Manitex International Inc (MNTX) 2011 Q1 法說會逐字稿

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Manitex International Incorporated first-quarter 2011 results conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions)

I would now like to turn the conference over to Mr. David Langevin, Chairman and CEO. Please go ahead, sir.

Thank you, John. Good afternoon, ladies and gentlemen. Thank you for your interest in Manitex International. On the call with me today is our President and Chief Operating Officer, Andrew Rooke. Please see our website or our release for replay instructions for this call, which will be available until May 18, 2011. We will be using slides to assist in this presentation, which are available through the webcast or directly from the investor relations section of our website. Please refer to the first slide regarding the safe harbor statement. Review this statement and refer to our SEC filings for further guidance on the risks associated with our Company.

We've organized our call today with my leading off by making a brief opening statement, followed by a review of our results by Andrew, and a closing statement by me. Andrew and I will then respond to any questions.

So, please now refer to slide number 3. We are encouraged by the expansion of the general overall market, and the impact it is having on our total sales. It appears to us that we are moving off the bottom for our markets, and seeing life in the majority of our businesses. We also believe that we are just in the beginning stages of a recovery, particularly in the US.

And at this recovery as it relates to our largest division, which is the Manitex Crane operation, we'll reach higher levels than in previous cycles. This is due to our development of new crane products, which were not available at the last cycle that make up a decent percentage of our current business, as well as our expansion over the last several years into international markets.

Next, I would like to mention a few points specific to the first quarter. First, in our first-quarter results, we include the expenses for the ConExpo convention, which is held once every 3 years, of approximately $500,000, equivalent to $0.04 per share. The impact of these expenses flow throughout our numbers.

Second, our backlog has increased to the levels to the highest number that we have seen since the second quarter of 2008. Although, as I just mentioned, we expect that we will see higher levels of sales during this cycle than in previous. So far, the primary source of our growth is in the increase in our basic Manitex divisional business, and while we did have some seasonal weakness in several of our divisions in the first quarter, we are experiencing improvements across the board in the second quarter.

Finally, on May 4, we announced an update on our CVS Ferrari transaction. We are very pleased to report that the creditors have approved our plan, and after court approval has been obtained, we look forward to closing this important transaction. For the first quarter, our results at CVS were consistent with the fourth, which were approximately $6 million in profitable sales.

With that brief overview, I will turn it over to Andrew to review our results.

Thanks, David, and good afternoon and welcome, everyone. Before covering the detail of the first quarter's results, I would like to start out by providing a commercial update for our business, which is covered on slide 4. US market sectors have shown a continuing upwards trend in select markets from quarter 4, 2010, and thus far into 2011. General construction activity is still limited, but we are seeing increases in demand from specialized rental fleets and general contractors.

Much stronger is the demand from the niche energy and utility sectors, both domestically and internationally. Non-US markets are showing continued strength, and that the target areas for us, Canada continues to show strong demand while the Middle East and parts of Europe remain firm. With regard to products, demand remains skewed towards the higher tonnage cranes or industry-specific products, such as that for energy services and the railroads. As identified later in our first-quarter results review, military and governmental demand is currently weaker than at this stage in 2010; however, we anticipate that these products will still be key contributors for 2011.

We had a strong presence at ConExpo in March 2011, with representation from all of our brands. Manitex's international booth was well attended, and there was considerable interest in the breadth and depth of our product offering. We signed 2 very important distribution agreements, for which all of this totaled approximately $4 million, and received numerous positive inquiries, both domestic and international, that we are currently pursuing. While our attendance involved a not immaterial expense, we believe that our participation in this high-profile trade show was an important component of our marketing budget and strategy, and will provide a very positive return on investment for us.

CVS Ferrari markets are continuing to strengthen, and the operations are consistently contributing profitable sales of approximately $6 million a quarter. We are building operational and commercial infrastructure and relationships, and are optimistic that following the recent creditors votes of approval, the court approval and transaction will complete in quarter 3 of 2011.

Finally, as a result of many of the factors just referred to, our backlog as we enter the second quarter of 2011 had increased 20% from December 31, 2010, to $48 million. This included a strong contribution from our boom truck crane operations, providing further support for optimism for a steady increase in overall activity.

Now turning to the results for the first quarter, slide 5 of the presentation shows the key figures for the first quarter of 2011 with comparatives for the fourth and first quarters of 2010. Sales for the first quarter of 2011 of $31.7 million, including a contribution from CVS of approximately $6 million, were up 44% or $9.8 million compared to the first quarter of 2010.

