Custom Truck One Source, Inc. (NYSE: CTOS), a leading provider of specialty equipment to the electric utility, telecom, rail and other infrastructure-related end markets, today reported financial results for its three and six months ended June 30, 2023.
CTOS Second-Quarter Highlights
- Total revenue of $456.8 million, an increase of $94.7 million or 26.2%, compared to the second quarter of 2022 as a result of continued strong demand across our end markets
- Gross profit of $110.6 million, an improvement of $27.8 million, or 33.7%, compared to $82.8 million for the second quarter of 2022
- Adjusted Gross Profit of $154.2 million, an increase of $28.2 million, or 22.3%, compared to $126.1 million for the second quarter of 2022
- Net income of $11.6 million, a decrease of $2.0 million or 14.8%, compared to net income of $13.6 million, in the second quarter of 2022
- Adjusted EBITDA of $103.2 million, an increase of $17.8 million, or 20.8% compared to $85.4 million in the second quarter of 2022
- Further reduction in Net Leverage Ratio from 3.4 at the end of the last quarter to 3.3 as of June 30, 2023
- Increasing Full Year 2023 Revenue and Adjusted EBITDA Guidance
“Our second quarter results reflect continued strong demand across our primary end markets. The tremendous efforts of our team allowed us to deliver the record levels of vehicle production required to both add to our fleet and meet the demand for new vehicle sales,” said Ryan McMonagle, Chief Executive Officer of CTOS. “All three of our business segments continued to experience strong year-over-year growth. The demand environment, the continued improvement in the supply chain and the performance of our team, together give us the confidence to improve our outlook for 2023. We continue to believe that our one-stop-shop business model and significant scale provide us with a competitive advantage that allows us to deliver unequaled service to our customers,” McMonagle added.
Summary Actual Financial Results
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended March 31, 2023 | |||||||||||||||||
(in $000s) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Rental revenue | $ | 122,169 | $ | 112,055 | $ | 240,457 | $ | 221,200 | $ | 118,288 | |||||||||
Equipment sales | 302,117 | 218,506 | 603,407 | 445,692 | 301,290 | ||||||||||||||
Parts sales and services | 32,544 | 31,545 | 65,129 | 61,690 | 32,585 | ||||||||||||||
Total revenue | 456,830 | 362,106 | 908,993 | 728,582 | 452,163 | ||||||||||||||
Gross Profit | $ | 110,619 | $ | 82,758 | $ | 220,994 | $ | 167,251 | $ | 109,661 | |||||||||
Adjusted Gross Profit1 | $ | 154,235 | $ | 126,082 | $ | 304,226 | $ | 255,539 | $ | 149,991 | |||||||||
Net Income | $ | 11,610 | $ | 13,623 | $ | 25,410 | $ | 10,350 | $ | 13,800 | |||||||||
Adjusted EBITDA1 | $ | 103,183 | $ | 85,383 | $ | 208,383 | $ | 176,860 | $ | 105,200 | |||||||||
1 | Each of Adjusted Gross Profit and Adjusted EBITDA is a non-GAAP financial measure. Further information and reconciliations for our non-GAAP measures to the most directly comparable financial measure under United States generally accepted accounting principles in the U.S. (“GAAP”) is included at the end of this press release. |
Summary Actual Financial Results by Segment
Our results are reported for our three segments: Equipment Rental Solutions (“ERS”), Truck and Equipment Sales (“TES”) and Aftermarket Parts and Services (“APS”). ERS encompasses our core rental business, inclusive of sales of used rental equipment to our customers. TES encompasses our specialized truck and equipment production and new equipment sales activities. APS encompasses sales and rentals of parts, tools and other supplies to our customers, as well as our aftermarket repair service operations. Segment performance is presented below for the three and six months ended June 30, 2023 and 2022 and three months ended March 31, 2023.
Equipment Rental Solutions
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended March 31, 2023 | |||||||||||||||||
(in $000s) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Rental revenue | $ | 117,832 | $ | 108,109 | $ | 231,616 | $ | 213,670 | $ | 113,784 | |||||||||
Equipment sales | 50,694 | 37,200 | 142,830 | 96,553 | 92,136 | ||||||||||||||
Total revenue | 168,526 | 145,309 | 374,446 | 310,223 | 205,920 | ||||||||||||||
Cost of rental revenue | 31,341 | 27,851 | 60,401 | 52,642 | 29,060 | ||||||||||||||
Cost of equipment sales | 39,802 | 30,418 | 110,883 | 73,648 | 71,081 | ||||||||||||||
Depreciation of rental equipment | 42,805 | 42,384 | 82,317 | 86,350 | 39,512 | ||||||||||||||
Total cost of revenue | 113,948 | 100,653 | 253,601 | 212,640 | 139,653 | ||||||||||||||
Gross profit | $ | 54,578 | $ | 44,656 | $ | 120,845 | $ | 97,583 | $ | 66,267 | |||||||||
Truck and Equipment Sales
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended March 31, 2023 | |||||||||||||||||
(in $000s) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Equipment sales | $ | 251,423 | $ | 181,306 | $ | 460,577 | $ | 349,139 | $ | 209,154 | |||||||||
Cost of equipment sales | 205,464 | 154,177 | 380,508 | 298,225 | 175,044 | ||||||||||||||
Gross profit | $ | 45,959 | $ | 27,129 | $ | 80,069 | $ | 50,914 | $ | 34,110 | |||||||||
Aftermarket Parts and Services
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended March 31, 2023 | |||||||||||||||||
(in $000s) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Rental revenue | $ | 4,337 | $ | 3,946 | $ | 8,841 | $ | 7,530 | $ | 4,504 | |||||||||
Parts and services revenue | 32,544 | 31,545 | 65,129 | 61,690 | 32,585 | ||||||||||||||
Total revenue | 36,881 | 35,491 | 73,970 | 69,220 | 37,089 | ||||||||||||||
Cost of revenue | 25,988 | 23,578 | 52,975 | 48,528 | 26,987 | ||||||||||||||
Depreciation of rental equipment | 811 | 940 | 1,629 | 1,938 | 818 | ||||||||||||||
Total cost of revenue | 26,799 | 24,518 | 54,604 | 50,466 | 27,805 | ||||||||||||||
Gross profit | $ | 10,082 | $ | 10,973 | $ | 19,366 | $ | 18,754 | $ | 9,284 | |||||||||
Summary Combined Operating Metrics
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended March 31, 2023 | |||||||||||||||||
(in $000s) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Ending OEC(a) (as of period end) | $ | 1,467,779 | $ | 1,399,500 | |||||||||||||||
