Veri-Tek Revenue Increases 29 Percent

August 16, 2007 • Bridgeview, Ill.-based Veri-Tek International Corp., a leading provider of engineered lifting solutions including boom truck cranes, rough terrain forklifts and special mission oriented vehicles, recently announced financial results for the second quarter and first six-month period ending June 30, 2007.

Net sales for the second quarter of 2007 reached $30 million, an increase of $6.8 million or 29.4 percent, from $23.1 million in the first quarter of 2007. The revenue improvement was primarily due to improved manufacturing throughput at Manitex and strong sales of special vehicles and military products at Liftking, including two 400-ton transporters. Gross profit was $5.8 million, or 19.4 percent gross profit margin, for the second quarter compared to gross profit of $4.2 million, or 18.2 percent gross profit margin for the first quarter of 2007. The improvement in the gross profit percent was driven by the achievement of higher production efficiencies as well as the implementation of certain operating initiatives launched in the quarter, such as supply chain and sourcing improvements.

 

Total operating expenses for the second quarter of 2007 were $3.7 million, compared to total operating expenses of $3.3 million in the first quarter. Integration expenses associated with acquisitions as well as certain legal, accounting and consulting expenses relating to the company's Registration Statement on Form S-3 and Sarbanes-Oxley compliance initiatives, all contributed to the higher operating expenses in the quarter.

 

Net income from continuing operations for the second quarter was $0.5 million, or $0.06 per share, compared to net income from continuing operations of $0.1 million, or $0.01 per share, for the first quarter of 2007. Net income for the second quarter was $0.3 million, or $0.04 per basic and fully diluted share (based on 8.6 million fully diluted weighted average common shares outstanding) compared to net loss of ($1 million), or $(0.13) per basic and $(0.12) fully diluted share (based on 8.5 million fully diluted weighted average common shares outstanding) in the first quarter.

 

During the second quarter, the company generated $2.6 million of EBITDA, equal to 8.7 percent of sales, compared to $1.5 million, 6.6 percent of sales, for the first quarter of 2007. EBITDA for the six months ended June 30, 2007, was $4.1 million or 7.8 percent of sales. The company's management believes that EBITDA and EBITDA as a percentage of sales represent key operating metrics for its business.

 

”We demonstrated solid improvements by almost every measure in the performance of our business in the second quarter,” said David Langevin, Veri-Tek chairman and CEO. “With the continued strength of our end markets, specifically infrastructure, oil and gas, mining and commercial construction, we remain enthusiastic about our ability to execute our growth strategy. The recent acquisition of the Noble forklift product line further strengthens our presence in the higher margin material handling segment.”

 

For the first six months of fiscal 2007, net sales were $53.1 million and the company's gross profit was $10 million, representing a gross margin of 18.9 percent. Selling, general and administrative expense for the six months ended June 30, 2007, was $6.6 million compared to $0.2 million for the comparable period in 2006 when the company consisted only of the Testing and Assembly equipment segment. Net income from continuing operations was $0.6 million compared to a net loss from continuing operations of $0.1 million for the first half of 2006. The net loss of $0.7 million reported for the six month period ended June 30, 2007, consists of net income from continuing operations of $0.6 million offset by loss from discontinued operations of $1 million and an expected loss on closure of discontinued operations of $0.3 million. The company reported a net loss of $0.8 million for the six months ended June 30, 2006, consisting of a net loss from continuing operations of $0.1 million and a loss from discontinued operations of $0.7 million.

Management continues to anticipate revenue in the range of $95 to $100 million and EBITDA as a percentage of sales of 8 percent to 8.5 percent for full year 2007.