We achieved higher revenues in each of our operating segments, the Lifting Equipment segment increasing 40% overall, with cranes up 45%, and material handling up 35%. And the Equipment Distribution segment increasing 152%. Crane sales continue to reflect strong demand for larger tonnage products in the specialty energy and utility markets in both the US and internationally. Material handling products benefited from another strong quarter from the CVS Ferrari container handling business, and improved demand in the specialized trailer market. This helped offset weaker demand in the higher margin specialized military and governmental products.

The increase in distribution revenues was driven by our used equipment sales program, which we launched in the second half of 2010. On a sequential quarter basis, total sales revenues increased 7%, largely due to continued increases from our boom truck crane operations.

Quarter 1 gross profit of $6.5 million was a $1.2 million increase above the first quarter of 2010, driven by increased volume. Gross profit margin of 20.4% was 330 basis points below the first quarter of 2010. The reduction in gross margin percentage resulted from lower margin product mix in sales, particularly in material handling products where there was a decrease in shipments at higher margin military and governmental units. Additionally, in Equipment Distribution, the increase in revenues was from lower margin used equipment sales, which also impacted the overall gross profit percent.

Operating expenses, that is research and development, SG&A, and restructuring expenses, for the first quarter of 2011 were $5.2 million compared to the first quarter of 2010 of $4.2 million. The first quarter of 2011 operating expenses included $1.4 million relating to the CVS Ferrari operations and new operations started in 2010, and sales and marketing expenditures for the ConExpo trade show.

Adjusting for these impacts gives an underlying decrease of $0.4 million compared to the first quarter of 2010, as we maintained our control of expenditures across a variety of areas. SG&A expense, which includes non-cash depreciation and amortization of $0.6 million for the first quarter of 2011, was 15.4% of sales compared to 17.5% for the first quarter of 2010.

Net income for the quarter ended March 31, 2011, was $0.4 million, equivalent to $0.04 per share, and EBITDA was $2.1 million or 6.5% of sales. Backlog of $47.7 million was an increase of 120% from a year ago, and 20% since the December 31, 2010, with increases across all sectors, but driven particularly by strength in boom truck cranes.

Slide 6 shows a bridge between the quarter 1, 2010 net income of $0.3 million to the net income of the quarter 1 of 2011 of $0.4 million. Walking through the reconciliation table, $9.8 million of increased sales volume provided a gross margin benefit of $2.3 million, but there was a negative impact of $1.1 million from a less favorable product mix. The product mix of sales in the quarter was not as favorable, since there was a decrease in higher margin military and governmental sales from the particularly strong first-quarter 2010, and an increase in lower margin used equipment sales. The combination of the volume and mix provided a net gross profit increase of $1.2 million.

Operating expenses increased by $1.4 million from acquisitions and new operations and ConExpo expense, which were partially offset by reductions in $0.4 million from existing businesses. The net increase was therefore $1 million. Finally, the other key contributor to the net income movement between the 2 periods was an increase in tax expense of $0.1 million, driven by an increase in taxable income, as the effective tax rate was effectively consistent between years.

Slide 7 shows our key working capital and liquidity ratios. Operating working capital continued its positive trend and reduced as a percentage of annualized last quarter sales to 30%. Although, as we manage the 44% growth in revenues, both operating working capital and working capital increased in dollar terms. As we have stated before, our medium-term goal is to return to the 2008 levels of operating working capital of 25% of annualized last-quarter sales.

Slide 8 shows our capitalization and liquidity position. Our net debt to capitalization remained steady at 43.5% at March 31, 2011. Excluding lines of credit in the Italian working capital facilities, our debt position reduced $0.5 million in the quarter, with the most notable event being the payment of the final installment on the [senior] note for the acquisition of Liftking. EBITDA for the first quarter of 2011 was $2.1 million, equivalent to 6.5% of sales. As with net income, EBITDA was also adversely impacted by the approximate $0.5 million of expenditures on ConExpo. Without this investment, EBITDA to sales would have been 8.1%.

We continue to manage liquidity carefully as we respond operationally to the increases in sales demand. And as a result, usage in our lines of credit, having working capital facilities, net of an increase in cash, increased by $0.4 million. It is noteworthy to mention that part of our strategy for our Italian CVS Ferrari operations has been to secure local working capital facilities, and as at March 31, 2011, we have put in place local transaction facilities of up to $2.4 million, which are available to draw upon as we expand the CVS operations.

