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4 days ago
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McGrath RentCorp (MGRC) Q2 2025 Earnings Call Highlights: Strong Revenue Growth Amidst Market ...
Total Revenue: Increased 11% to $235.6 million. Adjusted EBITDA: Increased 3% to $86.5 million. Mobile Modular Revenue: Increased 8% to $156 million. Mobile Modular Rental Revenue: Increased 5%. Mobile Modular Sales Revenue: Increased 13%. Portable Storage Revenue: Decreased 3% to $23.3 million. Portable Storage Rental Revenue: Decreased 5% to $16.9 million. TRS-RenTelco Revenue: Increased 11% to $36.4 million. TRS-RenTelco Rental Revenue: Increased 7%. Interest Expense: Decreased to $7.8 million. Effective Tax Rate: 27.3% compared to 28.8% a year earlier. Net Cash from Operating Activities: $110 million. Rental Equipment Purchases: $50 million. Net Borrowings: $573 million. Debt to EBITDA Ratio: 1.6:1. Full Year Revenue Outlook: $925 million to $960 million. Full Year Adjusted EBITDA Outlook: $347 million to $356 million. Warning! GuruFocus has detected 4 Warning Sign with MGRC. Release Date: July 24, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points McGrath RentCorp (NASDAQ:MGRC) delivered solid second-quarter results with rental operations growing by 5% and adjusted EBITDA increasing by 3%. The Mobile Modular division saw total revenues increase by 8%, with strong performance in both commercial and education sectors. TRS-RenTelco experienced a 7% growth in rental revenues, with improved utilization and a stronger rental pipeline. The company completed two tuck-in acquisitions, enhancing its modular growth strategy and expanding its geographic footprint. McGrath RentCorp (NASDAQ:MGRC) has upwardly revised its full-year financial outlook, expecting total revenue between $925 million and $960 million, and adjusted EBITDA between $347 million and $356 million. Negative Points Portable Storage rental revenues decreased by 5% year-over-year, although there was a sequential improvement. The company faced higher inventory center expenses and SG&A costs, impacting adjusted EBITDA despite revenue growth. Average fleet utilization for Mobile Modular decreased to 73.7% from 78.4% a year earlier, reflecting softer demand conditions. The demand environment remains uncertain, with potential delays and uncertainties affecting sales and rental activities. Interest expense, although reduced, remains a factor, with the company managing debt levels and interest rates. Q & A Highlights Q: Could you provide more details on the expected balance of sales timing in the third and fourth quarters? A: Keith Pratt, CFO, explained that last year saw a significant third quarter due to high sales gross profit, which then dropped in the fourth quarter. This year, the contribution of sales gross profit is expected to be more balanced between the third and fourth quarters. The company has already seen strong sales contributions in the first half of the year, and adjusted EBITDA is expected to be similar in both the third and fourth quarters. Q: How far out do you have visibility on the Mobile Modular segment, and is it fluid? A: Keith Pratt, CFO, noted that visibility is somewhat fluid due to the current demand environment, which can cause delays and uncertainty. The company spends considerable time assessing the pipeline and what is likely to be realized by year-end as part of their normal forecasting process. Q: Can you provide an update on the pricing gap between current spot rates for new modular rentals versus the average rate on existing contracts? A: Keith Pratt, CFO, stated that modular spot rates are generally stable, with the gap between the average rate on existing contracts and new shipments being about 39%, slightly down from 41% a quarter ago. The average monthly revenue per unit on rent increased 6% year-over-year. Q: Are you seeing meaningful signs of improvement in Portable Storage demand? A: Joseph Hanna, CEO, confirmed that there are definite signs of improvement. Although rental revenues were down 5% year-over-year, they improved sequentially, and quote volumes are up. The company shipped the most units in June since January 2024, indicating an upward trajectory. Q: Could you discuss the impact of new federal tax legislation on your free cash flow? A: Keith Pratt, CFO, mentioned that the benefit to free cash flow from the new tax treatment on rental equipment depreciation is estimated to be in the range of $10 million to $15 million for this year. However, this benefit is less pronounced due to lower capital spending on new rental equipment. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Business Wire
26-06-2025
- Business
- Business Wire
McGrath Second Quarter Earnings and Conference Call Scheduled for July 24, 2025
LIVERMORE, Calif.--(BUSINESS WIRE)-- McGrath RentCorp ('McGrath' or the 'Company') (Nasdaq: MGRC), a leading business-to-business rental company in North America, today announced plans to release financial results for its second quarter ending June 30, 2025, after the close of regular market trading on Thursday, July 24, 2025. McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on July 24, 2025, to discuss the results. The conference call may be accessed by dialing 1-800-245-3047 (international callers dial 1-203-518-9765), or by listening to the simultaneous webcast on A replay will be available for 7 days following the call by dialing 1-800-839-5630 (international callers dial 1-402-220-2557). In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company's website at ABOUT MCGRATH: McGrath RentCorp (Nasdaq: MGRC) is a leading business-to-business rental company in North America with a strong record of profitable business growth. Founded in 1979, McGrath's operations are centered on modular solutions through its Mobile Modular and Mobile Modular Portable Storage businesses. In addition, its TRS-RenTelco business offers electronic test equipment rental solutions. The Company's rental product offerings and services are part of the circular supply economy, helping customers work more efficiently, and sustainably manage their environmental footprint. With over 40 years of experience, McGrath's success is driven by a focus on exceptional customer experiences. This focus has underpinned the Company's long-term financial success and supported over 30 consecutive years of annual dividend increases to shareholders, a rare distinction among publicly listed companies. McGrath is headquartered in Livermore, California. Additional information about McGrath and its businesses is available at and
