ALTA EQUIPMENT GROUP INC.
For the period ended Dec 31, 2025. Filed Feb 26, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 26, 2026
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-K
Period ended 2024-12-31; filed 2025-03-05.
0000950170-25-033669
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-26.
0001193125-26-076932
Item 7. 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 96 previous paragraphs and 90 current paragraphs.
46 unchanged; 25 reworded; 19 added; 25 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 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 (19)
Current report
The North American construction equipment market continued to face cyclical softness throughout 2025, although signs of stabilization began to emerge late in the year. Dealer retail sales were subdued year over year, pressured by prolonged interest rate uncertainty, cautious customer sentiment, permitting delays, and pricing instability associated with tariffs across the dealer channel. Privately funded non-residential activity remained weak, particularly among small and mid-sized contractors, while publicly funded infrastructure programs, supported by elevated levels of state-based DOT spending and the Infrastructure Investment and Jobs Act ("IIJA"), continued to provide a meaningful counterbalance against challenged privately funded non-residential activity. The operating environment was further pressured by continued tariff volatility, which contributed to higher material costs and delayed purchasing decisions across several end-market channels. Competitive pricing dynamics and margin compression persisted as OEMs and dealers worked through excess channel inventories, though late-year improvements in dealer purchasing intentions indicate emerging restocking behavior and a healthier demand backdrop heading into 2026. Major construction equipment OEMs have noted expectations for the 2026 North American construction equipment market ranging from a modest contraction to 7% growth.
Current report
The North American lift truck market entered a normalization phase in 2025 as the industry continued to work through the elevated backlogs accumulated during the 2021-2022 supply-chain dislocation. Industry bookings softened through the year as customers delayed fleet replacements in response to macroeconomic uncertainty, tariff-driven cost pressures, and reduced equipment utilization in certain manufacturing sectors. As backlogs declined, manufacturers adjusted production schedules accordingly. Despite these near-term headwinds, underlying fundamentals in core material‑handling sectors like food and beverage, retail distribution, and logistics remained constructive. Further, adoption of advanced power solutions, particularly lithium-ion platforms and early-stage automation technologies, also continued to expand across customer fleets. As excess channel inventories continue to be absorbed and customer engagement improving, the lift truck industry expects bookings to strengthen in the latter half of 2026, supporting a more constructive long-term outlook for this segment.
Current report
Following global supply-chain constraints that characterized 2021 and 2022, equipment availability improved meaningfully during 2023 and 2024, resulting in elevated dealer stock levels industrywide, particularly in the construction equipment segment. This trend continued into early 2025 as channel inventories remained above historical norms in several categories, a dynamic compounded by muted demand from privately funded non-residential contractors and cautious purchasing behavior stemming from tariff volatility and higher financing costs. Despite these broader market pressures and aggressive competitive discounting, we maintained disciplined inventory management and reduced new equipment inventory by $51.5 million year over year, improving asset efficiency and positioning us well entering 2026. Industry survey data indicates that while new equipment inventory levels remained elevated at the beginning of 2025, they trended down modestly throughout the year as OEMs adjusted production schedules and end-market demand began to stabilize.
Current report
With equipment availability improving during 2023, we strategically replenished and expanded our rental fleet at a time when utilization and pricing remained strong. During 2024 and into 2025, however, North American rental utilization rates moderated as supply increased across the rental channel and end-market activity softened in several construction-related sectors. In recognition of this trend, we undertook a targeted optimization initiative beginning in mid-2024, aimed at reducing identified excess primarily within our rent-to-sell categories and asset classes with substandard rental return characteristics. This action resulted in a $84.3 million reduction in rental fleet gross cost from June 30, 2024 through December 31, 2025, which included a sizeable divestiture of aerial rental fleet in our Illinois region resulting in a $4.3 million gain on sale. Aligning our rental fleet investment decisions with market demand, focusing on optimizing mix, improving turns, and prioritizing categories with the strongest utilization, margin, and resale performance has enhanced the overall quality of earnings and strengthened the asset efficiency profile of the Company. Rental rates remained stable to slightly positive in 2025, supported by a more rational competitive environment and improving visibility into 2026 project pipelines.
Current report
Demand for product support remained resilient in 2025 as customers continued to prioritize equipment uptime amid a more cautious capital investment environment. While overall product support revenues were essentially flat year over year, declining modestly by $0.5 million, from $548.2 million to $547.7 million, growth was tempered by lower equipment utilization across several key end markets, including automotive and manufacturing sectors, which influenced material handling product support activity. Despite this, demand for skilled technician labor continues to underpin a growth-oriented outlook. Elevated deliveries of new equipment in 2022 and 2023 helped to expand the installed base which will soon be entering mid-life service cycles, contributing to an expected lift in parts and service activity. At the same time, the material handling industry’s ongoing transition toward electric lift trucks, while reducing mechanical parts consumption per unit, has continued to shift the revenue mix toward labor-intensive service work based on software diagnostics. We expect this trend to persist as electrified and increasingly autonomous equipment requires advanced diagnostics, firmware management, and OEM-certified service capabilities. Additionally, electric lift trucks create incremental revenue opportunities in batteries, chargers and charging infrastructure, and power management solutions, partially mitigating the long-term decline in traditional parts intensity.
Current report
Revenues: Consolidated revenues decreased by $40.7 million to $1,835.9 million for the year ended December 31, 2025 as compared to 2024 as modest gains in new and used equipment sales and service revenues were more than offset by declines experienced within the rental departments of the business. Rental revenues and rental equipment sales declined organically by 10.2% and 21.0%, respectively, representative of a smaller average rental fleet consistent with the Company's ongoing fleet optimization initiatives and lower utilization levels. Across the equipment sales portfolio, performance varied by segment. The Construction Equipment segment delivered year-to-date growth in new and used equipment sales, supported by improved deliveries, competitive OEM programs, and steady demand across key end markets, particularly publicly-funded infrastructure, road building, and aggregate mining. In contrast, the Material Handling segment experienced lower equipment sales, driven by reduced unit deliveries and a modest contraction in market size and share in select geographies as customers continued to delay fleet replacements amid macro uncertainty and tariff-driven cost pressures. Product support revenues remained comparatively stable at the consolidated level. The Material Handling segment experienced declines amid softer parts and service activity due to lower customer fleet utilization, reduced billable headcount, and weaker demand in automotive and general manufacturing end markets. By comparison, the Construction Equipment segment maintained steady 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.
