Livermore, Calif.-based McGrath RentCorp., a diversified business to business rental company that rents and sells modular buildings, electronic test equipment, and general purpose and communications test equipment, last week announced revenues for the quarter ended Dec. 31, of $78.5 million, an increase of 10 percent, compared to $71.5 million in the fourth quarter 2007. The company reported net income of $9.3 million, or $0.39 per diluted share for the fourth quarter 2008, compared to net income of $12.1 million, or $0.48 per diluted share, in the fourth quarter 2007.
Total revenues for the year ended Dec. 31, were $304.2 million, compared to $280.4 million in 2007. Rental revenues increased 6 percent to $197.2 million in 2008 compared to $185.3 million in 2007. Net income for the year ended Dec. 31, decreased 3 percent to $41.2 million, compared to net income of $42.4 million in the prior year. EPS increased 3 percent to $1.72 in 2008 from $1.67 in 2007.
The company completed the purchase of the assets of privately held Adler Tank Rentals on Dec.11. Adler Tanks is a Newark, N.J.-based rental provider of liquid and solid containment solutions for storage of hazardous and non-hazardous liquids and solids. The company’s consolidated statement of income includes Adler Tanks’ results of operations since Dec. 12, with total revenues of $1.8 million and pre-tax income of $0.5 million.
The company also announced that the board of directors declared a quarterly cash dividend of $0.22 per share for the quarter ending March 31, an increase of 10 percent over last year’s same period. The cash dividend will be payable on April 30, to all shareholders of record on April 16.
“Despite a quarter-over-quarter increase in both rental revenues and total revenues of approximately 2 percent and 10 percent respectively, net income decreased by 23 percent and EPS by 19 percent,” said McGrath RentCorp president and CEO Dennis Kakures.
These results were driven by a combination of adverse macro economic conditions, increased competitive pressures, the unsettled fiscal landscape in California, and the company’s investment in key longer term growth initiatives, IT systems and facility infrastructure, the company said.
As a result of its growth strategy and new initiatives, McGrath RentCorp believes it is well positioned to become a larger and more profitable company as economic conditions improve.
“While we expect the next 18 to 24 months to be an extremely challenging operating environment, we would expect McGrath RentCorp to fare better than many companies due to the countercyclical nature of portions of our rental businesses, our strong cash flows and low-leveraged balance sheet,” said Kakures.
Founded in 1979, McGrath RentCorp is a diversified business to business rental company. Under the trade name Mobile Modular Management Corp., it rents and sells modular buildings to fulfill customers’ temporary and permanent classroom and office space needs in California, Texas, Florida, North Carolina, Georgia, Maryland and Virginia. The company’s TRS-RenTelco division rents and sells electronic test equipment and is a leading rental provider of general purpose and communications test equipment in the Americas. In 2008, the company purchased the assets of Adler Tank Rentals, a supplier of rental containment solutions for hazardous and nonhazardous liquids and solids with operations in the Northeast, Mid-Atlantic, Midwest and Southeast. Also, in 2008, under the trade name TRS-Environmental, the company entered the environmental test equipment rental business serving the Americas. In 2008, the company also entered the portable storage container rental business in Northern California under the trade name Mobile Modular Portable Storage.
