Financial Data and Key Metrics Changes - The company recorded revenue of $481.2 million, a slight reduction of 1.4% year-over-year, but an increase of $58.2 million sequentially from Q1 [15] - New and used equipment sales in the Construction and Master Distribution segments increased by $24.7 million year-over-year, a 15.4% increase, while Material Handling segment sales decreased by $8.3 million [15][16] - Adjusted EBITDA for the quarter was $48.5 million, with a free cash flow before rent to sell decisioning of approximately $32 million [21][22] Business Line Data and Key Metrics Changes - The Construction Equipment segment saw new and used equipment sales increase by nearly $22 million, a 15% increase year-over-year, driven by strong demand in northern regions [17][19] - Material Handling segment revenues were modestly up quarter-over-quarter, but down year-over-year due to cautious spending among automotive and general manufacturing customers [7][19] - Master Distribution segment revenues increased by 25% to $20.9 million, driven by stronger dealer engagement and channel activity [9] Market Data and Key Metrics Changes - The Midwest and Canadian operations outperformed last year, particularly in aggregate and mining markets, while Florida's market remains resilient despite temporary pauses in private nonresidential projects [6][19] - The Material Handling customer base has been more affected by trade policy uncertainties, particularly among larger customers with greater import/export exposure [20] Company Strategy and Development Direction - The company is focused on capital allocation strategies, including a $30 million buyback program, and has repurchased nearly 1.2 million shares at an average price of $5.64 [11][25] - The outlook for the remainder of the year remains encouraging, especially with potential benefits from tax incentives in the One Big Beautiful Bill [11][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of the business model and the diversity of end markets providing stability through down cycles [11] - There is confidence in the construction segment's backlog and customer sentiment, which is expected to drive equipment purchases despite macroeconomic uncertainties [39] Other Important Information - The company continues to optimize its product support business, specifically in the construction segment, to drive labor gross margins higher and reduce SG&A spend [16] - The adjusted EBITDA guidance for 2025 has been slightly trimmed to a range of $171.5 million to $181.5 million, primarily due to tariff impacts and expected continued drag in product support and rental departments [23] Q&A Session Summary Question: Impact of the Big Beautiful Bill on demand - Management expects the Big Beautiful Bill to impact construction more than other segments, with potential benefits seen primarily in Q4 2025 [30] Question: Material Handling customer hesitancy - Bookings in July were strong, indicating that customer hesitancy may be subsiding, particularly for fleets due for replenishment [32][34] Question: SG&A discipline and expectations for the second half - Management believes they have found a good level for fixed costs and expects to maintain that level, while being open to increasing variable expenses related to sales [36] Question: Construction activity and customer purchasing behavior - Confidence in backlog is the primary driver for customer equipment purchases, with tax benefits being a secondary factor [39][40] Question: Geographic performance in construction - Florida remains strong, while other manufacturing-oriented regions show softer sentiment [46][48] Question: M&A opportunities - The company sees opportunities in M&A, particularly related to succession planning issues rather than solely economic cycles [50][51] Question: Margin profile and competitive environment - Margins are stabilizing, particularly in heavy equipment, while compact equipment faces more challenges [56][58] Question: Rental fleet utilization and rates - Utilization has improved but is still below targets, with rental rates remaining stable across product categories [59][62]

Financial Performance - Q2 2025 - Total revenue decreased by $6.9 million, a (1.4)% decrease, from $488.1 million to $481.2 million compared to Q2 2024[29] - New and used equipment sales increased by $14.2 million, or 5.6%, totaling $265.6 million[13, 28] - Adjusted EBITDA was $48.5 million, compared to $50.3 million in the same quarter last year, a (3.6)% decrease[14, 28] - Product support revenue decreased by $3.7 million, or (2.6)%, from $144.2 million to $140.5 million[29] Segment Performance - Q2 2025 - Material Handling segment revenue decreased by $14.9 million, or (8.5)%, from $175.6 million to $160.7 million[32] - Construction Equipment segment revenue increased by $5.8 million, or 2.0%, from $294.9 million to $300.7 million[36] - Master Distribution segment revenue increased by $4.2 million, or 25.1%, from $16.7 million to $20.9 million[39] Rental Fleet and Capital Allocation - Total rental fleet decreased from $617.2 million to $569.5 million, a decrease of $(47.7) million[42] - The company completed the sale of non-core aerial equipment business for $18 million in cash proceeds and a $4.3 million gain on sale[59] - The company repurchased approximately 1.13 million shares (~3.4% of shares outstanding) at an average price of $5.64 in Q2 2025[59] FY 2025 Guidance - Adjusted EBITDA guidance is $171.5 million - $181.5 million[60] - Free Cash Flow before RTS Decisioning guidance is $105.0 million - $115.0 million[60]