Current report
Consolidated gross profit decreased by 40 basis points to 25.9% in the year ended December 31, 2025 compared to 26.3% over the same period in 2024 as margin compression in new and used equipment and rental operations offset gains in parts and service. New and used equipment sales margins decreased 100 basis points to 14.1%, impacted by a less favorable sales mix, heightened competitive pricing conditions stemming from industry oversupply, and rising input costs, including tariff-related increases that were not fully recoverable through pricing actions. Parts gross profit margins increased by 120 basis points from the prior year, reflecting disciplined pricing execution, partially offset by the impact of broad-based tariff increases. Service gross profit margins improved in the year ended December 31, 2025 when compared to the prior year, increasing 110 basis points, supported by stronger labor rate realization, technician efficiency gains, and improved warranty labor recoveries, aligning with ongoing initiatives across both major segments to enhance billable time, reduce non-productive hours, and optimize service profitability. Rental revenues gross profit margin decreased 150 basis points for the year, primarily reflecting the influence of depreciation costs on a reduced revenues base following the Company's fleet optimization efforts, exacerbated by lower utilization levels across several markets. While rental operations experienced lower utilization, strategic disposals of underperforming assets contributed to a 60 basis point compression in rental equipment sales margins. These actions were designed to enhance asset efficiency and support a more disciplined and rationalized rental strategy heading into 2026.
Current report
Operating expenses: Consolidated operating expenses decreased by 5.0% to $451.4 million for the year ended December 31, 2025 compared to the prior 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
Other expense, net: Consolidated other expense, net for the year ended December 31, 2025 was $82.0 million compared to $84.9 million for the year ended December 31, 2024. The decrease is attributed to the impact of one-time events, specifically the gain on divestitures in 2025 and debt extinguishment losses in 2024 related to refinancing activities, all of which were partially offset by changes in interest expense year over year.
Current report
Revenues: Material Handling segment revenues decreased by $33.1 million to $654.3 million for the year ended December 31, 2025 as compared to the same period last year. Organic revenues declined $34.4 million, or 5.0% for the year ended December 31, 2025, reflecting a demand environment consistent with the broader lift-truck industry's 2025 performance, in which customers delayed fleet replacements and reduced capital commitments amid macro uncertainty and tariff-related cost pressures. Organic new and used equipment sales decreased by 7.7% driven by softer industry bookings throughout 2025 as customers continued to defer capital expenditures, extended replacement cycles, and moderated utilization levels across several end markets, most prominently experienced in automotive and manufacturing sectors. The trends experienced in 2025 aligned with broader market behaviors, as the industry’s continued absorption of backlogs originating from the 2021-2022 supply-chain disruptions tempered quoting velocity and order intake overall. Product support revenues declined $8.8 million organically, with a $5.6 million reduction in parts sales and a $3.2 million decrease in service revenues. While overall product support held relatively resilient, softer activity in key customer verticals such as automotive and general manufacturing contributed to the business carrying a lower billable technician headcount year over year. Rental revenues decreased 9.1% organically for the year ended December 31, 2025 as compared to 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 $9.3 million organically, or 88.6%, supported by targeted disposals of underutilized assets and matching customer demand for cost effective used equipment alternatives. The increase in rental equipment sales aligns with the Company's 2024-2025 fleet optimization initiatives aimed at reducing excess rental fleet and improving overall asset efficiency.
Current report
Material Handling gross profit for the year ended December 31, 2025 increased 60 basis points to 33.0% compared to the same period in 2024. New and used equipment gross margins improved partly due to the absence of the prior-year fourth-quarter auction disposition activity that had compressed used equipment margins, along with reduced pressure on used equipment pricing. Although used equipment margins improved, overall margin performance was tempered somewhat by sales-mix variances and tariff-related cost pressures concentrated in the new equipment category, where margins held relatively stable due to the ability to pass through much of these upstream costs. Parts gross margins improved slightly on disciplined pricing execution and are in line with expectations. Service margins aligned with expectations and improved by 50 basis points for the year ended December 31, 2025, supported by selective effective labor rate increases, though partially offset by modest unfavorable quote variances. Rental revenues gross margins declined 270 basis points primarily 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, supported by the strategic disposal of aging assets and strong demand for competitively priced used equipment.
Current report
Operating expenses: Operating expenses decreased by $3.9 million to $190.2 million for the year ended December 31, 2025 as compared to the prior 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 reduced personnel-related costs, including expenses associated with the Company’s self-insured health plan. Further contributing to the year-over-year reduction was a decline in fuel costs, which provided meaningful benefit given the scale of our field-based technician workforce.
Current report
Other expense, net: Other expenses increased by $0.7 million to $24.3 million for the year ended December 31, 2025 as compared to the same period last year mainly reflecting higher interest expense resulting from increased debt levels and a higher effective interest rate following our 2024 debt refinancing, partially offset by a gain on divestiture from the sale of the Dock and Door division of our business in the New York and Boston regions.
Current report
Revenues: Construction Equipment segment revenues decreased by 1.3% to $1,116.7 million for the year ended December 31, 2025 versus prior year. Organically, the segment revenues decreased 1.0% for the year ended December 31, 2025 as compared to the same period last year. Organic new and used equipment sales increased $36.1 million, or 6.3%, with most of the growth occurring in the second and fourth quarters. This performance was supported by competitive OEM promotional programs, increased customer purchasing activity tied to OBBBA legislation that enhanced bonus depreciation benefits on equipment acquisitions, and steady demand across key end markets, such as road building and aggregate mining. Product support revenues, consisting of parts and service, increased 1.2% organically, aided by improved pricing and continued technician efficiency improvements in several regions. Rental revenues decreased 10.1%, on an organic basis for the year ended December 31, 2025 as compared to the prior year driven by a lower average rental fleet size between the comparable periods and reduced fleet utilization in select markets. The year-over-year decline is a byproduct of the Company’s strategic repositioning of its rent-to-sell fleet to better align with current market conditions and focus on higher return asset categories. Rental equipment sales decreased for the year ended December 31, 2025 by $38.3 million 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, the aforementioned strategic repositioning of the segments rent-to-sell fleet, and reduced throughput of lightly used, rent-to-sell heavy equipment to our customer base in 2025.
