Manitowoc delivers strong first quarter;
Adjusted EBITDA improves 73% year-over-year; Raises
full-year guidance
The Manitowoc Company, Inc. (NYSE: MTW), (the “Company” or
“Manitowoc”) a leading global manufacturer of cranes and lifting
solutions, today reported first-quarter Adjusted EBITDA(1) of $29.6
million compared to $17.1 million last year, representing a $12.5
million or 73% improvement. First-quarter GAAP net loss was $26.7
million or $0.75 per diluted share, which included a $25.0 million
charge, or $0.70 per diluted share impact, associated with the
Company’s refinancing of its credit facilities. Adjusted net income
(loss)(1) was $2.7 million, or $0.08 per diluted share, in the
first-quarter 2019 versus $(4.1) million, or $(0.12) per diluted
share, in 2018.
Net sales in the first quarter were $418.0 million versus $386.1
million in 2018; a year-over-year increase of 8.3%. The increase
was attributable to higher crane shipments in the Americas and
EURAF regions, coupled with favorable price realization, partly
offset by unfavorable changes in foreign currency exchange
rates.
Adjusted EBITDA margin increased 264 basis points year-over-year
to 7.1% of net sales, in spite of an unfavorable 31 basis point
foreign currency translation impact in the quarter. Organic growth
in the North American market, favorable mix, global price
initiatives and cost reductions realized through restructuring
initiatives were the key drivers in the year-over-year
improvement.
“Manitowoc once again delivered a strong start to the year,
delivering our eighth straight quarter of year-over-year adjusted
EBITDA margin increase. The operating principles of The Manitowoc
Way continue to produce improving financial results as we execute
our strategy for profitable growth by delivering innovation and
velocity in everything we do,” commented Barry L. Pennypacker,
President and Chief Executive Officer of The Manitowoc Company,
Inc. “In March, we successfully refinanced our capital structure to
further strengthen our balance sheet. This action increases
liquidity, reduces interest expense and allows us more flexibility
to deploy our capital in order to increase shareholder value.”
Pennypacker continued, “Market conditions remain very
competitive. We continue to focus on providing innovative products
and services for customers as evidenced by positive customer
reception to our six new cranes introduced at the bauma trade show
in April. As a result of our first-quarter performance and our
proven ability to execute on our strategy, we are raising our
full-year guidance.”
Full-Year 2019 Guidance
Manitowoc updates its full-year 2019 financial guidance as
follows:
- Revenue – approximately $1.900 to
$1.975 billion;
- Adjusted EBITDA - approximately $130 to
$150 million;
- Depreciation - approximately $35 to $37
million;
- Restructuring expense - approximately
$12 to $15 million;
- Interest expense – approximately $29
million 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, May 10th, 2019, at 10:00 a.m. ET (9:00 a.m. CT), The
Manitowoc Company’s senior management will discuss its
first-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 and for the year ended
December 31, 2018 had net sales of approximately $1.8 billion.
Manitowoc is one of the world's leading providers of engineered
lifting solutions. Manitowoc designs, manufactures, markets, and
supports one of the most comprehensive product lines of mobile
telescopic cranes, tower cranes, lattice-boom crawler cranes, and
boom trucks.
Footnote
(1) Non-GAAP adjusted net income (loss), non-GAAP adjusted
EBITDA (“adjusted EBITDA”), non-GAAP adjusted operating cash flow,
and non-GAAP 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 months ended March 31, 2019
and 2018
(In millions, except share data)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended March 31, 2019
2018 Net sales $ 418.0 $ 386.1 Cost of sales 337.8
317.7 Gross profit 80.2
68.4 Operating costs and expenses: Engineering, selling and
administrative expenses 59.4 60.4 Amortization of intangible assets
0.1 0.1 Restructuring expense 4.5 6.2
Total operating costs and expenses 64.0 66.7
Operating income 16.2 1.7 Other income (expense): Interest
expense (10.9 ) (10.0 ) Amortization of deferred financing fees
(0.4 ) (0.5 ) Loss on debt extinguishment (25.0 ) — Other income
(expense) - net (3.3 ) 2.7 Total other expense
(39.6 ) (7.8 ) Loss before income taxes (23.4 ) (6.1
) Provision for income taxes 3.3 3.9
Net loss $ (26.7 ) $ (10.0 ) BASIC LOSS PER COMMON SHARE $
(0.75 ) $ (0.28 ) DILUTED LOSS PER COMMON SHARE $ (0.75 ) $
(0.28 ) Weighted average shares outstanding - Basic
35,642,832 35,367,340 Weighted average shares outstanding - Diluted
35,642,832 35,367,340
THE MANITOWOC COMPANY, INC.