[PART I – FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Interim Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Interim%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements for Alta Equipment Group Inc. as of June 30, 2025, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Total assets decreased to **$1,436.0 million** from **$1,480.4 million**, driven by inventory reduction, with total stockholders' equity declining to **$43.9 million** Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $739.1 | $774.5 | | **Total Assets** | **$1,436.0** | **$1,480.4** | | **Total current liabilities** | $531.0 | $577.2 | | **Total Liabilities** | **$1,392.1** | **$1,402.8** | | **Total Stockholders' Equity** | **$43.9** | **$77.6** | [Condensed Consolidated Statements of Operations (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20Of%20Operations%20(Unaudited)) Q2 2025 revenues slightly decreased to **$481.2 million**, but income from operations increased to **$12.4 million** due to lower SG&A, improving net loss to **$(6.8) million** Key Operating Results (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $481.2 | $488.1 | $904.2 | $929.7 | | **Gross profit** | $122.3 | $132.0 | $237.3 | $252.6 | | **Income from operations** | $12.4 | $10.3 | $13.2 | $9.4 | | **Net loss available to common stockholders** | $(6.8) | $(12.6) | $(28.5) | $(25.3) | | **Diluted loss per share** | $(0.21) | $(0.38) | $(0.87) | $(0.76) | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=12&type=section&id=Condensed%20Consolidated%20Statements%20Of%20Cash%20Flows%20(Unaudited)) Net cash used in operating activities significantly improved to **$3.4 million** for H1 2025, with **$8.4 million** used in investing and **$11.4 million** provided by financing Net Cash Flow Summary for Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(3.4) | $(24.2) | | **Net cash used in investing activities** | $(8.4) | $(34.2) | | **Net cash provided by financing activities** | $11.4 | $32.1 | | **Net change in cash** | $(0.2) | $(26.5) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20To%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, revenue recognition, segment performance, debt structure, business combinations, divestitures, and stock-based compensation - The company identified and corrected an immaterial multi-year error in its Statement of Cash Flows, reclassifying proceeds from the sale of rent-to-rent equipment from operating to investing activities. For H1 2024, this increased net cash used in operating activities by **$3.2 million**[28](index=28&type=chunk)[29](index=29&type=chunk) - On March 14, 2025, the company acquired Les Chariots Elevateurs Du Quebec Inc. (CEQ) for **$2.9 million**, reported within the Material Handling segment[95](index=95&type=chunk) - On May 1, 2025, the company divested its aerial fleet rental business in the Chicago area for **$18.0 million** in cash, resulting in a gain of **$4.3 million**[96](index=96&type=chunk) - In June 2024, the company completed a private offering of **$500.0 million** of 9.000% Senior Secured Second Lien Notes due 2029 to refinance existing debt and for general corporate purposes[62](index=62&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20And%20Analysis%20Of%20Financial%20Condition%20And%20Results%20Of%20Operations) Management discusses financial performance for Q2 and H1 2025, covering consolidated and segment results, revenue trends, gross profit, operating expenses, liquidity, capital resources, and cash flow [Results of Operations](index=40&type=section&id=Results%20Of%20Operations) Q2 2025 consolidated revenues decreased **1.4%** to **$481.2 million**, gross profit fell **7.3%**, but income from operations grew **20.4%** to **$12.4 million** due to SG&A reduction Consolidated Performance Summary - Q2 2025 vs Q2 2024 (in millions) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Total revenues** | $481.2 | $488.1 | (1.4)% | | **Gross profit** | $122.3 | $132.0 | (7.3)% | | **Gross Profit %** | 25.4% | 27.0% | (1.6) p.p. | | **Income from operations** | $12.4 | $10.3 | 20.4% | | **Adjusted EBITDA** | $48.5 | $50.3 | (3.6)% | - Operating expenses decreased significantly due to cost savings initiatives implemented in late 2024 and early 2025, including workforce optimization and changes to the self-insured healthcare program[144](index=144&type=chunk) [Material Handling Segment