Fourth-Quarter 2018
Highlights
- Q4 orders of $485.7 million and revenue of $515.3
million
- Adjusted EBITDA of $31.1 million
- Diluted earnings per share from continuing operations of
$(2.20) which includes a non-cash goodwill impairment charge of
$(2.31), $0.16 on an adjusted basis
Full-Year 2018
Highlights
- Full-year orders of $1,910.7 million and revenue of $1,846.8
million
- Adjusted EBITDA of $116.2 million
- Diluted earnings per share from continuing operations of
$(1.88), $0.64 on an adjusted basis
- Non-GAAP adjusted operating cash flow of $40.1
million
The Manitowoc Company, Inc. (NYSE: MTW), a leading global
manufacturer of cranes and lifting solutions, today reported
fourth-quarter diluted earnings per share (“DEPS”) on a GAAP basis
of $(2.20) and $0.16 on an adjusted basis.
Fourth-quarter orders of $485.7 million decreased 22% from the
comparable period in 2017. Backlog totaled $670.6 million at
December 31, 2018, an increase of 11%, from the prior year
ending backlog of $606.6 million.
Fourth-quarter 2018 net sales were $515.3 million versus $481.5
million in the comparable period in 2017. The year-over-year
revenue increase was primarily attributable to improved demand in
the Americas, driven by higher shipments of cranes for the
commercial construction and energy end markets. This was partially
offset by lower demand in the Benelux and Middle-East regions,
coupled with unfavorable changes in foreign currency exchange
rates.
The Company reported non-GAAP adjusted net income from
continuing operations(1) of $5.8 million, or $0.16 per diluted
share in the fourth-quarter versus a loss of $(5.3) million, or
$(0.15) per diluted share in 2017. On a GAAP basis, the
fourth-quarter net loss from operations was $(78.3) million, or
$(2.20) per diluted share, which includes a non-cash goodwill
impairment charge of $82.2 million, or $(2.31) per share. Non-GAAP
adjusted EBITDA(1) for the fourth-quarter 2018 was $31.1 million
compared to $23.7 last year, a $7.4 million or 31% improvement.
Full-year 2018 orders totaled $1,910.7 million, a 3% increase
year-over-year. Full-year revenue increased $265.5 million, or 17%,
year-over-year to $1,846.8 million. Adjusted EBITDA was $116.2
million, and 6.3% of net sales. This represents an improvement of
157-basis points over the prior year. Non-GAAP adjusted operating
cash flow(1) was $40.1 million for the full-year, and non-GAAP
DEPS(1) increased $0.91 during 2018, to $0.64.
“The Manitowoc team again delivered excellent results in the
fourth quarter, marking the seventh consecutive quarter of
year-over-year adjusted EBITDA percentage improvement,” commented
Barry L. Pennypacker, President and Chief Executive Officer of The
Manitowoc Company, Inc. “For the year we delivered a double-digit
increase in sales, a 157-basis point improvement in adjusted EBITDA
margin, while increasing our cash by nearly 20% in a challenging
market. Our strategy is driving continued, measurable improvement
in our performance. While we encountered significant headwinds and
tough comparables during 2018, the team successfully rose to the
challenge and I am extremely proud of the results,” said
Pennypacker.
“Our results and outlook demonstrate how our strategic
priorities are delivering ever-improving results. We will continue
to provide our customers with the type of cranes they need to
increase their return on invested capital. This will be evident
with our new product introductions at the bauma trade show in April
2019. By continuing to focus on the fundamental principles of The
Manitowoc Way, we are well positioned to deliver strong results in
2019 and beyond,” concluded Pennypacker.
Full-Year 2019 Guidance
• Revenue – Approximately $1.85 billion to $1.95 billion;
• Adjusted EBITDA – Approximately $125 million to $145
million;
• Depreciation - Approximately $37 million to $39 million;
• Restructuring expense - Approximately $12 million to $15
million;
• Interest expense - Approximately $28 million to $32 million,
excluding debt refinancing costs;
• Income tax expense - Approximately $12 million to $16 million,
excluding discrete items, and;
• Capital expenditures - Approximately $35 million.
