- Net revenues increased 41.4% year-over-year to $192.1 million
from $135.9 million
- Industrial and Construction revenues of $95.1 million and $97.0
million, respectively
- Gross profit increased 19.9% to $46.3 million from $38.6
million in last year’s second quarter
- Net loss of $(4.1) million versus net income of $0.4 million
last year
- Adjusted EBITDA* grew 19.2% to $19.9 million for the second
quarter of 2020
- Announced three acquisitions to further penetrate existing
markets, expand geographic footprint and increase presence in fast
growing e-commerce, warehousing and logistics markets
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 second quarter and six months ended June 30, 2020.
CEO Comment:
Ryan Greenawalt, Chief Executive Officer of Alta, said, “Our
solid second quarter results, despite the COVID-19 related
challenges, demonstrate the dexterity of our cost structure and the
capital efficiency of our Parts and Services businesses. We saw
signs of stability and higher demand for both our material handling
and construction equipment and services as the quarter progressed.
We entered the second half of the year at close to full capacity
and are operating at pre-COVID-19 levels.”
Mr. Greenawalt continued, “Additionally, we recently announced
three accretive acquisitions that are perfectly aligned with our
strategy to complement our organic growth with acquisitions that
increase our existing market presence, expand our geographic
footprint, provide a greater presence in the fast growing
e-commerce, warehousing and logistics markets and broaden our OEM
relationships.”
Update on Response to COVID-19:
The Company’s response to the global COVID-19 pandemic has been
measured, swift and determined with an emphasis on health and
safety, operating costs and liquidity. Consistent with the actions
taken by governmental authorities, virtually all of our sales and
back office operations employees began working remotely in
mid-March in order to reduce the spread of COVID-19. Broadly, as
the Company was deemed “essential” by state and local governments,
our facilities were able to remain open, albeit at reduced capacity
during the beginning of the second quarter. As of June 30, 2020,
all of the Company’s branches are fully operational although some
of our administrative employees continued to work remotely. Despite
the Company remaining operational during the second quarter of
2020, certain segments of our customer base were negatively
impacted by COVID-19 and, as such, our revenues were negatively
impacted as well. To mitigate the impact of reduced revenues, the
Company implemented various cost savings measures in the second
quarter of 2020. These cost savings measures were temporary in
nature and were minimized as increased demand for our products and
services returned toward the end of the quarter.
Second Quarter 2020 Financial Highlights:
- Net revenue increased to $192.1 million from $135.9 million in
the second quarter of 2019. Gross profit grew to $46.3 million
compared to $38.6 million.
- Adjusted EBITDA* was $19.9 million in the second quarter of
2020 compared to $16.7 million same period in 2019.
Three months ended June
30,
Increase (Decrease) 2020
versus 2019
Six months ended June
30,
Increase (Decrease) 2020
versus 2019
2020
2019
2020
2019
Revenues:
New and used equipment sales
$
95.1
$
61.2
$
33.9
55.4
%
$
177.3
$
106.0
$
71.3
67.3
%
