10q10k10q10k.net

What changed in MANITOWOC CO INC's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of MANITOWOC CO INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+272 added−308 removedSource: 10-K (2023-12-31) vs 10-K (2022-12-31)

Top changes in MANITOWOC CO INC's 2023 10-K

272 paragraphs added · 308 removed · 232 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

45 edited+5 added−5 removed33 unchanged
Biggest changeSince the launch of the initiative, the Company has announced ten new all-terrain cranes which include enhancements such as longer boom lengths, increased load capacity, reduced weight and improved roadability, new cab designs and the Grove CONNECT telematics system. Offering an innovative and wide breadth of cranes to customers enables us to be more competitive in the market.
Biggest changeLeverage our all-terrain crane new product development to grow aftermarket: We have invested in research and development to design and manufacture innovative all-terrain cranes. Since 2021, we have launched nine new or refreshed all-terrain cranes which include enhancements such as longer boom lengths, increased load capacity, reduced weight, improved roadability, new cab designs, and the Grove CONNECT telematics system.
These Core Values are: (1) Do what is right: We work in a safe and environmentally responsible way, we respect others and behave in an ethical way, we deliver quality work.
These Core Values are: (1) Do what is right: We work in a safe and environmentally responsible way, we respect others, we behave in an ethical way and we deliver quality work.
We also provide an expansive array of aftermarket services and we continue to invest in our rental fleet to further expand our aftermarket services to customers. We sell our entire product offering to most regions of the world and offer our full line of services primarily in the United States and Europe.
We also provide an expansive array of aftermarket services and continue to invest in our rental fleet to further expand our aftermarket services to customers. We sell our entire product offering to most regions of the world and offer our full line of services primarily in the United States and Europe.
These cranes are produced in the U.S. and sold under the Grove and Shuttlelift brand names. Hydraulic boom trucks are hydraulically powered telescopic cranes mounted on a conventional truck chassis. Hydraulic boom trucks are used primarily for lifting material on a job site. These cranes are produced in the U.S. under the National Crane brand name. Aftermarket services.
These cranes are produced in the U.S. and sold under the Grove and Shuttlelift brand names. Hydraulic boom trucks are hydraulically powered telescopic cranes mounted on a conventional truck chassis. Hydraulic boom trucks are used primarily for lifting material on a job site. These cranes are produced in the U.S. under the National Crane brand name. Services. Aftermarket services.
Raw Material and Component Sources and Availability We globally source raw material and components such as semi- and fully-finished-processed materials from suppliers. Our primary raw materials are structural and rolled steel and our purchased semi- and fully-finished processed materials are primarily steel structures, hydraulic components and powertrains.
Raw Material and Component Sources and Availability We globally source raw materials and components such as semi- and fully-finished processed materials from suppliers. Our primary raw materials are structural and rolled steel and our purchased semi- and fully-finished processed materials are primarily steel structures, hydraulic components and powertrains.
We are committed to maintaining an injury-free workplace through the daily implementation of our Safety Management Systems (“SMS”), focusing on safe working behavior and emphasizing that all injuries are preventable. To track the health and safety performance across our global manufacturing locations we utilize a mixture of leading and lagging indicators.
We are committed to maintaining an injury-free workplace through the daily implementation of our Safety Management Systems (“SMS”), focusing on safe working behavior and emphasizing that all injuries are preventable. To track the health and safety performance across our global manufacturing locations we utilize a mixture of lagging and leading indicators.
The Company continues to enhance the portfolio of aftermarket services performed in Europe, such as sale of parts and whole goods accessories, on-site repairs, technical support, erection and decommissioning services, crane remanufacturing, training services and digital solutions. In addition, the Company plans to expand the rental fleet in the United Kingdom and Germany.
The Company continues to enhance the portfolio of aftermarket services performed in Europe, such as sale of parts and whole goods accessories, on-site repairs, technical support, erection and decommissioning services, crane remanufacturing, training services and digital solutions. In addition, the Company continues to expand the rental fleet in the United Kingdom and Germany.
(now MGX Equipment Services, LLC, or “MGX”), which expanded our ability to provide new machine sales, used machine sales, aftermarket parts and service support to a variety of end market customers.
(now MGX Equipment Services, LLC, or “MGX”), which expanded our ability to provide new machine sales, used machine sales, aftermarket parts, remanufacturing and service support to a variety of end market customers.
Expand our aftermarket activities in North America: In 2021, the Company acquired the assets of two companies, Aspen Equipment Company (“Aspen”) and the crane business of H&E Equipment Services, Inc.
Expand our aftermarket activities in North America: In 2021, we acquired the assets of two companies, Aspen Equipment Company (“Aspen”) and the crane business of H&E Equipment Services, Inc.
We believe that we benefit from the following competitive advantages which create customer loyalty: strong brand names with competitive resale values, a reputation for quality and reliable products and aftermarket support and solution services, an established network of global distributors and customer relationships, broad product line offerings in the markets we serve, a commitment to customer-focused engineering design and product innovation and in-house service and distribution.
We believe that we benefit from the following competitive advantages which create customer loyalty: strong brand names with competitive resale values, a reputation for quality and reliable products and aftermarket support and solution services, an established network of global distributors and customer relationships, broad product line offerings in the markets we serve, a commitment to 8 Table of Contents customer-focused engineering design and product innovation and in-house service and distribution.
Tower cranes offer the ability to lift and distribute material at the point of use, more quickly and accurately than other types of lifting machinery, without utilizing substantial square footage on the 6 Table of Contents ground. We offer a complete line of tower crane products, including top slewing, luffing jib, topless, self-erecting and special cranes for large building projects.
Tower cranes offer the ability to lift and distribute material at the point of use, more quickly and accurately than other types of lifting machinery, without utilizing substantial square footage on the ground. We offer a complete line of tower crane products, including top slewing, luffing jib, topless, self-erecting and special cranes for large building projects.
We offer our lattice-boom crawler crane customers various attachments that provide our cranes with greater capacity in terms of height, movement and lifting. These cranes are used to lift material and equipment in a wide variety of applications, including heavy construction, bridge and highway, infrastructure and energy-related projects.
We offer our lattice-boom crawler crane customers various attachments that provide our cranes with greater capacity in terms 6 Table of Contents of height, movement and lifting. These cranes are used to lift material and equipment in a wide variety of applications, including heavy construction, bridge and highway, infrastructure and energy-related projects.
In addition, we work with various outside organizations focused on equitable hiring practices for underrepresented populations. More information about our DEI initiatives can be found in our latest CSR. Training and Talent Development We invest in our workforce by offering programs to develop and grow throughout an employee’s careers.
In addition, we work with various outside organizations focused on equitable hiring practices for underrepresented populations. More information about our DEI initiatives can be found in our latest CSR which can be found on our company website. Training and Talent Development We invest in our workforce by offering programs to develop and grow throughout an employee’s careers.
We provide expansive aftermarket services such as sale of parts and accessories, field service work, routine maintenance services, technical support, erection and decommissioning services, crane remanufacturing and training services. Additionally, we continue to invest in our rental fleet in the United States and Europe to provide additional options and flexibility to our customers.
We provide expansive aftermarket services such as sale of parts and accessories, field service work, routine maintenance services, technical support, erection and decommissioning services, crane and major component remanufacturing, training services and telematics. Additionally, we continue to invest in our rental fleet in the United States and Europe to provide additional options and flexibility to our customers.
The Company also provides tuition reimbursement and routinely invests in seminars, conferences and other training or continuing education for employees. Additionally, the CEO and SVP, Human Resources conduct annual global succession planning meetings with senior leadership and the Board of Directors to review the Company’s top talent.
The Company also provides tuition reimbursement and routinely invests in seminars, conferences and other training or continuing education for employees. Additionally, the CEO and EVP, Human Resources conduct bi-annual global succession planning meetings with senior leadership and the Board of Directors to review the Company’s top talent.
Additionally, we 9 Table of Contents have one trade union in China and one trade union in India. In North America, a small number of our employees belong to two trade unions. Health and Safety The health and safety of our employees is our number one priority and our Company goal is to be a zero-injury workplace.
Additionally, we have one trade union in China and one trade union in India. In North America, a small number of our employees belong to one of two trade unions. Health and Safety The health and safety of our employees is our number one priority and our Company goal is to be a zero-injury workplace.
Programs designed to help our employees effectively perform their duties include training courses in: environmental health and safety, welding apprenticeships, sales skills development, Lean manufacturing methodologies, The Manitowoc Way and corporate compliance (Ethics & Code of Conduct, DEI, Insider Trading and Workplace Harassment, among others).
Programs designed to help our employees effectively perform their duties include training courses in environmental health and safety, welding apprenticeships, sales skills development, Lean manufacturing methodologies, The Manitowoc Way and corporate compliance (Ethics & Code of Conduct, DEI, Anti-Bribery and Workplace Harassment, among others).
Human Capital Management Employment As of December 31, 2022, we employed approximately 4,800 people worldwide, of which approximately 1,700 were employed in the Americas segment, approximately 2,600 were employed in the EURAF segment and approximately 500 were employed in the MEAP segment. A large majority of our European employees belong to various European trade unions.
Human Capital Management Employment As of December 31, 2023, we employed approximately 4,800 people worldwide, of which approximately 1,700 were employed in the Americas segment, approximately 2,600 were employed in the EURAF segment and approximately 500 were employed 9 Table of Contents in the MEAP segment. A large majority of our European employees belong to various European trade unions.
Item 1. BUSINESS General The Manitowoc Company, Inc. (“Manitowoc,” the “Company,” “we,” “us,” or "our”) was founded in 1902 and has over a 120-year tradition of providing high-quality, customer-focused products and support services to its markets. Headquartered in Milwaukee, Wisconsin, United States, Manitowoc is one of the world's leading providers of engineered lifting solutions.
Item 1. BUSINESS General The Manitowoc Company, Inc. (“Manitowoc,” the “Company,” “we,” “us,” or "our”) was founded in 1902 and has over a 120-year tradition of providing high-quality, customer-focused products and aftermarket support services to its markets. Manitowoc is one of the world's leading providers of engineered lifting solutions.
Consistent with The Manitowoc Way, the engineering team reduced the new product development cycle from 18-24 months to 12-14 months while ensuring strict adherence to quality. The shorter product development cycle enables us to quickly seize market opportunities and gain market share.
Utilizing the principles of The Manitowoc Way, the engineering team reduced the new product development cycle from 18-24 months to 12-14 months while ensuring strict adherence to quality. The shorter product development cycle enables us to quickly seize market opportunities and gain market share.
The following table sets forth our primary competitors: Products Primary Competitors Tower Cranes Benazzato; Cattaneo; Comansa; FM Gru; Jaso; Liebherr; Raimondi; Saez; Sany; Terex Comedil/Peiner; Vicario; Wolffkran; Yongmao; XCMG; and Zoomlion Mobile Telescopic Cranes Altec; Broderson; Elliott; Hitachi Sumitomo; Kobelco; Liebherr; Load King; Manitex; Sany; Link-Belt; Tadano; Terex; XCMG; and Zoomlion 8 Table of Contents Major Customers We did not have any customers that individually comprised more than 10% of our consolidated net sales in the years ended December 31, 2022, 2021 or 2020.
The following table sets forth our primary competitors: Products Primary Competitors Tower Cranes Benazzato; Cattaneo; Comansa; Condecta; Dahan; Elmak; Favelle Favco; FM Gru; Jaso; Kroll; Liebherr; Moritsch; Raimondi; Saez; Sany; Terex Comedil/Peiner; Vicario; Wolffkran; Yongmao; XCMG; Zoomlion/Wilbert; and ZTM Mobile Telescopic Cranes Altec; Broderson; Elliott; Hitachi Sumitomo; Kobelco; Liebherr; Load King; Manitex; Sany; Link-Belt; Tadano; Terex; XCMG; and Zoomlion Major Customers We did not have any customers that individually comprised more than 10% of our consolidated net sales in the years ended December 31, 2023, 2022, or 2021.
As stewards of our diversity and inclusion initiatives, our leadership team takes a proactive approach to build and develop a diverse pipeline of talent and in 2022 the Company launched its first women’s resource group. We place particular emphasis on developing our people and building a deep and diverse talent pool to ensure sustained success over the long-term.
As stewards of our diversity and inclusion initiatives, our leadership team takes a proactive approach to build and develop a diverse pipeline of talent. We place particular emphasis on developing our people and building a deep and diverse talent pool to ensure sustained success over the long-term.
Additionally, we distribute our products through our wholly-owned distribution network under the brand name of MGX and Aspen in the United States and Manitowoc Crane Company in other parts of the world. The main products we sell are: Lattice-boom crawler cranes. Under the Manitowoc brand name, we design, manufacture, market and sell lattice-boom crawler cranes.
Additionally, we distribute our products through our wholly owned distribution network under the brand name of MGX and Aspen in certain areas of the United States. Our main products and services are: Products. Lattice-boom crawler cranes. Under the Manitowoc brand name, we design, manufacture, market and sell lattice-boom crawler cranes.
We have invested in Product Verification Centers at our major manufacturing facilities to support new product development, testing and qualification of sub-systems and final product designs. Competition We sell our products in highly competitive end markets.
In our manufacturing operations, we maintain advanced manufacturing, quality assurance and testing equipment and utilize extensive process automation. We have invested in Product Verification Centers at our major manufacturing facilities to support new product development, testing and qualification of sub-systems and final product designs. Competition We sell our products in highly competitive end markets.
In 2022, our year end RIR was 1.53 compared to the industry average of 3.6 and our LTIFR was 0.92 compared to the industry average of 1.0. Industry standards are per the U.S. Bureau of Labor and Statistics.
In 2023, our year end RIR was 1.01 compared to the industry average of 4.8 and our LTIFR was 0.79 compared to the industry average of 1.3. Industry standards are per the U.S. Bureau of Labor and Statistics.
To support the ongoing development of the Company’s top talent, we have implemented several programs such as the Manitowoc Mentorship Program, the Supervisor Leadership Program and ongoing individual development programs designed to build the leadership capabilities of our existing and future leaders. More information about our training and development can be found in our latest CSR.
To support the ongoing development of the Company’s top talent, we have implemented several programs such as the Manitowoc Mentorship Program, the Supervisor Leadership Program, Customer Support Leadership Program and ongoing individual development programs designed to build the leadership capabilities of our existing and future leaders.
Products and Aftermarket Services Our crane products are used in a wide variety of applications throughout the world, including energy production/distribution and utility, petrochemical and industrial, infrastructure, such as road, bridge and airport construction, as well as commercial and residential construction.
Offering an innovative and wide breadth of cranes to customers enables us to be more competitive in the market. Products and Aftermarket Services Our crane products are used in a wide variety of applications throughout the world, including energy production/distribution and utility, petrochemical and industrial, infrastructure, such as road, bridge and airport construction, as well as commercial and residential construction.
