Custom Truck One Source, Inc. Reports Fourth Quarter and Full-Year 2024 Results
CTOS Fourth-Quarter and Full-Year Highlights
-
Total quarterly revenue of
$520.7 million $73.5 million 16.4% , compared to the third quarter of 2024 -
Full-year revenue of
$1,802.3 million 3.4% , compared to 2023 -
Quarterly net income of
$27.6 million $17.4 million -
Full-year net loss of
$28.7 million $50.7 million -
Quarterly Adjusted EBITDA of
$102.0 million $21.8 million 27.2% , compared to the third quarter of 2024 -
Full-year Adjusted EBITDA of
$339.7 million $87.3 million 20.4% , compared to 2023 full-year record Adjusted EBITDA of$426.9 million
“In the fourth quarter, we achieved sequential improvement in revenue, net income and Adjusted EBITDA, driven by continued strong fundamentals across our primary end markets: utility, infrastructure, rail, and telecom. The significant improvements in our core T&D markets that we experienced in the third quarter continued into the fourth quarter, which led to noted sequential increases in rental revenue and rental asset sales within our ERS segment. For the quarter, our rental fleet saw average utilization of just under
Summary Financial Results |
||||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
Three Months Ended September 30, |
|||||||||||
(in |
2024 |
|
2023 |
|
|
2024 |
|
|
2023 |
|
2024 |
|||||
Rental revenue |
$ |
125,461 |
|
$ |
120,244 |
|
$ |
442,953 |
|
|
$ |
478,910 |
|
$ |
108,324 |
|
Equipment sales |
|
359,325 |
|
|
366,967 |
|
|
1,223,036 |
|
|
|
1,253,453 |
|
|
305,476 |
|
Parts sales and services |
|
35,954 |
|
|
34,543 |
|
|
136,291 |
|
|
|
132,737 |
|
|
33,420 |
|
Total revenue |
|
520,740 |
|
|
521,754 |
|
|
1,802,280 |
|
|
|
1,865,100 |
|
|
447,220 |
|
Gross profit |
$ |
118,465 |
|
$ |
126,824 |
|
$ |
390,270 |
|
|
$ |
454,260 |
|
$ |
91,829 |
|
Adjusted Gross Profit1 |
$ |
167,633 |
|
$ |
171,073 |
|
$ |
573,723 |
|
|
$ |
624,924 |
|
$ |
137,785 |
|
Net income |
$ |
27,574 |
|
$ |
16,122 |
|
$ |
(28,655 |
) |
|
$ |
50,712 |
|
$ |
(17,416 |
) |
Adjusted EBITDA1 |
$ |
102,020 |
|
$ |
118,361 |
|
$ |
339,657 |
|
|
$ |
426,930 |
|
$ |
80,205 |
|
1 |
Each of Adjusted Gross Profit and Adjusted EBITDA is a non-GAAP measure. Further information and reconciliations for our non-GAAP measures to the most directly comparable financial measure under |
Summary Financial Results by Segment
Our results are reported for our three segments: Equipment Rental Solutions (“ERS”), Truck and Equipment Sales (“TES”) and Aftermarket Parts and Services (“APS”). ERS encompasses our core rental business, inclusive of sales of rental equipment to our customers. TES encompasses our specialized truck and equipment production and sales activities. APS encompasses sales and rentals of parts, tools and other supplies to our customers, as well as our aftermarket repair service operations.
Equipment Rental Solutions |
||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
Three Months Ended September 30, |
|||||||||
(in |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|||||
Rental revenue |
$ |
120,863 |
|
$ |
116,594 |
|
$ |
430,167 |
|
$ |
463,139 |
|
$ |
105,317 |
Equipment sales |
|
51,612 |
|
|
68,023 |
|
|
167,638 |
|
|
263,028 |
|
|
45,574 |
Total revenue |
|
172,475 |
|
|
184,617 |
|
|
597,805 |
|
|
726,167 |
|
|
150,891 |
Cost of rental revenue |
|
28,294 |
|
|
28,222 |
|
|
116,790 |
|
|
118,236 |
|
|
29,415 |
Cost of equipment sales |
|
39,364 |
|
|
49,799 |
|
|
123,229 |
|
|
198,510 |
|
|
33,975 |
Depreciation of rental equipment |
|
48,266 |
|
|
43,230 |
|
|
179,508 |
|
|
167,199 |
|
|
44,964 |
Total cost of revenue |
|
115,924 |
|
|
121,251 |
|
|
419,527 |
|
|
483,945 |
|
|
108,354 |
Gross profit |
$ |
56,551 |
|
$ |
63,366 |
|
$ |
178,278 |
|
$ |
242,222 |
|
$ |
42,537 |
Adjusted Gross Profit1 |
$ |
104,817 |
|
$ |
106,596 |
|
$ |
357,786 |
|
$ |
409,421 |
|
$ |
87,501 |
1 |
ERS Adjusted Gross Profit is a non-GAAP measure. Further information and reconciliations for our non-GAAP measures to the most directly comparable financial measure under |
Truck and Equipment Sales |
||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
Three Months Ended September 30, |
|||||||||
(in |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|||||
Equipment sales |
$ |
307,713 |
|
$ |
298,944 |
|
$ |
1,055,398 |
|
$ |
990,425 |
|
$ |
259,902 |
