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, 2023

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 6, 2023, there were 32,368,112 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 Operations (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)		8
	Notes to Unaudited Condensed Consolidated Financial Statements		9
	Note 1.	Organization and Nature of Operations	9
	Note 2.	Summary of Significant Accounting Policies	9
	Note 3.	Revenue Recognition	9
	Note 4.	Related Party Transactions	12
	Note 5.	Inventories	12
	Note 6.	Property and Equipment	13
	Note 7.	Goodwill	13
	Note 8.	Other Intangible Assets	14
	Note 9.	Floor Plans	14
	Note 10.	Long-Term Debt	15
	Note 11.	Equity	16
	Note 12.	Leases	16
	Note 13.	Contingencies	17
	Note 14.	Income Taxes	18
	Note 15.	Stock-Based Compensation	18
	Note 16.	Fair Value of Financial Instruments	19
	Note 17.	Business Combinations	21
	Note 18.	Segments	22
	Note 19.	Earnings Per Share	24
	Note 20.	Subsequent Events	24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		39
Item 4.	Controls and Procedures		39
PART II
Item 1.	Legal Proceedings		41
Item 1A.	Risk Factors		41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		41
Item 3.	Defaults Upon Senior Securities		41
Item 4.	Mine Safety Disclosures		41
Item 5.	Other Information		41
Item 6.	Exhibits		41
Signature			44

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:

•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;

•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 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 and other organic investments or internal reorganizations;

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

•currency risks and other risks associated with international operations; 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, 2022, 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, 2023			December 31, 2022
ASSETS
Cash	$	1.4		$	2.7
Accounts receivable, net of allowances of $14.3 and $13.0 as of September 30, 2023 and December 31, 2022, respectively		259.1			232.8
Inventories, net		492.8			399.7
Prepaid expenses and other current assets		31.0			28.1
Total current assets		784.3			663.3
NON-CURRENT ASSETS
Property and equipment, net		447.6			377.8
Operating lease right-of-use assets, net		106.1			113.6
Goodwill		71.1			69.2
Other intangible assets, net		54.3			60.7
Other assets		17.0			6.0
TOTAL ASSETS	$	1,480.4		$	1,290.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Floor plan payable – new equipment	$	280.6		$	211.5
Floor plan payable – used and rental equipment		83.9			45.3
Current portion of long-term debt		6.6			4.2
Accounts payable		89.6			90.8
Customer deposits		14.9			27.9
Accrued expenses		53.4			55.1
Current operating lease liabilities		15.4			14.8
Current deferred revenue		14.5			14.1
Other current liabilities		10.9			7.5
Total current liabilities		569.8			471.2
NON-CURRENT LIABILITIES
Line of credit, net		303.5			217.5
Long-term debt, net of current portion		312.0			311.2
Finance lease obligations, net of current portion		26.2			15.4
Deferred revenue, net of current portion		4.4			4.9
Guaranteed purchase obligations, net of current portion		2.9			4.7
Long-term operating lease liabilities, net of current portion		95.0			101.9
Deferred tax liability		7.7			6.4
Other liabilities		11.4			17.6
TOTAL LIABILITIES		1,332.9			1,150.8
CONTINGENCIES - NOTE 13
STOCKHOLDERS’ EQUITY
Preferred stock, $0.0001 par value per share, 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 both September 30, 2023 and December 31, 2022		—			—
Common stock, $0.0001 par value per share, 200,000,000 shares authorized; 32,368,112 and 32,194,243 issued and outstanding at September 30, 2023 and December 31, 2022, respectively		—			—
Additional paid-in capital		226.5			222.8
Treasury stock at cost, 862,182 shares of common stock held at both September 30, 2023 and December 31, 2022		(5.9	)		(5.9	)
Accumulated deficit		(71.8	)		(74.2	)
Accumulated other comprehensive loss		(1.3	)		(2.9	)
TOTAL STOCKHOLDERS’ EQUITY		147.5			139.8
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,480.4		$	1,290.6

