UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported) April 30, 2015
|
CAI International, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
|
|
001-33388
|
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94-3109229
|
(State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer Identification
No.)
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Steuart Tower, 1 Market Plaza, Suite 900
San Francisco, California
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94105
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(Address of principal executive office)
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(Zip Code)
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Registrant's telephone number, including area code: (415)
788-0100
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(Former name or former address, if changed since last report)
|
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On April 30, 2015, CAI International, Inc. issued a press release
reporting its results of operations for the first quarter ended March
31, 2015. A copy of the press release is furnished as Exhibit 99.1 to
this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 Press release issued by CAI International, Inc. dated April 30,
2015.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
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CAI International, Inc.
|
|
|
(Registrant)
|
|
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April 30, 2015
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/s/ Timothy B. Page
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(Date)
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Timothy B. Page
Chief Financial Officer
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Exhibit 99.1
CAI
International, Inc. Reports Results for the First Quarter of 2015
SAN FRANCISCO--(BUSINESS WIRE)--April 30, 2015--CAI International, Inc.
(CAI) (NYSE: CAP), one of the world’s leading transportation finance and
logistics companies, today reported results for the first quarter of
2015.
Highlights
-
CAI reported rental revenue for the first quarter of 2015 of $54.9
million, an increase of $4.2 million, or 8%, compared to the first
quarter of 2014.
-
CAI reported net income attributable to CAI common stockholders for
the first quarter of 2015 of $13.5 million, a decrease of $0.7
million, or 5%, compared to the first quarter of 2014.
-
Net income attributable to CAI common stockholders per fully diluted
share was $0.64 for the first quarter of 2015, an increase of $0.01
compared to the first quarter of 2014.
-
Adjusted EBITDA1 for the first quarter of 2015 was $50.2
million, an increase of 8% compared to the first quarter of 2014.
-
Average utilization during the first quarter of 2015 was 93.5% (on a
CEU basis) compared to 91.0% for the first quarter of 2014.
-
CAI acquired approximately 58,000 CEU of containers at a cost of $118
million, and 288 railcars at a cost of $13 million, during the first
quarter of 2015.
Total revenue for the first quarter of 2015 was $58.5 million, compared
to $54.3 million for the first quarter of 2014, an increase of 8%.
Rental revenue for the first quarter of 2015 was $54.9 million, compared
to $50.7 million for the first quarter of 2014. The increase in rental
revenue was primarily due to an increase in the average number of owned
containers on lease and the growth in our railcar business. Management
fee revenue for the first quarter of 2015 was $1.3 million, compared to
$1.5 million for the first quarter of 2014, reflecting the reduction in
the size of CAI’s managed fleet. Finance lease income for the first
quarter of 2015 was $2.4 million, compared to $2.1 million for the first
quarter of 2014, reflecting additional finance leases entered into by
CAI in the last 12 months.
Victor Garcia, Chief Executive Officer of CAI commented, “The first
quarter is traditionally the weakest quarter of the year as a result of
seasonal global shipping patterns. Prior to the Lunar New Year holiday
period that commenced on February 19th, we saw strong incremental demand
for equipment. After the holiday period, we experienced a normal
increase in equipment returns, resulting in a slight decline in
utilization. Average utilization for the quarter was 93.5%, compared to
91.0% and 93.8% for the first and fourth quarters of 2014, respectively.”
Mr. Garcia continued, “Our net income for the quarter was $13.5 million,
a reduction of 5% compared to the first quarter last year. A couple of
factors negatively impacted net income during the quarter. First, we
reserved $0.3 million of receivables related to a small regional
customer in Asia that ceased operations during the quarter. Second, and
the primary factor impacting net income, was the reduction in the gain
on sale of used equipment. While the overall demand for secondary
containers has remained relatively stable, we have seen downward
pressure on sales proceeds as a result of the strong U.S. dollar,
particularly relative to the Euro. Since the containers are valued on
our books in dollars, we realize lower proceeds from non-dollar
denominated sales as the dollar strengthens. Fortunately, this same
issue does not impact our rental income, as virtually all of our leases
are dollar denominated. Furthermore, in spite of the pressure the strong
dollar places on secondary container prices, we believe the appreciation
of the dollar will ultimately benefit our business this year by
stimulating export trade overseas, particularly from Europe. We’ve
already begun to see this, as lease-out activity in Europe has increased
in April.”
