Search the web
Welcome, Guest
[Sign Out, My Account]
EDGAR_Online

Quotes & Info
Enter Symbol(s):
e.g. YHOO, ^DJI
Symbol Lookup | Financial Search
MNTX > SEC Filings for MNTX > Form 10-Q on 9-Nov-2012All Recent SEC Filings

Show all filings for MANITEX INTERNATIONAL, INC. | Request a Trial to NEW EDGAR Online Pro

Form 10-Q for MANITEX INTERNATIONAL, INC.


9-Nov-2012

Quarterly Report


Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements and are intended to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to, among other things, the Company's expectations, beliefs, intentions, future strategies, future events or future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation: (1) projections of revenue, earnings, capital structure and other financial items, (2) statements of our plans and objectives, (3) statements regarding the capabilities and capacities of our business operations,
(4) statements of expected future economic conditions and the effect on us and on our customers, (5) expected benefits of our cost reduction measures, and
(6) assumptions underlying statements regarding us or our business. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of such terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. These statements are only predictions. Our actual results may differ materially from information contained in these forward looking-statements for many reasons, including, without limitation, those described below and in our 2011 Annual Report on Form 10-K for the fiscal year ended December 31, 2011, in the section entitled "Item 1A. Risk Factors,"

(1) Substantial deterioration in economic conditions, especially in the United States and Europe;

(2) our customers' diminished liquidity and credit availability;

(3) difficulties in implementing new systems, integrating acquired businesses, managing anticipated growth, and responding to technological change;

(4) our ability to negotiate extensions of our credit agreements and to obtain additional debt or equity financing when needed;

(5) the cyclical nature of the markets we operate in;

(6) increases in interest rates;

(7) government spending, fluctuations in the construction industry, and capital expenditures in the oil and gas industry;

(8) the performance of our competitors;

(9) shortages in supplies and raw materials or the increase in costs of materials;

(10) our level of indebtedness and our ability to meet financial covenants required by our debt agreements;

(11) product liability claims, intellectual property claims, and other liabilities;

(12) the volatility of our stock price;

(13) future sales of our common stock;

(14) the willingness of our stockholders and directors to approve mergers, acquisitions, and other business transactions;

(15) currency transactions (foreign exchange) risks and the risks related to forward currency contracts;

(16) certain provisions of the Michigan Business Corporation Act and the Company's Articles of Incorporation, as amended, Amended and Restated Bylaws, and the Company's Preferred Stock Purchase Rights may discourage or prevent a change in control of the Company; and

(17) a substantial portion of our revenues are attributed to limited number of customers which may decrease or cease purchasing any time.

The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. We do not undertake, and expressly disclaim, any obligation to update this forward-looking information, except as required under applicable law. The following discussion should be read in conjunction with the accompanying Consolidated Financial Statements and Notes thereto of the Company appearing elsewhere within this Form 10-Q.

OVERVIEW

The Company is a leading provider of engineered lifting solutions. The Company operates in two business segments: the Lifting Equipment segment and the Equipment Distribution segment.

Lifting Equipment Segment

The Company is a leading provider of engineered lifting solutions. The Company designs, manufactures and distributes a diverse group of products that serve different functions and are used in a variety of industries. Through its Manitex, Inc. subsidiary it markets a comprehensive line of boom trucks and sign cranes. Manitex's boom trucks and crane products are primarily used for industrial


Table of Contents

projects, energy exploration and infrastructure development, including, roads, bridges and commercial construction. Its Badger Equipment Company ("Badger") subsidiary, acquired on July 10, 2009, is a manufacturer of specialized rough terrain cranes and material handling products, including a 30-ton model introduced in October 2009, the first in a new line of specialized high quality rough terrain cranes and a recently introduced second model, a 15-ton crane. Badger primarily serves the needs of the construction, municipality, and railroad industries.

Through its Manitex Liftking ULC ("Manitex Liftking" or "Liftking") subsidiary, the Company also sells a complete line of rough terrain forklifts, a line of stand-up electric forklifts, cushioned tired forklifts with lifting capacities from 18 thousand to 40 thousand pounds, and special mission oriented vehicles, as well as other specialized carriers, heavy material handling transporters and steel mill equipment. Manitex Liftking's rough terrain forklifts are used in both commercial and military applications. Specialty mission oriented vehicles and specialized carriers are designed and built to meet the Company's unique customer needs and requirements. The Company's specialized lifting equipment has met the particular needs of customers in various industries that include utility, ship building and steel mill industries.

