Alta Equipment Group Inc. · NYSE:ALTG
Alta Equipment — Q3 2024 Earnings Presentation
36 slides from Alta Equipment's earnings presentation, Nov 12, 2024
Slide 1: Earnings Presentation Third Quarter 2024
EARNINGS PRESENTATION THIRD QUARTER 2024 November 12, 2024
Slide 2: 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 1995. Alta’s actual results may differ from their expectations, estimates and projections and co
Slide 3: Agenda & Introduction
AGENDA & INTRODUCTION Agenda INTRODUCTION CEO Overview Executive Officers: Q3 2024 Results Business Conditions Ryan Greenawalt, CEO YTD Activity Trends & Tony Colucci, CFO eMobility Growth Strategy and Execution CFO Overview Q3 2024 Financial Summary Capital Structure and Debt Summary
Slide 4: CEO Overview
CEO OVERVIEW Ryan Greenawalt Earnings Presentation | Third Quarter 2024 | November 12, 2024 4
Slide 5: Q3 2024 Results
CEO OVERVIEW Revenue Decreased -3.7% over the year ago quarter, to $448.8 million, and decreasing $39.3 million sequentially from Q2 2024 Q3 2024 Construction and Material Handling Revenue Ended the Quarter At $262.3 million and $168.9 million, respectively Results: Product Support Revenue Increased
Slide 6: Business Conditions
CEO OVERVIEW Industry Fundamentals Remain Supportive of Extended Cycle 1Non-Residential Construction Starts forecast to increase from $442 billion in ‘24 to $522 billion in ’27 Business 2Dodge Momentum Index, a leading indicator of construction spending, has exhibited gains for five of the last
Slide 7: YTD Activity-Based KPI Trends
CEO OVERVIEW 2024: January – September [1] 2000 1500 YTD 1000 500 Service Call Orders Per Day: Activity- 0 Consistent service department call volumes year over year Based KPI 2000 2023: January - September [1] 2024 Q3 YTD Average Calls/Count: 1,197 2023 Q3 YTD Average Calls/Count: 1,192 Trends: 15
Slide 8: eMobility Gaining Traction
CEO OVERVIEW CEO OVERVIEW eMobility Gaining Traction Entered partnership with Harbinger to support the launch of its electric medium-duty truck lineup (Class 4-6) Territory Assignments: Michigan, Illinois, Florida, New England, Southern California eMobility: eMobility Developing a sizeable sal
Slide 9: Growth Strategy and Execution
CEO OVERVIEW Strategic Expansion Proven acquisition and integration track record; closing 16 acquisitions adding $537 million in total revenue and $65 million in EBITDA at accretive multiples (since IPO in 2020) Growth Increased locations from 43 to 86 throughout Michigan, Indiana, Ohio, Illinoi
Slide 10: CFO Overview
CFO OVERVIEW Tony Colucci Earnings Presentation | Third Quarter 2024 | November 12, 2024 10
Slide 11: Q3 2024 Financial Summary
CFO OVERVIEW Q3 2024 Financial Summary Quarterly Comparisons - Revenue Quarterly Comparisons Parts sales New and used 17% Revenue Metrics Construction Segment equipment sales Total revenue decline of $17.4MM, or -3.7% • Total revenue decline of $19.7MM, or -7.0%, from 49% from $466.2MM in Q3 2023 to
Slide 12: Q3 2024 Financial Performance
CFO OVERVIEW Q3 2024 Financial Performance QUARTER-OVER-QUARTER – REVENUE & GROSS PROFIT Q3 2024 Quarter Over Quarter Revenue / Gross Profit Consolidated ($MM) Organic revenue decreased $39.1MM, or (8.4)% $126.1 Gross profit decreased $1.5MM for a total of $124.6MM, a (1.2)% decrease $124.6 $466
Slide 13: Q3 2024 Adjusted EBITDA / Economic EBIT
CFO OVERVIEW Q3 2024 Adjusted EBITDA / Economic EBIT Adj. EBITDA1 / Adj. PF EBITDA1 Adj. EBITDA1 / Economic EBIT1 ($MM) / TTM Pro Forma2 Q3 2023 Q3 2023 $54.0 $191.4 $51.0 $178.0 Q3 2024 Q3 2024 $158.1 $43.2 $43.2 $120.0 $122.3 $113.8 $91.4 $78.6 Conversion % 65.5% 72.0% 63.9% 51.3% 2021 2022 2023 P
Slide 14: Alta Equipment Group Financial Profile
