Earnings call transcript: Manitowoc misses Q2 2025 estimates, stock drops

Manitowoc Company Inc. (MTW), a leading manufacturer of cranes, reported its second-quarter earnings, revealing a significant miss on both earnings per share (EPS) and revenue forecasts. The company’s stock fell sharply by 12.23% in pre-market trading following the announcement. Actual EPS came in at $0.08, falling short of the forecasted $0.20 by 60%. Revenue also missed expectations, totaling $539.5 million against a forecast of $573.16 million, a 5.87% shortfall. According to InvestingPro data, the company trades at a P/E ratio of 8.44x, suggesting a relatively low earnings multiple despite recent challenges.

Key Takeaways

• Manitowoc’s EPS and revenue both missed forecasts significantly, leading to a sharp stock decline.
• The company reported a 4% year-over-year decrease in revenue.
• Non-new machine sales grew by 10% year-over-year, showing strength in aftermarket business.
• Free cash flow guidance was revised down from $45 million to $10-$15 million.
• Cautious outlook for the next six months, with optimism for early 2026.

Company Performance

Manitowoc’s overall performance in Q2 2025 reflected challenges in the global market, with a 4% decrease in revenue year-over-year. Despite this, the company saw a 10% increase in non-new machine sales, indicating strong performance in its aftermarket business. Orders increased by 6% from the previous year, with an ending backlog of $729 million. InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 2.07, indicating sufficient assets to cover short-term obligations.

Financial Highlights

• Revenue: $540 million (down 4% year-over-year)
• Adjusted EBITDA: $26 million (down $10 million year-over-year)
• Adjusted Diluted EPS: $0.08 (decrease of $0.17 year-over-year)
• Net Working Capital: $580 million (up $63 million year-over-year)
• Cash Balance: $33 million

Earnings vs. Forecast

Manitowoc’s Q2 2025 EPS was $0.08, missing the forecasted $0.20 by 60%. Revenue was $539.5 million, falling short of the $573.16 million forecast by 5.87%. This significant miss contrasts with the company’s historical earnings performance, where volatility has been a common theme.

Market Reaction

Following the earnings announcement, Manitowoc’s stock price dropped by 12.23% in pre-market trading. The stock closed at $12.51 prior to the earnings release and was trading at $10.98 shortly after. This movement places the stock closer to its 52-week low of $7.06, reflecting negative investor sentiment driven by the earnings miss. Despite recent volatility, InvestingPro data indicates the stock remains undervalued based on its proprietary Fair Value model. The stock has shown resilience with a 28.44% return over the past six months, suggesting potential for recovery. Discover more insights and 8 additional ProTips with an InvestingPro subscription.

Outlook & Guidance

Manitowoc revised its free cash flow guidance down to $10-$15 million from an initial expectation of $45 million, citing market uncertainties. The company remains cautious about the next six months but is optimistic about early 2026, anticipating potential market acceleration due to low dealer inventories.

Executive Commentary

CEO Aaron Ravenscroft emphasized the company’s focus on customer service amidst global uncertainties. "While the global political and economic situation remains unpredictable, our focus stays squarely on servicing our customers," he stated, highlighting the importance of strong partnerships.

Risks and Challenges

• Supply chain disruptions continue to pose challenges.
• Economic headwinds in China and other key markets could impact future performance.
• Reduced free cash flow guidance indicates potential liquidity concerns.
• Tariff impacts remain a significant cost factor.

Q&A

During the earnings call, analysts questioned the company’s tariff impacts and pricing strategies, as well as regional order dynamics. CEO Ravenscroft addressed challenges in the U.S. market due to pricing uncertainty and detailed the company’s approach to managing supply chain and build schedules. For a comprehensive analysis of Manitowoc’s financial health and future prospects, including detailed valuation metrics and expert insights, check out the full Pro Research Report available exclusively on InvestingPro.

Full transcript - Manitowoc Company Inc (MTW) Q2 2025:

Conference Operator: Good day, and welcome to the Manitowoc Company Second Quarter of twenty twenty five Earnings Conference Call. Please note that today’s event is being recorded and all participants will be in a listen only mode. I would now like to turn the call over to Ion Warner, Vice President, Marketing and Investor Relations. Please go ahead.

