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<p type = "text" content = "General Finance Corp (NASDAQ: GFN)
Q2 2019 Earnings Conference Call
February 11, 2019, 8:30 am ET"data-reactid =" 23 ">General Finance Corp (NASDAQ: GFN)
Q2 2019 Earnings Conference Call
February 11, 2019, 8:30 am ET

Welcome to the General Finance Corporation results teleconference for the second quarter ended December 31, 2018. This conference call was convened today at the company's headquarters in Pasadena, California, by Mr. Jody Miller, President and Chief Executive Officer. chief executive officer; and Mr. Charles Barrantes, Executive Vice President and Chief Financial Officer. Today's call is being recorded and will be replayable from 2:30 pm Eastern Time. At this point, all participants have been placed in listening mode only and the floor will be open for your questions after the presentation. (Operator instructions).

It is now with pleasure that I give the floor to Mr. Chris Wilson, Vice-President, General Counsel, Finance and Secretary of the Société générale des finances. Go ahead, Mr. Wilson.

<p type = "text" content = "Christopher A. WilsonVice President, General Counsel and Secretary"data-reactid =" 33 ">Christopher A. WilsonVice President, General Counsel and Secretary

Thank you, operator. Before I start today, I would like to remind you that this teleconference may contain certain forward-looking statements. These forward-looking statements include, but are not limited to, our opinion on future financial and operating results; competitive pressures; rising interest rates on our floating rate debt; our ability to raise capital or borrow additional funds; the availability of sufficiently qualified employees to staff our businesses; changes in the Australian, New Zealand or Canadian dollar against the US dollar; regulatory changes; customer failures or insolvencies; litigation; the acquisition of companies that do not work as planned or that we find it difficult to integrate or control; our ability to ensure adequate product levels to meet customer demand; our ability to provide adequate supplies for our manufacturing operations; interruptions of work; unfavorable resolution of any contract or other conflict with customers; declining demand for our products and services from key industries such as the Australian construction and transportation industries or the US construction, oil and gas industries, or total or partial cancellation of goodwill and intangible assets.

These risks and uncertainties could cause actual results to differ materially from those described in our forward-looking statements. We believe that the expectations expressed in our forward-looking statements are reasonable, but there can be no assurance that such expectations will prove to be correct. For more details on these risks, please refer to the Risk Factors section of our periodic reports filed with the SEC and posted on our website at www.generalfinance.com. These forward-looking statements represent the Company's judgment to date and General Finance Corporation disclaims any intention or obligation to update such statements.

At this conference call, we will also discuss certain non-US GAAP financial measures, such as Adjusted EBITDA. A reconciliation of how we define and obtain Adjusted EBITDA is included in our earnings release and will be included in our quarterly report on Form 10-Q.

And now, I'm making the call to Jody Miller, President and CEO. Jody, go ahead please.

<p type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President"data-reactid =" 38 ">Jody E. MillerDirector, Chief Executive Officer and President

Thank you Chris. Good morning and thank you for joining us today for our second quarter 2019 fiscal year conference call. I will begin with a brief discussion of our activities and then our CFO, Chuck Barrantes, will provide a financial overview and our outlook for the remainder of the year. After his remarks, we will open the conference for questions.

We continue to be extremely satisfied with our strong operational and financial performance. The strong momentum recorded in the first quarter continued in the second quarter, during which we recorded our highest quarterly level of revenues and adjusted EBITDA in the company's history. We also achieved a significant milestone with the opening of our 100th branch during the quarter. To put this in perspective, we have expanded our branch network, with an annual compound growth rate of 11% over the last five years. This is the result of our long-term strategy of expanding our geographic footprint by combining cost-effective container-based acquisitions with openings in Greenfield. We are also closing our 100,000 units in our rental fleet, which has seen similar growth over the past five years.

Now let's go to our geographic sites. Our North American leasing business continues to experience strong demand across all sales markets. Total revenues increased 25% in the second quarter compared to the same period last year, driven by both higher revenue from sales and rentals. Sales revenue increased 27% in the quarter, mainly due to two large sales in the industrial and education sectors, which contributed approximately $ 2 million to the increase of 3, $ 6 million. The remaining increase was evenly distributed across all sectors.

