WillScot Mobile Mini Holdings Corp. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022; the filing also reports fourth-quarter results. The registrant’s legal name in the filing is WillScot Mobile Mini Holdings Corp. The company provides modular workspace and portable storage solutions, primarily through leasing, across North America.
Business context and portfolio changes
The company operated approximately 240 branches and served more than 85,000 customers. At year-end, its fleet included over 364,000 units; approximately 103,000 modular units and 176,000 portable storage units were on rent. It reported two continuing segments: Modular and Storage.
WillScot sold its Tank and Pump segment on September 30, 2022, for approximately $322 million. It completed the sale of UK Storage Solutions on January 31, 2023; the transaction’s cash consideration was reported as $418.1 million. Both businesses are presented as discontinued operations. During 2022, the company also acquired assets and liabilities of 13 smaller businesses for $220.6 million in cash.
Financial performance and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue, continuing operations | $2,142.6 million | $1,673.0 million |
| Gross profit / gross margin | $1,135.5 million / 53.0% | $844.7 million / 50.5% |
| Operating income | $511.5 million | $300.4 million |
| Income from continuing operations | $276.3 million | $114.9 million |
| Net income, including discontinued operations | $339.5 million | $160.1 million |
| Adjusted EBITDA, continuing operations (non-GAAP) | $883.9 million; 41.3% margin | $649.6 million; 38.8% margin |
| Cash from operating activities | $744.7 million | $539.9 million |
| Free cash flow (non-GAAP) | $330.3 million | $303.0 million |
| Net capex (non-GAAP) | $414.3 million | $236.9 million |
Revenue rose 28.1%; leasing revenue grew 29.5%, while delivery and installation revenue grew 33.6%. Average monthly rental rates increased 18.3% for modular space to $913 and 24.7% for portable storage to $192. Portable storage utilization improved to 86.8% from 80.1%; modular utilization edged down to 68.5% from 69.2%. Management attributed growth to pricing, VAPS, higher rental volumes, acquisitions and strong storage demand. Acquisitions contributed an estimated $38 million of revenue.
Fourth quarter: Revenue was $590.6 million, gross profit $328.3 million, continuing-operations Adjusted EBITDA $268.1 million and net income $86.4 million. Net income was lower than in Q3, which included a $34.0 million gain on the Tank and Pump sale.
At December 31, continuing-operations cash was $7.4 million. Debt carrying value was $3.076 billion, including $1.988 billion under the ABL Facility, secured notes and finance leases; reported principal debt including finance leases was approximately $3.121 billion. ABL availability was approximately $1.0 billion. The company reported a 3.3x net-debt-to-Adjusted-EBITDA ratio using a measure that includes UK Storage Solutions discontinued-operations EBITDA. It repurchased $756.9 million of shares and equivalents during 2022; $630.8 million remained under its $1.0 billion authorization at year-end. No cash dividend had been paid.
Material changes versus prior year
- Revenue, gross profit and continuing-operations income increased substantially; gross margin expanded 2.5 percentage points and Adjusted EBITDA margin increased 2.5 percentage points.
- Operating cash flow increased $204.8 million, while free cash flow rose 9.0% despite higher fleet investment. Net capex increased about $177.4 million.
- Interest expense rose 25.7% to $146.3 million, reflecting higher average borrowings and interest rates. Year-end debt carrying value increased about $391.2 million.
- SG&A increased 22.2% to $567.2 million, including higher employee, professional-fee and growth-related costs.
- Total net income includes discontinued operations and a $35.5 million gain on discontinued-operation sales; it is not directly comparable to continuing-operations income alone.
Outlook, commentary and risks
The filing provides no quantified forward guidance. Management expressed confidence in organic growth, citing infrastructure spending, onshoring and reshoring, pricing, VAPS penetration and cross-selling. It said inflation raised building-material, labor, transportation and fuel costs, but pricing and scale supported margin improvement; it had not experienced significant supply-chain issues to date. In January 2023, the company entered into interest-rate swaps covering $750 million of variable-rate debt, with a weighted-average fixed rate of 3.44% through June 2027.
Key risks include economic and end-market cyclicality, competition and pricing pressure, customer credit and equipment recovery, labor and input-cost inflation, supplier dependence, acquisitions and integration, cybersecurity and systems disruption, environmental and regulatory obligations, foreign exchange exposure, and substantial indebtedness with variable-rate exposure and restrictive covenants. The allowance for credit losses was $57.0 million, or 12.2% of gross trade receivables. The auditor issued unqualified opinions on the financial statements and internal controls; the allowance for credit losses was identified as a critical audit matter. Ordinary-course legal proceedings were not expected by management to have a material adverse effect, though outcomes remain uncertain.
Important facts for investors to verify
- Reconcile reported revenue and earnings to continuing operations versus discontinued operations, including the Tank and Pump disposal gain and the 2023 UK sale proceeds and gain.
- Assess how much rental growth came from organic demand, acquisitions, segment reclassification and pricing; monitor utilization and rate trends by segment.
- Review free cash flow against fleet investment, share repurchases, acquisition spending and debt reduction; note that free cash flow and Adjusted EBITDA are non-GAAP measures.
- Confirm debt principal, carrying value, ABL borrowing-base availability, interest-rate exposure, covenant headroom and upcoming maturities.
- Monitor receivables aging, credit-loss provisions and customer collections, as well as progress integrating acquisitions and the consolidated CRM system.