Parts sales
28.1
20.6
7.5
36.4
%
56.8
37.1
19.7
53.1
%
Service revenue
28.4
22.7
5.7
25.1
%
58.6
39.9
18.7
46.9
%
Rental revenue
26.0
22.1
3.9
17.6
%
51.2
39.1
12.1
30.9
%
Rental equipment sales
14.5
9.3
5.2
55.9
%
28.7
16.1
12.6
78.3
%
Net revenue
$
192.1
$
135.9
$
56.2
41.4
%
$
372.6
$
238.2
$
134.4
56.4
%
Cost of revenues:
New and used equipment sales
83.5
53.5
30.0
56.1
%
155.9
93.2
62.7
67.3
%
Parts sales
19.4
13.6
5.8
42.6
%
39.0
24.5
14.5
59.2
%
Service revenue
11.0
8.1
2.9
35.8
%
22.4
14.3
8.1
56.6
%
Rental revenue
4.5
3.6
0.9
25.0
%
9.4
7.1
2.3
32.4
%
Rental depreciation and amortization
15.0
10.7
4.3
40.2
%
27.9
19.2
8.7
45.3
%
Rental equipment sales
12.4
7.8
4.6
59.0
%
24.6
13.8
10.8
78.3
%
Cost of revenue
$
145.8
$
97.3
$
48.5
49.8
%
$
279.2
$
172.1
$
107.1
62.2
%
Gross profit
$
46.3
$
38.6
$
7.7
19.9
%
$
93.4
$
66.1
$
27.3
41.3
%
Total general and administrative
expenses
45.4
33.5
$
11.9
35.5
%
97.5
59.4
$
38.1
64.1
%
Income (loss) from operations
$
0.9
$
5.1
$
(4.2
)
(82.4
)%
$
(4.1
)
$
6.7
$
(10.8
)
(161.2
)%
Total other income (expense)
$
(5.4
)
$
(4.7
)
$
(0.7
)
14.9
%
$
(18.5
)
$
(8.9
)
$
(9.6
)
107.9
%
(Loss) income before taxes
$
(4.5
)
$
0.4
(4.9
)
(1225.0
)%
$
(22.6
)
$
(2.2
)
(20.4
)
927.3
%
Income tax benefit
(0.4
)
—
(0.4
)
NA
(1.5
)
—
(1.5
)
NA
Net (loss) income
$
(4.1
)
$
0.4
$
(4.5
)
(1125.0
)%
$
(21.1
)
$
(2.2
)
$
(18.9
)
859.1
%
Recent Acquisition Highlights:
- PeakLogix -
PeakLogix is a national material handling systems integrator that
specializes in the design and installation of warehouse automation
and storage systems. The company is recognized for designing
customer solutions using the latest equipment and technology
advancements to deliver process improvement and automation to its
customers.
- HILO Equipment &
Services- HILO Equipment & Services is a privately
held distributor of material handling equipment with three branches
in the New York City metro area. HILO sells new and used materials
handling equipment, partnering with industry leading manufacturers
including Hyster-Yale Group Inc., Kelley and JLG, and offers
repairs and maintenance with an award-winning service team.
- Martin Implement Sales,
Inc.- Martin is 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.
Earnings Call and Webcast
Alta will discuss its second 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 #
8805977 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
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, August 13, 2020, and
12:59 p.m. Eastern Time, August 27, 2020, by calling (800)
585-8367, or (416) 621-4642, with conference ID # 8805977.
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 48 total locations across Michigan, Illinois,
Indiana, New England, New York, Florida and Virginia. 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)
June 30, 2020
December 31, 2019
ASSETS
CURRENT ASSETS
Cash
$
6.4
$
—
Accounts receivable, net of allowances of
$5.7 and $4.4 as of June 30, 2020 and December 31, 2019,
respectively
120.0
101.2
Inventories, net
206.7
137.2
Prepaid expenses and other current
assets
10.0
5.7
Total current assets
343.1
244.1
PROPERTY AND EQUIPMENT, NET
280.3
196.5
OTHER ASSETS
Goodwill
21.7
8.6
Intangible assets, net
17.1
3.0
Other assets
2.1
2.0
Total other assets
40.9
13.6
TOTAL ASSETS
$
664.3
$
454.2
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
CURRENT LIABILITIES
Lines of credit, net
$
109.3
$
72.5
Floor plan payable – new equipment
119.1
87.7
Floor plan payable – used and rental
equipment
45.9
112.5
Current portion of long-term debt
7.8
7.1
Accounts payable
49.3
31.1
Customer deposits
7.3
7.2
Accrued expenses
21.5
16.0
Other current liabilities
15.2
9.3
Total current liabilities
375.4
343.4
LONG-TERM LIABILITIES
Long-term debt, net of current portion
137.9
86.5
Capital lease obligations, net of current
portion
1.0
1.4
Buyback residual obligations, net of
current portion
0.8
0.7
Guaranteed purchase obligation, net of
current portion
7.7
9.0
Lease liability, net of current
portion
3.1
3.7
Deferred tax liability
17.5
—
Other liabilities
6.7
3.1
Warrant liability
—
29.6
TOTAL LIABILITIES
$
550.1
$
477.4
CONTINGENCIES - NOTE 11
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.0001 par value,
1,000,000 authorized and no shares outstanding at June 30, 2020
$
—
$
—
Common stock, $0.0001 par value,
29,511,359 and 7,300,000 shares issued and outstanding at June 30,
2020 and December 31, 2019
—
—
Additional paid-in capital
180.4
—
Treasury stock
(2.9
)
—
Retained deficit
(63.3
)
(23.2
)
TOTAL STOCKHOLDERS’ EQUITY
(DEFICIT)
114.2
(23.2
)
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY (DEFICIT)
$
664.3
$
454.2
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)
2020
2019
2020
2019
Revenues:
New and used equipment sales
$
95.1
$
61.2
$
177.3
$
106.0
Parts sales
28.1
20.6
56.8
37.1
Service revenue
28.4
22.7
58.6
39.9
Rental revenue
26.0
22.1
51.2
39.1
Rental equipment sales
14.5
9.3
28.7
16.1
Net revenue
$
192.1
$
135.9
$
372.6
$
238.2
Cost of revenues:
New and used equipment sales
83.5
53.5
155.9
93.2
Parts sales
19.4
13.6
39.0
24.5
Service revenue
11.0
8.1
22.4
14.3
Rental revenue
4.5
3.6
9.4
7.1
Rental depreciation
15.0
10.7
27.9
19.2
Rental equipment sales
12.4
7.8
24.6
13.8
Cost of revenue
$
145.8
$
97.3
$
279.2
$
172.1
Gross profit
$
46.3
$
38.6
$
93.4
$
66.1
General and administrative expenses
43.7
32.8
94.8
58.1
Depreciation and amortization expense
1.7
0.7
2.7
1.3
Total general and administrative
expenses
45.4
33.5
97.5
59.4
Income (loss) from operations
$
0.9
$
5.1
$
(4.1
)
$
6.7
Other income (expense)
Interest expense, floor plan payable – new
equipment
(0.3
)
(0.8
)
(1.3
)
(1.5
)
Interest expense – other
(5.4
)
(4.2
)
(10.3
)
(8.0
)
Other income
0.3
0.3
0.7
0.6
Loss on extinguishment of debt
—
—
(7.6
)
—
Total other income (expense)
$
(5.4
)
$
(4.7
)
$
(18.5
)
$
(8.9
)
(Loss) income before taxes
$
(4.5
)
$
0.4
$
(22.6
)
$
(2.2
)
Income tax benefit
(0.4
)
—
(1.5
)
—
Net (loss) income
$
(4.1
)
$
0.4
$
(21.1
)
$
(2.2
)
Basic and diluted (loss) income per
share
$
(0.14
)
$
0.05
$
(0.88
)
$
(0.31
)
Basic and diluted weighted average
common shares outstanding
29,039,177
7,300,000
23,903,579
7,300,000
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Six Months Ended June
30,
(amounts in millions)
2020
2019
OPERATING ACTIVITIES
Net loss
$
(21.1
)
$
(2.2
)
Adjustments to reconcile net loss to net
cash flows provided by operating activities:
Depreciation and amortization
30.6
20.5
Amortization of debt discount and debt
issuance costs
0.6
0.4
Inventory obsolescence
0.9
0.9
Gain on sale of assets
(0.1
)
—
Gain on sale of rental fleets
(4.1
)
(2.3
)
Provision for bad debt
2.1
0.8
Loss on debt extinguishment
7.6
—
(Repayment) accrual of paid-in-kind
interest
(11.2
)
2.9
Share-based payment
3.1
—
Changes in deferred taxes
(1.5
)
—
Changes in:
