First-Quarter 2023
Highlights
- Net sales of $508.3 million, up 10.7% year-over-year
- Diluted net income per share of $0.46, up $0.37
year-over-year
- Adjusted EBITDA(1) of $45.1 million, margin percentage of
8.9%
- Non-new machine sales of $151.0 million, up 16.7%
year-over-year
The Manitowoc Company, Inc. (NYSE: MTW) (the “Company” or
“Manitowoc”) today reported net income of $16.5 million, or $0.46
per diluted share.
Net sales increased 10.7% year-over-year to $508.3 million and
were unfavorably impacted by $11.2 million from changes in foreign
currency exchange rates. Adjusted EBITDA(1) was $45.1 million, an
increase of $13.9 million or 44.6% from the prior year.
Orders were $524.8 million, a 9% increase from the prior year.
Orders were unfavorably impacted by $8.5 million from changes in
foreign currency exchange rates. Backlog increased $19.7 million to
$1,075.7 million as of March 31, 2023 from $1,056.0 million as of
December 31, 2022.
Net cash provided by operating activities were $15.4 million and
free cash flows(1) were $4.8 million, an increase of $9.8 million
and $7.9 million, respectively, from the prior year.
“Manitowoc delivered a solid first-quarter, generating $508.3
million in revenue and $45.1 million of adjusted EBITDA. I am very
proud of our team who demonstrated great resolve to overcome
continuing supply chain, labor, and logistics challenges in the
quarter. During the quarter, we continued to make meaningful
progress on our CRANES+50 strategy by growing non-new machine sales
by 16.7% year-over-year,” commented Aaron H. Ravenscroft, President
and Chief Executive Officer of The Manitowoc Company, Inc.
“Given our backlog and first-quarter results, we feel confident
about our guidance. Looking out, however, we can see a slowdown in
the European tower crane business and are cautious regarding the
impact higher interest rates could eventually have on demand. While
we continue to manage through the challenging environment, we
remain committed to our CRANES+50 strategy to reduce cyclicality
and improve profitability,” added Ravenscroft.
Investor Conference Call
The Manitowoc Company will host a conference call for security
analysts and institutional investors to discuss its first-quarter
2023 earnings results on Wednesday, May 3, 2023, 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. 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, and could
result in the impairment of assets and result in higher than
expected charges to curtail the Company's operations in
Russia;
- 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 March
31,
2023
2022
Net sales
$
508.3
$
459.0
Cost of sales
402.0
374.0
Gross profit
106.3
85.0
Operating costs and expenses:
Engineering, selling, and administrative
expenses
75.1
66.5
Amortization of intangible assets
1.0
0.8
Restructuring expense
—
0.1
Total operating costs and expenses
76.1
67.4
Operating income
30.2
17.6
Other expense:
Interest expense
(8.1
)
(7.4
)
Amortization of deferred financing
fees
(0.3
)
(0.4
)
Other expense - net
(1.1
)
(0.2
)
Total other expense
(9.5
)
(8.0
)
Income before income taxes
20.7
9.6
Provision for income taxes
4.2
6.5
Net income
$
16.5
$
3.1
Per Share Data and Share
Amounts
Basic net income per common share
$
0.47
$
0.09
Diluted net income per common share
$
0.46
$
0.09
Weighted average shares outstanding -
basic
35,121,473
35,131,889
Weighted average shares outstanding -
diluted
35,748,021
35,565,935
THE MANITOWOC COMPANY,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions, except par value
and share amounts)
March 31, 2023
December 31, 2022
Assets
Current Assets:
Cash and cash equivalents
$
56.5
$
64.4
Accounts receivable, less allowances of
$5.4 and $5.3, respectively
250.6
266.3
Inventories
720.6
611.9
Notes receivable — net
9.4
10.6
Other current assets
42.3
45.3
Total current assets
1,079.4
998.5
Property, plant, and equipment — net
331.6
335.3
Operating lease right-of-use assets
43.0
45.2
Goodwill
79.9
80.1
Intangible assets — net
126.6
126.7
Other long-term assets
30.6
29.7
Total assets
$
1,691.1
$
1,615.5
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable and accrued expenses
$
518.1
$
446.4
Customer advances
24.0
21.9
Short-term borrowings and current portion
of long-term debt
7.9
6.1
Product warranties
46.5
48.8
Other liabilities
21.1
24.6
Total current liabilities
617.6
547.8
Non-Current Liabilities:
Long-term debt
369.5
379.5
Operating lease liabilities
32.8
34.3
Deferred income taxes
4.9
4.9
Pension obligations
53.5
51.7
Postretirement health and other benefit
obligations
8.0
8.2
Long-term deferred revenue
14.7
15.6
Other non-current liabilities
37.3
35.7
Total non-current liabilities
520.7
529.9
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, 35,142,881 and 35,085,008
shares outstanding, respectively)
0.4
0.4
Additional paid-in capital
605.8
606.7
Accumulated other comprehensive loss
(108.0
)
(107.9
)
Retained earnings
120.8
104.3
Treasury stock, at cost (5,651,102 and
5,708,975 shares, respectively)
(66.2
)
(65.7
)
Total stockholders' equity
552.8
537.8
Total liabilities and stockholders'
equity
$
1,691.1
$
1,615.5
THE MANITOWOC COMPANY,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
Three Months Ended March
31,
2023
2022
Cash Flows from Operating
Activities:
Net income
$
16.5
$
3.1
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation
13.9
16.1
Amortization of intangible assets
1.0
0.8
Stock-based compensation expense
3.1
3.1
Amortization of deferred financing
fees
0.3
0.4
Net unrealized foreign currency
transaction losses (gains)
(1.6
)
1.4
Changes in operating assets and
liabilities:
Accounts receivable
17.1
(7.7
)
Inventories
(100.6
)
(69.4
)
Notes receivable
1.7
3.0
Other assets
3.2
0.4
Accounts payable
56.2
54.6
Accrued expenses and other liabilities
4.6
(0.2
)
Net cash provided by operating
activities
15.4
5.6
Cash Flows from Investing
Activities:
Capital expenditures
(10.6
)
(8.7
)
Proceeds from sale of fixed assets
2.0
—
Net cash used for investing activities
(8.6
)
(8.7
)
Cash Flows from Financing
Activities:
Payments on revolving credit facility -
net
(10.0
)
(20.0
)
Other debt - net
(1.9
)
(0.8
)
Exercises of stock options
0.3
0.1
Common stock repurchases
(3.5
)
—
Net cash used for financing activities
(15.1
)
(20.7
)
Effect of exchange rate changes on cash
and cash equivalents
0.4
—
Net decrease in cash and cash
equivalents
(7.9
)
(23.8
)
Cash and cash equivalents at beginning of
period
64.4
75.4
Cash and cash equivalents at end of
period
$
56.5
$
51.6
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 months ended March 31, 2023 and 2022 are summarized as
follows. All dollar amounts are in millions, except per share data
and share amounts.
