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The Manitowoc Company Reports First-Quarter Financial Results

MANITOWOC, Wis., May 04, 2016 (BUSINESS WIRE) -- The Manitowoc Company, Inc. MTW, -0.18% today reported first-quarter 2016 sales of $427.4 million, a five percent increase versus the comparable period in 2015. The adjusted loss from continuing operations was $5.3 million, or $0.04 per diluted share, in the first quarter of 2016, versus adjusted loss from continuing operations of $28.6 million, or $0.21 per diluted share, in the first quarter of 2015.

On a GAAP basis, the company reported a net loss of $204.0 million, or $1.49 per diluted share, in the first-quarter 2016 versus a net loss of $8.4 million, or $0.06 per diluted share, in the first quarter of 2015. First-quarter 2016 earnings were impacted by costs associated with early extinguishment of debt, restructuring and one-time tax items. A reconciliation of GAAP net earnings to net earnings before special items for the quarter is provided later in this press release.

“We made great strides in the first quarter transitioning to a stand-alone Crane business. We’ve begun to establish a new culture based on The Manitowoc Way, focused on driving Innovation and Velocity throughout all of our business processes. In the first quarter, we experienced continued momentum in our Tower business, fueled by residential and non-residential construction. As anticipated, demand for Mobiles remains soft. Our full-year outlook remains unchanged,” commented Barry L. Pennypacker, president and chief executive officer of The Manitowoc Company.

“As we move forward, we will focus on four key elements. First, we will utilize our Lean expertise to increase the flexibility of our manufacturing footprint globally. Second, we will reinvigorate our development process to introduce new products and services that deliver enhanced productivity to generate greater return on investment for our customers. Third, we will focus on gaining market share as a result of our improved competitive position. Fourth, we will take advantage of our strengthened balance sheet to allocate capital to the most accretive options available at that time. These four actions are supportive of our long-term stated goal to achieve double-digit margins,” concluded Pennypacker.

Financial Results

First-quarter 2016 net sales were $427.4 million versus $406.7 million in the first quarter of 2015. The increase in sales was primarily due to continued strength in towers as a result of improving residential and commercial construction trends, as well as new product introductions. This improvement was offset by persistent currency headwinds and ongoing softness in mobile cranes driven largely by the underperformance in the U.S. stemming from lower oil prices.

Operating earnings for the first quarter of 2016 were $9.5 million, compared to a loss of $7.3 million in the same period last year. This resulted in an operating margin of 2.2 percent for the first quarter of 2016 versus negative 1.8 percent for the first quarter of 2015. First-quarter 2016 operating margins were positively impacted through plant rationalizations, reductions in force and other operating efficiencies.

Backlog totaled $502 million as of March 31, 2016, down from the fourth-quarter of 2015 of $513 million. First-quarter 2016 orders of $417 million decreased from $424 million in the fourth-quarter of 2015. This represents a book-to-bill of 1.0.

Restructuring Activities

In-line with its four-phase growth plan, the company undertook actions to balance capacity to demand in its North American operations during the first quarter. As a result, the company incurred approximately $4 million of restructuring expense primarily related to workforce reductions at facilities in the U.S.

The company expects to recognize cash outflows in settlement of these expenses by the end of the current year. The total savings as a result of these actions will be approximately $20 million to be realized in 2016, which will be split between cost of goods sold and sales, general and administrative (SG&A) expenses. Additionally, there are reductions in expenses that are excluded from these restructuring activities, but will positively impact SG&A going forward. These additional reductions in cost are approximately $18 million for the full-year.

As a result of the spin-off of the Foodservice business completed in the first quarter, the company recorded a valuation allowance against domestic deferred tax assets of approximately $121 million as a non-cash tax charge.

Cash Flow

Net cash flow from operating activities in the first quarter of 2016 was a use of approximately $210 million which includes continuing and discontinued operations, driven by $57 million in prepayment penalties and seasonal working capital requirements. Use of cash in the first half of the year is consistent with the normal seasonal pattern for the company. First-quarter capital expenditures for continuing operations totaled $10.9 million.

2016 Guidance

For the full-year 2016, Manitowoc expects:

  • Revenue – approximately flat;
  • Operating margins – approximately 4%;
  • Depreciation– between $45 and $55 million;
  • Amortization expense – between $3 and $4 million; and
  • Capital expenditures – approximately $45 to $50 million (previously $55 to $65 million).

Investor Conference Call

On May 5 [th] at 10:00 a.m. ET (9:00 a.m. CT), The Manitowoc Company’s senior management will discuss its first-quarter results during an investor conference call. All interested parties may listen to the live conference call via the Internet by going to the Investor Relations area of Manitowoc’s Web site at a>