Second Quarter Financial
Highlights:
- Net revenues increased 52.4% year over year to $292.7
million
- Construction and Material Handling revenue of $181.1 million
and $111.6 million, respectively
- Product Support gross profit increased $13.4 million year over
year to $39.5 million
- Net loss of ($15.7) million available to common shareholders
compared to ($4.1) million prior year
- Adjusted EBITDA* grew 40.7% to $28.0 million compared to $19.9
million in Q2 2020
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 second quarter ended June 30, 2021.
CEO Comment:
Ryan Greenawalt, Chief Executive Officer of Alta, said “Our
second quarter performance reflects a positive operating
environment across the material handling and construction markets
we serve. The constrained supply-chain affecting our manufacturing
partners has driven demand for higher margin product support
offerings and greater rental utilization. Tightened supply has
further elevated equipment pricing across the industry and provides
unique opportunities to strategically sell rental fleet, satisfy
customer demand for equipment, and achieve field population targets
traditionally designated for new equipment installs. We believe our
performance in the second quarter further validates our ability to
adapt quickly and efficiently to a variety of market conditions,
which has led to healthy year over year and sequential adjusted
EBITDA growth.”
Mr. Greenawalt, concluded, “The strength of our first half
results, coupled with a record backlog in our Construction and
Material Handling businesses, position us well to meet our full
year growth objectives and deliver value to shareholders.”
Three months ended
June 30,
Increase
(Decrease)
Six months ended
June 30,
Increase
(Decrease)
2021
2020
2021 versus 2020
2021
2020
2021 versus 2020
Revenues:
New and used equipment sales
$
132.0
$
95.1
$
36.9
38.8
%
$
255.8
$
177.3
$
78.5
44.3
%
Parts sales
44.1
28.1
16.0
56.9
%
85.5
56.8
28.7
50.5
%
Service revenue
42.4
28.4
14.0
49.3
%
81.1
58.6
22.5
38.4
%
Rental revenue
38.2
26.0
12.2
46.9
%
71.3
51.2
20.1
39.3
%
Rental equipment sales
36.0
14.5
21.5
148.3
%
67.8
28.7
39.1
136.2
%
Net revenue
$
292.7
$
192.1
$
100.6
52.4
%
$
561.5
$
372.6
$
188.9
50.7
%
Cost of revenues:
New and used equipment sales
112.5
83.5
29.0
34.7
%
219.0
155.9
63.1
40.5
%
Parts sales
30.6
19.4
11.2
57.7
%
59.3
39.0
20.3
52.1
%
Service revenue
16.4
11.0
5.4
49.1
%
30.9
22.4
8.5
37.9
%
Rental revenue
5.2
4.5
0.7
15.6
%
10.7
9.4
1.3
13.8
%
Rental depreciation and amortization
21.3
15.0
6.3
42.0
%
40.7
27.9
12.8
45.9
%
Rental equipment sales
29.8
12.4
17.4
140.3
%
56.7
24.6
32.1
130.5
%
Cost of revenue
$
215.8
$
145.8
$
70.0
48.0
%
$
417.3
$
279.2
$
138.1
49.5
%
Gross profit
$
76.9
$
46.3
$
30.6
66.1
%
$
144.2
$
93.4
$
50.8
54.4
%
Total general and administrative
expenses
73.7
45.4
$
28.3
62.3
%
140.6
97.5
$
43.1
44.2
%
Income (loss) from operations
$
3.2
$
0.9
$
2.3
255.6
%
$
3.6
$
(4.1
)
$
7.7
(187.8
)%
Total other income (expense)
$
(17.8
)
$
(5.4
)
$
(12.4
)
229.6
%
$
(23.4
)
$
(18.5
)
$
(4.9
)
26.5
%
Loss before taxes
$
(14.6
)
$
(4.5
)
(10.1
)
224.4
%
$
(19.8
)
$
(22.6
)
2.8
(12.4
)%
Income tax provision (benefit)
—
(0.4
)
0.4
(100.0
)%
0.5
(1.5
)
2.0
(133.3
)%
Net loss
$
(14.6
)
$
(4.1
)
(10.5
)
256.1
%
$
(20.3
)
$
(21.1
)
0.8
(3.8
)%
Preferred Stock Dividends
(1.1
)
—
(1.1
)
—
(1.1
)
—
(1.1
)
—
Net loss available to common
shareholders
$
(15.7
)
$
(4.1
)
(11.6
)
282.9
%
$
(21.4
)
$
(21.1
)
(0.3
)
1.4
%
Recent Business Highlights:
- During the quarter, Alta completed the full integration of
prior acquisitions – Flagler Construction Equipment, Liftech
Equipment, and Hilo Equipment & Services onto the company’s ERP
system, now having fully integrated six of its eight acquisitions
since 2019. The integration will provide for efficiencies relative
to operating a single source of information and gives management
improved, real-time visibility into these business units.