Leasing revenues increased 24%, driven by unit growth, higher average lease rates and increased fleet utilization across our product lines during the quarter. We are very proud of these exceptional results. Our core portable storage also continues to meet the highest expectations, with consistent execution and widespread demand across most of our end markets.

Demand for our ground storage continued to show very strong demand, as these two products generated a combined increase in rental income from one year to the other by 30%, of which more than half was organic growth. Taking into account all of Pac-Van's product lines, organic growth in rental income was 17% for the quarter and 18% since the beginning of the year.

Our team continues to do a great job in executing its business plan, including taking various initiatives such as our national accounts program, online ordering capabilities and our recent introduction of PV 3 Safety Containers. We are particularly excited about this innovative new product, which offers the industry's only emergency exit feature, as well as an enhanced option to include multi-level solar lighting.

Pac-Van continues to enjoy an excellent reputation among its customers and has again posted a score of 84 for net promoters globally, over the last 12 months. In addition to organic growth, we remain focused on building the Pac-Van brand in North America by geographically developing our portable storage container business, particularly in adjacent markets.

During the second quarter, we completed an acquisition in New Hampshire, reinforcing our presence in the New England region. We also opened a Greenfield site in Tampa, Florida, adding our fourth branch in Florida. We continue to serve just over half of the top 100 MSAs in the US and our portfolio of acquisitions remains healthy.

Our Liquid Container business in North America once again had a very good quarter, generating rental revenue year-over-year and adjusted EBITDA growth of 37% and 57% respectively. While the oil and gas production activity in the Permian and Eagle Ford basins remained healthy, the rise in oil price volatility during the quarter prompted the caution of some of our customers. As a result, the use of the fleet declined slightly.

Our manufacturing operations in North America recorded a 29% increase in our sales to external customers and for the fifth consecutive quarter posted positive autonomous EBITDA. This continued improvement is due to increased demand, particularly from tanks and other steel related products.

Let's move on to our Asia-Pacific region. Our Asia-Pacific region continued its positive momentum, recording rental revenue growth of 9% in the second quarter in local currency, marking its ninth increase over the last 10 quarters. Sales revenue decreased from the prior year due to two large unrealized sales in the second quarter of last year that were not repeated this year. Excluding the impact of these two transactions, the turnover would have increased by 30% in local currency.

Total reported operating income for the quarter in US dollars was affected by the approximately 7% decline in the average Australian dollar exchange rate between the periods. The increase in oil leasing revenues was spread over almost all markets, with significant increases in the construction, consumer and industrial sectors. This growth is mainly due to the increase in the average number of rented dwellings and the rise in average rental rates.

Our team remains focused on strengthening its market leadership position in the region through a combination of organic growth, Greenfield openings and, to some extent, accretive acquisitions. During the quarter, we opened an additional site in Victoria, bringing our number of branches in Asia Pacific to 37.

In conclusion, we continue to see organic growth and expansion opportunities in North America, as well as the ability to strengthen our market leadership in the Asia Pacific region. As always, we maintain a discipline in our capital allocation, our performance since the beginning of the year positions us well to exceed our goals for this year, which also offers us an optimism about the future. Our dedicated employees continue to implement our proven business strategy and dedication to the company has led to our outstanding and record financial performance.

I will now go to Chuck Barrantes for his financial analysis and outlook for the rest of the fiscal year.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Charles E. BarrantesExecutive Vice President and Chief Financial Officer"data-reactid =" 58 ">Charles E. BarrantesExecutive Vice President and Chief Financial Officer

Thanks Jody. We will soon be filing our annual report on Form 10-Q, at which time the document will be available on both the SEC's EDGAR filing system and on our website. And I encourage investors and other interested parties to read it because it contains a significant amount of information about our company, which we will discuss in part today.

Let's move on to the financial results of the second quarter of our fiscal year. Total revenue amounted to $ 98 million in the second quarter of fiscal 2019, compared to $ 92.1 million in the second quarter of fiscal 2018, an increase of 6 %. Rental income was $ 63.5 million, an increase of approximately 18% from the prior year quarter. They accounted for 67% of total non-manufacturing revenues in the quarter, compared with 60% in the second quarter of fiscal 2018. Non-manufacturing sales revenue was $ 34.5 million. during the quarter, down from $ 38.1 million in the second quarter last year.

