MANITOWOC: Management’s Discussion and Analysis of Financial Position and Results of Operations (Form 10-Q)

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The following Management's Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the Company's Annual
Report on Form 10-K for the year ended December 31, 2020, including the
financial statements, accompanying notes and Management's Discussion and
Analysis of Financial Condition and Results of Operations therein, and the
interim condensed consolidated financial statements and accompanying notes
included in this Quarterly Report on Form 10-Q.

Cautions Regarding Forward-Looking Information

All of the statements in this Quarterly Report on Form 10-Q, other than
historical facts, are forward-looking statements, including, without limitation,
the statements made in the "Management's Discussion and Analysis of Financial
Condition and Results of Operations." As a general matter, forward-looking
statements are those focused upon anticipated events or trends, expectations and
beliefs relating to matters that are not historical in nature. The words
"could," "should," "may," "feel," "anticipate," "aim," "preliminary," "expect,"
"believe," "estimate," "intend," "intent," "plan," "will," "foresee," "project,"
"forecast," or the negative thereof or variations thereon, and similar
expressions identify forward-looking statements.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for these forward-looking statements. In order to comply with the terms of the
safe harbor, the Company notes that forward-looking statements are subject to
known and unknown risks, uncertainties and other factors relating to the
Company's operations and business environment, all of which are difficult to
predict and many of which are beyond the control of the Company. These known and
unknown risks, uncertainties and other factors could cause actual results to
differ materially from those matters expressed in, anticipated by or implied by
such forward-looking statements. These risks, uncertainties, and other factors
include, but are not limited to:

• The negative impacts that COVID-19 has had and will continue to have on

Manitowoc Business, Financial Condition, Cash Flow, Results of Operations

and the supply chain, as well as customer demand. (including uncertain future

      impacts);


  • actions of competitors;

• changes in economic or industrial conditions in general or in the markets

served by Manitowoc;

• unforeseen changes in customer demand, including changes in global demand

for large capacity lifting equipment, changing demand for lifting equipment

in emerging economies, and changing demand for used lifting equipment;

  • changes in raw material and commodity prices;


  • geographic factors and political and economic conditions and risks;

• the ability to complete and appropriately integrate acquisitions, divestitures, strategic alliances, joint ventures or other material transactions;

• the ability to capitalize on key strategic opportunities and the ability to

      implement Manitowoc's long-term initiatives;


   •  government approval and funding of projects and the effect of
      government-related issues or developments;


  • unanticipated changes in the capital and financial markets;


  • unanticipated changes in revenues, margins and costs;

• the ability to increase the operational efficiency of Manitowoc and

      capitalize on those efficiencies;


   •  risks associated with data security and technological systems and
      protections;


  • the ability to significantly improve profitability;


  • the ability to focus on customers, new technologies, and innovation;

• uncertainties associated with new product launches, success

development and market acceptance of new and innovative products that

      growth;


   •  issues relating to the ability to timely and effectively execute on

manufacturing strategies, including issues related to plant closures, new

      plant start-ups, and/or consolidations of existing facilities and
      operations, and the ability to achieve the expected benefits from such
      actions, as well as general efficiencies and capacity utilization of the
      Company's facilities;

• achievement of anticipated benefit improvements, cost savings,

options and other synergies, and the timetable for achieving these

savings, synergies and options;


   •  the ability to generate cash and manage working capital consistent with
      Manitowoc's stated goals;


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   •  the ability to convert orders and order activity into sales and the timing

of these sales;

• the ability to direct resources to areas that will provide the best

      returns;


   •  unexpected issues associated with the availability and viability of
      suppliers;


  • the Company's ability to attract and retain qualified personnel;


  • the replacement cycle of technologically obsolete products;

• natural disasters, other meteorological events, epidemics, pandemics and others

      public health crises disrupting commerce in one or more regions of the
      world;


  • the ability of Manitowoc's customers to receive financing;


• the ability to focus and capitalize on product quality and reliability;

  • risks associated with manufacturing or design defects;

• unexpected problems related to the quality of materials, components and

products from third parties and the ability to successfully resolve

      those issues;


  • changes in laws throughout the world;

• non-compliance with regulatory requirements relating to products

      Company sells;


   •  the inability to defend against potential infringement claims on
      intellectual property rights;


