General Finance Corporation Reports Fourth Quarter and Full Year Results for Fiscal Year 2019

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PASADENA, Calif., Sept. 11, 2019 (GLOBE NEWSWIRE) -- General Finance Corporation (NASDAQ: GFN), a leading specialty rental services company offering portable storage, modular space and liquid containment solutions in North America and in the Asia-Pacific region of Australia and New Zealand (the “Company”), today announced its consolidated financial results for the fourth quarter and fiscal year ended June 30, 2019.

“We are extremely proud of our accomplishments in fiscal year 2019, delivering record revenues and adjusted EBITDA, driven by growth across all of our operations,” said Jody Miller, President and Chief Executive Officer. “Our North American leasing operations again generated record results, led by our core container business at Pac-Van, which delivered a 16% year-over-year increase in leasing revenues. Our liquid containment business recorded improved results for the fiscal year despite a moderation in leasing activity in Texas and Royal Wolf delivered a solid performance, driven by a 9% increase in leasing revenues in local currency, with increased activity across most sectors.”

Mr. Miller continued, “We executed well on our geographic expansion strategy in fiscal year 2019, enhancing our U.S. footprint in North America with five accretive acquisitions and two greenfield openings in new markets and strengthening our market-leading position in the Asia-Pacific area with the acquisition of our largest competitor in New Zealand and one greenfield opening in Australia.”

Charles Barrantes, Executive Vice President and Chief Financial Officer, added, “Our fiscal year 2019 results fell within the guidance range we provided in conjunction with the reporting of our third quarter results. Not only did we generate record revenues and adjusted EBITDA for the year, our fourth quarter results mark the tenth consecutive quarter where we have delivered year-over-year growth in adjusted EBITDA.”

Mr. Barrantes concluded, “We also made solid progress on lowering our cost of financing during the year, as we successfully replaced higher-cost debt in both geographic venues with lower-cost borrowings on our amended and expanded credit facilities in each region. In addition, our strong financial performance has enabled us to end the year with a net leverage ratio of below four times, our lowest level in five years.”

North American manufacturing revenues for the fourth quarter of fiscal year 2019 totaled $4.2 million and included intercompany sales of $1.4 million from products sold to our North American leasing operations. This compares to $3.7 million of total sales, including intercompany sales of $0.2 million during the fourth quarter of fiscal year 2018. On a stand-alone basis, prior to intercompany adjustments, adjusted EBITDA was $0.6 million for the fourth quarter, compared to $0.5 million in the fourth quarter of fiscal year 2018.

North American manufacturing revenues for fiscal year 2019 totaled $14.9 million and included intercompany sales of $4.1 million from products sold to our North American leasing operations.  This compares to $13.6 million of total sales during the fiscal year 2018, which included intercompany sales of $3.7 million. On a stand-alone basis, prior to intercompany adjustments, adjusted EBITDA was $1.5 million for the fiscal year, compared to $0.3 million in the prior fiscal year.

At June 30, 2019, the Company had total debt of $411.1 million and cash and cash equivalents of $10.4 million, as compared to $427.2 million and $21.6 million at June 30, 2018, respectively. At June 30, 2019, our North American leasing operations had $60.2 million available to borrow under its $260 million credit facility, and our Asia-Pacific leasing operations had, including cash at the bank, $20.1 million (A$28.6 million) available to borrow under its senior credit facility.

During fiscal year 2019, the Company generated cash from operating activities of $52.1 million, as compared to $58.8 million for fiscal year 2018. In fiscal year 2019, the Company invested a net $38.5 million ($32.1 million in North America and $6.4 million in the Asia-Pacific) in the lease fleet, as compared to $21.1 million in net fleet investment ($19.0 million in North America and $2.1 million in the Asia-Pacific) in fiscal year 2018.

Receivables were $56.2 million at June 30, 2019, as compared to $50.5 million at June 30, 2018. Days sales outstanding in receivables at June 30, 2019, for our Asia-Pacific and North American leasing operations were 34 and 46 days, respectively, as compared to 35 and 47 days, respectively, as of June 30, 2018.

