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Manitex International, Inc. Reports Third Quarter 2020 Results

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BRIDGEVIEW, IL / ACCESSWIRE / November 5, 2020 / Manitex International, Inc. (NASDAQ:MNTX), a leading international provider of cranes and specialized industrial equipment, today announced third quarter 2020 results. Net revenues from continuing operations for the third quarter were $36.5 million, compared to $50.6 million in the prior year's period, and net loss from continuing operations was $(1.4) million, or $(0.07) per share, compared to net loss of $4.5 million or $(0.23) per share, in the third quarter of 2019. Adjusted net loss* from continuing operations in the third quarter of 2020 was $(1.0) million, or $(0.05) per share, compared to adjusted net income of $0.8 million, or $0.04 per share, for the third quarter of 2019.

Financial Highlights:

  • Net revenues were $36.5 million, a decline of 1.7% compared to the prior quarter of 2020

  • Gross margin improved 340 Basis Points to 18.3%, compared to the prior quarter of 2020

  • SG&A declined $0.3 million compared to Q2 and $1.3 million compared to third quarter 2019

  • Net Loss was $1.4 million, or $(0.07) per share or $1.0 million, or $(0.05) as adjusted* compared to a loss of $2.4 million, or $(0.12) or $(0.08) as adjusted in the prior quarter of 2020

  • Adjusted EBITDA* had a positive swing of $1.3 million to $0.9 million for the quarter, as compared to the prior quarter of 2020

  • Realized quarterly cost savings of $1.1 million due to restructuring and other cost savings measures implemented in 2020

  • Reduced net debt by $6.5 million from year end to $34.7 million as of September 30, 2020 through the payoff of PM term and unsecured debt

  • Available liquidity through cash and credit lines of approximately $41 million as of September 30, 2020

Note: Results presented above 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 was $56.6 million as of October 31, 2020, an improvement of 28% since June 30, 2020

  • PM backlog at $29.1 million, as of October 31, 2020, represents over 50% of total backlog

  • The Company secured a purchase order from an international military entity for approximately $2.5 million with an optional $2.3 million in additional deliveries

  • The Company was awarded a contract by Collè Rental & Sales, of Sittard, Netherlands, for Valla electric cranes, valued at approximately $2.5 million

  • Completed the sale of Manitex-Sabre for cash proceeds of $1.6 million

  • Subsequent to the quarter-end, announced the appointment of Joe Doolan, CFO

Steve Filipov, CEO of Manitex International commented," Our third quarter results were in line with our expectations, with a significant improvement in profitability from the second quarter of 2020. We reported a $1.3 million improvement in adjusted EBITDA of $900,000, or 2.6% of sales versus a loss of approximately $300,000 in the second quarter. The COVID-19 pandemic continues to create uncertainty in our markets, but we continue do the utmost to protect the safety and health of our teams and their families by strengthening our safety protocols to adapt to this changing environment."

"While we were impacted by the seasonal 2-week summer shut down in our European operations and sporadic furloughs at our Georgetown facility, we continued to take steps to protect our employees, shareholders, and adapt to a challenging environment. Our backlog has started to grow again and is up nearly 30% since the end of June, the strategic initiatives we have implemented at the PM Group both on the revenue side are driving improved performance for in both our knuckle boom products and our truck-mounted aerials year-over-year."

"We have also seen a positive trend in demand for our zero-emission Valla crane products and signed a significant order with a rental customer in Europe. We are continuing to invest in new products and technologies in this business as we see the demand coming from our customers to move to more environmentally friendly products."

"We executed a restructuring plan at our Georgetown and Winona facilities in July, and while the market for boom trucks in trending down approximately 25%, we were able to secure an extended military order for knuckle booms, and we have seen some promising order pick up in the past few weeks on boom trucks. We also launched a new 65-ton boom truck with the longest boom in its category, as well as a new 45-ton boom truck for specialty utility markets in the US. We anticipate initial orders for these cranes from our distributors for 2021 deliveries."

"Finally, we continue to focus on improving our balance sheet and have generated $3 million of cash since the beginning of 2020, to ensure we have the liquidity to weather the current economic environment. With our $41M in liquidity, we are confident we have the ability to pay down our upcoming debt requirements, with opportunity to deliver more cash as we close out 2020 and continue to focus on reducing our finished goods inventory."

Outlook:

"The reality of COVID-19 and other macro economic uncertainties, makes it difficult to give more substantial guidance, but we remain optimistic about fourth quarter performance. Given the uptick in orders and backlog, we expect our revenues to trend higher to a range of $40 million - $43 million, with the bottom line improving from our continued focus on margin recovery," concluded Mr. Filipov.

