Manitex International, Inc. (Nasdaq: MNTX) ("Manitex" or the
"Company"), a leading international provider of truck cranes,
specialized industrial equipment, and construction equipment rental
solutions to infrastructure and construction markets, today
reported financial results for the three months ended June 30,
2023.
SECOND QUARTER 2023 RESULTS
(all comparisons versus the prior year period unless otherwise
noted)
- Net revenue of $73.5 million, +5.7%
- Gross profit of $14.9 million +20.8%; gross margin of 20.3%,
+254 basis points
- GAAP Net Income of $0.5 million; Adjusted Net Income of $1.7
million, or $0.08 per diluted share
- Adjusted EBITDA of $6.8 million, +31.6%, 9.3% of net revenue,
+182 basis points
- Backlog of $223.2 million, +4.4%
- Net leverage of 3.3X, down from 3.9X at December 31, 2022;
total liquidity of $31 million
MANAGEMENT COMMENTARY
“We are excited to have delivered another quarter of strong
financial performance and continued progress against our Elevating
Excellence business transformation strategy,” stated Michael
Coffey, CEO of Manitex. “Our second quarter revenue increased by 6%
driven by favorable lifting equipment segment end-market demand and
strong growth in our rental equipment operations. We remain
encouraged by the positive fundamentals in our key infrastructure,
energy, and mining end markets, which combined with the promising
customer response to our recent new product introductions, has
resulted in continued momentum in our backlog.”
“While our recent financial performance has been encouraging, we
are even more excited by the ongoing progress we have achieved on
our strategic initiatives, which places the company on track to
deliver on the long-term financial targets we outlined last
quarter,” continued Coffey. “As a reminder, our Elevating
Excellence value creation framework is based on three key pillars -
generating commercial growth, enhancing operating performance, and
disciplined capital allocation. We expect execution on these
initiatives to enable us to achieve our 2025 financial targets,
which include 25% organic revenue growth at the mid-point of the
range, 65-110% Adjusted EBITDA growth, and 300-500 basis points of
Adjusted EBITDA margin expansion.”
“Our priorities in the near-term are centered on enhancing the
operational processes that are critical to support our long-term
growth ambitions, so we were pleased with the successful
implementation of our new ERP systems across the organization and
another quarter of improved manufacturing throughput,” continued
Coffey. “The early progress on our operational goals is evident in
our second quarter Adjusted EBITDA margin, which increased 180
basis points on a year-over-year basis to 9.3%, despite lingering
supply chain challenges and the recent spike in steel prices.”
“A key priority is reducing our net leverage ratio towards our
short-term target of at-or-below 3.0x, so we were pleased to see
our net debt to trailing twelve-month Adjusted EBITDA decline to
3.3x at the end of the second quarter, down from 3.9x at the end of
2022,” stated Joseph Doolan, Chief Financial Officer of Manitex.
“Our total liquidity of $31 million, which includes total cash and
availability under our credit facilities, provides us with ample
financial flexibility to support our organic growth
initiatives.”
"Momentum in our key end markets remains robust, and as we
continue to execute on our Elevating Excellence strategy, we will
further position the Company to benefit from these favorable
trends,” continued Coffey. “Based on our solid first half results,
sustained margin improvements, and continued new order momentum,
including several large orders received subsequent to quarter end,
we remain on track to achieve our 2023 financial guidance, which
calls for low double-digit adjusted EBITDA growth in 2023.”
SECOND QUARTER 2023 PERFORMANCE
The Company reported net revenue of $73.5 million in the second
quarter 2023, an increase of 5.7% versus the prior-year period,
driven by growth in the lifting segment, as well as contribution
from the Rabern Rentals acquisition completed in April 2022.
Revenue growth was negatively impacted by $2.6 million, or
approximately 3.7%, due to lower truck chassis sales, which are
largely pass-through revenue items. The Company continues to expect
lower chassis sales to be a headwind to reported sales growth and a
benefit to reported gross margin in 2023.
