First-Quarter 2024
Highlights
- Net sales of $495.1 million, down 2.6% year-over-year
- Diluted net income per share of $0.12, $0.14 on an adjusted
basis(1)
- Adjusted EBITDA(1) of $31.3 million, margin percentage of
6.3%
- Adjusted return on invested capital(1) of 9.5%
The Manitowoc Company, Inc. (NYSE: MTW) (the “Company” or
“Manitowoc”) today reported first-quarter net income of $4.5
million, or $0.12 per diluted share. First-quarter adjusted net
income(1) was $5.1 million, or $0.14 per diluted share.
Net sales in the first quarter decreased 2.6% year-over-year to
$495.1 million. First-quarter adjusted EBITDA(1) was $31.3 million,
a decrease of $13.8 million or 30.6% from the prior year.
First-quarter orders were $554.1 million, a 5.6% increase from
the prior year, resulting in backlog at the end of the first
quarter of $971.3 million.
“Manitowoc’s first-quarter performance was in line with our
expectations. Although we continue to face unfavorable mix with the
continuing slowdown in the European tower crane market, our orders
in the first quarter were up 5.6% year-over-year; we ended the
quarter with a strong backlog. As we look at the balance of 2024,
we remain focused on reducing our inventory and generating free
cash flows,” commented Aaron H. Ravenscroft, President and Chief
Executive Officer of The Manitowoc Company, Inc.
Investor Conference Call
The Manitowoc Company will host a conference call for security
analysts and institutional investors to discuss its first-quarter
2024 earnings results on Wednesday, May 8, 2024, at 10:00 a.m. ET
(9:00 a.m. CT). A live audio webcast of the call, along with the
related presentation, will be available via webcast on the
Manitowoc website at http://ir.manitowoc.com in the "Events &
Presentations" section. A replay of the conference call will also
be available at the same location on the website.
About The Manitowoc Company, Inc.
The Manitowoc Company was founded in 1902 and has over a
120-year tradition of providing high-quality, customer-focused
products and support services to its markets. Headquartered in
Milwaukee, Wisconsin, United States, Manitowoc is one of the
world's leading providers of engineered lifting solutions.
Manitowoc, through its wholly-owned subsidiaries, designs,
manufactures, markets, distributes, and supports comprehensive
product lines of mobile hydraulic cranes, lattice-boom crawler
cranes, boom trucks, and tower cranes under the Aspen Equipment,
Grove, Manitowoc, MGX Equipment Services, National Crane, Potain,
and Shuttlelift brand names.
Footnote
(1)Adjusted net income, adjusted diluted net income per share
(“Adjusted DEPS”), EBITDA, adjusted EBITDA, adjusted operating
income, adjusted return on invested capital ("Adjusted ROIC"), and
free cash flows are financial measures that are not in accordance
with U.S. GAAP. For definitions and a reconciliation to the most
comparable U.S. GAAP numbers, please see the schedule of “Non-GAAP
Financial Measures” at the end of this press release.
Forward-looking Statements
This press release includes “forward-looking statements”
intended to qualify for the safe harbor from liability under the
Private Securities Litigation Reform Act of 1995. Any statements
contained in this press release that are not historical facts are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are
based on the current expectations of the management of the Company
and are subject to uncertainty and changes in circumstances.
Forward-looking statements include, without limitation, statements
typically containing words such as “intends,” “expects,”
“anticipates,” “targets,” “estimates,” and words of similar import.
