Alta Equipment Group Inc. · NYSE:ALTG
Alta Equipment — Q3 2023 Earnings Presentation
33 slides from Alta Equipment's earnings presentation, Nov 8, 2023
Slide 1: Earnings Presentation Third Quarter 2023
EARNINGS PRESENTATION THIRD QUARTER 2023 November 8, 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 & INT RODUCT ION Agenda INTRODUCTION CEO Overview Executive Officers: Q3 2023 Highlights Business Conditions Ryan Greenawalt, CEO Growth Strategy and Execution & Tony Colucci, CFO Alta Equipment Group Overview CFO Overview Q3 2023 Financial Summary Q3 Fleet and Cash Flow Summary
Slide 4: CEO Overview
CEO OVERVIEW Ryan Greenawalt Earnings Presentation | Third Quarter 2023 | November 8, 2023 4
Slide 5: Q3 2023 Financial Highlights
CEO OVERVIEW Total Revenue Increased Q3 2023 15.1% to $466.2 million compared to Q3 2022 Financial Construction and Material Handling Revenue of $282.0 million and $168.6 million, respectively Highlights: New and Used Equipment Sales Grew 20.7% to $253.6 million Solid third quarter financial and ope
Slide 6: Business Conditions
CEO OVERVIEW Our Markets Remain Solid despite macroeconomic issues and geopolitical concerns, demand is still strong Business Expect Continued Growth from MH and CE Segments Equipment Supply Chains are Notably Improved Conditions: and driving higher new equipment sales, which will benefit our future
Slide 7: Growth Strategy and Execution
CEO OVERVIEW M&A Activity Since Public Offering demonstrates the success of our growth strategy, adding $537 million in total revenue value and $65 million in EBITDA at accretive valuation multiples Growth Accretive Deals Closed in Q4 2023 Strategy and Burris Equipment Company (three locations in Il
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 | Third Quarter 2023 | November 8, 2023 9
Slide 10: Q3 2023 Financial Summary
CFO OVERVIEW Q3 2023 Financial Summary Quarterly Comparisons - Revenue Quarterly Comparisons New and used Parts sales Earnings Metrics Construction Segment equipment sales 15% 54% Adjusted EBITDA of $51.0MM versus • Total revenue growth of $32.3MM, or 12.9%, from $44.0MM in Q3 2022, a 15.9% increase
Slide 11: Q3 2023 Financial Performance
CFO OVERVIEW Q3 2023 Financial Performance QUARTER-OVER-QUARTER Q3 2023 Quarter over Quarter Revenue / Gross Profit Consolidated ($MM) Organic revenue grew $37.9MM, or 9.5% Organic product support grew $9.5MM to $122.2MM or 8.4% $466.2 $126.1 Gross profit grew 13.0% to $126.1MM Construction Se
Slide 12: Q3 2023 Adjusted EBITDA / Economic EBIT
CFO OVERVIEW Q3 2023 Adjusted EBITDA / Economic EBIT Adj. EBITDA1 / Adj. PF EBITDA1 Adj. EBITDA1 / Economic EBIT1 ($MM) / TTM Pro Forma2 $185.5 Q3 2023 Q3 2023 Q3 2022 $158.1 $51.0 $51.0 Q3 2022 $47.5 $44.0 $120.0 $127.4 $83.0 $113.8 $78.6 $60.0 Conversion % 72.3% 65.5% 72.0% 68.7% 2020 2021 2022 PF
Slide 13: Alta Equipment Group Financial Profile
CFO OVERVIEW Alta Equipment Group Financial Profile 2022 YTD Q3 2022 YTD Q3 2023 TTM ($MM) 2021 2022 Pro Forma1 Pro Forma1 Pro Forma1 Sept 30, 2023 Alta Revenue $1,212.8 $1,571.8 $1,571.8 $1,143.2 $1,355.3 $1,783.9 Acquisitions Revenue - - 86.6 79.8 1.0 7.8 Total Revenue $1,212.8 $1,571.8 $1,658.4 $
Slide 14: Capital Structure / Credit Profile
CFO OVERVIEW Capital Structure / Credit Profile Balance Sheet Strength / Liquidity5 Capital Structure ($MM) Sept 30, 2023 $ Amount EV/2023F EBITDA $779MM Cash $1.4 700,000 600,000 Debt:1 $521MM 500,000 Lines of Credit (ABL)2 $305.3 400,000 1.7x Floor Plan – Used and Rental 83.9 Coverage $305MM 300,0
Slide 15: Debt Structure and Maturity Runoff
CFO OVERVIEW Debt Structure and Maturity Runoff Debt Maturity ABL SSSL $500MM Drawn $450MM Undrawn $400MM $350MM $305MM $315MM $300MM $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 $485MM facility committed for
Slide 16: 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 ~$7.6MM annual dividend program in July 2022, affording accretive, and actionable YTD organic revenue growth
Slide 17: Rental Fleet and Cash Flow Summary
CFO OV ERVIEW Rental Fleet and Cash Flow Summary Rental Cap-Ex Summary ($MM)1 Nine Mos Nine Mos +6% YOY Ended Sept Ended Sept Improvement 2020 2021 2022 30, 2022 30, 2023 in rental Gross Rental Capex $159.4 $207.6 $186.8 $140.9 $191.7 rates 6 OEC of Rental Fleet Sold (95.5) (160.5) (139.0) (108.9) (
Slide 18: Q3 2023 – Increasing FY 2023 Guidance
