UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-32401

 

MANITEX INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Michigan		42-1628978
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)
9725 Industrial Drive, Bridgeview, Illinois		60455
(Address of Principal Executive Offices)		(Zip Code)

(708) 430-7500

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	MNTX	The NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☐			Accelerated filer		☒
Non-accelerated filer		☐			Smaller reporting company		☒
					Emerging growth company		☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, no par, outstanding at October 31, 2024 was 20,397,358 MANITEX INTERNATIONAL, INC. AND SUBSIDIARIES

 

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GENERAL

This Quarterly Report on Form 10-Q filed by Manitex International, Inc. speaks as of September 30, 2024 unless specifically noted otherwise. Unless otherwise indicated, Manitex International, Inc., together with its consolidated subsidiaries, is hereinafter referred to as “Manitex,” the “Registrant,” “us,” “we,” “our” or the “Company.”

 

Manitex entered into a definitive agreement (the “Merger Agreement”) on September 12, 2024 to be acquired by Tadano Ltd. in an all-cash transaction at an equity value of $122 million and total transaction value of $223 million, including outstanding debt (the “Merger”). Under the terms of the transaction, Manitex shareholders will receive $5.80 per share in cash. Upon completion of the transaction, Manitex’s shares will no longer trade on NASDAQ or any other public market.

The transaction was unanimously approved by Manitex’s Board of Directors and is expected to close early in the first quarter of 2025, subject to approval by Manitex shareholders, receipt of regulatory approvals and other customary closing conditions.

Forward-Looking Information

Certain information in this Quarterly Report includes forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995). These statements relate to, among other things, the Company’s expectations, beliefs, intentions, future strategies, future events or future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. In addition, when included in this Quarterly Report or in documents incorporated herein by reference the words “may,” “expects,” “should,” “intends,” “anticipates,” “believes,” “plans,” “projects,” “estimates” and the negatives thereof and analogous or similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statement is not forward-looking. We have based these forward-looking statements on current expectations and projections about future events. These statements are not guarantees of future performance. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements. Such risks and uncertainties, many of which are beyond our control, include, without limitation, those described below and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, in the section entitled “Item 1A. Risk Factors”:

 

 

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The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and in this Quarterly Report on Form 10-Q are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected.

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We do not undertake, and expressly disclaim, any obligation to update this forward-looking information, except as required under applicable law.

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MANITEX INTERNATIONAL, INC.

FORM 10-Q INDEX

TABLE OF CONTENTS

 

PART I:		FINANCIAL INFORMATION			5
ITEM 1: Financial Statements (Unaudited)					5
		Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023		5
		Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023			6
		Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023			7
		Condensed Consolidated Statement of Shareholders’ Equity for the nine months ended September 30, 2024 and 2023			8
		Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023			9
		Notes to Condensed Consolidated Financial Statements			10
ITEM 2: Management’s Discussion And Analysis Of Financial Condition And Results Of Operations					28
ITEM 3: Quantitative And Qualitative Disclosures About Market Risk					32
ITEM 4: Controls And Procedures					32
PART II:		OTHER INFORMATION			33
ITEM 1: Legal Proceedings					33
ITEM 1A: Risk Factors					33
ITEM 2: Unregistered Sales Of Equity Securities And Use Of Proceeds					34
ITEM 3: Defaults Upon Senior Securities					35
ITEM 4: Mine Safety Disclosures					35
ITEM 5: Other Information					35
ITEM 6: Exhibits					35

 

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PART 1—FINANCIAL INFORMATION

