Fourth-quarter 2019
Highlights
- Net sales of $463.4 million
- Adjusted EBITDA(1) of $30.9 million
- Diluted earnings per share of $0.26, $0.35 on an adjusted
basis(1)
- Cash flows from operating activities of $144.6 million
Full-year 2019
Highlights
- Net sales of $1,834.1 million
- Adjusted EBITDA(1) of $156.6 million
- Diluted earnings per share of $1.31, $1.89 on an adjusted
basis(1)
- Adjusted operating cash flows(1) of $148.0 million, a 220%
conversion rate to adjusted net income
The Manitowoc Company, Inc. (NYSE: MTW), (the “Company” or
“Manitowoc”) a leading global manufacturer of cranes and lifting
solutions, today reported fourth-quarter net income of $9.2
million, or $0.26 per diluted share. Fourth-quarter adjusted net
income(1) improved 117% to $12.6 million, or $0.35 per diluted
share. The Company also reported fourth-quarter adjusted EBITDA(1)
of $30.9 million, or 6.7% of sales. Fourth-quarter adjusted
operating cash flows of $144.6 million increased $108.9 million
from the comparable period in 2018.
Fourth-quarter orders of $472.0 million decreased 2% from the
prior year on a currency neutral basis. Full-year 2019 orders
totaled $1,638.6 million, a 13% decrease year-over-year on a
currency neutral basis. Backlog totaled $475.1 million at December
31, 2019.
Full-year 2019 net sales of $1,834.1 million were negatively
impacted by $44.3 million due to unfavorable changes in foreign
currency exchange rates. Full-year 2019 adjusted EBITDA(1) was
$156.6 million, and 8.5% of net sales, representing an improvement
of approximately $40.4 million and 220 basis points over the prior
year, respectively. Adjusted diluted earnings per share from
continuing operations increased $1.25 in 2019, to $1.89. Full-year
adjusted operating cash flows(1) improved $150.9 million from the
comparable period to $148.0 million.
“I am pleased to report another quarter of improving
year-over-year adjusted EBITDA margin and strong cash generation as
we reduced inventory from June 30, 2019 by approximately $91
million, exceeding our expectations. Our fourth-quarter results
contributed to what was an outstanding 2019 for Manitowoc. The four
strategic priorities of The Manitowoc Way continue to generate
results that prove our ability to deliver on our commitments,”
commented Barry L. Pennypacker, President and Chief Executive
Officer of The Manitowoc Company, Inc.
Pennypacker added, “We will continue to provide our customers
with the types of cranes they need to increase their return on
invested capital. This will be evident with our new product
introductions at the ConExpo trade show in March 2020, where we
will showcase six new cranes. While 2019 was a great year from a
financial results perspective, our backlog declined 29%
year-over-year primarily in the Americas region, setting up a more
challenging year ahead. In spite of this, I am confident that
through our ongoing lean transformation, Manitowoc has never been
in a better position to navigate the market cycle, be it up or
down,” concluded Pennypacker.
Full-Year 2020 Guidance:
- Net sales – approximately $1.6 to $1.7 billion;
- Adjusted EBITDA – approximately $85 to $115 million;
- Depreciation – approximately $35 to $37 million;
- Restructuring expense – approximately $4 to $6 million;
- Interest expense – approximately $28 to $30 million;
- Income tax expense – approximately $11 to $15 million,
excluding discrete items; and
- Capital expenditures – approximately $30 million.