- On April 1, 2021, the Company refinanced its capital structure
via completion of a $315 million second lien debt offering and
amended its credit agreements with our senior lending group. Among
other benefits, the refinance immediately improved the Company’s
liquidity position, reduced our incremental cost of capital, and
eliminated certain restrictive covenants to support the execution
of our growth strategy.
- Product support revenue, which includes parts and service
sales, grew 53.1% year over year in the second quarter providing an
ongoing higher margin, recurring revenue stream.
- On August 10, Alta announced an agreement with Nikola
Corporation, a designer and manufacturer of heavy-duty commercial
battery-electric vehicles (BEV) and fuel-cell electric vehicles
(FCEV) naming Alta as the authorized dealer to sell and service
Nikola medium and long-haul Class 8 EV/FCEV trucks in the New York,
New Jersey, eastern Pennsylvania, and New England markets. The
agreement marks Alta’s expansion into the Class 8 commercial
electric vehicle segment and builds upon its eMobility
strategy.
Full Year Financial Guidance:
The Company maintained its guidance range, and expects to report
Adjusted EBITDA between $110 million to $115 million, net of new
equipment floorplan interest, for the full year 2021.
Conference Call Information:
Alta will discuss its second 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 #
6487339 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 Second 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, August 12, 2021, and
12:59 p.m. Eastern Time, August 26, 2021 by calling (800) 585-8367,
or (416) 621-4642, with conference ID # 6487339.
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 37 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.altg.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, 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)
June 30, 2021
December 31, 2020
ASSETS
CURRENT ASSETS
Cash
$
1.8
$
1.2
Accounts receivable, net of allowances of
$9.4 and $7.1 as of June 30, 2021, and December 31, 2020,
respectively
154.9
137.8
Inventories, net
224.9
229.0
Prepaid expenses and other current
assets
21.8
13.6
Total current assets
403.4
381.6
PROPERTY AND EQUIPMENT, NET
327.0
311.9
OTHER ASSETS
Goodwill
24.4
24.3
Intangible assets, net
27.0
26.3
Other assets
1.3
2.1
Total other assets
52.7
52.7
TOTAL ASSETS
$
783.1
$
746.2
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Lines of credit, net
$
31.3
$
157.7
Floor plan payable – new equipment
118.4
127.6
Floor plan payable – used and rental
equipment
39.2
29.8
Current portion of long-term debt
—
7.8
Accounts payable
67.5
58.9
Customer deposits
13.6
9.3
Accrued expenses
34.4
30.1
Other current liabilities
15.8
13.1
Total current liabilities
320.2
434.3
LONG-TERM LIABILITIES
Long-term debt, net of current portion
309.3
135.0
Capital lease obligations, net of current
portion
0.3
0.6
Buyback residual obligations, net of
current portion
0.5
0.7
Lease liability, net of current
portion
1.9
2.5
Guaranteed purchase obligation, net of
current portion
5.6
6.9
Other liabilities
9.3
9.3
TOTAL LIABILITIES
$
647.1
$
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 June 30, 2021, and December
