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Mobile Mini Inc (MINI) Q4 2019 Earnings Call Transcript

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Mobile Mini Inc (NASDAQ: MINI)
Q4 2019 Earnings Call
Jan 29, 2020, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, everyone, and welcome to the Mobile Mini 2019 Fourth Quarter Conference Call. [Operator Instructions] There is also a presentation that accompanies this conference call, which you can access at Mobile Mini's website at www.mobilemini.com. It is on the Investors page.

Before turning the call over to Kelly Williams, Mobile Mini's Chief Executive Officer, I will read the safe harbor statement. Before the presentation and the comments begin, Mobile Mini would like to remind you that some of the statements and responses to your questions in this conference call may include forward-looking statements. As such, they are subject to future events and uncertainties that could cause our actual results to differ materially from these statements.

Any forward-looking statements that should be considered in conjunction with the cautionary statements in our press release and the risk factors included in our filings with the SEC, which Mobile Mini encourages you to read. In addition, please refer to the Investors section of Mobile Mini's website to find additional disclosures and reconciliations of non-GAAP financial measures that will be used on today's call.

Now I will turn the call over to Kelly Williams.

Kelly Williams -- President and Chief Executive Officer

Good morning, everyone, and welcome to Mobile Mini's fourth quarter 2019 conference call. I'm Kelly Williams, Mobile Mini's President and CEO and with me today is Van Welch, our Executive VP and CFO.

I will review the operational highlights of the quarter, the current business environment and our strategy, while Van will discuss the Q4 financials. We will then open the call up to questions. I encourage you to review the full quarterly presentation providing more detailed results for your reference, which has also been posted to our website.

Let me begin by saying that 2019 was a record year of free cash flow generation for Mobile Mini. The company is $143 million in free cash flow for 2019 nearly doubled prior year's number, reflecting the underlying strength of our business model and improvements made in working capital, as well as disciplined capital strategy. This free cash flow generation provided us considerable flexibility to execute on our balanced capital allocation plan in 2019, this supported growth initiatives and return value to shareholders, while also paying down debt.

We closed four acquisitions during the year in North America Storage Solutions and we returned more than $77 million or 54% of free cash flow to shareholders in the form of dividends and share repurchases. So overall, an impressive 2019 capped off by a strong fourth quarter in North America Storage Solutions.

Core rental rate increases of 4.5%, a favorable mix and managed services revenue growth drove 4.1% year-over-year rental growth in the fourth quarter for North America Storage Solutions with an average OEC utilization nearing 81%. The combination of increased revenue, our ongoing efficiency enhancements and variable compensation tailwinds drove a 17.6% increase in adjusted EBITDA. North America closed the quarter with an impressive 47.3% adjusted EBITDA margin.

One favorable impact on our financial performance in both Q4 and full-year 2019 came from the product mix in North America Storage Solutions. Ground level offices or GLOs positively impacted rental revenue growth from all perspectives; rate, volume and mix. For the fourth quarter the core rates on GLOs increased by a meaningful 10% with rates on newly placed GLOs up 11.8%. Average GLO units on rent for the quarter increased by 7% year-over-year. Growth potential for GLOs stems from strong customer demand and a higher price point than containers.

In North America Storage Solutions, national account revenue continues to be greater than 35% of segment rental revenue on an annual basis. We believe that building closer national customer relationships will continue to grow this revenue. As we anticipated on the last earnings call, the peak seasonal units on rent in 2019 did indeed beat 2017's peak, but trailed 2018s due to the one-time large volume order in late 2018. This unfavorable comparison affected the latter part of Q4 2019, and will impact trucking and rental revenue in Q1 2020 as a comparison to Q1 2019. Our core units on rent remain above prior year and our pipeline of pending orders leaves us optimistic about 2020 in North America, storage.

In 2019, we further separated ourselves from the pack as a premium provider by expanding our brand as a one-stop shop through managed services, where we partner with strategic vendors to arrange for rerented items. In 2019 managed services conducted over 5,100 transactions.

