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The Manitowoc Company Reports Second-Quarter 2022 Results

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Second-quarter 2022 Highlights

  • Net sales of $497.2 million, up 7.2% year-over-year

  • Adjusted EBITDA(1) margin of 7.3%

  • Backlog of $947.8 million, up 28.8% year-over-year

MILWAUKEE, August 04, 2022--(BUSINESS WIRE)--The Manitowoc Company, Inc. (NYSE: MTW), (the "Company" or "Manitowoc") a leading global manufacturer of cranes and lifting solutions, today reported second-quarter net income of $15.1 million, or $0.42 per diluted share. Second-quarter adjusted net income(1) was $7.4 million, or $0.21 per diluted share.

Net sales in the second-quarter increased 7.2% year-over-year to $497.2 million and were unfavorably impacted by $27.9 million from changes in foreign currency exchange rates. Adjusted EBITDA(1) was $36.4 million, a decrease of $4.3 million from the prior year, of which $2.7 million is related to changes in foreign currency exchange rates.

Second-quarter orders were $434.0 million, a 19.2% decrease from the prior year. Orders were unfavorably impacted by $22.6 million from changes in foreign currency exchange rates. Backlog ended the second quarter at $947.8 million, a decrease of 8.3% sequentially. Backlog was unfavorably impacted by $24.4 million from changes in foreign currency exchange rates.

"Our second quarter results reflect our team's solid operational performance and diligent cost management amid challenging macroeconomic conditions. While our backlog remains elevated due to continued supply chain constraints, order intake began to trend down. It is clear that ongoing global economic uncertainty is causing our customers to remain cautious when committing to future orders," said Aaron H. Ravenscroft, President and Chief Executive Officer of The Manitowoc Company, Inc.

"As we enter the second half of the year, inflation, rising interest rates, and geopolitical tensions will continue to hinder customer confidence. Yet, we remain on track to deliver the low-end of our adjusted EBITDA guidance," continued Ravenscroft. "Despite the challenging outlook, we are committed to our four breakthrough initiatives which enable our CRANES+50 strategy and position us to capitalize on the eventual crane renaissance. We look forward to showcasing our progress at the upcoming bauma trade show this October," concluded Ravenscroft.

Investor Conference Call

The Manitowoc Company will host a conference call for security analysts and institutional investors to discuss its second-quarter earnings results on Friday, August 5, 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 six months ended June 30, 2022 and 2021

(In millions, except per share amounts)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended
June 30,

Six Months Ended
June 30,

2022

2021

2022

2021

Net sales

$

497.2

$

463.6

$

956.2

$

817.9

Cost of sales

408.5

373.2

782.5

659.1

Gross profit

88.7

90.4

173.7

158.8

Operating costs and expenses:

Engineering, selling and administrative expenses

69.3

63.6

135.8

121.3

Amortization of intangible assets

0.8

0.1

1.6

0.2

Restructuring (income) expense

0.3

0.4

(0.1

)

Total operating costs and expenses

70.4

63.7

137.8

121.4

Operating income

18.3

26.7

35.9

37.4

Other income (expense):

Interest expense

(7.9

)

(7.3

)

(15.3

)

(14.4

)

Amortization of deferred financing fees

(0.3

)

(0.3

)

(0.7

)

(0.7

)

Other income (expense) - net

(2.1

)

2.8

(2.3

)

0.7

Total other expense - net

(10.3

)

(4.8

)

(18.3

)

(14.4

)

Income before income taxes

8.0

21.9

17.6

23.0

Provision (benefit) for income taxes

(7.1

)

4.0

(0.6

)

8.2

Net income

$

15.1

$

17.9

$

18.2

$

14.8

Per Share Data

Basic net income per common share

$

0.43

$

0.51

$

0.52

$

0.42

Diluted net income per common share

$

0.42

$

0.50

$

0.51

$

0.42

Weighted average shares outstanding - basic

35,283,969

34,903,657

35,208,349

34,856,950

Weighted average shares outstanding - diluted

35,550,942

35,602,042

35,564,882

35,460,779

THE MANITOWOC COMPANY, INC.

