Washington, D.C. 20549
FORM___________
Amendment No. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Fiscal Year Ended June 30, 2018
OR
☐ | |
TRANSITION REPORT PURSUANT TO SECTION | |
Commission File Number 000-33385
(Exact name of registrant as specified in its charter)
Delaware | ||
(State or other Incorporation or | (I.R.S. Employer Identification No.) | |
39 East Union Street Pasadena, | (626) 584-9722 | |
(Address of | ( |
Securities registered pursuant to Section 12(b) of the Act:
Title of | ||||
Trading Symbol(s) | Name of Each Exchange | |||
On Which Registered | ||||
Common Stock, | ||||
GFN | NASDAQ Global Market | |||
9.00% Series C Cumulative Redeemable Perpetual Preferred Stock (Liquidation Preference $100 per share) |
NASDAQ Global Market | |
8.125% Senior Notes due 2021 | |||
GFNSL | NASDAQ Global Market |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrantregistrant: (1) has filed all reports required to be filed by Section 13 or 15 (d)15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the pastlast 90 days. Yes ý☒ No ¨
Indicate by check mark if disclosure of delinquent filerswhether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to ItemRule 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part IIIS-T (§232.405 of this Form 10-K or any amendmentchapter) during the preceding 12 months (or for such shorter period that the registrant was required to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or a non-accelerated filer.an emerging growth company. See definition of
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
Indicate by check mark if whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act). Yes
The aggregate market value of the Registrant’s common stockCommon Stock held bynon-affiliates of the Registrant on October 24, 2007December 31, 2017 was approximately $73,071,176. Shares$82,941,000 based on a closing price of common stock held by each$6.80 for the Common Stock on such date. For purposes of this computation, all executive officerofficers and director and by each shareholder affiliated with a director or an executive officerdirectors have been excluded from this calculation because such persons maydeemed to be affiliates. Such determination should not be deemed to be affiliates. This determinationan admission that such executive officers and directors are, in fact, affiliates of affiliate status is not necessarily a conclusive determination for other purposes.
There were 27,098,871 shares of the Registrant’s common stockCommon Stock outstanding as of October 24, 2007 was 9,690,099.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s Proxy Statement for its 2018 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form10-K. In addition, certain exhibits are incorporated into Part IV, Item 15. of this Annual Report on Form10-K contains by reference to other reports and registration statements relating to future results of the Registrant, which have been filed with the Securities and Exchange Commission.
EXPLANATORY NOTE
General Finance Corporation (including certain projections(the “Company,” “we,” “us,” or “our”) is filing this Amendment No. 1 on Form10-K/A (this “Amendment”) to its annual report on Form10-K for the fiscal year ended June 30, 2018, which was originally filed on September 7, 2018 (the “Original Filing”), to amend and business trends) that are “forward-looking statements” withinrestate Item 9A of Part II, “Controls and Procedures,” with respect to (1) our conclusions regarding the meaningeffectiveness of Section 27A of the Securities Act of 1933, as amended,our disclosure controls and Section 21E ofprocedures and our internal control over financial reporting and (2) Crowe LLP’s related attestation report.
As required by Rule12b-15 under the Securities Exchange Act of 1934, as amended and are subject to the “safe harbor” created by those sections. Forward-looking statements frequently are identifiable by the use of words such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms and other similar expressions. Our actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to, those set forth in Item 1A. Risk Factors and elsewhere in this Transition Report on Form 10-K and those detailed from time to time in our other filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of(the “Exchange Act”), new information, future events or otherwise.
Nominee | For | Withheld | |||||
David M. Connell | 8,776,419 | 323,945 | |||||
Manuel Marrero | 8,776,419 | 323,945 |
Units | Common Stock | Warrants | |||||||||||||||||
High | Low | High | Low | High | Low | ||||||||||||||
2007: | |||||||||||||||||||
Fourth Quarter | $ | 9.75 | $ | 9.00 | $ | 7.95 | $ | 7.56 | $ | 1.96 | $ | 1.45 | |||||||
Third Quarter | $ | 9.60 | $ | 8.50 | $ | 7.95 | $ | 7.46 | $ | 1.80 | $ | 1.10 | |||||||
Second Quarter | $ | 8.00 | $ | 7.81 | $ | 7.70 | $ | 7.22 | $ | 1.15 | $ | 0.62 | |||||||
First Quarter | $ | 8.45 | $ | 7.75 | $ | 7.36 | $ | 7.22 | $ | 0.85 | $ | 0.63 |
2006: | |||||||||||||||||||
Fourth Quarter | $ | 8.06 | $ | 7.75 | $ | 7.35 | $ | 7.24 | $ | 0.80 | $ | 0.63 |
October 14, 2006 (inception) to December 31, 2005 | Year Ended December 31, 2006 | Six Months Ended June 30, 2007 | October 14, 2005 (inception) to June 30, 2007 | ||||||||||
General and administrative expenses | $ | 3,509 | $ | 387,815 | $ | 795,989 | $ | 1,187,313 | |||||
Operating loss | (3,509 | ) | (387,815 | ) | (795,989 | ) | (1,187,313 | ) | |||||
Other income: | |||||||||||||
Interest income | -- | 1,888,503 | 1,312,169 | 3,200,672 | |||||||||
Interest expense | -- | (20,498 | ) | (72,398 | ) | (92,896 | ) | ||||||
Other, net | -- | -- | (7,469 | ) | (7,469 | ) | |||||||
Net income (loss) | $ | (3,509 | ) | $ | 891,090 | $ | 261,513 | $ | 1,149,094 | ||||
Net income (loss) per share: | |||||||||||||
Basic | $ | (0.00 | ) | $ | 0.11 | $ | 0.02 | ||||||
Diluted | $ | (0.00 | ) | $ | 0.09 | $ | 0.02 | ||||||
Weighted average shares outstanding: | |||||||||||||
Basic | 1,875,000 | 8,151,369 | 10,500,000 | ||||||||||
Diluted | $ | 1,875,000 | $ | 9,636,545 | $ | 12,704,299 |
December 31, 2006 | June 30, 2007 | ||||||
Cash | $ | 37,713 | $ | 59,427 | |||
Cash equivalents held in trust - restricted | 68,055,252 | 68,217,585 | |||||
Deferred acquisition costs | 783,663 | 1,547,742 | |||||
Total assets | 69,713,171 | 71,078,142 | |||||
Deferred underwriting fees | 1,380,000 | 1,380,000 | |||||
Total liabilities | 3,947,907 | 4,812,265 | |||||
Common stock subject to possible conversion | 13,168,200 | 13,338,500 | |||||
Stockholders’ equity | $ | 52,597,064 | $ | 52,927,377 |
Year Ended December 31, 2006 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||
Net income (loss), as previously reported | $ | (8,014 | ) | $ | 302,406 | $ | (2,603 | ) | $ | 165,211 | |||
Effect of accounting change, net of tax | -- | 3,763 | 265,772 | 164,555 | |||||||||
Net income (loss), as restated | $ | (8,014 | ) | $ | 306,169 | $ | 263,169 | $ | 329,766 | ||||
Income (loss) per share, as previously reported | |||||||||||||
Basic | $ | (0.00 | ) | $ | 0.03 | $ | -- | $ | 0.03 | ||||
Diluted | $ | (0.00 | ) | $ | 0.03 | $ | -- | $ | 0.02 | ||||
Income (loss) per share, as restated | |||||||||||||
Basic | $ | (0.00 | ) | $ | 0.03 | $ | 0.03 | $ | 0.03 | ||||
Diluted | $ | (0.00 | ) | $ | 0.03 | $ | 0.02 | $ | 0.03 |
Six Months Ended June 30, 2007 | First Quarter | Second Quarter | |||||
Net income (loss), as previously reported | $ | (180,584 | ) | $ | (34,898 | ) | |
Effect of accounting change, net of tax | 298,703 | 178,292 | |||||
Net income (loss), as restated | $ | 118,119 | $ | 143,394 | |||
Income (loss) per share, as previously reported | |||||||
Basic | $ | (0.02 | ) | $ | (0.00 | ) | |
Diluted | $ | (0.02 | ) | $ | (0.00 | ) | |
Income (loss) per share, as restated | |||||||
Basic | $ | 0.01 | $ | 0.01 | |||
Diluted | $ | 0.01 | $ | 0.01 |
Payment Due by Year Ending June 30, | ||||||||||||||||
Contractual Obligations | Total | 2008 | 2009-2012 | 2013 | 2014 and Thereafter | |||||||||||
(in thousands) | ||||||||||||||||
Limited recourse revolving line of credit (1) | $ | 2,441 | $ | 2,441 | $ | — | $ | — | $ | — | ||||||
Total | $ | 2,441 | $ | 2,441 | $ | — | $ | — | $ | — |
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Conclusion Regarding the Effectiveness of Disclosure Controls and Charles E. Barrantes (our principal financial officer) carried out an evaluation as of June 30, 2007 of the effectiveness of ourProcedures
We maintain disclosure controls and procedures as definedthat are designed to ensure that information required to be disclosed in Rules 13a-15(e)reports we file and 15d-15(e)submit under the Securities Exchange Act of 1934, (the “Exchangeas amended (“Exchange Act”). Based upon that evaluation, they concluded that, as of June 30, 2007, our disclosure controls and procedures were (1) effective in that they were designed to ensure that material information relating to us is made known to our principal executive and principal financial officers, and (2) effective in that they provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in accordance with SEC guidelines and that such information is communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure based on the SEC’s rulesdefinition of “disclosure controls and forms.