And now, I would like to hand back to David for his final summary.

Thank you, Andrew. As I stated earlier, we believe that we are starting to see a steady rebound in all our markets, which is very encouraging. With that expansion comes margin pressure created by price increases from all our suppliers across every component and material. We did implement price increases for our products in the first quarter to offset some of these cost increases, but we do expect our sales in the second quarter to expand consistent with the increase in our backlog, which would be in the 20% range. And with this expansion, we believe we will see improving operating leverage.

With that, John, we would like to open it up for any questions.

(Operator Instructions) Rick Hoss, ROTH Capital Partners.

Dave, in your guidance, you said you expect the second quarter revenues to be similar to the backlog growth, which is at 20%, so I think that implies somewhere around $38 million.

Right. That's correct.

And what gross margin can we expect? It was a pretty big difference between the fourth quarter and the first quarter. So, obviously, to me that is a big swing here, and for modeling purposes hopefully we can get a little bit more of a clear target.

Rick, that's a tough one. That's the question. I don't know. As I said, we hope to continue to get operating leverage from the improvement of obviously better absorption as we put more sales through the facilities. So, I would expect that we would see some benefit there, but we are also getting just like everybody else in the marketplace, attacked every day by suppliers. What we had hoped of course, we mentioned this last quarter that we saw this pressure, but what we had hoped was that the absorption would offset the increases. And also mix has a factor in it to because we are having a little bit more of a commercial mix as we go forward, which is also going to be something for your modeling purposes. So, we have ranged in margin from 16% to 18% in the last cycle, and of course during the downturn because of the type of products that we were producing, we of course had some margins that were rather historic in the marketplace for our industry. So, I am not saying that we are going to go back to historical numbers, but I think that we are still going to see some pressure on margins. But as we said in the call, we will have higher overall dollar margins because of just the fact that we obviously have much higher sales.

Okay. So, I think that the message is a sequential decline from the first quarter then?

Okay.

Well I am just under figure out what --

Yes, I know. It's tough. The reason why I'm hesitant too because I find that as these things roll through and come in, I find some big differences between each one of our companies, depending on what they get through the facility for that month. So, it really depends on what type of units they are putting through. It just varies a lot, and again, it doesn't really matter because we are all participating in Manitex, but when we look at some of our competitors, our margins are still in some cases in excess of 10% higher because everybody is experiencing the same things. But that doesn't make any of us better, which we have to keep fighting the battle.

Okay, but how about we take it from a different angle then. When we look at the fourth quarter, and then we look at the first quarter, just a comparison, how much of the decrease would you attribute to actual raw material inflation versus a less favorable product mix, and in that product mix, I think the contribution from the new distribution model?

Andrew you probably have a better -- but I would say generally a 50-50 impact, 50% from raw materials increases, and 50% from a product mix. We do have some seasonal issues, as we mentioned in the first quarter. We have some of our divisions which just don't put that much volume through in the first quarter. A year ago, as you know, we ramped up as we went through the year, and I wouldn't be surprised it if we don't see that again . Last year, we were 3, 2, 6, 8, as far as earnings per share per quarter, and again I wouldn't be surprised because I also think right now, we are seeing some diminishing of the pressure on the prices. But that is hard to predict.

Okay.

I don't know Andrew if you have anything further to add to that.

No, not really Dave. I think you are right. One thing that you did mention, which is important of course, is the absorption effect.

Right.

I'm sorry if you mentioned this, but are you pushing price increases on, or are you just absorbing it?

No. We mentioned that we had implemented price increases in the first quarter.

Okay.

Again, that is fairly consistent with other people in our industry. So, it's not something that we are doing uniquely, it is something that is happening throughout our industry.

Okay. And then as far as the guidance for the second quarter, and thinking about where we are in backlog. Would you compare this outlook with your previous outlook saying that was there any work that was accelerated and brought forward into the second quarter, and with that say $38 million target would you expect to be flat or up in 3Q and 4Q?

Up in what regard? In the sales or in the profits?

In sales. And really what I'm trying to get at is it is a big jump from 1Q to 2Q on the revenue line. And are you pulling stuff forward or is the demand -- ?