Unaudited Consolidated Financial Information

As of June 30, 2022 and December 31, 2021

(In millions, except share amounts)

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2022

December 31, 2021

Assets

Current Assets:

Cash and cash equivalents

$

42.5

$

75.4

Accounts receivable, less allowances of $5.6 and $7.3, respectively

227.2

236.1

Inventories — net

668.9

576.8

Notes receivable — net

14.3

16.7

Other current assets

33.6

36.8

Total current assets

986.5

941.8

Property, plant and equipment — net

322.2

358.8

Operating lease right-of-use assets

35.8

40.6

Goodwill

247.3

249.7

Other intangible assets — net

132.5

139.6

Other non-current assets

33.5

44.7

Total assets

$

1,757.8

$

1,775.2

Liabilities and Stockholders' Equity

Current Liabilities:

Accounts payable and accrued expenses

$

455.5

$

413.4

Short-term borrowings and current portion of long-term debt

13.5

7.3

Product warranties

48.1

49.0

Customer advances

28.0

28.7

Other liabilities

21.4

22.6

Total current liabilities

566.5

521.0

Non-Current Liabilities:

Long-term debt

379.7

399.9

Operating lease liabilities

25.5

29.2

Deferred income taxes

1.0

6.5

Pension obligations

67.3

69.4

Postretirement health and other benefit obligations

11.6

12.1

Long-term deferred revenue

16.8

22.9

Other non-current liabilities

36.2

51.8

Total non-current liabilities

538.1

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, 35,178,217
and 35,056,252 shares outstanding, respectively)

0.4

0.4

Additional paid-in capital

602.5

602.4

Accumulated other comprehensive loss

(131.1

)

(102.4

)

Retained earnings

246.1

227.9

Treasury stock, at cost (5,615,766 and 5,737,731 shares, respectively)

(64.7

)

(65.9

)

Total stockholders' equity

653.2

662.4

Total liabilities and stockholders' equity

$

1,757.8

$

1,775.2

THE MANITOWOC COMPANY, INC.

Unaudited Consolidated Financial Information

For the three and six months ended June 30, 2022 and 2021

(In millions)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended
June 30,

Six Months Ended
June 30,

2022

2021

2022

2021

Cash Flows from Operating Activities:

Net income

$

15.1

$

17.9

$

18.2

$

14.8

Adjustments to reconcile net income to cash provided
by operating activities:

Depreciation

15.6

9.7

31.7

19.7

Amortization of intangible assets

0.8

0.1

1.6

0.2

Stock-based compensation expense

0.9

2.3

4.0

4.8

Amortization of deferred financing fees

0.3

0.3

0.7

0.7

Gain on sale of property, plant and equipment

(1.1

)

(1.1

)

(0.1

)

Net unrealized foreign currency transaction (gains) losses

4.4

(1.1

)

5.8

(0.8

)

Income tax benefit from change in reserve of
uncertain tax positions

(11.9

)

(11.7

)

Deferred income taxes

0.9

0.1

0.9

1.0

Other

0.9

3.6

0.9

3.6

Changes in operating assets and liabilities

Accounts receivable

8.5

(38.9

)

0.8

(15.5

)

Inventories

(39.8

)

(2.7

)

(109.2

)

(62.2

)

Notes receivable

0.4

1.6

3.4

3.9

Other assets

(1.5

)

(16.8

)

(1.1

)

(11.4

)

Accounts payable

6.5

32.0

61.1

85.4

Accrued expenses and other liabilities

0.1

0.8

(0.3

)

5.6

Net cash provided by operating activities

0.1

8.9

5.7

49.7

Cash Flows from Investing Activities:

Capital expenditures

(8.1

)

(7.4

)

(16.8

)

(15.4

)

Proceeds from sale of property, plant and equipment

1.4

0.1

1.4

0.1

Acquisition of businesses

2.3

2.3

Net cash used for investing activities

(4.4

)

(7.3

)

(13.1

)

(15.3

)

Cash Flows from Financing Activities:

Payments on revolving credit facility

(20.0

)

Other debt - net

(1.5

)

(7.0

)

(2.3

)

(7.8

)

Debt issuance and other debt related costs

(1.8

)

(1.8

)

Exercise of stock options

4.4

0.1

5.2

Common stock repurchases

(1.9

)

(1.9

)

Net cash used for financing activities

(5.2

)

(2.6

)

...