Custom Truck One Source Inc
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
CTOS$9.33+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0001709682-24-000037
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001709682-24-000053
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 107 previous paragraphs and 122 current paragraphs.
77 unchanged; 28 reworded; 17 added; 1 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Three and six months ended June 30, 2024, compared to the same periods in 2023
Current report
Total Revenue - The decrease in total revenue for the three and six months ended June 30, 2024, compared to the same periods in 2023 was due to a decrease in rental revenue due to lower utilization and a decline in average OEC on rent, as well as a decrease in equipment sales due to lower rental asset sales of used equipment. The Company continues to be impacted by end-market supply chain constraints, environmental, regulatory and customer financing factors affecting the timing of transmission job starts. These delays contributed to both lower rental revenue and rental asset sales during this quarter.
Current report
Cost of Equipment Sales - Cost of equipment sales slightly increased for the three months ended June 30, 2024, compared to the same period in 2023 as a result of higher costs of materials and components.
Current report
Gross Profit - The decrease in gross profit for the three months ended June 30, 2024, compared to the same period in 2023, was due to the decline in pricing for equipment sales and increase in costs due to inflation.
Current report
(1) The following tables present the calculation of LTM Adjusted EBITDA for the periods ended June 30, 2024 and March 31, 2024:
Current report
Critical Accounting Estimates
Current report
Our discussion and analysis of our financial condition, results of operations, liquidity and capital resources is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. GAAP requires that we make estimates and judgments that affect the reported amount of assets, liabilities, revenue, expenses and the related disclosure of contingent assets and liabilities. We base these estimates on historical experience and on various other assumptions that we consider reasonable under the circumstances and reevaluate our estimates and judgments as appropriate. The actual results experienced by us may differ materially and adversely from our estimates. For a complete discussion of our significant critical accounting estimates, see the “Critical Accounting Estimates” section in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. Except as discussed below, there were no significant changes to our critical accounting estimates during the three months ended June 30, 2024.
Current report
Goodwill and the Evaluation of Goodwill Impairment
Current report
Goodwill represents the excess of cost over the fair value of identifiable net assets of businesses acquired and goodwill is assigned to each of our reporting units, which are ERS, TES and APS. The following presents the amount of goodwill by reporting unit as of June 30, 2024 and December 31, 2023:
Current report
We perform our assessment of goodwill impairment utilizing either a qualitative or quantitative impairment test, and we perform our test at least annually. Our annual assessment date is October 1 and we perform impairment tests in interim periods (e.g., other than October 1) when factors are identified that could indicate goodwill of any of our reporting units may be impaired. Examples of such factors may include a significant adverse change in business climate, weakness in an industry in which our reporting units operate or recent significant cash or operating losses with expectations that those losses will continue. The qualitative and quantitative impairment tests are described further below.
Current report
Qualitative Impairment Test – The qualitative impairment test assesses company-specific, industry, market and general economic factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or we elect not to use the qualitative impairment test, a quantitative impairment test is performed.
Current report
Quantitative Impairment Test – The quantitative impairment test involves a comparison of the estimated fair value of a reporting unit to its carrying amount with the fair value of a reporting being unit being estimated by using a discounted cash flow model (the “income approach”) that calculates fair value as the present value of expected cash flows of the reporting unit. Additionally, a market analysis is performed that encompasses an analysis of comparable publicly-traded companies (the “market approach”).
Current report
Determining the fair value of a reporting unit requires judgment and the use of significant estimates that include assumptions about the reporting unit’s future revenue (considering expectations about rental and sales volumes and prices as well as capital spending related to the end-markets we serve), profitability and cash flows, long-term growth rates, amount and timing of estimated capital expenditures, inflation rates, risk adjusted cost of capital, operational plans, and current and future economic conditions, among other assumptions. The fair value of each reporting unit is determined using a weighted combination of the income and market approaches. We believe that the estimates and assumptions used in our impairment assessments are reasonable and based on available market information. We use a discounted cash flow methodology for the income approach. Under the income approach, the discounted cash flow model determines fair value based on the present value of projected cash flows over a specified period and a residual value related to future cash flows beyond the projection period. Both values are discounted using a rate that reflects the best estimate of the risk adjusted cost of capital at each reporting unit.
