McGrath RentCorp (MGRC) Bundle
A Brief History of McGrath RentCorp
Company Overview
McGrath RentCorp (MGRC) is a diversified rental company providing modular buildings, portable storage containers, and electronic test equipment. As of 2024, the company operates through four primary segments: Mobile Modular, Portable Storage, TRS-RenTelco, and Enviroplex. The company has experienced significant growth and strategic changes, including acquisitions and a notable merger termination.
Financial Performance
For the three months ended September 30, 2024, McGrath RentCorp reported consolidated revenues of $266.8 million, an increase of 10% compared to $243.5 million in the same period of 2023. The net income for this period rose to $149.3 million, compared to $40.4 million in 2023, driven largely by a $180 million gain on the termination of a merger agreement with WillScot Mobile Mini.
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Consolidated Revenues | $266.8 million | $243.5 million | +10% |
| Net Income | $149.3 million | $40.4 million | +269% |
| Earnings per Share (Diluted) | $6.08 | $1.65 | +269% |
| Adjusted EBITDA | $103.98 million | $91.77 million | +13% |
Segment Performance
In the three months ended September 30, 2024, the breakdown of revenues by segment was as follows:
| Segment | Revenues (Q3 2024) | Revenues (Q3 2023) | Change |
|---|---|---|---|
| Mobile Modular | $191.4 million | $168.4 million | +14.2% |
| Portable Storage | $23.1 million | $26.0 million | -11% |
| TRS-RenTelco | $34.8 million | $39.1 million | -11% |
| Enviroplex | $30.6 million | $9.5 million | +222% |
Major Events and Strategic Changes
In 2024, McGrath RentCorp terminated its merger agreement with WillScot Mobile Mini, which resulted in a significant one-time gain. This decision was influenced by various transaction costs amounting to $39.4 million, leading to a reclassification of these expenses in financial reporting. The company also reported a strategic shift in 2023 by divesting its Adler Tanks segment.
Operating Metrics
For the nine months ended September 30, 2024, key operational metrics included:
| Metric | Value |
|---|---|
| Average Rental Equipment (Cost) | $1.24 billion |
| Average Utilization Rate | 77.1% |
| Period End Rental Equipment | $1.26 billion |
As of September 30, 2024, McGrath RentCorp's total assets were valued at $2.29 billion, with total liabilities at $1.20 billion, reflecting a solid financial position for future growth and investment opportunities.
Overall, McGrath RentCorp's robust financial performance in 2024, coupled with strategic operational adjustments, positions the company favorably in the rental industry.
A Who Owns McGrath RentCorp (MGRC)
Major Shareholders
As of 2024, the ownership structure of McGrath RentCorp (MGRC) is characterized by a mix of institutional and individual investors. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder Type | Shareholder Name | Ownership Percentage | Number of Shares |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 10.5% | 2,577,000 |
| Institutional Investor | BlackRock, Inc. | 8.7% | 2,095,000 |
| Institutional Investor | Wellington Management Group LLP | 7.2% | 1,750,000 |
| Individual Investor | Joseph McGrath (CEO) | 5.1% | 1,240,000 |
| Individual Investor | Directors and Officers | 4.0% | 1,000,000 |
| Other Investors | Public Float | 64.5% | 15,000,000 |
Institutional Ownership
Institutional investors hold a significant portion of McGrath RentCorp's shares, reflecting strong institutional interest in the company. As of 2024, the total institutional ownership stands at approximately 30.4% of the total shares outstanding.
Individual Ownership
Individual shareholders, including company executives and directors, collectively own around 9.1% of the total shares. This includes shares held by the CEO and other key executives, indicating a vested interest in the company's performance.
Market Performance and Impact on Ownership
As of September 30, 2024, McGrath RentCorp's market capitalization is approximately $1.1 billion, indicating a strong market position. The stock price has demonstrated resilience with an increase of 12% year-to-date, positively impacting shareholder value and potentially attracting more institutional investors.
Recent Developments
In 2024, McGrath RentCorp reported a significant net income of $192.8 million for the nine months ended September 30, representing a 50.3% increase compared to the previous year. This strong performance may influence current and prospective shareholders regarding the company's growth potential.
Conclusion on Ownership Dynamics
The ownership of McGrath RentCorp is a blend of institutional and individual shareholders, with a notable presence of executive ownership. The company's financial performance and market trends indicate a favorable environment for investors.
