Business Wire | Oct 28, 2021 04:02PM EDT

McGrath RentCorp Announces Results for Third Quarter 2021

Oct. 28, 2021

LIVERMORE, Calif.--(BUSINESS WIRE)--Oct. 28, 2021--McGrath RentCorp (NASDAQ: MGRC) (the "Company"), a diversified business-to-business rental company, today announced total revenues for the quarter ended September 30, 2021 of $173.3 million, an increase of 11%, compared to the third quarter of 2020. The Company reported net income of $23.3 million, or $0.95 per diluted share, for the third quarter of 2021, compared to net income of $28.1 million, or $1.15 per diluted share, for the third quarter of 2020.

THIRD QUARTER 2021 COMPANY HIGHLIGHTS:

* Rental revenues increased 17% year-over-year to $103.3 million. * Total revenues increased 11% year-over-year to $173.3 million. * Adjusted EBITDA1 increased 5% to $66.0 million. * Dividend rate increased 4% year-over-year to $0.435 per share for the third quarter of 2021. On an annualized basis, this dividend represents a 2.3% yield on the October 27, 2021 close price of $75.24 per share.

Joe Hanna, President and CEO of McGrath RentCorp, made the following comments regarding these results and future expectations:

"Our third quarter results reflect improved end market conditions in each of our three rental business segments. Companywide rental revenues increased 17% year over year. Modular rental revenues grew 26%, with the majority of the growth attributable to our Design Space and Kitchens To Go acquisitions. Rental revenues at TRS and Adler grew 6% and 11%, respectively.

Our teams continued working through the integration of Design Space and Kitchens To Go during the quarter and I am very pleased with their progress. These acquisitions will provide additional long-term growth opportunities, as we expect to deploy more rental equipment capital in our expanded geographic coverage and to expand the breadth of products and services we bring to our customers.

We continued to see some cost pressures from elevated material and labor expenses, and some project delays, reflecting supply chain challenges. As business activity level increased, these factors pressured modular rental and sales margins during the quarter, and pushed completion of some modular sales projects to later in the current year, and in to next year. Partly offsetting these pressures, we are increasing pricing as demand improves.

The overall positive rental demand trends that we have seen in recent months have continued into the fourth quarter. We are fully focused on solid execution for the remainder of the year."

DIVISION HIGHLIGHTS:

All comparisons presented below are for the quarter ended September 30, 2021 to the quarter ended September 30, 2020 unless otherwise indicated.

MOBILE MODULAR

For the third quarter of 2021, the Company's Mobile Modular division reported income from operations of $23.5 million, a decrease of $1.4 million, or 5%. Rental revenues increased 26% to $59.2 million, depreciation expense increased 31% to $7.5 million and other direct costs increased 40% to $16.5 million, which resulted in an increase in gross profit on rental revenues of 19% to $35.1 million. The rental revenue increase reflects in part the new Design Space and Kitchens To Go customers that contributed approximately three quarters of the increase. Rental related services revenues increased 31% to $24.5 million, primarily attributable to higher amortization of modular building delivery and return delivery and dismantle revenues, higher site related and other services performed during the lease and increased delivery and return delivery revenues at Portable Storage, with associated gross profit increasing 15% to $6.0 million. Sales revenues decreased 10% to $26.4 million, primarily due to lower new equipment sales. Gross margin on sales was 31% compared to 26% in 2020, resulting in a 9% increase in gross profit on sales revenues to $8.2 million. Selling and administrative expenses increased 47% to $26.1 million, primarily due to increased employee salaries and benefit costs totaling $2.5 million, mostly due to the addition of Design Space and Kitchens To Go employees, $2.4 million higher amortization of intangible assets associated with the Design Space and Kitchens To Go acquisitions and $1.4 million higher allocated corporate expenses.

TRS-RENTELCO

For the third quarter of 2021, the Company's TRS-RenTelco division reported income from operations of $9.5 million, an increase of $0.5 million, or 5%. Rental revenues increased 6% to $29.2 million, depreciation expense increased 5% to $12.2 million and other direct costs increased 4% to $5.0 million, which resulted in a 7% increase in gross profit on rental revenues to $12.0 million. The rental revenue increase was primarily the result of increased demand for general purpose equipment compared to the prior year. Sales revenues decreased 31% to $4.8 million. Gross margin on sales was 63% in 2021 compared to 44% in 2020, resulting in a 1% decrease in gross profit on sales revenues to $3.0 million. Selling and administrative expenses increased 1% to $6.0 million.

ADLER TANKS

For the third quarter of 2021, the Company's Adler Tanks division reported income from operations of $2.8 million, an increase of 4% compared to the prior year. Rental revenues increased 11% to $14.8 million, depreciation expense was comparable to the prior year and other direct costs increased 62% to $3.2 million, which resulted in an increased gross profit on rental revenues of 3%, to $7.6 million. Rental related services revenues increased 14% to $6.3 million, with gross profit on rental related services increasing 2%, to $1.2 million. Selling and administrative expenses increased 9% to $6.3 million primarily due to higher allocated corporate expenses.

FINANCIAL OUTLOOK:

Based upon the Company's year-to-date results and current outlook for the remainder of the year, the Company is updating its financial outlook.

For the full-year 2021, the Company expects:

Previous Current

$610 million to $640 $618 million to $628 million million * Total revenue: * Adjusted EBITDA: $245 million to $260 $245 million to $249 * Gross rental equipment capital million million expenditures: $100 million to $120 $108 million to $118 million million

1.

Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs and share-based compensation. A reconciliation of actual net income to Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating activities can be found at the end of this release.

2.

Information reconciling forward-looking Adjusted EBITDA to the comparable GAAP financial measures is unavailable to the Company without unreasonable effort because certain items required for such reconciliations are outside of the Company's control and/or cannot be reasonably predicted, such as the provision for income taxes. Therefore, no reconciliation to the most comparable GAAP measures is provided. The Company provides Adjusted EBITDA guidance because it believes that Adjusted EBITDA, when viewed with the Company's results under GAAP, provides useful information for the reasons noted in the reconciliation of actual Adjusted EBITDA to the most directly comparable GAAP measures at the end of this release.

