- Net revenues increased 47.3% to $220.6 million year over
year
- Industrial and Construction revenue increased to $115.0 million
and $105.6 million, respectively
- Gross profit increased 28.3% to $56.7 million compared to $44.2
million a year ago
- Net income of $0.3 million improved from a net loss of $(27.4)
million last year
- Adjusted EBITDA* grew to $21.9 million compared to $21.7
million last year
- Completed two acquisitions in Midwest region, expanding product
lines and manufacturing relationships
Alta Equipment Group Inc. (“Alta” or the “company”) (NYSE:
ALTG), a leading provider of premium industrial and construction
equipment and related services, today announced financial results
for the third quarter and nine months ended September 30, 2020.
CEO Comment:
Ryan Greenawalt, Chief Executive Officer of Alta, said “Alta’s
solid third quarter results reflect increased customer demand from
the prior quarter in both our material handling and construction
businesses. As business conditions improved, we returned to close
to our pre-pandemic levels of operation and labor utilization, and
judiciously expanded our skilled labor force during the quarter in
key areas across the Alta network. The addition of our two recent
acquisitions in the Midwest, Martin Implement Sales and Howell
Tractor & Equipment, will provide further penetration into a
strategic growth market and further expand our product lines and
OEM relationships.”
Mr. Greenawalt continued, “We anticipate a strong finish to the
year and are excited to enter next year with momentum as we further
differentiate and integrate our dealership and rental model, and
capitalize on the investments we made in 2020. We believe this
momentum paired with diligent execution will enable us to emerge as
a stronger company as business conditions continue to improve.”
Third Quarter 2020 Financial Highlights:
- Net revenue increased to $220.6 million from $149.8 million in
the third quarter of 2019
- Gross profit grew to $56.7 million compared to $44.2
million
- Parts and Service revenue of $71.0 million compared to $56.5
million in the second quarter of 2020
- Adjusted EBITDA* was $21.9 million in the third quarter of 2020
compared to $21.7 million same period in 2019
Three months ended September
30,
Increase (Decrease) 2020
versus 2019
Nine months ended September
30,
Increase (Decrease) 2020
versus 2019
2020
2019
2020
2019
Revenues:
New and used equipment sales
$
97.9
$
61.1
$
36.8
60.2
%
$
275.2
$
167.1
$
108.1
64.7
%
Parts sales
35.5
22.9
12.6
55.0
%
92.3
60.0
32.3
53.8
%
Service revenue
35.5
27.3
8.2
30.0
%
94.1
67.2
26.9
40.0
%
Rental revenue
32.2
27.8
4.4
15.8
%
83.4
66.9
16.5
24.7
%
Rental equipment sales
19.5
10.7
8.8
82.2
%
48.2
26.8
21.4
79.9
%
Net revenue
$
220.6
$
149.8
$
70.8
47.3
%
$
593.2
$
388.0
$
205.2
52.9
%
Cost of revenues:
New and used equipment sales
84.4
53.4
31.0
58.1
%
240.3
146.6
93.7
63.9
%
Parts sales
24.3
14.9
9.4
63.1
%
63.3
39.4
23.9
60.7
%
Service revenue
13.5
10.0
3.5
35.0
%
35.9
24.3
11.6
47.7
%
Rental revenue
5.4
4.3
1.1
25.6
%
14.8
11.4
3.4
29.8
%
Rental depreciation and amortization
19.2
13.7
5.5
40.1
%
47.1
32.9
14.2
43.2
%
Rental equipment sales
17.1
9.3
7.8
83.9
%
41.7
23.1
18.6
80.5
%
Cost of revenue
$
163.9
$
105.6
$
58.3
55.2
%
$
443.1
$
277.7
$
165.4
59.6
%
Gross profit
$
56.7
$
44.2
$
12.5
28.3
%
$
150.1
$
110.3
$
39.8
36.1
%
Total general and administrative
expenses
60.2
38.0
$
22.2
58.4
%
157.7
97.4
$
60.3
61.9
%
(Loss) income from operations
$
(3.5
)
$
6.2
$
(9.7
)
(156.5
)%
$
(7.6
)
$
12.9
$
(20.5
)
(158.9
)%
Total other income (expense)
$
1.9
$
(33.6
)
$
35.5
(105.7
)%
$
(16.6
)
$
(42.5
)
$
25.9
(60.9
)%
Loss before taxes
$
(1.6
)
$
(27.4
)
25.8
(94.2
)%
$
(24.2
)
$
(29.6
)
5.4
(18.2
)%
Income tax benefit
(1.9
)
—
(1.9
)
NA
(3.4
)
—
(3.4
)
NA
Net income (loss)
$
0.3
$
(27.4
)
$
27.7
(101.1
)%
$
(20.8
)
$
(29.6
)
$
8.8
(29.7
)%
Recent Acquisitions:
- Howell Tractor and Equipment -
Completed on September 1, 2020. Howell Tractor was a privately held
heavy equipment dealer serving Northern Illinois and Northwest
Indiana with an expansive range of heavy construction, mining,
material handling, and crane equipment available for sale or rent
to its premium customer base. As an equipment industry leader in
the area since opening in 1943, Howell Tractor provides around the
clock professional service, with an experienced and knowledgeable
staff operating out of two fully equipped, state-of-the-art
facilities.
