13.08.2018

Higher revenues at Manitex

US boom truck and crane manufacturer Manitex has reported higher first half sales, while struggling in red ink.

In the first six months revenues increased almost 31 percent on last year to $120.6 million thanks to stronger sales of boom trucks and some improvement from PM. The company also managed to reduce its pre-tax losses from $4.8 million last year to $1.8 million this year, with rising costs keeping pressure on margins. The company did though manage to reduce net debt by $39 million in the six months, making it $51 million as of the end of June, thanks mostly to the $32.7 million investment from Tadano.

Moving on to the second quarter sales were almost 23 percent higher at $63.9 million, while last year’s pre-tax loss of $1.5 million was reduced to a $460,000 loss in the same period this year. The backlog/order book at the end of June, was 59 percent higher than at the same period last year at $76 million, but substantially lower than the $88 million at the start of the quarter.

Chief executive David Langevin said: "The results reported today continue to show steady improvement in our operations, with growth in sales, margins, and adjusted income. However, we believe, the most significant event which occurred in the second quarter was the $32.7 million investment in Manitex by Tadano."

"The Tadano investment has enabled us to reduce our net debt to approximately $51 million, which represents a $144 million reduction from its peak level just over three years ago. We believe we now have sufficient working capital position to execute our global growth plans and take advantage of opportunities that our new relationship with Tadano presents."

Chief operating officer Steve Kiefer added: "In the quarter, we generated improved revenue and earnings reflecting strengthening global demand for our products and operational execution of our sales and manufacturing teams. Revenue of $63.9 million increased 23 percent versus the same period last year, and 13 percent versus the previous quarter. Our ongoing efforts to diligently manage near term currency, inflation and supply chain challenges allowed us to maintain our gross margin compared to last quarter and increase by 140 basis points versus the same period last year. To offset supply chain inflation and continue gross profit expansion, we are currently executing the necessary cost reductions and operational improvements that we believe will allow us to achieve our near term target of gross margin exceeding 20 percent.”

"We saw our core product lines well positioned to allow us to take advantage of the overall strength within the industrial goods market during the quarter. As of the end of the June quarter, backlog for our European Group, primarily consisting of our PM knuckleboom business, was up 133 percent compared to the same period last year. Going forward, we are confident that revenues contributed by PM will continue growing as a percentage of our total enterprise revenues, through ongoing dealer development and new product enhancements, as well as our important partnership with Tadano, particularly in Asia and the Middle East.”

"On the straight boom side, as we previously reported, we experienced a spike in order rate at the beginning of the year which has since moderated, and the total industry volume was approximately 800 units for the first half of the year, a healthy level, still below peak with potential to continue to go higher. 65 percent of our backlog is comprised of cranes with ratings of 30 tons and higher being driven by activity within the energy, utility, infrastructure and general rental segments.”

Vertikal Comment

While this is not a great set of results from Manitex, the company is continuing to make progress and ought to break even by the end of the year, it has plenty of opportunities to increase revenues without needing to resort to acquisitions.

The company needs to step up its marketing efforts outside of the USA, or possibly look at divesting itself of some parts of the business in order to better focus on those products where it can be market leader or a good third or fourth place. It will be interesting to see where it is at the end of the third quarter.

Longer term I would expect Tadano’s investment to start yielding some benefits – it will be very interesting to see how exactly it develops.