Cost of equipment sales |
|
256,738 |
|
|
246,047 |
|
|
876,978 |
|
|
817,639 |
|
|
218,012 |
Gross profit |
$ |
50,975 |
|
$ |
52,897 |
|
$ |
178,420 |
|
$ |
172,786 |
|
$ |
41,890 |
Aftermarket Parts and Services |
||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
Three Months Ended September 30, |
|||||||||
(in |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|||||
Rental revenue |
$ |
4,598 |
|
$ |
3,650 |
|
$ |
12,786 |
|
$ |
15,771 |
|
$ |
3,007 |
Parts and services revenue |
|
35,954 |
|
|
34,543 |
|
|
136,291 |
|
|
132,737 |
|
|
33,420 |
Total revenue |
|
40,552 |
|
|
38,193 |
|
|
149,077 |
|
|
148,508 |
|
|
36,427 |
Cost of revenue |
|
28,711 |
|
|
26,613 |
|
|
111,560 |
|
|
105,791 |
|
|
28,033 |
Depreciation of rental equipment |
|
902 |
|
|
1,019 |
|
|
3,945 |
|
|
3,465 |
|
|
992 |
Total cost of revenue |
|
29,613 |
|
|
27,632 |
|
|
115,505 |
|
|
109,256 |
|
|
29,025 |
Gross profit |
$ |
10,939 |
|
$ |
10,561 |
|
$ |
33,572 |
|
$ |
39,252 |
|
$ |
7,402 |
Summary Combined Operating Metrics |
|||||||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
Three Months Ended September 30, |
||||||||||||||
(in |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
||
Ending OEC(a) (as of period end) |
$ |
1,515,461 |
|
|
$ |
1,455,708 |
|
|
$ |
1,515,461 |
|
|
$ |
1,455,708 |
|
|
$ |
1,493,799 |
|
Average OEC on rent(b) |
$ |
1,211,082 |
|
|
$ |
1,159,164 |
|
|
$ |
1,101,417 |
|
|
$ |
1,183,253 |
|
|
$ |
1,082,679 |
|
Fleet utilization(c) |
|
78.9 |
% |
|
|
77.6 |
% |
|
|
74.3 |
% |
|
|
80.4 |
% |
|
|
73.2 |
% |
OEC on rent yield(d) |
|
38.6 |
% |
|
|
41.1 |
% |
|
|
39.0 |
% |
|
|
40.4 |
% |
|
|
38.4 |
% |
Sales order backlog(e) (as of period end) |
$ |
368,779 |
|
|
$ |
688,559 |
|
|
$ |
368,779 |
|
|
$ |
688,559 |
|
|
$ |
395,603 |
|
(a) |
Ending OEC — original equipment cost (“OEC”) is the original equipment cost of units at the end of the measurement period. |
|
(b) |
Average OEC on rent — Average OEC on rent is calculated as the weighted-average OEC on rent during the stated period. |
|
(c) |
Fleet utilization — total number of days the rental equipment was rented during a specified period of time divided by the total number of days available during the same period and weighted based on OEC. |
|
(d) |
OEC on rent yield (“ORY”) — a measure of return realized by our rental fleet during a period. ORY is calculated as rental revenue (excluding freight recovery and ancillary fees) during the stated period divided by the Average OEC on rent for the same period. For periods less than 12 months, ORY is adjusted to an annualized basis. |
|
(e) |
Sales order backlog — purchase orders received for customized and stock equipment. Sales order backlog should not be considered an accurate measure of future net sales. |
Management Commentary
Consolidated total revenue increased on a sequential quarter basis by
ERS segment rental revenue and rental equipment sales revenue increased by
TES segment revenue increased by
APS segment revenue increased by
During 2024, the Company closed on a sale leaseback transaction with an unrelated third party. Under this transaction, the Company sold eight properties with a combined net book value of
Net income was
Adjusted EBITDA for the fourth quarter of 2024 was
As of December 31, 2024, cash and cash equivalents was
2025 Outlook
We are providing our full-year revenue and Adjusted EBITDA1, 4 guidance for 2025 at this time. We expect 2025 to be a return to growth. We believe TES will continue to benefit from an overall good macro demand environment as well as our strong relationships with our key customers, and chassis and attachment suppliers. After unexpected volatility in our ERS segment rental markets in 2024, primarily in the transmission and distribution utility market, we began to experience a return to strong demand in the second half of fiscal year 2024, that has continued into 2025. Coupled with our efforts to further penetrate the vocational rental market, we believe the ERS outlook from our rental customers for long-term demand and growth will be strong. As a result, we expect to further grow our rental fleet (based on net OEC) by mid-single digits. Regarding TES, further supply chain improvements, healthy, but improved inventory levels exiting 2024, and normalized backlog levels will continue to allow us to produce and deliver even more units again in 2025. Further, as we have begun to make progress on unwinding our significant strategic investment in inventory levels over the last two years, we expect to generate meaningful free cash flow in 2025, setting a target to generate