Investor Conference Call
On Friday, February 7th, 2020, at 10:00 a.m. ET (9:00 a.m. CT),
The Manitowoc Company’s senior management will discuss its
fourth-quarter and full-year 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, 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, Inc. was founded in 1902 and has over a
117-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 from continuing operations, adjusted
EBITDA, adjusted operating cash flows, free cash flows and adjusted
diluted EPS 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:
- actions of competitors;
- 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;
- geographic factors and political and economic conditions and
risks;
- the ability to capitalize on key strategic opportunities and
the ability to implement Manitowoc’s long-term initiatives;
- government approval and funding of projects and the effect of
government-related issues or developments;
- unanticipated changes in the capital and financial
markets;
- unanticipated changes in revenues, margins and costs;
- the ability to increase operational efficiencies across
Manitowoc and to capitalize on those efficiencies;
- the ability to significantly improve profitability; 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 Consolidated
Financial Information
For the three and twelve months
ended December 31, 2019 and 2018
(In millions, except share
data)
CONSOLIDATED STATEMENT OF
OPERATIONS
Three months ended
December 31,
Year ended
December 31,
2019
2018
2019
2018
Net sales
$
463.4
$
515.3
$
1,834.1
$
1,846.8
Cost of sales
383.1
426.1
1,490.0
1,518.7
Gross profit
80.3
89.2
344.1
328.1
Operating costs and expenses:
Engineering, selling and administrative
expenses
60.9
67.0
225.6
251.6
Asset impairment expense
—
82.2
—
82.6
Amortization of intangible assets
0.1
0.1
0.3
0.3
Restructuring expense
1.5
1.9
9.8
12.9
Total operating costs and expenses
62.5
151.2
235.7
347.4
Operating income (loss)
17.8
(62.0
)
108.4
(19.3
)
Other income (expense):
Interest expense
(7.1
)
(9.8
)
(32.7
)
(39.1
)
Amortization of deferred financing
fees
(0.3
)
(0.4
)
(1.5
)
(1.8
)
Loss on debt extinguishment
—
—
(25.0
)
—
Other income (expense) - net
0.9
(2.9
)
9.8
(11.5
)
Total other expense
(6.5
)
(13.1
)
(49.4
)
(52.4
)
Income (loss) from continuing operations
before income taxes
11.3
(75.1
)
59.0
(71.7
)
Provision (benefit) for income taxes
2.1
3.2
12.4
(4.8
)
Net income (loss) from continuing
operations
9.2
(78.3
)
46.6
(66.9
)
Discontinued operations:
Loss from discontinued operations, net of
income taxes
—
—
—
(0.2
)
Net income (loss)
$
9.2
$
(78.3
)
$
46.6
$
(67.1
)
Per Share Data
Basic income (loss) per common share:
Net income (loss) from continuing
operations
$
0.26
$
(2.20
)
$
1.31
$
(1.88
)
Loss from discontinued operations
—
—
—
(0.01
)
Basic income (loss) per share
$
0.26
$
(2.20
)
$
1.31
$
(1.89
)
Diluted income (loss) per common
share:
Net income (loss) from continuing
operations
$
0.26
$
(2.20
)
$
1.31
$
(1.88
)
Loss from discontinued operations
—
—
—
(0.01
)
Diluted income (loss) per share
$
0.26
$
(2.20
)
$
1.31
$
(1.89
)
Weighted average shares outstanding -
Basic
35,366,843
35,587,023
35,487,358
35,513,162
Weighted average shares outstanding -
Diluted
35,499,167
35,587,023
35,641,800
35,513,162
THE MANITOWOC COMPANY,
INC.
Unaudited Consolidated
Financial Information
As of December 31, 2019 and
December 31, 2018
(In millions, except share
data)
CONSOLIDATED BALANCE SHEETS
2019
2018
Assets
Current Assets:
Cash and cash equivalents
$
199.3
$
140.3
Accounts receivable, less allowances of
$7.9 and $10.3, respectively
168.3
171.8
Inventories — net
461.4
453.1
Notes receivable — net
17.4
19.4
Other current assets
26.0
58.3
Total current assets
872.4
842.9
Property, plant and equipment — net
289.9
288.9
Operating lease right-of-use assets
47.6
—
Goodwill
232.5
232.8
Other intangible assets — net
116.3
118.1
Other non-current assets
59.0
59.2
Total assets
$
1,617.7
$
1,541.9
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable and accrued expenses
$
340.8
$
425.2
Short-term borrowings and current portion
of long-term debt
3.8
6.4
Product warranties
47.2
39.1
Customer advances
25.8
9.6
Other liabilities
23.3
16.3
Total current liabilities
440.9
496.6
Non-Current Liabilities:
Long-term debt
308.4
266.7
Operating lease liabilities
37.6
—
Deferred income taxes
5.5
5.7
Pension obligations
86.4
85.7
Postretirement health and other benefit
obligations
16.4
18.3
Long-term deferred revenue
30.3
25.2
Other non-current liabilities
46.3
42.4
Total non-current liabilities
530.9
444.0
Total 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, 35,374,537 and 35,588,833
shares outstanding, respectively)
0.4
0.4
Additional paid-in capital
592.2
584.8
Accumulated other comprehensive loss
(121.0
)
(116.6
)
Retained earnings
236.2
189.6
Treasury stock, at cost (5,419,446 and
5,205,150 shares, respectively)
(61.9
)
(56.9
)
Total stockholders’ equity
645.9
601.3
Total liabilities and stockholders'
equity
$
1,617.7
$
1,541.9
THE MANITOWOC COMPANY,
INC.
