##### 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, 2008
 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
 
 (MOBILE MINI LOGO)
  
 Delaware
    
    86-0748362(State or other jurisdiction of
    
    (IRS Employerincorporation or organization)
    
    Identification No.)
 7420 S. Kyrene Road, Suite 101
Tempe, Arizona 85283
 (480) 894-6311
 
 þ o
  Large accelerated filer
þ
    
    Accelerated filer
o
    
    Non-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, 2008
 TABLE OF CONTENTS
  
 PAGENUMBERPART I.
 FINANCIAL INFORMATIONItem 1. Consolidated Financial Statements
    
    
    3Condensed Consolidated Balance Sheets
December 31, 2007 and September 30, 2008 (unaudited)
    
    
    3Condensed Consolidated Statements of Income (unaudited):Three Months Ended September 30, 2007 and September 30, 2008
    
    
    4Nine Months Ended September, 2007 and September 30, 2008
    
    
    5Condensed Consolidated Statements of Cash Flows (unaudited)Nine Months Ended September 30, 2007 and September 30, 2008
    
    
    6Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    30Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    45Item 4. Controls and Procedures
    
    
    45PART II.
 OTHER INFORMATIONItem 1A. Risk Factors
    
    
    46Item 6. Exhibits
    
    
    47SIGNATURESEX-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, 2007
    
    
    September 30, 2008(See Note A)
    
    
    (unaudited)ASSETSCash and cash equivalents
    
    $
    3,703
    
    
    $
    4,852Receivables,
net of allowance for doubtful accounts of $3,993 and $7,560 at December
31, 2007 and September 30, 2008,
respectively
    
    
    37,221
    
    
    
    68,809Inventories
    
    
    29,431
    
    
    
    38,650Lease fleet, net
    
    
    802,923
    
    
    
    1,096,126Property, plant and equipment, net
    
    
    55,363
    
    
    
    91,008Deposits and prepaid expenses
    
    
    11,334
    
    
    
    12,978Other assetsand intangibles, net
    
    
    9,086
    
    
    
    82,909Goodwill
    
    
    79,790
    
    
    
    544,403Total assets
    
    $
    1,028,851
    
    
    $
    1,939,735LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Accounts payable
    
    $
    20,560
    
    
    $
    26,694Accrued liabilities
    
    
    38,941
    
    
    
    97,835Lines of credit
    
    
    237,857
    
    
    
    589,086Notes payable
    
    
    743
    
    
    
    438Obligations under capital leases
    
    
    10
    
    
    
    5,906Senior notes, net
    
    
    149,379
    
    
    
    345,609Deferred income taxes
    
    
    123,471
    
    
    
    195,084Total liabilities
    
    
    570,961
    
    
    
    1,260,652Commitments and contingenciesRedeemable convertible preferred stock; $.01
par value, 20,000 shares authorized, 0 and
8,556 issued and outstanding with
liquidation preference of $0 and $153,990 at
December 31, 2007 and September 30, 2008,
respectively
    
    
    
    
    
    
    153,990Stockholders equity:Common stock; $.01 par value, 95,000 shares
authorized, 34,573 and 34,869 issued and
outstanding at December 31, 2007 and
September 30, 2008, respectively
    
    
    367
    
    
    
    370Additional paid-in capital
    
    
    278,593
    
    
    
    327,368Retained earnings
    
    
    213,894
    
    
    
    242,691Accumulated other comprehensive income
    
    
    4,336
    
    
    
    (6,036
    )Treasury stock, at cost, 2,175 shares
    
    
    (39,300
    )
    
    
    (39,300
    )Total stockholders equity
    
    
    457,890
    
    
    
    525,093Total liabilities and stockholders equity
    
    $
    1,028,851
    
    
    $
    1,939,735
  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 30,2007
    
    
    2008Revenues:Leasing
    
    $
    73,982
    
    
    $
    119,323Sales
    
    
    8,691
    
    
    
    12,528Other
    
    
    809
    
    
    
    901Total revenues
    
    
    83,482
    
    
    
    132,752Costs and expenses:Cost of sales
    
    
    5,975
    
    
    
    8,571Leasing, selling and general expenses
    
    
    44,693
    
    
    
    68,466Integration and merger expenses
    
    
    
    
    
    
    6,059Depreciation and amortization
    
    
    5,581
    
    
    
    9,705Total costs and expenses
    
    
    56,249
    
    
    
    92,801Income from operations
    
    
    27,233
    
    
    
    39,951Other income (expense):Interest income
    
    
    34
    
    
    
    7Interest expense
    
    
    (6,241
    )
    
    
    (18,022
    )Foreign currency exchange
    
    
    54
    
    
    
    (45
    )Income before provision for income taxes
    
    
    21,080
    
    
    
    21,891Provision for income taxes
    
    
    8,376
    
    
    
    8,615Net income
    
    
    12,704
    
    
    
    13,276Undistributed earnings allocable to preferred stock
    
    
    
    
    
    
    (2,650
    )Net income available to common stockholders
    
    $
    12,704
    
    
    $
    10,626Earnings per share:Basic
    
    $
    0.35
    
    
    $
    0.31Diluted
    
    $
    0.35
    
    
    $
    0.31Weighted average number of common and common share equivalents outstanding:Basic
    
    
    35,996
    
    
    
    34,174Diluted
    
    
    36,717
    
    
    
    43,257
  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 30,2007
    
    
    2008Revenues:Leasing
    
    $
    210,397
    
    
    $
    262,208Sales
    
    
    22,883
    
    
    
    28,451Other
    
    
    1,472
    
    
    
    1,719Total revenues
    
    
    234,752
    
    
    
    292,378Costs and expenses:Cost of sales
    
    
    15,594
    
    
    
    19,562Leasing, selling and general expenses
    
    
    121,866
    
    
    
    155,732Integration and merger expenses
    
    
    
    
    
    
    17,668Depreciation and amortization
    
    
    15,585
    
    
    
    21,121Total costs and expenses
    
    
    153,045
    
    
    
    214,083Income from operations
    
    
    81,707
    
    
    
    78,295Other income (expense):Interest income
    
    
    70
    
    
    
    69Interest expense
    
    
    (18,294
    )
    
