Continued Decline in Mobile Crane Sales Affect Manitowoc's Third Quarter Finances
November 2, 2016 - The Manitowoc Company Inc. reported its third-quarter 2016 net sales were $349.8 million, compared to $438.2 million during same period in 2015. The year-over-year decrease was primarily due to continued deterioration within the company’s mobile crane markets, mainly in North America and the Middle East. This was partially offset by growth in tower cranes due to residential and commercial construction trends, particularly in Western Europe.
On a GAAP basis, the company reported a net loss of ($140.0) million, or ($1.01) per diluted share, in the third-quarter 2016 versus net income of $4.8 million, or $0.04 per diluted share, in the third-quarter 2015. The company’s loss from continuing operations in the third-quarter 2016 and 2015 was $138.2 million and $29.6 million, respectively.
Non-GAAP adjusted net loss from continuing operations(1) was ($38.1) million, or ($0.28) per diluted share, in the third-quarter 2016 versus a non-GAAP adjusted net loss from continuing operations of ($29.8) million, or ($0.22) per diluted share, in the third-quarter 2015.
“As previously announced, the mobile crane market continued its downward trend in the third-quarter and remains very challenging. The weak global oil and gas market, coupled with lower used equipment prices, continues to have a negative effect on demand. Our tower crane business continues to perform as expected and we look forward to its continued success as the new line of HUP products are introduced in the fourth-quarter,” said Barry Pennypacker, president and CEO.
Pennypacker added that the companyu's priority is to continue to improve quality, make significant market share gains, and right-size the business to current demand levels.
"We will do this without impacting our long-term strategy of margin expansion, growth, innovation and velocity," he said. "We have significantly cut production levels to match the lower demand and accelerated the transition of crawler crane manufacturing from Manitowoc, Wis., to Shady Grove, Pa. While this will have an adverse impact on our near-term earnings outlook, we expect this action will have a positive impact on our ability to maintain adequate liquidity levels."
Backlog totaled $353.6 million for the third-quarter, down from the second-quarter 2016 backlog of $393.5 million. Third-quarter 2016 orders of $309.9 million were lower by approximately $28 million or 8% compared to the third-quarter 2015. The third-quarter 2016 orders also included approximately $10 million of prototype units for the U.S. military, of which approximately $3 million was shipped in the quarter. The year-over-year order decline is due to continued softness in the North American and Middle East markets, partially offset by growth in Western Europe.
Net cash flow from operating activities in the third-quarter 2016 was a use of $3.0 million, which includes continuing and discontinued operations. This compares to a source of net cash flow from operating activities in the third-quarter 2015 of $6.3 million, which also included continuing and discontinued operations. Third-quarter capital expenditures totaled $10.1 million as compared to $9.4 million in the third-quarter 2015.
