Segment Reporting

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Reporting

NOTE 5. SEGMENT REPORTING

The Company’s four reportable segments are (1) its modular building rental division (“Mobile Modular”); (2) its electronic test equipment rental division (“TRS-RenTelco”); (3) its containment solutions for the storage of hazardous and non-hazardous liquids and solids division (“Adler Tanks”); and (4) its classroom manufacturing division selling modular buildings used primarily as classrooms in California (“Enviroplex”). The operations of each of these segments are described in Part I – Item 1, “Business,” and the accounting policies of the segments are described in “Note 2 – Significant Accounting Policies” in the Company’s annual report on Form 10-K for the year ended December 31, 2012. Management focuses on several key measures to evaluate and assess each segment’s performance, including rental revenue growth, gross profit, income from operations and income before provision for income taxes. Excluding interest expense, allocations of revenue and expense not directly associated with one of these segments are generally allocated to Mobile Modular, TRS-RenTelco and Adler Tanks based on their pro-rata share of direct revenues. Interest expense is allocated among Mobile Modular, TRS-RenTelco and Adler Tanks based on their pro-rata share of average rental equipment at cost, intangible assets, accounts receivable, deferred income and customer security deposits. The Company does not report total assets by business segment. Summarized financial information for the nine months ended September 30, 2013 and 2012 for the Company’s reportable segments is shown in the following table:

(dollar amounts in thousands)	Mobile Modular			TRS- RenTelco			Adler Tanks			Enviroplex 1			Consolidated
Nine Months Ended September 30,
2013
Rental Revenues	$	60,367		$	75,897		$	53,321		$	—		$	189,585
Rental Related Services Revenues		21,009			2,285			16,070			—			39,364
Sales and Other Revenues		16,806			21,516			1,509			15,926			55,757
Total Revenues		98,182			99,698			70,900			15,926			284,706
Depreciation of Rental Equipment		10,740			29,538			10,183			—			50,461
Gross Profit		34,881			46,225			39,442			3,806			124,354
Selling and Administrative Expenses		26,809			18,123			18,475			2,406			65,813
Income from Operations		8,072			28,102			20,967			1,400			58,541
Interest Expense (Income) Allocation		3,238			1,619			1,799			(148	)		6,508
Income before Provision for Income Taxes		4,834			26,483			19,168			1,548			52,033
Rental Equipment Acquisitions		36,463			40,444			24,504			—			101,411
Accounts Receivable, net (period end)		41,818			24,454			23,792			2,755			92,819
Rental Equipment, at cost (period end)		577,898			270,164			277,972			—			1,126,034
Rental Equipment, net book value (period end)		404,045			110,657			239,108			—			753,810
Utilization (period end) 2		70.4	%		62.3	%		64.6	%
Average Utilization 2		67.6	%		63.3	%		65.7	%
2012
Rental Revenues	$	59,414		$	74,796		$	49,117		$	—		$	183,327
Rental Related Services Revenues		19,427			2,831			12,445			—			34,703
Sales and Other Revenues		10,294			17,401			2,493			13,906			44,094
Total Revenues		89,135			95,028			64,055			13,906			262,124
Depreciation of Rental Equipment		10,437			28,280			8,519			—			47,236
Gross Profit		37,659			45,202			38,552			2,842			124,255
Selling and Administrative Expenses		25,317			19,315			15,347			3,393			63,372
Income (Loss) from Operations		12,342			25,887			23,205			(551	)		60,883
Interest Expense (Income) Allocation		3,432			1,800			1,734			(99	)		6,867
Income (Loss) before Provision for Income Taxes		8,910			24,087			21,471			(452	)		54,016
Rental Equipment Acquisitions		16,787			41,082			47,288			—			105,157
Accounts Receivable, net (period end)		46,939			22,278			23,036			8,795			101,048
Rental Equipment, at cost (period end)		549,225			274,300			246,228			—			1,069,753
Rental Equipment, net book value (period end)		385,430			113,574			220,632			—			719,636
Utilization (period end) 2		66.6	%		64.2	%		69.4	%
Average Utilization 2		66.3	%		65.8	%		72.0	%

1. Gross Enviroplex sales revenues were $15,930 and $14,320 for the nine months ended September 30, 2013 and 2012, respectively, which includes inter-segment sales to Mobile Modular of $4 and $414, respectively, which have been eliminated in consolidation.

2. Utilization is calculated each month by dividing the cost of rental equipment on rent by the total cost of rental equipment excluding accessory equipment and for Mobile Modular and Adler Tanks excluding new equipment inventory. The Average Utilization for the period is calculated using the average costs of rental equipment.

No single customer accounted for more than 10% of total revenues for the nine months ended September 30, 2013 and 2012. Revenues from foreign country customers accounted for 6% and 10% of the Company’s total revenues, respectively, for the same periods.