    
    (30,586
    )Debt extinguishment expense
    
    
    (11,224
    )
    
    
    Foreign currency exchange
    
    
    54
    
    
    
    (53
    )Income before provision for income taxes
    
    
    52,313
    
    
    
    47,725Provision for income taxes
    
    
    20,581
    
    
    
    18,930Net income
    
    
    31,732
    
    
    
    28,795Undistributed earnings allocable to preferred stock
    
    
    
    
    
    
    (2,690
    )Net income available to common stockholders
    
    $
    31,732
    
    
    $
    26,105Earnings per share:Basic
    
    $
    0.89
    
    
    $
    0.77Diluted
    
    $
    0.86
    
    
    $
    0.77Weighted average number of common and common share equivalents outstanding:Basic
    
    
    35,818
    
    
    
    34,124Diluted
    
    
    36,736
    
    
    
    37,512
  5




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##### Table of Contents



MOBILE MINI, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (unaudited)
 Nine Months Ended September 30,2007
    
    
    2008Cash Flows From Operating Activities:Net income
    
    $
    31,732
    
    
    $
    28,795Adjustments to reconcile income to net cash provided by operating activities:Debt extinguishment expense
    
    
    2,298
    
    
    
    Provision for doubtful accounts
    
    
    1,822
    
    
    
    3,484Amortization of deferred financing costs
    
    
    644
    
    
    
    1,762Share-based compensation expense
    
    
    3,272
    
    
    
    3,905Depreciation and amortization
    
    
    15,585
    
    
    
    21,121Gain on sale of lease fleet units
    
    
    (4,176
    )
    
    
    (6,095
    )Loss on disposal of property, plant and equipment
    
    
    37
    
    
    
    466Deferred income taxes
    
    
    19,529
    
    
    
    18,854Foreign currency exchange
    
    
    (54
    )
    
    
    53Changes in certain assets and liabilities, net of effect of businesses acquired:Receivables
    
    
    (5,537
    )
    
    
    (5,831
    )Inventories
    
    
    (2,478
    )
    
    
    (485
    )Deposits and prepaid expenses
    
    
    (1,190
    )
    
    
    1,237Other assets and intangibles
    
    
    (146
    )
    
    
    (136
    )Accounts payable
    
    
    3,526
    
    
    
    (11,978
    )Accrued liabilities
    
    
    2,221
    
    
    
    9,434Net cash provided by operating activities
    
    
    67,085
    
    
    
    64,586Cash Flows From Investing Activities:Cash paid for businesses acquired
    
    
    (6,066
    )
    
    
    (24,209
    )Additions to lease fleet, excluding acquisitions
    
    
    (97,424
    )
    
    
    (56,693
    )Proceeds from sale of lease fleet units
    
    
    11,940
    
    
    
    17,667Additions to property, plant and equipment
    
    
    (15,647
    )
    
    
    (11,042
    )Proceeds from sale of property, plant and equipment
    
    
    68
    
    
    
    322Net cash used in investing activities
    
    
    (107,129
    )
    
    
    (73,955
    )Cash Flows From Financing Activities:Net (repayments) borrowings under lines of credit
    
    
    (5,971
    )
    
    
    135,040Proceeds from issuance of notes payable
    
    
    1,216
    
    
    
    Proceeds from issuance of 6.875% Senior Notes
    
    
    149,322
    
    
    
    Redemption of 9.5% Senior Notes
    
    
    (97,500
    )
    
    
    Deferred financing costs
    
    
    (3,682
    )
    
    
    (14,833
    )Principal payments on notes payable
    
    
    (864
    )
    
    
    (113,188
    )Principal payments on capital lease obligations
    
    
    (16
    )
    
    
    (350
    )Issuance of common stock, net
    
    
    5,337
    
    
    
    1,446Purchase of treasury stock
    
    
    (7,737
    )
    
    
    Net cash provided by financing activities
    
    
    40,105
    
    
    
    8,115Effect of exchange rate changes on cash
    
    
    505
    
    
    
    2,403Net increase in cash
    
    
    566
    
    
    
    1,149Cash at beginning of period
    
    
    1,370
    
    
    
    3,703Cash at end of period
    
    $
    1,936
    
    
    $
    4,852Supplemental Disclosure of Cash Flow Information:Interest rate swap changes in value charged to equity
    
    $
    327
    
    
    $
    850Preferred shares issued in business combination
    
    $
    
    
    
    $
    197
  6




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
       Merger
  Credit Agreement
   7




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
      Debtors Accounting for Changes
in Line-of-Credit or Revolving-Debt Arrangements
 Mobile Mini Supplemental Indenture
  MSG Supplemental Indenture
  8




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
   Preferred Stock
      Fair Value Measurement
 9




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
 The Fair Value Option for Financial Assets and
Financial Liabilities Accounting for Derivative Instruments and Hedging Activities,
 Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements  An Amendment of ARB No. 51 Consolidated Financial Statements
 Disclosures about Derivative Instruments and Hedging
Activities  An Amendment of FASB Statement No. 133
 Determining the Useful Life of Intangible Assets
   10




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
 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
  QuotedPrices inActive Markets
    
    
    SignificantFair Value
    
    
    for
    
    
    Other
    
    
    SignificantSeptember
    
    
    Identical
    
    
    Observable
    
    
    Unobservable30,
    
    
    Assets
    
    
    Inputs
    
    
    Inputs
    
    
    Valuation2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TechniqueInterest rate swap agreements
    
    
    $(2,635)
    
    
    
    $
    
    
    
    $(2,635)
    
    
    
    $
    
    
    
    (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, 2008, the fair value of interest rate
swap agreements is recorded in accrued liabilities in the Companys condensed consolidated
balance sheet.  Participating Securities and the Two-Class Method under FASB Statement 128 )
 11




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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 30,2007
    
    
    2008
    
    
    2007
    
    
    2008(In thousands except earnings per share data)Historical net income per share:Numerator:Net income
    
    $
    12,704
    
    
    $
    13,276
    
    
    $
    31,732
    
    
    $
    28,795Less: Earnings allocable to preferred stock
    
    
    
    
    
    
    (2,650
    )
    
    
    
    
    
