Alta Equipment Group Inc.

Ladies and gentlemen, and welcome to the ALTA Equipment Group Fourth Quarter 2020 earnings call. At this time, all participants are in the listening-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, then zero on your touch-down telephone. As a reminder, this conference call is being recorded. And now it is my pleasure to hand over the conference to your host, Christina McDonald, Director of External Reporting.

Thank you, Christian. Good afternoon, everyone. Welcome to ALTA's fourth quarter and full year 2020 earnings conference call. On the call with us today are Ryan Greenewald, our Chairman and CEO, and Tony Colucci, our Chief Financial Officer. For today's call, management will first provide a review of the fourth quarter and the full year financial results, and then we will conduct a Q&A session. We will begin with some prepared remarks before we open the call for your questions. Before we get started, I'd like to remind everyone that this conference call may contain certain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 reflecting management's current expectations regarding future results of operations, our business strategy, financial outlook, achievements of the company, and other non-historical statements as described in our press release. These forward-looking statements are subject to both known and unknown risks, uncertainties and assumptions, including those related to althouse growth, market opportunities, and general economic and business conditions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Descriptions of fees and other risks that could cause actual results to differ materially from these forward-looking statements are discussed in our reports filed with the ECC, including our press release that was issued today. During this call, we may present both GAAP and non-GAAP financial measures. A reconciliation of gap-to-non-gap measures is included in today's press release and can be found on our website at investors.altaequipment.com. And with that, I'll now turn the call over to Ryan.

Thank you, Sanam, and welcome, everyone. Thank you for joining Alta Equipment Group's fourth quarter 2020 earnings call. Our strong performance and solid financial results in the fourth quarter capped off a transformative and very successful 2020, despite the significant impact of the COVID pandemic. We achieved several important accomplishments, which I'll briefly touch on before turning the call over to Tony for a financial review of the fourth quarter and full year. The operating environment for our services continued to improve from the prior quarter as customer demand increased consecutively each month in the fourth quarter. Labor productivity, which is the heartbeat of our operations, increased to benchmark levels before the end of the year. In response to increased sales activity and demand for labor hours, we added to our product support workforce both organically and through acquisitions and ended the year with over 900 skilled technicians, an increase of approximately 250 technicians year over year, and representing roughly half of our total headcount. Our entire Alta team once again rose to the occasion during these difficult times, demonstrating incredible dedication and delivered on our commitment to exceptional service and equipment uptime. A sincere thank you to all of our employees who make Alta the great company it is today. In touching on our financial highlights, fourth quarter adjusted EBITDA came in at $24.6 million on revenue of $280.4 million. We reached a true milestone in delivering over $1 billion in revenue on a pro forma basis with adjusted pro forma EBITDA of $98.7 million for the year. Our liquidity position remains strong and our balance sheet flexible in providing the support needed to execute our organic and acquisition growth strategy. In looking at the full year, we overcame many challenges that we faced due to the COVID pandemic and navigated the business through unprecedented shutdowns. We were designated as an essential business and remained fully operational at all of our 54 branches across 11 states. Our variable cost structure and the dexterity of our business model allowed management to swiftly implement cost reduction measures to efficiently manage the business and sustain positive adjusted EBITDA and mitigate against margin declines. The revenue decline was less than anticipated and business activity began to pick up from the April trough through the end of the year. As we moved through the recovery in the second half of the year, we reduced some of the cost mitigation measures and began calling back skilled technicians who were furloughed as business activity returned to pre-COVID levels. The diversity of both our geographies and our end markets enabled us to weather the pandemic storm. Also, as a reflection of our business model, our product support revenue remained strong during this period and grew 47% in 2020 compared to the prior year when including our acquired revenues. In 2020, consistent with our acquisition strategy, we expanded our geographic footprint, established relationships with new OEM partners, and further diversified our end market reach. In the fourth quarter, we completed two accretive acquisitions that increased our scale and strengthened our business profile. We acquired the construction dealership assets of Vantage Equipment, which operates three branches in the northern region of New York State. ALTA is now the authorized distributor of Volvo products in most of New York State, a region that offers significant additional expansion opportunities. Vantage also diversifies our customer base and serves as a great complement to our lift tech business, which serves the New York material handling market. This combination is powerful and allows us to bring our full resources to this large and growing market. As we mentioned on our third quarter earnings call, we closed the Howell tractor and equipment acquisition in late October. Howell serves the northern Illinois and northwest Indiana construction markets with a wide range of construction and crane equipment. Howell enjoys a strong relationship with leading manufacturers such as Senebogen, which is a new addition to Alta's product line in the region. Looking at the full year, we completed seven acquisitions, which in total contributed approximately $23 million to adjusted EBITDA in 2020, our most active year on the M&A front. Alta has become the partner of choice in the fragmented equipment dealer market as we provide manufacturers the benefit of our scale, liquidity, and reputation to facilitate share growth and customer loyalty. The structural supply-demand imbalance between buyers and sellers in our industry remains intact, and we continue to execute on our growth strategy. As we noted in today's news release, we've rebranded our industrial segment to material handling. Material handling is the recognized industry vernacular and better described in the range of our capabilities. The rebranding will have particular significance with messaging to the e-commerce sector, which values the integration of material handling equipment with the more sophisticated systems offerings. Peak Logix, a national material handling systems integrator we acquired in mid-year, has significantly enhanced our positioning in this area and provides us with a competitive advantage in the fast-growing warehousing and logistics market, which has only continued to pick up steam as the recovery continues. Peak offers a complete material management solution and delivers efficiency and increased productivity for its customers. We've been able to cross-sell and promote their services across our entire material handling customer base, and integrate them with our other warehouse automation solutions. We also expanded our full-service capabilities in this area more recently with a small but strategic acquisition in SoftTech, which provides warehouse control software and systems. It is important to highlight that these new systems integration services are unconstrained by our dealership territories, and both acquired businesses have customers throughout the U.S. and internationally. In looking forward, we see a clear path to a full recovery as the recovery takes hold and the year progresses. The investments we made in technology, products, and people position us well to continue our strong performance entering 2021. We're encouraged by the positive trends we are seeing, especially by the strong secular tailwinds that are apparent in our material handling and construction segments. E-commerce growth is driving higher volumes from large retailers who warehouse their products, which increases our opportunity to expand and lean into this area of the business. The demand for automation and more complex systems and technology in warehousing and material handling has never been greater, and we believe it is in the early stages. There is clearly upside from potential federal stimulus and pent-up demand for capital projects to improve our aging national infrastructure. ALTA's strong relationships with leading OEMs and our recent geographic market expansion position us to be a great partner for both the material handling and construction equipment markets. This was truly a transformative year by any measure. We believe our strong financial results in our first year as a public company demonstrate the outstanding execution of our resilient dealership model and our operational discipline through a difficult and unprecedented time. We are excited and increasingly confident in our ability to deliver increased financial results and enhance shareholder value moving forward. I'd like to thank our manufacturing partners for their support, our dedicated employees for their hard work, and our shareholders for their support and confidence in the company. With that, I'll turn it over to Tony for his financial review.