Q3 2023 Manitex International Inc Earnings Call
Thank you for standing by this is the conference operator, welcome to the Manitex International Inc. Third quarter 2023 results conference call.
As a reminder, all participants are in listen only mode and the conference is being recorded.
After the presentation there'll be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad.
Should you need assistance during the conference call you May signal, an operator by pressing Star then zero.
I would now like to turn the conference over to Paul Bertolli.
That's your relations for Manitex, Inc. International Inc. Please go ahead.
Thank you welcome to Manitex International's third quarter 2023 results conference call.
Leading the call today are CEO, Michael coffee and CFO Joseph.
We issued a press release earlier today detailing our third quarter operational and financial results.
Together with the accompanying presentation materials.
We'll be available in the Investor Relations section of our corporate website at Www Dot Manitex International Dotcom.
I would like to remind you that management's commentary and responses to questions on today's conference call May include forward looking statements.
By their nature are uncertain and outside of the company's control.
Although these forward looking statements are based on management's current expectations and beliefs actual results could differ materially.
For a discussion of some of the factors that could cause actual results to differ please refer to the risk factors section of our latest filings with the SEC.
Additionally, please note that you can find reconciliations of historical non-GAAP financial measures in the press release issued earlier today and in the appendix of this presentation.
Today's call will begin with prepared remarks from CEO, Michael Coffee who'll provide a review of our recent business performance, including an update on the progress we have made on our new elevating excellence initiative.
With my financial update and outlook from CFO just to do it.
At the conclusion of these prepared remarks, we will open the line for your questions and with that I'll turn the call over to Mike.
Thank you Paul and good morning to everyone joining us on the call today.
Please turn your attention to page three of our presentation, where.
Well, we will begin with a discussion of our third quarter results.
Our strong third quarter results demonstrate continued execution against our elevating excellence multiyear business transformation strategy.
As organic revenue growth margin realization and adjusted EBITDA increased materially.
Over the prior year.
Third quarter revenue increased 10% on an organic basis versus the prior year, driven mainly by strong growth in our lifting equipment segment.
We remain encouraged by our end market trends as we continue to see favorable underlying demand conditions across our core infrastructure.
Energy and mining markets.
Well there is some level of broader macro economic uncertainty as we continue to look into 2024.
Indications of interest from our customers remained very strong.
With many of our largest dealers operating with very limited inventory levels.
Additionally.
Our dealers' rental fleets are operating at elevated utilization rates.
In excess of 90%.
With strong utilization and limited inventory levels are creating pull through demand.
We expect will translate into favorable dealer restocking trends in the coming quarters.
Last quarter.
We indicated an anticipated backlog decline from the historically high levels in 2022.
Our third quarter, ending backlog declined by 5% from last year, but remained strong at $197 million.
Our current backlog remains high exceeding three times normal levels.
Prior to the pandemic.
And representing approximately nine months of lifting equipment sales.
New order activity has remained healthy.
Dealers, placing orders for 2024 deliveries.
Our year to date book to build has kept pace with the increased level of production at <unk> 94 as of September.
We are currently in discussions with several customers around meaningful future orders that we expect could support increased backlog into the year end.
Our wireless segment reported strong results during the third quarter with.
Revenues of 7.6 million, including the contribution of our recently opened branch in Lubbock, Texas.
With the opening of our Lubbock location total branch count is now four locations, giving us access to a larger customer base and market.
Construction activity in our core North, Texas market remains robust.
Driven by strong project activities in infrastructure.
Commercial and industrial segments.
During the third quarter, we continued to make important progress on our productivity and efficiency initiatives.
That are a key driver of our operating excellence strategy.
In fact, we are trending well ahead of our initial first year targets.
Which is evident in the significant margin expansion and improved profitability.
Demonstrated during the third quarter.
Critical progress was made in <unk>.
Good efficiencies and throughout the organization.
And we are already seeing efficiency gains from our new ERP systems.
Looking at the supply chain issues, we continue to see good progress in Europe and expect conditions to further normalize.
