ALTA EQUIPMENT GROUP INC.
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
ALTG$5.93+2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0000950170-25-065698
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0000950170-25-105063
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 88 previous paragraphs and 98 current paragraphs.
53 unchanged; 26 reworded; 18 added; 9 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 15 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
The three and six months ended June 30, 2025 and 2024
Current report
In the six months ended June 30, 2025, total revenues performance reflects the combination of a slower first quarter followed by improved activity in the second quarter, a factor of seasonality in some of the geographies and markets we serve. Organic new and used equipment revenues increased 1.4% against the six months ended June 30, 2024 as strong second quarter growth in our Construction Equipment segment helped offset softness experienced earlier in the year. In the Construction Equipment segment, year-to-date gains were supported by improved deliveries, expanded market share, and solid customer demand across our geographic footprint. Meanwhile, the Material Handling segment experienced a decline in equipment sales due to lower unit deliveries and a modest contraction in market share, primarily in the Midwest regions. Product support revenues have remained relatively stable year to date, declining 1.1% organically for the six months ended June 30, 2025. The decline in the second quarter was more pronounced in the Material Handling segment, where reduced customer fleet activity and reduced billable headcount, particularly in the Midwest, led to softer demand and lower revenues. The Construction Equipment segment, by contrast, maintained stable product support activity, supported by consistent customer demand and strong field execution. Importantly, technician productivity remained high across the enterprise throughout the period and effective headcount management ensured that our workforce remained aligned with service demand. Rental revenues for the six months ended June 30, 2025 declined 12.7% organically driven by a lower average fleet size and reduced fleet utilization across both quarters. Rental equipment sales organically decreased 25.0% for the six months ended June 30, 2025 largely due to the lower size of rent-to-sell fleet in our Construction Equipment segment and as we strategically monitor used equipment supply levels and market activity to maximize return on capital on the rent-to-sell fleet. Elevated sales activity in late 2024 and a lower starting fleet position in 2025 resulted in fewer sales opportunities during the current year period.
Current report
The consolidated gross profit margin for the six months ended June 30, 2025 was 26.2%, a 100 basis point decrease from 27.2% for the same period in 2024. This decrease was primarily driven by lower margins on new and used equipment sales, which decreased 130 basis points to 14.5%, due to a combination of sales mix, a competitive pricing environment related to oversupply, and rising input costs, some of which were influenced by tariffs that could not be fully offset through price adjustments. Rental equipment sales margins were mixed across the first half. While margins declined in the first quarter due to softer pricing for used equipment, second quarter margins improved year-over-year, aided by the sale of highly depreciated fleet within our Material Handling segment. On a year-to-date basis, gross margin on rental equipment sales remained below the prior year posting a 150 basis point decrease when comparing the year-over-year periods. Parts gross margins, which had shown slight improvement in the first quarter, declined in the second quarter due to increased non-cash reserve levels related to aged parts inventories and tariffs, decreasing margins by 90 basis points year to date when compared to the same time last year. Service gross margins continued to improve through the first half of the year, increasing by 130 basis points year to date. The improvement in year-to-date service gross margins was largely attributable to improved rate realization on customer service work, efficiency measures, and margins on OEM warranty work. We realized an 80 basis point decrease in rental revenues gross margin for the six months ended June 30, 2025, primarily due to depreciation expense comprising a larger share of total rental cost of sales. As a fixed cost, depreciation remained steady, while lower rental revenues, particularly in the Material Handling segment, resulted in overall margin pressure in this category.
Current report
Operating expenses: Consolidated operating expenses decreased by $11.8 million to $109.9 million for the three months ended June 30, 2025 and by $19.1 million to $224.1 million for the six months ended June 30, 2025, compared to the same periods last year, primarily due to cost savings initiatives implemented in the second half of 2024 and early 2025. These initiatives included workforce optimization measures that resulted in improved efficiency and reduced personnel-related costs. Further savings were achieved through changes to the Company’s self-insured healthcare program. The sustained reduction in operating expenses reflects disciplined execution and ongoing focus on cost control across the enterprise.
Current report
Consolidated other expense, net for the six months ended June 30, 2025 was $38.2 million compared to $40.1 million for the same period in 2024. The difference is primarily attributed to the aforementioned one-time events of the gain from divestiture in 2025 and debt extinguishment loss related to our 2024 refinancing activities partially offset by changes in interest expense.
Current report
Revenues: Material Handling segment revenues decreased by $14.9 million, or 8.5%, to $160.7 million for the three months ended June 30, 2025 as compared to the same period last year. Organic sales of new and used equipment fell by 10.0% year over year, as customers' caution around capital expenditures persisted due to broader economic uncertainty. New equipment sales were particularly impacted by continued pressure in sectors like automotive and general manufacturing, namely in our Midwest and Canadian regions. However, food and beverage customers remained a relative bright spot across multiple territories. Despite some headwinds, most regions' new and used equipment backlogs remain steady when compared to year-end 2024, which provides confidence on potential new and used equipment sales in the second half of the year. On an organic basis, product support revenues declined $6.2 million, or 9.9%, for the three months ended June 30, 2025 as compared to the same period last year. Notably, service revenues were impacted in certain markets by technician headcount and availability challenges. Rental revenues decreased $2.7 million organically for the three months ended June 30, 2025 as compared to the same period last year. The decrease reflects reduced year-over-year utilization triggered by customer caution surrounding general macroeconomic uncertainty, particularly in the Midwest and in Canada. In contrast, rental equipment sales rose by $1.5 million organically, or 53.6%, on low volumes. This increase was driven by higher rental disposal activity in connection with our strategic fleet optimization efforts.
Current report
Material Handling segment revenues decreased by $31.3 million, or 8.9%, to $318.6 million for the six months ended June 30, 2025 as compared to the same period last year. Organic sales of new and used equipment fell by 13.4% reflective of continued customer hesitancy on capital expenditures. Product support revenues declined $6.5 million organically, with a $4.1 million reduction in parts sales and a $2.4 million decline in service revenues. Lower product support revenues were primarily reflection of a lower billable technician headcount and technician availability year over year. Rental revenues decreased 10.5% organically for the six months ended June 30, 2025 as compared to the same period last year reflecting a lower average volume of fleet on rent in select markets, mainly in our Midwest and Canada regions. In contrast, rental equipment sales rose by $2.5 million organically, or 47.2%, on low volumes, supported by the targeted disposal of underutilized assets and increased customer demand for cost-effective used equipment alternatives.