Mr. Garcia concluded, “We expect demand for containers to be strong over
the coming two quarters as lower oil prices and financial stimulus
implemented by European and Asian central banks increases the likelihood
of improved economic activity in the second half of the year. We expect
that this will result in improved trade growth and increase the volume
of container demand. We expect equipment per diem rates to remain very
competitive, and thus our primary focus is to continue to improve the
utilization of our existing fleet to increase revenue and reduce costs.
“Our strategic focus continues to be to enhance our logistics efforts in
order to increase the return on our assets, expand our customer base,
add new revenue streams and maintain the high utilization of our fleet.
We are pleased with the progress we are making as we continue to add
logistics customers and are excited about the future opportunity this
area presents for our company. We have added personnel to this business
and expect to continue to add resources over time.
“In our rail business, we have begun taking delivery of our new
production and deliveries are expected to increase over the course of
the second and third quarters, with most of the contribution from those
investments occurring in the second half of this year. All of our new
production scheduled for 2015 delivery has already been placed on long
term leases.”
1 Refer to the Reconciliation of GAAP Amounts to Non GAAP
Amounts set forth below.
|
CAI International, Inc.
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Consolidated Balance Sheets
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(In thousands, except share information)
|
(UNAUDITED)
|
|
|
|
|
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March 31,
|
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December 31,
|
|
|
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2015
|
|
|
|
2014
|
|
Assets
|
|
|
|
|
Current assets
|
|
|
|
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Cash
|
|
$
|
23,078
|
|
|
$
|
27,810
|
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Cash held by variable interest entities
|
|
|
33,582
|
|
|
|
26,011
|
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Accounts receivable (owned fleet), net of allowance for doubtful
accounts of $902 and $680 at March 31, 2015 and December 31, 2014,
respectively
|
|
|
43,053
|
|
|
|
49,524
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Accounts receivable (managed fleet)
|
|
|
8,482
|
|
|
|
8,498
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|
Current portion of direct finance leases
|
|
|
19,064
|
|
|
|
18,150
|
|
Prepaid expenses
|
|
|
15,335
|
|
|
|
14,396
|
|
Other current assets
|
|
|
407
|
|
|
|
410
|
|
Total current assets
|
|
|
143,001
|
|
|
|
144,799
|
|
Restricted cash
|
|
|
7,978
|
|
|
|
8,232
|
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Rental equipment, net of accumulated depreciation of $292,356 and
$274,333 at March 31, 2015 and December 31, 2014, respectively
|
|
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1,654,834
|
|
|
|
1,564,777
|
|
Net investment in direct finance leases
|
|
|
76,104
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|
|
|
76,814
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Furniture, fixtures and equipment, net of accumulated depreciation
of $2,115 and $2,019 at March 31, 2015 and December 31, 2014,
respectively
|
|
|
852
|
|
|
|
945
|
|
Intangible assets, net of accumulated amortization of $4,726 and
$4,817 at March 31, 2015 and December 31, 2014, respectively
|
|
|
183
|
|
|
|
273
|
|
Total assets
|
|
$
|
1,882,952
|
|
|
$
|
1,795,840
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable
|
|
$
|
6,235
|
|
|
$
|
8,414
|
|
Accrued expenses and other current liabilities
|
|
|
5,320
|
|
|
|
9,029
|
|
Due to container investors
|
|
|
10,031
|
|
|
|
12,984
|
|
Unearned revenue
|
|
|
7,596
|
|
|
|
7,172
|
|
Current portion of debt
|
|
|
224,088
|
|
|
|
203,199
|
|
Current portion of capital lease obligations
|
|
|
239
|
|
|
|
1,015
|
|
Rental equipment payable
|
|
|
51,286
|
|
|
|
7,381
|
|
Total current liabilities
|
|
|
304,795
|
|
|
|
249,194
|
|
Debt
|
|
|
1,074,661
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|
|
|
1,058,754
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|
Deferred income tax liability
|
|
|
43,744
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|
|
|
43,419
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|
Capital lease obligations
|
|
|
-
|
|
|
|
1,568
|
|
Total liabilities
|
|
|
1,423,200
|
|
|
|
1,352,935
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
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Common stock: par value $.0001 per share; authorized 84,000,000
shares; issued and outstanding 21,142,521 and 20,788,277 shares at
March 31, 2015 and December 31, 2014, respectively
|
|
|
2
|
|
|
|
2
|
|
Additional paid-in capital
|
|
|
160,589
|
|
|
|
154,894
|
|
Accumulated other comprehensive loss
|
|
|
(8,096
|
)
|
|
|
(5,677
|
)
|
Retained earnings
|
|
|
306,439
|
|
|
|
292,897
|
|
Total CAI stockholders' equity
|
|
|
458,934
|
|
|
|
442,116
|
|
Non-controlling interest
|
|
|
818
|
|
|
|
789
|
|
Total stockholders' equity
|
|
|
459,752
|
|
|
|
442,905
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,882,952
|
|
|
$
|
1,795,840
|
|
|
CAI International, Inc.
