the three months ended March 31, 2024 and decreased 150 bps versus prior year.

Leasing margins decreased 170 bps versus prior year and delivery and installation margins decreased 60 bps versus prior year.

• Net cash provided by operating activities increased $59.9 million to $208.7 million for the three months ended March 31, 2024.

Net cash used in investing activities, excluding cash used for acquisitions, proceeds from the sale of discontinued operations of the former UK Storage Solutions segment and the related payment for the settlement of the contingent foreign currency forward contract, increased by $21.7 million.

Capital expenditures for rental equipment increased $25.3 million for the three months ended March 31, 2024 as a result of increased refurbishment spending and increased new fleet purchases, including additional investment in climate-controlled containers and refrigerated storage units.

This increase in cash used in investing activities was partially offset by a $6.4 million increase in proceeds from the sale of rental equipment for the three months ended March 31, 2024.

Net CAPEX increased $19.0 million for the three months ended March 31, 2024.

• Free Cash Flow of $143.9 million for the three months ended March 31, 2024, representing an increase of $41.0 million as compared to the same period in 2023.

We deployed this Free Cash Flow to acquire a local provider of storage and modular space solutions with a portfolio of approximately 60 storage containers and 800 modular leasing units for $43.4 million.

We paused share repurchases in the fourth quarter of 2023 as acquisition discussions advanced with McGrath RentCorp and did not repurchase any shares of our Common Stock during the first quarter of 2024.

We began repurchasing shares of our Common Stock again during the second quarter of 2024.

• Storage product revenue, which represented 22.2% of consolidated revenue for the three months ended June 30, 2024, decreased $10.1 million, or 7.0%, to $134.1 million.

The decrease was driven by delivery and installation revenue, which decreased $6.6 million, or 22.1%, driven reduced delivery volumes, as well as a decrease in core leasing revenue of $3.0 million, or 2.8%, driven by reduced portable storage container volumes, partially offset by increased rates on portable storage containers and increased revenue from acquired climate-controlled containers and refrigerated storage units.

Rental unit sales remained flat at $2.7 million, and new unit sales decreased $0.5 million, or 37.8%.

Storage revenue drivers for the three months ended June 30, 2024 included:

• Portable storage average monthly rental rate increased $40, or 17.9%, year over year to $263 as a result of our price management tools, processes and benefits from increased VAPS penetration opportunities, as well as higher rates on the climate-controlled containers and refrigerated storage units acquired in 2023 and 2024.

• Average portable storage units on rent decreased 30,872, or 19.8%, year over year driven by lower demand for the three months ended June 30, 2024.

The lower demand was driven largely by decreased new construction project starts over the past year as compared to higher activity levels experienced during 2021 and 2022 and less demand in the retail and wholesale trade customer segment.

• Average portable storage monthly utilization decreased 14.1% to 59.2% for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.

• Generated a loss from continuing operations of $46.9 million for the three months ended June 30, 2024, which included discrete costs in the period of $165.5 million, including a $132.5 million impairment loss on intangible asset, $22.9 million of legal and professional fees primarily related to the acquisition of McGrath, $3.1 million of integration costs, and $6.2 million of lease impairment expense, restructuring, and other related charges primarily related to employee termination costs as a result of a cost-reduction plan implemented in June 2024.

Gross profit margin for the three months ended June 30, 2024 was 54.1%.

• Generated Adjusted EBITDA from continuing operations of $263.6 million for the three months ended June 30, 2024, representing an increase of $2.2 million, or 1%, as compared to the same period in 2023.

• Adjusted EBITDA margin from continuing operations was 43.6% for the three months ended June 30, 2024 and decreased 130 bps versus prior year.

Leasing margins increased 51 bps versus prior year and delivery and installation margins decreased 291 bps versus prior year.

• Net cash provided by operating activities decreased $26.5 million to $175.6 million for the three months ended June 30, 2024.

Net cash used in investing activities, excluding cash used for acquisitions, increased by $12.6 million.

Capital expenditures for rental equipment increased $9.6 million for the three months ended June 30, 2024 as a result of increased new fleet purchases, including additional investment in climate-controlled containers and refrigerated storage units.

Purchases of property, plant, and equipment increased $1.8 million for the three months ended June 30, 2024.

Proceeds from the sale of rental equipment decreased $1.0 million.

Net CAPEX increased $12.1 million for the three months ended June 30, 2024.

• Generated Free Cash Flow of $120.9 million for the three months ended June 30, 2024, representing a decrease of $38.7 million as compared to the same period in 2023.

We deployed this Free Cash Flow to acquire two local providers of storage and modular space solutions with portfolios of approximately 500 storage units and 30 modular units for $29.6 million.

We returned $78.7 million to shareholders through stock repurchases, reducing outstanding Common Stock by 2,035,513 shares.

• 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, maintaining leverage in our stated range, opportunistically executing accretive acquisitions, and returning capital to shareholders.

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Consolidated Results of Operations

Three Months Ended March 31, 2024 Compared to the Three Months Ended March 31, 2023

Our condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023 are presented below.

