10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM10-Q

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

For the quarterly period ended March 31, 2021

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  ☒

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 May 10, 2021, there were 32,298,376 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.	Financial Statements		2
	Consolidated Balance Sheets (Unaudited)		2
	Consolidated Statements of Operations (Unaudited)		3
	Consolidated Statements of Equity (Deficit) (Unaudited)		4
	Consolidated Statements of Cash Flows (Unaudited)		5
	Notes to Unaudited Consolidated Financial Statements		6
	Note 1.	Organization and Nature of Operations	6
	Note 2.	Summary of Significant Accounting Policies	6
	Note 3.	Revenue Recognition	8
	Note 4.	Related Party Transactions	11
	Note 5.	Inventories	12
	Note 6.	Property and Equipment	12
	Note 7.	Goodwill	13
	Note 8.	Intangible Assets	13
	Note 9.	Lines of Credit and Floor Plans	13
	Note 10.	Long-Term Debt	14
	Note 11.	Contingencies	16
	Note 12.	Income Taxes	16
	Note 13.	Equity	17
	Note 14.	Share Based Compensation	18
	Note 15.	Fair Value Instruments	18
	Note 16.	Business Combinations	20
	Note 17.	Segments	23
	Note 18.	Subsequent Events	25
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		43
Item 4.	Controls and Procedures		43
PART II
Item 1.	Legal Proceedings		44
Item 1A.	Risk Factors		44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		44
Item 3.	Defaults Upon Senior Securities		44
Item 4.	Mine Safety Disclosures		44
Item 5.	Other Information		44
Item 6.	Exhibits		45
Signature			46

1

PART I

Item 1. Financial Statements

ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in millions, except share and per share amounts)	March 31, 2021			December 31, 2020
ASSETS
CURRENT ASSETS
Cash	$	0.6		$	1.2
Accounts receivable, net of allowances of $7.9 and $7.1 as of March 31, 2021 and December 31, 2020, respectively		144.0			137.8
Inventories, net		223.4			229.0
Prepaid expenses and other current assets		13.3			13.6
Total current assets		381.3			381.6
PROPERTY AND EQUIPMENT, NET		310.8			311.9
OTHER ASSETS
Goodwill		25.8			24.3
Intangible assets, net		25.6			26.3
Other assets		1.5			2.1
Total other assets		52.9			52.7
TOTAL ASSETS	$	745.0		$	746.2
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Lines of credit, net	$	169.6		$	157.7
Floor plan payable – new equipment		119.9			127.6
Floor plan payable – used and rental equipment		34.3			29.8
Current portion of long-term debt		7.8			7.8
Accounts payable		55.5			58.9
Customer deposits		11.4			9.3
Accrued expenses		28.8			30.1
Other current liabilities		12.3			13.1
Total current liabilities		439.6			434.3
LONG-TERM LIABILITIES
Long-term debt, net of current portion		133.5			135.0
Capital lease obligations, net of current portion		0.4			0.6
Buyback residual obligations, net of current portion		0.7			0.7
Lease liability, net of current portion		2.5			2.5
Guaranteed purchase obligation, net of current portion		6.9			6.9
Other liabilities		9.9			9.3
TOTAL LIABILITIES	$	593.5		$	589.3
CONTINGENCIES - NOTE 11
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 March 31, 2021 and December 31, 2020	$	—		$	—
Common stock, $0.0001 par value, 200,000,000 shares authorized; 30,018,502 issued and outstanding at March 31, 2021 and December 31, 2020		—			—
Additional paid-in capital		216.5			216.2
Treasury stock		(5.9	)		(5.9	)
Accumulated deficit		(59.1	)		(53.4	)
TOTAL STOCKHOLDERS’ EQUITY		151.5			156.9
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	745.0		$	746.2

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

2

ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,
(in millions, except share and per share amounts)	2021			2020
Revenues:
New and used equipment sales	$	123.8		$	82.2
Parts sales		41.4			28.7
Service revenue		38.7			30.2
Rental revenue		33.1			25.2
Rental equipment sales		31.8			14.2
Net revenue	$	268.8		$	180.5
Cost of revenues:
New and used equipment sales		106.5			72.4
Parts sales		28.7			19.6
Service revenue		14.5			11.4
Rental revenue		5.5			4.9
Rental depreciation		19.4			12.9
Rental equipment sales		26.9			12.2
Cost of revenue	$	201.5		$	133.4
Gross profit	$	67.3		$	47.1
General and administrative expenses		64.9			51.1
Depreciation and amortization expense		2.0			1.0
Total general and administrative expenses		66.9			52.1
Income (loss) from operations	$	0.4		$	(5.0	)
Other income (expense)
Interest expense, floor plan payable – new equipment		(0.5	)		(0.7	)
Interest expense – other		(5.2	)		(5.2	)
Other income		0.1			0.4
Loss on extinguishment of debt		—			(7.6	)
Total other income (expense)	$	(5.6	)	$	(13.1	)
Loss before taxes	$	(5.2	)	$	(18.1	)
Income tax provision (benefit)		0.5			(1.1	)
Net loss	$	(5.7	)	$	(17.0	)
Basic and diluted loss per share	$	(0.19	)	$	(0.91	)
Basic and diluted weighted average common shares outstanding		30,355,789			18,767,981

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

3

ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIT)

(Unaudited)

	Three Months Ended March 31, 2021
	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			Total Stockholder’s Equity
Balance at December 31, 2020		1,200,000	$	—		30,018,502	$	—	$	216.2	$	(53.4	)	$	(5.9	)	$	156.9
Net loss		—		—		—		—		—		(5.7	)		—			(5.7	)
Share based compensation		—		—		—		—		0.3		—			—			0.3
Balance at March 31, 2021		1,200,000	$	—		30,018,502	$	—	$	216.5	$	(59.1	)	$	(5.9	)	$	151.5
	Three Months Ended March 31, 2020
	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			Total Stockholder’s Equity (Deficit)
Balance at December 31, 2019		—	$	—		7,300,000	$	—	$	—	$	(23.2	)	$	—		$	(23.2	)
Net loss		—		—		—		—		—		(17.0	)		—			(17.0	)
Opening deferred tax liabilities under reverse recapitalization		—		—		—		—		—		(6.9	)		—			(6.9	)
Equity infusion from reverse recapitalization, net of transaction costs		—		—		21,911,359		—		175.7		—			—			175.7
Shares issued upon settlement of equity-linked incentive plan		—		—		300,000		—		3.1		—			—			3.1
Repurchases of common stock		—		—		—		—		—		—			(2.9	)		(2.9	)
Balance at March 31, 2020		—	$	—		29,511,359	$	—	$	178.8	$	(47.1	)	$	(2.9	)	$	128.8

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

4

ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
(amounts in millions)	2021			2020
OPERATING ACTIVITIES
Net loss	$	(5.7	)	$	(17.0	)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Depreciation and amortization		21.4			13.9
Amortization of debt discount and debt issuance costs		0.5			0.3
Imputed interest		0.1			—
Gain on sale of assets		—			(0.1	)
Gain on sale of rental equipment		(4.9	)		(2.0	)
Inventory obsolescence		0.2			0.5
Provision for bad debt		0.6			0.4
Loss on debt extinguishment		—			7.6
Repayment of paid-in-kind interest		—			(11.2	)
Share-based compensation		0.3			3.1
Changes in deferred rent		0.2			—
Changes in deferred taxes		0.5			(1.1	)
Changes in:
Accounts receivable		(5.9	)		(3.5	)
Inventories		(34.2	)		(33.6	)
Proceeds from sale of rental equipment		31.8			14.4
Prepaid expenses and other assets		0.5			(0.4	)
Proceeds from floor plans with manufacturers		84.8			94.2
Payments under floor plans with manufacturers		(86.9	)		(120.7	)
Accounts payable, accrued expenses, customer deposits, and other current liabilities		(4.7	)		(2.1	)
Leases and other liabilities		1.1			0.2
Net cash used in operating activities	$	(0.3	)	$	(57.1	)
INVESTING ACTIVITIES
Proceeds from the sale of assets		0.7			0.1
Expenditures for rental equipment		(6.2	)		(25.5	)
Expenditures for property and equipment		(1.5	)		(1.2	)
Expenditures for acquisitions, net of cash acquired		(1.9	)		(91.7	)
Net cash used in investing activities	$	(8.9	)	$	(118.3	)
FINANCING ACTIVITIES
Expenditures for debt issuance costs		—			(2.7	)
Extinguishment of floor plans and line of credit		—			(132.9	)
Extinguishment of long-term debt		—			(82.0	)
Redemption of former shareholder notes payable		—			(6.7	)
Extinguishment of warrant liability		—			(29.6	)
Proceeds from lines of credit		73.5			220.2
Payments under lines of credit		(61.7	)		(79.9	)
Proceeds from floor plans with unaffiliated source		24.2			25.8
Payments under floor plans with unaffiliated source		(25.3	)		(21.6	)
Proceeds from issuance of long-term debt, net		—			149.4
Payments on long-term debt		(1.9	)		(0.8	)
Payments on capital lease obligations		(0.2	)		(0.2	)
Equity proceeds from reverse recapitalization, net		—			175.7
Repurchases of common stock		—			(2.9	)
Net cash provided by financing activities	$	8.6		$	211.8
NET CHANGE IN CASH		(0.6	)		36.4
Cash, Beginning of year		1.2			0.0
Cash, End of period	$	0.6		$	36.4
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	5.3		$	15.2

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

5

NOTE 1 — ORGANIZATION AND NATURE OF OPERATIONS

Alta Equipment Group Inc. and its subsidiaries (“Alta” or the “Company”) is engaged in the retail sale, service, and rental of material handling and construction equipment in the states of Michigan, Illinois, Indiana, New York (including New York City in our Material Handling segment), Virginia and Florida as well as the New England region (including Boston) of the United States.

Alta Equipment Holdings, Inc. is the holding company for Alta Enterprises, LLC. Alta Enterprises, LLC is the holding company for Alta Industrial Equipment Michigan; LLC; Alta Industrial Equipment Company, LLC; Alta Industrial Equipment New York, LLC; PeakLogix, LLC; Alta Construction Equipment, LLC; Alta Construction Equipment Illinois, LLC; Alta Heavy Equipment Services, LLC; NITCO, LLC; Alta Construction Equipment Florida, LLC, and Alta Construction Equipment New York, LLC.

Unless the context otherwise requires, the use of the terms “the Company”, “we,” “us,” and “our” in these notes to the unaudited consolidated financial statements refers to Alta Equipment Group Inc. and its consolidated subsidiaries.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the consolidated accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All significant intercompany transactions and balances have been eliminated in the preparation of the consolidated financial statements. Certain amounts in the prior year have been reclassified to conform with the presentation in the current year.

The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. Operating results for the three months ended March 31, 2021 is not necessarily indicative of the results that may be expected for the year ending December 31, 2021, and therefore, the results and trends in these interim consolidated financial statements may not be the same for the entire year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s 2020 Annual Report on Form 10-K.

The Company updated the depreciable useful lives of certain of its rental equipment product categories based on our year-end analysis of fair value relative to book value, prior-year utilization trends and a review of market participants approach to depreciation for similar products. Per our accounting policy the updates to depreciable useful lives will be adjusted on prospective basis. Specifically, the notable changes for 2021 will be extending the depreciable life on lift trucks in our Material Handling segment to 84 months, extending the depreciable life on certain aerial and crane related assets in our Construction Equipment segment to 120 months and applying straight-line depreciation to underutilized construction equipment assets that are being depreciated on a unit-of-activity basis to the extent the assets meet certain underutilized thresholds. These accounting policies of the Company were also described in Note 2 to the audited consolidated financial statements contained in the Company’s 2020 Annual Report on Form 10-K.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are based on assumptions that we believe are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. Additionally, the COVID-19 outbreak has had an impact on our approach to these estimates and assumptions and any increased severity of the pandemic on our business could result in a reassessment of these estimates and assumptions which, in turn, could affect the reported amounts on our financial statements. Please see section titled Risk Factors in our 2020 Annual Report on Form 10-K for a discussion of risks associated with the COVID-19 pandemic.

Impairment of Long-lived Assets

The Company evaluates long-lived assets, such as property and equipment and intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying value of any asset group may not be recoverable.

If the estimated future cash flow (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. When reviewing long-lived assets for impairment, the Company groups long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. After evaluating and weighing all relevant events and circumstances, the Company did not identify any indications necessary to perform an interim impairment test for the long-lived assets as of and for the period ended March 31, 2021.

6

Goodwill

Pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 350, Intangibles-Goodwill and Other (“ASC 350”), goodwill is recorded as the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired.

The Company evaluates goodwill for impairment at least annually, or more frequently if triggering events occur or other impairment indicators arise which might impair recoverability. Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment (i.e. before aggregation or combination), or one level below an operating segment (i.e. a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component.

After evaluating and weighing all relevant events and circumstances, the Company concluded there was no triggering event that constitutes the need to perform a goodwill impairment test for the period ended March 31, 2021.

Income Taxes

The Company was formed in 2020 for income tax purposes. Alta Enterprises, LLC was historically and remains a partnership for federal income tax purposes, with each partner being separately taxed on its share of taxable income (loss).  There is no federal income tax expense (benefit) reflected in the Company’s financial statements for any period prior to the reverse recapitalization on February 14, 2020. As the activity resides in Alta Enterprises, LLC, the income tax impact to the Company represents the current income tax calculated at the Consolidated Return level (“Alta Equipment Group Inc and Subsidiaries”), and the deferred impact of the interest in the lower tier partnership.

We use the guidance in FASB ASC Topic 740-270, Income Taxes in Interim Periods, where tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are considered in the relevant period. At the end of each interim reporting period, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected income (loss) before income taxes for the year, projections of the proportion of income (and/or loss) earned and taxed, permanent and temporary differences, and the likelihood of the realizability of deferred tax assets generated in the current year. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or the Company’s tax environment changes. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or to the extent that the expected annual effective income tax rate changes, the effect of the change on prior interim periods is included in the income tax provision in the period in which the change in estimate occurs. We establish valuation allowances for our deferred tax assets if the amount of expected future taxable income is not likely to allow for the use of the deduction or credit.

Share Based Compensation

The Board of Directors approved the Company’s 2020 Omnibus Incentive Plan, which enables the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, other share based awards and cash awards to directors, employees and consultants to improve the ability of the Company to attract, retain, and motivate individuals upon whom the Company’s sustained growth and financial success depend, by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company.

We measure the employee stock-based awards at grant-date fair value using provisions of ASC 718 – Stock Compensation and record compensation expense over the vesting period of the award. The Company made an accounting election upon adoption of Accounting Standard Update (“ASU”) 2016-09 and will recognize forfeitures when they occur. The Company treated equity awards granted to non-employee directors similarly to the equity awards to employees upon adoption of ASU 2018-07.

New Accounting Pronouncements

Pronouncements Not Yet Adopted

Leases (Topic 842)

In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”) that replaces the existing leasing guidance. Topic 842 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance also expands the requirements for lessees to record leases embedded in other arrangements and the required quantitative and qualitative disclosures surrounding leases. Accounting guidance for lessors is largely unchanged.

7

The Company is still assessing the impact Topic 842 will have on its future revenue and expenses. The new accounting standard is effective for the annual reporting period ended December 31, 2021 with an effective date of January 1, 2021, and the interim reporting periods beginning January 1, 2022. Management is currently assessing the impact the adoption of this standard will have on the Company’s consolidated financial statements as well as the available transition methods.

Financial Instruments — Credit Losses (Topic 326)

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This standard prescribes an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in the timely recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of the financial instrument.

Measurement of expected credit losses is to be based on relevant forecasts that affect collectability. The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures. Different components of the guidance require modified retrospective or prospective adoption. As amended by ASU 2019-10, the ASU 2016-13 is effective for the annual reporting period beginning on or after December 15, 2022. The Company believes ASU 2016-13 will only have applicability to the Company’s receivables from revenue transactions, or trade receivables, except those arising from rental revenues as ASU 2016-13 does not apply to receivables arising from operating leases. The Company is currently evaluating whether the new guidance, while limited to our non-operating lease trade receivables, will have an impact on the consolidated financial statements or existing internal controls.

Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848)

In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). This guidance is intended to provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform (e.g., discontinuation of LIBOR) if certain criteria are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. The amendments of this ASU should be applied on a prospective basis. Our potential exposure related to the expected cessation of LIBOR is limited to the interest expense we incur on our Credit Facility. We cannot predict the effect of the potential changes to or elimination of LIBOR, the establishment and use of alternative rates or benchmarks, but do not expect a significant impact on our consolidated financial position, and results of operations.

NOTE 3 — REVENUE RECOGNITION

Revenues are recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the business expects to be entitled to in exchange for those goods or services. Control is transferred when the customer has the ability to direct the use of and obtain the benefits from the goods or services. The majority of the Company’s sales agreements contain performance obligations satisfied at a point in time when control is transferred to the customer. For agreements with multiple performance obligations, which are infrequent, judgment is required to determine whether performance obligations specified in these agreements are distinct and should be accounted for as separate revenue transactions for recognition purposes. In these types of agreements, the Company generally allocates sales prices to each distinct performance obligation based on the observable selling price.

The Company enters into various equipment sales transactions with certain customers, whereby customers purchase equipment from the Company and then lease the equipment to a third party. In some cases, the Company provides a guarantee to repurchase the equipment back at the end of the lease term between the customer and third party lessee at a set residual amount set forth in the initial sales contract or pay the customer for the deficiency, if any, between the sale proceeds received for the equipment and the guaranteed minimum resale value. The Company is precluded from recognizing a sale of equipment if it guarantees to repurchase the sold equipment back or guarantees the resale value of the equipment to the customer for contracts determined to be operating leases. Rather, these transactions are accounted for in accordance with ASC 840, Lease Accounting (“Topic 840”).

The lease liability, with respect to the aforementioned sale transactions, represents the net proceeds upon the equipment’s initial transfer. These amounts, excluding the guaranteed residual value, are recognized into rental revenue on a pro-rata basis over the leased contract period up to the first exercise date of the guarantee. At March 31, 2021 and December 31, 2020, the total lease liability relating to these various equipment sale transactions amounted to $3.4 million and $3.8 million, respectively. The Company also recognized a liability for its guarantee to repurchase the equipment at the residual amounts of $8.5 million and $9.0 million as of March 31, 2021 and December 31, 2020, respectively.

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The Company also enters into various rental agreements whereby owned equipment is leased to customers. Revenue from the majority of rental agreements is recognized over the term of the agreement in accordance with Topic 840. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, the Company records unbilled rental revenues and deferred rental revenues at the end of each reporting period. Unbilled rental revenues are included as a component of “Accounts receivable” on the Consolidated Balance Sheets. Rental equipment is also purchased outright (“rental conversions”). Rental revenue and revenue attributable to rental conversions, are recognized in “Rental revenue” and “Rental equipment sales” on the Consolidated Statements of Operations, respectively.

The Company also enters into contracts with customer where it provides automated equipment installation and system integration services and installation and set-up of warehouse management systems and related hardware and software support services. Revenue from the installation services are recognized over time as the performance obligation is satisfied, determined using the cost-to-cost input method, based on contract costs incurred to date to total estimated contract costs. Revenue from recurring support services is recognized ratably over the contract period.

Revenue from periodic maintenance service sales is recognized upon completion of the service. Revenue from guaranteed maintenance contracts is recognized over the contract period in proportion to the costs expected to be incurred in performing services under the contract, typically three to five years.

Payment terms vary by the type and location of the customer and the products or services offered. Generally, the time between when revenue is recognized, and payment is due is not significant. The Company does not evaluate whether the selling price includes a financing interest component for contracts that are less than a year, or if payment is expected to be received less than a year after the good or service has been provided. Sales and other taxes collected from customers and remitted to government authorities are accounted for on a net basis and, therefore, excluded from revenue. Shipping and handling costs are treated as fulfillment costs and are included in cost of revenue.

Costs to obtain contracts, such as sales commissions, are expensed as incurred given that the terms of the contracts are generally less than one year.

Under bill-and-hold arrangements, revenue is recognized when all configuration work is complete and the equipment has been set aside for final shipment, at which point the Company has determined control has been transferred.

Deferred Revenue

The Company recognizes deferred revenue with respect to automated equipment installation and system integration services,  service sales and rental agreements. Deferred revenue with respect to service sales represents the unearned portion of fees related to guaranteed maintenance contracts for customers covering equipment they have previously purchased. These amounts are recognized based on an estimated rate at which the services are provided over the life of the contract. The Company also recognizes deferred revenue related to rental agreements.

Total deferred revenue relating to automated equipment installation and system integration services, service sales agreements and rental agreements as of March 31, 2021 and December 31, 2020 was $10.0 million and $9.6 million, respectively.

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Disaggregation of Revenues

The following table summarizes the Company’s disaggregated revenues as presented in the Consolidated Statement of Operations for the three months March 31, 2021 and 2020 by revenue type, and by the applicable accounting standard.

	Three months ended March 31, 2021						Three months ended March 31, 2020
	Topic 840		Topic 606		Total		Topic 840		Topic 606		Total
Revenues:
New and used equipment sales	$	—	$	123.8	$	123.8	$	—	$	82.2	$	82.2
Parts sales		—		41.4		41.4		—		28.7		28.7
Service revenue		—		38.7		38.7		—		30.2		30.2
Rental revenue		33.1		—		33.1		25.2		—		25.2
Rental equipment sales		—		31.8		31.8		—		14.2		14.2
Net revenue	$	33.1	$	235.7	$	268.8	$	25.2	$	155.3	$	180.5

The Company believes that the disaggregation of revenues from contracts to customers as summarized above, together with the discussion below, depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by economic factors.

Leases revenues (Topic 840)

New and used equipment sales:    The Company enters into various equipment sale transactions with certain customers, whereby customers purchase equipment from the Company and then lease the equipment to a third party. In some cases, the Company provides a guarantee to repurchase the equipment back at the end of the lease term between the customer and third party lessee at a set residual amount set forth in the initial sales contract or pay the customer for the deficiency, if any, between the sale proceeds received for the equipment and the guaranteed minimum resale value. The Company is precluded from recognizing a sale of equipment when it is obligated or has an option to repurchase or guarantees the resale value of the equipment to the customer for contracts determined to be operating leases. For these arrangements, because the Company generally receives the full amount of the consideration at the beginning of the arrangement, the Company initially records deferred revenue for the amount received and recognizes revenue on a pro-rata basis over the term of the contract under Topic 840.

Rental revenue:    Owned equipment rentals represent revenues from renting equipment. The Company accounts for these rental contracts as operating leases. The Company recognizes revenue from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, the Company records unbilled rental revenues and deferred rental revenues at the end of each reporting period.

Revenues from contracts with customers (Topic 606)

Accounting for the different types of revenues pursuant to Topic 606 are discussed below. Substantially all of the Company’s revenues under Topic 606 are recognized at a point in time rather than over time.

New and used equipment sales:    With the exception of bill-and-hold arrangements, the Company’s revenues from the sale of new and used equipment are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good. Under bill-and-hold arrangements, revenue is recognized when all configuration work is complete and the equipment has been set aside for final shipment, at which point the Company has determined control has been transferred. The Company does not offer material rights of return. The Company recognized approximately $7.9 million and $0 million in revenues for the year-to-date period ended March 31, 2021 and 2020, respectively, from automated equipment installation and system integration services as the performance obligations were satisfied over time using the cost-to-cost input method, based on contract costs incurred to date to total estimated contract costs.

Parts sales:    Revenues from the sale of parts are recognized at the time of pick-up by the customer for over the counter sales transactions. For parts that are shipped to a customer, the Company elected to use a practical expedient of Topic 606 and treat such shipping activities as fulfillment costs, thereby recognizing revenues at the time of shipment. The Company does not offer material rights of return.

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Service revenue:    The Company records service revenue primarily from guaranteed maintenance and periodic maintenance contracts with customers. The Company recognizes periodic maintenance service revenues at the time such services are completed, which is when the control of the promised services is transferred over to the customer. The Company recognizes guaranteed maintenance service revenues over-time using an input method of costs incurred to estimated costs over the life of the related contract. Revenue recognized from guaranteed maintenance contracts totaled $4.3 million and $4.0 million for the year-to-date period ended March 31, 2021 and 2020, respectively. The Company also records service revenue from warranty contracts whereby the Company performs service on behalf of the Original Equipment Manufacturer (“OEM”) or third-party warranty provider.

Rental equipment sales:The Company also sells rental equipment from our rental fleet, these sales are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good. In some cases, certain rental agreements contain a rental purchase option, whereby the customer has an option to purchase the rented equipment during the term of the rental agreement. Revenues from the sale of rental equipment are recognized at the time the rental purchase option agreement has been approved and signed by both parties, as the equipment is already in the customer’s possession under the previous rental agreement, and therefore control has been transferred as title has been transferred.

Contract costs

The Company does not recognize assets associated with the incremental costs of obtaining a contract with a customer that the Company expects to recover (for example, a sales commission). Most of the Company’s revenue is recognized at a point in time or over a period of one year or less, and the Company has used the practical expedient that allows it to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less. The amount of the costs associated with the revenue recognized over a period of greater than one year is insignificant.

Receivables and contract assets and liabilities

The Company has contract assets associated with contracts with customers. Contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. Deferred revenue associated with service contracts represents the unearned portion of revenue related to guaranteed maintenance contracts for customers covering equipment purchased. These amounts are recognized based on an estimated rate at which the services are provided over the life of the contract.

Payment terms

The Company’s revenues do not include material amounts of variable consideration under Topic 606. Payment terms may vary by the type of customer, location, and the type of products or services offered. The time between invoicing and when payment is due is not significant, and contracts do not generally include a significant financing component. Contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties.

Contract estimates and judgments

The Company’s revenues accounted for under Topic 606 generally do not require significant estimates or judgments as the transaction price is generally fixed and clearly stated in the customer contracts. Contracts generally do not include multiple performance obligations, and accordingly do not require estimates of the standalone selling price for each performance obligation. Substantially all of the Company’s revenues are recognized at a point in time and the timing of the satisfaction of the applicable performance obligations is readily determinable. The Company’s revenues under Topic 606 are generally recognized at the time of delivery to, or pick-up by, the customer.

NOTE 4 — RELATED PARTY TRANSACTIONS

The Company leases a subset of itsoperating facilities from three real estate entities related through common ownership. Total rent expense under these lease agreements for both the three months ended March 31, 2021 and 2020 was $1.2 million.

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NOTE 5 — INVENTORIES

The components of inventories, net, consisted of the following (amounts in millions):

	March 31,			December 31,
	2021			2020
New equipment	$	145.8		$	153.5
Used equipment		30.9			31.4
Work in process		7.3			5.4
Parts		42.5			41.6
Gross Inventory	$	226.5		$	231.9
Inventory reserves		(3.1	)		(2.9	)
	$	223.4		$	229.0

Direct labor of $2.1 million and $1.7 million incurred for open service orders were capitalized and included in work in process at March 31, 2021 and December 31, 2020, respectively. The remaining work in process balances as of March 31, 2021 and December 31, 2020 primarily represent parts applied to open service orders. Rental depreciation expense in connection with our new and used equipment was $2.0million and $0.8 million for the three months ended March 31, 2021 and 2020, respectively.

NOTE 6 — PROPERTY AND EQUIPMENT

Property and equipment, net, consisted of the following (amounts in millions):

	March 31,			December 31,
	2021			2020
Land	$	0.1		$	0.1
Rental fleet		421.2			418.5
Equipment and leasehold improvements:
Machinery and equipment		5.5			5.5
Autos and trucks		6.4			7.0
Leasehold improvements		9.3			8.7
Office equipment		3.1			3.1
Computer equipment		10.4			9.4
Total Cost	$	456.0		$	452.3
Less: accumulated depreciation and amortization
Rental fleet		(128.3	)		(124.6	)
Equipment, auto and trucks, leasehold improvements and computer and office equipment		(16.9	)		(15.8	)
Total accumulated depreciation and amortization		(145.2	)		(140.4	)
	$	310.8		$	311.9

Total depreciation and amortization on property and equipment was $18.7 million and$13.0 million for the three months ended March 31, 2021 and 2020, respectively. The Company had assets related to capital leases, which are included in the machinery and equipment balance above. Such assets had gross carrying values totaling $4.0 million and $4.0 million, and accumulated amortization balances totaling $2.7 million and $2.5 million, as of March 31, 2021 and December 31, 2020, respectively. Of the $421.2 million and $418.5 million of gross cost of rental fleet, $12.4 million and $13.0 million were represented by guaranteed purchase obligation (“GPO”) assets as of March 31, 2021 and December 31, 2020, respectively.

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NOTE 7— GOODWILL

The following table summarizes the changes in the carrying amount of goodwill in total and by reportable segment as of March 31, 2021 and December 31, 2020 (amounts in millions):

	Material Handling		Construction Equipment		Total
Balance, December 31, 2020	$	10.2	$	14.1	$	24.3
Additions		1.5		-		1.5
Balance, March 31, 2021	$	11.7	$	14.1	$	25.8

See Note 16, Business Combinations for further information.

NOTE 8 — INTANGIBLE ASSETS

The gross carrying amount of intangible assets and accumulated amortization as of March 31, 2021 and December 31, 2020 were as follows (amounts in millions):

	March 31, 2021							December 31, 2020
	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Customer relationships	$	25.9	$	(3.7	)	$	22.2	$	25.9	$	(3.1	)	$	22.8
Tradenames		1.6		(0.5	)		1.1		1.6		(0.4	)		1.2
Non-compete agreements		0.8		(0.1	)		0.7		0.8		(0.1	)		0.7
Favorable Market Rent		1.7		(0.1	)		1.6		1.7		(0.1	)		1.6
Total	$	30.0	$	(4.4	)	$	25.6	$	30.0	$	(3.7	)	$	26.3

Amortization of intangible assets were $0.7 million and $0.1 million for the three months ended March 31, 2021 and March 31, 2020,respectively.

