Foreign currency losses and the unprecedented conditions created by the Covid-19 pandemic have affected Manitowoc’s sales and product delivery.
Manitowoc reported a first-quarter net loss of $7.8 million, or $0.22 per diluted share. The company said first-quarter adjusted net loss of $6.3 million, or $0.18 per diluted share, declined $9 million year-over-year. First-quarter adjusted net loss included $4 million of other expense primarily related to foreign currency losses, the company said. Manitowoc also reported net sales of $329.2 million and adjusted EBITDA(1) of $16.3 million, or 5 percent of sales.
First-quarter orders of $375 million declined 15 percent from the prior year. Orders were unfavorably impacted by approximately $5.1 million due to changes in foreign currency exchange rates, the company said. Backlog as of March 31, 2020 totaled $520.9 million.
As of March 31, 2020, the company had total liquidity of $382 million, including $103.6 million of cash, $244.2 million of borrowing capacity on its Asset Based Lending revolving credit facility and $38.2 million of availability on its non-committed European overdraft lines. During the quarter, the company did not borrow on its Asset Based Lending revolving credit facility.
“Our first-quarter adjusted EBITDA of $16.3 million was in line with our planned expectations, despite the unprecedented conditions created by the COVID-19 pandemic,” said Barry Pennypacker, president and CEO. ”This was made possible by the extraordinary commitment of our talented and resolute team. During this pandemic, our primary goal remains unchanged, ensuring the safety, health and well-being of all our employees, their families, our suppliers and customers. Our dedicated teams are working hard to deliver cranes and provide essential parts and services, and I could not be prouder of their commitment to our high standards while balancing personal challenges. We are grateful for the efforts our healthcare providers and first responders are making, and we are proud to support these front-line professionals by committing $100,000 from The Manitowoc Company Foundation in the fight against COVID-19.”
He said that while the company remained operational in the U.S., its major facilities in Europe began closing in mid-March, which delayed the ability to ship products.
”It is unclear how events unfold from here, however with ample liquidity and no significant debt maturities until 2026 we are well positioned to weather circumstances like this crisis,” Pennypacker said. ”We continue to analyze all of our costs and take appropriate actions. We have substantially cut discretionary spending, while eliminating salary increases across the enterprise, including executives and board members. Furloughs, as well as temporary plant shutdowns, are also being planned based upon our order rates. In order to proactively manage our liquidity, we are significantly cutting our capital spending this year as well as suspending our share buyback program. Manitowoc entered this uncertain period as a more agile company and market leader with a strong balance sheet, and I am confident that we will emerge stronger when end markets successfully recover.”.
Due to uncertainty related to the COVID-19 pandemic, the Manitowoc withdrew guidance on March 27, 2020 and is not providing a financial outlook for 2020 at this time. While Manitowoc, its suppliers and customers operations have begun to resume activity, the company does expect a significant impact to its second quarter and full year results due to the magnitude of supply chain and business disruptions.
According to a press release, Manitowoc ”anticipates weaker demand levels to continue in the near term. In response to these challenges, the company has reduced its production levels and initiated a set of cost reduction actions and will continue to closely monitor market conditions and adjust its plans accordingly.”