Alta Equipment Group Inc.

Good afternoon, and thank you for attending the Alta Equipment Group second quarter 2024 earnings conference call. My name is Joel, 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. Jason, you may proceed.

Thank you, Joel. Good afternoon, everyone, and thank you for joining us today. A press release detailing Alta's second quarter 2024 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 our second quarter 2024 financial results. We will begin with some prepared remarks before we open the call for your questions. Please proceed to slide two. 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.altayequipment.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 begin with a quick overview of our second quarter results, then provide a current assessment of the business conditions and our end-user markets. Tony Colucci will then present a more detailed analysis of our financial and operating performance for the quarter and our outlook for the balance of 2024. Overall, our business rebounded well this quarter from the seasonally challenged first quarter and in the face of moderating market environment for new equipment sales. For the quarter, total revenues increased 46.5 million sequentially to 488.1 million in Q2 from 441.6 million in Q1. For the second quarter, the business achieved adjusted EBITDA 50.3 million, which is up 16.2 million versus Q1. Notably, our product support business performed well in this moderating environment as we continue to achieve organic growth on increased field population with revenues increasing to a record of 144.2 million and increase of 13.2 million from a year ago. Additionally, our material handling segment also continued on its steady path of profitable growth as we progressively execute on a solid sales backlog and gain market share in strategic regions and product categories throughout our footprint. We also saw a rebound in our master distribution segment, as revenue in the quarter was $16.7 million versus $12.8 million in the first quarter. While we benefited from our return to normal seasonality in a strong quarter from our material handling segment and our product support business lines, market unit volumes in our construction equipment segment remained under pressure due to uncertainty regarding interest rates and the election outcome, especially affecting small to midsize contractors. Let me now discuss our business in greater detail by operating segment. Revenues for our construction equipment segments increased to $294.9 million from $281.5 million a year ago, but were offset by lower new equipment sales and compressed equipment gross margins. There is an oversupply of equipment in the market, both in dealer inventory across the entire channel and in excess supply from the OEMs, given the significant market volume declines relative to previous years. The increased supply of machinery is resulting in price degradation, especially with heavier earth moving machines in the most competitive markets like Florida. Across our geographic footprint, the market is down nearly 9% year over year on a unit volume basis, with the Great Lakes region experiencing even steeper declines. We are seeing some benefit of our geographic diversity as certain markets like New York State and Florida will benefit from their greater mix of large-scale projects that have allowed larger contractors to stay more insulated from economic volatility and keep those markets relatively buoyant, propping up steady demand for the higher end of ALSA's product offering. The higher capacity equipment categories are where we see the most acute pricing pressure and also the steepest volume declines. Despite the industry returning to a more normalized environment after years of significant growth, we continue to remain positive about our position in the marketplace. We are focused on optimizing our fleet and continuing to build the annuitized revenue streams coming through the repair of our continuously expanding field population. Revenue for our material handling segment increased to $175.6 million from $169.1 million a year ago and was primarily driven by an increase in service revenue. The North American lift truck market saw a significant decline in Q2 2024 with factory bookings down sharply from peak levels. What we are observing is the continued normalization of the North American forklift industry from the extreme market dislocation brought on by the pandemic. Despite the reduction in bookings, we continue to benefit from the market positioning of our product portfolio from a lead time and product differentiation perspective and have been capturing market share despite the declines in industry bookings. We expect shipments to remain strong through 2024, extending into 2025, and we continue to focus on making market share gains, especially in the electrified product classes where we maintain a lead time advantage relative to the competition. As part of our growth strategy, we are actively exploring new business segments in tangential or complementary equipment markets that align well with our expertise and resources embedded in the dealership model. While we have previously discussed this significant opportunity to provide and support an electrified medium duty over the road truck fleet, this initiative is gaining momentum as we enter the back half of this year. To that end, I'm pleased to report that Alta eMobility has entered into an agreement to represent Harbinger as an authorized dealer in support of the launch of their new electric medium duty truck lineup. The territory assignment includes dense urban markets, including Southern California, and overlap significantly with our existing footprint in the population-dense Great Lakes, Northeast, and Florida regions where we intend to leverage our existing branch infrastructure. Our initial focus will be on the medium-duty electrified Class IV through VI commercial vehicle segment. The market opportunity bears strong resemblance to the evolution of our electric forklift market over the last 50 years. Like lift trucks, medium-duty fleets are geographically contained, easing the rollout of charging infrastructure. As technology continues to advance and the necessary infrastructure develops, we anticipate widespread adoption and integration into the transportation ecosystem. In May, we signed an agreement with Mail Management Services, a top 15 carrier providing dedicated service transportation services for the United States Postal Service, to source 20 Harbinger Class 6 electric box trucks to update their fleet. Updating their fleet with the new electric powertrain technology will enable Mail Management Services to directly assist the U.S. Postal Service with achieving its carbon footprint goals. ALTA is handling all aspects of the vehicle transaction, specifying and installing the charging platform, as well as providing a web-based fleet management system. Mail Management Services partnered with ALTA because of our proven approach to assess, define, execute, and maintain electrified fleets. While the inclusion of Harbinger With the inclusion of Harbinger to the portfolio and the traction gained with new customers in the quarter, we now have approximately 25 million in sales backlog in the e-mobility business, and we expect the majority of that backlog to convert to revenue in the second half of 2024. In summary, despite what we believe to be temporary demand headwinds, our long-term outlook remains positive as we believe the next few years will represent an extended cycle for non-residential construction. Project pipelines are significant and federal infrastructure spending continues to accelerate. Further, many of these projects are multi-year endeavors and fall into our geographic footprint. State DOT spending also remains elevated. Overall, we believe growth opportunities will persist as our dealership model has distinct advantages through a variety of market conditions. To close, we remain focused on selling our industry-leading dealership capabilities to expand our market share and grow our product support business. Cost optimization is a high priority and includes assessing SG&A spending, rationalizing the size of our rental fleet, and other initiatives to streamline our business. I sincerely want to thank all our dedicated employees for their commitment to the success of our business. I also want to thank our customers, OEMs, and shareholders for your continued support and confidence in our company's strategy. Now I'll turn it over to Tony for a detailed analysis of our financial and operating performance.