Equipment vendor Alta Equipment Group’s construction and material handling revenue grew in the third quarter as equipment demand remained elevated despite inflation concerns and rising interest rates.
BY THE NUMBERS:
Alta Equipment’s construction and material handling revenue saw a year-over-year revenue increase in Q3, according to the company’s Nov. 8 10-Q filing with the Securities and Exchange Commission.
In the filing, Alta Equipment reported:
Construction segment revenue of $282 million, up 12.9% YoY;
New and used construction equipment sales revenue of $150.8 million, up 19.3% YoY;
Construction rental revenue of $34.1 million, up 4.9% YoY;
Material handling revenue of $168.6 million, up 8.6% YoY;
New and used material handling equipment sales revenue of $89.8 million, up 7.3% YoY;
Material handling rental revenue of $19.6 million, up 10.7% YoY;
For master distribution, the company’s environmental processing equipment distribution segment, revenue fell 15.4% sequentially, dropping to $18.1 million;
New and used master distribution sales revenue landed at $15.2 million, down 18.3% sequentially.
STATE OF PLAY:
Growth in the company’s construction segment came in part due to “tremendous growth” in Florida, and overall resiliency in the face of current market conditions, Alta Equipment’s Chief Executive Ryan Greenawalt said during the company’s earnings call last week.
“Despite the macroeconomic environment, we continue to see strong demand in the diversified markets we serve,” he said. “We are focused on further expansion of this segment going forward. We are happy to see supply chains continue to improve.”
Material handling performance also remained strong, while backlogs and customer sentiment remained elevated, Greenawalt said.
Shares of Alta Equipment Group (NYSE: ALTG) jumped 17.2% or $1.65 at market close Thursday, landing at $11.22, following the company’s earnings call after markets closed Wednesday.
Shares were down 6% or 70 cents from market open to $10.91 as of market close today. Alta Equipment Group has a market capitalization of $375.79 million.
Alta added Case Power & Equipment in Pennsylvania to the company’s dealer network, allowing the company to enter the western and central Pennsylvania market, Greenawalt said. The company will start with two locations serving Pittsburgh and the surrounding areas and intends to expand further into central Pennsylvania.
“Both locations will sell and service the full lineup of Case heavy, compact and subcompact equipment and attachments as well as provide for complementary services, including captive financing, planned maintenance solutions, telematics and parts support,” Greenawalt said.
Alta will also add three Burris Equipment Co. locations in Illinois and two Ault Industries locations in Ontario and Quebec, Canada, in Q4 2023, according to the company’s earnings presentation. The dealer group’s location count following the acquisitions is 85.
THE BOTTOM LINE:
Alta Equipment maintains a favorable outlook for the company’s construction and material handling segments ahead of 2024, Alta Equipment’s Chief Financial Officer Tony Colucci said during the earnings call.
“We will go into 2024 with a record backlog in terms of forklift customers and material handling equipment. We have yet to see a material amount of cancellations related to factors [such as] inflation and interest rates,” he said.