Manitex International, Inc.

Thank you, Erin. Good afternoon, ladies and gentlemen, and 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 17.

We will again be using slides to assist in this presentation, which are available through the webcast or directly from the Investor Relations section of our website.

Refer to the first slide regarding the Safe Harbor statement. Please review this statement and our SEC filings for further guidance on the risks associated with our company.

We've organized our call today as in -- similar as in the past, 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 #3. We entered 2012 with a solid backlog, which has continued to grow.

Our principal goal for 2012 is to deliver on our backlog, and the 35% increase in sales in the first quarter demonstrates the beginning of realizing our goal. However, we still have a long way to go.

Orders in the first quarter continue to come in at a rate which exceed our production levels. This is, as we've stated on numerous occasions, being driven by the North American energy markets and primarily at our Manitex division.

To respond to the demand for our products, we have increased production at our Manitex facility where we will realize steady gains for the rest of this year that should translate to a sequential quarterly revenue growth for our group.

Going beyond 2012, we are exploring further expansion at our other facilities to assist us in meeting the increases in demand, but realistically, these further production options will not be realized until 2013. Although in order to advance to the next level, we must begin the process now.

Also, orders are now extending into the second quarter of 2013, so we believe it is prudent for us to look now for other ways to grow our production. However, to be clear on this subject, we are not looking to build facilities or buy facilities but to better use the facilities we currently have within the Manitex International system.

Pertinent to our sales growth and, most importantly, for our shareholders, is the continued growth of our profits at a rate which is greater than the growth of our sales. We see no change in this trend as we progress through the 2012 quarters.

We will also continue to fund our growth, as we've done in the past, with current cash flow and use of our banking lines. And just as a reminder, our primary banking facility matures in 2015.

Finally, we are -- we believe we are poised to introduce several new products in the second half of 2012, which we believe will continue to expand our product offering in high-growth markets. However, we are not considering this introduction of these products in our 2012 results but rather we believe this will further expand our business in 2013 and beyond.

With that brief overview, I would now like to turn over to Andrew to review our results and discuss further our commercial development. And I'll wrap it up with comments on our outlook.

Andrew?

Thanks, David. And good afternoon, and welcome everyone.

Before discussing the company's first quarter 2012 results, I would like to start out by providing a general business update, which is summarized on Slide 4.

Overall, we are pleased to say that the strengthening business conditions we saw at the end of 2011 continued in pretty much the same vein as we moved through the first quarter. Our niche in the energy sector in North America, in particular, experienced high levels of growth in demand from the expansion of fields in several states and Canada.

Power line construction demand has remained firm, and general construction activity, which in historical terms is still low, has slowly increased during the first quarter and is also being helped by the relatively warm winter period in the Midwest.

European markets remained slow, being impacted by economic uncertainty and, where there is demand, the lack of available credit to the customers and stricter bank lending continues to impact customer's ability to purchase. In South America and other non-European geographies, inquiries related to general construction projects, mining and energy are showing more positive trends and we have seen a favorable response to recent marketing activity in these regions.

In summary, with oil and certain commodity prices still at a relative high, the energy and mining sectors continue to be the strongest demand sectors in the U.S., Canada and internationally, leading to demand for a range of Manitex products but especially for the larger-tonnage boom truck cranes.

With regard to our products, the demand that has been driven by the energy and power line construction sectors remained skewed towards our higher-tonnage boom trucks and specialized trailers. These products show very favorable comparisons to the first quarter of 2011 in terms of revenue and order intake, some of which is also a positive response to our continued product developments.

All our businesses continue to invest in R&D for new products and features to drive profitable growth in our target markets.

In this past quarter, we launched a new increased capacity 12,000-pound Noble-brand rough terrain forklift and new Load King trailer designs providing longer load and rougher terrain capability targeted at oilfield services. Also launched was a new trailer specifically designed around transporting the new Tier 4 Caterpillar dozers, which require higher road capacity.

These products from across the Manitex International portfolio demonstrates our objective to fulfill a wide range of product requirements in target growth markets and provide customers more reason to choose us for their product needs.

