Alta Equipment Group Inc.

Good afternoon and thank you for attending the Alta Equipment Group fourth quarter and full year 2022 earnings conference call. My name is Jason and I'll be your moderator for today's call. I will now turn the conference over to Jason Dammeer with the director of SEC reporting and technical accounting with Alta Equipment Group.

Thank you Jason. Good afternoon everyone and thank you for joining us today. A press release detailing Alta's fourth quarter and full year 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 fourth quarter and full year 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 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 strong fourth quarter capped off an outstanding year for Alta. First, I'll discuss our full year 2022 financial highlights, the continued strength in our business, and the demand in our end user markets. Next, I will provide an update regarding the sales execution upon our growth strategy, including our recent acquisition of Ecoverse, as well as our expectations for continued M&A activity in 2023. Tony will then provide a more in-depth review of our fourth quarter and full year financial results. But before I get into our highlights for the year, I want to recognize our employees because without their hard work and dedication, our strong performance would not be possible. We believe our performance for the year demonstrates the strength and resiliency of our business and successful growth strategy. Despite some economic headwinds, all segments of our business are performing well, and we are achieving significant growth both organically and through our numerous accretive acquisitions. Total revenues for the year increased 29.6%, or $359 million. Organic revenue for the year increased $194 million, or 16.1% over last year, which was driven by a 26.3% increase in new and used equipment sales, a 13.7% increase in our combined parts and service product support departments, and a 10.3% improvement in rental revenues. On a consolidated basis, we deliver record total revenue of approximately $1.6 billion for 2022. It was a truly phenomenal year for Alta against the backdrop of a rising rate environment and sustained historic supply chain disruptions. We believe that our performance and the progress that we made in 2022 reflects the underlying strength of our business and positions us to drive meaningful scale going forward. As I highlighted earlier, our financial results are visibly benefiting from our accretive acquisitions. On March 1st, we closed another acquisition, acquiring the assets of M&G Material Handling, a privately held Yale dealer with exclusive rights in Rhode Island. The addition of M&G gives us exclusive rights to both Hyster and Yale in Rhode Island, further consolidating our dual-brand material handling strategy. M&G adds another $5.8 million of revenue to our material handling segment on an annualized basis. We are also extremely encouraged with opportunities around our last acquisition, EcoVerse, as the market for environmental processing equipment in the organic sector is poised for explosive growth, driven by both federal and state regulations and an increased understanding of potential environmental impacts with an impetus on increased recycling and reuse of materials throughout both the US and Canada. In looking at the current M&A landscape, we remain active and our pipeline remains robust as we expect it to be for the foreseeable future, given demographic and strategic reasons for dealer consolidation. We have the firepower and brand awareness to continue to partner with quality companies, and we're confident we will continue to hit our targets, as we've done since becoming public a little more than three years ago. Now for a quick update on the business segments. In the material handling segment, supply chain disruptions and labor shortages continue to buoy demand for more sophisticated, cost-saving, and energy-efficient material handling solutions, including warehouse and logistical automation. ALTA is well positioned for this growth opportunity, as we have a strong foundation in place with our Peak Logix brand, and we'll continue to look for attractive investment opportunities in this evolving and exciting sector. The construction equipment segment is starting to see the benefits from infrastructure and other governmental legislation. Our Florida operations are performing very well, helped in part by the significant growth in non-residential construction projects and significant state spending on highways and other infrastructure. We continue to build our high margin aftermarket support business, which generates predictable and reoccurring high margin parts and service revenues. Our e-mobility segment is poised to aid in the move away from combustion engines for transportation. While the transition will take time, it will also bring opportunity. We see parallels to our more mature segments where we offer value added engineering and integration services alongside the traditional dealership model. In 2022, we invested heavily in talent and we have a team of seasoned professionals to help our customers navigate the complex and dynamic environment of electrification. We are going to market with an energy agnostic strategy as we believe the modes of electrification will be application dependent as we have learned in our core business. All this momentum has given us the confidence to set an adjusted EBITDA guidance range of $177 million to 185 million, which would be a 14.5% increase at the midpoint year over year. Lastly, I'd like to touch on Alta's corporate culture. As a company, we strive every day to foster a culture of empowerment, accountability, and opportunity. In 2022, we unveiled a new corporate purpose, delivering trust that makes a difference. I want to again thank our employees for living out that purpose and delivering trust to our customers, our business partners, and our valued shareholders. We believe that a purpose-built organization will be the foundation of our commitment to these key areas, our commitment to environmental sustainability, including a focused strategy to drive customer adoption and commercial viability of various electromobility solutions, our thoughtful diversity and inclusion policies, the safety of our employees and technicians, and the overall dedicated and inclusive culture that we have created and continue to develop with each day. In closing, we had a great 2022 that sets us up well for 2023 as we look to scale our business, deliver strong financial results, and drive long-term shareholder value. Thank you to the Alta team once again for all your hard work in driving a momentous year for the company. I'll now turn it over to Tony.