Second-Quarter 2023
Highlights
- Net sales of $602.8 million, up 21.2% year-over-year
- Adjusted EBITDA(1) of $60.4 million, margin percentage of
10.0%
- Non-new machine sales of $150.4 million, up 8.1%
year-over-year
The Manitowoc Company, Inc. (NYSE: MTW) (the “Company” or
“Manitowoc”) today reported second-quarter net income of $20.2
million, or $0.57 per diluted share. Second-quarter adjusted net
income(1) was $26.6 million, or $0.75 per diluted share.
Net sales increased 21.2% year-over-year to $602.8 million and
were favorably impacted by $3.1 million from changes in foreign
currency exchange rates. Adjusted EBITDA(1) was $60.4 million, an
increase of $24.0 million or 65.9% from the prior year.
Orders were $550.5 million, a 26.8% increase from the prior
year. Orders were favorably impacted by $4.0 million from changes
in foreign currency exchange rates. Backlog decreased $51.1 million
to $1,024.6 million as of June 30, 2023 from $1,075.7 million as of
March 31, 2023.
“Manitowoc's strong second-quarter revenue and double-digit
adjusted EBITDA margin exceeded our expectations. We continue to
make progress on CRANES+50 with an 8.1% increase in non-new machine
sales year-over-year contributing to these results. The overall
market remained strong in the Americas which offset softness in the
European tower crane business,” commented Aaron H. Ravenscroft,
President and Chief Executive Officer of The Manitowoc Company,
Inc.
“Given our solid first half of the year and strong backlog, we
are raising our guidance for the full year. Focusing on the
long-term, we remain committed to investing in our four
breakthrough initiatives that fuel our CRANES+50 strategy,” added
Ravenscroft.
Updated Full-Year 2023 Guidance:
- Net sales - $2.1 billion to $2.2 billion
- Adjusted EBITDA - $150 million to $180 million
- Depreciation and amortization - $58 million to $62 million
- Interest expense - $33 million to $35 million
- Provision for income taxes, excluding discrete items - $16
million to $20 million
- Adjusted diluted earnings per share - $1.10 to $1.70
Investor Conference Call
The Manitowoc Company will host a conference call for security
analysts and institutional investors to discuss its second-quarter
2023 earnings results on Tuesday, August 8, 2023, 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, 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, rising interest
rates, recessionary concerns and distress in global credit markets,
as well as ongoing global supply chain constraints, labor
availability and cost pressures such as changes in raw material and
commodity costs, and logistics constraints, have had, and may
continue to have, a negative impact on Manitowoc’s business,
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 conflict between
Russia and Ukraine, 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), energy prices, inflation, consumer
behavior, supply chain, and credit and capital markets;
- 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;
- failure to comply with regulatory requirements related to the
products 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;
- risks and factors detailed in Manitowoc's 2022 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, 2022.
THE MANITOWOC COMPANY,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In millions, except per share
and share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net sales
$
602.8
$
497.2
$
1,111.1
$
956.2
Cost of sales
479.8
408.5
881.8
782.5
Gross profit
123.0
88.7
229.3
173.7
Operating costs and expenses:
Engineering, selling and administrative
expenses
87.6
69.3
162.7
135.8
Amortization of intangible assets
0.7
0.8
1.7
1.6
Restructuring expense
0.3
0.3
0.3
0.4
Total operating costs and expenses
88.6
70.4
164.7
137.8
Operating income
34.4
18.3
64.6
35.9
Other expense:
Interest expense
(9.0
)
(7.9
)
(17.1
)
(15.3
)
Amortization of deferred financing
fees
(0.4
)
(0.3
)
(0.7
)
(0.7
)
Other expense - net
(10.0
)
(2.1
)
(11.1
)
(2.3
)
Total other expense
(19.4
)
(10.3
)
(28.9
)
(18.3
)
Income before income taxes
15.0
8.0
35.7
17.6
Benefit for income taxes
(5.2
)
(7.1
)
(1.0
)
(0.6
)
Net income
$
20.2
$
15.1
$
36.7
$
18.2
Per Share Data and Share
Amounts:
Basic net income per common share
$
0.58
$
0.43
$
1.05
$
0.52
Diluted net income per common share
$
0.57
$
0.42
$
1.03
$
0.51
Weighted average shares outstanding -
basic
35,084,580