    
    (2,690
    )Net income available to common stockholders
    
    $
    12,704
    
    
    $
    10,626
    
    
    $
    31,732
    
    
    $
    26,105Basic EPS Denominator:Common stock outstanding beginning of period
    
    
    36,125
    
    
    
    34,146
    
    
    
    35,640
    
    
    
    34,041Effect of weighting shares:Weighted shares issued during the
period ended September 30,
    
    
    10
    
    
    
    28
    
    
    
    225
    
    
    
    83Weighted shares purchased during the
period ended September 30,
    
    
    (139
    )
    
    
    
    
    
    
    (47
    )
    
    
    Denominator for basic net income per share
    
    
    35,996
    
    
    
    34,174
    
    
    
    35,818
    
    
    
    34,124Diluted EPS Denominator:Common stock outstanding beginning of period
    
    
    36,125
    
    
    
    34,146
    
    
    
    35,640
    
    
    
    34,041Effect of weighting shares:Weighted shares issued during the
period ended September 30,
    
    
    10
    
    
    
    28
    
    
    
    225
    
    
    
    83Weighted shares purchased during the
period ended September 30,
    
    
    (139
    )
    
    
    
    
    
    
    (47
    )
    
    
    Dilutive effect of employee stock
options on nonvested share-swards
assumed converted during the period
ended September 30,
    
    
    721
    
    
    
    527
    
    
    
    918
    
    
    
    442Dilutive effect of convertible
preferred stock assumed converted
during the period ended September 30
    
    
    
    
    
    
    8,556
    
    
    
    
    
    
    
    2,946Denominator for diluted net income per share
    
    
    36,717
    
    
    
    43,257
    
    
    
    36,736
    
    
    
    37,512Basic net income per share
    
    $
    0.35
    
    
    $
    0.31
    
    
    $
    0.89
    
    
    $
    0.77Diluted net income per share
    
    $
    0.35
    
    
    $
    0.31
    
    
    $
    0.86
    
    
    $
    0.77
  12




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
         Number of
    
    
    WeightedShares
    
    
    Average(In thousands)
    
    
    Exercise PriceBalance at December 31, 2007
    
    
    2,028
    
    
    $
    17.02Granted
    
    
    
    
    
    
    Exercised
    
    
    (131
    )
    
    
    11.04Terminated/expired
    
    
    (126
    )
    
    
    16.03Balance at September 30, 2008
    
    
    1,771
    
    
    $
    17.54
  13




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##### Table of Contents



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, 2007
    
    
    532
    
    
    $
    22.46Awarded
    
    
    190
    
    
    
    20.44Released
    
    
    (44
    )
    
    
    22.31Forfeited
    
    
    (24
    )
    
    
    20.65Nonvested at September 30, 2008
    
    
    654
    
    
    $
    21.95
  WeightedNumber of
    
    
    Weighted
    
    
    Average
    
    
    AggregateShares
    
    
    Average
    
    
    Remaining
    
    
    Intrinsic(In
    
    
    Exercise
    
    
    Contractual
    
    
    Value (Inthousands)
    
    
    Price
    
    
    Term
    
    
    thousands)Outstanding
    
    
    1,771
    
    
    $
    17.54
    
    
    
    5.3
    
    
    $
    6,836Vested and expected to vest
    
    
    1,619
    
    
    $
    16.98
    
    
    
    5.1
    
    
    $
    6,658Exercisable
    
    
    1,418
    
    
    $
    16.25
    
    
    
    4.9
    
    
    $
    6,232
  Nine Months EndedSeptember 30, 2007Risk-free interest rate
    
    
    4.59%Expected holding period (years)
    
    
    3.00%Expected stock volatility
    
    
    33.24%Expected dividend rate
    
    
    0.00%
    14




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
 December 31, 2007
    
    
    September 30, 2008(In thousands)Raw material and supplies
    
    $
    21,801
    
    
    $
    26,766Work-in-process
    
    
    2,819
    
    
    
    2,279Finished portable storage units
    
    
    4,811
    
    
    
    9,605$
    29,431
    
    
    $
    38,650
 
 Accounting for Uncertainty in Income Taxes-an
interpretation of FASB Statement No. 109 Accounting for Income Taxes
     December 31, 2007
    
    
    September 30, 2008(In thousands)Land
    
    $
    772
    
    
    $
    10,577Vehicles and equipment
    
    
    60,490
    
    
    
    80,132Buildings and improvements
    
    
    11,514
    
    
    
    15,666Office fixtures and equipment
    
    
    11,579
    
    
    
    18,48784,355
    
    
    
    124,862Less accumulated depreciation
    
    
    (28,992
    )
    
    
    (33,854
    )$
    55,363
    
    
    $
    91,008
  15




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
 NOTE J
   
  December 31, 2007
    
    
    September 30, 2008(In thousands)Steel storage containers
    
    $
    459,665
    
    
    $
    620,087Offices
    
    
    402,640
    
    
    
    531,940Van trailers
    
    
    2,330
    
    
    
    16,363Other
    
    
    956
    
    
    
    2,663865,591
    
    
    
    1,171,053Accumulated depreciation
    
    
    (62,668
    )
    
    
    (74,927
    )$
    802,923
    
    
    $
    1,096,126
 NOTE K
 Disclosures about Segments of
an Enterprise and Related Information,
  16




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
     Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2008
    
    
    2007
    
    
    2008(In thousands)North America
    
    $
    76,483
    
    
    $
    106,750
    
    
    $
    216,453
    
    
    $
    252,179United Kingdom
    
    
    5,329
    
    
    
    24,520
    
    
    
    13,639
    
    
    
    35,355The Netherlands
    
    
    1,670
    
    
    
    1,482
    
    
    
    4,660
    
    
    
    4,844Total revenues
    
    $
    83,482
    
    
    $
    132,752
    
    
    $
    234,752
    
    
    $
    292,378
  December 31, 2007
    
    

September 30, 2008(In thousands)North America
    
    $
    810,573
    
    
    $
    1,032,276United Kingdom
    
    
    43,984
    
    
    
    150,914The Netherlands
    
    
    3,729
    
    
    
    3,944Total long-lived assets
    
    $
    858,286
    
    
    $
    1,187,134
 NOTE L
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2008
    
