NASDAQ:MNTX Manitex International Q2 2024 Earnings Report Earnings HistoryForecast Manitex International EPS ResultsActual EPS$0.11Consensus EPS $0.08Beat/MissBeat by +$0.03One Year Ago EPSN/AManitex International Revenue ResultsActual Revenue$76.24 millionExpected Revenue$75.23 millionBeat/MissBeat by +$1.01 millionYoY Revenue GrowthN/AManitex International Announcement DetailsQuarterQ2 2024Date8/7/2024TimeN/AConference Call DateWednesday, August 7, 2024Conference Call Time9:00AM ETUpcoming EarningsManitex International's next earnings date is estimated for Wednesday, April 30, 2025, based on past reporting schedules. Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Manitex International Q2 2024 Earnings Call TranscriptProvided by QuartrAugust 7, 2024 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00Good morning, ladies and gentlemen, and welcome to the Manitex International Second Quarter 2024 Results Conference Call. Answer session. This call is being recorded on Wednesday, August 7, 2024. I would now like to turn the conference over to Paul Bartoli, Investor Relations. Please go ahead. Speaker 100:00:36Thank you. Good morning, everyone, and welcome to Manitex International's Q2 2024 results conference call. Leading the call today are CEO, Michael Coffey and CFO, Joseph Doolin. We issued a press release earlier today detailing our Q2 2024 operational and financial results. This release together with the accompanying presentation materials are publicly available in the Investor Relations section of our corporate website at www.manitexinternational.com. Speaker 100:01:09I would like to remind you that management's commentary and responses to questions on today's conference call may include forward looking statements, which by their nature are uncertain and outside of the company's control. Although these forward looking statements are based on management's current expectations and beliefs, actual results could differ materially. For a discussion of some of the factors that could cause results to differ, please refer to the Risk Factors section of our latest filings with the SEC. Additionally, please note that you can find reconciliations of historical non GAAP financial measures in the press release issued earlier today and in the appendix of this presentation. Today's call will begin with prepared remarks from CEO, Michael Coffey, who will provide a review of our recent business performance, including an update on the progress we have made on our new Elevating Excellence initiative, followed by a financial update from our CFO, Joseph Doolin. Speaker 100:02:02At the conclusion of these prepared remarks, we will open the line for your questions. With that, I'll turn the call over to Mike. Speaker 200:02:11Thank you, Paul, and good morning to everyone joining us on the call today. During the Q2, we continued to make important progress on our elevating excellence strategy. And as a result, we produced further margin expansion, generated strong adjusted EBITDA growth and further reduced our net leverage. Our 2nd quarter performance was highlighted by growth in the rental operations, gained momentum in our cost reduction initiatives and ongoing process improvements. This resulted in nearly 20% year over year growth in adjusted EBITDA. Speaker 200:02:52Our 2nd quarter adjusted EBITDA grew 137 basis points to 10.6 percent of revenues. This was our 4th consecutive quarter with an adjusted EBITDA margin of greater than 10%, generating adjusted EBITDA of roughly $33,000,000 on a trailing 12 month basis. This level of performance, which has come despite some mixed end market trends, is a direct result of our successful execution of our strategy, elevating excellence. The business is performing at higher levels, and we have confidence that we can build on a track record of consistent performance. With that, please turn your attention to Page 3 of our presentation, where we will begin with a discussion of our 2nd quarter performance. Speaker 200:03:49Our 2nd quarter lifting equipment revenue increased 2%, driven by growth from our North American operations. We made further progress in improving our manufacturing velocity, which also benefited the results. Order intake has slowed in the year, likely due to increased interest rates. Higher interest rates are slowing machine replacement cycles. They are also lowering the overall stocking levels maintained by our dealers. Speaker 200:04:23We are not seeing fundamental weakness in construction outlooks, however. To the contrary, public work spending is increasing as our other key end market drivers affecting Manitex. Some customers have made requests to push out delivery schedules for the aforementioned reasons. We are commenting these customers where possible with scheduling requests. While high interest rates are forcing dealers to delay replacing stock due to carrying cost, We remain confident in the long term drivers in our key markets. Speaker 200:05:02So we believe this is likely a short term issue. However, until we get some more clarity on macroeconomic outlooks, the timing of rate cuts and the U. S. Election, we think customers will remain cautious in the near term. This is reflected in our orders during the quarter and our ending backlog levels. Speaker 200:05:27That said, we remain focused on our growth initiatives and are aggressively moving forward with our strategy to increase our market share, expand our dealer network and drive product innovation. We continue to make good progress on our dealer expansion strategy, which is an important aspect in our goal to increase the distribution of our PM Group products in North America. We are working with identified potential partners and remain on schedule. This is a significant interest there is a significant interest in demand from our dealer community and our portfolio of articulated lifting solutions in North America. And we look forward to updating you on our progress later this year. Speaker 200:06:19We had a strong quarter in our Rental segment, with revenues increasing 15% in the 2nd quarter. The increase is owing to both geographic and fleet expansions. Demand trends in our North Texas markets remain robust, and we are benefiting from our increased investment in our rental fleet. Our location in Lubbock also continues to perform well, and we are very pleased with the progress at this newest location. 