Tank & Pump Solutions rental revenues increased 5% for full-year 2019 with adjusted EBITDA margin expansion of 230 basis points to 34%, primarily due to a strong performance of 16% year-over-year rental revenue growth in the first half of 2019. For Q4 2019 Tank & Pump rental revenues decreased to 11%, compared to the prior year, while achieving adjusted EBITDA margin of 32%. Revenue related to the downstream market, which represents a majority of our Tank & Pump business was down compared to the prior year fourth quarter.

Q4 2018 results included several larger turnarounds that did not repeat this year and we experienced more softening in the underlying industrial market in Q4 2019 than expected. Our year-over-year comps as well as the current environment of the industrial market will make the first half of the year our most challenging. However, this division continues to see improved operating efficiency and we anticipate revenue and EBITDA growth of the business for the full-year 2020.

In the UK fourth quarter rental revenue was down approximately 4% year-over-year in local currency, a healthy rate increase of 2.4% was offset by decreased average units on rent and unfavorable mix. In the UK, recently implemented changes to conform our sales model and other infrastructure to North America operations have stabilized the business and improve the efficiency of our overall operational structure with the operational changes we anticipate margins to improve over prior year throughout 2020.

I'm very pleased that Mobile Mini continues to be recognized as an employer of choice. We were honored to be named one of the most admired companies in Arizona for the second consecutive year. Our vision to be an employer of choice is built around a committed senior leadership team, who continues to invest in key affinity groups, such as our diversity council and women's leadership group. This focus coupled with increased training initiatives like our branch manager mentoring program is resulting in reduced employee turnover and more importantly, a more inclusive workforce to meet the demands of attracting and retaining the best employees in the industry.

Finally, despite mixed industrial market conditions, the economic environment for the majority of our US end markets, which represents 87% of our business remained positive during the fourth quarter, based on our assessment of current business trends, we expect the underlying market conditions and the construction as well as retail and consumer services will remain generally healthy.

I will now hand over the call to Van, who will cover the financials.

Van Welch -- Executive Vice President and Chief Financial Officer

Thank you, Kelly. Good morning, everyone. I am pleased that we delivered on our Evergreen model for the 12-months ended December 31st 2019, driving consolidated rental revenue up 4.2%. Our adjusted EBITDA increased 11% to $249 million with a margin of 39.6%, an expansion of 300 basis points, as compared to full-year 2018. In addition to significant margin expansion we had a healthy improvement in return on capital employed, which also exceeded our cost of capital, increased our annual dividends by 10% and delevered to 3.6 times, down from 4.2 times at December 31st 2018.

For Q4 2019, our adjusted effective tax rate was 22.8%. During the quarter we had $1 million of tax benefit related to a return to provision associated with US federal and state tax returns from previous years. For full-year 2020, we expect an effective tax rate of 26% to 27%. Due to our NOL positions, we do not expect to pay meaningful US federal cash taxes until at least 2022.

Adjusted share-based compensation expense totaled $2.3 million for Q4, 2019 and $11.5 million for the full-year. Share-based compensation in 2020 is forecasted to be similar to 2019. Depreciation and amortization totaled $17.6 million for Q4 2019 and $70.6 million for the full-year, we expect a slight increase from 2019 to 2020 in depreciation and amortization.

Moving on to our record free cash flow, increased cash from operations, as well as a reduction in net capital expenditures resulted in Q4 free cash flow of $51.1 million, a $26.2 million increase, compared to the prior year quarter. Full-year 2019 free cash flow of $143 million was nearly double our levels from last year. Total net capital expenditures, which include spend on both fleet and PP&E were $9.7 million in Q4 2019, compared to $19 million in 2018.

Growth expenditures on fleet totaled $9.6 million for the quarter, $7.2 million of the spend was from was for North America Storage Solutions, which primarily was used to create ground level offices to support increasing demand for this product line.

Total net capital expenditures for the full-year 2019 were approximately $70 million, a decrease of $17 million year-over-year. We anticipate net capex of between $45 million and $55 million in 2020. Rolling stock, such as forklift, trucks and service vehicles is chiefly obtained through finance leases. For the year ended December 31st 2019, we acquired approximately $2 million of rolling stock via finance leases, mainly to refresh existing rolling stock assets, and we expect similar levels in 2020.

