Manitowoc(MTW) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for The Manitowoc Company, Inc., including statements of operations, comprehensive income, balance sheets, cash flows, and equity for the periods ended June 30, 2025 and 2024, along with detailed notes explaining the company's accounting policies, recent changes, and specific financial line items Condensed Consolidated Statements of Operations This statement details the company's financial performance, including net sales, gross profit, operating income, and net income for the specified periods Consolidated Statements of Operations (Three Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (%) | | :--------------- | :-------------- | :-------------- | :--------- | | Net sales | $539.5 | $562.1 | -4.0% | | Gross profit | $99.0 | $99.7 | -0.7% | | Operating income | $9.8 | $12.9 | -24.0% | | Net income (loss)| $1.5 | $1.6 | -6.3% | | Basic EPS | $0.04 | $0.05 | -20.0% | | Diluted EPS | $0.04 | $0.04 | 0.0% | Consolidated Statements of Operations (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (%) | | :--------------- | :-------------- | :-------------- | :--------- | | Net sales | $1,010.4 | $1,057.2 | -4.4% | | Gross profit | $188.8 | $192.2 | -1.8% | | Operating income | $15.1 | $28.1 | -46.2% | | Net income (loss)| $(4.8) | $6.1 | -178.7% | | Basic EPS | $(0.14) | $0.17 | -182.4% | | Diluted EPS | $(0.14) | $0.17 | -182.4% | Condensed Consolidated Statements of Comprehensive Income (Loss) This statement presents net income and other comprehensive income components, leading to total comprehensive income or loss for the periods Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | | :-------------------------------------- | :-------------- | :-------------- | | Net income (loss) | $1.5 | $1.6 | | Total other comprehensive income (loss) | $25.7 | $(1.6) | | Comprehensive income (loss) | $27.2 | $— | Consolidated Statements of Comprehensive Income (Loss) (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | | :-------------------------------------- | :-------------- | :-------------- | | Net income (loss) | $(4.8) | $6.1 | | Total other comprehensive income (loss) | $43.6 | $(14.1) | | Comprehensive income (loss) | $38.8 | $(8.0) | Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific reporting dates Consolidated Balance Sheets (As of June 30, 2025 and December 31, 2024) | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :--------------------------- | :----------------------- | :--------------------------- | | Cash and cash equivalents | $32.9 | $48.0 | | Accounts receivable, net | $289.6 | $260.3 | | Inventories - net | $782.5 | $609.4 | | Total current assets | $1,162.7 | $958.9 | | Total assets | $1,883.8 | $1,660.0 | | Accounts payable and accrued expenses | $469.2 | $389.4 | | Total current liabilities | $560.4 | $474.3 | | Long-term debt | $459.8 | $377.1 | | Total liabilities | $1,202.5 | $1,019.9 | | Total stockholders' equity | $681.3 | $640.1 | Condensed Consolidated Statements of Cash Flows This statement summarizes cash inflows and outflows from operating, investing, and financing activities for the specified periods Consolidated Statements of Cash Flows (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | Change (Millions) | | :-------------------------------------- | :-------------- | :-------------- | :---------------- | | Net cash used for operating activities | $(54.8) | $(19.6) | $(35.2) | | Net cash used for investing activities | $(29.5) | $(21.6) | $(7.9) | | Net cash provided by financing activities | $67.0 | $45.7 | $21.3 | | Net (decrease) increase in cash and cash equivalents | $(15.1) | $3.7 | $(18.8) | | Cash and cash equivalents at end of period | $32.9 | $38.1 | $(5.2) | Condensed Consolidated Statements of Equity This statement outlines the changes in total stockholders' equity over the reporting periods Consolidated Statements of Equity (As of June 30) | Metric | 2025 (Millions) | 2024 (Millions) | | :------------------------- | :-------------- | :-------------- | | Total stockholders' equity | $681.3 | $592.3 | Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements 1. Company and Basis of Presentation This note describes the company's business, operational segments, and the basis for financial statement presentation - The Manitowoc Company, Inc. is a leading provider of engineered lifting products and services, founded in 1902 and headquartered in Milwaukee, Wisconsin, designing, manufacturing, marketing, distributing, and