The Manitowoc Company Inc. has reported first-quarter 2017 net sales of $305.8 million versus $427.4 million in the comparable period in 2016.
On a GAAP basis, the company reported a net loss of ($36.0) million, or ($0.26) per diluted share, in the first-quarter 2017 versus a net loss of ($195.9) million, or ($1.43) per diluted share, in the first-quarter of 2016. The company’s loss from continuing operations in the first-quarter 2017 and 2016 was ($36.0) million and ($192.7) million, respectively.
Non-GAAP adjusted net loss from continuing operations was ($24.2) million, or ($0.17) per diluted share, in the first-quarter 2017 versus non-GAAP adjusted net loss from continuing operations of ($7.6) million, or ($0.05) per diluted share, in the first-quarter 2016.
“In the first-quarter, we were pleased by the strong customer reception of our new products, many of which were highlighted at CONEXPO. Nearly half of our equipment orders in the quarter were for products introduced since becoming a stand-alone crane company last year, which drove year-over-year and sequential orders up by 17% and 40%, respectively. Although the market has not shown signs of a sustained recovery, we are encouraged by the increased orders we booked in the quarter, and at this time reiterating our full-year financial guidance,” comments Barry L. Pennypacker, President and Chief Executive Officer of The Manitowoc Company, Inc.
“Our first quarter revenue was negatively impacted by the low level of backlog entering 2017, mainly due to historically low levels of crawler crane demand. In addition, our Mobile crane business remains soft in the Americas and the Middle East as a result of continued low rental rates, weakness in used equipment prices and low oil prices, notwithstanding the increased activity in some of the American shale basins. Our Tower crane business performed in line with our expectations, reflecting market share gains in key product lines,” says Pennypacker.
“Despite the challenging market conditions, we remain focused on the things we can control. The relocation of our crawler crane production continues to proceed as planned; on time and within budget. Through judicious working capital management, we delivered improved cash flow from operational activities versus last year and ended the quarter with no outstanding borrowings on our ABL credit facility. This was mainly attributable to utilizing the principles of The Manitowoc Way throughout the organization. Our overall long-term objectives remain unchanged, that is targeting double-digit operating margins by 2020, and being a market leader in lifting solutions,” concludes Pennypacker.
Financial Results
First quarter 2017 net sales were $305.8 million versus $427.4 million in the first-quarter 2016. Approximately half of the year-over-year decline was attributable to lower crawler crane shipments, with the remaining decline primarily due to lower sales in the Americas, partly offset by increases in Europe from strength in residential and commercial construction trends and new product introductions. Changes in foreign currency rates negatively impacted revenue by $6.4 million for the current quarter.
GAAP operating income (loss) for the first-quarter 2017 was ($23.7) million, compared to income of $0.8 million in the first quarter 2016. The first quarter 2017 GAAP operating loss includes $11.7 million of restructuring costs mainly related to plant relocation and severance expenses. Non-GAAP Adjusted EBITDA for the first-quarter 2017 was ($0.8) million compared to Non-GAAP Adjusted EBITDA of $19.5 million in the same period last year.
Backlog totaled $506.3 million at March 31, 2017, up from the fourth quarter 2016 backlog of $323.8 million. The first quarter book to bill ratio of 1.6 was the first quarter since the first quarter 2015 with a book to bill ratio in excess of 1.0.
Cash Flow
Net cash used for operating activities of continuing operations in the first quarter 2017 was ($32.5) million, compared to ($163.4) million from first-quarter 2016. First-quarter capital expenditures totaled $3.8 million as compared to $10.9 million in the first quarter 2016.
The company’s cash totaled $36.1 million at March 31, 2017, a decrease of $33.8 million from the end of the fourth-quarter 2016. At the end of the first quarter, and consistent with December 31, 2016, the company had zero borrowings on its ABL revolver. The decrease of $33.8 million of cash during the quarter was mainly attributable to restructuring and other benefit payments, as well as the semi-annual interest payment on the company’s long-term debt.
Full-Year 2017 Guidance
Manitowoc’s 2017 financial guidance for the full year remains unchanged, and the company is now providing guidance for income tax expense as:
- Revenue – down approximately 8-10% year-over-year;
- Adjusted EBITDA – approximately $41 to $59 million;
- Depreciation – approximately $40 to $45 million;
- Capital expenditures – approximately $30 million; and
- Income tax expense – approximately $7 to $10 million.
The company provides guidance on a non-GAAP basis as there is uncertainty in the timing and magnitude of future charges that would be included in the reported GAAP results.
