##### Table of Contents



U. S. SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 1-12804
 
 
  
 Delaware
    
    86-0748362(State or other jurisdiction of 
incorporation or organization)
    
    (IRS Employer
Identification No.)
 7420 S. Kyrene Road, Suite 101
Tempe, Arizona 85283
 (480) 894-6311
 
 þ o
 o o
  Large accelerated filer þAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



MOBILE MINI, INC.
INDEX TO FORM 10-Q FILING
FOR THE QUARTER ENDED SEPTEMBER 30, 2009
 TABLE OF CONTENTS
 PAGENUMBERPART I.FINANCIAL INFORMATIONItem 1.
    
    Consolidated Financial Statements
    
    
    3Condensed Consolidated Balance Sheets

December 31, 2008 and September 30, 2009 (unaudited)
    
    
    3Condensed Consolidated Statements of Income (unaudited)

Three Months Ended September 30, 2008 and September 30, 2009
    
    
    4Nine Months Ended September 30, 2008 and September 30, 2009
    
    
    5Condensed Consolidated Statements of Cash Flows (unaudited) 
Nine Months Ended September 30, 2008 and September 30, 2009
    
    
    6Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    27Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    44Item 4.
    
    Controls and Procedures
    
    
    44PART II.OTHER INFORMATIONItem 1A.
    
    Risk Factors
    
    
    45Item 6.
    
    Exhibits
    
    
    45SIGNATURESEX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
 
 MOBILE MINI, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except per share data)
 December 31, 2008
    
    
    September 30, 2009(See Note A)
    
    
    (unaudited)ASSETSCash and cash equivalents
    
    $
    3,184
    
    
    $
    1,741Receivables, net of allowance for doubtful accounts of $7,193 and $4,375 at
December 31, 2008 and September 30, 2009, respectively
    
    
    61,424
    
    
    
    42,214Inventories
    
    
    26,577
    
    
    
    23,148Lease fleet, net
    
    
    1,078,156
    
    
    
    1,060,668Property, plant and equipment, net
    
    
    88,509
    
    
    
    85,366Deposits and prepaid expenses
    
    
    13,287
    
    
    
    10,209Other assetsand intangibles, net
    
    
    35,063
    
    
    
    28,693Goodwill
    
    
    492,657
    
    
    
    513,144Total assets
    
    $
    1,798,857
    
    
    $
    1,765,183LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Accounts payable
    
    $
    21,433
    
    
    $
    13,855Accrued liabilities
    
    
    86,214
    
    
    
    69,463Lines of credit
    
    
    554,532
    
    
    
    493,306Notes payable
    
    
    1,380
    
    
    
    186Obligations under capital leases
    
    
    5,497
    
    
    
    4,415Senior notes, net
    
    
    345,797
    
    
    
    346,349Deferred income taxes
    
    
    134,786
    
    
    
    150,160Total liabilities
    
    
    1,149,639
    
    
    
    1,077,734Commitments and contingenciesConvertible preferred stock; $.01 par value, 20,000 shares authorized,
8,556 issued and outstanding at December 31, 2008 and September 30, 2009,
respectively, stated at liquidity preference values
    
    
    153,990
    
    
    
    153,990Stockholders equity:Common stock $.01 par value: 95,000 shares authorized, 37,489 issued and
35,314 outstanding at December 31, 2008 and 37,693 issued and 35,518
outstanding at
September 30, 2009, respectively
    
    
    375
    
    
    
    377Additional paid-in capital
    
    
    328,696
    
    
    
    334,671Retained earnings
    
    
    242,935
    
    
    
    264,749Accumulated other comprehensive loss
    
    
    (37,478
    )
    
    
    (27,038
    )Treasury stock, at cost, 2,175 shares
    
    
    (39,300
    )
    
    
    (39,300
    )Total stockholders equity
    
    
    495,228
    
    
    
    533,459Total liabilities and stockholders equity
    
    $
    1,798,857
    
    
    $
    1,765,183
  3




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##### Table of Contents



MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(unaudited)
 Three Months Ended September 30,2008
    
    
    2009Revenues:Leasing
    
    $
    119,323
    
    
    $
    82,098Sales
    
    
    12,528
    
    
    
    9,493Other
    
    
    901
    
    
    
    495Total revenues
    
    
    132,752
    
    
    
    92,086Costs and expenses:Cost of sales
    
    
    8,571
    
    
    
    6,220Leasing, selling and general expenses
    
    
    68,466
    
    
    
    47,355Integration, merger and restructuring expenses
    
    
    6,059
    
    
    
    1,532Depreciation and amortization
    
    
    9,705
    
    
    
    9,227Total costs and expenses
    
    
    92,801
    
    
    
    64,334Income from operations
    
    
    39,951
    
    
    
    27,752Other income (expense):Interest income
    
    
    7
    
    
    
    23Interest expense
    
    
    (18,022
    )
    
    
    (14,595
    )Foreign currency exchange loss
    
    
    (45
    )
    
    
    (13
    )Income before provision for income taxes
    
    
    21,891
    
    
    
    13,167Provision for income taxes
    
    
    8,615
    
    
    
    5,047Net income
    
    
    13,276
    
    
    
    8,120Earnings allocable to preferred stock
    
    
    (2,650
    )
    
    
    (1,615
    )Net income available to common stockholders
    
    $
    10,626
    
    
    $
    6,505Earnings per share:Basic
    
    $
    0.31
    
    
    $
    0.19Diluted
    
    $
    0.31
    
    
    $
    0.19Weighted average number of common and common share equivalents outstanding:Basic
    
    
    34,174
    
    
    
    34,464Diluted
    
    
    43,257
    
    
    
    43,416
  4




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##### Table of Contents



MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(unaudited)
 Nine Months Ended September 30,2008
    
    
    2009Revenues:Leasing
    
    $
    262,208
    
    
    $
    256,011Sales
    
    
    28,451
    
    
    
    29,411Other
    
    
    1,719
    
    
    
    1,752Total revenues
    
    
    292,378
    
    
    
    287,174Costs and expenses:Cost of sales
    
    
    19,562
    
    
    
    19,709Leasing, selling and general expenses
    
    
    155,732
    
    
    
    148,002Integration, merger and restructuring expenses
    
    
    17,668
    
    
    
    9,375Depreciation and amortization
    
    
    21,121
    
    
    
    29,914Total costs and expenses
    
    
    214,083
    
    
    
    207,000Income from operations
    
    
    78,295
    
    
    
    80,174Other income (expense):Interest income
    
    
    69
    
    
    
    29Interest expense
    
    
    (30,586
    )
    
    
    (44,802
    )Foreign currency exchange loss
    
    
    (53
    )
    
    
    (88
    )Income before provision for income taxes
    
    
    47,725
    
    
    
    35,313Provision for income taxes
    
    
    18,930
    
    
    
    13,500Net income
    
    
    28,795
    
    
    
    21,813Earnings allocable to preferred stock
    
    
    (2,690
    )
    
    
    (4,344
    )Net income available to common stockholders
    
    $
    26,105
    
    
    $
    17,469Earnings per share:Basic
    
    $
    0.77
    
    
    $
    0.51Diluted
    
    $
    0.77
    
    
    $
    0.51Weighted average number of common and common share equivalents outstanding:Basic
    
    
    34,124
    
    
    
    34,400Diluted
    
    
    37,512
    
    
    
    43,171
  5




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MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
 Nine Months Ended September 30,2008
    