Notwithstanding the material weakness in our internal control over financial reporting as of June 30, 2018, management has concluded that the consolidated financial statements included in the Original Filing present fairly, in all material respects, our financial position, results of operations and cash flows.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the financial statements.
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the controls system are met. Because of the inherent limitations in all controls systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Under the supervision and with the evaluation requiredparticipation of management, we assessed the effectiveness of our internal control over financial reporting based on the criteria in Internal Control — Integrated Framework issued by Rule 13a-15(d)the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the Exchange Actcriteria in Internal Control — Integrated Framework (2013), we concluded in our Original Filing that occurredour internal control over financial reporting was effective as of June 30, 2018. Management subsequently concluded that the material weakness described below existed as of June 30, 2018. As a result, management has concluded that we did not maintain effective internal control over financial reporting as of June 30, 2018. The effectiveness of our internal control over financial reporting as of June 30, 2018 has been audited by Crowe Horwath LLP, our independent registered public accounting firm, as stated and attested to in their report that is included herein.
During the third quarter of our fiscal year ending June 30, 2019, we identified an error in the accounting for the valuation of the minimum return provision in the Convertible Note (see Note 5 of Notes to Consolidated Financial Statements). Specifically, the accounting for the valuation of the minimum return provision in the Convertible Note during the quarter ended September 30, 2018 should have been a charge through the condensed consolidated statements of operations instead of directly to equity. We have restated our previously issued condensed consolidated financial statements for the quarters ended September 30, 2018 and December 31, 2018 for this error and the respective Quarterly Reports on Form10-Q/A filed reflect the proper accounting for this bifurcated derivative. In light of our determination that there were material inaccuracies in the financial information for the quarter ended September 30, 2018 and six
3
months ended December 31, 2018, which were included in the original Quarterly Report for the quarters ended September 30, 2018 and December 31, 2018, our Chief Executive Officer and Chief Financial Officer have concluded that a control deficiency with respect to the identification, interpretation and application of accounting for highly technical ornon-routine and complex accounting transactions constituted a material weakness in internal control over financial reporting.
We have enhanced our controls and procedures to properly identify, interpret and apply the accounting for derivatives. As part of this process, we have designated key finance personnel to participate in derivative accounting training and will also implement a formal continuing education program to ensure our key finance personnel are adequately trained and that they maintain competencies with not only current accounting and reporting requirements, but to monitor new FASB and SEC accounting and reporting rules to ensure timely review, education, assessment, and adoption. On highly technical ornon-routine and complex accounting transactions, we will engage third-party advisors with the requisite skills and technical expertise to assist us in assessing, performing and reviewing such transactions.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended June 30, 20072018 that hashave materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting. However, as noted above, we will be implementing changes to our internal control over financial reporting to address the material weakness described above.
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To the Board of Directors and board committeesStockholders
General Finance Corporation
Pasadena, California
Opinions on which he during the six monthsFinancial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of General Finance Corporation (the “Company”) as of June 30, 2018 and 2017, the related consolidated statements of operations, comprehensive income/loss, equity, and cash flows for each of the years in the three-year period ended June 30, 2007.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2018 and a Nominating Committee.
In our report dated September 7, 2018, we believe qualifiesexpressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. As described in the following paragraph, the Company subsequently identified a material weakness in its internal control over financial reporting. Accordingly, management has revised its assessment about the effectiveness of the Company’s internal control over financial reporting, and our present opinion on the effectiveness of the Company’s internal control over financial reporting as an “audit committeeof June 30, 2018, as expressed herein, is different from that expressed in our previous report.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial expert,”reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management’s report.
The Company did not design and operate controls with respect to the identification, interpretation and application of accounting for highly technical ornon-routine and complex accounting transactions.
This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as definedof and for the year ended June 30, 2018.
Also in our opinion, because of the effect of the material weakness identified above on the achievement of the objectives of the control criteria, the Company has not maintained, in all material respects, effective internal control over financial reporting as of June 30, 2018, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission. In addition, we will certify toCommission and the American Stock Exchange thatPCAOB.
We conducted our audits in accordance with the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual's financial sophistication. Each memberstandards of the Audit Committee is an independent director underPCAOB. Those standards require that we plan and perform the American Stock Exchange listing standards.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
5
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and audit functions. The Audit Committee is directly responsible fortesting and evaluating the appointment, compensation, retention, oversightdesign and workoperating effectiveness of our independent auditor.
Definition and Limitations of these persons filed all required reportsInternal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on a timely basis during the six months ended June 30, 2007.
/s/ Crowe LLP
We have a code of ethics that appliesserved as the Company’s auditor since 2009.
