- Net revenues increased 35% year-over-year to $557.4 million,
led by the acquisition of Northland Industrial Truck Co. (“NITCO”)
in May of 2019 and continued growth in Alta Equipment Group Inc.’s
core businesses
- Industrial revenues were $312.3 million, an increase of $110.0
million, or 54.4%, compared to $202.3 million a year ago, primarily
related to the NITCO acquisition
- Construction revenues were $245.1 million, an increase of $34.4
million, or 16.3%, compared to $210.7 million a year ago
- Gross profit increased to 27.3%, compared to 26.7% a year
ago
Alta Equipment Group Inc. (NYSE: ALTG) (“Alta”), a leading
provider of premium industrial and construction equipment and
related services, today announced financial results for the full
year 2019. The financial results reflect the twelve months ended
December 31, 2019, prior to the recent closing of the business
combination on February 14, 2020 of the recent business combination
between Alta’s predecessor, Alta Equipment Holdings, Inc., and B.
Riley Principal Merger Corp., a special purpose acquisition company
sponsored by an affiliate of B. Riley Financial, Inc. The business
combination provided net proceeds to Alta of $538 million, through
a combination of equity and debt financings, which Alta intends to
use to fund its operations.
Ryan Greenawalt, Chief Executive Officer of Alta, said, “Our
full year 2019 results underline the strength in our core business
and the robust opportunities in our acquisition pipeline. During
the year we added NITCO, a quality dealer in the New England
material handling market as part of our acquisition strategy. The
additions of Flagler CE Holdings, LLC and Liftech Equipment
Companies, Inc. in early 2020 provide further scale and end market
diversification to our dealer platform and a great opportunity to
grow our aftermarket parts sales and service business through
geographic expansion. The closing of the business combination marks
a significant milestone in Alta’s proud history, strengthens our
capital structure to weather the impacts of the COVID-19 pandemic
and will ultimately support Alta’s continue growth as an industry
leader.”
Recent Business Highlights:
- Acquired NITCO on May 1, 2019. NITCO had audited revenue of
$126 million for the fiscal year ended October 31, 2018
- Became a public company on February 18, 2020, following the
business combination with B. Riley Principal Merger Corp.
- Completed the acquisitions of Liftech Equipment Companies, Inc.
and Flagler CE Holdings, LLC which increase the company’s presence
in key geographic markets and expands opportunities in the Florida
market
- Approximately half of Alta’s employees are skilled technicians
and fuels the company’s part sales and service business
- Improved balance sheet strength through recent debt
restructuring and equity raise
Full Year 2019 Financial Results:
Years ended December
31,
(in millions, except percent)
2019
2018
Change $
Change %
Revenues:
New and used equipment sales
$
244.6
$
181.7
$ 62.9
35%
Parts sales
82.7
61.3
21.4
35%
Service revenue
92.7
61.6
31.1
50%
Rental revenue
95.2
74.1
21.1
28%
Rental equipment sales
42.2
34.3
7.9
23%
Net revenue
$
557.4
$
413.0
$ 144.4
35%
Cost of revenues:
New and used equipment sales
215.4
158.1
57.3
36%
Parts sales
54.1
40.6
13.5
33%
Service revenue
34.6
24.2
10.4
43%
Rental revenue
17.5
15.1
2.4
16%
Rental depreciation
47.3
34.4
12.9
38%
Rental equipment sales
36.4
30.5
5.9
19%
Cost of revenue
$
405.3
$
302.9
$ 102.4
34%
Gross profit
152.1
110.1
42.0
1%
Total general and administrative
expenses
140.4
94.3
46.1
49%
Income from operations
11.7
15.8
(4.1)
-26%
Total other income (expense)
(47.1
)
(14.3
)
(32.8)
229%
Net (loss) income
$
(35.4
)
$
1.5
(36.9)
-2460%
Earnings Call and Webcast
Alta will discuss its full year 2019 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 # 2375858 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 Full Year 2019 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, March 25, 2020, and 12:59
p.m. Eastern Time, April 8, 2020, by calling (800) 585-8367, or
(416) 621-4642, with conference ID # 2375858.