Current report
Material Handling gross profit for the three months ended June 30, 2025 decreased 120 basis points to 32.7% compared to the same period in 2024. New and used equipment sales gross margins decreased 120 basis points on product mix variances. Parts margins remained relatively flat, with a modest 10 basis point increase, and performed in line with expectations. Service margins decreased 190 basis points for the three months ended June 30, 2025 compared to the prior year period, primarily due to moderately weaker recoverability on OEM warranty and fleet work, and unfavorable quote variance. Rental revenues gross margins have decreased 370 basis points reflecting lower fleet utilization, namely in our Midwest and Canada regions. Offsetting these impacts, rental equipment sales margins improved to 41.9% from 35.7%, supported by the strategic disposal of aging assets and strong demand for competitively priced used equipment.
Current report
Material Handling gross profit for the six months ended June 30, 2025 increased 40 basis points to 33.6% compared to the same period in 2024. Gross margins on new and used equipment were consistent, declining just 30 basis points year over year. Parts gross margins also remained steady and in line with expectations, while service margins increased 40 basis points for the period, supported by strong margin performance realized in the first quarter of 2025. Rental revenues gross margins have decreased 90 basis points primarily due to the influence of fixed depreciation costs on a lower revenues base. Rental equipment sales margins decreased 180 basis points, on low sales volumes, and can vary depending on the timing of when sales occur within the useful life of the asset.
Current report
Operating expenses: Material Handling operating expenses decreased by $2.6 million to $46.4 million for the three months ended June 30, 2025 and decreased by $4.7 million to $95.4 million for the six months ended June 30, 2025, as compared to the same periods last year. The decreases are primarily due to cost savings initiatives implemented in the second half of 2024 and early 2025. These initiatives included workforce optimization measures that resulted in improved efficiency and reduced personnel-related costs, including expenses associated with the Company’s self-insured health plan.
Current report
Revenues: Construction Equipment segment revenues increased by $5.8 million, or 2.0%, to $300.7 million for the three months ended June 30, 2025 as compared to the same period last year. Growth was primarily driven by strong new and used equipment sales, which increased $21.5 million from the prior year quarter. The increase in new and used equipment sales were primarily realized in our northern geographies including Michigan, New England and upstate New York, and were supported by competitive OEM promotional programs and solid demand across key end markets, including infrastructure and aggregate and mining. Rental equipment sales decreased for the three months ended June 30, 2025 by $12.1 million, reflecting lower disposal volumes following significant fleet right-sizing activity in the prior year. Efforts continue in this regard to improve fleet metrics and cash flow. Product support revenues increased 1.1% with growth in parts and service driven by strong activity in the Michigan, Florida, and Pennsylvania markets. Service performance benefited from improved technician efficiency and stable headcount in most markets, while parts revenues remained flat. Rental revenues declined $3.6 million organically for the three months ended June 30, 2025 compared to the same period last year, primarily due to a lower average rental fleet size, which was approximately $40.0 million below the prior year period when removing the influence of the Chicagoland aerial fleet divestiture. Overall, the Construction Equipment segment enters the second half of the year with strong new equipment demand levels when compared to last year, steady technician staffing levels, and solid trends in some of our major end markets, most notably in infrastructure.
Current report
Construction Equipment segment revenues decreased by $4.0 million, or 0.7%, to $546.5 million for the six months ended June 30, 2025 as compared to the same period last year. New and used equipment sales increased $22.1 million from the prior year to date, with the majority of the growth attributable to the second quarter performance noted earlier. Rental equipment sales decreased for the six months ended June 30, 2025 by $19.1 million primarily due to the significant sales activity in late 2024 leading to lower levels of rent-to-sell fleet available for disposition during the current year. Product support revenues increased 1.3% supported by improved pricing and technician utilization in several markets. Rental revenues decreased $8.1 million organically for the six months ended June 30, 2025 driven by a lower average rental fleet size carried between the two periods and reduced fleet utilization in select markets. The year-over-year rental revenues decline aligns with the Company’s strategic repositioning of its rent-to-sell fleet to align with current market demand.
Current report
Construction Equipment gross profit decreased by 100 basis points to 21.9% in the three months ended June 30, 2025 from 22.9% in the same period in 2024. New and used equipment sales margins decreased 120 basis points to 11.7% on higher volumes, reflective of sales mix impacts and a continued industry overhang of supply in certain product categories. New compact equipment sales in particular realized below average margins in the quarter due to competitive pricing dynamics despite strong volumes. Parts sales margins for the three months ended June 30, 2025 decreased 110 basis points when compared to the same time last year impacted primarily by a non-cash reserve expense taken against aged parts inventory. Service gross margins increased by 290 basis points year over year primarily due to improved warranty labor recovery, pricing actions, and a favorable mix of customer and warranty work. Rental revenues gross margin for the three months ended June 30, 2025 increased 170 basis points from prior year supported by continued discipline around fleet deployment, improved rate realization in select regions, and lower service costs. Gross margins on rental equipment sales for the three months ended June 30, 2025 declined modestly by 60 basis points, largely reflecting mix-related variation in units sold during the quarter.
Current report
Operating expenses: Construction Equipment operating expenses decreased by $4.9 million to $56.6 million for the three months ended June 30, 2025 and $7.2 million to $115.2 million for the six months ended June 30, 2025, as compared to the same periods in 2024, reflecting the full impact of cost savings initiatives implemented during the second half of 2024 and early 2025. These initiatives included workforce optimization measures that resulted in improved efficiency and reduced personnel-related costs, including expenses associated with the Company’s self-insured health plan. Additional expense savings were realized through more efficient advertising and promotional activities as well as greater discipline in managing sales policy-related costs.
