Manitex International, Inc. Reports Second Quarter 2020 Results
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Manitex International, Inc. Reports Second Quarter 2020 Results

Thursday, August 6, 2020 4:01 PM
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Earnings

BRIDGEVIEW, IL / ACCESSWIRE / August 6, 2020 / Manitex International, Inc. (NASDAQ:MNTX), a leading international provider of cranes and specialized industrial equipment, today announced second quarter 2020 results. Net revenues from continuing operations for the second quarter were $37.1 million, compared to $57.4 million in the prior year's period, and net loss from continuing operations was $(2.4) million, or $(0.12) per share, compared to net income of $3.3 million or $0.17 per share, in the second quarter of 2019. Adjusted net loss* from continuing operations in the second quarter 2020 was $(1.7) million, or $(0.08) per share, compared to adjusted net income of $1.2 million, or $0.06 per share, for the second quarter of 2019.

Financial Highlights:

  • Net revenues of $37.1 million, declined 35.3% compared to Q2 2019
  • Loss per share of $(0.12) or $(0.08) as adjusted*
  • Adjusted EBITDA* $(0.3) million
  • Generated $4.6 million in cash in the quarter from operations
  • Achieved $1.2 million cost savings in SG&A in Q2 compared to prior year driven by cost reduction initiatives implemented in 2019 and 2020
  • Net debt of $34.4 million, a reduction of $7.6 million in Q2 2020
  • Available liquidity through cash and credit lines of approximately $46 million as of June 30, 2020

Note: Results shown are from Continuing Operations
* 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:

  • Backlog which was $44 million as of June 30, 2020, declined 18% year over year
  • Continued softness in our North American straight-mast and industrial crane products
  • North American MAC knuckle boom sales have increased approximately 150% compared to last year's same quarter
  • PM backlog increased 15% year over year and now 50% of total backlog
  • 7 new dealers for PM, MAC and/or Oil &Steel: France, Israel, New York, Pennsylvania, Florida, Italy, Singapore
  • Expansion of our Valla zero-emission industrial crane distribution network in Europe and North America

Subsequent to quarter end

  • On July 20, 2020, the Company announced that it had paid down approximately $5.5 million European bank debt at a 15% discount to its face value
  • Initiated restructuring plan for North American operations estimated to generate $5.4 million in annualized cost savings

Steve Filipov, CEO of Manitex commented, "We continue to implement safety protocols globally to protect our employees and their families during the current COVID-19 pandemic, including increased frequency of cleaning and disinfecting, social distancing practices, and other measures consistent with specific regulatory requirements."

"Performance for the second quarter was negatively impacted by lower production and increasing uncertainty, as a result of the continuing pandemic, of the future demand picture in certain geographic markets. COVID-19 forced closures at PM and also impacted our dealers and customers, globally. Notwithstanding this disruption in the marketplace, we have seen consistent improvement in our results in international markets for articulating "knuckle boom" cranes and truck-mounted aerials, particularly in Western Europe and Asia where we are pleased to be establishing PM, PM-Tadano, as developing brands in the global marketplace that we estimate at over $2.3 billion annually. Sales and orders at PM, combined with declines at Manitex straight-mast cranes, have resulted in a higher backlog composition of PM over Manitex for the first time ever, a trend that we anticipate to continue, consistent with our strategy to focus our resources there and grow the business to a much higher level over time."

"While we have reported a loss for the second quarter, on a level of sales that reflect the temporary economics of a global pandemic, we generated $4.6 million in cash from operations, and we continue to take aggressive steps to reduce costs and improve our balance sheet. In this regard, we also paid down a portion of our European debt at a 15% discount of its face value, subsequent to the quarter's close."

