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Custom Truck One Source, Inc. Reports Strong Full-Year Pro Forma Combined Revenue, Adjusted EBITDA, and Gross Profit Growth for 2021

03/10/2022

KANSAS CITY, Mo., March 10, 2022 /PRNewswire/ -- Custom Truck One Source, Inc. (NYSE: CTOS, "CTOS," "we," "our," or the "Company"), a leading provider of specialty equipment to the electric utility, telecom, rail and other infrastructure-related end markets, today reported financial results for its fourth quarterly period ended December 31, 2021.

On April 1, 2021, the Company, formerly known as Nesco Holdings, Inc. ("Nesco Holdings"), through its subsidiary, closed on the acquisition (the "Acquisition") of Custom Truck One Source, L.P. ("Custom Truck LP"). The Acquisition creates a leading, one-stop shop for specialty equipment serving highly attractive and growing infrastructure end markets, including electric utility transmission and distribution ("T&D"), telecom, rail and other national infrastructure initiatives. Our reported results include Custom Truck LP only for the period subsequent to the Acquisition. We also provide key operational metrics on a combined basis and pro forma combined results of operations for the three and twelve-month periods ended December 31, 2021 and 2020, in accordance with Article 11 of Regulation S-X, assuming the Acquisition had occurred on January 1, 2020. We believe such combined information is useful to compare how the combined company has performed over time.

Following the Acquisition, we expanded our reporting segments from two segments to three segments. The Equipment Rental Solutions ("ERS") segment encompasses our core rental business, inclusive of sales of rental equipment to our customers. The Truck and Equipment Sales ("TES") segment encompasses our specialized truck and equipment production and sales activities. Finally, the Aftermarket Parts and Services ("APS") segment encompasses sales and rentals of parts, tools and other supplies to our customers, as well as our aftermarket repair service operations.

CTOS Fourth Quarter and Full-Year Highlights

  • Total quarterly revenue of $356.4 million and annual revenue of $1,167.2 million, driven primarily by continued strong demand from our end markets
  • Quarterly gross profit improvement of $12.6 million, or 19.3%, to $77.9 million compared to $65.3 million for third quarter 2021
  • Full-year gross profit of $210.0 million
  • Quarterly net loss of $3.7 million, including $9.1 million related to the Acquisition and integration related expenses and purchase accounting inventory mark-up amortization of $1.4 million, compared to a net loss of $20.5 million in third quarter 2021
  • Full-year net loss of $181.5 million, including $51.8 million related to the Acquisition and integration related expenses, $61.7 million loss on extinguishment of debt, and purchase accounting inventory mark-up amortization of $18.2 million
  • Quarterly Adjusted EBITDA of $95.6 million compared to $84.4 million in third quarter 2021 and year ended December 31, 2021, Adjusted EBITDA of $277.8 million compared to $118.6 million for the year ended December 31, 2020
  • Cash flow from operating activities of $138.9 million, or $90.2 million including net repayments on non-trade floorplan financing, for the twelve months ended December 31, 2021

CTOS Fourth Quarter and Full-Year Pro Forma Highlights
Pro forma fourth quarter and year-end highlights are presented for the three months ended December 31, 2021, compared to the three months ended December 31, 2020, and the year ended December 31, 2021, compared to the year ended December 31, 2020 in accordance with Article 11 of Regulation S-X, as if the Acquisition had been completed on January 1, 2020.

  • Total full-year pro forma revenue increased 9.4% to $1,483.6 million, driven primarily by a 14.7% increase in equipment sales revenue
  • Full-year pro forma gross profit increased 16.4% to $278.4 million
  • Full-year pro forma gross profit excluding rental equipment depreciation, increased 9.0% to $462.1 million
  • Full-year pro forma net loss of $90.5 million (quarterly net loss of $2.7 million), compared to full-year pro forma net loss of $96.4 million in 2020 (quarterly net income of $11.3 million)
  • Full-year pro forma Adjusted EBITDA increased 9.5% to $323.1 million, after expensing $9.8 million of charges taken during the second quarter primarily related to increased reserves of leasing receivables and inventories. Absent these expenses, pro forma Adjusted EBITDA for the year would have been $332.9 million
  • Quarterly pro forma Adjusted EBITDA increased 14.9% to $95.6 million
  • Increased OEC on rent by $48.4 million to $1,151.96 million compared to $1,103.56 million for third quarter 2021
  • Equipment sales order backlog grew 21.6% to $411.6 million compared to $338.5 million for third quarter 2021 and 169.2% compared to $152.9 million from the year ended December 31, 2020

"Our strong fourth quarter results capped off a year of significant achievement for the company, which, along with continued strong fundamentals in our end markets, provides a solid basis for our positive outlook for 2022," said Fred Ross, Chief Executive Officer of CTOS. "Our employees met the challenges presented by the integration, as well as issues outside of our control, such as supply chain constraints and inflationary pressures, to achieve these results. Customer demand across all three of our business segments remains very strong and we continue to see the benefits of our unique business model and our significant scale. As we head further into 2022, we look forward to continuing to deliver the unrivaled service that our customers have come to expect from us and driving significant value for our shareholders."

Summary Actual Financial Results


Three Months Ended December 31,


Twelve Months Ended December 31,


Three Months
Ended
September 30, 2021
Actual

(in $000s)

2021

Actual


2020

Actual


2021

Actual


2020

Actual


Rental revenue

$                114,131


$                  51,387


$                370,067


$                195,490


$                109,108

Equipment sales

212,509


18,004


695,334


56,632


217,163

Parts and services revenue

29,799


13,864


101,753


50,617


31,034

Total revenue

$                356,439


$                  83,255


$             1,167,154


$                302,739


$                357,305

Gross profit

$                  77,852


$                  23,067


$                210,013


$                  76,443


$                  65,252

Net income (loss)

$                  (3,713)


$                  (7,331)


$              (181,501)


$                (21,277)


$                (20,525)

Adjusted EBITDA1

$                  95,589


$                  32,319


$                277,784


$                118,568


$                  84,423


1 - 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 generally accepted accounting principles in the U.S. ("GAAP") is included at the end of this press release.

Summary Pro Forma Financial Results1
The summary combined financial data below is presented on a pro forma basis to give effect to the following as if they occurred on January 1, 2020: (i) the acquisition of Custom Truck LP and related impacts of purchase accounting, (ii) borrowings under the new debt structure and (iii) repayment of previously existing debt of Nesco Holdings and Custom Truck LP.