  • impairment of goodwill and/or intangible assets;


  • foreign currency fluctuation and its impact on reported results;

• delays or potential failures in the implementation of specific initiatives within the

corporate restructuring programs;

• problems related to staff reductions and possible subsequent rehiring;

• the ability to sell products through distributors and other third parties;

• work stoppages, collective bargaining, labor rates and temporary labor costs;

  • risks associated with high debt leverage;


  • unanticipated issues affecting the effective tax rate for the year;

• other risk factors detailed in Manitowoc’s 2020 annual report on Form 10-K,

as such may be amended or supplemented in documents subsequently filed by Manitowoc

Quarterly reports on 10-Q (including this report) and its other filings

with the United States Securities Commission.


These statements reflect the current views and assumptions of management with
respect to future events. Except to the extent required by the federal
securities laws, the Company does not undertake, and hereby disclaims, any duty
to update these forward-looking statements, even though its situation and
circumstances may change in the future. Readers are cautioned not to place undue
reliance on forward-looking statements, which speak only as of the date of this
report. The inclusion of any statement in this report does not constitute an
admission by the Company or any other person that the events or circumstances
described in such statement are material.


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COVID-19 Pandemic



The Company's orders and backlog continued to improve in the second quarter of
2021 in all three segments as the global economy recovers from the COVID-19
pandemic. The future extent of the impact from the COVID-19 pandemic on the
Company's financial results is dependent on a number of factors, including the
length of the pandemic, associated additional government actions and the related
effect on the global economy and markets in which the Company serves, all of
which are uncertain and cannot be predicted.



Cybersecurity Incident



In June 2021, the Company experienced a systems outage that was caused by a
cybersecurity incident. The Company engaged an industry-leading third-party
information technology firm, forensics specialist and legal counsel to assist
with the ongoing investigation into the incident and has since restored systems
and operations. Due to the cybersecurity incident, the Company experienced
delays and disruptions to its business during the quarter ended June 30, 2021.
The Company has insurance for these types of matters with a self-insured
retention of $100,000 per occurrence. The Company is currently working with its
insurance carrier to determine which costs, if any, will be covered by its
insurance policy.



Segment operational performance



The Company manages its business primarily on a geographic basis. The Company's
reportable operating segments consist of the Americas, EURAF, and MEAP. Further
information regarding the Company's reportable segments can be found in Note 17,
"Segments," to the Condensed Consolidated Financial Statements included in this
Quarterly Report on Form 10-Q.



                     Three Months Ended                                               Six Months Ended
                          June 30,                                                        June 30,
                                                  Dollar       Percentage                                        Dollar       Percentage
                    2021             2020         Change         Change             2021            2020         Change         Change
Net Sales
Americas         $     185.3      $    149.6     $   35.7              23.9 %    $     325.4     $    305.8     $   19.6               6.4 %
EURAF                  180.8           135.5         45.3              33.4 %          335.3          258.4         76.9              29.8 %
MEAP                    97.5            43.2         54.3             125.7 %          157.2           93.3         63.9              68.5 %

Segment
Operating
Income (Loss)
Americas         $      21.9      $      4.8     $   17.1             356.3 %    $      28.9     $     13.9     $   15.0             107.9 %
EURAF                    5.7            (4.4 )       10.1            (229.5 )%          12.0           (4.8 )       16.8            (350.0 )%
MEAP                     9.8             6.6          3.2              48.5 %           16.6           12.9          3.7              28.7 %





Americas



Americas net sales increased 23.9% for the three months ended June 30, 2021 to
$185.3 million from $149.6 million for the three months ended June 30, 2020. The
increase was primarily due to higher shipments of cranes for the energy and
commercial construction end markets as compared to the three months ended June
30, 2020, which was impacted by the COVID-19 pandemic. This was partially offset
by unfavorable impacts from the cybersecurity incident.



Americas operating income increased $17.1 million for the three months ended
June 30, 2021 to $21.9 million from $4.8 million for the three months ended
June 30, 2020. The increase was primarily due to increased volume and a
favorable mix, partially offset by unfavorable impacts from the cybersecurity
incident and higher short-term incentive compensation costs.



Americas net sales increased 6.4% for the six months ended June 30, 2021 To
$ 325.4 million of $ 305.8 million for the six months ended June 30, 2020. The increase is mainly due to the product mix. This was partially offset by the adverse impacts of the cybersecurity incident.