NOTE 9 — LINES OF CREDIT AND FLOOR PLANS

Effective February 14, 2020, the Company amended and restated its credit facility with its first lien lender by entering into the Fifth Amended and Restated ABL First Lien Credit Agreement (“Amended and Restated Credit Agreement”) and the facility thereunder, the “ABL Facility”) by and among Alta Equipment Group Inc. and the other credit parties named therein, the lenders named therein, JP Morgan Chase Bank, N.A., as Administrative Agent, and the syndication agents and documentation agent named therein.

In connection with the Amended and Restated Credit Agreement, the Company amended and restated its floor plan facility with its first lien lender by entering into the Fifth Amended and Restated Floor Plan First Lien Credit Agreement (“Floor Plan Credit Agreement” and the facility thereunder, the “Floor Plan Facility”) by and among Alta Equipment Group Inc. and the other credit parties named therein, the lender JP Morgan Chase Bank, N.A., as Administrative Agent, Sole Bookrunner and Sole Lead Arranger.

The Amended and Restated Credit Agreement, among other things, (i) moved the $85 million floor plan financing facility of the Fourth Amended and Restated First Lien Credit Agreement out of syndication and into the Floor Plan Credit Agreement, (ii) increased the total aggregate amount of indebtedness of all floor plans from $220 million to $225 million, (iii) increased the revolving line of credit borrowing capacity from $110 million to $300 million, and (iv) modified certain financial covenants.

On January 11, 2021, the Company amended its Fifth Amended and Restated ABL First Lien Credit Agreement by and among Alta Equipment Group Inc. and the other credit parties named therein, the lenders named therein, JP Morgan Chase Bank, N.A., as Administrative Agent, and the syndication agents and documentation agent named therein. The amendment generally allows for dividend payments to be made on the Preferred Stock without having to meet a leverage threshold, it excludes the Preferred dividend payments from affecting the second lien prepayment requirement, and it increases vendor floor plan limits from $225 million to $250 million, however, credit line borrowings would begin to be limited in the instance amounts borrowed on floor plan facilities exceed $225 million.

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The Floor Plan Credit Agreement, among other things, (i) modified the floor plan financing facility with its first lien lender from $85 million to $40 million, and (ii) modified certain financial covenants.

Line of Credit and Floor Plan — First Lien Lender

The Company has an ABL Facility with its first lien holder with advances on the line being supported by eligible accounts receivable, parts, and otherwise unencumbered new and used equipment inventory and rental equipment. The ABL Facility has a maximum borrowing capacity of $300 million and interest cost is the London Interbank Offered Rate (“LIBOR”) plus an applicable margin or the CB Floating Rate, depending on the borrowing. As of March 31, 2021, the Company had an outstanding ABL Facility balance of $170.9 million, excluding unamortized debt issuance costs. The effective interest rate was 2.0% at March 31, 2021. As of December 31, 2020, the Company had an outstanding ABL Facility balance of $159.1 million, excluding unamortized debt issuance costs. The effective interest rate was 2.0% at December 31, 2020.

The Company has a Floor Plan Facility with its first lien lender to primarily finance new inventory. This Floor Plan Facility has a maximum borrowing capacity of $40 million. The interest cost for the first lien lender floor plan facility is LIBOR plus an applicable margin. The effective interest rate at March 31, 2021 was 2.9%. The floor plan is collateralized by substantially all assets of the Company. As of March 31, 2021, the Company had an outstanding balance on their first lien lender floor plan facility of $34.3 million, excluding unamortized debt issuance costs.

As of December 31, 2020, the Company had an outstanding balance on their first lien lender floor plan facility of $35.3 million, excluding unamortized debt issuance costs. The effective interest rate at December 31, 2020 was 2.9%.

Original Equipment Manufacturer (“OEM”) Captive Lenders and Suppliers’ Floor Plans

The Company has floor plan financing facilities with several OEM captive lenders and suppliers for new and used inventory and rental equipment, each with borrowing capacities ranging from $2.0 million to $102.0 million. Primarily, the Company utilizes the facilities for purchases of new equipment inventories. Certain floor plans provide for up to twelve-months interest only or deferred payment periods. In addition, certain floor plans provide for interest and principal free terms at the suppliers’ discretion. The Company routinely sells equipment that is financed under OEM captive lender floor plans prior to the original maturity date of the financing agreement. When this occurs, the related OEM captive lender floor plan payable becomes due to be paid at the time the equipment being financed is sold. 

With the recent acquisitions, the Company’s floor plan financing facilities with its OEM capital lenders and suppliers were amended to include the new locations and new entities. The floor plan financing facilities are secured by the equipment being financed, and contain operating company guarantees. The interest is LIBOR plus an applicable margin. The effective rates, excluding the favorable effect of interest-subsidies, as of March 31, 2021 ranged from 3.2% to 4.1%. As of March 31, 2021, the Company had an outstanding balance on these floor plans of $120.0 million.

The total aggregate amount of floor plan financing (including the first lien lender floor plan) cannot exceed $250.0 million at any time. Total balance related to floorplan financing as of March 31, 2021 and December 31, 2020 was $154.3 million and $157.5 million, respectively, excluding unamortized debt issuance costs. For the three months ended March 31, 2021 and 2020, the Company recognized interest expense associated with new equipment financed under its floor plan facilities of $0.5 million and $0.7 million, respectively.

Maximum borrowings under the floor plans and ABL Facility are limited to $550 million. The total amount outstanding as of March 31, 2021 and December 31, 2020 was $325.2 million and $316.6 million, exclusive of debt issuance and deferred financings costs of $1.4 million and $1.5 million, respectively.

Each of the ABL Facility and the Floor Plan Facility was amended and restated in its entirety on April 1, 2021. See Note 18, Subsequent Events – Amended and Restated Credit Arrangements for further information.

NOTE 10 — LONG-TERM DEBT

The Company entered into a new Note Purchase Agreement (the “Term Loan”) dated as of February 3, 2020 in connection with the reverse recapitalization,for the purposes of, among other things, (i) financing the reverse recapitalization, (ii) financing the acquisitions of Flagler and Liftech; and (iii) providing for the repayment and refinance of a portion of the Company’s prior existing debt.

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Term Loan

On February 14, 2020, the Company entered into a Note Purchase Agreement which comprised of a term loan in an aggregate principal amount of $155.0 million with its second priority lien lender through syndication, with an initial maturity date of August 2025. In connection with the new Term Loan, the Company retired the Prior Note Purchase Agreement.The term loanis payable, at the lender’s option, in quarterly installments of $1.9 million plus interest at LIBOR plus 8%. As of March 31, 2021, the effective interest rate was 9.8%. The Term loan is collateralized by substantially all assets of the Company.

As of March 31, 2021, outstanding borrowings under the term loan were $147.3 million, which included $6.0 million deferred financing costs and original issue discounts.

On April 1, 2021, we completed a private offering of $315 million of our 5.625% Senior Secured Second Lien Notes due 2026 (the “Notes”). The Company used the net proceeds from the sale of the Notes and the new borrowings under the ABL Facility and the Floor Plan Facility, to repay its $147.3 million second lien term loan facility, to repay and refinance a portion of the ABL Facility and the Floor Plan Facility and to pay related fees and expenses. See Note 18, Subsequent events – Issuance of 5.625% Senior Secured Second Lien Notes due 2026 for further information.

Extinguishment of Debt

In the first quarter of 2020, the Company recorded a loss on the extinguishment of debt in the amount of $7.6 million in the line item “Loss on Extinguishment of Debt” in its Consolidated Statements of Operations. This was in accordance with ASC Topic No. 470-50, “Debt – Modifications and Extinguishments” (Topic No. 470), as the transaction was determined to be an extinguishment of the existing debt and an issuance of new debt.

The Company’s long-term debt consists of the following (amounts in millions):

	March 31,			December 31,
	2021			2020
Term Loan	$	147.3		$	149.2
Unamortized debt issuance costs		(1.7	)		(1.8	)
Debt discount		(4.3	)		(4.6	)
Total debt	$	141.3		$	142.8
Less: Current maturities of long-term debt, net		(7.8	)		(7.8	)
Long-term debt, net	$	133.5		$	135.0

As of March 31, 2021, the Company was in compliance with the financial covenants set forth in its debt agreements.

Promissory Note

On June 12, 2020, the Company entered into anunsecured promissory note for $1.0 million at an interest rate of 6.0% on the unpaid principal sum in connection with the PeakLogix acquisition. The promissory note is due one year from the date of the acquisition. Due to the short-term nature of the note, the liability was included in “Other current liabilities” on the Consolidated Balance Sheet as of March 31, 2021.

Notes Payable – Non-Contingent Consideration

The Company acquired all the assets of PeakLogix on June 12, 2020. Pursuant to the purchase agreement, Sellers are entitled to additional cash payments of a minimum of $2.0 million through-out 5-year earn-out period. As of March 31, 2021, the Company recorded a $1.7 million liability related to present value of these minimum cash payments using a market participant discount rate. This additional future liability is recorded as non-contingent liability in “Other liabilities” on the Consolidated Balance Sheet. See Note 15, Fair Value Instruments and Note 16, Business Combinations for further information.

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NOTE 11 — CONTINGENCIES

Guarantees

As of March 31, 2021, and December 31, 2020, the Company was party to certain contracts in which it guarantees the performance of agreements between various third-party financial institutions. The terms of the guarantees range from three to five years. In the event of a default by a third-party lessee, the Company would be required to pay all or a portion of the remaining unpaid obligations as specified in the contract. The estimated exposure related to these guarantees was $1.9 million and $2.4 million at March 31, 2021 and December 31, 2020, respectively. It is anticipated that the third parties will have the ability to repay the debt without the Company having to honor the guarantee; therefore, no amount has been accrued on the Consolidated Balance Sheets at March 31, 2021 and December 31, 2020, respectively.

Legal Proceedings

During the three months ended March 31, 2021 and March 31, 2020, various claims and lawsuits, incidental to the ordinary course of business, were pending against the Company. In the opinion of management, after consultation with legal counsel, resolution of these matters is not expected to have a material effect on the Company’s consolidated financial statements.

Contractual Obligations

The Company does not believe there are any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on the Company. As of March 31, 2021, and December 31, 2020 there was $1.4 million in outstanding letters of credits issued in the normal course of business, respectively.

NOTE 12 — INCOME TAXES

The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statement in the period of enactment. The deferred tax liabilities and assets for the Company represent the difference between the financial statement and tax basis of the partnership interest in Alta Enterprises, LLC. As such, the Company is using the single line item approach.

The income tax provision (benefit) for the three months ended March 31, 2021 and 2020 consisted of the following:

	Three Months Ended March 31,
	2021		2020
Federal taxes-current	$	—	$	—
Federal taxes-deferred		0.4		(0.8	)
State taxes-current		—		—
State taxes-deferred		0.1		(0.3	)
	$	0.5	$	(1.1	)

Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are considered in the relevant period. At the end of each interim reporting period, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

The Company recorded an income tax expense of $0.5 million for the three months ended March 31, 2021 and an income tax benefit of $1.1 million for the three months ended March 31, 2020. As a result of Alta’s first quarter 2021 analysis of the realizability of its deferred tax assets, and after considering tax planning initiatives and other inputs, Alta determined that it was more likely than not that deferred tax assets would not be realized and recorded income tax expense of $0.5 million to establish a valuation allowance.

Alta reviews the realizability of its deferred tax assets on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results are considered, along with any other positive or negative evidence. All of the factors that Alta considers in evaluating whether and when to establish or release all or a portion of the deferred tax asset valuation allowance involve significant judgment.

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The effective tax rate for the three months ended March 31, 2021 was (8.8)%when compared to 24.1% for the period from February 14, 2020 to March 31, 2020 in connection with the reverse recapitalization. This was mainly due to the impact of the application of the valuation allowance during the first quarter.

As of December 31, 2020, the Company has federal net operating tax loss carryforwards of approximately 4.7 million, which may be carried forward indefinitely and are eligible to offset 80% of future taxable income.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, includes various income and payroll tax provisions, modifications to federal net operating loss rules, business interest deduction limitations, and bonus depreciation eligibility for qualified improvement property.

The CARES Act did not materially impact our effective tax rate for prior periods, although it will impact the timing of future cash payments for taxes. As of March 31, 2021, we have deferred employer payroll taxes of $5.6 million under the CARES Act, with half of the deferred amounts due by December 31, 2021, and the remaining half due by December 31, 2022.

NOTE 13 — EQUITY

Preferred Stock

On December 22, 2020, the Company closed its underwritten public offering of depositary shares, each representing 1/1000th of a share of 10% Series A Preferred Stock, par value $0.0001 per share. The liquidation preference of each share of Series A Preferred Stock is $25,000 ($25.00 per Depositary Share). At the closing, the Company issued 1,200 shares of Series A Preferred Stock represented by 1,200,000 Depositary Shares issued.

We will pay cumulative cash dividends on the Series A Preferred Stock, when and as declared by our Board of Directors, at the rate of 10% of the $25,000.00 liquidation preference ($25.00 per depositary share) per year (equivalent to $2,500 or $2.50 per depositary share).

Dividends are payable quarterly in arrears, on or about the last day of January, April, July and October, beginning on or about April 30, 2021; provided that if any dividend payment date is not a business day, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day, and no interest, additional dividends or other sums will accumulate. Dividends will accumulate and be cumulative from, and including December 22, 2020, the date of original issuance. The first dividend was scheduled to be paid and was paid on or about April 30, 2021 in the amount of $0.88889 per depositary share. This dividend payment covered the period from and including December 22, 2020 through, but not including, April 30, 2021.

Warrants

As of December 31, 2020, there were warrants outstanding to acquire 8,668,746 shares of the Company’s Common Stock. These warrants were issued in connection with the equity infusion related to reverse recapitalization. The warrants entitle the registered holder to purchase one share of our Class A Common Stock at a price of $11.50 per share, subject to certain adjustments. The warrants will expire five years after February 14, 2020, the date reverse recapitalization was completed or earlier upon redemption or liquidation.

Prior to the reverse recapitalization, the Company granted warrants to purchase 33,333.33 shares of common units in connection with the stock purchase and redemption that occurred on December 27, 2017 (“the 2017 Warrants”). The 2017 Warrants had an exercise price of $0.01 and included a conditional put option, allowing the holder to require the Company to purchase the outstanding warrants, via a settlement upon the following events: (1) upon 75% repayment of senior indebtedness, (2) change in control from a sale transaction, and (3) the maturity of the related debt, which required the Company to settle the warrants in cash. The warrants were to expire December 27, 2027. The 2017 Warrants also included a limited call right, where in the event of a sale transaction, the Company had the right to redeem, in cash, all of the warrants simultaneously at a per common share price equal to the per unit set for the sale transaction.

On February 14, 2020, the Company consummated its reverse recapitalization. As a result, the Company redeemed all the 2017 Warrants outstanding upon closing of the reverse recapitalization and as of December 31, 2020, there were no warrant liabilities on the Consolidated Balance Sheet associated with the 2017 Warrants.

On April 12, 2021, we exchanged all 8,668,746 of our outstanding warrants into shares of our common stock at an exchange ratio of 0.263 shares of common stock per warrant, for an aggregate issuance of approximately 2,279,874 shares of common stock in the exchange. Also, on April 12, 2021, the Acting Chief Accountant and Acting Director of the Division of Corporation Finance of the

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Securities and Exchange Commission (the “SEC”) released the Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies.See Note 18, Subsequent Events – Warrant Exchangeand Part II, 1A “Risk Factors” for further information.

NOTE 14 — SHARE BASED COMPENSATION

During the third quarter 2020, the Compensation Committee of our Board of Directors approved the grant of 690,000 shares of Restricted Stock Units (“RSUs”) to certain directors, officers and employees of the Company under the 2020 Omnibus Incentive Plan. The Company’s plan is to have broad-based, long-term programs intended to attract and retain talented employees and align stockholder and employee interests. We calculated the fair value of the RSUs at grant date based on the closing market price of our common stock at the date of grant. The compensation expense is recognized on a straight-line basis over the requisite vesting period of the award.

The Company recognized total compensation expense of $0.3 million and $0 million for the three months ended March 31, 2021, and 2020 respectively.

As of March 31, 2021, the total unrecognized compensation expense related to the non-vested portion of the Company's restricted stock awards was $1.4 million, which is expected to be recognized over a weighted average period of 2.4 years.

The following table summarizes our restricted stock unit activity as of March 31, 2021:

Restricted Stock Units	Number of units			Weighted average grant date fair value
As of December 31, 2020		300,000		$	7.60
Granted		—			—
Vested		(65,000	)		7.60
Forfeited		—			—
As of March 31, 2021		235,000		$	7.60

NOTE 15 — FAIR VALUE INSTRUMENTS

The carrying value of financial instruments reported in the accompanying Consolidated Balance Sheets for cash, accounts receivable, accounts payable and accrued expenses payable and other liabilities approximate fair value due to the immediate or short-term nature or maturity of these financial instruments. Based upon current borrowing rates with similar maturities, which are Level 2 fair value inputs, the carrying value of lines of credit, long-term debt, and the guaranteed purchase obligations approximates the fair value as of March 31, 2021 and December 31, 2020.

The following is a description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring basis:

Contingent Consideration

The contingent consideration liability represents the fair value of the future earn-out liability that the Company may be required to pay in conjunction with the acquisitions upon the achievement of certain performance milestones. The earn-out for the acquisitions is measured at fair value in each reporting period, based on level 3 inputs, with any change to the fair value recorded in the Consolidated Statements of Operations.

PeakLogix LLC (“PeakLogix”)

The purchase agreement for the PeakLogix acquisition provides for earn-out payments of a minimum of $2.0 million up to $3.7 million which can be earned through June 30, 2025 based on meeting certain performance milestones. We estimated the fair value of the incremental $1.7 million earn-out payment based on a probability weighted range of outcomes analysis and applied a discount rate that appropriately captures a market participant's view of the risk associated with the obligation. This analysis considered the earn-out payment thresholds, the minimum and maximum range of earn-out payments per the agreement and the expected future cash flows of PeakLogix. The earn-out will be remeasured at each balance sheet date using this approach and any resulting increase or decrease will be reflected in the income statement. Going forward, volatility in the amount of PeakLogix’s actual results and forecasted scenarios could impact the fair value of this contingent consideration.

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The Company concluded the future minimum cash payments of $2.0 million will be treated as a non-contingent liability and recorded a $1.7 million liability related to the present value of these minimum cash payments.See Note 10, Long-Term Debt and Note 16, Business Combinations for further information.

In addition to the non-contingent liability, there is a potential earn out payment of $1.7 million to be paid to Sellers over a five-year period. The Company recorded a $1.0 million earn out liability as the acquisition date fair value in “Other Liabilities” on the Consolidated Balance Sheet. See Note 16, Business Combinations for further information.

Hilo Equipment & Services (“Hilo”)

The purchase agreement for the Hilo acquisition provides an earn-out payment of $1.0 million based on meeting certain financial target which can be earned through July 1, 2023. We estimated the fair value of the earn-out liability based on the present value of probability weighted expected future results. See Note 16, Business Combinations for further information.

The following table sets forth, by level of hierarchy, the Company’s recurring measures at fair value as of March 31, 2021 and December 31, 2020, which was presented in “Other Liabilities” on the Consolidated Balance Sheet:

	March 31, 2021
	Level 1		Level 2		Level 3
Liabilities: Contingent consideration	$	—	$	—	$	1.8
	December 30, 2020
	Level 1		Level 2		Level 3
Liabilities: Contingent consideration	$	—	$	—	$	1.8

The following is a summary of changes to Level 3 instruments as of March 31, 2021 and December 31, 2020:

	Contingent Consideration
Balance, January 1, 2020	$	—
Acquisition of PeakLogix		1.0
Acquisition of Hilo		0.8
Change in fair value		—
Balance, December 31, 2020		1.8
Change in fair value		—
Balance, March 31, 2021	$	1.8

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NOTE 16 — BUSINESS COMBINATIONS

The following table summarizes the net assets acquired from the acquisitions in 2021 (amounts in millions):

	ScottTech
Cash	$	0.5
Accounts receivable		0.9
Inventory		0.3
Prepaid and other assets		0.1
Property and equipment, net		0.4
Goodwill		1.5
Total Assets	$	3.7
Accounts payable		(0.3	)
Accrued expenses		(0.1	)
Other current liabilities		(0.9	)
Total Liabilities	$	(1.3	)
Net Assets Acquired	$	2.4
Assets acquired net of cash	$	1.9

SCOTTTECH, LLC (“ScottTech”)

On March 1, 2021, the Company acquired all the assets of ScottTech, for a total purchase price of $2.4 million, paid out of available funds.

The estimated fair values of assets acquired, and liabilities assumed are provisional and are based on the information that was available as of the balance sheet date. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practical but no later than one year from the acquisition date.

The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

The following table summarizes the net assets acquired from the acquisitions in 2020 (amounts in millions):

	Flagler			Liftech			Peak			Hilo			Martin			Howell			Vantage			Total
Cash	$	0.4		$	—		$	3.0		$	2.1		$	—		$	—		$	—		$	5.5
Accounts receivable		15.1			4.4			4.6			5.4			1.0			5.3			3.6			39.4
Inventory		37.5			9.6			0.4			4.7			6.8			6.3			7.6			72.9
Prepaid and other assets		0.5			1.0			0.2			0.2			—			—			0.4			2.3
Rental fleet, net		47.8			4.7			—			7.5			6.3			12.4			15.9			94.6
Property and equipment, net		2.9			1.2			0.2			1.7			—			1.1			0.9			8.0
Intangible assets		14.6			1.2			5.8			2.4			1.5			—			—			25.5
Goodwill		5.8			1.5			0.7			3.2			0.8			3.2			0.5			15.7
Total Assets	$	124.6		$	23.6		$	14.9		$	27.2		$	16.4		$	28.3		$	28.9		$	263.9
Floor plan payable		(29.0	)		(3.5	)		—			(4.4	)		—			(0.8	)		(2.5	)		(40.2	)
Accounts payable		(14.0	)		(1.6	)		(1.5	)		(2.8	)		(0.2	)		(1.0	)		(1.5	)		(22.6	)
Accrued expenses		(4.1	)		—			(0.1	)		(0.3	)		(0.1	)		(0.1	)		(0.6	)		(5.3	)
Other current liabilities		—			(0.1	)		(3.9	)		(0.4	)		—			—			(0.1	)		(4.5	)
Other liabilities		(1.3	)		—			—			—			—			—			—			(1.3	)
Total Liabilities	$	(48.4	)	$	(5.2	)	$	(5.5	)	$	(7.9	)	$	(0.3	)	$	(1.9	)	$	(4.7	)	$	(73.9	)
Net Assets Acquired	$	76.2		$	18.4		$	9.4		$	19.3		$	16.1		$	26.4		$	24.2		$	190.0
Assets acquired net of cash	$	75.8		$	18.4		$	6.4		$	17.2		$	16.1		$	26.4		$	24.2		$	184.5

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Flagler

On February 14, 2020, in connection with the reverse recapitalization, the Company consummated its acquisition of Flagler for a total purchase price, net of cash, of $75.8 million, which was paid out of funds from the closing of the reverse recapitalization.

The acquisition has been accounted for as a purchase business combination. Under the purchase method of accounting, the assets acquired, and liabilities assumed have been recorded at the acquisition date at their respective fair values in our consolidated financial statements.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection. The fair value of inventory and property, plant, and equipment were estimated to approximate their respective acquisition date net book values. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses. 

Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $79.0 million.

Liftech

On February 14, 2020, in connection with the reverse recapitalization, the Company consummated its acquisition of Liftech for a total purchase price of $18.4 million, which was paid out of funds from the closing of the reverse recapitalization. 

The acquisition has been accounted for as a purchase business combination. Under the purchase method of accounting, the assets acquired, and liabilities assumed have been recorded at the acquisition date at their respective fair values in our consolidated financial statements.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection. The fair value of inventory and property, plant, and equipment were estimated to approximate their respective acquisition date net book values. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

 Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $15.2 million.   

PeakLogix

On June 12, 2020, the Company acquired all the assets of PeakLogix for a total purchase cash consideration of $5.7 million, which was paid out of available funds. Additional consideration includes $1.0 million in an unsecured one-year promissory note at 6% and earn-out payment of a minimum $2.0 million up to a $3.7 million to be paid out to former owners based on meeting certain financial targets throughout a 5-year earn-out period, collectively resulting in an estimated enterprise value of $6.4 million net of cash acquired. In connection with the purchase, PeakLogix LLC was created. See Note 10, Long-Term Debt and Note 15, Fair Value Instruments for further information.

The acquisition has been accounted for as a purchase business combination. Under the purchase method of accounting, the assets acquired, and liabilities assumed have been recorded at the acquisition date at their respective fair values in our consolidated financial statements.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection. The fair value of property, plant, and equipment were estimated to approximate their respective acquisition date net book values. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

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The following table summarizes the components of the purchase price at June 12, 2020:

Cash consideration paid *	$	5.7
Promissory Note		1.0
Present value of non-contingent earn-out liability		1.7
Earn-out liability		1.0
Total purchase price	$	9.4

* Includes $3.0 million cash acquired as part of the Business Combination

Hilo

On July 1, 2020, the Company acquired all the assets of Hilo for total purchase price, net of cash, of $17.2 million which was paid out of available funds, and potential earn out payments of an additional $1.0 million.

The acquisition has been accounted for as a purchase business combination. Under the purchase method of accounting, the assets acquired, and liabilities assumed have been recorded at the acquisition date at their respective fair values in our consolidated financial statements.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection. The fair value of inventory and property, plant, and equipment were estimated to approximate their respective acquisition date net book values. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $19.0 million.

The following table summarizes the component of the purchase price at July 1, 2020:

Cash consideration paid *	$	18.5
Earn-out liability		0.8
Total purchase price	$	19.3

* Includes $2.1 million cash acquired as part of the Business Combination

Martin Implement Sales, Inc. (“Martin”)

On September 1, 2020, the Company acquired all the assets of Martin for a total purchase price of $16.1 million, which included floorplan eligible new equipment inventories that was paid out of available funds.  

The acquisition has been accounted for as a purchase business combination. Under the purchase method of accounting, the assets acquired, and liabilities assumed have been recorded at the acquisition date at their respective fair values in our consolidated financial statements.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection. The fair value of inventory and property, plant, and equipment were estimated to approximate their respective acquisition date net book values. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practical but no later than one year from the acquisition date. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses. 

Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $10.6 million.

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Howell Tractor and Equipment, LLC (“Howell”)

On October 30, 2020, the Company acquired all the assets of Howell for a total cash consideration of $22.4 million. The Company issued 507,143 shares of its common stock, valued at $4.0 million, in connection with the purchase agreement, yielding a total purchase price of $26.4 million. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $23.1 million.

The estimated fair values of assets acquired, and liabilities assumed are provisional and are based on the information that was available as of the balance sheet date. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practical but no later than one year from the acquisition date.

The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

Vantage Equipment, LLC (“Vantage”)

On December 31, 2020, the Company acquired all the assets of Vantage for a total purchase price of $24.2 million.  Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be  $22.5 million.    

The estimated fair values of assets acquired, and liabilities assumed are provisional and are based on the information that was available as of the balance sheet date. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practical but no later than one year from the acquisition date.

The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

Pro forma financial information – 2021

The financial effect of the 2021 acquisition, was not material to the consolidated financial statements. As such, pro forma results of operations have not been presented.

Pro forma financial information – 2020

The Company completed the Flagler acquisition on February 14, 2020. Therefore, operating results of Flagler are included in the Company’s Consolidated Statement of Operations from February 14, 2020. Pursuant to ASC 805, pro forma disclosures should be reported whenever the year or interim period of the acquisition is presented. The pro forma information below gives effect to the Flagler acquisition as if the acquisition occurred on January 1, 2020.

	For the three months ended March 31, 2020
(amounts in millions)	The Company			Flagler			Total
Total revenues	$	180.5		$	25.8		$	206.3
Net loss	$	(17.0	)	$	(0.1	)	$	(17.1	)

The financial effect of the other acquisitions, individually and in the aggregate, was not material to the consolidated financial statements. As such, pro forma results of operations including other acquisitions have not been presented.

NOTE 17 — SEGMENTS

The Company has two reportable segments: Material Handling and Construction Equipment. The “Material Handling” segment has been previously reported as our “Industrial” segment. The Company’s segments are determined based on management structure, which is organized based on types of products sold, as described in the following paragraph. The operating results for each segment are reported separately to the Company’s Chief Executive Officer to make decisions regarding the allocation of resources, to assess the Company’s operating performance and to make strategic decisions.

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The Material Handling segment is principally engaged in operations related to the sale, service, and rental of lift trucks and other material handling equipment in Michigan, Illinois, Indiana, New York (including New York City), Virginia as well as the New England region (including Boston) of the United States. As of March 31, 2021, the Material Handling segment included the ScottTech acquisition and its related results for the quarter.

The Construction Equipment segment is principally engaged in operations related to the sale, service, and rental of construction equipment in Michigan, Illinois, New York (not including New York City), Florida and the New England region (including Boston) of the United States.

The Company retains various unallocated expense items at the general corporate level, which the Company refers to as “Corporate” in the table below. Corporate holds corporate debt and has minor activity all together. For the quarter ended March 31, 2021, Corporate incurred expenses associated with compensation (including shared based compensation) of our directors, corporate officers and certain members of our shared-services leadership team, consulting and legal fees related to acquisitions and capital raising activities, corporate governance and compliance related matters, certain corporate development related expenses and interest expense associated with original issue discounts and deferred financing cost related to previous capital raises, which were offset with income tax benefit. For the quarter ended March 31, 2020, Corporate incurred $7.6 million in debt extinguishment fees, $7.6 million in transaction costs and other expenses associated with the reverse recapitalization.