By their nature, forward-looking statements are not guarantees of
future performance or results and involve risks and uncertainties
because they relate to events and depend on circumstances that will
occur in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking statements. Factors
that could cause actual results and developments to differ
materially include, among others:
- Macroeconomic conditions, including inflation, high interest
rates and recessionary concerns, as well as continuing global
supply chain constraints, labor constraints, logistics constraints
and cost pressures such as changes in raw material and commodity
costs, have had, and may continue to have, a negative impact on
Manitowoc’s ability to convert backlog into revenue which could,
and has, impacted its financial condition, cash flows, and results
of operations (including future uncertain impacts);
- actions of competitors;
- changes in economic or industry conditions generally or in the
markets served by Manitowoc;
- geopolitical events, including the ongoing conflicts in Ukraine
and in the Middle East, other political and economic conditions and
risks and other geographic factors, has had and may continue to
lead to market disruptions, including volatility in commodity
prices (including oil and gas), raw material and component costs,
energy prices, inflation, consumer behavior, supply chain, and
credit and capital markets, and could result in the impairment of
assets;
- changes in customer demand, including changes in global demand
for high-capacity lifting equipment, changes in demand for lifting
equipment in emerging economies and changes in demand for used
lifting equipment including changes in government approval and
funding of projects;
- the ability to convert backlog, orders and order activity into
sales and the timing of those sales;
- failure to comply with regulatory requirements related to the
products and aftermarket services the Company sells;
- the ability to capitalize on key strategic opportunities and
the ability to implement Manitowoc’s long-term initiatives;
- impairment of goodwill and/or intangible assets;
- changes in revenues, margins and costs;
- the ability to increase operational efficiencies across
Manitowoc and to capitalize on those efficiencies;
- the ability to generate cash and manage working capital
consistent with Manitowoc’s stated goals;
- work stoppages, labor negotiations, labor rates and labor
costs;
- the Company’s ability to attract and retain qualified
personnel;
- changes in the capital and financial markets;
- the ability to complete and appropriately integrate
acquisitions, strategic alliances, joint ventures or other
significant transactions;
- issues associated with the availability and viability of
suppliers;
- the ability to significantly improve profitability;
- realization of anticipated earnings enhancements, cost savings,
strategic options and other synergies, and the anticipated timing
to realize those savings, synergies and options;
- the ability to focus on customers, new technologies and
innovation;
- uncertainties associated with new product introductions, the
successful development and market acceptance of new and innovative
products that drive growth;
- the replacement cycle of technologically obsolete
products;
- risks associated with high debt leverage;
- foreign currency fluctuation and its impact on reported
results;
- the ability of Manitowoc's customers to receive financing;
- risks associated with data security and technological systems
and protections;
- the ability to direct resources to those areas that will
deliver the highest returns;
- risks associated with manufacturing or design defects;
- natural disasters, other weather events, pandemics and other
public health crises disrupting commerce in one or more regions of
the world;
- issues relating to the ability to timely and effectively
execute on manufacturing strategies, general efficiencies and
capacity utilization of the Company’s facilities;
- the ability to focus and capitalize on product and service
quality and reliability;
- issues associated with the quality of materials, components and
products sourced from third parties and the ability to successfully
resolve those issues;
- issues related to workforce reductions and potential subsequent
rehiring;
- changes in laws throughout the world, including governmental
regulations on climate change;
- the inability to defend against potential infringement claims
on intellectual property rights;
- the ability to sell products and services through distributors
and other third parties;
- issues affecting the effective tax rate for the year;
- acts of terrorism; and
- other risks and factors detailed in Manitowoc's 2023 Annual
Report on Form 10-K and its other filings with the United States
Securities and Exchange Commission.
Manitowoc undertakes no obligation to update or revise
forward-looking statements, whether as a result of new information,
future events, or otherwise. Forward-looking statements only speak
as of the date on which they are made. Information on the potential
factors that could affect the Company's actual results of
operations is included in its filings with the Securities and
Exchange Commission, including but not limited to its Annual Report
on Form 10-K for the fiscal year ended December 31, 2023.
