Market Overview

The Manitowoc Company Reports Second-Quarter 2018 Financial Results

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Orders grow 14% year-over-year to $430.8 million; GAAP Operating
Income increased by 103% year-over-year; Updates 2018 guidance

The Manitowoc Company, Inc. (NYSE:MTW), a leading global manufacturer
of cranes and lifting solutions, today reported second-quarter net sales
of $495.3 million and diluted EPS ("DEPS") on a GAAP basis of $0.27 and
$0.40 on an adjusted basis.

Second-quarter orders of $430.8 million were up 14% from the comparable
period in 2017. Backlog totaled $692.1 million at June 30, 2018, up 41%
from the second-quarter 2017.

Second-quarter 2018 net sales were $495.3 million versus $394.6 million
in the comparable period in 2017; a year-over-year increase of 26%. The
increase was attributable to improved crane shipments across all
regions, with the U.S. and European markets generating the majority of
the increase.

The Company reported operating income of $24.1 million as compared to
$11.9 million in the prior year. Income from continuing operations of
$9.9 million, or $0.27 per diluted share, in the second-quarter 2018
versus $0.7 million, or $0.02 per diluted share, in the second-quarter
2017. Adjusted income from continuing operations(1) was $14.3
million, or $0.40 per diluted share, in the second-quarter 2018 versus
adjusted income from continuing operations of $6.5 million, or $0.18 per
diluted share, in the comparable period of 2017. Adjusted EBITDA(1)
for the second-quarter 2018 was $37.5 million compared to $27.2 million
in the same period last year.

"I am very pleased with our continuing momentum in delivering solid
financial results using the principles of The Manitowoc Way. We achieved
our fifth consecutive quarter of year-over-year improvement in adjusted
EBITDA percentage, along with a 14 percent year-over-year increase in
orders. Our product revolution is real, highlighted by the outstanding
customer, dealer and investor feedback from our Crane Days event held in
June, 2018 at our Shady Grove manufacturing facility," commented Barry
L. Pennypacker, President and Chief Executive Officer of The Manitowoc
Company, Inc.

"Key markets continue to show signs of recovery, particularly in North
America. In spite of the well-documented increased input costs such as
tariffs and steel costs, we remain committed to delivering on our
financial targets and transforming Manitowoc into a world-class crane
manufacturer while continuing to improve the returns for our
shareholders. We have updated our EBITDA guidance by narrowing the range
as a result of better visibility for the remainder of the year," added
Pennypacker.

Full-Year 2018 Guidance

Manitowoc updates its' full-year 2018 financial guidance as follows:

  • Revenue – approximately $1.775 to $1.850 billion;
  • Adjusted EBITDA - approximately $105 to $115 million;
  • Depreciation - approximately $36 million;
  • Restructuring expense - approximately $13 to $15 million;
  • Capital expenditures - approximately $25 to $30 million; and
  • Income tax expense - approximately $14 to $20 million.

Investor Conference Call

On Tuesday, August 7th, 2018, at 10:00 a.m. ET (9:00 a.m. CT), The
Manitowoc Company's senior management will discuss its second-quarter
2018 earnings results during a live conference call for security
analysts and institutional investors. A live audio webcast of the call,
along with the related presentation, can be accessed in the Investor
Relations section of Manitowoc's website at www.manitowoc.com.
A replay of the conference call will also be available at the same
location on the website.

About The Manitowoc Company, Inc.

Founded in 1902, The Manitowoc Company, Inc. is a leading global
manufacturer of cranes and lifting solutions with manufacturing,
distribution, and service facilities in 20 countries. Manitowoc is
recognized as one of the premier innovators and providers of crawler
cranes, tower cranes, and mobile cranes for the heavy construction
industry, which are complemented by a slate of industry-leading
aftermarket product support services. In 2017, Manitowoc's net sales
totaled $1.6 billion, with over half generated outside the United States.

Footnote

(1) Non-GAAP adjusted net income (loss) ("adjusted net income (loss)")
and non-GAAP adjusted EBITDA ("adjusted EBITDA") are financial measures
that are not in accordance with GAAP. For a reconciliation to the
comparable GAAP numbers please see schedule of "Non-GAAP Financial
Measures" at the end of this press release. Manitowoc believes these
non-GAAP financial measures provide important supplemental information
to both management and investors regarding financial and business trends
used in assessing its results of operations. Manitowoc believes
excluding specified items provides a more meaningful comparison to the
corresponding reporting periods and internal budgets and forecasts,
assists investors in performing analysis that is consistent with
financial models developed by investors and research analysts, provides
management with a more relevant measure of operating performance and is
more useful in assessing management performance.

