SEC Comment Letter 0000000000-24-008183 to Custom Truck One Source, Inc. (CTOS)
Custom Truck One Source, Inc.
Date: July 18, 2024 · CIK: 0001709682 · Accession: 0000000000-24-008183
AI Filing Summary & Sentiment
Letter
July 18, 2024 Christopher Eperjesy Chief Financial Officer Custom Truck One Source, Inc. 7701 Independence Ave Kansas City, MO 64125 Re:Custom Truck One Source, Inc. Form 10-K for the Fiscal Year Ended December 31, 2023 Response dated June 25, 2024 Form 8-K filed May 2, 2024 File No. 1-38186 Dear Christopher Eperjesy: We have reviewed your June 25, 2024 response to our comment letter and have the following comment(s). Please respond to this letter within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe a comment applies to your facts and circumstances, please tell us why in your response. After reviewing your response to this letter, we may have additional comments. Unless we note otherwise, any references to prior comments are to comments in our May 28, 2024 letter. Form 10-K for the Fiscal Year Ended December 31, 2023 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Loan Covenants and Compliance, page 32 1.From your prior responses, we note that Adjusted EBITDA and its related measures such as Net Leverage Ratio are material covenant terms in your 2029 Secured Notes and ABL Facility. We also note that you determined that disclosure of Adjusted EBITDA is required to provide investors with an understanding of its potential effect on your long- term liquidity and capital resources. Please revise your disclosure to remove the columns showing the dollar change and the percentage change in your reconciliation of Adjusted EBITDA or explain how these amounts are a required element of the discussion and analysis of your debt covenants.
July 18, 2024 Page 2 Form 8-K filed May 2, 2024 Exhibit 99.1, page 1 2.We note that you disclose Adjusted EBITDA as a non-GAAP performance measure outside of your filings on Form 10-K and Form 10-Q (e.g., in press releases announcing your financial results). As the adjustments for Non-cash purchase accounting impact and Sales-type lease adjustment are not appropriate within the context of Rule 100(b) of Regulation G and Question 100.04 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations, Adjusted EBITDA should no longer be presented as a non- GAAP performance measure. Please contact Tony Watson at 202-551-3318 or Adam Phippen at 202-551-3336 if you have questions regarding comments on the financial statements and related matters. Sincerely, Division of Corporation Finance Office of Trade & Services
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July 18, 2024
Christopher Eperjesy
Chief Financial Officer
Custom Truck One Source, Inc.
7701 Independence Ave
Kansas City, MO 64125
Re:Custom Truck One Source, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2023
Response dated June 25, 2024
Form 8-K filed May 2, 2024
File No. 1-38186
Dear Christopher Eperjesy:
We have reviewed your June 25, 2024 response to our comment letter and have the
following comment(s).
Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
After reviewing your response to this letter, we may have additional comments. Unless we
note otherwise, any references to prior comments are to comments in our May 28, 2024 letter.
Form 10-K for the Fiscal Year Ended December 31, 2023
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Loan Covenants and Compliance, page 32
1.From your prior responses, we note that Adjusted EBITDA and its related measures such
as Net Leverage Ratio are material covenant terms in your 2029 Secured Notes and ABL
Facility. We also note that you determined that disclosure of Adjusted EBITDA is
required to provide investors with an understanding of its potential effect on your long-
term liquidity and capital resources. Please revise your disclosure to remove the columns
showing the dollar change and the percentage change in your reconciliation of Adjusted
EBITDA or explain how these amounts are a required element of the discussion and
analysis of your debt covenants.
July 18, 2024
Page 2
Form 8-K filed May 2, 2024
Exhibit 99.1, page 1
2.We note that you disclose Adjusted EBITDA as a non-GAAP performance measure
outside of your filings on Form 10-K and Form 10-Q (e.g., in press releases announcing
your financial results). As the adjustments for Non-cash purchase accounting impact and
Sales-type lease adjustment are not appropriate within the context of Rule 100(b) of
Regulation G and Question 100.04 of the Non-GAAP Financial Measures Compliance
and Disclosure Interpretations, Adjusted EBITDA should no longer be presented as a non-
GAAP performance measure.
Please contact Tony Watson at 202-551-3318 or Adam Phippen at 202-551-3336 if you
have questions regarding comments on the financial statements and related matters.
Sincerely,
Division of Corporation Finance
Office of Trade & Services