8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): August 6, 2020

NESCO HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-38186		84-2531628
(State or Other Jurisdiction<br>of Incorporation)	(Commission<br>File Number)		(I.R.S. Employer<br>Identification Number)
6714 Pointe Inverness Way, Suite 220<br>Fort Wayne, Indiana		46804
(Address of principal executive offices)		(Zip code)

(800) 252-0043

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Exchange on Which Registered
Common Stock, $0.0001 par value	NSCO	New York Stock Exchange
Redeemable warrants, exercisable for Common Stock, $0.0001 par value	NSCO.WS	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On August 6, 2020, Nesco Holdings, Inc. (the "Company") issued a press release announcing its financial results for the first quarter ended March 31, 2020. The press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

This Form 8-K and the Exhibit hereto shall be deemed “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press release issued August 6, 2020, by Nesco Holdings, Inc.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	August 6, 2020	Nesco Holdings, Inc.
		/s/ Joshua A. Boone
		Joshua A. Boone<br>Chief Financial Officer and Secretary

Document

       Exhibit 99.1

Nesco Holdings, Inc. Reports Second Quarter 2020 Financial Results

SECOND QUARTER 2020 HIGHLIGHTS

All metrics compared to Second Quarter 2019 unless otherwise noted

•Total revenue increased 9.0% to $68.5 million

•Equipment Rental and Sales (ERS) segment revenue decreased 0.5% to $53.4 million

•Parts, Tools and Accessories (PTA) segment revenue increased 64.1% to $15.1 million

•Adjusted EBITDA decreased 14.1% to $26.2 million

•Net loss increased to $13.2 million from $5.4 million

•Free cash flow increased to $14.4 million from negative $27.6 million

•Available liquidity of $83.6 million

FORT WAYNE, IN., August 6, 2020 – Nesco Holdings, Inc. (NYSE: NSCO, “Nesco” or the “Company”), a leading provider of specialty rental equipment to the electric utility, telecom and rail infrastructure end-markets, today reported financial results for the second quarter ended June 30, 2020.

Total revenue in the second quarter was $68.5 million, an increase of $5.6 million or 9.0% from the second quarter 2019, which was negatively impacted due to pandemic-related project delays, but more than offset by the acquisition of Truck Utilities.

Adjusted EBITDA was $26.2 million, a decrease of 14.1% from $30.5 million in the second quarter 2019. The decline in Adjusted EBITDA can be attributed to a combination of lower utilization and higher selling, general and administrative expenses primarily related to becoming a public company. The decline was partially offset by higher equipment sales and the acquisition of Truck Utilities. Nesco’s core rental gross profit, excluding depreciation, declined 7.4% to $32.7 million.

The Company reported a net loss of $13.2 million, compared to a net loss of $5.4 million for the same period in 2019. Additional depreciation of $2.8 million, incremental interest expense of $1.1 million and a $0.8 million charge related to the change in fair value of an interest rate collar contributed to a year-over-year increase in net loss, partially offset by a $1.5 million increase in income tax benefits due to a recovery of taxes paid in prior years as part of the CARES Act.

MANAGEMENT COMMENTARY

“Our second quarter results reflect the resiliency and sustainability of both our critical infrastructure markets and our business model,” said Lee Jacobson, Chief Executive Officer of Nesco. “Given the unprecedented economic environment, we are encouraged with our second quarter results and exceptionally proud of our dedicated team members for their tireless efforts. We continue to prioritize our team’s health and safety while delivering for our customers during this challenging period and have streamlined our business operations and reduced overhead as a result of the temporary slowdown in activity. We are focused on driving free cash flow to ensure ample liquidity to navigate through the pandemic.”

“We remain disciplined in our working capital management and curtailed capital expenditures in the latter part of the second quarter, which helped drive $14.4 million of free cash flow in the second quarter,” said Josh Boone, Chief Financial Officer of Nesco. “Our flexible business model, combined with the investments made in 2019 and the first quarter of 2020 to expand our fleet, position us to capitalize on a typically stronger back half of the year, which we expect to be bolstered by projects that were temporarily put on hold due to the pandemic. Additionally, we have over $80 million of available liquidity with no near-term debt maturities and expect to generate free cash flow for the remainder of 2020. We are in a comfortable financial position that provides flexibility to support continued growth in the business and reduce leverage. We remain committed to a long-term leverage target of 3.0x-3.5x.”