Our subsidiary Manitex Load King, Inc. ("Load King") manufactures specialized custom trailers and hauling systems typically used for transporting heavy equipment. Load King Trailers serve niche markets in the commercial construction, railroad, military, and equipment rental industries through a dealer network. Load King complements our existing material handling business.

On July 1, 2010, the Company's newly formed Italian subsidiary, CVS Ferrari, srl, entered into an agreement to rent certain assets of CVS SpA, on an exclusive rental basis, while CVS SpA proceeds through the Italian bankruptcy process (concordato preventivo). CVS SpA was located near Milan, Italy and designed and manufactured a range of reach stackers and associated lifting equipment for the global container handling market, which were sold through a broad dealer network. During the third quarter 2010, CVS Ferrari, srl commenced operations and employed the rental assets in its operations. On July 1, 2011, the Company purchased the assets which were previously being rented.

Distribution Equipment Segment

The Company operates a crane dealership that distributes Terex rough terrain and truck cranes and Manitex boom trucks and sky cranes. We treat these operations as a separate reporting segment entitled "Equipment Distribution." Our Equipment Distribution segment also supplies repair parts for a wide variety of medium to heavy duty construction equipment sold both domestically and internationally. Our crane products are used primarily for infrastructure development and commercial construction; applications include road and bridge construction, general contracting, roofing, and sign construction and maintenance.

In the second quarter of 2010, we expanded our Equipment Distribution segment by creating a new division, North American Equipment Exchange, ("NAEE") to market previously-owned construction and heavy equipment, domestically and internationally. This division provides a wide range of used lifting and construction equipment of various ages and condition, and the Company has the capability to refurbish the equipment to the customers' specification.

Customer and Suppliers Concentrations

At September 30, 2012, one customer accounted for 11.40% of the Company's total accounts receivable. As of December 31, 2011, no one customer accounted for 10% or more of total Company accounts receivables.

For the three months ended September 30, 2012, no customers accounted for 10% or more of the Company's net revenues. For the three months ended September 30, 2011, one customer accounted for 13.2% of the Company's net revenues For the nine months ended September 30, 2012, no customers accounted for 10% or more of the Company's net revenues. For the nine months ended September 30, 2011, no customers accounted for 10.0% or more of the Company's net revenues. For the three and nine months ended September 30, 2012 and 2011, no supplier accounted for 10% or more of total Company purchases.

Recent Economic Conditions

Beginning in September of 2008, the United States and world financial markets came under unprecedented stress. The immediate impact was a dramatic decrease in liquidity and credit availability throughout the world. An incredibly rapid and significant deterioration in economic conditions, especially in the United States and Europe followed. These events had an immediate significant adverse impact on the Company including order cancellations.

The overall market for construction equipment has improved but has not returned to pre-2008 levels. Certain market segments, particularly the North American energy sector, is currently very strong. As result, we have seen a significant increase in orders for our higher capacity boom trucks and specialized trailers. As of September 30, 2012, our backlog of $126 million represents increases of 50% and 99% respectively when September 30, 2012 backlog is compared to December 31, 2011 and September 30, 2011 backlogs. As a result, we have taken actions to selectively increase production capacity, including hiring additional manufacturing employees at certain of our facilities. Additionally, our suppliers have increased capacity to meet the increased demand. As a result, the Company's production volumes and revenues have increased during the second and the third quarter and our backlog has decreased from $150 million at June 30, 2012 to a current backlog of $126 million. There, however, is still significant uncertainty, in part due to the European sovereign debt crisis and slowing growth in the United States and other global markets.


Table of Contents

Factors Affecting Revenues and Gross Profit

The Company derives most of its revenue from purchase orders from dealers and distributors. The demand for the Company's products depends upon the general economic conditions of the markets in which the Company competes. The Company's sales depend in part upon its customers' replacement or repair cycles. Adverse economic conditions, including a decrease in commodity prices, may cause customers to forego or postpone new purchases in favor of repairing existing machinery. Additionally, our Manitex Liftking subsidiary revenues are impacted by the timing of orders received for military forklifts and residential housing starts.

