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Manitex International, Inc. Reports Fourth Quarter 2019 and Full Year Results

Monday, 09 March 2020 07:00 AM

Manitex International Inc.

Topic:
Earnings

BRIDGEVIEW, IL / ACCESSWIRE / March 9, 2020 / Manitex International, Inc. (NASDAQ:MNTX), a leading international provider of cranes and specialized industrial equipment, today announced fourth quarter and full year 2019 results. Net revenues for the fourth quarter were $54.4 million, compared to $51.9 million in the third quarter this year, and net loss was $(0.8) million, or $(0.04) per share, compared to net loss of $(11.9) million, or $(0.60) per share in the third quarter of 2019. Adjusted net income* in the fourth quarter 2019 was $0.8 million, or $0.04 per share, compared to a slight loss, or $(0.00) per share, for the third quarter of 2019.

For the full year 2019, Manitex reported net revenues of $224.8 million and net loss of $(8.5) million, or $(0.43) per share, compared with net revenues of $242.1 million and net loss of $(13.2) million, or $(0.72) per share for the full year 2018. Adjusted net income for the full year 2019 was $3.0 million, or $0.15 per share, compared to $6.0 million, or $0.33 per share for the full year 2018.

Q4 Financial Highlights (sequential comparisons, unless otherwise noted):

  • Net revenues increased 4.8% to $54.4 million, from $51.9 million
  • Adjusted Earnings Per Share improved to $0.04 compared $(0.00) loss per share
  • EBITDA of $1.9 million compared to $(7.5) million, with Adjusted EBITDA improving by $0.9 million to $2.8 million
  • Net debt as of December 31, 2019 was $41.2 million, representing a reduction of $7.3 million compared to a year ago
  • Backlog was $66.2 million as of December 31, 2019, flat year over year

* 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:

  • Book to bill ratio was 1.16:1 in Q4 2019
  • Launching several new products at CONEXPO 2020
  • Investing in Valla Industrial Crane zero-emission platforms
  • Subsequent to the end of the quarter, Sabre will be classified as "Held For Sale" in Q1 2020 and subsequent financial reports until a transaction is completed

Chief Executive Officer Steve Filipov commented, "We had a strong finish to the year, driven by greatly improved performance at PM, which grew sales by nearly 30 percent to $25 million in the fourth quarter. Our backlog, which we have reported as $66.2 million, is also being driven by gains at PM, which now represents a substantial portion of that backlog. We believe there is potential for continued gains in 2020 through higher production efficiencies and the re-configuration of our articulating crane business, which generates the highest margins within our product portfolio. Our partnership with Tadano is also gaining traction in Asia, and now starting in the Middle East, through our PM-Tadano branding efforts and distribution expansion. We are proud to have Tadano as a partner and investor, and have greatly improved our focus over the past few months to drive gains in 2020 and beyond for our articulating crane business. Manitex straight mast cranes, a North American market leader for two decades, experienced some softness in the year, amidst a deceleration in unit sales across the industry, but remained flat with 2018. While there is still plenty of work to do, it's worth noting that both Gross Margin and EBITDA margin have bounced off our lows in the third quarter, and are trending higher as we head into 2020."

Mr. Filipov added, "We are excited about our presence at the CONEXPO Trade Show in Las Vegas, which will allow us to meet many of our loyal customers, look for new opportunities, and launch several new products to the market, from stick boom cranes to zero-emission industrial cranes."

"We also showed excellent progress in reducing our net debt position to the lowest it has been since 2011. In addition, we have made the decision to divest our Sabre business, in order to focus on our core portfolio of specialized cranes. I am confident we will continue to grow Manitex and achieve our 10% EBITDA goal while continuing to improve our balance sheet, over the coming quarters," concluded Mr. Filipov.

Steve Kiefer, President and Chief Operating Officer of Manitex added, "Strengthening our PM and Manitex product offerings and distribution was a key focus throughout 2019 and remains a priority as we enter 2020. We introduced a number of new products such as the Valla V80R and 250E electric cranes at the Bauma trade show in April of last year and those products began adding to backlog and revenue as we moved throughout the year. In September of last year we announced a $4.5 Million order from an international military customer for PM knuckleboom cranes. We began production of these cranes in late-2019 and shipments will begin in the second quarter of 2020. We are pursuing additional military orders for PM cranes and anticipate possibly announcing additional contract awards this year. Additionally, we added three new dealers for PM Group products in the fourth quarter last year and began customer shipments of our Manitex-branded MAC knuckleboom cranes in North America."

