The container and railcar leasing company’s year-over-year net income increased more than 50 percent in Q2.
CAI International Inc., a container and railcar leasing company headquartered in San Francisco, said Monday it intends to offer and sell shares of its newly created series B preferred stock.
The underwritten public offering of the fixed-to-floating rate cumulative redeemable perpetual preferred stock is subject to market and other conditions. CAI also intends to grant the underwriters a 30-day option to buy up to an additional 15 percent of the shares of series B preferred stock offered in the public offering.
CAI intends to use the net proceeds from the offering primarily to repay debt under its senior secured railcar revolving credit facility and for general corporate purchases, which it said could include share repurchases, payments to manufacturers, investments in containers and other assets or acquisitions.
As of June 30, CAI operated a global fleet of about 1.4 million CEUs of containers and owned a fleet of 7,430 railcars that it leases within North America.
During the second quarter, CAI posted a net income of $20.3 million, a 51.5 percent year-over-year jump, while revenues totaled $105.7 million, up 27.8 percent.
“During the second quarter, we successfully issued 0.6 million shares of our series A perpetual preferred stock for net proceeds of $14.7 million,” CAI President and CEO Victor Garcia said. “During the first half of 2018, we have raised $53 million for the sale of our series A perpetual preferred stock, which has enabled us to repurchase 1.2 million shares of our outstanding common stock and continue record levels of investment in equipment.”
Garcia said that during the first half of the year, CAI invested, or committed to invest, $630 million in container equipment, of which $208 million was leased during the second quarter and $290 million is due to be leased in the third quarter.
The average utilization of CAI’s total owned container fleet during the second quarter stood at 99.3 percent, up from 97.2 percent for the second quarter of 2017.
CAI had net lease-outs of 316 railcars during the second quarter of this year, representing 18 percent of its off-hire fleet at the beginning of the quarter, and the company has commitments to lease an additional 746 cars in the remainder of the year.
Joint book-running managers for the offering are RBC Capital Markets, B. Riley FBR, Janney Montgomery Scott, Oppenheimer & Co. and William Blair & Co.
CAI using stock sale to pay off debt
