Manitex International, Inc. Reports Third Quarter 2018 Results
BRIDGEVIEW, Ill., Nov. 01, 2018 (GLOBE NEWSWIRE) -- Manitex International, Inc. (Nasdaq: MNTX), a leading international provider of truck and knuckle boom cranes, today announced third quarter 2018 results. Net revenues for the third quarter were $60.9 million, compared to $56.5 million in the prior year’s period, and net income from continuing operations attributable to shareholders of Manitex was $0.1 million, or $0.01 per share, compared to a net loss from continuing operations attributable to shareholders of Manitex of $(1.5) million, or $(0.09) per share, in the third quarter of 2017. Adjusted net income* from continuing operations in the third quarter 2018 was $2.1 million, or $0.11 per share, compared to adjusted net income of $1.2 million, or $0.07 per share, for the third quarter of 2017.
Third Quarter Highlights (versus prior year, unless otherwise noted):
- Net revenues grew 7.9% to $60.9 million from $56.5 million
- Adjusted EBITDA* increased 21.0% to $5.0 million, or 8.2% of sales, from $4.2 million or 7.4% of sales
- Adjusted earnings per share* improved to $0.11 compared to $0.07
- Net debt of $49 million represents reduction of $41 million since year-end 2017
- Backlog was $79 million as of October 31, 2018, compared with $76 million at the end of the second quarter and $61 million as of year-end 2017, representing a 30% year to date increase
- Continued progress with Tadano partnership in expanding PM’s international distribution
* Adjusted Numbers are discussed in greater detail and reconciled under “Non-GAAP Financial Measures and Other Items” at the end of this release.
Chief Executive and Chairman David J. Langevin commented, “Our third quarter financial report indicates notable improvement over a year ago, highlighted by revenue growth of nearly 8% and operating earnings of $3 million, which is an improvement of $2 million, or 200%, and a 30% growth in the backlog year to date. Adjusted EBITDA of over $5 million, for the second consecutive quarter, shows that we have worked efficiently to keep up with the rising component prices that have impacted all participants in the industrial equipment industry. Most importantly, the cash we have generated has reduced our net debt to $49 million and reduced our leverage ratio down to the lowest level we’ve seen in many years. Global industrial equipment demand remains solid, our margins are trending modestly higher and we do expect to continue to realize the benefits of price increases as well as improvements we’ve made to our cost structure.”
“Our hallmark Manitex brand crane business continues to experience robust growth, as a leader with 40% of the North American straight mast boom truck market, with healthy margins and a replacement cycle underway. We are also particularly encouraged about the benefits that our partner Tadano has brought to the table. Now in just its fifth month, this partnership is moving us forward in establishing PM as a top competitor in the knuckle boom crane market. With its presence in the Asian, European, and South American markets, we believe there is potential for PM to achieve meaningful penetration of the growing multi-billion knuckle boom market, which is the largest market opportunity for Manitex, and thus, a top priority for our company.”
Steve Kiefer, President and Chief Operating Officer of Manitex, stated, “Manitex continues to execute on its growth plans, and we’re closing in on our sales, gross margins, and EBITDA targets for the year. Third quarter gross margin of 19.7% was up from 17.5% in 2017 and continued to improve versus the first and second quarters of 2018. This margin expansion reflects the disciplined efforts of our teams to appropriately manage trade, supply chain, and currency challenges while also improving our operating efficiency. Tariff costs which had a minimal impact on our results in the quarter, in fact, totaling less than $250,000, along with surcharges and general material inflation costs from our suppliers were offset through price realization.”
“Key markets remain healthy and show signs of growth with continued improvement in rental rates, rental fleet utilization levels and industry orders for mobile cranes. Regarding new products, recently launched A62, TM-200 and Trolley Boom Loader product lines were joined in the third quarter by additional Trolley Boom Loader configurations and the introduction of a new 11-ton Cary Deck Crane that we are confident will be met with enthusiastic market reception. The multi-billion-dollar global knuckle boom market remains healthy and represents one of our most significant growth opportunities, with, in our estimation, each percentage point of share gain generates $20 million in incremental annual revenue. Buildout of our North American dealer network continues, with two multi-site PM knuckle boom dealers having signed on with us year to date and our team is working diligently with the Tadano team and distribution network to finalize initial stocking orders and move to the next phase of our marketing plans. Our objective is to accelerate PM’s penetration of this key global market throughout their global dealer network.
