Neff Corporation (the “Company”) (NYSE:NEFF) today reported its
financial results for the fourth quarter and full year ended
December 31, 2016.
Graham Hood, Chief Executive Officer of Neff Corporation,
commented, "We were pleased with the growth we generated in our
fourth quarter and full year 2016 results. During 2016, we grew our
rental revenues and operating income in our core construction
driven end-markets. We anticipate continued growth in these markets
in 2017. Our approach for 2017 is to remain focused and selective
with our CAPEX spending as we take advantage of strong rental
demand in our core construction end-markets."
Fourth Quarter 2016 Highlights
- Total revenues decreased 3.6% to $102.3
million from $106.1 million in the fourth quarter of 2015.
- Rental revenues increased 6.0%, or $5.2
million, to $91.7 million in 2016 from $86.5 million in the prior
year period.
- Time utilization decreased slightly to
66.4% compared to 66.8% in the fourth quarter of 2015.
- Rental rates increased 0.5% year over
year in the fourth quarter of 2016.
- The average original equipment cost
("OEC") of our rental fleet increased by 6.1% to $830.5 million in
the fourth quarter of 2016.
- Net income attributable to Neff
Corporation increased to $5.4 million or $0.59 per diluted share in
the fourth quarter of 2016, from $4.0 million or $0.33 per diluted
share in the prior year period.
- Adjusted EPS for the fourth quarter of
2016 was $0.32 per diluted share versus $0.24 per diluted share in
the prior year period.
- Adjusted EBITDA increased to $49.9
million in the fourth quarter of 2016 as compared to $49.4 million
in the prior year period.
- Adjusted EBITDA margin was 48.8% in the
fourth quarter of 2016 compared with 46.5% in the fourth quarter of
2015.
Full Year 2016 Highlights
- Total revenues increased 3.4% to $397.0
million from $383.9 million in 2015.
- Rental revenues increased 7.2%, or
$24.1 million, to $360.1 million in 2016 from $336.0 million in the
prior year.
- Time utilization increased to 67.1%
from 66.8% in 2015.
- Rental rates decreased 0.5%
year-over-year.
- The OEC of our rental fleet increased
by 6.8% to $813.6 million year over year.
- Net income attributable to Neff
Corporation decreased to $10.7 million or $1.11 per diluted share
in 2016, from $15.6 million or $1.29 per diluted share in the prior
year.
- Adjusted EPS for the year was $1.18 per
diluted share versus $1.28 per diluted share in the prior
year.
- Adjusted EBITDA increased 4.1% to
$193.8 million in 2016 from $186.2 million in 2015.
- Adjusted EBITDA margin was 48.8%
compared with 48.5% in 2015.
- Total leverage ratio was 3.6x as of
December 31, 2016 compared to 3.9x as of December 31,
2015.
Fourth Quarter 2016 Financial Results
Revenue
Total revenues decreased 3.6% to $102.3 million, down from
$106.1 million in the fourth quarter of 2015. Rental revenues
increased 6.0% to $91.7 million, up from $86.5 million in the
fourth quarter of 2015. Equipment sales decreased to $7.0 million
from $16.3 million in the fourth quarter of 2015. Parts and service
revenues increased slightly to $3.6 million from $3.4 million in
the fourth quarter of 2015.
Net income attributable to Neff Corporation
Net income attributable to Neff Corporation for the quarter was
$5.4 million compared to $4.0 million in the fourth quarter of
2015.
Adjusted EBITDA
Adjusted EBITDA, a non-US GAAP financial measure that includes
the adjustments noted in the reconciliation below, for the fourth
quarter of 2016 increased to $49.9 million from $49.4 million in
the fourth quarter of 2015. Adjusted EBITDA, as a percentage of
revenues, was 48.8% compared to 46.5% in the fourth quarter of
2015.
