Manitex International, Inc.’s (MNTX) second-quarter 2013 earnings per share increased 10% on a year-over-year basis to 22 cents a share and exceeded the Zacks Consensus Estimate of 20 cents. The growth was led by the execution of its strategy of marketing niche products.
Net revenue rose 19% year over year to $62 million. The results, however, fell short of the Zacks Consensus Estimate of $64 million. The year-over-year growth was led by an increase in production at the crane facility and improved sales for port-related equipment from CVS, partly offset by lower revenues from other material handling operations and equipment distribution.
Gross profit improved 13.8% to $12.3 million from $10.8 million in the prior-year quarter. Gross margin, however, contracted 90 basis points to 19.6% due to an increase in the mix of lower capacity cranes and chassis and reduction in higher margin parts sales.
Selling, general and administrative expenses increased 19% year over year to $7 million due to steeper employee-related costs from additional staff and incentive compensation.
Operating income was $4.6 million compared with $4.2 million in the prior-year quarter. Operating margin contracted 60 bps year over year to 7.4%. Net income went up 15% year over year to $2.7 million.
As of Jun 30, 2013 Manitex had cash and cash equivalents of $3.1 million, up from $1.9 million as of Dec 31, 2012. Total debt increased to $52.8 million as of Jun 30, 2013 from $49 million as of Dec 31, 2012, while debt-to-capitalization ratio remained flat at 45%.
Cash flow used in operating activities for the first half of 2013 was $2.1 million compared with $5.4 million in the same period of the prior-year. Total backlog as of Jun 30, 2013 was $96.6 million compared with $130.3 million as of Dec 31, 2012.
Manitex expects a modest economic improvement in U.S. and weakness to persist in Europe. Generally, the third quarter is stronger than the fourth for Manitex because of more production hours. This year, however, the company expects the reverse from the way production is being arranged at its facilities. While, the company remains optimistic about the introduction of new products allowing revenues to grow in the near term.
The recent softness in the energy sector continues as evident by a reduction in the North American rig count. However, Manitex believes this softening has bottomed out and the sector remains a source of significant growth potential in both the short and long term.
The company expects to generate 50% of its sales from the energy area and the balance from general commercial markets. Manitex remains committed to introduce ground breaking products with the introduction of the Manitex TC 70 crane which will provide significant sales upside.
Manitex also expects equipment in North America to be shifted to international operations. It will bring further advances and increases in equipment going into the next year.
In addition, Sabre acquisition will be a good fit for the company as it will provide further diversification of product line and end markets and lead to an above-average upside. The buyout also brings in various growth opportunities in the existing sales distribution network of Manitex.
Bridgeview, IL-based Manitex International is a leading provider of engineered lifting solutions including boom truck and rough terrain cranes, rough terrain forklifts, special mission oriented vehicles, container handling equipment and specialized engineered trailers.
Manitex currently retains a Zacks Rank #4 (Sell). Other stocks in the same industry with favorable Zacks ranks are EnPro Industries, Inc. (NPO), Gorman-Rupp Co. (GRC) and Graham Corp. (GHM). All three stocks carry a Zacks Rank #1 (Strong Buy).
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