CAI International
Jul 30, 2013

CAI International, Inc. Reports Results for the Second Quarter of 2013 and Receives BBB Unsecured Corporate Rating from Kroll Bond Rating Agency

SAN FRANCISCO--(BUSINESS WIRE)-- CAI International, Inc. (CAI) (NYSE: CAP), one of the world's leading lessors of intermodal freight containers, today reported results for the second quarter of 2013.


Net income attributable to CAI common stockholders for the second quarter of 2013 was $16.9 million, a 12% increase compared to $15.1 million for the second quarter of 2012. Net income per fully diluted share attributable to CAI common stockholders for the second quarter of 2013 was $0.75, a 3% decrease compared to $0.77 for the second quarter of 2012; the 12% increase in net income being offset by a 15% increase in the number of fully diluted shares outstanding during the quarter.

Total revenue for the second quarter of 2013 was a record $53.0 million, compared to $39.7 million for the second quarter of 2012, an increase of 33%. Container rental revenue for the second quarter of 2013 was $48.4 million, compared to $35.1 million for the second quarter of 2012. The increase in container rental revenue was primarily due to an increase in the average number of TEUs of owned containers on lease. Management fee revenue for the second quarter of 2013 was $2.3 million, compared to $3.0 million for the second 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 second quarter of 2013 increased to $2.3 million, from $1.6 million in the second quarter of 2012, as a result of new finance leases entered into during the last twelve months. Average fleet utilization was flat at 92.1% in the second quarter of 2013, compared to 92.2% in the first quarter.

Victor Garcia, Chief Executive Officer of CAI, commented, "Our results this quarter are consistent with our outlook in the first quarter conference call, when we had indicated delayed inquiries for new containers from shipping lines. However, as the second quarter progressed, customer inquiries increased and we experienced an increase in the lease-out of new equipment. Nonetheless, overall trade growth has not reached expected levels and consequently demand for new equipment has been weaker than we expected, resulting in a competitive rate environment. Despite the level of competition, we have been able to find attractive opportunities for investment. To date, we have invested in $265 million of equipment, approximately half of which has been portfolio repurchases and sale-leasebacks. Over the past three months, we have seen an increase in the level of railcar investment opportunities and at the moment we have a pipeline of $24 million of transactions that we expect to add to our rail fleet during the third quarter. These investments are largely in equipment on long-term leases at attractive lease rates. We expect to make additional railcar asset acquisitions over the remainder of the year."

Mr. Garcia continued, "We are very pleased to have been given a BBB unsecured bond rating from Kroll BondRatingsTM. We believe that an investment grade rating from Kroll BondRatingsTM will provide additional and more flexible financing opportunities to our company."

Mr. Garcia concluded, "As I stated, demand for containers has been softer this year than we had initially 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, the dynamics of global container supply/demand remain fairly balanced as can be seen by the continued relatively high level of utilization in our fleet and the increased pickup activity we have seen in recent weeks. While the overall demand outlook for new container growth has been somewhat below our expectations, we remain very profitable, with strong cash flows and net after tax income margins exceeding 30%. We continue to believe that the underlying fundamentals for our sector remain positive--high utilization, balanced supply/demand and tight credit markets for shipping companies--and that any uptick in overall economic activity, will result in an acceleration in the demand for new containers."

