MNTX - Earnings call transcript Q1 2018 | Manitex International, Inc.

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Operator

Good day, and welcome to the Manitex International Incorporated First Quarter 2018 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Dave Langevin, Chairman and CEO. Please go ahead, sir.

David Langevin

Thank you, Melissa. gentlemen, you and in your ladies International. Manitex afternoon, and for thank interest Good

with I will is associated website our for energy me us, President call the are Cobalt a our knuckle will by our well. we we XXXX. with update years confidence Fallsway, order patterns and several pursuit with SEC Equipment, the On signs in today reductions company in a the and to guidance available our now will demand restatement further the followed new company. say recovery be arrived dealers has environment straight-mast continue boom Operating as recently, announced XX, distraction Also of as triggered primarily and until Walter instructions, the on Please upcycle. replay the to a decline of crane Also, any as filings straight-mast statement, selling in stated see for focus Payton behind of quarter distributors and and the many now We've begin risk of increase North the and brief equipment overview, Steve that number showing we what the multiyear release of our environment comments Officer. knuckle boom from refer business others. see our and we a cranes. recovery including year-ago, Crane harbor lot May America And in market. or to largely be appears can that we factors by optimism with price our safe many can participating the We a well call on our used improved of first which our Steve, with for after Chief from our our were Kiefer, questions. our please then welcome In equipment

production growth. schedules be we look our of to believe up, are what are and forward backlogs Our year will we solid increasing, a

up our first quarter a First and revenues from in were year-ago quarter substantially expectations. line with

quarter, in year. Our growth in improvement for percentages gross margins as our throughout the continued our crane good of we largest boom today EBITDA the we release, potential expect for market. companies this and over the stated group The Manitex remains growth knuckle showed last

stated previous is in As XXx market. the straight have market of we the knuckle releases size

represent of As we noted backlog in overall percentage our release today's an in backlog. knuckle our increase

over consistent right second are believe this expansion we throughout on of strength we and million with increases backlog orders, are So our in with production and our steady in $XX the expectations quarter, path. the And year. sales for

for over maximize great data. our position detailed we margin are over through to to to in her the than more today us sales our working will debt reductions maintained we margins, We have believe With require and pleased and this capital. to We proceed the of comments, as recently like EBITDA recovery. opening of in Organizationally, several strategic several the look operational we short-term has May would XX achieve and should years date that future did last a reaffirming hired and in to further to divesting be businesses transformation of XX. which we last starting finish simplification Corporate to like the contributions We and by those in years that is current operational Steve? long profits, mention goal forward this XX%, I over would She the Controller. it that term, value our senior-level financial of capacity strategy executive VP corporate more lead a Finance goal exceed experience. which her shareholder this upcycle. years, consistently lower I we priority with Steve company remain I'm turn maximize and a to as that

Steve Kiefer

Dave. joining Thanks, Good and thank for afternoon, ladies gentlemen, you today. us and

that our we report reported pleased key in strengthening sequential today geographies are quarter year demand that the quarter and for of the products and during last of to XXXX. first We continued each

a of First our products, quarter market net our core the market the over and new XX%. was new XXXX, of million ended $XX million, increasing We same September or versus combined up revenue $XX gains XX, year. XXXX, all operations. $XX.X was towards global versus up million an first last products, for with with activity, up since end backlog which of backlog was dealers Increasing XX.X% our backlog for of period contributed share XX% quarter the

have first also are quarter strengthening reported quarter primarily for versus in company-wide and second Based was revenue million key as by our the we knuckle and book-to-bill X.XX ratio boom straight-mast significant quarter we ratio global increasingly the X%. with lines. core anticipating production at of both to driven EBITDA and backlog during our fourth the increasing growth X.XX being market XXXX. net $XX ratio quarters, the few the market backlog, book-to-bill exceed robust are facilities is last strengthening an we on and crane exceed experienced margin Our product book-to-bill and levels to on The activity, of

