Company improves liquidity position through
disciplined working capital management; financial results in line
with guidance
The Manitowoc Company, Inc. (NYSE: MTW) (“Manitowoc”) today
reported fourth-quarter 2016 net sales of $378.2 million versus
$543.1 million in the comparable period in 2015.
On a GAAP basis, the Company reported a net loss of ($33.4)
million, or ($0.24) per diluted share, in the fourth-quarter 2016
versus net income of $43.5 million, or $0.32 per diluted share, in
the fourth-quarter 2015. The Company’s loss from continuing
operations in the fourth-quarter 2016 and 2015 was ($32.0) million
and ($12.9) million, respectively.
Non-GAAP adjusted net loss from continuing operations(1) was
($32.6) million, or ($0.23) per diluted share, in the
fourth-quarter 2016 versus non-GAAP adjusted net income from
continuing operations of $7.1 million, or $0.05 per diluted share,
in the fourth-quarter 2015.
“During the fourth-quarter we experienced demand levels
consistent with prior year trends with sequential improvement in
revenue as well as incoming orders. Our mobile orders in the
Americas and the Middle East were affected by continued low rental
rates, weakness in used equipment prices and continued low oil
prices. Our tower crane business continued to perform as expected,
mainly attributable to positive market sentiment in Europe
complemented by our new product introductions. While the global
crane market continues to be dynamic, we remain cautiously
optimistic about the long-term market fundamentals,” commented
Barry L. Pennypacker, President and Chief Executive Officer of The
Manitowoc Company, Inc.
“Our management team delivered a substantial improvement in
operational working capital in the quarter which allowed us to
completely pay down our outstanding revolver balance. This would
not have been possible without the structured approach that The
Manitowoc Way provides for operational excellence. As a result, we
saw a significant improvement in our net debt position during the
quarter,” said Pennypacker.
“We remain committed to achieving our long-term goals of
double-digit operating margins by 2020, investing appropriately for
market growth, continuing to be a market leader in innovation and
increasing the velocity in all our business processes. Executing on
these strategic priorities will enable us to be the market leader
in lifting technology as judged by our customers, shareholders and
employees,” concluded Pennypacker.
Financial Results
Fourth-quarter 2016 net sales were $378.2 million versus $543.1
million in the fourth-quarter 2015. The year-over-year decrease was
primarily due to continued weak demand for the Company’s products
in North America and the Middle East, which was partially offset by
year-over-year growth in the European market, mainly due to
continued strength in residential and commercial construction
trends and new product introductions.
GAAP operating loss for the fourth-quarter 2016 was ($23.8)
million, compared to ($13.9) million in the fourth-quarter 2015.
The fourth-quarter 2016 GAAP operating loss includes $6.3 million
of restructuring costs mainly related to plant relocation and
severance expenses.
Non-GAAP adjusted operating loss(1) for the fourth-quarter 2016
was ($16.4) million compared to non-GAAP adjusted operating
income(1) of $11.1 million in the same period last year. This
resulted in an adjusted operating margin of (4.3) percent for the
fourth-quarter 2016 versus 2.0 percent for the fourth-quarter
2015.
Backlog totaled $323.8 million at December 31, 2016, down from
the third-quarter 2016 backlog of $353.6 million. Fourth-quarter
2016 orders of $348.3 million were lower by $76.2 million or 18%
compared to the fourth-quarter 2015 but up sequentially by $38.4
million or 12%. The year-over-year order decline is due to weaker
North American and Middle East demand, partially offset by growth
in Western Europe.
Cash Flow
Net cash flow from continuing operating activities in the
fourth-quarter 2016 was $57.8 million, compared to $51.3 million
from fourth-quarter 2015. Fourth-quarter capital expenditures
totaled $11.1 million as compared to $23.0 million in the
fourth-quarter 2015.
The Company’s cash totaled $69.9 million at December 31, 2016,
an increase of $27.0 million from the end of the third quarter
2016. This increase was primarily driven by a reduction in
operating working capital during the fourth quarter, mainly related
to inventory. In the fourth quarter, the Company completely paid
down its previously outstanding revolver balance of $20 million
through improved working capital management.