Item 1—Financial Statements

MANITEX INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

		September 30, 2024				December 31, 2023
ASSETS
Current assets
Cash		$	4,246			$	9,269
Cash – restricted			215				212
Trade receivables (net)			47,275				49,118
Other receivables			1,394				553
Inventory (net)			84,180				82,337
Prepaid expenses and other current assets			3,725				4,084
Total current assets			141,035				145,573
Total fixed assets net of accumulated depreciation of $35,000 and $29,751    at September 30, 2024 and December 31, 2023, respectively			51,696				49,560
Operating lease assets			7,344				7,416
Intangible assets (net)			9,897				12,225
Goodwill			37,551				37,354
Deferred tax assets			3,358				3,603
Total assets		$	250,881			$	255,731
LIABILITIES AND EQUITY
Current liabilities
Accounts payable		$	44,012			$	47,644
Accrued expenses			13,935				14,503
Related party payables			-				27
Revolving term credit facilities			1,820				2,185
Notes payable (net)			21,087				23,343
Current portion of finance lease obligations			670				605
Current portion of operating lease obligations			2,166				2,100
Customer deposits			2,155				2,384
Total current liabilities			85,845				92,791
Long-term liabilities
Revolving term credit facilities (net)			48,625				49,781
Notes payable (net)			13,727				16,249
Finance lease obligations (net of current portion)			2,272				2,777
Operating lease obligations (net of current portion)			5,177				5,315
Deferred tax liability			5,505				4,145
Other long-term liabilities			3,473				4,989
Total long-term liabilities			78,779				83,256
Total liabilities			164,624				176,047
Commitments and contingencies
Equity
Preferred stock—Authorized 150,000 shares, no shares issued or outstanding at September 30, 2024 and December 31, 2023			-				-
Common stock—no par value 25,000,000 shares authorized, 20,397,358 and 20,258,194    shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively			135,274				134,328
Additional paid in capital			5,670				5,440
Retained deficit			(61,782	)			(65,982	)
Accumulated other comprehensive loss			(3,675	)			(4,169	)
Equity attributable to shareholders of Manitex International, Inc.			75,487				69,617
Equity attributed to noncontrolling interest			10,770				10,067
Total equity			86,257				79,684
Total liabilities and equity		$	250,881			$	255,731

The accompanying notes are an integral part of these financial statements

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MANITEX INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for share and per share amounts)

(Unaudited)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Net revenues		$	66,544			$	71,331			$	216,122			$	212,736
Cost of sales			50,519				54,746				166,053				166,806
Gross profit			16,025				16,585				50,069				45,930
Operating expenses
Research and development costs			711				861				2,494				2,512
Selling, general and administrative expenses			9,894				10,545				32,138				32,342
Transaction costs			985				-				985				-
Total operating expenses			11,590				11,406				35,617				34,854
Operating income			4,435				5,179				14,452				11,076
Other income (expense)
Interest expense, net			(2,082	)			(1,856	)			(5,715	)			(5,517	)
Foreign currency transaction loss			(761	)			(883	)			(1,590	)			(1,656	)
Other income (expense)			35				196				52				(541	)
Total other expense			(2,808	)			(2,543	)			(7,253	)			(7,714	)
Income before income taxes			1,627				2,636				7,199				3,362
Income tax expense			874				742				2,296				962
Net income			753				1,894				4,903				2,400
Net income attributable to noncontrolling interest			326				194				703				243
Net income attributable to shareholders of Manitex International, Inc.		$	427			$	1,700			$	4,200			$	2,157
Income per share
Basic		$	0.02			$	0.08			$	0.21			$	0.11
Diluted		$	0.02			$	0.08			$	0.21			$	0.11
Weighted average common shares outstanding
Basic			20,397,358				20,252,114				20,350,315				20,193,696
Diluted			20,397,358				20,254,830				20,384,585				20,196,255

The accompanying notes are an integral part of these financial statements

 

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MANITEX INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Net income		$	753			$	1,894			$	4,903			$	2,400
Other comprehensive income
Foreign currency translation gain (loss)			2,011				(1,134	)			(494	)			(439	)
Total comprehensive income			2,764				760				4,409				1,961
Comprehensive income attributable to noncontrolling interest			326				194				703				243
Total comprehensive income attributable to shareholders of    Manitex International, Inc.		$	2,438			$	566			$	3,706			$	1,718

The accompanying notes are an integral part of these financial statements

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MANITEX INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except share amounts)

(Unaudited)

 