No, no. All we are doing is reacting to the volume of business that we have. As we have mentioned past quarters, we are trying to increase the amount of volume that we are pushing through in our largest division which is Manitex, and that is just responding to the marketplace. So, we are trying to ramp up there. Of course, what is holding us back is suppliers, chassis. The chassis delivery dates are 120 days or greater. So, we have to forecast fairly long in advance in order to get ourselves the chassis to match up with our cranes. You saw our inventory go up in the first quarter. That's all because you have to operate a little bit differently now than what we have in some past cycles because there has been quite a decrease in the suppliers. So, you have to make sure you are getting more material, so that you can match up with your products.

Right. Okay, and then on the topic of CVS. I think that initially when you first started looking at the organization, I think it was a matter of trying to figure out which of the products you thought would be accretive, and then which products or segments that you did not necessarily accept or operate on a go-forward basis. Do you have greater clarity at this point into which of the products that you expect to acquire? The second part of that is of that $6 million that was recognized from CVS in the first quarter, do expect it to grow as well throughout the year?

We will acquire all the products of CVS, all the intellectual assets. So, whether it is strategically an important product or not for us, and as we grow the business, we may expand into some of those products, we just want to carefully and cautiously roll through the products that were profitable consistently, and not just producing for the sake of volume. But we want to make sure that we are bringing it back on a profitable basis. So, to answer your first question, we will a acquire all of the products. Although, you are absolutely right, we have identified which ones we're emphasizing at this point, but that doesn't mean that we won't be looking at the other products as well.

And on expansion, I have got to believe that this was, as we said when we acquired or when we entered into the rental agreement, this was a company as large as Manitex. So, it can have quite an impact to our Company as we go forward, but as you can imagine, just this first announcement that we have received credit approval is significant, and it is a milestone that we had to hit. Now, the next thing will be the judge sign off, and then we will close the transaction. So, we are getting much closer and that will impact and be very helpful for our business as we go forward. So, I do expect it to continue to grow, and it's in a market that is very good market.

Thank you Dave.

Howard Woo, First Wilshire Securities Management.

Good afternoon gentlemen. This is Dmitriy. Congratulations on the strong quarter.

Thanks.

Could you guys a little bit more into the fixed cost absorption, and maybe talk about what is your fixed cost base that is included in the COGS, and what sort of operating leverage we can think about as you grow sales?

Andrew, I'm sure you have a much better exact number on this. Obviously, I can only speak on general terms. We keep each business with separate facilities, so obviously you will have the fixed cost associated with those facilities. We try to minimize, of course, those costs, but when you have a facility, you have costs associated with them. I don't know the exact operating numbers of the fixed costs, and their costs of good sold sales for each one of the operations. The biggest one is, of course, Manitex is the biggest. I would expect Liftking and CVS to be the next 2, but again, I don't know. Andrew, if you have any specificity to the any of those numbers.

I think the other point to talk about really is as we went through 2009 and obviously back into 2010, one of the key things that we tried to do was to balance that level of fixed cost or certainly manufacturing costs with the level of demand. As you just mentioned, the fact that there is a significant portion of basically fixed or semi-fixed costs in those operations through facility costs, utilities et cetera. Those are the parts of what goes through costs of goods sold. As the volume has started to ramp back up Dmitriy, what we have been trying to do again is to match some of the variable elements of the manufacturing costs. So, gradually bringing that where appropriate, the manufacturing resources, and matching that to the level of demand that we have and that we are producing. The variable in there goes back a little bit to the planning process that Dave just talked about with the supply base and the supply-chain; how well those can match our aspirations and those do lead to fluctuations. But I think in broad terms, those are the issues to expand a bit about upon what Dave has just said.

I don't have a specific number to indicate of our costs to goods sold how much is specifically fixed, which I think is what your question is.

Maybe we can look at previous quarters and try to back into it. What about parts shortage perhaps? It sounded like with the market growing and the suppliers pushing up prices, it sounds like there's a little bit of a parts shortage also happening in the marketplace that's pressuring the parts prices beyond just increases in-field?

Do you mean the material components that we use to build our products?

Right, the components that you use.

I'm not sure if it's a shortage. There's just a reluctance on the part of all of our suppliers to add capacity. Many of them are now getting on board to increase and to be a little more timely. But as I mentioned, one in particular which is a big one, is the delivery of chassis is an extended period. What I was saying earlier is I think by the end of the next quarter, we should start to see some relief on those because the manufacturers are ramping up now to meet the demand. But initially as we started to ramp up in the fourth quarter, we started to see some real delivery delays, but I don't think it's shortages. It's just the way they have been operating.

And how much of sales was international this quarter?