    
    2009Cash Flows From Operating Activities:Net income
    
    $
    28,795
    
    
    $
    21,813Adjustments to reconcile income to net cash provided by operating activities:Provision for doubtful accounts
    
    
    3,484
    
    
    
    1,840Provision for restructuring charge
    
    
    
    
    
    
    (102
    )Amortization of deferred financing costs
    
    
    1,762
    
    
    
    3,892Share-based compensation expense
    
    
    3,905
    
    
    
    5,106Depreciation and amortization
    
    
    21,121
    
    
    
    29,914Gain on sale of lease fleet units
    
    
    (6,095
    )
    
    
    (8,805
    )Loss on disposal of property, plant and equipment
    
    
    466
    
    
    
    Deferred income taxes
    
    
    18,854
    
    
    
    12,872Foreign currency transaction loss
    
    
    53
    
    
    
    88Changes in certain assets and liabilities, net of effect of businesses acquired:Receivables
    
    
    (5,831
    )
    
    
    18,053Inventories
    
    
    (485
    )
    
    
    2,788Deposits and prepaid expenses
    
    
    1,237
    
    
    
    3,123Other assets and intangibles
    
    
    (136
    )
    
    
    (669
    )Accounts payable
    
    
    (11,978
    )
    
    
    (6,438
    )Accrued liabilities
    
    
    9,434
    
    
    
    (14,850
    )Net cash provided by operating activities
    
    
    64,586
    
    
    
    68,625Cash Flows From Investing Activities:Cash paid for businesses acquired
    
    
    (24,209
    )
    
    
    Additions to lease fleet, excluding acquisitions
    
    
    (56,693
    )
    
    
    (16,522
    )Proceeds from sale of lease fleet units
    
    
    17,667
    
    
    
    25,431Additions to property, plant and equipment
    
    
    (11,042
    )
    
    
    (8,135
    )Proceeds from sale of property, plant and equipment
    
    
    322
    
    
    
    821Other
    
    
    
    
    
    
    112Net cash (used in) provided by investing activities
    
    
    (73,955
    )
    
    
    1,707Cash Flows From Financing Activities:Net borrowings (repayments) under lines of credit
    
    
    135,040
    
    
    
    (61,226
    )Deferred financing costs
    
    
    (14,833
    )
    
    
    Principal payments on notes payable
    
    
    (113,188
    )
    
    
    (1,202
    )Principal payments on capital lease obligations
    
    
    (350
    )
    
    
    (1,082
    )Issuance of common stock, net
    
    
    1,466
    
    
    
    603Net cash provided by (used in) financing activities
    
    
    8,115
    
    
    
    (62,907
    )Effect of exchange rate changes on cash
    
    
    2,403
    
    
    
    (8,868
    )Net increase (decrease) in cash
    
    
    1,149
    
    
    
    (1,443
    )Cash at beginning of period
    
    
    3,703
    
    
    
    3,184Cash at end of period
    
    $
    4,852
    
    
    $
    1,741Supplemental Disclosure of Cash Flow Information:Interest rate swap changes in fair value charged (credited) to equity
    
    $
    850
    
    
    $
    (1,509
    )Preferred shares issued in business combination
    
    $
    197
    
    
    $
    
  6




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)
          Receivables
    
    $
    (619
    )Inventories
    
    
    (184
    )Lease fleet, net
    
    
    (13,100
    )Property, plant and equipment, net
    
    
    (2,388
    )Deposits, prepaid expenses and other assets
    
    
    (65
    )Liabilities
    
    
    1,590$
    (14,766
    )
  Accounting Standards Codification
 7




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
  Fair Value Measurements
 Interim Disclosures about Fair Value.
 Business Combinations.
  Determining the Useful Life of Intangible Assets
 Subsequent Events
 8




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
 Transfers of Financial Assets.
 Fair Value Measurement of Liabilities
      Multiple Element Arrangements
   Level 1
    
    Observable inputs such as quoted prices in active markets for identical assets or liabilities;Level 2
    
    Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; andLevel 3
    
    Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its
own assumptions.
 9




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
  QuotedPrices inActive
    
    SignificantMarkets for
    
    Other
    
    SignificantIdentical
    
    Observable
    
    UnobservableAssets
    
    Inputs
    
    Inputs
    
    ValuationFair Value
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)
    
    TechniqueDecember 31, 2008:Interest rate swap agreements
    
    $
    (11,532
    )
    
    $
    
    
    
    $
    (11,532
    )
    
    $
    
    
    
    
    (1
    )September 30, 2009:Interest rate swap agreements
    
    $
    (9,064
    )
    
    $
    
    
    
    $
    (9,064
    )
    
    $
    
    
    
    
    (1
    )
 
 (1)
    
    The Companys interest rate swap agreements are not traded on a market exchange;
therefore, the fair values are determined using valuation models which include assumptions
about the LIBOR yield curve at the reporting dates as well as counter party credit risk and
the Companys own non-performance risk. The Company has consistently applied these
calculation techniques to all periods presented. At September 30, 2009, the fair value of
interest rate swap agreements is recorded in accrued liabilities in the Companys condensed
consolidated balance sheet.      10




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2009
    
    
    2008
    
    
    2009(In thousands except earnings per share data)Historical net income per share:Numerator:Net income
    
    $
    13,276
    
    
    $
    8,120
    
    
    $
    28,795
    
    
    $
    21,813Less: Earnings allocable to preferred stock
    
    
    (2,650
    )
    
    
    (1,615
    )
    
    
    (2,690
    )
    
    
    (4,344
    )Net income available to common stockholders
    
    $
    10,626
    
    
    $
    6,505
    
    
    $
    26,105
    
    
    $
    17,469Basic EPS Denominator:Common stock outstanding beginning of period
    
    
    34,146
    
    
    
    34,435
    
    
    
    34,041
    
    
    
    34,324Effect of weighting shares:Weighted shares issued during the
period ended September 30,
    
    
    28
    
    
    
    29
    
    
    
    83
    
    
    
    76Denominator for basic net income per share
    
    
    34,174
    
    
    
    34,464
    
    
    
    34,124
    
    
    
    34,400Diluted EPS Denominator:Common stock outstanding beginning of period
    
    
    34,146
    
    
    
    34,435
    
    
    
    34,041
    
    
    
    34,324Effect of weighting shares:Weighted shares issued during the
period ended September 30,
    
    
    28
    
    
    
    29
    
    
    
    83
    
    
    
    76Dilutive effect of employee stock
options and nonvested share-awards
assumed converted during the period
ended September 30,
    
    
    527
    
    
    
    396
    
    
    
    442
    
    
    
    215Dilutive effect of convertible
preferred stock assumed converted
during the period ended September 30,
    
    
    8,556
    
    
    
    8,556
    
    
    
    2,946
    
    
    
    8,556Denominator for diluted net income per share
    
    
    43,257
    
    
    
    43,416
    
    
    
    37,512
    
    
    
    43,171Basic net income per share
    
    $
    0.31
    
    
    $
    0.19
    
    
    $
    0.77
    
    
    $
    0.51Diluted net income per share
    
    $
    0.31
    
    
    $
    0.19
    
    
    $
    0.77
    
    
    $
    0.51
    11




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
       Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2009
    
    
    2008
    
    
    2009(In thousands)Gross share-based compensation
    
    $
    1,959
    
    
    $
    1,883
    
    
    $
    4,807
    
    
    $
    5,359Capitalized share-based compensation
    
    
    (418
    )
    
    
    (58
    )
    
    
    (902
    )
    