As we reported in April, our backlog at March 31 increased to a record $133 million, with order intake of approximately $50 million in the quarter, representing an order booking to revenue billing ratio of 2.2, even after accounting for the output increases we secured in the quarter. All product groups contributed to the increase, but boom trucks and specialized trailers in particular were very strong.

CVS was awarded a tender for almost $4 million for supplier terminal tractors to a major South African customer with an opportunity for a potential follow-on order. Also, during the quarter, Liftking delivered the first military material handling unit to the Royal Australian Air Force, and we expect the balance to ship during the second and third quarters.

As David has already discussed, our facilities in conjunction with the supply chain are ramping up output to match ongoing demand and this should convert to higher levels of sales each successive quarter in 2012.

Now turning to the financial results. Slide 5 of the presentation shows the key figures for the first quarter of 2012 with comparatives to both the first and fourth quarters of 2011.

First quarter 2012 revenues of $42.8 million increased $11.1 million or 35% from the first quarter of 2011. Continuing strong demand for Manitex boom truck products, particularly from the energy and power line construction sectors, was responsible for approximately 60% of the increase.

For these sectors, the higher-tonnage and higher-reach boom trucks represent the principal product in demand, complemented by more specialized midrange capacity units. The remaining increase in year-over-year revenues was generated by Load King trailers driven by strong end user demand in the energy sector and the equipment distribution segment due to improved demand for used equipment in rough terrain cranes.

Material handling products were slightly lower than the comparable period as lower military and governmental sales were only partially offset by increased sales of CVS container handling equipment. Compared to the fourth quarter of 2011, the increase in revenues was 17%, driven by planned increases in output to support the demand for Manitex product, which accounted for almost 70% of the increase.

In general, we have been pleased with the response of the supply chain to our ramp-up and, while this is still work in progress, we anticipate the pace of component deliveries will continue to accelerate in support of our objectives.

Quarter 1 2012 gross profit of $8.6 million was a $2.1 million increase or 33% year-over-year improvement driven by increased sales volume. Gross profit margin was 20% compared to 20.4% for the comparable quarter and 20.5% for the fourth quarter of 2011.

Our military sales has been relatively consistent over the recent periods and we currently do not see any significant change to this as we look forward in 2012. Material cost pressures continue to be addressed through a combination of sourcing changes and consolidation, sales price increases and improved absorption.

Net income for the quarter of $1.3 million or $0.11 a share was an increase of $0.8 billion, 183% or $0.07 per share over the first quarter of 2011. The 35% year-over-year improvement in revenue resulted in the previously discussed increase in gross profit, which is partially offset by additional expense for R&D of $0.3 million and SG&A of $0.5 million.

R&D activities focused on the launch of new product in the second half of the year, particularly again for the energy sector, but also new product for the general construction market. The SG&A increase reflects the impact of increased sales-related costs from the expansion of our sales organization and expenses from increased volume and additional performance-based compensation.

Overall, SG&A expense for the quarter improved as a percentage of sales and was equivalent to 12.6% of sales compared to 15.4% for the first quarter of 2011.

EBITDA for the quarter was $3.4 million or 7.9% of sales, an increase of $1.3 million or 65% from the first quarter of 2011 and is another record quarterly level for the company. Finally, as already discussed, backlog increased almost $50 million in the quarter, giving a record level at March 31 of $133.3 million.

Slide 6 is a bridge between the quarter 1 2011 net income of $0.4 million and the net income for quarter 1 2012 of $1.3 million. Walking through the reconciliation table, quarter 1 2012 sales increased $11.1 million, which provided a gross margin benefit of $2.3 million, but there's a small negative impact of $0.2 million from product mix and material cost.

The combination of the volume and mix provided a net gross profit increase of $2.1 million.

R&D increased by $0.3 million from our development activities and SG&A increased $0.5 million. Although we did not have the expense for the Con Expo expedition -- Exhibition of quarter 1 2011, as we have previously discussed, we've invested in additional sales and marketing resources in several of our operations to improve geographical coverage and support to our dealers and to drive further revenue increases.