CAI International, Inc.
Consolidated Balance Sheets
(In thousands, except share information)
June 30, December 31,
  2013     2012  
Current assets
Cash $ 33,588 $ 17,671
Accounts receivable (owned fleet), net of allowance for doubtful accounts of $975 and $794 at June 30, 2013 and December 31, 2012, respectively
39,956 32,627
Accounts receivable (managed fleet) 9,011 19,131
Current portion of direct finance leases 12,196 10,625
Prepaid expenses 15,760 11,952
Deferred tax assets 2,189 2,189
Other current assets   244     919  
Total current assets 112,944 95,114
Restricted cash 9,763 4,376
Rental equipment, net of accumulated depreciation of $177,642 and $147,654 at June 30, 2013 and December 31, 2012, respectively
1,425,752 1,210,234
Net investment in direct finance leases 64,887 74,929
Furniture, fixtures and equipment, net of accumulated depreciation of $1,437 and $1,254 at June 30, 2013 and December 31, 2012, respectively
1,657 1,847
Intangible assets, net of accumulated amortization of $7,881 and $7,447 at June 30, 2013 and December 31, 2012, respectively
  979     1,441  
Total assets $ 1,615,982   $ 1,387,941  
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 5,834 $ 5,985
Accrued expenses and other current liabilities 8,633 8,465
Due to container investors 12,732 18,589
Unearned revenue 7,029 7,893
Current portion of debt 68,280 61,044
Current portion of capital lease obligations 1,948 2,242
Rental equipment payable   21,427     2,561  
Total current liabilities 125,883 106,779
Debt 1,067,488 888,990
Deferred income tax liability 37,665 40,051
Capital lease obligations 4,206 5,084
Income taxes payable   192     192  
Total liabilities   1,235,434     1,041,096  
Stockholders' equity
Common stock: par value $.0001 per share; authorized 84,000,000 shares; issued and outstanding 22,179,340 and 22,052,529 shares at June 30, 2013 and December 31, 2012, respectively
2 2
Additional paid-in capital 182,758 181,063
Accumulated other comprehensive loss (3,907 ) (2,917 )
Retained earnings   201,695     168,697  
Total stockholders' equity   380,548     346,845  
Total liabilities and stockholders' equity $ 1,615,982   $ 1,387,941  

CAI International, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
  2013     2012     2013     2012  
Rental revenue $ 48,387 $ 35,101 $ 95,010 $ 67,588
Management fee revenue 2,294 3,006 4,524 7,207
Gain on sale of container portfolios - - - 1,256
Finance lease income   2,306     1,618     4,412     3,081  
Total revenue   52,987     39,725     103,946     79,132  
Operating expenses
Depreciation of rental equipment 16,285 11,053 31,618 21,711
Amortization of intangible assets 227 225 454 452
Gain on disposition of used rental equipment (1,857 ) (3,225 ) (4,493 ) (6,320 )
Storage, handling and other expenses 4,333 1,762 8,632 3,768
Marketing, general and administrative expenses 6,031 5,812 12,219 12,335
Loss (gain) on foreign exchange   125     (264 )   (175 )   (68 )
Total operating expenses   25,144     15,363     48,255     31,878  
Operating income   27,843     24,362     55,691     47,254  
Interest expense 8,955 6,320 17,359 12,256
Write-off of deferred financing costs - - 1,108 -
Interest income   (1 )   (2 )   (4 )   (7 )
Net interest expense   8,954     6,318     18,463     12,249  
Net income before income taxes and non-controlling interest 18,889 18,044 37,228 35,005
Income tax expense   1,958     2,396     4,230     4,901  
Net income 16,931 15,648 32,998 30,104
Net income attributable to non-controlling interest   -     (513 )   -     (578 )
Net income attributable to CAI common stockholders $ 16,931   $ 15,135   $ 32,998   $ 29,526  
Net income per share attributable to
CAI common stockholders
Basic $ 0.76 $ 0.78 $ 1.49 $ 1.53
Diluted $ 0.75 $ 0.77 $ 1.45 $ 1.50
Weighted average shares outstanding
Basic 22,144 19,295 22,115 19,295
Diluted 22,711 19,719 22,690 19,712

CAI International, Inc.
Fleet Data
As of June 30,
2013 2012
Owned container fleet in TEUs 846,905 560,570
Managed container fleet in TEUs 295,576 446,213
Total container fleet in TEUs 1,142,481 1,006,783
Owned railcar fleet in units 1,477 1,177

Conference Call

A conference call to discuss the financial results for the second quarter of 2013 will be held on Tuesday, July 30, 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,, by selecting "Q2 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 June 30, 2013, the company operated a worldwide fleet of approximately 1,142,000 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.

CAI International, Inc.
Tim Page, 415-788-0100
Chief Financial Officer

Source: CAI International, Inc.

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