Third-Quarter 2022
Highlights
- Net sales of $454.7 million, up 12.4% year-over-year
- Net income of $2.3 million, $3.4 million on an adjusted
basis
- Backlog of $943.4 million, up 5.9% year-over-year
The Manitowoc Company, Inc. (NYSE: MTW), (the “Company” or
“Manitowoc”) a leading global manufacturer of cranes and lifting
solutions, today reported third-quarter net income of $2.3 million,
or $0.07 per diluted share. Third-quarter adjusted net income(1)
was $3.4 million, or $0.10 per diluted share.
Net sales in the third-quarter increased 12.4% year-over-year to
$454.7 million and were unfavorably impacted by $31.6 million from
changes in foreign currency exchange rates. Adjusted EBITDA(1) was
$24.0 million, an increase of $4.0 million from the prior year.
Third-quarter orders were $472.0 million, a 12.7% decrease from
the prior year. Orders were unfavorably impacted by $24.4 million
from changes in foreign currency exchange rates. Backlog ended the
third-quarter at $943.4 million and was unfavorably impacted by
$65.7 million from changes in foreign currency exchange rates.
“I am very proud of the efforts put forth by our team in the
third-quarter. The team performed well in the face of persistent
supply chain disruptions and continued inflationary pressure,” said
Aaron H. Ravenscroft, President and Chief Executive Officer of The
Manitowoc Company, Inc.
“Looking to the fourth-quarter, we expect these headwinds to
continue. Nevertheless, given our elevated shippable backlog
combined with the volume of nearly finished cranes that carried
over from the third-quarter, we continue to target the low-end of
our Adjusted EBITDA guidance for 2022. Despite the challenging
near-term outlook, we remain committed to supporting our customers
while executing our Cranes+50 strategy," concluded Ravenscroft.
Investor Conference Call
The Manitowoc Company will host a conference call for security
analysts and institutional investors to discuss its third-quarter
earnings results on Tuesday, November 8, 2022, at 10:00 a.m. ET
(9:00 a.m. CT). A live audio webcast of the call, along with the
related presentation, published in conjunction with this press
release, 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.
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. Manitowoc is one of
the world's leading providers of engineered lifting solutions.
Manitowoc, through its wholly-owned subsidiaries, designs,
manufactures, markets, 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, 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:
- The negative impacts COVID-19 has had and will continue to have
on Manitowoc’s business, financial condition, cash flows, results
of operations and supply chain, as well as customer demand
(including future uncertain impacts);
- actions of competitors;
- changes in raw material and commodity prices;
- 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;
- geo-political events, including the ongoing conflict between
Russia and Ukraine, has had and may continue to lead to market
disruptions, including significant volatility in commodity prices
(including oil and gas), energy prices, inflation, consumer
behavior, supply chain, and credit and capital markets, and could
result in the impairment of assets and result in higher than
expected charges to curtail the Company's operations in
Russia;
- 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;
- the ability to complete and appropriately integrate
acquisitions, strategic alliances, joint ventures, or other
significant transactions;
- unanticipated changes in revenues, margins, and costs;
- geographic factors and political and economic conditions and
risks;
- the ability to increase operational efficiencies across
Manitowoc and to capitalize on those efficiencies;
- risks and factors detailed in Manitowoc's 2021 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, 2021.
THE MANITOWOC COMPANY,
INC.
