Transcript • May. 6, 2026 2:00 PM • The Manitowoc Company, Inc. (MTW)
Transcript
May. 6, 2026 2:00 PM
The Manitowoc Company, Inc. (MTW)
Brian (CFO): up $7 million, with foreign currency accounting for $3 million of the increase. The remaining increase was driven primarily by the ConExpo trade show and inflation from other employee-related costs. Adjusted EBITDA on the quarter was $20 million, down $2 million, or 10% year-over-year. As expected, tariffs impacted our results by $2 million. Please turn to slide 7. Networking capital ended the quarter at $536 million, an increase of $47 million year over year, driven primarily by inventory. The higher year over year inventory was driven by $26 million from foreign currency, $15 million from tariffs, and $10 million in prototypes, and was partially offset by operational improvements. Moving to cash flow, operating activities provided $27 million of cash during the quarter. Capital expenditures were $8 million, including $6 million for our rental fleet, resulting in free cash flow of $19 million. This was a $17 million improvement year over year, driven by increased collections on accounts receivables. We ended the quarter with $316 million in liquidity, and our net leverage ratio was 3.1 times. In April, S&P upgraded our corporate credit rating from B to B+. This upgrade underscores the progress we are making in strengthening our financial profile through the cycle, while investing in long-term growth through our Cranes Plus 50 strategy. Looking ahead, first quarter results didn't change our expectations for the full year, and as such, we are affirming our previously issued guidance of net sales of $2.25 billion to $2.35 billion and adjusted EBITDA of $125 million to $150 million. With that, I'll turn the call back to Aaron.
Aaron (President & CEO): Thank you, Brian. Please turn to slide eight. Standing back and looking at the forest through the trees, I think there are many reasons to be optimistic. Number one, Europe is on the rebound. For sure, towers has rebounded more aggressively than mobiles, and there's still a big need for residential housing and power generation. Number two, in the Middle East, all things considered, folks are pretty optimistic to get back on track. In normal times, all construction would have dried up overnight with such regional conflict. Number three, in Asia, our strongest markets are pumping even in the face of weaker currencies. Number four, in LATAM, copper is traded above $6 per pound. With several new governments in the region, I believe we'll start to see more investments in brownfield and greenfield mining projects. Number five, in the U.S., although fleet ages continue to increase, customers are begrudgingly making purchases. Data centers continue to expand rapidly, and there is a strong need for additional power generation and transmission infrastructure. And finally, number six, the success of our Cranes plus 50 strategy is increasingly helping us weather the economic cycle and positioning us for a higher margin profile in the long term. Of course, there is still a lot of uncertainty in the market, but I believe that we are starting to see light at the end of the tunnel. Keep in mind, we've been living in this mode essentially since 2020. There's plenty of pent-up ambition from folks to renew and expand their businesses, which is why I believe that the markets have held up steady. With that, operator, please open the line for questions.
Operator: Yes, thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If any time your question has been addressed and you would like to withdraw it, please press star then two. This time we will pause momentarily to assemble the roster. And the first question comes from Jerry Reddish from Wells Fargo. Good morning, Jerry.
Kevin: Good morning. This is Kevin on for Jerry. Just had a question on the changing tariff dynamics as it relates to your outlook. Would it be helpful to get more color on that, maybe bifurcating between impacts from the IEPA overturn and the new Section 232 ruling?
Brian (CFO): So thanks, Kevin. So a lot is going on with the tariff landscape, as you can imagine. I'll start by saying that the net go forward impact of what is in place today is in line with what we thought coming into the year. So no real changes to our expectations based on those changes. With that said, there's still uncertainty regarding what the Section 301 country by country tariffs will be and what net effect they'll have on us versus the Section 122 current tariffs. Related to IEPA, so we did file our refund through the CAPE process. So we did pay approximately $25 million in IEPA. So we're in a wait and see mode as far as that process goes. But additionally, you'll see in our queue, we voluntarily submitted a prior disclosure to customs related to potential errors in our methodology in calculating the 232 steel and steel derivative tariffs. This will allow us to review our calculations and determine if we had any adjustments required. To give some perspective, we paid approximately $18 million prior to the April change in the 232 tariffs.
Kevin: Got it. Very helpful. And then given that 2Q is typically a seasonally strong quarter for both a net sales and margin perspective, how should we think about performance versus normal seasonality? Any one-time impacts we should be thinking about from 1Q?
Brian (CFO): Yeah, and I said in the prepared remarks that we still, from a comp standpoint, the second half is going to look better just because of the impact of the tariffs. They really hit us more in the second half than the first half. With that said, I think we talked about restructuring in our plan, and that's still in place. Again, that's going to affect us more. favorably in the second half. So, you know, I think Q2 will be better than Q1, but I think the second half is going to be better than the first half.