Well North America supply chain headwinds.
Been more stubborn.
We are seeing signs of easing.
And are working hard to further improve our manufacturing throughput.
We expect additional supply chain improvements to benefit productivity in North America during the coming quarters.
As a result of the successful implementation of our efficiency measures.
Third quarter gross margin improved 427 basis points to 20.
23, 3%.
Our third quarter gross margin performance was more than 200 basis points higher than any quarter, we've reported in more than five years.
In addition to the productivity improvements we are also benefiting from pricing increases.
Including the surcharges, we put in place last quarter to offset the elevated levels of steel pricing.
Adjusted EBITDA margin was 11, 9% in the third quarter up nearly 400 basis points from the prior year.
This drove the adjusted EBITDA growth more than 60% in the period.
With our strong third quarter performance, we now have generated an EBITDA margin of 10, 2%.
On a trailing 12 month basis.
Putting us on track to achieve our target of becoming an 11, 13% EBITDA margin business.
It is also worth noting that our trailing 12 month EBITDA was nearly $30 million.
Over $16 million from the prior 12 month period.
Looking into 2024.
We see a path towards further margin improvement as we continue to execute on our elevating excellence value creation framework.
We are confident that we are well on track to achieve our longer term margin goal of between 305 hundred basis points of EBITDA margin improvement by 2025.
Which equates to an EBITDA margin of 11% to 13%.
As I already mentioned demand trends continue to be supportive.
Our lifting equipment products and customer sentiment remains positive.
The trends in North America heavy construction equipment.
Our strengthening due to the stimulus dollars when the infrastructure investment and jobs Act.
As we have discussed the stimulus dollars are benefiting markets outside of the traditional infrastructure and making a big impact on markets, such as electrical transmission and distribution.
While renewable energy development, it's covering most of the headlines.
We continue to see strong activity in oil and gas markets as well as electrical infrastructure.
Energy sources, such as solar and wind are growing in share and we have lifting products that are benefiting from this build out.
However.
There is still a significant need to invest capital for traditional fossil fuel development in Manitex is benefiting from this trend.
Additionally.
The growth of renewable energy and the increased adoption of electric vehicles is only serving to increase the stress on our electrical grid infrastructure.
And Manitex is well positioned to benefit from the investments needed to support our country's electrical infrastructure upgrades.
The broader energy sector, which continues to be an area of strength for manitex and should be an important driver.
For our business.
While we are seeing some caution in the western Europe broadly speaking our international markets remained strong.
Similar to the U S infrastructure spending is a key driver in Europe.
Many of our customers in Italy for example.
Our waiting to see if the government continues with its capital investment tax credits.
Demand from South American customers remains robust.
The pursuit of global minerals, such as copper continues to drive capital good spend in.
And mine maintenance activities in the region.
Now turning to slide four I will provide a more detailed update on our elevating excellence strategy, which we unveiled during the first quarter of this year.
As a quick reminder.
This is a multi year business transformation initiatives designed to drive targeted commercial expansion.
Sustained operational excellence.
And disciplined capital allocation.
I'm very proud of the progress that we've already made since we rolled out the strategy, which is clearly evident in our strong third quarter margin performance.
I would like to take a moment to thank our manufacturing teams specifically.
Most of the improvements that we have achieved this year as a result their ideas.
Their efforts and their dedication.
Let's begin by discussing our commercial growth strategy.
A key component of our targeted commercial expansion.
This market share growth.
As we focus on leveraging our leadership in straight mast cranes to grow articulated crane sales industrial lifting sales and aerial work platform.
Sales across North America.
This strategy as outlined on slide five.
Necessary changes to our organization that have already been completed preparing us for growth in North America.
In 2024 and forward.
This includes a structural change to our sales team.
And evaluation of our dealer network can meet this opportunity.
Our multiyear plan called for growth in these product segments starting in 2024.
We are on schedule and look forward to expanding our presence in the Americas.
