First Quarter Financial Highlights:
(comparisons are year over year)
- Net revenues increased 23.4% year over year to $331.7
million
- Construction and Material Handling revenue of $206.1 million
and $125.6 million, respectively
- Product Support revenue increased $21.5 million year over year
to $101.6 million
- Record first quarter financial results primarily due to strong
demand for equipment and product support growth
- Net loss of $(2.0) million available to common shareholders
compared to a loss of $(5.7) million in 2021
- Adjusted basic and diluted net loss per share* of $(0.02)
compared to $(0.14) in 2021
- Adjusted EBITDA* grew 30.4% to $30.0 million, compared to $23.0
million in 2021
Alta Equipment Group Inc. (“Alta” or the “Company”) (NYSE:
ALTG), a leading provider of premium material handling and
construction equipment and related services, today announced
financial results for the first quarter ended March 31, 2022.
CEO Comment:
Ryan Greenawalt, Chief Executive Officer of Alta, said, “We are
very pleased with our solid start to 2022 and the current momentum
in our business. Total revenues increased 23.4%, or $62.9 million,
to $331.7 million in the first quarter from a year ago. We remain
extremely focused on operational excellence and as a result,
delivered both solid organic and acquisition-related revenue
growth. Consistent with our fourth quarter results, our
Construction and Material Handling segments continued to benefit
from the strong tailwinds in our end-user markets, producing
significant year-over-year revenue growth on a combined basis,
despite ongoing supply chain issues. Our flexible business model,
increased product support revenues driven by higher new and used
equipment sales, and expansion into higher margin specialty
segments will continue to have a positive impact on future
profitability.”
Discussing the current market environment, Mr. Greenawalt noted,
“Customer sentiment, project activity and visibility, remains
extremely positive across all our operating markets. Demand for new
and used equipment and rental equipment has eclipsed pre-pandemic
peak levels. As an example, our organic physical rental fleet
utilization was up more than 5 percentage points from a year ago
and rates on rental equipment continued to strengthen in the first
quarter. We are operating in a fundamentally robust expansion cycle
and all the industry indicators are extremely encouraging for the
balance of the year. While the timing is uncertain, the recently
passed Bipartisan Infrastructure bill should also be an incremental
benefit to our business.”
Mr. Greenawalt, concluded, “Our 2022 growth strategy remains
very much intact, and we have a solid pipeline of M&A
opportunities we are evaluating that are consistent with our
previous deals. Our ongoing goal is to expand our presence in
existing key markets, add broader high-margin capabilities to new
regions and expand into new markets which offer substantial growth
opportunities. We have a strong balance sheet to support our
expansion initiatives. Lastly, our entrance into the commercial
electric vehicle industry and partnership with Nikola is
progressing very well. While this initiative won’t be a material
contributor to our results in 2022, it puts us in an excellent
position to be an EV truck market leader in the densest truck
markets in the country.”
Three Months Ended
March 31,
Increase (Decrease)
2022
2021
2022 versus 2021
Revenues:
New and used equipment sales
$
151.6
$
123.8
$
27.8
22.5
%
Parts sales
53.4
41.4
12.0
29.0
%
Service revenue
48.2
38.7
9.5
24.5
%
Rental revenue
37.7
33.1
4.6
13.9
%
Rental equipment sales
40.8
31.8
9.0
28.3
%
Net revenues
$
331.7
$
268.8
$
62.9
23.4
%
Cost of revenues:
New and used equipment sales
$
123.9
$
106.5
$
17.4
16.3
%
Parts sales
36.7
28.7
8.0
27.9
%
Service revenue
20.1
14.5
5.6
38.6
%
Rental revenue
5.4
5.5
(0.1
)
(1.8
)%
Rental depreciation
20.3
19.4
0.9
4.6
%
Rental equipment sales
33.9
26.9
7.0
26.0
%
Cost of revenues
$
240.3
$
201.5
$
38.8
19.3
%
Gross profit
$
91.4
$
67.3
$
24.1
35.8
%
General and administrative expenses
$
82.9
$
64.8
$
18.1
27.9
%
Depreciation and amortization expense
3.9
2.0
1.9
95.0
%
Total general and administrative
expenses
$
86.8
$
66.8
$
20.0
29.9
%
Income from operations
$
4.6
$
0.5
$
4.1
820.0
%
Other (expense) income:
Interest expense, floor plan payable – new
equipment
$
(0.3
)
$
(0.5
)
$
0.2
(40.0
)%
Interest expense – other
(5.8
)
(5.3
)
(0.5
)
9.4
%
Other income
0.3
0.1
0.2
200.0
%
Total other expense
$
(5.8
)
$
(5.7
)
$
(0.1
)
1.8
%
Loss before taxes
$
(1.2
)
$
(5.2
)
$
4.0
(76.9
)%
Income tax provision
—
0.5
(0.5
)
(100.0
)%
Net loss
$
(1.2
)
$
(5.7
)
$
4.5
(78.9
)%
Preferred stock dividends
(0.8
)
—
(0.8
)
100%
Net loss available to common
shareholders
$
(2.0
)
$
(5.7
)
$
3.7
(64.9
)%
Recent Business Highlights:
- The Company was awarded the Nikola Arizona sales and service
territory.