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 8:30 AM Eastern Time today to discuss the results with the investment community. Anyone interested in participating in the call should dial 888-256-1007 if calling within the United States or 323-994-2093 if calling internationally. A replay will be available until March 16, 2020, 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 7459648 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 twelve month periods ended December 31, 2019 and 2018, unless otherwise indicated. A reconciliation of Adjusted GAAP financial measures for the three and twelve month periods ended December 31, 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, MAC, PM-Tadano, 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.

Company Contact

Manitex International, Inc.
Steve Filipov
Chief Executive Officer
(708) 237-2054
[email protected]

Darrow Associates Inc.
Peter Seltzberg, Managing Director
Investor Relations
(516) 419-9915
[email protected]

MANITEX INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data

 
  As of December 31,  
 
  2019     2018  
 
           
ASSETS
           
Current assets
           
Cash
  $ 23,360     $ 22,103  
Cash - restricted
    217       245  
Marketable equity securities
    -       2,160  
Trade receivables (net)
    35,232       45,448  
Other receivables
    1,033       1,327  
Inventory (net)
    58,734       58,024  
Prepaid expense and other
    4,841       3,993  
Total current assets
    123,417       133,300  
Total fixed assets, net of accumulated depreciation of $16,818 and $14,826
at December 31, 2019 and 2018, respectively
    19,348       20,249  
Operating lease assets
    2,274       -  
Intangible assets (net)
    17,032       24,773  
Goodwill
    32,635       36,298  
Other long-term assets
    281       263  
Deferred tax asset
    415       2,366  
Total assets
  $ 195,402     $ 217,249  
LIABILITIES AND EQUITY
               
Current liabilities
               
Notes payable
  $ 18,212     $ 22,706  
Covertible note-related party (net)
    7,323       -  
Current portion of finance lease obligations
    476       422  
Current portion of operating lease liabilities
    920       -  
Accounts payable
    29,974       36,896  
Accounts payable related parties
    228       1,371  
Accrued expenses
    9,325       9,249  
Customer deposits
    1,618       2,310  
Total current liabilities
    68,076       72,954  
Long-term liabilities
               
Notes payable (net)
    19,446       23,134  
Finance lease obligation (net of current portion)
    4,584       5,061  
Non-current operating lease liabilities
    1,361       -  
Convertible note related party (net)
    -       7,158  
Convertible note (net)
    14,760       14,530  
Deferred gain on sale of property
    667       842  
Deferred tax liability
    1,045       92  
Other long-term liabilities
    5,913       5,474  
Total long-term liabilities
    47,776       56,291  
Total liabilities
    115,852       129,245  
Commitments and contingencies
               
Equity
               
Preferred Stock-Authorized 150,000 shares, no shares issued or outstanding at
December 31, 2019 and 2018
    -       -  
Common Stock-no par value 25,000,000 shares authorized, 19,713,185 and 19,645,773
shares issued and outstanding at December 31, 2019 and 2018, respectively
    130,710       130,260  
Paid in capital
    2,793       2,674  
Retained deficit
    (50,253 )     (41,761 )
Accumulated other comprehensive loss
    (3,700 )     (3,169 )
Total equity
    79,550       88,004  
Total liabilities and equity
  $ 195,402     $ 217,249  


MANITEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share amounts)

 
  Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
 
  2019     2018     2019     2018  
 
  Unaudited     Unaudited              
Net revenues
  $ 54,446     $ 60,590     $ 224,776     $ 242,107  
Cost of sales
    44,866       52,078       184,320       198,060  
Gross profit
    9,580       8,512       40,456       44,047  
Operating expenses
                               
Research and development costs
    824       660       2,714       2,839  
Selling, general and administrative expenses
    8,012       8,523       35,615       35,707  
Impairment of intangibles
    -       5,736       8,112       5,736  
Total operating expenses
    8,836       14,919       46,441       44,282  
Operating income (loss)
    744       (6,407 )     (5,985 )     (235 )
Other (expense) income
                               
Interest expense
    (1,235 )     (1,158 )     (4,603 )     (5,508 )
Interest income
    68       73       229       168  
Change in fair value of securities held
    -       (3,186 )     5,454       (5,494 )
Foreign currency transaction loss
    (126 )     (179 )     (844 )     (814 )
Other income (loss)
    37       (19 )     20       (374 )
Total other (expense) income
    (1,256 )     (4,469 )     256       (12,022 )
Loss before income taxes and loss in non-marketable
equity interest
    (512 )     (10,876 )     (5,729 )     (12,257 )
Income tax (benefit) expense
    275       (29 )     2,763       511  
Loss on equity investments, net of taxes
    -       -       -       (409 )
Net loss
  $ (787 )   $ (10,847 )   $ (8,492 )   $ (13,177 )
(Loss) earnings Per Share
                               
