CAI International, Inc. Reports Results for the First Quarter of 2021
Highlights
-
Net income from continuing operations attributable to CAI common stockholders for the first quarter of 2021 was
$32.5 million , or$1.85 per fully diluted share. - Return on common equity on adjusted net income from continuing operations1 was 21.3% in the first quarter of 2021.
-
Total leasing revenue for the first quarter of 2021 was
$80.8 million , compared to$69.1 million in the first quarter of 2020. -
CAI’s Board of Directors declared a cash dividend of
$0.30 per common share payable onJune 25, 2021 to shareholders of record as ofJune 10, 2021 . -
CAI leased out
$129 million of new containers on long-term or finance leases in the first quarter of 2021 and has leased, or has commitments to lease, an additional$350 million in the second and third quarters. - Average CEU utilization for CAI’s owned container fleet during the first quarter of 2021 was 99.7%, compared to 99.3% for the fourth quarter of 2020. Current CEU utilization is 99.7%.
Financial and Operating Highlights |
|||||||||||||||||
Three Months Ended | |||||||||||||||||
2021 |
2020 |
2020 |
|||||||||||||||
Total leasing revenue |
$ |
80,800 |
|
$ |
81,567 |
|
$ |
69,113 |
|
||||||||
Continuing operations GAAP | |||||||||||||||||
Net income attributable to common stockholders |
$ |
32,470 |
|
$ |
32,511 |
|
$ |
10,462 |
|
||||||||
Net income per share - diluted |
$ |
1.85 |
|
$ |
1.81 |
|
$ |
0.59 |
|
||||||||
Continuing operations non-GAAP 1 | |||||||||||||||||
Adjusted net income attributable to common stockholders |
$ |
32,470 |
|
$ |
31,622 |
|
$ |
10,462 |
|
||||||||
Adjusted net income per share - diluted |
$ |
1.85 |
|
$ |
1.76 |
|
$ |
0.59 |
|
||||||||
Return on common equity (continuing operations) 2 |
|
21.3 |
% |
|
21.2 |
% |
|
7.1 |
% |
||||||||
Total container fleet size in CEUs at end of period |
|
1,837,560 |
|
|
1,798,520 |
|
|
1,705,059 |
|
||||||||
Container fleet utilization at end of period |
|
99.7 |
% |
|
99.6 |
% |
|
98.2 |
% |
1 Refer to the “Reconciliation of GAAP Amounts to Non-GAAP Amounts” and “Use of Non-GAAP Financial Measures” set forth below.
2 Refer to the “Calculation of Return on Equity” set forth below.
“Our strong results for the quarter were driven by a number of positive factors. During the quarter utilization remained strong at an average of 99.7%, and we leased out
“We currently have
“Given our expectation that our container fleet will be effectively fully utilized, we don’t expect that we will be able to realize the same level of gains on sale that we achieved in the first quarter. Nonetheless, driven by our strong order book, we expect Q2 net income to be at or slightly exceed that of Q1 and will provide the basis for continued growth in the coming quarters.”
Additional information on CAI’s results, as well as comments on market trends, is available in a presentation posted today on the “Investors” section of CAI's website, www.capps.com.