- Martin Implement Sales, Inc. -
Completed on October 30, 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 or rental to construction and municipal
customers. Martin sells primarily construction and agricultural
equipment in partnership with industry leading manufacturers
including New Holland, Kubota, Hyundai and Toro, and offers any
equipment service that a customer needs, along with a 24/7 service
hotline.
Conference Call Information:
Alta will discuss its third quarter 2020 results via live
webcast and teleconference today at 5:00 p.m. Eastern Time. A live
webcast of the call can be found on the investor relations portion
of the company's website at https://Investors.altaequipment.com.
For a live audio teleconference, please dial (844) 543-5487
(domestic), or (825) 312-2330 (international), with conference ID #
8905858 to access the conference call at least five minutes prior
to the 5:00 p.m. Eastern Time start time. Once connected with the
operator, request access to the Alta Equipment Group Third Quarter
2020 Earnings Call.
A live replay of the call will also be available on the investor
relations portion of the company's website at
https://Investors.altaequipment.com. An audio replay will be
available between 8:00 p.m. Eastern Time, November 12, 2020, and
12:59 p.m. Eastern Time, November 26, 2020, by calling (800)
585-8367, or (416) 621-4642, with conference ID # 8905858.
Additionally, supplementary presentation slides will be
accessible on the “Investor Relations” section of the Company’s
website at https://Investors.altaequipment.com.
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 equipment and other
industrial and construction equipment. Alta has operated as an
equipment dealership for 35 years and has developed a branch
network that includes 51 total locations across Michigan, Illinois,
Indiana, New England, New York, Virginia and Florida. Alta offers
its customers a one-stop-shop for most of their equipment needs by
providing sales, parts, service, and rental functions under one
roof. More information can be found at www.altaequipment.com.
Forward Looking Statements
This presentation includes certain statements that may
constitute “forward-looking statements” for purposes of the federal
securities laws. Forward-looking statements include, but are not
limited to, statements that refer to projections, forecasts or
other characterizations of future events or circumstances,
including any underlying assumptions. The words “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intends,”
“may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “would” and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. Forward-looking
statements may include, for example, statements about: our future
financial performance; our plans for expansion and acquisitions;
and changes in our strategy, future operations, financial position,
estimated revenues, and losses, projected costs, prospects, plans
and objectives of management. These forward-looking statements are
based on information available as of the date of this presentation,
and current expectations, forecasts and assumptions, and involve a
number of judgments, risks and uncertainties. Accordingly,
forward-looking statements should not be relied upon as
representing the parties’ views as of any subsequent date, and we
do not undertake any obligation to update forward-looking
statements to reflect events or circumstances after the date they
were made, whether as a result of new information, future events or
otherwise, except as may be required under applicable securities
laws. You should not place undue reliance on these forward-looking
statements. As a result of a number of known and unknown risks and
uncertainties, actual results or performance may be materially
different from those expressed or implied by these forward-looking
