Earnings call transcript Q2 2023

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Operator

Good afternoon, and thank you for attending the Alta Equipment Group Second Quarter 2023 Earnings Conference Call. My name is Matt, and I'll be your moderator for today's call.

I will now turn the call over to Jason Dammeyer, Director, SEC Reporting and Technical Accounting with Alta Equipment Group.

Jason Dammeyer

Thank you, Matt. Good afternoon, everyone, and thank you for joining us today.

assist Alta's and XXXX website is the designed detailing issued results along release the presentation afternoon understanding this posted to press second financial quarter was with company's A results. in you on our

Ryan with and and our Financial are Colucci, our Officer. Chairman On the today Greenawalt, call Chief me CEO; Tony

For second results. financial quarter management first a provide will call, XXXX today's review our of

before we will open call prepared begin We questions. with for remarks some your the

to Slide X. proceed Please

uncertainties growth, to conditions. results, remind and non-historical general release. contain outlook, like that statements strategy Before this known including may forward-looking we business I'd the press and other as market get economic financial call those and statements risks, everyone certain These statements assumptions, to related opportunities conference in started, company and to of achievements including are about and Alta's described our statements forward-looking future financial our subject unknown both and business

statements current and results we largely our condition believe financial We that update business, on may trends projections these expectations about of events financial our forward-looking affect and future and operations.

release occur that believe filed this these to reasonable, the these expectations that no was Descriptions with reports the discussed undertake today. to that call. differ press any could issued SEC, forward-looking risks cause we from statement actual reflect and our materially changes we other revise of to including are in Although obligation are after results our statements

website can be GAAP and press and in non-GAAP on included financial During our measures today's we this measures. A both call, to at reconciliation of present non-GAAP may GAAP release investors.altaequipment.com. found is

the call I will turn to over Ryan. now

Ryan Greenawalt

thank everyone, afternoon, you today. joining Good for Jason. you, us and Thank

would and our will our current hard financial want M&A work dedication, will recognize our continued I to and performance current our then strategy pipeline. be employees, discuss growth conditions possible. and their not because First, quarter highlights before But begin, strong an update on I provide I and second business without

to a of highlights. with for revenue million, revenue attributable business. $XXX.X million Handling our second I will and Material Construction increased quarter review was a financial $XXX.X quick record million. to begin $XXX.X of increase our XX.X% Total revenue of The

from revenue. contributed segment, Distribution, which We Master also in million $XX.X newest our benefited

e-Mobility traction, in represents additional expect throughout quarter, of our generating Our balance gaining we is for and Nikola's the business the million significant BEV revenue year. $X.X of first tractors, which this TRE sales orders

we achieved well Lastly, our revenue significant acquisitions. as organic contributions as year-to-date of from growth XX.X% the

ago. adjusted result, a grew year $XX.X to a EBITDA As compared XX.X% to million

our let brief business provide and trends, Before segment few I discuss comments a and me trends. forward conditions on business model

are -- position. of As scale of a market and in the versatile our and defensiveness our we and breadth of resilient, reminder, our our product business offerings, unique is market model the our addressable the

aftermarket sustaining and the driving driving At revenue-producing and on the is equipment focus penetration Our field of had end we to diversified X,XXX certified long-term factory-trained support an approximately increasingly and technicians. quarter, population base. customer second

others. markets, food manufacturing, Trends beverage, automotive all segment Material in major remained and throughout positive including our biotech, our manufacturing government, and end-user Handling

Hyster-Yale America our for now end territory, in which access region Eastern and products. population densest Canada, North exclusive and markets diverse Our a includes the industries of to group provides covers

business complex material to synergies most and the needs. continue the in-house customers' handling our sales with to We from PeakLogix the benefit solve have capabilities

operator full industrial from few. training, a distribution, such Material new services integrating regions. as products name the One safety important suite bring and the and is into aspect to capabilities, of Handling our our This in-house most tire and our mature markets of battery products segment distribution maintenance, industrial includes to strategy engineered in and

portfolio equipment the each specific for end markets that of a and lines region. We within appropriate specialty also assembled allied are

and infrastructure from impacts due both benefit well positive other like specifically, all as Equipment state seeing legislation battery our are to operating facilities. and and to governmental Construction segment projects Northeast, In and Our we regions. non-residential as the other onshoring continues federal high in chip demand EV-related

with there, the remained largest a we continue DOT Our strong to significant mining particularly embedded phosphate and related the us with and spending wetlands heavily business, restoration strong, are as producer Projects years for state. come. and markets for are Florida also operations to in will