2025 Consolidated Outlook |
|
|
|
Revenue |
|
— |
|
Adjusted EBITDA1, 4 |
|
— |
|
|
|
|
|
2025 Revenue Outlook by Segment |
|
|
|
ERS |
|
— |
|
TES |
|
— |
|
APS |
|
— |
|
1 |
Adjusted EBITDA is a non-GAAP performance measure that we use to monitor our results of operations, to measure performance against debt covenants and performance relative to competitors. Refer to the section below entitled, “Non-GAAP Financial Performance Measures” for further information about Adjusted EBITDA. |
|
2 |
Levered Free Cash Flow is defined as net cash provided by operating activities, less cash flow for investing activities, excluding acquisitions, plus acquisition of inventory through floor plan payables – non-trade less repayment of floor plan payables – non-trade, both of which are included in cash flow from financing activities in our Consolidated Statements of Cash Flows. |
|
3 |
Net leverage ratio is a non-GAAP performance measure used by management, and we believe it provides useful information to investors because it is an important measure to evaluate our debt levels and progress toward leverage targets, which is consistent with the manner our lenders and management use this measure. Refer to the section below entitled “Non-GAAP Financial and Performance Measures” for further information about net leverage ratio. |
|
4 |
CTOS is unable to present a quantitative reconciliation of its forward-looking Adjusted EBITDA, Levered Free Cash Flow, and Net Leverage Ratio for the year ending December 31, 2025 to their respective most directly comparable GAAP financial measure due to the high variability and difficulty in predicting certain items that affect such GAAP measures including, but not limited to, customer buyout requests on rentals with rental purchase options and income tax expense. Adjusted EBITDA, Levered Free Cash Flow, and Net Leverage Ratio should not be used to predict their respective most directly comparable GAAP measure as the differences between the respective measures are variable and unpredictable. |
CONFERENCE CALL INFORMATION
The Company has scheduled a conference call at 9:00 a.m. Eastern Time on March 5, 2025, to discuss its fourth quarter and full-year 2024 financial results. An audio-only webcast will be publicly available at: investors.customtruck.com. To listen by phone, please dial 1-800-715-9871 or 1-646-307-1963 and provide the operator with conference ID 5195913. A replay of the call will be available until 11:59 p.m. Eastern Time, Thursday, March 12, 2025, by dialing 1-800-770-2030 or 1-609-800-9909 and entering passcode 5195913 followed by the # key.
ABOUT CTOS
CTOS is one of the largest providers of specialty equipment, parts, tools, accessories and services to the electric utility transmission and distribution, telecommunications and rail markets in
FORWARD-LOOKING STATEMENTS
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, as amended, and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “suggests,” “plans,” “targets,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose,” “could,” “would,” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's management’s control, that could cause actual results or outcomes to differ materially from those discussed in this press release. This press release is based on certain assumptions that the Company's management has made in light of its experience in the industry, as well as the Company’s perceptions of historical trends, current conditions, expected future developments and other factors the Company believes are appropriate in these circumstances and at such time. As you read and consider this press release, you should understand that these statements are not guarantees of performance or results. Many factors could affect the Company’s actual performance and results and could cause actual results to differ materially from those expressed in this press release. Important factors, among others, that may affect actual results or outcomes include: increases in labor costs, changes in
CUSTOM TRUCK ONE SOURCE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