Lifting Equipment Segment revenue was $66.3 million in the
second quarter 2023, an increase of 4.6%, versus the prior-year
period, or an increase of 8.7% when excluding the impact of truck
chassis sales in the quarter. The increased output is a direct
reflection of process centered improvements attained from our
Elevating Excellence strategy and favorable demand trends in both
domestic and international markets. In North America, strong
project activity from energy and infrastructure markets is driving
robust activity levels, while international markets are benefitting
from infrastructure projects in Europe and continued strength from
South American mining activity.
Rental Equipment Segment revenue was $7.3 million in the second
quarter 2023, supported by strong end-market demand in key North
Texas markets, including contribution from the Lubbock, Texas
location that opened in March 2023. The Rabern business benefitted
from the deployment of new rental fleet acquired in 2022, pricing
gains, and a modest improvement in utilization.
Total gross profit was $14.9 million in the second quarter, an
increase from $12.4 million in the prior-year period due to revenue
growth, benefits from the Company’s operational improvement
initiatives, and improved profitability in rental. As a result of
these factors, gross profit margin increased 250 basis points to
20.3% during the second quarter 2023. These factors were partially
offset by higher US-based steel prices, which were a headwind
during the quarter as prices spiked during the first half of 2023.
The Company has successfully implemented product surcharges and
price increases in an effort to offset the rising price of steel,
and these measures are expected to benefit margins beginning in the
third quarter of 2023.
SG&A expense was $10.8 million for the second quarter,
compared to $11.4 million for the comparable period last year. The
decrease was primarily related to restructuring and other expenses
included in last year’s results. R&D costs of $0.8 million were
up modestly from $0.7 million last year.
Operating income was $3.3 million for the second quarter 2023,
compared to an operating loss of ($1.7) million for the same period
last year. Second quarter operating margin was 4.5%, an improvement
from (2.4%) in the prior year period. The year-over-year
improvement in operating income was driven by the strong operating
performance, disciplined cost control, and Rabern transaction costs
and other one-time expenses that were incurred in the second
quarter last year.
The Company delivered GAAP Net Income of $0.5 million, or $0.02
per diluted share, for the second quarter 2023, compared to a net
loss of ($2.1) million, or ($0.10) per diluted share, for the same
period last year. Adjusted net income was $1.7 million, or $0.08
per diluted share in the second quarter 2023, an increase compared
to adjusted net income of $0.9 million, or $0.05 per diluted share,
for the same period last year. Adjusted net income excludes $0.6
million of stock compensation expense and $0.7 million of other
non-recurring expenses in the second quarter of 2023.
Adjusted EBITDA was $6.8 million for the second quarter 2023, or
9.3% of sales, compared to $5.2 million, or 7.4% of sales, for the
same period last year. See Non-GAAP reconciliations in the appendix
of this release.
As of June 30, 2023, total backlog was $223.2 million, up 4.4%
from the end of the second quarter 2022, driven by continued
favorable trends in key end markets and the contribution from new
product introductions in North America. Backlog was down 6.2% from
the end of the first quarter of 2023 due primarily to improved
manufacturing throughput, and the timing of orders, as the Company
received several large orders in early July.
BALANCE SHEET AND LIQUIDITY
As of June 30, 2023, total debt was $95.1 million. Cash and cash
equivalents as of June 30, 2023, were $7.3 million, resulting in
net debt of $87.8 million. Net debt at the end of the second
quarter 2023 was up modestly from the end of the first quarter due
to seasonal working capital needs and modest inventory growth in
Italy resulting from the transition of the ERP system. Net leverage
was 3.3x at the end of second quarter 2023, down from 3.9x at the
end of fourth quarter 2022. As of June 30, 2023, Manitex had total
cash and availability of $31 million.
STRATEGIC UPDATE - ELEVATING EXCELLENCE INITIATIVE
In early 2023, Manitex formally launched its multi-year business
transformation strategy, Elevating Excellence, which aims to drive
sustained commercial growth and improved operating performance,
ultimately resulting in long-term value creation for shareholders.