X% to the annualized orders fourth activity straight-mast experienced over the to This market X,XXX versus an run were activity not orders crane of first XXXX. period. market units. units first translates of the industry XXX of in of straight-mast up level quarter crane XXXX XXXX the been quarter quarter Total since Manitex' from rate in Regarding business, general industry has

rebuild cranes strengthening X,XXX has entering market, a XXX mix straight-mast XXXX the crane mounted last accompanied that its higher build and on in strong was and XX% of continued straight-mast is units an benefit the an deep year operators favorable commercial aging fleet, Manitex. to we increasingly economic by chassis. that and multiyear driven of units. by versatility is been believe of Furthermore, market for the demand are solid patterns XXXX cost downcycle forward, of believe very and upcycle is the recognizing We a the being activity, going Additionally, X-year annualized crane of

of were XX% ratings. large levels experienced than the orders capacity X level XXXX, XXXX. is This XX straight-mast percentage in points Specifically, the first approximately for XX% and the XX-ton higher market in higher and higher percentage quarter crane than points during

are We opportunities are execute are our areas. upcycle, encouraged market in sharpening such in duration. X in further an that associated straight-mast crane several To upcycles the typically we the focus years with

and First, excellence; enhancements additions, operational and portfolio third support. second, customer the

already continue focus benefit performance strengthen believe We will lower these are in allow reducing returns levels. financial our We significantly these debt our shareholders. areas areas our our will that in and that increased us confident to significantly

substantial PM higher In orders knuckle through comprise revenue continue early our margin over that cost our total, making total percentage exist primarily is currently than XX% in towards over and optimizing progress PMs backlog, we backlog business, top Regarding contribution a enhancement to PM of which expanding XXXX. internal line our structure. revenue opportunities boom crane points our while XX

the growth is a knuckle PM is boom Continued company, of since larger the XXx our knuckle boom market especially crane market. straight-mast than for top over line the priority

position line than products in market our exceeded for you of first point Each in straight-mast translates market and market the cranes. knuckle PM X% the share straight-mast share to is was the boom crane boom quarter the in products the in quarter. crane share approximately $XX first knuckle million market less of revenue. the of Comparatively, market market share As XX% our the boom strong crane know, much knuckle Manitex our for lower than many of our

the So remains build we are parts world opportunity our continuing to out for a strengthening other North growth significant dealer American pursuing and our one company, of network, our while diligently. again, positions in that

end produced our businesses of demand were the Badger and for the by saw markets. a impacted past products decline Looking few other severely at These Sabre We at the areas in years over growing company. facilities. respective

businesses are the of accordingly. have encouraged and Badger operational resume their to accretively appropriate adjustments right to the mix we impacting We and earnings, opportunities to made the long-awaited and Manitex return prepare products Sabre

and initial loaders. in the quickly and Additionally, shipments quarter launches typical the we These the work platform sort product resolved. -- efficiencies boom that trolley were products aerial Manitex-branded experience an understood truck-mounted in began AXX of these North Manitex-branded America first of

for future products. We of both are about these excited prospects the

in straight-mast and our Going certainly be past X years crane moving trough both market the boom to crane straight-mast and for forward, our pleased we knuckle are demand increasing products. the satisfy

in remarks, the As Dave and our of mentioned his we pleased strategy are with company. our direction

a Sales single-most well appropriate demands a Our will products consistent key segments, of portfolio product surcharges the growing global towards on to basis, as remaining of enter and Price replacement demand. satisfy being electrical a importance mix infrastructure the us residential, move basis telecom energy, being and were is meet end-market and a leading is and important levels inflation. various and other raw segments we is first market are material in rail our XX% applications. that and of nonresidential X are market utilities. On XX% backlog segments verticals. estimate of we the being construction, with over targeted service backlog to We diverse improved those serving of estimate these the to to Also as economy, as monitored implemented through strong increases to quarter price and our summary, manner. offers objective a diligent demand in the increasing managed XXXX. are and fair In executing government,

us overall in well the International. time returns confident for interest manufacturing footprint, company's portfolio, Manitex in and find positioned are and increased strength Thanks distribution XXXX shareholder network and beyond. We for your and product

for We will now open up the questions. line

Operator

our Roth Matt [Operator take Instructions] we Partners. And with Koranda first from will question Capital

Brad Noss

that single-digit just what orders is of to Do see your May this growth start orders, kind just looking Noss similar I just high trending through like here? end beginning continue there? you've I quarter, just levels at strongly pretty seeing it Matt. the looks inside on and of inside of This see what sort what dynamics wanted of continued the to kind Brad to are want for since in are you -- or of quarter-over-quarter quarter orders,

David Langevin

I believe...