Three Months Ended March 31, 2024 vs.

Three Months Ended June 30, 2024 Compared to the Three Months Ended June 30, 2023

Our condensed consolidated statements of operations for the three months ended June 30, 2024 and 2023 are presented below.

Three Months Ended June 30, 2024 vs.

(in thousands)

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Other depreciation and amortization 18,135 17,346 789

Lease impairment expense and other related charges 746 22 724

Impairment loss on intangible asset 132,540 — 132,540

Lease impairment expense and other related charges, net (23) — (23)

Restructuring costs 6,206 — 6,206

Currency (gains) losses, net (42) 14 (56)

Other expense (income), net 924 (2,838) 3,762

Operating (loss) income (5,232) 166,540 (171,772)

Interest expense, net 55,548 47,246 8,302

(Loss) income from continuing operations before income tax (60,780) 119,294 (180,074)

Income tax (benefit) expense from continuing operations (13,929) 31,565 (45,494)

(Loss) income from continuing operations $ (46,851) $ 87,729 $ (134,580)

Comparison of Three Months Ended June 30, 2024 and 2023

Total revenue increased $22.5 million, or 3.9%, to $604.6 million for the three months ended June 30, 2024 from $582.1 million for the three months ended June 30, 2023.

Leasing revenue increased $9.3 million, or 2.1%, as compared to the same period in 2023, driven by improved pricing and value added products penetration, partially offset by a decrease of 34,140 average total units on rent, which was primarily driven by a decrease in portable storage containers on rent.

Delivery and installation revenues decreased $4.6 million, or 4.1%, due to decreased deliveries and returns.

Rental unit sales increased $5.5 million, or 49.6%, primarily driven by a single large project in the quarter, and new unit sales increased $12.4 million, or 137.4%, primarily related to sales activity from a company we acquired in the third quarter of 2023.

Total average units on rent for the three months ended June 30, 2024 and 2023 were 220,414 and 254,554, respectively, representing a decrease of 34,140 units, or 13.4%.

Portable storage average units on rent decreased by 30,872 units, or 19.8%, for the three months ended June 30, 2024 driven by lower demand in 2024.

The average portable storage

unit utilization rate during the three months ended June 30, 2024 was 59.2% as compared to 73.3% during the same period in 2023.

Modular space average units on rent decreased 3,268 units, or 3.3%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, which was also driven largely by decreased new construction project starts over the past year as compared to higher activity levels experienced during 2021 and 2022.

The average modular space unit utilization rate during the three months ended June 30, 2024 was 62.5% as compared to 64.8% during the same period in 2023.

Modular space average monthly rental rates increased 7.8% year over year to $1,176 for the three months ended June 30, 2024.

Increases were driven by a continuation of the long-term price optimization and VAPS penetration opportunities.

Average portable storage monthly rental rates increased 17.9% year over year to $263 for the three months ended June 30, 2024 as a result of our price management tools, processes and benefits from increased VAPS penetration opportunities, as well as higher rates on the climate-controlled containers and refrigerated storage units acquired in 2023 and 2024.

Gross profit:

Gross profit decreased $0.8 million, or 0.2%, to $327.1 million for the three months ended June 30, 2024 from $327.9 million for the three months ended June 30, 2023.

The decrease in gross profit was a result of decreased delivery and installation gross profit of $4.4 million and increased depreciation expense of $11.2 million, and was partially offset by a $9.6 million increase in leasing gross profit and a $5.3 million increase in new and rental unit sales gross profit.

The increase in leasing gross profit was primarily a result of increased revenues due to favorable average monthly rental rates including VAPS across both portable storage and modular space units, which offset lower unit on rent volumes.

Cost of leasing and services decreased by $0.5 million, or 0.3%, for the three months ended June 30, 2024 versus the three months ended June 30, 2023, driven by a decrease in subcontractors costs of $4.8 million, or 7.5%, and a decrease in materials costs of $2.6 million, or 9.8%.

These decreased costs were partially offset by an increase in labor costs of $5.8 million, or 9.0%.

Cost of sales increased by $12.6 million, or 127.6%, which is directionally in line with increased sales revenues of 89.1% for the three months ended June 30, 2024.

Our resulting gross profit percentage was 54.1% and 56.3% for the three months ended June 30, 2024 and 2023, respectively.

Our adjusted gross profit percentage, excluding the effects of depreciation, was 66.6% and 67.4% for the three months ended June 30, 2024 and 2023, respectively.

The decreases, as referenced above, were mainly driven by lower utilization rates, specifically on portable storage products.

Selling, general and administrative expense ("SG&A") increased $27.8 million, or 18.9%, to $174.6 million for the three months ended June 30, 2024, compared to $146.8 million for the three months ended June 30, 2023.

Discrete expenses for certain one-time projects, primarily legal and professional fees related to the acquisition of McGrath, increased $21.8 million.

Real estate and occupancy costs increased $4.7 million, or 22.8%.

Employee SG&A excluding stock compensation increased $4.9 million, or 7.8%, primarily as a result of increased salaries and wages.

Stock based compensation increased $0.3 million, or 2.8%.