Full-Year 2017 Guidance
- Revenue – down approximately 8-10%
year-over-year;
- Adjusted EBITDA – approximately $41 to
$59 million;
- Adjusted operating income % –
approximately zero to 1%;
- Depreciation – approximately $40 to $45
million;
- Amortization of intangibles –
approximately $2 to $2.5 million; and
- Capital expenditures – approximately
$30 million
The Company provides guidance on a non-GAAP basis as there is
uncertainty in the timing and magnitude of future charges that
would be included in the reported GAAP results.
Investor Conference Call
On Thursday, February 2nd, 2017, at 10:00 a.m. ET (9:00 a.m.
CT), The Manitowoc Company’s senior management will discuss its
fourth-quarter earnings results and full-year 2017 outlook during a
live conference call for security analysts and institutional
investors. A live audio webcast of the call, along with the related
presentation, can be accessed in the Investor Relations section of
Manitowoc’s website at www.manitowoc.com. A replay of the
conference call will also be available at the same location on the
website.
About The Manitowoc Company, Inc.
Founded in 1902, The Manitowoc Company, Inc. is a leading global
manufacturer of cranes and lift solutions with manufacturing,
distribution, and service facilities in 20 countries. Manitowoc is
recognized as one of the premier innovators and providers of
crawler cranes, tower cranes, and mobile cranes for the heavy
construction industry, which are complemented by a slate of
industry-leading aftermarket product support services. In 2016,
Manitowoc’s revenues totaled $1.6 billion, with over half of these
revenues generated outside the United States.
Footnote
(1) Non-GAAP adjusted net (loss) income from continuing
operations and non-GAAP adjusted operating (loss) income are
financial measures that are not in accordance with GAAP. For a
reconciliation to the comparable GAAP numbers please see schedule
of “Non-GAAP Financial Measures” at the end of this press release.
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
from net loss and operating loss 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.
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:
- unanticipated changes in revenues,
margins, costs, and capital expenditures;
- the ability to significantly improve
profitability;
- potential delays or failures to
implement specific initiatives within the restructuring
program;
- issues relating to the ability to
timely and effectively execute on manufacturing strategies,
including issues relating to plant closings, new plant start-ups,
and/or consolidations of existing facilities and operations, and
its ability to achieve the expected benefits from such
actions;
- the ability to direct resources to
those areas that will deliver the highest returns;
- uncertainties associated with new
product introductions, the successful development and market
acceptance of new and innovative products that drive growth;
- the ability to focus on the customer,
new technologies, and innovation;
- the ability to focus and capitalize on
product quality and reliability;
- the ability to increase operational
efficiencies across Manitowoc’s business segment and to capitalize
on those efficiencies;
- the ability to capitalize on key
strategic opportunities and the ability to implement Manitowoc’s
long-term initiatives;
- the ability to generate cash and manage
working capital consistent with Manitowoc’s stated goals;
- the ability to convert order and order
activity into sales and the timing of those sales;
- pressure of financing leverage;
- matters impacting the successful and
timely implementation of ERP systems;
- foreign currency fluctuations and their
impact on reported results and hedges in place with Manitowoc;
- changes in raw material and commodity
prices;
- unexpected issues associated with the
quality of materials and components sourced from fourth parties and
the resolution of those issues;
- unexpected issues associated with the
availability and viability of suppliers;
- the risks associated with growth;
- geographic factors and political and
economic conditions and risks;
- actions of competitors;
- changes in economic or industry
conditions generally or in the markets served by Manitowoc;
- unanticipated 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;
- global expansion of customers;
- the replacement cycle of
technologically obsolete cranes;
- the ability of Manitowoc's customers to
receive financing;
- efficiencies and capacity utilization
of facilities;
- issues related to workforce reductions
and subsequent rehiring;
- work stoppages, labor negotiations,
labor rates, and temporary labor costs;
- government approval and funding of
projects and the effect of government-related issues or
developments;
- the ability to complete and
appropriately integrate restructurings, consolidations,
acquisitions, divestitures, strategic alliances, joint ventures,
and other strategic alternatives;
- realization of anticipated earnings
enhancements, cost savings, strategic options and other synergies,
and the anticipated timing to realize those savings, synergies, and
options;
- unanticipated issues affecting the
effective tax rate for the year;
- unanticipated changes in the capital
and financial markets;
- risks related to actions of activist
shareholders;
- changes in laws throughout the
world;
- natural disasters disrupting commerce
in one or more regions of the world;
- risks associated with data security and
technological systems and protections;
- acts of terrorism; and
- risks and other factors cited in
Manitowoc's 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, 2015.
