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LIVERMORE, Calif.--(BUSINESS WIRE)-- McGrath RentCorp (鈥淢cGrath鈥� or the 鈥淐ompany鈥�) (Nasdaq: MGRC), a leading business-to-business rental company in North America, today announced total revenues for the quarter ended March 31, 2025 of $195.4 million, an increase of 4% compared to the first quarter of 2024. The Company reported net income of $28.2 million, or $1.15 per diluted share, for the first quarter of 2025, compared to net income of $22.8 million, or $0.93 per diluted share, for the first quarter of 2024.

FIRST QUARTER 2025 YEAR-OVER-YEAR COMPANY HIGHLIGHTS:

• Rental operations revenues increased 3% to $154.0 million.
• Sales revenues increased 11% to $38.9 million.
• Total revenues increased 4% to $195.4 million.
• Income from operations was $45.6 million for the first quarter of 2025, compared to $52.1 million in 2024, which included a $9.3 million net gain on sale of a property. Excluding the $9.3 million net gain on sale of a property in 2024, income from operations increased $2.8 million (6%) from $42.8 million in 2024.
• Adjusted EBITDA¹ increased 3% to $74.5 million.
• Dividend rate of $0.485 per share for the first quarter 2025. On an annualized basis, this dividend represents a 1.9% yield on the April 23, 2025 close price of $102.42 per share.

Joe Hanna, President and CEO of McGrath, made the following comments:

鈥淲e delivered solid first quarter results. Companywide rental operations revenues grew 3%, sales revenues grew 11% and Adjusted EBITDA grew 3%.

Our modular business was a key contributor to the overall company performance. Despite softer market demand conditions than a year ago, rental revenues showed growth across both our commercial and education customer bases. We made progress growing our Mobile Modular Plus and Site Related Services initiatives, and our Enviroplex business had a strong quarter of new modular sales in the education market.

Weak demand conditions in Portable Storage continued, resulting in 13% lower rental revenues for the quarter, compared to a year ago. The weaker demand was broad-based across regions and was primarily a result of lower commercial construction project activity.

TRS-RenTelco had a positive start to the year, with quarterly rental revenues up slightly year over year for the first time since the first quarter of 2023. Improvement in market demand conditions was broad-based across customer segments.

Currently it is difficult to accurately assess the full impact of the recent tariff actions on the overall economy and our business. In light of the general economic uncertainty, we have a more cautious view of our business outlook for the second half of the year. In the meantime, we are focused on disciplined operational execution to make the most of the market opportunities.鈥�

DIVISION HIGHLIGHTS:

All comparisons presented below are for the quarter ended March 31, 2025 to the quarter ended March 31, 2024 unless otherwise indicated.

MOBILE MODULAR

For the first quarter of 2025, the Company鈥檚 Mobile Modular division reported Adjusted EBITDA of $47.6 million, an increase of $4.3 million, or 10%, when compared to the same quarter in 2024.

• Rental revenues increased 3% to $78.5 million, depreciation expense increased 7% to $10.6 million, and other direct costs decreased 8% to $20.8 million, which resulted in an increase in gross profit on rental revenues of 7% to $47.1 million.
• Rental related services revenues increased 22% to $29.5 million, primarily attributable to higher delivery and pick-up activities and higher site related services, with associated gross profit increasing 17% to $9.7 million.
• Sales revenues decreased 11% to $22.5 million, due to lower new and used equipment sales. Lower sales revenues, partly offset by higher gross margin on sales of 32% in 2025, compared to 31% in 2024, resulted in a 10% decrease in gross profit on sales revenues to $7.1 million.
• Selling and administrative expenses increased 1% to $34.0 million, when compared to the prior year.

PORTABLE STORAGE

For the first quarter of 2025, the Company鈥檚 Portable Storage division reported Adjusted EBITDA of $8.6 million, a decrease of $2.9 million, or 25%, when compared to the same quarter in 2024.

• Rental revenues decreased 13% to $16.1 million, depreciation expense increased 7% to $1.0 million, and other direct costs increased 4% to $1.5 million, which resulted in a decrease in gross profit on rental revenues of 15% to $13.5 million.
• Rental related services revenues decreased 23% to $3.6 million, primarily attributable to lower delivery and return delivery activities.
• Sales revenues were comparable to 2024 at $1.2 million. Gross margin on sales was 33% compared to 37% in 2024, resulting in a 7% decrease in gross profit on sales revenues to $0.4 million.
• Selling and administrative expenses decreased $0.3 million to $7.6 million, when compared to the prior year.