During the quarter we paid dividends of $12 million, a 10% year-over-year increase. In addition, during the fourth quarter, we invested $8.2 million in acquisitions, pay down ABL debt of $28.6 million and closed 2019 with a leverage ratio of 3.6 times. We are very pleased with the record $143 million free cash flow generated in 2019, which we expect to exceed in 2020.

The continued to free cash flow generation, reduction of leverage and more than $440 million of ample liquidity under our revolver drive a great deal of financial flexibility to carry out our capital allocation strategy in 2020 as follows: we will continue to prioritizing acquisition in North America Storage Solutions and explore growth opportunities through the greenfield expansion of our services by establishing new yards and promising geographic areas for both North America Storage Solutions and Tank & Pump Solutions. We expect to increase dividend payments at 10% per year, as well as opportunistically repurchase treasury stock under our program. And finally we will use the remaining free cash flow to further reduce debt.

With that, I will return the call to Kelly. Thank you very much.

Kelly Williams -- President and Chief Executive Officer

Thank you, Van. We enter 2020 from a position of operational and financial strength with a large and diversified customer base and a sustainable operational cadence. Customers continue to validate our reputation as a premium provider of products and services as evidenced by our 2019 NPS and customer effort score is being the highest in company history. We are the leader in storage products, market coverage, technology and customer service.

The platform we have built and continue to grow and improve our business in the future, as we execute on the growth strategy. We will continue to balance growth with improved margins and free cash flow generation, all in an effort to maximize value for our shareholders. Our Evergreen targets continue to capture our strategic objectives over a cycle and specifically for the full-year 2020, we expect our full-year rental revenue growth to achieve GDP plus 2% to 3% by balancing rate and volume.

We expect EBITDA margins to expand over 40%, we also expect to increase return on capital employed and again exceed our cost of capital. I'm very pleased with our 2019 performance and look forward to building on our success in 2020. Finally, we'll be hosting an Investor Day in New York City on Tuesday, March 10th and I look forward to seeing many of you there.

I will now turn the call over to the operator for instructions on the Q&A. Thank you very much.

Questions and Answers:

Operator

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions] Our first question today is coming from Scott Schneeberger from Oppenheimer. Your line is now live.

Scott Schneeberger -- Oppenheimer -- Analyst

Thanks very much. Good morning.

Kelly Williams -- President and Chief Executive Officer

Hi, Scott.

Scott Schneeberger -- Oppenheimer -- Analyst

Hey, Kelly. I guess first question rental rate in Storage Solutions accelerated on new units and just wanted to get the kind of why and how behind that, and what that means for the coming year and what rental rate progression could be specifically in Storage Solutions into 2020? And then maybe touching on some of the end markets where you're seeing differences. Thanks.

Kelly Williams -- President and Chief Executive Officer

Sure. Yes, so I think when you look at rental rates we've always had that expectation of growing rate somewhere between 2% and 3% and have had a lot of success over the course of the last five or six years in doing so. One of the things that we've benefited from here is a shift in mix you can as I made mention in the prepared remarks there at the ground level offices are growing at a faster pace than containers, our GLOs are about 13% of the overall product mix there, and we've got much higher rate increases. I think our new units on rent are up nearly 12% there.

But we also have national account improvement there on the storage side of close to 4%. And so I think if you go back over the last couple of years as you think about the mix shift that we've had from national accounts from 12% or 15% to 35% that came with a bit of a volume discount where today, I think we've proven out to these customers, the service levels are solid and so we're able to go get rate increases there. So I'd say it's a combination of the two things there. And I do anticipate our new rates going out, we're a little over 6% on our core business. So, I do anticipate probably stronger than our history there would indicate, Scott.

Scott Schneeberger -- Oppenheimer -- Analyst

Great, thanks for that. And then it's really strong adjusted EBITDA margin expansion. I see on Slide 19, you talk about some of the puts and takes on the -- in opex. But I just like you to go a level deeper and you're looking for a better than 40% EBITDA margin next year. So how will things like the incentive plan, a variable incentive plan you mentioned payroll cost, transportation cost and then also the bad guy being higher bad debt expense? How do those play in the quarter and how do you see them helping or hurting and other factors in next year on the expense lines?

