McGrath Announces Results for First Quarter 2026

McGrath RentCorp ("McGrath" or the "Company") (NASDAQ:MGRC), a leading business-to-business rental company in North America, today announced total revenues for the quarter ended March 31, 2026 of $198.5 million, an increase of 2% compared to the first quarter of 2025. The Company reported net income of $27.0 million, or $1.10 per diluted share, for the first quarter of 2026, compared to net income of $28.2 million, or $1.15 per diluted share, for the first quarter of 2025.

FIRST QUARTER 2026 YEAR-OVER-YEAR COMPANY HIGHLIGHTS:

• Rental operations revenues increased 5% to $162.2 million.
• Sales revenues decreased 13% to $34.0 million.
• Total revenues increased 2% to $198.5 million.
• Income from operations decreased 5% to $43.4 million.
• Adjusted EBITDA¹ decreased 1% to $74.1 million.
• Dividend rate of $0.495 per share for the first quarter 2026. On an annualized basis, this dividend represents a 1.6% yield on the April 28, 2026 close price of $120.04 per share.

Phil Hawkins, President and CEO of McGrath, made the following comments:

"We made steady progress in the first quarter, with rental revenue growth in each of our operating segments, despite some challenging market demand conditions. Sales revenues for the quarter were lower than a year ago, primarily due to lower sales at Enviroplex compared to a strong first quarter last year.

Modular rental revenues increased 4% compared to last year, with growth from our commercial customer base. We continued to make progress with our long-term modular growth initiatives, Mobile Modular Plus and Site Related Services, and with broadening our geographic coverage. Operating expenses increased as we prepared available fleet to satisfy new shipments.

Portable Storage rental revenues grew 1%, which was encouraging as commercial construction project activity remained soft. However, higher costs for equipment preparation and sales coverage compressed margins in the quarter.

TRS-RenTelco had an impressive start to the year, as improved market conditions supported 13% rental revenue growth. Demand was robust throughout the quarter, and the business benefited from projects supporting buildout of new data centers.

Overall, we are pleased with our start to the year. Recent developments in the macro environment may create some uncertainty and could result in project delays. While we currently do not expect a significant impact this year, this may change as the year progresses. In the meantime, we are focused on disciplined operational execution to make the most of market opportunities."

DIVISION HIGHLIGHTS:

All comparisons presented below are for the quarter ended March 31, 2026 to the quarter ended March 31, 2025 unless otherwise indicated.

MOBILE MODULAR

For the first quarter of 2026, the Company's Mobile Modular division reported Adjusted EBITDA of $47.2 million, a decrease of $0.4 million, or 1%, when compared to the same quarter in 2025.

• Rental revenues increased 4% to $81.4 million, depreciation expense increased 10% to $11.7 million, and other direct costs increased 15% to $24.0 million, which resulted in a decrease in gross profit on rental revenues of 3% to $45.8 million. The increased other direct costs in 2026 were primarily due to higher material and labor costs to prepare equipment for shipment.
• Rental related services revenues increased 4% to $30.8 million, primarily attributable to higher site related services, with associated gross profit increasing 13% to $11.0 million.
• Sales revenues decreased 7% to $20.9 million, due to lower new and used equipment sales. Lower sales revenues and lower gross margin on sales of 31% in 2026, compared to 32% in 2025, resulted in an 8% decrease in gross profit on sales revenues to $6.6 million.
• Selling and administrative expenses increased 3% to $35.2 million, when compared to the prior year.

PORTABLE STORAGE

For the first quarter of 2026, the Company's Portable Storage division reported Adjusted EBITDA of $7.1 million, a decrease of $1.4 million, or 17%, when compared to the same quarter in 2025.

• Rental revenues increased 1% to $16.3 million, depreciation expense increased 6% to $1.1 million, and other direct costs increased 38% to $2.1 million, which resulted in a decrease in gross profit on rental revenues of 3% to $13.1 million.
• Rental related services revenues increased 6% to $3.8 million, primarily attributable to higher delivery and return delivery activities, with gross loss increasing $0.4 million to $0.8 million in 2026.
• Sales revenues increased 29% to $1.6 million. Gross margin on sales was 36% compared to 33% in 2025, resulting in a $0.2 million increase in gross profit on sales revenues to $0.6 million.
• Selling and administrative expenses increased 11% to $8.4 million, when compared to the prior year.

TRS-RENTELCO

For the first quarter of 2026, the Company's TRS-RenTelco division reported Adjusted EBITDA of $20.9 million, an increase of 16%, when compared to the same quarter in 2025.

• Rental revenues increased 13% to $28.9 million, depreciation expense was comparable to 2025, and other direct costs increased 14%, resulting in a 25% increase in gross profit on rental revenues to $12.9 million.
• Sales revenues increased 1% to $8.0 million and gross profit on sales revenues increased 19% to $4.4 million, primarily attributed to higher sales margins of 55% in 2026, compared to 47% in 2025.
• Selling and administrative expenses increased 7%, to $8.0 million, when compared to the prior year.