Ion Warner, Vice President, Marketing and Investor Relations, Manitowoc Company: Good morning, everyone, and welcome to our earnings call to review the company’s second quarter twenty twenty five financial performance and business update as outlined in last evening’s press release. Joining me this morning with prepared remarks are Aaron Ravenscroft, our President and Chief Executive Officer and Brian Regan, our Executive Vice President and Chief Financial Officer. Earlier this morning, we posted our slide presentation on the Investor Relations section on our website, anathwalk.com, which you can use to follow along with our prepared remarks. Please turn to Slide two. Before we start, please note our Safe Harbor statement and the material provided for this call.

During today’s call, forward looking statements as defined in the Private Securities Litigation Reform Act of 1995 are made based on the company’s current assessment of its markets and other factors that affect its business. However, actual results could differ materially from any implied or actual projections due to one or more of the factors, among others, described in the company’s latest SEC filings. The Manitowoc Company does not undertake any obligation to update or revise any forward looking statement, whether as a result of new information, future events or other circumstances. And with that, I will now turn the call over to Aaron.

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: Thank you, Ion, and good morning, everyone. Please turn to Slide three. To start, I’d like to express my deep appreciation for the hard work of the Manitowoc team. While While the great trade reset continues, I’m really proud of how our teams continuously reacts to the ever changing tariff landscape and focuses on finding solutions to service our customers. During the second quarter, we generated $540,000,000 in revenue and $26,000,000 in adjusted EBITDA.

Orders were $454,000,000 and backlog ended the period at $729,000,000 Our non new machine sales were $162,000,000 up 10% year over year. In terms of tariffs, during our first quarter call, we were modeling 60,000,000 in incremental tariffs for the year with plans to mitigate 80% to 90% of these costs. Today, we believe the full year gross impact of tariffs is $35,000,000 The change in our assumption is due to a combination of lower purchases and a different mix of various tariffs. We expect to mitigate 90% of these costs. Given the fluid nature of the situation and the price elasticity of cranes in the short term, we see a drag on demand in The United States.

Moving to the Manitowoc Way, we recently held our annual corporate Kaizen in Niela, Italy. For this Kaizen, we organized four dedicated teams to focus on enhancing the information and material flow essential to building rough terrain cranes. As always, a good Kaizen is a humbling experience. It reminds us that running a production line smoothly is only possible if all of the necessary parts are available exactly when needed, and sometimes that’s a big if. Team walked away with a year’s worth of action items, but what stood out most was the continued growth in collaboration and teamwork across the organization.

It’s inspiring to see how we keep getting better together. Also, I’d like to thank Ransom Research and Front Street Capital Management for their valuable participation in the event. Quickly touching on safety, I’d like to recognize our team’s steadfast efforts to improve our working environment. For the first half of the year, we achieved recordable injury rate or RIR of 0.67, which is another new safety record. Our goal is zero, but I’m proud that we continue to make progress towards it.

Please move to Slide four for my market update. Starting with Europe, we’re seeing two distinct market dynamics depending on the country. In The U. K, Netherlands and France, demand has been slow. In contrast, customers in Spain, Italy and Germany are showing signs of optimism, and we sense that business is starting to rebound.

Across Europe, we’ve recently seen three encouraging data points. Number one, The U. K. Launched a GBP 39,000,000,000 housing program for the next ten years with a goal of building 300,000 homes. Number two, last month in Germany, the government passed a new accelerated depreciation scheme, which complements the €500,000,000,000 infrastructure fund that was recently created.

And number three in France, we saw May housing permits turn favorable, up 20% year over year. On a product line basis, despite great excitement following the April Obama trade show, momentum in the mobile crane market moderated during the quarter. At this point, we need to wait until after the summer holiday to get a clearer picture on demand. Conversely, however, the tower crane market has continued to be positive. While the market hasn’t fully recovered, we still have easy comparisons, which is always the birth of a rebound.

During the quarter, our new Tower Crane orders were up 104 versus the same period a year ago. This is the fourth quarter in a row that we have seen orders improve on a year over year basis. Turning to The Middle East. The market continues its dynamic growth with especially strong activity in Saudi Arabia and UAE. During my recent visit to The Middle East, I was struck by the remarkable pace at which infrastructure projects move in this region.

