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Manitex International Inc. Reports First Quarter 2011 Results

Wed May 18, 2011 - National Edition
Construction Equipment Guide

Manitex International Inc. recently announced first quarter 2011 revenues of $31.7 million representing a 44 percent year-over-year increase. Net income for the first quarter of 2011 was $0.4 million or $0.04 per share compared to $0.3 million or $0.03 per share for the first quarter of 2010.

First Quarter 2011 Financial Highlights:

• Net revenues for the quarter ended March 31, 2011, were $31.7 million, representing a 44 percent increase from $22.0 million in the first quarter of 2010 and a sequential increase of $2.2 million or 7 percent from the fourth quarter of 2010. Excluding the impact of the CVS Ferrari operations, net revenues increased 15 percent from the prior year’s comparable period.

• Consolidated backlog at March 31, 2011, of $48 million was an increase of 20 percent or $8 million from Dec. 31, 2010.

• EBITDA for the first quarter of 2011 was $2.1 million, or 6.5 percent of sales, compared to $1.8 million or 8.3 percent for the first quarter of 2010.

• Gross profit of $6.5 million was an improvement of $1.2 million compared to $5.2 million in the first quarter of 2010. Gross margin of 20.4 percent of sales compared to 23.7 percent for the first quarter of 2010 with the reduction largely due to a less favorable sales mix in the quarter.

• Net income for the first quarter of 2011 was $0.4 million or $0.04 per share as anticipated, compared to a first quarter 2010 net income of $0.3 million or $0.03 per share. Included in the first quarter 2011 net income are approximately $0.5 million of expenses related to sales and marketing expenses for ConExpo.

Chairman and Chief Executive Officer David Langevin, said, "First quarter sales and profits were in line with our expectations and we are particularly encouraged by the improvement in sales and growth in our backlog. Our first quarter expenses included approximately $500,000 of unusually high sales and marketing expenses, equivalent to $.04 per share, related to the ConExpo convention which is held once every three years and from which we believe we obtained numerous market opportunities as well as completing two very important distribution agreements for our Manitex business.

"Subsequent to the end of the first quarter we were pleased to announce that we had been notified that we had successfully moved through the next stage of the process to acquire certain assets of CVS SpA that operated in the container handling equipment market. With this progress, we would expect to complete a transaction during the third quarter of the year, well in advance of our initial expectations, which will help us to further penetrate this attractive and growing market segment."

First quarter 2011 net revenues of $31.7 million, including approximately $6 million of sales from the Italian CVS Ferrari operations, increased $9.8 million or 44 percent over the first quarter of 2010. Revenue increases were obtained in both operating segments, with lifting equipment increasing 40 percent through a combination of cranes at 45 percent, and material handling products at 35 percent and equipment distribution increasing 152 percent.

Crane sales continue to reflect strong demand for larger tonnage product from the specialty energy and utility markets, in both the United States and internationally. Material handling products benefited from another strong quarter from the CVS Ferrari container handling business and improved demand in the specialized trailer market which helped offset weaker demand in the higher margin military and specialized governmental product. The increase in distribution revenues was driven by used equipment sales program, which began in the second half of 2010. On a sequential quarter basis, total revenues increased 7 percent largely due to increased sales from the crane operations.

Gross profit of $6.5 million was a $1.2 million increase above the first quarter of 2010 driven by increased volume. Gross profit margin for the quarter was 20.4 percent compared with 23.7 percent for the first quarter of 2010 with the reduction resulting from lower margin product mix in sales, particularly in the material handling and distribution operations. Compared to the first quarter of 2010, in material handling, there was a decrease in shipments of higher margin military and governmental units while in distribution, the increase in revenues was principally from lower margin used equipment sales.

Operating expenses for the first quarter 2011 were $5.2 million and included expenses of $1.4 million relating to expenditures at the ConExpo construction show, the CVS Ferrari operations and new operations started in 2010. This compared to the first quarter 2010 of $4.2 million. R&D expenses were flat at $0.3 million. SG&A expense of $4.9 million, including the above items was equivalent to 15.4 percent of sales for the quarter compared to 17.5 percent for the first quarter of 2010.

Andrew Rooke, Manitex International president and chief operating officer said, "Operational results for the quarter were in line with our expectations although clearly impacted by the significant marketing expenditures at the ConExpo show. We are encouraged by the performance of our crane operations and particularly the boom truck crane products where demand from domestic and international energy markets has driven not only strong sales, up 45 percent in the quarter, but also growth in the backlog which, on a consolidated basis, increased 20 percent from Dec. 31, 2010. Our Italian CVS Ferrari operations performed to expectations in the quarter and we continue to develop this business which we see as being in a sector well poised for growth, based on world container activity.

"Working capital remains a key focus as the level of activity increases, and the ratio of operating working capital to annualized last quarters sales, improved 100 basis points from Dec. 31, 2010 to 30.1 percent. This remains a key metric for the operations and our first target is to return to the 25 percent level of quarter four of 2008, which will require careful management of the supply chain as we progress through the year and manage critical components for delivery schedule and cost."

Langevin concluded, "We expect the second quarter to show a continuation of our recent quarter’s trend with an increase in sales approximating to the increase in our backlog, together with improving operating leverage. At the same time, we expect to see an increase in gross profit resulting from our sales expansion but we anticipate a continuing challenge in gross profit percentages due to a change in product mix and the impact of material cost increases that are being seen across a wide range of the supply chain."

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