First Quarter Financial
Highlights:
- Net revenues increased 48.9% year over year to $268.8
million
- Construction and Material Handling revenue of $162.0 million
and $106.8 million, respectively
- Gross profit increased to $67.3 million year over year from
$47.1 million
- Net loss of ($5.7) million compared to ($17.0) million prior
year
- Adjusted EBITDA* grew 38.0% to $22.9 million compared to $16.6
million
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, 2021.
CEO Comment:
Ryan Greenawalt, Chief Executive Officer of Alta, said “We
experienced continued improvement in our key business drivers as
customer demand accelerated in the first quarter. Rental fleet
utilization and equipment sales volume increased to drive adjusted
EBITDA of $22.9 million for the quarter.”
Mr. Greenawalt added, “Our recent capital raise of $315 million
significantly enhances our capital structure and bolsters our
ability to pursue our growth strategy in a manner accretive to
shareholders. Our financial guidance reflects confidence in our
markets and ability to execute on our business plan. We look
forward to carrying the momentum of the quarter through the
remainder of 2021 and beyond.”
Three Months Ended
March 31,
Increase
(Decrease)
2021
2020
2021 versus 2020
Revenues:
New and used equipment sales
$
123.8
$
82.2
$
41.6
50.6
%
Parts sales
41.4
28.7
12.7
44.3
%
Service revenue
38.7
30.2
8.5
28.1
%
Rental revenue
33.1
25.2
7.9
31.3
%
Rental equipment sales
31.8
14.2
17.6
123.9
%
Net revenue
$
268.8
$
180.5
$
88.3
48.9
%
Cost of revenues:
New and used equipment sales
106.5
72.4
34.1
47.1
%
Parts sales
28.7
19.6
9.1
46.4
%
Service revenue
14.5
11.4
3.1
27.2
%
Rental revenue
5.5
4.9
0.6
12.2
%
Rental depreciation and amortization
19.4
12.9
6.5
50.4
%
Rental equipment sales
26.9
12.2
14.7
120.5
%
Cost of revenue
$
201.5
$
133.4
$
68.1
51.0
%
Gross profit
$
67.3
$
47.1
$
20.2
42.9
%
Total general and administrative
expenses
66.9
52.1
$
14.8
28.4
%
Income (loss) from operations
$
0.4
$
(5.0
)
$
5.4
(108.0
)%
Total other income (expense)
$
(5.6
)
$
(13.1
)
$
7.5
(57.3
)%
Loss before taxes
$
(5.2
)
$
(18.1
)
12.9
(71.3
)%
Income tax provision (benefit)
0.5
(1.1
)
1.6
(145.5
)%
Net loss
$
(5.7
)
$
(17.0
)
$
11.3
(66.5
)%
Recent Business Highlights:
- On March 1, 2021, Alta acquired the assets of ScottTech, a
material handling, warehouse control software and turnkey warehouse
system integration provider. The addition of ScottTech provides
synergies with PeakLogix and significantly expands Alta’s
capabilities with customers in the warehouse, logistics and
e-commerce markets.
- The company refinanced its capital structure via the completion
of an offering of $315 million worth of 5.625% Senior Secured
Second Lien Notes on April 1, 2021. The capital raise fully repaid
its 9.80% variable rate second lien term loan, created $280 million
of credit line availability, and reduced the company’s cost of
debt, providing the financial structure to support the execution of
its growth strategy.
- Product support revenue, which include parts and service sales,
grew 36.0% year over year in the first quarter of 2021 providing an
ongoing higher margin, recurring revenue stream.
Full Year Financial Guidance:
Alta expects to report Adjusted EBITDA in the range of $110
million to $115 million, net of new equipment floorplan interest,
for the full year 2021. At the midpoint, this represents a 35.5%
increase over $83.0 million in Adjusted EBITDA in 2020.
Conference Call Information:
Alta will discuss its first quarter 2021 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 #
8699257 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 First Quarter
2021 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, May 13, 2021, and 12:59
p.m. Eastern Time, May 27, 2021 by calling (800) 585-8367, or (416)
621-4642, with conference ID # 8699257.
