The Manitowoc Company (MTW) Q4 2018 earnings summary

Executive summary

• 2018 net sales rose 16.8% YoY to $1,846.8M, the first annual increase since becoming a stand-alone crane business; orders grew 3% to $1,910.7M and year-end backlog reached $670.6M.

• Adjusted EBITDA was $116.2M, or 6.3% of sales, up 157 bps YoY; Q4 marked the seventh consecutive quarter of YoY adjusted EBITDA margin improvement.

• Higher crane shipments across regions and disciplined cost reductions supported better results, while reported operating results included an $82.2M goodwill impairment.

Financial highlights

• Revenue increased 16.8% to $1,846.8M; gross profit rose 16.4% to $328.1M, with gross margin flat at 17.8% as pricing offset higher input costs.

• Adjusted operating income increased $43.5M to $80.1M; adjusted EBITDA rose to $116.2M from $74.7M.

• GAAP operating loss was $19.3M versus income of $8.4M; continuing-operations net loss was $66.9M and diluted loss per share was $1.88.

• Adjusted diluted EPS was $0.64 in 2018, versus a $0.27 loss per share in 2017.

Outlook and guidance

• Year-end backlog provides a base for improving 2019 results; management described the new-product pipeline as robust and planned to showcase innovations at bauma Munich.

• Management expects challenging industry conditions to continue near term, while a leaner, more agile operating model is intended to support growth.