Manitex International, Inc. Reports Third Quarter 2010 Results

BRIDGEVIEW, Ill., Nov. 10, 2010 /PRNewswire-FirstCall/ -- Manitex International, Inc. (Nasdaq: MNTX), a leading provider of engineered lifting solutions including boom truck and rough terrain cranes, rough terrain forklifts, special mission oriented vehicles and specialized engineered trailers, today announced third quarter 2010 revenues of $24.9 million, a 65% year-over-year increase, and net income for the third quarter of 2010 of $0.7 million or $0.06 per share, compared to a net loss of ($0.1 million) or ($0.01) per share for the third quarter of 2009.

Third Quarter 2010 Financial Highlights:

• Net revenues for the quarter ended September 30, 2010 were $24.9 million, representing a 65% increase from $15.1 million in the third quarter of 2009 and a sequential increase of $5.4 million or 27% from the second quarter of 2010. Excluding the impact of acquisitions and the CVS Ferrari business, net revenues increased 39% from the prior year's comparable period.
• EBITDA(1) for the third quarter of 2010 was $2.3 million, or 9.1% of sales, compared to ($0.1) million for the third quarter of 2009.
• Gross profit of $5.9 million, or 23.6% of sales was an improvement of $3.6 million and 890 basis points compared to $2.2 million, or 14.7% in the third quarter of 2009
• Net income for the third quarter of 2010 was $0.7 million or $0.06 per share (2), compared to a net loss of ($0.1) million or ($0.01) per share for the third quarter of 2009.
• Working capital at September 30, 2010 was $29.6 million, compared to $25.6 million at December 31, 2009 and $29.3 million at June 30, 2010.  
• Backlog at September 30, 2010 was $32.8 million, representing an increase of 49% and 32% from December 31, 2009 and June 30, 2010 respectively.

Chairman and Chief Executive Officer, David Langevin, commented, "We continue to show improved results in each of our key operating and financial metrics and we're especially pleased to be reporting our third consecutive quarterly profit in the third quarter. The increase in our profitability for the current quarter is the result of a number of positive factors including continued growth in non-domestic sales, favorable product mix, and continued cost diligence in various areas across the enterprise."

"Our goals and strategic direction going forward emphasize the development of specialized niche products in markets in which we see potential for growth. Despite a still-challenged U.S. economy, we remain optimistic about the longer-term possibilities of economic expansion here in the U.S. markets, and we are well-positioned to take advantage of numerous growth opportunities in our targeted markets, both in the U.S. and internationally heading into 2011. Of particular note is the excellent progress of our strategy to pursue diversification into international markets. Third quarter sales to non-U.S. customers accounted for approximately 35% of total revenues compared to virtually none just two years ago.  Even under difficult economic conditions, we have thus been able to successfully identify and enter new markets to increase our sales and profits."

Mr. Langevin continued, "Our expectation for the fourth quarter is for similar sales and profits as we had in the third, which would represent a particularly strong finish to a healthy full year of growth for us. We further anticipate that our recent new venture, the CVS Ferrari business, which we have been operating for three months and which has thus far generated the profits and revenues we expected, will become a more material contributor to our results in the coming periods."

Net revenues of $24.9 million in the third quarter of 2010 increased $9.8 million or 65% over the third quarter of 2009. Excluding acquisitions and the CVS Ferrari business, this increase was $5.9 million, representing organic growth of 39%. Compared to the third quarter of 2009, revenue increases were seen in all major product categories, with cranes up 15%, material handling up 230% and equipment distribution up 146%. Crane sales continue to reflect strong demand from new product introductions for niche markets while material handling products continued to experience strong governmental and military demand for specialized equipment. Contributions from acquisitions, CVS Ferrari, and the North American Equipment Exchange (NAEE) division also contributed to the increases.

Gross profit of $5.9 million and gross margin percent of 23.6% were $3.6 million and 890 basis points respectively above the third quarter of 2009. The improvement in gross margin percentage resulted from higher margin product mix in sales, particularly in the military material handling and higher capacity and specialized crane products, and from the restructuring and cost control actions taken during 2009 leading to improved absorption. The company's currency hedging program also was successful in managing the volatile currency exchange rates.

Operating expenses for the third quarter 2010 were $3.8 million excluding expenses of $0.6 million relating to acquisitions and CVS Ferrari, compared to the third quarter 2009 of $2.9 million, excluding the accounting treatment for the gain of $0.9 million on bargain purchase for the Badger acquisition. R&D expense increased $0.1 million from continued investment in new product in the crane portfolio. SG&A expense accounted for the balance of the increase, with sales related costs in particular increasing $0.4 million. SG&A costs for the third quarter of 2010 were equivalent to 16.2% of sales.

Andrew Rooke, Manitex International President and Chief Operating Officer commented, "Third quarter results were strong on all fronts.  Our consistent and successful pursuit of opportunities to add strong niche brands to our product portfolio, maintain our commitment to product innovation and development and expand our international presence have been key to our strong operational performance, highlighted by our gross margin of 23.6%, a 9.1% EBITDA margin, and acceleration in our earnings per share in the quarter."

Mr. Rooke continued, "In addition to driving financial results, we continue to focus on maintaining a healthy balance sheet. In the third quarter our operating working capital as a percentage of annualized last quarters sales, improved to 35%, from 49% at December 31, 2009. Consistent with our objective of reducing our overall indebtedness, we repaid approximately $1.2 million of debt in the quarter from our cash resources."