Forward-looking Statements

This press release includes "forward-looking statements" intended to
qualify for the safe harbor from liability under the Private Securities
Litigation Reform Act of 1995. Any statements contained in this press
release that are not historical facts are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. These statements are based on the current expectations of the
management of the Company and are subject to uncertainty and changes in
circumstances. Forward-looking statements include, without limitation,
statements typically containing words such as "intends," "expects,"
"anticipates," "targets," "estimates," and words of similar import. By
their nature, forward-looking statements are not guarantees of future
performance or results and involve risks and uncertainties because they
relate to events and depend on circumstances that will occur in the
future. There are a number of factors that could cause actual results
and developments to differ materially from those expressed or implied by
such forward-looking statements. Factors that could cause actual results
and developments to differ materially include, among others:

changes in economic or industry conditions generally or in the
markets served by Manitowoc;

unanticipated changes in customer demand, including changes
in global demand for high-capacity lifting equipment, changes in demand
for lifting equipment in emerging economies, and changes in demand for
used lifting equipment;

unanticipated changes in revenues, margins, costs, and
capital expenditures;

the ability to increase operational efficiencies across
Manitowoc's businesses and to capitalize on those efficiencies;

the ability to significantly improve profitability;

the risks associated with growth or contraction;

changes in raw material and commodity prices;

foreign currency fluctuation and its impact on reported
results and hedges in place with Manitowoc;

the ability to focus on customers, new technologies, and
innovation;

uncertainties associated with new product introductions, the
successful development and market acceptance of new and innovative
products that drive growth; and

risks and factors detailed in Manitowoc's 2017 Annual Report on
Form 10-K and its other filings with the United States Securities and
Exchange Commission.

Manitowoc undertakes no obligation to update or revise
forward-looking statements, whether as a result of new information,
future events, or otherwise. Forward-looking statements only speak as of
the date on which they are made. Information on the potential factors
that could affect the Company's actual results of operations is included
in its filings with the Securities and Exchange Commission, including
but not limited to its Annual Report on Form 10-K for the fiscal year
ended December 31, 2017.

 
THE MANITOWOC COMPANY, INC.

Unaudited Consolidated Financial Information

For the three and six months ended June 30, 2018 and 2017

($ in millions, except share data)

 
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
             
  Three Months Ended   Six Months Ended
June 30, June 30,
2018     2017   2018     2017  
Net sales $ 495.3 $ 394.6 $ 881.4 $ 700.4
Cost of sales   404.8     318.3     722.5     572.2  
Gross profit   90.5     76.3     158.9     128.2  
Operating costs and expenses:

Engineering, selling and administrative expenses

62.1 58.4 122.5 119.8
Asset impairment expense 0.4 0.4
Amortization of intangible assets 0.1 0.3 0.2 0.7
Restructuring expense 3.8 5.9 10.0 17.6
Other operating income - net       (0.2 )        
Total operating costs and expenses   66.4     64.4     133.1     138.1  
Operating income (loss) 24.1 11.9 25.8 (9.9 )
Other income (expense):
Interest expense (9.4 ) (9.7 ) (19.4 ) (19.8 )
Amortization of deferred financing fees (0.4 ) (0.4 ) (0.9 ) (0.9 )
Other income (expense) - net   (5.6 )   1.2     (2.9 )   (0.9 )
Total other expense   (15.4 )   (8.9 )   (23.2 )   (21.6 )
Income (loss) from continuing operations before taxes 8.7 3.0 2.6 (31.5 )
Provision (benefit) for taxes on income   (1.2 )   2.3     2.7     3.8  
Income (loss) from continuing operations 9.9 0.7 (0.1 ) (35.3 )
Discontinued operations:
Loss from discontinued operations, net of income taxes   (0.2 )   (0.2 )   (0.2 )   (0.2 )
 
Net income (loss) $ 9.7   $ 0.5   $ (0.3 ) $ (35.5 )
 
BASIC INCOME (LOSS) PER COMMON SHARE:
Income (loss) from continuing operations $ 0.28 $ 0.02 $ $ (1.01 )
Loss from discontinued operations, net of income taxes   (0.01 )   (0.01 )   (0.01 )    
BASIC INCOME (LOSS) PER COMMON SHARE $ 0.27   $ 0.01   $ (0.01 ) $ (1.01 )
 
