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CNH Industrial: periodic report on the buy-back program

London, August 3, 2022

CNH Industrial N.V. (NYSE: CNHI / MI: CNHI) announces that, under the common share buy-back program currently in place, in the period July 25 – July 27, 2022, the Company has completed the transactions reported in aggregate based on automatic orders placed with the Company’s broker (who has made its trading decisions as to the timing of the purchases independently of the Company and on the basis of instructions given before the commencement of the Company’s closed period under the applicable regulations) as follows:

Date Number of common shares purchased Average price
per share
excluding fees
Consideration
excluding fees
Consideration (*)
excluding fees
(€) (€) ($)
July 25, 2022 184,416 11.4620 2,113,776.19 2,163,661.31
July 26, 2022 200,000 11.6114 2,322,280.00 2,351,076.27
July 27, 2022 179,355 11.4252 2,049,166.75 2,080,314.08
563,771 6,485,222.94 6,595,051.66

(*) All translations determined from Euro to US Dollar at the exchange rate reported by the European Central Bank on the date of each purchase.

After the purchases announced today and considering those previously executed under the program, the total invested amount is approximately €66,211,837.66 ($69,285,329.80) for a total amount of 5,613,049 common shares purchased.

As of July 31, 2022, the Company held 13,576,689 common shares, net of the common shares already delivered to fulfill its obligations arising from equity incentive plans.

Details of the transactions described in the table above, including the regulated markets where the purchases were made, are available on the Company’s corporate website under the Buyback Programs section at the following address: bit.ly/CNHI_Buyback.

CNH Industrial (NYSE: CNHI / MI: CNHI) is a world-class equipment and services company. Driven by its purpose of Breaking New Ground, which centers on Innovation, Sustainability and Productivity, the Company provides the strategic direction, R&D capabilities, and investments that enable the success of its global and regional Brands. Globally, Case IH and New Holland Agriculture supply 360° agriculture applications from machines to implements and the digital technologies that enhance them; and CASE and New Holland Construction Equipment deliver a full lineup of construction products that make the industry more productive. The Company’s regionally focused Brands include: STEYR, for agricultural tractors; Raven, a leader in digital agriculture, precision technology and the development of autonomous systems; Flexi-Coil, specializing in tillage and seeding systems; Miller, manufacturing application equipment; Kongskilde, providing tillage, seeding and hay & forage implements; and Eurocomach, producing a wide range of mini and midi excavators for the construction sector, including electric solutions. Across a history spanning over two centuries, CNH Industrial has always been a pioneer in its sectors and continues to passionately innovate and drive customer efficiency and success. As a truly global company, CNH Industrial’s 37,000+ employees form part of a diverse and inclusive workplace, focused on empowering customers to grow, and build, a better world.

For more information and the latest financial and sustainability reports visit: cnhindustrial.com

For news from CNH Industrial and its Brands visit: media.cnhindustrial.com

Contacts:

Media Relations
Email: mediarelations@cnhind.com

Investor Relations
Email: investor.relations@cnhind.com

Attachment

ETC Awarded $8.3 Million Contract for its Sterilization Systems Group

SOUTHAMPTON, Pa., Aug. 03, 2022 (GLOBE NEWSWIRE) — Environmental Tectonics Corporation’s (OTC Pink: ETCC) (“ETC” or the “Company”) Sterilization Systems Group announced it has been awarded an $8.3 million contract from an international customer. The contract includes three, fourteen pallet ethylene oxide (“EO”) sterilization chambers with automated pallet conveyance for use with the sterilization of medical devices. “This contract is another example of ETC Sterilization Systems Group repeat business in EO sterilization and system controls” states Eric Hunnicutt, ETC Director of EO Sterilizer Sales.  ETC’s Sterilization Systems Group offers Steam and Ethylene Oxide (“EO”) Sterilizer Systems, Vacuum Dryers, Software Systems, and project management services to the Medical Device, Pharmaceutical, Biotechnology, and Life Science industries. ETC’s systems are often specially designed to meet unique process systems challenges.

States Robert L. Laurent, Jr., President and CEO, “We are pleased to partner with our international customer on this award, which brings the first half of fiscal 2023 YTD orders received to $17.4 million, compared to $12.8 million through the first half of fiscal 2022.”

About ETC

ETC designs, manufactures, and sells software driven products and services used to recreate and monitor the physiological effects of motion on humans, and equipment to control, modify, simulate and measure environmental conditions. Our products include aircrew training systems (aeromedical, tactical combat, and general), disaster management systems, sterilizers (steam and gas), environmental testing and simulation systems, and other products that involve similar manufacturing techniques and engineering technologies. ETC’s unique ability to offer complete systems, designed and produced to high technical standards, sets it apart from its competition. ETC is headquartered in Southampton, PA. For more information about ETC, visit http://www.etcusa.com/.

Forward-looking Statements

This news release contains forward-looking statements, which are based on management’s expectations and are subject to uncertainties and changes in circumstances. Words and expressions reflecting something other than historical fact are intended to identify forward-looking statements, and these statements may include words such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “future”, “predict”, “potential”, “intend”, or “continue”, and similar expressions. We base our forward-looking statements on our current expectations and projections about future events or future financial performance. Our forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about ETC and its subsidiaries that may cause actual results to be materially different from any future results implied by these forward-looking statements. We caution you not to place undue reliance on these forward-looking statements.

Contact: Joseph F. Verbitski, Jr, CFO
Phone: (215) 355-9100 x1531
E-mail: jverbitski@etcusa.com

Synchronoss to Power Telkomsigma’s Launch of Two New Premium Personal Cloud Solutions in Indonesia

Incoming University Students Throughout Indonesia Will Receive a Free Floudrive Personal Cloud Account; A Premium Floudrive Account Will Also Be Available to 170 Million Telkomsel Mobile Customers

BRIDGEWATER, N.J., Aug. 03, 2022 (GLOBE NEWSWIRE) — Synchronoss Technologies, Inc. (“Synchronoss” or the “Company”) (Nasdaq: SNCR), a global leader and innovator in cloud, messaging and digital products and platforms, today announced the official rollout of two new premium personal cloud solutions offered by Telkomsigma, a subsidiary of Telkom Indonesia, the country’s largest telecom operator. Following the agreement in November, Telkomsigma is now making its Floudrive service, powered by Synchronoss Personal Cloud, available to university students and Telkomsel mobile customers.

As the IT Services and Data Center arm of Telkomsel, Telkomsigma is utilizing the Synchronoss Personal Cloud platform for its Floudrive service, offering a reliable and intuitive cloud storage experience with the ability to backup and restore digital content, including photos, video, texts, and other files. To ensure compliance with Indonesia’s data storage laws, Synchronoss has partnered with Alibaba, leveraging their in-country IT infrastructure.

Beginning in September, Telkomsigma will offer incoming university students a free Floudrive account that includes 50 gigabytes of cloud storage, which can be used to backup all digital content as well as share files and photos. The free bundle is the first of its kind and offered through select universities in Indonesia. Additionally, Telkomsigma will offer a premium version of Floudrive to 170 million Telkomsel mobile customers. The premium service will include 100 gigabytes of storage.

“We are excited to rollout these two new premium personal cloud solutions that leverage the Synchronoss Personal Cloud platform, especially within the universities, which is an industry-first,” said Tanto Suratno, Director of Business and Sales, Telkomsigma. “The combination of Synchronoss and Alibaba will enable us to keep pace with the millions of subscribers that will take advantage of our free and premium Floudrive services.”

“Telkomsigma, Telkomsel, and Telkom Indonesia understand the unique market opportunity to deliver personal cloud solutions that will enable a broad range of digital services to subscribers throughout Indonesia,” said Patrick Doran, Chief Technology Officer at Synchronoss. “Knowing that local data sovereignty is a critical customer requirement, we certified our technology platform on the Alibaba Cloud platform, delivering a white-label personal cloud solution that is secure, reliable, scalable, and in-country.”

Leading Tier One service providers utilize Synchronoss Personal Cloud, Synchronoss Email Suite, or both to manage more than 250 million subscribers worldwide, storing and managing more than 142 petabytes of data.

About Synchronoss
Synchronoss Technologies (Nasdaq: SNCR) builds software that empowers companies around the world to connect with their subscribers in trusted and meaningful ways. The company’s collection of products helps streamline networks, simplify onboarding, and engage subscribers to unleash new revenue streams, reduce costs and increase speed to market. Hundreds of millions of subscribers trust Synchronoss products to stay in sync with the people, services, and content they love. Learn more at www.synchronoss.com.

Media Relations Contact:
Domenick Cilea
Springboard
dcilea@springboardpr.com

Investor Relations Contact:
Matt Glover / Tom Colton
Gateway Group, Inc.
SNCR@gatewayir.com

Fortinet Reports Second Quarter 2022 Financial Results

Second Quarter 2022 Highlights

  • Product revenue of $400.7 million, up 34% year over year
  • Total revenue of $1.03 billion, up 29% year over year
  • Bookings of $1.38 billion, up 42% year over year1
  • Billings of $1.30 billion, up 36% year over year2
  • Deferred revenue of $3.93 billion, up 35% year over year
  • GAAP operating margin of 19.0%
  • Non-GAAP operating margin of 24.8%2
  • GAAP diluted net income per share attributable to Fortinet, Inc. of $0.213
  • Non-GAAP diluted net income per share attributable to Fortinet, Inc. of $0.242,3
  • Cash flow from operations of $323.4 million
  • Free cash flow of $283.5 million2
  • Cash paid for share repurchases of $800.0 million 

SUNNYVALE, Calif., Aug. 03, 2022 (GLOBE NEWSWIRE) — Fortinet® (Nasdaq: FTNT), a global leader in broad, integrated and automated cybersecurity solutions, today announced financial results for the second quarter ended June 30, 2022.

“We delivered strong revenue and billings growth in the second quarter driven by an over 50% year-over-year increase in the number of transactions larger than one million dollars. Large enterprise companies continue to favor Fortinet’s industry leading cost for performance advantage and integrated platform strategy,” said Ken Xie, Founder, Chairman, and Chief Executive Officer. “Fortinet’s market share gains are being driven by the convergence of networking and security and an accelerating focus on vendor consolidation with our Core Platform and Platform Extension solutions designed to secure our customers’ entire infrastructure from the data center to the cloud.”