Additionally, as it relates to certain allocated corporate level expenses (e.g. audit, tax and other professional fees, interest, IT and HR related expenses, certain corporate marketing expenses, etc.), the Company evaluates and analyzes the appropriateness of expense allocations to each of its business units (and therefore segments) on an annual basis and makes necessary adjustments to these allocations at year-end. The Company uses metrics such as headcount, revenue and total assets, where appropriate, to develop these allocations.

In connection with the purchase of NITCO LLC in 2019, the Company expanded its full-service material handling and construction equipment dealer operations into New England market. Given that the sales of the business was more heavily-weighted to material handling versus construction and that NITCO’s reporting systems made it difficult for the construction business to be observed separate from the Material Handling operation, NITCO’s total financial results were historically presented within our Material Handling segment. On January 1, 2021, with the migration of the NITCO business to the Company’s main ERP system, the Company is now able to report the results for the Material Handling and Construction Equipment results within their respective segments for the NITCO business unit. As such, the Company has re-casted certain prior period segment-level results for the NITCO business unit to be consistent with the current period presentation for appropriate period-over-period comparability.

The following table presents the Company’s results of operations by reportable segment for the three months ended March 31, 2021 (amounts in millions):

	Material Handling		Construction Equipment			Corporate			Total
New and used equipment sales	$	57.4	$	66.4		$	—		$	123.8
Parts sales		15.2		26.2			—			41.4
Service revenue		22.6		16.1			—			38.7
Rental revenue		11.1		22.0			—			33.1
Rental equipment sales		0.5		31.3			—			31.8
Total revenue	$	106.8	$	162.0		$	—		$	268.8
Interest expense		2.2		3.1			0.4			5.7
Depreciation and amortization		4.6		16.8			—			21.4
Net income (loss)	$	1.3	$	(3.3	)		(3.7	)	$	(5.7	)

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The following table presents the Company’s results of operations by reportable segment for the three months ended March 31, 2020 (amounts in millions):

	Material Handling		Construction Equipment			Corporate			Total
New and used equipment sales	$	39.7	$	42.5		$	—		$	82.2
Parts sales		14.1		14.6			—			28.7
Service revenue		19.7		10.5			—			30.2
Rental revenue		10.6		14.6			—			25.2
Rental equipment sales		3.5		10.7			—			14.2
Total revenue	$	87.6	$	92.9		$	—		$	180.5
Interest expense		1.4		2.5			2.0			5.9
Depreciation and amortization		4.6		9.3			—			13.9
Net income (loss)	$	1.3	$	(2.2	)	$	(16.1	)	$	(17.0	)

The following table presents the Company’s identified assets by reportable segment  for the period ending March 31, 2021 and December 31, 2020 (amounts in millions):

	March 31, 2021		December 31, 2020
Segment assets:
Material Handling	$	220.7	$	221.5
Construction Equipment		522.6		523.4
Corporate		1.7		1.3
Total assets	$	745.0	$	746.2

NOTE 18 — SUBSEQUENT EVENTS

Warrant Exchange

On April 12, 2021, we exchanged all 8,668,746 of our outstanding warrants into shares of our common stock at an exchange ratio of 0.263 shares of common stock per warrant, for an aggregate issuance of approximately 2,279,874 shares of common stock in the exchange.

Also, on April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (the “SEC Statement”). The SEC Statement sets forth the conclusion of the SEC’s Office of the Chief Accountant that certain provisions included in the warrant agreements entered into by many special purpose acquisition companies require such warrants to be accounted for as liabilities measured at fair value, rather than as equity. The SEC Statement also directs issuers who have accounted for these warrants as equity to consider whether the impact of the change in accounting treatment is material and thus require a restatement of previously issued financial statements. In this Form 10-Q and in our financial statements prior to the exchange of warrants for shares of our common stock, we have classified our private placement warrants and public warrants as equity.

We evaluated the SEC Statement with respect to our accounting treatment of our warrants and have determined that such guidance would have resulted in the private placement warrants, and not the public warrants, being classified as liabilities on the balance sheet as of December 31, 2020 with the mark to market change in fair value reflected in the statement of operations.

Accordingly, we have performed an evaluation of the materiality of this matter in accordance with Staff Accounting Bulletin 99 (“SAB 99”). Notably, of the 8,668,746 warrants that were outstanding since the Business Combination was consummated on February 14, 2020 only 206,250 were private placement warrants subject to liability treatment based on the SEC Statement. To that end, based on our SAB 99 assessment, which included fair value analysis of the 206,250 private placement warrants, we determined that classifying the private placement warrants as liabilities on the balance sheet, versus equity, is immaterial to our historic financial statements and that a restatement is unnecessary.

Issuance of 5.625% Senior Secured Second Lien Notes due 2026

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On April 1, 2021,we completed a private offering of $315 million of our 5.625% Senior Secured Second Lien Notes due 2026 (the “Notes”). The Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended, pursuant to a purchase agreement among the Company, the guarantors party thereto (the “Guarantors”) and J.P. Morgan Securities LLC, as representative of the initial purchasers. The Notes are guaranteed by the Guarantors (the “Guarantees” and, together with the Notes, the “Securities”) on a second lien, senior secured basis. The Notes will also be guaranteed by each of our existing and future domestic subsidiaries that becomes a borrower or guarantor under our or the Guarantors’ indebtedness, including the Credit Agreements (as defined below), amended and restated concurrently with the closing of the Notes offering. The Notes and the Guarantees are secured, subject to certain exceptions and permitted liens, by second-priority liens on substantially all of our assets and the assets of the Guarantors that secure on a first-priority basis all of the indebtedness under our ABL Facility (as defined below) and the Floor Plan Facility (as defined below) and certain hedging and cash management obligations, including, but not limited to, equipment, fixtures, inventory, intangibles and capital stock of our restricted subsidiaries now owned or acquired in the future by us or the Guarantors.

The Notes were issued pursuant to an indenture dated April 1, 2021 (the “Indenture”), among us, the Guarantors and Wilmington Trust, National Association, as trustee and as collateral agent.  The Notes will bear interest at the rate of 5.625% per annum and will mature on April 15, 2026. Interest on the Notes is payable in cash on April 15 and October 15 of each year, beginning on October 15, 2021.

The Company used the net proceeds from the sale of the Notes and the new borrowings under the ABL Facility and the Floor Plan Facility, to repay its $147.3 million second lien term loan facility, to repay and refinance a portion of the ABL Facility and the Floor Plan Facility and to pay related fees and expenses.

Amended and Restated Credit Arrangements

On April 1, 2021, in connection with the offering of the Notes, we entered into:

(i)  a Sixth Amended and Restated ABL First Lien Credit Agreement, dated April 1, 2021, among us, our subsidiaries, JPMorgan Chase Bank, N.A., as Administrative Agent and the lenders who are parties to the agreement (the “ABL Credit Agreement” and the facility thereunder, the “ABL Facility”); and

(ii)  a Sixth Amended and Restated Floor Plan First Lien Credit Agreement among us, certain of our subsidiaries, JPMorgan Chase Bank, N.A., as Administrative Agent and the lenders who are parties to the agreement (the “Floor Plan Credit Agreement” and the facility thereunder, the “Floor Plan Facility”).

The ABL Facility is an asset-based revolving loan facility that provides for borrowings of up to the lesser of $350 million or the borrowing base, in each case, less outstanding loans and letters of credit. The ABL Facility has a maturity date of the earlier of (a) April 1, 2026, or (b) December 1, 2025 if the Notes remain outstanding on December 1, 2025.

The Floor Plan Facility is an asset-based revolving loan facility related to the floor plan equipment that provides for borrowings of up to the lesser of $40 million or the borrowing base. The Floor Plan Facility has an expiration date of the earlier of (a) April 1, 2026, or (b) December 1, 2025 if the Notes remain outstanding on December 1, 2025.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our interim unaudited consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report, and the audited consolidated financial statements and related notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. This discussion contains “forward-looking statements” reflecting Alta’s current expectations, estimates and assumptions concerning events and financial trends that may affect its future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward- looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. Alta assumes no obligation to update any of these forward-looking statements.

Recent Developments

COVID-19

The economic volatility and disruptions caused by the COVID-19 pandemic caused in adverse effect on our business and our financial results in 2020. Our business activity levels, with the exception of rental utilization in certain geographies, stabilized in the third quarter to near pre-COVID levels, and since that time have generally held at or, in certain geographies, went beyond pre-COVID levels. Currently, our business is experiencing “recovery-related” supply-chain constraints that have affected some of our OEM equipment suppliers. Specifically, lead-times from OEMs for new equipment has been pushed beyond historic norms. While we believe in our diversified cash flow streams, the breadth of our product portfolio, geographic reach and our ability to source used equipment will help mitigate the impact of the current supply-chain disruptions we are facing, an extended period or worsening of the supply chain issues our OEM equipment providers are experiencing could impact our financial results adversely. Although our business could be subject to substantial disruption from further COVID-19 outbreaks or the outbreak of additional pandemics, based on current business levels, we believe the worst of the pandemic’s effect on our business to be behind us.

COVID-19 Response

Starting in mid-March 2020 we took and are continuing certain operational actions to address the pandemic and the directives of governmental authorities in the state and local geographic areas in which we have operations. These actions included those described below:

Remote Work Arrangements

In late March 2020, in compliance with the directives of government authorities in the state and local geographic areas in which we have operations, we adjusted our operations to permit virtually all of our sales and back office employees to work remotely. In late second quarter of 2020, we phased in a return to more normalize working conditions as state or local governments began lifting restrictions. Despite the lifting of certain restrictions, Alta continues to adhere to government issued guidelines and promote a clean and safe environment in all of its branch locations. Where and when applicable, certain non-revenue producing business functions have been able to continue to operate via remote work arrangements which have been designed to allow for the continued operation of our business while allowing employees to work virtually.

Safety Protocols

We have established new safety protocols intended to help protect the health and safety of our workforce as many of them have continued to provide services to our customers in the field or within our branch infrastructure during the COVID-19 pandemic. The protocols comport with state and local guidelines and include, requiring face mask use in our facilities, providing additional personal protective equipment when job requirements do not permit following social distancing guidelines and rigorous facility cleaning protocols.

Liquidity

Although we, and certain segments of our customer base, were deemed an “essential” business in all of our geographies, many of our customers were drastically impacted, and in certain instances continue to be impacted, by COVID-19. This led to an adverse effect on the Company’s financial performance specifically in the last three quarters of 2020, with the second and third quarters of 2020 realizing the most significant impact.

While our operations in the first quarter of 2021, in general, are performing at pre-COVID levels, we will continue to monitor key performance metrics such as labor hour demand and rental utilization and, in-turn, rationalize our skilled labor and rental fleet levels to match expected demand for the remainder of 2021 and through the end of COVID-19 pandemic.

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We believe that the acquisitions and investments made in the calendar year 2020 and in the first quarter of 2021, expanded our service capabilities, geographic reach, end market diversification and product offerings; each of which will ultimately strengthen our resiliency to economic shocks and will help to preserve liquidity over the long term.

We believe we have sufficient liquidity to fund our operations as we work through the COVID-19 recovery and beyond. Our Board of Directors and management team continues to monitor and evaluate the continuing impacts of the COVID-19 pandemic on our business and operations and to the extent business conditions regress from current levels we may take additional actions to further reduce costs and/or seek additional financing to bolster our liquidity position.

Exchange of Warrants

On April 12, 2021, we exchanged all 8,668,746 of our outstanding warrants into shares of our common stock at an exchange ratio of 0.263 shares of common stock per warrant, for an aggregate issuance of approximately 2,279,874 shares of common stock in the exchange.  Also, on April 12, 2021, the Acting Chief Accountant and Acting Director of the Division of Corporation Finance of the SEC released the Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (the “SEC Statement”). The SEC Statement sets forth the conclusion of the SEC’s Office of the Chief Accountant that certain provisions included in warrant agreements entered into by many special purpose acquisition companies require such warrants to be accounted for as liabilities measured at fair value, rather than as equity securities, with changes in fair value during each financial reporting period reported in earnings. Prior to the exchange, we have previously classified our private placement warrants and public warrants as equity.

We evaluated the SEC Statement with respect to our accounting treatment of our warrants and have determined that such guidance would have resulted in the private placement warrants, and not the public warrants, being classified as liabilities on the balance sheet as of December 31, 2020 with the mark to market change in fair value reflected in the statement of operations.

Accordingly, we have performed an evaluation of the materiality of this matter in accordance with Staff Accounting Bulletin 99 (“SAB 99”). Notably, of the 8,668,746 warrants that were outstanding since the Business Combination was consummated on February 14, 2020 only 206,250 were private placement warrants subject to liability treatment based on the SEC Statement. To that end, based on our SAB 99 assessment, which included fair value analysis of the 206,250 private placement warrants, we determined that classifying the private placement warrants as liabilities on the balance sheet, versus equity, is immaterial to our historic financial statements and that a restatement is unnecessary.

Issuance of 5.625% Senior Secured Second Lien Notes due 2026

On April 1, 2021, we completed a private offering of $315 million of our 5.625% Senior Secured Second Lien Notes due 2026 (the “Notes”). The Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended, pursuant to a purchase agreement among the Company, the guarantors party thereto (the “Guarantors”) and J.P. Morgan Securities LLC, as representative of the initial purchasers. The Notes are guaranteed by the Guarantors (the “Guarantees” and, together with the Notes, the “Securities”) on a second lien, senior secured basis. The Notes will also be guaranteed by each of our existing and future domestic subsidiaries that becomes a borrower or guarantor under our or the Guarantors’ indebtedness, including the Credit Agreements (as defined below), amended and restated concurrently with the closing of the Notes offering. The Notes and the Guarantees are secured, subject to certain exceptions and permitted liens, by second-priority liens on substantially all of our assets and the assets of the Guarantors that secure on a first-priority basis all of the indebtedness under our ABL Facility (as defined below) and the Floor Plan Facility (as defined below) and certain hedging and cash management obligations, including, but not limited to, equipment, fixtures, inventory, intangibles and capital stock of our restricted subsidiaries now owned or acquired in the future by us or the Guarantors.

The Notes were issued pursuant to an indenture dated April 1, 2021 (the “Indenture”), among us, the Guarantors and Wilmington Trust, National Association, as trustee and as collateral agent.  The Notes will bear interest at the rate of 5.625% per annum and will mature on April 15, 2026. Interest on the Notes is payable in cash on April 15 and October 15 of each year, beginning on October 15, 2021.

Amended and Restated Credit Arrangements

On April 1, 2021, in connection with the offering of the Notes, we entered into:

(i)  a Sixth Amended and Restated ABL First Lien Credit Agreement, dated April 1, 2021, among us, our subsidiaries, JPMorgan Chase Bank, N.A., as Administrative Agent and the lenders who are parties to the agreement (the “ABL Credit Agreement” and the facility thereunder, the “ABL Facility”); and

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(ii)  a Sixth Amended and Restated Floor Plan First Lien Credit Agreement among us, certain of our subsidiaries, JPMorgan Chase Bank, N.A., as Administrative Agent and the lenders who are parties to the agreement (the “Floor Plan Credit Agreement” and the facility thereunder, the “Floor Plan Facility”).

The ABL Facility is an asset-based revolving loan facility that provides for borrowings of up to the lesser of $350 million or the borrowing base, in each case, less outstanding loans and letters of credit. The ABL Facility has a maturity date of the earlier of (a) April 1, 2026, or (b) December 1, 2025 if the Notes remain outstanding on December 1, 2025.

The Floor Plan Facility is an asset-based revolving loan facility related to the floor plan equipment that provides for borrowings of up to $40 million. The Floor Plan Facility has an expiration date of the earlier of (a) April 1, 2026, or (b) December 1, 2025 if the Notes remain outstanding on December 1, 2025.

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 indented to guaranty 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, 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 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; and

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

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, 2020 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.

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Business Description

The Company owns and operates one of the largest integrated equipment dealership platforms in the U.S. Through our branch network, we sell, rent, and provide parts and service support for several categories of specialized equipment, including lift trucks and aerial work platforms, cranes, earthmoving equipment and other Material Handling and Construction Equipment. We engage in five principal business activities in these equipment categories:

(i) new equipment sales;

(ii) used equipment sales;

(iii) parts sales;

(iv) repair and maintenance services; and

(v) equipment rentals.

We have operated as an equipment dealership for over 35 years and have developed a branch network that includes 55 total locations in Michigan, Illinois, Indiana, Massachusetts, Maine, Connecticut, New Hampshire, Vermont, New York, Virginia, and Florida. We offer our customers a one-stop-shop for most of their equipment needs by providing sales, parts, service, and rental functions under one roof. More recently, with the acquisition of PeakLogix, we have entered the warehouse design, automated equipment installation and system integration sector, which we believe has natural synergies with our Material Handling business and positions us to take advantage of the macroeconomic trend in warehousing and logistics, and e-commerce.

Within our territories, we are the exclusive distributor of new equipment and replacement parts on behalf of our OEM partners. We enjoy long-standing relationships with leading Material Handling and Construction Equipment OEMs, including Hyster-Yale, Volvo, and JCB, among more than 30 others. We are consistently recognized by OEMs as a top dealership partner and have been identified as a nationally recognized Hyster-Yale dealer and multi-year recipient of the Volvo Dealer of the Year award.

Business Segments

We have two reportable segments: Material Handling and Construction Equipment. Our “Material Handling” segment has been previously reported as our “Industrial” segment. Our segments are determined based on management structure, which is organized based on types of products sold and customer end markets, as described in the following paragraph. The operating results for each segment are reported separately to our Chief Executive Officer (our chief operating decision maker) to make decisions regarding the allocation of resources, to assess our operating performance and to make strategic decisions.

The Material Handling segment is principally engaged in operations related to the sale, service, and rental of lift trucks in Michigan, Illinois, Indiana, New York, Virginia and throughout the New England states. The Material Handling segment is made up of the legal entities Alta Industrial Equipment Michigan, LLC, Alta Industrial Equipment Company, LLC, NITCO, LLC, PeakLogix, LLC and Alta Industrial Equipment New York, LLC. The Construction Equipment segment is principally engaged in operations related to the sale, service, and rental of construction equipment in Michigan, Indiana, Illinois, New York, Florida and throughout the New England States. The Construction Equipment segment is made up of the legal entities Alta Construction Equipment, LLC, Alta Construction Equipment Illinois, LLC, Alta Heavy Equipment Services, LLC, Alta Construction Equipment Florida, LLC and Alta Construction Equipment New York, LLC.

Alta Equipment Group Inc., Alta Equipment Holdings, Inc. and Alta Enterprises, LLC (individually or as sometimes collectively referred to as “Corporate”) are the holding companies for the legal operating entities noted above that make up each segment. In addition to being a holding company, Alta Enterprises, LLC also holds compensation (including shared based compensation) of our directors, corporate officers and certain members of our shared-services leadership team, consulting and legal fees related to acquisitions and capital raising activities, corporate governance and compliance related matters, certain corporate development related expenses and interest expense associated with original issue discounts and deferred financing cost related to previous capital raises and the Company’s income tax provision.

In connection with the purchase of NITCO LLC in 2019, the Company expanded its full-service material handling and construction equipment dealer operations into New England market. Given that the sales of the business was more heavily-weighted to material handling versus construction and that NITCO’s reporting systems made it difficult for the construction business to be observed separate from the material handling operation, NITCO’s total financial results were historically presented within our Material Handling segment. On January 1, 2021, with the migration of the NITCO business to the Company’s main ERP system, the Company is now able to report the results for the Material Handling and Construction Equipment results within their respective segments for the NITCO business unit. As such, the Company has re-casted certain prior period segment-level results for the NITCO business unit to be consistent with the current period presentation for appropriate period-over-period comparability.

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Acquisitions

SCOTTECH, LLC (“ScottTech”)

On March 1, 2021, the Company acquired the assets of ScottTech, a Material Handling, warehouse control software, and turn-key warehouse system integration services provider, for a total purchase price of $2.4 million. The acquisition has natural synergies with the Company’s prior year acquisition of PeakLogix and further bolsters our capabilities with customers in the warehousing and logistics, distribution and e-commerce end-markets.

Vantage Equipment, LLC

On December 31, 2020, the Company acquired the assets of Vantage, a construction equipment dealer in Upstate New York, for a total purchase price of $24.2 million. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the total enterprise value at close was $22.5 million. This acquisition further diversifies our customer base and will complement our Liftech business which serves the Upstate New York Material Handling market.

Howell Tractor and Equipment, LLC

On October 30, 2020, the Company acquired the assets of Howell, a construction equipment and crane dealer in the greater Chicagoland area, for cash consideration of $22.4 million. Additionally, the Company issued 507,143 shares of its common stock in connection with the purchase agreement, valued at $4.0 million, yielding a total purchase price of approximately $26.4 million. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the total enterprise value at close was $23.1 million. This acquisition expands our presence in the Northern Illinois and Northwest Indiana markets adding a best-in-class product to our portfolio and additional service offerings.

Martin Implement Sales, Inc.

On September 1, 2020, the Company acquired the assets of Martin, a compact equipment dealer in the greater Chicagoland area, for a total purchase price of $16.1 million. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the total enterprise value at close was $10.6 million. This acquisition enhances our position in the Illinois construction market, broadens our product portfolio in the compact segment of the construction equipment market and adds valuable service capabilities in the region.

Hilo Equipment & Services

On July 1, 2020, the Company acquired the assets of Hilo, a Material Handling equipment dealer with three branches in the New York City metro area, for a total purchase price, net of cash, of $17.2 million, which includes potential earn-out payments of $1.0 million tied to post closing performance of the Hilo business. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the total enterprise value at close was $19.0 million. The acquisition aligns with our growth strategy by expanding our distribution footprint with a major OEM, giving us a strategic presence in yet another densely populated major market and strengthens our overall coverage of the Northeastern United States.

PeakLogix, Inc.

On June 12, 2020, the Company acquired the assets of PeakLogix, a warehouse design, automated equipment installation and systems integrator, for a total purchase price, net of cash, of $6.4 million, which includes $1.0 million in an unsecured one-year promissory note at 6% and earn-out payment of a minimum $2.0 million up to $3.7 million to be paid out to former owners based on meeting certain financial targets throughout the 5-year earn-out period. The acquisition represents the Company’s entrance into the automated equipment installation and system integration sector, which we believe has natural synergies with our Material Handling business and positions us to take advantage of the macroeconomic trend in warehousing and logistics, and e-commerce.

Liftech Equipment Companies, Inc.

On February 14, 2020, the Company acquired the assets of Liftech, a Material Handling equipment dealer in Upstate New York, for a total purchase price of $18.4 million, which was paid out of funds from closing of the reverse recapitalization. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the total enterprise value at close was $15.2 million. The acquisition primarily expands our materials handling segment into the Upstate New York market, scales our relationship with a major OEM and provides an opportunity for Alta to drive market share with allied products in the region.

FlaglerCE Holdings, LLC

On February 14, 2020, the Company acquired the assets of Flagler, a construction equipment dealer in Florida, for a total purchase price, net of cash, of $75.8 million, which was paid out of funds from the closing of the reverse recapitalization. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the total enterprise value at close was $79.0 million. The acquisition expands our heavy equipment segment into the Florida construction market, scales our

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relationship with a major OEM and provides an opportunity for us to deploy our aftermarket strategies in a robust and growing construction market in the southeastern United States.

Financial Statement Components

Our revenues and related costs are primarily derived from sale or rental of equipment and related activities, and consist of:

New Equipment Sales. We sell new heavy construction and Material Handling equipment and are a leading regional distributor for over 30 nationally recognized equipment manufacturers, including Hyster, Yale, Volvo, JCB, New Holland, and Kubota. Our new equipment sales operation is a primary source of new customers for the rental, parts and services business. The majority of our new equipment sales is predicated on exclusive distribution agreements we have with best-in-class OEMs. The sale of new equipment to customers, while profitable, acts as a means of generating equipment field population and activity for our higher-margin aftermarket revenue streams, specifically service and parts. We also sell tangential products related to our Material Handling equipment offerings and, with the acquisition of PeakLogix and ScottTech, we provide warehouse design, automated equipment installation, system integration and warehouse controls software.

Used Equipment Sales. We sell used equipment which is typically equipment that has been taken in on trade from a customer that is purchasing new equipment, equipment coming off a third-party or financing lease arrangement, or, as is primarily the case in our Material Handling segment, equipment that has been designated for disposal and has been transferred to our used inventory from our rental fleet. Used equipment sales made in our territories, like new equipment sales, generate parts and services business for the Company, as well.

Parts Sales. We sell replacement parts to customers and supply parts to our own rental fleet. Our in-house parts inventory is extensive such that we are able to provide timely service support to our customers. The majority of our parts inventory is made up of OEM replacement parts for those OEM’s with which we have exclusive dealership agreements to sell new equipment.

Service Support. We provide maintenance and repair services for customer-owned equipment and we maintain our own rental fleet. In addition to repair and maintenance on an as needed or scheduled basis, we provide ongoing preventative maintenance services and warranty repairs for our customers. We have committed substantial resources to training our technical service employees and have a full-scale service infrastructure that we believe differentiates us from our competitors. Approximately half of our employees are skilled service technicians. Training, paid time off, and other non-billable costs of maintaining our expert technicians flow through this department in addition to the direct customer-billable labor.

Equipment Rentals. We rent heavy construction, aerial, material handling, and compact equipment to our customers on a daily, weekly and monthly basis. Our rental fleet, which is well-maintained has an original acquisition cost (which we define as the cost originally paid to manufacturers plus any capitalized costs) of $408.9 million. The original acquisition cost of our rental fleet excludes the value of assets associated with our guaranteed purchase obligations, which are assets that are not in our day-to-day operational control. In addition to being a core business, our rental business also creates cross-selling opportunities for us in our sales and product support activities.

Rental Equipment Sales. We also sell rental equipment from our rental fleet. Customers often have options to purchase equipment after or before rental agreements have matured. Rental equipment sales, like new and used equipment sales, generate customer-based equipment field population within our territories and ultimately yield high-margin parts and services revenue for us.

General and Administrative Expenses. These costs are comprised of three main components: personnel costs, operational costs, and occupancy costs. Personnel costs are comprised of hourly and salaried wages for administrative employees, including incentive compensation, and employee benefits, including medical benefits. Operational costs include marketing activities, costs associated with deploying and leasing our service vehicle fleet, personal property related insurance, information technology, office and shop supplies, general corporate costs, depreciation on non-sales and rental related assets, and intangible amortization. Occupancy costs are comprised of all expenses related to office and administrative working space, including rent, utilities, property taxes, and building insurance.

Other Income (Expense). This section of the financial statements is mostly comprised of interest expense and other miscellaneous items that result in income or expense. Interest expense is mostly driven by our OEM floorplan financing arrangements, a working capital line of credit, and a second lien term loan. Also included in this section of the financials are non-recurring costs, in particular expenses associated with the extinguishment of debt.

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Results of Operations

Three months ended March 31, 2021 compared to three months ended March 31, 2020

Consolidated Results

	Three months ended March 31,						Increase (Decrease)
	2021			2020			2021 versus 2020
Revenues:
New and used equipment sales	$	123.8		$	82.2		$	41.6		50.6	%
Parts sales		41.4			28.7			12.7		44.3	%
Service revenue		38.7			30.2			8.5		28.1	%
Rental revenue		33.1			25.2			7.9		31.3	%
Rental equipment sales		31.8			14.2			17.6		123.9	%
Net revenue	$	268.8		$	180.5		$	88.3		48.9	%
Cost of revenues:
New and used equipment sales		106.5			72.4			34.1		47.1	%
Parts sales		28.7			19.6			9.1		46.4	%
Service revenue		14.5			11.4			3.1		27.2	%
Rental revenue		5.5			4.9			0.6		12.2	%
Rental depreciation and amortization		19.4			12.9			6.5		50.4	%
Rental equipment sales		26.9			12.2			14.7		120.5	%
Cost of revenue	$	201.5		$	133.4		$	68.1		51.0	%
Gross profit	$	67.3		$	47.1		$	20.2		42.9	%
General and administrative expenses		64.9			51.1			13.8		27.0	%
Depreciation and amortization expense		2.0			1.0			1.0		100.0	%
Total general and administrative expenses		66.9			52.1		$	14.8		28.4	%
Income (loss) from operations	$	0.4		$	(5.0	)	$	5.4		(108.0	)%
Other income (expense)
Interest expense, floor plan payable – new equipment		(0.5	)		(0.7	)		0.2		(28.6	)%
Interest expense – other		(5.2	)		(5.2	)		—		—
Other income		0.1			0.4			(0.3	)	(75.0	)%
Loss on extinguishment of debt		—			(7.6	)		7.6		(100.0	)%
Total other income (expense)	$	(5.6	)	$	(13.1	)	$	7.5		(57.3	)%
Loss before taxes	$	(5.2	)	$	(18.1	)		12.9		(71.3	)%
Income tax provision (benefit)		0.5			(1.1	)		1.6		(145.5	)%
Net loss	$	(5.7	)	$	(17.0	)	$	11.3		(66.5	)%

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	Percent of Revenue
Consolidated	Three months ended March 31,
	2021			2020
Revenues:
New and used equipment sales		46.1	%		45.5	%
Parts sales		15.4	%		15.9	%
Service revenue		14.4	%		16.7	%
Rental revenue		12.3	%		14.0	%
Rental equipment sales		11.8	%		7.9	%
Net revenue		100.0	%		100.0	%
Cost of revenues:
New and used equipment sales		39.6	%		40.1	%
Parts sales		10.7	%		10.9	%
Service revenue		5.4	%		6.3	%
Rental revenue		2.0	%		2.7	%
Rental depreciation and amortization		7.2	%		7.1	%
Rental equipment sales		10.0	%		6.8	%
Cost of revenue		75.0	%		73.9	%
Gross profit		25.0	%		26.1	%

Revenues:    Consolidated revenues increased by $88.3 million, or 48.9%, to $268.8 million for the three months ended March 31, 2021 as compared to the same period last year. The primary drivers of this period over period increase were the favorable full period impact from the acquisitions completed in 2020. All revenue streams increased comparatively as a result of these eight acquisitions. If excluding the effects of acquisition by observing the consolidated results on an organic basis, new and used equipment sales were largely flat, exhibiting a decrease of 0.2% over the same period last year as a result of extended lead times from manufacturers of new equipment. Organic parts and service revenues increased by 1.4% over the same period last year as field population growth contributed further to growing aftermarket revenues. Rental revenue exhibited growth on an organic basis of 0.9% period over period as physical utilization trends rebound and rental rates increase. Lastly, and in following with the pattern from the fourth quarter of 2020, rental equipment sales increased organically by 54.5% as we actively manage our fleet mix, and our rent-to-sell model enables us to meet customer demand for lightly used equipment while lead times for new equipment were extended in the first quarter of 2021.