supporting product lines including mobile hydraulic cranes, lattice-boom crawler cranes, boom trucks, and tower cranes under various brand names[19] - The Company operates through three reportable segments: Americas (North and South America), Europe and Africa (EURAF, excluding the Middle East), and Middle East and Asia Pacific (MEAP, including Asia, Australia, and the Middle East)[20] 2. Recent Accounting Changes and Pronouncements This note outlines recent accounting standard updates and their anticipated impact on the company's financial reporting - The FASB issued ASU No. 2023-09, 'Income Taxes (Topic 740): Improvements to Income Tax Disclosures,' effective for annual periods beginning after December 15, 2024, with no material impact expected on consolidated financial statements[23] - The FASB issued ASU No. 2024-03, 'Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 224-40): Disaggregation of Income Statement Expense,' effective for annual periods beginning after December 15, 2026, with the Company currently evaluating its impact[24] 3. Acquisition of Assets This note provides details on the company's recent acquisition of assets, including the purchase price allocation - Effective February 4, 2025, the Company acquired certain assets and distribution rights in Georgia, North Carolina, and South Carolina from Ring Power Corporation for $12.9 million in cash[25] Purchase Price Allocation for Asset Acquisition | Asset Acquired | Amount (Millions) | | :------------------------ | :---------------- | | Inventory | $7.2 | | Intangible assets | $2.0 | | Property, plant, and equipment | $3.7 | | Total Consideration | $12.9 | 4. Net Sales This note provides details on customer advances and contract assets related to the company's net sales recognition Customer Advances Balance (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | | :----------------------------------------- | :-------------- | :-------------- | | Balance at beginning of period | $18.0 | $19.2 | | Cash received in advance | $65.4 | $63.5 | | Revenue recognized | $(61.1) | $(64.4) | | Currency translation | $1.4 | $(0.5) | | Balance at end of period | $23.7 | $17.8 | - Contract assets, representing unbilled service work, increased to $11.1 million as of June 30, 2025, from $8.8 million as of December 31, 2024[29] 5. Fair Value of Financial Instruments This note discloses the fair value measurements of various financial instruments, categorized by valuation input levels Fair Value of Financial Instruments (As of June 30, 2025) | Instrument | Level 1 (Millions) | Level 2 (Millions) | Level 3 (Millions) | Total (Millions) | Recognized Location | | :----------------------- | :----------------- | :----------------- | :----------------- | :--------------- | :------------------------ | | FX Forward Contracts (Assets) | $— | $4.5 | $— | $4.5 | Other current assets | | Deferred Compensation Plan (Assets) | $8.8 | $— | $— | $8.8 | Other non-current assets | | FX Forward Contracts (Liabilities) | $— | $0.1 | $— | $0.1 | Accounts payable and accrued expenses | - The fair value of the $300.0 million senior secured second lien notes due October 1, 2031 (9.25% coupon) was approximately $317.3 million as of June 30, 2025, classified as Level 1[32][33] 6. Derivative Financial Instruments This note explains the company's use of derivative financial instruments, primarily FX forward contracts, for risk management - The Company uses FX Forward Contracts to manage exposure to non-functional currency transactions and transaction gains/losses, with aggregate notional amounts of $69.6 million as of June 30, 2025, down from $129.7 million as of December 31, 2024[37][38] - Net unrealized gains (losses) on FX Forward Contracts recorded in AOCI, net of income tax, were $3.1 million as of June 30, 2025, compared to $(1.7) million as of December 31, 2024[38] Net Gains (Losses) from FX Forward Contracts in P&L (Three Months Ended June 30) | Category | Recognized Location | 2025 (Millions) | 2024 (Millions) | | :------------ | :------------------ | :-------------- | :-------------- | | Designated | Cost of sales | $1.5 | $(0.4) | | Non-Designated| Other income (expense) - net | $(1.8) | $0.9 | 7. Inventories This note provides a breakdown of the company's inventory components, including raw materials, work-in-process, and finished goods Inventory Components (As of June 30, 2025 and December 31, 2024) | Component | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------- | :----------------------- | :--------------------------- | | Raw materials | $186.9 | $121.4 | | Work-in-process | $174.9 | $114.8 | | Finished goods | $420.7 | $373.2 | | Total inventories | $782.5 | $609.4 | 8. Property, Plant, and Equipment This note presents the net book value of property, plant, and equipment, including total cost and accumulated depreciation Property, Plant, and Equipment (As of June 30, 2025 and December 31, 2024) | Component | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------------------- | :----------------------- | :--------------------------- | | Total cost | $926.9 | $871.4 | | Less accumulated depreciation | $(573.8) | $(525.2) | | Property, plant, and equipment — net | $353.1 | $346.2 | 9. Goodwill and Other Intangible Assets This note provides information on goodwill and other intangible assets, including carrying amounts and impairment testing Goodwill Carrying Amount (Six Months Ended June 30, 2025) | Segment | Balance as of Dec 31, 2024 (Millions) | Foreign Currency Impact (Millions) | Balance as of June 30, 2025 (Millions) | | :----------- | :------------------------------------ | :--------------------------------- | :------------------------------------- | | Americas | $14.4 | $— | $14.4 | | MEAP | $63.4 | $1.2 | $64.6 | | Consolidated | $77.8 | $1.2 | $79.0 | Other Intangible Assets (As of June 30, 2025 and December 31, 2024) | Type of Intangible Asset | June 30, 2025 Net Book Value (Millions) | December 31, 2024 Net Book Value (Millions) | | :----------------------- | :-------------------------------------- | :------------------------------------------ | | Definite lived intangible assets | $16.2 | $15.7 | | Indefinite-lived intangible assets | $110.9 | $102.8 | | Total other intangible assets | $127.1 | $118.5 | - The Company performs annual impairment tests for goodwill and indefinite-lived intangible assets in the fourth quarter and determined no triggering event occurred during the three and six months ended June 30, 2025[45][46][47] 10. Accounts Payable and Accrued Expenses This note itemizes the components of accounts payable and accrued expenses, including trade payables and employee-related costs Accounts Payable and Accrued Expenses (As of June 30, 2025 and December 31, 2024) | Component | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :---------------------------- | :----------------------- | :--------------------------- | | Trade accounts payable | $314.0 | $205.5 | | Employee-related expenses | $49.6 | $43.2 | | Accrued vacation | $29.1 | $23.3 | | Miscellaneous accrued expenses | $76.5 | $117.4 | | Total accounts payable and accrued expenses | $469.2 | $389.4 | 11. Debt This note provides a comprehensive overview of the company's outstanding debt, including credit facilities and notes Outstanding Debt (As of June 30, 2025 and December 31, 2024) | Debt Type | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :---------------------------------------- | :----------------------- | :--------------------------- | | Borrowings under senior secured asset based revolving credit facility | $156.9 | $79.0 | | Senior secured second lien notes due 2031 | $300.0 | $300.0 | | Other debt | $18.4 | $16.4 | | Deferred financing costs | $(4.8) | $(5.2) | | Total debt | $470.5 | $390.2 | | Short-term borrowings and current portion of long-term debt | $(10.7) | $(13.1) | | Long-term debt | $459.8 | $377.1 | - The ABL Revolving Credit Facility was amended on September 18, 2024, increasing the aggregate commitment by $50.0 million to $325.0 million and extending the maturity date to September 18, 2029[52] - As of June 30, 2025, the Company was in compliance with all affirmative and negative covenants in its debt instruments, including the ABL Revolving Credit Facility and the 2031 Notes[58] 12. Accounts Receivable Factoring This note details the company's accounts receivable factoring activities and the cash proceeds generated from these sales - Cash proceeds from the factoring of accounts receivable qualifying as sales were $119.4 million for the six months ended June 30, 2025, an increase from $87.7 million for the same period in 2024[60] 13. Income Taxes This note outlines the provision or benefit for income taxes and discusses unrecognized tax benefits and recent tax legislation Provision (Benefit) for Income Taxes | Period | 2025 (Millions) | 2024 (Millions) | | :---------------------- | :-------------- | :-------------- | | Three months ended June 30 | $(0.2) | $1.6 | | Six months ended June 30 | $(2.7) | $3.5 | - Unrecognized tax benefits, excluding interest and penalties, increased to $14.9 million as of June 30, 2025, from $13.9 million as of December 31, 2024[64] - The Company is assessing the impact of the One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, which includes significant tax-related provisions with earliest effective dates in 2025[65] 14. Net Income (Loss) Per Common Share This note explains the calculation of basic and diluted net income (loss) per common share, including share counts Weighted Average Shares Outstanding (Six Months Ended June 30) | Share Type | 2025 | 2024 | | :--------------------------------------- | :----------- | :----------- | | Basic weighted average common shares outstanding | 35,363,682 | 35,316,971 | | Diluted weighted average common shares outstanding | 35,363,682 | 35,899,481 | - Due to a net loss incurred during the six months ended June 30, 2025, all equity instruments were anti-dilutive and excluded from diluted EPS calculations for that period[66] 15. Equity This note provides information on stockholders' equity, including stock repurchase authorizations and accumulated other comprehensive loss - As of June 30, 2025, the Company had $29.3 million remaining under a Board authorization to purchase up to $35.0 million of common stock[68] Accumulated Other Comprehensive Loss (AOCI) (As of June 30) | Component | 2025 (Millions) | 2024 (Millions) | | :---------------------------- | :-------------- | :-------------- | | Balance at end of period | $(64.0) | $(100.5) | 16. Stock-Based Compensation This note describes the company's stock-based compensation plans, related expenses, and awards granted - The 2025 Omnibus Incentive Plan, approved on May 6, 2025, made 1.8 million shares available for stock-based awards[73] - Stock-based compensation expense was $6.0 million for the six months ended June 30, 2025, up from $5.6 million in the prior year[78] - During the six months ended June 30, 2025, the Company granted 628,499 restricted stock units and 437,969 performance shares to employees[80][81] 17. Segments This note presents financial information by reportable segment, including net sales and operating income performance - The Company's three reportable segments are Americas, EURAF, and MEAP, with performance evaluated based on net sales and operating income[85][86] Segment Net Sales (Three Months Ended June 30) | Segment | 2025 (Millions) | 2024 (Millions) | Change (%) | | :------ | :-------------- | :-------------- | :--------- | | Americas| $323.2 | $296.7 | 8.9% | | EURAF | $152.5 | $176.2 | -13.5% | | MEAP | $63.8 | $89.2 | -28.5% | | Total | $539.5 | $562.1 | -4.0% | Segment Operating Income (Loss) (Six Months Ended June 30) | Segment | 2025 (Millions) | 2024 (Millions) | Change (Millions) | | :------ | :-------------- | :-------------- | :---------------- | | Americas| $43.8 | $53.4 | $(9.6) | | EURAF | $(25.9) | $(18.6) | $(7.3) | | MEAP | $21.2 | $17.5 | $3.7 | Net Sales by Product Type (Six Months Ended June 30) | Product Type | 2025 (Millions) | 2024 (Millions) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | | New machine sales | $688.2 | $764.7 | -10.0% | | Non-new machine sales | $322.2 | $292.5 | 10.2% | | Total net sales | $1,010.4 | $1,057.2 | -4.4% | 18. Commitments and Contingencies This note discloses the company's commitments and contingencies, including product liability reserves and legal settlements - Current and long-term product liability reserves increased to $2.1 million and $6.5 million, respectively, as of June 30, 2025, from $1.4 million and $5.0 million as of December 31, 2024[95] - On March 28, 2025, the Company paid a civil penalty of $42.6 million (plus $0.6 million interest) and is implementing an emissions mitigation project as part of a Consent Decree with the U.S. regarding alleged Clean Air Act violations[97] 19. Guarantees This note provides information on the company's guarantees, including buyback commitments and warranty reserves - Total buyback commitments outstanding increased to $31.6 million as of June 30, 2025, from $29.9 million as of December 31, 2024[99] - Warranty and other warranty related work reserves increased to $47.6 million as of June 30, 2025, from $45.3 million as of December 31, 2024[101] Warranty and Other Warranty Related Work (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | | :-------------------------------------- | :-------------- | :-------------- | | Balance