Kelly Williams -- President and Chief Executive Officer

Yes, sure. I think, first off, when you think of margin expansion we go back to the rental rates, I mean the flow through on rental rates is going to be obviously in the 95% to 97%. The only thing we've got there is commission costs you pointed out some of the other operational efficiencies, I think we're certainly better at logistics, we are seeing a big reduction in outside of hauling due to the focus in transportation. We certainly have had a big boost with technology, I think when you think back to our work order system with SAP, I think we've created a baseline for labor costs and other efficiencies there. We build more damages because we've got mobile devices and the ability to take pictures.

DocuSign, a lot of these things have been a big benefit there. Obviously, the variable comp has been a tailwind for us, but I think it's important to understand that the variable comp in 2019 was that target. So, though it was a tailwind in terms of the margin expansion, what you look at in terms of 2020 is -- would be spot on in terms of how we would plan that variable comp, which is right at target. So all those factors together and the fact that we've got a disciplined operational cadence would tell us that we expect to continue to grow margins.

Scott Schneeberger -- Oppenheimer -- Analyst

Thanks. One more if I could sneak in before I turn it over. Capex guidance, the excluding capital leases for 2020 of $45 million to $55 million is a significant decrease from past years. Could you just elaborate on where that change is coming from?

Van Welch -- Executive Vice President and Chief Financial Officer

Yeah. Thanks, Scott. This is Van. I mean, if you look at some of the things that we've done certainly over the last year or two in terms of capital efficiency, we're seeing that play out. We're a lot smarter perhaps than what we've been in the past. Also, if you look at the utilization factors that we have in both Storage and Tank & Pump, I think we've got some room in unavailable fleet -- our available fleet that we can first put those to rent before we expand into capital expenditures. So I think we're in really good shape, I mean, I think that $45 million to $55 million is going to get us to the targeted levels that we talked about of GDP plus 2% to 3% in terms of revenue perspective.

Scott Schneeberger -- Oppenheimer -- Analyst

Great, thanks. And that the excess capacity was that -- I didn't catch, you might have said it was that Storage or Tank and if in Storage did that. How are you doing on those 3,000 custom-made units you got from China? How is -- how have those been applied?

Kelly Williams -- President and Chief Executive Officer

Well, very good, I mean the 3,000 units that we got from China. First of all, they were manufactured at a very high quality. They're all now on the ground in locations where we want them to be, and they're ready to be utilized some of them are already being utilized. Obviously, in terms of being on rent, but that's certainly playing into the factor of the capital expenditure guidance and forecast that we've given for 2020.

Scott Schneeberger -- Oppenheimer -- Analyst

And thanks. I'll turn it over. Appreciate it.

Kelly Williams -- President and Chief Executive Officer

Thanks, Scott.

Operator

Our next question is coming from Andrew Wittmann from Baird. Your line is now live.

Andrew Wittmann -- Robert W. Baird -- Analyst

Great, thanks. Hey, guys. I want to build a little bit on Scott's question. I asked it a little bit different way in the past you guys have talked about your incremental EBITDA margins being north of 60%, you're saying they're up here, which is great. I'm just wondering, if there's any change in your view as to the incremental margin targets you laid out in the past as it relates to 2020 now that -- I mean certainly, your incremental margins were much better than that in 2019. You mentioned some of the benefit you had from variable compensation. But now the 2020 seems to be stacking up as a little bit more normal year in terms of the cost structure, is 60% still the right way of thinking about it or are there puts and takes that we should be considering in that?

Kelly Williams -- President and Chief Executive Officer

Yes. It's, Andrew, I think, first of all, I would -- I'm really looking at updating the Evergreen model. I think if you look at 2019 we virtually achieved every target that we had set there in the Evergreen model, and I think there's a couple of things that come into play here, and I intend to, as we review not only the Evergreen model, but the capital allocation strategy to kind of unveiled that at the Investor Day.

