Veri-Tek International, Corp. Announces First Quarter 2008 Results
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BRIDGEVIEW, Ill., May 13, 2008 -- Veri-Tek International, Corp. (AMEX:VCC) , a leading provider of engineered lifting solutions including boom truck cranes, rough terrain forklifts and special mission oriented vehicles, today announced financial results for the first quarter ended March 31, 2008.
First Quarter Financial Highlights (Continuing Operations(1)):
-- Net income from continuing operations for the first quarter of 2008
was $0.5 million, or $0.05 per fully diluted share, compared to
$0.1 million or $0.01 per fully diluted share for the first quarter of
2007.
-- Current backlog increase of 14% from the end of December 31, 2007.
-- Revenues and gross profit for the first quarter of 2008 increased
approximately 2% compared to the first quarter of 2007 in the
challenging North American market.
-- Interest expense for the first quarter of 2008 compared to the first
quarter of 2007 declined $0.4 million reflecting the actions
implemented in 2007 to retire debt and lower interest rates.
-- Net income for the first quarter of 2008 was $0.7 million, or $0.07
per diluted share compared to a loss of $1.0 million, or $(0.12) per
diluted share for the first quarter of 2007.
First Quarter Operational Highlights (Continuing Operations (1)):
-- Received over 100 inquiries following our participation at Con Expo in
March 2008 in Las Vegas, spanning a wide range of our products,
including further upgrades to the Manitex 50-ton crane.
-- Executed new distribution initiatives to increase international market
presence, as evidenced by signed agreements with well-established
heavy equipment distributors in the Middle East and in Russia as well
as with Caterpillar's international rental program for certain Manitex
crane models. Management anticipates deliveries and financial
contributions from these initiatives beginning in the third quarter of
2008.
Financial Results
Results for the First Quarter Ending March 31, 2008
For the three months ended March 31, 2008, net sales were $23.5 million compared to $23.1 million in the three months ended March 31, 2007. Sales of Manitex crane products increased approximately four percent year-over-year while sales of material handling product were adversely impacted by the economic uncertainty in North American markets and delays in the receipt of anticipated military orders. The Company's first quarter 2008 gross profit was $4.3 million, or 18.1% gross margin, compared to $4.2 million, or 18.2% gross margin in the first quarter of 2007. The slight decrease in gross margin reflects increased margins of crane products from improved mix offset by a decrease in margin for the forklift/specialized carrier product line due to lower sales in North American markets, the negative impact of a stronger Canadian dollar and costs associated with the integration of the Noble product line, of approximately $0.2 million
"While certain areas within the North American capital equipment market remain under pressure, our crane business is performing in-line with our expectations," commented David Langevin, Chairman and Chief Executive Officer of Veri-Tek. "We have experienced a 14% growth in our backlog since December 31 2007, which reflects continued demand for our crane products and that our end markets, particularly energy, remain active. Progress has been made regarding our efforts to diversify our revenue and expand into growing international markets. We expect to see initial financial benefits in the third quarter this year from the recently announced agreements with leading international capital equipment dealers. In particular, the agreement announced with our Russian distributor positions us in one of the most rapidly growing regions across the globe."
Total operating expenses for the quarter ended March 31, 2008 were $3.7 million, compared to total operating expenses of $3.3 million in the same period last year. The increase is primarily related to the Company's participation in the Con Expo trade show and increased investment in research and development.
Net income from continuing operations for the three months ended March 31, 2008 was $0.5 million, or $0.05 per basic and diluted share (based on 9.8 million basic and 10.3 million diluted weighted average shares outstanding) compared to $0.1 million, or $0.01 per basic and diluted share (based on 7.9 and 8.5 million basic and diluted weighted average shares outstanding, respectively) for the first quarter of 2007.
EBITDA (2) for the three months ended March 31, 2008 was $1.1 million compared to $1.5 million in the same quarter of last year. The reduction in EBITDA arises from the lower operating income from continuing operations for the first quarter of 2008 largely accounted for by the increased expenditure on attendance at the Con Expo show.
The Company completed the quarter ended March 31, 2008 with $20.9 million in working capital and a current ratio (defined as current assets divided by current liabilities) of 2.3 to 1. Working capital increased in the quarter principally due to raw materials for increased crane production, work in process relating to a specialized carrier under construction and a small increase in finished goods inventory of crane product. Total outstanding debt increased to $26.3 million at March 31, 2008 from $25.0 million at December 31, 2007 as the company utilized its line of credit during the quarter. Shareholder's equity as of March 31, 2008 increased 1.8% to $31.2 million from $30.7 million as of December 31, 2007. See the financial tables that accompany this press release for a complete definition of working capital and current ratio.
Andrew Rooke, Veri-Tek President and Chief Operating Officer, commented, "The first quarter of 2008 has seen several challenges in our North American markets but the progress during the past year in reducing our debt and lowering our materials and operating costs have assisted us in meeting these. The growth of our business against the backdrop of the uncertainty in the markets we have served to date is evidence of the strength of our product lines and that we are gaining market share. We believe there are opportunities for us to continue to boost productivity and lower our sourcing costs that should help offset the trend of rising material costs. These initiatives coupled with our continued activities to achieve a global market presence should result in continued value creation and improved financial performance for the long-term."
(1) The financial data for all years presented reflects the former
Testing and Assembly Equipment segment as a discontinued operation.
(2) EBITDA is a non-GAAP (generally accepted accounting principles in the
United States of America) financial measure. This measure may be
different from non-GAAP financial measures used by other companies.
We encourage investors to review the section below entitled "Non-GAAP
Financial Measures."
Conference Call
Management will be hosting a conference call to review the quarterly
results at 4:30 PM, today, Tuesday, May 13. Anyone interested in
participating should call 800-762-9441 if calling within the United States
or 480-629-9041 if calling internationally. A replay will be available
until May 20, 2008, which can be accessed by dialing 800-406-7325 if
calling within the United States or 303-590-3030 if calling
internationally. Please use pass code 3875923 to access the replay. The
call will also be accompanied live by webcast over the Internet and
accessible at the company's corporate website at