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
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 43 total locations across Michigan, Illinois,
Indiana, New England, New York 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; 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 (8) 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 HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEET
(amounts in millions, except share and
per share amounts)
December 31, 2019
December 31, 2018
ASSETS
CURRENT ASSETS
Cash
$
—
$
1.5
Accounts receivable, net
101.2
65.9
Inventories, net
137.2
109.7
Prepaid expenses and other current
assets
5.7
3.3
Total current assets
244.1
180.4
PROPERTY AND EQUIPMENT, NET
196.5
152.5
OTHER ASSETS
Goodwill
8.6
7.6
Intangible assets, net
3.0
0.1
Other assets
2.0
2.0
Total other assets
13.6
9.7
TOTAL ASSETS
$
454.2
$
342.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
CURRENT LIABILITIES
Lines of credit
$
72.5
$
27.7
Floor plan payable – new equipment
87.7
68.3
Floor plan payable – used and rental
equipment
112.5
108.6
Current portion of long-term debt
7.1
8.0
Accounts payable
31.1
22.5
Customer deposits
7.2
2.8
Accrued expenses
16.0
8.3
Other current liabilities
9.3
5.0
Total current liabilities
343.4
251.2
LONG-TERM LIABILITIES
Long-term debt, net of current portion
86.5
70.1
Capital lease obligations, net of current
portion
1.4
1.2
Buyback residual obligations, net of
current portion
0.7
-
Guaranteed purchase obligation, net of
current portion
9.0
1.7
Lease liability, net of current
portion
3.7
0.9
Other liabilities
3.1
3.6
Warrant liability
29.6
1.7
TOTAL LIABILITIES
$
477.4
$
330.4
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, $0.01 par value, 300,000
shares authorized; 18,980 issued and outstanding at December 31,
2019 and 2018
—
—
Retained earnings (deficit)
(23.2
)
12.2
TOTAL STOCKHOLDERS’ EQUITY
(DEFICIT)
(23.2
)
12.2
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY (DEFICIT)
$
454.2
$
342.6
ALTA EQUIPMENT HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME
Years ended December
31,
(amounts in millions)
2019
2018
Revenues:
New and used equipment sales
$
244.6
$
181.7
Parts sales
82.7
61.3
Service revenue
92.7
61.6
Rental revenue
95.2
74.1
Rental equipment sales
42.2
34.3
Net revenue
$
557.4
$
413.0
Cost of revenues:
New and used equipment sales
215.4
158.1
Parts sales
54.1
40.6
Service revenue
34.6
24.2
Rental revenue
17.5
15.1
Rental depreciation
47.3
34.4
Rental equipment sales
36.4
30.5
Cost of revenue
$
405.3
$
302.9
Gross profit
$
152.1
$
110.1
General and administrative expenses
137.6
92.0
Depreciation and amortization expense
2.8
2.3
Total general and administrative
expenses
140.4
94.3
Income from operations
$
11.7
$
15.8
Other income (expense)
Interest expense, floor plan payable – new
equipment
(2.9
)
(1.9
)
Interest expense – other
(17.6
)
(13.2
)
Other income
1.3
1.2
Change in fair market value of
warrants
(27.9
)
(0.4
)
Total other income (expense)
$
(47.1
)
$
(14.3
)
Net income (loss)
$
(35.4
)
$
1.5
ALTA EQUIPMENT HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Period Ended December
31,
(amounts in millions)
2019
2018
OPERATING ACTIVITIES
Net (loss) income
$
(35.4
)
$
1.5
Adjustments to reconcile net income (loss)
to net cash flows provided by operating activities:
Depreciation and amortization
50.1
37.1
Inventory obsolescence
0.8
0.5
Gain on sale of assets
(0.1
)
(0.1
)