		Outstanding shares				Common Stock				APIC				Retained Deficit				AOCI  Gain (Loss)				Noncontrolling Interests				Total
Balance at December 31, 2023			20,258,194			$	134,328			$	5,440			$	(65,982	)		$	(4,169	)		$	10,067			$	79,684
Net income			—				—				—				2,283				—				148				2,431
Loss on foreign currency translation			—				—				—				—				(1,200	)			—				(1,200	)
Employee incentive plan issuance			66,700				428				(428	)			—				—				—				—
Repurchase to satisfy withholding    and cancelled shares			(8,841	)			(56	)			—				—				—				—				(56	)
Share-based compensation			—				—				633				—				—				—				633
Balance at March 31, 2024			20,316,053			$	134,700			$	5,645			$	(63,699	)		$	(5,369	)		$	10,215			$	81,492
Net income			—				—				—				1,490				—				229				1,719
Loss on foreign currency translation			—				—				—				—				(317	)			—				(317	)
Employee incentive plan issuance			78,310				551				(551	)			—				—				—				—
Repurchase to satisfy withholding cancelled shares			(4,064	)			(25	)			—				—				—				—				(25	)
Share-based compensation			—				—				360				—				—				—				360
Balance at June 30, 2024			20,390,299			$	135,226			$	5,454			$	(62,209	)		$	(5,686	)		$	10,444			$	83,229
Net income			—				—				—				427				—				326				753
Gain on foreign currency translation			—				—				—				—				2,011				—				2,011
Employee incentive plan issuance			8,368				53				(53	)			—				—				—				—
Repurchase to satisfy withholding and cancelled shares			(1,309	)			(5	)			—				—				—				—				(5	)
Share-based compensation			—				—				269				—				—				—				269
Balance at September 30, 2024			20,397,358			$	135,274			$	5,670			$	(61,782	)		$	(3,675	)		$	10,770			$	86,257
Balance at December 31, 2022			20,107,014			$	133,289			$	4,266			$	(73,338	)		$	(5,822	)		$	9,566			$	67,961
Net income (loss)			-				-				-				53				-				(79	)			(26	)
Gain on foreign currency translation			-				-				-				-				673				-				673
Employee incentive plan issuance			62,402				410				(410	)			-				-				-				-
Repurchase to satisfy withholding and cancelled shares			(7,605	)			(40	)			-				-				-				-				(40	)
Share-based compensation			-				-				766				-				-				-				766
Balance at March 31, 2023			20,161,811			$	133,659			$	4,622			$	(73,285	)		$	(5,149	)		$	9,487			$	69,334
Net income			-				-				-				404				-				128				532
Gain on foreign currency translation			-				-				-				-				22				-				22
Employee incentive plan issuance			83,820				589				(589	)			-				-				-				-
Repurchase to satisfy withholding and cancelled shares			(1,875	)			(9	)			-				-				-				-				(9	)
Share-based compensation			-				-				588				-				-				-				588
Balance at June 30, 2023			20,243,756			$	134,239			$	4,621			$	(72,882	)		$	(5,127	)		$	9,615			$	70,466
Net income			—				—				—				1,700				—				194				1,894
Loss on foreign currency translation							—				—				—				(1,134	)			—				(1,134	)
Employee incentive plan issuance			10,085				64				(64	)			—				—				—				-
Repurchase to satisfy withholding and    cancelled shares			(1,727	)			(9	)			—				—				—				—				(9	)
Share-based compensation							—				457				—				—				—				457
Balance at September 30, 2023			20,252,114			$	134,294			$	5,014			$	(71,182	)		$	(6,261	)		$	9,809			$	71,674

 

The accompanying notes are an integral part of these financial statements

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MANITEX INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

		Nine months ended September 30,
		2024				2023
Cash flows from operating activities:
Net income		$	4,903			$	2,400
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization			8,213				8,658
Changes in allowances for credit losses			31				79
Changes in inventory reserves			321				(207	)
Deferred income taxes			1,593				(493	)
Amortization of deferred debt issuance costs			17				34
Amortization of debt discount			39				57
Loss on forward currency contract			-				321
Loss (gain) on sale of assets			(548	)			15
Share-based compensation			1,262				1,811
Adjustment to deferred gain on sales and lease back			(60	)			(60	)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable			2,128				(3,350	)
(Increase) decrease in other receivables			(807	)			688
(Increase) decrease in inventory			(1,561	)			(15,718	)
(Increase) decrease in prepaid expenses and other assets			403				813
Increase (decrease) in accounts payables and related party payables			(4,343	)			5,284
Increase (decrease) in accrued expenses			(566	)			1,513
Increase (decrease) increase in other current liabilities			(255	)			(1,192	)
Increase (decrease) in other long-term liabilities			(1,583	)			(481	)
Net cash provided by operating activities			9,187				172
Cash flows from investing activities:
Purchase of property and equipment			(8,238	)			(4,637	)
Investment in intangible assets			-				(62	)
Proceeds from sale of assets			989				422
Net cash used in investing activities			(7,249	)			(4,277	)
Cash flows from financing activities:
Net borrowings (payments) on revolving credit facilities			(1,533	)			6,744
Net payments on working capital facilities			(1,621	)			(2,859	)
Note payments			(3,453	)			(2,384	)
Shares repurchased for income tax withholding on share-based compensation			(86	)			(58	)
Payments on finance lease obligations			(439	)			(371	)
Net cash provided by (used in) provided by financing activities			(7,132	)			1,072
Net decrease in cash and cash equivalents			(5,194	)			(3,033	)
Effect of exchange rate changes on cash			174				(281	)
Cash, cash equivalents and restricted cash at the beginning of the year			9,481				8,190
Cash, cash equivalents and restricted cash at end of period		$	4,461			$	4,876

(See Note 1 for Supplemental cash flow disclosures)

 

The accompanying notes are an integral part of these financial statements

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MANITEX INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)

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The Company’s total unrecognized tax benefits as of September 30, 2024 and September 30, 2023 were approximately $2.2 million and $2.8 million respectively.