"Going forward, our focus will be on right-sizing our business to meet market demand, margin preservation, and generating cash from operations. To that end, we implemented headcount reductions and restricted production schedules in North America during the first half of 2020, and we continued this process further in the third quarter. We expect to generate an additional annualized savings of approximately $5.4 million from these actions. We are preparing for lower demand, exacerbated by the COVID-19 pandemic, which may persist throughout the year, particularly in the Manitex straight-mast crane side of the business. We anticipate continued modest growth at PM, and hope to close out the year with COVID-19 behind us, with PM on pace to reach sales levels not seen since the last uptick in global equipment sales, continued joint sales with our partner, Tadano, and a stabilization of demand in North American crane markets," 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 866-269-4262 if calling within the United States or 323-289-6576 if calling internationally. A replay will be available until August 13, 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 3902647 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 six month periods ended June 30, 2020 and 2019, unless otherwise indicated. A reconciliation of Adjusted GAAP financial measures for the three and six month periods ended June 30, 2020 and 2019 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
June 30,
    As of
December 31,
 
 
  2020     2019  
 
  Unaudited     Unaudited  
ASSETS
           
Current assets
           
Cash
  $ 26,214     $ 23,327  
Cash - restricted
    5,098       217  
Trade receivables (net)
    28,285       34,725  
Other receivables
    1,692       1,033  
Inventory (net)
    59,060       57,818  
Prepaid expense and other
    4,950       4,706  
Current assets of discountinued operations
    1,601       1,591  
Total current assets
    126,900       123,417  
Total fixed assets, net of accumulated depreciation of $17,688 and $16,818
at June 30, 2020 and December 31, 2019, respectively
    18,461       19,035  
Operating lease assets
    2,104       2,174  
Intangible assets (net)
    15,807       17,032  
Goodwill
    25,958       32,635  
Other long-term assets
    204       281  
Deferred tax asset
    415       441  
Long-term assets of discountinued operations
    294       413  
Total assets
  $ 190,143     $ 195,428  
LIABILITIES AND EQUITY
               
Current liabilities
               
Notes payable
  $ 17,593     $ 18,212  
Covertible note-related party (net)
    7,410       7,323  
Convertible note (net)
    7,951       -  
Current portion of finance lease obligations
    436       476  
Current portion of operating lease liabilities
    742       813  
Accounts payable
    29,667       29,593  
Accounts payable related parties
    228       228  
Accrued expenses
    9,610       9,138  
Customer deposits
    1,374       1,493  
Deferred income
    3,747          
Current liabilities of discountinued operations
    826       800  
Total current liabilities
    79,584       68,076  
Long-term liabilities
               
Revolving term credit facilities
    8,500       -  
Notes payable (net)
    19,444       19,446  
Finance lease obligation (net of current portion)
    4,395       4,584  
Non-current operating lease liabilities
    1,362       1,361  
Convertible note (net)
    -       14,760  
Deferred gain on sale of property
    627       667  
Deferred tax liability
    627       721  
Other long-term liabilities
    5,634       5,913  
Long-term liabilities of discountinued operations
    350       350  
Total long-term liabilities
    40,939       47,802  
Total liabilities
    120,523       115,878  
Commitments and contingencies
               
Equity
               
Preferred Stock-Authorized 150,000 shares, no shares issued or outstanding at
June 30, 2020 and December 31, 2019
    -       -  
Common Stock-no par value 25,000,000 shares authorized, 19,760,480 and 19,713,185
shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
    131,135       130,710  
Paid in capital
    2,780       2,793  
Retained deficit
    (60,406 )     (50,253 )
Accumulated other comprehensive loss
    (3,889 )     (3,700 )
Total equity
    69,620       79,550  
Total liabilities and equity
  $ 190,143     $ 195,428  
                 

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

             
 
  Three Months Ended
June 30,
    Six Months Ended
June 30,
 
 
  2020     2019     2020     2019  
 
  Unaudited     Unaudited              
Net revenues
  $ 37,115     $ 57,379     $ 85,848     $ 111,804  
Cost of sales
    31,584       46,881       70,070       89,314  
Gross profit
    5,531       10,498       15,778       22,490  
Operating expenses
                               