Three Months Ended December 31,


Twelve Months Ended December 31,

(in $000s)

2021

Pro Forma


2020

Pro Forma


2021

Pro Forma


2020

Pro Forma

Rental revenue

$                114,131


$                109,373


$                422,040


$                410,498

Equipment sales

212,509


265,949


941,289


820,934

Parts and services revenue

29,799


30,157


120,296


125,049

Total revenue

$                356,439


$                405,479


$             1,483,625


$             1,356,481

Gross profit

$                  79,236


$                  80,400


$                278,418


$                239,201

Net income (loss)

$                  (2,675)


$                  11,262


$                (90,521)


$                (96,415)

Adjusted EBITDA2

$                  95,589


$                  83,162


$                323,118


$                295,067


1 - The above pro forma information is presented for the three-month periods ended December 31, 2021 and 2020, and twelve-month periods ended December 31, 2021 and 2020, in accordance with Article 11 of Regulation S-X. The information presented gives effect to the following as if they occurred on January 1, 2020: (i) the Acquisition, (ii) borrowings under the senior secured notes and the asset-based credit facility used to repay certain debt in connection with the Acquisition, (iii) extinguishment of Custom Truck LP's prior credit facility and term loan borrowings assumed in the Acquisition and immediately repaid on April 1, 2021, and (iv) extinguishment of Nesco Holdings' prior credit facility and its senior secured notes repaid in connection with the Acquisition. The pro forma information is not necessarily indicative of the Company's results of operations had the Acquisition been completed on January 1, 2020, nor is it necessarily indicative of the Company's future results. The pro forma information does not reflect any cost savings from operating efficiencies, synergies, or revenue opportunities that could result from the Acquisition.


2 - 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 generally accepted accounting principles in the U.S. ("GAAP") is included at the end of this press release.

 

Summary Actual Financial Results by Segment
Segment performance presented below for the three and twelve months ended December 31, 2021, and for the three months ended September 30, 2021, includes Custom Truck LP from April 1, 2021 to December 31, 2021. Segment performance for the three and twelve months ended December 31, 2020, represents that of Nesco Holdings before the acquisition of Custom Truck LP and, therefore, is not comparable.

 

Equipment Rental Solutions


Three Months Ended December 31,


Twelve Months Ended December 31,


Three Months
Ended
September 30, 2021

(in $000s)

2021


2020


2021


2020


Rental revenue

$                109,622


$                  47,240


$                354,557


$                179,933


$                105,124

Equipment sales

35,294


11,948


105,435


31,533


27,101

Total revenue

144,916


59,188


459,992


211,466


132,225

Cost of rental revenue

26,961


17,224


94,644


56,140


24,622

Cost of equipment sales

29,605


9,160


90,420


25,614


19,546

Depreciation of rental equipment

43,752


18,311


151,954


74,376


49,125

Total cost of revenue

100,318


44,695


337,018


156,130


93,293

Gross profit

$                  44,598


$                  14,493


$                122,974


$                  55,336


$                  38,932

 

Truck and Equipment Sales


Three Months Ended December 31,


Twelve Months Ended December 31,


Three Months
Ended
September 30, 2021

(in $000s)

2021


2020


2021


2020


Equipment sales

$                177,215


$                    6,056


$                589,899


$                  25,099


$                190,062

Cost of equipment sales

153,844


4,951


528,024


21,792


172,445

Gross profit

$                  23,371


$                    1,105


$                  61,875


$                    3,307


$                  17,617

 

Aftermarket Parts and Services


Three Months Ended December 31,


Twelve Months Ended December 31,


Three Months
Ended
September 30, 2021

(in $000s)

2021


2020


2021


2020


Rental revenue

$                    4,509


$                    4,147


$                  15,510


$                  15,557


$                    3,984

Parts and services revenue

29,799


13,864


101,753


50,617


31,034

Total revenue

34,308


18,011


117,263


66,174


35,018

Cost of revenue

22,243


9,596


86,943


44,218


25,287

Depreciation of rental equipment

2,182


946


5,156


4,156


1,028

Total cost of revenue

24,425


10,542


92,099


48,374


26,315

Gross profit

$                    9,883


$                    7,469


$                  25,164


$                  17,800


$                    8,703

Summary Combined Operating Metrics
The combined operating metrics presented below are presented for the three and twelve-month periods ended December 31, 2021 and 2020 as if Custom Truck LP and Nesco Holdings had operated together for all periods.


Three Months Ended December 31,


Twelve Months Ended December 31,


Three Months
Ended
September 30, 2021

(in $000s)

2021


2020


2021


2020


Ending OEC(a) (as of period end)

$         1,363,451


$         1,342,497


$         1,363,451


$         1,342,497


$         1,371,746

Average OEC on rent(b)

$         1,151,959


$         1,082,433


$         1,097,200


$         1,020,004


$         1,103,562

Fleet utilization(c)

83.7%


78.2%


81.2%


75.3%


81.4%

OEC on rent yield(d)

39.4%


37.0%


38.0%


38.1%


38.0%

Sales order backlog(e) (as of period end)

$            411,636


$            152,917


$            411,636


$            152,917


$            338,457



(a)

Ending OEC — original equipment cost ("OEC") is the original equipment cost of units at a given point in time.

(b)

Average OEC on rent — Average OEC on rent is calculated as the weighted-average OEC on rent during the stated period.

(c)

Fleet utilization — total number of days the rental equipment was rented during a specified period of time divided by the total number of days available during the same period and weighted based on OEC.

(d)

OEC on rent yield ("ORY") — a measure of return realized by our rental fleet during a 12-month period. ORY is calculated as rental revenue (excluding freight recovery and ancillary fees) during the stated period divided by the Average OEC on rent for the same period. For period less than 12 months, the ORY is adjusted to an annualized basis.

(e)

Sales order backlog — purchase orders received for products expected to be shipped within the next 12 months, although shipment dates are subject to change due to design modifications or changes in other customer requirements. Sales order backlog should not be considered an accurate measure of future net sales.