	Three months ended March 31,
	2021			2020			Change
Consolidated	GP%			GP%			GP%
New and used equipment sales		14.0	%		11.9	%		2.1	%
Parts sales		30.7	%		31.7	%		(1.0	)%
Service revenue		62.5	%		62.3	%		0.3	%
Rental revenue		24.8	%		29.4	%		(4.6	)%
Rental equipment sales		15.4	%		14.1	%		1.3	%
Consolidated gross profit		25.0	%		26.1	%		(1.1	)%

Gross profit (GP):

The consolidated gross profit for the three months ended March 31, 2021 was 25.0%, a 1.1% decline from the 26.1% for the same period in 2020. New and used equipment sales, as well as rental equipment sales, margins improved slightly in the first quarter compared to the same time last year as retail pricing levels improved, especially for used equipment. While we realized a decline in rental revenue gross margin in the first quarter of 2021, it should be noted that this is a result of an increase in rental depreciation expense, non-cash, contained within cost of revenues, as a result of a higher mix of our rental revenues coming from our Construction segment in the first quarter compared to the same time last year, which was the main driver in the overall depressed margin. Additionally, parts sales gross margins decreased as a whole, in part due to the relative segment sales mix while service gross margins improved modestly.

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General and Administrative expenses:    Consolidated general and administrative (G&A) expenses increased by $14.8 million to $66.9 million for the three months ended March 31, 2021 compared to the same period last year. This increase was mainly driven by the full period impact from our 2020 acquisitionsas well as an increase in certain corporate-level administrative and compensation related expenses, many of which are incremental expenses associated with our status as a public company.

Other Income (expense):    Consolidated other expense for the three months ended March 31, 2021 was $(5.6) million compared to $(13.1) million for the same period in 2020. This change was mainly driven by the $7.6 million loss on debt extinguishment that occurred in the previous year.

Provision for income taxes:    Income tax provision for the three months ended March 31, 2021 was $0.5 million compared to the income tax benefit of $1.1 for the three months ended March 31, 2020. This change is due to establishing valuation allowance within the period against the deferred tax assets associated with losses for which we may not realize a related tax benefit in 2021.

Material Handling Results:

	Three months ended March 31,						Increase (Decrease)
	2021			2020			2021 versus 2020
Revenues:
New and used equipment sales	$	57.4		$	39.7		$	17.7		44.6	%
Parts sales		15.2		$	14.1			1.1		7.8	%
Service revenue		22.6		$	19.7			2.9		14.7	%
Rental revenue		11.1		$	10.6			0.5		4.7	%
Rental equipment sales		0.5		$	3.5			(3.0	)	(85.7	)%
Net revenue	$	106.8		$	87.6		$	19.2		21.9	%
Cost of revenues:
New and used equipment sales		47.0			34.1			12.9		37.8	%
Parts sales		9.9			8.8			1.1		12.5	%
Service revenue		8.1			7.2			0.9		12.5	%
Rental revenue		1.7			1.9			(0.2	)	(10.5	)%
Rental depreciation and amortization		3.6			3.9			(0.3	)	(7.7	)%
Rental equipment sales		0.4			3.0			(2.6	)	(86.7	)%
Cost of revenue	$	70.7		$	58.9		$	11.8		20.0	%
Gross profit	$	36.1		$	28.7		$	7.4		25.8	%
General and administrative expenses		32.4			25.4			7.0		27.6	%
Depreciation and amortization expense		1.0			0.7			0.3		42.9	%
Total general and administrative expenses	$	33.4		$	26.1		$	7.3		28.0	%
Income from operations	$	2.7		$	2.6		$	0.1		3.8	%
Other income (expense)
Interest expense, floor plan payable – new equipment		(0.2	)		(0.3	)		0.1		(33.3	)%
Interest expense – other		(2.0	)		(1.1	)		(0.9	)	81.8	%
Other income		0.8			0.1			0.7		700.0	%
Total other income (expense)	$	(1.4	)	$	(1.3	)	$	(0.1	)	7.7	%
Net income	$	1.3		$	1.3		$	(0.0	)	(0.0	)%

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	Percent of Revenue
Material Handling	Three months ended March 31,
	2021			2020
Revenues:
New and used equipment sales		53.7	%		45.3	%
Parts sales		14.2	%		16.1	%
Service revenue		21.2	%		22.5	%
Rental revenue		10.4	%		12.1	%
Rental equipment sales		0.5	%		4.0	%
Net revenue		100.0	%		100.0	%
Cost of revenues:
New and used equipment sales		44.0	%		38.9	%
Parts sales		9.3	%		10.0	%
Service revenue		7.6	%		8.2	%
Rental revenue		1.6	%		2.2	%
Rental depreciation and amortization		3.4	%		4.5	%
Rental equipment sales		0.4	%		3.4	%
Cost of revenue		66.2	%		67.2	%
Gross profit		33.8	%		32.8	%

Revenues:    Material Handling segment revenues increased by 21.9% to $106.8 million for the three months ended March 31, 2021 as compared to the same period last year. Overall, revenue streams were up as a result of the Liftech, PeakLogix and Hilo acquisitions that closed in February 2020, June 2020 and July 2020, respectively. While continuing to improve, the Material Handling segment has been slower to recover from the impact of the COVID-19 pandemic versus the Construction segment.  On an organic basis, new and used equipment sales decreased 3.5%, and the aftermarket parts and service revenues are 6.3% off when comparing to the same period last year. Rental revenue remains depressed on an organic basis, as comparatively it has declined by 14.4% from the same period last year.

Gross profit (GP):

	Three months ended March 31,
	2021			2020			Change
Material Handling	GP%			GP%			GP%
New and used equipment sales		18.1	%		14.1	%		4.0	%
Parts sales		34.9	%		37.6	%		(2.7	)%
Service revenue		64.2	%		63.5	%		0.7	%
Rental revenue		52.3	%		45.3	%		7.0	%
Rental equipment sales		20.0	%		14.3	%		5.7	%
Segment gross profit		33.8	%		32.8	%		1.0	%

Material Handling gross profit for the three months ended March 31, 2021 increased 1.0% to 33.8% compared to the same period in 2020. We realized improved used equipment gross margin in the first quarter of 2021 when compared to the same period in 2020 as retail pricing for used equipment has strengthened. New equipment sales gross margin realized modest increase due to favorable impact from PeakLogix to the sales mix in the three months ended March 31, 2021. We also realized increase in rental revenue gross margin in the first quarter of 2021 as cost of revenues decreased, mainly due to our updated depreciation method as described in our Note 2 to the Consolidated Financial Statements. Additionally, service revenue gross profit margin improved by 0.7% while the parts sales gross profit margins declined by 2.7% in the first quarter of 2021 compared to the same period in 2020. Parts margin declines can be attributed to a smaller volume of in-store counter sales, as customers have elected other methods of parts procurement rather than in-person walk-up business, which lessens our ability for to be more consultative with the customer and limits add-on sales opportunities.  

General and administrative expenses:   Material Handling general and administrative (G&A) expenses increased by 7.3 million to $33.4 million for the three months ended March 31, 2021 as compared to the same period last year. This change was mainly driven by the higher employee related and general expenses attributable to the Material Handling segment acquisitions Liftech, PeakLogix and Hilo.

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Other Income (expense):    Material Handling other expense increased by $0.1to ($1.4) million for the three months ended March 31, 2021 as compared to the same period last year. The majority of the quarter-over-quarter increase was the result of the addition of debt related to the Liftech, PeakLogix and Hiloacquisitions, as their assets were financed via our line of credit and floorplan financing facilities.

Construction Equipment Results

	Three months ended March 31,						Increase (Decrease)
	2021			2020			2021 versus 2020
Revenues:
New and used equipment sales	$	66.4		$	42.5		$	23.9		56.2	%
Parts sales		26.2			14.6			11.6		79.5	%
Service revenue		16.1			10.5			5.6		53.3	%
Rental revenue		22.0			14.6			7.4		50.7	%
Rental equipment sales		31.3			10.7			20.6		192.5	%
Net revenue	$	162.0		$	92.9		$	69.1		74.4	%
Cost of revenues:
New and used equipment sales		59.5			38.4			21.1		54.9	%
Parts sales		18.8			10.7			8.1		75.7	%
Service revenue		6.4			4.2			2.2		52.4	%
Rental revenue		3.8			3.0			0.8		26.7	%
Rental depreciation and amortization		15.8			9.0			6.8		75.6	%
Rental equipment sales		26.5			9.2			17.3		188.0	%
Cost of revenue	$	130.8		$	74.5		$	56.3		75.6	%
Gross profit	$	31.2		$	18.4		$	12.8		69.6	%
General and administrative expenses		29.7			18.0			11.7		65.0	%
Depreciation and amortization expense		1.0			0.3			0.7		233.3	%
Total general and administrative expenses	$	30.7		$	18.3		$	12.4		67.8	%
Income from operations	$	0.5		$	0.1		$	0.4		400.0	%
Other income (expense)
Interest expense, floor plan payable – new equipment		(0.3	)		(0.5	)		0.2		(40.0	)%
Interest expense – other		(2.8	)		(2.0	)		(0.8	)	40.0	%
Other (expense) income		(0.7	)		0.2			(0.9	)	(450.0	)%
Total other income (expense)	$	(3.8	)	$	(2.3	)	$	(1.5	)	65.2	%
Net loss	$	(3.3	)	$	(2.2	)	$	(1.1	)	50.0	%

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	Percent of Revenue
Construction Equipment	Three months ended March 31,
	2021			2020
Revenues:
New and used equipment sales		41.0	%		45.7	%
Parts sales		16.2	%		15.7	%
Service revenue		9.9	%		11.3	%
Rental revenue		13.6	%		15.7	%
Rental equipment sales		19.3	%		11.5	%
Net revenue		100.0	%		100.0	%
Cost of revenues:
New and used equipment sales		36.7	%		41.3	%
Parts sales		11.6	%		11.5	%
Service revenue		4.0	%		4.5	%
Rental revenue		2.3	%		3.2	%
Rental depreciation and amortization		9.8	%		9.7	%
Rental equipment sales		16.4	%		9.9	%
Cost of revenue		80.7	%		80.2	%
Gross profit		19.3	%		19.8	%

Revenues:    Construction Equipment segment revenues increased by 74.4% to $162.0 million for the three months ended March 31, 2021 as compared to the same period last year. This increase was mainly attributable to the full period results from the Flagler, Martin, Howell and Vantage acquisitions that occurred throughout 2020. The Construction Equipment segment, which was less operationally impacted by COVID-19 versus our Material Handling segment, has also been quicker to recover from the impact of the COVID-19 pandemic than our Material Handling segment. On an organic basis, new and used equipment sales increased 3.8%, and the aftermarket parts and service revenues are up 14.3% when comparing to the same period last year. Rental revenue has increased on an organic basis of 13.8%, and rental equipment sales nearly doubled from the same time a year ago on an organic basis. Our rental department experienced an increase in both utilization and rate improvement, along with an increase in the demand for customers seeking the purchase of lightly used equipment amid OEM production shortages for new equipment. Sustaining our rental fleet size throughout the COVID-19 pandemic has proven beneficial to begin 2021 as we are positioned well to secure rental and sales opportunities in a strong pricing environment.

Gross profit (GP):

	Three months ended March 31,
	2021			2020			Change
Construction Equipment	GP%			GP%			GP%
New and used equipment sales		10.4	%		9.6	%		0.8	%
Parts sales		28.2	%		26.7	%		1.5	%
Service revenue		60.2	%		60.0	%		0.2	%
Rental revenue		10.9	%		17.8	%		(6.9	)%
Rental equipment sales		15.3	%		14.0	%		1.3	%
Segment gross profit		19.3	%		19.8	%		(0.5	)%

Construction Equipment gross profit decreased by 0.5% to 19.3% in the three months ended March 31, 2021 from 19.8% compared to the same period in 2020. A decline in rental revenue gross margin was the main driver in the overall depressed margin, which is largely attributable to having a full period impact of Flagler and Vantage in the first quarter of 2021 versus last year and our updated depreciation method as described in our Note 2 to the Consolidated Financial Statements. Parts and service revenue margins were modestly up 1.5% and 0.2% in the first quarter of 2021 compared to the same period in 2020, respectively, and in line with historic norms. Additionally, rental equipment sales and new and used equipment gross margin improved by 1.3% amongst favorable retail pricing conditions in the industry.

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General and Administrative expenses:    Construction Equipment general and administrative (G&A) expenses increased by $12.4 million to $30.7 million for the three months ended March 31, 2021 as compared to the same period in 2020. The quarter over quarter increase was mainly attributable to the full period G&A impact as a result of the construction segment acquisitions of Flagler, Martin, Howell and Vantage throughout 2020.

Other Income (expense):    Construction Equipment other expense increased by $1.5 million to ($3.8) million for the three months ended March 31, 2021 as compared to the same period in 2020. The quarter over quarter increase was mainly due to the interest expense respective to the Flagler and Martin acquisitions, as the assets were financed through our line of credit and floorplan financing facilities.

Liquidity and Capital Resources

Three months ended March 31, 2021 compared with three months ended March 31, 2020 Cash Flows

Cash Flow from Operating Activities.    Cash flows from operating activities include net income adjusted for non-cash items and the effects of changes in working capital. For the three months ended March 31, 2021, operating activities resulted in net cash used in operations of $0.3 million. Our reported net loss of $5.7 million, when adjusted for non-cash income and expense items, such as depreciation and amortization, changes in deferred taxes and the share-based payments, provided net cash inflows of $13.2 million. Changes in working capital included $34.2 million of net new inventory purchased which was offset by transfers of $37.9 million to used and rental fleet, a $5.9 million increase in accounts receivable, a $4.7 million decrease in accounts payable, accrued expenses, customer deposits, and other liabilities and $2.1 million in net payments on manufacturer floor plans. Cash flows from operating activities were favorably impacted by $31.8 million due to proceeds from the sale of rental equipment, and $1.6 million favorable change in prepaid expenses and other assets and leases and other liabilities.

For the three months ended March 31, 2020, operating activities resulted in net cash used in operations of $57.1 million. Our reported net loss of $17.0 million, when adjusted for non-cash income and expense items, such as depreciation and amortization, former debt extinguishment, and the share-based payment, used cash outflows of $5.6 million. Changes in working capital included a $33.6 million of net new inventory purchased which was offset by transfers of $6.7 million to used and rental fleet, $26.5 million in net payments on manufacturer floor plans, a $3.5 million increase in accounts receivable, a $2.7 million decrease in accounts payable, accrued expenses, customer deposits, and other liabilities, and a $0.4 million cash outflows in prepaid expense and other assets. Cash flows from operating activities were positively impacted by a $14.4 million increase in proceeds from rental fleets, and a favorable change of $0.8 million in deferred revenue.

Cash Flow from Investing Activities.    For the three months ended March 31, 2021, our cash used in investing activities was $8.9 million. This was mainly due to $1.9 million use of cash for the recent ScottTech acquisition and $7.0 million purchases of rental equipment and non-rental property and equipment offset by proceeds from the sale of assets.

For the three months ended March 31, 2020, our cash used in investing activities was $118.3 million. The acquisition of Flagler and Liftech totaled $91.7 million and purchases of rental and non-rental property and equipment totaled approximately $26.7 million, offset by proceeds from the sale of assets.

Cash Flow from Financing Activities.    For the three months ended March 31, 2021, cash provided by financing activities was $8.6 million. The favorable impact was mainly due to $11.8 million net proceeds under our lines of credits. This was partially offset by net payments of $1.1 million related to the floor plans with an unaffiliated source (i.e. a non-vendor) and $ 2.1 million payments on long term debt and capital lease obligations.

For the three months ended March 31, 2020, cash provided by financing activities was $211.8 million. The favorable impact is mainly due to $175.7 million proceeds from the completion of the reverse recapitalization. Net proceeds under our lines of credit and floor plans with an unaffiliated source (i.e. a non-vendor) for the three months ended March 31, 2020 were $140.3 million and $4.2 million, respectively. Additionally, net proceeds under long-term debt amounted to $149.4 million. This was partially offset by payments related to the extinguishment of former debt, a line of credit and redemption of former shareholders’ notes payable all of which totaled $221.6 million, an extinguishment of a warrant liability of $29.6 million, expenditures of debt issuance costs of $2.7 million, repurchases of common stock of $2.9 million and a $1.0 million payment on long term debt and capital lease obligations.

Sources of Liquidity

The Company reported $0.6 million in cash for the three months ended March 31, 2021.

Effective February 14, 2020, the Company amended and restated its credit facility with its first lien lender by entering into the Fifth Amended and Restated ABL First Lien Credit Agreement (“Amended and Restated Credit Agreement” and the facility thereunder, the “ABL Facility”) by and among Alta Equipment Group Inc. and the other credit parties named therein, the lenders named therein, JP Morgan Chase Bank, N.A., as Administrative Agent, and the syndication agents and documentation agent named therein.

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In connection with the Amended and Restated Credit Agreement, the Company amended and restated its floor plan facility with its first lien lender by entering into the Fifth Amended and Restated Floor Plan First Lien Credit Agreement (“Floor Plan Credit Agreement”) by and among Alta Equipment Group Inc. and the other credit parties named therein, the lender JP Morgan Chase Bank, N.A., as Administrative Agent, Sole Bookrunner and Sole Lead Arranger.

The Amended and Restated Credit Agreement, among other things, (i) moved the $85 million floor plan financing facility of the Fourth Amended and Restated First Lien Credit Agreement out of syndication and into the Floor Plan Credit Agreement, (ii) increased the total aggregate amount of allowed indebtedness of all floor plans from $220 million to $225 million, (iii) increased the revolving line of credit borrowing capacity from $110 million to $300 million, and (iv) modified financial covenants (as defined in the Amended and Restated Credit Agreement).

On January 11, 2021, the Company amended its Fifth Amended and Restated ABL First Lien Credit Agreement by and among Alta Equipment Group Inc. and the other credit parties named therein, the lenders named therein, JP Morgan Chase Bank, N.A., as Administrative Agent, and the syndication agents and documentation agent named therein. The amendment generally allows for dividend payments to be made on the Preferred Stock without having to meet a leverage threshold, it excludes the Preferred dividend payments from affecting the second lien prepayment requirement, and it increases vendor floor plan limits from $225 million to $250 million, however, credit line borrowings would begin to be limited in the instance amounts borrowed on floor plan facilities exceed $225 million.

The Floor Plan Credit Agreement, among other things, (i) modified the floor plan financing facility with the Company’s first lien lender from $85 million to $40 million, and (ii) modified financial covenants (as defined in the Floor Plan Credit Agreement).

Line of Credit and Floor Plan First Lien Lender

The Company has a revolving line of credit with its first lien holder with advances on the line being supported by eligible accounts receivable, parts, and otherwise unencumbered new and used equipment inventory and rental equipment. The revolving line of credit has a maximum borrowing capacity of $300 million and interest cost is the London Interbank Offered Rate (“LIBOR”) plus an applicable margin or the CB Floating Rate, depending on the borrowing. As of March 31, 2021, the Company had an outstanding revolving line of credit balance of $170.9 million, excluding unamortized debt issuance costs.

The Company has a floor plan financing facility with its first lien lender to finance new and used inventory and rental fleet equipment. This floor plan has a maximum borrowing capacity of $40 million. At March 31, 2021, the Company had an outstanding balance on their first lien lender floor plan facility of $34.3 million, excluding unamortized debt issuance costs.

Original Equipment Manufacturer (“OEM”) Captive Lenders and Suppliers’ Floor Plans

OEM captive lender and suppliers’ floor plans payable are financing arrangements for new and used inventory and rental equipment. We have such arrangements with several OEM captive lenders and suppliers each with borrowing capacities ranging from $2.0 million to $102.0 million. Certain floor plans provide for a five to twelve-month interest only or deferred payment period. In addition, these floor plan agreements provide for interest or principal free terms at the supplier’s discretion. The Company routinely sells equipment that is financed under OEM captive lender floor plans prior to the original maturity date of the financing agreement. The related OEM captive lender floor plans payable is then due and payable at the time the equipment being financed is sold.

Maximum borrowings under the floor plans and the revolving line of credit are limited to $550 million. The total amount outstanding as of March 31, 2021 and December 31, 2020 was $325.2 million and 316.6 million, exclusive of debt issuance and deferred financings costs of $1.4 million and $1.5 million, respectively.

Each of the ABL Facility and the Floor Plan Facility was amended and restated in its entirety on April 1, 2021. See Note 18, Subsequent Events – Amended and Restated Credit Arrangements for further information.

Term Loan

The Company entered into a new Note Purchase Agreement (the “Term Loan”) dated as of February 3, 2020, for the purposes of, among other things, (i) financing the reverse recapitalization, (ii) financing the acquisition of Flagler and Liftech, and (iii) providing for the repayment and refinance of a portion of the Company’s prior existing debt.

The Term Loan has an aggregate principal amount of $155.0 million and has second lien priority and the Company’s assets, with an initial maturity date of August 2025. The term loan is payable in quarterly installments of $1.9 million plus interest at LIBOR plus 8%. As of March 31, 2020, the effective interest rate was 9.8%. The loan is collateralized by substantially all assets of the Company.

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On April 1, 2021, we completed a private offering of $315 million of our 5.625% Senior Secured Second Lien Notes due 2026 (the “Notes”). The Company used the net proceeds from the sale of the Notes and the new borrowings under the ABL Facility and the Floor Plan Facility, to repay its $147.3 million second lien term loan facility, to repay and refinance a portion of the ABL Facility and the Floor Plan Facility and to pay related fees and expenses. See Note 18, Subsequent events –Issuance of 5.625% Senior Secured Second Lien Notes due 2026 for further information.

Cash Requirements Related to Operations

Our principal sources of liquidity have been from cash provided by our service-related operations and the sales of new, used and rental fleet equipment along with rentals of such equipment, proceeds from the issuance of debt, and borrowings available under our lines of credit and floor plans. Our principal uses of cash have been to fund operating activities and working capital (including new and used equipment inventories), purchases of rental fleet equipment and property and equipment, fund payments due under lines of credit and flooring plans payable, fund acquisitions, and meet debt service requirements. In the future, we may pursue additional strategic acquisitions and seek to open new start-up locations. We anticipate that the uses described above encompass the principal demands on our cash and availability under our lines of credit in the future.

The amount of our future capital expenditures will depend on a number of factors including general economic conditions and growth prospects. Our gross rental fleet capital expenditures for the period ended March 31, 2021 was approximately $44.1 million, including $37.9 million of transfers from new and used inventory to rental fleet. This gross rental fleet capital expenditure was offset by sales proceeds of rental equipment of approximately $31.8 million for the period ended March 31, 2021 as our business model is to sell lightly used inventory to customers from our rental fleet so as to increase field population in our geographies. In response to changing economic conditions, we have the flexibility to modify our capital expenditures, especially as it relates to rental fleet.

To service our debt, we will require a significant amount of cash. Our ability to pay interest and principal on our indebtedness, will depend upon our future operating performance and the availability of borrowings under the lines of credit and/or other debt and equity financing alternatives available to us, which will be affected by prevailing economic conditions and conditions in the global credit and capital markets, as well as financial, business and other factors, some of which are beyond our control. Based on our current level of operations and given the current state of the capital markets, we believe our cash flow from operations, available cash, and available borrowings under the lines of credit will be adequate to meet our future liquidity needs for the foreseeable future. As of March 31, 2021, we had $207.0 million of available borrowings under the revolving line of credit and floor plans.

We cannot provide absolute assurance that our future cash flow from operating activities will be sufficient to meet our long-term obligations and commitments. If we are unable to generate sufficient cash flow from operating activities in the future to service our indebtedness and to meet our other commitments, we will be required to adopt one or more alternatives, such as refinancing or restructuring our indebtedness, selling material assets or operations, or seeking to raise additional debt or equity capital. Given current economic and market conditions, including the volatility in the global capital markets, we cannot assure investors that any of these actions could be affected on a timely basis or on satisfactory terms or at all, or that these actions would enable us to continue to satisfy our capital requirements. In addition, our existing debt agreements, as well as any future debt agreements, contain or may contain restrictive covenants, which may prohibit us from adopting any of these alternatives. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our debt.

The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on the Company.  As of March 31, 2021, there was $1.4 million in outstanding letters of credits issued in the normal course of business.

The Company was also party to certain contracts in which it guarantees the performance of lease agreements between various third-party leasing companies. The terms of the guarantees range from three to five years. In the event of a default by a third-party lessee, the Company would be required to pay all, or a portion of the remaining unpaid lease obligation as specified in the contract. The estimated exposure related to these guarantees was $1.8 million and $2.4 million at March 31, 2021 and December 31, 2020, respectively. It is anticipated that the third parties will have the ability to repay the debt without the Company having to honor the guarantee; therefore, no amount has been accrued on the Consolidated Balance Sheets at March 31, 2021 and December 31, 2020, respectively.

Critical accounting policies

In the preparation of consolidated financial statements prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), we are required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and the related disclosures. Our management, on an ongoing basis, reviews these estimates and assumptions. While we believe the estimates and judgments we use in preparing our consolidated financial statements are appropriate, they are subject to future events and uncertainties regarding their outcome and, therefore, actual results may materially differ from these estimates.

The Company updated the depreciable useful lives of certain of its rental equipment product categories based on our year-end analysis of fair value relative to book value, prior-year utilization trends and a review of market participants approach to depreciation for similar products. Per our accounting policy the updates to depreciable useful lives will be adjusted on prospective basis.

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Specifically, the notable changes for 2021 will be extending the depreciable life on lift trucks in our Material Handling segment to 84 months, extending the depreciable life on certain aerial and crane related assets in our construction segment to 120 months and applying straight-line depreciation to underutilized construction equipment assets that are being depreciated on a unit-of-activity basis to the extent the assets meet certain underutilized thresholds. Refer to Part I, Item 1, Note 2 of the Notes to our Consolidated Financial Statements for disclosures regarding the use of estimates and assumptions.

See Note 2 to the audited consolidated financial statements contained in the Company’s 2020 Annual Report on Form 10-K for a summary of our significant accounting policies.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company” as defined by Rule 10(f)(1) of Regulation S-K, the Company is not required to provide this information.

Item 4. Controls and Procedures.

Management’s Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Securities Exchange Act of 1934 (the “Exchange Act”) Rules 13a-15(e) and 15d-15(e)) that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.  Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2021. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2021, our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

Other than routine legal proceedings incident to our business, there are no material legal proceedings to which we are a party or to which any of our property is subject.

Item 1A. Risk Factors.

We face a number of uncertainties and risks that are difficult to predict and many of which are outside of our control. For a detailed discussion of the risks that affect our business, please refer to Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Subject to the following discussion below, there have been no material changes from the risk factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (the “SEC Statement”). The SEC Statement sets forth the conclusion of the SEC’s Office of the Chief Accountant that certain provisions included in the warrant agreements entered into by many special purpose acquisition companies require such warrants to be accounted for as liabilities measured at fair value, rather than as equity. The SEC Statement also directs issuers who have accounted for these warrants as equity to consider whether the impact of the change in accounting treatment is material and thus require a restatement of previously issued financial statements.

On April 12, 2021, we exchanged all 8,668,746 of our outstanding warrants for shares of our common stock at an exchange ratio of 0.263 shares of common stock per warrant, for an aggregate issuance of approximately 2,279,874 shares of common stock in the exchange. In this Form 10-Q and in our financial statements prior to the exchange of warrants for shares of our common stock, we have classified our private placement warrants and public warrants as equity.

We evaluated the SEC Statement with respect to our accounting treatment of our warrants and have determined that such guidance would have resulted in the private placement warrants, and not the public warrants, being classified as liabilities on the balance sheet as of December 31, 2020 with the mark to market change in fair value reflected in the statement of operations.

Accordingly, we have performed an evaluation of the materiality of this matter in accordance with Staff Accounting Bulletin 99 (“SAB 99”). Notably, of the 8,668,746 warrants that were outstanding since the Business Combination was consummated on February 14, 2020 only 206,250 were private placement warrants subject to liability treatment based on the SEC Statement. To that end, based on our SAB 99 assessment, which included fair value analysis of the 206,250 private placement warrants, we determined that classifying the private placement warrants as liabilities on the balance sheet, versus equity, is immaterial to our historic financial statements and that a restatement is unnecessary.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

44

Item 6. Exhibits.

Exhibit Number	Description
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*Filed herewith.