Our team of engineers focus on developing high performance, low maintenance, innovative products intended to create significant brand loyalty among customers. Design engineers work closely with our customers and our manufacturing and marketing staffs, enabling us to identify real-time changing end-user requirements, implement new technologies and effectively introduce product innovations.
Design engineers work closely with our customers and our manufacturing and marketing staffs, enabling us to identify real-time changing end-user requirements, implement new technologies and effectively introduce product innovations.
In 2022, we recorded 87,124 SLAMs and Interactive Observations which had a positive impact on our RIR and LTIFR by helping our workforce to identify hazards and implement pro-active mitigation measures to avoid injury or loss.
In 2023, we recorded 76,351 SLAMs and 16,990 Interactive Observations which drove improvements to both our RIR and LTIFR by helping our workforce to identify hazards and implement pro-active mitigation measures to avoid injury or loss.
Additionally, in 2022, the Company completed the acquisition of certain assets of the crane rental fleet of Honnen Equipment Company (“Honnen”), which expanded our rental portfolio and direct-to-customer footprint in Colorado, Wyoming and Nebraska. The acquisition of the assets of these businesses advances our strategy to expand our aftermarket activities within North America.
In 2022, we completed the acquisition of certain assets of the crane rental fleet of Honnen Equipment Company (“Honnen”), which expanded our rental portfolio and direct-to-customer footprint in Colorado, Wyoming and Nebraska. Additionally, in 2023, we added key territories including Missouri and South Carolina.
Engineering, Research and Development We believe our extensive engineering, research and development capabilities are key drivers of our success in creating innovative and quality products. Our dedicated locations for research and development activities are staffed by in-house engineers and technicians on three continents, supplemented with external engineering resources, who are responsible for enhancing our existing products and developing new products.
Our dedicated locations for research and development activities are staffed by in-house engineers and technicians on three continents, supplemented with external engineering resources, who are responsible for enhancing our existing products and developing new products. Our team of engineers focus on developing high performance, low maintenance, innovative products intended to create significant brand loyalty among customers.
In general, the manufacturing process involves the fabrication and machining of raw materials, primarily steel, which are then manufactured into sub-assemblies. Sub-assemblies are then assembled with purchased components into a complete crane. In our manufacturing operations, we maintain advanced manufacturing, quality assurance and testing equipment and utilize extensive process automation.
Manufacturing Process Manitowoc operates eleven manufacturing facilities (including remanufacturing facilities) across the world that utilize a variety of processes. In general, the manufacturing process involves the fabrication and machining of raw materials, primarily steel, which are then manufactured into sub-assemblies. Sub-assemblies are then assembled with purchased components into a complete crane.
Under the brand name EnCORE, our remanufacturing services offer cost-effective ways for our customers to restore a crane to its original specifications and performance. As part of this service, complete machine or major components are disassembled, cleaned, repaired, or replaced to meet manufacturer’s specifications, using genuine parts. All controls and safety devices are updated to current regulatory standards.
As part of this service, complete machines or major components are disassembled, cleaned, repaired, or replaced to meet manufacturer’s specifications, using genuine parts. All controls and safety devices are updated to current regulatory standards. Finally, the machine or component is thoroughly inspected and tested.
Supporting our CRANES+50 strategy are four breakthrough initiatives launched in 2020: 1) grow our tower crane rental and aftermarket business in Europe; 2) build out our China Belt and Road tower crane business; 3) 5 Table of Contents reinvigorate our all-terrain crane product offerings to grow market share, field population and services; and 4) expand our aftermarket activities in North America.
The bedrock of our CRANES+50 strategy are our four breakthrough initiatives: 1) Grow our tower crane rental and aftermarket business in Europe; 2) Grow our Belt and Road tower crane business with a focus on the Middle East; 3) Expand our aftermarket activities in North America; and 4) Leverage our all-terrain crane new product development to grow aftermarket.
We currently offer 16 full-service branch locations in 13 states with over 150 field service technicians that provide industry-leading technical competencies and exceptional customer support.
The acquisition of the assets of these businesses and additional territories advances our strategy to expand our aftermarket activities within North America. We currently offer 18 full-service branch locations in 15 states with over 150 field service technicians that provide industry-leading technical competencies and exceptional customer support.
Our technicians provide customers with efficient and high-quality repairs to ensure the crane products can operate to the original crane product specification and performance. Our wholly-owned distributors in North America, MGX 7 Table of Contents and Aspen, have over 150 technicians which provide on-site repair services to our customers in the region.
Our wholly owned distributors in North America, MGX and Aspen, have over 150 technicians which provide on-site repair services to our customers in the region. Additionally, we have over 150 technicians which provide on-site repair services to our customers in Europe. Technical support.
Build out our China Belt and Road tower crane business: The Company has invested in research and development to design and manufacture innovative topless tower cranes for the China Belt and Road market. Since the launch of the initiative, seven new models have been developed.
Grow our Belt and Road tower crane business with a focus on the Middle East: We have invested in research and development to design and manufacture innovative topless tower cranes for the Belt and Road, namely the Middle East market, experiencing significant growth. Since 2021, eight new models have been launched.
Our aftermarket services are offered through our crane product brand names, Manitowoc, Potain, Grove, Shuttlelift and National Crane as well as through our wholly-owned distributors, MGX and Aspen. Parts and accessories. Parts and accessories are stocked at our parts distribution centers around the world and sold through our distribution networks to ensure parts availability to our customers.
In 2023, we invested in a rental fleet in the United Kingdom to serve 7 Table of Contents growing demand. Our aftermarket services are offered through our crane product brand names, Manitowoc, Potain, Grove, Shuttlelift and National Crane, as well as through our wholly owned distributors, MGX and Aspen. Parts and accessories.
Finally, the machine or component is thoroughly inspected and tested. Additionally, EnCORE remanufactured cranes benefit from up to a one year manufacturer's warranty, including applicable software and hardware updates, and genuine parts installed with our technical expertise. Training.
Additionally, EnCORE remanufactured cranes benefit from up to a one-year manufacturer's warranty, including applicable software and hardware updates, and genuine parts installed with our technical expertise. Training. Our Manitowoc Training Center offers extensive technical training on all our crane products which are conducted at our training facilities or on-site for our distribution service technicians and some customers. Telematics.
We hold numerous patents globally pertaining to our products in addition to having pending applications for additional patents. Further, we have various registered and unregistered trademarks, copyrights and licenses. We believe our patents, trademarks and copyrights are adequately protected in customary fashions under applicable laws and we actively enforce our patents, trademarks and copyrights.
Patents, Trademarks and Licenses We utilize patent rights to protect our intellectual property and our position as a leading provider of engineered lifting solutions. We hold numerous patents globally pertaining to our products in addition to having pending applications for additional patents. Further, we have various registered and unregistered trademarks, copyrights and licenses.
Additionally, we have over 100 technicians which provide on-site repair services to our customers in Europe. Technical support. We have product-based technical support teams that provide advanced troubleshooting, major repair procedures, incident reporting and repair consultation services.
We have product-based technical support teams that provide advanced troubleshooting, major repair procedures, incident reporting and repair consultation services. Our technical support team has extensive subject matter expertise and works closely with our engineering and manufacturing teams to provide prompt and expert advice to our customers. Erection and decommissioning services.
Our distribution locations also stock operational critical and frequently used parts to increase parts fulfillment velocity and reduce customer downtime. On-site repairs. Our certified technicians can provide troubleshooting, remote diagnostic, maintenance service and repairs for our crane products.
Parts and accessories are stocked at our parts distribution centers around the world and sold through our distribution networks to ensure parts availability to our customers. Our distribution locations also stock operational critical and frequently used parts to increase parts fulfillment velocity and reduce customer downtime. On-site repairs.
Our technical support team has extensive subject matter expertise and work closely with our engineering and manufacturing teams to provide prompt and expert advice to our customers. Erection and decommissioning services. Our qualified crane service technicians from our company-owned and independent distributors assist customers in safely erecting and decommissioning cranes on job sites. Remanufacturing.
Our qualified crane service technicians from our company-owned and independent distributors assist customers in safely erecting and decommissioning cranes on job sites. Crane and major component remanufacturing. Under the brand name EnCORE, our remanufacturing services offer cost-effective ways for our customers to restore a crane to its original specifications and performance.
Grow our tower crane rental and aftermarket business in Europe: Since the launch of the initiative, the Company has invested $30.0 million of capital expenditures to grow our European tower rental fleet.
Grow our tower crane rental and aftermarket business in Europe: Since 2021, we have grown our European tower rental fleet original equipment cost by $27.7 million.
Business Strategy and Initiatives In 2021, we introduced our CRANES+50 strategy which is to grow our non-new machine sales by 50%, or to approximately $675 million, by 2026.
Supporting our long-term aspirations is our CRANES+50 strategy which is to grow our non-new machine sales to $1 billion.
Removed
Reinvigorate our all-terrain crane product offerings to grow market share, field population and services: The Company has invested in research and development to design and manufacture innovative all-terrain cranes.
Added
Aspirations, Business Strategy and Initiatives In 2023, we updated our long-term aspirations as follows: • Increase our net sales target from $2.5 billion to $3.0 billion. • Increase our non-new machine sales target from $675 million to $1 billion. • Increase our adjusted EBITDA margin target from 10% to 12%. 5 Table of Contents • Deliver adjusted return on invested capital ("Adjusted ROIC") of 15%.
Removed
Our Manitowoc Training Center offers extensive technical training on all our crane products which are conducted at our training facilities or on-site for our distribution service technicians and some customers. Manufacturing Process Manitowoc operates eleven manufacturing facilities (including remanufacturing facilities) across the world that utilize a variety of processes.
Added
Our certified technicians can provide troubleshooting, remote diagnostic, maintenance service and repairs for our crane products. Our technicians provide customers with efficient and high-quality repairs to ensure the crane products can operate to the original crane product specification and performance.
Removed
During 2022, we experienced supply chain, labor and logistics constraints, especially on electronic components and hydraulics, which impacted our ability to source parts and complete units, in addition to inflation. These challenges negatively impacted our results of operations and cash flows for 2022.
Added
Manitowoc’s Potain Connect and Grove Connect telematics solutions provide subscription-based real-time access to service information on cranes through remote troubleshooting, enhancing service support and improving speed to assist in resolving product issues. Key benefits include minimizing downtime on cranes and ability to monetize aftermarket revenue.
Removed
We continue to actively manage these challenges through price increases, alternative sourcing of parts and adapting production to limit waste and inefficiencies in the facilities. Continuing inflation or supply chain constraints are expected to occur through 2023 and may have a material adverse impact on our financial condition, results of operations or cash flows.
Added
We believe our patents, trademarks and copyrights are adequately protected in customary fashions under applicable laws and we actively enforce our patents, trademarks and copyrights. Engineering, Research and Development We believe our extensive engineering, research and development capabilities are key drivers of our success in creating innovative and quality products.
Removed
For a more detailed description of the risks related to the availability of raw materials, components and other certain commodities, refer to Item 1A. “ Risk Factors.” Patents, Trademarks and Licenses We utilize patent rights to protect our intellectual property and our position as a leading provider of engineered lifting solutions.
Added
More information about our training and development can be found in our latest CSR which can be found on our company website.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

70 edited+9 added−11 removed83 unchanged
Biggest changeOur international operations across many different jurisdictions may be subject to a number of risks specific to these countries, including: • less flexible employee relationships which can be difficult and expensive to terminate; • labor unrest; • political and economic instability (including war and acts of terrorism); • inadequate infrastructure for our operations (i.e., lack of adequate power, water, transportation and raw materials); • health concerns and related government actions (including as a result of pandemics like COVID-19); • risk of governmental expropriation of our property; • less favorable, or relatively undefined, intellectual property laws; • changes in regulatory requirements and laws; • longer customer payment cycles and difficulty in collecting trade accounts receivable; • export duties, tariffs, import controls and trade barriers (including quotas); • adverse trade policies or adverse changes to any of the policies of either the United States or any of the foreign jurisdictions in which we operate; • adverse changes in tax rates or regulations; • legal or political constraints on our ability to maintain or increase prices; • burdens of complying with a wide variety of labor practices and foreign laws, including those relating to export and import duties, environmental policies and privacy issues; • inability to utilize net operating losses incurred by our foreign operations against future income in the same jurisdiction; and • economies that are emerging or developing, that may be subject to greater currency volatility, negative growth, or recession, high inflation, limited availability of foreign exchange and other risks.
Biggest changeOur international operations across many different jurisdictions may be subject to a number of risks specific to these countries, including: • less flexible employee relationships which can be difficult and expensive to terminate; • labor unrest; • political and economic instability (including war and acts of terrorism); • inadequate infrastructure for our operations (i.e., lack of adequate power, water, transportation and raw materials); • risk of governmental expropriation of our property; • export duties, tariffs, import controls and trade barriers (including quotas); • less favorable, or relatively undefined, intellectual property laws; • changes in regulatory requirements and laws; • burdens of complying with a wide variety of labor practices and foreign laws, including those relating to export and import duties, environmental policies and privacy issues; • longer customer payment cycles and difficulty in collecting trade accounts receivable; • adverse trade policies or adverse changes to any of the policies of either the United States or any of the foreign jurisdictions in which we operate; • adverse changes in tax rates or regulations; • legal or political constraints on our ability to maintain or increase prices; • health concerns and related government actions; • inability to utilize net operating losses incurred by our foreign operations against future income in the same jurisdiction; and • economies that are emerging or developing, that may be subject to greater currency volatility, negative growth, or recession, high inflation, limited availability of foreign exchange and other risks.
A downturn or weakness in overall economic activity, or fluctuations in those other factors could have a material adverse impact on our operating results. Historically, sales of products that we manufacture and sell have been subject to cyclical variations caused by changes in general economic conditions and other factors.
Weakness or a downturn in overall economic activity, or fluctuations in those other factors could have a material adverse impact on our operating results. Historically, sales of products that we manufacture and sell have been subject to cyclical variations caused by changes in general economic conditions and other factors.
These inherent risks include, among other things: failure to achieve all or any projected synergies, performance targets or other anticipated benefits of the acquisition, strategic alliance, joint venture; failure to successfully integrate the purchased operations, technologies, products or services and maintain uniform standard controls, policies and procedures; incurring substantial unanticipated integration costs; the loss of key employees, including those of an acquired business; diversion of management’s attention from other business concerns; failure to retain the customers of the acquired business; additional debt and/or assumption of known or unknown liabilities; potential dilutive issuances of equity securities; and a write-off of goodwill, customer lists, other intangibles and amortization of expenses.
These inherent risks include, among other things: failure to achieve all or any projected synergies, performance targets or other anticipated benefits of the acquisition, strategic alliance or joint venture; failure to successfully integrate the purchased operations, technologies, products or services and maintain uniform standard controls, policies and procedures; incurring substantial unanticipated integration costs; the loss of key employees, including those of an acquired business; diversion of management’s attention from other business concerns; failure to retain the customers of the acquired business; additional debt and/or assumption of known or unknown liabilities; potential dilutive issuances of equity securities; and a write-off of goodwill, customer lists, other intangibles and amortization of expenses.