Full Year 2016 Financial Results
Revenue
Total revenues increased 3.4% to $397.0 million, up from $383.9
million in 2015. Rental revenues increased 7.2% to $360.1 million,
up from $336.0 million in 2015. Equipment sales decreased to $23.3
million from $34.8 million in 2015. Parts and service revenues
increased to $13.6 million from $13.1 million in 2015.
Rental Fleet
At December 31, 2016, the OEC of the Company’s rental fleet
was $824.7 million, up 7.7% when compared to 2015. The average age
of the rental fleet was 48 months at December 31, 2016, which
increased from the average age at December 31, 2015. Time
utilization, which we define as the daily average OEC of equipment
on rent, divided by the OEC of all equipment in the rental fleet
during the relevant period, was 67.1%, up 30 basis points when
compared with 2015. The weighted average decline of our rental
rates, which we calculate as the change in weighted average rental
rate over the applicable period, was 0.5% in 2016.
Net income attributable to Neff Corporation
Net income attributable to Neff Corporation for 2016 decreased
to $10.7 million from $15.6 million in 2015.
Adjusted EBITDA
Adjusted EBITDA, a non-US GAAP financial measure that includes
adjustments noted in the reconciliation below, in 2016 was $193.8
million compared to $186.2 million in 2015. Adjusted EBITDA, as a
percentage of revenues, was 48.8% compared to 48.5% in 2015.
Return on Invested Capital ("ROIC")
ROIC was 10.8% for the year ended December 31, 2016, a
decrease of 10 basis points from the year ended December 31,
2015. The Company’s ROIC metric uses after-tax operating income for
the trailing 12 months divided by average stockholders’ equity
(deficit) and debt and deferred taxes, net of average cash. To
mitigate the volatility related to fluctuations in the Company’s
tax rate from period to period, a federal statutory tax rate of 35%
is used to calculate after-tax operating income.
Fleet Size
The size of the rental fleet was $824.7 million of OEC at
December 31, 2016, compared to $765.7 million at
December 31, 2015.
Share Repurchase Program
During the fourth quarter of 2016, the Company repurchased
approximately 52 thousand shares of Class A common stock for $0.5
million under the 2 year share repurchase program authorized in
November 2015. Since the authorization of the share repurchase
program, the Company has purchased 1.7 million shares of Class A
common stock for a total cost of $11.8 million, including
commissions.
2017 Financial Outlook
- Total revenue is forecast to be in the
range of $400 million to $420 million.
- Adjusted EBITDA is forecast to be in a
range of $195 million to $205 million.
- Year-over-year rental rate increase is
expected to be approximately 0% to 1%.
- Time utilization is forecast to be
approximately 67.0%.
- Net capital expenditures are expected
to be in the range of $85 million to $90 million.
- Target leverage ratio by the end of
2017 is expected to be approximately 3x to 3.25x.
Mr. Hood concluded, "We are optimistic about our markets for
2017. We believe the multi-year expansion for our industry will
continue and we have potential for our earthmoving fleet to
continue to gain market share as more customers are making the
decision to rent versus own. We are confident that our diverse
end-markets and our focus on high growth geographies will enable us
to execute and deliver another year of solid growth in 2017. The
diminishing impact of the slowdown in our oil and gas markets and
the outlook for increased infrastructure spending add to our
already positive industry outlook."
Conference Call
The Company’s management will hold a conference call to discuss
the 2016 fourth quarter and full year results on March 3,
2017, at 11:00 a.m. (Eastern Daylight Time). To participate in the
conference call, participants should dial +1 877-201-0168
(domestic) or +1 647-788-4901 (international) and enter access code
51788436, a few minutes prior to the start of the call. Those who
wish to listen to the live conference call and view the
accompanying presentation slides should visit the "Investor
Relations" portion of the Neff Corporation website at:
http://investor.neffrental.com.