The Company provides guidance on a non-GAAP basis as there is
uncertainty in the timing and magnitude of future charges that
would be included in the reported GAAP results.
Investor Conference Call
On Friday, February 8th, 2019, at 10:00 a.m. ET (9:00 a.m. CT),
The Manitowoc Company’s senior management will discuss its
fourth-quarter 2018 earnings results and full-year 2019 outlook
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.
Founded in 1902, The Manitowoc Company, Inc. is a leading global
manufacturer of cranes and lifting solutions with manufacturing,
distribution, and service facilities in 20 countries. Manitowoc is
recognized as one of the premier innovators and providers of
crawler cranes, tower cranes, and mobile cranes for the heavy
construction industry, which are complemented by a slate of
industry-leading aftermarket product support services. In 2018,
Manitowoc’s net sales totaled $1.8 billion, with over half
generated outside the United States.
Footnote
(1) Non-GAAP adjusted net income (loss) from continuing
operations, 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 growth or contraction;
• changes in raw material and commodity prices;
• 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;
• uncertainties associated with new product introductions, the
successful development and market acceptance of new and innovative
products that drive growth; and
• risks and factors detailed in Manitowoc's 2017 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, 2017.
THE MANITOWOC COMPANY, INC.
Unaudited Consolidated Financial
Information
For the three and twelve months ended December 31, 2018 and 2017 ($
in millions, except share data)
CONDENSED STATEMENT OF
OPERATIONS
Three months ended
Year ended December 31, December 31,
2018 2017 2018
2017 Net sales $ 515.3 $ 481.5 $ 1,846.8 $
1,581.3 Cost of sales 426.1 400.3
1,518.7 1,299.4 Gross profit
89.2 81.2 328.1 281.9
Operating costs and expenses: Engineering, selling and
administrative expenses 67.0 66.5 251.6 245.3 Asset impairment
expense 82.2 0.1 82.6 0.1 Amortization of intangible assets 0.1 0.1
0.3 0.8 Restructuring expense 1.9 5.9 12.9 27.2 Other operating
expense - net — 0.1 —
0.1 Total operating costs and expenses 151.2
72.7 347.4 273.5
Operating income (loss) (62.0 ) 8.5 (19.3 ) 8.4 Other expense:
Interest expense (9.8 ) (9.8 ) (39.1 ) (39.2 ) Amortization of
deferred financing fees (0.4 ) (0.5 ) (1.8 ) (1.9 ) Other expense -
net (2.9 ) (2.8 ) (11.5 ) (6.8 ) Total
other expense (13.1 ) (13.1 ) (52.4 )
(47.9 ) Loss from continuing operations before income taxes (75.1 )
(4.6 ) (71.7 ) (39.5 ) Provision (benefit) for income taxes
3.2 (40.2 ) (4.8 ) (49.5 ) Income
(loss) from continuing operations (78.3 ) 35.6 (66.9 ) 10.0
Discontinued operations: Loss from discontinued operations, net of
income taxes — (0.3 ) (0.2 )
(0.6 ) Net income (loss) $ (78.3 ) $ 35.3 $ (67.1 ) $
9.4 BASIC INCOME (LOSS) PER COMMON SHARE: Income
(loss) from continuing operations $ (2.20 ) $ 1.01 $ (1.88 ) $ 0.28
Loss from discontinued operations, net of income taxes —
(0.01 ) (0.01 ) (0.02 ) BASIC INCOME
(LOSS) PER COMMON SHARE $ (2.20 ) $ 1.00 $ (1.89 ) $ 0.26
DILUTED INCOME (LOSS) PER COMMON SHARE: Income (loss)
from continuing operations $ (2.20 ) $ 0.98 $ (1.88 ) $ 0.28 Loss
from discontinued operations, net of income taxes —
(0.01 ) (0.01 ) (0.02 ) DILUTED INCOME (LOSS)
PER COMMON SHARE $ (2.20 ) $ 0.97 $ (1.89 ) $ 0.26
Weighted average shares outstanding - Basic 35,587,023
35,181,685 35,513,162 35,111,594 Weighted average shares
outstanding - Diluted 35,587,023 36,211,371 35,513,162 35,854,902
In the first-quarter of 2018, the Company adopted Accounting
Standards Update (“ASU”) 2017-07 “Compensation-Retirement Benefits
(Topic 715): Improving the Presentation of Net Periodic Pension
Cost and Net Periodic Postretirement Benefit Cost.” Under ASU
2017-07 the service component of pension costs is included in
Engineering, Selling and Administrative expenses while the other
components of pension costs are included in Other Income (Expense)
– Net on the income statement. This ASU was applied retrospectively
by adjusting the prior period financial statements.