Management Commentary
Total revenue for CTOS in 2021 was characterized by strong year-over-year customer demand for new and used equipment, with full-year pro forma revenue increasing 9.4% to $1,483.6 million as compared to full-year pro forma revenue in 2020 of $1,356.5 million. In the fourth quarter total revenue was $356.4 million, a decrease of 0.3% from the third quarter of 2021. Consolidated rental revenue improved to $114.1 million (a 4.6% increase on a sequential quarter basis), compared to $109.1 million in the third quarter of 2021, continuing a trend of high demand related to infrastructure investments in our T&D and Telecom end markets. Pro forma rental revenue increased $4.8 million to $114.1 million in the fourth quarter of 2021, compared to pro forma rental revenue of $109.4 million in the fourth quarter of 2020. Full-year 2021 pro forma rental revenue improved 2.8% to $422.0 million compared to pro forma full-year 2020 rental revenue of $410.5 million. Sales of new and used equipment were $212.5 million in the fourth quarter of 2021, compared to $217.2 million in the third quarter of 2021. The decline in new sales was driven by supply chain challenges, especially at the beginning of the quarter. Pro forma new and used equipment sales decreased $53.4 million to $212.5 million in the fourth quarter of 2021, compared pro forma new and used equipment sales of $265.9 million in the fourth quarter of 2020. Sales order backlog grew to $411.6 million as of the end of the fourth quarter of 2021 compared to $338.5 million as of the end of the third quarter of 2021, representing an increase of 21.6%. Full-year 2021 pro forma equipment sales revenue improved 14.7% to $941.3 million compared to pro forma full-year 2020 equipment sales revenue of $820.9 million. Equipment sales gross profit improved to $29.1 million, or 15.5%, compared to $25.2 million in the third quarter of 2021. Pro forma full-year 2021 gross profit, excluding rental depreciation, was $462.1 million, a 9.0% increase, compared to pro forma full-year 2020 gross profit, excluding rental depreciation, of $424.0 million.

In our ERS segment, demand for equipment remained solid as rental revenue in the fourth quarter of 2021 was $109.6 million compared to $105.1 million in the third quarter of 2021, a 4.3% increase. Fleet utilization improved to 83.7% from 81.4% in the third quarter of 2021. As expected, rental asset sales increased modestly in the fourth quarter as customers looked to consume capital budgets. Gross profit (excluding depreciation) in the segment was $88.4 million, compared to $88.1 million in the third quarter of 2021, representing flat growth on a sequential quarter basis.

Revenue in our TES segment declined 7%, to $177.2 million in the fourth quarter of 2021, from $190.1 million in the third quarter of 2021, as a result of supply chain challenges relating to the segment's inventory suppliers. Despite the impact on fourth quarter sales volume, TES continued to see strength in product demand as sales order backlog grew by 21.6% compared to the end of the third quarter of 2021. On a pro forma basis, sales of new equipment were $212.5 million in the fourth quarter of 2021, compared to $194.8 million in the fourth quarter of 2020, a 1.2% increase.

APS segment revenue decreased by $0.7 million, or 2%, in the fourth quarter of 2021, to $34.3 million, as compared to $35.0 million in the third quarter of 2021, driven by increased focus by service technicians on maintaining the rental fleet and seasonal slowdowns in parts sales.

Net loss was $3.7 million in the fourth quarter of 2021 compared to $20.5 million for the third quarter of 2021, which improved due to gross profit gains and reduced selling, general and administrative expenses.

Adjusted EBITDA for the fourth quarter of 2021 was $95.6 million, compared to $84.4 million for the third quarter of 2021. The increase in Adjusted EBITDA was largely driven by the improvement in rental demand and production efficiencies in both our TES and APS segments. On a full-year basis, 2021 pro forma Adjusted EBITDA $323.1 million, an increase of 9.5% compared to full-year 2020 pro forma Adjusted EBITDA of $295.1 million. Full-year 2021 pro forma Adjusted EBITDA when adjusted for second quarter 2021 inventory and accounts receivables reserve charges of $9.8 million, was $332.9 million, representing a 12.8% improvement compared to full-year 2020 pro forma Adjusted EBITDA.

CTOS had cash and cash equivalents of $35.9 million as of December 31, 2021, and debt outstanding net of cash and cash equivalents ("net debt"), including finance leases, was $1,320.8 million as of December 31, 2021. Our pro forma leverage ratio, which is net debt divided by pro forma EBITDA, was 4.09 as of December 31, 2021. Our pro forma leverage ratio, adjusted for $9.8 million of charges taken during the second quarter primarily related to increased reserves of leasing receivables and inventories, was 3.97 as of December 31, 2021. Availability under the senior secured credit facility was $347.0 million as of December 31, 2021. For the twelve months ended December 31, 2021, we added $188.4 million to our rental fleet ($47.2 million in the three months ended December 31, 2021).

2022 Outlook
Based on the Company's current sales order backlog and management's outlook for the rental fleet for remainder of the year, the Company is providing full-year 2022 guidance.

2022 Consolidated Outlook

Revenue

$1,565 million to $1,750 million


Adjusted EBITDA1

$385 million to $410 million





2022 Outlook by Segment


ERS

TES

APS

Revenue

$610 million to $650 million

$825 million to $950 million

$130 million to $150 million


1 - CTOS is not able to forecast net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect GAAP net income including, but not limited to, customer buyout requests on rentals with rental purchase options, income tax expense and changes in fair value of derivative financial instruments. Adjusted EBITDA should not be used to predict net income as the difference between the two measures is variable.

"Our FY22 outlook reflects the continued strength of our end markets and the exceptional focus by our teams to expand margins across all business lines. The outlook also adequately reflects the risks associated with the current supply chain challenges, which we expect will persist through at least the first half of the year," said Fred Ross, Chief Executive Officer of CTOS.

CONFERENCE CALL INFORMATION
The Company has scheduled a conference call at 5:00 P.M. Eastern Time on March 10, 2022, to discuss its fourth quarter and full-year 2021 financial results. A webcast will be publicly available at: investors.customtruck.com. To listen by phone, please dial 1-877-425-9470 or 1-201-389-0878. A replay of the call will be available until midnight, Thursday, March 17, 2022, by dialing 1-844-512-2921 or 1-412-317-6671 and entering passcode 13727136.

ABOUT CTOS
CTOS is one of the largest providers of specialty equipment, parts, tools, accessories and services to the electric utility transmission and distribution, telecommunications and rail markets in North America. CTOS offers its specialized equipment to a diverse customer base for the maintenance, repair, upgrade and installation of critical infrastructure assets, including electric lines, telecommunications networks and rail systems. The Company's coast-to-coast rental fleet of more than 9,600 units includes aerial devices, boom trucks, cranes, digger derricks, pressure drills, stringing gear, hi-rail equipment, repair parts, tools and accessories. For more information, please visit investors.customtruck.com.