Results](index=46&type=section&id=Material%20Handling%20Segment%20Results) Material Handling segment revenues decreased **8.5%** to **$160.7 million** due to lower equipment sales and product support, with gross profit margin contracting to **32.7%** and adjusted EBITDA falling **16.8%** Material Handling Segment Performance - Q2 2025 vs Q2 2024 (in millions) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Total revenues** | $160.7 | $175.6 | (8.5)% | | **Gross profit** | $52.5 | $59.5 | (11.8)% | | **Gross Profit %** | 32.7% | 33.9% | (1.2) p.p. | | **Segment adjusted EBITDA** | $16.8 | $20.2 | (16.8)% | [Construction Equipment Segment Results](index=51&type=section&id=Construction%20Equipment%20Segment%20Results) Construction Equipment segment revenues grew **2.0%** to **$300.7 million**, driven by new and used equipment sales, despite declines in rental, with adjusted EBITDA increasing **1.6%** to **$31.7 million** Construction Equipment Segment Performance - Q2 2025 vs Q2 2024 (in millions) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Total revenues** | $300.7 | $294.9 | 2.0% | | **Gross profit** | $65.9 | $67.6 | (2.5)% | | **Gross Profit %** | 21.9% | 22.9% | (1.0) p.p. | | **Segment adjusted EBITDA** | $31.7 | $31.2 | 1.6% | [Master Distribution Segment Results](index=55&type=section&id=Master%20Distribution%20Segment%20Results) Master Distribution segment revenues increased **25.1%** to **$20.9 million**, but gross profit margin sharply declined to **20.1%** due to tariffs and currency, with adjusted EBITDA decreasing **35.3%** Master Distribution Segment Performance - Q2 2025 vs Q2 2024 (in millions) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Total revenues** | $20.9 | $16.7 | 25.1% | | **Gross profit** | $4.2 | $4.6 | (8.7)% | | **Gross Profit %** | 20.1% | 27.5% | (7.4) p.p. | | **Segment adjusted EBITDA** | $1.1 | $1.7 | (35.3)% | [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20And%20Capital%20Resources) Principal liquidity sources are cash from operations and credit facilities, with **$3.4 million** cash used in operations for H1 2025 and **$425.2 million** available borrowings as of June 30, 2025 - Principal uses of cash include funding operations, working capital, rental fleet purchases, acquisitions, debt service, and dividends[180](index=180&type=chunk) - As of June 30, 2025, the company had **$425.2 million** of available borrowings under its ABL Facility and Floor Plan Facilities[182](index=182&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20And%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rates, fuel prices, and foreign currency, managing these through derivative instruments like interest rate caps and fuel swaps - As of June 30, 2025, the company had **$218.9 million** in outstanding borrowings under its variable-rate ABL Facility and **$329.9 million** under its Floor Plan Facilities[186](index=186&type=chunk) - A one percentage point increase in interest rates on its variable rate debt would reduce annual pre-tax earnings by approximately **$2.3 million**, including the impact of its interest rate cap[186](index=186&type=chunk) - The company manages fuel price risk through fixed price swap contracts and has exposure to foreign currency risk from its operations in Canada and Europe, though it does not consider the impact to be material[188](index=188&type=chunk)[189](index=189&type=chunk) [Item 4. Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20And%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of the end of the period[190](index=190&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[191](index=191&type=chunk) [PART II - OTHER INFORMATION](index=62&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, with management expecting no material effect on financial statements - Pending legal proceedings are not expected to have a material effect on the company's condensed consolidated financial statements[74](index=74&type=chunk)[194](index=194&type=chunk) [Item 1A. Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from those disclosed in the Annual Report on Form 10-K for FY2024 - No material changes to risk factors were reported for the quarter[195](index=195&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20Of%20Equity%20Securities%20And%20Use%20Of%20Proceeds) Board increased stock repurchase authorization to **$30.0 million**; company repurchased **1,145,604 shares** at **$5.64** per share in Q2 2025 Share Repurchases in Q2 2025 | Period | Total Shares Purchased | Average Price Paid | Value Remaining (in millions) | | :--- | :--- | :--- | :--- | | **Q2 2025 Total** | **1,145,604** | **$5.64** | **$17.7** | - The Board increased the stock repurchase program authorization to **$30.0 million** on May 1, 2025[196](index=196&type=chunk) [Item 3. Defaults Upon Senior Securities](index=62&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported [Item 4. Mine Safety Disclosures](index=62&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations [Item 5. Other Information](index=62&type=section&id=Item%205.%20Other%20Information) No other material information was reported [Item 6. Exhibits](index=63&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with Form 10-Q, including corporate governance documents, debt agreements, and certifications - Exhibits filed include the Indenture for the 9.000% Senior Secured Second Lien Notes due 2029 and Sarbanes-Oxley Act certifications[204](index=204&type=chunk)

