20.05.2022

Strong start for Alta

Strong start for Alta

US based crane, aerial lift, construction and material handling distributor Alta Equipment has reported a strong first quarter in terms of revenues.

The company achieved total sales of $331.7 million in the three months to the end of March, up 23.4 percent on the same quarter last year. Part of the pick up is due the three acquisitions made towards the end of last year, Ambrose in New Hampshire, and Gibson Machinery an equipment distributor based in Oakwood Village, near Cleveland, Ohio, And Ginop in Michigan.

The revenue breakdown was a follows:

- New product sales of $151.6 million - up 22.5 percent
- Used equipment sales of $40.8 million - up 28.3 percent
- Replacement parts sales grew by 29 percent to $53.4 million
- Parts sales jumped 29 percent to $53.4 million
- Service revenues were $48.2 million - up 24.5 percent
- Rental revenues of $37.7 million represent an increase of 13.9 percent

In spite of the strong pick up, the company still posted a pre-tax loss, of $1.2 million, but that compares with a pre-tax loss of $5.2 million this year. Net debt as of the end of May was $481.4 million.

Chief executive Ryan Greenawalt said: “We are very pleased with our solid start to 2022 and the current momentum in our business. Total revenues increased $62.9 million, to$331.7 million in the first quarter from a year ago. We remain extremely focused on operational excellence and as a result, delivered both solid organic and acquisition related revenue growth. Consistent with our fourth quarter results, our Construction and Material Handling segments continued to benefit from the strong tailwinds in our end-user markets, producing significant year over year revenue growth on a combined basis, despite ongoing supply chain issues. Our flexible business model, increased product support revenues driven by higher new and used equipment sales, and expansion into higher margin specialty segments will continue to have a positive impact on future profitability.”

“Customer sentiment, project activity and visibility, remains extremely positive across all our operating markets. Demand for new and used equipment and rental equipment has eclipsed pre-pandemic peak levels. As an example, our organic physical rental fleet utilisation was up more than five percentage points from a year ago and rates on rental equipment continued to strengthen in the first quarter. We are operating in a fundamentally robust expansion cycle and all the industry indicators are extremely encouraging for the balance of the year. While the timing is uncertain, the recently passed Bipartisan Infrastructure bill should also be an incremental benefit to our business.”

“Our 2022 growth strategy remains very much intact, and we have a solid pipeline of M&A opportunities we are evaluating that are consistent with our previous deals. Our ongoing goal is to expand our presence in existing key markets, add broader high-margin capabilities to new regions and expand into new markets which offer substantial growth opportunities. We have a strong balance sheet to support our expansion initiatives. Lastly, our entrance into the commercial electric vehicle industry and partnership with Nikola is progressing very well. While this initiative won’t be a material contributor to our results in 2022, it puts us in an excellent position to be an EV truck market leader in the densest truck markets in the country.”

Alta Equipment was founded in 1984 and now sells, rents, and provides parts and service support for lift trucks and aerial work platforms, cranes, earthmoving and paving equipment and other material handling and construction equipment. The branch network now runs to 60 locations across Michigan, Illinois, Indiana, Ohio, New England, New York, Virginia, and Florida.

Vertikal Comment

In terms of sales revenues this is a good result, and one that the company is likely to really build on in 2022. We would expect full year sales to set a new record and be in the region of $1.5 billion. The pre-tax profit, or lack of it, is still an issue but looking at the numbers it is largely related to the acquisition integration costs and issues, compounded by supply chain problems. However, we would expect the company to post a profit for the full year and be in a strong position for a major transformation over the next 12 months.

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