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 800-952-1438 if calling within the United States or 312-429-0433 if calling internationally. A replay will be available until November 12, 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 21971355 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, 2020 and 2019, unless otherwise indicated. A reconciliation of Adjusted GAAP financial measures for the three and nine month periods ended September 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, 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
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)

September 30,
2020

December 31,
2019

ASSETS

Current assets

Cash

$

23,331

$

23,327

Cash - restricted

231

217

Trade receivables (net)

29,916

34,725

Other receivables

997

1,033

Inventory (net)

58,641

57,818

Prepaid expense and other current assets

4,392

4,706

Current assets of discontinued operations

180

1,591

Total current assets

117,688

123,417

Total fixed assets, net of accumulated depreciation of $18,551 and $16,818
at September 30, 2020 and December 31, 2019, respectively

18,531

19,035

Operating lease assets

2,160

2,174

Intangible assets (net)

15,752

17,032

Goodwill

26,699

32,635

Other long-term assets

168

281

Deferred tax asset

415

441

Long-term assets of discontinued operations

-

413

Total assets

$

181,413

$

195,428

LIABILITIES AND EQUITY

Current liabilities

Notes payable

$

17,832

$

18,212

Convertible note - related party (net)

7,455

7,323

Convertible note (net)

7,976

-

Current portion of finance lease obligations

352

476

Current portion of operating lease liabilities

761

813

Accounts payable

29,337

29,593

Accounts payable related parties

33

228

Accrued expenses

9,265

9,138

Customer deposits

1,669

1,493

Deferred income liability

3,747

-

Current liabilities of discontinued operations

215

800

Total current liabilities

78,642

68,076

Long-term liabilities

Revolving term credit facilities

5,000

-

Notes payable (net)

15,368

19,446

Finance lease obligations (net of current portion)

4,311

4,584

Non-current operating lease liabilities

1,398

1,361

Convertible note (net)

-

14,760

Deferred gain on sale of property

607

667

Deferred tax liability

959

721

Other long-term liabilities

5,795

5,913

Long-term liabilities of discontinued operations

-

350

Total long-term liabilities

33,438

47,802

Total liabilities

112,080

115,878

Commitments and contingencies

Equity

Preferred Stock-Authorized 150,000 shares, no shares issued or outstanding at
September 30, 2020 and December 31, 2019

-

-

Common Stock-no par value 25,000,000 shares authorized, 19,794,316 and 19,713,185
shares issued and outstanding at September 30, 2020, and December 31, 2019, respectively

131,276

130,710

Paid in capital

2,870

2,793

Retained deficit

(61,977

)

(50,253

)

Accumulated other comprehensive loss

(2,836

)

(3,700

)

Total equity

69,333

79,550

Total liabilities and equity

$

181,413

$

195,428

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,

2020

2019

2020

2019

Net revenues

$

36,466

$

50,599

$

122,314

$

162,403

Cost of sales

29,807

42,164

99,877

131,478

Gross profit

6,659

8,435

22,437

30,925

Operating expenses

Research and development costs

788

497

2,246

1,890

Selling, general and administrative expenses

6,462

7,808

21,226

26,485

Impairment of intangibles

-

1,539

6,722

1,539

Total operating expenses

7,250

9,844

30,194

29,914

Operating (loss) income

(591

)

(1,409

)

(7,757

)

1,011

Other (expense) income

Interest expense

(825

)

(1,121

)

(2,833

)

(3,298

)

Interest income

6

41

80

161

Gain on extinguishment of debt

595

-

595

-

Change in fair value of securities held

-

216

-

5,454

Foreign currency transaction loss

(229

)

(307

)

(671

)

(718

)

Other expense

(341

)

(11

)

(497

)

(22

)

Total other (expense) income

(794

)

(1,182

)

(3,326

)

1,577

(Loss) income before income taxes from continuing operations

(1,385

)

(2,591

)

(11,083

)

2,588

Income tax expense (benefit) from continuing operations

62

1,874

(191

)

2,449

Net (loss) income from continuing operations

(1,447

)

(4,465

)

(10,892

)

139

Discontinued operations

Loss from operations of discontinued operations

(120

)

(7,302

)

(831

)

(7,805

)

Income tax expense

4

84

1

39

Loss from discontinued operations

(124

)

(7,386

)

(832

)

(7,844

)

Net loss

(1,571

)

(11,851

)

(11,724

)

(7,705

)

(Loss) earnings Per Share

Basic

(Loss) earnings from continuing operations

$

(0.07

)

$

(0.23

)

$

(0.55

)

$

0.01

Loss from discontinued operations

$

(0.01

)

$

(0.38

)

$

(0.04

)

$

(0.40

)

Net loss

$

(0.08

)

$

(0.60

)

$

(0.59

)

$

(0.39

)

Diluted

(Loss) earnings from continuing operations

$

(0.07

)

$

(0.23

)

$

(0.55

)

$

0.01

Loss from discontinued operations

$

(0.01

)

$

(0.38

)

$

(0.04

)

$

(0.40

)

Net loss

$

(0.08

)

$

(0.60

)

$

(0.59

)

$

(0.39

)