Sherman Oaks, California
September 7, 2018 (May 14, 2019 as to our directors, officers and employees. We will provide without charge a copy
the effects of the code of ethics to any person who so requests by a letter addressed to the Corporate Secretary, General Finance Corporation, 260 Santa Los Robles Avenue, Suite 217, Pasadena, California 91101.material weakness)
6
Item 11. Executive Compensation
(b) Exhibits
Exhibit No. | Exhibit Description | |
23.1 | Consent of Independent Registered Public Accounting Firm (a) | |
31.1 | ||
31.2 |
Name and Principal Position | Year | Salary | Bonus | Option Awards (2) | All Other Compensation (3) | Total | ||||||||||||||
Ronald F. Valenta Chief Executive Officer | 2007 | (1) | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
2006 | — | — | — | — | — | |||||||||||||||
Charles E. Barrantes Chief Financial Officer and Executive Vice President | 2007 | (1) | $ | 100,000 | $ | — | $ | 68,800 | $ | 3,512 | $ | 172,312 | ||||||||
2006 | 62,121 | (4) | 21,742 | (4) | 42,000 | 3,361 | 129,224 |
32.1* | ||
32.2* |
* |
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#)(1) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Exercise Price ($/Sh) | Expiration Date | |||||||||||
Ronald F. Valenta | -- | -- | -- | -- | -- | |||||||||||
Charles E. Barrantes | -- | 225,000 | -- | $ | 7.30 | 9/11/16 |
The certifications attached as Exhibit 32.1 and |
Beneficial Ownership | |||||||
Name | Number of Shares (1) | Percent of Class (1) | |||||
Ronald F. Valenta(2)(3) | 2,605,466 | 24.0 | % | ||||
John O. Johnson(2)(4) | 665,617 | 6.7 | % | ||||
James B. Roszak(2) | 22,500 | (* | ) | ||||
Lawrence Glascott(2) | 22,500 | (* | ) | ||||
Manuel Marrero(2) | 22,500 | (* | ) | ||||
David M. Connell(2) | 22,500 | (* | ) | ||||
Charles E. Barrantes(2)(5) | 45,000 | (* | ) | ||||
Robert Allan(6) | 800 | (* | ) | ||||
Gilder, Gagnon, Howe & Co. LLC(7) | 1,788,772 | 18.5 | % | ||||
Olawalu Holdings, LLC(8) | 642,000 | 6.6 | % | ||||
2863 S. Western Avenue Palos Verdes, California 90275 | |||||||
Ronald L. Havner, Jr.(9) LeeAnn R. Havner The Havner Family Trust | 671,500 | 6.8 | % | ||||
c/o Public Storage, Inc. 701 Western Avenue Glendale, California 91201 | |||||||
Jonathan Gallen(10) | 1,905,000 | 18.4 | % | ||||
299 Park Avenue, 17th Floor New York, New York 10171 | |||||||
Neil Gagnon(11) | 1,810,303 | 18.7 | % | ||||
1370 Avenue of the Americas, Suite 2400 New York, New York 10019 | |||||||
Jack Silver(12) | 2,071,410 | 17.8 | % | ||||
SIAR Capital LLC 660 Madison Avenue New York, New York 10021 | |||||||
All executive officers and directors as a group (8 persons_nine persons)(13) | 3,406,883 | 30.4 | % |
Filed herewith. |
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Plan category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted-average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||
Equity compensation plans approved by security holders(1) | 225,000 | $ | 7.30 | 1,275,000 | ||||||
Equity compensation plans not approved by security holders (1) | -- | -- | -- | |||||||
Total | 225,000 | $ | 7.30 | 1,275,000 |
Director Compensation | |||||||
Name | Fees Earned or Paid in Cash | Total ($) | |||||
Lawrence Glascott | $ | 4,500 | $ | 4,500 | |||
David M. Connell | $ | 4,500 | $ | 4,500 | |||
Manuel Marrero | $ | 4,500 | $ | 4,500 | |||
James B. Roszak | $ | 4,500 | $ | 4,500 | |||
Ronald F. Valenta | $ | -- | $ | -- |
Annual Retainer—Chairman of the Board | $ | 40,000 | ||
Annual Retainer—Other Directors | $ | 30,000 | ||
Additional Annual Retainer - Audit Committee Chair | $ | 10,000 | ||
Additional Annual Retainer - Compensation Committee Chair | $ | 7,500 | ||
Additional Annual Retainer - Nominating Committee Chair | $ | 3,000 | ||
Board Meeting Attendance Fee—Chairman of the Board | $ | 2,000 | ||
Board Meeting Attendance Fee—Other Directors | $ | 1,500 | ||
Committee Meeting Attendance Fee | $ | 750 | ||
Telephonic Meeting Attendance Fee | $ | 500 |
LCM 2005 and 2006 | GHC 2006 | GHC 2007 | ||||||||
Audit Fees | $ | 36,033 | $ | 46,385 | $ | 45,773 | ||||
Audit-Related Fees | 26,023 | 18,709 | 840 | |||||||
Tax Fees | 2,172 | 650 | 8,574 | |||||||
All Other Fees | 94,203 | -- | -- |
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
General Finance Corporation | ||||||
By: | /s/ | May 14, 2019 | ||||
Name: | ||||||
Title: Chief Executive Officer |
/s/ | ||||||
December 31, 2006 | June 30, 2007 | ||||||
Current assets: | (as restated) | (as restated) | |||||
Cash | $ | 37,713 | $ | 59,427 | |||
Cash equivalents held in trust account - restricted | 68,055,252 | 68,217,585 | |||||
Prepaid expenses | 19,125 | 111,375 | |||||
Total current assets | 68,112,090 | 68,388,387 | |||||
Office equipment, net | 2,871 | 2,349 | |||||
Deferred income taxes | -- | 131,827 | |||||
Deferred acquisition costs | 783,663 | 1,547,742 | |||||
Other assets | 814,547 | 1,007,837 | |||||
Total assets | $ | 69,713,171 | $ | 71,078,142 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 462,224 | $ | 660,366 | |||
Accrued liabilities, including accrued interest of $20,498 in 2006 and $91,253 in 2007 on borrowings from related party | 77,083 | 244,699 | |||||
Income taxes payable | 560,800 | 177,200 | |||||
Deferred underwriting fees | 1,380,000 | 1,380,000 | |||||
Borrowings from related party | 1,280,000 | 2,350,000 | |||||
Total current liabilities | 3,760,107 | 4,812,265 | |||||
Deferred income taxes | 187,800 | -- | |||||
Common stock subject to possible conversion, | |||||||
1,724,138 shares at conversion value | 13,168,200 | 13,338,500 | |||||
Commitments | -- | -- | |||||
Stockholders’ equity: | |||||||
Preferred stock, $.0001 par value: 1,000,000 shares authorized; no shares outstanding | -- | -- | |||||
Common stock, $.0001 par value: 100,000,000 shares authorized; | |||||||
10,500,000 shares outstanding (including 1,724,138 shares subject to possible conversion) | 1,050 | 1,050 | |||||
Additional paid-in capital | 51,708,433 | 51,777,233 | |||||
Earnings accumulated during the development stage | 887,581 | 1,149,094 | |||||
Total stockholders’ equity | 52,597,064 | 52,927,377 | |||||
Total liabilities and stockholders’ equity | $ | 69,713,171 | $ | 71,078,142 |
October 14, 2005 (inception) to December 31, 2005 | Year Ended December 31, 2006 | Six Months Ended June 30, 2007 | October 14, 2005 (inception) to June 30, 2007 | ||||||||||
(as restated) | (as restated) | (as restated) | |||||||||||
General and administrative expenses | $ | 3,509 | $ | 387,815 | $ | 795,989 | $ | 1,187,313 | |||||
Operating loss | (3,509 | ) | (387,815 | ) | (795,989 | ) | (1,187,313 | ) | |||||
Other: | |||||||||||||
Interest income | -- | 1,888,503 | 1,312,169 | 3,200,672 | |||||||||
