First-Quarter 2023 Highlights
- Net sales of $508.3 million, up 10.7% year-over-year
- Diluted net income per share of $0.46, up $0.37 year-over-year
- Adjusted EBITDA(1) of $45.1 million, margin percentage of 8.9%
- Non-new machine sales of $151.0 million, up 16.7% year-over-year
The Manitowoc Company, Inc. today reported a net income of $16.5 million, or $0.46 per diluted share.
Net sales increased 10.7% year-over-year to $ 508.3 million and were unfavorably impacted by $11.2 million from changes in foreign currency exchange rates. Adjusted EBITDA(1) was $45.1 million, an increase of $13.9 million or 44.6% from the prior year.
Orders were $524.8 million, a 9% increase from the prior year. Orders were unfavorably impacted by $8.5 million from changes in foreign currency exchange rates. The backlog increased $19.7 million to $1,075.7 million as of March 31, 2023, from $1,056.0 million as of December 31, 2022.
Net cash provided by operating activities was $15.4 million and free cash flows(1) were $4.8 million, an increase of $9.8 million and $7.9 million, respectively, from the prior year.
“Manitowoc delivered a solid first quarter, generating $508.3 million in revenue and $45.1 million of adjusted EBITDA. I am very proud of our team who demonstrated great resolve to overcome continuing supply chain, labor, and logistics challenges in the quarter. During the quarter, we continued to make meaningful progress on our CRANES+50 strategy by growing non-new machine sales by 16.7% year-over-year,” commented Aaron H. Ravenscroft, President and Chief Executive Officer of The Manitowoc Company, Inc.
“Given our backlog and first-quarter results, we feel confident about our guidance. Looking out, however, we can see a slowdown in the European tower crane business and are cautious regarding the impact higher interest rates could eventually have on demand. While we continue to manage through the challenging environment, we remain committed to our CRANES+50 strategy to reduce cyclicality and improve profitability,” added Ravenscroft.
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THE MANITOWOC COMPANY, INC. |
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|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
|
(In millions, except per share and share amounts) |
||||||||
|
|
|
Three Months Ended |
|
|||||
|
|
|
2023 |
|
|
2022 |
|
||
|
Net sales |
|
$ |
508.3 |
|
|
$ |
459.0 |
|
|
Cost of sales |
|
|
402.0 |
|
|
|
374.0 |
|
|
Gross profit |
|
|
106.3 |
|
|
|
85.0 |
|
|
Operating costs and expenses: |
|
|
|
|
|
|
||
|
Engineering, selling, and administrative expenses |
|
|
75.1 |
|
|
|
66.5 |
|
|
Amortization of intangible assets |
|
|
1.0 |
|
|
|
0.8 |
|
|
Restructuring expense |
|
|
— |
|
|
|
0.1 |
|
|
Total operating costs and expenses |
|
|
76.1 |
|
|
|
67.4 |
|
|
Operating income |
|
|
30.2 |
|
|
|
17.6 |
|
|
Other expense: |
|
|
|
|
|
|
||
|
Interest expense |
|
|
(8.1 |
) |
|
|
(7.4 |
) |
|
Amortization of deferred financing fees |
|
|
(0.3 |
) |
|
|
(0.4 |
) |
|
Other expense – net |
|
|
(1.1 |
) |
|
|
(0.2 |
) |
|
Total other expense |
|
|
(9.5 |
) |
|
|
(8.0 |
) |
|
Income before income taxes |
|
|
20.7 |
|
|
|
9.6 |
|
|
Provision for income taxes |
|
|
4.2 |
|
|
|
6.5 |
|
|
Net income |
|
$ |
16.5 |
|
|
$ |
3.1 |
|
|
|
|
|
|
|
|
|
||
|
Per Share Data and Share Amounts |
|
|
|
|
|
|
||
|
Basic net income per common share |
|
$ |
0.47 |
|
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
||
|
Diluted net income per common share |
|
$ |
0.46 |
|
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
||
|
Weighted average shares outstanding – basic |
|
|
35,121,473 |
|
|
|
35,131,889 |
|
|
Weighted average shares outstanding – diluted |
|
|
35,748,021 |
|
|
|
35,565,935 |
|
|
THE MANITOWOC COMPANY, INC. |
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|
CONDENSED CONSOLIDATED BALANCE SHEETS |
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|
(In millions, except par value and share amounts) |