|
Consolidated Statements of Income
|
(In thousands, except per share data)
|
(UNAUDITED)
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
|
2015
|
|
|
|
2014
|
|
Revenue
|
|
|
|
|
Rental revenue
|
|
$
|
54,883
|
|
|
$
|
50,684
|
|
Management fee revenue
|
|
|
1,257
|
|
|
|
1,525
|
|
Finance lease income
|
|
|
2,352
|
|
|
|
2,055
|
|
Total revenue
|
|
|
58,492
|
|
|
|
54,264
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
Depreciation of rental equipment
|
|
|
21,223
|
|
|
|
18,663
|
|
Amortization of intangible assets
|
|
|
84
|
|
|
|
99
|
|
Gain on disposition of used rental equipment
|
|
|
(357
|
)
|
|
|
(1,790
|
)
|
Storage, handling and other expenses
|
|
|
6,765
|
|
|
|
5,993
|
|
Marketing, general and administrative expenses
|
|
|
7,127
|
|
|
|
6,706
|
|
(Gain) loss on foreign exchange
|
|
|
(41
|
)
|
|
|
164
|
|
Total operating expenses
|
|
|
34,801
|
|
|
|
29,835
|
|
|
|
|
|
|
Operating income
|
|
|
23,691
|
|
|
|
24,429
|
|
|
|
|
|
|
Interest expense
|
|
|
8,781
|
|
|
|
8,795
|
|
Interest income
|
|
|
(3
|
)
|
|
|
(4
|
)
|
Net interest expense
|
|
|
8,778
|
|
|
|
8,791
|
|
|
|
|
|
|
Net income before income taxes and non-controlling interest
|
|
|
14,913
|
|
|
|
15,638
|
|
Income tax expense
|
|
|
1,342
|
|
|
|
1,407
|
|
|
|
|
|
|
Net income
|
|
|
13,571
|
|
|
|
14,231
|
|
Net (income) loss attributable to non-controlling interest
|
|
|
(29
|
)
|
|
|
40
|
|
|
|
|
|
|
Net income attributable to CAI common stockholders
|
|
$
|
13,542
|
|
|
$
|
14,271
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to CAI common stockholders
|
|
|
|
|
Basic
|
|
$
|
0.65
|
|
|
$
|
0.64
|
|
Diluted
|
|
$
|
0.64
|
|
|
$
|
0.63
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
Basic
|
|
|
20,903
|
|
|
|
22,213
|
|
Diluted
|
|
|
21,295
|
|
|
|
22,658
|
|
|
CAI International, Inc.
