Custom Truck One Source, Inc 10-Q for FY2023 Q1

Custom Truck One Source, Inc. (CTOS)

10-Q 2023-05-09 For: 2023-03-31

Added on April 04, 2026

About this 10-Q

Custom Truck One Source, Inc filed this 10-Q on May 9, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $452.16M; up 23.4% from $366.48M a year earlier
Net income: $13.8M; compared with a net loss of $3.27M a year earlier
Diluted EPS: $0.06; compared with -$0.01 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Delaware			84-2531628
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	CTOS	New York Stock Exchange
Redeemable warrants, exercisable for Common Stock, $0.0001 par value per share	CTOS.WS	New York Stock Exchange


(in $000s, except share data)	March 31, 2023		December 31, 2022
Assets
Current Assets
Cash and cash equivalents	$	32,218	$	14,360
Accounts receivable, net	167,640		193,106
Financing receivables, net	46,122		38,271
Inventory	714,354		596,724
Prepaid expenses and other	29,462		25,784
Total current assets	989,796		868,245
Property and equipment, net	128,839		121,956
Rental equipment, net	894,557		883,674
Goodwill	703,848		703,827
Intangible assets, net	297,486		304,132
Operating lease assets	28,509		29,434
Other assets	26,348		26,944
Total Assets	$	3,069,383	$	2,938,212
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	126,041	$	87,255
Accrued expenses	70,113		68,784
Deferred revenue and customer deposits	32,360		34,671
Floor plan payables - trade	159,029		136,634
Floor plan payables - non-trade	312,470		293,536
Operating lease liabilities - current	5,220		5,262
Current maturities of long-term debt	5,243		6,940
Current portion of finance lease obligations	852		1,796
Total current liabilities	711,328		634,878
Long-term debt, net	1,394,039		1,354,766
Finance leases	3,142		3,206
Operating lease liabilities - noncurrent	23,932		24,818
Deferred income taxes	29,615		29,086
Derivative, warrants and other liabilities	2,490		3,015
Total long-term liabilities	1,453,218		1,414,891
Commitments and contingencies (see Note 15)
Stockholders' Equity
Common stock — $0.0001 par value, 500,000,000 shares authorized, 248,441,588 and 248,311,104 shares issued and outstanding, at March 31, 2023 and December 31, 2022, respectively	25		25
Treasury stock, at cost — 2,427,395 and 2,241,069 shares at March 31, 2023 and December 31, 2022, respectively	(16,736)		(15,537)
Additional paid-in capital	1,524,938		1,521,487
Accumulated other comprehensive loss	(8,605)		(8,947)
Accumulated deficit	(594,785)		(608,585)
Total stockholders' equity	904,837		888,443
Total Liabilities and Stockholders' Equity	$	3,069,383	$	2,938,212


	Three Months Ended March 31,
(in $000s, except per share data)	2023		2022
Revenue
Rental revenue	$	118,288	$	109,145
Equipment sales	301,290		227,186
Parts sales and services	32,585		30,145
Total revenue	452,163		366,476
Cost of Revenue
Cost of rental revenue	29,899		25,793
Depreciation of rental equipment	40,330		44,964
Cost of equipment sales	246,125		187,278
Cost of parts sales and services	26,148		23,948
Total cost of revenue	342,502		281,983
Gross Profit	109,661		84,493
Operating Expenses
Selling, general and administrative expenses	56,991		53,655
Amortization	6,672		13,335
Non-rental depreciation	2,650		3,047
Transaction expenses and other	3,460		4,648

Total operating expenses	69,773		74,685
Operating Income (Loss)	39,888		9,808
Other Expense

Interest expense, net	29,176		19,156
Financing and other expense (income)	(3,951)		(9,080)
Total other expense	25,225		10,076
Income (Loss) Before Income Taxes	14,663		(268)
Income Tax Expense (Benefit)	863		3,005
Net Income (Loss)	$	13,800	$	(3,273)