FORWARD-LOOKING STATEMENTS
This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's management's control, that could cause actual results or outcomes to differ materially from those discussed in this press release. This press release is based on certain assumptions that the Company's management has made in light of its experience in the industry, as well as the Company's perceptions of historical trends, current conditions, expected future developments and other factors the Company believes are appropriate in these circumstances. As you read and consider this press release, you should understand that these statements are not guarantees of performance or results. Many factors could affect the Company's actual performance and results and could cause actual results to differ materially from those expressed in this press release. Important factors, among others, that may affect actual results or outcomes include: difficulty in integrating Nesco Holdings and Custom Truck LP businesses and fully realizing the anticipated benefits of the Acquisition; public health crises such as the COVID-19 pandemic; the cyclicality of demand for our products and services and our vulnerability to industry, regional and national downturns, which impact, among others, our ability to manage our rental equipment; fluctuation of our revenue and operating results; our inability to obtain raw materials, component parts and/or finished goods in a timely and cost-effective manner; competition, which may have a material adverse effect on our business by reducing our ability to increase or maintain revenues or profitability; any further increase in the cost of new equipment that we purchase for use in our rental fleet or for our sales inventory; aging or obsolescence of our existing equipment, and the fluctuations of market value thereof; uncertainties in the success of our future acquisitions or integration of companies that we acquire; our inability to recruit and retain the experienced personnel we need to compete in our industries; further unionization of our workforce; disruptions in our information technology systems or a compromise of our system security, limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, and implement strategic initiatives; unfavorable conditions in the capital and credit markets and our inability to obtain additional capital as required; our inability to renew our leases upon their expiration; our failure to keep pace with technological developments; our dependence on a limited number of manufacturers and suppliers and on third-party contractors to provide us with various services to assist us with conducting our business; risks related to our operations outside of the United States, including changes in local political or economic conditions, foreign exchange risks and compliance risks with local laws and regulations; potential impairment charges and our inability to collect on contracts with customers; failure of federal and state legislative and regulatory developments that encourage electric power transmission infrastructure spending to translate into demand for our equipment; material disruptions to our operation and manufacturing locations as a result of public health concerns, equipment failures, natural disasters, work stoppages, power outages or other reasons; changes to international trade agreements, tariffs, import and excise duties, taxes or other governmental rules and regulations; our exposure to various risks related to legal proceedings or claims, and our failure to comply with relevant laws and regulations, including those related to occupational health and safety, environment and government contract; significant transaction and transition costs that we will continue to incur following the Acquisition; the interest of our majority shareholder, which may not be consistent with the other shareholders; our significant indebtedness, which may adversely affect our financial position, limit our available cash and our access to additional capital, prevent us from growing our business and increase our risk of default; significant operating and financial restrictions imposed by the agreements governing our existing debt; and uncertainties related to our variable rate indebtedness. For a more complete description of these and other possible risks and uncertainties, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and its subsequent reports filed with the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements.

INVESTOR CONTACT
Brian Perman, Vice President, Investor Relations
(844) 403-6138
investors@customtruck.com

 


CUSTOM TRUCK ONE SOURCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

The condensed consolidated statements of operations presented below for the three months ended December 31, 2021, and the twelve months ended December 31, 2021, include
the results of Custom Truck LP from April 1, 2021 to December 31, 2021. The condensed consolidated statements of operations for the three and twelve months ended
December 31, 2020, represent those of Nesco Holdings before the acquisition of Custom Truck LP and, therefore, are not comparable.



Three Months Ended December 31,


Twelve Months Ended December 31,


Three Months

Ended

September 30, 2021

(in $000s except per share data)

2021


2020


2021


2020


Revenue










Rental revenue

$                114,131


$                  51,387


$                370,067


$                195,490


$                109,108

Equipment sales

212,509


18,004


695,334


56,632


217,163

Parts sales and services

29,799


13,864


101,753


50,617


31,034

Total revenue

356,439


83,255


1,167,154


302,739


357,305

Cost of Revenue










Cost of rental revenue

28,012


18,508


99,885


61,207


25,932

Depreciation of rental equipment

45,934


19,257


157,110


78,532


50,153

Cost of equipment sales

183,449


14,112


618,444


47,407


191,991

Cost of parts sales and services

21,192


8,311


81,702


39,150


23,977

Total cost of revenue

278,587


60,188


957,141


226,296


292,053

Gross Profit

77,852


23,067


210,013


76,443


65,252

Operating Expenses










Selling, general and administrative expenses

43,844


12,897


155,783


46,409


48,625

Amortization

13,334


919


40,754


3,153


13,334

Non-rental depreciation

1,768


21


3,613


95


873

Transaction expenses

9,065


6,256


51,830


9,538


7,742

Total operating expenses

68,011


20,093


251,980


59,195


70,574

Operating Income (Loss)

9,841


2,974


(41,967)


17,248


(5,322)

Other Expense










Loss on extinguishment of debt



61,695



Interest expense, net

19,169


15,384


72,843


63,200


19,045

Financing and other expense (income)

428


(846)


571


5,399


(3,656)

Total other expense

19,597


14,538


135,109


68,599


15,389

Income (Loss) Before Income Taxes

(9,756)


(11,564)


(177,076)


(51,351)


(20,711)

Income Tax Expense (Benefit)

(6,043)


(4,233)


4,425


(30,074)


(186)

Net Income (Loss)

$                  (3,713)


$                  (7,331)


$              (181,501)


$                (21,277)


$                (20,525)











Net Income (Loss) Per Share










Basic

$                    (0.02)


$                    (0.15)


$                    (0.75)


$                    (0.43)


$                    (0.08)

Diluted

$                    (0.02)


$                    (0.15)


$                    (0.75)


$                    (0.43)


$                    (0.08)

 


CUSTOM TRUCK ONE SOURCE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

The condensed consolidated balance sheet as of December 31, 2021, presented below includes
Custom Truck LP and, as of December 31, 2020, represents Nesco Holdings before the acquisition
of Custom Truck LP and, therefore, is not comparable.