Financial Highlights for the Second Quarter of 2022

  • Revenue: Total revenue was $1.03 billion for the second quarter of 2022, an increase of 28.6% compared to $801.1 million for the same quarter of 2021.
  • Product Revenue: Product revenue was $400.7 million for the second quarter of 2022, an increase of 34.3% compared to $298.3 million for the same quarter of 2021.
  • Service Revenue: Service revenue was $629.4 million for the second quarter of 2022, an increase of 25.2% compared to $502.8 million for the same quarter of 2021.
  • Bookings1: Total bookings were $1.38 billion for the second quarter of 2022, an increase of 42.1% compared to $967.9 million for the same quarter of 2021. Backlog was $349.9 million as of June 30, 2022, an increase of $188.0 million compared to $161.9 million as of December 31, 2021.
  • Billings2: Total billings were $1.30 billion for the second quarter of 2022, an increase of 35.7% compared to $960.9 million for the same quarter of 2021.
  • Deferred Revenue: Total deferred revenue was $3.93 billion as of June 30, 2022, an increase of 35.3% compared to $2.91 billion as of June 30, 2021.
  • GAAP Operating Income and Margin: GAAP operating income was $195.3 million for the second quarter of 2022, representing a GAAP operating margin of 19.0%. GAAP operating income was $147.5 million for the same quarter of 2021, representing a GAAP operating margin of 18.4%.
  • Non-GAAP Operating Income and Margin2: Non-GAAP operating income was $255.4 million for the second quarter of 2022, representing a non-GAAP operating margin of 24.8%. Non-GAAP operating income was $203.3 million for the same quarter of 2021, representing a non-GAAP operating margin of 25.4%.
  • GAAP Net Income and Diluted Net Income Per Share Attributable to Fortinet, Inc.3: GAAP net income was $173.5 million for the second quarter of 2022, compared to GAAP net income of $137.5 million for the same quarter of 2021. GAAP diluted net income per share was $0.21 for the second quarter of 2022, based on 810.1 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $0.16 for the same quarter of 2021, based on 835.4 million diluted weighted-average shares outstanding.
  • Non-GAAP Net Income and Diluted Net Income Per Share Attributable to Fortinet, Inc.2,3: Non-GAAP net income was $194.1 million for the second quarter of 2022, compared to non-GAAP net income of $158.7 million for the same quarter of 2021. Non-GAAP diluted net income per share was $0.24 for the second quarter of 2022, based on 810.1 million diluted weighted-average shares outstanding, compared to $0.19 for the same quarter of 2021, based on 835.4 million diluted weighted-average shares outstanding.
  • Cash Flow: Cash flow from operations was $323.4 million for the second quarter of 2022, compared to $418.2 million for the same quarter of 2021.
  • Free Cash Flow2: Free cash flow was $283.5 million for the second quarter of 2022, compared to $394.7 million for the same quarter of 2021.
  • Share Repurchase Program3: During the three and six months ended June 30, 2022, Fortinet repurchased 14.4 million and 25.8 million shares of its common stock at an average price of $55.45 and $57.82 per share and for an aggregate purchase price of $800.0 million and $1.49 billion, respectively. During the three and six months ended June 30, 2021, Fortinet repurchased 2.3 million shares of its common stock at an average price of $40.28 per share and for an aggregate purchase price of $91.6 million. In July 2022, Fortinet’s board of directors authorized a $1.0 billion increase in the authorized stock repurchase under our share repurchase program. As of August 1, 2022, approximately $1.03 billion remained available for future share repurchases.

Guidance

For the third quarter of 2022, Fortinet currently expects:

  • Revenue in the range of $1.105 billion to $1.135 billion
  • Billings in the range of $1.385 billion to $1.415 billion
  • Non-GAAP gross margin in the range of 75.0% to 76.0%
  • Non-GAAP operating margin in the range of 25.0% to 26.0%
  • Diluted non-GAAP net income per share attributable to Fortinet, Inc. in the range of $0.26 to $0.28, assuming a non-GAAP effective tax rate of 17%. This assumes a diluted share count of 810 million to 820 million.

For the fiscal year 2022, Fortinet currently expects:

  • Revenue in the range of $4.350 billion to $4.400 billion
  • Service revenue in the range of $2.620 billion to $2.670 billion
  • Billings in the range of $5.560 billion to $5.640 billion
  • Non-GAAP gross margin in the range of 75.0% to 76.0%
  • Non-GAAP operating margin in the range of 25.0% to 26.0%
  • Diluted non-GAAP net income per share attributable to Fortinet, Inc. in the range of $1.01 to $1.06, assuming a non-GAAP effective tax rate of 17%. This assumes a diluted share count of 810 million to 820 million.

These statements are forward looking and actual results may differ materially. Refer to the Forward-Looking Statements section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Our guidance with respect to non-GAAP financial measures excludes stock-based compensation, amortization of acquired intangible assets and gain on intellectual property matters. We have not reconciled our guidance with respect to non-GAAP financial measures to the corresponding GAAP measures because certain items that impact these measures are uncertain or out of our control, or cannot be reasonably predicted. Accordingly, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort.

1 Bookings represents the total value of all orders received during the period. Backlog represents orders received but not fulfilled and excludes Alaxala Networks Corporation. When an order is fulfilled, billings and revenue are recognized.
2 A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”.
3 All share and per share amounts presented herein have been retroactively adjusted to reflect the five-for-one forward stock split which was effective June 22, 2022.

Conference Call Details

Fortinet will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the earnings results. A live webcast of the conference call and supplemental slides will be accessible from the Investor Relations page of Fortinet’s website at https://investor.fortinet.com and a replay will be archived and accessible at https://investor.fortinet.com/events-and-presentations.

Third Quarter 2022 Conference Participation Schedule:

  • KeyBanc Technology Leadership Conference
    August 8, 2022
  • Stifel Tech Executive Summit Deer Valley
    August 29-31, 2022
  • Citibank Investor Conference
    September 7, 2022
  • Evercore Investor Conference
    September 8, 2022
  • Goldman Sachs Communicopia Conference
    September 12, 2022

Members of Fortinet’s management team are expected to present at these conferences and discuss the latest company strategies and initiatives. Fortinet’s conference presentations are expected to be available via webcast on the company’s web site. To access the most updated information, pre-register and listen to the webcast of each event, please visit the Investor Presentation & Events page of Fortinet’s website at https://investor.fortinet.com/events-and-presentations. The schedule is subject to change.

About Fortinet (www.fortinet.com)

Fortinet (NASDAQ: FTNT) makes possible a digital world that we can trust through its mission to protect people, devices and data everywhere. This is why many of the world’s largest enterprises, service providers and government organizations choose Fortinet to securely accelerate their digital journey. The Fortinet Core Platform and Platform Extension products deliver broad, integrated and automated protections across the entire digital attack surface, securing critical devices, data, applications, and connections from the data center to the cloud to the home office. The Fortinet NSE Training Institute, an initiative of Fortinet’s Training Advancement Agenda, provides one of the largest and broadest training programs in the industry to make cyber training and new career opportunities available to everyone. Learn more at https://www.fortinet.com, the Fortinet Blog or FortiGuard Labs.

Copyright © 2022 Fortinet, Inc. All rights reserved. The symbols ® and ™ denote respectively federally registered trademarks and common law trademarks of Fortinet, Inc., its subsidiaries and affiliates. Fortinet’s trademarks include, but are not limited to, the following: Fortinet, the Fortinet logo, FortiGate, FortiOS, FortiGuard, FortiCare, FortiAnalyzer, FortiManager, FortiASIC, FortiClient, FortiCloud, FortiMail, FortiSandbox, FortiADC, FortiAI, FortiAIOps, FortiAntenna, FortiAP, FortiAPCam, FortiAuthenticator, FortiCache, FortiCall, FortiCam, FortiCamera, FortiCarrier, FortiCASB, FortiCentral, FortiConnect, FortiController, FortiConverter, FortiCWP, FortiDB, FortiDDoS, FortiDeceptor, FortiDeploy, FortiDevSec, FortiEdge, FortiEDR, FortiExplorer, FortiExtender, FortiFirewall, FortiFone, FortiGSLB, FortiHypervisor, FortiInsight, FortiIsolator, FortiLAN, FortiLink, FortiMoM, FortiMonitor, FortiNAC, FortiNDR, FortiPenTest, FortiPhish, FortiPlanner, FortiPolicy, FortiPortal, FortiPresence, FortiProxy, FortiRecon, FortiRecorder, FortiSASE, FortiSDNConnector, FortiSIEM, FortiSMS, FortiSOAR, FortiSwitch, FortiTester, FortiToken, FortiTrust, FortiVoice, FortiWAN, FortiWeb, FortiWiFi, FortiWLC, FortiWLM and FortiXDR. Other trademarks belong to their respective owners. Fortinet has not independently verified statements or certifications herein attributed to third parties and Fortinet does not independently endorse such statements. Notwithstanding anything to the contrary herein, nothing herein constitutes a warranty, guarantee, contract, binding specification or other binding commitment by Fortinet or any indication of intent related to a binding commitment, and performance and other specification information herein may be unique to certain environments.

