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Manitex International, Inc. (MNTX-NASDAQ) |
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April 10, 2009 Issue |
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The Most Powerful Name In Corporate News and Information |
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Given The Current Economic Times, Manitex International Is Focused On Managing Their Operations In Line With The Current Level Of Demand And Maintaining Good Working Capital |
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Manitex International, Inc. is a
leading provider of engineered lifting solutions including cranes, rough
terrain forklifts, indoor electric forklifts and special mission oriented
vehicles, including parts support. Our Manitex subsidiary manufactures and
markets a comprehensive line of boom trucks and sign cranes through a
national and international dealership network. Our boom trucks and crane
products are primarily used in industrial projects, energy exploration and
infrastructure development, including roads, bridges, and commercial
construction. Our Crane and Machinery division is a Chicago based
distributor of cranes including Terex truck and rough terrain cranes, Fuchs
material handlers and our own Manitex product line. Crane and Machinery
provides after market service in its local market as well as being a leading
distributor of OEM crane parts, supplying parts to customers throughout the
United States and internationally. Our Manitex Liftking subsidiary is a
provider of material handling equipment including the Noble straight-mast
rough terrain forklift product line, Lowry high capacity cushion tired
forklift and Schaeff electric indoor forklifts as well as specialized
carriers, heavy material handling transporters and steel mill equipment.
Manitex Liftking's rough terrain forklifts are used in both commercial and
military applications. |
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Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published – April 10, 2009
Mr. Rooke: “In the current environment, the focus for the business is to ensure that we are managing our operations in line with the current level of demand. That has increased the level of activity focused on working capital management particularly inventory, and obviously cash. Those things are absolutely critical as we go through these very unusual and stressful economic times. We have been working very hard particularly in the 4th Quarter of 2008 and into the 1st Quarter of this year to manage our working capital, and making some good strides in that direction. At the same time, we have to continue to develop the business in the best way that we can in the environment. That means that we continue to work on supporting our customers, making sure that we deliver them product that is high quality, and that will meet their demands in the market place. It also means that we continue to drive our overall performance and improve in terms of efficiency, output, quality, safety, all those key metrics that we monitor within the business.”
CEOCFO: Please tell us a little about what you do at Manitex? Mr. Rooke: “We are manufacturers of engineered lifting equipment and operate in the capital equipment industry in North America particularly, and recently more so into various parts of the world, such as the Middle East, Russia and South America. Our operations are focused around three major activities, one of which is our boom trucks and sign crane operation, which is based in Georgetown, Texas. There we manufacture and assemble what is called a boom truck crane, which is a crane on a commercial chasses, and we have a whole range of those from 17 ton, up to the highest capacity boom truck crane available in the market, which is a 50 ton crane. We have operations in Toronto, Canada; there we have a full range of rough terrain forklifts, which operate under the Noble and Lifting brands. Also at that facility we manufacture and have a strong presence in military forklifts, which are much bigger and have different requirements from our commercial vehicles, as well as special carriers such as shipyard transporters. Then in our Chicago operations, where our head office is based, we have a distribution and parts business, Crane & Machinery which distributes not only Manitex’s cranes, but also Terex Cranes and Fuchs material handling equipment.”
CEOCFO: What is the competitive landscape for your industry? Mr. Rooke: “Capital equipment is a very competitive market with both domestic and international competitors, some of whom are significant global companies, and lifting equipment is no exception, so we aim to operate with all of our lifting businesses in niche markets. Boom truck cranes are a niche market of approximately $250 to $300 million within the whole crane market, but the upper-end of our boom truck cranes, the 50 ton, cross over into what is called the truck crane market, which is an even larger market. The Manitex top end, highest capacity boom truck, has very similar and sometimes better lifting capacity than the truck cranes, but at a lower price. So we are able to offer a competitive initial investment for people that choose to go that route and also a lower ongoing operating cost. By our estimate, we are number two in the boom truck market. With our Material Handling operations, we operate in the niche, straight-mast rough terrain forklift market and the niche, pretty much-bespoke transporter and carrier market, all with very specific applications. So in this highly competitive, increasingly global market, these are the types of place we try to place ourselves, so that we can compete effectively and provide products to support our customers and the returns our shareholders require.”
