The Manitowoc Company Reports First-Quarter 2024 Financial Results

Rhea-AI Summary

The Manitowoc Company, Inc. (NYSE: MTW) reported first-quarter 2024 net sales of $495.1 million, down 2.6% year-over-year. Diluted net income per share was $0.12, $0.14 on an adjusted basis. Adjusted EBITDA was $31.3 million with a margin percentage of 6.3%. Adjusted return on invested capital was 9.5%. Despite facing challenges in the European tower crane market, first-quarter orders saw a 5.6% increase year-over-year, resulting in a strong backlog of $971.3 million.

Positive

• Increased first-quarter orders by 5.6% year-over-year, resulting in a robust backlog of $971.3 million.

Negative

• Decreased net sales of $495.1 million by 2.6% year-over-year and adjusted EBITDA decreased by 30.6% from the prior year.

Insights

Financial Analyst

Manitowoc's recent earnings report showcases a 2.6% year-over-year decline in net sales, which could be indicative of competitive pressures or market saturation affecting their business operations. The dilution of net income per share to $0.12 may point to margin compression, possibly driven by the 'unfavorable mix' amid a slowdown in the European tower crane market mentioned by the CEO. Investors should note the 5.6% increase in orders, signaling potential revenue growth in future quarters. However, a 30.6% drop in adjusted EBITDA to $31.3 million is a concern as it impacts the company's operational efficiency. Cash flow generation and inventory reduction strategies will be important for Manitowoc to navigate any potential liquidity challenges and maintain financial flexibility.

Market Research Analyst

The slight uptick in order volume is an optimistic indicator for Manitowoc, suggesting that demand for their products remains strong despite overall sales decline. The strong backlog, reaching $971.3 million, provides visibility into future revenue and may buffer short-term market fluctuations. For investors, understanding the dynamics of the European tower crane market and Manitowoc's response to these challenges could offer insights into the company's adaptability and long-term growth prospects. Effective inventory management and free cash flow generation, as highlighted by the CEO, are key areas to monitor as they could influence the company's ability to invest in growth opportunities and return value to shareholders.

First-Quarter 2024 Highlights

• Net sales of $495.1 million, down 2.6% year-over-year
• Diluted net income per share of $0.12, $0.14 on an adjusted basis⁽¹⁾
• Adjusted EBITDA⁽¹⁾ of $31.3 million, margin percentage of 6.3%
• Adjusted return on invested capital⁽¹⁾ of 9.5%

MILWAUKEE, Wis.--(BUSINESS WIRE)-- The Manitowoc Company, Inc. (NYSE: MTW) (the “Company” or “Manitowoc”) today reported first-quarter net income of $4.5 million, or $0.12 per diluted share. First-quarter adjusted net income⁽¹⁾ was $5.1 million, or $0.14 per diluted share.

Net sales in the first quarter decreased 2.6% year-over-year to $495.1 million. First-quarter adjusted EBITDA⁽¹⁾ was $31.3 million, a decrease of $13.8 million or 30.6% from the prior year.

First-quarter orders were $554.1 million, a 5.6% increase from the prior year, resulting in backlog at the end of the first quarter of $971.3 million.

“Manitowoc’s first-quarter performance was in line with our expectations. Although we continue to face unfavorable mix with the continuing slowdown in the European tower crane market, our orders in the first quarter were up 5.6% year-over-year; we ended the quarter with a strong backlog. As we look at the balance of 2024, we remain focused on reducing our inventory and generating free cash flows,” commented Aaron H. Ravenscroft, President and Chief Executive Officer of The Manitowoc Company, Inc.