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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Recent Developments

Business Overview

 

The following management’s discussion and analysis of financial condition and results of continuing operations should be read in conjunction with the Company’s financial statements and notes and other information included elsewhere in this Quarterly Report on Form 10-Q.

 

Backlog

 

The Company’s backlog was approximately $97 million and $170 million at September 30, 2024 and December 31, 2023, respectively.

 

Merger Agreement with Tadano

 

On September 12, 2024, Manitex entered into the Merger Agreement with Tadano and Merger Sub. The Merger is an all-cash transaction at an equity value of $122 million and total transaction value of $223 million, including outstanding debt. Under the terms of the transaction, Manitex shareholders will receive $5.80 per share in cash. Upon completion of the transaction, Manitex’s shares will no longer trade on NASDAQ or any other public market. See Note 1 (Nature of Operations and Basis of Presentation) in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on the Merger Agreement and the Merger.

 

 

Results of Condensed Consolidated Operations

MANITEX INTERNATIONAL, INC.

(In thousands)

 

		Three Months Ended September 30,
		2024				2023				$ Change				% Change
Net revenues		$	66,544			$	71,331			$	(4,787	)			(6.7	)%
Cost of sales			50,519				54,746				(4,227	)			(7.7	)
Gross profit			16,025				16,585				(560	)			(3.4	)
Operating expenses
Research and development costs			711				861				(150	)			(17.5	)
Selling, general and administrative expenses			9,894				10,545				(651	)			(6.2	)
Transaction costs			985				-				985			n/m
Total operating expenses			11,590				11,406				184				1.6
Operating income			4,435				5,179				(744	)			(14.4	)
Other income
Interest expense, net			(2,082	)			(1,856	)			(226	)			12.2
Foreign currency transaction loss			(761	)			(883	)			122				(13.8	)
Other income			35				196				(161	)			(82.2	)
Total other expense			(2,808	)			(2,543	)			(265	)			10.4
Income before income taxes			1,627				2,636				(1,009	)			(38.3	)
Income tax expense			874				742				132				17.8
Net income			753				1,894				(1,141	)			(60.3	)
Net income attributable to noncontrolling interest			326				194				132				67.6
Net income attributable to shareholders of    Manitex International, Inc.		$	427			$	1,700			$	(1,273	)			(74.9	)%

 

n/m = not meaningful

 

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

Net Revenues and gross profit — Net revenues decreased $4.8 million or 6.7% to $66.5 million for the three months ended September 30, 2024 compared with $71.3 million for the comparable period in 2023. The decrease in revenues is primarily due to a decrease in aerial platform and chassis sales partially offset by an increase in rental revenue.

 

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Gross profit decreased $0.6 million to $16.0 million for the three months ended September 30, 2024 from $16.6 million for the comparable period in 2023. The decrease in gross profit in 2024 is attributable to lower sales, offset by lower material costs driven by supply chain initiatives and increased contribution from the rental segment. As a result of these factors, the gross margin percentage was 24.1% for the three months ended September 30, 2024 as compared with 23.3% for the prior year.

 

Research and development — Research and development expense was $0.7 million for the three months ended September 30, 2024 compared to $0.9 million for the same period in 2023. The Comp28any’s research and development spending reflects our continued commitment to develop and introduce new products that gives the Company a competitive advantage, with the costs generated particularly in the PM and Valla business units.

 

Selling, general and administrative expense — SG&A expense for the three months ended September 30, 2024, was $9.9 million compared to $10.5 million for the comparable period in 2023. SG&A expense decreased by $0.7 million due to lower stock compensation, salary expenses and insurance in 2024.

 

Transaction costs — Transaction costs for the three months ended September 30, 2024 was $1.0 million, related to professional fees and other costs incurred during the period related to due diligence and other costs of the proposed Merger.

 

Interest expense, net — Interest expense was $2.1 million for the three months ended September 30, 2024 compared with $1.9 million for the comparable period in 2023 . The increase is driven by higher utilization of working capital facilities.

 

Foreign currency transaction losses — For the three and nine months ended September 30, 2024, the Company had foreign currency losses of $0.8 million, compared with a loss of $0.9 million for the comparable period in 2023. A substantial portion of the loss relates to changes in the Argentinean peso.

Other income (expense) — Other income was less than $0.1 million for the three months ended September 30, 2024 compared with other income of $0.2 million for the same period in 2023.

