Manitex International, Inc.

Greetings and welcome to Manatex International Inc. first quarter 2022 results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Mike Coffey, Chief Executive Officer. Please go ahead, sir.

Thank you, operator. Good afternoon, ladies and gentlemen, and thank you for your interest in Manatex International. We appreciate you taking the time to join our call. My name is Mike Coffey, and with me today is Joe Doolin, our CFO. Joe will take you through the financial details of the first quarter, which we announced earlier today. Following our prepared remarks, as is our custom, we'll be happy to open the line for questions. Please see our website for the release and other information, including a brief presentation for this call. A telephone replay will be available for seven days, and the slides we cover will be available for a year. Slide two is our safe harbor statement, which reminds you that everything we discussed is subject to change, as is described in our SEC filings. which you can refer to for further details on the many risk factors associated with our company. So, let's get started. On today's call, we will focus on our financial results from the first quarter of 2022, key business highlights, both during the period and activities since, and longer-term trends and opportunities for the business. We would also like to provide some additional insight around our April 11th, 2022 announcement regarding the acquisition of Rayburn Rentals, which we believe directly supports our strategy for improving operating margins and overall value for our shareholders through acquisition and refinancing. Before we go any further, I'd like to take a moment to fully or more fully introduce myself as I was appointed CEO three weeks ago following a consulting engagement in which I helped the team identify, assess, and successfully acquire Rayburn Rentals. We believe this acquisition will facilitate improved margins while creating new opportunities to capitalize on the growing construction equipment rental industry. My role is to increase profitability through improved operational efficiency. directing the company's focus on process and leveraging both Manatex's unique array of product innovations as well as its strong brand position and market position. This company is well known for product quality and is well positioned to penetrate desirable end markets with in-demand product offerings. I have more than 25 years of industry experience with a focus on operations, strategic integration, and manufacturing. These experiences have helped me establish a track record for growth and improved operating margins. I've also had the fortune of building multinational businesses that successfully competed against companies 10 times their size. This has been achieved through leveraging the strengths of those organizations to serve the largest and most successful construction and mining companies in the world. Manatex has a great history and can trace its roots back over 75 years. The company has an impressive product offering, an agile culture, and an admirable reputation. Manatex offers a robust portfolio of mobile lifting solutions. Founded on its flagship Manatex boom truck line, and now complemented by an impressive array of articulated truck-mounted cranes branded as PM and MAC. To further complement our portfolio, our aerial work platforms offer ingenious zero-emissions electric solutions. These products, branded oil and steel and VALA, are gaining a strong position in the market. As a former customer of Manatex, I have long been impressed with its product capabilities, but even more so impressed by its people. For this reason, perhaps above all others, I am very happy to be here at Manatex and look forward to working with this very motivated team. The value we bring to our customers is underscored by a healthy gain in sales and backlog. First quarter sales were up 28% year over year, and we closed the quarter with a growing backlog valued at $206 million. Our improvement in backlog was equally driven by new orders from internationally-based customers as well as North American-based customers. Product demand was strong in most categories. Despite this progress made to build our backlog, we continue to face headwinds in attaining gross margin in our overall EBITDA performance. For the first quarter, gross profit margin was 16.8% and EBITDA margin was 4.5% of sales. Improvements to gross margin have been hindered by the dynamics facing all manufacturers, regardless of industry, including slowed supplier logistics, inflationary pressures, and overall increases to marginal production costs. However, during the past two quarters, we have taken action to retain and improve margins which are beginning to show results. Encouraged with these results, we will be accelerating our efforts to attain our stated goal of double-digit EBITDA performance. First, we will continue short-term efforts to improve production output and efficiencies. We are also working to better leverage our supply chain and add qualified suppliers to lessen the impact of logistics delays. More importantly, we will be embracing improved processes, proven to streamline scheduling, reduce cost, and improve output. I look forward to speaking with you about these initiatives and their outcomes in the future. More importantly, the board and executive management team have committed to identifying and pursuing paths to revenues with higher margins. We've discussed this previously, and the addition of Rayburn Reynolds is a direct reflection of this commitment. We are pleased with the addition located in West Texas, and the organic expansion efforts that are underway there. While we did not own Rayburn during the first quarter, we thought it might provide some context of how the businesses could have performed together. As previously reported on April 11th, Rayburn Rentals achieved approximately $20 million in sales and $8 million in EBITDA in 2021. Concurrently, Manatex finished 2021 with approximately $200 million in sales and $8 million in EBITDA. Albeit a theoretical pro forma, the combined businesses effectively would have doubled EBITDA contribution in 2021. For this reason, we are confident in our ability of the combined businesses to deliver improvements to our margins. We have begun to integrate Rayburn Rentals onto Manatech systems. Going forward, we will support organic growth initiatives underway while increasing our focus on manufacturing processes, efficiency, and operational excellence designed to generate the kind of margins and returns that we've been targeting for quite some time and the board and our shareholders require. I'll have some more comments on this later, but for now, I'd like to turn it over to Joe to discuss our financial performance. Joe?

Thanks, Mike.