|||||||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
Three Months Ended September 30, |
||||||||||||||
(in |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
||
Revenue |
|
|
|
|
|
|
|
|
|
||||||||||
Rental revenue |
$ |
125,461 |
|
|
$ |
120,244 |
|
|
$ |
442,953 |
|
|
$ |
478,910 |
|
|
$ |
108,324 |
|
Equipment sales |
|
359,325 |
|
|
|
366,967 |
|
|
|
1,223,036 |
|
|
|
1,253,453 |
|
|
|
305,476 |
|
Parts sales and services |
|
35,954 |
|
|
|
34,543 |
|
|
|
136,291 |
|
|
|
132,737 |
|
|
|
33,420 |
|
Total revenue |
|
520,740 |
|
|
|
521,754 |
|
|
|
1,802,280 |
|
|
|
1,865,100 |
|
|
|
447,220 |
|
Cost of Revenue |
|
|
|
|
|
|
|
|
|
||||||||||
Cost of rental revenue |
|
28,292 |
|
|
|
28,444 |
|
|
|
116,851 |
|
|
|
120,198 |
|
|
|
29,439 |
|
Depreciation of rental equipment |
|
49,168 |
|
|
|
44,249 |
|
|
|
183,453 |
|
|
|
170,664 |
|
|
|
45,956 |
|
Cost of equipment sales |
|
296,102 |
|
|
|
295,846 |
|
|
|
1,000,207 |
|
|
|
1,016,149 |
|
|
|
251,987 |
|
Cost of parts sales and services |
|
28,713 |
|
|
|
26,391 |
|
|
|
111,499 |
|
|
|
103,829 |
|
|
|
28,009 |
|
Total cost of revenue |
|
402,275 |
|
|
|
394,930 |
|
|
|
1,412,010 |
|
|
|
1,410,840 |
|
|
|
355,391 |
|
Gross Profit |
|
118,465 |
|
|
|
126,824 |
|
|
|
390,270 |
|
|
|
454,260 |
|
|
|
91,829 |
|
Operating Expenses (Income) |
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses |
|
61,222 |
|
|
|
59,429 |
|
|
|
229,544 |
|
|
|
231,403 |
|
|
|
54,630 |
|
Amortization |
|
6,687 |
|
|
|
7,134 |
|
|
|
26,653 |
|
|
|
27,110 |
|
|
|
6,696 |
|
Non-rental depreciation |
|
3,540 |
|
|
|
2,683 |
|
|
|
13,292 |
|
|
|
10,656 |
|
|
|
3,472 |
|
Transaction expenses and other |
|
3,231 |
|
|
|
4,104 |
|
|
|
17,915 |
|
|
|
14,143 |
|
|
|
3,994 |
|
Gain on sale leaseback transaction |
|
(23,497 |
) |
|
|
— |
|
|
|
(23,497 |
) |
|
|
— |
|
|
|
— |
|
Total operating expenses |
|
51,183 |
|
|
|
73,350 |
|
|
|
263,907 |
|
|
|
283,312 |
|
|
|
68,792 |
|
Operating Income |
|
67,282 |
|
|
|
53,474 |
|
|
|
126,363 |
|
|
|
170,948 |
|
|
|
23,037 |
|
Other Expense (Income) |
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net |
|
42,914 |
|
|
|
36,370 |
|
|
|
167,105 |
|
|
|
131,315 |
|
|
|
43,875 |
|
Financing and other income |
|
(2,156 |
) |
|
|
(3,699 |
) |
|
|
(11,555 |
) |
|
|
(18,443 |
) |
|
|
(2,818 |
) |
Total other expense |
|
40,758 |
|
|
|
32,671 |
|
|
|
155,550 |
|
|
|
112,872 |
|
|
|
41,057 |
|
Income (Loss) Before Income Taxes |
|
26,524 |
|
|
|
20,803 |
|
|
|
(29,187 |
) |
|
|
58,076 |
|
|
|
(18,020 |
) |
Income Tax Expense (Benefit) |
|
(1,050 |
) |
|
|
4,681 |
|
|
|
(532 |
) |
|
|
7,364 |
|
|
|
(604 |
) |
Net Income (Loss) |
$ |
27,574 |
|
|
$ |
16,122 |
|
|
$ |
(28,655 |
) |
|
$ |
50,712 |
|
|
$ |
(17,416 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income (Loss) Per Share: |
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
$ |
0.12 |
|
|
$ |
0.07 |
|
|
$ |
(0.12 |
) |
|
$ |
0.21 |
|
|
$ |
(0.07 |
) |
Diluted |
$ |
0.12 |
|
|
$ |
0.07 |
|
|
$ |
(0.12 |
) |
|
$ |
0.21 |
|
|
$ |
(0.07 |
) |
CUSTOM TRUCK ONE SOURCE, INC. CONSOLIDATED BALANCE SHEETS |
|||||||
(in |
December 31, 2024 |
|
December 31, 2023 |
||||
Assets |
|
|
|
||||
Current Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
3,805 |
|
|
$ |
10,309 |
|
Accounts receivable, net |
|
215,873 |
|
|
|
215,089 |
|
Financing receivables, net |
|
8,913 |
|
|
|
30,845 |
|
Inventory |
|
1,049,304 |
|
|
|
985,794 |
|
Prepaid expenses and other |
|
23,557 |
|
|
|
23,862 |
|
Total current assets |
|
1,301,452 |
|
|
|
1,265,899 |
|
Property and equipment, net |
|
130,923 |
|
|
|
142,115 |
|
Rental equipment, net |
|
1,001,651 |
|
|
|
916,704 |
|
Goodwill |
|
704,806 |
|
|
|
704,011 |
|
Intangible assets, net |
|
252,393 |
|
|
|
277,212 |
|
Operating lease assets |
|
94,696 |
|
|
|
38,426 |
|
Other assets |
|
16,046 |
|
|
|
23,430 |
|
Total Assets |
$ |
3,501,967 |
|
|
$ |
3,367,797 |
|
Liabilities and Stockholders' Equity |
|
|
|
||||
Current Liabilities |
|
|
|
||||
Accounts payable |
$ |
88,487 |
|
|
$ |
117,653 |
|
Accrued expenses |
|
69,349 |
|
|
|
73,847 |
|
Deferred revenue and customer deposits |
|
26,250 |
|
|
|
28,758 |
|
Floor plan payables - trade |
|
330,498 |
|
|
|
253,197 |
|
Floor plan payables - non-trade |
|
470,830 |
|
|
|
409,113 |
|
Operating lease liabilities - current |
|
7,445 |
|
|
|
6,564 |
|
Current maturities of long-term debt |
