Alta Equipment Group Inc. · NYSE:ALTG
Alta Equipment — Q1 2023 Earnings Presentation
35 slides from Alta Equipment's earnings presentation, May 10, 2023
Slide 1: Earnings Presentation First Quarter 2023
EARNINGS PRESENTATION FIRST QUARTER 2023 May 10, 2023
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: ▪ Q1 2023 Highlights ▪ Business Conditions Ryan Greenawalt, CEO ▪ Growth Strategy and Execution & Tony Colucci, CFO ▪ Alta Equipment Group Overview CFO Overview ▪ Q1 2023 Financial Summary ▪ Capital Structure and Debt Summary
Slide 4: CEO Overview
CEO OVERVIEW Ryan Greenawalt Earnings Presentation | First Quarter 2023 | May 10, 2023 4
Slide 5: Q1 2023 Highlights
CEO OVERVIEW Net Revenue Increased 26.8% to $420.7 million over the year ago quarter Q1 2023 Construction and Material Handling Revenue Of $233.1 million and $164.8 million, respectively; product support revenue increased in Q1 Highlights: 2023 over Q1 2022 by 26.6% with parts revenue growing to $68
Slide 6: Business Conditions
CEO OVERVIEW Customer Demand is Strong across all our end-user segments and regions Business Demand for Parts and Service continues to be strong, with organic parts and service revenue up significantly from Conditions: a year ago which is expected to continue with increasing new equipment sales and
Slide 7: Growth Strategy and Execution
CEO OVERVIEW M&A Activity Since Public Offering demonstrates the success of our growth strategy, adding $446 million in total revenue value and $53.3 million in EBITDA at accretive valuation multiples Growth Pipeline Remains Active for Accretive Deals that compliment our business and increase long-t
Slide 8: Alta Equipment Group Overview
CEO OVERVIEW Alta Equipment Group Overview Material Handling Construction E-mobility Distribution BRANDING MARKET RELATIONSHIPS OEM/SUPPLIER SELECT OFFERING PRODUCT SELECT ▪ Manufacturing ▪ Highway, Street, and Bridge ▪ General Freight Trucking, Local ▪ Biofuel / Compost / Food Waste / SELECT END MA
Slide 9: CFO Overview
CFO OVERVIEW Tony Colucci Earnings Presentation | First Quarter 2023 | May 10, 2023 9
Slide 10: Q1 2023 Financial Summary
CFO OVERVIEW Q1 2023 Financial Summary Quarterly Comparisons - Revenue Quarterly Comparisons New and used Parts sales Earnings Metrics Construction Segment equipment sales 16% • Total revenue growth of $27.0MM, or 13.1%, from 52% Adjusted EBITDA of $40.8MM versus $30.0MM in Q1 2022, a 36.0% increase
Slide 11: Q1 2023 Financial Performance
CFO OVERVIEW Q1 2023 Financial Performance QUARTER-OVER-QUARTER – GROSS PROFIT Q1 2023 Quarter over Quarter Revenue / Gross Profit ($MM) Consolidated • Organic revenue grew $53.6MM, or 16.2% $420.7 $121.3 • Total gross profit grew $29.9MM for a total of $121.3MM, a 32.7% increase $331.7 $91.4 • New
Slide 12: Q1 2023 Adjusted EBITDA / Economic EBIT
CFO OVERVIEW Q1 2023 Adjusted EBITDA / Economic EBIT Adj. EBITDA1 / Adj. PF EBITDA1 Adj. EBITDA1 / Economic EBIT ($MM) / TTM Pro Forma2 Q1 2023 Q1 2023 $178.6 $40.8 $40.9 $158.1 Q1 2022 Q1 2022 $35.1 $30.0 $120.0 $126.8 $83.0 $113.8 $78.6 Conversion % $60.0 72.3% 65.5% 72.0% 71.0% 2020 2021 2022 PF
Slide 13: Alta Equipment Group Financial Profile
CFO OVERVIEW Alta Equipment Group Financial Profile 2022 Q1 2022 Q1 2023 TTM ($MM) 2021 2022 Pro Forma1 Pro Forma1 Pro Forma1 Mar 31, 2023 Alta Revenue $1,212.8 $1,571.8 $1,571.8 $331.7 $420.7 $1,660.8 Acquisitions Revenue - - 86.6 29.2 1.0 58.4 Total Revenue $1,212.8 $1,571.8 $1,658.4 $360.9 $421.7
Slide 14: Product Support Yield Trends 2019-2022