Additionally, we have one trade union in China and one trade union in India. In North America, a small number of our employees belong to two trade unions. Any significant labor relations issues with our various employee unions could have an adverse effect on our operations, reputation, results of operations and financial condition.
Additionally, we have one trade union in China and one trade union in India. In North America, a small number of our employees belong to one of two trade unions. Any significant labor relations issues with our various employee unions could have an adverse effect on our operations, reputation, results of operations and financial condition.
Our business and financial results may be affected by certain events that we cannot anticipate or that are beyond our control, such as natural or manmade disasters, epidemics, pandemics or other public health crises, national emergencies, significant labor strikes, work stoppages, the effects of climate change, political unrest, war or terrorist activities that could curtail production at our facilities and cause delayed deliveries and canceled orders.
Our business and financial results may be affected by certain events that we cannot anticipate or that are beyond our control, such as natural or manmade disasters, pandemics or other public health crises, national emergencies, significant labor strikes, work stoppages, the effects of climate change, political unrest, war or terrorist activities that could curtail production at our facilities and cause delayed deliveries and canceled orders.
Furthermore, like the cybersecurity incident that occurred in June 2021, our security measures may not detect or prevent all security threats, whether from intentional or inadvertent breaches by our employees or attacks designed to gain unauthorized access to our systems, networks and data, such as denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions.
Furthermore, like the cybersecurity incident that occurred in 2021, our security measures may not detect or prevent all security threats, whether from intentional or inadvertent breaches by our employees or attacks designed to gain unauthorized access to our systems, networks and data, such as denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions.
Many of our foreign competitors benefit from government policies that could give them a competitive advantage in the United States, including currency devaluation and erecting trade barriers that prevent American manufacturers from selling cranes in those markets. Low-cost competition from China and developing markets could also result in decreased demand for our products.
Many of our foreign competitors benefit from government policies that could give them a competitive advantage in the United States and Europe, including currency devaluation and erecting trade barriers that prevent American manufacturers from selling cranes in those markets. Low-cost competition from China and developing markets could also result in decreased demand for our products.
The existing presidential administration in the United States has taken, and make take additional, actions that may inhibit international trade by U.S.-based companies. Changes in trade sanctions laws may restrict our business practices, including cessation of business activities in sanctioned countries or with sanctioned parties, and may result in modifications to compliance programs.
The presidential administration in the United States has taken, and make take additional, actions that may inhibit international trade by U.S.-based companies. Changes in trade sanctions laws may restrict our business practices, including cessation of business activities in sanctioned countries or with sanctioned parties, and may result in modifications to compliance programs.
Violation of these laws or regulations could result in sanctions or fines and could have a material adverse effect on our financial condition, results of operations and cash flows. If we fail to protect our intellectual property rights or maintain our rights to use licensed intellectual property, our business could be adversely affected.
Violation of these laws or regulations could result in sanctions or fines and could have a material adverse effect on our financial condition, results of operations, cash flows and reputation. If we fail to protect our intellectual property rights or maintain our rights to use licensed intellectual property, our business could be adversely affected.
We cannot be certain that we will develop the capabilities required by our customers in the future. The emergence of new technologies, industry standards or customer requirements may render our equipment, inventory or processes obsolete or uncompetitive. We may have to acquire new technologies and equipment to remain competitive.
We cannot be certain that we will develop the capabilities required by our customers in the future. The emergence of new technologies, industry standards or customer requirements may render our equipment, inventory or processes obsolete or uncompetitive. We may have to acquire new technologies, skills and equipment to remain competitive.
Further, environmental laws and regulations are constantly evolving, and it is impossible to predict accurately the effect they may have upon our financial condition, results of operations or cash flows.
Further, environmental policies, laws and regulations are constantly evolving, and it is impossible to predict accurately the effect they may have upon our financial condition, results of operations or cash flows.
On May 19, 2022, the Company further amended the ABL Credit Agreement to (i) extend the maturity date to May 19, 2027 (subject to a springing maturity date of December 30, 2025 if the 2026 Notes have not been repaid in full or refinanced prior to December 30, 2025), (ii) permit the inclusion, subject to certain limitations, of the crane rental assets of certain subsidiaries in the borrowing base used to calculate availability under the ABL Credit Agreement, (iii) permit separate financing of crane rental assets not included in the borrowing base and (iv) replace U.S. dollar London Inter-bank Offered Rate with interest rates based on the secured overnight financing rate plus a credit spread adjustment (“SOFR”).
On May 19, 2022, the Company further amended the ABL Credit Agreement to (i) extend the maturity date to May 19, 2027 (subject to a springing maturity date of December 30, 2025 if the 2026 Notes have not been repaid in full or refinanced prior to December 30, 2025), (ii) permit the inclusion, subject to certain limitations, of the crane rental assets of certain subsidiaries in the borrowing base used to calculate availability under the ABL Credit Agreement, (iii) permit separate financing of crane rental assets not included in the borrowing base and (iv) replace 17 Table of Contents U.S. dollar London Inter-bank Offered Rate with interest rates based on the secured overnight financing rate plus a credit spread adjustment (“SOFR”).
We may not be able to maintain our engineering, technological and manufacturing expertise. The markets for our products are characterized by changing technology and evolving process development.
We may not be able to maintain our engineering, technological and manufacturing expertise. The markets for our products and services are characterized by changing technology and evolving process development.
Investors should carefully consider information in this Annual Report on Form 10-K in light of the risk factors described below. 10 Table of Contents Risks Relating to Our Business, Operations and Industry Macroeconomic conditions and geopolitical events could have a material adverse impact on our business, financial condition, cash flows and results of operations.
Investors should carefully consider information in this Annual Report on Form 10-K in light of the risk factors described below. Risks Relating to Our Business, Operations and Industry Macroeconomic conditions and geopolitical events could have a material adverse impact on our business, financial condition, cash flows and results of operations.
Disruptions in operations, including supply chain constraints, technical problems or other interruptions, such as floods, fire, natural disasters, epidemics, pandemics or other public health crises, have and in the future may adversely affect the manufacturing capacity of our facilities and delay our ability to produce and ship certain of our products.
Disruptions in operations, including supply chain constraints, technical problems or other interruptions, such as floods, fire, natural disasters, pandemics or other public health crises, have and in the future may adversely affect the manufacturing or service capacity of our facilities and delay our ability to produce, ship or service certain of our products.
Deterioration in macroeconomic conditions, a decline in actual results as compared with the Company's projections, a prolonged low Company equity market capitalization, or material changes to management's assumptions could require the Company to recognize additional non-cash charges to operating earnings from goodwill and/or other intangible asset impairment charges.
Deterioration in macroeconomic conditions, a decline in actual results as compared with the Company's projections, a prolonged low Company equity market capitalization, or material changes to management's assumptions could require the Company to recognize non-cash charges to operating earnings from goodwill and/or intangible asset impairment charges.
As of December 31, 2022 we employed approximately 4,800 people worldwide, of which approximately 1,700 were employed in the Americas segment, approximately 2,600 were employed in the EURAF segment and approximately 500 were employed in the MEAP segment. A large majority of our European employees belong to various European trade unions.
As of December 31, 2023 we employed approximately 4,800 people worldwide, of which approximately 1,700 were employed in the Americas segment, approximately 2,600 were employed in the EURAF segment and approximately 500 were employed in the MEAP segment. A large majority of our European employees belong to various European trade unions.
If we do not meet customers’ product quality, reliability standards and expectations, we may experience increased or unexpected product warranty claims and other adverse consequences to our business. Product quality and reliability are significant factors influencing customers' decisions to purchase our products.
If we do not meet customers’ product quality, reliability standards and expectations, we may experience increased or unexpected product warranty claims and other adverse consequences to our business. Product quality and reliability are significant factors influencing customers' decisions to purchase our products and aftermarket services.
In order to pursue this strategy successfully, we must identify attractive acquisitions, strategic alliances, joint venture opportunities, potentially obtain financing for future acquisitions on satisfactory terms, successfully complete the transaction, some of which may be large and complex, and manage post-closing issues such as integration of the acquired company or employees.
In order to 13 Table of Contents pursue this strategy successfully, we must identify attractive acquisitions, strategic alliances, joint venture opportunities, potentially obtain financing for future acquisitions on satisfactory terms, successfully complete the transaction, some of which may be large and complex, and manage post-closing issues such as integration of the acquired company or employees.
Failure to anticipate and adapt to customers’ changing technological needs and requirements or to hire and retain a sufficient number of engineers and maintain engineering, technological and manufacturing expertise may have a material adverse effect on our business.
Failure to anticipate and adapt to customers’ changing technological needs and requirements or to hire and retain a sufficient number of engineers and service technicians and maintain engineering, technological, manufacturing and service expertise may have a material adverse effect on our business.
In particular, demand for our products is cyclical and is impacted by the strength of the economy, generally, the availability of financing and other factors, including crude oil prices, that may have an effect on the level of construction activity on an international, national or regional basis, each of which have been and/or continue to be negatively impacted by global supply chain constraints, labor availability and cost pressures, logistics constraints, inflation, rising interest rates, recessionary concerns and geopolitical events.
In particular, demand for our products is cyclical and is impacted by the strength of the economy, generally, the availability of financing and other factors, including crude oil prices, that may have an effect on the level of construction activity on an international, national or regional basis, each of which have been and/or continue to be negatively impacted by global supply chain constraints, labor constraints, logistic constraints, cost pressures, inflation, high interest rates, recessionary concerns and geopolitical events.
Such laws and regulations could also restrict our ability to modify or expand our facilities, could require us to acquire costly equipment, or could impose other significant expenditures. Our international sales and operations are subject to applicable laws relating to trade, export controls and foreign corrupt practices, the violation of which could adversely affect our operations.
Such laws and regulations could also restrict our ability to modify or expand our facilities, could require us to acquire costly equipment, or could impose other significant expenditures. 20 Table of Contents Our international sales and operations are subject to applicable laws relating to trade, export controls and foreign corrupt practices, the violation of which could adversely affect our operations.
Our profitability also depends on our ability to manage and contain our other operating expenses such as the cost of utilities, factory supplies, factory space costs, equipment rental, repairs and maintenance and freight and packaging expenses.
Our profitability also depends on our ability to manage and contain our other operating expenses such as the cost of factory supplies, factory space, equipment rental, repairs and maintenance and freight and packaging expenses.
The failure of the products that we manufacture or our manufacturing processes and facilities to comply with applicable statutory and regulatory requirements may subject us to legal fines or penalties and, in some cases, require us to shut down or incur considerable expense to correct a manufacturing process or facility.
The failure of the products that we manufacture or our manufacturing processes and facilities to comply with applicable statutory and regulatory 19 Table of Contents requirements may subject us to legal fines or penalties and, in some cases, require us to shut down or incur considerable expense to correct a manufacturing process or facility.
The continued success of our business will depend upon our ability to: • hire, retain and expand our pool of qualified engineering and technical personnel; • maintain technological leadership in our industry; • successfully anticipate or respond to changes in manufacturing processes in a cost-effective and timely manner; and • successfully anticipate or respond to changes in cost to serve in a cost-effective and timely manner.
The continued success of our business will depend upon our ability to: • hire, retain and expand our pool of qualified engineering and technical personnel; • maintain technological leadership in our industry; • successfully anticipate or respond to rapidly changing technologies; • successfully anticipate or respond to changes in manufacturing processes in a cost-effective and timely manner; and • successfully anticipate or respond to changes in cost to serve in a cost-effective and timely manner.
Item 1A. RI SK FACTORS The Company's financial position, results of operations and cash flows are subject to various risks, many of which are not exclusively within the Company's control, which may cause actual performance to differ materially from historical or projected future performance.
Item 1A. RI SK FACTORS The Company's financial position, results of operations and cash flows are subject to various risks, many of which are not exclusively within the Company's control, which may cause actual performance to differ materially from historical or projected 10 Table of Contents future performance.
Distributors may face financial difficulties, including bankruptcy, which could harm our collection of accounts receivable and financial results. Violations of the Foreign Corrupt Practices Act or similar laws by distributors or other third-party intermediaries could have a material impact on our business.
Distributors may face financial difficulties, including bankruptcy, which could harm our collection of accounts receivable and financial results. Violations of the Foreign Corrupt Practices Act or 15 Table of Contents similar laws by distributors or other third-party intermediaries could have a material impact on our business.
Our failure to maintain or obtain necessary licenses or an adverse outcome in any litigation relating to patent infringement or other intellectual property matters could have a material adverse effect on our financial condition, results of operations and cash flows. 21 Table of Contents
Our failure to maintain or obtain necessary licenses or an adverse outcome in any litigation relating to patent infringement or other intellectual property matters could have a material adverse effect on our financial condition, results of operations and cash flows.
On June 17, 2021, the Company amended the ABL Credit Agreement to adjust certain negative covenants which reduces restrictions on the Company's ability to expand its rental business.
On June 17, 2021, the Company amended the ABL Credit Agreement to adjust certain negative covenants which reduced restrictions on the Company's ability to expand its rental business.
Such disruptions may not be covered by our business interruption insurance. We have significant manufacturing and sales of our products outside of the United States and such international operations could be subject to a number of risks specific to these countries.
Such disruptions may not be covered by our business interruption insurance. 14 Table of Contents We have significant manufacturing and sales of our products outside of the United States and such international operations could be subject to a number of risks specific to these countries.
For the years ended December 31, 2022, 2021 and 2020, approximately 55%, 61% and 61%, respectively, of our net sales were attributable to products sold outside of the United States. Expanding the Company’s international sales is part of our growth strategy.
For the years ended December 31, 2023, 2022 and 2021, approximately 53%, 55%, and 61%, respectively, of our net sales were attributable to products sold outside of the United States. Expanding the Company’s international sales is part of our growth strategy.
In addition, increasing laws and regulations dealing with environmental aspects of the products we manufacture can result in significant expenditures in designing and manufacturing new products that satisfy such new laws and regulations. In particular, climate change is receiving increasing attention worldwide. Many scientists, legislators and others attribute climate change to increased levels of greenhouse gas emissions.
In addition, increasing laws and regulations dealing with environmental aspects of the products we manufacture can result in significant expenditures in designing and manufacturing new products that satisfy such new laws and regulations. In particular, climate change continues to receive attention worldwide. Many scientists, legislators and others attribute climate change to increased levels of greenhouse gas emissions.
Deterioration in the credit quality of our customers or the overall health of the 18 Table of Contents finance industry could negatively impact our customers’ ability to obtain the resources needed to make purchases of our equipment or their ability to obtain third-party financing.
Deterioration in the credit quality of our customers or the overall health of the finance industry could negatively impact our customers’ ability to obtain the resources needed to make purchases of our equipment or their ability to obtain third-party financing.