ABOUT MCGRATH RENTCORP:

Founded in 1979, McGrath RentCorp (Nasdaq: MGRC) is a diversified business-to-business rental company providing modular buildings, electronic test equipment, portable storage and tank containment solutions across the United States and other select North American regions. The Company's rental operations consist of four divisions: Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs; TRS-RenTelco rents and sells electronic test equipment; Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids; and Mobile Modular Portable Storage provides portable storage rental solutions. For more information on McGrath RentCorp and its operating units, please visit our websites:

Corporate - www.mgrc.com Modular Buildings - www.mobilemodular.com Electronic Test Equipment - www.trsrentelco.com Tanks and Boxes - www.adlertankrentals.com Portable Storage - www.mobilemodularcontainers.com School Facilities Manufacturing - www.enviroplex.com

You should read this press release in conjunction with the financial statements and notes thereto included in the Company's latest Forms 10-K, 10-Q and other SEC filings. You can visit the Company's web site at www.mgrc.com to access information on McGrath RentCorp, including the latest Forms 10-K, 10-Q and other SEC filings.

CONFERENCE CALL NOTE:

As previously announced in its press release of October 1, 2021, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on October 28, 2021 to discuss the third quarter 2021 results. To participate in the teleconference, dial 1-844-707-0666 (in the U.S.), or 1-703-639-1220 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company's website at https://investors.mgrc.com/. A replay will be available for 7 days following the call by dialing 1-855-859-2056 (in the U.S.), or 1-404-537-3406 (outside the U.S.). The pass code for the conference call replay is 5485029. 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 https://investors.mgrc.com/events-and-presentations.

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding McGrath RentCorp's expectations, strategies, prospects or targets are forward looking statements. These forward-looking statements also can be identified by the use of forward-looking terminology such as "anticipates," "believes," "continues," "could," "estimates," "expects," "intends," "may," "plan," "predict," "project," or "will," or the negative of these terms or other comparable terminology. In particular, Mr. Hanna's statements about the Design Space and Kitchens To Go acquisitions providing additional long-term growth opportunities and the expectation to deploy more rental equipment capital and to expand the breadth of products and services to the Company's customers, optimism about the overall positive rental demand trends, as well as the statements regarding the full year 2021 in the "Financial Outlook" section, are forward-looking.

These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected including: the duration ofthe COVID-19 pandemic and its economic impact, the extent and length of the restrictions associated with COVID-19 pandemic, the health of the education and commercial markets in our modular building division; the activity levels in the general purpose and communications test equipment markets at TRS-RenTelco; the ability to obtain the synergies expected from the Design Space and Kitchens To Go acquisitions and the success of integrating such acquisitions; the utilization levels and rental rates of our Adler Tanks liquid and solid containment tank and box rental assets; continued execution of our performance improvement initiatives; our ability to successfully increase prices to offset cost increases; and our ability to effectively manage our rental assets, as well as the factors disclosed under "Risk Factors" in the Company's Form 10-K and other SEC filings.

Forward-looking statements are made only as of the date hereof. Except as otherwise required by law, we assume no obligation to update any of the forward-looking statements contained in this press release.

Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs and1. share-based compensation. A reconciliation of actual net income to Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating activities can be found at the end of this release.

Information reconciling forward-looking Adjusted EBITDA to the comparable GAAP financial measures is unavailable to the Company without unreasonable effort because certain items required for such reconciliations are outside of the Company's control and/or cannot be reasonably predicted, such as the2. provision for income taxes. Therefore, no reconciliation to the most comparable GAAP measures is provided. The Company provides Adjusted EBITDA guidance because it believes that Adjusted EBITDA, when viewed with the Company's results under GAAP, provides useful information for the reasons noted in the reconciliation of actual Adjusted EBITDA to the most directly comparable GAAP measures at the end of this release.

ABOUT MCGRATH RENTCORP:

Founded in 1979, McGrath RentCorp (Nasdaq: MGRC) is a diversified business-to-business rental company providing modular buildings, electronic test equipment, portable storage and tank containment solutions across the United States and other select North American regions. The Company's rental operations consist of four divisions: Mobile Modular rents and sells modular buildings to fulfill customers' temporary and permanent classroom and office space needs; TRS-RenTelco rents and sells electronic test equipment; Adler Tank Rentals rents and sells containment solutions for hazardous and nonhazardous liquids and solids; and Mobile Modular Portable Storage provides portable storage rental solutions. For more information on McGrath RentCorp and its operating units, please visit our websites:

Corporate - www.mgrc.com Modular Buildings - www.mobilemodular.com Electronic Test Equipment - www.trsrentelco.com Tanks and Boxes - www.adlertankrentals.com Portable Storage - www.mobilemodularcontainers.com School Facilities Manufacturing - www.enviroplex.com

You should read this press release in conjunction with the financial statements and notes thereto included in the Company's latest Forms 10-K, 10-Q and other SEC filings. You can visit the Company's web site at www.mgrc.com to access information on McGrath RentCorp, including the latest Forms 10-K, 10-Q and other SEC filings.

CONFERENCE CALL NOTE:

As previously announced in its press release of October 1, 2021, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on October 28, 2021 to discuss the third quarter 2021 results. To participate in the teleconference, dial 1-844-707-0666 (in the U.S.), or 1-703-639-1220 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company's website at https://investors.mgrc.com/. A replay will be available for 7 days following the call by dialing 1-855-859-2056 (in the U.S.), or 1-404-537-3406 (outside the U.S.). The pass code for the conference call replay is 5485029. 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 https://investors.mgrc.com/events-and-presentations.

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding McGrath RentCorp's expectations, strategies, prospects or targets are forward looking statements. These forward-looking statements also can be identified by the use of forward-looking terminology such as "anticipates," "believes," "continues," "could," "estimates," "expects," "intends," "may," "plan," "predict," "project," or "will," or the negative of these terms or other comparable terminology. In particular, Mr. Hanna's statements about the Design Space and Kitchens To Go acquisitions providing additional long-term growth opportunities and the expectation to deploy more rental equipment capital and to expand the breadth of products and services to the Company's customers, optimism about the overall positive rental demand trends, as well as the statements regarding the full year 2021 in the "Financial Outlook" section, are forward-looking.