Full Year 2022 Financial Guidance:
- The Company maintained its guidance range and expects to report
Adjusted EBITDA between $137 million and $142 million, net of new
equipment floorplan interest, for the full year 2022.
Conference Call Information:
Alta management will host a conference call and webcast today at
5:00 p.m. Eastern Time to discuss and answer questions about the
Company’s first quarter financial results. Additionally,
supplementary presentation slides will be accessible on the
“Investor Relations” section of the Company’s website at
https://Investors.altaequipment.com.
Conference Call Details:
What:
Alta Equipment Group First Quarter 2022
Earnings Call and Webcast
Date:
Tuesday, May 10, 2022
Time:
5:00 p.m. Eastern Time
Live call:
(844) 200-6205
International:
(929) 526-1599
Live call access code:
618974
Audio Replay:
(866) 813-9403
Replay access code:
441122
Webcast:
https://events.q4inc.com/attendee/402361694
The audio replay will be archived through
May 24, 2022.
About Alta Equipment Group Inc.
Alta owns and operates one of the largest integrated equipment
dealership platforms in the U.S. Through its branch network, the
Company sells, rents, and provides parts and service support for
several categories of specialized equipment, including lift trucks
and aerial work platforms, cranes, earthmoving and paving equipment
and other material handling and construction equipment. Alta has
operated as an equipment dealership for 37 years and has developed
a branch network that includes over 60 total locations across
Michigan, Illinois, Indiana, Ohio, New England, New York, Virginia,
and Florida. Alta offers its customers a one-stop-shop for their
equipment needs through its broad, industry-leading product
portfolio. More information can be found at
www.altaequipment.com.
Forward Looking Statements
This press release 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
consequently, you should not rely on these forward-looking
statements as predictions of future events. Words such as “expect,”
“estimate,” “project,” “budget,” “forecast,” “anticipate,”
“intend,” “plan,” “may,” “will,” “could,” “should,” “believes,”
“predicts,” “potential,” “continue,” and similar expressions are
intended to identify such forward-looking statements. These
forward-looking statements involve significant risks and
uncertainties that could cause the actual results to differ
materially from the expected results. Most of these factors are
outside Alta’s control and are difficult to predict. Factors that
may cause such differences include, but are not limited to: the
impact of the COVID-19 outbreak or future epidemics on our
business; federal, state, and local budget uncertainty, especially
as it relates to infrastructure projects; the performance and
financial viability of key suppliers, contractors, customers, and
financing sources; economic, industry, business and political
conditions including their effects on governmental policy and
government actions that disrupt our supply chain or sales channels;
our success in identifying acquisition targets and integrating
acquisitions; our success in expanding into and doing business in
additional markets; our ability to raise capital at favorable
terms; the competitive environment for our products and services;
our ability to continue to innovate and develop new business lines;
our ability to attract and retain key personnel, including, but not
limited to, skilled technicians; our ability to maintain our
listing on The New York Stock Exchange; the impact of cyber or
other security threats or other disruptions to our businesses; our
ability to realize the anticipated benefits of acquisitions or
divestitures, rental fleet investments or internal reorganizations;
and other risks and uncertainties identified in this presentation
or indicated from time to time in the section entitled “Risk
Factors” in Alta’s annual report on Form 10-K and other filings
with the U.S. Securities and Exchange Commission (the “SEC”). Alta
cautions that the foregoing list of factors is not exclusive, and
readers should not place undue reliance upon any forward-looking
statements, which speak only as of the date made. Alta does not
undertake or accept any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
to reflect any change in its expectations or any change in events,
conditions, or circumstances on which any such statement is
based.
