UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | Wisconsin | 39-0448110 | | --- | --- | | (State or other jurisdiction | (I.R.S. Employer | | of incorporation or organization) | Identification Number) | ...

The Manitowoc Company Inc. (NYSE:MTW) Q2 2023 Results Conference Call August 8, 2023 10:00 AM ET Company Participants Ion Warner - Senior Vice President of Marketing and Investor Relations Aaron Ravenscroft - President and Chief Executive Officer Brian Regan - Executive Vice President and Chief Financial Officer Conference Call Participants Jamie Cook - Credit Suisse Mig Dobre - Baird Seth Weber - Wells Fargo Securities Operator Good morning, and welcome to The Manitowoc Second Quarter 2023 Earnings Call. M ...

PART I. FINANCIAL INFORMATION This section provides an overview of financial statements, management's analysis, and market risk disclosures [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements and detailed notes for Q1 2023 and 2022 [Condensed Consolidated Statements of Operations](index=2&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income significantly increased to $16.5 million, and net sales grew to $508.3 million for Q1 2023 Condensed Consolidated Statements of Operations | Metric | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | | :-------------------------------- | :------------------------------ | :------------------------------ | | Net sales | $508.3 million | $459.0 million | | Cost of sales | $402.0 million | $374.0 million | | Gross profit | $106.3 million | $85.0 million | | Operating income | $30.2 million | $17.6 million | | Net income | $16.5 million | $3.1 million | | Basic net income per common share | $0.47 | $0.09 | | Diluted net income per common share | $0.46 | $0.09 | - Net income increased by **432.3%** year-over-year, from **$3.1 million** in Q1 2022 to **$16.5 million** in Q1 2023[7](index=7&type=chunk) - Net sales grew by **10.7%** to **$508.3 million** in Q1 2023 from **$459.0 million** in Q1 2022[7](index=7&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income improved to $16.4 million for Q1 2023, driven by higher net income and positive foreign currency adjustments Condensed Consolidated Statements of Comprehensive Income (Loss) | Metric | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Net income | $16.5 million | $3.1 million | | Unrealized losses on derivatives, net | $(3.3) million | $(0.2) million | | Employee pension and postretirement benefit expense, net | $(1.0) million | $(0.6) million | | Foreign currency translation adjustments, net | $4.2 million | $(5.5) million | | Total other comprehensive loss, net | $(0.1) million | $(6.3) million | | Comprehensive income (loss) | $16.4 million | $(3.2) million | - Comprehensive income improved from a loss of **$3.2 million** in Q1 2022 to an income of **$16.4 million** in Q1 2023[10](index=10&type=chunk) - Foreign currency translation adjustments shifted from a loss of **$5.5 million** in Q1 2022 to a gain of **$4.2 million** in Q1 2023[10](index=10&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $1,691.1 million as of March 31, 2023, primarily due to higher inventories, with liabilities and equity also rising Condensed Consolidated Balance Sheets | Metric | March 31, 2023 | December 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Total assets | $1,691.1 million | $1,615.5 million | | Cash and cash equivalents | $56.5 million | $64.4 million | | Accounts receivable, net | $250.6 million | $266.3 million | | Inventories | $720.6 million | $611.9 million | | Total current assets | $1,079.4 million | $998.5 million | | Total current liabilities | $617.6 million | $547.8 million | | Total liabilities and stockholders' equity | $1,691.1 million | $1,615.5 million | | Total stockholders' equity | $552.8 million | $537.8 million | - Inventories increased by **17.8%** from **$611.9 million** at December 31, 2022, to **$720.6 million** at March 31, 2023[13](index=13&type=chunk) - Total assets increased by **4.7%** from **$1,615.5 million** at December 31, 2022, to **$1,691.1 million** at March 31, 2023[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to $15.4 million for Q1 2023, while financing cash use decreased Condensed Consolidated Statements of Cash Flows | Metric | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Net cash provided by operating activities | $15.4 million | $5.6 million | | Net cash used for investing activities | $(8.6) million | $(8.7) million | | Net cash used for financing activities | $(15.1) million | $(20.7) million | | Net decrease in cash and cash equivalents | $(7.9) million | $(23.8) million | | Cash and cash equivalents at end of period | $56.5 million | $51.6 million | - Net cash provided by operating activities increased by **175%** year-over-year, from **$5.6 million** in Q1 2022 to **$15.4 million** in Q1 2023[15](index=15&type=chunk) - Net cash used for financing activities decreased by **27%** year-over-year, from **$20.7 million** in Q1 2022 to **$15.1 million** in Q1 2023[15](index=15&type=chunk) [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total stockholders' equity increased to $552.8 million as of March 31, 2023, driven by net income and partially offset by repurchases Condensed Consolidated