A telephonic replay will be available from 1:00 p.m. ET on the
day of the conference call through Friday, March 10, 2017. To
listen to the archived call, dial +1 855-859-2056 or +1
404-537-3406 and enter conference ID number 51788436. The replay of
the conference call will also be available via webcast on the
Company's website at: http://investor.neffrental.com, where it will be
archived for 12 months after the conference call.
Non-US GAAP Measures and Key Performance Measures
Earnings before interest, taxes, depreciation and amortization
("EBITDA"), adjusted EBITDA, and adjusted earnings per share are
non-US GAAP financial measures as defined under the rules of the
Securities and Exchange Commission ("SEC"). EBITDA represents the
sum of net income, interest expense, provision for income taxes,
depreciation of rental equipment and other depreciation and
amortization. Adjusted EBITDA represents EBITDA further adjusted to
give effect to other items that we do not consider to be indicative
of our ongoing operations, including for the periods presented
rental split expense, equity-based compensation, adjustment to tax
receivable agreement and (gain) loss on interest rate swap.
Adjusted earnings per share ("EPS") represents the sum of diluted
earnings per share of Class A common stock, as reported, adjusted
for the impact of items that we believe are not indicative of
ongoing operations, including for the periods presented (gain) loss
on interest rate swap and non-cash adjustment to tax receivable
agreement. The company believes that EBITDA, Adjusted EBITDA and
adjusted EPS provide useful information about operating performance
and period-over-period growth and is useful to securities analysts,
investors and other interested parties in evaluating our operating
performance compared to that of other companies in the industry.
However, none of these measures should be considered as
alternatives to net income, cash flows from operating activities or
diluted EPS under US GAAP as indicators of operating performance or
liquidity. Because EBITDA, Adjusted EBITDA and adjusted EPS are not
calculated in the same manner by all companies, they may not be
comparable to other similarly titled measures used by other
companies.
OEC and rental rate are two of the key performance measures we
use in evaluating our business and results of operations.
We present OEC, defined as the first cost of acquiring the
equipment, or in the case of used equipment purchases and rental
splits, an estimate of the first cost that would have been paid to
acquire the equipment if it had been purchased new in its year of
manufacture, as the daily average OEC of equipment on rent, divided
by the OEC of all equipment in the rental fleet during the relevant
period.
We define rental rates as the rates charged to our customers on
rental contracts that typically are for daily, weekly or monthly
terms. Rental rates change over time based on a combination of
pricing, the mix of equipment on rent and the mix of rental terms
with customers. Period over period changes in rental rates are
calculated on a weighted average with the weighting based on prior
period revenue mix.
About Neff Corporation
Neff Corporation is a leading regional equipment rental company
in the United States, focused on the fast growing Sunbelt states.
The Company offers a broad array of equipment rental solutions for
its diverse customer base. Neff Corporation’s broad fleet of
equipment includes earthmoving, material handling, aerial and other
rental equipment to meet specific customer needs.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical facts should be considered
forward-looking statements, including statements regarding our 2017
outlook, including without limitation, statements regarding our
forecasted revenue and Adjusted EBITDA and our expected rental
rates, time utilization and net capital expenditures; expectations
regarding the execution of our strategy; expectations regarding
seasonality and expectations regarding the slowdown in oil and gas
exploration and the Company’s ability to offset such slowdown. We
use words such as "could," "may," "should," "will," "expect,"
"believe," "continue," "anticipate," "estimate," "intend,"
"project," "plan," "forecast" and other similar expressions to
identify some but not all forward-looking statements.
Forward-looking statements involve estimates and uncertainties that
could cause actual results to differ materially from those
expressed in the forward-looking statements.