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
material handling and construction equipment. Alta has operated as
an equipment dealership for 36 years and has developed a branch
network that includes 55 total locations across Michigan, Illinois,
Indiana, 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 presentation includes certain statements that may
constitute “forward-looking statements” within the meaning 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 impact of the COVID-19
outbreak or future epidemics on our business, including the
potential for facility closures or work stoppages, supply chain
disruptions, negative impacts on customer payment policies and
adverse banking and governmental regulations, resulting in a
potential reduction to the fair value of our assets; (2) federal,
state, and local budget uncertainty, especially as it relates to
infrastructure projects; (3) the performance and financial
viability of key suppliers, contractors, customers, and financing
sources; (4) economic, industry, business and political conditions
including their effects on governmental policy and government
actions that disrupt our supply chain or sales channels; (5) our
success in identifying acquisition targets and integrating
acquisitions; our success in expanding into and doing business in
additional markets; (6) our ability to raise capital at favorable
terms; (7) the competitive environment for our products and
services; (8) our ability to continue to innovate and develop new
business lines; (9) our ability to attract and retain key
personnel, including, but not limited to, skilled technicians; (10)
our ability to maintain our listing on The New York Stock Exchange;
(11) the impact of cyber or other security threats or other
disruptions to our businesses; (12) our ability to realize the
anticipated benefits of acquisitions or divestitures, rental fleet
investments or internal reorganizations; and (13) 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”). We caution 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 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, 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, 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. 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. Our presentation of Adjusted EBITDA should not
be construed as an indication that results will be unaffected by
the items excluded from Adjusted EBITDA. Our 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)
March 31,
2021
December 31,
2020
ASSETS
CURRENT ASSETS
Cash
$
0.6
$
1.2
Accounts receivable, net of allowances of
$7.9 and $7.1 as of March 31, 2021 and December 31, 2020,
respectively
144.0
137.8
Inventories, net
223.4
229.0
Prepaid expenses and other current
assets
13.3
13.6
Total current assets
381.3
381.6
PROPERTY AND EQUIPMENT, NET
310.8
311.9
OTHER ASSETS
Goodwill
25.8
24.3
Intangible assets, net
25.6
26.3
Other assets
1.5
2.1
Total other assets
52.9
52.7
TOTAL ASSETS
$
745.0
$
746.2
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Lines of credit, net
$
169.6
$
157.7
Floor plan payable – new equipment
119.9
127.6
Floor plan payable – used and rental
equipment
34.3
29.8
Current portion of long-term debt
7.8
7.8
Accounts payable
55.5
58.9
Customer deposits
11.4
9.3
Accrued expenses
28.8
30.1
Other current liabilities
12.3
13.1
Total current liabilities
439.6
434.3
LONG-TERM LIABILITIES
Long-term debt, net of current portion
133.5
135.0
Capital lease obligations, net of current
portion
0.4
0.6
Buyback residual obligations, net of
current portion
0.7
0.7
Lease liability, net of current
portion
2.5
2.5
Guaranteed purchase obligation, net of
current portion
6.9
6.9
Other liabilities
9.9
9.3
TOTAL LIABILITIES
$
593.5
$
589.3
CONTINGENCIES - NOTE 11
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, 2021 and December
31, 2020
$
—
$
—
Common stock, $0.0001 par value,
200,000,000 shares authorized; 30,018,502 issued and outstanding at
March 31, 2021 and December 31, 2020
—
—
Additional paid-in capital
216.5
216.2
Treasury stock
(5.9
)
(5.9
)
Accumulated deficit
(59.1
)
(53.4
)
TOTAL STOCKHOLDERS’ EQUITY
151.5
156.9
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
745.0
$
746.2
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
Three Months Ended
March 31,
(in millions, except share and per
share amounts)
2021
2020
Revenues:
New and used equipment sales
$
123.8
$
82.2
Parts sales
41.4
28.7
Service revenue
38.7
30.2
Rental revenue
33.1
25.2
Rental equipment sales
31.8
14.2
Net revenue
$
268.8
$
180.5
Cost of revenues:
New and used equipment sales
106.5
72.4
Parts sales
28.7
19.6
Service revenue
14.5
11.4
Rental revenue
5.5
4.9
Rental depreciation
19.4
12.9
