Manitex International, Inc. Reports First Quarter 2020 Results

BRIDGEVIEW, IL / ACCESSWIRE / May 7, 2020 / Manitex International, Inc. (NASDAQ:MNTX), a leading international provider of cranes and specialized industrial equipment, today announced first quarter 2020 results. Net revenues from continuing operations for the first quarter were $48.7 million, compared to $53.1 million in the fourth quarter last year, and net loss from continuing operations was $(7.0) million, or $(0.36) per share, of which $(0.38) was attributable to a $6.7 million non-cash charge related to goodwill and intangible asset impairment. This compares to a slight loss, or $(0.00) per share in the fourth quarter of 2019. Adjusted net income* from continuing operations in the first quarter 2020 was $1.6 million, or $0.08 per share, compared to $1.3 million, or $0.07 per share, for the fourth quarter of 2019.

Q1 Financial Highlights (sequential comparisons, unless otherwise noted):

  • Net revenues of $48.7 million, declined 8.2%
  • Adjusted earnings per share* of $0.08, representing an improvement of 14%
  • Gross margin improved by 230 bps to 21.0%
  • Adjusted EBITDA* improved to $3.5 million, or 7.2% of sales
  • Non-cash goodwill and intangible asset impairment of $(6.7) million or $(0.38) per share results in a net loss
  • Available liquidity of approximately $46 million as of March 31, 2020, including over $22 million of cash and cash equivalents

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:

  • PM Group hits record sales and profitability
  • COVID-19 financial impact of $3 million in revenues due to shut downs
  • CONEXPO orders of $2 million
  • Backlog which was $57 million as of March 31, 2020, declined 12%
  • Book to bill ratio was 0.83:1 in Q1 2020
  • Sabre classified as “Discontinued Operation” in Q1 2020 and subsequent financial reports until a transaction is completed

“Our commitment to the health and safety of our employees, customers, and business partners, is the first priority for us at Manitex International, and we have taken every necessary step to keep our facilities clean and safe during the COVID-19 pandemic,” said Steve Filipov, CEO of Manitex International. “The team delivered another solid quarter in what continues to be a very challenging business environment. PM Group remains a very bright spot in our portfolio, and we have made notable progress towards our goal of achieving higher levels of penetration in the global articulating cranes market. As we announced in our annual update in March, we started 2020 with robust demand for PM products, but unfortunately with the outbreak of COVID-19 in Italy, we were forced to temporarily halt production at our Italian facilities on March 21st, 2020, with employees being told to stay home. After a 30-day hiatus, we have since reopened and resumed production as of April 21, 2020. And even with these limitations, we delivered higher revenues and improved Adjusted EBITDA, both sequentially and year over year, and the backlog, at approximately $28 million, gives us visibility, all things equal, for a year of solid growth for PM, with healthy double-digit Adjusted EBITDA margins that approach our long-term targets.”

“Turning to our North American operations, we had a slower start to the year and were able to make up some of the shortfall in March. Our operations remained opened during the pandemic, which has allowed us to deliver on our backlog, and as you may know, Texas is a particularly industry-friendly state and did not issue mandatory shut-down orders. Thus far, we have not experienced any COVID-19 cases in our North American facilities. Manitex straight mast crane delivered a quarter in line with our expectations, which also, as we’ve commented, was tempered by lower unit volume/shipments that have trended throughout the industry, and we do see some slowing in orders in stick boom cranes and industrial products, as we look forward into 2020.”

Mr. Filipov added, “We have now reopened our facilities in Italy and are now delivering cranes, parts, and services to our customers. While we had no cancellations or postponements from our customers in the quarter, and that is a notable difference from other downturns we’ve seen in the past, the situation remains difficult to forecast and we are taking every measure to reduce costs, conserve cash, and generate cash from operations. We have taken a number of measures globally to furlough employees, reduce work schedules, minimize capital expenditures, while operating within all the local laws and regulations and health and safety codes.”

“I am confident in our dedicated and diligent team, and we will navigate through this COVID-19 caused uncertainty by keeping focused on our customers, controlling our costs, and maintaining our liquidity,” concluded Mr. Filipov.

Steve Kiefer, President and Chief Operating Officer of Manitex added, “The dedicated team at Manitex worked hard to address the needs of our customers and dealers in the first quarter, which was subject to a not insignificant disruption with the global outbreak of COVID-19. Thanks to our multi-year diversification strategy, our products currently serve a diversified array of end-markets, supporting critical infrastructure needs. Energy sector net sales now represent less than 10% of our total sales, and our participation in critical market segments such as telecom, electrical utility, military, and construction continues to increase.”