*Use of Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with accounting principles
generally accepted in the United States (“GAAP”), we disclose
non-GAAP financial measures, including Adjusted EBITDA, Adjusted
net income (loss), and Adjusted basic and diluted net income (loss)
per share, in this press release because we believe they are useful
performance measures that assist in an effective evaluation of our
operating performance when compared to our peers, without regard to
financing methods or capital structure. We believe such measures
are useful for investors and others in understanding and evaluating
our operating results in the same manner as our management.
However, such measures are not financial measures calculated in
accordance with GAAP and should not be considered as a substitute
for, or in isolation from, net income (loss), revenue, operating
profit, or any other operating performance measures calculated in
accordance with GAAP.
We define Adjusted EBITDA as net income (loss) before interest
expense (not including floorplan interest paid on new equipment),
income taxes, depreciation and amortization, adjustments for
certain one-time or non-recurring items and other adjustments. We
exclude these items from net income (loss) in arriving at Adjusted
EBITDA because these amounts are either non-recurring or can vary
substantially within the industry depending upon accounting methods
and book values of assets, capital structures and the method by
which the assets were acquired. Adjusted net income (loss) is
defined as net income (loss) adjusted to reflect certain one-time
or non-recurring items and other adjustments. Adjusted basic and
diluted earnings (loss) per share is defined as adjusted net income
(loss) divided by the weighted average number of basic and diluted
shares, respectively, outstanding during the period. Certain items
excluded from Adjusted EBITDA, Adjusted net income (loss), Adjusted
basic and diluted net income (loss) per share are significant
components in understanding and assessing a company’s financial
performance. For example, items such as a company’s cost of capital
and tax structure, certain one-time or non-recurring items as well
as the historic costs of depreciable assets, are not reflected in
Adjusted EBITDA or Adjusted net income (loss). Our presentation of
Adjusted EBITDA, Adjusted net income (loss), Adjusted basic and
diluted net income (loss) per share should not be construed as an
indication that results will be unaffected by the items excluded
from these metrics. Our computation of Adjusted EBITDA, Adjusted
net income (loss), Adjusted basic and diluted net income (loss) per
share may not be identical to other similarly titled measures of
other companies. For a reconciliation of non-GAAP measures to their
most comparable measures under GAAP, please see the table entitled
“Reconciliation of Non-GAAP Financial Measures” at the end of this
press release.
CONSOLIDATED BALANCE
SHEETS
(in millions, except share and per
share amounts)
March 31, 2022
December 31, 2021
ASSETS
CURRENT ASSETS
Cash
$
1.6
$
2.3
Accounts receivable, net of allowances of
$11.9 and $10.7 as of March 31, 2022 and December 31, 2021,
respectively
189.3
182.7
Inventories, net
291.0
239.2
Prepaid expenses and other current
assets
22.8
24.4
Total current assets
$
504.7
$
448.6
PROPERTY AND EQUIPMENT, NET
337.0
344.5
OPERATING LEASE RIGHT-OF-USE ASSETS,
NET
101.9
102.6
OTHER ASSETS
Goodwill
$
43.5
$
41.9
Intangible assets, net
42.0
43.4
Other assets
1.5
1.6
Total other assets
$
87.0
$
86.9
TOTAL ASSETS
$
1,030.6
$
982.6
