Manitowoc reports Net Sales of $328.3
million; Adjusted EBITDA(1) of $7.8 million
Company to Host Earnings Call on Thursday,
August 6th, at 10:00 a.m. ET
The Manitowoc Company, Inc. (NYSE: MTW), (the “Company” or
“Manitowoc”) a leading global manufacturer of cranes and lifting
solutions, today reported a second-quarter net loss of $12.7
million, or $0.37 per diluted share. Second-quarter adjusted net
loss(1) of $16.2 million, or $0.47 per diluted share, declined
$49.7 million year-over-year.
Net sales in the second quarter, 2020 decreased 35%
year-over-year to $328.3 million. The COVID-19 pandemic coupled
with weak economic activity impacted demand in all regions.
Adjusted EBITDA(1) of $7.8 million, or 2.4% of sales, declined
$45.5 million mainly due to the sales decline and reduced
manufacturing activity in the quarter.
Second-quarter orders of $237.8 million declined 36.1% from the
prior year. Backlog as of June 30, 2020 totaled $430.5 million, a
decrease of 17% from March 31, 2020.
“Our second-quarter adjusted EBITDA of $7.8 million reflected
good operational performance and was in line with our expectations,
considering the vast challenges posed by the ongoing COVID-19
pandemic. I am proud of our team’s resilience as we continue to
operate with excellence and meet our customers’ expectations, while
protecting the well-being of our employees and partnering with our
supply chain during this global pandemic,” commented Aaron H.
Ravenscroft, President and Chief Executive Officer of The Manitowoc
Company, Inc.
“During our 117-year history, we have endured several unforeseen
crises, and I am confident we will successfully navigate this one
as evidenced by our prudent cash management and ample liquidity of
$375 million. The strengths that are core to Manitowoc's business –
our people, our products and brands, our network and our
operational excellence – guide every decision we make and position
us for success when demand returns,” concluded Ravenscroft.
2020 Outlook
As a result of the significant uncertainty around the future
impact that COVID-19 will have on the Company’s end market demand
and supply chain, full year 2020 guidance is not being
provided.
CEO Succession Plan
In a separate release issued today, the Company announced that
Aaron H. Ravenscroft, formerly the Company’s Executive Vice
President of Cranes, has been appointed President and CEO, and a
member of the Board of Directors, effective immediately. Mr.
Ravenscroft succeeds Barry L. Pennypacker, who is stepping down
from his role as President and Chief Executive Officer and as a
member of the Board as part of the Company’s leadership transition
plan. Mr. Pennypacker will continue to serve the Company in an
advisory role through December 31, 2020, to ensure a smooth
transition.
Investor Conference Call – New Date and Time
The Manitowoc Company will now host a conference call for
security analysts and institutional investors to discuss its
second-quarter earnings results on Thursday, August 6th, 2020, 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, 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 (loss), diluted adjusted net income
(loss) per share, adjusted EBITDA, adjusted operating income
(loss), adjusted operating cash flows and free cash flows 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:
- The negative impacts COVID-19 has had and will continue to have
on our 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 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 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 2019 Annual Report on
Form 10-K, as such were previously supplemented and amended in
Manitowoc’s Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2020 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, 2019, as
supplemented and amended in its Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 2020.
THE MANITOWOC COMPANY,
INC.
Unaudited Consolidated
Financial Information
For the three and six months
ended June 30, 2020 and 2019
(In millions, except per share
and share amounts)
CONSOLIDATED STATEMENT OF
OPERATIONS
Three Months Ended
June 30,
Six Months Ended
June 30,
2020
2019
2020
2019
Net sales
$
328.3
$
504.7
$
657.5
$
922.7
Cost of sales
279.9
409.5
545.9
747.3
Gross profit
48.4
95.2
111.6
175.4
Operating costs and expenses:
Engineering, selling and administrative
expenses
49.7
50.5
105.6
109.9
Amortization of intangible assets
0.1
0.1
0.2
0.2
Restructuring expense
0.2
2.7
1.7
7.2
Total operating costs and expenses
50.0
53.3
107.5
117.3
Operating income (loss)
(1.6
)
41.9
4.1
58.1
Other income (expense):
Interest expense
(7.2
)
(7.5
)
(14.4
)
(18.4
)
Amortization of deferred financing
fees
(0.3
)
(0.4
)
(0.7
)
(0.8
)
Loss on debt extinguishment
—
—
—
(25.0
)
Other income (expense) - net
(2.9
)
15.9
(6.9
)
12.6
Total other income (expense)
(10.4
)
8.0
(22.0
)
(31.6
)
Income (loss) before income taxes
(12.0
)
49.9
(17.9
)
26.5
Provision for income taxes
0.7
3.9
2.6
7.2
Net income (loss)
$
(12.7
)
$
46.0
$
(20.5
)
$
19.3
Per Share Data
Basic income (loss) per common share
$
(0.37
)
$
1.29
$
(0.59
)
$
0.54
Diluted income (loss) per common share
$
(0.37
)
$
1.29
$
(0.59
)
$
0.54
Weighted average shares outstanding -
basic
34,519,889
35,595,718
34,827,582
35,619,145
Weighted average shares outstanding -
diluted
34,519,889
35,725,908
34,827,582
35,799,089
THE MANITOWOC COMPANY,
INC.