For our North American leasing business, revenues for the second quarter were $ 63.9 million compared to $ 51.1 million for the same period last year, an increase of 25%. Increases were recorded in all sectors, but mainly in the oil and gas, trade and construction sectors. Revenues from our North American manufacturing operations were $ 3.6 million in the second quarter, including intercompany sales of $ 946,000 to our North American leasing business. This comparison with total sales of $ 3.5 million for the same period last year, including intercompany sales of $ 1.4 million. As Jody has mentioned, our manufacturing activities have resulted in increased demand for special tanks and other steel-related products, particularly chassis.

In Asia Pacific, revenue from leasing activities for the second quarter was $ 31.4 million compared to $ 38.9 million for the same period last year, a decrease of 19%. The decline in revenue was primarily from the utility and transportation segments, with two significant sales totaling $ 10.5 million, which occurred in the second quarter of fiscal 2018, were not repeated this year. year. Excluding the impact of these two large sales, sales would have increased by 18%, mainly due to the increase in the moving and construction and storage sectors. As Jody mentioned, the decline of about 7% of the Australian dollar against the US dollar between the periods had a negative impact on the total products.

Rental income increased 2% year-over-year and 9% in local currency, mainly due to higher construction, consumer and industrial sectors. Consolidated Adjusted EBITDA was $ 29.7 million for the quarter, compared to $ 25.2 million for the prior year quarter, an increase of 18%. Adjusted EBITDA margin, as a percentage of total revenue, increased by 30% from 27% in the second quarter of fiscal 2018. This was the eighth consecutive year – excuse me from the growth in adjusted EBITDA by compared to the previous year. For the first time in the company's history, we surpassed adjusted EBITDA by $ 100 million over 12 months.

In North America, Adjusted EBITDA from our leasing operations was $ 22 million in the second quarter compared to $ 16 million in the same quarter last year, an increase of 38% . Adjusted EBITDA at Pac-Van was $ 15.4 million, up 32% over the prior year, and adjusted Lone Star EBITDA was $ 6.6 million. dollars, up 57% from the previous year. Adjusted EBITDA from our manufacturing operations on an arm's length basis was $ 228,000 for the quarter, compared to $ 73,000 for the second quarter of last year.

Asia Pacific's adjusted EBITDA for the second quarter was $ 8.6 million, compared with $ 10.2 million for the same period last year. In local currency, Adjusted EBITDA decreased by approximately 9% due to the absence of the two large sales recorded in the second quarter of last year. Interest expense for the second quarter was $ 8.9 million, down $ 0.5 million from the same period last year. This decrease is mainly attributable to lower interest expense of $ 1.5 million between periods in the Asia-Pacific region due to lower average borrowings or a lower weighted average interest rate of 8.9%. the second quarter of fiscal year 19, compared to 9.9% for the same period last year. a year ago and a weaker Australian dollar.

In North America, interest expense increased by $ 1 million compared to the second quarter of 2018, primarily due to a weighted average interest rate higher by 7.2% compared to 5 , 9% last year, somewhat offset by a reduction in average debt between periods. The net loss attributable to common shareholders in the second quarter was $ 5.1 million, or $ 0.17 per diluted share, compared to a net loss of $ 2.1 million. or $ 0.08 per share in the prior year quarter. These expenses included non-cash charges of $ 9.3 million and $ 1.7 million in fiscal 2019 and 18, respectively, for the valuation change of the stand-alone bifurcated derivatives of our Asia Pacific convertible note. Both periods include $ 922,000 for dividends paid on our preferred shares. For the first six months of fiscal 2019, we generated free cash flow before fleet activity of $ 30.1 million, compared with $ 18 million in the same quarter last year, an increase of 67%.

Let's move on to our record now. At December 31, the company had a net leverage ratio of four times over the last 12 months, our lowest level in four years. The reduction in debt is due to a combination of factors, including the forced conversion of the convertible at Royal Wolf and, of course, our strong financial performance. In addition, during the quarter, we repaid the entire portion of the North American credit facility allocated to FILO. We replaced this higher cost debt with lower-cost revolver loans related to the credit facility, which we also modified and expanded, thereby freeing up additional borrowing capacity.

Turning now to our overall outlook for the remainder of fiscal 2019, based on our strong second quarter operating results and positive outlook, we are increasing our guidance for fiscal year 2019. So many exchange rates, the Australian dollar the US dollar averages $ 0.71 for the rest of the rest of the year. We now expect consolidated revenues for fiscal 2019 to be in the range of $ 270 million to $ 290 million, and consolidated Adjusted EBITDA to increase by 20% to 25% between fiscal year 2019 and 2018. This outlook is consider the impact of any additional acquisition that may occur for the remainder of the year.