It has stayed relatively consistently in the mid-to high 30s. Now, international, what we are saying is the outside of the US, so it's I think last quarter was 38 and it's stayed in that range.

So, that implies that the growth in the US was also particularly strong this quarter?

Yes, as we've mentioned in our prepared remarks we have started to see some opportunities in the US, which of course is good for our overall business.

And are you seeing military and government, do you think they might pick up?

It has been a hard thing for us to predict over the years. At one point in '07, we had bunch of military business, and then I basically just didn't want to talk about it for awhile because we knew we were working on a bunch of opportunities, but you never know when they're going to pull the trigger. And then thankfully for us, they did give us that business, and a lot of in '09 and '10. So, in '09 and '10, we had, as you saw if you had a chance to look at our K at all, our military as a percentage of sales was up significantly. They were still working on a lot of different projects around the world, and I think that because we have been a good provider to government agencies and the military, various militaries, not only just US, but other militaries as well, we think that we still, as I think Andrew mentioned in his remarks, we believe we will see some further business in that area. But again, it is very hard to predict because they don't run on a quarterly reporting process like we do. So, they drag it out sometimes and it's excruciating, but that's the process.

Got it. Thanks very much for taking my questions.

Brandon Osten, Venator.

Hell of a backlog number there.

Thanks.

Dave, can you give me a sense -- I'm new to your conference calls. What percent of sales at this point the military and government like the higher margin roughly?

I don't have a specific number for the first quarter. I don't know if you do Andrew?

I don't have the specific number, but it was certainly probably less than 10%.

It has been down. It has been trailing down over the last couple of quarters.

Okay. What percent of sales would be used?

It was very small, very small.

Okay. So, to the extent that the mix problem should be to some extent behind you at this point, for the most part anyways -- gross margins went from the last couple quarters of 24% down to 20% in Q1, and you're saying that half of that was mix half of that was price input?

Right.

Let's say the 2.5% is gone for now. The other 2.5%, how much of that are you going to be able to recoup through price increases, do you think?

We have done increases that have been greater than that to some of our products. It varies depending on the strength that we have in the products, and some of our products do not have a lot of competition, we have taken prices up more than 2%, and in some of the ones that we do have, which are competitive, we cut them at 2%. So, it varies depending on the product, but certainly 2% or greater has been our price increase goal.

Okay. Cool. On the backlog, the guy from ROTH asked a bit, just to put it at different way. It was a fairly eye-popping jump. Was there anything that you would consider nonrecurring? Or was this just -- ?

No, and as Andrew mentioned, we have had a very nice change in our backlog from the standpoint that it is related more towards our commercial business. So, it has basically been generating at the Manitex Crane group, so it has been a nice result from just increase in business.

Okay, the last thing, you guys in the past have referred to CVS Ferrari's business prior to the acquisition. Do you guys just suggest that the business used to be -- you said the size of Manitex. I'm not sure if meant Manitex in aggregate or Manitex proper. But what was the prior size at its peak of CVS? And how much of the business have you guys structurally pared back, or how much of that previous peak could you guys get back based on the businesses that you have retained?

That last part is a very tough question because obviously there is market factors, and other factors involved there, but we have publicly disclosed some slides that show that historically we were roughly a $100 million business in the aggregate, and at the same time, CVS during those same periods were a $100 million business. Look, the point we were trying to make when we entered into it was that this potentially has some significant upside. However, you do make a good point. Coming out of the box, we are not going to be going after all those businesses because there was a reason why it went bankrupt. So, I would like to have a $100 million business, but I would like to have a profitable $100 million business.

Right, right. What I'm trying to say is structurally, in terms of what you have given up, if you got this back to peak, would it be a $50 million business; would it be a $40 million business; would be a $70 million business? Just a ballpark estimate because obviously there's some of that business that you don't want to get back.

What we can say, without getting myself in any hot water, is we have watched it now for a couple of quarters, and we have been running kind of $6 million a quarter in the courts system. So, we have been, obviously, in reorganization and doing it at $6 million a quarter. We obviously believe we can do higher than that, and we think that we will see that. It's a higher than $24 million a year, but certainly not a $100 million a year, not in the near-term.

Okay, and just one other thing I should have asked before. The price increases that you have implemented, were they consistently through Q1 or did they come towards the end of Q1, the beginning? Just trying to figure out how much of those were in the quarter.

They did not come in consistently through the first quarter. They have been implemented more towards the middle and end of the first quarter.

Fantastic. Thanks a lot guys. Great quarter.

