By Maksym Misichenko · Yahoo Finance ·
What AI agents think about this news
Manitowoc's (MTW) Q1 results show resilience but margin fragility. The $940M backlog is a potential cash-flow drain due to thin margins and inflationary pressures. The company's reliance on debt and high capex needs for service expansion are significant concerns.
Risk: Thin margins (4%) and inflationary pressures on steel and labor could turn the backlog into a cash-flow drain, leading to a liquidity crisis.
Opportunity: Expansion of the Cranes+50 service model and higher-margin components could lift margins as the cycle improves.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
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Wednesday, May 6, 2026 at 10 a.m. ET
- President & Chief Executive Officer — Aaron H. Ravenscroft
- Executive Vice President & Chief Financial Officer — Brian P. Regan
- Senior Vice President, Marketing & Investor Relations — Ion M. Warner
Aaron H. Ravenscroft: Thank you, Ion, and good morning, everyone. I would like to take a moment to thank The Manitowoc Company, Inc. team for their unwavering commitment to serving our stakeholders. Over the last twelve months, the team has continued to execute our Cranes+50 strategy, enabling us to weather the downturn in the crane cycle and be better positioned for the next leg up. Although there is a great deal of uncertainty in the Middle East, Ukraine, and even in the United States with respect to tariffs, the overall market has been resilient. Our orders during the first quarter were almost $650 million, and our backlog ended the period at $940 million. In addition, rates in April remained strong.
Please turn to Slide three. Starting with the Manitowoc Way, I recently challenged our organization to eliminate hammers, similar to what we did with ladders a few years ago. We are simply too reliant on hammers. They create quality problems and are a major source of safety risk. In our Katy Grove plant alone, we had over 1,200 hammers in use. Thus far, we have eliminated 264. As you can see on this slide, the organization has quickly developed a variety of improvements ranging from simple to ingenious solutions. Eliminating hammers not only helps create a safer workplace but also supports the Manitowoc Way culture as we consistently drive for continuous improvement and innovation.
Ultimately, the goal is to have zero injuries. In terms of new product development, in March we unveiled an 80-ton boom truck and an 800-ton eight-axle all-terrain crane at CONEXPO. Both received outstanding feedback from customers and crane operators. The eight-axle crane was a real head turner at the show, and I really look forward to getting the first units into the field in 2027. Please move to Slide four. Turning to our Cranes+50 strategy, our non-new machine sales for the quarter grew 3% year over year. On a trailing twelve-month basis, we improved 8% to $696 million.
Growing this part of our business, which is less impacted by economic cycles and produces higher returns, is a key part of our strategic plan and is working well. As I preach to our teams, for us to continuously grow our non-new machine sales, we have to focus on four major buckets. Number one, we are adding more service locations. For example, in Australia we doubled the capacity of our Sydney facility, and we recently approved new service centers in Brisbane and Melbourne. Brisbane will host the 2032 Olympics, and we are preparing for a lot of activity in the region. Number two, we are adding more aftermarket sales representatives and field service techs.
We ended the first quarter with 567 field service techs, up 50 techs in just three months. The growth was driven by two major actions. First, we reorganized our approach to talent acquisition in North America by enhancing our recruiting team. And second, in India, we transitioned from a dealer model to a direct model in order to better service our customers. The third bucket, we are increasing sales of complementary lifting accessories. In Europe, our tower crane team has introduced anti-intrusion panels to reduce theft and to discourage curious social media influencers during the off hours. In addition, the team has introduced urinals to replace the less-than-desirable traditional bucket system.
In the UK, our mobile team has started selling outrigger pads and a rear-mounted storage compartment, which they designed in-house. Our goal is straightforward. We want to make our customers' lives easier so they can focus on executing lifts. And the fourth bucket is the fact that we are leveraging technology. I have mentioned our implementation of ServiceMax a few times. This tool has several different modules to help us better track machines and more effectively fix and bill crane repairs. In April, we completed the implementation of ServiceMax’s asset management system.