Kevin: Understood. Thank you. That's all I have for questions.
Investor Relations: Thanks, Kevin. We received several calls this morning, for this morning, and I'd like to read them to you. The first question that I received online was, could you provide more color on these lifting accessories as part of your Cranes Plus 50 strategy?
Aaron (President & CEO): Yeah, so the analogy that I use with our team internally is that the crane business is a lot like a restaurant. When you think about the restaurant, it's the steak that brings us all to the restaurant. It's that main platter. But the reality is the restaurant is living off of the appetizers, the desserts, and the wines. And I think that the crane business is exactly the same as that. I mean, obviously, you've got to have a great grain to be in the lifting business, but there's a lot of accessories that go around that product and really add value to our business and to our customers. And, you know, I think what really brings it all home is great service. And a great example that recently we got an order in France for seven tower cranes. That was for six and a half million euros. But on the back of that, the sales team was able to add the commissioning and dismantling services for 900,000 and then several accessories for a total of 300,000. So on top of your normal crane order, they added the anti-intrusion panels, lighting, cameras, anti-collision software, aircraft warning systems, and lifts. So I think to me that's a great example of what the team can add when they really start to think outside of the box and have a bigger view of the customer and how we service those customers. So hopefully that's a little color that helps.
Investor Relations: Thanks. We received another email. What are your orders in April 2021?
Brian (CFO): Yeah, so Aaron mentioned that the orders were strong. We're still rolling up the numbers, but we expect between $225 and $250 million of orders in April, which is good, a little bit higher than the run rate we saw in Q1. Okay.
Investor Relations: I just received this email. You seem more optimistic on this call. How do we think about the full year guidance?
Aaron (President & CEO): Yeah, so we reaffirmed our guidance, but, you know, you look at it, orders have been strong. April, as Brian just said, is looking good. backlog, strong dealer inventories on the low end in the United States. And we're really starting to see some momentum in places like South Korea. So I think there's a lot of optimism out there, a lot of opportunity. I think the big question mark is just how the Strait of Hormuz situation plays out because we still have plenty of orders that need to make their way into the Middle East through that Strait. And as of right now, it's shut down. So I think there's some good opportunities, but still there's some uncertainty there in terms of our ability to execute within the year, depending on how that situation plays out.
Investor Relations: I received another email, and I'll just read it to you. How's the implementation of the Manitowoc Lean Practices impacting the aftermarket business?
Aaron (President & CEO): Yeah, so traditionally we're manufacturing folks, so we're still sort of figuring it out. And I think we're in the early innings, but we're starting to see some good gains. I think when you look at what we did in terms of our new hires of field service folks during the quarter, that's a good example of how we're gaining. So we continue to sort of tweak our approach to recruiting and how we manage each organization. I think we've It looks like we've found the right formula. I think that's a real success of us trying to continuously do a better job and be more effective at it. We got some good Kaizens going this year. They're more than just sort of the weak Kaizen. It'll take us a few weeks to work through those. We do pre-delivery inspections at our dealerships. We've never really gotten good feedback. There's a lot of fixes that happen that people just don't report. So we build a system around that to start to get feedback. closer to the assemblers and shading. I think that's going to yield good results for us. In our Jeffersonville distribution center, this is where we typically ship out parts, but there's a lot of kits that go with encore work and some bigger projects. I can best describe that as a terrible IKEA project at the moment. So a lot of work for us to do and improve in terms of the kitting, because when we do that, that's going to be a significant productivity gain at our service centers when they're doing that work because it's hard to figure out all the different nuts and bolts and parts that are in some of these boxes. So I think that's great. And a big shout out to our team in Chesapeake. Megan Gowder, she's done a fantastic job. She was a Manitowoc Way winner last year for improvements. And in the first quarter, she put forward an improvement around using QR codes to manage TPM on forklifts. So I just love the amount of creativity we have in those locations. To me, the big challenge and why I see we're in the early innings is just around how we collaborate and we share all these lessons learned. So, you know, it's a lot of cats to herd in all these different locations, but we're gaining speed. So I'm really looking forward to what we're able to do as we move forward.
Investor Relations: Thank you. Those are the questions that we received in the queue. Operator, any other questions in the queue?
Operator: No, sir. There is nothing at present.
Investor Relations: Okay. Very well. Please note that our replay of our first quarter 2026 earnings call will be available later this morning by accessing the investor relations section of our website at manitowoc.com. Thank you, everyone, for joining us today and for your continued interest in the Manitowoc Company. We look forward to speaking with you again next quarter.
Operator: Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.