Statements of Equity | Metric | March 31, 2023 | March 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Common Stock - Par Value | $0.4 million | $0.4 million | | Additional Paid-in Capital | $605.8 million | $601.7 million | | Accumulated Other Comprehensive Loss | $(108.0) million | $(108.7) million | | Retained Earnings | $120.8 million | $231.0 million | | Treasury Stock | $(66.2) million | $(62.9) million | | Total stockholders' equity | $552.8 million | $661.5 million | - Retained earnings increased to **$120.8 million** as of March 31, 2023, from **$104.3 million** at December 31, 2022, primarily due to net income of **$16.5 million**[18](index=18&type=chunk) - Treasury stock increased to **$(66.2) million** as of March 31, 2023, from **$(65.7) million** at December 31, 2022, reflecting common stock repurchases of **$3.5 million**[18](index=18&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section details disclosures for financial statements, covering operations, accounting policies, financial instruments, debt, equity, and segments [Note 1. Company and Basis of Presentation](index=7&type=section&id=Note%201.%20Company%20and%20Basis%20of%20Presentation) Manitowoc is a leading provider of engineered lifting solutions, operating through Americas, EURAF, and MEAP segments - Manitowoc is one of the world's leading providers of engineered lifting solutions, offering mobile hydraulic, lattice-boom crawler, boom trucks, and tower cranes[21](index=21&type=chunk) - Key brands include Aspen Equipment, Grove, Manitowoc, MGX Equipment Services, National Crane, Potain, and Shuttlelift[21](index=21&type=chunk) - The company has three reportable segments: Americas, Europe and Africa ("EURAF"), and Middle East and Asia Pacific ("MEAP")[22](index=22&type=chunk) [Note 2. Recent Accounting Changes and Pronouncements](index=7&type=section&id=Note%202.%20Recent%20Accounting%20Changes%20and%20Pronouncements) The company adopted ASU No. 2022-04 as of January 1, 2023, with no material impact on financial statements - Adopted Accounting Standards Update ("ASU") No. 2022-04, "Disclosure of Supplier Financing Program Obligations," as of January 1, 2023[25](index=25&type=chunk) - The adoption of this ASU did not have a material impact on the Company's consolidated financial statements[25](index=25&type=chunk) [Note 3. Net Sales](index=8&type=section&id=Note%203.%20Net%20Sales) Revenue deferrals from customer advances increased to $34.4 million for Q1 2023, with $32.4 million recognized Note 3. Net Sales Summary | Metric | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Balance at beginning of period | $21.9 million | $28.7 million | | Cash received in advance of satisfying performance obligations | $34.4 million | $15.5 million | | Revenue recognized | $(32.4) million | $(17.9) million | | Currency translation | $0.1 million | $(0.8) million | | Balance at end of period | $24.0 million | $25.5 million | - Cash received in advance of satisfying performance obligations increased by **121.9%** from **$15.5 million** in Q1 2022 to **$34.4 million** in Q1 2023[28](index=28&type=chunk) [Note 4. Fair Value of Financial Instruments](index=8&type=section&id=Note%204.%20Fair%20Value%20of%20Financial%20Instruments) Financial instruments include FX Forward Contracts (Level 2) and senior secured second lien notes (Level 1) FX Forward Contracts Fair Value | Metric | March 31, 2023 | December 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | | FX Forward Contracts (Current Assets) | $3.5 million | $5.7 million | | FX Forward Contracts (Current Liabilities) | $0.1 million | $0.3 million | - The fair value of the **$300.0 million** senior secured second lien notes due on April 1, 2026, was approximately **$301.1 million** as of March 31, 2023[30](index=30&type=chunk) - FX Forward Contracts are classified within Level 2 of the fair value hierarchy, while the 2026 Notes are classified as Level 1[31](index=31&type=chunk)[32](index=32&type=chunk) [Note 5. Derivative Financial Instruments](index=8&type=section&id=Note%205.%20Derivative%20Financial%20Instruments) The company uses FX Forward Contracts to manage currency exposure, with $84.4 million notional amount outstanding as of March 31, 2023 - Aggregate notional amounts of FX Forward Contracts were **$84.4 million** as of March 31, 2023, down from **$87.7 million** as of December 31, 2022[35](index=35&type=chunk) - Net unrealized gains, net of income tax, recorded in Accumulated Other Comprehensive Income (AOCI) were **$2.1 million** as of March 31, 2023, compared to **$5.4 million** as of December 31, 2022[35](index=35&type=chunk) Derivative Gains and Losses by Recognition Location | Recognized Location | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | | :------------------ | :------------------------------ | :------------------------------ | | Designated (Cost of sales) | $3.4 million | $(0.1) million | | Non-Designated (Other income (expense) - net) | $(2.3) million | $0.7 million | [Note 6. Inventories](index=9&type=section&id=Note%206.