Alta Equipment Group Inc. · NYSE:ALTG
Alta Equipment — Q2 2023 Earnings Presentation
33 slides from Alta Equipment's earnings presentation, Aug 9, 2023
Slide 1: Earnings Presentation Second Quarter 2023
EARNINGS PRESENTATION SECOND QUARTER 2023 August 9, 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 & INTRODUCTION Agenda INTRODUCTION CEO Overview Executive Officers: Q2 2023 Highlights Business Conditions Ryan Greenawalt, CEO Growth Strategy and Execution & Tony Colucci, CFO Alta Equipment Group Overview CFO Overview Q2 2023 Financial Summary Capital Structure and Debt Summary
Slide 4: CEO Overview
CEO OVERVIEW Ryan Greenawalt Earnings Presentation | Second Quarter 2023 | August 9, 2023 4
Slide 5: Q2 2023 Financial Highlights
CEO OVERVIEW Net Revenue Increased Q2 2023 15.2% to $468.4 million over the year ago quarter Financial Construction and Material Handling Revenue of $281.5 million and $169.1 million, respectively Highlights: New and Used Equipment Sales Grew 17.2% to $254.6 million Strong second quarter financial r
Slide 6: Business Conditions
CEO OVERVIEW Customer Demand and Sentiment Remains Strong Expect Continued Growth from MH and CE Segments Business Supply Chains are Returning to More Normalized Levels Conditions: and driving higher new and used equipment sales, which will benefit our parts and service business Positive outlook for
Slide 7: Growth Strategy and Execution
CEO OVERVIEW M&A Activity Since Public Offering demonstrates the success of our growth strategy, adding $446 million in total revenue value and $53.3 million in EBITDA at accretive valuation multiples Growth Pipeline Remains Active for Accretive Deals Strategy and that compliment our existing busine
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 | Second Quarter 2023 | August 9, 2023 9
Slide 10: Q2 2023 Financial Summary
CFO OVERVIEW Q2 2023 Financial Summary Quarterly Comparisons - Revenue Quarterly Comparisons New and used Parts sales Earnings Metrics Construction Segment equipment sales 15% 54% Adjusted EBITDA of $49.9MM versus • Total revenue growth of $10.5MM, or 3.9%, from $41.4MM in Q2 2022, a 20.5% increase
Slide 11: Q2 2023 Financial Performance
CFO OVERVIEW Q2 2023 Financial Performance QUARTER-OVER-QUARTER Q2 2023 Quarter over Quarter Revenue / Gross Profit Consolidated ($MM) Organic revenue grew $29.3MM, or 7.2% Organic product support grew $12.1MM to $122.1MM or 11.0% $468.4 $126.8 Gross profit grew 19.8% to $126.8MM Construction
Slide 12: Q2 2023 Adjusted EBITDA / Economic EBIT
CFO OVERVIEW Q2 2023 Adjusted EBITDA / Economic EBIT Adj. EBITDA1 / Adj. PF EBITDA1 Adj. EBITDA1 / Economic EBIT1 ($MM) / TTM Pro Forma2 $182.0 Q2 2023 Q2 2023 $158.1 $49.9 Q2 2022 $49.9 Q2 2022 $46.5 $41.4 $120.0 $132.0 $83.0 $113.8 $78.6 $60.0 Conversion % 72.3% 65.5% 72.0% 72.5% 2020 2021 2022 PF
Slide 13: Alta Equipment Group Financial Profile
CFO OVERVIEW Alta Equipment Group Financial Profile 2022 YTD Q2 2022 YTD Q2 2023 TTM ($MM) 2021 2022 Pro Forma1 Pro Forma1 Pro Forma1 Jun 30, 2023 Alta Revenue $1,212.8 $1,571.8 $1,571.8 $738.2 $889.1 $1,722.7 Acquisitions Revenue - - 86.6 58.4 1.0 29.2 Total Revenue $1,212.8 $1,571.8 $1,658.4 $796.