    
    2007
    
    
    2008(In thousands)Net income
    
    $
    12,704
    
    
    $
    13,276
    
    
    $
    31,732
    
    
    $
    28,795Net unrealized holding loss on derivatives
    
    
    (125
    )
    
    
    (642
    )
    
    
    (327
    )
    
    
    (850
    )Foreign currency translation adjustment
    
    
    1,417
    
    
    
    (10,305
    )
    
    
    2,646
    
    
    
    (9,522
    )Total comprehensive income
    
    $
    13,996
    
    
    $
    2,329
    
    
    $
    34,051
    
    
    $
    18,423
 17




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
  December 31, 2007
    
    
    September 30, 2008(In thousands)Accumulated net unrealized holding gain on derivatives
    
    $
    (769
    )
    
    $
    (1,619
    )Foreign currency translation adjustment
    
    
    5,105
    
    
    
    (4,417
    )Total accumulated other comprehensive income
    
    $
    4,336
    
    
    $
    (6,036
    )
       Business Combinations
  MSG
    
    Other Acquisitions
    
    Total2008(In thousands)Cash
    
    $
    21,088
    
    
    $
    3,121
    
    
    $
    24,209Assumption of debt
    
    
    540,552
    
    
    
    
    
    
    
    540,552Issuance of convertible
preferred stock, as
initially valued
    
    
    196,600
    
    
    
    
    
    
    
    196,600$
    758,240
    
    
    $
    3,121
    
    
    $
    761,361
  18




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
  MSG
    
    Other Acquisitions
    
    Total2008(In thousands)Receivables
    
    $
    30,937
    
    
    $
    65
    
    
    $
    31,002Inventories
    
    
    8,694
    
    
    
    296
    
    
    
    8,990Lease fleet, net
    
    
    272,277
    
    
    
    995
    
    
    
    273,272Property, plant and
equipment, net
    
    
    34,062
    
    
    
    40
    
    
    
    34,102Deposits, prepaid
expenses and other assets
    
    
    3,098
    
    
    
    
    
    
    
    3,098Intangible assets:Customer lists
    
    
    13,737
    
    
    
    159
    
    
    
    13,896Trade names
    
    
    46,473
    
    
    
    
    
    
    
    46,473Non-compete agreements
    
    
    955
    
    
    
    50
    
    
    
    1,005Goodwill
    
    
    471,947
    
    
    
    1,628
    
    
    
    473,575Liabilities and other
    
    
    (68,654
    )
    
    
    (49
    )
    
    
    (68,703
    )Deferred taxes
    
    
    (55,285
    )
    
    
    (64
    )
    
    
    (55,349
    )$
    758,241
    
    
    $
    3,120
    
    
    $
    761,361
      19




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##### Table of Contents



MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2007
    
    
    2008(In thousands)Total revenue
    
    $
    143,493
    
    
    $
    403,616
    
    
    $
    412,256Net income
    
    $
    11,515
    
    
    $
    23,601
    
    
    $
    31,875Diluted earnings per share
    
    $
    0.25
    
    
    $
    0.52
    
    
    $
    0.74
         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 CONSOLIDATING BALANCE SHEETS
As of September 30, 2008
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCash and cash equivalents
    
    $
    1,778
    
    
    $
    3,074
    
    
    $
    
    
    
    $
    4,852Receivables, net
    
    
    50,765
    
    
    
    18,044
    
    
    
    
    
    
    
    68,809Inventories
    
    
    35,242
    
    
    
    3,457
    
    
    
    (49
    )
    
    
    38,650Lease fleet, net
    
    
    960,679
    
    
    
    135,447
    
    
    
    
    
    
    
    1,096,126Property, plant and equipment, net
    
    
    71,597
    
    
    
    19,411
    
    
    
    
    
    
    
    91,008Deposits and prepaid expenses
    
    
    10,651
    
    
    
    2,327
    
    
    
    
    
    
    
    12,978Other assets and intangibles, net
    
    
    60,453
    
    
    
    22,456
    
    
    
    
    
    
    
    82,909Goodwill
    
    
    480,106
    
    
    
    64,297
    
    
    
    
    
    
    
    544,403Intercompany
    
    
    114,179
    
    
    
    36,322
    
    
    
    (150,501
    )
    
    
    Total assets
    
    $
    1,785,450
    
    
    $
    304,835
    
    
    $
    (150,550
    )
    
    $
    1,939,735LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Accounts payable
    
    $
    15,605
    
    
    $
    11,089
    
    
    $
    
    
    
    $
    26,694Accrued liabilities
    
    
    88,856
    
    
    
    8,979
    
    
    
    
    
    
    
    97,835Lines of credit
    
    
    461,060
    
    
    
    128,026
    
    
    
    
    
    
    
    589,086Notes payable
    
    
    330
    
    
    
    108
    
    
    
    
    
    
    
    438Obligations under capital leases
    
    
    5,904
    
    
    
    2
    
    
    
    
    
    
    
    5,906Senior notes, net
    
    
    345,609
    
    
    
    
    
    
    
    
    
    
    
    345,609Deferred income taxes
    
    
    177,836
    
    
    
    17,637
    
    
    
    (389
    )
    
    
    195,084Intercompany
    
    
    23
    
    
    
    29,321
    
    
    
    (29,344
    )
    
    
    Total liabilities
    
    
    1,095,223
    
    
    
    195,162
    
    
    
    (29,733
    )
    
    
    1,260,652Commitments and contingenciesRedeemable convertible preferred stock
    
    
    153,990
    
    
    
    
    
    
    
    
    
    
    
    153,990Stockholders equity:Common stock
    
    
    370
    
    
    
    31,385
    
    
    
    (31,385
    )
    
    
    370Additional paid-in capital
    
    
    327,369
    
    
    
    89,772
    
    
    
    (89,773
    )
    
    
    327,368Retained earnings
    
    
    248,562
    
    
    
    (6,212
    )
    
    
    341
    
    
    
    242,691Accumulated other comprehensive income
    
    
    (764
    )
    
    
    (5,272
    )
    
    
    
    
    
    
    (6,036
    )Treasury stock, at cost
    
    
    (39,300
    )
    
    
    
    
    
    
    
    
    
