David Langevin, CEO of Manitex, told analysts in a second quarter results conference call that the recent investment from Tadano will open up an Asian market worth -hundreds of millions of dollars, and said that the US company will start using components from its new Japanese partner.
Langevin was speaking as the company announced order backlog up 59% year-on-year. In a call transcribed by SeekingAlpha.com, he called the deal -the most important event in the quarter.
The CEO enthusiastically praised the Japanese crane builder. He said, “Tadano is one of the premier crane companies, which has what many believe are the highest quality product standards in the industry. So, it is a significant achievement for them to select our company to make an investment. Strategically there is not a better partner for our company. We see synergies in distribution and marketing, technology and engineering as well as in component sourcing.”
Langevin offered no details of how Tadano components would be used in Manitex cranes, but made it clear this was part of the companies plan, saying, “Tadano has some of the best components in the industry, many of which they produce internally whereas we buy almost all of our components from many independent suppliers. We see synergies in distribution and marketing, technology and engineering as well as in component sourcing.”
The two companies marketing teams are already working together. Steve Kiefer, COO, said, “Key members of the global Tadano team recently completed extensive training at our facilities in Europe [where Manitex owns PM and Valla] and our teams are working together in establishing detailed plans for our sales, marketing and operational collaboration globally, and particularly in Asia where Tadano has exceptional distribution.”
Langevin stressed the importance of Asia, pointing out Tadano’s strengths in a region where Manitex has almost no presence, and said: “It’s certainly hundreds of millions [of dollars], if not approaching a billion.”
Across the group, Manitex reported net revenues up 22.8% year-on-year, to $63.9m. Tadano’s $32.7m investment contributed to a debt reduction of $39m, with debt now standing at $51m. Backlog rose year-on-year to $76m, but decreased from Q1. Kiefer attributed the sequential decline to seasonality.