these a equipment, earthmoving double-digit have in seen and heavy specifically As is high. in trucks and Both Volvo year-over-year. result, hauler Florida our the articulated growth volume used, demand unit of both new equipment particularly for market excavators categories

recycling array regulatory effectiveness enhanced have mandates reclamation need equipment. for and resource created significantly waste Advancements technologies scarcity. significant business, the management specialized in materials, the growth, newly a increased broader of continue We Master remain several and which driven practices, Distribution and Ecoverse excited the efforts. State-of-the-art reclamation recycling for within facilitate The of focus market sorting reports factors, recycling sustainable technology of by on growth efficiency segment. our will equipment experience about opportunities to including intensifying separation the

in industry its forecasts this indicate future. could still be multibillion-dollar While the a infancy, in

the their as the gain Illinois-based emissions Nikola Lastly, a zero fleet a network The purchased the beginning quarter. electric some our invested vehicles. customer of is business customer customers orders producer noted the and is semi-trucks tailpipe to fleet The the distribute e-Mobility and second in using revenue by food chargers and to traction fleet. to contribution to of during support battery

are available hydrogen hearing We enthusiastic fuel year. semi, already demand late which be this cell-powered the will Nikola for

us territory footprint Alta's mirrors our exclusive to country. customers our existing the Importantly, allowing within market throughout the to product U.S., the Nikola

convert experience internal nearly work in fossil engines fuels to excited and long-haul XX and commercial are of helping of for the from heavy-duty vast market putting We vehicles. combustion about the away our customers their fleets prospect years

few comments a brief current and provide me let conditions. business Now forward-looking on

over strong to year. budgets year where feedback levels, pleased in more high-margin most the next business of will we for return to extend yield of service into from decade. sales, resulting trillion cycle initiatives also their XXXX. supply operate DOT new is state have are in customers estimated next also which the One time. approximately constraints important the allowing balance used eased, significant inventory normalized sentiment and fiscal levels this forecasting increases the over chain Many with Federal indicators and $X We're equipment parts is year and that and higher will

recently For XXXX its released more over next project of the example, Moving years. state spending over total four Forward infrastructure Florida across fiscal congestion-related the projects to XX $X billion address with than

of accretive terms In the pipeline growth for remains strategy, strong acquisitions. our

added million $XXX adjusted have and revenue million went since we total in We XXXX. EBITDA public in in $XX.X

this continue dealership entering as network path. well have new markets, to end strategic our follow We into user as and expanded we'll

platform We growth and entry in grow prospects. consolidate markets adjacent significant barriers a to unique to have with and long-term

proven attractive We disciplined conditions, have demonstrated, we and at are have M&A and transactions have led team repeatable we prospecting execution process, a fertile integration and these of industry as seasoned to executing approach a multiples. by a veterans. we and And

Lastly, I'd culture. on like to Alta's again corporate touch

accountability valued As our the our to and purpose, shareholders. a rally customers, strive our every that shared delivering and company, a for around of day makes difference. trust we and to trust to to business our thank again partners opportunity, delivering culture want a employees we empowerment, foster I

to these and the the that safety strategy electro-mobility and to culture a day. purpose shared our viability including key drive and technicians; our areas: focused to we of with adoption to of employees of environmental foundation solutions; customer dedicated commercial Our sustainability, is commitment our each inclusive commitment continue and the various develop

your I'd the team closing, in solid all Alta quarter. thank In delivering to like for hard another work

Tony, I'll to now turn CFO. the our call over

Tony Colucci

in your evening, Equipment Ryan. interest thank Alta and everyone, financial for our and Good you Thanks, XXXX second quarter results. Group

earning New The two legacy is acknowledge to first and to welcome look Before of committed leadership the team new trust. your want forward each from team half Shop I building Materials begin, Handling members acquisitions upon family to senior we and the our respective of companies, Alta I those and of M&G Battery England. to

four remarks will areas. focus on My today key

be our support second our with, in product which continued presenting organic as pleased are business I'll growth increased availability our quarter business. results, from First, and equipment benefited we

and that we and rent-to-sell the be product help thought end, our the have population detailed investors future out rent-to-sell helpful for I'll I previously we investors model flesh would to it to presenting with be a Second, approach of in Construction unit-level as that field referenced study market To this equipment drive in revenues. to case more segment, support approach model use way. our a

an provide update XX. sheet on I'll the as Third, of June balance

we of part in enhancements As that discussion, be the made referencing positive facilities to credit I'll our QX.

and that July on secondary closed late briefly on deal. perspective stock touch provide in I'll Lastly, our offering common that the

