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SEACUBE CONTAINER LEASING LTD
Symbol U : BOX
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Seacube Container Leasing Ltd. Reports Fourth Quarter and Full Year 2012 Results

2013-02-20 16:30 ET - News Release

Fourth Quarter 2012 and Full Year 2012 Highlights

  • For the fourth quarter, adjusted net income decreased 4% year-over-year to $12.9 million, or $0.63 per diluted common share. Fourth quarter net income decreased 3% year-over-year to $11.9 million. The decreases are attributable to one-time expenses of $0.8 million related to the previously announced pending acquisition by Ontario Teachers’ Pension Plan (“OTPP”).
  • Full year adjusted net income increased 17% to $51.5 million, or $2.54 per diluted common share. Full year net income increased 18% year-over-year to $46.4 million.
  • Total revenue increased 9% year-over-year to $51.0 million for the fourth quarter, and 17% to $198.9 million for the full year.
  • Invested approximately $410.2 million in equipment in 2012.
  • In 2013, committed to purchase approximately $129.5 million in equipment for delivery through March 2013; 76% has been committed to long-term leases.


Company Website: http://www.seacubecontainers.com
PARK RIDGE, N.J. -- (Business Wire)

SeaCube Container Leasing Ltd. (SeaCube) (NYSE: BOX), one of the world’s largest lessors of intermodal freight containers, today reported results for the fourth quarter and year ended December 31, 2012.

Adjusted net income(1) was $12.9 million for the fourth quarter of 2012 compared to $13.4 million in the fourth quarter of 2011, a decrease of 4%. The decrease can be attributed to one-time expenses of $0.8 million incurred during the fourth quarter related to the pending acquisition by OTPP. For the fourth quarter of 2012, adjusted net income per diluted common share was $0.63. Adjusted net income per diluted common share would have been $0.67 without the one-time transaction expenses. The Company focuses on adjusted net income because it excludes the impact of non-cash interest expense and non-recurring items that are unrelated to the operating performance of the business.

Total revenue was $51.0 million for the fourth quarter of 2012 compared to $46.7 million for the fourth quarter of 2011, an increase of 9%. Utilization continued to be strong with average fourth quarter utilization of 97.8%. Adjusted EBITDA(1) was $73.8 million for the fourth quarter of 2012 compared to $64.5 million in the fourth quarter of 2011.

The Company reported net income of $11.9 million for the fourth quarter of 2012 compared to $12.3 million for the fourth quarter of 2011. Net income per diluted common share was $0.58 for the fourth quarter of 2012 compared to $0.61 for the fourth quarter of 2011.

Adjusted net income(1) was $51.5 million for the year ended December 31, 2012 compared to $44.1 million for the year ended December 31, 2011, an increase of 17%. For the year ended December 31, 2012, adjusted net income per diluted common share was $2.54.

Total revenue was $198.9 million for the year ended December 31, 2012 compared to $169.5 million for the year ended December 31, 2011, an increase of 17%. Adjusted EBITDA(1) was $289.5 million for the year ended December 31, 2012 compared to $239.8 million for the year ended December 31, 2011.

The Company reported net income of $46.4 million for the year ended December 31, 2012 compared to $39.4 million for the year ended December 31, 2011. Net income per diluted common share was $2.29 for the year ended December 31, 2012 compared to $1.96 for the year ended December 31, 2011.

About SeaCube Container Leasing Ltd.

SeaCube Container Leasing Ltd. is one of the world’s largest container leasing companies based on total assets. Containers are the primary means by which products are shipped internationally because they facilitate the secure and efficient movement of goods via multiple transportation modes, including ships, rail and trucks. The principal activities of our business include the acquisition, leasing, re-leasing and subsequent sale of refrigerated and dry containers and generator sets. We lease our containers primarily under long-term contracts to a diverse group of the world’s leading shipping lines. For more information regarding SeaCube Container Leasing Ltd. please visit www.seacubecontainers.com.

Safe Harbor

Certain items in this press release and other information we provide from time to time, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not necessarily limited to, statements relating to future events and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as ‘‘outlook,’’ ‘‘believes,’’ ‘‘expects,’’ ‘‘potential,’’ ‘‘continues,’’ ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘could,’’ ‘‘seeks,’’ ‘‘approximately,’’ ‘‘predicts,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘estimates,’’ ‘‘anticipates,’’ ‘‘target,’’ ‘‘projects,’’ ‘‘contemplates’’ or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based upon our historical performance and on our current plans, estimates and expectations in light of information currently available to us. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. For a discussion of such risks and uncertainties, see “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2011. Furthermore, SeaCube is under no obligation to update or alter any of the forward-looking statements contained in this press release as a result of new information, future events or otherwise, unless required by law.