Consolidated Balance Sheets | |||||||
(In thousands, except share information) | |||||||
(UNAUDITED) | |||||||
2021 |
2020 |
||||||
Assets | |||||||
Current assets | |||||||
Cash |
$ |
23,971 |
$ |
26,691 |
|
||
Cash held by variable interest entities |
|
23,942 |
|
26,856 |
|
||
Current portion of restricted cash |
|
600 |
|
600 |
|
||
Accounts receivable, net of allowance for doubtful accounts of |
|||||||
at |
|
61,843 |
|
65,310 |
|
||
Current portion of net investment in finance leases |
|
80,308 |
|
78,992 |
|
||
Current portion of financing receivable |
|
10,615 |
|
9,550 |
|
||
Prepaid expenses and other current assets |
|
5,788 |
|
6,663 |
|
||
Total current assets |
|
207,067 |
|
214,662 |
|
||
Restricted cash |
|
12,087 |
|
12,355 |
|
||
Rental equipment, net of accumulated depreciation of |
|||||||
at |
|
1,808,001 |
|
1,781,321 |
|
||
Net investment in finance leases |
|
585,016 |
|
550,573 |
|
||
Financing receivable |
|
50,568 |
|
48,888 |
|
||
Derivative instruments |
|
9,586 |
|
- |
|
||
Other non-current assets |
|
4,280 |
|
4,833 |
|
||
Total assets |
$ |
2,676,605 |
$ |
2,612,632 |
|
||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Accounts payable |
$ |
3,231 |
$ |
3,666 |
|
||
Accrued expenses and other current liabilities |
|
26,569 |
|
29,598 |
|
||
Unearned revenue |
|
3,260 |
|
3,029 |
|
||
Current portion of debt |
|
183,878 |
|
183,448 |
|
||
Rental equipment payable |
|
61,582 |
|
100,509 |
|
||
Total current liabilities |
|
278,520 |
|
320,250 |
|
||
Debt |
|
1,642,879 |
|
1,562,283 |
|
||
Derivative instruments |
|
- |
|
80 |
|
||
Net deferred income tax liability |
|
25,532 |
|
24,442 |
|
||
Other non-current liabilities |
|
3,467 |
|
3,337 |
|
||
Total liabilities |
|
1,950,398 |
|
1,910,392 |
|
||
Stockholders' equity | |||||||
Preferred stock, par value |
|||||||
8.50% Series A fixed-to-floating rate cumulative redeemable perpetual preferred | |||||||
stock, issued and outstanding 2,199,610 shares, at liquidation preference |
|
54,990 |
|
54,990 |
|
||
8.50% Series B fixed-to-floating rate cumulative redeemable perpetual preferred | |||||||
stock, issued and outstanding 1,955,000 shares, at liquidation preference |
|
48,875 |
|
48,875 |
|
||
Common stock: par value |
|||||||
17,304,111 and 17,562,779 shares at |
|
2 |
|
2 |
|
||
Additional paid-in capital |
|
89,308 |
|
100,795 |
|
||
Accumulated other comprehensive loss |
|
1,370 |
|
(5,743 |
) |
||
Retained earnings |
|
531,662 |
|
503,321 |
|
||
Total stockholders' equity |
|
726,207 |
|
702,240 |
|
||
Total liabilities and stockholders' equity |
$ |
2,676,605 |
$ |
2,612,632 |
|
Consolidated Statements of Operations | |||||||||
(In thousands, except per share data) | |||||||||
(UNAUDITED) | |||||||||
Three Months Ended | |||||||||
2021 |
2020 |
||||||||
Leasing revenue | |||||||||
Operating leases |
$ |
63,867 |
|
$ |
54,629 |
|
|||
Finance leases |
|
13,245 |
|
|
11,590 |
|
|||
Other |
|
3,688 |
|
|
2,894 |
|
|||
Total leasing revenue |
|
80,800 |
|
|
69,113 |
|
|||
Operating expenses | |||||||||
Depreciation of rental equipment |
|
28,551 |
|
|
27,048 |
|
|||
Storage, handling and other expenses |
|
2,489 |
|
|
4,429 |
|
|||
Gain on sale of rental equipment |
|
(6,743 |
) |
|
(1,647 |
) |
|||
Administrative expenses |
|
7,740 |
|
|
6,895 |
|
|||
Total operating expenses |
|
32,037 |
|
|
36,725 |
|
|||
Operating income |
|
48,763 |
|
|
32,388 |
|
|||
Other expenses | |||||||||
Net interest expense |
|
11,172 |
|
|
18,274 |
|
|||
Other expense |
|
410 |
|