Unaudited Consolidated
Financial Information
For the three and twelve months
ended December 31, 2019 and 2018
(In millions)
CONSOLIDATED STATEMENT OF CASH
FLOWS
Three Months Ended
December 31,
Year Ended
December 31,
2019
2018
2019
2018
Cash Flows From Operating
Activities:
Net income (loss)
$
9.2
$
(78.3
)
$
46.6
$
(67.1
)
Adjustments to reconcile net income (loss)
to cash provided by (used for) operating activities:
Asset impairment expense
—
82.2
—
82.6
Loss from discontinued operations, net of
income taxes
—
—
—
0.2
Depreciation expense
8.7
8.9
35.0
36.1
Amortization of intangible assets
0.1
0.1
0.3
0.3
Amortization of deferred financing
fees
0.3
0.4
1.5
1.8
Deferred income tax (benefit) - net
1.5
(11.1
)
1.5
(11.1
)
Loss on early extinguishment of debt
—
—
25.0
—
Loss (gain) on sale of property, plant and
equipment
—
2.6
(3.5
)
0.9
Stock-based compensation expense and
other
1.4
(0.2
)
10.1
7.4
Changes in operating assets and
liabilities, excluding the effects of business divestitures:
Accounts receivable
60.0
(167.1
)
(124.2
)
(553.4
)
Inventories
69.1
33.6
(18.3
)
(72.7
)
Notes receivable
3.4
0.6
2.9
18.6
Other assets
9.2
(3.4
)
23.9
2.7
Accounts payable
(22.3
)
11.7
(59.7
)
56.5
Accrued expenses and other liabilities
4.0
27.5
5.6
(15.6
)
Net cash provided by (used for) operating
activities of continuing operations
144.6
(92.5
)
(53.3
)
(512.8
)
Net cash used for operating activities of
discontinued operations
—
—
—
(0.2
)
Net cash provided by (used for) operating
activities
144.6
(92.5
)
(53.3
)
(513.0
)
Cash Flows From Investing
Activities:
Capital expenditures
(12.7
)
(10.3
)
(35.1
)
(31.7
)
Proceeds from sale of property, plant and
equipment
—
0.8
17.2
13.0
Cash receipts on sold accounts
receivable
—
151.8
126.3
553.1
Net cash provided by (used for) investing
activities
(12.7
)
142.3
108.4
534.4
Cash Flows From Financing
Activities:
Proceeds from revolving credit
facility
8.3
—
139.7
—
Payments on revolving credit facility
(8.3
)
—
(139.7
)
—
Payments on long-term debt
—
0.8
(276.6
)
(3.8
)
Proceeds from long-term debt
—
—
300.0
—
Other debt - net
(1.6
)
—
(4.4
)
—
Debt issuance costs
—
—
(8.3
)
—
Exercises of stock options including
windfall tax benefits
0.2
—
0.4
2.5
Common stock repurchases
—
—
(7.4
)
—
Net cash provided by (used for) financing
activities
(1.4
)
0.8
3.7
(1.3
)
Effect of exchange rate changes on cash
and cash equivalents
1.3
(0.9
)
0.2
(2.8
)
Net increase in cash and cash
equivalents
$
131.8
$
49.7
$
59.0
$
17.3
Non-GAAP Financial Measures
Non-GAAP Items
Adjusted net income from continuing operations, adjusted EBITDA,
adjusted operating cash flows and 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.