31, 2020
$
—
$
—
Common stock, $0.0001 par value,
200,000,000 shares authorized; 32,363,376 issued and outstanding at
June 30, 2021, 30,018,502 issued and outstanding at December 31,
2020
—
—
Additional paid-in capital
216.7
216.2
Treasury stock
(5.9
)
(5.9
)
Accumulated deficit
(74.8
)
(53.4
)
TOTAL STOCKHOLDERS’ EQUITY
136.0
156.9
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
783.1
$
746.2
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June
30,
Six Months Ended June
30,
(in millions, except share and per
share amounts)
2021
2020
2021
2020
Revenues:
New and used equipment sales
$
132.0
$
95.1
$
255.8
$
177.3
Parts sales
44.1
28.1
85.5
56.8
Service revenue
42.4
28.4
81.1
58.6
Rental revenue
38.2
26.0
71.3
51.2
Rental equipment sales
36.0
14.5
67.8
28.7
Net revenue
$
292.7
$
192.1
$
561.5
$
372.6
Cost of revenues:
New and used equipment sales
112.5
83.5
219.0
155.9
Parts sales
30.6
19.4
59.3
39.0
Service revenue
16.4
11.0
30.9
22.4
Rental revenue
5.2
4.5
10.7
9.4
Rental depreciation
21.3
15.0
40.7
27.9
Rental equipment sales
29.8
12.4
56.7
24.6
Cost of revenue
$
215.8
$
145.8
$
417.3
$
279.2
Gross profit
$
76.9
$
46.3
$
144.2
$
93.4
General and administrative expenses
71.6
43.7
136.5
94.8
Depreciation and amortization expense
2.1
1.7
4.1
2.7
Total general and administrative
expenses
73.7
45.4
140.6
97.5
Income (loss) from operations
$
3.2
$
0.9
$
3.6
$
(4.1
)
Other income (expense)
Interest expense, floor plan payable – new
equipment
(0.5
)
(0.3
)
(1.0
)
(1.3
)
Interest expense – other
(5.4
)
(5.4
)
(10.6
)
(10.3
)
Other income
—
0.3
0.1
0.7
Loss on extinguishment of debt
(11.9
)
—
(11.9
)
(7.6
)
Total other income (expense)
$
(17.8
)
$
(5.4
)
$
(23.4
)
$
(18.5
)
Loss before taxes
$
(14.6
)
$
(4.5
)
$
(19.8
)
$
(22.6
)
Income tax provision (benefit)
—
(0.4
)
0.5
(1.5
)
Net loss
$
(14.6
)
$
(4.1
)
$
(20.3
)
$
(21.1
)
Preferred Stock Dividends
(1.1
)
—
(1.1
)
—
Net loss available to common
shareholders
$
(15.7
)
$
(4.1
)
$
(21.4
)
$
(21.1
)
ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIESCONSOLIDATED
STATEMENTS OF CASH FLOWS
Six Months Ended June
30,
(amounts in millions)
2021
2020
OPERATING ACTIVITIES
Net loss
$
(20.3
)
$
(21.1
)
Adjustments to reconcile net loss to net
cash flows provided by (used in) operating activities:
Depreciation and amortization
44.8
30.6
Amortization of debt discount and debt
issuance costs
0.8
0.6
Amortization of fair market rent
0.1
—
Imputed interest
0.2
—
Gain on sale of assets
—
(0.1
)
Gain on sale of rental equipment
(11.1
)
(4.1
)
Inventory obsolescence
0.4
0.9
Provision for bad debt
2.3
2.1
Loss on debt extinguishment
11.9
7.6
Share based compensation
0.5
3.1
Changes in deferred rent
0.5
—
(Repayment) accrual of paid-in-kind
interest
—
(11.2
)
Changes in deferred taxes
0.5
(1.5
)
Changes in:
Accounts receivable
(18.6
)
3.2
Inventories
(87.4
)
(80.5
)
Proceeds from sale of rental equipment
67.8
28.7
Prepaid expenses and other assets
(8.3
)
(1.2
)
Proceeds from floor plans with
manufacturers
192.8
176.7
Payments under floor plans with
manufacturers
(186.8
)
(192.0
)
Accounts payable, accrued expenses,
customer deposits, and other current liabilities
19.5
3.4
Leases and other liabilities