MANITOWOC COMPANY, INC. Unaudited Consolidated
Financial Information
As of December 31, 2018 and December 31,
2017
($ in millions)
CONDENSED BALANCE SHEET
December 31, 2018 December 31,
2017 ASSETS Current assets: Cash and cash
equivalents $ 140.3 $ 123.0 Accounts receivable - net 171.8 179.2
Inventories - net 453.1 400.6 Notes receivable - net 19.4 31.1
Other current assets 58.3 56.5 Total current
assets 842.9 790.4 Property, plant and equipment - net 288.9 303.7
Intangible assets - net 350.9 443.4 Other long-term assets
59.2 70.3 TOTAL ASSETS $ 1,541.9 $ 1,607.8
LIABILITIES & STOCKHOLDERS’ EQUITY Current liabilities:
Accounts payable and accrued expenses $ 425.2 $ 375.8 Short-term
borrowings and current portion of long-term debt 6.4 8.2 Product
warranties 39.1 35.5 Customer advances 9.6 12.7 Product liabilities
16.3 20.8 Total current liabilities 496.6
453.0 Non-current liabilities: Long-term debt 266.7 266.7 Other
non-current liabilities 177.3 210.6 Total
non-current liabilities 444.0 477.3 Stockholders’ equity
601.3 677.5 TOTAL LIABILITIES & STOCKHOLDERS’
EQUITY $ 1,541.9 $ 1,607.8
MANITOWOC COMPANY,
INC. Unaudited Consolidated Financial Information
For the twelve months ended December 31,
2018 and 2017
($ in millions)
CONDENSED STATEMENT OF CASH FLOWS
Year Ended December 31, 2018
2017 Cash flows from operating
activities: Net income (loss) $ (67.1 ) $ 9.4 Depreciation 36.1
38.1 Asset impairment expense 82.6 0.1 Other non-cash adjustments -
net (1.0 ) (32.1 ) Accounts receivable (553.4 ) (435.5 )
Inventories (72.7 ) 51.1 Notes receivable 18.6 18.8 Other assets
3.2 4.0 Accounts payable 56.5 27.1 Accrued expenses and other
liabilities (15.6 ) (5.2 ) Net cash used for
operating activities of continuing operations (512.8 ) (324.3 ) Net
cash used for operating activities of discontinued operations
(0.2 ) (0.6 ) Net cash used for operating activities
(513.0 ) (324.9 ) Cash flows from investing
activities: Capital expenditures (31.7 ) (28.9 ) Proceeds from
fixed assets 13.0 7.0 Cash receipts on sold accounts receivable
553.1 402.8 Other — 0.4 Net cash
provided by investing activities of continuing operations 534.4
381.3 Net cash provided by (used for) investing activities of
discontinued operations — — Net cash
provided by investing activities 534.4 381.3
Cash flows from financing activities: Proceeds from
(payments on) long-term debt- net (3.8 ) (10.7 ) Payments on notes
financing - net — (4.7 ) Exercise of stock options 2.5
5.7 Net cash used for financing
activities of continuing operations (1.3 ) (9.7 ) Net cash provided
by (used for) financing activities of discontinued operations
— — Net cash used for financing
activities (1.3 ) (9.7 ) Effect of exchange rate
changes on cash (2.8 ) 2.4 Net increase in
cash, cash equivalents and restricted cash $ 17.3 $ 49.1
In the first-quarter of 2018, the Company adopted ASU No.
2016-15 – “Statement of Cash Flows (Topic 230): Classification of
Certain Cash Receipts and Cash Payments.” Under ASU 2016-15 cash
collections related to the deferred purchase price from the
Company’s accounts receivable securitization program are recorded
as cash flows from investing. Previously, cash collections related
to the deferred purchase price were recorded as cash flows from
operating activities. This ASU was applied retrospectively by
adjusting the prior period financial statements.
