Mobile Mini, Inc. History

Address:

7420 South Kyrene Road, Suite 101
Tempe, Arizona 85283
U.S.A.

Telephone: (480) 894-6311
Toll Free: 800-950-6464
Fax: (480) 894-6433

Public Company
Incorporated: 1993
Employees: 1,420
Sales: $133.1 million (2002)
Stock Exchanges: NASDAQ
Ticker Symbol:MINI
NAIC: 332313 Plate Work Manufacturing

Company Perspectives:

Mobile Mini, Inc., a customer service oriented leasing company, is committed to solving the storage industry's needs by providing secure, convenient, and high quality portable storage containers and office units on a national basis.

Key Dates:

1983:: Richard Bunger launches a business in Phoenix, Arizona.
1986:: The company enters the California market.
1990:: Manufacturing and administrative offices are relocated to the Tempe area.
1993:: The company is incorporated.
1994:: Mobile Mini is taken public.
1997:: Richard Bunger's son Steven Bunger is named president and CEO.
2001:: Steven succeeds his father as chairman.

Company History:

Mobile Mini, Inc. is a Tempe, Arizona-based provider of portable storage containers and mobile offices, with operations in 26 states and one Canadian province and a diversified customer base of more than 62,000. Many of the public company's storage units are decommissioned aluminum and steel ocean-going shipping containers, which are generally eight feet wide, nearly ten feet high and come in lengths of 20, 40, or 45 feet. Mobile Mini refurbishes these units, cleaning and repairing walls, then splitting them into various lengths, and finally providing them with door locks and signage. For units intended to serve as mobile offices, the company will also add carpeting, heating, air conditioning, plumbing, and other amenities. In addition to refurbishing ocean-going containers, the company manufactures storage units, primarily at a plant located in Maricopa, Arizona. To save money on shipping fully assembled storage units, seven satellite manufacturing facilities around the country assemble and paint "knock-down" units provided by Maricopa and then deliver and service them for regional customers. Ever since Mobile Mini decided in 1996 to focus on leasing storage units rather than sales, it has enjoyed tremendous growth. As of March 2003, it was by far the largest provider of portable storage units, its fleet including some 86,000 portable storage and office units. Despite poor economic conditions, Mobile Mini has continued to grow, albeit not at the rate it enjoyed during the late 1990s to 2002. The company's good health is due in large part to the diversity of its customer base, which include schools, the U.S. military, major retailers such as Wal-Mart and Home Depot, and industrial customers that include Motorola and Frito Lay. The consumer services and retail sector of its end market accounts for 41.6 percent of sales, followed by construction with 30.3 percent, consumers with 11 percent, industrial and commercial at 9 percent, and institutions, government agencies, and others comprising 8.1 percent. In addition to this diversity, investors are enthusiastic about other favorable numbers associated with the Mobile Mini business plan. The company is able to buy used ocean-going containers for around $1,800, which includes shipping. The cost of refurbishing adds another $1,400 in costs. This per unit cost of approximately $3,200 is recovered in less than three years, but Mobile Mini storage units have a useful life in excess of 20 years, meaning that the company is on the cusp of generating significant levels of cash. Moreover, the company's services are just becoming widely known--even within existing markets, where the oldest operations provide the greatest profits. Not only can Mobile Mini expect its newer markets to continue to grow, the company is well positioned to expand throughout North America, the only major player in a highly fragmented industry.

Business Established in 1983

The man behind the creation of Mobile Mini was Richard E. Bunger, who started out as a designer for dairy and rodeo feed lot units. Because his initial endeavor was uncertain from year to year, he became involved in the mini-storage business. However, he soon discovered problems with this new industry as well. As he explained in a 1999 interview, "The problem with mini-storage is, as soon as you build on a prime location, pretty soon three competitors move in and dilute your business." In 1982, Bunger conceived of a way to offset this limitation: instead of having the customer come to him for storage, he would take a transportable storage solution to the customer. He then refined this concept after learning from friends involved in the seagoing shipping industry that they had an abundance of old shipping containers and no particular use for them. Bunger launched Mobile Mini Storage Systems in Phoenix in 1983 and began buying up excess shipping containers and modifying them to serve a new purpose: portable storage units. The viability of Bunger's idea for his new business was quickly confirmed, and the demand for his product so great that according to Bunger, "We were sending them with wet paint still on them."

Over the next three years, Bunger refined his business model, which included a leasing component but at this stage relied mostly on the sale of storage units. In 1986, he established a sales and leasing branch in the Tucson, Arizona, market. The company moved outside Arizona two years later, launching an operation in Rialto, California, to serve the Los Angeles market. In 1990, Bunger moved the operation from Phoenix to Tempe, where he now set up his headquarters. Manufacturing was transferred from its original Phoenix site to its current location in a heavy-industry zoned industrial park near Maricopa, Arizona, just south of metropolitan Phoenix.

Mobile Mini Goes Public in 1994

Bunger incorporated the business as Mobile Mini, Inc. in December 1993 to prepare taking the company public in February 1994. After the offering, the company began to expand at a more accelerated pace. Mobile Mini moved into the Texas market in 1994, opening hub operations in Houston and Dallas/Fort Worth. The company's Texas footprint was widened early in 1995 with the opening of offices in San Antonio and Austin. In order to achieve some diversity, Mobile Mini now established a telecommunication shelter division. These units were designed to be highly secure and weather resistant in addition to being portable and lightweight. A stucco finish for the units was also developed, creating the ArmorKoat line and satisfying the needs of telecommunication customers, who were pressured to install shelters and towers better able to blend in with their residential surroundings. Another area in which Mobile Mini was involved was modular steel buildings used primarily as portable schools in Arizona. Because the margins were not high enough, the company opted to phase out this program and devote its time and resources to more profitable areas.

By 1996, Mobile Mini was a company that relied on the sale of storage containers through its own network of branches in Arizona, California, and Texas as well as independent dealers around the country. Just 42.1 percent of the business came from leasing. It was at this point that Bunger and his family (his wife and all five children worked for the company in some capacity) decided to focus on leasing its products through it own network, which Bunger hoped to make national. His eldest son, Steven, became president and chief executive officer of the company in 1997 and oversaw the day-to-day execution of its expansion, while Bunger retained the chairmanship of the corporation. Of major importance to the company's growth was a line of credit established with BT Commercial Corporation, which permitted Mobile Mini to expand its fleet. As a result, revenues that totaled $17.9 million in 1996 almost tripled by 1998, improving to $52.7 million with a profit of nearly $4.5 million. Further, leasing now accounted for 69.2 percent of the company's business. All of this growth was internal, as the company's original eight locations made greater inroads in their markets. Mobile Mini's marketing approach was now well established and was easily applied to new territories. The company compiled data on past customers to determine the profile of a typical user and then used that information to target an intensive direct mail campaign. In addition, it conducted periodic focus groups to keep tabs on customer reactions to its services and products.

By 1998, Mobile Mini was ready to launch an aggressive bid to grow by external means, especially in the South and on the East Coast. In addition to one start-up operation in rapidly growing Albuquerque, New Mexico, the company completed three acquisitions in 1998. In January, Mobile Mini paid $1.4 million in cash plus 85,000 shares of stock to acquire Las Vegas-based Nevada Storage Containers. In April 1998, the company entered the Oklahoma City, Oklahoma, market and complemented its Texas operations with the purchase of Aspen Instant Storage, at the cost of $550,000 in cash and 18,000 shares of stock. Finally, in August, Mobile Mini entered the greater Denver market by paying approximately $2.1 million in cash to acquire Unitrans, Inc. While it might have appeared to observers that Mobile Mini was acting as a traditional consolidator in a highly fragmented industry, the company was in fact not a true roll-up vehicle. Management was really buying storage units and gaining a toehold in a new market while avoiding the costs of a start-up. The company then applied its operating and marketing strategy to the acquisition to quickly transform the business into a profitable concern. Any storage units not up to the quality of Mobile Mini, or outside of its purview, were subsequently sold off. It was this approach that the company would successfully transfer to all future purchases.

Mobile Mini's acquisition strategy intensified in 1999 when the company bought six operations in addition to funding a start-up in Tulsa, Oklahoma. Mobile Mini's first purchase of the year was completed in May with the $25.5 million acquisition of Scottsdale, Arizona-based National Security Containers LLC, one of the country's largest container-leasing companies. As a result of this transaction, Mobile Mini entered three new markets: Colorado Springs, Memphis, and New Orleans. In July 1999, the company entered the Salt Lake City market with the $1.6 million purchase of Mobile Storage Systems, Inc. The Salt Lake City business was then bolstered later in the year with the purchase of the container division of Great Western Leasing & Sales, which was primarily involved in the trailer business. As part of the $1.1 million acquisition, Mobile Mini also added the container assets of Express Trailer Leasing & Sales of greater Chicago, thereby adding another major market to Mobile Mini's expanding network. Finally, in December 1999, Mobile Mini entered the Knoxville, Tennessee, market by paying $600,000 to acquire Big Orange Trailer Rentals, Inc. At the same time, the company announced that bankers increased its credit line from $87 million to $120 million. Because Mobile Mini still had in excess of $17 million remaining on its old line, it entered 2000 with $50 million in additional borrowing capacity to fuel its rapid expansion.

New Markets in 2000

Mobile Mini entered ten new markets in 2000, only one of which was the result of a startup (established in Seattle, Wash- ington). In March 2000, the company completed a $2.2 million cash and stock acquisition of San Antonio-based Advanced Mobile Storage, which provided entry into three new Texas markets: El Paso, Pharr, and Corpus Christi. Also included in the transaction was an affiliate entity, AMS, the acquisition of which added to the business of existing operations in Austin, San Antonio, and Dallas/Ft. Worth. Mobile Mini expanded into Florida in April 2000 with the acquisition of storage assets from A-1 Trailer Rental Ltd and Diversified Container Services, Inc., thereby entering the markets of Jacksonville, Miami/Ft. Lauderdale, Ft. Myers, Tampa, and Orlando. In May 2000, Mobile Mini entered the Atlanta market by acquiring 700 storage units of Trailer, Etc.

Mobile Mini's acquisition pace fell off somewhat in 2001, totaling just six. In February, it paid $1.3 million for the assets of KRJ Systems, Inc, moving into the states of Kansas and Missouri, in particular the bi-state metropolitan area of Kansas City. Mobile Mini entered two new markets via acquisition in April 2001, at a total cost of $4.4 million. The purchase of the storage assets of Giuffre Bros. Cranes, Inc. provided a presence in Milwaukee. By acquiring the storage assets of Metrolina Truck & Trailer Service, Inc., Mobile Mini also entered the Charlotte, North Carolina, market and subsequently expanded the operation to include the greater Raleigh, Durham, and Chapel Hill market--the so-called Research Triangle. Another pair of acquisitions closed in July 2001. The company added Nashville to the fold by acquiring assets from Container Storage Rental, LLC. By buying assets from A Quik-Space Storage Container Company Incorporated, Mobile Mini moved into northern California, adding the cities of San Francisco, Oakland, Stockton, Modesto, and Sacramento. Also in 2001, Steven Bunger succeeded his father as chairman of the board. Richard Bunger stayed on as a Special Projects Administrator involved in new product development and other special projects.

Despite the sluggishness of the economy, Mobile Mini continued its acquisition spree and posted solid growth in 2002. It entered 11 new markets during the year, only one of which was a startup. In May 2002, the company acquired the storage assets of River-Roads Distributing Co., adding the St. Louis market. Mobile Mini also entered the Louisville, Kentucky, market by acquiring Vanco Trailers, Inc. In July 2001, the company completed a major deal, buying the storage container assets of Transport International Pool, which resulted in the addition of five new markets: Baltimore, Richmond, Boston, and Toronto--Mobile Mini's first move beyond the United States. As a result of a smaller transaction, Mobile Mini also entered Columbia, South Carolina. Also in 2002, the company established operations in Columbus, Ohio; Little Rock, Arkansas; and Ft. Worth, Texas. By now, Mobile Mini had graduated from regional status and was now very much a national company, fulfilling a long-cherished dream of its founder.

In addition to growing the company through acquisitions from 1998 to 2002, Mobile Mini also invested money into research and development during this period, resulting in the introduction of a number of new products and applications. In 1998, the company offered a ten-foot-wide storage unit, followed a year later by a specially designed records storage unit that combined excellent security with accessibility. Mobile Mini introduced a wood mobile office unit in 2000. Purchased from other manufacturers, these units were available in a variety of sizes and a wide range of options, including exterior items--such as stairs, ramps, awnings, and skirtings--and interior accessories such as windows with security bars, electrical wiring and phone jacks, heating and air conditioning, carpet or tile flooring, and restrooms. In 2001, the company improved its security locking system, leading to applications for three patents. Another new product was added in 2002, a 10 x 30 foot combination office and storage unit.

Between 1998 and 2002, Mobile Mini's revenues grew from $52.7 million to more than $133 million. Net income during this period grew from $4.5 million to over $18.2 million. Although this latter number was less than the $18.7 million profit posted in 2001, the company's performance, in light of difficult economic conditions, was nevertheless impressive. Both in 2002 and 2003, Mobile Mini made Forbes magazine's FSB 100 list of America's fastest-growing small companies. As a concession to poor economic conditions, Mobile Mini stepped back its aggressive acquisition strategy, although it remained open to opportunistic buys. Regardless, the company was well positioned to enjoy sustained growth in the foreseeable future.

Principal Subsidiaries: Mobile Mini I, Inc.

Principal Competitors: McGrath RentCorp; Miller Building Systems, Inc.; Modtech Holdings, Inc.

Mobile Mini, Inc. History

Company Perspectives:

Key Dates:

Company History:

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