THE MANITOWOC COMPANY, INC. Unaudited Consolidated
Financial Information For the Three and Twelve Months Ended
December 31, 2016 and 2015 (In millions, except share data)
INCOME STATEMENT
Three Months
Ended Twelve Months Ended December 31,
December 31, 2016 2015 2016 2015
Net sales $ 378.2 $ 543.1 $ 1,613.1 $ 1,865.7 Cost of sales
332.7 454.9 1,359.8
1,533.5 Gross profit 45.5 88.2 253.3 332.2
Engineering, selling and administrative expenses 61.9 77.1 280.7
316.9 Asset impairment expense - 15.3 96.9 15.3 Restructuring
expense 6.3 9.0 23.4 9.4 Amortization expense 0.8 0.7 3.0 3.0 Other
0.3 0.0 2.6 0.0
Operating loss
(23.8 ) (13.9 ) (153.3 ) (12.4 ) Amortization of deferred financing
fees (0.4 ) (1.0 ) (2.2 ) (4.2 ) Interest expense (10.0 ) (24.3 )
(39.6 ) (95.6 ) Loss on debt extinguishment - (0.2 ) (76.3 ) (0.2 )
Other (expense) income - net (0.4 ) 1.2
3.3 1.4 Loss from continuing operations before
taxes (34.6 ) (38.2 ) (268.1 ) (111.0 ) (Benefit) provision for
taxes on income (2.6 ) (25.3 ) 100.5
(41.1 ) Loss from continuing operations (32.0 ) (12.9 )
(368.6 ) (69.9 ) Discontinued operations: (Loss) income from
discontinued operations, net of income taxes (1.4 )
56.4 (7.2 ) 135.4 Net (loss) income $
(33.4 ) $ 43.5 $ (375.8 ) $ 65.5 BASIC INCOME (LOSS)
PER SHARE: Loss from continuing operations $ (0.23 ) $ (0.09 ) $
(2.68 ) $ (0.51 ) (Loss) income from discontinued operations
(0.01 ) 0.41 (0.05 ) 1.00 BASIC
(LOSS) INCOME PER SHARE $ (0.24 ) $ 0.32 $ (2.73 ) $ 0.48
DILUTED INCOME (LOSS) PER SHARE: Loss from continuing
operations $ (0.23 ) $ (0.09 ) $ (2.68 ) $ (0.51 ) (Loss) income
from discontinued operations (0.01 ) 0.41
(0.05 ) 1.00 DILUTED (LOSS) INCOME PER SHARE $
(0.24 ) $ 0.32 $ (2.73 ) $ 0.48 AVERAGE SHARES
OUTSTANDING: Average Shares Outstanding - Basic 138,887,828
136,192,245 137,767,109 136,036,192 Average Shares Outstanding -
Diluted 138,887,828 136,192,245 137,767,109 136,036,192
THE MANITOWOC COMPANY, INC. Unaudited Consolidated
Financial Information For the Years Ended December 31, 2016 and
2015 (In millions)
BALANCE SHEET
December 31, December 31,
ASSETS 2016 2015 Current assets: Cash and
temporary investments $ 69.9 $ 31.5 Accounts receivable - net 134.4
155.7 Inventories - net 429.0 489.2 Notes receivable 58.1 65.1
Other current assets 54.0 45.9 Current assets of discontinued
operations - 254.2 Total current assets 745.4 1,041.6
Property, plant and equipment - net 308.8 410.7 Intangible assets -
net 413.7 425.8 Other long-term assets 45.6 177.4 Long-term assets
held for sale - 5.5 Long-term assets of discontinued operations
- 1,501.5 TOTAL ASSETS $ 1,513.5 $ 3,562.5
