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MI

Manitex International, Inc. (MNTX)·Q4 2023 Earnings Summary

Executive Summary

  • Q4 2023 capped a record year: revenue was $78.7M, gross margin expanded 162 bps to 20.9%, and adjusted EBITDA held at 10.2% despite steel cost headwinds; GAAP EPS of $0.26 benefited from a tax valuation allowance reversal, while adjusted EPS was $0.31 .
  • Backlog normalized as throughput improved and mix shifted to higher-value products; year-end backlog was $170.3M (~9 months of Lifting Equipment sales), down from $196.9M in Q3 and $223.2M in Q2 .
  • 2024 guidance introduced: revenue $300–$310M and adjusted EBITDA $30–$34M (10.5% margin at midpoint), supported by manufacturing velocity, dealer expansion (PM cranes in NA), and surcharges/price increases to offset steel .
  • Management’s Elevating Excellence execution continues to drive structural margin uplift and net leverage reduction to 2.9x (from 3.9x a year ago), with ~$31M liquidity to support organic growth; working capital release is expected to further reduce debt .
  • Stock reaction catalysts: visible 2024 growth/margin framework, backlog quality over quantity, dealer network build-out, and operational efficiencies; tax-related EPS dynamics in Q4 represent a one-time boost rather than recurring earnings power .

What Went Well and What Went Wrong

  • What Went Well

    • Structural margin improvement: gross margin rose to 20.9% (+162 bps YoY) on pricing, mix, and throughput; adjusted EBITDA margin held at 10.2% despite input cost pressure .
    • Operational velocity and backlog quality: throughput gains allowed quicker backlog conversion while prioritizing higher-margin products/geographies; “second-highest quarterly revenue run-rate in five years” per CEO .
    • Strategic positioning for 2024: dealer additions and PM crane penetration in North America, plus new products (high-lift AWP, electric cranes, articulated cranes) are core 2024 priorities .

  • What Went Wrong

    • Materials inflation: U.S. steel price surge created purchase price variance; CFO cited a “couple of million, $3M+” impact for 2023, prompting surcharges/price increases (implemented late 2023) .
    • Backlog decline: backlog fell to $170.3M at year-end (from $196.9M in Q3, $223.2M in Q2), reflecting faster throughput, mix rationalization, and pockets of interest-rate sensitivity in exposed verticals .
    • Reported EPS aided by tax: GAAP EPS of $0.26 benefited from a valuation allowance reversal in Q4; management guides to ~28% tax rate modeling in 2024, tempering EPS carry-through .

Financial Results

MetricQ2 2023Q3 2023Q4 2023YoY Q4 2022
Revenue ($USD Millions)$73.5 $71.3 $78.7 $78.8
GAAP Diluted EPS ($)$0.02 $0.08 $0.26 $0.02
Adjusted EPS ($)$0.08 $0.14 $0.31 $0.09
Gross Margin %20.3% 23.3% 20.9% 19.3%
Operating Margin %4.5% 7.3% 6.1% 5.3%
Adjusted EBITDA ($USD Millions)$6.81 $8.45 $8.02 $8.13
Adjusted EBITDA Margin %9.3% 11.9% 10.2% 10.3%
Backlog ($USD Millions)$223.2 $196.9 $170.3 $230.2 (Dec-22)

Segment Revenue

Segment Revenue ($USD Millions)Q2 2023Q3 2023Q4 2023
Lifting Equipment$66.3 $63.7 $70.8
Rental Equipment$7.3 $7.6 $7.9

KPIs

KPIQ2 2023Q3 2023Q4 2023
Net Debt ($USD Millions)$87.77 $86.40 $85.46
Net Leverage (x)3.3x 2.9x 2.9x
Total Debt ($USD Millions)$95.07 $91.28 $94.94
Cash & Availability ($USD Millions)~$31 ~$29 ~$31

Non-GAAP note: Adjusted net income and adjusted EBITDA exclude items including stock compensation, FX, pension settlement, litigation, and other nonrecurring charges; reconciliations provided in exhibits .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($MM)FY 2023$285–$290 Actual $291.4 Raised at Q3; achieved
Adjusted EBITDA ($MM)FY 2023$28–$30 Actual $29.6 Raised at Q3; achieved
Adjusted EBITDA Margin (%)FY 20239.7%–10.5% 10.1% actual Raised at Q3; achieved
Revenue ($MM)FY 2024—$300–$310 New (initiated)
Adjusted EBITDA ($MM)FY 2024—$30–$34 New (initiated)
Adjusted EBITDA Margin (%)FY 2024—10.5% at mid-point New (initiated)
Tax Rate (modeling)FY 2024~28% (informal)~28% (informal) Maintained modeling
CapEx ($MM)FY 2024—~$10 (majority for Rabern fleet) New disclosure

