Alta Equipment Group’s material handling revenue rose in the second quarter as the company benefited from exclusive territories and a comprehensive product and service suite.
Material handling revenue jumped 24.8% year over year to $169.1 million, according to the company’s Aug. 9 earnings presentation. Material handling revenue for new and used equipment climbed 25.1% YoY to $90.2 million in revenue, while rental revenue was $18.6 million, up 31% YoY, according to the company’s Wednesday 10-Q filing with the Securities and Exchange Commission (SEC).
The growth of the segment can be attributed to the company’s exclusive Hyster-Yale territory and in-house solutions, Alta Equipment’s Chief Executive Ryan Greenawalt said during the company’s earnings call.
“Our exclusive Hyster-Yale territory, which now includes Eastern Canada, covers the densest population region in North America and provides access to a diverse group of industries and end markets for our products,” he said. “We continue to benefit from the sales synergies with the PeakLogix business and have the capabilities in-house to solve our customers’ most complex material handling needs.”
Alta Equipment’s second-quarter total new- and used- equipment sales clocked in at $254.6 million, up 17.2% YoY, according to the earnings release. In addition, rental revenue landed at $49.6 million, up 13.8% YoY. The company’s total Q2 revenue was $468.4 million, up 15.2% YoY.
“Our focus is on driving and sustaining long-term equipment field population and driving aftermarket support penetration to an increasingly diversified customer base,” Greenwalt said. “We achieved organic revenue growth of 11.2% year-to-date as well as the significant contributions from our acquisitions.”
Livonia, Mich.-based Alta Equipment Group sells, services and rents material handling, construction and environmental processing equipment, according to SEC filings. The company operates 76 locations across the United States and Canada, an increase of five locations sequentially.
Master distribution segment down 20% sequentially
Alta Equipment’s master distribution segment, which the company introduced as a breakout in Q1 alongside material handling and construction to represent the company’s large-scale environmental processing equipment distribution business, contributed $21.4 million in revenues in Q2, down 19.9% quarter over quarter. New- and used- equipment sales represented $18.6 million of the company’s Q2 master distribution revenue, down 20.8% QoQ, while rental revenue tallied $200,000, flat QoQ.
Despite the quarterly decline in revenue, Alta Equipment still maintains confidence in the Ecoverse brand, which is the principal business line under the master distribution segment, and the master distribution segments, Greenwalt said.
“There’s a real need for master distribution in categories of equipment that are very technologically advanced and niche specialized markets that are small, addressable markets, but very specialized,” he said. “We’re in conversation with several specialty line manufacturers about expanding the Ecoverse business to take on additional vendors.”
Meanwhile, Q2 construction segment revenue clocked in at $281.5 million, up 3.9% YoY, according to the presentation. New and used construction equipment sales revenue was $149.2 million, up 2.8% YoY, while rental revenue was $30.8 million, up 4.8% YoY.
“Our construction equipment segment continues to benefit from both high non-residential demand as well as infrastructure and other federal and state governmental legislation in all our operating regions,” Greenwalt said. “In the Northeast, specifically, we are seeing positive impacts due to onshoring projects like chip and EV-related battery and other facilities.”
E-mobility records first significant quarterly performance
Alta Equipment’s e-mobility, or electric vehicle, business revenue came in at $3.1 million in Q2, according to the earnings call. The revenue was due to a fleet purchase by an Illinois-based food producer, Greenwalt said.
“Our e-mobility business is gaining traction, generating $3.1 million in revenue for the quarter, which represents our first significant sales of Nikola’s TRE BEV tractors, and we expect additional orders throughout the balance of this year,” he said. “Our exclusive Nikola territory mirrors our footprint within the U.S., allowing us to market the product to Alta’s existing customers throughout the country.”
While the electric vehicle business recorded its first performance worth noting, the business operations are not material enough to break out as a separate segment, Alta Equipment’s Chief Financial Officer Tony Colucci said during the earnings call.
Shares of Alta Equipment Group Inc. [Nasdaq: ALTG] were trading at $14.53 at market close today, up 47 cents or 3.13% from market open. Alta Equipment has a market capitalization of $470.31 million.