Three Months Ended March
31,
2023
2022
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit (1)
$
106.3
$
—
$
106.3
$
85.0
$
1.2
$
86.2
Engineering, selling, and administrative
expenses (2)
(75.1
)
—
(75.1
)
(66.5
)
(4.6
)
(71.1
)
Amortization of intangible assets
(1.0
)
—
(1.0
)
(0.8
)
—
(0.8
)
Restructuring expense (3)
—
—
—
(0.1
)
0.1
—
Operating income
30.2
—
30.2
17.6
(3.3
)
14.3
Interest expense
(8.1
)
—
(8.1
)
(7.4
)
—
(7.4
)
Amortization of deferred financing
fees
(0.3
)
—
(0.3
)
(0.4
)
—
(0.4
)
Other expense - net
(1.1
)
—
(1.1
)
(0.2
)
—
(0.2
)
Income before income taxes
20.7
—
20.7
9.6
(3.3
)
6.3
Provision for income taxes (4)
(4.2
)
—
(4.2
)
(6.5
)
1.2
(5.3
)
Net income
$
16.5
$
—
$
16.5
$
3.1
$
(2.1
)
$
1.0
Diluted weighted average common shares
outstanding
35,748,021
35,748,021
35,565,935
35,565,935
Diluted net income per share
$
0.46
$
0.46
$
0.09
$
0.03
(1)
The adjustment in 2022 represents $0.9 million of fair value
step up on rental fleet assets sold during the period that were
expensed within cost of sales and $0.3 million of other one-time
costs associated with the acquired businesses.
(2)
The adjustment in 2022 represents $0.2 million of one-time legal
costs associated with the acquired businesses and $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.
(3)
Represents adjustments for restructuring expense.
(4)
The adjustment in 2022 represents the net income tax impacts of
items (1), (2), and (3).
Free Cash Flows
The Company defines free cash flows as net cash provided by
operating activities less cash outflow from investment in capital
expenditures. The reconciliation of net cash provided by operating
activities to free cash flows for the three months ended March 31,
2023 and 2022 are summarized as follows. All dollar amounts are in
millions.
Three Months Ended March
31,
2023
2022
Net cash provided by operating
activities
$
15.4
$
5.6
Capital expenditures
(10.6
)
(8.7
)
Free cash flows
$
4.8
$
(3.1
)
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 income (expense), and certain other non-recurring items -
net. The reconciliation of net income (loss) to EBITDA, and further
to adjusted EBITDA for the three months ended March 31, 2023 and
2022 and trailing twelve months are summarized as follows. All
dollar amounts are in millions.
Three Months Ended March
31,
Trailing Twelve
2023
2022
Months
Net income (loss)
$
16.5
$
3.1
$
(110.2
)
Interest expense and amortization of
deferred financing fees
8.4
7.8
33.6
Provision for income taxes
4.2
6.5
1.1
Depreciation expense
13.9
16.1
58.4
Amortization of intangible assets
1.0
0.8
3.3
EBITDA
44.0
34.3
(13.8
)
Restructuring expense
—
0.1
1.4
Asset impairment expense (1)
—
—
171.9
Other non-recurring items - net (2)
—
(3.4
)
2.4
Other (income) expense - net (3)
1.1
0.2
(4.9
)
Adjusted EBITDA
$
45.1
$
31.2
$
157.0
Adjusted EBITDA margin percentage
8.9
%
6.8
%
7.5
%
(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 months ended March
31, 2022 primarily 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 $0.9 million of fair value step up on
rental fleet assets sold during the period that was expensed within
cost of sales, and $0.5 million of other one-time costs associated
with the acquired businesses. Other non-recurring items - net for
the trailing twelve months relate to $2.1 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 $0.2 million of other
one-time charges.
(3)
Other expense - net includes net foreign currency (gains)
losses, other components of net periodic pension costs, and other
items in the three months ended March 31, 2023 and 2022. Other
income - net for the trailing twelve months includes net foreign
currency gains, other components of net periodic pension costs, a
$0.5 million write-off of other debt related charges, and other
items.
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