This concludes now the comments we have prepared, I would like to return the call to the operator for the question-and-answer session.

Questions and answers:

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Operator"data-reactid =" 71 ">Operator

Thank you. (Operator Instructions) Your first question comes from the Brent Thielman line with DA Davidson.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brent ThielmanD. A. Davidson & Co – Analyst"data-reactid =" 73 ">Brent ThielmanD. A. Davidson & Co – Analyst

Thank you hello.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President"data-reactid =" 75 ">Jody E. MillerDirector, Chief Executive Officer and President

Hello.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Charles E. BarrantesExecutive Vice President and Chief Financial Officer"data-reactid =" 77 ">Charles E. BarrantesExecutive Vice President and Chief Financial Officer

Hello, Brent.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brent ThielmanD. A. Davidson & Co – Analyst"data-reactid =" 79 ">Brent ThielmanD. A. Davidson & Co – Analyst

Hey, Jody. It appears that liquids containment activities are immune to fluctuations in commodity prices during the quarter in which you talked about certain rates of utilization of the impact. Has this deepened or stabilized since the end of the quarter? Maybe just an update on where the market is it?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President"data-reactid =" 81 ">Jody E. MillerDirector, Chief Executive Officer and President

Yeah, I think it's stabilized, to be honest, a lot of the change we've seen when consolidating our customer base, it took a few months to solve this problem. And there is usually always a little seasonal slowdown after Thanksgiving that starts in the first calendar quarter, where things are sort of caught up. But if you look at the number of platforms and the activity, I think it's pretty stable and our levels come back gradually.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brent ThielmanD. A. Davidson & Co – Analyst"data-reactid =" 83 ">Brent ThielmanD. A. Davidson & Co – Analyst

D & # 39; agreement. And then, I suppose that apart from oil and gas, it seems that most engines purr here at Pac-Van. Can you tell us about the best markets for you all over the country? And we see special pockets of strength.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President"data-reactid =" 85 ">Jody E. MillerDirector, Chief Executive Officer and President

Yeah, I would say, to be honest, it's almost universal. I think the team did a good job with the strategy and the business plan and we really saw good trends across the United States. There are not really high points, but also high points. and the team did a good job in the execution and we continue to see very positive prospects for the portable storage and the office. I think some of our new products have also escaped the increase.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brent ThielmanD. A. Davidson & Co – Analyst"data-reactid =" 87 ">Brent ThielmanD. A. Davidson & Co – Analyst

D & # 39; agreement. And then, I guess my last question is Jody, just in Asia-Pacific. I think you think of perspectives and advice. How confident are you that you can somehow maintain a decent income growth, call it local currency? Does the Australian economy seem to be suffering from the slowdown in the Chinese economy here?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President"data-reactid =" 89 ">Jody E. MillerDirector, Chief Executive Officer and President

Yeah. We have not seen much and there are important infrastructure projects that should also be useful in the coming quarters. But the key to success around these markets is tower cranes and a huge amount of construction activity. As containers are very well accepted in this market, the demand for container use is very strong in all sectors, in almost all sectors. So we feel that it will be quite consistent. We think there are advantages to construction, the infrastructure should help us. We are therefore rather confident that the (inaudible) maintain their current trajectory.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brent ThielmanD. A. Davidson & Co – Analyst"data-reactid =" 91 ">Brent ThielmanD. A. Davidson & Co – Analyst

D & # 39; agreement. Thank you.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President"data-reactid =" 93 ">Jody E. MillerDirector, Chief Executive Officer and President

Yeah.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Operator"data-reactid =" 95 ">Operator

Your next question comes from Scott Schneeberger's line with Oppenheimer.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Scott SchneebergerOppenheimer & Co. Inc. – Analyst"data-reactid =" 97 ">Scott SchneebergerOppenheimer & Co. Inc. – Analyst

Thank you. Hey, hello guys.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President"data-reactid =" 99 ">Jody E. MillerDirector, Chief Executive Officer and President

Hello,

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Scott SchneebergerOppenheimer & Co. Inc. – Analyst"data-reactid =" 101 ">Scott SchneebergerOppenheimer & Co. Inc. – Analyst

