ALTA EQUIPMENT GROUP INC.

Previous wording

The following discussion and analysis should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report, and the audited consolidated financial statements and related notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. This discussion contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 reflecting Alta’s current expectations, estimates, and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed may not occur. Alta assumes no obligation to update any of these forward-looking statements.

Current wording

The following discussion and analysis should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report, and the audited consolidated financial statements and related notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“Annual Report on Form 10-K”). This discussion contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 reflecting Alta’s current expectations, estimates, and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, economic and competitive conditions, regulatory changes, and other uncertainties, as well as those factors discussed below and elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K, particularly in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed may not occur. Alta assumes no obligation to update any of these forward-looking statements.

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 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 80 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, Maritime, 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

Service revenues. We provide maintenance and repair services for customer-owned equipment. In addition to repair and maintenance on an as needed or scheduled basis, we provide ongoing preventative maintenance services and warranty repairs for our customers. We have committed substantial resources to training our technical service employees and have a full-scale service infrastructure that we believe differentiates us from our competitors. Approximately 44% of our employees are skilled service technicians.

Current wording

Service revenues. We provide maintenance and repair services for customer-owned equipment. In addition to repair and maintenance on an as needed or scheduled basis, we provide ongoing preventative maintenance services and warranty repairs for our customers. We have committed substantial resources to training our technical service employees and have a full-scale service infrastructure that we believe differentiates us from our competitors. Approximately 43% of our employees are skilled service technicians.

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 $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.

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 $563.4 million as of September 30, 2025. The original acquisition cost of our rental fleet excludes $3.4 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

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.

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. These measures are 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

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.

Current wording

Revenues: In the three months ended September 30, 2025, consolidated total revenues decreased 5.8% against the three months period ended September 30, 2024, with total organic revenues decreasing 5.6%. Organic new and used equipment revenues decreased 3.6% against the three months ended September 30, 2024. New and used equipment sales declined across all segments in the third quarter of 2025, primarily due to economic uncertainty, market contraction in key regions, and tariff impacts, though some areas showed localized improvement. Product support department (parts and service) revenues improved modestly, at 0.4% organically for the three months ended September 30, 2025, when compared to the prior year period. Product support performance varied across segments. The Material Handling product support business line saw a decline due to reduced technician availability and a shift in customer fleet composition, while the Construction Equipment segment product support departments posted modest gains driven by stronger service activity and productivity improvements in key markets. Technician productivity remains high across the enterprise, and our product support teams continue to provide stability amid fluctuating equipment demand. Rental revenues for the three months ended September 30, 2025 decreased 7.7% organically due to the Company carrying a reduced average fleet size and lower fleet utilization when compared to the same period last year. Rental equipment sales organically decreased 39.3% for the three months ended September 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

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 wording

Consolidated total revenues in the nine months ended September 30, 2025 decreased $51.7 million, or 3.8%, and on an organic basis decreased by $51.2 million, or 3.7%, compared to the same period in 2024. The majority of this reduction stemmed from the rental business, where rental revenues for the nine months ended September 30, 2025 decreased 11.0% and rental equipment sales decreased 30.0% on an organic basis. The decline in rental revenues was primarily due to holding a smaller average fleet size and experiencing lower utilization rates in the year, while the decrease in rental equipment sales is reflective of maintaining a reduced rent-to-sell fleet in the Construction Equipment segment and reduced throughput of lightly used, rent-to-sell heavy equipment to our customer base. Beyond the results of our rental departments, organic new and used equipment revenues decreased 0.2% against the nine months ended September 30, 2024 as strong second quarter growth in our Construction Equipment segment helped offset softness experienced in the first and third quarters. In the Construction Equipment segment, year-to-date gains on new and used equipment sales were supported by improved deliveries, stable market share and 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 size and market share in certain key geographies. Product support revenues have remained relatively stable year to date, declining 0.6% organically for the nine months ended September 30, 2025. Product support declines were experienced mainly in the Material Handling segment, where changes in customer fleet composition and reduced billable headcounts, 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.