Gross profit varies from period to period. Factors that affect gross profit include product mix, production levels and cost of raw materials. Margins tend to increase when production is skewed towards larger capacity cranes, special mission oriented vehicles, specialized carriers and heavy material transporters.

Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011

Net income for the three month periods ended September 30, 2012 and 2011

For the three months ended September 30, 2012 and 2011, the Company had a net income of $2.5 million and $1.0 million, respectively.

For the three months ended September 30, 2012, the net income of $2.5 million consisted of revenue of $53.4 million, cost of sales of $42.6 million, research and development costs of $0.6 million, SG&A expenses of $5.7 million, interest expense of $0.6 million, other expense of $0.1 million and income tax expense of $1.3 million.

For the three months ended September 30, 2011, the net income of $1.0 million consisted of revenue of $36.9 million, cost of sales of $29.1 million, research and development costs of $0.4 million, SG&A expenses of $5.1 million, interest expense of $0.7 million and income tax expense of $0.5 million.

Net Revenues and Gross Profit-For the three months ended September 30, 2012, net revenues and gross profit were $53.4 million and $10.8 million, respectively. Gross profit as a percent of revenues was 20.3% for the three months ended September 30, 2012. For the three months ended September 30, 2011, net revenues and gross profit were $36.9 million and $7.8 million, respectively. Gross profit as a percent of revenues was 21.2% for the three months ended September 30, 2011.

Net revenues increased $16.4 million to $53.4 million for the three months ended September 30, 2012 from $36.9 million for the comparable period in 2011. Although the overall improvement in the market for construction equipment and an increase in military sales has contributed to the increase in revenues, the strong demand from the energy sector is by far is the most significant reason why revenues increased 44.5% between the third quarter 2011 and 2012. The strong demand from the energy sector particularly increased demand and revenues for boom trucks with higher lifting capacity and our specialized trailers that are used primarily to transport heavy equipment.

Gross profit as a percentage of net revenues decreased 0.9% to 20.3% for the three months ended September 30, 2012 from 21.2% for the three months ended September 30, 2011. Our boom trucks are built on commercial truck chassis. The customer can either supply us with a chassis or ask us to purchase one. The markup on a chassis supplied by the Company is nominal. As such the Company's gross profit percent decreases when the percent of Company purchased chassis used in production increases. The gross margin percent decrease between quarters is the result of an increase in Company purchased chassis used in production between 2011 and 2012.

Research and development-Research and development for the three months ended September 30, 2012 was $0.6 million compared to $0.4 million for the comparable period in 2011. The increase in research and development expense reflects our continued commitment to develop and introduce new products that gives the Company a competitive advantage.

Selling, general and administrative expense-Selling, general and administrative expense for the three months ended September 30, 2012 was $5.7 million compared to $5.1 million for the comparable period in 2011, an increase of $0.6 million.

The increase in selling, general and administrative expense is principally attributed to an increase in selling expenses of $0.5 million, which reflects an expansion of our sales organization along with increases in commissions and other selling expense that increase with an increase in revenue. The remaining $0.1 million increase is the net impact of other increases and decreases.

Operating income-For the three months ended September 30, 2012 and 2011, the Company had operating income of $4.5 million and $2.2 million, respectively. The increase in operating income is due to an increase in gross profit of $3.0 million offset by $0.8 million increase in operating expenses. An increase in revenues principally accounts for the increase in gross profit as the gross profit percent decreased slightly between the third quarter 2011 and 2012. The increase in operating expenses is principally related to an increase in selling, general and administrative cost, which is explained above.


Table of Contents

Interest expense-Interest expense was $0.6 million and $0.7 million for the three months ended September 30, 2012 and 2011, respectively.

Foreign currency transaction (losses) gains-The Company attempts to purchase forward currency exchange contracts such that the exchange gains and losses on the assets and liabilities denominated in other than the reporting units' functional currency will be offset by the changes in the market value of the forward currency exchange contracts it holds. Foreign currency gains and losses were insignificant for the three months ended September 30, 2012 and 2011.

Other (expense) income-For the three months ended September 30, 2012, the Company had other expense of $0.1 million which is principally the result of expensing unamortized debt discounts which was recorded when the corresponding debts were paid in full prior to its maturity. Other (expense) income for the three months ended September 30, 2011 was insignificant.