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Lines of credit, net
$
113.9
$
98.4
Floor plan payable – new equipment
147.5
114.2
Floor plan payable – used and rental
equipment
39.5
40.6
Current portion of long-term debt
2.7
2.6
Accounts payable
63.6
73.5
Customer deposits
18.6
16.7
Accrued expenses
46.5
39.3
Current operating lease liabilities
16.4
16.2
Other current liabilities
22.0
19.1
Total current liabilities
$
470.7
$
420.6
LONG-TERM LIABILITIES
Long-term debt, net of current portion
310.2
310.0
Finance lease obligations, net of current
portion
9.7
9.0
Deferred revenue, net of current
portion
3.8
4.2
Guaranteed purchase obligations, net of
current portion
4.7
5.2
Long-term operating lease liabilities, net
of current portion
88.3
88.4
Deferred tax liability
6.9
6.9
Other liabilities
3.3
3.6
TOTAL LIABILITIES
$
897.6
$
847.9
CONTINGENCIES - NOTE 12
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value,
1,000,000 shares authorized, 1,200,000 Depositary Shares
representing a 1/1000th fractional interest in a share of 10%
Series A Cumulative Perpetual Preferred Stock, $0.0001 par value
per share, issued and outstanding at March 31, 2022 and December
31, 2021, respectively
$
—
$
—
Common stock, $0.0001 par value,
200,000,000 shares authorized; 32,363,376 issued and outstanding at
March 31, 2022 and December 31, 2021, respectively
—
—
Additional paid-in capital
217.7
217.4
Treasury stock
(5.9
)
(5.9
)
Accumulated deficit
(78.8
)
(76.8
)
TOTAL STOCKHOLDERS’ EQUITY
$
133.0
$
134.7
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
1,030.6
$
982.6
CONSOLIDATED STATEMENTS OF
OPERATIONS
Three Months Ended March
31,
(in millions, except share and per
share amounts)
2022
2021
Revenues:
New and used equipment sales
$
151.6
$
123.8
Parts sales
53.4
41.4
Service revenue
48.2
38.7
Rental revenue
37.7
33.1
Rental equipment sales
40.8
31.8
Net revenues
$
331.7
$
268.8
Cost of revenues:
New and used equipment sales
$
123.9
$
106.5
Parts sales
36.7
28.7
Service revenue
20.1
14.5
Rental revenue
5.4
5.5
Rental depreciation
20.3
19.4
Rental equipment sales
33.9
26.9
Cost of revenues
$
240.3
$
201.5
Gross profit
$
91.4
$
67.3
General and administrative expenses
$
82.9
$
64.8
Depreciation and amortization expense
3.9
2.0
Total general and administrative
expenses
$
86.8
$
66.8
Income from operations
$
4.6
$
0.5
Other (expense) income:
Interest expense, floor plan payable – new
equipment
$
(0.3
)
$
(0.5
)
Interest expense – other
(5.8
)
(5.3
)
Other income
0.3
0.1
Total other expense
$
(5.8
)
$
(5.7
)
Loss before taxes
$
(1.2
)
$
(5.2
)
Income tax provision
—
0.5
Net loss
$
(1.2
)
$
(5.7
)
Preferred stock dividends
(0.8
)
—
Net loss available to common
shareholders
$
(2.0
)
$
(5.7
)
Basic loss per share
$
(0.06
)
$
(0.19
)
Diluted loss per share
$
(0.06
)
$
(0.19
)
Basic weighted average common shares
outstanding
32,363,376
30,018,502
Diluted weighted average common shares
outstanding
32,363,376
30,018,502
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Three Months Ended March
31,
(amounts in millions)
2022
2021
OPERATING ACTIVITIES
Net loss
$
(1.2
)
$
(5.7
)
Adjustments to reconcile net loss to net
cash flows provided by (used in) operating activities:
Depreciation and amortization
24.2
21.4
Amortization of debt discount and debt
issuance costs
0.3
0.5
Imputed interest
0.1
0.1
Gain on sale of rental equipment
(6.8
)
(4.9
)
Inventory obsolescence
1.1
0.2
Provision for bad debt
1.2
0.6
Share based compensation
0.3
0.3
Changes in deferred taxes
—
0.5
Changes in:
Accounts receivable
(7.8
)
(5.9
)
Inventories
(82.6
)
(33.4
)
