BRIDGEVIEW, Ill., May 13 /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 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
http://www.veri-tek.com/. 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. and Subsidiaries Condensed Consolidated
Balance Sheet (In thousands, except for per share amounts) March
31, December 31, 2008 2007 ASSETS Current assets Cash $274 $569
Trade receivables (net) 16,767 16,548 Other receivables 171 226
Inventory (net) 18,134 16,048 Deferred tax asset 715 715 Prepaid
expense and other 905 762 Current assets of discontinued operations
41 172 Total current assets 37,007 35,040 Total fixed assets (net)
5,675 5,778 Intangible assets (net) 20,907 21,352 Deferred tax
asset 4,451 3,940 Goodwill 14,065 14,065 Total assets $82,105
$80,175 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities
Current portion of long term debt $584 $807 Notes payable-short
term 360 82 Current portion of capital lease obligations 264 281
Accounts payable 10,499 9,543 Accrued expenses 3,668 4,408 Other
current liabilities 534 486 Current liabilities of discontinued
operations 200 265 Total current liabilities 16,109 15,872
Long-term liabilities Line of credit 15,881 14,191 Deferred tax
liability 4,655 4,655 Notes payable 4,829 5,211 Capital lease
obligations 4,358 4,422 Deferred gain on sale of building 3,834
3,930 Other long-term liabilities 184 184 Total long-term
liabilities 33,741 32,593 Total liabilities 49,850 48,465
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 at
March 31, 2008 and December 31, 2007 41,915 41,915 Warrants 1,788
1,788 Paid in capital 130 72 Accumulated deficit (13,405) (14,094)
Accumulated other comprehensive income 812 1,026 Sub-total 31,240
30,707 Less: Unearned stock based compensation (9) (21) Total
shareholders' equity 31,231 30,686 Total liabilities and
shareholders' equity $82,105 $80,175 VERI-TEK INTERNATIONAL, CORP.
CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except for per
share amounts) Three Months Ended March 31, 2008 2007 Unaudited
Unaudited Net revenues $23,547 $23,138 Cost of Sales 19,275 18,934
Gross profit 4,272 4,204 Operating expenses Research and
development costs 220 147 Selling, general and administrative
expenses, including corporate expenses of $904 and $820 for 2008
and 2007, respectively 3,468 3,110 Total operating expenses 3,688
3,257 Operating income from continuing operations 584 947 Other
income (expense) Interest income -- 5 Interest expense (542) (924)
Foreign currency transaction loss (9) (33) Other income (expense)
-- 93 Total other income (expense) (551) (859) Income from
continuing operations before income taxes 33 88 Income tax
(benefit) (478) 19 Net income (loss) from continuing operations 511
69 Discontinued operations Income (loss) from operations of the
discontinued Testing and Assembly Equipment segment, net of income
taxes (benefit) of $10 and $(0) for 2008 and 2007, respectively 178
(732) Loss on sale or closure of discontinued operations net of
income tax (benefits) -- (366) Net income (loss) $689 $(1,029)
Earnings Per Share Basic Earnings from continuing operations $0.05
$0.01 Earnings (loss) from discontinued operations 0.02 (0.09) Loss
on sale or closure of discontinued operations net of income tax --
(0.05) Net earnings (loss) $0.07 $(0.13) Diluted Earnings from
continuing operations $0.05 $0.01 Earnings (loss) from discontinued
operations 0.02 (0.09) Loss on sale or closure of discontinued
operations -- (0.04) Net earnings (loss) $0.07 $(0.12) Weighted
average common share outstanding Basic 9,809,340 7,859,875 Diluted
10,255,805 8,512,189 VERI-TEK INTERNATIONAL, CORP. CONSOLIDATED
STATEMENT OF CASH FLOWS (In thousands) Three Months Ended March 31,
2008 2007 Unaudited Unaudited Cash flows from operating activities:
Net income (loss) $689 $(1,029) Adjustments to reconcile net income
(loss) to cash provided by operating activities: Depreciation and
amortization 483 571 Decrease in allowances for doubtful accounts
(8) (43) Loss on disposal of assets -- 4 Deferred income taxes
(511) -- Inventory reserves (7) 303 Stock based deferred
compensation 70 -- Reserve for uncertain tax positions 25 --
Changes in operating assets and liabilities (Increase) decrease in
accounts receivable (344) (587) (Increase) decrease in inventory
(2,301) (1,330) (Increase) decrease in prepaid expenses (156) (77)
Increase (decrease) in accounts payable 1,035 (1,501) Increase
(decrease) in accrued expense (756) 462 Increase (decrease) in
other current liabilities 63 (289) Discontinued operations - cash
provided by operating activities 66 378 Net cash used for operating
activities (1,652) (3,138) Cash flows from investing activities:
Purchase of property and equipment (69) -- Net cash used for
investing activities (69) -- Cash flows from financing activities:
Borrowing on revolving credit facility 1,766 3,030 Note payments
(327) -- Capital lease obligations (81) (86) Net cash provided by
financing activities 1,358 2,944 Effect of exchange rate change on
cash 68 (1) Net decrease in cash and cash equivalents (363) (194)
Cash and cash equivalents at the beginning of the year 569 615 Cash
and cash equivalents at end of period $274 $420 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 ended March
31, 2008 and 2007 is included with this press release below and
with the Company's related Form 8-K. Reconciliation of GAAP Net
Income from Continuing Operations to Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA) from Continuing
Operations (in thousands) Three Months Ended March 31, March 31,
2008 2007 Net income from continuing operations $511 $69 Income tax
(benefit) (478) 19 Interest income - (5) Interest expense 542 924
Foreign currency transaction losses 9 33 Other income - (93)
Depreciation & Amortization 483 571 Earnings before interest,
taxes, depreciation and amortization (EBITDA) $1,067 $1,518 EBITDA
% to sales 4.5% 6.6% 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 March 31, 2008,
unless otherwise indicated. Current Ratio is calculated by dividing
current assets by current liabilities. March 31, 2008 December 31,
2007 Current Assets $37,007 $35,040 Current Liabilities $16,109
$15,872 Current Ratio 2.3 2.2 Debt is calculated using the
Condensed Consolidated Balance Sheet amounts for current and long
term portion of long term debt, capital lease obligations, short
and long term notes payable and lines of credit. March 31, 2008
December 31, 2007 Current portion of long term debt $584 $807 Notes
payable - short term 360 82 Current portion of capital lease
obligations 264 281 Lines of credit 15,881 14,191 Notes payable
4,829 5,211 Capital lease obligations 4,358 4,422 Debt $26,276
$24,994 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 March 31, 2008 December 31, 2007 Total
Current Assets $37,007 $35,040 Less: Total Current Liabilities
16,109 15,872 Working Capital $20,898 $19,168 DATASOURCE: Veri-Tek
International, Corp. CONTACT: David Langevink, Chairman and Chief
Executive Officer of Veri-Tek International, Corp.,
+1-708-237-2060, ; or investors, 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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