Please provide the IEPA tariff bridge from the $26 million received to the $12 million year-over-year benefit.

Brian Regan explained that of the $26 million received, $12 million was recognized in operating income in Q2. An additional $4 million is expected in Q3. The remaining $10 million accounts for refunds to customers, corrections of previously recognized tariff costs, and approximately $1 million in interest income. “So as we mentioned in our prepared remarks, we received 26 million of refunds and we recognized $12 million in operating income during the quarter. As I mentioned, we have another $4 million coming in Q3. And then when reconciling to the other $10 million, we have some amounts that we're going to refund to customers. We have some corrections of previously recognized tariff costs. And then we also recognize about a million dollars in interest income during the quarter.”

Now that net leverage is below three times, how do you view your capital allocation strategy?

Management is pleased with the balance sheet improvement, having achieved their target. They are now opportunistically looking for share repurchases and acquisitions. “We feel much better about our balance sheet. I mean, this is where we've really been focused in terms of the business and managing our cash and our capex to get to this point. So happy to be below three times and any time more below three times, you know, we're opportunistically looking for share repurchases as well as we're looking for acquisitions.”

MTW

Manitowoc (MTW) Q2 FY26 earnings call: guidance and Q&A

Q: How should we think about the cadence of revenue and EBITDA through the second half of the year, and what incremental margins can be expected, potentially into 2027?

Management expects normal seasonality, with Q3 typically being slower due to European holidays. However, Q3 will benefit from an additional $4 million in incremental tariff benefits. No specific incremental margin figures were provided. “Yes, as I'm sure you know, we have our normal seasonality with Q3 being because of the European holiday. With that said, we do expect about $4 million of incremental tariff benefit in Q3, because some of it's hung up on the balance sheet. But, you know, the normal seasonality outside of that $4 million is what you can expect.”

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 7, 2026

Source: earnings call transcript

Executive summary

Manitowoc Q2 FY26 — Strong Orders, Backlog Growth, and Increased Guidance

Manitowoc delivered a robust second quarter, driven by strong order intake and improved operational execution, leading to increased full-year guidance. The company is actively integrating AI into its operations and expanding its aftermarket business, while navigating geopolitical challenges and high crane utilization. Management is focused on capital allocation for share repurchases and opportunistic acquisitions, having achieved its net leverage target.

Highlights

Sales increased 10% year-over-year to $595 million in Q2 FY26.
Adjusted EBITDA nearly doubled year-over-year to $49 million, expanding margin by 330 basis points to over 8%.
Orders were strong at $709 million, a 56% increase year-over-year, leading to a 1.2 book-to-bill ratio.
Backlog grew to $1.05 billion, up $321 million year-over-year, with $750 million expected to ship this year.
Net leverage ratio improved to 2.6 times, below the target of 3 times.

Concerns

The conflict in Iran is creating inflationary pressures across the region, with potential for prolonged instability to affect economic activity.
The Encore rebuild business has been slow due to high crane utilization, indicating customers are unwilling to release machines for refurbishment.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year Net Sales	$2.3 billion to $2.4 billion high materiality	FY26	High
Full-year Adjusted EBITDA	$150 million to $170 million high materiality	FY26	High
Full-year Adjusted Diluted EPS	$0.80 to $1.20 high materiality	FY26	High
Full-year Free Cash Flow	$50 million to $70 million high materiality	FY26	High
Q3 Incremental Tariff Benefit	$4 million medium materiality	Q3 · FY26	High
Full-year Net Tariff Impact to Adjusted EBITDA	$16 million medium materiality	FY26	High

Orderbook & backlog

Total Orders $709 million Q2 FY26

increase of 56% from a year ago

Total Backlog $1.05 billion Q2 FY26 end

up $110 million from last quarter, and up $321 million from a year ago

Approximately $750 million expected to ship this year

Book-to-bill ratio 1.2 Q2 FY26

Product announcements

Product	Type	Timeline
8-axle all-terrain crane	launch	—
Standardized rigging kits and ancillary products	expansion	—
Poton eTech (AI agent)	launch	early stages

Deals & partnerships

Mining customers Three-year service contract for greenfield operation $2.5 million 3 years

Awarded in Peru at one of the world's largest copper-zinc mines, stemming from the Cranes Plus 50 strategy.

