| Tue 6 May 2008, 12:56 | | TRE - MOB - Trencor Limited - Mobile Industries Li |
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MOB TRE
MOB TRE
TRE - MOB - Trencor Limited - Mobile Industries Limited - Trencors textainer
reports quarterly results
TRENCOR LIMITED
(Incorporated in the Republic of South Africa)
(Reg No 1955/002869/06)
Share Code: TRE
ISIN:ZAE000007506
("Trencor")
MOBILE INDUSTRIES LIMITED
(Incorporated in the Republic of South Africa)
(Reg No 1968/014997/06)
Share Code: MOB
ISIN:ZAE000091435
("Mobile")
TRENCOR`S TEXTAINER REPORTS QUARTERLY RESULTS
We draw attention to the following announcement issued by Textainer Group
Holdings Limited, in which Trencor has a 62,6% beneficial interest:
Textainer Group Holdings Limited Reports First Quarter 2008 Results and
Declares Quarterly Dividend
Hamilton, Bermuda, May 5, 2008 (Business Wire) -- Textainer Group Holdings
Limited (NYSE: TGH) ("Textainer"), the world`s largest lessor of intermodal
containers based on fleet size, today reported results for the first quarter
ended March 31, 2008.
Total revenues for the quarter increased by $13.1 million, or 22%, to $72.2
million compared to $59.2 million in the prior year quarter primarily due to
a $10.6 million, or 337%, increase in trading container sales proceeds to
$13.7 million compared to $3.1 million in the prior year quarter. EBITDA(1)
for the quarter increased by $9.5 million, or 27%, to $44.1 million compared
to $34.7 million in the prior year quarter.
Net income excluding unrealized losses on interest rate swaps, net(1) for
the quarter was $22.5 million, a 29% increase over the $17.5 million earned
in the prior year quarter. Net income per diluted common share excluding
unrealized losses on interest rate swaps, net(1) for the quarter was $0.47
per share, a 4% increase over the $0.45 per share in the prior year quarter.
Net income for the quarter was $17.4 million, a 4% increase over the prior
year quarter, even though $6.3 million in unrealized losses on interest rate
swaps, net (a non-cash, non-operating item) was $4.9 million higher in the
current quarter compared to the prior year quarter. Textainer`s net income
per diluted common share decreased by $0.07 per share, or 16%, to $0.36 per
share for the first quarter of 2008 from $0.43 per share in the prior year
quarter. The decrease in Textainer`s net income per diluted common share
was due to the increase in Textainer`s weighted average number of shares
outstanding for the first quarter of 2008 as a result of the additional
shares issued in Textainer`s initial public offering in the fourth quarter
of 2007.
"I am very pleased with our first quarter 2008 results. Overall demand for
our containers through March was strong. Textainer`s utilization continued
to remain around 93% during the first quarter of 2008," commented John A.
Maccarone, President and CEO of Textainer.
He continued, "Our container resale segment had the best quarter in its
history. First quarter resale income before taxes of $5.2 million, an
increase of $3.5 million, or 198%, over the prior year`s quarter results of
$1.7 million was primarily due to an increase in the number of trading
containers we were able to source and sell."
"One of the highlights of the first quarter was our re-entry into the
refrigerated container market segment. Currently 770 units out of the 800
refrigerated containers delivered so far in 2008 have been committed to
leases with various shipping lines. We completed our first refrigerated
container lease with Mitsui O.S.K. Lines ("MOL"), which is the world`s 11th
largest container vessel operator. MOL leased 300 40` High Cube
refrigerated containers. As a result of this early success, Textainer
ordered an additional 1,100 40` High Cube refrigerated containers for
delivery through July of 2008. The refrigerated container machinery will be
supplied by Carrier, Daiken and Thermo King."
In April, Textainer Limited, which is a wholly-owned subsidiary of
Textainer, entered into a $205 million, five-year revolving credit agreement
with a group of financial institutions led by Bank of America, N.A. The
credit agreement was a restructuring and increase of Textainer Limited`s
prior two-year, $75 million revolving credit facility.
"We are extremely pleased to have been able to increase both the size and
the term of Textainer Limited`s revolver," Mr. Maccarone noted. "Given the
challenging conditions in the credit markets today, we consider this new
credit agreement with both our existing and several new banks to be a clear
indication of their confidence in our business model and operating
philosophy."