Complementing this strategy, our electrical industrial Crane line will be exhibited recently at the Gis Expo in Italy.
This occurred early October.
It included the unveiling of four new products as well as a host updated features.
Our electric Crane has branded the gala and then.
The most established brand in the industry.
Manitex offers both full electric and hybrid electric looking solutions in three of four of our product segments.
Our engineering and sales teams.
Develop practical innovations.
At our meeting real world demands.
On page six we highlight our second part of the strategy.
Entering on operational performance.
Elevating excellence calls for improved gross margins from enhanced processes.
Supply chain efficiencies improve.
Improved part sales content and smarter focused on product mix.
We are performing ahead of plan.
And the benefits are improving our bottom line.
In addition, as Joe will discuss in a moment, our SG&A has remained essentially unchanged.
The year.
This is driving strong operational leverage.
Many of our investors know Manitex has longstanding objective to achieve 10% EBITDA margins.
This has been an objective for the company since well in advance of the pandemic.
We achieved this goal for the trailing 12 months ending September 2023, as we reported an adjusted EBITDA margin of 10, 2% during this period.
And the improvement is the result of the efforts made by our operating teams.
In September we achieved a record in units produced.
And the improved margins are evident that the strategy is working.
During Q1 and Q2 of this year, we highlighted the upgraded our ERP systems and both the European businesses and our rental solutions business.
These investments were a critical part of our strategy to enable our ability to scale the business and help us attain the margin improvements we are targeting.
Manitex is now operating on modern systems.
<unk> is for scale.
Improved responsiveness.
And better global cooperation.
Supply chain pressures have continued to ease across our business improve.
Improvements in Europe have been quicker to realize.
Progress in the U S has lagged, but we are beginning to see headwind debate in the U S. In recent months.
Our third and final initiative of our plan as they focus on disciplined capital allocation, which is highlighted on page seven.
Our short term goal was to lower our net leverage ratio below three times.
We are very pleased that our net leverage declined to two nine times as of September 30th down.
Down from $3 nine at year end.
Through the year, we have maintained higher than normal working capital.
This is directly correlated to supply chain headwinds.
We are now seeing opportunities to safely lower these inventory stocks.
End user systems and improve supply chain relationships to translate this into lowered working capital levels.
We expect our strong operating results and improved working capital structure.
Coming quarters will allow us to drive leverage further below our target.
As part of elevating excellence, we introduced three year financial targets that reflect our confidence in the underlying strength of our end markets.
Coupled with the commercial and operating benefits, we seek to generate to our strategic initiatives.
These objectives can be found on page eight of our presentation.
During 2023.
We have been running ahead of our first year targets.
It's well on track to achieve these long term goals.
Additionally, <unk>.
Based on the strong progress against our strategic initiatives.
And better than expected third quarter results.
We're pleased to be increasing our full year 2023 financial targets, which Joe will detail.
Before I turn the call over to Joe allow me to provide a few concluding remarks.
Economic concerns and higher interest rates are impacting certain customers. Overall, we are experiencing continued demand from our core end markets.
Residential construction is one area being impacted more broadly.
But this is a small focus for manitex and in fact, we have a large customer tied to the residential market that continues to see strong momentum and.
And we are in discussions regarding a large order with this customer at this moment.
We remain optimistic due to our strong backlog.
Customer sentiment dealer inventory health and infrastructure spending.
The third quarter results are another example that our strategy is working.
And we are delivering measurable improvements towards that end.
Our business is markedly more efficient.
And our management team is committed to delivering sustained performance against our strategy.
Joe.
Thank you, Mike and good morning, everyone I will provide some additional details on the quarter give an update on our liquidity and balance sheet and conclude with commentary around our outlook for 2023.
Turning to slide 11 net.
Net revenue for the third quarter of 23 was $71 3 million.
Up nine 7% compared to the same period last year.
Driven by growth in our lifting equipment business.
Third quarter revenue growth was negatively impacted by a decline of $4 million for approximately 6% from the lower truck chassis sales, which are largely pass through revenue items.