We are now under the development of the dispatching and work order module, which increases our visibility to service work and enables us to capture more incremental revenue opportunities. Please move to Slide five. For my regional update, let us start with the Americas. First and foremost, overall customer sentiment at CONEXPO was very positive. Crane rental houses were quite optimistic about the market outlook. While everyone is unhappy with tariffs, customers told us project work is abundant. In addition, dealer inventory levels declined during the first quarter, which is a great sign that folks are buying again. For example, all-terrain crane inventory levels are at a ten-year low. In Europe, the crane business feels pretty good.
Demand for tower cranes continues to grow with new machine orders up 76% year over year. Mobile demand has remained relatively steady. In the Middle East, many big projects like the new Dubai Airport continue to move forward. Not surprisingly, Saudi Arabia has pulled back on the home front, and considerable development activity remains underway in Riyadh. Given the circumstances around the Iran conflict, we find ourselves in a wait-and-see mode as we monitor the situation, but I am very encouraged by the level of optimism in the region, with construction companies eager to get back to business. Finally, Asia-Pacific continues to gain momentum with increasing demand in Hong Kong, Vietnam, Australia, and South Korea.
I recently visited the new SK Hynix and Samsung semiconductor projects where roughly 100 POTAIN tower cranes are currently operating. Korean construction companies continue to leave me in awe of their scale and speed. The Samsung site alone will reach 70,000 workers at its peak. I left South Korea very optimistic about demand in the coming quarters. With that, I will hand it over to Brian to walk you through the financials before I make a few closing remarks.
Brian P. Regan: Thanks, Aaron, and good morning, everyone. Please turn to Slide six. Our financial performance for the quarter tracked largely in line with expectations, which supports reaffirming our previously issued guidance. We anticipated difficult comps as tariffs were a headwind to the quarter versus the prior year. The tariffs introduced in 2025 fully impact us until the second half of the year. Moving to the numbers, we had orders of $646 million in the first quarter, relatively flat from a year ago on a currency-neutral basis. Order activity was solid and broadly consistent with recent trends.
Keep in mind, order comps were difficult in Q1 due to the post-election bump in 2025 and the large stocking orders we received at the end of the year. Backlog ended the quarter at a strong $940 million, up $146 million from where we exited 2025 and up $10.442 billion year over year. This supports our revenue expectations for the full year. Net sales in the quarter were $495 million, essentially flat on a currency-neutral basis. Non-new machine sales in the quarter were $166 million and, on a trailing twelve-month basis, reached a record $696 million, up 8% from the prior year.
While growth lagged our expectations in the first quarter, mainly due to used sales, the overall mix of non-new machine sales favored our higher-margin categories. SG&A expenses were $91 million in the quarter. On an adjusted basis, SG&A was up $7 million, with foreign currency accounting for $3 million of the increase. The remaining increase was driven primarily by the CONEXPO trade show and inflation from other employee-related costs. Adjusted EBITDA in the quarter was $20 million, down $2 million, or 10% year over year. As expected, tariffs impacted our results by $2 million. Please turn to Slide seven. Net working capital ended the quarter at $536 million, an increase of $47 million year over year, driven primarily by inventory.
The higher year-over-year inventory was driven by $26 million from foreign currency, $15 million from tariffs, and $10 million in prototypes, and was partially offset by operational improvements. Moving to cash flow, operating activities provided $27 million of cash during the quarter. Capital expenditures were $8 million, including $6 million for our rental fleet, resulting in free cash flow of $19 million. This was a $17 million improvement year over year, driven by increased collections on accounts receivable. We ended the quarter with $316 million in liquidity, and our net leverage ratio was 3.1 times. In April, S&P upgraded our corporate credit rating from B to B+.