35,283,969
35,102,924
35,208,349
Weighted average shares outstanding -
diluted
35,650,143
35,550,942
35,766,952
35,564,882
THE MANITOWOC COMPANY,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions, except par value
and share amounts)
June 30, 2023
December 31, 2022
Assets
Current Assets:
Cash and cash equivalents
$
25.9
$
64.4
Accounts receivable, less allowances of
$5.4 and $5.3, respectively
274.8
266.3
Inventories — net
727.4
611.9
Notes receivable — net
8.7
10.6
Other current assets
32.2
45.3
Total current assets
1,069.0
998.5
Property, plant and equipment — net
341.9
335.3
Operating lease right-of-use assets
41.5
45.2
Goodwill
79.0
80.1
Other intangible assets — net
126.2
126.7
Other non-current assets
43.5
29.7
Total assets
$
1,701.1
$
1,615.5
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable and accrued expenses
$
492.4
$
446.4
Customer advances
20.2
21.9
Short-term borrowings and current portion
of long-term debt
6.7
6.1
Product warranties
45.4
48.8
Other liabilities
19.8
24.6
Total current liabilities
584.5
547.8
Non-Current Liabilities:
Long-term debt
380.7
379.5
Operating lease liabilities
31.8
34.3
Deferred income taxes
5.0
4.9
Pension obligations
55.1
51.7
Postretirement health and other benefit
obligations
7.8
8.2
Long-term deferred revenue
13.8
15.6
Other non-current liabilities
43.0
35.7
Total non-current liabilities
537.2
529.9
Stockholders' Equity:
Preferred stock (authorized 3,500,000
shares of $.01 par value; none outstanding)
—
—
Common stock (75,000,000 shares
authorized, 40,793,983 shares issued, 35,045,446 and 35,085,008
shares outstanding, respectively)
0.4
0.4
Additional paid-in capital
607.8
606.7
Accumulated other comprehensive loss
(101.9
)
(107.9
)
Retained earnings
141.0
104.3
Treasury stock, at cost (5,748,537 and
5,708,975 shares, respectively)
(67.9
)
(65.7
)
Total stockholders' equity
579.4
537.8
Total liabilities and stockholders'
equity
$
1,701.1
$
1,615.5
THE MANITOWOC COMPANY,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Cash Flows from Operating
Activities:
Net income
$
20.2
$
15.1
$
36.7
$
18.2
Adjustments to reconcile net income to
cash provided by (used for) operating activities:
Depreciation
14.2
15.6
28.1
31.7
Amortization of intangible assets
0.7
0.8
1.7
1.6
Stock-based compensation expense
2.3
0.9
5.4
4.0
Amortization of deferred financing
fees
0.4
0.3
0.7
0.7
Gain on sale of property, plant and
equipment
(0.2
)
(1.1
)
(0.2
)
(1.1
)
Net unrealized foreign currency
transaction losses (gains)
(2.1
)
4.4
(3.7
)
5.8
Income tax benefit from change in reserve
of uncertain tax positions
—
(11.9
)
—
(11.7
)
Deferred income taxes
(14.0
)
0.9
(14.0
)
0.9
Loss on foreign currency translation
adjustments
9.3
—
9.3
—
Other
—
0.9
—
0.9
Changes in operating assets and
liabilities
Accounts receivable
(24.2
)
8.5
(7.1
)
0.8
Inventories
(5.5
)
(39.8
)
(107.4
)
(109.2
)
Notes receivable
2.2
0.4
3.9
3.4
Other assets
8.4
(1.5
)
11.6
(1.1
)
Accounts payable
(36.7
)
6.5
19.5
61.1
Accrued expenses and other liabilities
7.8
0.1
12.4
(0.3
)
Net cash provided by (used for) operating
activities
(17.2
)
0.1
(3.1
)
5.7
Cash Flows from Investing
Activities:
Capital expenditures
(27.0
)
(8.1
)
(36.3
)
(16.8
)
Proceeds from sale of property, plant and
equipment
3.1
1.4
5.1
1.4
Acquisition of businesses
—
2.3
—
2.3
Net cash used for investing activities
(23.9
)
(4.4
)
(31.2
)
(13.1
)
Cash Flows from Financing
Activities:
Proceeds from (payments on) revolving
credit facility - net
12.0
—
12.0
(20.0
)
Payments on revolving credit facility
—
—
(10.0
)
—
Other debt - net
0.7
(1.5
)
(1.2
)
(2.3
)
Debt issuance and other debt related
costs
—
(1.8
)
—
(1.8
)
Exercise of stock options
—
—
0.3
0.1
Common stock repurchases
(2.0
)
(1.9
)
(5.5
)
(1.9
)
Net cash provided by (used for) financing
activities
10.7
(5.2
)
(4.4
)
(25.9
)
Effect of exchange rate changes on cash
and cash equivalents
(0.2
)
0.4
0.2
0.4
Net decrease in cash and cash
equivalents
(30.6
)
(9.1
)
(38.5
)
(32.9
)
Cash and cash equivalents at beginning of
period
56.5
51.6
64.4
75.4
Cash and cash equivalents at end of
period
$
25.9
$
42.5
$
25.9
$
42.5
Non-GAAP Financial Measures
Adjusted net income, Adjusted DEPS, EBITDA, adjusted EBITDA, 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 and six months ended June 30, 2023 and 2022 are
summarized as follows. All dollar amounts are in millions, except
per share data and share amounts.