Unaudited Consolidated
Financial Information
For the three and nine months
ended September 30, 2022 and 2021
(In millions, except per share
and share amounts)
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Net sales
$
454.7
$
404.5
$
1,410.9
$
1,222.4
Cost of sales
380.4
335.5
1,162.9
994.6
Gross profit
74.3
69.0
248.0
227.8
Operating costs and expenses:
Engineering, selling and administrative
expenses
65.8
59.7
201.6
181.0
Asset impairment expense
—
1.9
—
1.9
Amortization of intangible assets
0.8
0.5
2.4
0.7
Restructuring (income) expense
0.1
(0.4
)
0.5
(0.5
)
Total operating costs and expenses
66.7
61.7
204.5
183.1
Operating income
7.6
7.3
43.5
44.7
Other expense:
Interest expense
(8.0
)
(7.1
)
(23.3
)
(21.5
)
Amortization of deferred financing
fees
(0.3
)
(0.4
)
(1.0
)
(1.1
)
Other income (expense) - net
2.7
(0.9
)
0.4
(0.2
)
Total other expense - net
(5.6
)
(8.4
)
(23.9
)
(22.8
)
Income (loss) before income taxes
2.0
(1.1
)
19.6
21.9
Provision (benefit) for income taxes
(0.3
)
(0.9
)
(0.9
)
7.3
Net income (loss)
$
2.3
$
(0.2
)
$
20.5
$
14.6
Per Share Data and Share
Amounts
Basic net income (loss) per common
share
$
0.07
$
(0.01
)
$
0.58
$
0.42
Diluted net income (loss) per common
share
$
0.07
$
(0.01
)
$
0.58
$
0.41
Weighted average shares outstanding -
basic
35,181,262
35,029,175
35,199,221
34,914,989
Weighted average shares outstanding -
diluted
35,374,194
35,029,175
35,470,301
35,555,077
THE MANITOWOC COMPANY,
INC.
Unaudited Consolidated
Financial Information
As of September 30, 2022 and
December 31, 2021
(In millions, except par value
and share amounts)
CONDENSED CONSOLIDATED BALANCE
SHEETS
September 30, 2022
December 31, 2021
Assets
Current Assets:
Cash and cash equivalents
$
42.6
$
75.4
Accounts receivable, less allowances of
$5.7 and $7.3, respectively
210.4
236.1
Inventories — net
672.2
576.8
Notes receivable — net
11.3
16.7
Other current assets
31.5
36.8
Total current assets
968.0
941.8
Property, plant and equipment — net
312.9
358.8
Operating lease right-of-use assets
32.2
40.6
Goodwill
245.2
249.7
Other intangible assets — net
127.7
139.6
Other non-current assets
35.7
44.7
Total assets
$
1,721.7
$
1,775.2
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable and accrued expenses
$
425.4
$
413.4
Short-term borrowings and current portion
of long-term debt
8.3
7.3
Product warranties
48.1
49.0
Customer advances
28.4
28.7
Other liabilities
20.8
22.6
Total current liabilities
531.0
521.0
Non-Current Liabilities:
Long-term debt
403.6
399.9
Operating lease liabilities
22.6
29.2
Deferred income taxes
6.3
6.5
Pension obligations
65.4
69.4
Postretirement health and other benefit
obligations
11.5
12.1
Long-term deferred revenue
16.4
22.9
Other non-current liabilities
34.0
51.8
Total non-current liabilities
559.8
591.8
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, 35,184,553
and 35,056,252 shares outstanding,
respectively)
0.4
0.4
Additional paid-in capital
604.0
602.4
Accumulated other comprehensive loss
(157.2
)
(102.4
)
Retained earnings
248.4
227.9
Treasury stock, at cost (5,609,430 and
5,737,731 shares, respectively)
(64.7
)
(65.9
)
Total stockholders' equity
630.9
662.4
Total liabilities and stockholders'
equity
$
1,721.7
$
1,775.2
THE MANITOWOC COMPANY,
INC.
