Manitowoc Company, Inc. (The)

Good morning and welcome to the Manitowoc Company first quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist, referencing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you can press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ion Warner. Please go ahead.

Good morning, everyone, and welcome to our earnings call to review the company's first quarter 2025 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 of our website, at manitowoc.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 the result of new information, future events, or other circumstances. And with that, I will now turn the call over to Aaron.

Thank you, Ion, and good morning, everyone. Please turn to slide three. I want to begin by thanking the Manitowoc team for successfully managing a difficult quarter. We generated $471 million in revenue and $22 million in adjusted EBITDA, exceeding our expectations. Orders were a strong $610 million, and backlog ended the period just short of $800 million. Our non-new machine sales were $161 million, up 11% year-over-year. In April, we participated in the Bama Trade Show in Munich, and I was extremely pleased with the industry sentiment and customer feedback throughout the event. We showcased the only hybrid all-terrain crane in the industry that is capable of operating for an entire shift. Additionally, crane operators and owners greatly appreciated the upgraded features on our new all-terrain cabs. Customers were thrilled with our new tower cranes, as well as the wide range of new aftermarket products and solutions that we exhibited. A big thank you to Ion Warner, Inza Heim, and the entire Manufaq team that made the show a great success. I also send a big thank you to all of our customers and partners that showed up in force. In terms of tariffs, based on what we know today, we are modeling $60 million of incremental costs and have mitigation plans to cover 80 to 90%. This combined with our strong backlog and growing confidence in the European tower crane business supports our current guidance. Given the fluid nature of the situation and the price elasticity of cranes, we have not factored any major change of demand into our forecast. Ryan will provide greater color in terms of exposure. Lastly, in reaction to our recent anti-dumping claim, the Department of Commerce has initiated an investigation into crawler cranes coming from Japan. First hearing was held on May 1st. The bottom line is that we believe in free and fair trade and will strongly defend it. Since I joined Manitowoc nine years ago, we have taken significant actions to improve the competitiveness of our crawler crane product line. We closed our namesake factory and reduced headcount significantly to reduce costs. We revamped all of our small and medium sized cranes and upgraded and value engineered our large cranes to improve our value proposition. And lastly, Over three years ago, we even started to sell these products directly through MGX. Despite taking all of these actions, our crawler cranes continue to be undersold by Cabelco. The filing was not an easy decision, and it wasn't taken lightly. At the end of the day, it's up to the United States government to determine whether or not Cabelco's trade practices have been predatory in nature. Our data set suggests that it has been. With that, let's return to our normal programming. We had a couple breakthroughs with the Mantua Quay during the first quarter. First, we had our best quarter ever in terms of safety metrics. Although our recordable rate isn't zero yet, it's important to acknowledge the significant progress that we've made. Great job to every Manitowoc employee. Second, we integrated AI into our Manitowoc Way improvement process for the first time. Our IS department recently began to use AI to convert several computer programs. In this process, AI automates repetitive tasks normally done by developers. As a result, we can save 2,000 man hours and avoid spending $400,000. We are now using AI as another tool in our lean practice. Please move to slide four for my market update. In North America, first quarter orders through our third party dealer channel increased 35% year over year. Overall, Crane Rental House has remained busy and we've seen quick success at some of the bigger players to reduce the age of their fleets. This is encouraging for the overall health of the industry and I remain cautiously optimistic about demand in the region. We simply have to wait and see how tariffs will play out. In Europe, the outcome of the recent election in Germany, followed by the announcement of a 500 billion euro infrastructure fund, has been welcomed by all. While it will take some time for the money to flow, this news significantly boosted customer outlook and provided some level of certainty to a very uncertain market. Mobile crane machine orders were lower year over year against extremely tough comps. However, Orders were up sequentially, and the level of customer engagement at Bama was great. First quarter orders significantly outperformed our expectations, and it feels like momentum is building. Turning to European tower cranes, our machine orders were up nearly 70% year-over-year. This was the third quarter in a row that we outperformed our year-over-year comps. This gives me confidence that the market continues to move in the right direction, and a recovery is beginning to take shape. In the Middle East, we saw a small year-over-year decline in first quarter orders. Nevertheless, deal activity remains robust. Saudi continues to be strong, and the UAE has a lot of interesting projects in the pipeline, including the massive new Dubai airport. The airport is expected to be five times larger than the current airport and comprises 400 gates and five parallel runways, which will require a lot of cranes. Continuing east, India remains very strong. Unfortunately, there hasn't been any major change in China. As for South Korea and Australia, two of our bigger markets in the region, we're in a wait and see mode. Korea is on hold until its elections on June 3rd. And in Australia, the exchange rates with Europe turned unfavorable recently. Fundamentally, demand is there, but customers are waiting for greater clarity before they'll pull the trigger on orders. Looking broadly at dealer inventory, there has been a lot of print in recent quarters regarding high dealer inventory levels for construction equipment companies. This has not been the case for our products. Overall, we've held at a pretty steady and healthy level. In fact, our dealer inventory for tower cranes in Europe is at historically low levels, and many major crane customers have been aggressively selling their old used cranes, which is helping lead our recovery. And in the US, if the tariff negotiations take longer than planned, I expect dealer inventory levels to quickly wind down, which will inevitably lead to a faster rebound. With that, I'll pass it on to Brian to walk you through the financials before I close with our strategy update.