Interest expense | -- | (20,498 | ) | (72,398 | ) | (92,896 | ) | ||||||
Other, net | -- | -- | (7,469 | ) | (7,469 | ) | |||||||
Income (loss) before provision for income taxes | (3,509 | ) | 1,480,190 | 436,313 | 1,912,994 | ||||||||
Provision for income taxes | -- | 589,100 | 174,800 | 763,900 | |||||||||
�� | |||||||||||||
Net income (loss) | $ | (3,509 | ) | $ | 891,090 | $ | 261,513 | $ | 1,149,094 | ||||
Net income (loss) per share: | |||||||||||||
Basic | $ | (0.00 | ) | $ | 0.11 | $ | 0.02 | ||||||
Diluted | $ | (0.00 | ) | $ | 0.09 | $ | 0.02 | ||||||
Weighted average shares outstanding | |||||||||||||
Basic | 1,875,000 | 8,151,369 | 10,500,000 | ||||||||||
Diluted | 1,875,000 | 9,636,545 | 12,704,299 |
Common Stock | Additional Paid-In | Earnings Accumulated During the Development | Total Stockholders’ | |||||||||||||
Shares | Amount | Capital | Stage | Equity | ||||||||||||
Balance at October 14, 2005 (inception) | -- | $ | -- | $ | -- | $ | -- | $ | -- | |||||||
Sale of common stock to initial stockholder on October 14, 2005 | 1,875,000 | 188 | 249,812 | -- | 250,000 | |||||||||||
Net loss | -- | -- | -- | (3,509 | ) | (3,509 | ) | |||||||||
Balance at December 31, 2005 | 1,875,000 | 188 | 249,812 | (3,509 | ) | 246,491 | ||||||||||
Sale of warrants on April 10, 2006 | -- | -- | 700,000 | -- | 700,000 | |||||||||||
Sale of 7,500,000 units and underwriters’ purchase option, net of underwriters’ discount and offering expenses on April 10, 2006 | 7,500,000 | 750 | 55,254,754 | -- | 55,255,504 | |||||||||||
Sale of 1,125,000 units for over-allotment on April 13, 2006 | 1,125,000 | 112 | 8,319,667 | -- | 8,319,779 | |||||||||||
Proceeds subject to possible conversion of 1,724,138 shares | -- | -- | (12,857,800 | ) | -- | (12,857,800 | ) | |||||||||
Share-based compensation | -- | -- | 42,000 | -- | 42,000 | |||||||||||
Net income (as restated) | -- | -- | -- | 891,090 | 891,090 | |||||||||||
Balance at December 31, 2006 | 10,500,000 | 1,050 | 51,708,433 | 887,581 | 52,597,064 | |||||||||||
Share-based compensation | -- | -- | 68,800 | -- | 68,800 | |||||||||||
Net income (as restated) | -- | -- | -- | 261,513 | 261,513 | |||||||||||
Balance at June 30, 2007 | 10,500,000 | $ | 1,050 | $ | 51,777,233 | $ | 1,149,094 | $ | 52,927,377 |
October 14, 2005 (inception) to December 31, 2005 | Year Ended December 31, 2006 | Six Months Ended June 30, 2007 | October 14, 2005 (inception) to June 30, 2007 | ||||||||||
Cash flows from operating activities | |||||||||||||
Net income (loss) | $ | (3,509 | ) | $ | 891,090 | $ | 261,513 | $ | 1,149,094 | ||||
Depreciation and amortization | -- | 722 | 707 | 1,429 | |||||||||
Share-based compensation expense | -- | 42,000 | 68,800 | 110,800 | |||||||||
Deferred income taxes | -- | 187,800 | (319,627 | ) | (131,827 | ) | |||||||
Changes in operating assets and liabilities: | |||||||||||||
Prepaid expenses | -- | (19,125 | ) | (92,250 | ) | (111,375 | ) | ||||||
Other assets | (71,116 | ) | 200,493 | -- | (3,688 | ) | |||||||
Accounts payable and accrued liabilities | -- | 406,242 | 365,758 | 905,065 | |||||||||
Income taxes payable | -- | 560,800 | (383,600 | ) | 177,200 | ||||||||
Interest deferred for common stock subject to possible conversion, net of income tax effect | -- | 310,400 | 170,300 | 480,700 | |||||||||
Net cash provided (used) by operating activities | (74,625 | ) | 2,580,422 | 71,601 | 2,577,398 | ||||||||
Cash flows from investing activities: | |||||||||||||
Deposit related to proposed acquisition | -- | (811,320 | ) | (193,475 | ) | (1,004,795 | ) | ||||||
Acquisition costs | -- | (783,663 | ) | (764,079 | ) | (1,547,742 | ) | ||||||
Purchases of office equipment | -- | (3,132 | ) | -- | (3,132 | ) | |||||||
Cash equivalents held in trust account | -- | (68,055,252 | ) | (162,333 | ) | (68,217,585 | ) | ||||||
Net cash used by investing activities | -- | (69,653,367 | ) | (1,119,887 | ) | (70,773,254 | ) | ||||||
Cash flows from financing activities: | |||||||||||||
Borrowings from revolving line of credit with related party | -- | 1,280,000 | 1,070,000 | 2,350,000 | |||||||||
Proceeds from sale of units, net | -- | 64,955,283 | -- | 64,955,283 | |||||||||
Proceeds from private placement | -- | 700,000 | -- | 700,000 | |||||||||
Proceeds from sale of common stock to initial stockholder | 250,000 | -- | -- | 250,000 | |||||||||
Net cash provided by financing activities | 250,000 | 66,935,283 | 1,070,000 | 68,255,283 | |||||||||
Net increase (decrease) in cash | 175,375 | (137,662 | ) | 21,714 | 59,427 | ||||||||
Cash at beginning of period | -- | 175,375 | 37,713 | - | |||||||||
Cash at end of period | $ | 175,375 | $ | 37,713 | $ | 59,427 | $ | 59,427 | |||||
Non-cash financing activity: | |||||||||||||
Accrued deferred underwriting fees | -- | $ | 1,380,000 | $ | 1,380,000 | $ | 1,380,000 | ||||||
Accrued deferred offering costs | $ | 133,065 | -- | -- | -- |
October 14, 2005 (inception) to December 31, 2005 | Year Ended December 31, 2006 | Six Months Ended June 30, 2007 | ||||||||
Basic | 1,875,000 | 8,151,369 | 10,500,000 | |||||||
Assumed exercise of warrants | — | 1,481,590 | 2,188,003 | |||||||
Assumed exercise of stock options | — | 3,586 | 16,296 | |||||||
Diluted | 1,875,000 | 9,636,545 | 12,704,299 |
At | |||||||
June 30, | |||||||
2007 | 2006 | ||||||
(-000-) | |||||||
Assets | |||||||
Cash and cash equivalents | $ | 886 | $ | 567 | |||
Trade and other receivables, net of allowance for doubtful accounts of $237 and $129 at June 30, 2007 and 2006, respectively | 13,322 | 7,451 | |||||
Inventories | 5,472 | 5,460 | |||||
Total current assets | 19,680 | 13,478 | |||||
Lease receivables | 1,364 | 566 | |||||
Property, plant and equipment | 2,737 | 2,614 | |||||
Container for hire fleet | 40,928 | 27,773 | |||||
Intangible assets | 4,079 | 3,472 | |||||
Total non-current assets | 49,108 | 34,425 | |||||
Total assets | $ | 68,788 | $ | 47,903 | |||
Liabilities | |||||||
Trade and other payables | $ | 8,641 | $ | 9,133 | |||
Interest-bearing loans and borrowings | 10,359 | 6,526 | |||||
Income tax payable | 245 | — | |||||
Employee benefits | 1,614 | 702 | |||||
Provisions | — | 219 | |||||
Total current liabilities | 20,859 | 16,580 | |||||
Non-current liabilities | |||||||
Interest bearing loans and borrowings | 33,811 | 27,155 | |||||
Deferred tax liabilities | 881 | 415 | |||||
Employee benefits | 171 | 529 | |||||
Provisions | 26 | 206 | |||||
Total non-current liabilities | 34,889 | 28,305 | |||||
Commitments and contingencies (Note 18) | — | — | |||||
Equity | |||||||
Issued capital | 12,187 | 3,441 | |||||
Retained earnings/(accumulated losses) | (9 | ) | (321 | ) | |||
Accumulated other comprehensive income (loss) | 862 | (102 | ) | ||||
