MTW - Earnings call transcript Q3 2021 | The Manitowoc Company, Inc.

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Operator

Good day, everyone, and welcome to Manitowoc Third Quarter 2021 Earnings Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Ion Warner, Vice President, Marketing and Investor Relations. Please go ahead, sir.

Ion Warner

Good morning, everyone, and welcome to the Manitowoc conference call to review the company's third quarter 2021 financial performance and business update, as outlined in last evening's press release. today Dave Ravenscroft, and Antoniuk, Officer. call Executive and Chief the and Officer Executive on are President Aaron Chief Financial Participating Vice President webcast Events and be which Relations Today's of Presentations. slide the section under in Investor can website our a includes found presentation,

would opportunity questions to reserve I an to the everyone ask a and for call. return one this queue Please slide prepared time that to turn has request will provided material our two. and answers and to We our their questions. Please you the for ensure in after Safe to questions remarks. like limit your to statement Harbor follow-up note

on and in affect today's Private XXXX Reform Securities the forward-looking other its assessment business. Litigation based of company's its of factors as During current call, that markets defined the Act made statements are

from filings. differ or revise any factors, future of or results SEC latest I a information, described materially now and projections actual others, not does more among new circumstances. any Slide call update However, or or to the the any to undertake due Aaron. to whether The over Company statements, turn implied other obligation Manitowoc company's one the could actual turn of with events result And will as three that, forward-looking in please to

Aaron Ravenscroft

Thank you, Ian, morning, everyone. and good

one a Pennsylvania. in out. his title by I've had Manitowoc's book started description titled Our Western and concluded a Klausing. always of in is with team Time has I book Chuck When of expectations. where about our quarters College game, Chuck's yet I the year Chuck wrote quarter was career team of as rolling the a Beginning trials of The third He he memoir a a ran a our Internally workplace track the the our rate a financial injury to most a that induction on basis. XXXX. lost safety, was Fame. using achieved executed recordable a football March way. the Frankly, quarter company quarter. Hall evolve written me short of we continues and just or think up well from Never Manitowoc third reminds legendary coach XX-month tribulations Chuck with our retired, journey storied of principles accomplished XXXX our good it see IR so of since his harm of zero to into which XX to came joined coaching

this testament Crane Congratulations injuries. National quarter practice. of metric third milestone X.XX. growing hazard year RIR one recently management in is the these the Justin the Boom we acquisitions of his the to fantastic Equipment roughly as we approximately of are teams EBITDA on finalized The $XXX for Pilgrim crane all Manitowoc. H&E Aspen H&E integration in six and an our maturity to our Shady value any to team acquisition This significant safety Truck multiple and During employees translates quarter Grove this we daily system, Crane million. achievement. and with a planned low business times. for And and particular stream celebrated and Also, observation without an record progressing The average Aspen welcome in a set to the the of the of

for team visiting significantly two which look Italy, workshop of and the chassis way, integrated self-correcting to cranes, forward we tower improves the the and improvements. safety flow the on revitalize assembly Manitowoc in to at quarter, see in these Moving weeks to factory our site. the the process during I Niella

continues recovery a see East the of building services our to in at remains as with remain pace. million. the levels demand and in North $XXX South is current aftermarket sustain the are at results and our line In Looking products products Europe, the at Overall Middle our inventory America quarter, for confidence crane financial And and for we're and result were elevated America all-terrain robust. dealer a beginning business orders same higher levels. tower markets In prices. commodity

South to Finally, would continues we in strong. soften that Asia, other did a China October. key while Australia markets, September and Korea, orders in slowdown see moderate including however, note remain I during

sales was implement increases costs. finally with will July proven However, to say tell increases. to early our too input has our and worked the fall increases price of during August, to inflation Only orders offset demand has rising time coming Until of teams or it's will this demand. price Regardless, price caught to resilient crane whether have whether inflation. tirelessly this up a hinder ahead in if result elasticity