SECOND QUARTER REVENUE BY SEGMENT

All metrics compared to Second Quarter 2019 unless otherwise noted

Equipment Rental and Sales Segment (78.0% of revenue)

•Revenue decreased 0.5% to $53.4 million, compared to $53.7 million

•Equipment rental revenue decreased 4.1% to $43.0 million, compared to $44.9 million

◦Average equipment on rent decreased 0.8% to $461.1 million. The Company invested in fleet growth in 2019 and in the first half of 2020 but reduced utilization resulting from COVID-19 related project delays resulted in relatively flat equipment on rent year over year

◦Fleet utilization declined 8.9% to 71.3% due to project delays resulting from the COVID-19 pandemic

◦Rental rate per day held steady at $136.7

•Equipment sales revenue increased 18.0% to $10.4 million, elevated in part due to new dealer inventory investments in 2019

Parts, Tools and Accessories Segment (22.0% of revenue)

•Revenue increased 64.1% to $15.1 million, compared to $9.2 million

•Parts rental revenue increased 21.5% to $4.0 million primarily due to an expanded footprint of PTA locations

•Parts sales revenue increased 87.5% to $11.1 million primarily due to the acquisition of Truck Utilities

COVID-19 BUSINESS UPDATE

Nesco implemented several initiatives during the second quarter and beginning of the third quarter to reduce costs in the face of the pandemic, including a reduction in capital expenditures relative to pre-COVID planned spend, improvements in working capital, a freeze on all non-essential hiring, a headcount reduction and cuts to travel and other non-essential expenses. The Company expects to realize $2.5 million of annualized benefits from the headcount-related portion of cost cuts alone.

Nesco has taken steps to ensure the health and safety of its team members, while keeping all business and service locations operational throughout the pandemic with little to no disruptions. Nesco continues to fully support its customers’ needs to help them provide critical infrastructure maintenance and construction services and to-date has not experienced any meaningful interruptions to its supply chain.

LIQUIDITY AND CASH FLOW

The Company had cash of $5.3 million and availability of $78.3 million on its asset-based lending facility, resulting in total liquidity of $83.6 million as of June 30, 2020. Net debt outstanding, including capital leases, was $765.9 million at the end of the second quarter 2020. The Company has no near-term debt maturities, with the $385.0 million credit facility and $475.0 million senior secured notes both maturing in 2024.

Nesco reported cash flow from operating activities of $22.5 million, an increase of $21.2 million compared to second quarter in 2019. Net cash outflow from investing activities of $8.0 million declined from $28.8 million for the same period in 2019 as Nesco curtailed capital expenditures. Free cash flow increased to $14.4 million from negative free cash flow of $27.6 million in the second quarter 2019.

Average fleet count increased 12.9% to 4,615 units, compared to 4,086 units a year ago. Total net capital expenditures in the second quarter were $8.1 million. Gross capital expenditures, which include purchases of rental fleet and property and equipment, were $19.0 million. The Company received $10.9 million from sale of rental equipment and parts as well as insurance proceeds from damaged equipment. Year to date, Nesco has invested $35.3 million in net capital expenditures.

2020 OUTLOOK

As previously stated in first quarter financial results, the Company has withdrawn its previous full year 2020 guidance as a result of the unpredictable nature of the COVID-19 pandemic. The Company continues to assess the evolving situation and will update its revenue and Adjusted EBITDA outlook when there is greater visibility and economic conditions become reasonably predictable.

The Company is reintroducing its outlook for net capital expenditures to between $35 to $40 million for the full year 2020^(1)^.

“As we look to the third quarter and the remainder of the year, we remain laser focused on driving short-term execution and disciplined capital spending while remaining committed to our long-term goals of continued growth, free cash flow generation, leverage reduction and driving shareholder value,” Mr. Jacobson said.

(1) Net capital expenditures is a non-GAAP financial measure. Please see the historical non-GAAP reconciliation tables included at the end of this press release.

NON-GAAP FINANCIAL MEASURES

The Company uses a variety of operational and financial metrics, including non-GAAP financial measures such as Adjusted EBITDA, free cash flow, fleet utilization, original equipment cost on rent, net capital expenditures, among other metrics, to enable it to analyze its performance and financial condition. The Company utilizes these financial measures to manage its business on a day-to-day basis and believes that they are the most relevant measures of performance. Some of these measures are commonly used in the specialty rentals industry to evaluate performance. The Company believes these non-GAAP measures provide expanded insight to assess revenue and cost performance, in addition to the standard GAAP-based financial measures. There are no specific rules or regulations for determining non-GAAP measures, and as such, they may not be comparable to measures used by other companies within the industry. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The definitions of non-GAAP financial measures along with a reconciliation of non-GAAP financial information to GAAP are included in the supplemental financial schedules.

