Alta Equipment Group Inc. (ALTG) on Q3 2021 Results - Earnings Call Transcript

Operator: Good day, and thank you for standing by, and welcome to the Altice Whitman Group Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer session. I would now like to hand the conference over to your speaker today, Jason Dammeyer, Director. Please go ahead. Jason Dammeyer: Thank you, Celine. Good afternoon, everyone, and thank you for joining us today. A press release detailing Alta’s third quarter 2021 financial results was issued this afternoon and is posted on our website, along with the presentation designed to assist you in understanding the company’s results. On the call with me today are Ryan Greenawalt, our Chairman and CEO; and Tony Colucci, our Chief Financial Officer. For today’s call, management will first provide a review of the third quarter financial results. We will begin with some prepared remarks before we open the call for your questions. Before we get started, I’d like to remind everyone that this conference call may contain certain forward-looking statements, including statements about future financial results, our business strategy and financial outlook, achievements of the company and other nonhistorical statements as described in our press release. These forward-looking statements are subject to both known and unknown risks, uncertainties and assumptions, including those related to altered growth, market opportunities and general economic and business conditions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Although we believe these expectations are reasonable, we undertake no obligation to revise any statement to reflect changes that occur after this call. Descriptions of these and other risks that could cause actual results to differ materially from these forward-looking statements are discussed in our reports filed with the SEC, including our press release that was issued today. During this call, we may present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today’s press release and can be found on our website at investor.altaequipment.com. I will now turn the call over to Ryan. Ryan Greenawalt: Thank you, Jason, and welcome, everyone, to our third quarter 2021 earnings call. On the call today, I will provide highlights on the quarter, give an overview of the persisting industry dynamics and discuss the progress we made on our strategic growth opportunities. Tony will then go into more detail on the financials. We had a great quarter. Net revenues increased 33.7% year-over-year to $295 million with adjusted EBITDA growth of 43.4% to $31.4 million and high-margin product support revenue, including parts and service sales grew 22.1% in the third quarter. Drivers in the quarter included the current favorable market dynamics, outperformances in our New England Upstate New York and Florida regions, the fourth consecutive quarter of above average equipment sales, which will help to drive future product support opportunities, increased rental revenue driven by supply chain constraints, continued strength in our construction segments, strong growth in product support and the initial benefits of the recent ERP integration, which transitioned our acquired businesses onto a centralized platform, driving synergies, creating cross-selling opportunities and streamlining operations. On the labor front, productivity remained at benchmark levels, driven by robust service demand. To meet this demand, we have continued to hire technicians. Looking ahead, we continue to recruit aggressively. We hired additional recruiting support staff and are currently recruiting across all geographies. Third quarter market conditions led to strong demand for new and used equipment, increased rental fleet utilization and a growing need for replacement parts and services. Alta remains well positioned to take advantage of the current price appreciation, high rental and labor rates to drive growth across all markets. The breadth and diversity of our equipment portfolio, our extensive inventory and rental fleet and our best-in-class service and parts business give us a meaningful competitive advantage. These capabilities will allow us to meet customer demand and provide a workaround for supply constraints while driving current demand, new customer growth and long-term value in the business. We also made progress on our long-term strategic opportunities. Peak Logic continued to add to its record backlog while attracting new customers. We plan to leverage this business strategically across our enterprise as we seek opportunities to expand our relationships and cross-sell equipment to these customers. We are excited about this business’ trajectory and see a great deal of opportunity, especially since supply chain constraints and emphasize the need for updated and streamlined warehousing and logistics solutions. Our e-mobility initiative continued to progress, led by our agreement with Nikola Motors to exclusively sell in service Nikola, Class 8 trucks in the New York, New Jersey, Eastern Pennsylvania and New England markets. We expect the Nikola trucks will begin rolling out in the first half of 2022, and we have been planning on all fronts to assure we are prepared to meet the growing demand within the EV space, delivering our exceptional service to Nikola customers. Stay tuned. In October, we successfully held our INNOVATE 21 event at Gillette Stadium, which brought together 500 customers, guests, manufacturing partners and team members. The event showcased the most recent innovations in our Material Handling business, including the latest in integration and automation from Peak Logix. The highlight of this successful event was the Nikola Tre bad vehicle, the first product offering of our commercial electric vehicle business that will complement our construction and material handling segments. Additionally, we recently announced two acquisition targets that align our accretive and strategic M&A criteria and growth strategy. In early September, we acquired Baron Industries, a dock and door company that services the New England market. The addition of this strategic acquisition increases our warehousing and logistics capabilities and complements our Peak Logic business, expanding