|
246 |
|
|||
Total other expenses |
|
11,582 |
|
|
18,520 |
|
|||
Income before income taxes |
|
37,181 |
|
|
13,868 |
|
|||
Income tax expense |
|
2,504 |
|
|
1,199 |
|
|||
Income from continuing operations |
|
34,677 |
|
|
12,669 |
|
|||
Income (loss) from discontinued operations, net of income taxes |
|
1,063 |
|
|
(13,999 |
) |
|||
Net income (loss) |
|
35,740 |
|
|
(1,330 |
) |
|||
Preferred stock dividends |
|
2,207 |
|
|
2,207 |
|
|||
Net income (loss) attributable to CAI common stockholders |
$ |
33,533 |
|
$ |
(3,537 |
) |
|||
Amounts attributable to CAI common stockholders | |||||||||
Net income from continuing operations |
$ |
32,470 |
|
$ |
10,462 |
|
|||
Net income (loss) from discontinued operations |
|
1,063 |
|
|
(13,999 |
) |
|||
Net income (loss) attributable to CAI common stockholders |
$ |
33,533 |
|
$ |
(3,537 |
) |
|||
Net income (loss) per share attributable to | |||||||||
CAI common stockholders | |||||||||
Basic | |||||||||
Continuing operations |
$ |
1.88 |
|
$ |
0.60 |
|
|||
Discontinued operations |
|
0.06 |
|
|
(0.80 |
) |
|||
Total basic |
$ |
1.94 |
|
$ |
(0.20 |
) |
|||
Diluted | |||||||||
Continuing operations |
$ |
1.85 |
|
$ |
0.59 |
|
|||
Discontinued operations |
|
0.06 |
|
|
(0.79 |
) |
|||
Total diluted |
$ |
1.91 |
|
$ |
(0.20 |
) |
|||
Weighted average shares outstanding | |||||||||
Basic |
|
17,271 |
|
|
17,433 |
|
|||
Diluted |
|
17,518 |
|
|
17,715 |
|
Consolidated Statements of Cash Flows | ||||||||
(In thousands, except per share data) | ||||||||
(UNAUDITED) | ||||||||
Three Months Ended |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities | ||||||||
Net income (loss) |
$ |
35,740 |
|
$ |
(1,330 |
) |
||
Income (loss) from discontinued operations, net of income taxes |
|
1,063 |
|
|
(13,999 |
) |
||
Income from continuing operations |
|
34,677 |
|
|
12,669 |
|
||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ||||||||
Depreciation |
|
28,766 |
|
|
27,259 |
|
||
Amortization of debt issuance costs |
|
815 |
|
|
893 |
|
||
Stock-based compensation expense |
|
540 |
|
|
725 |
|
||
Unrealized loss on foreign exchange |
|
400 |
|
|
220 |
|
||
Gain on sale of rental equipment |
|
(6,743 |
) |
|
(1,647 |
) |
||
Deferred income taxes |
|
(940 |
) |
|
(3,504 |
) |
||
Bad debt recovery |
|
(30 |
) |
|
(1,287 |
) |
||
Changes in other operating assets and liabilities: | ||||||||
Accounts receivable |
|
488 |
|
|
3,849 |
|
||
Prepaid expenses and other assets |
|
1,218 |
|
|
723 |
|
||
Net investment in finance leases |
|
21,605 |
|
|
17,102 |
|
||
Accounts payable, accrued expenses and other liabilities |
|
(2,823 |
) |
|
130 |
|
||
Unearned revenue |
|
(7 |
) |
|
(591 |
) |
||
Net cash provided by operating activities of continuing operations |
|
77,966 |
|
|
56,541 |
|
||
Net cash (used in) provided by operating activities of discontinued operations |
|
(2,177 |
) |
|
3,584 |
|
||
Net cash provided by operating activities |
|
75,789 |
|
|
60,125 |
|
||
Cash flows from investing activities | ||||||||
Purchase of rental equipment |
|
(171,625 |
) |
|
(27,500 |
) |
||
Purchase of financing receivable |
|
(5,174 |
) |
|
- |
|
||
Proceeds from sale of rental equipment |
|
28,783 |
|
|
24,534 |
|
||
Receipt of principal payments from financing receivable |
|
2,645 |
|
|
325 |
|
||
Purchase of furniture, fixtures and equipment |
|
(22 |
) |
|
(310 |
) |
||
Net cash used in investing activities of continuing operations |
|
(145,393 |
) |
|
(2,951 |
) |
||
Net cash provided by investing activities of discontinued operations |