Current report
Construction Equipment gross profit decreased by 70 basis points to 21.8% from 22.5% for the year ended December 31, 2025 as compared to 2024 driven primarily by lower margins on equipment sales. New and used equipment sales margins decreased by 120 basis points to 11.2%, reflecting a less favorable product mix and heightened pricing competitiveness across the industry as OEMs and dealers worked through elevated channel inventories for much of the year. These dynamics were consistent with broader market conditions as the industry sought to normalize inventory levels. Rental equipment sales gross margin for the year ended December 31, 2025 decreased by 230 basis points, reflecting the Company's deliberate reduction of underutilized rent-to-sell assets as part of its strategy to dispose of underperforming equipment, optimize fleet mix, and enhance long-term returns and asset efficiency. Parts sales margins improved by 170 basis points for the year ended December 31, 2025, remaining within expected ranges, supported by continued pricing discipline. Service gross margins increased by 200 basis points due to improved labor rate realization, technician efficiency gains, and improved warranty recovery, a result consistent with ongoing initiatives to increase billable hours, manage non‑productive time, and strengthen warranty recovery processes across the network. Rental revenues gross margin for the year ended December 31, 2025 decreased by 100 basis points compared to the same period last year a result of a reduced amount of fleet on rent.
Current report
Operating expenses: Construction Equipment operating expenses decreased by $17.5 million to $227.3 million for the year ended December 31, 2025 as compared to 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.
Current report
Other expense, net: Construction Equipment other expense, net decreased by $1.5 million to $44.6 million for the year ended December 31, 2025 as compared to the same period in 2024. The variance was driven by the gain on the divestiture of substantially all 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.
Current report
Revenues: Master Distribution segment revenues for the year ended December 31, 2025 were $67.3 million, an increase of $8.1 million from the prior year same period. The majority of this growth came from new and used equipment sales, which rose by $7.6 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 improved for the year ended December 31, 2025 as pricing actions beginning in the second quarter offset tariff-driven cost increases. The business segment continues to actively pursue pricing and sourcing strategies to support long-term profitability given its direct exposure to European OEMs which are subject to U.S. tariffs.
Current report
For the year ended December 31, 2025, gross profit margin on new and used equipment sales were 20.5%, down from the prior year and reflective of higher input costs generally related to the weakening of the U.S. dollar against the Euro and the influence of tariffs on imported goods. Parts sales gross profit margin were 41.9% for the year ended December 31, 2025, down 190 basis points compared to the same period last year, following broad-based increases in steel and aluminum tariffs partially offset by parts pricing actions and negotiations with major OEMs. These pricing actions, together with alternative sourcing initiatives, are expected to support margin stabilization in future periods.
Removed paragraphs (25)
Previous report
The North American construction equipment market experienced a downturn in 2024, with overall sales declining by approximately 10%, while some of the regions we operate in experienced reductions of up to 20%. This decline aligns with the cyclical nature of the industry. Notably, construction equipment manufacturers like Caterpillar and John Deere reported reduced sales in North America, attributed to slowing end-user demand and elevated inventory levels at machinery dealers throughout North America. Similarly, Volvo Construction Equipment reported a 20% decline in North American sales. Elevated interest rates and volatile sentiment in the marketplace underpinned by the U.S. presidential election contributed to a decrease in equipment orders. Market participants have noted that specifically, smaller to mid-sized local contractors focused on privately funded non-residential projects, were negatively impacted by the aforementioned factors and thus hesitant to committing capital to new equipment in 2024. This softening amongst local contractors and small privately funded projects was offset by continued growth amongst larger contractors working on multi-year publicly funded projects (e.g. state or federal funded infrastructure projects). Lastly, with construction equipment supply in the OEM dealer channel at historically high levels in the face of weakening demand, competitive pricing, discounting and compressed margins were all thematic across the construction equipment industry in 2024.
Previous report
In contrast, the North American lift truck market exhibited growth in 2024, in terms of shipments to end users, as the industry continued to deliver off of record levels of bookings in the 2021-2022 post-COVID timeframe. Robust manufacturing sectors and expanding logistics operations are driving investments in advanced material handling solutions, including trends toward lithium battery and fuel cell-powered lift trucks and autonomous solutions. Given the sales backlog overhang that the industry continued to navigate in 2024, bookings for future lift trucks declined in 2024 when compared to previous years, as lead times and production schedules at industry OEMs continued to normalize. As backlogs reduced, lift truck manufacturing volumes are projected to be down in 2025 as supply and demand factors find their level with industry bookings expected to rebound in the second half of 2025. Although the North American lift truck industry faces production headwinds entering 2025, we remain generally optimistic about this segment. This confidence stems from the resilience of our material handling end markets - key pillars of the U.S. economy such as food production, retail, and logistics - as well as our ability to continue gaining market share.
Previous report
Throughout 2021 and 2022, our industry was unfavorably impacted by equipment supply chain constraints leading to shortages across construction and material handling equipment categories and limiting our ability to meet customer demand and potentially increase our market share. Throughout 2023, equipment supply chain constraints gradually subsided, resulting in an increase in our new equipment inventories relative to prior periods. This theme continued into early 2024 as dealer stock levels continued to rise industrywide, especially in the Construction Equipment segment, exasperated by demand contraction at the end user level. This dynamic led to intense pressure on equipment sales pricing in 2024, which impacted our sales and our equipment sales gross margins. Despite the difficult competitive environment and the challenging supply and demand dynamics that existed throughout 2024, we were pleased to have kept new inventory levels essentially flat, year over year.
Previous report
As it pertains to rental fleet, with the increase in equipment availability, in 2023 we were able to replenish and strategically grow our rental fleet in a period where utilization and pricing remained strong. In 2024, North American rental utilization rates began to recede as supply of rental fleet was robust, and rental rates moderated. Accordingly, and in-line with foreseeable demand, in mid-2024 we strategically optimized our fleet by reducing identified excess, primarily in our rent-to-sell product categories. This initiative led to a $46.0 million reduction in rental fleet gross cost from June 30, 2024, bringing the total to $571.2 million as of December 31, 2024.
