Fourth Quarter 2020
Financial Highlights
- Net revenues increased 65.5% year over year to
$280.4 million
- Construction and Material Handling revenue of
$151.5 million and $128.9 million, respectively
- Gross profit increased 54.1% year over year to
$64.4 million
- Net loss of $(3.2) million
- Adjusted EBITDA* grew 27.5% to $24.6 million
compared to $19.3 million last year
- Completed two acquisitions solidifying
presence in New York State and Midwest construction markets
2020 Full Year
Financial Highlights
- Net revenues increased 56.7% year over year to
$873.6 million
- Construction and Material Handling revenue of
$440.0 million and $433.6 million, respectively
- Gross profit increased 41.0% year over year to
$214.5 million
- Net loss of $(24.0) million; $22.6 million of
costs incurred in connection with reverse recapitalization and
acquisitions, debt extinguishment and share based incentives
- Adjusted EBITDA* increased 20.8% to $83.0
million compared to $68.7 million last year
- Completed seven acquisitions to expand
geographic footprint and increase presence in existing markets
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 fourth quarter and full year ended
December 31, 2020. Note that Alta’s “Material Handling” segment was
previously reported as the “Industrial” segment.
CEO Comment: Ryan Greenawalt, Chief Executive Officer of
Alta, said “Our strong fourth quarter operating performance and
financial results capped off an incredibly successful year for
Alta. In the fourth quarter, we saw continued improvement in our
Material Handling and Construction businesses as our recovery from
the pandemic continues to take hold. Labor utilization improved
over the third quarter and the demand for rental equipment
rebounded. In looking at the full year, we were able to persevere
in a difficult and unprecedented time through the dexterity of our
business model and operational discipline. We were also able to
complete seven accretive acquisitions that increased our existing
market presence, expanded our product lines and OEM relationships,
and complemented our organic growth.”
Mr. Greenawalt continued, “We’re encouraged by the positive
trends in customer demand. We’ve re-branded our Material Handling
business and added new services that will enable us to uniquely
serve the fast-growing warehousing and logistics end markets. We
believe the investments we made in technology, products, and
people, combined with structural tailwinds in infrastructure and
e-commerce, position us well to deliver increased financial results
in 2021.”
Three months ended
December 31,
Increase (Decrease)
2020 versus 2019
Years ended
December 31,
Increase (Decrease)
2020 versus 2019
2020
2019
2020
2019
Revenues:
New and used equipment sales
$
135.1
$
77.5
$
57.6
74.3
%
$
410.3
$
244.6
$
165.7
67.7
%
Parts sales
37.3
22.7
14.6
64.3
%
129.6
82.7
46.9
56.7
%
Service revenue
34.4
25.5
8.9
34.9
%
128.5
92.7
35.8
38.6
%
Rental revenue
35.4
28.3
7.1
25.1
%
118.8
95.2
23.6
24.8
%
Rental equipment sales
38.2
15.4
22.8
148.1
%
86.4
42.2
44.2
104.7
%
Net revenue
$
280.4
$
169.4
$
111.0
65.5
%
$
873.6
$
557.4
$
316.2
56.7
%
Cost of revenues:
New and used equipment sales
116.1
68.8
47.3
68.7
%
356.4
215.4
141.0
65.5
%
Parts sales
25.8
14.7
11.1
75.5
%
89.1
54.1
35.0
64.7
%
Service revenue
13.6
10.3
3.3
32.0
%
49.5
34.6
14.9
43.1
%
Rental revenue
5.4
6.1
(0.7
)
-11.5
%
20.2
17.5
2.7
15.4
%
Rental depreciation and amortization
21.3
14.4
6.9
47.9
%
68.4
47.3
21.1
44.6
%
Rental equipment sales
33.8
13.3
20.5
154.1
%
75.5
36.4
39.1
107.4
%
Cost of revenue
$
216.0
$
127.6
$
88.4
69.3
%
$
659.1
$
405.3
$
253.8
62.6
%
Gross profit
$
64.4
$
41.8
$
22.6
54.1
%
$
214.5
$
152.1
$
62.4
41.0
%
Total general and administrative
expenses
64.9
43.0
21.9
50.9
%
222.6
140.4
82.2
58.5
%
(Loss) income from operations
$
(0.5
)
$
(1.2
)
$
0.7
(58.3
)%
$
(8.1
)
$
11.7
$
(19.8
)
(169.2
)%
Total other income (expense)
$
(5.9
)
$
(4.6
)
$
(1.3
)
28.3
%
$
(22.5
)
$
(47.1
)
$
24.6
(52.2
)%
Loss before taxes
$
(6.4
)
$
(5.8
)
$
(0.6
)
10.3
%
$
(30.6
)
$
(35.4
)
$
4.8
(13.6
)%
Income tax benefit
(3.2
)
—
(3.2
)
NA
(6.6
)
—
(6.6
)
NA
Net loss
$
(3.2
)
$
(5.8
)
$
2.6
(44.8
)%
$
(24.0
)
$
(35.4
)
$
11.4
(32.2
)%
Fourth Quarter and Recent Business Highlights:
- The Company completed the acquisition of the construction
dealership assets of Vantage Equipment, LLC on December 31, 2020.
Vantage Equipment is a construction equipment dealer operating in
Batavia, Syracuse and Albany, New York. The addition of Vantage
strengthens Alta’s presence in New York state and complements
Liftech which serves the Upstate New York material handling
market.
- On October 30, 2020, Alta completed the acquisition of Howell
Tractor and Equipment, LLC, a heavy construction equipment dealer
serving Northern Illinois and Northwest Indiana.
- For the full year, product support revenue, represented by
parts and service revenues, grew 47.1% over the prior year
providing Alta with a steady flow of high margin recurring
revenue.
- The Company continued to add skilled service technicians during
the second half of the year and ended 2020 with approximately 900
technicians, around a 40% increase over the prior year.
Acquisition Activity in 2020:
- Alta completed a total of seven acquisitions across the
Material Handling and Construction businesses in 2020 that were
consistent with the Company’s growth strategy of further
penetrating existing markets, expanding its geographic footprint,
and increasing its product lines and OEM relationships.
Conference Call Information: Alta will discuss its fourth
quarter and full year 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 # 6818648 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 Fourth Quarter and Full
Year 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, March 18, 2021, and 12:59
p.m. Eastern Time, April 1, 2021 by calling (800) 585-8367, or
(416) 621-4642, with conference ID # 6818648.
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)
December 31,
2020
December 31,
2019
ASSETS
CURRENT ASSETS
Cash
$
1.2
$
—
Accounts receivable, net
137.8
101.2
Inventories, net
229.0
137.2
Prepaid expenses and other current
assets
13.6
5.7
Total current assets
381.6
244.1
PROPERTY AND EQUIPMENT, NET
311.9
196.5
OTHER ASSETS
Goodwill
24.3
8.6
Intangible assets, net
26.3
3.0
Other assets
2.1
2.0
Total other assets
52.7
13.6
TOTAL ASSETS
$
746.2
$
454.2
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
CURRENT LIABILITIES
Lines of credit
$
157.7
$
72.5
Floor plan payable — new equipment
127.6
87.7
Floor plan payable — used and rental
equipment
29.8
112.5
Current portion of long-term debt
7.8
7.1
Accounts payable
58.9
31.1
Customer deposits
9.3
7.2
Accrued expenses
30.1
16.0
Other current liabilities
13.1
9.3
Total current liabilities
434.3
343.4
LONG-TERM LIABILITIES
Long-term debt, net of current portion
135.0
86.5
Capital lease obligations, net of current
portion
0.6
1.4
Buyback residual obligations, net of
current portion
0.7
0.7
Guaranteed purchase obligation, net of
current portion
6.9
9.0
Lease liability, net of current
portion
2.5
3.7
Other liabilities
9.3
3.1
Warrant liability
—
29.6
TOTAL LIABILITIES
$
589.3
$
477.4
STOCKHOLDERS’ EQUITY (DEFICIT)
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 December 31, 2020, no shares
issued and outstanding at December 31, 2019
—
—
Common stock, $0.0001 par value,
200,000,000 shares authorized; 30,018,502 issued and outstanding at
December 31, 2020, $0.01 par value, 7,300,000 issued and
outstanding at December 31, 2019
—
—
Additional paid-in capital
216.2
Treasury stock
(5.9
)
Accumulated deficit
(53.4
)
(23.2
)
TOTAL STOCKHOLDERS’ EQUITY
(DEFICIT)
156.9
(23.2
)
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY (DEFICIT)
$
746.2
$
454.2
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY (DEFICIT)
$
746.2
$
454.2
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended December
31,
(in millions, except share and per
share amounts)
2020
2019
Revenues:
New and used equipment sales
$
410.3
$
244.6
Parts sales
129.6
82.7
Service revenue
128.5
92.7
Rental revenue
118.8
95.2
Rental equipment sales
86.4
42.2
Net revenue
$
873.6
$
557.4
Cost of revenues:
New and used equipment sales
356.4
215.4
Parts sales
89.1
54.1
Service revenue
49.5
34.6
Rental revenue
20.2
17.5
Rental depreciation
68.4
47.3
Rental equipment sales
75.5
36.4
Cost of revenue
$
659.1
$
405.3
Gross profit
$
214.5
$
152.1
General and administrative expenses
216.0
137.6
Depreciation and amortization expense
6.6
2.8
Total general and administrative
expenses
222.6
140.4
(Loss) income from operations
$
(8.1
)
$
11.7
Other income (expense)
Interest expense, floor plan payable — new
equipment
(2.3
)
(2.9
)
Interest expense — other
(21.5
)
(17.6
)
Other income
8.9
1.3
Change in fair market value of
warrants
—
(27.9
)
Loss on extinguishment of debt
(7.6
)
—
Total other income (expense)
$
(22.5
)
$
(47.1
)
Loss before taxes
$
(30.6
)
$
(35.4
)
Income tax benefit
(6.6
)
—
Net loss
$
(24.0
)
$
(35.4
)
Basic and diluted loss per share
$
(0.90
)
$
(4.84
)
Basic and diluted weighted average
common shares outstanding
26,612,982
7,300,000
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December
31,
(amounts in millions)
2020
2019
OPERATING ACTIVITIES
Net loss
$
(24.0
)
$
(35.4
)
Adjustments to reconcile net income (loss)
to net cash flows provided by operating activities:
Depreciation and amortization
75.0
50.1
Amortization of debt discount and debt
issuance costs
1.8
1.0
Imputed interest
0.1
—
Gain on sale of assets
—
(0.1
)
Gain on sale of rental equipment
(10.9
)
(5.8
)
Inventory obsolescence
1.0
0.8
Provision for bad debt
4.3
1.8
Loss on debt extinguishment
7.6
—
(Repayment) accrual of paid-in-kind
interest
(11.2
)
6.5
Change in fair value of warrants
—
27.9
Share-based payment
6.7
—
Changes in deferred rent
1.0
—
Changes in deferred taxes
(6.6
)
—
Changes in:
Accounts receivable
(1.5
)
(23.2
)
Inventories
(140.8
)
(72.2
)
Proceeds from sale of rental equipment
86.4
42.2
Prepaid expenses and other assets
(5.3
)
(2.0
)
Proceeds from floor plans with
manufacturers
338.1
213.9
Payments under floor plans with
manufacturers
(376.1
)
(230.4
)
Accounts payable, accrued expenses,
customer deposits, and other current liabilities
14.4
18.8
Leases and other liabilities
1.6
0.6
Net cash used in operating
activities
$
(38.4
)
$
(5.5
)
INVESTING ACTIVITIES
Proceeds from the sale of assets
1.4
0.1
Expenditures for rental equipment
(41.5
)
(19.6
)
Expenditures for property and
equipment
(4.4
)
(2.7
)
Expenditures for acquisitions, net of cash
acquired
(180.0
)
(65.6
)
Net cash used in investing
activities
$
(224.5
)
$
(87.8
)
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
428.7
182.7
Payments under lines of credit
(262.6
)
(138.0
)
Proceeds from floor plans with
unaffiliated source
87.7
119.8
Payments under floor plans with
unaffiliated source
(80.9
)
(79.7
)
Proceeds from issuance of long-term debt,
net
149.4
20.0
Payments on long-term debt
(6.8
)
(12.0
)
Payments on capital lease obligations
(1.1
)
(0.9
)
Equity proceeds from reverse
recapitalization, net
175.7
—
Proceeds from disgorgement of short swing
profits
1.6
—
Proceeds from issuance of common stock,
net
4.0
—
Proceeds from issuance of preferred stock,
net
28.2
—
Repurchases of common stock
(5.9
)
—
Net cash provided by financing
activities
$
264.1
$
91.8
NET CHANGE IN CASH
1.2
(1.5
)
Cash, Beginning of year
—
1.5
Cash, End of year
$
1.2
$
—
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid for interest
$
29.3
$
13.2
Non-cash investing and financing
activities:
Equipment acquired through capital
lease
$
—
$
0.1
ALTA EQUIPMENT GROUP INC. AND
SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
Three months ended
December 31,
Years ended
December 31,
(amounts in millions)
2020
2019
2020
2019
Net loss
$
(3.2
)
$
(5.8
)
$
(24.0
)
$
(35.4
)
Depreciation and amortization
23.4
15.2
75.0
50.1
Interest expense
6.1
5.4
23.8
20.5
Income tax benefit
(3.2
)
—
(6.6
)
—
EBITDA (1)
$
23.1
$
14.8
$
68.2
$
35.2
Change in fair value of warrants (2)
—
(0.4
)
—
27.9
Transaction costs (3)
1.0
3.9
4.9
4.3
Loan administration fees (4)
0.1
0.1
0.4
0.4
Loss on auction sale (5)
—
1.1
—
1.1
Non-cash adjustments (6)
0.3
0.2
1.0
1.7
Loss on debt extinguishment (7)
—
—
7.6
—
Share-based incentives (8)
0.3
—
10.1
—
Other expenses (9)
0.5
0.1
0.9
0.2
Insurance proceeds (10)
—
—
(8.0
)
—
Showroom-ready floorplan interest expense
(11)
(0.7
)
(0.5
)
(2.1
)
(2.1
)
Adjusted EBITDA (1)
$
24.6
$
19.3
$
83.0
$
68.7
Pro Forma EBITDA—Acquisitions (12)
1.6
9.6
15.7
43.8
Adjusted Pro Forma EBITDA (1)
$
26.2
$
28.9
$
98.7
$
112.5
(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) Includes loss associated to auction of used equipment in
October 2019
(6) Non-cash adjustments related to deferred rent expenses
(7) Represents expenses of debt extinguishments related to
refinancing activities relating to the business combination in
February 2020
(8) Reflects equity-based compensation expenses related to
refinancing activities in February 2020 and Restricted Stock Unit
expense in 2020
(9) Other expenses primarily related to severance payments
(10) Key-man life insurance proceeds
(11) Represents interest expense associated with showroom-ready
new and used floorplan equipment interest included in total
interest expense above
(12) Pro forma EBITDA of NITCO, Flagler, Liftech, PeakLogix,
Hilo, Martin, Howell, and Vantage 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/20210318005907/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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