Custom Truck One Source, Inc. · NYSE:CTOS
Custom Truck One Source — Q2 2022 Earnings Presentation
25 slides from Custom Truck One Source's earnings presentation, Aug 9, 2022
Slide 1: Custom Truck One Source 2nd Quarter 2022 Investor Presentation
Custom Truck One Source 2nd Quarter 2022 Investor Presentation August 9, 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: Solid Q2 2022 Financial Results
Solid Q2 2022 Financial Results • Delivered strong quarterly Adjusted Gross Profit and Adjusted EBITDA despite continued supply chain constraints • Adjusted Gross Profit and Adjusted EBITDA up 17% and 9%, respectively, vs. Q2 ’21 despite lower revenues(1) • Results reflect continued strong end-marke
Slide 4: Unique Business Model = Strong Value Creation
Unique Business Model = Strong Value Creation Attractive end markets with long-term Infrastructure Bill will further supercharge secular growth drivers end-market tailwinds Differentiated one-stop shop business model with Best-in-class asset level returns: Rental Asset ROICs of strong unit economics
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 ~$9B 42% • Better risk management with dedicated New Sales Marke
Slide 7: Diverse, Highly Loyal Customer Base
Diverse, Highly Loyal Customer Base Highlights Diverse Customer Base • Serve more than 3,000 customers, with T&D Infrastructure / Telecom Rail the top 15 customers representing ~19% of revenue • No customer represents more than 3% of company revenue • Strong brand recognition and awareness among ind
Slide 8: Differentiated “One-Stop-Shop” Business Model
Differentiated “One-Stop-Shop” Business Model Integrated Production Capabilities and Rental + Sales Model Provides Unique Value Proposition Integrated Production Capabilities One-Stop-Shop Value Proposition Unit Economic Advantages Multiple Revenue Streams Strong, Consistent Returns Customer Benefit
Slide 9: National Branch Network
National Branch Network National footprint provides flexibility in managing the rental fleet and superior customer service for rental and sales customers • 37 locations and 350 technicians in the U.S. and Canada • 80 mobile technicians capable of being deployed across the country • Opportunity remai
Slide 10: Our ESG Strategy
Our ESG Strategy • With the integration largely complete, we have begun developing our Environmental, Social and Governance (ESG) strategy • Our Board is dedicated to, and actively involved in, the process • Our ESG plan will: • Build upon the core values shared across our organization • Highlight t
Slide 11: Consolidated Pro Forma Operating Performance
Consolidated Pro Forma Operating Performance(1)(2)(3) ($ millions, except where indicated) Q2 Pro Forma Adjusted Gross Profit and Adjusted EBITDA and grew 17% and 9% year-over-year Pro Forma Revenue Pro Forma Adjusted Gross Profit $900 $300 Parts & Services $770 $256 $729 $236 $750 $59 $250 Certain
Slide 12: CTOS Reporting Segments
CTOS Reporting Segments Reporting segments align with our go-to market strategies and capital allocation decisions Equipment Rental Solutions Truck & Equipment Sales Aftermarket Parts & Service (ERS) (TES) (APS) Includes results from core rental Includes results from new and Includes results f
Slide 13: Equipment Rental Solutions (ERS)
Equipment Rental Solutions (ERS) ($ millions, except where indicated) Rental revenue up more than 2% vs. Q1 2022, driven by continued strong utilization & pricing Revenue Adjusted Gross Profit(1) $180 $165 $120 • ERS performance continues to perform at a high level, with utilization remaining $145 $
Slide 14: Truck & Equipment Sales (TES)
Truck & Equipment Sales (TES) ($ millions, except where indicated) New sales increased 8% and new sales order backlog grew by 13% over Q1 2022 Revenue Gross Profit $200 $30 • Revenue increased $13M in Q2 ’22 despite continued supply chain $181 $27 $168 constraints $175 $24 $25 $150 • New sales backl
Slide 15: Aftermarket Parts & Service (APS)
Aftermarket Parts & Service (APS) ($ millions, except where indicated) APS revenue up 5% vs. Q1 2022 Revenue Adjusted Gross Profit(1) • Total revenue increased 5% in Q2 ‘22 vs. Q1 ’22 $40 $14 • Parts & Services revenue increased 5% vs. Q1 ‘22 $35 $12 $35 $34 $4 $12 • Rental revenue increased 10% vs.
Slide 16: Balance Sheet & Capex
Balance Sheet & Capex(1) ($ millions, except where indicated) Continue to strengthen the balance sheet and demonstrated ability to de-lever quickly through cash flow generation and Adjusted EBITDA growth Improved leverage by 0.8x since the merger Available liquidity up $25M since the merger 5.0x $45
Slide 17: Updated 2022 Outlook
Updated 2022 Outlook FY21 Pro Forma FY22 Outlook Growth Consolidated Revenue $1.48 billion $1.54 - $1.65 billion 4% - 11% ERS $610 - $650 million TES $800 - $850 million APS $130 - $150 million Adjusted EBITDA $333 million $385 - $400 million 16% - 20% Highlights • Updates previous TES revenue guida
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
1 Appendix custom Tauck
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Quarter Year to Date Q2 21 Q1 22 Q2 22 Q2 21 Q2 22 (in $ millions) Pro Forma Net income (loss) $ (129) $ (3) $ 14 $ (51) $ 10 (1) Represents the non-cash impact of purchase accounting, net of accumulated Interest expense 18 17 18 31 35 depreciation, on the cost of equi
Slide 21: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation Quarter Year to Date Q2 21 Q1 22 Q2 22 Q2 21 Q2 22 (in $ millions) Pro Forma Pro Forma Revenue Rental revenue $ 99 $ 109 $ 112 $ 199 $ 221 Equipment sales 248 227 219 512 446 [not used] Parts sales and services 29 30 32 59 62 Total Revenue 375 366 362 770 729 Cos
Slide 22: Supplementary Segment Data — ERS
Supplementary Segment Data — ERS Q2 21 Q1 22 Q2 22 (in $ millions) Rental revenue $ 95 $ 106 $ 108 Equipment sales 33 59 37 Total revenue 128 165 145 Cost of revenue: — — Cost of rental revenue 28 25 28 Cost of equipment sales 35 43 30 Depreciation of rental equipment 42 44 42 Total cost of revenue
Slide 23: Supplementary Segment Data — TES
Supplementary Segment Data — TES Q2 21 Q1 22 Q2 22 (in $ millions) Equipment sales $ 215 $ 168 $ 181 Cost of equipment sales 195 144 154 Gross profit $ 20 $ 24 $ 27 Sum of individual line items may not equal subtotal and total amounts due to rounding. 23
Slide 24: Supplementary Segment Data — APS
Supplementary Segment Data — APS Q2 21 Q1 22 Q2 22 (in $ millions) Rental revenue $ 3 $ 4 $ 4 Parts and services revenue 29 30 32 Total revenue 32 34 35 Cost of revenue: Cost of revenue 28 25 24 Depreciation of rental equipment 1 1 1 Total cost of revenue 29 26 25 Gross profit $ 3 $ 8 $ 11 Sum of in
Slide 25: Leverage Ratio Calculation
Leverage Ratio Calculation Q4 21 Q1 22 Q2 22 (in $ millions) (As of Period End) Current Maturities of Long-Term Debt $ 6 $ 5 $ 3 Current Portion of Finance Leases 4 5 3 Long-Term Debt, Net 1,308 1,324 1,350 Finance Leases 5 2 3 Add: Deferred Financing Costs 33 32 30 Total Debt and Finance Leases 1,3
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