MANITOWOC CO INC

Previous wording

All dollar amounts are in millions throughout the tables included in Management’s Discussion and Analysis of Financial Conditions and Results of Operations unless otherwise indicated.

Current wording

All dollar amounts are in millions throughout the tables included in Management’s Discussion and Analysis of Financial Condition and Results of Operations unless otherwise indicated.

Previous wording

Macroeconomic conditions, including inflation, high interest rates and recessionary concerns, as well as continuing global supply chain constraints, labor constraints, logistics constraints and cost pressures such as changes in raw material and commodity costs, have had, and may continue to have, a negative impact on Manitowoc’s ability to convert backlog into revenue which could, and has, impacted its financial condition, cash flows, and results of operations (including future uncertain impacts);

Current wording

Macroeconomic conditions, including inflation, elevated interest rates, and tariffs, as well as prior supply chain, labor and logistics constraints, have had, and may continue to have, a negative impact on Manitowoc’s ability to convert backlog into revenue which could, and has, impacted its financial condition, cash flows, and results of operations (including future uncertain impacts);

Previous wording

changes in economic or industry conditions generally or in the markets served by Manitowoc;

Current wording

changes in economic or industry conditions generally or in the markets served by Manitowoc, including tariffs;

Previous wording

geopolitical events, including the ongoing conflicts in Ukraine and in the Middle East, other political and economic conditions and risks and other geographic factors, has had and may continue to lead to market disruptions, including volatility in commodity prices (including oil and gas), raw material and component costs, energy prices, inflation, consumer behavior, supply chain, and credit and capital markets, and could result in the impairment of assets;

Current wording

geopolitical events, including the ongoing conflicts in Ukraine and in the Middle East, tariffs, other political and economic conditions and risks and other geographic factors, has had and may continue to lead to market disruptions, including volatility in commodity prices (including oil and gas), raw material and component costs, energy prices, inflation, consumer behavior, supply chain, and credit and capital markets, and could result in the impairment of assets;

Previous wording

Orders and backlog are not measures defined by GAAP and our methodology for determining orders and backlog may vary from the methodology used by other companies. Management uses orders and backlog for capacity and resource planning. The Company believes this information is useful to investors to provide an indication of future revenues. Backlog represents the dollar value of orders which are expected to be recognized in net sales in the future. Orders are included in backlog when an executed binding contract with a price that has a floor has been received but has not been recognized in net sales.

Current wording

Orders and backlog are not measures defined by accounting principles generally accepted in the United States of America ("GAAP") and our methodology for determining orders and backlog may vary from the methodology used by other companies. Management uses orders and backlog for capacity and resource planning. The Company believes this information is useful to investors to provide an indication of future revenues. Backlog represents the dollar value of orders which are expected to be recognized in net sales in the future. Orders are included in backlog when an executed binding contract with a price that has a floor has been received but has not been recognized in net sales.

Previous wording

As of September 30, 2024, total backlog was $742.1 million, a 19.1% decrease from the December 31, 2023 backlog of $917.2 million, and a 27.8% decrease from the September 30, 2023 backlog of $1,028.1 million. The decrease in backlog from December 31, 2023, was primarily attributable to lower demand during the year. Backlog was favorably impacted from changes in foreign currency exchange rates by $1.4 million and $11.4 million from December 31, 2023 and September 30, 2023, respectively.

Current wording

As of March 31, 2025, total backlog was $797.8 million, a 22.7% increase from the December 31, 2024 backlog of $650.2 million, and a 17.9% decrease from the March 31, 2024 backlog of $971.3 million. Backlog was favorably impacted by $9.3 million and $0.4 million from December 31, 2024 and March 31, 2024, respectively, from changes in foreign currency exchange rates.

Previous wording

Results of Operations For The Three and Nine Months Ended September 30, 2024 and 2023:

Current wording

Results of Operations for the three months ended March 31, 2025 and 2024:

Previous wording

Gross profit for the nine months ended September 30, 2024 was $279.8 million, a decrease of $46.3 million as compared to $326.1 million for the same period in 2023. The decrease was primarily attributable to the lower net sales, unfavorable product mix and lower absorbed costs due to lower manufacturing volume in the EURAF segment. Gross profit was favorably impacted by $0.4 million from changes in foreign currency exchange rates.