Investor Relations and encourage which Before I today. referencing slides be at be to should review is altg.com. our call presentation get throughout it our points, noted everyone presentation that to XX-Q, on today's our call the on from available I'll our I'd investor talking website my

in portion Slides performance. said, and that my in prepared first quarter remarks, presented XX With XX to earnings the of for the deck, as second

recorded company a quarter the revenue, the QX QX revenue is over XXXX, $XX of quarter, of $XXX the versus $XXX last $XX in million up year a quarter. organic for from $XX of quarter. for and For Embedded million million last million increase making which comparatively million the is strong

when half will million, XXXX. increased $XX the last end, more which, sales of year-to-date, To to support product population approximately quarter well quarter, for equipment $XX we've for field discussed million equipment ultimately Specifically, revenues. incremental now the as future to first placed $XXX million that bode into compared

In Construction segment spite we quarterly Material with XX% Moving Handling our of and on difficult, support in more departments, to segment in service to year-over-year. figure lines. comp parts the organic continue the our business getting realize increasing growth at in XX% product the and hurdles that

up for the seasonal from $XX rental the QX out we and close revenue to business, quarter, it million relates rental expected quarter. versus million hit as the revenues saw natural To lines, last as increase $X.X our

X% a environment rental a equipment. increased organically result consolidated the revenues basis, for primarily favorable Additionally, of our on rate

quarter of growth $XXX converted in we for XX EBIT, flow million is perspective, version EBITDA an from adjusted XXXX. realized $XX.X adjusted CapEx. million which before economic the the of EBITDA, free level up unlevered second $XXX achieved into which a trailing From cash quarter, of basis, $X.X EBITDA million million our the we On adjusted of

Lastly QX's fiscal of for $XXX mentioned adjusted year and of we are on EBITDA performance, XXXX. EBITDA, given press today's guidance release, as million million $XXX in to reiterating

Two final quarter. on the metrics

just free on call, above first noted continue business half leverage in pro operating yielded cash of annualized the versus dollar generated on year-to-date of XXXX the generating realized million cash the As XX of income $X.XX $X.XX profits on Slide flow earnings $XX presented realize in basis, in to depicted quarter. And in operating basis equity. we of in levered adjusted the as on the the financial to a XX, cash incremental investor Slide QX XXXX. gross common a is deck, as Each forma

my prepared unit-level we at the market of portion to our economics as of wanted second view I remarks, as present the a segment. the approach equipment to I our for rent-to-sell Now Construction mentioned open, what in to refer

investors Before that products building dealerships market I I'd by focus the field and Alta's equipment increasing population. is present best-in-class share customer-owned model, equipment remind for represented our driving on

we equipment the dealership field model, that last to know materials future. the exclusive our with support higher strong revenues elements given field, certainty, beget in the put highlighted the quarter, of incremental As in will we in when are degree the customer population more margin able a of

Additionally, strong preference lightly for some and customers a equipment. and used demand importantly, our is cases, there in amongst

fleets. are In sourced heavy equipment heavy approximately categories, metrics, product equipment -- categories in certain purchases rental of fact, XX% various product industry from dealer-owned certain customer by

Given this our different in ultimately us price customer industry can model, to and used for points the population-based create fleet, lightly approach the our allows fulfill in dynamic market rental which for demand. field business equipment rent-to-sell

investors unit month for a Slide sold point you the September $XXX,XXX. of XXXX, months summarize and it to for the for was the of purchased We From fleet. an would unit new the see for on economics to example January piece can here, our XX XX rented XXXX, this I $XXX,XXX XX, in XX, we depicted perspective, X then that on $XX,XXX

post the over on total, and right bottom aftermarket return in the accretive. we invested slide, can terms XX-month and know you the period, which earned to of be opportunity on on capital, of is unit a XX% service part unit economics prior the unit, see washout the in this in the to sale, As any the

the flexible on product Now play year-to-date sales by period, model example cetera. But variations $XX calculation. of elements as incremental to this in the can this why sale an et which sold dynamics out many rent-to-sell differ how equipment OEM, is rent-to-sell model depreciation simply of iterations holding of geography, focus and led million on the of can type, gain the segment. one Construction of model removes is the economic The EBIT, we also overall,

business, to lightly-used field out out and again, equipment customer equipment example summary, meet of quarter-to-quarter ages day-to-day at us ultimately points and and plays demand allows competition. fair itself and the to various this in price In population our versus carve share our grade

like of Now, as check for at of quick on the of elements QX, prepared and remarks, the facilities, to the which my third highlight the balance important some I'd the end portion of in credit closed sheet the of a do of X/XX. upsizing