Americas operating income increased $15.0 million for the six months ended
June 30, 2021 to $28.9 million from $13.9 million for the six months ended
June 30, 2020. The increase was primarily due to higher net sales, a favorable
mix, lower expenses as 2020 included costs related to the triennial ConExpo
tradeshow last held in March 2020 and lower warranty costs. This was partially
offset by unfavorable impacts from the cybersecurity incident and increased
short-term incentive compensation costs.


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EURAF



EURAF net sales increased 33.4% for the three months ended June 30, 2021 to
$180.8 million from $135.5 million for the three months ended June 30, 2020. The
increase was primarily due to higher shipments of cranes for the commercial
construction end market as compared to the three months ended June 30, 2020,
which was impacted by the COVID-19 pandemic. This was partially offset by
unfavorable impacts from the cybersecurity incident. EURAF net sales was
favorably impacted by approximately $15.0 million from changes in foreign
currency exchange rates.



EURAF operating income (loss) increased $10.1 million for the three months ended
June 30, 2021 to income of $5.7 million from a loss of $4.4 million for the
three months ended June 30, 2020. The increase was primarily due to higher
volume of crane shipments and a favorable mix, partially offset by unfavorable
impacts from the cybersecurity incident, increased short-term incentive
compensation costs and increased input costs. Operating income was favorably
impacted by approximately $1.7 million from changes in foreign currency exchange
rates.



EURAF net sales increased 29.8% for the six months ended June 30, 2021 to $335.3
million from $258.4 million for the six months ended June 30, 2020. The increase
was primarily due to higher shipments of cranes for the commercial construction
end market compared to the six months ended June 30, 2020, which was impacted by
the COVID-19 pandemic. This was partially offset by unfavorable impacts from the
cybersecurity incident. EURAF net sales was favorably impacted by approximately
$26.8 million from favorable changes in foreign currency exchange rates.



EURAF operating income (loss) increased $16.8 million for the six months ended
June 30, 2021 to income of $12.0 million from a loss of $4.8 million for the six
months ended June 30, 2020. The increase was primarily due to higher volume of
crane shipments and a favorable mix, partially offset by unfavorable impacts
from the cybersecurity incident, increased short-term incentive compensation
costs and increased input costs. Operating income was favorably impacted by
approximately $3.0 million from changes in foreign currency exchange rates.



MEAP



MEAP net sales increased 125.7% for the three months ended June 30, 2021 to
$97.5 million from $43.2 million for the three months ended June 30, 2020. The
increase was primarily due to higher crane shipments within the commercial
construction end market compared to the three months ended June 30, 2020, which
was impacted by the COVID-19 pandemic. This was partially offset by unfavorable
impacts from the cybersecurity incident. Net sales was favorably impacted by
approximately $6.2 million from changes in foreign currency exchange rates.



MEAP operating income increased $3.2 million for the three months ended June 30,
2021 to $9.8 million from $6.6 million for the three months ended June 30, 2020.
The increase was primarily due to higher volume of crane shipments, partially
offset by unfavorable impacts from the cybersecurity incident, increased
short-term incentive compensation costs and a $3.6 million loss from a write-off
of a long-term note receivable resulting from the 2014 divestiture of the
Company's Chinese joint venture.



MEAP net sales increased 68.5% for the six months ended June 30, 2021 to $157.2
million from $93.3 million for the six months ended June 30, 2020. The increase
was primarily due to higher crane shipments within the commercial construction
end market compared to the six months ended June 30, 2020, which was impacted by
the COVID-19 pandemic. This was partially offset by unfavorable impacts from the
cybersecurity incident. MEAP net sales were favorably impacted by approximately
$9.9 million from changes in foreign currency exchange rates.



MEAP operating income increased $3.7 million for the six months ended June 30,
2021 to $16.6 million from $12.9 million for the six months ended June 30, 2020
primarily due to higher volume of crane shipments, partially offset by
unfavorable impacts from the cybersecurity incident, increased short-term
incentive compensation costs and a $3.6 million loss from a write-off of a
long-term note receivable resulting from the 2014 divestiture of the Company's
Chinese joint venture. MEAP operating income was favorably impacted by
approximately $0.3 million from changes in foreign currency exchange rates.






