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U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
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Commission File Number 1-12804
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mobile mini, inc.
(Exact name of registrant as specific in its charter)
Delaware 86-0748362
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1834 West 3rd Street
Tempe, Arizona 85281
(Address of principal executive offices)
(602) 894-6311
(Registrant's telephone number, including area code)
Indicate by check whether the registrant (1) has filed all reports
required to be filed by Section 13 or 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 past 90 days.
Yes X No ,
----------- -----------
As of August 7, 1998, there were outstanding 7,878,583 shares of the
issuer's common stock, par value $.01.
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1
<PAGE>
MOBILE MINI, INC.
INDEX TO FORM 10-Q FILING
FOR THE QUARTER ENDED JUNE 30, 1998
TABLE OF CONTENTS PAGE
NUMBER
PART I.
FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
June 30, 1998 (unaudited) and December 31, 1997
Consolidated Statements of Operations 4
Three Months and Six Months ended June 30, 1998
and June 30, 1997 (unaudited)
Consolidated Statements of Cash Flows 6
Six Months Ended June 30, 1998 and June 30, 1997
(unaudited)
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II.
OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 13
SIGNATURES 14
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MOBILE MINI, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS June 30, 1998 December 31, 1997
(Unaudited)
------------- -----------------
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 616,759 $ 1,005,204
RECEIVABLES, net of allowance for doubtful accounts
of $1,031,000 and $893,000, respectively 6,728,735 6,259,476
INVENTORIES 7,426,423 4,748,316
CONTAINER LEASE FLEET, net 60,059,816 50,906,908
PROPERTY PLANT AND EQUIPMENT, net 18,693,130 18,011,916
DEPOSITS AND PREPAID EXPENSES 719,003 898,615
OTHER ASSETS 3,089,755 2,221,587
----------- -----------
Total assets $97,333,621 $84,052,022
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
ACCOUNTS PAYABLE $ 4,075,176 $ 2,676,634
ACCRUED LIABILITIES 2,770,188 3,104,747
LINE OF CREDIT 42,364,950 35,883,104
NOTES PAYABLE 5,289,596 6,123,049
OBLIGATIONS UNDER CAPITAL LEASES 3,607,586 5,371,603
SUBORDINATED NOTES, net 6,673,956 6,647,874
DEFERRED INCOME TAXES 6,203,749 5,217,619
----------- -----------
Total liabilities 70,985,201 65,024,630
----------- -----------
STOCKHOLDERS' EQUITY:
Common stock; $.01 par value, 17,000,000 shares
authorized, 7,868,933 and 6,799,524 issued and
outstanding at June 30, 1998 and December 31,
1997, respectively 78,689 67,995
Additional paid-in capital 21,537,229 16,206,166
Common stock to be issued, 85,468 shares 500,000 --
Retained earnings 4,232,502 2,753,231
----------- -----------
Total stockholders' equity 26,348,420 19,027,392
----------- -----------
Total liabilities and stockholders' equity $97,333,621 $84,052,022
=========== ===========
</TABLE>
See the accompanying notes to these consolidated balance sheets.
