Alta Equipment Group Q1 Earnings Call Highlights

Key Points

• Alta Equipment Group said first-quarter revenue fell 3% year over year to $410.5 million and adjusted EBITDA came in at $28.1 million, hurt by unusually harsh winter weather and customers pulling equipment purchases into the prior quarter.
• Management said Material Handling bookings are improving, with March the strongest booking month since June 2023 and bookings up more than 20% in Alta’s markets, signaling a potential second-half recovery.
• Alta cut full-year adjusted EBITDA guidance by $5 million to a range of $167.5 million to $182.5 million, while still expecting stronger cash flow and leverage to fall below its 4.5x target by year-end.

Alta Equipment Group NYSE: ALTG reported lower first-quarter revenue and adjusted EBITDA as management said harsh winter weather and a pull-forward of equipment purchases into the prior quarter weighed on activity, while the company maintained that underlying demand trends remain healthy.

Chairman and CEO Ryan Greenawalt said total revenue for the first quarter of 2026 was $410.5 million, down 3% year over year, while adjusted EBITDA was $28.1 million. Chief Financial Officer Tony Colucci said revenue declined 2.1% on an organic basis, primarily due to lower new and used equipment sales.

Greenawalt said the quarter was affected by two factors the company views as “discrete” rather than reflective of weaker demand. First, he said fourth-quarter equipment sales were “exceptionally strong” as customers accelerated purchases before year-end to capture tax benefits from new legislation. Second, unusually harsh winter conditions across Alta’s Midwest and Northeast markets constrained field service activity, parts demand and rental utilization, particularly in January.

Material Handling Bookings Show Signs of Recovery

Alta’s Material Handling segment generated $150.5 million in revenue, down about 4.7% from a year earlier. Greenawalt said the decline was driven mainly by new and used equipment sales, consistent with broader softness in the lift truck industry over the past 18 months.

Management pointed to improving forward indicators in the segment. Greenawalt said March was the strongest single booking month for Material Handling since June 2023, while Colucci said bookings increased more than 20% in Alta’s markets during the quarter. Greenawalt also cited a recent turn positive in the ISM Purchasing Managers Index after two years of contraction, calling it a leading indicator for the lift truck industry.

In response to a question from B. Riley Securities analyst Liam Burke, Colucci said the improvement was not limited to automotive. He said bookings were broad-based across regions and end markets, including distribution, food and beverage, automotive, manufacturing, energy and utilities, and some defense activity.

Colucci said Alta expects the first quarter to be “far and away” the low point for equipment sales this year, citing improving bookings, backlog and momentum exiting the quarter. He also said the company expects a strong second half in Material Handling, in line with commentary from Hyster-Yale, though he noted Alta’s revenue recognition follows a lag from production and shipment to dealer preparation and delivery.

Construction Segment Holds Steady as Season Starts Late

The Construction Equipment segment generated $244.3 million in revenue, essentially flat from the prior year. Greenawalt said underlying demand remains stable, with strong quoting activity across Alta’s markets. He noted particular strength in heavy earthmoving equipment in Florida and said the company recently opened a branch in Fort Pierce to serve growing demand.

Greenawalt said Alta’s construction business is tied to fully funded state and federal infrastructure spending. He cited growing state Department of Transportation budgets in the company’s geographies and said Federal Highway Administration funding from the Infrastructure Investment and Jobs Act remains in an early to mid-deployment stage, with most spending expected in coming years.

Colucci said the northern construction season had a delayed start due to weather, with some deliveries that might normally occur in March shifting into April or later. He said the company expects the first quarter to be the low point for construction, as it typically is, and that the inflection could be stronger given the winter conditions.

Rental Fleet Optimization Remains a Priority

Alta continued to reduce and reposition its rental fleet during the quarter. Greenawalt said rental fleet gross book value declined by about $59.5 million year over year to $524.6 million. He described the reduction as intentional capital management rather than a sign of demand weakness.

Colucci said rental activity is improving as the construction season begins, noting that April saw an incremental $25 million of fleet on rent compared with March. However, he said the company is focused on returns on capital rather than “low ROI EBITDA” and will continue to right-size the fleet.

During the Q&A session, Colucci said Alta completed about $30 million of rental disposals in the first quarter and was ahead of its plan. He said the company may still have “another 30 or so” to go at current rental revenue levels and expects to get there by year-end. Alta’s original plan was to bring the rental fleet below $500 million by year-end, he said, and that target remains intact.

Colucci said Alta is targeting dollar-weighted time utilization in the high 60% range and financial utilization, measured as rental revenue divided by average acquisition cost, in the mid-to-high 30% range.

Ecoverse Margins Expected to Improve

The Ecoverse Master Distribution segment generated $17.1 million in revenue during the quarter. Greenawalt said new equipment margins had been pressured by tariffs since early 2025, but management believes the first quarter marked the end of that compression.

Greenawalt said renegotiated OEM pricing and a recent Supreme Court ruling on tariffs are expected to help restore normal gross margins on European-sourced environmental processing equipment. Colucci later said Alta believes tariff-related margin compression in Ecoverse is largely behind it as renewed pricing agreements with OEMs and IEEPA tariff relief take hold.

Guidance Lowered After First-Quarter Shortfall

Alta lowered its full-year adjusted EBITDA guidance by $5 million at both ends of the range. Colucci said the company now expects adjusted EBITDA of $167.5 million to $182.5 million for fiscal 2026. Alta also expects $100 million to $110 million of free cash flow before rent-to-sell decisioning, with both measures expected to be weighted toward the back half of the year.

Colucci said the company remains on track to be below its 4.5-times leverage target by year-end. Alta generated $20.8 million in operating cash flow in the first quarter, an improvement of $38.3 million from the prior-year quarter. Greenawalt said the improvement reflected rental fleet management, working capital discipline and lower interest expense. Interest expense declined $2.4 million year over year to $19.5 million.

Colucci said Alta maintained approximately $250 million of cash liquidity and kept net leverage effectively flat versus year-end, which he said is notable because leverage typically rises in the first quarter.

Management said several key metrics support its outlook for the balance of the year, including improving Material Handling bookings, stabilizing gross margins, a pickup in construction activity and expected improvement in Ecoverse profitability. Colucci said new and used equipment gross margins increased 240 basis points from the fourth quarter, and in response to a question from Raymond James analyst Steve Hansen, he attributed improving construction equipment margins to declining dealer inventories, reduced discounting by major OEMs and better used equipment values.

Greenawalt said Alta’s priorities for 2026 remain core business growth and product support in high-return segments, operational optimization, targeted talent development and selective mergers and acquisitions where the company sees strategic and financial fit.

About Alta Equipment Group NYSE: ALTG

Alta Equipment Group, Inc NYSE: ALTG is a North American distributor of material handling and logistics equipment. The company offers a broad lineup of forklifts, lift trucks, aerial work platforms, tow motors, pallet jacks and related attachments, serving manufacturing, warehousing, distribution and industrial facilities. Through its network of branch locations, Alta Equipment provides customers with new and used sales, short- and long-term rentals, and integrated fleet management solutions designed to support operational efficiency.

In addition to equipment sales, Alta Equipment supports customers with comprehensive after-sales services.

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