McGrath RentCorp (MGRC) CJS Securities 25th Annual “New Ideas for the New Year” Investor Conference summary

Business Overview and Strategy

• Operates in three main segments: Mobile Modular, Portable Storage, and TRS electronics, with Mobile Modular and Portable Storage comprising over 80% of revenues and EBITDA.

• Mobile Modular is a leading provider in North America, servicing 35 states with a rental fleet of ~43,000 units and Q3 revenues of $191M.

• Portable Storage services 28 states with ~42,000 units and Q3 revenues of $23M, offering secure storage and ground-level offices with significant organic growth since 2008.

• TRS electronics rents test and measurement equipment for sectors like communications, semiconductors, and aerospace, with Q3 revenues of $35M and a fleet of ~23,000 units.

• Strategic focus on expanding modular solutions, value-added services, and disciplined capital allocation, including recent acquisitions and divestitures.

Financial Performance and Growth Drivers

• Q3 2024 total revenues reached $267M, up 10%, with adjusted EBITDA at $104M, driven by modular segment strength and balanced growth across education and commercial markets.

• For the first nine months of 2024, total revenue was $667M and adjusted EBITDA was $260M, up 9% and 13% year-over-year, respectively.

• Gross profit for the first nine months of 2024 increased 13% to $321M.

• Modular rental revenues grew 9%, with education up 10% and commercial up 8%; initiatives like Mobile Modular Plus and Site Related Services contributed.

• New shipment pricing and revenue per unit have increased, with a multi-year tailwind anticipated as fleet churns and higher prices are realized.

Market Trends and Opportunities

• Modular construction is gaining acceptance, expanding the addressable market and positioning the company for growth.

• Education segment benefits from predictable demand due to population shifts and ongoing school modernization needs, with strong visibility into future projects.

• Commercial opportunities are supported by trends like reshoring manufacturing and infrastructure investments, which drive demand for space and storage.

• Large operations and strong relationships in Southern California, particularly with L.A. school districts, present future growth opportunities.

• Acquisitions in 2021 and 2023 have expanded geographic reach and market share, supporting long-term growth.