(in $000s)

December 31, 2021


December 31, 2020

Assets




Current Assets




Cash and cash equivalents

$                           35,902


$                             3,412

Accounts receivable, net

168,394


60,933

Financing receivables, net

28,649


Inventory

410,542


31,367

Prepaid expenses and other

13,217


7,530

Total current assets

656,704


103,242

Property and equipment, net

108,612


6,269

Rental equipment, net

834,325


335,812

Goodwill

695,865


238,052

Intangible assets, net

327,840


67,579

Deferred income taxes


16,952

Operating lease assets

36,014


Other assets

24,406


498

Total Assets

$                      2,683,766


$                         768,404

Liabilities and Stockholders' Equity (Deficit)




Current Liabilities




Accounts payable

$                           91,123


$                           31,829

Accrued expenses

60,337


31,991

Deferred revenue and customer deposits

35,791


975

Floor plan payables - trade

72,714


Floor plan payables - non-trade

165,239


Operating lease liabilities - current

4,987


Current maturities of long-term debt

6,354


1,280

Current portion of finance lease obligations

4,038


5,276

Total current liabilities

440,583


71,351

Long-term debt, net

1,308,265


715,858

Finance leases

5,109


5,250

Operating lease liabilities - noncurrent

31,514


Deferred income taxes

15,621


Derivative and warrants liabilities

24,164


7,012

Total long-term liabilities

1,384,673


728,120

Commitments and contingencies




Stockholder's Equity (Deficit)




Common stock

25


5

Treasury stock

(3,020)


Additional paid-in capital

1,508,995


434,917

Accumulated deficit

(647,490)


(465,989)

Total stockholders' equity (deficit)

858,510


(31,067)

Total Liabilities and Stockholders' Equity (Deficit)

$                      2,683,766


$                         768,404

 


CUSTOM TRUCK ONE SOURCE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

The condensed consolidated statement of cash flows presented below for the twelve months ended December 31, 2021, include the
cash flows of Custom Truck LP from April 1, 2021 to December 31, 2021. The condensed consolidated statement of cash flows
for the twelve months ended December 31, 2020, represents the cash flows of Nesco Holdings before the acquisition
of Custom Truck LP and, therefore, is not comparable.



Twelve Months Ended December 31,

(in $000s)

2021


2020

Operating activities




Net loss

$                         (181,501)


$                           (21,277)

Adjustments to reconcile net loss to net cash flow from operating activities:




Depreciation and amortization

209,073


84,889

Amortization of debt issuance costs

4,740


3,290

Loss on extinguishment of debt

61,695


Provision for losses on accounts receivable

11,103


3,765

Share-based compensation

17,313


2,357

Gain on sales and disposals of rental equipment

(11,636)


(7,996)

Change in fair value of derivative and warrants

6,192


5,303

Deferred tax expense (benefit)

3,863


(28,810)

Other assets

113


Changes in assets and liabilities:




Accounts and financing receivables

(37,716)


7,061

Inventories

46,574


(9,642)

Prepaids, operating leases and other

(6,236)


(2,313)

Accounts payable

8,060


3,113

Accrued expenses and other liabilities

5,580


4,384

Floor plan payables - trade, net

(18,276)


Customer deposits and deferred revenue

19,985


(1,295)

Net cash flow from operating activities

138,926


42,829





Investing activities




Acquisition of business, net of cash acquired

(1,337,686)


Purchases of rental equipment

(188,389)


(67,546)

Proceeds from sales and disposals of rental equipment

99,833


38,933

Other investing activities, net

(3,238)


(701)

Net cash flow from investing activities

(1,429,480)


(29,314)





Financing activities




Proceeds from debt

952,743


Proceeds from issuance of common stock

883,000


Payment of common stock issuance costs

(6,386)


Payment of premiums on debt extinguishment

(53,469)


Share-based payments

(652)


Borrowings under revolving credit facilities

491,084


86,178

Repayments under revolving credit facilities

(347,111)


(85,208)

Repayments of notes payable

(507,509)


(1,146)

Finance lease payments

(5,223)


(15,950)

Acquisition of inventory through floor plan payables - non-trade

304,902


Repayment of floor plan payables - non-trade

(353,641)


Payment of debt issuance costs

(34,694)


(279)

Net cash flow from financing activities

1,323,044


(16,405)

Net Change in Cash

32,490


(2,890)

Cash at Beginning of Period

3,412


6,302

Cash at End of Period

$                            35,902


$                              3,412

 






Twelve Months Ended December 31,

(in $000s)

2021


2020

Supplemental Cash Flow Information




Cash paid for interest

$                            92,625


$                            60,340

Cash paid for income taxes

541


646

Non-Cash Investing and Financing Activities:




Non-cash consideration - acquisition of business

187,935


Rental equipment and property and equipment purchases in accounts payable


9,122

Rental equipment sales in accounts receivable

1,555


5,120

 


CUSTOM TRUCK ONE SOURCE, INC.
NON-GAAP FINANCIAL AND PERFORMANCE MEASURES
In our press release and schedules, and on the related conference call, we report certain financial measures that are not required by, or presented in accordance with, United States generally accepted accounting principles ("GAAP"). We utilize these financial measures to manage our business on a day-to-day basis and some of these measures are commonly used in our industry to evaluate performance. We believe these non-GAAP measures provide investors expanded insight to assess performance, in addition to the standard GAAP-based financial measures. The press release schedules reconcile the most directly comparable GAAP measure to each non-GAAP measure that we refer to. Although management evaluates and presents these non-GAAP measures for the reasons described herein, please be aware that these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for revenue, operating income/loss, net income/loss, earnings/loss per share or any other comparable operating measure prescribed by GAAP. In addition, we may calculate and/or present these non-GAAP financial measures differently than measures with the same or similar names that other companies report, and as a result, the non-GAAP measures we report may not be comparable to those reported by others.

Custom Truck LP became a wholly owned subsidiary of the Company on April 1, 2021. The Company's condensed consolidated financial statements prepared under GAAP include Custom Truck LP as of December 31, 2021, and for the period from April 1, 2021 to December 31, 2021. Information presented for the three and twelve months ended December 31, 2020, is that of Nesco Holdings. Accordingly, the financial information presented under GAAP for the current periods is not comparable to those of corresponding prior periods. As a result, we have included information on a "pro forma combined basis" as further described below, which we believe provides for more meaningful year-over-year comparability.