%20Inventories) Total inventories increased to $720.6 million as of March 31, 2023, driven by higher work-in-process and finished goods Inventories by Component | Component | March 31, 2023 | December 31, 2022 | | :---------------- | :------------------------------ | :------------------------------ | | Raw materials | $163.0 million | $161.2 million | | Work-in-process | $175.9 million | $141.3 million | | Finished goods | $381.7 million | $309.4 million | | Total Inventories | $720.6 million | $611.9 million | - Total inventories increased by **17.8%** from **$611.9 million** at December 31, 2022, to **$720.6 million** at March 31, 2023[37](index=37&type=chunk) - Work-in-process inventories increased by **24.5%** from **$141.3 million** to **$175.9 million**[37](index=37&type=chunk) [Note 7. Notes Receivable](index=9&type=section&id=Note%207.%20Notes%20Receivable) Current notes receivable decreased to $9.4 million; prior year included a $4.8 million recovery from a written-off note - Current notes receivable were **$9.4 million** as of March 31, 2023, down from **$10.6 million** as of December 31, 2022[38](index=38&type=chunk) - Long-term notes receivable were **$2.1 million** as of March 31, 2023, slightly up from **$2.0 million** as of December 31, 2022[38](index=38&type=chunk) - During Q1 2022, the Company recorded **$4.8 million** in income from the partial recovery of a previously written-off long-term note receivable from a 2014 divestiture[38](index=38&type=chunk) [Note 8. Property, Plant, and Equipment](index=10&type=section&id=Note%208.%20Property,%20Plant,%20and%20Equipment) Net property, plant, and equipment decreased slightly to $331.6 million, with $6.2 million classified as held for sale Note 8. Property, Plant, and Equipment Summary | Metric | March 31, 2023 | December 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Total cost | $831.3 million | $822.6 million | | Less: accumulated depreciation | $(499.7) million | $(487.3) million | | Property, plant, and equipment - net | $331.6 million | $335.3 million | - Net property, plant, and equipment decreased by **1.1%** from **$335.3 million** to **$331.6 million**[40](index=40&type=chunk) - As of March 31, 2023, **$6.2 million** of property, plant, and equipment was classified as assets held for sale[41](index=41&type=chunk) [Note 9. Goodwill and Intangible Assets](index=10&type=section&id=Note%209.%20Goodwill%20and%20Intangible%20Assets) Goodwill decreased to $79.9 million due to foreign currency impact; no impairment events in Q1 2023 Goodwill and Intangible Assets Summary | Metric | March 31, 2023 | December 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Consolidated Goodwill | $79.9 million | $80.1 million | | Total Intangible Assets (Net) | $126.6 million | $126.7 million | - Goodwill decreased by **$0.2 million** due to foreign currency impact[42](index=42&type=chunk) - Amortization expense for definite-lived intangible assets was **$1.0 million** for Q1 2023, up from **$0.8 million** in Q1 2022[44](index=44&type=chunk) [Note 10. Accounts Payable and Accrued Expenses](index=11&type=section&id=Note%2010.%20Accounts%20Payable%20and%20Accrued%20Expenses) Total accounts payable and accrued expenses increased to $518.1 million, primarily due to higher trade accounts payable Accounts Payable and Accrued Expenses Components | Component | March 31, 2023 | December 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Trade accounts payable | $338.1 million | $274.6 million | | Employee-related expenses | $44.9 million | $51.0 million | | Accrued vacation | $24.8 million | $22.4 million | | Miscellaneous accrued expenses | $110.3 million | $98.4 million | | Total accounts payable and accrued expenses | $518.1 million | $446.4 million | - Total accounts payable and accrued expenses increased by **16.1%** from **$446.4 million** to **$518.1 million**[45](index=45&type=chunk) - Trade accounts payable increased by **23.1%** from **$274.6 million** to **$338.1 million**[45](index=45&type=chunk) [Note 11. Debt](index=11&type=section&id=Note%2011.%20Debt) Total debt decreased to $377.4 million due to lower ABL borrowings, with the company in compliance with all debt covenants Debt Breakdown | Metric | March 31, 2023 | December 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Borrowings under ABL revolving credit facility | $70.0 million | $80.0 million | | Senior secured second lien notes due 2026 | $300.0 million | $300.0 million | | Other debt | $9.6 million | $8.0 million | | Total debt | $377.4 million | $385.6 million | | Long-term debt | $369.5 million | $379.5 million | - Borrowings under the ABL Revolving Credit Facility decreased by **$10.0 million** to **$70.0 million**[46](index=46&type=chunk)[133](index=133&type=chunk) - As of March 31, 2023, the Company was in compliance with all affirmative and negative covenants in its debt instruments[55](index=55&type=chunk) [Note 12. Accounts Receivable Factoring](index=14&type=section&id=Note%2012.%20Accounts%20Receivable%20Factoring) Accounts receivable factoring programs generated $36.0 million in cash proceeds for Q1 2023, with a U.S. program maximum of $27.0 million - Cash proceeds from the factoring of accounts receivable qualifying as sales were **$36.0 million** for Q1 2023, up from **$33.3 million** for Q1 2022[57](index=57&type=chunk) - The U.S. accounts receivable financing program has a maximum availability of **$27.0 million**[56](index=56&type=chunk) - Financing charges associated with factoring were immaterial for both periods[58](index=58&type=chunk) [Note 13. Income Taxes](index=14&type=section&id=Note%2013.