Manitex Shares Fall on Earnings & Revs Miss - Analyst Blog
Manitex International, Inc.
) have dropped 9% since reporting third-quarter 2013 earnings
results on Nov 7; wherein it reported flat year on year earnings
per share of 21 cents, falling a penny short of the Zacks
Consensus Estimate. Top-line year-on-year growth of 8% was
narrower than the 19% rise to record revenues in the second
quarter of 2013.
Net revenue rose 8% year over year to $57 million. However, revenues fell short of the Zacks Consensus Estimate of $63 million. The year-over-year growth was led by an increase in revenues from boom truck cranes and equipment distribution and a $2.1 million contribution from the newly acquired Sabre. However, these benefits were partially offset by lower revenues from material handling equipment.
Gross profit improved 4% to $11.2 million from $10.8 million in the prior-year quarter. However, gross margin contracted 80 basis points to 19.5% due to diverse sales mix including an increase in chassis sales that are sold for a nominal margin.
Selling, general and administrative expenses increased 2% year over year to $5.9 million. Operating income was $4.6 million compared with $4.5 million in the prior-year quarter. Operating margin contracted 30 bps year over year to 8.1%.
As of Sep 30, 2013 Manitex had cash and cash equivalents of $3.1 million, up from $1.9 million as of Dec 31, 2012. Total debt increased to $51.5 million as of Sep 30, 2013 from $49 million as of Dec 31, 2012. Debt-to-capitalization ratio was at 38% compared with 45% as of Dec 31, 2012.
Cash flow used in operating activities for the first nine months of 2013 was $1.1 million compared with $4 million in the same period of the prior-year. Total backlog as of Sep 30, 2013 was $96.7 million, flat compared with Jun 30, 2013 and down from $130.3 million as of Dec 31, 2012.
Subsequent to the end of the quarter, Manitex entered into an agreement to acquire Italy-based Valla SpA. Valla is a manufacturer of comprehensive line of precision pick and carry cranes with lifting capacities from 2.5 ton to 90 ton. The acquisition is not expected to contribute materially to Manitex's results immediately. The acquisition will complement Manitex's niche crane offerings and extend its product portfolio and increase its market share.
Manitex expects fourth quarter sales to be higher compared with the third quarter. The increase is expected to be driven by the Sabre acquisition, production of higher tonnage cranes, as well as other specialized equipment.
The recent softness in the energy sector continues, which is evident by a reduction in the North American rig count. However, Manitex believes this softening has bottomed out and the sector will be a growth driver in both the short and long term. The company remains optimistic about the introduction of new products, allowing revenues to grow in the near term. For 2013, the company is projecting a 20% increase in revenues.
The company expects to generate 50% of its sales from the energy area and the balance from general commercial markets. Manitex remains committed to introduce ground breaking products with the introduction of the Manitex TC 70 crane, which will provide significant sales upside.
In addition, Sabre acquisition will be a good fit for the company as it will provide further diversification of product line and end markets and lead to an above-average upside. The buyout also brings in various growth opportunities in the existing sales distribution network of Manitex.
Bridgeview, Ill-based Manitex International is a leading provider of engineered lifting solutions including boom truck and rough terrain cranes, rough terrain forklifts, special mission oriented vehicles, container handling equipment and specialized engineered trailers.
Manitex currently retains a Zacks Rank #3 (Hold). Other stocks in the same industry with favorable Zacks ranks are Xylem Inc. ( XYL ), with a Zacks Rank #1 (Strong Buy), while DXP Enterprises, Inc . ( DXPE ) and Graham Corp. ( GHM ) carry a Zacks Rank #2 (Buy).
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