Manitex International, Inc. (MNTX) on Q1 2021 Results - Earnings Call Transcript
Operator: Greetings, and welcome to the Manitex International Incorporated First Quarter 2021 Results Conference Call. During the presentation, all participants will be in listen-only only mode. Afterward, we will conduct a question-and-answer session. As a reminder, this conference is being recorded. I would now like to turn the conference over to Steve Filipov, Chief Executive Officer. Please go ahead.
Steve Filipov: Thank you, operator. Good afternoon ladies and gentlemen, and thank you for your continued interest in Manitex International. I hope everyone is safe and healthy and appreciate everyone taking the time to listen to our call. Today on the call with me, I have Joe Doolan, our CFO, who will discuss in more detail our financial results. Please see our website or our release for replay instructions for this call, which will be available until May 13, 2021.
Joe Doolan: Thanks, Steve. Good afternoon, everyone, and thank you for joining the call today. Slides 5 and 6, reflect our financial performance for the quarter. Please turn to slide 5 and I'll address my comments from this slide. Our revenues for the quarter were $47.2 million, an increase of 4.4% compared to the $45.2 million for the fourth quarter of 2020. The increase was driven mainly by higher sales of our straight mast cranes in our Manitex business. Sales of knuckle boom cranes at our PM business in Q1 were consistent with sales in Q4. Our first quarter net loss was $0.8 million, a $1 million improvement from the fourth quarter net loss of $1.8 million. The improvement was driven by higher gross margin of $400,000 due to increased sales of $2 million, as I mentioned and lower income tax expense of $600,000. The loss per share was $0.04 for Q1, compared to a loss of $0.09 per share in Q4.
Steve Filipov: Thanks, Joe. Please turn to slide eight and let's turn our attention to our outlook for Q2 2021. COVID-19 will continue to be top of mind for all of us at Manitex. And while vaccination rates continue to show progress globally, we still have a long way to go and we will remain vigilant about our team's health and safety for the future. As we have commented several times today, our record backlog of over $100 million gives us confidence and visibility to what we expect to be much improved financial results in 2021 over 2020. And we're excited to see that this demand is coming from all markets and across all businesses. We still have challenges to overcome, as we ramp up to meet this growing demand, but I'm confident our management team is taking the right steps to mitigate any supply chain issues that arise. We're also working with our customers and our dealers to deal with the current volatility in component pricing and taking the necessary actions to not dilute our margins. We will turn challenges to opportunities and keep focused on delivering the best products to the market and making Manitex a larger, more diversified and more profitable company going forward. With that, operator, could you please open the lines for the Q&A session?
Operator: Thank you. One moment please for the first question, which comes from the line of Mike Shlisky with Colliers Securities. Please go ahead.
Mike Shlisky: Good afternoon, guys.
Steve Filipov: Good afternoon, Mike.
Joe Doolan: Hey, Mike.
Mike Shlisky: A question about the backlog. It looks great, both quarter end and April 30. A big topic has been, are the backlogs due to really strong demand, or are there a handful of unshipped cranes you wish you could have had, but you couldn't ship by the end of the quarter, because of chassis availability or other issues with the supply chain? Is there any way you can kind of break out what you may have missed in the quarter from a revenue perspective that will come eventually, but just is still stuck in backlog there?
Joe Doolan: Sure. Sure, Mike. Yes, I mean, its demand driven, I'd say, across the board. There really wasn't much that we missed from a production perspective in the first quarter. And sitting here the middle of the second quarter, we're dealing daily with supply chain challenges. But to be honest with you, there are some areas that are getting better. We're managing through them and demand still is strong across the board. I think the numbers that we mentioned, whether its knuckle booms, boom trucks, aerials and even Valla, are all still today in high demand. So I tried to talk a little bit about the markets which are driving those. And North America utility markets are strong. The tree care market is still very strong. Obviously, residential housing which continues to go up is strong. So I think the demand is there. Now, obviously, lead times are getting a little bit longer. So people are getting ahead of -- our customers are getting ahead of that, but we feel pretty good about that backlog that continues to be strong.
Mike Shlisky: And then, just you mentioned, Joe that you're kind of monitoring the supply chain story, but you have not actually faced any major challenges yet. Is that a fair statement? And is it something we should definitely be concerned about for the second or third quarter here, or just more of a theoretical thing to watch for?
