Nesco Holdings, Inc. (NSCO) Q3 2020 Earnings Conference Call November 10, 2020 8:30 AM ET Company Participants Preston Parnell - Investor Relations Lee Jacobson - Chief Executive Officer Josh Boone - Chief Financial Officer Conference Call Participants Stefanos Crist - CJS Securities Tim Thein - Citi Group Mike Schilsky - Colliers Securities Rich Kus - Jefferies & Co Yilma Abebe - JPMorgan Abe Landa - Stifel Robert Rhoads - Deutsche Bank Operator Thank you for standing by. This is the conference operator. W ...

Q3 2020 EARNINGS PRESENTATION November 9, 2020 Safe Harbor 1 SOME OF THE FINANCIAL INFORMATION AND DATA OF NESCO HOLDINGS, INC. ("NESCO") CONTAINED HEREIN DOES NOT CONFORM TO SEC REGULATION S-X IN THAT IT INCLUDES CERTAIN FINANCIAL INFORMATION NOT DERIVED IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"). ACCORDINGLY, SUCH INFORMATION AND DATA HAS BEEN AND WILL BE ADJUSTED AND PRESENTED DIFFERENTLY IN NESCO'S SEC REPORTS. NESCO BELIEVES THAT THE PRESENTATION OF SUCH NON-GAAP ...

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, 2020 ☐ 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 _______________________________ Nesco Holdings, ...

Q2 2020 EARNINGS PRESENTATION August 6, 2020 Safe Harbor 1 SOME OF THE FINANCIAL INFORMATION AND DATA OF NESCO HOLDINGS, INC. ("NESCO") CONTAINED HEREIN DOES NOT CONFORM TO SEC REGULATION S-X IN THAT IT INCLUDES CERTAIN FINANCIAL INFORMATION NOT DERIVED IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"). ACCORDINGLY, SUCH INFORMATION AND DATA HAS BEEN AND WILL BE ADJUSTED AND PRESENTED DIFFERENTLY IN NESCO'S SEC REPORTS. NESCO BELIEVES THAT THE PRESENTATION OF SUCH NON-GAAP M ...

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 June 30, 2020 ☐ 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 _______________________________ Nesco Holdings, Inc. ...

NESCO® 0 Investor Presentation June 2020 Disclaimer 1 SOME OF THE FINANCIAL INFORMATION AND DATA OF NESCO HOLDINGS, INC. ("NESCO") CONTAINED HEREIN DOES NOT CONFORM TO SEC REGULATION S-X IN THAT IT INCLUDES CERTAIN FINANCIAL INFORMATION NOT DERIVED IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"). ACCORDINGLY, SUCH INFORMATION AND DATA HAS BEEN AND WILL BE ADJUSTED AND PRESENTED DIFFERENTLY IN NESCO'S SEC REPORTS. NESCO BELIEVES THAT THE PRESENTATION OF SUCH NON-GAAP MEASUR ...

Table of Contents _______________________________ _______________________________ _______________________________ Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.0001 par value NSCO New York Stock Exchange Redeemable warrants, exercisable for Common Stock, $0.0001 par value NSCO.WS New York Stock Exchange Large accelerated filer o Accelerated filer x Non-accelerated filer o Smaller reporting company o Emerging growth company x UNITED STATES SECURITIES AND EXC ...

MESCO® 0 Investor Presentation March 2020 Disclaimer 1 SOME OF THE FINANCIAL INFORMATION AND DATA OF NESCO HOLDINGS, INC. ("NESCO") CONTAINED HEREIN DOES NOT CONFORM TO SEC REGULATION S-X IN THAT IT INCLUDES CERTAIN FINANCIAL INFORMATION NOT DERIVED IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"). ACCORDINGLY, SUCH INFORMATION AND DATA HAS BEEN AND WILL BE ADJUSTED AND PRESENTED DIFFERENTLY IN NESCO'S SEC REPORTS. NESCO BELIEVES THAT THE PRESENTATION OF SUCH NON-GAAP MEASU ...

