Custom Truck One Source, Inc. · NYSE:CTOS
Custom Truck One Source — Q3 2021 Earnings Presentation
25 slides from Custom Truck One Source's earnings presentation, Nov 9, 2021
Slide 1: Custom Truck One Source 3rd Quarter 2021 Investor Presentation
Custom Truck One Source 3rd Quarter 2021 Investor Presentation November 9, 2021 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: Strong Q3 2021 Financial Results
Strong Q3 2021 Financial Results • Delivered record quarterly Gross Profit and Adj. EBITDA despite supply chain pressures • Continued strong YoY revenue growth for the quarter • Results reflect continued robust end-market fundamentals driving increased demand in all three business segments • Strong
Slide 4: Unique Business Model = Strong Value Creation
Unique Business Model = Strong Value Creation Attractive end markets with long-term secular Attractive end markets with long-term secular Stable markets with GDP++ growth potential growth drivers growth and drivers pricing power growth drivers and pricing power Infrastructure Diversified revenue Bil
Slide 5: Favorable End-Market Dynamics
Favorable End-Market Dynamics Strong, Multi-Year End Market Tailwinds With Upside From New Infrastructure Bill T&D T&D Capex TELECOM Telecom Capex Rapidly increasing major projects driven by need for ~$70B 6.8% Build-out and implementation of 5G ~$80B 3.0% grid upgrades and renewable Annual Total Sp
Slide 6: Favorable End-Market Dynamics: Large Addressable Market
Favorable End-Market Dynamics 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
Slide 7: Differentiated “One-Stop-Shop” Business Model
Differentiated “One-Stop-Shop” Business Model Integrated Production Capabilities and Rental+Sales Model Provided Unique Value Proposition Integrated Production Capabilities One-Stop-Shop Value Proposition Unit Economic Advantages Multiple Revenue Streams Strong, Consistent Returns Customer Benefits
Slide 8: National Branch Network
National Branch Network National footprint provides flexibility in managing the rental fleet and superior customer service for rental and sales customers • 35 locations and 350 of technicians around the country • 85 mobile technicians capable of being deployed across the country • Opportunity remain
Slide 9: CTOS / Nesco Integration & Synergy Update
CTOS / Nesco Integration & Synergy Update Integration activities are ahead of plan and the synergy opportunity is greater than anticipated Run-Rate Annual Cost Synergies Year 1 Run-Rate Synergies $55MM $50MM $40MM $25MM Original Current Original Current • Service and Production Operations, Procureme
Slide 10: Our ESG Strategy for 2022 & Beyond
Our ESG Strategy for 2022 & Beyond • As we head into 2022 and complete the integration of the businesses, we will increase our focus on Environmental, Social and Governance (ESG) • The Board is dedicated to, and actively involved in, developing our ESG strategy • Our ESG plan will: • Build upon the
Slide 11: Consolidated Pro Forma Operating Performance
Consolidated Pro Forma Operating Performance(1)(2) Revenue and Adjusted EBITDA grew 18% and 20%, respectively Pro Forma Revenue Pro Forma Adjusted Gross Profit $1,200 Rental $1,127 $400 Equipment Sales $337 Parts & Service $951 $350 $1,000 $299 $300 $800 $250 $729 $600 $555 $200 $357 $150 $123 $400
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) Revenue up 3.6% vs Q2 2021, driven by improved utilization Revenue & Adjusted Gross Profit1 • ERS performance continues to perform at a high level, with utilization $140 $132 Rental holding strong at 81% and OEC on rent at record levels $128 Rental Asset Sales $120 $
Slide 14: Truck & Equipment Sales (TES)
Truck & Equipment Sales (TES) New sales order backlog grew by 52% in Q3 Revenue Adjusted Gross Profit1 • Revenue declined $25 million in Q3 due to typical seasonal trends $30 and greater allocation of inventory to support rental fleet growth $250 • New sales backlog grew by $115 million, or 52%, in
Slide 15: Aftermarket Parts & Service (APS)
Aftermarket Parts & Service (APS) APS margins improved 850 bps to 29%, driven by strong improvement in rental activities Revenue Adjusted Gross Profit1 • Q3 results reflect focus on improving cost structure and operational $40 Parts & Services Sales $12 Rental execution of the aftermarket rental bus
Slide 16: Balance Sheet & Capex
Balance Sheet & Capex Continue to strengthen the balance sheet and demonstrated ability to de-lever quickly through cash flow generation and Adjusted EBITDA growth Improved Leverage by 0.3x since close Availability liquidity up $44M since close 5.0x $450 $400 $382 4.5x $358 $27 $350 $314 $21 4.0x $3
Slide 17: Summary
Summary 11 Favorable End-Market Dynamics with Secular Growth Drivers 22 Differentiated “One-Stop-Shop” Business Model 34 CTOS Well-Positioned for Growth & Margin Expansion 45 Monetizing Synergy Opportunity from Merger CTOS is Well Positioned to Deliver 56 Demonstrated Performance and Financial Profi
Slide 18: Appendix
Appendix 18
Slide 19: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Actual Pro Forma Three Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Months September 30, September 30, September 30, September 30, Ended June 30, (in $ millions) 2021 2020 2021 2020 2021 2020 2021 2020 2021 Net income (loss) $ (129) $ 15 $
Slide 20: Adjusted Gross Profit Reconciliation
Adjusted Gross Profit Reconciliation Actual Pro Forma Three Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Months September 30, September 30, September 30, September 30, Ended June 30, (in $ millions) 2021 2020 2021 2020 2021 2020 2021 2020 2021 Revenue Rental revenue $ 99
Slide 21: Supplementary Segment Data — ERS
Supplementary Segment Data — ERS Three Nine Three Months Months Months Ended Ended Ended Three Months Ended September Nine Months Ended September March 31, September 30, 2020 30, 2021 September 30, 2020 30, 2021 2021 Nesco Custom Nesco Custom Custom (in $ millions) Holdings Truck LP CTOS Inc. Holdin
Slide 22: Supplementary Segment Data — TES
Supplementary Segment Data — TES Three Nine Three Months Months Months Ended Ended Ended Three Months Ended September Nine Months Ended September March 31, September 30, 2020 30, 2021 September 30, 2020 30, 2021 2021 Nesco Custom Nesco Custom Custom (in $ millions) Holdings Truck LP CTOS Inc. Holdin
Slide 23: Supplementary Segment Data — APS
Supplementary Segment Data — APS Three Nine Three Months Months Months Ended Ended Ended Three Months Ended September Nine Months Ended September March 31, September 30, 2020 30, 2021 September 30, 2020 30, 2021 2021 Nesco Custom Nesco Custom Custom (in $ millions) Holdings Truck LP CTOS Inc. Holdin
Slide 24: Net Capex Reconciliation
Net Capex Reconciliation Actual Pro Forma Custom Truck LP Pro Forma CTOS Inc. Three Combined Three Months Ended Nine Months Ended Nine Months Months Nine Months September 30, September 30, Ended Ended Ended September March 31, September (in $ millions) 2020 2021 2020 2021 30, 2021 2021 30, 2021 Purc
Slide 25: Leverage Ratio Calculation
Leverage Ratio Calculation June 30, September 30, (in $ millions) 2021 2021 (As of Period End) Current Maturities of Long-Term Debt $ 6 $ 5 Current Portion of Finance Leases 5 4 Long-Term Debt, Net 1,304 1,324 Finance Leases 7 5 Add: Deferred Financing Costs 35 34 Total Debt and Finance Leases 1,358
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