The Manitowoc Company, Inc. Q2 FY2025 earnings call

• Appreciated the team's hard work amidst trade reset and tariff landscape challenges. • Tariff impact: Full year gross impact now seen as $35 million, with plans to mitigate 90% of costs. • Held annual corporate kaizen at Niella, Italy, focusing on enhancing material flow for rough terrain cranes. • Safety: Recordable injury rate of 0.67 for the first half of the year. • Market updates: Europe had mixed dynamics, Middle East had strong infrastructure activity, Asia had varying conditions, North America in hold pattern. • Executed CRANES+50 strategy: Opened new service branches, expanded locations, implemented ServiceMax for better asset management.

During the second quarter, The Manitowoc Company generated $540 million in revenue and $26 million in adjusted EBITDA. Orders were $454 million, and backlog ended at $729 million. Non-new machine sales were $162 million, up 10% year-over-year. In Europe, market dynamics varied by country; the Middle East had strong activity, especially in Saudi Arabia and UAE; China faced economic headwinds but other Asian markets showed improving sentiment; North America was in a hold pattern due to tariff uncertainty.

• Guiding to the low end of the adjusted EBITDA range of $120 million to $145 million due to build plan reductions and tariff impacts. • Free cash flow expected to be on the low end of the original range, between $10 million to $15 million for the full year. • Adjusted build schedules at locations like Shady Grove and Wilhelmshaven based on backlog, orders, and demand trends.

• Uncertainty around tariff dynamics and their impact on demand. • Market demand fluctuations in different regions, especially in North America due to tariff uncertainty. • Supply chain constraints affecting deliveries.

Q: About backlog and cadence of EBITDA for the next couple of quarters, with $729 million backlog.

A: Most backlog expected to ship this year, with Q3 and Q4 having seasonality, Q4 being better.

Q: On regional order book-to-bill dynamics.

A: Americas have two worlds, MGX distribution business had good results, legacy Americas portion had slower demand due to tariff uncertainty.

Q: On tariffs, per unit impact and price vs cost dynamics.

A: Tariffs vary per unit and model, with complex mix of HTS codes and components.

Q: On U.S. market puts and takes, demand strength and confidence.

A: Crane rental houses are busy but uncertain about pricing, people managing fleets and waiting for price clarity.

Q: On U.S. market customers ordering ahead of price increases.

A: Customers were holding off due to hoping for lower tariffs, and shipping from far away creates reluctance.

Q: On tariffs offsetting and demand impact.

A: Tariffs are 15% reciprocal, dealers hit pause, and it's expected to take 6 months to sort out.

Q: On how tariffs are offset, via price increases, and targeting.

A: Very targeted, with different tariffs on components and products.

Q: On Lean thinking enhancing ability to respond to exterior events and culture.

A: Lean thinking helps in faster feedback from customers, allowing quicker adjustments to build schedules.

Q: On specific things to protect cash flow in the second half.

A: Took down build schedules at Shady Grove and Wilhelmshaven based on backlog and demand trends.

Q: On free cash flow estimate for the year.

A: Free cash flow expected on low end of original range, $10 million to $15 million, down from previous $45 million estimate.