Pro Forma Financial Information. The unaudited pro forma combined financial information presented on the subsequent pages give effect to the Company's acquisition of Custom Truck LP, as if the Acquisition had occurred on January 1, 2020, and is presented to facilitate comparisons with our results following the Acquisition. This information has been prepared in accordance with Article 11 of Regulation S-X. Such unaudited pro forma combined financial information also uses the estimated fair value of assets and liabilities on April 1, 2021, the closing date of the Acquisition, and makes the following assumptions: (1) removes acquisition-related costs and charges that were recognized in the Company's condensed consolidated financial statements in the twelve months ended December 31, 2021, and applies these costs and charges to the twelve months ended December 31, 2020, as if the transactions had occurred on January 1, 2020; (2) removes the loss on the extinguishment of debt that was recognized in the Company's condensed consolidated financial statements in the twelve months ended December 31, 2021, and applies the charge to the twelve months ended December 31, 2020, as if the debt extinguishment giving rise to the loss had occurred on January 1, 2020; (3) adjusts for the impacts of purchase accounting in the three and twelve months ended December 31, 2021 and 2020; (4) adjusts interest expense, including amortization of debt issuance costs, to reflect borrowings on the ABL Facility and issuance of the 2029 Secured Notes, as if the funds had been borrowed and the 2029 Secured Notes had been issued on January 1, 2020 and used to repay pre-acquisition debt; and, (5) adjusts for the income tax effect using a tax rate of 25%.

Pro Forma Adjusted EBITDA. We present Pro Forma Adjusted EBITDA as if the Acquisition had occurred on January 1, 2020. Refer to the reconciliation of pro forma combined net income (loss) to Pro Forma Adjusted EBITDA for the three and twelve-month periods ended December 31, 2021 and 2020 in this press release.

 

CUSTOM TRUCK ONE SOURCE, INC.

SCHEDULE 1 — ADJUSTED EBITDA RECONCILIATION

(unaudited)

The Adjusted EBITDA Reconciliation presented below for the three months ended December 31, 2021, and twelve months ended December 31, 2021, include the results
of Custom Truck LP from April 1, 2021 to December 31, 2021. The Adjusted EBITDA Reconciliation for the three and twelve months ended December 31, 2020, represent
those of Nesco Holdings before the acquisition of Custom Truck LP and, therefore, is not comparable.



Three Months Ended December 31,


Twelve Months Ended December 31,


Three Months
Ended
September 30, 2021

(in $000s)

2021
Actual


2020
Actual


2021
Actual


2020
Actual


Net income (loss)

$              (3,713)


$              (7,331)


$          (181,501)


$            (21,277)


$            (20,525)

Interest expense

17,778


15,384


67,610


63,200


17,324

Income tax expense (benefit)

(6,043)


(4,233)


4,425


(30,074)


(186)

Depreciation and amortization

63,106


21,070


209,073


84,889


66,804

EBITDA

71,128


24,890


99,607


96,738


63,417

Adjustments:










Non-cash purchase accounting impact (1)

6,468


1,025


33,954


2,510


6,046

Transaction and integration costs (2)

8,900


6,562


51,993


11,660


7,748

Loss on extinguishment of debt (3)



61,695



Sales-type lease adjustment (4)

3,757



7,030



3,783

Share-based payments (5)

4,597


688


17,313


2,357


4,856

Change in fair value of derivative and warrants (6)

739


(846)


6,192


5,303


(1,427)

Adjusted EBITDA

$             95,589


$             32,319


$           277,784


$           118,568


$             84,423

Adjusted EBITDA is defined as net income (loss) plus interest expense, provision for income taxes, depreciation and amortization, and further adjusted for non-cash purchase accounting impact, transaction and process improvement costs, including business integration expenses, share-based payments, the change in fair value of derivative instruments, sales-type lease adjustment, and other special charges that are not expected to recur. This non-GAAP measure is subject to certain limitations.

(1)

Represents the non-cash impact of purchase accounting, net of accumulated depreciation, on the cost of equipment and inventory sold. The equipment and inventory acquired received a purchase accounting step-up in basis, which is a non-cash adjustment to the equipment cost pursuant to our credit agreement.

(2)

Represents transaction costs related to acquisitions of businesses, including post-acquisition integration costs, which are recognized within operating expenses in our consolidated Statements of Comprehensive Income (Loss). These expenses are comprised of professional consultancy, legal, tax and accounting fees. Also included are expenses associated with the integration of acquired businesses.

(3)

Loss on extinguishment of debt represents a special charge, which is not expected to recur. Such charges are adjustments pursuant to our credit agreement.

(4)

Represents the adjustment for the impact of sales-type lease accounting for certain leases containing rental purchase options (or "RPOs"), as the application of sales-type lease accounting is not deemed to be representative of the ongoing cash flows of the underlying rental contracts. This adjustment is made pursuant to our credit agreement.

(5)

Represents non-cash share-based compensation expense associated with the issuance of stock options and restricted stock units.

(6)

Represents the charge to earnings for our interest rate collar and the change in fair value of the liability for warrants.

 

 

CUSTOM TRUCK ONE SOURCE, INC.

SCHEDULE 2 — SUPPLEMENTAL PRO FORMA INFORMATION

(unaudited)

Pro Forma Combined Statements of Operations — Three Months Ended December 31, 2021

 


(in $000s)

Custom Truck One
Source, Inc.


Pro Forma
Adjustmentsa


Pro Forma
Combined

Rental revenue

$                 114,131


$                         —


$                 114,131

Equipment sales

212,509



212,509

Parts sales and services

29,799



29,799

Total revenue

356,439



356,439

Cost of revenue

232,653


(1,384)

b

231,269

Depreciation of rental equipment

45,934



45,934

Total cost of revenue

278,587


(1,384)


277,203

Gross profit

77,852


1,384


79,236

Selling, general and administrative

43,844



43,844

Amortization

13,334



13,334

Non-rental depreciation

1,768



1,768

Transaction expenses

9,065



9,065

Total operating expenses

68,011



68,011

Operating income (loss)

9,841


1,384


11,225

Interest expense, net

19,169



19,169

Finance and other expense (income)

428



428

Total other expense

19,597



19,597

Income (loss) before taxes

(9,756)


1,384


(8,372)

Taxes

(6,043)


346

c

(5,697)

Net income (loss)

$                   (3,713)


$                     1,038


$                   (2,675)



a.