These costs, together with volume-related sales expense and increased performance-related compensation, account for the SG&A increase.

Another key contributor to the net income movement between the 2 periods was an increase in tax expense of $0.4 million generated from an increase in taxable income since effective tax rate remained relatively constant, decreasing to 34% from 34.6% for the first quarter of 2011.

Slide 7 shows our key working capital and liquidity ratios. Working capital increased $3.5 million from December 31, 2011, with increases in receivables and inventory totaling $12.6 million being partially offset by increased accounts payable, short-term revolving credit facility and accrued expenses totaling $9.1 million.

This increase in working capital helped support first quarter growth of 35% in revenue and further projected quarterly revenue increases as we move through 2012.

Our current ratio of 2.1 and other working capital ratio has remained strong as we have moved through this growth phase, although this quarter, the current ratio was adversely affected as our specialized Canadian revolving export finance line moved into current liabilities from long term due to its renewal date in March 2013.

Inventories increased since the end of 2011 as we have ramped up production at our operations and the supply chain has started to respond to our schedule increases. Increased working process reflects the improvements of the pipeline of products for the shipments in the next quarter, with some longer-lead-time military orders in the backlog prepared to ship.

Slide 8 shows our capitalization and liquidity position. Our total debt increased $3.1 million in the first quarter from December 31, 2011, to $45.3 million or 3.6x trailing 12 months EBITDA.

Increased borrowing of $4.2 million on lines of credits and the Italian working capital financing were offset with repayments on other long-term debt of $1.1 million. Borrowing availability under the North American lines of credit was $5.8 million at the end of the quarter.

Trailing 12-month EBITDA of $12.5 million provides an interest coverage ratio of 4.8x at the end of the first quarter, an increase of 0.4x from the end of 2011.

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

Thank you, Andrew.

As I stated in our last quarterly call, our outlook and plan for 2012 is quite simple, that is, to execute on the growing demand for our products. This point became a little clearer to external parties with the recent announcement of the large increase in our backlog.

If we deliver on our orders, as we expect we will, 2012 will be a substantial growth year for Manitex. We are also hopeful that the breadth of the economy -- the breadth of the economic recovery will continue to expand to more conventional commercial markets as we go through 2012.

If we continue to see consistent demand for our products as we continue to increase our production capabilities, we see no reason why we should not see consistent growth in sales and profits extending beyond 2012 into 2013.

With that, Erin, we would like to open it up to questions.

Can we talk a little bit more about your utilizing available capacity and some other facilities outside of your Georgetown, Texas, facility, just in terms of what that will entail, where the opportunities lie and what -- realizing you're not building new buildings or anything, what kind of investment will be involved there? And is that an opportunity maybe to absorb some more overhead and possibly improve margins going forward?

Sure, Fred. I'll try to make this relatively simple, which, of course, as you know, is a complex process as we try to manufacture products that are similar but are different from one location to another.

As you know, we have several plants which most -- I guess, the most obvious one is Badger crane, which, obviously makes cranes, straight-mast cranes, similar to the cranes that we make in Manitex. And we have a facility which is very similar in size as what we have at Manitex but is producing at a much slower level.

And so we have a significant capability there to expand and we've -- we're in the initial stages to review that, which again I will not be -- we won't be taking our most complex products from Manitex and trying to produce those in other places, but we will be taking the more standard products and just increasing the amount of our capabilities on some of our backlog and some of our future orders. We are considering to look at some of those from some of our other facilities, and I gave an example of one.

But that'll have a -- they'll have a significant impact for us as we roll into 2013.

In terms of your ability to get sequential throughput improvements and execute on the backlog.

That's correct.

Okay, good. And on that note, just as we move closer and closer to 2013 and the backlog extends farther into next year, can you give us a sense for how you've seen order trends going since the end of the first quarter?

I mean, do you -- is there any sense that things may slow down in terms of the intensity of orders? Or are you kind of just continuing to see the same demand levels, particularly from the energy market?