Current wording

Gross profit for the three months ended March 31, 2025 decreased 2.9% to $89.8 million from $92.5 million for the same period in 2024. This decrease was primarily due to lower net sales and lower absorbed costs due to lower manufacturing volume in the Americas segment, partially offset by favorable product mix. Gross profit was unfavorably impacted by $1.1 million from changes in foreign currency exchange rates.

Previous wording

Gross profit percentage decreased in the three months ended September 30, 2024 to 16.7% from 18.6% for the same period in 2023 primarily due to unfavorable product mix and lower absorbed costs due to lower manufacturing volume in the EURAF segment.

Current wording

Gross profit percentage increased in the three months ended March 31, 2025 to 19.1% from 18.7% for the same period in 2024. This increase was primarily due to favorable product mix, partially offset by lower absorbed costs due to lower manufacturing volume in the Americas segment.

Previous wording

Interest expense for the three months ended September 30, 2024 was $9.6 million as compared to $8.4 million for the same period in 2023. Interest expense increased year-over-year primarily due to higher average debt during the period and higher interest rates on borrowings from the Company's ABL revolving credit facility. See further detail at Note 10, “Debt” to the Condensed Consolidated Financial Statements.

Current wording

Interest expense for the three months ended March 31, 2025 decreased 5.4% to $8.7 million from $9.2 million for the same period in 2024. The decrease was primarily due to lower average debt and lower interest rates on borrowings from the Company’s ABL revolving credit facility.

Previous wording

A summary of cash flows for the nine months ended September 30, 2024 and 2023 are as follows:

Current wording

A summary of cash flows for the three months ended March 31, 2025 and 2024 are as follows:

Previous wording

Net cash used for investing activities of $29.1 million for the nine months ended September 30, 2024 decreased $25.5 million from$54.6 million for the same period in 2023. The decrease in net cash used for investing activities was due to $25.5 million of lower capital expenditures.

Current wording

Net cash used for investing activities of $23.6 million for the three months ended March 31, 2025 increased $11.6 million from $12.0 million for the same period in 2024. The increase in net cash used for investing activities was primarily due to $12.9 million of cash outflows related to the purchase of certain assets and territory from Ring Power Corporation.

Previous wording

Net cash provided by financing activities of $81.0 million for the nine months ended September 30, 2024 increased $73.6 million from$7.4 million for the same period in 2023. The increase in net cash provided by financing activities was primarily due to $77.4 million of additional proceeds from the revolving credit facility and a $9.6 million increase of proceeds from other debt – net when compared to the prior year. This was partially offset by $6.7 million of payments for other financing activities and $6.2 million of payments for debt issuance costs related to the refinancing of the ABL Revolving Credit Facility and 2026 Notes.

Current wording

Net cash provided by financing activities of $3.2 million for the three months ended March 31, 2025 decreased $37.0 million from $40.2 million for the same period in 2024. The decrease in net cash provided by financing activities was primarily driven by $15.0 million of payments on the revolving credit facility in the current year and $25.8 million of lower proceeds from other debt - net when compared to the prior year. This is partially offset by $3.9 million of additional proceeds from the revolving credit facility when compared to the prior year.

Previous wording

The Company has historically relied primarily on cash flows from operations, borrowings under revolving credit facilities and overdraft facilities, issuances of notes, and other forms of debt financing as its sources of cash.

Current wording

The Company has historically relied primarily on cash flows from operations, borrowings under revolving credit facilities, issuances of notes and other forms of debt financing as its sources of cash.

Previous wording

The maximum availability under the Company’s current ABL Revolving Credit Facility is $325.0 million. The borrowing capacity under the ABL Revolving Credit Facility is based on the value of inventory, accounts receivable and certain fixed assets of the Loan Parties. The Loan Parties’ obligations under the ABL Revolving Credit Facility are secured on a first-priority basis, subject to certain exceptions and permitted liens, by substantially all of the personal property and fee-owned real property of the Loan Parties. The liens securing the ABL Revolving Credit Facility are senior in priority to the second-priority liens securing the obligations under the 2031 Notes and the related guarantees. The ABL Revolving Credit Facility has a maturity date of September 18, 2029, and includes a $75.0 million letter of credit sub-facility, $10.0 million of which is available to the German Borrower.

