Manitex International, Inc.

Good morning, ladies and gentlemen, and welcome to the Manitoux International Second Quarter 2024 Results Conference Call. At this time, all lines are in listen mode only, and following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press asterisk zero for the operator. This call is being recorded on Wednesday, August 7, 2024. I would now like to turn the conference over to Paul Bartoli, Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to Manatex International's second quarter 2024 results conference call. Leading the call today are CEO Michael Coffey and CFO Joseph Doolin. We issued a press release earlier today detailing our second quarter 2024 operational 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 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, followed by a financial update 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 to everyone joining us on the call today. During the second quarter, we continued to make important progress on our Elevating Excellence strategy, and as a result, we produced further margin expansion, generated strong adjusted EBITDA growth, and further reduced our net leverage. Our second quarter performance was highlighted by growth in the rental operations, gained momentum in our cost reduction initiatives, and ongoing process improvements. This resulted in nearly 20% year-over-year growth in adjusted EBITDA. Our second quarter adjusted EBITDA grew 137 basis points to 10.6% of revenues. This was our fourth consecutive quarter with an adjusted EBITDA margin of greater than 10%, generating adjusted EBITDA of roughly 33 million on a trailing 12-month basis. This level of performance, which has come despite some mixed and market trends, is a direct result of our successful execution of our strategy, Elevating Excellence. The business is performing at higher levels, and we have confidence that we can build on a track record of consistent performance. With that, please turn your attention to page three of our presentation, where we will begin with a discussion of our second quarter performance. Our second quarter lifting equipment revenue increased 2%, driven by growth from our North American operations. We made further progress in improving our manufacturing velocity, which also benefited the results. Order intake is slowed in the year, likely due to increased interest rates. Higher interest rates are slowing machine replacement cycles. They are also lowering the overall stocking levels maintained by our dealers. We are not seeing fundamental weakness in construction outlooks, however. To the contrary, public work spending is increasing, as are other key end market drivers affecting Manatex. Some customers have made requests to push out delivery schedules for the aforementioned reasons. We are accommodating these customers where possible with scheduling requests. While high interest rates are forcing dealers to delay replacing stock due to carrying costs, we remain confident in the long-term drivers in our key markets, so we believe this is likely a short-term issue. However, until we get some more clarity on macroeconomic outlooks, the timing of rate cuts, and the US election, We think customers will remain cautious in the near term. This is reflected in our orders during the quarter and our ending backlog levels. That said, we remain focused on our growth initiatives and are aggressively moving forward with our strategy to increase our market share, expand our dealer network, and drive product innovation. We continue to make good progress on our dealer expansion strategy, which is an important aspect in our goal to increase the distribution of our PM group products in North America. We are working with identified potential partners and remain on schedule. There is a significant interest in demand from our dealer community, and our portfolio of articulated lifting solutions in North America and we look forward to updating you on our progress later this year. We had a strong quarter in our rental segment, with revenues increasing 15% in the second quarter. The increase is owing to both geographic and fleet expansions. Demand trends in our North Texas markets remain robust, and we are benefiting from our increased investment in our rental fleet. Our location in Lubbock also continues to perform well, and we are very pleased with the progress at this newest location. Second quarter gross margins were up 220 basis points from the same period last year, driven by increased manufacturing throughput, lower material costs, and increased contributions from our rental segment. We continue to be encouraged by our progress on our supply and sourcing initiatives. Supply chain pressures have been a constant headwind for both Manatex and the industry. We are pleased to finally be seeing some benefits from the lower material costs flow through our results. As we discussed, last year we reorganized our global supply chain structure, and the new initiatives and our team's hard work producing positive results. In keeping with this, we added new suppliers designed to improve collaboration and lower our cost. We look forward to furthering these efficiencies and improving our supply chain going forward. These operational improvements enabled us to generate second quarter adjusted EBITDA of 8.1 million an increase of nearly 20% from the same period last year. We are very proud of this progress, and our trailing 12-month EBITDA is up roughly 25% from the prior 12-year period. Another important component of our strategy, Elevating Excellence, has been a focus on disciplined financial management and capital allocation. We reduced our net debt by over $2 million during the quarter, further driving down our net leverage ratio 2.5 times at the end of the quarter. Our progress on our capital discipline in recent quarters has been somewhat masked by industry-wide supply chain challenges, so we are happy to see the reduction of net debt in the quarter, and we expect to further reduce our working capital levels, positioning us for a strong year of cash flow conversion and allowing us to drive further reduction in net debt as the year progresses. Elevating excellence, our three-year strategy has delivered improved results and the business is performing at record levels. Despite interest rate headwinds, our core end markets are strong and customer relationships are improving. While the current macroeconomic trends remain uncertain, We are committed to executing on what is within our control. These controllables include improving our processes, cost of production improvements, and new dealer partnership channels in North America. It is this discipline focused on our strategic priorities that has enabled us to deliver strong adjusted EBITDA growth and margin expansion during 2024. despite the slowing in order trends we are experiencing in recent quarters. As a result of order trends, we are lowering our full year 2024 revenue guidance to a range of $290 million to $300 million. However, we continue to expect our 2024 adjusted EBITDA to be in a range of $30 million to $34 million, demonstrating our strong execution against operational priorities. With that, I'd like to turn the call over to Joe.