Manitex International, Inc. Reports Third Quarter 2019 Results

BRIDGEVIEW, IL / ACCESSWIRE / November 7, 2019 / Manitex International, Inc. (NASDAQ:MNTX), a leading international provider of cranes and specialized industrial equipment, today announced third quarter 2019 results. Net revenues for the third quarter were $51.9 million, compared to $60.9 million in the prior year’s period, and net loss was $(11.9) million, or $(0.60) per share, compared to net income of $0.1 million, or $0.01 per share, in the third quarter of 2018. Adjusted net loss* in the third quarter 2019 was a slight loss, or $(0.00) per share, compared to adjusted net income of $2.1 million, or $0.11 per share, for the third quarter of 2018.

Financial Highlights (versus prior year, unless otherwise noted):

  • Net revenues of $51.9 million, declined 15%, or 13% excluding unfavorable currency impact
  • Loss per share of $(0.60), as adjusted $(0.00)
  • EBITDA $(7.5) million, as adjusted $1.9 million
  • Non-cash goodwill and intangible asset impairment of $(8.1) million or $(0.41) per share impact to net loss
  • Non-cash charge related to deferred tax asset valuation allowance of $(2.2) million or $(0.11) per share impact to net loss
  • Sequential pickup in backlog to $63.1 million as of October 31, 2019
  • Book to bill ratio was 1.02:1 in Q3 2019

* Adjusted Numbers are discussed in greater detail and reconciled under “Non-GAAP Financial Measures and Other Items” at the end of this release.

Operating Highlights:

  • Appointment of Steve Filipov as Chief Executive Officer and Director of Manitex International
  • Awarded a new contract valued at $4.5 million to supply knuckle boom cranes to an international military organization (the contract provides for an optional $4 million in additional deliveries)
  • Launched the TC-600 and the Manitex branded line of articulating cranes (“MAC”) at the ICUEE show in Louisville, KY
  • Began production and sales of new Valla V80R remote-control electric crane
  • Expanded the Company’s North American distribution network with the addition of one new MAC dealer and three straight-mast crane dealers

Chief Executive Officer Steve Filipov commented, “2019 has been a year of extremely volatile demand in the industrial equipment markets, particularly here in North America, and we’ve taken a number of steps to diversify our business portfolio and build a stronger base for positive future financial performance. We continue to see a significant opportunity to become a global player in a market that is available to us through our articulated crane product family, and 60 days into this assignment, I’m very confident in our strategy going forward for this segment of our business. We’ve made some key personnel, operating, and branding changes throughout the organization that we believe will enable us to meaningfully penetrate various large geographic markets, both with our partner Tadano, as well as through our well-established Manitex straight-mast dealer network. We have started shipping articulated cranes under the brand name PM-Tadano, to customers in Asia, and that is just one of the key branding initiatives we’ve launched within the past 180 days.

“I have challenged the entire team to commit to reaching our potential and achieving the growth goals we’ve set, which start with driving sales at PM to a much higher level than we’ve seen. We’re targeting sourcing cost reductions, improved dealer management and incentivization, revamping product designs, improving parts execution and fill rates, and stressing a commitment to quality and safety.”

Steve Kiefer, President and Chief Operating Officer of Manitex added, “In the third quarter and fourth quarter to date, our global team has been focused on efficient production at our facilities, prudent working capital management, and ongoing product and commercial innovation and development. Notwithstanding challenging and softening conditions in some of our end-markets, we are pleased to see our knuckle boom crane products becoming an increasingly larger component of our backlog while we maintain a leadership position with our North American Manitex straight mast crane products. Diversification remains a key element of our strategy and we were pleased to announce the award of a $4.5 Million international military contract for our knuckle boom cranes, new dealers for our knuckle boom and straight mast crane products in various parts of the world, and the positive market reception of our new TC-600 Manitex straight mast crane and Valla V80R remote-control electric crane. Looking ahead, we will remain focused on generating cash and further debt reduction, operational excellence, new product development and the pursuit of global revenue expansion for our core brands.”

Outlook:

“Our objectives for the remainder of the year will be to produce efficiently, maintain our production and book to bill at the current level, reduce our working capital to generate cash and pay down debt, maintain our market leadership position in straight mast boom trucks and position ourselves to penetrate the global markets for articulated truck cranes,” concluded Mr. Filipov.

Other Matters:

The Company continues to comply with the SEC investigation regarding the Company’s restatement of prior financial statements.

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 866-575-6539 if calling within the United States or 323-994-2082 if calling internationally. A replay will be available until November 14, 2019, which can be accessed by dialing 844-512-2921 if calling within the United States, or 412-317-6671 if calling internationally. Please use passcode 8263903 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, www.manitexinternational.com/eventspresentations.aspx.

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, or for the three and nine month periods ended September 30, 2019 and 2018, unless otherwise indicated. A reconciliation of Adjusted GAAP financial measures for the three and nine month periods ended September 30, 2019 and 2018 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.

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.