3
<PAGE>
MOBILE MINI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended June 30,
---------------------------
1998 1997
------------ ------------
REVENUES:
Leasing $ 8,246,006 $ 5,659,594
Container and other sales 6,070,060 6,196,750
Other 84,416 337,451
------------ ------------
14,400,482 12,193,795
COSTS AND EXPENSES:
Cost of container and other sales 4,557,310 4,564,586
Leasing, selling and general expenses 6,219,073 5,010,835
Depreciation and amortization 703,701 529,709
------------ ------------
INCOME FROM OPERATIONS 2,920,398 2,088,665
OTHER INCOME (EXPENSE):
Interest income 5,398 --
Interest expense (1,348,973) (1,158,744)
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES 1,576,823 929,921
PROVISION FOR INCOME TAXES 630,729 409,164
------------ ------------
NET INCOME $ 946,094 $ 520,757
============ ============
EARNINGS PER SHARE:
BASIC:
Net income $ 0.12 $ 0.08
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 7,948,392 6,739,324
============ ============
DILUTED:
Net income $ 0.11 $ 0.08
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON AND
COMMON SHARE EQUIVALENTS OUTSTANDING 8,476,643 6,751,922
============ ============
See the accompanying notes to these consolidated statements
4
<PAGE>
MOBILE MINI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30,
-------------------------
1998 1997
------------ ------------
REVENUES:
Leasing $ 15,758,918 $ 10,654,704
Container and other sales 9,198,460 10,739,381
Other 189,327 449,166
------------ ------------
25,146,705 21,843,251
COSTS AND EXPENSES:
Cost of container and other sales 6,704,887 8,010,356
Leasing, selling and general expenses 11,783,454 9,292,185
Depreciation and amortization 1,370,472 1,001,876
------------ ------------
INCOME FROM OPERATIONS 5,287,892 3,538,834
OTHER INCOME (EXPENSE):
Interest income 16,685 --
Interest expense (2,839,125) (2,248,623)
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES 2,465,452 1,290,211
PROVISION FOR INCOME TAXES 986,181 567,692
------------ ------------
NET INCOME $ 1,479,271 $ 722,519
============ ============
EARNINGS PER SHARE:
BASIC:
Net income $ 0.19 $ 0.11
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 7,695,913 6,739,324
============ ============
DILUTED:
Net income $ 0.18 $ 0.11
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON AND
COMMON SHARE EQUIVALENTS OUTSTANDING 8,292,986 6,741,746
============ ============
See the accompanying notes to these consolidated statements
5
<PAGE>
MOBILE MINI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1998 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,479,271 $ 722,519
Adjustments to reconcile income to net cash used in
operating activities:
Reserve for doubtful accounts receivable 385,698 269,751
Amortization of deferred loan costs 306,972 245,921
Amortization of warrants issuance discount 26,082 --
Depreciation and amortization 1,370,472 1,001,876
Gain on disposal of property, plant and equipment (3,541) 54,118
Deferred income taxes 986,130 568,540
Changes in certain assets and liabilities:
Increase in receivables (854,957) (1,955,452)
Increase in inventories (2,678,107) (2,367,519)
Decrease in deposits and prepaids 179,612 171,230
Increase in other assets (675,140) (7,372)
Increase in accounts payable 1,398,542 622,734
(Decrease) increase in accrued liabilities (334,559) 182,872
------------ ------------
Net cash provided by (used in) operating activities 1,586,475 (490,782)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net purchases of container lease fleet (9,578,824) (5,147,114)
Net purchases of property, plant, and equipment (1,622,229) (916,669)
------------ ------------
Net cash used in investing activities (11,201,053) (6,063,783)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under lines of credit 6,481,846 7,370,426
Proceeds from issuance of notes payable -- 314,625
Principal payments on notes payable (833,453) (720,417)
Principal payments on capital lease obligations (1,764,017) (659,809)
Conversion of warrants 4,657,432 --
Issuance of stock 684,325 --
------------ ------------
Net cash provided by financing activities 9,226,133 6,304,465
------------ ------------
NET DECREASE IN CASH (388,445) (250,100)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 1,005,204 736,543
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 616,759 $ 486,443
============ ============
</TABLE>
See the accompanying notes to these consolidated statements.
6
<PAGE>
MOBILE MINI, INC. AND SUBSIDIARIES - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q. Accordingly, they do
not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations, and
cash flows for all periods presented have been made. The results of operations
for the six month period ended June 30, 1998 are not necessarily indicative of
the operating results that may be expected for the entire year ending December
31, 1998. These financial statements should be read in conjunction with the
Company's December 31, 1997 financial statements and accompanying notes thereto.
Certain amounts in the 1997 financial statements have been reclassified to
conform with the 1998 financial statement presentation.