Current report
Revenues: Master Distribution segment revenues for the three months ended June 30, 2025 were $20.9 million, an increase of $4.2 million from the prior year same period. Growth was driven by stronger dealer engagement and broader channel activity, particularly with strategic accounts. Equipment sales increased $3.2 million year over year, as the segment benefited from improving dealer confidence and expanding market reach. Parts sales also increased $0.6 million supported by replenishment demand and recently implemented pricing adjustments aimed at mitigating rising tariff exposure. Additionally, increased quarterly revenues reflect improving product-market fit and broader acceptance of new brands across the dealer network.
Current report
Master Distribution segment revenues for the six months ended June 30, 2025 were $38.3 million, an increase of $8.8 million from the prior year same period. The majority of this growth came from new and used equipment sales, which rose by $8.9 million, as normalized dealer inventories and a more seasonally-aligned delivery cadence improved purchasing behavior across the network. Parts sales were up modestly by $0.5 million year over year with stronger second quarter pricing actions offsetting earlier softness. Year-to-date performance continues to reflect successful efforts to broaden the segment’s reach while navigating tariff-driven cost volatility. The business continues to actively pursue pricing, product positioning, and sourcing strategies to support long-term profitability.
Current report
For the three months ended June 30, 2025, gross profit margin decreased 740 basis points from prior year primarily due to influences of elevated tariff costs and the weakening of the US dollar against the Euro. Gross profit margins on new and used equipment sales were 19.3%, a 570 basis point decrease from prior year quarter largely driven by the impact of tariffs on equipment and limited near-term OEM offset mechanisms. Parts gross profit margin was 26.7% for the three months ended June 30, 2025, down 2,330 basis points compared to the same period last year following broad-based increases in steel and aluminum tariffs as well as impacts from parts aging reserves. Although parts pricing actions were implemented during the quarter to offset margin erosion, full recovery to previous parts gross margin levels is unlikely in the near term.
Current report
For the six months ended June 30, 2025, gross profit margin decreased 580 basis points from prior year reflecting the cumulative effect of sustained tariff-related cost pressures and margin compression on both machines and parts. Gross profit margins on new and used equipment sales were 22.2%, down from prior year reflective of higher input costs generally related to the weakening of the US dollar against the Euro. Parts gross profit margin was 33.3% for the six months ended June 30, 2025, down 1,160 basis points compared to the same period last year due to both higher import duties as well as unfavorable freight and sourcing costs associated with stocking new product lines. Pricing actions, ongoing cost recovery strategies, and planned volume rebates from OEMs are expected to help stabilize margins in the back half of the year.
Removed paragraphs (9)
Previous report
Revenues: In the three months ended March 31, 2025, organic new and used equipment revenues decreased 3.0% against the three months ended March 31, 2024 due primarily to reduced customer deliveries of new lift trucks in the first quarter when compared to the same period last year, as industry deliveries of lift trucks has normalized off of peak post-Covid levels. This led to a $16.4 million, or 9.4%, reduction in revenues in our Material Handling segment for the three months ended March 31, 2025. First quarter sales volumes were further impacted by elevated sales activity in the fourth quarter of 2024, which pulled some demand forward, especially as it related to rental equipment sales in our Construction Equipment segment. Despite slowed new and used equipment revenues, our product support departments (parts and service) continued to exhibit resiliency and grew 0.9% organically for the three months ended March 31, 2025. Rental revenues for the three months ended March 31, 2025 declined 12.8% organically due to lower nominal fleet levels and decreased fleet on rent when compared to the same period last year. Rental equipment sales organically decreased 24.3% for the three months ended March 31, 2025 as compared to the same period last year. As mentioned, this reduction was predominantly evident in our rent-to-sell product categories in our Construction Equipment segment as increased demand in the fourth quarter of 2024 pulled forward rental equipment sales activities, resulting in a lower rent-to-sell equipment fleet level relative to the prior year and thus fewer rental equipment sales opportunities.
Previous report
Operating expenses: Consolidated operating expenses decreased by $7.3 million to $114.2 million for the three months ended March 31, 2025 compared to the same period last year. The decrease is primarily due to cost savings initiatives implemented during the second half of 2024, primarily impacting the Company's personnel expense, with an overall headcount reduction of over 6.0%.
Previous report
Revenues: Material Handling segment revenues decreased by $16.4 million, or 9.4%, to $157.9 million for the three months ended March 31, 2025 as compared to the same period last year. Organic sales of new and used equipment fell by 16.7% year over year, primarily due to industry deliveries of lift trucks normalizing off of peak post-Covid levels. On an organic basis, product support revenues, made up of the combined parts and service departments, remained relatively flat, reflecting stable performance despite lower relative volume particularly experienced in parts sales during the quarter. Rental revenues decreased $1.4 million organically for the three months ended March 31, 2025 as compared to the same period last year driven by a lower average volume of fleet on rent. In contrast, rental equipment sales rose by $1.0 million organically, or 40.0%, on low volume driven by the strategic disposal of primarily underutilized equipment nearing the end of its useful life.
Previous report
Material Handling gross profit for the three months ended March 31, 2025 increased 210 basis points to 34.6% compared to the same period in 2024. Despite lower volumes, new and used equipment gross margins increased slightly due to sales mix variances but align within the range of historical expectations. Parts gross margins have remained relatively consistent year over year and in line with expectations. The 270 basis point service margin increase for the three months ended March 31, 2025 compared to the prior year period can be attributed to margin improvements in major service categories, customer and OEM warranty and fleet work, on better pricing, and technician productivity measures. Rental revenues gross margins have increased 200 basis points primarily due to fewer subrental costs and improved repair and maintenance costs. Rental equipment sales margins decreased on low volume of sales driven by the strategic disposal of primarily underutilized equipment nearing the end of its useful life.
Previous report
Operating expenses: Material Handling operating expenses decreased by $2.1 million to $49.0 million for the three months ended March 31, 2025 as compared to the same period last year, mainly due to cost saving initiatives implemented during the second half of 2024 which primarily impacted personnel expenses, resulting in a reduction in average headcount of nearly 6.0% compared to the same quarter in the prior year.
