Manitex International (MNTX:BUY) Solid finish to 2013 and end markets appear to be improving as backlog begins to climb.

Q4:13 HIGHLIGHTS

• MNTX turned in a solid Q4 performance. EPS rose 37.5% to $0.22 from $0.16 per share; in line with our $0.22 estimate and $0.22 consensus.
• Q4 revenues advanced 15.8% to $65.4 million from $56.5 million in Q412, just below our $66.5 million estimate. Gains in container handling equipment (77%) and cranes (16%) were partially offset by declines in material handling and equipment distribution revenues due to the timing of orders.
• Gross margins improved 120 bps from Q4:12 levels to 19.5% of revenues and were just below our 19.8% estimate. The gain was attributable to an improved sales mix and increased operating efficiencies.
• Operating expenses fell 60 bps to 11.9% of revenues from 12.5% as costs were controlled and leveraged against the increased revenues.
• We reduce our FY:14 estimate to $0.96 from $0.98 per share to reflect extra marketing costs for the CONEXPO industry tradeshow in 1Q as well as a slight reduction to 1Q forecast revenues, partially offset by upward revisions to our Q2 and Q3 EPS estimates. Our FY:15 estimate is raised $0.02 to $1.16 per share; we maintain our BUY rating; and raise our price target to $19.50 from $18.50, we continue to believe MNTX’s niche focus provides long-term growth opportunities.

RISKS

• With more than 50% of its revenues from the energy sector MNTX is vulnerable to a downturn in that sector’s capital spending.
• MNTX’s niche focus involves making acquisitions. Failure to acquire and successfully integrate additional acquisitions would likely have a negative impact on results and the stock price.