Other Comprehensive Income (Loss):
Unrealized foreign currency translation adjustments	$	342	$	—
Other Comprehensive Income (Loss)	342		—
Comprehensive Income (Loss)	$	14,142	$	(3,273)

Net Income (Loss) Per Share:
Basic	$	0.06	$	(0.01)
Diluted	$	0.06	$	(0.01)
Weighted-Average Common Shares Outstanding:
Basic (in thousands)	246,049		247,058
Diluted (in thousands)	247,053		247,058


	Three Months Ended March 31,
(in $000s)	2023		2022
Operating Activities
Net income (loss)	$	13,800	$	(3,273)
Adjustments to reconcile net income (loss) to net cash flow from operating activities:
Depreciation and amortization	52,091		62,500
Amortization of debt issuance costs	2,407		1,326

Provision for losses on accounts receivable	1,872		2,811
Share-based compensation	3,147		3,364
Gain on sales and disposals of rental equipment	(21,320)		(5,420)


Change in fair value of derivative and warrants	(525)		(5,767)

Deferred tax expense	514		2,849
Changes in assets and liabilities:

Accounts and financing receivables	17,161		(33,520)
Inventories	(117,580)		(51,384)
Prepaids, operating leases and other	(4,987)		(4,637)

Accounts payable	35,916		29,869
Accrued expenses and other liabilities	1,328		(5,343)
Floor plan payables - trade, net	22,395		(13,031)
Customer deposits and deferred revenue	(2,313)		(10,115)
Net cash flow from operating activities	3,906		(29,771)
Investing Activities
Acquisition of business, net of cash acquired	—		(50,513)
Purchases of rental equipment	(109,145)		(45,945)
Proceeds from sales and disposals of rental equipment	78,626		49,961

Purchase of non-rental property and cloud computing arrangements	(9,429)		(1,961)

Net cash flow from investing activities	(39,948)		(48,458)
Financing Activities
Proceeds from debt	13,537		75



Share-based payments	228		(6)
Borrowings under revolving credit facilities	35,000		50,000
Repayments under revolving credit facilities	(10,331)		(34,844)
Repayments of notes payable	(2,020)		(1,872)
Finance lease payments	(377)		(2,275)
Repurchase of common stock	(1,122)		—
Acquisition of inventory through floor plan payables - non-trade	187,381		140,126
Repayment of floor plan payables - non-trade	(168,447)		(85,066)


Net cash flow from financing activities	53,849		66,138
Effect of exchange rate changes on cash and cash equivalents	51		—
Net Change in Cash and Cash Equivalents	17,858		(12,091)
Cash and Cash Equivalents at Beginning of Period	14,360		35,902
Cash and Cash Equivalents at End of Period	$	32,218	$	23,811




☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	Shares		Common Stock		Treasury Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity (Deficit)
(in $000s, except share data)	Common	Treasury
Balance, December 31, 2022	248,311,104	(2,241,069)	$	25	$	(15,537)	$	1,521,487	$	(8,947)	$	(608,585)	$	888,443
Net income (loss)	—	—	—		—		—		—		13,800		13,800
Other Comprehensive Income	—	—	—		—		—		342		—		342
Common stock repurchase	—	(174,744)	—		(1,122)		—		—		—		(1,122)
Share-based payments	130,484	(11,582)	—		(77)		3,451		—		—		3,374
Balance, March 31, 2023	248,441,588	(2,427,395)	$	25	$	(16,736)	$	1,524,938	$	(8,605)	$	(594,785)	$	904,837











			Common Stock		Treasury Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity (Deficit)
	Shares
(in $000s, except share data)	Common	Treasury
Balance, December 31, 2021	247,358,412	(318,086)	$	25	$	(3,020)	$	1,508,995	$	—	$	(647,490)	$	858,510
Net income (loss)	—	—	—		—		—		—		(3,273)		(3,273)
Share-based payments	102,630	(21,505)	—		(287)		3,559		—		—		3,272
Balance, March 31, 2022	247,461,042	(339,591)	$	25	$	(3,307)	$	1,512,554	$	—	$	(650,763)	$	858,509