statements. Some factors that could cause actual results to differ
include, but are not limited to: (1) the outcome of any legal
proceedings that may be instituted against us relating to the
business combination and related transactions; (2) the ability to
maintain our listing of shares of common stock on the New York
Stock Exchange; (3) the risk that integrating our acquisitions
disrupts our current plans and operations; (4) the ability to
recognize the anticipated benefits of our business combination and
acquisitions, which may be affected by, among other things,
competition, our ability to grow and manage growth profitably, our
ability to maintain relationships with customers and suppliers and
retain our management and key employees; (5) changes in applicable
laws or regulations; (6) the possibility that we may be adversely
affected by other economic, business, and/or competitive factors;
(7) disruptions in the political, regulatory, economic and social
conditions domestically or internationally; (8) major public health
issues, such as an outbreak of a pandemic or epidemic (such as the
novel coronavirus COVID-19), which could cause disruptions in our
operations, supply chain, or workforce; and (9) and other risks and
uncertainties identified in this presentation or indicated from
time to time in the section entitled “Risk Factors” in our annual
report on Form 10-K and other filings with the U.S. Securities and
Exchange Commission (the “SEC”). The company 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. We do 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 its consolidated financial statements, which are
prepared and presented in accordance with accounting principles
generally accepted in the United States (“GAAP”), Alta discloses
non-GAAP financial measures, including Adjusted EBITDA, in this
press release because Alta believes they are useful performance
measures because they allow for an effective evaluation of Alta’s
operating performance when compared to its peers, without regard to
financing methods or capital structure. Alta believes such measures
are useful for investors and others in understanding and evaluating
Alta’s operating results in the same manner as its 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.
Alta defines Adjusted EBITDA as net income (loss) before
interest expense, income taxes, depreciation and amortization,
adjustments for certain one-time or non-recurring items and other
adjustments. Alta excludes 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. Certain items excluded from Adjusted EBITDA are
significant components in understanding and assessing a company’s
financial performance, such as a company’s cost of capital and tax
structure, as well as the historic costs of depreciable assets,
none of which are reflected in Adjusted EBITDA. Alta’s presentation
of Adjusted EBITDA should not be construed as an indication that
results will be unaffected by the items excluded from Adjusted
EBITDA. Alta’s computation of Adjusted EBITDA 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.
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in millions, except share and per
share amounts)
September 30, 2020
December 31, 2019
ASSETS
CURRENT ASSETS
Cash
$
0.1
$
—
Accounts receivable, net of allowances of
$6.2 and $4.4 as of September 30, 2020 and December 31, 2019,
respectively
122.8
101.2
Inventories, net
221.1
137.2
Prepaid expenses and other current
assets
13.2
5.7
Total current assets
357.2
244.1
PROPERTY AND EQUIPMENT, NET
293.7
196.5
OTHER ASSETS
Goodwill
22.8
8.6
Intangible assets, net
24.2
3.0
Other assets
1.9
2.0
Total other assets
48.9
13.6
TOTAL ASSETS
$
699.8
$
454.2
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
CURRENT LIABILITIES
Lines of credit, net
$
139.0
$
72.5
Floor plan payable – new equipment
118.6
87.7
Floor plan payable – used and rental