our full-service materials handling offering in a growing market. We also acquired Gibson Machinery, a premier equipment distributor based near Cleveland that marks our first location in Ohio as we continue to expand our construction equipment geography and the breadth of our OEM relationships. Both of these acquisitions support key growth areas of our growth strategy, including expanding our geographic reach with an increasingly wider group of manufacturers, providing quality service from our skilled technical workforce, expanding capabilities and driving innovation within our strategic initiatives. Our pipeline remains active as we continue to search for accretive deals that will help drive and support our growth strategy and long-term value. Our continued progress in the third quarter is carrying momentum into the end of 2021. Looking ahead, we believe Alta is well positioned for continued success. We have grown each segment of our business, added skilled technicians, further diversified into a new vertical and drove continued momentum in our warehousing and logistics business. Additionally, we have integrated the acquisitions we have made since becoming public, and we did all of this while remaining in an enviable financial position with a solid balance sheet. As we move into 2022 and beyond, we have an eye toward the long-term vision of the company. We believe we are well positioned relative to the future and the past. So what do we mean by that? We can take care of the path to our Construction segment, which rebuilds roads and bridges as our country gears up for one of the biggest infrastructure updates in its history. And as we look to the future, our EV and sustainability initiatives have positioned us for continued future growth in a large addressable market. The most exciting part is that we are already seeing such strong demand that any infrastructure legislation will only bolster demand in our core markets. So to wrap up, we are confident in our outlook and are looking forward to finishing the year with solid momentum with an eye towards the future as we remain focused on driving long-term shareholder value in 2022 and beyond. Lastly, I would like to thank the Altus team members once again for all their hard work in making this a world-class company. I will now turn the call over to Tony to discuss our third quarter financial results. Tony? Tony Colucci: Thanks, Ryan. Good evening, everyone, and thank you for your interest in Alta Equipment Group in our third quarter earnings call. Before I start, I want to wish everyone a happy Veterans Day and for those veterans and members of the military listening in, thank you for your service to our country. Second, I’d like to welcome our new team members at Baron Industries in Massachusetts and Gypsum Machinery in Ohio. The senior leadership team and I look forward to earning your trust and embracing you into Alta’s One Team culture. My remarks today will focus on four main areas. First, I’ll be presenting our third quarter results. As part of that commentary, I’d like to reiterate for investors how the current supply chain situation is impacting Alta and our business model continues to respond positively to the situation. I will profile the Baron and Gibson transactions from a financial perspective and to round out my comments for the quarter with a quick check-in on the balance sheet. Second, given that it’s been a full year since acquiring Peak Logix, which represented a strategic acquisition and our formal entry into the warehouse system design and build space, I will present a year 1 look back on the deal, highlighting our ability to realize synergies and enhance our target’s value post close. Third, I want to provide some industry data as it relates to the Class 8 truck market and Alta’s opportunity within the commercial EV space, specific to our Northeast region and recently announced agreement with Nikola. Last, I’ll discuss the positive revision to our guidance as we carry the momentum of the year into the final quarter. Before I begin, it should be noted that there are several slides in our presentation, which was released prior to our call that presents our quarterly and year-to-date numbers in greater detail than what I will discuss here today. I’d encourage everyone on today’s call to review our presentation, which is available on our Investor Relations website at altaequipment.com. With that, let’s review Q3. First, starting with the income statement. For the quarter, the company reported total revenue of $295 million, which is a record sales quarter for our business. Year-to-date, the business has achieved $857 million in revenue as we look to finish well over the $1 billion mark in revenue for fiscal 2021. Inside of the $295 million of revenue is a 20.4% organic sales increase over Q3 2020, driven primarily by our Construction segment’s year-over-year organic growth. In breaking the P&L down further in our all-important product support business, we realized $87 million in revenue for the quarter, achieving 9% organic a 9% organic increase year-over-year on a consolidated basis. On the construction side, specifically, our product support business grew 15% on an organic basis while the Material Handling segment product support business grew 5%. To remind investors, as it relates to new equipment supply issues and the impact it has on our product support business. In short, customers’ existing fleets are not being replenished, so age and hours of existing fleets continue to rise with each passing month, as the age and hours rise, the need for service technicians and repairs and maintenance increases, which is bullish for our product support business. In the rental department, where we had a very good quarter, we saw organic growth of $4.3 million in rent-to-rent revenue or 15% organically and $3.5 million in sequential quarter-over-quarter growth on higher utilization. As it relates to utilization, a metric that has been a direct beneficiary of equipment supply issues and which drives EBITDA and cash flow for our business. As of September 30, we had achieved approximately 70% physical utilization of our fleet, up from 65% at the end of Q2. One additional note on sales out of our rental