UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

ALTA EQUIPMENT GROUP INC.

(Exact name of registrant as specified in its charter)

Delaware	001-38864	83-2583782
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

13211 Merriman Road, Livonia, Michigan 48150

(Address of principal executive offices)

(248) 449-6700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.0001 par value per share	ALTG	The New York Stock Exchange
Depositary Shares representing a 1/1000th fractional interest in a share of 10% Series A Cumulative Perpetual Preferred Stock, $0.0001 par value per share	ALTG PRA	The New York Stock Exchange

As of November 4, 2022, there were 32,194,243 shares of Common Stock, $0.0001 par value, and 1,200 shares of Preferred Stock, $0.0001 par value, which Preferred Stock is evidenced by 1,200,000 depositary shares, outstanding.

INDEX

			Page
PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Interim Financial Statements (Unaudited)		3
	Condensed Consolidated Balance Sheets (Unaudited)		3
	Condensed Consolidated Statements of Income (Loss) (Unaudited)		4
	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)		5
	Condensed Consolidated Statements of Stockholders' Equity (Unaudited)		6
	Condensed Consolidated Statements of Cash Flows (Unaudited)		7
	Notes to Unaudited Condensed Consolidated Financial Statements		8
	Note 1.	Organization and Nature of Operations	8
	Note 2.	Summary of Significant Accounting Policies	8
	Note 3.	Revenue Recognition	9
	Note 4.	Related Party Transactions	11
	Note 5.	Inventories	12
	Note 6.	Property and Equipment	12
	Note 7.	Goodwill	13
	Note 8.	Other Intangible Assets	13
	Note 9.	Floor Plans	14
	Note 10.	Long-Term Debt	14
	Note 11.	Leases	16
	Note 12.	Contingencies	17
	Note 13.	Income Taxes	17
	Note 14.	Equity	18
	Note 15.	Share-Based Compensation	19
	Note 16.	Fair Value Instruments	19
	Note 17.	Business Combinations	20
	Note 18.	Segments	21
	Note 19.	Earnings Per Share	23
	Note 20.	Subsequent Events	23
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		40
Item 4.	Controls and Procedures		40
PART II
Item 1.	Legal Proceedings		42
Item 1A.	Risk Factors		42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		42
Item 3.	Defaults Upon Senior Securities		42
Item 4.	Mine Safety Disclosures		42
Item 5.	Other Information		42
Item 6.	Exhibits		42
Signature			45

1

Forward-Looking Statements

This Form 10-Q contains statements that, to the extent they are not recitations of historical fact, constitute forward-looking statements within the meaning of federal securities laws, and are based on our current expectations and assumptions. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. The words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predicts,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These statements are not intended to guarantee future performance and are subject to risks and uncertainties. Actual results may differ materially due to factors such as:

•the impact of the COVID-19 outbreak or future epidemics on our business, including the potential for facility closures or work stoppages, supply chain disruptions, inflationary pressures resulting from supply chain disruptions or a tightening labor market, negative impacts on customer payment policies and adverse banking and governmental regulations, resulting in a potential reduction to the fair value of our assets;

•federal, state, and local budget uncertainty, especially as it relates to infrastructure projects;

•the performance and financial viability of key suppliers, contractors, customers, and financing sources;

•economic, industry, business and political conditions including their effects on governmental policy and government actions that disrupt our supply chain or sales channels;

•our success in identifying acquisition targets and integrating acquisitions;

•our ability to successfully, or profitably, launch the commercial electric vehicle business;

•our success in expanding into and doing business in additional markets;

•our ability to raise capital at favorable terms;

•the competitive environment for our products and services;

•our ability to continue to innovate and develop new business lines;

•our ability to attract and retain key personnel, including, but not limited to, skilled technicians;

•our ability to maintain our listing on the New York Stock Exchange;

•the impact of cyber or other security threats or other disruptions to our businesses;

•our ability to realize the anticipated benefits of acquisitions or divestitures, rental fleet investments or internal reorganizations;

•federal, state, and local budget uncertainty, especially as it relates to infrastructure projects; and

•other risks and uncertainties identified in the section entitled “Risk Factors” in our annual report on Form 10-K and other filings with the U.S. Securities and Exchange Commission (the “SEC”).

These are only some of the factors that may affect the forward-looking statements contained in this Form 10-Q. For a discussion identifying additional important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, see our filings with the SEC including, but not limited to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, and in this Quarterly Report on Form 10-Q. Our forward-looking statements speak only as of the date of their initial issuance, and we do not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events, or otherwise.