    
    (39,300
    )Total stockholders equity
    
    
    536,237
    
    
    
    109,673
    
    
    
    (120,817
    )
    
    
    525,093Total liabilities and stockholders equity
    
    $
    1,785,450
    
    
    $
    304,835
    
    
    $
    (150,550
    )
    
    $
    1,939,735
 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 CONSOLIDATING BALANCE SHEETS
As of December 31, 2007
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCash
    
    $
    2,033
    
    
    $
    1,670
    
    
    $
    
    
    
    $
    3,703Receivables, net
    
    
    31,046
    
    
    
    6,175
    
    
    
    
    
    
    
    37,221Inventories
    
    
    26,708
    
    
    
    2,769
    
    
    
    (46
    )
    
    
    29,431Lease fleet, net
    
    
    764,134
    
    
    
    38,789
    
    
    
    
    
    
    
    802,923Property, plant and equipment, net
    
    
    46,439
    
    
    
    8,924
    
    
    
    
    
    
    
    55,363Deposits and prepaid expenses
    
    
    10,386
    
    
    
    948
    
    
    
    
    
    
    
    11,334Other assets and intangibles, net
    
    
    6,256
    
    
    
    2,830
    
    
    
    
    
    
    
    9,086Goodwill
    
    
    66,251
    
    
    
    13,539
    
    
    
    
    
    
    
    79,790Intercompany
    
    
    36,574
    
    
    
    36,146
    
    
    
    (72,720
    )
    
    
    Total assets
    
    $
    989,827
    
    
    $
    111,790
    
    
    $
    (72,766
    )
    
    $
    1,028,851LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Accounts payable
    
    $
    14,049
    
    
    $
    6,511
    
    
    $
    
    
    
    $
    20,560Accrued liabilities
    
    
    37,330
    
    
    
    1,611
    
    
    
    
    
    
    
    38,941Lines of credit
    
    
    205,100
    
    
    
    32,757
    
    
    
    
    
    
    
    237,857Notes payable
    
    
    743
    
    
    
    16,596
    
    
    
    (16,596
    )
    
    
    743Obligations under capital leases
    
    
    6
    
    
    
    4
    
    
    
    
    
    
    
    10Senior notes, net
    
    
    149,379
    
    
    
    
    
    
    
    
    
    
    
    149,379Deferred income taxes
    
    
    125,439
    
    
    
    (1,702
    )
    
    
    (266
    )
    
    
    123,471Intercompany
    
    
    25
    
    
    
    6,129
    
    
    
    (6,154
    )
    
    
    Total liabilities
    
    
    532,071
    
    
    
    61,906
    
    
    
    (23,016
    )
    
    
    570,961Commitments and contingenciesStockholders equity:Common stock
    
    
    367
    
    
    
    18,433
    
    
    
    (18,433
    )
    
    
    367Additional paid-in capital
    
    
    278,591
    
    
    
    31,538
    
    
    
    (31,536
    )
    
    
    278,593Retained earnings
    
    
    217,404
    
    
    
    (3,729
    )
    
    
    219
    
    
    
    213,894Accumulated other comprehensive income
    
    
    694
    
    
    
    3,642
    
    
    
    
    
    
    
    4,336Treasury stock, at cost
    
    
    (39,300
    )
    
    
    
    
    
    
    
    
    
    
    (39,300
    )Total stockholders equity
    
    
    457,756
    
    
    
    49,884
    
    
    
    (49,750
    )
    
    
    457,890Total liabilities and stockholders equity
    
    $
    989,827
    
    
    $
    111,790
    
    
    $
    (72,766
    )
    
    $
    1,028,851
 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
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 from) income taxes
    
    
    21,927
    
    
    
    (36
    )
    
    
    
    
    
    
    21,891Provision for (benefit from) income taxes
    
    
    8,493
    
    
    
    180
    
    
    
    (58
    )
    
    
    8,615Net income (loss)
    
    $
    13,434
    
    
    $
    (216
    )
    
    $
    58
    
    
    $
    13,276
 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
Three Months Ended September 30, 2007
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Leasing
    
    $
    69,056
    
    
    $
    4,926
    
    
    $
    
    
    
    $
    73,982Sales
    
    
    6,772
    
    
    
    1,959
    
    
    
    (40
    )
    
    
    8,691Other
    
    
    655
    
    
    
    154
    
    
    
    
    
    
    
    809Total revenues
    
    
    76,483
    
    
    
    7,039
    
    
    
    (40
    )
    
    
    83,482Costs and expenses:Cost of sales
    
    
    4,459
    
    
    
    1,555
    
    
    
    (39
    )
    
    
    5,975Leasing, selling and general expenses
    
    
    39,623
    
    
    
    5,070
    
    
    
    
    
    
    
    44,693Depreciation and amortization
    
    
    5,047
    
    
    
    534
    
    
    
    
    
    
    
    5,581Total costs and expenses
    
    
    49,129
    
    
    
    7,159
    
    
    
    (39
    )
    
    
    56,249Income (loss) from operations
    
    
    27,354
    
    
    
    (120
    )
    
    
    (1
    )
    
    
    27,233Other income (expense):Interest income
    
    
    376
    
    
    
    19
    
    
    
    (361
    )
    
    
    34Interest expense
    
    
    (5,679
    )
    
    
    (922
    )
    
    
    360
    
    
    
    (6,241
    )Foreign currency exchange
    
    
    
    
    
    
    54
    
    
    
    
    
    
    
    54Income (loss) before provision for (benefit from) income taxes
    
    
    22,051
    
    
    
    (969
    )
    
    
    (2
    )
    
    
    21,080Provision for (benefit from) income taxes
    
    
    8,575
    
    
    
    (165
    )
    
    
    (34
    )
    
    
    8,376Net income (loss)
    
    $
    13,476
    
    
    $
    (804
    )
    
    $
    32
    
    
    $
    12,704
 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 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 from) income taxes
    
    
    50,785
    
    
    
    (3,057
    )
    
    
    (3
    )
    
    
    47,725Provision for (benefit from) income taxes
    
    
    19,628
    
    
    
    (573
    )
    
    
    (125
    )
    
    
    18,930Net income (loss)
    