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Q2 2025 revenues reached $481.2 million, with SG&A reduced by $12.2 million, Adjusted EBITDA at $48.5 million, and a net loss Q2 2025 Key Financial Metrics | Metric | Q2 2025 (in millions) | Change vs Q2 2024 | Change vs Q1 2025 | | :--- | :--- | :--- | :--- | | Total Revenues | $481.2 | -1.4% | +13.8% | | New and Used Equipment Revenues | $265.6 | +5.6% | N/A | | SG&A Expenses | $102.3 | -$12.2 | N/A | | Net Loss (to common stockholders) | $(6.8) | Improved from $(12.6) | N/A | | Basic and Diluted EPS | $(0.21) | Improved from $(0.38) | N/A | | Adjusted EBITDA* | $48.5 | -3.6% | +$14.9 | - Service gross profit percentage improved by **40 basis points** year-over-year to **59.8%**, indicating better profitability in the product support division[5](index=5&type=chunk) [CEO Commentary & Business Overview](index=1&type=section&id=CEO%20Commentary%20%26%20Business%20Overview) CEO Ryan Greenawalt discussed segment performance, highlighting Construction Equipment strength, Material Handling softness, tariff impacts, and operational optimization - The Construction Equipment segment benefited from reliable demand from federal and state DOT infrastructure projects and the aggregate/mining industries[4](index=4&type=chunk) - The Material Handling segment experienced year-over-year declines in product support and rental due to tariff-related market hesitancy and regional softness in the Midwest and Canada[4](index=4&type=chunk) - The Master Distribution segment (Ecoverse) faced margin pressure due to tariffs imposed on European imports, despite increased demand for environmental processing equipment[4](index=4&type=chunk) - As part of a strategy to improve utilization and returns, the company reduced the original equipment cost of its rental fleet by nearly **$50 million** compared to the previous year[4](index=4&type=chunk) [Capital Allocation](index=2&type=section&id=Capital%20Allocation) Alta actively executed its capital allocation strategy in Q2 by repurchasing shares under its authorized buyback program Q2 2025 Share Repurchase Activity | Metric | Value (in millions, except shares) | | :--- | :--- | | Shares Repurchased | 1,145,604 | | Average Price per Share | $5.64 | | Total Cost | $6.5 | | Authorized Program | $30 | [Full Year 2025 Financial Guidance](index=2&type=section&id=Full%20Year%202025%20Financial%20Guidance) The company updated its full fiscal year 2025 financial outlook, providing a revised range for Adjusted EBITDA Updated FY 2025 Guidance | Metric | Guidance Range (in millions) | | :--- | :--- | | Adjusted EBITDA | $171.5 - $181.5 | [Consolidated Financial Results](index=3&type=section&id=Consolidated%20Financial%20Results) This section presents detailed unaudited financial statements for Q2 and H1 2025, including operations, balance sheets, and cash flows [Statement of Operations](index=3&type=section&id=Statement%20of%20Operations) Q2 2025 revenues decreased 1.4% to $481.2 million, with gross profit at $122.3 million, and a net loss of $6.8 million, an improvement year-over-year Q2 2025 vs Q2 2024 Statement of Operations (in millions) | Line Item | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | $481.2 | $488.1 | -1.4% | | Gross Profit | $122.3 | $132.0 | -7.3% | | SG&A Expenses | $102.3 | $114.5 | -10.7% | | Income from Operations | $12.4 | $10.3 | +20.4% | | Net Loss | $(6.1) | $(11.9) | +48.7% | | Net Loss to Common Stockholders | $(6.8) | $(12.6) | +46.0% | [Balance Sheet](index=7&type=section&id=Balance%20Sheet) As of June 30, 2025, total assets were $1,436.0 million, liabilities $1,392.1 million, and stockholders' equity $43.9 million, showing decreases from year-end 2024 Key Balance Sheet Items (in millions) | Account | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | Cash | $13.2 | $13.4 | | Inventories, net | $484.5 | $535.9 | | Total Assets | $1,436.0 | $1,480.4 | | Floor plan payable – new equipment | $260.9 | $293.4 | | Total Liabilities | $1,392.1 | $1,402.8 | | Total Stockholders' Equity | $43.9 | $77.6 | [Cash Flow Statement](index=9&type=section&id=Cash%20Flow%20Statement) H1 2025 operating cash flow improved to $(3.4) million, investing activities used $(8.4) million, and financing activities provided $11.4 million Six Months Ended June 30 Cash Flow Summary (in millions) | Cash Flow Activity | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Net cash used in operating activities | $(3.4) | $(24.2) | | Net cash used in investing activities | $(8.4) | $(34.2) | | Net cash provided by financing activities | $11.4 | $32.1 | | **Net