Alta Equipment Group Inc. · NYSE:ALTG
Alta Equipment — Q2 2022 Earnings Presentation
33 slides from Alta Equipment's earnings presentation, Aug 9, 2022
Slide 1: Earnings Presentation Second Quarter 2022
EARNINGS PRESENTATION SECOND QUARTER 2022 August 9, 2022
Slide 2: Legal Disclaimers
LEGAL DI SCLAIMERS 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 c
Slide 3: Agenda & Introduction
AG ENDA & INTRODUCTIO N Agenda INTRODUCTION CEO Overview Executive Officers: Q2 2022 Highlights Ryan Greenawalt, CEO End User Market Conditions & Tony Colucci, CFO Growth Strategy and Execution CFO Overview Q2 2022 Results Capital Structure Update Capital Allocation Overview 2022 Fleet
Slide 4: CEO Overview
CEO OVERVIEW Ryan Greenawalt Earnings Presentation | Second Quarter 2022 | August 9, 2022 4
Slide 5: Q2 2022 Highlights
CEO O VERVI EW Net Revenue Increased 38.9% to $406.5 million over the year ago quarter with 24.1% organic growth Construction and Material Handling Revenue Of $271.0 million and $135.5, respectfully, up from $181.1 million and $111.6 million a year ago; product support revenue also increased $23.5 m
Slide 6: End User Market Conditions
CEO O VERVI EW Visibility Remains Solid and Customer Sentiment is High across all our end-user markets and regions End User Key Industry Indicators including the Architecture Billings Index (ABI) and Dodge Momentum Index (DMI) Market continue to signal strong construction activity Conditions: Strong
Slide 7: Growth Strategy and Execution
CEO O VERVI EW M&A Pipeline Remains Active for Accretive Deals that compliment our business and increase long-term shareholder value Growth Expanding Material Handling Business Strategy and by growing complementary material handling portfolio lines of integrated warehousing systems, dock and door, a
Slide 8: Successful Acquisition Strategy Post IPO (2020-2022)
CEO O VERVI EW Successful Acquisition Strategy Post IPO (2020-2022) Dealership Target Financial Revenue: $47MM Revenue: $35MM Revenue: $65MM Revenue: $19MM Revenue: $41MM Revenue: $33MM Revenue: $28MM Revenue: $50MM Highlights EBITDA: $9.4MM EBITDA: $3.1MM EBITDA: $6.5MM EBITDA: $3.2MM EBITDA: $4.7M
Slide 9: Emerging Markets: Alta Commercial EV Segment
CEO O VERVI EW Emerging Markets: Alta Commercial EV Segment August 10, 2021 – Alta signs dealer agreement with Nikola Corporation Alta’s Exclusive Trade Area (NASDAQ: NKLA), a global leader in zero-emissions transportation and energy infrastructure solutions, to supply and service Class 8 battery-
Slide 10: CFO Overview
CFO OVERVIEW Tony Colucci Earnings Presentation | Second Quarter 2022 | August 9, 2022 10
Slide 11: Q2 2022 Financial Summary
CFO O VERVIEW Q2 2022 Financial Summary Quarterly Comparisons Quarterly Comparisons Adjusted EBITDA of $41.4MM versus Construction Segment Material Handling Segment $28.5MM in Q2 2021, a 45.3% increase Revenue growth of $89.9MM, or 49.6%, from Revenue growth of $23.9MM, or 21.4%, from Adjusted P
Slide 12: Q2 2022 Financial Performance
CFO O VERVIEW Q2 2022 Financial Performance QUARTER-OVER-QUARTER Total Revenue Q2 2022 Quarter over Quarter Revenue / Gross Profit Revenue grew 38.9% to $406.5MM ($MM) Organic revenue grew $70.6MM, or 24.1% Gross profit grew 37.6% to $105.8MM 406.5 $105.8 Construction Segment $76.9 Construct
Slide 13: Q2 2022 Adjusted EBITDA / Economic EBIT
