Alta Equipment Group Inc. · NYSE:ALTG
Alta Equipment — FY2020 Earnings Presentation
27 slides from Alta Equipment's earnings presentation, Mar 18, 2021
Slide 1: Fourth Quarter and Full Year 2020 Earnings Presentation
Fourth Quarter and Full Year 2020 Earnings Presentation March 18, 2021
Slide 2: Agenda
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q4 2020 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: Participants
Introduction Participants Ryan Greenawalt, CEO Tony Colucci, CFO Q4 2020 Earnings Presentation | 4
Slide 5: Agenda
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q4 2020 Earnings Presentation | 5
Slide 6: Q4 2020 Highlights
CEO Overview Q4 2020 Highlights Operating environment continued to improve from the prior quarter ▪ Consecutive quarters of improved customer demand and technician labor hours returning to Pre CV-19 levels. Reported strong net revenue growth & solid Adjusted EBITDA ▪ Net revenues increased 65.5% to
Slide 7: Recent Acquisition Highlights: Solidifying Expansion Strategy
CEO Overview Recent Acquisition Highlights: Solidifying Expansion Strategy Vantage Equipment - December 31, 2020 ▪ Since its founding in 2004, Vantage Equipment has offered a wide selection of high-quality products serving the heavy end municipal construction market. Vantage represents several heavy
Slide 8: Full Year 2020 Highlights
CEO Overview Full Year 2020 Highlights Labor utilization at pre-COVID levels ▪ Business was able to persevere in global pandemic through the dexterity of our business model and operational discipline. Record net revenue growth & Adjusted EBITDA ▪ Eclipsed $1 billion in revenue on a pro forma basis w
Slide 9: Business Opportunities
CEO Overview Business Opportunities Material handling / warehousing Construction ✓ E-Commerce growth ✓ Increase in industrial production ⚫ Higher volumes driven by shift in consumer buying behavior ⚫ Driven by rise of e-Commerce and associated need for logistics systems and other ⚫ Increased complex
Slide 10: 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 Select Equipment Offering: Construction New and Used Equipment & Design Ma
Slide 11: Key Stakeholder Relationships
CEO Overview Key Stakeholder Relationships Collaborative OEM Enhanced customer relationships 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 12: Expanding Footprint in Key Geographic Markets
CEO Overview Expanding Footprint in Key Geographic Markets Strategic Expansion ▪ 54 locations throughout Michigan, Indiana, Illinois, Massachusetts, Maine, New Hampshire, Connecticut, New York, Vermont, Florida, and Virginia ▪ Dealership platform with parts and service capabilities drives recurring
Slide 13: 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 ▪ 54 full-service ▪ Parts inventory of locations across 11 approx. $42 million states ▪ Electronically ▪ Approx. half of
Slide 14: Agenda
I. Introduction II. CEO Overview III.CFO Overview IV. Appendices Q4 2020 Earnings Presentation | 14
Slide 15: Q4 2020 Financial Summary
CFO Overview Q4 2020 Financial Summary Q4 2020 Financial Summary ▪ Continued to return to Pre CV-19 levels in Q4 2020 ▪ Second consecutive quarter of improvement in organic sales ▪ Field population increase of $173.3MM between all equipment sales categories (new/used/rental) ▪ $37.2MM sequential gro
Slide 16: Q4 2020 Financial Performance
CFO Overview Q4 2020 Financial Performance 2020 Quarter over Quarter Revenue / Gross Profit ($MM) Quarter over Quarter 13.6% 27.1% $280.4 $64.4 $56.7 ▪ 27.1% revenue growth $220.6 $192.1 $47.1 $46.3 ▪ Gross margin reduction to 23.0%; largely a result $180.5 of the sales mix in the quarter ▪ 34.0% or
