Segment Reporting

3 Months Ended

Mar. 31, 2015

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, 2014. 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 three months ended March 31, 2015 and 2014 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
Three Months Ended March 31,
2015
Rental revenues	$	26,408		$	22,111		$	16,983		$	—		$	65,502
Rental related services revenues		9,103			656			5,608			—			15,367
Sales and other revenues		3,373			5,327			307			312			9,319
Total revenues		38,884			28,094			22,898			312			90,188
Depreciation of rental equipment		4,561			10,152			3,969			—			18,682
Gross profit		15,704			11,310			12,007			66			39,087
Selling and administrative expenses		11,356			6,118			6,918			820			25,212
Income (loss) from operations		4,348			5,192			5,089			(754	)		13,875
Interest expense (income) allocation		1,253			529			657			(48	)		2,391
Income (loss) before provision for income taxes		3,095			4,495			4,432			(706	)		11,316
Rental equipment acquisitions		16,359			16,230			2,665			—			35,254
Accounts receivable, net (period end)		45,818			23,095			18,316			2,132			89,361
Rental equipment, at cost (period end)		678,990			269,575			305,751			—			1,254,316
Rental equipment, net book value (period end)		484,598			109,887			244,593			—			839,078
Utilization (period end) 2		74.5	%		58.6	%		61.1	%
Average utilization 2		74.2	%		59.9	%		61.1	%

2014
Rental revenues	$	21,533		$	23,760		$	17,137		$	—		$	62,430
Rental related services revenues		7,317			722			5,473			—			13,512
Sales and other revenues		4,790			5,159			564			1,105			11,618
Total revenues		33,640			29,641			23,174			1,105			87,560
Depreciation of rental equipment		3,831			10,391			3,675			—			17,897
Gross profit		12,704			13,075			12,440			419			38,638
Selling and administrative expenses		9,740			6,037			6,896			738			23,411
Income (loss) from operations		2,964			7,038			5,544			(319	)		15,227
Interest expense (income) allocation		1,103			523			623			(46	)		2,203
Income (loss) before provision for income taxes		1,861			6,427			4,921			(273	)		12,936
Rental equipment acquisitions		16,825			8,375			5,195			—			30,395
Accounts receivable, net (period end)		36,512			23,731			21,430			1,398			83,071
Rental equipment, at cost (period end)		607,616			263,545			288,641			—			1,159,802
Rental equipment, net book value (period end)		426,983			106,164			242,728			—			775,875
Utilization (period end) 2		69.4	%		56.4	%		64.5	%
Average utilization 2		69.9	%		56.8	%		61.0	%

1. Gross Enviroplex sales revenues were $316 and $1,105 for the three months ended March 31, 2015 and 2014, respectively. In 2015, there were inter-segment sales to Mobile Modular of $4, which have been eliminated in consolidation. There were no inter-segment sales to Mobile Modular in 2014 which required elimination.

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 three months ended March 31, 2015 and 2014. Revenues from foreign country customers accounted for 6% of the Company’s total revenues for the same periods.