Previous wording

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 wording

The consolidated gross profit margin for the nine months ended September 30, 2025 was 26.8%, a 60 basis point decrease from 27.4% for the same period in 2024. This decrease was primarily driven by margin compression on new and used equipment sales, which decreased 130 basis points to 14.6%, impacted by unfavorable sales mix, competitive pricing pressures stemming from industry oversupply, and rising input costs, some of which were tariff-related and not fully offset through pricing actions. Rental equipment sales margins declined 100 basis points year-over-year, reflecting a higher mix of lower-margin asset dispositions, particularly in the first quarter, as we focus on optimizing rent-to-sell fleet levels in certain product categories. Parts gross margins for the nine months ended September 30, 2025 improved slightly by 40 basis points and are in line with expectations. Service gross margins continued to improve year to date, increasing by 80 basis points when compared to the same period last year, supported by stronger rate realization, technician efficiency gains, and enhanced warranty labor recoveries. Rental revenues gross margins decreased 140 basis points for the nine months ended September 30, 2025, primarily due to depreciation expense comprising a larger share of total rental cost of sales. As a fixed cost, particularly in the Material Handling segment, depreciation remained steady while lower rental revenues resulted in overall margin pressure in this business line.

Previous wording

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 wording

Operating expenses: Consolidated operating expenses decreased by $4.8 million to $113.0 million for the three months ended September 30, 2025 and by $23.9 million to $337.1 million for the nine months ended September 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.

Previous 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.

Current wording

Other expense, net: Consolidated other expense, net for the three months ended September 30, 2025 was $22.0 million compared to $22.9 million for the same period in 2024. The decrease is due to improved interest expense on floor-planned new equipment as well as the impact of one-time items in 2025, with the gain on sale from divestiture occurring in the third quarter of 2025.

Previous wording

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 wording

Consolidated other expense, net for the nine months ended September 30, 2025 was $60.2 million compared to $63.0 million for the same period in 2024. The difference is primarily attributed to the impact of one-time events attributed to gain on divestitures in 2025 and debt extinguishment losses in 2024 related to refinancing activities, all of which being partially offset by changes in interest expense year over year.

Previous wording

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 wording

Revenues: Material Handling segment revenues decreased by $1.0 million, or 0.6%, to $167.9 million for the three months ended September 30, 2025 as compared to the same period last year. Organic sales of new and used equipment decreased by 0.8% year over year in the same period primarily due to persistent customer caution regarding capital expenditures amid ongoing economic uncertainty associated with tariffs and elevated interest rates. Although certain regions, such as New York, experienced improvements in year-over-year new equipment sales, overall new equipment industry bookings have declined, with this trend being especially noticed in our Michigan, New York City and Canada regions. On an organic basis, product support revenues declined $1.4 million, or 2.3%, for the three months ended September 30, 2025 as compared to the same period last year. This decrease is primarily attributed to lower technician headcount and availability, which directly impacted service revenues. Parts sales were also pressured by the decrease in technician headcount, a refreshed customer field population and the continued transition of customer field population being more heavily weighted to electric versus gas lift trucks. Rental revenues decreased $1.5 million organically for the three months ended September 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. In contrast, rental equipment sales increased by $2.1 million organically, or 75.0%, on low volumes. This increase was driven by higher rental disposal activity in connection with our strategic fleet optimization efforts.

Previous wording

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 wording

For the nine months ended September 30, 2025, Material Handling segment revenues decreased by $32.3 million, or 6.2%, to $486.5 million as compared to the same period last year. Organic sales of new and used equipment decreased by 9.4% reflective of continued customer hesitancy on capital expenditures and a reduction in overall lift truck industry bookings. Product support revenues declined $7.9 million organically, with a $5.0 million reduction in parts sales and a $2.9 million decrease in service revenues. Lower product support revenues were primarily a reflection of lower billable technician headcount and technician availability year over year. Rental revenues decreased 9.6% organically for the nine months ended September 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 increased by $4.6 million organically, or 56.8%, on low volumes, supported by the targeted disposal of underutilized assets and increased customer demand for cost-effective used equipment alternatives.

