06.11.2014

Profits slip at Manitex

US based crane group Manitex has reported a sharp drop in profits for the third quarter on higher revenues.

Nine month revenues at the company were up 10 percent to $197.2 million, while pre-tax profits for the same period fell three percent to $9.9 million. During the third quarter, which the company warned would be difficult earlier this week, revenues actually increased 15.1 percent to $66.2 million, but pre-tax profits slumped 29 percent to $2.7 million. The backlog at the end of the quarter was up over five percent on this time last year at $102.1 million – 32 percent higher than it was at the start of the year.

Chief Executive David Langevin said: "From an operational perspective our third quarter was similar to the second quarter, but, as we expected, with a higher proportion of our production and sales allocated to smaller tonnage cranes and material handling products. Consequently, the product mix negatively impacted our bottom-line for the quarter. As we announced earlier this week, however, we have seen a good rebound in orders for higher tonnage cranes in recent weeks, and we expect that mix and margin improvements in the fourth quarter and beyond to be led by military orders in Liftking and stronger orders for our larger cranes from numerous dealers."

"While worldwide demand for capital equipment could be mostly characterized as sluggish, as a niche provider serving diverse markets, we continue to see certain pockets of strength within our product portfolio. And consistent with our history even in a more challenged economic environment, we have taken advantage of opportunities to grow our business, adding new product lines, geographies, and channels to market to ensure our continued long-term growth, while simultaneously seeking out ways to optimize our production and cost structure.”

“We remain on track to close the acquisition of PM Group, which adds over $100 million of profitable revenue to our base of business, and we believe this will be a substantial growth area for us as we take this product through our distribution into the North American markets. We recently announced the A.S.V. joint venture with Terex, which also adds profitable revenues of over $100 million that will allow us to participate in a market that is showing signs of early recovery. Upon the closing of these transactions, we expect to enter 2015 as a company with an opportunity to participate in more markets than ever, and achieve revenues in excess of $500 million with significant growth in profits for the benefit of our shareholders."

Vertikal Comment

While the drop in profits would have been something of a surprise if the company had not lowered expectations earlier in the week, the results still indicate solid progress from the company in building up a substantial international crane business.

Next year it expects to achieve revenues of $500 million, a far cry from the $107 million it achieved in pre-recessionary 2007. More importantly now is that the company maximises what it has, only the Manitex boom truck business is anywhere close to being a major player in its sector. Substantial growth potential lies within most of its other operations, a good deal of which could come by simply a sharing of each companies contacts and distribution network.

It probably does not need another significant acquisition for a year or two, while it digests PM and gets to grips with A.S.V, not to mention Valla.