Reconciliation of Adjusted Net Income
to Net Income (Loss) From Continuing Operations
(in millions, except share data)
Three Months Ended
December 31,
2019
2018
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit
$
80.3
$
—
$
80.3
$
89.2
$
—
$
89.2
Engineering, selling and
administrative
expenses (1)
(60.9
)
2.8
(58.1
)
(67.0
)
—
(67.0
)
Asset impairment expense (2)
—
—
—
(82.2
)
82.2
—
Amortization of intangible assets
(0.1
)
—
(0.1
)
(0.1
)
—
(0.1
)
Restructuring expense (3)
(1.5
)
1.5
—
(1.9
)
1.9
—
Operating income (loss)
17.8
4.3
22.1
(62.0
)
84.1
22.1
Interest expense
(7.1
)
—
(7.1
)
(9.8
)
—
(9.8
)
Amortization of deferred financing
fees
(0.3
)
—
(0.3
)
(0.4
)
—
(0.4
)
Other income (expense) - net
0.9
—
0.9
(2.9
)
—
(2.9
)
Income (loss) before income
taxes
11.3
4.3
15.6
(75.1
)
84.1
9.0
(Provision) benefit for income taxes
(4)
(2.1
)
(0.9
)
(3.0
)
(3.2
)
—
(3.2
)
Net income (loss) from continuing
operations
$
9.2
$
3.4
$
12.6
$
(78.3
)
$
84.1
$
5.8
Diluted net income (loss) from continuing
operations per share
$
0.26
$
0.35
$
(2.20
)
$
0.16
(1)
The adjustment in 2019 represents the add
back of a loss from a long-term note receivable from the 2014
divestiture of the Company’s Chinese joint venture.
(2)
The adjustment in 2018 represents the add
back of a non-cash goodwill impairment charge in the EURAF
segment.
(3)
The adjustments in 2019 and 2018 represent
the add back of restructuring related charges.
(4)
The adjustments in 2019 and 2018 represent
the income tax impacts of items (1) through (3).
Year Ended
December 31,
2019
2018
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit
$
344.1
$
—
$
344.1
$
328.1
$
—
$
328.1
Engineering, selling and administrative
expenses (1)
(225.6
)
3.1
(222.5
)
(251.6
)
3.6
(248.0
)
Asset impairment expense (2)
—
—
—
(82.6
)
82.6
—
Amortization of intangible assets
(0.3
)
—
(0.3
)
(0.3
)
—
(0.3
)
Restructuring expense (3)
(9.8
)
9.8
—
(12.9
)
12.9
—
Operating income (loss)
108.4
12.9
121.3
(19.3
)
99.1
79.8
Interest expense
(32.7
)
—
(32.7
)
(39.1
)
—
(39.1
)
Amortization of deferred financing
fees
(1.5
)
—
(1.5
)
(1.8
)
—
(1.8
)
Loss on debt extinguishment (4)
(25.0
)
25.0
—
—
—
—
Other income (expense) - net (5)
9.8
(15.5
)
(5.7
)
(11.5
)
4.5
(7.0
)
Income (loss) before income
taxes
59.0
22.4
81.4
(71.7
)
103.6
31.9
(Provision) benefit for income taxes
(6)
(12.4
)
(1.6
)
(14.0
)
4.8
(13.8
)
(9.0
)
Net income (loss) from continuing
operations
$
46.6
$
20.8
$
67.4
$
(66.9
)
$
89.8
$
22.9
Diluted net income (loss) from continuing
operations per share
$
1.31
$
1.89
$
(1.88
)
$
0.64
(1)
Adjustments relate to the add back of
losses from a long-term note receivable relating to the 2014
divestiture of the Company’s Chinese joint venture in 2019 and 2018
and other non-recurring items in 2019.
(2)
The adjustment in 2018 represents the add
back of a non-cash goodwill impairment charge in the EURAF segment
and other non-recurring asset impairment charges.
