WLSC Williams Scotsman Intl (MM)

Williams Scotsman International, Inc. (NASDAQ:WLSC), a leading provider of modular space solutions, reported today its financial results for the third quarter of 2006. Revenues for the third quarter were $187.6 million, a 15% increase from $163.5 million in the comparable period of 2005. Gross profit was $74.4 million, a 34% increase as compared to $55.6 million for the comparable prior year quarter. EBITDA for the current quarter was $59.1 million, which was up 36% from $43.6 million in the comparable period of 2005. The Company reported net income for the quarter ended September 30, 2006 of $16.2 million or $0.37 per diluted share as compared to a net loss for the quarter ended September 30, 2005 of ($14.7) million or ($0.59) per diluted share. Net income for the third quarter of 2006 includes a $3.0 million income tax benefit resulting from a reduction of the Company�s tax valuation allowance related to net operating loss carryforwards as a result of increases in estimates of taxable income, as well as the decrease in income tax expense during the third quarter of 2006, from reductions to enacted Canadian income tax rates. During the third quarter of 2005, the Company recorded a loss on the early extinguishment of debt of $25.5 million resulting from the write-off of deferred financing and other costs associated with our refinancing activities during 2005, a $2.4 million non-cash stock compensation charge related to the Company�s initial public offering, a $1.0 million charge for the estimated damage to the Company�s assets related to hurricanes occurring during the quarter offset by recoveries from prior period storms. The effect of these charges was a reduction to net income of $17.6 million (net of related tax benefit of $11.3 million) or $0.71 per share. Net income for the three months ended September 30, 2006 and September 30, 2005 excluding the items discussed above was $13.2 million or $0.30 per diluted share and $2.9 million or $0.12 per diluted share, respectively. The effects of these adjustments for the three months ended are summarized as follows: (in millions, except per share data) September 30, 2006 September 30, 2005 Net income Diluted EPS Net income Diluted EPS � Net income (loss), as reported $ 16.2� $ 0.37� $ (14.7) $ (0.59) � Loss on early extinguishment of debt, net of tax �� �� 15.5� 0.63� Non-cash stock compensation charge related to initial public offering, net of tax �� �� 1.5� 0.06� Hurricane-related charge, net of tax �� �� 0.6� 0.02� Effect of changes to income taxes as a result of change in valuation allowance and change in enacted Canadian tax rate (3.0) (0.07) �� �� � Net income, excluding adjustments $ 13.2� $ 0.30� $ 2.9� $ 0.12� Gerry Holthaus, Chairman, President and CEO, commented, �We produced another outstanding quarter of financial results. We experienced a 19% improvement in leasing revenue for the third quarter of 2006 as compared to 2005 which was driven by our North American activities. In North America, overall utilization of 82% in the third quarter of 2006 was equal to the third quarter of 2005; however, our average rental rates increased from $264 to $291, and average units on rent increased 3,100 units for the quarter as compared to the prior year quarter. Utilization of our modular equipment increased from 82% to 84%, while the average rental rate increased from $309 to $343 for the third quarter of 2006 as compared to the prior year quarter. Leasing gross margins were 55% during the quarter as compared to 51% in the third quarter of 2005. Sales of new units and rental equipment increased by 14% as compared to the prior year quarter as a result of strong unit sales in the central southwest and Canadian regions of the Company. Delivery and installation and other revenue again showed positive results, consistent with the growth we experienced in our lease and sale business. �As we reported previously, we acquired Wiron Construcciones Modulares, S.A. (Wiron), a Spanish company, on August 18, 2006. While the impact of Wiron to our net income for the third quarter ended September 30, 2006 was not material, we are continuing with operational and financial initiatives to assimilate Wiron into the Company. We have been very pleased with our efforts to date. �We are making excellent progress in achieving our goals for 2006 and look forward to continued growth for Williams Scotsman.