Exceeds revised revenue guidance of $105 million BRIDGEVIEW, Ill.,
March 27 /PRNewswire-FirstCall/ -- 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 fourth quarter and full year ended December 31, 2007. 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 December
31, 2007 increased to $106.9 million, up $66.3 million, or 163.0%,
from $40.7 million for the same period in 2006. The revenue
increase is primarily the result of having a full year of Manitex
and Manitex Liftking's results in the current year and only two
quarters of Manitex and one month of Manitex Liftking's results in
the prior year. On a pro-forma basis, assuming Manitex and Manitex
Liftking had been acquired on January 1, 2006, the company's
revenue was approximately $106 million in 2007 compared to $89
million in 2006, an increase of 19%. Gross profit was $19.9
million, or 18.6% gross profit margin, for the year ended December
31, 2007 compared to gross profit of $5.8 million or 14.2% gross
profit margin for the full year 2006, an improvement of 440 basis
points. The Company's gross profit was favorably impacted in 2007
by product mix, a 2007 price increase and the benefit of sourcing
materials from lower cost countries. The favorable mix is the
result of an increase in the sales of cranes with higher lifting
capacity, particularly the 45-ton crane which was introduced in the
second quarter of 2006 and the 50-ton crane which was introduced in
the second quarter 2007. The favorable product mix was partially
offset by unfavorable Canadian Dollar/U.S. Dollar exchange rates.
Total operating expenses for the year ended December 31, 2007 were
$13.6 million, compared to total operating expenses of $4.6 million
last year. The increase is primarily the result of including
Manitex Liftking in 2007 for a full year compared to one month in
the prior year and of having a full year of Manitex's expense in
the current year and only two quarters in the prior year. Included
in the operating expenses are costs associated with Sarbanes-Oxley
compliance of approximately $0.5 million, and increased research
and development costs, which was driven by U.S. product line
expansion and product adaptation for anticipated international
demand for Manitex products. During the year ended December 31,
2007, the Company generated $8.5 million of EBITDA, or 7.9% of
sales, compared with $2.2 million of EBITDA, or 5.5% of sales for
the same period last year. A reconciliation of GAAP net income to
EBITDA is provided in the financial tables that accompany this
release. Net income from continuing operations for the year ended
December 31, 2007 was $2.1 million or $0.25 per basic and $0.23 per
diluted share, compared to a net loss from continuing operations of
$(0.5) million, or $(0.10) loss per basic and diluted share, for
the same period in 2006. Net income for the year ended December 31,
2007 was $1.0 million, or $0.11 per basic and $0.10 per diluted
share (based on 8.6 million basic and 9.2 million diluted weighted
average common shares outstanding) compared to net loss of ($8.9)
million or ($1.66) per basic and diluted share (based on 5.3
million basic and diluted weighted average common shares
outstanding) in the same period last year. Foreign currency
transaction losses from the Canadian-US dollar exchange rates
negatively impacted net results by approximately $(0.8) million for
the year ended December 31, 2007. "2007 was an exciting year of
transformation for our company," commented David Langevin, Chairman
and Chief Executive Officer of Veri-Tek. "Our financial performance
showed marked improvement as we took steps to refocus our business
exclusively on the manufacture of specialized lifting equipment,
strengthen our balance sheet and key ratios, and streamline our
operations. We were extremely gratified to see that our sales
objectives were met, and particularly with the continued strength
in our Manitex boom truck product line, highlighted by over 70
orders received during the year for our new 50-ton crane, which we
introduced in the second quarter of the year. Our gross profit
margin benefited from the favorable product mix shift, as both the
50-ton and the 45-ton cranes generate a higher gross margin than
our other boom trucks." Mr. Langevin concluded, "Decisions we made
to strengthen the company from both operational and financial
perspectives in the past 18 months should continue to serve us well
as we implement our business plan through 2008 and beyond. In 2007,
we achieved healthy market share gains for our products, expanded
our sales by over 30% year over year, and we did so profitably. Our
goal in 2008 will be to continue to expand our market share in our
primary North American markets and simultaneously expand our reach
through international distribution partnerships to penetrate key
international markets. We believe that our product portfolio is in
high demand in the stronger international markets which bodes well