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

3

ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in millions, except share and per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenues:
New and used equipment sales	$	253.6		$	210.1		$	727.8		$	579.0
Parts sales		69.5			61.8			209.2			173.5
Service revenues		60.6			54.3			180.5			154.2
Rental revenues		54.0			50.2			147.1			131.5
Rental equipment sales		28.5			28.6			90.7			105.0
Total revenues		466.2			405.0			1,355.3			1,143.2
Cost of revenues:
New and used equipment sales		212.0			176.5			601.3			482.6
Parts sales		45.3			40.0			138.2			116.7
Service revenues		26.5			24.3			77.0			66.3
Rental revenues		5.7			5.9			18.0			16.7
Rental depreciation		29.6			25.9			80.1			69.5
Rental equipment sales		21.0			20.8			66.5			82.6
Total cost of revenues		340.1			293.4			981.1			834.4
Gross profit		126.1			111.6			374.2			308.8
General and administrative expenses		106.8			94.2			316.0			265.9
Non-rental depreciation and amortization		5.4			3.7			16.0			11.6
Total operating expenses		112.2			97.9			332.0			277.5
Income from operations		13.9			13.7			42.2			31.3
Other (expense) income:
Interest expense, floor plan payable – new equipment		(2.4	)		(0.8	)		(5.8	)		(1.6	)
Interest expense – other		(12.8	)		(7.7	)		(35.1	)		(19.8	)
Other income		1.4			0.2			2.6			0.9
Total other expense, net		(13.8	)		(8.3	)		(38.3	)		(20.5	)
Income before taxes		0.1			5.4			3.9			10.8
Income tax (benefit) provision		(7.3	)		0.3			(6.9	)		0.8
Net income		7.4			5.1			10.8			10.0
Preferred stock dividends		(0.7	)		(0.7	)		(2.2	)		(2.2	)
Net income available to common stockholders	$	6.7		$	4.4		$	8.6		$	7.8
Basic income per share	$	0.21		$	0.14		$	0.27		$	0.24
Diluted income per share	$	0.20		$	0.14		$	0.26		$	0.24
Basic weighted average common shares outstanding		32,368,112			31,981,843			32,320,346			32,091,353
Diluted weighted average common shares outstanding		32,729,517			32,138,952			32,631,082			32,290,127

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 (Unaudited)

(in millions)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023		2022
Net income	$	7.4		$	5.1		$	10.8	$	10.0
Other comprehensive (loss) income
Foreign currency translation adjustments		(0.7	)		(1.9	)		0.1		(1.9	)
Change in fair value of derivative, net of tax		0.3			—			1.5		—
Total other comprehensive (loss) income		(0.4	)		(1.9	)		1.6		(1.9	)
Comprehensive income	$	7.0		$	3.2		$	12.4	$	8.1

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

5

ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

(in millions, except share and per share amounts)

	Three and Nine Months Ended September 30, 2023
	Preferred Stock				Common Stock
	Number of Shares		Amount		Number of Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Stockholders' Equity (Deficit)
Balance at December 31, 2022		1,200,000	$	—		32,194,243	$	—	$	222.8	$	(74.2	)	$	(5.9	)	$	(2.9	)	$	139.8
Net income		—		—		—		—		—		1.0			—			—			1.0
Dividends on preferred stock, $0.625 per share		—		—		—		—		—		(0.8	)		—			—			(0.8	)
Dividends on common stock and dividend equivalent on stock-based compensation, $0.057 per share		—		—		—		—		—		(1.9	)		—			—			(1.9	)
Impact of adoption of new accounting standard (Note 2)		—		—		—		—		—		(0.5	)		—			—			(0.5	)
Stock-based compensation		—		—		173,869		—		0.8		—			—			—			0.8
Foreign currency translation adjustments		—		—		—		—		—		—			—			0.1			0.1
Change in fair value of derivative, net of tax		—		—		—		—		—		—			—			(0.4	)		(0.4	)
Balance at March 31, 2023		1,200,000	$	—		32,368,112	$	—	$	223.6	$	(76.4	)	$	(5.9	)	$	(3.2	)	$	138.1
Net income		—		—		—		—		—		2.4			—			—			2.4
Dividends on preferred stock, $0.625 per share		—		—		—		—		—		(0.7	)		—			—			(0.7	)
Dividends on common stock and dividend equivalent on stock-based compensation, $0.057 per share		—		—		—		—		—		(1.8	)		—			—			(1.8	)
Stock-based compensation		—		—		—		—		1.1		—			—			—			1.1
Foreign currency translation adjustments		—		—		—		—		—		—			—			0.7			0.7
Change in fair value of derivative, net of tax		—		—		—		—		—		—			—			1.6			1.6
Balance at June 30, 2023		1,200,000	$	—		32,368,112	$	—	$	224.7	$	(76.5	)	$	(5.9	)	$	(0.9	)	$	141.4
Net income		—		—		—		—		—		7.4			—