These increased costs were partially offset by a $2.1 million decrease in service agreements and professional fees.

Adjusted EBITDA:

Adjusted EBITDA increased $2.2 million, or 1%, to $263.6 million for the three months ended June 30, 2024 from $261.3 million for the three months ended June 30, 2023.

The increase was driven by a $9.6 million increase in leasing gross profit and a $5.3 million increase in new and used sales gross profit as discussed above, partially offset by decreased delivery and installation gross profit of $4.4 million and increased SG&A, excluding discrete costs, of $4.9 million, or 3.6%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Other depreciation and amortization:

Other depreciation and amortization increased $0.8 million to $18.1 million for the three months ended June 30, 2024 compared to $17.3 million for the three months ended June 30, 2023.

Impairment loss on intangible asset:

Impairment loss on intangible asset was $132.5 million for the three months ended June 30, 2024 related to the impairment of the Mobile Mini trade name due to our plan to rebrand under a single WillScot brand name and discontinue the use of the Mobile Mini trade name.

Restructuring costs:

Restructuring costs of $6.2 million for the three months ended June 30, 2024 were primarily due to employee termination costs as a result of a cost-reduction plan implemented in June 2024.

Currency (gains) losses, net:

Currency (gains) losses, net decreased by $0.1 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

Other expense (income), net:

Other expense, net was $0.9 million for the three months ended June 30, 2024 compared to other income, net of $2.8 million for the three months ended June 30, 2023.

This change was primarily attributable to insurance recoveries received in 2023 related to Hurricane Ian in the Gulf Coast area of the United States in 2022.

Interest expense, net:

Interest expense increased $8.3 million, or 17.6%, to $55.5 million for the three months ended June 30, 2024 from $47.2 million for the three months ended June 30, 2023.

The increase in interest expense was a result of higher overall weighted average interest rates as a result of increased benchmark rates and higher outstanding debt balances.

See Note 9 to the condensed consolidated financial statements for further discussion of our debt.

Income tax (benefit) expense:

Income tax benefit was $13.9 million for the three months ended June 30, 2024 compared to income tax expense of $31.6 million for the three months ended June 30, 2023, a change of $45.5 million.

The change was primarily driven by a decrease in income from continuing operations before income tax for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

Capital Expenditures for Rental Equipment:

Capital expenditures for rental equipment increased $9.6 million, or 17.3%, to $65.2 million for the three months ended June 30, 2024 from $55.6 million for the three months ended June 30, 2023 as a result of increased refurbishment spending and new fleet purchases, including additional investment in climate-controlled containers and refrigerated storage units.

Net CAPEX increased $12.1 million, or 28.4%, to $54.7 million for the three months ended June 30, 2024 from $42.6 million for the three months ended June 30, 2023 driven by the increase in capital expenditures for rental equipment as described above, as well as by a $1.8 million increase in purchases of property, plant and equipment, and a $1.0 million decrease in proceeds from the sale of rental equipment for the three months ended June 30, 2024.

Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023

Our condensed consolidated statements of operations for the six months ended June 30, 2024 and 2023 are presented below.

Six Months Ended June 30, 2024 vs.

2023 $ Change

(in thousands)

Leasing and services revenue:

Leasing $ 919,193 $ 889,271 $ 29,922

Delivery and installation 208,509 219,384 (10,875)

Sales revenue:

New units 34,877 19,661 15,216

Rental units 29,192 19,241 9,951

Total revenues 1,191,771 1,147,557 44,214

Costs of leasing and services:

Leasing 200,642 196,071 4,571

Delivery and installation 159,012 156,356 2,656

Costs of sales:

New units 21,631 11,003 10,628

Rental units 15,961 9,521 6,440

Depreciation of rental equipment 150,519 123,606 26,913

Gross profit 644,006 651,000 (6,994)

Other operating expenses:

Selling, general and administrative 342,178 297,680 44,498

Other depreciation and amortization 36,055 34,519 1,536

Impairment loss on intangible asset 132,540 — 132,540

Lease impairment expense and other related charges, net 723 22 701

Restructuring costs 6,206 — 6,206

Currency losses, net 35 6,789 (6,754)

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Net income $ 9,389 $ 298,613 $ (289,224)

Comparison of Three Months Ended March 31, 2024 and 2023

Total revenue increased $21.7 million, or 3.8%, to $587.2 million for the three months ended March 31, 2024 from $565.5 million for the three months ended March 31, 2023.

Leasing revenue increased $20.7 million, or 4.7%, as compared to the same period in 2023, driven by improved pricing and value added products penetration, partially offset by a decrease of 40,398 average total units on rent, which was primarily driven by portable storage containers.

The following table and discussion summarizes our financial performance for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.

Six Months Ended June 30, 2024 vs.