These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected including: the duration ofthe COVID-19 pandemic and its economic impact, the extent and length of the restrictions associated with COVID-19 pandemic, the health of the education and commercial markets in our modular building division; the activity levels in the general purpose and communications test equipment markets at TRS-RenTelco; the ability to obtain the synergies expected from the Design Space and Kitchens To Go acquisitions and the success of integrating such acquisitions; the utilization levels and rental rates of our Adler Tanks liquid and solid containment tank and box rental assets; continued execution of our performance improvement initiatives; our ability to successfully increase prices to offset cost increases; and our ability to effectively manage our rental assets, as well as the factors disclosed under "Risk Factors" in the Company's Form 10-K and other SEC filings.

Forward-looking statements are made only as of the date hereof. Except as otherwise required by law, we assume no obligation to update any of the forward-looking statements contained in this press release.

MCGRATH RENTCORPCONDENSED CONSOLIDATED STATEMENTS OF INCOME(UNAUDITED)

Three Months Ended Nine Months Ended September 30, September 30,

(in thousands, except per 2021 2020 2021 2020 share amounts)

Revenues

Rental $ 103,269 $ 88,138 $ 283,937 $ 263,273

Rental related services 31,513 25,040 73,870 70,026

Rental operations 134,782 113,178 357,807 333,299

Sales 37,636 42,331 80,503 87,366

Other 874 939 2,612 2,909

Total revenues 173,292 156,448 440,922 423,574

Costs and Expenses

Direct costs of rental operations:

Depreciation of rental 23,802 21,419 68,216 64,640 equipment

Rental related services 24,356 18,603 56,236 51,760

Other 24,711 18,553 67,696 56,171

Total direct costs of 72,869 58,575 192,148 172,571 rental operations

Costs of sales 24,618 29,669 50,021 57,911

Total costs of revenues 97,487 88,244 242,169 230,482

Gross profit 75,805 68,204 198,753 193,093

Selling and 39,907 30,871 109,305 93,365 administrative expenses

Income from operations 35,898 37,333 89,448 99,728

Other income (expense):

Interest expense (3,168 ) (1,968 ) (7,208 ) (6,804 )

Foreign currency exchange (128 ) 130 (185 ) (189 )(loss) gain

Income before provision 32,602 35,495 82,055 92,735 for income taxes

Provision for income 9,350 7,394 20,797 21,926 taxes

Net income $ 23,252 $ 28,101 $ 61,258 $ 70,809

Earnings per share:

Basic $ 0.96 $ 1.17 $ 2.53 $ 2.93

Diluted $ 0.95 $ 1.15 $ 2.50 $ 2.88

Shares used in per share calculation:

Basic 24,245 24,097 24,209 24,170

Diluted 24,507 24,443 24,506 24,558

Cash dividends declared $ 0.435 $ 0.420 $ 1.305 $ 1.260 per share



MCGRATH RENTCORP CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

September 30,

December 31,

(in thousands)

2021

2020

Assets

Cash

$

2,380

$

1,238

Accounts receivable, net of allowance for doubtful accounts of $2,225 in 2021

and $2,100 in 2020

168,831

123,316

Rental equipment, at cost:

Relocatable modular buildings

1,023,344

882,115

Electronic test equipment

363,799

333,020

Liquid and solid containment tanks and boxes

311,677

315,706

1,698,820

1,530,841

Less: accumulated depreciation

(635,358

)

(592,725

)

Rental equipment, net

1,063,462

938,116

Property, plant and equipment, net

135,055

136,210

Prepaid expenses and other assets

59,523

41,549

Intangible assets, net

48,715

7,118

Goodwill

132,387

28,197

Total assets

$

1,610,353

$

1,275,744

Liabilities and Shareholders' Equity

Liabilities:

Notes payable

$

459,475

$

222,754

Accounts payable and accrued liabilities

137,308

108,334

Deferred income

69,634

45,975

Deferred income taxes, net

231,480

216,077

Total liabilities

897,897

593,140

Shareholders' equity:

Common stock, no par value - Authorized 40,000 shares

Issued and outstanding - 24,247 shares as of September 30, 2021 and 24,128 shares as of December 31, 2020

106,744

106,289

Retained earnings

605,754

576,419

Accumulated other comprehensive loss

(42

)

(104

)

Total shareholders' equity

712,456

682,604

Total liabilities and shareholders' equity

$

1,610,353

$

1,275,744

MCGRATH RENTCORPCONDENSED CONSOLIDATED BALANCE SHEETS(UNAUDITED)

September December 30, 31,

(in thousands) 2021 2020

Assets

Cash $ 2,380 $ 1,238

Accounts receivable, net of allowance fordoubtful accounts of $2,225 in 2021 168,831 123,316

and $2,100 in 2020

Rental equipment, at cost:

Relocatable modular buildings 1,023,344 882,115

Electronic test equipment 363,799 333,020

Liquid and solid containment tanks and boxes 311,677 315,706

1,698,820 1,530,841

Less: accumulated depreciation (635,358 ) (592,725 )

Rental equipment, net 1,063,462 938,116

Property, plant and equipment, net 135,055 136,210

Prepaid expenses and other assets 59,523 41,549

Intangible assets, net 48,715 7,118

Goodwill 132,387 28,197

Total assets $ 1,610,353 $ 1,275,744

Liabilities and Shareholders' Equity

Liabilities:

Notes payable $ 459,475 $ 222,754

Accounts payable and accrued liabilities 137,308 108,334

Deferred income 69,634 45,975

Deferred income taxes, net 231,480 216,077

Total liabilities 897,897 593,140

Shareholders' equity:

Common stock, no par value - Authorized 40,000 shares

Issued and outstanding - 24,247 shares as ofSeptember 30, 2021 and 24,128 shares as of 106,744 106,289 December 31, 2020

Retained earnings 605,754 576,419

Accumulated other comprehensive loss (42 ) (104 )