Well, we haven't had a whole lot of period since the end the -- end of the quarter, but -- and I think I'm probably better off just staying consistent with what we've kind of said in our remarks. But that should be enough.

What we've said is that we have continued to receive orders which exceed our ability to produce and so we continue to -- continued up to this point to receive orders at a good pace.

I guess, just to, I guess, help characterize the backlog and your throughput capability at this point. Can you give us a sense of what your current lead times are for equipment and what you would view as typical lead times, I guess?

Just trying to get a sense of how much is sales being impacted right now by the bottlenecks in Georgetown.

So you -- I just want to make sure I understand: So you're asking if -- when generally we can be delivering on orders that we're receiving today?

Correct.

Well, just in general, while we have increased our production, and as I've said, we will continue to increase our production between now and the end of the year, that's all built into our production capabilities. And so generally speaking, orders that are received today will be produced -- or will be delivered in 2013.

So kind of a 6- to 9-month lead time as far as orders to shipment.

And today, at our Manitex facility, that's right.

Okay. And what would you view as, I guess, a more optimal or healthy level?

Well, I mean, we've been this high -- if you look at -- obviously, the cycles that we're in are different than the cycles -- this is a different cycle than what we experienced in previous

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within the next 3 to 6 months rather than 6 to 9 months to produce product and get it out. So I'm hopeful that we can increase our -- expand our production both internally and other facilities, shorten that time period and continue to, as if we're lucky, have an expansion and, as I said, a continuation of growth of the economic cycle [indiscernible] the cycle to include other areas and have this go for a couple of years.

Okay, that's helpful. And then also looking at the backlog and from a gross margin standpoint, can you give us a sense of the margins of the orders that are in your backlog versus what you've been reporting?

Or have you implemented price increases to help offset some of the material cost increases that you've seen?

Yes, and I'll try to give pretty general overview about that because I'm trying to not -- I want to control our expectations and keep -- and if you're modeling or anything like that in the marketplace, I would not significantly expand our gross margins. But because we have a mix of products, obviously we have the higher-margin products that are the most specialized ones that we have at Manitex, and that represents a certain percentage, a good percentage and a growing percentage of our backlog, clearly.

We've stated that many times recently. But we still have a large batch of other products, which have not experienced or not participating in the same growth period that we are at Manitex and until, a certain extent, at Load King.

And so you just have to blend all that together in the mix and you come up with -- we're hopeful that as we go through this and as a percentage of Manitex product gets larger in our production, we should see improvements, but we're just trying not to be too exuberant in our projections.

Okay. And then on price adjustment side, can you comment on that?

We did 2 price increases last year in the middle of the year and at the end of the year, so all of our backlog has -- the majority of our backlog has those price increases built in [indiscernible] for the rest of the Manitex products. And we've announced some -- an increase for products that we are taking now for delivery into 2013.

But on the material side, prices have been under control. So we haven't -- so we're -- right now, we're in a good environment from the standpoint that we certainly -- you certainly have suppliers that are taking advantage where they can.

But overall, material prices are pretty -- are holding pretty firm.

I was wondering if you could just dig a little bit more into the SG&A and give us a sense for, kind of going forward, maybe how we should think about fixed versus variable costs in the SG&A.

I'll take a stab and let Andrew respond to that as well. But I mean, generally, our -- of course, the variable part of our SG&A, generally speaking, is the selling part, of course.

And that's not a huge percentage of the SG&A. Obviously, the biggest percentage is the G&A.

And as Andrew mentioned in his remarks, we had some increases year-over-year in those areas primarily related to some additional people that we've added on, which we think is a good investment for the long-term benefit. But it's not -- while certainly -- I can't remember exactly what you said, Andrew.

300,000, 400,000, what was the number?

It was 400,000 on the quarter, yes.

We have 400,000. I wouldn't think that we would have increases from G&A to that magnitude as we go forward.

I think we'll have more consistent G&A quarter-over-quarter as we go through 2012. However, we also have a performance-related plan for our people.