Those laws and regulations and their interpretation and application may also change from time to time and those 20 Table of Contents changes could have a material adverse effect on our business, investments and results of operations.
Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations.
Adverse economic conditions, including global supply chain constraints, labor availability and cost pressures, logistics constraints, pandemics or public health crises, inflation, rising interest rates, recessionary concerns and geopolitical events, have caused and may continue to cause customers to forego or postpone new purchases in favor of repairing existing machinery.
Adverse economic conditions, including global supply chain constraints, labor constraints, logistic constraints, and cost pressures, pandemics or public health crises, inflation, high interest rates, recessionary concerns and geopolitical events, have caused and may continue to cause customers to forego or postpone new purchases in favor of repairing existing machinery.
In addition, because we maintain limited raw material and component inventories, even brief unanticipated delays in delivery by suppliers - including those due to supply chain constraints, labor availability and cost pressures, logistic constraints, geopolitical events, capacity constraints, labor disputes, impaired financial condition of suppliers, epidemics, pandemics, global health crises, other infectious diseases, weather emergencies or other natural disasters - may impair our ability to satisfy our customers, as well as delay our ability to produce and ship certain of our products, and have had and may continue to adversely affect our financial performance.
In addition, because we maintain limited raw material and component inventories, even brief unanticipated delays in delivery by suppliers - including those due to supply chain constraints, labor constraints, logistic constraints, geopolitical events, supplier capacity constraints, labor disputes, impaired financial condition of suppliers, pandemics, global health crises, other infectious diseases, weather emergencies or other natural disasters - may impair our ability to satisfy our customer demand, as well as delay our ability to produce and ship certain of our products, and have had and may continue to adversely affect our financial performance.
When we establish new facilities, we may not be able to maintain or 13 Table of Contents develop our engineering, technological and manufacturing expertise due to a lack of trained personnel, effective training of new staff or technical difficulties with machinery.
When we establish new facilities, we may not be able to maintain or develop our engineering, technological, manufacturing and service expertise due to a lack of trained personnel, effective training of new staff or technical difficulties with machinery.
The borrowing capacity under the ABL Revolving Credit Facility is based on the value of inventory, 17 Table of Contents accounts receivable and certain fixed assets of the Loan Parties.
The borrowing capacity under the ABL Revolving Credit Facility is based on the value of inventory, accounts receivable and certain fixed assets of the Loan Parties.
Some of our customers may not be able to obtain financing with third parties to purchase our products, and we could incur expenses associated with our assistance to customers in securing third-party financing. A portion of our sales are financed by third-party finance companies on behalf of our customers.
Financial Risks 16 Table of Contents Some of our customers may not be able to obtain financing with third parties to purchase our products, and we could incur expenses associated with our assistance to customers in securing third-party financing. A portion of our sales are financed by third-party finance companies on behalf of our customers.
Additionally, there is a delay in the realization of pricing due to longer lead times of orders in our backlog, exacerbated by supply chain and logistics constraints that have impacted our ability to convert backlog into revenue, and shipping constraints that have resulted in delays in shipments in certain regions.
Additionally, there is generally a delay in the realization of price increases and provisional pricing strategies due to longer lead times of orders in our backlog, exacerbated by supply chain, labor and logistics constraints that have impacted our ability to convert backlog into revenue, and shipping constraints that have resulted in delays in shipments in certain regions.
We sell most of our products in highly competitive end markets. We compete in each of those end markets based on product design, quality of products, quality and responsiveness of product support services, product performance, maintenance costs and price. Some of our competitors may have greater financial, marketing, manufacturing and distribution resources than we do.
We compete in each of those end markets based on product design, quality of products, quality and responsiveness of product support services, product performance, cost of ownership, maintenance costs and price. Some of our competitors may have greater financial, marketing, manufacturing and distribution resources than we do.
Macroeconomic conditions, including inflation, rising interest rates, recessionary concerns and distress in global credit markets, as well as ongoing global supply chain constraints, labor availability and cost pressures such as changes in raw material and commodity costs, and logistics constraints have had, and may continue to have, a negative impact on our business, financial condition, cash flows and results of operations.
Macroeconomic conditions, including inflation, high interest rates and recessionary concerns, as well as continuing global supply chain constraints, labor constraints, logistics constraints and cost pressures such as changes in raw material and commodity costs have had, and may continue to have, a negative impact on our business, financial condition, cash flows and results of operations.
Our results of operations are subject to exchange rate and other currency risks. A significant movement in exchange rates could adversely impact our results of operations and cash flows. Some of our operations are and will continue to be conducted by subsidiaries in foreign countries.
A significant movement in exchange rates could adversely impact our results of operations and cash flows. Some of our operations are and will continue to be conducted by subsidiaries in foreign countries.
The amount of debt we maintain could have consequences, including increasing our vulnerability to general adverse economic and industry conditions; requiring a substantial portion of our cash flows from operations be used for the payment of interest rather than to fund working capital, capital expenditures, acquisitions and general corporate requirements; limiting our ability to obtain additional financing; and limiting our flexibility in planning for, or reacting to, changes in our business and the end markets in which we operate.
The amount of debt we maintain could have consequences, including increasing our vulnerability to general adverse economic and industry conditions; requiring a substantial portion of our cash flows from operations be used for the payment of interest rather than to fund working capital, capital expenditures, acquisitions and general corporate requirements, especially in a high interest environment; limiting our ability to obtain additional financing and/or to refinance our existing debt (and the potential for higher costs associated with any additional financing or the refinancing of our existing debt); and limiting our flexibility in planning for, or reacting to, changes in our business and the end markets in which we operate.
Likewise, a substantial increase in the number of claims that are made against us or the amounts of any judgments or settlements could materially and adversely affect our reputation and our financial condition, results of operations and cash flows.
Likewise, a substantial increase in the number of claims that are made against us or the amounts of any judgments or settlements could materially and adversely affect our reputation, the ability to obtain and the rates for insurance coverages, and our financial condition, results of operations and cash flows.
The Company purchases one branded crane and parts under strategic alliances from third-party suppliers which are then sold into our markets. If we are not able to effectively manage pricing from these suppliers, our financial performance could be 12 Table of Contents adversely affected.
The Company purchases under strategic alliances from third-party suppliers which are then sold into our markets. If we are not able to effectively manage pricing from these suppliers, our financial performance could be adversely affected.
Any operational failure or breach of security from increasingly sophisticated cyber threats could lead to the loss or disclosure of both our and our customers’ financial, product and other confidential information, result in regulatory actions and legal proceedings, and/or have an adverse effect on our business and reputation. 14 Table of Contents Any disruption in our information systems could disrupt our operations and would be adverse to our business and financial operations.
Any operational failure or breach of security from increasingly sophisticated cyber threats could lead to the loss or disclosure of both our and our customers’ financial, product and other confidential information, result in regulatory actions, legal proceedings and increased insurance costs, and have an adverse effect on our business and reputation.
The results of an audit or contests thereto could have a material adverse effect on operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties and/or interest assessments. We face risks associated with our pension and other postretirement benefit obligations.
The results of an audit or contests thereto could have a material adverse effect on operating results 18 Table of Contents and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties and/or interest assessments.
We could be affected by the loss of any of our executive officers who are responsible for formulating and implementing our business plan and strategy. In addition, we need to recruit and retain additional management personnel and other skilled employees.
We could be affected by the loss of any of our executive officers who are responsible for formulating and implementing our business plan and strategy. In addition, we need to recruit and retain additional management personnel and other skilled employees. However, competition is high for skilled technical personnel among companies that rely on engineering and technology.
Financial Risks Our goodwill and other intangible assets represent a material amount of our total assets; as a result, impairment charges have had, and future impairment charges may have, a material adverse effect on our results of operations. As of December 31, 2022, goodwill and other intangible assets totaled $206.8 million, or approximately 12.8% of our total assets.
Our goodwill and intangible assets represent a material amount of our total assets; as a result, impairment charges have had, and future impairment charges may have, a material adverse effect on our results of operations. As of December 31, 2023, goodwill and intangible assets — net totaled $205.2 million, or approximately 12.0% of our total assets.
Our designs, manufacturing processes and facilities need to comply with applicable statutory and regulatory requirements. We may also have the responsibility to ensure that products we design satisfy safety and regulatory standards including those applicable to our customers and to obtain any necessary certifications.
We may also have the responsibility to ensure that products we design satisfy safety and regulatory standards including those applicable to our customers and to obtain any necessary certifications.
If we fail to identify, manage, complete and appropriately integrate acquisitions, strategic alliances, joint ventures or other significant transactions, it could adversely affect our future results. We completed two acquisitions in 2021 and expect to continue to pursue acquisitions, strategic alliances, joint ventures or other significant transactions.
If we fail to identify, manage, complete and appropriately integrate acquisitions, strategic alliances, joint ventures or other significant transactions, it could adversely affect our future results. We completed two acquisitions in 2021 and the acquisition of certain assets of a dealer in 2022.
We have both funded and unfunded pension and other postretirement benefit plans worldwide. As of December 31, 2022, our projected benefit obligations under our pension and other postretirement benefit plans exceeded the fair value of plan assets by an aggregate of approximately $62.9 million (“unfunded status”), as compared to $84.6 million as of December 31, 2021.
As of December 31, 2023, our projected benefit obligations under our pension and other postretirement benefit plans exceeded the fair value of plan assets by an aggregate of approximately $61.4 million (“unfunded status”), as compared to $62.9 million as of December 31, 2022.
As of December 31, 2022, our total consolidated debt was $385.6 million compared to $407.2 million as of December 31, 2021.
As of December 31, 2023, our total consolidated debt was $372.1 million compared to $385.6 million as of December 31, 2022.
In addition, if the actual value of the equipment for which we have provided a residual value guaranty declines below the amount of our guaranty, we may incur additional costs, which may negatively impact our financial condition, results of operations and cash flows. Exposure to additional tax liabilities could have a negative impact on our operating results.
In addition, if the actual value of the equipment for which we have provided a residual value guaranty declines below the amount of our guaranty, we may incur additional costs, which may negatively impact our financial condition, results of operations and cash flows. Our results of operations are subject to exchange rate and other currency risks.
We depend on various information systems to successfully manage our business, including managing orders, suppliers, accounting controls and payroll.
Any disruption in our information systems could disrupt our operations and would be adverse to our business and financial operations. We depend on various information systems to successfully manage our business, including managing orders, suppliers, accounting controls and payroll.
Continuing or worsening inflation and/or supply chain and logistics constraints may have a material adverse impact on our financial condition, results of operations and/or cash flows.
Continuing or worsening inflation and/or supply chain, labor and logistics constraints may have a material adverse impact on our financial condition, results of operations and/or cash flows. During the year ended December 31, 2023, the Company's operations in Russia were substantially curtailed.
Such interruptions have caused, and in the future could cause, delays in production and cause us to incur additional expenses such as charges for expedited deliveries for products that are delayed. Additionally, our customers may have the ability to cancel purchase orders in the event of any delays in production and may decrease future orders if delays are persistent.
Such interruptions have caused, and in the future could cause, delays in production or service, and cause us to incur additional expenses such as charges for expedited deliveries for products that are delayed.
To the extent that such disruptions do not result from damage to our physical property, these disruptions may not be covered by our business interruption insurance. Any such disruptions may adversely affect our business, operations and financial results. We depend on our key executive officers, managers and skilled personnel and may have difficulty retaining and recruiting qualified employees.
Any such disruptions may adversely affect our business, operations and financial results. We depend on our key executive officers, managers and skilled personnel and may have difficulty retaining and recruiting qualified employees.
The conflict could also result in the impairment of assets and result in higher than expected charges to curtail our operations in Russia. Because we participate in end markets that are highly competitive, our net sales and profits could decline as we respond, or fail to effectively respond, to competition.
Because we participate in end markets that are highly competitive, our net sales and profits could decline as we respond, or fail to effectively respond, to competition. We sell most of our products in highly competitive end markets.
Our restructuring plans will require significant cash and non-cash integration and implementation costs or charges in order to achieve those cost savings, which could offset any such savings and other benefits. 16 Table of Contents Although we have considered the impact of local regulations, negotiations with employee representatives and the related costs associated with our restructuring activities, factors beyond the control of management may affect the timing of these projects and therefore affect when savings will be achieved under the plans.
Although we have considered the impact of local regulations, negotiations with employee representatives and the related costs associated with our restructuring activities, factors beyond the control of management may affect the timing of these projects and therefore affect when savings will be achieved under the plans.
Occasionally, market prices of some of our key raw materials increase significantly, including as a result of tariffs, other trade barriers, macroeconomic conditions or geopolitical events, resulting in shortages. If in the future we are not able to reduce product costs in other areas, or pass raw material price increases on to our customers, our margins could be adversely affected.
Occasionally, market prices of some of our key raw materials increase significantly, including as a result of tariffs, other trade barriers, macroeconomic conditions or geopolitical events, resulting in increases in the cost of our products or shortages.
For instance, we were negatively impacted in 2022 by continued inflation, mainly related to wages, logistics, energy, raw material and component costs, which we expect to continue in 2023. In addition, supply chain and logistics constraints impacted our ability to source parts and complete and ship units in 2022, which negatively impacted our results of operations and cash flows.
For instance, supply chain, labor and logistics constraints impacted our ability to source parts, complete and ship units, and service cranes in 2023, which negatively impacted our results of operations and cash flows.
Additionally, the level of construction activity and customer demand has been and may continue to be impacted by pandemics or global health crises, such as the COVID-19 pandemic.
Additionally, the level of construction activity and customer demand has been and may continue to be impacted by pandemics or global health crises. During periods of expansion in construction activity, we generally have benefited from increased demand for our products.
However, competition is high for skilled technical personnel among companies that rely on engineering and technology, especially in light of the labor pressures resulting from the COVID-19 pandemic, and the loss of qualified employees or an inability to attract, retain and motivate additional skilled employees required for the operation and expansion of our business could hinder our ability to conduct design, engineering and manufacturing activities successfully and develop marketable products.
The loss of qualified employees or an inability to attract, retain and motivate additional skilled employees required for the operation and expansion of our business could hinder our ability to conduct design, engineering and manufacturing activities successfully and develop marketable products, as well as successfully expand our aftermarket service business.
If competition in our industry intensifies or if our current competitors lower their prices for competing products, we may lose sales or be required to lower the prices we charge for our products, which may undermine our ability to generate returns on our investments.
If competition in our industry intensifies or if our current competitors lower their prices for competing products, we may lose sales or be required to lower the prices we charge for our products, which may undermine our ability to generate returns on our investments. 12 Table of Contents We have incurred and may incur in the future additional expenses and delays due to interruptions at our manufacturing and service facilities as a result of supply chain constraints, and in the future we may also incur additional expenses and delays due to technical problems or other interruptions at our manufacturing and service facilities.