NOTE B - The Company adopted SFAS No. 128, Earnings per Share in 1997. Pursuant
to SFAS No. 128, basic earnings per common share are computed by dividing net
income by the weighted average number of shares of common stock outstanding
during the year. Diluted earnings per common share are determined assuming that
options were exercised at the beginning of each year or at the time of issuance.
SFAS No. 128 is effective for financial statements for both interim periods
presented and as a result, all prior period earnings per share data presented
has been restated.
NOTE C - The Company's outstanding Common Stock Purchase Warrants, issued in
connection with the Company's initial public offering, expired on February 17,
1998. Prior to their expiration, 1,046,212 of the 1,067,500 warrants were
exercised, generating approximately $5.2 million in cash.
NOTE D - In January 1998, the Company acquired the assets of Nevada Storage
Containers, a Las Vegas, Nevada based container leasing and sales business, for
approximately $1.4 million in cash and approximately 85,000 shares of the
Company's common stock valued at $500,000. Under the purchase agreement, the
shares of common stock will not be issued until one year from the closing date.
NOTE E - In April 1998, the Company acquired the assets of Aspen Instant
Storage, a company engaged in container leasing and sales in Oklahoma City,
Oklahoma. The purchase price was approximately $540,000 in cash and
approximately 18,000 shares of the Company's common stock valued at $184,000.
In April 1998, the Company also opened a new leasing and sales branch in
Albuquerque, New Mexico. With this new location, the Company now operates 11
leasing and sales offices in 6 states, in addition to its dealer and
telecommunication divisions and its manufacturing facility.
NOTE F - Inventories are stated at the lower of cost or market, with cost being
determined under the specific identification method. Market is the lower of
replacement cost or net realizable value. Inventories consisted of the following
at:
June 30, 1998 December 31, 1997
------------- -----------------
Raw material and supplies $4,919,579 $3,241,962
Work-in-process 1,156,307 631,399
Finished containers 1,350,537 874,955
---------- ----------
$7,426,423 $4,748,316
========== ==========
NOTE G - Property, plant and equipment consisted of the following at:
7
<PAGE>
June 30, 1998 December 31, 1997
------------- -----------------
Land $ 708,555 $ 708,555
Vehicles and equipment 13,974,746 12,721,917
Buildings and improvements 6,952,163 6,739,190
Office fixtures and equipment 3,247,958 3,109,904
------------ ------------
24,883,422 23,279,566
Less accumulated depreciation (6,190,292) (5,267,650)
------------ ------------
$ 18,693,130 $ 18,011,916
============ ============
NOTE H - The Company maintains a container lease fleet consisting of refurbished
or manufactured storage containers and office units that are leased to customers
with varying terms. Depreciation is provided using the straight-line method with
an estimated useful life of 20 years and a salvage value estimated at 70% of
cost. In management's opinion, estimated salvage values do not cause carrying
values to exceed net realizable value. Normal repairs and maintenance to the
lease fleet are expensed as incurred. As of June 30, 1998, the Company's lease
fleet, before depreciation and excluding portable modular buildings under
capital lease agreements, was $62.2 million as compared to $50.9 million at
December 31, 1997. A portion of this increase reflects the acquisition of Nevada
Storage Container's and Aspen Instant Storage's container lease fleets.
NOTE I - In June 1998, the Company sold the remaining portable modular buildings
that were under lease agreements and repaid the underlying capital lease
obligations related to these buildings. The revenues from these sales are
included in the accompanying statements of operations.
NOTE J - The Company has adapted FASB No. 130 Reporting Comprehensive Income
effective January 1, 1998. The Company, however, has not incurred transactions
that are within the definitions of "Comprehensive Income" and accordingly, is
not required to make additional disclosures in the accompanying consolidated
financial statements for the current year or for the same period represented in
the prior year.
NOTE K - In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. Statement 133 provides a comprehensive and consistent
standard for the recognition and measurement of derivatives and hedging
activities. The new statement requires all derivatives to be recorded in the
balance sheet as either an asset or liability measured at its fair value.