� Nine Months ended September�30, 2006 Results Revenues for the nine months ended September�30, 2006 were $511.7 million, a 21% increase from $424.6 million in the comparable period of 2005. Gross profit was $207.6 million, a 32% increase as compared to $157.5 million for the prior year period. EBITDA was $167.1 million for the nine months ended September�30, 2006, which was up 33% from $125.2 million in the comparable period of 2005. The Company reported net income for the nine months ended September�30, 2006 of $38.2 million or $0.90 per diluted share as compared to net loss of ($18.2) million or ($0.76) per diluted share for the nine months ended September 30, 2005. Net income for the nine months ended September 30, 2006, includes the impact of favorable tax adjustments of $3.0 million discussed above. During the nine months ended September 30, 2005, the Company recorded a loss on early extinguishment of debt of $30.7 million, a $2.4 million non-cash stock compensation charge related to the Company�s initial public offering, and a $1.0 million charge for estimated damage to the Company�s assets related to hurricanes occurring during the quarter, offset by recoveries from prior period storms as described above. The effect of these charges was a reduction of net income of $20.7 million (net of related tax benefit of $13.4 million) or $0.86 per share. Net income for the nine months ended September 30, 2006 and September 30, 2005 excluding these items was $35.2 million or $0.83 per diluted share and $2.6 million or $0.11 per diluted share, respectively. The effects of these adjustments for the nine months ended are summarized as follows: (in millions, except per share data) September 30, 2006 September 30, 2005 Net income Diluted EPS Net income Diluted EPS � Net income (loss), as reported $ 38.2� $ 0.90� $ (18.2) $ (0.76) � Loss on early extinguishment of debt, net of tax �� �� 18.7� 0.78� Non-cash stock compensation charge related to initial public offering, net of tax �� �� 1.5� 0.06� Hurricane-related charge, net of tax �� �� 0.6� 0.03� Effect of changes to income taxes as a result of change in valuation allowance and change in enacted Canadian tax rate (3.0) (0.07) �� �� � Net income, excluding adjustments $ 35.2� $ 0.83� $ 2.6� $ 0.11� Business Outlook The following statements of anticipated results are based on current expectations. These statements are forward-looking, and actual results may differ materially. The Company estimates the following performance measures for the fourth quarter and year ending December 31, 2006: (in millions, except per share data) � Quarter Ended Year Ended 31-Dec-06 31-Dec-06 Low High Low High Range Range � Operating income $ 33.5� $ 35.5� $ 144� $ 146� � Depreciation and amortization 20.5� 20.5� 77� 77� � Net income 9� 10� 47.2� 48.2� � Earnings per share - diluted $ 0.2� $ 0.23� $ 1.1� $ 1.13� The Business Outlook published in this press release reflects only the Company's current best estimate and the Company assumes no obligation to update the information contained in this press release, including the Business Outlook, at any time prior to its next earnings release. Williams Scotsman International, Inc. has scheduled a conference call for November 1, 2006 at 10:00 AM Eastern Time to discuss its third quarter results. To participate in the conference call, dial 888-433-1674 for domestic (212-748-2817 for international) and ask to be placed into the Williams Scotsman call. To listen to a live call, go to www.willscot.com and click on the Investor Relations section. Please go to the website 15 minutes early to download and install any necessary audio software. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until 11:59 PM on November 15, 2006. To access the replay, domestic callers can dial 800-633-8284 and enter access code 21306720 (international callers can dial 402-977-9140). About Williams Scotsman International, Inc. Williams Scotsman International, Inc., headquartered in Baltimore, Maryland, through its subsidiaries, is a leading provider of mobile and modular space solutions for the construction, education, commercial, healthcare and government markets. The company serves over 25,000 customers, operating a fleet of over 115,000 modular space and storage units that are leased through a network of 100 locations throughout North America and Spain. Williams Scotsman provides delivery, installation, and other services, and sells new and used mobile office products. Williams Scotsman also manages large modular building projects from concept to completion. Williams Scotsman is a publicly traded company (NASDAQ:WLSC) with operations in the United States, Canada, Mexico, and Spain. All statements other than statements of historical fact included in this press release are forward-looking statements and involve expectations, beliefs, plans, intentions or strategies regarding the future. Although the company believes that the expectations reflected in these forward-looking statements are reasonable, it assumes no responsibility for the accuracy and completeness of these forward-looking statements and gives no assurance that these expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the company's expectations are disclosed under "Risk Factors" and elsewhere in the company's 10-K, 10-Q and other SEC filings, including, but not limited to, substantial leverage and its ability to service debt, changing market trends in its industry, general economic and business conditions including a prolonged or substantial recession, its