Manitex International, Inc.

Thank you, operator. Good afternoon, ladies and gentlemen, and thank you for your interest in Manatex International. We appreciate you taking 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 our third 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 our 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 also be available for the next year. On today's call, we will focus on our third quarter 2022 results, covering financial highlights, our business performance, margin trends, and key drivers being leveraged for stakeholders. I'm going to provide some opening remarks in tandem with a deck of slides we've provided, and then I'll turn the call over to Joe Doolin, our CFO, and then we'll have a Q&A session. This marks my third quarterly call as CEO, and I'd like to take a moment to express my appreciation to the board and to our shareholders for the faith placed in me. I'm excited to report the positive results and progress being made during the past three quarters. Your management team is delivering on improved margins, and we are optimistic about our short and midterm outlook. Together with our dealers and customers, we are positioning ourselves for growth and efficiency improvements. This quarter, we've moved closer to our stated goal to perform above 10% adjusted EBITDA, The team is working hard to attain this goal, which is now within sight. On slide two is our safe harbor statement, which reminds you that everything we discuss is subject to change as described in our SEC filings, which you can refer to further details on the many risks associated with our company. Now let's move straight to slide three. Third quarter revenues, despite being a historically slow quarter due to two weeks of summer downtime at our European operations, was 65 million, just slightly below Q2 sales, and representing a 27% year-over-year increase. We had a 320 basis point increase to gross margin at 19%, and we elevated our adjusted EBITDA significantly as compared to historical averages. Our backlog kept pace with sales growth and stood at $207 million at quarter end. During our first quarterly call, we highlighted the newest addition to the Manatex team, Rayburn Rentals. Rayburn continues to perform above expectations with robust sales and EBITDA contributions. Our planned Lubbock expansion is on track, and I am pleased to report new customer sales are occurring with a Lubbock-based customer base. This is happening in advance of our scheduled opening, early 2023. We achieved third quarter adjusted EBITDA of 5.2 million, or 8% of sales. Our annualized adjusted EBITDA for the past two quarters now exceeds $20 million, and as compared to full year results in 2021, $8 million in adjusted EBITDA. Our balance sheet grew in the quarter, increasing our total net debt. During third quarter, we completed a long-term growth in manufacturing-based inventories. This growth is directly associated with a tripling in our historic backlog. We also completed the acquisition of expansion rental fleet, which will be used for our Lubbock expansion as well as our Amarillo rental businesses. With these investments, we are now well situated to meet our short-term growth objectives and anticipate a reduction in debt during the fourth quarter moving forward. We remain well positioned with 32 million in total cash and credit availability. Finishing up slide three, I want to talk about some operational highlights. Last quarter, we discussed higher international shipping costs and other supply chain inefficiencies presenting headwinds to the business. The management team is proactively addressing these challenges and we have expanded our list of qualified suppliers to consolidate global purchasing where possible. We also spoke about price increases made to recover costs during the past year. We are now seeing favorable price to cost trends as we work through backlog, which was booked at higher, more favorable pricing. During the second quarter, we announced the reorganization of our Italian operations. This was the first step to reorganizing our PM Crane, oil and steel, and volume manufacturing companies to leverage share resources and improve the velocity of our production. Earlier this month, we named Richard Mills head of our North American manufacturing companies. We also announced a new distribution channel for Avala and oil and steel product lines in North America, allowing more meaningful market penetration and higher levels of customer services. Our global manufacturing businesses are now better aligned and organized to attain improved market share, lowered costs, and increased throughput. We look forward to sharing additional plans in preparation for fiscal year 2023 that will better position the company for growth and improve profitability. Let's move to slide four. We've provided a short summary of our performance of each of the company's product groups. We already touched on the exceptional performance of a rental division. Our articulated or knuckle boom crane division closed another improved quarter increasing both sales and order backlog. Backlog increased to 51% over the prior year. Our European and US-based backlog is evenly split, and we are fortunate to have grown our straight mass product sales again in the quarter. Sales were up 38% year over year, and production is focused on larger tonnage frames. The backlog in our Manatex crane line is at about 100 million. As for area work platforms, we are ramping up production and seeing orders come in at a very healthy level, with backlog double what it was a year ago. At this point, I'd like to turn it over to Joe to discuss our financial performance for the third quarter.

Joe?

Thank you, Mike. Please turn to slide five in the presentation. You can note that this is our second financial report in which we reported consolidated results that include Rayburn Rentals' performance, the acquisition having closed in early April, as you may recall. Revenue for the third quarter was $65 million, an increase of $14.1 million, or 27.7% versus the prior year period. The improvement was driven mainly by revenue from Rayburn Rentals and an increase in sales of our straight mass cranes in the United States. Increased sales of our articulated cranes from our European operations were offset by foreign currency charges of $4.6 million. Our backlog of $207 million remains strong and represents an 82% increase from September of 2021. This reflects continued strong orders within the straight mass cranes, articulated cranes, and aerial platforms businesses. Our straight mass crane backlog has increased 130% year-over-year, Aerial work platforms have more than doubled year over year, while articulated cranes are up 44% since the prior year period. Our book-to-bill ratio was 0.9 to 1 for the quarter, indicative of continued strength in our orders. Gross profit of $12.3 million is up $4.3 million from the prior year period of $8 million. Gross margin of 19% in the third quarter represents an increase of 320 basis points over the prior year, and a sequential increase from 17.8% in Q2. The gross margin percentage is at the highest level we've had in over a year and is trending as we had anticipated. We anticipate gross margins will continue to tick higher as we look ahead. Adjusted EBITDA increased to 5.2 million or 8% of sales for the third quarter of 22 versus adjusted EBITDA of 1.6 million or 3.1% of sales in the third quarter last year. The improvement was largely due to Rayburn Rental's contribution to the results and higher profitability at Manatex Cranes. We anticipate improved margins for manufacturing as well as the positive contributions of Rayburn Rentals. Now please turn to slide six for a comparison of our operating results to the prior quarter and prior year. I've already addressed sales and gross margin, but I wanted to speak to operating expenses and other expenses. Operating expenses, as reported, were $11.1 million for the quarter, inclusive of approximately $1.3 million of stock compensation and severance costs. Adjusting for these and other one-time items, our non-GAAP adjusted operating expenses were $9.8 million, or 15.1% of sales, compared to $7.6 million, or 14.8%, in the last year's similar period. Rayburn Rentals contributed approximately $1.3 million to operating expenses for the quarter. Other expenses were $4.1 million comprised of interest expense and a legal settlement charge of $2.9 million related to the sale of a business in 2015. This charge will be paid in monthly installments over 10 quarters. Net loss for the quarter was $3.1 million, or $0.15 per share, compared with a net loss of $1.1 million, or $0.06 per share in last year's third quarter. Adjusted net income was $1 million, or $0.05 per share, compared to a loss of $219,000, or $0.01 per share last year. There were several one-time items in the results, including the legal settlement that I mentioned, which significantly impacted our earnings. Now moving to slide 7. Net debt at the end of the quarter was $85.6 million, up from the prior period due to rental fleet acquisitions related to the Rayburn expansion and funding of material orders to meet our current demand. With $32 million of credit availability, we are well positioned to meet current funding requirements. We anticipate utilizing our cash flow in the fourth quarter to begin to reduce debt, and we are striving to continue to lower our debt level throughout 2023. With that, I will now turn the call back to Mike Coffey. Mike?