CONFERENCE CALL INFORMATION

The Company has scheduled a conference call at 8:30 A.M. Eastern Time on August 6, 2020, to discuss the second quarter 2020 financial results. The conference call can be accessed by dialing 800-920-3351 (United States) or 212-231-2922 (International) using the conference ID 21966791. A replay of the call will be available on the Company’s investor relations website at investors.nescospecialty.com.

ABOUT NESCO

Nesco 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. Nesco 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. Nesco's coast-to-coast rental fleet of over 4,500 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.nescospecialty.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 Nesco’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 Nesco has made in light of its experience in the industry as well as Nesco’s perceptions of historical trends, current conditions, expected future developments and other factors Nesco 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 Nesco’s actual performance and results and could cause actual results to differ materially from those expressed in this press release. All forward-looking statements attributable to Nesco or persons acting on their behalf are expressly qualified in their entirety by the foregoing cautionary statements. Important factors, among others, that may affect actual results or outcomes include: the impact of the COVID-19 pandemic on Nesco's business and operations as well as the overall economy; Nesco’s ability to execute on its plans to develop and market new products and the timing of these development programs; Nesco’s estimates of the size of the markets for its solutions; the rate and degree of market acceptance of Nesco’s solutions; the success of other competing technologies that may become available; Nesco’s ability to identify and integrate acquisitions, including Nesco’s ability to integrate its acquisition of Truck Utilities and realize the anticipated benefits thereof; the performance and security of Nesco’s services; potential litigation involving Nesco; and general economic and market conditions impacting demand for Nesco’s services. For a more complete description of these and other possible risks and uncertainties, please refer to Nesco's Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on March 16, 2020, as updated by Nesco's quarterly reports on Form 10-Q.

INVESTOR CONTACT

Josh Boone, CFO

(800) 252-0043

investors@nescospecialty.com

Nesco Holdings, Inc.

Condensed Consolidated Statements of Operations (unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
(in $000s, except share and per share data)	2020		2019		2020		2019
Revenue
Rental revenue	$	46,984	$	48,125	$	97,978	93,767
Sales of rental equipment	4,982		4,332		14,075		11,731
Sales of new equipment	5,418		4,480		12,995		6,830
Parts sales and services	11,097		5,918		25,176		12,019
Total Revenue	68,481		62,855		150,224		124,347
Cost of Revenue
Cost of rental revenue	14,311		12,843		28,097		23,900
Depreciation of rental equipment	19,696		16,944		39,808		33,675
Cost of rental equipment sales	3,536		3,871		11,264		10,005
Cost of new equipment sales	4,777		3,697		11,431		5,303
Cost of parts sales and services	9,224		4,471		20,584		9,321
Major repair disposals	595		384		1,295		1,146
Total cost of revenue	52,139		42,210		112,479		83,350
Gross Profit	16,342		20,645		37,745		40,997
Operating Expenses
Selling, general and administrative expenses	11,018		7,305		22,636		14,884
Licensing and titling expenses	736		583		1,557		1,236
Amortization and non-rental depreciation	800		749		1,516		1,519
Transaction expenses	227		1,559		963		4,069
Other operating expenses	1,042		629		1,758		779
Total Operating Expenses	13,823		10,825		28,430		22,487
Operating Income	2,519		9,820		9,315		18,510
Other Expense
Interest expense, net	15,949		14,850		31,963		29,843
Other (income) expense, net	783		(9)		6,804		(22)
Total other expense	16,732		14,841		38,767		29,821
Loss Before Income Taxes	(14,213)		(5,021)		(29,452)		(11,311)
Income Tax Expense (Benefit)	(1,063)		402		(333)		836
Net Loss	$	(13,150)	$	(5,423)	$	(29,119)	(12,147)
Loss per Share:
Basic and diluted	$	(0.27)	$	(0.25)	$	(0.59)	$	(0.56)
Weighted-average-common shares outstanding:
Basic and diluted	49,033,903		21,660,638		49,033,903		21,660,638

