Alta Equipment Group Inc. · NYSE:ALTG
Alta Equipment — Q3 2020 Earnings Presentation
25 slides from Alta Equipment's earnings presentation, Nov 12, 2020
Slide 1: Q3 2020 Earnings Presentation
Q3 2020 Earnings Presentation November 12, 2020
Slide 2: Agenda
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q3 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 1996. 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 Q3 2020 Earnings Presentation | 4
Slide 5: CEO Overview
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q3 2020 Earnings Presentation | 5
Slide 6: Q3 2020 Highlights: Strong Operating Performance and Financial Results
CEO Overview Q3 2020 Highlights: Strong Operating Performance and Financial Results Business activity has recovered & is at near full capacity with increased customer demand ▪ Strong recovery from lows of the second quarter, operating near full capacity and Pre CV- 19 levels Reported strong net reve
Slide 7: Recent Acquisition Highlights: Expansion Strategy Playing Out
CEO Overview Recent Acquisition Highlights: Expansion Strategy Playing Out Martin Implement Sales – September 1, 2020 ▪ Martin was a privately held premium equipment distributor with three branches in the Chicago metro area. Martin has an expansive range of new and used equipment available for sale
Slide 8: Company Overview
CEO Overview Company Overview Best-in-Class Brand Portfolio Creates Cross-Selling Opportunities Comprehensive Service Offering Across Heavy Equipment and Industrial Products Select Equipment Offering: Industrial Select Equipment Offering: Construction New and Used Equipment & Design Maintenance and
Slide 9: Key Stakeholder Relationships
CEO Overview Key Stakeholder Relationships Collaborative OEM Relationships Skilled Work Force ▪ Alta is consistently acknowledged by OEMs as a top ▪ Skilled technicians are essential to providing dealership partner aftermarket parts and service that customers require - 2019 Leader in Market Share –
Slide 10: Expanding Footprint in Key Geographic Markets
CEO Overview Expanding Footprint in Key Geographic Markets Strategic Expansion ▪ 51 locations throughout Michigan, Indiana, Illinois, Current Locations/Territories Massachusetts, Maine, New Hampshire, Connecticut, New York, Vermont, Florida, and Virginia ▪ Dealership platform with parts and service
Slide 11: Aftermarket Overview
CEO Overview Aftermarket Overview Product Support Solutions We have capabilities to support all makes and models of construction and industrial equipment. SERVICE PARTS ▪ 51 full-service ▪ Parts inventory of locations across 11 approx. $37 million states ▪ Electronically ▪ Approx. half of Alta’s man
Slide 12: CFO Overview
I. Introduction II. CEO Overview III.CFO Overview IV. Appendices Q3 2020 Earnings Presentation | 12
Slide 13: Q3 2020 Financial Summary
CFO Overview Q3 2020 Financial Summary Q3 2020 Financial Summary ▪ Dealership-related activity returned to near Pre CV-19 levels in Q3 2020 versus Q2 2020 ▪ $11MM quarter over quarter growth in organic parts and service revenue ▪ 19% quarter over quarter growth in high margin departments ▪ Material
Slide 14: CV-19 Update: Year-to-date Service Hours
CFO Overview CV-19 Update: Year-to-date Service Hours Technician Labor Hours as % of Pre CV-19 Base Daily Median 120% Pre CV-19 110% 3/18: Big Three Automakers Initiate Temporary Factory Closures across US 100% 3/24: MI, IN & MA initiates Shelter In Place ordinance 3/21: IL initiates Shelter 90% in
Slide 15: Industry and Company Specific Factors in a Downturn