Basic
  $ (0.04 )   $ (0.55 )   $ (0.43 )   $ (0.72 )
Diluted
  $ (0.04 )   $ (0.55 )   $ (0.43 )   $ (0.72 )
Weighted average common shares outstanding
                               
Basic
    19,696,093       19,625,695       19,687,414       18,409,296  
Diluted
    19,696,093       19,625,695       19,687,414       18,409,296  


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

 
  Three Months Ended     Twelve Months Ended  
 
  December 31, 2019     September 30, 2019     December 31, 2018     December 31, 2019     December 31, 2018  
Operating income (loss)
  744     (8,692 )   (6,407 )   (5,985 )   (235 )
Adjustments related to trade show, customer declared bankruptcy, discontinued model, goodwill and intangible asset impairment, plant closing, restatement, restricted stock, restructuring and other expenses
    992       9,412       8,732       13,579       12,655  
Adjusted operating income
    1,736       720       2,325       7,594       12,420  
Depreciation and amortization
    1,110       1,192       1,200       4,702       4,989  
Adjusted EBITDA
  2,846     1,912     3,525     12,296     17,409  
Adjusted EBITDA % to sales
    5.2     3.7     5.8     5.5 %     7.2 %


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

 
  Three Months Ended     Twelve Months Ended  
 
  December 31, 2019     September 30, 2019     December 31, 2018     December 31, 2019     December 31, 2018  
Net loss
  (787 )   (11,851 )   (10,847 )   (8,492 )   (13,177 )
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)
    1,571       11,821       12,058       11,522       19,195  
Adjusted net income (loss)
  784     (30 )   1,211     3,030     6,018  
Weighted diluted shares outstanding
    19,696,093       19,690,233       19,625,695       19,687,414       18,409,296  
Diluted loss per shares as reported
  (0.04 )   (0.60 )   (0.55 )   (0.43 )   (0.72 )
Total EPS effect
  0.08     0.60     0.61     0.58     1.05  
Adjusted diluted earnings per share
  0.04     (0.00 )   0.06     0.15     0.33  


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     Twelve Months Ended  
Adjustments
  December 31, 2019     September 30, 2019     December 31, 2018     December 31, 2019     December 31, 2018  
Goodwill and intangible asset impairment
  0     8,112     5,736     8,112     5,736  
Restructuring
    38       99       367       1,242       1,161  
Discontinued model
    249       446       -       1,000       480  
Restricted stock
    156       148       109       604       640  
Customer declared bankruptcy - bad debt
    140       140       -       564       -  
Trade show
    -       79       -       360       -  
Legal settlement
    88       -       -       186       -  
Restatement expenses
    -       22       358       169       2,364  
Change in accounting estimates - Inventory reserve
    166       -       1,834       166       1,834  
Plant closing
    -       -       -       44       -  
Other expenses
    155       366       328       1,132       440  
Total adjustments to operating income (loss)
  992     9,412     8,732     13,579       12,655  
Change in fair market value of securities
    -       (216 )     3,186       (5,454 )     5,494  
Loss in equity investments
    -       -       -       -       409  
Foreign exchange
    126       307       179       844       814  
Other expenses
    -       -       -       -       353  
Total pre-tax adjustments
  1,118     9,503     12,097     8,969       19,725  
Net tax impact (including discrete items)
    453       2,318       (39 )     2,553       (530 )
Total adjustments
  1,571     11,821     12,058     11,522       19,195  


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.

 
  Dec 31, 2019     Sep 30, 2019     Jun 30, 2019     Mar 31, 2019     Dec 31, 2018  
Backlog
  66,196     57,596     56,625     74,885     66,735  
Change Versus Current Period
            14.9 %     16.9 %     -11.6 %     -0.8 %

Note: As of February 21, 2020, backlog was $70,998


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.

 
  December 31, 2019     December 31, 2018  
Cash & marketable equity securities
  23,577     24,508  
 
               
Notes payable - short term
  18,212     22,706  
Current portion of finance leases
    476       422  
Notes payable - long term
    19,446       23,134  
Finance lease obligations
    4,584       5,061  
Convertible notes
    22,083       21,688  
Total debt
  64,801     73,011  
 
               
Net debt
  41,224     48,503  


SOURCE: Manitex International, Inc.

Topic:
Earnings
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