    
    (253
    )Share-based compensation expense
    
    $
    1,541
    
    
    $
    1,825
    
    
    $
    3,905
    
    
    $
    5,106
  Number of
    
    WeightedShares
    
    Average(In thousands)
    
    Exercise PriceBalance at December 31, 2008
    
    
    1,750
    
    
    $
    17.45Exercised
    
    
    (60
    )
    
    $
    10.93Canceled/expired
    
    
    (104
    )
    
    $
    25.68Balance at September 30, 2009
    
    
    1,586
    
    
    $
    17.20
  12




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
  Number of
    
    
    Weighted AverageShares
    
    
    Grant Date Fair(In thousands)
    
    
    ValueNonvested at December 31, 2008
    
    
    990
    
    
    $
    18.03Awarded
    
    
    235
    
    
    
    12.62Released
    
    
    (115
    )
    
    
    20.19Forfeited
    
    
    (91
    )
    
    
    18.83Nonvested at September 30, 2009
    
    
    1,019
    
    
    $
    16.73
  WeightedNumber of
    
    Weighted
    
    Average
    
    AggregateShares
    
    Average
    
    Remaining
    
    Intrinsic(In
    
    Exercise
    
    Contractual
    
    Value (Inthousands)
    
    Price
    
    Term
    
    thousands)Outstanding
    
    
    1,586
    
    
    $
    17.20
    
    
    
    4.2
    
    
    $
    3,871Vested and expected to vest
    
    
    1,524
    
    
    $
    16.82
    
    
    
    4.1
    
    
    $
    3,871Exercisable
    
    
    1,484
    
    
    $
    16.54
    
    
    
    4.0
    
    
    $
    3,871
     December 31, 2008
    
    
    September 30, 2009(In thousands)Raw material and supplies
    
    $
    16,991
    
    
    $
    16,705Work-in-process
    
    
    1,611
    
    
    
    596Finished portable storage units
    
    
    7,975
    
    
    
    5,847$
    26,577
    
    
    $
    23,148
 13




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
 
      December 31, 2008
    
    
    
    September 30, 2009(In thousands)Land
    
    $
    10,978
    
    
    $
    11,128Vehicles and equipment
    
    
    78,592
    
    
    
    77,748Buildings and improvements
    
    
    13,868
    
    
    
    14,979Office fixtures and equipment
    
    
    20,948
    
    
    
    24,930124,386
    
    
    
    128,785Less accumulated depreciation
    
    
    (35,877
    )
    
    
    (43,419
    )Total property, plant and equipment
    
    $
    88,509
    
    
    $
    85,366
   14




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
     December 31, 2008
    
    
    September 30, 2009(In thousands)Steel storage containers
    
    $
    616,750
    
    
    $
    621,127Offices
    
    
    523,242
    
    
    
    527,348Van trailers
    
    
    15,610
    
    
    
    6,088Other
    
    
    2,161
    
    
    
    2,6601,157,763
    
    
    
    1,157,223Accumulated depreciation
    
    
    (79,607
    )
    
    
    (96,555
    )$
    1,078,156
    
    
    $
    1,060,668
     15




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
  Derivatives Fair Value
    
    
    
    
    
    Fair ValueHedging Relationships
    
    Balance Sheet Location
    
    (in thousands)December 31, 2008:Interest rate swap agreements
    
    Accrued liabilities
    
    $
    (11,532
    )September 30, 2009:Interest rate swap agreements
    
    Accrued liabilities
    
    $
    (9,064
    )
 Amount of Gain or(Loss) Recognizedin OCI onDerivatives Fair Value
    
    DerivativeHedging Relationships
    
    (In thousands)Three months ended September 30, 2008:Interest rate swap agreements, (net of income tax benefit of $0.4 million)
    
    $
    (642
    )Three months ended September 30, 2009:Interest rate swap agreements, (net of applicable income taxes of $0.2 million)
    
    $
    263Nine months ended September 30, 2008:Interest rate swap agreements, (net of income tax benefit of $0.5)
    
    $
    (850
    )Nine months ended September 30, 2009:Interest rate swap agreements, (net of applicable income taxes of $1.0 million)
    
    $
    1,509
     16




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In thousands)2008
    
    
    2009
    
    
    2008
    
    
    2009North America
    
    $
    106,750
    
    
    $
    77,874
    
    
    $
    252,179
    
    
    $
    243,530United Kingdom
    
    
    24,520
    
    
    
    13,454
    
    
    
    35,355
    
    
    
    41,144The Netherlands
    
    
    1,482
    
    
    
    758
    
    
    
    4,844
    
    
    
    2,500Total revenues
    
    $
    132,752
    
    
    $
    92,086
    
    
    $
    292,378
    
    
    $
    287,174
  December 31, 2008
    
    
    September 30, 2009(In thousands)North America
    
    $
    1,041,540
    
    
    $
    1,009,036United Kingdom
    
    
    120,914
    
    
    
    132,336The Netherlands
    
    
    4,211
    
    
    
    4,662Total long-lived assets
    
    $
    1,166,665
    
    
    $
    1,146,034
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2009
    
    
    2008
    
    
    2009(In thousands)Net income
    
    $
    13,276
    
    
    $
    8,120
    
    
    $
    28,795
    
    
    $
    21,813Net unrealized holding gain (loss) on derivatives
    
    
    (642
    )
    
    
    263
    
    
    
    (850
    )
    
    
    1,509Foreign currency translation adjustment
    
    
    (10,305
    )
    
    
    (2,298
    )
    
    
    (9,522
    )
    
    
    8,931Total comprehensive income
    
    $
    2,329
    
    
    $
    6,085
    
    
    $
    18,423
    
    
    $
    32,253
  December 31, 2008
    
    
    September 30, 2009(In thousands)Accumulated net unrealized holding loss on derivatives
    
    $
    (7,068
    )
    
    $
    (5,559
    )Foreign currency translation adjustment
    
    
    (30,410
    )
    
    
    (21,479
    )Total accumulated other comprehensive loss
    
    $
    (37,478
    )
    
    $
    (27,038
    )
    17




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
  LeaseSeverance and
    
    
    Abandonment
    
    
    AcquisitionBenefits
    
    
    Costs
    
    
    Integration
    
    
    Total(In thousands)Accrued obligations as of December 31, 2008
    
    $
    2,009
    
    
    $
    8,411
    
    
    $
    1,143
    
    
    $
    11,563Integration, merger and restructuring expenses
    
    
    3,859
    
    
    
    26
    
    
    
    5,593
    
    
    
    9,478Cash paid
    
    
    (4,970
    )
    
    
    (2,277
    )
    
    
    (6,722
    )
    
    
    (13,969
    )Accrued obligations as of September 30, 2009
    
    $
    898
    
    
    $
    6,160
    
    
    $
    14
    
    
    $
    7,072
   Three Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30, 2009
    
    
    September 30, 2009(In thousands)Severance and benefits
    
    $
    630
    
    
    $
    3,859Lease abandonment costs
    
    
    
    
    
    
    26Acquisition integration
    
    
    1,005
    
    
    
    5,593Long-lived asset and inventory charges
    
    
    (103
    )
    
    
    (103
    )Integration, merger and restructuring expenses
    
    $
    1,532
    
    
    $
    9,375
     18




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
 MOBILE MINI, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS
As of December 31, 2008
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCash
    
    $
    2,208
    
    
    $
    976
    
    
    $
    
    
    
    $
    3,184Receivables, net
    
    
    45,827
    
    
    
    15,597
    
    
    