Statement 133 is effective for fiscal years beginning after June 15, 1999. The
Company believes the adoption of Statement No. 133 currently would not have any
material impact in the Company's financial statements or its business
operations.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Three Months Ended June 30, 1998 Compared to
Three Months Ended June 30, 1997
Revenues for the quarter ended June 30, 1998 were $14,400,000, which
represents an 18.1% increase over revenues of $12,194,000 for the quarter ended
June 30, 1997. The Company has transitioned from primarily a seller of
containers and other structures, to primarily a lessor of containers and
portable offices. A change in the composition of the Company's revenues and
expense have occurred as the Company has continued to expand and concentrate its
efforts on leasing operations generating higher operating margins. This change
has resulted in a deferral of the recognition of revenues and corresponding
container costs over the term of the leases. As such, income from operations as
a percentage of revenues increased 39.8% over the same period of the prior year.
Revenues from the leasing of portable storage containers and office units
increased 45.7%, while revenues from the sales of the Company's products
decreased 2.0%. The increase in lease revenues resulted from a 45.0% increase in
the average number of containers on lease as compared to the same period in the
prior year in addition to an increase to the average rental rate per unit. The
Company's new leasing locations in Nevada, Oklahoma and New Mexico also
contributed to a portion of this growth. The decrease in container sales
primarily reflects the Company's continued emphasis on leasing rather than
selling containers and lower sales levels in the Company's dealer division.
Cost of container and other sales as a percentage of container and
other sales for the quarter ended June 30, 1998 was 75.1% compared to 73.7% for
the same quarter in 1997. This increase primarily resulted from the sale during
1998 of certain low-margin modular buildings that were previously under lease
agreements. With this sale complete, the Company owns no additional modular
buildings.
Leasing, selling and general expenses increased by 24.1% for the
quarter ended June 30, 1998 as compared to the quarter ended June 30, 1997. As a
percentage of revenues, leasing, selling and general expenses for the quarter
ended June 30, 1998 was 43.2% as compared to 41.1% for the same quarter in 1997.
This increase resulted from higher costs associated with the 45.7% increase in
lease revenues and additional administrative costs to accommodate the increased
growth.
Interest expense increased by 16.4% during the second quarter ended
June 30, 1998 compared to the prior year period. This resulted from the
substantial growth in the Company's lease fleet and the related borrowings to
finance that growth, in addition to interest costs related to the Company's
subordinated debt which was issued in October 1997, partially offset by reduced
interest rates associated with the Company's amended revolving line of credit.
Depreciation and amortization increased by 32.8% for the three months
ended June 30, 1998 as compared to the prior year period. This resulted from the
substantial increase in the Company's lease fleet and from the addition of
equipment at the Company's various locations to support growth in the size of
the lease fleet.
The Company posted a 81.7% increase in net income to $946,000, or $0.11
per share diluted for the quarter ended June 30, 1998, compared to net income of
$521,000 or $0.08 per share diluted during the same period in the prior year.
This increase is primarily a result of a 45.7% increase in container leasing
revenues, which produce higher net margins than container sales, partially
offset by higher administrative expenses and increased interest costs. The
Company's effective tax rate was reduced to 40.0% at June 30, 1998 from 44.0% at
June 30, 1997. Diluted earnings per share includes a 25.5% increase in the
weighted average number of common and common share equivalents outstanding when
compared to the same period in the prior year.
