Alta Equipment Group Inc. · NYSE:ALTG
Alta Equipment — Q4 2021 Earnings Presentation
31 slides from Alta Equipment's earnings presentation, Mar 31, 2022
Slide 1: Fourth Quarter and Full Year 2021 Earnings Presentation
Fourth Quarter and Full Year 2021 Earnings Presentation March 31, 2022
Slide 2: Agenda
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q4 2021 Earnings Presentation | 2
Slide 3: 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 4: Executive Officers
Introduction Executive Officers Ryan Greenawalt, CEO Tony Colucci, CFO NICK HAGEN Q4 2021 Earnings Presentation | 4
Slide 5: II. CEO Overview
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q4 2021 Earnings Presentation | 5
Slide 6: Q4 2021 Highlights
CEO Overview Q4 2021 Highlights Strong Finish to the Year in Unprecedented Operating Environment ▪ Net revenue increased 27.1% to $356.3 million over the prior year with 19.2% organic growth ▪ Adjusted EBITDA grew 53.3% to $37.7 million compared to $24.6 million last year ▪ Continued high demand acr
Slide 7: Full Year 2021 Highlights
CEO Overview Full Year 2021 Highlights Progress Driving Scale and Furthering Strategy in 2021 ▪ Net revenue increased 38.8% to $1.2 billion over the prior year with 9.3% organic growth ▪ Adjusted EBITDA grew 44.6% to $120.0 million compared to $83.0 million last year ▪ Grew footprint in Construction
Slide 8: 2022 and Beyond
CEO Overview 2022 and Beyond Foundation in Place for Additional Sustained Growth in 2022+ ▪ Constrained supply chain expected to drive parts and service productivity and rental utilization ▪ Re-engineered capital structure supporting accretive long-term growth strategies ▪ M&A pipeline remains activ
Slide 9: Company Overview
CEO Overview Company Overview Best-in-Class Brand Portfolio Creates Cross-Selling Opportunities Comprehensive Service Offering Across Heavy Equipment and Material Handling Products Select Equipment Offering: Material Handling & Warehousing Solutions Select Equipment Offering: Construction Electric V
Slide 10: Key Stakeholder Relationships
CEO Overview Key Stakeholder Relationships Collaborative OEM relationships Enhanced customer relationships ⚫ Consistently acknowledged ⚫ Provides equipment solutions as a top dealership partner to leading industrial and by OEMs construction businesses ⚫ Leading market share by ✓ Exclusive OEM ✓ “One
Slide 11: Expanding Footprint in Key Geographic Markets
CEO Overview Expanding Footprint in Key Geographic Markets Strategic Expansion ▪ 62 locations throughout Michigan, Indiana, Ohio, Illinois, Massachusetts, Maine, New Hampshire, Connecticut, New York, Vermont, Florida, and Virginia ▪ Dealership platform with parts and service capabilities drives recu
Slide 12: Product Support Overview
CEO Overview Product Support Overview Product Support Solutions We have capabilities to support all makes and models of Construction and Material Handling equipment. SERVICE PARTS ▪ 62 full-service ▪ Parts inventory of locations across 12 approx. $56 million states ▪ Electronically ▪ Approx. half of
Slide 13: Emerging Markets: Alta Commercial EV Segment
CEO Overview Emerging Markets: Alta Commercial EV Segment Nikola Corporation, a leading designer and manufacturer of heavy-duty- commercial-battery-electric-vehicles (BEV), fuel cell electric vehicles (FCEV) and energy infrastructure solutions, has signed an agreement with Alta Equipment Group expan
Slide 14: III. CFO Overview
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q4 2021 Earnings Presentation | 14
Slide 15: 2021 Financial Summary
CFO Overview 2021 Financial Summary 2021 Financial Summary Quarterly Comparisons ▪ Adjusted EBITDA of $37.7MM versus $24.6MM in Q4 2020, a 53.3% increase ▪ Adjusted Proforma EBITDA of $40.4MM versus $29.2MM in Q4 2020 Year over Year Comparisons ▪ Revenue growth of $339.2MM, or 38.8%, from $873.6MM t
Slide 16: Prudent Acquisition Strategy Post IPO (2020-2021)
CFO Overview Prudent Acquisition Strategy Post IPO (2020-2021) Dealership Target Financial Highlights Geography Closed Revenue: $35MM New England 12/31/2021 EBITDA: $3.1MM Revenue: $65MM Northern Michigan 12/31/2021 EBITDA: $6.5MM Revenue: $19MM Ohio 10/1/2021 EBITDA: $3.2MM Revenue: $41MM New York
Slide 17: Q4 2021 Financial Performance
CFO Overview Q4 2021 Financial Performance 2021 Quarter over Quarter Revenue / Gross Profit ($MM) Quarter over Quarter $89.1 Total Revenue $356.3 ▪ Revenue grew 27.1% to $356.3MM ▪ Thirteen acquisitions completed since 1/1/201 $280.4 $64.4 ▪ Organic Revenue grew $53.8MM, or 19.2% Construction Revenu
Slide 18: Q4 2021 Adjusted EBITDA / Cash Flow