Steve Kiefer

Dave. ahead Go

David Langevin

believe are production going I might far this at response. as are a was increasing as say, to quarter Steve this point. and But so a bit better it, closer little we I I to you're production have that levels ahead our in you -- Okay. orders to think

Steve Kiefer

broad-based patterns any beginning quarter, and like the growing, in and have the to however, the yet Yes. as report data since We industry just first saw order positive of don't internally, quarter. we our remain second

Brad Noss

Okay, And XX% looking got market share just That's then at the increase. helpful. it.

of has of the you really that think I market XXXX, to gain since just back share? talk about you driver like end what's been main able the can said being

Steve Kiefer

in believe we believe, goes competitors our terrific of into facilities of not have of in our by we've the know calls. view, chain reasons, supply chain. don't be biggest best driver and single we -- work speculate, Brad, the part I Backed the our would, the key the if the view. of increase the I'm and about at ramping and some probably disruptions And all be share But market another I the market the some best in would in significant production assume that driver networks. in obviously, disruptions best I of the the would a supply that heard QX product, one some up would speculating I other dealership

Brad Noss

tightness think, end? specifically? I seen seeing seen issues supply labor have similar quarter we've chain or freight regarding during the competitors any some you of have And Or any or their of in supply heard in chain, tightness Okay. things since but quarter causing your sort you your

Steve Kiefer

And saw key example, starting the it, increased No in do appropriately. like get we it resources -- our that of to chassis, second the -- supply applied time for truck we for prepare paid quarter tighten we so that's previously reported, reported manage chain And like, to at what and accordingly. chain to some supply items XXXX. that's manage that we the of we

in tightness We additional have seen other areas.

shutdowns experienced to our tightness. the in due We facilities any haven't

a have to the point and to or experience interruptions month move it extent to at we given week we So in to slots machines that some time way. accommodate to going the of a cranes a in chain we've time know around put be have the component lot reslot to our and certain managing But supply a of to so. resource into it's we delivery do delayed continue

Brad Noss

me. Okay. And from then here just maybe one more

environment, some approach specific competitors, how seems QX. pricing about had some as a to dynamic relative a increases well have far? like in as stick increase full-price to of you talk price those Can how doing just just price have that you surcharge. a the going through increases well regarding Just just mentioned seem there? the put approach other for It you sort surcharges to you And so

Steve Kiefer

the beyond understood. pricing and industry, throughout issues well Well, industry crane the are the with steel

dynamics how aren't our together. that the the the though impacting accepted even customers market because it's pricing they So dealers know steel have share we a with they problem pricing, it's and of all and happy

know, that some the end managing businesses, of for primarily and price have crane of have surcharge PM dynamics pricing increases We mix quarter of our implemented we first which year. And the the Manitex, and in comprised as the on other a you through those businesses businesses depending specific were of smaller this primarily markets. and

Operator

We will next with a Shlisky question Mike Global. take Seaport from

Mike Shlisky

I your So also may reading this you have for of wanted pretty current your backlog in the last orders their environment? kind follow-up and go hearing and so, some If back the about leaves Or who was comments here? any into backlog that firm your orders? if the And to directly, your that existing on is customers there canceled of comment the release reprice older I pricing. did was

Steve Kiefer

No. We communicated and go year, in into -- units back how manage and did reprice the proactively to very we not earlier backlog this. we're the going we

were about earnings that impacted. about customers we've that we Mike, was this So seeing going we the that, calls backlog there conversations our reducing to previously in previous in ordered sharing be how because to dealers. are we is have cranes discounts on the very we in was be is with which forward-looking on handled as our discounts, what for mind cranes, a have those we going that, is quarter-over-quarter been and steel based action would and that how the reducing transparency had market stress be not are are we meaningful But keep doing managing that sequentially the --

to So reduced we discounts risk backlog going from want the orders at the anyways. put would do price not into existing a necessitate and transition to increase not

So it's all forward-looking.