First, On company four had the the credit that aspects upsizing. to XX, its amended June primary it. agreements

of an ABL from option facility, previous $XXX facility expansion First, the our we exercised to million. taking $XX $XXX on million worth that million

additional pursue ABL in additional to provided amendment the the Second, on for future. $XXX the an the facility should we see to million expansion million need capacity option $XX

more amount the as new portion by in future OEM floor that have that finance increase as in have supply partners. provided the enough customers. normalized, the an chains plan included amendment OEMs the captive become the growth. which of facility to funds which from it's increasingly allowed Fourth, million don't for important fund Third, expansion $XX available financing option plan we which we increase for floor plan readily equipment balance imperative million, able amendment an equipment on place, financing incremental This funds to floor sheet, our $XX has captive were have of for

on this the shareholders allows team grown outcome has credit, previous positive our of as access whole. expansion perspective, availability base the company company and amendment of it our a suppressed markets. end From to borrowing in view our collateral a line and a lending for as for We the as our vote concert our as the partners on business from with business this confidence our plan, represents

On sheet. to the balance

inventory at line ended credit X.Xx used the supply million only I increased upsizing, approximately with availability of the levels that of million of have leverage that in on roughly and adjusted the previously seasonality in revolving suppressed. EBITDA normalization XXXX we Total the with $XX as Given mentioned. given -- plan $XXX and quarter our rental came the supply equipment fleet mentioned I

like the prepared our I'd to July last on for of Finally, portion closed a my that offering one the large of in from remarks, give secondary few was thoughts shareholders.

of vision early company, provided a First, XXXX. B. we the a and to We our stock. float of as offering approximately the supported in Alta. large public third a shareholders dispersed of been of for investors becoming of reset who a holdings Last stock platform investors, was in Riley's as and set the function our to for were month, increased Riley, transaction new and support diverse a this has shareholder primarily common beneficial in ultimately ALTG's IPO to happy view as B. a offering liquidity secondary

shareholders of thank and first their our for In our closing, half team their my belief XXXX, and great confidence. in for I'd and to like a customers OEMs for colleagues our Alta support

it your over operator Thank for I the attention. And turn to for time will back and Q&A. you

Operator

first Davidson. from The of Instructions] question D.A. Matt [Operator Summerville line the is with

is line now Your open.

Matt Summerville

of Thanks. couple A questions.

seeing maybe First, versus what respect utilization about year ago or quarter looks now rental maybe pricing to ago? rental talk with And -- a with a now similarly, you like versus rate can what ago? a maybe rates you're year

other sound rates What to like where of have the then from follow-up. follow-up as before the heading a rates rental rate on I And now sort have And would you utilization you're start they're then an that, direction? to at rental a or downside adjunct just strong. in hit

Tony Colucci

is Tony. take Sure, that. this Matt. I'll Hey,

from have we've loose our kind let dearth that years. of that the competition our equipment of right-size. as appears and fleet, to with as other houses normalize of kind chains last rental is to not It We deal industry with supply and an starting of dissimilar had have grown the everybody couple

utilization down. percentage out, some but we utilization, the that your go fleet would go seen alone, is, utilization, physical not would utilization, have so -- It a does, And fleet call go down. percentage that would we're I able you down. don't physical call less dollar have but total what additional we And you're physical doesn't of mathematically fleet mean your think as get it it rent, on just just mathematically to if that fleet that your

of seen on kind a amount We of out rent the equipment have of sort flatten little bit.

and that some for a customers Now to out that get because it see that fleet you're available equipment the several to year. sometimes is we've of a and the piece going to -- become fleet for grown then full of takes while certainly, on not to little impact rent. And months of it to

what's strongly year half of physical utilization wise. about of so, whole. a just the the and customer pretty kind And feel as happening Again, that's we sentiment back

I is, and here other that in have new would that, say mentioned, The equipment used moving equipment we thing of Ryan as record levels. out

think the new a whole. model, to as you so, about sheets And we're a on to market and I of talked rent-to-sell equipment our have lot moving well. customer balance as of

definitely -- from And double-digit think look -- to 'XX, years, the look markets we I X% that's from we the seen seen year. would last rental down increases. levels mentioned at on to we've from mention, that when you've others. So, we outside I of 'XX, expect of broader of X%, we've call, I rate seen what last if of the the in growth sort couple don't sort our you over it's year-on-year think perspective, that would back increase materials a and a

of the I that the expect moderating, level either year. moderate continue of or kind and half of sort hold seeing that so to And back would towards to