(in thousands, except for units on rent and monthly rental rate) 1

Revenue $ 1,191,771 $ 1,147,557 $ 44,214

Income from continuing operations $ 9,389 $ 164,000 $ (154,611)

Adjusted EBITDA from continuing operations $ 511,585 $ 508,183 $ 3,402

Capital expenditures for rental equipment $ 137,591 $ 102,709 $ 34,882

Net CAPEX $ 119,509 $ 88,379 $ 31,130

Average modular space units on rent 95,721 99,271 (3,550)

Average modular space utilization rate 62.5 % 65.3 % (280) bps

Average modular space monthly rental rate $ 1,163 $ 1,062 $ 101

Average portable storage units on rent 128,045 161,548 (33,503)

Average portable storage utilization rate 60.7 % 77.1 % (1,640) bps

Average portable storage monthly rental rate $ 262 $ 218 $ 44

1 Effective for the six months ended June 30, 2024, we reclassified approximately 2,000 units that were previously reported as modular space units on rent to portable storage units on rent as these units are generally used in a dry storage application.

This treatment is consistent with prior treatment in our previous Modular Segment.

All historical product operating key performance indicators have been recast to be presented on a comparable basis for all periods.

Comparison of Six Months Ended June 30, 2024 and 2023

Total revenue increased $44.2 million, or 3.9%, to $1,191.8 million for the six months ended June 30, 2024 from $1,147.6 million for the six months ended June 30, 2023.

Leasing revenue increased $29.9 million, or 3.4%, as compared to the same period in 2023 driven by improved pricing and value added products penetration, partially offset by a decrease of 37,053 average total units on rent.

Delivery and installation revenues decreased $10.9 million, or 5.0%, due to decreased deliveries and returns.

Rental unit sales increased $4.5 million, or 54.5%, and new unit sales increased $2.8 million, or 26.7%.

Total average units on rent for the three months ended March 31, 2024 and 2023 were 226,831 and 267,229, respectively, representing a decrease of 40,398 units, or 15.1%.

Portable storage average units on rent decreased by 36,389 units, or 21.7%, for the three months ended March 31, 2024 driven by lower demand in 2024.

The average portable storage unit utilization rate during the three months ended March 31, 2024 was 62.1% as compared to 78.7% during the same period in 2023.

Modular space average units on rent decreased 4,009 units, or 4.0%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

The average modular space unit utilization rate during the three months ended March 31, 2024 was 62.5% as compared to 65.7% during the same period in 2023.

Modular space average monthly rental rates increased 11.4% year over year to $1,149 for the three months ended March 31, 2024.

Rental unit sales increased $10.0 million, or 51.7%, primarily driven by a single large project in the second quarter and increased overall rental unit sales activity, and new unit sales increased $15.2 million, or 77.4%, primarily related to sales activity from a company we acquired in the third quarter of 2023.

Total average units on rent for the six months ended June 30, 2024 and 2023 were 223,766 and 260,819, respectively.

Modular space average units on rent decreased 3,550 units, or 3.6%, and portable storage average units on rent decreased by 33,503 units, or 20.7%, for the six months ended June 30, 2024.

The average modular space unit utilization rate during the six months ended June 30, 2024 was 62.5% as compared to 65.3% during the same period in 2023.

The average portable storage unit utilization rate during the six months ended June 30, 2024 was 60.7%, as compared to 77.1% during the same period in 2023.

Modular space average monthly rental rates increased 9.5% to $1,163 for the six months ended June 30, 2024.

Increases were driven by a continuation of the long-term price optimization and VAPS penetration opportunities.

Average portable storage monthly rental rates increased 22.4% year over year to $262 for the three months ended March 31, 2024 as a result of our price management tools, processes and benefits from increased VAPS penetration opportunities, as well as higher rates on the climate-controlled containers and refrigerated storage units acquired in 2023.

Average portable storage monthly rental rates increased 20.2% to $262 for the six months ended June 30, 2024 as a result of our price management tools, processes and benefits from increased VAPS penetration opportunities, as well as higher rates on the climate-controlled containers and refrigerated storage units acquired in 2023 and 2024.

Gross profit:

Gross profit decreased $6.2 million, or 1.9%, to $316.9 million for the three months ended March 31, 2024 from $323.1 million for the three months ended March 31, 2023.

The decrease in gross profit was a result of decreased delivery and installation gross profit of $9.1 million and increased depreciation expense of $15.8 million, and was partially offset by a $15.8 million increase in leasing gross profit.

The increase in leasing gross profits was primarily a result of increased revenues due to favorable average monthly rental rates including VAPS across both portable storage and modular space units, which offset lower unit on rent volumes.

Cost of leasing and services increased by $7.7 million, or 4.5%, for the three months ended March 31, 2024 versus the three months ended March 31, 2023, driven by a $12.6 million, or 20.9%, increase in labor costs.

These increased costs were partially offset by a decrease in subcontractors costs of $6.2 million, or 10.0%, and a decrease in materials costs of $2.0 million, or 7.5%.

Cost of sales increased by $4.5 million, or 42.1%, which is directionally in line with increased sales revenues of 38.8% for the three months ended March 31, 2024.

Our resulting gross profit percentage was 54.0% and 57.1% for the three months ended March 31, 2024 and 2023, respectively.

Our adjusted gross profit percentage, excluding the effects of depreciation, was 66.7% and 67.6% for the three months ended March 31, 2024 and 2023, respectively.