Geopolitical events, including the ongoing conflict between Russia and Ukraine and the related economic sanctions by Western governments on Russia, have had and may continue to lead to significant volatility in raw material and component costs in Europe, exacerbating the inflation and supply chain situation.
Geopolitical events, including the ongoing conflicts in Ukraine and in the Middle East, have had and may continue to lead to logistic constraints, higher logistic costs, and significant volatility in raw material and component costs in Europe, exacerbating the inflation and supply chain situation, which may have a material adverse impact on our financial condition, results of operations and/or cash flows.
We continually seek ways to simplify or improve processes, eliminate excess capacity and reduce costs in all areas of our operations, which from time to time includes restructuring activities. In prior years we implemented significant restructuring activities across our global manufacturing, sales and distribution footprint, which includes workforce reductions and facility consolidations.
We continually seek ways to simplify or improve processes, eliminate excess capacity and reduce costs in all areas of our operations, which from time to time includes restructuring activities. Our restructuring actions may not be as effective as we anticipate, and we may fail to realize the cost savings we expect from these actions.
While additional regulation of emissions in the future appears likely, how such new regulations would ultimately affect our business, operations or financial results is unknown at this time. 19 Table of Contents If our manufacturing processes and products do not comply with applicable statutory and regulatory requirements, or if we manufacture products containing design or manufacturing defects, demand for our products could decline and we could be subject to product liability claims.
If our manufacturing processes and products do not comply with applicable statutory and regulatory requirements, or if we manufacture products containing design or manufacturing defects, demand for our products could decline and we could be subject to product liability claims. Our designs, manufacturing processes and facilities need to comply with applicable statutory and regulatory requirements.
We regularly undergo tax audits in various jurisdictions in which we operate.
Exposure to additional tax liabilities could have a negative impact on our operating results. We regularly undergo tax audits in various jurisdictions in which we operate.
Removed
Global supply chain and logistics constraints have also impacted end market customers, particularly in the European construction industry which resulted in the postponement of certain construction projects in 2022. While we have implemented price increases and provisional pricing strategies, we may not be able to fully mitigate the impact of cost inflation on margins.
Added
As a result, the Company released $9.3 million of non-cash foreign currency translation adjustments recorded in accumulated other comprehensive loss on the Consolidated Balance Sheets to other income (expense) - net in the Consolidated Statement of Operations. The Company does not anticipate material future charges related to the curtailment of operations in Russia.
Removed
Ongoing economic sanctions targeting Russia may cause further disruptions to our supply chain and impact access to certain materials in our European operations, which may have a material adverse impact on our financial condition, results of operations and/or cash flows.
Added
If in the future we are unable to reduce product costs in other areas, or pass raw material price increases on to our customers, our margins could be adversely affected.
Removed
We have significant operations worldwide, including in the United States, France, Germany, Portugal, Italy and China, and each of these countries, albeit at varying degrees, have been affected by the COVID-19 pandemic, since the first quarter of 2020.
Added
Additionally, our customers may have the ability to cancel purchase orders in the event of any delays in production or service and may decrease future orders if delays are persistent. To the extent that such disruptions do not result from damage to our physical property, these disruptions may not be covered by our business interruption insurance.
Removed
Further, global trade conditions and customer trends that originated during the pandemic continue to persist and may have a long-lasting adverse impact on our results independently of the progress of the pandemic.
Added
We expect to continue to pursue acquisitions, strategic alliances, joint ventures or other significant transactions in line with our strategy.
Removed
The extent to which our operations may continue to be impacted by the COVID-19 pandemic will depend largely on future developments, including the severity of new variants and resulting government actions that could negatively impact global supply chain and customer demand. During periods of expansion in construction activity, we generally have benefited from increased demand for our products.
Added
If we fail to maintain an effective network for distribution of our products and services, it could affect our business and financial results. We sell some of our products and provide aftermarket services through both independent third parties such as distributors, agents and channel partners (collectively referred to as distributors) and wholly owned subsidiaries.

… 10 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed0 unchanged
Biggest changeFacility Location Type of Facility Milwaukee, Wisconsin Global Headquarters Americas Shady Grove, Pennsylvania Manufacturing/Office Dallas, Texas Distribution/Service Houston, Texas Distribution/Service Phoenix, Arizona Distribution/Service EURAF Wilhelmshaven, Germany Manufacturing/Office Niella Tanaro, Italy Manufacturing/Office Moulins, France Manufacturing/Office Charlieu, France Manufacturing/Office Saint Pierre de Chandieu, France Warehouse/Office Baltar, Portugal Manufacturing/Office MEAP Zhangjiagang, China Manufacturing/Office
Biggest changeFacility Location Type of Facility Milwaukee, Wisconsin Global Headquarters Americas Shady Grove, Pennsylvania Manufacturing/Office Jeffersonville, Indiana Warehouse Bloomington, Minnesota Distribution/Service Belle Chasse, Louisiana Distribution/Service Aiken, South Carolina Distribution/Service Houston, Texas Distribution/Service EURAF Wilhelmshaven, Germany Manufacturing/Office Niella Tanaro, Italy Manufacturing/Office Moulins, France Manufacturing/Office Charlieu, France Manufacturing/Office Saint Pierre de Chandieu, France Warehouse/Office Baltar, Portugal Manufacturing/Office MEAP Zhangjiagang, China Manufacturing/Office
Item 2. P ROPERTIES Manitowoc maintains leased and owned manufacturing, warehouse, field testing, service and distribution and office facilities throughout the world. The Company’s corporate office is located in Milwaukee, Wisconsin. The Company believes that its facilities currently in use are suitable and have adequate capacity to meet its present and foreseeable future demand.
Item 2. P ROPERTIES Manitowoc maintains leased and owned manufacturing, warehouse, service and distribution and office facilities throughout the world. The Company’s corporate office is located in Milwaukee, Wisconsin. The Company believes that its facilities currently in use are suitable and have adequate capacity to meet its present and foreseeable future demand.
Manitowoc management continually monitors the Company’s capacity needs and makes adjustments as dictated by market and other conditions. The following table provides information about material facilities owned or leased by the Company as of December 31, 2022.
Manitowoc management continually monitors the Company’s capacity needs and makes adjustments as dictated by market and other conditions. The following table provides information about material facilities owned or leased by the Company as of December 31, 2023.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

8 edited+2 added−0 removed6 unchanged
Biggest changeRavenscroft 44 President and Chief Executive Officer 2020 Brian P. Regan 49 Executive Vice President and Chief Financial Officer 2022 Jennifer L. Peterson 46 Executive Vice President, General Counsel and Secretary 2022 Leslie L.
Biggest changeRavenscroft 45 President and Chief Executive Officer 2020 Brian P. Regan 50 Executive Vice President and Chief Financial Officer 2022 Jennifer L. Peterson 47 Executive Vice President, General Counsel and Secretary 2022 Leslie L. Middleton 54 Executive Vice President, Americas and EU Mobile Cranes 2020 James S.
Regan served in positions of increasing responsibility at SPX Corporation (2006- 2018) where he most recently served as Vice President Finance, Chief Financial Officer of SPX Transformer Solutions. Prior to SPX Corporation, Mr. Regan served in positions of increasing responsibility at Ernst & Young LLP (2000-2006) and Ogilvy & Mather (1997-2000).
Regan served in positions of increasing responsibility at SPX Corporation (2006-2018) where he had most recently served as Vice President Finance, Chief Financial Officer of SPX Transformer Solutions. Prior to SPX Corporation, Mr. Regan served in positions of increasing responsibility at Ernst & Young LLP (2000-2006) and Ogilvy & Mather (1997-2000).
Ravenscroft also worked at Westinghouse Air Brake Technologies and Janney Montgomery Scott. He holds an MBA from Carnegie Mellon University and a Bachelor of Arts in Economics from Bucknell University. Brian P. Regan has served as Executive Vice President and Chief Financial Officer of the Company since May 2022.
Ravenscroft also worked at Westinghouse 23 Table of Contents Air Brake Technologies and Janney Montgomery Scott. He holds an MBA from Carnegie Mellon University and a Bachelor of Arts in Economics from Bucknell University. Brian P. Regan has served as Executive Vice President and Chief Financial Officer of the Company since May 2022.
Ravenscroft served as Regional Managing Director of the North American Minerals business for the Weir Group (2013-2016); 22 Table of Contents President and Group Executive of Process & Flow Control Group of Robbins & Myers (2011-2013); and Regional Vice President of Industrial Products Group for Gardner Denver, Inc. (2008-2011). Mr.
Ravenscroft served as Regional Managing Director of the North American Minerals business for the Weir Group (2013-2016); President and Group Executive of Process & Flow Control Group of Robbins & Myers (2011-2013); and Regional Vice President of Industrial Products Group for Gardner Denver, Inc. (2008-2011). Mr.
Item 4. MINE SA FETY DISCLOSURE Not Applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICER S Each of the following executive officers of the Company has been elected by the Board of Directors. The information presented below is as of February 24, 2023. Name Age Position With The Registrant Principal Position Held Since Aaron H.
Item 4. MINE SA FETY DISCLOSURE Not Applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICER S Each of the following executive officers of the Company has been elected by the Board of Directors. The information presented below is as of February 23, 2024. Name Age Position With The Registrant Principal Position Held Since Aaron H.
Prior to his appointment, he was the Vice President, Corporate Controller and Principal Accounting Officer since November 2018, overseeing the Company’s accounting and financial reporting teams and was also responsible for the Treasury function from 2020-2021. Before joining Manitowoc, Mr.
Prior to his appointment, he was the Vice President, Corporate Controller and Principal Accounting Officer since November 2018, overseeing the Company’s accounting and financial reporting teams and was also responsible for the Treasury function beginning in 2020. Before joining Manitowoc, Mr.
Middleton 53 Executive Vice President, Americas and EU Mobile Cranes 2020 The following paragraphs provide further information as to our executive officers’ duties and their employment history: Aaron H. Ravenscroft has served as the President and Chief Executive Officer of the Company since August 2020.
Cook 40 Executive Vice President, Human Resources 2023 The following paragraphs provide further information as to our executive officers’ duties and their employment history: Aaron H. Ravenscroft has served as the President and Chief Executive Officer of the Company since August 2020.
Minerals and Executive Vice President Operations at Weir Minerals North America (2014-2016); Vice President and General Manager of Gardner Denver (2009-2013); Director of Manufacturing at Magnet Schultz of America (2004-2009); and Director of Manufacturing and Performance Systems at Vapor Corporation (1995-2004). 23 Table of Contents PAR T II
Minerals and Executive Vice President Operations at Weir Minerals North America (2014-2016); Vice President and General Manager of Gardner Denver (2009-2013); Director of Manufacturing at Magnet Schultz of America (2004-2009); and Director of Manufacturing and Performance Systems at Vapor Corporation (1995-2004). James S. Cook has served as Executive Vice President, Human Resources since May 2023.
Added
Prior to his appointment, he served as Senior Vice President, Human Resources since August 2022, Senior Vice President, EH&S (Environment, Health & Safety) and The Manitowoc Way, since August 2022 and Vice President, EH&S and Security since August 2017. Before joining Manitowoc, Mr.
Added
Cook served in progressive executive roles at Hansa Heavy Lift (2015-2017), SAL Heavy Lift (2012-2015), Aida Cruises (2012), Holland America Line (2003-2012), and served as an Officer in the British Royal Navy (2002). 24 Table of Contents PAR T II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−3 removed2 unchanged
Biggest change(62.46 )% 18.48 % (23.94 )% 39.67 % (50.73 )% S&P 500 Index (4.38 )% 31.49 % 18.40 % 28.71 % (18.11 )% Russell 2000 Index (11.01 )% 25.53 % 19.96 % 14.82 % (20.44 )% Indexed Returns Years Ending December 31, 2017 2018 2019 2020 2021 2022 The Manitowoc Company, Inc. 100.00 37.54 44.48 33.83 47.25 23.28 S&P 500 Index 100.00 95.62 125.72 148.85 191.58 156.88 Russell 2000 Index 100.00 88.99 111.70 134.00 153.85 122.41
Biggest changeTotal Return to Shareholders (Includes reinvestment of dividends) Annual Return Percentages Years Ending December 31, 2019 2020 2021 2022 2023 The Manitowoc Company, Inc. 18.48 % (23.94 )% 39.67 % (50.73 )% 82.21 % S&P 500 Index 31.49 % 18.40 % 28.71 % (18.11 )% 26.29 % Russell 2000 Index 25.53 % 19.96 % 14.82 % (20.44 )% 16.93 % 25 Table of Contents Indexed Returns Years Ending December 31, 2018 2019 2020 2021 2022 2023 The Manitowoc Company, Inc. 100.00 118.48 90.12 125.86 62.02 113.00 S&P 500 Index 100.00 131.49 155.68 200.37 164.08 207.21 Russell 2000 Index 100.00 125.53 150.58 172.90 137.56 160.85
The amount and timing of any dividends are determined by the Board of Directors at its regular meetings each year, subject to limitations within the indenture governing the Company’s 2026 Notes and the Company’s ABL Revolving Credit Facility described below. For the years ended December 31, 2022 and 2021, no cash dividends were declared or paid.
The amount and timing of any dividends are determined by the Board of Directors at its regular meetings each year, subject to limitations within the indenture governing the Company’s 2026 Notes and the Company’s ABL Revolving Credit Facility described below. For the years ended December 31, 2023 and 2022, no cash dividends were declared or paid.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PRUCHASES OF EQUITY SECURITIES The Company’s common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol MTW. The number of shareholders of record of common stock as of December 31, 2022 was 509.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PRUCHASES OF EQUITY SECURITIES The Company’s common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol MTW. The number of shareholders of record of common stock as of December 31, 2023 was 492.
Removed
Issuer Purchases of Equity Securities As of December 31, 2022, the Company has authorization from the Board of Directors to purchase up to $30.0 million of the Company’s common stock at management’s discretion. The Company's share repurchases program purchases shares in the open market to offset stock-based awards issued in conjunction with the Company's 2013 Omnibus Incentive Plan.
Removed
As of December 31, 2022, the Company has $7.6 million remaining under this authorization.