THE MANITOWOC COMPANY,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In millions, except per share
and share amounts)
Three Months Ended March
31,
2024
2023
Net sales
$
495.1
$
508.3
Cost of sales
402.6
402.0
Gross profit
92.5
106.3
Operating costs and expenses:
Engineering, selling, and administrative
expenses
76.0
75.1
Amortization of intangible assets
0.7
1.0
Restructuring expense
0.6
—
Total operating costs and expenses
77.3
76.1
Operating income
15.2
30.2
Other income (expense):
Interest expense
(9.2
)
(8.1
)
Amortization of deferred financing
fees
(0.3
)
(0.3
)
Other income (expense) - net
0.7
(1.1
)
Total other expense
(8.8
)
(9.5
)
Income before income taxes
6.4
20.7
Provision for income taxes
1.9
4.2
Net income
$
4.5
$
16.5
Per Share Data and Share
Amounts
Basic net income per common share
$
0.13
$
0.47
Diluted net income per common share
$
0.12
$
0.46
Weighted average shares outstanding -
basic
35,265,449
35,121,473
Weighted average shares outstanding -
diluted
36,060,640
35,748,021
THE MANITOWOC COMPANY,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions, except par value
and share amounts)
March 31, 2024
December 31, 2023
Assets
Current Assets:
Cash and cash equivalents
$
31.5
$
34.4
Accounts receivable, less allowances of
$5.9 and $6.1, respectively
290.3
278.8
Inventories - net
748.0
666.5
Notes receivable — net
5.7
6.7
Other current assets
43.9
46.6
Total current assets
1,119.4
1,033.0
Property, plant, and equipment — net
357.5
366.1
Operating lease right-of-use assets
58.8
59.7
Goodwill
78.7
79.6
Intangible assets — net
123.3
125.6
Other non-current assets
42.9
42.7
Total assets
$
1,780.6
$
1,706.7
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable and accrued expenses
$
509.4
$
457.4
Customer advances
20.3
19.2
Short-term borrowings and current portion
of long-term debt
42.5
13.4
Product warranties
41.3
47.1
Other liabilities
18.7
26.2
Total current liabilities
632.2
563.3
Non-Current Liabilities:
Long-term debt
372.7
358.7
Operating lease liabilities
46.6
47.2
Deferred income taxes
7.4
7.5
Pension obligations
54.9
55.8
Postretirement health and other benefit
obligations
5.4
5.6
Long-term deferred revenue
21.1
24.1
Other non-current liabilities
44.3
41.2
Total non-current liabilities
552.4
540.1
Stockholders' Equity:
Preferred stock (3,500,000 shares
authorized of $.01 par value; none outstanding)
—
—
Common stock (75,000,000 shares
authorized, 40,793,983 shares issued, 35,540,950 and 35,094,993
shares outstanding, respectively)
0.4
0.4
Additional paid-in capital
608.5
613.1
Accumulated other comprehensive loss
(98.9
)
(86.4
)
Retained earnings
148.0
143.5
Treasury stock, at cost (5,253,033 and
5,698,990 shares, respectively)
(62.0
)
(67.3
)
Total stockholders' equity
596.0
603.3
Total liabilities and stockholders'
equity
$
1,780.6
$
1,706.7
THE MANITOWOC COMPANY,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
Three Months Ended March
31,
2024
2023
Cash Flows from Operating
Activities:
Net income
$
4.5
$
16.5
Adjustments to reconcile net income to
cash provided by (used for) operating activities:
Depreciation expense
14.7
13.9
Amortization of intangible assets
0.7
1.0
Stock-based compensation expense
3.7
3.1
Amortization of deferred financing
fees
0.3
0.3
Loss on sale of property, plant, and
equipment
0.2
—
Changes in operating assets and
liabilities:
Accounts receivable
(15.3
)
17.1
Inventories
(89.1
)
(100.6
)
Notes receivable
1.5
1.7
Other assets
1.1
1.6
Accounts payable
56.6
56.2
Accrued expenses and other liabilities
(9.5
)
4.6
Net cash provided by (used for) operating
activities
(30.6
)
15.4
Cash Flows from Investing
Activities:
Capital expenditures
(12.2
)
(10.6
)
Proceeds from sale of fixed assets
0.2
2.0
Net cash used for investing activities
(12.0
)
(8.6
)
Cash Flows from Financing
Activities:
Proceeds from (payments on) revolving
credit facility - net
14.0
(10.0
)
Proceeds from (payments on) other debt -
net
29.1
(1.9
)
Exercises of stock options
—
0.3
Common stock repurchases
—
(3.5
)
Other financing activities
(2.9
)
—
Net cash provided by (used for) financing
activities
40.2
(15.1
)
Effect of exchange rate changes on cash
and cash equivalents
(0.5
)
0.4
Net decrease in cash and cash
equivalents
(2.9
)
(7.9
)
Cash and cash equivalents at beginning of
period
34.4
64.4
Cash and cash equivalents at end of
period
$
31.5
$
56.5
Non-GAAP Financial Measures
Adjusted net income, Adjusted DEPS, EBITDA, adjusted EBITDA,
adjusted operating income, Adjusted ROIC, and free cash flows are
financial measures that are not in accordance with U.S. GAAP.