David Langevin

our dramatic has you're done done been in the build that the have to results first much seeing really quarters is improvement quarter, work in stated in getting Steve the of closer gross Mike, to what backlog. his and fairly our that that improvement has and margin many profits team of goals

greater we are backlog will have -- are that those hopeful as now we go the have So we obviously forward.

Mike Shlisky

update color that's taken have of Kind many you check kind about you moving it it bit Maybe can on, I if plus you of here. how you could top on new so trolley with Okay. wanted to got year? Got line any it. million great us on gives could far? whether that the on how still And to orders or confirm AXX, this on in booms add additional going? us little dealers more $XX

Steve Kiefer

Yes.

-- the the in both will of for quarter, the orders in accelerate first we quarter, Mike, products. started second So those those

I'm are we well the early I -- They year calls, talked those prospects calls to about and, but previous going both are those. the optimistic that just well still received for market. and being crane well we're trust as expect talked going We in great for as have previous they're the objectives we products we meet about XXXXC, are performing going of the forward. the They about to still that in in talked in

Mike Shlisky

Okay. And of sort delivery and to more what you a your back straight-mast. knuckles orders to international Are coming then XXXX for are going in your XXXX? at comments think thoughts orders just the point taking and customers from as for are you yet? multiyear at we are a pretty this in you mast much Or (inaudible) that point? upcycle their the already fully this booked Are

Steve Kiefer

There half beginning looking the of $XX the in shorter quarter note tend that end would other year of the the million. sales open a is take or products. our lot thing to second backlog slots is a PM first Now the be of and be the at the at to of They cycle.

competitors. as out the So you follow book of the that they cranes some industry don't as of larger our that other from typically some may long in cranes

a the (inaudible) the have internal are our and teams, sales half at dealers doing So second hard work we and so. flat store opened teams year, in of

David Langevin

obviously, To had macro huge at cycle. not really comment this point. multiyear replacement It's that a about environment the we've around the cycle

have because not seen are did XX that not years. seeing for they of in -- orders the You Europe, they kind have this

So of have it's so energy did they experience -- they not didn't upcycle, any an that.

the seeing replacement into clearly that's and go to in North also the and the So cycle we U.S. orders year significant America, are XXXX which to prior back downturn.

we on a expectations natural process us will that that So are with what orders. our just go you as XXXX a who of cycle, working customers see will multiyear telling as through we discussions dealers that are well their because are that is

Mike Shlisky

here wheel business? this the end year the empty like it having at for I of sounds in is guys, But point totally mean, normal, slots your

David Langevin

as cycle on PM Especially Yes. process. a shorter much the because mentioned Steve side that's

process So and -- some orders a visibility, they experiencing backlogs through, time. haven't haven't are a you they those long in but get they they And in seen long seen have some time.

second So good they we a go as period into quarter. the have -- will it's

Mike Shlisky

Perfect. That's great.

you smooth there going might Are some any when the for is rest about have be your or the rest book the or be that offsetting any even in we of QX a pretty of or unusual if X QX still good rate the on you about the to be concerned there tax QX, I lumps, all, the tax in sense from I us an first of rate X and I I'm past. Just outlook some for And thank last haven't a for in that visibility. get giving trying the to to is done for want me. outlook should losses About of year. QX that QX, imagine on in -- that QX think you year.

David Langevin

the NOLs generated the of world alleviate rates cash for U.S. taxes of rest because last statutory in then around we in our of year last the the markets in rates the help of the effective of will based be that years, will with consistent But from couple our a couple most were the over more our this country. so NOLs U.S. standpoint in book years. The course, respective

all would new would closer to would differed But expect rates change U.S. is liabilities. us because So going statutory be in laws the of I that -- the we assume of forward tax booking of in I somewhat this just because to the the in

paid taxes excess of minimized Our because will be carryovers.