at beginning of period | $45.3 | $56.8 | | Adjustments to accruals for warranties | $20.2 | $9.1 | | Settlements made | $(20.4) | $(16.9) | | Currency translation | $2.5 | $(0.8) | | Balance at end of period | $47.6 | $48.2 | 20. Employee Benefit Plans This note outlines the net periodic benefit cost for the company's U.S. and non-U.S. pension and postretirement plans Net Periodic Benefit Cost (Income) (Six Months Ended June 30, 2025) | Component | U.S. Pension Plans (Millions) | Non-U.S. Pension Plans (Millions) | Postretirement Health and Other Plans (Millions) | | :-------------------------------------- | :---------------------------- | :-------------------------------- | :----------------------------------------------- | | Service cost | $— | $0.6 | $— | | Interest cost | $2.5 | $1.2 | $0.1 | | Expected return on plan assets | $(2.2) | $(0.9) | $— | | Amortization of actuarial net (gain) loss | $0.6 | $0.2 | $(0.8) | | Net periodic benefit cost (income) | $0.9 | $1.1 | $(0.7) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial performance, condition, and results of operations for the three and six months ended June 30, 2025, compared to the prior year. It covers key financial metrics, segment performance, liquidity, and non-GAAP measures, alongside cautionary statements regarding forward-looking information and current events impacting the business Cautionary Statements Regarding Forward-Looking Information This section highlights the inherent risks and uncertainties that could cause actual results to differ from forward-looking statements - Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially, including macroeconomic conditions (inflation, interest rates, tariffs), competitor actions, changes in economic/industry conditions, geopolitical events, customer demand, backlog conversion, adverse trade policy, and high debt leverage[111][114] Current Events This section discusses recent events, including U.S. government tariffs and their potential impact on the company's operations - Starting in early 2025, the U.S. government announced reciprocal tariffs, followed by a 90-day suspension and implementation of a 10% tariff on most imports (higher for China), with non-binding trade deals announced with countries like the EU, Japan, and the UK[115] - Approximately 50% of the Company's net sales are generated in the United States, and tariffs may affect demand, raise product costs, or disrupt the supply chain, with the Company assessing the impact and mitigation measures[116] Orders and Backlog This section provides an overview of the company's order intake and total backlog, including changes and influencing factors Orders and Backlog Performance | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Change (%) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Orders | $453.9 | $428.4 | 6.0% | | | | | | | Metric | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | Change (%) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Orders | $1,064.2 | $982.5 | 8.3% | | | | | | | Metric | As of June 30, 2025 (Millions) | As of December 31, 2024 (Millions) | Change (%) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Total backlog | $729.3 | $650.2 | 12.2% | - The increase in orders was primarily driven by higher demand in the Americas segment and for tower product offerings in the EURAF segment, favorably impacted by foreign currency exchange rates by $8.6 million (3 months) and $2.7 million (6 months)[118][119] - Total backlog as of June 30, 2025, increased 12.2% from December 31, 2024, but decreased 12.8% from June 30, 2024, with foreign currency exchange rates favorably impacting backlog by $26.6 million (vs. Dec 31, 2024) and $20.8 million (vs. June 30, 2024)[120] Results of Operations For The Three and Six Months Ended June 30, 2025 and 2024 This section analyzes the company's financial performance for the three and six months ended June 30, 2025 and 2024 Net Sales This section analyzes the drivers behind changes in consolidated net sales for the reported periods - Consolidated net sales decreased 4.0% to $539.5 million for the three months ended June 30, 2025, primarily due to lower new machine sales in EURAF (mobile product line) and MEAP, partially offset by higher new machine sales in Americas and higher non-new machine sales[123] - Consolidated net sales decreased 4.4% to $1,010.4 million for the six months ended June 30, 2025, driven by lower new machine sales in EURAF (mobile), MEAP, and