Alta Equipment (ALTG) - 2025 Q1 - Quarterly Results

Q1 2025 Performance Overview Alta Equipment Group reported a Q1 2025 revenue decline and net loss, partially offset by stable Adjusted EBITDA and reduced SG&A, with varied segment performance First Quarter Financial Highlights In the first quarter of 2025, Alta Equipment Group reported total revenues of $423.0 million, a 4.2% decrease year-over-year, experiencing a net loss of $(21.7) million or $(0.65) per share, while Adjusted EBITDA remained stable at $33.6 million and SG&A expenses decreased by $7.9 million Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $423.0M | $441.6M | -4.2% | | Product Support Revenues | $138.1M | - | Modest YoY Increase | | SG&A Expenses | - | - | Down $7.9M YoY | | Net Loss to Common Stockholders | $(21.7)M | $(12.7)M | Increased Loss | | Basic & Diluted EPS | $(0.65) | $(0.38) | Increased Loss | | Adjusted EBITDA* | $33.6M | $34.1M | -1.5% | CEO Commentary on Performance CEO Ryan Greenawalt highlighted the business's resilience amid macroeconomic uncertainty, noting stable Construction Equipment trends, declining Material Handling new equipment sales offset by stronger margins, continued strength in product support, and significant SG&A expense reductions - The Construction Equipment business was stable, benefiting from a focus on infrastructure-related projects, which is expected to drive consistent demand for the rest of the year[3] - Material Handling new equipment sales were down compared to peak levels in Q1 2024, but this was partly offset by stronger margins on new and used equipment sales. Bookings in this segment were solid, filling the sales pipeline for H2 2025[3] - The product support business continued to be a "pillar of strength," demonstrating resilience amid volatile economic sentiment[3] - Cost and inventory optimization initiatives resulted in a $7.9 million year-over-year decrease in SG&A expenses[3] Segment Revenue Performance For the first quarter, Construction Equipment revenue decreased by 3.8% to $245.8 million due to a strategic reduction in the rent-to-sell fleet, Material Handling revenue declined by 9.4% to $157.9 million, while Master Distribution revenue significantly rebounded by 35.9% to $17.4 million Q1 2025 Revenue by Segment | Segment | Q1 2025 Revenue | YoY Change | | :--- | :--- | :--- | | Construction Equipment | $245.8 million | -3.8% | | Material Handling | $157.9 million | -9.4% | | Master Distribution | $17.4 million | +35.9% | Strategic Updates and Outlook The company divested its Chicago aerial fleet business, suspended dividends to expand share repurchases, and updated its full-year 2025 Adjusted EBITDA guidance Business Divestiture On May 1, 2025, Alta completed the divestiture of its Chicagoland aerial fleet rental equipment business for $18.0 million in cash, citing misalignment with strategic priorities and competitive environment, with proceeds used to reduce outstanding debt - On May 1, 2025, the company sold its aerial fleet rental business in the Chicago area for $18.0 million in cash[3][6] - The divested business had an implied enterprise value of approximately $20 million and generated an estimated $4 million in annual proforma Adjusted EBITDA[6] - Proceeds from the divestiture are allocated towards reducing the company's outstanding senior indebtedness[3][6] Capital Allocation Strategy The company rebalanced its capital allocation strategy by indefinitely suspending the quarterly common stock dividend, redirecting approximately $8 million annually to an expanded $30 million share repurchase program, including an immediate $10 million allocation to a Rule 10b5-1 plan - The quarterly common stock dividend has been suspended indefinitely to reallocate capital[5][6] - The share repurchase program authorization was increased by $10 million, bringing the total to $30 million[5][6] - An immediate allocation of $10 million was made to a Rule 10b5-1 Plan to facilitate stock purchases, even during blackout periods[5][6] - The approximately $8 million in annual dividend payments will be repurposed for the expanded share buyback program[5][6] Full Year 2025 Financial Guidance Following the divestiture of its Chicago aerial fleet business, Alta reaffirmed its organic guidance and updated its full-year 2025 forecast, now expecting Adjusted EBITDA in the range of $171.5 million to $186.5 million - The company updated its full-year 2025 guidance for Adjusted EBITDA to a range of $171.5 million to $186.5 million, reflecting the impact of the recent divestiture[6] Consolidated Financial Statements (Unaudited) Unaudited Q1 2025 financial statements show decreased revenues, increased net loss, a slight rise in total assets and liabilities, and increased cash usage from operations Condensed Consolidated Results of Operations For the three months ended March 31, 2025, total revenues decreased to $423.0 million from $441.6 million, driven by lower equipment and rental sales, resulting in a gross profit decline to $115.0 million, and despite reduced SG&A, higher interest expenses led to a net loss of $(20.9) million Q1 2025 vs Q1 2024 Income Statement Highlights (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $423.0 | $441.6 | | Gross Profit | $115.0 | $120.6 | | SG&A Expenses | $106.7 | $114.6 | | Income (Loss) from Operations | $0.8 | $(0.9) | | Total Other Expense, Net | $(21.0) | $(15.2) | | Net Loss | $(20.9) | $(11.9) | | Net Loss Available to Common Stockholders | $(21.7) | $(12.7) | Condensed Consolidated Balance Sheets As of March 31, 2025, Alta reported total assets of $1,504.5 million, a slight increase from year-end 2024, while total liabilities rose to $1,448.5 million primarily due to a higher line of credit, leading to a decrease in total stockholders' equity to $56.0 million Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $791.8 | $774.5 | | Total Assets | $1,504.5 | $1,480.4 | | Total Current Liabilities | $583.9 | $577.2 | | Total Liabilities | $1,448.5 | $1,402.8 | | Total Stockholders' Equity | $56.0 | $77.6 | Condensed Consolidated Statements of Cash Flows In Q1 2025, the company used $17.5 million in cash from operating activities, an increase from the prior year, while net cash provided by financing activities significantly increased to $29.5 million due to higher long-term borrowings, resulting in an overall cash decrease of $2.3 million Cash Flow Summary (in millions) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(17.5) | $(13.5) | | Net Cash Used in Investing Activities | $(14.3) | $(16.5) | | Net Cash Provided by Financing Activities | $29.5 | $4.6 | | Net Change in Cash | $(2.3) | $(25.4) | | Cash, End of Period | $11.1 | $5.6 | Non-GAAP Financial Measures Non-GAAP reconciliations for Q1 2025 present Adjusted EBITDA and Adjusted pre-tax net loss, providing alternative performance metrics Reconciliation of Non-GAAP Measures For Q1 2025, Adjusted EBITDA was $33.6 million, reconciled from a net loss of $(21.7) million by adjusting for non-cash and other items, while Adjusted pre-tax net loss available to common stockholders was $(15.8) million, or $(0.48) per share, and Adjusted total net debt and floor plan payables stood at $827.2 million Reconciliation of Net Loss to Adjusted EBITDA (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss available to common stockholders | $(21.7) | $(12.7) | | Depreciation and amortization | $32.4 | $34.0 | | Interest expense | $21.9 | $16.1 | | Income tax provision (benefit) | $0.7 | $(4.2) | | Other adjustments | $(0.7) | $(0.1) | | Adjusted EBITDA | $33.6 | $34.1 | Adjusted Pre-Tax Net Loss per Share | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Adjusted pre-tax net loss | $(15.8)M | $(11.4)M | | Adjusted basic pre-tax net loss per share | $(0.48) | $(0.34) |