Unaudited Consolidated
Financial Information
As of June 30, 2020 and December
31, 2019
(In millions, except share
amounts)
CONSOLIDATED BALANCE SHEETS
June 30, 2020
December 31, 2019
Assets
Current Assets:
Cash and cash equivalents
$
128.3
$
199.3
Accounts receivable, less allowances of
$9.4 and $7.9, respectively
171.9
168.3
Inventories — net
534.5
461.4
Notes receivable — net
14.0
17.4
Other current assets
33.0
26.0
Total current assets
881.7
872.4
Property, plant and equipment — net
277.8
289.9
Operating lease right-of-use assets
42.8
47.6
Goodwill
232.0
232.5
Other intangible assets — net
115.9
116.3
Other non-current assets
54.7
59.0
Total assets
$
1,604.9
$
1,617.7
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable and accrued expenses
$
332.6
$
340.8
Short-term borrowings and current portion
of long-term debt
4.3
3.8
Product warranties
45.8
47.2
Customer advances
15.8
25.8
Other liabilities
22.2
23.3
Total current liabilities
420.7
440.9
Non-Current Liabilities:
Long-term debt
356.9
308.4
Operating lease liabilities
33.3
37.6
Deferred income taxes
4.3
5.5
Pension obligations
83.7
86.4
Postretirement health and other benefit
obligations
15.6
16.4
Long-term deferred revenue
27.4
30.3
Other non-current liabilities
47.3
46.3
Total non-current liabilities
568.5
530.9
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, 34,521,063 and 35,374,537
shares outstanding, respectively)
0.4
0.4
Additional paid-in capital
596.0
592.2
Accumulated other comprehensive loss
(124.1
)
(121.0
)
Retained earnings
215.5
236.2
Treasury stock, at cost (6,272,920 and
5,419,446 shares, respectively)
(72.1
)
(61.9
)
Total stockholders' equity
615.7
645.9
Total liabilities and stockholders'
equity
$
1,604.9
$
1,617.7
THE MANITOWOC COMPANY,
INC.
Unaudited Consolidated
Financial Information
For the three and six months
ended June 30, 2020 and 2019
(In millions)
CONSOLIDATED STATEMENT OF CASH
FLOWS
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Cash Flows from Operating
Activities:
Net income (loss)
$
(12.7
)
$
46.0
$
(20.5
)
$
19.3
Adjustments to reconcile net income (loss)
to cash provided by (used for) operating activities:
Depreciation
9.1
8.6
18.1
17.4
Amortization of intangible assets
0.1
0.1
0.2
0.2
Amortization of deferred financing
fees
0.3
0.4
0.7
0.8
Loss on debt extinguishment
—
—
—
25.0
(Gain) loss on sale of property, plant and
equipment
0.1
(0.4
)
—
—
Other
2.5
2.3
5.9
6.0
Changes in operating assets and
liabilities
Accounts receivable
(0.8
)
(26.9
)
(6.4
)
(222.6
)
Inventories
15.1
(12.0
)
(73.4
)
(106.5
)
Notes receivable
3.0
(2.3
)
5.6
(2.3
)
Other assets
(4.8
)
12.0
(6.4
)
26.1
Accounts payable
(34.6
)
(4.5
)
(6.5
)
22.1
Accrued expenses and other liabilities
2.5
8.6
(16.0
)
(20.9
)
Net cash provided by (used for) operating
activities
(20.2
)
31.9
(98.7
)
(235.4
)
Cash Flows from Investing
Activities:
Capital expenditures
(4.4
)
(5.3
)
(8.0
)
(9.7
)
Proceeds from fixed assets
—
—
0.1
4.8
Cash receipts on sold accounts
receivable
—
—
—
126.3
Net cash provided by (used for) investing
activities
(4.4
)
(5.3
)
(7.9
)
121.4
Cash Flows from Financing
Activities:
Proceeds from revolving credit
facility
50.0
24.8
50.0
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
(1.0
)
3.1
(1.5
)
1.9
Debt issuance costs
—
(2.6
)
—
(8.2
)
Exercise of stock options
—
—
0.1
0.1
Common stock repurchases
—
(7.4
)
(12.0
)
(7.4
)
Net cash provided by (used for) financing
activities
49.0
(39.9
)
36.6
9.8
Effect of exchange rate changes on cash
and cash equivalents
0.3
(0.7
)
(1.0
)
(1.1
)
Net increase (decrease) in cash and cash
equivalents
$
24.7
$
(14.0
)
$
(71.0
)
$
(105.3
)
Non-GAAP Financial Measures
Non-GAAP Items
Adjusted net income (loss), adjusted EBITDA, adjusted operating
income (loss), 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
(Loss) to Net Income (Loss)
(in millions, except per share
amounts)
Three Months Ended
June 30,
2020
2019
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit
$
48.4
$
—
$
48.4
$
95.2
$
—
$
95.2
Engineering, selling and administrative
expenses
(49.7
)
—
(49.7
)
(50.5
)
—
(50.5
)
Amortization of intangible assets
(0.1
)
—
(0.1
)
(0.1
)
—
(0.1
)
Restructuring expense (1)
(0.2
)
0.2
—
(2.7
)
2.7
—
Operating income (loss)
(1.6
)
0.2
(1.4
)
41.9
2.7
44.6
Interest expense
(7.2
)
—
(7.2
)
(7.5
)
—
(7.5
)
Amortization of deferred financing
fees
(0.3
)
—
(0.3
)
(0.4
)
—
(0.4
)
Other income (expense) - net (2)
(2.9
)
—
(2.9
)
15.9
(15.5
)
0.4
Income (loss) before income
taxes
(12.0
)
0.2
(11.8
)
49.9
(12.8
)
37.1
(Provision) benefit for income taxes
(3)
(0.7
)
(3.7
)
(4.4
)
(3.9
)
0.3
(3.6
)
Net income (loss)
$
(12.7
)
$
(3.5
)
$
(16.2
)
$
46.0
$
(12.5
)
$
33.5
Diluted net income (loss) per share
$
(0.37
)
$
(0.47
)
$
1.29
$
0.94
(1)
The adjustments in 2020 and 2019 represent
the add back of restructuring related charges.
(2)
The adjustment in 2019 represents the
removal of a gain associated with the settlement of a legal
matter.
(3)
The adjustments in 2020 represent the net
income tax impacts of item (1) and the removal of an income tax
benefit related to the Coronavirus Aid, Relief and Economic
Security Act (“CARES Act”). The adjustments in 2019 represent the
net income tax impact of items (1) and (2).
Six Months Ended June
30,
2020
2019
As reported
Adjustments
Adjusted
As reported
Adjustments
Adjusted
Gross profit
$
111.6
$
—
$
111.6
$
175.4
$
—
$
175.4
Engineering, selling and administrative
expenses
(105.6
)
—
(105.6
)
(109.9
)
—
(109.9
)
Amortization of intangible assets
(0.2
)
—
(0.2
)
(0.2
)
—
(0.2
)
Restructuring expense (1)
(1.7
)
1.7
—
(7.2
)
7.2
—
Operating income
4.1
1.7
5.8
58.1
7.2
65.3
Interest expense
(14.4
)
—
(14.4
)
(18.4
)
—
(18.4
)
Amortization of deferred financing
fees
(0.7
)
—
(0.7
)
(0.8
)
—
(0.8
)
Loss on debt extinguishment (2)
—
—
—
(25.0
)
25.0
—
Other income (expense) - net (3)
(6.9
)
—
(6.9
)
12.6
(15.5
)
(2.9
)
Income (loss) before income
taxes
(17.9
)
1.7
(16.2
)
26.5
16.7
43.2
(Provision) benefit for income taxes
(4)
(2.6
)
(3.7
)
(6.3
)
(7.2
)
0.4
(6.8
)
Net income (loss)
$
(20.5
)
$
(2.0
)
$
(22.5
)
$
19.3
$
17.1
$
36.4
Diluted income (loss) per share
$
(0.59
)
$
(0.65
)
$
0.54
$
1.02
(1)
The adjustments in 2020 and 2019 represent
the add back of restructuring related charges.