||||||||
|
|
|
|
|
|
|
|
||
|
|
|
March 31, |
|
|
December 31, |
|
||
|
Assets |
|
|
|
|
|
|
||
|
Current Assets: |
|
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
56.5 |
|
|
$ |
64.4 |
|
|
Accounts receivable, less allowances of $5.4 and $5.3, respectively |
|
|
250.6 |
|
|
|
266.3 |
|
|
Inventories |
|
|
720.6 |
|
|
|
611.9 |
|
|
Notes receivable — net |
|
|
9.4 |
|
|
|
10.6 |
|
|
Other current assets |
|
|
42.3 |
|
|
|
45.3 |
|
|
Total current assets |
|
|
1,079.4 |
|
|
|
998.5 |
|
|
Property, plant, and equipment — net |
|
|
331.6 |
|
|
|
335.3 |
|
|
Operating lease right-of-use assets |
|
|
43.0 |
|
|
|
45.2 |
|
|
Goodwill |
|
|
79.9 |
|
|
|
80.1 |
|
|
Intangible assets — net |
|
|
126.6 |
|
|
|
126.7 |
|
|
Other long-term assets |
|
|
30.6 |
|
|
|
29.7 |
|
|
Total assets |
|
$ |
1,691.1 |
|
|
$ |
1,615.5 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
|
Current Liabilities: |
|
|
|
|
|
|
||
|
Accounts payable and accrued expenses |
|
$ |
518.1 |
|
|
$ |
446.4 |
|
|
Customer advances |
|
|
24.0 |
|
|
|
21.9 |
|
|
Short-term borrowings and the current portion of long-term debt |
|
|
7.9 |
|
|
|
6.1 |
|
|
Product warranties |
|
|
46.5 |
|
|
|
48.8 |
|
|
Other liabilities |
|
|
21.1 |
|
|
|
24.6 |
|
|
Total current liabilities |
|
|
617.6 |
|
|
|
547.8 |
|
|
Non-Current Liabilities: |
|
|
|
|
|
|
||
|
Long-term debt |
|
|
369.5 |
|
|
|
379.5 |
|
|
Operating lease liabilities |
|
|
32.8 |
|
|
|
34.3 |
|
|
Deferred income taxes |
|
|
4.9 |
|
|
|
4.9 |
|
|
Pension obligations |
|
|
53.5 |
|
|
|
51.7 |
|
|
Postretirement health and other benefit obligations |
|
|
8.0 |
|
|
|
8.2 |
|
|
Long-term deferred revenue |
|
|
14.7 |
|
|
|
15.6 |
|
|
Other non-current liabilities |
|
|
37.3 |
|
|
|
35.7 |
|
|
Total non-current liabilities |
|
|
520.7 |
|
|
|
529.9 |
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
||
|
Preferred stock (3,500,000 shares authorized of $.01 par value; |
|
|
— |
|
|
|
— |
|
|
Common stock (75,000,000 shares authorized, 40,793,983 shares issued, 35,142,881 |
|
|
0.4 |
|
|
|
0.4 |
|
|
Additional paid-in capital |
|
|
605.8 |
|
|
|
606.7 |
|
|
Accumulated other comprehensive loss |
|
|
(108.0 |
) |
|
|
(107.9 |
) |
|
Retained earnings |
|
|
120.8 |
|
|
|
104.3 |
|
|
Treasury stock, at cost (5,651,102 and 5,708,975 shares, respectively) |
|
|
(66.2 |
) |
|
|
(65.7 |
) |
|
Total stockholders’ equity |
|
|
552.8 |
|
|
|
537.8 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
1,691.1 |
|
|
$ |
1,615.5 |
|
|
THE MANITOWOC COMPANY, INC. |
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|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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|
(In millions) |
||||||||
|
|
|
|
|
|||||
|
|
|
Three Months Ended |
|
|||||
|
|
|
2023 |
|
|
2022 |
|
||
|
Cash Flows from Operating Activities: |
|
|
|
|
|
|
||
|
Net income |
|
$ |
16.5 |
|
|
$ |
3.1 |
|
|
Adjustments to reconcile net income to cash provided by operating activities: |
|
|
|
|
|
|
||
|
Depreciation |
|
|
13.9 |
|
|
|
16.1 |
|
|
Amortization of intangible assets |
|
|
1.0 |
|
|
|
0.8 |
|
|
Stock-based compensation expense |
|
|
3.1 |
|
|
|
3.1 |
|
|
Amortization of deferred financing fees |
|
|
0.3 |
|
|
|
0.4 |
|
|
Net unrealized foreign currency transaction losses (gains) |
|
|
(1.6 |
) |
|
|
1.4 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
|
Accounts receivable |
|
|
17.1 |
|
|
|
(7.7 |
) |
|
Inventories |
|
|
(100.6 |
) |
|
|
(69.4 |
) |
|
Notes receivable |
|
|
1.7 |
|
|
|
3.0 |
|
|
Other assets |
|
|
3.2 |
|
|
|
0.4 |
|
|
Accounts payable |
|
|
56.2 |
|
|
|
54.6 |
|
|
Accrued expenses and other liabilities |
|
|
4.6 |
|
|
|
(0.2 |
) |
|
Net cash provided by operating activities |
|
|
15.4 |
|
|
|
5.6 |
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
||
|
Capital expenditures |
|
|
(10.6 |
) |
|
|
(8.7 |
) |
|
Proceeds from the sale of fixed assets |
|
|
2.0 |
|
|
|
— |
|
|
Net cash used for investing activities |
|
|
(8.6 |
) |
|
|
(8.7 |
) |