The three main tenets of the business strategy include generating
commercial growth (organic market share expansion, product
innovation, expanded aftermarket focus), enhancing operating
performance (optimized manufacturing resources, enhanced sourcing
and procurement, product mix optimization), and disciplined capital
allocation.
Key progress achieved during the second quarter against the
strategy are as follows:
- Commercial Growth. A key component of Manitex’s targeted
commercial expansion strategy is market share growth, as the
Company focuses on leveraging its strong market share in straight
mast cranes to grow articulated cranes, industrial lifting, and
aerial work platforms in North America. An important driver of this
initiative, and Manitex’s growth strategy overall, is the support
and partnership of the Company’s dealer network. One of these
dealers is ABM Equipment, LLC (“ABM”) of Hopkins, Minnesota, which
recently joined Manitex as a new dealer in June of 2022 and
provides services to customers in Minnesota, North and South
Dakota, Iowa, Nebraska and the upper peninsula of Michigan. ABM has
quickly made significant investments in the Company’s products,
including an order for ten 50-ton TC500 truck-mounted cranes.
Manitex looks forward to continuing to partner with ABM and its
entire dealer network to continue to execute on its commercial
growth strategy.
- Enhanced Operating Performance. Second quarter Adjusted
EBITDA margin benefited from continued improvements in
manufacturing throughput and strong incremental margins in rental.
The recent ERP system launch has thus far been seamlessly
integrated and is expected to result in additional efficiency
benefits in the coming years. Supply chain pressures have continued
to ease in Italy; however, the Company continues to experience some
supply chain challenges, particularly in the United States.
- Disciplined Capital Allocation. Manitex’s primary
capital allocation priorities will focus on debt reduction,
operational improvements, and organic growth investments in 2023.
As of June 30, 2023, Manitex’s net leverage ratio was 3.3x, down
from 3.9x at year-end. The Company continues to target a net
leverage ratio of at-or-below 3.0x, consistent with its mandate to
optimize balance sheet flexibility.
LONG-TERM FINANCIAL TARGETS
Manitex introduced long-term financial targets as part of its
Elevating Excellence initiative. The full-year 2025 financial
targets reflect the underlying strength of the Company’s end
markets and expected commercial and operational benefits from the
Elevating Excellence initiatives. The Company’s financial targets
are unchanged, as detailed in the following table.
($ in millions)
Full-Year
Full Year 2025
2022 Actual
Low-Case
Base-Case
High-Case
Total Revenue
$273.9
$325
$342
$360
Total Adjusted EBITDA
$21.3
$35
$40
$45
Total Adjusted EBITDA Margin
7.8%
10.8%
11.8%
12.8%
These targets are current as of the time provided and subject to
change, given markets conditions.
SECOND QUARTER 2023 RESULTS CONFERENCE CALL
Manitex will host a conference call today at 9:00 AM ET to
discuss the Company’s second quarter 2023 results and updated
corporate strategy.
A webcast of the conference call and accompanying presentation
materials will be available in the Investor Relations section of
the Manitex website at
https://www.manitexinternational.com/eventspresentations.aspx, and
a replay of the webcast will be available at the same time shortly
after the webcast is complete.
To participate in the live teleconference:
Domestic Live:
(877) 407-0792
International Live:
(201) 689-8263
To listen to a replay of the teleconference, which will be
available through August 17, 2023:
Domestic Replay:
(844) 512-2921
International Replay:
(412) 317-6671
Passcode:
13740069
NON-GAAP FINANCIAL MEASURES AND OTHER ITEMS
In this press release, we refer 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. A
reconciliation of Adjusted GAAP financial measures is included with
this press release. All per share amounts are on a fully diluted
basis. The quarterly amounts described below are unaudited, are
reported in thousands of U.S. dollars, and are as of the dates
indicated.
ABOUT MANITEX INTERNATIONAL
Manitex International is a leading provider of mobile truck
cranes, industrial lifting solutions, aerial work platforms,
construction equipment and rental solutions that serve general
construction, crane companies, and heavy industry. The company
engineers and manufactures its products in North America and
Europe, distributing through independent dealers worldwide. Our
brands include Manitex, PM, Oil & Steel, Valla, and Rabern
Rentals.
