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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