CFO Overview Industry and Company Specific Factors in a Downturn Equipment Dealers and Financial Profile Through Economic Cycles Industry Industry In a During 2008 In a – 2009 2010+ CV-19 Downturn Recovery Recession ▪ Reduction in Revenue ▪ Revenue and EBITDA ▪ Revenue reduction of ▪ Alta takes adva
Slide 16: Q3 2020 Financial Performance
CFO Overview Q3 2020 Financial Performance 2020 Quarter over Quarter Revenue / Gross Profit ($MM) Quarter over Quarter 22.2% $220.6 ▪ 12.9% revenue growth in Q3 2020 from Q2 2020 20.4% $56.7 $180.5 $192.1 ▪ Gross margin improvement to 27.5% in Q3 2020 $47.1 $46.3 from 24.1% in Q2 2020 ▪ $11.0MM of q
Slide 17: Q3 2020 Adjusted EBITDA / Cash Flow
CFO Overview Q3 2020 Adjusted EBITDA / Cash Flow Adj. EBITDA1 / Adj. PF EBITDA1 Quarterly Year over Year Q3 2019 Adjusted EBITDA / Cash Flow $29.0 Q3 2019 Q3 2020 Q3 2020 ▪ Adjusted EBITDA improved $0.2MM versus Q3’19 $21.7 0.9% $21.9 $22.4 (22.8%) ▪ Increase primarily related to acquisitions’ relat
Slide 18: Proforma ALTG Financial Profile
CFO Overview Proforma ALTG Financial Profile LTM 2019 YTD 3Q 2019 YTD 3Q 2020 9/30/2020 ($MM) 2017 2018 2019 PF+Acq1 PF+Acq1 PF+Acq1 PF+Acq1 Alta Revenue $345.5 $413.0 $557.4 $557.4 $388.0 $593.2 $762.6 Acquisitions Revenue - - - 374.2 292.0 85.6 167.8 Total Revenue $345.5 $413.0 $557.4 $931.6 $680.
Slide 19: Capital Allocation / Liquidity Bridge
CFO Overview Capital Allocation / Liquidity Bridge Adjusted EBITDA / Cash Flow Key Takeaways ▪ Alta maintained liquidity of $153.7MM3 through Q3 2020, while also: ▪ Acquiring HILO and Martin ▪ Increase in organic rental fleet acquisition cost versus Q2 2020 ($361MM in Q2 versus $374MM in Q3) ▪ Physi
Slide 20: Capital Structure / Credit Profile
CFO Overview Capital Structure / Credit Profile Credit Facility Capital Structure ($MM) 9/30/20 EV/LTM Adj. PF EV/LTM ▪ Liquidity has held at ~$150MM since Feb 2020 EBITDA Economic EBIT IPO through acquisitions, investment in rental Cash $0.1 fleet, and depressed cash flows due to CV-19 Debt:1 ▪ As
Slide 21: Debt Maturity Runoff
CFO Overview Debt Maturity Runoff Flexible Debt Structure Commentary ▪ Ample liquidity and long-dated maturities provide financial flexibility ▪ Facilities committed for another 4.5 to 5 years ▪ Interest Rates: ABL L+175-225bps; Term L+800bps ▪ Light amortization (1.25% quarterly) of Term Note Debt
Slide 22: Appendices
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q3 2020 Earnings Presentation | 22
Slide 23: Adjusted EBITDA Reconciliation
Appendix A Adjusted EBITDA Reconciliation 9 Mos. Ended 9 Mos. Ended LTM ($MM) 2017 2018 2019 Q3 2019 Q3 2020 September 30, September 30, 9/30/20 2019 2020 GAAP Net Income $5.9 $1.5 ($35.4) ($27.4) $0.3 ($29.6) ($20.8) ($26.6) Depreciation and Amortization 31.5 37.1 50.1 14.4 21.0 34.9 51.6 66.8 Inte
Slide 24: Free Cash Flow Reconciliation
Appendix B Free Cash Flow Reconciliation 9 Mos. Ended 9 Mos. Ended LTM ($MM) 2017 2018 2019 September 30, September 30, 9/30/20 2019 2020 GAAP Net Income $5.9 $1.5 ($35.4) ($29.6) ($20.8) ($26.6) Depreciation and Amortization 31.5 37.1 50.1 34.9 51.6 66.8 Interest Expense 6.2 15.1 20.5 15.1 17.7 23.
Slide 25: Free Cash Flow Reconciliation – Capital Expenditure Detail
Appendix B (cont.) Free Cash Flow Reconciliation – Capital Expenditure Detail 9 Mos. Ended 9 Mos. Ended LTM ($MM) 2017 2018 2019 September 30, September 30, 9/30/20 2019 2020 Replacement of Sold Rental Equipment, at Original Cost1,2 $40.1 $57.3 $56.9 $38.2 $60.0 $78.7 3 Capitalized Costs to Maintain