DILUTED INCOME (LOSS) PER COMMON SHARE:
Income (loss) from continuing operations $ 0.27 $ 0.02 $ $ (1.01 )
Loss from discontinued operations, net of income taxes   (0.00 )   (0.01 )   (0.01 )    
DILUTED INCOME (LOSS) PER COMMON SHARE $ 0.27   $ 0.01   $ (0.01 ) $ (1.01 )
 
Weighted average shares outstanding - Basic 35,530,356 35,109,426 35,449,298 35,065,173
Weighted average shares outstanding - Diluted 36,064,108 35,654,672 35,449,298 35,065,173
 

In the first-quarter of 2018, the Company adopted Accounting Standards
Update("ASU") 2017-07 "Compensation-Retirement Benefits (Topic 715):
Improving the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost." Under ASU 2017-07 the service component of
pension costs is included in Engineering, Selling and Administrative
expenses while the other components of pension costs are included in
Other Income (Expense) – Net on the income statement. This ASU was
applied retrospectively by adjusting the prior period financial
statements.

 
MANITOWOC COMPANY, INC.
Unaudited Consolidated Financial Information

As of June 30, 2018 and December 31, 2017

($ in millions)

 
CONDENSED CONSOLIDATED BALANCE SHEETS
           
  June 30, 2018     December 31, 2017
ASSETS  
Current assets:
Cash, cash equivalents and restricted cash $ 83.7 $ 123.0
Accounts receivable - net 210.2 179.2
Inventories - net 469.6 400.6
Notes receivable - net 24.9 31.1
Other current assets   57.8     56.5
Total current assets 846.2 790.4
Property, plant and equipment - net 292.2 303.7
Intangible assets - net 437.5 443.4
Other long-term assets   62.4     70.3
TOTAL ASSETS $ 1,638.3   $ 1,607.8
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 433.0 $ 375.8
Short-term borrowings and current portion of long-term debt 7.0 8.2
Product warranties 37.1 35.5
Customer advances 15.3 12.7
Product liabilities   21.2     20.8
Total current liabilities 513.6 453.0
Non-current liabilities:
Long-term debt 265.4 266.7
Other non-current liabilities   193.3     210.6
Total non-current liabilities 458.7 477.3
Stockholders' equity   666.0     677.5
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,638.3   $ 1,607.8
 
 
MANITOWOC COMPANY, INC.
Unaudited Consolidated Financial Information

For the six months ended June 30, 2018 and 2017

($ in millions)

 
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
       
  Six Months Ended
June 30,
2018     2017  
Cash flows from operations:
Net income (loss) $ (0.3 ) $ (35.5 )
Depreciation 18.2 19.9
Asset impairment expense 0.4
Other non-cash adjustments - net (0.2 ) 5.2
Accounts receivable (286.6 ) (186.5 )
Inventories (79.5 ) (37.3 )
Notes receivable 8.3 9.5
Other assets 0.3 (1.7 )
Accounts payable 69.2 46.8
Accrued expenses and other liabilities   (10.6 )   (11.1 )
Net cash used for operating activities of continuing operations (280.8 ) (190.7 )
Net cash used for operating activities of discontinued operations   (0.2 )   (0.2 )
Net cash used for operating activities   (281.0 )   (190.9 )
Cash flows from investing:
Capital expenditures (15.2 ) (11.9 )
Proceeds from fixed assets 8.4 5.3
Cash receipts on sold accounts receivable 250.7 146.3
Other       0.2  
Net cash provided by investing activities of continuing operations 243.9 139.9
Net cash used for investing activities of discontinued operations        
Net cash provided by investing activities   243.9     139.9  
Cash flows from financing:
Proceeds from (payments on) long-term debt- net (3.0 ) 5.5
Payments on notes financing - net (2.9 )
Exercise of stock options   2.0       2.9  
Net cash provided by (used for) financing activities of

continuing operations

(1.0 ) 5.5
Net cash provided by financing activities of discontinued

operations

       
Net cash provided by (used for) financing activities   (1.0 )   5.5  
Effect of exchange rate changes on cash   (1.2 )   0.8  
Net decrease in cash, cash equivalents and restricted cash $ (39.3 ) $ (44.7 )
 

In the first-quarter of 2018, the Company adopted ASU No. 2016-15 -
"Statement of Cash Flows (Topic 230): Classification of Certain Cash
Receipts and Cash Payments." Under ASU 2016-15 cash collections related
to the deferred purchase price from the Company's accounts receivable
securitization program are recorded as cash flows from investing.
Previously, cash collections related to the deferred purchase price were
recorded as cash flows from operating activities. This ASU was applied
retrospectively by adjusting the prior period financial statements.