Rental equipment sales
26.9
12.2
Cost of revenue
$
201.5
$
133.4
Gross profit
$
67.3
$
47.1
General and administrative expenses
64.9
51.1
Depreciation and amortization expense
2.0
1.0
Total general and administrative
expenses
66.9
52.1
Income (loss) from operations
$
0.4
$
(5.0
)
Other income (expense)
Interest expense, floor plan payable – new
equipment
(0.5
)
(0.7
)
Interest expense – other
(5.2
)
(5.2
)
Other income
0.1
0.4
Loss on extinguishment of debt
—
(7.6
)
Total other income (expense)
$
(5.6
)
$
(13.1
)
Loss before taxes
$
(5.2
)
$
(18.1
)
Income tax provision (benefit)
0.5
(1.1
)
Net loss
$
(5.7
)
$
(17.0
)
Basic and diluted loss per share
$
(0.19
)
$
(0.91
)
Basic and diluted weighted average
common shares outstanding
30,355,789
18,767,981
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Three Months Ended March
31,
(amounts in millions)
2021
2020
OPERATING ACTIVITIES
Net loss
$
(5.7
)
$
(17.0
)
Adjustments to reconcile net loss to net
cash flows used in operating activities:
Depreciation and amortization
21.4
13.9
Amortization of debt discount and debt
issuance costs
0.5
0.3
Imputed interest
0.1
—
Gain on sale of assets
—
(0.1
)
Gain on sale of rental equipment
(4.9
)
(2.0
)
Inventory obsolescence
0.2
0.5
Provision for bad debt
0.6
0.4
Loss on debt extinguishment
—
7.6
Repayment of paid-in-kind interest
—
(11.2
)
Share-based compensation
0.3
3.1
Changes in deferred rent
0.2
—
Changes in deferred taxes
0.5
(1.1
)
Changes in:
Accounts receivable
(5.9
)
(3.5
)
Inventories
(34.2
)
(33.6
)
Proceeds from sale of rental equipment
31.8
14.4
Prepaid expenses and other assets
0.5
(0.4
)
Proceeds from floor plans with
manufacturers
84.8
94.2
Payments under floor plans with
manufacturers
(86.9
)
(120.7
)
Accounts payable, accrued expenses,
customer deposits, and other current liabilities
(4.7
)
(2.1
)
Leases and other liabilities
1.1
0.2
Net cash used in operating
activities
$
(0.3
)
$
(57.1
)
INVESTING ACTIVITIES
Proceeds from the sale of assets
0.7
0.1
Expenditures for rental equipment
(6.2
)
(25.5
)
Expenditures for property and
equipment
(1.5
)
(1.2
)
Expenditures for acquisitions, net of cash
acquired
(1.9
)
(91.7
)
Net cash used in investing
activities
$
(8.9
)
$
(118.3
)
FINANCING ACTIVITIES
Expenditures for debt issuance costs
—
(2.7
)
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
73.5
220.2
Payments under lines of credit
(61.7
)
(79.9
)
Proceeds from floor plans with
unaffiliated source
24.2
25.8
Payments under floor plans with
unaffiliated source
(25.3
)
(21.6
)
Proceeds from issuance of long-term debt,
net
—
149.4
Payments on long-term debt
(1.9
)
(0.8
)
Payments on capital lease obligations
(0.2
)
(0.2
)
Equity proceeds from reverse
recapitalization, net
—
175.7
Repurchases of common stock
—
(2.9
)
Net cash provided by financing
activities
$
8.6
$
211.8
NET CHANGE IN CASH
(0.6
)
36.4
Cash, Beginning of year
1.2
0.0
Cash, End of period
$
0.6
$
36.4
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid for interest
$
5.3
$
15.2
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
Three Months Ended
March 31,
(amounts in millions)
2021
2020
Net loss
$
(5.7
)
$
(17.0
)
Depreciation and amortization
21.4
13.9
Interest expense
5.7
5.9
Income tax provision (benefit)
0.5
(1.1
)
EBITDA (1)
$
21.9
$
1.7
Transaction costs (2)
0.6
0.8
Loan administration fees (3)
0.1
0.1
Non-cash adjustments (4)
0.2
0.2
Loss on debt extinguishment (5)
—
7.6
Share-based incentives (6)
0.3
6.6
Other expenses (7)
0.3
0.2
Showroom-Ready Equipment Interest Expense
(8)
(0.5
)
(0.6
)
Adjusted EBITDA (1)
$
22.9
$
16.6
Pro Forma EBITDA—Acquisitions (9)
0.1
7.2
Adjusted Pro Forma EBITDA (1)
$
23.0
$
23.8
(1)
Represents Non-GAAP measure
(2)
Includes expenses related to the
acquisitions, both completed and pending, and public company
preparation costs
(3)
Debt administration fees associated with
debt refinancing activities
(4)
Non-cash adjustments related to deferred
rent expenses
(5)
Represents expenses of debt
extinguishments related to refinancing activities of the business
combination in February 2020
(6)
Reflects equity-based compensation
expenses which includes February 2020 business combination related
activities
(7)
Other expenses primarily related to
severance payments
(8)
Represents interest expense associated
with showroom-ready new and used equipment interest included in
total interest expense above
(9)
Pro forma EBITDA of Flagler, Liftech,
PeakLogix, Hilo, Martin, Howell, Vantage, and ScottTech for periods
in 2020 and forward, assuming each was acquired as of January 1,
2020
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210513005955/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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