Major luxury residential developers like Soba and Bengadi are reshaping the skylines of Dubai. In addition, the Stargate UAE data center project was kicked off outside of Abu Dhabi, starting with a 200 megawatt data center where we won an order for 16 large capacity tower cranes. Upon completion, the campus will span 10 square miles and is expected to host five gigawatts of capacity. Likewise, Saudi remains highly active with our local partner playing a key role in several major stadium projects. The overall pipeline remains very strong.

Shifting our focus to Asia, China continues to face economic headwinds and we don’t anticipate a meaningful rebound in the near term. Elsewhere, however, sentiment is improving. During my recent visit to Korea coinciding with the national election, a common view prevailed. Regardless of political preference, the new President is seen as pragmatic and supportive of pro business initiatives. In addition, renewed interest in the Samsung FAB5 semiconductor project has boosted confidence.

We anticipate the Korean market could regain traction within the next six months. In Vietnam, we secured crane orders for multiple projects this quarter, an encouraging signal of the market reawakening. Meanwhile in Australia, conditions remain mixed. The Australian dollar has been hovering at 0.56 to the Euro, which has hindered the market, but crane activity has been strong with early signs of activity emerging in preparation for the two thousand and thirty two Brisbane Olympics. Finally, in North America, the market remains in a holding pattern.

With significant uncertainty around how various tariffs may unfold, both dealers and Crane Rentalhouses are delaying purchasing decisions until there is more stability around tariffs and pricing. Overall, Crane Rentalhouses remain busy and we’ve seen success at some of the bigger players to reduce the age of their fleets. This is encouraging for the health of the overall industry and I remain cautiously optimistic about long term demand in the region. Looking at the next twelve months, however, I have two views around U. S.

Demand depending on the time horizon. For the next six months, it’s hard to see a scenario where demand accelerates. Crane buyers can afford to wait, and at the moment, they prefer to buy units that are sitting on the ground at pre tariff prices. If I consider the European’s reciprocal tariffs, lots of buyers had been hoping that the tariff would drop below 10%. So we’ll have to see how customers react to the 15% tariff.

On a $2,000,000 all terrain crane, that’s real money and rental rates would need to increase to financially justify a buying decision. Moreover, dealers are reluctant to place new orders and dealer inventory has been declining. Looking beyond the next six months, dealer inventory in The U. S. Could reach all time lows if current trends continue.

As a result of the One Big Beautiful Bill, 100% accelerated depreciation has been reenacted. The previous program stimulated demand in December, and this could drive dealer inventories even lower. Point being, dealer inventory could be exceptionally low, which is a classic signal for the market to accelerate at the beginning of next year. Unfortunately, we cannot turn our manufacturing on a dime and we have to align our build schedules with current demand. This adjustment will impact our financial performance in the second half of the year, which is why we are guiding to the low end of our EBITDA range.

With that, I’ll pass it on to Brian to walk you through the financials before I close with our strategy update.

Brian Regan, Executive Vice President and Chief Financial Officer, Manitowoc Company: Thanks, Aaron, and good morning, everyone. Please move to Slide five. During the period, we had orders of $454,000,000 an increase of six percent from a year ago, resulting in Q2 ending backlog of $729,000,000 The higher order intake was driven primarily by our European Tower Crane business, where new machine orders were up 104% year over year. In addition, we saw an increase in our non new machine orders. As Aaron mentioned, our third party dealers in The U.

S. Are reluctant to commit to orders at this time due to the uncertainty around tariffs. For the quarter, this slowdown in demand was more than offset by higher orders in MGX, our wholly owned distribution business, as end customers place orders to lock in pricing on in stock units. Net sales in the quarter were $540,000,000 a decrease of 4% from a year ago. We missed several deliveries due to supply chain constraints and last minute commercial delays.

Our non new machine sales were $162,000,000 during the quarter, up 10% year over year, demonstrating the momentum we continue to build around our Cranes plus 50 strategy. On a trailing twelve month basis, non new machine sales were $659,000,000 another record. SG and A was $87,000,000 in the quarter, up $4,000,000 year over year. On an adjusted basis, SG and A was up $9,000,000 year over year. Foreign currency accounted for $2,000,000 with the balance driven by the Vama Trade Show and other employee related costs.