Unaudited Condensed Consolidated Financial Information
As of March 31, 2019 and December 31,
2018
(In millions)
CONDENSED CONSOLIDATED BALANCE SHEETS March
31, 2019 December 31, 2018 ASSETS
Current assets: Cash, cash equivalents and restricted cash $
49.0 $ 140.3 Accounts receivable - net 239.7 171.8 Inventories -
net 538.1 453.1 Notes receivable - net 18.7 19.4 Other current
assets 42.8 58.3 Total current assets 888.3
842.9 Property, plant and equipment - net 286.1 288.9 Operating
lease right-of-use assets 49.1 — Intangible assets - net 350.0
350.9 Other long-term assets 60.4 59.2 TOTAL
ASSETS $ 1,633.9 $ 1,541.9
LIABILITIES &
STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and
accrued expenses $ 420.3 $ 425.2 Short-term borrowings and current
portion of long-term debt 5.9 6.4 Product warranties 37.3 39.1
Customer advances 13.3 9.6 Other liabilities 28.5
16.3 Total current liabilities 505.3 496.6 Non-current
liabilities: Long-term debt 342.0 266.7 Operating lease liabilities
38.3 — Other non-current liabilities 172.5
177.3 Total non-current liabilities 552.8 444.0 Stockholders’
equity 575.8 601.3 TOTAL LIABILITIES &
STOCKHOLDERS’ EQUITY $ 1,633.9 $ 1,541.9
THE MANITOWOC
COMPANY, INC. Unaudited Condensed Consolidated Financial
Information
For the three months ended March 31, 2019
and 2018
(In millions)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Three Months Ended March 31, 2019
2018 Cash flows from operating activities: Net loss $ (26.7
) $ (10.0 ) Depreciation 8.8 9.1 Loss on debt extinguishment 25.0 —
Other non-cash adjustments - net 4.6 2.3 Changes in operating
assets and liabilities Accounts receivable (195.7 ) (130.8 )
Inventories (94.5 ) (71.5 ) Notes receivable — 4.1 Other assets
14.1 8.8 Accounts payable 26.6 46.6 Accrued expenses and other
liabilities (29.5 ) (27.0 ) Net cash used for
operating activities (267.3 ) (168.4 ) Cash flows
from investing activities: Capital expenditures (4.4 ) (6.4 )
Proceeds from fixed assets 4.8 6.3 Cash receipts on sold accounts
receivable 126.3 144.0 Net cash
provided by investing activities 126.7 143.9
Cash flows from financing activities: Proceeds from
(payments on) long-term debt- net 22.2 (2.1 ) Proceeds from
revolving credit facility - net 33.0 — Exercise of stock options
0.1 1.3 Debt issuance costs (5.6 ) —
Net cash used for financing activities 49.7
(0.8 ) Effect of exchange rate changes on cash (0.4 )
1.7 Net decrease in cash, cash equivalents and restricted
cash $ (91.3 ) $ (23.6 )
Non-GAAP Financial Measures
Non-GAAP Items
Non-GAAP adjusted net income (loss) and non-GAAP adjusted EBITDA
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.
Non-GAAP Adjusted Net Income (Loss) and Income (Loss) Per
Share (In millions)
Three Months Ended
March 31, 2019 2018 Net loss $ (26.7 ) $ (10.0
) Special items, net of income tax: Loss on debt extinguishment
25.0 — Restructuring expense 4.4 5.9
Non-GAAP adjusted net income (loss) $ 2.7 $ (4.1 )
Diluted loss per share $ (0.75 ) $ (0.28 ) Special items, net of
income tax: Loss on debt extinguishment 0.70 — Restructuring
expense 0.13 0.16 Diluted non-GAAP
adjusted net income (loss) per share $ 0.08 $ (0.12 )
Non-GAAP Adjusted Operating Cash Flows (In millions)
Three Months Ended March 31, 2019 2018
Net cash used for operating activities: $ (267.3 ) $ (168.4 ) Cash
receipts on sold accounts receivable 126.3 144.0
Non-GAAP adjusted operating cash flows: $ (141.0 ) $ (24.4 )
Adjusted EBITDA and Non-GAAP 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 net
loss to adjusted EBITDA and non-GAAP adjusted operating income for
the current quarter and trailing twelve months, is as follows (in
millions):
Three Months Ended
March 31,
Trailing Twelve
2019 2018 Months Net loss $ (26.7 ) $
(10.0 ) $ (83.6 )
Interest expense and amortization of
deferred financing fees
11.3 10.5 41.7 Provision (benefit) for income taxes 3.3 3.9 (5.4 )
Depreciation expense 8.8 9.1 35.8 Amortization of intangible assets
0.1 0.1 0.3
EBITDA (3.2 ) 13.6 (11.2 ) Restructuring expense 4.5 6.2 11.2 Asset
impairment expense — — 82.6 Loss on long-term Dong Yue receivable —
— 3.6 Loss on debt extinguishment 25.0 — 25.0 Other (income)
expense - net (1) 3.3 (2.7 ) 17.5
Adjusted EBITDA 29.6 17.1 128.7 Depreciation expense
(8.8 ) (9.1 ) (35.8 ) Non-GAAP adjusted operating
income 20.8 8.0 92.9 Restructuring expense (4.5 ) (6.2 ) (11.2 )
Asset impairment expense — — (82.6 ) Loss on long-term Dong Yue
receivable — — (3.6 ) Amortization of intangible assets (0.1
) (0.1 ) (0.3 ) GAAP operating income (loss) $ 16.2
$ 1.7 $ (4.8 ) Adjusted EBITDA margin
percentage 7.1 % 4.4 % 6.8 %
Non-GAAP adjusted operating income margin
percentage
5.0 % 2.1 % 4.9 %
(1)
Other (income) expense - net includes foreign currency
transaction (gains) losses, other components of net periodic
pension costs and other miscellaneous items.
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Ion WarnerVP, Marketing and Investor Relations+1
414-760-4805
Manitowoc (NYSE:MTW)
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