Americas, partially offset by higher tower crane sales in EURAF and higher non-new machine sales[124][125] Gross Profit This section examines the company's gross profit and gross profit percentage, highlighting factors influencing changes - Gross profit for the three months ended June 30, 2025, remained flat at $99.0 million, with the gross profit percentage increasing to 18.4% from 17.7% in 2024, primarily due to favorable product mix offsetting lower sales and absorbed costs[126][127] - Gross profit for the six months ended June 30, 2025, decreased 1.8% to $188.8 million, while the gross profit percentage increased to 18.7% from 18.2% in 2024, driven by similar factors as the three-month period[128][129] Engineering, Selling, and Administrative Expenses This section details the changes in engineering, selling, and administrative expenses and their primary causes - Engineering, selling, and administrative expenses increased 4.4% to $87.4 million for the three months ended June 30, 2025, and 6.6% to $170.3 million for the six months, primarily due to costs for the triennial bauma trade show, higher employee-related costs, and new product development costs, partially offset by a prior-year EPA legal charge[130][131] Interest Expense This section analyzes the company's interest expense, noting the impact of interest rates on borrowings - Interest expense decreased to $9.2 million for the three months ended June 30, 2025 (from $9.6 million), and to $17.9 million for the six months (from $18.8 million), primarily due to lower interest rates on ABL revolving credit facility borrowings[132][133] Other Income (Expense) - Net This section reviews the components of other income (expense) - net, including currency gains/losses and pension costs - Other income was $1.0 million for the three months ended June 30, 2025 (vs. $0.3 million in 2024), driven by currency gains, partially offset by pension costs and EPA settlement interest[134] - Other income (expense) - net was $(4.0) million for the six months ended June 30, 2025 (vs. $1.0 million income in 2024), primarily due to currency loss, pension costs, and EPA settlement interest[135] Provision (Benefit) for Income Taxes This section explains the provision or benefit for income taxes, considering jurisdictional mix and pre-tax income/loss - The Company recorded an income tax benefit of $0.2 million for the three months and $2.7 million for the six months ended June 30, 2025, compared to provisions of $1.6 million and $3.5 million, respectively, in 2024, due to changes in jurisdictional mix and a year-to-date loss before income taxes[136] Segment Operating Performance This section provides a detailed analysis of net sales and operating income for each reportable segment Segment Net Sales and Operating Income (Three Months Ended June 30) | Segment | Net Sales 2025 (Millions) | Net Sales 2024 (Millions) | Net Sales Change (%) | Operating Income (Loss) 2025 (Millions) | Operating Income (Loss) 2024 (Millions) | Operating Income (Loss) Change (%) | | :------- | :------------------------ | :------------------------ | :------------------- | :-------------------------------------- | :-------------------------------------- | :--------------------------------- | | Americas | $323.2 | $296.7 | 8.9% | $26.1 | $23.9 | 9.2% | | EURAF | $152.5 | $176.2 | (13.5)% | $(14.6) | $(6.8) | * | | MEAP | $63.8 | $89.2 | (28.5)% | $9.8 | $9.3 | 5.4% | Segment Net Sales and Operating Income (Six Months Ended June 30) | Segment | Net Sales 2025 (Millions) | Net Sales 2024 (Millions) | Net Sales Change (%) | Operating Income (Loss) 2025 (Millions) | Operating Income (Loss) 2024 (Millions) | Operating Income (Loss) Change (%) | | :------- | :------------------------ | :------------------------ | :------------------- | :-------------------------------------- | :-------------------------------------- | :--------------------------------- | | Americas | $582.5 | $579.9 | 0.4% | $43.8 | $53.4 | (18.0)% | | EURAF | $298.1 | $319.2 | (6.6)% | $(25.9) | $(18.6) | * | | MEAP | $129.8 | $158.1 | (17.9)% | $21.2 | $17.5 | 21.1% | - Americas net sales increased 8.9% for Q2 2025 due to higher new machine sales (favorable product mix) and non-new machine sales (used cranes), with operating income increasing 9.2% due to higher sales and favorable product mix, despite lower absorbed costs[139][140] - EURAF net sales decreased 13.5% for Q2 2025 due to lower mobile crane sales, partially offset by higher tower crane and