Earnings Call Themes & Trends

TopicQ2 2023 (Previous Mentions)Q3 2023 (Previous Mentions)Q4 2023 (Current Period)Trend
Supply chain & steelSteel up ~30%, surcharges introduced; Europe easing; U.S. lagging U.S. steel headwind abated somewhat; surcharges helped; throughput improved U.S. steel surge impacted P&L; surcharges/price increases implemented late-2023 to offset Improving with mitigations
Dealer network & PM cranes (NA)Building dealer support; ABM order for ten 50-ton cranes Organizational restructuring for growth; dealers’ inventory tight, high utilization Targeting 2–3 new U.S. dealers; PM penetration in NA emphasized Accelerating
Backlog & mix disciplineBacklog $223M (+4.4% YoY); mix favoring NA end markets Backlog $197M (~9 months), down on throughput/order timing Backlog $170M (~9 months), down on throughput and product rationalization; quality over quantity Normalizing, higher value mix
End markets (infra/energy/mining)Strong NA/EU infra; grid upgrades; mining in SA Continued infra/energy strength; SA mining robust NA infra strength tied to IIJA; grid/transmission needs; Chile record year; optimism in Americas/EU/ME Sustained strength
ERP/process & velocityERP upgrades EU & rental; margin expansion from processes Record units produced; 23.3% GM; structural margin uplift New systems running; capacity/velocity gains without major CapEx Durable
Leverage/working capitalNet leverage 3.3x; WC elevated due to supply chain Net leverage 2.9x; plan to reduce WC Net leverage 2.9x; expect WC release to drive debt reduction Deleveraging
Tax & EPS quality——Q4 EPS aided by valuation allowance release; 2024 modeling ~28% tax One-time in Q4; normalized 2024

Management Commentary

  • “Our fourth quarter results were a solid finish to a record year at Manitex… nearly 40% full year growth in Adjusted EBITDA, and nearly 240 basis point in improvement to Adjusted EBITDA margin… significant reduction in our net leverage profile.” — CEO Michael Coffey .
  • “We have implemented programmatic price increases and commodity surcharges to offset these higher materials costs and expect to realize the benefits… in 2024.” — CEO Michael Coffey (steel mitigation) .
  • “We remain focused on reducing our net leverage… reduced our net leverage ratio nearly a full-turn from 3.9x… to 2.9x… We expect to unlock much of this surplus working capital… which will drive continued debt reduction in 2024.” — CFO Joseph Doolan .
  • “Entering 2024, we will seek to prioritize new product development, together with further expansion of our dealer network, particularly… PM Crane product sales in North America.” — CEO Michael Coffey .
  • “Our fourth quarter performance reflects the second highest quarterly revenue run-rate in the last five years.” — CEO Michael Coffey .

Q&A Highlights

  • Rabern vs core growth: 2024 fleet expansion is partly replacement, but growth emphasis remains on manufactured Lifting products; margin improvement focus continues .
  • Dealer expansion impact: Adding 2–3 new U.S. dealers (PM articulated cranes) is strategic for long-term growth; not necessary for 2024 guide but provides upside .
  • Gross margin dynamics: U.S. steel impact totaled “$3M+” for 2023; surcharges/price increases implemented late 2023 to offset in 2024 .
  • Capital deployment: Organic capacity growth (Europe fabrication feeding NA assembly) prioritized; acquisitive growth considered later; 2024 CapEx roughly $10M (majority to Rabern fleet) .
  • Tax normalization: Expect ~28% tax rate in 2024 modeling; Q4 EPS benefited from valuation allowance release .
  • Backlog outlook: Targeting shorter backlog duration (~6 months) as velocity improves; quality over quantity with selective product focus and surcharges to protect margins .

Estimates Context

  • S&P Global consensus estimates (EPS and revenue) for MNTX were unavailable due to a Capital IQ mapping issue at the time of retrieval, so we cannot assess beats/misses vs Wall Street consensus for Q4 2023, Q3 2023, or Q2 2023. Values would normally be retrieved from S&P Global, but were unavailable in this instance.*

Key Takeaways for Investors

  • Margin durability: Structural improvements (pricing/surcharges, mix, ERP-enabled throughput) support double-digit adjusted EBITDA margins; watch for steel cost offsets filtering through backlog in 1H24 .
  • Quality of backlog: While backlog fell, its value content improved and remains ~9 months of sales—expect steadier conversion and shorter cycles as velocity increases .
  • 2024 setup: Guidance implies modest top-line growth and margin expansion; incremental upside from dealer additions, PM penetration in NA, and new product launches .
  • Cash generation and deleveraging: Working capital normalization is a key 2024 theme; progress would accelerate debt reduction and expand strategic flexibility .
  • EPS normalization: Q4 GAAP EPS benefited from tax; model ~28% tax in 2024 to avoid overstating run-rate earnings power .
  • Segment balance: Lifting remains the core growth driver; Rental trends are healthy with targeted fleet refresh/expansion and favorable Texas markets .
  • Execution watchpoints: Steel costs and U.S. supply chain remain variables; monitor surcharges/price realization, dealer onboarding pace, and backlog mix discipline .