 

Income taxes —For the three months ended September 30, 2024, the Company recorded an income tax provision of $0.9 million, which includes a discrete income tax expense of less than $0.1 million. The calculation of the overall income tax provision for the three months ended September 30, 2024 primarily consists of domestic and foreign income taxes. For the three months ended September 30, 2023, the Company recorded an income tax provision of $0.7 million, which includes a discrete income tax expense of less than $0.1 million. The calculation of the overall income tax provision for the three months ended September 30, 2023 primarily consists of U.S. federal income taxes for Rabern which is a separate taxpayer for U.S. federal tax purposes, foreign income taxes, and a discrete tax income tax benefit related to the expiration of the statute of limitations for a foreign jurisdiction offset by an accrual of interest related to unrecognized tax benefits.

The effective tax rate for the three months ended September 30, 2024 was an income tax provision of 53.7% on pretax income of $1.6 million compared to an income tax provision of 28.1% on pretax income of $2.6 million in the comparable prior period. The effective tax rate for the three months ended September 30, 2024 differs from the U.S. statutory rate of 21% primarily due to income taxed in domestic and foreign jurisdictions at varying tax rates, permanent differences including nondeductible expenses, foreign tax credits, a change to the deferred tax liability related to an investment in a subsidiary, and a partial valuation allowance in the U.S. and Italy as well as a valuation allowance in certain foreign jurisdictions.

 

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		Nine Months Ended September 30,
		2024				2023				$ Change				% Change
Net revenues		$	216,122			$	212,736			$	3,386				1.6	%
Cost of sales			166,053				166,806				(753	)			(0.5	)
Gross profit			50,069				45,930				4,139				9.0
Operating expenses
Research and development costs			2,494				2,512				(18	)			(0.7	)
Selling, general and administrative expenses			32,138				32,342				(204	)			(0.6	)
Transaction costs			985				-				985			n/m
Total operating expenses			35,617				34,854				763				2.2
Operating income			14,452				11,076				3,376				30.5
Other income
Interest expense, net			(5,715	)			(5,517	)			(198	)			3.6
Foreign currency transaction loss			(1,590	)			(1,656	)			66				(4.0	)
Other income (expense)			52				(541	)			593				(109.8	)
Total other expense			(7,253	)			(7,714	)			461				(6.0	)
Income before income taxes			7,199				3,362				3,837				114.1
Income tax expense			2,296				962				1,334				138.7
Net income			4,903				2,400				2,503				104.3
Net income attributable to noncontrolling interest			703				243				460				189.4
Net income attributable to shareholders of    Manitex International, Inc.		$	4,200			$	2,157			$	2,043				94.7	%

 

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Net Revenues and gross profit - Net revenues increased $3.4 million or 1.6% to $216.1 million for the nine months ended September 30, 2024 compared to $212.7 million for the comparable period in 2023. The increase in revenue is primarily due to increased manufacturing throughput in North America, a modest increase in rental revenues, partially offset by a decline in aerial platform and chassis sales.

 

Gross profit increased $4.1 million to $50.1 million for nine months ended September 30, 2024 from $45.9 million for the comparable period in 2023. The increase in gross profit in 2024 is attributable to increased manufacturing throughout, lower material costs driven by supply chain initiatives and increased contribution from the rental segment. As a result of these factors, the gross margin percentage was 23.2% for nine months ended September 30, 2024 as compared with 21.6% for the prior year.

 

Research and development — Research and development expense was $2.5 million for the nine months ended September 30, 2024 consistent with $2.5 million for the same period in 2023. The Company’s research and development spending reflects our continued commitment to develop and introduce new products which gives the Company a competitive advantage. The costs are primarily generated in the PM and Valla business units.

 

Selling, general and administrative expense — SG&A expense for the nine months ended September 30, 2024 was $32.1 million compared to $32.3 million for the comparable period in 2023. SG&A expense included an increase in salary expense and property tax offset by a decrease in trade show and stock compensation expenses compared with 2023.

 

Transaction costs — Transaction costs for the nine months ended September 30, 2024 were $1.0 million, related to professional fees and other costs incurred during the period related to due diligence and other costs relating to the proposed Merger.

 

Interest expense, net —Interest expense was $5.7 million for the nine months ended September 30, 2024 compared with $5.5 million for the comparable period in 2023 as the increase is driven by higher utilization of working capital facilities.

Foreign currency transaction losses — For the nine months ended September 30, 2024, the Company had a foreign currency loss of $1.6 million, consistent with a loss of $1.7 million for the comparable period in 2023. A substantial portion of the loss relates to changes in the Argentinean peso.

Other income — Other income was less than $0.1 million for the nine months ended September 30, 2024 compared with other expense of $0.5 million for the same period in 2023. The expense in 2023 relates to a pension settlement obligation of $0.5 million related to the termination of services provided by union members and $0.2 million of legal settlement charges.

