Alta Equipment Group Inc. · NYSE:ALTG
Alta Equipment — Q4 2023 Earnings Presentation
34 slides from Alta Equipment's earnings presentation, Mar 14, 2024
Slide 1: Earnings Presentation Fourth Quarter and Full Year 2023
EARNINGS PRESENTATION FOURTH QUARTER AND FULL YEAR 2023 March 14, 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: ▪ Q4 and Full Year 2023 Highlights ▪ Business Conditions Ryan Greenawalt, CEO ▪ Growth Strategy and Execution & Tony Colucci, CFO ▪ Segment and Product Overview ▪ Integrated Dealership Business Model CFO Overview ▪ Q4 and Ful
Slide 4: CEO Overview
CEO OVERVIEW Ryan Greenawalt 4
Slide 5: Q4 2023 Financial Highlights
CEO OVERVIEW Revenue Increased Q4 2023 21.7% over the year ago quarter, to a quarterly record of $521.5 million Financial Construction and Material Handling Revenue Increased to $328.1 million and $179.0 million, respectively Highlights: New and Used Equipment Sales Grew 25.1% over the year ago quar
Slide 6: 2023 Highlights
CEO OVERVIEW Revenue Increased $305.0 million to $1,876.8 million, an increase of 19.4% Construction and Material Handling Revenue Grew to 2023 $1.1 billion and $681.5 million, respectively Highlights: Product Support Revenue (Parts and Service) Up 17.7%, or $78.2 million, to $519.6 million Sizeable
Slide 7: Business Conditions
CEO OVERVIEW 1 Total State DOT FY24 Budgets up Double Digits over FY23 (FL spending remains strong) Industry Data and Trends Supportive of Continue Growth in ‘24 Business ▪ ▪ 2 3 Non-Residential Starts forecast to increase from $441 billion in ‘23 to $458 billion in ‘24 Industrial Spending forecast
Slide 8: Growth Strategy and Execution
CEO OVERVIEW M&A Activity Since Public Offering demonstrates the success of our growth strategy, closing sixteen acquisitions adding $537 million in total revenue value and $65 million in EBITDA at accretive valuation multiples Growth Opportunity for Accretive Transactions Remains in place for deals
Slide 9: 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 10: Alta Equipment Group vs Pure-Play Rental Businesses
CEO OVERVIEW Alta Equipment Group Vs Pure-Play Rental Businesses EQUIPMENT DEALERSHIP BUSINESS MODEL ▪ Protected exclusive areas of primary responsibility (APRs) ▪ Exclusive rights to OEM equipment and parts ▪ Proprietary diagnostic software to service field population ▪ Warranty repair work must be
Slide 11: CFO Overview
CFO OVERVIEW Tony Colucci 11
Slide 12: Q4 2023 Financial Summary
CFO OVERVIEW Q4 2023 Financial Summary Quarterly Comparisons - Revenue Quarterly Comparisons $6 Earnings Metrics Construction Segment 9.1 Adjusted EBITDA of $49.7MM versus • Total revenue growth of $59.1MM, or 22.0%, from $42.7MM in Q4 2022, a 16.4% increase $269.0MM to $328.1MM Q4 2023 $60.8 GAAP i
Slide 13: Q4 & Full Year 2023 Financial Performance
CFO OVERVIEW Q4 & Full Year 2023 Financial Performance QUARTER-OVER-QUARTER Q4 2023 Quarter over Quarter Revenue / Gross Profit Consolidated ($MM) ▪ Organic revenue grew $71.0MM, or 16.8% ▪ Organic product support revenue grew $11.5MM to $123.8MM or 10.3% ▪ Gross profit grew 20.0% to $133.0MM % % .7
Slide 14: Q4 2023 Adjusted EBITDA / Economic EBIT
CFO OVERVIEW Q4 2023 Adjusted EBITDA / Economic EBIT Adj. EBITDA1 / Adj. PF EBITDA1 Adj. EBITDA1 / Economic EBIT1 ($MM) / TTM Pro Forma2 63.8% QUARTERLY YEAR-OVER-YEAR Adjusted EBITDA / Economic EBIT ▪ Adjusted EBITDA grew $7.0MM from $42.7MM to $49.7MM in Q4 2023, or 16.4%, related to acquisitions
Slide 15: Alta Equipment Group Financial Profile
CFO OVERVIEW Alta Equipment Group Financial Profile 2023 ($MM) 2021 2022 2023 Pro Forma1 Alta Revenue $1,212.8 $1,571.8 $1,876.8 $1,876.8 Acquisitions Revenue - - - 74.1 Total Revenue $1,212.8 $1,571.8 $1,876.8 $1,950.9 Alta Gross Profit $314.4 $419.6 $507.2 $507.2 Acquisition Gross Profit - - - 25.
