Slide 1: Custom Truck One Source 2nd Quarter 2024 Investor Presentation
Custom Truck One Source 2nd Quarter 2024 Investor Presentation August 1, 2024 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, Adjusted Gross Profit, Adjusted Gross Margin, EBITDA, Adjusted EBITDA an
Slide 3: CTOS at a Glance
CTOS at a Glance Leading Integrated Provider of $1.79B+ $376M Recent New Location Acquisition Specialty Equipment LTM Revenue LTM Adj. EBITDA1 New Location 2,500+ 10,200 • True “One-Stop-Shop” platform, Employees2 Fleet Units2 New Location 40 focused on rental and sales Recent Locations4 Acquisition
Slide 4: Q2 2024 – Sequential Growth, Solid TES Performance
Q2 2024 – Sequential Growth, Solid TES Performance • Continued strong demand from Infrastructure, Rail and Telecom end markets amid reduced, but stabilized, Transmission utilization: o Revenue of $423M o Adjusted Gross Profit(1) of $134M o Adjusted EBITDA(1) of $80M • TES business segment delivered
Slide 5: Unique Business Model = Strong Value Creation
Unique Business Model = Strong Value Creation Attractive end markets with long-term Infrastructure Bill and Inflation Reduction Act will secular growth drivers further supercharge end-market tailwinds Differentiated one-stop shop business model with strong Best-in-class asset level returns: Rental A
Slide 6: Favorable End-Market Dynamics
Favorable End-Market Dynamics Strong, Multi-Year End Market Tailwinds With Upside From 2021 Infrastructure Investment and Jobs Act T&D T&D Capex INFRASTRUCTURE Infrastructure Capex Rapidly increasing major ~$88B 10.5% Large and growing pent- up demand in North ~$268B 7.1% projects driven by need for
Slide 7: Infrastructure Spending Bills Extend End-Market Growth
Infrastructure Spending Bills Extend End-Market Growth Infrastructure Investment and Jobs Act Allocates ~$420 Billion of Funding to Our End Markets ~$210 Billion ~$79 Billion ~$66 Billion Roads, Bridges & Major Projects: $111B Grid: $28B Passenger & Freight Water Infrastructure: $48B Hydrogen R&D: $
Slide 8: Diverse, Highly Loyal Customer Base
Diverse, Highly Loyal Customer Base Highlights Diverse Customer Base • Serve more than 8,000 customers, with T&D Infrastructure / Telecom Rail the top 15 customers representing ~16% of revenue • No customer represents more than 3% of company revenue • Strong brand recognition and awareness among ind
Slide 9: 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 10: National Branch Network
National Branch Network National footprint provides flexibility in managing the rental fleet and superior customer service for rental and sales customers • 40 locations in the U.S. and Canada, with recently announced additions: • Casa Grande, AZ • Sacramento, CA • Salt Lake City, UT • Two acquisitio
Slide 11: Our ESG Strategy
Our ESG Strategy • We issued our inaugural ESG report last July • Our ESG plan is driven by our shared Purpose, Vision and Values • We are committed to staying at the forefront of technological innovations in our industry as the energy transition continues and adapting our products and services to a
Slide 12: Consolidated Operating Performance – Q2 2024
Consolidated Operating Performance – Q2 2024 ($ millions, except where indicated) Sequential quarterly growth; Q2 2024 operating results impacted by continued softness in Utility rental utilization Revenue Adjusted Gross Profit(1) $457 $423 $154 $33 $34 $134 $302 $286 $122 $103 Q2 23 Q2 24 Q2 23 Q2
Slide 13: Consistent Revenue and Adjusted EBITDA Growth
Consistent Revenue and Adjusted EBITDA Growth (1) ($ millions, except where indicated) Produced consistent Revenue and Adjusted EBITDA(1) growth since the closing of the combination with Nesco, resulting in Revenue and Adjusted EBITDA(1) CAGRs through the LTM period of 8% each LTM Revenue(2) LTM Adj
Slide 14: 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 15: Equipment Rental Solutions (ERS)
Equipment Rental Solutions (ERS) ($ millions, except where indicated) Q2 2024 showed sequential improvement on improved rental sales but results impacted by temporary slowdown in Transmission-related work; strong utilization in Infrastructure, Telecom and Rail end markets continues Revenue $169 • To