|
1,285 |
|
|
42 |
|
||
Net cash used in investing activities |
|
(144,108 |
) |
|
(2,909 |
) |
||
Cash flows from financing activities | ||||||||
Proceeds from debt |
|
141,000 |
|
|
110,000 |
|
||
Principal payments on debt |
|
(59,887 |
) |
|
(102,681 |
) |
||
Repurchase of common stock |
|
(12,788 |
) |
|
- |
|
||
Dividends paid to common stockholders |
|
(5,192 |
) |
|
- |
|
||
Dividends paid to preferred stockholders |
|
(2,207 |
) |
|
(2,207 |
) |
||
Exercise of stock options |
|
1,499 |
|
|
113 |
|
||
Net cash provided by financing activities of continuing operations |
|
62,425 |
|
|
5,225 |
|
||
Net cash used in financing activities of discontinued operations |
|
- |
|
|
(1,061 |
) |
||
Net cash provided by financing activities |
|
62,425 |
|
|
4,164 |
|
||
Effect on cash of foreign currency translation |
|
(8 |
) |
|
(77 |
) |
||
Net (decrease) increase in cash and cash equivalents |
|
(5,902 |
) |
|
61,303 |
|
||
Cash and restricted cash at beginning of the period |
|
66,502 |
|
|
73,239 |
|
||
Cash and restricted cash at end of the period |
$ |
60,600 |
|
$ |
134,542 |
|
Fleet Data | ||||||||
(UNAUDITED) | ||||||||
As of |
||||||||
2021 |
2020 |
|||||||
Owned container fleet in TEUs |
1,714,552 |
|
1,590,880 |
|
||||
Managed container fleet in TEUs |
55,226 |
|
66,721 |
|
||||
Total container fleet in TEUs |
1,769,778 |
|
1,657,601 |
|
||||
Owned container fleet in CEUs |
1,767,305 |
|
1,622,354 |
|
||||
Managed container fleet in CEUs |
70,255 |
|
82,705 |
|
||||
Total container fleet in CEUs |
1,837,560 |
|
1,705,059 |
|
||||
Three Months Ended | ||||||||
2021 |
2020 |
|||||||
Average Utilization | ||||||||
Container fleet utilization in CEUs |
99.6 |
% |
98.2 |
% |
||||
Owned container fleet utilization in CEUs |
99.7 |
% |
98.4 |
% |
||||
As of |
||||||||
2021 |
2020 |
|||||||
Period Ending Utilization |
|
|||||||
Container fleet utilization in CEUs |
99.7 |
% |
98.2 |
% |
||||
Owned container fleet utilization in CEUs |
99.7 |
% |
98.3 |
% |
||||
Utilization of containers is computed by dividing the total units on lease in CEUs (cost equivalent units), by the total units in our fleet in CEUs. The total container fleet excludes new units not yet leased and off-hire units designated for sale. | ||||||||
CEU is a ratio used to convert the actual number of containers in our fleet to a figure based on the relative purchase prices of our various equipment types to that of a standard 20 foot dry van container. For example, the CEU ratio for a standard 40 foot dry van container is 1.6, and a 40 foot high cube container is 1.7. |
Reconciliation of GAAP Amounts to Non-GAAP Amounts | |||||||||||||
(In thousands, except per share data) | |||||||||||||
(UNAUDITED) | |||||||||||||
Three Months Ended | |||||||||||||
2021 |
2020 |
2020 |
|||||||||||
Amounts attributable to CAI common stockholders | |||||||||||||
Net income from continuing operations |
$ |
32,470 |
|
$ |
32,511 |
|
$ |
10,462 |
|
||||
Write-off of debt issuance costs |
|
- |
|
|
2,297 |
|
|
- |
|
||||
Revaluation of deferred tax liability as a result of a change in future state | |||||||||||||
apportionment caused by the sale of the logistics and rail businesses |
|
- |
|
|
(3,186 |
) |
|
- |
|
||||
Adjusted net income from continuing operations |
$ |
32,470 |
|
$ |
31,622 |
|
$ |
10,462 |
|
||||
Diluted net income per share from continuing operations |
$ |
1.85 |
|
$ |
1.81 |
|
$ |
0.59 |
|
||||
Diluted adjusted net income per share from continuing operations |
$ |