(2)
The adjustment in 2019 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.
(3)
The adjustment in 2019 represents the
removal of a gain associated with the settlement of a legal
matter.
(4)
The adjustments in 2020 represent the net
income tax impacts of item (1) and the removal of an income tax
benefit related to the CARES Act. The adjustments in 2019 represent
the net income tax impact of items (1) through (3).
Adjusted Operating Cash Flows and Free
Cash Flows
(In millions)
Three Months Ended
June 30,
Six Months Ended
June 30,
2020
2019
2020
2019
Net cash provided by (used for) operating
activities
$
(20.2
)
$
31.9
$
(98.7
)
$
(235.4
)
Cash receipts on sold accounts
receivable
—
—
—
126.3
Net payments on accounts receivable
securitization program
—
—
—
75.0
Adjusted operating cash flows
(20.2
)
31.9
(98.7
)
(34.1
)
Capital expenditures
(4.4
)
(5.3
)
(8.0
)
(9.7
)
Free cash flows
$
(24.6
)
$
26.6
$
(106.7
)
$
(43.8
)
Adjusted EBITDA and Adjusted Operating Income (Loss)
The Company defines adjusted EBITDA as earnings before interest,
income taxes, depreciation and amortization, plus an addback of
certain restructuring and other charges. The reconciliation of net
income (loss) to adjusted EBITDA and operating income (loss) to
adjusted operating income (loss) for the three and six months ended
June 30, 2020 and 2019 and trailing twelve months, is as follows.
All dollar amounts are in millions of dollars:
Three Months Ended
June 30,
Six Months Ended
June 30,
Trailing Twelve
2020
2019
2020
2019
Months
Net income (loss)
$
(12.7
)
$
46.0
$
(20.5
)
$
19.3
$
6.8
Interest expense and amortization of
deferred financing fees
7.5
7.9
15.1
19.2
30.1
Provision for income taxes
0.7
3.9
2.6
7.2
7.8
Depreciation expense
9.1
8.6
18.1
17.4
35.7
Amortization of intangible assets
0.1
0.1
0.2
0.2
0.3
EBITDA
4.7
66.5
15.5
63.3
80.7
Restructuring expense
0.2
2.7
1.7
7.2
4.3
Loss on debt extinguishment
—
—
—
25.0
—
Other non-recurring charges (1)
—
—
—
—
3.1
Other (income) expense - net (2)
2.9
(15.9
)
6.9
(12.6
)
9.7
Adjusted EBITDA
7.8
53.3
24.1
82.9
97.8
Depreciation expense
(9.1
)
(8.6
)
(18.1
)
(17.4
)
(35.7
)
Amortization of intangible assets
(0.1
)
(0.1
)
(0.2
)
(0.2
)
(0.3
)
Adjusted operating income (loss)
(1.4
)
44.6
5.8
65.3
61.8
Restructuring expense
(0.2
)
(2.7
)
(1.7
)
(7.2
)
(4.3
)
Other non-recurring charges
—
—
—
—
(3.1
)
Operating income (loss)
$
(1.6
)
$
41.9
$
4.1
$
58.1
$
54.4
Adjusted EBITDA margin percentage
2.4
%
10.6
%
3.7
%
9.0
%
6.2
%
Adjusted operating income (loss) margin
percentage
(0.4
)%
8.8
%
0.9
%
7.1
%
3.9
%
(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 and other
charges included in engineering, selling and administrative
expenses in the third and fourth quarter 2019.
(2)
Other (income) expense - net includes the
settlement of a legal matter in 2019, along with net foreign
currency gains (losses), other components of net periodic pension
costs and other miscellaneous items recorded in 2020 and 2019.
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Ion Warner VP, Marketing and Investor Relations +1
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Manitowoc (NYSE:MTW)
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Manitowoc (NYSE:MTW)
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