Non-GAAP Financial Measures

Non-GAAP Items

Non-GAAP adjusted income (loss) from continuing operations, non-GAAP
adjusted EBITDA and non-GAAP adjusted operating cash flows are financial
measures that are not in accordance with GAAP. Manitowoc believes these
non-GAAP financial measures provide important supplemental information
to both management and investors regarding financial and business trends
used in assessing its results of operations. Manitowoc believes
excluding specified items provides a more meaningful comparison to the
corresponding reporting periods and internal budgets and forecasts,
assists investors in performing analysis that is consistent with
financial models developed by investors and research analysts, provides
management with a more relevant measure of operating performance and is
more useful in assessing management performance.

 
Non-GAAP Adjusted Income (Loss) and Income (Loss) Per Share from
Continuing Operations
($ in millions, except share data)          
Three Months Ended Six Months Ended
June 30, June 30,
2018   2017   2018   2017  
Income (loss) from continuing operations $ 9.9 $ 0.7 $ (0.1 ) $ (35.3 )
Special items:
Asset impairment 0.4 0.4
Restructuring expense 3.8 5.9 10.0 17.6
Separation equity awards (0.1 )
Tax on special items   0.2         0.5      
Non-GAAP adjusted income (loss) from continuing

operations

$ 14.3   $ 6.5   $ 10.8   $ (17.7 )
 
Diluted income (loss) from continuing operations per share $ 0.27 $ 0.02 $ $ (1.01 )
Special items, net of tax:
Asset impairment 0.01 0.01
Restructuring expense 0.11 0.16 0.28 0.50
Separation equity awards
Tax valuation allowance and one time tax items   0.01         0.01     0.01  
Diluted non-GAAP adjusted income (loss) per share

from continuing operations

$ 0.40   $ 0.18   $ 0.30   $ (0.50 )
 
 
Non-GAAP Adjusted Operating Cash Flows
($ in millions, except share data)    
Six Months Ended
June 30,
2018   2017  
Net cash used for operating activities: $ (281.0 ) $ (190.9 )
Cash receipts on sold accounts receivable   250.7     146.3  
Non-GAAP adjusted operating cash flows:   (30.3 )   (44.6 )
 

Adjusted EBITDA and Non-GAAP Adjusted Operating Income (loss)

The company defines adjusted EBITDA as earnings before interest, taxes,
depreciation and amortization, plus an addback of certain restructuring
charges. The reconciliation of GAAP net income (loss) to adjusted EBITDA
and adjusted operating income (loss) for the current and previous four
quarters, as well as the trailing twelve months is as follows ($ in
millions):

         
Trailing
                                Twelve
6/30/2018     3/31/2018     12/31/2017     9/30/2017     Months  
Income (loss) from continuing operations $ 9.9 $ (10.0 ) $ 35.6 $ 9.7 $ 45.2

Interest expense and amortization of deferred financing fees

9.8 10.5 10.3 10.1 40.7
Provision (benefit) for taxes (1.2 ) 3.9 (40.2 ) (13.1 ) (50.6 )
Depreciation expense 9.1 9.1 9.0 9.2 36.4
Amortization of intangible assets   0.1       0.1       0.1             0.3  
EBITDA 27.7 13.6 14.8 15.9 72.0
Restructuring expense 3.8 6.2 5.9 3.7 19.6
Asset impairment expense 0.4 0.1 0.5
Other (income) expense - net (1)   5.6     (2.7 )   2.9     3.0     8.8  
Adjusted EBITDA 37.5 17.1 23.7 22.6 100.9
Depreciation expense   (9.1 )   (9.1 )   (9.0 )   (9.2 )   (36.4 )
Non-GAAP adjusted operating income (loss) 28.4 8.0 14.7 13.4 64.5
Restructuring expense (3.8 ) (6.2 ) (5.9 ) (3.7 ) (19.6 )
Asset impairment expense (0.4 ) (0.1 ) (0.5 )
Amortization of intangible assets (0.1 ) (0.1 ) (0.1 ) (0.3 )
Other operating income (expense) - net           (0.1 )       (0.1 )
GAAP operating income (loss) $ 24.1   $ 1.7   $ 8.5   $ 9.7   $ 44.0  
 
Adjusted EBITDA margin percentage 7.6 % 4.4 % 4.9 % 5.7 % 5.7 %

Non-GAAP adjusted operating income (loss) margin percentage

5.7 % 2.1 % 3.1 % 3.4 % 3.7 %
 

(1) Other (income) expense - net includes foreign currency translation
adjustments, other components of net periodic pension costs and other
miscellaneous items.

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