Operator

Global. Seaport next Shlisky [Operator will Instructions] go We with Michael to

Michael Shlisky

you if your transition I'm back, if increased QX at impacted there QX? because more well? Sorry if X that just sales as was debt all of -- in QX. questions, or that X impact curious I mind. was don't And in FX, the in I apologize QX. any

David Langevin

that it's place, product the for a we in of American Argentina. show $XXX,XXX ends cost was has but But little we've a managed do so we ends like products that's $XXX,XXX quarter -- the the there, to it Yes, there, so of because most not Argentina, further And was But most did America, nothing except North that's loss it over efficient our up many have South obviously, we up America. haven't FX impacts European significant. attributable FX times was Europe but hedge in think all everything to not any it amount. North we past, experienced in first and small hedge we not been which our in in over

So FX pretty impact. clean we have a

Michael Shlisky

potentially not model sense better a just wanted just XXXX, than QX and to guidance looking being numbers. to get you're as how I sequentially QX. QX to at But for Okay.

top 'XXs sorry appropriate mid-XXs Was of is to kind kind anything mentioned or of line. of rate in or -- at XXXX, beyond low it. way the But 'XXs there the the line unusual look high for here run numbers time. quite the 'XXs, that You on the kind QX some for in top was

David Langevin

fourth kind one than margin do. that And year at as we'll $XXX line cycle quarter fourth had did expect (sic) again a didn't last to if expected you million some aggressive up pricing each -- related so which 'XX to continue did, million we the statement a start this $XXX but some midpoint as into the and liquidations or half, we we the what $XX I the hit but realizing if let's another if first just of with 'XX. sales, guided if at the Well, expect. pure build million of you I because 'XX year-end But quarter in continues to billion quarter, good. basis something $XXX first, in year and you the we else top We we time. same But in at year on more million] in second rate we've then million I If of [$XX year, as that to and 'XX that second are restatements. margins less for, that we other of because which that's a build this but we $XXX we that expect to annualized of basis are be restatements, would know, don't do because anything reflected was that's fell that as in half we half, planning will expect up then the look

should we year, the again have guidance, from but indicated. is we this some that the just numbers not So end math

assume and to substantially lot breadth especially grow of our said, knuckle a as and 'XX, is continue would there because us. to in means a to I in market Steve $XXX side million, up -- which to goal point share our then $XXX be Somewhere obviously, would million products from

we knuckle participate. we that So are in the markets after obviously the going side aggressively

Michael Shlisky

that of to here. kind last time just Dave, clarify on one

for the lower going here more QX forward, much rate be is this is than revenue sold So the starting ASV supposed off core comping trailers now is way year, is is other outline other now business this that XXXX? potential I is an It's Or this other give kind gone. all that parties. year's was is and the much now what's and to just a run a of of where QX it of is left on the books, that wondering XXXX, rest? stuff seasonality ongoing the in to

David Langevin

that $XX out had in at as we million discontinued in the -- quarter but know that we the was did you and carved first Well, point ASV, we XXXX, still businesses.

point. was range, market without forma so So Obviously, the are we and was XXX to businesses, all in XXXX go back you on further that if pro it XXX. a from at we other up went going XXX in it a -- the different

First quarter is say, as you a slower it's a always always quarter, start. slow

our quarters there is January difficult the inventory would issues. because But are expectations third and biggest quarters second So where always your and be. month a then of other typically.

to to So I -- when million and would to good, if million, in expect will always push we we get sometimes we're that close in you $XXX way we will be then pushes tend $XXX up always now. second like we a environment handicap good 'XX, know fourth you're the are and because year-end to that's to is third things as probably get quarter, is operate and hard as

Operator

Thank or remarks. concludes conference any for this the That back you. today's additional Dave question-and-answer time, closing to At will session. Langevin turn I

David Langevin

everyone, future And interest Thank Thank for very you, look much. in to your you We thanks, quarters. forward Melissa. Manitex.

Operator

That for your concludes today's you conference. participation.+ And thank

Manitex International (MNTX) 9 May 182018 Q1 Earnings call transcript