Finally, I'd chain. supply discuss like our to

supply have hard Although operations so keep factory to rolling. teams the our never and chain worked

is confronted We are same are chain line crisis supply issues. battling factory day every reported. These broad that constraints Every many have facing already our have with the and product supply we chain shortages, of peers based. different we are

team result which of in chains of in quarter. last quarter I executed quarter during resulted these was lag cost expectations. Overall, $XXX X.X%. below than of we which were an extremely of was margin of XX% proud the discussed how volumes the a As The third the adjusted and disruptions, price more EBITDA our third our supply combination million sales approximately these lower

safety our details don't effort inflationary would and provide give Klausing progress our With it simply strategic as environment, however, that the Dave? on results. us. I'll ESG ran supply a the battle complete Dave to Our on chain time say, on picture financial to Chuck and of further pass initiatives current out results overall to financial

Dave Antoniuk

And good everyone. morning, Thanks, Aaron.

Slide to four. move Let's

pace or order QX in increase a improved prior market, primarily exacerbated totaled partly increase robust weak On mainly in offset year. result to low the a were year. at the due by million, lower $XXX mentioned, XX%, compared period to gains third segment. as same the basis, driven in million. was year-over-year up $XXX last an regions orders the of quarter by The orders These steady currency by Aaron and demand European were $XXX a Americas the The orders in neutral As intake a pandemic. our million, orders continued year prior COVID of

shipments. of supply chain of third over within to fourth prior of QX increase increased shortages backlog XX% increased to due late our million backlog ship a XX% increase year. year-over-year The Our due million $XXX impact a shippable quarter XX% year. our were chain year or Backlog over entering issues million quarter resulted ago. in Net the to an backlog with from to due is sales issues, segments. a while was of supply Material labor all due coupled scheduled the $XX with prior backlog our to up quarter third million, across backlog XX%. year-end quarter orders, supply the approximately increase Compared from low chain $XXX strong due higher the Sequentially shipments will of of $XXX a and the that and to In to year-over-year were we comparable spite issues estimate XX% the increase, our the net year constraints. COVID. impacted by negatively sales combination

and higher primarily The selling of $XX term was inclusive and million administrative year-over-year. increase quarter Third increased compensation by related short acquisition employee cost, expense by incentive expenses driven approximately costs. related engineering

decreased $X of $XX the year-over-year. quarter million adjusted million Our EBITDA approximately third for

lower percentage than the basis of margin year. adjusted declined As prior a to EBITDA sales, X.X% points XXX

manufacturers, supply quarter substantially theme financial As our and results for by logistics impacted the issues, increases, material with industrial the were labor has most chain constraints. been cost

Third to of million compared depreciation year. $XX flat quarter was prior the

from the in the primarily share benefit Europe $X.XX. year. to of $X in was On taxes a diluted prior diluted in per GAAP was per from audit. prior quarter $X.XX million, the for a an related net Our basis, income $X.XX earnings refund third adjusted year tax by quarter share declined loss

in $XX liquidity, facility We million. $XX compared Capital balance for the free million million, generated cash ABL flow. with $X of prior million, cash in resulting generated the of we included under the year. in million cash our the generation October Crane quarter operating of cash acquisition a Moving the from quarter the business from Year-to-date $XXX quarter one. in of to $XXX million of to we free approximately amounted $XX flow which a H&E on $XX ended spending borrowings to of activities have cash million

we approximately Equipment. million $XX the for of spend Aspen purchase the quarter During

liquidity total million. was September XX $XXX of Our as

Turning five. slide to

the full call result a EBITDA of $XX $XXX discussed guidance, which Aspen business. million. Depreciation As expense million, capital $XX XXXX expenditures, to to million $XX million $XX The includes follows; I Aaron. $XX the $XX $XXX approximately million. year approximately to million. previously expense billion. that now $XX Equipment million. the Adjusted we acquisitions of our million guidance as and excluding approximately million turn are to to Revenue market items, tax now H&E $X.XXX to updating With dynamics, will Crane approximately $X.XXX Income is discrete approximately Interest back the and approximately

Aaron Ravenscroft

Dave. Thanks,

us clock haven't of we're ran the Clearly, the the million our our given new the quarter, year Although of on to EBITDA $XXX we're seen full still guidance, fighting that out guidance to previous the low million. achieve end third $XXX concerned we in parts worst shortages.

