SAN FRANCISCO--(BUSINESS WIRE)--CAI International, Inc. (CAI) (NYSE: CAP), one of the world’s leading lessors of intermodal freight containers, today reported results for the first quarter of 2014.
Highlights
- CAI reported rental revenue for the first quarter of 2014 of $50.7 million, an increase of $4.1 million, or 9%, compared to the first quarter of 2013.
- CAI reported net income attributable to CAI common stockholders for the first quarter of 2014 of $14.3 million, a decrease of 11% compared to $16.1 million for the first quarter of 2013.
- During the quarter CAI purchased a portfolio of approximately 4,200 TEUs of containers from its managed fleet and entered into a sale and lease back transaction with a customer for approximately 9,300 TEUs of containers.
- On April 29, 2014 CAI filed with the SEC a universal shelf registration statement to register $300 million of new securities that CAI may sell from time to time, and three million shares of common stock for resale by certain selling stockholders that such selling stockholders may sell from time to time. The purpose of this registration is routine and has been made to update and replace the unused portion of CAI’s currently effective universal shelf registration statement that is expiring at the end of May. The registration statement has not yet been declared effective by the SEC and CAI may not sell any securities under such registration statement until it has been declared effective by the SEC.
Net income attributable to CAI common stockholders for the first quarter of 2014 decreased by 11% to $14.3 million (or $0.63 per fully diluted share), from $16.1 million (or $0.71 per fully diluted share) for the first quarter of 2013.
Total revenue for the first quarter of 2014 was $54.3 million, compared to $51.0 million for the first quarter of 2013, an increase of 6%. Rental revenue for the first quarter of 2014 was $50.7 million, compared to $46.6 million for the first quarter of 2013. The increase in rental revenue was primarily due to an increase in the average number of TEUs of owned containers on lease. Management fee revenue for the first quarter of 2014 was $1.5 million, compared to $2.2 million for the first quarter of 2013, reflecting the reduction in the size of the managed fleet as CAI has acquired a number of its previously managed portfolios during the last twelve months. Finance lease income for the first quarter of 2014 was $2.1 million, consistent with the first quarter of 2013.
Victor Garcia, Chief Executive Officer of CAI, commented, “We reported solid results for our first quarter, which traditionally is the weakest quarter of the year for us. Our net income was $14.3 million, a reduction of 11% compared to the first quarter last year. Storage costs were higher compared to the same quarter a year ago, reflecting the larger fleet we operate and a lower utilization rate. Gain on sale of equipment was also lower this quarter compared to the same period last year, due largely to an increase in the average book value of equipment sold.”
Mr. Garcia, continued, “After a strong month of lease out activity in January, the rest of the quarter returned to a more normalized level of activity after the Lunar New Year holiday. Our overall utilization (on a CEU basis) decreased slightly, from 92% in the fourth quarter of 2013, to 91% in the first quarter of 2014, reflecting the normal seasonal slowdown in demand at this time of the year. Inquiries for newly manufactured equipment have picked up during the course of April, but lease rates remain under pressure due to aggressive competition among leasing companies.
“We continue to focus on improving our results in the coming quarters through repositioning equipment to high demand locations, and selling equipment in low demand areas to improve utilization and reduce operating costs. To that end, we are making steady progress. We have increased our equipment sales, in CEU terms, by 66% this quarter as compared to the first quarter of 2013 and by 75% as compared to the third quarter of 2013, the period at which we started aggressively focusing on implementing the actions I described above.”
Mr. Garcia, continued, “We remain pleased with our investments in rail cars. We currently have $77 million invested in rail cars and our fleet has a utilization of close to 100%. Our recent renewals of expiring rail car leases have been accomplished with rates at or above the prior lease rates, and the outlook for rail car demand across many car types remains attractive. We expect to add personnel focused on rail cars and to look for additional investments.”
