Manitowoc delivers strong second quarter
results; Adjusted EBITDA margin improves 300 bps
year-over-year
The Manitowoc Company, Inc. (NYSE: MTW), (the “Company” or
“Manitowoc”) a leading global manufacturer of cranes and lifting
solutions, today reported second-quarter Adjusted EBITDA(1) of
$53.3 million representing a $15.8 million or 42% improvement
compared to the prior year. Second-quarter GAAP net income was
$46.0 million or $1.29 per diluted share. Adjusted net income(1)
was $33.5 million, or $0.94 per diluted share, in the
second-quarter 2019 versus $14.3 million, or $0.40 per diluted
share, in 2018.
Net sales in the second quarter were $504.7 million versus
$495.3 million in 2018; a year-over-year increase of 1.9%. The
increase was attributable to higher crane and aftermarket shipments
in the Americas region, partly offset by continued weakness in the
Middle East and unfavorable changes in foreign currency exchange
rates.
Orders in the second quarter were $372.0 million versus $430.8
million in 2018; a year-over-year decrease of 14%. This decrease
was primarily in the Americas segment and was partially offset by
increased orders in the EURAF segment. Orders were unfavorably
impacted by $8.4 million due to changes in foreign currency
exchange rates.
Adjusted EBITDA margin increased 300 basis points year-over-year
to 10.6% of net sales, which included a $9.2 million recovery of
administrative expenses associated with the settlement of a legal
matter. Excluding the impact of the settlement, adjusted EBITDA
margin rose 120 basis points year-over-year primarily driven by
North American revenue growth, favorable price realization,
favorable mix and cost reductions.
“The second quarter marked our ninth consecutive quarter of
year-over-year adjusted EBITDA margin improvement, and our fifth
consecutive quarter of positive adjusted diluted earnings per
share. The foundation of The Manitowoc Way is firmly in place
reflecting the strength of our operating model to continually
improve financial results. In the quarter, we repurchased
approximately 473,000 shares of common stock, underscoring our
commitment to effectively deploy our capital,” commented Barry L.
Pennypacker, President and Chief Executive Officer of The Manitowoc
Company, Inc.
Pennypacker added, “In the quarter, order intake from European
customers was in line with our expectations, reflecting positive
reception of our products showcased at the bauma trade show where
we introduced six new cranes. Our North American orders slowed as
customers became more cautious as a result of uncertain market
conditions. Overall, I am very proud of our team and the results we
posted in the first half of the year, and look forward to our
continued transformation into a leaner, more profitable
Manitowoc.”
Updated Full-Year 2019 Guidance:
- Revenue – approximately $1.880 to $1.920 billion;
- Adjusted EBITDA - approximately $140 to $160 million;
- Depreciation - approximately $35 to $37 million;
- Restructuring expense - approximately $10 to $12 million;
- Interest expense – approximately $29 to $33 million, excluding
debt refinancing costs;
- Income tax expense - approximately $12 to $16 million,
excluding discrete items; and
- Capital expenditures - approximately $35 million.
Investor Conference Call
On Friday, August 9th, 2019, at 10:00 a.m. ET (9:00 a.m. CT),
The Manitowoc Company’s senior management will discuss its
second-quarter 2019 earnings results during a live conference call
for security analysts and institutional investors. A live audio
webcast of the call, along with the related presentation, 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, Inc. was founded in 1902 and has over a
116-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 telescopic cranes, tower cranes, lattice-boom crawler cranes
and boom trucks under the Grove, Manitowoc, National Crane, Potain,
Shuttlelift and Manitowoc Crane Care brand names.
Footnote
(1)Adjusted net income (loss), adjusted EBITDA, adjusted
operating cash flow, adjusted free cash flows and adjusted DEPS are
financial measures that are not in accordance with GAAP. For a
reconciliation to the comparable GAAP numbers please see schedule
of “Non-GAAP Financial Measures” at the end of this press release.
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.
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:
- 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;
- unanticipated changes in revenues, margins, costs, and capital
expenditures;
- the ability to increase operational efficiencies across
Manitowoc’s businesses and to capitalize on those
efficiencies;
- the ability to significantly improve profitability;
- the risks associated with economic growth or contraction;
- changes in raw material and commodity prices;
- impairment of goodwill and/or intangible assets;
- foreign currency fluctuation and its impact on reported results
and hedges in place with Manitowoc;
- the ability to focus on customers, new technologies, and
innovation; and
- risks and factors detailed in Manitowoc's 2018 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, 2018.
THE MANITOWOC COMPANY,
INC.