|
7,842 |
|
|
|
8,257 |
|
Total current liabilities |
|
1,000,701 |
|
|
|
897,389 |
|
Long-term debt, net |
|
1,519,882 |
|
|
|
1,487,136 |
|
Operating lease liabilities - noncurrent |
|
88,674 |
|
|
|
32,714 |
|
Deferred income taxes |
|
31,401 |
|
|
|
33,355 |
|
Total long-term liabilities |
|
1,639,957 |
|
|
|
1,553,205 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders' Equity |
|
|
|
||||
Common stock |
|
25 |
|
|
|
25 |
|
Treasury stock, at cost |
|
(88,229 |
) |
|
|
(56,524 |
) |
Additional paid-in capital |
|
1,550,785 |
|
|
|
1,537,553 |
|
Accumulated other comprehensive loss |
|
(14,744 |
) |
|
|
(5,978 |
) |
Accumulated deficit |
|
(586,528 |
) |
|
|
(557,873 |
) |
Total stockholders' equity |
|
861,309 |
|
|
|
917,203 |
|
Total Liabilities and Stockholders' Equity |
$ |
3,501,967 |
|
|
$ |
3,367,797 |
|
CUSTOM TRUCK ONE SOURCE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
|
Twelve Months Ended December 31, |
||||||
(in |
|
2024 |
|
|
|
2023 |
|
Operating Activities |
|
|
|
||||
Net income (Loss) |
$ |
(28,655 |
) |
|
$ |
50,712 |
|
Adjustments to reconcile net income (loss) to net cash flow from operating activities: |
|
|
|
||||
Depreciation and amortization |
|
235,839 |
|
|
|
218,993 |
|
Amortization of debt issuance costs |
|
5,693 |
|
|
|
5,653 |
|
Provision for losses on accounts receivable |
|
10,777 |
|
|
|
8,522 |
|
Share-based compensation |
|
11,859 |
|
|
|
13,309 |
|
Gain on sales and disposals of rental equipment |
|
(46,000 |
) |
|
|
(67,721 |
) |
Change in fair value of derivative and warrants |
|
(527 |
) |
|
|
(2,485 |
) |
Gain on sale leaseback transaction |
|
(23,497 |
) |
|
|
— |
|
Deferred tax expense |
|
(1,662 |
) |
|
|
4,241 |
|
Changes in assets and liabilities: |
|
|
|
||||
Accounts and financing receivables |
|
(21,753 |
) |
|
|
(20,879 |
) |
Inventories |
|
(64,858 |
) |
|
|
(388,063 |
) |
Prepaids, operating leases and other |
|
1,690 |
|
|
|
3,518 |
|
Accounts payable |
|
(27,479 |
) |
|
|
28,339 |
|
Accrued expenses and other liabilities |
|
(4,287 |
) |
|
|
4,339 |
|
Floor plan payables - trade, net |
|
77,301 |
|
|
|
116,563 |
|
Customer deposits and deferred revenue |
|
(2,456 |
) |
|
|
(5,924 |
) |
Net cash flow from operating activities |
|
121,985 |
|
|
|
(30,883 |
) |
Investing Activities |
|
|
|
||||
Acquisition of businesses, net of cash acquired |
|
(6,015 |
) |
|
|
— |
|
Purchases of rental equipment |
|
(398,317 |
) |
|
|
(364,190 |
) |
Proceeds from sales and disposals of rental equipment |
|
204,593 |
|
|
|
229,559 |
|
Proceeds from sale leaseback transaction, net of expenses |
|
52,531 |
|
|
|
— |
|
Purchase of non-rental property and cloud computing arrangements |
|
(40,277 |
) |
|
|
(41,967 |
) |
Net cash flow from investing activities |
|
(187,485 |
) |
|
|
(176,598 |
) |
Financing Activities |
|
|
|
||||
Borrowings under revolving credit facilities |
|
255,706 |
|
|
|
221,046 |
|
Repayments under revolving credit facilities |
|
(225,206 |
) |
|
|
(106,377 |
) |
Proceeds from debt, net issuance costs |
|
7,500 |
|
|
|
21,044 |
|
Repayments of notes payable |
|
(3,186 |
) |
|
|
— |
|
Principal payments on long-term debt |
|
(8,184 |
) |
|
|
(7,679 |
) |
Finance lease payments |
|
— |
|
|
|
(2,682 |
) |
Acquisition of inventory through floor plan payables - non-trade |
|
605,728 |
|
|
|
789,199 |
|
Repayment of floor plan payables - non-trade |
|
(544,011 |
) |
|
|
(673,622 |
) |
Repurchase of common stock |
|
(28,984 |
) |
|
|
(38,845 |
) |
Share-based payments |
|
(1,080 |
) |
|
|
792 |
|
Net cash flow from financing activities |
|
58,283 |
|
|
|
202,876 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
713 |
|
|
|
554 |
|
Net Change in Cash and Cash Equivalents |
|
(6,504 |
) |
|
|
(4,051 |
) |
Cash and Cash Equivalents at Beginning of Period |
|
10,309 |
|
|
|
14,360 |
|
Cash and Cash Equivalents at End of Period |
$ |
3,805 |
|
|
$ |
10,309 |
|
|
|
|
|
||
|
Twelve Months Ended December 31, |
||||
(in |
2024 |
|
2023 |
||
Supplemental Cash Flow Information |
|
|
|
||
Interest paid |
$ |
152,338 |
|
$ |
122,868 |
Income taxes paid |
|
4,140 |
|
|
2,133 |
Non-Cash Investing and Financing Activities |
|
|
|
||
Property and equipment purchases in accounts payable |
|
564 |
|
|
2,120 |
Rental equipment sales in accounts receivable |
|
4,325 |
|
|
22,517 |
CUSTOM TRUCK ONE SOURCE, INC.