 

Income taxes — For the nine months ended September 30, 2024, the Company recorded an income tax provision of $2.3 million, which includes a discrete income tax benefit of $0.4 million.

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The calculation of the overall income tax provision for the nine months ended September 30, 2024, primarily consists of domestic and foreign taxes offset by a discrete income tax benefit for a reduction in unrecognized tax benefits related to the expiration of the statutes of limitations in various state and foreign jurisdictions and the settlement of a foreign income tax audit. For the nine months ended September 30, 2023, the Company recorded an income tax provision of $0.9 million, which includes a discrete income tax benefit of less than $0.1 million. The calculation of the overall income tax provision for the nine months ended September 30, 2023 primarily consists of U.S. federal income taxes for Rabern which is a separate taxpayer for U.S. federal tax purposes, foreign income taxes, and a discrete income tax benefit related to the expiration of the statutes of limitations for various states and a foreign jurisdiction offset by an accrual of interest related to unrecognized tax benefits.

 

The effective tax rate for the nine months ended September 30, 2024 was an income tax provision of 31.9% on pretax income of $7.2 million compared to an income tax provision of 28.6% on pretax income of $3.4 million in the comparable prior period. The effective tax rate for the nine months ended September 30, 2024 differs from the U.S. statutory rate of 21% primarily due to income taxed in domestic and foreign jurisdictions at varying tax rates, permanent differences including nondeductible expenses, foreign tax credits, a change to the deferred tax liability related to an investment in a subsidiary, a partial valuation allowance in the U.S. and Italy as well as a valuation allowance in certain foreign jurisdictions, and a discrete income tax benefit for a reduction in unrecognized tax benefits related to the expiration of the statutes of limitations in various state and foreign jurisdictions, and the settlement of a foreign income tax audit.

 

 

Cash flows for nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

 

 

Operating Activities - For the nine months ended September 30, 2024, cash flow provided by operating activities was $9.2 million compared to $0.2 million for the same period in the prior year. Cash used by working capital was $3.8 million for the nine months ended September 30, 2024 compared to cash used by working capital of $14.1 million for the same period in the prior year. Cash used by working capital for the nine months ended September 30, 2024 is due to decreases in accounts payable, an increase in inventories offset by a decrease in accounts receivable.



Investing Activities - Cash used in investing activities was $7.2 million for the first nine months ended September 30, 2024 compared to $4.3 million used in investing activities in the same period a year ago. Cash used in investing activities was primarily related to cash payments for property and equipment purchases to support the rental business partially offset by proceeds from the sale of assets.

 

Financing Activities - Cash used in financing activities was $7.1 million for the nine months ended September 30, 2024 which included a net reduction in working capital facilities of $1.6 million, a $1.5 million reduction in revolving credit and note payments of $3.5 million.

 

Liquidity and Capital Resources

 

The global economy generally and our customers and suppliers specifically are being significantly impacted by a number of factors, including inflation, high interest rates and general economic uncertainty. While the potential negative financial impact that these factors will have on our results of operations and liquidity position cannot be reasonably estimated at this time, such impacts could be material. In the context of these uncertain conditions, we are actively managing the business to maintain cash flow and ensure that we have sufficient liquidity for a variety of scenarios. We believe that such strategy will allow us to meet our anticipated funding requirements.

 

On April 11, 2022, the Company entered into an $85 million credit facility with Amarillo National Bank consisting of a working capital facility of $40 million secured by assets of Manitex U.S. businesses, working capital facility of $30 million secured by assets of Rabern, and $15 million term loan facility. This new banking facility provided the funds for the Rabern acquisition and working capital facilities for both the Manitex U.S. and Rabern businesses. At September 30, 2024, the PM Group had established working capital facilities with five Italian, one Spanish, twelve South American banks and one Romanian bank. Under these facilities, the PM Group can borrow $25 million against orders, invoices and bank overdrafts.

 

Cash, cash equivalents and restricted cash were $4.5 million and $9.5 million at September 30, 2024 and December 31, 2023. At September 30, 2024, the Company had global liquidity of approximately $30 million based on the cash balance and availability under its working capital facilities. Future advances are dependent on having available collateral.

 

If our revenues were to increase significantly in the future, the provision limiting borrowing against accounts receivable and inventory would limit future borrowings. If this were to occur, we would attempt to negotiate higher inventory caps with our banks. There is, however, no assurance that the banks would agree to increase the caps.

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The Company expects cash flows from operations and existing availability under the current revolving credit and working capital facilities will be adequate to fund future operations. If, in the future, we were to determine that additional funding is necessary, we believe that it would be available. There is, however, no assurance that such financing will be available or, if available, on acceptable terms.