Previous report
Revenues: Construction Equipment segment revenues decreased by $9.8 million, or 3.8%, to $245.8 million for the three months ended March 31, 2025 as compared to the same period last year. New and used equipment sales remained consistent with the prior year quarter, with new sales volumes improved but used sales volumes reduced. Rental equipment sales decreased for the three months ended March 31, 2025 by $7.0 million as demand in the fourth quarter of 2024 pulled forward sales activities, resulting in a lowered rent-to-sell equipment fleet level relative to the prior year quarter and therefore fewer rental equipment sales opportunities in the first quarter. Product support revenues increased 1.4% due to improved rates and utilization on service labor. Rental revenues decreased $4.5 million for the three months ended March 31, 2025 compared to the same period last year, primarily the result of a purposely lower level of rent-to-sell fleet available for rent. Average rental fleet available throughout the three months ended March 31, 2025 was nearly $40.0 million less than the same period last year, as the Company’s rent-to-sell fleet (and rental revenue related thereto) flexes with customer demand for light used heavy construction equipment.
Previous report
Operating expenses: Construction Equipment operating expenses decreased by $2.3 million to $58.6 million for the three months ended March 31, 2025 as compared to the same period in 2024. The decrease was primarily attributable to cost-saving measures implemented in the second half of 2024, including a reduction in average headcount of nearly 7.0% compared to the same quarter in the prior year, which significantly lowered personnel expenses. In addition, enhanced controls on, and consolidation of, certain operating expenses contributed to approximately another $0.5 million in savings during the quarter beyond the personnel cost reduction.
Previous report
Revenues: Master Distribution segment revenues for the three months ended March 31, 2025 were $17.4 million, an increase of $4.6 million from the prior year same period. As sub-dealer inventory levels normalized from the oversupply experienced in 2024, a greater number of sub-dealers were both willing and able to restock compared to the prior year. Seasonal deliveries in the first quarter aligned more closely with the long-term historical patterns of the segment. In contrast, the unusually low sales in the first quarter of 2024 were primarily driven by widespread dealer oversupply across all equipment classes, not just the products sold through our Master Distribution channel, which reduced dealer acceptance rates on a broader scale. Parts sales, on the other hand, were consistent when compared to the same period last year.
Previous report
For the three months ended March 31, 2025, gross profit margin decreased 3.8% from prior year primarily due to high-margin rental revenues and rental equipment sales in 2024 which were non-recurring. Gross profit margins on new and used equipment sales were 25.7%, up slightly from prior year and in line with expectations. Parts gross profit margin was 41.7% for the three months ended March 31, 2025, up 170 basis points compared to the same period last year but consistent with expectations overall.
Reworded paragraphs (26)
Previous wording
We have operated as an equipment dealership for 41 years and have developed a branch network that includes over 85 total locations in Michigan, Illinois, Indiana, Ohio, Pennsylvania, Massachusetts, Maine, Connecticut, New Hampshire, Vermont, Rhode Island, New York, Virginia, Nevada and Florida and the Canadian provinces of Ontario and Quebec. We offer our customers end-to-end solutions for their equipment needs by providing sales, parts, service and rental offerings. Additionally, we provide warehouse design and build services related to automated equipment installation and warehouse management system integration solutions within our Material Handling segment.
Current wording
We have operated as an equipment dealership for 41 years and have developed a branch network that includes over 85 total locations in Michigan, Illinois, Indiana, Ohio, Pennsylvania, Massachusetts, Maine, Connecticut, New Hampshire, Vermont, Rhode Island, New York, Virginia, Nevada, and Florida and the Canadian provinces of Ontario and Quebec. We offer our customers end-to-end solutions for their equipment needs by providing sales, parts, service, and rental offerings. Additionally, we provide design and build services related to automated equipment installation and warehouse management system integration solutions within our Material Handling segment.
Previous wording
New equipment sales. We sell new heavy construction, material handling and environmental processing equipment and are a leading regional distributor for nationally recognized equipment manufacturers. Our new equipment sales operation is a primary source of new customers for our rental, parts and service business. The majority of our new equipment sales are predicated on exclusive distribution agreements we have with best-in-class OEMs. The sale of new equipment to customers, while profitable from a gross margin perspective, acts as a means of generating equipment field population and activity for our higher-margin aftermarket revenue streams, specifically service and parts. We also sell tangential products and services related to our material handling equipment offerings which include, but are not limited to, automated equipment installation and warehouse management systems integration.
Current wording
New equipment sales. We sell new heavy construction, material handling and environmental processing equipment and are a leading regional distributor for nationally recognized equipment manufacturers. Our new equipment sales operation is a primary source of new customers for our rental, parts and service business. The majority of our new equipment sales are predicated on exclusive distribution agreements we have with best-in-class OEMs. The sale of new equipment to customers, while profitable from a gross margin perspective, acts as a means of generating equipment field population and activity for our higher-margin aftermarket revenue streams, specifically service and parts. We also sell tangential products and services related to our equipment offerings which include, but are not limited to, automated equipment installation and warehouse management systems integration.
Previous wording
Rental revenues. We rent heavy construction, compact, aerial, material handling, and a variety of other types of equipment to our customers on a daily, weekly, and monthly basis. Our rental fleet, which is well-maintained, has an original acquisition cost (which we define as the cost originally paid to manufacturers plus any capitalized costs) of $579.0 million as of March 31, 2025. The original acquisition cost of our rental fleet excludes $5.1 million of assets associated with our guaranteed purchase obligations, which are assets that are not in our day-to-day operational control. In addition to being a core business, our rental business also creates cross-selling opportunities for us in our equipment sales and product support activities.
Current wording
Rental revenues. We rent heavy construction, compact, aerial, material handling, and a variety of other types of equipment to our customers on a daily, weekly, and monthly basis. Our rental fleet, which is well-maintained, has an original acquisition cost (which we define as the cost originally paid to manufacturers plus any capitalized costs) of $565.7 million as of June 30, 2025. The original acquisition cost of our rental fleet excludes $3.8 million of assets associated with our guaranteed purchase obligations, which are assets that are not in our day-to-day operational control. In addition to being a core business, our rental business also creates cross-selling opportunities for us in our equipment sales and product support activities.
