UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 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 November 9, 2021, there were 32,363,376 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 Stockholders Equity (Deficit) (Unaudited)		4
	Consolidated Statements of Cash Flows (Unaudited)		6
	Notes to Unaudited Consolidated Financial Statements		7
	Note 1.	Organization and Nature of Operations	7
	Note 2.	Summary of Significant Accounting Policies	7
	Note 3.	Revenue Recognition	9
	Note 4.	Related Party Transactions	13
	Note 5.	Inventories	13
	Note 6.	Property and Equipment	13
	Note 7.	Goodwill	14
	Note 8.	Intangible Assets	14
	Note 9.	Lines of Credit and Floor Plans	14
	Note 10.	Long-Term Debt	15
	Note 11.	Contingencies	17
	Note 12.	Income Taxes	17
	Note 13.	Equity	18
	Note 14.	Share Based Compensation	19
	Note 15.	Fair Value Instruments	20
	Note 16.	Business Combinations	21
	Note 17.	Segments	25
	Note 18.	Earnings Per Share	27
	Note 19.	Subsequent Events	28
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		47
Item 4.	Controls and Procedures		47
PART II
Item 1.	Legal Proceedings		48
Item 1A.	Risk Factors		48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		48
Item 3.	Defaults Upon Senior Securities		48
Item 4.	Mine Safety Disclosures		48
Item 5.	Other Information		48
Item 6.	Exhibits		48
Signature			49

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)	September 30, 2021			December 31, 2020
ASSETS
CURRENT ASSETS
Cash	$	1.2		$	1.2
Accounts receivable, net of allowances of $9.9 and $7.1 as of September 30, 2021 and December 31, 2020, respectively		168.2			137.8
Inventories, net		204.9			229.0
Prepaid expenses and other current assets		21.6			13.6
Total current assets		395.9			381.6
PROPERTY AND EQUIPMENT, NET		338.3			311.9
OTHER ASSETS
Goodwill		25.2			24.3
Intangible assets, net		26.2			26.3
Other assets		1.8			2.1
Total other assets		53.2			52.7
TOTAL ASSETS	$	787.4		$	746.2
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Lines of credit, net	$	45.4		$	157.7
Floor plan payable – new equipment		105.0			127.6
Floor plan payable – used and rental equipment		44.5			29.8
Current portion of long-term debt		0.6			8.7
Accounts payable		52.6			58.9
Customer deposits		14.9			9.3
Accrued expenses		41.2			30.1
Other current liabilities		20.3			12.2
Total current liabilities		324.5			434.3
LONG-TERM LIABILITIES
Long-term debt, net of current portion		309.7			135.0
Capital lease obligations, net of current portion		0.2			0.6
Buyback residual obligations, net of current portion		0.5			0.7
Lease liability, net of current portion		1.9			2.5
Guaranteed purchase obligation, net of current portion		5.2			6.9
Other liabilities		9.5			9.3
TOTAL LIABILITIES	$	651.5		$	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 September 30, 2021 and December 31, 2020	$	—		$	—
Common stock, $0.0001 par value, 200,000,000 shares authorized; 32,363,376 issued and outstanding at September 30, 2021, 30,018,502 issued and outstanding at December 31, 2020		—			—
Additional paid-in capital		217.1			216.2
Treasury stock		(5.9	)		(5.9	)
Accumulated deficit		(75.3	)		(53.4	)
TOTAL STOCKHOLDERS’ EQUITY		135.9			156.9
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	787.4		$	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 September 30,						Nine Months Ended September 30,
(in millions, except share and per share amounts)	2021			2020			2021			2020
Revenues:
New and used equipment sales	$	136.8		$	97.9		$	392.6		$	275.2
Parts sales		44.8			35.5			130.3			92.3
Service revenue		41.9			35.5			123.0			94.1
Rental revenue		41.7			32.2			113.0			83.4
Rental equipment sales		29.8			19.5			97.6			48.2
Net revenue	$	295.0		$	220.6		$	856.5		$	593.2
Cost of revenues:
New and used equipment sales		114.3			84.4			333.3			240.3
Parts sales		30.5			24.3			89.8			63.3
Service revenue		17.3			13.5			48.2			35.9
Rental revenue		4.6			5.4			15.3			14.8
Rental depreciation		22.2			19.2			62.9			47.1
Rental equipment sales		25.0			17.1			81.7			41.7
Cost of revenue	$	213.9		$	163.9		$	631.2		$	443.1
Gross profit	$	81.1		$	56.7		$	225.3		$	150.1
General and administrative expenses		72.9			58.4			209.4			153.2
Depreciation and amortization expense		2.2			1.8			6.3			4.5
Total general and administrative expenses		75.1			60.2			215.7			157.7
Income (loss) from operations	$	6.0		$	(3.5	)	$	9.6		$	(7.6	)
Other income (expense)
Interest expense, floor plan payable – new equipment		(0.4	)		(0.5	)		(1.4	)		(1.8	)
Interest expense – other		(5.6	)		(5.6	)		(16.2	)		(15.9	)
Other income		0.2			8.0			0.3			8.7
Loss on extinguishment of debt		—			—			(11.9	)		(7.6	)
Total other (expense) income	$	(5.8	)	$	1.9		$	(29.2	)	$	(16.6	)
Income (loss) before taxes	$	0.2		$	(1.6	)	$	(19.6	)	$	(24.2	)
Income tax provision (benefit)		—			(1.9	)		0.5			(3.4	)
Net Income (loss)	$	0.2		$	0.3		$	(20.1	)	$	(20.8	)
Preferred stock dividends		(0.7	)		—			(1.8	)		—
Net (loss) income available to common shareholders	$	(0.5	)	$	0.3		$	(21.9	)	$	(20.8	)
Basic (loss) income per share	$	(0.02	)	$	0.01		$	(0.69	)	$	(0.81	)
Diluted (loss) income per share	$	(0.02	)	$	0.01		$	(0.69	)	$	(0.81	)
Basic weighted average common shares outstanding		32,363,376			29,221,460			31,484,906			25,689,145
Diluted weighted average common shares outstanding		32,363,376			29,310,674			31,484,906			25,689,145