Income tax-For the three months ended September 30, 2012, the Company recorded an income tax expense of $1.3 million, which consisted primarily of anticipated federal, state and foreign taxes. For the three months ended September 30, 2011, the Company recorded an income tax expense of $0.5 million, which consisted primarily of anticipated federal, state and foreign taxes. The effective taxes rates are 34.4% and 34.9% for the three months ended September 30, 2012 and 2011, respectively.

Net income-Net income for the three months ended September 30, 2012 was $2.5 million. This compares with a net income for the three months ended September 30, 2011 of $1.0 million. The change in net income is explained above.

Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011

Net income for the nine month periods ended September 30, 2012 and 2011

For the nine months ended September 30, 2012 and 2011 the Company had a net income of $6.1 million and $2.5 million, respectively.

For the nine months ended September 30, 2012, the net income of $6.1 million consisted of revenue of $148.7 million, cost of sales of $118.6 million, research and development costs of $1.9 million, SG&A expenses of $17.0 million, interest expense of $1.8 million, foreign currency transaction losses of $0.1 million, and income tax expense of $3.2 million.

For the nine months ended September 30, 2011, the net income of $2.5 million consisted of revenue of $105.7 million, cost of sales of $84.0 million, research and development costs of $1.1 million, SG&A expenses of $14.9 million, interest expense of $1.9 million and income tax expense of $1.4 million.

Net Revenues and Gross Profit-For the nine months ended September 30, 2012, net revenues and gross profit were $148.7 million and $30.1 million, respectively. Gross profit as a percent of revenues was 20.3% for the nine months ended September 30, 2012. For the nine months ended September 30, 2011, net revenues and gross profit were $105.7 million and $21.8 million, respectively. Gross profit as a percent of revenues was 20.6% for the nine months ended September 30, 2011.

Although the overall improvement in the market for construction equipment and an increase in military sales has contributed to the increase in revenues, the strong demand from the energy sector is by far the most significant reason why revenues increased 41% between 2011 and 2012. The strong demand from the energy sector particularly increased demand and revenues for boom trucks with higher lifting capacity and our specialized trailers that are used primarily to transport heavy equipment.

Gross profit as a percentage of net revenues was relatively consistent between periods. Gross profit as a percent of revenues was 20.3% and 20.6% for the nine month periods September 30, 2012 and 2011.

Research and development-Research and development for the nine months ended September 30, 2012 was $1.9 million compared to $1.1 million for the comparable period in 2011. The increase in research and development expense reflects our continued commitment to develop and introduce new products that gives the Company a competitive advantage.

Selling, general and administrative expense-Selling, general and administrative expense for the nine months ended September 30, 2012 was $17.0 million compared to $14.9 million for the comparable period in 2011, an increase of $2.1 million. Selling, general and administrative expense for the nine months ended September 30, 2011 includes approximately $0.5 million to attend the 2011 Con Expo trade show, which is held every three years.

Selling, general and administrative expense as a percent of revenues for the nine months ended September 30, 2012 was 11.5% of revenues a decrease from the comparable period in 2011. Selling general and administrative expense as a percent of revenue for nine month period ended September 30, 2011 was 14.1% or 13.6% if adjusted to eliminate the cost associated with attending Con Expo.


Table of Contents

The increase in selling, general and administrative expense after adjusting for the non-recurring Con Expo expenses is approximately $2.6 million. The increase in selling, general and administrative expense is in part attributed to an increase in selling expenses of $1.3 million, which reflects an expansion of our sales organization along with increases in commissions and other selling expense that increase with an increase in revenue. Approximately 60% of the remaining increase is attributed to an increase in the provision for performance related incentive compensation. The balance of the increase is principally attributed to increases in salaries, travel expenses, and amortization of intangibles offset by a decrease in legal expenses.

Operating income-For the nine months ended September 30, 2012 and 2011, the Company had operating income of $11.2 million and $5.7 million, respectively. The increase in operating income is due to an increase in gross profit of $8.4 million offset by $2.9 million increase in operating expenses. An increase in revenues primarily accounts for the increase in gross profit as the gross profit percent did not change significantly between the nine month periods ended September 30, 2012 and 2011. The increase in operating expenses is related to increases in selling, general and administrative expense and research and development as explained above.