Depending primarily on conditions in the oil and gas sector in Texas and assuming the Australian dollar averages 0.68 versus the U.S. dollar, which represents an approximate 5% decrease from fiscal year 2019, management estimates that consolidated revenues for fiscal year 2020 will be in the range of $370 million to $390 million and that consolidated adjusted EBITDA is expected to be in the range of plus or minus 4% in fiscal year 2020 from fiscal year 2019.  This outlook does not take into account the impact of any acquisitions that may occur during fiscal year 2020.

A replay of the conference call may be accessed through September 25, 2019 by dialing (800) 585-8367 (U.S.) or (404) 537-3406 (international), using conference ID number 7949214.

After the replay has expired, interested parties can listen to the conference call via webcast in the "Investor Relations" section of the Company's website at .

Headquartered in Pasadena, California, General Finance Corporation (NASDAQ: GFN, ) is a leading specialty rental services company offering portable storage, modular space and liquid containment solutions.  Management’s expertise in these sectors drives disciplined growth strategies, operational guidance, effective capital allocation and capital markets support for the Company’s subsidiaries.  The Company’s Asia-Pacific leasing operations in Australia and New Zealand consist of wholly-owned subsidiary Royal Wolf (), the leading provider of portable storage solutions in those regions. The Company’s North America leasing operations consist of wholly-owned subsidiaries Pac-Van, Inc. () and Lone Star Tank Rental Inc. (), providers of portable storage, office and liquid storage tank containers, mobile offices and modular buildings. The Company also owns Southern Frac, LLC (), a manufacturer of portable liquid storage tank containers and, under the trade name Southern Fabrication Specialties (), other steel-related products in North America.   

Statements in this news release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, statements addressing management’s views with respect to future financial and operating results, competitive pressures, increases in interest rates for our variable interest rate indebtedness, our ability to raise capital or borrow additional funds, the availability of sufficiently qualified employees to staff our businesses, changes in the Australian, New Zealand or Canadian dollar relative to the U.S. dollar, regulatory changes, customer defaults or insolvencies, litigation, the acquisition of businesses that do not perform as we expect or that are difficult for us to integrate or control, our ability to procure adequate levels of products to meet customer demand, our ability to procure adequate supplies for our manufacturing operations, labor disruptions, adverse resolution of any contract or other disputes with customers, declines in demand for our products and services from key industries such as the Australian resources industry or the U.S. oil and gas and construction industries, or a write-off of all or a part of our goodwill and intangible assets. These risks and uncertainties could cause actual outcomes and results to differ materially from those described in our forward-looking statements. We believe that the expectations represented by our forward-looking statements are reasonable, yet there can be no assurance that such expectations will prove to be correct. Furthermore, unless otherwise stated, the forward-looking statements contained in this press release are made as of the date of the press release, and we do not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise unless required by applicable law. The forward-looking statements contained in this press release are expressly qualified by these cautionary statements. Readers are cautioned that these forward-looking statements involve certain risks and uncertainties, including those contained in filings with the Securities and Exchange Commission.

-Financial Tables Follow-

Earnings before interest, income taxes, impairment, depreciation and amortization and other non-operating costs and income (“EBITDA”) and adjusted EBITDA are non-U.S. GAAP measures. We calculate adjusted EBITDA to eliminate the impact of certain items we do not consider to be indicative of the performance of our ongoing operations.  In addition, in evaluating adjusted EBITDA, you should be aware that in the future, we may incur expenses similar to the expenses excluded from our presentation of adjusted EBITDA. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. We present adjusted EBITDA because we consider it to be an important supplemental measure of our performance and because we believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry, many of which present EBITDA and a form of adjusted EBITDA when reporting their results. Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. We compensate for these limitations by relying primarily on our U.S. GAAP results and using adjusted EBITDA only supplementally. The following tables show our adjusted EBITDA and the reconciliation from net loss on a consolidated basis and from operating income (loss) for our operating segments (in thousands):

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Globe Newswire: 13:30 GMT Wednesday 11th September 2019

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