Matt Summerville

year, Yale Realizing those I then could your just businesses, I less organic opportunity, highlighted Industrial it. on was than what Ecoverse. and forma a of -- if you've a you've owned comments, given before those to businesses you want growth a spend have market a minute, you nice off Got which of follow-up, And Eastern -- but pro share for are kind Canada. wondering in obviously you Ryan, seeing as up then

secular business guys? respect the You to the looks you for the then, commentary rate how with general. play additional some and have of revenue on in maybe backlog warehousing in sort specifically PeakLogix a Ecoverse of projects run in you. layer And logistics Thank and maybe

Tony Colucci

maybe to had and end YIT beginning I at going They over I'll first I'm then say kind reason from mentioned of it up either a to in of back seasonality that the to not stages. and Ecoverse. for Alex, the form sort opportunity. great still but YIT thing the of the We us opportunity of those But Ryan Ecoverse turn share to take last that, more there's growth would mind in of expect quarter. companies. of there we're kind terms of or the kind organic Ryan top of has quarter, no

I e-commerce, What a and is, so COVID on activity on for warehousing, so would forth. there and theory coming say side PeakLogix was and of automation the logistics of out

bit further rearview. and that further in seen the moderate have as We gotten COVID has a

down coming that in is business. backlog Our

spending cycle bit And warehouse. of I we think for the what sales other business customers. large from is pause retrofit to maybe rates on are CapEx PeakLogix is, that thing interest the projects for given a to business, have taking customers think a about heard a that CapEx in little large longer, the a taking relative these And

there. the we a markets of end moderation anyway, of little in are So, kind seeing bit

want YIT? Do to talk you to

Ryan Greenawalt

Sure.

that thinking growth you'd about how market. asked and we're to growth. frame the up YIT organic and start both So in just with Ecoverse YIT about I'll

and go aftermarket lot get in said excited that field opportunity. we've acquisition. that we the can market a about there's the we're there, already penetrate an underwriting We deals As population past, a more

next longer materialize, though, Sometimes double the there's take organic but to significant come And to the the opportunity within is Canada from of growth deals most it's several when a years. share revenues region. Eastern an an in over opportunity opportunities, the that grow

in double should that to able command of region us, in that about is all three get the to of it'll the YIT business, in portfolio. bring allied long think We there's And other in opportunity we'll along an that that through battery certainly double just expects I to identified there. we share, but as bring brand that to need an of to growth. able market our the next estimate way the with years, and it the be be bring component in of what that function just to -- we the how Hyster-Yale goal. we should business a should That's an well, opportunity be The job we take to M&A And to rest business, tire in to products. be it that the it's market. to should market there of kind do like some of double I able our could revenues. would share areas do But us today, the of the that organic where

nascent over the And particular. the just then applications two Doppstadt in is a there recycling, great that product -- for benefit expect market, we will growth in is growth be on recycling machines which of to that have decade. growth One their product, the from there'll more that's Ecoverse is the side, core areas. growth the very the significant from And brand come we to the of next the have going market, and organic natural

expanding Ecoverse categories in markets, on the vendors. additional very to niche technologically small, partners for bit excited very to and longer take but manufacturers find already OEM for And And is several going to little there's distribute within specialized business specialty business to area we're together. need a to with new That's we're there, that specialized. line in Distribution that real other Master growth are take about are conversation a -- markets, partners that the Ecoverse addressable model. about But of The put new advanced equipment well. as

that other market So, fit invite new within Alta relationship there the our Distribution, that defined us type of fit to that reason end thing segments markets the or Distribution distribution. parts Ecoverse, a the Master utilize strength we within but other as that are Master allow platform not and other and the that well within segment in is will the think distribution will product may a we

to gates put but we've year, how number with business. it's excited early It's rate. the kind nice there. on the the pin organic start that come to it's early it just of down an too really out growth -- And about too to a one, We're of the a to

Matt Summerville

Got it. Thanks, guys.

Tony Colucci

Thanks, Matt.

Operator

you for question. Thank your

question Next is Alex the B. of line with Rygiel from Riley.

is line Your open. now

Alex Rygiel

quick Good you. questions A evening, Thank gentlemen. here. few

First, been the M&A that active haven't pipeline year-to-date.