fleet. We continue to realize higher than normal levels of sales out of our rental fleet as customer demand for lightly used assets in the absence of new equipment remained high throughout the quarter. Importantly, we’ve been able to source equipment in the aftermarket, transfer new inventory into our fleet to backfill these sales and satisfy customer demand for rental assets, all while maintaining strong utilization. Keep in mind that the higher level of rental fleet sales drive Holes field population, which ultimately helps drive future revenue in our high-margin product support business. Just to put a close on the supply chain discussion overall, so long as there is steel population in our geographies being utilized and demand for rental fleet, Alta’s cash flow profile remains intact. Continuing on the P&L and another positive for the quarter. Our earnings benefited from operating leverage versus Q3 2020, specifically in our Construction segment. As presented on Slide 19 of our investor presentation, investors will note that in the Construction segment, which has historically been and continues to be a growth story for Alta. The segment realized a 115% increase in cash operating income versus 45% increase in cash gross profit, which is indicative of positive operating leverage as we define it. As the construction business continues to grow, we expect this operating leverage story to continue to play out. From an EBITDA perspective, we realized $31.5 million in adjusted pro forma EBITDA for the quarter, which is an improvement of $6.5 million over the adjusted pro forma level of third quarter 2020 represented the second consecutive quarter since the beginning of the pandemic, where we have picked up EBITDA versus the previous year’s comp. It’s also the highest quarterly pro forma EBITDA we’ve recorded as a public company. Additionally, our trailing 12-month pro forma adjusted EBITDA comes in at $109.2 million as that measure continues to trend positively. To close my remarks on Q3’s performance, a quick check-in on the balance sheet. We ended the quarter with approximately $290 million of availability on our line of credit and leverage came in at 3.6x forward 2021 adjusted EBITDA, comfortable positions on both metrics from management’s perspective. Lastly, I wanted to touch briefly on the financial metrics associated with the acquisition of Baron Industries and Gibson Machinery. On a combined basis, we’ve added approximately $25 million of pro forma revenue, $3.6 million of EBITDA, excluding synergies, for a total purchase price of approximately $15.5 million or roughly 4.3x EBITDA, a level consistent with the valuation range we have historically purchased that and immediately accretive to Altus shareholders. Moving on to the second area of my prepared remarks, I would like to give a brief update on the Peak Logix acquisition from June 2020. We First, I would refer call participants to Slide 20 of our investor presentation, which presents a profile of the acquisition and our experience with Peak Logix since the acquisition. We believe our experience with peak Logic is reflective of our ability to execute post close as we look to realize the opportunities and synergies identified during the sourcing and diligence process. Additionally, Peak Logix wasn’t a typical acquisition for us in that it was a design and build engineering business without a lot of tangible assets versus a pure play equipment dealership. And I thought it was appropriate to provide an update on that investment, especially given the macro trend that surrounds Peak’s businesses. As we shared with investors when the deal was announced, recall that our major thesis in the peak deal were: one, we would be able to take greater advantage of the macro tailwind in warehousing and logistics. Two, we would fill a void from an expertise perspective as our existing Lift truck customer base was demanding a higher level of sophistication when it came to the material handling needs, and we saw a great opportunity to do more with existing customers by expanding our in-house capabilities. Three, that piques unique expertise would allow us to be even more proactive with new customers that we otherwise historically may not have been able to reach, thereby leading to incremental lift truck-related sales. In short, we believe the combination would be mutually beneficial in that Alta could drive incremental business repeat and peak would do the same for Alta. In terms of Alta’s ability to impact peaks business, as you can see on Slide 20, we’ve increased Peak’s annual revenue by $10 million or approximately 40% in year 1 and more than doubled EBITDA from $1.9 million to $4.4 million over the same time period. Keep in mind that this is an asset-light business model and the increase in EBITDA directly impacts incremental cash flows to equity holders. In terms of peak ability to impact Alta’s business, we continue to get new opportunities where peak has been instrumental in introducing Altico lift trucks and other allied products to their customers. As an example, Peak recently introduced Alta to a global medical equipment supplier, which led to a $2.5 million equipment sale. Given the operational and supply chain-related headwinds that we had to endure over the first 12 months of ownership with Peak, we are pleased with these results and look forward to increasing contribution from Peak to our revenue mix as we go forward. Last and certainly not least, we’ve added great engineering talent and sales leadership with this acquisition. This talent, combined with Altus platform will allow us to provide customers with cutting-edge solutions in the Material Handling segment for years to come. Thank you, and congratulations to the Peak Logic team. Moving to the third area of my comments. I want to provide some industry data related to Alta’s commercial EV opportunity in the Northeast and with Nikola, with the idea that the data will help investors frame the total addressable market that we will be participating in with our dealerships. First, the Class 8 truck market averages around 250,000 units per year in the US with a total value of around $30 billion. The $30 billion would equate to what we define as new equipment sales