The Manitowoc Company Reports Second-Quarter 2023 Financial Results; Raises Full-Year 2023 Guidance
Manitowoc Company reports second-quarter net sales of $602.8 million, up 21.2% YoY, and adjusted EBITDA of $60.4 million, with a margin percentage of 10.0%. Non-new machine sales increased by 8.1% YoY to $150.4 million.
Positive
Net sales increased by 21.2% year-over-year to $602.8 million.
Adjusted EBITDA was $60.4 million, representing a margin percentage of 10.0%.
Non-new machine sales saw an 8.1% year-over-year increase to $150.4 million.
08/07/2023 - 04:11 PM
Second-Quarter 2023 Highlights
Net sales of $602.8 million 21.2% year-over-year
Adjusted EBITDA(1) of $60.4 million 10.0%
Non-new machine sales of $150.4 million 8.1% year-over-year
MILWAUKEE --(BUSINESS WIRE)--
The Manitowoc Company, Inc. (NYSE: MTW) (the “Company” or “Manitowoc”) today reported second-quarter net income of $20.2 million $0.57 (1) $26.6 million $0.75
Net sales increased 21.2% year-over-year to $602.8 million and were favorably impacted by $3.1 million (1) was $60.4 million $24.0 million 65.9% from the prior year.
Orders were $550.5 million 26.8% increase from the prior year. Orders were favorably impacted by $4.0 million $51.1 million $1,024.6 million $1,075.7 million
“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 $2.2 billion
Adjusted EBITDA - $150 million $180 million
Depreciation and amortization - $58 million $62 million
Interest expense - $33 million $35 million
Provision for income taxes, excluding discrete items - $16 million $20 million
Adjusted diluted earnings per share - $1.10 $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
Six Months Ended
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 $5.3
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
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
Six Months Ended
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
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
(2)
The adjustment in 2023 represents $10.8 million U.S. Environmental Protection Agency ("U.S. EPA"). The adjustment in 2022 represents $0.1 million $0.2 million
(3)
Represents adjustments for restructuring expense.
(4)
The adjustment in 2023 represents the write-off of $9.3 million Russia . The adjustment in 2022 represents a $0.5 million
(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 $10.9 million U.S. Federal uncertain tax position, and establishment of a $1.0 million Russia .
Six Months Ended
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 $0.3 million
(2)
The adjustment in 2023 represents $10.8 million U.S. EPA. The adjustment in 2022 represents $4.8 million $0.3 million $0.2 million
(3)
Represents adjustments for restructuring expense.
(4)
The adjustment in 2023 represents the write-off of $9.3 million Russia . The adjustment in 2022 represents a $0.5 million
(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 $10.9 million U.S. Federal uncertain tax position, and establishment of a $1.0 million 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
Six Months Ended
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
Six Months Ended
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 U.S. EPA. Other non-recurring items - net for the three months ended June 30, 2022 relate to $1.1 million $0.1 million $0.2 million $4.8 million $2.0 million $0.6 million $0.2 million $10.8 million U.S. EPA and $1.0 million
(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 Russia .
View source version on businesswire.com: https://www.businesswire.com/news/home/20230807628238/en/
Ion Warner
Source: The Manitowoc Company, Inc.
What were the second-quarter net sales of Manitowoc Company?
The second-quarter net sales of Manitowoc Company were $602.8 million, up 21.2% year-over-year.
What was the adjusted EBITDA for the second quarter?
The adjusted EBITDA for the second quarter was $60.4 million, with a margin percentage of 10.0%.
How much did non-new machine sales increase by?
Non-new machine sales increased by 8.1% year-over-year to $150.4 million.
What is the updated full-year 2023 guidance for net sales?
The updated full-year 2023 guidance for net sales is $2.1 billion to $2.2 billion.
What is the updated full-year 2023 guidance for adjusted EBITDA?
The updated full-year 2023 guidance for adjusted EBITDA is $150 million to $180 million.
