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McGrath Rentcorp (MGRC)

Founded in 1979, McGrath RentCorp is a diversified business-to-business rental company providing modular buildings, electronic test equipment, portable storage and tank containment solutions across the United States and other select North American regions. The Company's rental operations consist of four divisions: Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs; TRS-RenTelco rents and sells electronic test equipment; Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids; and Mobile Modular Portable Storage provides portable storage rental solutions.

Company profile

Ticker
MGRC
Exchange
Website
CEO
Joseph F. Hanna
Employees
Incorporated
Location
Fiscal year end
SEC CIK
Subsidiaries
Mobile Modular Management Corporation • Enviroplex, Inc. • TRS-RenTelco Inc. • Adler Tank Rentals, LLC • McGrath 180, LLC • McGrath RentCorp Asia PTE. LTD. • TRS-RenTelco India Private Limited ...
IRS number
942579843

MGRC stock data

Calendar

28 Jul 22
19 Aug 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 874K 874K 874K 874K 874K 874K
Cash burn (monthly) 243K 128.17K (no burn) (no burn) (no burn) (no burn)
Cash used (since last report) 408.24K 215.32K n/a n/a n/a n/a
Cash remaining 465.76K 658.68K n/a n/a n/a n/a
Runway (months of cash) 1.9 5.1 n/a n/a n/a n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
2 Jun 22 Dennis P Stradford Common Stock Sell Dispose S No No 83.2 1,000 83.2K 9,200
31 May 22 Tara Wescott Common Stock Payment of exercise Dispose F No No 82.21 331 27.21K 1,476
31 May 22 Tara Wescott Common Stock Option exercise Acquire M No No 0 957 0 1,807
31 May 22 Tara Wescott RSU Common Stock Option exercise Dispose M No No 0 957 0 957
24 May 22 Joseph F Hanna Common Stock Sale back to company Dispose D No No 81.5 10,655 868.38K 131,797
24 May 22 Joseph F Hanna Common Stock Payment of exercise Dispose F No No 81.5 12,959 1.06M 142,452
24 May 22 Joseph F Hanna Common Stock Option exercise Acquire M No No 24.6 35,300 868.38K 155,411
24 May 22 Joseph F Hanna Stock Appreciation Right Common Stock Option exercise Dispose M No No 24.6 35,300 868.38K 0
23 May 22 Elizabeth A Fetter Common Stock Sell Dispose S No No 82.1545 1,400 115.02K 5,100
18 May 22 Joseph F Hanna Common Stock Sale back to company Dispose D No No 83.53 8,836 738.07K 120,111
91.3% owned by funds/institutions
13F holders Current Prev Q Change
Total holders 178 168 +6.0%
Opened positions 35 26 +34.6%
Closed positions 25 26 -3.8%
Increased positions 42 56 -25.0%
Reduced positions 77 63 +22.2%
13F shares Current Prev Q Change
Total value 1.7B 1.89B -9.8%
Total shares 22.26M 22.32M -0.2%
Total puts 0 0
Total calls 6.1K 6.4K -4.7%
Total put/call ratio
Largest owners Shares Value Change
Vanguard 2.53M $191.94M +1.2%
BEN Franklin Resources 2.19M $166.75M -0.2%
Franklin Mutual Advisers 2.15M $172.4M 0.0%
BLK Blackrock 1.6M $121.56M +0.6%
Dimensional Fund Advisors 1.37M $103.87M -0.2%
Victory Capital Management 1.32M $100.5M -2.8%
TROW T. Rowe Price 1.11M $84.7M -10.1%
River Road Asset Management 703.98K $53.5M +4.0%
SAMG Silvercrest Asset Management 662.74K $50.37M -0.2%
Loomis Sayles & Co L P 575.35K $43.73M -0.8%
Largest transactions Shares Bought/sold Change
Snyder Capital Management L P 281.09K +175.61K +166.5%
TROW T. Rowe Price 1.11M -125.08K -10.1%
Millennium Management 235.83K +89.17K +60.8%
Wellington Management 560.09K -85.86K -13.3%
SG Capital Management 81.38K +81.38K NEW
GS Goldman Sachs 53.96K -62.29K -53.6%
Nuveen Asset Management 144.97K -59.83K -29.2%
American Century Companies 176.31K +41.65K +30.9%
RK Capital Management 139.6K +40.5K +40.9%
Driehaus Capital Management 93.48K +38.84K +71.1%