9
<PAGE>
Six Months Ended June 30, 1998 Compared to
Six Months Ended June 30, 1997
Revenues for the six months ended June 30, 1998 were $25,147,000, which
represents a 15.1% increase over revenues of $21,843,000 for the six months
ended June 30, 1997. Revenues from the leasing of portable storage containers
and office units increased 47.9% during the first six months of 1998 as compared
to the same period in 1997, while revenues from the sales of the Company's
products decreased 14.3%. The increase in lease revenues resulted from a 4.2%
increase in the average per unit container revenue and a 41.9% increase in the
average number of containers on lease as compared to the same period in the
prior year. The Company's new leasing locations in Nevada, Oklahoma and New
Mexico also contributed to a portion of this growth. The decrease of container
sales primarily reflects the emphasis on leasing rather than selling containers
and from lower sales levels in the Company's dealer division. The Company's
other revenues decreased $260,000 in the first six months of 1998 or compared to
the same period in 1997.
Cost of container and other sales as a percentage of container and
other sales for the six months ended June 30, 1998 was 72.9% compared to 74.6%
for the same period in 1997.
Leasing, selling and general expenses increased by 26.8% for the six
months ended June 30, 1998 as compared to the six months ended June 30, 1997. As
a percentage of revenues, leasing, selling and general expenses for the six
months ended June 30, 1998 was 46.9% as compared to 42.5% for the six months
ended June 30, 1997. This increase resulted from increased expenses associated
with the 47.9% increase in lease revenues and from additional administrative
costs to handle this increased growth.
Interest expense increased by 26.3% during the six months ended June
30, 1998 compared to the prior year period. This resulted from the substantial
growth in the Company's lease fleet and the related borrowings to finance that
growth, in addition to interest costs related to the Company's subordinated debt
which was issued in October 1997, partially offset by reduced interest rates
associated with the Company's amended revolving line of credit.
Depreciation and amortization increased by 36.8% for the six months
ended June 30, 1998 as compared to the prior year period. This results from the
increase in the Company's lease fleet and from the addition of equipment at the
Company's various locations to support this growth.
The Company posted a 104.7% increase in net income to $1,479,000, or
$0.18 per share diluted for the six months ended June 30, 1998 compared to net
income of $723,000 or $0.11 per share diluted during the same period in the
prior year. This increase is primarily a result of an increase in the container
leasing revenues, which produce higher net margins than container sales,
partially offset by higher administrative expenses and increased interest costs.
Diluted earnings per share includes a 23.0% increase in the weighted average
number of common and common share equivalents outstanding when compared to the
same period in the prior year. The Company's effective tax rate was reduced to
40.0% at June 30, 1998 from 44.0% at June 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company plans to continue to increase the size of its container
lease fleet and related property, plant and equipment. The recent acquisitions
of Nevada Storage Containers and Aspen Instant Storage and the growth in the
container lease fleet and related property, plant and equipment was primarily
funded through the Company's revolving line of credit, under its Senior Credit
Agreement dated March 28, 1996, as amended, with BT Commercial Corp., as agent
for a group of lenders (the "Senior Credit Agreement") which permits borrowings
based on the level of the Company's inventories, receivables and the size of its
container lease fleet. The $5.2 million of cash generated from the exercise of
the Company's Common Stock Purchase Warrants was used to reduce the revolving
line of credit thereby making these funds available to finance this growth.
10
<PAGE>
On May 12, 1998, the Company and its lenders amended the terms of the
Senior Credit Agreement. The revolving line of credit was increased from $40
million to $60 million, principal amortization on the $6 million term loan under
the Senior Credit Agreement was reduced, the term of the Senior Credit Agreement
was extended for an additional two years, and the interest rate was reduced. The
interest rate is now determined quarterly based on the Company's ratio of funded
debt to earnings before interest, taxes, depreciation and amortization (EBITDA).
The interest rate was initially adjusted from 3% to 1.75% above the Eurodollar
rate based upon the Company's leverage ratio at the time the amendment to the
Senior Credit Agreement became effective. This rate remains unchanged as of the
period ended June 30, 1998.
As of June 30, 1998, the Company had borrowings outstanding under the
revolving line of credit of $42,365,000. These borrowings allowed the Company to
increase the container lease fleet by $11,263,000, acquire the assets of two
companies (Nevada Storage Containers and Aspen Instant Storage) and open a new
leasing location in Albuquerque, New Mexico. A portion of the lease fleet
increase includes the acquisitions. At June 30, 1998, $9,781,000 of additional
borrowings were available under the revolving line of credit. As of August 7,
1998, the Company had borrowings outstanding of $44,994,000 and $9,526,000 of
additional borrowing availability under the revolving line of credit.
