KANSAS CITY, Mo.--(BUSINESS WIRE)--Load King and Custom Truck One Source, Inc. (NYSE: CTOS) are proud to announce their participation in the upcoming NTEA Work Truck Week, taking place from March 5-8, 2024, at the Indiana Convention Center, Indianapolis, Indiana. This premier industry show serves as a platform for participating companies to exhibit their latest advancements in electric vehicle and hybrid technology. Attendees are invited to visit Booth 4101 to explore a range of pioneering equipment design ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was $434 million, representing a 21% increase compared to Q3 2022 [31][122] - Adjusted gross profit was $150 million, up 14% year-over-year, resulting in an adjusted gross margin of over 34% [31][122] - Adjusted EBITDA reached $100 million, a 9% improvement compared to Q3 of last year [31][122] - Net income for the quarter was $9.2 million, marking the fourth consecutive quarter of positive net income [14] Business Line Data and Key Metrics Changes - The ERS segment reported rental revenue of $115 million, a 3% increase versus Q3 2022, with used equipment sales at $52 million, up almost 41% year-over-year [117] - TES segment revenues were $231 million, up 33% from Q3 2022, with gross profit increasing by more than 46% [16][34] - APS business posted revenue of $36 million, up 4% versus Q3 of last year, with an adjusted gross profit margin of 28% [41] Market Data and Key Metrics Changes - Average utilization for the rental fleet was just under 79%, with a sequential improvement to over 81% by the end of Q3 [9][38] - Backlog ended the quarter at $779 million, a 10% increase compared to the previous year [34][40] - Year-to-date, realized rental rates on core products were up 7% compared to the same period in 2022 [15] Company Strategy and Development Direction - The company continues to focus on optimizing production capacity and service footprint to meet customer expectations [11] - Strategic investments in the rental fleet are ongoing, with a reduction in fleet age to 3.5 years, believed to be the youngest in the industry [10][59] - The company is increasing its projected total revenue guidance range to $1.765 billion to $1.87 billion, affirming adjusted EBITDA guidance of $425 million to $445 million [19][36] Management's Comments on Operating Environment and Future Outlook - Management noted that while there has been volatility among utility customers impacting Q3 results, long-term growth opportunities remain compelling [8] - The company expects continued strong demand for new equipment sales and rental fleet performance, with favorable end market dynamics [12][32] - Supply chain improvements and robust customer demand are anticipated to support strong revenue and adjusted EBITDA growth moving forward [12][31] Other Important Information - The company has repurchased approximately $30.6 million of its stock, including $15.8 million in the quarter [41] - Borrowings under the ABL at the end of Q3 were flat at $492 million, with net leverage improving to 3.3x [18][42] - The company is experiencing mixed inflation impacts, with some raw material costs decreasing while others remain elevated [111] Q&A Session Summary Question: What is the visibility for the utility end market? - Management expects improvement in the utility end market by the end of the year, with compelling long-term demand despite current supply chain delays [23][24] Question: Can you elaborate on the fourth quarter outlook for rental revenue? - Management feels positive about overall rental performance, with expectations for utilization to remain consistent with Q3 levels [45][46] Question: What is the status of inventory levels? - Inventory has increased sequentially, with a mix of finished goods and work-in-progress, and is expected to normalize over time [67][68] Question: Why is the company selling used equipment despite high demand? - Selling used equipment is part of the strategy to manage fleet age and optimize capital deployment, with a focus on maintaining a healthy return on invested capital [70][80] Question: What are the implications of the new production facilities? - New production facilities are performing well, with high levels of output, and additional locations are planned for 2024 to expand service capabilities [92][93]