LIABILITIES & STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable and accrued expenses $ 316.9 $ 436.3
Short-term borrowings and current portion of long-term debt 12.4
67.2 Customer advances 21.0 10.3 Product warranties 36.5 35.9
Product liabilities 21.7 21.9 Current liabilities of discontinued
operations - 312.0 Total current liabilities 408.5
883.6 Long-term debt 269.1 1,330.4 Other non-current
liabilities 245.4 286.4 Long-term liabilities of discontinued
operations - 219.8 Stockholders' equity 590.5 842.3
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,513.5 $ 3,562.5
THE MANITOWOC COMPANY, INC. Unaudited Consolidated
Financial Information For the Three and Twelve Months Ended
December 31, 2016 and 2015 (In millions)
CASH FLOW SUMMARY
Three Months Ended Twelve Months Ended
December 31, December 31, 2016
2015 2016 2015 Net (loss) income $
(33.4 ) $ 43.5 $ (375.8 ) $ 65.5 Non-cash adjustments 2.7 (66.0 )
272.1 (59.3 ) Accounts receivable (6.9 ) 2.1 18.4 (10.7 ) Inventory
85.1 100.0 52.7 (7.2 ) Notes receivable 11.9 8.5 36.5 9.9 Other
assets 4.6 (34.4 ) (6.9 ) (18.9 ) Accounts payable (18.8 ) 13.4
(105.8 ) (12.4 ) Accrued expenses and other liabilities 12.6
(15.8 ) (13.6 ) 7.6 Net cash
provided by (used for) operating activities of continuing
operations 57.8 51.3 (122.4 ) (25.5 ) Net cash (used for) provided
by operating activities of discontinued operations (0.6 )
123.4 (49.9 ) 126.3 Net cash
provided by (used for) operating activities 57.2 174.7 (172.3 )
100.8 Capital expenditures (11.1 ) (23.0 ) (45.9 ) (54.9 ) Other
(1.3 ) (0.6 ) (1.6 ) 2.6 Proceeds from sale of fixed assets, net
6.1 1.1 8.4 7.3 Net cash provided by (used for) investing
activities of discontinued operations - 69.2 (2.4 ) 59.1 Payments
on borrowings - net (26.9 ) (223.3 ) (1,116.9 ) (100.3 ) Proceeds
from (payments on) receivable financing - net 0.3 0.6 (8.4 ) (9.4 )
Dividends paid - (10.9 ) - (10.9 ) Stock options exercised 3.0 3.9
9.4 7.9 Debt issuance costs - - (8.9 ) - Cash transferred to MFS -
- (17.7 ) - Dividend from MFS - - 1,361.7 - Net cash (used for)
provided by financing activities of discontinued operations - (0.3
) 0.2 (0.2 ) Effect of exchange rate changes on cash (0.3 )
(3.2 ) 0.9 (6.6 ) Net increase
(decrease) in cash & temporary investments $ 27.0 $
(11.8 ) $ 6.5 $ (4.6 )
Non-GAAP Financial Measures
Non-GAAP Items
Non-GAAP adjusted net (loss) income from continuing operations
and non-GAAP adjusted operating (loss) income are financial
measures that are not in accordance with 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 from net
loss and operating loss 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.