Manitowoc believes these non-GAAP financial measures provide
important supplemental information to both management and investors
regarding financial and business trends used in assessing its
results of operations. Manitowoc believes excluding specified items
provides a more meaningful comparison to the corresponding
reporting periods and internal budgets and forecasts, assists
investors in performing analysis that is consistent with financial
models developed by investors and research analysts, provides
management with a more relevant measure of operating performance,
and is more useful in assessing management performance.
Adjusted Net Income and Adjusted DEPS
The Company defines adjusted net income as net income plus the
addback or subtraction of restructuring and other non-recurring
items. Adjusted DEPS is defined as adjusted net income divided by
diluted weighted average shares outstanding. Diluted weighted
average common shares outstanding are adjusted for the effect of
dilutive stock awards when there is net income on an adjusted
basis, as applicable. The reconciliation of net income and diluted
net income per share to adjusted net income and Adjusted DEPS for
the three months ended March 31, 2024 and 2023 are summarized as
follows. All dollar amounts are in millions, except per share data
and share amounts.
Three Months Ended March
31,
2024
2023
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit
$
92.5
$
—
$
92.5
$
106.3
$
—
$
106.3
Engineering, selling, and administrative
expenses (1)
(76.0
)
0.1
(75.9
)
(75.1
)
—
(75.1
)
Amortization of intangible assets
(0.7
)
—
(0.7
)
(1.0
)
—
(1.0
)
Restructuring expense (2)
(0.6
)
0.6
—
—
—
—
Operating income
15.2
0.7
15.9
30.2
—
30.2
Interest expense
(9.2
)
—
(9.2
)
(8.1
)
—
(8.1
)
Amortization of deferred financing
fees
(0.3
)
—
(0.3
)
(0.3
)
—
(0.3
)
Other income (expense) - net
0.7
—
0.7
(1.1
)
—
(1.1
)
Income before income taxes
6.4
0.7
7.1
20.7
—
20.7
Provision for income taxes (3)
(1.9
)
(0.1
)
(2.0
)
(4.2
)
—
(4.2
)
Net income
$
4.5
$
0.6
$
5.1
$
16.5
$
—
$
16.5
Diluted weighted average common shares
outstanding
36,060,640
36,060,640
35,748,021
35,748,021
Diluted net income per common share
$
0.12
$
0.14
$
0.46
$
0.46
(1)
The adjustment in 2024 represents $0.1 million of one-time
costs.
(2)
The adjustment in 2024 represents the addback of restructuring
expense.
(3)
The adjustment in 2024 represents the net income tax impacts of
items (1) and (2).
Adjusted ROIC
The Company defines Adjusted ROIC as adjusted net operating
profit after tax (“Adjusted NOPAT”) for the trailing twelve-months
ended divided by the five-quarter average of invested capital.
Adjusted NOPAT is calculated for each quarter by taking operating
income plus the addback of amortization of intangible assets and
the addback or subtraction of restructuring expenses, certain other
non-recurring items - net and provision for income taxes, which is
determined using a 15% tax rate. Invested capital is defined as net
total assets less cash and cash equivalents and income tax
assets/liabilities - net plus short-term and long-term debt. Income
taxes are defined as income tax payables/receivables, net deferred
tax assets/liabilities, and uncertain tax positions.
The Company’s Adjusted ROIC as of March 31, 2024 was 9.5%. Below
is the calculation of Adjusted ROIC as of March 31, 2024.