The decreases, as referenced above, were mainly driven by lower utilization rates, specifically on portable storage products, and higher labor costs.

Selling, general and administrative expense ("SG&A") increased $16.7 million, or 11.1%, to $167.6 million for the three months ended March 31, 2024, compared to $150.9 million for the three months ended March 31, 2023.

Other discrete expense for certain one-time projects, primarily legal and professional fees related to the acquisition of McGrath, increased $12.4 million.

Real estate and occupancy costs increased $3.8 million, or 18.4%.

Employee SG&A excluding stock compensation increased $1.9 million, or 2.8%, primarily as a result of increased salaries and wages.

Stock based compensation increased $0.9 million, or 11.7%.

Service agreements and professional fees increased $2.0 million, or 12.1%, driven by increased professional fees and licensing subscription costs.

These increased costs were partially offset by a $3.7 million decrease in travel and entertainment expenses.

Gross profit decreased $7.0 million, or 1.1%, to $644.0 million for the six months ended June 30, 2024 from $651.0 million for the six months ended June 30, 2023.

The decrease in gross profit was a result of a $26.9 million increase in depreciation of rental equipment and decreased delivery and installation gross profit of $13.5 million.

These decreases in gross profit were partially offset by a $25.4 million increase in leasing gross profit and increased new and rental unit sale gross profits of $8.1 million.

Cost of leasing and services increased by $7.2 million, or 2.0%, for the six months ended June 30, 2024 versus the six months ended June 30, 2023, driven by a $18.4 million, or 14.7%, increase in labor cost and a $4.4 million, or 9.1%, increase in vehicle, equipment and other costs partially offset by a $11.0 million, or 8.7%, decrease in subcontractor costs and a $4.6 million, or 8.7%, decrease in material costs.

Cost of sales increased by $17.1 million, or 83.2%, which is directionally in line with increased sales revenues of 64.7% for the six months ended June 30, 2024.

Our gross profit percentage was 54.0% and 56.7% for the six months ended June 30, 2024 and 2023, respectively.

Our gross profit percentage, excluding the effects of depreciation, was 66.7% and 67.5% for the six months ended June 30,

2024 and 2023, respectively.

The decreases, as referenced above, were mainly driven by lower utilization rates, specifically on portable storage products.

SG&A increased $44.5 million, or 14.9%, to $342.2 million for the six months ended June 30, 2024, compared to $297.7 million for the six months ended June 30, 2023.

Discrete expenses for certain one-time projects, primarily legal and professional fees related to the acquisition of McGrath, increased $34.7 million.

Real estate and occupancy costs increased $8.5 million, or 20.6%, and employee SG&A excluding stock compensation increased $6.7 million, or 5.1%, primarily as a result of increased salaries and wages.

Stock compensation expense increased $1.2 million to $18.7 million for the six months ended June 30, 2024, compared to $17.5 million for the six months ended June 30, 2023.

These increases were partially offset by a $3.3 million, or 23.3%, decrease in travel costs and a $2.7 million, or 28.1%, decrease in our provision for credit losses.

Adjusted EBITDA:

Adjusted EBITDA increased $1.2 million, or 0.5%, to $248.0 million for the three months ended March 31, 2024 from $246.8 million for the three months ended March 31, 2023.

The increase was driven by a $15.8 million increase in leasing gross profit as discussed above, partially offset by decreased delivery and installation gross profit of $9.1 million and increased SG&A, excluding discrete costs, of $4.0 million, or 2.9%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Adjusted EBITDA increased $3.4 million, or 1%, to $511.6 million for the six months ended June 30, 2024 from $508.2 million for the six months ended June 30, 2023.

The increase was driven by a $25.4 million increase in leasing gross profit as discussed above, partially offset by decreased delivery and installation gross profit of $13.5 million and increased SG&A, excluding discrete costs, of $8.8 million, or 3.2%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Other depreciation and amortization:

Other depreciation and amortization increased $0.7 million to $17.9 million for the three months ended March 31, 2024 compared to $17.2 million for the three months ended March 31, 2023.

Other depreciation and amortization increased $1.5 million to $36.1 million for the six months ended June 30, 2024 compared to $34.5 million for the six months ended June 30, 2023.

Impairment loss on intangible asset:

Impairment loss on intangible asset was $132.5 million for the six months ended June 30, 2024 related to the impairment of the Mobile Mini trade name based on the Company's plan to rebrand under a single WillScot brand name and discontinue the use of the Mobile Mini trade name.

Lease impairment expense and other related charges:

Lease impairment expense and other related charges increased by $0.7 million to $0.7 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

Lease impairment expense and other related charges increased to $0.7 million for the six months ended June 30, 2024.

These charges were related to the exit of an office property.

Restructuring costs:

Restructuring costs of $6.2 million for the six months ended June 30, 2024 were primarily due to employee termination costs as a result of a cost-reduction plan implemented in June 2024.