Three Months Ended June
30,
2023
2022
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit (1)
$
123.0
$
—
$
123.0
$
88.7
$
1.1
$
89.8
Engineering, selling and administrative
expenses (2)
(87.6
)
10.8
(76.8
)
(69.3
)
0.3
(69.0
)
Amortization of intangible assets
(0.7
)
—
(0.7
)
(0.8
)
—
(0.8
)
Restructuring expense (3)
(0.3
)
0.3
—
(0.3
)
0.3
—
Operating income
34.4
11.1
45.5
18.3
1.7
20.0
Interest expense
(9.0
)
—
(9.0
)
(7.9
)
—
(7.9
)
Amortization of deferred financing
fees
(0.4
)
—
(0.4
)
(0.3
)
—
(0.3
)
Other expense - net (4)
(10.0
)
9.3
(0.7
)
(2.1
)
0.5
(1.6
)
Income before income taxes
15.0
20.4
35.4
8.0
2.2
10.2
(Provision) benefit for income taxes
(5)
5.2
(14.0
)
(8.8
)
7.1
(9.9
)
(2.8
)
Net income
$
20.2
$
6.4
$
26.6
$
15.1
$
(7.7
)
$
7.4
Diluted weighted average common shares
outstanding
35,650,143
35,650,143
35,550,942
35,550,942
Diluted net income per share
$
0.57
$
0.75
$
0.42
$
0.21
(1)
The adjustment in 2022 represents $1.1
million of fair value step up on rental fleet assets sold during
the period that was expensed within cost of sales.
(2)
The adjustment in 2023 represents $10.8
million of costs associated with a legal matter with the U.S.
Environmental Protection Agency ("U.S. EPA"). The adjustment in
2022 represents $0.1 million of other one-time costs associated
with the acquired businesses and $0.2 million of other one-time
charges.
(3)
Represents adjustments for restructuring
expense.
(4)
The adjustment in 2023 represents the
write-off of $9.3 million of non-cash foreign currency translation
adjustments from the curtailment of operations in Russia. The
adjustment in 2022 represents a $0.5 million write-off of other
debt related charges.
(5)
The adjustment in 2023 represents the net
income tax impact of items (2), (3), and (4), and the removal of a
$13.9 million benefit from the release of a valuation allowance.
The adjustment in 2022 represents the net income tax impacts of
items (1), (2), (3), and (4), the $10.9 million removal of an
income tax benefit related to the release of a U.S. Federal
uncertain tax position, and establishment of a $1.0 million
valuation allowance due to the Company's curtailment of operations
in Russia.
Six Months Ended June
30,
2023
2022
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit (1)
$
229.3
$
—
$
229.3
$
173.7
$
2.3
$
176.0
Engineering, selling and administrative
expenses (2)
(162.7
)
10.8
(151.9
)
(135.8
)
(4.3
)
(140.1
)
Amortization of intangible assets
(1.7
)
—
(1.7
)
(1.6
)
—
(1.6
)
Restructuring expense (3)
(0.3
)
0.3
—
(0.4
)
0.4
—
Operating income
64.6
11.1
75.7
35.9
(1.6
)
34.3
Interest expense
(17.1
)
—
(17.1
)
(15.3
)
—
(15.3
)
Amortization of deferred financing
fees
(0.7
)
—
(0.7
)
(0.7
)
—
(0.7
)
Other expense - net (4)
(11.1
)
9.3
(1.8
)
(2.3
)
0.5
(1.8
)
Income before income taxes
35.7
20.4
56.1
17.6
(1.1
)
16.5
(Provision) benefit for income taxes
(5)
1.0
(14.0
)
(13.0
)
0.6
(8.7
)
(8.1
)
Net income
$
36.7
$
6.4
$
43.1
$
18.2
$
(9.8
)
$
8.4
Diluted weighted average common shares
outstanding
35,766,952
35,766,952
35,564,882
35,564,882
Diluted net income per share
$
1.03
$
1.21
$
0.51
$
0.24
(1)
The adjustment in 2022 represents $2.0
million of fair value step up on rental fleet assets sold during
the period that was expensed within cost of sales and $0.3 million
of other one-time costs associated with the acquired business.
(2)
The adjustment in 2023 represents $10.8
million of costs associated with a legal matter with the U.S. EPA.