Current report
In performing our interim impairment test for the ERS and APS reporting unit, we utilized the following estimates and assumptions:
Current report
•The risk adjusted cost of capital varies by reporting unit and was in the range of 10.0% to 10.5% and represents our estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise.
Current report
•Our projections were based on our assessment of macroeconomic variables, industry trends and market opportunities, as well as our strategic objectives and future growth plans. Revenue growth rates assumed ranged from approximately 5% to 7% for 2025 and from approximately 3% to 8% for 2026 and beyond.
Current report
As a result of completing our interim quantitative impairment test, we determined that the fair value of the ERS and APS reporting units exceeded their carrying values by 23% and 17%, respectively. While there is no “bright line” to determine whether or not a reporting unit’s fair value is substantially in excess of its carrying amount (“cushion”), significant adverse changes in business climate, weakness in an industry in which our reporting units operate (for example, electric utility T&D, telecom, rail and general infrastructure) or significant cash or operating losses and changes in expectations of profitability could reduce the amounts of cushion applicable to our reporting units and result in impairment of one or more of our reporting units’ goodwill.
Removed paragraphs (1)
Previous report
Total Revenue - Total revenue was $411.3 million for the three months ended March 31, 2024, compared to $452.2 million in the same period of 2023. Rental revenue decreased 10.2% to $106.2 million, compared to $118.3 million in the first quarter of 2023, due to lower utilization and a decline in average OEC on rent. Equipment sales decreased 9.5% in the first quarter of 2024 to $272.6 million, compared to $301.3 million in the first quarter of 2023, primarily driven by lower sales of used equipment due to excess supply of equipment available in the market.
Reworded paragraphs (28)
Previous wording
•disruptions or security compromises affecting our information technology systems or those of our critical service providers could adversely affect our operating results by subjecting us to liability, and limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, or implement strategic initiatives;
Current wording
•disruptions or security compromises affecting our information technology systems or those of our critical services providers could adversely affect our operating results by subjecting us to liability, and limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, or implement strategic initiatives;
Previous wording
Financing and other expense (income) — Financing and other expense (income) reflects the financing expense (income) associated with lease agreements qualifying to be accounted for as a sales-type lease, foreign currency gains and losses related to our Canadian operations, as well as other miscellaneous gains or losses from non-operating activities. Also included in financing and other expense (income) are the unrealized remeasurement gains and losses related to our redeemable warrants.
Current wording
Financing and other expense (income) — Financing and other expense (income) reflects the financing expense (income) associated with lease agreements qualifying to be accounted for as a sales-type lease, foreign currency gains and losses related to our Canadian operations, as well as other miscellaneous gains or losses from non-operating activities. Also included in financing and other expense (income) are the unrealized remeasurement gains and losses related to derivative financial instruments.
Previous wording
Equipment Rental Solutions (“ERS”) Segment — We own a broad range of new and used specialty equipment, including truck-mounted aerial lifts, cranes, service trucks, dump trucks, trailers, digger derricks and other machinery and equipment. As of March 31, 2024, this equipment (the “rental fleet”) is comprised of approximately 10,300 units. The majority of our rental fleet can be used across a variety of end-markets, which coincides with the needs of many of our customers who operate in multiple end-markets. As is customary for equipment rental companies, we sell used equipment out of our rental fleet to end user customers. These sales are often made in response to specific customer requests. These sales offer customers an opportunity to buy well-maintained equipment with long remaining useful lives and enable us to effectively manage the age and mix of our rental fleet to match current market demand. We also employ rental purchase options (“RPOs”) on a select basis, which provide a buyout option with an established purchase price that decreases over time as rental revenue is collected. Customers are given credit against such purchase price for a portion of the amounts paid over the life of the rental, allowing customers the flexibility of a rental with the option to purchase at any time at a known price. Activities in our ERS segment consist of the rental and sale from the rental fleet of the foregoing products.