The forward-looking statements contained in this press release
are based on assumptions that we have made in light of our industry
experience and our perceptions of historical trends, current
conditions, current plans, expected future developments and other
important factors we believe are appropriate under the
circumstances. As you read and consider this press release, you
should understand that these statements are not guarantees of
performance or results. They involve risks, uncertainties (many of
which are beyond our control) and assumptions. Although we believe
that these forward-looking statements are based on reasonable
assumptions, you should be aware that many important factors could
affect our actual operating and financial performance and cause our
performance to differ materially from the performance anticipated
in the forward-looking statements. We believe these important
factors include, but are not limited to, the following: the fact
that the future economic downturns could have a material adverse
impact on our business; trends in oil and gas prices and the impact
on the level of exploration, development and production activity of
certain of the Company's customers and the demand for the Company's
service and products; the fact that the Company’s revenues and
operating results will fluctuate, which could affect the volatility
of the trading of its Class A common stock; the highly
cyclical nature of the equipment rental industry; decreases in
construction or industrial activities and resulting decreases in
the demand for the Company’s equipment or the rental rates or
prices it can charge; competition in the equipment rental industry
which could lead to a decrease in the Company’s market share or in
rental rates and its ability to sell equipment at favorable prices;
Wayzata, the Company’s largest shareholder, as a result of its
ownership stake in the Company, may have the ability to exert
substantial influence over actions to be taken or approved by the
Company's Board of Directors or shareholders; the Company's
substantial indebtedness, its ability to generate cash to meet its
debt service obligations and the restrictions the Company's
indebtedness imposes on the Company's current and future
operations; the Company’s need to obtain additional capital, which
may not be available, to fund the capital outlays required for the
success of its business, including those relating to purchasing
equipment, opening new rental locations, making acquisitions and
refinancing existing indebtedness; significantly higher maintenance
costs in connection with increases in the weighted average age of
the Company’s rental fleet; fluctuations in the price of the
Company's Class A common stock, the Company's ability to complete
share repurchases under the Company's share repurchase program on
favorable terms or at all, dilution of existing shareholders by
future issuances of additional Class A common stock in connection
with any redemption of common units or new issuances of Class A
common stock and any decline in the stock price resulting from
these issuances or any future sale of shares of Class A common
stock by Wayzata pursuant to the effective Form S-3 or otherwise;
environmental and health and safety laws and regulations that may
result in liabilities for the Company; termination of one or more
of the Company’s relationships with any of its equipment
manufacturers; residual value risk of the Company’s rental fleet
upon disposition; the rising cost of new equipment and supplier
constraints; disruptions in the Company’s information technology
and customer relationship management systems; potential
acquisitions and expansions into new markets; payments under our
tax receivable agreement; the Company's dependence on key
personnel, any labor disputes, work stoppages and/or slowdowns; and
increased costs as a result of operating as a public company. These
and other important factors described under the captions "Risk
Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's annual report
on Form 10-K for the fiscal year ended December 31, 2016 and
similar disclosures in subsequent reports filed with the SEC could
cause actual results to differ materially from those indicated by
the forward-looking statements made in this press release. Should
one or more of these risks or uncertainties materialize, or should
any of these assumptions prove incorrect, our actual operating and
financial performance may vary in material respects from the
performance projected in these forward-looking statements.
Further, any forward-looking statement speaks only as of the
date on which it is made, and except as required by law, we
undertake no obligation to update any forward-looking statement
contained in this press release to reflect events or circumstances
after the date on which it is made or to reflect the occurrence of
anticipated or unanticipated events or circumstances. New important
factors that could cause our business not to develop as we expect
emerge from time to time, and it is not possible for us to predict
all of them.