The adjustment in 2022 represents $4.8 million of income from the
previously written off long-term note receivable from the 2014
divestiture of the Company's Chinese joint venture, partially
offset by $0.3 million of other one-time costs associated with the
acquired business and $0.2 million of other one-time charges.
(3)
Represents adjustments for restructuring
expense.
(4)
The adjustment in 2023 represents the
write-off of $9.3 million of non-cash foreign currency translation
adjustments from the curtailment of operations in Russia. The
adjustment in 2022 represents a $0.5 million write-off of other
debt related charges.
(5)
The adjustment in 2023 represents the net
income tax impact of items (2), (3) and (4), and the removal of a
$13.9 million benefit from the release of a valuation allowance.
The adjustment in 2022 represents the net income tax impacts of
items (1), (2), (3), and (4), the $10.9 million removal of an
income tax benefit related to the release of a U.S. Federal
uncertain tax position, and establishment of a $1.0 million
valuation allowance due to the Company's curtailment of operations
in Russia.
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
and six months ended June 30, 2023 and 2022 are summarized as
follows. All dollar amounts are in millions.
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net cash provided by (used for) operating
activities
$
(17.2
)
$
0.1
$
(3.1
)
$
5.7
Capital expenditures
(27.0
)
(8.1
)
(36.3
)
(16.8
)
Free cash flows
$
(44.2
)
$
(8.0
)
$
(39.4
)
$
(11.1
)
EBITDA and Adjusted EBITDA
The Company defines EBITDA as net income (loss) before interest,
taxes, depreciation, and amortization. The Company defines adjusted
EBITDA as EBITDA plus the addback or subtraction of restructuring,
other expense, and certain other non-recurring items - net. The
reconciliation of net income (loss) to EBITDA, and further to
adjusted EBITDA for the three and six months ended June 30, 2023
and 2022 and trailing twelve months are summarized as follows. All
dollar amounts are in millions.
Three Months Ended June
30,
Six Months Ended June
30,
Trailing Twelve
2023
2022
2023
2022
Months
Net income (loss)
$
20.2
$
15.1
$
36.7
$
18.2
$
(105.1
)
Interest expense and amortization of
deferred financing fees
9.4
8.2
17.8
16.0
34.8
Provision (benefit) for income taxes
(5.2
)
(7.1
)
(1.0
)
(0.6
)
3.0
Depreciation expense
14.2
15.6
28.1
31.7
57.0
Amortization of intangible assets
0.7
0.8
1.7
1.6
3.2
EBITDA
39.3
32.6
83.3
66.9
(7.1
)
Restructuring expense
0.3
0.3
0.3
0.4
1.4
Asset impairment expense (1)
—
—
—
—
171.9
Other non-recurring items - net (2)
10.8
1.4
10.8
(2.0
)
11.8
Other expense - net (3)
10.0
2.1
11.1
2.3
3.0
Adjusted EBITDA
$
60.4
$
36.4
$
105.5
$
67.6
$
181.0
Adjusted EBITDA margin percentage
10.0
%
7.3
%
9.5
%
7.1
%
8.3
%
(1)
The adjustment for the trailing twelve
months represents non-cash goodwill and indefinite-lived intangible
asset impairment charges.
(2)
Other non-recurring items - net for the
three and six months ended June 30, 2023 relate to $10.8 million of
costs associated with a legal matter with the U.S. EPA. Other
non-recurring items - net for the three months ended June 30, 2022
relate to $1.1 million of fair value step up on rental fleet assets
sold during the period that was expensed within cost of sales, $0.1
million of other one-time costs associated with the acquired
businesses, and other one-time charges of $0.2 million. Other
non-recurring items - net for the six months ended June 30, 2022
relate to $4.8 million of income from the partial recovery of the
previously written off long-term note receivable from the 2014
divestiture of the Company's Chinese joint venture, partially
offset by $2.0 million of fair value step up on rental fleet assets
sold during the period that was expensed within cost of sales, $0.6
million of other one-time costs associated with the acquired
business, and other one-time charges of $0.2 million. Other
non-recurring items - net for the trailing twelve months relate to
$10.8 million of costs associated with a legal matter with the U.S.
EPA and $1.0 million of fair value step up on rental fleet assets
sold during the period that was expensed within cost of sales.
(3)
Other expense - net includes net foreign
currency gains (losses), other components of net periodic pension
costs, costs associated with legal matters, and other items in the
three, six, and trailing twelve months ended June 30, 2023 and the
three and six months ended June 30, 2022. Other expense – net for
the three, six, and trailing twelve months ended June 30, 2023
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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Ion Warner SVP, Marketing and Investor Relations +1
414-760-4805
Manitowoc (NYSE:MTW)
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