Our adjusted EBITDA was $26,000,000 down $10,000,000 year over year. This was primarily driven by the lower sales and the higher SG and A. The net headwinds from tariffs in the quarter was approximately $1,000,000 Our GAAP diluted income per share in the quarter was $04 On an adjusted basis, diluted income per share was $08 a decrease of $0.17 year over year. Please turn to Slide six. Net working capital ended the quarter at $580,000,000 up 63,000,000 year over year, of which $43,000,000 was due to the payment of the EPA matter in April.

Additionally, foreign currency accounted for $14,000,000 of the increase. Moving to cash flows. We used $68,000,000 of cash in operating activities during the quarter, which includes the $43,000,000 payment to resolve the EPA matter. Capital expenditures were $6,000,000 of which $3,000,000 was for our rental fleet. Our cash balance was $33,000,000 and total liquidity was $238,000,000 at the end of the quarter.

As anticipated, our net leverage ratio increased to approximately four times. We are focused on bringing our leverage back below our targeted three times by year end. Looking to the full year, between the tariffs and the build plan reductions mentioned by Aaron, we have line of sight to achieving the low end of our previously issued adjusted EBITDA guidance of $120,000,000 to $145,000,000 With that, I’ll now turn the call back to Aaron.

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: Thank you, Brian. Please turn to Slide seven. While we anxiously wait to see how the global trade reset plays out, we remain steadfast in our Cranesville 50 strategy. During the quarter, we continued executing our strategy to strengthen our aftermarket business. We opened a new service branch near Warsaw, Poland.

We expanded locations in Sydney, Australia, Nance, France and Nashville. Our culture continues to evolve from being product focused to customer oriented. A good example of this is in Australia where we started to offer aftermarket tires, outrigger pads and rigging hardware to our customers, more of a one stop shop. Every day, we get better at servicing our customers. In terms of improving our effectiveness as an aftermarket organization, we recently went live with ServiceMax.

This system replaces over a dozen different legacy systems. It enhances technician productivity, significantly upgrades our ability to manage service contracts and reduces administrative overhead. My favorite part of the tool is that it provides us global asset management so we can track every machine we manufacture from cradle to grave. It’s a great repository for all of the maintenance and service work on any crane we sell and it will keep us more closely connected to the iron when it gets traded or sold into the secondary market. Needless to say, ServiceMax is a big leap forward from the legacy ad hoc Excel based systems our teams previously used.

Our Grainsville Safety strategy is driving growth in higher margin recurring revenue streams and creating long term value for our business. While the turbulent second quarter was hard on the ROE business, our MGX business in The U. S. Posted great results. This is proof that our strategy is working.

In closing, while the global political and economic situation remains unpredictable, our focus stays squarely on servicing our customers. The better we serve them, the stronger our partnerships become. When conditions improve, we’ll be ready. In the meantime, we remain committed to executing our Crane’s facility strategy and creating long term shareholder value. With that, we’ll open the line for questions.

Conference Operator: We will now begin the question and answer session. And our first question here will come from Steven Fisher with UBS. Please go ahead. Good morning, Steve.

Steven Fisher, Analyst, UBS: Thanks. Good morning. It sounds like a very challenging overall backdrop, but just wanted to ask you about the backlog and the cadence of EBITDA for the next couple of quarters. Within the context of that $730,000,000 roughly of backlog, what’s the duration of that? Is that all expected to be shipped kind of within this year?

Just curious how much coverage you have on your plan for Q3 and then Q4? And then if there’s a cadence of the roughly 70,000,000 of EBITDA that you still expect for Q3 versus for Q4?

Brian Regan, Executive Vice President and Chief Financial Officer, Manitowoc Company: Yes. It’s Brian. We always have seasonality with Q3 and Q4 with Q4 being the better of the two quarters. From a backlog standpoint, I’d say most of that backlog is expected to ship this year. That’s pretty normal when you look at our backlog with the vast majority of it being for Q3, and then we’ve got some good coverage in Q4 as well.