Current wording
Equipment Rental Solutions (“ERS”) Segment — We own a broad range of new and used specialty equipment, including truck-mounted aerial lifts, cranes, service trucks, dump trucks, trailers, digger derricks and other machinery and equipment. As of June 30, 2024, this equipment (the “rental fleet”) is comprised of approximately 10,200 units. The majority of our rental fleet can be used across a variety of end-markets, which coincides with the needs of many of our customers who operate in multiple end-markets. As is customary for equipment rental companies, we sell used equipment out of our rental fleet to end user customers. These sales are often made in response to specific customer requests. These sales offer customers an opportunity to buy well-maintained equipment with long remaining useful lives and enable us to effectively manage the age and mix of our rental fleet to match current market demand. We also employ rental purchase options (“RPOs”) on a select basis, which provide a buyout option with an established purchase price that decreases over time as rental revenue is collected. Customers are given credit against such purchase price for a portion of the amounts paid over the life of the rental, allowing customers the flexibility of a rental with the option to purchase at any time at a known price. Activities in our ERS segment consist of the rental and sale from the rental fleet of the foregoing products.
Previous wording
Cost of Revenue, Excluding Rental Equipment Depreciation - The decrease in cost of revenue, excluding rental equipment depreciation for the three months ended March 31, 2024, compared to the same period in 2023, was driven primarily by the decrease in rental equipment sales volume.
Current wording
Cost of Revenue, Excluding Rental Equipment Depreciation - The decrease in cost of revenue, excluding rental equipment depreciation for the three and six months ended June 30, 2024, compared to the same periods in 2023, was driven primarily by the decrease in equipment sales volume.
Previous wording
Depreciation of Rental Equipment - Depreciation of our rental fleet increased in the three months ended March 31, 2024, compared to the same period in 2023, as a result of higher rental equipment levels.
Current wording
Depreciation of Rental Equipment - Depreciation of our rental equipment increased in the three and six months ended June 30, 2024, compared to the same periods in 2023, as a result of higher rental equipment levels.
Previous wording
Operating Expenses - Operating expenses increased in the three months ended March 31, 2024, compared to the same period in 2023, primarily as a result of an increase in general and administrative expenses due to increased headcount and wages, increased insurance due to higher inventory levels and rental assets, and additional expense associated with various information technology projects.
Current wording
Operating Expenses - Operating expenses increased in the three and six months ended June 30, 2024, compared to the same periods in 2023, primarily as a result of an increase in general and administrative expenses due to increased headcount and wages, increased insurance due to higher inventory levels and rental assets, and additional expense associated with various information technology projects.
Previous wording
Total Other Expense - Other expense increased for the three months ended March 31, 2024, compared to the same period in 2023, primarily due to the increase in interest expense from variable rate debt and floor plan financing liabilities.
Current wording
Total Other Expense - Other expense increased for the three and six months ended June 30, 2024, compared to the same periods in 2023, primarily due to the increase in interest expense from variable rate debt and floor plan financing liabilities.
Previous wording
Income Tax Expense (Benefit) - Income tax benefit for the three months ended March 31, 2024 was $1.9 million, resulting in an effective tax rate of (12.0)%, compared to income tax expense for the three months ended March 31, 2023 of $0.9 million, respectively, at an effective tax rate of 5.9%. The decrease in the effective tax rate was primarily due to a pretax loss in the current period.
Current wording
Income Tax Expense (Benefit) - Income tax expense for the three and six months ended June 30, 2024 was $3.1 million and $1.1 million, respectively, resulting in an effective tax rate of (14.3)% and (3.0)%. Income tax expense for the three and six months ended June 30, 2023 was $1.4 million and $2.3 million, respectively, at an effective tax rate of 10.7% and 8.0%. The changes in the effective tax rates were primarily due to state and local income tax updates enacted during the current periods.
Previous wording
Net Income (loss) - The change in net income to a net loss for the three months ended March 31, 2024, compared to the same period in 2023, was primarily the result of lower revenues leading to decreased gross profit and higher interest expense on variable-rate debt and variable-rate floor plan liabilities.
Current wording
Net Income (loss) - The change in net income to a net loss for the three and six months ended June 30, 2024, compared to the same periods in 2023, was primarily the result of lower revenues leading to decreased gross profit and higher interest expense on variable-rate debt and variable-rate floor plan liabilities.