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Consolidated Results of Operations for the three and six months ended June 30,
2021 and 2020



                                  Three Months Ended                            Six Months Ended
                                       June 30,                                     June 30,
                                                              2021 to                                     2021 to
                                                              2020 %                                      2020 %
                                  2021           2020         Change           2021          2020         Change
Orders                         $    537.2      $  237.9           125.8 %    $ 1,010.8     $  612.9            64.9 %
Backlog                             736.1         430.5            71.0 %        736.1        430.5            71.0 %
Net sales                           463.6         328.3            41.2 %        817.9        657.5            24.4 %
Gross profit                         90.4          48.4            86.8 %        158.8        111.6            42.3 %
Gross profit %                       19.5 %        14.7 %                         19.4 %       17.0 %
Engineering, selling and
  administrative expenses            63.6          49.7            28.0 %        121.3        105.6            14.9 %
Restructuring (income)
  expense                               -           0.2          (100.0 )%        (0.1 )        1.7          (105.9 )%
Interest expense                      7.3           7.2             1.4 %         14.4         14.4               -
Other income (expense) - net          2.8          (2.9 )        (196.6 )%         0.7         (6.9 )        (110.1 )%
Provision for income taxes            4.0           0.7           471.4 %          8.2          2.6           215.4 %
*Measure not meaningful




Orders and Backlog

Orders for the three months ended June 30, 2021 increased 125.8% to $537.2
million from $237.9 million for the same period in 2020. The increase in orders
was primarily attributable to higher global demand as the three months ended
June 30, 2020 was significantly impacted by the COVID-19 pandemic. Orders were
favorably impacted by approximately $21.4 million from favorable changes in
foreign currency exchange rates.

Orders for the six months ended June 30, 2021 increased 64.9% to $1,010.8
million from $612.9 million for the same period in 2020. The increase in orders
was primarily attributable to higher global demand as the six months ended June
30, 2020 was significantly impacted by the COVID-10 pandemic. Orders were
favorably impacted by approximately $42.2 million from favorable changes in
foreign currency exchange rates.

As of June 30, 2021, total backlog was $736.1 million, a 71.0% increase from the
June 30, 2020 backlog of $430.5 million. Backlog increased across all segments
and was favorably impacted by approximately $19.9 million from changes in
foreign currency exchange rates.



Net Sales



Net sales for the three months ended June 30, 2021 increased 41.2% to $463.6
million from $328.3 million in the same period in 2020. The increase was
primarily from higher crane shipments due to increased demand as compared to the
three months ended June 30, 2020, which was impacted by the COVID-19 pandemic.
Additionally, the increase was driven by entering the quarter with a higher
shippable backlog, partially offset by unfavorable impacts from the
cybersecurity incident. Net sales was favorably impacted by approximately $21.3
million from changes in foreign currency exchange rates.



Net sales for the six months ended June 30, 2021 increased 24.4% to $817.9
million from $657.5 million for the same period in 2020. The increase was
primarily from higher crane shipments due to increased demand as compared to the
six months ended June 30, 2020, which was impacted by the COVID-19 pandemic.
Additionally, the increase was driven by entering the year with a higher
shippable backlog, partially offset by unfavorable impacts from the
cybersecurity incident. Net sales was favorably impacted by approximately $36.8
million from changes in foreign currency exchange rates.



Gross Profit



Gross profit for the three months ended June 30, 2021 was $90.4 million, an
increase of $42.0 million compared to $48.4 million for the same period in 2020.
The increase was primarily due to an increase in net sales and a favorable mix
partially offset by unfavorable impacts from the cybersecurity incident and
increases in raw material input costs. Gross profit was impacted by
approximately $4.8 million from favorable changes in foreign currency exchange
rates.



Gross profit percentage increased in the three months ended June 30, 2021 to
19.5% from 14.7% to the same period in 2020 primarily due to a favorable mix and
increased absorption of fixed costs, partially offset by increases in raw
material input costs.

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Gross profit for the six months ended June 30, 2021 was $158.8 million, an
increase of $47.2 million compared to $111.6 million for the same period in
2020. The increase was primarily due to the increase in net sales and a
favorable mix, partially offset by unfavorable impacts from the cybersecurity
incident and increases in raw material input costs. Gross profit was impacted by
approximately $8.5 million from favorable changes in foreign currency exchange
rates.