45

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ALTA EQUIPMENT GROUP INC.
Date: May 13, 2021	By:	/s/ Anthony J. Colucci
		Anthony J. Colucci
		Chief Financial Officer (Principal Financial Officer)

46

EX-31.1

EXHIBIT 31.1

CERTIFICATION

PURSUANT TO RULE 13a-14 AND 15d-14

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Ryan Greenawalt, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 of Alta Equipment Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/49313)

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: May 13, 2021	By:	/s/ Ryan Greenawalt
		Ryan Greenawalt
		Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

PURSUANT TO RULE 13a-14 AND 15d-14

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Anthony J. Colucci, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 of Alta Equipment Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/49313)

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: May 13, 2021	By:	/s/ Anthony J. Colucci
		Anthony J. Colucci
		Chief Financial Officer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. 1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Quarterly Report of Alta Equipment Group Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ryan Greenawalt, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)   the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 13, 2021

/s/ Ryan Greenawalt
Name:	Ryan Greenawalt
Title:	Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. 1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Quarterly Report of Alta Equipment Group Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony J. Colucci, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)   the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 13, 2021

/s/ Anthony J. Colucci
Name:	Anthony J. Colucci
Title:	Chief Financial Officer
	(Principal Financial Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 10, 2021
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Registrant Name	ALTA EQUIPMENT GROUP INC.
Entity Central Index Key	0001759824
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity File Number	001-38864
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	83-2583782
Entity Address Address Line1	13211 Merriman Road
Entity Address City or Town	Livonia
Entity Address State or Province	MI
Entity Address Postal Zip Code	48150
City Area Code	248
Local Phone Number	449-6700
Document Quarterly Report	true
Document Transition Report	false
Entity Common Stock Shares Outstanding		32,298,376
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common stock, $0.0001 par value per share
Trading Symbol	ALTG
Security Exchange Name	NYSE
Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Depositary Shares
Trading Symbol	ALTG PRA
Security Exchange Name	NYSE

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
CURRENT ASSETS
Cash	$ 0.6	$ 1.2
Accounts receivable, net	144.0	137.8
Inventories, net	223.4	229.0
Prepaid expenses and other current assets	13.3	13.6
Total current assets	381.3	381.6
PROPERTY AND EQUIPMENT, NET	310.8	311.9
OTHER ASSETS
Goodwill	25.8	24.3
Intangible assets, net	25.6	26.3
Other assets	1.5	2.1
Total other assets	52.9	52.7
TOTAL ASSETS	745.0	746.2
CURRENT LIABILITIES
Lines of credit, net	169.6	157.7
Current portion of long-term debt	7.8	7.8
Accounts payable	55.5	58.9
Customer deposits	11.4	9.3
Accrued expenses	28.8	30.1
Other current liabilities	12.3	13.1
Total current liabilities	439.6	434.3
LONG-TERM LIABILITIES
Long-term debt, net of current portion	133.5	135.0
Capital lease obligations, net of current portion	0.4	0.6
Buyback residual obligations, net of current portion	0.7	0.7
Lease liability, net of current portion	2.5	2.5
Guaranteed purchase obligation, net of current portion	6.9	6.9
Other liabilities	9.9	9.3
TOTAL LIABILITIES	593.5	589.3
CONTINGENCIES - NOTE 11
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 March 31, 2021 and December 31, 2020
Additional paid-in capital	216.5	216.2
Treasury stock	(5.9)	(5.9)
Accumulated deficit	(59.1)	(53.4)
TOTAL STOCKHOLDERS’ EQUITY	151.5	156.9
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	745.0	746.2
New Equipment
CURRENT LIABILITIES
Floor plan payable	119.9	127.6
Used and Rental Equipment
CURRENT LIABILITIES
Floor plan payable	$ 34.3	$ 29.8

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares
Accounts receivable, net of allowances | $	$ 7.9	$ 7.1
Preferred stock, par value | $ / shares	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Common stock, par value | $ / shares	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	30,018,502	30,018,502
Common stock, shares outstanding	30,018,502	30,018,502
Depository Shares
Preferred stock, shares issued	1,200,000	1,200,000
Preferred stock, shares outstanding	1,200,000	1,200,000
10% Series A Cumulative Perpetual Preferred Stock
Preferred stock, par value | $ / shares	$ 0.0001	$ 0.0001
Depositary receipt ratio	0.001	0.001
Preferred stock, dividend rate, percentage	10.00%	10.00%

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues:
Net revenue	$ 268.8	$ 180.5
Cost of revenues:
Cost of revenue	201.5	133.4
Gross profit	67.3	47.1
General and administrative expenses	64.9	51.1
Depreciation and amortization expense	2.0	1.0
Total general and administrative expenses	66.9	52.1
Income (loss) from operations	0.4	(5.0)
Other income (expense)
Interest expense, floor plan payable – new equipment	(0.5)	(0.7)
Interest expense – other	(5.2)	(5.2)
Other income	0.1	0.4
Loss on extinguishment of debt	(7.6)	(7.6)
Total other income (expense)	(5.6)	(13.1)
Loss before taxes	(5.2)	(18.1)
Income tax provision (benefit)	0.5	(1.1)
Net loss	$ (5.7)	$ (17.0)
Basic and diluted loss per share	$ (0.19)	$ (0.91)
Basic and diluted weighted average common shares outstanding	30,355,789	18,767,981
New and Used Equipment Sales
Revenues:
Net revenue	$ 123.8	$ 82.2
Cost of revenues:
Cost of revenue	106.5	72.4
Parts Sales
Revenues:
Net revenue	41.4	28.7
Cost of revenues:
Cost of revenue	28.7	19.6
Service Revenue
Revenues:
Net revenue	38.7	30.2
Cost of revenues:
Cost of revenue	14.5	11.4
Rental Revenue
Revenues:
Net revenue	33.1	25.2
Cost of revenues:
Cost of revenue	5.5	4.9
Rental Equipment Sales
Revenues:
Net revenue	31.8	14.2
Cost of revenues:
Cost of revenue	26.9	12.2
Rental Depreciation
Cost of revenues:
Cost of revenue	$ 19.4	$ 12.9

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Millions	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock
Balance at Dec. 31, 2019	$ (23.2)				$ (23.2)
Balance, shares at Dec. 31, 2019			7,300,000
Net loss	(17.0)				(17.0)
Opening deferred tax liabilities under reverse recapitalization	(6.9)				(6.9)
Equity infusion from reverse recapitalization, net of transaction costs	175.7			$ 175.7
Equity infusion from reverse recapitalization, net of transaction costs, shares			21,911,359
Shares issued upon settlement of equity-linked incentive plan	3.1			3.1
Shares issued upon settlement of equity-linked incentive plan, shares			300,000
Repurchases of common stock	(2.9)					$ (2.9)
Balance at Mar. 31, 2020	128.8			178.8	(47.1)	(2.9)
Balance, shares at Mar. 31, 2020			29,511,359
Balance at Dec. 31, 2020	156.9			216.2	(53.4)	(5.9)
Balance, shares at Dec. 31, 2020		1,200,000	30,018,502
Net loss	(5.7)				(5.7)
Share based compensation	0.3			0.3
Balance at Mar. 31, 2021	$ 151.5			$ 216.5	$ (59.1)	$ (5.9)
Balance, shares at Mar. 31, 2021		1,200,000	30,018,502

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
OPERATING ACTIVITIES
Net loss	$ (5.7)	$ (17.0)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Depreciation and amortization	21.4	13.9
Amortization of debt discount and debt issuance costs	0.5	0.3
Imputed interest	0.1
Gain on sale of assets		(0.1)
Gain on sale of rental equipment	(4.9)	(2.0)
Inventory obsolescence	0.2	0.5
Provision for bad debt	0.6	0.4
Loss on debt extinguishment	7.6	7.6
Repayment of paid-in-kind interest		(11.2)
Share-based compensation	0.3	3.1
Changes in deferred rent	0.2
Changes in deferred taxes	0.5	(1.1)
Changes in:
Accounts receivable	(5.9)	(3.5)
Inventories	(34.2)	(33.6)
Proceeds from sale of rental equipment	31.8	14.4
Prepaid expenses and other assets	0.5	(0.4)
Proceeds from floor plans with manufacturers	84.8	94.2
Payments under floor plans with manufacturers	(86.9)	(120.7)
Accounts payable, accrued expenses, customer deposits, and other current liabilities	(4.7)	(2.1)
Leases and other liabilities	1.1	0.2
Net cash used in operating activities	(0.3)	(57.1)
INVESTING ACTIVITIES
Proceeds from the sale of assets	0.7	0.1
Expenditures for rental equipment	(6.2)	(25.5)
Expenditures for property and equipment	(1.5)	(1.2)
Expenditures for acquisitions, net of cash acquired	(1.9)	(91.7)
Net cash used in investing activities	(8.9)	(118.3)
FINANCING ACTIVITIES
Expenditures for debt issuance costs		(2.7)
Extinguishment of floor plans and line of credit		(132.9)
Extinguishment of long-term debt		(82.0)
Redemption of former shareholder notes payable		(6.7)
Extinguishment of warrant liability		(29.6)
Proceeds from lines of credit	73.5	220.2
Payments under lines of credit	(61.7)	(79.9)
Proceeds from floor plans with unaffiliated source	24.2	25.8
Payments under floor plans with unaffiliated source	(25.3)	(21.6)
Proceeds from issuance of long-term debt, net		149.4
Payments on long-term debt	(1.9)	(0.8)
Payments on capital lease obligations	(0.2)	(0.2)
Equity proceeds from reverse recapitalization, net		175.7
Repurchases of common stock		(2.9)
Net cash provided by financing activities	8.6	211.8
NET CHANGE IN CASH	(0.6)	36.4
Cash, Beginning of year	1.2	0.0	$ 0.0
Cash, End of period	0.6	36.4	$ 1.2
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$ 5.3	$ 15.2

XML

Organization and Nature of Operations

3 Months Ended

Mar. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

ORGANIZATION AND NATURE OF OPERATIONS

NOTE 1 — ORGANIZATION AND NATURE OF OPERATIONS

Alta Equipment Group Inc. and its subsidiaries (“Alta” or the “Company”) is engaged in the retail sale, service, and rental of material handling and construction equipment in the states of Michigan, Illinois, Indiana, New York (including New York City in our Material Handling segment), Virginia and Florida as well as the New England region (including Boston) of the United States.

Alta Equipment Holdings, Inc. is the holding company for Alta Enterprises, LLC. Alta Enterprises, LLC is the holding company for Alta Industrial Equipment Michigan; LLC; Alta Industrial Equipment Company, LLC; Alta Industrial Equipment New York, LLC; PeakLogix, LLC; Alta Construction Equipment, LLC; Alta Construction Equipment Illinois, LLC; Alta Heavy Equipment Services, LLC; NITCO, LLC; Alta Construction Equipment Florida, LLC, and Alta Construction Equipment New York, LLC.

Unless the context otherwise requires, the use of the terms “the Company”, “we,” “us,” and “our” in these notes to the unaudited consolidated financial statements refers to Alta Equipment Group Inc. and its consolidated subsidiaries.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the consolidated accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All significant intercompany transactions and balances have been eliminated in the preparation of the consolidated financial statements. Certain amounts in the prior year have been reclassified to conform with the presentation in the current year.

The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. Operating results for the three months ended March 31, 2021 is not necessarily indicative of the results that may be expected for the year ending December 31, 2021, and therefore, the results and trends in these interim consolidated financial statements may not be the same for the entire year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s 2020 Annual Report on Form 10-K.

The Company updated the depreciable useful lives of certain of its rental equipment product categories based on our year-end analysis of fair value relative to book value, prior-year utilization trends and a review of market participants approach to depreciation for similar products. Per our accounting policy the updates to depreciable useful lives will be adjusted on prospective basis. Specifically, the notable changes for 2021 will be extending the depreciable life on lift trucks in our Material Handling segment to 84 months, extending the depreciable life on certain aerial and crane related assets in our Construction Equipment segment to 120 months and applying straight-line depreciation to underutilized construction equipment assets that are being depreciated on a unit-of-activity basis to the extent the assets meet certain underutilized thresholds. These accounting policies of the Company were also described in Note 2 to the audited consolidated financial statements contained in the Company’s 2020 Annual Report on Form 10-K.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are based on assumptions that we believe are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. Additionally, the COVID-19 outbreak has had an impact on our approach to these estimates and assumptions and any increased severity of the pandemic on our business could result in a reassessment of these estimates and assumptions which, in turn, could affect the reported amounts on our financial statements. Please see section titled Risk Factors in our 2020 Annual Report on Form 10-K for a discussion of risks associated with the COVID-19 pandemic.

Impairment of Long-lived Assets

The Company evaluates long-lived assets, such as property and equipment and intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying value of any asset group may not be recoverable.

If the estimated future cash flow (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. When reviewing long-lived assets for impairment, the Company groups long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. After evaluating and weighing all relevant events and circumstances, the Company did not identify any indications necessary to perform an interim impairment test for the long-lived assets as of and for the period ended March 31, 2021.

Goodwill

Pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 350, Intangibles-Goodwill and Other (“ASC 350”), goodwill is recorded as the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired.

The Company evaluates goodwill for impairment at least annually, or more frequently if triggering events occur or other impairment indicators arise which might impair recoverability. Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment (i.e. before aggregation or combination), or one level below an operating segment (i.e. a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component.

After evaluating and weighing all relevant events and circumstances, the Company concluded there was no triggering event that constitutes the need to perform a goodwill impairment test for the period ended March 31, 2021.

Income Taxes

The Company was formed in 2020 for income tax purposes. Alta Enterprises, LLC was historically and remains a partnership for federal income tax purposes, with each partner being separately taxed on its share of taxable income (loss).  There is no federal income tax expense (benefit) reflected in the Company’s financial statements for any period prior to the reverse recapitalization on February 14, 2020. As the activity resides in Alta Enterprises, LLC, the income tax impact to the Company represents the current income tax calculated at the Consolidated Return level (“Alta Equipment Group Inc and Subsidiaries”), and the deferred impact of the interest in the lower tier partnership.

We use the guidance in FASB ASC Topic 740-270, Income Taxes in Interim Periods, where tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are considered in the relevant period. At the end of each interim reporting period, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected income (loss) before income taxes for the year, projections of the proportion of income (and/or loss) earned and taxed, permanent and temporary differences, and the likelihood of the realizability of deferred tax assets generated in the current year. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or the Company’s tax environment changes. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or to the extent that the expected annual effective income tax rate changes, the effect of the change on prior interim periods is included in the income tax provision in the period in which the change in estimate occurs. We establish valuation allowances for our deferred tax assets if the amount of expected future taxable income is not likely to allow for the use of the deduction or credit.

Share Based Compensation

The Board of Directors approved the Company’s 2020 Omnibus Incentive Plan, which enables the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, other share based awards and cash awards to directors, employees and consultants to improve the ability of the Company to attract, retain, and motivate individuals upon whom the Company’s sustained growth and financial success depend, by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company.

We measure the employee stock-based awards at grant-date fair value using provisions of ASC 718 – Stock Compensation and record compensation expense over the vesting period of the award. The Company made an accounting election upon adoption of Accounting Standard Update (“ASU”) 2016-09 and will recognize forfeitures when they occur. The Company treated equity awards granted to non-employee directors similarly to the equity awards to employees upon adoption of ASU 2018-07.

New Accounting Pronouncements

Pronouncements Not Yet Adopted

Leases (Topic 842)

In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”) that replaces the existing leasing guidance. Topic 842 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance also expands the requirements for lessees to record leases embedded in other arrangements and the required quantitative and qualitative disclosures surrounding leases. Accounting guidance for lessors is largely unchanged.

The Company is still assessing the impact Topic 842 will have on its future revenue and expenses. The new accounting standard is effective for the annual reporting period ended December 31, 2021 with an effective date of January 1, 2021, and the interim reporting periods beginning January 1, 2022. Management is currently assessing the impact the adoption of this standard will have on the Company’s consolidated financial statements as well as the available transition methods.

Financial Instruments — Credit Losses (Topic 326)

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This standard prescribes an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in the timely recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of the financial instrument.

Measurement of expected credit losses is to be based on relevant forecasts that affect collectability. The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures. Different components of the guidance require modified retrospective or prospective adoption. As amended by ASU 2019-10, the ASU 2016-13 is effective for the annual reporting period beginning on or after December 15, 2022. The Company believes ASU 2016-13 will only have applicability to the Company’s receivables from revenue transactions, or trade receivables, except those arising from rental revenues as ASU 2016-13 does not apply to receivables arising from operating leases. The Company is currently evaluating whether the new guidance, while limited to our non-operating lease trade receivables, will have an impact on the consolidated financial statements or existing internal controls.

Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848)

In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). This guidance is intended to provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform (e.g., discontinuation of LIBOR) if certain criteria are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. The amendments of this ASU should be applied on a prospective basis. Our potential exposure related to the expected cessation of LIBOR is limited to the interest expense we incur on our Credit Facility. We cannot predict the effect of the potential changes to or elimination of LIBOR, the establishment and use of alternative rates or benchmarks, but do not expect a significant impact on our consolidated financial position, and results of operations.

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Revenue Recognition

3 Months Ended

Mar. 31, 2021

Revenue From Contract With Customer [Abstract]

REVENUE RECOGNITION

NOTE 3 — REVENUE RECOGNITION

Revenues are recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the business expects to be entitled to in exchange for those goods or services. Control is transferred when the customer has the ability to direct the use of and obtain the benefits from the goods or services. The majority of the Company’s sales agreements contain performance obligations satisfied at a point in time when control is transferred to the customer. For agreements with multiple performance obligations, which are infrequent, judgment is required to determine whether performance obligations specified in these agreements are distinct and should be accounted for as separate revenue transactions for recognition purposes. In these types of agreements, the Company generally allocates sales prices to each distinct performance obligation based on the observable selling price.

The Company enters into various equipment sales transactions with certain customers, whereby customers purchase equipment from the Company and then lease the equipment to a third party. In some cases, the Company provides a guarantee to repurchase the equipment back at the end of the lease term between the customer and third party lessee at a set residual amount set forth in the initial sales contract or pay the customer for the deficiency, if any, between the sale proceeds received for the equipment and the guaranteed minimum resale value. The Company is precluded from recognizing a sale of equipment if it guarantees to repurchase the sold equipment back or guarantees the resale value of the equipment to the customer for contracts determined to be operating leases. Rather, these transactions are accounted for in accordance with ASC 840, Lease Accounting (“Topic 840”).

The lease liability, with respect to the aforementioned sale transactions, represents the net proceeds upon the equipment’s initial transfer. These amounts, excluding the guaranteed residual value, are recognized into rental revenue on a pro-rata basis over the leased contract period up to the first exercise date of the guarantee. At March 31, 2021 and December 31, 2020, the total lease liability relating to these various equipment sale transactions amounted to $3.4 million and $3.8 million, respectively. The Company also recognized a liability for its guarantee to repurchase the equipment at the residual amounts of $8.5 million and $9.0 million as of March 31, 2021 and December 31, 2020, respectively.

The Company also enters into various rental agreements whereby owned equipment is leased to customers. Revenue from the majority of rental agreements is recognized over the term of the agreement in accordance with Topic 840. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, the Company records unbilled rental revenues and deferred rental revenues at the end of each reporting period. Unbilled rental revenues are included as a component of “Accounts receivable” on the Consolidated Balance Sheets. Rental equipment is also purchased outright (“rental conversions”). Rental revenue and revenue attributable to rental conversions, are recognized in “Rental revenue” and “Rental equipment sales” on the Consolidated Statements of Operations, respectively.

The Company also enters into contracts with customer where it provides automated equipment installation and system integration services and installation and set-up of warehouse management systems and related hardware and software support services. Revenue from the installation services are recognized over time as the performance obligation is satisfied, determined using the cost-to-cost input method, based on contract costs incurred to date to total estimated contract costs. Revenue from recurring support services is recognized ratably over the contract period.

Revenue from periodic maintenance service sales is recognized upon completion of the service. Revenue from guaranteed maintenance contracts is recognized over the contract period in proportion to the costs expected to be incurred in performing services under the contract, typically three to five years.

Payment terms vary by the type and location of the customer and the products or services offered. Generally, the time between when revenue is recognized, and payment is due is not significant. The Company does not evaluate whether the selling price includes a financing interest component for contracts that are less than a year, or if payment is expected to be received less than a year after the good or service has been provided. Sales and other taxes collected from customers and remitted to government authorities are accounted for on a net basis and, therefore, excluded from revenue. Shipping and handling costs are treated as fulfillment costs and are included in cost of revenue.

Costs to obtain contracts, such as sales commissions, are expensed as incurred given that the terms of the contracts are generally less than one year.

Under bill-and-hold arrangements, revenue is recognized when all configuration work is complete and the equipment has been set aside for final shipment, at which point the Company has determined control has been transferred.

Deferred Revenue

The Company recognizes deferred revenue with respect to automated equipment installation and system integration services,  service sales and rental agreements. Deferred revenue with respect to service sales represents the unearned portion of fees related to guaranteed maintenance contracts for customers covering equipment they have previously purchased. These amounts are recognized based on an estimated rate at which the services are provided over the life of the contract. The Company also recognizes deferred revenue related to rental agreements.

Total deferred revenue relating to automated equipment installation and system integration services, service sales agreements and rental agreements as of March 31, 2021 and December 31, 2020 was $10.0 million and $9.6 million, respectively.

Disaggregation of Revenues

The following table summarizes the Company’s disaggregated revenues as presented in the Consolidated Statement of Operations for the three months March 31, 2021 and 2020 by revenue type, and by the applicable accounting standard.

	Three months ended March 31, 2021						Three months ended March 31, 2020
	Topic 840		Topic 606		Total		Topic 840		Topic 606		Total
Revenues:
New and used equipment sales	$	—	$	123.8	$	123.8	$	—	$	82.2	$	82.2
Parts sales		—		41.4		41.4		—		28.7		28.7
Service revenue		—		38.7		38.7		—		30.2		30.2
Rental revenue		33.1		—		33.1		25.2		—		25.2
Rental equipment sales		—		31.8		31.8		—		14.2		14.2
Net revenue	$	33.1	$	235.7	$	268.8	$	25.2	$	155.3	$	180.5

The Company believes that the disaggregation of revenues from contracts to customers as summarized above, together with the discussion below, depicts how the nature, amount, timing and uncertainty of its revenues and cash flows are affected by economic factors.

Leases revenues (Topic 840)

New and used equipment sales:    The Company enters into various equipment sale transactions with certain customers, whereby customers purchase equipment from the Company and then lease the equipment to a third party. In some cases, the Company provides a guarantee to repurchase the equipment back at the end of the lease term between the customer and third party lessee at a set residual amount set forth in the initial sales contract or pay the customer for the deficiency, if any, between the sale proceeds received for the equipment and the guaranteed minimum resale value. The Company is precluded from recognizing a sale of equipment when it is obligated or has an option to repurchase or guarantees the resale value of the equipment to the customer for contracts determined to be operating leases. For these arrangements, because the Company generally receives the full amount of the consideration at the beginning of the arrangement, the Company initially records deferred revenue for the amount received and recognizes revenue on a pro-rata basis over the term of the contract under Topic 840.

Rental revenue:    Owned equipment rentals represent revenues from renting equipment. The Company accounts for these rental contracts as operating leases. The Company recognizes revenue from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, the Company records unbilled rental revenues and deferred rental revenues at the end of each reporting period.

Revenues from contracts with customers (Topic 606)

Accounting for the different types of revenues pursuant to Topic 606 are discussed below. Substantially all of the Company’s revenues under Topic 606 are recognized at a point in time rather than over time.

New and used equipment sales:    With the exception of bill-and-hold arrangements, the Company’s revenues from the sale of new and used equipment are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good. Under bill-and-hold arrangements, revenue is recognized when all configuration work is complete and the equipment has been set aside for final shipment, at which point the Company has determined control has been transferred. The Company does not offer material rights of return. The Company recognized approximately $7.9 million and $0 million in revenues for the year-to-date period ended March 31, 2021 and 2020, respectively, from automated equipment installation and system integration services as the performance obligations were satisfied over time using the cost-to-cost input method, based on contract costs incurred to date to total estimated contract costs.

Parts sales:    Revenues from the sale of parts are recognized at the time of pick-up by the customer for over the counter sales transactions. For parts that are shipped to a customer, the Company elected to use a practical expedient of Topic 606 and treat such shipping activities as fulfillment costs, thereby recognizing revenues at the time of shipment. The Company does not offer material rights of return.

Service revenue:    The Company records service revenue primarily from guaranteed maintenance and periodic maintenance contracts with customers. The Company recognizes periodic maintenance service revenues at the time such services are completed, which is when the control of the promised services is transferred over to the customer. The Company recognizes guaranteed maintenance service revenues over-time using an input method of costs incurred to estimated costs over the life of the related contract. Revenue recognized from guaranteed maintenance contracts totaled $4.3 million and $4.0 million for the year-to-date period ended March 31, 2021 and 2020, respectively. The Company also records service revenue from warranty contracts whereby the Company performs service on behalf of the Original Equipment Manufacturer (“OEM”) or third-party warranty provider.

Rental equipment sales:The Company also sells rental equipment from our rental fleet, these sales are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good. In some cases, certain rental agreements contain a rental purchase option, whereby the customer has an option to purchase the rented equipment during the term of the rental agreement. Revenues from the sale of rental equipment are recognized at the time the rental purchase option agreement has been approved and signed by both parties, as the equipment is already in the customer’s possession under the previous rental agreement, and therefore control has been transferred as title has been transferred.

Contract costs

The Company does not recognize assets associated with the incremental costs of obtaining a contract with a customer that the Company expects to recover (for example, a sales commission). Most of the Company’s revenue is recognized at a point in time or over a period of one year or less, and the Company has used the practical expedient that allows it to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less. The amount of the costs associated with the revenue recognized over a period of greater than one year is insignificant.

Receivables and contract assets and liabilities

The Company has contract assets associated with contracts with customers. Contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. Deferred revenue associated with service contracts represents the unearned portion of revenue related to guaranteed maintenance contracts for customers covering equipment purchased. These amounts are recognized based on an estimated rate at which the services are provided over the life of the contract.

Payment terms

The Company’s revenues do not include material amounts of variable consideration under Topic 606. Payment terms may vary by the type of customer, location, and the type of products or services offered. The time between invoicing and when payment is due is not significant, and contracts do not generally include a significant financing component. Contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties.

Contract estimates and judgments

The Company’s revenues accounted for under Topic 606 generally do not require significant estimates or judgments as the transaction price is generally fixed and clearly stated in the customer contracts. Contracts generally do not include multiple performance obligations, and accordingly do not require estimates of the standalone selling price for each performance obligation. Substantially all of the Company’s revenues are recognized at a point in time and the timing of the satisfaction of the applicable performance obligations is readily determinable. The Company’s revenues under Topic 606 are generally recognized at the time of delivery to, or pick-up by, the customer.

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Related Party Transactions

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 4 — RELATED PARTY TRANSACTIONS

The Company leases a subset of itsoperating facilities from three real estate entities related through common ownership. Total rent expense under these lease agreements for both the three months ended March 31, 2021 and 2020 was $1.2 million.

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Inventories

3 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 5 — INVENTORIES

The components of inventories, net, consisted of the following (amounts in millions):

	March 31,			December 31,
	2021			2020
New equipment	$	145.8		$	153.5
Used equipment		30.9			31.4
Work in process		7.3			5.4
Parts		42.5			41.6
Gross Inventory	$	226.5		$	231.9
Inventory reserves		(3.1	)		(2.9	)
	$	223.4		$	229.0

Direct labor of $2.1 million and $1.7 million incurred for open service orders were capitalized and included in work in process at March 31, 2021 and December 31, 2020, respectively. The remaining work in process balances as of March 31, 2021 and December 31, 2020 primarily represent parts applied to open service orders. Rental depreciation expense in connection with our new and used equipment was $2.0million and $0.8 million for the three months ended March 31, 2021 and 2020, respectively.

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Property and Equipment

3 Months Ended

Mar. 31, 2021

Property Plant And Equipment [Abstract]

PROPERTY AND EQUIPMENT

NOTE 6 — PROPERTY AND EQUIPMENT

Property and equipment, net, consisted of the following (amounts in millions):

	March 31,			December 31,
	2021			2020
Land	$	0.1		$	0.1
Rental fleet		421.2			418.5
Equipment and leasehold improvements:
Machinery and equipment		5.5			5.5
Autos and trucks		6.4			7.0
Leasehold improvements		9.3			8.7
Office equipment		3.1			3.1
Computer equipment		10.4			9.4
Total Cost	$	456.0		$	452.3
Less: accumulated depreciation and amortization
Rental fleet		(128.3	)		(124.6	)
Equipment, auto and trucks, leasehold improvements and computer and office equipment		(16.9	)		(15.8	)
Total accumulated depreciation and amortization		(145.2	)		(140.4	)
	$	310.8		$	311.9

Total depreciation and amortization on property and equipment was $18.7 million and$13.0 million for the three months ended March 31, 2021 and 2020, respectively. The Company had assets related to capital leases, which are included in the machinery and equipment balance above. Such assets had gross carrying values totaling $4.0 million and $4.0 million, and accumulated amortization balances totaling $2.7 million and $2.5 million, as of March 31, 2021 and December 31, 2020, respectively. Of the $421.2 million and $418.5 million of gross cost of rental fleet, $12.4 million and $13.0 million were represented by guaranteed purchase obligation (“GPO”) assets as of March 31, 2021 and December 31, 2020, respectively.

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Goodwill

3 Months Ended

Mar. 31, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

GOODWILL

NOTE 7 — GOODWILL

The following table summarizes the changes in the carrying amount of goodwill in total and by reportable segment as of March 31, 2021 and December 31, 2020 (amounts in millions):

	Material Handling		Construction Equipment		Total
Balance, December 31, 2020	$	10.2	$	14.1	$	24.3
Additions		1.5		-		1.5
Balance, March 31, 2021	$	11.7	$	14.1	$	25.8

See Note 16, Business Combinations for further information.

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Intangible Assets

3 Months Ended

Mar. 31, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 8 — INTANGIBLE ASSETS

The gross carrying amount of intangible assets and accumulated amortization as of March 31, 2021 and December 31, 2020 were as follows (amounts in millions):

	March 31, 2021							December 31, 2020
	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Customer relationships	$	25.9	$	(3.7	)	$	22.2	$	25.9	$	(3.1	)	$	22.8
Tradenames		1.6		(0.5	)		1.1		1.6		(0.4	)		1.2
Non-compete agreements		0.8		(0.1	)		0.7		0.8		(0.1	)		0.7
Favorable Market Rent		1.7		(0.1	)		1.6		1.7		(0.1	)		1.6
Total	$	30.0	$	(4.4	)	$	25.6	$	30.0	$	(3.7	)	$	26.3

Amortization of intangible assets were $0.7 million and $0.1 million for the three months ended March 31, 2021 and March 31, 2020,respectively.