FTNT-F

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding any indications related to future market share gains, guidance and expectations around future financial results, including guidance and expectations for the third quarter and full year 2022, statements regarding the momentum in our business and future growth expectations, and any statements regarding our market opportunity and market size, and business momentum. Although we attempt to be accurate in making forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based such that actual results are materially different from our forward-looking statements in this release. Important factors that could cause results to differ materially from the statements herein include the following: general economic risks, including those caused by the COVID-19 pandemic, the war in Ukraine, economic challenges, fears of a recession, and any actual recession, and the effects of increased inflation in certain geographies; significantly heightened supply chain challenges due to the current global environment; negative impacts from the COVID-19 pandemic on sales, billings, revenue, demand and buying patterns, component supply and ability to manufacture products to meet demand in a timely fashion, and costs such as possible increased costs for shipping and components; global economic conditions, country-specific economic conditions, and foreign currency risks; competitiveness in the security market; the dynamic nature of the security market and its products and services; specific economic risks worldwide and in different geographies, and among different customer segments; uncertainty regarding demand and increased business and renewals from existing customers; uncertainties around continued success in sales growth and market share gains; uncertainties in market opportunities and the market size; actual or perceived vulnerabilities in our supply chain, products or services, and any actual or perceived breach of our network or our customers’ networks; longer sales cycles, particularly for larger enterprise, service providers, government and other large organization customers; the effectiveness of our salesforce and failure to convert sales pipeline into final sales; risks associated with successful implementation of multiple integrated software products and other product functionality risks; risks associated with integrating acquisitions and changes in circumstances and plans associated therewith, including, among other risks, changes in plans related to product and services integrations, product and services plans and sales strategies; sales and marketing execution risks; execution risks around new product development and introductions and innovation; litigation and disputes and the potential cost, distraction and damage to sales and reputation caused thereby or by other factors; cybersecurity threats, breaches and other disruptions; market acceptance of new products and services; the ability to attract and retain personnel; changes in strategy; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; technological changes that make our products and services less competitive; risks associated with the adoption of, and demand for, our products and services in general and by specific customer segments, including those caused by the COVID-19 pandemic; competition and pricing pressure; product inventory shortages for any reason, including those caused by the COVID-19 pandemic, the war in Ukraine and the effects of increased inflation in certain geographies; risks associated with business disruption caused by natural disasters and health emergencies such as earthquakes, fires, power outages, typhoons, floods, health epidemics and viruses such as the COVID-19 pandemic, and by manmade events such as civil unrest, labor disruption, international trade disputes, international conflicts such as the war in Ukraine, terrorism, wars, and critical infrastructure attacks; tariffs, trade disputes and other trade barriers, and negative impact on sales based on geo-political dynamics and disputes and protectionist policies; any political and government disruption around the world, including the impact of any future shutdowns of the U.S. government; and the other risk factors set forth from time to time in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission (SEC), copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this release, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events.

COVID-19 Impact

While the broader implications of the COVID-19 pandemic on our employees and overall financial performance remain uncertain, we have seen certain impacts on our business and operations, results of operations, financial condition, cash flows, liquidity and capital and financial resources. Going forward, the situation is uncertain, rapidly changing and hard to predict, and the COVID-19 pandemic may have a material negative impact on our future periods, including our results for the three months ending September 30, 2022, our annual results for 2022, and beyond. To highlight the uncertainty remaining for the three-month period ending September 30, 2022, it should be noted that, due to customer buying patterns and the efforts of our sales force and channel partners to meet or exceed quarterly quotas, we have historically received a substantial portion of each quarter’s sales orders and generated a substantial portion of each quarter’s billings and revenue during the last two weeks of the quarter. Additionally, significantly heightened supply chain challenges are impacting businesses around the globe. If we experience significant changes in our billings growth rates or if we are unable to supply product to meet demand, it will impact product revenue in the current quarter and FortiGuard and FortiCare service revenues in subsequent quarters, as we sell annual and multi-year service contracts that are recognized ratably over the contractual service term. In addition, the broader implications of the pandemic on our business and operations and our financial results, including the extent to which the effects of the pandemic will impact future results and growth in the cybersecurity industry, remain uncertain. The duration and severity of the economic downturn from the pandemic may negatively impact our business and operations, results of operations, financial condition, cash flows, liquidity and capital and financial resources in a material way. As a result, the effects of the pandemic may not be fully reflected in our results of operations until future periods.

Non-GAAP Financial Measures

We have provided in this release financial information that has not been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP financial and liquidity measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with peer companies, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables below.

Billings (non-GAAP). We define billings as revenue recognized in accordance with GAAP plus the change in deferred revenue from the beginning to the end of the period, less any deferred revenue balances acquired from business combination(s) and adjustment due to adoption of new accounting standard during the period. We consider billings to be a useful metric for management and investors because billings drive current and future revenue, which is an important indicator of the health and viability of our business. There are a number of limitations related to the use of billings instead of GAAP revenue. First, billings include amounts that have not yet been recognized as revenue and are impacted by the term of security and support agreements. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. Management accounts for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with GAAP revenue.

Free cash flow (non-GAAP). We define free cash flow as net cash provided by operating activities minus purchases of property and equipment and excluding any significant non-recurring items, such as proceeds from intellectual property matter. We believe free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after capital expenditures and net of proceeds from intellectual property matter, can be used for strategic opportunities, including repurchasing outstanding common stock, investing in our business, making strategic acquisitions and strengthening the balance sheet. A limitation of using free cash flow rather than the GAAP measures of cash provided by or used in operating activities, investing activities, and financing activities is that free cash flow does not represent the total increase or decrease in the cash and cash equivalents balance for the period because it excludes cash flows from significant non-recurring items, such as proceeds from intellectual property matter, investing activities other than capital expenditures and cash flows from financing activities. Management accounts for this limitation by providing information about our capital expenditures and other investing and financing activities on the face of the cash flow statement and under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K and by presenting cash flows from investing and financing activities in our reconciliation of free cash flow. In addition, it is important to note that other companies, including companies in our industry, may not use free cash flow, may calculate free cash flow in a different manner than we do or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a comparative measure.

Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus stock-based compensation, impairment and amortization of acquired intangible assets, less gain on intellectual property matter and, when applicable, other significant non-recurring items in a given quarter, such as non-recurring gains or losses on litigation-related matters. Non-GAAP operating margin is defined as non-GAAP operating income divided by GAAP revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the items noted above so that our management and investors can compare our recurring core business operating results over multiple periods. There are a number of limitations related to the use of non-GAAP operating income instead of operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes the items noted above. Second, the components of the costs that we exclude from our calculation of non-GAAP operating income may differ from the components that peer companies exclude when they report their non-GAAP results of operations. Management accounts for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP.

Non-GAAP net income and diluted net income per share attributable to Fortinet, Inc. We define non-GAAP net income as net income or loss plus the items noted above under non-GAAP operating income and operating margin. In addition, we adjust non-GAAP net income and diluted net income per share for gains or losses on investments in privately held companies, a tax adjustment required for an effective tax rate on a non-GAAP basis and adjustments attributable to non-controlling interests, which differs from the GAAP effective tax rate. We define non-GAAP diluted net income per share as non-GAAP net income divided by the non-GAAP diluted weighted-average shares outstanding. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income and non-GAAP operating margin. However, in order to provide a more complete picture of our recurring core business operating results, we include in non-GAAP net income and non-GAAP diluted net income per share, the tax adjustment required resulting in an effective tax rate on a non-GAAP basis, which often differs from the GAAP tax rate. We believe the non-GAAP effective tax rates we use are reasonable estimates of normalized tax rates for our current and prior fiscal years under our global operating structure. The same limitations described above regarding our use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP diluted net income per share. We account for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP diluted net income per share and evaluating non-GAAP net income and non-GAAP diluted net income per share together with net income or loss and diluted net income per share calculated in accordance with GAAP.

FORTINET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in millions)

June 30,
2022
December 31,
2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 710.0 $ 1,319.1
Short-term investments 1,020.6 1,194.0
Marketable equity securities 24.3 38.6
Accounts receivable—net 919.5 807.7
Inventory 195.2 175.8
Prepaid expenses and other current assets 83.3 65.4
Total current assets 2,952.9 3,600.6
LONG-TERM INVESTMENTS 188.5 440.8
PROPERTY AND EQUIPMENT—NET 814.6 687.6
DEFERRED CONTRACT COSTS 456.9 423.3
DEFERRED TAX ASSETS 480.2 342.3
GOODWILL AND OTHER INTANGIBLE ASSETS—NET 166.7 188.7
OTHER ASSETS 234.7 235.8
TOTAL ASSETS $ 5,294.5 $ 5,919.1
LIABILITIES AND EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 193.1 $ 148.4
Accrued liabilities 241.2 197.3
Accrued payroll and compensation 187.4 195.0
Deferred revenue 2,013.2 1,777.4
Total current liabilities 2,634.9 2,318.1
DEFERRED REVENUE 1,918.8 1,675.5
INCOME TAX LIABILITIES 67.1 79.5
LONG-TERM DEBT 989.4 988.4
OTHER LIABILITIES 63.9 59.2
Total liabilities 5,674.1 5,120.7
COMMITMENTS AND CONTINGENCIES
EQUITY (DEFICIT):
Common stock 0.8 0.8
Additional paid-in capital 1,237.3 1,253.6
Accumulated other comprehensive loss (23.4 ) (4.8 )
Accumulated deficit (1,607.6 ) (467.9 )
Total Fortinet, Inc. stockholders’ equity (deficit) (392.9 ) 781.7
Non-controlling interests 13.3 16.7
Total equity (deficit) (379.6 ) 798.4
TOTAL LIABILITIES AND EQUITY (DEFICIT) $ 5,294.5 $ 5,919.1

FORTINET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in millions, except per share amounts)

Three Months Ended Six Months Ended
June 30,
2022
June 30,
2021
June 30,
2022
June 30,
2021
REVENUE:
Product $ 400.7 $ 298.3 $ 771.7 $ 539.0
Service 629.4 502.8 1,213.2 972.4
Total revenue 1,030.1 801.1 1,984.9 1,511.4
COST OF REVENUE:
Product 155.2 115.6 316.2 206.9
Service 95.6 71.3 188.4 136.6
Total cost of revenue 250.8 186.9 504.6 343.5
GROSS PROFIT:
Product 245.5 182.7 455.5 332.1
Service 533.8 431.5 1,024.8 835.8
Total gross profit 779.3 614.2 1,480.3 1,167.9
OPERATING EXPENSES:
Research and development 124.3 106.6 249.2 203.8
Sales and marketing 415.5 326.9 803.1 630.9
General and administrative 45.4 34.4 84.0 66.4
Gain on intellectual property matter (1.2 ) (1.2 ) (2.3 ) (2.3 )
Total operating expenses 584.0 466.7 1,134.0 898.8
OPERATING INCOME 195.3 147.5 346.3 269.1
INTEREST INCOME 2.4 1.2 3.7 2.3
INTEREST EXPENSE (4.5 ) (4.5 ) (9.0 ) (5.8 )
OTHER INCOME (EXPENSE)—NET (9.3 ) 0.8 (18.4 ) (1.2 )
INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENT 183.9 145.0 322.6 264.4
PROVISION FOR (BENEFIT FROM) INCOME TAXES 2.4 7.5 (5.7 ) 19.7
LOSS FROM EQUITY METHOD INVESTMENT (8.1 ) (16.6 )
NET INCOME INCLUDING NON-CONTROLLING INTERESTS 173.4 137.5 311.7 244.7
Less: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX (0.1 ) (0.2 )
NET INCOME ATTRIBUTABLE TO FORTINET, INC. $ 173.5 $ 137.5 $ 311.9 $ 244.7
Net income per share attributable to Fortinet, Inc.(a):
Basic $ 0.22 $ 0.17 $ 0.39 $ 0.30
Diluted $ 0.21 $ 0.16 $ 0.38 $ 0.29
Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.(a):
Basic 795.4 816.7 799.4 815.9
Diluted 810.1 835.4 815.4 833.7

(a) All share and per share amounts presented herein have been retroactively adjusted to reflect the five-for-one forward stock split which was effective June 22, 2022.