So, I guess year? my kind relates to it question to you is, is success are M&A sellers here really it asking as your timing with unreasonable prices? just Or of this

Ryan Greenawalt

reasons under-managed. wouldn't that. are anything Alex, very for opportunity the read have take this into like this question. one, in that undercapitalized, or no opportunity for the enough really there's backdrop I'll up dealers And transaction that drying Ryan. pipeline. a -- the a The thanks I that OEMs the many aren't lack the is are There intact. is consolidation too and consolidators. M&A transaction a opportunity. active the difference There's of for recently

right So I in would market to really in say opportunities it's rings in think fertile phone the I terms valuations strategy. backdrop the always -- how right the no of and we expectations spent the ever change how our the and in lot a of or more than we're about we've prospecting or no willing efforts would change the for pay is. where what say

at otherwise have wouldn't opportunities looking time that new a we we spend lot Now seen. of

the continued So, just strategy there. excited really about

Alex Rygiel

backlog very, that But strong order should extend recently, their did into about XXXX. softness activity bit reference a talked then Hyster-Yale activity. little a in very of a well they And

I So, and you activity if was your could backlog? your wondering order discuss order

Tony Colucci

and active previous sort the you on we the just sorry, one Alex, question, I'm of the And answer big your question please, that. transactions, yet follow-up can relatively note, on so But beget on relationships two repeat the ones, to Sorry -- the Alex, sometimes about question? year would just so a to forth. small I given ones say, be would did I M&A-wise. is the expect small we and this

Alex Rygiel

Order Yes. backlog order activity? and

Tony Colucci

was I Yes, sorry. what -- say saying. Yes, would our mimic Hyster-Yale we that would

a strong I at that of very lead times. are it continue comes There think takes product certain problematic to saw point. well when be kind XXXX this that us get into to to we categories backlog

as think the PeakLogix. is to what I is what last just couple of bookings. quarters was mentioned said referencing I Ryan think, I And publicly has Hyster-Yale here similar on

this massive to COVID, that run-up the were through was -- this on as going in people forward whole bookings to pull and trying demand had running You thought world e-commerce. be

down And you gains these in moderating I know, bookings all had, historic again is I seeing think versus of you're industry peak that don't an kind so And norms. XX% as from massive back levels.

Alex Rygiel

Thank helpful. Very you very much.

Operator

Thank for your question. you

Next question Northland. with Ted from Jackson line is of the

line Your is now open.

Ted Jackson

Congratulations Thank you solid much. very very quarter. on a

Ryan Greenawalt

Ted. Thanks,

Ted Jackson

amount It's not mean, it you of balance going inventory, makes things you're are a it like couple focusing kind I current what's I'm focus how CapEx But kind you're, peak where ask inventory terms in in the you flagged haven't for think balance to the of do long let's on can sense. quarter, I it you kind there? to for on dollar And just on get formally flow. given of or sheet? Like the what call sheet it, will take when we normalized? and the of of and be will not. building you cash inventory free

Tony Colucci

season here, the perspective, the end say in would the I you middle right, we're about Ted. QX construction a of from think in Yes. of just One is north. we're when pretty the close

kind but this public ebb were haven't now. chain into and markets issues of normal COVID and started, company, public as we been a then until previously, we flow we mentioned -- show really as inventory right As a the the supply of I've able to

stay levels from than so here And of of kind so take continue to as nominal head the half we expect like for kind because back to about forth. on would as rather we a of we so, and we more and And share potentially down to or to these OEMs, the year. come we grow, towards at think -- number, near want

used and normalized at turns used -- on equipment, clock turns. kind new months numbers some and a Ted, to and XX we come you of been we've put To kind to of were we've if more back an ago, of roll annualized new X basis, XX, down X the it, turnover equipment,

And so, math we -- kind turn, now normalized of the inventory turns. down X -- Xs and we've same with to do we're parts then same you high could thing the in where the

too far And would of levels kind so, wouldn't to levels. are stay These benchmark that get our we like these at. want to we below

growing X-turn of dollars in to this and the and area goes we're it. that stay below but want it's because up, go for kind not nominal So, if -- -- we

Ted Jackson

things the question taking rental capital forward? of to of question mean, Similar is where Okay. business the that kind as to does lot come been to of interest have I I until buy, you net fleet you quarter. finding backdrop, Where the that equipment regards I've demand that buy you -- have kind fleet budget higher of $XXX this mean, calls million that they call don't phenomenon? guess are rental I -- mean, actually we the of you say, cost seeing to rental talked are they rent incremental listened kind rental your with And then would your basis, driving, so you're go? goes budget a they I've it, do out actually see of I a equipment. finding you've to people so guess, people go the that CapEx to they're a it. -- that's on add, one that's the I higher adding And that of with of that as CapEx is, the in rates or basically with