non-new machine sales, resulting in an operating loss increase of $7.8 million due to lower net sales and higher engineering, selling, and administrative expenses[143][144] - MEAP net sales decreased 28.5% for Q2 2025 due to lower new machine sales (unfavorable product mix) and non-new machine sales, with operating income remaining flat due to product mix[147][148] Financial Condition This section assesses the company's financial position, including cash flows, liquidity, capital resources, and debt structure Cash Flows This section analyzes the company's cash flows from operating, investing, and financing activities Summary of Cash Flows (Six Months Ended June 30) | Cash Flow Activity | 2025 (Millions) | 2024 (Millions) | Dollar Change (Millions) | | :---------------------------------- | :-------------- | :-------------- | :----------------------- | | Net cash used for operating activities | $(54.8) | $(19.6) | $(35.2) | | Net cash used for investing activities | $(29.5) | $(21.6) | $(7.9) | | Net cash provided by financing activities | $67.0 | $45.7 | $21.3 | | Cash and cash equivalents | $32.9 | $38.1 | $(5.2) | - Net cash used for operating activities increased by $35.2 million, primarily due to lower net income (adjusted for non-cash items) and $24.5 million higher cash outflows related to net working capital, driven by increases in accounts receivable, other assets, and inventory[151] - Net cash used for investing activities increased by $7.9 million, mainly due to $12.9 million for asset acquisition from Ring Power Corporation and lower proceeds from asset sales, partially offset by lower capital expenditures[152][153] - Net cash provided by financing activities increased by $21.3 million, primarily due to $24.5 million of additional net borrowings under the revolving credit facility[154] Liquidity and Capital Resources This section evaluates the company's liquidity position and its ability to meet short-term and long-term financial obligations Liquidity Position (As of June 30, 2025 and December 31, 2024) | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------------------- | :----------------------- | :--------------------------- | | Cash and cash equivalents | $32.9 | $48.0 | | Revolver borrowing capacity | $325.0 | $325.0 | | Other debt availability | $47.8 | $42.4 | | Less: Borrowings on revolver | $(156.9) | $(79.0) | | Less: Borrowings on other debt | $(7.8) | $(12.1) | | Less: Outstanding letters of credit | $(3.4) | $(3.4) | | Total liquidity | $237.6 | $320.9 | - The Company believes its liquidity and expected cash flows from operations are sufficient to meet operational needs for the next twelve months[155] - The ABL Revolving Credit Facility has a maximum availability of $325.0 million, with $100.0 million available to the German subsidiary, and matures on September 18, 2029[157] Debt This section provides an overview of the company's outstanding debt and compliance with debt covenants Outstanding Debt (As of June 30, 2025 and December 31, 2024) | Debt Type | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :---------------------------------------- | :----------------------- | :--------------------------- | | Borrowings under senior secured asset based revolving credit facility | $156.9 | $79.0 | | Senior secured second lien notes due 2031 | $300.0 | $300.0 | | Other debt | $18.4 | $16.4 | | Deferred financing costs | $(4.8) | $(5.2) | | Total debt | $470.5 | $390.2 | | Short-term borrowings and current portion of long-term debt | $(10.7) | $(13.1) | | Long-term debt | $459.8 | $377.1 | - As of June 30, 2025, the Company was in compliance with all debt covenants and expects to remain compliant for the subsequent twelve months[160] Non-GAAP Measures This section presents and reconciles non-GAAP financial measures, including Adjusted ROIC, EBITDA, and Free Cash Flows Adjusted ROIC This section defines and calculates Adjusted Return on Invested Capital (ROIC), a key non-GAAP performance metric - Adjusted ROIC, a non-GAAP measure, was 4.2% as of June 30, 2025, calculated by dividing Adjusted NOPAT for the trailing twelve months by the five-quarter average of invested capital[162][163][164] Adjusted NOPAT (Trailing Twelve Months Ended June 30, 2025) | Metric | Amount (Millions) | | :-------------------------- | :---------------- | | Operating income | $38.8 | | Amortization of intangible assets | $3.0 | | Restructuring expense | $3.5 | | Other non-recurring items - net | $3.6 | | Adjusted operating