Previous wording
Rental depreciation. Depreciation of rental equipment represents the depreciation costs attributable to rental equipment. Estimated useful lives vary based upon type of equipment. See Note 2, Summary of Significant Accounting Policies, of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024 for information on our rental equipment depreciation methods.
Current wording
Rental depreciation. Depreciation of rental equipment represents the depreciation costs attributable to rental equipment. Estimated useful lives vary based upon the type and usage of equipment. See Note 2, Summary of Significant Accounting Policies, of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024 for information on our rental equipment depreciation methods.
Previous wording
Other expense, net. This section of the Consolidated Statements of Operations is mostly comprised of interest expense and other miscellaneous items that result in income or expense. Interest expense is driven by our floor plan facilities, line of credit, senior secured second lien notes, and finance lease arrangements.
Current wording
Other expense, net. This section of the Condensed Consolidated Statements of Operations is mostly comprised of interest expense and other miscellaneous items that result in income or expense. Interest expense is driven by our floor plan facilities, line of credit, senior secured second lien notes, and finance lease arrangements.
Previous wording
We define organic revenue growth as revenue growth excluding the impact of acquisitions that do not appear fully in both periods in the current and prior years. We believe organic revenue growth is a meaningful metric to investors as it provides a more consistent comparison of our revenues to prior periods as well as to industry peers.
Current wording
We define organic revenue growth as revenue growth excluding the impact of acquisitions or divestitures that do not appear fully in both periods in the current and prior years. We believe organic revenue growth is a meaningful metric to investors as it provides a more consistent comparison of our revenues across reported periods as well as to industry peers.
Previous wording
Pursuant to the requirements of Regulation G, we have provided a reconciliation of Adjusted EBITDA and organic revenues to the most directly comparable U.S. GAAP financial measure in the tables above and organic revenues in the subsequent table in management's discussion and analysis of our Material Handling segment. This measure is supplemental to, and should be used in conjunction with, the most comparable U.S. GAAP measures. Management uses these non-GAAP financial measures to monitor and evaluate financial results and trends.
Current wording
Pursuant to the requirements of Regulation G, we have provided a reconciliation of Adjusted EBITDA and organic revenues to the most directly comparable U.S. GAAP financial measure in the tables above and organic revenues in the subsequent tables in management's discussion and analysis of our Material Handling and Construction Equipment segments. This measure is supplemental to, and should be used in conjunction with, the most comparable U.S. GAAP measures. Management uses these non-GAAP financial measures to monitor and evaluate financial results and trends.
Previous wording
The three months ended March 31, 2025 and 2024
Current wording
Revenues: In the three months ended June 30, 2025, organic new and used equipment revenues increased 5.3% against the three months ended June 30, 2024, driven primarily by strong performance in our Construction Equipment segment. In our Construction Equipment segment, improved deliveries and expanded market share contributed to the segment’s growth, reflecting solid execution and equipment demand in our served geographies. However, the strength exhibited in our Construction Equipment segment was partially offset by softness in our Material Handling segment, where equipment sales declined due to lower deliveries and a modest contraction in market share. The divergence in new and used revenues performance between segments highlights the importance of our diversified business model, which continues to provide resilience even as certain markets within our footprint experience challenges. Product support department (parts and service) revenues declined modestly, at 3.0% organically for the three months ended June 30, 2025, when compared to the prior year period. The shortfall was more pronounced in our Material Handling segment, where reduced customer fleet activity, mainly within our Midwest regions, contributed to lower parts and service volumes. In contrast, our Construction Equipment segment demonstrated relative stability, underscoring the resilience of its customer base and the effectiveness of our field operations. While overall product support revenues have decreased, technician productivity has remained high across the enterprise. Rental revenues for the three months ended June 30, 2025 declined 12.7% organically due to the Company carrying a reduced average fleet size and experiencing lower fleet utilization when compared to the same period last year. Rental equipment sales organically decreased 25.6% for the three months ended June 30, 2025 as compared to the same period last year. The rental equipment sales reduction was predominantly evident in our rent-to-sell product categories in our Construction Equipment segment as we have carried a lower fleet balance compared to the prior year and strategically sell equipment considering supply and demand levels and rental rates to maximize return on capital on the rent-to-sell fleet.
Previous wording
The consolidated gross profit margin for the three months ended March 31, 2025 was 27.2%, a 10 basis point decrease from 27.3% for the same period in 2024. New and used equipment sales margins decreased 60 basis points to 15.2%, a reflection of a competitive but stabilizing, pricing environment and overall sales mix influences. For sales of our rental equipment, gross margin was also compressed on a softened pricing environment for used equipment when compared to the same period last year, posting a 590 basis point decrease when comparing the year-over-year periods. Parts gross margins improved 20 basis points year to date when compared to the same time last year primarily due to mix but aligned to expectations overall. Service gross margins improved by 230 basis points. The improvement in year-to-date service gross margins was largely attributable to improved rate realization on customer service work, improved efficiency measures, and improved margins on OEM warranty and fleet work. We realized a 100 basis point decrease in rental revenues gross margin for the three months ended March 31, 2025, primarily due to a greater proportion of rental revenues coming from the Construction Equipment segment.
Current wording
The consolidated gross profit margin for the three months ended June 30, 2025 was 25.4%, a 160 basis point decrease from 27.0% for the same period in 2024. New and used equipment sales margins decreased 170 basis points to 14.0%, driven by sales mix factors, oversupply in equipment markets, and rising input costs. Tariff impacts have begun to influence cost structures, and not all increases have been offset through pricing, contributing to a more compressed margin environment, with effects most prominently displayed in our Master Distribution segment. For sales of our rental equipment, gross margins improved posting a 170 basis point increase when comparing the year-over-year periods, primarily the result of sales of highly depreciated fleet from our Material Handling segment. Parts gross margins decreased 180 basis points year to date when compared to the same time last year, a reflection of the negative non-cash impact of aged parts inventories reserves and cost increases associated with tariffs. Service gross margins increased by 40 basis points. The improvement in quarter-to-date service gross margins was largely attributable to improved rate realization on customer service work, efficiency measures, and margins on OEM warranty work. We realized a 60 basis point decrease in rental revenues gross margin for the three months ended June 30, 2025, as depreciation remained consistent while lower rental revenues in the Material Handling segment reduced the ability to absorb these costs, resulting in margin compression.