2nd quarter gross margins were up 220 basis points from the same period last year, driven by increased manufacturing throughput, lower material costs and increased contributions from our rental segment. Speaker 200:07:10We continue to be encouraged by our progress on our supply and sourcing initiatives. Supply chain pressures have been a constant headwind for both Manitex and the industry. We are pleased to finally be seeing some benefits from the lower material cost flow through our results. As we discussed, last year we reorganized our global supply chain structure and the new initiatives and our team's hard work are producing positive results. And keeping with this, we added new suppliers designed to improve collaboration and lower our cost. Speaker 200:07:55We look forward to furthering these efficiencies and improving our supply chain going forward. These operational improvements enabled us to generate 2nd quarter adjusted EBITDA of 8,100,000 dollars an increase of nearly 20% from the same period last year. We are very proud of this progress and our trailing 12 month EBITDA is up roughly 25% from the prior 12 year period. Another important component of our strategy, elevating excellence, has been a focus on disciplined financial management and capital allocation. We reduced our net debt by over $2,000,000 during the quarter, further driving down our net leverage ratio 2.5 times at the end of the quarter. Speaker 200:08:53Our progress on our capital discipline in recent quarters has been somewhat masked by industry wide supply chain challenges. So we are happy to see the reduction of net debt in the quarter and we expect to further reduce our working capital levels positioning us for a strong year of cash flow conversion and allowing us to drive further reduction in net debt as the year progresses. Elevating excellence, our 3 year strategy has delivered improved results and the business is performing at record levels. Despite interest rate headwinds, our core end markets are strong and customer relationships are improving. While the current macroeconomic trends remain uncertain, we are committed to executing on what is within our control. Speaker 200:09:45These controllables include improving our processes, cost of production improvements and new dealer partnership channels in North America. It is this disciplined focus on our strategic priorities that has enabled us to deliver strong adjusted EBITDA growth and margin expansion during 2024, despite the slowing in order trends we are experiencing in recent quarters. As a result of the order trends, we are lowering our full year 2024 revenue guidance to a range of $290,000,000 to $300,000,000 However, we continue to expect our 2024 adjusted EBITDA to be in a range of $30,000,000 to 34,000,000 dollars demonstrating our strong execution against operational priorities. With that, I'd like to turn the call over to Joe. Speaker 300:10:46Thank you, Mike, and good morning, everyone. I will provide some additional details on the quarter and give an update on our liquidity and balance sheet. Turning to Slide 9. Net revenue for the 2nd quarter was $76,200,000 or an increase of 3.7 percent compared to the same period last year. The growth during the quarter was driven by further improvements velocity in our equipment business and strong growth in our rental operations. Speaker 300:11:16The Lifting Equipment segment revenue was $67,900,000 during the Q2, an increase of 2.4% versus the prior year period, with growth driven by the North American truck crane sales. Rental equipment segment revenue was $8,400,000 in the 2nd quarter, an increase of 15% from the prior year period. The growth was driven by continued favorable demand trends in our North Texas markets and our investment in fleet growth. As we discussed last quarter, based on favorable market trends in our key markets, we have made the decision to pull forward much of our expected capital spending on fleet expansion into the early part of 2024 and this was an important contributor to our growth during the quarter. As of June 30, total backlog was $116,000,000 down from $154,000,000 at the end of Q1. Speaker 300:12:12Our backlog ended the quarter with North America representing approximately 50% of the total with international the remaining 50%. Gross profit was $17,200,000 during the Q2 of 2024, up from $14,900,000 during the prior year period or an increase of 15%. The increase in gross profit was driven by increased manufacturing throughput, lower material costs driven by supply chain initiatives and increased contribution from the rental segment. As a result of these factors, gross profit margin increased 220 basis points to 22.5% in the quarter. SG and A expense for the quarter was $11,100,000 up modestly from $10,800,000 in the same period last year. Speaker 300:13:05R and D expense was $900,000 during the quarter, also up very modestly from the prior year period. We've been able to hold our operating expense levels basically flat in recent quarters despite the revenue growth and investments that we are making in the business and we expect this trend to continue moving forward driving continued margin benefits. Operating income was $5,100,000 during the quarter, up from $3,300,000 for the same period last year. 2nd quarter operating margin was 6.7%, up over 200 basis points from last year. The year over year improvement in operating income and operating margin was driven by the improved gross margin performance and operating leverage. Speaker 300:13:53Adjusted EBITDA was $8,100,000 for the 2nd quarter or 10.6 percent of sales, up from $6,800,000 or 9.3 percent of sales for the same period last year for an increase of 19%. Net income was $1,500,000 or $0.07 per diluted share for the 2nd quarter compared to net income of $400,000 or $0.02 per share for the same period last year. Adjusted net income was $2,200,000 or $0.11 per diluted share in the 2nd quarter, up from adjusted net income of $1,700,000 or $0.08 per share for the same period last year. Adjusted net income for the 2nd quarter excludes $700,000 of stock compensation and other non recurring expenses. Now turning to our balance sheet on Slide 10. Speaker 300:14:48As of June 30, net debt was $83,900,000 which is down over $2,000,000 from the end of the first quarter despite the pull forward of some capital spending as a result of our