Contact:

Manitex International, Inc.
Steve Filipov
Chief Executive Officer
(708) 237-2054
sfilipov@manitex.com

Darrow Associates, Inc.
Peter Seltzberg, Managing Director
Investor Relations
(516) 419-9915
pseltzberg@darrowir.com
 

MANITEX INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

 
  As of September 30,     As of December 31,  
 
  2019     2018  
 
  Unaudited     Unaudited  
ASSETS
           
Current assets
           
Cash
  $ 20,033     $ 22,103  
Cash – restricted
    219       245  
Marketable equity securities
          2,160  
Trade receivables (net)
    37,574       45,448  
Other receivables
    1,028       2,374  
Inventory (net)
    67,922       58,024  
Prepaid expense and other
    3,178       1,639  
Total current assets
    129,954       131,993  
Total fixed assets, net of accumulated depreciation of $16,153 and $14,826
at September 30, 2019 and December 31, 2018, respectively
    19,351       20,249  
Operating lease assets
    2,474        
Intangible assets (net)
    17,204       24,773  
Goodwill
    31,973       36,298  
Other long-term assets
    1,250       1,570  
Deferred tax asset
    543       2,366  
Total assets
  $ 202,749     $ 217,249  
LIABILITIES AND EQUITY
               
Current liabilities
               
Notes payable
  $ 21,536     $ 22,706  
Current portion of finance lease obligations
    462       422  
Current portion of operating lease liabilities
    985        
Accounts payable
    33,176       36,896  
Accounts payable related parties
    137       1,371  
Accrued expenses
    9,359       9,249  
Customer deposits
    1,393       2,310  
Total current liabilities
    67,048       72,954  
Long-term liabilities
               
Notes payable (net)
    21,895       23,134  
Finance lease obligation (net of current portion)
    4,711       5,061  
Non-current operating lease liabilities
    1,499        
Convertible note related party (net)
    7,281       7,158  
Convertible note (net)
    14,702       14,530  
Deferred gain on sale of property
    687       842  
Deferred tax liability
    362       92  
Other long-term liabilities
    5,271       5,474  
Total long-term liabilities
    56,408       56,291  
Total liabilities
    123,456       129,245  
Commitments and contingencies
               
Equity
               
Preferred Stock-Authorized 150,000 shares, no shares issued or outstanding at
September 30, 2019 and December 31, 2018
           
Common Stock-no par value 25,000,000 shares authorized, 19,691,936 and 19,645,773
shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively
    130,592       130,260  
Paid in capital
    2,766       2,674  
Retained deficit
    (49,466 )     (41,761 )
Accumulated other comprehensive loss
    (4,599 )     (3,169 )
Total equity
    79,293       88,004  
Total liabilities and equity
  $ 202,749     $ 217,249  
 
               

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,  
 
  2019     2018     2019     2018  
 
  Unaudited     Unaudited     Unaudited     Unaudited  
Net revenues
  $ 51,941     $ 60,938     $ 170,330     $ 181,517  
Cost of sales
    43,848       48,944       139,454       145,982  
Gross profit
    8,093       11,994       30,876       35,535  
Operating expenses
                               
Research and development costs
    496       801       1,890       2,179  
Selling, general and administrative expenses
    8,177       8,190       27,603       27,184  
Impairment of intangibles
    8,112             8,112        
Total operating expenses
    16,785       8,991       37,605       29,363  
Operating (loss) income
    (8,692 )     3,003       (6,729 )     6,172  
Other (expense) income
                               
Interest expense
    (1,142 )     (1,294 )     (3,368 )     (4,350 )
Interest income
    41       68       161       95  
Change in fair value of securities held
    216       (907 )     5,454       (2,308 )
Foreign currency transaction loss
    (307 )     (410 )     (718 )     (635 )
Other expense
    (9 )     (3 )     (17 )     (355 )
Total other expense
    (1,201 )     (2,546 )     1,512       (7,553 )
(Loss) income before income taxes and loss in equity
interest
    (9,893 )     457       (5,217 )     (1,381 )
Income tax expense
    1,958       335       2,488       540  
Loss on equity investments (including loss on sale of shares)
                      (409 )
Net (loss) income
    (11,851 )     122       (7,705 )     (2,330 )
(Loss) earnings Per Share
                               
Basic
  $ (0.60 )   $ 0.01     $ (0.39 )   $ (0.13 )
Diluted
  $ (0.60 )   $ 0.01     $ (0.39 )   $ (0.13 )
Weighted average common shares outstanding
                               
Basic
    19,690,233       19,610,168       19,684,521       18,003,829  
Diluted
    19,690,233       19,694,379       19,684,521       18,003,829  
 
                               

Net Sales and Gross Margin % (in thousands)

 
  Three Months Ended  
 
  September 30, 2019     September 30, 2018  
 
  As Reported     As Adjusted     As Reported     As Adjusted  
Net sales
  $ 51,941     $ 51,941     $ 60,938     $ 60,938  
% change Vs Q3 2018
    -14.8 %     -14.8 %                
% change Vs Q3 2018 without FX impact
            -13.3 %                
 