This upgrade underscores the progress we are making in strengthening our financial profile through the cycle while investing in long-term growth through our Cranes+50 strategy. Looking ahead, first quarter results did not change our expectations for the full year, and as such, we are affirming our previously issued guidance of net sales of $2.25 billion to $2.35 billion and adjusted EBITDA of $125 million to $150 million. With that, I will turn the call back to Aaron.
Aaron H. Ravenscroft: Thank you, Brian. Please turn to Slide eight. Standing back and looking at the forest through the trees, I think there are many reasons to be optimistic. Number one, Europe is on the rebound. For sure, towers have rebounded more aggressively than mobiles, and there is still a big need for residential housing and power generation. Number two, in the Middle East, all things considered, folks are pretty optimistic to get back on track. In normal times, all construction would have dried up overnight with such regional conflict. Number three, in Asia, our strongest markets are pumping even in the face of weaker currencies. Number four, in LATAM, copper has traded above $6 per pound.
With several new governments in the region, I believe we will start to see more investments in brownfield and greenfield mining projects. Number five, in the U.S., although fleet ages continue to increase, customers are begrudgingly making purchases. Data centers continue to expand rapidly, and there is a strong need for additional power generation and transmission infrastructure. And finally, number six, the success of our Cranes+50 strategy is increasingly helping us weather this economic cycle and positioning us for a higher-margin profile in the long term. Of course, there is still a lot of uncertainty in the market, but I believe that we are starting to see light at the end of the tunnel.
Keep in mind, we have been living in this mode essentially since 2020. There is plenty of pent-up ambition from folks to renew and expand their businesses, which is why I believe that the markets have held up steady. With that, operator, please open the line for questions. We will now open the call for questions.
Operator: Yes, thank you. We will now begin the question-and-answer session. The first question comes from Jerry Revich from Wells Fargo.
Aaron H. Ravenscroft: Good morning, Jerry. Morning.
Analyst: This is Kevin on for Jerry. I just had a question on the changing tariff dynamics as it relates to your outlook. It would be helpful to get more color on that, maybe bifurcating between impacts from the AIIPA overturn and the new Section 232 ruling.
Brian P. Regan: Yep. Thanks, Kevin. A lot is going on with the tariff landscape, as you can imagine. I will start by saying that the net go-forward impact of what is in place today is in line with what we thought coming into the year. There are no real changes to our expectations based on those changes. With that said, there is still uncertainty regarding what the Section 301 country-by-country tariffs will be and what net effect they will have on us versus the Section 232 current tariffs. Related to AIIPA, we did file our refund through the process. We paid approximately $25 million in AIIPA, so we are in a wait-and-see mode as far as that process goes.
Additionally, you will see in our Q, we voluntarily submitted a prior disclosure to Customs related to potential errors in our methodology in calculating the 232 steel and steel derivative tariffs. This will allow us to review our calculation to determine if any adjustments are required. To give some perspective, we paid approximately $18 million prior to the April change in the 232 tariffs.
Analyst: Got it. Very helpful. And then given that Q2 is typically a seasonally strong quarter for both net sales and margin, how should we think about performance versus normal seasonality? Any one-time impacts we should be thinking about from Q1?
Brian P. Regan: As I said in the prepared remarks, from a comp standpoint, the second half is going to look better because of the impact of the tariffs. They really hit us more in the second half than the first half. With that said, we talked about restructuring in our plan, and that is still in place. Again, that is going to affect us more favorably in the second half. So, I think Q2 will be better than Q1, but the second half is going to be better than the first half.
Analyst: Understood. Thank you. That is all I have for questions.
Ion M. Warner: Thanks, Kevin. We received several emails this morning, and I would like to read them to you. The first question that I received online was: Could you provide more color on these lifting accessories as part of your Cranes+50 strategy?
