Veri-Tek International Corp. News
Veri-Tek International Corp. Announces 163% Increase in 2007 Revenues
BRIDGEVIEW, Ill.,
Fourth Quarter and Full Year Financial Highlights (Continuing Operations(1)):
— 163% net sales growth to $106.9 million for the full year 2007 from $40.7 million for the full year of 2006, driven by full year revenue contributions from Manitex and Manitex Liftking. Revenue for the fourth quarter of 2007 increased 32% to $27.3 million from $20.7 million for the same period of 2006. — For the full year 2007, net income from continuing operations was $2.1 million, or $0.25 per basic and $0.23 per diluted share for the full year 2007, as compared to $(0.5) million loss, or a loss of $(0.10) per basic and diluted share in the same period of 2006. For the fourth quarter of 2007, net income from continuing operations was $0.7 million, or $0.07 per basic and diluted share compared to a loss of $(0.4) million, or $(0.06) per basic and diluted share in the same period last year. — 440 basis point improvement in gross margin to 18.6% for the full year 2007 from 14.2% in the same period of 2006. — 278% increase in EBITDA(2) to $8.5 million for the full year 2007 from $2.2 million for the full year 2006. EBITDA for the three months ended December 31, 2007 was $2.0 million compared to $1.3 million in the same quarter of last year. — Reduced total indebtedness 32% to $25.0 million, as of December 31, 2007 from $37.0 million at December 31, 2006. — Reduced foreign currency losses to less than $0.1 million in the fourth quarter through initiating currency hedging program in early September 2007.
Fourth Quarter and Full Year Operational Highlights (Continuing Operations(1)):
— Acquired Noble forklift product line in the third quarter, which the Company commenced integrating with Liftking. — Improved manufacturing efficiencies and throughput at Georgetown, TX facility contributing to a year-over-year labor efficiency improvement of approximately $0.4 million. — Launched sourcing initiatives to reduce cost of goods sold. — Completed $9.0 million (gross) equity raise with proceeds used to retire debt. — Successful second quarter launch of the company's highest-capacity (50-ton) boom trucks met with orders for over 70 units. — Identified international opportunities to diversify and drive future growth; announcements of international distribution agreements anticipated in near term. — Completed sale and closure of Testing and Assembly Equipment segment for $1.1 million with proceeds used to retire debt. (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.\"
Financial Results
Net sales for the year ended
Gross profit was
Total operating expenses for the year ended
During the year ended
Net income from continuing operations for the year ended
"2007 was an exciting year of transformation for our company," commented
"Another important initiative was our hedging program which we implemented in
Results for the Fourth Quarter Ending
For the three months ended
Total operating expenses for the quarter ended
Net income from continuing operations for the three months ended
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About Veri-Tek International, Corp.
Veri-Tek International, Corp. is a leading provider of engineered lifting solutions including boom truck cranes, rough terrain forklifts and special mission oriented vehicles. Our Manitex subsidiary manufactures and markets a comprehensive line of boom trucks and sign cranes. Our boom trucks and crane products are primarily used in industrial projects, energy exploration and infrastructure development, including roads, bridges, and commercial construction. The Manitex Liftking subsidiary, which includes the Noble forklift product line, manufactures and sells a complete line of rough terrain forklifts and special mission oriented vehicles, as well as other specialized carriers, heavy material handling transporters and steel mill equipment. Manitex Liftking's rough terrain forklifts are used in both commercial and military applications.
