First Quarter Financial Highlights:
- Total revenues decreased $18.6 million year over year to $423.0 million
- Construction Equipment and Material Handling revenues of $245.8 million and $157.9 million, respectively
- Product support revenues increased modestly year over year to $138.1 million for the quarter
- Service gross profit percentage increased 230 basis points year over year to 60.1%
- Selling, general, and administrative expenses reduced by $7.9 million year over year
- Net loss available to common stockholders of $(21.7) million
- Basic and diluted net loss per share of $(0.65)
- Adjusted basic and diluted pre-tax net loss per share* of $(0.48)
- Adjusted EBITDA* of $33.6 million
Alta Equipment Group Inc., a provider of premium material handling, construction, and environmental processing equipment and related services, announced financial results for the first quarter, which ended March 31, 2025.
CEO Comment:
Ryan Greenawalt, Chief Executive Officer of Alta, said, “Our first quarter performance continues to underscore the resiliency of our business model. Despite the ongoing uncertainty regarding the macro economy, operating trends in our Construction Equipment business were stable as we realized the typical seasonal impacts in our Northeast and Midwest markets. Similar to years past, as the weather improved in late March, the rental fleet naturally deployed to customers as they embark on peak construction season. Additionally, the Florida construction market remains healthy as both the Florida DOT and the federal government continue to fund large projects statewide. The stability in our Construction Equipment segment can be attributed to our customers’ focus on infrastructure-related projects rather than on the general non-residential markets, which we expect will drive consistent demand for heavy equipment for the remainder of the year. While our Material Handling new equipment sales were down when compared to the peak delivery levels realized in the first quarter of last year, stronger margins on new and used equipment sales helped offset the impact of reduced volumes. Additionally, we were encouraged by solid bookings in our Material Handling segment during the quarter, which fills our sales pipeline in the second half of 2025. Importantly, our product support business remained solid in the quarter and continued to be a pillar of strength in the face of volatile general economic sentiment. Lastly, while the situation with tariffs remains fluid, based on current information, we believe the current cost increases and surcharges from our major OEMs are manageable and will allow us to remain competitive in the equipment marketplace. This view, along with the resilience of our end markets and our product support business, underpins our reiteration of our guidance on an organic basis.”
Mr. Greenawalt continued, “In terms of our financial performance, total revenues for the quarter were $423.0 million, a decrease of 4.2% versus the first quarter of last year. Construction Equipment revenue was $245.8 million, a decrease of 3.8%, primarily a result of our 2024 strategic initiative to reduce our rent-to-sell fleet size, drive fleet utilization, and ultimately increase our return on fleet investment. Material Handling revenues decreased 9.4% to $157.9 million. Our Master Distribution business rebounded from oversupply issues last year, with revenues increasing 35.9% to $17.4 million in the quarter. Notably, the cost and inventory optimization initiatives implemented last year continue to prove beneficial as SG&A was down $7.9 million year over year. As a result, Adjusted EBITDA was $33.6 million compared to $34.1 million a year ago.”
Mr. Greenawalt added, “During 2025, we are committed to refining Alta’s focus, which includes the rationalization of non-core assets. To that end, on May 1st, we entered into a definitive agreement and closed on the sale of substantially all of our aerial fleet rental equipment business in the Chicagoland market, a business that was born and grown organically over the past seven years. While we wish the new owners of the business well, ultimately, the competitive environment, lack of product support yields, and commoditized product relative to the rest of our portfolio does not align with our strategic priorities in the Illinois market. The proceeds from the divesture will be allocated towards reducing our outstanding debt.”
In conclusion, Mr. Greenawalt said, “In a rebalancing of our capital allocation strategy, our Board of Directors has authorized the indefinite suspension of our quarterly common stock dividend, primarily due to the return opportunity for shareholders given the disparity between the Company’s stock price and our view on the intrinsic value of Alta’s operations. The approximately $8 million in annual dividend payments will be reallocated to an expanded share repurchase program, which the Board authorized to increase by $10 million to $30 million overall, concurrently with the suspension of the dividend. As a key component of this initiative, the Board also approved the immediate allocation of $10 million to a Rule 10b5-1 Plan, where a third-party fiduciary is directed to purchase the Company’s common stock at pre-determined price intervals regardless of reporting blackout periods or privileged information restrictions, thereby enhancing the Company’s opportunity to execute on the repurchase program. In summary, we believe that our shares effectively represent a compelling acquisition target and we look forward to executing on the buyback.”
Business Divestiture, Full Year 2025 Financial Guidance and Other Financial Notes:
- On May 1, 2025, the Company’s Construction Equipment segment entered into a definitive agreement and closed on the divestiture of substantially all of its aerial fleet rental business in the Chicago, Illinois marketplace for $18.0 million in cash at closing, subject to fees and closing costs. The implied enterprise value of the divesture was approximately $20 million and the proforma Adjusted EBITDA associated with the divested business was estimated to be approximately $4 million annually. The Company plans to allocate the proceeds from the divesture to reducing its outstanding senior indebtedness.
- The Company reaffirms its organic guidance range and now expects to report Adjusted EBITDA between $171.5 million and $186.5 million for the 2025 fiscal year as a result of the aforementioned divestiture.
- On May 1, 2025, the Company’s Board of Directors (the “Board”) approved an increase to the Company’s common stock repurchase program authorization from $20.0 million to $30.0 million. As it relates to the deployment of the increased repurchase program, the Board also approved the immediate allocation of $10.0 million to a Rule 10b5-1 Plan (the “Rule 10b5-1 Plan”), whereby the Company directs a fiduciary to purchase the Company’s common stock at pre-determined price intervals. During the term of the Rule 10b5-1 Plan the fiduciary is permitted to purchase the Company’s common stock irrespective of reporting blackout periods or privileged information restrictions, thereby enhancing the Company’s opportunity to execute on the repurchase program. In addition to the Rule 10b5-1Plan, the Company also has $14.2 million remaining on the original $20.0 million common stock repurchase program authorization to be deployed at the discretion of the Company’s officers, including when the Rule 10b5-1 Plan has been exhausted or is inactive. Such discretion may include repurchasing shares of our common stock utilizing any methods permitted under the Exchange Act. This increase in the stock repurchase program and the Rule 10b5-1 Plan associated thereto, is to effectively repurpose the capital that was historically being paid out to shareholders as a regular quarterly common stock dividend.
- Correspondingly, on May 7, 2025, the Company announced the Board is suspending the Company’s quarterly cash dividend on its common stock indefinitely after the payment of the dividend on May 30, 2025, to shareholders of record at the close of business on May 15, 2025 as the Company rebalances its flexible capital allocation strategy to allow for a more opportunistic use of capital and maximization of shareholder returns. The Company expects to continue to pay dividends on its Series A preferred stock.