Slide 16: Equipment Rental Solutions (ERS)
Equipment Rental Solutions (ERS) ($ millions, except where indicated) Except for the Transmission end market, utilization remains historically strong, with ORY near record levels Utilization & Average OEC on Rent $1,400 86.3% • Utilization at just under 72% for Q2 ’24 90.0% 83.7% 82.5% 82.8% 83.8% 8
Slide 17: Truck & Equipment Sales (TES)
Truck & Equipment Sales (TES) ($ millions, except where indicated) Revenue up 6% in H1 2024 vs. H1 2023; Backlog continues to normalize, reflecting solid pace of sales and orders Revenue New Sales Backlog $1,000 12.6 14.0 12.2 11.7 11.8 $251 $248 $900 11.1 12.0 $800 $855 10.0 9.4 $864 $700 $779 8.3
Slide 18: Aftermarket Parts & Service (APS)
Aftermarket Parts & Service (APS) ($ millions, except where indicated) APS revenue flat in Q2 2024 vs. Q2 2023 – Impacted by lower Utility utilization Revenue Revenue $37 $37 • Total Revenue essentially flat in Q2 ‘24 vs. Q2 ‘23 $4 $2 o Parts & Services revenue up $2M in Q2 ‘24 vs. Q2 ‘23 o Rental r
Slide 19: Balance Sheet & Capex
Balance Sheet & Capex ($ millions, except where indicated) Continue to focus on de-levering through cash flow generation and Adjusted EBITDA growth Reduced leverage by more than 0.5x since the combination Strong available liquidity with significant suppressed availability under the ABL facility $382
Slide 20: Updated 2024 Outlook
Updated 2024 Outlook Updated 2023 2024 Outlook Growth Consolidated Revenue $1.865 billion $1.8 - $1.98 billion (3%) - 6% ERS $726 million $610 - $640 million (16%) - (12%) TES $990 million $1.05 - $1.19 billion 6% - 20% APS $149 million $140 - $150 million (6%) - 1% Adjusted EBITDA(1) $427 million $
Slide 21: Investment Highlights
Investment Highlights 11 Favorable End-Market Dynamics with Outstanding Secular Growth Drivers 22 Differentiated “One-Stop-Shop” Business Model 34 CTOS Well-Positioned for Continued Growth & Margin Expansion 45 Integration Drives Cost Efficiencies and Creates Scale Benefits Our Purpose: 56 Demonstra
Slide 22: Appendix
Appendix 22
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 (in $ millions) Net income (loss) $ 14 $ 12 $ 9 $ 16 $ (14) $ (24) Interest expense 22 24 24 25 25 27 Income tax expense (benefit) 1 1 — 5 (2) 3 Depreciation and amortization 52 55 55 57 56 58 EBITDA 89 92 88 102 65 63 Adjustments: N
Slide 24: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 (in $ millions) Revenue: Rental $ 118 $ 122 $ 118 $ 120 $ 106 $ 103 Equipment sales 301 302 283 367 273 286 Parts sales and services 33 33 33 35 33 34 Total revenue 452 457 434 522 411 423 Cost of Revenue: Cost of revenue 302 3
Slide 25: Supplemental Segment Data – ERS
Supplemental Segment Data – ERS Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 (in $ millions) Revenue: Rental revenue $ 114 $ 118 $ 115 $ 117 $ 103 $ 101 Equipment sales 92 51 52 68 33 38 Total revenue 206 169 167 185 136 138 Cost of revenue: Cost of rental revenue 29 31 30 28 30 29 Cost of equipment sales 71
Slide 26: Supplemental Segment Data – TES
Supplemental Segment Data – TES Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 (in $ millions) Equipment sales $ 209 $ 251 $ 231 $ 299 $ 240 $ 248 Cost of equipment sales 175 205 191 246 197 206 Gross profit $ 34 $ 46 $ 40 $ 53 $ 43 $ 42 Sum of individual line items may not equal subtotal and total amounts due
Slide 27: Supplemental Segment Data – APS
Supplemental Segment Data – APS Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 (in $ millions) Revenue: Rental revenue $ 5 $ 4 $ 3 $ 4 $ 3 $ 2 Parts sales and services 33 33 33 35 33 34 Total revenue 37 37 36 38 35 37 Cost of revenue: Cost of parts sales and services 27 26 26 27 26 29 Depreciation of rental eq
Slide 28: Leverage Ratio Calculation
Leverage Ratio Calculation Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 (in $ millions) Net Debt and Finance Leases (As of Period End): Current Maturities of Long-Term Debt $ 5 $ 4 $ 1 $ 8 $ 6 $ 4 Current Portion of Finance Leases 1 — — — — — Long-Term Debt, Net 1,394 1,425 1,426 1,487 1,492 1,528 Finance Le