13,040 | 3,018 | ||||||
Total liabilities and shareholders’ equity | $ | 68,788 | $ | 47,903 |
Six Months | |||||||||||||
Year Ended | Ended | Year Ended | |||||||||||
June 30, | December 31, | ||||||||||||
2007 | 2006 | 2005 | 2004 | ||||||||||
(-000-) | |||||||||||||
Revenue | |||||||||||||
Sale and modification of containers | $ | 52,929 | $ | 34,473 | $ | 13,563 | $ | 26,141 | |||||
Hire of containers | 21,483 | 15,921 | 7,224 | 12,351 | |||||||||
Total revenue | 74,412 | 50,394 | 20,787 | 38,492 | |||||||||
Other income | 25 | 26 | 14 | 23 | |||||||||
Changes in inventories of finished goods and WIP | 758 | (2,599 | ) | (1,497 | ) | 1,283 | |||||||
Purchases of finished goods and consumables used | (47,185 | ) | (30,088 | ) | (11,360 | ) | (25,385 | ) | |||||
Employee benefits expense | (12,678 | ) | (7,631 | ) | (3,721 | ) | (5,616 | ) | |||||
Depreciation and amortization expense | (2,577 | ) | (2,668 | ) | (1,480 | ) | (2,504 | ) | |||||
Other operating expenses | (8,083 | ) | (5,022 | ) | (2,183 | ) | (3,367 | ) | |||||
Results from operating activities | 4,672 | 2,412 | 560 | 2,926 | |||||||||
Financial income | 508 | 413 | 332 | 87 | |||||||||
Financial expenses | (4,378 | ) | (3,039 | ) | (1,127 | ) | (2,397 | ) | |||||
Net financing costs | (3,870 | ) | (2,626 | ) | (795 | ) | (2,310 | ) | |||||
Other, net | — | — | 133 | 68 | |||||||||
Income(loss) before tax | 802 | (214 | ) | (102 | ) | 684 | |||||||
Income tax expense | 490 | 214 | 75 | 400 | |||||||||
Net income(loss) | $ | 312 | $ | (428 | ) | $ | (177 | ) | $ | 284 |
Share capital (Note 15) | Retained earnings/ (Accumulated losses) | Accumulated other comprehensive income (loss) | Total equity | ||||||||||
(-000-) | |||||||||||||
Balance at January 1, 2004 | $ | 2,762 | $ | — | $ | — | $ | 2,762 | |||||
Net income | — | 284 | — | 284 | |||||||||
Cumulative translation adjustment | — | — | 119 | 119 | |||||||||
Total comprehensive income (loss) | — | 284 | 119 | 403 | |||||||||
Balance at December 31, 2004 | 2,762 | 284 | 119 | 3,165 | |||||||||
Issuance of capital | 679 | — | — | 679 | |||||||||
Net loss | — | (177 | ) | — | (177 | ) | |||||||
Cumulative translation adjustment | — | — | (81 | ) | (81 | ) | |||||||
Total comprehensive income (loss) | — | (177) | (81) | (258) | |||||||||
Balance at June 30, 2005 | 3,441 | 107 | 38 | 3,586 | |||||||||
Net loss | — | (428 | ) | — | (428 | ) | |||||||
Cumulative translation adjustment | — | — | (140 | ) | (140 | ) | |||||||
Total comprehensive income (loss) | — | (428) | (140) | (568) | |||||||||
Balance at June 30, 2006 | 3,441 | (321 | ) | (102 | ) | 3,018 | |||||||
Issuance of capital | 8,746 | — | — | 8,746 | |||||||||
Net income | — | 312 | — | 312 | |||||||||
Cumulative translation adjustment | — | — | 964 | 964 | |||||||||
Total comprehensive income (loss) | — | 312 | 964 | 1,276 | |||||||||
Balance at June 30, 2007 | $ | 12,187 | $ | (9 | ) | $ | 862 | $ | 13,040 |
Year Ended | Six Months Ended | Year Ended | |||||||||||
June 30, | December 31, | ||||||||||||
2007 | 2006 | 2005 | 2004 | ||||||||||
(-000-) | |||||||||||||
Cash flows from operating activities (Note 20) | |||||||||||||
Cash receipts from customers | $ | 75,502 | $ | 53,376 | $ | 22,616 | $ | 41,518 | |||||
Cash paid to suppliers and employees | (62,796 | ) | (41,204 | ) | (19,597 | ) | (36,550 | ) | |||||
12,706 | 12,172 | 3,019 | 4,968 | ||||||||||
Interest (paid)/received, net | (3,799 | ) | (2,118 | ) | (902 | ) | (1,182 | ) | |||||
Income taxes received/(paid) | 49 | - | (587 | ) | 576 | ||||||||
Net cash from operating activities | 8,956 | 10,054 | 1,530 | 4,362 | |||||||||
Cash flows from investing activities | |||||||||||||
Proceeds from sale of property, plant and equipment | 101 | 52 | 19 | 55 | |||||||||
Acquisition of subsidiary, net of cash acquired | (303 | ) | (4,855 | ) | — | — | |||||||
Acquisition of property, plant and equipment | (845 | ) | (837 | ) | (1,498 | ) | (924 | ) | |||||
Acquisition of container hire fleet | (20,350 | ) | (13,178 | ) | (5,975 | ) | (8,848 | ) | |||||
Acquisition of intangible assets | (66 | ) | (144 | ) | (19 | ) | (52 | ) | |||||
Payment of deferred purchase consideration | (451 | ) | - | (2,707 | ) | — | |||||||
Net cash used by investing activities | (21,914 | ) | (18,962 | ) | (10,180 | ) | (9,769 | ) | |||||
Cash flows from financing activities | |||||||||||||
Proceeds from capital lease and other liabilities | 434 | — | — | — | |||||||||
Payment of capital lease and other liabilities | (1,152 | ) | (565 | ) | (298 | ) | (1,408 | ) | |||||
Proceeds from borrowings | 16,050 | 20,088 | 10,045 | 14,901 | |||||||||
Repayment of borrowings | (10,689 | ) | (10,557 | ) | (1,241 | ) | (9,402 | ) | |||||
Proceeds from issuance of capital | 8,746 | — | 679 | — | |||||||||
Net cash from financing activities | 13,389 | 8,966 | 9,185 | 4,091 | |||||||||
Net increase / (decrease) in cash and cash equivalents | 431 | 58 | 535 | (1,316 | ) | ||||||||
Cash and cash equivalents at beginning of period | 567 | 530 | 2 | 1,340 | |||||||||
Translation adjustment | (112 | ) | (21 | ) | (7 | ) | (22 | ) | |||||
Cash and cash equivalents at end of period | $ | 886 | $ | 567 | $ | 530 | $ | 2 |
Title: Chief Financial Officer |
8
Six Months | |||||||||||||
Year Ended | Ended | Year Ended | |||||||||||
June 30, | December 31, | ||||||||||||
2007 | 2006 | 2005 | 2004 | ||||||||||
(-000-) | |||||||||||||
Interest income | $ | 239 | $ | 156 | $ | 80 | $ | 87 | |||||
Net gain on remeasurement of interest rate swap at fair value through statement of operations | 174 | 219 | — | — | |||||||||
Net foreign exchange gain | 95 | 38 | 252 | — | |||||||||
Financial income | $ | 508 | $ | 413 | $ | 332 | $ | 87 | |||||
Interest expense | $ | 4,378 | $ | 3,017 | $ | 1,002 | $ | 2,110 | |||||
Net foreign exchange loss | — | — | — | 287 | |||||||||
Net loss on remeasurement of forward exchange contracts at fair value through statement of operations | — | 22 | — | — | |||||||||
Net loss on remeasurement of interest rate swap at fair value through statement of operations | — | — | 125 | — | |||||||||
Financial expenses | 4,378 | 3,039 | 1,127 | 2,397 | |||||||||
Net financing costs | $ | 3,870 | $ | 2,626 | $ | 795 | $ | 2,310 |
Six Months | |||||||||||||
Year Ended | Ended | Year Ended | |||||||||||
June 30, | December 31, | ||||||||||||
2007 | 2006 | 2005 | 2004 | ||||||||||
(-000-) | |||||||||||||
Recognized in the income statement | |||||||||||||
Current tax (benefit) / expense | |||||||||||||
Current year | $ | 13 | $ | — | $ | (23 | ) | $ | (3 | ) | |||
Adjustments for prior years | (4 | ) | — | — | — | ||||||||
9 | — | (23 | ) | (3 | ) | ||||||||
Deferred tax expense | |||||||||||||
