Alta Equipment Group Inc.

Good afternoon, and thank you for attending the ALTA Equipment Group Third Quarter 2023 Earnings Conference Call. My name is Matt, and I'll be your moderator for today's call. I will now turn the call over to Jason Demere, Director of SEC Reporting and Technical Accounting with ALTA Equipment Group.

Thank you, Matt. Good afternoon, everyone, and thank you for joining us today. A press release detailing ALTA's Third 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 Greenewald, our Chairman and CEO, and Tony Colucci, our Chief Financial Officer. For today's call, management will first provide a review of our third quarter 2023 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.altequipment.com. I will now turn the call over to Ryan.

Thank you, Jason. Good afternoon, everyone, and thank you for joining us today. Before I begin, I want to recognize our employees because without their hard work and dedication, our continued record performance would not be possible. Also, in light of the recent tragedy that has struck Lewiston, Maine, where we have long operated, we want to extend our heartfelt condolences to all those affected by the senseless act of violence. Our thoughts and prayers are with the victims, their families, and all members of the community who are grappling with the profound pain and loss. I will now begin with a quick review of our third quarter financial highlights. These are found on slide five of the presentation made available on our website. Demand in our end user markets remain solid. Total revenue increased 15.1% year over year to $466.2 million. Construction and material handling revenues increased to $282 million and $168.6 million respectively. New and used equipment sales grew 20.7% to 253.6 million. Product support revenues increased 12.1% year over year with part sales increasing to 69.5 million and service revenues increasing to 60.6 million. We continued to increase our field population and at quarter end, we had more than 1300 factory trained technicians. As a result of our solid performance in our major business segments, which includes contributions from our acquisitions as well as organic growth, adjusted EBITDA grew 15.9% to $51 million. Despite the macroeconomic environment, we continue to see strong demand in the diversified markets we serve. I would like to highlight the resiliency of our construction segment, especially in Florida, which has experienced tremendous growth. Construction segment, despite its name, has a myriad of applications that extend far beyond road, commercial, or housing projects. The investments we've made have brought relationships and capabilities that extend into scrap and demolition markets, large-scale aggregate mining operations, power generation, turf and maintenance, and the list only goes on from there. We are focused on further expansion of this segment going forward. We are happy to see supply chains continue to improve Demand for our material handling equipment also remains strong. Our backlog remains at a record level and customer sentiment remains favorable. In terms of our growth strategy, it is evident we are executing upon our objectives. On October 13th, we closed our purchase of Burris Equipment Company, a premier supplier of compact construction and turf equipment with three locations in Illinois. Growth in the highly fragmented compact segment of the construction equipment market continues to outpace other segments. This acquisition gives us further coverage and market penetration in the Metro Chicago market and brings with it a talented group of experts in the region with longstanding customer relationships. In our second transaction of the quarter, on November 2nd, we acquired Alt Industries, a privately held Canadian equipment distributor with locations in Ontario and Quebec. This is Alt's first investment in Canada for our construction equipment segment. Alt has built a high-performing equipment dealership in the aggregate and mining space a growing end market in their region. This deal meets several of our strategic objectives for growth. First, we are gaining exclusivity with a portfolio of top performing OEMs with an existing installed base and the potential to grow in a market poised for growth and highly correlated to infrastructure investment. Second, equipment for this segment is highly engineered and specialized to unique end markets, allowing for greater margins on equipment sales. Lastly, the heavy duty nature of the crushing and screening process creates a steady stream of product support revenue through periodic maintenance and sales of replacement parts and repair services. This business is poised for further organic growth and will likely benefit from our M&A strategy going forward. These transactions are immediately accretive. Since our public offering in 2020, we have added $537 million in total revenue and $65 million in adjusted EBITDA. We have expanded our dealership network as well as entered new end user markets, and we'll continue to follow this strategic path as evidenced by these recent transactions. Our platform also gives us access to significant organic opportunities. As announced today, we are excited to now enter the Central and Western Pennsylvania market where we will operate as case power and equipment of Pennsylvania, initially serving Pittsburgh and surrounding areas through two strategically planned locations in Cranberry Township and Delmont, with plans to further expand into central Pennsylvania in 2024. Serving general construction, infrastructure, and residential and non-residential construction contractors, both locations will sell and service the full lineup of case-heavy, compact, and subcompact equipment and attachments, as well as provide for complementary services, including captive financing, planned maintenance solutions, telematics, and parts support. Alta's demonstrated success in supporting OEMs through dealer succession and consolidation issues made this dealer appointment possible and further demonstrates the power of our dealership platform and the value we bring to our OEM partners. Lastly, I'd like to again 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 the 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. Our shared purpose is 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 continue to develop each day. In closing, I'd like to thank the Alta team for all your hard work in delivering another solid quarter. And I'll now turn the call over to Tony Colucci, our CFO.