Previous wording
Total Revenue - Total revenue for the ERS segment for the three months ended March 31, 2024 was $136.0 million, compared to $205.9 million for the same period in 2023. Equipment sales decreased $59.4 million in the first quarter of 2024 to $32.7 million, compared to $92.1 million in the first quarter of 2023, due to excess supply of used equipment available in the market. Rental revenue in the first quarter of 2024 was $103.3 million compared to $113.8 million in the first quarter of 2023, a 9.2% decrease as a result of a reduction in fleet utilization to 73.3% compared to 83.6% in the first quarter of 2023. Fleet utilization decreased due to a decline in demand in the utility market as a result of supply chain constraints, environmental, regulatory, and customer financing factors affecting the timing of transmission job starts. Average OEC on rent decreased 12.2% year-over-year, primarily as a result of the lower utilization in the quarter.
Current wording
Total Revenue - The decrease in total revenue for the ERS segment for the three and six months ended June 30, 2024, compared to the same periods in 2023, was driven by a decrease in equipment sales due to fewer rental asset sales of used equipment, as well as a decrease in rental revenue as a result of a reduction in fleet utilization of 10.0% for both the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. Fleet utilization decreased due to a decline in demand in the utility market as a result of supply chain constraints, environmental, regulatory, and customer financing factors affecting the timing of transmission job starts. For the three and six months ended June 30, 2024, average OEC on rent decreased 13.2% and 12.7%, respectively, compared to the same periods in 2023, primarily as a result of the lower utilization in the quarter.
Previous wording
Cost of Revenue - The decrease in total cost of revenue for the three months ended March 31, 2024, compared to the same period in 2023, was largely due to the decrease in rental equipment sales volume.
Current wording
Cost of Revenue - The decrease in total cost of revenue for the three and six months ended June 30, 2024, compared to the same periods in 2023, was largely due to the decrease in rental equipment sales volume.
Previous wording
Depreciation - Depreciation of our rental fleet increased for the three months ended March 31, 2024, compared to the same period in 2023, as a result of higher rental equipment levels.
Current wording
Depreciation - Depreciation of our rental equipment increased for the three and six months ended June 30, 2024, compared to the same periods in 2023, as a result of higher rental equipment levels.
Previous wording
Gross Profit - The decrease in gross profit for the three months ended March 31, 2024, compared to the same period in 2023, was due to the decrease in rental revenues and equipment sales for the period.
Current wording
Gross Profit - The decrease in gross profit for the three and six months ended June 30, 2024, compared to the same periods in 2023, was due to the decrease in rental revenues and equipment sales for the period.
Previous wording
Three months ended March 31, 2024, compared to the same period in 2023
Current wording
Equipment Sales - Equipment sales decreased for the three months ended June 30, 2024, compared to the same period in 2023, primarily due to lower volume of sales as a consequence of the softness in the utility end-market.
Previous wording
Equipment Sales - Equipment sales increased for the three months ended March 31, 2024, compared to the same period in 2023, primarily as a result of exiting 2023 with healthy inventory levels due to the supply chain improvements experienced in 2023 and historically high backlog levels that improved our ability to produce and deliver more units during the first quarter of 2024.
Current wording
Equipment sales increased for the six months ended June 30, 2024, compared to the same period in 2023, primarily as a result of exiting 2023 with healthy inventory levels due to the supply chain improvements experienced in 2023 and historically high backlog levels that improved our ability to produce and deliver more units during the first quarter of 2024.
Previous wording
Cost of Equipment Sales - Cost of equipment sales increased for the three months ended March 31, 2024, compared to the same period in 2023, due to the increase in equipment sales volume.
Current wording
Cost of equipment sales increased for the six months ended June 30, 2024, compared to the same period in 2023, due to the increase in equipment sales volume.
Previous wording
Gross Profit - The increase in gross profit for the three months ended March 31, 2024, compared to the same period in 2023, is reflective of the positive demand and pricing environment for new products.
Current wording
The increase in gross profit for the six months ended June 30, 2024, compared to the same period in 2023, was reflective of the positive demand and pricing environment for new products during the first quarter of the year.
Previous wording
Total Revenue - Total revenue decreased for the three months ended March 31, 2024, compared to the same period in 2023 due to the decrease in rentals of tools and accessories affected by the utility end-market softness.
Current wording
Total Revenue - Total revenue decreased for the three and six months ended June 30, 2024, compared to the same periods in 2023, due to the decrease in rentals of tools and accessories affected by the utility end-market softness.
Previous wording
Cost of Revenue - Cost of revenue decreased for the three months ended March 31, 2024, compared to the same period in 2023, commensurate with the decrease in volume of parts sales and rental activity.