Chuck, I suppose, if we could start, what would you say as the main factors of the increase in forecasts and prospects in some parts of the strong quarter, it seems, that things have really improved in all areas. But, I want to hear, somehow (inaudible) what you think are the main drivers of what pushed you higher for the year?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Charles E. BarrantesExecutive Vice President and Chief Financial Officer"data-reactid =" 103 ">Charles E. BarrantesExecutive Vice President and Chief Financial Officer

Well, I certainly think in North America, I think the economy is solid. We have seen growth across all sectors, particularly in the product line. Our ground offices are doing very well. And I did say in the last few quarters that there was a lot more downwind and headwinds. We are therefore rather optimistic about our direction. But I would usually say a strong economy.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President"data-reactid =" 105 ">Jody E. MillerDirector, Chief Executive Officer and President

Yeah. Scott C is Jody. I would just say that if you look at all of our product lines, they're doing very well, from the GLO and the storage side, that all segments are doing very well and have a positive trend.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Scott SchneebergerOppenheimer & Co. Inc. – Analyst"data-reactid =" 107 ">Scott SchneebergerOppenheimer & Co. Inc. – Analyst

Big thanks. And at Pac-Van, I have some questions to ask you. Obviously, GLO has been very successful. Do you think we are going to witness an industry change? Is it fair that the GLOs are emerging and that they will therefore be a complement to what is happening in the industry? Or could they eat other products over time?

And secondly, Jody, could you talk a bit about what you saw with the seasonal rentals for containers and the nature of this competitive environment? Thank you.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President"data-reactid =" 110 ">Jody E. MillerDirector, Chief Executive Officer and President

Sure. Thank you. Yeah, I think GLOs are gaining popularity, because of the ease of installation, where they can settle in the ground, especially for the subcontractors, they can be moved very easily, they do not need to be bypassed and anchored this stuff. So I think the GLO product itself is becoming more and more popular and more and more used. The mobile offices, we saw no drop there, they are very strong and continue to work very well. Plus, these are just two kinds of separate apps, but I think there is a trend on the GLO side that is becoming more and more popular. And then regarding your seasonal question. We have seen an increase in seasonal activities this year. It was sort of back to what I would say a standard level. This is a nice increase for the year about $ 400,000, nothing too drastic. But, there is always a nice increase on the retail side.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brent ThielmanD. A. Davidson & Co – Analyst"data-reactid =" 112 ">Brent ThielmanD. A. Davidson & Co – Analyst

Thank you. And just to follow that, specifically to the season. How are prices in this category for you? And then, by taking a step back, how are prices global in the Pac-Van segment? Thank you.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President"data-reactid =" 114 ">Jody E. MillerDirector, Chief Executive Officer and President

We continue to see price increases in all areas. We have probably seen slightly better prices for modular mobile systems. I think the consolidation industry has been good and it is helping too. So it was very positive too. But the storage capacity of the GLO side has also increased.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brent ThielmanD. A. Davidson & Co – Analyst"data-reactid =" 116 ">Brent ThielmanD. A. Davidson & Co – Analyst

Thank you. And then just to go to – to Lone Star. The same kind of question, what do you see in the prices, you already have a little touch at the break from use. What is the pricing environment? Like, as we had a very good run in the oil and gas prices, and then had a little hiccups. Où se situent les prix et que voyez-vous pour les prochains trimestres?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerAdministrateur, chef de la direction et président"data-reactid =" 118 ">Jody E. MillerAdministrateur, chef de la direction et président

Ouais, je dirais que c&#39;est plus stabilisé maintenant. Nous obtenions – réussissant assez bien à relever les prix tous les trimestres. Et en revenant en arrière, certains clients ont vu leurs prix augmenter de deux à trois au cours des 18 derniers mois, le marché continuant d’être plus positif. Je dirais que la baisse des prix du pétrole au début du dernier trimestre nous a mis dans une situation où il ne faut pas demander. Nous avons donc constaté que les prix se stabilisaient, que le pétrole et le gaz continuaient à être positifs, puis nous reviendrions en arrière et demanderions de nouvelles augmentations de prix. Mais pour le moment, je dirais que les prix sont stabilisés.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brent ThielmanD. A. Davidson & Co – Analyste"data-reactid =" 120 ">Brent ThielmanD. A. Davidson & Co – Analyste