    
    
    
    
    61,424Inventories
    
    
    23,644
    
    
    
    2,982
    
    
    
    (49
    )
    
    
    26,577Lease fleet, net
    
    
    969,432
    
    
    
    108,724
    
    
    
    
    
    
    
    1,078,156Property, plant and equipment, net
    
    
    72,108
    
    
    
    16,401
    
    
    
    
    
    
    
    88,509Deposits and prepaid expenses
    
    
    12,130
    
    
    
    1,157
    
    
    
    
    
    
    
    13,287Other assets and intangibles, net
    
    
    28,144
    
    
    
    6,919
    
    
    
    
    
    
    
    35,063Goodwill
    
    
    435,450
    
    
    
    57,207
    
    
    
    
    
    
    
    492,657Intercompany
    
    
    131,257
    
    
    
    35,782
    
    
    
    (167,039
    )
    
    
    Total assets
    
    $
    1,720,200
    
    
    $
    245,745
    
    
    $
    (167,088
    )
    
    $
    1,798,857LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Accounts payable
    
    $
    12,361
    
    
    $
    9,072
    
    
    $
    
    
    
    $
    21,433Accrued liabilities
    
    
    81,146
    
    
    
    5,068
    
    
    
    
    
    
    
    86,214Lines of credit
    
    
    450,053
    
    
    
    104,479
    
    
    
    
    
    
    
    554,532Notes payable
    
    
    1,306
    
    
    
    74
    
    
    
    
    
    
    
    1,380Obligations under capital leases
    
    
    5,495
    
    
    
    2
    
    
    
    
    
    
    
    5,497Senior notes
    
    
    345,797
    
    
    
    
    
    
    
    
    
    
    
    345,797Deferred income taxes
    
    
    124,858
    
    
    
    10,363
    
    
    
    (435
    )
    
    
    134,786Intercompany
    
    
    23
    
    
    
    29,626
    
    
    
    (29,649
    )
    
    
    Total liabilities
    
    
    1,021,039
    
    
    
    158,684
    
    
    
    (30,084
    )
    
    
    1,149,639Commitments and contingenciesConvertible preferred stock
    
    
    153,990
    
    
    
    
    
    
    
    
    
    
    
    153,990Stockholders equity:Common stock
    
    
    375
    
    
    
    18,433
    
    
    
    (18,433
    )
    
    
    375Additional paid-in capital
    
    
    328,696
    
    
    
    119,165
    
    
    
    (119,165
    )
    
    
    328,696Retained earnings
    
    
    263,498
    
    
    
    (21,157
    )
    
    
    594
    
    
    
    242,935Accumulated other comprehensive loss
    
    
    (8,098
    )
    
    
    (29,380
    )
    
    
    
    
    
    
    (37,478
    )Treasury stock, at cost
    
    
    (39,300
    )
    
    
    
    
    
    
    
    
    
    
    (39,300
    )Total stockholders equity
    
    
    545,171
    
    
    
    87,061
    
    
    
    (137,004
    )
    
    
    495,228Total liabilities and stockholders equity
    
    $
    1,720,200
    
    
    $
    245,745
    
    
    $
    (167,088
    )
    
    $
    1,798,857
 19




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
 MOBILE MINI, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS
As of September 30, 2009
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCash and cash equivalents
    
    $
    445
    
    
    $
    1,296
    
    
    $
    
    
    
    $
    1,741Receivables, net
    
    
    30,543
    
    
    
    11,671
    
    
    
    
    
    
    
    42,214Inventories
    
    
    20,820
    
    
    
    2,377
    
    
    
    (49
    )
    
    
    23,148Lease fleet, net
    
    
    941,937
    
    
    
    118,731
    
    
    
    
    
    
    
    1,060,668Property, plant and equipment, net
    
    
    67,098
    
    
    
    18,268
    
    
    
    
    
    
    
    85,366Deposits and prepaid expenses
    
    
    8,848
    
    
    
    1,361
    
    
    
    
    
    
    
    10,209Other assets and intangibles, net
    
    
    22,844
    
    
    
    5,849
    
    
    
    
    
    
    
    28,693Goodwill
    
    
    447,126
    
    
    
    66,018
    
    
    
    
    
    
    
    513,144Intercompany
    
    
    139,179
    
    
    
    36,450
    
    
    
    (175,629
    )
    
    
    Total assets
    
    $
    1,678,840
    
    
    $
    262,021
    
    
    $
    (175,678
    )
    
    $
    1,765,183LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Accounts payable
    
    $
    6,638
    
    
    $
    7,217
    
    
    $
    
    
    
    $
    13,855Accrued liabilities
    
    
    65,934
    
    
    
    3,529
    
    
    
    
    
    
    
    69,463Lines of credit
    
    
    385,643
    
    
    
    107,663
    
    
    
    
    
    
    
    493,306Notes payable
    
    
    145
    
    
    
    41
    
    
    
    
    
    
    
    186Obligations under capital leases
    
    
    4,414
    
    
    
    1
    
    
    
    
    
    
    
    4,415Senior notes, net
    
    
    346,349
    
    
    
    
    
    
    
    
    
    
    
    346,349Deferred income taxes
    
    
    139,637
    
    
    
    11,084
    
    
    
    (561
    )
    
    
    150,160Intercompany
    
    
    22
    
    
    
    39,034
    
    
    
    (39,056
    )
    
    
    Total liabilities
    
    
    948,782
    
    
    
    168,569
    
    
    
    (39,617
    )
    
    
    1,077,734Commitments and contingenciesConvertible preferred stock
    
    
    153,990
    
    
    
    
    
    
    
    
    
    
    
    153,990Stockholders equity:Common stock
    
    
    377
    
    
    
    18,434
    
    
    
    (18,434
    )
    
    
    377Additional paid-in capital
    
    
    334,671
    
    
    
    119,165
    
    
    
    (119,165
    )
    
    
    334,671Retained earnings
    
    
    285,575
    
    
    
    (22,364
    )
    
    
    1,538
    
    
    
    264,749Accumulated other comprehensive loss
    
    
    (5,255
    )
    
    
    (21,783
    )
    
    
    
    
    
    
    (27,038
    )Treasury stock, at cost
    
    
    (39,300
    )
    
    
    
    
    
    
    
    
    
    
    (39,300
    )Total stockholders equity
    
    
    576,068
    
    
    
    93,452
    
    
    
    (136,061
    )
    
    
    533,459Total liabilities and stockholders equity
    
    $
    1,678,840
    
    
    $
    262,021
    
    
    $
    (175,678
    )
    
    $
    1,765,183
 20




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (unaudited)  Continued
 MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended September 30, 2008
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Leasing
    
    $
    96,629
    
    
    $
    22,694
    
    
    $
    
    
    
    $
    119,323Sales
    
    
    9,589
    
    
    
    2,939
    
    
    
    
    
    
    
    12,528Other
    
    
    532
    
    
    
    369
    
    
    
    
    
    
    
    901Total revenues
    
    
    106,750
    
    
    
    26,002
    
    
    
    
    
    
    
    132,752Costs and expenses:Cost of sales
    
    
    6,288
    
    
    
    2,283
    
    
    
    
    
    
    
    8,571Leasing, selling and general expenses
    
    
    50,875
    
    
    
    17,591
    
    
    
    
    
    
    
    68,466Integration and merger expenses
    
    
    4,982
    
    
    
    1,077
    
    
    
    
    
    
    
    6,059Depreciation and amortization
    
    
    7,742
    
    
    
