s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
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(State or other jurisdiction |
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(I.R.S. Employer |
of incorporation or organization) |
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Identification Number) |
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(Address of principal executive offices) |
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of June 30, 2024, the registrant had
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE MANITOWOC COMPANY, INC.
Condensed Consolidated Statements of Operations
For the three and six months ended June 30, 2024 and 2023
(Unaudited)
($ in millions, except per share and share amounts)
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Three Months Ended |
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Six Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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Net sales |
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$ |
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$ |
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$ |
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$ |
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Cost of sales |
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Gross profit |
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Operating costs and expenses: |
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Engineering, selling and administrative expenses |
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Amortization of intangible assets |
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Restructuring expense |
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Total operating costs and expenses |
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Operating income |
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Other income (expense): |
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Interest expense |
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Amortization of deferred financing fees |
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Other income (expense) - net |
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Total other expense |
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Income before income taxes |
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Provision (benefit) for income taxes |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Per Share Data and Share Amounts: |
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Basic net income per common share |
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$ |
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$ |
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$ |
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$ |
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Diluted net income per common share |
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$ |
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$ |
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$ |
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$ |
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Weighted average shares outstanding - basic |
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Weighted average shares outstanding - diluted |
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The accompanying notes are an integral part to these Condensed Consolidated Financial Statements.
2
THE MANITOWOC COMPANY, INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)
For the three and six months ended June 30, 2024 and 2023
(Unaudited)
($ in millions)
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Three Months Ended |
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Six Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss), |
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Unrealized loss on derivatives, net of |
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Employee pension and postretirement benefit |
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Foreign currency translation adjustments, net of |
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Total other comprehensive income (loss), net of income tax |
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Comprehensive income (loss) |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part to these Condensed Consolidated Financial Statements.
3
THE MANITOWOC COMPANY, INC.
Condensed Consolidated Balance Sheets
As of June 30, 2024 and December 31, 2023
(Unaudited)
($ in millions, except per share amounts)
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June 30, |
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December 31, |
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Assets |
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Current Assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, less allowances of $ |
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Inventories - net |
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Notes receivable — net |
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Other current assets |
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Total current assets |
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Property, plant and equipment — net |
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Operating lease right-of-use assets |
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Goodwill |
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Intangible assets — net |
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Other non-current assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders' Equity |
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Current Liabilities: |
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Accounts payable and accrued expenses |
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$ |
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$ |
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Customer advances |
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Short-term borrowings and current portion of long-term debt |
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Product warranties |
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Other liabilities |
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Total current liabilities |
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Non-Current Liabilities: |
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Long-term debt |
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Operating lease liabilities |
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Deferred income taxes |
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Pension obligations |
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Postretirement health and other benefit obligations |
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Long-term deferred revenue |
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Other non-current liabilities |
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Total non-current liabilities |
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(Note 17) |
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Stockholders' Equity: |
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Preferred stock ( |
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Common stock ( |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Retained earnings |
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Treasury stock, at cost ( |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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The accompanying notes are an integral part to these Condensed Consolidated Financial Statements.
4
THE MANITOWOC COMPANY, INC.
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2024 and 2023
(Unaudited)
($ in millions)
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Six Months Ended |
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2024 |
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2023 |
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Cash Flows from Operating Activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to cash used for operating activities: |
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Depreciation expense |
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Amortization of intangible assets |
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Stock-based compensation expense |
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Amortization of deferred financing fees |
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Gain (loss) on sale of property, plant and equipment |
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Deferred income tax benefit |
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Loss on foreign currency translation adjustments |
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Changes in operating assets and liabilities |
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Accounts receivable |
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Inventories |
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Notes receivable |
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Other assets |
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Accounts payable |
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Accrued expenses and other liabilities |
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Net cash used for operating activities |
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Cash Flows from Investing Activities: |
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Capital expenditures |
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( |
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Proceeds from sale of property, plant and equipment |
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Net cash used for investing activities |
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( |
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( |
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Cash Flows from Financing Activities: |
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Proceeds from revolving credit facility - net |
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Payments on revolving credit facility |
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Proceeds from revolving credit facility |
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Proceeds from (payments on) other debt - net |
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Exercises of stock options |
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Common stock repurchases |
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( |
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( |
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Other financing activities |
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( |
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Net cash provided by (used for) financing activities |
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( |
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Effect of exchange rate changes on cash and cash equivalents |
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( |
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Net decrease in cash and cash equivalents |
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( |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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Supplemental Cash Flow Information |
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Interest paid |
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$ |
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$ |
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Income taxes paid |
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The accompanying notes are an integral part to these Condensed Consolidated Financial Statements.
5
THE MANITOWOC COMPANY, INC.