ability to finance fleet and branch expansion and to locate and finance acquisitions, its ability to implement its business and growth strategy and maintain and enhance its competitive strengths, intense industry competition, availability of key personnel and changes in, or the failure to comply with, government regulations. The company assumes no obligation to update any forward-looking statement. Certain prior year amounts have been reclassified to conform to current year presentation. Williams Scotsman International, Inc. Consolidated Balance Sheets (dollars in thousands) � � September 30, December 31, 2006� 2005� (Unaudited) Assets � Cash $ 1,941� $ 469� Trade accounts receivable, net 119,481� 94,661� Prepaid expenses and other current assets 63,576� 46,630� Rental equipment, net 1,053,386� 944,629� Property and equipment, net 90,923� 81,177� Deferred financing costs, net 20,081� 18,042� Goodwill and other intangible assets 216,050� 173,535� Other assets, net 22,904� 21,477� Total assets $ 1,588,342� $ 1,380,620� � Liabilities and stockholders� equity � Accounts payable $ 57,077� $ 60,685� Accrued expenses 52,178� 27,862� Accrued interest 23,724� 13,245� Rents billed in advance 26,167� 23,621� Revolving credit facility 281,710� 364,150� Long-term debt, net 627,891� 505,296� Deferred income taxes 160,156� 141,020� Total liabilities 1,228,903� 1,135,879� Stockholders� equity: Common stock 556� 519� Additional paid-in capital 543,105� 471,406� Retained earnings 90,012� 51,846� Accumulated other comprehensive income 21,704� 16,908� 655,377� 540,679� Less treasury stock (295,938) (295,938) Total stockholders� equity 359,439� 244,741� Total liabilities and stockholders� equity $ 1,588,342� $ 1,380,620� Williams Scotsman International, Inc. Consolidated Statements of Operations (unaudited) � � Quarter ended Nine months ended September 30, September 30, 2006� 2005� 2006� 2005� (In thousands except share and per share amounts) Revenues Leasing $ 74,718� $ 62,556� $ 213,776� $ 181,636� Sales: New units 40,914� 36,921� 107,655� 83,458� Rental equipment 12,959� 10,260� 38,034� 25,825� Delivery and installation 45,488� 41,756� 114,428� 101,355� Other 13,516� 11,983� 37,783� 32,318� Total revenues 187,595� 163,476� 511,676� 424,592� � Costs of sales and services Leasing: Depreciation and amortization 14,998� 13,068� 43,224� 38,435� Other direct leasing costs 18,566� 17,533� 49,693� 44,501� Sales: New units 31,200� 30,571� 83,841� 69,115� Rental equipment 9,365� 7,898� 27,430� 20,069� Delivery and installation 35,753� 34,699� 91,841� 86,245� Other 3,339� 4,150� 8,001� 8,713� Total costs of sales and services 113,221� 107,919� 304,030� 267,078� � Gross profit 74,374� 55,557� 207,646� 157,514� � Selling, general and administrative expenses (1) 30,312� 25,063� 83,820� 70,796� Other depreciation and amortization 4,736� 4,241� 13,354� 12,183� Operating income 39,326� 26,253� 110,472� 74,535� � Interest, including amortization of deferred financing costs 18,269� 24,496� 53,613� 73,755� Loss on early extinguishment of debt 90� 25,496� 90� 30,678� � Income (loss) before income taxes 20,967� (23,739) 56,769� (29,898) Income tax expense (benefit) 4,816� (9,071) 18,603� (11,726) Net income (loss) $ 16,151� $ (14,668) $ 38,166� $ (18,172) � Earnings (loss) per common share $ 0.38� $ (0.59) $ 0.92� $ (0.76) Earnings (loss) per common share, assuming dilution $ 0.37� $ (0.59) $ 0.90� $ (0.76) � Weighted average common shares outstanding � basic � 42,918,245� � 24,877,087� � 41,268,754� � 24,003,061� Weighted average common shares outstanding � diluted (2) � 43,608,509� � 24,877,087� � 42,281,343� � 24,003,061� (1) Includes non-cash stock compensation expense of $0.8 million and $2.6 million for the three months ended September 30, 2006 and 2005, respectively and $1.5 million and $3.1 million for the nine months ended September 30, 2006 and 2005, respectively. � (2) The effect of share based payments of 1,270,056 and 1,233,417 were excluded from the calculation for the three and nine months ended September 30, 2005, respectively because the effect was antidilutive. Williams Scotsman International, Inc. Summary of Selected Consolidated Financial Information (unaudited) (Dollars in thousands) � � Quarter Ended September 30, Nine Months Ended September 30, Operations Data (in thousands): 2006� 2005� 2006� 2005� � Gross profit Leasing $ 41,154� $ 31,955� $ 120,858� $ 98,700� Sales: New units 9,714� 6,350� 23,815� 14,343� Rental equipment 3,594� 2,362� 10,604� 5,756� Delivery and installation 9,735� 7,057� 22,587� 15,110� Other 10,177� 7,833� 29,782� 23,605� Total gross profit $ 74,374� $ 55,557� $ 207,646� $ 157,514� North America Rental Fleet Data: Quarter Ended September 30, 2006 Quarter Ended September 30, 2005 Modular Storage Total Modular Storage Total � Lease fleet units, as of end of period 77,800� 23,700� 101,500� 76,900� 21,400� 98,300� Lease fleet units, average for period 77,700� 23,200� 100,900� 76,800� 20,900� 97,700� Utilization