Accounts receivable
3.2
(8.2
)
Inventories
(80.5
)
(36.7
)
Proceeds from rental fleets
28.7
16.1
Prepaid expenses and other assets
(1.2
)
(1.6
)
Proceeds from floor plans with
manufacturers
176.7
127.7
Payments under floor plans with
manufacturers
(192.0
)
(133.6
)
Accounts payable, accrued expenses,
customer deposits, and other current liabilities
3.4
8.3
Leases and other liabilities
0.7
(0.7
)
Net cash used in operating
activities
$
(54.1
)
$
(7.7
)
INVESTING ACTIVITIES
Proceeds from the sale of assets
0.1
—
Expenditures for rental fleets
(23.3
)
(14.0
)
Expenditures for property and
equipment
(2.2
)
(1.2
)
Expenditures for acquisitions, net of cash
acquired
(98.0
)
(65.7
)
Net cash used in investing
activities
$
(123.4
)
$
(80.9
)
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
270.7
88.6
Payments under lines of credit
(152.9
)
(38.3
)
Proceeds from floor plans with
unaffiliated source
46.0
52.5
Payments under floor plans with
unaffiliated source
(46.7
)
(27.4
)
Proceeds from issuance of long-term debt,
net
149.4
15.2
Payments on long-term debt
(2.7
)
(3.5
)
Payments on capital lease obligations
(0.4
)
—
Equity proceeds from reverse
recapitalization, net
175.7
—
Proceeds from disgorgement of short swing
profits
1.6
—
Repurchases of common stock
(2.9
)
—
Net cash provided by financing
activities
$
183.9
$
87.1
NET CHANGE IN CASH
6.4
(1.5
)
Cash, Beginning of year
—
1.5
Cash, End of period
$
6.4
$
—
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid for interest
$
20.7
$
6.2
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
Six months ended June
30,
Three months ended June
30,
(amounts in millions)
2020
2019
2020
2019
Net (loss) income
$
(21.1
)
$
(2.2
)
$
(4.1
)
$
0.4
Depreciation and amortization
30.6
20.5
16.7
11.4
Interest expense
11.6
9.5
5.7
5.0
Income tax (benefit) expense
(1.5
)
—
(0.4
)
—
EBITDA (1)
$
19.6
$
27.8
$
17.9
$
16.8
One-Time Transaction Costs (2)
2.7
0.2
1.9
0.1
Loan Administration Fees (3)
0.2
0.3
0.1
0.2
Non-Cash Adjustments (4)
0.4
0.4
0.2
0.1
Loss on Debt Extinguishment (5)
7.6
—
—
—
Equity-linked Incentives (6)
6.6
—
—
—
Other expenses (7)
0.4
0.1
0.2
0.1
Showroom-Ready Floorplan Interest Expense
(8)
(1.0
)
(1.1
)
(0.4
)
(0.6
)
Adjusted EBITDA
$
36.5
$
27.7
$
19.9
$
16.7
Pro Forma EBITDA—Acquisitions (9)
3.2
16.7
0.4
7.0
Adjusted Pro Forma EBITDA (1)
$
39.7
$
44.4
$
20.3
$
23.7
(1)
Represents Non-GAAP measure.
(2)
Includes expenses related to the
acquisitions, both completed and pending, and public company
preparation costs.
(3)
Debt administration expenses associated
with debt refinancing activities in May 2019 and February 2020 in
connection with the business combination.
(4)
Non-cash adjustments related to deferred
rent expenses.
(5)
Represents expenses of debt
extinguishments related to refinancing activities relating to the
business combination in February 2020.
(6)
Reflects equity-based compensation
expenses related to refinancing activities in February 2020.
(7)
Other non-recurring expenses primarily
related to severance payments
(8)
Represents interest expense associated
with showroom-ready new and used floorplan equipment interest
included in total interest expense above.
(9)
Pro forma EBITDA of NITCO, Flagler,
Liftech and PeakLogix 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/20200813005759/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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