(1)  EBITDA is a non-GAAP (generally accepted accounting principles in the United States of America) financial measure.  This measure may be different from non-GAAP financial measures used by other companies.  We encourage investors to review the section below entitled "Non-GAAP Financial Measures."

(2)  Weighted average diluted shares outstanding for the third quarter of 2010 were 11,396,770 and for the third quarter of 2009 were 11,106,784.

Conference Call:

Today, Wednesday, November 10, 2010, management will host a conference call at 4:30 p.m. Eastern Time to discuss the results for the third quarter 2010 with the investment community.

Anyone interested in participating should call 1-877-941-8601 if calling within the United States or 1-480-629-9810 if calling internationally. A re-play will be available until November 17, 2010, which can be accessed by dialing 1-877-870-5176 if calling within the United States or 1-858-384-5517 if calling internationally. Please use pass code 4379619 to access the replay.

The call will also be accompanied by a webcast over the Internet with slides, accessible at the Company's corporate website at www.manitexinternational.com.

About Manitex International, Inc.

Manitex International, Inc. is a leading provider of engineered lifting solutions including cranes, rough terrain forklifts, indoor electric forklifts and special mission oriented vehicles, including parts support. Our Manitex subsidiary manufactures and markets a comprehensive line of boom trucks and sign cranes through a national and international dealership network. Our boom trucks and crane products are primarily used in industrial projects, energy exploration and infrastructure development, including roads, bridges, and commercial construction. Our Crane and Machinery division is a Chicago-based distributor of cranes including Terex truck and rough terrain cranes, Fuchs material handlers and our own Manitex product line. Crane and Machinery provides after market service in its local market as well as being a leading distributor of OEM crane parts, supplying parts to customers throughout the United States and internationally. Our Manitex Liftking subsidiary is a provider of material handling equipment including the Noble straight-mast rough terrain forklift product line, Lowry high capacity cushion tired forklift and Schaeff electric indoor forklifts as well as specialized carriers, heavy material handling transporters and steel mill equipment. Manitex Liftking's rough terrain forklifts are used in both commercial and military applications. In July 2009, we acquired through a stock purchase, Badger Equipment Company, a Winona, Minnesota-based manufacturer of specialized rough terrain cranes and material handling products.  In December 2009, we acquired Load King Trailers, a manufacturer of specialized custom trailers and hauling systems typically used for transporting heavy equipment.

Forward-Looking Statement

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.

Supplemental Information

Non-GAAP Financial Measures

This press release includes the following non-GAAP financial measure: "EBITDA" (earnings before interest, tax, depreciation and amortization).  This non-GAAP term, as defined by the Company, may not be comparable to similarly titled measures used by other companies. EBITDA is not a measure of financial performance under generally accepted accounting principles. Items excluded from EBITDA are significant components in understanding and assessing financial performance. EBITDA should not be considered in isolation or as a substitute for net earnings, operating income and other consolidated earnings data prepared in accordance with GAAP or as a measure of our profitability.  A reconciliation of net income to EBITDA is provided below.

The Company's management believes that EBITDA and EBITDA as a percentage of sales represent key operating metrics for its business.  Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is a key indicator used by management to evaluate operating performance. While EBITDA is 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 this measure is useful to investors in assessing our capital expenditure and working capital requirements. This calculation may differ in method of calculation from similarly titled measures used by other companies. A reconciliation of EBITDA to GAAP financial measures for the three and nine month periods ended September 30th, 2010 and September 30th 2009 is included with this press release below and with the Company's related Form 8-K.

Reconciliation of GAAP Net Income from Continuing Operations to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) from Continuing Operations (in thousands)  

In an effort to provide investors with additional information regarding the Company's results, Manitex International refers to various non-GAAP (U.S. generally accepted accounting principles) financial measures which management believes provides useful information to investors.  These measures may not be comparable to similarly titled measures being disclosed by other companies. In addition, the Company believes that non-GAAP financial measures should be considered in addition to, and not in lieu of, GAAP financial measures.

Manitex International believes that this information is useful to understanding its operating results and the ongoing performance of its underlying businesses. Management of Manitex International uses these non–GAAP financial measures to establish internal budgets and targets and to evaluate the Company's financial performance against such budgets and targets.

The amounts described below are unaudited, are reported in thousands of U.S. dollars, and are as of or for the period ended June 30, 2010, unless otherwise indicated.

Backlog

Backlog is defined as firm 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.

Current Ratio is calculated by dividing current assets by current liabilities.

Days Sales Outstanding (DSO), is calculated by taking the sum of net trade and related party receivables divided by annualized sales per day (sales for the quarter, multiplied by 4, and the sum divided by 365).

Days Payables Outstanding (DPO), is calculated by taking the sum of net trade and related party payables divided by annualized cost of sales per day (cost of goods sold for the quarter, multiplied by 4, and the sum divided by 365).

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 and lines of credit.

Inventory turns are calculated by multiplying cost of goods sold for the referenced three month period by 4 and dividing that figure by inventory as at the referenced period.

Manufacturing Expenses include manufacturing wages, salaries, fixed and variable overhead costs.

Operating Working Capital is calculated using the Consolidated Balance Sheet amounts for Trade receivables (net of allowance) plus other receivables, plus inventories, less Accounts payable. The Company considers excessive working capital as an inefficient use of resources, and seeks to minimize the level of investment without adversely impacting the ongoing operations of the business.

Trailing Three Month Annualized Net Sales is calculated using the net sales for quarter, multiplied by four.

Working capital is calculated as total current assets less total current liabilities

SOURCE Manitex International, Inc.

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