(1)     Adjusted net income, adjusted net income per dilutd common share, and adjusted EBITDA are non-GAAP measurements. The Company’s definition and calculations are outlined in the attached schedules.

     
SeaCube Container Leasing Ltd.
 
Consolidated Balance Sheets
(Amounts in thousands, except share data)
(unaudited)
 
December 31,
2012     2011
Assets
Cash and cash equivalents $ 16,518 $ 15,006
Restricted cash 36,727 29,649
Accounts receivable, net of allowance of $1,712 and $3,290, respectively 41,209 41,570
Net investment in direct finance leases 627,859 639,248

Leasing equipment, net of accumulated depreciation of $176,631 and

 

 

$171,993, respectively

961,232

748,945

Goodwill 22,483 22,483
Shareholder note 8,498
Other assets   22,863     19,903  
Total assets $ 1,728,891   $ 1,525,302  
Liabilities and shareholders’ equity
Liabilities:
Equipment purchases payable $ 37,574 $ 26,305
Accrued expenses and other liabilities 33,585 37,097
Fair value of derivative instruments 27,430 38,750
Deferred income 1,070 2,044
Deferred income taxes 728 1,532
Debt:
Due within one year 180,206 161,171
Due after one year   1,192,492     1,039,274  
Total debt   1,372,698     1,200,445  
Total liabilities   1,473,085     1,306,173  
Commitments and contingencies
Shareholders’ equity:
Preferred shares, $0.01 par value, 100,000,000 shares authorized

Common shares, $0.01 par value, 400,000,000 shares authorized;

20,288,359 shares issued and outstanding at December 31, 2012;

20,163,359 shares issued and outstanding at December 31, 2011

202 201
Additional paid in capital 220,659 218,879
Retained earnings 56,426 32,916
Accumulated other comprehensive loss   (21,481 )   (32,867 )
Total shareholders’ equity   255,806     219,129  
Total liabilities and shareholders’ equity $ 1,728,891   $ 1,525,302  
 
         
SeaCube Container Leasing Ltd.
 
Consolidated Statements of Operations
(Amounts in thousands, except per share amounts)
(unaudited)
 
Three months ended
December 31,
Year ended
December 31,
2012     20112012     2011
Revenues:
Equipment leasing revenue $ 32,181 $ 29,425 $ 122,888 $ 104,869
Finance revenue 15,660 14,056 64,762 54,337
Other revenue   3,118     3,184     11,265     10,273  
Total revenues   50,959     46,665     198,915     169,479  
Expenses:
Direct operating expenses 1,794 1,646 5,928 5,987
Selling, general and administrative expenses 5,934 5,800 24,092 23,441
Depreciation expenses 14,060 12,641 53,545 45,800
Provision for doubtful accounts 206 168 1,100 388
Impairment of leasing equipment held for sale 212 385 2,158 1,289

Interest expense, including non-cash interest of $948,

$1,050, $4,979 and $4,610, respectively

17,332

15,355

68,702

54,638

Interest income (56 ) (98 ) (265 ) (309 )
Other expenses (income), net   (9 )   (938 )   (2,277 )   (500 )
Total expenses   39,473     34,959     152,983     130,734  
 
Income before provision for income taxes 11,486 11,706 45,932 38,745
Provision (benefit) for income taxes   (377 )   (549 )   (504 )   (691 )
Net income $ 11,863   $ 12,255   $ 46,436   $ 39,436  
Net income per common share
Basic $ 0.58   $ 0.61   $ 2.29   $ 1.96  
Diluted $ 0.58   $ 0.61   $ 2.29   $ 1.96  
Dividend per common share $ 0.30   $ 0.24   $ 1.13   $ 0.92  
 

Non-GAAP Financial Measure

Adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) is a measure of financial and operating performance that is not defined by U.S. GAAP and should not be considered a substitute for net income, income from operations or cash flow from operations, as determined in accordance with U.S. GAAP.

