CAI International, Inc. Reports Record Fourth Quarter Results and Full Year 2020 Results, Announces Increase in its Quarterly Dividend and Expands its Share Repurchase Program
02/16/2021 - 04:05 PM
CAI International, Inc. (“CAI” or the “Company”) (NYSE: CAI), one of the world’s leading transportation finance companies, today reported results for the fourth quarter and full year of 2020.
Highlights
Net income from continuing operations attributable to CAI common stockholders for the fourth quarter of 2020 was a record $32.5 million , or $1.81 per fully diluted share.
Adjusted net income from continuing operations attributable to CAI common stockholders1 for the fourth quarter of 2020 was also a record at $31.6 million , or $1.76 per fully diluted share.
Return on equity on adjusted net income from continuing operations1 was 21.2% in the fourth quarter of 2020.
Container lease revenue for the fourth quarter of 2020 was a record $81.6 million , compared to $73.9 million in the third quarter of 2020.
CAI’s Board of Directors declared a cash dividend of $0.30 per common share payable on March 25, 2021 to shareholders of record as of March 11, 2021.
Average CEU utilization for CAI’s owned container fleet during the fourth quarter of 2020 was 99.3% , compared to 98.4% for the third quarter of 2020. Current CEU utilization is 99.7% .
Under the previously approved share repurchase program, CAI repurchased approximately 249,000 shares of common stock during the fourth quarter of 2020 at an average price of $31.95 per share. CAI has purchased an additional 390,000 shares in the first quarter of 2021 to date.
Financial and Operating Highlights
Three Months Ended
December 31, September 30, December 31,
Container lease revenue
$
81,567
$
73,890
$
73,521
Continuing operations GAAP
Net income attributable to common stockholders
$
32,511
$
15,295
$
10,589
Net income per share - diluted
$
1.81
$
0.86
$
0.60
Continuing operations non-GAAP 1
Adjusted net income attributable to common stockholders
$
31,622
$
18,701
$
10,589
Adjusted net income per share - diluted
$
1.76
$
1.06
$
0.60
Return on equity (continuing operations) 2
21.2%
12.7%
7.3%
Total container fleet size in CEUs at end of period
1,798,520
1,732,547
1,727,816
Container fleet utilization at end of period
99.6%
99.0%
98.3%
1 Refer to the “Reconciliation of GAAP Amounts to Non-GAAP Amounts” and “Use of Non-GAAP Financial Measures” set forth below.
2 Refer to the “Calculation of Return on Equity” set forth below.
Timothy Page, Interim President and Chief Executive Officer of CAI, commented, “We are very pleased with our results during the fourth quarter. Adjusted net income from continuing operations attributable to CAI common stockholders was a record $31.6 million , an increase of 69% compared to the third quarter of 2020. Container lease revenue was $82 million , also a record, and a 10% increase from the third quarter.
“During the quarter we delivered on all of our stated initiatives to maximize shareholder value:
We invested aggressively, leasing out $154 million in new long-dated leases with attractive yields and an average tenure of 11 years. Since the end of June 2020, we have invested $300 million and grown our container revenue assets by 6% . This investment, with its long-term attractive yields, combined with our industry leading utilization and low, long-term funding costs, resulted in an ROE of 21.2% in the fourth quarter.
We completed the divestiture of our non-container assets with the sale of our rail business, which closed on December 29, 2020. Combined with the sale of our logistics business in August, CAI is now 100% focused on its container leasing business.
We are actively returning capital to shareholders, increasing our quarterly dividend 20% from $0.25 t o $0.30 per share.
We have repurchased 3.6% of our common shares since the beginning of the fourth quarter of 2020. In addition, the Board has expanded our share repurchase program by an additional two million shares.
“Our singular focus is to continue to prudently allocate capital to drive shareholder value.”
Mr. Page continued, “The global container market has been remarkable the past several quarters, demand has been unprecedented and container prices have risen to record levels. We expect container demand to remain strong throughout 2021. We have a robust forward order book and have commitments for the delivery of $340 million of new containers through early Q3 of 2021, and expect to secure additional commitments as we work with several customers to provide financing for their container production. We continue to focus on ultra-long life-cycle leases and because of the historically high container prices, are limiting our speculative production commitments.
“The Company continues to maintain its exceptional industry leading utilization. Average utilization in the fourth quarter was 99.3% . Utilization at the quarter end was 99.6% , and is currently 99.7% . Our continuing strong performance in utilization reflects the long-term nature of our contracts, our focus on tight contract redelivery terms and ongoing fleet management; all of which underscore the long-term committed nature of our cash flow.
“Our average cash interest rate at the end of the fourth quarter was 2.25% , and 83% of the Company’s debt is now fixed rate. CAI has a record level of liquidity which will allow us to take advantage of favorable container investment opportunities as well as continue to return capital to shareholders.
“We expect the record results we achieved in the fourth quarter to set the stage for a strong 2021. However, we anticipate that net income may be slightly lower in the first quarter as a result of two fewer billing days as compared to the fourth quarter and a probable reduction in container sales as result of a lack of available inventory due to our high utilization levels.”
Mr. Page concluded, “We are very optimistic about 2021. We enter the year with strong cash flows supported by long-term leases, virtually no off-lease equipment, and low, long-term fixed rate financing costs. As a result of these favorable factors, combined with our forward order book, we expect to continue to deliver exceptional ROE’s for our shareholders.”
Additional information on CAI's results, as well as comments on market trends, is available in a presentation posted today on the "Investors" section of CAI's website, www.capps.com .
CAI International, Inc.
Consolidated Balance Sheets
(In thousands, except share information)
(UNAUDITED)
December 31, December 31,
2020
2019
Assets
Current assets
Cash
$
26,691
$
19,870
Cash held by variable interest entities
26,856
26,594
Current portion of restricted cash
600
-
Accounts receivable, net of allowance for doubtful accounts of $393 and $7,671
at December 31, 2020 and 2019, respectively
65,310
72,984
Current portion of net investment in finance leases
78,992
71,228
Prepaid expenses and other current assets
16,213
7,849
Assets held for sale
-
322,294
Total current assets
214,662
520,819
Restricted cash
12,355
26,775
Rental equipment, net of accumulated depreciation of $669,360 and $588,815
at December 31, 2020 and 2019, respectively
1,781,321
1,820,735
Net investment in finance leases
550,573
495,488
Financing receivable
48,888
30,693
Other non-current assets
4,833
7,255
Total assets
$
2,612,632
CAI Rankings
N/A Ranked by Stock Gains
CAI Stock Data
Industry
General Rental Centers
Sector
Real Estate and Rental and Leasing
Tags
Finance, Finance/Rental/Leasing, Real Estate and Rental and Leasing, General Rental Centers
Country
US
City
San Francisco
About CAI
CAI is a global transportation company offering intermodal container leasing and sales. Established in 1989 and headquartered in San Francisco, CAI has grown into a leading expert in transportation operations and finance. With offices around the world and a broad network of agents and depots, CAI serves hundreds of the world's leading shipping lines, container operators, and logistics providers.