Total shareholders' equity 712,456 682,604

Total liabilities and shareholders' equity $ 1,610,353 $ 1,275,744



MCGRATH RENTCORP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 30,

(in thousands)

2021

2020

Cash Flows from Operating Activities:

Net income

$

61,258

$

70,809

Adjustments to reconcile net income to net cash provided by

operating activities:

Depreciation and amortization

79,047

71,249

Provision for doubtful accounts

193

1,227

Share-based compensation

5,302

4,894

Gain on sale of used rental equipment

(17,788

)

(14,110

)

Foreign currency exchange loss

185

189

Amortization of debt issuance costs

11

8

Change in:

Accounts receivable

(33,471

)

(2,561

)

Prepaid expenses and other assets

(11,409

)

(1,314

)

Accounts payable and accrued liabilities

17,428

(582

)

Deferred income

20,128

3,591

Deferred income taxes

15,403

(1,863

)

Net cash provided by operating activities

136,287

131,537

Cash Flows from Investing Activities:

Purchases of rental equipment

(90,379

)

(65,661

)

Purchases of property, plant and equipment

(969

)

(9,639

)

Cash paid for acquisition of businesses

(285,624

)

-

Proceeds from sales of used rental equipment

41,556

33,837

Net cash used in investing activities

(335,416

)

(41,463

)

Cash Flows from Financing Activities:

Net borrowing (repayment) under bank lines of credit

176,758

(43,460

)

Borrowings under note purchase agreement

100,000

-

Principal payment of Series B senior notes

(40,000

)

-

Repurchase of common stock

-

(13,617

)

Taxes paid related to net share settlement of stock awards

(4,847

)

(3,930

)

Payment of dividends

(31,635

)

(29,642

)

Net cash provided by (used in) financing activities

200,276

(90,649

)

Effect of foreign currency exchange rate changes on cash

(5

)

(224

)

Net increase (decrease) in cash

1,142

(799

)

Cash balance, beginning of period

1,238

2,342

Cash balance, end of period

$

2,380

$

1,543

Supplemental Disclosure of Cash Flow Information:

Interest paid, during the period

$

6,477

$

6,829

Net income taxes paid, during the period

$

8,074

$

24,704

Dividends accrued during the period, not yet paid

$

10,002

$

10,355

Rental equipment acquisitions, not yet paid

$

2,199

$

5,827

MCGRATH RENTCORPCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)

Nine Months Ended September 30,

(in thousands) 2021 2020

Cash Flows from Operating Activities:

Net income $ 61,258 $ 70,809

Adjustments to reconcile net income to net cashprovided by

operating activities:

Depreciation and amortization 79,047 71,249

Provision for doubtful accounts 193 1,227

Share-based compensation 5,302 4,894

Gain on sale of used rental equipment (17,788 ) (14,110 )

Foreign currency exchange loss 185 189

Amortization of debt issuance costs 11 8

Change in:

Accounts receivable (33,471 ) (2,561 )

Prepaid expenses and other assets (11,409 ) (1,314 )

Accounts payable and accrued liabilities 17,428 (582 )

Deferred income 20,128 3,591

Deferred income taxes 15,403 (1,863 )

Net cash provided by operating activities 136,287 131,537

Cash Flows from Investing Activities:

Purchases of rental equipment (90,379 ) (65,661 )

Purchases of property, plant and equipment (969 ) (9,639 )

Cash paid for acquisition of businesses (285,624 ) -

Proceeds from sales of used rental equipment 41,556 33,837

Net cash used in investing activities (335,416 ) (41,463 )

Cash Flows from Financing Activities:

Net borrowing (repayment) under bank lines of 176,758 (43,460 )credit

Borrowings under note purchase agreement 100,000 -

Principal payment of Series B senior notes (40,000 ) -

Repurchase of common stock - (13,617 )

Taxes paid related to net share settlement of (4,847 ) (3,930 )stock awards

Payment of dividends (31,635 ) (29,642 )

Net cash provided by (used in) financing 200,276 (90,649 )activities

Effect of foreign currency exchange rate changes (5 ) (224 )on cash

Net increase (decrease) in cash 1,142 (799 )

Cash balance, beginning of period 1,238 2,342

Cash balance, end of period $ 2,380 $ 1,543

Supplemental Disclosure of Cash Flow Information:

Interest paid, during the period $ 6,477 $ 6,829

Net income taxes paid, during the period $ 8,074 $ 24,704

Dividends accrued during the period, not yet $ 10,002 $ 10,355 paid

Rental equipment acquisitions, not yet paid $ 2,199 $ 5,827



1.

Average rental equipment represents the cost of rental equipment, excluding accessory equipment. For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.

2.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

3.

Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

4.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

Average rental equipment represents the cost of rental equipment, excluding1. accessory equipment. For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.

2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

Average utilization is calculated by dividing the average month end costs3. of rental equipment on rent by the average month end total costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of4. monthly rental revenues by the cost of rental equipment on rent for the period.

MCGRATH RENTCORP

BUSINESS SEGMENT DATA (unaudited)

Three months ended September 30, 2021

(dollar amounts in thousands)

Mobile Modular

TRS-RenTelco

Adler Tanks

Enviroplex

Consolidated

Revenues

Rental

$

59,223

$

29,204

$

14,842

$

-

$

103,269

Rental related services

24,468

699

6,346

-

31,513

Rental operations

83,691

29,903

21,188

-

134,782

Sales

26,362

4,773

960

5,541

37,636

Other

341

398

135

-

874

Total revenues

110,394

35,074

22,283

5,541

173,292

Costs and Expenses

Direct costs of rental operations:

Depreciation

7,544

12,151

4,107

-

23,802

Rental related services

18,508

663

5,185

-

24,356

Other

16,533

5,015

3,163

-

24,711

Total direct costs of rental operations

42,585

17,829

12,455

-

72,869

Costs of sales

18,145

1,743

680

4,050

24,618

Total costs of revenues

60,730

19,572

13,135

4,050

97,487

Gross Profit

Rental

35,146

12,038

7,572

-

54,756

Rental related services

5,960

36

1,161

-

7,157

Rental operations

41,106

12,074

8,733

-

61,913

Sales

8,217

3,030

280

1,491

13,018

Other

341

398

135

-

874

Total gross profit

49,664

15,502

9,148

1,491

75,805

Selling and administrative expenses

26,138

6,010

6,333

1,426

39,907

Income from operations

$

23,526

$

9,492

$

2,815

$

65

35,898

Interest expense

(3,168

)