Unaudited Condensed
Consolidated Financial Information
For the three and six months
ended June 30, 2019 and 2018
(In millions, except share
data)
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
Three Months Ended
June 30,
Six Months Ended
June 30,
2019
2018
2019
2018
Net sales
$
504.7
$
495.3
$
922.7
$
881.4
Cost of sales
409.5
404.8
747.3
722.5
Gross profit
95.2
90.5
175.4
158.9
Operating costs and expenses:
Engineering, selling and administrative
expenses
50.5
62.1
109.9
122.5
Asset impairment expense
—
0.4
—
0.4
Amortization of intangible assets
0.1
0.1
0.2
0.2
Restructuring expense
2.7
3.8
7.2
10.0
Total operating costs and expenses
53.3
66.4
117.3
133.1
Operating income
41.9
24.1
58.1
25.8
Other income (expense):
Interest expense
(7.5
)
(9.4
)
(18.4
)
(19.4
)
Amortization of deferred financing
fees
(0.4
)
(0.4
)
(0.8
)
(0.9
)
Loss on debt extinguishment
—
—
(25.0
)
—
Other income (expense) - net
15.9
(5.6
)
12.6
(2.9
)
Total other income (expense)
8.0
(15.4
)
(31.6
)
(23.2
)
Income from continuing operations before
income taxes
49.9
8.7
26.5
2.6
Provision (benefit) for income taxes
3.9
(1.2
)
7.2
2.7
Income (loss) from continuing
operations
46.0
9.9
19.3
(0.1
)
Discontinued operations:
Loss from discontinued operations, net of
income taxes of $0.0,
$0.0, $0.0 and $0.0, respectively
—
(0.2
)
—
(0.2
)
Net income (loss)
$
46.0
$
9.7
$
19.3
$
(0.3
)
Per Share Data
Basic income (loss) per common share:
Income from continuing operations
$
1.29
$
0.28
$
0.54
$
—
Loss from discontinued operations, net of
income taxes
—
(0.01
)
—
(0.01
)
Basic income (loss) per common share
$
1.29
$
0.27
$
0.54
$
(0.01
)
Diluted income (loss) per common
share:
Income from continuing operations
$
1.29
$
0.27
$
0.54
$
—
Loss from discontinued operations, net of
income taxes
—
—
—
(0.01
)
Diluted income (loss) per common share
$
1.29
$
0.27
$
0.54
$
(0.01
)
Weighted average shares outstanding -
basic
35,595,718
35,530,356
35,619,145
35,449,298
Weighted average shares outstanding -
diluted
35,725,908
36,064,108
35,799,089
35,449,298
THE MANITOWOC COMPANY,
INC.
Unaudited Condensed
Consolidated Financial Information
As of June 30, 2019 and December
31, 2018
(In millions)
CONDENSED CONSOLIDATED BALANCE
SHEETS
June 30,
2019
December 31,
2018
Assets
Current Assets:
Cash and cash equivalents
$
35.0
$
140.3
Accounts receivable, less allowances of
$10.1 and $10.3, respectively
265.1
171.8
Inventories — net
552.3
453.1
Notes receivable — net
17.9
19.4
Other current assets
37.2
58.3
Total current assets
907.5
842.9
Property, plant and equipment — net
283.5
288.9
Operating lease right-of-use assets
47.6
—
Goodwill
232.7
232.8
Other intangible assets — net
117.5
118.1
Other long-term assets
63.8
59.2
Total assets
$
1,652.6
$
1,541.9
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable and accrued expenses
$
421.9
$
425.2
Short-term borrowings and current portion
of long-term debt
8.7
6.4
Product warranties
42.4
39.1
Customer advances
10.6
9.6
Other liabilities
25.3
16.3
Total current liabilities
508.9
496.6
Non-Current Liabilities:
Long-term debt
309.6
266.7
Operating lease liabilities
37.0
—
Deferred income taxes
5.3
5.7
Pension obligations
82.9
85.7
Postretirement health and other benefit
obligations
18.0
18.3
Long-term deferred revenue
28.5
25.2
Other non-current liabilities
42.7
42.4
Total non-current liabilities
524.0
444.0
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, 35,347,546 and 35,588,833
shares outstanding, respectively)
0.4
0.4
Additional paid-in capital
588.8
584.8
Accumulated other comprehensive loss
(116.2
)
(116.6
)
Retained earnings
208.9
189.6
Treasury stock, at cost (5,446,437 and
5,205,150 shares, respectively)
(62.2
)
(56.9
)
Total stockholders' equity
619.7
601.3
Total liabilities and stockholders'
equity
$
1,652.6
$
1,541.9
THE MANITOWOC COMPANY,
INC.