Outlook
On April 17, 2008 the Wall Street Journal reported that China`s gross
domestic product ("GDP") expanded 10.6% in the first quarter of 2008
compared to the first quarter of 2007. Although down slightly from China`s
GDP growth of 11.9% for all of 2007, the Chinese economy continues to
perform strongly. However, many of our customers reported a slower growth
in cargo bookings in the first quarter of this year compared to the first
quarter of last year.
Some of the factors behind these trends in the first quarter were:
* a slowdown in the U.S. economy resulted in reduced growth in exports to
the U.S.;
* a stronger Chinese yuan increased the effective cost of Chinese
exports;
* severe snow storms in China reduced exports;
* some factories in South China closed due to new labor laws in China
making them less competitive; and
* reductions in Chinese export tax credits.
By the end of April, many shipping line customers indicated that cargo
volumes started to increase again, and yet they had not placed orders for
new containers due to the slow start to the year and higher prices for new
containers. Two other factors influenced the container supply and demand
balance:
* Due to very high vessel fuel costs, many shipping lines reduced the
speed of their ships. To maintain the same sailing schedules, they had
to add vessels, thus resulting in an increase in the number of
containers required.
* The weak dollar has resulted in significant increases in U.S. exports,
causing a shortage of containers in certain North American locations,
as reported in the April 10, 2008 issue of the Wall Street Journal. An
executive of Kuehne & Nagel, the world`s largest freight forwarder was
quoted in the April 7, 2008 issue of the Journal of Commerce, "U.S.
exports will be solid for at least 12 months because there`s no sign
the dollar will appreciate in value."
These factors combined contributed to strong demand for our containers.
In the first quarter of 2008, Textainer originated over 41,000 twenty-foot
equivalent units ("TEU") of owned and managed long-term leases and 10,000
TEU of direct financing and sales-type leases. New owned and managed
standard dry freight containers ordered for delivery through May 2008
totaled 52,500 TEU at a cost of $105 million. In addition, 1,900 owned and
managed 40` High Cube refrigerated containers costing $33 million were
ordered for delivery through July 2008.
"We are very pleased that demand for our in-fleet containers has also been
quite strong in almost all locations in Asia. This resulted in strong
demand for leased containers, both new and in-service units," said Mr.
Maccarone.
Textainer expects that its Resale Division will continue to experience
attractive pricing and relatively high sales volumes.
Dividend
On May 2, 2008, Textainer`s board of directors approved and declared a
quarterly cash dividend of $0.22 per share on Textainer`s issued and
outstanding common shares, payable on May 22, 2008 to shareholders of record
as of May 15, 2008. This represents an increase of $0.01 per share, or 5%,
from the fourth quarter 2008 cash dividend of $0.21 per share.
Investors` Webcast
Textainer will hold a conference call and a Webcast at 2:00 p.m. EDT on
Wednesday May 7, 2008 to discuss Textainer`s first quarter 2008 results. An
archive of the Webcast will be available one hour after the live call
through May 7, 2009. The dial-in number for the conference call is 1-877-
397-0235; outside the U.S. call 1-719-325-4866. To access the live Webcast
or archive, please visit Textainer`s website at http://www.textainer.com.
About Textainer Group Holdings Limited
Textainer has operated since 1979 and is the world`s largest lessor of
intermodal containers based on fleet size. We have a total of more than 1.3
million containers, representing over 2,000,000 TEU, in our owned and
managed fleet. We lease containers to more than 400 shipping lines and
other lessees. We principally lease dry freight containers, which are by
far the most common of the three principal types of intermodal containers,
although we also lease specialized and refrigerated containers. We have
also been one of the largest purchasers of new containers among container
lessors over the last 10 years. We believe we are also one of the largest
sellers of used containers, having sold an average of more than 53,000
containers per year for the last five years. We provide our services
worldwide via a network of 14 regional and area offices and over 350
independent depots in more than 130 locations.