    1,963
    
    
    
    
    
    
    
    9,705Total costs and expenses
    
    
    69,887
    
    
    
    22,914
    
    
    
    
    
    
    
    92,801Income from operations
    
    
    36,863
    
    
    
    3,088
    
    
    
    
    
    
    
    39,951Other income (expense):Interest income
    
    
    541
    
    
    
    7
    
    
    
    (541
    )
    
    
    7Interest expense
    
    
    (15,477
    )
    
    
    (3,086
    )
    
    
    541
    
    
    
    (18,022
    )Foreign currency exchange
    
    
    
    
    
    
    (45
    )
    
    
    
    
    
    
    (45
    )Income (loss) before provision for (benefit of) income taxes
    
    
    21,927
    
    
    
    (36
    )
    
    
    
    
    
    
    21,891Provision for (benefit of) income taxes
    
    
    8,493
    
    
    
    180
    
    
    
    (58
    )
    
    
    8,615Net income (loss)
    
    $
    13,434
    
    
    $
    (216
    )
    
    $
    58
    
    
    $
    13,276
 21




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
 MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended September 30, 2009
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Leasing
    
    $
    69,163
    
    
    $
    12,935
    
    
    $
    
    
    
    $
    82,098Sales
    
    
    8,304
    
    
    
    1,210
    
    
    
    (21
    )
    
    
    9,493Other
    
    
    407
    
    
    
    88
    
    
    
    
    
    
    
    495Total revenues
    
    
    77,874
    
    
    
    14,233
    
    
    
    (21
    )
    
    
    92,086Costs and expenses:Cost of sales
    
    
    5,329
    
    
    
    912
    
    
    
    (21
    )
    
    
    6,220Leasing, selling and general expenses
    
    
    37,658
    
    
    
    9,697
    
    
    
    
    
    
    
    47,355Integration, merger and restructuring expenses
    
    
    1,257
    
    
    
    275
    
    
    
    
    
    
    
    1,532Depreciation and amortization
    
    
    7,309
    
    
    
    1,918
    
    
    
    
    
    
    
    9,227Total costs and expenses
    
    
    51,553
    
    
    
    12,802
    
    
    
    (21
    )
    
    
    64,334Income from operations
    
    
    26,321
    
    
    
    1,431
    
    
    
    
    
    
    
    27,752Other income (expense):Interest income
    
    
    495
    
    
    
    2
    
    
    
    (474
    )
    
    
    23Interest expense
    
    
    (13,609
    )
    
    
    (1,461
    )
    
    
    475
    
    
    
    (14,595
    )Foreign currency exchange
    
    
    
    
    
    
    (13
    )
    
    
    
    
    
    
    (13
    )Income (loss) before provision for (benefit of) income taxes
    
    
    13,207
    
    
    
    (41
    )
    
    
    1
    
    
    
    13,167Provision for (benefit of) income taxes
    
    
    5,118
    
    
    
    (26
    )
    
    
    (45
    )
    
    
    5,047Net income (loss)
    
    $
    8,089
    
    
    $
    (15
    )
    
    $
    46
    
    
    $
    8,120
 22




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
 MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended September 30, 2008
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Leasing
    
    $
    229,701
    
    
    $
    32,507
    
    
    $
    
    
    
    $
    262,208Sales
    
    
    21,411
    
    
    
    7,059
    
    
    
    (19
    )
    
    
    28,451Other
    
    
    1,067
    
    
    
    652
    
    
    
    
    
    
    
    1,719Total revenues
    
    
    252,179
    
    
    
    40,218
    
    
    
    (19
    )
    
    
    292,378Costs and expenses:Cost of sales
    
    
    13,898
    
    
    
    5,680
    
    
    
    (16
    )
    
    
    19,562Leasing, selling and general expenses
    
    
    127,851
    
    
    
    27,881
    
    
    
    
    
    
    
    155,732Integration and merger expenses
    
    
    16,274
    
    
    
    1,394
    
    
    
    
    
    
    
    17,668Depreciation and amortization
    
    
    17,956
    
    
    
    3,165
    
    
    
    
    
    
    
    21,121Total costs and expenses
    
    
    175,979
    
    
    
    38,120
    
    
    
    (16
    )
    
    
    214,083Income (loss) from operations
    
    
    76,200
    
    
    
    2,098
    
    
    
    (3
    )
    
    
    78,295Other income (expense):Interest income
    
    
    1,219
    
    
    
    53
    
    
    
    (1,203
    )
    
    
    69Interest expense
    
    
    (26,634
    )
    
    
    (5,155
    )
    
    
    1,203
    
    
    
    (30,586
    )Foreign currency exchange
    
    
    
    
    
    
    (53
    )
    
    
    
    
    
    
    (53
    )Income (loss) before provision for (benefit of) income taxes
    
    
    50,785
    
    
    
    (3,057
    )
    
    
    (3
    )
    
    
    47,725Provision for (benefit of) income taxes
    
    
    19,628
    
    
    
    (573
    )
    
    
    (125
    )
    
    
    18,930Net income (loss)
    
    $
    31,157
    
    
    $
    (2,484
    )
    
    $
    122
    
    
    $
    28,795
 23




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
 MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended September 30, 2009
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Leasing
    
    $
    217,800
    
    
    $
    38,211
    
    
    $
    
    
    
    $
    256,011Sales
    
    
    24,426
    
    
    
    5,006
    
    
    
    (21
    )
    
    
    29,411Other
    
    
    1,304
    
    
    
    448
    
    
    
    
    
    
    
    1,752Total revenues
    
    
    243,530
    
    
    
    43,665
    
    
    
    (21
    )
    
    
    287,174Costs and expenses:Cost of sales
    
    
    15,728
    
    
    
    4,002
    
    
    
    (21
    )
    
    
    19,709Leasing, selling and general expenses
    
    
    118,567
    
    
    
    29,435
    
    
    
    
    
    
    
    148,002Integration, merger and restructuring expenses
    
    
    8,752
    
    
    
    623
    
    
    
    
    
    
    
    9,375Depreciation and amortization
    
    
    24,189
    
    
    
    5,725
    
    
    
    
    
    
    
    29,914Total costs and expenses
    
    
    167,236
    
    
    
    39,785
    
    
    
    (21
    )
    
    
    207,000Income from operations
    
    
    76,294
    
    
    
    3,880
    
    
    
    
    
    
    
    80,174Other income (expense):Interest income
    
    
    1,357
    
    
    
    7
    
    
    
    (1,335
    )
    
    
    29Interest expense
    
    
    (41,626
    )
    
    
    (4,511
    )
    
    
    1,335
    
    
    
    (44,802
    )Foreign currency exchange
    
    
    
    
    
    
    (88
    )
    
    
    
    
    
    
    (88
    )Income (loss) before provision for (benefit of) income taxes
    
    
    36,025
    
    
    
    (712
    )
    
    
    
    
    
    
    35,313Provision for (benefit of) income taxes
    
    
    13,948
    
    
    
    (322
    )
    
    
    (126
    )
    
    
    13,500Net income (loss)
    
    $
    22,077
    
    
    $
    (390
    )
    
    $
    126
    
    
    $
    21,813
 24




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
 MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2008
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash Flows From Operating Activities:Net income (loss)
    
    $
    31,157
    
    
    $
    (2,484
    )
    
    $
    122
    
    
    $
    28,795Adjustments to reconcile income to net cash provided by
(used in) operating activities:Provision for doubtful accounts
    
