David Langevin - Chairman and CEO Steve Kiefer - President, North America.

Matt Koranda - ROTH Capital Partners Jordan Bender - Seaport Global Charles Neuhauser - Mainwall Investment Management FL Kirby - Morgan Stanley Lenny Dunn - Mutual Trust Company of America.

Good day, and welcome to the Manitex International Conference Call, Third Quarter 2017 and Shareholder Update. Today's conference is being recorded. At this time, I would like to turn the conference over to David Langevin, Chairman and CEO. Please go ahead, sir..

Thank you, Glen. Good afternoon, ladies and gentlemen, and thank you for your interest in Manitex International. On the call today with me today is Steve Kiefer, President and Chief Operating Officer. Steve is in Europe today and will be available to assist with any questions.

Please refer to our Safe Harbor statement and our release which we ask that you review the statement and also refer our SEC filings for full year guidance and the many risk factors associated with our company. Also please see our company website or our release for replay instructions on this call, which will be available until February 13, 2018.

I will begin with a brief overview after which we will open it up for questions. First, I would like to express our appreciation to our many shareholders and all the other stakeholders in our company for the patience exhibited by everyone over the last three months during this investigation period.

A special mention needs to be made to the accountants, lawyers and their support members for the many hours they put in to expedite this review and the many hours they spent away from family during their holiday periods.

As reported today, the investigation is substantially complete and we are able to report our financials for the third quarter of 2017.

To remind everyone we reported on November 6, 2017 that we were restating certain previously issued financial statements resulting from the change in accounting for a sale of a net of 29 cranes with a total crane value of approximately $12 million. The regional transaction all occurring in the first quarter of 2016.

The investigation confirmed that we estimated would happen in our early November release, which was that the transaction qualified as a variable interest entity, and more importantly that there were no other transactions of this nature prevalent in our operations.

We can also confirm another estimate from our November release, which is that all the related cranes were sold, all the financing for this equipment were paid-off, all by the end of 2017. With the release of these third quarter financials, everyone involved will now be working to file all the restated SEC reports starting with the 2016 10-K.

And as could be expected from an announcement involving a restatement of prior periods, we received an informal inquiry from the SEC concerning the restatement only and we are complying completely with this request.

To conclude on this matter and hopefully to put a lot of folks mind to rest on this subject, we have to remember we make cranes, all the cranes involved in this transaction were accounted for, all the money involved with renting or selling of these cranes were accounted for and all the cranes were eventually sold to our very fine dealer customers.

Finally, we were able to complete this work without disrupting our organization, which allowed our operating team to concentrate on growing our business during this long overdue expansion. So let's talk about current business. Our markets are expanding in every geographical area where we participate.

A solid indicator of this is our backlog was up 22% from the third quarter to the end of the year, and even more significantly was up 32% in the first months of this New Year from the end of the year. Yes, that was up in one month. However, we do not want expectations to get off the charts, but it certainly was a good start to 2018.

We reported today fourth quarter 2017 sales of $64.5 million, which is an approximately 16% increase over the third quarter. With the disclosure today of our fourth quarter sales, we can now frame 2,000 sales results and recognize the improvement. In 2016, we had approximately $175 million in sales with minimal adjusted EBITDA.

Adding up the four quarters of 2017, we recorded annual sales of approximately $210 million and adjusted EBITDA we estimate in the approximate range of $15 million to $16 million. Further if we annualize the fourth quarter sales, our run rate would be in excess of $250 million with annualized adjusted EBITDA we believe now crossing over into the 20s.

Obviously with our accelerating backlog, we will be working on further increasing of our production levels in 2018. In summary, our balance sheet has greatly improved over the last three years with more opportunities in front of us to apply proceeds from surplus asset sales and excess cash flow to further reduce our debt.

Our markets are expanding, and we are well positioned with our products, all of which allows us to be optimistic as we look forward to the prospects of 2018. And with that overview, Glen, I would like to now welcome any questions..

Thank you. [Operator Instructions] And we'll go first to Matt Koranda with Roth Capital..

Het, Dave..

Good afternoon, Matt..

[Indiscernible] start off with timing of when you think maybe you guys will be able to release the revised 10-K and quarterly filings, any sense for when that could be?.

Well, I know that everyone is working as quickly as possible. I would guess that we'll try to get everything filed by the due dates in March.

And I'm not positive, but I think they're trying to file everything at one time, with that might change as we go, but I would say you have the 10-K from last year first three quarters of this year, again I know all the numbers are done, but now they have to go through the changes in the reports.

But I would say I hope by the middle of March, was kind of a dead - not maybe I would look at it..

Okay, got it.

