Alta Equipment Group Inc. · NYSE:ALTG
Alta Equipment — Q1 2020 Earnings Presentation
26 slides from Alta Equipment's earnings presentation, May 14, 2020
Slide 1: Q1 2020 Earnings Presentation
Q1 2020 Earnings Presentation May 14, 2020
Slide 2: Agenda
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q1 2020 Earnings Presentation | 2
Slide 3: Legal Disclaimers
Legal Disclaimers Forward-Looking Information This presentation includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1996. Alta’s actual results may differ from their expectations, estimates and projections and co
Slide 4: Participants
Introduction Participants Ryan Greenawalt, CEO Tony Colucci, CFO Q1 2020 Earnings Presentation | 4
Slide 5: CEO Overview
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q1 2020 Earnings Presentation | 5
Slide 6: Q1 Highlights
CEO Overview Q1 Highlights Reported solid net revenue and adjusted EBITDA results ▪ Net revenue increased to $180 million over $102 million in last year’s first quarter and Adjusted EBITDA of $18.8 million in Q1 2020 reflecting slight pullback on an organic basis. Expanded geographic footprint and f
Slide 7: Swift Response to COVID-19 Pandemic
CEO Overview Swift Response to COVID-19 Pandemic Employee protocols put in place to assure safety and health ▪ Adjusted operations to permit virtually all the company’s sales and back office employees to work remotely and established new health and safety related protocols. Relentless focus on custo
Slide 8: Company Overview
CEO Overview Company Overview Best-in-Class Brand Portfolio Creates Cross-Selling Opportunities Comprehensive Service Offering Across Heavy Equipment and Industrial Products Select Equipment Offering: Industrial Select Equipment Offering: Construction New and Used Equipment Maintenance and Rentals P
Slide 9: Key Stakeholder Relationships
CEO Overview Key Stakeholder Relationships Collaborative OEM Relationships Skilled Work Force ▪ Alta is consistently acknowledged by OEMs as a top ▪ Skilled technicians are essential to providing dealership partner aftermarket parts and service that customers require - 2019 Leader in Market Share –
Slide 10: Expanding Footprint in Key Geographic Markets
CEO Overview Expanding Footprint in Key Geographic Markets Strategic Expansion Geographic Footprint ▪ 43 locations throughout Michigan, Indiana, Illinois, Current Locations/Territories Massachusetts, Maine, New Hampshire, Connecticut New York, Vermont, and Florida ▪ Dealership platform with parts an
Slide 11: Aftermarket Overview
CEO Overview Aftermarket Overview Product Support Solutions We have capabilities to support all makes and models of construction and industrial equipment. SERVICE PARTS • 43 full-service • Parts inventory of locations across 10 approx. $32 million states • Electronically • Approx. half of Alta’s man
Slide 12: CFO Overview
I. Introduction II. CEO Overview III.CFO Overview IV. Appendices Q1 2020 Earnings Presentation | 12
Slide 13: Q1 2020 Financial Summary
CFO Overview Q1 2020 Financial Summary Financial Summary Q1 2020 Summary ▪ Organic revenue growth in both sales and product support departments across all geographic APR’s ▪ Total Revenues increased by 76.4%, or $78.2 million, from $102.3 million to $180.5 million; $15.6 million of organic growth or
Slide 14: Q1 2020 Financial Performance
CFO Overview Q1 2020 Financial Performance Revenue / Gross Profit ($MM) Quarterly Year over Year $180.5 $47.1 ▪ Revenues increased 76.4%, or $78.2 million 76.4% 71.3% ▪ Organic growth of 15.3% or $15.6 million $27.5 $102.3 ▪ Growth across all departments 26.9% 26.1% ▪ Three acquisitions completed si
Slide 15: Q1 2020 Adjusted EBITDA / Cash Flow