    $
    31,157
    
    
    $
    (2,484
    )
    
    $
    122
    
    
    $
    28,795
 25




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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, 2007
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Leasing
    
    $
    198,346
    
    
    $
    12,051
    
    
    $
    
    
    
    $
    210,397Sales
    
    
    16,995
    
    
    
    5,967
    
    
    
    (79
    )
    
    
    22,883Other
    
    
    1,112
    
    
    
    360
    
    
    
    
    
    
    
    1,472Total revenues
    
    
    216,453
    
    
    
    18,378
    
    
    
    (79
    )
    
    
    234,752Costs and expenses:Cost of sales
    
    
    10,859
    
    
    
    4,804
    
    
    
    (69
    )
    
    
    15,594Leasing, selling and general expenses
    
    
    109,022
    
    
    
    12,844
    
    
    
    
    
    
    
    121,866Depreciation and amortization
    
    
    14,065
    
    
    
    1,520
    
    
    
    
    
    
    
    15,585Total costs and expenses
    
    
    133,946
    
    
    
    19,168
    
    
    
    (69
    )
    
    
    153,045Income (loss) from operations
    
    
    82,507
    
    
    
    (790
    )
    
    
    (10
    )
    
    
    81,707Other income (expense):Interest income
    
    
    1,130
    
    
    
    45
    
    
    
    (1,105
    )
    
    
    70Interest expense
    
    
    (17,116
    )
    
    
    (2,283
    )
    
    
    1,105
    
    
    
    (18,294
    )Debt extinguishment expense
    
    
    (11,224
    )
    
    
    
    
    
    
    
    
    
    
    (11,224
    )Foreign currency exchange
    
    
    
    
    
    
    54
    
    
    
    
    
    
    
    54Income (loss) before provision for (benefit from) income taxes
    
    
    55,297
    
    
    
    (2,974
    )
    
    
    (10
    )
    
    
    52,313Provision for (benefit from) income taxes
    
    
    21,311
    
    
    
    (627
    )
    
    
    (103
    )
    
    
    20,581Net income (loss)
    
    $
    33,986
    
    
    $
    (2,347
    )
    
    $
    93
    
    
    $
    31,732
 26




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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, net of effect
of businesses acquired: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 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
 27




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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, 2007
(In thousands)
(unaudited)
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash Flows From Operating Activities:Net income
    
    $
    33,986
    
    
    $
    (2,348
    )
    
    $
    94
    
    
    $
    31,732Adjustments to reconcile income to net cash
provided by operating activities:Debt extinguishment expense
    
    
    2,298
    
    
    
    
    
    
    
    
    
    
    
    2,298Provision for doubtful accounts
    
    
    1,603
    
    
    
    219
    
    
    
    
    
    
    
    1,822Amortization of deferred financing costs
    
    
    644
    
    
    
    
    
    
    
    
    
    
    
    644Share-based compensation expense
    
    
    2,962
    
    
    
    310
    
    
    
    
    
    
    
    3,272Depreciation and amortization
    
    
    14,065
    
    
    
    1,520
    
    
    
    
    
    
    
    15,585Gain on sale of lease fleet units
    
    
    (3,717
    )
    
    
    (460
    )
    
    
    1
    
    
    
    (4,176
    )Loss on disposal of property, plant and equipment
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    37Other income
    
    
    (1,105
    )
    
    
    1,105
    
    
    
    
    
    
    
    Deferred income taxes
    
    
    20,260
    
    
    
    (629
    )
    
    
    (102
    )
    
    
    19,529Foreign currency exchange gain
    
    
    
    
    
    
    (54
    )
    
    
    
    
    
    
    (54
    )Changes in certain assets and liabilities, net of
effect of businesses acquired:Receivables
    
    
    (2,397
    )
    
    
    (3,140
    )
    
    
    
    
    
    
    (5,537
    )Inventories
    
    
    (1,790
    )
    
    
    (688
    )
    
    
    
    
    
    
    (2,478
    )Deposits and prepaid expenses
    
    
    (1,160
    )
    
    
    (30
    )
    
    
    
    
    
    
    (1,190
    )Other assets and intangibles
    
    
    (146
    )
    
    
    
    
    
    
    
    
    
    
    (146
    )Accounts payable
    
    
    (236
    )
    
    
    3,762
    
    
    
    
    
    
    
    3,526Accrued liabilities
    
    
    1,553
    
    
    
    668
    
    
    
    
    
    
    
    2,221Intercompany
    
    
    108
    
    
    
    (183
    )
    
    
    75
    
    
    
    Net cash provided by operating activities
    
    
    66,965
    
    
    
    52
    
    
    
    68
    
    
    
    67,085Cash Flows From Investing Activities:Cash paid for businesses acquired
    
    
    (6,066
    )
    
    
    
    
    
    
    
    
    
    
    (6,066
    )Additions to lease fleet units
    
    
    (84,248
    )
    
    
    (13,176
    )
    
    
    
    
    
    
    (97,424
    )Proceeds from sale of lease fleet units
    
    
    10,128
    
    
    
    1,812
    
    
    
    
    
    
    
    11,940Additions to property, plant and equipment
    
    
    (8,403
    )
    
    
    (7,244
    )
    
    
    
    
    
    
    (15,647
    )Proceeds from sale of property, plant and equipment
    
    
    68
    
    
    
    
    
    
    
    
    
    
    
    68Net cash used in investing activities
    
    
    (88,521
    )
    
    
    (18,608
    )
    
    
    
    
    
    
    (107,129
    )
 28




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MOBILE MINI, INC. AND SUBSIDIARIES  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)  Continued
 Non-Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash Flows From Financing Activities:Net (repayments) borrowings under lines of credit
    
    
    (25,671
    )
    
    
    18,808
    
    
    
    892
    
    
    
    (5,971
    )Proceeds from issuance of notes payable
    
    
    1,216
    
    
    
    
    
    
    
    
    
    
    
    1,216Proceeds from issuance of 6.875% Senior Notes
    
    
    149,322
    
    
    
    
    
    
    
    
    
    
    
    149,322Redemption of 9.5% Senior Notes
    
    
    (97,500
    )
    
    
    
    
    
    
    
    
    
    
    (97,500
    )Deferred financing costs
    
    
    (3,682
    )
    