(in $000s)	January 14, 2022		Changes		December 31, 2022
Current assets	$	2,891	$	956	$	3,847
Property, equipment and other assets	819		—		819
Rental equipment	34,224		—		34,224
Total identifiable assets acquired	37,934		956		38,890

Total identifiable liabilities assumed	(6,011)		(1,596)		(7,607)
Total net assets	31,923		(640)		31,283
Goodwill	8,685		(41)		8,644
Intangible assets	11,027		—		11,027
Net assets acquired (purchase price)	51,635		(681)		50,954
Less: cash acquired	(1,122)		—		(1,122)
Net cash paid	$	50,513	$	(681)	$	49,832


	Three Months Ended March 31, 2023					Three Months Ended March 31, 2022
(in $000s, except per share data)	Net Income (Loss)		Weighted Average Shares	Per Share Amount		Net Income (Loss)		Weighted Average Shares	Per Share Amount
Basic earnings (loss) per share	$	13,800	246,049	$	0.06	$	(3,273)	247,058	$	(0.01)
Dilutive common share equivalents			1,004					—
Diluted earnings (loss) per share	$	13,800	247,053	$	0.06	$	(3,273)	247,058	$	(0.01)


	Carrying Value		Fair Value
(in $000s)			Level 1		Level 2		Level 3
March 31, 2023
ABL Facility	$	462,400	$	—	$	462,400	$	—
2029 Secured Notes	920,000		—		805,000		—
2023 Credit Facility	13,725		—		13,725		—
Other notes payable	29,716		—		29,716		—
Warrant liabilities	2,487		—		—		2,487

December 31, 2022
ABL Facility	$	437,731	$	—	$	437,731	$	—
2029 Secured Notes	920,000		—		814,200		—
Other notes payable	31,661		—		31,661		—
Warrant liabilities	3,012		—		—		3,012


	Three Months Ended
(in $000s)	March 31, 2023		% of revenue	March 31, 2022		% of revenue	$ Change		% change	December 31, 2022		% of revenue
Rental revenue	$	118,288	26.2%	$	109,145	29.8%	$	9,143	8.4%	$	127,829	26.3%
Equipment sales	301,290		66.6%	227,186		62.0%	74,104		32.6%	325,746		66.9%
Parts sales and services	32,585		7.2%	30,145		8.2%	2,440		8.1%	33,149		6.8%
Total revenue	452,163		100.0%	366,476		100.0%	85,687		23.4%	486,724		100.0%
Cost of revenue, excluding rental equipment depreciation	302,172		66.8%	237,019		64.7%	65,153		27.5%	317,596		65.3%
Depreciation of rental equipment	40,330		8.9%	44,964		12.3%	(4,634)		(10.3)%	40,803		8.4%
Gross profit	109,661		24.3%	84,493		23.1%	25,168		29.8%	128,325		26.4%
Operating expenses	69,773			74,685			(4,912)			76,677
Operating income (loss)	39,888			9,808			30,080			51,648
Total other expense	25,225			10,076			15,149			20,157
Income (loss) before income taxes	14,663			(268)			14,931			31,491
Income tax expense (benefit)	863			3,005			(2,142)			554
Net income (loss)	$	13,800		$	(3,273)		$	17,073		$	30,937


ISSUER PURCHASES OF EQUITY SECURITIES
Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in $000s)
January 1, 2023 - January 31, 2023	65,178	$	6.37	64,535	$	19,311
February 1, 2023 - February 28, 2023	—	$	—	—	$	19,311
March 1, 2023 - March 31, 2023	153,509	$	6.44	142,570	$	18,394
Total	218,687	$	6.42	207,105




		CUSTOM TRUCK ONE SOURCE, INC. (Registrant)

Date:	May 9, 2023	/s/ Ryan McMonagle
		Ryan McMonagle, Chief Executive Officer

Date:	May 9, 2023	/s/ Christopher J. Eperjesy
		Christopher J. Eperjesy, Chief Financial Officer



1			I have reviewed this Quarterly Report on Form 10-Q of Custom Truck One Source, Inc. for the quarterly period ended March 31, 2023;


	Three Months Ended
(in $000s)	March 31, 2023			March 31, 2022			Change			% Change		December 31, 2022			% Change
Ending OEC	$	1,457,870		$	1,364,660		$	93,210		6.8	%	$	1,455,820		0.1	%
Average OEC on rent	$	1,214,300		$	1,119,100		$	95,200		8.5	%	$	1,267,600		(4.2)	%
Fleet utilization	83.6		%	82.5		%	1.1		%	1.3	%	86.3		%	(3.1)	%
OEC on rent yield	39.6		%	39.1		%	0.5		%	1.3	%	39.5		%	0.3	%
Sales order backlog	$	855,049		$	586,368		$	268,681		45.8	%	$	754,142		13.4	%


	Three Months Ended
(in $000s)	March 31, 2023		March 31, 2022		$ Change		% Change		December 31, 2022		% Change
Net income (loss)	$	13,800	$	(3,273)	$	17,073	521.6	%	$	30,937	(55.4)	%
Interest expense	22,363		17,445		4,918		28.2	%	21,432		4.3	%
Income tax expense (benefit)	863		3,005		(2,142)		71.3	%	554		55.8	%
Depreciation and amortization	52,090		62,500		(10,410)		(16.7)	%	52,362		(0.5)	%
EBITDA	89,116		79,677		9,439		11.8	%	105,285		(15.4)	%
Adjustments:
Non-cash purchase accounting impact (1)	7,199		9,026		(1,827)		(20.2)	%	8,268		(12.9)	%
Transaction and integration costs (2)	3,460		4,648		(1,188)		(25.6)	%	9,026		(61.7)	%


Sales-type lease adjustment (3)	2,803		529		2,274		429.9	%	1,411		98.7	%
Share-based payments (4)	3,147		3,364		(217)		(6.5)	%	2,771		13.6	%
Change in fair value of derivative and warrants (5)	(525)		(5,767)		5,242		90.9	%	(2,277)		(76.9)	%
Adjusted EBITDA	$	105,200	$	91,477	$	13,723	15.0	%	$	124,484	(15.5)	%


	Three Months Ended
(in $000s)	March 31, 2023		March 31, 2022		$ Change		% Change		December 31, 2022		$ Change
Rental revenue	$	113,784	$	105,561	$	8,223	7.8	%	$	123,429	(7.8)	%
Equipment sales	92,136		59,353		32,783		55.2	%	78,472		17.4	%
Total revenue	205,920		164,914		41,006		24.9	%	201,901		2.0	%
Cost of rental revenue	29,060		24,791		4,269		17.2	%	26,735		8.7	%
Cost of equipment sales	71,081		43,230		27,851		64.4	%	57,504		23.6	%
Depreciation of rental equipment	39,512		43,966		(4,454)		(10.1)	%	39,836		(0.8)	%
Total cost of revenue	139,653		111,987		27,666		24.7	%	124,075		12.6	%
Gross profit	$	66,267	$	52,927	$	13,340	25.2	%	$	77,826	(14.9)	%



2			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4			The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:



a.			Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



b.			Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



c.			Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



d.			Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and



a.			All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and



b.			Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.





May 9, 2023			/s/ Ryan McMonagle
			Ryan McMonagle
			Chief Executive Officer


May 9, 2023			/s/ Christopher J. Eperjesy
			Christopher J. Eperjesy
			Chief Financial Officer