CFO OV ERVIEW Q3 2023 – Increasing FY 2023 Guidance FY 2023 OUTLOOK ($ IN MM) ADJUSTED EBITDA: FY 2023 From: GUIDANCE $180.0 - $188.0 To: $187.0 - $192.0 (Net of New Equipment Floorplan Interest) 2023 GUIDANCE COMMENTARY: HIGHLIGHTS/RATIONALE Solid fundamentals remain in core markets served End-
Slide 19: Transformative Growth and Execution since IPO
CFO OVERVIEW Transformative Growth and Execution since IPO THEN: IPO1 NOW (~3.5 years from IPO) Revenue Revenue3 $900MM $1,875MM Locations2 Locations3 43 85 Total Employees2 Total Employees3 ~1,700 ~3,000 Technicians2 Technicians3 ~850 ~1,330 Adj. EBITDA Adj. EBITDA4 $94M $190M FCFE Yield FCFE Yield
Slide 20: Capital Deployment and Returns since IPO
CFO OVERVIEW Capital Deployment and Returns since IPO Growth and ROIC since IPO IPO Acquisitions Organic Q3 ’23 Pro Forma IPO-Q3’23 Growth TTM Revenue $900MM $446MM $454MM $1.8B Adj. EBITDA $94MM $53MM $37MM2 $184MM EEBIT1 $65MM $38MM $24MM $127MM Invested Capital3 $440MM $250MM $182MM $872MM ROIC%
Slide 21: 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 2023 | November 8, 2023 21
Slide 22: Appendices: About the Company
APPENDICES APPENDICES About Aboutthe theCompany Company Earnings Presentation | Third Quarter 2023 | November 8, 2023 22
Slide 23: Expanding Footprint in Key Geographic Markets
THE COMPANY Expanding Footprint in Key Geographic Markets Strategic Expansion 81 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 24: Key Stakeholder Relationships
THE COMPANY Key Stakeholder Relationships Collaborative OEM Relationships Partnership with Skilled Workforce Consistently acknowledged as a top dealership partner by OEMs Recently established the Technical School Initiative Consistent market share outperformer by region and product Technical
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 80 full-service locations across 14 states and 2 provinces Approx. 1,300 of Alta’s ~2,900 employees are factory traine
Slide 26: Successful Acquisition Strategy Post IPO (2020-current)
THE COMPANY Successful Acquisition Strategy Post IPO (2020-current) SINCE GOING PUBLIC ALTA HAS ACQUIRED OVER $537MM OF REVENUE AND $65MM OF EBITDA Dealerships Complementary Service lines Revenue: $25MM Revenue: $17MM Revenue: $64MM Revenue: $28MM Revenue: $41MM Revenue: $6MM Revenue: $35MM Revenue:
Slide 27: ALTG's Growth Financing Model – 2022 Illustrative
THE COMPANY ALTG’s Growth Financing Model – 2022 Illustrative CAPITAL STRUCTURE SUPPORTS GROWTH STRATEGY ALTG’s ABL-based capital structure alongside operating cash flows provide a framework for continuation of acquisition and organic growth Operating cash flows applied against the ABL revolver
Slide 28: Performance in Inflationary Environment
THE COMPANY Performance in Inflationary Environment Department New Equipment Sales Used Equipment Sales Rental Equipment Sales Rent-to Rent Parts / Service Replacement Capex Impact on EBITDA Neutral Neutral Positive Positive Positive Negative Commentary Increases in input pricing Increases in trade
Slide 29: Unaudited Reconciliation of Non-GAAP Financial Measures
APPENDICES Unaudited Reconciliation of Non-GAAP Financial Measures Earnings Presentation | Third Quarter 2023 | November 8, 2023 29
Slide 30: Adjusted EBITDA – GAAP Reconciliation
APP ENDIX A Adjusted EBITDA – GAAP Reconciliation Nine Mos. Ended Nine Mos. Ended TTM ($MM) 2020 2021 2022 Q3 2022 Q3 2023 Sept 30, 2022 Sept 30, 2023 Sept 30, 2023 Net income/(loss) available to common shareholders $(24.0) $(23.4) $6.3 $4.4 $6.7 $7.8 $8.6 $7.1 Depreciation and amortization 75.0 95.
Slide 31: Free Cash Flow from Operations - GAAP Reconciliation
APP ENDIX B Free Cash Flow from Operations - GAAP Reconciliation Nine Mos Ended Nine Mos Ended ($MM) 2020 2021 2022 Sept 30, 2022 Sept 30, 2023 Net cash provided by (used in) operating activities per GAAP $(35.0) $30.7 $26.0 $18.3 $(19.4) Adjustments for non-recurring items 1 1.7 4.7 3.7 1.8 3.3 Tra
Slide 32: Economic EBIT – GAAP Reconciliation
APP ENDIX C Economic EBIT – GAAP Reconciliation Nine Mos Ended Nine Mos Ended ($MM) 2020 2021 2022 Sept 30, 2022 Sept 30, 2023 Net income/(loss) available to common shareholders per GAAP $(24.0) $(23.4) $6.3 $7.8 $8.6 Depreciation and amortization 75.0 95.8 112.0 81.1 96.1 Interest expense 23.8 24.0
Slide 33: Retained Cash Flow - GAAP Reconciliation
APP ENDIX D Retained Cash Flow - GAAP Reconciliation Nine Mos Ended Nine Mos Ended ($MM) 2020 2021 2022 Sept 30, 2022 Sept 30, 2023 Net income (loss) per GAAP $(24.0) $(20.8) $9.3 $10.0 $10.8 Adjustments to reconcile net income (loss) to Retained Cash Flow: Depreciation and amortization 75.0 95.8 11