Foreign currency exchange loss

(128

)

Provision for income taxes

(9,350

)

Net income

$

23,252

Other Information

Average rental equipment 1

$

975,119

$

362,104

$

311,876

Average monthly total yield 2

2.02

%

2.69

%

1.59

%

Average utilization 3

76.5

%

66.9

%

48.1

%

Average monthly rental rate 4

2.65

%

4.02

%

3.30

%

MCGRATH RENTCORP

BUSINESSSEGMENT DATA (unaudited)

Three monthsended September 30,2021

(dollar Mobile Adleramounts in Modular TRS-RenTelco Tanks Enviroplex Consolidated thousands)

Revenues

Rental $ 59,223 $ 29,204 $ 14,842 $ - $ 103,269

Rental related 24,468 699 6,346 - 31,513 services

Rental 83,691 29,903 21,188 - 134,782 operations

Sales 26,362 4,773 960 5,541 37,636

Other 341 398 135 - 874

Total revenues 110,394 35,074 22,283 5,541 173,292



Costs and Expenses

Direct costsof rental operations:

Depreciation 7,544 12,151 4,107 - 23,802

Rental related 18,508 663 5,185 - 24,356 services

Other 16,533 5,015 3,163 - 24,711

Total directcosts of 42,585 17,829 12,455 - 72,869 rentaloperations

Costs of sales 18,145 1,743 680 4,050 24,618

Total costs of 60,730 19,572 13,135 4,050 97,487 revenues



Gross Profit

Rental 35,146 12,038 7,572 - 54,756

Rental related 5,960 36 1,161 - 7,157 services

Rental 41,106 12,074 8,733 - 61,913 operations

Sales 8,217 3,030 280 1,491 13,018

Other 341 398 135 - 874

Total gross 49,664 15,502 9,148 1,491 75,805 profit

Selling andadministrative 26,138 6,010 6,333 1,426 39,907 expenses

Income from $ 23,526 $ 9,492 $ 2,815 $ 65 35,898 operations

Interest (3,168 )expense

Foreigncurrency (128 )exchange loss

Provision for (9,350 )income taxes

Net income $ 23,252



Other Information

Average rental $ 975,119 $ 362,104 $ 311,876 equipment ^1

Averagemonthly total 2.02 % 2.69 % 1.59 % yield ^2

Average 76.5 % 66.9 % 48.1 % utilization ^3

Averagemonthly rental 2.65 % 4.02 % 3.30 % rate ^4

1.

Average rental equipment represents the cost of rental equipment, excluding accessory equipment. For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.

2.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

3.

Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

4.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

Average rental equipment represents the cost of rental equipment, excluding1. accessory equipment. For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.

2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

Average utilization is calculated by dividing the average month end costs3. of rental equipment on rent by the average month end total costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of4. monthly rental revenues by the cost of rental equipment on rent for the period.

MCGRATH RENTCORP

BUSINESS SEGMENT DATA (unaudited)

Three months ended September 30, 2020

(dollar amounts in thousands)

Mobile Modular

TRS-RenTelco

Adler Tanks

Enviroplex

Consolidated

Revenues

Rental

$

47,134

$

27,619

$

13,385

$

-

$

88,138

Rental related services

18,684

800

5,556

-

25,040

Rental operations

65,818

28,419

18,941

-

113,178

Sales

29,275

6,912

230

5,914

42,331

Other

320

525

94

-

939

Total revenues

95,413

35,856

19,265

5,914

156,448

Costs and Expenses

Direct costs of rental operations:

Depreciation

5,771

11,547

4,101

-

21,419

Rental related services

13,510

673

4,420

-

18,603

Other

11,780

4,820

1,953

-

18,553

Total direct costs of rental operations

31,061

17,040

10,474

-

58,575

Costs of sales

21,726

3,853

251

3,839

29,669

Total costs of revenues

52,787

20,893

10,725

3,839

88,244

Gross Profit (Loss)

Rental

29,583

11,252

7,331

-

48,166

Rental related services

5,174

127

1,136

-

6,437

Rental operations

34,757

11,379

8,467

-

54,603

Sales

7,549

3,059

(21

)

2,075

12,662

Other

320

525

94

-

939

Total gross profit

42,626

14,963

8,540

2,075

68,204

Selling and administrative expenses

17,739

5,962

5,821

1,349

30,871

Income from operations

$

24,887

$

9,001

$

2,719

$

726

37,333

Interest expense

(1,968

)

Foreign currency exchange income

130

Provision for income taxes

(7,394

)

Net income

$

28,101

Other Information

Average rental equipment 1

$

829,460

$

336,015

$

314,933

Average monthly total yield 2

1.89

%

2.74

%

1.42

%

Average utilization 3

76.3

%

67.1

%

44.1

%

Average monthly rental rate 4

2.48

%

4.08

%

3.21

%

MCGRATH RENTCORP

BUSINESSSEGMENT DATA (unaudited)

Three monthsended September 30,2020

(dollar Mobile Adleramounts in Modular TRS-RenTelco Tanks Enviroplex Consolidated thousands)

Revenues

Rental $ 47,134 $ 27,619 $ 13,385 $ - $ 88,138

Rental related 18,684 800 5,556 - 25,040 services

Rental 65,818 28,419 18,941 - 113,178 operations

Sales 29,275 6,912 230 5,914 42,331

Other 320 525 94 - 939

Total revenues 95,413 35,856 19,265 5,914 156,448



Costs and Expenses

Direct costsof rental operations:

Depreciation 5,771 11,547 4,101 - 21,419

Rental related 13,510 673 4,420 - 18,603 services

Other 11,780 4,820 1,953 - 18,553

Total directcosts of 31,061 17,040 10,474 - 58,575 rentaloperations

Costs of sales 21,726 3,853 251 3,839 29,669

Total costs of 52,787 20,893 10,725 3,839 88,244 revenues



Gross Profit (Loss)