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Lines of Credit and Floor Plans

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

LINES OF CREDIT AND FLOOR PLANS

NOTE 9 — LINES OF CREDIT AND FLOOR PLANS

Effective February 14, 2020, the Company amended and restated its credit facility with its first lien lender by entering into the Fifth Amended and Restated ABL First Lien Credit Agreement (“Amended and Restated Credit Agreement”) and the facility thereunder, the “ABL Facility”) by and among Alta Equipment Group Inc. and the other credit parties named therein, the lenders named therein, JP Morgan Chase Bank, N.A., as Administrative Agent, and the syndication agents and documentation agent named therein.

In connection with the Amended and Restated Credit Agreement, the Company amended and restated its floor plan facility with its first lien lender by entering into the Fifth Amended and Restated Floor Plan First Lien Credit Agreement (“Floor Plan Credit Agreement” and the facility thereunder, the “Floor Plan Facility”) by and among Alta Equipment Group Inc. and the other credit parties named therein, the lender JP Morgan Chase Bank, N.A., as Administrative Agent, Sole Bookrunner and Sole Lead Arranger.

The Amended and Restated Credit Agreement, among other things, (i) moved the $85 million floor plan financing facility of the Fourth Amended and Restated First Lien Credit Agreement out of syndication and into the Floor Plan Credit Agreement, (ii) increased the total aggregate amount of indebtedness of all floor plans from $220 million to $225 million, (iii) increased the revolving line of credit borrowing capacity from $110 million to $300 million, and (iv) modified certain financial covenants.

On January 11, 2021, the Company amended its Fifth Amended and Restated ABL First Lien Credit Agreement by and among Alta Equipment Group Inc. and the other credit parties named therein, the lenders named therein, JP Morgan Chase Bank, N.A., as Administrative Agent, and the syndication agents and documentation agent named therein. The amendment generally allows for dividend payments to be made on the Preferred Stock without having to meet a leverage threshold, it excludes the Preferred dividend payments from affecting the second lien prepayment requirement, and it increases vendor floor plan limits from $225 million to $250 million, however, credit line borrowings would begin to be limited in the instance amounts borrowed on floor plan facilities exceed $225 million.

The Floor Plan Credit Agreement, among other things, (i) modified the floor plan financing facility with its first lien lender from $85 million to $40 million, and (ii) modified certain financial covenants.

Line of Credit and Floor Plan — First Lien Lender

The Company has an ABL Facility with its first lien holder with advances on the line being supported by eligible accounts receivable, parts, and otherwise unencumbered new and used equipment inventory and rental equipment. The ABL Facility has a maximum borrowing capacity of $300 million and interest cost is the London Interbank Offered Rate (“LIBOR”) plus an applicable margin or the CB Floating Rate, depending on the borrowing. As of March 31, 2021, the Company had an outstanding ABL Facility balance of $170.9 million, excluding unamortized debt issuance costs. The effective interest rate was 2.0% at March 31, 2021. As of December 31, 2020, the Company had an outstanding ABL Facility balance of $159.1 million, excluding unamortized debt issuance costs. The effective interest rate was 2.0% at December 31, 2020.

The Company has a Floor Plan Facility with its first lien lender to primarily finance new inventory. This Floor Plan Facility has a maximum borrowing capacity of $40 million. The interest cost for the first lien lender floor plan facility is LIBOR plus an applicable margin. The effective interest rate at March 31, 2021 was 2.9%. The floor plan is collateralized by substantially all assets of the Company. As of March 31, 2021, the Company had an outstanding balance on their first lien lender floor plan facility of $34.3 million, excluding unamortized debt issuance costs.

As of December 31, 2020, the Company had an outstanding balance on their first lien lender floor plan facility of $35.3 million, excluding unamortized debt issuance costs. The effective interest rate at December 31, 2020 was 2.9%.

Original Equipment Manufacturer (“OEM”) Captive Lenders and Suppliers’ Floor Plans

The Company has floor plan financing facilities with several OEM captive lenders and suppliers for new and used inventory and rental equipment, each with borrowing capacities ranging from $2.0 million to $102.0 million. Primarily, the Company utilizes the facilities for purchases of new equipment inventories. Certain floor plans provide for up to twelve-months interest only or deferred payment periods. In addition, certain floor plans provide for interest and principal free terms at the suppliers’ discretion. The Company routinely sells equipment that is financed under OEM captive lender floor plans prior to the original maturity date of the financing agreement. When this occurs, the related OEM captive lender floor plan payable becomes due to be paid at the time the equipment being financed is sold. 

With the recent acquisitions, the Company’s floor plan financing facilities with its OEM capital lenders and suppliers were amended to include the new locations and new entities. The floor plan financing facilities are secured by the equipment being financed, and contain operating company guarantees. The interest is LIBOR plus an applicable margin. The effective rates, excluding the favorable effect of interest-subsidies, as of March 31, 2021 ranged from 3.2% to 4.1%. As of March 31, 2021, the Company had an outstanding balance on these floor plans of $120.0 million.

The total aggregate amount of floor plan financing (including the first lien lender floor plan) cannot exceed $250.0 million at any time. Total balance related to floorplan financing as of March 31, 2021 and December 31, 2020 was $154.3 million and $157.5 million, respectively, excluding unamortized debt issuance costs. For the three months ended March 31, 2021 and 2020, the Company recognized interest expense associated with new equipment financed under its floor plan facilities of $0.5 million and $0.7 million, respectively.

Maximum borrowings under the floor plans and ABL Facility are limited to $550 million. The total amount outstanding as of March 31, 2021 and December 31, 2020 was $325.2 million and $316.6 million, exclusive of debt issuance and deferred financings costs of $1.4 million and $1.5 million, respectively.

Each of the ABL Facility and the Floor Plan Facility was amended and restated in its entirety on April 1, 2021. See Note 18, Subsequent Events – Amended and Restated Credit Arrangements for further information.

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Long-term Debt

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

LONG-TERM DEBT

NOTE 10 — LONG-TERM DEBT

The Company entered into a new Note Purchase Agreement (the “Term Loan”) dated as of February 3, 2020 in connection with the reverse recapitalization,for the purposes of, among other things, (i) financing the reverse recapitalization, (ii) financing the acquisitions of Flagler and Liftech; and (iii) providing for the repayment and refinance of a portion of the Company’s prior existing debt.

Term Loan

On February 14, 2020, the Company entered into a Note Purchase Agreement which comprised of a term loan in an aggregate principal amount of $155.0 million with its second priority lien lender through syndication, with an initial maturity date of August 2025. In connection with the new Term Loan, the Company retired the Prior Note Purchase Agreement.The term loanis payable, at the lender’s option, in quarterly installments of $1.9 million plus interest at LIBOR plus 8%. As of March 31, 2021, the effective interest rate was 9.8%. The Term loan is collateralized by substantially all assets of the Company.

As of March 31, 2021, outstanding borrowings under the term loan were $147.3 million, which included $6.0 million deferred financing costs and original issue discounts.

On April 1, 2021, we completed a private offering of $315 million of our 5.625% Senior Secured Second Lien Notes due 2026 (the “Notes”). The Company used the net proceeds from the sale of the Notes and the new borrowings under the ABL Facility and the Floor Plan Facility, to repay its $147.3 million second lien term loan facility, to repay and refinance a portion of the ABL Facility and the Floor Plan Facility and to pay related fees and expenses. See Note 18, Subsequent events – Issuance of 5.625% Senior Secured Second Lien Notes due 2026 for further information.

Extinguishment of Debt

In the first quarter of 2020, the Company recorded a loss on the extinguishment of debt in the amount of $7.6 million in the line item “Loss on Extinguishment of Debt” in its Consolidated Statements of Operations. This was in accordance with ASC Topic No. 470-50, “Debt – Modifications and Extinguishments” (Topic No. 470), as the transaction was determined to be an extinguishment of the existing debt and an issuance of new debt.

The Company’s long-term debt consists of the following (amounts in millions):

	March 31,			December 31,
	2021			2020
Term Loan	$	147.3		$	149.2
Unamortized debt issuance costs		(1.7	)		(1.8	)
Debt discount		(4.3	)		(4.6	)
Total debt	$	141.3		$	142.8
Less: Current maturities of long-term debt, net		(7.8	)		(7.8	)
Long-term debt, net	$	133.5		$	135.0

As of March 31, 2021, the Company was in compliance with the financial covenants set forth in its debt agreements.

Promissory Note

On June 12, 2020, the Company entered into anunsecured promissory note for $1.0 million at an interest rate of 6.0% on the unpaid principal sum in connection with the PeakLogix acquisition. The promissory note is due one year from the date of the acquisition. Due to the short-term nature of the note, the liability was included in “Other current liabilities” on the Consolidated Balance Sheet as of March 31, 2021.

Notes Payable – Non-Contingent Consideration

The Company acquired all the assets of PeakLogix on June 12, 2020. Pursuant to the purchase agreement, Sellers are entitled to additional cash payments of a minimum of $2.0 million through-out 5-year earn-out period. As of March 31, 2021, the Company recorded a $1.7 million liability related to present value of these minimum cash payments using a market participant discount rate. This additional future liability is recorded as non-contingent liability in “Other liabilities” on the Consolidated Balance Sheet. See Note 15, Fair Value Instruments and Note 16, Business Combinations for further information.

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Contingencies

3 Months Ended

Mar. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

CONTINGENCIES

NOTE 11 — CONTINGENCIES

Guarantees

As of March 31, 2021, and December 31, 2020, the Company was party to certain contracts in which it guarantees the performance of agreements between various third-party financial institutions. The terms of the guarantees range from three to five years. In the event of a default by a third-party lessee, the Company would be required to pay all or a portion of the remaining unpaid obligations as specified in the contract. The estimated exposure related to these guarantees was $1.9 million and $2.4 million at March 31, 2021 and December 31, 2020, respectively. It is anticipated that the third parties will have the ability to repay the debt without the Company having to honor the guarantee; therefore, no amount has been accrued on the Consolidated Balance Sheets at March 31, 2021 and December 31, 2020, respectively.

Legal Proceedings

During the three months ended March 31, 2021 and March 31, 2020, various claims and lawsuits, incidental to the ordinary course of business, were pending against the Company. In the opinion of management, after consultation with legal counsel, resolution of these matters is not expected to have a material effect on the Company’s consolidated financial statements.

Contractual Obligations

The Company does not believe there are any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on the Company. As of March 31, 2021, and December 31, 2020 there was $1.4 million in outstanding letters of credits issued in the normal course of business, respectively.

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Income Taxes

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 12 — INCOME TAXES

The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted rates in effect for the year in which the difference is expected to reverse. Additionally, the impact of changes in the tax rates and laws on deferred taxes, if any, is reflected in the financial statement in the period of enactment. The deferred tax liabilities and assets for the Company represent the difference between the financial statement and tax basis of the partnership interest in Alta Enterprises, LLC. As such, the Company is using the single line item approach.

The income tax provision (benefit) for the three months ended March 31, 2021 and 2020 consisted of the following:

	Three Months Ended March 31,
	2021		2020
Federal taxes-current	$	—	$	—
Federal taxes-deferred		0.4		(0.8	)
State taxes-current		—		—
State taxes-deferred		0.1		(0.3	)
	$	0.5	$	(1.1	)

Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are considered in the relevant period. At the end of each interim reporting period, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

The Company recorded an income tax expense of $0.5 million for the three months ended March 31, 2021 and an income tax benefit of $1.1 million for the three months ended March 31, 2020. As a result of Alta’s first quarter 2021 analysis of the realizability of its deferred tax assets, and after considering tax planning initiatives and other inputs, Alta determined that it was more likely than not that deferred tax assets would not be realized and recorded income tax expense of $0.5 million to establish a valuation allowance.

Alta reviews the realizability of its deferred tax assets on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results are considered, along with any other positive or negative evidence. All of the factors that Alta considers in evaluating whether and when to establish or release all or a portion of the deferred tax asset valuation allowance involve significant judgment.

The effective tax rate for the three months ended March 31, 2021 was (8.8)% when compared to 24.1% for the period from February 14, 2020 to March 31, 2020 in connection with the reverse recapitalization. This was mainly due to the impact of the application of the valuation allowance during the first quarter.

As of December 31, 2020, the Company has federal net operating tax loss carryforwards of approximately 4.7 million, which may be carried forward indefinitely and are eligible to offset 80% of future taxable income.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, includes various income and payroll tax provisions, modifications to federal net operating loss rules, business interest deduction limitations, and bonus depreciation eligibility for qualified improvement property.

The CARES Act did not materially impact our effective tax rate for prior periods, although it will impact the timing of future cash payments for taxes. As of March 31, 2021, we have deferred employer payroll taxes of $5.6 million under the CARES Act, with half of the deferred amounts due by December 31, 2021, and the remaining half due by December 31, 2022.

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Equity

3 Months Ended

Mar. 31, 2021

Equity And Warrants [Abstract]

EQUITY

NOTE 13 — EQUITY

Preferred Stock

On December 22, 2020, the Company closed its underwritten public offering of depositary shares, each representing 1/1000th of a share of 10% Series A Preferred Stock, par value $0.0001 per share. The liquidation preference of each share of Series A Preferred Stock is $25,000 ($25.00 per Depositary Share). At the closing, the Company issued 1,200 shares of Series A Preferred Stock represented by 1,200,000 Depositary Shares issued.

We will pay cumulative cash dividends on the Series A Preferred Stock, when and as declared by our Board of Directors, at the rate of 10% of the $25,000.00 liquidation preference ($25.00 per depositary share) per year (equivalent to $2,500 or $2.50 per depositary share).

Dividends are payable quarterly in arrears, on or about the last day of January, April, July and October, beginning on or about April 30, 2021; provided that if any dividend payment date is not a business day, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day, and no interest, additional dividends or other sums will accumulate. Dividends will accumulate and be cumulative from, and including December 22, 2020, the date of original issuance. The first dividend was scheduled to be paid and was paid on or about April 30, 2021 in the amount of $0.88889 per depositary share. This dividend payment covered the period from and including December 22, 2020 through, but not including, April 30, 2021.

Warrants

As of December 31, 2020, there were warrants outstanding to acquire 8,668,746 shares of the Company’s Common Stock. These warrants were issued in connection with the equity infusion related to reverse recapitalization. The warrants entitle the registered holder to purchase one share of our Class A Common Stock at a price of $11.50 per share, subject to certain adjustments. The warrants will expire five years after February 14, 2020, the date reverse recapitalization was completed or earlier upon redemption or liquidation.

Prior to the reverse recapitalization, the Company granted warrants to purchase 33,333.33 shares of common units in connection with the stock purchase and redemption that occurred on December 27, 2017 (“the 2017 Warrants”). The 2017 Warrants had an exercise price of $0.01 and included a conditional put option, allowing the holder to require the Company to purchase the outstanding warrants, via a settlement upon the following events: (1) upon 75% repayment of senior indebtedness, (2) change in control from a sale transaction, and (3) the maturity of the related debt, which required the Company to settle the warrants in cash. The warrants were to expire December 27, 2027. The 2017 Warrants also included a limited call right, where in the event of a sale transaction, the Company had the right to redeem, in cash, all of the warrants simultaneously at a per common share price equal to the per unit set for the sale transaction.

On February 14, 2020, the Company consummated its reverse recapitalization. As a result, the Company redeemed all the 2017 Warrants outstanding upon closing of the reverse recapitalization and as of December 31, 2020, there were no warrant liabilities on the Consolidated Balance Sheet associated with the 2017 Warrants.

On April 12, 2021, we exchanged all 8,668,746 of our outstanding warrants into shares of our common stock at an exchange ratio of 0.263 shares of common stock per warrant, for an aggregate issuance of approximately 2,279,874 shares of common stock in the exchange. Also, on April 12, 2021, the Acting Chief Accountant and Acting Director of the Division of Corporation Finance of the Securities and Exchange Commission (the “SEC”) released the Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies. See Note 18, Subsequent Events – Warrant Exchange and Part II, 1A “Risk Factors” for further information.

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Share Based Compensation

3 Months Ended

Mar. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

SHARE BASED COMPENSATION

NOTE 14 — SHARE BASED COMPENSATION

During the third quarter 2020, the Compensation Committee of our Board of Directors approved the grant of 690,000 shares of Restricted Stock Units (“RSUs”) to certain directors, officers and employees of the Company under the 2020 Omnibus Incentive Plan. The Company’s plan is to have broad-based, long-term programs intended to attract and retain talented employees and align stockholder and employee interests. We calculated the fair value of the RSUs at grant date based on the closing market price of our common stock at the date of grant. The compensation expense is recognized on a straight-line basis over the requisite vesting period of the award.

The Company recognized total compensation expense of $0.3 million and $0 million for the three months ended March 31, 2021, and 2020 respectively.

As of March 31, 2021, the total unrecognized compensation expense related to the non-vested portion of the Company's restricted stock awards was $1.4 million, which is expected to be recognized over a weighted average period of 2.4 years.

The following table summarizes our restricted stock unit activity as of March 31, 2021:

Restricted Stock Units	Number of units			Weighted average grant date fair value
As of December 31, 2020		300,000		$	7.60
Granted		—			—
Vested		(65,000	)		7.60
Forfeited		—			—
As of March 31, 2021		235,000		$	7.60

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Fair Value Instruments

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

FAIR VALUE INSTRUMENTS

NOTE 15 — FAIR VALUE INSTRUMENTS

The carrying value of financial instruments reported in the accompanying Consolidated Balance Sheets for cash, accounts receivable, accounts payable and accrued expenses payable and other liabilities approximate fair value due to the immediate or short-term nature or maturity of these financial instruments. Based upon current borrowing rates with similar maturities, which are Level 2 fair value inputs, the carrying value of lines of credit, long-term debt, and the guaranteed purchase obligations approximates the fair value as of March 31, 2021 and December 31, 2020.

The following is a description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring basis:

Contingent Consideration

The contingent consideration liability represents the fair value of the future earn-out liability that the Company may be required to pay in conjunction with the acquisitions upon the achievement of certain performance milestones. The earn-out for the acquisitions is measured at fair value in each reporting period, based on level 3 inputs, with any change to the fair value recorded in the Consolidated Statements of Operations.

PeakLogix LLC (“PeakLogix”)

The purchase agreement for the PeakLogix acquisition provides for earn-out payments of a minimum of $2.0 million up to $3.7 million which can be earned through June 30, 2025 based on meeting certain performance milestones. We estimated the fair value of the incremental $1.7 million earn-out payment based on a probability weighted range of outcomes analysis and applied a discount rate that appropriately captures a market participant's view of the risk associated with the obligation. This analysis considered the earn-out payment thresholds, the minimum and maximum range of earn-out payments per the agreement and the expected future cash flows of PeakLogix. The earn-out will be remeasured at each balance sheet date using this approach and any resulting increase or decrease will be reflected in the income statement. Going forward, volatility in the amount of PeakLogix’s actual results and forecasted scenarios could impact the fair value of this contingent consideration.

The Company concluded the future minimum cash payments of $2.0 million will be treated as a non-contingent liability and recorded a $1.7 million liability related to the present value of these minimum cash payments. See Note 10, Long-Term Debt and Note 16, Business Combinations for further information.

In addition to the non-contingent liability, there is a potential earn out payment of $1.7 million to be paid to Sellers over a five-year period. The Company recorded a $1.0 million earn out liability as the acquisition date fair value in “Other Liabilities” on the Consolidated Balance Sheet. See Note 16, Business Combinations for further information.

Hilo Equipment & Services (“Hilo”)

The purchase agreement for the Hilo acquisition provides an earn-out payment of $1.0 million based on meeting certain financial target which can be earned through July 1, 2023. We estimated the fair value of the earn-out liability based on the present value of probability weighted expected future results. See Note 16, Business Combinations for further information.

The following table sets forth, by level of hierarchy, the Company’s recurring measures at fair value as of March 31, 2021 and December 31, 2020, which was presented in “Other Liabilities” on the Consolidated Balance Sheet:

	March 31, 2021
	Level 1		Level 2		Level 3
Liabilities: Contingent consideration	$	—	$	—	$	1.8
	December 30, 2020
	Level 1		Level 2		Level 3
Liabilities: Contingent consideration	$	—	$	—	$	1.8

The following is a summary of changes to Level 3 instruments as of March 31, 2021 and December 31, 2020:

	Contingent Consideration
Balance, January 1, 2020	$	—
Acquisition of PeakLogix		1.0
Acquisition of Hilo		0.8
Change in fair value		—
Balance, December 31, 2020		1.8
Change in fair value		—
Balance, March 31, 2021	$	1.8

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Business Combinations

3 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

BUSINESS COMBINATIONS

NOTE 16 — BUSINESS COMBINATIONS

The following table summarizes the net assets acquired from the acquisitions in 2021 (amounts in millions):

	ScottTech
Cash	$	0.5
Accounts receivable		0.9
Inventory		0.3
Prepaid and other assets		0.1
Property and equipment, net		0.4
Goodwill		1.5
Total Assets	$	3.7
Accounts payable		(0.3	)
Accrued expenses		(0.1	)
Other current liabilities		(0.9	)
Total Liabilities	$	(1.3	)
Net Assets Acquired	$	2.4
Assets acquired net of cash	$	1.9

SCOTTTECH, LLC (“ScottTech”)

On March 1, 2021, the Company acquired all the assets of ScottTech, for a total purchase price of $2.4 million, paid out of available funds.

The estimated fair values of assets acquired, and liabilities assumed are provisional and are based on the information that was available as of the balance sheet date. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practical but no later than one year from the acquisition date.

The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

The following table summarizes the net assets acquired from the acquisitions in 2020 (amounts in millions):

	Flagler			Liftech			Peak			Hilo			Martin			Howell			Vantage			Total
Cash	$	0.4		$	—		$	3.0		$	2.1		$	—		$	—		$	—		$	5.5
Accounts receivable		15.1			4.4			4.6			5.4			1.0			5.3			3.6			39.4
Inventory		37.5			9.6			0.4			4.7			6.8			6.3			7.6			72.9
Prepaid and other assets		0.5			1.0			0.2			0.2			—			—			0.4			2.3
Rental fleet, net		47.8			4.7			—			7.5			6.3			12.4			15.9			94.6
Property and equipment, net		2.9			1.2			0.2			1.7			—			1.1			0.9			8.0
Intangible assets		14.6			1.2			5.8			2.4			1.5			—			—			25.5
Goodwill		5.8			1.5			0.7			3.2			0.8			3.2			0.5			15.7
Total Assets	$	124.6		$	23.6		$	14.9		$	27.2		$	16.4		$	28.3		$	28.9		$	263.9
Floor plan payable		(29.0	)		(3.5	)		—			(4.4	)		—			(0.8	)		(2.5	)		(40.2	)
Accounts payable		(14.0	)		(1.6	)		(1.5	)		(2.8	)		(0.2	)		(1.0	)		(1.5	)		(22.6	)
Accrued expenses		(4.1	)		—			(0.1	)		(0.3	)		(0.1	)		(0.1	)		(0.6	)		(5.3	)
Other current liabilities		—			(0.1	)		(3.9	)		(0.4	)		—			—			(0.1	)		(4.5	)
Other liabilities		(1.3	)		—			—			—			—			—			—			(1.3	)
Total Liabilities	$	(48.4	)	$	(5.2	)	$	(5.5	)	$	(7.9	)	$	(0.3	)	$	(1.9	)	$	(4.7	)	$	(73.9	)
Net Assets Acquired	$	76.2		$	18.4		$	9.4		$	19.3		$	16.1		$	26.4		$	24.2		$	190.0
Assets acquired net of cash	$	75.8		$	18.4		$	6.4		$	17.2		$	16.1		$	26.4		$	24.2		$	184.5

Flagler

On February 14, 2020, in connection with the reverse recapitalization, the Company consummated its acquisition of Flagler for a total purchase price, net of cash, of $75.8 million, which was paid out of funds from the closing of the reverse recapitalization.

The acquisition has been accounted for as a purchase business combination. Under the purchase method of accounting, the assets acquired, and liabilities assumed have been recorded at the acquisition date at their respective fair values in our consolidated financial statements.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection. The fair value of inventory and property, plant, and equipment were estimated to approximate their respective acquisition date net book values. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses. 

Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $79.0 million.

Liftech

On February 14, 2020, in connection with the reverse recapitalization, the Company consummated its acquisition of Liftech for a total purchase price of $18.4 million, which was paid out of funds from the closing of the reverse recapitalization. 

The acquisition has been accounted for as a purchase business combination. Under the purchase method of accounting, the assets acquired, and liabilities assumed have been recorded at the acquisition date at their respective fair values in our consolidated financial statements.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection. The fair value of inventory and property, plant, and equipment were estimated to approximate their respective acquisition date net book values. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

 Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $15.2 million.   

PeakLogix

On June 12, 2020, the Company acquired all the assets of PeakLogix for a total purchase cash consideration of $5.7 million, which was paid out of available funds. Additional consideration includes $1.0 million in an unsecured one-year promissory note at 6% and earn-out payment of a minimum $2.0 million up to a $3.7 million to be paid out to former owners based on meeting certain financial targets throughout a 5-year earn-out period, collectively resulting in an estimated enterprise value of $6.4 million net of cash acquired. In connection with the purchase, PeakLogix LLC was created. See Note 10, Long-Term Debt and Note 15, Fair Value Instruments for further information.

The acquisition has been accounted for as a purchase business combination. Under the purchase method of accounting, the assets acquired, and liabilities assumed have been recorded at the acquisition date at their respective fair values in our consolidated financial statements.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection. The fair value of property, plant, and equipment were estimated to approximate their respective acquisition date net book values. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

The following table summarizes the components of the purchase price at June 12, 2020:

Cash consideration paid *	$	5.7
Promissory Note		1.0
Present value of non-contingent earn-out liability		1.7
Earn-out liability		1.0
Total purchase price	$	9.4

* Includes $3.0 million cash acquired as part of the Business Combination

Hilo

On July 1, 2020, the Company acquired all the assets of Hilo for total purchase price, net of cash, of $17.2 million which was paid out of available funds, and potential earn out payments of an additional $1.0 million.

The acquisition has been accounted for as a purchase business combination. Under the purchase method of accounting, the assets acquired, and liabilities assumed have been recorded at the acquisition date at their respective fair values in our consolidated financial statements.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection. The fair value of inventory and property, plant, and equipment were estimated to approximate their respective acquisition date net book values. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $19.0 million.

The following table summarizes the component of the purchase price at July 1, 2020:

Cash consideration paid *	$	18.5
Earn-out liability		0.8
Total purchase price	$	19.3

* Includes $2.1 million cash acquired as part of the Business Combination

Martin Implement Sales, Inc. (“Martin”)

On September 1, 2020, the Company acquired all the assets of Martin for a total purchase price of $16.1 million, which included floorplan eligible new equipment inventories that was paid out of available funds.  

The acquisition has been accounted for as a purchase business combination. Under the purchase method of accounting, the assets acquired, and liabilities assumed have been recorded at the acquisition date at their respective fair values in our consolidated financial statements.

The fair value of accounts receivable was determined based on the acquisition date net book value and an evaluation of amounts deemed recoverable through subsequent collection. The fair value of inventory and property, plant, and equipment were estimated to approximate their respective acquisition date net book values. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practical but no later than one year from the acquisition date. The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses. 

Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $10.6 million.

Howell Tractor and Equipment, LLC (“Howell”)

On October 30, 2020, the Company acquired all the assets of Howell for a total cash consideration of $22.4 million. The Company issued 507,143 shares of its common stock, valued at $4.0 million, in connection with the purchase agreement, yielding a total purchase price of $26.4 million. Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be $23.1 million.

The estimated fair values of assets acquired, and liabilities assumed are provisional and are based on the information that was available as of the balance sheet date. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practical but no later than one year from the acquisition date.

The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

Vantage Equipment, LLC (“Vantage”)

On December 31, 2020, the Company acquired all the assets of Vantage for a total purchase price of $24.2 million.  Based on the purchase price and the amount of floorplan eligible new equipment inventory acquired in the transaction, the Company estimates total enterprise value at close to be  $22.5 million.    

The estimated fair values of assets acquired, and liabilities assumed are provisional and are based on the information that was available as of the balance sheet date. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practical but no later than one year from the acquisition date.

The Company expects the goodwill recognized to be 100% deductible for income tax purposes. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses.

Pro forma financial information – 2021

The financial effect of the 2021 acquisition, was not material to the consolidated financial statements. As such, pro forma results of operations have not been presented.

Pro forma financial information – 2020

The Company completed the Flagler acquisition on February 14, 2020. Therefore, operating results of Flagler are included in the Company’s Consolidated Statement of Operations from February 14, 2020. Pursuant to ASC 805, pro forma disclosures should be reported whenever the year or interim period of the acquisition is presented. The pro forma information below gives effect to the Flagler acquisition as if the acquisition occurred on January 1, 2020.

	For the three months ended March 31, 2020
(amounts in millions)	The Company			Flagler			Total
Total revenues	$	180.5		$	25.8		$	206.3
Net loss	$	(17.0	)	$	(0.1	)	$	(17.1	)

The financial effect of the other acquisitions, individually and in the aggregate, was not material to the consolidated financial statements. As such, pro forma results of operations including other acquisitions have not been presented.

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Segments

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

SEGMENTS

NOTE 17 — SEGMENTS

The Company has two reportable segments: Material Handling and Construction Equipment. The “Material Handling” segment has been previously reported as our “Industrial” segment. The Company’s segments are determined based on management structure, which is organized based on types of products sold, as described in the following paragraph. The operating results for each segment are reported separately to the Company’s Chief Executive Officer to make decisions regarding the allocation of resources, to assess the Company’s operating performance and to make strategic decisions.