Unaudited Condensed
Consolidated Financial Information
For the three and six months
ended June 30, 2019 and 2018
(In millions)
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS
Three Months Ended
June 30,
Six Months Ended
June 30,
2019
2018
2019
2018
Cash flows from operations:
Net income (loss)
$
46.0
$
9.7
$
19.3
$
(0.3
)
Adjustments to reconcile net income (loss)
to cash used for operating activities:
Asset impairment expense
—
0.4
—
0.4
Depreciation
8.6
9.1
17.4
18.2
Amortization of intangible assets
0.1
0.1
0.2
0.2
Amortization of deferred financing
fees
0.4
0.4
0.8
0.9
Loss on debt extinguishment
—
—
25.0
—
Gain on sale of property, plant and
equipment
(0.4
)
(0.9
)
—
(2.2
)
Other
2.3
(2.3
)
6.0
0.7
Changes in operating assets and
liabilities
Accounts receivable
(26.9
)
(143.1
)
(222.6
)
(273.9
)
Inventories
(12.0
)
(8.0
)
(106.5
)
(79.5
)
Notes receivable
(2.3
)
4.2
(2.3
)
8.3
Other assets
12.0
(8.5
)
26.1
0.3
Accounts payable
(4.5
)
22.6
22.1
69.2
Accrued expenses and other liabilities
8.6
16.4
(20.9
)
(10.6
)
Net cash provided by (used for) operating
activities
31.9
(99.9
)
(235.4
)
(268.3
)
Cash flows from investing:
Capital expenditures
(5.3
)
(8.8
)
(9.7
)
(15.2
)
Proceeds from fixed assets
—
2.1
4.8
8.4
Cash receipts on sold accounts
receivable
—
94.0
126.3
238.0
Net cash provided by (used for) investing
activities
(5.3
)
87.3
121.4
231.2
Cash flows from financing:
Proceeds from revolving credit
facility
24.8
—
82.8
—
Payments on revolving credit facility
(57.8
)
—
(82.8
)
—
Payments on long-term debt
—
—
(276.6
)
—
Proceeds from long-term debt
—
—
300.0
—
Other debt - net
3.1
(0.9
)
1.9
(3.0
)
Debt issuance costs
(2.6
)
—
(8.2
)
—
Exercise of stock options
—
0.7
0.1
2.0
Common stock repurchases
(7.4
)
—
(7.4
)
—
Net cash provided by (used for) financing
activities
(39.9
)
(0.2
)
9.8
(1.0
)
Effect of exchange rate changes on
cash
(0.7
)
(2.9
)
(1.1
)
(1.2
)
Net decrease in cash and cash
equivalents
$
(14.0
)
$
(15.7
)
$
(105.3
)
$
(39.3
)
Non-GAAP Financial Measures
Non-GAAP Items
Adjusted net income (loss), adjusted EBITDA, adjusted operating
cash flows and adjusted free cash flows are financial measures that
are not in accordance with 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 (Loss) and Net
Income (Loss) Per Share from Continuing Operations
($ in millions, except share data)
Three Months Ended
June 30,
2019
2018
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit
$
95.2
$
—
$
95.2
$
90.5
$
—
$
90.5
Engineering, selling and
administrative
expenses
(50.5
)
—
(50.5
)
(62.1
)
—
(62.1
)
Asset impairment expense (1)
—
—
—
(0.4
)
0.4
-
Amortization of intangible assets
(0.1
)
—
(0.1
)
(0.1
)
—
(0.1
)
Restructuring expense (2)
(2.7
)
2.7
—
(3.8
)
3.8
-
Operating income
41.9
2.7
44.6
24.1
4.2
28.3
Interest expense
(7.5
)
—
(7.5
)
(9.4
)
—
(9.4
)
Amortization of deferred financing
fees
(0.4
)
—
(0.4
)
(0.4
)
—
(0.4
)
Other income (expense) - net (3)
15.9
(15.5
)
0.4
(5.6
)
—
(5.6
)
Income before income taxes
49.9
(12.8
)
37.1
8.7
4.2
12.9
(Provision) benefit for income taxes
(4)
(3.9
)
0.3
(3.6
)
1.2
0.2
1.4
Net income from continuing
operations
$
46.0
$
(12.5
)
$
33.5
$
9.9
$
4.4
$
14.3
Diluted income from continuing
operations
per share
$
1.29
$
0.94
$
0.27
$
0.40
(1)
Adjustment represents the add back of one-time asset impairment
charges.
(2) Adjustment represents the add back of restructuring related
charges. (3) Adjustment represents the removal of a gain associated
with the settlement of a legal matter. (4)
Adjustment represents the tax impacts of items (1) through
(3).