Current wording
Cost of Revenue - Cost of revenue increased for the three and six months ended June 30, 2024, compared to the same periods in 2023, as a result of higher costs of materials.
Previous wording
Gross Profit - The decrease in gross profit for the three months ended March 31, 2024, compared to the same period in 2023, was primarily driven by the decrease in rentals as discussed above.
Current wording
Gross Profit - The decrease in gross profit for the three and six months ended June 30, 2024, compared to the same periods in 2023, was primarily driven by the decrease in tools and accessories rentals with an increase in maintenance expense driving gross profit down.
Previous wording
Our principal sources of liquidity include cash generated by operating activities and borrowings under revolving credit facilities as described below. We believe that our liquidity sources and operating cash flows are sufficient to address our operating, debt service and capital requirements, including investments in our rental fleet, over the next 12 months. As of March 31, 2024, we had $8.0 million in cash and cash equivalents compared to $10.3 million as of December 31, 2023. As of both March 31, 2024 and December 31, 2023, we had $552.4 million of outstanding borrowings under our ABL Facility. Availability under the senior secured credit facility was $194.5 million as of March 31, 2024, and based on our borrowing base, we have an additional $331.9 million of suppressed availability that we can potentially utilize by upsizing our existing facility.
Current wording
Our principal sources of liquidity include cash generated by operating activities and borrowings under revolving credit facilities as described below. We believe that our liquidity sources and operating cash flows are sufficient to address our operating, debt service and capital requirements, including investments in our rental fleet, over the next 12 months. As of June 30, 2024, we had $8.1 million in cash and cash equivalents compared to $10.3 million as of December 31, 2023. As of June 30, 2024 and December 31, 2023, we had $587.4 million and $552.4 million of outstanding borrowings under our ABL Facility, respectively. Availability under the senior secured credit facility was $159.5 million as of June 30, 2024, and based on our borrowing base, we have an additional $328.3 million of suppressed availability that we can potentially utilize by upsizing our existing facility.
Previous wording
Company’s restricted subsidiaries to pay dividends; create liens; transfer or sell assets; consolidate, merge, sell, or otherwise dispose of all or substantially all of the Company’s assets; enter into certain transactions with the Company’s affiliates; and designate subsidiaries as unrestricted subsidiaries, in each case subject to certain exceptions, as well as a restrictive covenant applicable to each Specified Floor Plan Company (as defined in the ABL Credit Agreement) limiting its ability to own certain assets and engage in certain lines of business. The covenants governing the payment of dividends and making other distributions are based upon a combination of fixed amounts, percentages of Adjusted EBITDA or upon multiple pro forma measures depending on the purpose of any such dividend payments or distributions the Company and its restricted subsidiaries are permitted to make. Unlimited dividends under the ABL Facility may be permitted so long as, on a pro forma basis, “distribution conditions” (as defined in the ABL Credit Agreement governing the ABL Facility) are satisfied. As of March 31, 2024, the Company’s distribution conditions were satisfied and, as a result, the Company determined there were no restrictions on distributions by the ABL Credit Agreement.
Current wording
The ABL Facility contains customary negative covenants for transactions of this type, including covenants that, among other things, limit the Company and its restricted subsidiaries’ ability to: incur additional indebtedness; pay dividends, redeem stock, or make other distributions; repurchase, prepay or redeem subordinated indebtedness; make investments; create restrictions on the ability of Company’s restricted subsidiaries to pay dividends; create liens; transfer or sell assets; consolidate, merge, sell, or otherwise dispose of all or substantially all of the Company’s assets; enter into certain transactions with the Company’s affiliates; and designate subsidiaries as unrestricted subsidiaries, in each case subject to certain exceptions, as well as a restrictive covenant applicable to each Specified Floor Plan Company (as defined in the ABL Credit Agreement) limiting its ability to own certain assets and engage in certain lines of business. The covenants governing the payment of dividends and making other distributions are based upon a combination of fixed amounts, percentages of Adjusted EBITDA or upon multiple pro forma measures depending on the purpose of any such dividend payments or distributions the Company and its restricted subsidiaries are permitted to make. Unlimited dividends under the ABL Facility may be permitted so long as, on a pro forma basis, “distribution conditions” (as defined in the ABL Credit Agreement governing the ABL Facility) are satisfied. As of June 30, 2024, the Company’s distribution conditions were satisfied and, as a result, the Company determined there were no restrictions on distributions by the ABL Credit Agreement.
Previous wording
The Company presents Net Leverage Ratio, which is equivalent to Consolidated Total Net Leverage Ratio in our ABL Credit Agreement and Consolidated Total Debt Ratio in the Indenture, is defined as Net Debt over Adjusted EBITDA. Net debt is defined as total debt (calculated as current and long-term debt, excluding deferred financing fees, plus current and long-term finance lease obligations) minus cash and cash equivalents.
Current wording
The Company presents Net Leverage Ratio, which is equivalent to Consolidated Total Net Leverage Ratio in our ABL Credit Agreement and Consolidated Total Debt Ratio in the Indenture, is defined as Net Debt over Adjusted EBITDA for the previous twelve-month period (“last twelve months,” or “LTM”). Net debt is defined as total debt (calculated as current and long-term debt, excluding deferred financing fees, plus current and long-term finance lease obligations) minus cash and cash equivalents.
Previous wording
The following table provides the calculation of Adjusted EBITDA pursuant to the ABL Credit Agreement and the Indenture for the three months ended March 31, 2024 and March 31, 2023, as well as December 31, 2023.
Current wording
The following table provides the calculation of Adjusted EBITDA pursuant to the ABL Credit Agreement and the Indenture.
Previous wording
As of March 31, 2024, we had cash and cash equivalents of $8.0 million, a decrease of $2.3 million from December 31, 2023. Generally, we manage our cash flow by using any excess cash, after considering our working capital and capital expenditure needs, including paying down the outstanding balance under our ABL Facility, and availability under our credit facilities.
Current wording
As of June 30, 2024, we had cash and cash equivalents of $8.1 million, a decrease of $2.3 million from December 31, 2023. Generally, we manage our cash flow by using any excess cash, after considering our working capital and capital expenditure needs, including paying down the outstanding balance under our ABL Facility, and availability under our credit facilities.
Previous wording
Net cash used in operating activities was $14.4 million for the three months ended March 31, 2024, as compared to net cash provided by operating activities of $3.9 million in the same period in 2023. The use of cash in the current period is the result of our increased levels of inventory purchases and production.
Current wording
Net cash from operating activities was $23.4 million for the six months ended June 30, 2024, as compared to net cash used in operating activities of $1.1 million in the same period of 2023. The cash provided by operating activities in the current period is the result of the increase in floorplan trade financing for inventory purchases.
Previous wording
Net cash used in investing activities was $33.4 million for the three months ended March 31, 2024, as compared to $39.9 million in the same period of 2023. The decrease in cash used in investing activities was primarily due to a decrease in purchases of rental equipment of $33.6 million, partially offset by a decrease in proceeds from sales and disposals of rental equipment of $18.5 million and an increase in purchases for non-rental equipment and cloud computing arrangements of $7.1 million.
Current wording
Net cash used in investing activities was $98.7 million for the six months ended June 30, 2024, as compared to $102.9 million in the same period of 2023. The decrease in cash used in investing activities was primarily due to a decrease in purchases of rental equipment of $45.1 million, partially offset by lower proceeds from sales and disposals of rental equipment of $30.7 million and an increase in purchases for non-rental equipment and cloud computing arrangements of $4.3 million.
Previous wording
Net cash provided by financing activities was $45.5 million for the three months ended March 31, 2024, as compared to $53.8 million in 2023. The decrease in cash provided by financing activities was primarily due to an increase in repurchases of common stock of $5.6 million and a decrease in proceeds, net of repayments, from floor plan financing and long-term debt arrangements of $2.5 million.
Current wording
Net cash provided by financing activities was $73.0 million for the six months ended June 30, 2024, as compared to $131.6 million in the same period of 2023. The decrease in cash provided by financing activities was primarily due to an increase in repurchases of common stock of $18.5 million and a decrease in proceeds, net of repayments, from floor plan financing and long-term debt arrangements of $38.8 million.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The ABL Facility contains customary negative covenants for transactions of this type, including covenants that, among other things, limit the Company and its restricted subsidiaries’ ability to: incur additional indebtedness; pay dividends, redeem stock, or make other distributions; repurchase, prepay or redeem subordinated indebtedness; make investments; create restrictions on the ability of