Removed
The Company's purchases of equity securities in the fourth quarter of fiscal 2022 are summarized as follows: Periods Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value (in millions) of Shares That May Yet Be Purchased Under the Program October 2022 — $ — — $ 8.7 November 2022 112,000 $ 9.88 112,000 $ 7.6 December 2022 — $ — — $ 7.6 Total 112,000 112,000 Shares withheld to satisfy statutory tax withholding requirements related to the vesting of stock-based awards are not issued or considered share repurchases under the Company's share repurchase program and, therefore, are excluded from the table above. 24 Table of Contents Total Return to Shareholders (Includes reinvestment of dividends) Annual Return Percentages Years Ending December 31, 2018 2019 2020 2021 2022 The Manitowoc Company, Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

102 edited+24 added−57 removed51 unchanged
Biggest changeThe reconciliation of net income (loss) to EBITDA, and further to adjusted EBITDA and to adjusted operating income and operating income (loss): Year Ended December 31, 2022 2021 2020 Net income (loss) $ (123.6 ) $ 11.0 $ (19.1 ) Interest expense and amortization of deferred financing fees 33.0 30.4 30.6 Provision for income taxes 3.4 6.1 17.1 Depreciation expense 60.6 45.5 37.2 Amortization of intangible assets 3.1 1.4 0.3 EBITDA (23.5 ) 94.4 66.1 Restructuring (income) expense 1.5 (1.1 ) 7.0 Asset impairment expense (1) 171.9 1.9 — Other non-recurring charges (2) (1.0 ) 21.8 — Other (income) expense - net (3) (5.8 ) (1.0 ) 10.0 Adjusted EBITDA 143.1 116.0 83.1 Depreciation expense (60.6 ) (45.5 ) (37.2 ) Amortization of intangible assets (3.1 ) (1.4 ) (0.3 ) Adjusted operating income 79.4 69.1 45.6 Restructuring income (expense) (1.5 ) 1.1 (7.0 ) Asset impairment expense (171.9 ) (1.9 ) — Other non-recurring charges (2) 1.0 (21.8 ) — Operating income (loss) $ (93.0 ) $ 46.5 $ 38.6 (1) Asset impairment expense in 2022 represents non-cash goodwill and indefinite-lived intangible asset impairment charges.
Biggest changeThe Company defines adjusted EBITDA as EBITDA plus the addback or subtraction of restructuring expense, other income (expense) - net and certain other non-recurring items. 34 Table of Contents The reconciliation of net income (loss) to EBITDA, and further to adjusted EBITDA for the years ended December 31, 2023 and 2022 is summarized as follows: Year Ended December 31, 2023 2022 Net income (loss) $ 39.2 $ (123.6 ) Interest expense and amortization of deferred financing fees 35.2 33.0 Provision for income taxes 5.0 3.4 Depreciation expense 56.6 60.6 Amortization of intangible assets 3.2 3.1 EBITDA 139.2 (23.5 ) Restructuring expense 1.3 1.5 Asset impairment expense (1) — 171.9 Other non-recurring items - net (2) 21.8 (1.0 ) Other (income) expense - net (3) 13.0 (5.8 ) Adjusted EBITDA $ 175.3 $ 143.1 (1) The asset impairment expense in 2022 represents non-cash goodwill and indefinite-lived intangible asset impairment charges.
The Loan Parties’ obligations under the ABL Revolving Credit Facility are secured on a first-priority basis, subject to certain exceptions and permitted liens, by substantially all of the personal property and fee-owned real property of the Loan Parties.
The Loan Parties’ obligations under the ABL Revolving Credit Facility are secured on a first-priority basis, subject to certain exceptions and permitted liens, by substantially all of the personal property and fee-owned real property of the Loan Parties.
Other Income (Expense) – Net Other income (expense) – net for the year ended December 31, 2022 was $5.8 million of income and was primarily composed of $5.5 million of net foreign currency gains and a $0.9 million gain on disposal of property, plant and equipment, partially offset by a $0.5 million charge related to non-capitalizable one-time legal and debt related costs.
Other income (expense) - net for the year ended December 31, 2022 was $5.8 million of income and was primarily composed of $5.5 million of net foreign currency transaction gains and a $0.9 million gain on disposal of property, plant and equipment, partially offset by a $0.5 million charge related to non-capitalizable one-time legal and debt related costs.
Weakening industry or economic trends, disruptions to the Company's business, unexpected significant changes or planned changes in the use of the assets or in entity structure are all factors which may adversely impact the assumptions used in the valuations. Other intangible assets with definite lives continue to be amortized over their estimated useful lives.
Weakening industry or economic trends, disruptions to the Company's business, unexpected significant changes or planned changes in the use of the assets or in entity structure are all factors which may adversely impact the assumptions used in the valuations. Intangible assets with definite lives continue to be amortized over their estimated useful lives.
The Company believes these non-GAAP measures provide important supplemental information to readers regarding business trends that can be used in evaluating its results of operations because these financial measures provide a consistent method of comparing financial performance and are commonly used by investors to assess performance.
The Company believes these non-GAAP measures provide important supplemental information to readers regarding business trends that can be used in evaluating its results because these financial measures provide a consistent method of comparing financial performance and are commonly used by investors to assess performance.
The Company determined a 70% weighting toward the income approach was appropriate as cash flows for each reporting unit are better aligned to the cyclical nature of the crane business and its unique market dynamics.
The Company determined a 70% weighting toward the income approach was appropriate as cash flows for the reporting unit are better aligned to the cyclical nature of the crane business and its unique market dynamics.
Non-GAAP Measures The Company uses EBITDA, adjusted EBITDA, adjusted operating income and free cash flows, which are financial measures that are not prepared in accordance with GAAP, as additional metrics to evaluate the Company’s performance.
Non-GAAP Measures The Company uses EBITDA, adjusted EBITDA, adjusted operating income, Adjusted ROIC and free cash flows, which are financial measures that are not prepared in accordance with GAAP, as additional metrics to evaluate the Company’s performance.
Engineering, selling and administrative expenses were unfavorably impacted by $4.4 million from changes in foreign currency exchange rates. Asset Impairment Expense During the year ended December 31, 2022, the Company recorded non-cash charges in the Americas segment of $171.9 million consisting of a $166.5 million goodwill impairment charge and a $5.4 million indefinite-lived intangible asset impairment charge.
Engineering, selling, and administrative expenses were unfavorably impacted by $2.8 million from changes in foreign currency exchange rates. Asset Impairment Expense During the year ended December 31, 2022, the Company recorded non-cash charges in the Americas segment of $171.9 million consisting of a $166.5 million goodwill impairment charge and a $5.4 million indefinite-lived intangible asset impairment charge.
As of December 31, 2022, the Company was in compliance with all affirmative and negative covenants in its debt instruments, inclusive of the financial covenants pertaining to the ABL Revolving Credit Facility and 2026 Notes. Based upon management’s current plans and outlook, the Company believes it will be able to comply with these covenants during the subsequent twelve months.
As of December 31, 2023, the Company was in compliance with all affirmative and negative covenants in its debt instruments, inclusive of the financial covenants pertaining to the ABL Revolving Credit Facility and 2026 Notes. Based upon management’s current plans and outlook, the Company believes it will be able to comply with these covenants during the subsequent twelve months.
Cash Sources The Company has historically relied primarily on cash flows from operations, borrowings under revolving credit facilities, issuances of notes and other forms of debt financing as its sources of cash. The maximum availability under the Company’s current ABL Revolving Credit Facility is $275.0 million.
Cash Sources The Company has historically relied primarily on cash flows from operations, borrowings under revolving credit facilities, issuances of notes and other forms of debt financing as its sources of cash. The maximum availability under the Company’s current ABL Revolving Credit Facility (as defined below) is $275.0 million.
From time to time, the Company seeks to opportunistically raise capital in the debt capital markets and bank credit markets. Other Financing Arrangements The Company has two non-U.S. accounts receivable financing programs with no maximum availability and one U.S. accounts receivable financing program with maximum availability of $36.0 million.
From time to time, the Company seeks to opportunistically raise capital in the debt capital markets and bank credit markets. Other Financing Arrangements The Company has two non-U.S. accounts receivable financing programs with no maximum availability and one U.S. accounts receivable financing program with maximum availability of $25.0 million.
Commodity Prices The Company is exposed to fluctuating market prices for commodities, including steel, copper, aluminum and petroleum-based products. From time to time the Company may use commodity financial instruments to hedge commodity prices. No commodity financial instruments were entered into or outstanding during 2022 and 2021.
Commodity Prices The Company is exposed to fluctuating market prices for commodities, including steel, copper, aluminum and petroleum-based products. From time to time the Company may use commodity financial instruments to hedge commodity prices. No commodity financial instruments were entered into or outstanding during 2023 and 2022.
For a more detailed discussion of our accounting policies and the financial instruments that we use, refer to Note 2, “Summary of Significant Accounting Policies,” Note 5, “Fair Value of Financial Instruments,” and Note 12, “Debt,” to the Consolidated Financial Statements.
For a more detailed discussion of the Company's accounting policies and the financial instruments that we use, refer to Note 2, “Summary of Significant Accounting Policies,” Note 5, “Fair Value of Financial Instruments,” and Note 12, “Debt,” to the Consolidated Financial Statements.
The Company determined a 30% weighting toward the market approach was appropriate as the valuation is indicative of the fair value of the Company and its reporting units but there is a lack of comparable peer companies.
The Company determined a 30% weighting toward the market approach was appropriate as the valuation is indicative of the fair value of the Company and its reporting unit but there is a lack of comparable peer companies.
The Board of Directors has established the Retirement Plan Committee to manage the operations and administration of all benefit plans and related trusts. Refer to Note 22, “Employee Benefit Plans,” to the Consolidated Financial Statements.
The Board of Directors has established the Retirement Plan Committee to manage the operations and administration of all benefit plans and related trusts. Refer to Note 21, “Employee Benefit Plans,” to the Consolidated Financial Statements.
Control transfers to the customer generally upon delivery to the carrier or acceptance through an independent inspection company that acts as an agent of the customer. From time to time, the Company enters into agreements where the customer has the right to exercise a put option requiring the Company to buyback a crane at an agreed upon price.
Control transfers to the customer generally upon delivery to the carrier or acceptance through an independent inspection company that acts as an agent of the customer. From time to time, the Company enters into agreements where the customer has the right to exercise a put option requiring the Company to buy back a crane at an agreed upon price.
Although the Company has listed a number of accounting policies below which the Company believes to be most critical, the Company also believes that all of the Company’s accounting policies are important to the reader.
Although the Company has listed a number of accounting policies and estimates below which the Company believes to be most critical, the Company also believes that all of the Company’s accounting policies are important to the reader.
The Company is committed to pay 9.000% of annual interest on the $300.0 million 2026 Notes that mature on April 1, 2026. Additionally, the Company's debt outstanding under the ABL Revolving Credit Facility is subject to variable interest based on prevailing rates.
The Company is committed to pay 9.000% of annual interest on the $300.0 million 2026 Notes that mature on April 1, 2026. Additionally, the Company's debt outstanding under the ABL Revolving Credit Facility is subject to variable interest based on 32 Table of Contents prevailing rates.
Refer to Note 14, “Income Taxes,” to the Consolidated Financial Statements for disclosures surrounding uncertain income tax positions under ASC Topic 740 “Income Taxes.” 35 Table of Contents The Company maintains defined benefit pension plans for some of the Company’s employees and retirees.
Refer to Note 14, “Income Taxes,” to the Consolidated Financial Statements for disclosures surrounding uncertain income tax positions under ASC Topic 740 “Income Taxes.” The Company maintains defined benefit pension plans for some of the Company’s employees and retirees.
The approach the Company used to determine the annual assumptions are as follows: • Discount Rate – The Company’s discount rate assumptions are based on the interest rate of noncallable high-quality corporate bonds, with appropriate consideration of pension plan participant demographics and benefit payment terms.
The approach the Company used to determine the annual assumptions are as follows: 38 Table of Contents • Discount Rate – The Company’s discount rate assumptions are based on the interest rate of noncallable high-quality corporate bonds, with appropriate consideration of pension plan participant demographics and benefit payment terms.
The variable interest rate is based upon the average availability as of the most recent determination date. As of December 31, 2022, the Company had borrowings on the ABL Revolving Credit Facility of $80.0 million. At any time, the Company could be party to various interest rate swaps in connection with its fixed or floating rate debt.
The variable interest rate is based upon the average availability as of the most recent determination date. As of December 31, 2023, the Company had borrowings on the ABL Revolving Credit Facility of $60.0 million. At any time, the Company could be party to various interest rate swaps in connection with its fixed or floating rate debt.
A considerable amount of management judgment and assumptions are required in performing the goodwill and indefinite-lived asset impairment tests as it relates to revenue growth rates, projected operating income, the discount rate and relevant market multiples, as applicable.
A considerable amount of management judgment and assumptions are required in performing the goodwill and indefinite-lived asset impairment tests as it relates to revenue growth rates, projected margin, the discount rate and relevant market multiples, as applicable.
No interest rate swaps were entered into or outstanding during 2022 or 2021. A hypothetical 100 basis point increase/decrease in the average interest rate of the Company's annual average borrowings under its ABL Revolving Credit Facility would have resulted in approximately a $1.0 million increase/decrease to interest expense for the year ended December 31, 2022.
No interest rate swaps were entered into or outstanding during 2023 or 2022. A hypothetical 100 basis point increase/decrease in the average interest rate of the Company's annual average borrowings under its ABL Revolving Credit Facility would have resulted in a $0.8 million increase/decrease to interest expense for the year ended December 31, 2023.
The amount of estimated returns is deducted from net sales. • Other Sales The Company’s other sales consist primarily of sales from: • Repair and field service work; • Rental of cranes; and • Training and technical publications. As it relates to the Company’s other sales, the Company’s performance obligations generally relate to performing specific agreed upon services.
The amount of estimated returns is deducted from net sales. • Other Sales The Company’s other sales consist primarily of sales from: • Repair and field service work; • Remanufacturing; and • Rental of cranes. As it relates to the Company’s other sales, the Company’s performance obligations generally relate to performing specific agreed upon services.
The borrowing capacity under the ABL Revolving Credit Facility is based on the value of inventory, accounts receivable and certain fixed assets of the Loan Parties.
The borrowing capacity under the ABL Revolving Credit Facility is based on the value of inventory, accounts receivable and certain fixed assets of the Loan Parties (as defined below).
Refer to Note 12, “Debt,” to the Consolidated Financial Statements for further information regarding the ABL Credit Agreement. As of December 31, 2022, the Company had $80.0 million of borrowings outstanding under the ABL Revolving Credit Facility and $100.0 million of borrowings outstanding as of December 31, 2021.
Refer to Note 12, “Debt,” to the Consolidated Financial Statements for further information regarding the ABL Credit Agreement. As of December 31, 2023 and 2022, the Company had $60.0 million and $80.0 million, respectively, of borrowings outstanding under the ABL Revolving Credit Facility.
To perform its goodwill impairment test, the Company uses a combination of the income approach and market approach with a weighting of 70/30, respectively, to determine the fair value of the Americas – Manufacturing and MEAP reporting units.
To perform its goodwill impairment test, the Company uses a combination of the income approach and market approach with a weighting of 70/30, respectively, to determine the fair value of the MEAP reporting unit.
Supply Chain and Logistics Constraints The Company continues to actively monitor global supply chain and logistics constraints which had a negative impact on the Company's ability to source parts and complete and ship units for the years ended December 31, 2022 and 2021.
Current Events Supply Chain and Logistics Constraints The Company continues to actively monitor global supply chain and logistics constraints which had a negative impact on the Company's ability to source parts, complete and ship units and service cranes for the years ended December 31, 2023 and 2022.