Change in Cash** | **$(0.2)** | **$(26.5)** | [Non-GAAP Financial Measures & Reconciliations](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section provides non-GAAP metrics, with Q2 2025 Adjusted EBITDA at $48.5 million, and a full reconciliation of GAAP net loss Reconciliation of Net Loss to Adjusted EBITDA (in millions) | Line Item | Q2 2025 (in millions) | Q2 2024 (in millions) | | :--- | :--- | :--- | | **Net loss available to common stockholders** | **$(6.8)** | **$(12.6)** | | Depreciation and amortization | $34.6 | $38.0 | | Interest expense | $22.3 | $19.2 | | Income tax provision (benefit) | $1.3 | $(2.7) | | EBITDA | $51.4 | $41.9 | | Adjustments (Gain on divestiture, etc.) | $(2.9) | $8.4 | | **Adjusted EBITDA** | **$48.5** | **$50.3** | - Adjusted basic pre-tax net loss per share was **$(0.11)** for Q2 2025, compared to **$(0.07)** in Q2 2024[5](index=5&type=chunk)[25](index=25&type=chunk) [Conference Call Information](index=4&type=section&id=Conference%20Call%20Information) Alta management will host a conference call and webcast to discuss Q2 2025 financial results and address investor questions Event Details | Item | Detail | | :--- | :--- | | **Date** | Thursday, August 7, 2025 | | **Time** | 5:00 p.m. Eastern Time | | **Live Call** | (833) 470-1428 | | **Access Code** | 407288 |

Core Insights - Alta Equipment Group Inc. reported total revenues of $481.2 million for Q2 2025, reflecting a sequential increase of 13.8% but a year-over-year decrease of $6.9 million [4][3] - The Construction Equipment segment saw revenues rise to $300.7 million, an increase of $5.8 million year-over-year, primarily driven by a $21.5 million increase in new and used equipment sales [3][4] - Material Handling revenues decreased to $160.7 million from $175.6 million year-over-year, attributed to regional market challenges and tariff-related hesitancy [3][4] Financial Performance - Adjusted EBITDA for the quarter increased by $14.9 million sequentially to $48.5 million [4][3] - The net loss available to common stockholders was $(6.8) million, with a basic and diluted net loss per share of $(0.21) [4][3] - Selling, general, and administrative expenses were reduced by $12.2 million year-over-year, contributing to improved operational efficiency [4][3] Market Conditions - The company noted that its Construction Equipment segment benefited from reliable demand due to federal and state infrastructure projects, despite broader economic uncertainties [3][4] - The Material Handling segment's performance was impacted by market hesitancy related to tariffs and regional softness, particularly in the Midwest and Canada [3][4] - Alta's Ecoverse business faced margin pressure due to tariffs on European imports, although demand for environmental processing equipment remains strong [3][4] Strategic Initiatives - The company repurchased 1,145,604 shares of common stock for an average price of $5.64 per share, totaling $6.5 million as part of its capital allocation strategy [3][5] - Alta continues to optimize its rental fleet levels, reducing the original equipment cost of its rental fleet by nearly $50 million from a year ago [3][4] - The company expects to report Adjusted EBITDA between $171.5 million and $181.5 million for the full fiscal year 2025 [6]

Core Points - Alta Equipment Group Inc. will report its financial results for the second quarter ended June 30, 2025, after U.S. markets close on August 7, 2025 [1] - A conference call and webcast will be held on the same day at 5:00 p.m. Eastern Time to discuss the financial results [2] Company Overview - Alta Equipment Group Inc. is a leading provider of premium material handling, construction, and environmental processing equipment and related services [1] - The company operates one of the largest integrated equipment dealership platforms in North America, with over 85 locations across various states and Canadian provinces [3] - Alta has been in operation for 41 years, offering a broad product portfolio that includes specialized equipment such as lift trucks, heavy and compact earthmoving equipment, and environmental processing equipment [3]

Group 1 - Alta Equipment Group Inc. (ALTG) shares increased by 16.1% to close at $8.6, with notable trading volume compared to typical sessions, and a total gain of 23.3% over the past four weeks [1][2] - The rally is driven by optimism regarding rising customer demand, favorable pricing, and increased sales in rental, new and used equipment, and parts, along with the acquisition of Les Chariots Elevateurs Du Quebec Inc. (CEQ) [2] - The company is expected to report a quarterly loss of $0.27 per share, reflecting a year-over-year change of +29%, with anticipated revenues of $477.32 million, down 2.2% from the previous year [2] Group 2 - The consensus EPS estimate for Alta Equipment has remained unchanged over the last 30 days, indicating that stock price movements may not continue without trends in earnings estimate revisions [4] - Alta Equipment holds a Zacks Rank of 3 (Hold), similar to Illinois Tool Works (ITW), which saw a 1.3% increase to $257.9 and a 3% return over the past month [4] - Illinois Tool Works has a consensus EPS estimate of $2.55, reflecting a -0.1% change over the past month and a +0.4% change from the previous year [5]