And then in terms of - I mean, I know this may not be possible to talk a great deal about it, but in terms of the informal SEC inquiry, could you give us a little more color on just the nature of sort of what they're looking at and then just the timeline of how that proceeds?.

Well, that's obviously very difficult, I mean, it's an informal inquiry, I can tell you what the letter said it was the informal inquiry, which I guess is lesser rigorous than a formal inquiry.

So it - and it just referred to only the restatement, which again is what you would expect, but since the work is done and finished on the - from the audit committee and auditors standpoint I would hope that it would not be that rigorous on the SEC.

Because again as I stated, every crane was - every crane has been accounted for, every crane has - and I am not just talking about involving the investigation, but every other crane has been accounted for and every other crane has been paid and every other crane is.

So we don't have anything that would require a whole lot of work at this point, I don't believe, but again that's not up to me..

Okay.

I know there's no sort of concern that that could up any of the restatements, the formal filings of the restatements?.

We would not be able to release these numbers if everybody hasn't signed off on it..

Okay, got it. So, I'll leave that stuff for now. Now let's talk about the release..

Yes..

So, in terms of Q4 results, I just wanted to confirm so the preannounced revenue figures and your kind of highlight of overall EBITDA for the year suggests that Q4 EBITDA was in probably the $5 million to $6 million range.

And so you're sort of pushing up into the 9% EBITDA margin range, is that the fair way to think about how Q4 proceeded?.

Your numbers work..

Okay, got it. And then in terms of the backlog, I just wanted to confirm, the January calculation kind of results in a pretty large number for bookings within the month.

So I am sort of backing into something depending on what you delivered in January somewhere around the $40 million level for bookings, is that a fair number to sort of back into or is there - are there sort of things that would bring it down a little bit lower?.

I guess I have to - January is - I'll state it this way. January is the inventory month, and in Europe January is still tail-end of a holiday period. So you don't have a particularly strong - usually don't start the quarter or the year with a typically strong number in January.

So I would think that your sales accelerate as we go through January, February, March historically that's what's happened and you also think as I said the take inventory in the first week of January, about all of our plants around the world and again the - some of the European plants still have holiday in the first week plus inventory.

So you always start out a little sluggish in January. So I think that while a month was phenomenal, it might - we're actually down a little bit the bookings for January, and I don't know Steve, I don't want to give up, we have given enough information. So….

Got it, that's fair. I mean, I was just - I guess, I was just taking my Q1….

Yes, you just taken annualized, saying okay, divided by 12 and then is that kind of right..

And essentially that's not the right way to think about there seasonality..

Yes, you just have to kind of think about January people come back from the holidays, and all that kind of stuff. So just start slow always seems that way forever..

Okay. So then if I take sort of the results in Q4 the run rate and apply that margin to 2018 is that the right way to start thinking about sort of the consistency of the EBITDA margins through 2018.

What's in the backlog, I guess, that gives you visibility into the margin profile of the units you are delivering and gives you confidence in sort of hitting kind of at that run rate that you hit in Q4..

Well, Steve, I'll speak for Steve because it's way too modest, but then Steve has been doing a very good job of fighting the margin improvement as we go. Because I'm sure just in your business and everybody else's business whatever order they had last time, they want order at the same time, but obviously that's not the case.

So we've been pushing back on the discounts since we've been going through the re-up of new orders. New orders are coming in very strong, I think everybody knows that. And so margins have improved as we've placed those into backlog..

Okay. Any sense for mix between straight mass versus knuckle boom in the backlog..

Our backlog is still skewed more towards the straight mass, because there usually longer lead times on the components. However, Europe and South America which is where - the main areas where PM participates primarily are Europe, South America, North America.

And especially Europe as well as South America have shown some very strong growth over the last couple of months. So their backlogs are at levels that they haven't seen in many, many years..

Got it. And update on knuckle boom sell-in within North America. I mean, how is that tracking relative to your expectations? I know last time….

It's continuing to - it continue to expand we continue to Steve keeps - and his organization keeps adding more dealers. But obviously from a penetration standpoint it's the greatest opportunity for us going forward.

As we all know that knuckle crane market is an expanding growing multi-billion market of which we have a far less than 5% market share, whereas on the stick cranes in the United States we have a very significant market share.

So it's something we're really concerning, which is part of the reason why Steve is getting a lot of freak and fire miles to Europe..

Okay. Maybe just one last on the balance sheet, could you just help us understand the - it look like a VIE note payable on there that sort of drove overall debt higher relative to last quarter. Is that….

Exactly right. So what happened was you're seeing the third quarter numbers. And if you remember we said that the total VIE was approximately $12 million. That include the implied debt that was associated with that. Even though we had not signed on those loans, those were implied. And when you enter into a restatement like this.