Previous wording
Other expense, net: Consolidated other expense, net for the three months ended March 31, 2025 was $21.0 million compared to $15.2 million for the same period in 2024. The increase is primarily due to the refinance of debt in the second quarter of 2024, resulting in an increased amount of interest expense from the higher interest rate affixed to the refinanced debt.
Current wording
Other expense, net: Consolidated other expense, net for the three months ended June 30, 2025 was $17.2 million compared to $24.9 million for the same period in 2024. The decrease is primarily due to one-time items impacting both periods, with the gain on sale from divestiture occurring in the second quarter of 2025 and a loss on debt extinguishment effecting the second quarter of 2024.
Previous wording
Income tax provision (benefit): The Company recorded income tax expense of $0.7 million and benefit of $4.2 million for the three months ended March 31, 2025 and 2024, respectively. The income tax expense for the three months ended March 31, 2025 was primarily a result of a change in valuation allowance recorded against a portion of the deferred tax asset relating to the U.S. disallowed interest expense carryforwards partially offset by the benefit attributable to the net loss for the period and the benefit in 2024 was due to net tax losses during the quarter.
Current wording
Income tax provision (benefit): The Company recorded income tax expense of $1.3 million and benefit of $2.7 million for the three months ended June 30, 2025 and 2024 and income tax expense of $2.0 million and benefit of $6.9 million for the six months ended June 30, 2025 and 2024, respectively. The impacts were primarily a result of a change in valuation allowance recorded against a portion of the deferred tax asset relating to the U.S. disallowed interest expense carryforwards partially offset by the benefit attributable to the net loss for the period, and the benefit in 2024 was due to net tax losses with no associated valuation allowance.
Previous wording
Other expense, net: Material Handling other expense, net increased by $1.2 million to $6.2 million for the three months ended March 31, 2025 as compared to the same period last year. The increase is mainly related to increased interest expense due to higher nominal levels of debt and the increase in our effective interest rate after our debt refinancing in 2024.
Current wording
Other expense, net: Material Handling other expense, net increased by $0.3 million to $6.1 million for the three months ended June 30, 2025 and increased by $1.5 million to $12.3 million for the six months ended June 30, 2025, as compared to the same periods last year. The increases primarily relate to increased interest expense due to higher nominal levels of debt and the increase in our effective interest rate after our debt refinancing in 2024.
Previous wording
Construction Equipment gross profit decreased by 90 basis points to 22.7% in the three months ended March 31, 2025 from 23.6% in the same period in 2024. New and used equipment sales margins decreased 140 basis points to 11.4%. Although new equipment volumes were higher compared to the prior year, competitive pricing and the higher cost of new equipment led to lower margin realization. Conversely, despite a challenged used equipment market year-over-year and lower sales volumes, used equipment margins improved year over year on retail sales within the dealership. Parts sales margins for the three months ended March 31, 2025 increased 90 basis points when compared to the same time last year on pricing realization on over the counter sales and as freight cost recovery showed improvement. Service gross margins increased by 290 basis points year over year mainly from improved rate realization and efficiency measures along with improved warranty recovery. Rental revenues gross margin for the three months ended March 31, 2025 decreased 400 basis points from a year ago, a result of the lowered amount of fleet on rent and the relative impact of repair and maintenance charges contained within cost of revenues, as our technicians prepare our fleet for the seasonal increase in demand for rental equipment in our northern regions in the upcoming quarters. Gross margins on rental equipment sales for the three months ended March 31, 2025 were reduced from a year ago amid higher relative costs of equipment in our rental fleet and reduced market prices on used equipment year over year.
Current wording
Construction Equipment gross profit decreased by 90 basis points to 22.3% in the six months ended June 30, 2025 from 23.2% in the same period in 2024. New and used equipment sales margins decreased 120 basis points to 11.6% as a result of pressures from product mix and pricing competitiveness due to the supply overhang within the marketplace. Parts sales margins for the six months ended June 30, 2025 remained generally stable, declining just 10 basis points when compared to the same time last year and remained within expected ranges. Service gross margins increased by 290 basis points year over year primarily from improved rate realization and efficiency measures along with warranty recovery. Rental revenues gross margin for the six months ended June 30, 2025 decreased 90 basis points from a year ago, a result of a reduced amount of fleet on rent and a more conservative rental pricing environment. Gross margins on rental equipment sales for the six months ended June 30, 2025 declined 250 basis points from a year ago, reflecting a higher mix of lower-margin asset dispositions in the first quarter as we focus on optimizing rent-to-sell fleet levels in certain product categories.
Previous wording
Other expense, net: Construction Equipment other expense, net increased by $3.0 million to $12.4 million for the three months ended March 31, 2025 as compared to the same period in 2024. The variance was driven by increased interest expense primarily due to the increase in our effective interest rate after our debt refinancing in 2024.
Current wording
Other expense, net: Construction Equipment other expense, net decreased by $3.9 million to $7.4 million for the three months ended June 30, 2025 and $0.9 million to $19.8 million for the six months ended June 30, 2025, as compared to the same periods in 2024. The variances were driven by the gain on the divestiture of substantially all of our aerial fleet rental business in Chicagoland, partially offset by increased interest expense due to higher nominal levels of debt and the increase in our effective interest rate associated with the debt refinancing in 2024.
Previous wording
Operating expenses: Master Distribution segment operating expenses were $3.4 million for the three months ended March 31, 2025, a decrease of $1.5 million for the prior year same period. The $1.5 million decrease is primarily reflective of costs incurred in the prior year for non-cash contingent consideration expense associated with the earnout component of the acquisition of Ecoverse in November 2022. Removing the recorded expense of the contingent consideration of $1.2 million provides for relatively flat operating expenses year over year despite a higher revenue base in the current operating period.
