Pandemic affects Manitowoc’s second quarter financials

The Manitowoc Company reported a second-quarter net loss of US$12.7 million, or $0.37 per diluted share. Second-quarter adjusted net loss of $16.2 million, or $0.47 per diluted share, declined $49.7 million year-over-year.

Net sales in the second quarter of 2020 decreased 35 percent, year-over-year to $328.3 million. The Covid-19 pandemic coupled with weak economic activity impacted demand in all regions, the company said. Adjusted EBITDA of $7.8 million, or 2.4 percent of sales, declined $45.5 million mainly due to the sales decline and reduced manufacturing activity in the quarter.

Second-quarter orders of $237.8 million declined 36.1 percent from the prior year. Backlog as of June 30, 2020 totaled $430.5 million, a decrease of 17 percent from March 31, 2020.

“Our second-quarter adjusted EBITDA of $7.8 million reflected good operational performance and was in line with our expectations, considering the vast challenges posed by the ongoing Covid-19 pandemic,” said Aaron Ravenscroft, newly appointed president and CEO. “I am proud of our team’s resilience as we continue to operate with excellence and meet our customers’ expectations, while protecting the well-being of our employees and partnering with our supply chain during this global pandemic.”

He said that during the company’s 117-year history it has endured several unforeseen crises and he is confident the company will successfully navigate this one. 

”The strengths that are core to Manitowoc’s business – our people, our products and brands, our network and our operational excellence – guide every decision we make and position us for success when demand returns.”

At the company’s investor conference call held on Thursday, August 6, Ravenscroft answered questions about the company’s financial health, cost cutting measures, future acquisitions and the Department of Commerce Article 232 investigation in response to a Manitowoc petition filed late last year. In response to a question about proposed tariffs on cranes imported into the United States, should the Department of Commerce rule in favor of Manitowoc’s petition, Ravenscroft appeared to pivot to a new direction.  

“I am on Day Two of the job and we have a couple days left to submit final comments,” he said “After my initial reviews, I believe that tariffis may not be the best solution. And while we believe strongly in fair trade, we surely don’t want to burden our customers with additional costs particularly in this environment. So, we’ve got some more work to do between now and August 10.”

As far as a timeline, Ravescroft said it was up to the government. 

“In terms of responses, I think that really varies relative to what the U.S. Department of Commerce wants to do,” he said. “At the end of the day, it’s driven by the President of the United States and his team. It can move very quickly, or it can follow the more regimented process. It’s been more than 270 days since we filed the position.”

The company will not provide full year guideance for 2020 due to market uncertainty due to the impact of the pandemic.