“As the world started to respond to COVID-19, in addition to additional health and safety measures that we implemented, we began the second quarter with an increased focus on identifying and implementing actions to reduce costs, maintaining our liquidity and improving working capital performance. We believe that these cost-conscious measures will enable us to meet our margin targets and position us for recovery, when the equipment markets start to turn. On the revenues side, in early-April, we introduced over seven new or improved products at the CONEXPO trade show in Las Vegas. Customer reception to these products was positive and generated initial orders. We are also beginning shipments of a $5.4 Million order from an international military customer in the quarter, and we are pursuing additional military orders and anticipate further announcements in the coming months.”

“Going forward, we will continue monitoring overall economic conditions and take all appropriate actions necessary to weather the storm and emerge from the COVID-19 pandemic a stronger company,” concluded Mr. Kiefer

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 800-347-6311 if calling within the United States or 323-994-2132 if calling internationally. A replay will be available until May 14, 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 3703531 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-month periods ended March 31, 2020 and 2019, unless otherwise indicated. A reconciliation of Adjusted GAAP financial measures for the three-month periods ended March 31, 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
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)

             
 
  As of
March 31,
    As of
December 31,
 
 
  2020     2019  
 
  Unaudited     Unaudited  
ASSETS
           
Current assets
           
Cash
  $ 22,101     $ 23,327  
Cash – restricted
    219       217  
Trade receivables (net)
    34,897       34,725  
Other receivables
    2,648       1,033  
Inventory (net)
    64,360       57,818  
Prepaid expense and other
    5,050       4,706  
Current assets of discountinued operations
    1,597       1,591  
Total current assets
    130,872       123,417  
Total fixed assets, net of accumulated depreciation of $17,003 and $16,818
at March 31, 2020 and December 31, 2019, respectively
    18,627       19,035  
Operating lease assets
    2,294       2,174  
Intangible assets (net)
    16,117       17,032  
Goodwill
    25,621       32,635  
Other long-term assets
    250       281  
Deferred tax asset
    395       441  
Long-term assets of discountinued operations
    331       413  
Total assets
  $ 194,507     $ 195,428  
LIABILITIES AND EQUITY
               
Current liabilities
               
Notes payable
  $ 19,018     $ 18,212  
Covertible note-related party (net)
    7,367       7,323  
Convertible note (net)
    7,927        
Current portion of finance lease obligations
    474       476  
Current portion of operating lease liabilities
    785       813  
Accounts payable
    37,944       29,593  
Accounts payable related parties
    112       228  
Accrued expenses
    8,963       9,138  
Customer deposits
    1,209       1,493  
Current liabilities of discountinued operations
    558       800  
Total current liabilities
    84,357       68,076  
Long-term liabilities
               
Revolving term credit facilities
    6,000        
Notes payable (net)
    19,060       19,446  
Finance lease obligation (net of current portion)
    4,473       4,584  
Non-current operating lease liabilities
    1,508       1,361  
Convertible note (net)
          14,760  
Deferred gain on sale of property
    647       667  
Deferred tax liability
    592       721  
Other long-term liabilities
    5,745       5,913  
Long-term liabilities of discountinued operations
    350       350  
Total long-term liabilities
    38,375       47,802  
Total liabilities
    122,732       115,878  
Commitments and contingencies
               
Equity
               
Preferred Stock-Authorized 150,000 shares, no shares issued or outstanding at
March 31, 2020 and December 31, 2019
           
Common Stock-no par value 25,000,000 shares authorized, 19,760,120 and 19,713,185
shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively
    131,049       130,710  
Paid in capital
    2,663       2,793  
Retained deficit
    (57,729 )     (50,253 )
Accumulated other comprehensive loss
    (4,208 )     (3,700 )
Total equity
    71,775       79,550  
Total liabilities and equity
  $ 194,507     $ 195,428  
                 

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

       
 
  Three Months Ended
March 31,
 
 
  2020     2019  
 
  Unaudited     Unaudited  
Net revenues
  $ 48,733     $ 54,425  
Cost of sales
    38,486       42,433  
Gross profit
    10,247       11,992  
Operating expenses
               
Research and development costs
    687       687  
Selling, general and administrative expenses
    8,039       9,116  
Impairment of intangibles
    6,722        
Total operating expenses
    15,448       9,803  
Operating (loss) income
    (5,201 )     2,189  
Other expense
               
Interest expense
    (1,084 )     (1,108 )
Interest income
    60       69  
Change in fair value of securities held
          810  
Foreign currency transaction loss
    (418 )     (433 )
Other income (expense)
    3       (21 )
Total other expense
    (1,439 )     (683 )
(Loss) Income before income taxes from continuing operations
    (6,640 )     1,506  
Income tax expense from continuing operations
    404       197  
Net (loss) income from continuing operations
  $ (7,044 )   $ 1,309  
Discontinued operations
               
Loss from operations of discontinued operations
    (388 )     (446 )
Income tax expense (benefit)
    44       (47 )
Loss from discontinued operations
    (432 )     (399 )
Net (loss) income
    (7,476 )     910  
(Loss) earnings per share
               