(Operator Instructions) [Jeffrey Loan], Tuxedo Road Associates.

How much was accounting and legal expenses through the Q in the first quarter? And with the absence of ConExpo and those expenses, what type of impact do you think that will have in Q2?

Well, we mentioned in the fourth quarter release, and the annual release that we estimated expenses related to filings, and year-end audits, et cetera, would be around $250,000. My sense is we probably came in close to that or slightly less. I don't know Andrew if you have a better number, but that's the number that we reported on during the last quarter. Do you know Andrew it was -- ?

That's about right, Dave.

Okay. And then obviously, Jeff, we have stated several times that we had a roughly approximately $500,000 (multiple speakers) to ConExpo. (multiple speakers)

Those expenses are behind us in Q2.

That's correct.

The other question I have is --

Jeff, one other thing just to mention there. Q2 does have any expense of things like the proxy coming through as well. So, it doesn't all drop away.

Thanks Andrew.

Current portion of long-term debt. How do you expect to handle refinancing or eliminating that?

As we mentioned in our release, we paid off Liftking this quarter, which was just something that we have been paying, which is part that current portion of long-term debt. Every transaction that we have done has a note associated with it, generally solid paper, and then has certain payments that are generally 5 to 7 years at 6% is our standard rate. So, those will just be met out of current cash flow.

Okay. Thank you guys. You are doing a great job. Keep it up.

Michael Potter, Monarch Capital Group.

I just had a quick question again, like others on CVS. What have you done on the sales and marketing strategy for CVS? Have you been able to implement the sales and marketing strategy yet?

It's a good question and one that really, from a long-term standpoint has a really meaningful impact for us as shareholders. Coming out of the box, we have obviously reorganized, hired back some of the sales and marketing people that were associated with the other company, the older company, the previous company. We have also looked at people from outside the company, which are a little bit hampered. That is one of the reasons why this announcement that we made is so critical because it is a little bit hampered to the sales and marketing folks are really, the accountants will tell you, they are important. Everybody says that they're important. If you don't have sales and marketing, a lot of times you don't have a real growth company.

So, I think there is a lot more that we can do there, but we have certainly tried to put together a very positive view on the growth of the company, as we have started off. Everything that we said we were going to do we have done. So, I think we are building back up the reputation of the company in the marketplace. And I think that we have a long way to go, and once we get this closed, you will see us expand some of that sales and marketing because I think we have some people that are just waiting on the fringes for us to close it up, and then we will have some additional firepower there.

If I can just add as well, obviously, selectively, we have been marketing the products, and as we speak, there is a fairly significant show called Logistika, which is in Munich at the moment. And we have a pretty reasonable presence of people there, and that is part of what we are doing as well, Michael. So, we are out in the main thoroughfare making sure that the CVS name and the product is being well promoted.

Okay.

In an earlier question, I don't know if you had a chance to listen to the questions Michael, but the earlier question about how big you can be, that is obviously an important part of it. Once you get this close, and you start to really hit the marketplace, be interesting to see how fast and how far we can ramp this up.

Okay. All right. When does that show take place?

There is a show going on right now, but we have been attending, I think Andrew just mentioned that, but we have had shows in South America. We have been to a number of now the logistics and transportation shows that are around the world. We have been making sure that we have attendance at those shows.

Okay.

This is just part of the process of re-introducing, or introducing, the ongoing operations of the business to people who already know it, of course. But it is just fairly important for the sales and marketing to get yourself back into the marketplace.

And then on the ConExpo charge. Obviously, that was a very large show. I think it is once every 3 years.

That's correct.

Did any orders materialize from that show yet?

What we said in our release was that we had orders from the new distributors that we announced, which are very critical and we had 2 announcements that came out of the show. One that we added a distributor on the West Coast, which is a very large company. Some big opportunities for us there, and then we expanded our distribution up in Canada, which is also a very big market for us. And I think we mentioned that those were $4 million in orders. Is that right Andrew?

Yes.

Obviously, I am aware of other orders that we have gotten from the ConExpo show, but I think those are all in our $48 million backlog.

Got it. All right guys. I'll get back to you later.

Anything else John?

I am not showing any further questions. If you have any closing remarks.

Thank you John, and thank you everyone. I appreciate your interest in Manitex International. We look forward to the future. Thank you once again. Thanks John.

Thank you. Ladies and gentlemen, this concludes the Manitex International Incorporated first-quarter 2011 earnings conference call. Thank you for your participation. You may now disconnect.