MAXIM Crane Works of the USA has renegotiated its bank arrangements and reiterated its intention to trade its way out of its financial difficulties.
North America’s largest crane hire company has a debt mountain which stood at $810.9m on 31 December 2001. It has failed to make a net profit in the last three years, and last year experienced a 17.2% drop in earnings before interest, taxes, depreciation and amortisation (Ebitda).
For the year to 31 December 2001 total revenues increased 4% to $420.1m although rental margins deteriorated. Ebitda fell 17% to $100.2m. Ebitda from equipment rentals fell 15.6% to $98.7m.
The bottom line is that Maxim made a net loss of $42.2m in 2001, more than double the 2000 figure of $19.7m, and 1999’s $15.7m net loss.
A bright spot is its AVS heavy lift joint venture with Mammoet, from which Maxim earned $800,000 in 2001, (2000: $300,000).
Maxim’s capital expenditure in 2001 was $50.1m, compared with $72.6m in 2000 and $139.6m in 1999. Of this, expenditure on cranes and equipment for hire was $45.3m in 2001, compared to $45.0m in 2000 and $117.8m in 1999.
Despite its debts, Maxim was still in compliance with its financial covenants at the end of the year but expected to breach them in the months ahead. It has renegotiated its debt and implemented a financial restructuring programme. The deal includes a reduction in the amount available under the revolving credit facility from $425m to $300m and tighter conditions on spending. The company said that it intends to fund its working capital needs, capital expenditures and debt service requirements through cash flows generated from operations and borrowings under the senior credit facilities.
Within days of filing its 2001 results Maxim then reported its first quarter 2002 results which showed an 18% drop in revenues to $93.0m. Ebitda fell 27% to $21.0m. Net loss for the quarter was $8.1m, up 27% on 2001’s first quarter. During the first quarter of 2002 Maxim spent $4.5m on cranes, compared to $22.1m in the first three months of 2001.