Gross margin percentage increased over the past six months June 30, 2021 at 19.4% against 17.0% for the same period in 2020, mainly due to a favorable mix and an increased absorption of fixed costs, partially offset by the increase in the costs of raw material inputs.

Engineering, sales and administration costs



Engineering, selling and administrative expenses increased 28.0% to $63.6
million for the three months ended June 30, 2021 compared to $49.7 million for
the same period in 2020. The increase was primarily due to higher short-term
incentive compensation costs and a $3.6 million loss from a write-off of a
long-term note receivable resulting from the 2014 divestiture of the Company's
Chinese joint venture. Engineering, selling and administrative expenses were
unfavorably impacted by approximately $3.1 million from changes in foreign
currency exchange rates.



Engineering, selling and administrative expenses increased 14.9% to $121.3
million for the six months ended June 30, 2021 compared to $105.6 million for
the same period in 2020. The increase was primarily due to higher short-term
incentive compensation costs and a $3.6 million loss from a write-off of a
long-term note receivable resulting from the 2014 divestiture of the Company's
Chinese joint venture, partially offset by lower tradeshow costs from the
triennial ConExpo trade show in March 2020. Engineering, selling and
administrative expenses were unfavorably impacted by approximately $5.3 million
from changes in foreign currency exchange rates.



Restructuring costs (income)

During the three months ended June 30, 2021 and 2020, the Company recorded zero
and $0.2 million of restructuring expense, respectively. During the six months
ended June 30, 2021 and 2020, the Company recorded $0.1 million of restructuring
income and $1.7 million of restructuring expense, respectively. Restructuring
income for the six months ended June 30, 2021 primarily related to adjustments
of previously recorded costs associated with headcount reductions in Europe.
Expenses for the three and six months ended June 30, 2020 related primarily to
costs associated with headcount reductions in Europe.

Interest charges

Interest expense for the three and six months ended June 30, 2021 has remained stable year over year. See further details in Note 11, “Debt” to the condensed consolidated financial statements.

Other income (expenses) – Net

Other income (expense) – net was $ 2.8 million during the three months ended
June 30, 2021 and ($ 2.9) million for the same period in 2020. Other income (expenses) – net during the three months ended June 30, 2021 was mainly composed of $ 3.1 million net foreign exchange gains partially offset by $ 0.2 million retirement benefits and health costs after retirement. Other income (expenses) – net during the three months ended June 30, 2020 was mainly composed of $ 2.1 million net exchange losses and $ 0.4 million retirement benefits and health costs after retirement.



Other income (expense) - net was $0.7 million during the six months ended
June 30, 2021 and $(6.9) million for the same period in 2020. Other income
(expense) - net during the six months ended June 30, 2021 was primarily composed
of $1.4 million of net foreign currency gains offset by $0.3 million of pension
benefit and postretirement health costs. Other income (expense) - net during the
six months ended June 30, 2020 was primarily composed of $6.0 million of net
foreign currency losses and $0.8 million of pension benefit and postretirement
health costs.



Provision for Income Taxes


Provision for income taxes for the closed quarter June 30, 2021 and 2020 was
$ 4.0 million and $ 0.7 million, respectively.

The increase primarily related to a change in the jurisdictional mix of pre-tax
income compared to the previous year and a discrete tax benefit recorded in 2020
related to an amended 2018 U.S. tax return filed. In addition, the Company's
effective tax rate varies from the U.S. federal statutory rate of 21% due to
results of foreign operations that are subject to income taxes at different
statutory rates.



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For the six months ended June 30, 2021 and 2020, the Company recorded a
provision for income taxes of $8.2 million and $2.6 million, respectively. The
year over year increase primarily related to a change in the jurisdictional mix
of pre-tax income compared to the previous year and a discrete tax benefit
recorded in 2020 related to an amended 2018 U.S. tax return filed. In addition,
the Company's effective tax rate varies from the U.S. federal statutory rate of
21% due to results of foreign operations that are subject to income taxes at
different statutory rates.