Non-GAAP Financial Measures
Non-GAAP Items
Non-GAAP adjusted net income (loss) from continuing operations,
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. 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
from Continuing Operations ($ in millions, except share data)
Three Months Ended
Year Ended December 31, December 31,
2018 2017 2018
2017 Net income (loss) from continuing operations $
(78.3 ) $ 35.6 $ (66.9 ) $ 10.0 Special items, net of income tax:
Asset impairment 82.2 0.1 82.5 0.1 Loss on long-term Dong Yue
receivable — — 2.7 — Restructuring expense 1.9 5.4 12.4 26.5
Pension settlement charge — — 4.5 — Tax valuation allowance and
one-time income tax items — (46.4 )
(12.3 ) (46.4 ) Non-GAAP adjusted net income (loss) from
continuing
operations
$ 5.8 $ (5.3 ) $ 22.9 $ (9.8 ) Diluted
earnings per share (DEPS) from continuing operations $ (2.20 ) $
0.98 $ (1.88 ) $ 0.28 Special items, net of income tax: Asset
impairment 2.31 — 2.32 — Loss on long-term Dong Yue receivable — —
0.08 — Restructuring expense 0.05 0.15 0.35 0.74 Pension settlement
charge — — 0.12 — Tax valuation allowance and one-time tax items
— (1.28 ) (0.35 ) (1.29 )
Diluted non-GAAP adjusted DEPS from continuing operations $ 0.16
$ (0.15 ) $ 0.64 $ (0.27 )
Non-GAAP
Adjusted Operating Cash Flow ($ in millions)
Year Ended December 31, 2018
2017 Net cash used for operating activities: $
(513.0 ) $ (324.9 ) Cash receipts on sold accounts receivable
553.1 402.8 Non-GAAP adjusted operating
cash flow: 40.1 77.9
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
income (loss) from continuing operations to adjusted EBITDA and
non-GAAP adjusted operating income for the current quarter and
year-to-date periods, as well as the comparable periods from the
prior year, is as follows ($ in millions):
Three Months Ended Year
ended December 31, December 31, 2018
2017 2018
2017 Net income (loss) from continuing operations $
(78.3 ) $ 35.6 $ (66.9 ) $ 10.0 Interest expense and amortization
of deferred financing fees 10.2 10.3 40.9 41.1 Provision (benefit)
for income taxes 3.2 (40.2 ) (4.8 ) (49.5 ) Depreciation expense
8.9 9.0 36.1 38.1 Amortization of intangible assets 0.1
0.1 0.3
0.8 EBITDA (55.9 ) 14.8 5.6 40.5 Restructuring
expense 1.9 5.9 12.9 27.2 Asset impairment expense 82.2 0.1 82.6
0.1 Loss on long-term Dong Yue receivable — — 3.6 — Other expense -
net (1) 2.9 2.9 11.5
6.9 Adjusted EBITDA 31.1 23.7 116.2 74.7 Depreciation
expense (8.9 ) (9.0 ) (36.1 ) (38.1 )
Non-GAAP adjusted operating income 22.2 14.7 80.1 36.6
Restructuring expense (1.9 ) (5.9 ) (12.9 ) (27.2 ) Loss on
long-term Dong Yue receivable — — (3.6 ) — Asset impairment expense
(82.2 ) (0.1 ) (82.6 ) (0.1 ) Amortization of intangible assets
(0.1 ) (0.1 ) (0.3 ) (0.8 ) Other operating expense – net —
(0.1 ) — (0.1 ) GAAP operating
income (loss) $ (62.0 ) $ 8.5 $ (19.3 ) $ 8.4
Adjusted EBITDA margin percentage 6.0 % 4.9 % 6.3 % 4.7 % Non-GAAP
adjusted operating income margin percentage 4.3 % 3.1 % 4.3 % 2.3 %
(1) Other expense - net includes foreign currency transaction
(gains) losses and other miscellaneous items.
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Ion WarnerVP, Marketing and Investor RelationsT: +1
414-760-4805
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