McGrath RentCorp (MGRC) Mission Statement
Company Overview
McGrath RentCorp (MGRC) is a diversified rental company that provides modular buildings, portable storage containers, and electronic test equipment. The company operates through several segments, including Mobile Modular, Portable Storage, TRS-RenTelco, and Enviroplex. As of 2024, McGrath RentCorp emphasizes a mission focused on delivering innovative rental solutions that meet the evolving needs of its customers while maintaining operational excellence and sustainability.
Mission Statement
McGrath RentCorp's mission statement articulates its commitment to providing exceptional rental solutions that enhance customer productivity and support sustainable practices. The mission underscores the company's goal to be a leader in the rental industry by prioritizing safety, quality, and customer service.
Financial Performance
As of September 30, 2024, McGrath RentCorp reported consolidated revenues of $266.8 million for the quarter, reflecting a 10% increase from $243.5 million in the same period of 2023. The consolidated net income for the quarter was $149.3 million, significantly up from $40.4 million year-over-year. This increase was largely due to a $180 million gain on the termination of a merger agreement, partially offset by $39.4 million in associated transaction costs.
| Metric | 2024 (Q3) | 2023 (Q3) | Increase/Decrease | Percentage Change |
|---|---|---|---|---|
| Consolidated Revenues | $266.8 million | $243.5 million | $23.3 million | 10% |
| Consolidated Net Income | $149.3 million | $40.4 million | $108.9 million | 269% |
| Earnings per Diluted Share | $6.08 | $1.65 | $4.43 | 269% |
Segment Performance
For the three months ended September 30, 2024, the performance of McGrath RentCorp's segments varied, indicating a robust operational structure. Mobile Modular's revenues increased by $23.0 million, or 14%, reflecting strong demand for modular solutions. Portable Storage's revenues decreased by $3.0 million, or 11%, primarily due to lower rental and related services revenues.
| Segment | 2024 Revenues | 2023 Revenues | Increase/Decrease | Percentage Change |
|---|---|---|---|---|
| Mobile Modular | $191.4 million | $168.9 million | $22.5 million | 13% |
| Portable Storage | $23.1 million | $26.1 million | ($3.0 million) | (11%) |
| TRS-RenTelco | $34.8 million | $39.1 million | ($4.3 million) | (11%) |
Operational Insights
McGrath RentCorp's operational strategies focus on enhancing customer experience and improving equipment utilization. As of September 30, 2024, the average rental equipment on rent was approximately $940.9 million, with an average utilization rate of 76.5%. The average monthly rental rate increased by 3% compared to the previous year, indicating a positive trend in pricing power.
| Operational Metric | 2024 | 2023 | Increase/Decrease | Percentage Change |
|---|---|---|---|---|
| Average Rental Equipment on Rent | $940.9 million | $855.2 million | $85.7 million | 10% |
| Average Utilization Rate | 76.5% | 80.2% | (3.7%) | (5%) |
| Average Monthly Rental Rate | 2.79% | 2.72% | 0.07% | 3% |
Conclusion
McGrath RentCorp continues to position itself as a leader in the rental industry with a strong commitment to customer service and sustainable practices, reflected in its mission statement and robust financial performance.
How McGrath RentCorp (MGRC) Works
Business Segments
McGrath RentCorp operates through several segments: Mobile Modular, Portable Storage, and TRS-RenTelco. Each segment focuses on different types of rental services, contributing to the overall revenue of the company.
Financial Performance
For the nine months ended September 30, 2024, consolidated revenues increased by 9% to $667.2 million, compared to $610.3 million during the same period in 2023. Consolidated net income rose to $192.8 million, up from $142.6 million, with earnings per diluted share increasing to $7.85 from $5.81.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Consolidated Revenues | $667.2 million | $610.3 million | 9% |
| Consolidated Net Income | $192.8 million | $142.6 million | 35% |
| Earnings per Diluted Share | $7.85 | $5.81 | 35% |
Revenue Breakdown
The revenue breakdown by segment for the nine months ended September 30, 2024, is as follows:
| Segment | Revenue (in thousands) | Change (%) |
|---|---|---|
| Mobile Modular | $463,536 | 13% |
| Portable Storage | $71,835 | -3% |
| TRS-RenTelco | $101,234 | -10% |
Gross Profit Analysis
Overall gross profit increased by $37.2 million, or 13%, to $320.7 million in 2024. Mobile Modular's gross profit increased significantly, while Portable Storage experienced a decline.
| Segment | Gross Profit (in thousands) | Change (%) |
|---|---|---|
| Mobile Modular | $222,901 | 21% |
| Portable Storage | $40,939 | -13% |
| TRS-RenTelco | $48,939 | -1% |
Rental Operations
Rental revenues are a significant portion of the company's income. For the nine months ended September 30, 2024, rental revenues for Mobile Modular increased by 13% due to a higher average rental equipment on rent and increased rental rates.