CFO OVERVIEW Alta Equipment Group Financial Profile 2023 YTD Q3 2023 YTD Q3 2024 TTM ($MM) 2022 2023 Pro Forma1 Pro Forma1 Pro Forma1 Sept. 30, 2024 Alta Revenue $1,571.8 $1,876.8 $1,876.8 $1,355.3 $1,378.5 $1,900.0 Acquisitions Revenue - - 74.1 69.1 - 5.0 Total Revenue $1,571.8 $1,876.8 $1,950.9 $1
Slide 15: Rental Fleet and Cash Flow Summary
CFO OVERVIEW Rental Fleet and Cash Flow Summary Rental Cap-Ex Summary ($MM)1 Nine Mos Nine Mos Ended Sept. Ended Sept Fleet Mix: 2021 2022 2023 30, 2023 30, 2024 47% Earthmoving; Gross Rental Capex $207.6 $186.8 $242.4 $191.7 $151.2 34% Mtl Handling; 12% Aerial; OEC of Rental Fleet Sold (160.5) (139
Slide 16: Capital Structure / Credit Profile
CFO OVERVIEW Capital Structure / Credit Profile Balance Sheet Strength / Liquidity5 Capital Structure ($MM) EV/TTM 2024 September 30, 2024 $ Amount PF EBITDA 900,000 Cash $14.6 800,000 $756MM Debt:1 700,000 600,000 Lines of Credit (ABL)2 $200.6 $547MM 500,000 Floor Plan – Used and Rental 86.7 400,00
Slide 17: Debt Structure and Maturity Runoff
CFO OVERVIEW Debt Structure and Maturity Runoff Debt Maturity ABL SSSL $600MM Drawn Undrawn $500MM $500MM On June 5, 2024 the Company amended its ABL facility to increase borrowing capacity and extend the maturity from 12/31/2025 to March of 2029. Simultaneously $400MM with the amendment, the Compan
Slide 18: Capital Allocation Overview
CFO OVERVIEW Capital Allocation Overview STRATEGIC M&A ORGANIC GROWTH DIVIDEND Excess CAPITAL EXCESS Capital Strategic opportunities with in- $20.0MM share repurchase Devoted to expansion, as ~$7.7MM annual program in place, affording the network dealerships and in ‘23 organic revenue growth was com
Slide 19: Q3 2024 Optimization Metrics
CFO OVERVIEW Q3 2024 Optimization Metrics REDUCED FLEET MAINTAINED LEVERAGE DECREASED SG&A ($millions) Q2 2024 Q3 2024 ($millions) Rental Discretionary Growth Capex Rental Fleet OEC $617.2 $599.0 YTD Q3 2023 $75.9 Leverage (total debt minus cash) $858.11 $819.4 YTD Q3 2024 $1.0 G&A Expenses $114.4 $
Slide 20: Adjusting FY 2024 Guidance
CFO OVERVIEW Adjusting FY 2024 Guidance FY 2024 OUTLOOK ($ IN MM) ADJUSTED EBITDA: FY 2024 From: GUIDANCE $190.0 - $200.0 To: $170.0 - $175.0 (Net of New Equipment Floorplan Interest) UPDATED FY2024 GUIDANCE COMMENTARY: Reflective of underperformance in Q3 2024, primarily in equipment sales and re
Slide 21: Target Pro Forma Financial Profile
CFO OVERVIEW Target Pro Forma Financial Profile Target Financial Measure Key Assumptions ~$2B Total Revenue • Normalized supply/demand ~$200MM Adj. EBITDA dynamics in equipment marketplace ~($25MM) Gain on sale of rental equipment • Margin stabilization on ~$100MM Proceeds from sale of rental equipm
Slide 22: Thank You
THANK YOU (NYSE:ALTG) Investor Relations Contact: Kevin Inda SCR Partners M: (225) 772-0254 E: Kevin@scr-ir.com Earnings Presentation | Third Quarter 2024 | November 12, 2024 22
Slide 23: Supplemental Information: About the Company
SUPPLEMENTAL APPENDICES INFORMATION About the Company Earnings Presentation | Third Quarter 2024 | November 12, 2024 23
Slide 24: Alta Equipment Group Overview
THE COMPANY Alta Equipment Group Overview Material Handling Construction E-mobility Distribution BRANDING MARKET RELATIONSHIPS OEM/SUPPLIER SELECT OFFERING PRODUCT SELECT Food and Beverage Highway, Street, and Bridge General Freight Trucking, Local Biofuel / Compost / Food Waste / SELECT END
Slide 25: Product Support Overview
THE COMPANY Product Support Overview Product We have capabilities to support all makes Support and models of Construction and Material Solutions Handling equipment. SERVICE Over 85 full-service locations across 15 states and 2 provinces Approx. 1,300 of Alta’s ~2,900 employees are factory traine