%20Income%20Taxes) Provision for income taxes decreased to $4.2 million for Q1 2023 due to a change in the jurisdictional mix of income - Provision for income taxes decreased by **35.4%** to **$4.2 million** for Q1 2023 from **$6.5 million** for Q1 2022[60](index=60&type=chunk) - The decrease is due to a change in the jurisdictional mix of income, reflecting a reduction of losses in jurisdictions where no tax benefit can be realized[60](index=60&type=chunk) - Unrecognized tax benefits, excluding interest and penalties, remained unchanged at **$9.1 million** as of March 31, 2023, and December 31, 2022[61](index=61&type=chunk) [Note 14. Net Income Per Common Share](index=14&type=section&id=Note%2014.%20Net%20Income%20Per%20Common%20Share) Diluted net income per common share increased to $0.46 for Q1 2023, with more dilutive securities from equity awards Weighted Average Common Shares Outstanding | Metric | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Basic weighted average common shares outstanding | 35,121,473 | 35,131,889 | | Diluted weighted average common shares outstanding | 35,748,021 | 35,565,935 | | Anti-dilutive equity instruments excluded | 682,930 | 588,050 | - Diluted net income per common share increased by **411.1%** from **$0.09** in Q1 2022 to **$0.46** in Q1 2023[7](index=7&type=chunk) - No cash dividends were declared or paid during the three months ended March 31, 2023 and 2022[63](index=63&type=chunk) [Note 15. Equity](index=15&type=section&id=Note%2015.%20Equity) The company repurchased 191,846 shares for $3.5 million in Q1 2023, with $4.1 million remaining under authorization - The company repurchased **191,846 shares** of common stock for **$3.5 million** during Q1 2023[65](index=65&type=chunk)[146](index=146&type=chunk) - As of March 31, 2023, **$4.1 million** remained under the Board of Directors' authorization to purchase common stock[65](index=65&type=chunk)[145](index=145&type=chunk) - Accumulated other comprehensive loss was **$(108.0) million** as of March 31, 2023, compared to **$(107.9) million** as of December 31, 2022[66](index=66&type=chunk) [Note 16. Stock-Based Compensation](index=16&type=section&id=Note%2016.%20Stock-Based%20Compensation) Stock-based compensation expense remained at $3.1 million, with more restricted and performance share units granted in Q1 2023 - Stock-based compensation expense was **$3.1 million** for both the three months ended March 31, 2023, and 2022[69](index=69&type=chunk) - Granted **478,411** restricted stock units in Q1 2023, up from **378,623** in Q1 2022[70](index=70&type=chunk) - Issued **233,409** performance share units in Q1 2023, up from **198,334** in Q1 2022, with 2023 goals weighted **60%** on adjusted EBITDA percentage and **40%** on cumulative non-new machine sales[71](index=71&type=chunk)[72](index=72&type=chunk) [Note 17. Segments](index=17&type=section&id=Note%2017.%20Segments) Segments showed varied performance: Americas saw significant growth, while EURAF and MEAP operating income declined despite stable sales Segment Performance Summary | Segment | Net Sales (Q1 2023) | Net Sales (Q1 2022) | Segment Operating Income (Q1 2023) | Segment Operating Income (Q1 2022) | | :-------- | :------------------ | :------------------ | :--------------------------------- | :--------------------------------- | | Americas | $264.4 million | $215.9 million | $28.5 million | $5.8 million | | EURAF | $178.2 million | $179.2 million | $3.6 million | $11.4 million | | MEAP | $65.7 million | $63.9 million | $8.6 million | $13.1 million | - Americas segment operating income increased by **391.4%** year-over-year[78](index=78&type=chunk) Sales Type Breakdown | Sales Type | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | | :----------- | :------------------------------ | :------------------------------ | | New machine sales | $357.3 million | $329.6 million | | Non-new machine sales | $151.0 million | $129.4 million | | Total net sales | $508.3 million | $459.0 million | [Note 18. Commitments and Contingencies](index=18&type=section&id=Note%2018.%20Commitments%20and%20Contingencies) The company faces legal proceedings and an EPA inquiry; product liability and warranty reserves decreased, while EPA liability remains $14.9 million - Product liability reserves were **$8.5 million** as of March 31, 2023, down from **$9.4 million** as of December 31, 2022[82](index=82&type=chunk) - Reserves for warranty and other related claims were **$56.4 million** as of March 31, 2023, down from **$58.0 million** as of December 31, 2022[83](index=83&type=chunk) - The total recorded estimated liability for the U.S. EPA inquiry is **$14.9 million**, with statutory maximum penalties under the Clean Air Act estimated at approximately **$174.0 million**[86](index=86&type=chunk) [Note 19. Guarantees](index=19&type=section&id=Note%2019.