TABLE 1
NEFF CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in millions, except per share
amounts)
For the Three Months Ended December 31,
For the Year Ended December 31, 2016
2015 2016 2015 Revenues Rental revenues
$ 91.7 $ 86.5 $ 360.1 $ 336.0 Equipment sales 7.0 16.3 23.3 34.8
Parts and service 3.6 3.4 13.6 13.1
Total revenues 102.3 106.1 397.0 383.9
Cost of revenues Cost of equipment sold 4.5 11.2 14.7 23.1
Depreciation of rental equipment 21.9 21.7 88.7 83.9 Cost of rental
revenues 22.9 21.5 87.8 80.0 Cost of parts and service 1.9
2.1 7.6 7.6 Total cost of revenues 51.2
56.4 198.9 194.6 Gross profit 51.1 49.7
198.1 189.3 Other operating expenses Selling,
general and administrative expenses 24.0 22.9 96.9 90.5 Other
depreciation and amortization 2.2 2.7 9.7 10.5
Total other operating expenses 26.2 25.6 106.6
101.0 Income from operations 24.9 24.1
91.6 88.2 Other expenses (income) Interest expense
11.0 11.3 43.8 44.6 Adjustment to tax receivable agreement (1.5 )
0.1 0.4 (2.4 ) (Gain) loss on interest rate swap (4.1 ) (1.8 ) 1.3
2.3 Total other expenses (income) 5.3 9.5
45.5 44.4 Income before income taxes 19.6 14.7
46.1 43.8 Provision for income taxes (3.3 ) (1.9 ) (6.8 ) (3.6 )
Net income 16.3 12.7 39.2 40.2 Less: net income attributable to
non-controlling interest 10.9 8.7 28.5 24.6
Net income attributable to Neff Corporation $ 5.4 $
4.0 $ 10.7 $ 15.6 Net income
attributable to Neff Corporation per share of Class A common stock
Basic $ 0.61 $ 0.38 $ 1.15 $ 1.49
Diluted $ 0.59 $ 0.33 $ 1.11 $ 1.29
Weighted average shares of Class A common stock outstanding Basic
8.9 10.5 9.4 10.5 Diluted 9.2
12.2 9.7 12.1
TABLE 2
NEFF CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (in millions) December 31,
2016 December 31, 2015 ASSETS Cash and
cash equivalents $ 0.9 $ 0.3 Accounts receivable, net 64.9 70.3
Inventories 1.9 1.8 Rental equipment, net 462.1 457.5 Property and
equipment, net 35.5 33.5 Prepaid expenses and other assets 8.2 5.6
Goodwill 60.6 60.6 Intangible assets, net 14.2 15.3
Total assets $ 648.4 $ 644.8
LIABILITIES
AND STOCKHOLDERS' DEFICIT Liabilities Accounts payable $
15.9 $ 18.9 Accrued expenses and other liabilities 35.1 31.4
Revolving credit facility, net 222.5 250.5 Second lien loan, net
468.9 471.2 Payable pursuant to tax receivable agreement 29.5 29.1
Deferred tax liability, net 8.3 9.5 Total liabilities
780.1 810.6 Total stockholders' deficit
and non-controlling interest (131.7 ) (165.8 ) Total liabilities
and stockholders' deficit and non-controlling interest $ 648.4
$ 644.8
TABLE 3
NEFF CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF CASH FLOWS (in millions) For
the Three Months Ended December 31, For the Year
Ended December 31, 2016 2015 2016
2015 Cash Flows from Operating Activities Net
income $ 16.3 $ 12.7 $ 39.2 $ 40.2
Adjustments to reconcile net income to net
cash provided by
operating activities:
Depreciation 23.8 24.0 97.3 93.2 Amortization of debt issue costs
0.4 0.4 1.5 1.5 Amortization of intangible assets 0.3 0.3 1.1 1.3
Amortization of original issue discount 0.1 0.1 0.3 0.3 Gain on
sale of equipment (2.5 ) (5.1 ) (8.6 ) (11.7 ) Provision for bad
debt 1.2 1.1 2.9 2.5 Equity-based compensation expense 0.5 0.3 2.0
1.2 Deferred income taxes 3.3 2.0 6.7 4.1 Adjustment to tax
receivable agreement (1.5 ) 0.1 0.4 (2.4 ) Unrealized gain on
interest rate swap (4.5 ) (2.0 ) 0.3 1.9 Changes in operating
assets and liabilities: Accounts receivable (1.6 ) (10.4 ) 2.5 (6.3