NON-GAAP FINANCIAL AND PERFORMANCE MEASURES
In our press release and schedules, and on the related conference call, we report certain financial measures that are not required by, or presented in accordance with,
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP performance measure that we use to monitor our results of operations, to measure performance against debt covenants and performance relative to competitors. We believe Adjusted EBITDA is a useful performance measure because it allows for an effective evaluation of operating performance, without regard to financing methods or capital structures. We exclude the items identified in the reconciliations of net income (loss) to Adjusted EBITDA because these amounts are either non-recurring or can vary substantially within the industry depending upon accounting methods and book values of assets, including the method by which the assets were acquired, and capital structures. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historical costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an indication that results will be unaffected by the items excluded from Adjusted EBITDA. Our computation of Adjusted EBITDA may not be identical to other similarly titled measures of other companies.
We define Adjusted EBITDA as net income or loss before interest expense, income taxes, depreciation and amortization, share-based compensation, and other items that we do not view as indicative of ongoing performance. Our Adjusted EBITDA includes an adjustment to exclude the effects of purchase accounting adjustments when calculating the cost of inventory and used equipment sold. When inventory or equipment is purchased in connection with a business combination, the assets are revalued to their current fair values for accounting purposes. The consideration transferred (i.e., the purchase price) in a business combination is allocated to the fair values of the assets as of the acquisition date, with amortization or depreciation recorded thereafter following applicable accounting policies; however, this may not be indicative of the actual cost to acquire inventory or new equipment that is added to product inventory or the rental fleets apart from a business acquisition. We also include an adjustment to remove the impact of accounting for certain of our rental contracts with customers containing a rental purchase option that are accounted for under GAAP as a sales-type lease. We include this adjustment because we believe continuing to reflect the transactions as an operating lease better reflects the economics of the transactions given our large portfolio of rental contracts. These, and other, adjustments to GAAP net income or loss that are applied to derive Adjusted EBITDA are specified by our senior secured credit agreement and the indenture of our senior secured notes.
Adjusted Gross Profit. We present total gross profit excluding rental equipment depreciation (“Adjusted Gross Profit”) as a non-GAAP financial performance measure. This measure differs from the GAAP definition of gross profit, as we do not include the impact of depreciation expense, which represents non-cash expense. We use this measure to evaluate operating margins and the effectiveness of the cost of our rental fleet.
Net Debt. We present the non-GAAP financial measure “Net Debt,” which is total debt (the most comparable GAAP measure, calculated as current and long-term debt, excluding deferred financing fees, plus current and long-term finance lease obligations) minus cash and cash equivalents. We believe this non-GAAP measure is useful to investors to evaluate our financial position.
Net Leverage Ratio. Net leverage ratio is a non-GAAP performance measure used by management and we believe it provides useful information to investors because it is an important measure to evaluate our debt levels and progress toward leverage targets, which is consistent with the manner our lenders and management use this measure. We define net leverage ratio as net debt divided by Adjusted EBITDA.
CUSTOM TRUCK ONE SOURCE, INC. SCHEDULE 1 — ADJUSTED EBITDA RECONCILIATION (unaudited) |
|||||||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
Three Months Ended September 30, |
||||||||||||||
(in |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
||
Net income (loss) |
$ |
27,574 |
|
|
$ |
16,122 |
|
|
$ |
(28,655 |
) |
|
$ |
50,712 |
|
|
$ |
(17,416 |
) |
Interest expense |
|
26,721 |
|
|
|
24,712 |
|
|
|
105,895 |
|
|
|
94,694 |
|
|
|
27,156 |
|
Income tax expense (benefit) |
|
(1,050 |
) |
|
|
4,681 |
|
|
|
(532 |
) |
|
|
7,364 |
|
|
|
(604 |
) |
Depreciation and amortization |
|
62,554 |
|
|
|
56,909 |
|
|
|
235,807 |
|
|
|
218,993 |
|
|
|
59,295 |
|
EBITDA |
|
115,799 |
|
|
|
102,424 |
|
|
|
312,515 |
|
|
|
371,763 |
|
|
|
68,431 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||
Non-cash purchase accounting impact (1) |
|
4,547 |
|
|
|
6,190 |
|
|
|
16,833 |
|
|
|
19,742 |
|
|
|
4,066 |
|
Transaction and other costs (2) |
|
3,231 |
|
|
|
4,104 |
|
|
|
17,915 |
|
|
|
14,143 |
|
|
|
3,994 |
|
Sales-type lease adjustment (3) |
|
(1,171 |
) |
|
|
2,722 |
|
|
|
4,559 |
|
|
|
10,458 |
|
|
|
1,295 |
|
Gain on sale leaseback transaction (4) |
|
(23,497 |
) |
|
|
— |
|
|
|
(23,497 |
) |
|
|
— |
|
|
|
— |
|
Share-based payments (5) |
|
3,111 |
|
|
|
2,997 |
|
|
|
11,859 |
|
|
|
13,309 |
|
|
|
2,419 |
|
Change in fair value of derivative and warrants (6) |
|
— |
|
|
|
(76 |
) |
|
|
(527 |
) |
|
|
(2,485 |
) |
|
|
— |
|
Adjusted EBITDA |
$ |
102,020 |
|
|
$ |
118,361 |
|
|
$ |
339,657 |
|
|
$ |
426,930 |
|
|
$ |
80,205 |
|
Adjusted EBITDA is defined as net income (loss), as adjusted for provision for income taxes, interest expense, net, depreciation of rental equipment and non-rental depreciation and amortization, and further adjusted for the impact of the fair value mark-up of acquired rental fleet, business acquisition and merger-related costs, including integration, the impact of accounting for certain of our rental contracts with customers that are accounted for under GAAP as sales-type lease and stock compensation expense. This non-GAAP measure is subject to certain limitations.