equipment
36.3
112.5
Current portion of long-term debt
7.8
7.1
Accounts payable
62.8
31.1
Customer deposits
6.8
7.2
Accrued expenses
26.8
16.0
Other current liabilities
13.3
9.3
Total current liabilities
411.4
343.4
LONG-TERM LIABILITIES
Long-term debt, net of current portion
136.4
86.5
Capital lease obligations, net of current
portion
0.8
1.4
Buyback residual obligations, net of
current portion
0.8
0.7
Guaranteed purchase obligation, net of
current portion
7.4
9.0
Lease liability, net of current
portion
2.7
3.7
Deferred tax liability
15.6
—
Other liabilities
10.0
3.1
Warrant liability
—
29.6
TOTAL LIABILITIES
$
585.1
$
477.4
CONTINGENCIES - NOTE 11
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.0001 par value,
1,000,000 authorized and no shares outstanding at September 30,
2020
$
—
$
—
Common stock, $0.0001 par value,
29,511,359 and 7,300,000 shares issued and outstanding at September
30, 2020 and December 31, 2019
—
—
Additional paid-in capital
183.6
—
Treasury stock
(5.9
)
—
Retained deficit
(63.0
)
(23.2
)
TOTAL STOCKHOLDERS’ EQUITY
(DEFICIT)
114.7
(23.2
)
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
699.8
$
454.2
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
Three Months Ended September
30,
Nine Months Ended September
30,
(in millions, except share and per
share amounts)
2020
2019
2020
2019
Revenues:
New and used equipment sales
$
97.9
$
61.1
$
275.2
$
167.1
Parts sales
35.5
22.9
92.3
60.0
Service revenue
35.5
27.3
94.1
67.2
Rental revenue
32.2
27.8
83.4
66.9
Rental equipment sales
19.5
10.7
48.2
26.8
Net revenue
$
220.6
$
149.8
$
593.2
$
388.0
Cost of revenues:
New and used equipment sales
84.4
53.4
240.3
146.6
Parts sales
24.3
14.9
63.3
39.4
Service revenue
13.5
10.0
35.9
24.3
Rental revenue
5.4
4.3
14.8
11.4
Rental depreciation
19.2
13.7
47.1
32.9
Rental equipment sales
17.1
9.3
41.7
23.1
Cost of revenue
$
163.9
$
105.6
$
443.1
$
277.7
Gross profit
$
56.7
$
44.2
$
150.1
$
110.3
General and administrative expenses
58.4
37.5
153.2
95.6
Depreciation and amortization expense
1.8
0.5
4.5
1.8
Total general and administrative
expenses
60.2
38.0
157.7
97.4
(Loss) income from operations
$
(3.5
)
$
6.2
$
(7.6
)
$
12.9
Other income (expense)
Interest expense, floor plan payable – new
equipment
(0.5
)
(0.9
)
(1.8
)
(2.4
)
Interest expense – other
(5.6
)
(4.7
)
(15.9
)
(12.7
)
Other income
8.0
0.3
8.7
0.9
Change in fair market of warrants
—
(28.3
)
—
(28.3
)
Loss on extinguishment of debt
—
—
(7.6
)
—
Total other income (expense)
$
1.9
$
(33.6
)
$
(16.6
)
$
(42.5
)
Loss before taxes
$
(1.6
)
$
(27.4
)
$
(24.2
)
$
(29.6
)
Income tax benefit
(1.9
)
—
(3.4
)
—
Net income (loss)
$
0.3
$
(27.4
)
$
(20.8
)
$
(29.6
)
Basic and diluted income (loss) per
share
$
0.01
$
(3.74
)
$
(0.81
)
$
(4.05
)
Basic and diluted weighted average
common shares outstanding
29,221,460
7,300,000
25,689,145
7,300,000
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Nine Months Ended September
30,
(amounts in millions)
2020
2019
OPERATING ACTIVITIES
Net loss
$
(20.8
)
$
(29.6
)
Adjustments to reconcile net loss to net
cash flows used in operating activities:
Depreciation and amortization
51.6
34.9
Amortization of debt discount and debt
issuance costs
1.2
0.8
Inventory obsolescence
1.3
0.6
Gain on sale of rental equipment
(6.5
)
(3.7
)
Provision for bad debt
2.8
1.3
Loss on debt extinguishment
7.6
—
(Repayment) accrual of paid-in-kind
interest
(11.2
)
4.7
Change in fair value of warrants
—
28.3
Share-based payment
6.3
—
Changes in deferred taxes
(3.4
)
—
Changes in:
Accounts receivable
6.2
(14.2
)
Inventories
(102.8
)
(53.2
)
Proceeds from sale of rental equipment
48.2
26.8
Prepaid expenses and other assets
(5.5
)
(1.3
)
Proceeds from floor plans with
manufacturers
240.5
183.1
Payments under floor plans with
manufacturers
(273.1
)
(188.4
)
Accounts payable, accrued expenses,