And as they continue to hit those performance-related goals, we'll have performance-related bonuses that we accrue on a quarterly basis. And that was certainly a percentage of the increase as well.

Okay. So do you think, as a percentage of sales, we could potentially see it continue to move down or...

Well, yes, we were 12.6% in the first quarter. And as we've said, our sales, we expect to consistently grow quarter-over-quarter.

So while I wouldn't think that -- I wouldn't -- I'm not -- I don't think you're looking at a 2% or anything but you certainly would have some percentage as your sales increase and your cost stay relatively constant with maybe an increase to the selling component of that and continuous performance-related bonuses that

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but you're overall percentage will probably be down from the 12.6% as you model it.

Okay, that's helpful. And is there anything that you could say about in terms of just the mix and the backlog?

What percentage of your business do you think Manitex will represent going forward? Or anything you can kind of talk about in terms of just your product mix expectations?

Yes, I think, consistent with what we've said is that, clearly, as a percentage of our backlog, biggest percentage of the growth in the current backlog is in the Manitex products and those are, as you would expect, the higher-margin products. So I would hope, and we are -- our expectation are that, as we go through and roll through the quarters, we will be producing more Manitex as a percentage of our overall sales.

But again, I would caution you to you that we do have other products that don't participate or don't enjoy the same amount of margin that we have at Manitex, so you have to kind of look at a blended rate.

Okay. And then is the time to delivery pretty comparable across the product lines or...

Well, as you would expect, there were some that have very short periods. And we have others that, yes, we have already mentioned, our 6- to 9-month periods.

I just -- wondering maybe a little bit more directly. You talk about the capacity expansions.

Can you give us a little bit more granularity about the cadence of this capacity expansion figure as it relates to Manitex and, over the next few quarters, on maybe just a percentage basis, how we can think about how much capacity can come online?

Yes, and I'm glad you asked, Kristine, because again I want to mention, there will be -- we will be adding more facilities in the next couple of quarters. We'll be going through the process to increase that capacity outside of Manitex -- if I understand your question correctly, outside of Manitex for next year because the process will take -- in order to make sure that we have similar quality, consistency, the whole process will take some time.

And we're just starting that process now. And now the Manitex expansion at the Manitex facility, we've started at the end of the third quarter of last year, so that's well underway.

And that will just be consistent growth. We mentioned that we've added more personnel.

We've added another shift. We're just consistently growing.

We've increased our purchase orders from our suppliers, from our vendors. As you know, we run a variable cost model, so we buy off all of our components to our specifications.

And then once we receive all those components, we then assemble, which is not a very long process but it just takes time to receive all those components. So that will just be again consistent growth, as we saw in the first quarter, throughout the rest of the year.

Okay, that's helpful. And I guess a little bit on the component ramp-up.

Is it more specific in terms of your suppliers that are constrained? Or is it just generally broad-based that the suppliers need to ramp up?

We had specific suppliers and we've mentioned some of those in the past, and most of those have worked their way through. But we still have fabrication issues because, as you know, you've seen our facilities, everything from outriggers to each individual bar or each individual piece has to be fabricated someplace.

And a lot of those fabricators significantly reduced their capacity or went out of business after the '09 period, so it's a lot -- that's taking some more time. But again, we're making progress in all that and we continue to expect to make progress as we go forward.

But the main -- we've had issues over the years of chassis -- not years, but quarters of chassis, cylinders, and most of those things have worked their way through.

Okay. And then I was just wondering in terms of end markets.

Just generally, there's been some comments this earnings season around some of the natural gas activity has slowed down. And then I know your backlog continues to grow.

Are you seeing anything out there with commodities and/or any activity out there that suggests things might weaken here at least in the near term?

Well, you mentioned natural gas, and of course, that's quite obvious that it -- with the prices the way it is, people will be converting some of their rigs from gas to oil. But you know this business very well, it's long lead times, long projects, and so far it seems that the demand has stayed consistent.

We're certainly -- again depending on who you read and who you believe and all that stuff -- oil rigs are expanding significantly over the next few years and so we -- or at least they're proposed to expand significantly. And so we expect that, for now, our growth will continue.