    
    2,798
    
    
    
    697
    
    
    
    (11
    )
    
    
    3,484Amortization of deferred financing costs
    
    
    1,762
    
    
    
    
    
    
    
    
    
    
    
    1,762Share-based compensation expense
    
    
    3,746
    
    
    
    420
    
    
    
    (261
    )
    
    
    3,905Depreciation and amortization
    
    
    17,956
    
    
    
    3,165
    
    
    
    
    
    
    
    21,121Gain on sale of lease fleet units
    
    
    (5,456
    )
    
    
    (639
    )
    
    
    
    
    
    
    (6,095
    )Loss on disposal of property, plant and equipment
    
    
    466
    
    
    
    
    
    
    
    
    
    
    
    466Other income
    
    
    (1,204
    )
    
    
    1,204
    
    
    
    
    
    
    
    Deferred income taxes
    
    
    19,550
    
    
    
    (572
    )
    
    
    (124
    )
    
    
    18,854Foreign currency exchange loss
    
    
    
    
    
    
    53
    
    
    
    
    
    
    
    53Changes in certain assets and liabilities:Receivables
    
    
    (6,277
    )
    
    
    446
    
    
    
    
    
    
    
    (5,831
    )Inventories
    
    
    (535
    )
    
    
    50
    
    
    
    
    
    
    
    (485
    )Deposits and prepaid expenses
    
    
    1,264
    
    
    
    (27
    )
    
    
    
    
    
    
    1,237Other assets and intangibles
    
    
    (97
    )
    
    
    (39
    )
    
    
    
    
    
    
    (136
    )Accounts payable
    
    
    (7,534
    )
    
    
    (4,444
    )
    
    
    
    
    
    
    (11,978
    )Accrued liabilities
    
    
    9,981
    
    
    
    (547
    )
    
    
    
    
    
    
    9,434Intercompany
    
    
    (640
    )
    
    
    1,249
    
    
    
    (609
    )
    
    
    Net cash provided by (used in) operating activities
    
    
    66,937
    
    
    
    (1,468
    )
    
    
    (883
    )
    
    
    64,586Cash Flows From Investing Activities:Cash paid for businesses acquired
    
    
    (27,568
    )
    
    
    3,359
    
    
    
    
    
    
    
    (24,209
    )Additions to lease fleet units
    
    
    (41,385
    )
    
    
    (15,308
    )
    
    
    
    
    
    
    (56,693
    )Proceeds from sale of lease fleet units
    
    
    14,945
    
    
    
    2,727
    
    
    
    (5
    )
    
    
    17,667Additions to property, plant and equipment
    
    
    (6,732
    )
    
    
    (4,310
    )
    
    
    
    
    
    
    (11,042
    )Proceeds from sale of property, plant and equipment
    
    
    322
    
    
    
    
    
    
    
    
    
    
    
    322Net cash used in investing activities
    
    
    (60,418
    )
    
    
    (13,532
    )
    
    
    (5
    )
    
    
    (73,955
    )Cash Flows From Financing Activities:Net borrowings (repayments) under lines of credit
    
    
    120,983
    
    
    
    17,009
    
    
    
    (2,952
    )
    
    
    135,040Deferred financing costs
    
    
    (14,833
    )
    
    
    
    
    
    
    
    
    
    
    (14,833
    )Principal payments on notes payable
    
    
    (113,188
    )
    
    
    
    
    
    
    
    
    
    
    (113,188
    )Principal payments on capital lease obligations
    
    
    (348
    )
    
    
    (2
    )
    
    
    
    
    
    
    (350
    )Issuance of common stock, net
    
    
    1,446
    
    
    
    
    
    
    
    
    
    
    
    1,446Net cash (used in) provided by financing activities
    
    
    (5,940
    )
    
    
    17,007
    
    
    
    (2,952
    )
    
    
    8,115Effect of exchange rate changes on cash
    
    
    (834
    )
    
    
    (603
    )
    
    
    3,840
    
    
    
    2,403Net (decrease) increase in cash
    
    
    (255
    )
    
    
    1,404
    
    
    
    
    
    
    
    1,149Cash at beginning of period
    
    
    2,033
    
    
    
    1,670
    
    
    
    
    
    
    
    3,703Cash at end of period
    
    $
    1,778
    
    
    $
    3,074
    
    
    $
    
    
    
    $
    4,852
 25




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (unaudited)  Continued
 MOBILE MINI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2009
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash Flows From Operating Activities:Net income (loss)
    
    $
    22,077
    
    
    $
    (390
    )
    
    $
    126
    
    
    $
    21,813Adjustments to reconcile income to net cash provided by
(used in) operating activities:Provision for doubtful accounts
    
    
    1,615
    
    
    
    219
    
    
    
    6
    
    
    
    1,840Provision for restructuring
    
    
    (102
    )
    
    
    
    
    
    
    
    
    
    
    (102
    )Amortization of deferred financing costs
    
    
    3,892
    
    
    
    
    
    
    
    
    
    
    
    3,892Share-based compensation expense
    
    
    4,616
    
    
    
    492
    
    
    
    (2
    )
    
    
    5,106Depreciation and amortization
    
    
    24,189
    
    
    
    5,725
    
    
    
    
    
    
    
    29,914Gain on sale of lease fleet units
    
    
    (8,252
    )
    
    
    (555
    )
    
    
    2
    
    
    
    (8,805
    )Loss on disposal of property, plant and equipment
    
    
    (19
    )
    
    
    19
    
    
    
    
    
    
    
    Deferred income taxes
    
    
    13,315
    
    
    
    (297
    )
    
    
    (146
    )
    
    
    12,872Foreign currency exchange loss
    
    
    
    
    
    
    88
    
    
    
    
    
    
    
    88Changes in certain assets and liabilities:Receivables
    
    
    12,686
    
    
    
    5,367
    
    
    
    
    
    
    
    18,053Inventories
    
    
    1,989
    
    
    
    799
    
    
    
    
    
    
    
    2,788Deposits and prepaid expenses
    
    
    3,272
    
    
    
    (149
    )
    
    
    
    
    
    
    3,123Other assets and intangibles
    
    
    (669
    )
    
    
    
    
    
    
    
    
    
    
    (669
    )Accounts payable
    
    
    (3,814
    )
    
    
    (2,624
    )
    
    
    
    
    
    
    (6,438
    )Accrued liabilities
    
    
    (12,803
    )
    
    
    (2,047
    )
    
    
    
    
    
    
    (14,850
    )Intercompany
    
    
    (8,194
    )
    
    
    7,241
    
    
    
    953
    
    
    
    Net cash provided by operating activities
    
    
    53,798
    
    
    
    13,888
    
    
    
    939
    
    
    
    68,625Cash Flows From Investing Activities:Additions to lease fleet units
    
    
    (10,161
    )
    
    
    (6,361
    )
    
    
    
    
    
    
    (16,522
    )Proceeds from sale of lease fleet units
    
    
    22,756
    
    
    
    2,692
    
    
    
    (17
    )
    
    
    25,431Additions to property, plant and equipment
    
    
    (5,248
    )
    
    
    (2,887
    )
    
    
    
    
    
    
    (8,135
    )Proceeds from sale of property, plant and equipment
    
    
    552
    
    
    
    269
    
    
    
    
    
    
    
    821Other
    
    
    112
    
    
    
    
    
    
    
    
    
    
    
    112Net cash provided by (used in) investing activities
    
    
    8,011
    
    
    
    (6,287
    )
    
    
    (17
    )
    