During the six months ended June 30, 1998, the Company's operations
provided cash of $1,586,000. This results from earnings before taxes, which are
deferred, a continuing emphasis on increasing credit and extending payment terms
with major suppliers, increased collection effort to reduce outstanding
receivables and the cash sale of the Company's modular buildings inventory. This
was partially offset by an increase in inventory, and accounts receivables
related to the expansion of the Company's business and an increase in other
assets as well as a decrease in accrued liabilities.
The Company invested $11,201,000 in its container lease fleet and other
equipment during the six months ended June 30, 1998. This amount is net of
$1,130,000 of sales from the container lease fleet.
Cash flow provided by financing activities totaled $9,226,000 for the
six months ended June 30, 1998. The primary source of financing was $6,482,000,
of net borrowings on the Company's revolving line of credit and approximately
$5,200,000 received upon the exercise of warrants to purchase 1,046,212 shares
of the Company's common stock prior to their expiration on February 17, 1998.
The warrants had been issued in connection with the Company's initial public
offering in 1994. The warrant proceeds were used to initially reduce the line of
credit and to fund the increase in the container lease fleet, related property,
plant and equipment, inventory levels, and the acquisition of Nevada Storage
Containers and Aspen Instant Storage. Cash flow from financing activities was
partially offset by principal payments on notes payable and capitalized leases
and the payoff on capitalized leases related to the sale of modular buildings
previously under lease agreements.
The Company believes that its available resources will be sufficient to
maintain its current level of operations and permit continued growth over the
next 12 months. The Company expects to use a wide variety of financing sources
to fund its future growth, including public and private debt and equity, and
secured or unsecured bank financing, among other sources. There can be no
assurances that financing from such sources will be available in the future, or
if available that such financing will be available on terms acceptable to the
Company.
EFFECTS OF INFLATION
The results of operations of the Company for the periods discussed have
not been significantly affected by inflation.
FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS, AND "SAFE HARBOR" STATEMENT
UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements in this Report which include such words as "believe",
"intends" or "anticipates", such as the statement regarding the Company's
ability to meet its obligations and capital needs during the next 12
11
<PAGE>
months, are forward-looking statements. The occurrence of one or more
unanticipated events, however, including a decrease in cash flow generated from
operations, a material increase in the borrowing rates under the Senior Credit
Agreement (which rates are based on the prime rate or the Eurodollar rates in
effect from time to time), a material increase or decrease in prevailing market
prices for used containers, or a change in general economic conditions resulting
in decreased demand for the Company's products, could cause actual results to
differ materially from anticipated results and have a material adverse effect on
the Company's ability to meet its obligations and capital needs, and cause
future operating results and other events not to occur as presently anticipated.
The Company issued $6.9 million of senior subordinated notes in October 1997, in
a public offering pursuant to a Registration Statement. That Registration
Statement and the Prospectus, dated October 8, 1997, which is a part of it (the
"Prospectus"), include a section entitled "Risk Factors", which describes
certain factors that may affect future operating results of the Company. That
section is hereby incorporated by reference in this Report. Those factors should
be considered carefully in evaluating an investment in the Company's Common
Stock. If you do not have a copy of the Prospectus, you may obtain one by
requesting it from the Company's Investor Relations Department at (602) 894-6311
or by mail at Mobile Mini, Inc., 1834 West Third Street, Tempe, Arizona 85281.
The Company's filings with the SEC may be accessed at the SEC's World Wide Web
site at http://www.sec.gov.