Current wording

The maximum availability under the Company’s current ABL Revolving Credit Facility is $325.0 million, of which $100.0 million is available to our German subsidiary. The borrowing capacity under the ABL Revolving Credit Facility is based on the value of inventory, accounts receivable, and certain fixed assets of the Loan Parties. The Loan Parties’ obligations under the ABL Revolving Credit Facility are secured on a first-priority basis, subject to certain exceptions and permitted liens, by substantially all of the personal property and fee-owned real property of the Loan Parties. The liens securing the ABL Revolving Credit Facility are senior in priority to the second-priority liens securing the obligations under the 2031 Notes and the related guarantees. The ABL Revolving Credit Facility has a maturity date of September 18, 2029, and includes a $75.0 million letter of credit sub-facility, $10.0 million of which is available to the Company's German subsidiary that is a borrower under this facility.

Previous wording

In addition to the ABL Revolving Credit Facility, the Company has access to committed and non-committed lines of credit to fund working capital in Europe and China. There are six lines of credit, of which five are denominated in Euros totaling €37.0 million and one denominated in Chinese Yuan for ¥30.0 million. Total U.S. dollar availability as of September 30, 2024 for the six lines of credit is $45.5 million, with $39.5 million outstanding.

Current wording

In addition to the ABL Revolving Credit Facility, the Company has access to committed and non-committed lines of credit to fund working capital in Europe and China. There are six facilities, of which five facilities are denominated in Euros totaling €37.0 million and one facility denominated in Chinese Yuan totaling ¥30.0 million. Total U.S. dollar availability as of March 31, 2025 for the six overdraft facilities is $44.2 million, with $16.8 million outstanding.

Previous wording

Both the ABL Revolving Credit Facility and 2031 Notes include customary covenants and events of default. Refer to Note 10, “Debt,” to the Condensed Consolidated Financial Statements for additional discussions of covenants for the ABL Revolving Credit Facility and 2031 Notes. Based upon management’s current plans and outlook, the Company believes it will be able to comply with these covenants during the subsequent twelve months. From time to time, the Company seeks to opportunistically raise capital in the debt capital markets and bank credit markets.

Current wording

Both the ABL Revolving Credit Facility and 2031 Notes include customary covenants and events of default. Refer to Note 11, “Debt,” to the Condensed Consolidated Financial Statements for additional discussions of the covenants for the ABL Revolving Credit Facility and the 2031 Notes. As of March 31, 2025, the Company was in compliance with all affirmative and negative covenants in its debt instruments, inclusive of the financial covenants pertaining to the ABL Revolving Credit Facility and 2031 Notes. Based upon management’s current plans and outlook, the Company believes it will be able to comply with these covenants during the subsequent twelve months. From time to time, the Company seeks to opportunistically raise capital in the debt capital markets and bank credit markets.

Previous wording

Adjusted ROIC is determined by dividing adjusted net operating profit after tax (“Adjusted NOPAT”) for the trailing twelve-months ended by the five-quarter average of invested capital. Adjusted NOPAT is calculated for each quarter by taking operating income plus the addback of amortization of intangible assets, and the addback or subtraction of restructuring expenses, other non-recurring items – net, and provision for income taxes, which is determined using a 15% tax rate. Invested capital is defined as net total assets less cash and cash equivalents and income tax assets - net plus short-term and long-term debt. Income taxes are defined as income tax payables/receivables, net deferred tax assets/liabilities, and uncertain tax positions.

Current wording

Adjusted ROIC is determined by dividing adjusted net operating profit after tax (“Adjusted NOPAT”) for the trailing twelve-months ended by the five-quarter average of invested capital. Adjusted NOPAT is calculated by taking operating income plus the addback of amortization of intangible assets and the addback or subtraction of restructuring expenses, other non-recurring items - net, and provision for income taxes, which is determined using a 15% tax rate. Invested capital is defined as net total assets less cash and cash equivalents and income tax assets - net plus short-term and long-term debt. Income taxes are defined as income tax payables/receivables, net deferred tax assets/liabilities, and uncertain tax positions.