PART I [Business](index=4&type=section&id=Item%201.%20Business) Nesco Holdings, Inc. is a leading specialty equipment rental provider for the North American electric utility T&D, telecom, and rail industries, operating through Equipment Rental and Sales (ERS) and Parts, Tools, and Accessories (PTA) segments - Nesco is one of the largest specialty equipment rental providers in North America, serving the electric utility T&D, telecom, and rail industries with a fleet of approximately **4,600 units** as of December 31, 2019[15](index=15&type=chunk) - The company operates through two primary segments: Equipment Rental and Sales (ERS) and Parts, Tools, and Accessories (PTA), offering a "one-stop-shop" solution to its customers[21](index=21&type=chunk) - Core end-markets (T&D, telecom, rail) are experiencing secular growth driven by infrastructure upgrades, 5G deployment, and increased freight transportation needs, historically outpacing GDP growth[15](index=15&type=chunk)[23](index=23&type=chunk) - Key growth strategies include investing in the fleet to capture unmet demand (over **6,000 rental opportunities** turned away from 2017-2019), expanding the PTA business, and pursuing selective strategic acquisitions[40](index=40&type=chunk)[42](index=42&type=chunk) Revenue by End-Market (2019) | End-Market | Percentage of Revenue | | :--- | :--- | | T&D | 76.4% | | Telecom | 12.9% | | Rail | 5.2% | | Other | 5.5% | [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from cyclical demand, reliance on manufacturers, significant indebtedness, historical internal control weaknesses, and the COVID-19 outbreak - Demand for services is cyclical and vulnerable to industry and economic downturns, which could affect customer spending on infrastructure projects[63](index=63&type=chunk) - The company relies on a limited number of manufacturers for equipment purchases, with three vendors accounting for more than **10% of purchases** for the year ended December 31, 2019[67](index=67&type=chunk) - Significant indebtedness of **$756.6 million** as of December 31, 2019, could limit financial flexibility, access to capital, and ability to service debt obligations[113](index=113&type=chunk) - A material weakness in internal control over financial reporting related to accounting for rental equipment was identified as of December 31, 2018, and was remediated as of December 31, 2019[101](index=101&type=chunk)[102](index=102&type=chunk) - The company is controlled by affiliates of Energy Capital Partners (ECP), which owned **53% of common stock** as of December 31, 2019, and their interests may differ from other shareholders[127](index=127&type=chunk) - The recent COVID-19 outbreak is identified as a potential risk that could adversely affect business, financial condition, and results of operations through supply chain disruptions or widespread quarantines[134](index=134&type=chunk)[135](index=135&type=chunk) [Unresolved Staff Comments](index=26&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[136](index=136&type=chunk) [Properties](index=26&type=section&id=Item%202.%20Properties) Nesco's headquarters is in Fort Wayne, IN, operating 12 leased rental locations and partnering with over 50 third-party service locations across North America - The company's headquarters is in Fort Wayne, IN, operating **12 leased equipment rental and service locations** and partnering with over **50 third-party service locations** across the U.S. and Canada[137](index=137&type=chunk) - Total square footage under lease is approximately **300,000** with expiration dates through 2025[139](index=139&type=chunk) [Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various ordinary course legal matters, none expected to materially impact financial condition - Nesco is subject to various legal proceedings arising in the ordinary course of business but believes none will have a material adverse effect on its business or financial condition[140](index=140&type=chunk) [Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[141](index=141&type=chunk) PART II [Market for Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Nesco's common stock trades on NYSE under "NSCO", with no cash dividends anticipated as earnings are retained for business operations - The company's common stock is traded on the NYSE under the symbol **"NSCO"**[142](index=142&type=chunk) - Nesco has never declared or paid cash dividends and does not anticipate paying any in the foreseeable future, as earnings are intended to be retained for business operations[146](index=146&type=chunk) - No issuer purchases of equity securities were made[147](index=147&type=chunk) [Selected Financial Data](index=29&type=section&id=Item%206.