Condensed Consolidated Statements of Equity
For the three and six months ended June 30, 2024 and 2023
(Unaudited)
($ in millions, except share amounts)
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Three Months Ended |
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Six Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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Common Stock - Par Value |
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Balance at beginning of period |
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$ |
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$ |
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$ |
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$ |
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Balance at end of period |
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$ |
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$ |
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$ |
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$ |
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Additional Paid-in Capital |
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Balance at beginning of period |
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$ |
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$ |
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$ |
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$ |
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Stock compensation plans |
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( |
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( |
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( |
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( |
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Stock-based compensation expense |
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Balance at end of period |
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$ |
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$ |
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$ |
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$ |
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Accumulated Other Comprehensive Loss |
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Balance at beginning of period |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Other comprehensive income (loss) |
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( |
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( |
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Balance at end of period |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Retained Earnings |
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Balance at beginning of period |
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$ |
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$ |
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$ |
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$ |
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Net income |
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Balance at end of period |
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$ |
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$ |
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$ |
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$ |
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Treasury Stock |
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Balance at beginning of period |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Stock compensation plans |
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Common stock repurchases |
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( |
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( |
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( |
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( |
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Balance at end of period |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Total stockholders' equity |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part to these Condensed Consolidated Financial Statements.
6
THE MANITOWOC COMPANY, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended June 30, 2024 and 2023
1. Accounting Policies and Basis of Presentation
The Manitowoc Company, Inc. (“Manitowoc” or the “Company”) was founded in 1902 and has over a
The Company has
In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments necessary for a fair statement of the results of operations for the three and six months ended June 30, 2024 and 2023, the cash flows for the same six month periods and the financial positions as of June 30, 2024 and December 31, 2023, and except as otherwise discussed, such adjustments consist of only those of a normal recurring nature. The audited balance sheet as of December 31, 2023 was derived from the audited annual financial statements. The interim results are not necessarily indicative of results for a full year and do not contain information included in the Company’s annual consolidated financial statements and notes for the year ended December 31, 2023. Certain information and footnote disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), have been condensed or omitted pursuant to Securities and Exchange Commission rules and regulations dealing with interim financial statements. However, the Company believes that the disclosures made in the Condensed Consolidated Financial Statements included herein are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company’s latest annual report on Form 10-K.
All amounts, except per share data and per share amounts, are in millions throughout the tables in these notes unless otherwise indicated.
2. Recent Accounting Changes and Pronouncements
In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, "Segment Reporting - Improvements to Reportable Segments Disclosures.” The amendments in this ASU improve reportable segment disclosure requirements, primarily through enhanced footnote disclosures about significant segment expenses. The standard is effective for annual periods beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company does not expect the adoption of this ASU will have a material impact on its consolidated financial statements.
In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The amendments in this ASU enhance the transparency and decision usefulness of income tax disclosures. The standard is effective for annual periods beginning after December 15, 2024, and for interim periods within fiscal years beginning after December 15, 2025. Early adoption is permitted. The Company does not expect the adoption of this ASU will have a material impact on its consolidated financial statements.
3. Net Sales
The Company defers revenue when cash payments are received in advance of satisfying the performance obligation. These amounts are recorded as customer advances in the Condensed Consolidated Balance Sheets.
7
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Three Months Ended |
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Six Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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Balance at beginning of period |
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$ |
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$ |
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$ |
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$ |
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Cash received in advance of satisfying |
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Revenue recognized |
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( |
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( |
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( |
) |
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( |
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Currency translation |
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( |
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( |
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Balance at end of period |
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$ |
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$ |
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$ |
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$ |
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Disaggregation of the Company’s revenue sources are disclosed in Note 16, “Segments.”
4. Fair Value of Financial Instruments
The following table sets forth the Company’s financial assets and liabilities related to foreign currency exchange contracts (“FX Forward Contracts”) and The Manitowoc Company, Inc. Deferred Compensation Plan (the "Deferred Compensation Plan") that were accounted for at fair value as of June 30, 2024 and December 31, 2023.
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Fair Value as of June 30, 2024 |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Recognized Location |
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Current Assets: |
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Deferred Compensation Plan - Program B |
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$ |
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$ |
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$ |
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$ |
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Other non-current assets |
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Current Liabilities: |
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|
|
||||
FX Forward Contracts |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Accounts payable and |
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|
|
Fair Value as of December 31, 2023 |
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|
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Recognized Location |
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Current Assets: |
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|
|
||||
FX Forward Contracts |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Other current assets |
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Deferred Compensation Plan - Program B |
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Other non-current assets |
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|
$ |
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$ |
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$ |
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$ |
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|||||
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Current Liabilities: |
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FX Forward Contracts |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Accounts payable and |
||||
The fair value of the $
The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company estimates the fair value of its 2026 Notes based on quoted market prices of the instruments; because these markets are typically actively traded, the liabilities are classified as Level 1 within the valuation hierarchy. The carrying values of cash and cash equivalents, accounts receivable, accounts payable and short-term variable debt, including any amounts outstanding under the Company's revolving credit facility, approximate fair value, without being discounted as of June 30, 2024 and December 31, 2023, due to the short-term nature of these instruments.
