The Manitowoc Company, Inc. 2026 Q2 Earnings Call

Please go ahead. Good morning, everyone.

Welcome to our earnings call to review the company's second quarter 2026 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 to the investor relations section on our website, www.manitowoc.com, which you can use to follow along with our prepared remarks. Please turn to slide two. Please note our safe harbor statement in the material provided for this call. During this 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.

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. I'll now turn the call over to Aaron.

Thank you, Ion. Good morning, everyone. Please turn to slide three. The Manitowoc team delivered great results in the second quarter. Sales increased 10%. Adjusted EBITDA increased over 85% versus last year. I'd like to recognize the team's hard work and resilience in navigating what has been a challenging operating environment over the last few years. As Brian will discuss, our core financial performance was among the strongest quarters that we've achieved in recent years. We are increasing our full-year guidance to reflect strengthening crane market. The second quarter marked a number of wins. Number one, safety is the top priority at Manitowoc. Following a slower start of the year, our year-to-date recordable rate improved substantially to 0.79. Number two, we generated strong orders, expanded backlog, increased non-new machine sales, and got our net leverage below our target of three times.

Number three, we started to meaningfully integrate artificial intelligence into the Manitowoc Way. Lastly, the U.S. Department of Commerce and International Trade Commission confirmed that Japanese crawler crane manufacturers were dumping and took action to level the playing field, applying import tariffs ranging from 12%-20%. All around, it was a great quarter. A huge thank you to the Manitowoc team. Your hard work paid off. Please turn to slide four. We continue to expand the reach of the Manitowoc Way with a focus on the aftermarket business. In addition, we are now leveraging AI to accelerate Kaizen. Recently, we advanced two great initiatives that helped get the flywheel moving in these areas. First, in July, we held our annual global Kaizen on our new eight-axle all-terrain crane, which is one of the largest and most complex products we've ever designed.

The original objective of the Kaizen was to improve safety and increase productivity for our customers in the field. Remember, these massive machines need to be disassembled for transport and reassembled at the next site. We focused on critical lifting procedures and rigging requirements. During the process, we identified additional opportunities to expand our aftermarket product offering for all-terrain cranes to include standardized rigging kits and ancillary products. We've invested over 100,000 engineering hours in developing this crane, so it is a natural extension to engineer the required rigging equipment into purpose-built service kits. In addition to improving safety, these aftermarket kits will help our customers set up the machine faster in the field. Time is money for our customers. A big thank you to our customers and suppliers that participated in the Kaizen. You were a huge help. In addition, we started to integrate AI into the Manitowoc Way.

At the start of the quarter, we presented a first-ever Lessons Learned Award for AI to the French Potain aftermarket team for developing Potain e-Tech, an AI agent designed to support tower crane field service techs and improve their effectiveness when fixing cranes. While this is in the early stages, it's an AI tool that we can model for our mobile cranes. We've also taken a structured approach to develop Manitowoc's AI capabilities. I held discussions with our Copilot users to better understand how folks are using the tool today and identify opportunities to apply AI in a systematic way. As shown on slide five, these are just a few examples of how the team is using AI at Manitowoc. Many of our users are early adopters who have been largely training themselves on AI. As a result, we are taking several actions to accelerate our deployment.

Number one, we incorporated AI into our Lessons Learned program to help promote great AI ideas across the enterprise. Number two, we are creating AI training tools to accelerate our user base. In fact, we doubled our users to over 450 this quarter. Number three, we created global AI user groups by function. For our institutional analysts listening to this call, to me, this was like learning how to model in Excel 25 years ago. Hopefully, a coworker could help to teach you a few shortcuts. We needed to create an environment where folks could collaborate. Number four, we are integrating AI into our daily Manitowoc Way activities. Every Manitowoc Way leader is becoming a super user, and they're required to complete at least one AI Kaizen per month. This will naturally lead us to create cross-functional teams to tackle problems.

Number five, we are in the process of scoping some larger projects using AI agents for engineering and aftermarket services. Please move to slide six. Turning to our CRANES+50 strategy, our non-new machine sales set another record. Non-new machine sales grew 7% year-over-year for the quarter and broke the $700 million mark on a trailing 12-month basis. On our last call, I stated that we needed to drive four major buckets to grow our non-new machine sales. Number one, adding more service locations. Number two, growing the number of aftermarket salespeople and field service techs. Number three, increasing sales of complementary lifting accessories. Number four, leveraging technology. During the second quarter, we saw great results in Latin America from driving these four CRANES+50 initiatives. In 2023, we established a greenfield operation in Peru to pursue service work with mining customers.

As a result, we recently were awarded a three-year, $2.5 million service contract at one of the world's largest copper zinc mines. This is exactly what our CRANES+50 strategy is all about. In addition, during the quarter, we launched two initiatives at our Shady Grove campus to support our aftermarket activities. First, we opened our rapid response shop to provide faster turnaround on critical aftermarket components such as lacings for crawler cranes and structural repairs for tower crane masts. Second, we established a center of excellence for refurbishing booms on the East Coast. The team developed a specialized fixture affectionately known as the Boominator that improves safety and productivity for disassembling and reassembling booms. We plan to replicate this fixture at key MGX locations and other global service centers. Please turn to slide seven.

With orders over $700 million this quarter, as you would imagine, the global crane market is fairly strong. Starting with the Americas, the underlying market conditions have remained healthy. Crane utilization remains very high, and dealer inventories are getting pretty lean. Orders from our traditional dealer channel was particularly strong in the quarter as folks replenish inventory. While activity in our MGX business remained relatively stable. As an interesting data point, our EnCORE rebuild business has been slow because crane owners have simply been unwilling to give up their machines. This is a great sign of how strong utilization is in the U.S. In conclusion, customer sentiment across North America remains positive, supported by solid end market activity and healthy fleet utilization. In Europe, the market environment remains mixed, with positive developments offset by ongoing challenges. During the quarter, two notable trends emerged.

Number one, the German government announced additional measures aimed at stimulating economic growth, including tax relief initiatives. Two, the conflict in Iran is creating inflationary pressures across the region. Against this backdrop, our performance was encouraging. Our mobile crane business delivered strong order growth during the quarter. In tower cranes, orders declined modestly year-over-year, but this was entirely attributable to our self-erecting cranes, which are transitioning to the new EN standards in January. We saw accelerated demand the last couple of quarters on a few models, and our build schedule for these models is sold out for the remainder of the year. We continue to see signs of stabilization in key markets, and the tower crane market continues to have strong momentum. In the Middle East, the second quarter was largely consistent with the first. Despite the Iran conflict, customer demand remained solid.

While shipments through the Strait of Hormuz have stopped, folks have found alternative shipping routes. A prolonged period of regional instability could eventually affect economic activity and customer investment decisions. For now, we remain cautiously optimistic as customer engagement remains strong, and there appears to be meaningful pent-up demand that could support future equipment purchases once uncertainty subsides. With Asia, the story pretty much remains the same as the first quarter. South Korea is experiencing robust demand driven by the semiconductor industry. Vietnam and Australia continue to be two strong markets for us, and we see general strength in the region well into 2027. That, I'll hand it over to Brian to walk you through the financials before I make a few closing remarks.