26 Supplementary Segment Data — TES | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------------------------|-------|---------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------| | (in $ millions) | Q1 22 | | | Q2 22 | | Q3 22 | | Q4 22 | | Q1 23 | | Q2 23 | Q3 23 | | | Equipment sales | $ | 168 $ | | 181 | $ | 174 | $ | 247 | $ | 209 | $ | 251 | $ | 231 | | Cost of equipment sales | | 144 | | 154 | | 147 | | 203 | | ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________ FORM 10-Q _______________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38186 _______________________________ CUSTOM TRUCK ONE ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2023 was $457 million, representing a 26% increase compared to Q2 2022 [15] - Adjusted gross profit was $154 million, up 22% year-over-year, resulting in an adjusted gross margin of 34% [15] - Adjusted EBITDA reached $103 million, a 21% improvement from Q2 2022 [15] - Net income for the quarter was $11.6 million, marking the third consecutive quarter of positive net income [33] Business Line Data and Key Metrics Changes - The rental segment (ERS) generated $118 million in revenue, a 9% increase year-over-year [16] - TES segment revenues were $251 million, up nearly 39% from Q2 2022, with gross profit increasing by over 69% [16] - APS business posted revenue of $37 million, a 4% increase compared to Q2 2022, with an adjusted gross profit margin of 29.5% [8] Market Data and Key Metrics Changes - The backlog for TES grew to $864 million, a 30% increase compared to Q2 2022 [8] - Utilization in the rental fleet finished at just under 82%, which is historically strong [5] - Average OEC on rent increased by more than $53 million compared to Q2 2022 [33] Company Strategy and Development Direction - The company is focused on investing in and optimizing production capacity and service footprint to meet customer expectations [14] - Expansion projects in Kansas City and Union Grove are expected to enhance production capacity [14] - The company aims to maintain net leverage below 3x by the end of fiscal 2023 while continuing to grow the rental fleet [17] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand across strategically selected end markets, including utility, telecom, rail, and infrastructure, which are expected to grow well above GDP [13] - The company is increasing its total revenue guidance range to $1.725 billion to $1.83 billion and adjusted EBITDA range to $425 million to $445 million for 2023 [6] - Management expressed confidence in sustaining margins despite inflationary pressures [8] Other Important Information - SG&A expenses were $58 million for Q2, representing 12.7% of revenues, an improvement from 13.5% in Q2 2022 [7] - The company has repurchased approximately $15 million of its stock since initiating the stock repurchase program [34] Q&A Session Summary Question: Can you help us understand the ending OEC and expected growth? - Management confirmed that they expect to achieve mid to high single-digit growth for the year, despite some fluctuations in OEC [21][40] Question: What are the expectations for free cash flow in the second half? - Management indicated that inventory investment has been a drag on free cash flow, but they anticipate a release of free cash flow in the latter half of the year as sales activity moderates [23] Question: Can you elaborate on the guidance increase and factors considered? - Management noted that the outperformance in Q2 and strong demand were key factors in the updated guidance for the second half [24][50] Question: How is the company addressing the supply chain constraints? - Management acknowledged ongoing supply chain constraints but noted improvements in chassis availability, which should support production and sales goals [19][62] Question: What is the outlook for the telecom segment given recent issues? - Management stated that telecom represents less than 5% of revenue and has not significantly impacted operations, but they are monitoring the situation closely [67]