YEAR 2000 COMPLIANCE
The Company has upgraded its primary system using software that has
been certified by the vendor to be fully compliant with the Year 2000
transactions. The Company is continuing to test this software for such
compliance in addition to all of the other Company systems. The Company has
identified the critical areas that require Year 2000 compliance and continues to
evaluate these issues related to the business operations. Contingency plans are
being established where the Company is dependent on outside service providers.
The majority of this project is being handled by currently employed personnel
and the Company, at this time, does not anticipate any material impact to its
financial condition or results of operations to become Year 2000 compliant.
However, because of the numerous variables and uncertainties associated with the
Year 2000 compliance, including the effect on the Company of non compliance by
third parties, availability of certain resources and assumptions of future
events, there can be no guarantee that our operations will not be materially or
adversely affected by Year 2000 compliance problems. While the contingency plans
are intended to minimize any negative impacts on Mobile Mini by outside
providers, there can be no assurance that the plans will be successful and that
any such disruptions will not have a material adverse effect to its financial
condition or results of operations.
12
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Number Description
11 Computation of Earnings per Share for the
Three Month and Six Month Period ended
June 30, 1998 and 1997
27 Selected Financial Data
(b) Reports on Form 8-K: none
Items 1 through 5 are not applicable and have been omitted.
13
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
MOBILE MINI, INC.
(Registrant)
Dated: 8/13/98 /s/ Larry Trachtenberg
- -------------------------- -----------------------------
Larry Trachtenberg
Chief Financial Officer &
Executive Vice President
14
Exhibit 11
MOBILE MINI, INC.
STATEMENT RE: COMPUTATION OF EARNING PER SHARE
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
BASIC:
Common shares outstanding, beginning of period 6,799,524 6,739,324 6,799,524 6,739,324
Effect of weighting shares:
Weighted common shares issued 1,063,400 820,365
Common stock to be issued 85,468 76,024
---------- ---------- ---------- ----------
Weighted average number of common shares
outstanding 7,948,392 6,739,324 7,695,913 6,739,324
========== ========== ========== ==========
Net income available for common stock $ 946,094 $ 520,756 $1,479,271 $ 722,519
========== ========== ========== ==========
Earnings per share $ 0.12 $ 0.08 $ 0.19 $ 0.11
========== ========== ========== ==========
DILUTED:
Common shares outstanding, beginning of period 6,799,524 6,739,324 6,799,524 6,739,324
Effect of weighting shares:
Weighted common shares issued 1,063,400 820,365
Employee stock options 339,707 12,598 296,353 2,422
Convertible warrants 100,681 230,051
IPO stock purchase options 87,863 70,669
Common stock to be issued 85,468 76,024
---------- ---------- ---------- ----------
Weighted average number of common and common
equivalent shares outstanding 8,476,643 6,751,922 8,292,986 6,741,746
========== ========== ========== ==========
Net income available for common stock $ 946,094 $ 520,756 $1,479,271 $ 722,519
========== ========== ========== ==========
Earnings per share $ 0.11 $ 0.08 $ 0.18 $ 0.11
========== ========== ========== ==========
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 616,759
<SECURITIES> 0
<RECEIVABLES> 7,759,745
<ALLOWANCES> 1,031,010
<INVENTORY> 7,426,423
<CURRENT-ASSETS> 15,490,920
<PP&E> 24,883,422
<DEPRECIATION> 6,190,292
<TOTAL-ASSETS> 97,333,621
<CURRENT-LIABILITIES> 9,964,212
<BONDS> 0
0
0
<COMMON> 78,689
<OTHER-SE> 500,000
<TOTAL-LIABILITY-AND-EQUITY> 97,333,621
<SALES> 9,198,460
<TOTAL-REVENUES> 25,146,705
<CGS> 6,704,887
<TOTAL-COSTS> 19,858,813
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,822,440
<INCOME-PRETAX> 2,465,452
<INCOME-TAX> 986,181
<INCOME-CONTINUING> 1,479,271
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,479,271
<EPS-PRIMARY> 0.19
<EPS-DILUTED> 0.18
</TABLE>