“Based on current industry conditions, which remain on track to support the recovering build rates throughout the mobile cranes category, we expect continued revenue growth moving into 2019, with upside potential from continued organic sales growth, both here and abroad from both recent and upcoming new product introductions,” concluded Mr. Kiefer.
Other Matters:
The Company continues to comply with the SEC investigation regarding the Company’s restatement of prior financial statements which was completed in April 2018.
Conference Call:
Management will host a conference call at 4:30 PM Eastern Time today to discuss the results with the investment community. Anyone interested in participating in the call should dial 800-949-2175 if calling within the United States or 323-994-2132 if calling internationally. A replay will be available until November 8, 2018, which can be accessed by dialing 844-512-2921 if calling within the United States, or 412-317-6671 if calling internationally. Please use passcode1055909 to access the replay. The call will additionally be broadcast live and archived for 90 days over the internet with accompanying slides, accessible at the investor relations portion of the Company's corporate website, .
Non-GAAP Financial Measures and Other Items
Results of operations reflect continuing operations. All per share amounts are on a fully diluted basis. In this press release, Manitex refers to various non-GAAP (U.S. generally accepted accounting principles) financial measures which management uses to evaluate operating performance, to establish internal budgets and targets, and to compare the Company’s financial performance against such budgets and targets. These non-GAAP measures, as defined by the Company, may not be comparable to similarly titled measures being disclosed by other companies. While adjusted financial measures are not intended to replace any presentation included in our consolidated financial statements under generally accepted accounting principles (GAAP) and should not be considered an alternative to operating performance or an alternative to cash flow as a measure of liquidity, we believe these measures are useful to investors in assessing our operating results, capital expenditure and working capital requirements and the ongoing performance of its underlying businesses. The amounts described below are unaudited, are reported in thousands of U.S. dollars, and are as of, for three month periods ended September 30, 2018 and 2017, unless otherwise indicated. A reconciliation of Adjusted GAAP financial measures for the three month periods ended September 30, 2018 and 2017 is included with this press release below and with the Company's related Form 8-K.
About Manitex International, Inc.
Manitex International, Inc. is a leading worldwide provider of highly engineered mobile cranes (truck mounted straight-mast and knuckle boom cranes, industrial cranes, rough terrain cranes and railroad cranes), truck mounted aerial work platforms and specialized industrial equipment. Our products, which are manufactured in facilities located in the USA and Europe, are targeted to selected niche markets where their unique designs and engineering excellence fill the needs of our customers and provide a competitive advantage. We have consistently added to our portfolio of branded products and equipment both through internal development and focused acquisitions to diversify and expand our sales and profit base while remaining committed to our niche market strategy. Our brands include Manitex, PM, Oil & Steel, Badger, Sabre, and Valla. The company also has a minority ownership in ASV Holdings, Inc. which manufactures and sells a line of high-quality compact track and skid steer loaders.
Forward-Looking Statements
Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995: This release contains statements that are forward-looking in nature which express the beliefs and expectations of management including statements regarding the Company’s expected results of operations or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance; and statements of management’s goals and objectives and other similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “we believe,” “we intend,” “may,” “will,” “should,” “could,” and similar expressions. Such statements are based on current plans, estimates and expectations and involve a number of known and unknown risks, uncertainties and other factors that could cause the Company's future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. These factors and additional information are discussed in the Company's filings with the Securities and Exchange Commission and statements in this release should be evaluated in light of these important factors. Although we believe that these statements are based upon reasonable assumptions, we cannot guarantee future results. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
Company Contact
Manitex International, Inc.
Steve Kiefer
President and Chief Operating Officer
(708) 237-2065
Darrow Associates Inc.