%20Guarantees) The company provides buyback commitments and product warranties; deferred revenue for buybacks was $26.4 million, and warranty accruals decreased to $56.4 million - Deferred revenue related to buyback obligations was **$26.4 million** as of March 31, 2023, down from **$27.3 million** as of December 31, 2022[87](index=87&type=chunk) - Total buyback commitments outstanding were **$41.5 million** as of March 31, 2023, down from **$42.5 million** as of December 31, 2022[87](index=87&type=chunk) Warranty Accruals Summary | Metric | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | | Warranty balance at beginning of period | $58.0 million | $60.2 million | | Adjustments to accruals for warranties | $6.6 million | $5.9 million | | Settlements made | $(8.5) million | $(6.1) million | | Warranty balance at end of period | $56.4 million | $59.4 million | [Note 20. Employee Benefit Plans](index=19&type=section&id=Note%2020.%20Employee%20Benefit%20Plans) Net periodic benefit cost for Q1 2023 was $1.0 million for U.S. Pension, $1.0 million for Non-U.S. Pension, and $(0.2) million for Postretirement Health plans Net Periodic Benefit Cost Components | Component of Net Periodic Benefit Cost | U.S. Pension Plan (Q1 2023) | Non-U.S. Pension Plans (Q1 2023) | Postretirement Health and Other Plans (Q1 2023) | | :------------------------------------- | :-------------------------- | :------------------------------- | :---------------------------------------------- | | Service cost | $0.0 million | $0.3 million | $0.0 million | | Interest cost | $1.4 million | $0.7 million | $0.1 million | | Expected return on plan assets | $(1.0) million | $(0.4) million | $0.0 million | | Amortization of prior service cost | $0.0 million | $0.0 million | $(0.3) million | | Amortization of actuarial net (gain) loss | $0.6 million | $0.4 million | $0.0 million | | Net periodic benefit cost | $1.0 million | $1.0 million | $(0.2) million | - Net periodic benefit cost for the U.S. Pension Plan increased to **$1.0 million** in Q1 2023 from **$0.0 million** in Q1 2022[92](index=92&type=chunk) - Net periodic benefit cost for Postretirement Health and Other Plans improved from a cost of **$(0.4) million** in Q1 2022 to a benefit of **$(0.2) million** in Q1 2023[92](index=92&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2023 financial performance, condition, and liquidity, noting increased net sales and operating income despite challenges [Cautionary Statements Regarding Forward-Looking Information](index=21&type=section&id=Cautionary%20Statements%20Regarding%20Forward-Looking%20Information) This section outlines risks and uncertainties that could impact forward-looking statements, including macroeconomic, geopolitical, and supply chain factors - Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially[97](index=97&type=chunk) - Key risks include macroeconomic conditions (inflation, rising interest rates, recessionary concerns), global supply chain constraints, labor availability and cost pressures, and changes in raw material costs[98](index=98&type=chunk)[101](index=101&type=chunk) - Geopolitical events, such as the Russia-Ukraine conflict, can lead to market disruptions, volatility in commodity prices, and potential asset impairment[98](index=98&type=chunk) [Current Events](index=23&type=section&id=Current%20Events) The company faces inflation, rising interest rates, and supply chain constraints; Russian operations are curtailed with expected future charges [Inflation and Interest Rate Environment](index=23&type=section&id=Inflation%20and%20Interest%20Rate%20Environment) Inflation negatively impacted costs; price increases were implemented, but realization is delayed, and high interest rates may affect demand - The Company was negatively impacted by inflation in wages, logistics, energy, raw material, and component costs for Q1 2023[101](index=101&type=chunk) - Implemented price increases and provisional pricing strategies to mitigate cost inflation, but realization is delayed due to long lead times[101](index=101&type=chunk) - Elevated interest rates and global macroeconomic uncertainty could impact customer decisions to purchase cranes[101](index=101&type=chunk) [Supply Chain, Labor and Logistics Constraints](index=23&type=section&id=Supply%20Chain,%20Labor%20and%20Logistics%20Constraints) Global supply chain, labor, and logistics constraints continue to impact sourcing and shipping, requiring alternative strategies - Global supply chain, labor, and logistics constraints negatively impacted the Company's ability to timely source parts and complete/ship units in Q1 2023[102](index=102&type=chunk) - Supply chains for certain key components remain distressed despite some relief[102](index=102&type=chunk) - The Company actively monitors and manages constraints through alternative sourcing and adapting production[102](index=102&type=chunk) [Curtailment of Operations in Russia](index=23&type=section&id=Curtailment%20of%20Operations%20in%20Russia) Russian operations are curtailed, with expected future non-cash charges of $5.0 million to $10.0 million from foreign currency adjustments - The Company's operations in Russia have been substantially curtailed as of March 31, 2023[103](index=103&type=chunk) - Expects future charges of **$5.0 million** to **$10.0 million** related to the non-cash write-off of foreign currency adjustments in accumulated other comprehensive loss[103](index=103&type=chunk) [Segment Operating