) Inventories, prepaid expenses and other assets (1.0 ) 1.1 (2.8 )
1.2 Accounts payable 1.5 (0.1 ) 0.5 (1.4 ) Accrued expenses and
other liabilities 1.7 (2.0 ) 5.5 (3.3 ) Net cash
provided by operating activities 37.9 22.5 148.9
122.2
Cash Flows from Investing Activities
Purchases of rental equipment (5.4 ) (8.5 ) (112.9 ) (147.5 )
Proceeds from sale of equipment 7.0 16.3 23.3 34.8 Purchases of
property and equipment (1.4 ) (1.4 ) (11.5 ) (13.1 ) Cash paid for
acquisitions — (3.6 ) — (3.6 ) Net cash provided by
(used in) investing activities 0.2 2.8 (101.2 )
(129.4 )
Cash Flows from Financing Activities Repayments
under revolving credit facility (46.5 ) (56.3 ) (156.0 ) (151.5 )
Borrowings under revolving credit facility 12.9 31.9 128.8 159.9
Debt issue costs — — (1.6 ) — Common stock repurchases (0.5 ) (0.8
) (10.9 ) (0.8 ) Second Lien Loan prepayment — — (3.3 ) — Neff
Holdings LLC stock option exercises (3.8 ) — (3.8 ) — Distribution
to member (0.2 ) (0.3 ) — Payment of costs directly associated with
the issuance of Class A common stock — — —
(0.3 ) Net cash (used in) provided by financing activities (38.0 )
(25.2 ) (47.1 ) 7.3 Net increase in cash and cash
equivalents 0.1 0.1 0.6 0.1 Cash and cash equivalents, beginning of
year 0.8 0.2 0.3 0.2 Cash and cash
equivalents, end of year $ 0.9 $ 0.3 $ 0.9 $
0.3
TABLE 4
NEFF CORPORATION AND SUBSIDIARIES DILUTED EARNINGS PER
SHARE CALCULATION (in millions, except per share data)
For the Three Months Ended December 31, For
the Year Ended December 31, 2016 2015
2016 2015 Numerator: Net income
attributable to Neff Corporation $ 5.4 $ 4.0 $ 10.7
$ 15.6
Denominator: Weighted average shares of Class
A common stock outstanding, diluted 9.2 12.2 9.7
12.1
Diluted earnings per share of Class A common
stock $ 0.59 $ 0.33 $ 1.11 $ 1.29
NEFF CORPORATION AND SUBSIDIARIES
ADJUSTED EARNINGS PER SHARE - US GAAP
RECONCILIATION
We define “adjusted earnings per share” as the sum of diluted
earnings per share of Class A common stock, as reported, adjusted
for the impact of the items that we believe are not indicative of
our ongoing operations, including for the periods presented (gain)
loss on interest rate swap and non-cash adjustment to the tax
receivable agreement. Management believes that including adjusted
EPS in this press release is appropriate because securities
analysts, investors and other interested parties use this non-US
GAAP financial measure as an important measure to assess our
operating performance compared to that of other companies in the
industry. However, adjusted EPS is not a measure of financial
performance under US GAAP. Accordingly, adjusted EPS should not be
considered an alternative to diluted EPS of Class A common stock.
The table below provides a reconciliation between diluted EPS of
Class A common stock, as reported, and adjusted EPS. Because
adjusted EPS is not calculated in the same manner by all companies,
it may not be comparable to other similarly titled measures used by
other companies.
TABLE 5
For the Three Months Ended December 31, For
the Year Ended December 31, 2016 2015
2016 2015 Diluted earnings per share of
Class A common stock, as reported $ 0.59 $ 0.33 $ 1.11 $
1.29 Adjusted for: (Gain) loss on interest rate swap(a) (0.10 )
(0.09 ) 0.03 0.11 Adjustment to tax receivable agreement(b) (0.17 )
— 0.04 (0.12 )
Adjusted earnings per share
$ 0.32 $ 0.24 $
1.18 $ 1.28
(a) Represents after tax impact of (gain) loss on interest rate
swap related to adjustments to fair value.