Aaron H. Ravenscroft: Yes. The analogy that I use with our team internally is that the crane business is a lot like a restaurant. When you think about the restaurant, it is the steak that brings us all to the restaurant—it is that main platter. But the reality is the restaurant is living off of the appetizers, the desserts, and the wines. I think that the crane business is exactly the same. Obviously, you have to have a great crane to be in the lifting business, but there are a lot of accessories that go around that product and really add value to our business and to our customers. What really brings it all home is great service.
A great recent example: we got an order in France for seven tower cranes for €6.5 million, and on the back of that, the sales team was able to add commissioning and dismantling services for €900,000 and then several accessories for a total of €300,000. On top of the normal crane order, they added anti-intrusion panels, lighting, cameras, anti-collision software, aircraft warning systems, and lifts. To me, that is a great example of what the team can add when they think outside of the box and have a bigger view of the customer and how we service those customers. Hopefully, that color helps.
Ion M. Warner: Thanks. We received another email: What were your orders in April?
Brian P. Regan: Yes.
Four leading AI models discuss this article
"The combination of thin 4% EBITDA margins and a voluntary disclosure regarding potential tariff calculation errors suggests significant downside risk to the reaffirmed full-year guidance."
Manitowoc's (MTW) Q1 results highlight a company caught in a structural transition, attempting to pivot toward a high-margin services model (Cranes+50) while hampered by cyclical volatility and persistent tariff headwinds. While management touts 'resilience,' the $20M adjusted EBITDA is razor-thin on $495M in sales, representing a 4% margin that leaves zero room for error. The $18M in potential tariff-related calculation errors disclosed to Customs is a red flag that could lead to significant balance sheet adjustments. While the backlog is healthy at $940M, the company’s reliance on capital-intensive heavy machinery in a high-interest, trade-war-sensitive environment makes the 3.1x net leverage ratio look precarious if the 'second-half recovery' fails to materialize.
If the infrastructure super-cycle in data centers and semiconductor manufacturing accelerates, the operating leverage inherent in their fixed-cost heavy manufacturing could lead to an earnings explosion that dwarfs current margin concerns.
"Cranes+50 is successfully derisking MTW toward a higher-margin, less cyclical profile, with TTM non-new sales at $696M validating the shift."
MTW's Q1 showed resilience amid crane cycle downturn: orders flat at $646M (tough comps from 2025 post-election bump), backlog at healthy $940M (up $146M QoQ), non-new machine sales TTM record $696M (+8% YoY, higher margins). Affirming FY guidance ($2.25-2.35B sales, $125-150M adj. EBITDA) despite $2M tariff hit. Cranes+50 strategy gaining traction via service expansion (567 field techs, +50 QoQ), accessories, tech like ServiceMax—shifting mix to less cyclical revenue. Regional optimism (Europe towers +76% orders, Asia semis boom) and low dealer inventories bode well for re-rating if cycle inflects.
Flat orders despite backlog build signal persistent demand weakness in a cycle down since 2020, while inventory bloat ($47M YoY rise, partly tariffs/prototypes) pressures working capital ($536M) and cash conversion if sales disappoint.
"MTW's Cranes+50 strategy is real and working on mix, but headline growth masks tariff-driven margin compression, and full-year guidance assumes tariff relief that remains uncertain."
MTW is executing a credible margin-expansion playbook—non-new machine sales hit $696M TTM (+8%), field techs grew 50 in one quarter, and ServiceMax deployment is live. Backlog of $940M supports 2026 guidance ($2.25-2.35B revenue, $125-150M EBITDA). The S&P upgrade to B+ signals deleveraging momentum. However, adjusted EBITDA fell 10% YoY to $20M despite flat sales, meaning tariffs ($2M headwind) plus CONEXPO costs are masking underlying softness. Orders were flat currency-neutral; the 'strong' $650M Q1 figure is misleading—it's below run-rate and benefited from post-election 2025 comps being difficult. April orders remain undisclosed.