CFO O VERVIEW Q2 2022 Adjusted EBITDA / Economic EBIT Adj. EBITDA1 / Adj. PF EBITDA1 Adj. PF EBITDA1 / PF Economic EBIT ($MM)2 Q2 2022 Q2 2022 $41.4 $41.4 $146.3 $134.1 Q2 2021 Q2 2021 $32.3 $114.1 $28.5 $98.9 $87.6 $76.4 Conversion % 67.0% 65.3% 67.6% Adjusted EBITDA Adjusted PF EBITDA 2020 PF 2021
Slide 14: Alta Equipment Group - Proforma Financial Profile
CFO O VERVIEW Alta Equipment Group - Proforma Financial Profile 2020 PF 2021 YTD Q2 2021 YTD Q2 2022 TTM ($MM) 2020 2021 +Acq1 PF + Acq1 PF+Acq1 PF+Acq1 June 30, 2022 Alta Revenue $873.6 $1,212.8 $873.6 $1,212.8 $561.5 $738.2 $1,389.5 Acquisitions Revenue - - 306.3 134.0 72.6 - 61.4 Total Revenue $8
Slide 15: Capital Structure / Credit Profile
CFO O VERVIEW Capital Structure / Credit Profile Balance Sheet Strength / Liquidity5 Capital Structure ($MM) EV/Adj. PF EV/Adj. EBITDA 700,000 $617MM Approx. $273MM June 30, 2022 $ Amount EBITDA Guidance 600,000 of Unsuppressed Availability at Q2 Cash $0.5 500,000 Debt:1 $405MM 400,000 Suppressed Li
Slide 16: Debt Structure and Maturity Runoff
CFO O VERVIEW Debt Structure and Maturity Runoff Debt Maturity ABL HYB $450MM Drawn $400MM Undrawn $350MM $315MM $300MM $250MM $200MM $150MM $126MM $100MM $50MM $0MM $0MM $0MM $0MM 2022 2023* 2024 12/31/2025 4/15/2026 ABL HIGH-YIELD BOND (HYB) $430MM facility committed for another 3.5 years1 ~4
Slide 17: Capital Allocation Overview
CFO O VERVIEW Capital Allocation Overview STRATEGIC M&A ORGANIC GROWTH DIVIDEND Excess CAPITAL EXCESS Capital Deal pipeline remains active, Initiate share repurchase Devoted to same-store $7.5MM annual dividend program $12.5MM in July 2022, accretive, and actionable expansion, as YTD organic affordi
Slide 18: Rental Fleet and Free Cash Flow from Operations
CFO O VERVIEW Rental Fleet and Free Cash Flow from Operations Rental Cap-Ex Summary ($MM)1 +9% YOY +10% YOY Improvement Six Months Six Months Physical Ended June Ended June in rental utilization 5 2020 2021 30, 2021 30, 2022 rates 5 Gross Rental Capex $159.4 $207.6 $109.1 $100.2 OEC of Rental Fleet
Slide 19: Q2 2022 – Increasing FY 2022 Guidance
CFO O VERVIEW Q2 2022 – Increasing FY 2022 Guidance FY 2022 OUTLOOK ($ IN MM) ADJUSTED EBITDA: FY 2022 From: GUIDANCE $137.0-$142.0 To: $147.0-$152.0 (Net of New Equipment Floorplan Interest) 2022 GUIDANCE COMMENTARY: HIGHLIGHTS/RATIONALE Outperforming expectations from the end of 2021 primarily o
Slide 20: Performance in Supply Chain Constrained Market
CFO O VERVIEW Performance in Supply Chain Constrained Market Department New Equipment Sales Used Equipment Sales Rental Equipment Sales Rent-to Rent Parts / Service Supply Chain Constrained Yes Neutral No No No Impact on Low Medium Medium High High EBITDA Commentary Supply chain constraints cause Su
Slide 21: Performance in Inflationary Environment
CFO O VERVIEW Performance in Inflationary Environment Department New Equipment Sales Used Equipment Sales Rental Equipment Sales Rent-to Rent Parts / Service Replacement Capex Impact on EBITDA Neutral Neutral Positive Positive Positive Negative Commentary Increases in input pricing Increases in trad
Slide 22: Thank You
THANK YOU (NYSE:ALTG) Investor Relations Contact: Kevin Inda SCR Partners M: (225) 772-0254 E: Kevin@scr-ir.com Earnings Presentation | Second Quarter 2022 | August 9, 2022 22
Slide 23: Appendices: About the Company
APPENDICES APPENDICES About the Company About the Company Earnings Presentation | Second Quarter 2022 | August 9, 2022 23