Table of Contents (Exact name of registrant as specified in its charter) _______________________________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________ FORM 10-Q _______________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to C ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2023 was $452 million, representing a 23% increase compared to Q1 2022 [6][16] - Adjusted gross profit was $150 million, up 16% year-over-year, resulting in an adjusted gross margin of 33.2% [6][16] - Adjusted EBITDA reached $105 million, a 15% improvement from Q1 2022 [6][16] - Net income for the quarter was $13.8 million, an increase of $17.1 million from Q1 2022 [6][16] - SG&A expenses were $57 million, or 13% of revenues, an improvement from 15% in Q1 2022 [6][16] Business Line Data and Key Metrics Changes - In the ERS segment, rental revenue was $114 million, an 8% increase from Q1 2022, with adjusted gross profit of $106 million and a gross margin of 51.4% [19][20] - TES segment revenues were $209 million, a 25% increase year-over-year, with strong backlog and inventory levels [19][20] - APS segment revenue was $37 million, up 10% compared to Q1 2022, with an adjusted gross profit margin of 27.2% [20] Market Data and Key Metrics Changes - The backlog grew by more than $100 million in Q1 2023, up 13% sequentially from Q4 2022 and 46% year-over-year [4][6] - Average OEC on rent increased by over $95 million compared to Q1 2022, with rental utilization at nearly 84%, up from 83% in Q1 2022 [19][20] Company Strategy and Development Direction - The company is focused on investing in and optimizing production capacity, including acquiring land for expansion and increasing manufacturing capabilities [17][20] - Continued investment in the rental fleet is planned, with $109 million deployed in Q1 2023 [19][20] - The company aims to maintain strong service levels while addressing supply chain issues and improving inventory levels [4][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained demand across primary end markets, including utility, telecom, rail, and infrastructure [16][20] - The company expects ERS revenue between $670 million and $710 million, TES revenue between $820 million and $890 million, and total revenue of $1.635 billion to $1.755 billion for 2023 [8][20] - Adjusted EBITDA guidance is projected to be between $420 million and $440 million [8][20] Other Important Information - The company has repurchased approximately $12 million of its stock since initiating the stock repurchase program [20] - As of March 31, the company had $285 million available under its ABL facility, with a net leverage of 3.4x, down from over 3.5x last quarter [20] Q&A Session Summary Question: What is the directional outlook on utilization? - Management indicated that utilization remains strong and typically increases in Q2 and Q3, expecting a similar trend in 2023 [21] Question: Can you provide an update on the backlog in TES? - Management noted that while supply chains are improving, backlog levels are still high, and they expect to manage it effectively [26] Question: How sensitive are margins to the sales component in the ERS segment? - Management explained that the shift in revenue mix from rental to sales impacted margins, with rental margins being significantly higher [28][29] Question: What is the expected EBITDA growth for Q2? - Management anticipates high single-digit growth in EBITDA year-over-year, with some seasonality expected [34]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's unaudited condensed consolidated financial statements for Q1 2023 report **$452.2 million in revenue**, a **$13.8 million net income**, and **$3.07 billion in total assets** [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2023, indicates total assets of **$3.07 billion**, an increase from **$2.94 billion**, primarily due to growth in inventory and rental equipment Condensed Consolidated Balance Sheet Data (in $000s) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $32,218 | $14,360 | | Inventory | $714,354 | $596,724 | | Rental equipment, net | $894,557 | $883,674 | | Total Assets | $3,069,383 | $2,938,212 | | **Liabilities & Equity** | | | | Total current liabilities | $711,328 | $634,878 | | Long-term debt, net | $1,394,039 | $1,354,766 | | Total Liabilities | $2,164,546 | $2,049,769 | | Total stockholders' equity | $904,837 | $888,443 | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) For Q1 2023, the company reported **$452.2 million in total revenue**, a **23.4% increase**, achieving a **$13.8 million net income** Statement of Operations Highlights (in $000s, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total revenue | $452,163 | $366,476 | | Gross Profit | $109,661 | $84,493 | | Operating Income | $39,888 | $9,808 | | Net Income (Loss) | $13,800 | $(3,273) | | Basic EPS | $0.06 | $(0.01) | | Diluted EPS | $0.06 | $(0.01) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2023, net cash from operating activities was **$3.9 million**, a significant improvement, ending the quarter with **$32.2 million in