FORTINET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)

Six Months Ended
June 30,
2022
June 30,
2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income including non-controlling interests $ 311.7 $ 244.7
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation 107.9 102.1
Amortization of deferred contract costs 107.1 81.8
Depreciation and amortization 50.6 36.2
Amortization of investment premiums 2.8 2.9
Loss from equity method investment 16.6
Other 22.8 0.3
Changes in operating assets and liabilities, net of impact of business combinations:
Accounts receivable—net (119.3 ) 135.6
Inventory (31.2 ) (20.1 )
Prepaid expenses and other current assets (18.2 ) (16.4 )
Deferred contract costs (140.6 ) (124.8 )
Deferred tax assets (136.3 ) (25.8 )
Other assets (16.7 ) (11.8 )
Accounts payable 52.7 (9.5 )
Accrued liabilities 30.1 21.3
Accrued payroll and compensation (6.8 ) 18.7
Other liabilities 5.7 (1.2 )
Deferred revenue 480.6 300.1
     Net cash provided by operating activities 719.5 734.1
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments (389.1 ) (1,262.5 )
Sales of investments 3.0 71.4
Maturities of investments 797.3 600.3
Purchases of property and equipment (162.5 ) (75.6 )
Purchases of investment in privately held company (75.0 )
Payments made in connection with business combinations, net of cash acquired (10.3 )
     Net cash provided by (used in) investing activities 248.7 (751.7 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term borrowings, net of discount and underwriting fees 989.4
Payments for debt issuance costs (2.4 )
Repurchase and retirement of common stock (1,491.2 ) (91.6 )
Proceeds from issuance of common stock 15.9 15.8
Taxes paid related to net share settlement of equity awards (99.9 ) (76.0 )
Other (1.1 ) (0.1 )
     Net cash provided by (used in) financing activities (1,576.3 ) 835.1
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (1.0 )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (609.1 ) 817.5
CASH AND CASH EQUIVALENTS—Beginning of period 1,319.1 1,061.8
CASH AND CASH EQUIVALENTS—End of period $ 710.0 $ 1,879.3

Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures
(Unaudited, in millions, except per share amounts)

Reconciliation of net cash provided by operating activities to free cash flow

Three Months Ended
June 30,
2022
June 30,
2021
Net cash provided by operating activities $ 323.4 $ 418.2
Less: Purchases of property and equipment (39.9 ) (23.5 )
Free cash flow $ 283.5 $ 394.7
Net cash provided by (used in) investing activities $ 294.1 $ (278.2 )
Net cash used in financing activities $ (830.3 ) $ (120.9 )

Reconciliation of GAAP operating income to non-GAAP operating income, operating margin, net income attributable to Fortinet, Inc. and diluted net income per share attributable to Fortinet, Inc.

Three Months Ended June 30, 2022 Three Months Ended June 30, 2021
GAAP Results Adjustments Non-GAAP Results GAAP Results Adjustments Non-GAAP Results
Operating income $ 195.3 $ 60.1 (a) $ 255.4 $ 147.5 $ 55.8 (b) $ 203.3
Operating margin 19.0 % 24.8 % 18.4 % 25.4 %
Adjustments:
Stock-based compensation 55.3 53.5
Amortization of acquired intangible assets 6.0 3.5
Gain on intellectual property matter (1.2 ) (1.2 )
Tax adjustment (39.1 ) (c) (34.6 ) (c)
Adjustments attributable non-controlling interests (0.4 ) (d)
Net income attributable to Fortinet, Inc. $ 173.5 $ 20.6 $ 194.1 $ 137.5 $ 21.2 $ 158.7
Diluted net income per share attributable to Fortinet, Inc.(e) $ 0.21 $ 0.24 $ 0.16 $ 0.19
Shares used in diluted net income per share attributable to Fortinet, Inc. calculations(e) 810.1 810.1 835.4 835.4

(a) To exclude $55.3 million of stock-based compensation and $6.0 million of amortization of acquired intangible assets, offset by a $1.2 million gain on intellectual property matter in the three months ended June 30, 2022.
(b) To exclude $53.5 million of stock-based compensation and $3.5 million of amortization of acquired intangible assets, offset by a $1.2 million gain on intellectual property matter in the three months ended June 30, 2021.
(c) Non-GAAP financial information is adjusted to an effective tax rate of 17% and 21% in the three months ended June 30, 2022 and 2021, respectively, on a non-GAAP basis, which differs from the GAAP effective tax rate.
(d) Adjustments related to the non-GAAP results attributable to non-controlling interests, which were adjusted to an effective tax rate of 31% for the subsidiary of Alaxala Networks Corporation in the three months ended June 30, 2022.
(e) All share and per share amounts presented herein have been retroactively adjusted to reflect the five-for-one forward stock split which was effective June 22, 2022.

Reconciliation of total revenue to total billings

Three Months Ended
June 30,
2022
June 30,
2021
Total revenue $ 1,030.1 $ 801.1
Add: Change in deferred revenue 274.1 159.8
Total billings $ 1,304.2 $ 960.9
Investor Contact: Media Contact:
Peter Salkowski Sandra Wheatley
Fortinet, Inc. Fortinet, Inc.
408-331-4595 408-391-9408
psalkowski@fortinet.com swheatley@fortinet.com


WillScot Mobile Mini Holdings Reports Second Quarter 2022 Results

Continued Execution of Growth Strategy Drives Operational Outperformance and Increased 2022 Outlook

PHOENIX, Aug. 03, 2022 (GLOBE NEWSWIRE) — WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini Holdings” or the “Company”) (Nasdaq: WSC), the North American leader in innovative flexible workspace and portable storage solutions, today announced second quarter 2022 results and provided an update on operations and the current market environment, including the following highlights:

  • Execution across multiple organic and inorganic growth levers resulted in second quarter revenue of $582 million, net income of $73 million, and Adjusted EBITDA of $233 million.
  • Closed six acquisitions year to date through July 2022 with consistent pipeline for H2 2022 to expand our fleet of mobile offices and portable storage containers.
  • Generated $188 million of Cash From Operations and $69 million of Free Cash Flow in the quarter with Free Cash Flow Margin of 12% over the last twelve months.
  • Returned $250 million to shareholders by repurchasing 7.2 million shares of Common Stock and stock equivalents during the quarter, reducing economic share count by 5.6% over the last 12 months as of June 30, 20221.
  • Increased full-year 2022 Adjusted EBITDA outlook range to between $900 million and $940 million, representing 22% to 27% growth versus 2021.
  • Board replenished share repurchase authorization to $1.0 billion as of July 21, 2022.

Brad Soultz, Chief Executive Officer of WillScot Mobile Mini Holdings, commented, “Our results in the second quarter demonstrated our team’s laser focus on executing the idiosyncratic growth strategy that we articulated at our November 2021 Investor Day. While end market strength continued to be broad-based, the momentum in our business is being driven by growth initiatives such as pricing, valued-added products, cross-selling, and acquisitions that compound powerfully together and are within our control. Our team delivered strong organic and inorganic volume growth, driving 2% year-over-year growth in average modular units on rent in NA Modular and 24% year-over-year growth in average portable storage units on rent in NA Storage and NA Modular combined. Together these fundamentals compounded to drive 200 basis points of Adjusted EBITDA margin expansion year-over-year during the quarter. And following the SAP cutover in 2021, our infrastructure is highly scalable, as evidenced by our continued M&A cadence. We successfully closed and integrated four regional acquisitions during the second quarter and completed another in July, bringing our year-to-date total transactions to six. Each acquisition represents an opportunity to expand our offering, grow our team of dedicated professionals, integrate scarce equipment into our portfolio, and deliver more value to our customers.”

Soultz added, “We are allocating capital aggressively where we see opportunities to compound growth and returns. Based on demand, we are fully funding organic capex for value-added products (VAPS), additional portable storage units, and modular unit refurbishments. Our M&A pipeline supports a consistent cadence of tuck-in transactions, and we will continue to pursue smart and accretive acquisitions. And over the last 12 months, we have repurchased 14.3 million shares for $481 million, representing about 7% of our market capitalization as of June 30, 2022. In recognition of the value creation opportunities across our portfolio, our Board proactively replenished our $1.0 billion share repurchase authorization. We have a uniquely resilient business with powerful idiosyncratic growth levers. I am excited about our outlook for the remainder of the year and beyond and am extremely proud of the execution by our team.”

Three Months Ended June 30, Six Months Ended June 30,
(in thousands, except share data) 2022 2021 2022 2021
Revenue $ 581,642 $ 461,102 $ 1,090,536 $ 886,425
Consolidated net income $ 73,376 $ 20,371 $ 124,547 $ 24,818
Adjusted EBITDA2 $ 233,335 $ 175,495 $ 425,158 $ 339,080
Adjusted EBITDA Margin (%)2 40.1 % 38.1 % 39.0 % 38.3 %
Net cash provided by operating activities $ 188,326 $ 139,537 $ 333,853 $ 261,608
Free Cash Flow2 $ 69,418 $ 82,056 $ 124,042 $ 173,216
Fully Diluted Shares Outstanding 227,484,012 236,536,713 226,983,150 234,898,911
Free Cash Flow Margin (%)2 11.9 % 17.8 % 11.4 % 19.5 %
Return on Invested Capital2 14.6 % 10.3 % 13.0 % 10.3 %
Three Months Ended June 30, Six Months Ended June 30,
Adjusted EBITDA by Segment (in thousands)2 2022 2021 2022 2021
NA Modular $ 127,881 $ 103,545 $ 231,829 $ 200,916
NA Storage 80,762 49,526 144,587 95,848
UK Storage 12,230 12,328 24,774 23,392
Tank and Pump 12,462 10,096 23,968 18,924
Consolidated Adjusted EBITDA $ 233,335 $ 175,495 $ 425,158 $ 339,080

Second Quarter 2022 Results2

Tim Boswell, President and Chief Financial Officer of WillScot Mobile Mini Holdings, commented, “Q2 was another strong quarter, driven by our leasing fundamentals. We grew volumes, increased VAPS penetration, and accelerated pricing in all segments, while supplementing our organic results with smart acquisitions. Revenues of $582 million increased by 26%, Adjusted EBITDA of $233 million increased by 33%, Consolidated Adjusted EBITDA margin of 40.1% expanded by 200 basis points, and Net Income of $73 million and diluted EPS of $0.32 increased by 260% and 303%, respectively. Our team continued to execute effectively across all growth initiatives and we are capitalizing on this unique inflationary and supply constrained macroeconomic backdrop, as evidenced by the substantial margin expansion in our results and outlook. Notably, we expect that the benefits of inflationary impacts on our prices will continue to roll through our income statement over the next 18 to 24 months, supporting margin expansion well into 2023 and beyond.”

Boswell continued, “Our forward visibility into growth gives us confidence to reinvest where we see opportunities to compound returns. Cash flows from operations of $188 million increased by 35% year-over-year, consistent with our expectations. Reinvestment in organic capital expenditures was entirely demand driven and increased to $119 million to support organic expansion of our storage fleet and value-added products, as well as modular refurbishments. We invested $46 million in acquisitions during the quarter, which are compounding with our organic initiatives and accelerating our run-rate heading into 2023. Complementing these operational investments, we repurchased 7.2 million shares of Common Stock and stock equivalents for $250 million in Q2, and over the last 12 months, we reduced our economic share count by 5.6%, representing a powerful return to our shareholders.”

Boswell also shared, “As a validation of our growth strategy and execution, we opportunistically amended and upsized our asset-based revolving credit facility (ABL) on June 30, 2022, increasing the facility size from $2.4 billion to $3.7 billion, extending the term for five years to June 2027, and reducing our interest rate spread over SOFR by approximately 50 basis points to partly offset broader benchmark rate increases. Our current annualized cash interest expense is approximately $130 million, and we have $1.0 billion of excess availability under the ABL, which gives us ample liquidity to support our strategy. We are incredibly grateful to our investors who supported us in this process and for their confidence in our plans.

“With the first half of 2022 complete, we are raising our full year guidance to $2.2 billion to $2.3 billion of revenue and $900 million to $940 million of Adjusted EBITDA. We continue to expect that Adjusted EBITDA margins will be up approximately 200 basis points for the year and that our Free Cash Flow run-rate will accelerate to approximately $500 million as we head into 2023. We have a clear formula to drive sustainable growth and returns, and we are executing predictably.”

Consolidated

  • Revenue of $581.7 million increased by 26.1% year-over-year due to organic revenue growth levers in the business and due to the impact of acquisitions. Recent acquisitions contributed approximately $19.0 million to total revenues.
  • Adjusted EBITDA of $233.3 million increased by 32.9% year-over-year and Consolidated Adjusted EBITDA margin of 40.1% increased 200 bps year-over-year due to strong pricing and volume trends, offset by increased variable costs from higher activity levels, inflationary pressures, and discretionary resource additions to support growth.

NA Modular

  • Revenue of $347.7 million increased by 20.1% year-over-year.
    • Average modular space monthly rental rate increased $130 year-over-year, or 16.2% to $931.
    • Average modular space units on rent increased 1,804 units year-over-year, or 2.1% to 86,558. Units on rent have grown 2.4% year-to-date from 12/31/2021 to 6/30/2022, which has been split evenly between organic growth and via acquisition.
    • Value-Added Products (VAPS) average monthly rate, a component of average modular space monthly rental rate above, increased $43 year-over-year, or 19% to $266. For delivered units over the last 12 months, VAPS average monthly rate increased $70 year-over-year, or 20%, to $430.
  • Adjusted EBITDA of $127.9 million increased by 23.6% year-over-year. The transfer of the NA Modular portable storage fleet to the NA Storage segment in Q3 2021 represented a decline of about $5 million of revenue and EBITDA in Q2 2022, which has not been adjusted historically.

NA Storage

  • Revenue of $175.2 million increased by 51.3% year-over-year.
    • Average portable storage monthly rental rate increased $35 year-over-year, or 23.2% to $186.
    • Average portable storage units on rent increased by 42,859 units year-over-year, or 38.0% to 155,721. Of this increase, approximately 12,000 of the units on rent increase was driven by organic volume growth. The remainder of the increase was driven by the acquisition of approximately 18,700 average units on rent from Q3 2021 to Q2 2022 and the transfer of approximately 12,000 units from NA Modular (legacy WillScot) into the NA Storage segment that was completed in Q3 2021.
    • Average modular space monthly rental rate increased $110 year-over-year, or 19.2%, to $683, and modular space average units on rent increased 1,697 year-over-year, or 10.4%, to 18,057.
  • Adjusted EBITDA of $80.8 million increased by 63.2% year-over-year. The transfer of the NA Modular portable storage fleet to the NA Storage segment in Q3 2021 represented an increase of about $5 million of revenue and EBITDA in Q2 2022, which has not been adjusted historically.

UK Storage

  • Revenue of $26.7 million decreased 6.0% year-over-year and Adjusted EBITDA of $12.2 million decreased by 0.8%, driven by the weakening of the British Pound relative to the US Dollar. In local currency, revenue increased 4.4% year-over-year, driven by a 17.5% increase in portable storage average monthly rental rates and a 7.9% increase in average portable storage units on rent, and Adjusted EBITDA increased by 10.4% year-over-year.

Tank and Pump

  • Revenue of $32.1 million increased 16.7% year-over-year, driven by increased OEC utilization and improved pricing, and Adjusted EBITDA of $12.5 million increased by 23.8%.

Capitalization and Liquidity Update2

As of June 30, 2022:

  • Repurchased 7.2 million shares of Common Stock and stock equivalents for $250 million in the second quarter 2022, contributing to a 5.6% reduction in our economic share count over the last 12 months. On July 21, 2022, the Board of Directors approved an increase in the repurchase authority, which reset the amount to $1.0 billion.
  • Amended our asset-based revolving credit facility to provide additional capacity for growth by increasing the aggregate principal amount of revolving credit facilities to $3.7 billion from $2.4 billion, extended the facility for five years to June 2027, increased capacity available under the facility’s accordion feature, reduced the interest rate spread above the Term SOFR base rate to 150 basis points, and included an option to incorporate pricing adjustments linked to the Company’s Environmental, Social, and Governance initiatives.
  • Maintained $1.0 billion of excess availability under the asset-based revolving credit facility; a flexible covenant structure and accelerating free cash flow provide ample liquidity to fund multiple capital allocation priorities.
  • As of August 3, 2022, weighted average interest rate is approximately 4.2% and annual cash interest expense based on the current debt structure and benchmark rates is approximately $130 million.
  • No debt maturities prior to 2025.
  • Maintained leverage at 3.7x last-12-months Adjusted EBITDA of $826 million, above our target range of 3.0x to 3.5x, while supporting strong organic demand, executing four tuck-in transactions, and repurchasing shares.

2022 Outlook2, 3, 4

This guidance is subject to risks and uncertainties, including those described in “Forward-Looking Statements” below.

2021 Results Prior 2022 Outlook Current 2022 Outlook
Revenue $1,895 million $2,100 million – $2,200 million $2,200 million – $2,300 million
Adjusted EBITDA2,3 $740 million $860 million – $900 million $900 million – $940 million
Net CAPEX3,4 $237 million $275 million – $325 million $325 million – $375 million

1 – Assumes common shares outstanding plus treasury stock method from warrants outstanding as of June 30, 2022 versus June 30, 2021 and the closing stock price of $32.42 on June 30, 2022.
2 – Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Free Cash Flow Margin, and Return on Invested Capital are non-GAAP financial measures. Further information and reconciliations for these non-GAAP measures to the most directly comparable financial measure under generally accepted accounting principles in the US (“GAAP”) is included at the end of this press release.
3 – Information reconciling forward-looking Adjusted EBITDA and Net CAPEX to GAAP financial measures is unavailable to the Company without unreasonable effort and therefore no reconciliation to the most comparable GAAP measures is provided.
4 – Net CAPEX is a non-GAAP financial measure. Please see the non-GAAP reconciliation tables included at the end of this press release.

Non-GAAP Financial Measures

This press release includes non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Free Cash Flow Margin, Return on Invested Capital, Adjusted Gross Profit, Adjusted Gross Profit Percentage, Net Income Excluding Gain/Loss from Warrants, and Net CAPEX. Adjusted EBITDA is defined as net income (loss) plus net interest (income) expense, income tax expense (benefit), depreciation and amortization adjusted to exclude certain non-cash items and the effect of what we consider transactions or events not related to our core business operations, including net currency gains and losses, goodwill and other impairment charges, restructuring costs, costs to integrate acquired companies, costs incurred related to transactions, non-cash charges for stock compensation plans, gains and losses resulting from changes in fair value and extinguishment of common stock warrant liabilities, and other discrete expenses. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue. Free Cash Flow is defined as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities. Free Cash Flow Margin is defined as Free Cash Flow divided by revenue. Return on Invested Capital is defined as adjusted earnings before interest and amortization divided by net assets. Adjusted earnings before interest and amortization is the sum of income (loss) before income tax expense, net interest (income) expense, amortization adjusted for non-cash items considered non-core to business operations including net currency (gains) losses, goodwill and other impairment charges, restructuring costs, costs to integrate acquired companies, non-cash charges for stock compensation plans, gains and losses resulting from changes in fair value and extinguishment of common stock warrant liabilities, and other discrete expenses, reduced by our estimated statutory tax rate. Given we are not a significant US taxpayer due to our current tax attributes, we include estimated taxes at our current statutory tax rate of approximately 25%. Net assets is total assets less goodwill and intangible assets, net and all non-interest bearing liabilities and is calculated as a five quarter average. Adjusted Gross Profit is defined as gross profit plus depreciation of rental equipment. Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue. Net Income Excluding Gain/Loss from Warrants is defined as net income plus or minus the change in the fair value of the common stock warrant liability. Net CAPEX is defined as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, “Total Capital Expenditures”), less proceeds from the sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, “Total Proceeds”), which are all included in cash flows from investing activities. The Company believes that Adjusted EBITDA and Adjusted EBITDA margin are useful to investors because they (i) allow investors to compare performance over various reporting periods on a consistent basis by removing from operating results the impact of items that do not reflect core operating performance; (ii) are used by our board of directors and management to assess our performance; (iii) may, subject to the limitations described below, enable investors to compare the performance of the Company to its competitors; (iv) provide additional tools for investors to use in evaluating ongoing operating results and trends; and (v) align with definitions in our credit agreement. The Company believes that Free Cash Flow and Free Cash Flow Margin are useful to investors because they allow investors to compare cash generation performance over various reporting periods and against peers. The Company believes that Return on Invested Capital provides information about the long-term health and profitability of the business relative to the Company’s cost of capital. The Company believes that Adjusted Gross Profit and Adjusted Gross Profit Percentage are useful to investors because they allow investors to assess gross profit excluding non-cash expenses, which provides useful information regarding our results of operations and assists in analyzing the underlying performance of our business. The Company believes that Net Income Excluding Gain/Loss from Warrants is useful to investors because it removes the impact of stock market volatility from our operational results. The Company believes that the presentation of Net CAPEX provides useful information to investors regarding the net capital invested into our rental fleet and plant, property and equipment each year to assist in analyzing the performance of our business. Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. These non-GAAP measures should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP. Other companies may calculate Adjusted EBITDA and other non-GAAP financial measures differently, and therefore the Company’s non-GAAP financial measures may not be directly comparable to similarly-titled measures of other companies. For reconciliation of the non-GAAP measures used in this press release (except as explained below), see “Reconciliation of Non-GAAP Financial Measures” included in this press release.

Information reconciling forward-looking Adjusted EBITDA to GAAP financial measures is unavailable to the Company without unreasonable effort. We cannot provide reconciliations of forward-looking Adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of our control and/or cannot be reasonably predicted, such as the provision for income taxes. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the Company without unreasonable effort. Although we provide a range of Adjusted EBITDA that we believe will be achieved, we cannot accurately predict all the components of the Adjusted EBITDA calculation. The Company provides Adjusted EBITDA guidance because we believe that Adjusted EBITDA, when viewed with our results under GAAP, provides useful information for the reasons noted above.

Conference Call Information

WillScot Mobile Mini Holdings will host a conference call and webcast to discuss its second quarter 2022 results and outlook at 10 a.m. Eastern Time on Thursday, August 4, 2022. The live call may be accessed by dialing (800) 715-9871, Conference ID: 5178595 (US/Canada toll-free) or (646) 307-1963, Conference ID: 5178595 (international) and asking to be connected to the WillScot Mobile Mini Holdings call. A live webcast will also be accessible via the “Events & Presentations” section of the Company’s investor relations website www.willscotmobilemini.com. Choose “Events” and select the information pertaining to the WillScot Mobile Mini Holdings Second Quarter 2022 Conference Call. Additionally, there will be slides accompanying the webcast. Please allow at least 15 minutes prior to the call to register, download and install any necessary software. For those unable to listen to the live broadcast, an audio webcast of the call will be available for 12 months on the Company’s investor relations website.

About WillScot Mobile Mini Holdings

WillScot Mobile Mini Holdings trades on the Nasdaq stock exchange under the ticker symbol “WSC.” Headquartered in Phoenix, Arizona, the Company is a leading business services provider specializing in innovative flexible workspace and portable storage solutions. WillScot Mobile Mini services diverse end markets across all sectors of the economy from a network of approximately 280 branch locations and additional drop lots throughout the United States, Canada, Mexico, and the United Kingdom.

Forward-Looking Statements

This press release contains forward-looking statements (including the guidance/outlook contained herein) within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. The words “estimates,” “expects,” “anticipates,” “believes,” “forecasts,” “plans,” “intends,” “may,” “will,” “should,” “shall,” “outlook” and variations of these words and similar expressions identify forward-looking statements, which are generally not historical in nature. Certain of these forward-looking statements include statements relating to: robust demand continuing, our ability to continue acceleration of commercial momentum, our pipeline, further acceleration of our run rate, the timing of our achievement of our three to five year milestones, our ability to grow predictable reoccurring revenue streams, compound cash generation, drive higher returns on invested capital, and Adjusted EBITDA margin expansion. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other important factors, many of which are outside our control, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions, they are predictions and we can give no assurance that any such forward-looking statement will materialize. Important factors that may affect actual results or outcomes include, among others, our ability to acquire and integrate new assets and operations; our ability to achieve planned synergies related to acquisitions; our ability to successfully execute our growth strategy, manage growth and execute our business plan; our estimates of the size of the markets for our products; the rate and degree of market acceptance of our products; the success of other competing modular space and portable storage solutions that exist or may become available; rising costs adversely affecting our profitability; potential litigation involving our Company; general economic and market conditions impacting demand for our products and services and our ability to benefit from an inflationary environment; our ability to maintain an effective system of internal controls; and such other risks and uncertainties described in the periodic reports we file with the SEC from time to time (including our Form 10-K for the year ended December 31, 2021), which are available through the SEC’s EDGAR system at www.sec.gov and on our website. Any forward-looking statement speaks only at the date which it is made, and the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Additional Information and Where to Find It

Additional information can be found on the company’s website at www.willscotmobilemini.com.

Contact Information
Investor Inquiries: Media Inquiries:
Nick Girardi Jessica Taylor
investors@willscotmobilemini.com jetaylor@willscotmobilemini.com

WillScot Mobile Mini Holdings Corp.
Condensed Consolidated Statements of Operations
(Unaudited)

Three Months Ended June 30, Six Months Ended June 30,
(in thousands, except share and per share data) 2022 2021 2022 2021
Revenues:
Leasing and services revenue:
Leasing $ 428,620 $ 343,179 $ 821,812 $ 658,841
Delivery and installation 125,403 91,680 225,734 175,184
Sales revenue:
New units 11,094 11,008 17,691 21,963
Rental units 16,525 15,235 25,299 30,437
Total revenues 581,642 461,102 1,090,536 886,425
Costs:
Costs of leasing and services:
Leasing 96,912 83,032 185,790 152,927
Delivery and installation 93,587 77,153 175,102 147,289
Costs of sales:
New units 6,139 7,052 10,465 14,161
Rental units 8,955 8,162 14,099 17,267
Depreciation of rental equipment 67,176 62,893 129,392 118,591
Gross profit 308,873 222,810 575,688 436,190
Expenses:
Selling, general and administrative 162,164 122,387 312,374 239,716
Other depreciation and amortization 19,054 21,622 38,658 39,946
Lease impairment expense and other related charges (9 ) 474 254 1,727
Restructuring costs (86 ) 6,960 (86 ) 10,102
Currency (gains) losses, net (127 ) 33 11 69
Other (income) expense, net (3,784 ) 719 (5,093 ) (1,269 )
Operating income 131,661 70,615 229,570 145,899
Interest expense 33,574 29,212 64,564 59,176
Fair value (gain) loss on common stock warrant liabilities (610 ) 26,597
Loss on extinguishment of debt 2,814 5,999
Income before income tax 98,087 39,199 165,006 54,127
Income tax expense 24,711 18,828 40,459 29,309
Net Income $ 73,376 $ 20,371 $ 124,547 $ 24,818
Earnings per share:
Basic $ 0.33 $ 0.09 $ 0.56 $ 0.11
Diluted $ 0.32 $ 0.08 $ 0.55 $ 0.11
Weighted average shares:
Basic 223,376,276 228,406,812 222,196,986 228,350,318
Diluted 227,484,012 236,536,713 226,983,150 234,898,911

Unaudited Segment Operating Data

Comparison of Three Months Ended June 30, 2022 and 2021

Three Months Ended June 30, 2022
(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and
Pump
Total
Revenue $ 347,670 $ 175,220 $ 26,666 $ 32,086 $ 581,642
Gross profit $ 153,808 $ 121,404 $ 17,089 $ 16,572 $ 308,873
Adjusted EBITDA $ 127,881 $ 80,762 $ 12,230 $ 12,462 $ 233,335
Capital expenditures for rental equipment $ 82,482 $ 34,282 $ 7,604 $ 5,785 $ 130,153
Average modular space units on rent 86,558 18,057 8,387 113,002
Average modular space utilization rate 67.6 % 74.2 % 71.0 % % 68.8 %
Average modular space monthly rental rate $ 931 $ 683 $ 409 $ $ 853
Average portable storage units on rent 476 155,721 27,595 183,792
Average portable storage utilization rate 53.7 % 85.5 % 89.8 % % 86.0 %
Average portable storage monthly rental rate $ 211 $ 186 $ 93 $ $ 172
Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 75.7 % 75.7 %
Three Months Ended June 30, 2021
(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and
Pump
Total
Revenue $ 289,382 $ 115,794 $ 28,432 $ 27,494 $ 461,102
Gross profit $ 116,136 $ 75,721 $ 17,937 $ 13,016 $ 222,810
Adjusted EBITDA $ 103,545 $ 49,526 $ 12,328 $ 10,096 $ 175,495
Capital expenditures for rental equipment $ 49,364 $ 8,773 $ 4,226 $ 2,919 $ 65,282
Average modular space units on rent 84,754 16,360 9,354 110,468
Average modular space utilization rate 67.7 % 78.4 % 84.3 % % 70.3 %
Average modular space monthly rental rate $ 801 $ 573 $ 438 $ $ 736
Average portable storage units on rent 13,301 112,862 25,573 151,736
Average portable storage utilization rate 69.8 % 76.1 % 91.8 % % 77.7 %
Average portable storage monthly rental rate $ 133 $ 151 $ 88 $ $ 139
Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 71.2 % 71.2 %

Comparison of Six Months Ended June 30, 2022 and 2021

Six Months Ended June 30, 2022
(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and
Pump
Total
Revenue $ 647,356 $ 326,704 $ 54,106 $ 62,370 $ 1,090,536
Gross profit $ 282,739 $ 226,534 $ 35,010 $ 31,405 $ 575,688
Adjusted EBITDA $ 231,829 $ 144,587 $ 24,774 $ 23,968 $ 425,158
Capital expenditures for rental equipment $ 140,059 $ 54,453 $ 17,219 $ 13,658 $ 225,389
Average modular space units on rent 85,783 18,308 8,420 112,511
Average modular space utilization rate 67.3 % 75.3 % 72.3 % % 68.9 %
Average modular space monthly rental rate $ 908 $ 638 $ 418 $ $ 836
Average portable storage units on rent 469 154,023 27,522 182,014
Average portable storage utilization rate 53.1 % 84.4 % 89.8 % % 85.0 %
Average portable storage monthly rental rate $ 186 $ 176 $ 93 $ $ 164
Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 75.8 % 75.8 %
Six Months Ended June 30, 2021
(in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and
Pump
Total
Revenue $ 555,606 $ 223,542 $ 55,439 $ 51,838 $ 886,425
Gross profit $ 229,138 $ 148,340 $ 34,430 $ 24,282 $ 436,190
Adjusted EBITDA $ 200,916 $ 95,848 $ 23,392 $ 18,924 $ 339,080
Capital expenditures for rental equipment $ 88,499 $ 12,245 $ 10,996 $ 6,077 $ 117,817
Average modular space units on rent 84,737 16,399 9,235 110,371
Average modular space utilization rate 67.6 % 78.9 % 84.1 % % 70.3 %
Average modular space monthly rental rate $ 769 $ 554 $ 420 $ $ 703
Average portable storage units on rent 14,186 109,355 25,112 148,653
Average portable storage utilization rate 64.8 % 75.0 % 90.5 % % 76.1 %
Average portable storage monthly rental rate $ 128 $ 150 $ 85 $ $ 137
Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 69.3 % 69.3 %

WillScot Mobile Mini Holdings Corp.

Condensed Consolidated Balance Sheets

(in thousands, except share data) June 30, 2022
(Unaudited)
December 31, 2021
Assets
Cash and cash equivalents $ 11,706 $ 12,699
Trade receivables, net of allowances for credit losses at June 30, 2022 and December 31, 2021 of $53,544 and $47,629, respectively 440,993 399,887
Inventories 41,824 32,739
Prepaid expenses and other current assets 44,245 36,761
Assets held for sale 1,518 954
Total current assets 540,286 483,040
Rental equipment, net 3,257,475 3,080,981
Property, plant and equipment, net 322,707 312,178
Operating lease assets 235,266 247,064
Goodwill 1,171,725 1,178,806
Intangible assets, net 446,578 460,678
Other non-current assets 4,771 10,852
Total long-term assets 5,438,522 5,290,559
Total assets $ 5,978,808 $ 5,773,599
Liabilities and equity
Accounts payable $ 155,901 $ 118,271
Accrued expenses 115,124 100,195
Accrued employee benefits 63,331 68,414
Deferred revenue and customer deposits 189,333 159,639
Operating lease liabilities – current 52,495 53,005
Current portion of long-term debt 20,663 18,121
Total current liabilities 596,847 517,645
Long-term debt 3,017,678 2,694,319
Deferred tax liabilities 390,092 354,879
Operating lease liabilities – non-current 183,851 194,256
Other non-current liabilities 16,390 15,737
Long-term liabilities 3,608,011 3,259,191
Total liabilities 4,204,858 3,776,836
Commitments and contingencies
Preferred Stock: $0.0001 par, 1,000,000 shares authorized and zero shares issued and outstanding at June 30, 2022 and December 31, 2021
Common Stock: $0.0001 par, 500,000,000 shares authorized and 216,090,996 and 223,939,527 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively 22 22
Additional paid-in-capital 3,295,747 3,616,902
Accumulated other comprehensive loss (55,276 ) (29,071 )
Accumulated deficit (1,466,543 ) (1,591,090 )
Total shareholders’ equity 1,773,950 1,996,763
Total liabilities and shareholders’ equity $ 5,978,808 $ 5,773,599

 

 

Reconciliation of Non-GAAP Financial Measures

In addition to using GAAP financial measurements, we use certain non-GAAP financial information that we believe is important for purposes of comparison to prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of our ongoing operations and analyze our business performance and trends.

We evaluate business segment performance on Adjusted EBITDA, a non-GAAP measure that excludes certain items as described in the reconciliation of our consolidated net income (loss) to Adjusted EBITDA reconciliation below. We believe that evaluating segment performance excluding such items is meaningful because it provides insight with respect to intrinsic operating results of the Company.

We also regularly evaluate gross profit by segment to assist in the assessment of the operational performance of each operating segment. We consider Adjusted EBITDA to be the more important metric because it more fully captures the business performance of the segments, inclusive of indirect costs.

We also evaluate Free Cash Flow, a non-GAAP measure that provides useful information concerning cash flow available to fund our capital allocation alternatives.

Adjusted EBITDA

We define EBITDA as net income (loss) plus interest (income) expense, income tax expense (benefit), depreciation and amortization. Our adjusted EBITDA (“Adjusted EBITDA”) reflects the following further adjustments to EBITDA to exclude certain non-cash items and the effect of what we consider transactions or events not related to our core business operations:

  • Currency (gains) losses, net: on monetary assets and liabilities denominated in foreign currencies other than the subsidiaries’ functional currency. Substantially all such currency gains (losses) are unrealized and attributable to financings due to and from affiliated companies.
  • Goodwill and other impairment charges related to non-cash costs associated with impairment charges to goodwill, other intangibles, rental fleet and property, plant and equipment.
  • Restructuring costs, lease impairment expense, and other related charges associated with restructuring plans designed to streamline operations and reduce costs including employee and lease termination costs.
  • Transaction costs including legal and professional fees and other transaction specific related costs.
  • Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee training costs, and other costs required to realize cost or revenue synergies.
  • Non-cash charges for stock compensation plans.
  • Gains and losses resulting from changes in fair value and extinguishment of common stock warrant liabilities.
  • Other expense includes consulting expenses related to certain one-time projects, financing costs not classified as interest expense, and gains and losses on disposals of property, plant, and equipment.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider the measure in isolation or as a substitute for net income (loss), cash flow from operations or other methods of analyzing the Company’s results as reported under US GAAP. Some of these limitations are:

  • Adjusted EBITDA does not reflect changes in, or cash requirements for our working capital needs;
  • Adjusted EBITDA does not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
  • Adjusted EBITDA does not reflect our tax expense or the cash requirements to pay our taxes;
  • Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
  • Adjusted EBITDA does not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations;
  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
  • other companies in our industry may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to reinvest in the growth of our business or as measures of cash that will be available to meet our obligations.

The following table provides an unaudited reconciliation of Net income to Adjusted EBITDA:

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2022 2021 2022 2021
Net income $ 73,376 $ 20,371 $ 124,547 $ 24,818
Income tax expense 24,711 18,828 40,459 29,309
Loss on extinguishment of debt 2,814 5,999
Fair value (gain) loss on common stock warrant liabilities (610 ) 26,597
Interest expense 33,574 29,212 64,564 59,176
Depreciation and amortization 86,230 84,515 168,050 158,537
Currency (gains) losses, net (127 ) 33 11 69
Restructuring costs, lease impairment expense and other related charges (95 ) 7,434 168 11,829
Transaction costs 22 41 844
Integration costs 5,203 7,622 9,291 14,964
Stock compensation expense 9,292 4,707 15,687 8,221
Other 1,149 569 2,340 (1,283 )
Adjusted EBITDA $ 233,335 $ 175,495 $ 425,158 $ 339,080

Net Income Excluding Gain/Loss from Warrants

We define Net Income Excluding Gain/Loss from Warrants as net income plus or minus the impact of the change in the fair value of the common stock warrant liability. Management believes that the presentation of our financial statements excluding the impact of this mark-to-market adjustment provides useful information regarding our results of operations and assists in the review of the actual operating performance of our business.

The following table provides an unaudited reconciliation of Net income to Net Income Excluding Gain/Loss from Warrants:

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2022 2021 2022 2021
Net income $ 73,376 $ 20,371 $ 124,547 $ 24,818
Fair value (gain) loss on common stock warrant liabilities (610 ) 26,597
Net Income Excluding Gain/Loss from Warrants $ 73,376 $ 19,761 $ 124,547 $ 51,415

Adjusted EBITDA Margin

We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Revenue. Management believes that the presentation of Adjusted EBITDA Margin provides useful information to investors regarding the performance of our business.

The following table provides an unaudited reconciliation of Adjusted EBITDA Margin:

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2022 2021 2022 2021
Adjusted EBITDA (A) $ 233,335 $ 175,495 $ 425,158 $ 339,080
Revenue (B) 581,642 461,102 1,090,536 886,425
Adjusted EBITDA Margin (A/B) 40.1 % 38.1 % 39.0 % 38.3 %
Net Income (C) $ 73,376 $ 20,371 $ 124,547 $ 24,818
Net Income Margin % (C/B) 12.6 % 4.4 % 11.4 % 2.8 %

Free Cash Flow and Free Cash Flow Margin

We define Free Cash Flow as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities. Free Cash Flow Margin is defined as Free Cash Flow divided by Revenue. Management believes that the presentation of Free Cash Flow and Free Cash Flow Margin provides useful information to investors concerning cash flow available to fund our capital allocation alternatives.

The following table provides an unaudited reconciliation of net cash provided by operating activities to Free Cash Flow.

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2022 2021 2022 2021
Net cash provided by operating activities $ 188,326 $ 139,537 $ 333,853 $ 261,608
Purchase of rental equipment and refurbishments (130,153 ) (65,282 ) (225,389 ) (117,817 )
Proceeds from sale of rental equipment 20,526 15,235 35,080 30,437
Purchase of property, plant and equipment (9,772 ) (10,143 ) (20,253 ) (17,450 )
Proceeds from the sale of property, plant and equipment 491 2,709 751 16,438
Free Cash Flow (A) $ 69,418 $ 82,056 $ 124,042 $ 173,216
Revenue (B) $ 581,642 $ 461,102 $ 1,090,536 $ 886,425
Free Cash Flow Margin (A/B) 11.9 % 17.8 % 11.4 % 19.5 %
Net cash provided by operating activities (D) $ 188,326 $ 139,537 $ 333,853 $ 261,608
Net cash provided by operating activities margin (D/B) 32.4 % 30.3 % 30.6 % 29.5 %

Adjusted Gross Profit and Adjusted Gross Profit Percentage

We define Adjusted Gross Profit as gross profit plus depreciation on rental equipment. Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by Revenue. Adjusted Gross Profit and Adjusted Gross Profit Percentage are not measurements of our financial performance under GAAP and should not be considered as an alternative to gross profit, gross profit percentage, or other performance measures derived in accordance with GAAP. In addition, our measurement of Adjusted Gross Profit and Adjusted Gross Profit Percentage may not be comparable to similarly titled measures of other companies. Our management believes that the presentation of Adjusted Gross Profit and Adjusted Gross Profit Percentage provides useful information to investors regarding our results of operations because it assists in analyzing the performance of our business.

The following table provides an unaudited reconciliation of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage.

