Manitowoc(MTW) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Q1 2025 and 2024, detailing the company's financial performance, position, and cash flows Condensed Consolidated Financial Statements The company reported a net loss of $6.3 million in Q1 2025, a significant decline from $4.5 million net income in Q1 2024, driven by decreased net sales and higher expenses, while total assets increased and operating cash flow improved Condensed Consolidated Statements of Operations (Q1 2025 vs Q1 2024) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net sales | $470.9 million | $495.1 million | | Gross profit | $89.8 million | $92.5 million | | Operating income | $5.3 million | $15.2 million | | Net income (loss) | $(6.3) million | $4.5 million | | Diluted net income (loss) per share | $(0.18) | $0.12 | Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $41.4 million | $48.0 million | | Inventories - net | $701.7 million | $609.4 million | | Total assets | $1,763.8 million | $1,660.0 million | | Total debt (Current & Long-term) | $399.0 million | $390.2 million | | Total stockholders' equity | $651.6 million | $640.1 million | Condensed Consolidated Statements of Cash Flows (Q1 2025 vs Q1 2024) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used for) operating activities | $12.9 million | $(30.6) million | | Net cash used for investing activities | $(23.6) million | $(12.0) million | | Net cash provided by financing activities | $3.2 million | $40.2 million | | Net decrease in cash and cash equivalents | $(6.6) million | $(2.9) million | Notes to Unaudited Condensed Consolidated Financial Statements These notes detail key accounting policies, a $12.9 million asset acquisition, $399.0 million in total debt, a $45.0 million EPA settlement liability, and segment performance, highlighting a decline in Americas operating income and growth in MEAP - The company is a leading provider of engineered lifting products, operating through three reportable segments: Americas, Europe and Africa (EURAF), and Middle East and Asia Pacific (MEAP)[21][22] - On February 4, 2025, the company acquired certain assets and distribution rights from Ring Power Corporation for $12.9 million in cash, which was accounted for as an asset acquisition[27] Segment Operating Income (Loss) (Q1 2025 vs Q1 2024) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Americas | $17.7 million | $29.5 million | | EURAF | $(11.3) million | $(11.8) million | | MEAP | $11.4 million | $8.2 million | | Total Segment Operating Income | $17.8 million | $25.9 million | - The company recorded a liability of $45.0 million as of March 31, 2025, for a civil penalty and emissions mitigation project to settle alleged violations of the EPA's Transition Program for Equipment Manufacturers (TPEM), with the civil penalty of $43.2 million paid in April 2025[86][87] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a challenging Q1 2025, marked by a 4.9% decrease in net sales, a 17.9% decline in backlog, and a 40% drop in Americas segment operating income, despite improved operating cash flow and sufficient liquidity Orders and Backlog Q1 2025 orders increased 10.1% to $610.3 million year-over-year, driven by Americas and EURAF, while total backlog decreased 17.9% from Q1 2024 to $797.8 million but increased 22.7% from year-end 2024 Orders and Backlog Trends | Metric | Q1 2025 | Q1 2024 | % Change YoY | | :--- | :--- | :--- | :--- | | Orders | $610.3 million | $554.1 million | +10.1% | | Backlog (as of March 31) | $797.8 million | $971.3 million | -17.9% | Results of Operations Q1 2025 consolidated net sales decreased 4.9% to $470.9 million, primarily due to lower new machine sales, while gross profit declined 2.9% and engineering, selling, and administrative expenses rose 9.1% to $82.9 million Key Operational Results (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $470.9 million | $495.1 million | (4.9)% | | Gross profit | $89.8 million | $92.5 million | (2.9)% | | Gross profit % | 19.1% | 18.7% | +0.4 p.p. | | Engineering, selling, and administrative expenses | $82.9 million | $76.0 million | 9.1% | - The decrease in net sales was primarily attributable to $39.6 million of lower new machine sales in all segments, partially offset by $15.4 million of higher non-new machine sales[109] - The increase in Engineering, selling, and administrative expenses was primarily due to costs for the triennial bauma trade show, higher professional services fees, and higher new product development costs[112] Segment Operating Performance The Americas segment experienced an 8.4% sales decrease and a 40.0% operating income decline, while EURAF maintained an operating loss, and MEAP's operating income grew 39.0% to $11.4 million despite flat sales Segment Performance (Q1 2025 vs Q1 2024) | Segment | Net Sales (Q1 2025) | % Change YoY | Operating Income (Q1 2025) | % Change YoY | | :--- | :--- | :--- | :--- | :--- | | Americas | $259.3 M | (8.4)% | $17.7 M | (40.0)% | | EURAF | $145.6 M | 1.8% | $(11.3) M | (4.2)% | | MEAP | $66.0 M | (4.2)% | $11.4 M | 39.0% | - The decrease in Americas segment operating income was primarily due to lower net sales, lower absorbed costs from reduced manufacturing volume, and higher engineering, selling, and administrative expenses[118] Financial Condition and Liquidity Operating cash flow significantly improved to $12.9 million in Q1 2025 due to better working capital management, while total liquidity stood at $307.1 million and total debt increased slightly to $399.0 million Cash Flow Summary (Q1 2025 vs Q1 2024) | Cash Flow | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating Activities | $12.9 million | $(30.6) million | | Investing Activities | $(23.6) million | $(12.0) million | | Financing Activities | $3.2 million | $40.2 million | - The increase in net cash from operating activities was primarily due to $55.2 million of lower cash use from changes in operating assets and liabilities, particularly inventory and accounts payable[124] Liquidity Position | Component | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $41.4 million | $48.0 million | | Revolver borrowing capacity | $325.0 million | $325.0 million | | Less: Borrowings & LCs | $(86.7) million | $(82.4) million | | Total Liquidity (excl. other debt) | $279.7 million | $290.6 million | Non-GAAP Measures The company's Q1 2025 Adjusted EBITDA decreased to $21.7 million with a 4.6% margin, while free cash flow improved significantly to $2.1 million, and trailing twelve-month Adjusted ROIC was 5.1% Adjusted EBITDA Reconciliation (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $(6.3) million | $4.5 million | | EBITDA | $15.9 million | $31.3 million | | Adjusted EBITDA | $21.7 million | $31.3 million | | Adjusted EBITDA margin | 4.6% | 6.3% | - The company's Adjusted Return on Invested Capital (ROIC) for the trailing twelve months ended March 31, 2025 was 5.1%[135][136] Free Cash Flow Reconciliation (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used for) operating activities | $12.9 million | $(30.6) million | | Capital expenditures | $(10.8) million | $(12.2) million | | Free cash flows | $2.1 million | $(42.8) million | Item 3. Quantitative and Qualitative Disclosure about Market Risk The company reports no material changes to its market risk disclosures, including foreign currency and interest rate risks, since its 2024 Annual Report on Form 10-K - The company's market risk disclosures have not materially changed since the 2024 Annual Report on Form 10-K was filed[140] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The company's CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures are effective[142] - During the first quarter of 2025, there were no changes that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[143] PART II. OTHER INFORMATION Item 1A. Risk Factors The company reports no material changes to the risk factors previously disclosed in its 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[146] Item 5. Other Information This section discloses that no director or Section 16 officer adopted new Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - During the three months ended March 31, 2025, no director or Section 16 officer of the Company adopted a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement"[147] Item 6. Exhibits This section lists exhibits filed with the 10-Q report, including CEO and CFO certifications and various Inline XBRL data files for financial reporting - The exhibits filed with this report include CEO and CFO certifications (Exhibits 31, 32.1, 32.2) and various Inline XBRL data files (Exhibits 101 and 104)[148]