%20Selected%20Financial%20Data) Revenue grew from **$203.8 million** in 2017 to **$264.0 million** in 2019, but net loss increased to **$27.1 million** in 2019 due to higher interest expense and debt extinguishment loss Selected Financial Data (in $000s) | Metric | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Revenue** | $264,035 | $246,297 | $203,767 | | **Gross Profit** | $86,548 | $81,618 | $57,745 | | **Operating Income** | $36,018 | $43,164 | $23,488 | | **Net Loss** | $(27,052) | $(15,526) | $(27,095) | | **Total Assets** | $815,284 | $691,556 | $697,506 | | **Total Liabilities** | $827,414 | $850,312 | $841,470 | [Management's Discussion and Analysis of Financial Condition and Results of Operation](index=31&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) In 2019, total revenue increased **7.2%** to **$264.0 million**, but net loss widened to **$27.1 million** due to higher interest expense and debt extinguishment loss, while Adjusted EBITDA grew **4.8%** Year-over-Year Operating Results (in $000s) | Metric | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $264,035 | $246,297 | 7.2% | | Gross Profit | $86,548 | $81,618 | 6.0% | | Operating Income | $36,018 | $43,164 | (16.6)% | | Net Loss | $(27,052) | $(15,526) | 74.2% | Key Performance Metrics | Metric | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA (a) | $127,486 | $121,657 | 4.8% | | Average equipment on rent | $478,996 | $450,195 | 6.4% | | Average fleet count | 4,172 | 3,839 | 8.7% | | Average fleet utilization | 80.7% | 82.3% | (1.9)% | - The increase in 2019 net loss was primarily due to a **$6.7 million** increase in net interest expense and a **$4.0 million** loss on the extinguishment of debt related to the merger and recapitalization[175](index=175&type=chunk) - In July 2019, the company entered into a new **$350 million** revolving credit facility and issued **$475 million** in Senior Secured Notes due 2024 to refinance existing debt and support growth[222](index=222&type=chunk)[223](index=223&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on its variable-rate debt, partially hedged by an interest rate collar, and unhedged foreign exchange risk from Canadian and Mexican operations - The primary market risk is interest rate fluctuations on the variable-rate 2019 Credit Facility, with **$250.0 million** outstanding as of December 31, 2019[238](index=238&type=chunk)[240](index=240&type=chunk) - The company uses an interest rate collar to hedge against interest rate fluctuations on its variable-rate debt[240](index=240&type=chunk) - Nesco is exposed to foreign exchange rate risk from revenues denominated in Canadian dollars (**$5.7 million** in 2019) and Mexican pesos (**$1.0 million** in 2019), and this exposure is not hedged[241](index=241&type=chunk) [Financial Statements and Supplementary Data](index=49&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for 2017-2019, reflecting asset and revenue growth alongside persistent net losses, with detailed notes on accounting policies and debt structure - The financial statements were audited by Deloitte & Touche LLP, which issued an unqualified opinion[245](index=245&type=chunk) Consolidated Balance Sheet Highlights (in $000s) | Account | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Total Current Assets | $115,843 | $68,617 | | Rental Equipment, net | $383,420 | $320,722 | | Goodwill & Intangibles, net | $308,747 | $299,454 | | **Total Assets** | **$815,284** | **$691,556** | | Long-term Debt, net | $713,023 | $756,872 | | **Total Liabilities** | **$827,414** | **$850,312** | | **Total Stockholders' Deficit** | **$(12,130)** | **$(158,756)** | - The merger with Capitol Investment Corp. IV on July 31, 2019, was accounted for as a reverse recapitalization, with Nesco Holdings I, Inc. treated as the accounting acquirer[278](index=278&type=chunk)[281](index=281&type=chunk) - On November 4, 2019, the company acquired Truck Utilities, Inc. for a purchase price of approximately **$47.7 million**, adding to both the ERS and PTA segments[333](index=333&type=chunk) [Changes In and Disagreements with Accountants](index=85&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) Following the merger, Marcum LLP was dismissed and Deloitte & Touche LLP was engaged as the independent auditor, with no disagreements reported - On September 10, 2019, Marcum LLP was dismissed and Deloitte & Touche LLP was engaged as the company's independent registered public accounting firm[407](index=407&type=chunk) - There were no disagreements with Marcum on accounting principles, financial statement disclosure, or auditing scope during its engagement[408](index=408&type=chunk) [Controls and Procedures](index=85&type=section&id=Item%209A.%20Controls%20and%20Procedures) A material weakness in rental equipment accounting for 2018 was remediated in 2019 through personnel hires and enhanced controls, leading to effective disclosure controls - A material weakness related to accounting for rental equipment was identified for the year ended December 31, 2018[410](index=410&type=chunk) - A remediation plan was implemented in 2019, including hiring additional experienced personnel and enhancing controls over rental equipment activity[410](index=410&type=chunk) - Management concluded that the material weakness was remediated and disclosure controls were effective as of December 31, 2019[410](index=410&type=chunk)[413](index=413&type=chunk) [Other Information](index=86&type=section&id=Item%209B.