Custom Truck One Source, Inc. (NYSE:CTOS) Q1 2024 Earnings Conference Call May 2, 2024 5:00 PM ET Company Participants Brian Perman - Vice President of Investor Relations Ryan McMonagle - Chief Executive Officer Chris Eperjesy - Chief Financial Officer Conference Call Participants Justin Hauke - Baird Tami Zakaria - JPMorgan Michael Shlisky - DA Davidson and Company Operator Ladies and gentlemen, thank you for standing by and welcome to Custom Truck One Source's First Quarter 2024 Earnings Conference Call. ...

o More than 300 technicians located throughout our branches o 90+ mobile technicians capable of being deployed across the country • Opportunity remains to invest in underserved regions o Pacific Northwest o Northern California o NY/NJ Metro o Carolinas • Targeting several additional sites over the next few years 10 Our ESG Strategy 11 • We issued our inaugural ESG report last July • Our ESG plan is driven by our shared Purpose, Vision and Values • We are committed to staying at the forefront of technologica ...

Financial Performance - Total revenue for the three months ended March 31, 2024, was $411.3 million, a decrease of 9.1% compared to $452.2 million in the same period of 2023 [156]. - Rental revenue decreased by 10.2% to $106.2 million, down from $118.3 million in Q1 2023, attributed to lower utilization and a decline in average OEC on rent [156]. - Equipment sales fell by 9.5% to $272.6 million in Q1 2024, compared to $301.3 million in Q1 2023, primarily due to excess supply of used equipment in the market [156]. - Gross profit for the three months ended March 31, 2024, was $90.7 million, down from $109.7 million in the same period of 2023, reflecting a decrease of 17.4% [156]. - Operating income fell by 53.9% to $18.4 million, down from $39.9 million in the same period last year [189]. - Net income (loss) for the three months ended March 31, 2024, was $(14.3) million, a significant decline from a profit of $13.8 million in the same period of 2023 [171]. - Adjusted EBITDA decreased by 26.4% to $77.4 million for the three months ended March 31, 2024, compared to $105.2 million in Q1 2023 [171]. - Net cash used in operating activities was $14.4 million for the three months ended March 31, 2024, compared to net cash provided of $3.9 million in the same period in 2023 [173]. - Interest expense increased by 11.9% to $25.0 million in Q1 2024, compared to $22.4 million in Q1 2023 [171]. - Income tax benefit for the three months ended March 31, 2024, was $1.9 million, resulting in an effective tax rate of (12.0)% [186]. Operational Metrics - As of March 31, 2024, the rental fleet consists of approximately 10,300 units, which can be utilized across various end-markets [129]. - Fleet utilization decreased to 73.3% in Q1 2024 from 83.6% in Q1 2023, indicating a decline in demand in the utility market [162]. - Average OEC on rent decreased by 12.2% year-over-year, primarily due to lower utilization in the quarter [162]. - The sales order backlog decreased by 37.2% to $537.3 million compared to $855.0 million in the same period of 2023 [160]. - Rental invoiced revenue was $5,412,000 for the three months ended March 31, 2024, compared to $7,178,000 in the same period of 2023 [198]. Related Party Transactions - Total revenues from transactions with related parties for the three months ended March 31, 2024, were $3,677,000, compared to $8,455,000 in 2023 [141]. - Expenses incurred from transactions with related parties included in cost of revenue were $466,000 for the three months ended March 31, 2024 [141]. - Accounts receivable from related parties increased to $1,904,000 as of March 31, 2024, from $695,000 on December 31, 2023 [141]. Debt and Cash Management - Net leverage ratio increased to 3.79 as of March 31, 2024, compared to 3.53 as of December 31, 2023 [172]. - As of March 31, 2024, the company's consolidated total debt ratio was not greater than 5.00 to 1.00, allowing for unlimited dividends under the Indenture [196]. - Cash and cash equivalents decreased by $2.3 million to $8.0 million from December 31, 2023 [199]. - Net cash used in investing activities was $33.4 million for the three months ended March 31, 2024, down from $39.9 million in the same period of 2023 [200]. - The decrease in cash used in investing activities was primarily due to a $33.6 million reduction in purchases of rental equipment [200]. Risk Management - The company faces risks including increases in labor costs, competition in the equipment dealership and rental industries, and disruptions in the supply chain [119]. - The company continues to manage risks from fluctuations in interest rates through derivative financial instruments [221]. - The company is monitoring global legislative activities related to the OECD's "Pillar Two" model rules, which introduce a global minimum tax of 15% effective January 1, 2024 [134]. Internal Controls and Compliance - The company identified control deficiencies related to information technology general controls (ITGCs) impacting financial reporting [224]. - Remediation efforts for the material weakness in internal controls have been ongoing since fiscal year 2021, with some improvements noted in fiscal year 2023 [225]. - No changes to internal control over financial reporting occurred during the quarter ended March 31, 2024, that materially affected the controls [226]. - The company records a liability when it is probable that a liability has been incurred and the amount can be reasonably estimated, reviewing these provisions quarterly [135]. Other Financial Information - The company utilizes rental purchase options (RPOs) that provide customers with a buyout option at a known price, allowing flexibility between rental and purchase [129]. - Interest income for the three months ended March 31, 2024, was $2,742,000, compared to $3,428,000 in the same period of 2023 [198]. - Operating expenses increased by 3.7% to $72.3 million, primarily due to higher general and administrative expenses [185]. - The company has a net operating loss carryforward and disallowed interest deduction carryforward assets available to offset future taxable income [126].