|
Consolidated Statements of Cash Flows
|
(In thousands)
|
(UNAUDITED)
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
|
2015
|
|
|
|
2014
|
|
Cash flows from operating activities
|
|
|
|
|
Net income
|
|
$
|
13,571
|
|
|
$
|
14,231
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
Depreciation
|
|
|
21,330
|
|
|
|
18,790
|
|
Amortization of debt issuance costs
|
|
|
692
|
|
|
|
687
|
|
Amortization of intangible assets
|
|
|
84
|
|
|
|
99
|
|
Stock-based compensation expense
|
|
|
512
|
|
|
|
409
|
|
Loss on foreign exchange
|
|
|
114
|
|
|
|
100
|
|
Gain on disposition of used rental equipment
|
|
|
(357
|
)
|
|
|
(1,790
|
)
|
Deferred income taxes
|
|
|
325
|
|
|
|
(2
|
)
|
Bad debt expense
|
|
|
104
|
|
|
|
-
|
|
Changes in other operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
|
6,219
|
|
|
|
(3,418
|
)
|
Prepaid expenses and other assets
|
|
|
25
|
|
|
|
(29
|
)
|
Accounts payable, accrued expenses and other current liabilities
|
|
|
(5,928
|
)
|
|
|
(2,119
|
)
|
Due to container investors
|
|
|
(2,953
|
)
|
|
|
(1,458
|
)
|
Unearned revenue
|
|
|
466
|
|
|
|
125
|
|
Net cash provided by operating activities
|
|
|
34,204
|
|
|
|
25,625
|
|
Cash flows from investing activities
|
|
|
|
|
Purchase of rental equipment
|
|
|
(88,332
|
)
|
|
|
(73,202
|
)
|
Net proceeds from disposition of used rental equipment
|
|
|
13,884
|
|
|
|
11,070
|
|
Purchase of furniture, fixtures and equipment
|
|
|
(15
|
)
|
|
|
(11
|
)
|
Receipt of principal payments from direct financing leases
|
|
|
5,154
|
|
|
|
3,346
|
|
Net cash used in investing activities
|
|
|
(69,309
|
)
|
|
|
(58,797
|
)
|
Cash flows from financing activities
|
|
|
|
|
Proceeds from debt
|
|
|
94,364
|
|
|
|
66,700
|
|
Principal payments on debt
|
|
|
(59,952
|
)
|
|
|
(39,592
|
)
|
Debt issuance costs
|
|
|
(1,654
|
)
|
|
|
-
|
|
Decrease in restricted cash
|
|
|
254
|
|
|
|
255
|
|
Exercise of stock options
|
|
|
4,374
|
|
|
|
28
|
|
Excess tax benefit from share-based compensation awards
|
|
|
810
|
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
38,196
|
|
|
|
27,391
|
|
Effect on cash of foreign currency translation
|
|
|
(252
|
)
|
|
|
95
|
|
Net increase (decrease) in cash
|
|
|
2,839
|
|
|
|
(5,686
|
)
|
Cash at beginning of the period
|
|
|
53,821
|
|
|
|
45,741
|
|
Cash at end of the period
|
|
$
|
56,660
|
|
|
$
|
40,055
|
|
|
CAI International, Inc.
|
Fleet Data
|
(UNAUDITED)
|
|
|
|
As of March 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
Owned container fleet in TEUs
|
|
967,649
|
|
|
882,665
|
|
Managed container fleet in TEUs
|
|
229,575
|
|
|
275,102
|
|
Total container fleet in TEUs
|
|
1,197,224
|
|
|
1,157,767
|
|
|
|
|
|
|
Owned container fleet in CEUs
|
|
998,166
|
|
|
924,234
|
|
Managed container fleet in CEUs
|
|
208,326
|
|
|
253,761
|
|
Total container fleet in CEUs
|
|
1,206,492
|
|
|
1,177,995
|
|
|
|
|
|
|
Owned railcar fleet in units
|
|
2,649
|
|
|
1,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2015
|
|
2014
|
Average Utilization
|
|
|
|
|
Container Fleet Utilization in TEUs
|
|
92.9
|
%
|
|
90.0
|
%
|
Container Fleet Utilization in CEUs
|
|
93.5
|
%
|
|
91.0
|
%
|
|
|
|
|
|
|
|
As of March 31,
|
|
|
2015
|
|
2014
|
Period Ending Utilization
|
|
|
|
|
Container Fleet Utilization in TEUs
|
|
92.8
|
%
|
|
89.7
|
%
|
Container Fleet Utilization in CEUs
|
|
93.5
|
%
|
|
90.7
|
%
|
|
|
|
|
|
|
|
Utilization is computed by dividing total units on lease, in CEUs (cost
equivalent units) or TEUs (twenty foot equivalent units), by the total
units in our fleet, in CEUs or TEUs, excluding new units not yet leased
and off-hire units designated for sale. CEU is a ratio used to convert
the actual number of containers in our fleet to a figure based on the
relative purchase prices of our various equipment types to that of a
standard 20 foot dry van container. For example, the CEU ratio for a
standard 40 foot dry van container is 1.6, and a 40 foot high cube
container is 1.7.