Mr. Garcia concluded, “We expect overall demand for leased containers to improve in 2014 due to increased trade growth. According to Clarkson Research, trade growth is expected to increase to 5.8% in 2014 as compared to 4.7% in 2013. We expect this overall trade growth to be supported by improved economic activity in the United States and Europe. Moreover we believe inventory levels at the manufacturers remain relatively low as compared to the prior two years, both for leasing companies and shipping lines, which we view as a positive factor for the outlook this coming year.”
| CAI International, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (In thousands, except share information) | ||||||||
| (UNAUDITED) | ||||||||
|
March 31, |
December 31, | |||||||
| 2014 | 2013 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 20,071 | $ | 31,141 | ||||
| Cash held by variable interest entities | 19,984 | 14,600 | ||||||
|
Accounts receivable (owned fleet), net of allowance for doubtful accounts of $499 and $503 at March 31, 2014 and December 31, 2013, respectively |
44,342 | 41,226 | ||||||
| Accounts receivable (managed fleet) | 11,109 | 10,646 | ||||||
| Current portion of direct finance leases | 15,515 | 12,998 | ||||||
| Prepaid expenses | 14,141 | 14,803 | ||||||
| Other current assets | 5,557 | 5,553 | ||||||
| Total current assets | 130,719 | 130,967 | ||||||
| Restricted cash | 8,998 | 9,253 | ||||||
|
Rental equipment, net of accumulated depreciation of $227,003 and $210,165 at March 31, 2014 and December 31, 2013, respectively |
1,471,493 | 1,465,092 | ||||||
| Net investment in direct finance leases | 79,016 | 68,210 | ||||||
|
Furniture, fixtures and equipment, net of accumulated depreciation of $1,759 and $1,697 at March 31, 2014 and December 31, 2013, respectively |
1,274 | 1,390 | ||||||
|
Intangible assets, net of accumulated amortization of $4,737 and $4,638 at March 31, 2014 and December 31, 2013, respectively |
577 | 677 | ||||||
| Total assets | $ | 1,692,077 | $ | 1,675,589 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 7,374 | $ | 8,002 | ||||
| Accrued expenses and other current liabilities | 4,866 | 6,230 | ||||||
| Due to container investors | 13,357 | 14,815 | ||||||
| Unearned revenue | 6,987 | 6,862 | ||||||
| Current portion of debt | 73,880 | 74,080 | ||||||
| Current portion of capital lease obligations | 1,815 | 1,921 | ||||||
| Rental equipment payable | 23,043 | 45,181 | ||||||
| Total current liabilities | 131,322 | 157,091 | ||||||
| Debt | 1,086,432 | 1,058,628 | ||||||
| Deferred income tax liability | 41,376 | 41,378 | ||||||
| Capital lease obligations | 3,004 | 3,366 | ||||||
| Total liabilities | 1,262,134 | 1,260,463 | ||||||
| Stockholders' equity | ||||||||
|
Common stock: par value $.0001 per share; authorized 84,000,000 shares; issued and outstanding 22,242,256 and 22,240,673 shares at March 31, 2014 and December 31, 2013, respectively |
2 | 2 | ||||||
| Additional paid-in capital | 184,700 | 184,263 | ||||||
| Accumulated other comprehensive loss | (2,291 | ) | (2,356 | ) | ||||
| Retained earnings | 246,894 | 232,623 | ||||||
| Total CAI stockholders' equity | 429,305 | 414,532 | ||||||
| Non-controlling interest | 638 | 594 | ||||||
| Total stockholders' equity | 429,943 | 415,126 | ||||||
| Total liabilities and stockholders' equity | $ | 1,692,077 | $ | 1,675,589 | ||||
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| CAI International, Inc. | ||||||||
| Consolidated Statements of Income | ||||||||
| (In thousands, except per share data) | ||||||||
| (UNAUDITED) | ||||||||
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Three Months Ended
March 31, |
||||||||
| 2014 | 2013 | |||||||
| Revenue | ||||||||
| Rental revenue | $ | 50,684 | $ | 46,623 | ||||
| Management fee revenue | 1,525 | 2,230 | ||||||
| Finance lease income | 2,055 | 2,106 | ||||||
| Total revenue | 54,264 | 50,959 | ||||||
| Operating expenses | ||||||||
| Depreciation of rental equipment | 18,663 | 15,333 | ||||||
| Amortization of intangible assets | 99 | 227 | ||||||
| Gain on disposition of used rental equipment | (1,790 | ) | (2,636 | ) | ||||
| Storage, handling and other expenses | 5,993 | 4,299 | ||||||
| Marketing, general and administrative expenses | 6,706 | 6,188 | ||||||
| Loss (gain) on foreign exchange | 164 | (300 | ) | |||||
| Total operating expenses | 29,835 | 23,111 | ||||||
| Operating income | 24,429 | 27,848 | ||||||
| Interest expense | 8,795 | 8,404 | ||||||