Nesco Holdings, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(in $000s, except share data)	June 30, 2020		December 31, 2019
Assets
Current Assets
Cash	$	5,300	$	6,302
Accounts receivable, net of allowance of $4,881 and $4,654 respectively	57,438		71,323
Inventory	32,111		33,001
Prepaid expenses and other	5,369		5,217
Total current assets	100,218		115,843
Property and equipment, net	5,795		6,561
Rental equipment, net	369,269		383,420
Goodwill and other intangibles, net	307,327		308,747
Notes receivable	626		713
Total Assets	783,235		$	815,284
Liabilities and Stockholders' Deficit
Current Liabilities
Accounts payable	$	14,856	$	41,172
Accrued expenses	27,206		27,590
Deferred rent income	1,212		2,270
Current maturities of long-term debt	1,280		1,280
Current portion of capital lease obligations	8,080		5,451
Total current liabilities	52,634		77,763
Long-term debt, net	732,805		713,023
Capital leases	16,290		22,631
Deferred tax liabilities	13,267		12,288
Interest rate collar	8,476		1,709
Total long-term liabilities	770,838		749,651
Commitments and contingencies
Stockholders' Deficit
Common stock - $0.0001 par value, 250,000,000 shares authorized, 49,033,903 shares issued and outstanding, at June 30, 2020 and December 31, 2019	5		5
Additional paid-in capital	433,589		432,577
Accumulated deficit	(473,831)		(444,712)
Total stockholders' deficit	(40,237)		(12,130)
Total Liabilities and Stockholders' Deficit	$	783,235	$	815,284

Nesco Holdings, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

	Six Months Ended June 30,
(in $000s)	2020		2019
Operating Activities
Net loss	$	(29,119)	$	(12,147)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation	40,369		34,176
Amortization - intangibles	1,462		1,448
Amortization - financing costs	1,515		1,380
Provision for losses on accounts receivable	1,421		1,112
Share-based payments	1,012		180
Gain on sale of rental equipment and parts	(3,838)		(3,260)
Gain on insurance proceeds - damaged equipment	(233)		(387)
Major repair disposal	1,295		1,146
Change in fair value of derivative	6,767		—
Deferred tax (benefit) expense	979		544
Changes in assets and liabilities:
Accounts receivable	10,935		(13,357)
Inventory	(4,313)		(8,864)
Prepaid expenses and other	(152)		(2,412)
Accounts payable	(6,988)		8,020
Accrued expenses and other liabilities	(385)		(683)
Unearned income	(1,058)		(1,719)
Net cash flow from operating activities	19,669		5,177
Investing Activities
Purchase of equipment - rental fleet	(55,421)		(51,734)
Proceeds from sale of rental equipment and parts	19,005		18,187
Insurance proceeds from damaged equipment	2,191		1,427
Purchase of other property and equipment	(1,089)		(3,655)
Other	87		—
Net cash flow from investing activities	(35,227)		(35,775)
Financing Activities
Borrowings under revolving credit facilities	37,574		43,000
Repayments under revolving credit facilities	(19,074)		(9,000)
Repayments of notes payable	(232)		(365)
Capital lease payments	(3,712)		(2,613)
Finance fees paid	—		20
Net cash flow from financing activities	14,556		31,042
Net Change in Cash	(1,002)		444
Cash at Beginning of Period	6,302		2,140
Cash at End of Period	$	5,300	$	2,584		Supplemental Cash Flow Information
---	---	---	---	---
Cash paid for interest	$	29,502	$	28,708
Cash paid for income taxes	156		240
Non-Cash Investing and Financing Activities
Transfer of inventory to leased equipment	5,203		2,618
Rental equipment and property and equipment purchases in accounts payable	2,316		19,021
Rental equipment sales in accounts receivable	2,453		623
Insurance recoveries accrued in accounts receivable	702		224

Nesco Holdings, Inc.

Adjusted EBITDA Reconciliation (unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
(in $000s)	2020		2019		2020		2019
Net loss	$	(13,150)	$	(5,423)	$	(29,119)	$	(12,147)
Interest expense	15,949		14,850		31,963		29,843
Income tax expense (benefit)	(1,063)		402		(333)		836
Depreciation expense	19,992		17,180		40,369		34,176
Amortization expense	771		724		1,462		1,448
EBITDA	22,499		27,733		44,342		54,156
Adjustments:
Non-cash purchase accounting impact ^(1)^	178		125		1,095		736
Transaction and process improvement costs ^(2)^	1,639		2,183		3,718		4,693
Major repairs ^(3)^	595		384		1,295		1,146
Share-based payments ^(4)^	453		52		1,012		180
Change in fair value of derivative ^(5)^	804		—		6,767		—
Adjusted EBITDA	$	26,168	$	30,477	$	58,229	$	60,911

Adjusted EBITDA is defined as net income (loss) plus interest expense, provision for income taxes, depreciation, and amortization, and further adjusted for (1) non-cash purchase accounting impact, (2) transaction and process improvement costs, including the effect of the cessation of operations in Mexico, (3) major repairs, (4) share-based payments, (5) other non-recurring items, if any, and (6) the change in fair value of derivative instruments. 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 sold. The equipment acquired received a purchase step-up in basis, which is a non-cash adjustment to the equipment cost pursuant to our credit agreement.

