Custom Truck One Source, Inc. · NYSE:CTOS
Custom Truck One Source — Q2 2021 Earnings Presentation
19 slides from Custom Truck One Source's earnings presentation, Aug 12, 2021
Slide 1: Custom Truck One Source 2nd Quarter 2021 Investor Presentation
Custom Truck One Source 2nd Quarter 2021 Investor Presentation August 12, 2021 CONFIDENTIAL DRAFT1
Slide 2: Safe Harbor
Safe Harbor This presentation includes certain financial measures that have not been prepared in a manner that complies with generally accepted accounting principles in the United States (“GAAP”), including, without limitation, EBITDA, Adjusted EBITDA, and Pro Forma Adjusted EBITDA (collectively, th
Slide 3: CTOS's unique business model positions the company for strong value creation
CTOS’s unique business model positions the company for strong value creation Attractive end markets with long-term secular Attractive end markets with long-term secular Stable markets with GDP++ growth potential growth drivers growth and drivers pricing power growth drivers and pricing power Infrast
Slide 4: Favorable End-Market Dynamics: Multi-Year Tailwinds
Favorable End-Market Dynamics Strong, Multi-Year End Market Tailwinds With Upside From New Infrastructure Bill T&D T&D Capex TELECOM Telecom Capex Rapidly increasing major projects driven by need for ~$70B 6.8% Build-out and implementation of 5G ~$80B 3.0% grid upgrades and renewable Annual Total Sp
Slide 5: Favorable End-Market Dynamics: Large Addressable Market
Favorable End-Market Dynamics Large Addressable Market with Strong Secular Growth ~$30B Total Addressable Market1 Rental Penetration2 Key Drivers of Rental 65% • Improved asset utilization with significantly 57% reduced storage and maintenance costs Parts & Service ~$9B 42% • Better risk management
Slide 6: Differentiated "One-Stop-Shop" Business Model
Differentiated “One-Stop-Shop” Business Model Integrated Production Capabilities and Rental+Sales Model Provided Unique Value Proposition Integrated Production Capabilities One-Stop-Shop Value Proposition Unit Economic Advantages Multiple Revenue Streams Strong, Consistent Returns Customer Benefits
Slide 7: National Branch Network
National Branch Network National footprint provides flexibility in managing the rental fleet and superior customer service for rental and sales customers • 35 locations and 350 of technicians around the country • 85 mobile technicians capable of being deployed across the country • Opportunity remain
Slide 8: CTOS / Nesco Integration & Synergy Update
CTOS / Nesco Integration & Synergy Update Integration activities are ahead of plan and the synergy opportunity is greater than anticipated Run-Rate Annual Cost Synergies Year 1 Run-Rate Synergies $55MM $50MM $40MM $25MM Original Current Original Current • Service and Production Operations, Procureme
Slide 9: CTOS Reporting Segments
CTOS Reporting Segments Reporting segments align with our go-to market strategies and capital allocation decisions Equipment Rental Solutions Truck & Equipment Sales Aftermarket Parts & Service (ERS) (TES) (APS) Includes results from core rental Includes results from new and Includes results f
Slide 10: Equipment Rental Solutions (ERS)
Equipment Rental Solutions (ERS) Revenue up 5% vs Q2 2020, driven by improved utilization Revenue Gross Profit (ex. Depreciation)1 • ERS revenue grew $6M or 5% $300 $284 vs last year Rental $277 $180 $163 $163 Rental Asset Sales $250 $160 $20 • The adoption of ASC 842 $27 $82 $92 $140 requires us to
Slide 11: Truck & Equipment Sales (TES)
Truck & Equipment Sales (TES) Equipment sales were up 56% vs Q2 2020 and margins improved by 50bps Revenue Gross Profit1 $450 $50 $400 40% Growth $45 38% Growth $350 $40 $300 $35 $30 $250 56% Growth $420 $25 63% Growth $47 $200 $20 $150 $299 $34 $15 $100 $215 $26 $10 $138 $16 $50 $5 $- $- Q2 20 Q2 2
Slide 12: Aftermarket Parts & Service (APS)
Aftermarket Parts & Service (APS) Aftermarket revenues and gross profit were down to Q1 2021; Developing new go-to market strategy Revenue Gross Profit1 $80 $16 $70 $14 $60 $12 $50 $10 $40 $8 $72 $14 $66 $13 $30 $6 $20 $4 $35 $32 $7 $5 $10 $2 $- $- Q2 20 Q2 21 YTD20 YTD21 Q2 20 Q2 21 YTD20 YTD21 YTD
Slide 13: Operating Performance
Operating Performance Revenue and Adjusted EBITDA grew 27% and 23%, respectively Revenue Adjusted Gross Profit1 $900 ERS $250 $770 $223 TES $211 $800 $13 APS $648 $66 $200 $14 $700 $34 $47 $600 $72 $150 $500 $420 $109 $375 $98 $400 $299 $5 $295 $32 $100 $7 $300 $26 $35 $16 $163 $163 $215 $200 $138 $
Slide 14: Pro Forma Adj EBITDA Reconciliation
Pro Forma Adj EBITDA Reconciliation Significant one-time costs associated with the CTOS/Nesco merger The following table reconciles our reported net loss to Adjusted EBITDA for the three months ended June 30, 2021, and pro forma net loss to pro forma Adjusted EBITDA for the three and six months ende
Slide 15: Balance Sheet & Capital Structure
Balance Sheet & Capital Structure Continue to strengthen the balance sheet and demonstrated ability to de-lever quickly through cash flow generation and EBITDA growth Availability liquidity improved $68M Improved Leverage by 0.3x 5.0x $450 $400 $382 4.5x 4.6x Including $55M Synergy Target $350 $314
Slide 16: Summary
Summary 11 Favorable End-Market Dynamics with Secular Growth Drivers 22 Differentiated “One-Stop-Shop” Business Model 34 CTOS Well-Positioned for Growth & Margin Expansion 45 Monetizing Synergy Opportunity with CTOS/Nesco Merger CTOS is Well 56 Demonstrated Performance and Financial Profile Support
Slide 17: Appendix
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Slide 18: Net Capex Reconciliation
Net Capex Reconciliation Reconciliation of Total Capital Expenditures to Net Capital Expenditures As Reported Custom Truck LP Combined 6 Mos Ended 3 Mos Ended 6 Mos Ended ($ in millions) June 30, 2021 March 31, 2021 June 30, 2021 Purchases of rental equipment $ 66 $ 49 $ 115 Purchases of other prope
Slide 19: Adj. Net Working Capital
Adj. Net Working Capital Calculation of Adj. Net Working Capital Combined ($ in millions) June 30, 2021 March 31, 2021 Adjusted Net Working Capital is a non-GAAP financial measure defined by the Company as total current assets excluding cash Current Assets (1) and cash equivalents, trade and financi
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