Steven Fisher, Analyst, UBS: Okay, That’s helpful. And then just want to understand maybe a little bit more about the regional dynamics on the orders. It sounds like, obviously, pretty strong orders in Europe. Just kind of curious how to think about the book to bill here in the various regions within your kind of overall 0.8ish, 0.9x? Like was U.

S. Like an under 0.5x and Europe was kind of north of 1x? How do we think about sort of that regional dynamics on orders?

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: Yes. So with respect to the orders, to me, the main area to focus on right now is The Americas. And we sort of live in two worlds because we have the MGX distribution business, which, of course, they had inventory sitting on the ground that’s pre tariff. So demand there was really good, and business was good. On the other side of the, I’ll call it, legacy Americas portion of the business, which is much more dealer oriented, that’s where we’re closely tracking what our orders are and what the challenge is.

Steven Fisher, Analyst, UBS: Okay. And then just on the tariffs, right, it sounds like a lower overall impact, but I guess lower unit. I guess can you talk a little bit about the sort of the per unit tariff impact and kind of price versus cost dynamics you’re expecting for both Q3 and Q4?

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: Yes. So it’s we can’t speak we’re not going to speak about every single model, but every literally, every single model varies depending on the where are the cranes coming from and where the parts are coming from. So that’s quite the mix. And likewise, most of our competitors are either in Japan or Germany. So there’s a lot to shake out in terms of the way that the tariffs flow through and then actually hit the customer again.

Steven Fisher, Analyst, UBS: Okay. And then just lastly for me on The U. S. Market. Can you just talk about some of the puts and takes?

I mean it seems like your general message from the broad value chain we’re hearing is public sector is still pretty good in terms of demand on the private side, still lots of structural investment in terms of data centers and various other projects. Are you seeing those areas of strength? And is that what sort of just causing people to buy the units that pre tariff, but there’s just not enough confidence in that demand going forward to kind of put new orders without knowing really what kind of the pricing dynamics are going to be? Is that how to think about it?

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: The other element you have to consider is people managing their fleets, and so they can choose to wait and see where pricing ends up. And that’s what we’re really seeing is folks managing their

Ion Warner, Vice President, Marketing and Investor Relations, Manitowoc Company: day to day. In terms

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: of actual activity, crane rental houses are busy and positive, and that all looks good. It’s just there’s so much uncertainty around what the price of a crane’s gonna be. And as I said on the call, if you got a machine, it’s 2 or $3,000,000. And all of a sudden, it’s 15%, and you were hoping it’s gonna be 5. That’s a pretty dramatic change in terms of expectations.

So and then, like, as in order to financially justify, you’re gonna have to run rates go up. So the market needs to play out in the next six months before we really get a good feel for where we land.

Conference Operator: Our next question will come from Mig Dobre with Baird.

Ion Warner, Vice President, Marketing and Investor Relations, Manitowoc Company: So just to pick up where Steve sort of left it here with his questions. What’s interesting to me is that in The U. S. Market, right, I mean, if you’re talking about this uncertainty around pricing that is impacting customers, wouldn’t that create an incentive for customers to actually order ahead of these price increases and try to be a little more proactive at securing whatever units they have at pre tariff levels. To me, it would have seemed like Q2 would been a quarter in which a bunch of that activity could have occurred so that people can actually lock in prices before you really kind of start making your adjustments as the year progresses.

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: Well, if you’re shipping from Germany and in sense of like all terrain cranes, everyone is from my point of view, I think customers were hoping that we wouldn’t up end up with even the 10% tariff, and now it’s turned out to be 15. So people were holding off there. And and the other you know, anytime you’re shipping something from that far away, that creates more reluctance and concern because you don’t really lock yourself into a price whenever you cut the deal.

Brian Regan, Executive Vice President and Chief Financial Officer, Manitowoc Company: Yes. And for the for the vast majority of our orders, you know, they’re they’re going to include the price adjustment because we knew it during the quarter that there was going to be, some level of tariffs.

Ion Warner, Vice President, Marketing and Investor Relations, Manitowoc Company: Okay. So now we have 15% tariffs. What does that do for demand? Is that because your commentary is obviously more and more cautious than it was three months ago. Are these tariffs within the framework that you provided, you’re saying $35,000,000 as opposed to something that was much larger previously.