|
Reconciliation of GAAP Amounts to Non-GAAP Amounts
|
(In thousands, except per share data)
|
(UNAUDITED)
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
GAAP net income attributable to CAI common stockholders
|
|
$
|
13,542
|
|
$
|
14,271
|
Net interest expense
|
|
|
8,778
|
|
|
8,791
|
Depreciation
|
|
|
21,330
|
|
|
18,790
|
Amortization of intangible assets
|
|
|
84
|
|
|
99
|
Income tax expense
|
|
|
1,342
|
|
|
1,407
|
Non-GAAP EBITDA
|
|
|
45,076
|
|
|
43,358
|
Principal payments from direct finance leases
|
|
|
5,154
|
|
|
3,346
|
Non-GAAP adjusted EBITDA
|
|
|
50,230
|
|
|
46,704
|
|
|
|
|
|
|
|
EBITDA represents net income before interest, income taxes, depreciation
and amortization of intangible assets. Adjusted EBITDA represents EBITDA
plus principal payments from direct finance leases, less a non-recurring
net settlement received from a customer.
Conference Call
A conference call to discuss the financial results for the first quarter
of 2015 will be held on Thursday, April 30, 2015 at 5:00 p.m. ET. The
dial-in number for the teleconference is 1-888-398-8098; outside of the
U.S., call 1-707-287-9363. The call may be accessed live over the
internet (listen only) under the “Investors” tab of CAI’s website, www.capps.com,
by selecting “Q1 2015 Earnings Conference Call.” A webcast replay will
be available for 30 days on the “Investors” tab of our website.
Use of Non-GAAP Financial Measures
This press release contains non-GAAP EBITDA and non-GAAP adjusted
EBITDA, both of which are defined in the tables above. These measures
are not in accordance with, or an alternative for, generally accepted
accounting principles, or GAAP, and may be different from non-GAAP
financial measures used by other companies. We believe the presentation
of non-GAAP financial measures provides useful information to management
and investors regarding various financial and business trends relating
to our financial condition and results of operations, and that when GAAP
financial measures are viewed in conjunction with non-GAAP financial
measures, investors are provided with a more meaningful understanding of
our ongoing operating performance. Non-GAAP financial measures are not
intended to be considered in isolation or as a substitute for GAAP
financial measures. To the extent this release contains historical
non-GAAP financial measures, we have also provided a reconciliation to
the corresponding GAAP financial measures for comparative purposes.
About CAI International, Inc.
CAI is one of the world’s leading transportation finance and logistics
companies. As of March 31, 2015, CAI operated a worldwide fleet of
approximately 1,206,000 CEUs of containers through 16 offices located in
13 countries including the United States. CAI also owns a fleet of
railcars, which it leases within North America.
Forward-Looking Statements
This press release contains forward-looking statements regarding future
events and the future performance of CAI International, Inc. These
statements are forward looking statements within the meaning of the safe
harbor provisions of Section 21E of the Securities Exchange Act of 1934
and involve risks and uncertainties that could cause actual results of
operations and other performance measures to differ materially from
current expectations including, but not limited to, utilization rates,
expected economic conditions, expected growth of international trade,
availability of credit on commercially favorable terms or at all,
customer demand, container investment levels, container prices, lease
rates, increased competition, volatility in exchange rates, growth in
world trade and world container trade, the ability of the company to
convert letters of intent with its customers to binding contracts,
potential to sell the company’s securities to the public and others. CAI
refers you to the documents that it has filed with the Securities and
Exchange Commission, including its annual report on Form 10-K for the
year ended December 31, 2014 and its interim reports on Form 10-Q and
its reports on Form 8-K. These documents contain additional important
factors that could cause actual results to differ from current
expectations and from forward-looking statements contained in this press
release. Furthermore, CAI is under no obligation to (and expressly
disclaims any such obligation to) update or alter any of the
forward-looking statements contained in this press release whether as a
result of new information, future events or otherwise, unless required
by law.
CONTACT:
CAI International, Inc.
Tim Page, 415-788-0100
Chief
Financial Officer
tpage@capps.com
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