Previous report
In terms of product support, as our customers focus on the “up-time” of their equipment, we continued to see strong demand for skilled technicians' labor and replacement parts in 2024, as evidenced by our growing organic product support revenues, despite certain industry indicators pointing to a reduction in equipment utilization (e.g. the amount of hours equipment was utilized) year over year. With the level of new equipment deliveries over the previous two years, parts sales growth has moderated as the newer age field population consumes fewer parts in the earlier stages of the equipment life cycle. Additionally, as the material handling industry continues the trend toward electric forklifts, versus gas-powered, parts yields on equipment field population will continue to be pressured. Given our history, the reduction in parts consumption on electric trucks, over time, will be offset by skilled technician labor as software diagnostics and the complexity of new electrified, and potentially autonomous, equipment will demand high-end, closed-network service solutions from OEM dealers to keep customer equipment operational. Additionally, electric trucks present ancillary revenue opportunities related to batteries, chargers and charging infrastructure when compared to gas-powered trucks.
Previous report
Revenues: Consolidated revenues decreased by $0.2 million to $1,876.6 million for the year ended December 31, 2024 as compared to 2023. The increases in product support, rental revenues and rental equipment sales were substantially offset by the decrease in new and used equipment sales due to weakened market demand for heavy equipment. The decline in new and used equipment sales was most significant in our Master Distribution segment, which primarily supplies equipment to sub-dealers, with revenues for the year ended December 31, 2024, decreasing by $24.5 million compared to the prior year. This was followed by our Construction Equipment segment, which saw a $23.5 million decline in new and used equipment sales. While new and used equipment revenues stagnated on weaker demand versus last year, our product support departments (parts and service) grew 2.3% organically for the year ended December 31, 2024. Rental revenues exhibited a 4.2% organic decrease, as rates moderated and utilization decreased from the prior year. Rental equipment sales increased organically by 5.5% for the year ended December 31, 2024 as we looked to sell rental equipment to help bolster field population for our aftermarket departments, however some of the increase was processed through auction sale channels impacting gross profit margins.
Previous report
Consolidated gross profit decreased by 70 basis points from 27.0% in the year ended December 31, 2023 to 26.3% over the same period in 2024. New and used equipment sales margins decreased 170 basis points to 15.1%, a reflection of a comparably softened pricing environment, which was primarily observed in both our Material Handling and Construction Equipment segments, and due to our use of the auction sales channel in the fourth quarter for a number of aged used and rental units in the Material Handling fleet. Primarily, the impact of an over-supplied construction equipment market and historically competitive pricing led to a 250 basis point gross profit margin decrease when compared to the prior year. Parts gross profit margins decreased by 80 basis points from the prior year, isolated primarily within the Master Distribution segment but remained within our range of expectation overall. Service gross profit margins improved in the year ended December 31, 2024 when compared to the prior year increasing 120 basis points, primarily due to an improved rate realization on service labor. We realized a 130 basis point decrease in rental revenues gross profit margin for the year ended December 31, 2024, largely a result of moderating rental rates and fleet utilization as well as higher rental depreciation expense.
Previous report
Operating expenses: Consolidated operating expenses increased by 4.9% to $475.1 million for the year ended December 31, 2024 compared to the prior year, primarily driven by the full period impact from our 2023 acquisitions and additional expenses to support our organic growth including new branches with associated one-time costs, such as grand openings and initial stocking costs.
Previous report
Other expense, net: Consolidated other expense, net for the year ended December 31, 2024 was $84.9 million compared to $51.9 million for the year ended December 31, 2023. The increase is primarily due to an increase in interest expense, namely a result of the refinance of our Senior Secured Second Lien Notes during the second quarter of 2024.
Previous report
Revenues: Material Handling segment revenues increased by $5.9 million to $687.4 million for the year ended December 31, 2024 as compared to the same period last year. Organically, the segment revenues increased $4.1 million, or 0.6% for the year ended December 31, 2024. New and used equipment sales were relatively flat over last year as we worked through a notable new equipment sales backlog to begin 2024 that helped stabilize results despite a depressed demand environment in the equipment spot market. New equipment sales for lift trucks improved in 2024 due to our strong backlog and equipment availability during the year, but used equipment pricing and demand suffered along with fewer opportunities for our automated equipment installation and warehouse management systems integration offerings. Product support revenues improved by 0.9%, with service revenues increasing 1.9% for the year ended December 31, 2024 as compared to prior year reflecting our ability to pass along inflationary-based pricing increases to our customers to support their fleets. Rental revenues decreased 0.4% for the year ended December 31, 2024 as compared to last year primarily due to reduced physical utilization of our fleet. Rental equipment sales increased $5.3 million organically, or 101.9%, on low volume as we have strategically targeted and disposed of underperforming rental units or rental units that have reached the end of their useful life in our fleet. In the fourth quarter of 2024, we specifically leveraged auction channels to offload an atypical volume of aged used equipment, primarily from our rental department, as a strategic measure to adjust our fleet size.
Previous report
Material Handling gross profit for the year ended December 31, 2024 decreased 110 basis points to 32.4% compared to the same period in 2023. New and used equipment gross margins compressed in part from the used equipment auction related losses experienced in the fourth quarter, but also due to sales mix variances, with reduced sales coming from Peaklogix, our higher margin warehousing solutions platform and increased pressure on used equipment pricing throughout 2024. Parts gross margins have remained relatively consistent year over year and in line with expectations. The 170 basis point service margin increase for the year ended December 31, 2024 can be attributed to margin improvements in major service categories, including customer and OEM warranty and fleet work, and on better pricing realization and technician productivity measures. Rental revenues gross margins declined 220 basis points primarily due to replenishing our rental fleet and the associated increase in depreciation expense as well as lower utilization levels. Rental equipment sales margins decreased on low volumes amid pricing pressures from greater availability of equipment in the marketplace relative to the prior year and disposal of underperforming units through the auction channel in the fourth quarter.
Previous report
Operating expenses: Operating expenses decreased by $1.8 million to $194.1 million for the year ended December 31, 2024 as compared to the prior year, primarily due to a change in the intercompany allocation of costs and cost savings initiatives implemented during 2024 which primarily impacted personnel related expenses.
Previous report
Other (expense) income, net: Other expenses increased by $6.0 million to $23.6 million for the year ended December 31, 2024 as compared to the same period last year. The increase is mainly related to the aforementioned cumulative change in intercompany expense allocation for shared service functions and increased interest expense due to higher effective interest rates, inventory, and rental fleet levels realized in 2024 when compared to 2023.
Previous report
Revenues: Construction Equipment segment revenues increased by 0.6% to $1,131.4 million for the year ended December 31, 2024 as compared to the same period last year, primarily related to the full-period impact from the Burris and Ault acquisitions made in the fourth quarter of 2023. Organically, the segment revenues decreased 5.1% for the year ended December 31, 2024 as compared to the same period last year. Organic new and used equipment sales decreased by $60.7 million, or 10.2%, amidst an overall decline in demand for heavy equipment in 2024, with certain of our markets (defined as volume of new heavy construction units sold into a region) declining by approximately 20%. Market demand for equipment from small and medium sized contractors declined as uncertainty surrounding the U.S. presidential election created apprehension amongst contractors and as elevated interest rates made new project funding more challenging than previous years. Further, heightened new equipment availability and dealer stock levels throughout the industry resulted in an increased competitive environment compared to the prior year making holding market share in certain regions and product categories more difficult. Despite a challenging environment for equipment sales, product support revenues, consisting of parts and service revenues, increased 3.7% organically as we have been able to increase skilled technician headcount and improve rate realization on service labor. Rental revenues decreased 6.8%, on an organic basis for the year ended December 31, 2024 as compared to the prior year on a reduced average fleet size, while rental equipment sales increased for the year ended December 31, 2024 by $1.8 million due to strategic sales of rental equipment to generate field population and right-sizing fleet levels to match realized levels of rental equipment demand.
Previous report
Construction Equipment gross profit decreased by 40 basis points to 22.5% from 22.9% for the year ended December 31, 2024 as compared to 2023, with lower margins on equipment sales reflective of elevated new inventory levels at heavy machinery dealers throughout the industry combined with softening demand, both of which led to a highly competitive pricing environment and lower margins realized in 2024 when compared to history. Specifically, new and used equipment sales margins decreased by 140 basis points to 12.4%, given the aforementioned market dynamics, leading to new and used gross profit decreasing to $71.1 million from $82.4 million in the same period last year. Despite higher rental equipment sales, the softened and highly competitive used equipment pricing environment in 2024 led to a 250 basis point decrease in rental equipment sales margin when comparing the year-over-year periods (equating to rental equipment gross profits of $30.5 million compared to $32.6 million from the same period last year). Parts sales margins for the year ended December 31, 2024 remained consistent when compared to the same time last year, decreasing by 30 basis points but within our expected range. Service gross margins increased by 70 basis points from 2023 primarily related to improved rate realization. Rental revenues gross margin for the year ended December 31, 2024 decreased by 90 basis points compared to the same period last year as depreciation increased despite a lower level of average fleet size.
Previous report
Operating expenses: Construction Equipment operating expenses increased by $22.5 million to $244.8 million for the year ended December 31, 2024 as compared to 2023. The overall increase is mainly due to the full-period impact from the Burris and Ault acquisitions made in the fourth quarter of 2023 but is also influenced by relatively higher facility-related expenses from new branch openings. Sequentially across quarters, organic operating expenses decreased in both of the last two quarters of 2024, as cost-saving measures were successfully implemented, primarily impacting personnel related expenses. Additionally, and similar to the Material Handling segment, a year-to-date cumulative change in the allocation of intercompany expenses for shared service functions from Other income to General and administrative expenses was made during the third quarter of 2023, partially offsetting the aforementioned increases from acquisitions.
Previous report
Other (expense) income, net: Construction Equipment other expense, net increased by $17.6 million to $46.1 million for the year ended December 31, 2024 as compared to the same period in 2023. The variance was mainly due to increased floor plan interest expense related to a combination of higher effective interest rates on higher levels of new inventory that were no longer within the subsidized period of our OEMs, higher effective interest rates on operating debt borrowings and increased debt from financed acquisitions within the segment (Ault and Burris purchased Q4 2023).
Previous report
Revenues: Master Distribution segment revenues for the year ended December 31, 2024 were $59.2 million, a decrease of $24.6 million from the prior year same period. Our Master Distribution segment has established a distinct position in the marketplace for sales of specialized equipment designed for customers in environmental processing and waste management throughout North America. The Master Distribution segment has two primary sales channels for which it sells equipment: (1) through its dealer channel whereby contractual relationships are established with sub-dealers that hold stock inventory and ultimately sell to end users and (2) through direct sale relationships whereby end customers source specific types of equipment directly. As dealer channel sales depend on sub-dealer stocking levels, in 2023 the supply of new equipment was in the initial phase of meeting high levels of pent-up post-pandemic demand and our Master Distribution sub-dealers fulfilled stocking needs. With sub-dealer stocking levels full in 2024, by contrast, sales volumes reduced for our Master Distribution segment. Further, a challenging equipment demand environment due in part to an elevated interest rate environment contributed to volume and revenues declines in 2024. On a positive note, despite being a smaller portion of the total sales mix, the Master Distribution segment's direct sale business, primarily consisting of compost turning and bulk commercial food waste processing machinery, gained traction in 2024. Segment-level parts sales were down for the year ended December 31, 2024 as we sold multiple large component parts in 2023 when compared to 2024 and we observed increased competition from parts "Will-Fitters" (non-OEM manufacturers) on high-volume wear parts, all coupled with an overall depressed demand environment.
Previous report
For the year ended December 31, 2024, gross profit margin on new and used equipment sales were 25.2%, relatively flat from prior year and in line with expectations. Parts gross profit margin was 43.8% for the year ended December 31, 2024, down 520 basis points compared to the same period last year, related to the aforementioned large component parts sales in 2023 and pricing pressures from aftermarket competitors of high-volume wear parts.
Previous report
Acquisition Accounting
Previous report
We have made significant acquisitions in the past and we intend to make additional acquisitions in the future that meet our selection criteria with an objective of increasing our revenues, improving our profitability, diversifying our end market and geographic exposure and strengthening our competitive position. The assets acquired and liabilities assumed (including contingent purchase consideration) are recorded based on their respective fair values at the date of acquisition. Such fair value assessments require judgments and estimates that can be affected by various factors over time, which may cause final amounts to differ materially from original estimates. The significant judgments include the estimation of future cash flows, which are dependent on forecasts; the estimation of a long-term rate of growth; the estimation of the useful life over which cash flows will occur; and the determination of a risk-adjusted weighted average cost of capital. When appropriate, our estimates of the fair values of assets and liabilities acquired include assistance from independent third-party appraisal firms. The judgments made in determining the estimated fair value assigned to the assets acquired, as well as the estimated life of the assets, can materially impact net income in periods subsequent to the acquisition through depreciation and amortization, and in certain instances through impairment charges, if the asset becomes impaired in the future. As discussed below, we regularly review impairment indicators.
Previous report
New and used equipment inventories, long-lived assets (primarily rental equipment), goodwill, and other intangible assets generally represent the largest component of our acquisitions. Equipment inventory and rental fleet acquired in the transaction are valued at fair value, which approximates a market participant’s estimated selling price adjusted for (1) costs to sell and (2) a reasonable profit allowance. In addition to long-lived assets, we also acquire other assets and assume liabilities. These other assets and liabilities typically include, but are not limited to, parts inventory, accounts receivable, accounts payable, floor plans payable and other working capital items. Because of their short-term nature, the fair values of these assets and liabilities generally approximate the carrying values reflected on the acquired entities' balance sheets. However, when appropriate, we adjust these carrying values for factors such as collectability, existence, and consistency with Company accounting policies.
Previous report
For acquisitions involving additional consideration to be transferred to the selling parties in the event certain future events occur or conditions are met (“contingent consideration”), we recognize the acquisition date fair value of contingent consideration as part of the consideration transferred in exchange for the business combination. Contingent consideration meeting the criteria to be classified as equity is not remeasured and is recorded within "Additional paid-in capital" on the Consolidated Balance Sheets. Contingent consideration classified as a liability is remeasured to fair value at each reporting date until the contingency is resolved, with any changes in fair value recognized in our Consolidated Statements of Operations.
Previous report
Pursuant to accounting standard Topic 350 -Intangibles - Goodwill and Other, we record as goodwill the excess of the consideration transferred over the fair values of the identifiable net assets acquired. The intangible assets that we have acquired consist of tradenames, non-compete agreements, supplier relationships, and customer relationships. A tradename has a fair value equal to the present value of the royalty income attributable to it. The royalty income attributable to a tradename represents the hypothetical cost savings that are derived from owning the tradename instead of paying royalties to license the tradename from another owner. The fair value of non-compete agreements is estimated based on an income approach since their values are representative of the current and future revenues and profit erosion protection they provide. Customer and supplier relationships are generally valued based on an excess earnings or income approach with consideration to projected cash flows.
Reworded paragraphs (25)
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
Service revenues. We provide maintenance and repair services for customer-owned equipment and maintain our own rental fleet. 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 $565.5 million as of December 31, 2024. The original acquisition cost of our rental fleet excludes $5.7 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 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 $529.8 million as of December 31, 2025. The original acquisition cost of our rental fleet excludes $3.1 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.
Previous wording
New equipment sales. Cost of new equipment sold consists of the total acquisition costs of the new equipment we purchase from third parties.
Current wording
New equipment sales. Cost of new equipment sold primarily consists of the total acquisition costs of the new equipment we purchase from third parties and costs to inspect, prepare, and deliver to the customer.
Previous wording
Used equipment sales. Cost of used equipment sold consists of the net book value, or cost, of used equipment we purchase from third parties or the trade-in value of used equipment that we obtain from customers in new equipment sales transactions.
Current wording
Used equipment sales. Cost of used equipment sold primarily consists of the net book value, or cost, of used equipment we purchase from third parties or the trade-in value of used equipment that we obtain from customers in new equipment sales transactions combined with our inspection, preparation, and delivery costs to sell to the customer.
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, 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, for information on our rental equipment depreciation methods.
Previous wording
The above tables contain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the consolidated statements of operations, balance sheets or statements of cash flows of the company. We disclose non-GAAP financial measures, including Adjusted EBITDA and organic revenues and growth rates associated with organic revenues because we believe they are useful performance measures that assist in an effective evaluation of our operating performance. We believe such measures are useful for investors and others in understanding and evaluating our operating results in the same manner as our management. However, such measures are not financial measures calculated in accordance with U.S. GAAP and should not be considered as a substitute for, or in isolation from, net income, revenues, or any other operating performance measures calculated in accordance with U.S. GAAP.
Current wording
The above tables contain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts in the most directly comparable measure calculated and presented in accordance with GAAP in the consolidated statements of operations, balance sheets or statements of cash flows of the company. We disclose non-GAAP financial measures, including Adjusted EBITDA and organic revenues and growth rates associated with organic revenues because we believe they are useful performance measures that assist in an effective evaluation of our operating performance. We believe such measures are useful for investors and others in understanding and evaluating our operating results in the same manner as our management. However, such measures are not financial measures calculated in accordance with U.S. GAAP and should not be considered as a substitute for, or in isolation from, net income (loss), revenues, or any other operating performance measures calculated in accordance with U.S. GAAP.
Previous wording
We define Adjusted EBITDA as net income before interest expense (not including floor plan interest paid on new equipment), income taxes, depreciation and amortization, adjustments for certain one-time or non-recurring items, other items not necessarily indicative of our underlying operating performance and other items. We exclude these items from net income in arriving at Adjusted EBITDA because these amounts are either non-recurring or can vary substantially within the industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired.
Current wording
We define Adjusted EBITDA as net income (loss) before interest expense (not including floor plan interest paid on new equipment), income taxes, depreciation and amortization, adjustments for certain one-time, non-recurring or non-cash items, and items not necessarily indicative of our underlying operating performance. We exclude these items from net income (loss) in arriving at Adjusted EBITDA because these amounts are either non-cash, non-recurring or can vary substantially within the industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired.
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 subsequent tables in management's discussion and analysis of our individual business 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
Income tax benefit: The Company recorded an income tax benefit of $4.2 million and $6.4 million for the years ended December 31, 2024 and 2023, respectively. The income tax benefit in the current year was primarily due to pre-tax losses partially offset by the valuation allowance recorded against a portion of the deferred tax asset relating to the U.S. disallowed interest expense carryforwards created by the provisions of the TCJA while the prior year benefit was due to the release of the valuation allowance on certain U.S. federal and state deferred tax assets.
Current wording
Income tax expense (benefit): The Company recorded an income tax expense of $21.5 million and benefit of $4.2 million for the years ended December 31, 2025 and 2024, respectively. The income tax expense in the current year was primarily due to the One Big Beautiful Bill Act ("OBBBA") enacted into law during the third quarter. Before OBBBA was enacted, interest expense limitation rules positioned the Company in a taxable income situation prior to the application of its net operating losses (“NOLs”), the use of which were limited and unable to shield the entirety of the Company’s taxable income. This resulted in cash taxes paid in recent years which reduced available cash liquidity. As the Company was using its NOLs, there was no need to recognize a valuation allowance against the NOL deferred tax assets ("DTAs"). For the Company, the enactment of the OBBBA legislative changes resulted in a taxable loss position on a trailing 12-quarter recast basis, prior to the application of its NOLs, primarily as a result of the change to the interest expense limitation rules. Thus, future usage of the Company’s NOLs to shield taxable income was no longer more likely than not and a full valuation allowance against those NOL DTAs was deemed appropriate, leading to the significant increase in deferred income tax expense in 2025. Going forward, given the change to the interest expense limitation and the Company now being in a taxable loss situation, cash taxes paid by the Company will be reduced, a benefit to available cash liquidity in the future. The income tax benefit in 2024 was primarily due to pre-tax losses partially offset by the valuation allowance recorded against a portion of the DTA relating to the U.S. disallowed interest expense carryforwards created by the provisions of the Tax Cuts and Jobs Act of 2018 ("TCJA").
Previous wording
Operating expenses: Master Distribution segment operating expenses were $16.5 million for the year ended December 31, 2024, up $0.6 million from 2023. The increase from the prior year is primarily related to non-cash adjustments for contingent consideration earn-outs associated with the acquisition of Ecoverse in November 2022. Removing the impact of earn-out related expenses, segment-level operating expenses were slightly down against 2023.
Current wording
Operating expenses: Master Distribution segment operating expenses were $11.8 million for the year ended December 31, 2025, down $4.7 million from 2024. The decrease primarily reflects non-recurring costs incurred in the prior year for non-cash contingent consideration expense associated with the earnout component of the acquisition of Ecoverse. Removing the impact of earn-out related expenses, operating expenses were relatively flat despite higher revenues in the current year.
Previous wording
Other expense, net: Master Distribution other expense was $4.8 million for the year ended December 31, 2024, an increase of $1.4 million over the prior year primarily attributed to higher interest costs on larger inventory balances.
Current wording
Other expense, net: Master Distribution other expense was $6.5 million for the year ended December 31, 2025, an increase of $1.7 million over the 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
Cash Flow from Operating Activities. Cash flows from operating activities include net income adjusted for non-cash items and the effects of changes in working capital. For the year ended December 31, 2024, operating activities resulted in net cash provided by operations of $57.0 million. Our reported net loss of $62.1 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 $63.5 million. Changes in working capital included $145.3 million of inventory purchased (of which $120.6 million was transferred into our rental fleet for replenishment purposes), and a $42.7 million decrease in accounts receivable. Cash flows from operating activities were favorably impacted by $126.1 million due to proceeds from the sale of rent-to-sell equipment, and a $4.7 million net change in prepaid expenses and other assets and leases, deferred revenue, and other liabilities and unfavorably impacted by a $26.9 million decrease in accounts payable, accrued expenses, customer deposits, and other current liabilities and $7.8 million in net outflows related to manufacturer floor plans.
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 year ended December 31, 2025, operating activities resulted in net cash provided by operations of $33.0 million. Our reported net loss of $80.3 million, when adjusted for non-cash income and expense items, primarily depreciation and amortization, the gain on sale of property and rental equipment, inventory and bad debt reserves, gain on divestitures, deferred income taxes, and stock-based compensation, provided net cash inflows of $57.3 million. Changes in working capital included $48.9 million of inventory purchased ($100.0 million of inventory was transferred into our rental fleet for replenishment purposes), and an $11.2 million decrease in accounts receivable. Cash flows from operating activities were favorably impacted by $98.2 million due to proceeds from the sale of rent-to-sell equipment and unfavorably impacted by $55.4 million in net outflows related to manufacturer floor plans, a $18.4 million decrease in accounts payable, accrued expenses, leases, and other operating liabilities, and an $11.0 million net change in prepaid expenses and other assets.
Previous wording
For the year ended December 31, 2023, operating activities resulted in net cash provided by operations of $58.4 million. Our reported net income of $8.9 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 $111.8 million. Changes in working capital included $286.3 million of inventory purchased (of which $180.2 million was transferred into our rental fleet for replenishment and growth purposes), and a $16.6 million increase in accounts receivable. Cash flows from operating activities were favorably impacted by $123.5 million due to proceeds from the sale of rent-to-sell equipment, $122.5 million in net inflows related to manufacturer floor plans and by a $7.3 million increase in accounts payable, accrued expenses, customer deposits, and other current liabilities partially offset by a $3.8 million net change in prepaid expenses and other assets and leases, deferred revenue, and other liabilities.
Current wording
For the year ended December 31, 2024, operating activities resulted in net cash provided by operations of $57.0 million. Our reported net loss of $62.1 million, when adjusted for non-cash income and expense items, primarily depreciation and amortization, the gain on sale of property and rental equipment, inventory and bad debt reserves, loss on debt extinguishment, deferred income taxes, and stock-based compensation, provided net cash inflows of $63.5 million. Changes in working capital included $145.3 million of inventory purchased ($120.6 million was transferred into our rental fleet for replenishment purposes), and a $42.7 million decrease in accounts receivable. Cash flows from operating activities were favorably impacted by $126.1 million due to proceeds from the sale of rent-to-sell equipment and a $4.3 million net change in prepaid expenses and other assets and unfavorably impacted by a $26.5 million decrease in accounts payable, accrued expenses, leases, and other operating liabilities, and $7.8 million in net outflows related to manufacturer floor plans.
Previous wording
For the year ended December 31, 2023, our cash used in investing activities was $117.4 million. This was mainly due to $123.3 million purchases of rent-to-rent equipment, non-rental property and equipment, Burris and Ault acquisition activity, and other investing activities partially offset by $5.4 million proceeds from the sale of rent-to-rent equipment and $0.5 million proceeds from the sale of non-rental property and equipment.
Current wording
Cash Flow from Investing Activities. For the year ended December 31, 2025, our cash used in investing activities was $22.7 million. This was mainly due to $55.0 million purchases of rental equipment and non-rental property and equipment and intangibles, the acquisition of CEQ as discussed in Note 15, Business Combinations and Divestitures, and other investing activities partially offset by $20.9 million proceeds from the two divestitures discussed in Note 15, and $11.4 million proceeds from the sale of rent-to-rent equipment and non-rental property and equipment.
Previous wording
Cash Flow from Investing Activities. For the year ended December 31, 2024, our cash used in investing activities was $56.2 million. This was mainly due to $73.4 million purchases of rent-to-rent equipment, non-rental property and equipment, and other investing activities partially offset by $17.2 million proceeds from the sale of rent-to-rent equipment and non-rental property and equipment.
Current wording
For the year ended December 31, 2024, our cash used in investing activities was $56.2 million. This was mainly due to $73.4 million purchases of rent-to-rent equipment, non-rental property and equipment, and other investing activities partially offset by $17.2 million proceeds from the sale of rent-to-rent equipment and non-rental property and equipment.
Previous wording
For the year ended December 31, 2023, cash provided by financing activities was $87.3 million. This cash inflow was mainly due to $91.3 million of net borrowings under our line of credit, which funded the Burris and Ault acquisitions, and the increase in net working capital and rental fleet as previously noted. Additionally, there were net borrowings of $8.7 million related to non-manufacturer floor plans for the year. These cash inflows were partially offset by payments of $10.6 million for preferred and common stock dividends and $2.1 million related to other financing activities.
Current wording
Cash Flow from Financing Activities. For the year ended December 31, 2025, cash used in financing activities was $5.3 million. This cash outflow was due to payments of $6.9 million for preferred and common stock dividends, net payments of $7.0 million related to non-manufacturer floor plans, $7.5 million for common stock repurchases, and $2.9 million related to other financing activities partially offset by $19.0 million of net proceeds from our line of credit, long-term borrowings, and finance lease obligations.
Previous wording
Cash Flow from Financing Activities. For the year ended December 31, 2024, cash used in financing activities was $17.9 million. This cash outflow was mainly due to the extinguishment of the Senior Secured Second Lien Notes due 2026 of $319.4 million combined with principal payments on long-term debt and finance lease obligations of $639.9 million and net payments related to non-manufacturer floor plans for the year of $12.8 million more than offsetting the $974.2 million of proceeds from long-term borrowings including the new $500.0 million Senior Secured Second Lien Notes due 2029. Additionally, there were cash outflows of $10.8 million for preferred and common stock dividends, $5.8 million for repurchases of common stock, and $1.5 million related to other financing activities.
Current wording
For the year ended December 31, 2024, cash used in financing activities was $17.9 million. This cash outflow was mainly due to the extinguishment of the Senior Secured Second Lien Notes due 2026 of $319.4 million combined with principal payments on long-term debt and finance lease obligations of $639.9 million and net payments related to non-manufacturer floor plans for the year of $12.8 million more than offsetting the $974.2 million of proceeds from long-term borrowings including the new $500.0 million Senior Secured Second Lien Notes due 2029. Additionally, there were cash outflows of $10.8 million for preferred and common stock dividends, $5.8 million for repurchases of common stock, and $1.5 million related to other financing activities.
Previous wording
Our principal sources of liquidity have been from cash provided by our service, parts and rental 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 reported $13.4 million in cash as of December 31, 2024. 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 $18.6 million in cash as of December 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.
Previous wording
Our principal uses of cash have been to fund operating activities and working capital (including new and used equipment inventories), purchases of rental fleet equipment and property and equipment, fund payments due under line of credit and floor plans payable, fund acquisitions, meet debt service requirements, stock repurchases, and fund the preferred stock and common stock dividends. In the future, we may pursue additional strategic acquisitions and seek to open new start-up locations. We anticipate that the uses described above encompass the principal demands on our cash and availability under our line of credit and floor plans in the future.
Current wording
Our principal uses of cash have been to fund operating activities and working capital, including but not limited to new and used equipment inventories, purchases of rental fleet equipment and personal property, payments due under line of credit and floor plans, acquisitions, debt service requirements, stock repurchases, and preferred stock and common stock dividends. In the future, we may pursue additional strategic acquisitions and seek to open new start-up locations. We anticipate that the uses described above encompass the principal demands on our cash and availability under our line of credit and floor plans in the future.
Previous wording
The amount of our future capital expenditures will depend on a number of factors including general economic conditions, the state of our industry and the markets we serve and our growth prospects. Our gross rental fleet capital expenditures for the period ended December 31, 2024 were approximately $175.7 million, including $120.6 million of transfers from new and used inventory to rent-to-sell rental fleet. This gross rental fleet capital expenditure was offset by sales proceeds of rental equipment of approximately $138.0 million for the period ended December 31, 2024, of which $126.1 million came from rent-to-sell equipment categories, 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, the state of our industry and the markets we serve, and our growth prospects. Our gross rental fleet capital expenditures for the period ended December 31, 2025 were approximately $141.8 million, including $100.0 million of transfers from new and used inventory to rent-to-sell rental fleet. This gross rental fleet capital expenditure was offset by sales proceeds of rental equipment of approximately $109.1 million for the period ended December 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.
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 December 31, 2024, we had $441.0 million of available borrowings under the revolving line of credit and floor plans.
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 liquidity needs for the foreseeable future. As of December 31, 2025, we had $424.4 million of available borrowings under the revolving line of credit and floor plans.
Previous wording
Useful Lives of Property and Equipment
Current wording
Useful Lives of Property and Equipment and Rental Fleet
Previous wording
We depreciate rental equipment and property and equipment over their estimated useful lives. The useful life of rental equipment is determined based on our estimate of the period the asset will generate revenues. The principal methods of depreciation used are straight-line basis over the estimated useful lives or percentage of rental revenues based on the unit of activity method. We periodically review the assumptions used in calculating rates of depreciation. We may be required to change these estimates based on changes in our industry or changes in other circumstances. If these estimates change in the future, we may be required to recognize increased or decreased depreciation expense for these assets. The amount of depreciation expense we record is highly dependent upon the estimated useful lives assigned to each category of equipment and the utilization of equipment where the unit of activity method is applied.
Current wording
We depreciate rental equipment and property and equipment over their estimated useful lives. The useful life of property and equipment is determined based on the classification grouping of the asset. The useful life of rental equipment is determined based on our estimate of the period the asset will generate revenues. The principal methods of depreciation used are straight-line basis over the estimated useful lives or percentage of rental revenues based on the unit of activity method. We periodically review the assumptions used in calculating rates of depreciation. We may be required to change these estimates based on changes in our industry or changes in other circumstances. If these estimates change in the future, we may be required to recognize increased or decreased depreciation expense for these assets. The amount of depreciation expense we record is highly dependent upon the estimated useful lives assigned to each category of equipment and the utilization of equipment where the unit of activity method is applied.