Slide 26: Product Support Yield Trends
THE COMPANY Product Support Yield Trends Parts and Service Sales ($MM) New/Used/Rental Eq. Sales Future Parts and Service 2020 2021 2022 2023 2022 2023 Sales Parts $129.6 $178.5 $234.8 $278.3 $950.3MM $1,154.8MM Service 128.5 165.5 206.6 241.3 Total $258.1 $344.0 $441.4 $519.6 +$204.5MM = Equipment
Slide 27: Alta Equipment Group vs Pure-Play Rental Businesses
THE COMPANY Alta Equipment Group Vs Pure-Play Rental Businesses New and used EQUIPMENT DEALERSHIP BUSINESS MODEL equipment sales Protected exclusive areas of primary responsibility (APRs) 54% Exclusive rights to OEM equipment and parts Proprietary diagnostic software to service field populatio
Slide 28: Material Handling Revenue by End Market
THE COMPANY Alta Equipment Group – Material Handling Revenue by End Market Finance, Insurance, and Aggregate and Mining Real Estate 0% 1% Manufacturing End-Market Detail Agriculture, Forestry, and Landscaping Retail Trade 1% 9% Other Public Administration 17% Transportation 5% Equipment 20% Transpor
Slide 29: Construction Equipment Revenue by End Market
THE COMPANY Alta Equipment Group – Construction Equipment Revenue by End Market Finance, Insurance, and Real Estate 2% Construction End-Market Detail Retail Trade Aggregate and 2% Mining Manufacturing 7% 11% Building Construction General Agriculture, Forestry, and Contractors And Operative Builders
Slide 30: Transformative Growth and Execution since IPO
THE COMPANY Transformative Growth and Execution since IPO THEN: IPO1 NOW (~4.75 years from IPO) Revenue Revenue3 $900MM $1,900MM Locations2 Locations3 43 86 Total Employees2 Total Employees3 ~1,700 ~2,900 Technicians2 Technicians3 ~850 ~1,300 Adj. EBITDA Adj. PF EBITDA4 $94M $178M FCFE Yield FCFE Yi
Slide 31: Appendices
APPENDICES Unaudited Reconciliation of Non-GAAP Financial Measures Earnings Presentation | Third Quarter 2024 | November 12, 2024 31
Slide 32: Adjusted EBITDA – GAAP Reconciliation
APPENDIX A Adjusted EBITDA – GAAP Reconciliation Nine Mos Nine Mos Ended Sept. Ended Sept. TTM ($MM) 2021 2022 2023 Q3 2023 Q3 2024 30, 2023 30, 2024 Sept. 30, 2024 Net income/(loss) available to common shareholders $(23.4) $6.3 $5.9 $6.7 $(28.4) $8.6 $(53.7) $(56.4) Depreciation and amortization 95
Slide 33: Free Cash Flow from Operations – GAAP Reconciliation
APPENDIX B Free Cash Flow from Operations - GAAP Reconciliation Nine Mos Ended Nine Mos Ended ($MM) 2021 2022 2023 Sept. 30, 2023 Sept. 30, 2024 Net cash provided by (used in) operating activities per GAAP $30.7 $26.0 $63.8 $(23.1) $22.1 Adjustments for non-recurring items 1 4.7 3.7 4.9 3.3 4.5 Tran
Slide 34: Economic EBIT – GAAP Reconciliation
APPENDIX C Economic EBIT – GAAP Reconciliation Nine Mos Ended Nine Mos Ended ($MM) 2021 2022 2023 Sept. 30, 2023 Sept. 30, 2024 Net income/(loss) available to common shareholders per GAAP $(23.4) $6.3 $5.9 $8.6 $(53.7) Depreciation and amortization 95.8 112.0 132.6 96.1 109.8 Interest expense 24.0 3
Slide 35: Retained Cash Flow – GAAP Reconciliation
APPENDIX D Retained Cash Flow - GAAP Reconciliation Nine Mos Ended Nine Mos Ended ($MM) 2021 2022 2023 Sept. 30, 2023 Sept. 30, 2024 Net income (loss) per GAAP $(20.8) $9.3 $8.9 $10.8 $(51.5) Adjustments to reconcile net income (loss) to Retained Cash Flow: Depreciation and amortization 95.8 112.0 1
Slide 36: Unlevered FCF before/after Growth Investments Reconciliation
APPENDIX E Unlevered FCF before/after Growth Investments Reconciliation Nine Mos Nine Mos Ended Sept. Ended Sept. ($MM) 2021 2022 2023 30, 2023 30, 2024 Economic EBIT [1] $78.6 $113.8 $122.3 $95.4 $64.0 Tax (Expense)/Benefit (3.6) (1.3) (6.4) (6.9) 4.7 Unlevered FCF Before Growth Related Investments