Peter Seltzberg, Managing Director
Investor Relations
(516) 419-9915
MANITEX INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
| September 30, 2018 | December 31, 2017 | |||||||
| Unaudited | Unaudited | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 20,265 | $ | 5,014 | ||||
| Cash - restricted | 306 | 352 | ||||||
| Marketable equity securities | 5,346 | — | ||||||
| Trade receivables (net) | 42,073 | 46,633 | ||||||
| Other receivables | 2,747 | 1,946 | ||||||
| Inventory (net) | 67,480 | 54,360 | ||||||
| Prepaid expense and other | 2,017 | 2,017 | ||||||
| Total current assets | 140,234 | 110,322 | ||||||
| Total fixed assets, net of accumulated depreciation of $14,350 and $12,921 at September 30, 2018 and December 31, 2017, respectively | 20,366 | 22,038 | ||||||
| Intangible assets (net) | 28,260 | 31,014 | ||||||
| Goodwill | 42,508 | 43,569 | ||||||
| Equity investment in ASV Holdings, Inc. | — | 14,931 | ||||||
| Other long-term assets | 1,234 | 1,475 | ||||||
| Deferred tax asset | 1,839 | 1,839 | ||||||
| Total assets | $ | 234,441 | $ | 225,188 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Notes payable | $ | 21,464 | $ | 29,131 | ||||
| Current portion of capital lease obligations | 409 | 378 | ||||||
| Accounts payable | 40,269 | 35,386 | ||||||
| Accounts payable related parties | 79 | 1,331 | ||||||
| Accrued expenses | 9,138 | 10,070 | ||||||
| Customer deposits | 1,777 | 2,242 | ||||||
| Other current liabilities | - | 890 | ||||||
| Total current liabilities | 73,136 | 79,428 | ||||||
| Long-term liabilities | ||||||||
| Revolving term credit facilities | — | 12,893 | ||||||
| Notes payable (net) | 26,651 | 26,656 | ||||||
| Capital lease obligation, (net of current portion) | 5,173 | 5,483 | ||||||
| Convertible note related party (net) | 7,119 | 7,005 | ||||||
| Convertible note (net) | 14,475 | 14,310 | ||||||
| Deferred gain on sale of property | 874 | 969 | ||||||
| Deferred tax liability | 3,789 | 3,384 | ||||||
| Other long-term liabilities | 3,910 | 4,215 | ||||||
| Total long-term liabilities | 61,991 | 74,915 | ||||||
| Total liabilities | 135,127 | 154,343 | ||||||
| Commitments and contingencies | ||||||||
| Equity | ||||||||
| Preferred Stock—Authorized 150,000 shares, no shares issued or outstanding at September 30, 2018 and December 31, 2017 | — | — | ||||||
| Common Stock—no par value 25,000,000 shares authorized, 19,615,390 and 16,617,932 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 130,111 | 97,661 | ||||||
| Paid in capital | 2,773 | 2,802 | ||||||
| Retained deficit | (30,913 | ) | (28,583 | ) | ||||
| Accumulated other comprehensive loss | (2,657 | ) | (1,035 | ) | ||||
| Total equity | 99,314 | 70,845 | ||||||
| Total liabilities and equity | $ | 234,441 | $ | 225,188 | ||||
MANITEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||
| Net revenues | $ | 60,938 | $ | 56,464 | $ | 181,517 | $ | 148,634 | ||||||||
| Cost of sales | 48,944 | 46,591 | 145,982 | 121,965 | ||||||||||||
| Gross profit | 11,994 | 9,873 | 35,535 | 26,669 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development costs | 801 | 619 | 2,179 | 1,902 | ||||||||||||
| Selling, general and administrative expenses | 8,190 | 8,282 | 27,184 | 25,797 | ||||||||||||
| Total operating expenses | 8,991 | 8,901 | 29,363 | 27,699 | ||||||||||||
| Operating income (loss) | 3,003 | 972 | 6,172 | (1,030 | ) | |||||||||||
| Other (expense) income | ||||||||||||||||
| Interest expense | (1,294 | ) | (1,716 | ) | (4,350 | ) | (4,498 | ) | ||||||||
| Interest income | 68 | — | 95 | — | ||||||||||||
| Change in fair value of securities held | (907 | ) | — | (2,308 | ) | — | ||||||||||