    
    1,707Cash Flows From Financing Activities:Net (repayments) borrowings under lines of credit
    
    
    (64,409
    )
    
    
    (7,008
    )
    
    
    10,191
    
    
    
    (61,226
    )Principal payments on notes payable
    
    
    (1,161
    )
    
    
    (41
    )
    
    
    
    
    
    
    (1,202
    )Principal payments on capital lease obligations
    
    
    (1,081
    )
    
    
    
    
    
    
    (1
    )
    
    
    (1,082
    )Issuance of common stock, net
    
    
    603
    
    
    
    
    
    
    
    
    
    
    
    603Intercompany
    
    
    818
    
    
    
    (847
    )
    
    
    29
    
    
    
    Net cash (used in) provided by financing activities
    
    
    (65,230
    )
    
    
    (7,896
    )
    
    
    10,219
    
    
    
    (62,907
    )Effect of exchange rate changes on cash
    
    
    1,658
    
    
    
    615
    
    
    
    (11,141
    )
    
    
    (8,868
    )Net (decrease) increase in cash
    
    
    (1,763
    )
    
    
    320
    
    
    
    
    
    
    
    (1,443
    )Cash at beginning of period
    
    
    2,208
    
    
    
    976
    
    
    
    
    
    
    
    3,184Cash at end of period
    
    $
    445
    
    
    $
    1,296
    
    
    $
    
    
    
    $
    1,741
 26




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following discussion of our financial condition and results of operations should be read
together with our December 31, 2008 consolidated financial statements and the accompanying notes
thereto which are included in our Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 2, 2009. This discussion contains forward-looking statements. Forward-looking
statements are based on current expectations and assumptions that involve risks and uncertainties.
Our actual results may differ materially from those anticipated in forward-looking statements.
  Overview
 General
       27




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##### Table of Contents




    
    Interest expense  because we borrow money to partially finance our capital
expenditures, primarily related to the expansion of our lease fleet, interest expense is a
necessary element of our cost to secure this financing to continue generating additional
revenues.
    
    Debt restructuring or extinguishment expense  as historically defined in our revolving
credit facility, debt restructuring or debt extinguishment expenses are not deducted in our
various calculations made under our facility and are treated no differently than interest
expense. As discussed above, interest expense is a necessary element of our cost to finance
a portion of the capital expenditures needed for the growth of our business.
    
    Income taxes  EBITDA, as defined, does not reflect income taxes or the requirements for
any tax payments.
    
    Depreciation and amortization  because we are a leasing company, our business is very
capital intensive and we hold acquired assets for a period of time before they generate
revenues, cash flow and earnings; therefore, depreciation and amortization expense is a
necessary element of our business.
  
    
    increasing or decreasing trends in EBITDA;
 28




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##### Table of Contents




    
    how EBITDA compares to levels of debt and interest expense; and
    
    whether EBITDA historically has remained at positive levels.
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2009
    
    
    2008
    
    
    2009(In thousands)EBITDA
    
    $
    49,618
    
    
    $
    36,989
    
    
    $
    99,432
    
    
    $
    110,029Interest paid
    
    
    (9,354
    )
    
    
    (15,722
    )
    
    
    (16,344
    )
    
    
    (43,424
    )Income and franchise taxes paid
    
    
    (59
    )
    
    
    (92
    )
    
    
    (488
    )
    
    
    (964
    )Provision for restructuring
    
    
    
    
    
    
    (102
    )
    
    
    
    
    
    
    (102
    )Share-based compensation expense
    
    
    1,541
    
    
    
    1,825
    
    
    
    3,905
    
    
    
    5,106Gain on sale of lease fleet units
    
    
    (3,001
    )
    
    
    (3,026
    )
    
    
    (6,095
    )
    
    
    (8,805
    )Loss on disposal of property, plant and equipment
    
    
    437
    
    
    
    (36
    )
    
    
    466
    
    
    
    Changes in certain assets and liabilities, net
of effects of businesses acquired:Receivables
    
    
    (82
    )
    
    
    2,330
    
    
    
    (2,347
    )
    
    
    19,893Inventories
    
    
    3,085
    
    
    
    1,149
    
    
    
    (485
    )
    
    
    2,788Deposits and prepaid expenses
    
    
    337
    
    
    
    688
    
    
    
    1,237
    
    
    
    3,123Other assets and intangibles
    
    
    (235
    )
    
    
    (228
    )
    
    
    (136
    )
    
    
    (669
    )Accounts payable and accrued liabilities
    
    
    (19,242
    )
    
    
    (1,986
    )
    
    
    (14,559
    )
    
    
    (18,350
    )Net cash provided by operating activities
    
    $
    23,045
    
    
    $
    21,789
    
    
    $
    64,586
    
    
    $
    68,625
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2009
    
    
    2008
    
    
    2009(In thousands except percentages)Net income
    
    $
    13,276
    
    
    $
    8,120
    
    
    $
    28,795
    
    
    $
    21,813Interest expense
    
    
    18,022
    
    
    
    14,595
    
    
    
    30,586
    
    
    
    44,802Provision for income taxes
    
    
    8,615
    
    
    
    5,047
    
    
    
    18,930
    
    
    
    13,500Depreciation and amortization
    
    
    9,705
    
    
    
    9,227
    
    
    
    21,121
    
    
    
    29,914EBITDA
    
    $
    49,618
    
    
    $
    36,989
    
    
    $
    99,432
    
    
    
    110,029EBITDA margin(1)
    
    
    37.4
    %
    
    
    40.2
    %
    
    
    34.0
    %
    
    
    38.3
    %EBITDA and EBITDA margin(1)
excluding integration,
merger and restructuring
expenses:
    
    $
    55,677
    
    
    $
    38,521
    
    
    $
    117,100
    
    
    $
    119,40441.9
    %
    
    
    41.8
    %
    
    
    40.1
    %
    
    
    41.6
    %
 
 (1)
    
    EBITDA margin is calculated as EBITDA divided by total revenues expressed as a percentage.  29




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##### Table of Contents



Accounting and Operating Overview
      Dollars
    
    
    Units(In thousands)Lease fleet at December 31, 2008, net
    
    $
    1,078,156
    
    
    
    273,748Purchases:Container purchases and containers, including freight
    
    
    598
    
    
    
    292Manufactured units:Steel storage containers, combination storage/office combo units and steel security offices
    
    
    939
    
    
    
    67Wood mobile offices
    
    
    41
    
    
    
    2Remanufacturing and customization of units purchased or obtained through acquisitions (1)
    
    
    13,942
    
    
    
    591
    (2)Other
    
    
    (6,204
    )
    
    
    (3,104
    )(3)Adjustments to valuations on acquired MSG trailers
    
    
    (5,159
    )Cost of sales from lease fleet
    
    
    (16,672
    )
    
    
    (11,373
    )Effect of exchange rate changes
    
    
    10,169Depreciation
    
    
    (15,142
    )Lease fleet at September 30, 2009, net
    
    $
    1,060,668
    
    
    
    260,223
 30




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##### Table of Contents



(1)
    
    Does not include any routine maintenance, which is expensed as incurred.(2)
    
    These units include the net additional units that were the result of splitting steel
containers into one or more shorter units, such as splitting a 40-foot container into two
20-foot units, or one 25-foot unit and one 15-foot unit and includes units moved from
finished goods to the lease fleet.(3)
    
    Includes net units transferred in and out of the lease fleet.  Number of
    
    
    PercentageBook Value
    
    
    Units
    
    
    of Units(In thousands)Steel storage containers
    
    $
    621,127
    
    
    