Unaudited Consolidated
Financial Information
For the three and nine months
ended September 30, 2022 and 2021
(In millions)
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Cash Flows from Operating
Activities:
Net income (loss)
$
2.3
$
(0.2
)
$
20.5
$
14.6
Adjustments to reconcile net income (loss)
to cash provided
by (used for) operating activities:
Depreciation
14.5
9.8
46.2
29.5
Asset impairment expense
—
1.9
—
1.9
Amortization of intangible assets
0.8
0.5
2.4
0.7
Stock-based compensation expense
1.5
1.6
5.6
6.4
Amortization of deferred financing
fees
0.3
0.4
1.0
1.1
Loss (gain) on sale of property, plant and
equipment
0.2
—
(0.9
)
(0.1
)
Net unrealized foreign currency
transaction losses
0.6
1.9
6.4
1.1
Income tax benefit from change in reserve
of
uncertain tax positions
—
—
(11.7
)
—
Deferred income taxes
—
(0.1
)
0.9
0.9
Other
—
—
0.9
3.6
Changes in operating assets and
liabilities
Accounts receivable
9.9
17.4
10.7
13.0
Inventories
(26.9
)
(32.2
)
(136.1
)
(94.4
)
Notes receivable
3.7
(4.9
)
7.1
(1.0
)
Other assets
0.5
12.2
(0.6
)
(10.3
)
Accounts payable
(21.2
)
(8.3
)
39.8
77.1
Accrued expenses and other liabilities
7.6
18.4
7.3
24.0
Net cash provided by (used for) operating
activities
(6.2
)
18.4
(0.5
)
68.1
Cash Flows from Investing
Activities:
Capital expenditures
(15.0
)
(6.9
)
(31.8
)
(22.3
)
Proceeds from sale of property, plant and
equipment
0.1
—
1.5
0.1
Acquisition of businesses
—
(50.9
)
2.3
(50.9
)
Net cash used for investing activities
(14.9
)
(57.8
)
(28.0
)
(73.1
)
Cash Flows from Financing
Activities:
Proceeds from revolving credit facility -
net
24.0
100.0
4.0
100.0
Other debt - net
(1.7
)
4.4
(4.0
)
(3.4
)
Debt issuance and other debt related
costs
(0.1
)
—
(1.9
)
—
Exercise of stock options
—
0.6
0.1
5.8
Common stock repurchases
—
—
(1.9
)
—
Net cash provided by (used for) financing
activities
22.2
105.0
(3.7
)
102.4
Effect of exchange rate changes on cash
and cash equivalents
(1.0
)
(1.8
)
(0.6
)
(3.8
)
Net increase (decrease) in cash and cash
equivalents
0.1
63.8
(32.8
)
93.6
Cash and cash equivalents at beginning of
period
42.5
158.5
75.4
128.7
Cash and cash equivalents at end of
period
$
42.6
$
222.3
$
42.6
$
222.3
Non-GAAP Financial Measures
Adjusted net income, Adjusted DEPS, EBITDA, adjusted EBITDA,
adjusted operating income, 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 (loss)
plus the addback or subtraction of restructuring and certain other
charges. Adjusted DEPS is defined as adjusted net income divided by
diluted weighted average shares outstanding. The reconciliation of
net income (loss) and diluted net income (loss) per share to
adjusted net income and Adjusted DEPS for the three and nine months
ended September 30, 2022 and 2021 are summarized as follows. All
dollar amounts are in millions, except per share data.
Three Months Ended September
30,
2022
2021
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit (1)
$
74.3
$
1.0
$
75.3
$
69.0
$
—
$
69.0
Engineering, selling and
administrative
expenses (2)
(65.8
)
—
(65.8
)
(59.7
)
0.9
(58.8
)
Asset impairment expense(3)
—
—
—
(1.9
)
1.9
—
Amortization of intangible assets
(0.8
)
—
(0.8
)
(0.5
)
—
(0.5
)
Restructuring income (expense) (4)
(0.1
)
0.1
—
0.4
(0.4
)
—
Operating income
7.6
1.1
8.7
7.3
2.4
9.7
Interest expense
(8.0
)
—
(8.0
)
(7.1
)
—
(7.1
)
Amortization of deferred financing
fees
(0.3
)
—
(0.3
)
(0.4
)
—
(0.4
)
Other income (expense) - net
2.7
—
2.7
(0.9
)
—
(0.9
)
Income (loss) before income
taxes
2.0
1.1
3.1
(1.1
)
2.4
1.3
Benefit for income taxes
0.3
—
0.3
0.9
—
0.9
Net income (loss)
$
2.3
$
1.1
$
3.4
$
(0.2
)
$
2.4
$
2.2
Diluted net income (loss) per share
$
0.07
$
0.10
$
(0.01
)
$
0.06
(1)
The adjustment in 2022 represents fair
value step up of rental fleet assets sold during the period that
was expensed within cost of sales.