The pro forma adjustments give effect to the following as if they occurred on January 1, 2020: (i) the Acquisition and (ii) extinguishment of Nesco Holdings' 2019 Credit Facility and its Senior Secured Notes due 2024 repaid in connection with the Acquisition. The adjustments also give effect to transaction expenses directly attributable to the Acquisition.

b.

Represents the elimination from cost of revenue, of the run-off of the estimated step-up in fair value of inventory acquired that was recognized in the Company's consolidated financial statements for the three months ended December 31, 2021. The impact of the step-up is reflected as an adjustment to the comparable prior period ended December 31, 2020, as if the Acquisition had occurred on January 1, 2020.

c.

Reflects the adjustment to recognize the tax impacts of the pro forma adjustments for which a tax expense is
recognized using a statutory tax rate of 25%.

 

Pro Forma Combined Statements of Operations — Three Months Ended December 31, 2020


(in $000s)

Nesco Holdings


Custom Truck LP


Pro Forma
Adjustmentsa


Pro Forma
Combined

Rental revenue

$                   51,387


$                   57,986


$                         —


$                 109,373

Equipment sales

18,004


247,945



265,949

Parts sales and services

13,864


16,293



30,157

Total revenue

83,255


322,224



405,479

Cost of revenue

40,931


239,653


(1,336)

b

279,248

Depreciation of rental equipment

19,257


24,087


2,487

c

45,831

Total cost of revenue

60,188


263,740


1,151


325,079

Gross profit

23,067


58,484


(1,151)


80,400

Selling, general and administrative

12,897


32,505



45,402

Amortization

919


1,990


3,590

d

6,499

Non-rental depreciation

21


1,176


(233)

d

964

Transaction expenses

6,256




6,256

Total operating expenses

20,093


35,671


3,357


59,121

Operating income (loss)

2,974


22,813


(4,508)


21,279

Interest expense, net

15,384


11,342


(8,108)

e

18,618

Finance and other expense (income)

(846)


(4,422)



(5,268)

Total other expense

14,538


6,920


(8,108)


13,350

Income (loss) before taxes

(11,564)


15,893


3,600


7,929

Taxes

(4,233)



900

f

(3,333)

Net income (loss)

$                   (7,331)


$                   15,893


$                     2,700


$                   11,262



a.

The pro forma adjustments give effect to the following as if they occurred on January 1, 2020: (i) the Acquisition, (ii) the extinguishment of Nesco Holdings' 2019 Credit Facility and its Senior Secured Notes due 2024 repaid in connection with the Acquisition and (iii) the extinguishment of the outstanding borrowings of Custom Truck LP's credit facility and term loan that was repaid on the closing of the Acquisition.

b.

Represents adjustments to cost of revenue for the reduction to depreciation expense for the difference between historical depreciation and estimated depreciation of the preliminary fair value of the property and equipment.

c.

Represents the adjustment for depreciation of rental fleet relating to the estimated mark-up to fair value from purchase accounting as a result of the Acquisition.

d.

Represents the differential in other amortization and depreciation related to the estimated fair value of the identified intangible assets and non-rental property and equipment from purchase accounting as a result of the Acquisition.

e.

Reflects the differential in interest expense, inclusive of amortization of capitalized debt issuance costs, related to the Company's debt structure after the Acquisition as though the following had occurred on January 1, 2020: (i) borrowings under the ABL Facility; (ii) repayment of Nesco Holdings' 2019 Credit Facility; (iii) repayment of Nesco Holdings' 2024 Secured Notes; (iv) repayment of Custom Truck LP's borrowings under its revolving credit and term loan facility; and, (v) the issuance of the 2029 Secured Notes.

f.

Reflects the adjustment to recognize the tax impacts of the pro forma adjustments for which a tax expense is recognized using a statutory tax rate of 25%.

 

Pro Forma Combined Statements of Operations — Twelve Months Ended December 31, 2021


(in $000s)

Custom Truck One
Source, Inc.


Custom Truck LP
(Three Months
Ended March 31,
2021)


Pro Forma
Adjustmentsa


Pro Forma
Combined

Rental revenue

$                 370,067


$                   51,973


$                         —


$                 422,040

Equipment sales

695,334


245,955



941,289

Parts sales and services

101,753


18,543



120,296

Total revenue

1,167,154


316,471



1,483,625

Cost of revenue

800,031


240,678


(19,186)

b

1,021,523

Depreciation of rental equipment

157,110


22,757


3,817

c

183,684

Total cost of revenue

957,141


263,435


(15,369)


1,205,207

Gross profit

210,013


53,036


15,369


278,418

Selling, general and administrative

155,783


34,428



190,211

Amortization

40,754


1,990


3,589

d

46,333

Non-rental depreciation

3,613


1,151


(213)

d

4,551

Transaction expenses

51,830


5,254


(40,277)

e

16,807

Total operating expenses

251,980


42,823


(36,901)


257,902

Operating income (loss)

(41,967)


10,213


52,270


20,516

Loss on extinguishment of debt

61,695



(61,695)

f

Interest expense, net

72,843


9,992


(3,919)

g

78,916

Finance and other expense (income)

571


(2,346)



(1,775)

Total other expense

135,109


7,646


(65,614)


77,141

Income (loss) before taxes

(177,076)


2,567


117,884


(56,625)

Taxes

4,425



29,471

h

33,896

Net income (loss)

$                (181,501)


$                     2,567


$                   88,413


$                  (90,521)



a. 

The pro forma adjustments give effect to the following as if they occurred on January 1, 2020: (i) the Acquisition, (ii) the extinguishment of Nesco Holdings' 2019 Credit Facility and its Senior Secured Notes due 2024 repaid in connection with the Acquisition and (iii) the extinguishment of the outstanding borrowings of Custom Truck LP's credit facility and term loan that was repaid on the closing of the Acquisition.

b.

Represents the elimination from cost of revenue of the run-off of the estimated step-up in fair value of inventory acquired that was recognized in the Company's consolidated financial statements for the twelve months ended December 31, 2021. The impact of the step-up is reflected as an adjustment to the comparable prior period ended December 31, 2020, as if the Acquisition had occurred on January 1, 2020. Includes the reduction to depreciation expense for the difference between historical depreciation and estimated depreciation of the preliminary fair value of the property and equipment.

c.