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
||
|
Payments on revolving credit facility – net |
|
|
(10.0 |
) |
|
|
(20.0 |
) |
|
Other debt – net |
|
|
(1.9 |
) |
|
|
(0.8 |
) |
|
Exercises of stock options |
|
|
0.3 |
|
|
|
0.1 |
|
|
Common stock repurchases |
|
|
(3.5 |
) |
|
|
— |
|
|
Net cash used for financing activities |
|
|
(15.1 |
) |
|
|
(20.7 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
0.4 |
|
|
|
— |
|
|
Net decrease in cash and cash equivalents |
|
|
(7.9 |
) |
|
|
(23.8 |
) |
|
Cash and cash equivalents at the beginning of the period |
|
|
64.4 |
|
|
|
75.4 |
|
|
Cash and cash equivalents at the end of the period |
|
$ |
56.5 |
|
|
$ |
51.6 |
|
Non-GAAP Financial Measures
Adjusted net income, Adjusted DEPS, EBITDA, adjusted EBITDA, 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 add-back 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, 2023, and 2022 are summarized as follows. All dollar amounts are in millions, except per share data and share amounts.
|
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|
|
|
|
|
|
|
|
|
|
|
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|
|
Three Months Ended |
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|
|
2023 |
|
|
2022 |
|
||||||||||||||||||
|
|
|
As reported |
|
|
Adjustments |
|
|
Adjusted |
|
|
As reported |
|
|
Adjustments |
|
|
Adjusted |
|
||||||
|
Gross profit (1) |
|
$ |
106.3 |
|
|
$ |
— |
|
|
$ |
106.3 |
|
|
$ |
85.0 |
|
|
$ |
1.2 |
|
|
$ |
86.2 |
|
|
Engineering, selling, and administrative |
|
|
(75.1 |
) |
|
|
— |
|
|
|
(75.1 |
) |
|
|
(66.5 |
) |
|
|
(4.6 |
) |
|
|
(71.1 |
) |
|
Amortization of intangible assets |
|
|
(1.0 |
) |
|
|
— |
|
|
|
(1.0 |
) |
|
|
(0.8 |
) |
|
|
— |
|
|
|
(0.8 |
) |
|
Restructuring expense (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
0.1 |
|
|
|
— |
|
|
Operating income |
|
|
30.2 |
|
|
|
— |
|
|
|
30.2 |
|
|
|
17.6 |
|
|
|
(3.3 |
) |
|
|
14.3 |
|
|
Interest expense |
|
|
(8.1 |
) |
|
|
— |
|
|
|
(8.1 |
) |
|
|
(7.4 |
) |
|
|
— |
|
|
|
(7.4 |
) |
|
Amortization of deferred financing fees |
|
|
(0.3 |
) |
|
|
— |
|
|
|
(0.3 |
) |
|
|
(0.4 |
) |
|
|
— |
|
|
|
(0.4 |
) |
|
Other expense – net |
|
|
(1.1 |
) |
|
|
— |
|
|
|
(1.1 |
) |
|
|
(0.2 |
) |
|
|
— |
|
|
|
(0.2 |
) |
|
Income before income taxes |
|
|
20.7 |
|
|
|
— |
|
|
|
20.7 |
|
|
|
9.6 |
|
|
|
(3.3 |
) |
|
|
6.3 |
|
|
Provision for income taxes (4) |
|
|
(4.2 |
) |
|
|
— |
|
|
|
(4.2 |
) |
|
|
(6.5 |
) |
|
|
1.2 |
|
|
|
(5.3 |
) |
|
Net income |
|
$ |
16.5 |
|
|
$ |
— |
|
|
$ |
16.5 |
|
|
$ |
3.1 |
|
|
$ |
(2.1 |
) |
|
$ |
1.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Diluted weighted average common shares outstanding |
|
|
35,748,021 |
|
|
|
|
|
|
35,748,021 |
|
|
|
35,565,935 |
|
|
|
|
|
|
35,565,935 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Diluted net income per share |
|
$ |
0.46 |
|
|
|
|
|
$ |
0.46 |
|
|
$ |
0.09 |
|
|
|
|
|
$ |
0.03 |
|
||
|
(1) |
The adjustment in 2022 represents $0.9 million of fair value step-up on rental fleet assets sold during the period that were expensed within the cost of sales and $0.3 million of other one-time costs associated with the acquired businesses. |
|
(2) |
The adjustment in 2022 represents $0.2 million of one-time legal costs associated with the acquired businesses and $4.8 million of income from the partial recovery of the previously written-off long-term note receivable from the 2014 divestiture of the Company’s Chinese joint venture. |
|
(3) |
Represents adjustments for restructuring expenses. |
|
(4) |
The adjustment in 2022 represents the net income tax impacts of items (1), (2), and (3). |
Free Cash Flows
The Company defines free cash flows as net cash provided by operating activities less cash outflow from investment in capital expenditures. The reconciliation of net cash provided by operating activities to free cash flows for the three months ended March 31, 2023 and 2022 are summarized as follows. All dollar amounts are in millions.
