Alta Equipment Group Inc.

Good afternoon and thank you for attending today's ALTA Entertainment, I'm sorry, ALTA Equipment Group first quarter 2023 earnings conference call. My name is Jason and I'll be your moderator for today's call. I'll now turn the call over to Jason Dammeier, 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 first quarter 2023 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 Greenewalt, 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 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. For those following along with the slide presentation, I will begin on slide three. First, I will discuss our first quarter business highlights, our unique operating model, and the demand in our end user markets. Lastly, I will provide an update regarding the solid execution upon our growth strategy. Tony will detail our first quarter financial results, so I just want to highlight our first quarter accomplishments so we can get into the Q&A session as quickly as possible, after which I have a few parting comments. Our business is off to a solid start this year, with revenues increasing $89 million to $420.7 million, which included strong organic growth as well as contributions from our acquisitions. Construction and material handling revenue increased $233.1 million and $164.8 million, respectively, and our newest segment, master distribution, contributed the other $26.7 million in the quarter. As a result, adjusted EBITDA grew 36% to $40.8 million versus a year ago. Our business model is versatile and resilient, and we are unique in the breadth of our product offerings, the scale of our addressable market, and the defensiveness of our market position. Our focus is on driving and sustaining long-term equipment field population and aftermarket support penetration to an increasingly diversified customer base. At the end of the first quarter, we had nearly 1,200 skilled revenue producing technicians, which is substantially greater than even the largest pure play equipment rental businesses. Even during periods of challenging economic conditions and downturns in construction cycles, our business remains resilient due to the scarcity of product support personnel and resources in the major markets where we compete. In short, customers buy and rent from the businesses most equipped to handle their most immediate service challenges. This is where Alta thrives and is the spirit of our service mantra. uptime matters. Now for a quick update on the business segments. In the material handling segment, long-term trends towards warehouse and logistical automation persist, and Alta is well positioned for this growth opportunity. We continue to see the benefits of our newly increased market footprint, which now includes Eastern Canada, and the sales synergies evident between the traditional forklift dealership model, anchored by exclusive distribution rights, and the engineered products business where we are unrestricted geographically but benefit from the significant infrastructure and sales coverage that comes with the integrated model. We estimate that we cover over 20% of the North American lift truck market with our exclusive rights dealership business and can cover North America and beyond through peak logics and the affiliated material handling products. The construction equipment segment is benefiting from infrastructure and other governmental legislation. Our Florida operations are performing well, helped in part by significant growth in non-residential construction projects and significant state spending on infrastructure. Furthermore, the state has announced a multi-billion dollar Everglades restoration project, which aligns well with our equipment product portfolio of large articulated dump trucks, excavators, and other earth moving equipment. We are continuing to benefit from pent-up demand for services in the Florida market and our appetite to grow the technician headcount and parts and service sales in the region have been met with enthusiasm by our customers. Along with growth in our core Volvo construction equipment business, we are benefiting from the expanded product portfolio and investment in branch infrastructure. Our e-mobility business is well positioned to seize on opportunities across a broad range of products and services, and similar to our core business, we have anchored the segment on exclusive distribution rights in key markets. Here we are utilizing our existing branch infrastructure to support the product launch while limiting fixed cost exposure, improving market acceptance and viability. In parallel, we're building an in-house team of integrators and a portfolio of ancillary products to assist our customers in navigating and executing on the transition away from fossil fuels for transportation. This quarter we are reporting on our newly created master distribution segment, which Tony will describe in greater detail during his commentary. The segment is currently comprised of the Ecoverse business, which we acquired in November of 2022. Ecoverse has exclusive rights to distribute in the US and Canada for DOPSTAT, a premier line of recycling solutions, along with several other manufacturers of specialty recycling equipment. The recycling equipment market in the United States has been experiencing growth driven by various factors, including increased environmental awareness, governmental regulations, and the need for more efficient waste management practices. Recycling equipment used in solid waste management can include shredders, balers, compactors, sorting systems, conveyors, and other machinery designed to process and recycle different types of waste materials. These equipment types are used in recycling facilities, waste management companies, municipalities, and other organizations involved in the recycling and waste management industry. The recycling industry is still in its infancy and is expected to grow to a multi-billion dollar per year industry by the end of the decade. We're excited about the organic growth opportunity in this segment and the potential to apply the master distribution business model to future opportunities and other specialty end markets. From a strategic perspective, all of the major tenants hold true from our debut as a public company three years ago. We have a unique platform to grow and consolidate in adjacent markets with significant barriers to entry and long-term growth prospects. We have a disciplined approach to M&A and fertile prospecting conditions. and we have a proven and repeatable execution and integration process led by a seasoned team of industry veterans. All this momentum has given us the confidence to increase adjusted EBITDA guidance. Lastly, I'd like to quickly touch on Alta's corporate culture. As a company, we strive every day to foster a culture of empowerment, accountability, and opportunity, and we rally around a shared purpose, delivering trust that makes a difference. I want to again thank our employees for delivering trust to our customers, our business partners, and to 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, the safety of our employees and technicians, and the dedicated and inclusive culture that we have created and continue to develop with each day. In closing, I'd like to thank the ALTA team for all your hard work in delivering a solid start to 2023. I'll now turn the call over to Tony, our CFO.