Forward-Looking Statement
Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995: This release contains statements that are forward-looking in nature which express the beliefs and expectations of management including statements regarding the Company's expected results of operations or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance; and statements of management's goals and objectives and other similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "we believe," "we intend," "may," "will," "should," "could," and similar expressions. Such statements are based on current plans, estimates and expectations and involve a number of known and unknown risks, uncertainties and other factors that could cause the Company's future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. These factors and additional information are discussed in the Company's filings with the Securities and Exchange Commission and statements in this release should be evaluated in light of these important factors. Although we believe that these statements are based upon reasonable assumptions, we cannot guarantee future results. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
Company Contact Veri-Tek International, Corp. Hayden Communications David Langevin Peter Seltzberg or Brett Maas Chairman and Chief Executive Officer Investor Relations (708) 237-2060 (646) 415-8972 djlangevin@manitex.com peter@haydenir.com VERI-TEK INTERNATIONAL CORP. CONSOLIDATED BALANCE SHEET (In thousands, except per share data) As of December 31, 2007 2006 ASSETS Current assets Cash $569 $615 Trade receivables (net) 16,548 14,137 Receivables from related parties - 1,744 Other receivables 226 - Inventory (net) 16,048 16,830 Deferred tax asset 715 893 Prepaid expense and other 762 465 Current assets of discontinued operations 172 1,430 Total current assets 35,040 36,114 Total fixed assets (net) 5,778 6,117 Receivable from related parties - 2,978 Intangible assets (net) 21,352 21,283 Deferred tax asset 3,940 3,747 Goodwill 14,065 13,305 Assets of discontinued operations - 300 Total assets $80,175 $83,844 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable — short term $889 $515 Current portion of capital lease obligations 281 356 Accounts payables 9,543 14,181 Accrued expenses 4,408 2,965 Other current liabilities 486 732 Current liabilities of discontinued operations 265 572 Total current liabilities 15,872 19,321 Long-term liabilities Line of credit 14,191 14,121 Deferred tax liability 4,655 4,640 Notes payable 5,211 17,303 Capital lease obligations 4,422 4,685 Deferred gain on sale of building 3,930 4,310 Other long-term liabilities 184 - Total long-term liabilities 32,593 45,059 Total liabilities $48,465 $64,380 Commitments and contingencies Minority interest 1,024 1,024 Shareholders' equity Common Stock — no par value, Authorized, 20,000,000 shares authorized, issued and outstanding, 9,809,340 and 7,859,875 at December 31, 2007 and December 31, 2006, respectively 41,915 31,274 Warrants 1,788 2,272 Paid in capital 72 - Accumulated deficit (14,094) (15,050) Accumulated other comprehensive income (loss) 1,026 (56) Sub-total 30,707 18,440 Less: Unearned stock based compensation (21) - Total shareholders' equity 30,686 18,440 Total liabilities and shareholders' equity $80,175 $83,844 VERI-TEK INTERNATIONAL CORP. CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share data) Year Ended Three Months Ended December 31, December 31, 2007 2006 2007 2006 Net revenues $106,946 $40,676 $27,257 $20,655 Cost of sales 87,027 34,903 22,362 17,643 Gross profit 19,919 5,773 4,895 3,012 Operating expenses Research and development costs 808 206 229 104 Selling, general and administrative expense, including corporate expense of $3,756; and $1,384 for 2007 and 2006 and $1,029 and $485 for the three months 2007 and 2006,respectively 12,758 4,408 3,205 2,651 Total operating Expenses 13,566 4,614 3,434 2,755 Income from continuing operations 6,353 1,159 1,461 257 Other income expense Interest income 6 39 - 3 Interest (expense) (3,438) (1,969) (642) (936) Foreign currency transaction losses (751) - (89) - Other income expense 119 (15) (28) (15) Total other expense (4,064) (1,945) (759) (948) Earnings (loss) from continuing operations before income taxes 2,289 (786) 702 (691) Provision for taxes on income (benefit) 163 (239) 16 (288) Net earnings (loss) from continuing operations 2,126 (547) 686 (403) Discontinued operations: Loss from discontinued operations, net of income taxes (benefit) of $0, and $(1,087) for year ended 2007, and 2006 and $0 and $(421) for the three months ended 2007 and 2006, respectively (1,122) (8,342) 40 (7,136) Loss on sale or closure of discontinued operations, net of $0 income tax (48) - - - Net earning (loss) $956 $(8,889) $726 $(7,539) Basic earning (loss) per share: Earnings (loss) from continuing operations $0.25 $(0.10) $0.07 $(0.06) Loss from discontinued operations, net of income taxes $(0.13) $(1.56) $ - $(1.10) Loss on sales or closure of discontinued operations, net of income taxes. $(0.01) $ - $ - $ - Net earnings (loss) $0.11 $(1.66) $0.07 $(1.16) Diluted earning (loss) per share: Earnings (loss) from continuing operations $0.23 $(0.10) $0.07 $(0.06) Loss from discontinued operations, net of income taxes $(0.12) $(1.56) $ - $(1.10) Loss on sales or closure of discontinued operations, net of income taxes $(0.01) - $ - $ - Net earnings (loss) $0.10 $(1.66) $0.07 $(1.16) Shares used to calculate earnings per share: Basic 8,557,095 5,346,225 9,805,913 6,514,766 Diluted 9,214,407 5,346,225 10,374,586 6,514,766 VERI-TEK INTERNATIONAL CORP. CONSOLIDATED STATEMENT OF CASH FLOWS (Thousands of Dollars) For the years ended December 31, 2007 2006 2005 Cash flows from operating activities: Net income (loss) $956 $(8,889) $(2,252) Adjustments to reconcile net income (loss) to cash provided by operating activities: Depreciation and amortization 2,108 1,079 - Provisions for customer allowances (30) 82 - Impairment of long lived assets - discontinued operations - 5,932 - Gain on disposal of assets (10) - - Deferred income taxes - (1,432) (1,084) Inventory reserves 95 - - Reserves for uncertain tax positions 99 - - Stock based deferred compensation 118 - - Changes in operating assets and liabilities: (Increase) decrease in accounts receivable (1,776) (1,476) - (Increase) decrease in accounts receivable - related party (41) 230 - (Increase) decrease in inventory 3,399 149 - (Increase) decrease in prepaid expenses (238) 184 - (Increase) decrease in other assets - 36 - Increase (decrease) in accounts payable (4,703) 929 - Increase (decrease) in accrued expense 1,399 (987) - Increase (decrease) in other current liabilities (356) 139 - Discontinued operations- cash provided by (used) for operating activities 120 4,469 (1,007) Net cash provided by (used) for operating activities 1,140 445 (4,343) Cash flows from investing activities: Proceeds from sale of fixed assets 16 - - Purchase of property and equipment (296) (121) - Acquisition of business, net of cash acquired - (3,330) - Proceeds from the sale of assets of discontinued operations 1,131 - - Discontinued operations - cash used for investing activities - (499) (1,689) Net cash provided by (used) for investing activities 851 (3,950) (1,689) Cash flows from financing activities: Borrowing on revolving credit facility 1,253 - - Repayment on revolving credit facility (1,411) (2,035) (7,981) Note payments (11,718) (6,000) - Proceeds from issuance of stock 8,769 8,866 17,250 Proceeds from issuance of warrants 231 2,272 - Proceeds from the exercise of warrants 1,875 - - Payment for expenses related to stock offerings (785) (840) (2,193) Repayment on capital lease obligations (338) (216) - Discontinued operations - cash provided by financing activities - - 975 Net cash provided by (used) for financing activities (2,124) 2,047 8,051 Effect of exchange rate change on cash 87 48 - Net increase (decrease) in cash and cash equivalents (133) (1,458) 2,019 Cash and cash equivalents at the beginning of the year 615 2,025 6 Cash and cash equivalents at end of year $569 $615 $2,025 Supplemental disclosure of cash flow information: Cash paid during the year for Interest $3,467 $1,713 $54 Income taxes $157 $631 $ -
Non-GAAP Financial Measures
This press release includes the following non-GAAP financial measure: "EBITDA" (earnings before interest, tax, depreciation and amortization). This non-GAAP term, as defined by the Company, may not be comparable to similarly titled measures used by other companies. EBITDA is not a measure of financial performance under generally accepted accounting principles. Items excluded from EBITDA are significant components in understanding and assessing financial performance. EBITDA should not be considered in isolation or as a substitute for net earnings, operating income and other consolidated earnings data prepared in accordance with GAAP or as a measure of our profitability. A reconciliation of net income to EBITDA is provided below.