Important Cautionary Information Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of
U.S. securities laws. Forward-looking statements include statements that are
not statements of historical facts and include, without limitation,
statements regarding (i) the expectation that U.S. exports will be solid for
at least 12 months and (ii) regarding Textainer`s expectations that its
Resale Division will continue to experience attractive pricing and
relatively high sales volumes. Readers are cautioned that these forward-
looking statements involve risks and uncertainties, are only predictions and
may differ materially from actual future events or results. These risks and
uncertainties include, without limitation, that gains and losses associated
with the disposition of equipment may fluctuate; Textainer`s ability to
finance continued purchase of containers; the demand for leased containers
depends on many political and economic factors beyond Textainer`s control;
lease and freight rates may decline; the demand for leased containers is
partially tied to international trade; Textainer faces extensive competition
in the container leasing industry; the international nature of the container
shipping industry exposes Textainer to numerous risks; and other risks and
uncertainties, including those set forth in Textainer`s filings with the
Securities and Exchange Commission. For a discussion of such risks and
uncertainties, see Item 3 "Key Information-- Risk Factors" in Textainer`s
Annual Report on Form 20-F filed with the Securities and Exchange Commission
on March 28, 2008.
Textainer`s views, estimates, plans and outlook as described within this
document may change subsequent to the release of this statement. Textainer
is under no obligation to modify or update any or all of the statements it
has made herein despite any subsequent changes Textainer may make in its
views, estimates, plans or outlook for the future.
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 2008 and December 31, 2007
(Unaudited)
(All currency expressed in United States dollars in thousands)
2008 2007
Assets
Current assets:
Cash and cash equivalents $ $
72,762 69,447
Accounts receivable, net of allowance
for doubtful accounts of
$3,304 and $3,160 in 2008 and
2007, respectively 45,977 44,688
Net investment in direct financing and
sales-type leases 10,109 9,116
Containers held for resale
3,733 3,798
Prepaid expenses
3,263 2,527
Deferred taxes
352 352
Due from affiliates, net
6 9
Total current assets
136,202 129,937
Restricted cash
14,065 16,742
Containers, net of accumulated
depreciation of $326,914 and $322,845
in 2008 and 2007, respectively
904,470 856,874
Net investment in direct financing and
sales-type leases 51,876 48,075
Fixed assets, net of accumulated
depreciation of $7,913 and $7,795
in 2008 and 2007, respectively
1,262 1,230
Intangible assets, net of accumulated
amortization of $6,670 and $4,700
in 2008 and 2007, respectively
70,676 72,646
Interest rate swaps
- 127
Other assets
2,607 2,715
Total assets $ $
1,181,158 1,128,346
Liabilities and Shareholders` Equity
Current liabilities:
Accounts payable $ $
6,371 4,612
Accrued expenses
11,589 11,115
Container contracts payable
60,798 28,397
Due to owners, net
15,968 18,019
Secured debt facility
12,803 6,585
Bonds payable
58,000 58,000
Total current liabilities
165,529 126,728
Revolving credit facility
- 21,500
Secured debt facility
157,202 124,391
Bonds payable
356,511 370,938
Interest rate swaps
10,551 4,409
Long-term income tax payable
17,078 15,733
Deferred taxes
10,818 10,814
Total liabilities
717,689 674,513
Minority interest
51,420 49,717
Shareholders` equity:
Common shares, $0.01 par value.