Financial Condition

Cash Flows

The table below shows a summary of cash flows for the six months ended June 30,
2021 and 2020:



                                                         Six Months Ended
                                                             June 30,
                                                         2021         2020

Net cash provided by (used for) operating activities $ 49.7 $ (98.7)
Net cash used for investing activities

                     (15.3 )      (7.9 )
Net cash provided by (used for) financing activities        (2.6 )      36.6
Cash and cash equivalents                                  158.5       128.3

Cash flow from operating activities

Cash flows provided by operating activities for the six months ended June 30,
2021 were $49.7 million and were primarily driven by the net income and a net
decrease in working capital. The decrease in working capital was primarily due
to an increase in accounts payable of $85.4 million partially offset by an
increase in inventories of $62.2 million from December 31, 2020.

Cash flows used for operating activities for the six months ended June 30, 2020
were $98.7 million and were primarily driven by a net increase in working
capital of $108.9 million. The increase in working capital primarily resulted
from an increase in inventory of $73.4 million from December 31, 2019 and
payments of incentive compensation earned in the prior year. This was partially
offset by a net $10.2 million which is composed of a net loss of $20.5 million
less $30.7 million of non-cash adjustments to reconcile net loss to operating
cash flows from operating activities.

Cash flow from investing activities

Cash flows used for investing activities were $15.3 million for the six months
ended June 30, 2021 and consisted of $15.4 million of capital expenditures,
partially offset by $0.1 million in proceeds from sales of property, plant and
equipment.

Cash flows used for investing activities were $7.9 million for six months ended
June 30, 2020 and consisted of $8.0 million of capital expenditures, partially
offset by $0.1 million in proceeds from sales of property, plant and equipment.

Cash flow from financing activities

Cash flows used for financing activities were $2.6 million for the six months
ended June 30, 2021 and consisted primarily of $5.2 million of cash receipts
from the exercise of stock options and $7.8 million of payments on other debt.

The cash flows generated by financing activities were $ 36.6 million for the six months ended June 30, 2020 and consisted of $ 50.0 million proceeds from borrowings under the ABL revolving credit facility and $ 0.1 million cash received from the exercise of stock options. This was partially offset by $ 12.0 million repurchases of ordinary shares of the Company and $ 1.5 million payments on other debts.

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Liquidity and capital resources

The Company’s liquidity position at June 30, 2021, December 31, 2020 and
June 30, 2020 is summarized as follows:



                                                  June 30, 2021       December 31, 2020       June 30, 2020
Cash and cash equivalents                        $         158.5     $             128.7     $         128.3
Revolver borrowing capacity                                253.6                   243.8               260.8
Other debt availability                                     45.0                    42.2                38.7
Less: Borrowings on revolver                                   -                       -               (50.0 )
Less: Outstanding letters of credit                         (3.0 )                  (3.0 )              (3.0 )
Total liquidity                                  $         454.1     $             411.7     $         374.8

The Company believes that its liquidity and expected cash flow from operations should be sufficient to cover expected working capital, capital expenditures and other general operational needs outstanding over the next twelve months.

Sources of cash



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. The borrowing capacity under the ABL Revolving
Credit Facility is based on the value of inventory, accounts receivable and
fixed assets 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. 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 ABL Revolving Credit Facility has a term of five years and 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.



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 facilities are denominated in Euros
totaling €26.0 million, one facility denominated in U.S. dollars totaling $9.5
million and one facility denominated in Chinese Yuan totaling ¥30.0 million.
Total U.S. dollar availability as of June 30, 2021 for the six overdraft
facilities is $45.0 million.



Debt

Outstanding debt as of June 30, 2021 and December 31, 2020 is summarized as
follows:



                                                          June 30, 2021       December 31, 2020
Senior secured asset based revolving credit facility     $             -     $                 -
Senior secured second lien notes due 2026                          300.0                   300.0
Other debt                                                           7.2                    14.7
Deferred financing costs                                            (3.5 )                  (3.8 )
Total debt                                                         303.7                   310.9

Short-term borrowings and current portion of long-term borrowings

  debt                                                              (3.7 )                 (10.5 )
Long-term debt                                           $         300.0     $             300.4




Both the ABL Revolving Credit Facility and 2026 Notes include customary
covenants and events of default. Refer to Note 11, "Debt," to the Condensed
Consolidated Financial Statements for additional discussions of covenants for
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.