Performance](index=24&type=section&id=Segment%20Operating%20Performance) Americas segment showed strong growth in sales and operating income, while EURAF and MEAP operating income declined due to various factors Segment Operating Performance Summary | Segment | Net Sales (Q1 2023) | Net Sales (Q1 2022) | Net Sales Change (YoY) | Operating Income (Q1 2023) | Operating Income (Q1 2022) | Operating Income Change (YoY) | | :-------- | :------------------ | :------------------ | :--------------------- | :------------------------- | :------------------------- | :---------------------------- | | Americas | $264.4 million | $215.9 million | +22.5% | $28.5 million | $5.8 million | +391.4% | | EURAF | $178.2 million | $179.2 million | -0.6% | $3.6 million | $11.4 million | -68.4% | | MEAP | $65.7 million | $63.9 million | +2.8% | $8.6 million | $13.1 million | -34.4% | [Americas Segment](index=24&type=section&id=Americas%20Segment) Americas segment net sales increased by 22.5% to $264.4 million, with operating income surging to $28.5 million due to sales and pricing - Americas segment net sales increased **22.5%** to **$264.4 million** for Q1 2023[107](index=107&type=chunk) - Americas segment operating income increased by **$22.7 million** to **$28.5 million** for Q1 2023[108](index=108&type=chunk) - The increase was primarily attributable to higher new machine sales, non-new machine sales, pricing actions, and favorable product mix[107](index=107&type=chunk)[108](index=108&type=chunk) [EURAF Segment](index=24&type=section&id=EURAF%20Segment) EURAF segment net sales slightly decreased to $178.2 million, and operating income significantly declined to $3.6 million due to costs and mix - EURAF segment net sales decreased **0.6%** to **$178.2 million** for Q1 2023, unfavorably impacted by **$8.0 million** from foreign currency exchange rates[109](index=109&type=chunk) - EURAF segment operating income decreased **68.4%** to **$3.6 million** for Q1 2023[110](index=110&type=chunk) - The decrease in operating income was primarily due to unfavorable new machine product mix and higher material, transportation, and labor costs[110](index=110&type=chunk) [MEAP Segment](index=24&type=section&id=MEAP%20Segment) MEAP segment net sales increased to $65.7 million, but operating income decreased to $8.6 million due to higher costs and prior-year recovery absence - MEAP segment net sales increased **2.8%** to **$65.7 million** for Q1 2023, despite an unfavorable impact of **$3.2 million** from foreign currency exchange rates[111](index=111&type=chunk) - MEAP segment operating income decreased **34.4%** to **$8.6 million** for Q1 2023[112](index=112&type=chunk) - The decrease in operating income was primarily due to higher labor and administrative costs and a **$4.8 million** income recorded in the prior year from a note receivable recovery[112](index=112&type=chunk) [Results of Operations for the three months ended March 31, 2023 and 2022](index=25&type=section&id=Results%20of%20Operations%20for%20the%20three%20months%20ended%20March%2031,%202023%20and%202022) The company reported strong Q1 2023 growth in orders, backlog, net sales, and gross profit, with increased net income and decreased tax provision Key Financial Metrics Summary | Metric | Q1 2023 | Q1 2022 | Percentage Change | | :------------------------------------ | :------------------------------ | :------------------------------ | :---------------- | | Orders | $524.8 million | $481.5 million | +9.0% | | Backlog | $1,075.7 million | $1,033.4 million | +4.1% | | Net sales | $508.3 million | $459.0 million | +10.7% | | Gross profit | $106.3 million | $85.0 million | +25.1% | | Gross profit % | 20.9% | 18.5% | +2.4 percentage points | | Engineering, selling, and administrative expenses | $75.1 million | $66.5 million | +12.9% | | Interest expense | $8.1 million | $7.4 million | +9.5% | | Provision for income taxes | $4.2 million | $6.5 million | -35.4% | [Orders and Backlog](index=25&type=section&id=Orders%20and%20Backlog) Orders increased by 9.0% to $524.8 million for Q1 2023, driven by Americas demand, and total backlog grew by 4.1% - Orders for Q1 2023 increased **9.0%** to **$524.8 million** from **$481.5 million** in Q1 2022[115](index=115&type=chunk) - The increase in orders was primarily attributable to higher demand in the Americas segment, partially offset by softening demand in the EURAF segment[115](index=115&type=chunk) - Total backlog as of March 31, 2023, was **$1,075.7 million**, a **4.1%** increase from **$1,033.4 million** as of March 31, 2022[116](index=116&type=chunk) [Net Sales](index=25&type=section&id=Net%20Sales) Consolidated net sales increased by 10.7% to $508.3 million for Q1 2023, driven by Americas sales and pricing, despite currency impact

The Manitowoc Company, Inc. (NYSE:MTW) Q1 2023 Earnings Conference Call May 3, 2023 10:00 AM ET Company Participants Ion Warner - Investor Relations Aaron Ravenscroft - President and Chief Executive Officer Brian Regan - Executive Vice President and Chief Financial Officer Conference Call Participants Jamie Cook - Credit Suisse Tami Zakaria - JPMorgan Joseph Grabowski - Baird Stephen Volkmann - Jefferies Steven Fisher - UBS Seth Weber - Wells Fargo Securities Operator Good morning. My name is David and I wi ...