During the year ended December 31, 2022, the highest daily borrowing under the ABL Revolving Credit Facility was $112.5 million and the average borrowing was $90.9 million, while the weighted-average annual interest rate was 3.1%.
During the year ended December 31, 2022, the highest daily borrowing under the ABL Revolving Credit Facility was $112.5 million and the average borrowing was $90.9 million, while the weighted-average annual interest rate was 3.1%. The interest rate of the ABL Revolving Credit Facility fluctuates based on excess availability.
The hedges of anticipated transactions are 37 Table of Contents designated as cash flow hedges as required under ASC Topic 815 “Derivatives and Hedging.” As of December 31, 2022, the Company was party to foreign currency forward contracts with a notional value of $87.7 million all of which are carried on the Company’s balance sheet at fair value.
The hedges of anticipated transactions are designated as cash flow hedges as required under ASC Topic 815 “Derivatives and Hedging.” As of December 31, 2023, the Company was party to foreign currency forward contracts with a notional value of $140.1 million all of which are carried on the Company’s balance sheet at fair value.
Liquidity and Capital Resources Liquidity The Company’s liquidity position as of December 31, 2022 and 2021 is summarized as follows: 2022 2021 Cash and cash equivalents $ 64.4 $ 75.4 Revolver borrowing capacity 275.0 239.3 Other debt availability 43.8 47.2 Less: Borrowings on revolver (80.0 ) (100.0 ) Less: Borrowings on other debt (4.3 ) (4.7 ) Less: Outstanding letters of credit (3.0 ) (3.0 ) Total liquidity $ 295.9 $ 254.2 The Company’s revolving credit facility, or other future facilities, may be used for working capital requirements, capital expenditures, funding future acquisitions (within the Company’s debt limitations), and other operating, investing and financing needs.
Liquidity and Capital Resources Liquidity The Company’s liquidity position as of December 31, 2023 and 2022 is summarized as follows: 2023 2022 Cash and cash equivalents $ 34.4 $ 64.4 Revolver borrowing capacity 275.0 275.0 Other debt availability 45.2 43.8 Less: Borrowings on revolver (60.0 ) (80.0 ) Less: Borrowings on other debt (11.2 ) (4.3 ) Less: Outstanding letters of credit (3.4 ) (3.0 ) Total liquidity $ 280.0 $ 295.9 The Company’s revolving credit facility, or other future facilities, may be used for working capital requirements, capital expenditures, funding future acquisitions (within the Company’s debt limitations), and other operating, investing and financing needs.
(2) Other non-recurring charges for the year ended December 31, 2022 relate to the fair value step up on rental fleet assets sold during the period that was expensed within cost of sales, one-time costs associated with the acquired businesses, income from the partial recovery of the previously written off long-term note receivable from the 2014 divestiture of the Company's Chinese joint venture and other one-time charges.
Other non-recurring items - net for the year ended December 31, 2022 relate to $4.8 million of income from the partial recovery of the previously written off long-term note receivable from the 2014 divestiture of the Company's Chinese joint venture, partially offset by $3.0 million of fair value step up on rental fleet assets sold during the period that was expensed within cost of sales, $0.6 million of other one-time costs associated with the businesses acquired in 2021, and other one-time charges of $0.2 million.
During the year ended December 31, 2022, the spreads for SOFR and Eurodollar, and Alternative Base Rate borrowings were 1.25% and 0.25%, respectively. Excess availability as of December 31, 2022 was $192.0 million, which represents revolver borrowing capacity of $275.0 million less $80.0 million in borrowings outstanding and U.S. letters of credit outstanding of $3.0 million.
During the year ended December 31, 2023, the spreads for SOFR and Alternative Base Rate borrowings were 1.25% and 0.25%, respectively. Excess availability as of December 31, 2023 was $211.6 million, which represents revolver borrowing capacity of $275.0 million less $60.0 million in borrowings outstanding and U.S. letters of credit outstanding of $3.4 million.
Revenue Recognition – The Company records revenue in accordance with ASC Topic 606 – “Revenue from Contracts with Customers.” Below are the Company's revenue recognition policies by performance obligation. • Crane Sales Crane sales are primarily generated through the sale of new and used cranes. Contracts with customers are generally in the form of a purchase order.
Revenue Recognition – The Company records revenue in accordance with ASC Topic 606 – “Revenue from Contracts with Customers.” Below are the Company's revenue recognition policies by performance obligation. 36 Table of Contents • Crane Sales Crane sales are primarily generated through the sale of new and used cranes.
Transactions under the U.S. and non-U.S. programs were accounted for as sales in accordance with Accounting Standards Codification (“ASC”) 860, “Transfers and Servicing.” Under these financing programs, the Company has the ability to sell eligible receivables up to the maximum limit.
Transactions under the non-U.S. and U.S. programs were accounted for as sales in accordance with Accounting Standards Codification (“ASC”) 860, “Transfers and Servicing.” Under these financing programs, the Company has the ability to sell eligible receivables up to the maximum limit. Refer to Note 13, “Accounts Receivable Factoring,” to the Consolidated Financial Statements.
In addition to the ABL Revolving Credit Facility, the Company has access to non-committed overdraft facilities to fund working capital in Europe and China. There are six facilities, of which four are denominated in Euros totaling €28.0 million, one facility denominated in U.S. dollars totaling $9.5 million and one denominated in Chinese Yuan totaling ¥30.0 million.
In addition to the ABL Revolving Credit Facility, the Company has access to non-committed overdraft facilities to fund working capital in Europe and China. There are six facilities, of which five facilities are denominated in Euros totaling €37.0 million and one facility denominated in Chinese Yuan totaling ¥30.0 million.
Based on the nature of the Company’s contracts, the Company does not have any significant financing terms. Contracts may have variable consideration in the form of early pay discounts or rebates. Revenue is earned under these contracts when control of the product is transferred to the customer.
Contracts with customers are generally in the form of a purchase order. Based on the nature of the Company’s contracts, the Company does not have any significant financing terms. Contracts may have variable consideration in the form of early pay discounts or rebates. Revenue is recognized under these contracts when control of the product is transferred to the customer.
Contractual Obligations and Commercial Commitments The Company's material cash requirements, contractual obligations and commercial commitments include the following: Debt As of December 31, 2022, the Company had outstanding debt of $385.6 million with $6.1 million payable within one year.
Contractual Obligations and Commercial Commitments The Company's material cash requirements, contractual obligations and commercial commitments include the following: Debt As of December 31, 2023, the Company had outstanding debt of $372.1 million with $13.4 million payable within one year.
Goodwill, Other Intangible Assets and Other Long-Lived Assets – The Company accounts for goodwill and other intangible assets under the guidance of ASC Topic 350-10, “Intangibles – Goodwill and Other.” Under ASC Topic 350-10, goodwill is not amortized; instead, the Company performs an annual impairment test.
Goodwill, Intangible Assets and Other Long-Lived Assets – The Company accounts for goodwill and intangible assets under the guidance of ASC Topic 350-10, “Intangibles – Goodwill and Other.” Under ASC Topic 350-10, goodwill is not amortized; instead, the Company performs an annual impairment test. The Company has two reporting units with goodwill: Americas – Distribution and MEAP.
As of December 31, 2022, a hypothetical 10% increase or decrease in the exchange rate in the Company’s portfolio of foreign currency contracts would result in a $13.7 million unrealized gain and a $4.1 million unrealized loss, respectively.
As of December 31, 2023, a hypothetical 10% increase or decrease in the exchange rate in the Company’s portfolio of foreign currency contracts would result in a $8.7 million unrealized gain and a $5.9 million unrealized loss, respectively.
Results of operations are translated into U.S. dollars at an average exchange rate for the period. The resulting translation adjustments are recorded in stockholders’ equity as other comprehensive income (loss). The cumulative translation adjustment recorded in accumulated other comprehensive loss as of December 31, 2022 was a loss of $27.9 million.
Results of operations are translated into U.S. dollars at an average exchange rate for the period. The resulting translation adjustments are recorded in stockholders’ equity as other comprehensive income (loss). The cumulative translation adjustment recorded in other comprehensive income (loss) for the year ended December 31, 2023 was income of $20.6 million.
The liens securing the ABL Revolving Credit Facility are senior in priority to the second-priority liens securing the obligations under the 2026 Notes and the related guarantees.
The liens securing the ABL Revolving Credit Facility are senior in priority to the second-priority liens securing the obligations under the senior secured second lien notes due on April 1, 2026 (the "2026 Notes") and the related guarantees.
The reconciliation of net cash provided by (used for) operating activities to f ree cash flows for the year ended December 31, 2022, 2021 and 2020 are summarized as follows: Year Ended December 31, 2022 2021 2020 Net cash provided by (used for) operating activities $ 76.9 $ 76.2 $ (35.1 ) Capital expenditures (61.8 ) (40.4 ) (26.3 ) Free cash flows $ 15.1 $ 35.8 $ (61.4 ) Financial Risk Management The Company is exposed to market risks from changes in interest rates, commodities and foreign currency exchange rates.
The reconciliations of net cash provided by operating activities to f ree cash flows for the year ended December 31, 2023 and 2022 are summarized as follows: Year Ended December 31, 2023 2022 Net cash provided by operating activities $ 63.0 $ 76.9 Capital expenditures (77.4 ) (61.8 ) Free cash flows $ (14.4 ) $ 15.1 Financial Risk Management The Company is exposed to market risks from changes in interest rates, commodities and foreign currency exchange rates.
Interest Rate Risk As previously discussed, the Company's long-term debt primarily consists of $300.0 million on the 2026 Notes and borrowings under its ABL Revolving Credit Facility. Borrowings under the ABL Revolving Credit Facility bear interest at a variable rate using either the Alternative Base Rate or SOFR plus a spread.
Interest Rate Risk The Company's long-term debt primarily consists of $300.0 million on the 2026 Notes and borrowings under its ABL Revolving Credit Facility. Borrowings under the ABL Revolving Credit Facility bear interest at a variable rate using SOFR 35 Table of Contents plus a spread.
Under these “bill and hold” arrangements, sales are recognized when all of the following criteria are met: 1) the reason for the bill-and-hold arrangement is substantive, 2) the product is separately identified as belonging to the customer, 3) the product is ready for transfer to the customer and 4) the Company does not have the ability to use the product or direct it to another customer. 38 Table of Contents • Aftermarket Part Sales Aftermarket part sales are generated through the sale of new and used parts to end customers and distributors.
Under these “bill and hold” arrangements, sales are recognized when all of the following criteria are met: 1) the reason for the bill-and-hold arrangement is substantive, 2) the product is separately identified as belonging to the customer, 3) the product is ready for transfer to the customer and 4) the Company does not have the ability to use the product or direct it to another customer. • Crane Attachment Sales Crane attachment sales are generated through the sale of new or used crane attachments such as luffing jibs, ecomats and counterweights.
Due to the Company’s historic losses, impacts from United States tax reform and full valuation allowances in certain jurisdictions, the effective annual tax rate is not a meaningful measure of the Company’s cash tax position or performance of the business. The 2022 effective tax rate was favorably impacted by the net release of unrecognized tax positions of $11.5 million.
Due to the Company’s historic losses, impacts from United States tax reform and full valuation allowances in certain jurisdictions, the effective annual tax rate is not a meaningful measure of the Company’s cash tax position or performance of the business.
The Company has developed the assumptions with the assistance of its independent actuaries and other relevant sources, and believes the assumptions used are reasonable; however, changes in these assumptions could impact the Company’s financial position, results of operations or cash flows.
As required by GAAP, the effects of the modifications are recorded currently or amortized over future periods. The Company has developed the assumptions with the assistance of its independent actuaries and other relevant sources, and believes the assumptions used are reasonable; however, changes in these assumptions could impact the Company’s financial position, results of operations or cash flows.
Management uses orders and backlog for capacity and resource planning purposes. We believe this information is useful to investors to provide an indication of our future revenues. 29 Table of Contents Orders for the year ended December 31, 2022 decreased 3.3% to $2,095.5 million from $2,166.6 million for the same period in 2021.
Management uses orders and backlog for capacity and resource planning. The Company believes this information is useful to investors to provide an indication of future revenues. Orders for the year ended December 31, 2023 decreased 0.6% to $2,082.3 million from $2,095.5 million for the same period in 2022.
Total U.S. dollar availability as of December 31, 2022 for the six overdraft facilities is $43.8 million, with $4.3 million outstanding. 33 Table of Contents Debt On March 25, 2019, the Company and certain subsidiaries of the Company (the “Loan Parties”) entered into a credit agreement (the “ABL Credit Agreement”) with JP Morgan Chase Bank, N.A as administrative and collateral agent, and certain financial institutions party thereto as lenders, providing for a senior secured asset-based revolving credit facility (the “ABL Revolving Credit Facility”) of up to $275.0 million.
Debt On March 25, 2019, the Company and certain subsidiaries of the Company (the “Loan Parties”) entered into a credit agreement (the “ABL Credit Agreement”) with JP Morgan Chase Bank, N.A. as administrative and collateral agent, and certain financial institutions party thereto as lenders, providing for a senior secured asset-based revolving credit facility (the “ABL Revolving Credit Facility”) of up to $275.0 million.
Gross profit was favorably impacted by $7.1 million from changes in foreign currency exchange rates. Gross profit percentage in 2021 was 17.9% compared to 17.6% in 2020. Engineering, Selling and Administrative Expenses Engineering, selling and administrative expenses for the year ended December 31, 2022 increased $22.5 million to $281.0 million.
Gross profit was favorably impacted by $1.8 million from changes in foreign currency exchange rates. Engineering, Selling and Administrative Expenses Engineering, selling and administrative expenses for the year ended December 31, 2023 increased 16.8% to $328.3 million compared to $281.0 million for the year ended December 31, 2022.
Second, the Company determines the amount of additional reserve required to cover incurred, but not reported, product liability issues and to account for possible adverse development of the established case reserves (collectively referred to as “IBNR”). The Company has established a position within the actuarially determined range, which it believes is the best estimate of the IBNR liability.
Second, the Company determines the amount of additional reserve required to cover incurred, but not reported, product liability issues and to account for possible adverse development of the established case reserves (collectively referred to as “IBNR”).
As of October 31, 2022, the Company performed its annual indefinite-lived intangible assets impairment test of the Potain Tradename and Grove Tradename. Based on the results of the test, the carrying value of the Grove Tradename exceeded its fair value.
As of October 31, 2023, the Company performed its annual indefinite-lived intangible assets impairment test of the Potain Tradename and Grove Tradename.
Income Taxes – The Company accounts for income taxes under the guidance of ASC Topic 740-10, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.
The Company has established a position within the actuarially determined range, which it believes is the best estimate of the IBNR liability. 39 Table of Contents Income Taxes – The Company accounts for income taxes under the guidance of ASC Topic 740-10, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.