Authorized 140,000,000 shares; issued
and
outstanding 47,604,640 at 2008
and 2007 476 476
Additional paid-in capital
164,342 163,753
Notes receivable from shareholders
(376) (432)
Accumulated other comprehensive
income 498 579
Retained earnings
247,109 239,740
Total shareholders` equity
412,049 404,116
Total liabilities and shareholders` $ $
equity 1,181,158 1,128,346
TEXTAINER GROUP HOLDINGS LIMITED AND
SUBSIDIARIES
Consolidated Statements of Income
Three months ended March 31, 2008 and 2007
(Unaudited)
(All currency expressed in United States
dollars in thousands, except per share
amounts)
2008 2007
Revenues:
Lease rental income $ $
47,534 47,450
Management fees
7,450 5,375
Trading container sales proceeds
13,714 3,136
Gains on sale of containers, net
3,537 3,022
Other, net
- 168
Total revenues
72,235 59,151
Operating expenses:
Direct container expense
6,350 8,927
Cost of trading containers sold
10,068 2,541
Depreciation expense
12,884 11,094
Amortization expense
1,970 535
General and administrative expense
5,760 4,196
Short-term incentive compensation expense
811 954
Long-term incentive compensation expense
655 -
Bad debt expense, net
135 474
Total operating expenses
38,633 28,721
Income from operations
33,602 30,430
Other income (expense):
Interest expense
(6,947) (8,323)
Interest income
577 688
Realized (losses) gains on interest rate
swaps and caps, net (685) 855
Unrealized losses on interest rate swaps,
net (6,269) (1,345)
Other, net
136 (35)
Net other expense
(13,188) (8,160)
Income before income tax and minority
interest expense 20,414 22,270
Income tax expense
(1,345) (1,603)
Minority interest expense
(1,703) (3,940)
Net income $ $
17,366 16,727
Net income per share:
Basic $ $
0.36 0.44
Diluted $ $
0.36 0.43
Weighted average shares outstanding (in
thousands):
Basic
47,605 38,384
Diluted
47,652 38,542
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three months ended March 31, 2008 and 2007
(Unaudited)
(All currency expressed in United States dollars in
thousands)
2008 2007
Cash flows from operating activities:
Net income $ $
17,366 16,727
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense
12,884 11,094
Provision for containers held for resale
16 (1)
Bad debt expense, net
135 474
Unrealized losses on interest rate swaps,
net 6,269 1,345
Amortization of debt issuance costs
357 345
Amortization of intangible assets
1,970 535
Gains on sale of containers, net
(3,537) (3,022)
Share-based compensation expense (benefit)
592 (20)
Minority interest expense
1,703 3,940
Increase (decrease) in:
Accounts receivable, net
(1,424) (2,582)
Containers held for resale
49 1,653
Prepaid expenses
(697) 171
Due from affiliates, net
3 (19)
Other assets
(150) (92)
(Decrease) increase in:
Accounts payable
1,759 726
Accrued expenses
474 1,790
Due to owners, net
(2,051) 3,048
Long-term income tax payable
1,345 -
Deferred taxes, net
4 (1)
Total adjustments
19,701 19,384
Net cash provided by operating
activities 37,067 36,111
Cash flows from investing activities:
Purchase of containers and fixed assets
(44,324) (30,989)
Proceeds from sale of containers and fixed
assets 11,357 12,323
Receipt of principal payments on direct
financing and sales-type leases 3,599 1,697
Net cash used in investing activities
(29,368) (16,969)
Cash flows from financing activities:
Proceeds from revolving credit facility
18,000 29,000
Principal payments on revolving credit facility
(39,500) -
Proceeds from secured debt facility
74,500 17,000
Principal payments on secured debt facility
(35,500) (20,000)
Principal payments on bonds payable
(14,500) (14,500)
Decrease (increase) in restricted cash
2,677 (1,750)
Debt issuance costs
(39) (257)
Repayments of notes receivable from shareholders
56 590
Dividends paid
(9,997) (20,267)
Net cash used in financing activities
(4,303) (10,184)
Effect of exchange rate changes
(81) 21
Net increase in cash and cash
equivalents 3,315 8,979
Cash and cash equivalents, beginning of the year
69,447 41,163
Cash and cash equivalents, end of the period $ $
72,762 50,142
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three months ended March 31, 2008 and 2007
(All currency expressed in United States dollars
in thousands)
2008 2007
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ $
7,371 7,072
Income taxes $ $
113 258
Supplemental disclosures of noncash investing
activities:
Increase in accrued container purchases $ $
32,401 20,995
Containers placed in direct financing and sales- $ $
type leases 8,393 2,161
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Non-GAAP Reconciliation of Net Income to EBITDA and Net Income to Net Income
Excluding Unrealized Losses on Interest Rate Swaps, Net
Three Months Ended March 31, 2008 and 2007
(Unaudited)
(All currency expressed in United States dollars in thousands, except per
share amounts)
(1) The following is a reconciliation of net income to EBITDA, a
reconciliation of net income to net income excluding unrealized losses on
interest rate swaps, net and a reconciliation of net income per diluted
common share to net income per diluted common share excluding unrealized
losses on interest rate swaps, net for the three months ended March 31, 2008
and 2007. EBITDA (defined as net income before interest income and interest
expense, realized and unrealized (gains) losses on interest rate swaps, net,