cash flow benefited from solid operating results. As a result, net leverage improved to 2.5 times at the end of the second quarter compared to 2.9 times at the end of the Q4 of 2023. We continue to expect our working capital usage to further normalize in the coming quarters, which could result in a reduction in inventory levels, leading to improved free cash flow conversion and even further reduced leverage levels by the end of the year. As of June 30, total cash and available liquidity was approximately 33,000,000 dollars That completes our prepared remarks. Operator, we are now ready for the question and answer portion of our call. Operator00:15:44Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from Ted Jackson from Northland Security. Ted? Speaker 400:16:42Sorry about that. Sorry about that. I was on mute, but I unmuted. So again, good morning and congrats on the quarter to the 2 of you. Speaker 200:16:49Thanks, Seth. Speaker 400:16:50You can hear me now. Good morning. Yes, we can hear you fine. Good morning. Speaker 200:16:55Okay. All right. Speaker 400:16:56So I got a handful of questions for you. Let's start with the lift truck business. I mean, talking about weakness in bookings, you're going through the backlog. When you look into that business and the challenges that you're seeing, can you give some color with regards to it from a geographic standpoint? I mean, is it U. Speaker 400:17:15S? Is there some European component in it? And then also from like a market vertical, if you would, like some of the, call it, your peers have talked about some hesitancy within the utility section in the U. S, for example. That'd be my first question. Speaker 200:17:31Sure, sure. Ted, good morning and appreciate the questions. There's some areas of geographic concern or maybe lack of geographic concern. For example, mining the areas that are exposed to mining and minerals are completely unaffected. They're just moving forward with a lot of strength. Speaker 200:17:56And we had some early on hesitancy in some European markets as customers were waiting for some tax guidance, capital investment tax guidance that came out in our favor. And so these are anecdotal requests for the most part or anecdotal points of information. I'd say the most of the concern this year is in North America and it's an election year. I think that is often a catchall. But unequivocally, the overwhelming theme that we're hearing from our customers is concerned with regard to infrastructure and it's stalled or slowed normalized equipment replacement, where used machines, let's say, you have a crane operator, this is theoretical, but if you have a crane operator that has 10 to 12 assets in their fleet and 7 or 8 of them are ready to replace, they're just they're holding on to those longer to see what happens with interest rates. Speaker 200:19:04And dealers are being more careful in replacing fleet during this process primarily because of carrying costs. And that seems to translate in just about any market where we have dealer inventory. As far as end markets in particular, I'm aware of some of those comments in the utility range. I think most of that centers around excessive bucket truck inventory, which we really are not participating in. We're not seeing any signals of hesitancy with utility construction for our products and or the pending demand due to public works projects. Speaker 200:19:56To the contrary, I think there's a lot of construction work to be done, just on hesitancy with regard to carrying costs and interest and things that are, I suppose, out of everyone's control. Speaker 400:20:18Okay. Question number 2, going over to the rental side of the house. Listening to, I mean, for instance, Caterpillar and also some of the other larger rental shops, There's a general commentary with regards to, let's call it, a softening with regards to rates And it sounds like you're not seeing that. Or is that any concern to you? And is it just because you happen to be in North Texas that that's the reason? Speaker 400:20:51I mean, just maybe more color around why you're seeing strength where other people are actually starting to talk a little bit more about kind of weakness within that area? Speaker 200:21:00Well, yes. So our we are no one is completely insulated to any of this. We have not experienced any downturn to the contrary. The markets that we're in, in North Texas are strong. They're smaller, but we are playing in a position of strength in markets that are growing and have a lot of activity. Speaker 200:21:23And so that favors us. And frankly, we bought a really capable and exceptional company in that space. Rayburn Reynolds has been fantastic. So we're keeping our finger to the pulse of what's happening with our customers. We've had a couple of customers run into a few problems and we've been able to avoid some of the associated downfalls with regard to that. Speaker 200:21:53But overall, these little markets are performing really, really well And we couldn't be happier for the expansion that we had in Lubbock. I mean, it's we're just over a year in that new location. The team is performing well. The market is performing well. Joe mentioned before that we pulled forward some capital investments to get ahead of that curve. Speaker 200:22:22And that fleet is very well utilized. And it's showing in the numbers. So there's always going to be problems in any economic downturns that these areas are just less impacted. They're more insulated from those types of downturns. Speaker 400:22:413rd question, I have one more after this is moving over to the U. S. Market in the effort to bring your knuckle products from Italy here. It sounds like you're still on track to have an announcement with regards to some distribution partners there. In the past, you've signaled that it would be a couple, maybe as many as 3. Speaker 400:23:04So my first question towards this is, is that still kind of stand that we could see a couple of distribution partners in that area? And then secondly, as a follow-up into that, given that these trucks are really coming out of Italy and being imported, at least for the time being, how are you going to handle the ability to support those distributors in terms of parts and service, mainly within parts? I mean, are you going to need to bring some inventory level of spare parts from Italy into the U. S. And put that