Interest expense-Interest expense was $1.8 million and $1.9 million for the nine months ended September 30, 2012 and 2011, respectively.

Foreign currency transaction (losses) gains-The Company attempts to purchase forward currency exchange contracts such that the exchange gains and losses on the assets and liabilities denominated in other than the reporting units' functional currency will be offset by the changes in the market value of the forward currency exchange contracts it holds.

For the nine months ended September 30, 2012, the Company had a foreign currency transaction loss of $0.09 million. For the nine months ended September 30, 2011 the Company had a foreign currency gain of $0.03 million.

Income tax-For the nine months ended September 30, 2012, the Company recorded an income tax expense of $3.2 million which consisted primarily of anticipated federal, state and foreign taxes. For the nine months ended September 30, 2011, the Company recorded an income tax expense of $1.4 million, which consisted primarily of anticipated federal, state and foreign taxes. The effective taxes rates are 34.5% and 35.3% for the nine months ended September 30, 2012 and 2011, respectively.

Net income-Net income for the nine months ended September 30, 2012 was $6.1 million. This compares with a net income for the nine months ended September 30, 2011 of $2.5 million. The change in net income is explained above.

Segment information

Lifting Equipment Segment

                                Three Months Ended            Nine Months Ended
                                   September 30,                September 30,
                                2012           2011          2012           2011
           Net revenues       $  51,198      $ 33,614      $ 138,910      $ 96,531
           Operating income       5,804         3,598         15,571         9,151
           Operating margin        11.3 %        10.7 %         11.2 %         9.5 %

Net Revenues

Net revenues increased $17.6 million to $51.2 million for the three months ended September 30, 2012 from $33.6 million for the comparable period in 2011. The overall market for construction equipment continues to improve but has not returned to pre-2008 levels. Certain market segments, particularly, the North American energy sector is currently very strong. Although the overall improvement in the market for construction equipment has contributed to the increase in revenues, the strong demand from the energy sector is by far is the most significant reason why revenues increased dramatically between third quarter 2011 and 2012. The strong demand from the energy sector particularly increased demand and revenues for boom trucks with higher lifting capacity and our specialized trailers that are used primarily to transport heavy equipment.

Net revenues increased $42.4 million to $138.9 million for the nine months ended September 30, 2012 from $96.5 million for the comparable period in 2011. The overall market for construction equipment continues to improve but has not returned to pre-2008 levels. Certain market segments, particularly, the North American energy sector is currently very strong. Although the overall improvement in the market for construction equipment and an increase in military sales has contributed to the increase in revenues, the strong demand from the energy sector is by far is the most significant reason why revenues increased dramatically between nine month periods ended September 30, 2011 and 2012. The strong demand from the energy sector particularly increased demand and revenues for boom trucks with higher lifting capacity and our specialized trailers that are used primarily to transport heavy equipment.


Table of Contents

Operating Income and Operating Margins

Operating income of $5.8 million for the three months ended September 30, 2012 was equivalent to 11.3% of net revenues compared to an operating income of $3.6 million for the three months ended September 30, 2011 or 10.7% of net revenues. The increase in operating income is due to an increase in gross profit of $3.1 million offset by increased operating expense of $.9 million. The increase in gross profit is due to the significant increase in revenues as the gross profit percent decreased by 1.4%. The decrease in the gross margin percent between quarters is the result of an increase in Company purchased chassis used in production between 2011 and 2012. The markup on Company purchased chassis is nominal. An increase in research and development expenses accounts for . . .

  Add MNTX to Portfolio     Set Alert         Email to a Friend  
Get SEC Filings for Another Symbol: Symbol Lookup
Quotes & Info for MNTX - All Recent SEC Filings
Sign Up for a Free Trial to the NEW EDGAR Online Pro
Detailed SEC, Financial, Ownership and Offering Data on over 12,000 U.S. Public Companies.
Actionable and easy-to-use with searching, alerting, downloading and more.
Request a Trial      Sign Up Now


Copyright © 2014 Yahoo! Inc. All rights reserved. Privacy Policy - Terms of Service
SEC Filing data and information provided by EDGAR Online, Inc. (1-800-416-6651). All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.