Risks & headwinds

Geopolitical instability (Iran conflict) ongoing

Creating inflationary pressures across the region; potential to affect economic activity and customer investment decisions.

Mitigation:Folks have found alternative shipping routes; management remains cautiously optimistic due to strong customer engagement and pent-up demand.

Seasonality in orders Q3 FY26

July and August are typically slower months due to European holiday period.

Mitigation:Backlog is over $1 billion, and customer sentiment remains strong; July orders were still over $200 million.

What to watch in Q3 FY26

H2 Revenue and EBITDA Cadence

next quarter

Current Q3 expected to be seasonally slower, but with $4M incremental tariff benefit.

Target Confirmation of expected seasonality and tariff benefit impact on Q3/Q4 results.

Why it matters

Understanding the seasonal impact and the contribution of tariff benefits is crucial for assessing the company's ability to meet full-year guidance.

Yes, as I'm sure you know, we have our normal seasonality with Q3 being because of the European holiday. With that said, we do expect about $4 million of incremental tariff benefit in Q3, because some of it's hung up on the balance sheet. But, you know, the normal seasonality outside of that $4 million is what you can expect.

Find out whether MTW delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you disaggregate the 56% year-over-year order growth by region (US, Canada, LATAM, Europe) and specify how much was due to dealer stocking versus specific projects?

Management stated they do not typically share specific regional percentages but confirmed strong demand in the US, with dealers replenishing lean inventories. Demand was generally strong across all regions.

“I mean, I don't think we share much more color than what we put into the script in terms of actual percentages, but I think we pretty well outlined, you know, there's good strength in the US, definitely dealers were replenishing, although dealer inventory is still on the low side, we feel like. But yes, demand has been pretty strong everywhere.”

asked by Andrew Ozzy (Wells Fargo) · answered by Brian Regan

2 min read 5 chapters

Detailed narrative

Strong Q2 Performance and Market Conditions

Manitowoc delivered strong second-quarter results with sales up 10% and adjusted EBITDA increasing over 85% year-over-year. The global crane market remains robust, evidenced by orders exceeding $700 million in Q2 and a book-to-bill ratio of 1.2. Crane utilization is very high, and dealer inventories are lean, indicating healthy underlying market conditions, particularly in the Americas.

AI Integration and Manitowoc Way

The company is meaningfully integrating artificial intelligence into its operations, with over 450 users and plans to accelerate deployment through training tools and global user groups. AI is being applied to the 'Lessons Learned' program and daily 'Manitowoc Way' activities, with larger projects using AI agents scoped for engineering and aftermarket services. An AI agent, Poton eTech, is already supporting tower crane field service technicians.

Cranes Plus 50 Strategy and Aftermarket Expansion

Manitowoc's 'Cranes Plus 50' strategy, focused on non-new machine sales, achieved another record, growing 7% year-over-year to $172 million in Q2 and reaching $706 million on a trailing 12-month basis. Initiatives include expanding service locations, growing aftermarket sales/techs, increasing lifting accessory sales, and leveraging technology.

A three-year, $2.5 million service contract was awarded in Peru, and new facilities like a rapid response shop and a boom refurbishing center of excellence were opened in Shady Grove.

Regional Market Dynamics

North America shows positive customer sentiment with solid end-market activity and high fleet utilization. Europe presents a mixed environment, with strong mobile crane order growth offsetting a modest decline in self-erecting tower crane orders due to a transition to new EN standards.

The Middle East remains solid despite regional instability, with alternative shipping routes mitigating Strait of Hormuz disruptions. Asia, particularly South Korea (semiconductor industry), Vietnam, and Australia, continues to exhibit robust demand into 2027.

Tariff Impact and Financial Strength

The company benefited from IEPA tariff refunds, receiving $26 million in cash during the quarter, with a net year-over-year operating income benefit of $9 million. This contributed to the strong financial performance and the increase in full-year adjusted EBITDA guidance.

Manitowoc also successfully reduced its net leverage ratio to 2.6 times, below its target of 3 times, enabling opportunistic capital allocation for share repurchases and acquisitions.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.