MANITOWOC CO INC Q1 FY2025 earnings call

• Thanked the team for a difficult quarter where revenue and adjusted EBITDA exceeded expectations. Orders were strong at $610 million, and backlog was near $800 million. - Participated in the Bauma Trade Show in Munich, showcasing various products including a hybrid all-terrain crane and new aftermarket solutions. - Modeled $60 million in incremental tariff costs with 80%-90% mitigation plans. - Department of Commerce initiated an investigation into tower cranes from Japan. - Over 9 years, significant actions taken to improve crawler crane product line, including closing a factory and reducing headcount. - Best quarter ever in safety metrics; integrated AI into improvement process, saving 2,000 man hours and $400,000. - Implemented CRANES+50 Strategy focusing on growing aftermarket, transitioning to a customer-focused company. - Investments in European tower crane business, Middle East projects, all-terrain product line in Germany, Latin America service capabilities, and US dealer acquisitions. - Non-new machine sales reached a record $645 million in trailing 12 months.

During the first quarter, The Manitowoc Company generated $471 million in revenue and $22 million in adjusted EBITDA. Orders were $610 million, and backlog ended just short of $800 million. Non-new machine sales were $161 million, up 11% year-over-year. In the European tower crane business, new machine orders saw a 68% year-over-year increase for the third consecutive quarter. North America first quarter orders through the third party dealer channel increased 35% year-over-year. The Middle East had a small year-over-year decline in first quarter orders but remained robust in deal activity. Dealer inventory for tower cranes in Europe was at historically low levels.

• Maintained full year 2025 guidance: net sales expected to be $2.175 billion to $2.275 billion and adjusted EBITDA $120 million to $145 million. - Tariffs are modeled to have $60 million incremental costs with 80%-90% mitigation. - No major change in demand forecasted due to the fluid nature of tariffs and price elasticity of cranes.

• Tariffs pose a $60 million incremental cost risk, though mitigation plans are in place. - Department of Commerce investigation into tower cranes from Japan introduces uncertainty. - Fluid nature of the tariff situation and potential impact on demand are risks.

Q: Could you unpack the mitigation to the tariff numbers, proportion of supplies vs pricing, and if tariffs could be an opportunity for benefit?

A: Mitigations include price increases, alternative sourcing, and vendor sharing. It's unclear if there will be big benefits as yen movement and other factors play out.

Q: How much of the $45 million China-related tariff impact and what tariff level is assumed?

A: It's a combination of China tariffs and steel/aluminum 232 tariffs, with mitigation factors depending on actual tariffs hit.

Q: Unpack the increased demand in Europe, what's driving it and comparison to prior cycle highs?

A: Recovery is broad-based with low dealer inventory and utilization, but still a ways from peak.

Q: Clarified tariff impact on US raw materials and backlog repricing?

A: Part of the $45 million tariff impact includes raw materials, and tariffs on backlog units will be addressed via surcharges.

Q: U.S. non-residential construction momentum and non-new machine sales visibility?

A: Non-residential construction has momentum in areas like data centers, and non-new machine sales are broad-based with continued growth expected as service techs are utilized more.