    
    
    
    
    
    
    
    
    
    (3,682
    )Principal payments of notes payable
    
    
    (864
    )
    
    
    
    
    
    
    
    
    
    
    (864
    )Principal payments on capital lease obligations
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    (16
    )Issuance of common stock, net
    
    
    5,337
    
    
    
    
    
    
    
    
    
    
    
    5,337Purchase of treasury stock
    
    
    (7,737
    )
    
    
    
    
    
    
    
    
    
    
    (7,737
    )Net cash provided by financing activities
    
    
    20,405
    
    
    
    18,808
    
    
    
    892
    
    
    
    40,105Effect of exchange rate changes on cash
    
    
    1,334
    
    
    
    131
    
    
    
    (960
    )
    
    
    505Net increase in cash
    
    
    183
    
    
    
    383
    
    
    
    
    
    
    
    566Cash at beginning of period
    
    
    655
    
    
    
    715
    
    
    
    
    
    
    
    1,370Cash at end of period
    
    $
    838
    
    
    $
    1,098
    
    
    $
    
    
    
    $
    1,936
 29




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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, 2007 consolidated financial statements and the accompanying notes
thereto which are included in our Annual Report on Form 10-K and Form 10-K/A , filed with the
Securities and Exchange Commission on February 29, 2008 and March 18, 2008, respectively. 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
 Acquisition of Mobile Storage Group
     General
   30




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31




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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 defined in our revolving credit
facility, debt restructuring or debt extinguishment expenses are not deducted in our various
calculations made under the Credit Agreement 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;
    
    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 30,2007
    
    
    2008
    
    
    2007
    
    
    2008(In thousands)EBITDA
    
    $
    32,902
    
    
    $
    49,618
    
    
    $
    97,416
    
    
    $
    99,432Senior Note redemption premiums
    
    
    
    
    
    
    
    
    
    
    (8,926
    )
    
    
    Interest paid
    
    
    (3,960
    )
    
    
    (9,354
    )
    
    
    (20,389
    )
    
    
    (16,344
    )Income and franchise taxes paid
    
    
    (131
    )
    
    
    (59
    )
    
    
    (725
    )
    
    
    (488
    )Share-based compensation expense
    
    
    1,122
    
    
    
    1,541
    
    
    
    3,272
    
    
    
    3,905Gain on sale of lease fleet units
    
    
    (1,435
    )
    
    
    (3,001
    )
    
    
    (4,176
    )
    
    
    (6,095
    )Loss on disposal of property, plant and equipment
    
    
    5
    
    
    
    437
    
    
    
    37
    
    
    
    466Changes in certain assets and liabilities, net
of effect of businesses acquired:Receivables
    
    
    (3,178
    )
    
    
    (82
    )
    
    
    (3,715
    )
    
    
    (2,347
    )Inventories
    
    
    1,592
    
    
    
    3,085
    
    
    
    (2,478
    )
    
    
    (485
    )Deposits and prepaid expenses
    
    
    (1,737
    )
    
    
    337
    
    
    
    (1,190
    )
    
    
    1,237Other assets and intangibles
    
    
    (448
    )
    
    
    (235
    )
    
    
    (146
    )
    
    
    (136
    )Accounts payable and accrued liabilities
    
    
    6,632
    
    
    
    (19,242
    )
    
    
    8,105
    
    
    
    (14,559
    )Net cash provided by operating activities
    
    $
    31,364
    
    
    $
    23,045
    
    
    $
    67,085
    
    
    $
    64,586
 32




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2008
    
    
    2007
    
    
    2008(In thousands except percentages)Net income
    
    $
    12,704
    
    
    $
    13,276
    
    
    $
    31,732
    
    
    $
    28,795Interest expense
    
    
    6,241
    
    
    
    18,022
    
    
    
    18,294
    
    
    
    30,586Provision for income taxes
    
    
    8,376
    
    
    
    8,615
    
    
    
    20,581
    
    
    
    18,930Depreciation and amortization
    
    
    5,581
    
    
    
    9,705
    
    
    
    15,585
    
    
    
    21,121Debt extinguishment expense
    
    
    
    
    
    
    
    
    
    
    11,224
    
    
    
    EBITDA
    
    $
    32,902
    
    
    $
    49,618
    
    
    $
    97,416
    
    
    $
    99,432EBITDA margin(1)
    
    
    39.4
    %
    
    
    37.4
    %
    
    
    41.5
    %
    
    
    34.0
    %
 
 (1)
    
    EBITDA margin is calculated as EBITDA divided by total revenues expressed as a percentage.  Accounting and Operating Overview
    33




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##### Table of Contents



Dollars
    
    
    Units(In thousands)Lease fleet at December 31, 2007, net
    
    $
    802,923
    
    
    
    160,116Purchases:Container purchases and containers obtained through acquisitions, including freight
    
    
    206,132
    
    
    
    92,676Non-container or office units obtained through acquisitions
    
    
    67,732
    
    
    
    21,562Manufactured units:Steel storage containers, combination storage/office combo units and steel security
Offices
    
    
    25,228
    
    
    
    1,542New wood mobile offices
    
    
    8,885
    
    
    
    291Refurbishment and customization(3):Refurbishment or customization of units purchased or acquired in the current year
    
    
    10,910
    
    
    
    2,544
    (1)Refurbishment or customization of 3,299 units purchased in a prior year
    
    
    3,693
    
    
    
    1,059
    (2)Refurbishment or customization of 503 units obtained through acquisition in a prior year
    
    
    349
    
    
    
    117
    (3)Other
    
    
    (2,315
    )
    
    
    (685
    )Cost of sales from lease fleet
    
    
    (10,751
    )
    
    
    (5,161
    )Effect of exchange rate changes
    
    
    (4,427
    )Depreciation
    
    
    (12,233
    )Lease fleet at September 30, 2008, net
    
    $
    1,096,126
    
    
    
    274,061
 
 (1)
    
    These units represent 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.(2)
    
    Includes units moved from finished goods to lease fleet.(3)
    
    Does not include any routine maintenance.  Number ofLease Fleet
    
    
    Units(In thousands)Steel storage containers
    
    $
    620,087
    
    
    