Financial Performance - Alta Equipment reported a quarterly loss of $0.65 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.60, and compared to a loss of $0.38 per share a year ago, indicating a decline in performance [1] - The company posted revenues of $423 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 3.11%, and down from $441.6 million in the same quarter last year [2] - Over the last four quarters, Alta Equipment has not surpassed consensus EPS estimates and has topped consensus revenue estimates only once [2] Stock Performance - Since the beginning of the year, Alta Equipment shares have lost approximately 27.1%, significantly underperforming the S&P 500, which declined by 4.7% [3] - The current Zacks Rank for Alta Equipment is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.30 on revenues of $482.42 million, and for the current fiscal year, it is -$1.39 on revenues of $1.89 billion [7] - The trend of estimate revisions for Alta Equipment is mixed, and future changes in estimates will be closely monitored following the recent earnings report [6][7] Industry Context - The Manufacturing - General Industrial industry, to which Alta Equipment belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting a challenging environment for the sector [8]

Financial Data and Key Metrics Changes - The company recorded revenue of $423 million, a reduction of 4.2% year-over-year, primarily due to reduced new equipment sales in the Material Handling segment and lower rental revenues from the Construction segment [18][19] - Adjusted EBITDA for the quarter was $33.6 million, down just $500,000 compared to Q1 of 2024, indicating resilience despite revenue declines [20] - Gross margins improved, with a 230 basis point year-over-year increase in service gross margin, particularly from the Construction segment [19] Business Line Data and Key Metrics Changes - The Construction Equipment segment showed stable operating trends, with increased fleet deployments as construction activity picked up in the Northeast and Midwest regions [6][8] - The Material Handling segment experienced a decline in new equipment sales but saw stronger margins on both new and used equipment sales, which helped offset lower delivery volumes [9][18] - The Product Support business remained strong, contributing positively to overall performance [10] Market Data and Key Metrics Changes - The construction equipment market expanded modestly year-over-year, driven by infrastructure-related projects, while some regions experienced softening in private nonresidential construction [8][10] - The Florida construction market remained robust due to ongoing investments from the Florida Department of Transportation and federal government [7] Company Strategy and Development Direction - The company has decided to divest substantially all of its aerial equipment rental business in the Chicago area, as it no longer aligns with long-term objectives [11][12] - A strategic shift in capital allocation was announced, with the indefinite suspension of the quarterly dividend to focus on share buybacks, increasing the repurchase program by $10 million to a total of $30 million [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from U.S. trade policy and tariffs but expressed confidence in the company's ability to navigate these issues [5][10] - The company reiterated its guidance for adjusted EBITDA for the full year 2025, expecting a range of $171.5 million to $186.5 million, driven by stable infrastructure markets and improved operational efficiencies [24][25] Other Important Information - The company ended the quarter with approximately $290 million in cash and availability on its revolving line of credit, positioning it well for future challenges [22][23] - The divestiture of the aerial fleet rental business is expected to yield approximately $20 million in cash proceeds, which will be allocated to outstanding debt [23] Q&A Session Summary Question: Are there more assets within the company for potential divestiture? - Management indicated that future divestitures would be more surgical and focused on product lines rather than large-scale divestitures [33][34] Question: Can you elaborate on the parts and service gross margin improvement? - The improvement was primarily driven by operational efficiencies in the Construction segment, focusing on minimizing non-billable time and training technicians [35][36][37] Question: How do you view capital return versus debt reduction? - The company plans to be opportunistic, using excess cash flows for debt servicing while also focusing on share repurchases when the share price is favorable [38][39] Question: What is the outlook for the material handling