on your balance sheet to ensure you're providing the support level that your dealers will need? Speaker 400:23:44I mean, kind of a little color around that and then have one more afterwards. Speaker 200:23:49Yes. I really like the questions. So we're speaking in a bit of cryptic terms and not naming names because we're in active discussions with new dealers and it's a competitive market. So we don't want to signal what we're doing to our competitors. We are in active discussions with 5 North American dealers and some of them have placed preliminary orders to getting familiar with the products. Speaker 200:24:21We're pretty excited about the individuals that we're talking with. We're very excited about the markets that they're serving. And the way that we've gone about this for years and the way that we're going about it now is, we're engaging with them. They're ordering a handful of products. They're testing the markets. Speaker 200:24:41We're doing price and customer feedback testing. And it will crescendo with an announcement that will be a partnership announcement between these dealers and us. So our expectation, Ted, is that we're expecting to have 2 or 3 appointments this year, and that's why we're talking to 5. We're actually talking to many more than that, but there are 5 that are on our high target list, if I can use that phrase. Regarding the support of the product, the question is really insightful. Speaker 200:25:21Our whole strategy in North America was to build an organization structure that essentially could act like a manufacturer support arm in North America. And that's been built. We put that structure in Georgetown. We have a team of product support, product managers, engineering. Even though that we're not manufacturing the crane in the U. Speaker 200:25:46S, we're supporting the crane from the U. S. And that's by design. And with that has come high moving parts stock that needed to be put in place in North America and that's also done. We actually brought critical parts to the U. Speaker 200:26:04S. To support the products that we're marketing in the United States. And we just we want to make certain that these products are really well supported. The customer is getting strong technicals. And if there is a part failure or damage that we can get them back online and running quickly. Speaker 400:26:29That's actually really encouraging news. Okay, my last Speaker 200:26:33The good go ahead, Ed. Go ahead. Speaker 400:26:35No, no, no, no. Keep going. I'm going to move on. Speaker 200:26:38I just wanted to say, yes, the balance sheet, you're not going to see a change in the balance sheet because the parts the fast moving parts are small. They're sensors and valves and seal kits and things that can down a machine and really spoil a workday for a customer. So we've put those things in stock and we're working closely with our dealers to make certain that they've got the right products, the right parts support in play to support their markets. So, it's part of elevating excellence. It's a change from what we've done in the past. Speaker 200:27:19And we feel like it's going to serve the market well and will give us a longer standing in with market share. Speaker 400:27:29Okay. And then my last question, and this is probably more for Joe because I don't want to leave him out of all the fun. But I didn't notice this with the Q1, but I did notice it with this is in your reconciliation tables on the last page of your press release, when you reconcile to your adjusted EBITDA, the interest expense line item on those tables differs from what's in the income statement. And it did that in this quarter, and it actually did it in the Q1. And honestly, I didn't notice it in the Q1. Speaker 400:28:03So it's just a little nitpick as to because in the historical data for last fiscal year, it was the same. So what's changed that makes that happen? Why are there why is there a disconnect between the income statement and the reconciliation tables? Speaker 300:28:17Interesting. Speaker 400:28:18As I forget, no weeds. Speaker 300:28:20No, that's fine. Its interest income is the difference. So in the past, we had netted the interest income against the interest expense prior year. This year, we have it split out separate. But for purposes of the reconciliation table, we net them. Speaker 300:28:36Okay. So I just, yes, I look, it's like why doesn't this foot? Speaker 400:28:39And then I went historically and I realized that something had changed and I'd missed it. So that is it for me. Thank you very much for the time. I'll talk to you guys later. Speaker 200:28:46Thank you, Tim. Thanks, Doug. Operator00:28:49Thank you. There are no further questions at this time. I am now handing the conference over to Michael Coffey. Speaker 200:28:59Thank you, operator. And I just want to take a moment to thank our investors for their work with us, their faith in what we're doing and their interest in our business means a lot to us. And I'd also be remiss if I didn't recognize the employees and professionals at Manitex that are working so hard this year and last to deliver on these results. We have a fantastic team and we're very excited about where we're going. If we don't connect with you in this quarter, we want to wish everyone well and we look forward to connecting with you soon. Speaker 200:29:34And let me thank everyone for your interest in Manitex and your time in the call. This concludes our call today. Operator00:29:42Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallManitex International Q2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Manitex International Earnings HeadlinesManitex International (NASDAQ:MNTX) Stock, Guidance And ForecastJanuary 8, 2025 | benzinga.comBGL Announces Manitex International Completes the Closing of its Acquisition by Tadano Ltd.January 7, 2025 | prnewswire.comTrump’s Secret Social Security Plan?In less than a decade, Social Security could be out of money. But a surprising plan from Trump’s inner circle may not just save the system — it could unlock a major opportunity for savvy investors. Financial insider Jim Rickards calls it “Social Prosperity,” and says those who act now could see the biggest gains.April 26, 2025 | Paradigm Press (Ad)Manitex International Announces Closing of its Acquisition by Tadano Ltd.January 2, 2025 | businesswire.comManitex International Announces Results of Special Meeting of ShareholdersDecember 20, 2024 | businesswire.comSHAREHOLDER INVESTIGATION: Halper Sadeh LLC Investigates NAPA and MNTX on Behalf of ShareholdersDecember 6, 2024 | prnewswire.comSee More Manitex International Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Manitex International? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Manitex International and other key companies, straight to your email. Email Address About Manitex InternationalManitex International (NASDAQ:MNTX) provides engineered lifting solutions in the United States, Italy, Canada, Chile, France, and internationally. The company designs, manufactures, and distributes products that are used in various industries. It also offers boom trucks, truck cranes, and sign cranes products primarily for use in industrial projects, energy exploration, and infrastructure development comprising roads, bridges, and commercial construction; and truck-mounted aerial platforms. In addition, the company manufactures and sells rough terrain cranes and material handling products; and truck mounted hydraulic knuckle boom cranes; and rents light and heavy-duty commercial construction equipments. It also sells its products through dealers and rental distribution channel. The company was formerly known as Veri-Tek International, Corp. and changed its name to Manitex International, Inc. in May 2008. Manitex International, Inc. was founded in 1993 and is headquartered in Bridgeview, Illinois.View Manitex International ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Markets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 5 speakers on the call. Operator00:00:00Good morning, ladies and gentlemen, and welcome to the Manitex International Second Quarter 2024 Results Conference Call. Answer session. This call is being recorded on Wednesday, August 7, 2024. I would now like to turn the conference over to Paul Bartoli, Investor Relations. Please go ahead. Speaker 100:00:36Thank you. Good morning, everyone, and welcome to Manitex International's Q2 2024 results conference call. Leading the call today are CEO, Michael Coffey and CFO, Joseph Doolin. We issued a press release earlier today detailing our Q2 2024 operational and financial results. This release together with the accompanying presentation materials are publicly available in the Investor Relations section of our corporate website at www.manitexinternational.com. Speaker 100:01:09I would like to remind you that management's commentary and responses to questions on today's conference call may include forward looking statements, which by their nature are uncertain and outside of the company's control. Although these forward looking statements are based on management's current expectations and beliefs, actual results could differ materially. For a discussion of some of the factors that could cause results to differ, please refer to the Risk Factors section of our latest filings with the SEC. Additionally, please note that you can find reconciliations of historical non GAAP financial measures in the press release issued earlier today and in the appendix of this presentation. Today's call will begin with prepared remarks from CEO, Michael Coffey, who will provide a review of our recent business performance, including an update on the progress we have made on our new Elevating Excellence initiative, followed by a financial update from our CFO, Joseph Doolin. Speaker 100:02:02At the conclusion of these prepared remarks, we will open the line for your questions. With that, I'll turn the call over to Mike. Speaker 200:02:11Thank you, Paul, and good morning to everyone joining us on the call today. During the Q2, we continued to make important progress on our elevating excellence strategy. And as a result, we produced further margin expansion, generated strong adjusted EBITDA growth and further reduced our net leverage. Our 2nd quarter performance was highlighted by growth in the rental operations, gained momentum in our cost reduction initiatives and ongoing process improvements. This resulted in nearly 20% year over year growth in adjusted EBITDA. Speaker 200:02:52Our 2nd quarter adjusted EBITDA grew 137 basis points to 10.6 percent of revenues. This was our 4th consecutive quarter with an adjusted EBITDA margin of greater than 10%, generating adjusted EBITDA of roughly $33,000,000 on a trailing 12 month basis. This level of performance, which has come despite some mixed end market trends, is a direct result of our successful execution of our strategy, elevating excellence. The business is performing at higher levels, and we have confidence that we can build on a track record of consistent performance. With that, please turn your attention to Page 3 of our presentation, where we will begin with a discussion of our 2nd quarter performance. Speaker 200:03:49Our 2nd quarter lifting equipment revenue increased 2%, driven by growth from our North American operations. We made further progress in improving our manufacturing velocity, which also benefited the results. Order intake has slowed in the year, likely due to increased interest rates. Higher interest rates are slowing machine replacement cycles. They are also lowering the overall stocking levels maintained by our dealers. Speaker 200:04:23We are not seeing fundamental weakness in construction outlooks, however. To the contrary, public work spending is increasing as our other key end market drivers affecting Manitex. Some customers have made requests to push out delivery schedules for the aforementioned reasons. We are commenting these customers where possible with scheduling requests. While high interest rates are forcing dealers to delay replacing stock due to carrying cost, We remain confident in the long term drivers in our key markets. Speaker 200:05:02So we believe this is likely a short term issue. However, until we get some more clarity on macroeconomic outlooks, the timing of rate cuts and the U. S. Election, we think customers will remain cautious in the near term. This is reflected in our orders during the quarter and our ending backlog levels. Speaker 200:05:27That said, we remain focused on our growth initiatives and are aggressively moving forward with our strategy to increase our market share, expand our dealer network and drive product innovation. We continue to make good progress on our dealer expansion strategy, which is an important aspect in our goal to increase the distribution of our PM Group products in North America. We are working with identified potential partners and remain on schedule. This is a significant interest there is a significant interest in demand from our dealer community and our portfolio of articulated lifting solutions in North America. And we look forward to updating you on our progress later this year. Speaker 200:06:19We had a strong quarter in our Rental segment, with revenues increasing 15% in the 2nd quarter. The increase is owing to both geographic and fleet expansions. Demand trends in our North Texas markets remain robust, and we are benefiting from our increased investment in our rental fleet. Our location in Lubbock also continues to perform well, and we are very pleased with the progress at this newest location. 