cash** Cash Flow Summary (in $000s) | Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash flow from operating activities | $3,906 | $(29,771) | | Net cash flow from investing activities | $(39,948) | $(48,458) | | Net cash flow from financing activities | $53,849 | $66,138 | | **Net Change in Cash** | **$17,858** | **$(12,091)** | | **Cash at End of Period** | **$32,218** | **$23,811** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business structure, accounting policies, and financial activities, including segment performance and the 2022 HiRail acquisition - The company operates through three main segments: **Equipment Rental Solutions (ERS)**, **Truck and Equipment Sales (TES)**, and **Aftermarket Parts and Services (APS)**[291](index=291&type=chunk)[29](index=29&type=chunk)[51](index=51&type=chunk) - On January 14, 2022, the company acquired HiRail for **$51.0 million** to expand its presence in strategic markets, which is included in the **ERS** segment[64](index=64&type=chunk)[88](index=88&type=chunk) Revenue by Segment (in $000s) - Q1 2023 vs Q1 2022 | Segment | Q1 2023 Revenue | Q1 2022 Revenue | % Change | | :--- | :--- | :--- | :--- | | ERS | $205,920 | $164,914 | 24.9% | | TES | $209,154 | $167,833 | 24.6% | | APS | $37,089 | $33,729 | 10.0% | | **Total** | **$452,163** | **$366,476** | **23.4%** | Gross Profit by Segment (in $000s) - Q1 2023 vs Q1 2022 | Segment | Q1 2023 Gross Profit | Q1 2022 Gross Profit | % Change | | :--- | :--- | :--- | :--- | | ERS | $66,267 | $52,927 | 25.2% | | TES | $34,110 | $23,785 | 43.4% | | APS | $9,284 | $7,781 | 19.3% | | **Total** | **$109,661** | **$84,493** | **29.8%** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes **23.4% year-over-year revenue growth** to strong demand, with **Adjusted EBITDA increasing 15.0%** and sales order backlog growing **45.8%** [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Consolidated revenue for Q1 2023 increased by **23.4%** YoY, driven by equipment sales and rental revenue, resulting in a **$13.8 million net income** from a prior-year loss - The increase in total revenue was primarily due to strong customer demand for new and rental equipment, as well as for parts sales and services, and record levels of vehicle production[187](index=187&type=chunk) - Operating expenses decreased primarily due to the runoff of amortization expense associated with a prior trade name intangible asset and a reduction in post-acquisition integration expenses[215](index=215&type=chunk) - The improvement to net income was primarily the result of gross profit expansion, which was partially offset by higher interest expense on variable-rate debt and floor plan liabilities[190](index=190&type=chunk) [Key Performance Measures and Non-GAAP Financial Measures](index=32&type=section&id=Key%20Performance%20Measures%20and%20Non-GAAP%20Financial%20Measures) The company tracks key metrics including OEC, fleet utilization, and sales order backlog, with **ending OEC growing 6.8%** and **Adjusted EBITDA rising 15.0%** Key Performance Measures | Measure | March 31, 2023 | March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Ending OEC (in $000s) | $1,457,870 | $1,364,660 | 6.8% | | Fleet utilization | 83.6% | 82.5% | 1.3% | | OEC on rent yield | 39.6% | 39.1% | 1.3% | | Sales order backlog (in $000s) | $855,049 | $586,368 | 45.8% | Adjusted EBITDA Reconciliation (in $000s) | Line Item | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net income (loss) | $13,800 | $(3,273) | | EBITDA | $89,116 | $79,677 | | **Adjusted EBITDA** | **$105,200** | **$91,477** | [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity sources are cash from operations and its ABL Facility, with **$32.2 million in cash** and **$284.5 million available** under the ABL Facility - As of March 31, 2023, the company had **$32.2 million** in cash and cash equivalents and **$284.5 million** of borrowing availability under its **ABL Facility**[256](index=256&type=chunk)[205](index=205&type=chunk) - In Q1 2023, net cash from operating activities was **$3.9 million**, a significant improvement from a **$29.8 million** use of cash in Q1 2022, despite increased inventory purchases[264](index=264&type=chunk) - On April 17, 2023, the revolving credit facility with PNC Equipment Finance was increased from **$315.0 million** to **$370.0 million**[236](index=236&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, primarily from interest rate fluctuations on its variable-rate debt