At September 30, 2024 and December 31, 2023, no customer accounted for 10% or more of the Company’s accounts receivable.

 

Critical Accounting Policies

The Company’s critical accounting policies have not materially changed since the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 was filed. See Item 7, Management’s Discussion and Analysis of Results of Operations and Financial Condition, in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for a discussion of the Company’s critical accounting policies.

Item 3—Quantitative and Qualitative Disclosures about Market Risk

Not required for Smaller Reporting Companies.

Item 4—Controls and Procedures

Disclosure Controls and Procedures

With the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) and under the supervision of the Audit Committee of the Board of Directors, our management conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of September 30, 2024. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of September 30, 2024, were effective and provided reasonable assurance that the information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control Over Financial Reporting

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). During the period covered by this report, the Company made no changes that have materially affected, or that are reasonably likely to materially affect, its internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1—Legal Proceedings

The information set forth in Note 16 (Legal Proceedings and Other Contingencies) to the accompanying Condensed Consolidated Financial Statements included in Part I. Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q is incorporated herein by reference.

Item 1A—Risk Factors

 

You should carefully consider the risks described under the heading “Risk Factors” in Part I, Item 1A. of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, the other information in this Quarterly Report on Form 10-Q, including the Company’s unaudited condensed consolidated financial statements and the related notes, as well as the Company’s other public filings with the SEC, before deciding to invest in the Company’s common stock. The occurrence of any of the events described herein or therein could harm the Company’s business, financial condition, results of operations, liquidity or prospects. In such an event, the market price of the Company’s common stock could decline, and you may lose all or part of your investment. In addition to the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, the following risks are related to the proposed Merger:

We may fail to consummate the Merger, and uncertainties related to the consummation of the Merger may have a material adverse effect on our business, results of operations and financial condition and negatively impact the trading price of our common stock.

The Merger is subject to the satisfaction of a number of conditions beyond our control, including receiving the requisite shareholder approvals and other customary closing conditions. Failure to satisfy the conditions to the Merger could prevent or delay the completion of the Merger. Further, regulators may impose conditions, obligations or restrictions on the Merger that may have the effect of delaying or preventing its completion. If the Merger does not close, we may suffer other consequences that could adversely affect our business, financial condition, operating results, and stock price, and our shareholders would be exposed to additional risks, including, but not limited to:

• to the extent that the current trading price of our common stock reflects an assumption that the Merger will be completed, the trading price of our common stock could decrease;

• investor confidence in us could decline, shareholder litigation could be brought against us, relationships with existing and prospective customers, service providers, investors, lenders and other business partners may be adversely impacted, we may be unable to retain key personnel;

• we have incurred, and will continue to incur, significant expenses for professional services in connection with the Merger for which we will have received little or no benefit if the Merger is not consummated;

• any disruptions to our business resulting from the announcement and pendency of the Merger, including adverse changes in our relationships with customers, suppliers, partners and employees, may continue or intensify in the event the Merger is not consummated or is significantly delayed; and

• the requirement that we pay a termination fee to Tadano under certain circumstances.

 

There also is no assurance that the Merger and the other transactions contemplated by the Merger Agreement will occur on the terms and timeline currently contemplated or at all.

If the proposed Merger is delayed or not completed, the trading price of our common stock may decline, including to the extent that the current trading price of our common stock reflects an assumption that the Merger and the other transactions contemplated by the Merger Agreement will be consummated without further delays, which could have a material adverse effect on our business, results of operations and financial condition. If the Merger Agreement is terminated and we determine to seek another business combination, we may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Merger.

 

If the Merger Agreement is terminated, we may, under certain circumstances, be obligated to pay a termination fee to Tadano. These costs could require us to use available cash that would have otherwise been available for other uses.

 

If the Merger is not completed, in certain circumstances, we could be required to pay a termination fee to Tadano of $4.9 million. If the Merger Agreement is terminated, the termination fee we may be required to pay, if any, under the Merger Agreement may require us to use available cash that would have otherwise been available for general corporate purposes or other uses. For these and other reasons, termination of the Merger Agreement could materially and adversely affect our business, results of operations or financial condition, which in turn would materially and adversely affect the trading price of our common stock.

 

While the Merger Agreement is in effect, we are subject to certain interim covenants, which may disrupt our plans and operations.

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The Merger Agreement generally requires us to operate our business in the ordinary course, subject to certain exceptions, including as required by applicable law, pending consummation of the Merger, and subjects us to customary interim operating covenants that restrict us from taking certain specified actions until the Merger is completed or the Merger Agreement is terminated in accordance with its terms. These restrictions could prevent us from pursuing certain business opportunities that may arise prior to the consummation of the Merger and may affect our ability to execute our business strategies and attain financial and other goals and may impact our financial condition, results of operations and cash flows.

