Custom Truck One Source, Inc. · NYSE:CTOS
Custom Truck One Source — FY2021 Earnings Presentation
26 slides from Custom Truck One Source's earnings presentation, Mar 10, 2022
Slide 1: Custom Truck One Source 4th Quarter & Full-Year 2021 Investor Presentation
Custom Truck One Source 4th Quarter & Full-Year 2021 Investor Presentation March 10, 2022 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: Strong Q4 and Full-Year 2021 Financial Results
Strong Q4 and Full-Year 2021 Financial Results • Delivered record quarterly Gross Profit and Adj. EBITDA despite continued supply chain constraints • Strong pro forma revenue growth vs. 2020 • Results reflect continued robust end-market fundamentals driving increased demand in all three business seg
Slide 4: Unique Business Model = Strong Value Creation
Unique Business Model = Strong Value Creation Attractive end markets with long-term Recently passed Infrastructure Bill will further secular growth drivers supercharge end-market tailwinds Differentiated one-stop shop business model with Best-in-class asset level returns: Rental Asset ROICs of stron
Slide 5: Favorable End-Market Dynamics
Favorable End-Market Dynamics Strong, Multi-Year End Market Tailwinds With Upside From 2021 Infrastructure Bill T&D T&D Capex TELECOM Telecom Capex Rapidly increasing major ~$70B 6.8% Build-out and ~$80B 3.0% projects driven by need for grid implementation of 5G upgrades and renewable Annual Total S
Slide 6: Large Addressable Market with Strong Secular Growth
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 with dedicated New Sales Marke
Slide 7: Diverse, Highly Loyal Customer Base
Diverse, Highly Loyal Customer Base Highlights Diverse Customer Base • Serve more than 3,000 customers, with T&D Infrastructure / Telecom Rail the top 15 customers representing ~19% of revenue • No customer represents more than 3% of company revenue • Strong brand recognition and awareness among ind
Slide 8: Differentiated “One-Stop-Shop” Business Model
Differentiated “One-Stop-Shop” Business Model Integrated Production Capabilities and Rental + Sales Model Provides Unique Value Proposition Integrated Production Capabilities One-Stop-Shop Value Proposition Unit Economic Advantages Multiple Revenue Streams Strong, Consistent Returns Customer Benefit
Slide 9: National Branch Network
National Branch Network National footprint provides flexibility in managing the rental fleet and superior customer service for rental and sales customers • 37 locations and 350 technicians in the U.S. and Canada • 80 mobile technicians capable of being deployed across the country • Opportunity remai
Slide 10: Our ESG Strategy
Our ESG Strategy • With the integration largely complete, we have begun developing our Environmental, Social and Governance (ESG) strategy • Our Board is dedicated to, and actively involved in, the process • Our ESG plan will: • Build upon the core values shared across our organization • Highlight t
Slide 11: Consolidated Pro Forma Operating Performance
Consolidated Pro Forma Operating Performance(1)(2) Revenue and Adjusted EBITDA grew 9% and 13%, respectively, for the full year Pro Forma Revenue Pro Forma Adjusted Gross Profit $1,600 Rental $1,484 $500 $462 Equipment Sales $1,356 $450 $424 $1,400 Parts & Service $400 $1,200 $350 $1,000 $300 $941 $
Slide 12: 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 13: Equipment Rental Solutions (ERS)
Equipment Rental Solutions (ERS) Revenue up 9.6% vs. Q3 2021, driven by improved utilization Revenue & Adjusted Gross Profit $160 $145 $132 Rental Sales $140 • ERS performance continues to perform at a high level, with utilization Rental $120 improving to ~84% and OEC on rent at record levels $100 $
Slide 14: Truck & Equipment Sales (TES)
Truck & Equipment Sales (TES) New sales order backlog grew by 22% in Q4 2021 Revenue Adjusted Gross Profit1 • Revenue declined $13M in Q4 ‘21 due mainly to continued supply $200 $30 chain constraints $180 $190 $177 $25 • New sales backlog grew by $73M, or 22%, in Q4 ‘21 and is up 169% $160 $26 $140
Slide 15: Aftermarket Parts & Service (APS)
Aftermarket Parts & Service (APS) APS margins improved ~740 bps to 35% in Q4 2021, driven by continued focus on cost improvements Revenue Adjusted Gross Profit1 • Q4 ‘21 results reflect continued focus on improving cost structure and $40 $14 $35 operational execution of the aftermarket rental busine
Slide 16: Balance Sheet & Capex
Balance Sheet & Capex Continue to strengthen the balance sheet and demonstrated ability to de-lever quickly through cash flow generation and Adjusted EBITDA growth Improved leverage by 0.6x since the merger Available liquidity up $69MM since the merger 5.0x $450 $382 $383 4.5x $400 $358 $350 $314 4.