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.
MANITEX INTERNATIONAL, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands,
except share and per share data) (Unaudited)
June 30, 2023
December 31, 2022
ASSETS
Current assets
Cash
$
7,092
$
7,973
Cash – restricted
210
217
Trade receivables (net)
48,828
43,856
Other receivables
1,087
1,750
Related party receivables
9
-
Inventory (net)
83,309
69,801
Prepaid expense and other current
assets
3,694
3,907
Total current assets
144,229
127,504
Total fixed assets, net of accumulated
depreciation of $26,291 and $22,441 at June 30, 2023 and December
31, 2022, respectively
49,929
51,697
Operating lease assets
8,010
5,667
Intangible assets (net)
13,696
14,367
Goodwill
37,075
36,916
Deferred tax assets
452
452
Total assets
$
253,391
$
236,603
LIABILITIES AND EQUITY
Current liabilities
Accounts payable
$
53,016
$
45,682
Accrued expenses
14,234
12,379
Related party payables
36
60
Notes payable
23,857
22,666
Current portion of finance lease
obligations
555
509
Current portion of operating lease
obligations
2,167
1,758
Customer deposits
2,653
3,407
Total current liabilities
96,518
86,461
Long-term liabilities
Revolving term credit facilities (net)
45,982
41,479
Notes payable (net)
21,585
22,261
Finance lease obligations (net of current
portion)
3,092
3,382
Operating lease obligations (net of
current portion)
5,843
3,909
Deferred gain on sale of property
387
427
Deferred tax liability
4,393
5,151
Other long-term liabilities
5,125
5,572
Total long-term liabilities
86,407
82,181
Total liabilities
182,925
168,642
Commitments and contingencies
Equity
Preferred Stock—Authorized 150,000 shares,
no shares issued or outstanding at June 30, 2023 and December 31,
2022
—
—
Common Stock—no par value 25,000,000
shares authorized, 20,243,756 and 20,107,014 shares issued and
outstanding at June 30, 2023 and December 31, 2022,
respectively
134,239
133,289
Paid-in capital
4,621
4,266
Retained deficit
(72,882
)
(73,338
)
Accumulated other comprehensive loss
(5,127
)
(5,822
)
Equity attributable to shareholders of
Manitex International
60,851
58,395
Equity attributed to noncontrolling
interest
9,615
9,566
Total equity
70,466
67,961
Total liabilities and equity
$
253,391
$
236,603
MANITEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for
share and per share amounts) (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net revenues
$
73,534
$
69,577
$
141,405
$
129,997
Cost of sales
58,599
57,210
112,060
107,505
Gross profit
14,935
12,367
29,345
22,492
Operating expenses
Research and development costs
837
720
1,651
1,436
Selling, general and administrative
expenses
10,766
11,431
21,797
19,877
Transaction costs
-
1,886
-
2,199
Total operating expenses
11,603
14,037
23,448
23,512
Operating income (loss)
3,332
(1,670
)
5,897
(1,020
)
Other income (expense)
Interest expense
(1,896
)
(1,068
)
(3,661
)
(1,573
)
Interest income
-
1
-
3
Foreign currency transaction gain
(loss)
(718
)
142
(773
)
93
Other income (expense)
21
724
(737
)
988
Total other income (expense)
(2,593
)
(201
)
(5,171
)
(489
)
Income (loss) before income
taxes
739
(1,871
)
726
(1,509
)
Income tax expense (benefit)
207
232
220
364
Net income (loss)
532
(2,103
)
506
(1,873
)
Net income (loss) attributable to
noncontrolling interest
128
154
49
154
Net income (loss) attributable
to shareholders of Manitex International, Inc.