We define adjusted EBITDA as income (loss) from continuing operations before income taxes, interest expenses including loss on retirement of debt, depreciation and amortization, fair value adjustments on derivative instruments, loss on terminations and modification of derivative instruments, gain on sale of assets, and write-offs of goodwill plus principal collections on direct finance lease receivables. We use adjusted EBITDA in a number of ways to assess our consolidated financial and operating performance, and we believe this measure is helpful to management, the board of directors and investors in identifying trends in our performance. We use adjusted EBITDA as a measure of our consolidated operating performance exclusive of income and expenses that relate to the financing, income taxes, and capitalization of the business. Also, adjusted EBITDA assists us in comparing our operating performance on a consistent basis as it removes the impact of our capital structure (primarily interest charges on our outstanding debt) and asset base (primarily depreciation and amortization) from our operating results. In addition, adjusted EBITDA helps management identify controllable expenses and make decisions designed to help us meet our current financial goals and optimize our financial performance. Accordingly, we believe this metric measures our financial performance based on operational factors that management can impact in the short-term, namely the cost structure and expenses of the organization. Lastly, adjusted EBITDA is the basis for calculating selected financial ratios as required in the debt covenants of one of our credit facilities and one of our management agreements.

The following table shows the reconciliation of net income, the most directly comparable U.S. GAAP measure to adjusted EBITDA:

SeaCube Container Leasing Ltd.
Non-GAAP Reconciliation of Adjusted EBITDA
(Amounts in thousands)
(unaudited)
         
Three months ended December 31,Year ended December 31,
2012     20112012     2011
Net income $ 11,863 $ 12,255 $ 46,436 $ 39,436
Provision (benefit) for income taxes (377 ) (549 ) (504 ) (691 )
Depreciation expenses 14,060 12,641 53,545 45,800
Interest expense, net of interest income 17,276 15,257 68,437 54,329

Collections on net investment in direct financing

leases, net of interest earned

 

30,963

   

24,945

   

121,564

   

100,881

 
Adjusted EBITDA $ 73,785   $ 64,549   $ 289,478   $ 239,755  
 

In addition, the Company has presented adjusted net income and adjusted net income per diluted common share as a measure of financial and operating performance. Adjusted net income is a measure that is not defined by U.S. GAAP and should not be considered a substitute for net income, income from operations or cash flow from operations, as determined in accordance with U.S. GAAP. Adjusted net income is a measure of our operating and financial performance used by management to focus on consolidated financial and operating performance exclusive of income and expenses that relate to non-routine or significant non-cash items of the business.

We define adjusted net income (loss) as net income before non-cash interest expense related to amortization of deferred financing fees, terminations and modifications of derivative instruments, losses on retirement of debt, fair value adjustments on derivative instruments, loss on swap terminations, and write-offs of goodwill. We use adjusted net income to assess our consolidated financial and operating performance, and we believe this non-GAAP measure is helpful to management and investors in identifying trends in our performance. This measure helps management make decisions which are expected to facilitate meeting current financial goals as well as achieve optimal financial performance. Adjusted net income provides us with a measure of financial performance of the business based on operational factors including the profitability of assets on an economic basis net of operating expenses and the capital costs of the business on a consistent basis as it removes the impact of certain non-routine and non-cash items from our operating results. Adjusted net income is a key metric used by senior management and our board of directors to review the consolidated financial performance of the business. Adjusted net income is a non-GAAP measure, and, as such, a reconciliation of adjusted net income to net income is provided below.

           
SeaCube Container Leasing Ltd.

Non-GAAP Reconciliation of Adjusted Net Income

(Amounts in thousands, except share and per share data)

(unaudited)
 
Three months ended December 31,Year ended December 31,
2012       20112012       2011
Net income $ 11,863 $ 12,255 $ 46,436 $ 39,436
Non-cash interest expense, net of tax   988   1,113   5,034   4,692
Adjusted net income $ 12,851 $ 13,368 $ 51,470 $ 44,128
 

Adjusted net income per diluted

common share

$ 0.63 $ 0.66 $ 2.54 $ 2.19
 

Common shares used in computing adjusted

net income per diluted common share

  20,288,359   20,163,359   20,269,916   20,142,755
 

Contacts:

Investors:
SeaCube Container Leasing Ltd.
David Doorley, 201-391-0800

Source: SeaCube Container Leasing Ltd.

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