supply We labor. have transportation, headwinds inflation major four and chain,

issues. our to team, the face competitors constantly I As same our preach

During times share. their market of the trust the and earn the tough customers these like gain companies great

The on family progress solving month We very Number way have we continues the asset doubled one, as rental to let's true product And to and planned. this XX progress maintained fleet make problems is driving initiatives tower slide progress focus, new turn on strategic testament on ago, difficult strategic With this embarked for please fleet four to this a Manitowoc able six. safety, continuous rental utilization initiative. review Since development, environment. our the each we've to quality, size acquisitions, our initiative and rates. it the our is moment productivity, to a how improvements. our our whether ESG, European that, take made high of strategy crane this our or to is during recipe we're

slowing continue we our top both make serving larger by to Additionally, new capacity key cranes. inroads tower accounts

our new growing of when also our strategy fleet flexibility rental Our sales. pursuing improves

XXX example, provides for the option. where HSX exercised for were when with and we the high an able project For us fleet. we in flexibility UK, our on train an a speed to won order This in this recently customer buyback MDT to opportunity the crane utilize an project rental offer on the

and and on relieve to mass the a mature. four which additional recently been as give the advantage we've boat with Bosphorus these stumble phases, we example, able projects a cranes cranes buyback a rental another an the our the use the us of project canal traffic sections. initial the to in position We've won expect projects on of on to As option

these new Last the and continually and new trade track region. Moving several In progress market am effectively the expand XXXA. engineering other Road scheduled our the crane our our to XXX compete models business impressed at by the model the Road China needs customers development month, models hosted two, is We of to stronger of to MCT introductions cranes innovations. month product roadmap. as line East markets, on models for by saw productive as Bauma I by the of translate voice three, factory the six launched tower Number customer highly business the next special we our number recent Wilmington, Chinese our the a since such on Russia. in we event. to latest our we Last seeing show. fall our designed new Customer launches our ability five-year our Chinese technology customer two Photon over market product of all-terrain bring producing the public and our that new spite with quickly strategy XXXX. making meaningful adoption customers Middle Belt in locally crane a excellent of most few serve are team's team and are received the our and Germany at of unique and in on of product softening, we feedback Belt the key markets. and The voice

Lastly, number four.

express the to to the sincerest project activities my Aspen our in initiative teams North would acquisitions business. Equipment upon the Regarding of strategic gratitude I crane grow closing America, like to H&E aftermarket and

of As a we H&E crane called the part new acquisition created services. equipment business MGX

new map October his and with live system new a closing to cross order Glenwright to implemented Jim on include to fantastic lean ERP the the disruptions. prior new did business. a ERP processes. Additionally, job team new we in support to The working functionally, X IT went system minimal system ERP out

tough saying We a easy. goes In inorganic tough don't North will continue environment teams the approach through The our but with not strategy American last times disciplined do. organic in growth as aftermarket is closing opportunities. current and

day. and is the transition drive aftermarket margin greater our during is bring value customer where motivated questions. dynamic driven, even is instructions] and shop challenges. I'm is opportunity with the the low resiliency to by a on business a the by Our open please and supply they long-term Goldman will tough our Revich This pervasive bring the thrive first from chain our teams Jerry for of passion unprecedented that the work customers the we experiencing to we all to how riding in able focused each company inspired passion [Operator Manitowoc, are to and crane times. question enterprise. operator, line take We'll Sachs. With value supervisors crane manufacturer are floor from That cycle that to

Ashok Sivamohan

provide Jerry cadence year? And so on locked in? on you steel component new with Sivamohan Hi, at point able coming costs? on orders actions some you this your to this this is of details have pricing can Revich. been I'm in the wondering, price what match far Ashok Are for and

Aaron Ravenscroft

Good morning Ashok.