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Sales and Growth Strategy - The Manitowoc Company aims to grow non-new machine sales by 50% to approximately $675 million by 2026 as part of its CRANES+50 strategy[18] - The Company has invested $30 million in capital expenditures to expand its tower crane rental fleet in Europe, enhancing aftermarket services[20] - The acquisition of Aspen Equipment and H&E Equipment Services has expanded Manitowoc's ability to provide new machine sales and aftermarket services in North America[23] - The Company continues to invest in its rental fleet to further expand aftermarket services, primarily in the United States and Europe[24] Product Development and Innovation - Seven new models of innovative topless tower cranes have been developed for the China Belt and Road market, reducing the product development cycle from 18-24 months to 12-14 months[21] - Ten new all-terrain cranes have been announced, featuring enhancements such as longer boom lengths and increased load capacity[22] - The company continues to focus on engineering, research, and development to create innovative products, with dedicated teams across three continents[48] - Manitowoc's lattice-boom crawler cranes are designed to provide higher lifting capacities and are used in heavy construction and energy-related projects[24] - The company has numerous patents globally, protecting its intellectual property and maintaining its competitive edge in engineered lifting solutions[47] Operational Efficiency and Manufacturing - Manitowoc operates three reportable segments: the Americas, Europe and Africa, and the Middle East and Asia Pacific[15] - The Company focuses on continuous improvement through The Manitowoc Way, which includes lean tools to enhance operational efficiency and product quality[16] - The company operates eleven manufacturing facilities globally, including remanufacturing facilities, utilizing advanced manufacturing and quality assurance processes[42] Supply Chain and Workforce - In 2022, the company faced supply chain, labor, and logistics constraints, particularly on electronic components and hydraulics, negatively impacting operations and cash flows[46] - The company employed approximately 4,800 people worldwide as of December 31, 2022, with the majority in the EURAF segment[51] - The company maintains long-term agreements with critical suppliers to mitigate risks related to raw material availability[45] Health, Safety, and Employee Development - The year-end Recordable Injury Rate (RIR) was 1.53, significantly lower than the industry average of 3.6, indicating strong health and safety performance[53] - The company provides extensive training programs for employees, including environmental health and safety and leadership development[55] - The company invests in employee development through various training programs, including environmental health and safety and Lean manufacturing methodologies[55] Diversity and Inclusion - The company launched its first women's resource group in 2022 as part of its commitment to diversity, equity, and inclusion[54] - The company has a strong commitment to diversity and inclusion, launching its first women's resource group in 2022[54] Aftermarket Services - Manitowoc's aftermarket services portfolio continues to expand, supporting its growth strategy in North America and Europe[24] - The company provides extensive aftermarket services, including parts sales, maintenance, and technical support, enhancing customer satisfaction[34]

Financial Data and Key Metrics Changes - The company reported fourth-quarter net sales of $622 million, a 25% increase year-over-year, driven by pricing, a stronger shippable backlog, and incremental sales from acquisitions [43][67] - Adjusted EBITDA for the fourth quarter was $52 million, a 51% increase year-over-year, with an adjusted EBITDA margin of 8.3%, up 140 basis points from the prior year [22][46] - For the full year, net sales totaled $2.33 billion, an 18% increase year-over-year, primarily due to pricing actions and higher volume [67] - The company generated $80 million in cash from operating activities in the fourth quarter, resulting in free cash flows of $50 million [24] Business Line Data and Key Metrics Changes - Non-new machine sales increased by 22% to $545 million for the year, contributing to overall growth [6][41] - The company launched 9 new cranes in 2022 and introduced 10 new all-terrain models, enhancing its product offerings [29][40] Market Data and Key Metrics Changes - Orders for the fourth quarter were $708 million, a 15% increase year-over-year, primarily driven by higher pricing and large dealer orders [20] - The European mobile crane market showed positive signs, but the tower crane market faced a lack of confidence due to the Ukraine conflict and rising interest rates [12] - In Asia Pacific, market sentiment varied, with Southeast Asia remaining muted due to a corruption scandal, while optimism exists for Vietnam's future [13] Company Strategy and Development Direction - The company is focused on growing its European tower crane rental fleet and has invested $30 million in this area over the last three years [17] - The company aims to grow its