So we had $12 million of assets, new assets and $12 million of new debt. And at the end of the third quarter, I believe it was $6.7 million left to that, and that was retired in the fourth quarter. So you're right, that debt changed primarily almost exclusively from the VIE accounting changes..

Got it okay, that clears that up. All right, I'll leave it there. Thanks, Dave..

Thanks, Matt. Thank you very much..

And we'll go next to Mike Shlisky with Seaport Global..

Good afternoon, it's Jordan Bender for Mike today. I was wondering with the order and backlog growth in 2017 accelerating like it did.

Are you guys looking at tougher comps in 2018 or how do you look at the growth going into 2018 compared to 2017?.

Well, the comps for the first couple of quarters of 2017 are easy. Because we started in 2017 with roughly $40 million in sales in the first quarter. So not really at run rate that's comparable to where we are now. But I'm sure as we go through the year.

But again we're all hopeful that because of the work that we've done the reduction that we've made the margins that have improved, that we will be not having issue with comparables on a quarter-to-quarter basis..

Okay. And then I was wondering how the pricing has been on some of your most recently booked units..

Steve, you wanted to discuss a little bit, because I know you have been working a lot on pricing..

Yes, pricing has been favorable Mike, versus last year and with all the deals that we've booked in the fourth quarter and going into first quarter there is sequential year-over-year pricing improvements consistent with overall the general market activity as well.

And so the price realization is moving forward as you would expect in this point in the cycle..

Okay, Jordon will appreciate it..

And then one more here, can you give us an update on the order performance for the new A62, AWP and related products that you announced a few months back, just kind of wondering if you guys are still targeting that $20 million in sales for 2018?.

Good question, Jordan, I'm sure the Steve is anxious about that question because he is very excited about to introduction of those products. Go ahead, Steve..

Yes, absolutely, there is a number of products Jordan, as we announced last year the A62, the trolley boom, the 2085, the 22101S all those products are performing well in the marketplace. We've placed initial orders with our dealers and we have received a number of replacement orders and stock orders as reflected in our backlog.

Our backlog overall is quite stratified between Europe and the knuckle booms as well as Manitex on straight mass. However the anticipated improvements specific to your question about growth in the new product are right on track..

Appreciate it..

It's exciting stuff, the market is receiving these products well, it's very timely within the stage of the economy and for the need for these type of products to support the various residential and nonresidential construction of infrastructure.

And we think overall we're in the right place with the right products to support market growth and the backlog is rewarding those efforts accordingly..

Okay, I'll pass it on. Thanks, guys..

Thanks, Jordan..

And we'll go next to Charles Neuhauser with Mainwall Investment Management..

Good afternoon. Back on the EBITDA margin question, the company is somewhat different than it was when times were good in the past specifically with the potential for the knuckle boom business in North America to keep expanding as you add dealers you've divested a couple of things.

I can go back and look at what the margins were when times were good in the past, but is it - I mean, should things be markedly different now, I mean, I gather you've rationalized the business in a way that you would consider to be better mix of businesses than you had in the past.

And so should the margins be higher than they had than or how should I look at that?.

So it's difficult because of you're looking at the third quarter of last year, so you don't - we started in the first quarter a slow number then moved it up in the second, moved it up in the third which you should Charles start to see some deviation from what we've had historically.

Because as we started historically we were - and we had the information recorded in public. So you could see that the divisions and subsidiaries that we're selling off, while they had some sales associated with them several hundred million in total, they had very little margin. And so we've been saying all along that the real margin was in our cranes.

So you're absolutely right, as we go through this expansion, you should see - we've always said we wanted to get to 10% EBITDA, you should see us reach there and go beyond there as we mature in this expansion over the next couple of years..

Right, great. Thank you..

And we didn't see that historically. So you should see the difference this time. Thanks Charles, thanks for your question..

[Operator Instructions] We will go next to FL Kirby with Morgan Stanley..

FL Kirby:.

.:.

Hi, FL..

I noticed late Friday, that there was an announcement, day after the close, that you had a resignation with the - I believe CFO?.

That's correct..

And what could that relate to, so is that part of the issue with the recalculation of the 2016 first quarter, or maybe you could comment on that and then I have….

FL it's a tough one, because the obviously whenever you have these situations, there is complexities and a lot of things involved and I feel very uncomfortable trying to discuss that at an open area, on open call. So I really would rather pass on that one, I apologize FL, but it is a difficult one..