                               
Gross margin % of net sales
    15.6 %     17.2 %     19.7 %     20.2 %
Gross margin % of net sales (value-add)
            18.8 %             21.5 %
 
  Nine Months Ended  
 
  September 30, 2019     September 30, 2018  
 
  As Reported     As Adjusted     As Reported     As Adjusted  
Net sales
  $ 170,330     $ 170,330     $ 181,517     $ 181,517  
% change Vs prior year
    -6.2 %     -6.2 %                
% change Vs prior year without FX impact
            -3.8 %                
 
                               
Gross margin % of net sales
    18.1 %     19.2 %     19.6 %     20.0 %
Gross margin % of net sales (value-add)
            20.6 %             21.0 %
 
                               

Reconciliation of GAAP Operating Income (Loss) to Adjusted EBITDA (in thousands)

 
  Three Months Ended     Nine Months Ended  
 
  September 30, 2019     September 30, 2018     September 30, 2019     September 30, 2018  
Operating income (loss)
  (8,692 )   3,003     (6,729 )   6,172  
Adjustments related to trade show, customer declared bankruptcy, discontinued model, goodwill and intangible asset impairment, plant closing, restatement, restricted stock, restructuring and other expenses
    9,412       785       12,587       3,923  
Adjusted operating income
    720       3,788       5,858       10,095  
Depreciation and amortization
    1,192       1,238       3,592       3,789  
Adjusted EBITDA
  1,912     5,026     9,450     13,884  
Adjusted EBITDA % to sales
    3.7 %     8.2 %     5.5 %     7.6 %

Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income (Loss) (in thousands)

 
  Three Months Ended     Nine Months Ended  
 
  September 30, 2019     September 30, 2018     September 30, 2019     September 30, 2018  
Net income (loss)
  $ (11,851 )   $ 122     $ (7,705 )   $ (2,330 )
Adjustments related to change in fair value of securities, trade show, discontinued model, customer declared bankruptcy, foreign exchange, goodwill and intangible asset impairment, plant closing, restatement, restricted stock, restructuring, and other expenses (including net tax impact)
    11,821       2,005       9,951       7,137  
Adjusted net income (loss)
  $ (30 )   $ 2,127     $ 2,246     $ 4,807  
Weighted diluted shares outstanding
    19,690,233       19,694,379       19,684,521       18,003,829  
Diluted income (loss) per shares as reported
  $ (0.60 )   $ 0.01     $ (0.39 )   $ (0.13 )
Total EPS effect
  $ 0.60     $ 0.10     $ 0.50     $ 0.40  
Adjusted diluted earnings (loss) per share
  $ (0.00 )   $ 0.11     $ 0.11     $ 0.27  

Change in Fair Market Value of Securities, Trade Show, Discontinued Model, Foreign Exchange, Goodwill and Intangible Asset Impairment, Restatement, Restricted Stock, Restructuring, Plant Closing and other Expenses

 
  Three Months Ended     Nine Months Ended  
Adjustments
  September 30, 2019     September 30, 2018     September 30, 2019     September 30, 2018  
Customer declared bankruptcy – bad debt
  $ 140     $ 0     $ 424     $ 0  
Trade show
    79             360        
Discontinued model
    446       292       751       480  
Goodwill and intangible asset impairment
    8,112             8,112        
Plant closing
                44        
Restatement expenses
    22       183       169       2,006  
Restricted stock
    148       140       448       531  
Restructuring
    99       141       1,204       795  
Legal settlement
                67        
Other expenses
    366       29       1,008     $ 111  
Total adjustments to operating income (loss)
  $ 9,412     $ 785     $ 12,587       3,923  
Change in fair market value of securities
    (216 )     907       (5,454 )     2,717  
Foreign exchange
    307       410       718       635  
Other expenses
                      353  
Total pre-tax adjustments
  $ 9,503     $ 2,102     $ 7,851       7,628  
Net tax impact (including discrete items)
    2,318       (97 )     2,100       (491 )
Total adjustments
  $ 11,821     $ 2,005     $ 9,951       7,137  

Backlog

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, 2019   Jun 30, 2019   Mar 31, 2019   Dec 31, 2018   Sep 30, 2018  
Backlog
  57,596   56,625   74,885   66,735   60,477  
            1.7%     -23.1%     -13.7%     -4.8%  

Note: As of October 31, 2019, backlog was $63,100.

Net Debt

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, 2019     December 31,
2018
 
Cash & marketable equity securities
  $ 20,252     $ 24,508  
 
               
Notes payable – short term
  $ 21,536     $ 22,706  
Current portion of finance leases
    462       422  
Notes payable – long term
    21,895       23,134  
Finance lease obligations
    4,711       5,061  
Convertible notes
    21,983       21,688  
Total debt
  $ 70,587     $ 73,011  
 
               
Net debt
  $ 50,335     $ 48,503  
 
               

 

SOURCE: Manitex International Inc.

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