The Material Handling segment is principally engaged in operations related to the sale, service, and rental of lift trucks and other material handling equipment in Michigan, Illinois, Indiana, New York (including New York City), Virginia as well as the New England region (including Boston) of the United States. As of March 31, 2021, the Material Handling segment included the ScottTech acquisition and its related results for the quarter.

The Construction Equipment segment is principally engaged in operations related to the sale, service, and rental of construction equipment in Michigan, Illinois, New York (not including New York City), Florida and the New England region (including Boston) of the United States.

The Company retains various unallocated expense items at the general corporate level, which the Company refers to as “Corporate” in the table below. Corporate holds corporate debt and has minor activity all together. For the quarter ended March 31, 2021, Corporate incurred expenses associated with compensation (including shared based compensation) of our directors, corporate officers and certain members of our shared-services leadership team, consulting and legal fees related to acquisitions and capital raising activities, corporate governance and compliance related matters, certain corporate development related expenses and interest expense associated with original issue discounts and deferred financing cost related to previous capital raises, which were offset with income tax benefit. For the quarter ended March 31, 2020, Corporate incurred $7.6 million in debt extinguishment fees, $7.6 million in transaction costs and other expenses associated with the reverse recapitalization.

Additionally, as it relates to certain allocated corporate level expenses (e.g. audit, tax and other professional fees, interest, IT and HR related expenses, certain corporate marketing expenses, etc.), the Company evaluates and analyzes the appropriateness of expense allocations to each of its business units (and therefore segments) on an annual basis and makes necessary adjustments to these allocations at year-end. The Company uses metrics such as headcount, revenue and total assets, where appropriate, to develop these allocations.

In connection with the purchase of NITCO LLC in 2019, the Company expanded its full-service material handling and construction equipment dealer operations into New England market. Given that the sales of the business was more heavily-weighted to material handling versus construction and that NITCO’s reporting systems made it difficult for the construction business to be observed separate from the Material Handling operation, NITCO’s total financial results were historically presented within our Material Handling segment. On January 1, 2021, with the migration of the NITCO business to the Company’s main ERP system, the Company is now able to report the results for the Material Handling and Construction Equipment results within their respective segments for the NITCO business unit. As such, the Company has re-casted certain prior period segment-level results for the NITCO business unit to be consistent with the current period presentation for appropriate period-over-period comparability.

The following table presents the Company’s results of operations by reportable segment for the three months ended March 31, 2021 (amounts in millions):

	Material Handling		Construction Equipment			Corporate			Total
New and used equipment sales	$	57.4	$	66.4		$	—		$	123.8
Parts sales		15.2		26.2			—			41.4
Service revenue		22.6		16.1			—			38.7
Rental revenue		11.1		22.0			—			33.1
Rental equipment sales		0.5		31.3			—			31.8
Total revenue	$	106.8	$	162.0		$	—		$	268.8
Interest expense		2.2		3.1			0.4			5.7
Depreciation and amortization		4.6		16.8			—			21.4
Net income (loss)	$	1.3	$	(3.3	)		(3.7	)	$	(5.7	)

The following table presents the Company’s results of operations by reportable segment for the three months ended March 31, 2020 (amounts in millions):

	Material Handling		Construction Equipment			Corporate			Total
New and used equipment sales	$	39.7	$	42.5		$	—		$	82.2
Parts sales		14.1		14.6			—			28.7
Service revenue		19.7		10.5			—			30.2
Rental revenue		10.6		14.6			—			25.2
Rental equipment sales		3.5		10.7			—			14.2
Total revenue	$	87.6	$	92.9		$	—		$	180.5
Interest expense		1.4		2.5			2.0			5.9
Depreciation and amortization		4.6		9.3			—			13.9
Net income (loss)	$	1.3	$	(2.2	)	$	(16.1	)	$	(17.0	)

The following table presents the Company’s identified assets by reportable segment  for the period ending March 31, 2021 and December 31, 2020 (amounts in millions):

	March 31, 2021		December 31, 2020
Segment assets:
Material Handling	$	220.7	$	221.5
Construction Equipment		522.6		523.4
Corporate		1.7		1.3
Total assets	$	745.0	$	746.2

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Subsequent Events

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 18 — SUBSEQUENT EVENTS

Warrant Exchange

On April 12, 2021, we exchanged all 8,668,746 of our outstanding warrants into shares of our common stock at an exchange ratio of 0.263 shares of common stock per warrant, for an aggregate issuance of approximately 2,279,874 shares of common stock in the exchange.

Also, on April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (the “SEC Statement”). The SEC Statement sets forth the conclusion of the SEC’s Office of the Chief Accountant that certain provisions included in the warrant agreements entered into by many special purpose acquisition companies require such warrants to be accounted for as liabilities measured at fair value, rather than as equity. The SEC Statement also directs issuers who have accounted for these warrants as equity to consider whether the impact of the change in accounting treatment is material and thus require a restatement of previously issued financial statements. In this Form 10-Q and in our financial statements prior to the exchange of warrants for shares of our common stock, we have classified our private placement warrants and public warrants as equity.

We evaluated the SEC Statement with respect to our accounting treatment of our warrants and have determined that such guidance would have resulted in the private placement warrants, and not the public warrants, being classified as liabilities on the balance sheet as of December 31, 2020 with the mark to market change in fair value reflected in the statement of operations.

Accordingly, we have performed an evaluation of the materiality of this matter in accordance with Staff Accounting Bulletin 99 (“SAB 99”). Notably, of the 8,668,746 warrants that were outstanding since the Business Combination was consummated on February 14, 2020 only 206,250 were private placement warrants subject to liability treatment based on the SEC Statement. To that end, based on our SAB 99 assessment, which included fair value analysis of the 206,250 private placement warrants, we determined that classifying the private placement warrants as liabilities on the balance sheet, versus equity, is immaterial to our historic financial statements and that a restatement is unnecessary.

Issuance of 5.625% Senior Secured Second Lien Notes due 2026

 On April 1, 2021,we completed a private offering of $315 million of our 5.625% Senior Secured Second Lien Notes due 2026 (the “Notes”). The Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended, pursuant to a purchase agreement among the Company, the guarantors party thereto (the “Guarantors”) and J.P. Morgan Securities LLC, as representative of the initial purchasers. The Notes are guaranteed by the Guarantors (the “Guarantees” and, together with the Notes, the “Securities”) on a second lien, senior secured basis. The Notes will also be guaranteed by each of our existing and future domestic subsidiaries that becomes a borrower or guarantor under our or the Guarantors’ indebtedness, including the Credit Agreements (as defined below), amended and restated concurrently with the closing of the Notes offering. The Notes and the Guarantees are secured, subject to certain exceptions and permitted liens, by second-priority liens on substantially all of our assets and the assets of the Guarantors that secure on a first-priority basis all of the indebtedness under our ABL Facility (as defined below) and the Floor Plan Facility (as defined below) and certain hedging and cash management obligations, including, but not limited to, equipment, fixtures, inventory, intangibles and capital stock of our restricted subsidiaries now owned or acquired in the future by us or the Guarantors.

The Notes were issued pursuant to an indenture dated April 1, 2021 (the “Indenture”), among us, the Guarantors and Wilmington Trust, National Association, as trustee and as collateral agent.  The Notes will bear interest at the rate of 5.625% per annum and will mature on April 15, 2026. Interest on the Notes is payable in cash on April 15 and October 15 of each year, beginning on October 15, 2021.

The Company used the net proceeds from the sale of the Notes and the new borrowings under the ABL Facility and the Floor Plan Facility, to repay its $147.3 million second lien term loan facility, to repay and refinance a portion of the ABL Facility and the Floor Plan Facility and to pay related fees and expenses.

Amended and Restated Credit Arrangements

On April 1, 2021, in connection with the offering of the Notes, we entered into:

(i)  a Sixth Amended and Restated ABL First Lien Credit Agreement, dated April 1, 2021, among us, our subsidiaries, JPMorgan Chase Bank, N.A., as Administrative Agent and the lenders who are parties to the agreement (the “ABL Credit Agreement” and the facility thereunder, the “ABL Facility”); and

(ii)  a Sixth Amended and Restated Floor Plan First Lien Credit Agreement among us, certain of our subsidiaries, JPMorgan Chase Bank, N.A., as Administrative Agent and the lenders who are parties to the agreement (the “Floor Plan Credit Agreement” and the facility thereunder, the “Floor Plan Facility”).

The ABL Facility is an asset-based revolving loan facility that provides for borrowings of up to the lesser of $350 million or the borrowing base, in each case, less outstanding loans and letters of credit. The ABL Facility has a maturity date of the earlier of (a) April 1, 2026, or (b) December 1, 2025 if the Notes remain outstanding on December 1, 2025.

The Floor Plan Facility is an asset-based revolving loan facility related to the floor plan equipment that provides for borrowings of up to the lesser of $40 million or the borrowing base. The Floor Plan Facility has an expiration date of the earlier of (a) April 1, 2026, or (b) December 1, 2025 if the Notes remain outstanding on December 1, 2025.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the consolidated accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All significant intercompany transactions and balances have been eliminated in the preparation of the consolidated financial statements. Certain amounts in the prior year have been reclassified to conform with the presentation in the current year.

The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. Operating results for the three months ended March 31, 2021 is not necessarily indicative of the results that may be expected for the year ending December 31, 2021, and therefore, the results and trends in these interim consolidated financial statements may not be the same for the entire year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s 2020 Annual Report on Form 10-K.

The Company updated the depreciable useful lives of certain of its rental equipment product categories based on our year-end analysis of fair value relative to book value, prior-year utilization trends and a review of market participants approach to depreciation for similar products. Per our accounting policy the updates to depreciable useful lives will be adjusted on prospective basis. Specifically, the notable changes for 2021 will be extending the depreciable life on lift trucks in our Material Handling segment to 84 months, extending the depreciable life on certain aerial and crane related assets in our Construction Equipment segment to 120 months and applying straight-line depreciation to underutilized construction equipment assets that are being depreciated on a unit-of-activity basis to the extent the assets meet certain underutilized thresholds. These accounting policies of the Company were also described in Note 2 to the audited consolidated financial statements contained in the Company’s 2020 Annual Report on Form 10-K.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are based on assumptions that we believe are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. Additionally, the COVID-19 outbreak has had an impact on our approach to these estimates and assumptions and any increased severity of the pandemic on our business could result in a reassessment of these estimates and assumptions which, in turn, could affect the reported amounts on our financial statements. Please see section titled Risk Factors in our 2020 Annual Report on Form 10-K for a discussion of risks associated with the COVID-19 pandemic.

Impairment of Long-lived Assets

Impairment of Long-lived Assets

The Company evaluates long-lived assets, such as property and equipment and intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying value of any asset group may not be recoverable.

If the estimated future cash flow (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. When reviewing long-lived assets for impairment, the Company groups long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. After evaluating and weighing all relevant events and circumstances, the Company did not identify any indications necessary to perform an interim impairment test for the long-lived assets as of and for the period ended March 31, 2021.

Goodwill

Goodwill

Pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 350, Intangibles-Goodwill and Other (“ASC 350”), goodwill is recorded as the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired.

The Company evaluates goodwill for impairment at least annually, or more frequently if triggering events occur or other impairment indicators arise which might impair recoverability. Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment (i.e. before aggregation or combination), or one level below an operating segment (i.e. a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component.

After evaluating and weighing all relevant events and circumstances, the Company concluded there was no triggering event that constitutes the need to perform a goodwill impairment test for the period ended March 31, 2021.

Income Taxes

Income Taxes

The Company was formed in 2020 for income tax purposes. Alta Enterprises, LLC was historically and remains a partnership for federal income tax purposes, with each partner being separately taxed on its share of taxable income (loss).  There is no federal income tax expense (benefit) reflected in the Company’s financial statements for any period prior to the reverse recapitalization on February 14, 2020. As the activity resides in Alta Enterprises, LLC, the income tax impact to the Company represents the current income tax calculated at the Consolidated Return level (“Alta Equipment Group Inc and Subsidiaries”), and the deferred impact of the interest in the lower tier partnership.

We use the guidance in FASB ASC Topic 740-270, Income Taxes in Interim Periods, where tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are considered in the relevant period. At the end of each interim reporting period, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected income (loss) before income taxes for the year, projections of the proportion of income (and/or loss) earned and taxed, permanent and temporary differences, and the likelihood of the realizability of deferred tax assets generated in the current year. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or the Company’s tax environment changes. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or to the extent that the expected annual effective income tax rate changes, the effect of the change on prior interim periods is included in the income tax provision in the period in which the change in estimate occurs. We establish valuation allowances for our deferred tax assets if the amount of expected future taxable income is not likely to allow for the use of the deduction or credit.

Share Based Compensation

Share Based Compensation

The Board of Directors approved the Company’s 2020 Omnibus Incentive Plan, which enables the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, other share based awards and cash awards to directors, employees and consultants to improve the ability of the Company to attract, retain, and motivate individuals upon whom the Company’s sustained growth and financial success depend, by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company.

We measure the employee stock-based awards at grant-date fair value using provisions of ASC 718 – Stock Compensation and record compensation expense over the vesting period of the award. The Company made an accounting election upon adoption of Accounting Standard Update (“ASU”) 2016-09 and will recognize forfeitures when they occur. The Company treated equity awards granted to non-employee directors similarly to the equity awards to employees upon adoption of ASU 2018-07.

New Accounting Pronouncements

New Accounting Pronouncements

Pronouncements Not Yet Adopted

Leases (Topic 842)

In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”) that replaces the existing leasing guidance. Topic 842 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance also expands the requirements for lessees to record leases embedded in other arrangements and the required quantitative and qualitative disclosures surrounding leases. Accounting guidance for lessors is largely unchanged.

The Company is still assessing the impact Topic 842 will have on its future revenue and expenses. The new accounting standard is effective for the annual reporting period ended December 31, 2021 with an effective date of January 1, 2021, and the interim reporting periods beginning January 1, 2022. Management is currently assessing the impact the adoption of this standard will have on the Company’s consolidated financial statements as well as the available transition methods.

Financial Instruments — Credit Losses (Topic 326)

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This standard prescribes an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in the timely recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument from the date of initial recognition of the financial instrument.

Measurement of expected credit losses is to be based on relevant forecasts that affect collectability. The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures. Different components of the guidance require modified retrospective or prospective adoption. As amended by ASU 2019-10, the ASU 2016-13 is effective for the annual reporting period beginning on or after December 15, 2022. The Company believes ASU 2016-13 will only have applicability to the Company’s receivables from revenue transactions, or trade receivables, except those arising from rental revenues as ASU 2016-13 does not apply to receivables arising from operating leases. The Company is currently evaluating whether the new guidance, while limited to our non-operating lease trade receivables, will have an impact on the consolidated financial statements or existing internal controls.

Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848)

In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). This guidance is intended to provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform (e.g., discontinuation of LIBOR) if certain criteria are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. The amendments of this ASU should be applied on a prospective basis. Our potential exposure related to the expected cessation of LIBOR is limited to the interest expense we incur on our Credit Facility. We cannot predict the effect of the potential changes to or elimination of LIBOR, the establishment and use of alternative rates or benchmarks, but do not expect a significant impact on our consolidated financial position, and results of operations.

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2021

Revenue From Contract With Customer [Abstract]

Summary of Disaggregated Revenues

The following table summarizes the Company’s disaggregated revenues as presented in the Consolidated Statement of Operations for the three months March 31, 2021 and 2020 by revenue type, and by the applicable accounting standard.

	Three months ended March 31, 2021						Three months ended March 31, 2020
	Topic 840		Topic 606		Total		Topic 840		Topic 606		Total
Revenues:
New and used equipment sales	$	—	$	123.8	$	123.8	$	—	$	82.2	$	82.2
Parts sales		—		41.4		41.4		—		28.7		28.7
Service revenue		—		38.7		38.7		—		30.2		30.2
Rental revenue		33.1		—		33.1		25.2		—		25.2
Rental equipment sales		—		31.8		31.8		—		14.2		14.2
Net revenue	$	33.1	$	235.7	$	268.8	$	25.2	$	155.3	$	180.5

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Inventories (Tables)

3 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Summary of Components of Inventories, Net

The components of inventories, net, consisted of the following (amounts in millions):

	March 31,			December 31,
	2021			2020
New equipment	$	145.8		$	153.5
Used equipment		30.9			31.4
Work in process		7.3			5.4
Parts		42.5			41.6
Gross Inventory	$	226.5		$	231.9
Inventory reserves		(3.1	)		(2.9	)
	$	223.4		$	229.0

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Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2021

Property Plant And Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net, consisted of the following (amounts in millions):

	March 31,			December 31,
	2021			2020
Land	$	0.1		$	0.1
Rental fleet		421.2			418.5
Equipment and leasehold improvements:
Machinery and equipment		5.5			5.5
Autos and trucks		6.4			7.0
Leasehold improvements		9.3			8.7
Office equipment		3.1			3.1
Computer equipment		10.4			9.4
Total Cost	$	456.0		$	452.3
Less: accumulated depreciation and amortization
Rental fleet		(128.3	)		(124.6	)
Equipment, auto and trucks, leasehold improvements and computer and office equipment		(16.9	)		(15.8	)
Total accumulated depreciation and amortization		(145.2	)		(140.4	)
	$	310.8		$	311.9

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Goodwill (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Changes in Carrying Amount of Goodwill in Total and by Reportable Segment

The following table summarizes the changes in the carrying amount of goodwill in total and by reportable segment as of March 31, 2021 and December 31, 2020 (amounts in millions):

	Material Handling		Construction Equipment		Total
Balance, December 31, 2020	$	10.2	$	14.1	$	24.3
Additions		1.5		-		1.5
Balance, March 31, 2021	$	11.7	$	14.1	$	25.8

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Gross Carrying Amount of Intangible Assets and Accumulated Amortization

The gross carrying amount of intangible assets and accumulated amortization as of March 31, 2021 and December 31, 2020 were as follows (amounts in millions):

	March 31, 2021							December 31, 2020
	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Customer relationships	$	25.9	$	(3.7	)	$	22.2	$	25.9	$	(3.1	)	$	22.8
Tradenames		1.6		(0.5	)		1.1		1.6		(0.4	)		1.2
Non-compete agreements		0.8		(0.1	)		0.7		0.8		(0.1	)		0.7
Favorable Market Rent		1.7		(0.1	)		1.6		1.7		(0.1	)		1.6
Total	$	30.0	$	(4.4	)	$	25.6	$	30.0	$	(3.7	)	$	26.3

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Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Long-term Debt

The Company’s long-term debt consists of the following (amounts in millions):

	March 31,			December 31,
	2021			2020
Term Loan	$	147.3		$	149.2
Unamortized debt issuance costs		(1.7	)		(1.8	)
Debt discount		(4.3	)		(4.6	)
Total debt	$	141.3		$	142.8
Less: Current maturities of long-term debt, net		(7.8	)		(7.8	)
Long-term debt, net	$	133.5		$	135.0

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Income Tax Provision (Benefit)

The income tax provision (benefit) for the three months ended March 31, 2021 and 2020 consisted of the following:

	Three Months Ended March 31,
	2021		2020
Federal taxes-current	$	—	$	—
Federal taxes-deferred		0.4		(0.8	)
State taxes-current		—		—
State taxes-deferred		0.1		(0.3	)
	$	0.5	$	(1.1	)

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Share Based Compensation (Tables)

3 Months Ended

Mar. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Share Based Compensation Restricted Stock Unit Activity

The following table summarizes our restricted stock unit activity as of March 31, 2021:

Restricted Stock Units	Number of units			Weighted average grant date fair value
As of December 31, 2020		300,000		$	7.60
Granted		—			—
Vested		(65,000	)		7.60
Forfeited		—			—
As of March 31, 2021		235,000		$	7.60

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Fair Value Instruments (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Summary of Recurring Measures at Fair Value by Level of Hierarchy

The following table sets forth, by level of hierarchy, the Company’s recurring measures at fair value as of March 31, 2021 and December 31, 2020, which was presented in “Other Liabilities” on the Consolidated Balance Sheet:

	March 31, 2021
	Level 1		Level 2		Level 3
Liabilities: Contingent consideration	$	—	$	—	$	1.8
	December 30, 2020
	Level 1		Level 2		Level 3
Liabilities: Contingent consideration	$	—	$	—	$	1.8

Summary of Changes to Level 3 Instruments

The following is a summary of changes to Level 3 instruments as of March 31, 2021 and December 31, 2020:

	Contingent Consideration
Balance, January 1, 2020	$	—
Acquisition of PeakLogix		1.0
Acquisition of Hilo		0.8
Change in fair value		—
Balance, December 31, 2020		1.8
Change in fair value		—
Balance, March 31, 2021	$	1.8

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Business Combinations (Tables)

3 Months Ended

Mar. 31, 2021

Business Acquisition [Line Items]

Summary of Net Assets Acquired from Acquisition

The following table summarizes the net assets acquired from the acquisitions in 2020 (amounts in millions):

	Flagler			Liftech			Peak			Hilo			Martin			Howell			Vantage			Total
Cash	$	0.4		$	—		$	3.0		$	2.1		$	—		$	—		$	—		$	5.5
Accounts receivable		15.1			4.4			4.6			5.4			1.0			5.3			3.6			39.4
Inventory		37.5			9.6			0.4			4.7			6.8			6.3			7.6			72.9
Prepaid and other assets		0.5			1.0			0.2			0.2			—			—			0.4			2.3
Rental fleet, net		47.8			4.7			—			7.5			6.3			12.4			15.9			94.6
Property and equipment, net		2.9			1.2			0.2			1.7			—			1.1			0.9			8.0
Intangible assets		14.6			1.2			5.8			2.4			1.5			—			—			25.5
Goodwill		5.8			1.5			0.7			3.2			0.8			3.2			0.5			15.7
Total Assets	$	124.6		$	23.6		$	14.9		$	27.2		$	16.4		$	28.3		$	28.9		$	263.9
Floor plan payable		(29.0	)		(3.5	)		—			(4.4	)		—			(0.8	)		(2.5	)		(40.2	)
Accounts payable		(14.0	)		(1.6	)		(1.5	)		(2.8	)		(0.2	)		(1.0	)		(1.5	)		(22.6	)
Accrued expenses		(4.1	)		—			(0.1	)		(0.3	)		(0.1	)		(0.1	)		(0.6	)		(5.3	)
Other current liabilities		—			(0.1	)		(3.9	)		(0.4	)		—			—			(0.1	)		(4.5	)
Other liabilities		(1.3	)		—			—			—			—			—			—			(1.3	)
Total Liabilities	$	(48.4	)	$	(5.2	)	$	(5.5	)	$	(7.9	)	$	(0.3	)	$	(1.9	)	$	(4.7	)	$	(73.9	)
Net Assets Acquired	$	76.2		$	18.4		$	9.4		$	19.3		$	16.1		$	26.4		$	24.2		$	190.0
Assets acquired net of cash	$	75.8		$	18.4		$	6.4		$	17.2		$	16.1		$	26.4		$	24.2		$	184.5

ScottTech, LLC

Business Acquisition [Line Items]

Summary of Net Assets Acquired from Acquisition

The following table summarizes the net assets acquired from the acquisitions in 2021 (amounts in millions):

	ScottTech
Cash	$	0.5
Accounts receivable		0.9
Inventory		0.3
Prepaid and other assets		0.1
Property and equipment, net		0.4
Goodwill		1.5
Total Assets	$	3.7
Accounts payable		(0.3	)
Accrued expenses		(0.1	)
Other current liabilities		(0.9	)
Total Liabilities	$	(1.3	)
Net Assets Acquired	$	2.4
Assets acquired net of cash	$	1.9

Peak Logix LLC

Business Acquisition [Line Items]

Summary of Purchase Price Allocation

The following table summarizes the components of the purchase price at June 12, 2020:

Cash consideration paid *	$	5.7
Promissory Note		1.0
Present value of non-contingent earn-out liability		1.7
Earn-out liability		1.0
Total purchase price	$	9.4

* Includes $3.0 million cash acquired as part of the Business Combination

Hilo Equipment & Services

Business Acquisition [Line Items]

Summary of Purchase Price Allocation

The following table summarizes the component of the purchase price at July 1, 2020:

Cash consideration paid *	$	18.5
Earn-out liability		0.8
Total purchase price	$	19.3

FlaglerCE Holdings LLC

Business Acquisition [Line Items]

Summary of Pro Forma Information

	For the three months ended March 31, 2020
(amounts in millions)	The Company			Flagler			Total
Total revenues	$	180.5		$	25.8		$	206.3
Net loss	$	(17.0	)	$	(0.1	)	$	(17.1	)

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Segments (Tables)

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Schedule of Results of Operations by Reportable Segment

The following table presents the Company’s results of operations by reportable segment for the three months ended March 31, 2021 (amounts in millions):

	Material Handling		Construction Equipment			Corporate			Total
New and used equipment sales	$	57.4	$	66.4		$	—		$	123.8
Parts sales		15.2		26.2			—			41.4
Service revenue		22.6		16.1			—			38.7
Rental revenue		11.1		22.0			—			33.1
Rental equipment sales		0.5		31.3			—			31.8
Total revenue	$	106.8	$	162.0		$	—		$	268.8
Interest expense		2.2		3.1			0.4			5.7
Depreciation and amortization		4.6		16.8			—			21.4
Net income (loss)	$	1.3	$	(3.3	)		(3.7	)	$	(5.7	)

The following table presents the Company’s results of operations by reportable segment for the three months ended March 31, 2020 (amounts in millions):

	Material Handling		Construction Equipment			Corporate			Total
New and used equipment sales	$	39.7	$	42.5		$	—		$	82.2
Parts sales		14.1		14.6			—			28.7
Service revenue		19.7		10.5			—			30.2
Rental revenue		10.6		14.6			—			25.2
Rental equipment sales		3.5		10.7			—			14.2
Total revenue	$	87.6	$	92.9		$	—		$	180.5
Interest expense		1.4		2.5			2.0			5.9
Depreciation and amortization		4.6		9.3			—			13.9
Net income (loss)	$	1.3	$	(2.2	)	$	(16.1	)	$	(17.0	)

Summary of Identified Assets by Reportable Segment

The following table presents the Company’s identified assets by reportable segment  for the period ending March 31, 2021 and December 31, 2020 (amounts in millions):

	March 31, 2021		December 31, 2020
Segment assets:
Material Handling	$	220.7	$	221.5
Construction Equipment		522.6		523.4
Corporate		1.7		1.3
Total assets	$	745.0	$	746.2

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Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended
	Mar. 31, 2021 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Federal tax expense (benefit)	$ 0
Lift Trucks | Material Handling Segment
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment useful life	84 months
Aerial and Crane Related Assets | Construction Segment
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment useful life	120 months

XML

Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Disaggregation Of Revenue [Line Items]
Lease liability	$ 3.4		$ 3.8
Liability for its guarantee to repurchase the equipment at residual amount	8.5		9.0
Net revenue	268.8	$ 180.5
Revenue recognized from guaranteed maintenance contracts	4.3	4.0
Service Sales Agreements, Rental Agreements and Automated Equipment Installation and System Integration Services
Disaggregation Of Revenue [Line Items]
Deferred revenue	10.0		$ 9.6
Automated Equipment Installation and System Integration Services
Disaggregation Of Revenue [Line Items]
Net revenue	$ 7.9	$ 0.0

XML

Revenue Recognition - Summary of Disaggregated Revenues (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues:
Net revenue	$ 268.8	$ 180.5
Accounting Standards Update Topic 840
Revenues:
Net revenue	33.1	25.2
Topic 606
Revenues:
Net revenue	235.7	155.3
New and Used Equipment Sales
Revenues:
Net revenue	123.8	82.2
New and Used Equipment Sales | Topic 606
Revenues:
Net revenue	123.8	82.2
Parts Sales
Revenues:
Net revenue	41.4	28.7
Parts Sales | Topic 606
Revenues:
Net revenue	41.4	28.7
Service Revenue
Revenues:
Net revenue	38.7	30.2
Service Revenue | Topic 606
Revenues:
Net revenue	38.7	30.2
Rental Revenue
Revenues:
Net revenue	33.1	25.2
Rental Revenue | Accounting Standards Update Topic 840
Revenues:
Net revenue	33.1	25.2
Rental Equipment Sales
Revenues:
Net revenue	31.8	14.2
Rental Equipment Sales | Topic 606
Revenues:
Net revenue	$ 31.8	$ 14.2

XML

Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Related Party Lease Agreements
Related Party Transaction [Line Items]
Operating lease, Rent expense	$ 1.2	$ 1.2

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Inventories - Summary of Components of Inventories, Net (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
New equipment	$ 145.8	$ 153.5
Used equipment	30.9	31.4
Work in process	7.3	5.4
Parts	42.5	41.6
Inventory, Gross	226.5	231.9
Inventory reserves	(3.1)	(2.9)
Inventory, Net	$ 223.4	$ 229.0

XML

Inventories - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Inventory Disclosure [Abstract]
Capitalized direct labor expense included in work in process	$ 2.1		$ 1.7
Rental depreciation expense	$ 2.0	$ 0.8

XML

Property and Equipment - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Property Plant and Equipment [Line Items]
Total Cost	$ 456.0	$ 452.3
Total accumulated depreciation and amortization	(145.2)	(140.4)
Property and equipment, net	310.8	311.9
Land
Property Plant and Equipment [Line Items]
Total Cost	0.1	0.1
Rental Fleet
Property Plant and Equipment [Line Items]
Total Cost	421.2	418.5
Total accumulated depreciation and amortization	(128.3)	(124.6)
Machinery and Equipment
Property Plant and Equipment [Line Items]
Total Cost	5.5	5.5
Autos and Trucks
Property Plant and Equipment [Line Items]
Total Cost	6.4	7.0
Leasehold Improvements
Property Plant and Equipment [Line Items]
Total Cost	9.3	8.7
Office Equipment
Property Plant and Equipment [Line Items]
Total Cost	3.1	3.1
Computer Equipment
Property Plant and Equipment [Line Items]
Total Cost	10.4	9.4
Equipment, Auto and Trucks, Leasehold Improvements and Computer and Office Equipment
Property Plant and Equipment [Line Items]
Total accumulated depreciation and amortization	$ (16.9)	$ (15.8)

