Manitex International, Inc.

Greetings. Welcome to Manatex International's fourth quarter and full year 2023 results conference call. At this time, all participants are on 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. I will now turn the conference over to your host, Paul Bartolai of Investor Relations. You may begin.

Thank you. Welcome to Manatex International's fourth quarter and full year 2023 results conference call. Leading the call today are CEO Michael Coffey and CFO Joseph Doolin. We issued a press release earlier today detailing our fourth quarter and full year 2023 operational and financial results. This release, together with the accompanying presentation materials, are publicly available in the investor relations section of our corporate website at www.manatexinternational.com. I would like to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements, which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results could differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the risk factor section of our latest filings with the SEC. Additionally, please note that you can find reconciliations of historical non-GAAP financial measures in the press release issued earlier today and in the appendix of this presentation. Today's call will begin with prepared remarks from CEO Michael Coffey, who will provide a review of our recent business performance, including an update on the progress we have made on our new Elevating Excellence initiative, as well as our key priorities for 2024, followed by a financial update and outlook from our CFO, Joseph Doolin. At the conclusion of these prepared remarks, we will open the line for your questions. With that, I'll turn the call over to Mike.

Thank you, Paul, and good morning, everyone who is joining us on the call today. Our fourth quarter results were a strong finish to a transformative year at Manatex. One year ago, we introduced Elevating Excellence, a strategy focused on growth, operational efficiency, and a disciplined approach to capital allocation. In one year of elevating excellence, we delivered 40% year-over-year growth in adjusted EBITDA, nearly 240 basis points of adjusted EBITDA growth margin expansion, and a significant reduction in our net leverage profile. In a relatively short period of time, we've created a more competitive, more efficient, and more profitable organization and we're just getting started. In a few minutes, I will discuss in more detail our accomplishments under our Elevating Excellence strategy during 2023, as well as our key priorities for 2024. But suffice it to say, I'm very excited about our progress, which enabled us to drive strong results in 2023 and position us for continued success in 2024 and beyond. With that, please turn your attention to page three of our presentation. We will begin with a discussion on our fourth quarter highlights. Our fourth quarter performance reflects the second highest quarterly revenue run rate in at least five years, driven by continued strength in our core lifting segment While revenue was flat versus the prior year, given an elevated prior year comparison, gross margin increased more than 160 basis points to 20.9% in the fourth quarter. We had another solid quarter in our rental segment as well, with revenues up 7% in the fourth quarter as compared to the prior year period. Construction activity and demand trends in our North Texas markets remain favorable. In addition, our recently opened branch in Lubbock, Texas continues to ramp up ahead of plan. Our team in Lubbock is quickly building a strong position in that market. At a consolidated level, our fourth quarter adjusted EBITDA margin remained flat versus the prior year at 10.2%. but well above the low single digit percentage we delivered pre-pandemic. We believe the strategic actions taken over the last year have resulted in a structural positive step change in our margin profile for the business. As outlined within Elevating Excellence, we continue to focus on developing a higher value mix of backlogs. one that prioritizes higher margin products and geographies. As we've implemented this approach across the organization, combined with our increased manufacturing velocity, our backlog has declined, but this is expected.