Three Months Ended
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
Trailing
Twelve
Months
Operating income
$
15.2
$
9.8
$
18.0
$
34.4
$
77.4
Amortization of intangible assets
0.7
0.8
0.7
0.7
2.9
Restructuring expense
0.6
0.3
0.7
0.3
1.9
Other non-recurring items - net1
0.1
10.8
0.2
10.8
21.9
Adjusted operating income
16.6
21.7
19.6
46.2
104.1
Provision for income taxes
(2.5
)
(3.3
)
(2.9
)
(6.9
)
(15.6
)
Adjusted NOPAT
$
14.1
$
18.4
$
16.7
$
39.3
$
88.5
March 31,
2024
December 31,
2023
September 30,
2023
June 30,
2023
March 31,
2023
5-Quarter
Average
Total assets
$
1,780.6
$
1,706.7
$
1,692.2
$
1,701.1
$
1,691.1
1,714.3
Total liabilities
(1,184.6
)
(1,103.4
)
(1,119.2
)
(1,121.7
)
(1,138.3
)
(1,133.4
)
Net total assets
596.0
603.3
573.0
579.4
552.8
580.9
Cash and cash equivalents
(31.5
)
(34.4
)
(40.0
)
(25.9
)
(56.5
)
(37.7
)
Short-term borrowings and current portion
of long-term debt
42.5
13.4
30.3
6.7
7.9
20.2
Long-term debt
372.7
358.7
368.5
380.7
369.5
370.0
Income tax (assets) liabilities - net
(3.4
)
(2.6
)
(4.3
)
(2.1
)
6.3
(1.2
)
Invested capital
$
976.3
$
938.4
$
927.5
$
938.8
$
880.0
$
932.2
Adjusted ROIC
9.5
%
(1)
Other non-recurring items - net for the
three months ended March 31, 2024 relate to $0.1 million of
one-time costs. Other non-recurring items – net for the trailing
twelve months relate to $21.2 million of costs associated with a
legal matter with the U.S. EPA and $0.7 million of one-time costs.
Refer to the Company’s previously filed Form 10-K and Form 10-Qs
for a description of other non-recurring items - net for the three
months ended December 31, 2023, September 30, 2023, and June 30,
2023.
Free Cash Flows
The Company defines free cash flows as net cash provided by
(used for) operating activities less cash outflow from investment
in capital expenditures. The reconciliation of net cash provided by
(used for) operating activities to free cash flows for the three
months ended March 31, 2024 and 2023 are summarized as follows. All
dollar amounts are in millions.
Three Months Ended March
31,
2024
2023
Net cash provided by (used for) operating
activities
$
(30.6
)
$
15.4
Capital expenditures
(12.2
)
(10.6
)
Free cash flows
$
(42.8
)
$
4.8
EBITDA and Adjusted EBITDA
The Company defines EBITDA as net income before interest, taxes,
depreciation, and amortization. The Company defines adjusted EBITDA
as EBITDA plus the addback or subtraction of restructuring, other
income (expense) - net, and certain other non-recurring items -
net. The reconciliation of net income to EBITDA, and further to
adjusted EBITDA for the three months ended March 31, 2024 and 2023
and trailing twelve months are summarized as follows. All dollar
amounts are in millions.
Three Months Ended March
31,
Trailing Twelve
2024
2023
Months
Net income
$
4.5
$
16.5
$
27.2
Interest expense and amortization of
deferred financing fees
9.5
8.4
36.3
Provision for income taxes
1.9
4.2
2.7
Depreciation expense
14.7
13.9
57.4
Amortization of intangible assets
0.7
1.0
2.9
EBITDA
31.3
44.0
126.5
Restructuring expense
0.6
—
1.9
Other non-recurring items - net (1)
0.1
—
21.9
Other (income) expense - net (2)
(0.7
)
1.1
11.2
Adjusted EBITDA
$
31.3
$
45.1
$
161.5
Adjusted EBITDA margin percentage
6.3
%
8.9
%
7.3
%
(1)
Other non-recurring items - net for the
three months ended March 31, 2024 relate to $0.1 million of
one-time costs. Other non-recurring items - net for the trailing
twelve months relate to $21.2 million of costs associated with a
legal matter with the U.S. EPA and $0.7 million of one-time
costs.
(2)
Other (income) expense - net includes net
foreign currency gains (losses), other components of net periodic
pension costs, and other items in the three and trailing twelve
months ended March 31, 2024 and the three months ended March 31,
2023. Other (income) expense – net for the trailing twelve months
includes a $9.3 million write-off of non-cash foreign currency
translation adjustments from the curtailment of operations in
Russia.
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