SAN FRANCISCO--(EON: Enhanced Online News)--CAI International, Inc. (CAI) (NYSE:CAP), one of the world’s leading lessors of intermodal freight containers, today reported results for the third quarter of 2013.
- CAI reported rental revenue for the third quarter of 2013 of $50.7 million, an increase of 25% compared to the third quarter of 2012 and 5% compared to the second quarter of 2013, the 14th consecutive quarter of record rental revenue.
- CAI reported net income attributable to CAI common stockholders for the third quarter of 2013 of $15.3 million, compared to $16.5 million for the third quarter of 2012. CAI reported net income attributable to CAI common stockholders for the third quarter of 2013 of $0.68 per fully diluted share, compared to $0.84 for the third quarter of 2012. The average number of fully diluted shares in the quarter increased by 15% compared to the third quarter of 2012.
- During the quarter CAI entered into a sale and lease back transaction with a shipping customer for approximately 9,000 TEUs of containers. The company also acquired approximately 13,000 TEUs of new containers during the quarter.
Net income attributable to CAI common stockholders for the third quarter of 2013 was $15.3 million, compared to $16.5 million for the third quarter of 2012. Net income per fully diluted share attributable to CAI common stockholders for the third quarter of 2013 was $0.68, compared to $0.84 for the third quarter of 2012. Net income per share was impacted by a 15% increase in the number of fully diluted shares outstanding during the quarter, compared to the third quarter of 2012.
Total revenue for the third quarter of 2013 was a record $53.9 million, compared to $44.9 million for the third quarter of 2012, an increase of 20%. Rental revenue for the third quarter of 2013 was $50.7 million, compared to $40.5 million for the third quarter of 2012. The increase in rental revenue was primarily due to an increase in the average number of TEUs of owned containers on lease. Management fee revenue for the third quarter of 2013 was $1.5 million, compared to $2.5 million for the third quarter of 2012, reflecting the reduction in the size of the managed fleet as CAI has acquired a number of its previously managed portfolios during the last twelve months. Finance lease income for the third quarter of 2013 was $1.7 million, compared to $2.0 million in the third quarter of 2012, as a result of the reclassification of certain leases during the second quarter of 2013. Average fleet utilization was flat at 92.0% in the third quarter of 2013, compared to 92.1% in the second quarter.
Victor Garcia, Chief Executive Officer of CAI, commented, “We reported 25% rental revenue growth this past quarter as compared to the same period in 2012. We are pleased that we have continued to gain support from our customers by leasing more containers this quarter, however, we did not experience the peak season demand normally expected during the third quarter. Our overall utilization remained essentially flat with the prior quarter at 92%, reflecting the moderate demand for containers that we experienced during the third quarter, which historically has been when demand has been strongest. Per diem pricing throughout the industry has been aggressive during the quarter reflecting the more limited container demand this year and our belief that leasing companies have tried to reduce their available inventory. According to industry sources, inventory of new containers at the factories has decreased significantly during the third quarter, and we will be focusing on whether the lower inventory levels at the factories will result in a firming of per diem rates over the coming months.”
Mr. Garcia continued, “Our net income this quarter was negatively affected by higher storage costs and lower gains on sale of equipment. Higher storage costs reflect a 43% increase in the size of our owned fleet compared to the prior year, a lower overall fleet utilization compared to the same quarter last year and our purchase of some managed portfolios over the course of the past 12 months that had a lower utilization than our overall fleet. Gain on sale of equipment was also lower this quarter compared to the same period last year due to slightly lower sale prices in some regions, and a decrease in the average age of sold containers which led to an increase in the average book values of equipment sold. We are implementing several initiatives that are expected to increase our sales volume over the coming quarters which we expect will reduce our depot inventory in low demand areas and improve our overall utilization.”
Mr. Garcia concluded, “As I stated, demand for containers has been softer this past quarter than had been expected, which we believe reflects both the slow economic growth in the United States and Europe, as well as the recent moderation of growth in China. However, since the end of the quarter we have witnessed more requests for equipment, which we view as a positive development of improved container demand. We also remain optimistic about the demand for equipment in 2014 since many recent economic forecasts predict an improving outlook for most of the global economy. This improved outlook includes stabilizing and potentially improving economies in Europe, the U.S. economy showing signs of continued improvement and of particular importance to our business, an improved outlook for trade growth in China and the rest of Asia. With even modest growth in world trade, we would expect demand for containers to significantly improve from what we are seeing so far this year.”