Slide 14: Rent-to-Sell Economics
CFO OVERVIEW Rent-to-Sell Economics Highlights of a Rent-to-Sell Strategy Short-term rental Create different price points Establish another avenue profits to meet customer demand for field population Illustrative Example Purchase of Equipment Purchase (1/1/X1) $400,000 Equipment Rental Revenue (11 o
Slide 15: Financial Operating Leverage
CFO OVERVIEW Financial Operating Leverage Six Months Ended Six Months Ended Change Jun 30, 2022 Jun 30, 2023 Revenue $738.2 $889.1 $150.9 COGS $541.0 $641.0 $100.0 Gross Profit $197.2 $248.1 $50.9 Plus: Rental Depreciation 43.6 50.5 6.9 (Less): Gain on Sale of Rental Eq. (14.6) (16.7) (2.1) Equals:
Slide 16: Capital Structure / Credit Profile
CFO OVERVIEW Capital Structure / Credit Profile Balance Sheet Strength / Liquidity5 Capital Structure ($MM) June 30, 2023 $ Amount EV/2023F EBITDA $742MM Cash $2.3 700,000 600,000 Debt:1 $502MM Lines of Credit (ABL)2 $292.4 500,000 400,000 1.7x Floor Plan – Used and Rental 72.7 Coverage $292MM 300,0
Slide 17: Debt Structure and Maturity Runoff
CFO OVERVIEW Debt Structure and Maturity Runoff Debt Maturity ABL SSSL $500MM Drawn $450MM Undrawn $400MM $350MM $315MM $292MM $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 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 ~$7.6MM annual dividend program in July 2022, affording accretive, and actionable YTD organic revenue growth
Slide 19: Rental Fleet and Cash Flow Summary
CFO OVERVIEW Rental Fleet and Cash Flow Summary Rental Cap-Ex Summary ($MM)1 Six Mos Six Mos +7% YOY Ended Jun Ended Jun Improvement 2020 2021 2022 30, 2022 30, 2023 in rental Gross Rental Capex $159.4 $207.6 $186.8 $100.2 $128.7 rates 6 OEC of Rental Fleet Sold (95.5) (160.5) (139.0) (81.4) (68.5)
Slide 20: Q2 2023 – Reaffirming FY 2023 Guidance
CFO OVERVIEW Q2 2023 – Reaffirming FY 2023 Guidance FY 2023 OUTLOOK ($ IN MM) ADJUSTED EBITDA: FY 2023 GUIDANCE $180.0 - $188.0 (Net of New Equipment Floorplan Interest) 2023 GUIDANCE COMMENTARY: HIGHLIGHTS/RATIONALE Strong fundamentals remain in core markets served End-market demand and pricing
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 | Second Quarter 2023 | August 9, 2023 21
Slide 22: Appendices: About the Company
APPENDICES APPENDICES About Aboutthe theCompany Company Earnings Presentation | Second Quarter 2023 | August 9, 2023 22
Slide 23: Expanding Footprint in Key Geographic Markets
THE COMPANY Expanding Footprint in Key Geographic Markets Strategic Expansion 76 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 75 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 $446MM OF REVENUE AND $53MM OF EBITDA Dealerships Complementary Service lines Revenue: $25MM Revenue: $17MM Revenue: $64MM Revenue: $28MM Revenue: $41MM Revenue: $6MM Revenue: $35MM EBITDA:
Slide 27: ALTG's Growth Financing Model – 2022 Illustrative
THE COMPANY ALTG’s Growth Financing Model – 2022 Illustrative CAPITAL STRUCTURE SUPPORTS GROWTH STRATEGY ALTG’s ABL-based capital structure alongside operating cash flows provide a framework for continuation of acquisition and organic growth Operating cash flows applied against the ABL revolver
Slide 28: Performance in Inflationary Environment
THE COMPANY Performance in Inflationary Environment Department New Equipment Sales Used Equipment Sales Rental Equipment Sales Rent-to Rent Parts / Service Replacement Capex Impact on EBITDA Neutral Neutral Positive Positive Positive Negative Commentary Increases in input pricing Increases in trade
Slide 29: Unaudited Reconciliation of Non-GAAP Financial Measures
APPENDICES Unaudited Reconciliation of Non-GAAP Financial Measures Earnings Presentation | Second Quarter 2023 | August 9, 2023 29
Slide 30: Adjusted EBITDA – GAAP Reconciliation
APPENDIX A Adjusted EBITDA – GAAP Reconciliation Six Mos. Ended Six Mos. Ended TTM ($MM) 2020 2021 2022 Q2 2022 Q2 2023 June 30, 2022 June 30, 2023 June 30, 2023 Net income/(loss) available to common shareholders $(24.0) $(23.4) $6.3 $5.4 $1.7 $3.4 $1.9 $4.8 Depreciation and amortization 75.0 95.8 1
Slide 31: Free Cash Flow from Operations - GAAP Reconciliation
APPENDIX B Free Cash Flow from Operations - GAAP Reconciliation Six Mos Ended Six Mos Ended ($MM) 2020 2021 2022 Jun 30, 2022 Jun 30, 2023 Net cash provided by (used in) operating activities per GAAP $(35.0) $30.7 $26.0 $3.4 $(33.8) Adjustments for non-recurring items 1 1.7 4.7 3.7 1.3 1.6 Transfers
Slide 32: Economic EBIT – GAAP Reconciliation
APPENDIX C Economic EBIT – GAAP Reconciliation Six Mos Ended Six Mos Ended ($MM) 2020 2021 2022 Jun 30, 2022 Jun 30, 2023 Net income/(loss) available to common shareholders per GAAP $(24.0) $(23.4) $6.3 $3.4 $1.9 Depreciation and amortization 75.0 95.8 112.0 51.5 61.1 Interest expense 23.8 24.0 31.8
Slide 33: Retained Cash Flow - GAAP Reconciliation
APPENDIX D Retained Cash Flow - GAAP Reconciliation Six Mos Ended Six Mos Ended ($MM) 2020 2021 2022 Jun 30, 2022 Jun 30, 2023 Net income (loss) per GAAP $(24.0) $(20.8) $9.3 $4.9 $3.4 Adjustments to reconcile net income (loss) to Retained Cash Flow: Depreciation and amortization 75.0 95.8 112.0 51.