customer deposits, and other current liabilities
16.0
5.1
Leases and other liabilities
(3.1
)
0.8
Net cash used in operating
activities
$
(44.7
)
$
(4.0
)
INVESTING ACTIVITIES
Proceeds from the sale of assets
1.0
—
Expenditures for rental equipment
(34.5
)
(18.0
)
Expenditures for property and
equipment
(4.0
)
(2.1
)
Expenditures for acquisitions, net of cash
acquired
(128.8
)
(65.6
)
Net activity on notes and land contract
receivable
—
0.1
Net cash used in investing
activities
$
(166.3
)
$
(85.6
)
FINANCING ACTIVITIES
Expenditures for debt issuance costs
(2.7
)
(0.1
)
Extinguishment of floor plans and line of
credit
(132.9
)
—
Extinguishment of long-term debt
(82.0
)
—
Redemption of former shareholder notes
payable
(6.7
)
—
Extinguishment of warrant liability
(29.6
)
—
Proceeds from lines of credit
334.5
137.4
Payments under lines of credit
(187.1
)
(88.0
)
Proceeds from floor plans with
unaffiliated source
63.5
81.4
Payments under floor plans with
unaffiliated source
(61.3
)
(50.7
)
Proceeds from issuance of long-term debt,
net
149.4
20.0
Payments on long-term debt
(4.8
)
(9.1
)
Payments on capital lease obligations
(0.6
)
(0.7
)
Equity proceeds from reverse
recapitalization, net
175.7
—
Proceeds from disgorgement of short swing
profits
1.6
—
Repurchases of common stock
(5.9
)
—
Net cash provided by financing
activities
$
211.1
$
90.2
NET CHANGE IN CASH
0.1
0.6
Cash, Beginning of year
—
1.5
Cash, End of period
$
0.1
$
2.1
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid for interest
$
26.0
$
9.7
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
Nine months ended September
30,
Three months ended September
30,
(amounts in millions)
2020
2019
2020
2019
Net (loss) income
$
(20.8
)
$
(29.6
)
$
0.3
$
(27.4
)
Depreciation and amortization
51.6
34.9
21.0
14.4
Interest expense
17.7
15.1
6.1
5.6
Income tax benefit
(3.4
)
—
(1.9
)
—
EBITDA (1)
$
45.1
$
20.4
$
25.5
$
(7.4
)
Change in fair value of warrants (2)
—
28.3
—
28.3
One-Time Transaction Costs (3)
3.9
0.4
1.2
0.2
Loan Administration Fees (4)
0.3
0.3
0.1
—
Non-Cash Adjustments (5)
0.7
1.5
0.3
1.1
Loss on Debt Extinguishment (6)
7.6
—
—
—
Equity-linked Incentives (7)
9.8
—
3.2
—
Other expenses (8)
0.4
0.1
—
—
Insurance proceeds (9)
(8.0
)
—
(8.0
)
—
Showroom-Ready Floorplan Interest Expense
(10)
(1.4
)
(1.6
)
(0.4
)
(0.5
)
Adjusted EBITDA (1)
$
58.4
$
49.4
$
21.9
$
21.7
Pro Forma EBITDA—Acquisitions (11)
6.9
27.1
0.5
7.3
Adjusted Pro Forma EBITDA (1)
$
65.3
$
76.5
$
22.4
$
29.0
(1)
Represents Non-GAAP measure
(2)
Represents mark to market valuation for
warrants
(3)
Includes expenses related to the
acquisitions, both completed and pending, and public company
preparation costs
(4)
Debt administration expenses associated
with debt refinancing activities in May 2019 and February 2020 in
connection with the business combination
(5)
Non-cash adjustments related to deferred
rent expenses
(6)
Represents expenses of debt
extinguishments related to refinancing activities relating to the
business combination in February 2020
(7)
Reflects equity-based compensation
expenses related to refinancing activities in February 2020 and
Restricted Stock Unit expense in September 2020
(8)
Other non-recurring expenses primarily
related to severance payments
(9)
Key-man life insurance proceeds
(10)
Represents interest expense associated
with showroom-ready new and used floorplan equipment interest
included in total interest expense above
(11)
Pro forma EBITDA of NITCO, Flagler,
Liftech, PeakLogix, Hilo and Martin for periods in 2019 and
forward, assuming each was acquired as of January 1, 2019
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201112006042/en/
Investors: Bob Jones / Taylor Krafchik Ellipsis
IR@altaequipment.com (646) 776-0886
Media: Glenn Moore Alta Equipment
glenn.moore@altaequipment.com (248) 305-2134
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