We continue to expect full year 2023 chassis sales to decline relative to last year.
Which will be a headwind to reported sales growth.
As a reminder, the sales decline will have a limited impact on our gross profit dollars.
Benefit the gross margin percentage for the full year of 2003.
Lifting equipment segment revenue was $63 $7 million during the third quarter, an increase of 11% versus the prior year period.
As I just discussed lower truck chassis sales impacted third quarter results and.
Lifting equipment segment revenue would have increased 21% excluding the chassis sales.
Lifting equipment revenue growth was driven by continued end market strength, coupled with improved throughput and manufacturing facilities and pricing actions.
Yeah.
Rental equipment segment revenue was $7 6 million in the third quarter of 23 supported by strong end market and key North Texas markets.
Including contributions from our Lubbock, Texas location, which opened in March of 'twenty three.
Momentum is continuing to build from the expansion of the Lubbock facility and volumes have been strong in recent months.
The rental business benefited from the deployment of new rental fleet acquired in 2022.
Market share gains in the Texas market and pricing benefits.
As of September 2023, total backlog was $196 9 million down four 9% from a year ago, driven by increased manufacturing throughput, which drove higher sales and the timing of orders, which Mike discussed.
Our backlog ended the quarter with North America, representing approximately 60% of the total backlog and international the remaining 40%.
As Mike discussed, while our backlog is down from last year. Our overall business momentum remained strong and our current backlog of roughly nine months of sales is a healthy level and higher than our normal historical backlog right.
Gross profit was $16 6 million during the third quarter of 2003 up from $12 3 million during the prior year period or an increase of 34%.
The increase in gross profit was the result of organic growth in the lifting equipment businesses.
From our operational improvement initiatives.
And pricing increases, including the surcharges, we implemented in response to elevated steel prices that we discussed last quarter.
As a result of these factors gross profit margin increased nearly 430 basis points to 23, 3% during the third quarter.
SG&A expense for the third quarter of 2003 was $10 5 million basically flat from $10 4 million for the same period last year.
R&D expense was $9 million during the third quarter up modestly from $7 million in the same period last year.
We are pleased to be able to hold our operating expenses relatively flat.
The strong revenue growth and investments that we're making in the business.
We expect minimal growth in operating expenses in the coming quarters, which should enable us to continue driving strong operational leverage to the bottom line.
Yeah.
Operating income was $5 2 million during the quarter compared to $1 2 million for the same period last year.
Operating margin in the third quarter was seven 3%.
The year over year improvement in operating income was driven by the organic revenue growth in the lifting equipment businesses or.
Our improved gross margin performance and operating leverage.
Adjusted EBITDA was $8 5 million for the third quarter or 11, 9% of sales compared to $5 2 million or 8% of sales for the same period last year.
Net income was $1 7 million or <unk> <unk> per diluted share for the third quarter.
Paired to a net loss of $3 4 million or <unk> 15 per share for the same period last year.
Adjusted net income was $2 9 million or <unk> 14 per diluted share in the third quarter of 23.
Up from adjusted net income of <unk> <unk>.
$7 million or <unk> <unk> per diluted share for the same period last year.
Adjusted net income for the third quarter of 2003 excludes 500000 of stock compensation expense and <unk> 8 million of other nonrecurring expenses.
Now turning to our balance sheet on slide 12.
As of September 30th.
That was $86 4 million, which is a $1 4 million decline from the end of the second quarter.
As a result of the strong operating results net leverage improved to two nine times at the end of the third quarter of <unk> 23, compared to three nine times at the end of the fourth quarter of 'twenty two.
We expect to begin to see our working capital usage normalize in the coming quarters.
Which should lead to improved free cash flow conversion and even further reduction of leverage levels.
As of September 32003, total cash and available liquidity was approximately $29 million.
As Mike detailed we have made tremendous progress on our strategic initiatives.
And we are running nicely ahead of our first year targets, which resulted in our third quarter results coming in ahead of our expectations.