CFO Overview Q1 2020 Adjusted EBITDA / Cash Flow Adj. PF EBITDA1 / PF Economic EBIT ($MM)2 Year over Year Adjusted EBITDA / Cash Flow $20.2 (6.9)% $18.8 ▪ Organic Q1 2020 Adjusted EBITDA down slightly due to lower rental utilization in Q1 and COVID-19 impacts on March results ▪ Pro Forma Adjusted EB
Slide 16: Proforma ALTG Financial Profile
CFO Overview Proforma ALTG Financial Profile LTM 2019 Q1 2019 Q1 2020 3/31/2020 ($MM) 2017 2018 2019 PF+Acq1 PF+Acq1 PF+Acq1 PF+Acq1 Alta Revenue $345.5 $413.0 $557.4 $557.4 $102.3 $180.5 $635.6 Acquisitions Revenue - - - 264.8 88.9 27.4 203.3 Total Revenue $345.5 $413.0 $557.4 $822.2 $191.2 $207.9
Slide 17: Capital Structure / Credit Profile
CFO Overview Capital Structure / Credit Profile Credit Facility Capital Structure ($MM) ▪ At March 31, 2020, $36.4MM of cash on hand 3/31/20 ▪ $133.4MM outstanding balance under $300MM ABL facility as of Cash $36.4 March 31, 2020, Debt:1 ▪ As of March 31, 2020 $114.0MM of ABL availability, net of Li
Slide 18: Debt Maturity Runoff
CFO Overview Debt Maturity Runoff Flexible Debt Structure Commentary ▪ Ample liquidity and long-dated maturities provide financial flexibility ▪ Facilities committed for 5 to 5.5 years ▪ Interest Rates: ABL L+175-225bps; Term L+800bps ▪ Light amortization (1.25% quarterly) of Term Note Debt Maturity
Slide 19: Geographic and Segment Diversification
CFO Overview Geographic and Segment Diversification Sales Mix by Geography Existing Alta Shareholders IE Michigan CE Michigan 20% 23% IE Illinois 6% CE Illinois 7% IE Northeast 22% CE Florida 22% Q1 2020 Earnings Presentation | 19
Slide 20: COVID-19 Update: Year-to-date Service Hours
CFO Overview COVID-19 Update: Year-to-date Service Hours Technician Labor Hours as % of Base Daily Median 120% Pre-COVID Post-COVID 110% 3/18: Big Three Automakers Initiate Temporary Factory Closures acrossExisting US Alta Shareholders 100% 3/24: MI, IN & MA initiates Shelter In Place ordinance 3/21
Slide 21: COVID-19 Update: Illustrative Monthly Impact
CFO Overview COVID-19 Update: Illustrative Monthly Impact (Based on PF LTM EBITDA) Mitigation based on Dealership Structure and Management’s Ability to React Revenue Category Illustrative COVID Shock Un-Mitigated Best Case Average Month1 Factor COVID Revenue Mitigation 100% Var. Costs Equipment Sale
Slide 22: Industry and Company Specific Factors in a Downturn
CFO Overview Industry and Company Specific Factors in a Downturn Equipment Dealers and Financial Profile Through Economic Cycles Industry Industry In a Downturn During 2008 – In a Recovery 2010+ 2009 Recession • Reduction in Revenue • Revenue and EBITDA • Revenue reduction of • Alta takes advantage
Slide 23: Appendices
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q1 2020 Earnings Presentation | 23
Slide 24: Adjusted EBITDA Reconciliation
Appendix A Adjusted EBITDA Reconciliation 3 Mos. Ended 3 Mos. Ended LTM ($MM) 2017 2018 2019 March 31, March 31, 3/31/20 2019 2020 GAAP Net Income $5.9 $1.5 ($35.4) ($2.6) ($17.0) ($49.8) Depreciation and Amortization 31.5 37.1 50.1 9.1 13.9 54.9 Interest Expense 6.2 15.1 20.5 4.5 5.9 21.9 Income Ta
Slide 25: Free Cash Flow Reconciliation
Appendix B Free Cash Flow Reconciliation 3 Mos. Ended 3 Mos. Ended LTM ($MM) 2017 2018 2019 March 31, March 31, 3/31/20 2019 2020 GAAP Net Income $5.9 $1.5 ($35.4) ($2.6) ($17.0) ($49.8) Depreciation and Amortization 31.5 37.1 50.1 9.1 13.9 54.9 Interest Expense 6.2 15.1 20.5 4.5 5.9 21.9 Income Tax
Slide 26: Free Cash Flow Reconciliation – Capital Expenditure Detail
Appendix B (cont.) Free Cash Flow Reconciliation – Capital Expenditure Detail 3 Mos. Ended 3 Mos. Ended LTM ($MM) 2017 2018 2019 March 31, March 31, 3/31/20 2019 2020 Replacement of Sold Rental Equipment, at Original Cost 1 $40.1 $57.3 $56.9 $11.1 $19.0 $64.8 Capitalized Costs to Maintain Fleet (1.5