Triton International Reports Second Quarter 2018 Adjusted EPS of $1.10, Quarterly Dividend of $0.52 and $200 Million Share Repurchase Authorization
Aug. 03, 2018
HAMILTON, Bermuda--(BUSINESS WIRE)--Aug 3, 2018--Triton International Limited (NYSE: TRTN) ("Triton")
Second Quarter Highlights:Triton reported net income attributable to shareholders of $104.9 million or $1.30 per diluted share, an increase of 30.0% per diluted share from the first quarter of 2018. Net income attributable to shareholders included a one-time gain of $21.0 million on the sale of a building. The gain on the building sale also led to an increase in our effective tax rate to 13% in the second quarter. Triton reported Adjusted net income of $88.9 million or $1.10 per diluted share, an increase of 11.1% per diluted share from the first quarter of 2018. Container pick-up activity increased strongly in the second quarter, reflecting the start of the traditional peak season for dry containers. Our utilization averaged 98.8% during the second quarter of 2018. Triton announced a quarterly dividend of $0.52 per share payable on September 25, 2018 to shareholders of record as of September 4, 2018. Triton announced the Board of Directors has authorized the repurchase of up to $200 million of its common shares.
The following table summarizes Triton’s selected key financial information for the three and six months ended June 30, 2018 and June 30, 2017 and for the three months ended March 31, 2018.
“Triton achieved outstanding performance in the second quarter of 2018", commented Brian M. Sondey, Chief Executive Officer of Triton. "We generated $88.9 million of Adjusted net income, or $1.10 of Adjusted net income per share, which represents an increase of 11.1% per diluted share from the first quarter of 2018. We also generated an annualized return on equity of 16.4%.”
“Triton’s strong financial results continue to be driven by outstanding operational performance, our unique competitive advantages and a favorable market environment. Container pick-up activity was near record levels in May and June, reflecting ongoing trade growth and the start of the peak season for dry containers. We also continued to benefit from an increase in the share for leasing relative to direct container purchases by our customers, and a continued high leasing deal share for Triton. Our utilization averaged 98.8% in the second quarter, and currently stands at 98.8%. Our average used container sale prices increased in the second quarter, driving an increase in gains on disposal."
"Trade growth and container demand have not been materially impacted by the threat of trade actions or the initial round of new tariffs implemented between the United States and China. However, the United States has disclosed an expanded list of products that will likely become subject to increased tariffs later in the third quarter. The potential for expanded tariffs is adding uncertainty to our market, though our customers and market forecasters are still expecting global container volumes to increase in 2018."
"Triton continues to grow its fleet through value-added investment. We have so far ordered $1.4 billion of containers for delivery in 2018, and expect our revenue earning assets will grow in the range of 10% this year. We estimate the lease transactions we are concluding for our new container investments will generate equity IRRs in the mid-teens over the lifetime of the containers, and the average initial lease duration for our new container leases is approximately seven years.”
Mr. Sondey continued, “We are starting the second half of 2018 with strong operating and financial momentum. Container pick-up activity and lease deal activity remain strong, and our key operating metrics remain at high levels. Based on the continued growth in our container fleet, continued high utilization and the currently limited impacts from the tariffs, we expect our Adjusted net income to increase sequentially throughout the balance of the year.”
Triton’s Board of Directors has approved and declared a $0.52 per share quarterly cash dividend on its issued and outstanding common shares, payable on September 25, 2018 to shareholders of record at the close of business on September 4, 2018.
Share Repurchase Authorization
Triton’s Board of Directors has authorized the repurchase of up to $200 million of its common shares. Under the plan, shares may be purchased on the open market or in privately negotiated transactions. The extent to which the company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations.
Mr. Sondey concluded, “Given the strong market environment and sizable attractive investment opportunities, we will continue to prioritize organic investment and growth as the primary use for our capital. However, we believe that an opportunistic share repurchase program could complement our dividend as another avenue for providing returns to shareholders.”
Triton will hold a Webcast at 8:30 a.m. (New York time) on Friday, August 3, 2018 to discuss its second quarter results. To listen by phone, please dial 1-877-418-5277 (domestic) or 1-412-717-9592 (international) approximately 15 minutes prior to the start time and reference the Triton International Limited conference call. To access the live Webcast please visit Triton's website at http://www.trtn.com. An archive of the Webcast will be available one hour after the live call.
About Triton International Limited
Triton International Limited is the world’s largest lessor of intermodal freight containers. With a container fleet of 6.0 million twenty-foot equivalent units ("TEU"), Triton’s global operations include acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis.
The following table sets forth the equipment fleet utilization for the periods indicated:
The following table summarizes the equipment fleet as of June 30, 2018, December 31, 2017 and June 30, 2017:
Important Cautionary Information Regarding Forward-Looking Statements
Certain statements in this release, other than purely historical information, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that include the words "expect," "intend," "plan," "believe," "project," "anticipate," "will," "may," "would" and similar statements of a future or forward-looking nature may be used to identify forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties, many of which are beyond Triton's control. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements.
These factors include, without limitation, economic, business, competitive, market and regulatory conditions and the following: uncertainty as to the long-term value of Triton's common shares; decreases in the demand for leased containers; decreases in market leasing rates for containers; difficulties in re-leasing containers after their initial fixed-term leases; our customers' decisions to buy rather than lease containers; our dependence on a limited number of customers for a substantial portion of our revenues; customer defaults; decreases in the selling prices of used containers; extensive competition in the container leasing industry; difficulties stemming from the international nature of our business; decreases in the demand for international trade; disruption to our operations resulting from the political and economic policies of the United States and other countries, particularly China, including increased tariffs and other trade actions; disruption to our operations from failures of, or attacks on, our information technology systems; our compliance or failure to comply with laws and regulations related to economic and trade sanctions, security, anti-terrorism, environmental protection and corruption; our ability to obtain sufficient capital to support our growth; restrictions on our businesses imposed by the terms of our debt agreements; changes in tax laws in the United States and other countries and other risks and uncertainties, including those risk factors set forth in the section entitled "Risk Factors" to in our Form 10-K filed with the Securities and Exchange Commission ("SEC"), on February 27, 2018, in any Form 10-Q filed or to be filed by Triton, and in other documents we file with the SEC from time to time.
The foregoing list of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere. Any forward-looking statements made herein are qualified in their entirety by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on Triton or its business or operations. Except to the extent required by applicable law, we undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
-Financial Tables Follow-
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