TRS-RENTELCO

For the first quarter of 2025, the Company鈥檚 TRS-RenTelco division reported Adjusted EBITDA of $17.9 million, a decrease of 3%, when compared to the same quarter in 2024.

• Rental revenues were comparable to 2024 at $25.5 million, depreciation expense decreased 14%, and other direct costs increased 9%, resulting in a 14% increase in gross profit on rental revenues to $10.3 million.
• Sales revenues increased 17% to $8.0 million and gross profit on sales revenues decreased 4% to $3.7 million, primarily attributed to lower sales margins of 47% in 2025, compared to 57% in 2024.
• Selling and administrative expenses increased 3%, to $7.4 million, when compared to the prior year.

FINANCIAL OUTLOOK:

Based upon the Company's year-to-date results and current outlook for the remainder of the year, the Company is updating its financial outlook. For the full-year 2025, the Company currently expects:

ABOUT MCGRATH:

McGrath RentCorp (Nasdaq: MGRC) is a leading business-to-business rental company in North America with a strong record of profitable business growth. Founded in 1979, McGrath鈥檚 operations are centered on modular solutions through its Mobile Modular and Mobile Modular Portable Storage businesses. In addition, its TRS-RenTelco business offers electronic test equipment rental solutions. The Company鈥檚 rental product offerings and services are part of the circular supply economy, helping customers work more efficiently, and sustainably manage their environmental footprint. With over 40 years of experience, McGrath鈥檚 success is driven by a focus on exceptional customer experiences. This focus has underpinned the Company鈥檚 long-term financial success and supported over 30 consecutive years of annual dividend increases to shareholders, a rare distinction among publicly listed companies.

McGrath is headquartered in Livermore, California. Additional information about McGrath and its businesses is available at and .

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

CONFERENCE CALL NOTE:

As previously announced in its press release of March 27, 2025, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on April 24, 2025 to discuss the first quarter 2025 results. To participate in the teleconference, dial 1-800-225-9448 (in the U.S.), or 1-203-518-9708 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company鈥檚 website at . A replay will be available for 7 days following the call by dialing 1-800-839-5324 (in the U.S.), or 1-402-220-1521 (outside the U.S.). In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company鈥檚 website at .

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding McGrath RentCorp鈥檚 expectations, strategies, prospects or targets are forward-looking statements. These forward-looking statements also can be identified by the use of forward-looking terminology such as 鈥渁nticipates,鈥� 鈥渂elieves,鈥� 鈥渃ontinues,鈥� 鈥渃ould,鈥� 鈥渆stimates,鈥� 鈥渆xpects,鈥� 鈥渋ntends,鈥� 鈥渕ay,鈥� 鈥減lan,鈥� 鈥減redict,鈥� 鈥減roject,鈥� or 鈥渨ill,鈥� or the negative of these terms or other comparable terminology. In particular, the discussion under the heading 鈥淔inancial Outlook鈥� is forward looking.

These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected including: the impact of the recent tariff actions and other economic factors; health of the education and commercial markets in our modular building division; competition within the modular business; the activity levels in the semiconductor and general purpose and communications test equipment markets at TRS-RenTelco; the activity levels in commercial construction projects and impact on Portable Storage segment; continued execution of our strategic performance improvement initiatives; our ability to successfully increase prices to offset cost increases; and our ability to effectively manage our rental assets, as well as the other factors disclosed under 鈥淩isk Factors鈥� in the Company鈥檚 2024 Form 10-K and other SEC filings.

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

Reconciliation of Adjusted EBITDA to the most directly comparable GAAP measures

To supplement the Company鈥檚 financial data presented on a basis consistent with accounting principles generally accepted in the United States of America (鈥淕AAP鈥�), the Company presents 鈥淎djusted EBITDA鈥�, which is defined by the Company as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, transaction costs, gains on property sales and non-operating transactions. The Company presents Adjusted EBITDA as a financial measure as management believes it provides useful information to investors regarding the Company鈥檚 liquidity and financial condition and because management, as well as the Company鈥檚 lenders, use this measure in evaluating the performance of the Company.

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

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

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View source version on businesswire.com:

Keith E. Pratt

EVP & Chief Financial Officer

925-606-9200

Source: McGrath RentCorp