XML

Property and Equipment - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Property Plant and Equipment [Line Items]
Depreciation and amortization on property and equipment	$ 21.4	$ 13.9
Capital leases assets, gross carrying values	4.0		$ 4.0
Capital leases assets, accumulated amortization balances	2.7		2.5
GPO Assets	12.4		13.0
Property and Equipment
Property Plant and Equipment [Line Items]
Depreciation and amortization on property and equipment	18.7	$ 13.0
Rental Fleet
Property Plant and Equipment [Line Items]
Capital leases assets, accumulated amortization balances	$ 421.2		$ 418.5

XML

Goodwill - Schedule of Changes in Carrying Amount of Goodwill in Total and by Reportable Segment (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)
Goodwill [Line Items]
Beginning balance	$ 24.3
Additions	1.5
Ending balance	25.8
Material Handling Segment
Goodwill [Line Items]
Beginning balance	10.2
Additions	1.5
Ending balance	11.7
Construction Segment
Goodwill [Line Items]
Beginning balance	14.1
Ending balance	$ 14.1

XML

Intangible Assets - Schedule of Gross Carrying Amount of Intangible Assets and Accumulated Amortization (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Finite Lived Intangible Assets [Line Items]
Gross carrying amount	$ 30.0	$ 30.0
Accumulated amortization	(4.4)	(3.7)
Net carrying amount	25.6	26.3
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Gross carrying amount	25.9	25.9
Accumulated amortization	(3.7)	(3.1)
Net carrying amount	22.2	22.8
Non-compete Agreements
Finite Lived Intangible Assets [Line Items]
Gross carrying amount	0.8	0.8
Accumulated amortization	(0.1)	(0.1)
Net carrying amount	0.7	0.7
Tradenames
Finite Lived Intangible Assets [Line Items]
Gross carrying amount	1.6	1.6
Accumulated amortization	(0.5)	(0.4)
Net carrying amount	1.1	1.2
Favorable Market Rent
Finite Lived Intangible Assets [Line Items]
Gross carrying amount	1.7	1.7
Accumulated amortization	(0.1)	(0.1)
Net carrying amount	$ 1.6	$ 1.6

XML

Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 0.7	$ 0.1

XML

Lines of Credit and Floor Plans - Additional Information (Details) - USD ($)		3 Months Ended
	Jan. 11, 2021	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Feb. 14, 2020
Line Of Credit Facility [Line Items]
Recognized interest expense		$ 5,700,000	$ 5,900,000
Amended and Restated Credit Agreement | JP Morgan Chase Bank | Floor Plans
Line Of Credit Facility [Line Items]
Floor plan financing facility		154,300,000		$ 157,500,000	$ 85,000,000
Amended and Restated Credit Agreement | JP Morgan Chase Bank | Aggregate Indebtedness
Line Of Credit Facility [Line Items]
Floor plan financing facility		225,000,000			220,000,000
Maximum borrowing capacity		250,000,000
Recognized interest expense		500,000	$ 700,000
Amended and Restated Credit Agreement | JP Morgan Chase Bank | Revolving Line of Credit
Line Of Credit Facility [Line Items]
Floor plan financing facility		300,000,000			110,000,000
Restated A B L First Lien Credit Agreement
Line Of Credit Facility [Line Items]
Credit line borrowings of instance amounts borrowed on floor plan facilities	$ 225,000,000
Restated A B L First Lien Credit Agreement | Minimum
Line Of Credit Facility [Line Items]
Vendor floor plan limits	225,000,000
Restated A B L First Lien Credit Agreement | Maximum
Line Of Credit Facility [Line Items]
Vendor floor plan limits	$ 250,000,000
First Lien Lender | Floor Plans
Line Of Credit Facility [Line Items]
Floor plan financing facility		40,000,000			$ 85,000,000
First Lien Lender | JP Morgan Chase Bank | Floor Plans
Line Of Credit Facility [Line Items]
Floor plan financing facility		34,300,000		$ 35,300,000
Maximum borrowing capacity		$ 40,000,000
Effective interest rate		2.90%		2.90%
First Lien Lender | JP Morgan Chase Bank | ABL Facility
Line Of Credit Facility [Line Items]
Floor plan financing facility		$ 170,900,000		$ 159,100,000
Maximum borrowing capacity		$ 300,000,000
Effective interest rate		2.00%		2.00%
First Lien Lender | JP Morgan Chase Bank | Floor Plans and ABL Facility
Line Of Credit Facility [Line Items]
Floor plan financing facility		$ 325,200,000		$ 316,600,000
Maximum borrowing capacity		550,000,000
Debt issuance costs		$ 1,400,000		$ 1,500,000
Original Equipment Manufacturer ("OEM") Captive Lenders and Suppliers | JP Morgan Chase Bank | Maximum
Line Of Credit Facility [Line Items]
Interest only or deferred payment period		12 months
Original Equipment Manufacturer ("OEM") Captive Lenders and Suppliers | JP Morgan Chase Bank | Floor Plans
Line Of Credit Facility [Line Items]
Floor plan financing facility		$ 120,000,000
Original Equipment Manufacturer ("OEM") Captive Lenders and Suppliers | JP Morgan Chase Bank | Floor Plans | Minimum
Line Of Credit Facility [Line Items]
Maximum borrowing capacity		$ 2,000,000
Effective interest rate		3.20%
Original Equipment Manufacturer ("OEM") Captive Lenders and Suppliers | JP Morgan Chase Bank | Floor Plans | Maximum
Line Of Credit Facility [Line Items]
Maximum borrowing capacity		$ 102,000,000
Effective interest rate		4.10%

XML

Long-term Debt - Additional Information (Details) - USD ($) $ in Millions				3 Months Ended
	Apr. 01, 2021	Jun. 12, 2020	Feb. 14, 2020	Mar. 31, 2021	Mar. 31, 2020
Debt Instrument [Line Items]
Debt instrument, description				The Company entered into a new Note Purchase Agreement (the “Term Loan”) dated as of February 3, 2020 in connection with the reverse recapitalization, for the purposes of, among other things, (i) financing the reverse recapitalization, (ii) financing the acquisitions of Flagler and Liftech; and (iii) providing for the repayment and refinance of a portion of the Company’s prior existing debt.
Repayment of second lien term loan facility, a portion of ABL Facility and Floor Plan Facility and to pay related fees and expenses				$ 1.9	$ 0.8
Loss on extinguishment of debt				7.6	$ 7.6
Peak Logix LLC
Debt Instrument [Line Items]
Earn-out payment period		5 years
Present value of non-contingent earn-out liability		$ 1.7
Commercial Paper | Peak Logix LLC
Debt Instrument [Line Items]
Unsecured promissory note		$ 1.0
Debt instrument, interest rate		6.00%
5.625% Senior Secured Second Lien Notes due 2026 | Subsequent Event
Debt Instrument [Line Items]
Private offering of notes	$ 315.0
Repayment of second lien term loan facility, a portion of ABL Facility and Floor Plan Facility and to pay related fees and expenses	$ 147.3
Term Loan
Debt Instrument [Line Items]
Floor plan financing facility				147.3
Debt issuance costs				6.0
Notes Payable | Peak Logix LLC | Non-Contingent Consideration
Debt Instrument [Line Items]
Earn-out payment period		5 years
Notes Payable | Peak Logix LLC | Non-Contingent Consideration | Minimum
Debt Instrument [Line Items]
Additional earn-out payment		$ 2.0
Notes Payable | Peak Logix LLC | Non-Contingent Consideration | Other Liabilities
Debt Instrument [Line Items]
Present value of non-contingent earn-out liability				1.7
Second Lien Lender | Term Loan
Debt Instrument [Line Items]
Debt instrument, face amount			$ 155.0
Debt instrument, maturity period			2025-08
Payable in monthly installments				$ 1.9
Effective interest rate				9.80%
Second Lien Lender | Term Loan | LIBOR
Debt Instrument [Line Items]
Debt Instrument, variable rate				8.00%

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Long-term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020
Debt Instrument [Line Items]
Unamortized debt issuance costs		$ (1.8)	$ (1.7)
Debt discount		(4.6)	(4.3)
Total debt		142.8	141.3
Less: Current maturities of long-term debt, net	$ (7.8)	(7.8)	(7.8)
Long-term debt, net of current portion	$ 133.5	135.0	133.5
Term Loan
Debt Instrument [Line Items]
Term Loan		$ 149.2	$ 147.3

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Contingencies - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Commitments And Contingencies [Line Items]
Estimated exposure of guarantees	$ 1,900,000	$ 2,400,000
Guarantees accrued	0	0
Outstanding Letters of Credits	$ 1,400,000	$ 1,400,000
Minimum
Commitments And Contingencies [Line Items]
Term of guarantees	3 years
Maximum
Commitments And Contingencies [Line Items]
Term of guarantees	5 years

XML

Income Taxes - Schedule of Income Tax Provision (Benefit) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Federal Income Tax Expense Benefit Continuing Operations [Abstract]
Federal taxes-current	$ 0
Federal taxes-deferred	400,000	$ (800,000)
State taxes-deferred	100,000	(300,000)
Income tax provision (benefit)	$ 500,000	$ (1,100,000)

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Income Taxes - Additional Information (Details) - USD ($) $ in Millions	2 Months Ended	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Income tax expense (benefit)		$ 0.5	$ (1.1)
Income tax expense, valuation allowance		$ 0.5
Effective income tax rate	24.10%	(8.80%)
Federal net operating tax loss carryforwards				$ 4.7
Percentage of future taxable income				80.00%
Deferred employer payroll taxes under CARES act		$ 5.6

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Equity - Additional Information (Details)			3 Months Ended	12 Months Ended
	Dec. 22, 2020 USD ($) $ / shares shares	Dec. 27, 2017 $ / shares shares	Mar. 31, 2021 $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares	Apr. 30, 2021 $ / shares	Apr. 12, 2021 shares	Feb. 14, 2020 shares
Equity And Warrants [Line Items]
Preferred stock, par value | $ / shares			$ 0.0001	$ 0.0001
Liquidation preference of depository shares, value | $	$ 2,500
Liquidation preference of depository, per share | $ / shares	$ 2.50
Dividend description			Dividends are payable quarterly in arrears, on or about the last day of January, April, July and October, beginning on or about April 30, 2021; provided that if any dividend payment date is not a business day, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day, and no interest, additional dividends or other sums will accumulate. Dividends will accumulate and be cumulative from, and including December 22, 2020, the date of original issuance.
Class Of Warrant Or Right Outstanding | shares		33,333.33		8,668,746
Warrants expire term				5 years
Warrants exercise price | $ / shares		$ 0.01
Purchase of outstanding warrants upon repayment of senior indebtedness percentage		75.00%
Warrants expiration date		Dec. 27, 2027
Warrant liability | $				$ 0
Warrant Agreement
Equity And Warrants [Line Items]
Class Of Warrant Or Right Outstanding | shares							8,668,746
Accounting Standards Update Topic 840
Equity And Warrants [Line Items]
Each warrant exercisable for common stock | shares				1
Warrant
Equity And Warrants [Line Items]
Share Price | $ / shares				$ 11.50
Subsequent Event
Equity And Warrants [Line Items]
Dividend to be paid per share | $ / shares					$ 0.88889
Subsequent Event | Warrant Agreement
Equity And Warrants [Line Items]
Class Of Warrant Or Right Outstanding | shares						8,668,746
Common stock exchange ratio						0.263
Common stock issued in exchange for warrants | shares						2,279,874
10% Series A Preferred Stock
Equity And Warrants [Line Items]
Depositary receipt ratio	0.001		0.001	0.001
Preferred stock, par value | $ / shares	$ 0.0001		$ 0.0001	$ 0.0001
Preferred stock, dividend rate	10.00%		10.00%	10.00%
Liquidation preference, value | $	$ 25,000.00
Liquidation preference per share in terms of depository share | $ / shares	$ 25.00
Preferred stock, shares issued | shares	1,200
Depository Shares
Equity And Warrants [Line Items]
Preferred stock, shares issued | shares	1,200,000		1,200,000	1,200,000

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Share Based Compensation - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Sep. 30, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Compensation expense	$ 0.3	$ 0.0
RSUs | Directors, Officers and Employees | 2020 Omnibus Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares approved for grant			690,000
Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 1.4
Unrecognized compensation expense, weighted average recognition period	2 years 4 months 24 days

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Share Based Compensation - Summary of Share Based Compensation Restricted Stock Unit Activity (Details) - RSUs	3 Months Ended
	Mar. 31, 2021 shares
Number of units
Number of units, Beginning balance	300,000
Number of units, Vested	(65,000)
Number of units, Ending balance	235,000

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Share Based Compensation - Summary of Share Based Compensation Restricted Stock Units Activity (Details) - RSUs	3 Months Ended
	Mar. 31, 2021 $ / shares
Weighted average grant date fair value
Weighted average grant date fair value, Beginning balance	$ 7.60
Weighted average grant date fair value, Vested	7.60
Weighted average grant date fair value, Ending balance	$ 7.60

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Fair Value Instruments - Additional Information (Details) - USD ($)	Jul. 01, 2020	Jun. 12, 2020
Peak Logix LLC
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Earn-out payment		$ 1,700,000
Present value of non-contingent earn-out liability		$ 1,700,000
Earn-out payment period		5 years
Fair value of incremental earn-out payment		$ 1,700,000
Peak Logix LLC | Non-Contingent Consideration
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Non-contingent liability		2,000,000
Hilo Equipment & Services
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Additional earn-out payment	$ 1,000,000
Other Liabilities | Peak Logix LLC
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Earn-out payment		1,000,000
Minimum | Peak Logix LLC
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Earn-out payment		2,000,000
Maximum | Peak Logix LLC
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Earn-out payment		$ 3,700,000

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Fair Value Instruments - Summary of Recurring Measures at Fair Value by Level of Hierarchy (Details) - Level 3 - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities: Contingent consideration	$ 1.8	$ 1.8
Recurring Measures at Fair Value
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities: Contingent consideration	$ 1.8	$ 1.8

XML

Fair Value Instruments - Summary of Changes to Level 3 Instruments (Details) - Level 3 $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Ending balance	$ 1.8
Peak Logix LLC
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Acquisition	1.0
Hilo Equipment & Services
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Acquisition	$ 0.8

XML

Business Combinations - Summary of Net Assets Acquired from Acquisition (Details) - USD ($) $ in Millions							3 Months Ended		12 Months Ended
	Mar. 01, 2021	Oct. 30, 2020	Sep. 01, 2020	Jul. 01, 2020	Jun. 12, 2020	Feb. 14, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Business Acquisition [Line Items]
Goodwill							$ 25.8		$ 24.3
Assets acquired net of cash				$ 2.1	$ 3.0		$ 1.9	$ 91.7
ScottTech, LLC
Business Acquisition [Line Items]
Cash	$ 0.5
Accounts receivable	0.9
Inventory	0.3
Prepaid and other assets	0.1
Property and equipment, net	0.4
Goodwill	1.5
Total Assets	3.7
Accounts payable	(0.3)
Accrued expenses	(0.1)
Other current liabilities	(0.9)
Total Liabilities	(1.3)
Net Assets Acquired	2.4
Assets acquired net of cash	$ 1.9
FlaglerCE Holdings LLC
Business Acquisition [Line Items]
Cash						$ 0.4
Accounts receivable						15.1
Inventory						37.5
Prepaid and other assets						0.5
Property and equipment, net						2.9
Goodwill						5.8
Total Assets						124.6
Accounts payable						(14.0)
Accrued expenses						(4.1)
Total Liabilities						(48.4)
Net Assets Acquired						76.2
Assets acquired net of cash						75.8
Rental fleet, net						47.8
Intangible assets						14.6
Floor plan payable						(29.0)
Other liabilities						(1.3)
Liftech Equipment Companies, Inc.
Business Acquisition [Line Items]
Accounts receivable						4.4
Inventory						9.6
Prepaid and other assets						1.0
Property and equipment, net						1.2
Goodwill						1.5
Total Assets						23.6
Accounts payable						(1.6)
Other current liabilities						(0.1)
Total Liabilities						(5.2)
Net Assets Acquired						18.4
Assets acquired net of cash						18.4
Rental fleet, net						4.7
Intangible assets						1.2
Floor plan payable						$ (3.5)
Peak Logix LLC
Business Acquisition [Line Items]
Cash					3.0
Accounts receivable					4.6
Inventory					0.4
Prepaid and other assets					0.2
Property and equipment, net					0.2
Goodwill					0.7
Total Assets					14.9
Accounts payable					(1.5)
Accrued expenses					(0.1)
Other current liabilities					(3.9)
Total Liabilities					(5.5)
Net Assets Acquired					9.4
Assets acquired net of cash					6.4
Intangible assets					$ 5.8
Hilo Equipment & Services
Business Acquisition [Line Items]
Cash				2.1
Accounts receivable				5.4
Inventory				4.7
Prepaid and other assets				0.2
Property and equipment, net				1.7
Goodwill				3.2
Total Assets				27.2
Accounts payable				(2.8)
Accrued expenses				(0.3)
Other current liabilities				(0.4)
Total Liabilities				(7.9)
Net Assets Acquired				19.3
Assets acquired net of cash				17.2
Rental fleet, net				7.5
Intangible assets				2.4
Floor plan payable				$ (4.4)
Martin Implement Sales, Inc.
Business Acquisition [Line Items]
Accounts receivable			$ 1.0
Inventory			6.8
Goodwill			0.8
Total Assets			16.4
Accounts payable			(0.2)
Accrued expenses			(0.1)
Total Liabilities			(0.3)
Net Assets Acquired			16.1
Assets acquired net of cash			16.1
Rental fleet, net			6.3
Intangible assets			$ 1.5
Howell Tractor and Equipment, LLC
Business Acquisition [Line Items]
Accounts receivable		$ 5.3
Inventory		6.3
Property and equipment, net		1.1
Goodwill		3.2
Total Assets		28.3
Accounts payable		(1.0)
Accrued expenses		(0.1)
Total Liabilities		(1.9)
Net Assets Acquired		26.4
Assets acquired net of cash		26.4
Rental fleet, net		12.4
Floor plan payable		$ (0.8)
Vantage Equipment, LLC
Business Acquisition [Line Items]
Accounts receivable									3.6
Inventory									7.6
Prepaid and other assets									0.4
Property and equipment, net									0.9
Goodwill									0.5
Total Assets									28.9
Accounts payable									(1.5)
Accrued expenses									(0.6)
Other current liabilities									(0.1)
Total Liabilities									(4.7)
Net Assets Acquired									24.2
Assets acquired net of cash									24.2
Rental fleet, net									15.9
Floor plan payable									(2.5)
Flagler, Liftech, Peak, Hilo, Martin, Howell and Vantage
Business Acquisition [Line Items]
Cash									5.5
Accounts receivable									39.4
Inventory									72.9
Prepaid and other assets									2.3
Property and equipment, net									8.0
Goodwill									15.7
Total Assets									263.9
Accounts payable									(22.6)
Accrued expenses									(5.3)
Other current liabilities									(4.5)
Total Liabilities									(73.9)
Net Assets Acquired									190.0
Assets acquired net of cash									184.5
Rental fleet, net									94.6
Intangible assets									25.5
Floor plan payable									(40.2)
Other liabilities									$ (1.3)

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Business Combinations - Additional Information (Details) - USD ($)									3 Months Ended		12 Months Ended
		Mar. 01, 2021	Dec. 31, 2020	Oct. 30, 2020	Sep. 01, 2020	Jul. 01, 2020	Jun. 12, 2020	Feb. 14, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Business Acquisition [Line Items]
Enterprise value, net of cash acquired						$ 2,100,000	$ 3,000,000		$ 1,900,000	$ 91,700,000
ScottTech, LLC
Business Acquisition [Line Items]
Total consideration paid		$ 2,400,000
Percentage of goodwill expected to be deductible for income tax purposes		100.00%
Enterprise value, net of cash acquired		$ 1,900,000
Total consideration paid		$ 2,400,000
FlaglerCE Holdings LLC
Business Acquisition [Line Items]
Total consideration paid								$ 75,800,000
Percentage of goodwill expected to be deductible for income tax purposes								100.00%
Enterprise value, net of cash acquired								$ 75,800,000
Total consideration paid								75,800,000
FlaglerCE Holdings LLC | New Equipment
Business Acquisition [Line Items]
Total consideration paid								79,000,000
Total consideration paid								79,000,000
Liftech Equipment Companies, Inc.
Business Acquisition [Line Items]
Total consideration paid								$ 18,400,000
Percentage of goodwill expected to be deductible for income tax purposes								100.00%
Enterprise value, net of cash acquired								$ 18,400,000
Total consideration paid								18,400,000
Liftech Equipment Companies, Inc. | New Equipment
Business Acquisition [Line Items]
Total consideration paid								15,200,000
Total consideration paid								$ 15,200,000
Peak Logix LLC
Business Acquisition [Line Items]
Total consideration paid							$ 9,400,000
Percentage of goodwill expected to be deductible for income tax purposes							100.00%
Cash Consideration paid	[1]						$ 5,700,000
Additional consideration							1,000,000
Earn-out payment							$ 1,700,000
Earn-out payment period							5 years
Enterprise value, net of cash acquired							$ 6,400,000
Total consideration paid							9,400,000
Peak Logix LLC | Minimum
Business Acquisition [Line Items]
Earn-out payment							2,000,000
Peak Logix LLC | Maximum
Business Acquisition [Line Items]
Earn-out payment							3,700,000
Peak Logix LLC | Commercial Paper
Business Acquisition [Line Items]
Additional consideration							$ 1,000,000
Debt instrument, interest rate							6.00%
Hilo Equipment & Services
Business Acquisition [Line Items]
Total consideration paid						$ 19,300,000
Percentage of goodwill expected to be deductible for income tax purposes						100.00%
Cash Consideration paid	[2]					$ 18,500,000
Enterprise value, net of cash acquired						17,200,000
Additional earn-out payment						1,000,000
Total consideration paid						19,300,000
Hilo Equipment & Services | New Equipment
Business Acquisition [Line Items]
Total consideration paid						19,000,000
Total consideration paid						$ 19,000,000
Martin Implement Sales, Inc.
Business Acquisition [Line Items]
Total consideration paid					$ 16,100,000
Percentage of goodwill expected to be deductible for income tax purposes					100.00%
Enterprise value, net of cash acquired					$ 16,100,000
Total consideration paid					16,100,000
Martin Implement Sales, Inc. | New Equipment
Business Acquisition [Line Items]
Total consideration paid					10,600,000
Total consideration paid					$ 10,600,000
Howell Tractor and Equipment, LLC
Business Acquisition [Line Items]
Total consideration paid				$ 26,400,000
Percentage of goodwill expected to be deductible for income tax purposes				100.00%
Cash Consideration paid				$ 22,400,000
Enterprise value, net of cash acquired				$ 26,400,000
Business acquisition, shares issued				507,143
Business acquisition, shares issued, value				$ 4,000,000
Total consideration paid				26,400,000
Howell Tractor and Equipment, LLC | New Equipment
Business Acquisition [Line Items]
Total consideration paid				23,100,000
Total consideration paid				$ 23,100,000
Vantage Equipment, LLC
Business Acquisition [Line Items]
Total consideration paid			$ 22,500,000
Percentage of goodwill expected to be deductible for income tax purposes			100.00%								100.00%
Cash Consideration paid			$ 24,200,000
Enterprise value, net of cash acquired											$ 24,200,000
Total consideration paid			$ 22,500,000

[1] Includes $3.0 million cash acquired as part of the Business Combination

[2] Includes $2.1 million cash acquired as part of the Business Combination

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Business Combinations - Summary of Components of Purchase Price (Details) - USD ($) $ in Millions		Jul. 01, 2020	Jun. 12, 2020
Peak Logix LLC
Business Acquisition [Line Items]
Cash Consideration paid	[1]		$ 5.7
Promissory Note			1.0
Present value of non-contingent earn-out liability			1.7
Earn-out liability			1.0
Total purchase price			$ 9.4
Hilo Equipment & Services
Business Acquisition [Line Items]
Cash Consideration paid	[2]	$ 18.5
Earn-out liability		0.8
Total purchase price		$ 19.3

[1] Includes $3.0 million cash acquired as part of the Business Combination

[2] Includes $2.1 million cash acquired as part of the Business Combination

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Business Combinations - Summary of Components of Purchase Price (Details) (Parenthetical) - USD ($) $ in Millions			3 Months Ended
	Jul. 01, 2020	Jun. 12, 2020	Mar. 31, 2021	Mar. 31, 2020
Business Combination Consideration Transferred [Abstract]
Business combination, Cash acquired	$ 2.1	$ 3.0	$ 1.9	$ 91.7

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Business Combinations - Summary of Pro Forma Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Business Acquisition Pro Forma Information Nonrecurring Adjustment [Line Items]
Total revenues	$ 268.8	$ 180.5
Net (loss) income	$ (5.7)	(17.0)
FlaglerCE Holdings LLC
Business Acquisition Pro Forma Information Nonrecurring Adjustment [Line Items]
Total revenues		25.8
Net (loss) income		(0.1)
Consolidate Entities And Flagler C E Holdings L L C
Business Acquisition Pro Forma Information Nonrecurring Adjustment [Line Items]
Total revenues		206.3
Net (loss) income		$ (17.1)

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Segments - Additional Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($) Segment	Mar. 31, 2020 USD ($)
Segment Reporting [Abstract]
Number of reportable segments | Segment	2
Loss on debt extinguishment	$ 7.6	$ 7.6
Transaction costs	$ 7.6

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Segments - Schedule of Results of Operations by Reportable Segment (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Segment Reporting Information [Line Items]
Total revenue	$ 268.8	$ 180.5
Interest expense	5.7	5.9
Depreciation and amortization	21.4	13.9
Net income (loss)	(5.7)	(17.0)
New and Used Equipment Sales
Segment Reporting Information [Line Items]
Total revenue	123.8	82.2
Parts Sales
Segment Reporting Information [Line Items]
Total revenue	41.4	28.7
Service Revenue
Segment Reporting Information [Line Items]
Total revenue	38.7	30.2
Rental Revenue
Segment Reporting Information [Line Items]
Total revenue	33.1	25.2
Rental Equipment Sales
Segment Reporting Information [Line Items]
Total revenue	31.8	14.2
Operating Segments | Material Handling Segment
Segment Reporting Information [Line Items]
Total revenue	106.8	87.6
Interest expense	2.2	1.4
Depreciation and amortization	4.6	4.6
Net income (loss)	1.3	1.3
Operating Segments | Construction Segment
Segment Reporting Information [Line Items]
Total revenue	162.0	92.9
Interest expense	3.1	2.5
Depreciation and amortization	16.8	9.3
Net income (loss)	(3.3)	(2.2)
Operating Segments | New and Used Equipment Sales | Material Handling Segment
Segment Reporting Information [Line Items]
Total revenue	57.4	39.7
Operating Segments | New and Used Equipment Sales | Construction Segment
Segment Reporting Information [Line Items]
Total revenue	66.4	42.5
Operating Segments | Parts Sales | Material Handling Segment
Segment Reporting Information [Line Items]
Total revenue	15.2	14.1
Operating Segments | Parts Sales | Construction Segment
Segment Reporting Information [Line Items]
Total revenue	26.2	14.6
Operating Segments | Service Revenue | Material Handling Segment
Segment Reporting Information [Line Items]
Total revenue	22.6	19.7
Operating Segments | Service Revenue | Construction Segment
Segment Reporting Information [Line Items]
Total revenue	16.1	10.5
Operating Segments | Rental Revenue | Material Handling Segment
Segment Reporting Information [Line Items]
Total revenue	11.1	10.6
Operating Segments | Rental Revenue | Construction Segment
Segment Reporting Information [Line Items]
Total revenue	22.0	14.6
Operating Segments | Rental Equipment Sales | Material Handling Segment
Segment Reporting Information [Line Items]
Total revenue	0.5	3.5
Operating Segments | Rental Equipment Sales | Construction Segment
Segment Reporting Information [Line Items]
Total revenue	31.3	10.7
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Interest expense	0.4	2.0
Net income (loss)	$ (3.7)	$ (16.1)

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Segments - Summary of Identified Assets by Reportable Segment (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	$ 745.0	$ 746.2
Operating Segments | Material Handling Segment
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	220.7	221.5
Operating Segments | Construction Segment
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	522.6	523.4
Corporate, Non-Segment
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	$ 1.7	$ 1.3

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Subsequent Events - Additional Information (Details)	Apr. 01, 2021 USD ($)	Apr. 12, 2021 shares	Dec. 31, 2020 shares	Feb. 14, 2020 shares	Dec. 27, 2017 shares
Subsequent Event [Line Items]
Class Of Warrant Or Right Outstanding			8,668,746		33,333.33
Warrant Agreement
Subsequent Event [Line Items]
Class Of Warrant Or Right Outstanding				8,668,746
Warrant Agreement | Private Placement
Subsequent Event [Line Items]
Class Of Warrant Or Right Outstanding				206,250
Subsequent Event | ABL Facility
Subsequent Event [Line Items]
Maximum borrowing capacity | $	$ 350,000,000
Subsequent Event | Floor Plan Facility
Subsequent Event [Line Items]
Maximum borrowing capacity | $	40,000,000
Subsequent Event | 5.625% Senior Secured Second Lien Notes due 2026
Subsequent Event [Line Items]
Senior secured second lien notes | $	$ 315,000,000
Debt instrument, interest rate	5.625%
Notes maturity date	Apr. 15, 2026
Repayment of second lien term loan facility | $	$ 147,300,000
Subsequent Event | Warrant Agreement
Subsequent Event [Line Items]
Class Of Warrant Or Right Outstanding		8,668,746
Common stock exchange ratio		0.263
Common stock issued in exchange for warrants		2,279,874