06.03.2015

Further profit falls at Manitex

Crane and container handling company Manitex has reported a sharp drop in profits for 2014, on higher revenues.

Total revenues for the 12 months were 7.8 percent higher than in 2013 at $214.1 million, around one percent due to a $2.3 million contribution from the ASV in December, following its partial acquisition from Terex. Pre-tax profits for the period fell 27 percent to $10.6 million. Due to higher SGA costs from the acquisitions, re-organisation and higher interest costs. The backlog at year end was $107.3 million compared to $77.3 million a year earlier.

Looking at the fourth quarter revenues were 2.3 percent higher - due entirely to the aforementioned contribution from ASV – at $66.9 million. Pre-tax profits however plummeted from $4.2 million in 2013 to $729,000 in the final quarter of 2014. For the same reasons as seen for the year as a whole.

Margins have also suffered from product mix as sales of boom trucks, and most particularly larger models, have slipped, as the market slows, partly due to developments in the oil & gas industry. This was partially offset by an improvement from higher sales of CVS container handling equipment.

Chief executive David Langevin said: “While we achieved record net sales and maintained our track record of profitability even in a difficult equipment operating environment, our company’s biggest achievements in the year were the transactions we consummated, which have positioned us for continued long term shareholder growth. ASV has an excellent track record in serving the housing industry and we believe that there is substantial value that our shareholders will recognise from ASV’s contribution, with margins that are higher than ours and exposure to the growing construction market. Further, the PM Group brings to Manitex shareholders a similar opportunity with its product extension in our most profitable crane category and a restructured balance sheet. We welcome the excellent and devoted PM and ASV employees to the Manitex family”.

“We believe that 2015 will be another challenging year for the equipment sector in general although we will continue to work hard to achieve our long term growth targets. We are implementing cost saving actions that could save us approximately $4 million this year and approximately $15 million over the next three years. These benefits will assist us in margin protection and we believe we will realise further benefits from production and integration efficiencies as well as new sales opportunities resulting from the PM and ASV additions”.

“We are optimistic that the line of knuckle boom cranes we added from the PM Group could be a very meaningful contributor to orders and to our financial performance in 2015 and beyond, and we believe that ASV will be a significant contributor to long term value enhancement for our shareholders.”

Chief operating officer Andrew Rooke added: “2014 was another year of significant progress for the company, in an environment that continued to be challenging, particularly in the second half of the year, and where our principal market, boom and truck cranes, was adversely impacted by a slower oil and gas sector and was down approximately eight percent year over year".

"It would not be an overstatement to say that the acquisition of the PM Group and the ASV joint venture with Terex made 2014 a transformational year for Manitex. Consistent with our legacy, we found opportunities to significantly diversify our market and geographic exposures. Operationally, the fourth quarter was an improvement from the third, as our mix of sales improved benefiting gross profit percent which came in at 18.9 percent, and we started with ASV operations in the last two weeks of the year.”

Vertikal Comment

Manitex has come a long way in a short space of time, and is once again at a major transformational point in its history. The two acquisitions which were concluded in December and January, should more than double revenues overnight and bring massive new opportunities. The business will though take some time to digest and integrate these major additions, which given the small senior management group will be taxing.

The company has not yet fully digested the CVS or Valla acquisitions fully so it certainly has its hands full. At the same time though it also has massive new opportunities at a great time in the economic cycle. If it ‘plays its cards right’ the company will flourish over the next few years as it races past the $500 million level towards being a billion dollar corporation.

The future is very bright……..potentially.