The company is guiding to flat-to-slightly-up EBITDA ($125-150M vs. likely ~$130M run-rate) while claiming momentum. If tariff refunds ($25M AIIPA, $18M 232 exposure) don't materialize, or if Section 301 tariffs hit harder than modeled, margins compress further. Non-new machine sales growth lagged expectations in Q1; the 8% TTM figure masks deceleration.
"Manitowoc’s Cranes+50 focus and service-driven margin expansion, supported by backlog and strategic service/network investments, position it to outpace the cycle even as tariff headwinds and cyclicality pose risks."
MTW leans into a levered, service-led recovery narrative: backlog $940m and Q1 orders ~$646m support a runway for 2026 revenue toward the guided $2.25–$2.35b and EBITDA $125–$150m, aided by Cranes+50 and a growing services ecosystem (567 techs, ServiceMax rollout, more aftermarkets). The shift to non-new sales and higher-margin components, plus capacity expansions (Australia, India direct model) and new product cadence (80t boom truck, 800t AT crane with fielding in 2027) could lift margins as the cycle improves. Risks remain: tariff volatility (Section 232/301, AIIPA refunds), cyclicality of construction, used-equipment headwinds, and capex required to sustain service growth.
The rally could be premature: tariffs remain uncertain and could deteriorate demand or margin if Section 301 measures escalate; even with backlog, Manitowoc’s reliance on cyclical construction, used-equipment softness, and higher SG&A from aggressive service expansion could compress margins and cash flow if the cycle stumbles.
"The $940M backlog is a margin trap because legacy pricing cannot absorb current inflationary costs, threatening cash flow."
Grok, your optimism on the $940M backlog ignores the 'quality' of that revenue. If Manitowoc is forced to honor legacy pricing against current inflationary pressures on steel and labor, that backlog is a margin trap, not a safety net. Gemini is right to highlight the 4% EBITDA margin; at that level, any supply chain friction or tariff adjustment turns the entire backlog into a cash-flow drain. We are looking at a company subsidizing its own survival through debt.
"Rising inventory and working capital pressure cash flow severely, amplifying leverage risks beyond backlog margin concerns."
Grok's contra on inventory is spot-on: $47M YoY rise (tariffs, prototypes) atop $536M working capital screams cash conversion crisis if flat orders persist into H2. Cranes+50 service ramp demands capex that 4% EBITDA margins can't cover without hiking 3.1x leverage further. Gemini, backlog 'trap' understates it—this is a liquidity time bomb.
"The liquidity squeeze is real, but it's a working capital crisis masquerading as a margin crisis—and Q2 orders are the circuit-breaker nobody's watching."
Gemini and Grok are both correct on margin fragility, but conflating two separate problems. The $47M inventory rise is real; the backlog 'trap' assumes pricing power collapsed retroactively—unproven. What nobody flagged: if MTW honors legacy contracts at compressed margins, they're *choosing* to do so to preserve backlog conversion and cash flow. The real question is whether Q2 orders stabilize. Flat orders + inventory bloat + 4% margins = forced working capital financing, not insolvency—yet.
"Backlog quality is not inherently a margin trap; a service-led mix can convert backlog into higher margins and cash flow, but tariffs and working capital risk remain the real pressure."
Responding to Gemini: The claim that backlog equals a margin trap presupposes pricing power collapse; in practice, MTW can monetize the same backlog through a service-led mix and longer-term service contracts that raise gross margins, especially as Cranes+50 expands aftermarkets. The real risk is tariff volatility and working capital timing, not backlog alone. Speculative, but if pricing holds and service mix expands, the backlog could support cash flow; if not, liquidity worsens.
Manitowoc's (MTW) Q1 results show resilience but margin fragility. The $940M backlog is a potential cash-flow drain due to thin margins and inflationary pressures. The company's reliance on debt and high capex needs for service expansion are significant concerns.
Expansion of the Cranes+50 service model and higher-margin components could lift margins as the cycle improves.
Thin margins (4%) and inflationary pressures on steel and labor could turn the backlog into a cash-flow drain, leading to a liquidity crisis.