In terms of these offsets, first, I guess, how are you offsetting the tariffs? And then second, as the customers now know that there’s a 15% tariff, does that imply that demand here is going to be curtailed for a prolonged period of time? Or do you think this is just a function of we need a near term adjustment and, you know, eventually, they’re going to digest that and we’re back to the races in ’26?

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: Yes. Well, I think there’s two dynamics here. One is relative to dealer inventory, and then one is relative to what the Crane Rental House is gonna buy. So in terms of our dealers, I mean, they’ve they’ve hit the pause button. And at

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: a certain point, they’re not gonna

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: have any inventory. They’re gonna have to make some decisions. So from my my point of view, this is probably I mean, I think it’s six months to sort of sort

Ion Warner, Vice President, Marketing and Investor Relations, Manitowoc Company: of out. I mean, even if I

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: look at July, July was roughly the same as the previous three months. So folks are making the purchases that they need to make or have to make. And if they have any more flexibility in terms of timing, which most crane rental houses do, given the nature of cranes, they’re being a little more cautious. But don’t forget from a pricing standpoint, when you got the yen at $1.50, there’s room for folks to eat potentially their tariffs. We don’t know exactly how that’s going play out in the long run.

Ion Warner, Vice President, Marketing and Investor Relations, Manitowoc Company: But how are you offsetting these tariffs, the $35,000,000 You say you’re going to mitigate it 90%. How are you doing that?

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: Price increases.

Ion Warner, Vice President, Marketing and Investor Relations, Manitowoc Company: You’re doing that with price increases. Just mathematically, if I’m looking at your Americas revenue and I’m looking at, call it, dollars 30,000,000 of incremental tariff headwind, that does not appear to be very significant. We’re only talking like 2.5%. So I recognize that I’m basically spreading it across the entire business while only certain products are impacted here. But my question to you would be, does it make sense to spread the tariff impact across all your products and try to sort of like minimize the drag on demand?

Or are you being sort of very targeted and saying, hey, this model is coming from Europe. We’re going to put the full boat tariff pricing on this one as opposed to something that’s manufactured domestically?

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: We’re very targeted. You have to remember, we have to go through piles of HTS codes for every component that goes on to the local unit. So it has to go unit by unit.

Brian Regan, Executive Vice President and Chief Financial Officer, Manitowoc Company: And remember, there’s different tariffs. We talked about in Q1, you’ve got the reciprocal tariffs that are coming from whole goods that we produce in Europe that we’re bringing to customers in The U. S. So there’s that aspect of it. But then there’s also tariffs like the steel tariffs that we’re getting that is in our product.

So how we’re addressing it and the percentage of impact, obviously, ones that are the reciprocal tariff is on, it’s going to be that 15% on those products. For the other stuff, we’re it’s less of a direct offset of the tariff. It’s a price increase.

Ion Warner, Vice President, Marketing and Investor Relations, Manitowoc Company: Okay. Yes, I guess lastly for me, and I don’t know if this is a question, maybe it’s a comment and you can comment back. When I’m looking at your updated tariff view, it’s less bad than it was three months ago. Your commentary is more cautious. There is a divergence here that I think is, at least to me personally, a little bit surprising.

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: So I see.

Ion Warner, Vice President, Marketing and Investor Relations, Manitowoc Company: I guess I’ll leave it at that.

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: I said on the last call that I was I’m always nervous about price elasticity in the crane business, and that’s what we’re seeing right now is folks are hitting the brakes because the tariffs are 15% on the reciprocals. But, of course, we have all the two thirty two and three o ones that are impacting our locally produced stuff. So from my point of view, it’s yep. We’re in the middle of the we’re in the eye of the storm, and we’re seeing exactly how folks are behaving. And on the last call, it was more of a sort of guess at that point because we didn’t have an updated no effect on how they would respond.

And and when

Brian Regan, Executive Vice President and Chief Financial Officer, Manitowoc Company: we gave the information last quarter, we we said, hey, this is our expectation based on current demand. We don’t know what it’s going to do to demand. And we’ve seen impact on demand during Q2, which is going to impact our full year.