in our business. Our current dealer agreement with Mikala covers approximately 10% of the Class 8 unit sales volume in the US and includes some of the most attractive territories for rep and EV adoption. As an example, and by many accounts, New York has the second most stringent emission regulations and requirements after California for adoption of electric and fuel cell vehicles for commercial transportation. Thus, we estimate the total addressable Class 8 market in the Northeast region to be approximately $3 billion of new Class 8 sales, which could be conservative given Class A EVs command a higher ticket price than their diesel counterparts. Now it remains to be seen what level of market share we can achieve in the Northeast and when that share will be realized. But even when applying conservative market share estimates to the $3 billion total addressable market and considering there will be additional used truck, product support and rental revenues on top of the new equipment sales, one can start to understand and size the opportunity that we have ahead of us in the Class A market in the Northeast in the years ahead. Lastly, and before I close, I wanted to briefly address the increase we made to our fiscal year 2021 adjusted EBITDA guidance, which we noted in our press release that went out earlier today. Given the strong performance we’ve achieved year-to-date, the overall demand we are seeing across our business lines and geographies and our analysis of historic trends on a departmental basis, we have increased our guidance and expect to achieve $113 million to $116 million of adjusted EBITDA for fiscal year 2021. In closing, I want to thank all of my teammates at Alta for your commitment to our business in 2021. The business will break many financial records in 2021, but nothing is more important than our relationships with one another, our customers and our commitment to Altus guiding principles. To our investors, thank you for your confidence and support throughout 2021. We believe strongly in our market position today, our team, our opportunities and our ability to execute on those opportunities, which will continue to drive shareholder returns into the future. I wish all of you and yours nothing but health and happiness this holiday season. Thank you for your time, and I will turn the call back over to the operator for Q&A. Operator: Thank you. We have our first question coming from the line of Alex Rygiel with B. Riley. Your line is open. Alex Rygiel: Thank you. Good evening, gentleman. A very nice quarter. Ryan Greenawalt: Thanks, Alex. Good evening. Alex Rygiel: Couple quick questions here. A couple of quick questions here. First, sales of new and used equipment have been at a very high level like you’ve stated over the last couple of quarters. And can you keep highlighting that -- suggesting that maybe there could be some softness if we got back to a more normalized environment. But do you see that sort of more normalized environment on the horizon, particularly since the federal government is about to pass a federal infrastructure book. Ryan Greenawalt: Great question, Alex. This is Ryan. I’ll take that. So we -- the short answer is no. We don’t see any normalizing happening. And as I said in my remarks, we think that any potential stimulus coming from an infrastructure bill is only going to add to the demand. There’s a practical manner of just how much equipment can be delivered and put into use in a practical amount of time. So the way that we have been thinking about this is that the cycle is just going to get longer. We’re in early innings of a cycle that we think is going to last many years, and that’s consistent right now across all geos and business lines. Alex Rygiel: That’s very helpful. And then you referenced backlog a couple of different times. I know you don’t formally disclose a backlog figure. But can you talk a little bit more about sort of backlog today versus maybe the last quarter or a year ago? Ryan Greenawalt: Sure. Alex, I would say that I would characterize it as a stabilization. -- backlogs remain at historically high, if not record levels in most of the business, but it’s stable. We haven’t seen lead times stretch much worse than what we saw the previous quarter. And that said, we also don’t see it returning to normal lead times for more than a year. We think that we’re going to be mid next year to late next year before we see any kind of stabilization of the actual supply chain and our lead times on equipment. Alex Rygiel: That’s great. And then looking at the services business, it looked like revenue might have been a little bit softer than what I was expecting and seeing with margin, particularly on a sequential basis. Anything in particular that are going on in service? Tony Colucci: No, Alex. I think what we’re focused on as a management team is kind of the organic growth that we see in our businesses. Sequentially, I want to say the $87 million was very close to Q2. And so the good news is that, that number hasn’t slipped. As we’ve talked historically, the product support business is almost directly tied to technician headcount. And while that hasn’t slipped at all, we’ve been able to maintain headcount. And so nothing -- we continue to grow organically, I guess, as the mention in the product support business, specifically in some of our newer geographies like Florida, like we highlighted last quarter. And the Material Handling business, I think, importantly, as a note, grew 5% organically this quarter. So I think the trends are good. They were very close, as you mentioned, to Q2, but we expect to continue to drive that number higher. Alex Rygiel: Very helpful, thank you very much. Operator: Thank you, we have our next question comes from the line of Matt Summerville with D.A. Davidson. Your line is open. Matt Summerville: Thanks. A couple of questions. First, with respect to pricing, can you talk about what you’re seeing on new used rental equipment pricing versus last year? And I’m asking a similar question on the parts side of the business. And then how you think kind of early read on how you think that trends in 2022. Tony Colucci: I’ll take that one, Matt. The environment in terms of pricing, and there’s a lot of industry data out there, but use the equipment prices are peaking or half peak and continue to peak. And so we can see that in our margins when you look at rental disposal margins and then even in mended equipment sales, relative to last year, which I think is the first part of your question, we would be up versus last year at this time. Having said that, when I look at our margins on tangible asset sales, they’ve held and that’s in an environment where our OEMs are raising prices on us. And so over the last nine months, 12 months, you can see us holding margin in an environment where we’re paying more for equipment, we’re paying more for parts. In some areas, we’re paying more for labor, but we’ve been able to drive margin higher – or I’m sorry, hold margin and drive it higher on a nominal basis. Matt Summerville: And then the same question on the aftermarket side of the business, how much price you’ve taken this year in part from service and what might be realistic for next. Ryan Greenawalt: Matt, I’ll take that piece of it. So this is Ryan. The parts and service margins are going to remain relatively static. So we will see price increases likely for most of our manufacturers, and we’ll pass those increases along and hold our margins. And the same is true on the labor side. We’re not seeing outsized wage inflation from what we’ve seen in the been previous years, but we do every year pass along those increases to the market as to our competition. Matt Summerville: Got it. And I was hoping to get a little more granularity on some of the main material handling end markets. Organically, you guys were up 2% year-on-year. if I sort of – I guess that would almost attribute all of that organic increase to peak logic given the contents of the slide you put in the deck tonight. So I guess what are you seeing in the base material handling markets outside of maybe peak logic? And how should we be thinking about that going forward? Ryan Greenawalt: So one of the things we love about our material handling business is the diversity of our end markets. So our heritage in the Motor City and Detroit area was that we were heavily concentrated with auto manufacturing. And that was historically a very dense end market. They use a lot of forklifts in the manufacturing of automobiles and still do. Today, that percentage is much lower. And so the fast-growing parts of the business today are more the retail and warehousing. You think the big box stores, the Amazon fulfillment centers and warehousing centers, the Costcos, the Walmarts of the world. Those are a generation ago, it was the big three that were the big buyers of forklifts. And today, it’s the big retailers with their logistics businesses. And then there are regional pockets in the Northeast, we have more of our high-tech and chemical industry, pharmaceuticals, educational accounts. And Illinois more resembles Michigan with some manufacturing but then a lot more of a robust market on the logistics and warehousing side with Chicagoland being a major intermodal area. One thing that we -- as we approached this call, we always check in just from all other regions and hear from the boots on the ground. And we can’t point to an end market across the geography and across all business segments that’s weak today. So we spoke a little bit about the warehousing market, that’s kind of linked to the peak, and that’s where we see really explosive growth. And we think that COVID accelerated that as it changed some buying behaviors and people have kind of sequestered at home. And we right now don’t see any slowdown in that trend. So just overall growth across all markets. And if there’s a growth spot or an area where the mix is likely to build over time, it’s that warehouse market. Matt Summerville: Got it. Tony Colucci: Matt, this is... Matt Summerville: Yeah. Tony Colucci: I apologize, Matt, I was just going to jump in there really briefly. You mentioned the 2% in the material handling business. Ryan and I did mention previously about new equipment sales and not losing sleep and if there’s been a couple of points here. Organically, the rental business and the material handling is up 14% versus last year. As I mentioned, product support, up 5%. So the 2% just diluted by the fact that we haven’t been able to take delivery of forklifts from Hyster-Yale specifically and get them delivered out into the market. So if there’s an area, and this gets to where our cash flows come from, if there’s an area that’s suffering relative to revenue in material handling, it’s in that new equipment department, but again, that doesn’t drive EBITDA. And when we are able to take delivery, we would expect a spike in that new equipment line. Matt Summerville: Excellent. That’s a very good point. And then just one final question. A couple of tuck-in deals just completed. What’s your outlook for M&A heading into the remainder of this year, but more importantly, into 2022 as we think about maybe the next 6 to 12 months, how actionable is the pipeline. Given some of the things being talked about in the administration, are you seeing maybe more activity than you would otherwise? I know 2020 was obviously a big year for you guys, but maybe just spend a few more minutes on M&A. Thank you. Tony Colucci: Sure, Matt. This is Tony. I think we’ve always kind of mentioned that the pipeline and how active it is. And certainly, it got really active there for the end of Q3, I would say. And whereby people were maybe front-running a potential or sellers were maybe fun running a potential tax increase from the Fed. And so we saw an uptick in terms of volume of sellers at that point. And we will be active in the M&A markets yet before the end of the year where we expect to be on some of those deals that came across our desk, I don’t want to speak to the size or identity of any of those targets at this point, but we do expect to be active before the end of the year. The other thing that I would submit is we had laid out for investors early on the level of M&A we thought we would be able to do, not necessarily volume-wise in terms of how many targets, but financially. And we had penciled out somewhere around $15 million of EBITDA on an annual basis. Obviously, sometimes