Previous wording

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 wording

Material Handling gross profit for the three months ended September 30, 2025 decreased 20 basis points to 33.4% compared to the same period in 2024. New and used equipment sales gross margins decreased 110 basis points on product mix variances and tariff-related cost increases. Parts margins improved 310 basis points primarily related to aligning our parts reserve to current operational and market realities. Service margins increased 60 basis points for the three months ended September 30, 2025 compared to the prior year period, supported by selective effective labor rate increases, though partially offset by weaker recoverability on OEM warranty and fleet work, and modest unfavorable quote variances. Rental revenues gross margins have decreased 220 basis points due to the influence of fixed depreciation costs on a lower revenues base, occurring most acutely in our Midwest region. Offsetting these impacts, rental equipment sales margins improved to 34.0% from 32.1%, supported by the strategic disposal of aging assets and strong demand for competitively priced used equipment.

Previous wording

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 wording

Material Handling gross profit for the nine months ended September 30, 2025 increased 20 basis points to 33.5% compared to the same period in 2024. Gross margins on new and used equipment were largely consistent, declining just 60 basis points year over year due to sales mix and tariff-related cost increases. Parts gross margins improved slightly but are in line with expectations, and service margins increased 50 basis points for the period, supported by strong margin performance realized in the first and third quarters of 2025. Rental revenues gross margins have decreased 130 basis points primarily due to the influence of fixed depreciation costs on a lower revenues base. Rental equipment sales margins decreased 60 basis points on low sales volumes and can vary depending on the timing of when sales occur within the useful life of the asset.

Previous wording

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 wording

Operating expenses: Material Handling operating expenses decreased by $1.2 million to $48.4 million for the three months ended September 30, 2025 and decreased by $5.9 million to $143.8 million for the nine months ended September 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 reduced personnel-related costs, including expenses associated with the Company’s self-insured health plan.

Previous wording

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 wording

Revenues: Construction Equipment segment revenues decreased by $20.7 million, or 7.9%, to $241.6 million for the three months ended September 30, 2025 as compared to the same period last year. The reduction was driven in part by a slight decline in new and used equipment sales, which decreased $2.8 million from the prior year quarter. The decrease in new and used equipment sales can be partially attributed to a contraction in market size for heavy equipment in certain of our regions compared to prior year. Rental equipment sales drove the majority of the overall segment sales reduction. Rental equipment sales decreased for the three months ended September 30, 2025 by $15.9 million, reflecting lower sales volumes following significant fleet right-sizing activity in the prior year. Efforts continue in this regard to improve fleet optimization and cash flow. Offsetting the reductions experienced in the equipment sales channels, product support revenues increased 2.4% with growth in parts and service driven by strong activity in the Florida and Pennsylvania markets. Service performance benefited from technician efficiency gains and throughput of service backlogs while parts revenues remained fairly flat against last year. Rental revenues decreased $2.3 million organically for the three months ended September 30, 2025 compared to the same period last year, primarily due to a lower average rental fleet size as the segment continues to focus on improving asset efficiency. Overall, the Construction Equipment segment enters the fourth quarter of the year with positive tailwinds to support new and used equipment demand, underpinned by recent infrastructure bills, municipal funding, and tax incentives associated with the recently enacted OBBBA.

Previous wording

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 wording

Construction Equipment segment revenues decreased by $24.7 million, or 3.0%, to $788.1 million for the nine months ended September 30, 2025 as compared to the same period last year. New and used equipment sales increased $19.3 million from the prior year to date, with the majority of the growth attributable to the second quarter performance. Rental equipment sales decreased for the nine months ended September 30, 2025 by $35.0 million primarily due to the significant sales activity in late 2024 leading to lower levels of rent-to-sell fleet available for retail disposition during the current year and reduced throughput of lightly used, rent-to-sell heavy equipment to our customer base in 2025. Product support revenues increased 1.7% supported by improved pricing and technician efficiency measures in several markets. Rental revenues decreased $10.4 million organically for the nine months ended September 30, 2025 driven by a lower average rental fleet size carried between the comparable periods and reduced fleet utilization in select markets. The year-over-year rental revenues decline is consistent with the Company’s strategic repositioning of its rent-to-sell fleet to align with current market demand.

Previous 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.

Current wording

Construction Equipment gross profit decreased by 60 basis points to 22.8% in the nine months ended September 30, 2025 from 23.4% in the same period in 2024. New and used equipment sales margins decreased 90 basis points to 11.7% as a result of pressures from product mix and pricing competitiveness due to the supply overhang within the marketplace. Parts sales margins for the nine months ended September 30, 2025 remained generally stable, increasing 100 basis points when compared to the same time last year and within expected ranges. Service gross margins increased by 150 basis points year over year, primarily from improved rate realization and efficiency measures, along with improved warranty recovery. Rental revenues gross margin for the nine months ended September 30, 2025 decreased 180 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 nine months ended September 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

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 wording

Operating expenses: Construction Equipment operating expenses decreased by $5.9 million to $54.1 million for the three months ended September 30, 2025 and $13.1 million to $169.3 million for the nine months ended September 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 customer relationship-related costs.

Previous 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.

Current wording

Other expense, net: Construction Equipment other expense, net increased by $0.3 million to $13.0 million for the three months ended September 30, 2025 and decreased $0.6 million to $32.8 million for the nine months ended September 30, 2025, as compared to the same periods in 2024. The nine-month variance was driven by the gain on the divestiture of substantially all of our aerial fleet rental business in the greater Chicago area and was 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

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 wording

Master Distribution segment revenues for the nine months ended September 30, 2025 were $53.3 million, an increase of $5.6 million from the prior year same period. The majority of this growth came from new and used equipment sales, which rose by $5.6 million, as normalized dealer inventories and a more seasonally-aligned delivery cadence improved purchasing behavior across the segments sub-dealer network in the first half of the year. Parts sales were up modestly by $0.8 million year over year with stronger pricing actions beginning in the second quarter to offset softness in the first quarter. Year-to-date performance reflects successful efforts to broaden the segment’s reach while navigating tariff-driven cost volatility, but ongoing trade policy related uncertainty continues to be a headwind for the foreseeable future. The business continues to actively pursue pricing, product positioning, and sourcing strategies to support long-term profitability.

Previous wording

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 wording

For the three months ended September 30, 2025, gross profit margin decreased 750 basis points from the 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 16.7%, a 940 basis point decrease from the prior year quarter largely driven by the impact of tariffs on equipment and limited near-term OEM offset mechanisms. Parts gross profit margin was 60.0% for the three months ended September 30, 2025, down 820 basis points compared to the same period last year following broad-based increases in steel and aluminum tariffs. Although parts pricing actions were implemented during the second quarter of the year to offset margin erosion, and negotiations with major OEMs in the segment have helped to curtail further margin erosion, full recovery to previous parts gross margin levels in the near-term is unlikely under the current tariff environment.

Previous wording

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.

Current wording

For the nine months ended September 30, 2025, gross profit margin decreased 650 basis points from the prior year reflecting the cumulative effect of sustained tariff-related cost pressures and margin compression on both machine and parts sales. Gross profit margins on new and used equipment sales were 20.7%, down from the prior year and reflective of higher input costs generally related to the weakening of the US dollar against the Euro and the influence of tariffs on imported goods. Parts gross profit margin was 41.8% for the nine months ended September 30, 2025, down 10.3% 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 future periods.

Previous 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.

Current wording

Operating expenses: Master Distribution segment operating expenses were $3.9 million and $11.1 million for the three and nine months ended September 30, 2025, respectively. As compared to prior year same periods, there was no change and a decrease of $2.3 million, respectively. The year-to-date decrease is 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. Excluding the contingent consideration, operating expenses were relatively flat despite higher revenues in the current year.

Previous 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.

Current wording

Other expense, net: Master Distribution other expense, net was $1.6 million for the three months ended September 30, 2025, flat to prior year. Other expense, net was $4.9 million for the nine months ended September 30, 2025, a year-to-date 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 six months ended June 30, 2025 and 2024 Cash Flows

Current wording

The nine months ended September 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 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.

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 nine months ended September 30, 2025, operating activities resulted in net cash used in operations of $0.9 million. Our reported net loss of $68.6 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 divestitures, deferred income taxes, and stock-based compensation, provided net cash inflows of $51.3 million. Changes in working capital included $60.7 million of inventory purchased ($81.8 million of inventory was transferred into our rental fleet primarily for replenishment purposes) and an $18.3 million increase in accounts receivable. Cash flows from operating activities were favorably impacted by $64.3 million due to proceeds from the sale of rent-to-sell equipment and $4.9 million in net impact in accounts payable, accrued expenses, leases, and other operating liabilities offset by $28.3 million in net outflows related to manufacturer floor plans, and a $14.1 million net change in prepaid expenses and other assets.

Previous 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.

Current wording

For the nine months ended September 30, 2024, operating activities resulted in net cash provided by operations of $22.1 million. Our reported net loss of $51.5 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 $56.2 million. Changes in working capital included $152.2 million of inventory purchased ($105.6 million of inventory was transferred into our rental fleet primarily for replenishment purposes) and a $26.5 million decrease in accounts receivable. Cash flows from operating activities were favorably impacted by $92.5 million due to proceeds from the sale of rent-to-sell equipment, $8.4 million in net inflows related to manufacturer floor plans, and by a $3.2 million net change in prepaid expenses and other assets and unfavorably impacted by a $12.5 million decrease in accounts payable, accrued expenses, leases, and other operating liabilities.

Previous 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.

Current wording

Cash Flow from Investing Activities. For the nine months ended September 30, 2025, our cash used in investing activities was $19.3 million. This was mainly due to $47.6 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 $21.1 million proceeds from the divestitures as discussed in Note 15, $6.8 million proceeds from the sale of rent-to-rent equipment, and $0.4 million proceeds from the sale of non-rental property and equipment.

Previous 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.

Current wording

For the nine months ended September 30, 2024, our cash used in investing activities was $48.0 million. This was mainly due to $59.2 million purchases of rental equipment, non-rental property and equipment, and other investing activities partially offset by $8.9 million proceeds from the sale of rent-to-rent equipment and $2.3 million proceeds from the sale of non-rental property and equipment.

Previous 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.

Current wording

Cash Flow from Financing Activities. For the nine months ended September 30, 2025, cash provided by financing activities was $20.7 million. This cash inflow was mainly due to the $42.6 million of net proceeds from our line of credit, long-term borrowings, and finance lease obligations. These cash inflows were partially offset by payments of $6.1 million for preferred and common stock dividends, net payments of $8.2 million related to non-manufacturer floor plans, $6.5 million for common stock repurchases, and $1.1 million related to other financing activities.

Previous 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.

Current wording

For the nine months ended September 30, 2024, cash provided by financing activities was $9.7 million. This cash inflow was mainly due to the $353.5 million of net proceeds from our line of credit, long-term borrowings, and finance lease obligations, which funded the $319.4 extinguishment of our Senior Secured Second Lien Notes due April 2026 and the increase in net working capital previously noted. These cash inflows also were partially offset by payments of $8.1 million for preferred and common stock dividends, net payments of $9.3 million related to non-manufacturer floor plans, $2.0 million for common stock repurchases, and $3.1 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 $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.

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 $14.1 million in cash as of September 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 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.

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 nine months ended September 30, 2025 was $117.0 million, including $81.8 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 $71.1 million for the nine months ended September 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 June 30, 2025, we had $425.2 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 September 30, 2025, we had $402.5 million of available borrowings under the ABL Facility and Floor Plan Facilities.