Uncertainties relating to the Merger could impact our relationships with customers, employees and other third parties, which could have a material adverse effect on our business, results of operations and financial condition.

Uncertainty about the pendency of the Merger and the effect of the Merger on employees, customers and other third parties who deal with us may have a material adverse effect on our business, results of operations and financial condition. These uncertainties may impair our ability to attract, retain and motivate key personnel pending the consummation of the Merger, as such personnel may experience uncertainty about their future roles following the consummation of the Merger. Additionally, these uncertainties could cause customers and other third parties who deal with us to seek to change existing business relationships with us or fail to extend an existing relationship with us, all of which could have a material adverse effect on our business, results of operations, financial condition and trading price of our common stock.

The Merger Agreement limits our ability to pursue alternatives to the Merger and may discourage other companies from trying to acquire us for greater consideration than what Tadano has agreed to pay pursuant to the Merger Agreement.

The Merger Agreement contains provisions that make it more difficult for us to sell our business to a party other than Tadano. Under the Merger Agreement, we became subject to customary “no-shop” restrictions on our ability to solicit alternative acquisition proposals from third parties and to provide information to, and participate in discussions and engage in negotiations with, third parties regarding any alternative acquisition proposals, subject to a customary “fiduciary out” provision. These restrictions, including the added expense of the termination fees that may become payable by us in certain circumstances, might discourage a third party that has an interest in acquiring all or a significant part of the Company from considering or proposing that acquisition.

If the Merger is consummated, our shareholders, other than affiliates of Tadano, will not be able to participate in any further upside to our business.

If the Merger is consummated, our shareholders will receive $5.80 in cash per share of common stock owned by them without interest and subject to applicable tax withholding, other than shares owned by the Company, Tadano and Merger Sub, and other than affiliates of Tadano, our shareholders will not receive any equity interests of Tadano. As a result, if our business following the Merger performs well, our current shareholders will not receive any additional consideration for their shares of common stock and, other than affiliates of Tadano, will not receive any benefit from any future performance of our business following the Merger.

Item 2—Unregistered Sales of Equity Securities and Use of Proceeds.

The Company’s Credit Agreement with Amarillo National Bank ("Amarillo") directly restricts the Company’s ability to declare or pay dividends without Amarillo’s consent. In addition, pursuant to the Company’s Credit Agreement with Amarillo, the Company’s U.S.

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subsidiaries must maintain a debt service coverage ratio of at least 1.25:1.00 and a net worth for U.S. entities of at least $80 million, each as measured on the last date of each calendar year, beginning June 30, 2022.

 

ISSUER PURCHASES OF EQUITY SECURITIES

 

Period		(a) Total Number of Shares (or Units) Purchased				(b) Average Price Paid per Share (or Unit)				(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs				(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
January 1 - January 31, 2024			—			$	—				—			$	—
February 1 - February 28, 2024			—				—				—				—
March 1 - March 31, 2024			8,841				6.40				—				56,603
April 1 - April 30, 2024			2,130				6.51				—				11,366
May 1 - May 31, 2024			—				—				—				—
June 1 - June 30 - 2024			1,934				5.76				—				11,140
July 1 - July 31, 2024			1,309				4.04				—				5,288
August 1 - August 31, 2024			—				—				—				—
September 1 - September 30, 2024			—				—				—				—
			14,214			$	5.94								84,397

 

Item 3—Default Upon Senior Securities

 

None.

Item 4—Mine Safety Disclosures

Not applicable.

Item 5—Other Information

 

None.

 

Item 6—Exhibits

See the Exhibit Index set forth below for a list of exhibits included with this Quarterly Report on Form 10-Q.

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EXHIBIT INDEX

Exhibit Number			Exhibit Description
2.1†		Agreement and Plan of Merger, dated as of September 12, 2024, by and among Tadano Ltd., Lift SPC Inc. and Manitex International, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 12, 2024).
31.1*		Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification by the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104		Cover Page Interactive Data File-The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

 

* Filed herewith

** Furnished herewith

† The Company has omitted schedules and other similar attachments to such agreement pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish a copy of such omitted documents to the SEC upon request; provided, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedules or documents so furnished.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

November 7, 2024

		By:		/s/ MICHAEL COFFEY
				Michael Coffey
				Chief Executive Officer
				(Principal Executive Officer)

 

November 7, 2024

		By:		/s/ JOSEPH DOOLAN
				Joseph Doolan
				Chief Financial Officer (Principal Financial and Accounting Officer)

 

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