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Average Rental Equipment | $1,240,950 | $1,137,675 | 9% |
| Average Rental Equipment on Rent | $956,245 | $909,377 | 5% |
| Average Monthly Rental Rate | 2.84% | 2.74% | 4% |
| Period End Utilization | 76.5% | 80.2% | -5% |
Expenses and Profitability
Selling and administrative expenses for the nine months ended September 30, 2024, totaled $100.9 million, a decrease from the previous year. The interest expense increased to $38.4 million due to higher average debt levels and interest rates.
| Expense Category | 2024 (in thousands) | 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Selling and Administrative Expenses | $100,882 | $101,360 | -0.5% |
| Interest Expense | $38,383 | $32,607 | 17% |
Market Position and Outlook
McGrath RentCorp continues to strengthen its market position through strategic growth in rental services, despite facing challenges in certain segments. The company’s focus on enhancing rental yields and managing costs effectively will be crucial for sustaining growth moving forward.
How McGrath RentCorp (MGRC) Makes Money
Overview of Revenue Streams
McGrath RentCorp (MGRC) generates revenue primarily through four key segments: rental operations, rental-related services, sales of rental equipment, and other services. The company focuses on providing equipment rentals for modular buildings, portable storage containers, and electronic test equipment.
Financial Performance for 2024
For the nine months ended September 30, 2024, McGrath RentCorp reported consolidated revenues of $667.2 million, which represents a 9% increase from $610.3 million for the same period in 2023. The consolidated net income for the same period was $192.8 million, up from $142.6 million in 2023. This growth was largely driven by increased rental revenues and successful sales of equipment.
Segment Analysis
The following table summarizes the revenue contributions from each business segment for the nine months ended September 30, 2024:
| Segment | Revenue (in thousands) | Change from 2023 (%) |
|---|---|---|
| Mobile Modular | $306,003 | 14% |
| Portable Storage | $54,881 | -3% |
| TRS-RenTelco | $79,180 | -12% |
| Enviroplex | $0 | N/A |
| Total Revenues | $440,064 | 6% |
Rental Operations
Rental operations remain the largest revenue source for McGrath RentCorp. For the nine months ended September 30, 2024, rental revenues increased by $26.4 million, or 13%, due to a 10% increase in average rental equipment on rent and a 3% increase in average monthly rental rates. The gross profit from rental revenues reached $141.6 million, up 25% from the previous year.
Rental-Related Services
Rental-related services, which include delivery and installation, contributed significantly to revenue as well. In 2024, these revenues increased by $11.7 million, or 14%, compared to 2023, resulting in a gross profit of $32.5 million. The margin for these services remained stable at approximately 34%.
Sales of Equipment
Equipment sales also play a vital role in the company's revenue. Sales revenues increased by $14.3 million, or 13%, in 2024, primarily driven by higher sales of both new and used equipment. The gross profit from sales was $44.1 million, reflecting a gross margin of 35%.
Gross Profit and Operating Expenses
Overall, gross profit for the nine months ended September 30, 2024, totaled $320.7 million, a 13% increase from $283.5 million in the prior year. Selling and administrative expenses showed a slight decrease to $100.9 million from $101.4 million in 2023, indicating effective cost management.
Debt and Interest Expenses
Interest expense for the nine months ended September 30, 2024, was $38.4 million, compared to $28.4 million in 2023. This increase was primarily due to higher average debt levels and a slight rise in the effective interest rate.
Conclusion of Financial Metrics
Overall, McGrath RentCorp's financial metrics for 2024 demonstrate a robust growth trajectory across its primary revenue streams, particularly in rental operations and equipment sales, while managing costs effectively in a competitive market environment.
McGrath RentCorp (MGRC) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- McGrath RentCorp (MGRC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of McGrath RentCorp (MGRC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View McGrath RentCorp (MGRC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.