Basic
               
(Loss) earnings from continuing operations
  $ (0.36 )   $ 0.07  
Loss from discontinued operations
  $ (0.02 )   $ (0.02 )
Net (loss) earnings
  $ (0.38 )   $ 0.05  
Diluted
               
(Loss) earnings from continuing operations
  $ (0.36 )   $ 0.07  
Loss from discontinued operations
  $ (0.02 )   $ (0.02 )
Net (loss) earnings
  $ (0.38 )   $ 0.05  
Weighted average common shares outstanding
               
Basic
    19,733,772       19,678,081  
Diluted
    19,733,772       19,694,973  
                 

Note: Results shown are from Continuing Operations

Net Sales and Gross Margin % (in thousands)

       
 
  Three Months Ended  
 
  March 31, 2020     December 31, 2019     March 31, 2019  
 
  As Reported     As Adjusted     As Reported     As Adjusted     As Reported     As Adjusted  
Net sales
  $ 48,733     $ 48,733     $ 53,090     $ 53,090     $ 54,425     $ 54,425  
% change Vs Q4 2019
    -8.2 %     -8.2 %                                
% change Vs Q1 2019
    -10.5 %     -10.5 %                                
% change Vs Q1 2019 without FX impact
            -9.1 %                                
 
                                               
Gross margin % of net sales
    21.0 %     21.2 %     18.7 %     19.3 %     22.0 %     22.9 %
Gross margin % of net sales (value-add)
            22.7 %             20.6 %             24.2 %
                                                 

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

       
 
  Three Months Ended  
 
  March 31,
2020
    December 31, 2019     March 31,
2019
 
Operating (loss) income
  $ (5,201 )   $ 1,493     $ 2,189  
Adjustments related to trade show, customer declared bankruptcy, discontinued model, goodwill and intangible asset impairment, plant closing, restatement, restricted stock, restructuring and other expenses
    7,668       779       819  
Adjusted operating income
    2,467       2,272       3,008  
Depreciation and amortization
    1,038       1,065       1,066  
Adjusted EBITDA
  $ 3,505     $ 3,337     $ 4,074  
Adjusted EBITDA % to sales
    7.2 %     6.3%       7.5 %
                         

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

       
 
  Three Months Ended  
 
  March 31,
2020
    December 31, 2019     March 31,
2019
 
Net (loss) income
  $ (7,044 )   $ (54 )   $ 1,309  
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)
    8,647       1,358       258  
Adjusted net income
  $ 1,603     $ 1,304     $ 1,567  
Weighted diluted shares outstanding
    19,733,772       19,696,093       19,694,973  
Diluted (loss) earnings per shares as reported
  $ (0.36 )   $ (0.00 )   $ 0.07  
Total EPS effect
  $ 0.44     $ 0.07     $ 0.01  
Adjusted diluted earnings per share
  $ 0.08     $ 0.07     $ 0.08  
                         

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  
Adjustments
  March 31,
2020
    December 31, 2019     March 31,
2019
 
Goodwill and intangible asset impairment
  $ 6,722              
Trade show
    546              
Restricted stock
    222       156       159  
Discontinued model
    69       126        
Restructuring
    1       38       354  
Customer declared bankruptcy – bad debt
          140        
Legal settlement
          88        
Restatement expenses
                49  
Change in accounting estimates – Inventory reserve
          166        
Plant closing
                44  
Other expenses
    108       65       213  
Total adjustments to operating income (loss)
  $ 7,668     $ 779     $ 819  
Change in fair market value of securities
                (810 )
Foreign exchange
    418       126       433  
Total pre-tax adjustments
  $ 8,086     $ 905     $ 442  
Net tax impact (including discrete items)
    561       453       (184 )
Total adjustments
  $ 8,647     $ 1,358     $ 258  
                         

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.

                               
 
  Mar 31,
2020
    Dec 31,
2019
    Sep 30,
2019
    Jun 30,
2019
    Mar 31,
2019
 
Backlog from continuing operations
  57,045     65,263     56,207     53,695     68,826  
Change Versus Current Period
            -12.6 %     1.5 %     6.2 %     -17.1 %
                                         

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.

             
 
  March 31,
2020
    December 31, 2019  
Cash & cash equivalents
  $ 22,320     $ 23,544  
 
               
Notes payable – short term
  $ 19,018     $ 18,212  
Current portion of finance leases
    474       476  
Convertible notes
    15,294       22,083  
Notes payable – long term
    19,060       19,446  
Finance lease obligations
    4,473       4,584  
Revolver
    6,000        
Total debt
  $ 64,319     $ 64,801  
 
               
Net debt
  $ 41,999     $ 41,257  
                 

SOURCE: Manitex International, Inc.

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