Slide 24: Company Overview
THE COMPANY Company Overview BEST-IN-CLASS BRAND PORTFOLIO COMPREHENSIVE SERVICE OFFERING BROAD END Creates Cross-Selling Opportunities Across Heavy Equipment and Material Handling Products MARKET COVERAGE Select Equipment Offering: Construction Services Material Handling & Warehousing Solutions H
Slide 25: Key Stakeholder Relationships
THE COMPANY Key Stakeholder Relationships Collaborative OEM Relationships Consistently acknowledged as a top dealership partner by OEMs Consistent market share outperformer by region and product Enhanced Customer Relationships Preferred consolidator of key OEMs Provides equipment solutions t
Slide 26: Expanding Footprint in Key Geographic Markets
THE COMPANY Expanding Footprint in Key Geographic Markets Strategic Expansion 67 locations throughout Michigan, Significant investment made in Indiana, Ohio, Illinois, Massachusetts, scalable infrastructure Maine, New Hampshire, Connecticut, New York, Vermont, Florida, Virginia, Complementary offeri
Slide 27: Product Support Overview
THE COMPANY Product Support Overview Product We have capabilities to support all makes Support and models of Construction and Material Solutions Handling equipment. SERVICE 67 full-service locations across 12 states and 2 provinces Approx. half of Alta’s ~2,500 employees are factory trained and
Slide 28: M&A Financing Model – 2021 Acquisitions
CFO O VERVIEW M&A Financing Model – 2021 Acquisitions CAPITAL STRUCTURE INFLUENCE ON CORPORATE M&A STRATEGY ALTG’s ABL-based capital structure alongside operating cash flows provide a framework for continuation of acquisition growth Operating cash flows applied against the ABL revolver naturally
Slide 29: Unaudited Reconciliation of Non-GAAP Financial Measures
APPENDICES Unaudited Reconciliation of Non-GAAP Financial Measures Earnings Presentation | Second Quarter 2022 | August 9, 2022 29
Slide 30: Adjusted EBITDA Reconciliation
APPENDIX A Adjusted EBITDA Reconciliation Six Mos. Ended Six Mos. Ended TTM ($MM) 2019 2020 2021 Q2 2021 Q2 2022 June 30, 2021 June 30, 2022 June 30, 2022 Net Income/(Loss) Available to Common Shareholders $(35.4) $(24.0) $(23.4) $(15.8) $5.4 $(21.5) $3.4 $1.5 Depreciation and Amortization 50.1 75.0
Slide 31: Free Cash Flow from Operations - GAAP Reconciliation
APPENDIX B Free Cash Flow from Operations - GAAP Reconciliation Six Mos. Ended Six Mos. Ended ($MM) 2020 2021 June 30, 2021 June 30, 2022 Net cash provided by operating activities per GAAP $(35.0) $30.7 $10.2 $3.4 M&A Financing Adjustments for non-recurring itemsModel 1 1.7 4.7 2.5 1.3 Transfers int
Slide 32: Economic EBIT – GAAP Reconciliation
APPENDIX C Economic EBIT – GAAP Reconciliation Six Mos. Ended Six Mos. Ended ($MM) 2019 2020 2021 June 30, 2021 June 30, 2022 Net Income/(Loss) Available to Common Shareholders per GAAP $(35.4) $(24.0) $(23.4) $(21.5) $3.4 Depreciation and Amortization 50.1 75.0 95.8 45.3 51.5 Interest Expense 20.5
Slide 33: Unlevered FCF before/after Growth Investments Reconciliation
APPENDIX D Unlevered FCF before/after Growth Investments Reconciliation Six Mos. Ended Six Mos. Ended ($MM) 2019 2020 2021 June 30, 2021 June 30, 2022 Economic EBIT [1] $51.0 $60.0 $78.6 $31.0 $47.9 Tax (Expense)/Benefit - 6.6 (3.6) (0.5) (0.5) Unlevered FCF Before Growth Related Investments [1] $51