Scotsman turns 1Q loss around

April 29, 2006|By ALLISON CONNOLLY | ALLISON CONNOLLY,SUN REPORTER

Williams Scotsman International Inc. posted a profitable first quarter, reversing last year's loss and beating analyst forecasts, on increased demand for its mobile offices and storage units from hurricane-devastated regions and the government.

The Baltimore company earned $10.4 million, or 26 cents a share, for the three months that ended March 31. That compared with a net loss of $818,000, or 13 cents a share, in the quarter last year. Revenue rose 31 percent to $165 million, from $126.1 million.

Williams Scotsman has a fleet of more than 99,000 mobile units that it leases at 86 locations in North America. It also provides installation services and sells new and used units. It has operations in the U.S., Canada, Mexico and Spain.

First-quarter earnings were well above the 16 cents a share expected by analysts surveyed by Thomson Financial. The results also surpassed the company's own estimates by 9 cents a share.

Revenue from the sales of mobile units increased by $17.5 million, largely because a contract at Fort Bliss, Texas, finished ahead of schedule and contributed $14.2 million.

The company saw leasing revenue rise 17 percent, driven by an increase in average rental rates from $258 to $282 and growth in utilization to 82 percent.

Business in Alberta, Canada, also boosted revenue, with increased demand for mobile units at oil and gas exploration sites.

While the $33 million Fort Bliss contract is over, officials told analysts in a conference call yesterday that 2006 earnings should be 86 cents to 92 cents a share, exceeding analyst forecasts of 82 cents a share.

For the second quarter, officials expect earnings of 18 cents to 21 cents a share.

Gerry Holthaus, chairman, president and chief executive officer, said he plans to pursue more military and education business. The company is bidding on more contracts at oil and gas sites.

Holthaus said he also is looking at possible acquisitions. On March 1, Williams Scotsman purchased a modular space company in Mexico for $5 million, which added 300 units to its fleet and will serve as a platform for expansion there. "The pipeline looks very active," he said.

Williams Scotsman stock gained 32 cents to close at $24.57 a share yesterday.

allison.connolly@baltsun.com

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