(1) |
Represents the non-cash impact of purchase accounting, net of accumulated depreciation, on the cost of equipment and inventory sold. The equipment and inventory acquired received a purchase accounting step-up in basis, which is a non-cash adjustment to the equipment cost pursuant to our ABL Credit Agreement and Indenture. |
|
(2) |
Represents transaction and other costs related to acquisitions of businesses; costs associated with closed operations; costs associated with restructuring and business optimization activities (inclusive of systems establishment costs); employee retention and/or severance costs; costs related to start-up/preopenings and openings of locations; reconfiguration or consolidation of facilities or equipment conversion costs. These adjustments are presented as adjustments to net income (loss) pursuant to our ABL Credit Agreement and Indenture. |
|
(3) |
Represents the impact of sales-type lease accounting for certain leases containing rental purchase options (or “RPOs”), as the application of sales-type lease accounting is not deemed to be representative of the ongoing cash flows of the underlying rental contracts. The adjustments are made pursuant to our ABL Credit Agreement and Indenture. The components of this adjustment are presented in the table below: |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
Three Months Ended September 30, |
||||||||||||||||
(in |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
||||
Equipment sales |
$ |
(1,576 |
) |
|
$ |
(1,529 |
) |
|
$ |
(9,849 |
) |
|
$ |
(58,064 |
) |
|
$ |
(3,701 |
) |
||
Cost of equipment sales |
|
1,263 |
|
|
|
1,362 |
|
|
|
9,425 |
|
|
|
55,716 |
|
|
|
4,111 |
|
||
Gross profit |
|
(313 |
) |
|
|
(167 |
) |
|
|
(424 |
) |
|
|
(2,348 |
) |
|
|
410 |
|
||
Interest income |
|
(2,494 |
) |
|
|
(3,770 |
) |
|
|
(11,285 |
) |
|
|
(16,065 |
) |
|
|
(2,766 |
) |
||
Rental invoiced |
|
1,636 |
|
|
|
6,659 |
|
|
|
16,268 |
|
|
|
28,871 |
|
|
|
3,651 |
|
||
Sales-type lease adjustment |
$ |
(1,171 |
) |
|
$ |
2,722 |
|
|
$ |
4,559 |
|
|
$ |
10,458 |
|
|
$ |
1,295 |
|
||
(4) |
During Q4 2024, the Company closed on a sale leaseback transaction with an unrelated third party. The Company sold 8 properties with a combined net book value of |
|
(5) |
Represents non-cash share-based compensation expense associated with the issuance of stock options and restricted stock units. |
|
(6) |
Represents the charge to earnings for our interest rate collar and the change in fair value of the liability for warrants. On July 31, 2024, all of the Company’s stock purchase warrants expired and unexercised. |
Reconciliation of Adjusted Gross Profit (unaudited) The following table presents the reconciliation of adjusted gross profit: |
||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
Three Months Ended September 30, |
|||||||||
(in |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|||||
Revenue |
|
|
|
|
|
|
|
|
|
|||||
Rental revenue |
$ |
125,461 |
|
$ |
120,244 |
|
$ |
442,953 |
|
$ |
478,910 |
|
$ |
108,324 |
Equipment sales |
|
359,325 |
|
|
366,967 |
|
|
1,223,036 |
|
|
1,253,453 |
|
|
305,476 |
Parts sales and services |
|
35,954 |
|
|
34,543 |
|
|
136,291 |
|
|
132,737 |
|
|
33,420 |
Total revenue |
|
520,740 |
|
|
521,754 |
|
|
1,802,280 |
|
|
1,865,100 |
|
|
447,220 |
Cost of Revenue |
|
|
|
|
|
|
|
|
|
|||||
Cost of rental revenue |
|
28,292 |
|
|
28,444 |
|
|
116,851 |
|
|
120,198 |
|
|
29,439 |
Depreciation of rental equipment |
|
49,168 |
|
|
44,249 |
|
|
183,453 |
|
|
170,664 |
|
|