So really to starting the just last flatten I the out at looking is couple this as looking first And months. at pricing. started commodity it's during way

depending we've last So way or the three prices, look times done over it I the increased months. product we've at lines four six when on

the we're now through on we matched shape it, last working question we're good backlog that a of It's and feel just increase we're our right that So up. top in now. like price of

but if likelihood during the of remarks, that, with going is of in that we quarter, fall in chain supply into fourth shippable, next year, the issues all obviously, that's said Dave XX% As have some than a opening his lot to more too.

work quarters the backlog that's we the pricing. So still to got two more probably have through tougher

Ashok Sivamohan

like got much to pipeline how your have Okay, And H&E runway How do the looks make it. acquisitions Crane you types to can business? the today? you M&A continue describe of

Aaron Ravenscroft

I Yes, about good feel funnel our really right now.

is going. want really the to We right think move we on now good just sure to acquisition. focus funnel next to our I keep deals two the well before is the did. of focus our internal on But make and it's integration the they're that vetted we

Ashok Sivamohan

you. thank Understood,

Aaron Ravenscroft

Thank you.

Operator

question Stephen Volkmann We'll our Jefferies. you. now from take Thank next with

Stephen Volkmann

get us me like the early, in Good morning, pricing, we're you earlier has put expansion. might as see side, guys. steel real started Can it applies if you you've Aaron, I keep saying maybe reminds your mechanisms? ask to roll the go of little you second well. it over seems sort your remember sell we're margin story where I some days so continues to only mean, 'XX, half it of to down, the just do from wrong, this maybe never of to just pricing you could about

Aaron Ravenscroft

here Yeah, buy deal, is six buy cases, so part in the this think trick out. because I how of we we it some months

buying. So obviously, we months were when ago three

industry increases. have the done we So dilemma have this we through done have always never crane work in really historically to surcharges and price

too increases really give to sticky little reduction massive steel. buffer. be. these bit to are see how does a really tell, that But it's If of price a early we us going So in

Stephen Volkmann

to Okay, trying can are should coming enough. all just you expectations specifically, things sort a guess, integrate 'XX. of H&E business is Aspen, you Fair it How the starting in if your about model then, I'm these you talk think more I little guess right. I of these and of sort bit we want, how through fitting with things. about but into maybe kind to as And

Aaron Ravenscroft

question your question. Yes, want financial Dave so it sounds really is a like you.

Dave Antoniuk

question. Yes, great so Steve,

quarter The correct. impact Aspen for minimal. the was So in

And get the for to and on as million the that, be for EBITDA And a see in are have quarter Aaron any of will 'XX. $XXX results, year however, our approximately didn't fourth will material it price. impact So expectations we third were multiple. indicated, both full quarter impact that six companies our acquisition

as Aspen And XXXX you both customers can what Manitowoc. expect So and reminder, H&E of of on in we the do math were that. a

eliminate Manitowoc equipment going which the result, first move as quarter, fourth the going and the an roughly we ending And or as a impact view, of top minimal, we Aspen that our from a add point during the fourth then in about $XX be quarter H&E inventory think ownership, line But is about EBITDA acquisitions to intercompany to have from appointment. $X in the net So a of fourth we to million. is location quarter profit to are million quarter.

Stephen Volkmann

Okay, great. Thank you, guys.

Operator

Suisse. from with And Cook Jamie Credit next you. Thank

Jamie Cook

good Hi, morning.

of Just a questions. couple

think the noted of I you that orders slowed quarter. the cadence throughout

close. and is on post of sort steel the you the guys a be guess last, of just seeing, Thank perspective, from margin, that you if at, sort you're little - My the second you give I have? solid price if and level still to generate sort more cadence you. prices that a the commentary I quarter any to need give given just be some you color that? made to So more you color guess question, what's could margin what increases So could cost XXXX then in on of challenge for going

Aaron Ravenscroft

Yes, so roughly at when call it's look I million. it $XXX backlog, the

of month price last we quarter, my So the the from increases had roughly million. and $XXX point all view, of it's the

not from Probably five covered. the covered price covered, the million rest So very you months is got well that increases. $XXX of that's with which four that's completely then of or mess is ago,

backlog lot a of the there. but work drag up and between coverage the and So really we've will but the that is on chain. tough, supply next into are Maybe going We pick concerns fourth to I view when year, will know my quarter bigger yes, we'll some backlog. outstanding be the got is that is first quarter be here then tough, through my to going quarter at looked second

to is second relative I question prices. think steel your

Jamie Cook

Yes.