rate based upon units, average for period 84% 77% 82% 82% 80% 82% Monthly rental rate, average over period $ 343� $ 99� $ 291� $ 309� $ 94� $ 264� � � Nine Months Ended September 30, 2006 Nine Months Ended September 30, 2005 Modular Storage Total Modular Storage Total � Lease fleet units, as of end of period 77,800� 23,700� 101,500� 76,900� 21,400� 98,300� Lease fleet units, average for period 77,400� 22,400� 99,800� 76,300� 20,300� 96,600� Utilization rate based upon units, average for period 83% 78% 82% 81% 81% 81% Monthly rental rate, average over period $ 337� $ 98� $ 287� $ 305� $ 93� $ 260� Quarter Ended September 30, Nine Months Ended September 30, Capital Expenditure Data (in thousands): 2006� 2005� 2006� 2005� Lease fleet, net (a) $ 32,744� $ 31,438� $ 86,563� $ 81,238� Non-lease fleet 3,319� 3,554� 9,558� 8,836� Acquisitions 52,388� 14� 57,511� 4,630� Other Financial Data (at period end): September 30, 2006 Leverage Ratio (b) 4.02� Leverage Ratio (c) 19.8� Borrowing base availability under revolving credit facility (d) (in thousands) $ 197,228� (a) Capital expenditures are shown net of used units sold. � (b) Calculated as total debt divided by Consolidated EBITDA, see (f) below. � (c) Calculated as total debt divided by net income, the most comparable GAAP measure. � (d) Under the Company's Amended and Restated Credit Agreement, the Company is not subject to financial covenants as long as its excess availability under the revolving credit facility remains above $75 million. As of September 30, 2006, the Company's excess availability under the revolver was $197.2 million or $122.2 million in excess of the $75 million. Reconciliation of EBITDA for the quarter and nine months ended September 30, 2006 and 2005 to net income � the most comparable GAAP measure: � � Quarter Ended September 30, Nine Months Ended September 30, 2006� 2005� 2006� 2005� (in thousands) EBITDA (e) $ 59,060� $ 43,562� $ 167,050� $ 125,153� Less: Interest expense 18,269� 24,496� 53,613� 73,755� Loss on early extinguishment of debt 90� 25,496� 90� 30,678� Depreciation and amortization 19,734� 17,309� 56,578� 50,618� Income tax provision (benefit) 4,816� (9,071) 18,603� (11,726) � Net income (loss) $ 16,151� $ (14,668) $ 38,166� $ (18,172) (e) The Company defines EBITDA as earnings before deducting interest, loss on extinguishment of debt, income taxes, depreciation and amortization. Reconciliation of Consolidated EBITDA, as defined below, to net income � the most comparable GAAP measure as of September 30, 2006 (in thousands): � � Consolidated EBITDA � trailing 12 months (f) $ 226,159� Less: Interest expense 71,061� Depreciation and amortization 75,192� Income tax provision 23,792� Gain on sale of equipment (224) Non-cash stock compensation expense 2,161� Loss on early extinguishment of debt 90� Pro forma EBITDA impact of acquisitions 8,073� Net income, trailing 12 months $ 46,014� (f) Consolidated EBITDA is defined as the Company's net income plus interest, loss on extinguishment of debt, taxes, depreciation and amortization expenses, and excludes (gains) losses on sales of fixed assets and any other non-cash items, and non-cash stock compensation charges. Consolidated EBITDA also includes an adjustment to reflect the estimated full year EBITDA contribution of acquisitions completed during the period. Consolidated EBITDA should not be considered in isolation or as a substitute to cash flow from operating activities, net income or other measures of performance prepared in accordance with generally accepted accounting principles or as a measure of the Company's profitability or liquidity. The Company is providing Consolidated EBITDA as supplemental information so that investors can evaluate the Company's performance and debt position. The Company also utilizes Consolidated EBITDA to assess compliance with its financial covenants under the Amended and Restated Credit Facility; however, in this case, Consolidated EBITDA would be based solely on the Consolidated EBITDA of the Company's wholly owned subsidiary, Williams Scotsman Inc. and Subsidiaries. Williams Scotsman International, Inc. (NASDAQ:WLSC), a leading provider of modular space solutions, reported today its financial results for the third quarter of 2006. Revenues for the third quarter were $187.6 million, a 15% increase from $163.5 million in the comparable period of 2005. Gross profit was $74.4 million, a 34% increase as compared to $55.6 million for the comparable prior year quarter. EBITDA for the current quarter was $59.1 million, which was up 36% from $43.6 million in the comparable period of 2005. The Company reported net income for the quarter ended September 30, 2006 of $16.2 million or $0.37 per diluted share as compared to a net loss for the quarter ended September 30, 2005 of ($14.7) million or ($0.59) per diluted share. Net income for the third quarter of 2006 includes a $3.0 million income tax benefit resulting from a reduction of the Company's tax valuation allowance related to net operating loss carryforwards as a result of increases in estimates of taxable income, as well as the decrease in income tax expense during the third quarter of 2006, from reductions to enacted Canadian income tax rates. During the third quarter of 2005, the Company recorded a loss on the early extinguishment of debt of $25.5 million resulting from the write-off of deferred financing and other costs associated with our refinancing activities during 2005, a $2.4 million non-cash stock compensation charge related to the Company's initial public offering, a $1.0 million charge for the estimated damage to the Company's assets related to hurricanes occurring during the quarter offset by recoveries from prior period storms. The effect of these charges was a reduction to net income of $17.6 million (net of related tax benefit of $11.3 million) or $0.71 per share. Net income for the three months ended September 30, 2006 and September 30, 2005 excluding the items discussed above was $13.2 million or $0.30 per diluted share and $2.9 million or $0.12 per diluted share, respectively. The effects of these adjustments for the three months ended are summarized as follows: -0- *T (in millions, except per share data) September 30, 2006 September 30, 2005 ---------------------- ---------------------- Net income Diluted EPS Net income Diluted EPS ---------- ----------- ---------- ----------- Net income (loss), as reported $ 16.2 $ 0.37 $ (14.7) $ (0.59) Loss on early extinguishment of debt, net of tax -- -- 15.5 0.63 Non-cash stock compensation charge related to initial public offering, net of tax -- -- 1.5 0.06 Hurricane-related charge, net of tax -- -- 0.6 0.02 Effect of changes to income taxes as a result of change in valuation allowance and change in enacted Canadian tax rate (3.0) (0.07) -- -- ---------- ----------- ---------- ----------- Net income, excluding adjustments $ 13.2 $ 0.30 $ 2.9 $ 0.12 ========== =========== ========== =========== *T Gerry Holthaus, Chairman, President and CEO, commented, "We produced another outstanding quarter of financial results. We experienced a 19% improvement in leasing revenue for the third quarter of 2006 as compared to 2005 which was driven by our North American activities. In North America, overall utilization of 82% in the third quarter of 2006 was equal to the third quarter of 2005; however, our average rental rates increased from $264 to $291, and average units on rent increased 3,100 units for the quarter as compared to the prior year quarter. Utilization of our modular equipment increased from 82% to 84%, while the average rental rate increased from $309 to $343 for the third quarter of 2006 as compared to the prior year quarter. Leasing gross margins were 55% during the quarter as compared to 51% in the third quarter of 2005. Sales of new units and rental equipment increased by 14% as compared to the prior year quarter as a result of strong unit sales in the central southwest and Canadian regions of the Company. Delivery and installation and other revenue again showed positive results, consistent with the growth we experienced in our lease and sale business. "As we reported previously, we acquired Wiron Construcciones Modulares, S.A. (Wiron), a Spanish company, on August 18, 2006. While the impact of Wiron to our net income for the third quarter ended September 30, 2006 was not material, we are continuing with operational and financial initiatives to assimilate Wiron into the Company. We have been very pleased with our efforts to date. "We are making excellent progress in achieving our goals for 2006 and look forward to continued growth for Williams Scotsman." Nine Months ended September 30, 2006 Results Revenues for the nine months ended September 30, 2006 were $511.7 million, a 21% increase from $424.6 million in the comparable period of 2005. Gross profit was $207.6 million, a 32% increase as compared to $157.5 million for the prior year period. EBITDA was $167.1 million for the nine months ended September 30, 2006, which was up 33% from $125.2 million in the comparable period of 2005. The Company reported net income for the nine months ended September 30, 2006 of $38.2 million or $0.90 per diluted share as compared to net loss of ($18.2) million or ($0.76) per diluted share for the nine months ended September 30, 2005. Net income for the nine months ended September 30, 2006, includes the impact of favorable tax adjustments of $3.0 million discussed above. During the nine months ended September 30, 2005, the Company recorded a loss on early extinguishment of debt of $30.7 million, a $2.4 million non-cash stock compensation charge related to the Company's initial public offering, and a $1.0 million charge for estimated damage to the Company's assets related to hurricanes occurring during the quarter, offset by recoveries from prior period storms as described above. The effect of these charges was a reduction of net income of $20.7 million (net of related