Tony Colucci

couple that different of revenue the in about million And -- we pieces. of just $XXX think, $XX rent-to-rent for We're million the value. have Yes, think I But $XX about original Ted, a take year. I we when mentioned somewhere of I'll for quarter. equipment around then million the sitting,

what of of annualize rent-to-rent of play we've utilization, call puts so, of get where financial north you us around, the it, which $XXX-ish XX% $XX in OEC million, somewhere into. And like kind $XXX million is which always you when revenue right we'd with million, on of $XX kind messaged of to -- million sort line an

de-fleet about model, It's $XXX so, on for we million public our to touched the to mention million. the and bespoke the what quickly model so rental houses three-quarters they have equipment the very opposed sheet have rent-to-sell so model. like the on elongated would or of the not H&E time, we for $XXX can call rent-to-sell through that's I figure as period and the plans balance where all their that fleet. that then XX% some of on, fleet yes, roughly And -- that holding is which our for of we're CapEx OEC growing grown very fleet, I of year, two-thirds up means URI on

bearing point, would the equipment, we're sort buy having interest much question, to of a to rates in that say I terms so, of turning And so agnostic equipment. last on answer that rent versus the new because the we're

rental not and of And kind still committing interest behind. pouring are rates leaving up equipment into and new so, people kind of despite assets run in to the

this I for talk pent-up equipment. all in more. think drivers. for markets, equipment, over maybe about certain much demand They've end new there's the been cases waiting macro a new year, so Contractors

that on not I'm to agnostic sure. bit we so, little a would question be rent versus impacting buy. And interest answer rates I'm --

Ted Jackson

mean, kind to you taking that equipment, out generation. to itself. and just 'XX just understand can at good really meet it, (ph), business have. when point, -- of And of demand the normalizing like because trying see I'm a to want a you the free the Because as you terms asked starts demand, say, the your I generation you're some these you're of be [stable] cash if And inventory that Yes. inventory But for flow with out that rental that questions show whatever to growing to I pretty a seems expect substantially. numbers in year happen? rental good the for I it's -- it's little fleet normalize basically could expect the cash down becomes it can or cash we and problem to

Tony Colucci

say of Ted. all, Outside like we sheet capacity would some things working We've to things outside capital -- M&A you where the because I there, parts, will equipment balance with in with normalize. bereft I relative of had just invest of to potentially -- agree would would we eat Outside and were that agree of I first right, up -- you, M&A, history.

would the XX I XX you we -- And over normalize agree so kind that, to next of with is expect to months.

Ted Jackson

Go on.

I think you'll acquisitions get necessarily rewarded And aren't it. for bad.

of that, You I capable -- know. its just really revenue of I seem impressive that's segment. Material the Nikola, them. don't outlook it, last the in your to that last maybe finds year assume of My too to up that concern or the revenue confirm That's then pipeline on your question. And Nikola, 'XX. question mean, business, want around numbers just basis. it did, business pronounce a do mean, company. a however grow the rest pretty of kind going little maybe I to to with good just kind is Kind to discussion you're some the you of level that. as around a of Handling issues I to the I my job with way put you clearly that ability relates regards there's for to go-forward and of Thanks.

Tony Colucci

that this back front front see demand the end of question. the we forward. take I'll -- it and the as just about take end the I'll I'll to Ryan it Tony. going and to year throughout of rest leave the talk is

against corporate some an elimination. offset our revenue itself intercompany the So, in and it's segment is

of segment as segment reporting Qs starts the So, the well, sort itself it the in until I corporate in -- get out should we'll like through we the material, the the really EV reporting be business, to mentioned segment we'll be and will inside for press housed say, did But now. release. we revenue the be EV -- here numbers

But sheet. some you concern. we're with leave of balance were we kind the for and that more recent cash some about with steps back pleased of But relative -- flows talk to them some The regard the with in -- encouraged for latest going news out taking think their just cheerleaders their of we the to obviously it question, and -- your of we they're the you of kind working burn are of end for terms Nikola. We them that of we or their cash them. the things activity their Ryan. would of that were But to to go mentioned other ahead, to

Ryan Greenawalt

in every -- What is the able growth is would beginning show of to I Yes. just our incremental terms that this quarter. of expectation being say

retail get these themes the been of over installed. has of bottlenecks some vehicles years to the last just happens and working to couple the of making bottleneck of of infrastructure that that charging due the in the deliveries of One utilities lack infrastructure with the

expect every As we additional have sit going later-stage forward. we and deliveries today, report to many to able sales opportunities here we be quarter

heavier-duty fuel the One powered we're for vehicles. powertrain these of are distinction vehicles that agnostic Nikola's thing they're excited about about cell longer think is really cell hydrogen fuel powertrain and electric will is or strategy that but powered The applications. agnostic not because being of be battery all terms electric whether haul in the that fuel -- powertrains, we way electric

a a synergies manner. speed to product, will And the and You to fuel this range going lot the just in training that up they're could support being to happen of there's with as think this way of the that cell market extender.