2nd quarter gross margins were up 220 basis points from the same period last year, driven by increased manufacturing throughput, lower material costs and increased contributions from our rental segment. Speaker 200:07:10We continue to be encouraged by our progress on our supply and sourcing initiatives. Supply chain pressures have been a constant headwind for both Manitex and the industry. We are pleased to finally be seeing some benefits from the lower material cost flow through our results. As we discussed, last year we reorganized our global supply chain structure and the new initiatives and our team's hard work are producing positive results. And keeping with this, we added new suppliers designed to improve collaboration and lower our cost. Speaker 200:07:55We look forward to furthering these efficiencies and improving our supply chain going forward. These operational improvements enabled us to generate 2nd quarter adjusted EBITDA of 8,100,000 dollars an increase of nearly 20% from the same period last year. We are very proud of this progress and our trailing 12 month EBITDA is up roughly 25% from the prior 12 year period. Another important component of our strategy, elevating excellence, has been a focus on disciplined financial management and capital allocation. We reduced our net debt by over $2,000,000 during the quarter, further driving down our net leverage ratio 2.5 times at the end of the quarter. Speaker 200:08:53Our progress on our capital discipline in recent quarters has been somewhat masked by industry wide supply chain challenges. So we are happy to see the reduction of net debt in the quarter and we expect to further reduce our working capital levels positioning us for a strong year of cash flow conversion and allowing us to drive further reduction in net debt as the year progresses. Elevating excellence, our 3 year strategy has delivered improved results and the business is performing at record levels. Despite interest rate headwinds, our core end markets are strong and customer relationships are improving. While the current macroeconomic trends remain uncertain, we are committed to executing on what is within our control. Speaker 200:09:45These controllables include improving our processes, cost of production improvements and new dealer partnership channels in North America. It is this disciplined focus on our strategic priorities that has enabled us to deliver strong adjusted EBITDA growth and margin expansion during 2024, despite the slowing in order trends we are experiencing in recent quarters. As a result of the order trends, we are lowering our full year 2024 revenue guidance to a range of $290,000,000 to $300,000,000 However, we continue to expect our 2024 adjusted EBITDA to be in a range of $30,000,000 to 34,000,000 dollars demonstrating our strong execution against operational priorities. With that, I'd like to turn the call over to Joe. Speaker 300:10:46Thank you, Mike, and good morning, everyone. I will provide some additional details on the quarter and give an update on our liquidity and balance sheet. Turning to Slide 9. Net revenue for the 2nd quarter was $76,200,000 or an increase of 3.7 percent compared to the same period last year. The growth during the quarter was driven by further improvements velocity in our equipment business and strong growth in our rental operations. Speaker 300:11:16The Lifting Equipment segment revenue was $67,900,000 during the Q2, an increase of 2.4% versus the prior year period, with growth driven by the North American truck crane sales. Rental equipment segment revenue was $8,400,000 in the 2nd quarter, an increase of 15% from the prior year period. The growth was driven by continued favorable demand trends in our North Texas markets and our investment in fleet growth. As we discussed last quarter, based on favorable market trends in our key markets, we have made the decision to pull forward much of our expected capital spending on fleet expansion into the early part of 2024 and this was an important contributor to our growth during the quarter. As of June 30, total backlog was $116,000,000 down from $154,000,000 at the end of Q1. Speaker 300:12:12Our backlog ended the quarter with North America representing approximately 50% of the total with international the remaining 50%. Gross profit was $17,200,000 during the Q2 of 2024, up from $14,900,000 during the prior year period or an increase of 15%. The increase in gross profit was driven by increased manufacturing throughput, lower material costs driven by supply chain initiatives and increased contribution from the rental segment. As a result of these factors, gross profit margin increased 220 basis points to 22.5% in the quarter. SG and A expense for the quarter was $11,100,000 up modestly from $10,800,000 in the same period last year. Speaker 300:13:05R and D expense was $900,000 during the quarter, also up very modestly from the prior year period. We've been able to hold our operating expense levels basically flat in recent quarters despite the revenue growth and investments that we are making in the business and we expect this trend to continue moving forward driving continued margin benefits. Operating income was $5,100,000 during the quarter, up from $3,300,000 for the same period last year. 2nd quarter operating margin was 6.7%, up over 200 basis points from last year. The year over year improvement in operating income and operating margin was driven by the improved gross margin performance and operating leverage. Speaker 300:13:53Adjusted