$
404
$
(2,257
)
$
457
$
(2,027
)
Income (loss) per share
Basic
$
0.02
$
(0.10
)
$
0.02
$
(0.09
)
Diluted
$
0.02
$
(0.10
)
$
0.02
$
(0.09
)
Weighted average common shares
outstanding
Basic
20,206,919
20,058,966
20,164,486
20,012,735
Diluted
20,209,959
20,058,966
20,166,968
20,012,735
Net Sales and Gross Margin
Three Months Ended
June 30, 2023
March 31, 2023
June 30, 2022
As Reported
As Adjusted
As Reported
As Adjusted
As Reported
As Adjusted
Net sales
$
73,534
$
73,534
$
67,871
$
67,871
$
69,577
$
69,577
% change Vs Q1 2023
8.3
%
8.3
%
% change Vs Q2 2022
5.7
%
5.7
%
Gross margin
14,935
14,935
14,410
14,257
12,367
12,367
Gross margin % of net sales
20.3
%
20.3
%
21.2
%
21.0
%
17.8
%
17.8
%
Backlog
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
Jun 30, 2022
Backlog from continuing operations
$
223,236
$
238,096
$
230,206
$
207,032
$
213,810
Change Versus Current Period
(6.2
%)
(3.0
%)
7.8
%
4.4
%
Backlog is defined as orders for equipment
which have not yet shipped as well as orders by foreign
subsidiaries for international deliveries. 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.
Reconciliation of Net Income (Loss)
Attributable to Shareholders of Manitex International, Inc. to
Adjusted Net Income
Three Months Ended
June 30, 2023
March 31, 2023
June 30, 2022
Net income (loss) attributable to
shareholders of Manitex International Inc.
$
404
$
53
$
(2,257
)
Adjustments, including net tax impact
1,307
1,436
3,180
Adjusted net income (loss) attributable to
shareholders of Manitex International Inc.
$
1,711
$
1,489
$
923
Weighted diluted shares outstanding
20,209,959
20,122,054
20,058,966
Diluted earnings (loss) per share as
reported
$
0.02
$
-
$
(0.10
)
Total EPS effect
$
0.06
$
0.07
$
0.15
Adjusted diluted earnings (loss) per
share
$
0.08
$
0.07
$
0.05
Reconciliation of GAAP Net Income
(Loss) to Adjusted EBITDA
Three Months Ended
June 30, 2023
March 31, 2023
June 30, 2022
Net Income (loss)
$
532
$
(26
)
$
(2,103
)
Interest expense
1,896
1 ,765
1,068
Tax expense
207
13
232
Depreciation and amortization expense
2,869
3,052
2,772
EBITDA
$
5,504
$
4,804
$
1,969
Adjustments:
Stock compensation
$
589
$
766
$
582
FX
718
55
(142
)
Pension settlement
-
487
-
Litigation / legal settlement
-
324
351
Severance / restructuring costs
-
-
1,223
Gain on sale of building
-
-
(672
)
Rabern transaction costs
-
-
1,886
Valla Earnout
-
-
(33
)
Other
-
(153
)
12
Total Adjustments
$
1,307
$
1,479
$
3,207
Adjusted EBITDA
$
6,811
$
6,283
$
5,176
Adjusted EBITDA as % of sales
9.3
%
9.3
%
7.4
%
Net Debt
June 30, 2023
March 31, 2023
June 30, 2022
Total cash & cash
equivalents
$
7,302
$
10,135
$
16,795
Notes payable - short term
$
23,857
$
21,237
$
20,373
Current portion of finance leases
555
532
470
Notes payable - long term
21,585
21,970
24,317
Finance lease obligations - LT
3,093
3,239
3,656
Revolver, net
45,982
49,190
46,645
Total debt
$
95,072
$
96,168
$
95,461
Net debt
$
87,770
$
86,033
$
78,666
Net debt is calculated using the
Consolidated Balance Sheet amounts for current and long-term
portion of long-term debt, capital lease obligations, notes
payable, and revolving credit facilities minus cash and cash
equivalents.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803651338/en/
Paul Bartolai or Noel Ryan MNTX@val-adv.com
Manitex (NASDAQ:MNTX)
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