tax benefit of $13.4 million) or $0.86 per share. Net income for the nine months ended September 30, 2006 and September 30, 2005 excluding these items was $35.2 million or $0.83 per diluted share and $2.6 million or $0.11 per diluted share, respectively. The effects of these adjustments for the nine months ended are summarized as follows: -0- *T (in millions, except per share data) September 30, 2006 September 30, 2005 Net income Diluted EPS Net income Diluted EPS ---------- ----------- ---------- ----------- Net income (loss), as reported $ 38.2 $ 0.90 $ (18.2) $ (0.76) Loss on early extinguishment of debt, net of tax -- -- 18.7 0.78 Non-cash stock compensation charge related to initial public offering, net of tax -- -- 1.5 0.06 Hurricane-related charge, net of tax -- -- 0.6 0.03 Effect of changes to income taxes as a result of change in valuation allowance and change in enacted Canadian tax rate (3.0) (0.07) -- -- ---------- ----------- ---------- ----------- Net income, excluding adjustments $ 35.2 $ 0.83 $ 2.6 $ 0.11 ========== =========== ========== =========== *T Business Outlook The following statements of anticipated results are based on current expectations. These statements are forward-looking, and actual results may differ materially. The Company estimates the following performance measures for the fourth quarter and year ending December 31, 2006: -0- *T (in millions, except per share data) Quarter Ended Year Ended 31-Dec-06 31-Dec-06 ------------------- ------------------- Low High Low High --------- --------- --------- --------- Range Range Operating income $ 33.5 $ 35.5 $ 144 $ 146 Depreciation and amortization 20.5 20.5 77 77 Net income 9 10 47.2 48.2 Earnings per share - diluted $ 0.2 $ 0.23 $ 1.1 $ 1.13 *T The Business Outlook published in this press release reflects only the Company's current best estimate and the Company assumes no obligation to update the information contained in this press release, including the Business Outlook, at any time prior to its next earnings release. Williams Scotsman International, Inc. has scheduled a conference call for November 1, 2006 at 10:00 AM Eastern Time to discuss its third quarter results. To participate in the conference call, dial 888-433-1674 for domestic (212-748-2817 for international) and ask to be placed into the Williams Scotsman call. To listen to a live call, go to www.willscot.com and click on the Investor Relations section. Please go to the website 15 minutes early to download and install any necessary audio software. A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until 11:59 PM on November 15, 2006. To access the replay, domestic callers can dial 800-633-8284 and enter access code 21306720 (international callers can dial 402-977-9140). About Williams Scotsman International, Inc. Williams Scotsman International, Inc., headquartered in Baltimore, Maryland, through its subsidiaries, is a leading provider of mobile and modular space solutions for the construction, education, commercial, healthcare and government markets. The company serves over 25,000 customers, operating a fleet of over 115,000 modular space and storage units that are leased through a network of 100 locations throughout North America and Spain. Williams Scotsman provides delivery, installation, and other services, and sells new and used mobile office products. Williams Scotsman also manages large modular building projects from concept to completion. Williams Scotsman is a publicly traded company (NASDAQ:WLSC) with operations in the United States, Canada, Mexico, and Spain. All statements other than statements of historical fact included in this press release are forward-looking statements and involve expectations, beliefs, plans, intentions or strategies regarding the future. Although the company believes that the expectations reflected in these forward-looking statements are reasonable, it assumes no responsibility for the accuracy and completeness of these forward-looking statements and gives no assurance that these expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the company's expectations are disclosed under "Risk Factors" and elsewhere in the company's 10-K, 10-Q and other SEC filings, including, but not limited to, substantial leverage and its ability to service debt, changing market trends in its industry, general economic and business conditions including a prolonged or substantial recession, its ability to finance fleet and branch expansion and to locate and finance acquisitions, its ability to implement its business and growth strategy and maintain and enhance its competitive strengths, intense industry competition, availability of key personnel and changes in, or the failure to comply with, government regulations. The company assumes no obligation to update any forward-looking statement. Certain prior year amounts have been reclassified to conform to current year presentation. -0- *T Williams Scotsman International, Inc. Consolidated Balance Sheets (dollars in thousands) September 30, December 31, 2006 2005 ------------- ------------- (Unaudited) Assets Cash $ 1,941 $ 469 Trade accounts receivable, net 119,481 94,661 Prepaid expenses and other current assets 63,576 46,630 Rental equipment, net 1,053,386 944,629 Property and equipment, net 90,923 81,177 Deferred financing costs, net 20,081 18,042 Goodwill and other intangible assets 216,050 173,535 Other assets, net 22,904 21,477 ------------- ------------- Total assets $ 1,588,342 $ 1,380,620 ============= ============= Liabilities and stockholders' equity Accounts payable $ 57,077 $ 60,685 Accrued expenses 52,178 27,862 Accrued interest 23,724 13,245 Rents billed in advance 26,167 23,621 Revolving credit facility 281,710 364,150 Long-term debt, net 627,891 505,296 Deferred income taxes 160,156 141,020 ------------- ------------- Total liabilities 1,228,903 1,135,879 ------------- ------------- Stockholders' equity: Common stock 556 519 Additional paid-in capital 543,105 471,406 Retained earnings 90,012 51,846 Accumulated other comprehensive income 21,704 16,908 ------------- ------------- 655,377 540,679 Less treasury stock (295,938) (295,938) ------------- ------------- Total stockholders' equity 359,439 244,741 ------------- ------------- Total liabilities and stockholders' equity $ 1,588,342 $ 1,380,620 ============= ============= *T -0- *T Williams Scotsman International, Inc. Consolidated Statements of Operations (unaudited) Quarter ended Nine months ended September 30, September 30, ------------------------- ------------------------- 2006 2005 2006 2005 ------------ ------------ ------------ ------------ (In thousands except share and per share amounts) Revenues Leasing $ 74,718 $ 62,556 $ 213,776 $ 181,636 Sales: New units 40,914 36,921 107,655 83,458 Rental equipment 12,959 10,260 38,034 25,825 Delivery and installation 45,488 41,756 114,428 101,355 Other 13,516 11,983 37,783 32,318 ------------ ------------ ------------ ------------ Total revenues 187,595 163,476 511,676 424,592 ------------ ------------ ------------ ------------ Costs of sales and services Leasing: Depreciation and amortization 14,998 13,068 43,224 38,435 Other direct leasing costs 18,566 17,533 49,693 44,501 Sales: New units 31,200 30,571 83,841 69,115 Rental equipment 9,365 7,898 27,430 20,069 Delivery and installation 35,753 34,699 91,841 86,245 Other 3,339 4,150 8,001 8,713 ------------ ------------ ------------ ------------ Total costs of sales and services 113,221 107,919 304,030 267,078 ------------ ------------ ------------ ------------ Gross profit 74,374 55,557 207,646 157,514 Selling, general and administrative expenses (1) 30,312 25,063 83,820 70,796 Other depreciation and amortization 4,736 4,241 13,354 12,183 ------------ ------------ ------------ ------------ Operating income 39,326 26,253 110,472 74,535 Interest, including amortization of deferred financing costs 18,269 24,496 53,613 73,755 Loss on early extinguishment of debt 90 25,496 90 30,678 ------------ ------------ ------------ ------------ Income (loss) before income taxes 20,967 (23,739) 56,769 (29,898) Income tax expense (benefit) 4,816 (9,071) 18,603 (11,726) ------------ ------------ ------------ ------------ Net income (loss) $ 16,151 $ (14,668) $ 38,166 $ (18,172) ============ ============ ============ ============ Earnings (loss) per common share $ 0.38 $ (0.59) $ 0.92 $ (0.76) ============ ============ ============ ============ Earnings (loss) per common share, assuming dilution $ 0.37 $ (0.59) $ 0.90 $ (0.76) ============ ============ ============ ============ Weighted average common shares outstanding - basic 42,918,245 24,877,087 41,268,754 24,003,061 ============ ============ ============ ============ Weighted average common shares outstanding - diluted (2) 43,608,509 24,877,087 42,281,343 24,003,061 ============ ============ ============ ============ *T -0- *T (1) Includes non-cash stock compensation expense of $0.8 million and $2.6 million for the three months ended September 30, 2006 and 2005, respectively and $1.5 million and $3.1 million for the nine months ended September 30, 2006 and 2005, respectively. (2) The effect of share based payments of 1,270,056 and 1,233,417 were excluded from the calculation for the three and nine months ended September 30, 2005, respectively because the effect was antidilutive. *T -0- *T Williams Scotsman International, Inc. Summary of Selected Consolidated Financial Information (unaudited) (Dollars in thousands) Quarter Ended Nine Months Ended September 30, September 30, ------------------- ------------------- Operations Data (in thousands): 2006 2005 2006 2005 ------------------------------ --------- --------- --------- --------- Gross profit Leasing $ 41,154 $ 31,955 $120,858 $ 98,700 Sales: New units 9,714 6,350 23,815 14,343 Rental equipment 3,594 2,362 10,604 5,756 Delivery and installation 9,735 7,057 22,587 15,110 Other 10,177 7,833 29,782 23,605 --------- --------- --------- --------- Total gross