Currency losses, net:

Currency losses, net decreased by $6.7 million to $0.1 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

This change was primarily attributable to a $7.7 million loss in the 2023 period on the settlement of the contingent foreign currency forward contract relating to the sale of the former UK Storage Solutions segment in January 2023.

Currency losses, net decreased by $6.8 million for the six months ended June 30, 2024.

This change was primarily attributable to a $7.7 million loss in 2023 on the settlement of the contingent foreign currency forward contract relating to the sale of the former UK Storage Solutions segment in January 2023.

Other expense (income), net:

Other expense, net was $0.6 million for the three months ended March 31, 2024 compared to other income, net of $3.4 million for the three months ended March 31, 2023.

Other expense, net was $1.6 million for the six months ended June 30, 2024 compared to other income, net of $6.2 million for the six months ended June 30, 2023.

This change was primarily attributable to insurance recoveries received in 2023 related to Hurricane Ian in the Gulf Coast area of the United States in 2022.

Interest expense, net:

Interest expense increased $11.7 million, or 26.1%, to $56.6 million for the three months ended March 31, 2024 from $44.9 million for the three months ended March 31, 2023.

Interest expense increased $20.0 million to $112.1 million for the six months ended June 30, 2024 from $92.1 million for the six months ended June 30, 2023.

The increase in interest expense was a result of higher overall weighted average interest rates as a result of increased benchmark rates and higher outstanding debt balances.

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Income tax expense:

Income tax expense decreased $13.4 million to $17.1 million for the three months ended March 31, 2024 compared to $30.5 million for the three months ended March 31, 2023.

The decrease in expense was primarily driven by a decrease in income from continuing operations before income tax for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

Income tax expense decreased $58.9 million to $3.2 million for the six months ended June 30, 2024 compared to $62.1 million for the six months ended June 30, 2023.

The decrease in expense was driven by a decrease in income from continuing operations before income tax for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Income from discontinued operations:

Income from discontinued operations for the three months ended March 31, 2023 was related to the former UK Storage Solutions segment, which was sold January 2023.

Net CAPEX increased $19.0 million, or 41.4%, to $64.8 million for the three months ended March 31, 2024 from $45.8 million for the three months ended March 31, 2023 driven by a $25.3 million, or 53.7%, increase in refurbishment spending and new fleet purchases, including additional investment in climate-controlled containers and refrigerated storage units.

This increase was partially offset by a $6.4 million increase in proceeds from the sale of rental equipment for the three months ended March 31, 2024.

Income from discontinued operations for the six months ended June 30, 2023 was related to the former UK Storage Solutions segment, which was sold January 2023.

Capital Expenditures for Rental Equipment:

Capital expenditures for rental equipment increased $34.9 million, or 34.0%, to $137.6 million for the six months ended June 30, 2024 from $102.7 million for the six months ended June 30, 2023 as a result of increased refurbishment spending and new fleet purchases, including additional investment in climate-controlled containers and refrigerated storage units.

Net CAPEX increased $31.1 million, or 35.2%, to $119.5 million for the six months ended June 30, 2024 from $88.4 million for the six months ended June 30, 2023 driven by the increase in capital expenditures for rental equipment as described above.

This increase was partially offset by a $5.4 million increase in proceeds from the sale of rental equipment for the six months ended June 30, 2024.

Reconciliation of Non-GAAP Financial Measures

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Management believes that evaluating 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 inclusive of indirect costs.

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

Some of these limitations are:

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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 a measure of cash that will be available to meet our obligations.

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

The following table provides unaudited reconciliations of (Loss) income from continuing operations to Adjusted EBITDA from continuing operations:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

Income from continuing operations $ 56,240 $ 76,271

Income tax expense from continuing operations 17,118 30,510

(Loss) income from continuing operations $ (46,851) $ 87,729 $ 9,389 $ 164,000

Income tax (benefit) expense from continuing operations (13,929) 31,565 3,189 62,075

Interest expense 55,548 47,246 112,136 92,112

Depreciation and amortization 93,746 81,796 186,574 158,125

Currency losses, net 77 6,775

Restructuring costs, lease impairment expense and other related charges 746 22

Currency (gains) losses, net (42) 14 35 6,789

Restructuring costs, lease impairment expense and other related charges, net 6,183 — 6,929 22

Impairment loss on intangible asset 132,540 — 132,540 —

Transaction costs 40 — 40 —

Integration costs 3,066 2,247 5,943 6,120

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Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

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Management believes that the presentation of Adjusted Gross Profit and Adjusted Gross Profit Percentage provides useful information to investors regarding our results of operations and assists in analyzing the performance of our business.

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

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

Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

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Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

Total purchases of rental equipment and refurbishments $ (72,417) $ (47,128)

Total proceeds from sale of rental equipment 14,195 7,781

Purchase of rental equipment and refurbishments $ (65,174) $ (55,581) $ (137,591) $ (102,709)

Proceeds from sale of rental equipment 16,473 17,473 30,668 25,254

Net CAPEX for Rental Equipment (48,701) (38,108) (106,923) (77,455)

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Liquidity and Capital Resources

WillScot Mobile Mini is a holding company that derives its operating cash flow from its operating subsidiaries.