Non-GAAP Adjusted
Net (Loss) Income and (Loss) Income Per Share from Continuing
Operations
Three Months Ended
Twelve Months Ended December 31, December 31,
2016 2015 2016 2015 Net (loss)
income $ (33.4 ) $ 43.5 $ (375.8 ) $ 65.5 Special items, net of
tax: Loss (income) from discontinued operations 1.4 (56.4 ) 7.2
(135.4 ) Loss on debt extinguishment - 0.2 76.3 0.2 Asset
impairment expense - 15.3 96.9 15.3 Restructuring expense 6.3 9.0
23.4 9.4 Separation equity awards 0.4 - 2.7 - Tax valuation
allowance and one time tax items (7.2 ) - 110.5 - Tax on special
items (0.1 ) (4.5 ) (1.6 ) (4.6 )
Non-GAAP adjusted net (loss) income from continuing operations $
(32.6 ) $ 7.1 $ (60.4 ) $ (49.6 ) Diluted (loss)
income per share $ (0.24 ) $ 0.32 $ (2.73 ) $ 0.48 Special items,
net of tax: Loss (income) from discontinued operations 0.01 (0.41 )
0.05 (1.00 ) Early extinguishment of debt - 0.00 0.55 0.00 Asset
impairment - 0.10 0.70 0.10 Restructuring expense 0.04 0.05 0.17
0.05 Separation equity awards 0.00 - 0.02 - Tax valuation allowance
and one time tax items (0.05 ) - 0.80
- Diluted non-GAAP adjusted net (loss) income
per share from continuing operations $ (0.23 ) $ 0.05 $
(0.44 ) $ (0.36 )
Non-GAAP Adjusted
Operating (Loss) Income
Three Months Ended Twelve Months Ended
December 31, December 31, 2016 2015
2016 2015 Operating loss $ (23.8 ) $ (13.9 ) $
(153.3 ) $ (12.4 ) Adjustments: Asset impairment - 15.3 96.9 15.3
Restructuring 6.3 9.0 23.4 9.4 Amortization 0.8 0.7 3.0 3.0 Other
0.3 0.0 2.6 0.0
Non-GAAP adjusted operating (loss) income $ (16.4 ) $
11.1 $ (27.4 ) $ 15.3 Margin on
non-GAAP adjusted operating (loss) income -4.3 % 2.0 % -1.7 % 0.8 %
Adjusted EBITDA
The Company defines adjusted EBITDA as earnings before interest,
taxes, depreciation, and amortization, plus an addback of certain
restructuring charges. The reconciliation of GAAP net loss to
adjusted EBITDA from continuing operations by quarter for 2016 is
as follows ($’s in millions):
Three Months Ended
Full Year March 31, June 30, September
30, December 31, 2016 Net loss $ (195.9 ) $ (5.8
) $ (140.7 ) $ (33.4 ) $ (375.8 ) Loss from discontinued operations
3.2 0.8 1.8 1.4 7.2 Depreciation 12.2 11.4 11.3 10.7 45.6
Amortization 0.7 0.8 0.7 0.8 3.0 Interest expense and amortization
of deferred financing fees 10.6 10.3 10.5 10.4 41.8 Income taxes
107.7 0.7 (5.3 ) (2.6 )
100.5 GAAP EBITDA (61.5 ) 18.2 (121.7 ) (12.7 )
(177.7 ) Restructuring expense 4.4 8.8 3.9 6.3 23.4 Asset
impairment expense - - 96.9 - 96.9 Other 76.6
(1.7 ) (0.0 ) 0.7 75.6 Adjusted
EBITDA 19.5 25.3 (20.9 ) (5.7 ) 18.2 Adjusted EBITDA margin
percentage 4.6 % 5.5 % -6.0 % -1.5 % 1.1 % Less: Depreciation
(12.2 ) (11.4 ) (11.3 ) (10.7 )
(45.6 ) Adjusted operating income (loss) $ 7.3 $ 13.9
$ (32.2 ) * $ (16.4 ) $ (27.4 ) Adjusted operating income (loss)
margin percentage 1.7 % 3.0 % -9.2 % -4.3 % -1.7 % *
As previously disclosed in the Company's
third-quarter press release, adjusted operating loss includes $29.9
million of non-cash charges related to inventory reserves, losses
from decline in used crane values, product improvement initiatives,
and plant variances. Excluding these amounts the third-quarter
adjusted operating loss would have been $2.3 million.
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version on businesswire.com: http://www.businesswire.com/news/home/20170201006289/en/
The Manitowoc Company, Inc.Ion WarnerVP, Marketing and Investor
Relations717-593-5266
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