Six Months Ended
June 30,
2019
2018
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit
$
175.4
$
—
$
175.4
$
158.9
$
—
$
158.9
Engineering, selling and
administrative
expenses
(109.9
)
—
(109.9
)
(122.5
)
—
(122.5
)
Asset impairment expense (1)
—
—
—
(0.4
)
0.4
-
Amortization of intangible assets
(0.2
)
—
(0.2
)
(0.2
)
—
(0.2
)
Restructuring expense (2)
(7.2
)
7.2
—
(10.0
)
10.0
-
Operating income
58.1
7.2
65.3
25.8
10.4
36.2
Interest expense
(18.4
)
—
(18.4
)
(19.4
)
—
(19.4
)
Amortization of deferred financing
fees
(0.8
)
—
(0.8
)
(0.9
)
—
Loss on debt extinguishment (3)
(25.0
)
25.0
—
—
—
Other income (expense) - net (4)
12.6
(15.5
)
(2.9
)
(2.9
)
—
(2.9
)
Income before income taxes
26.5
16.7
43.2
2.6
10.4
13.0
(Provision) benefit for income taxes
(5)
(7.2
)
0.4
(6.8
)
(2.7
)
0.5
(2.2
)
Net income from continuing
operations
$
19.3
$
17.1
$
36.4
$
(0.1
)
$
10.9
$
10.8
Diluted income from continuing
operations
per share
$
0.54
$
1.02
$
—
$
0.30
(1)
Adjustment represents the add
back of one-time asset impairment charges.
(2)
Adjustment represents the add
back of restructuring related charges.
(3)
Adjustment represents the removal
of charges related to the Company’s refinancing of its Asset Based
Lending Revolving Credit Facility and senior secured second lien
notes.
(4)
Adjustment represents the removal
of a gain associated with the settlement of a legal matter.
(5)
Adjustment represents the tax
impacts of items (1) through (4).
Adjusted Operating Cash Flows and
Adjusted Free Cash Flows
($ in millions, except share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2019
2018
2019
2018
Net cash provided by (used for)
operating
activities:
$
31.9
$
(99.9
)
$
(235.4
)
$
(268.3
)
Cash receipts on sold accounts
receivable
—
94.0
126.3
238.0
Net payments (borrowings) on accounts
receivable securitization program
—
0.4
75.0
(16.4
)
Adjusted operating cash flows:
31.9
(5.5
)
(34.1
)
(46.7
)
Capital expenditures
(5.3
)
(8.8
)
(9.7
)
(15.2
)
Adjusted free cash flows:
$
26.6
$
(14.3
)
$
(43.8
)
$
(61.9
)
Adjusted EBITDA and Adjusted Operating Income
The Company defines adjusted EBITDA as earnings before interest,
taxes, depreciation and amortization, plus an addback of certain
restructuring and other charges. The reconciliation of GAAP income
(loss) from continuing operations to adjusted EBITDA and adjusted
operating income for the three and six months ended June 30, 2019
and 2018 and trailing twelve months, is as follows (in
millions):
Three Months Ended
June 30,
Six Months Ended
June 30,
Trailing Twelve
2019
2018
2019
2018
Months
Income (loss) from continuing
operations
$
46.0
$
9.9
$
19.3
$
(0.1
)
$
(47.5
)
Interest expense and amortization of
deferred
financing fees
7.9
9.8
19.2
20.3
39.8
Provision (benefit) for taxes
3.9
(1.2
)
7.2
2.7
(0.3
)
Depreciation expense
8.6
9.1
17.4
18.2
35.3
Amortization of intangible assets
0.1
0.1
0.2
0.2
0.3
EBITDA
66.5
27.7
63.3
41.3
27.6
Restructuring expense
2.7
3.8
7.2
10.0
10.1
Asset impairment expense
—
0.4
—
0.4
82.2
Loss on debt extinguishment
—
—
25.0
—
28.6
Other (income) expense - net (1)
(15.9
)
5.6
(12.6
)
2.9
(4.0
)
Adjusted EBITDA
53.3
37.5
82.9
54.6
144.5
Depreciation expense
(8.6
)
(9.1
)
(17.4
)
(18.2
)
(35.3
)
Adjusted operating income
44.7
28.4
65.5
36.4
109.2
Restructuring expense
(2.7
)
(3.8
)
(7.2
)
(10.0
)
(10.1
)
Asset impairment expense
—
(0.4
)
—
(0.4
)
(82.2
)
Loss on long-term Dong Yue receivable
—
—
—
—
(3.6
)
Amortization of intangible assets
(0.1
)
(0.1
)
(0.2
)
(0.2
)
(0.3
)
GAAP operating income
$
41.9
$
24.1
$
58.1
$
25.8
$
16.6
Adjusted EBITDA margin percentage
10.6
%
7.6
%
9.0
%
6.2
%
7.7
%
Non-GAAP adjusted operating income
margin percentage
8.9
%
5.7
%
7.1
%
4.1
%
5.8
%
(1)
Other (income) expense - net
includes the settlement of a legal matter, foreign currency
transaction (gains) losses, other components of net periodic
pension costs, gain on the settlement of a legal matter and other
miscellaneous items.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190808005905/en/
Ion Warner VP, Marketing and Investor Relations +1
414-760-4805
Manitowoc (NYSE:MTW)
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