Based on the strong third quarter results and our expectation for continued execution against our strategic goals, we are raising our full year 2023 outlook.
Our increased targets call for revenue in the range of $285 million to $290 million and adjusted EBITDA in the range of $28 million to $30 million.
At the midpoint of our EBITDA range, we are forecasting nearly 40% adjusted EBITDA growth compared to the $21 3 million and adjusted EBITDA that we reported in 2022.
Our financial targets are supported by continued end market momentum market share gains as well as expected margin improvements, resulting from our elevating excellence initiatives.
I expect completes our prepared remarks, operator, we are now ready for the question and answer portion of our call.
Thank you.
Join the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing any kings.
To withdraw your question. Please press Star then two.
Our first question is from Matt Koranda with Roth Capital. Please go ahead.
Hey, guys smack Dab in on for Matt Good morning.
Good morning.
So can we just start with the breakdown I know there'll be in the Q, but can you just here a breakdown of revenue by product segment or quake.
Yes, Joe can you handle that that'd be great.
Yes, yes.
Just.
Youre looking for total segment revenue.
For the.
For the quarter, we had the lifting equipment segment was about $63 7 million.
When the rental equipment was seven six.
Okay.
Do you have a biologic knuckle boom Ariel.
Sure.
Should I just wait for the queue.
We do yes.
The Q will have it in there, but the the boons knuckle boom truck cranes was around $41 2 million.
We had the aerial platforms for the for the platform.
Platforms was about $8 2 million for the quarter.
Part sales was 71.
Rentals was about six seven.
And then the rest was serviced merchandize and other.
Yeah, Okay got it thanks for that Joe.
Joe could you help bridge us from the 19.
Gross margins in three key of last year. So we're up about 400 bps year over year, it's great to see improvement there and kind of like we've been talking about but just trying to get a more of a stack around idea.
What is benefiting the margins the most.
Okay.
Okay.
Yes, so a couple a couple of things driving the margin improvement year over year pricing increases.
Have driven driven a portion of that increase.
We've also had some.
Mix. The fact, as we mentioned I think we mentioned that the truck chassis sales were down about $4 million year over year.
Those typically carry a much lower margins, so having those out of there.
At a lower rate drives a higher gross margin percentage for us so that was a big portion of it.
And then the rest is really just a mix with some higher tonnage cranes.
Which generally carry higher higher gross margin percentage.
We also.
The initiative calls for production velocity increases and so as you know we made investments in our systems to help us with better scheduling better throughput.
And we actually hit some unique unit records, especially in Europe during the quarter.
Normally Q3's, a little bit of a sleepy quarter because of the European holidays et cetera in most of our customers are hard at work in the summer.
The production levels are really really high and that's helping us as well just drive more efficiency.
Hum.
The bottom line, just being able to produce more.
In the current square footage that we've got.
<unk> is helping us quite a bit.
Yes.
Got it okay, well that's great to hear.
All of those price increases sounds like there was a bad month.
The biggest factor a benefit on margins how much of the recent price increases still in Belgium.
The P&L.
The possibility of those types and so <unk> 24 to filter through all of them instead of just a bit lax and we saw the larger benefit through Q.
Trying to gauge how much is left to filter through maybe unfortunately, that's going to trickle over.
Well.
I think the way to look at that is that.
When we set the margin improvements gradually purposely structured this is a multiyear strategy. So early on.
Are we.
We're working through a backlog that has a more favorable price and that has benefited us in this quarter, but there is additional initiatives with regard to addressing our supply chain sharing resources I mentioned process, just a moment ago.
We're also seeing that.
We have a distinct change in the mix of products that we're selling and marketing and what markets we're focusing on.
And those things will translate over multiple quarters. So just it happens over time and so in the coming quarters, we're looking for those other activities.
To continue to drive.
Overall product margin.
Okay.
Got it that's very clear.
Last one for me.
Good to see the positive commentary around the rental markets in the Labour launch in Lubbock shall.
