ALTA EQUIPMENT GROUP INC.

Previous wording

We own and operate one of the largest integrated equipment dealership platforms in North America. Through our branch network, we sell, rent, and provide parts and service support for several categories of specialized equipment, including lift trucks and other material handling equipment, heavy and compact earthmoving equipment, crushing and screening equipment, environmental processing equipment, cranes and aerial work platforms, paving and asphalt equipment, other construction equipment, and allied products. We engage in five principal business activities in these equipment categories:

Current wording

We own and operate one of the largest integrated equipment dealership platforms in North America. Through our branch network, we sell, rent, and provide parts and service support for several categories of specialized equipment, including lift trucks and other material handling equipment, heavy and compact earthmoving equipment, crushing and screening equipment, environmental processing equipment, cranes and aerial work platforms, concrete and asphalt paving equipment, other construction equipment, and allied products. We engage in five principal business activities in these equipment categories:

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 $522.1 million as of March 31, 2026. The original acquisition cost of our rental fleet excludes $2.5 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 $517.1 million as of June 30, 2026. The original acquisition cost of our rental fleet excludes $2.1 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 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.

Current wording

New equipment sales. Cost of new equipment sold primarily consists of the total acquisition costs of the new equipment we purchase from OEMs and costs to inspect, prepare, and deliver to the customer.

Previous 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.

Current wording

Used equipment sales. Cost of used equipment sold primarily consists of the net book value, or cost, of used equipment we purchase 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 the type and usage of equipment. See Note 2, Summary of Significant Accounting Policies, of the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025 for information on our rental equipment depreciation methods.

Current wording

Rental depreciation. Depreciation of rental equipment represents the depreciation costs attributable to rental equipment. Estimated useful lives vary based upon the type and usage of equipment. See Note 2, Summary of Significant Accounting Policies, of the consolidated financial statements in our Annual Report on Form 10-K for information on our rental equipment depreciation methods.

Previous wording

The three months ended March 31, 2026 and 2025

Current wording

Revenues: In the three months ended June 30, 2026, consolidated total revenues decreased 1.2% against the three months ended June 30, 2025, while total organic revenues decreased 0.2%. Organic new and used equipment revenues increased 0.1% against the three months ended June 30, 2025. New and used equipment sales increased in the Construction Equipment and Master Distribution segments, supported by improving market conditions and the completion of seasonally delayed equipment deliveries. The increase in new and used equipment sales in these segments was offset by lower sales in the Material Handling segment due to reduced new equipment delivery volumes. Product support department (parts and service) revenues declined modestly, 0.6% organically, for the three months ended June 30, 2026, when compared to the prior year period. Product support performance varied across the Company's operating segments. Gains in the Material Handling segment were more than offset by lower product support revenues in the Construction Equipment segment, where service activity was primarily impacted by tactically-driven lower technician staffing levels and a greater proportion of non-billable labor hours associated with training and new equipment preparation activities. Product support revenues remained relatively stable and continued to provide a recurring source of revenues and gross profit amid softer equipment demand trends. Rental revenues decreased 1.8% on an organic basis for the three months ended June 30, 2026 primarily reflecting a smaller average rental fleet resulting from the Company's ongoing fleet optimization initiatives. Rental equipment sales remained relatively consistent with the prior year at $29.1 million as increased disposal activity within the Material Handling segment offset lower rental equipment sales volumes in Construction Equipment. Across both segments, management continued to actively optimize fleet composition and size, strategically balancing equipment dispositions, rental demand, utilization levels, and rental rates to maximize returns on invested capital while maintaining a more productive and efficient rental fleet.

Previous wording

The consolidated gross profit margin for the three months ended March 31, 2026 was 26.6%, a 60 basis point decrease from 27.2% for the same period in 2025, reflecting margin pressures across several revenue streams that offset stable service margin performance. Gross profit margins on new and used equipment sales were largely stable year over year, decreasing 10 basis points to 15.1%, as margin stability in the Material Handling and Construction Equipment segments was offset by tariff-related cost pressures in the Master Distribution segment. Notably, new and used equipment gross margins increased by 240 basis points on a sequential basis when compared to the fourth quarter of 2025. Rental equipment sales margins declined 650 basis points year over year reflecting a higher mix of lower-margin asset dispositions as the Company continued to optimize fleet levels and exit underperforming rental product categories. Parts gross margins declined modestly by 80 basis points but remained within expectations while service gross margins increased 10 basis points as higher effective labor rates and operational initiatives helped to offset weather-related challenges on technician availability. Rental revenue gross margins decreased 50 basis points, primarily due to fixed depreciation expense comprising a higher proportion of rental cost of sales on a lower revenue base, particularly within the Material Handling segment.

Current wording

The consolidated gross profit margin for the six months ended June 30, 2026 was 26.4%, an increase of 20 basis points from 26.2% in the same period of 2025. The improvement was primarily driven by stronger margins within new and used equipment sales and service operations. New and used equipment sales gross margins increased 70 basis points to 15.2%, reflecting the benefits of an improved sales mix, easing tariff-related pressures, and a more favorable pricing environment compared to the prior year. Service revenues gross margins increased 90 basis points to 60.8%, as higher effective labor rates and operational initiatives helped to offset weather-related challenges existing earlier in the year. Parts gross margins declined modestly by 30 basis points but remained within expected ranges. Rental equipment sales margins declined 580 basis points year over year reflecting a higher mix of lower-margin asset dispositions as the Company continued to optimize fleet levels and exit underperforming rental product categories. Rental revenues gross margins decreased 20 basis points, remaining consistent with the prior year and generally aligned to expectations.

Previous wording

Operating expenses: Consolidated operating expenses increased by $0.8 million to $115.0 million for the three months ended March 31, 2026, compared to the same period last year, driven primarily by inflationary cost pressures and higher health benefit costs associated with unfavorable claims experience. These increases were partially offset by lower operating expenses in the Construction Equipment segment resulting from workforce and expense management initiatives.

Current wording

Operating expenses: Consolidated operating expenses increased by $2.3 million to $112.2 million for the three months ended June 30, 2026 and increased by $3.1 million to $227.2 million for the six months ended June 30, 2026, compared to the same periods in 2025. The increases were primarily attributable to higher healthcare costs resulting from unfavorable claims experience and the impact of inflationary cost pressures. These increases were partially offset by the benefits of workforce optimization initiatives, disciplined expense management, and other cost-saving actions implemented across the Company's operating segments.

Previous wording

Other expense, net: Consolidated other expense, net for the three months ended March 31, 2026 reduced by $3.4 million to $17.6 million compared to $21.0 million for the same period in 2025. The variance was primarily attributable to lower interest expense resulting from lower borrowing rates and inventory optimization initiatives as well as a gain on divestiture in our Material Handling segment.

Current wording

Other expense, net: Consolidated other expense, net for the three months ended June 30, 2026 was $19.9 million compared to $17.2 million for the same period in 2025. The increase was primarily attributed to a loss on divestiture recognized during the current year compared to a gain on divestiture recognized in the prior year. These unfavorable variances were partially offset by lower floor plan and other interest expense resulting from reduced inventory and rental fleet levels and lower benchmark interest rates.

Previous wording

Income tax (benefit) expense: The Company recorded an income tax benefit of $3.8 million and expense of $0.7 million for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026, the income tax benefit was primarily attributable to the net loss for the period. The income tax expense in 2025 was primarily a result of adjustments of the Company's valuation allowance against a portion of the deferred tax asset relating to U.S. disallowed interest expense carryforwards partially offset by the benefit attributable to the net loss for the period.

Current wording

Income tax (benefit) expense: The Company recorded an income tax benefit of $0.4 million and expense of $1.3 million for the three months ended June 30, 2026 and 2025, respectively, and an income tax benefit of $4.2 million and expense of $2.0 million for the six months ended June 30, 2026 and 2025, respectively. During the three and six months ended June 30, 2026, the income tax benefit was primarily attributable to the net loss for the period and provision to return reconciliation in the second quarter of 2026. The income tax expense in 2025 was primarily a result of adjustments of the Company's valuation allowance against a portion of the deferred tax asset relating to U.S. disallowed interest expense carryforwards partially offset by the benefit attributable to the net loss for the period.

Previous wording

Revenues: For the three months ended March 31, 2026, Material Handling segment revenues decreased by $7.4 million, or 4.7%, to $150.5 million as compared to the same period last year. The decline in revenues reflects continued softness in new equipment deliveries partially offset by stable service revenues and higher rental equipment sales. Organic sales of new and used equipment decreased $2.6 million, or 3.5%, reflective of slow January activities. While bookings momentum developed later in the quarter in certain markets, improvements were not able to offset early quarter softness. Product support revenues declined modestly on an organic basis, with parts sales down $1.1 million and service revenues down $0.2 million compared to the prior year. Product support performance remained stable despite challenging weather conditions and technician availability constraints, supported by improved effective labor rates and continued pricing discipline. Rental revenues decreased $1.2 million, or 6.9%, on an organic basis, reflecting a lower average volume of fleet on rent. In contrast, rental equipment sales increased $0.4 million, or 11.4%, primarily due to the targeted disposal of underutilized assets and increased customer demand for cost effective used equipment alternatives. These actions were consistent with intentional enterprise-wide fleet optimization efforts.

Current wording

For the six months ended June 30, 2026, Material Handling segment revenues decreased by $12.6 million, or 4.0%, to $306.0 million as compared to the same period last year. The decline in revenues reflects continued softness in new equipment deliveries, partially offset by stable product support revenues and higher rental equipment sales. Organic sales of new and used equipment decreased $6.5 million, or 4.2%, primarily due to lower new equipment deliveries related to lower customer booking activity observed in the second half of 2025. Despite the decline in equipment sales, backlog levels remained healthy and bookings momentum improved as the period progressed, supporting expectations for stronger invoicing activity in the second half of 2026. Organic product support performance remained stable, with parts sales down $0.7 million and service revenues up $1.7 million compared to the prior year. Despite challenging weather conditions and technician availability constraints in the first quarter, service revenues were buoyed by improved pricing discipline and strong operational execution in several regions. Rental revenues decreased $2.0 million, or 5.7%, on an organic basis, reflecting a lower average fleet-on-rent and ongoing fleet optimization initiatives. In contrast, rental equipment sales increased $1.6 million, or 20.5%, primarily due to higher disposal activity associated with the targeted reduction of underutilized fleet assets. These actions were consistent with the Company's strategic fleet optimization efforts to develop a more productive and better-utilized rental fleet.

Previous wording

Material Handling gross profit for the three months ended March 31, 2026 increased 50 basis points to 35.1% compared to 34.6% in the same period in 2025. The improvement in gross margin reflects favorable mix and margin performance in service and equipment sales, partially offset by lower parts and rental revenue margins. Gross margins on new and used equipment sales increased 10 basis points, remaining largely consistent year over year. Parts gross margins decreased 10 basis points, generally consistent with expectations. Service margins increased 50 basis points, driven by higher effective labor rates and improved technician efficiency. Rental revenues gross margins have decreased 280 basis points primarily due to the influence of fixed depreciation costs on a lower revenue base. Rental equipment sales margins increased 990 basis points, reflecting favorable timing and mix of asset dispositions; however, margins on rent-to-rent equipment sales can vary meaningfully depending on the age and composition of assets sold, as many of these assets are disposed of after being fully depreciated.

Current wording

Material Handling gross profit for the six months ended June 30, 2026 increased 120 basis points to 34.8% compared to 33.6% in the same period in 2025. The improvement in gross margin reflects favorable mix and margin performance in service and equipment sales, partially offset by lower parts sales and rental revenues gross margins. Gross margins on new and used equipment sales increased 20 basis points, remaining largely consistent year over year. Parts gross margins decreased 40 basis points, though generally consistent with expectations. Service margins increased 240 basis points, driven by higher effective labor rates and improved technician efficiency. Rental revenues gross margins have decreased 150 basis points primarily due to the influence of fixed depreciation costs on a lower revenue base. Rental equipment sales margins increased 30 basis points, reflecting favorable timing and mix of asset dispositions; however, margins on rent-to-rent equipment sales can vary meaningfully depending on the age and composition of assets sold, as many of these assets are disposed of after being fully depreciated.

Previous wording

Revenues: Construction Equipment segment revenues decreased by $1.5 million, or 0.6%, to $244.3 million for the three months ended March 31, 2026 as compared to the same period last year. The overall decline in revenues reflects a combination of seasonality and winter weather disruption early in the quarter, partially offset by strategic inventory actions resulting in higher rental equipment sales volumes. New and used equipment sales decreased $5.5 million from the prior year driven by moderately softer new equipment demand across all regions and typical seasonal softness following a record sales quarter in the fourth quarter of 2025. Rental equipment sales increased for the three months ended March 31, 2026 by $8.9 million primarily due to the targeted disposals and portfolio optimization efforts to address underutilized assets and align the rent-to-sell fleet with sustainable customer demand. Product support revenues were modestly lower overall with parts sales essentially flat year over year and service revenues down versus the prior year. The overall decrease in product support of 3.0% was primarily the result of constrained billable capacity due to weather-impacted seasonal factors. Rental revenues decreased $1.4 million organically for the three months ended March 31, 2026 reflecting a smaller average rental fleet and lower utilization in select markets compared to the prior year. The year-over-year decline in rental revenues is consistent 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 $4.2 million, or 0.8%, to $542.3 million for the six months ended June 30, 2026 as compared to the same period last year. The overall decline in revenues reflects harsh winter weather conditions experienced during the first quarter of 2026 when compared to the same period in 2025, which reduced service productivity and delayed customer equipment deliveries in certain markets, partially offset by strategic inventory and fleet optimization initiatives that resulted in higher rental equipment sales volumes. New and used equipment sales decreased $3.9 million from the prior year, driven primarily by lower new equipment sales volumes in the first quarter, partially offset by improved market conditions and customer deliveries in certain regions in the second quarter. Rental equipment sales increased for the six months ended June 30, 2026 by $8.0 million primarily due to the targeted disposals and fleet optimization efforts to address underutilized assets and align the rent-to-sell fleet with sustainable customer demand. Product support revenues were lower overall, with parts sales essentially flat year over year and service revenues down versus the prior year. The overall decrease in product support of 3.2% was primarily attributable to weather-related impacts experienced during the first quarter as well as tactically-driven lower technician headcount (in an effort to drive overall technician productivity and profitability) and reduced service throughput in certain regions. Rental revenues decreased $1.5 million organically for the six months ended June 30, 2026 reflecting a smaller average rental fleet as the Company continues to optimize fleet size, improve asset utilization, and enhance returns on invested capital.

Previous wording

Construction Equipment gross profit decreased by 110 basis points to 21.6% in the three months ended March 31, 2026 compared to 22.7% in the same period of 2025. New and used equipment sales margins increased to 11.7%, up 30 basis points year over year and 150 basis points compared to the fourth quarter of 2025, reflecting favorable product mix and signaling an improving margin environment. Parts sales margins were reduced for the three months ended March 31, 2026, decreasing 140 basis points when compared to the same time last year but remain within expected ranges. Service gross margins decreased by 120 basis points year over year primarily reflecting increased non-billable activity and throughput disruption associated with winter operating conditions. Rental revenues gross margin for the three months ended March 31, 2026 increased 100 basis points compared to the prior year primarily reflecting lower sublet costs, freight, and repair and maintenance expenses as a percentage of rental revenues. Conversely, gross margins on rental equipment sales decreased 870 basis points from the prior year, reflecting a higher mix of lower-margin asset dispositions consistent with the Company’s targeted efforts to optimize rent-to-sell fleet levels and dispose of underutilized equipment.

Current wording

Construction Equipment gross profit decreased by 60 basis points to 21.7% in the six months ended June 30, 2026 compared to 22.3% in the same period of 2025. New and used equipment sales margins increased to 12.3%, up 70 basis points year over year. The improvement primarily reflects a more favorable sales mix as well as a more favorable pricing environment compared to prior year when elevated industry inventory levels and competitive discounting pressures negatively impacted margins. Parts sales margins decreased 30 basis points for the six months ended June 30, 2026, but remain within expected ranges. Service gross margins decreased by 120 basis points year over year, primarily reflecting an unfavorable labor mix as a greater proportion of technician hours were absorbed by non-billable internal and expense work, together with throughput disruptions associated with winter operating conditions during the first quarter. Rental revenues gross margin for the six months ended June 30, 2026 increased 70 basis points compared to the prior year, primarily reflecting lower sublet costs, freight, and repair and maintenance expenses as a percentage of rental revenues. Conversely, gross margins on rental equipment sales decreased 710 basis points from the prior year, largely reflecting the impact of fleet optimization efforts and the resulting mix of assets sold, as the Company continued to dispose of underutilized rental equipment and align fleet size with demand and utilization objectives.

Previous wording

For the three months ended March 31, 2026, gross profit was $3.9 million, a decrease of $0.6 million compared to the prior year. Gross profit margin decreased 310 basis points to 22.8%, primarily reflecting margin compression in new and used equipment sales. Gross profit margins on new and used equipment sales were 19.1%, down from the prior year reflecting higher relative product costs driven by the impact of tariff costs embedded in inventory sold during the quarter. Parts gross profit margin was 44.4% for the three months ended March 31, 2026, up 270 basis points compared to the same period last year but consistent with expectations and historical averages overall. Easing tariff regulations and renegotiated pricing with OEMs are expected to provide further support of the segment's gross margins in future periods.

Current wording

For the six months ended June 30, 2026, gross profit was $9.8 million, an increase of $1.1 million compared to the prior year. Gross profit margin increased 190 basis points to 24.6%, primarily reflecting improved margins in new and used equipment sales. The improvement reflects the benefit of reduced tariff-related pressures during the second quarter, improved OEM pricing dynamics, a more favorable foreign exchange environment, and the benefit of the initial tranche of tariff refund payments, resulting in gross profit margins on new and used equipment sales increasing to 23.7%, up 150 basis points from the prior year. Parts gross profit margin was 33.9% for the six months ended June 30, 2026, up 60 basis points compared to the same period last year and in line with expectations. A more stable tariff environment and renegotiated pricing with OEMs are expected to provide additional support for gross margins in future periods.

Previous wording

Other expense, net: Master Distribution other expense, net was $1.8 million for the three months ended March 31, 2026, an increase of $0.2 million compared to the prior year. The increase was primarily attributable to higher interest expense driven by higher average inventory balances partially offset by lower benchmark interest rates.

Current wording

Other expense, net: Master Distribution other expense, net was $1.9 million for the three months ended June 30, 2026, a $0.2 million increase compared to the same period last year. Other expense, net was $3.7 million for the six months ended June 30, 2026, an increase of $0.4 million compared to the same period last year. The year-to-date increase was primarily attributable to higher interest expense driven by higher relative average inventory balances partially offset by lower benchmark interest rates.

Previous wording

The three months ended March 31, 2026 and 2025 Cash Flows

Current wording

The six months ended June 30, 2026 and 2025 Cash Flows

Previous wording

Cash Flow from Operating Activities. Cash flows provided by operating activities include net loss adjusted for non-cash items and the effects of changes in working capital. For the three months ended March 31, 2026, operating activities resulted in net cash provided by operations of $20.8 million. Our reported net loss of $19.5 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 divestiture, deferred income taxes, and stock-based compensation, provided net cash inflows of $4.3 million. Cash flow changes from working capital included $38.8 million of inventory purchased ($30.0 million of inventory was transferred into our rental fleet primarily for replenishment purposes) and a $6.5 million outflow from accounts receivable. Cash flows from operating activities were favorably impacted by $26.8 million due to proceeds from the sale of rent-to-sell equipment, $21.5 million in net inflows related to manufacturer floor plans and $13.7 million in net inflow from accounts payable, accrued expenses, leases, and other operating liabilities partially offset by a $0.2 million net outflow related to prepaid expenses and other assets.

Current wording

Cash Flow from Operating Activities. Cash flows provided by 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, 2026, operating activities resulted in net cash provided by operations of $26.1 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 property and rental equipment, inventory and bad debt reserves, loss on divestitures, deferred income taxes, and stock-based compensation, provided net cash inflows of $28.8 million. Cash flow changes from working capital included $61.9 million of inventory purchased ($69.1 million of inventory was transferred into our rental fleet primarily for replenishment purposes), a $6.0 million in net inflow from accounts payable, accrued expenses, leases, and other operating liabilities offset by $29.6 million outflow from accounts receivable. Cash flows from operating activities were favorably impacted by $50.6 million due to proceeds from the sale of rent-to-sell equipment, $36.3 million in net inflows related to manufacturer floor plans partially offset by a $4.1 million net outflow related to prepaid expenses and other assets.

Previous wording

For the three months ended March 31, 2025, operating activities resulted in net cash used in operations of $17.5 million. Our reported net loss of $20.9 million, when adjusted for non-cash income and expense items, primarily depreciation and amortization, the gain on sale of property and rental equipment, inventory and bad debt reserves, deferred income taxes, and stock-based compensation, provided net cash inflows of $9.3 million. Cash flow changes from working capital included $41.6 million of inventory purchased ($28.4 million of inventory was transferred into our rental fleet primarily for replenishment purposes) and a $9.1 million outflow from accounts receivable. Cash flows from operating activities were favorably impacted by $18.6 million due to proceeds from the sale of rent-to-sell equipment and a $14.4 million inflow from accounts payable, accrued expenses, leases, and other operating liabilities, partially offset by $6.0 million in net outflows related to manufacturer floor plans, and by $3.1 million net outflows pertaining to prepaid expenses and other assets.

Current wording

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 property and rental equipment, inventory 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 accounts payable, accrued expenses, leases, and other operating liabilities.

Previous wording

Cash Flow from Investing Activities. For the three months ended March 31, 2026, our cash used in investing activities was $3.5 million. This was mainly due to $10.0 million in purchases of rental equipment and non-rental property and equipment and other investing activities partially offset by $1.5 million proceeds from the divestiture as discussed in Note 15, $3.4 million proceeds from the sale of rent-to-rent equipment, and $1.6 million proceeds from the sale of non-rental property and equipment.

Current wording

Cash Flow from Investing Activities. For the six months ended June 30, 2026, our cash used in investing activities was $4.0 million. This was mainly due to $16.0 million in purchases of rental equipment and non-rental property and equipment and other investing activities partially offset by $8.7 million proceeds from the sale of rent-to-rent equipment, $1.8 million proceeds from the sale of non-rental property and equipment, and $1.5 million proceeds from the divestiture as discussed in Note 15.

Previous wording

For the three months ended March 31, 2025, our cash used in investing activities was $14.3 million. This was mainly due to $16.8 million purchases of rental equipment and non-rental property and equipment, the acquisition of Les Chariots Elevateurs Du Quebec Inc., and other investing activities, partially offset by $2.3 million proceeds from the sale of rent-to-rent equipment and $0.2 million proceeds from the sale of non-rental property and equipment.

Current wording

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 Les Chariots Elevateurs Du Quebec Inc., and other investing activities partially offset by $18.0 million proceeds from the divestiture of our aerial fleet rental business in Illinois, $4.9 million proceeds from the sale of rent-to-rent equipment, and $0.3 million proceeds from the sale of non-rental property and equipment.

Previous wording

Cash Flow from Financing Activities. For the three months ended March 31, 2026, cash used in financing activities was $11.9 million. This cash outflow was due to the $9.1 million of net payments on our line of credit, long-term borrowings, and finance lease obligations, net payments of $1.1 million related to non-manufacturer floor plans, payments of $0.8 million for preferred stock dividends, and $0.9 million related to other financing activities.

Current wording

Cash Flow from Financing Activities. For the six months ended June 30, 2026, cash used in financing activities was $19.6 million. This cash outflow was due to the $6.8 million of net payments on our line of credit, long-term borrowings, and finance lease obligations, net payments of $9.6 million related to non-manufacturer floor plans, payments of $1.5 million for preferred stock dividends, and $1.7 million related to other financing activities.

Previous wording

For the three months ended March 31, 2025, cash provided by financing activities was $29.5 million. This cash inflow was mainly due to the $34.5 million of net proceeds from our line of credit, long-term borrowings, and finance lease obligations, which funded the increase in net working capital previously noted. These cash inflows were partially offset by payments of $2.7 million for preferred and common stock dividends, net payments of $1.5 million related to non-manufacturer floor plans, and $0.8 million related to other financing activities.

Current wording

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. These cash inflows were partially offset by payments of $5.4 million for preferred and common stock dividends, net payments of $5.9 million related to non-manufacturer floor plans, $6.5 million for common stock repurchases, and $0.4 million related to other financing activities.

Previous wording

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 $23.9 million in cash as of March 31, 2026. 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 $20.9 million in cash as of June 30, 2026. 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, the state of our industry and the markets we serve, and our growth prospects. Our gross rental fleet capital expenditures for the three months ended March 31, 2026 was $36.3 million, including $30.0 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 $30.2 million for the three months ended March 31, 2026 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 six months ended June 30, 2026 was $78.1 million, including $69.1 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 $59.3 million for the six months ended June 30, 2026 as our business model is to sell lightly used inventory to customers from our rental fleet to increase field population in our geographies. In response to changing economic conditions, we have the flexibility to modify our capital expenditures, especially as it relates to rental fleet.

Previous wording

To service our debt, we will require a significant amount of cash. Our ability to pay interest and principal on our indebtedness, will depend upon our future operating performance and the availability of borrowings under the line of credit and/or other debt and equity financing alternatives available to us, which will be affected by prevailing economic conditions and conditions in the global credit and capital markets, as well as financial, business, and other factors, some of which are beyond our control. Based on our current level of operations and given the current state of the capital markets, we believe our cash flows from operations, available cash, and available borrowings under the line of credit will be adequate to meet our future liquidity needs for the foreseeable future. As of March 31, 2026, we had $400.2 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 June 30, 2026, we had $373.8 million of available borrowings under the ABL Facility and Floor Plan Facilities.

Previous wording

In the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), we are required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures. Our management reviews these estimates and assumptions on an ongoing basis. While we believe the estimates and judgments we use in preparing our consolidated financial statements are reasonable and appropriate, they are subject to future events and uncertainties regarding their outcome; therefore, actual results may materially differ from these estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts first become known. See Note 2 to the consolidated financial statements contained in the Company’s 2025 Annual Report on Form 10-K for a summary of our significant accounting policies.

Current wording

In the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), we are required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures. Our management reviews these estimates and assumptions on an ongoing basis. While we believe the estimates and judgments we use in preparing our consolidated financial statements are reasonable and appropriate, they are subject to future events and uncertainties regarding their outcome; therefore, actual results may materially differ from these estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts first become known. See Note 2 to the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for a summary of our significant accounting policies.