(2) 2020: Represents transaction costs related to our acquisition of Truck Utilities (which include post-acquisition integration expenses incurred during the current quarterly period); 2019: Represents transaction expenses related to merger activities associated with the transaction with Capitol that was consummated on July 31, 2019. These expenses are comprised of professional consultancy, legal, tax and accounting fees. Also included are costs of startup activities (which include training, travel, and process setup costs) associated with the rollout of new PTA locations that occurred throughout the prior year into the current periods. Finally, the expenses associated with the Company's closure of its Mexican operations, which closure activities commenced in the third quarter of 2019, are also included for the 2020 periods presented. Pursuant to our credit agreement, the cost of undertakings to effect such cost savings, operating expense reductions and other synergies, as well as any expenses incurred in connection with acquisitions, are amounts to be included in the calculation of Adjusted EBITDA.

(3) Represents the undepreciated cost of replaced vehicle chassis and components from heavy maintenance, repair and overhaul activities associated with our fleet, which is an adjustment pursuant to our credit agreement.

(4) Represents non-cash stock compensation expense associated with the issuance of stock options and restricted stock units.

(5) Represents the charge to earnings for our interest rate collar (which is an undesignated hedge) in the three and six months ended June 30, 2020.

Fleet Metrics (unaudited)

									Six Months Ended June 30,
			2019			2020			2019
(in 000s, except fleet count and rate per day)
Average equipment on rent	461,100		$	464,700		$	480,400		$	458,400
Average fleet count			4,086			4,621			4,000
Average fleet utilization		%	80.2		%	73.6		%	81.1		%
Average rental rate per day	136.71		$	136.67		$	137.26		$	137.06

All values are in US Dollars.

OPERATIONAL AND FINANCIAL METRICS

Average equipment on rent is the average original equipment cost of units on rent during the period. The measure provides a value dimension to the fleet utilization statistics.

Average fleet count is the average number of units in the fleet during the period.

Average fleet utilization for the period is calculated as the total number of invoiced days divided by the total number of available equipment days.

Average rental rate per day for the period is calculated as total rental revenue excluding freight and damaged billings divided by the total rental days, which represents the number of billable days in the period aggregated across all units in the fleet.

These metrics have been adjusted to exclude Mexico, for which the Company commenced exit activities in the third quarter of 2019.

Segment Performance (unaudited)

										Three Months Ended June 30,
										2019
		PTA		Total		ERS		PTA		Total
(in 000s)
Rental revenue	43,025	$	3,959	$	46,984	$	44,867	$	3,258	$	48,125
Sales of rental equipment		—		4,982		4,332		—		4,332
Sales of new equipment		—		5,418		4,480		—		4,480
Parts sales and services		11,097		11,097		—		5,918		5,918
Total revenues		15,056		68,481		53,679		9,176		62,855
Cost of revenue		10,894		32,443		19,561		5,705		25,266
Depreciation of rental equipment		1,137		19,696		15,889		1,055		16,944
Gross Profit	13,317	$	3,025	$	16,342	$	18,229	$	2,416	$	20,645

All values are in US Dollars.

										Six Months Ended June 30,
										2019
		PTA		Total		ERS		PTA		Total
(in 000s)
Rental revenue	90,078	$	7,900	$	97,978	$	87,762	$	6,005	$	93,767
Sales of rental equipment		—		14,075		11,731		—		11,731
Sales of new equipment		—		12,995		6,830		—		6,830
Parts sales and services		25,176		25,176		—		12,019		12,019
Total revenues		33,076		150,224		106,323		18,024		124,347
Cost of revenue		23,802		72,671		38,215		11,460		49,675
Depreciation of rental equipment		2,273		39,808		31,550		2,125		33,675
Gross Profit	30,744	$	7,001	$	37,745	$	36,558	$	4,439	$	40,997

All values are in US Dollars.

Net Capital Expenditures (unaudited)

	Six Months Ended June 30,
(in $000s)	2020		2019
Purchase of equipment - rental fleet	$	55,421	$	51,734
Purchase of other property and equipment	1,089		3,655
Total Capital Expenditures	56,510		55,389
Less: Proceeds from sale of rental equipment and parts	(19,005)		(18,187)
Less: Insurance proceeds from damaged equipment	(2,191)		$	(1,427)
Net Capital Expenditures	$	35,314	$	35,775

Free Cash Flow (unaudited)

	Six Months Ended June 30,
(in $000s)	2020		2019
Net cash flow from operating activities	$	19,669	$	5,177
Less: Net capital expenditures	(35,314)		(35,775)
Free Cash Flow	$	(13,625)	$	(28,579)