Saturday, July 09, 2011
Textainer Group Holdings (TGH)
Raised $400 million in fixed rate asset backed notes. Not registered. Cash to be used to pay off some debt plus unspecified "corporate purposes".
CEO is retiring.
First thing I notice is that while CAI's rental equipment assets are about 90% of total assets, TGH's rental equipment is only 80% of total assets. Leverage looks about the same.
TGH's container assets grew 8% yoy.
Most of revenues is from lease rental with some mgmt fees and gain on sale of containers.
Revenue is $91 million, which is less than TAL's $125 million. I'm surprised since TGH has the largest fleet size. TGH revenues are 5.8% of net container assets compared to 5.1% for TAL and 4.2% for CAI. (Note: this is for the quarter and only useful in comparing with other companies for the same seasonal quarter).
Gain on sale of containers was 7% of revenues, in between CAI and TAL.
TGH had a loss on interest rate swaps. TAL had a gain. Different sides.
58% operating margins. Higher than TAL, lower than CAI.
46% net margin. Fairly close to CAI (TAL was only 26%).
Watch out: A non-controlling interest owns part of the company, so converting between per-share numbers and overall numbers is not straight forward.
Shares are selling for about 40 times Q1 earnings (TAL and CAI are selling for less: what's the reason?)
Obviously expanding faster than depreciation. Financing the cost with secured debt.
Like CAI, depreciation is big.
1.5 million containers. 2.4 million TEU.
98.2%utilization vs 90.1% a year ago.
Revnues: (millions of $)
Wow, their 2010 was a big jump. Did they grab market share during the downturn? If so, it would indicate a solid business and mgmt.
Net income (overall, including minority interest):
Solid, compared to TAL and CAI. Earned $2.43 per diluted share for the year.
Definitely needs more work, but this might be a better company than TAL and CAI.