Our principal sources of liquidity include cash flows generated from operating activities of our subsidiaries, borrowings under our ABL Facility, and sales of debt and equity securities.

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.

WillScot is a holding company that derives its operating cash flow from its operating subsidiaries.

Our principal sources of liquidity include cash flows generated from operating activities of our subsidiaries, borrowings under our ABL Facility, and sales of debt securities.

We have consistently accessed the debt 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.

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The borrowing bases are a function of, among other things, the value of the assets in the relevant collateral pool, of which our rental equipment represents the largest component.

At March 31, 2024, we had $1.3 billion of available borrowing capacity under the ABL Facility.

Cash Flow Comparison of the Three Months Ended March 31, 2024 and 2023

At June 30, 2024, we had $1.8 billion of available borrowing capacity under the ABL Facility.

Cash Flow Comparison of the Six Months Ended June 30, 2024 and 2023

The consolidated statements of cash flows include amounts for the former UK Storage Solutions segment through January 31, 2023.

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

Three Months Ended

Six Months Ended

(in thousands)

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Cash Flows from Operating Activities

Net cash provided by operating activities for the three months ended March 31, 2024 was $208.7 million as compared to $148.8 million for the three months ended March 31, 2023, an increase of $59.9 million.

Net cash provided by operating activities for the six months ended June 30, 2024 was $384.3 million as compared to $350.9 million for the six months ended June 30, 2023, an increase of $33.4 million.

The increase was due to a change of $104.2 million in the net movements of the operating assets and liabilities, partially offset by a decrease of $70.8 million of net income, adjusted for non-cash items.

Cash Flows from Investing Activities

Net cash used in investing activities for the three months ended March 31, 2024 was $111.0 million as compared to $271.9 million of net cash provided by investing activities for the three months ended March 31, 2023, a $382.9 million increase in net cash used in investing activities.

The increase in net cash used in investing activities resulted from $404.0 million in proceeds from the sale of the former UK Storage Solutions in the three months ended March 31, 2023 and a $25.3 million increase in refurbishment spending and new fleet purchases, including additional investment in climate-controlled containers and refrigerated storage units, during the three months ended March 31, 2024.

The increase was partially offset by a $35.1 million decrease in cash used in acquisitions, net of cash acquired, a $6.4 million increase in proceeds from the sale of rental equipment and a $7.7 million decrease in cash used for the settlement of a contingent foreign currency forward contract upon the closing of the sale of the former UK Storage Solutions segment in January 2023.

Net cash used in investing activities for the six months ended June 30, 2024 was $193.3 million as compared to $158.5 million of net cash provided by investing activities for the six months ended June 30, 2023, a $351.8 million increase in net cash used in investing activities.

The increase in net cash used in investing activities resulted from $404.0 million in proceeds from the sale of the former UK Storage Solutions in the six months ended June 30, 2023 and a $34.9 million increase in refurbishment spending and new fleet purchases, including additional investment in climate-controlled containers and refrigerated storage units, during the six months ended June 30, 2024.

The increase in net cash used in investing activities was partially offset by a $78.8 million decrease in cash used in acquisitions, net of cash acquired, a $5.4 million increase in proceeds from the sale of rental equipment and a $7.7 million decrease in cash used for the settlement of a contingent foreign currency forward contract upon the closing of the sale of the former UK Storage Solutions segment in January 2023.

Cash Flows from Financing Activities

Net cash used in financing activities for the three months ended March 31, 2024 was $95.6 million as compared to $423.1 million for the three months ended March 31, 2023, a decrease of $327.5 million.

The decrease was primarily due to a $215.1 million decrease in cash used for the repurchase of common stock in the three months ended March 31, 2024 and a $118.1 million decrease in repayments of borrowings, net of receipts from borrowings.

We paused share repurchases in 2023 as acquisition discussions advanced with McGrath RentCorp and did not repurchase shares of our Common Stock during the three months ended March 31, 2024.

We resumed repurchasing shares of our Common Stock in April 2024.

The decrease was partially offset by a $4.5 million increase in cash used for taxes paid on employee stock awards and a $1.3 million increase in cash used for principal payments on finance lease obligations.

Net cash used in financing activities for the six months ended June 30, 2024 was $195.7 million as compared to $520.3 million for the six months ended June 30, 2023, a decrease of $324.6 million.

The decrease was primarily due to a $377.6 million decrease in cash used for the repurchase of common stock in the six months ended June 30, 2024.

We paused share repurchases in the fourth quarter of 2023 as acquisition discussions advanced with McGrath and resumed repurchasing shares of our Common Stock in April 2024.

The decrease was partially offset by a $41.6 million increase in repayments of borrowings, net of receipts from borrowings, a $4.5 million increase in cash used for taxes paid on employee stock awards, a $5.2 million increase in cash used for payments for financing costs, and a $1.4 million increase in cash used for payments on finance lease obligations.

