Yahoo Finance McGrath RentCorp (NASDAQ:MGRC) Q1 2024 Earnings Call Transcript
McGrath RentCorp (NASDAQ:MGRC) Q1 2024 Earnings Call Transcript April 25, 2024
McGrath RentCorp beats earnings expectations. Reported EPS is $0.93, expectations were $0.73. McGrath RentCorp isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the McGrath RentCorp First Quarter 2024 Earnings Conference Call. At this time, all conference participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] This conference call is being recorded today, Thursday, April 25, 2024. Before we begin, note that the matters the company management will be discussing today that are not statements of historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the company's expectations, strategies, prospects, or targets. These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected.
Important factors that could cause actual results to differ materially from the company's expectations are disclosed under risk factors in the company's Form 10-K and other SEC filings. Forward-looking statements are made only as of the date hereof. Except as otherwise required by law, we assume no obligation to update any forward-looking statements. In addition to the press release issued today, the company also filed with the SEC the earnings release on Form 8-K and its Form 10-Q for the quarter ended March 31, 2024. Speaking today will be Joe Hanna, Chief Executive Officer, and Keith Pratt, Chief Financial Officer. I will now turn the call over to Mr. Hanna. Please go ahead, sir.
Joe Hanna: Thank you, Bo. Good afternoon and thank you, everyone, for joining us on today's call. We are pleased to be together today and look forward to providing additional perspective on our results for the first quarter. I will start with some overall comments on our first quarter and Keith will provide additional detail in his financial review before we open the call up for questions. On a total company basis, we had a good first quarter. Rental revenue increased 9%, sales revenues increased 48%, and adjusted EBITDA grew by 17%. Mobile modular was the highlight of our first quarter with rental revenue increasing 19%. We have been diligently executing our strategy of offering an expanded range of modular solutions to our customers and it continues to show in the results.
Our teams are focused and clear about what success is for our customers and the business and they have been doing an excellent job delivering on those commitments. We finished the quarter with a rental backlog that is the highest in the company's history. The high backlog was driven by our education segment, which was very active as school districts addressed both modernization and growth projects in our operating geographies. This is a positive sign as we now have many units under contract that are already scheduled for shipment. Therefore, we have front-loaded much of our planned CapEx spend for the year. Modular sales revenues were also up very nicely for the quarter, increasing 49%. With our custom modular solutions initiative, we have positioned ourselves as a provider of modular solutions that range from very small installations to projects larger and more complex in scope, and the market opportunities are many.
Some are rental projects and some are sales. We want both. We've been very pleased by the development of this capability within the business and have a talented team in place to grow this segment. Commenting specifically now on our other growth initiatives, we are expanding contract scope and realize strong growth increases in both mobile modular plus and site-related services of 26% and 31% respectively. Our customers value the benefit of having their buildings arrive with additional amenities included in their rental contract, as well as the value of services provided on the outside of the building to make it completely ready for use. We are gaining traction as each quarter passes and customer acceptance has been positive. At portable storage, rental revenues increased 8%.
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