business? - Stability was noted in the food and beverage sector, with some concerns in the automotive sector, but overall demand remained stable [46][48] Question: Is there tariff exposure in the environmental business? - The company acknowledged direct exposure to tariffs from imported equipment but deemed the current impact manageable [49][50] Question: Any updates on the e-mobility business? - The e-mobility business remains nascent, with no material impacts from the bankruptcy of a key OEM, and the company is evaluating other potential vendors [59][60][62] Question: Are there favorable pricing conditions for potential acquisitions? - While pricing may not change significantly, there could be more opportunities for strategic acquisitions due to management succession issues in the current macro environment [63][64]

Financial Data and Key Metrics Changes - The company recorded revenue of $423 million for Q1 2025, a decrease of 4.2% year-over-year, primarily due to reduced new equipment sales in the Material Handling segment and lower rental revenues from the Construction segment [19][21] - Adjusted EBITDA for the quarter was $33.6 million, down $0.5 million compared to Q1 2024, indicating resilience despite revenue declines [21] - Gross margins improved, with a 230 basis point year-over-year increase in service gross margin, particularly from the Construction segment [20] Business Line Data and Key Metrics Changes - The Construction Equipment segment showed stable operating trends, with increased fleet deployments as construction activity picked up in late March [6][7] - The Material Handling segment experienced a decline in new equipment sales but saw stronger margins on both new and used equipment sales, which helped offset lower delivery volumes [8][9] - The Product Support business remained strong, contributing positively to overall performance [10] Market Data and Key Metrics Changes - The construction equipment market expanded modestly year-over-year, driven by infrastructure-related projects [7] - The Florida construction market remained robust due to ongoing investments from the Florida Department of Transportation and the federal government [7] - The company noted stability in the food and beverage sectors within the Material Handling business, while the automotive sector showed some uncertainty [46][47] Company Strategy and Development Direction - The company has decided to divest substantially all of its aerial equipment rental business in the Chicago area, as it no longer aligns with long-term objectives [11][12] - A strategic shift towards share buybacks has been initiated, with the Board authorizing an increase in the share repurchase program by $10 million, totaling $30 million [12][13] - The company aims to optimize resources, strengthen margin performance, and deepen customer engagement across various segments [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from U.S. trade policy and tariffs but expressed confidence in managing associated cost increases [10] - The company reiterated its adjusted EBITDA guidance for 2025, expecting a range of $171.5 million to $186.5 million, driven by stable infrastructure-based end markets [26][27] - Management remains optimistic about the pace of bookings in the Material Handling segment, which is expected to positively influence sales in the latter half of 2025 [27] Other Important Information - The company ended the quarter with approximately $290 million in cash and availability on its revolving line of credit [24] - The divestiture of the aerial fleet rental business is expected to yield approximately $20 million in cash proceeds, which will be allocated to outstanding debt [25] Q&A Session Summary Question: Are there more assets within the company for potential divestiture? - Management indicated that future divestitures would be more surgical and focused on product lines rather than large segments [34][35] Question: Can you elaborate on the parts and service gross margin improvement? - The improvement was driven by operational efficiencies in the Construction segment, focusing on minimizing non-billable time and training technicians [36][37] Question: What is the outlook for capital return and debt reduction? - Management emphasized a balanced approach to capital allocation, with current focus on share buybacks and debt reduction using proceeds from the aerial fleet divestiture [38][39] Question: What is the strength in the Material Handling business? - Stability was noted in the food and beverage sectors, while the automotive sector showed some uncertainty [46][47] Question: Is there tariff exposure in the environmental business? - The company acknowledged direct impacts from tariffs on imported equipment but deemed the current situation manageable [49][50] Question: Any updates on the e-mobility business? - The e-mobility business remains nascent, with no material impacts from the bankruptcy of OEM Nikola, and the company is exploring other potential vendors [60][61]