Triton International Limited (NYSE:TRTN) Q4 2019 Earnings Conference Call - Final Transcript

Feb 14, 2020 • 08:30 am ET


Triton International Limited (NYSE:TRTN) Q4 2019 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Triton International Limited 2019 Year-End Earnings Release Conference Call. [Operator Instructions] Please note this event is being recorded. At this time, I would like to turn the conference over to Mr. John Burns, Chief Financial Officer. Please go ahead, sir.

John Burns

Thank you, Keith. Good morning, and thank you for joining us on today's call. We are here to discuss Triton's fourth quarter and full-year 2019 results, which were reported this morning. Joining me on this morning's call from Triton is Brian Sondey, our CEO; and John O'Callaghan, our Executive Vice President and Head of Global Marketing and Operations.

Before I turn the call over to Brian, I'd like to note that our prepared remarks will follow along with the presentation that can be found in the Investors section of our website under Investor Presentations. I'd like to direct you to Slide 2 of that presentation and remind you that today's presentation includes forward-looking statements that reflect Triton's current view with respect to future events, financial performance and industry conditions. These forward-looking statements are subject to various risks and uncertainties.

Triton has provided additional information in its reports on file with the SEC concerning factors that could cause actual results to differ materially from those contained in this presentation, and we encourage you to review those factors. In addition, reconciliations of non-GAAP measures to the most directly comparable GAAP financial measures are included in our earnings release and presentation.

With these formalities out of the way, I'll now turn the call over to Brian.

Brian Sondey

Thanks, John, and welcome to Triton International's fourth quarter 2019 earnings conference call. I'll start with Slide 3 of the presentation. Triton achieved solid results in the fourth quarter of 2019. Triton generated $77.5 million of adjusted net income in the fourth quarter or $1.07 per share. We also achieved an annualized return on equity of 14.6%. Triton's performance held up well in 2019, despite facing challenging market conditions. Triton generated $4.57 of adjusted income per share, and our return on equity was 16% for the full year. And while our purchases of new containers were limited in 2019, we were able to redirect our strong cash flow to other high-value investments.

The resiliency of our financial performance and our ability to create shareholder value in a tough market environment are reflective of our strong and stable cash flow, our well structured long-term lease portfolio, and our industry-leading operating and marketing capabilities. The first quarter typically represents our weakest quarter of the year, since it represents the depth of the slow season for dry containers, has the fewest number of days and has extra SG&A expenses.

Our first quarter this year will also be negatively impacted by the decrease in our utilization during the fourth quarter of 2019, a lease extension transaction with a large customer, and our issuance of preferred stock ahead of opportunities to deploy the capital. As a result, we expect our adjusted net income will