LIVONIA—Alta Equipment Group Inc. (NYSE: ALTG), a provider of industrial and construction equipment and related services, posted a loss of $17 million or 91 cents a share in the first quarter, vs. a loss of $2.6 million or 36 cents a share a year earlier. Revenue grew to $180.5 million from $102.3 million a year earlier.
The reason for the larger loss—a sharp increase in general and administrative expenses, to $52.1 million from $25.9 million a year earlier, a $7.6 million loss on debt extinguishment, and a $6.6 million charge for non-cash stock compensation.
The company also posted a figure for “adjusted earnings before interest, taxes, depreciation and amortization” that excluded some of those charges, of $18.8 million in the first quarter, up from $15.1 million a year earlier.
Alta became a publicly traded company on Feb. 14 in a transaction arranged by the Los Angeles private equity firm B. Riley Financial Inc. On that date, Alta also acquired Tampa, Fla.-based Flagler CE Holdings LLC and Liftech Equipment Companies Inc. of East Syracuse, N.Y. The transaction provided net proceeds to Alta of $538 million in equity and debt financing.
Said Alta CEO Ryan Greenawalt: “I’m extremely proud of the incredible response to the COVID-19 pandemic from Alta’s one team culture. Our first quarter financial results demonstrate the strength of our business model in terms of organic growth driven by our parts sales and service and the contributions of acquisitions. Our strategy to expand into new geographic markets and diversify our customer base has served us well during the current economic slowdown. Our experienced leaders took swift action to service customers, reduce costs and efficiently manage operations in response to shelter-in-place mandates that went into effect across many of our markets. Looking ahead, we believe we have ample liquidity and a strong capital structure to effectively navigate these current business conditions. We are confident in the resilience of our business model and believe the immediate actions we’ve implemented will allow us to emerge stronger as the economy begins to open and recover.”
In mid-March 2020, as the result of directives issued by state and local authorities within Alta’s geographic footprint, the company began adjusting its business and operations in response to the COVID-19 pandemic. The response has focused on these key areas:
- Employee Protocols: The safety and health of Alta’s employees is the company’s top priority. Alta adjusted its operations to permit virtually all of the company’s sales and back office employees to work remotely. The company established new protocols that included health related screening upon entering a facility, the use of face masks, additional personal protective equipment when job requirements do not permit following social distancing guidelines and rigorous facility cleaning protocols.
- Customer Support: Alta has been deemed an “essential” business in all of the company’s geographies and all 43 of our branches are currently open and operating. Over the course of the past six weeks, our dedicated team of operators and skilled technicians have worked with the company’s original equipment manufacturer partners to support Alta’s diverse customer base.
- Operating Expenses Reductions: In April, the company took immediate action to reduce costs across the organization. These initiatives included the temporary elimination of certain non-essential spending, temporarily reduced executive and senior level compensation and a combination of workforce reductions and furloughs.
- Liquidity Preservation: The company believes it maintains ample liquidity and financial flexibility to continue to navigate effectively in this current economic environment. Alta entered the second quarter of 2020 with $150 million of cash and available liquidity to fund operations.
To listen to the replay of the conference call discussing these results, visit https://Investors.altaequipment.com, where presentation slides are also available, or call (800) 585-8367, or (416) 621-4642, with conference ID 4928529.