D & # 39; agreement. Thank you. Je vous remercie de répondre à toutes les questions.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerAdministrateur, chef de la direction et président"data-reactid =" 122 ">Jody E. MillerAdministrateur, chef de la direction et président

Tu paries. Merci Scott.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Opérateur"data-reactid =" 124 ">Opérateur

Votre prochaine question vient de l&#39;investisseur privé, Luis Fernandez. (ph)

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerAdministrateur, chef de la direction et président"data-reactid =" 126 ">Jody E. MillerAdministrateur, chef de la direction et président

Merci, Luis

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezInvestisseur privé – Analyste"data-reactid =" 128 ">Luis FernandezInvestisseur privé – Analyste

Yes. Hello Hello

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerAdministrateur, chef de la direction et président"data-reactid =" 130 ">Jody E. MillerAdministrateur, chef de la direction et président

Salut Luis.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezInvestisseur privé – Analyste"data-reactid =" 132 ">Luis FernandezInvestisseur privé – Analyste

Hello. D & # 39; agreement. Ma première question concerne les flux de trésorerie disponibles. Chuck, vous avez parlé de 34 millions de dollars. Était-ce six ou 12 mois?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Charles E. BarrantesVice-président exécutif et directeur financier"data-reactid =" 134 ">Charles E. BarrantesVice-président exécutif et directeur financier

C&#39;est six mois.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezInvestisseur privé – Analyste"data-reactid =" 136 ">Luis FernandezInvestisseur privé – Analyste

D & # 39; agreement. 6 mois pour une sorte de (plusieurs locuteurs) millions.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Charles E. BarrantesVice-président exécutif et directeur financier"data-reactid =" 138 ">Charles E. BarrantesVice-président exécutif et directeur financier

Année à ce jour.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezInvestisseur privé – Analyste"data-reactid =" 140 ">Luis FernandezInvestisseur privé – Analyste

Yeah. (inaudible) sur le communiqué, vous avez mentionné un flux de trésorerie d’exploitation de 19 millions de dollars pour le semestre?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Charles E. BarrantesVice-président exécutif et directeur financier"data-reactid =" 142 ">Charles E. BarrantesVice-président exécutif et directeur financier

D & # 39; agreement. Oui, les 19 millions de dollars annoncés dans le communiqué correspondent aux activités d’exploitation des PCGR, tandis que les 34 millions de dollars représentent les flux de trésorerie disponibles.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezInvestisseur privé – Analyste"data-reactid =" 144 ">Luis FernandezInvestisseur privé – Analyste

Droite. D&#39;accord, seulement 34 millions de dollars pour six mois, d&#39;accord. (inaudible) plutôt bien. Droite. Ensuite, l’autre question concerne Jody, vous avez mentionné que vous vendiez de nouveaux produits, je ne vous ai pas bien entendu à ce sujet. Pourriez-vous développer, s&#39;il vous plaît?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerAdministrateur, chef de la direction et président"data-reactid =" 146 ">Jody E. MillerAdministrateur, chef de la direction et président

Yeah. Nous avons donc introduit ce que nous appelons le conteneur de sécurité PV 3 et l’écluse de Wolf en Asie-Pacifique. C&#39;est un nouveau produit innovant du côté du conteneur, il a des mécanismes internes de marche c&#39;est très – unité de poignée facile à ouvrir. C’est la chose la plus impressionnante à ce sujet: il existe une libération interne d’urgence, donc si quelqu&#39;un devait être verrouillé et / ou coincé dans le conteneur, il resterait un levier à tirer et il se libérerait pour vous permettre de sortir du conteneur. seul produit dans l&#39;industrie comme ça. Nous pensons donc que cela sera très bien accepté, du point de vue de la sécurité et de la facilité d&#39;utilisation, ainsi que de la simplicité et de la sécurité que cela permet.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezInvestisseur privé – Analyste"data-reactid =" 148 ">Luis FernandezInvestisseur privé – Analyste

D & # 39; agreement. Et ensuite, quel impact attendez-vous de ces nouveaux produits? Sont-ils mineurs ou pourraient-ils être les autres?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerAdministrateur, chef de la direction et président"data-reactid =" 150 ">Jody E. MillerAdministrateur, chef de la direction et président

