16.05.2017

Revenues slump at Manitex

Manitex, owner of PM/Oil &Steel has reported a steep drop in first quarter revenues, but with a reduced loss.

Total revenues were $67.85 million almost 21 percent down on the same period last year, due to the inability to ship and the disposal of the Italian port and marine handling operation. Almost all of the fall came from the Lifting division, which includes Manitex, PM/Oil& Steel and Valla, along with the distribution operation.

Revenues in the Lifting division were 28 percent lower at $37.5 million, with an operating loss of $395,000 compared to a profit last year of $3 million. The backlog/order book at the end of March was $60.5 million compared to $49 million at the same point last year, and up from $38 million at the start of the year.

Distribution revenues, largely used equipment, parts and some rental, plunged 43 percent to $3.2 million. The ASV business was slightly lower. The company’s pre-tax losses were lower at $1.7 million, compared to a loss of $3.3 million last year.

Chief executive David Langevin said: “Our first quarter of 2017 results reflect a transition from a multi-year downturn in the industrial equipment markets into what we believe is the beginning of a gradual recovery in our largest markets. We were very excited to report during the quarter that our backlog had significantly increased from the end of 2016. And recently we reported that this trend was continuing and our backlog had grown to over $60 million from $38 million at the end of 2016. While we are very pleased with the continuation in the increase in our order backlog, we believe we are still very much in the beginning, and very far from peak level production and sales levels that we estimate to be approximately $350 million for our existing businesses.”

“Further, we reported today that our adjusted gross margin had reached 21% for the current quarter which matches the highest level we had seen in several years, and that accomplishment is largely due to our concentrated efforts to reduce the cost structure and from the sale of businesses that were yielding gross margins that were well below the company’s average. As we increase our production and shipments begin to ramp-up to meet our backlog we will expect revenues, gross profit and cash flow to move gradually higher throughout this year and beyond and we are optimistic that we are well positioned to take advantage of what appears to be the beginning of a recovery.”

“We also continue to explore strategic options for our ASV joint venture, with a focus on the sale of all or a portion of our ownership interest in the company. We have made no decision on any option at this time, but we continue to pursue all opportunities. We should note, that if a transaction of the type contemplated were to be completed, it would dramatically transform our balance sheet since ASV would no longer be consolidated into our financial statements. This means that the debt on our balance sheet would be not only reduced by the proceeds of that transaction, but that ASV’s entire debt of approximately $45 million (which is non-recourse to us) would no longer be reflected in our balance sheet.”

Vertikal Comment

Manitex suffered the same problem as a number of manufacturers in the USA in that it did not anticipate a strong pick-up in activity, enough to have product available to deliver in the quarter, mainly due to not have chassis available to mount cranes on. As a result it ended the quarter with weaker sales but a strong improvement in its order book. All of which suggests that the year might be better than the poor start suggests.