Ion Warner, Vice President, Marketing and Investor Relations, Manitowoc Company: Fair enough. Appreciate the time.

Conference Operator: And our next question will come from Cliff Ransom with Ransom Research. Please go ahead. Good morning, Cliff.

Cliff Ransom, Analyst, Ransom Research: Good morning, folks. Thank you again for the opportunity to work with your folks in Italy. It was very instructive. Look, after fifty years around the damned lift business, the recovery from cycles and going into downstrokes is very difficult. Let me ask a 35,000 foot question.

If you look back say three to five years at Manitowoc and the institution of the Manitowoc Way, what about lean thinking has enhanced your ability to respond to rapidly changing exterior events. What do you think has happened to your culture?

Ion Warner, Vice President, Marketing and Investor Relations, Manitowoc Company: Yeah. I think a big

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: a big part of what we’ve done, if you look back historically, we were very, very vertically integrated, and so we didn’t have the flexibility to go up or go down, quite frankly, very easily or fast. So we’ve done a lot of work on our supply chain in order to have more access to more parts to continue to move. So if we go up 10% or 20%, we can react way faster than we could have, say, five years ago or ten years ago.

Cliff Ransom, Analyst, Ransom Research: I was really thinking more about what happens internally. Maybe I’m asking a mindset question, which is too hard to answer. One of the things about lean thinking is that the whole what’s the right word the whole review process is so disciplined. You tend to discover trends faster than companies that don’t exercise that methodology. Am I barking up the wrong tree here?

Or is that something real?

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: No, I think it’s 100% real. What we talk about a lot of times is the feedback from our customers is almost instant. We’re in a lot of industry, you know, because we we talk to the owners or the people that own the crane rental houses or the CEOs because everyone’s so involved in their big purchases. So in terms of how we build our build schedules and start tap times and how to run the lines, I think getting that input, we get it pretty instantly. I mean, even this morning, I was getting feedback from customers.

So I think that makes a big difference in terms of how we look out the next six months and how we see the dynamics play out.

Cliff Ransom, Analyst, Ransom Research: Got it. And you talked about making adjustments in the second half of the year to, let’s call it, protect cash flow. What specific things will you be doing?

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: Yes. So we took down our build schedules at a couple of different locations, so at Shady Grove and Wilhelmsauben specifically, and it just depended on the product line relative. So what we do is we track our backlog. We track the orders. We track the trends and how much dealer inventory is out there, try to guess, you know, where we think demand will be six months from now.

So based on where current rates are, we need to start to adjust our build schedules now to make sure that our supply chain doesn’t get overwhelmed or overheated as we get into the back end of the year.

Cliff Ransom, Analyst, Ransom Research: And I got cut off the call twice, but I got reconnected. When you talk about getting your net leverage down, did you at some point give us an estimate of free cash flow for the year?

Brian Regan, Executive Vice President and Chief Financial Officer, Manitowoc Company: Yes. Our free cash flow for the year is expected to be on the low end of our original range. So we’re thinking that 10,000,000 to $15,000,000 for the full year.

Cliff Ransom, Analyst, Ransom Research: Okay. And what was your best expectation in the year for free cash flow?

Brian Regan, Executive Vice President and Chief Financial Officer, Manitowoc Company: When we gave our plan, I think it was 45

Cliff Ransom, Analyst, Ransom Research: Okay. I got it. That’s fine. I remember that number. Thanks.

I have one last question, if I may. I just have to find it. No. That’ll do it. Thanks, Appreciate it.

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: Thanks, Glenn. Thanks, Glenn. Have good day.

Conference Operator: And this concludes our question and answer session. I’d like to turn the conference back over to Ion Warner for any closing remarks.

Ion Warner, Vice President, Marketing and Investor Relations, Manitowoc Company: Thank you. Please note that a replay of our second quarter twenty twenty five earnings call will be available later this morning by accessing the Investor Relations section of our website at manitowoc.com. Thank you everyone for joining us today and for your continued interest in The Manitowoc Company. We look forward to speaking with you again next quarter.

Conference Operator: The conference has now concluded. Thank you for attending today’s presentation.

Aaron Ravenscroft, President and Chief Executive Officer, Manitowoc Company: You may

Conference Operator: now disconnect.

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