Shall we expect a lower revenue contribution in <unk> from the 76 that we put up in <unk>, just given the winter seasonality or should we be thinking about it differently.
No generally.
The seasonality generally as a Q1 phenomenon rentals Q4.
The backlog with most of our customers are strong yes, there is.
In climate weather.
That can always impact.
Project production and rental activities, but Q.
Q4 is.
Typically a strong quarter on the rental segment.
When things were really frees in Q1, they slow down a little bit but that's.
We're not expecting any.
Any adverse.
Q4 reactions from rentals.
Hi, Chris.
Preliminarily. This how are we thinking about rental revenue growth in 2024, just given where we're at with the launch in Lubbock.
Private commentary you've given around opportunity.
Under served markets.
Well we feel.
In general we feel really strong about our position in northern Texas and the economy is strong.
Backlog of infrastructure and commercial projects is strong.
We have a really good.
<unk> market position in North, Texas Lubbock.
The response from the customers in Lubbock has been exceptional.
But we're the new Kid on the block and so we're going to grow as quickly as we can.
Just to have eyes wide open, but thus far we're really happy with how that market performed.
And we expected that it will continue through 2024.
Yeah.
Got it that's all for me guys. Thank you.
Thanks, so much thanks.
Thank you.
The next question is from Ted Jackson with Northland Securities. Please go ahead.
Hey, good morning, Congrats on a really nice quarter.
Thanks, guys. Good morning, good to hear from you.
Okay. So I've got just a.
A smattering of random questions.
Since we just we're on rental I'm going to stay close to that to start with the <unk>.
Later store Thats opened I know it takes a while for each of these locations to kind of hit their stride and ramp up I mean would you view all of your locations now its stride or is that latest store still in the process of kind of filling out in terms of the revenue potential within it.
And then follow up on that on rental as you know you've got.
Our core locations in northern Texas at what point do you see yourself, adding a fifth location and would you continue to be building out a north Texas and then I've got a few more behind that.
Yeah. So I appreciate that a lot so do it the way to think about Lubbock is.
Lubbock has a larger.
Market in Amarillo, and so not all of the stores are equal for example, our Hereford store as an industrial store it serves.
Real egg markets.
And our Washington store is in the center of Amarillo in this our largest to date.
When we built Lubbock, we built Lubbock could be as big and then surpass Washington, because the Lubbock market is bigger and population in general economy than Amarillo.
<unk>.
We're looking at that as a long term project and we're seeing.
In Lubbock is designed.
To surpass Washington, and help us to grow the overall business. So we've got a lot of room for growth there really happy with how we've been received and we're ahead of schedule on the on the growth curve. Since we opened the store in April may.
Of this year.
So I hope that answers your question and the second one as far as opening new markets. We're not prepared to talk about that publicly at this stage, but.
We really like the strategy that we have.
Further rental business into a high growth strategy, and where we're being selective in the markets that we're choosing where we can make a competitor.
Difference and they're very similar in size and scope to what we're doing in Lubbock and umbrella.
Okay.
They don't want it.
Just just quickly over to the gross margin, which was touched on before you can get to.
A fabulous improvement in gross margin I understand that it's a combination of chassis and mix.
But broadly speaking is that like kind of a new baseline of margin that we should view as sustainable and that we should be making adjustments to our.
We can't afford outlook or is this kind of.
The weather was great. The temperature was great in the industry. It really helps you put up.
PR time.
Yeah, I think what we have here, it's not a blip in the radar I mean.
Margins.
When you improve a business like ours.
It takes time for those improvements to get ahead of steam had good momentum, but we're not looking at this as a blip in the radar as a matter of fact, we're looking at this as a down payment for our other business can perform going forward.
So we introduced this three year strategy to drive 300 to 500 basis points of improvement that would fall to the bottom line. Most of those improvements are going to come from gross margin.
What we're seeing is related to working you know the strategy is working.
But.
The first.
The first part of that was pricing improvements.
Production velocity.
A little bit of supply chain. The next wave that comes in will be more of the effects of product mix market focus.