Okay, I guess we can use our imaginations into our conclusion, but Steve was touching on and I think there was a comment that you made that the markets are expanding and the prospects are looking good, is this a European thing, is it domestic or a combination, can you comment a little bit more on that?.

Sure, of course. So the European markets, after 2009 or after 2008, I guess, they never had the expansion because obviously they didn't have the oil and gas expansion that we had principally in the U.S. after 2009, because you've heard me say many times and the 2010, 2011, 2012 period, if we didn't have oil and gas, we didn't anything.

And fortunately a lot of was in equipment business participated in that some the very largest companies to the smaller ones like us. But Europe didn't' have that expansion, so Europe has been down in the doldrums for a long, long time.

So when I said that their backlogs are at levels that they haven't seen in years, I mean, like 2008, so it's a long time.

And so the people that - people in the equipment business that have survived and prospered during this time, obviously a lot of people have left the markets, but now that equipment that they were purchasing they had good periods 2006, 2007, and 2008.

So the people that were buying during that 2006, 2007, 2008 period, just have a natural replacement cycle, plus while their growth levels are not off the charts in Europe as we all know, positive growth levels is very positive for them.

So I would say that Europe has expanded, South America which we have a good market share down there and certain countries is very commodity oriented, the commodities are doing much better. So the principal areas where we are participating in growth is Europe, South America and then of course North America..

Is the energy business making a turnaround for you, and are you still fulfilling orders like you did in the past, or is it - I know you went into housing construction or infrastructure, is there a focus going back to the energy sector because it's growing again?.

Yes, certainly, fortunately the energy sector is as we all know especially in Texas where we have a big presence with our facility down there and some very fine dealers down there, as you know, we sell primarily through dealers.

So the energy business is restoring itself again as we all know because of the cost reductions, that they have gone through and the fact that oil prices of course are much higher off the bottom, with still probably some room to go over the next couple of years.

But for us, one point in time in the 2010, 2011, 2012 period, where we didn't have PM, we have very high concentration in the energy side and we reported that, so we told our shareholders that we had a very high concentration in energy. And that includes utilities and other parts of the energy equation.

But we - fortunately we have that benefit still, so that's improving. So obviously part of our crane business, but with PM being 50% of our business now, that 50% that does not have that much exposure to the energy side, so that really diversifies our end markets and diversifies our products.

So we're not so vulnerable to the volatility of the energy world. So to answer your question we're enjoying some nice orders now in the energy side that certainly participating in our growth, but it's not a huge part of our business anymore which is good, because it allows us the diversification and better growth..

Super. Okay, thank you..

Thanks, FL..

And we'll go next to Lenny Dunn with Mutual Trust Company of America..

Hi. Third quarter is clearly understood, and you're pleased [ph] about January. But you have to be pretty much know what you did in the fourth quarter and without pre-announcing can you give us a little color about the fourth quarter quickly the balance sheet was quite up from what you said..

Yes, as you mentioned we reduced some further debt in the fourth quarter on our balance sheet. We retired the rest of the implied debt from the transaction in the fourth quarter. We had good sales in the fourth quarter, I don't have - believe it or not I don't have all the numbers.

I expect improvement in the fourth quarter over the third, but we finished - we announced on Friday that we were doing the third. And literally they were finishing the work on Friday. So that meant that we pushed all this through a lot over the weekend.

And so I'm just not prepared to comment a lot on the fourth quarter other than I expect it to improve..

And also clearly you had noted the amount of professional fees associated with all this restatement. Will that all be expensed by the end of the fourth quarter or how do you plan to….

What I expect is that that we would have significant amount of it expensed by the end of the fourth quarter. We'll have some obviously into January, but it certainly is primarily behind us at this point..

Okay.

Would you be allocating some of the expenses to the various quarters that you're restating?.

I think it's expensed in the period in which it's incurred that would be the fourth quarter as appose to spreading it out I believe it's a period cost expense in the period in which it's incurred..

Okay. It looks like this has all turned around, but to get a clean picture, we're almost going to have to wait until you….

I think 2018 is going to - what I'm trying to setup is 2018 to be clean. We get all this as much as we can behind us in 2017.

We took some unusual adjustments in the third quarter I'm not aware of anything in the fourth other than what you've identified already, which will be we'll have some expenses related to accounts and lawyers in the fourth quarter. But it just start to diminish as we get into the first quarter..

Thank you. [Operator Instructions]. And there are no other questions at this time. I'd like to turn the conference back to our speakers for any closing remarks..

Thanks, Glen. Thanks everyone for your patience and understanding. And we look forward to very shortly getting to the end of the year and into what we hope will be a good 2018. Thanks again..

Thank you everyone. That does conclude today's conference. We thank you for your participation. You may now disconnect..