income | $48.9 | | Provision for income taxes | $(7.3) | | Adjusted NOPAT | $41.6 | Invested Capital (5-Quarter Average Ended June 30, 2025) | Metric | Amount (Millions) | | :-------------------------- | :---------------- | | Net total assets | $634.6 | | Cash and cash equivalents | $(36.7) | | Short-term borrowings and current portion of long-term debt | $20.7 | | Long-term debt | $410.3 | | Income tax assets - net | $(43.8) | | Invested capital | $985.1 | EBITDA and Adjusted EBITDA This section defines and reconciles EBITDA and Adjusted EBITDA, providing insights into operational profitability - EBITDA is defined as net income (loss) before interest, taxes, depreciation, and amortization, with Adjusted EBITDA further adjusting for restructuring expense, other income (expense) - net, and certain other non-recurring items[167] EBITDA and Adjusted EBITDA (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | | :-------------------------- | :-------------- | :-------------- | | Net income (loss) | $(4.8) | $6.1 | | Interest expense and amortization of deferred financing fees | $18.6 | $19.5 | | Provision (benefit) for income taxes | $(2.7) | $3.5 | | Depreciation expense | $29.5 | $29.3 | | Amortization of intangible assets | $1.6 | $1.5 | | EBITDA | $42.2 | $59.9 | | Restructuring expense | $1.8 | $2.9 | | Other non-recurring items - net | $— | $5.5 | | Other (income) expense - net | $4.0 | $(1.0) | | Adjusted EBITDA | $48.0 | $67.3 | | Adjusted EBITDA margin percentage | 4.8% | 6.4% | Free Cash Flows This section defines and calculates free cash flows, indicating the cash available after capital expenditures - Free cash flows are defined as net cash used for operating activities less cash outflow from capital expenditures[170] Free Cash Flows (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | | :-------------------------------- | :-------------- | :-------------- | | Net cash used for operating activities | $(54.8) | $(19.6) | | Capital expenditures | $(16.8) | $(25.1) | | Free cash flows | $(71.6) | $(44.7) | Critical Accounting Policies This section confirms that there have been no material changes to the company's critical accounting policies - The Company's critical accounting policies have not materially changed since the 2024 Annual Report on Form 10-K[172] Item 3. Quantitative and Qualitative Disclosure about Market Risk This section states that there have been no material changes to the Company's market risk disclosures 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[173] Item 4. Controls and Procedures This section confirms the effectiveness of the Company's disclosure controls and procedures and states that there have been no material changes to its internal control over financial reporting - The Company's management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025[174] - No changes have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during the period covered by this report[175] PART II. OTHER INFORMATION This section includes updates on risk factors, other relevant information, and a comprehensive list of exhibits filed with the report Item 1A. Risk Factors This section states that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K - There have been no material changes to the risk factors previously disclosed in Part I, Item 1A, 'Risk Factors,' in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[178] Item 5. Other Information This section reports on Rule 10b5-1 trading arrangements by directors and Section 16 officers - No director or Section 16 officer adopted a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[179] Item 6. Exhibits This section lists the exhibits filed or furnished with the Quarterly Report on Form 10-Q List of Exhibits | Exhibit No. | Description | Filed/Furnished Herewith | | :---------- | :------------------------------------------------------------------------------------------------------ | :----------------------- | | 31 | Rule 13a - 14(a)/15d - 14(a) Certifications | X | | 32.1 | Certification of CEO pursuant to 18 U.S.C. Section 1350 | X | | 32.2 | Certification of CFO pursuant to 18 U.S.C. Section 1350 | X | | 101.INS | Inline XBRL Instance Document | X | | 101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | | 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | | 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | | 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | X | | 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | X |