EBITDA was $8,100,000 for the 2nd quarter or 10.6 percent of sales, up from $6,800,000 or 9.3 percent of sales for the same period last year for an increase of 19%. Net income was $1,500,000 or $0.07 per diluted share for the 2nd quarter compared to net income of $400,000 or $0.02 per share for the same period last year. Adjusted net income was $2,200,000 or $0.11 per diluted share in the 2nd quarter, up from adjusted net income of $1,700,000 or $0.08 per share for the same period last year. Adjusted net income for the 2nd quarter excludes $700,000 of stock compensation and other non recurring expenses. Now turning to our balance sheet on Slide 10. Speaker 300:14:48As of June 30, net debt was $83,900,000 which is down over $2,000,000 from the end of the first quarter despite the pull forward of some capital spending as a result of our cash flow benefited from solid operating results. As a result, net leverage improved to 2.5 times at the end of the second quarter compared to 2.9 times at the end of the Q4 of 2023. We continue to expect our working capital usage to further normalize in the coming quarters, which could result in a reduction in inventory levels, leading to improved free cash flow conversion and even further reduced leverage levels by the end of the year. As of June 30, total cash and available liquidity was approximately 33,000,000 dollars That completes our prepared remarks. Operator, we are now ready for the question and answer portion of our call. Operator00:15:44Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from Ted Jackson from Northland Security. Ted? Speaker 400:16:42Sorry about that. Sorry about that. I was on mute, but I unmuted. So again, good morning and congrats on the quarter to the 2 of you. Speaker 200:16:49Thanks, Seth. Speaker 400:16:50You can hear me now. Good morning. Yes, we can hear you fine. Good morning. Speaker 200:16:55Okay. All right. Speaker 400:16:56So I got a handful of questions for you. Let's start with the lift truck business. I mean, talking about weakness in bookings, you're going through the backlog. When you look into that business and the challenges that you're seeing, can you give some color with regards to it from a geographic standpoint? I mean, is it U. Speaker 400:17:15S? Is there some European component in it? And then also from like a market vertical, if you would, like some of the, call it, your peers have talked about some hesitancy within the utility section in the U. S, for example. That'd be my first question. Speaker 200:17:31Sure, sure. Ted, good morning and appreciate the questions. There's some areas of geographic concern or maybe lack of geographic concern. For example, mining the areas that are exposed to mining and minerals are completely unaffected. They're just moving forward with a lot of strength. Speaker 200:17:56And we had some early on hesitancy in some European markets as customers were waiting for some tax guidance, capital investment tax guidance that came out in our favor. And so these are anecdotal requests for the most part or anecdotal points of information. I'd say the most of the concern this year is in North America and it's an election year. I think that is often a catchall. But unequivocally, the overwhelming theme that we're hearing from our customers is concerned with regard to infrastructure and it's stalled or slowed normalized equipment replacement, where used machines, let's say, you have a crane operator, this is theoretical, but if you have a crane operator that has 10 to 12 assets in their fleet and 7 or 8 of them are ready to replace, they're just they're holding on to those longer to see what happens with interest rates. Speaker 200:19:04And dealers are being more careful in replacing fleet during this process primarily because of carrying costs. And that seems to translate in just about any market where we have dealer inventory. As far as end markets in particular, I'm aware of some of those comments in the utility range. I think most of that centers around excessive bucket truck inventory, which we really are not participating in. We're not seeing any signals of hesitancy with utility construction for our products and or the pending demand due to public works projects. Speaker 200:19:56To the contrary, I think there's a lot of construction work to be done, just on hesitancy with regard to carrying costs and interest and things that are, I suppose, out of everyone's control. Speaker 400:20:18Okay. Question number 2, going over to the rental side of the house. Listening to, I mean, for instance, Caterpillar and also some of the other larger rental shops, There's a general commentary with regards to, let's call it, a softening with regards to rates And it sounds like you're not seeing that. Or is that any concern to you? And is it just because you happen to be in North Texas that that's the reason? Speaker 400:20:51I mean, just maybe more color around why you're seeing strength where other people are actually starting to talk a little bit more about kind of weakness within that area? Speaker 200:21:00Well, yes. So our we are no one is completely insulated to any of this. We have not experienced any downturn to the contrary. The markets that we're in, in North Texas are strong. They're smaller, but we are playing in a position of strength in markets that are growing and have a lot of activity. Speaker 200:21:23And so that favors us. And frankly, we bought a really capable and exceptional company in that space. Rayburn Reynolds has been fantastic. So we're keeping our finger to the pulse of what's happening with our customers. We've had a couple of customers run into a few problems and we've been able to avoid some of the associated downfalls with regard to that. Speaker 200:21:53But overall, these little markets are performing really, really well And we couldn't be happier for the expansion that we had in Lubbock. I mean, it's we're just over a year in that new location. The team is performing well. The market is performing well. Joe mentioned before that we pulled forward some capital investments to get ahead of that curve. Speaker 200:22:22And that fleet is very well utilized. And it's showing in the numbers. So there's always going to be problems in any economic downturns that these areas are just less impacted. They're more insulated from those types of downturns. Speaker 400:22:413rd question, I