Joe Doolan: Sure. No. I would say, Mike, in the first quarter we talked about the steel volatility availability being an issue. I would say we took the opportunity to buy forward on -- at least from our steel suppliers. And now I would say, steel has actually not been too bad from a delivery perspective from those suppliers. I'll tell you, I was on an operations call yesterday. And we had one of our suppliers that delivered two days early. So that's a positive thing. I would say that, there's always something missing today versus 12 months ago. And we're managing through that. And as I said, the management team we have in place is doing a great job to manage our parts supply. And I think we feel pretty good about, where we are. And I think the first quarter demonstrates that even in that turmoil that we talked about we didn't do too bad. Sequential revenue is up 4%. The EBITDA is up and the backlog is up. And I think those are all leading indicators that give us confidence that 2021 shouldn't be all that bad.
Mike Schilsky: Got it. Sorry to harp on backlog again, but one more question on the backlog. Is that a five-year high here as April 30? I just want to make sure that that's apples-to-apples. The backlog that you're talking about on April 30 is obviously just mainly straight mast and knuckle boom.
Joe Doolan: No. I would say its like-for-like, right? So the product line…
Mike Schilsky: Okay.
Joe Doolan: … we're just comparing the product lines that we have five -- we went back five years ago to your point, the company was much different after that. So we thought that was a good comparison.
Steve Filipov: Yeah. That's exactly right. Yeah, we compare to the same product lines now that we had back then.
Joe Doolan: Exactly.
Mike Schilsky: Just making sure.
Joe Doolan: Yeah.
Mike Schilsky: And maybe the last one for me, you had mentioned Steve, potential for positive growth in 2021 and beyond, so a kind of multi-year story here. What gives you the confidence that there is a multiyear tailwind, across both the businesses?
Steve Filipov: Well, I think the obviously the backlog substantiates the markets that we're in, the products that we build, and the customers -- the end markets I should say, that we deliver to, are pretty strong right now. And that gives us the confidence that, not only in 2021, but in 2022 we see positive growth. Remember that, we talk about a knuckle boom market globally that's 50,000 units is growing. We're gaining share in some markets. And we're ramping up. There's a lot more opportunity for us to grow in knuckle booms, as we've mentioned before. The boom truck business in the North America -- in North America is coming from a pretty low-base. So that is going to continue to grow. And as I've mentioned before, we feel that that business should stabilize between, 1,000 to 1,200 units in North America coming off of a low of 700 or so units. Then you have the Aerials business, which we mentioned is up significantly in the backlog. And we're growing share in that business and launching new products. Valla is in our mind really just with zero emissions and everything going on around ESG is really just in its infancy. And we're already seeing good traction there. So I'm pretty confident that, 2021 is going to be better than 2020. And 2022 should be better than 2021. At least that's the focus that we have today.
Mike Schilsky: Excellent. Thanks so much. I will pass it on.
Steve Filipov: Great. I appreciate it Mike.
Operator:
Steve Filipov: Is there anything further there operator? Questions?
Operator: We do have a follow-up question from the line of Mike Schilsky with Colliers Securities. Please go ahead.
Mike Schilsky: Hey guys, if it's just me I'll keep going, while we're on the phone here.
Steve Filipov: Sure.
Mike Schilsky: Curious, how -- can you update us on? How it's going over in Asia with Tadano and efforts to kind of grow there?
Steve Filipov: Yeah. Mike, I'd say, we're down year-over-year on revenue with Tadano, because we had a big shipment, which we I think mentioned in the first quarter last year to the Middle East. Obviously, the Asian markets have been open closed the past six to eight months. So I would say, it's still -- it's, okay, but we need a little bit more runway there to see how these markets are going to take off. And I mentioned about, moving into Australia with the Tadano team. We're still working on the plans for that. So we're going to keep working it. At the end of the day, Europe, North America, Latin America, Middle East to a certain extent are the real focus markets for us. And we see those gaining ground again in the knuckle boom business.
Mike Schilsky: Okay. Got it. Well, that was it. Thanks guys. I appreciate it.
Steve Filipov: All right. Thanks Mike.
Operator: There are no further questions at this time. I will now turn the call back to you. Please continue with the presentation and/or closing remarks.
Steve Filipov: Okay. Thank you very much operator. And thank you everyone for your interest in Manitex. We appreciate your time today. And again, we feel good about where we are in a complex business and environment. But we feel like we've got a strong backlog over $100 million and confident that we'll be able to deliver growth in 2021 and beyond. So thank you all very much. We appreciate it.
Operator: That does conclude the conference call for today. We thank you for your participation. And ask that you please disconnect your line.