| Write-off of deferred financing costs | - | 1,108 | ||||||
| Interest income | (4 | ) | (3 | ) | ||||
| Net interest expense | 8,791 | 9,509 | ||||||
| Net income before income taxes and non-controlling interest | 15,638 | 18,339 | ||||||
| Income tax expense | 1,407 | 2,272 | ||||||
| Net income | 14,231 | 16,067 | ||||||
| Net loss attributable to non-controlling interest | 40 | - | ||||||
| Net income attributable to CAI common stockholders | $ | 14,271 | $ | 16,067 | ||||
| Net income per share attributable to CAI common stockholders | ||||||||
| Basic | $ | 0.64 | $ | 0.73 | ||||
| Diluted | $ | 0.63 | $ | 0.71 | ||||
| Weighted average shares outstanding | ||||||||
| Basic | 22,213 | 22,085 | ||||||
| Diluted | 22,658 | 22,668 | ||||||
| CAI International, Inc. | ||||||
| Fleet Data | ||||||
| (UNAUDITED) | ||||||
| As of March 31, | ||||||
| 2014 | 2013 | |||||
| Owned container fleet in TEUs | 882,665 | 790,095 | ||||
| Managed container fleet in TEUs | 275,102 | 301,022 | ||||
| Total container fleet in TEUs | 1,157,767 | 1,091,117 | ||||
| Owned container fleet in CEUs | 924,234 | 829,651 | ||||
| Managed container fleet in CEUs | 253,761 | 279,215 | ||||
| Total container fleet in CEUs | 1,177,995 | 1,108,866 | ||||
| Owned railcar fleet in units | 1,859 | 1,453 | ||||
| Three Months Ended | ||||||
| March 31, | ||||||
| 2014 | 2013 | |||||
| Average Utilization | ||||||
| Container Fleet Utilization in TEUs | 90.0 | % | 92.2 | % | ||
| Container Fleet Utilization in CEUs | 91.0 | % | 93.2 | % | ||
| As of March 31, | ||||||
| 2014 | 2013 | |||||
| Period Ending Utilization | ||||||
| Container Fleet Utilization in TEUs | 89.7 | % | 92.2 | % | ||
| Container Fleet Utilization in CEUs | 90.7 | % | 93.8 | % | ||
Utilization is computed by dividing total units on lease, in CEUs (cost equivalent units) or TEUs (twenty foot equivalent units), by the total units in our fleet, in CEUs or TEUs, excluding new units not yet leased and off-hire units designated for sale. CEU is a ratio used to convert the actual number of containers in our fleet to a figure based on the relative purchase prices of our various equipment types to that of a standard 20 foot dry van container. For example, the CEU ratio for a standard 40 foot dry van container is 1.6, and a 40 foot high cube container is 1.7.
Conference Call
A conference call to discuss the financial results for the first quarter of 2014 will be held on Tuesday, April 29, 2014 at 5:00 p.m. ET. The dial-in number for the teleconference is 1-888-398-8098; outside of the U.S., call 1-707-287-9363. The call may be accessed live over the internet (listen only) under the “Investors” tab of CAI’s website, www.capps.com, by selecting “Q1 2014 Earnings Conference Call.” A webcast replay will be available for 30 days on the “Investors” tab of our website.
About CAI International, Inc.
CAI is one of the world’s leading managers and lessors of intermodal freight containers. As of March 31, 2014, the company operated a worldwide fleet of approximately 1,158,000 TEUs of containers through 17 offices located in 13 countries including the United States. CAI also owns a fleet of railcars, which it leases within North America.
This press release contains forward-looking statements regarding future events and the future performance of CAI International, Inc. These statements are forward looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and involve risks and uncertainties that could cause actual results of operations and other performance measures to differ materially from current expectations including, but not limited to, utilization rates, expected economic conditions, availability of credit on commercially favorable terms or at all, customer demand, container investment levels, container prices, lease rates, increased competition, volatility in exchange rates, growth in world trade and world container trade, potential to sell the company’s securities to the public and others. CAI refers you to the documents that it has filed with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2013 and its interim reports on Form 10-Q and its reports on Form 8-K. These documents contain additional important factors that could cause actual results to differ from current expectations and from forward-looking statements contained in this press release. Furthermore, CAI is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements contained in this press release whether as a result of new information, future events or otherwise, unless required by law.