Proceeds from sale of rental equipment
40.8
31.8
Prepaid expenses and other assets
1.7
0.5
Proceeds from floor plans with
manufacturers
127.1
84.8
Payments under floor plans with
manufacturers
(105.4
)
(86.9
)
Accounts payable, accrued expenses,
customer deposits, and other current liabilities
0.2
(3.8
)
Leases, deferred revenue, and other
liabilities
0.1
0.5
Net cash (used in) provided by
operating activities
$
(6.7
)
$
0.6
INVESTING ACTIVITIES
Proceeds from the sale of assets
$
0.1
$
0.7
Expenditures for rental equipment
(15.1
)
(6.2
)
Expenditures for property and
equipment
(1.8
)
(1.5
)
Expenditures for guaranteed purchase
obligations
(0.6
)
(0.9
)
Expenditures for acquisitions, net of cash
acquired
(1.2
)
(1.9
)
Net cash used in investing
activities
$
(18.6
)
$
(9.8
)
FINANCING ACTIVITIES
Proceeds from lines of credit
$
86.3
$
73.5
Payments under lines of credit
(70.9
)
(61.7
)
Proceeds from floor plans with
unaffiliated source
30.2
24.2
Payments under floor plans with
unaffiliated source
(19.5
)
(25.3
)
Preferred dividends paid
(0.8
)
—
Payments on long-term debt
—
(1.9
)
Payments on finance lease obligations
(0.7
)
(0.2
)
Net cash provided by financing
activities
$
24.6
$
8.6
NET CHANGE IN CASH
(0.7
)
(0.6
)
Cash, Beginning of year
2.3
1.2
Cash, End of period
$
1.6
$
0.6
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid for interest
$
1.3
$
5.3
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
Three Months Ended
March 31,
(amounts in millions)
2022
2021
Net loss
$
(2.0
)
$
(5.7
)
Depreciation and amortization
24.2
21.4
Interest expense
6.1
5.8
Income tax provision
—
0.5
EBITDA (1)
$
28.3
$
22.0
Transaction costs (2)
—
0.6
Loan administration fees (3)
—
0.1
Non-cash adjustments (4)
—
0.2
Share-based incentives (5)
0.3
0.3
Other expenses (6)
0.9
0.3
Preferred stock dividend (7)
0.8
—
Showroom-Ready Equipment Interest Expense
(8)
(0.3
)
(0.5
)
Adjusted EBITDA (1)
$
30.0
$
23.0
Pro Forma EBITDA—Acquisitions (9)
—
3.9
Adjusted Pro Forma EBITDA (1)
$
30.0
$
26.9
Three Months Ended
March 31,
(in millions, except share and per
share amounts)
2022
2021
Net loss
$
(2.0
)
$
(5.7
)
Transaction costs (2)
—
0.6
Loan administration fees (3)
—
0.1
Non-cash adjustments (4)
—
0.2
Share-based incentives (5)
0.3
0.3
Other expenses (6)
0.9
0.3
Adjusted net income (loss) available to
common stockholders (1)
$
(0.8
)
$
(4.2
)
Adjusted basic net income (loss) per
share (1)
$
(0.02
)
$
(0.14
)
Adjusted diluted net income (loss) per
share (1)
$
(0.02
)
$
(0.14
)
Basic weighted average common shares
outstanding
32,363,376
30,018,502
Diluted weighted average common shares
outstanding
32,363,376
30,018,502
(1)
Represents Non-GAAP measure
(2)
Includes expenses related to the
acquisitions and capital raising activities
(3)
Debt administration fees associated with
debt refinancing activities
(4)
Non-cash adjustments related to
straight-line of rent expenses
(5)
Reflects equity-based compensation
expenses
(6)
Other non-recurring expenses inclusive of
severance payments, legal, and consulting costs
(7)
Expenses related to preferred stock
dividend payments
(8)
Represents interest expense associated
with showroom-ready new equipment interest included in total
interest expense above
(9)
Pro forma EBITDA of acquisitions completed
in 2021 and forward, assuming each was acquired as of January 1,
2021
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220510006152/en/
Investors: Kevin Inda SCR Partners, LLC kevin@scr-ir.com
(225) 772-0254
Media: Glenn Moore Alta Equipment Group, LLC
glenn.moore@altg.com (248) 305-2134
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