More intense supply chain focus and then a growth in our parts sales.
It's a multi tiered strategy and these things are can afford upon each other but.
We're committed to what we've set out witness elevating excellence strategy and.
I think the message of Q3 is that it's working.
And really really Joe and I are exceptionally proud of how the operating teams come together.
The management team at Manitex is very excited about the process and.
It's good it's good for them to see that their efforts are actually winning because they are.
Yes.
Okay.
Two more questions going back over into chassis.
So that you've.
<unk> gotten that they've gotten them out of your P&L, but it's still an important part of the business in terms of you got to have them to deliver most of your big chunks of your product.
We've had.
It's gone through some labor disruption with the UAW and the big three it has spilled over into some of the commercial vehicle market and so I guess my my question on this front is it have you had any issues with regards to Mr customers getting availability to chassis and or do you have any concerns with that as we think about fourth quarter because I know this.
Still some turbulence if you like within the commercial vehicle market as a result of the strikes.
Yeah, absolutely I really appreciate your question, Ted and we've been asking ourselves and our suppliers.
<unk>.
What to expect.
Most of the chassis that we quite well first of all the chassis is in Europe has been unaffected and so and that impacts our aerial work platform business and so we're we're moving along unencumbered there.
Kathy is in North America are largely class, a and there hasn't been a big impact of the UAW strike.
And we've been monitoring chassis delivery for both our trucks and our customers' trucks very intently.
We're not seeing a significant change but to tell you that our eyes are on that as a potential issue would be a misnomer I mean, we've been talking to are our suppliers every week.
Thus far we're not seeing a change in schedule.
And I'm, hoping that as the UAW resolves that that threat will go away completely.
Our biggest supplier is Pat car.
And they don't have direct UAW influence, but their suppliers are so that's that's how we're looking at it.
The short answer is we're not seeing any impact.
At this stage.
Okay.
Then my last question.
More of a strategy one is over the longer term one of the.
Yeah.
Efforts as I guess what.
Kind of drive margins and efficiencies, bringing some of the demand.
Actually in some of the product that you're right currently make in Italy in Europe, and actually bringing some of the manufacturing here to the U S. You don't have to ship it.
And I just wanted to kind of hear like where are you in terms of that Jeremy is there I mean could you talk a little bit maybe about kind of.
Time line, and where you are within that timeline, just kind of an update if you will and that's my final question.
Yes. So we don't we're not prepared to talk about a distinct or detailed timeline along that but we are at the early stages of.
Sharing supply chain. So we have a supply chain directive in Europe in our supply chain directive in North America.
And many of the products that we're acquiring in both areas.
Our complementary in many of the suppliers.
I actually have the same ownership or we're sharing suppliers. So we see as an opportunity for us too.
Broadened that bring more value to the supply chain helps eliminate cost so the supply chain.
And then.
There are some products in Europe that are distinctly.
Well suited for North America, and some of the products in Europe are 100% North America. So we're looking at that but I would I would characterize it is the early innings in the early stages.
<unk>.
When we're prepared for when we're prepared to release the timeline, we'll let you know but at this stage.
Our early consideration of a long term process.
Okay. That's it for me again, Congratulates laser from the quarter partition.
Thanks, Tom I appreciate the questions.
The next question is from Mike Sulewski with D. A Davidson. Please go ahead.
Okay.
Good morning, Mike.
[noise] Mr. Slifka Your line is open.
Yeah.
Okay.
The same can be on hold I'm hearing is that combined.
Okay.
I'll answer the question without having the conference back over to Michael Kauffman for closing remarks.
Hi, Thanks, very much operator, and just want to thank everyone for your interest in Manitex and our investors for their support.
And.
Our long term investments in the company it means a lot to us and we're grateful for it.
For joining the call if we don't get a chance to connect during the quarter. We wish you the best and look forward seeing you soon and with that that'll conclude our call today.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
Yeah.
Yeah.
Yes.
Yes.
Yes.
Yeah.