EXHIBIT 99.1 Custom Truck One Source, Inc. Reports First Quarter 2024 and Updates Full-Year Guidance CTOS First-Quarter Highlights "We continue to see strong demand in our TES segment, posting double-digit growth for the sixth consecutive quarter. CTOS is well positioned to capitalize on the secular tailwinds we see around AI and data center investment, electrification, and utility grid upgrades. We continue to be impacted by end-market supply chain, regulatory and customer financing factors affecting the t ...

Upon Closing, Rishi Bajaj to Become Chief Executive Officer of ContextLogic and Four New Independent Directors to Join ContextLogic Board Six Existing Directors to Step Down from Board Upon Completion of the Qoo10 Transaction Reconstituted Board and Management Team to Focus on Maximizing Value of ~$2.7 Billion of NOLs SAN FRANCISCO, April 02, 2024 (GLOBE NEWSWIRE) --  ContextLogic Inc. (d/b/a Wish) (NASDAQ:WISH) ("ContextLogic" or the "Company") today announced that it will reconstitute its Board of Directo ...

KANSAS CITY, Mo.--(BUSINESS WIRE)--Custom Truck One Source, Inc. (NYSE: CTOS) proudly announces its acquisition of the business of SOS Fleet Services, LLC, a full-service repair facility located in Alexandria, Louisiana. This acquisition brings over 30,000 square feet of space and a highly experienced team that will significantly enhance Custom Truck’s service footprint in the region. Our new Alexandria branch is poised to offer the full breadth of Custom Truck’s rental product offering, as well as repair s ...

Custom Truck One Source, Inc. (CTOS) came out with quarterly earnings of $0.07 per share, missing the Zacks Consensus Estimate of $0.11 per share. This compares to earnings of $0.15 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -36.36%. A quarter ago, it was expected that this company would post earnings of $0.05 per share when it actually produced earnings of $0.04, delivering a surprise of -20%.Over the last four quarters, ...

Financial Data and Key Metrics Changes - The company reported Q4 2023 revenue of $522 million, a 7% increase compared to Q4 2022, and total revenue for 2023 reached $1.865 billion, up 19% year-over-year [50][56] - Net income for Q4 was over $16 million, marking the fifth consecutive quarter of positive net income, with a total of $51 million for 2023, reflecting a 30% increase from 2022 [39][56] - Adjusted EBITDA for Q4 was $118 million, with a total of $427 million for 2023, representing a 9% increase compared to the previous year [56] Business Line Data and Key Metrics Changes - The TES segment achieved 21% revenue growth in Q4 and 29% for the full year, with gross margin improvement of 150 basis points [31][42] - The ERS segment experienced 10% growth for the full year, ending with $726 million in revenue, while adjusted gross profit for ERS was $409 million for 2023, up 3% from 2022 [40][56] - The APS business posted revenue of $38 million in Q4 and $149 million for the full year, a 5% increase compared to 2022 [62] Market Data and Key Metrics Changes - Approximately 60% of revenue comes from the utility end market, driven by electricity load growth in the U.S. due to data center development and electrification trends [32] - TES backlog ended the quarter at just under $690 million, down from a peak of over 12 months in early 2023, indicating a normalization trend [61] - Average utilization of the rental fleet was just under 78% in Q4 and over 80% for the full year, reflecting strong performance despite some headwinds [59] Company Strategy and Development Direction - The company is expanding its geographic footprint by opening new locations in the Western U.S. to better serve customer demand [15][35] - A strategic decision was made to invest in inventory to meet anticipated demand, with expectations to generate over $100 million in levered free cash flow in 2024 [14][8] - The company aims to achieve a net leverage ratio of less than 3x by the end of the fiscal year, focusing on profitable growth [14][63] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are near-term headwinds in utility end markets due to supply chain issues and project timing, long-term demand remains strong [45][74] - The company anticipates continued growth in 2024, projecting total revenue between $2 billion and $2.18 billion, with adjusted EBITDA in the range of $440 million to $470 million [16][55] - Management expressed confidence in the ongoing demand for infrastructure projects, particularly as federal infrastructure investment begins to flow [51][52] Other Important Information - The company has repurchased approximately $49.5 million of its stock since initiating the stock repurchase program in Q3 2022 [44] - The company expects to continue investing in its rental fleet in 2024, with a focus on mid-single-digit growth in net OEC [76] Q&A Session Summary Question: What are the expectations for TES backlog? - Management indicated that while backlog has ticked down due to normalizing supply chains, they expect good order volume to continue, though backlog may decrease further [10][11] Question: How is the company approaching CapEx for 2024? - The company plans to maintain gross CapEx around $400 million, with expectations for mid-single-digit growth in net OEC [11][12] Question: What are the drivers behind the supply chain delays? - Management identified regulatory approvals, supply chain issues, and funding costs as key factors contributing to delays in transmission projects [73][74]

March 7, 2024 Safe Harbor This presentation includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, as amended, and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, that are based on certain assumptions that management has made in light of its experience in the industry, as well as the Company's perceptions of ...

KANSAS CITY, Mo.--(BUSINESS WIRE)--Custom Truck One Source, Inc. (NYSE: CTOS), a leading provider of specialty equipment to the electric utility, telecom, rail, and other infrastructure-related end markets, today reported financial results for the fourth quarter and full year ended December 31, 2023. CTOS Fourth-Quarter and Full-Year Highlights Total quarterly revenue of $521.8 million and annual revenue of $1,865.1 million, as a result of continued strong demand across our end markets Quarterly gross ...