Manitex CEO Steve Filipov said the company is preparing for lower demand, exacerbated by the Covid-19 pandemic, which may persist throughout the year, particularly in the Manitex boom truck side of the business.
Manitex International’s second quarter 2020 results were negatively impacted by the global Covid-19 pandemic. Net revenues from continuing operations for the second quarter were $37.1 million, compared to $57.4 million in the prior year’s period, and net loss from continuing operations was $(2.4) million, or $(0.12) per share, compared to net income of $3.3 million or $0.17 per share, in the second quarter of 2019. Adjusted net loss from continuing operations in the second quarter 2020 was $(1.7) million, or $(0.08) per share, compared to adjusted net income of $1.2 million, or $0.06 per share, for the second quarter of 2019.
Net revenues of $37.1 million, declined 35.3 percent compared to the same quarter in 2019. The company generated $4.6 million in cash in the quarter from operations and achieved $1.2 million cost savings in SG&A in the second quarter compared to the prior year. The company said this was driven by cost reduction initiatives. Manitex reported net debt of $34.4 million, a reduction of $7.6 million and available liquidity through cash and credit lines of approximately $46 million as of June 30, 2020.
On July 20, 2020, Manitex announced that it had paid down approximately $5.5 million in European bank debt at a 15 percent discount to its face value. The company has also initiated a restructuring plan for North American operations that is estimated to generate $5.4 million in annualized cost savings.
“Performance for the second quarter was negatively impacted by lower production and increasing uncertainty, as a result of the continuing pandemic, of the future demand picture in certain geographic markets,” said Manitex CEO Steve Filipov. ”COVID-19 forced closures at PM and also impacted our dealers and customers, globally. Notwithstanding this disruption in the marketplace, we have seen consistent improvement in our results in international markets for articulating knuckle boom cranes and truck-mounted aerials, particularly in Western Europe and Asia where we are pleased to be establishing PM, PM-Tadano, as developing brands in the global marketplace that we estimate at over $2.3 billion annually. Sales and orders at PM, combined with declines at Manitex straight-mast cranes, have resulted in a higher backlog composition of PM over Manitex for the first time ever, a trend that we anticipate to continue, consistent with our strategy to focus our resources there and grow the business to a much higher level over time.”
Filipov said that the second quarter loss reflects the temporary economics of a global pandemic, and that the company still generated $4.6 million in cash from operations. The company is taking aggressive steps to reduce costs and improve its balance sheet.
“Going forward, our focus will be on right-sizing our business to meet market demand, margin preservation, and generating cash from operations,” he said. ”To that end, we implemented headcount reductions and restricted production schedules in North America during the first half of 2020, and we continued this process further in the third quarter. We expect to generate an additional annualized savings of approximately $5.4 million from these actions. We are preparing for lower demand, exacerbated by the Covid-19 pandemic, which may persist throughout the year, particularly in the Manitex straight-mast crane side of the business. We anticipate continued modest growth at PM, and hope to close out the year with Covid-19 behind us, with PM on pace to reach sales levels not seen since the last uptick in global equipment sales, continued joint sales with our partner, Tadano, and a stabilization of demand in North American crane markets.”
Keeping its employees safe during the pandemic is of chief concern, Filipov said.
“We continue to implement safety protocols globally to protect our employees and their families during the current COVID-19 pandemic, including increased frequency of cleaning and disinfecting, social distancing practices, and other measures consistent with specific regulatory requirements.”