    217,192Offices
    
    
    531,940
    
    
    
    42,870Van trailers
    
    
    16,363
    
    
    
    13,999Other
    
    
    2,6631,171,053Accumulated depreciation
    
    
    (74,927
    )$
    1,096,126
    
    
    
    274,061
   34




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##### Table of Contents



RESULTS OF OPERATIONS
 Three Months Ended September 30, 2008, Compared to
Three Months Ended September 30, 2007
        35




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Nine Months Ended September 30, 2008, Compared to
Nine Months Ended September 30, 2007
     36




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LIQUIDITY AND CAPITAL RESOURCES
   37




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##### Table of Contents



Revolving Credit Facility.
     Operating Activities.
 Investing Activities.
 Financing Activities.
  38




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CONTRACTUAL OBLIGATIONS AND COMMITMENTS
    OFF-BALANCE SHEET TRANSACTIONS
  SEASONALITY
  EFFECTS OF INFLATION
  CRITICAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS
   39




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##### Table of Contents



Revenue Recognition.
 Share-Based Compensation.
 Allowance for Doubtful Accounts.
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2007
    
    2008
    
    2007
    
    2008(In thousands except per share data)As Reported:Net income
    
    $
    12,704
    
    
    $
    13,276
    
    
    $
    31,732
    
    
    $
    28,795Diluted earnings per share
    
    $
    0.35
    
    
    $
    0.31
    
    
    $
    0.86
    
    
    $
    0.77As adjusted for change in estimates:Net income
    
    $
    12,659
    
    
    $
    12,929
    
    
    $
    31,541
    
    
    $
    28,203Diluted earnings per share
    
    $
    0.34
    
    
    $
    0.30
    
    
    $
    0.86
    
    
    $
    0.75
  Impairment of Goodwill.
 40




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##### Table of Contents




    
    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.
 Goodwill and Other Intangible Asset
 Impairment Long-Lived Assets
 Depreciation Policy.
  41




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Useful
    
    Three Months Ended
    
    Nine Months EndedSalvage
    
    Life in
    
    September 30,
    
    September 30,Value
    
    Years
    
    2007
    
    2008
    
    2007
    
    2008(In thousands except per share data)As Reported:
    
    
    62.5
    %
    
    
    25Net income
    
    
    
    
    
    
    
    
    
    $
    12,704
    
    
    $
    13,276
    
    
    $
    31,732
    
    
    $
    28,795Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    0.35
    
    
    $
    0.31
    
    
    $
    0.86
    
    
    $
    0.77As adjusted for change in estimates:
    
    
    70
    %
    
    
    20Net income
    
    
    
    
    
    
    
    
    
    $
    12,704
    
    
    $
    13,276
    
    
    $
    31,732
    
    
    $
    28,795Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    0.35
    
    
    $
    0.31
    
    
    $
    0.86
    
    
    $
    0.77As adjusted for change in estimates:
    
    
    50
    %
    
    
    20Net income
    
    
    
    
    
    
    
    
    
    $
    11,765
    
    
    $
    11,988
    
    
    $
    28,986
    
    
    $
    25,205Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    0.32
    
    
    $
    0.28
    
    
    $
    0.79
    
    
    $
    0.67As adjusted for change in estimates:
    
    
    40
    %
    
    
    40Net income
    
    
    
    
    
    
    
    
    
    $
    12,704
    
    
    $
    13,276
    
    
    $
    31,732
    
    
    $
    28,795Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    0.35
    
    
    $
    0.31
    
    
    $
    0.86
    
    
    $
    0.77As adjusted for change in estimates:
    
    
    30
    %
    
    
    25Net income
    
    
    
    
    
    
    
    
    
    $
    11,483
    
    
    $
    11,602
    
    
    $
    28,162
    
    
    $
    24,128Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    0.31
    
    
    $
    0.27
    
    
    $
    0.77
    
    
    $
    0.64As adjusted for change in estimates:
    
    
    25
    %
    
    
    25Net income
    
    
    
    
    
    
    
    
    
    $
    11,295
    
    
    $
    11,344
    
    
    $
    27,613
    
    
    $
    23,410Diluted earnings per share
    
    
    
    
    
    
    
    
    
    $
    0.31
    
    
    $
    0.26
    
    
    $
    0.75
    
    
    $
    0.62
 Insurance Reserves.
  Contingencies.
 Deferred Taxes.
  42




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##### Table of Contents



Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109
 Purchase Accounting.
  Earnings per share.
  RECENT ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurement
 The Fair Value Option for Financial Assets and
Financial Liabilities Accounting for Derivative Instruments and
Hedging Activities,
 Business Combinations
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##### Table of Contents



Noncontrolling Interests in Consolidated Financial
Statements  An Amendment of ARB No. 51 Consolidated Financial Statements
 Disclosures about Derivative Instruments and Hedging
Activities  An Amendment of FASB Statement No. 133
 Determining the Useful Life of Intangible Assets
 CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
  
    
    a continued economic slowdown that affects any significant portion of our customer base,
including economic slowdown in areas of limited geographic scope if markets in which we have
significant operations are impacted by such slowdown
    
    our ability to timely and efficiently integrate the new branches and employees that we
acquired as a result of our merger and business combination with Mobile Storage Group
    
    our ability to manage our planned growth, both internally and at new branches
    
    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 manufacturing storage
units, including steel
    
    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
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##### Table of Contents




    
    currency exchange and interest rate fluctuations
    
    governmental laws and regulations affecting domestic and foreign operations, including
tax obligations
    
    changes in generally accepted accounting principles
    
    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
 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.
  45




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##### Table of Contents



Changes in Internal Controls
   
 PART II. OTHER INFORMATION
 
 ITEM 1A. RISK FACTORS
  Global capital and credit markets conditions, and resulting declines in consumer confidence and
spending, could have an adverse effect on Mobile Minis operating results. Further, the conditions
in the global capital and credit markets could have an adverse effect on our ability to access
those markets.
    46




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##### Table of Contents



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.
 47




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##### Table of Contents



SIGNATURES
  MOBILE MINI, INC.Date: , 2008
    /s/ Lawrence TrachtenbergLawrence Trachtenberg

Chief Financial Officer &

Executive Vice President 48