Core Insights - Manitowoc reported significant earnings and revenue misses in Q2 2025, with Non-GAAP EPS at $0.08 compared to expectations of $0.18, reflecting ongoing market and operational pressures [1][5] - Adjusted EBITDA decreased to $26.3 million from $36.0 million year-over-year, indicating margin compression and cash flow challenges despite a 6.0% rise in new orders [1][5][6] Financial Performance - Non-GAAP EPS fell 68% year-over-year from Q2 2024, missing estimates by $0.10 [2][5] - Revenue decreased by 4.0% year-over-year to $539.5 million, falling short of analyst estimates by 7.8% [2][5] - Adjusted EBITDA dropped 26.9% from the previous year [2][5] - Free cash flow turned negative at $(73.7 million), compared to $(1.9 million) in Q2 2024 [2][5] Business Overview - Manitowoc designs and manufactures a variety of lifting equipment for the global construction industry, including mobile cranes, tower cranes, and boom trucks [3] - The company emphasizes aftermarket services for crane maintenance and technical support [3] Geographic Segmentation - Manitowoc operates in three key geographic segments: the Americas, Europe and Africa (EURAF), and the Middle East and Asia Pacific (MEAP) [4] - The company focuses on operational efficiency, product innovation, and expanding aftermarket services to stabilize revenue [4] Market Dynamics - Despite revenue declines, new orders increased by 6.0% to $453.9 million, with notable strength in the European tower crane market due to government infrastructure spending [6] - The order backlog decreased from $797.8 million at the end of Q1 to $729.3 million at the end of Q2 2025, indicating a cautious outlook [6] Product Development - The company continues to focus on enhancing product performance, with positive feedback on hybrid all-terrain cranes [7] - Aftermarket services grew by 9.7% year-over-year to $161.6 million, providing a stabilizing factor for revenue [7] Operational Challenges - Inventory increased by 28% since year-end, reaching $782.5 million, contributing to negative cash flow [9] - Management expects to finish fiscal 2025 at the low end of guidance, with ongoing profitability challenges highlighted by an adjusted return on invested capital of 4.2% [10] Future Outlook - Key areas to monitor include the conversion of backlog into revenue, tariff mitigation impacts, inventory reduction efforts, and growth in aftermarket services [11]

Financial Data and Key Metrics Changes - The company generated $471 million in revenue, a decrease of 5% year over year, while adjusted EBITDA was $22 million, down 31% year over year [4][20] - Orders totaled $610 million, representing a 10% increase from the previous year, with a backlog of $798 million [19] - Non-new machine sales reached $161 million, up 11% year over year, contributing to a trailing twelve months total of $645 million [20][34] Business Line Data and Key Metrics Changes - The Americas drove higher order intake, while European tower crane orders increased by 68% year over year, indicating a potential market recovery [19] - Non-new machine sales have shown significant growth, with a 70% increase over the trailing twelve months [34] Market Data and Key Metrics Changes - In North America, orders through third-party dealer channels increased by 35% year over year, reflecting a healthy industry environment [12] - European mobile crane orders were lower year over year but showed sequential improvement, while tower crane orders surged nearly 70% year over year [13][14] - The Middle East experienced a slight decline in orders, but deal activity remains strong, particularly in Saudi Arabia and the UAE [14][15] Company Strategy and Development Direction - The company is focused on its "Cranes plus 50" strategy, aiming to enhance aftermarket services and reduce cyclicality [28][35] - Investments in new products and a rental fleet are being made to better serve customers and capitalize on market recovery [30] - The company is actively managing tariff impacts and exploring alternative sourcing to mitigate costs [6][26] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand in North America and noted strong customer engagement in Europe following recent infrastructure funding announcements [12][13] - The company is maintaining its full-year guidance despite tariff uncertainties, projecting net sales between $2.175 billion and $2.275 billion [26] Other Important Information - The company has integrated AI into its improvement processes, resulting in significant labor savings [11] - The company is facing approximately $60 million in incremental tariff costs, with plans to mitigate 80% to 90% of these costs [6][26] Q&A Session Summary Question: Can you unpack the mitigation to the tariff numbers shared? - Management indicated that mitigation strategies include price increases, alternative sourcing, and vendor cooperation, but the situation remains fluid [38][40] Question: What proportion of the tariff impact is from China? - Management noted that the tariff impact is complex and includes various