The Company's management believes that EBITDA and EBITDA as a percentage of sales represent key operating metrics for its business. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is a key indicator used by management to evaluate operating performance. While EBITDA is not intended to replace any presentation included in our consolidated financial statements under generally accepted accounting principles (GAAP) and should not be considered an alternative to operating performance or an alternative to cash flow as a measure of liquidity, we believe this measure is useful to investors in assessing our capital expenditure and working capital requirements. This calculation may differ in method of calculation from similarly titled measures used by other companies. A reconciliation of EBITDA to GAAP financial measures for the three month periods and the years ended
Reconciliation of GAAP Net Income (Loss) from Continuing Operations to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) from Continuing Operations (in thousands)
Three Months Ended Year Ended December 31, December 31, December 31, December 31, 2007 2006 2007 2006 Net income (loss) from continuing operations 686 (403) 2,126 (547) Income tax (benefit) 16 (288) 163 (239) Interest income - (3) (6) (39) Interest expense 642 936 3,438 1,969 Foreign currency transaction losses 89 - 751 - Other income 28 15 (119) 15 Depreciation & Amortization 501 1,037 2,108 1,079 Earnings before interest, taxes, depreciation and amortization (EBITDA) 1,962 1,294 8,461 2,238 EBITDA % to sales 7.2% 6.3% 7.9% 5.5%
In an effort to provide investors with additional information regarding the Company's results, Veri-Tek refers to various non-GAAP (U.S. generally accepted accounting principles) financial measures which management believes provides useful information to investors. These measures may not be comparable to similarly titled measures being disclosed by other companies. In addition, the Company believes that non-GAAP financial measures should be considered in addition to, and not in lieu of, GAAP financial measures.
Veri-Tek believes that this information is useful to understanding its operating results and the ongoing performance of its underlying businesses. Management of Veri-Tek uses these non -GAAP financial measures to establish internal budgets and targets and to evaluate the Company's financial performance against such budgets and targets.
The amounts described below are un-audited, are reported in thousands of U.S. dollars, and are as of or for the period ended
Backlog is defined as the value of firm orders that are expected to be filled within one year. The disclosure of backlog aids in the analysis of the Company's customers' demand for product as well as the ability of the Company to meet that demand. The backlog of Veri-Tek's business is not necessarily indicative of sales to be recognized in a specified future period.
December 31, 2007 December 31, 2006 Consolidated Backlog $45.1 million $59.0 million Current Ratio is calculated by dividing current assets by current liabilities. December 31, 2007 December 31, 2006 Current Assets $35,040 $36,114 Current Liabilities $15,872 $19,321 Current Ratio 2.2 1.9
Debt is calculated using the Condensed Consolidated Balance Sheet amounts for current and long term portion of long term debt, capital lease obligations, notes payable and lines of credit.
December 31, 2007 December 31, 2006 Current portion of long term debt $889 $515 Current portion of capital lease obligations 281 356 Lines of credit 14,191 14,121 Notes payable 5,211 17,303 Capital lease obligations 4,422 4,685 Debt $24,994 $36,980 Gross Margin is defined as the ratio of Gross Profit to Net Sales
Working capital is calculated as total current assets less total current liabilities
December 31, 2007 December 31, 2006 Total Current Assets $35,040 $36,114 Less: Total Current Liabilities $15,872 $19,321 Working Capital $19,168 $16,793
SOURCE Veri-Tek International Corp.
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