Financial report summary

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Risks
  • Our future operating results may fluctuate, fail to match past performance or fail to meet expectations, which may result in a decrease in our stock price.
  • The impact of COVID-19 on our operations, and the operations of our customers, suppliers and logistics providers, may harm our business.
  • Our ability to retain our executive management and to recruit, retain and motivate key qualified employees is critical to the success of our business.
  • We are subject to information technology system failures, network disruptions and breaches in data security which could subject us to liability, reputational damage or interrupt the operation of our business.
  • Disruptions in our information technology systems or failure to protect these systems against security breaches could adversely affect our business and results of operations. Additionally, if these systems fail, become unavailable for any period of time or are not upgraded, this could limit our ability to effectively monitor and control our operations and adversely affect our operations.
  • If we determine that our goodwill and intangible assets have become impaired, we may incur impairment charges, which would negatively impact our operating results.
  • If we do not effectively manage our credit risk, collect on our accounts receivable or recover our rental equipment from our customers’ sites, it could have a material adverse effect on our operating results.
  • Effective management of our rental assets is vital to our business. If we are not successful in these efforts, it could have a material adverse impact on our results of operations.
  • The nature of our businesses, including the ownership of industrial property, exposes us to the risk of litigation and liability under environmental, health and safety and products liability laws. Violations of environmental or health and safety related laws or associated liability could have a material adverse effect on our business, financial condition and results of operations.
  • Our routine business activities expose us to risk of litigation from employees, vendors and other third parties, which could have a material adverse effect on our results of operations.
  • If we suffer loss to our facilities, equipment or distribution system due to catastrophe, our insurance policies could be inadequate or depleted, our operations could be seriously harmed, which could negatively affect our operating results.
  • Our debt instruments contain covenants that restrict or prohibit our ability to enter into a variety of transactions and may limit our ability to finance future operations or capital needs. If we have an event of default under these instruments, our indebtedness could be accelerated and we may not be able to refinance such indebtedness or make the required accelerated payments.
  • The majority of our indebtedness is subject to variable interest rates, which makes us vulnerable to increases in interest rates, which could negatively affect our net income.
  • Our effective tax rate may change and become less predictable as our business expands, or as a result of federal and state tax law changes, making our future earnings less predictable.
  • Changes in financial accounting standards may cause lower than expected operating results and affect our reported results of operations.
  • Significant reductions of, or delays in, funding to public schools have caused the demand and pricing for our modular classroom units to decline, which has in the past caused, and may cause in the future, a reduction in our revenues and profitability.
  • Public policies that create demand for our products and services may change, resulting in decreased demand for or the pricing of our products and services, which could negatively affect our revenues and operating income.
  • Failure to comply with applicable regulations could harm our business and financial condition, resulting in lower operating results and cash flows.
  • We are subject to laws and regulations governing government contracts. These laws and regulations make these government contracts more favorable to government entities than other third parties and any changes in these laws and regulations, or our failure to comply with these laws and regulations could harm our business.
  • Seasonality of our educational business may have adverse consequences for our business.
  • We face strong competition in our modular building markets and we may not be able to effectively compete.
  • We may not be able to quickly redeploy modular units returning from leases, which could negatively affect our financial performance and our ability to expand, or utilize, our rental fleet.
  • Significant increases in raw material and labor costs could increase our acquisition cost of new modular rental units and repair and maintenance costs of our fleet, which would increase our operating costs and harm our profitability.
  • Failure by third parties to manufacture our products timely or properly may harm our reputation and financial condition.
  • Failure to properly design, manufacture, repair and maintain the modular product may result in impairment charges, potential litigation and reduction of our operating results and cash flows.
  • Our warranty costs may increase and warranty claims could damage our reputation and negatively impact our revenues and operating income.
  • Market risk and cyclical downturns in the industries using test equipment may result in periods of low demand for our product resulting in excess inventory, impairment charges and reduction of our operating results and cash flows.
  • Seasonality of our electronic test equipment business may impact quarterly results.
  • Our rental test equipment may become obsolete or may no longer be supported by a manufacturer, which could result in an impairment charge.
  • If we do not effectively compete in the rental equipment market, our operating results will be materially and adversely affected.
  • If we are not able to obtain equipment at favorable rates, there could be a material adverse effect on our operating results and reputation.
  • Unfavorable currency exchange rates may negatively impact our financial results in U.S. dollar terms.
  • We may be brought into tort or environmental litigation or held responsible for cleanup of spills if the customer fails to perform, or an accident occurs in the use of our rental products, which could materially adversely affect our business, future operating results or financial position.
  • Market risk, commodity price volatility, regulatory changes or interruptions and cyclical downturns in the industries using tanks and boxes may result in periods of low demand for our products resulting in excess inventory, impairment charges and reduction of our operating results and cash flows.
  • Changes in regulatory, or governmental, oversight of hydraulic fracturing could materially adversely affect the demand for our rental products and reduce our operating results and cash flows.
  • Significant increases in raw material, fuel and labor costs could increase our acquisition and operating costs of rental equipment, which would increase operating costs and decrease profitability.
  • We derive a meaningful amount of our revenue in our liquid and solid containment tank and boxes business from a limited number of customers, the loss of one or more of which could have an adverse effect on our business.
  • We may not be able to quickly redeploy equipment returning from leases at equivalent prices.
Management Discussion
  • Consolidated revenues for the three months ended June 30, 2022 increased 21% to $177.0 million from $146.4 million in the same period in 2021.  Consolidated net income for the three months ended June 30, 2022 increased 27% to $26.1 million, from $20.6 million for the same period in 2021.  Earnings per diluted share for the three months ended June 30, 2022 increased 27% to $1.07 from $0.84 for the same period in 2021.
  • For the three months ended June 30, 2022, Mobile Modular’s total revenues increased $26.8 million, or 32%, to $111.4 million compared to the same period in 2021, primarily due to higher rental, sales, and rental related services revenues. The revenue increase, together with higher gross profit on rental, sales, and rental related services revenues, partly offset by higher selling and administrative expenses, resulted in a 31% increase in pre-tax income to $21.9 million for the three months ended June 30, 2022, from $16.8 million for the same period in 2021.
  • Mobile Modular’s gross profit for the three months ended June 30, 2022 increased $8.9 million, or 22%, to $49.7 million.  For the three months ended June 30, 2022 compared to the same period in 2021:

Content analysis

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Positive
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Uncertain
Constraining
Legalese
Litigous
Readability
H.S. sophomore Avg
New words: FASB, iii, troubled, unchanged, Vintage
Removed: prepaid