CFO OVERVIEW Product Support Yield Trends 2019-2022 Parts and Service Sales ($MM) New/Used/Rental Eq. Sales Future Parts and Service 2019 2020 2021 2022 2022 Q1 2023 Q1 Sales Parts $119.4 $129.6 $178.5 $234.8 $192.4MM $248.6MM Service 116.3 128.5 165.5 206.6 Total $235.7 $258.1 $344.0 $441.4 +$56.2M
Slide 15: Financial Operating Leverage
CFO OVERVIEW Financial Operating Leverage 2022 Q1 2023 Q1 Change Revenue $331.7 $420.7 $89.0 COGS $240.3 $299.4 $59.1 Gross Profit $91.4 $121.3 Plus: Rental Depreciation 20.3 22.9 (Less): Gain on Sale of Rental Eq. (6.8) (8.1) Equals: Adjusted Gross Profit $104.9 $136.1 $31.2 SG&A Expenses $86.8 $10
Slide 16: Capital Structure / Credit Profile
CFO OVERVIEW Capital Structure / Credit Profile Balance Sheet Strength / Liquidity5 Capital Structure ($MM) March 31, 2023 $ Amount EV/2023F EBITDA $704MM Cash $1.7 700,000 600,000 Debt:1 500,000 $483MM Lines of Credit (ABL)2 $257.8 400,000 1.9x Floor Plan – Used and Rental 62.3 Coverage 300,000 $25
Slide 17: Debt Structure and Maturity Runoff
CFO OVERVIEW Debt Structure and Maturity Runoff Debt Maturity ABL SSSL $450MM Drawn $400MM Undrawn $350MM $315MM $300MM $258MM $250MM $200MM $150MM $100MM $50MM $0MM $0MM $0MM $0MM 2022 2023 2024 12/31/2025 4/15/2026 ABL SENIOR SECURED SECOND INTEREST RATE CAP ▪ $430MM facility committed for another
Slide 18: Capital Allocation Overview
CFO OVERVIEW Capital Allocation Overview STRATEGIC M&A ORGANIC GROWTH DIVIDEND Excess CAPITAL EXCESS Capital Deal pipeline remains active, Initiated share repurchase Devoted to expansion, as ~$7.6MM annual dividend program $12.5MM in July 2022, accretive, and actionable YTD organic revenue growth wa
Slide 19: Rental Fleet and Cash Flow Summary
CFO OVERVIEW Rental Fleet and Cash Flow Summary Rental Cap-Ex Summary ($MM)1 Three Mos Three Mos +11% YOY Ended Mar Ended Mar Improvement 2020 2021 2022 31, 2022 31, 2023 in rental Gross Rental Capex $159.4 $207.6 $186.8 $44.6 $57.3 rates 6 OEC of Rental Fleet Sold (95.5) (160.5) (139.0) (39.5) (31.
Slide 20: Q1 2023 – Increasing FY 2023 Guidance
CFO OVERVIEW Q1 2023 – Increasing FY 2023 Guidance FY 2023 OUTLOOK ($ IN MM) ADJUSTED EBITDA: FY 2023 GUIDANCE From: $177.0 - $185.0 To: $180.0 - $188.0 (Net of New Equipment Floorplan Interest) 2023 GUIDANCE COMMENTARY: HIGHLIGHTS/RATIONALE ▪ Outperforming YTD expectations ▪ Strong fundamentals rem
Slide 21: Successful Acquisition Strategy Post IPO (2020-current)
CFO OVERVIEW Successful Acquisition Strategy Post IPO (2020-current) SINCE GOING PUBLIC ALTA HAS ACQUIRED OVER $446MM OF REVENUE AND $53MM OF EBITDA Dealerships Complementary Service lines Revenue: $25MM Revenue: $17MM Revenue: $64MM Revenue: $28MM Revenue: $41MM Revenue: $6MM Revenue: $35MM EBITDA:
Slide 22: Performance in Supply Chain Constrained Market
CFO OVERVIEW Performance in Supply Chain Constrained Market Department New Equipment Sales Used Equipment Sales Rental Equipment Sales Rent-to Rent Parts / Service Supply Chain Constrained Yes Neutral No No No Impact on Low Medium Medium High High EBITDA Commentary Supply chain constraints cause Sup
Slide 23: Performance in Inflationary Environment
CFO OVERVIEW Performance in Inflationary Environment Department New Equipment Sales Used Equipment Sales Rental Equipment Sales Rent-to Rent Parts / Service Replacement Capex Impact on EBITDA Neutral Neutral Positive Positive Positive Negative Commentary Increases in input pricing Increases in trade
Slide 24: Thank You