Research and development costs
    771       706       1,458       1,393  
Selling, general and administrative expenses
    6,725       9,561       14,764       18,677  
Impairment of intangibles
    -       -       6,722       -  
Total operating expenses
    7,496       10,267       22,944       20,070  
Operating (loss) income
    (1,965 )     231       (7,166 )     2,420  
Other expense
                               
Interest expense
    (924 )     (1,069 )     (2,008 )     (2,177 )
Interest income
    14       51       74       120  
Change in fair value of securities held
    -       4,428       -       5,238  
Foreign currency transaction loss
    (24 )     22       (442 )     (411 )
Other income (expense)
    (159 )     10       (156 )     (11 )
Total other expense
    (1,093 )     3,442       (2,532 )     2,759  
(Loss) Income before income taxes from continuing operations
    (3,058 )     3,673       (9,698 )     5,179  
Income tax expense from continuing operations
    (657 )     378       (253 )     575  
Net (loss) income from continuing operations
  $ (2,401 )   $ 3,295     $ (9,445 )   $ 4,604  
Discontinued operations
                               
Loss from operations of discontinued operations
    (323 )     (57 )     (711 )     (503 )
Income tax expense (benefit)
    (47 )     2       (3 )     (45 )
Loss from discontinued operations
    (276 )     (59 )     (708 )     (458 )
Net (loss) income
    (2,677 )     3,236       (10,153 )     4,146  
(Loss) earnings per share
                               
Basic
                               
(Loss) earnings from continuing operations
  $ (0.12 )   $ 0.17     $ (0.48 )   $ 0.23  
Loss from discontinued operations
  $ (0.01 )   $ -     $ (0.04 )   $ (0.02 )
Net (loss) earnings
  $ (0.14 )   $ 0.16     $ (0.51 )   $ 0.21  
Diluted
                               
(Loss) earnings from continuing operations
  $ (0.12 )   $ 0.17     $ (0.48 )   $ 0.23  
Loss from discontinued operations
  $ (0.01 )   $ -     $ (0.04 )   $ (0.02 )
Net (loss) earnings
  $ (0.14 )   $ 0.16     $ (0.51 )   $ 0.21  
Weighted average common shares outstanding
                               
Basic
    19,762,726       19,685,251       19,748,249       19,681,666  
Diluted
    19,762,726       19,734,195       19,748,249       19,714,584  
                                 

Note: Results shown are from Continuing Operations
Net Sales and Gross Margin % (in thousands)

       
 
  Three Months Ended  
 
  June 30, 2020     March 31, 2020     June 30, 2019  
 
  As Reported     As Adjusted     As Reported     As Adjusted     As Reported     As Adjusted  
Net sales
  37,115     37,115     48,733     48,733     57,379     57,379  
% change Vs Q1 2020
    -23.8 %     -23.8 %                                
% change Vs Q2 2019
    -35.3 %     -35.3 %                                
% change Vs Q2 2019 without FX impact
            -34.8 %                                
 
                                               
Gross margin % of net sales
    14.9 %     15.6 %     21.0 %     21.2 %     18.3 %     19.1 %
Gross margin % of net sales (value-add)
            16.3 %             22.7 %             20.7 %
                                                 
 
  Six Months Ended  
 
  June 30, 2020     June 30, 2019  
 
  As Reported     As Adjusted     As Reported     As Adjusted  
Net sales
  85,848     85,848     111,804     111,804  
% change Vs prior year
    -23.2 %     -23.2 %                
% change Vs prior year without FX impact
            -22.3 %                
 
                               
Gross margin % of net sales
    18.4 %     18.7 %     20.1 %     21.0 %
Gross margin % of net sales (value-add)
            19.8 %             22.5 %
                                 

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

             
 
  Three Months Ended     Six Months Ended  
 
  June 30,
2020
    March 31,
2020
    June 30,
2019
    June 30,
2020
    June 30,
2019
 