We have not seen any -- while we certainly have seen a slowdown on the gas side, we've -- that's more than made up by mining and oil business.

Okay. And then finally, you call out -- in the recent news here, you call out the European market.

I was just wondering, at general, has it been weak ongoing, or did something worsen this quarter around the European markets?

Well, I think it's been -- again, this is not just something unique to us. It's been a slow process but a difficult process in Europe.

I kind of related to North America in 2009 from the standpoint that Spain, Italy, France, England -- I mean, there's a number of places that are in a slow period. Whether or not Germany is -- it's probably not in a recession but they certainly are cautious.

And so you just have a lot of port activity -- most of our activity in Europe is port activity through our CVS Ferrari business. And fortunately for us, that company has, for many, many years, expanded beyond just the European core base.

Andrew mentioned in his remarks a nice order for South Africa. We announced an order for Brazil not too long ago.

And so, I mean, it's just -- it's -- that the fact is Europe is in a difficult period and it looks like that's going to last for a while, so fortunately, we don't have a big investment there or -- and we're doing fine and we expect to do fine. But our real growth, our real strong growth, is through our other businesses right now, which are more than compensating for anything that we experience in Europe.

Just commenting on a couple of things. One was you -- you mentioned on the call today that your competitors are seeing the same sort of constraints that you're seeing.

And I guess my first question is, can you just talk a little bit more about that, what's going on in the industry right now?

Well, within -- again, our competitors, at least the public companies, are much, much, much larger than us, and so they have a much different product profile than we do. But in the niches that we're in, they are certainly in the same competitive -- have the same competitive situation as we have.

So they have small areas where they manufacture similar products as to -- that we do and they're experiencing the same lead times and that type of thing. So that's what I was trying -- that's the point I was trying to make, Josh.

Thanks for clearing it up for me.

Okay. And your comment about significant growth ahead.

I mean, I would think that the first quarter is a significant growth quarter, 35%, 180% earnings growth. Do you think that [indiscernible] continue at that pace or maybe you can go faster as we kind of proceed through the year?

Because I know last year you kind of leveled off at the end of the year. And it sounds like you're going to continue to grow now throughout the year.

Yes, I'm really glad you asked that, Josh. That's a good question and one I'm happy to clarify.

We -- last year, we made a conscious decision to level off and just be consistent because, if you remember, I mean, you really had the situation last year where people were really concerned about what was happening after the first quarter. And 2009 was very fresh in our memory.

We had -- it was very, very painful. And so we just didn't want to get caught with -- again, we run a model where we buy our inventory prior to production, so we have to invest, if you will, in our inventory, bringing it on board, produce it, ship it, collect it.

And we just didn't want to -- we were very cautious about -- so we started looking in the third quarter and say, "Well, gee, it should -- really looks like things are starting to happen." So we consciously then increased our production, or at least our anticipated production, going into 2012.

And the point I was trying to make was, we're going to continue to, because of what we did at the end of the third quarter and beginning in the fourth of last year, we will see that production go through. And of course, our backlog has supported that.

So that's the point I was trying to make, was that we -- whether or not we'll see 35% and 180%, that's some questions I can't answer at this point because we need to just see how fast and how hard we can deliver on it this year.

Okay. And then just last question for me.

I mean, clearly, with what you're seeing out there in your business and you've talked about in your Investor Presentations that your best year, I think, was either -- I think was '07 you were able to do [indiscernible] EBITDA margins. Will anything hold you back to get to that same 10% EBITDA margins that call, like, a $60 million run rate right now?

We were -- I think our best -- and Andrew, correct me if I'm wrong, but I think our best was 8.9%, is it?

Yes, I think that's correct, Dave.

Kind of ringing true with what you remember? And I don't see any reason why, as we continue to operate through 2012, that we can't return back to those levels, no.

Just a housekeeping question. Do you mind giving us the revenues by business unit for the quarter?

Have we ever done that, Andrew?