Free Cash Flow

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Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

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Purchase of property, plant and equipment (6,247) (4,453) (12,801) (11,189)

Proceeds from the sale of property, plant and equipment — 258

Proceeds from sale of property, plant and equipment 215 7 215 265

Free Cash Flow $ 120,878 $ 159,601 $ 264,778 $ 262,541

Free Cash Flow for the three months ended March 31, 2024 was $143.9 million as compared to $102.9 million for the three months ended March 31, 2023, an increase of $41.0 million.

Free Cash Flow for the six months ended June 30, 2024 was $264.8 million as compared to $262.5 million for the six months ended June 30, 2023, an increase of $2.2 million.

Free Cash Flow increased principally as a result of the $33.4 million increase in cash provided by operating activities and the $5.4 million increase in proceeds from the sale of rental equipment.

The increase was partially offset by the $34.9 million increase in cash used in the purchase of rental equipment and refurbishments.

The $208.7 million in cash provided by operating activities for the three months ended March 31, 2024 was reinvested into the business to support the purchase of rental equipment, including VAPS, and refurbishments, acquire a local provider of storage and modular space solutions for $43.4 million, and to fund repayment of borrowings under our ABL Facility.

The $384.3 million in cash provided by operating activities for the six months ended June 30, 2024 was returned to shareholders through repurchases and cancellations of common stock of $78.7 million and reinvested into the business to support the purchase of rental equipment, including VAPS, and refurbishments, acquire three local storage and modular companies for $70.6 million, and fund repayment of borrowings under our ABL Facility.

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, 2031 Secured Notes and finance leases totaling $3.5 billion as of March 31, 2024, $19.2 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, 2029 Secured Notes, 2031 Secured Notes, and finance leases totaling $3.5 billion as of June 30, 2024, $545.1 million of which is obligated to be repaid within the next twelve months.

We have the intent and believe was have the ability to refinance the $526.5 million carrying value of the 2025 Secured Notes on a long-term basis as demonstrated by the forecasted available capacity under the ABL Facility if other refinancing efforts are unsuccessful or uneconomical.

Refer to Note 9 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 real estate.

As of March 31, 2024, the Company had lease obligations of $305.0 million, with $68.3 million payable within the next twelve months.

As of June 30, 2024, the Company had lease obligations of $297.4 million, with $69.5 million payable within the next twelve months.

Entry into an Agreement to Acquire McGrath RentCorp

On January 28, 2024, the Company entered into an agreement and plan of merger (the “Merger Agreement”) with McGrath RentCorp ("McGrath").

Under the terms of the Merger Agreement, the Company expects McGrath’s shareholders will own approximately 12.6% of the Company following the McGrath acquisition.

The McGrath acquisition has been approved by the Company's and McGrath’s respective boards of directors and McGrath's shareholders.

The McGrath acquisition is subject to the satisfaction or waiver of certain customary closing conditions, including receipt of regulatory approval, and is expected to close in 2024.

In connection with the Merger Agreement, the Company entered into a commitment letter dated January 28, 2024, which was amended and restated on June 13, 2024 and modified by a Notice of Reduction of Bridge Commitments on June 28, 2024 (the "Commitment Letter"), pursuant to which certain financial institutions have committed to make available, in accordance with the terms of the Commitment Letter, (i) a $500 million eight-year senior secured bridge credit facility and (ii) an upsize to the existing $3.7 billion ABL Facility (as defined below) of Williams Scotsman, Inc., a subsidiary of the Company ("WSI"), by $750 million to $4.5 billion to repay McGrath's existing unsecured revolving lines of credit and notes, fund the cash portion of the consideration, and pay the fees, costs and expenses incurred in connection with the McGrath acquisition and the related transactions.

In addition to the cash requirements described above, 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.

This program does not obligate the Company to repurchase any specific amount of shares.

As of March 31, 2024, $498.2 million of the approved share repurchase amount remained available.

As of June 30, 2024, $419.5 million of the approved share repurchase amount remained available.

Critical Accounting Estimates

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For a complete discussion of our significant critical accounting estimates, see the “Critical Accounting Estimates” section in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Annual Report on Form 10-K").

There were no significant changes to our critical accounting estimates during the three months ended March 31, 2024.

There were no significant changes to our critical accounting estimates during the six months ended June 30, 2024.

Recently Issued Accounting Standards

Refer to Part I, Item 1, Note 1 of the notes to our financial statements included in this Quarterly Report on Form 10-Q for our assessment of recently issued and adopted accounting standards.

Refer to Part I, Item 1, Note 1 of the notes to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for our assessment of recently issued and adopted accounting standards.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Act of 1934, as amended.

The words “estimates,” “expects,” “anticipates,” “believes,” “forecasts,” “plans,” “intends,” “may,” “will,” “should,” “shall,” “outlook,” “guidance” and

variations of these words and similar expressions identify forward-looking statements, which are generally not historical in nature and relate to expectations for future financial performance or business strategies or objectives.

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

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

Although WillScot Mobile Mini believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance that any such forward-looking statement will materialize.

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

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

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• such other risks and uncertainties described in the periodic reports we file with the SEC from time to time (including our 2023 Annual Report on Form 10-K), which are available through the SEC’s EDGAR system at www.sec.gov and on our website.

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

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis