Alta Equipment Group’s Third Quarter Revenues Drop 3.7 Percent; Rentals Increase for First Nine Months of 2024
Distributor Alta Equipment Group posted $448.8 million in third quarter 2024 total revenues, compared to $466.2 million in the third quarter of 2023, a 3.7-percent decline. Rental revenues for the third quarter were flat, coming in at $53.7 million compared to $54.0 million in the third quarter of 2023. New and used equipment sales dropped from $253.6 million in last year’s third quarter to $219.8 million this year, a 13.3 percent crash. Parts sales jumped 8.8 percent, from $69.5 million to $75.6 million, while service revenues increased 6.6 percent from $60.6 million a year ago to $64.6 million in the just-concluded quarter.
For the first nine months of 2024, total revenue was $1,378.5 million compared to $1,355.3 million in the same period of 2023, a 1.7-percent gain. Rental revenues increased 6 percent, from $147.1 million in the first nine months of 2023 to $155.9 million in the first nine months of 2024. New and used equipment sales went from $727.8 million to $699.9 million this year, a 3.8-percent drop. Parts sales jumped from $209.2 million in the first nine months of 2023 to $226.5 million so far this year, an 8.3-percent rise. Service revenues increased from $180.5 million last year to $194.8 million in the first nine months of 2024, a 7.9-percent incline.
“Our third quarter results continued to be impacted by the ongoing uncertainty in our end-user markets as it relates to customers committing to capital investment and purchasing new equipment,” said Alta CEO Ryan Greenawalt. “This dynamic has been most impactful in our Construction Equipment segment, where new and used equipment revenues decreased by $44.5 million, or 29.5 percent from a year ago on an organic basis. Some customers put capital investments on hold in the third quarter while they waited for the election outcome and more clarity on interest rates. In the immediate aftermath post-election, it appears that sentiment has already improved, and we believe our customers will deploy capital more broadly in 2025.
“While the equipment sales market has been disappointing in 2024, our dealership model with diverse revenue streams has protected our overall business from equipment market cyclicality. As evidence, our steady and high-margin product support business continues to perform well with revenues increasing 7.8 percent to $140.2 million versus a year ago. Additionally, given our rent-to-sell approach to the equipment rental market we are able to react quickly to perceived softness by selling off lightly used fleet and right-sizing our balance sheet in an efficient manner, and we are proud of the progress we made with the balance sheet as reductions in rental fleet and working capital allowed us to reduce net debt by $38.7 million in the quarter. Additionally, demand in our Material Handling segment remained steady, with revenues increasing slightly to $168.9 million as we continue to work through a sizeable backlog. During the third quarter, we also began to see positive impacts from our business optimization initiatives, as we were able to reduce general and administrative expenses when compared to the first two quarters of the year.”
Positive expectations for 2025
Greenawalt added that although overall, equipment markets have underperformed initial projections for 2024, Alta’s expectations for 2025 are positive.
“In terms of our Construction Equipment segment, we expect the oversupply of new equipment to normalize in the first half of 2025 and construction equipment spending to be positively impacted by easing interest rates and more favorable lending conditions,” he said. “Infrastructure-related project pipelines continue to be significant and still in the early stages and state DOT budgets are forecast to remain elevated in 2025. The opportunities in our Material Handling business remain favorable as we believe our strong relationship with Hyster-Yale, unmatched product support capabilities and resilient and diversified end markets will result in continued gains in market share in 2025.
“Lastly, we expect our electric vehicles business to gain further traction in 2025 as customers begin the transformational shift to electrify commercial vehicle fleets. Given this perspective on our future prospects, our board of directors has expanded our share buyback program to $20 million which we will deploy to support shareholders should opportunistic dislocations between the Company’s long-term intrinsic value and our share price present themselves.”
In conclusion, Greenawalt said, “Despite a challenging market in 2024, our 3,000 employees have demonstrated unprecedented dedication to our business and our customers. I am extremely proud of their commitment to our guiding principles which are predicated on teamwork and fostering customers for life.”
Headquartered in Livonia, Mich., Alta Equipment Group is No. 22 on the RER 100.