No. No, we don't actually put that information out.

We do split it out by the 2 segments and that will -- I can give you that. But we don't break it out by the individual operating units.

Okay. Well, how about the 2 segments?

What's the segments, then?

Just bear with me while I try and find it. And so our lifting equipment segment was, in the quarter, $39 million, and distribution was just under $5 million.

So predominantly, manufacturing, Mark.

Well, my question was very similar to Mark, so I don't know, but maybe you'll answer it, anyway. Just similar question, on the backlog, can you give us a sense, at least, how much of the backlog is comprised by Manitex orders that are yet to be delivered...

I think we've said on previous calls, Fred, I'll answer it this way, that more than 50% of our business is now in the energy-related area. And certainly, that is principally evolving in the Manitex groups.

Or I believe that our backlog is -- well, I don't believe, I know our backlog is more than 50% Manitex. Is that -- do you remember if we've said anything more than that, Andrew?

No, that's about what we've disclosed, yes.

Yes.

Okay, right. And you did actually say that on the last call, so it would be pretty reasonable to assume that, whatever it was last quarter, that level has increased likely?

That's correct, yes.

Okay, that's good. And can you talk a little bit about your cash flow expectations for the year?

I mean, I would -- presumably, you would have to continue to build working capital, but do you expect to generate positive cash flow later in the year?

Yes, it's a challenge, of course, as you're growing at these levels. But as I've said in my remarks, we've been funding everything.

We've gone from $95 million to -- and these are annual numbers, $95 million to $140 million. And if you just annualize the first quarter, it's over $170 million.

And we've funded everything through cash flow, our own cash flow and our own working capital lines. And we expect to do that as we go forward.

We also anticipate that, if we should see positive cash flow this year and any positive cash flow that we experienced beyond using it to grow our working capital, we will use that to retire our -- what I'd call our non-transactional debt, which is our debt related to acquisitions, which, if you added that up out of our 10-K or 10-Q or quarterly filings, it's around $7.8 million.

Just a quick question on the sales growth from here. Dave, I think you said that, because of what you guys did at the end of the third quarter, that you can continue to grow sales on a sequential basis, kind of looking quarter-over-quarter?

Yes, we will continue to grow. And I think we've said that in our prepared remarks.

We'll continue to grow this year quarter-over-quarter on a sequential basis throughout the year.

And do -- can you kind of size what would be reasonable in terms of expectations for us? I mean, is it kind of 2% to 3%, is it 5%?

Well, I think it's going to be higher than 2% or 3%.

To make it -- to cross -- to get out that backlog, I think it would be...

Yes. But as an earlier question, I'm not sure if it's going to be 35% or if it's going to be -- it really depends.

I mean we obviously have a -- and quarter-to-quarter, I mean, as you know, we have large pieces of equipment that go out, so if you've got 3 or 4 pieces that are going down the line and don't get out for the quarter, that could be $1.5 million for that quarter. So quarter-to-quarter, it gets a little dicey, but clearly, it's going to be what we expect: to have significant growth quarter-over-quarter.

Well, maybe I'll say it just a slightly different way. As you look at your supplier base now and before you look to other production facilities within your entire footprint, kind of just what you've got in Texas, what do you think your effective annual capacity is?

In the entire group or...

Yes, yes.

Oh, gosh. It would be...

Well, actually, I guess, really then, I'm thinking more about just the Manitex line.

Yes, I mean, we --- what we look at internally is that Manitex is -- that plant has had a range of -- the high range in the last cycle was $80 million. And we will significantly increase that and expand that through this period.

And so where -- it's also kind of strange where -- capacity, with lean manufacturing and all the things that people do these days, it just seems like it continues to expand. So I'm not really sure exactly how to answer that but other than to say, well, I know we have more room.

We're accomplishing that. We'll continue to accomplish that, but we also have other facilities which are significantly underutilized which should allow us to continue to grow so that we have hundreds of millions of dollars in capacity in sales as we roll through the years.

Okay, Erin, thank you very much. And thanks, everyone, for your interest in Manitex International.