Manitowoc (MTW) Reports Q3 Prelim. Results

October 19, 2016 5:22 PM EDT

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The Manitowoc Company, Inc. (NYSE: MTW) announced today preliminary results for its third quarter ended September 30, 2016.

As of the date of this release, the company has not completed its financial statement reporting process for the quarter. During the course of that process, the company may identify items that would require it to make adjustments, which may be material, to the preliminary financial information presented below. As a result, the preliminary unaudited financial information included in this release is subject to risks and uncertainties.

Preliminary Unaudited Financial Information for Third-Quarter 2016

For the third-quarter 2016, net sales are expected to be approximately $350 million versus $438 million in the third-quarter 2015.

(Street sees Q3 revenue of $346 million)

On a GAAP basis, for the third-quarter 2016, the company expects to report a loss from continuing operations of approximately ($138) million as compared to a loss from continuing operations of ($30) million in the third-quarter 2015.

GAAP operating loss for the third-quarter 2016 is expected to be approximately ($134) million, compared to ($8) million in the third-quarter 2015, and includes $77 million of impairment charges related to certain software assets (primarily ERP software) and restructuring and impairment costs related to the relocation of crawler and tower crane manufacturing operations.

Non-GAAP adjusted operating loss(1) for the third-quarter 2016 is expected to be approximately ($31) million compared to ($8) million in the same period last year. Although the 2016 non-GAAP adjusted operating loss excludes certain items, it includes approximately $30 million of adjustments as outlined in the below schedule of non-GAAP items.

“Orders and backlog for the company declined double digits during the third quarter, and these trends have continued into the fourth quarter. Subsequently, we’ve significantly reduced our production build schedules for Mobile products to reflect these lower incoming order rates. In addition, we are accelerating the relocation of the Manitowoc crawler production to Shady Grove, taking additional headcount reductions, reducing other non-employee costs, and temporarily shutting-down certain mobile production lines during the fourth quarter. While this will negatively affect gross profits for the balance of the year, we believe it will put us in a better position to manage cash flow in the current environment,” said Barry Pennypacker, President & CEO.

Pennypacker continued, “In spite of on-going challenges in the crane market, the company has made excellent progress on its cost initiatives while it continues to invest in new products and product improvement initiatives. Although the current business environment remains difficult, we are confident in our long-term strategy, targeting double-digit operating margins by 2020.”

Investor Conference Call

On Tuesday, November 1st, 2016, the company will release its third-quarter 2016 financial results, after the close of market. The company will discuss its third-quarter earnings results and updated full-year outlook during a live conference call for security analysts and institutional investors at 10:00 a.m. ET (9:00 a.m. CT) Wednesday, November 2nd, 2016. A live audio webcast of the call, along with the related presentation, can be accessed in the Investor Relations section of Manitowoc’s website at http://www.manitowoc.com. A replay of the conference call will also be available at the same location on the website.

Below is a reconciliation of preliminary operating loss on a GAAP basis to adjusted operating loss (in millions; all 2016 data is preliminary and subject to change):

Schedule of Non-GAAP Items
Three Months Ended
September 30,
2016 2015
Net income (loss) $(140.0) $4.8
Loss (income) from discontinued operations 1.8 (34.4)
Loss from continuing operations $(138.2) $(29.6)
Operating loss $(133.5) $(8.2)
Adjustments:
Asset impairment 96.9 -
Restructuring 3.9 (0.4)
Amortization 0.7 0.8
Other 0.5 0.1
Non-GAAP adjusted operating loss $(31.5) $(7.7)
Adjustments included in Non-GAAP adjusted operating loss:
Inventory reserves 9.4
Losses from decline in used crane values 13.5
Product improvement initiatives 3.4
Plant variances 3.6
Total $29.9



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