2019 Proxy Statement and Annual Report October 18, 2019
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2019 Proxy Statement and Annual Report October 18, 2019 Dear fellow stockholders, The General Finance Corporation team continues to deliver great results in executing our long-term growth strategy. We continue to execute our growth strategy with our specialty rental services business model. Our business model has several key features: an attractive asset class of long-lived assets that offer rapid payback periods and low maintenance costs, a diversified customer base and storage products adoptable to a wide variety of uses. We continue to manage our business model to deliver organic growth, recurring leasing revenue, superior customer service, product innovation, operational excellence and disciplined acquisitions. GROWTH MILESTONES Through our team’s dedication and commitment to our long-term growth strategies, we reached important growth milestones in fiscal year ended June 30, 2019, or fiscal year 2019: Branch Network and Lease Fleet Growth. Our branch network has grown from 15 branches at June 2007 to 101 branches at June 30, 2019, and from June 2008 to June 2019 our lease fleet grew at a compound annual growth rate of 12%. Revenue, Leasing Revenue and EBITDA Growth. Fiscal year 2019 revenues, leasing revenue and Adjusted EBITDA increased by 8.9%, 12% and 21.9%, respectively, over the prior fiscal year. EBITDA Margin Growth. Our EBITDA margins have increased from 17% in June 2007 to 28% at June 30, 2019. Large and Loyal Customer Base. Outstanding customer service, as evidenced by Pac-Van’s fiscal year 2019 net promoter score of 84, has fueled the growth of our customer base from 12,000 customers at June 2007 to over 50,000 customers at June 30, 2019. Disciplined and Accretive Acquisitions. In fiscal year 2019 we continued our long-term strategy of completing disciplined acquisitions, entering five new markets in North America and the Asia-Pacific region via six acquisitions in fiscal year 2019, and from July 1, 2007 to June 30, 2019 we completed 57 accretive acquisitions. Product Innovation. Customers have embraced the safety and convenience of the locking system featured in our U.S. PV3 Safety Containers, Canadian CK3 Safety Containers and Asia-Pacific Wolf Lock Premium Containers, and as of June 30, 2019 U.S customers had leased nearly 4,000 PV3 Safety Containers. LEASE FLEET During fiscal year 2019 our combined North America and Asia-Pacific lease fleet units increased 16.2% as we continued to carefully allocate capital to organic growth via capital expenditures and to accretive acquisitions. In fiscal year 2019 we invested $38.5 million in net lease fleet purchases to drive organic growth and $22.3 million to acquire North America and Asia-Pacific container businesses. The charts below show the long-term growth of our lease fleet, unit utilization and the value of our lease fleet. Lease Fleet, net $600 ($ in millions) Lease Fleet Units 120,000 85% $500 $87 $22 80% 80% 80% $38 $38 $23 $5 80% $55 $21 100,000 76% 77% $21 $22 99,743 $400 75% 80,000 85,812 78,605 80,712 72,856 70% $300 60,000 65% $457 $200 $411 $419 $427 $429 40,000 60% $100 20,000 55% - 50% $- FY 2015 FY 2016FY 2017 FY 2018 FY 2019 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Total Units in Fleet Average Fleet Utilization Lease Fleet, net Organic Growth Acquisitions OUR PEOPLE AND CUSTOMERS Our team continues to deliver outstanding customer service, earning Pac-Van a “net promoter score” of 84 in fiscal year 2019, which we believe leads our industry. This high level of customer satisfaction has helped General Finance Corporation build the diverse and loyal customer base shown below. Fiscal Year 2017 Fiscal Year 2018 Fiscal Year 2019 Government Government Mining Government Other Mining 2% Education 3% 3% Education 2% 5% 2% 3% 1% Mining Other Retail 3% Commercial Retail 4% 5% Commercial Education Commercial 25% 27% 23% 6% Consumer 3% Consumer Moving & 5% 5% Transportation Other Retail 6% 6% 5% Consumer Moving & 7% Moving & Transportation Construction Transportation Construction 6% Construction 22% 6% 22% Oil & Gas 23% Industrial Industrial 10% 9% 11% Industrial Oil & Gas Oil & Gas 11% 14% 15% LEADERSHIP Our executive team, lead by Jody Miller, Chuck Barrantes, Jeff Kluckman and Chris Wilson, continues to successfully execute our long-term growth strategy with critical contributions in North America from Ted Mourouzis, Eric Weber, Bobby Keenom and Brian Bottelberghe, and in Asia Pacific from Neil Littlewood and Greg Baker. OUR ANNUAL STOCKHOLDER MEETING We look forward to seeing you at our 2019 annual stockholder meeting of General Finance Corporation on Thursday, December 5, 2019 at 10:00 a.m. at 39 East Union Street, Pasadena, California 91103, and we appreciate your