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

3

ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

	Three Months Ended September 30, 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 Stockholders' Equity (Deficit)
Balance at June 30, 2021		1,200,000	$	—		32,363,376		$	—	$	216.7	$	(74.8	)	$	(5.9	)	$	136.0
Net income		—		—		—			—		—		0.2			—			0.2
Dividends on preferred stock		—		—		—			—		—		(0.7	)		—			(0.7	)
Share based compensation		—		—		—			—		0.4		—			—			0.4
Balance at September 30, 2021		1,200,000	$	—		32,363,376		$	—	$	217.1	$	(75.3	)	$	(5.9	)	$	135.9
	Three Months Ended September 30, 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 Stockholders' Equity (Deficit)
Balance at June 30, 2020		—	$	—		29,511,359		$	—	$	180.4	$	(63.3	)	$	(2.9	)	$	114.2
Net income		—		—		—			—		—		0.3			—			0.3
Share based compensation		—		—		390,000			—		3.2		—			—			3.2
Repurchases of common stock		—		—		(390,000	)		—		—		—			(3.0	)		(3.0	)
Balance at September 30, 2020		—	$	—		29,511,359		$	—	$	183.6	$	(63.0	)	$	(5.9	)	$	114.7

4

	Nine Months Ended September 30, 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 Stockholders' Equity (Deficit)
Balance at December 31, 2020		1,200,000	$	—		30,018,502	$	—	$	216.2	$	(53.4	)	$	(5.9	)	$	156.9
Net loss		—		—		—		—		—		(20.1	)		—			(20.1	)
Dividends on preferred stock		—		—		—		—		—		(1.8	)		—			(1.8	)
Share based compensation		—		—		—		—		0.9		—			—			0.9
Warrants exchanged into common stock		—		—		2,279,874		—		—		—			—			—
Issuance of restricted stock units to employees		—		—