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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of incorporation or organization) |
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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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 March 31, 2023, the registrant had
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE MANITOWOC COMPANY, INC.
Condensed Consolidated Statements of Operations
For the three months ended March 31, 2023 and 2022
(Unaudited)
(In millions, except per share and share amounts)
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Three Months Ended |
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2023 |
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2022 |
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Net sales |
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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 expense: |
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Interest expense |
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Amortization of deferred financing fees |
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( |
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Other expense - net |
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( |
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Total other expense |
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Income before income taxes |
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Provision for income taxes |
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Net income |
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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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Diluted net income per common share |
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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 months ended March 31, 2023 and 2022
(Unaudited)
(In millions)
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Three Months Ended |
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2023 |
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2022 |
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Net income |
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$ |
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$ |
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Other comprehensive income (loss), net of income tax: |
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Unrealized losses on derivatives, net of income tax |
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Employee pension and postretirement benefit expense, net of |
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Foreign currency translation adjustments, net of income tax benefit |
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Total other comprehensive loss, net of income tax |
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Comprehensive income (loss) |
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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 March 31, 2023 and December 31, 2022
(Unaudited)
(In millions, except par value and share amounts)
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March 31, |
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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 |
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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 18) |
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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 three months ended March 31, 2023 and 2022
(Unaudited)
(In millions)
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Three Months Ended |
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2023 |
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2022 |
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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 provided by operating activities: |
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Depreciation |
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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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Net unrealized foreign currency transaction losses (gains) |
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( |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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( |
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Inventories |
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( |
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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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( |
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Net cash provided by 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 fixed assets |
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Net cash used for investing activities |
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( |
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Cash Flows from Financing Activities: |
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Payments on revolving credit facility - net |
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( |
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( |
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Other debt - net |
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( |
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( |
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Exercises of stock options |
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Common stock repurchases |
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( |
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Net cash 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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Net decrease in cash and cash equivalents |
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( |
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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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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 months ended March 31, 2023 and 2022
(Unaudited)
(In millions)
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March 31, |
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March 31, |
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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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Balance at end of period |
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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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Stock options exercised and issuance of other stock awards |
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( |
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( |
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Stock-based compensation |
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Balance at end of period |
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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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Other comprehensive 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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Retained Earnings |
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Balance at beginning of period |
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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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Treasury Stock |
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Balance at beginning of period |
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$ |
( |
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$ |
( |
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Stock options exercised and issuance of other stock awards |
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Common stock repurchases |
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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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Total stockholders' equity |
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$ |
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$ |
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The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
6
THE MANITOWOC COMPANY, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
For the three months ended March 31, 2023 and 2022
1. Company 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 months ended March 31, 2023 and 2022, the cash flows for the same three-month periods, and the financial position as of March 31, 2023 and December 31, 2022, and except as otherwise discussed, such adjustments consist of only those of a normal recurring nature. The audited balance sheet as of December 31, 2022 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, 2022. 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 share amounts, are in millions throughout the tables in these notes unless otherwise indicated.
2. Recent Accounting Changes and Pronouncements
In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-04, "Disclosure of Supplier Financing Program Obligations.” The amendments in this ASU require that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The Company adopted this ASU as of January 1, 2023. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.
7
3. Net Sales
The Company defers revenue when cash payments are received in advance of satisfying the related performance obligation. These amounts are recorded as customer advances in the Condensed Consolidated Balance Sheets.
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Three Months Ended |
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2023 |
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2022 |
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Balance at beginning of period |
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$ |
21.9 |
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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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Currency translation |
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( |
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Balance at end of period |
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$ |
24.0 |
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$ |
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Disaggregation of the Company’s revenue sources are disclosed in Note 17, “Segments.”
4
The following table sets forth the Company's financial assets and liabilities related to foreign currency exchange contracts ("FX Forward Contracts") that were accounted for at fair value as of March 31, 2023 and December 31, 2022.
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Fair Value as of March 31, 2023 |
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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 |
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$ |
— |
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$ |
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$ |
— |
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$ |
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Other current assets |
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Current Liabilities: |
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FX Forward Contracts |
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$ |
— |
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$ |
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$ |
— |
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$ |
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Accounts payable and |
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Fair Value as of December 31, 2022 |
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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 |
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$ |
— |
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$ |
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$ |
— |
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$ |
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Other current assets |
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Current Liabilities: |
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FX Forward Contracts |
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$ |
— |
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$ |
0.3 |
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$ |
— |
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$ |
0.3 |
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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 March 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. Refer to Note 5, “Derivative Financial Instruments,” for additional information.
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.
8
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 months ended March 31, 2023 and 2022.
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 months ended March 31, 2023 and 2022 are summarized as follows:
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Three Months Ended |
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Recognized Location |
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2023 |
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2022 |
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Designated |
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Cost of sales |
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$ |
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$ |
( |
) |
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Non-Designated |
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Other income (expense) - net |
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$ |
( |
) |
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$ |
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6. Inventories
The components of inventories as of March 31, 2023 and December 31, 2022 are summarized as follows:
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March 31, |
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December 31, |
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Raw materials |
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$ |
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$ |
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Work-in-process |
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Finished goods |
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Total Inventories |
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$ |
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$ |
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7. Notes Receivable
The Company has notes receivable balances that are classified as current or long-term based on the timing of amounts due. Long-term notes receivable are included within other non-current assets on the Condensed Consolidated Balance Sheets. As of March 31, 2023, the Company had current and long-term notes receivable in the amounts of $
9
8. Property, Plant, and Equipment
The components of property, plant, and equipment as of March 31, 2023 and December 31, 2022 are summarized as follows:
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March 31, |
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December 31, |
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Land |
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$ |
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$ |
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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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Less: accumulated depreciation |
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( |
) |
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( |
) |
Property, plant, and equipment - net |
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$ |
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$ |
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Property, plant, and equipment is depreciated over the estimated useful life of the asset using the straight-line depreciation method for financial reporting and accelerated methods for income tax purposes.
Assets Held for Sale
As of March 31, 2023, the Company had $
9. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill as of March 31, 2023 and December 31, 2022 are summarized as follows:
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Americas - Distribution |
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MEAP |
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Consolidated |
|
|||
Balance as of December 31, 2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Foreign currency impact |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance as of March 31, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The gross carrying amount, accumulated impairment and net book value of the Company's goodwill balances by reporting unit are summarized as follows:
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Gross Carrying Amount |
|
|
Accumulated Impairment Amount |
|
|
Net Book Value |
|
|
Gross Carrying Amount |
|
|
Accumulated Impairment Amount |
|
Net Book Value |
|
||||||
Americas - Manufacturing |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
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