| Foreign currency transaction loss | (410 | ) | (799 | ) | (635 | ) | (1,138 | ) | ||||||||
| Other (expense) income | (3 | ) | 18 | (355 | ) | 361 | ||||||||||
| Total other expense | (2,546 | ) | (2,497 | ) | (7,553 | ) | (5,275 | ) | ||||||||
| Income (loss) before income taxes and income (loss) in equity interest from continuing operations | 457 | (1,525 | ) | (1,381 | ) | (6,305 | ) | |||||||||
| Income tax expense from continuing operations | 335 | 281 | 540 | 416 | ||||||||||||
| Income (loss) on equity investments (including loss on sale of shares) | — | 284 | (409 | ) | 284 | |||||||||||
| Net income (loss) from continuing operations | 122 | (1,522 | ) | (2,330 | ) | (6,437 | ) | |||||||||
| Discontinued operations | ||||||||||||||||
| Loss from operations of discontinued operations (including loss on disposal for the three and nine months 2017 of $1,133) | — | — | — | (573 | ) | |||||||||||
| Income tax benefit | — | (15 | ) | — | (28 | ) | ||||||||||
| Income (loss) from discontinued operations | — | 15 | — | (545 | ) | |||||||||||
| Net income (loss) | 122 | (1,507 | ) | (2,330 | ) | (6,982 | ) | |||||||||
| Net income attributable to noncontrolling interest from discontinued operations | — | - | — | (274 | ) | |||||||||||
| Net income (loss) attributable to shareholders of Manitex International, Inc. | $ | 122 | $ | (1,507 | ) | $ | (2,330 | ) | $ | (7,256 | ) | |||||
| Earnings (loss) Per Share | ||||||||||||||||
| Basic | ||||||||||||||||
| Earnings (loss) from continuing operations attributable to shareholders of Manitex International, Inc. | $ | 0.01 | $ | (0.09 | ) | $ | (0.13 | ) | $ | (0.39 | ) | |||||
| Loss from discontinued operations attributable to shareholders of Manitex International, Inc. | $ | — | $ | 0.00 | $ | — | $ | (0.05 | ) | |||||||
| Net earnings (loss) attributable to shareholders of Manitex International, Inc. | $ | 0.01 | $ | (0.09 | ) | $ | (0.13 | ) | $ | (0.44 | ) | |||||
| Diluted | ||||||||||||||||
| Earnings (loss) from continuing operations attributable to shareholders of Manitex International, Inc. | $ | 0.01 | $ | (0.09 | ) | $ | (0.13 | ) | $ | (0.39 | ) | |||||
| Loss from discontinued operations attributable to shareholders of Manitex International, Inc. | $ | — | $ | 0.00 | $ | — | $ | (0.05 | ) | |||||||
| Net earnings (loss) attributable to shareholders of Manitex International, Inc. | $ | 0.01 | $ | (0.09 | ) | $ | (0.13 | ) | $ | (0.44 | ) | |||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | 19,610,168 | 16,573,927 | 18,003,829 | 16,532,683 | ||||||||||||
| Diluted | 19,694,379 | 16,573,927 | 18,003,829 | 16,532,683 | ||||||||||||
Reconciliation of GAAP Operating Income (Loss) from Continuing Operations to Adjusted EBITDA (in thousands)
| Three Months Ended | Nine Months Ended ** | |||||||||||
| September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||||||
| Operating income (loss) | $ | 3,003 | $ | 972 | $ | 6,172 | $ | (1,030 | ) | |||
| Adjustments related to restatement, restructuring, discontinued model, restricted stock, and other expenses | 785 | 1,956 | 3,923 | 7,763 | ||||||||
| Adjusted operating income (loss) | 3,788 | 2,928 | 10,095 | 6,733 | ||||||||
| Depreciation and amortization | 1,238 | 1,225 | 3,789 | 3,908 | ||||||||
| Adjusted EBITDA | $ | 5,026 | $ | 4,153 | $ | 13,884 | $ | 10,641 | ||||
| Adjusted EBITDA % to sales | 8.2 | % | 7.4 | % | 7.6 | % | 7.2 | % | ||||
Reconciliation of GAAP Net Income (Loss) From Continuing Operations Attributable to Shareholders of Manitex International to Adjusted Net Income (Loss) From continuing Operations Attributable to Shareholders of Manitex International (in thousands)