1.85 |
|
$ |
1.76 |
|
$ |
0.59 |
|
||||
Weighted average diluted common shares outstanding |
|
17,518 |
|
|
17,949 |
|
|
17,715 |
|
||||
Calculation of Return on Equity | |||||||||||||
(In thousands) | |||||||||||||
(UNAUDITED) | |||||||||||||
Three Months Ended | |||||||||||||
2021 |
2020 |
2020 |
|||||||||||
Adjusted net income from continuing operations |
$ |
32,470 |
|
$ |
31,622 |
|
$ |
10,462 |
|
||||
Annualized adjusted net income from continuing operations |
|
129,882 |
|
|
126,488 |
|
|
41,848 |
|
||||
Average shareholders' equity 1 |
$ |
610,359 |
|
$ |
596,770 |
|
$ |
587,829 |
|
||||
Return on equity |
|
21.3 |
% |
|
21.2 |
% |
|
7.1 |
% |
||||
1 Average shareholders' equity was calculated using the quarter's beginning and ending shareholders' equity, excluding preferred stock. |
Conference Call
A conference call to discuss the financial results for the first quarter of 2021 will be held on
Earnings Presentation
A presentation summarizing our first quarter 2021 results is available on the “Investors” section of our website, www.capps.com.
Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, and includes net income and earnings per share adjusted to reflect the impact of a non-recurring write-off of debt issuance costs and a non-recurring revaluation of deferred tax liability. This press release also refers to return on equity, which is calculated using the non-GAAP financial measure, adjusted net income. These measures are not in accordance with, or an alternative for, generally accepted accounting principles, or GAAP, and may be different from non-GAAP financial measures used by other companies. We believe the presentation of non-GAAP financial measures provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when GAAP financial measures are viewed in conjunction with non-GAAP financial measures, investors are provided with a more meaningful understanding of our ongoing operating performance. Management utilizes return on equity in evaluating how much profit the Company generates on the shareholders’ equity in the Company and believes it is useful for comparing the profitability of companies in the same industry. Non-GAAP financial measures are not intended to be considered in isolation or as a substitute for GAAP financial measures. To the extent this release contains historical non-GAAP financial measures, we have also provided a reconciliation to the corresponding GAAP financial measures for comparative purposes.
About
CAI is one of the world’s leading transportation finance companies. As of
Forward-Looking Statements
This press release contains forward-looking statements regarding future events and the future performance of CAI, including but not limited to: management’s business outlook for the container leasing business, management’s decision to divest of CAI’s non-core businesses and management's outlook for growth of CAI’s leasing investments. These statements and others herein are forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, 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, expected growth of international trade, 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, the ability of CAI to convert letters of intent with its customers to binding contracts, potential to sell CAI’s securities to the public and others.
CAI refers you to the documents that it has filed with the
View source version on businesswire.com: https://www.businesswire.com/news/home/20210429006069/en/
(415) 788-0100
dmorris@capps.com
Source: