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General Finance (GFNCL) Posts Q4 and FY Financials, Notes $20M Debt Reduction

General Finance Corp. operates through its majority-owned subsidiary Royal Wolf and its indirect wholly owned subsidiary Pac-Van to sell and lease portable services and storage products in Australia, New Zealand and the United Sates.

The company today announced its fourth-quarter and year-end results for the period ended June 30, 2010, including contributions from both subsidiaries and financial information for Pac-Van results for the year ended June 30, 2009.

“We are pleased with our quarterly results, as revenues, utilization and adjusted EBITDA all improved over the preceding fourth quarter. As we discussed in prior quarters, we have been looking for a bottom in the United States and believe we have now seen stabilization in rates and a pick-up in demand,” Ronald Valenta, General Finance’s president and CEO stated in the press release.

General Finance’s total revenues for the fourth quarter increased 15 percent to $43.5 million, up from $37.8 million reported in the comparable quarter of 2009.

Fourth-quarter leasing revenues increased to $19.4 million, a slight increase from $19.3 million reported in the fourth quarter of the year prior. Leasing revenues comprised 45 percent of total revenue, as compared to 51 percent in the fourth quarter of 2009.

The company reported that sales revenues increased approximately 31 percent to $24.1 million, up from $18.4 million in fiscal 2009.

Adjusted EBITDA was reported at $8.2 million, an increase from $7.9 million reported in the fourth quarter of 2009. Fourth quarter 2010 adjusted EBITDA margin as a percentage of total revenues decreased from 21 percent in 2009 compared to 19 percent in the fourth quarter of 2010.

The company noted the effects of foreign currency exchange – the weakening of the Australian dollar resulted in a loss of $1.8 million for the fourth quarter as compared to a gain of $3.3 million in the fourth quarter of 2009.

Fiscal year 2010 total revenues were $156.3 million ($57.1 million in the United States and $99.2 million in the Asia-Pacific area); fiscal year 2010 adjusted EBITDA was $31.5 million ($10.1 million in the United States and $21.4 million in the Asia-Pacific area).

Commenting on General Finance’s Asia-Pacific organization, Valenta noted record sales and leasing revenues from core operations for the month of June.

“In addition, conditions in the industry have given us an opportunity to strengthen our pricing at the beginning of the new fiscal year and we are moving forward with a full head of steam,” he stated.

Charles Barrantes, General Finance’s executive vice president and CFO added, “Though our U.S. GAAP operating results do not necessarily reflect it, we entered our fiscal year 2011 on a more positive basis than we entered fiscal year 2010. We generated free cash flow of $17.3 million over fiscal year 2010, which enabled us to reduce indebtedness by $20.3 million, and in late June we completed our rights offering. In July, we used $4.8 million of the net proceeds from the rights offering for the Pac-Van refinancing that resulted in a new senior credit facility with less restrictive covenants. While we believe that we are at or near the bottom of the adverse effect of the recession in the United States and the outlook for the Australian economy is positive, we still have our challenges during fiscal year 2011. Among them are obtaining the capital resources that may be required to satisfy certain commitments to Bison Capital relating to Royal Wolf in fiscal year 2012 and continuing the reduction of our overall leverage.”

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