(2)
The adjustment in 2021 represents one-time
acquisition related costs.
(3)
The adjustment in 2021 represents a
write-down of one of the Company’s Brazilian entities to its
expected sale price.
(4)
Represents adjustments for restructuring
income (expense).
Nine Months Ended September
30,
2022
2021
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit (1)
$
248.0
$
3.3
$
251.3
$
227.8
$
—
$
227.8
Engineering, selling and
administrative
expenses (2)
(201.6
)
(4.3
)
(205.9
)
(181.0
)
5.5
(175.5
)
Asset impairment expense(3)
—
—
—
(1.9
)
1.9
—
Amortization of intangible assets
(2.4
)
—
(2.4
)
(0.7
)
—
(0.7
)
Restructuring income (expense) (4)
(0.5
)
0.5
—
0.5
(0.5
)
—
Operating income
43.5
(0.5
)
43.0
44.7
6.9
51.6
Interest expense
(23.3
)
—
(23.3
)
(21.5
)
—
(21.5
)
Amortization of deferred financing
fees
(1.0
)
—
(1.0
)
(1.1
)
—
(1.1
)
Other income (expense) - net (5)
0.4
0.5
0.9
(0.2
)
0.6
0.4
Income before income taxes
19.6
—
19.6
21.9
7.5
29.4
(Provision) benefit for income taxes
(6)
0.9
(8.7
)
(7.8
)
(7.3
)
(0.9
)
(8.2
)
Net income
$
20.5
$
(8.7
)
$
11.8
$
14.6
$
6.6
$
21.2
Diluted net income per share
$
0.58
$
0.33
$
0.41
$
0.60
(1)
The adjustment in 2022 represents fair
value step up of rental fleet assets sold during the period that
was expensed within cost of sales and other one-time costs
associated with the acquired businesses.
(2)
The adjustment in 2022 represents one-time
costs associated with the acquired businesses, the partial recovery
of the previously written off long-term note receivable from the
2014 divestiture of the Company's Chinese joint venture, and other
one-time charges. The adjustment in 2021 represents the addback of
a loss from the write-off of a long-term note receivable from the
2014 divestiture of the Company's Chinese joint venture and
one-time acquisition related costs.
(3)
The adjustment in 2021 represents a
write-down of one of the Company’s Brazilian entities to its
expected sale price.
(4)
Represents adjustments for restructuring
income (expense).
(5)
The adjustment in 2022 represents the
write-off of other debt related costs. The adjustment in 2021
represents costs associated with a legal matter.
(6)
The adjustment in 2022 represents the net
income tax impacts of items (1), (2), (4), and (5), the removal of
an income tax benefit related to the release of a U.S. Federal
uncertain tax position, and establishment of a valuation allowance
due to the Company's curtailment of operations in Russia. The
adjustment in 2021 represents the net income tax impact of items
(2), (3), (4) and (5).
Free Cash Flows
The Company defines free cash flows as net cash provided by
(used for) operating activities less cash flow from investment in
capital expenditures. The reconciliation of net cash provided by
(used for) operating activities to free cash flows for the three
and nine months ended September 30, 2022 and 2021 are summarized as
follows. All dollar amounts are in millions.