FINANCIAL OUTLOOK:

Based upon the Company's year-to-date results and current outlook for the remainder of the year, the Company confirms its financial outlook. For the full-year 2026, the Company currently expects:

ABOUT MCGRATH:

McGrath RentCorp (NASDAQ:MGRC) is a leading business-to-business rental company in North America with a strong record of profitable business growth. Founded in 1979, McGrath's operations are centered on modular solutions through its Mobile Modular and Mobile Modular Portable Storage businesses. In addition, its TRS-RenTelco business offers electronic test equipment rental solutions. The Company's rental product offerings and services are part of the circular supply economy, helping customers work more efficiently, and sustainably manage their environmental footprint. With over 40 years of experience, McGrath's success is driven by a focus on exceptional customer experiences. This focus has underpinned the Company's long-term financial success and supported 35 consecutive years of annual dividend increases to shareholders, a rare distinction among publicly listed companies.

McGrath is headquartered in Livermore, California. Additional information about McGrath and its businesses is available at mgrc.com and investors.mgrc.com.

You should read this press release in conjunction with the financial statements and notes thereto included in the Company's latest Forms 10-K, 10-Q and other SEC filings. You can visit the Company's web site at www.mgrc.com to access information on McGrath RentCorp, including the latest Forms 10-K, 10-Q and other SEC filings.

CONFERENCE CALL NOTE:

As previously announced in its press release of March 26, 2026, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on April 29, 2026 to discuss the first quarter 2026 results. To participate in the teleconference, dial 1-800-274-8461 (in the U.S.), or 1-203-518-9814 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company's website at https://investors.mgrc.com/. A replay will be available for 7 days following the call by dialing 1-800-757-4770 (in the U.S.), or 1-402-220-7228 (outside the U.S.). In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company's website at https://investors.mgrc.com/events-and-presentations.

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding McGrath RentCorp's expectations, strategies, prospects or targets are forward-looking statements. These forward-looking statements also can be identified by the use of forward-looking terminology such as "anticipates," "believes," "continues," "could," "estimates," "expects," "intends," "may," "plan," "predict," "project," or "will," or the negative of these terms or other comparable terminology. In particular, the discussion under the heading "Financial Outlook" and Mr. Hawkins' comments about the commercial construction market project activity showing signs of stabilization and the team's ability to build upon 2025's progress, are forward looking. ​

These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected including: our expectations around continued business momentum entering 2026; the continued impact of tariff actions and macroeconomic factors, including fiscal policy uncertainty, government budgetary constraints, other political, geopolitical or regulatory developments; health of the education and commercial markets in our modular building division; competition within the modular business; the activity levels in the semiconductor and general purpose and communications test equipment markets at TRS-RenTelco; the activity levels in commercial construction projects and impact on Portable Storage segment; continued execution of our strategic performance improvement initiatives; our ability to successfully increase prices to offset cost increases; our ability to effectively manage our rental assets; and our ability to retain and attract talent and uncertainty associated with the Chief Executive Officer transition, as well as the other factors disclosed under "Risk Factors" in the Company's 2025 Form 10-K and other SEC filings.

Forward-looking statements are made only as of the date hereof and are based on management's reasonable assumptions, however these assumptions can be wrong or affected by known or unknown risks and uncertainties. No forward-looking statement can be guaranteed, and subsequent facts or circumstances may contradict, obviate, undermine or otherwise fail to support or substantiate such statements. Except as otherwise required by law, we assume no obligation to update any of the forward-looking statements contained in this press release.

Reconciliation of Adjusted EBITDA to the most directly comparable GAAP measures

To supplement the Company's financial data presented on a basis consistent with accounting principles generally accepted in the United States of America ("GAAP"), the Company presents "Adjusted EBITDA", which is defined by the Company as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, transaction costs, gains on property sales and non-operating transactions. The Company presents Adjusted EBITDA as a financial measure as management believes it provides useful information to investors regarding the Company's liquidity and financial condition and because management, as well as the Company's lenders, use this measure in evaluating the performance of the Company.

Management uses Adjusted EBITDA as a supplement to GAAP measures to further evaluate period-to-period operating performance, compliance with financial covenants in the Company's revolving lines of credit and senior notes and the Company's ability to meet future capital expenditure and working capital requirements. Management believes the exclusion of non-cash charges and non-recurring transactions, including share-based compensation, transaction costs and gains on property sales is useful in measuring the Company's cash available for operations and performance of the Company. Because management finds Adjusted EBITDA useful, the Company believes its investors will also find Adjusted EBITDA useful in evaluating the Company's performance.

Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of the Company's profitability or liquidity. Adjusted EBITDA is not in accordance with or an alternative for GAAP and may be different from non−GAAP measures used by other companies. Unlike EBITDA, which may be used by other companies or investors, Adjusted EBITDA does not include share-based compensation charges, transaction costs, gains on property sales and non-operating transactions. The Company believes that Adjusted EBITDA is of limited use in that it does not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP and does not accurately reflect real cash flow. In addition, other companies may not use Adjusted EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted EBITDA for purposes of comparison. The Company's presentation of Adjusted EBITDA should not be construed as an inference that the Company will not incur expenses that are the same as or similar to the adjustments in this presentation. Therefore, Adjusted EBITDA should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures. The Company compensates for the limitations of Adjusted EBITDA by relying upon GAAP results to gain a complete picture of the Company's performance. Because Adjusted EBITDA is a non-GAAP financial measure, as defined by the SEC, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP.

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Keith E. Pratt

EVP & Chief Financial Officer

925-606-9200