Manitowoc(US:MTW)2021-11-04 19:09Financial Data and Key Metrics Changes - Third quarter orders totaled $535 million, an increase of $145 million, or 37%, compared to the same period last year [20] - Net sales in the third quarter were $405 million, an increase of $49 million or 14% from a year ago, despite being negatively impacted by approximately 16% due to supply chain issues [22] - Adjusted EBITDA for the third quarter was $20 million, a decrease of approximately $5 million year-over-year, with an adjusted EBITDA margin of 4.9%, down 210 basis points from the prior year [23][24] - GAAP diluted net loss per share was $0.01, while adjusted diluted earnings per share were $0.06, declining by $0.04 from the prior year [25] Business Line Data and Key Metrics Changes - The acquisition of Aspen Equipment and the H&E crane business was finalized for approximately $180 million, with an all-in EBITDA multiple of roughly six times [12] - The backlog increased to $891 million, a 92% increase over the prior year, with over 50% scheduled to ship within the year [21] Market Data and Key Metrics Changes - North America dealer inventory levels are in line with current demand, while Europe is seeing recovery in all-terrain products and elevated levels in the tower crane business [14] - In Asia, while China is softening, other markets like South Korea and Australia remain strong, although a moderate slowdown in orders was noted in September and October [15] Company Strategy and Development Direction - The company is focused on integrating recent acquisitions and maintaining a disciplined approach to its North American aftermarket strategy through organic and inorganic growth opportunities [37] - The European tower crane rental fleet strategy has progressed, doubling the size of the rental fleet and maintaining high asset utilization rates [32] - The company aims to transition from a low-margin crane manufacturer to a customer-driven company focused on aftermarket services [39] Management's Comments on Operating Environment and Future Outlook - Management expressed pride in the team's execution during the quarter despite financial results not reflecting overall progress due to supply chain and inflationary challenges [19] - Concerns were raised about ongoing supply chain issues, transportation, inflation, and labor constraints impacting future performance [30] - The company remains optimistic about the North American market, citing positive sentiment regarding infrastructure programs and stable oil prices [70] Other Important Information - The company generated $18 million of cash from operating activities in the quarter, compared to $28 million in the prior year, with a cash balance of $222 million at the end of the quarter [25][26] - Full-year guidance was updated to reflect revenue of approximately $1.725 to $1.775 billion and adjusted EBITDA of approximately $100 million to $110 million [27] Q&A Session Summary Question: Can you provide details on the cadence of your pricing actions this year? - Management indicated that commodity pricing has flattened out, and price increases have been implemented three to four times over the last six months, with current orders being matched with locked-in costs [42] Question: How does the M&A pipeline look today? - Management feels positive about the M&A pipeline but is focused on integrating recent acquisitions before pursuing new ones [44] Question: Can you discuss the pricing mechanisms and potential margin expansion? - Management noted that while steel prices have started to roll over, it is too early to determine how sticky the price increases will be [49] Question: What is the cadence of orders and outlook for North America? - Management observed that order intake was strong ahead of price increases, but September and October saw lighter orders, with a need to monitor the situation in the coming months [63]