Investor Conference Call

The Manitowoc Company will host a conference call for security analysts and institutional investors to discuss its first-quarter 2024 earnings results on Wednesday, May 8, 2024, 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, adjusted operating income, adjusted return on invested capital ("Adjusted ROIC"), 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, high interest rates and recessionary concerns, as well as continuing global supply chain constraints, labor constraints, logistics constraints and cost pressures such as changes in raw material and commodity costs, have had, and may continue to have, a negative impact on Manitowoc’s ability to convert backlog into revenue which could, and has, impacted its 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 conflicts in Ukraine and in the Middle East, 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), raw material and component costs, energy prices, inflation, consumer behavior, supply chain, and credit and capital markets, and could result in the impairment of assets;
• 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;
• the ability to convert backlog, orders and order activity into sales and the timing of those sales;
• failure to comply with regulatory requirements related to the products and aftermarket services 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;
• the Company’s ability to attract and retain qualified personnel;
• changes in the capital and financial markets;
• the ability to complete and appropriately integrate acquisitions, strategic alliances, joint ventures or other significant transactions;
• issues associated with the availability and viability of suppliers;
• the ability to significantly improve profitability;
• realization of anticipated earnings enhancements, cost savings, strategic options and other synergies, and the anticipated timing to realize those savings, synergies and options;
• the ability to focus on customers, new technologies and innovation;
• uncertainties associated with new product introductions, the successful development and market acceptance of new and innovative products that drive growth;
• the replacement cycle of technologically obsolete products;
• risks associated with high debt leverage;
• foreign currency fluctuation and its impact on reported results;
• the ability of Manitowoc's customers to receive financing;
• risks associated with data security and technological systems and protections;
• the ability to direct resources to those areas that will deliver the highest returns;
• risks associated with manufacturing or design defects;
• natural disasters, other weather events, pandemics and other public health crises disrupting commerce in one or more regions of the world;
• issues relating to the ability to timely and effectively execute on manufacturing strategies, general efficiencies and capacity utilization of the Company’s facilities;
• the ability to focus and capitalize on product and service quality and reliability;
• issues associated with the quality of materials, components and products sourced from third parties and the ability to successfully resolve those issues;
• issues related to workforce reductions and potential subsequent rehiring;
• changes in laws throughout the world, including governmental regulations on climate change;
• the inability to defend against potential infringement claims on intellectual property rights;
• the ability to sell products and services through distributors and other third parties;
• issues affecting the effective tax rate for the year;
• acts of terrorism; and
• other risks and factors detailed in Manitowoc's 2023 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, 2023.

THE MANITOWOC COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share and share amounts)
		Three Months Ended March 31,
		2024				2023
Net sales		$	495.1			$	508.3
Cost of sales			402.6				402.0
Gross profit			92.5				106.3
Operating costs and expenses:
Engineering, selling, and administrative expenses			76.0				75.1
Amortization of intangible assets			0.7				1.0
Restructuring expense			0.6				—
Total operating costs and expenses			77.3				76.1
Operating income			15.2				30.2
Other income (expense):
Interest expense			(9.2	)			(8.1	)
Amortization of deferred financing fees			(0.3	)			(0.3	)
Other income (expense) - net			0.7				(1.1	)
Total other expense			(8.8	)			(9.5	)
Income before income taxes			6.4				20.7
Provision for income taxes			1.9				4.2
Net income		$	4.5			$	16.5
Per Share Data and Share Amounts
Basic net income per common share		$	0.13			$	0.47
Diluted net income per common share		$	0.12			$	0.46
Weighted average shares outstanding - basic			35,265,449				35,121,473
Weighted average shares outstanding - diluted			36,060,640				35,748,021

THE MANITOWOC COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except par value and share amounts)
		March 31, 2024				December 31, 2023
Assets
Current Assets:
Cash and cash equivalents		$	31.5			$	34.4
Accounts receivable, less allowances of $5.9 and $6.1, respectively			290.3				278.8
Inventories - net			748.0				666.5
Notes receivable — net			5.7				6.7
Other current assets			43.9				46.6
Total current assets			1,119.4				1,033.0
Property, plant, and equipment — net			357.5				366.1
Operating lease right-of-use assets			58.8				59.7
Goodwill			78.7				79.6
Intangible assets — net			123.3				125.6
Other non-current assets			42.9				42.7
Total assets		$	1,780.6			$	1,706.7
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses		$	509.4			$	457.4
Customer advances			20.3				19.2
Short-term borrowings and current portion of long-term debt			42.5				13.4
Product warranties			41.3				47.1
Other liabilities			18.7				26.2
Total current liabilities			632.2				563.3
Non-Current Liabilities:
Long-term debt			372.7				358.7
Operating lease liabilities			46.6				47.2
Deferred income taxes			7.4				7.5
Pension obligations			54.9				55.8
Postretirement health and other benefit obligations			5.4				5.6
Long-term deferred revenue			21.1				24.1
Other non-current liabilities			44.3				41.2
Total non-current liabilities			552.4				540.1
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, 35,540,950 and 35,094,993 shares outstanding, respectively)			0.4				0.4
Additional paid-in capital			608.5				613.1
Accumulated other comprehensive loss			(98.9	)			(86.4	)
Retained earnings			148.0				143.5
Treasury stock, at cost (5,253,033 and 5,698,990 shares, respectively)			(62.0	)			(67.3	)
Total stockholders' equity			596.0				603.3
Total liabilities and stockholders' equity		$	1,780.6			$	1,706.7