|CAI International, Inc.|
|Consolidated Balance Sheets|
|(In thousands, except share information)|
|September 30,||December 31,|
Accounts receivable (owned fleet), net of allowance for doubtful accounts of $1,060 and $794 at September 30, 2013 and December 31, 2012, respectively
|Accounts receivable (managed fleet)||10,611||19,131|
|Current portion of direct finance leases||12,349||10,625|
|Deferred tax assets||2,189||2,189|
|Other current assets||246||919|
|Total current assets||116,912||95,114|
Rental equipment, net of accumulated depreciation of $193,826 and $147,654 at September 30, 2013 and December 31, 2012, respectively
|Net investment in direct finance leases||63,088||74,929|
Furniture, fixtures and equipment, net of accumulated depreciation of $1,578 and $1,254 at September 30, 2013 and December 31, 2012, respectively
Intangible assets, net of accumulated amortization of $8,162 and $7,447 at September 30, 2013 and December 31, 2012, respectively
|Liabilities and Stockholders' Equity|
|Accrued expenses and other current liabilities||8,631||8,465|
|Due to container investors||13,215||18,589|
|Current portion of debt||74,280||61,044|
|Current portion of capital lease obligations||1,944||2,242|
|Rental equipment payable||5,522||2,561|
|Total current liabilities||116,565||106,779|
|Deferred income tax liability||37,759||40,051|
|Capital lease obligations||3,723||5,084|
|Income taxes payable||192||192|
Common stock: par value $.0001 per share; authorized 84,000,000 shares; issued and outstanding 22,239,340 and 22,052,529 shares at September 30, 2013 and December 31, 2012, respectively
|Additional paid-in capital||183,519||181,063|
|Accumulated other comprehensive loss||(2,699||)||(2,917||)|
|Total stockholders' equity||397,854||346,845|
|Total liabilities and stockholders' equity||$||1,628,723||$||1,387,941|
|CAI International, Inc.|
|Consolidated Statements of Income|
|(In thousands, except per share data)|
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|Management fee revenue||1,503||2,492||6,027||9,699|
|Gain on sale of container portfolios||-||-||-||1,256|
|Finance lease income||1,684||1,974||6,096||5,055|
|Depreciation of rental equipment||17,389||12,495||49,007||34,206|
|Amortization of intangible assets||227||224||681||676|
|Gain on disposition of used rental equipment||(1,329||)||(2,491||)||(5,822||)||(8,811||)|
|Storage, handling and other expenses||4,979||2,197||13,611||5,965|
|Marketing, general and administrative expenses||6,055||6,275||18,274||18,610|
|Loss on foreign exchange||374||193||199||125|
|Total operating expenses||27,695||18,893||75,950||50,771|
|Write-off of deferred financing costs||-||-||1,108||-|
|Net interest expense||9,546||7,178||28,009||19,427|
|Net income before income taxes and non-controlling interest||16,657||18,868||53,885||53,873|
|Income tax expense||1,320||2,102||5,550||7,003|
|Net income attributable to non-controlling interest||-||(238||)||-||(816||)|
|Net income attributable to CAI common stockholders||$||15,337||$||16,528||$||48,335||$||46,054|
Net income per share attributable to CAI common stockholders
|Weighted average shares outstanding|
|CAI International, Inc.|
|As of September 30,|
|Owned container fleet in TEUs||856,121||616,257|
|Managed container fleet in TEUs||289,846||444,906|
|Total container fleet in TEUs||1,145,967||1,061,163|
|Owned railcar fleet in units||1,572||1,393|
A conference call to discuss the financial results for the third quarter of 2013 will be held on Tuesday, October 29, 2013 at 5:00 p.m. ET. The dial-in number for the teleconference is 1-888-398-8098; outside of the U.S., call 1-707-287-9363. The call may be accessed live over the internet (listen only) under the “Investors” tab of CAI’s website, www.capps.com, by selecting “Q3 2013 Earnings Conference Call.” A webcast replay will be available for 30 days on the “Investors” tab of our website.
About CAI International, Inc.
CAI is one of the world’s leading managers and lessors of intermodal freight containers. As of September 30, 2013, the company operated a worldwide fleet of approximately 1,146,000 TEUs of containers through 16 offices located in 12 countries including the United States. CAI also owns a fleet of railcars, which it leases within North America.
This press release contains forward-looking statements regarding future events and the future performance of CAI International, Inc. These statements are forward looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and involve risks and uncertainties that could cause actual results of operations and other performance measures to differ materially from current expectations including, but not limited to, utilization rates, expected economic conditions, availability of credit on commercially favorable terms or at all, customer demand, container investment levels, container prices, lease rates, increased competition, volatility in exchange rates, growth in world trade and world container trade, and others. CAI refers you to the documents that it has filed with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2012 and its interim reports on Form 10-Q and its reports on Form 8-K. These documents contain additional important factors that could cause actual results to differ from current expectations and from forward-looking statements contained in this press release. Furthermore, CAI is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements contained in this press release whether as a result of new information, future events or otherwise, unless required by law.