Rental 29,583 11,252 7,331 - 48,166

Rental related 5,174 127 1,136 - 6,437 services

Rental 34,757 11,379 8,467 - 54,603 operations

Sales 7,549 3,059 (21 ) 2,075 12,662

Other 320 525 94 - 939

Total gross 42,626 14,963 8,540 2,075 68,204 profit

Selling andadministrative 17,739 5,962 5,821 1,349 30,871 expenses

Income from $ 24,887 $ 9,001 $ 2,719 $ 726 37,333 operations

Interest (1,968 )expense

Foreigncurrency 130 exchangeincome

Provision for (7,394 )income taxes

Net income $ 28,101



Other Information

Average rental $ 829,460 $ 336,015 $ 314,933 equipment ^1

Averagemonthly total 1.89 % 2.74 % 1.42 % yield ^2

Average 76.3 % 67.1 % 44.1 % utilization ^3

Averagemonthly rental 2.48 % 4.08 % 3.21 % rate ^4

1.

Average rental equipment represents the cost of rental equipment, excluding accessory equipment. For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.

2.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

3.

Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

4.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

Average rental equipment represents the cost of rental equipment, excluding1. accessory equipment. For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.

2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

Average utilization is calculated by dividing the average month end costs3. of rental equipment on rent by the average month end total costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of4. monthly rental revenues by the cost of rental equipment on rent for the period.

MCGRATH RENTCORP

BUSINESS SEGMENT DATA (unaudited)

Nine months ended September 30, 2021

(dollar amounts in thousands)

Mobile Modular

TRS-RenTelco

Adler Tanks

Enviroplex

Consolidated

Revenues

Rental

$

159,118

$

84,340

$

40,479

$

-

$

283,937

Rental related services

54,726

2,149

16,995

-

73,870

Rental operations

213,844

86,489

57,474

-

357,807

Sales

48,766

14,679

2,161

14,897

80,503

Other

1,004

1,292

316

-

2,612

Total revenues

263,614

102,460

59,951

14,897

440,922

Costs and Expenses

Direct costs of rental operations:

Depreciation

20,437

35,429

12,350

-

68,216

Rental related services

40,384

2,061

13,791

-

56,236

Other

45,309

14,267

8,120

-

67,696

Total direct costs of rental operations

106,130

51,757

34,261

-

192,148

Costs of sales

32,127

5,836

1,523

10,535

50,021

Total costs of revenues

138,257

57,593

35,784

10,535

242,169

Gross Profit

Rental

93,373

34,643

20,009

-

148,025

Rental related services

14,340

90

3,204

-

17,634

Rental operations

107,713

34,733

23,213

-

165,659

Sales

16,640

8,842

638

4,362

30,482

Other

1,004

1,292

316

-

2,612

Total gross profit

125,357

44,867

24,167

4,362

198,753

Selling and administrative expenses

67,977

18,381

18,853

4,094

109,305

Income from operations

$

57,380

$

26,486

$

5,314

$

268

89,448

Interest expense

(7,208

)

Foreign currency exchange loss

(185

)

Provision for income taxes

(20,797

)

Net income

$

61,258

Other Information

Average rental equipment 1

$

906,633

$

348,749

$

312,928

Average monthly total yield 2

1.95

%

2.69

%

1.44

%

Average utilization 3

76.0

%

67.4

%

44.0

%

Average monthly rental rate 4

2.57

%

3.98

%

3.26

%

MCGRATH RENTCORP

BUSINESSSEGMENT DATA (unaudited)

Nine monthsended September 30,2021

(dollar Mobile Adleramounts in Modular TRS-RenTelco Tanks Enviroplex Consolidated thousands)

Revenues

Rental $ 159,118 $ 84,340 $ 40,479 $ - $ 283,937

Rental related 54,726 2,149 16,995 - 73,870 services

Rental 213,844 86,489 57,474 - 357,807 operations

Sales 48,766 14,679 2,161 14,897 80,503

Other 1,004 1,292 316 - 2,612

Total revenues 263,614 102,460 59,951 14,897 440,922



Costs and Expenses

Direct costsof rental operations:

Depreciation 20,437 35,429 12,350 - 68,216

Rental related 40,384 2,061 13,791 - 56,236 services

Other 45,309 14,267 8,120 - 67,696

Total directcosts of 106,130 51,757 34,261 - 192,148 rentaloperations

Costs of sales 32,127 5,836 1,523 10,535 50,021

Total costs of 138,257 57,593 35,784 10,535 242,169 revenues



Gross Profit

Rental 93,373 34,643 20,009 - 148,025

Rental related 14,340 90 3,204 - 17,634 services

Rental 107,713 34,733 23,213 - 165,659 operations

Sales 16,640 8,842 638 4,362 30,482

Other 1,004 1,292 316 - 2,612

Total gross 125,357 44,867 24,167 4,362 198,753 profit

Selling andadministrative 67,977 18,381 18,853 4,094 109,305 expenses

Income from $ 57,380 $ 26,486 $ 5,314 $ 268 89,448 operations

Interest (7,208 )expense

Foreigncurrency (185 )exchange loss

Provision for (20,797 )income taxes

Net income $ 61,258



Other Information

Average rental $ 906,633 $ 348,749 $ 312,928 equipment ^1

Averagemonthly total 1.95 % 2.69 % 1.44 % yield ^2

Average 76.0 % 67.4 % 44.0 % utilization ^3

Averagemonthly rental 2.57 % 3.98 % 3.26 % rate ^4

1.

Average rental equipment represents the cost of rental equipment, excluding accessory equipment. For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.

2.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

3.

Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

4.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

Average rental equipment represents the cost of rental equipment, excluding1. accessory equipment. For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.

2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

Average utilization is calculated by dividing the average month end costs3. of rental equipment on rent by the average month end total costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of4. monthly rental revenues by the cost of rental equipment on rent for the period.

