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Manitex International, Inc. Reports Second Quarter 2019 Results

BRIDGEVIEW, IL / ACCESSWIRE / August 8, 2019 / Manitex International, Inc. (MNTX), a leading international provider of cranes and specialized industrial equipment, today announced second quarter 2019 results. Net revenues for the second quarter were $61.0 million, compared to $57.4 million in the first quarter, and net income was $3.2 million, or $0.16 per share, compared to $910,000, or $0.05 per share, in the first quarter of 2019. Adjusted net income* in the second quarter 2019 was $1.1 million, or $0.06 per share, compared to adjusted net income of $1.2 million, or $0.06 per share, for the first quarter of 2019.

Financial Highlights (sequential comparisons, unless otherwise noted):

  • Net revenues of $61.0 million, up 6% from Q1 2019, down 5% vs. prior year or 2% excluding unfavorable FX

  • Earnings per share improved to $0.16 compared to $0.05 from Q1 2019

  • Adjusted earnings per share at $0.06, flat compared to Q1 2019

  • Cash flow from operating activities improved by $5.9 million YTD compared to prior year

  • Net debt reduction of $5.2 million in Q2 2019

  • Modest pickup in backlog from quarter-end to $63.1 million as of July 31, 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:

  • Added four new dealers, globally, for Manitex and PM cranes

  • Announced the launch of new 60-Ton Series TC600, with deliveries beginning in the second half of 2019

  • Shipped first PM articulating crane units to Tadano dealers in Asia with PM/Tadano branding; additional shipments expected throughout 2019

  • Secured an order for PM cranes from a military customer in Asia valued at $1.0 million

Chief Executive and Chairman David J. Langevin commented, “While market activity was indicating a year of consistent, steady growth coming out of 2018 and into the earlier part of the year, we have seen some moderation of demand, particularly with the volatility in the North American markets, as we progressed through the second quarter, similar to what we experienced in 2018. Second quarter sales were six percent higher, sequentially, compared to the first quarter of the year, but slightly down on a year-over-year basis, excluding $1.5 million in foreign currency exchange impact. We maintained our value-add gross margins in the 20% range, and EBITDA margins remained in the 6% range. Net debt was reduced by $5 million with total net debt now down to $44 million from over $49 million at the end of the first quarter. Our second quarter GAAP earnings were impacted substantially by the increase in value of our holdings in ASV resulting from the announcement of the pending sale of ASV to Yanmar. When this sale is completed, we will receive approximately $7.5 million in cash further strengthening our balance sheet.”

“As a company that has always been able to quickly respond to changes in the market place, we have modestly reduced our second quarter production levels at our manufacturing facilities, and until we see a consistent increasing order trend in the market we expect to stay at these levels for the remainder of the year. By taking these actions we believe we will improve our working capital positions and therefore expand our cash position and further strengthen our balance sheet. We can also take this opportunity to improve our operating margins, especially in our facilities outside the United States. Finally, in addition to the prudent management of our production, overhead, and overall cost structure, we expect new product introductions and higher levels of activity from our relationship with Tadano and its global distribution partners to drive sales higher and lead to EBITDA margins to levels more in line with our targets, which is 10% or better,” concluded Mr. Langevin.

Steve Kiefer, President and Chief Operating Officer of Manitex added, “During the second quarter we focused on cost-containment, efficiently meeting customer demand, developing new products, and expanding the dealer network, worldwide. Tightness in certain parts of the supply chain, primarily truck chassis, impacted our operations somewhat in the quarter and we are seeing improvement as we move through the third quarter. Dealer order levels exhibited a seasonal decrease that slightly exceeded our expectations with a second quarter book-to-bill ratio of .71 versus .81 during the same period in 2018. Our backlog, which stood at approximately $63 million at the end of July, is showing some pockets of strength, particularly at PM, and in general the construction, utility, government and rental markets. Data we’ve seen indicate that dealer rental utilization and US commercial construction indices remain at healthy levels.”

“Ongoing dealer development efforts we’ve undertaken resulted in higher sales at PM in the quarter, and continuing to grow this business, which is far less cycle-dependent compared to our North American business, remains the top priority for our sales team as each percentage point of market share gained translates to approximately $25 million in incremental revenue. During the quarter we welcomed four new dealers to our global dealer network for our Manitex and PM lines. We are also beginning to see some benefits from our new product development initiatives with PM receiving a one-million-dollar order from an Asian military customer in the quarter, and we anticipate additional announcements in the near-future from the government & military market segments. Other new product development activity includes the addition of a 60-ton crane to our industry-leading line of Manitex straight-mast cranes. We look forward to the public unveiling and launch of this important new model at the International Construction & Utility Equipment Exposition in Louisville, KY this coming October.”