Origination and reversal of temporary differences | 481 | 214 | 98 | 403 | |||||||||
481 | 214 | 98 | 403 | ||||||||||
Total income tax (benefit)/expense in income statement | $ | 490 | $ | 214 | $ | 75 | $ | 400 |
Six Months | |||||||||||||
Year Ended | Ended | Year Ended | |||||||||||
June 30, | December 31, | ||||||||||||
2007 | 2006 | 2005 | 2004 | ||||||||||
(-000-) | |||||||||||||
Numerical reconciliation between tax expense and pre-tax net profit | |||||||||||||
Profit / (loss) before tax | $ | 802 | $ | (214 | ) | $ | (102 | ) | $ | 684 | |||
Income tax using the domestic corporation tax rate of 30% | 241 | (64 | ) | (31 | ) | 205 | |||||||
Increase in income tax expense due to: | |||||||||||||
Goodwill write off arising from benefit from deferred tax assets not recognized at date of previous business combinations | — | 80 | — | — | |||||||||
Non-deductible expenses | 253 | 198 | 106 | 195 | |||||||||
Decrease in income tax expense due to: | |||||||||||||
Under / (over) provided in prior years | (4 | ) | — | — | — | ||||||||
Income tax (benefit) / expense on pre-tax net profit | $ | 490 | $ | 214 | $ | 75 | $ | 400 |
Assets | Liabilities | Net | |||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | ||||||||||||||
(-000-) | |||||||||||||||||||
Property, plant and equipment | $ | — | $ | — | $ | (1,902 | ) | $ | (1,338 | ) | $ | (1,902 | ) | $ | (1,338 | ) | |||
Interest bearing loans and borrowings | 71 | 91 | — | — | 71 | 91 | |||||||||||||
Employee benefits | 164 | 269 | — | — | 164 | 269 | |||||||||||||
Other items | 786 | 114 | — | (87 | ) | 786 | 27 | ||||||||||||
Tax value of loss carry-forwards | — | 536 | — | — | — | 536 | |||||||||||||
Tax assets / (liabilities) | $ | 1,021 | $ | 1,010 | $ | (1,902 | ) | $ | (1,425 | ) | $ | (881 | ) | $ | (415 | ) |
At June 30, | |||||||
2007 | 2006 | ||||||
(-000-) | |||||||
Current | |||||||
Trade receivables | $ | 12,189 | $ | 6,788 | |||
Less: allowances | (237 | ) | (129 | ) | |||
11,952 | 6,659 | ||||||
Lease receivable | 479 | 245 | |||||
Fair value of derivatives | 300 | 96 | |||||
Other receivables and prepayments | 591 | 451 | |||||
$ | 13,322 | $ | 7,451 |
At June 30, | |||||||
2007 | 2006 | ||||||
(-000-) | |||||||
Finished goods | $ | 4,113 | $ | 5,081 | |||
Work in progress | 1,359 | 379 | |||||
$ | 5,472 | $ | 5,460 |
Plant and equipment, fixtures and fittings | ||||
(-000-) | ||||
Cost | ||||
Balance at January 1, 2004 | $ | 866 | ||
Acquisitions | 924 | |||
Disposals | (51 | ) | ||
Translation adjustment | 83 | |||
Balance at December 31, 2004 | 1,822 | |||
Acquisitions | 1,498 | |||
Disposals | (27 | ) | ||
Translation adjustment | (64 | ) | ||
Balance at June 30, 2005 | 3,229 | |||
Acquisitions | 837 | |||
Acquisitions through business combinations | 230 | |||
Disposals | (82 | ) | ||
Translation adjustment | (159 | ) | ||
Balance at June 30, 2006 | 4,055 | |||
Acquisitions | 845 | |||
Disposals | (237 | ) | ||
Translation adjustment | 707 | |||
Balance at 30 June 2007 | $ | 5,370 | ||
Depreciation and impairment losses | ||||
Balance at January 1, 2004 | $ | — | ||
Depreciation charge for the period | (411 | ) | ||
Disposals | 24 | |||
Translation adjustment | (22 | ) | ||
Balance at December 31, 2004 | (409 | ) | ||
Depreciation charge for the period | (337 | ) | ||
Disposals | 22 | |||
Translation adjustment | 14 | |||
Balance at June 30, 2005 | (710 | ) | ||
Depreciation charge for the period | (830 | ) | ||
Disposals | 51 | |||
Translation adjustment | 48 | |||
Balance at June 30, 2006 | (1,441 | ) | ||
Depreciation charge for the period | (1,020 | ) | ||
Disposals | 133 | |||
Translation adjustment | (305 | ) | ||
Balance at June 30, 2007 | $ | (2,633 | ) |
Container Hire Fleet | ||||
(-000-) | ||||
Cost | ||||
Balance at January 1, 2004 | $ | 13,128 | ||
Acquisitions | 8,848 | |||
Transfers to inventory | (4,016 | ) | ||
Translation adjustment | 767 | |||
Balance at December 31, 2004 | 18,727 | |||
Acquisitions | 5,975 | |||
Transfers to inventory | (2,959 | ) | ||
Translation adjustment | (479 | ) | ||
Balance at June 30, 2005 | 21,264 | |||
Acquisitions | 13,178 | |||
Acquisitions through business combinations | 5,107 | |||
Transfers to inventory | (8,478 | ) | ||
Translation adjustment | (1,123 | ) | ||
Balance at June 30, 2006 | 29,948 | |||
Acquisitions | 20,350 | |||
Acquisitions through business combinations | 299 | |||
Transfers to inventory | (12,601 | ) | ||
Translation adjustment | 5,513 | |||
Balance June 30, 2007 | $ | 43,509 | ||
Depreciation and impairment losses | ||||
Balance at January 1, 2004 | $ | — | ||
Depreciation charge for the period | (1,775 | ) | ||
Transfers to inventory | 626 | |||
Translation adjustment | (67 | ) | ||
Balance at December 31, 2004 | (1,216 | ) | ||
Depreciation charge for the period | (984 | ) | ||
Transfers to inventory | 545 | |||
Translation adjustment | 35 | |||
Balance at June 30, 2005 | (1,620 | ) | ||
Depreciation charge for the period | (1,475 | ) | ||
Transfers to inventory | 837 | |||
Translation adjustment | 83 | |||
Balance at June 30, 2006 | (2,175 | ) | ||
Depreciation charge for the period | (1,514 | ) | ||
Transfers to inventory | 1,467 | |||
Translation adjustment | (359 | ) | ||
Balance at June 30, 2007 | $ | (2,581 | ) |
Software | Goodwill | Trademarks | Other | Total | ||||||||||||
(-000-) | ||||||||||||||||
Cost | ||||||||||||||||
Balance at January 1, 2004 | $ | 710 | $ | 437 | $ | 300 | $ | — | $ | 1,447 | ||||||
Acquisitions through business combinations | — | 2,580 | — | — | 2,580 | |||||||||||
Other acquisitions | 52 | — | — | — | 52 | |||||||||||
Translation adjustment | 29 | 167 | 10 | — | 206 | |||||||||||
Balance at December 31, 2004 | 791 | 3,184 | 310 | — | 4,285 | |||||||||||
Acquisitions | 19 | — | — | — | 19 | |||||||||||
Translation adjustment | (18 | ) | (74 | ) | (7 | ) | — | (99 | ) | |||||||
Balance at June 30, 2005 | 792 | 3,110 | 303 | — | 4,205 | |||||||||||
Acquisitions through business combinations | — | 1,304 | — | — | 1,304 | |||||||||||
Other acquisitions | 99 | — | — | 45 | 144 | |||||||||||
Translation adjustment | (35 | ) | (158 | ) | (12 | ) | (2 | ) | (207 | ) | ||||||
Balance at June 30, 2006 | 856 | 4,256 | 291 | 43 | 5,446 | |||||||||||
Acquisitions through business combinations | — | 17 | — | — | 17 | |||||||||||
Other acquisitions | 24 | — | — | 42 | 66 | |||||||||||
Translation adjustment | 141 | 693 | 47 | 10 | 891 | |||||||||||
Balance at June 30, 2007 | $ | 1,021 | $ | 4,966 | $ | 338 | $ | 95 | $ | 6,420 | ||||||
Amortisation and impairment losses | ||||||||||||||||
Balance at January 1, 2004 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||
Amortization for the period | (318 | ) | — | — | — | (318 | ) | |||||||||