for our future growth and we also expect to pursue accretive
acquisitions to boost our earnings per share and build long-term
shareholder value." Andrew Rooke, Veri-Tek President and Chief
Operating Officer, commented, "Throughout the year, we continued to
pursue initiatives to strengthen our operations and improve our
business processes, and we are very pleased with the progress that
we've made thus far in our transformation. We have seen effects of
efficiency gains in our margins, and are committed to continued
improvements through 2008 and beyond. Having begun to integrate
Noble forklift into our Liftking operations, we have seen a
positive impact on the Noble backlog, and are poised to fill the
pent-up demand for Noble products. We have made initial
manufacturing changes within our Georgetown, Texas facility, which
increased its capacity, productivity and product quality. Equally
important are the measures taken to enhance our supply chain which
has provided us with cost savings and helped offset materials cost
increases, moved our offshore sourcing forward and added new
vendors for additional cost savings and flexibility. We expect
these moves, and others that we plan to implement as we move
through 2008, to further increase our operational efficiencies and
drive our operating profit margins higher, which are major
components of our long-term growth strategy." "Another important
initiative was our hedging program which we implemented in
September 2007 in response to large currency losses we incurred in
the second quarter of 2007. With the Canadian dollar continuing to
strengthen against the U.S. dollar, this program resulted in our
net currency loss for the quarter ended December 31, 2007 being
less than $0.1 million," concluded Mr. Rooke. Results for the
Fourth Quarter Ending December 31, 2007 For the three months ended
December 31, 2007 net sales were up 32% to $27.3 million from $20.7
million in the year-ago period. The Company's gross profit was $4.9
million, or 18.0% gross margin, compared to $3.0 million, or 14.6%
gross margin in the same period last year. The increase in gross
margin reflects an improvement for both Manitex and Manitex
Liftking. Manitex Liftking improvement is primarily related to
increased efficiency which is the result of an increase in
production volume. The margin improvement at Manitex is related to
several factors including product mix, a 2007 price increase and
the benefit of sourcing material from lower cost countries. Total
operating expenses for the quarter ended December 31, 2007 were
$3.4 million, compared to total operating expenses of $2.8 million
in the same period last year. The increase is primarily the result
of including Manitex Liftking in 2007 for a full quarter compared
to one month in the prior year and an increase in corporate
expenses. The increase in corporate expenses reflects the
recruitment of key, experienced management to build an
organizational structure to continue to drive the company's
strategy and growth objectives including activity to integrate the
management, systems, controls and operations of the three
acquisitions. Net income from continuing operations for the three
months ended December 31, 2007 was $.07 million, or $0.07 per basic
and diluted share (based on 9.8 million basic and 10.4 million
diluted weighted average shares outstanding) compared to a net loss
from continuing operations of $(0.4) million, or $(0.06) per basic
and diluted share (based on 6.5 million basic and diluted weighted
average shares outstanding) for the year-ago period. 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. The Company
completed the quarter ended December 31, 2007 with $19.2 million in
working capital and a current ratio (defined as current assets
divided by current liabilities) of 2.2 to 1. Total outstanding debt
has decreased to $25.0 million at December 31, 2007 from $37.0
million at December 31, 2006. Shareholder's equity increased 66.4%
to $30.7 million from $18.4 million as of December 31, 2006. See
the financial tables that accompany this press release for a
complete definition of working capital and current ratio. 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
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 December 31, 2007 and 2006 is included with this press
release below and with the Company's related Form 8-K.
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 December 31, 2007,
unless otherwise indicated. 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 DATASOURCE: Veri-Tek
International Corp. CONTACT: David Langevin, Chairman and Chief
Executive Officer of Veri-Tek International, Corp.,
+1-708-237-2060, ; or Investor Relations, Peter Seltzberg, , or
Brett Maas, both of Hayden Communications, +1-646-415-8972, for
Veri-Tek International Corp. Web site: http://www.veri-tek.com/
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