The fair value of the Americas – Distribution and MEAP reporting units were substantially in excess of their carrying values as of the date of the annual impairment test and, therefore, were not at risk of impairment as of December 31, 2022.
As of October 31, 2023, the Company performed its annual goodwill impairment test. Based on the results of the test, the fair value of the Americas – Distribution and MEAP reporting units were substantially in excess of their carrying values as of the date of the annual impairment test and, therefore, were not impaired as of December 31, 2023.
Further information regarding the Company’s reportable segments can be found in Note 18, “Segments,” to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. All dollar amounts are in millions throughout the tables included in Management’s Discussion and Analysis of Financial Conditions and Results of Operations unless otherwise indicated.
Further information regarding the Company’s reportable segments can be found in Note 18, “Segments,” to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Financial Condition Cash Flows The table below shows a summary of cash flows for the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 Net cash provided by (used for) operating activities $ 76.9 $ 76.2 $ (35.1 ) Net cash used for investing activities $ (58.0 ) $ (226.3 ) $ (25.8 ) Net cash provided by (used for) financing activities $ (29.9 ) $ 100.9 $ (14.8 ) Cash and cash equivalents $ 64.4 $ 75.4 $ 128.7 Cash Flows from Operating Activities Net cash provided by operating activities of $76.9 million in 2022 increased $0.7 million from net cash provided by operating activities of $76.2 million in 2021 .
Financial Condition Cash Flows The table below shows a summary of cash flows for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Net cash provided by operating activities $ 63.0 $ 76.9 Net cash used for investing activities (71.8 ) (58.0 ) Net cash used for financing activities (21.4 ) (29.9 ) Cash and cash equivalents 34.4 64.4 Cash Flows from Operating Activities Net cash provided by operating activities of $63.0 million in 2023 decreased $13.9 million from $76.9 million in 2022 .
Purchase obligations consist primarily of open purchase orders for raw materials and various components used in the manufacturing process and purchase obligations from agreements with various suppliers that include a right of cancellation. Leases As of December 31, 2022, the Company had contractual fixed costs related to operating lease commitments of $64.6 million with $13.5 million due within one year.
Purchase Obligations As of December 31, 2023, the Company has purchase obligations of $1,151.6 million with $674.4 million due within one year. Purchase obligations consist primarily of open purchase orders for raw materials and various components used in the manufacturing process and purchase obligations from agreements with various suppliers that include a right of cancellation.
Refer to Note 23, “Leases,” to the Consolidated Financial Statements for further information. Capital Expenditures The Company funds capital expenditures that are intended to improve the cost structure of the Company’s business; invest in new processes, products and technology; maintain high-quality production standards; and maintain and expand the Company's rental fleet.
Capital Expenditures The Company funds capital expenditures that are intended to improve the cost structure of the Company’s business; invest in new processes, products and technology; maintain high-quality production standards; and maintain and expand the Company's rental fleet. The Company paid a total of $77.4 million during 2023 for capital expenditures.
This amount is not reduced for amounts the Company would recover from the repossession and subsequent resale of collateral. Refer to Note 20, “Guarantees,” to the Consolidated Financial Statements for further information.
Off-Balance Sheet Arrangements As of December 31, 2023, the Company had buyback commitments with a balance outstanding of $43.4 million. This amount is not reduced for amounts the Company would recover from the repossession and subsequent resale of collateral. Refer to Note 20, “Guarantees,” to the Consolidated Financial Statements for further information.
In 2022, cash contributions by the Company to defined benefit pension plans were $3.9 million, and the Company estimates that its contributions in 2023 will be approximately $3.7 million. Cash contributions to the Company’s 401(k) plan were $7.2 million in 2022. Cash contributions to the 401(k) plan earned in 2022 and committed to be paid in 2023 is $6.6 million.
In 2023, cash contributions by the Company to defined benefit pension, postretirement medical and other benefit plans were $5.1 million, and the Company estimates that its contributions in 2024 will be approximately $9.8 million. Cash contributions to the Company’s 401(k) plan were $12.2 million in 2023.
Results of Operations for the Years Ended December 31, 2022, 2021 and 2020: 2022 2021 2020 2022 to 2021 % Change 2021 to 2020 % Change Orders $ 2,095.5 $ 2,166.6 $ 1,511.4 (3.3 )% 43.4 % Backlog 1,056.0 1,010.9 543.2 4.5 % 86.1 % Net sales 2,032.5 1,720.2 1,443.4 18.2 % 19.2 % Gross profit 364.5 307.2 254.7 18.7 % 20.6 % Gross profit % 17.9 % 17.9 % 17.6 % Engineering, selling and administrative expenses 281.0 258.5 208.8 8.7 % 23.8 % Asset impairment expense 171.9 1.9 — * * Restructuring (income) expense 1.5 (1.1 ) 7.0 * (115.7 )% Interest expense 31.6 28.9 29.1 9.3 % (0.7 )% Other income (expense) - net 5.8 1.0 (10.0 ) * 110.0 % Provision for income taxes 3.4 6.1 17.1 44.3 % 64.3 % *Measure not meaningful Orders and Backlog Backlog represents the dollar value of orders which are expected to be recognized in net sales in the future.
Results of Operations for the Years Ended December 31, 2023 and 2022 2023 2022 2023 to 2022 % Change Orders $ 2,082.3 $ 2,095.5 (0.6 )% Backlog 917.2 1,056.0 (13.1 )% Net sales 2,227.8 2,032.5 9.6 % Gross profit 425.2 364.5 16.7 % Gross profit % 19.1 % 17.9 % Engineering, selling and administrative expenses 328.3 281.0 16.8 % Asset impairment expense — 171.9 * Interest expense 33.9 31.6 7.3 % Other income (expense) - net (13.0 ) 5.8 * Provision for income taxes 5.0 3.4 47.1 % *Measure not meaningful 27 Table of Contents Orders and Backlog Backlog represents the dollar value of orders which are expected to be recognized in net sales in the future.
Orders are included in backlog when an executed binding contract has been received but has not been recognized in net sales. Orders and backlog are not measures defined by accounting principles generally accepted in the United States of America (“GAAP”) and our methodology for determining orders and backlog may vary from the methodology used by other companies.
Orders are included in backlog when an executed binding contract with a price that is fixed or has a floor has been received but has not been recognized in net sales. Orders and backlog are not measures defined by GAAP and the Company's methodology for determining orders and backlog may vary from the methodology used by other companies.
The rate was unfavorably impacted primarily by the goodwill impairment charge for which there was no related tax asset, additional valuation allowances recorded during the year and the jurisdictional mix of the financial results.
Federal tax planning strategies implemented as a result of the Coronavirus Aid, Relief and Economic Security Act. The rate was unfavorably impacted primarily by the goodwill and indefinite-lived intangible asset impairment charges for which there was no related tax asset, additional valuation allowances recorded during the year and the jurisdictional mix of the financial results.
The fair value of the Potain Tradename was substantially in excess of its carrying value as of the date of the annual impairment test and, therefore, was not at risk of impairment as of December 31, 2022.
Based on the results of the test, the fair value of the Grove Tradename and Potain Tradename were substantially in excess of their carrying value as of the date of the annual impairment test and, therefore, were not impaired as of December 31, 2023.
For the year ended December 31, 2022, the Company incurred $2.8 million of interest on borrowings from the ABL Revolving Credit Facility. Refer to Note 12, “Debt,” to the Consolidated Financial Statements for further information. Purchase Obligations As of December 31, 2022, the Company has purchase obligations of $1,017.9 million with $667.6 million due within one year.
For the year ended December 31, 2023, the Company incurred $5.4 million and $1.6 million of interest on borrowings from the ABL Revolving Credit Facility and other debts, respectively. Refer to Note 12, “Debt,” to the Consolidated Financial Statements for further information.
Gross Profit Gross profit for the year ended December 31, 2022 increased 18.7% to $364.5 million compared to $307.2 million for the year ended December 31, 2021. The increase was primarily attributable to higher net sales and pricing actions.
Gross Profit Gross profit for the year ended December 31, 2023 increased 16.7% to $425.2 million compared to $364.5 million for the year ended December 31, 2022. The increase was primarily attributable to the higher net sales, partially offset by higher material and transportation costs and unfavorable product mix.
The Company has three reportable segments, the Americas segment, the Europe and Africa (“EURAF”) segment and the Middle East and Asia Pacific (“MEAP”) segment.
Refer to Note 14, “Income Taxes,” to the Consolidated Financial Statements. Segment Operating Performance The Company has three reportable segments, the Americas segment, the Europe and Africa (“EURAF”) segment and the Middle East and Asia Pacific (“MEAP”) segment.
During the year ended December 31, 2021, the highest daily borrowing under the ABL Revolving Credit Facility was $100.0 million and the average borrowing was $26.0 million, while the weighted-average annual interest rate was 1.4%. The interest rate of the ABL Revolving Credit Facility fluctuates based on excess availability.
During the year ended December 31, 2023, the highest daily borrowing under the ABL Revolving Credit Facility was $119.6 million and the average borrowing was $103.4 million, while the weighted-average annual interest rate was 5.2%.
Cash Flows from Investing Activities Net cash used for investing activities of $58.0 million in 2022 decreased $168.3 million from net cash used for investing activities of $226.3 million in 2021.
Cash Flows from Investing Activities Net cash used for investing activities of $71.8 million in 2023 increased $13.8 million from $58.0 million in 2022.
The Company has three reporting units with goodwill: Americas – Manufacturing, Americas – Distribution and MEAP. The date for the annual impairment test is October 31, 2022, or more frequently if events or changes in circumstances indicate that the assets might be impaired.
The date for the annual impairment test is October 31, or more frequently if events or changes in 37 Table of Contents circumstances indicate that the assets might be impaired.
The decrease in net cash used for investing activities was primarily due to $186.2 million of cash paid for the acquisitions in 2021 and a $2.3 million cash receipt related to the finalization of the purchase price for the acquisition of the crane business of H&E in 2022.
The increase in net cash used for investing activities was primarily due to higher capital expenditures of $15.6 million and $2.3 million of cash receipts in the prior year related to the finalization of the purchase price for the acquisition of the crane business of H&E Equipment Services, Inc.
Measurements of net periodic benefit cost are based on the assumptions used for the previous year-end measurements of assets and obligations. The Company reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions when appropriate. As required by GAAP, the effects of the modifications are recorded currently or amortized over future periods.
Presently, there is no reliable means to estimate the amount of any such potential changes. Measurements of net periodic benefit cost are based on the assumptions used for the previous year-end measurements of assets and obligations. The Company reviews its actuarial assumptions on an annual basis and makes modifications to the assumptions when appropriate.
Other Cash Requirements The Company has unrecognized tax benefits totaling $9.1 million as of December 31, 2022, excluding related interest and penalties. During the next twelve months, the unrecognized tax benefits are not expected to significantly increase or decrease due to audit settlements or lapsing statuses of limitations.
During the next twelve months, the unrecognized tax benefits are not expected to significantly increase or decrease due to audit settlements or lapsing statuses of limitations.
Environmental Protection Agency, $3.6 million of higher prior year expense due to a write-off of a long-term note receivable from the 2014 divestiture of the Company's Chinese joint venture and $4.8 million of benefit in the current year from the partial 30 Table of Contents recovery of the previously written-off long-term note receivable.
The increase was primarily attributable to a $21.2 million charge related to a legal matter with the U.S. Environmental Protection Agency (“EPA”), higher employee-related costs and $4.8 million of benefit recorded in the prior year from the partial recovery of the previously written-off long-term note receivable from the 2014 divestiture of the Company’s Chinese joint venture.
Costs are included in engineering, selling and administrative expenses or cost of sales in the Consolidated Statement of Operations. (3) Other income - net includes net foreign currency (gains) losses, other components of net periodic pension costs, costs associated with legal matters and other items in the years ended December 31, 2022 and 2021.
(3) Other (income) expense - net includes net foreign currency gains (losses), other components of net periodic pension costs and other items in the years ended December 31, 2023 and 2022.
The estimated reserve is based upon specific identification of excess or obsolete inventories based on historical usage, estimated future usage, sales requiring the inventory and historical write-off experience and are subject to change if experience improves or deteriorates.
Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs. Inventories are reduced by a reserve for excess and obsolete inventories. The estimated reserve is based upon specific identification of excess or obsolete inventories based on historical usage, estimated future usage, sales requiring the inventory and historical write-off experience.
Net sales were unfavorably impacted by $106.5 million from changes in foreign currency exchange rates. Consolidated net sales for the year ended December 31, 2021 increased 19.2% to $1,720.2 million from $1,443.4 million for the same period in 2020.
Backlog was favorably impacted by $9.4 million from changes in foreign currency exchange rates. Net Sales Consolidated net sales for the year ended December 31, 2023 increased 9.6% to $2,227.8 million from $2,032.5 million for the year ended December 31, 2022.
The ABL Revolving Credit Facility includes a $75.0 million letter of credit sub-facility, $10.0 million of which is available to the Company’s German subsidiary that is a borrower under the ABL Revolving Credit Facility.
The ABL Revolving Credit Facility includes a $75.0 million letter of credit sub-facility, $10.0 million of which is available to the Company’s German subsidiary that is a borrower under the ABL Revolving Credit Facility. 31 Table of Contents On June 17, 2021, the Company amended the ABL Credit Agreement to adjust certain negative covenants which reduced restrictions on the Company's ability to expand its rental business.
This was partially offset by higher net sales. Operating income was favorably impacted by $2.4 million from changes in foreign currency exchange rates. MEAP MEAP net sales decreased 9.7% in 2022 to $258.0 million from $285.6 million in 2021. The decrease was primarily due to lower new machine sales, partially offset by pricing actions.
EURAF EURAF segment net sales decreased 12.1% in 2023 to $669.6 million from $761.5 million in 2022. The decrease was primarily attributable to lower new machine sales, partially offset by pricing actions and higher non-new machine sales. EURAF net sales were favorably impacted by $15.1 million from changes in foreign currency exchange rates.
This was partially offset by lower orders due to softening demand in the EURAF segment. Backlog was unfavorably impacted by $24.5 million from changes in foreign currency exchange rates.
The decrease in orders was primarily attributable to softening demand in the EURAF and Americas segments. This was partially offset by an increase in demand in the MEAP segment. Orders were favorably impacted by $18.3 million from changes in foreign currency exchange rates.

… 103 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 7A. QUANTITATIVE AND QUALITA TIVE DISCLOSURES ABOUT MARKET RISK Refer to Liquidity and Capital Resources, and Financial Risk Management in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a description of the quantitative and qualitative disclosure about market risk. 41 Table of Contents
Biggest changeItem 7A. QUANTITATIVE AND QUALITA TIVE DISCLOSURES ABOUT MARKET RISK Refer to Liquidity and Capital Resources, and Financial Risk Management in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a description of the quantitative and qualitative disclosure about market risk. 40 Table of Contents

Other MTW 10-K year-over-year comparisons