CEOCFO: Are there new technologies or concepts in the crane industry? Mr. Rooke: “We would say that we are one of the most innovative members of boom truck crane segment. We have consistently driven the lifting capacity of boom truck cranes, together with the drive for higher reach for the boom. At the same time, the industry is continuing to develop its product and operations so although the crane has been around for many years there continue to be opportunities for further enhancements and developments. One example is the way lessons from other industries can be applied, like the automotive industry with its supply chain development and those type of activities. Although the industry is some way behind in this regard, it has begun and businesses are making progress in the area of working capital management, quality systems, lean manufacturing, those type of internal activities that lead towards a proven performance.”
CEOCFO: Do you have stock product, or are they built to order? Mr. Rooke: “Our route to market is through dealers, who stock our product. So we manufacture and sell to the dealers.”
CEOCFO: Please tell us about the international aspect of Manitex. Mr. Rooke: “That is very exciting piece of Manitex International. Historically, the business has been pretty much solely focused on the North American market. In the last eighteen months or so, we put a great deal of effort into expanding into international markets. We focused on markets where we considered would be good opportunity and where we could make significant inroads right away. We started with Russia, where we were the only crane manufacturer to have a US manufactured crane at the Russian Con Expo in September last year (2008). That 50-ton crane is very applicable to a lot of the oil and gas exploration that takes place in the Russian market. Obviously, in recent economic times things have slowed down a bit there, but the fact that we have started, have our product and a dealer in that very large market is really important for us. In the same way with the Middle East, we have been making inroads into that market and establishing dealer relationships to make sure that we can sell our product, which again, is very appropriate to the type of activity, whether it is infrastructure or oil and gas exploration that is taking place in those markets. The pace of our international activities was also strengthened by one of the acquisitions that we made in October of last year. The Crane and Machinery distribution business that we acquired has a history of selling internationally and we have started to incorporate those skill sets into the whole of the organization, to increase our capability and our focus on those markets. So we see international as being a very exciting growth opportunity for us, reducing our dependence on the North American market and expanding our addressable market.”
CEOCFO: Will you continue to be active with acquisitions? Mr. Rooke: “We are always looking for acquisitions. Our intention has always been to grow the business both organically and through acquisition. The fact that the economic environment is in a stressful state, does not necessarily mean that there are not any opportunities, so we are actively pursuing the right acquisition for us. We have objectives in terms of those acquisitions, making sure it fits into our strategic direction, into our portfolio, and meet certain financial criteria for us as well. Certainly there are opportunities and we continue to explore those and hope to convert some in the near future.”
CEOCFO: Is
parts and service an important part of your business?
CEOCFO: What is the financial picture like for Manitex? Mr. Rooke: “We just announced our financial results for 2008, which showed 2008 revenues of $106 million that were flat with the previous year and net income from continuing operations of $1.8 million, or $0.17 per diluted share. This net income saw some decline from 2007, principally driven by the extraordinary increase in material costs in 2008. From a credit perspective, we increased and extended our credit facilities during 2008 and finished the year with $7 million of availability in our lines of credit. As we move into this year, clearly, the environment is very much different; our backlog is down, but we continue to manage our overall level of activity to the demand that is out there in the marketplace. As I said at the start, our focus is very much on cash and working-capital management, and also on trying to maintain profitability through these very difficult times.”
CEOCFO: Why should potential investors put Manitex on the radar screen?
Mr. Rooke:
“We do not consider that our stock price today is representative of the
value that is within the company driven by many of the things we have
discussed in this interview. The fundamental core business that we have here
is very exciting. It is great franchise with great opportunities, so the
inherent value is very strong.” |
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“Historically, the business has been pretty much solely focused on the North American market. In the last eighteen months or so, we put a great deal of effort into expanding into international markets. We focused on markets where we considered would be good opportunity and where we could make significant inroads right away. We started with Russia, where we were the only crane manufacturer to have a US manufactured crane at the Russian Con Expo in September last year (2008). That 50-ton crane is very applicable to a lot of the oil and gas exploration that takes place in the Russian market.” - Andrew M. Rooke |
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