income tax expense, minority interest expense, depreciation and amortization
expense and the related impact on minority interest expense), net income
excluding unrealized losses on interest rate swaps, net (defined as net
income before unrealized losses on interest rate swaps, net and the related
impact on income tax expense and minority interest expense) and net income
per diluted common share excluding unrealized losses on interest rate swaps,
net (defined as net income per diluted common share before unrealized losses
on interest rate swaps, net and the related impact on income tax expense and
minority interest expense) are not financial measures calculated in
accordance with U.S. generally accepted accounting principles ("GAAP") and
should not be considered as an alternative to net income, income from
operations or any other performance measures derived in accordance with GAAP
or as an alternative to cash flows from operating activities as a measure of
our liquidity. EBITDA, net income excluding unrealized losses on interest
rate swaps, net and net income per diluted common share excluding unrealized
losses on interest rate swaps, net are presented solely as supplemental
disclosures. Management believes that EBITDA may be a useful performance
measure that is widely used within our industry. EBITDA is not calculated
in the same manner by all companies and, accordingly, may not be an
appropriate measure for comparison. Management also believes that net
income excluding unrealized losses on interest rate swaps, net and net
income per diluted common share excluding unrealized losses on interest rate
swaps, net are useful in evaluating our operating performance because
unrealized losses on interest rate swaps, net is a non-cash, non-operating
item. We believe EBITDA, net income excluding unrealized losses on interest
rate swaps, net and net income per diluted common share excluding unrealized
losses on interest rate swaps, net provides useful information on our
earnings from ongoing operations. We believe that EBITDA provides useful
information on our ability to service our long-term debt and other fixed
obligations and on our ability to fund our expected growth with internally
generated funds. EBITDA, net income excluding unrealized losses on interest
rate swaps, net and net income per diluted common share excluding unrealized
losses on interest rate swaps, net have limitations as analytical tools, and
you should not consider either of them in isolation, or as a substitute for
analysis of our operating results or cash flows as reported under GAAP.
Some of these limitations are:
* They do not reflect our cash expenditures, or future requirements, for
capital expenditures or contractual commitments;
* They do not reflect changes in, or cash requirements for, our working
capital needs;
* EBITDA does not reflect interest expense or cash requirements necessary
to service interest or principal payments on our debt;
* Although depreciation is a non-cash charge, the assets being
depreciated may be replaced in the future, and neither EBITDA, net
income excluding unrealized losses on interest rate swaps, net or net
income per diluted common share excluding unrealized losses on interest
rate swaps, net reflects any cash requirements for such replacements;
* They are not adjusted for all non-cash income or expense items that are
reflected in our statements of cash flows; and
* Other companies in our industry may calculate these measures
differently than we do, limiting their usefulness as comparative
measures.
Three Months Ended March
31,
2008 2007
Reconciliation of EBITDA:
Net income $ $
17,366 16,727
Adjustments:
Interest income
(577) -688
Interest expense
6,947 8,323
Realized losses (gains) on interest rate swaps
and caps, net 685 -855
Unrealized losses on interest rate swaps, net
6,269 1,345
Income tax expense
1,345 1,603
Minority interest expense
1,703 3,940
Depreciation expense
12,884 11,094
Amortization expense
1,970 535
Impact of reconciling items on minority
interest expense (4,450) -7,346
EBITDA $ $
44,142 34,678
Reconciliation of net income excluding unrealized losses
on interest
rate swaps, net:
Net income $ $
17,366 16,727
Adjustments:
Unrealized losses on interest rate swaps, net
6,269 1,345
Income tax expense
- -
Impact of reconciling items on minority
interest expense (1,099) (597)
Net income excluding unrealized losses on $ $
interest rate swaps, net 22,536 17,475
Reconciliation of net income per diluted common share excluding
unrealized losses on interest rate swaps, net:
Net income per diluted common share $ $
0.36 0.43
Adjustments:
Unrealized losses on interest rate swaps, net
0.13 0.04
Income tax expense
- -
Impact of reconciling item on minority
interest expense (0.02) (0.02)
Net income per diluted common share excluding $ $
unrealized losses 0.47 0.45
on interest rate swaps, net
These results of Textainer can be accessed on its website www.textainer.com
and a PDF of its results announcement can be accessed on the Trencor and
Mobile websites.
Trencor Services (Pty) Ltd
Secretaries
6 May 2008
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
www.trencor.net
www.mobile-industries.net
Date: 06/05/2008 12:56:01 Produced by the JSE SENS Department.
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