| Three Months Ended | Nine Months Ended ** | |||||||||||
| September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||||||
| Net Income (Loss) from continuing operations attributable to shareholders | $ | 122 | $ | (1,522 | ) | $ | (2,330 | ) | $ | (6,437 | ) | |
| Adjustments related to restatement, restructuring, discontinued model, Inventory write down, restricted stock, foreign exchange, change in fair value of securities and other expenses (tax effected) | 2,005 | 2,696 | 7,137 | 8,842 | ||||||||
| Adjusted Net Income (Loss) from continuing operations attributable to shareholders | 2,127 | 1,174 | 4,807 | 2,405 | ||||||||
| Weighted diluted shares outstanding | 19,694,379 | 16,573,927 | 18,003,829 | 16,532,683 | ||||||||
| Diluted earnings (loss) per share attributable to shareholders as reported | $ | 0.01 | $ | (0.09 | ) | $ | (0.13 | ) | $ | (0.39 | ) | |
| Total EPS effect | $ | 0.10 | $ | 0.16 | $ | 0.40 | $ | 0.53 | ||||
| Adjusted diluted earnings per share attributable to shareholders | $ | 0.11 | $ | 0.07 | $ | 0.27 | $ | 0.15 | ||||
Foreign Exchange, Restatement, Restructuring, Restricted Stock and other Expenses
| Details of adjustments | |||||||||||||
| Three Months Ended | Nine Months Ended ** | ||||||||||||
| Pre-tax adjustments | September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||||||
| Restatement expenses | $ | 183 | - | $ | 2,006 | - | |||||||
| Foreign exchange | 410 | 799 | 635 | 1,138 | |||||||||
| Discontinued model | 292 | - | 480 | - | |||||||||
| Inventory write down | - | 1,521 | 1,521 | ||||||||||
| Restructuring | 141 | 130 | 795 | 704 | |||||||||
| Restricted stock | 140 | 160 | 530 | 517 | |||||||||
| Normalized plant absorption levels | - | - | - | 3,770 | |||||||||
| Trade show expenses (tri-annual only) | - | - | - | 589 | |||||||||
| change in fair market value of securities, and other expenses | 936 | 145 | 3,182 | 662 | |||||||||
| Total | $ | 2,102 | $ | 2,755 | $ | 7,628 | $ | 8,901 | |||||
Backlog from Continuing Operations
Backlog is defined as purchase orders that have been received by the Company. The disclosure of backlog aids in the analysis the Company’s customers’ demand for product, as well as the ability of the Company to meet that demand. Backlog is not necessarily indicative of sales to be recognized in a specified future period.
| Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | ||||||||||
| Backlog | $ | 60,477 | $ | 75,601 | $ | 87,860 | $ | 61,530 | $ | 50,281 | ||||
| Change Versus Current Period | -20.0 | % | -31.2 | % | -1.7 | % | 20.3 | % | ||||||
Note: As of October 31, 2018 backlog was $79,200
Net Debt is calculated using the Condensed Consolidated Balance Sheet amounts for current and long term portion of long term debt, capital lease obligations, notes payable, convertible notes and revolving credit facilities minus cash.
| September 30, 2018 | December 31, 2017 | |||||
| Cash & marketable equity securities | $ | 25,917 | $ | 5,366 | ||
| Notes payable - short term | $ | 21,464 | $ | 29,131 | ||
| Current portion of capital leases | 409 | 378 | ||||
| Revolving term credit facilities | - | 12,893 | ||||
| Notes payable - long term | 26,651 | 26,656 | ||||
| Capital lease obligations | 5,173 | 5,483 | ||||
| Convertible notes | 21,594 | 21,315 | ||||
| Total debt | $ | 75,291 | $ | 95,856 | ||
| Net Debt | $ | 49,374 | $ | 90,490 | ||
** All references in this release to financial results of periods ending prior to the third quarter of 2017 reflect such results as restated pursuant to the recently completed restatement of such periods.