Three Months Ended Six Months Ended
June 30, June 30,
(in thousands) 2022 2021 2022 2021
Revenue (A) $ 581,642 $ 461,102 $ 1,090,536 $ 886,425
Gross profit (B) $ 308,873 $ 222,810 $ 575,688 $ 436,190
Depreciation of rental equipment 67,176 62,893 129,392 118,591
Adjusted Gross Profit (C) $ 376,049 $ 285,703 $ 705,080 $ 554,781
Gross Profit Percentage (B/A) 53.1 % 48.3 % 52.8 % 49.2 %
Adjusted Gross Profit Percentage (C/A) 64.7 % 62.0 % 64.7 % 62.6 %

Net CAPEX

We define Net CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, “Total Capital Expenditures”), less proceeds from the sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, “Total Proceeds”), which are all included in cash flows from investing activities. Our management believes that the presentation of Net CAPEX provides useful information to investors regarding the net capital invested into our rental fleet and plant, property and equipment each year to assist in analyzing the performance of our business.

The following table provides an unaudited reconciliation of Net CAPEX:

Three Months Ended Six Months Ended
June 30, June 30,
(in thousands) 2022 2021 2022 2021
Total purchases of rental equipment and refurbishments $ (130,153 ) $ (65,282 ) $ (225,389 ) $ (117,817 )
Total proceeds from sale of rental equipment 20,526 15,235 35,080 30,437
Net CAPEX for Rental Equipment (109,627 ) (50,047 ) (190,309 ) (87,380 )
Purchase of property, plant and equipment (9,772 ) (10,143 ) (20,253 ) (17,450 )
Proceeds from sale of property, plant and equipment 491 2,709 751 16,438
Net CAPEX $ (118,908 ) $ (57,481 ) $ (209,811 ) $ (88,392 )

Return on Invested Capital

Return on Invested Capital is defined as adjusted earnings before interest and amortization divided by net assets. Adjusted earnings before interest and amortization is the sum of income (loss) before income tax expense, net interest (income) expense, amortization adjusted for non-cash items considered non-core to business operations including net currency (gains) losses, goodwill and other impairment charges, restructuring costs, costs to integrate acquired companies, non-cash charges for stock compensation plans, gains and losses resulting from changes in fair value and extinguishment of common stock warrant liabilities, and other discrete expenses, reduced by estimated taxes. Given we are not a significant US taxpayer due to our current tax attributes, we include estimated taxes at our current statutory tax rate of approximately 25%. Net assets is total assets less goodwill, and intangible assets, net and all non-interest bearing liabilities. Denominator is calculated as a five quarter average for annual metrics and two quarter average for quarterly metrics. The Company believes that Return on Invested Capital provides information about the long-term health and profitability of the business relative to the Company’s cost of capital.

The following table provides an unaudited reconciliation of Return on Invested Capital:

Three Months Ended Six Months Ended
June 30, June 30,
(in thousands) 2022 2021 2022 2021
Total Assets $ 5,978,808 $ 5,559,713 $ 5,978,808 $ 5,559,713
Less: Goodwill (1,171,725 ) (1,180,737 ) (1,171,725 ) (1,180,737 )
Less: Intangible assets, net (446,578 ) (474,327 ) (446,578 ) (474,327 )
Less: Total Liabilities (4,204,858 ) (3,554,300 ) (4,204,858 ) (3,554,300 )
Add: Long Term Debt 3,017,678 2,506,295 3,017,678 2,506,295
Net Assets excluding interest bearing debt and goodwill and intangibles $ 3,173,325 $ 2,856,644 $ 3,173,325 $ 2,856,644
Average Invested Capital (A) $ 3,149,640 $ 2,827,969 $ 3,119,208 $ 2,826,437
Adjusted EBITDA $ 233,335 $ 175,495 $ 425,158 $ 339,080
Less: Depreciation (79,615 ) (78,469 ) (154,793 ) (144,706 )
Adjusted EBITA (B) $ 153,720 $ 97,026 $ 270,365 $ 194,374
Statutory Tax Rate (C) 25 % 25 % 25 % 25 %
Estimated Tax (B*C) $ 38,430 $ 24,256 $ 67,591 $ 48,593
Adjusted earnings before interest and amortization (D) $ 115,290 $ 72,770 $ 202,774 $ 145,781
ROIC (D/A), annualized 14.6 % 10.3 % 13.0 % 10.3 %
Operating income (E) $ 131,661 $ 70,615 $ 229,570 $ 145,899
Total Assets (F) $ 5,978,808 $ 5,559,713 $ 5,978,808 $ 5,559,713
Operating income / Total Assets (E/F), annualized 8.9 % 5.1 % 7.8 % 5.3 %

Source Intelligence Acquires Compliance Map

The Acquisition Leverages the Best of Both Companies to Provide an Industry-Leading Supply Chain Compliance Solution Set

Source Intelligence Logo

Source Intelligence Logo

FORT WALTON BEACH, Fla., Aug. 03, 2022 (GLOBE NEWSWIRE) — Source Intelligence, the industry-leading SaaS company for supply chain compliance and transparency, announces its acquisition of Compliance Map, an environmental and supply chain compliance platform, as of Monday, July 18.

Compliance Map specializes in enterprise software solutions to automate obligations arising from materials compliance regulations (such as RoHS and REACH), Conflict Minerals, Extended Producer Responsibility, Responsible Sourcing Audit Management, Country or Origin and Supply Chain Transparency requirements.

The acquisition enables Source Intelligence to grow its global footprint in Europe and the APAC region, expand its team of supply chain compliance experts and enhance its ability to help clients in an ever-changing regulatory landscape.

“Having watched Compliance Map build a strong reputation with highly satisfied customers over the years, we’re excited to integrate their solutions with our software to create the most comprehensive all-in-one Supply Chain Compliance and ESG solution,” comments Glenn Trout, CEO of Source Intelligence. “Combining Compliance Map with our software means we can provide a fully integrated customer experience. For current and future clients, this means less risk and uncertainty, and more trust and confidence.”

Compliance Map President Anthony Delengaigne is confident about what the two companies will achieve and how clients across the globe will benefit from merging a shared culture and vision.

“Source Intelligence shares the same customer- and people-obsessed culture and mission as Compliance Map, which has enabled us to deliver quality, customer-led solutions,” states Delengaigne. “I feel inspired by what our collective valued team will bring to this shared vision and, together, we are confident we can evolve and continuously innovate our platform.”

The combination of Compliance Map’s sophisticated software with Source Intelligence’s industry-leading database will offer clients the most comprehensive supply chain compliance software worldwide.

“Compliance Map’s impressive software and Source Intelligence’s regulatory expertise and data collection capabilities is a powerful combination,” says Trout. “What excites me the most about bringing together Compliance Map and Source Intelligence is that we’re going to be able to provide our clients with a superior supply chain compliance solution, as well as the highest-quality, most complete database available.”

About Source Intelligence: Source Intelligence provides industry-leading SaaS Supply Chain Compliance solutions that streamline the evolving complexities of sustainable sourcing and the management of parts and components in supply chains. With a team comprised of PhDs, scientists and longstanding executives, Source Intelligence solutions deliver successful outcomes for supply chain transparency, obsolescence management, ESG initiatives and more.

About Compliance Map: Compliance Map is the world’s most comprehensive environmental compliance and supply chain software with over 120,000 users worldwide. Its sophisticated solutions, along with a team of regulatory compliance experts, help clients manage and automate due diligence obligations for Global RoHS, REACH, EPR, Conflict Minerals and more.

Press Contact: Amanda Lindberg, Director of Marketing

Phone: 877.916.6337

Email: amanda.lindberg@sourceintel.com 

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MAHA 2022: MARDI showcases technology for commercial vegetable production

KUALA LUMPUR, Aug 4 (Bernama) — The Vegetable and Herb Agro-Food Site at the Malaysian Agriculture, Horticulture and Agro-tourism Exhibition (MAHA) 2022 emphasises the concept of commercial vegetable production and urban agriculture based on the application of a technology developed by the Malaysian Agricultural Research and Development Institute (MARDI).

Director at the MARDI Horticulture Research Centre, Dr Zulhazmi Sayuti, said it included the plant factory technology for the production of all-year round high-value vegetables, which was developed through MARDI’s ‘Research and Development’ (R&D).

“This technology is a system of vegetable production in a closed and controlled structure, without the plant being affected by changes in the weather that can affect yield, quality, as well as pest and disease attacks, which is capable of increasing yields four to 10 times per unit of space compared to conventional cultivation methods,” he told Bernama.

At this MAHA 2022 at the Malaysian Agriculture Exposition Park Serdang (MAEPS), being held from today until Aug 14 , MARDI is also showcasing the elevated self-watering planting system, especially for premium price leafy vegetables.

He said the system could increase production four to six times per unit of space, compared to conventional farming, and is cost-saving in terms of fertilisers and agricultural inputs of up to 25 per cent compared to the hydroponic method.

He said visitors also had the opportunity to see the Self-watering Container (SWC) technology, which is a pot planting system that consists of three parts, namely water storage, capillaries and plants to meet the needs of urban agriculture, as well as reduce the frequency of watering and control the plant size.

According to Zulhazmi, MARDI has produced a package for lowland round cabbage production technology in 2018 and lowland cauliflower production technology in 2020 in an effort to reduce the country’s dependence on import of round cabbage.

“All these technologies and many more of MARDI’s technologies related to vegetables are on display at Laman Sayur MAHA 2022 in various forms.

“For example, plant factory technology with the application of LED lights as a result of MARDI’s innovation is displayed on the Edibel website, while the onion production technology is exhibited in the form of Greenkit, which is MARDI’s innovation for ‘home gardening’.

“There is also a Plant Doctor Site, which also serves as a plant clinic, to showcase vegetable pest and disease management technology, ” he said.

Meanwhile, Zulhazmi said all the value chains from seed producers such as East West Seed and Crop Power, the production of new ‘varieties’ by MARDI (Tomato MAHA 18, Chili L5), the transfer of technology to target groups in urban agriculture (Maybank Urban Farming) are also displayed at the Vegetables and Herbs Agro-Food Site.

The Vegetable and Herb Site is one of the eight agricultural sites, namely Fisheries, Livestock, Padi, Fruits, Pineapple, Machinery Floriculture.

This year’s MAHA 2022 is themed of ‘Food Security for the Future’.

Source: BERNAMA News Agency