Represents the adjustment for depreciation of rental fleet relating to the estimated mark-up to fair value from purchase accounting as a result of the Acquisition.

d. 

Represents the differential in other amortization and depreciation related to the estimated fair value of the identified intangible assets and non-rental property and equipment from purchase accounting as a result of the Acquisition.

e. 

Represents the elimination of transaction expenses recognized in the Company's consolidated financial statements for the twelve months ended December 31, 2021. The expenses were directly attributable to the Acquisition and are reflected as adjustments to the comparable prior period (e.g., December 31, 2020) as if the Acquisition had occurred on January 1, 2020.

f.

Represents the elimination of the loss on extinguishment of debt recognized in the Company's consolidated financial statements for the twelve months ended December 31, 2021, as though the repayment of Nesco Holdings' 2019 Credit Facility and its 2024 Secured Notes had occurred on January 1, 2020.

g.

Reflects the differential in interest expense, inclusive of amortization of capitalized debt issuance costs, related to the Company's debt structure after the Acquisition as though the following had occurred on January 1, 2020: (i) borrowings under the ABL Facility; (ii) repayment of Nesco Holdings' 2019 Credit Facility; (iii) repayment of Nesco Holdings' 2024 Secured Notes; (iv) repayment of Custom Truck LP's borrowings under its revolving credit and term loan facility; and, (v) the issuance of the 2029 Secured Notes.

h.

Reflects the adjustment to recognize the tax impacts of the pro forma adjustments for which a tax expense is recognized using a statutory tax rate of 25%.

 

Pro Forma Combined Statements of Operations — Twelve Months Ended December 31, 2020


(in $000s)

Nesco Holdings


Custom Truck LP


Pro Forma
Adjustmentsa


Pro Forma
Combined

Rental revenue

$                 195,490


$                 215,008


$                         —


$                 410,498

Equipment sales

56,632


764,302



820,934

Parts sales and services

50,617


74,432



125,049

Total revenue

302,739


1,053,742



1,356,481

Cost of revenue

147,764


769,913


14,775

b

932,452

Depreciation of rental equipment

78,532


97,653


8,643

c

184,828

Total cost of revenue

226,296


867,566


23,418


1,117,280

Gross profit

76,443


186,176


(23,418)


239,201

Selling, general and administrative

46,409


119,814



166,223

Amortization

3,153


8,381


13,936

d

25,470

Non-rental depreciation

95


4,722


(972)

d

3,845

Transaction expenses

9,538



40,277

e

49,815

Total operating expenses

59,195


132,917


53,241


245,353

Operating income (loss)

17,248


53,259


(76,659)


(6,152)

Loss on extinguishment of debt


2,261


61,695

f

63,956

Interest expense, net

63,200


54,244


(26,232)

g

91,212

Finance and other expense (income)

5,399


(12,199)



(6,800)

Total other expense

68,599


44,306


35,463


148,368

Income (loss) before taxes

(51,351)


8,953


(112,122)


(154,520)

Taxes

(30,074)



(28,031)

h

(58,105)

Net income (loss)

$                  (21,277)


$                     8,953


$                  (84,091)


$                  (96,415)



a.

The pro forma adjustments give effect to the following as if they occurred on January 1, 2020: (i) the Acquisition, (ii) the extinguishment of Nesco Holdings' 2019 Credit Facility and its Senior Secured Notes due 2024 repaid in connection with the Acquisition and (iii) the extinguishment of the outstanding borrowings of Custom Truck LP's credit facility and term loan that was repaid on the closing of the Acquisition.

b.

Represents adjustments to cost of revenue for (i) the run-off of the estimated step-up in fair value of inventory acquired and (ii) a reduction to depreciation expense for the difference between historical depreciation and estimated depreciation of the preliminary fair value of the property and equipment.

c.

Represents the adjustment for depreciation of rental fleet relating to the estimated mark-up to fair value from purchase accounting as a result of the Acquisition.

d. 

Represents the differential in other amortization and depreciation related to the estimated fair value of the identified intangible assets and non-rental property and equipment from purchase accounting as a result of the Acquisition.

e.

Represents transaction expenses directly attributable to the Acquisition as if the Acquisition had occurred on January 1, 2020.

f.

Represents the loss on extinguishment of debt as though the repayment of Nesco Holdings' 2019 Credit Facility and its 2024 Secured Notes had occurred on January 1, 2020.

g.

Reflects the differential in interest expense, inclusive of amortization of capitalized debt issuance costs, related to the Company's debt structure after the Acquisition as though the following had occurred on January 1, 2020: (i) borrowings under the ABL Facility; (ii) repayment of Nesco Holdings' 2019 Credit Facility; (iii) repayment of Nesco Holdings' 2024 Secured Notes; (iv) repayment of Custom Truck LP's borrowings under its revolving credit and term loan facility; and, (v) the issuance of the 2029 Secured Notes.

h.

Reflects the adjustment to recognize the tax impacts of the pro forma adjustments for which a tax expense is recognized using a statutory tax rate of 25%.

 

Reconciliation of Pro Forma Combined Net Income (Loss) to Pro Forma Adjusted EBITDA

 


The following table provides a reconciliation of pro forma combined net income (loss) to pro forma Adjusted EBITDA:



Three Months Ended December 31,


Twelve Months Ended December 31,

(in $000s)

2021


2020


2021


2020

Net income (loss)

$                   (2,675)


$                   11,262


$                  (90,521)


$                  (96,415)

Interest expense

17,778


15,051


71,204


75,086

Income tax expense (benefit)

(5,697)


(3,333)


33,896


(58,105)

Depreciation and amortization

63,106


55,191


243,570


222,878

EBITDA

72,512


78,171


258,149


143,444

Adjustments:








Non-cash purchase accounting impact

5,084


686


15,755


21,682

Transaction and process improvement costs

8,900


2,284


16,967


53,037

Loss on extinguishment of debt




63,956

Sales-type lease adjustment

3,757


1,355


8,185


3,210

Share-based payments

4,597


1,284


17,870


4,435

Change in fair value of derivative and warrants

739


(618)


6,192


5,303

Adjusted EBITDA

$                   95,589


$                   83,162


$                 323,118


$                 295,067

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/custom-truck-one-source-inc-reports-strong-full-year-pro-forma-combined-revenue-adjusted-ebitda-and-gross-profit-growth-for-2021-301500530.html

SOURCE Custom Truck One Source, Inc.

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