Previous wording

The Company’s Adjusted ROIC as of September 30, 2024 was 6.2%. Below is the calculation of Adjusted ROIC as of September 30, 2024.

Current wording

The Company’s Adjusted ROIC as of March 31, 2025 was 5.1%. Below is the calculation of Adjusted ROIC as of March 31, 2025.

Previous wording

(1) Other non-recurring items - net for the three months ended September 30, 2024 relate to $2.6 million of costs associated with a legal matter with the U.S. EPA. Other non-recurring items – net for the trailing twelve months relate to $18.3 million of costs associated with a legal matter with the U.S. EPA and $0.6 million of one-time costs. Refer to the Company’s previously filed Form 10-K and Form 10-Qs for a description of other non-recurring items - net for the three months ended June 30, 2024, March 31, 2024, and December 31, 2023.

Current wording

(1) Other non-recurring items – net for the trailing twelve months relate to $8.9 million of costs associated with a legal matter with the U.S. EPA and $0.1 million of one-time costs. Refer to the Company’s previously filed Form 10-K and Form 10-Qs for a description of other non-recurring items - net for the three months ended December 31, 2024, September 30, 2024, and June 30, 2024.

Previous wording

The Company defines EBITDA as net income (loss) before interest, taxes, depreciation, and amortization. The Company defines adjusted EBITDA as EBITDA plus the addback or subtraction of restructuring expense, other (income) expense - net, and other non-recurring items - net. The reconciliation of net income (loss) to EBITDA, and further to adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023 and trailing twelve months is summarized as follows.

Current wording

The Company defines EBITDA as net income (loss) before interest, taxes, depreciation, and amortization. The Company defines adjusted EBITDA as EBITDA plus the addback or subtraction of restructuring expense, other income (expense) - net, and certain other non-recurring items.

Previous wording

Other non-recurring items - net for the three months ended September 30, 2024 relate to $2.6 million of costs associated with a legal matter with the U.S. EPA. Other non-recurring items - net for the nine months ended September 30, 2024 relate to $7.9 million of costs associated with a legal matter with the U.S. EPA and $0.2 million of one-time costs. Other non-recurring items - net for the three months ended September 30, 2023 relate to $0.2 million of one-time costs. Other non-recurring items - net for the nine months ended September 30, 2023 relate to $10.8 million of costs associated with a legal matter with the U.S. EPA and $0.2 million of one-time costs. Other non-recurring items – net for the trailing twelve months relate to $18.3 million of costs associated with a legal matter with the U.S. EPA and $0.6 million of one-time costs.

Current wording

Other non-recurring items - net for the three months ended March 31, 2024 relate to $0.1 million of one-time costs. Other non-recurring items - net for the trailing twelve months relate to $8.9 million of costs associated with a legal matter with the U.S. EPA and $0.1 million of one-time costs.

Previous wording

Other (income) expense - net includes net foreign currency gains (losses), other components of net periodic pension costs, and other items in the three, nine, and trailing twelve months ended September 30, 2024 and the three and nine months ended September 30, 2023. Other expense – net for the nine and trailing twelve months ended September 30, 2023 includes a $9.3 million write-off of non-cash foreign currency translation adjustments from the curtailment of operations in Russia.

Current wording

Other (income) expense - net includes net foreign currency gains (losses), other components of net periodic pension costs, and other items in the three and trailing twelve months ended March 31, 2025 and the three months ended March 31, 2024.

Previous wording

Free cash flows is defined as net cash provided by (used for) operating activities less cash outflow from investment in capital expenditures. The reconciliation of net cash used for operating activities to free cash flows for the nine months ended September 30, 2024 and 2023 is summarized as follows.

Current wording

Free cash flows is defined as net cash provided by (used for) operating activities less cash outflow from investment in capital expenditures. The reconciliation of net cash provided by (used for) operating activities to free cash flows for the three months ended March 31, 2025 and 2024 are summarized as follows: