Alta Equipment Group Inc. · NYSE:ALTG
Alta Equipment — Q2 2020 Earnings Presentation
27 slides from Alta Equipment's earnings presentation, Aug 13, 2020
Slide 1: Q2 2020 Earnings Presentation
Q2 2020 Earnings Presentation August 13, 2020
Slide 2: Agenda
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q2 2020 Earnings Presentation | 2
Slide 3: Legal Disclaimers
Legal Disclaimers Forward-Looking Information This presentation includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1996. Alta’s actual results may differ from their expectations, estimates and projections and co
Slide 4: Participants
Introduction Participants Ryan Greenawalt, CEO Tony Colucci, CFO Q2 2020 Earnings Presentation | 4
Slide 5: Agenda
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q2 2020 Earnings Presentation | 5
Slide 6: Q2 2020 Highlights: Strong Operating Performance and Financial Results
CEO Overview Q2 2020 Highlights: Strong Operating Performance and Financial Results Business in recovery and operating at near full capacity ▪ Steady progress as the company experienced higher demand for products and services from the mid-April trough; the Company is currently operating at nearly fu
Slide 7: Recent Acquisition Highlights: Strategy Playing Out
CEO Overview Recent Acquisition Highlights: Strategy Playing Out 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
Slide 8: Summary: Well Positioned for Continued Profitable Growth
CEO Overview Summary: Well Positioned for Continued Profitable Growth ▪ Business returning to pre-pandemic pace; increased visibility and confidence ▪ Strong business model and rapid action to preserve capital has enabled faster recovery ▪ Expanded geographic footprint and broadened OEM relationship
Slide 9: Company Overview
CEO Overview Company Overview Best-in-Class Brand Portfolio Creates Cross-Selling Opportunities Comprehensive Service Offering Across Heavy Equipment and Industrial Products Select Equipment Offering: Industrial Select Equipment Offering: Construction New and Used Equipment & Design Maintenance and
Slide 10: Key Stakeholder Relationships
CEO Overview Key Stakeholder Relationships Collaborative OEM Relationships Skilled Work Force ▪ Alta is consistently acknowledged by OEMs as a top ▪ Skilled technicians are essential to providing dealership partner aftermarket parts and service that customers require - 2019 Leader in Market Share –
Slide 11: Expanding Footprint in Key Geographic Markets
CEO Overview Expanding Footprint in Key Geographic Markets Strategic Expansion ▪ 48 locations throughout Michigan, Indiana, Illinois, Current Locations/Territories Massachusetts, Maine, New Hampshire, Connecticut, New York, Vermont, Florida, and Virginia ▪ Dealership platform with parts and service
Slide 12: Aftermarket Overview
CEO Overview Aftermarket Overview Product Support Solutions We have capabilities to support all makes and models of construction and industrial equipment. SERVICE PARTS • 48 full-service • Parts inventory of locations across 11 approx. $34 million states • Electronically • Approx. half of Alta’s man
Slide 13: Industry and Company Specific Factors in a Downturn
CFO Overview Industry and Company Specific Factors in a Downturn Equipment Dealers and Financial Profile Through Economic Cycles Industry Industry In a Downturn During 2008 – In a Recovery 2010+ 2009 Recession • Reduction in Revenue • Revenue and EBITDA • Revenue reduction of • Alta takes advantage
Slide 14: Agenda
I. Introduction II. CEO Overview III.CFO Overview IV. Appendices Q2 2020 Earnings Presentation | 14
Slide 15: Q2 2020 Financial Summary
CFO Overview Q2 2020 Financial Summary Financial Summary Q2 2020 Summary ▪ $19.9MM in Adjusted EBITDA, or 10.4% Adjusted EBITDA margin on $192.1MM in revenue in Q2 2020. ▪ COVID-related organic revenue decline vs Q1 2020, namely in product support and rental departments. Equipment sales sustained in
Slide 16: COVID-19 Update: Year-to-Date Service Hours
CFO Overview COVID-19 Update: Year-to-Date Service Hours Technician Labor Hours as % of Pre-COVID Base Daily Median 120% Pre-COVID 110% 3/18: Big Three Automakers Initiate Temporary Factory Closures across US 5/18: Big Three Automakers Reopen Factories across 100% 3/24: MI, IN & MA Midwest initiates
Slide 17: COVID-19 Update: Illustrative Monthly Impact
CFO Overview COVID-19 Update: Illustrative Monthly Impact Cost Mitigation based on Flexible Dealership Structure and Management’s Ability to React Key takeaways: 1) Gross profit decline in Parts and Service were 100% offset by cost-cutting measures, leaving EBITDA margins largely intact 2) Revenue “
Slide 18: Capital Allocation / Liquidity Bridge
CFO Overview Capital Allocation / Liquidity Bridge Adjusted EBITDA / Cash Flow Key Takeaways ▪ Despite impacts of COVID-19, Alta was able to maintain liquidity of $150MM3 through Q2 2020, while also: ▪ Servicing Term Loan debt ▪ Acquiring PeakLogix ▪ Strategically investing in Rental Fleet to drive
Slide 19: Q2 2020 Financial Performance
CFO Overview Q2 2020 Financial Performance Revenue / Gross Profit ($MM) Quarterly Year over Year ▪ Revenue increased 41.4%, or $56.2 million $192.1 ▪ Organically, revenue declined only 3.0% or $46.3 41.4% 19.9% $3.3 million Q2 20 v. Q2 19, despite CV19 $135.9 $38.6 ▪ Organic equipment sales increase
Slide 20: Q2 2020 Adjusted EBITDA / Cash Flow
CFO Overview Q2 2020 Adjusted EBITDA / Cash Flow Adj. EBITDA1 / Adj. PF EBITDA1 Quarterly Year over Year Q2 2019 Adjusted EBITDA / Cash Flow $23.7 Q2 2020 Q2 2020 Q2 2019 $19.9 $20.3 ▪ Adjusted EBITDA improved 19.2%, or $3.2MM $16.7 19.2% versus Q2 2019. (14.4%) ▪ Increase primarily related to acqui
Slide 21: Proforma ALTG Financial Profile
CFO Overview Proforma ALTG Financial Profile LTM 2019 1H 2019 1H 2020 6/30/2020 ($MM) 2017 2018 2019 PF+Acq1 PF+Acq1 PF+Acq1 PF+Acq1 Alta Revenue $345.5 $413.0 $557.4 $557.4 $238.2 $372.6 $691.8 Acquisitions Revenue - - - 291.5 168.4 39.6 162.7 Total Revenue $345.5 $413.0 $557.4 $848.9 $406.6 $412.2
Slide 22: Capital Structure / Credit Profile
CFO Overview Capital Structure / Credit Profile Credit Facility Capital Structure ($MM) ▪ At June 30, 2020, $6.4MM of cash on hand 6/30/20 EV/LTM Adj. PF EBITDA EV/LTM Economic EBIT ▪ $110.8MM outstanding balance under $300MM ABL facility as of Cash $6.4 June 30, 2020, Debt:1 ▪ As of June 30, 2020 $
Slide 23: Debt Maturity Runoff
CFO Overview Debt Maturity Runoff Flexible Debt Structure Commentary ▪ Ample liquidity and long-dated maturities provide financial flexibility ▪ Facilities committed for another 4.75 to 5.25 years ▪ Interest Rates: ABL L+175-225bps; Term L+800bps ▪ Light amortization (1.25% quarterly) of Term Note D
Slide 24: Agenda
I. Introduction II. CEO Overview III. CFO Overview IV. Appendices Q2 2020 Earnings Presentation | 24
Slide 25: Adjusted EBITDA Reconciliation
Appendix A Adjusted EBITDA Reconciliation 6 Mos. Ended 6 Mos. Ended LTM ($MM) 2017 2018 2019 Q2 2019 Q2 2020 June 30, 2019 June 30, 2020 6/30/20 GAAP Net Income $5.9 $1.5 ($35.4) $0.4 ($4.1) ($2.2) ($21.1) ($54.3) Depreciation and Amortization 31.5 37.1 50.1 11.4 16.7 20.5 30.6 60.2 Interest Expense
Slide 26: Free Cash Flow Reconciliation
Appendix B Free Cash Flow Reconciliation 6 Mos. Ended 6 Mos. Ended LTM ($MM) 2017 2018 2019 June 30, 2019 June 30, 2020 6/30/20 GAAP Net Income $5.9 $1.5 ($35.4) ($2.2) ($21.1) ($54.3) Depreciation and Amortization 31.5 37.1 50.1 20.5 30.6 60.2 Interest Expense 6.2 15.1 20.5 9.5 11.6 22.6 Income Tax
Slide 27: Free Cash Flow Reconciliation – Capital Expenditure Detail
Appendix B (cont.) Free Cash Flow Reconciliation – Capital Expenditure Detail 6 Mos. Ended 6 Mos. Ended LTM ($MM) 2017 2018 2019 June 30, 2019 June 30, 2020 6/30/20 Replacement of Sold Rental Equipment, at Original Cost 1,2 $40.1 $57.3 $56.9 $22.9 $35.9 $69.9 3 Capitalized Costs to Maintain Fleet (1