Manitowoc Company, Inc. (The)

Good day and welcome to the Manitowoc Company's second quarter of 2025 earnings conference call. Please note that today's event is being recorded and all participants will be in a listen-only mode. Should you need any assistance today, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad, and to withdraw a question, please press star, then two. I would now like to turn the call over to Ion Warner, Vice President of Marketing and Investor Relations. Please go ahead.

Ion Warner Good morning, everyone, and welcome to our earnings call to review the company's second 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 on our website, Anithowoc.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. To start, I'd like to express my deep appreciation for the hard work of the Manitowoc team. 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 million in revenue and $26 million in adjusted EBITDA. Quarters were $454 million and backlog ended the period at $729 million. Our non-new machine sales were $162 million, up 10% year-over-year. In terms of tariffs, during our first quarter call, we were modeling $60 million 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 million. 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 Iela, 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 smoothie 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 UK, 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 UK launched a 39-billion-pound housing program for the next 10 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-billion-euro 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 Benghadi 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 5 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 Fab 5 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 2032 Brisbane Olympics. Finally, in North America, the market remains in a holdup pattern, with significant uncertainty around how various tariffs may unfold. Both dealers and crane rental houses are delaying purchasing decisions until there is more stability around tariffs and pricing. Overall, crane rental houses 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 12 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 Europeans' 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 million altering 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.