profit $ 74,374 $ 55,557 $207,646 $157,514 ========= ========= ========= ========= *T -0- *T North America Quarter Ended Quarter Ended Rental Fleet September 30, 2006 September 30, 2005 Data: -------------------------- -------------------------- Modular Storage Total Modular Storage Total -------- -------- -------- -------- -------- -------- Lease fleet units, as of end of period 77,800 23,700 101,500 76,900 21,400 98,300 Lease fleet units, average for period 77,700 23,200 100,900 76,800 20,900 97,700 Utilization rate based upon units, average for period 84% 77% 82% 82% 80% 82% Monthly rental rate, average over period $ 343 $ 99 $ 291 $ 309 $ 94 $ 264 Nine Months Ended Nine Months Ended September 30, 2006 September 30, 2005 -------------------------- -------------------------- Modular Storage Total Modular Storage Total -------- -------- -------- -------- -------- -------- Lease fleet units, as of end of period 77,800 23,700 101,500 76,900 21,400 98,300 Lease fleet units, average for period 77,400 22,400 99,800 76,300 20,300 96,600 Utilization rate based upon units, average for period 83% 78% 82% 81% 81% 81% Monthly rental rate, average over period $ 337 $ 98 $ 287 $ 305 $ 93 $ 260 *T -0- *T Quarter Ended Nine Months Ended September 30, September 30, ------------------- ------------------- Capital Expenditure Data (in thousands): 2006 2005 2006 2005 ------------------------------ --------- --------- --------- --------- Lease fleet, net (a) $ 32,744 $ 31,438 $ 86,563 $ 81,238 Non-lease fleet 3,319 3,554 9,558 8,836 Acquisitions 52,388 14 57,511 4,630 *T -0- *T Other Financial Data (at period end): September 30, 2006 ------------------ Leverage Ratio (b) 4.02 Leverage Ratio (c) 19.8 Borrowing base availability under revolving credit facility (d) (in thousands) $ 197,228 *T -0- *T (a) Capital expenditures are shown net of used units sold. (b) Calculated as total debt divided by Consolidated EBITDA, see (f) below. (c) Calculated as total debt divided by net income, the most comparable GAAP measure. (d) Under the Company's Amended and Restated Credit Agreement, the Company is not subject to financial covenants as long as its excess availability under the revolving credit facility remains above $75 million. As of September 30, 2006, the Company's excess availability under the revolver was $197.2 million or $122.2 million in excess of the $75 million. *T -0- *T Reconciliation of EBITDA for the quarter and nine months ended September 30, 2006 and 2005 to net income - the most comparable GAAP measure: Quarter Ended Nine Months Ended September 30, September 30, ------------------- ------------------- 2006 2005 2006 2005 --------- --------- --------- --------- (in thousands) EBITDA (e) $ 59,060 $ 43,562 $167,050 $125,153 Less: Interest expense 18,269 24,496 53,613 73,755 Loss on early extinguishment of debt 90 25,496 90 30,678 Depreciation and amortization 19,734 17,309 56,578 50,618 Income tax provision (benefit) 4,816 (9,071) 18,603 (11,726) --------- --------- --------- --------- Net income (loss) $ 16,151 $(14,668) $ 38,166 $(18,172) ========= ========= ========= ========= *T -0- *T (e) The Company defines EBITDA as earnings before deducting interest, loss on extinguishment of debt, income taxes, depreciation and amortization. *T -0- *T Reconciliation of Consolidated EBITDA, as defined below, to net income - the most comparable GAAP measure as of September 30, 2006 (in thousands): Consolidated EBITDA - trailing 12 months (f) $226,159 Less: Interest expense 71,061 Depreciation and amortization 75,192 Income tax provision 23,792 Gain on sale of equipment (224) Non-cash stock compensation expense 2,161 Loss on early extinguishment of debt 90 Pro forma EBITDA impact of acquisitions 8,073 --------- Net income, trailing 12 months $ 46,014 ========= *T -0- *T (f) Consolidated EBITDA is defined as the Company's net income plus interest, loss on extinguishment of debt, taxes, depreciation and amortization expenses, and excludes (gains) losses on sales of fixed assets and any other non-cash items, and non-cash stock compensation charges. Consolidated EBITDA also includes an adjustment to reflect the estimated full year EBITDA contribution of acquisitions completed during the period. Consolidated EBITDA should not be considered in isolation or as a substitute to cash flow from operating activities, net income or other measures of performance prepared in accordance with generally accepted accounting principles or as a measure of the Company's profitability or liquidity. The Company is providing Consolidated EBITDA as supplemental information so that investors can evaluate the Company's performance and debt position. The Company also utilizes Consolidated EBITDA to assess compliance with its financial covenants under the Amended and Restated Credit Facility; however, in this case, Consolidated EBITDA would be based solely on the Consolidated EBITDA of the Company's wholly owned subsidiary, Williams Scotsman Inc. and Subsidiaries. *T