Provision for bad debt
1.8
1.3
Paid-in-kind interest
6.5
4.7
Interest expense – debt issuance costs
0.8
0.8
Interest expense – debt discount
0.2
0.2
Change in fair value of warrants
27.9
0.4
Changes in:
Accounts receivable
(23.2
)
(14.0
)
Inventories and rental fleet
(35.8
)
(64.2
)
Prepaid expenses and other assets
(2.0
)
1.4
Proceeds from floor plans with
manufacturers
213.9
209.3
Payments under floor plans with
manufacturers
(230.4
)
(175.4
)
Accounts payable, accrued expenses,
customer deposits, and other current liabilities
18.8
(5.2
)
Leases and other liabilities
0.6
(1.9
)
Net cash used in operating
activities
$
(5.5
)
$
(3.6
)
INVESTING ACTIVITIES
Proceeds from the sale of assets
0.1
0.3
Expenditures for property and
equipment
(22.3
)
(34.6
)
Expenditures for acquisitions, net of cash
acquired
(65.6
)
(4.7
)
Net activity on notes and land contract
receivable
-
(0.4
)
Net cash used in investing
activities
$
(87.8
)
$
(39.4
)
FINANCING ACTIVITIES
Expenditures for debt issuance costs
(0.1
)
(0.3
)
Proceeds from lines of credit
182.7
20.2
Payments under lines of credit
(138.0
)
(5.5
)
Proceeds from floor plans with
unaffiliated source
119.8
72.5
Payments under floor plans with
unaffiliated source
(79.7
)
(54.1
)
Proceeds from issuance of long-term
debt
20.0
20.4
Payments on long-term debt
(12.0
)
(8.1
)
Payments on capital lease obligations
(0.9
)
(0.7
)
Net cash provided by financing
activities
$
91.8
$
44.4
NET CHANGE IN CASH
(1.5
)
1.4
Cash, Beginning of year
1.5
0.1
Cash, End of year
$
(0.0
)
$
1.5
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid for interest
$
13.2
$
8.8
Non-cash investing and financing
activities:
Equipment acquired through capital
lease
$
0.1
$
0.5
ALTA EQUIPMENT HOLDINGS, INC.
AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
Period Ended December
31,
(amounts in millions)
2019
2018
Change $
Net (loss) income
$
(35.4)
$
1.5
$ (36.9)
Depreciation and amortization
50.1
37.1
13.0
Interest expense
20.5
15.1
5.4
EBITDA
$
35.2
$
53.7
$ (18.5)
Adjusted EBITDA:
Proforma EBITDA - Northland
1/1/19-4/30/191
5.6
-
5.6
Change in fair value of warrants2
27.9
0.4
27.5
Transaction fees3
4.3
0.1
4.2
Branch start-up costs4
-
0.3
(0.3)
Loan administration fees5
0.4
0.3
0.1
Loss on auction sale6
1.1
-
1.1
Non-cash adjustment for aged WIP7
0.2
-
0.2
Non-cash adjustment for inventory
reserves8
0.8
0.5
0.3
Non-cash deferred rent adjustment9
0.7
0.7
-
New floorplan interest expense10
(2.2)
(1.5)
(0.7)
Adjusted EBITDA
$
74.0
$
54.5
$ 19.5
1 Prorated EBITDA of audited six months
ended April 30, 2019
2 Represents mark to market valuation for
warrant consistent with GS redemption - non-cash adjustment
3 Expenses related to transactions (NITCO,
Flagler, Liftech) and public company preparations
4 Costs associated with new branch opening
in IL
5 Reflects debt administration fees
associated with debt re-finance activity in May 2019
6 Represents loss associated to auction of
CE used equipment in October
7 Reflects non-cash adjustment for
non-recurring aged WIP write-off
8 Non-cash adjustment non-recurring
setting of reserve levels
9 Represents deferred rent expense
adjustments
10 Represents interest expense associated
with showroom-ready new floorplan equipment interest included in
interest above
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200325005729/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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