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Net cash provided by (used for) operating
activities
$
(6.2
)
$
18.4
$
(0.5
)
$
68.1
Capital expenditures
(15.0
)
(6.9
)
(31.8
)
(22.3
)
Free cash flows
$
(21.2
)
$
11.5
$
(32.3
)
$
45.8
EBITDA, Adjusted EBITDA, and Adjusted Operating
Income
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 income (expense), and certain other charges. The Company
defines adjusted operating income as operating income plus the
addback or subtraction of restructuring and certain other charges.
The reconciliation of net income (loss) to EBITDA, and further to
adjusted EBITDA and to adjusted operating income and operating
income for the three and nine months ended September 30, 2022 and
2021 and trailing twelve months, are summarized as follows. All
dollar amounts are in millions.
Three Months Ended September
30,
Nine Months Ended September
30,
Trailing Twelve
2022
2021
2022
2021
Months
Net income (loss)
$
2.3
$
(0.2
)
$
20.5
$
14.6
$
16.9
Interest expense and amortization of
deferred
financing fees
8.3
7.5
24.3
22.6
32.1
Provision (benefit) for income taxes
(0.3
)
(0.9
)
(0.9
)
7.3
(2.1
)
Depreciation expense
14.5
9.8
46.2
29.5
62.2
Amortization of intangible assets
0.8
0.5
2.4
0.7
3.1
EBITDA
25.6
16.7
92.5
74.7
112.2
Restructuring (income) expense
0.1
(0.4
)
0.5
(0.5
)
(0.1
)
Asset impairment expense
—
1.9
—
1.9
—
Other non-recurring charges (1)
1.0
0.9
(1.0
)
5.5
15.3
Other (income) expense - net (2)
(2.7
)
0.9
(0.4
)
0.2
(1.6
)
Adjusted EBITDA
24.0
20.0
91.6
81.8
125.8
Depreciation expense
(14.5
)
(9.8
)
(46.2
)
(29.5
)
(62.2
)
Amortization of intangible assets
(0.8
)
(0.5
)
(2.4
)
(0.7
)
(3.1
)
Adjusted operating income
8.7
9.7
43.0
51.6
60.5
Restructuring (income) expense
(0.1
)
0.4
(0.5
)
0.5
0.1
Asset impairment expense
—
(1.9
)
—
(1.9
)
—
Other non-recurring charges (1)
(1.0
)
(0.9
)
1.0
(5.5
)
(15.3
)
Operating income
$
7.6
$
7.3
$
43.5
$
44.7
$
45.3
Adjusted EBITDA margin percentage
5.3
%
4.9
%
6.5
%
6.7
%
6.6
%
Adjusted operating income margin
percentage
1.9
%
2.4
%
3.0
%
4.2
%
3.2
%
(1)
Other non-recurring charges for the three
months ended September 30, 2022 relate to the fair value step up on
rental fleet assets sold during the period that was expensed within
cost of sales. Other non-recurring charges for the nine months
ended September 30, 2022 relate to the fair value step up on rental
fleet assets sold during the period that was expensed within cost
of sales, one-time costs associated with the acquired businesses,
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 and other one-time charges. Other
non-recurring charges for the three months ended September 30, 2021
relate to acquisition costs. Other non-recurring charges for the
nine months ended September 30, 2021 relate to acquisition costs
and a write off of a long-term note receivable from the 2014
divestiture of the Company's Chinese joint venture. Other
non-recurring charges for the trailing twelve months relate to the
fair value step up on rental fleet assets sold during the period
that was expensed within cost of sales, one-time costs associated
with the acquired businesses, costs associated with a legal matter
with the U.S. Environmental Protection Agency, 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, and other one-time charges. Other non-recurring charges
are included in cost of sales or engineering, selling and
administrative expenses in the Condensed Consolidated Statements of
Operations.
(2)
Other (income) 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, nine, and trailing twelve months ended September 30,
2022 and the three and nine months ended September 30, 2021.
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Ion Warner SVP, Marketing and Investor Relations +1
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