CFO Overview Q4 2021 Adjusted EBITDA / Cash Flow Adj. EBITDA1 / Adj. PF EBITDA1 Quarterly Year-over-Year Q4 2021 Adjusted EBITDA / Cash Flow Q4 2021 $40.4 $37.7 ▪ Adjusted EBITDA improved by $13.1MM from Q4 2020 $24.6MM to $37.7MM, or 53.3%, primarily related Q4 2020 $29.2 $24.6 to impact of acquisi
Slide 19: Proforma ALTG Financial Profile
CFO Overview Proforma ALTG Financial Profile 2020 2021 ($MM) 2019 2020 2021 PF+Acq1 PF + Acq1 Alta Revenue $557.4 $873.6 $1,212.8 $873.6 $1,212.8 Acquisitions Revenue - - - 306.3 134.0 Total Revenue $557.4 $873.6 $1,212.8 $1,179.9 $1,346.8 % Growth 35% 57% 39% 2% 31% Alta Gross Profit $152.1 $214.5
Slide 20: ALTG's Steady Performance in Supply Chain Constrained Market
CFO Overview ALTG’s Steady Performance in Supply Chain Constrained Market Supply Chain Impact on Department Commentary Constrained EBITDA • Supply chain constraints cause new equipment shortages and New extended lead times, impacting Alta’s ability to deliver new Equipment equipment to customers and
Slide 21: ALTG's Steady Performance in Inflationary Environment
CFO Overview ALTG’s Steady Performance in Inflationary Environment Department Impact on EBITDA Commentary • Increases in input pricing able to be passed along to end New Equipment customers through manufacturer suggested retail price Sales (MSRP) • Increases in trade in values on equipment preempts
Slide 22: ALTG Operating Leverage in the Construction Segment
CFO Overview ALTG Operating Leverage in the Construction Segment Operating Leverage Improvements Cash Operating Income1 ▪ By bolstering the top line, and maintaining gross profit margins, while also minimizing any 39.0% $19.6 incremental operational expense increases, Alta’s Construction companies h
Slide 23: Capital Structure / Credit Profile
CFO Overview Capital Structure / Credit Profile Credit Facility Proforma Capital Structure ($MM) 12/31/21 EV/Adj. EV/Adj. ▪ Liquidity of ~250MM at 12/31/2021 PF EBITDA EBITDA Guidance ▪ Suppressed availability of ~$7MM Cash $2.3 ▪ Borrowing Base Increased ~$10MM vs. Debt:1 Q3 2021 Lines of Credit (A
Slide 24: Debt Structure and Maturity Runoff
CFO Overview Debt Structure and Maturity Runoff ABL High-Yield Bond (HYB) ▪ $350MM facility committed for another 4 years ▪ 4.75 years from maturity date ▪ Interest Rate L+175-225bps ▪ Coupon rate fixed at 5.625% ▪ Ample liquidity for organic and M&A growth ▪ No amortization ▪ Conducive for acquirin
Slide 25: M&A Financing Model
CFO Overview M&A Financing Model Capital Structure Influence on Corporate M&A Strategy ▪ ALTG’s ABL Capital structure alongside operating cash flow provide a framework for continuation of acquisition growth ▪ Operating cash flows applied against the ABL revolver naturally reduces leverage profile an
Slide 26: FY 2021 Actual to Guidance Review
CFO Overview FY 2021 Actual to Guidance Review FY 2021 Actual to Guidance FY 2021 Actual1 FY 2021 Guidance1 Adjusted EBITDA: $120.0 Adjusted EBITDA: $113.0-116.0 2021 Review Summary • Outperformed expectations for rental utilization and rental fleet sales • Change in GAAP lease accounting, ~$2MM inc
Slide 27: FY 2022 Guidance
CFO Overview FY 2022 Guidance FY 2022 Guidance FY2022 Outlook ($ in MM) $137.0-142.0 Adjusted EBITDA (Net of New Equipment Floorplan Interest) 2022 Guidance Commentary Highlights/Rationale • Building off 2021 performance in rental and product support business lines • End-market demand drivers expect
Slide 28: IV. Appendices
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q4 2021 Earnings Presentation | 28
Slide 29: Adjusted EBITDA Reconciliation
Appendix A Adjusted EBITDA Reconciliation ($MM) 2018 2019 2020 Q4 2020 Q4 2021 2021 Net Income/(Loss) Available to Common Shareholders $1.5 ($35.4) ($24.0) ($3.2) ($1.5) ($23.4) Depreciation and Amortization 37.1 50.1 75.0 23.4 26.6 95.8 Interest Expense 15.1 20.5 23.8 6.1 6.4 24.0 Income Tax Expens
Slide 30: Free Cash Flow Reconciliation
Appendix B Free Cash Flow Reconciliation ($MM) 2018 2019 2020 2021 Net Income/(Loss) Available to Common Shareholders $1.5 ($35.4) ($24.0) ($23.4) Depreciation and Amortization 37.1 50.1 75.0 95.8 Interest Expense 15.1 20.5 23.8 24.0 Income Tax Expense/(Benefit) - - (6.6) 3.6 EBITDA [1] $53.7 $35.2
Slide 31: Free Cash Flow Reconciliation – Capital Expenditure Detail
Appendix B (cont.) Free Cash Flow Reconciliation – Capital Expenditure Detail ($MM) 2018 2019 2020 2021 Replacement of Sold Rental Equipment, at Original Cost1,2 $57.3 $56.9 $105.4 $169.5 3 Capitalized Costs to Maintain Fleet (1.5% of Beg. OEC) 2.7 3.5 5.2 6.3 (Less) Rental Fleet Disposal Proceeds (