THE MANITOWOC COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
		Three Months Ended March 31,
		2024				2023
Cash Flows from Operating Activities:
Net income		$	4.5			$	16.5
Adjustments to reconcile net income to cash provided by (used for) operating activities:
Depreciation expense			14.7				13.9
Amortization of intangible assets			0.7				1.0
Stock-based compensation expense			3.7				3.1
Amortization of deferred financing fees			0.3				0.3
Loss on sale of property, plant, and equipment			0.2				—
Changes in operating assets and liabilities:
Accounts receivable			(15.3	)			17.1
Inventories			(89.1	)			(100.6	)
Notes receivable			1.5				1.7
Other assets			1.1				1.6
Accounts payable			56.6				56.2
Accrued expenses and other liabilities			(9.5	)			4.6
Net cash provided by (used for) operating activities			(30.6	)			15.4
Cash Flows from Investing Activities:
Capital expenditures			(12.2	)			(10.6	)
Proceeds from sale of fixed assets			0.2				2.0
Net cash used for investing activities			(12.0	)			(8.6	)
Cash Flows from Financing Activities:
Proceeds from (payments on) revolving credit facility - net			14.0				(10.0	)
Proceeds from (payments on) other debt - net			29.1				(1.9	)
Exercises of stock options			—				0.3
Common stock repurchases			—				(3.5	)
Other financing activities			(2.9	)			—
Net cash provided by (used for) financing activities			40.2				(15.1	)
Effect of exchange rate changes on cash and cash equivalents			(0.5	)			0.4
Net decrease in cash and cash equivalents			(2.9	)			(7.9	)
Cash and cash equivalents at beginning of period			34.4				64.4
Cash and cash equivalents at end of period		$	31.5			$	56.5

Non-GAAP Financial Measures

Adjusted net income, Adjusted DEPS, EBITDA, adjusted EBITDA, adjusted operating income, Adjusted ROIC, 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, 2024 and 2023 are summarized as follows. All dollar amounts are in millions, except per share data and share amounts.

		Three Months Ended March 31,
		2024												2023
		As reported				Adjustments				Adjusted				As reported				Adjustments				Adjusted
Gross profit		$	92.5			$	—			$	92.5			$	106.3			$	—			$	106.3
Engineering, selling, and administrative expenses (1)			(76.0	)			0.1				(75.9	)			(75.1	)			—				(75.1	)
Amortization of intangible assets			(0.7	)			—				(0.7	)			(1.0	)			—				(1.0	)
Restructuring expense (2)			(0.6	)			0.6				—				—				—				—
Operating income			15.2				0.7				15.9				30.2				—				30.2
Interest expense			(9.2	)			—				(9.2	)			(8.1	)			—				(8.1	)
Amortization of deferred financing fees			(0.3	)			—				(0.3	)			(0.3	)			—				(0.3	)
Other income (expense) - net			0.7				—				0.7				(1.1	)			—				(1.1	)
Income before income taxes			6.4				0.7				7.1				20.7				—				20.7
Provision for income taxes (3)			(1.9	)			(0.1	)			(2.0	)			(4.2	)			—				(4.2	)
Net income		$	4.5			$	0.6			$	5.1			$	16.5			$	—			$	16.5
Diluted weighted average common shares outstanding			36,060,640								36,060,640				35,748,021								35,748,021
Diluted net income per common share		$	0.12							$	0.14			$	0.46							$	0.46

(1)	The adjustment in 2024 represents $0.1 million of one-time costs.
(2)	The adjustment in 2024 represents the addback of restructuring expense.
(3)	The adjustment in 2024 represents the net income tax impacts of items (1) and (2).

Adjusted ROIC

The Company defines Adjusted ROIC as adjusted net operating profit after tax (“Adjusted NOPAT”) for the trailing twelve-months ended divided by the five-quarter average of invested capital. Adjusted NOPAT is calculated for each quarter by taking operating income plus the addback of amortization of intangible assets and the addback or subtraction of restructuring expenses, certain other non-recurring items - net and provision for income taxes, which is determined using a 15% tax rate. Invested capital is defined as net total assets less cash and cash equivalents and income tax assets/liabilities - net plus short-term and long-term debt. Income taxes are defined as income tax payables/receivables, net deferred tax assets/liabilities, and uncertain tax positions.

The Company’s Adjusted ROIC as of March 31, 2024 was 9.5%. Below is the calculation of Adjusted ROIC as of March 31, 2024.