FX Forward Contracts are valued through an independent valuation source which uses an industry standard data provider, with resulting valuations periodically validated through third-party or counterparty quotes. As such, these derivative instruments are classified within Level 2. See Note 5, “Derivative Financial Instruments” for additional information.
The Deferred Compensation Plan utilizes a rabbi trust to hold assets intended to satisfy the Company’s corresponding future benefit obligations. The plan assets and corresponding obligations for Program B under the Deferred Compensation Plan are classified within Level 1.
8
5. Derivative Financial Instruments
The Company’s risk management objective is to ensure that business exposures to risks are minimized using the most effective and efficient methods to eliminate, reduce, or transfer such exposures. Operating decisions consider these associated risks and, whenever possible, transactions are structured to avoid or mitigate these risks.
From time to time, the Company enters into FX Forward Contracts to manage the exposure on forecasted transactions denominated in non-functional currencies and to manage the risk of transaction gains and losses associated with assets/liabilities in currencies other than the functional currency of certain subsidiaries. Certain of these FX Forward Contracts are designated as cash flow hedges. To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives’ fair value are not included in current earnings but are included in accumulated other comprehensive income (loss) ("AOCI"). These changes in fair value are reclassified into earnings as a component of cost of sales, as applicable, when the forecasted transaction impacts earnings. In addition, if the forecasted transaction is no longer probable, the cumulative change in the derivatives’ fair value is recorded as a component of other income (expense) – net in the period in which the transaction is no longer considered probable of occurring. No amounts were recorded related to forecasted transactions no longer being probable during the three and six months ended June 30, 2024 and 2023.
The Company had FX Forward Contracts with aggregate notional amounts of $
The net gains (losses) recorded in the Condensed Consolidated Statements of Operations for FX Forward Contracts for the three and six months ended June 30, 2024 and 2023 are summarized as follows:
|
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|
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Three Months Ended |
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Six Months Ended |
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||||||||||
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Recognized Location |
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2024 |
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2023 |
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2024 |
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2023 |
|
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Designated |
|
Cost of sales |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Non-designated |
|
Other income (expense) - net |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
6. Inventories
The components of inventories as of June 30, 2024 and December 31, 2023 are summarized as follows:
|
|
June 30, |
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|
December 31, |
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Raw materials |
|
$ |
|
|
$ |
|
||
Work-in-process |
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|
|
|
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|
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Finished goods |
|
|
|
|
|
|
||
Total inventories |
|
$ |
|
|
$ |
|
||
7. Property, Plant, and Equipment
The components of property, plant, and equipment as of June 30, 2024 and December 31, 2023 are summarized as follows:
9
|
|
June 30, |
|
|
December 31, |
|
||
Land |
|
$ |
|
|
$ |
|
||
Building and improvements |
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Machinery, equipment, and tooling |
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Furniture and fixtures |
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Computer hardware and software |
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Rental cranes |
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Construction in progress |
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||
Total cost |
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|
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|
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|
||
Less accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property, plant, and equipment — net |
|
$ |
|
|
$ |
|
||
Property, plant, and equipment is depreciated over the estimated useful life using the straight-line depreciation method for financial reporting and accelerated methods for income tax purposes.
Additions to property, plant, and equipment included in accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 were $
Assets Held for Sale
As of December 31, 2023, the Company had $
8. Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill as of June 30, 2024 is summarized as follows:
|
|
Americas |
|
|
MEAP |
|
|
Consolidated |
|
|||
Balance as of December 31, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Foreign currency impact |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance as of June 30, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The gross carrying amount, accumulated impairment and net book value of the Company's goodwill balances by reportable segment as of June 30, 2024 and December 31, 2023, are summarized as follows:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||||||||||||||||||
|
|
Gross Carrying Amount |
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|
Accumulated Impairment Amount |
|
|
Net Book Value |
|
|
Gross Carrying Amount |
|
|
Accumulated Impairment Amount |
|
|
Net Book Value |
|
||||||
Americas |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
EURAF |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
MEAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
The Company performs its annual goodwill impairment test during the fourth quarter, or more frequently if events or changes in circumstances indicate that there might be an impairment of the asset. The Company will continue to monitor changes in
10
circumstances and test more frequently if those changes indicate that assets might be impaired. The Company determined there was no triggering event during the three and six months ended June 30, 2024.
The gross carrying amount, accumulated amortization, and net book value of the Company’s other intangible assets other than goodwill as of June 30, 2024 and December 31, 2023, are summarized as follows:
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||||||||||||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
||||||
Definite lived intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer relationships |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Patents |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Noncompetition agreements |
|
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