(3)
The adjustments in 2019 and 2018 represent
the add back of restructuring related charges.
(4)
The 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.
(5)
The adjustment in 2019 represents the
removal of a gain associated with the settlement of a legal matter.
The adjustment in 2018 represents the add back of a pension
settlement charge.
(6)
The adjustments in 2019 and 2018 represent
the income tax impacts of items (1) through (5). The adjustment in
2018 also includes the removal of an income tax benefit from the
partial release of a valuation allowance in the U.K.
Adjusted Operating Cash Flows and Free
Cash Flows
(in millions)
Three Months Ended
December 31,
Year Ended
December 31,
2019
2018
2019
2018
Net cash provided by (used for) operating
activities of continuing operations
$
144.6
$
(92.5
)
$
(53.3
)
$
(512.8
)
Cash receipts on sold accounts
receivable
—
151.8
126.3
553.1
Net payments (borrowings) on accounts
receivable securitization program
—
(23.6
)
75.0
(43.2
)
Adjusted operating cash flows
144.6
35.7
148.0
(2.9
)
Capital expenditures
(12.7
)
(10.3
)
(35.1
)
(31.7
)
Free cash flows
$
131.9
$
25.4
$
112.9
$
(34.6
)
Adjusted EBITDA and Adjusted Operating Income
The Company defines adjusted EBITDA as net income (loss) before
interest, income taxes, depreciation and amortization, plus an
addback of restructuring and certain other charges. The
reconciliation of income (loss) from continuing operations to
adjusted EBITDA and operating income to adjusted operating income
for the three and twelve months ended December 31, 2019 and 2018,
is as follows (in millions):
Three Months Ended
December 31,
Year ended
December 31,
2019
2018
2019
2018
Net income (loss) from continuing
operations
$
9.2
$
(78.3
)
$
46.6
$
(66.9
)
Interest expense and amortization of
deferred financing fees
7.4
10.2
34.2
40.9
Provision (benefit) for income taxes
2.1
3.2
12.4
(4.8
)
Depreciation expense
8.7
8.9
35.0
36.1
Amortization of intangible assets
0.1
0.1
0.3
0.3
EBITDA
27.5
(55.9
)
128.5
5.6
Restructuring expense
1.5
1.9
9.8
12.9
Asset impairment expense
—
82.2
—
82.6
Loss on debt extinguishment
—
—
25.0
—
Other non-recurring charges (1)
2.8
—
3.1
3.6
Other income (expense) - net (2)
(0.9
)
2.9
(9.8
)
11.5
Adjusted EBITDA
30.9
31.1
156.6
116.2
Depreciation expense
(8.7
)
(8.9
)
(35.0
)
(36.1
)
Amortization of intangible assets
(0.1
)
(0.1
)
(0.3
)
(0.3
)
Adjusted operating income
22.1
22.1
121.3
79.8
Restructuring expense
(1.5
)
(1.9
)
(9.8
)
(12.9
)
Asset impairment expense
—
(82.2
)
—
(82.6
)
Other non-recurring charges
(2.8
)
—
(3.1
)
(3.6
)
Operating income (loss)
$
17.8
$
(62.0
)
$
108.4
$
(19.3
)
Adjusted EBITDA margin percentage
6.7
%
6.0
%
8.5
%
6.3
%
Adjusted operating income margin
percentage
4.8
%
4.3
%
6.6
%
4.3
%
(1)
Other non-recurring charges includes
losses from a long-term note receivable resulting from the 2014
divestiture of the Company’s Chinese joint venture recorded in 2019
and 2018 and other charges included in engineering, selling and
administrative expenses in the third-quarter 2019 Consolidated
Statement of Operations.
(2)
Other (income) expense - net includes the
settlement of a legal matter in 2019, along with foreign currency
transaction (gains) losses, other components of net periodic
pension costs and other miscellaneous items recorded in 2019 and
2018.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200206005973/en/
Ion Warner VP, Marketing and Investor Relations +1
414-760-4805
Manitowoc (NYSE:MTW)
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