		Three Months Ended
		March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				Trailing Twelve Months
Operating income		$	15.2			$	9.8			$	18.0			$	34.4			$	77.4
Amortization of intangible assets			0.7				0.8				0.7				0.7				2.9
Restructuring expense			0.6				0.3				0.7				0.3				1.9
Other non-recurring items - net1			0.1				10.8				0.2				10.8				21.9
Adjusted operating income			16.6				21.7				19.6				46.2				104.1
Provision for income taxes			(2.5	)			(3.3	)			(2.9	)			(6.9	)			(15.6	)
Adjusted NOPAT		$	14.1			$	18.4			$	16.7			$	39.3			$	88.5

		March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023				5-Quarter Average
Total assets		$	1,780.6			$	1,706.7			$	1,692.2			$	1,701.1			$	1,691.1				1,714.3
Total liabilities			(1,184.6	)			(1,103.4	)			(1,119.2	)			(1,121.7	)			(1,138.3	)			(1,133.4	)
Net total assets			596.0				603.3				573.0				579.4				552.8				580.9
Cash and cash equivalents			(31.5	)			(34.4	)			(40.0	)			(25.9	)			(56.5	)			(37.7	)
Short-term borrowings and current portion of long-term debt			42.5				13.4				30.3				6.7				7.9				20.2
Long-term debt			372.7				358.7				368.5				380.7				369.5				370.0
Income tax (assets) liabilities - net			(3.4	)			(2.6	)			(4.3	)			(2.1	)			6.3				(1.2	)
Invested capital		$	976.3			$	938.4			$	927.5			$	938.8			$	880.0			$	932.2
Adjusted ROIC																							9.5	%

(1)

Other non-recurring items - net for the three months ended March 31, 2024 relate to $0.1 million of one-time costs. Other non-recurring items – net for the trailing twelve months relate to $21.2 million of costs associated with a legal matter with the U.S. EPA and $0.7 million of one-time costs. Refer to the Company’s previously filed Form 10-K and Form 10-Qs for a description of other non-recurring items - net for the three months ended December 31, 2023, September 30, 2023, and June 30, 2023.

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 months ended March 31, 2024 and 2023 are summarized as follows. All dollar amounts are in millions.

		Three Months Ended March 31,
		2024				2023
Net cash provided by (used for) operating activities		$	(30.6	)		$	15.4
Capital expenditures			(12.2	)			(10.6	)
Free cash flows		$	(42.8	)		$	4.8

EBITDA and Adjusted EBITDA

The Company defines EBITDA as net income before interest, taxes, depreciation, and amortization. The Company defines adjusted EBITDA as EBITDA plus the addback or subtraction of restructuring, other income (expense) - net, and certain other non-recurring items - net. The reconciliation of net income to EBITDA, and further to adjusted EBITDA for the three months ended March 31, 2024 and 2023 and trailing twelve months are summarized as follows. All dollar amounts are in millions.

	Three Months Ended March 31,								Trailing Twelve
	2024				2023				Months
Net income	$	4.5			$	16.5			$	27.2
Interest expense and amortization of deferred financing fees		9.5				8.4				36.3
Provision for income taxes		1.9				4.2				2.7
Depreciation expense		14.7				13.9				57.4
Amortization of intangible assets		0.7				1.0				2.9
EBITDA		31.3				44.0				126.5
Restructuring expense		0.6				—				1.9
Other non-recurring items - net (1)		0.1				—				21.9
Other (income) expense - net (2)		(0.7	)			1.1				11.2
Adjusted EBITDA	$	31.3			$	45.1			$	161.5
Adjusted EBITDA margin percentage		6.3	%			8.9	%			7.3	%

(1)

Other non-recurring items - net for the three months ended March 31, 2024 relate to $0.1 million of one-time costs. Other non-recurring items - net for the trailing twelve months relate to $21.2 million of costs associated with a legal matter with the U.S. EPA and $0.7 million of one-time costs.

(2)

Other (income) expense - net includes net foreign currency gains (losses), other components of net periodic pension costs, and other items in the three and trailing twelve months ended March 31, 2024 and the three months ended March 31, 2023. Other (income) expense – net for the trailing twelve months includes a $9.3 million write-off of non-cash foreign currency translation adjustments from the curtailment of operations in Russia.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240507631699/en/

Ion Warner

SVP, Marketing and Investor Relations

+1 414-760-4805

Source: The Manitowoc Company, Inc.

FAQ

What were The Manitowoc Company's first-quarter 2024 net sales?

The net sales for the first quarter of 2024 were $495.1 million, down 2.6% year-over-year.

What was the first-quarter 2024 diluted net income per share?

The diluted net income per share for the first quarter of 2024 was $0.12, $0.14 on an adjusted basis.

How did The Manitowoc Company's adjusted EBITDA perform in the first quarter of 2024?

The adjusted EBITDA for the first quarter of 2024 was $31.3 million, with a margin percentage of 6.3%, a decrease of 30.6% from the prior year.

What was the first-quarter 2024 adjusted return on invested capital for The Manitowoc Company?

The adjusted return on invested capital for the first quarter of 2024 was 9.5%.