have one more after this is moving over to the U. S. Market in the effort to bring your knuckle products from Italy here. It sounds like you're still on track to have an announcement with regards to some distribution partners there. In the past, you've signaled that it would be a couple, maybe as many as 3. Speaker 400:23:04So my first question towards this is, is that still kind of stand that we could see a couple of distribution partners in that area? And then secondly, as a follow-up into that, given that these trucks are really coming out of Italy and being imported, at least for the time being, how are you going to handle the ability to support those distributors in terms of parts and service, mainly within parts? I mean, are you going to need to bring some inventory level of spare parts from Italy into the U. S. And put that on your balance sheet to ensure you're providing the support level that your dealers will need? Speaker 400:23:44I mean, kind of a little color around that and then have one more afterwards. Speaker 200:23:49Yes. I really like the questions. So we're speaking in a bit of cryptic terms and not naming names because we're in active discussions with new dealers and it's a competitive market. So we don't want to signal what we're doing to our competitors. We are in active discussions with 5 North American dealers and some of them have placed preliminary orders to getting familiar with the products. Speaker 200:24:21We're pretty excited about the individuals that we're talking with. We're very excited about the markets that they're serving. And the way that we've gone about this for years and the way that we're going about it now is, we're engaging with them. They're ordering a handful of products. They're testing the markets. Speaker 200:24:41We're doing price and customer feedback testing. And it will crescendo with an announcement that will be a partnership announcement between these dealers and us. So our expectation, Ted, is that we're expecting to have 2 or 3 appointments this year, and that's why we're talking to 5. We're actually talking to many more than that, but there are 5 that are on our high target list, if I can use that phrase. Regarding the support of the product, the question is really insightful. Speaker 200:25:21Our whole strategy in North America was to build an organization structure that essentially could act like a manufacturer support arm in North America. And that's been built. We put that structure in Georgetown. We have a team of product support, product managers, engineering. Even though that we're not manufacturing the crane in the U. Speaker 200:25:46S, we're supporting the crane from the U. S. And that's by design. And with that has come high moving parts stock that needed to be put in place in North America and that's also done. We actually brought critical parts to the U. Speaker 200:26:04S. To support the products that we're marketing in the United States. And we just we want to make certain that these products are really well supported. The customer is getting strong technicals. And if there is a part failure or damage that we can get them back online and running quickly. Speaker 400:26:29That's actually really encouraging news. Okay, my last Speaker 200:26:33The good go ahead, Ed. Go ahead. Speaker 400:26:35No, no, no, no. Keep going. I'm going to move on. Speaker 200:26:38I just wanted to say, yes, the balance sheet, you're not going to see a change in the balance sheet because the parts the fast moving parts are small. They're sensors and valves and seal kits and things that can down a machine and really spoil a workday for a customer. So we've put those things in stock and we're working closely with our dealers to make certain that they've got the right products, the right parts support in play to support their markets. So, it's part of elevating excellence. It's a change from what we've done in the past. Speaker 200:27:19And we feel like it's going to serve the market well and will give us a longer standing in with market share. Speaker 400:27:29Okay. And then my last question, and this is probably more for Joe because I don't want to leave him out of all the fun. But I didn't notice this with the Q1, but I did notice it with this is in your reconciliation tables on the last page of your press release, when you reconcile to your adjusted EBITDA, the interest expense line item on those tables differs from what's in the income statement. And it did that in this quarter, and it actually did it in the Q1. And honestly, I didn't notice it in the Q1. Speaker 400:28:03So it's just a little nitpick as to because in the historical data for last fiscal year, it was the same. So what's changed that makes that happen? Why are there why is there a disconnect between the income statement and the reconciliation tables? Speaker 300:28:17Interesting. Speaker 400:28:18As I forget, no weeds. Speaker 300:28:20No, that's fine. Its interest income is the difference. So in the past, we had netted the interest income against the interest expense prior year. This year, we have it split out separate. But for purposes of the reconciliation table, we net them. Speaker 300:28:36Okay. So I just, yes, I look, it's like why doesn't this foot? Speaker 400:28:39And then I went historically and I realized that something had changed and I'd missed it. So that is it for me. Thank you very much for the time. I'll talk to you guys later. Speaker 200:28:46Thank you, Tim. Thanks, Doug. Operator00:28:49Thank you. There are no further questions at this time. I am now handing the conference over to Michael Coffey. Speaker 200:28:59Thank you, operator. And I just want to take a moment to thank our investors for their work with us, their faith in what we're doing and their interest in our business means a lot to us. And I'd also be remiss if I didn't recognize the employees and professionals at Manitex that are working so hard this year and last to deliver on these results. We have a fantastic team and we're very excited about where we're going. If we don't connect with you in this quarter, we want to wish everyone well and we look forward to connecting with you soon. Speaker 200:29:34And let me thank everyone for your interest in Manitex and your time in the call. This concludes our call today. Operator00:29:42Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.Read morePowered by