non-new machine sales organically and through strategic acquisitions, positioning itself for future growth [53] Management's Comments on Operating Environment and Future Outlook - Management expects 2023 results to be similar to 2022, with headwinds from inflation, supply chain constraints, and a softening European tower crane market [48][49] - The company remains optimistic about the long-term recovery in crane demand, driven by infrastructure spending and projects in Saudi Arabia [72][73] Other Important Information - The company achieved ISO 50001 certification for all manufacturing facilities and met its 2025 greenhouse gas emissions target three years ahead of schedule [8] - The company ended the quarter with a cash balance of $64 million, a decrease of $11 million from the prior year [47] Q&A Session Summary Question: Can you expand on the opportunity in the Middle East? - Management indicated that the current projects are just beginning, with tenders expected to emerge in the fourth quarter of the year [54] Question: What are your expectations for sales guidance regarding price versus volume? - Management noted that the sales guidance includes both price increases and volume changes, but specifics were not disclosed [57] Question: How do you see the competitive environment in the Middle East compared to Europe? - Management described the Middle East as having a mixed competitive environment, with pricing varying based on machine availability and project size [117]

Forward-Looking Statements 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. For a list of factors that could cause actual results to differ materially from those discussed or implied, please see the Company's periodic filings with the SEC, particularly those disclosed in "Risk Factors" in the Company's Annual Reports on Form 10-K for the years ended December 31, 2021. Any "forward-looking s ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-11978 The Manitowoc Company, Inc. (Exact Name of Registrant as Specified in its Charter) Wisconsin 39-0448110 (State or other ...

Financial Data and Key Metrics Changes - The company's third quarter sales were $455 million, with an adjusted EBITDA of $24 million, reflecting a 12% increase in net sales year-over-year and a 20% increase in adjusted EBITDA year-over-year [8][25][27] - The adjusted EBITDA margin was 5.3%, an increase of approximately 40 basis points compared to the previous year [27] - The net operating working capital increased by $112 million year-over-year, primarily due to acquisitions and supply chain disruptions [29] Business Line Data and Key Metrics Changes - Non-new machine sales increased by 27% year-over-year, driven by acquisitions and expansion of field service [16] - The backlog at the end of the quarter was $943 million, relatively flat sequentially but impacted by foreign currency exchange rates [24] Market Data and Key Metrics Changes - In North America, demand remained strong with a healthy backlog of projects and government investment in infrastructure [10] - The European market faced challenges due to inflation and geopolitical issues, leading to a slowdown in the tower crane business [12] - The Middle East showed significant growth opportunities, particularly due to Saudi Arabia's Vision 2030 initiative [13] Company Strategy and Development Direction - The company is focused on its Cranes+50 strategy to grow its aftermarket business, which is expected to reduce cyclicality and improve margins [7][16] - The company is also working on internal continuous improvement initiatives to enhance productivity and reduce waste [18][37] Management's Comments on Operating Environment and Future Outlook - The management highlighted a mixed operating environment with high oil prices and significant infrastructure spending, but also noted challenges from supply chain issues and inflation [35] - There is optimism regarding the crane replacement cycle, as aging fleets are expected to drive future demand [36] Other Important Information - The company completed two Kaizens aimed at improving productivity and reducing waste in its operations [18] - The company ended the quarter with a cash balance of $43 million and total liquidity of $245 million [32] Q&A Session Summary Question: Insights on fourth quarter sales and margins - Management indicated that the third quarter is typically weaker, but they have reduced internal forecasts and have a strong backlog to support sales in the fourth quarter [42][44] Question: Expectations for 2023 top line - Management has not provided formal guidance for 2023 but noted a good backlog and consistent order tracking, suggesting potential stability in revenue [48] Question: Backlog and pricing strategy - Management acknowledged that they have not fully worked through lower-priced backlog and expect to do so by the second half of 2023 [55] Question: Aftermarket business growth expectations - Management indicated that the aftermarket business is heavily acquisition-driven but expects mid-single-digit growth moving forward [60] Question: Impact of bauma show on orders - Management reported strong order activity post-bauma, with October orders exceeding $200 million, indicating positive momentum [69]