Slide 17: 2022 Outlook
2022 Outlook FY21 Pro Forma FY22 Outlook Growth Consolidated Revenue $1.48 billion $1.57 - $1.75 billion 6% - 18% ERS $610 - $650 million TES $825 - $950 million APS $130 - $150 million Adjusted EBITDA $333 million $385 - $410 million 16% - 23% Highlights • Reflects continued strength in our end mar
Slide 18: Summary
Summary 11 Favorable End-Market Dynamics with Secular Growth Drivers 22 Differentiated “One-Stop-Shop” Business Model 34 CTOS Well-Positioned for Continued Growth & Margin Expansion 45 Integration is Largely Complete and Driving Cost Efficiencies CTOS is Well Positioned 56 Demonstrated Performance a
Slide 19: Appendix
zim LLLLL LL Appendix (Oe aes
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Actual Pro Forma Three Three Months Ended Twelve Months Ended Three Months Ended Twelve Months Ended Months December 31, December 31, December 31, December 31, Ended September (in $ millions) 30, 2021 2020 2021 2020 2021 2020 2021 2020 2021 Net income (loss) $ (21) $ (
Slide 21: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation Actual Pro Forma Three Three Months Ended Twelve Months Ended Three Months Ended Twelve Months Ended Months December 31, December 31, December 31, December 31, Ended September (in $ millions) 30, 2021 2020 2021 2020 2021 2020 2021 2020 2021 Revenue Rental revenue
Slide 22: Supplementary Segment Data — ERS
Supplementary Segment Data — ERS Three Three Months Months Ended Ended September December 30, 2021 31, 2021 (in $ millions) CTOS Inc. CTOS Inc. Rental revenue $ 105 $ 110 Equipment sales 27 35 Total revenue 132 145 Cost of revenue: Cost of rental revenue 25 27 Cost of equipment sales 20 30 Depreciat
Slide 23: Supplementary Segment Data — TES
Supplementary Segment Data — TES Three Three Months Months Ended Ended September December 30, 2021 31, 2021 (in $ millions) CTOS Inc. CTOS Inc. Equipment sales $ 190 $ 177 Cost of equipment sales 172 154 Gross profit $ 18 $ 23 Sum of individual line items may not equal subtotal and total amounts due
Slide 24: Supplementary Segment Data — APS
Supplementary Segment Data — APS Three Three Months Months Ended Ended September December 30, 2021 31, 2021 (in $ millions) CTOS Inc. CTOS Inc. Rental revenue $ 4 $ 5 Parts and services revenue 31 30 Total revenue 35 34 Cost of revenue: Cost of revenue 25 22 Depreciation of rental equipment 1 2 Tota
Slide 25: Net Capex Reconciliation
Net Capex Reconciliation Actual Pro Forma Custom Pro Forma CTOS Inc. Truck LP Combined Twelve Three Twelve Three Months Ended Twelve Months Ended Months Months Months December 31, December 31, Ended Ended Ended December March 31, December (in $ millions) 2020 2021 2020 2021 31, 2021 2021 31, 2021 Pu
Slide 26: Leverage Ratio Calculation
Leverage Ratio Calculation September 30, December 31, (in $ millions) 2021 2021 (As of Period End) Current Maturities of Long-Term Debt $ 5 $ 6 Current Portion of Finance Leases 4 4 Long-Term Debt, Net 1,324 1,308 Finance Leases 5 5 Add: Deferred Financing Costs 34 33 Total Debt and Finance Leases 1
Custom Truck One Source — FY2021 Earnings Presentation on 6ix