Yeah. Donc, nous venons de lancer le produit il n&#39;y a pas si longtemps, nous avons également déployé l&#39;éclairage solaire, car les conteneurs sont assez sombres lorsque vous ouvrez les portes, il n&#39;y a pas de lumière. Nous avons donc un produit innovant que les panneaux peuvent encore être empilés et livrés avec des panneaux à très joli kit d&#39;éclairage pour les unités. Mais il est encore trop tôt pour dire que nous attendons beaucoup de notre processus de réflexion une fois que les gens l’ont vu. Pourquoi ne le voudraient-ils pas à l&#39;avenir, alors nous avons évidemment le sentiment que cela va décoller et que nous réussirons très bien pour nous.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezInvestisseur privé – Analyste"data-reactid =" 152 ">Luis FernandezInvestisseur privé – Analyste

D & # 39; agreement. Well. Et enfin, en ce qui concerne les prix sur Lone Star, en ce qui concerne le pic, où pensez-vous que nous sommes maintenant? (Plusieurs intervenants) à partir de 20 ans, ouais désolé.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerAdministrateur, chef de la direction et président"data-reactid =" 154 ">Jody E. MillerAdministrateur, chef de la direction et président

Yeah. Donc je pense – donc oui, je veux dire que nous ne sommes nulle part, même pas près de l&#39;endroit où nous étions à l&#39;époque. Je pense que ce premier petit pic jusqu’à ce que les prix du pétrole baissent, je pense que nous étions en bonne forme. Si le prix du pétrole reste dans la fourchette actuelle ou légèrement supérieure, comme le prédisent la plupart des investisseurs, alors je pense qu’il ya davantage de potentiel de hausse. pricing for sure. But if you look at where it is now, it&#39;s less than two-thirds of where it was in the peak and there is a lot of runway ahead if we could get back to those levels. But I think it&#39;ll be a more steady, slower, gradual increase, it&#39;s what we&#39;re foreseeing in the future as long as stability is there on pricing.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezPrivate Investor — Analyst" data-reactid="156">Luis FernandezPrivate Investor — Analyst

D & # 39; agreement. Well. And then one last one. The derivative cost in the convertible one, that goes away going forward, right?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Christopher A. WilsonVice President, General Counsel and Secretary" data-reactid="158">Christopher A. WilsonVice President, General Counsel and Secretary

I&#39;m sorry, Luis. What was the question, on the derivative?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezPrivate Investor — Analyst" data-reactid="160">Luis FernandezPrivate Investor — Analyst

There is an expense based on the conversion of it, that goes away going forward? Yeah, all right.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Christopher A. WilsonVice President, General Counsel and Secretary" data-reactid="162">Christopher A. WilsonVice President, General Counsel and Secretary

No, doesn&#39;t go away for a while that — what derivative represents is a minimum return provision for buys in capital on the shares, on the convertible note, it&#39;s 1.75. And so until they actually sell and realize down the road, it&#39;s going to stay with us.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezPrivate Investor — Analyst" data-reactid="164">Luis FernandezPrivate Investor — Analyst

D & # 39; agreement. D & # 39; agreement. I thought it was (Multiple Speakers)

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Charles E. BarrantesExecutive Vice President and Chief Financial Officer" data-reactid="166">Charles E. BarrantesExecutive Vice President and Chief Financial Officer

Non-cash, it goes up and down, if our stock goes up, it will go down.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezPrivate Investor — Analyst" data-reactid="168">Luis FernandezPrivate Investor — Analyst

D & # 39; agreement. Yeah, I thought it would — since this was already converted and — go away. But all right. Thanks for clarifying.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Christopher A. WilsonVice President, General Counsel and Secretary" data-reactid="170">Christopher A. WilsonVice President, General Counsel and Secretary

Sûr.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezPrivate Investor — Analyst" data-reactid="172">Luis FernandezPrivate Investor — Analyst

That&#39;s all for me. Thanks for taking the questions.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Christopher A. WilsonVice President, General Counsel and Secretary" data-reactid="174">Christopher A. WilsonVice President, General Counsel and Secretary

Thanks, Luis. Thank you.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President" data-reactid="176">Jody E. MillerDirector, Chief Executive Officer and President

Thank you.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Operator" data-reactid="178">Operator

(Operator Instructions) Our next question comes from the line of Toby Slodden, a private investor.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Toby SloddenPrivate Investor — Analyst" data-reactid="180">Toby SloddenPrivate Investor — Analyst

Hey, good morning guys. Can you hear me?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President" data-reactid="182">Jody E. MillerDirector, Chief Executive Officer and President

Yes, good morning.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Toby SloddenPrivate Investor — Analyst" data-reactid="184">Toby SloddenPrivate Investor — Analyst

Hey, congratulations, consistently you just did another great quarter. So, thank you. This is kind of a broader-based question. When you look at the financials, to what extent were the finance was affected by their — on assuming high demand, you saw and like let&#39;s call it a disaster prone areas like Florida, Texas and California?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President" data-reactid="186">Jody E. MillerDirector, Chief Executive Officer and President

Yeah, it was pretty small. We obviously deliver units into those areas that were affected, but if you look at it as a whole, as far as affecting the full company numbers, it was very minimal. But obviously, we try to service that area as best we can and help the folks out and optimize the opportunity. But if you look at it as a whole, it&#39;s not a large piece at all, very small.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Toby SloddenPrivate Investor — Analyst" data-reactid="188">Toby SloddenPrivate Investor — Analyst

Were you surprised by that?

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President" data-reactid="190">Jody E. MillerDirector, Chief Executive Officer and President

In regards to the impact or the —

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Toby SloddenPrivate Investor — Analyst" data-reactid="192">Toby SloddenPrivate Investor — Analyst

Yes, yeah. Just a little bit — I would have expected to see a larger impact.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President" data-reactid="194">Jody E. MillerDirector, Chief Executive Officer and President

Yeah. It takes a while on those rebuilds, we&#39;ve always found that you don&#39;t see 100s and 100s of units going out day one. We&#39;ve set up drop yards there in the Panama City area. We&#39;ve also added resources and added equipment at a fast pace. But when you&#39;re looking at a company that&#39;s got 60 some ranches in the US and the volume that we do even several 100s units, even 1,000 units going out for an isolated area, it&#39;s still not a huge impact overall. But it&#39;s obviously something we&#39;re going to try to optimize the best we can. But — and we&#39;re definitely are, we&#39;re adding heading yards and equipment to service that area, put through the rebuild, that&#39;s going to happen for a long time, it&#39;s not something that just —

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Toby SloddenPrivate Investor — Analyst" data-reactid="196">Toby SloddenPrivate Investor — Analyst

Okay, thanks.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President" data-reactid="198">Jody E. MillerDirector, Chief Executive Officer and President

Yeah.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Toby SloddenPrivate Investor — Analyst" data-reactid="200">Toby SloddenPrivate Investor — Analyst

Thank you.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Operator" data-reactid="202">Operator

And at this time there are no further questions. I would now like to turn the call back over to Mr. Jody Miller, President and CEO for closing remarks. Please go ahead, Mr. Miller.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President" data-reactid="204">Jody E. MillerDirector, Chief Executive Officer and President

Thank you, operator. I&#39;d like to thank you for joining our call today and we appreciate the continued interest in General Finance Corporation and look forward to speaking to you next quarter.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Operator" data-reactid="206">Operator

This concludes today&#39;s call. You may now disconnect.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Duration: 32 minutes" data-reactid="208">Duration: 32 minutes

Call participants:

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Christopher A. WilsonVice President, General Counsel and Secretary" data-reactid="210">Christopher A. WilsonVice President, General Counsel and Secretary

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Jody E. MillerDirector, Chief Executive Officer and President" data-reactid="211">Jody E. MillerDirector, Chief Executive Officer and President

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Charles E. BarrantesExecutive Vice President and Chief Financial Officer" data-reactid="212">Charles E. BarrantesExecutive Vice President and Chief Financial Officer

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brent ThielmanD. A. Davidson & Co — Analyst" data-reactid="213">Brent ThielmanD. A. Davidson & Co — Analyst

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Scott SchneebergerOppenheimer & Co. Inc. — Analyst" data-reactid="214">Scott SchneebergerOppenheimer & Co. Inc. — Analyst

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Luis FernandezPrivate Investor — Analyst" data-reactid="215">Luis FernandezPrivate Investor — Analyst

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Toby SloddenPrivate Investor — Analyst" data-reactid="216">Toby SloddenPrivate Investor — Analyst

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