But I think when you look at different ways we're going to grow the business. One of them is through managed services, which doesn't require capital, but it is at margins that are slightly dilutive to the overall organization today. I think there are other areas of opportunity for us to grow the business, thing like used equipment sales or what we referenced as flip sales, which really, we don't have to touch the unit, we can drive significant EBITDA, but it comes at lower margins. So I don't know that I'm going to tell you that our point is 60% flow through, but I can tell you it's fairly close. I think our emphasis, our point of emphasis here is to grow the margin and we can do that at 50% flow through, and we can enhance our returns to the shareholder and to do all of the right things here without running a 60% flow through, but I think if you keep in mind that discipline around how we look at rental rates, if you keep in mind the operational efficiencies, I think, we're in that neighborhood, I'm just not sure I'd point you to 60%.

Andrew Wittmann -- Robert W. Baird -- Analyst

Okay, that's great context. Thanks for that, Kelly. I guess, since you mentioned it, I wanted to ask about it anyway, is if you could just -- I'm curious if now that managed services has been part of your strategy, a bigger part of your strategy, it's going to continue to grow and be a part of your strategy. I'm just wondering, if you could give us some context maybe Van on the amount of revenue that, that contributed in 2019 or even in the fourth quarter. I'm just kind of curious as to how that's factoring into the company's P&L today?

Van Welch -- Executive Vice President and Chief Financial Officer

Sure, Andrew. In Q4, we did about $4.1 million of revenue and managed services. For the year, we did around $10.6 million, that's up from about under $5 million in 2019.

Kelly Williams -- President and Chief Executive Officer

Yes, Andrew I -- just to follow back up here. There's obviously a lot of room to grow here, we haven't built out this -- the strategy is there, we're very effective with managed services at a national level. We've got over 2,000 units on rent. The opportunity for us is to grow the vendor network and the strategic partnerships, and that's really where the plant has got to come into play force here, because once we are able to get the sales reps, which is our largest lead generation tool here in the organization on board and make it very easy for them to select vendors, it will go at a much, much faster pace, I don't want to call it a pilot anymore. I think it's an initiative we think is grabbing shape. But it's -- there are few other pieces we've got to get put in place here for it to accelerate.

Andrew Wittmann -- Robert W. Baird -- Analyst

Yes. That makes sense. Kelly, I think we -- probably the next question I want to ask, would be on your Tank & Pump business particularly here. Clearly the fourth quarter saw more material signs of weakness. You kind of talked about in the last conference call, but I think even you guys had admitted it came in a little bit weaker than expected. So given that, I just maybe some color on -- you mentioned some turnarounds and come through, and that makes sense, those are always unpredictable.

But in terms of the customer line up or maybe pending orders that you have here in the backlog right now, clearly you're seeing something that's giving you confidence saying, it sounds like the first half, maybe a little bit weaker, but the second half you feel like there's going to be enough growth to drive growth for the year, I think that's what I heard. So if you could just talk about some of the dynamics that you're seeing in those end markets to give us some confidence that EBITDA could in fact be up in 2020 despite the fourth quarter here?

Kelly Williams -- President and Chief Executive Officer

Sure. I think you -- I made reference to this, but there -- we had the turnarounds. In very few cases where they push they were smaller turnarounds. We had a couple of historic turnarounds and if you can remember, Q4, we of '17, we signed a considerable amount of MSAs and we saw some of those really kick off in latter half of 2018, and so these comps are little bit more challenging. That said, we also have one or two large customers that they did defer spending and maintenance, and they are couple of our largest customers. And so I -- our belief here is that based on their indications that we'll going through those projects here before the year is out.

But I think there's also an ownership here from our standpoint where we're really focused on becoming a more disciplined sales organization to win more at the local level to be a more -- to get more local transactional wins, I think that some of the discipline that we have on the storage side around sales and sales process, specifically with sales force our CRM has got room for improvement. So I think that some of this is market driven, and some of this is an opportunity for us to continue to engage appropriately with our sales force to win more locally. So yes, I still think that we saw -- we've seen utilization up 3 or so percentage points since the start of the year. And you know, the comps are a little tougher here in the first quarter or two, but I do have a lot of confidence, not only are their weaker comps in the second half of the year, but I think that business isn't completely going away here we just had a couple of customers that slowed.