|
|
|
|
|
|
|
|
||
|
|
|
Three Months Ended |
|
|||||
|
|
|
2023 |
|
|
2022 |
|
||
|
Net cash provided by operating activities |
|
$ |
15.4 |
|
|
$ |
5.6 |
|
|
Capital expenditures |
|
|
(10.6 |
) |
|
|
(8.7 |
) |
|
Free cash flows |
|
$ |
4.8 |
|
|
$ |
(3.1 |
) |
EBITDA and Adjusted EBITDA
The Company defines EBITDA as net income (loss) before interest, taxes, depreciation, and amortization. The Company defines adjusted EBITDA as EBITDA plus the addback or subtraction of restructuring, other income (expense), and certain other non-recurring items – net. The reconciliation of net income (loss) to EBITDA, and further to adjusted EBITDA for the three months ended March 31, 2023, and 2022 and trailing twelve months are summarized as follows. All dollar amounts are in millions.
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
|
Trailing Twelve |
|
||||||
|
|
2023 |
|
|
2022 |
|
|
Months |
|
|||
|
Net income (loss) |
$ |
16.5 |
|
|
$ |
3.1 |
|
|
$ |
(110.2 |
) |
|
Interest expense and amortization of deferred |
|
8.4 |
|
|
|
7.8 |
|
|
|
33.6 |
|
|
Provision for income taxes |
|
4.2 |
|
|
|
6.5 |
|
|
|
1.1 |
|
|
Depreciation expense |
|
13.9 |
|
|
|
16.1 |
|
|
|
58.4 |
|
|
Amortization of intangible assets |
|
1.0 |
|
|
|
0.8 |
|
|
|
3.3 |
|
|
EBITDA |
|
44.0 |
|
|
|
34.3 |
|
|
|
(13.8 |
) |
|
Restructuring expense |
|
— |
|
|
|
0.1 |
|
|
|
1.4 |
|
|
Asset impairment expense (1) |
|
— |
|
|
|
— |
|
|
|
171.9 |
|
|
Other non-recurring items – net (2) |
|
— |
|
|
|
(3.4 |
) |
|
|
2.4 |
|
|
Other (income) expense – net (3) |
|
1.1 |
|
|
|
0.2 |
|
|
|
(4.9 |
) |
|
Adjusted EBITDA |
$ |
45.1 |
|
|
$ |
31.2 |
|
|
$ |
157.0 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Adjusted EBITDA margin percentage |
|
8.9 |
% |
|
|
6.8 |
% |
|
|
7.5 |
% |
|
(1) |
The adjustment for the trailing twelve months represents non-cash goodwill and indefinite-lived intangible asset impairment charges. |
|
(2) |
Other non-recurring items – net for the three months ended March 31, 2022, primarily related to $4.8 million of income from the partial recovery of the previously written-off long-term note receivable from the 2014 divestiture of the Company’s Chinese joint venture, partially offset by $0.9 million of fair value step up on rental fleet assets sold during the period that was expensed within the cost of sales, and $0.5 million of other one-time costs associated with the acquired businesses. Other non-recurring items – net for the trailing twelve months relate to $2.1 million of fair value step-up on rental fleet assets sold during the period that was expensed within the cost of sales, $0.1 million of other one-time costs associated with the acquired businesses, and $0.2 million of other one-time charges. |
|
(3) |
Other expense – net includes net foreign currency (gains) losses, other components of net periodic pension costs, and other items in the three months ended March 31, 2023, and 2022. Other income – net for the trailing twelve months includes net foreign currency gains, other components of net periodic pension costs, a $0.5 million write-off of other debt-related charges, and other items. |