we're a had this we truck. big where truck. about hearing cell of in the to longer-range the going out we're lot of So, truck in for where transportation that and the And it hydrogen thoroughfares of demo we routes. see our a think North already super be about in country hopeful We footprint excited market the deliveries with exposure We truck. the in we're just the We the That's demonstration year actually the of the with major day terms really some customers product. had onsite. to Detroit fuel hydrogen the several hydrogen there's heavy had and excitement

So, the should opportunity I what But as is we and go most to of about more today. Tony organic our about in Nikola's excited them. that business specifics in be health, significant couldn't this maintain see, growth said, we we think, opportunity you the terms

Ted Jackson

Investors you to to look forward thanks. September if guys these seeing And XX going shameless at wants And Well, Minneapolis Securities to in-person, Conference. throw Great. Northland I anybody a come. please to see I'm on say just all in in plug the

Ryan Greenawalt

I appreciate see there. Ted. We'll you it,

Operator

for you Thank question. your

from is Steve James. the question Raymond Hansen line Next with of

open. line is Your now

Steven Hansen

for Thanks guys. the Hi, time.

bit a wanted here. to environment go Just back to M&A little the

so How rich. that described But sounds at? really number focus a of pipeline different these are prioritize really areas on that the from is to Just the terms diverse, deals? targeting be allocation It opportunities given best in You that really there opportunities. is platform different trying you like commentary helpful. would relatively of certain set? capital still you're looking you're opportunity prioritizing is how Any the or

Ryan Greenawalt

Sure.

it, word the reoccurring that the allocation, and stream that -- because business. way technicians aftermarket robust highlighting our with the for the you best thank So, revenue is one we about deal onboard capital there's think a we

on the today. that opportunities attractive and those there that with cost within are at opportunities, synergies, way opportunities the are several often existing footprint existing looking business. the are we within there call both We So, our and rank because -- very sales infill we're side

this is The a of mentioned of we benefit region other moving population very theme from and we south. But cognizant also we and dense America, is cover, what just just economic are broader before, that. towards trend and North the we've things

business. we maybe love our our opportunities in Canada. segments And our We're is potentially to south Canadian Quebec, we as got Toronto. could a look footprint. huge as other Ontario major grow centers do And Canadian Florida the more as excited for be opportunity was that our which we construction in investment, infrastructure another so, more down of That theme recent, of Eastern the We've well. in market acquisitions strategy Montreal, infill with and population then and

Tony Colucci

Yes.

that -- Steve. always to have rank just we fans territory would a And maybe on foremost. OEMs for incremental exclusive be We rights, of and take want we pile dealership We to to think there, right? first we're relationships with existing I them.

go and to OEMs with also rights OEMs establish can of I know and would top top that And the we of we the so grow with, go a relationship new the say, we list. then that exclusive think we with, the to can list

Steven Hansen

supply That's getting and referenced and sorry, still just high better. some availability, you terms normalization have to you've standpoint. I appreciate just it And that. referenced constraints, chain I understand inventory helpful, then and me, an a as bit playing the excuse guys, see just follow-up, of back you those trying a also Because on down. how you more in out from coming where inventory was

availability medium, there areas you're that is really better, So, challenges equipment, certain business has large versus OEM still much small et where seeing the the of gotten or cetera?

Tony Colucci

multinational Yes. there Volvo OEM, we seeing are is others, large major progress than of Material areas of Steve, I forklift niche more we the of that there, just more maybe have where a sort more in seen would normalization we in Handling of a and we've names say, host Construction segment segment. our have some the

Things are for we're normalizing the lead times has seeing equipment. still some classes public they've And Hyster-Yale I for of issues certain been So, think some longer with had. of that fairly them.

a last had they've had Alex As kind out, pointed of quarter. strong very

perspective of or supply XX at at chain issues. light I last I this ahead at acute are we're years Material overall, would of, ago time. more causing point. say These what Steve, product year when the are would Handling kind we there's as, nuisance is where material this things But in a still anything certain months most classify we look were probably this But the versus that space from categories

Steven Hansen

helpful. Very Thanks. Okay.

Operator

this Thank you are the your That no at your for questions question. There additional participation. conference Thank waiting conclude for you time. will call.

may now You your lines. disconnect

Alta Equipment (ALTG) 9 Aug 232023 Q2 Earnings call transcript