that becomes lumpy in terms of being able to execute on your pipeline. But we still think that’s a pretty good number in terms of EBITDA we’d be able to acquire each year. Matt Summerville: Thank you, guys. Ryan Greenawalt: Thanks, Matt. Operator: Thank you. We have our next question coming from the line of Bryan Fast with Raymond James. Your line is open. Bryan Fast, your line is open. You may ask your question. Bryan Fast: Yes. Good afternoon, guys. Could you just get some more color on the landscape for technician hires? I understand that it is competitive out there, but just maybe just some high-level comments on how you’re attracting talent. Ryan Greenawalt: This is Ryan. This is a theme that we try to touch on every call that the shortage of skilled trades for our industry has been a topic for a decade. It’s not a new thing. And so companies like also have to be good at recruiting and attracting that talent. And so there’s no silver bullet, but we have relationships with trade schools and community colleges with vocational programs in every region. We’re focused on onboarding fresh talent and bringing people into the industry and apprentice type programs. And then our best source of referrals of taking good care of our current associates. And they are a source of referrals. They bring their friends and family into the business. And we’ve been able to stay in front of that demographic headwind if there’s not enough people coming into these industry jobs. Right now, one thing we’ll highlight is that we do have three full-time recruiters on staff that are spending the majority of their time sourcing technical talent. And that’s something that would set us apart from most of our peers that are -- that don’t have the scale to have that type of an effort ongoing. Bryan Fast: Fair enough. And then just on the rental utilization number at 70%. How does this compare to the long-term average? Tony Colucci: I’ll take that one, Bryan. This is where we would like to be this time of year in that 70% range. So we feel like we’re in a good position relative to Alta’s history, which, as you know, we’ve grown significantly via M&A and even organically in the last couple of years. But relative to the history that I’ve been with the company, 70% is kind of a high watermark. I would say that more typically this time of year, we’ve been in the mid-60s. And so yes, we’re very pleased with our physical utilization and expect to continue to stay at those levels. Certainly, we’ll have seasonality, just to remind investors, specifically in the rental fleet, given our northern exposure as we go through Q1 in Q2. But yes, we are very pleased kind of with that 70% physical utilization number. Bryan Fast: Okay. That seems like a healthy number. That’s it for me. Operator: Thank you. We have our last question coming from the line of Jack Ryan with Colliers. Your line is open. Analyst: Thank you. Guys, when you look at your EV or e-mobility initiative with Nikola, what sort of challenges, whether that’s facility-wise or tech training wise could present any issues as you stand up with Northeast part of the country. Ryan Greenawalt: So the challenges, I don’t think are unique to nickel there, the challenges that come from seeding a market with a new product and not having a field population. So -- and as we always remind our investors, our business is supporting the product as much as it’s selling it. We drive a lot of our cash flows from the product support into the business. So the Nikola strategy and the Nikola growth opportunity will require us to seed the market before we start enjoying that annuitized revenue stream that comes from having the field population. So that’s, I think, the biggest challenge. That’s the crux of it. In terms of the facilities or the training requirements or the supporting the product, we think that we’re in a unique position to really partner with Nikola with the customer base to support the product. We’ve got a lot of experience in electromobility from our material handling business. We have experience in both batteries and fuel cell technologies. And so we believe we’re prepared to hit the ground running and couldn’t be more excited about this piece of the business, the growth prospects for it. Tony Colucci: I’m sorry, I was just going to jump in. We are doing some things just infrastructure-wise. And when I say infrastructure, facilities-wise, getting prepared, maybe repurposing portions of facilities out in the Northeast. The other thing we’re doing just kind of in the back office, some administrative stuff to be prepared for revenue effectively when we’re up and running. So things like getting our ERP system together, preparing for sales and use tax compliance so on and so forth. So there are things going on that we’re preparing for to launch here in 2022. Analyst: Okay. Then with the infrastructure spending, as you’ve mentioned, layering on and very strong marketplace for you. From an M&A perspective, does that make you consider throwing the net out to other geographies that you’re not currently in? Ryan Greenawalt: I’ll take that one. So the idea that we throw the cast the net wider, I don’t think really applies. We are actively prospecting. We are actively engaged in trade groups where we know the dealers for the various manufacturers. And more than ever, the phone is ringing in where we are hearing from entrepreneurs that are ready for an exit or we’re hearing from original equipment manufacturers that are looking for well-capitalized businesses to partner with for distribution. So we’re excited about the infrastructure bill. We’re excited about what the implications for what it means for the demand in our markets. But I think that we sort of have already cast that net. We’re looking for growth opportunities that are coherent with our strategy as much as possible, contiguous growth within the regions. And for now, that we have plenty of opportunity to continue to pursue. Analyst: Okay. Great. Thank you. Operator: Thank you. And that concludes the Q&A portion for today’s call. Thank you for participating. You may now disconnect.
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Alta Equipment Group (NYSE: ALTG) Maintains Market Perform Rating

  • Alta Equipment Group's Q3 2024 earnings report showed a loss of $0.86 per share, missing the Zacks Consensus Estimate.
  • The company's revenue for the quarter was $448.8 million, with product support revenues increasing by 7.8%.
  • Alta's Board of Directors increased the share buyback authorization from $12.5 million to $20 million.

On November 14, 2024, Raymond James maintained its "Market Perform" rating for Alta Equipment Group (NYSE: ALTG), advising investors to hold their positions. At the time, ALTG's stock price was $7.39. Alta Equipment Group is a company that provides equipment and related services for construction and material handling industries. It competes with other equipment providers in the market.

Alta Equipment's recent Q3 2024 earnings call, held on November 12, 2024, featured key company figures like CEO Ryan Greenawalt and CFO Tony Colucci. Analysts from firms such as D.A. Davidson and Thompson Research Group participated, likely discussing the company's financial performance and strategic plans. The call followed a disappointing earnings report, with a loss of $0.86 per share, missing the Zacks Consensus Estimate of a $0.22 loss.

The company's revenue for the quarter was $448.8 million, falling short of the Zacks Consensus Estimate by 6.71% and down from $466.2 million a year ago. Despite the overall decline, product support revenues increased by 7.8%, with parts sales at $75.6 million and service revenues at $64.6 million. However, sales of new and used equipment dropped by 13.3% to $219.8 million.

Alta Equipment reported a net loss of $28.4 million for the quarter, translating to a net loss per share of $0.86. On an adjusted basis, the net loss per share was $0.72, with an adjusted EBITDA of $43.2 million. The loss was significantly impacted by a $14 million discrete tax expense related to deferred tax assets.

In a strategic decision, Alta's Board of Directors increased the share buyback authorization from $12.5 million to $20 million on October 30, 2024. Currently, ALTG's stock price is $7.28, reflecting an 8.66% decrease. The stock has traded between $7.19 and $7.85 today, with a market capitalization of approximately $240.9 million.

Alta Equipment Group Inc. (NYSE:ALGT) Faces Market Volatility with Optimistic Outlook

  • Frederic Bastien from Raymond James set a price target of $9 for NYSE:ALTG, indicating a potential increase of 21.79%.
  • The stock has experienced significant volatility, trading between $7.19 and $7.85, with a yearly high of $13.67 and a low of $5.40.
  • Alta Equipment Group's Q3 2024 earnings call provided insights into the company's financial performance and strategic initiatives, crucial for understanding its future trajectory.

Alta Equipment Group Inc. (NYSE:ALTG) is a prominent player in the equipment industry, specializing in the sale, rental, and service of construction and industrial equipment. The company operates across various sectors, providing essential machinery and support to businesses. Alta Equipment Group faces competition from other equipment providers, but it continues to carve out its niche with a focus on customer service and comprehensive solutions.

On November 14, 2024, Frederic Bastien from Raymond James set a price target of $9 for ALTG. At that time, the stock was priced at $7.39, suggesting a potential increase of 21.79%. This optimistic outlook reflects confidence in the company's future performance and market position. However, the current stock price of $7.28 indicates a decrease of 8.66% from the previous price, with a change of $0.69.

During Alta Equipment Group's Q3 2024 earnings conference call, key figures like CEO Ryan Greenawalt and CFO Tony Colucci discussed the company's financial performance. The call, held on November 12, 2024, included analysts from D.A. Davidson, Thompson Research Group, and Northland Securities. This discussion likely provided insights into the company's strategic initiatives and market outlook, which are crucial for understanding its future trajectory.

The stock has shown volatility, trading between $7.19 and $7.85 today. Over the past year, ALTG has experienced a high of $13.67 and a low of $5.40. This fluctuation highlights the dynamic nature of the market and the challenges the company faces. Despite this, Alta Equipment Group maintains a market capitalization of approximately $240.9 million, with a trading volume of 179,527 shares on the NYSE.

As highlighted by StreetInsider, the price target set by Raymond James suggests potential growth for ALTG. Investors and analysts will be closely monitoring the company's performance and strategic decisions to assess its ability to reach this target. The insights from the recent earnings call will play a significant role in shaping expectations and guiding investment decisions.

Alta Equipment Group (NYSE: ALTG) Maintains Market Perform Rating

  • Alta Equipment Group's Q3 2024 earnings report showed a loss of $0.86 per share, missing the Zacks Consensus Estimate.
  • The company's revenue for the quarter was $448.8 million, with product support revenues increasing by 7.8%.
  • Alta's Board of Directors increased the share buyback authorization from $12.5 million to $20 million.

On November 14, 2024, Raymond James maintained its "Market Perform" rating for Alta Equipment Group (NYSE: ALTG), advising investors to hold their positions. At the time, ALTG's stock price was $7.39. Alta Equipment Group is a company that provides equipment and related services for construction and material handling industries. It competes with other equipment providers in the market.

Alta Equipment's recent Q3 2024 earnings call, held on November 12, 2024, featured key company figures like CEO Ryan Greenawalt and CFO Tony Colucci. Analysts from firms such as D.A. Davidson and Thompson Research Group participated, likely discussing the company's financial performance and strategic plans. The call followed a disappointing earnings report, with a loss of $0.86 per share, missing the Zacks Consensus Estimate of a $0.22 loss.

The company's revenue for the quarter was $448.8 million, falling short of the Zacks Consensus Estimate by 6.71% and down from $466.2 million a year ago. Despite the overall decline, product support revenues increased by 7.8%, with parts sales at $75.6 million and service revenues at $64.6 million. However, sales of new and used equipment dropped by 13.3% to $219.8 million.

Alta Equipment reported a net loss of $28.4 million for the quarter, translating to a net loss per share of $0.86. On an adjusted basis, the net loss per share was $0.72, with an adjusted EBITDA of $43.2 million. The loss was significantly impacted by a $14 million discrete tax expense related to deferred tax assets.

In a strategic decision, Alta's Board of Directors increased the share buyback authorization from $12.5 million to $20 million on October 30, 2024. Currently, ALTG's stock price is $7.28, reflecting an 8.66% decrease. The stock has traded between $7.19 and $7.85 today, with a market capitalization of approximately $240.9 million.

Alta Equipment Group Inc. (NYSE:ALGT) Faces Market Volatility with Optimistic Outlook

  • Frederic Bastien from Raymond James set a price target of $9 for NYSE:ALTG, indicating a potential increase of 21.79%.
  • The stock has experienced significant volatility, trading between $7.19 and $7.85, with a yearly high of $13.67 and a low of $5.40.
  • Alta Equipment Group's Q3 2024 earnings call provided insights into the company's financial performance and strategic initiatives, crucial for understanding its future trajectory.

Alta Equipment Group Inc. (NYSE:ALTG) is a prominent player in the equipment industry, specializing in the sale, rental, and service of construction and industrial equipment. The company operates across various sectors, providing essential machinery and support to businesses. Alta Equipment Group faces competition from other equipment providers, but it continues to carve out its niche with a focus on customer service and comprehensive solutions.

On November 14, 2024, Frederic Bastien from Raymond James set a price target of $9 for ALTG. At that time, the stock was priced at $7.39, suggesting a potential increase of 21.79%. This optimistic outlook reflects confidence in the company's future performance and market position. However, the current stock price of $7.28 indicates a decrease of 8.66% from the previous price, with a change of $0.69.

During Alta Equipment Group's Q3 2024 earnings conference call, key figures like CEO Ryan Greenawalt and CFO Tony Colucci discussed the company's financial performance. The call, held on November 12, 2024, included analysts from D.A. Davidson, Thompson Research Group, and Northland Securities. This discussion likely provided insights into the company's strategic initiatives and market outlook, which are crucial for understanding its future trajectory.

The stock has shown volatility, trading between $7.19 and $7.85 today. Over the past year, ALTG has experienced a high of $13.67 and a low of $5.40. This fluctuation highlights the dynamic nature of the market and the challenges the company faces. Despite this, Alta Equipment Group maintains a market capitalization of approximately $240.9 million, with a trading volume of 179,527 shares on the NYSE.

As highlighted by StreetInsider, the price target set by Raymond James suggests potential growth for ALTG. Investors and analysts will be closely monitoring the company's performance and strategic decisions to assess its ability to reach this target. The insights from the recent earnings call will play a significant role in shaping expectations and guiding investment decisions.