Operating (loss) income
  (1,965 )   (5,201 )   231     (7,166 )   2,420  
Adjustments related to trade show, customer declared bankruptcy, discontinued model, goodwill and intangible asset impairment, plant closing, restatement, restricted stock, restructuring and other expenses
    574       7,668       2,356       8,242       3,175  
Adjusted operating (loss) income
    (1,391 )     2,467       2,587       1,076       5,595  
Depreciation and amortization
    1,055       1,038       1,098       2,093       2,164  
Adjusted EBITDA
    (336)     3,505     3,685     3,169     7,759  
Adjusted EBITDA % to sales
    -0.9 %     7.2 %     6.4 %     3.7 %     6.9 %

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

             
 
  Three Months Ended     Six Months Ended  
 
  June 30,
2020
    March 31,
2020
    June 30,
2019
    June 30,
2020
    June 30,
2019
 
Net (loss) income
  (2,401 )   (7,044 )   3,295     (9,445 )   4,604  
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)
    736       8,623       (2,128 )     9,383       (1,870 )
Adjusted net (loss) income
  (1,665 )   1,579     1,167     (62 )   2,734  
Weighted diluted shares outstanding
    19,762,726       19,733,772       19,734,195       19,748,249       19,714,584  
Diluted (loss) earnings per shares as reported
  (0.12 )   (0.36 )   0.17     (0.48 )   0.23  
Total EPS effect
  0.04     0.44     (0.11 )   0.48     (0.09 )
Adjusted diluted (loss) earnings per share
  (0.08 )   0.08     0.06     (0.00 )   0.14  
                                         

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

             
 
  Three Months Ended     Six Months Ended  
Adjustments
  June 30,
2020
    March 31,
2020
    June 30,
2019
    June 30,
2020
    June 30,
2019
 
Covid-19 related expense
  111     0     0     111     0  
Customer declared bankruptcy - bad debt
    -       -       284       -       284  
Discontinued model
    124       69       305       193       305  
Goodwill and intangible asset impairment
    -       6,722       -       6,722       -  
Legal settlement
    -       -       67       -       67  
Plant closing
    -       -       -       -       44  
Restatement expenses
    -       -       98       -       147  
Restricted stock
    203       222       141       425       300  
Restructuring
    35       1       751       36       1,105  
Trade show
    58       546       281       604       281  
Other expenses
    43       108       429       151       642  
Total adjustments to operating income (loss)
  574     7,668     2,356     8,242       3,175  
Change in fair market value of securities
    -       -       (4,428 )     -       (5,238 )
Foreign exchange
    24       418       (22 )     442       411  
Other expenses
    162       -       -       162       -  
Total pre-tax adjustments
  760     8,086     (2,094)     8,846     (1,652)  
Net tax impact (including discrete items)
    (24 )     537       (34 )     537       (218 )
Total adjustments
  736     8,623     (2,128)     9,383       (1,870)  
                                         

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.

                               
 
  Jun 30,
2020
    Mar 31,
2020
    Dec 31,
2019
    Sep 30,
2019
    Jun 30,
2019
 
Backlog from continuing operations
  44,272     57,045     65,263     56,207     53,695  
Change Versus Current Period
            -22.4 %     -32.2 %     -21.2 %     -17.5 %
                                         

Note: Backlog was $48,414 as of July 24, 2020

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.

             
 
  June 30,
2020
    December 31,
2019
 
Total cash & cash equivalents
  31,312     23,544  
 
               
Notes payable - short term
  17,593     18,212  
Current portion of finance leases
    436       476  
Convertible notes
    15,361       22,083  
Notes payable - long term
    19,444       19,446  
Finance lease obligations
    4,395       4,584  
Revolver
    8,500       -  
Total debt
  65,729     64,801  
 
               
Net debt
  34,417     41,257  
                 

SOURCE: Manitex International, Inc.

Manitex International, Inc.
Exchange:
Ticker:
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MNTX
$4.11
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