interest in General Finance Corporation. Sincerely, Ronald F. Valenta Jody E. Miller Executive Chairman of the Board Chief Executive Officer and President NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS To be held on December 5, 2019 AND NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS Notice of Date, Time and Location of Meeting PROXY STATEMENT Notice is hereby given to the holders of common stock of General Finance Corporation (the “Company”) that the 2019 Annual Meeting of Stockholders (“Annual Meeting”) will be held on Thursday, December 5, 2019 at 10:00 a.m. Pacific Standard Time at the offices of the Company located at 39 East Union Street, Pasadena, California. At the Annual Meeting we will ask you to: Items of Business 1. Election of Directors. Elect two Class A directors, Manuel Marrero and Douglas Trussler, to serve for terms of three years each and until their respective successors are elected and qualified. The qualifications and experience of the two Class A directors are described in the accompanying Proxy Statement; 2. Ratification of Appointment of the Independent Registered Public Accounting Firm. Ratify the selection of Crowe LLP as our independent auditors for the fiscal year ending June 30, 2020; 3. Advisory Vote Regarding Executive Compensation. Vote on an advisory and non-binding basis resolution regarding executive compensation; 4. Frequency of Advisory Votes on Executive Compensation. Vote on an advisory and non-binding basis regarding the frequency of future advisory votes on executive compensation; and 5. Other Business. Transact any other business that may properly be presented at the Annual Meeting. Record Date If you owned Company common stock on October 8, 2019, the record date, you are entitled to notice of, to attend and to vote at the Annual Meeting and any adjournments or postponements thereof. In addition to submitting a proxy and voting in person, you may vote by mail, telephone or the Internet. A complete list of stockholders entitled to vote at the Annual Meeting will be available at the principal executive offices of General Finance Corporation located at 39 East Union Street, Pasadena, California beginning November 25, 2019 and at the Annual Meeting. Materials to Review The Proxy Statement, form of proxy card and Annual Report on Form 10-K for the fiscal year ended June 30, 2019 (the “2019 Annual Report”) that accompany this Notice (all of the foregoing collectively, the “Proxy Materials”) contain additional information regarding the proposals to be considered at the Annual Meeting, and stockholders are encouraged to read the Proxy Materials in their entirety. Under rules adopted by the U.S. Securities and Exchange Commission (“SEC”), we have elected to provide access to our Proxy Materials both by sending you the Proxy Materials by mail and by notifying you of the availability of our Proxy Materials at the website www.cstproxy.com/generalfinance/2019. Internet access to our Proxy Materials does not identify visitors to the website. Proxy Voting If you submit a proxy, you are entitled to revoke your proxy at any time before it is exercised by attending the Annual Meeting and voting in person, duly executing and delivering a proxy bearing a later date or sending written notice of revocation to our Secretary at 39 East Union Street, Pasadena, California 91103. Whether or not you plan to be present at the Annual Meeting, we encourage you to vote your proxy by following the instructions provided in the Proxy Materials. Any stockholder attending the Annual Meeting may vote in person even if the stockholder previously returned a proxy. Respectfully Submitted Christopher A. Wilson General Counsel, Vice President & Secretary October 18, 2019 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on December 5, 2019. Our Proxy Statement and our 2019 Annual Report to stockholders are available at http://www.cstproxy.com/generalfinance/2019. PROXY STATEMENT—TABLE OF CONTENTS PROXY STATEMENT SUMMARY INFORMATION ABOUT THE ANNUAL MEETING AND VOTING 1 CORPORATE GOVERNANCE 5 Overview 5 GOVERNANCE INFORMATION 6 Board of Directors 6 General Oversight 6 Leadership Structure 6 Risk Oversight 6 Corporate Governance 7 Director Independence 7 Executive Sessions of Independent Directors 8 Lead Independent Director 8 Board and Committee Meetings 8 Board Committees 8 Audit Committee 8 Compensation Committee 9 Nominating and Governance Committee 9 Composition of the Board and Review of Director Nominees 9 Compensation Committee Interlocks and Insider Participation 10 Review and Approval of Transactions with Related Persons 11 Communication with the Board of Directors 11 Code of Ethics 11 Compensation of Non-Employee Directors 11 Cash Compensation 11 Annual Award of Restricted Stock 12 Stock Ownership Guidelines 12 Director