Write off on utilization of unrecognized tax assets arising from business combinations | — | (403 | ) | — | — | (403 | ) | |||||||||
Translation adjustment | (18 | ) | (24 | ) | — | — | (42 | ) | ||||||||
Balance at December 31, 2004 | (336 | ) | (427 | ) | — | — | (763 | ) | ||||||||
Amortization for the period | (159 | ) | — | — | — | (159 | ) | |||||||||
Write off on utilization of unrecognized tax assets arising from business combinations | — | (98 | ) | — | — | (98 | ) | |||||||||
Translation adjustment | 10 | 11 | — | — | 21 | |||||||||||
Balance at June 30, 2005 | (485 | ) | (514 | ) | — | — | (999 | ) | ||||||||
Amortization for the period | (347 | ) | — | — | (16 | ) | (363 | ) | ||||||||
Write off on utilization of unrecognized tax assets arising from business combinations | - | (678 | ) | — | — | (678 | ) | |||||||||
Translation adjustment | 28 | 38 | — | — | 66 | |||||||||||
Balance at June 30, 2006 | (804 | ) | (1,154 | ) | — | (16 | ) | (1,974 | ) | |||||||
Amortization for the period | (35 | ) | - | — | (8 | ) | (43 | ) | ||||||||
Translation adjustment | (134 | ) | (188 | ) | — | (2 | ) | (324 | ) | |||||||
Balance at June 30, 2007 | $ | (973 | ) | $ | (1,342 | ) | $ | — | $ | (26 | ) | $ | (2,341 | ) |
At June 30, | |||||||
2007 | 2006 | ||||||
(-000-) | |||||||
Trade payables | $ | 4,684 | $ | 7,714 | |||
Other payables | 2,394 | 985 | |||||
Unearned revenue | 1,495 | 413 | |||||
Fair value derivative | 68 | 21 | |||||
$ | 8,641 | $ | 9,133 |
At June 30, | |||||||
2007 | 2006 | ||||||
(-000-) | |||||||
Current liabilities | |||||||
Bank overdraft and invoice financing facility | $ | 6,217 | $ | 1,552 | |||
Current portion of bank loans | 3,167 | 4,257 | |||||
Other loans | 42 | 53 | |||||
Current portion of capital lease liabilities | 933 | 664 | |||||
10,359 | 6,526 | ||||||
Non-current liabilities | |||||||
Bank loan | 22,696 | 13,214 | |||||
Non-convertible notes | 10,724 | 7,957 | |||||
B class notes | - | 4,858 | |||||
Capital lease liabilities | 391 | 1,126 | |||||
$ | 33,811 | $ | 27,155 |
At June 30, | |||||||
2007 | 2006 | ||||||
(-000-) | |||||||
Financing facilities | |||||||
Bank overdraft | $ | 866 | $ | 745 | |||
Invoice financing facility | 6,366 | 5,476 | |||||
Secured bank loans | 40,969 | 31,366 | |||||
$ | 48,201 | $ | 37,587 | ||||
Facilities utilized at reporting date | |||||||
Bank overdraft | $ | 545 | $ | 682 | |||
Invoice financing facility | 5,672 | 870 | |||||
Secured bank loans | 37,084 | 25,808 | |||||
$ | 43,301 | $ | 27,360 | ||||
Facilities not utilized at reporting date | |||||||
Bank overdraft | $ | 321 | $ | 63 | |||
Invoice financing facility | 694 | 4,606 | |||||
Secured bank loans | 3,885 | 5,558 | |||||
$ | 4,900 | $ | 10,227 |
Year Ending | ||||
June 30, | (-000-) | |||
2008 | $ | 3,176 | ||
2009 | 5,365 | |||
2010 | 17,331 |
2007 | 2006 | ||||||||||||||||||
Minimum lease payments | Interest | Principal | Minimum lease payments | Interest | Principal | ||||||||||||||
(-000-) | |||||||||||||||||||
Less than one year | $ | 1,005 | $ | 72 | $ | 933 | $ | 800 | $ | 136 | $ | 664 | |||||||
Between one and five years | 421 | 30 | 391 | 1,197 | 71 | 1,126 | |||||||||||||
More than five years | — | — | — | — | — | — | |||||||||||||
$ | 1,426 | $ | 102 | $ | 1,324 | $ | 1,997 | $ | 207 | $ | 1,790 |
At June 30, | |||||||
2007 | 2006 | ||||||
(-000-) | |||||||
Current | |||||||
Liability for annual leave (vacation) | $ | 656 | $ | 566 | |||
Liability for long service leave (vacation) | 199 | 136 | |||||
Cash settled share-based transactions | 759 | — | |||||
$ | 1,614 | $ | 702 | ||||
Non Current | |||||||
Liability for long service leave | $ | 171 | $ | 341 | |||
Cash settled share-based transactions | — | 188 | |||||
171 | 529 | ||||||
Total employee benefits | $ | 1,785 | $ | 1,231 |
Leasehold | Deferred | |||||||||
Makegood | Consider- | |||||||||
costs | ation | Total | ||||||||
(-000-) | ||||||||||
Balance at January 1, 2004 | $ | — | $ | — | $ | — | ||||
Provisions made during the year | 6 | — | 6 | |||||||
Balance at December 31, 2004 | 6 | — | 6 | |||||||
Provisions made during the year | — | — | — | |||||||
Balance at June 30, 2005 | 6 | — | 6 | |||||||
Provisions made during the year | — | 429 | 429 | |||||||
Translation adjustment | — | (10 | ) | (10 | ) | |||||
Balance at June 30, 2006 | 6 | 419 | 425 | |||||||
Provisions made during the year | 17 | — | 17 | |||||||
Provisions used during the year | — | (451 | ) | (451 | ) | |||||
Unwind of discount | 2 | — | 2 | |||||||
Translation adjustment | 1 | 32 | 33 | |||||||
Balance at June 30, 2007 | $ | 26 | $ | — | $ | 26 | ||||
Balance at June 30, 2006: | ||||||||||
Current | $ | — | $ | 219 | $ | 219 | ||||
Non-current | 6 | 200 | 206 | |||||||
$ | 6 | $ | 419 | $ | 425 | |||||
Balance at June 30, 2007: | ||||||||||
Current | $ | — | $ | — | $ | — | ||||
Non-current | 26 | — | 26 | |||||||
$ | 26 | $ | — | $ | 26 |
At June 30, | |||||||
2007 | 2006 | ||||||
Share Capital | (-000-) | ||||||
8,154,000 and 2,160,000 Ordinary (Common) Shares in 2007 and 2006, respectively | $ | 3,441 | $ | 817 | |||
-0- and 4,322,590 A Class Shares in 2007 and 2006, respectively | — | 2,624 | |||||
-0- and 100 Class C Shares in 2007 and 2006, respectively | — | — | |||||
1 and -0- D Class Share in 2007 and 2006, respectively | 8,746 | — | |||||
$ | 12,187 | $ | 3,441 |
June 30, 2007 | Effective interest rate % | < 1 year | 1-2 years | 2-5 years | >5 years | Total | |||||||||||||
(-000-) | |||||||||||||||||||
Fixed rate | |||||||||||||||||||
Lease receivable | 15.8 | % | $ | 429 | $ | 408 | $ | 146 | $ | — | $ | 983 | |||||||
Finance lease liabilities | 9.2 | % | (934 | ) | (301 | ) | (89 | ) | — | (1,324 | ) | ||||||||
Bank loans | 6.0 | % | (1,347 | ) | (3,801 | ) | (8,979 | ) | — | (14,127 | ) | ||||||||
Other loans | 4.0 | % | (42 | ) | — | — | — | (42 | ) | ||||||||||
Non-convertible notes | 15.0 | % | — | — | (10,724 | ) | — | (10,724 | ) | ||||||||||
Variable rate | |||||||||||||||||||
Cash and cash equivalents | 4.2 | % | 886 | — | — | — | 886 | ||||||||||||
Interest rate swap | 6.0 | % | 300 | — | — | — | 300 | ||||||||||||
Bank loans | 7.5 | % | (1,820 | ) | (1,564 | ) | (8,352 | ) | — | (11,736 | ) | ||||||||
Bank overdrafts | BBSW + 1.65 | % | (6,217 | ) | — | — | — | (6,217 | ) | ||||||||||
$ | (8,745 | ) | $ | (5,258 | ) | $ | (27,998 | ) | $ | — | $ | (42,001 | ) |
June 30, 2006 | Effective interest rate % | < 1 year | 1-2 years | 2-5 years | >5 years | Total | |||||||||||||
(-000-) | |||||||||||||||||||
Fixed rate | |||||||||||||||||||
Lease receivable | 18.1 | % | $ | 245 | $ | 277 | $ | 288 | $ | — | $ | 810 | |||||||
Finance lease liabilities | 9.0 | % | (664 | ) | (806 | ) | (320 | ) | — | (1,790 | ) | ||||||||