2

PART I

Item 1. Financial Statements

ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in millions, except share and per share amounts)	September 30, 2022			December 31, 2021
ASSETS
CURRENT ASSETS
Cash	$	2.1		$	2.3
Accounts receivable, net of allowances of $13.0 and $10.7 as of September 30, 2022 and December 31, 2021, respectively		213.4			182.7
Inventories, net		338.5			239.2
Prepaid expenses and other current assets		27.9			24.4
Total current assets	$	581.9		$	448.6
Property and equipment, net		367.3			344.5
Operating lease right-of-use assets, net		104.0			102.6
OTHER ASSETS
Goodwill	$	53.8		$	41.9
Other intangible assets, net		33.0			43.4
Other assets		2.6			1.6
Total other assets	$	89.4		$	86.9
TOTAL ASSETS	$	1,142.6		$	982.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Floor plan payable – new equipment	$	160.1		$	114.2
Floor plan payable – used and rental equipment		50.1			40.6
Current portion of long-term debt		3.6			2.6
Accounts payable		86.1			73.5
Customer deposits		17.9			16.7
Accrued expenses		53.1			39.3
Current operating lease liabilities		17.8			16.2
Current portion of deferred revenue		19.5			15.2
Other current liabilities		7.0			3.9
Total current liabilities	$	415.2		$	322.2
LONG-TERM LIABILITIES
Line of credit, net		156.3			98.4
Long-term debt, net of current portion		310.8			310.0
Finance lease obligations, net of current portion		13.4			9.0
Deferred revenue, net of current portion		3.9			4.2
Guaranteed purchase obligations, net of current portion		4.1			5.2
Long-term operating lease liabilities, net of current portion		89.4			88.4
Deferred tax liability		6.9			6.9
Other liabilities		1.9			3.6
TOTAL LIABILITIES	$	1,001.9		$	847.9
CONTINGENCIES - NOTE 12
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value, 1,000,000 shares authorized, 1,200,000 Depositary Shares representing a 1/1000th fractional interest in a share of 10% Series A Cumulative Perpetual Preferred Stock, $0.0001 par value per share, issued and outstanding at September 30, 2022 and December 31, 2021, respectively	$	—		$	—
Common stock, $0.0001 par value, 200,000,000 shares authorized; 31,981,843 and 32,363,376 issued and outstanding at September 30, 2022 and December 31, 2021, respectively		—			—
Additional paid-in capital		219.3			217.4
Treasury stock at cost, 862,182 and 390,000 shares of common stock held at September 30, 2022 and December 31, 2021, respectively		(5.9	)		(5.9	)
Accumulated deficit		(70.8	)		(76.8	)
Accumulated other comprehensive income (loss)		(1.9	)		—
TOTAL STOCKHOLDERS’ EQUITY	$	140.7		$	134.7
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,142.6		$	982.6

3

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions, except share and per share amounts)	2022			2021			2022			2021
Revenues:
New and used equipment sales	$	210.1		$	136.8		$	579.0		$	392.6
Parts sales		61.8			44.8			173.5			130.3
Service revenue		54.3			41.9			154.2			123.0
Rental revenue		50.2			41.7			131.5			113.0
Rental equipment sales		28.6			29.8			105.0			97.6
Total revenues	$	405.0		$	295.0		$	1,143.2		$	856.5
Cost of revenues:
New and used equipment sales	$	176.5		$	114.3		$	482.6		$	333.3
Parts sales		40.0			30.5			116.7			89.8
Service revenue		24.3			17.3			66.3			48.2
Rental revenue		5.9			4.6			16.7			15.3
Rental depreciation		25.9			22.2			69.5			62.9
Rental equipment sales		20.8			25.0			82.6			81.7
Cost of revenues	$	293.4		$	213.9		$	834.4		$	631.2
Gross profit	$	111.6		$	81.1		$	308.8		$	225.3
General and administrative expenses	$	94.2		$	72.4		$	265.9		$	208.3
Depreciation and amortization expense		3.7			2.7			11.6			7.3
Total general and administrative expenses	$	97.9		$	75.1		$	277.5		$	215.6
Income from operations	$	13.7		$	6.0		$	31.3		$	9.7
Other (expense) income:
Interest expense, floor plan payable – new equipment	$	(0.8	)	$	(0.4	)	$	(1.6	)	$	(1.4	)
Interest expense – other		(7.7	)		(5.7	)		(19.8	)		(16.5	)
Other income		0.2			0.2			0.9			0.3
Loss on extinguishment of debt		—			—			—			(11.9	)
Total other expense	$	(8.3	)	$	(5.9	)	$	(20.5	)	$	(29.5	)
Income (loss) before taxes	$	5.4		$	0.1		$	10.8		$	(19.8	)
Income tax provision		0.3			—			0.8			0.5
Net income (loss)	$	5.1		$	0.1		$	10.0		$	(20.3	)
Preferred stock dividends		(0.7	)		(0.7	)		(2.2	)		(1.8	)
Net income (loss) available to common shareholders	$	4.4		$	(0.6	)	$	7.8		$	(22.1	)
Basic income (loss) per share	$	0.14		$	(0.02	)	$	0.24		$	(0.70	)
Diluted income (loss) per share	$	0.14		$	(0.02	)	$	0.24		$	(0.70	)
Basic weighted average common shares outstanding		31,981,843			32,363,376			32,091,353			31,484,906
Diluted weighted average common shares outstanding		32,138,952			32,363,376			32,290,127			31,484,906

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
(amounts in millions)	2022			2021		2022			2021
Net income (loss)	$	5.1		$	0.1	$	10.0		$	(20.3	)
Other comprehensive loss
Foreign currency translation adjustments		(1.9	)		—		(1.9	)		—
Comprehensive income (loss)	$	3.2		$	0.1	$	8.1		$	(20.3	)

5

ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

	Three and Nine Months Ended September 30, 2022
	Preferred Stock				Common Stock
(amounts in millions, except share amounts)	Number of Shares		Amount		Number of Shares			Amount		Additional Paid-in Capital		Accumulated Deficit			Treasury Stock			Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
Balance at December 31, 2021		1,200,000	$	—		32,363,376		$	—	$	217.4	$	(76.8	)	$	(5.9	)	$	—	$	134.7
Net income		—		—		—			—		—		4.9			—			—		4.9
Dividends on preferred stock, $0.625 per share		—		—					—		—		(1.5	)		—			—		(1.5	)
Share-based compensation		—		—		90,649			—		1.1		—			—			—		1.1
Repurchase of common stock (1)		—		—		(472,182	)		—		—		—			—			—		—
Balance at June 30, 2022		1,200,000	$	—		31,981,843		$	—	$	218.5	$	(73.4	)	$	(5.9	)	$	—	$	139.2
Net income		—		—		—