%20Other%20Information) The company reports no other information to disclose - None[416](index=416&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=87&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company is led by CEO Lee Jacobson, President Robert Blackadar, and CFO Bruce Heinemann, with a ten-member board, a majority of whom are independent, and three standing committees - The executive team includes CEO Lee Jacobson, President Robert Blackadar, and CFO Bruce Heinemann[420](index=420&type=chunk) - The Board of Directors consists of **ten members**, with William Plummer serving as Chairman and Mark D. Ein as Vice Chairman[420](index=420&type=chunk)[422](index=422&type=chunk)[423](index=423&type=chunk) - The board has determined that Messrs. Plummer, Kimmelman, D'Argenio, Stoops, Dryden, Ein, and Holthaus are independent directors[428](index=428&type=chunk) - The board has three standing committees: Audit, Nominating, and Compensation, with charters outlining their responsibilities[432](index=432&type=chunk)[433](index=433&type=chunk)[434](index=434&type=chunk)[437](index=437&type=chunk) [Executive Compensation](index=93&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation in 2019 included base salary, non-equity incentives, and equity awards, with new stock options and RSUs granted post-merger, while non-employee directors received cash and equity 2019 Summary Compensation | Name | Position | Total Compensation ($) | | :--- | :--- | :--- | | Lee Jacobson | CEO | 2,866,894 | | Bruce Heinemann | CFO | 1,197,961 | | Robert Blackadar | President | 1,623,809 | - On August 21, 2019, the company granted stock options and RSUs to its Named Executive Officers, which vest over four years[456](index=456&type=chunk) - Non-employee directors receive an annual cash retainer of **$50,000**, with committee chairs receiving an additional **$10,000**, and certain directors also received stock option grants in 2019[463](index=463&type=chunk) [Security Ownership](index=99&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) As of March 1, 2020, ECP ControlCo, LLC was the largest beneficial owner with **54.7%** of common stock, and all directors and executive officers collectively owned **26.7%** Principal Shareholders (as of March 1, 2020) | Name of Beneficial Owner | Approximate Percentage of Outstanding Common Stock | | :--- | :--- | | ECP ControlCo, LLC | 54.7% | | Capitol Acquisition Management IV, LLC | 15.9% | | Capitol Acquisition Founder IV, LLC | 8.1% | | Brown Advisory Incorporated | 7.6% | | Alyeska Investment Group, L.P. | 5.8% | | Brookfield Asset Management Inc. | 5.3% | - All current directors and executive officers as a group beneficially own **26.7%** of the company's common stock[469](index=469&type=chunk) [Certain Relationships and Related Transactions](index=102&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Nesco engages in commercial transactions with PLH Group, an ECP affiliate, generating **$11.5 million** in 2019 revenue, and the board has a majority of independent directors - Nesco has commercial transactions with PLH Group, Inc., an affiliate of its controlling shareholder, ECP, with revenues from these transactions totaling **$11.5 million** in 2019, **$9.9 million** in 2018, and **$6.0 million** in 2017[485](index=485&type=chunk) - The board has determined that Messrs. Plummer, Kimmelman, D'Argenio, Stoops, Dryden, Ein, and Holthaus are independent directors[487](index=487&type=chunk) [Principal Accountant Fees and Services](index=103&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) For fiscal year 2019, Deloitte & Touche LLP charged **$642,000** for audit fees and **$194,810** for tax fees, all pre-approved by the audit committee Accountant Fees for Fiscal Year 2019 | Fee Category | Amount ($) | | :--- | :--- | | Audit Fees | 642,000 | | Tax Fees | 194,810 | | All Other Fees | 0 | | **Total** | **836,810** | PART IV [Financial Statement Schedule and Exhibits](index=104&type=section&id=Item%2015.%20Financial%20Statement%20Schedule%20and%20Exhibits) This section includes condensed parent company financial information and a comprehensive list of exhibits filed with the Form 10-K - Includes condensed parent-company-only financial statements for Nesco Holdings, Inc.[494](index=494&type=chunk) - Provides a comprehensive list of exhibits filed with the annual report, including merger agreements, debt indentures, and executive compensation plans[514](index=514&type=chunk)[515](index=515&type=chunk) [Form 10-K Summary](index=113&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not applicable[518](index=518&type=chunk)

Table of Contents _______________________________ _______________________________ _______________________________ Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.0001 par value NSCO New York Stock Exchange Redeemable warrants, exercisable for Common Stock, $0.0001 par value NSCO.WS New York Stock Exchange Large accelerated filer o Accelerated filer x Non-accelerated filer o Smaller reporting companyo Emerging growth company x UNITED STATES SECURITIES AND EXCH ...