Andrew Wittmann -- Robert W. Baird -- Analyst

Okay and then just one last one from me for Van, I guess. When you went through the order of your capital priorities, is the debt reduction is the last thing on there. So 3.6 times, I think it was the number you end of the year, Van. Is that kind of where we're thinking status quo here or how do we think about your leverage targets today as you head into 2020, and where you want to really be?

Van Welch -- Executive Vice President and Chief Financial Officer

Well, I think if you look at, I mean, certainly, if you look at 2019, Andrew. We were able to do as Kelly mentioned a balanced capital allocation where we focused on a number of things including share repurchases, as well as acquisition and continue to pay down debt in 2019. We're certainly looking at growth in North America Storage Solutions and continuing along the lines of making those kinds of acquisitions that we did in the latter half of 2019. We did four of those in 2019, we added about 2,300 units associated with those acquisitions. I would expect, we're going to continue to do that and focus on that growth.

But share repurchase is still we did $28 million worth of share repurchases in 2019. We're going to be opportunistic on that end. But certainly leverage I would anticipate that, that will still be a factor of decrease in leverage. As we've said many times in the past it's 3.6 times with our operating model that we have in the free cash flow that we generate. We're happy with that, but there'll be some room for further leverage reduction in 2020 as well.

Andrew Wittmann -- Robert W. Baird -- Analyst

All right. Great guys, thanks.

Kelly Williams -- President and Chief Executive Officer

Thanks, Andrew.

Operator

[Operator Instructions] Our next question is coming from Sam England from Berenberg. Your line is now live.

Samuel England -- Berenberg -- Analyst

Hi guys. Just a couple from me. The first one, just wondered how you're thinking about the UK business heading into 2020 and whether you're seen any signs of recovery yet or whether it's too early to say?

Kelly Williams -- President and Chief Executive Officer

Hey, Sam. Good morning. Yes, I actually pointed to this in the prepared remarks. I think that we are seeing some signs of life here in terms of our pending orders. And I think that's a real positive. That's -- we've shifted to the US-based land-based model and I feel very, very good about where we are over there. I think it's probably going to be a bit of a challenge here, I mean, right until Brexit is completely resolved. So I think there's still a little bit of uncertainty, but I do believe we've implemented some strategy and some changes there that are going to increase margins, and I do think that over the course of the first couple of quarters here we'll continue to see improvement in terms of revenue and I'm very confident from a margin standpoint that you'll see year-over-year improvement really starting within the first half of the year here.

Samuel England -- Berenberg -- Analyst

Great, thanks. And then the next one is around Tank & Pump. I wondered if you're doing anything or planning to do anything on the cost side in that business? Or is it too early and you're waiting to see how the business recovers in the first half before deciding whether to do anything?

Kelly Williams -- President and Chief Executive Officer

Yes, I mean, I think if you're thinking -- and we're always obviously looking to manage costs and optimize or maximize our margins here. I think that where we look at this business right now is that we've got -- still got an opportunity to grow. We've got about five locations designated as geographic expansion opportunities. And we've got a much more talented group over here in terms of personnel as well. So we'll certainly see how it progresses, but we're always looking to manage cost efficiently here. And again, I think that we're gaining efficiency and in turn we'll continue to see margin expansion here, I think we just got to make sure we get the revenue picked up here in the first half of the year.

Samuel England -- Berenberg -- Analyst

Great, thanks very much.

Kelly Williams -- President and Chief Executive Officer

All right, Sam. Thank you.

Operator

Thank you. Our next question is coming from Kevin McVeigh from Credit Suisse. Your line is now live.

Palmer Pawlusiak -- Credit Suisse -- Analyst

Hey guys, this is Palmer on for Kevin. And thanks for taking the question. Looking at the ground level offices, nice rate growth there. I'm trying to get a sense of the cross-sell opportunity there. Are you seeing any of your existing customers in the Storage Solutions kind of utilize those? Or how should we think about the go-to-market and cross-sell opportunity there?

Kelly Williams -- President and Chief Executive Officer

Yes, sure. The ground level office has been a core product offering of ours really since the company got in business. I think that how I might look at it Palmer that, this is an offering once we divested of the mobiles that became a very compelling in terms of us really trying to drive value there. I think one of the unique things about this product offering is we basically convert standard shipping containers, and a standing -- standard shipping container comes in eight by 20 or eight by 40 and Mobile Mini historically manufactured these units to have 10-footwide offices here or 10-footwide containers. And so when we basically designated the 10-footwide container as a conversion opportunity to the ground level office. So we've got 2 feet wider obviously for the customer and I always kind of joke about it in airline, we're willing to pay for 6-inches more room for seat comfort.

You can imagine these guys that are in the office for up to multiple years that a couple of additional feet mean a big difference. And so that's really been a big part of our go-to-market strategy, but it's still been a core product offering. The cross selling we do find that we rent more containers when when GLOs go out there, we're able to couple of those. So I think it's a big opportunity for us going forward as we continue to accelerate use of capital into these capital conversions.

Palmer Pawlusiak -- Credit Suisse -- Analyst

Awesome. Thank you. And then just one follow-up, you guys made some bolt-on acquisitions here in 2019. Can you just talk about the integration of those assets. And then just a housekeeping question for Van. How much did acquisitions contribute to revenue in the quarter and the full-year.

Van Welch -- Executive Vice President and Chief Financial Officer

Yes, Palmer, we really don't -- we don't really track that, I would say that for the full-year, it was fairly minimal. But I mentioned the number of units they were highly utilized units that we acquired. But we don't really separate and track in-store kind of revenue.

Kelly Williams -- President and Chief Executive Officer

I would say just speaking to the integration that was something that Palmer we hadn't done a Storage acquisition for about four years. And part of that was, as I've spoken to historically, the kind of the big transformation the organization went through because today, we're operationally efficient enough to be able to integrate an acquisition and obviously where we're paying for these typically 5 times to 6 times they're very accretive to the overall business, but retaining the customer is critical for us. And so we've put a lot of measurements in place through the integration process to hold rates for those customers to prove out the differentiation in our containers and service levels we operate it 24/7 service, which really nobody in the industry does. And so I think that we certainly see retention rates of these customers to be much higher.

Palmer Pawlusiak -- Credit Suisse -- Analyst

Awesome. Thank you very much.

Kelly Williams -- President and Chief Executive Officer

Okay. Thank you.

Operator

[Operator Instructions] Our next question is coming from Stanley Elliott from Stifel. Your line is now live.

Stanley Elliott -- Stifel Nicolaus & Company -- Analyst

Hey, morning guys. Thanks for [Indecipherable] me in. I got -- managed to kick myself off the call. So I hope I'm not going to ask a repeat question. Could you guys talk a little bit more about kind of expectations for the retail portion of the business on a go-forward basis is for starters?

Kelly Williams -- President and Chief Executive Officer

Sure. So I think there's really two components when we think of retail here. One, obviously has been and really advantageous to us and that's the remodel business with some of the largest retailers as they look to compete and enhance the in-store experience that's something, I think we've certainly taken advantage of and I anticipate 2020 in terms of the remodels to be similar to 2019. We continue to really build stronger relationships with these largest retailers. So that segment is certainly, I think we're optimistic on.

I think when you look at the seasonal side of the business, I think that there is less opportunity than there was say five or six years ago, I don't think it's significantly less Stanley, but we have gained market share, as we've gone and progressed through the last five or six years. Again, I don't think it's a major decline and I think that was asked five -- or four or five years ago certainly considering Amazon and some of the other e-commerce opportunities that were out there. But our relationships are stronger, we continue to gain a little bit of market share, and like I said, it was a really strong seasonal year if you excluded the one-time event that we had last year.

Stanley Elliott -- Stifel Nicolaus & Company -- Analyst

And could you talk a little bit about the cadence maybe the tech investments going forward. We think some of that kind of rolling off is certainly helping the margins, which have been fantastic here. But maybe talk about the tech investments on a go-forward basis and how that's allowing you to more quickly integrate some of these acquisitions, you guys have?

Kelly Williams -- President and Chief Executive Officer

Absolutely. I appreciate you bringing that up. I touched on it just a little bit earlier, but technology has been a big part of our improvement in operating efficiency. I mean, there's a couple of different ways we can go. I think one of the things you're seeing with the decline in DSO is that we've got customers, our largest customers that are on our Mobile Mini connect, our portal and paying online and that's certainly driven down DSOs for us significantly.

But I think operationally, when you look at our -- the implementation of our handheld devices, we're able to build more damages, we're able to take pictures. DocuSign is certainly been a big advantage for us with the customer being able to electronically sign and have that documentation. The efficiencies that are coming out of SAP are significant and I think we're still just getting started. I think the portal has got a lot more opportunity for us to transition customers over to that. But I think one of the biggest has been the work order system, which again allowed us to identify the repair costs on these units, which we didn't have until SAP and from there, we were able to really identify kind of a baseline for labor costs and understand and measure productivity in the yard.

And from there, our supply chain group, and specifically, asset management has just done an outstanding job of identifying opportunities there. Everything from paint reduction to productivity measurement of how long it takes to repair units to inventory parts, inventory, those things. It's been a big piece of this operational efficiency improvement you're seeing.

Van Welch -- Executive Vice President and Chief Financial Officer

And Stanley, I'll just I'll just jump in and add to what Kelly said on the work order system and SAP in general. And it's enabled us not only manage the repair cost more efficiently, but also our keys to capital as we're going to repair first before we make any capital expenditure. That's one of the reasons, and I referred to us being smarter in the earlier with a question that Scott had. It's associated with this effort that we're being a lot smarter on repairs, which are leading to us being much smarter on capital efficiency and doing capital expenditures.

Stanley Elliott -- Stifel Nicolaus & Company -- Analyst

No doubt. And then lastly, kind of more broadly, love to get your thoughts on the cycle. I mean this time last year, I think everybody was concerned about a recession. A lot of that seems to be off the table and we're hearing generally positive commentary on the ground. Love to hear what some of your customers are saying, especially with your assets being longer life and duration in rental?

Kelly Williams -- President and Chief Executive Officer

Sure. I am -- we have our pending pipeline orders, which is -- we've got about 90 days viewpoint here with those that are up to prior year and that gives us optimism certainly for 2020, and I think, as I made mention, we've got a pretty good look at the remodels that's one piece of it. So when you look at construction they're pointing to 2020 being a similar or slightly better than 2019 actually even pointing into 2021. So we haven't gotten any customer feedback that causes us great concern. We have talked about a bit of an industrial slowdown. But again, even that I don't think is something that's overly concerning. I mean, that a lot of that is in the upstream and it does carry over into the downstream, but there's also opportunity for us to improve here. And again, I think that the tank side of the business is much more efficient.

And lastly I think, Stanley, I'd point to the UK where, again, it's a little bit more difficult for us to understand. There's still some of that uncertainty around Brexit, but I am confident that once we get a little bit more clarity over there that the construction side would certainly look to make a pretty big turn. But again, we are much more efficient and I still anticipate margin expansion in really all three segments here, the UK, the US Storage and Tank & Pump here over the course of the full-year.

Stanley Elliott -- Stifel Nicolaus & Company -- Analyst

Great. Thanks guys, I appreciate the time. Best of luck.

Kelly Williams -- President and Chief Executive Officer

All right. Thank you.

Operator

Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

Kelly Williams -- President and Chief Executive Officer

All right, thank you very much. I appreciate everybody joining us here for the Q4 2019 call and we'll look forward to seeing those of you that are able to attend with us at the Investor Day, March 10th in New York City. And for those of you that won't, we look forward to the Q1 2020 call. Thank you very much.

Operator

[Operator Closing Remarks]

Duration: 42 minutes

Call participants:

Kelly Williams -- President and Chief Executive Officer

Van Welch -- Executive Vice President and Chief Financial Officer

Scott Schneeberger -- Oppenheimer -- Analyst

Andrew Wittmann -- Robert W. Baird -- Analyst

Samuel England -- Berenberg -- Analyst

Palmer Pawlusiak -- Credit Suisse -- Analyst

Stanley Elliott -- Stifel Nicolaus & Company -- Analyst

More MINI analysis

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