Slide 16: Capital Structure / Credit Profile
CFO OVERVIEW Capital Structure / Credit Profile Balance Sheet Strength / Liquidity5 Capital Structure ($MM) EV/2023PF Dec 31, 2023 $ Amount EBITDA Cash $31.0 Debt:1 Lines of Credit (ABL)2 $317.5 Floor Plan – Used and Rental 99.5 Finance Lease Liabilities 38.8 2.1x 2nd Lien Note3 315.0 1.6x Total Deb
Slide 17: Debt Structure and Maturity Runoff
CFO OVERVIEW Debt Structure and Maturity Runoff Debt Maturity ABL SSSL ABL SENIOR SECURED SECOND INTEREST RATE CAP ▪ $485MM facility committed for another 2.0 years LIEN NOTE (SSSL) ▪ Entered November of 2022 ▪ Interest Rate SOFR+175-225bps ▪ ~2.25 years from maturity date ▪ Protects cash flow from
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 ~$7.6MM annual program in July 2022, affording accretive, and actionable ‘23 organic revenue growth was commo
Slide 19: Rental Fleet and Cash Flow Summary
CFO OVERVIEW Rental Fleet and Cash Flow Summary Rental Cap-Ex Summary ($MM)1 2020 2021 2022 2023 +5% YOY Gross Rental Capex $159.4 $207.6 $186.8 $242.4 Improvement in rental OEC of Rental Fleet Sold (95.5) (160.5) (139.0) (155.1) rates 6 Net Rental Capex Invested $63.9 $47.1 $47.8 $87.3 +$246MM High
Slide 20: FY 2024 Guidance
CFO OVERVIEW FY 2024 Guidance FY 2024 OUTLOOK ($ IN MM) ADJUSTED EBITDA: FY 2024 GUIDANCE $207.5MM – $217.5MM (Net of New Equipment Floorplan Interest) 2024 GUIDANCE COMMENTARY: ▪ Expected continued organic growth in product support, in line with historic trends ▪ Demand backdrop underpinned by reco
Slide 21: Transformative Growth and Execution since IPO
CFO OVERVIEW Transformative Growth and Execution since IPO THEN: IPO1 NOW (~4.0 years from IPO) Revenue Revenue3 $900MM $1,877MM Locations2 Locations3 43 85 Total Employees2 Total Employees3 ~1,700 ~3,000 Technicians2 Technicians3 ~850 ~1,325 Adj. EBITDA Adj. EBITDA4 S t S Sa t $94M $191M t t a ae t
Slide 22: Thank You
THANK YOU (NYSE:ALTG) Investor Relations Contact: Kevin Inda SCR Partners M: (225) 772-0254 E: Kevin@scr-ir.com 22
Slide 23: Appendices: About the Company
APPENDICES APPENDICES About Aboutthe theCompany Company 23
Slide 24: Expanding Footprint in Key Geographic Markets
THE COMPANY Expanding Footprint in Key Geographic Markets Strategic Expansion 85 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 25: 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 26: 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 14 states and 2 provinces ▪ Approx. 1,325 of Alta’s ~3,000 employees are factory traine
Slide 27: 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: $35MM Revenue:
Slide 28: ALTG's Growth Financing Model – 2023 Illustrative
THE COMPANY ALTG’s Growth Financing Model – 2023 Illustrative CAPITAL STRUCTURE SUPPORTS GROWTH STRATEGY ▪ ALTG’s ABL-based capital structure alongside operating cash flows provide a framework for continuation of acquisition and organic growth ▪ Operating cash flows applied against the ABL revolver
Slide 29: Performance in Inflationary Environment
THE COMPANY Performance in Inflationary Environment Department New Equipment Sales Used Equipment Sales Rental Equipment Sales Rent-to Rent Parts / Service Replacement Capex Impact on EBITDA Neutral Neutral Positive Positive Positive Negative Commentary Increases in input pricing Increases in trade
Slide 30: Unaudited Reconciliation of Non-GAAP Financial Measures
APPENDICES Unaudited Reconciliation of Non-GAAP Financial Measures 30
Slide 31: Adjusted EBITDA – GAAP Reconciliation
APPENDIX A Adjusted EBITDA – GAAP Reconciliation ($MM) 2020 2021 2022 Q4 2022 Q4 2023 2023 Net income/(loss) available to common shareholders $(24.0) $(23.4) $6.3 $(1.5) $(2.7) $5.9 Depreciation and amortization 75.0 95.8 112.0 30.9 36.5 132.6 Interest expense 23.8 24.0 31.8 10.4 16.1 57.0 Income ta
Slide 32: Free Cash Flow from Operations - GAAP Reconciliation
APPENDIX B Free Cash Flow from Operations - GAAP Reconciliation ($MM) 2020 2021 2022 2023 Net cash provided by (used in) operating activities per GAAP $(35.0) $30.7 $26.0 $63.8 Adjustments for non-recurring items 1 1.7 4.7 3.7 4.9 Transfers into rental fleet 2 113.6 165.3 122.9 180.2 Replacement of
Slide 33: Economic EBIT – GAAP Reconciliation
APPENDIX C Economic EBIT – GAAP Reconciliation ($MM) 2020 2021 2022 2023 Net income/(loss) available to common shareholders per GAAP $(24.0) $(23.4) $6.3 $5.9 Depreciation and amortization 75.0 95.8 112.0 132.6 Interest expense 23.8 24.0 31.8 57.0 Income tax expense/(benefit) (6.6) 3.6 1.3 (6.4) EBI
Slide 34: Retained Cash Flow - GAAP Reconciliation
APPENDIX D Retained Cash Flow - GAAP Reconciliation ($MM) 2020 2021 2022 2023 Net income (loss) per GAAP $(24.0) $(20.8) $9.3 $8.9 Adjustments to reconcile net income (loss) to Retained Cash Flow: Depreciation and amortization 75.0 95.8 112.0 132.6 Amortization of debt discount and debt issuance cos