(1.0
)
0.7
Net cash provided by (used in)
operating activities
$
8.6
$
(54.1
)
INVESTING ACTIVITIES
Proceeds from the sale of assets
1.1
0.1
Expenditures for rental equipment
(22.8
)
(23.3
)
Expenditures for property and
equipment
(3.3
)
(2.2
)
Expenditures for acquisitions, net of cash
acquired
(2.6
)
(98.0
)
Net cash used in investing
activities
$
(27.6
)
$
(123.4
)
FINANCING ACTIVITIES
Expenditures for debt issuance costs
(1.6
)
(2.7
)
Extinguishment of floor plans and line of
credit
—
(132.9
)
Extinguishment of long-term debt
(153.1
)
(82.0
)
Redemption of former shareholder notes
payable
—
(6.7
)
Extinguishment of warrant liability
—
(29.6
)
Proceeds from lines of credit
178.1
270.7
Payments under lines of credit
(304.3
)
(152.9
)
Proceeds from floor plans with
unaffiliated source
52.3
46.0
Payments under floor plans with
unaffiliated source
(57.7
)
(46.7
)
Proceeds from issuance of long-term debt,
net
—
149.4
Proceeds from issuance of Notes
310.2
—
Preferred dividends paid
(1.1
)
—
Payment of promissory note
(1.0
)
—
Payments on long-term debt
(1.9
)
(2.7
)
Payments on capital lease obligations
(0.3
)
(0.4
)
Equity proceeds from reverse
recapitalization, net
—
175.7
Proceeds from issuance of preferred
stock
—
—
Proceeds from disgorgement of short swing
profits
—
1.6
Repurchases of common stock
—
(2.9
)
Net cash provided by financing
activities
$
19.6
$
183.9
NET CHANGE IN CASH
0.6
6.4
Cash, Beginning of year
1.2
—
Cash, End of period
$
1.8
$
6.4
ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIESRECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
Three Months Ended June
30,
Six Months Ended June
30,
(amounts in millions)
2021
2020
2021
2020
Net loss
$
(15.7
)
$
(4.1
)
$
(21.4
)
$
(21.1
)
Depreciation and amortization
23.4
16.7
44.8
30.6
Interest expense
5.9
5.7
11.6
11.6
Income tax provision (benefit)
—
(0.4
)
0.5
(1.5
)
EBITDA (1)
$
13.6
$
17.9
$
35.5
$
19.6
Transaction costs (2)
0.5
1.9
1.1
2.7
Loan administration fees (3)
0.1
0.1
0.2
0.2
Non-cash adjustments (4)
0.3
0.2
0.5
0.4
Loss on debt extinguishment (5)
11.9
—
11.9
7.6
Share-based incentives (6)
0.2
—
0.5
6.6
Other expenses (7)
0.8
0.2
1.1
0.4
Preferred stock dividend (8)
1.1
—
1.1
—
Showroom-Ready Equipment Interest Expense
(9)
(0.5
)
(0.4
)
(1.0
)
(1.0
)
Adjusted EBITDA (1)
$
28.0
$
19.9
$
50.9
$
36.5
Pro Forma EBITDA—Acquisitions (10)
—
4.5
0.1
11.7
Adjusted Pro Forma EBITDA (1)
$
28.0
$
24.4
$
51.0
$
48.2
(1) Represents Non-GAAP measure
(2) Includes expenses related to the acquisitions and capital
raise, 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
and debt modification in Q2 2021
(6) Reflects equity-based compensation expenses which includes
February 2020 business combination related activities
(7) Other expenses primarily related to severance payments
(8) Expenses related to preferred stock dividend payments
(9) Represents interest expense associated with showroom-ready
new and used equipment interest included in total interest expense
above
(10) Pro forma EBITDA of acquisitions completed 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/20210812005848/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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