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 888-599-8686 if calling within the United States or 323-994-2093 if calling internationally. A replay will be available until August 15, 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 4232591 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, 2019 and 2018, unless otherwise indicated. A reconciliation of Adjusted GAAP financial measures for the three and six month periods ended June 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. 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
skiefer@manitex.com

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

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

As of June
30,

As of December 31,

2019

2018

ASSETS

Current assets

Cash

$

17,721

$

22,103

Cash - restricted

236

245

Marketable equity securities

7,398

2,160

Trade receivables (net)

39,621

45,448

Other receivables

857

2,374

Inventory (net)

71,525

58,024

Prepaid expense and other

3,308

1,639

Total current assets

140,666

131,993

Total fixed assets, net of accumulated depreciation of $15,856 and $14,826

at June 30, 2019 and December 31, 2018, respectively

20,268

20,249

Operating lease assets

2,931

-

Intangible assets (net)

23,366

24,773

Goodwill

36,122

36,298

Other long-term assets

1,302

1,570

Deferred tax asset

2,099

2,366

Total assets

$

226,754

$

217,249

LIABILITIES AND EQUITY

Current liabilities

Notes payable

$

19,734

$

22,706

Current portion of capital lease obligations

449

422

Current portion of operating lease liabilities

1,073

-

Accounts payable

44,378

36,896

Accounts payable related parties

182

1,371

Accrued expenses

9,874

9,249

Customer deposits

1,375

2,310

Total current liabilities

77,065

72,954

Long-term liabilities

Notes payable (net)

22,879

23,134

Capital lease obligation (net of current portion)

4,831

5,061

Non-current operating lease liabilities

1,871

-

Convertible note related party (net)

7,239

7,158

Convertible note (net)

14,644

14,530

Deferred gain on sale of property

707

842

Deferred tax liability

21

92

Other long-term liabilities

5,422

5,474

Total long-term liabilities

57,614

56,291

Total liabilities

134,679

129,245

Commitments and contingencies

Equity

Preferred Stock-Authorized 150,000 shares, no shares issued or outstanding at

June 30, 2019 and December 31, 2018

-

-

Common Stock-no par value 25,000,000 shares authorized, 19,682,713 and 19,645,773

shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively

130,575

130,260

Paid in capital

2,640

2,674

Retained deficit

(37,615

)

(41,761

)

Accumulated other comprehensive loss

(3,525

)

(3,169

)

Total equity

92,075

88,004

Total liabilities and equity

$

226,754

$

217,249

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

Three Months Ended
June 30,

Six Months Ended
June 30,

2019

2018

2019

2018

Unaudited

Unaudited

Net revenues

$

60,969

$

63,904

$

118,389

$

120,579

Cost of sales

50,134

51,463

95,606

97,038

Gross profit

10,835

12,441

22,783

23,541

Operating expenses

Research and development costs

707

726

1,394

1,378

Selling, general and administrative expenses

9,930

9,008

19,426

18,994

Total operating expenses

10,637

9,734

20,820

20,372

Operating income

198

2,707

1,963

3,169

Other (expense) income

Interest expense

(1,095

)

(1,503

)

(2,226

)

(3,056

)

Interest income

51

-

120

-

Change in fair value of securities held

4,428

(1,588

)

5,238

(1,401

)

Foreign currency transaction loss

22

(106

)

(411

)

(225

)

Other expense

12

29

(8

)

(325

)

Total other expense

3,418

(3,168

)

2,713

(5,007

)

Income (loss) before income taxes and loss in equity
interest

3,616

(461

)

4,676

(1,838

)

Income tax expense (benefit)

380

506

530

205

Loss on equity investments (including loss on sale of shares)

-

-

-

(409

)

Net Income (loss)

3,236

(967

)

4,146

(2,452

)

Earnings (loss) Per Share

Basic

$

0.16

$

(0.05

)

$

0.21

$

(0.14

)

Diluted

$

0.16

$

(0.05

)

$

0.21

$

(0.14

)

Weighted average common shares outstanding

Basic

19,685,251

17,734,383

19,681,666

17,200,660

Diluted

19,734,195

17,734,383

19,714,584

17,200,660

Net Sales and Gross Margin % (in thousands)

Three Months Ended

June 30, 2019

March 31, 2019

June 30, 2018

As Reported

As Adjusted

As Reported

As Adjusted

As Reported

As Adjusted

Net sales

$

60,969

$

60,969

$

57,420

$

57,420

$

63,904

$

63,904

% change Vs Q1 2019

6.2

%

6.2

%

% change Vs Q2 2018

-4.6

%

-4.6

%

% change Vs Q2 2018 without FX impact

-2.3

%

Gross margin % of net sales

17.8

%

18.6

%

20.8

%

21.7

%

19.5

%

19.8

%

Gross margin % of net sales (value-add)