Other loans | 4.2 | % | (53 | ) | — | — | — | (53 | ) | ||||||||||
Non-convertible notes | 15.0 | % | — | — | — | (7,957 | ) | (7,957 | ) | ||||||||||
B class notes | 15.0 | % | — | — | — | (4,858 | ) | (4,858 | ) | ||||||||||
Variable rate | |||||||||||||||||||
Cash and cash equivalents | 3.3 | % | 567 | — | — | — | 567 | ||||||||||||
Bank loans | BBSW + 1.10 | % | (3,210 | ) | (1,216 | ) | (7,838 | ) | — | (12,264 | ) | ||||||||
Interest rate swap | 6.0 | % | 96 | — | — | — | 96 | ||||||||||||
Bank overdrafts | BBSW + 1.65 | % | (1,552 | ) | — | — | — | (1,552 | ) | ||||||||||
Commercial bills | 6.9 | % | (998 | ) | (1,040 | ) | (3,169 | ) | — | (5,207 | ) | ||||||||
$ | (5,569 | ) | $ | (2,785 | ) | $ | (11,039 | ) | $ | (12,815 | ) | $ | (32,208 | ) |
Carrying amount | Fair value | Carrying amount | Fair value | ||||||||||
At June 30, | |||||||||||||
2007 | 2007 | 2006 | 2006 | ||||||||||
(-000-) | |||||||||||||
Cash and cash equivalents | $ | 886 | $ | 886 | $ | 567 | $ | 567 | |||||
Trade and other receivables | 12,543 | 12,543 | 7,110 | 7,110 | |||||||||
Lease receivable | 1,843 | 1,843 | 811 | 811 | |||||||||
Interest rate swap | 300 | 300 | 96 | 96 | |||||||||
Bank overdraft | (6,217 | ) | (6,217 | ) | (1,552 | ) | (1,552 | ) | |||||
Trade and other payables | (8,573 | ) | (8,573 | ) | (9,112 | ) | (9,112 | ) | |||||
Other loan | (42 | ) | (42 | ) | (53 | ) | (53 | ) | |||||
Finance lease liabilities | (1,324 | ) | (1,324 | ) | (1,790 | ) | (1,790 | ) | |||||
Bank loans | (20,195 | ) | (20,195 | ) | (13,754 | ) | (13,754 | ) | |||||
Held to maturity liabilities | (1,717 | ) | (1,717 | ) | — | — | |||||||
Commercial bills | (3,951 | ) | (3,951 | ) | (3,717 | ) | (3,717 | ) | |||||
Forward exchange contracts | (68 | ) | (68 | ) | (21 | ) | (21 | ) | |||||
Non-convertible notes | (10,724 | ) | (10,724 | ) | (7,957 | ) | (7,957 | ) | |||||
B class notes | — | — | (4,858 | ) | (4,858 | ) | |||||||
$ | (37,239 | ) | $ | (37,239 | ) | $ | (34,230 | ) | $ | (34,230 | ) |
At June 30, | ||||
2007 | 2006 | |||
Derivatives | 6.0% | 6.0% | ||
Loans and borrowings | 3.9% - 15.0% | 4.2% - 15.0% | ||
Leases | 9.2% | 9.0% | ||
Receivables | 15.8% | 18.1% |
(-000-) | ||||
Less than one year | $ | 3,191 | ||
One-two years | 1,199 | |||
Two-three years | 1,026 | |||
Three-four years | 629 | |||
Four-five years | 296 | |||
Thereafter | 423 | |||
$ | 6,764 |
At June 30, | |||||||
2007 | 2006 | ||||||
(-000-) | |||||||
Less than one year | $ | 364 | $ | 360 | |||
Between one and five years | 414 | 669 | |||||
More than five years | — | — | |||||
$ | 778 | $ | 1,029 |
Professional Sales and Hire | ||||||||||
Fair values | Fair value adjustments | Carrying amounts | ||||||||
(-000-) | ||||||||||
Container hire fleet | $ | 312 | $ | 88 | $ | 224 | ||||
Deferred tax liability | (26 | ) | (26 | ) | — | |||||
Net identifiable assets and liabilities | $ | 286 | $ | 62 | $ | 224 | ||||
Goodwill on acquisitions | $ | 17 | ||||||||
Consideration paid, satisfied in cash | 303 | |||||||||
Net cash outflow | $ | 303 |
Royal Wolf Hi-Tech | Australian Container Network | Cape Containers | |||||||||||||||||||||||||||||
Fair | Fair | Fair | |||||||||||||||||||||||||||||
Value | Value | value | |||||||||||||||||||||||||||||
Fair | Adjust- | Carrying | Fair | Adjust- | Carrying | Fair | Adjust- | Carrying | |||||||||||||||||||||||
Values | ments | Amounts | Values | ments | Amounts | Values | ments | Amounts | |||||||||||||||||||||||
(-000-) | |||||||||||||||||||||||||||||||
Property, plant and equipment | $ | 91 | $ | 22 | $ | 69 | $ | 147 | $ | 17 | $ | 130 | $ | 2 | $ | — | $ | 2 | |||||||||||||
Container hire fleet | 1,245 | 522 | 723 | 3,327 | 2,039 | 1,288 | 487 | 129 | 358 | ||||||||||||||||||||||
Inventories | 74 | 22 | 52 | 418 | 128 | 290 | — | — | — | ||||||||||||||||||||||
Trade and other receivables | 163 | — | 163 | — | — | — | — | — | — | ||||||||||||||||||||||
Cash and cash equivalents | 70 | — | 70 | — | — | — | — | — | — | ||||||||||||||||||||||
Interest-bearing loans and borrowings | (353 | ) | — | (353 | ) | — | — | — | — | — | — | ||||||||||||||||||||
Deferred tax liability | (170 | ) | (170 | ) | — | (655 | ) | (655 | ) | — | (39 | ) | (39 | ) | — | ||||||||||||||||
Trade and other payables | (170 | ) | — | (170 | ) | — | — | — | (13 | ) | — | (13 | ) | ||||||||||||||||||
Net identifiable assets and liabilities | $ | 950 | $ | 396 | $ | 554 | $ | 3,237 | $ | 1,529 | $ | 1,708 | $ | 437 | $ | 90 | $ | 347 | |||||||||||||
Goodwill on acquisitions | $ | 210 | $ | 911 | $ | 183 | |||||||||||||||||||||||||
Consideration paid, satisfied in cash* | 591 | 3,715 | 619 | ||||||||||||||||||||||||||||
Deferred consideration accrued | — | 432 | — | ||||||||||||||||||||||||||||
Cash (acquired) | (70 | ) | — | — | |||||||||||||||||||||||||||
Net cash outflow | $ | 521 | $ | 3,715 | $ | 619 |
Six Months | |||||||||||||
Year Ended | Ended | Year Ended | |||||||||||
June 30, | December 31, | ||||||||||||
2007 | 2006 | 2005 | 2004 | ||||||||||
(-000-) | |||||||||||||
Cash flows from operating activities | |||||||||||||
Profit/(loss) for the period | $ | 312 | $ | (428 | ) | $ | (177 | ) | $ | 284 | |||
Adjustments for: | |||||||||||||
Gain on sale of property, plant and equipment | (23 | ) | (21 | ) | (13 | ) | (21 | ) | |||||
Foreign exchange (gain) / loss | (134 | ) | (38 | ) | (252 | ) | 287 | ||||||
Unrealized loss on forward exchange contracts | 40 | 22 | — | — | |||||||||
Unrealized gain on interest rate swap | (174 | ) | (219 | ) | — | — | |||||||
Depreciation and amortization | 2,577 | 2,668 | 1,480 | 2,504 | |||||||||
Share of associates net profit | — | — | (133 | ) | (68 | ) | |||||||
Investment income | (239 | ) | (156 | ) | (80 | ) | (87 | ) | |||||
Interest expense | 4,378 | 3,017 | 1,127 | 2,397 | |||||||||
Income tax (benefit) / expense | 490 | 214 | 75 | 400 | |||||||||
Cash settled share based payment expenses | 336 | 222 | 40 | 96 | |||||||||
Operating profit before changes in working capital and provisions | 7,563 | 5,281 | 2,067 | 5,792 | |||||||||
(Increase) / decrease in trade and other receivables | (5,017 | ) | (1,778 | ) | (458 | ) | (977 | ) | |||||
(Increase) / decrease in inventories | 12,017 | 4,959 | (334 | ) | 2,882 | ||||||||
Increase / (decrease) in trade and other payables | (1,869 | ) | 3,299 | 1,518 | (2,762 | ) | |||||||
Increase / (decrease) in provisions and employee benefits | 12 | 411 | 226 | 33 | |||||||||
12,706 | 12,172 | 3,019 | 4,968 | ||||||||||
Interest (paid)/received, net | (3,799 | ) | (2,118 | ) | (902 | ) | (1,182 | ) | |||||
Income taxes (paid)/received | 49 | - | (587 | ) | 576 | ||||||||
Net cash from operating activities | $ | 8,956 | $ | 10,054 | $ | 1,530 | $ | 4,362 |