Slide 17: Q4 2020 Adjusted EBITDA / Cash Flow
CFO Overview Q4 2020 Adjusted EBITDA / Cash Flow Adj. EBITDA1 / Adj. PF EBITDA1 Quarterly Year over Year Adjusted EBITDA / Cash Flow Q4 2019 Q4 2020 $28.9 (9.3%) Q4 2020 ▪ Adjusted EBITDA improved $5.3MM, primarily 27.5% $26.2 $24.6 related to impact of acquisitions on quarter-over- Q4 2019 $19.3 qu
Slide 18: Q4 2020 in Review
CFO Overview Q4 2020 in Review Q4 Results Show Business Model Flexibility ▪ $10.5MM reduction of organic rental fleet ▪ Fleet reduction and Organic Cash Flow yields deleveraging in Q4 20201 ▪ Organic Cash Flow conversion exceeds 100% in Q4 2020 Organic Cash Flow2 Q4 Organic Fleet Snapshot Q4 Organic
Slide 19: 2020 Year in Review - Key Performance Indicators
CFO Overview 2020 Year in Review - Key Performance Indicators Commentary Technician Labor Hours as % of Pre CV-19 Base Daily Median2 120% ▪ “Lost the top” of peak EBITDA quarters in 2020 110% ▪ “V-Shaped” recovery in labor demand since Q2 100% trough 90% ▪ Sequential improvement in Fleet Utilization
Slide 20: Proforma ALTG Financial Profile
CFO Overview Proforma ALTG Financial Profile 2019 2020 ($MM) 2017 2018 2019 PF+Acq1 PF+Acq1 Alta Revenue $345.5 $413.0 $557.4 $557.4 $873.6 Acquisitions Revenue - - - 374.2 154.2 Total Revenue $345.5 $413.0 $557.4 $931.6 $1,027.8 % Growth 20% 35% 67% 10% Alta Gross Profit $88.0 $110.1 $152.1 $152.1
Slide 21: Capital Structure / Credit Profile
CFO Overview Capital Structure / Credit Profile Credit Facility Capital Structure ($MM) 12/31/20 EV/Adj. PF EBITDA EV/Adj. PF ▪ Liquidity has held at ~$150MM since Feb 2020 Economic EBIT IPO through acquisitions, investment in rental Cash $1.2 fleet, and depressed cash flows due to CV-19 Debt:1 Line
Slide 22: Debt Maturity Runoff
CFO Overview Debt Maturity Runoff Flexible Debt Structure Commentary ▪ Ample liquidity and long-dated maturities provide financial flexibility ▪ Facilities committed for another 4.25 to 4.75 years ▪ Interest Rates: ABL L+175-225bps; Term L+800bps ▪ Light amortization (1.25% quarterly) of Term Note D
Slide 23: Industry and Company Specific Factors in a Downturn
CFO Overview Industry and Company Specific Factors in a Downturn Equipment Dealers and Financial Profile Through Economic Cycles Industry Industry In a During 2008 In a – 2009 2010+ CV-19 Downturn Recovery Recession ▪ Reduction in Revenue ▪ Revenue and EBITDA ▪ Revenue reduction of ▪ Alta takes adva
Slide 24: Agenda
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q4 2020 Earnings Presentation | 24
Slide 25: Adjusted EBITDA Reconciliation
Appendix A Adjusted EBITDA Reconciliation ($MM) 2017 2018 2019 Q4 2019 Q4 2020 2020 GAAP Net Income $5.9 $1.5 ($35.4) ($5.8) ($3.2) ($24.0) Depreciation and Amortization 31.5 37.1 50.1 15.2 23.4 75.0 Interest Expense 6.2 15.1 20.5 5.4 6.1 23.8 Income Tax Expense/(Benefit) - - - - (3.2) (6.6) EBITDA
Slide 26: Free Cash Flow Reconciliation
Appendix B Free Cash Flow Reconciliation ($MM) 2017 2018 2019 2020 GAAP Net Income $5.9 $1.5 ($35.4) ($24.0) Depreciation and Amortization 31.5 37.1 50.1 75.0 Interest Expense 6.2 15.1 20.5 23.8 Income Tax Expense/(Benefit) - - - (6.6) EBITDA [1] $43.6 $53.7 $35.2 $68.2 Adjustments, net (1.1) 0.8 33
Slide 27: Free Cash Flow Reconciliation – Capital Expenditure Detail
Appendix B (cont.) Free Cash Flow Reconciliation – Capital Expenditure Detail ($MM) 2017 2018 2019 2020 1,2 Replacement of Sold Rental Equipment, at Original Cost $40.1 $57.3 $56.9 $105.4 3 Capitalized Costs to Maintain Fleet (1.5% of Beg. OEC) 2.5 2.7 3.5 5.2 (Less) Rental Fleet Disposal Proceeds (