Weighted average common shares outstanding

Basic

19,778,225

19,690,233

19,758,241

19,684,521

Diluted

19,778,225

19,690,233

19,758,241

19,715,072

Note: Results shown are from Continuing Operations

Net Sales and Gross Margin %

Three Months Ended

September 30, 2020

June 30, 2020

September 30, 2019

As Reported

As Adjusted

As Reported

As Adjusted

As Reported

As Adjusted

Net sales

$

36,466

$

36,466

$

37,115

$

37,115

$

50,599

$

50,599

% change Vs Q2 2020

-1.7

%

-1.7

%

% change Vs Q3 2019

-27.9

%

-27.9

%

% change Vs Q3 2019 without FX impact

-29.9

%

Gross margin % of net sales

18.3

%

18.4

%

14.9

%

15.6

%

16.7

%

18.3

%

Gross margin % of net sales (value-add)

19.8

%

16.3

%

20.1

%

Nine Months Ended

September 30, 2020

September 30, 2019

As Reported

As Adjusted

As Reported

As Adjusted

Net sales

$

122,314

$

122,314

$

162,403

$

162,403

% change Vs prior year

-24.7

%

-24.7

%

% change Vs prior year without FX impact

-24.7

%

Gross margin % of net sales

18.3

%

18.6

%

19.0

%

20.2

%

Gross margin % of net sales (value-add)

19.8

%

21.7

%

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

Three Months Ended

Nine Months Ended

September 30, 2020

June 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

Operating (loss) income

$

(591

)

$

(1,965

)

$

(1,409

)

$

(7,757

)

$

1,011

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

483

574

2,839

8,725

6,014

Adjusted operating (loss) income

(108

)

(1,391

)

1,430

968

7,025

Depreciation and amortization

1,052

1,055

1,073

3,145

3,237

Adjusted EBITDA

944

$

(336)

$

2,503

$

4,113

$

10,262

Adjusted EBITDA % to sales

2.6

%

-0.9

%

4.9

%

3.4

%

6.3

%

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

Three Months Ended

Nine Months Ended

September 30,
2020

June 30,
2020

September 30, 2019

September 30,
2020

September 30,
2019

Net (loss) income

$

(1,447

)

$

(2,401

)

$

(4,465

)

$

(10,892

)

$

139

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)

437

736

5,248

9,820

3,378

Adjusted net (loss) income

$

(1,010

)

$

(1,665

)

$

783

$

(1,072

)

$

3,517

Weighted diluted shares outstanding

19,778,225

19,762,726

19,690,233

19,758,241

19,715,072

Diluted (loss) earnings per shares as reported

$

(0.07

)

$

(0.12

)

$

(0.23

)

$

(0.55

)

$

0.01

Total EPS effect

$

0.02

$

0.04

$

0.27

$

0.50

$

0.17

Adjusted diluted (loss) earnings per share

$

(0.05

)

$

(0.08

)

$

0.04

$

(0.05

)

$

0.18

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

Nine Months Ended

Adjustments

September 30,
2020

June 30,
2020

September 30,
2019

September 30,
2020

September 30,
2019

Restricted stock

$

233

$

203

$

148

$

658

448

Other expenses

95

43

366

246

1,008

Legal settlement

85

-

-

85

67

Restructuring

42

35

99

78

1,204

Covid-19 related expense

28

111

-

139

$

0

Customer declared bankruptcy - bad debt

-

-

140

-

424

Discontinued model

-

124

446

193

751

Goodwill and intangible asset impairment

-

-

1,539

6,722

1,539

Plant closing

-

-

-

-

44

Restatement expenses

-

-

22

-

169

Trade show

-

58

79

604

360

Total adjustments to operating income (loss)

$

483

$

574

$

2,839

$

8,725

$

6,014

Change in fair market value of securities

-

-

(216

)

-

(5,454

)

Foreign exchange

229

24

307

671

718

Other (income) expenses

(245

)

162

-

(83

)

-

Total pre-tax adjustments

$

467

$

760

$

2,930

$

9,313

$

1,278

Net tax impact (including discrete items)

(30

)

(24

)

2,318

507

2,100

Total adjustments

$

437

$

736

$

5,248

$

9,820

3,378

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, 2020

Jun 30, 2020

Mar 31, 2020

Dec 31, 2019

Sep 30, 2019

Backlog from continuing operations

$

50,541

$

44,272

$

57,045

$

65,263

$

56,207

Change Versus Current Period

14.2

%

-11.4

%

-22.6

%

-10.1

%

Note: Backlog was $56,644 as of October 31, 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.

September 30, 2020

December 31, 2019

Total cash & cash equivalents

$

23,562

$

23,544

Notes payable - short term

$

17,832

$

18,212

Current portion of finance leases

352

476

Convertible notes

15,431

22,083

Notes payable - long term

15,368

19,446

Finance lease obligations

4,311

4,584

Revolver

5,000

-

Total debt

$

58,294

$

64,801

Net debt

$

34,732

$

41,257

SOURCE: Manitex International, Inc.



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