Dave Antoniuk

Yes.

So we for effectively input as is that dynamic far in material price September, XXXX. as believe our costs, covered cost

So, we good we're September in position a when order we that for think from look intake at those orders. forward, all

indicated, issue facing well. labor is Aaron the constraints to us, really point the also only time but that everybody's supply only be at but the As going in as chain, not not this

looking the So to Because anything that - is we're dynamics question, lot and of ready XXXX. can we're was year. happen third dynamic, when that'll what I'm a we the about, to talk start your how between we just Jamie? going there's backlog while impact next financially, XXXX now not at sorry,

Jamie Cook

Just cadence the orders? of the sorry,

Dave Antoniuk

Okay.

increases, the orders. of lot price saw we ahead of So, a

So campaign that some normally, quarter, we it increases. before came the that have our this would price campaign winter appear winter in of

September just So it we been in how the and next out few be to October honest prior than plays had really what look you. with the months lighter seen need to to out And months. see we've over couple

Jamie Cook

queue. get I'll in thanks. Okay, back

Operator

[Operator next We'll Baird… instructions] from Mig hear with Dobre

Mig Dobre

business? the in Thanks. will on Good based on and a What even the acquisitions of the cadence here? if incremental we pricing morning. now the the I up? And core the currently a what's set So, price to incremental were backlog? What cost sometime like, parity, look where 'XX. appreciate stay have on of would you reach core some margins your quarter in collar margins structure second cost

Aaron Ravenscroft

Yes.

about half. mean, the second I more that XXXX, half, back backlogs normalized of the So margins of then margins priced, the in the but and the we have first really contribution I get lower I these think inverse in we it's margins to think where because XXXX, way when

Mig Dobre

understand, do margins just the I'm curious on look in I incremental like magnitude like that? of That environment what an should

Aaron Ravenscroft

normal it's to always say under I'd XX%. Oh, XX%

Mig Dobre

has follow-up, to my my, do then, of sort with And China.

wondering, about sort if I'm steady, a for I'm that I'm call it you business is, how it's in I obviously, you understand America it's us. trying seems mean, you're in softer be as mean a little in what getting oil pending. Does from mean on so be seems doesn't means. infrastructure think to can demand I size this demand going And seem do bit North can gas to forward? mean, progress talked of them America, growing to at to getting that here. what curious also You North that your low based better. And Does rate? hearing And customers, and that you flattish?

on I that thoughts So would appreciate.

Aaron Ravenscroft

with smallest region It's Okay, far. respect to by our China.

strengths in Road that say the countries And overall minimal it's it's by offset So of pretty terms like of company. I'd and other Korea. and somewhat the Russia Belt performance and

you and With just normal, was really dealer to overly tough prices infrastructure get stressed about when not It for is looking the America, $XX. about we the And Latin at And are too, respect correct. first that tougher, all, follow event even back still a there's countries good out an often and have positive Australia. two getting of prices, now industry that especially drive sentiment very done years now. probably they're situation payment for mentioned I'm that, of said exact the So other out week, I feel there. getting because was hey, like which And, big might to terms there has I last copper some sustainable that North we mining reasons about inventories, the oil program helps passed. and America

I we're mean, can we this to optimistic reason inflationary not think yet. get through I but there's there be out period, there, if So,

Mig Dobre

thanks. Great,

Operator

to closing to management session. the And additional question or over answer you. any conference turn today's that back remarks. does for conclude I'd Thank and like

Aaron Ravenscroft

Thank you.

for Before of us www.manitowoc.com. be Relations We call continued of available to today later the Manitowoc XXXX joining look in a third section this your replay accessing we again our and Investor conclude forward Thank quarter. note today's you that next you by conference quarter the website everyone call, speaking for will morning at please interest with our Company.

Operator

does participation. that and for today's you you conference. conclude do We your all thank Thank

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The Manitowoc Company, Inc. (MTW) 4 Nov 212021 Q3 Earnings call transcript