    208,908
    
    
    
    80
    %Mobile offices
    
    
    527,348
    
    
    
    42,131
    
    
    
    16
    %Van trailers
    
    
    6,088
    
    
    
    9,184
    
    
    
    4
    %Other
    
    
    2,6601,157,223Accumulated depreciation
    
    
    (96,555
    )$
    1,060,668
    
    
    
    260,223
    
    
    
    100
    %
   31




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##### Table of Contents



RESULTS OF OPERATIONS
 Three Months Ended September 30, 2009, Compared to
Three Months Ended September 30, 2008
         32




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##### Table of Contents



Nine Months Ended September 30, 2009, Compared to
Nine Months Ended September 30, 2008
        33




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
   Revolving Credit Facility.
    34




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##### Table of Contents



Operating Activities.
 Investing Activities.
 Financing Activities.
  CONTRACTUAL OBLIGATIONS AND COMMITMENTS
    35




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##### Table of Contents



OFF-BALANCE SHEET TRANSACTIONS
  SEASONALITY
  EFFECTS OF INFLATION
  CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS
   Revenue Recognition.
 Share-Based Compensation.
 36




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##### Table of Contents



Allowance for Doubtful Accounts.
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2008
    
    2009
    
    2008
    
    2009(In thousands except per share data)As Reported:Net income
    
    $
    13,276
    
    
    $
    8,120
    
    
    $
    28,795
    
    
    $
    21,813Diluted earnings per share
    
    $
    0.31
    
    
    $
    0.19
    
    
    $
    0.77
    
    
    $
    0.51As adjusted for change in estimates:Net income
    
    $
    12,929
    
    
    $
    8,063
    
    
    $
    28,203
    
    
    $
    21,530Diluted earnings per share
    
    $
    0.30
    
    
    $
    0.19
    
    
    $
    0.75
    
    
    $
    0.50
  Impairment of Goodwill.
 
    
    significant under-performance relative to historical, expected or projected future
operating results;
    
    significant changes in the manner of our use of the acquired assets or the strategy for
our overall business;
    
    our market capitalization relative to net book value; and
    
    significant negative industry or general economic trends.
  37




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##### Table of Contents



Impairment Long-Lived Assets
 Depreciation Policy.
    38




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##### Table of Contents



Useful
    
    Three Months Ended
    
    Nine Months EndedSalvage
    
    Life in
    
    September 30,
    
    September 30,Value
    
    Years
    
    2008
    
    2009
    
    2008
    
    2009(In thousands except per share data)As reported (1):
    
    
    55
    %
    
    
    30Net income
    
    
    
    
    
    
    
    
    
    $
    N/A
    
    
    $
    8,120
    
    
    $
    N/A
    
    
    $
    21,813Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    N/A
    
    
    $
    0.19
    
    
    $
    N/A
    
    
    $
    0.51As adjusted for change in estimates:
    
    
    70
    %
    
    
    20Net income
    
    
    
    
    
    
    
    
    
    $
    13,276
    
    
    $
    8,120
    
    
    $
    28,795
    
    
    $
    21,813Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    0.31
    
    
    $
    0.19
    
    
    $
    0.77
    
    
    $
    0.51As adjusted for change in estimates (2):
    
    
    62.5
    %
    
    
    25Net income
    
    
    
    
    
    
    
    
    
    $
    13,276
    
    
    $
    8,120
    
    
    $
    28,795
    
    
    $
    21,813Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    0.31
    
    
    $
    0.19
    
    
    $
    0.77
    
    
    $
    0.51As adjusted for change in estimates:
    
    
    50
    %
    
    
    20Net income
    
    
    
    
    
    
    
    
    
    $
    11,988
    
    
    $
    6,684
    
    
    $
    25,205
    
    
    $
    17,526Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    0.28
    
    
    $
    0.15
    
    
    $
    0.67
    
    
    $
    0.41As adjusted for change in estimates:
    
    
    40
    %
    
    
    40Net income
    
    
    
    
    
    
    
    
    
    $
    13,276
    
    
    $
    8,120
    
    
    $
    28,795
    
    
    $
    21,813Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    0.31
    
    
    $
    0.19
    
    
    $
    0.77
    
    
    $
    0.51As adjusted for change in estimates:
    
    
    30
    %
    
    
    25Net income
    
    
    
    
    
    
    
    
    
    $
    11,602
    
    
    $
    6,253
    
    
    $
    24,128
    
    
    $
    16,239Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    0.27
    
    
    $
    0.14
    
    
    $
    0.64
    
    
    $
    0.38As adjusted for change in estimates:
    
    
    25
    %
    
    
    25Net income
    
    
    
    
    
    
    
    
    
    $
    11,344
    
    
    $
    5,965
    
    
    $
    23,410
    
    
    $
    15,382Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    0.26
    
    
    $
    0.14
    
    
    $
    0.62
    
    
    $
    0.36
 
 (1)
    
    Effective April 2009(2)
    
    Prior to April 2009 Insurance Reserves.
  Contingencies. Deferred Taxes.
 39




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##### Table of Contents



Purchase Accounting.
  Earnings Per Share.
  RECENT ACCOUNTING PRONOUNCEMENTS
 Accounting Standards Codification
 Fair Value Measurements
 Interim Disclosures about Fair Value.
 40




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##### Table of Contents



Business Combinations.
  Determining the Useful Life of Intangible Assets
 Subsequent Events
 Transfers of Financial Assets.
 Fair Value Measurement of Liabilities
      41




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##### Table of Contents



Multiple Element Arrangements
 42




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##### Table of Contents



CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS [CHRIS- ANY UPDATES?]
  
    
    a continued economic slowdown in the U.S. and/or the U.K. that affects any significant
portion of our customer base, or the geographic regions
where we operate in those countries
    
    our ability to manage growth at existing or new locations
    
    our European operations may divert our resources from other aspects of our business
    
    our ability to obtain borrowings under our credit facility or additional debt or equity
financing on acceptable terms
    
    changes in the supply and price of used ocean-going containers
    
    changes in the supply and cost of the raw materials we use in refurbishing or
remanufacturing storage units
    
    competitive developments affecting our industry, including pricing pressures in newer
markets
    
    the timing and number of new branches that we open or acquire
    
    our ability to protect our patents and other intellectual property
    
    currency exchange and interest rate fluctuations
    
    governmental laws and regulations affecting domestic and foreign operations, including
tax obligations, union formation and zoning laws
    
    changes in generally accepted accounting principles
    
    changes in local zoning laws affecting either our ability to
operate in certain areas or our customers ability to use our
products
    
    any changes in business, political and economic conditions due to the threat of future
terrorist activity in the U.S. and other parts of the world and related U.S. military action
overseas
    
    increases in costs and expenses, including cost of raw materials and employment costs
  43




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##### Table of Contents



www.mobilemini.com
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Swap Agreement.
  Impact of Foreign Currency Rate Changes.
 
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures.
   Changes in Internal Controls
  44




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1A. RISK FACTORS
  
 ITEM 6. EXHIBITS
 Exhibits
 Number
    
    Description31.1
    
    Certification of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation S-K.31.2
    
    Certification of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation S-K.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to item
601(b)(32) of Regulation S-K.
 45




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##### Table of Contents



SIGNATURES
  MOBILE MINI, INC.Date: November 9, 2009
    /s/ Mark E. FunkMark E. FunkChief Financial Officer &
Executive Vice President 46