(b) Represents non-cash adjustment to tax receivable agreement
related to changes in estimates used in the calculation of the tax
receivable agreement.
NEFF CORPORATION AND SUBSIDIARIES
EBITDA AND ADJUSTED EBITDA - US GAAP
RECONCILIATION
(in millions)
EBITDA is defined as net income plus interest expense, provision
for income taxes, depreciation of rental equipment and other
depreciation and amortization. Adjusted EBITDA is defined as EBITDA
further adjusted to give effect to non-cash and other items that
management does not consider to be indicative of our ongoing
operations, including for the periods presented rental split
expense, equity-based compensation, adjustment to tax receivable
agreement and (gain) loss on interest rate swap. EBITDA and
Adjusted EBITDA are not measures of performance in accordance with
US GAAP and should not be considered as alternatives to net income
or operating cash flows determined in accordance with US GAAP.
Additionally, EBITDA and Adjusted EBITDA are not intended to be
measures of cash flow for management's discretionary use, as they
exclude certain cash requirements such as interest payments, tax
payments and debt service requirements. Management believes that
EBITDA and Adjusted EBITDA in this press release is appropriate
because securities analysts, investors and other interested parties
use these non-US GAAP financial measures as important measures of
assessing our operating performance across periods on a consistent
basis. EBITDA and Adjusted EBITDA have limitations as analytical
tools and should not be considered in isolation or as a substitute
for analysis of our results as reported under US GAAP. The table
below provides a reconciliation between net income and EBITDA and
Adjusted EBITDA. Because EBITDA and Adjusted EBITDA are not
calculated in the same manner by all companies, they may not be
comparable to other similarly titled measures used by other
companies.
TABLE 6
For the Three Months Ended December 31, For
the Year Ended December 31, 2016 2015
2016 2015 (in millions of dollars) Net
income $ 16.3 $ 12.7 $ 39.2 $ 40.2 Interest expense 11.0 11.3 43.8
44.6 Provision for income taxes 3.3 1.9 6.8 3.6 Depreciation of
rental equipment 21.9 21.7 88.7 83.9 Other depreciation and
amortization 2.2 2.7 9.7 10.5
EBITDA(e) 54.6 50.3 188.3 182.8
Rental split expense(a) 0.5 0.5 1.9 2.3 Equity based compensation
expense(b) 0.5 0.3 2.0 1.2 Adjustment to tax receivable
agreement(c) (1.5 ) 0.1 0.4 (2.4 ) (Gain) loss on interest rate
swap(d) (4.1 ) (1.8 ) 1.3 2.3
Adjusted
EBITDA(f) $ 49.9 $ 49.4
$ 193.8 $ 186.2
(a) Represents cash payments made to suppliers of equipment in
connection with rental split expense, which payments are credited
against the purchase price of the applicable equipment if Neff
Holdings elects to purchase that equipment.
(b) Represents non-cash equity-based compensation expense
recorded in the periods presented in accordance with US GAAP.
(c) Represents adjustment to tax receivable agreement related to
changes in estimates used in the calculation of the tax receivable
agreement.
(d) Represents (gain) loss on interest rate swap related to
adjustments to fair value.
(e) Our EBITDA margin was 53.4% and 47.4% for the three months
ended December 31, 2016 and 2015, respectively, and 47.4% and
47.6% for the years ended December 31, 2016 and 2015,
respectively.
(f) Our Adjusted EBITDA margin was 48.8% and 46.5% for the three
months ended December 31, 2016 and 2015, respectively, and
48.8% and 48.5% for the years ended December 31, 2016 and
2015, respectively.
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version on businesswire.com: http://www.businesswire.com/news/home/20170302006429/en/
Neff CorporationInvestor Relations Contact:Brian Coolidge,
305-513-3350Fax: 305-513-4156InvestorRelations@neffcorp.com
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