20.0

%

22.8

%

20.6

%

Six Months Ended

June 30, 2019

June 30, 2018

As Reported

As Adjusted

As Reported

As Adjusted

Net sales

$

118,389

$

118,389

$

120,579

$

120,579

% change Vs prior year

-1.8

%

-1.8

%

% change Vs prior year without FX impact

1.0

%

Gross margin % of net sales

19.2

%

20.1

%

19.5

%

20.0

%

Gross margin % of net sales (value-add)

21.3

%

19.9

%

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

Three Months Ended

Six Months Ended

June 30,
2019

March 31,
2019

June 30,
2018

June 30,
2019

June 30,
2018

Operating income

$

198

$

1,765

$

2,707

$

1,963

$

3,169

Adjustments related to Bauma trade show, customer declared bankruptcy, discontinued model, plant closing, restatement, restricted stock, restructuring and other expenses

2,356

819

1,196

3,175

3,138

Adjusted operating income

2,554

2,584

3,903

5,138

6,307

Depreciation and amortization

1,217

1,183

1,258

2,400

2,551

Adjusted EBITDA

$

3,771

$

3,767

$

5,161

$

7,538

$

8,858

Adjusted EBITDA % to sales

6.2

%

6.6

%

8.1

%

6.4

%

7.3

%

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

Three Months Ended

Six Months Ended

June 30,
2019

March 31,
2019

June 30,
2018

June 30,
2019

June 30, 2018

Net income (loss)

$

3,236

$

910

$

(967

)

$

4,146

$

(2,452

)

Adjustments related to change in fair value of securities, Bauma trade show, discontinued model, customer declared bankruptcy, foreign exchange, plant closing, restatement, restricted stock, restructuring, and other expenses (including net tax impact)

(2,128

)

258

2,859

(1,870

)

5,132

Adjusted net income

1,108

1,168

1,892

2,276

2,680

Weighted diluted shares outstanding

19,734,195

19,694,973

17,734,383

19,714,584

17,200,660

Diluted income (loss) per share as reported

$

0.16

$

0.05

$

(0.05

)

$

0.21

$

(0.14

)

Total EPS effect

$

(0.10

)

$

0.01

$

0.16

$

(0.09

)

$

0.30

Adjusted diluted earnings per share

$

0.06

$

0.06

$

0.11

$

0.12

$

0.16

Change in Fair Market Value of Securities, Bauma Trade Show, Discontinued Model, Foreign Exchange, Restatement, Restricted Stock, Restructuring, Plant Closing and Other Expenses

Three Months Ended

Six Months Ended

Pre-tax adjustments

June 30,
2019

March 31,
2019

June 30,
2018

June 30,
2019

June 30, 2018

Change in fair market value of securities

$

(4,428

)

$

(810

)

$

1,588

$

(5,238

)

$

1,997

Customer declared bankruptcy - bad debt

284

-

-

284

-

Bauma trade show

281

-

-

281

-

Discontinued model

305

-

188

305

188

Foreign exchange

(22

)

433

106

411

225

Plant closing

-

44

-

44

-

Restatement expenses

98

49

626

147

1,823

Restricted stock

141

159

268

300

391

Restructuring

751

354

74

1,105

654

Legal settlement

67

-

-

67

-

Other expenses

429

213

40

642

$

248

Total pre-tax adjustments

$

(2,094)

$

442

$

2,890

$

(1,652)

$

5,526

Net tax impact (including discrete items)

(34

)

(184

)

(31

)

(218

)

$

(394

)

Total adjustments

$

(2,128)

$

258

$

2,859

$

(1,870)

$

5,132

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,
2019

Mar 31,
2019

Dec 31,
2018

Sep 30,
2018

Jun 30, 2018

Backlog

$

56,625

$

74,885

$

66,735

$

60,477

$

75,601

Change Versus Current Period

-24.4

%

-15.1

%

-6.4

%

-25.1

%

Note: As of July 31, 2019 backlog was $63,108.

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,
2019

March 31,
2019

December 31,
2018

Cash & marketable equity securities

$

25,355

$

24,093

$

24,508

Notes payable - short term

$

19,734

$

23,835

$

22,706

Current portion of capital leases

449

436

422

Notes payable - long term

22,879

22,639

23,134

Capital lease obligations

4,831

4,947

5,061

Convertible notes

21,883

21,786

21,688

Total debt

$

69,776

$

73,643

$

73,011

Net debt

$

44,421

$

49,550

$

48,503

SOURCE: Manitex International, Inc.



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