Non-GAAP measures

The Company uses EBITDA, adjusted EBITDA and adjusted operating income (loss),
which are financial measures that are not prepared in accordance with GAAP, as
additional metrics to evaluate the Company's performance. The Company defines
EBITDA as net income (loss) before interest, taxes, depreciation and
amortization. The Company defines adjusted EBITDA as

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EBITDA plus the addback of certain restructuring and other charges. The Company
defines adjusted operating income (loss) as adjusted EBITDA excluding the
addback of depreciation and amortization. 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. These
non-GAAP financial measures should be considered together with, and are not
substitutes for, the GAAP financial information provided herein. The
reconciliation of net income (loss) to EBITDA, and further to adjusted EBITDA
and to adjusted operating income (loss) and operating income (loss) for the
three and six months ended June 30, 2021 and 2020 and trailing twelve months are
summarized as follows:



                                        Three Months Ended            Six Months Ended         Trailing
                                             June 30,                     June 30,              Twelve
                                       2021            2020          2021          2020         Months
Net income (loss)                    $    17.9       $  (12.7 )    $    14.8     $  (20.5 )   $      16.2
Interest expense and amortization of
deferred
  financing fees                           7.6            7.5           15.1         15.1            30.6
Provision for income taxes                 4.0            0.7            8.2          2.6            22.7
Depreciation expense                       9.7            9.1           19.7         18.1            38.8
Amortization of intangible assets          0.1            0.1            0.2          0.2             0.3
EBITDA                                    39.3            4.7           58.0         15.5           108.6
Restructuring (income) expense               -            0.2           (0.1 )        1.7             5.2
Other non-recurring charges (1)            4.2              -            4.6            -             4.6
Other (income) expense - net (2)          (2.8 )          2.9           (0.7 )        6.9             2.4
Adjusted EBITDA                           40.7            7.8           61.8         24.1           120.8
Depreciation expense                      (9.7 )         (9.1 )        (19.7 )      (18.1 )         (38.8 )
Amortization of intangible assets         (0.1 )         (0.1 )         (0.2 )       (0.2 )          (0.3 )
Adjusted operating income (loss)          30.9           (1.4 )         41.9          5.8            81.7
Restructuring (income) expense               -           (0.2 )          0.1         (1.7 )          (5.2 )
Other non-recurring charges (1)           (4.2 )            -           (4.6 )          -            (4.6 )
Operating income (loss)              $    26.7       $   (1.6 )    $    

37.4 $ 4.1 $ 71.9

Adjusted EBITDA margin percentage 8.8% 2.4% 7.6% 3.7%

           7.5 %
Adjusted operating income (loss)
margin percentage                          6.7 %         (0.4 )%         5.1 %        0.9 %           5.1 %



(1) Other non-recurring charges for the last three, six and twelve months

ended June 30, 2021 relate to one-off costs included in engineering,

selling and administrative expenses in the summary consolidated statement

transactions arising mainly from a loss resulting from a write-off on a long-term note

receivable from the sale in 2014 of the Company’s Chinese joint venture

       and one-time acquisition costs.



(2) Other (income) expenses – net includes net foreign exchange gains (losses),

other elements of the net periodic pension costs, the costs associated with

business and other miscellaneous items in the last three, six and twelve

       months ended June 30, 2021 and the three and six months ended June 30,
       2020.




The Company uses free cash flows, which is a financial measure that is not
prepared in accordance with GAAP, as an additional metric to evaluate the
Company's performance. Free cash flows is defined as net cash provided by (used
for) operating activities less capital expenditures. Free cash flows for the
three and six months ended June 30, 2021 and 2020 are summarized as follows:



                                              Three Months Ended             Six Months Ended
                                                   June 30,                      June 30,
                                             2021            2020           2021          2020
Net cash provided by (used for)
operating activities                       $     8.9       $   (20.2 )   $     49.7     $   (98.7 )
Capital expenditures                            (7.4 )          (4.4 )        (15.4 )        (8.0 )
Free cash flows                            $     1.5       $   (24.6 )   $     34.3     $  (106.7 )


Critical Accounting Policies

The Company's critical accounting policies have not materially changed since the
2020 Form 10-K was filed. Refer to the Critical Accounting Policies in "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of

                                       27

--------------------------------------------------------------------------------

Transactions “included in the annual report on form 10-K for the year ended
December 31, 2020 for information on the Company’s policies, methodology and assumptions related to critical accounting policies.

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