THANK YOU (NYSE:ALTG) Investor Relations Contact: Kevin Inda SCR Partners M: (225) 772-0254 E: Kevin@scr-ir.com Earnings Presentation | First Quarter 2023 | May 10, 2023 24
Slide 25: Appendices – About the Company
APPENDICES APPENDICES About Aboutthe theCompany Company Earnings Presentation | First Quarter 2023 | May 10, 2023 25
Slide 26: Expanding Footprint in Key Geographic Markets
THE COMPANY Expanding Footprint in Key Geographic Markets Strategic Expansion 71 locations throughout Michigan, Significant investment made in Indiana, Ohio, Illinois, scalable infrastructure Massachusetts, Maine, New Hampshire, Connecticut, New York, Complementary offerings in Vermont, Florida, Vir
Slide 27: Key Stakeholder Relationships
THE COMPANY Key Stakeholder Relationships Collaborative OEM Relationships ▪ Consistently acknowledged as a top dealership partner by OEMs ▪ Consistent market share outperformer by region and product Enhanced Customer Relationships ▪ Preferred consolidator of key OEMs ▪ Provides equipment solutions t
Slide 28: 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 70 full-service locations across 14 states and 2 provinces ▪ Approx. 1,150 of Alta’s ~2,800 employees are factory traine
Slide 29: ALTG’s Growth Financing Model – 2022 Illustrative
THE COMPANY ALTG’s Growth Financing Model – 2022 Illustrative CAPITAL STRUCTURE SUPPORTS GROWTH STRATEGY ▪ ALTG’s ABL-based capital structure alongside operating cash flows provide a framework for continuation of acquisition and organic growth ▪ Operating cash flows applied against the ABL revolver
Slide 30: Unaudited Reconciliation of Non-GAAP Financial Measures
APPENDICES Unaudited Reconciliation of Non-GAAP Financial Measures Earnings Presentation | First Quarter 2023 | May 10, 2023 30
Slide 31: Adjusted EBITDA – GAAP Reconciliation
APPENDIX A Adjusted EBITDA – GAAP Reconciliation Three Mos Ended Three Mos Ended TTM ($MM) 2020 2021 2022 Mar 31, 2022 Mar 31, 2023 Mar 31, 2023 Net income/(loss) available to common shareholders $(24.0) $(23.4) $6.3 $(2.0) $0.2 $8.5 Depreciation and amortization 75.0 95.8 112.0 24.2 28.1 115.9 Inte
Slide 32: Free Cash Flow from Operations - GAAP Reconciliation
APPENDIX B Free Cash Flow from Operations - GAAP Reconciliation Three Mos Ended Three Mos Ended ($MM) 2020 2021 2022 Mar 31, 2022 Mar 31, 2023 Net cash provided by (used in) operating activities per GAAP $(35.0) $30.7 $26.0 $(6.7) $(20.1) Adjustments for non-recurring items 1 1.7 4.7 3.7 0.9 0.3 Tra
Slide 33: Economic EBIT – GAAP Reconciliation
APPENDIX C Economic EBIT – GAAP Reconciliation Three Mos Ended Three Mos Ended ($MM) 2020 2021 2022 Mar 31, 2022 Mar 31, 2023 Net income/(loss) available to common shareholders per GAAP $(24.0) $(23.4) $6.3 $(2.0) $0.2 Depreciation and amortization 75.0 95.8 112.0 24.2 28.1 Interest expense 23.8 24.
Slide 34: Unlevered FCF before/after Growth Investments Reconciliation
APPENDIX D Unlevered FCF before/after Growth Investments Reconciliation Three Mos Ended Three Mos Ended ($MM) 2020 2021 2022 Mar 31, 2022 Mar 31, 2023 Economic EBIT [1] $60.0 $78.6 $113.8 $22.8 $28.0 Tax (expense)/benefit 6.6 (3.6) (1.3) - (0.1) Unlevered FCF before growth related investments [1] $6
Slide 35: Retained Cash Flow - GAAP Reconciliation
APPENDIX E Retained Cash Flow - GAAP Reconciliation Three Mos Ended Three Mos Ended ($MM) 2020 2021 2022 Mar 31, 2022 Mar 31, 2023 Net income (loss) per GAAP $(24.0) $(20.8) $9.3 $(1.2) $1.0 Adjustments to reconcile net income (loss) to Retained Cash Flow: Depreciation and amortization 75.0 95.8 112