Slide 1: FY 2019 Earnings Presentation
FY 2019 Earnings Presentation March 25, 2020
Slide 2: Agenda
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices FY 2019 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 ▪ Joined Alta in 2008; executed buy-out of other shareholders in 2017 recapitalization ▪ Serves on Hyster-Yale Dealer Council and Volvo Construction Equipment’s Dealer Advisory Council ▪ BA, University of Michigan; MBA, Broad School of Business, Michiga
Slide 5: CEO Overview
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices FY 2019 Earnings Presentation | 5
Slide 6: Recent Operating Highlights Support Growth Strategy
CEO Overview Recent Operating Highlights Support Growth Strategy Partner of Choice in a Consolidating Equipment Dealer Market – Strategic Acquisitions Scales Operations ▪ NITCO (5/1/19) – Geographic expansion to New England; designated as preferred further consolidator by Hyster-Yale ▪ Liftech (2/14
Slide 7: Recent Operating Highlights Support Growth Strategy (cont.)
CEO Overview Recent Operating Highlights Support Growth Strategy (cont.) Drive Aftermarket Parts Sales & Services Business ▪ Significantly increased field population to total fleet generates solid recurring revenue base ▪ Skilled labor workforce represents nearly half of our 1,700 employees in 43 lo
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 Maintenance and Rentals P
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 - 2018 Volvo dealer of the year
Slide 10: Expanding Footprint in Key Geographic Markets
CEO Overview Expanding Footprint in Key Geographic Markets Strategic Expansion Geographic Footprint ▪ 43 locations throughout Michigan, Indiana, Illinois, Current Locations/Territories Massachusetts, Maine, New Hampshire, Connecticut Other High Priority Potential Acquisition Territories New York, Ve
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 • 43 full-service • Parts inventory in locations across 10 excess of $31 million states • Electronically • Approx. half of Alta’s m
Slide 12: CFO Overview
I. Introduction II. CEO Overview III.CFO Overview IV. Appendices FY 2019 Earnings Presentation | 12
Slide 13: Transaction Overview
CFO Overview Transaction Overview Transaction Highlights Post-Transaction Ownership1 ▪ $135MM BRPM cash held in trust, $35MM PIPE, and $25MM B. Riley Principal Investments Forward Purchase Agreement to support the acquisition pipeline, provide liquidity to existing investors, pay transaction expense
Slide 14: 2019 Financial Summary
CFO Overview 2019 Financial Summary Financial Summary 2019 Summary ▪ Organic revenue growth in both sales and product support departments across all geographic APR’s, including NITCO region ▪ Total Revenues increased by 35.0%, or $144.4 million, to $557.4 million ▪ Including 12 months of NITCO contr
Slide 15: 2019 Financial Performance
CFO Overview 2019 Financial Performance Revenue / Gross Profit ($MM) Year over Year $557.4 ▪ Revenues increased 35.0%, or $144.4 million 35.0% $152.1 $413.0 38.1% ▪ Strong growth across all departments; highest $345.5 $110.1 growth in service $88.0 27.3% ▪ One acquisition completed: Northland Indust
Slide 16: 2019 Adjusted EBITDA / Cash Flow
CFO Overview 2019 Adjusted EBITDA / Cash Flow Adj. EBITDA1 / Economic EBIT ($MM)2 Year over Year Adjusted EBITDA / Cash Flow $94.4 ▪ Adjusted EBITDA was up 35.8%, or $19.5MM in comparison to a year ago. ▪ Acquisition in May 2019; 2019 Adjusted $74.0 EBITDA accounts for an additional 4 months of pre-
Slide 17: Cash Flow Profile
CFO Overview Cash Flow Profile ($MM) 2017 2018 2019PF 2019PF+Acq Alta Revenue $345.5 $413.0 $557.4 $602.8 Acquisitions Revenue 1 - - 45.4 219.4 Total Revenue $345.5 $413.0 $602.8 $822.2 % Growth Excluding Acquisitions 20% 35% 8% Alta Gross Profit $88.0 $110.1 $152.1 $170.1 % margin 25% 27% 27% 28% 1
Slide 18: Capital Structure / Credit Profile – At Close
CFO Overview Capital Structure / Credit Profile – At Close Capital Structure1 ($MM, except per share) Structural Advantages ($MM, Except Per Share) ▪ Closing capital structure includes $127MM of undrawn New Asset-Based Loan (ABL) $115.0 2 ABL capacity New Term Loan 155.0 ▪ Company to draw ABL to fun
Slide 19: Debt Maturity Runoff
CFO Overview Debt Maturity Runoff Flexible Debt Structure Commentary ▪ Ample liquidity and long-dated maturities provide financial flexibility ▪ Facilities committed for 5 to 5.5 years ▪ Interest Rates: ABL L+175-225bps; Term L+800bps ▪ Light amortization (1.25% quarterly) of Term Note ▪ Closing hea
Slide 20: Industry and Company Specific Factors in a Downturn
CFO Overview Industry and Company Specific Factors in a Downturn Equipment Dealers and Financial Profile Through Economic Cycles Industry Industry In a Downturn During 2008 – In a Recovery 2010+ 2009 Recession • Reduction in Revenue • Revenue and EBITDA • Revenue reduction of • Alta takes advantage
Slide 21: Long Term Capital Allocation
CFO Overview Capital Allocation Leverage Utilization Returns to Stockholders NYSE:ALTG ▪ Target leverage range 2.5x-3.5x ▪ Continued organic investments to support ▪ Net leverage of 2.9x at close growth and boost productivity / efficiency ▪ Credit ratings of BB- by Egan Jones ▪ Add branches strategi
Slide 22: Appendices
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices FY 2019 Earnings Presentation | 22
Slide 23: Adjusted EBITDA Reconciliation
Appendix A Adjusted EBITDA Reconciliation ($MM) 2017 2018 2019 GAAP Net Income $5.9 $1.5 ($35.4) Depreciation and Amortization 31.5 37.1 50.1 Interest Expense 6.2 15.1 20.5 EBITDA [1] $43.6 $53.7 $35.2 Adjustments: PF EBITDA - Northland 1/1/19 - 4/30/19 1 - - 5.6 Change in Fair Value of Warrants2 -
Slide 24: Free Cash Flow Reconciliation
Appendix B Free Cash Flow Reconciliation ($MM) 2017 2018 2019 GAAP Net Income $5.9 $1.5 ($35.4) Depreciation and Amortization 31.5 37.1 50.1 Interest Expense 6.2 15.1 20.5 Income Tax Expense - - - EBITDA [1] $43.6 $53.7 $35.2 2019PF Adjustments, net (1.1) 0.8 38.8 Adjusted EBITDA [1] $42.5 $54.5 $74
Slide 25: Free Cash Flow Reconciliation – Capital Expenditure Detail
Appendix B (cont.) Free Cash Flow Reconciliation – Capital Expenditure Detail ($MM) 2017 2018 2019PF Replacement of Sold Rental Equipment, at Original Cost 1 $40.1 $57.3 $67.5 Capitalized Costs to Maintain Fleet (1.5% of Beg. OEC) 2 2.5 2.7 3.6 (Less) Rental Fleet Disposal Proceeds (27.1) (34.3) (49