MCGRATH RENTCORP

BUSINESS SEGMENT DATA (unaudited)

Nine months ended September 30, 2020

(dollar amounts in thousands)

Mobile Modular

TRS-RenTelco

Adler Tanks

Enviroplex

Consolidated

Revenues

Rental

$

141,172

$

81,167

$

40,934

$

-

$

263,273

Rental related services

51,291

2,296

16,439

-

70,026

Rental operations

192,463

83,463

57,373

-

333,299

Sales

51,847

17,943

960

16,616

87,366

Other

1,063

1,592

254

-

2,909

Total revenues

245,373

102,998

58,587

16,616

423,574

Costs and Expenses

Direct costs of rental operations:

Depreciation

17,177

35,129

12,334

-

64,640

Rental related services

37,222

1,836

12,702

-

51,760

Other

36,773

12,762

6,636

-

56,171

Total direct costs of rental operations

91,172

49,727

31,672

-

172,571

Costs of sales

37,274

9,350

799

10,488

57,911

Total costs of revenues

128,446

59,077

32,471

10,488

230,482

Gross Profit

Rental

87,222

33,276

21,964

-

142,462

Rental related services

14,069

460

3,737

-

18,266

Rental operations

101,291

33,736

25,701

-

160,728

Sales

14,573

8,593

161

6,128

29,455

Other

1,064

1,592

254

-

2,910

Total gross profit

116,928

43,921

26,116

6,128

193,093

Selling and administrative expenses

52,014

18,198

18,998

4,155

93,365

Income from operations

$

64,914

$

25,723

$

7,118

$

1,973

99,728

Interest expense

(6,804

)

Foreign currency exchange loss

(189

)

Provision for income taxes

(21,926

)

Net income

$

70,809

Other Information

Average rental equipment 1

$

822,723

$

337,330

$

314,859

Average monthly total yield 2

1.89

%

2.67

%

1.44

%

Average utilization 3

77.5

%

65.6

%

45.5

%

Average monthly rental rate 4

2.46

%

4.08

%

3.18

%

MCGRATH RENTCORP

BUSINESSSEGMENT DATA (unaudited)

Nine monthsended September 30,2020

(dollar Mobile Adleramounts in Modular TRS-RenTelco Tanks Enviroplex Consolidated thousands)

Revenues

Rental $ 141,172 $ 81,167 $ 40,934 $ - $ 263,273

Rental related 51,291 2,296 16,439 - 70,026 services

Rental 192,463 83,463 57,373 - 333,299 operations

Sales 51,847 17,943 960 16,616 87,366

Other 1,063 1,592 254 - 2,909

Total revenues 245,373 102,998 58,587 16,616 423,574



Costs and Expenses

Direct costsof rental operations:

Depreciation 17,177 35,129 12,334 - 64,640

Rental related 37,222 1,836 12,702 - 51,760 services

Other 36,773 12,762 6,636 - 56,171

Total directcosts of 91,172 49,727 31,672 - 172,571 rentaloperations

Costs of sales 37,274 9,350 799 10,488 57,911

Total costs of 128,446 59,077 32,471 10,488 230,482 revenues



Gross Profit

Rental 87,222 33,276 21,964 - 142,462

Rental related 14,069 460 3,737 - 18,266 services

Rental 101,291 33,736 25,701 - 160,728 operations

Sales 14,573 8,593 161 6,128 29,455

Other 1,064 1,592 254 - 2,910

Total gross 116,928 43,921 26,116 6,128 193,093 profit

Selling andadministrative 52,014 18,198 18,998 4,155 93,365 expenses

Income from $ 64,914 $ 25,723 $ 7,118 $ 1,973 99,728 operations

Interest (6,804 )expense

Foreigncurrency (189 )exchange loss

Provision for (21,926 )income taxes

Net income $ 70,809



Other Information

Average rental $ 822,723 $ 337,330 $ 314,859 equipment ^1

Averagemonthly total 1.89 % 2.67 % 1.44 % yield ^2

Average 77.5 % 65.6 % 45.5 % utilization ^3

Averagemonthly rental 2.46 % 4.08 % 3.18 % rate ^4

1.

Average rental equipment represents the cost of rental equipment, excluding accessory equipment. For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.

2.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

3.

Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

4.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

Reconciliation of Adjusted EBITDA to the most directly comparable GAAP measures

To supplement the Company's financial data presented on a basis consistent with accounting principles generally accepted in the United States of America ("GAAP"), the Company presents "Adjusted EBITDA", which is defined by the Company as net income before interest expense, provision for income taxes, depreciation, amortization and share-based compensation. The Company presents Adjusted EBITDA as a financial measure as management believes it provides useful information to investors regarding the Company's liquidity and financial condition and because management, as well as the Company's lenders, use this measure in evaluating the performance of the Company.

Management uses Adjusted EBITDA as a supplement to GAAP measures to further evaluate the Company's period-to-period operating performance, compliance with financial covenants in the Company's revolving lines of credit and senior notes and the Company's ability to meet future capital expenditure and working capital requirements. Management believes the exclusion of non-cash charges, including share-based compensation, is useful in measuring the Company's cash available for operations and performance of the Company. Because management finds Adjusted EBITDA useful, the Company believes its investors will also find Adjusted EBITDA useful in evaluating the Company's performance.

Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of the Company's profitability or liquidity. Adjusted EBITDA is not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. Unlike EBITDA, which may be used by other companies or investors, Adjusted EBITDA does not include share-based compensation charges. The Company believes that Adjusted EBITDA is of limited use in that it does not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP and does not accurately reflect real cash flow. In addition, other companies may not use Adjusted EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted EBITDA for purposes of comparison. The Company's presentation of Adjusted EBITDA should not be construed as an inference that the Company will not incur expenses that are the same as or similar to the adjustments in this presentation. Therefore, Adjusted EBITDA should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures. The Company compensates for the limitations of Adjusted EBITDA by relying upon GAAP results to gain a complete picture of the Company's performance. Because Adjusted EBITDA is a non-GAAP financial measure as defined by the SEC, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Average rental equipment represents the cost of rental equipment, excluding1. accessory equipment. For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.

2. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

Average utilization is calculated by dividing the average month end costs3. of rental equipment on rent by the average month end total costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of4. monthly rental revenues by the cost of rental equipment on rent for the period.

Reconciliation of Adjusted EBITDA to the most directly comparable GAAP measures

To supplement the Company's financial data presented on a basis consistent with accounting principles generally accepted in the United States of America ("GAAP"), the Company presents "Adjusted EBITDA", which is defined by the Company as net income before interest expense, provision for income taxes, depreciation, amortization and share-based compensation. The Company presents Adjusted EBITDA as a financial measure as management believes it provides useful information to investors regarding the Company's liquidity and financial condition and because management, as well as the Company's lenders, use this measure in evaluating the performance of the Company.

Management uses Adjusted EBITDA as a supplement to GAAP measures to further evaluate the Company's period-to-period operating performance, compliance with financial covenants in the Company's revolving lines of credit and senior notes and the Company's ability to meet future capital expenditure and working capital requirements. Management believes the exclusion of non-cash charges, including share-based compensation, is useful in measuring the Company's cash available for operations and performance of the Company. Because management finds Adjusted EBITDA useful, the Company believes its investors will also find Adjusted EBITDA useful in evaluating the Company's performance.

Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of the Company's profitability or liquidity. Adjusted EBITDA is not in accordance with or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. Unlike EBITDA, which may be used by other companies or investors, Adjusted EBITDA does not include share-based compensation charges. The Company believes that Adjusted EBITDA is of limited use in that it does not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP and does not accurately reflect real cash flow. In addition, other companies may not use Adjusted EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted EBITDA for purposes of comparison. The Company's presentation of Adjusted EBITDA should not be construed as an inference that the Company will not incur expenses that are the same as or similar to the adjustments in this presentation. Therefore, Adjusted EBITDA should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures. The Company compensates for the limitations of Adjusted EBITDA by relying upon GAAP results to gain a complete picture of the Company's performance. Because Adjusted EBITDA is a non-GAAP financial measure as defined by the SEC, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Reconciliationof Net Incometo AdjustedEBITDA

(dollar Three Months Ended Nine Months Ended Twelve Months Endedamounts in September 30, September 30, September 30, thousands)

2021 2020 2021 2020 2021 2020

Net income $ 23,252 $ 28,101 $ 61,258 $ 70,809 $ 92,433 $ 97,210

Provisionfor income 9,350 7,394 20,797 21,926 28,931 30,979 taxes

Interest 3,168 1,968 7,208 6,804 9,191 9,728 expense

Depreciationand 28,488 23,587 79,047 71,249 102,441 94,765 amortization

EBITDA 64,258 61,050 168,310 170,788 232,996 232,682

Share-based 1,705 1,670 5,302 4,894 5,957 6,690 compensation

Adjusted $ 65,963 $ 62,720 $ 173,612 $ 175,682 $ 238,953 $ 239,372 EBITDA ^1

AdjustedEBITDA 38 % 40 % 39 % 41 % 41 % 42 %margin ^2



Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities

(dollar amounts in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Twelve Months Ended September 30,

2021

2020

2021

2020

2021

2020

Adjusted EBITDA 1

$

65,963

$

62,720

$

173,612

$

175,682

$

238,953

$

239,372

Interest paid

(2,490

)

(1,798

)

(6,477

)

(6,829

)

(8,698

)

(9,945

)

Income taxes paid, net of refunds received

(1,084

)

(22,551

)

(8,074

)

(24,704

)

(18,273

)

(32,202

)

Gain on sale of used rental equipment

(5,918

)

(4,508

)

(17,788

)

(14,110

)

(23,007

)

(20,251

)

Foreign currency exchange loss (gain)

128

(130

)

185

189

(82

)

59

Amortization of debt issuance costs

5

3

11

8

14

11

Change in certain assets and liabilities:

Accounts receivable, net

(27,922

)

(3,493

)

(33,278

)

(1,334

)

(27,161

)

8,630

Prepaid expenses and other assets

(2,024

)

327

(11,409

)

(1,314

)

(6,288

)

(3,110

)

Accounts payable and other liabilities

(1,023

)

5,669

19,377

358

22,248

2,315

Deferred income

12,670

(2,224

)

20,128

3,591

7,548

(2,217

)

Net cash provided by operating activities

$

38,305

$

34,015

$

136,287

$

131,537

$

185,254

$

182,662

Reconciliation of Adjusted EBITDA toNet Cash Provided by OperatingActivities

(dollar Three Months Ended Nine Months Ended Twelve Months Endedamounts in September 30, September 30, September 30, thousands)

2021 2020 2021 2020 2021 2020

Adjusted $ 65,963 $ 62,720 $ 173,612 $ 175,682 $ 238,953 $ 239,372 EBITDA ^1

Interest (2,490 ) (1,798 ) (6,477 ) (6,829 ) (8,698 ) (9,945 )paid

Income taxespaid, net of (1,084 ) (22,551 ) (8,074 ) (24,704 ) (18,273 ) (32,202 )refundsreceived

Gain on saleof used (5,918 ) (4,508 ) (17,788 ) (14,110 ) (23,007 ) (20,251 )rentalequipment

Foreigncurrency 128 (130 ) 185 189 (82 ) 59 exchangeloss (gain)

Amortizationof debt 5 3 11 8 14 11 issuancecosts

Change incertain assets andliabilities:

Accountsreceivable, (27,922 ) (3,493 ) (33,278 ) (1,334 ) (27,161 ) 8,630 net

Prepaidexpenses and (2,024 ) 327 (11,409 ) (1,314 ) (6,288 ) (3,110 )other assets

Accountspayable and (1,023 ) 5,669 19,377 358 22,248 2,315 otherliabilities

Deferred 12,670 (2,224 ) 20,128 3,591 7,548 (2,217 )income

Net cashprovided by $ 38,305 $ 34,015 $ 136,287 $ 131,537 $ 185,254 $ 182,662 operatingactivities



1.

Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization and share-based compensation.

2.

Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total revenues for the period.

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CONTACT: Keith E. Pratt EVP & Chief Financial Officer 925-606-9200