Alta Equipment Group Inc.

Good afternoon, and thank you for attending the Alta Equipment Group first quarter 2022 earnings conference call. My name is Forum, and I will be your moderator for today's call. I will now turn the call over to Jason Dammeier, Director of SEC Reporting and Technical Accounting with Alta Equipment Group.

Thank you, Forum. Good afternoon, everyone, and thank you for joining us today. A press release detailing Alta's first quarter 2022 financial results was issued this afternoon and is posted on our website, along with a presentation designed to assist you in understanding the company's results. On the call with me 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 first quarter financial results, 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, including statements about future financial results, our business strategy and 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 risk uncertainties and assumptions, including those related to altered 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 statement to reflect changes that occur after this call. Descriptions of these and other risks that could cause actual results to differ materially from these forward-looking statements are discussed in our reports filed with the SEC, including our press release that was issued today. During this call, we may present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's press release and can be found on our website at investors.altaequipment.com. I will now turn the call over to Ryan. Thank you, Jason.

Good afternoon, everyone, and thank you for joining us today. Our first quarter results reflect the ongoing strength in all the end-user markets we serve and continues to validate our unique and flexible business model. I will discuss some of our first quarter financial highlights and the encouraging industry trends and will then provide an update regarding the solid execution upon our growth strategy, including the M&A environment. Tony will then provide a more in-depth review of our first quarter results. Beginning with the top line, total revenues increased 23.4% or $62.9 million to $331.7 million in the first quarter. The dedicated ALTA team continues to be laser-focused on operational excellence, and as a result, the year-over-year improvement was driven by both organic and acquisition-related growth. Our construction and material handling segments produced significant year-over-year revenue growth on a combined basis. In fact, all our business segments delivered better results from the year-ago quarter, as the favorable business environment in all our end-user markets continues to be favorable despite ongoing supply chain issues and other economic headwinds. Keep in mind the first quarter is historically the weakest period of the year due to seasonality issues, and we are now into the peak period of activity in our markets. Based on first quarter performance, we continue to maintain our adjusted EBITDA guide range of 137 million to 142 million for 2022, which would be a 16% increase at the midpoint over 2021 results. Let me now provide a few observations on market conditions. Our current visibility regarding demand across all our end user markets and regions remains extremely positive. Customer sentiment is very high and there are no signs that project activity is decelerating any time in the near term. Key industry indicators also support these takeaways and our belief that the current up cycle will continue for some time. Our track record on the topic Our operating performance reflects these trends well. Demand for new and used equipment and rental equipment has eclipsed pre-pandemic peak levels, and backlogs now continue to hover at record levels. For example, our organic physical rental fleet utilization was up more than five percentage points from a year ago, and rates on rental equipment have also substantially improved. With more fleet on job sites, our product support business is also benefiting from higher margin parts and service revenue streams. The recently passed bipartisan infrastructure bill should also be an incremental benefit to our business at some point in the future. Overall, we are operating in a fundamentally robust expansion cycle and are focused on leveraging these opportunistic conditions to grow our business and increase profitability. In terms of our growth strategy, we remain intensely focused on continuing our positive achievements from last year into 2022, which included six acquisitions that added $152 million in revenue, and $15.2 million in adjusted EBITDA. Our goal is increasing our scale and improving profitability. As we have demonstrated, this includes continuing to leverage our flexible business model, improving operational excellence throughout our entire organization, adding new OEMs and expanding existing relationships to broaden our equipment portfolio, increasing our end market diversification and our density within each region, expanding into new states and markets that present solid growth opportunities, and continuing to execute on a robust pipeline of strategic and accretive M&A opportunities. Our track record on the topic of M&A should speak for itself. We take a disciplined approach to acquisitions and will not pursue an opportunity that does not fit our strategic and financial criteria. We have a solid balance sheet to support our expansion initiatives, and we are confident that we can continue to grow through acquisitions and further scale our business for continued growth in 2022. Our entrance into the commercial electric vehicle industry in partnership with Nikola is representative of expanding our product and service portfolio, and this initiative is progressing very well. While we don't expect this venture to be a material contributor to our results in 2022, It puts us in an excellent position to be an EV truck market leader in some of the densest truck markets in the country as commercial uptake of electric vehicles accelerates. Our team has been conducting product demonstrations and we are working closely with Nikola and prospective customers on several late stage sales opportunities. Lastly, we continue to structure our leadership team to drive future success for our business. In early April, we announced the appointment of Craig Brubaker as Chief Operating Officer, a new position at the company. Craig joined Alta in 1995 after completing his BS in mechanical engineering. As chief operating officer, Craig will lead integrations of acquired businesses, share best practices across the operating units, and drive operational efficiencies and controls across the enterprise. Craig brings a great history of success and strong operational experience to this expanded role, and we look forward to the contributions he will continue to make as part of the Alta family. In closing, we're excited about our opportunities in 2022,