Current wording
Operating expenses: Master Distribution segment operating expenses were $3.8 million and $7.2 million for the three and six months ended June 30, 2025, respectively, a decrease of $0.8 million and $2.3 million, respectively, as compared to prior year same periods. The decreases are primarily reflective of non-recurring costs incurred in the prior year for non-cash contingent consideration expense associated with the earnout component of the acquisition of Ecoverse in November 2022. Removing the recorded expense of the contingent consideration provides for relatively flat operating expenses year over year despite higher revenues in the current year.
Previous wording
Other expense, net: Master Distribution other expense, net was $1.6 million for the three months ended March 31, 2025, an increase over prior year primarily attributed to higher interest costs on larger inventory balances and a greater effective interest rate given the debt refinance in 2024.
Current wording
Other expense, net: Master Distribution other expense, net was $1.7 million and $3.3 million for the three and six months ended June 30, 2025, respectively, an increase over prior year primarily attributed to higher interest costs on larger inventory balances and a higher effective interest rate given the debt refinance in 2024.
Previous wording
The three months ended March 31, 2025 and 2024 Cash Flows
Current wording
The six months ended June 30, 2025 and 2024 Cash Flows
Previous wording
Cash Flow from Operating Activities. Cash flows from operating activities include net loss adjusted for non-cash items and the effects of changes in working capital. For the three months ended March 31, 2025, operating activities resulted in net cash used in operations of $17.5 million. Our reported net loss of $20.9 million, when adjusted for non-cash income and expense items, primarily depreciation and amortization, the gain on sale of rental equipment, inventory obsolescence and bad debt reserves, deferred income taxes, and stock-based compensation, provided net cash inflows of $9.3 million. Changes in working capital included $41.6 million of inventory purchased ($28.4 million of inventory was transferred into our rental fleet primarily for replenishment purposes) and a $9.1 million increase in accounts receivable. Cash flows from operating activities were favorably impacted by $18.6 million due to proceeds from the sale of rent-to-sell equipment and a $15.4 million increase in accounts payable, accrued expenses, customer deposits, and other current liabilities, partially offset by $6.0 million in net outflows related to manufacturer floor plans, and by a $4.1 million net change in prepaid expenses and other assets and leases, deferred revenue, and other liabilities.
Current wording
Cash Flow from Operating Activities. Cash flows from operating activities include net loss adjusted for non-cash items and the effects of changes in working capital. For the six months ended June 30, 2025, operating activities resulted in net cash used in operations of $3.4 million. Our reported net loss of $27.0 million, when adjusted for non-cash income and expense items, primarily depreciation and amortization, the gain on sale of rental equipment, inventory obsolescence and bad debt reserves, gain on divestiture, deferred income taxes, and stock-based compensation, provided net cash inflows of $32.5 million. Changes in working capital included $21.1 million of inventory purchased ($66.7 million of inventory was transferred into our rental fleet primarily for replenishment purposes) and a $6.8 million increase in accounts receivable. Cash flows from operating activities were favorably impacted by $44.8 million due to proceeds from the sale of rent-to-sell equipment offset by $41.0 million in net outflows related to manufacturer floor plans, and an $11.8 million net change in prepaid expenses and other assets and leases, deferred revenue, and other liabilities.
Previous wording
For the three months ended March 31, 2024, operating activities resulted in net cash used in operations of $13.5 million. Our reported net loss of $11.9 million, when adjusted for non-cash income and expense items, primarily depreciation and amortization, the gain on sale of rental equipment, inventory obsolescence and bad debt reserves, and stock-based compensation, provided net cash inflows of $17.8 million. Changes in working capital included $66.3 million of inventory purchased ($38.8 million of inventory was transferred into our rental fleet for replenishment and growth purposes), and an $8.0 million decrease in accounts receivable. Cash flows from operating activities were favorably impacted by $26.0 million due to proceeds from the sale of rent-to-sell equipment, $0.4 million in net inflows related to manufacturer floor plans, and a $5.0 million net change in prepaid expenses and other assets and unfavorably impacted by a $4.4 million decrease in accounts payable, accrued expenses, customer deposits, and other current liabilities and leases, deferred revenue, net of current portion and other liabilities.
Current wording
For the six months ended June 30, 2024, operating activities resulted in net cash used in operations of $24.2 million. Our reported net loss of $23.8 million, when adjusted for non-cash income and expense items, primarily depreciation and amortization, the gain on sale of rental equipment, inventory obsolescence and bad debt reserves, loss on debt extinguishment, deferred income taxes, and stock-based compensation, provided net cash inflows of $38.4 million. Changes in working capital included $109.6 million of inventory purchased ($83.0 million of inventory was transferred into our rental fleet primarily for replenishment purposes), and a $6.5 million increase in accounts receivable. Cash flows from operating activities were favorably impacted by $63.1 million due to proceeds from the sale of rent-to-sell equipment, and $5.2 million in net inflows related to manufacturer floor plans and unfavorably impacted by a $14.5 million decrease in accounts payable, accrued expenses, customer deposits, and other current liabilities, and a $0.3 million net change in leases, deferred revenue, net of current portion and other liabilities.
Previous wording
Cash Flow from Investing Activities. For the three months ended March 31, 2025, our cash used in investing activities was $14.3 million. This was mainly due to $16.8 million purchases of rental equipment and non-rental property and equipment, the acquisition of CEQ as discussed in Note 15, Business Combinations, and other investing activities, partially offset by $2.3 million proceeds from the sale of rent-to-rent equipment and $0.2 million proceeds from the sale of non-rental property and equipment.
Current wording
Cash Flow from Investing Activities. For the six months ended June 30, 2025, our cash used in investing activities was $8.4 million. This was mainly due to $31.6 million purchases of rental equipment and non-rental property and equipment, the acquisition of CEQ as discussed in Note 15, Business Combinations and Divestitures, and other investing activities partially offset by $18.0 million proceeds from the divestiture of our aerial fleet rental business in Illinois, $4.9 million proceeds from the sale of rent-to-rent equipment, and $0.3 million proceeds from the sale of non-rental property and equipment.
Previous wording
For the three months ended March 31, 2024, our cash used in investing activities was $16.5 million. This was mainly due to $18.2 million purchases of rental equipment and non-rental property and equipment, and other investing activities partially offset by $1.6 million proceeds from the sale of rent-to-rent equipment and $0.1 million proceeds from the sale of non-rental property and equipment.
Current wording
For the six months ended June 30, 2024, our cash used in investing activities was $34.2 million. This was mainly due to $39.3 million purchases of rental equipment, non-rental property and equipment, and other investing activities partially offset by $3.2 million proceeds from the sale of rent-to-rent equipment and $1.9 million proceeds from the sale of non-rental property and equipment.
Previous wording
Cash Flow from Financing Activities. For the three months ended March 31, 2025, cash provided by financing activities was $29.5 million. This cash inflow was mainly due to the $34.5 million of net proceeds from our line of credit, long-term borrowings, and finance lease obligations, which funded the increase in net working capital previously noted. These cash inflows were partially offset by payments of $2.7 million for preferred and common stock dividends, net payments of $1.5 million related to non-manufacturer floor plans, and $0.8 million related to other financing activities.
Current wording
Cash Flow from Financing Activities. For the six months ended June 30, 2025, cash provided by financing activities was $11.4 million. This cash inflow was mainly due to the $29.6 million of net proceeds from our line of credit, long-term borrowings, and finance lease obligations, which funded the increase in net working capital previously noted. These cash inflows were partially offset by payments of $5.4 million for preferred and common stock dividends, net payments of $5.9 million related to non-manufacturer floor plans, $6.5 million for common stock repurchases, and $0.4 million related to other financing activities.
Previous wording
For the three months ended March 31, 2024, cash provided by financing activities was $4.6 million. This cash inflow was mainly due to $10.9 million of net borrowings under our line of credit which funded the increase in net working capital previously noted. Additionally, there were net borrowings of $1.9 million related to non-manufacturer floor plans. These cash inflows were partially offset by payments of $2.7 million for preferred and common stock dividends and $5.5 million related to other financing activities.
Current wording
For the six months ended June 30, 2024, cash provided by financing activities was $32.1 million. This cash inflow was mainly due to $373.1 million of net proceeds from our line of credit and long-term borrowings which funded the extinguishment of our Senior Secured Second Lien Notes due April 2026 and the increase in net working capital previously noted. These cash inflows were partially offset by payments of $5.4 million for preferred and common stock dividends, net payments of $3.3 million related to non-manufacturer floor plans, $2.0 million for common stock repurchases, and $9.1 million related to other financing activities.
Previous wording
Our principal sources of liquidity have been from cash provided by our service, parts and rental related operations and the sales of new, used, and rental fleet equipment, proceeds from the issuance of debt, and borrowings available under our line of credit and floor plans. The Company also reported $11.1 million in cash as of March 31, 2025. For more information on our available borrowings under the revolving line of credit, senior secured second lien notes, and floor plans, please refer to Note 8, Floor Plans and Note 9, Long-term Debt. We consider the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested as we do not anticipate the need to repatriate funds to the U.S. to satisfy domestic liquidity needs.
Current wording
Our principal sources of liquidity have been from cash provided by our service, parts and rental related operations and the sales of new, used, and rental fleet equipment, proceeds from the issuance of debt, and borrowings available under our line of credit and floor plans. The Company also reported $13.2 million in cash as of June 30, 2025. For more information on our available borrowings under the revolving line of credit, senior secured second lien notes, and floor plans, please refer to Note 8, Floor Plans and Note 9, Long-term Debt. We consider the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested as we do not anticipate the need to repatriate funds to the U.S. to satisfy domestic liquidity needs.
Previous wording
The amount of our future capital expenditures will depend on a number of factors including general economic conditions and our growth prospects. Our gross rental fleet capital expenditures for the three months ended March 31, 2025 was $40.4 million, including $28.4 million of transfers from new and used inventory to rental fleet. This gross rental fleet capital expenditure was offset by sales proceeds from rental equipment of $20.9 million for the three months ended March 31, 2025 as our business model is to sell lightly used inventory to customers from our rental fleet to increase field population in our geographies. In response to changing economic conditions, we have the flexibility to modify our capital expenditures, especially as it relates to rental fleet.
Current wording
The amount of our future capital expenditures will depend on a number of factors including general economic conditions and our growth prospects. Our gross rental fleet capital expenditures for the six months ended June 30, 2025 was $90.4 million, including $66.7 million of transfers from new and used inventory to rental fleet. This gross rental fleet capital expenditure was offset by sales proceeds from rental equipment of $49.7 million for the six months ended June 30, 2025 as our business model is to sell lightly used inventory to customers from our rental fleet to increase field population in our geographies. In response to changing economic conditions, we have the flexibility to modify our capital expenditures, especially as it relates to rental fleet.
Previous wording
To service our debt, we will require a significant amount of cash. Our ability to pay interest and principal on our indebtedness, will depend upon our future operating performance and the availability of borrowings under the line of credit and/or other debt and equity financing alternatives available to us, which will be affected by prevailing economic conditions and conditions in the global credit and capital markets, as well as financial, business and other factors, some of which are beyond our control. Based on our current level of operations and given the current state of the capital markets, we believe our cash flows from operations, available cash, and available borrowings under the line of credit will be adequate to meet our future liquidity needs for the foreseeable future. As of March 31, 2025, we had $401.6 million of available borrowings under the ABL Facility and Floor Plan Facilities.
Current wording
To service our debt, we will require a significant amount of cash. Our ability to pay interest and principal on our indebtedness, will depend upon our future operating performance and the availability of borrowings under the line of credit and/or other debt and equity financing alternatives available to us, which will be affected by prevailing economic conditions and conditions in the global credit and capital markets, as well as financial, business, and other factors, some of which are beyond our control. Based on our current level of operations and given the current state of the capital markets, we believe our cash flows from operations, available cash, and available borrowings under the line of credit will be adequate to meet our future liquidity needs for the foreseeable future. As of June 30, 2025, we had $425.2 million of available borrowings under the ABL Facility and Floor Plan Facilities.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Non-GAAP Financial Measure: Organic Revenues