Alta Equipment Group Inc.

Good afternoon, and thank you for attending the ALTA Equipment Group third quarter 2022 earnings conference call. My name is Dante, and I'll be your moderator for today's call. I will now turn on the call to Jason Demeyer, Director of SEC Reporting and Technical Accounting with ALTA Equipment Group. Sir, the floor is yours.

Thank you, Dante. Good afternoon, everyone, and thank you for joining us today. A press release detailing ALTA's third 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 third 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 risks, 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 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.alterequipment.com. I will now turn the call over to Ryan.

Thank you, Jason. Good afternoon, everyone, and thank you for joining us today. I will discuss our third quarter financial highlights, the continued strength of our business, and the current market conditions. I will then provide an update regarding the solid execution upon our growth strategy, including our recent acquisition of EcoVerse and the M&A environment going forward. Tony Colucci will then provide a more in-depth review of our third quarter results. But before I get into our third quarter highlights, I want to recognize our employees, because without their hard work and dedication, our strong performance would not be possible. In particular, I would like to commend the Alta team for exemplifying our guiding principle of one team. As employees from across the company rallied to support our Florida-based team members affected by the devastation of Hurricane Ian, we are proud of our culture and our corporate purpose of delivering trust that makes a difference. It was inspiring to see our passionate Alta team members step up to help our customers, neighbors, and coworkers in such a stressful and turbulent time. Now referencing slide five of our investor presentation, For the third quarter, our business continued to deliver consistent and solid growth. Our position in the market is unique, and our success continues to be driven by both organic expansion and successful M&A activity. As a result, our total revenue increased 37.3% to $405 million. As of the end of the third quarter, we have generated $1.1 billion in total revenue, roughly equal to our total revenue for full year 2021. We continue to deliver solid revenue gains in both our construction and material handling segments, as Tony will detail in his comments. We also continue to achieve positive gap net income compared to a loss a year ago. Adjusted EBITDA also continues to grow, increasing 39.2% to $44 million versus the year-ago quarter, and has nearly surpassed 2021 levels on a year-to-date basis. Supply chain headwinds continue to persist but have stabilized. Our robust product support business continues to thrive as lead times for new equipment are driving more repair and rebuild business from our existing field population. Tight availability has also kept pricing for both used equipment and rental rates at elevated levels. Our strong performance continues to reflect the consistency in our business and the stability in the markets we serve. Demand for parts and service continues to be at high levels and sales backlogs remain at record levels. Our rental fleet continues to benefit from increased financial and physical utilization with higher rates driven primarily by the continued supply, demand, and balance. The tight labor market is pushing companies to increasingly adopt integrated and automated material handling solutions. And on a longer-term basis, we also remain encouraged as several federal initiatives are likely to positively impact the extension of the cycle including the $550 billion infrastructure bill and the CHIPS and the Inflation Reduction Acts, which promote increased investment in manufacturing and renewable energy. A related trend, the repatriating of advanced manufacturing to the U.S., is directly benefiting many areas of ALTA's geographic footprint in the Great Lakes region and in the Northeast. Let me conclude with an update on our growth strategy, the success of which is clear in our financial results and on track as evidenced by our recent transactions. Referencing slide seven, since we went public in 2020, we have completed 13 acquisitions representing total revenue of $440 million. We believe that the long-term trends driving consolidation remain and we do not anticipate slowing from our acquisitive growth strategy. Our acquisition of Yale Industrial Trucks, a privately held Yale lift truck dealer with five locations in southeastern Canada, It's progressing very well, and we have added several new OEM vendor relationships to expand our product offering for the Ontario and Quebec markets. We expect that additional allied product line sales will result in growth of the product support business over time, driving additional part sales and technician headcount. As we mentioned in our previous call, the addition of the Canadian region to ALTA's exclusive territory takes us to approximately 20% of the North American addressable market for lift trucks. and creates additional opportunity to cross-sell the integrated solutions of our Peak Logics material handling business. We recently closed our acquisition of Ecoverse Industries, which provides us with the master dealer rights to distribute best-in-class environmental equipment and replacement parts to dealers and customers throughout North America. This immediately positions Alta as an industry leader in the rapidly growing market of eco-friendly waste solutions and material recyclings. which we believe represents a significant opportunity for our business. I'll make a couple points on how ECOVERSE meets our strategic M&A criteria. First, we look for businesses that are anchored by a relationship with a market-leading manufacturer of premium products with exclusive territorial rights. Secondly, we look for businesses where the field population of equipment creates annuitized revenue streams in the form of aftermarket sales of replacement parts and product support services. We also prioritize businesses with cross-selling opportunities across our other product offerings and with the opportunity to grow what we call wallet share of our customers' spend for all the categories we cover. We believe Ecoverse checks all the boxes and is our first entree into master-dealer relationships with equipment manufacturers. We are excited to have the Ecoverse team on board, and we see exciting organic opportunities to expand in the fast-growing environmental equipment space. Lastly, in terms of growth, we continue to build out our capabilities in e-mobility as we position Alta as the dealer of the future and look for ways to leverage our platform and existing infrastructure to capitalize on emerging market trends and support our customers' evolving needs. To close, we are very encouraged about our strong financial performance thus far in 2022 and believe our business has significant opportunities for the balance of this year and into 2023. Again, I want to thank the ALTA team for their significant accomplishments, and I'll now turn the call over to Tony.