and foreign currency exchange rate changes - The company's principal market risk is from interest rate changes on its variable-rate debt, including the **ABL Facility** and floor plan financing[268](index=268&type=chunk) - A **0.125%** (one-eighth percentage point) increase or decrease in applicable interest rates would change the annual interest expense on the **ABL Facility** by approximately **$0.6 million**[268](index=268&type=chunk) - The company generated **$13.9 million** of U.S. dollar-denominated revenues in Canadian dollars during Q1 2023 and does not currently hedge this foreign currency exposure[245](index=245&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were **not effective** as of March 31, 2023, due to a **material weakness** in internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2023, the Company's disclosure controls and procedures were **not effective** due to a **material weakness** in internal control over financial reporting[246](index=246&type=chunk) - The **material weakness** stems from deficiencies in **IT general controls** (user access, change-management) and related business process controls, identified after the acquisition of **Custom Truck LP**[247](index=247&type=chunk)[270](index=270&type=chunk) - Remediation efforts are ongoing, including the implementation of a **new ERP system** in Q2 2022 to address segregation of duties and enhance controls. The weakness is **not yet considered fully remediated**[278](index=278&type=chunk)[1](index=1&type=chunk) [PART II - OTHER INFORMATION](index=47&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various claims and litigation, which management does not expect to have a **material adverse financial impact** - Management does not expect any pending lawsuits, investigations, or claims to have a **material adverse impact** on the business[3](index=3&type=chunk) - The IRS is auditing Custom Truck LP's 2015 federal excise tax withholdings and issued a **$2.4 million** assessment, which the company has appealed and does not believe will probably result in a loss[135](index=135&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) **No material changes** occurred to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022 - **No material changes** occurred to the indicated risk factors as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[280](index=280&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **218,687 shares** under its **$30.0 million stock repurchase program** during Q1 2023, with **$18.4 million** remaining available - On August 2, 2022, the Board authorized a stock repurchase program for up to **$30.0 million** of common stock with no expiration date[281](index=281&type=chunk) Issuer Purchases of Equity Securities (Q1 2023) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Value Remaining under Program (in $000s) | | :--- | :--- | :--- | :--- | | Jan 2023 | 65,178 | $6.37 | $19,311 | | Feb 2023 | 0 | $0.00 | $19,311 | | Mar 2023 | 153,509 | $6.44 | $18,394 | | **Total** | **218,687** | **$6.42** | **$18,394** | [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) The report lists several exhibits filed with the Form 10-Q, including a Stockholders' Agreement, CEO and CFO certifications, and XBRL data files - Exhibits filed include **CEO and CFO certifications** (Sections 302 and 906 of Sarbanes-Oxley Act) and **XBRL interactive data files**[283](index=283&type=chunk)

Rental Rental Sales ($ millions, except where indicated) • Rental revenue increased by more than $1M vs. Q3 '22 4.6x 4.4x 4.3x 4.0x 3.8x 3.8x 3.8x 3.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x Deal Close Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 • Expect to be free cash flow positive for the year (in $ millions) (3) Adjusted Gross Profit and Adjusted EBITDA data for YTD '21 are each shown adding back $10M of previously disclosed leasing receivables and inventory reserve charges. ($ millions, except where indicated) • ...

Custom Truck One Source, Inc. (NYSE:CTOS) Q4 2022 Earnings Conference Call March 14, 2023 5:00 PM ET Company Participants Brian Perman - VP, IR Fred Ross - CEO Ryan McMonagle - President and COO Chris Eperjesy - CFO Conference Call Participants Scott Schneeberger - Oppenheimer Michael Shlisky - D.A. Davidson Companies Kenneth Chung - Citigroup Noelle Dilts - Stifel Justin Hauke - Robert W. Baird Operator Ladies and gentlemen, thank you for standing by and welcome to the Custom Truck One Sources. Fourth Quar ...