45,956 |
Cost of equipment sales |
|
296,102 |
|
|
295,846 |
|
|
1,000,207 |
|
|
1,016,149 |
|
|
251,987 |
Cost of parts sales and services |
|
28,713 |
|
|
26,391 |
|
|
111,499 |
|
|
103,829 |
|
|
28,009 |
Total cost of revenue |
|
402,275 |
|
|
394,930 |
|
|
1,412,010 |
|
|
1,410,840 |
|
|
355,391 |
Gross Profit |
|
118,465 |
|
|
126,824 |
|
|
390,270 |
|
|
454,260 |
|
|
91,829 |
Plus: depreciation of rental equipment |
|
49,168 |
|
|
44,249 |
|
|
183,453 |
|
|
170,664 |
|
|
45,956 |
Adjusted gross profit |
$ |
167,633 |
|
$ |
171,073 |
|
$ |
573,723 |
|
$ |
624,924 |
|
$ |
137,785 |
Reconciliation of ERS Segment Adjusted Gross Profit and Adjusted Gross Profit from Rentals (unaudited) The following table presents the reconciliation of ERS segment adjusted gross profit: |
||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
Three Months Ended September 30, |
|||||||||
(in |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|||||
Revenue |
|
|
|
|
|
|
|
|
|
|||||
Rental revenue |
$ |
120,863 |
|
$ |
116,594 |
|
$ |
430,167 |
|
$ |
463,139 |
|
$ |
105,317 |
Equipment sales |
|
51,612 |
|
|
68,023 |
|
|
167,638 |
|
|
263,028 |
|
|
45,574 |
Total revenue |
|
172,475 |
|
|
184,617 |
|
|
597,805 |
|
|
726,167 |
|
|
150,891 |
Cost of Revenue |
|
|
|
|
|
|
|
|
|
|||||
Cost of rental revenue |
|
28,294 |
|
|
28,222 |
|
|
116,790 |
|
|
118,236 |
|
|
29,415 |
Cost of equipment sales |
|
39,364 |
|
|
49,799 |
|
|
123,229 |
|
|
198,510 |
|
|
33,975 |
Depreciation of rental equipment |
|
48,266 |
|
|
43,230 |
|
|
179,508 |
|
|
167,199 |
|
|
44,964 |
Total cost of revenue |
|
115,924 |
|
|
121,251 |
|
|
419,527 |
|
|
483,945 |
|
|
108,354 |
Gross profit |
|
56,551 |
|
|
63,366 |
|
|
178,278 |
|
|
242,222 |
|
|
42,537 |
Plus: depreciation of rental equipment |
|
48,266 |
|
|
43,230 |
|
|
179,508 |
|
|
167,199 |
|
|
44,964 |
Adjusted gross profit |
$ |
104,817 |
|
$ |
106,596 |
|
$ |
357,786 |
|
$ |
409,421 |
|
$ |
87,501 |
The following table presents the reconciliation of ERS adjusted gross profit from rentals: |
||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
Three Months Ended September 30, |
|||||||||
(in |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|||||
Rental revenue |
$ |
120,863 |
|
$ |
116,594 |
|
$ |
430,167 |
|
$ |
463,139 |
|
$ |
105,317 |
Cost of rental revenue |
|
28,294 |
|
|
28,222 |
|
|
116,790 |
|
|
118,236 |
|
|
29,415 |
Adjusted gross profit from rentals |
$ |
92,569 |
|
$ |
88,372 |
|
$ |
313,377 |
|
$ |
344,903 |
|
$ |
75,902 |
Reconciliation of Net Debt (unaudited) The following table presents the reconciliation of net debt: |
|||||||
(in |
December 31, 2024 |
December 31, 2023 |
|||||
Current Maturities of Long-Term Debt |
$ |
7,842 |
|
$ |
8,257 |
|
|
Long-Term Debt, Net |
|
1,519,882 |
|
|
1,487,136 |
|
|
Deferred financing fees |
|
19,926 |
|
|
22,406 |
|
|
Less: cash and cash equivalents |
|
(3,805 |
) |
|
(10,309 |
) |
|
Net debt |
$ |
1,543,845 |
|
$ |
1,507,490 |
|
|
Calculation of Net Leverage Ratio (unaudited) The following table presents the calculation of the net leverage ratio: |
|||||
(in |
Twelve Months Ended December 31, 2024 |
Twelve Months Ended December 31, 2023 |
|||
Net debt |
$ |
1,543,845 |
$ |
1,507,490 |
|
Divided by: Adjusted EBITDA |
|
339,657 |
|
426,930 |
|
Net leverage ratio |
|
4.55 |
|
3.53 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20250304047299/en/
INVESTOR CONTACT
Brian Perman, Vice President, Investor Relations
(816) 723 - 7906
investors@customtruck.com
Source: Custom Truck One Source, Inc.