factors, making it difficult to provide a clear breakdown [41] Question: What is driving the increased demand in Europe? - Management attributed the demand increase to low dealer inventory and overall market recovery, though caution remains regarding economic conditions in certain regions [43][45] Question: Are higher costs for raw materials like steel and aluminum factored into the tariff impact? - Yes, higher costs for raw materials are part of the estimated tariff impact [52] Question: What is the current state of the U.S. non-residential construction market? - Management reported strong utilization and ongoing large projects, contributing to positive momentum in the market [54][55] Question: Can you elaborate on the growth in non-new machine sales? - Growth in non-new machine sales is broad-based, with strong performance in used machines and European tower crane business [57][58]

Financial Data and Key Metrics Changes - The company generated $471 million in revenue, a decrease of 5% year over year, while adjusted EBITDA was $22 million, down 31% year over year, resulting in an adjusted EBITDA margin of 4.6% [4][18] - Orders totaled $610 million, an increase of 10% from the previous year, with a backlog of $798 million at the end of the quarter [4][17] - Non-new machine sales reached $161 million, up 11% year over year, contributing to a trailing twelve months total of $645 million, marking a record [4][18] Business Line Data and Key Metrics Changes - The Americas drove higher order intake, while European tower crane orders increased nearly 70% year over year, indicating a recovery in that segment [17][18] - Non-new machine sales have shown strong performance, particularly in the European tower crane business, which has been a focus of growth [18][52] Market Data and Key Metrics Changes - In North America, orders through third-party dealer channels increased by 35% year over year, reflecting a healthy rental market [11] - European mobile crane machine orders were lower year over year but showed sequential improvement, with significant growth in tower crane orders [12][13] - The Middle East experienced a slight decline in orders, but deal activity remains robust, particularly in Saudi Arabia and the UAE [13][14] Company Strategy and Development Direction - The company is focused on its "Cranes plus 50" strategy, which aims to enhance aftermarket services and reduce cyclicality by transitioning to a customer-focused approach [26][32] - Investments in new products and a rental fleet are being made to better serve customers and capitalize on market recovery [27][28] - The company is actively managing tariff impacts and has plans to mitigate approximately 80% to 90% of the expected $60 million in tariff costs [6][24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand in North America and noted positive developments in Europe following the establishment of a significant infrastructure fund [11][12] - The company is navigating a challenging operating environment due to tariffs and global trade dynamics but remains committed to its strategic initiatives [26][32] - Management highlighted the importance of customer engagement and feedback in driving product improvements and service offerings [29][30] Other Important Information - The company has integrated AI into its improvement processes, resulting in significant labor savings and efficiency gains [10] - The company has maintained a strong liquidity position, with total liquidity of $307 million as of March 31 [20] Q&A Session Summary Question: Can you unpack the mitigation to the tariff numbers shared? - Management indicated that mitigations include price increases, alternative sourcing, and vendor cooperation, emphasizing that the situation is expected to be short-term [35][36] Question: What proportion of the $45 million tariff cost is attributed to China? - Management noted that the breakdown is complex, involving various tariffs and sourcing strategies, making it difficult to provide a clear percentage [39][40] Question: What is driving the increased demand in Europe? - Management attributed the recovery to low dealer inventory and increased utilization, although they cautioned that the market is still not at peak levels [41][43] Question: Are higher costs for raw materials like steel and aluminum factored into the tariff impact? - Yes, higher costs for raw materials are included in the estimated $45 million tariff cost impact [48] Question: How is the backlog being managed in light of tariffs? - Management plans to use surcharges to address the backlog as tariffs impact imported units [49] Question: What is the current momentum in the U.S. non-residential construction market? - Management noted strong utilization and ongoing large projects, although they acknowledged variability across different segments [50][51] Question: Can you elaborate on the growth in non-new machine sales? - Growth is broad-based, with strong performance in used machines and European tower cranes, supported by expanding service capabilities [52][54]