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AEDNews - Construction Equipment Industry News The Manitowoc Company Reports Financial Results for 2009 The Manitowoc Company, Inc. recently reported sales of $838.7 million for the fourth quarter of 2009, down 31.1 percent from $1,216.6 million in the fourth quarter of 2008. The sales decrease was due primarily to a 49.1 percent decline in the Crane segment, partially offset by a 31.3 percent increase in the Foodservice segment. On a GAAP basis, the company reported a loss of $23.5 million, or $0.18 per diluted share, for the quarter, versus a net loss of $200.4 million, or $1.54 per share, in the fourth quarter of 2008. Both periods included special items. Excluding special items, the adjusted earnings from continuing operations was a loss of $9.3 million, or $0.07 per share, for the fourth quarter of 2009, versus similarly adjusted earnings of $59.4 million, or $0.46 per share, in the fourth quarter of 2008. A reconciliation of GAAP net earnings to net earnings before special items is provided later in this press release. For the full-year 2009, sales were $3.8 billion, a 16.0 percent declinefrom $4.5 billion in 2008. The net loss for 2009 was $704.2 million, or $5.41 per share, versus earnings of $10.0 million, or $0.08 per share, for the prior year. Excluding the special items described in the reconciliation below, net earnings from continuing operations for 2009 were $46.8 million, or $0.36 per share, versus $368.6 million, or $2.80 per share, for 2008. "Although we continue to be faced with a challenging business environment, we are encouraged by recently improving metrics and trends for 2010," said Glen E. Tellock, Manitowoc's chairman and chief executive officer. "We clearly exceeded our adjusted targets for cash flow and debt reduction, foodservice margin targets were achieved, and crane segment revenue was maintained at third-quarter levels. We also expect that 2010 will see increasing benefits from the operational efficiencies, process improvements, cost reductions, and synergies that we implemented in 2009. "Our cash flow from operations was $159.5 million during the fourth quarter, enabling total debt reduction of approximately $475 million for the full year, exceeding our $450 million target. Considering the challenging economy, especially in the heavy equipment markets, this was a remarkable achievement representing solid performance by the entire Manitowoc team. "Another highlight of 2009 was the progress that our Foodservice management team made in integrating the Manitowoc and Enodis businesses. Not only did we exceed our synergy target by more than 40 percent, we have positioned the business with significant growth opportunities going forward." Crane Segment Results Fourth-quarter 2009 net sales in the Crane segment were $480.2 million, down 49.1 percent from $943.6 million in the fourth quarter of 2008. On a sequential quarter basis, fourth quarter sales were essentially even with those in the third quarter of 2009. Crane segment operating earnings for the fourth quarter of 2009 decreased to $18.3 million from $114.9 million in the same period last year. On a sequential quarter basis, operating earnings were down $2.5 million from the third quarter of 2009 due primarily to reduced overhead absorption. Crane segment backlog totaled $573 million at Dec. 31, 2009, a decline of 14.1 percent from the $667 million backlog at Sept. 30, 2009. "The percentage decline in backlog diminished in the fourth quarter as the net positive order flow trend that began in March continued through December," said Tellock. "The trend in our orders reflects improvement in current demand levels, most notably from Asia, Latin America, Africa, and the Middle East. We believe our strong position in emerging markets, as well as the global restructuring that we have been implementing should enable us to restore Crane segment revenue and earnings growth as the market improves." Cash Flow/Debt Reduction Cash flow from operations in the fourth quarter of $159.5 million enabled Manitowoc to continue making excellent progress in the company's debt-reduction objective. Total debt declined by more than $220 million during the quarter and by approximately $475 million for the full year 2009. Also of note, Manitowoc has repaid approximately $775 million of debt since funding the Enodis acquisition in November 2008. Debt Refinancing/Covenants On January 22, 2010, the company successfully amended certain financial covenants and terms of its senior credit agreement allowing the company additional flexibility. Effectiveness of the amendment is conditioned upon the issuance of a minimum of $300 million of senior unsecured notes and the use of all the net proceeds to paydown its senior secured term debt. The company has commenced an offering to issue $400 million of senior unsecured notes and expects to complete the offering in the near term. Deferred Financing Fees Adjustments During the fourth quarter the company identified adjustments to correct an error to the amortization of deferred financing fees that reduce the expenses recognized in previously filed Quarterly Reports on Form 10-Q for each of the first three quarters of 2009 by $0.4 million, $5.8 million, and $5.0 million, respectively. The net of tax effect of these adjustments increases the company's previously reported 2009 earnings per share by $0.00, $0.03, and $0.02 for the quarters ended March 31, June 30 and Sept. 30, respectively. These adjustments also increase the unamortized portion of deferred financing fees included in long term assets by $11.2 million, increase income taxes payable and deferred tax liabilities by $4.3 million, and increase retained earnings by $6.9 million as of Dec. 31, 2009. There was no impact to quarterly cash flows in 2009 as the increase in net earnings was offset by the decrease in deferred financing fee amortization and income tax expense. The company does not believe that these adjustments are material to the results of operations, financial position or cash flows for any of its previously filed quarterly financial statements. Accordingly, the December 31, 2009 balance sheet included in this release has been revised to reflect such adjustments. The company will revise its 2009 quarterly financial statements prospectively within its 2010 Quarterly Reports on Form 10-Q. For 2010, we expect our Foodservice segment revenues to improve modestly, and operating margins to continue their solid improvement," Tellock added. "In our Crane segment, we expect that the year-over-year percentage decline in revenues will be significantly lower than the 41.2 percent decline in 2009. We also expect Crane segment revenues in the first half of 2010 will be significantly lower than the first half of 2009; however, we expect Crane segment revenue gains in the second half of 2010 versus the second half of 2009. Additionally, we expect full-year operating margins in our Crane segment will track above the 3.5 percent trough margin that we experienced in 2003. Other 2010 financial expectations includecapital expenditures of approximately $50 million, depreciation and amortization of approximately $145 million, and debt reduction of at least $200 million." For the complete financial results visit http://www.manitowoc.com. About The Manitowoc Company, Inc. The Manitowoc Company, Inc. is a multi-industry, capital goods manufacturer with over 100 manufacturing and service facilities in 27 countries. It is recognized as one of the world's largest providers of lifting equipment for the global construction industry, including lattice-boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. Manitowoc also is one of the world's leading innovators and manufacturers of commercial foodservice equipment serving the ice, beverage, refrigeration, food prep, and cooking needs of restaurants, convenience stores, hotels, healthcare, and institutional applications. Article Date: 02-08-2010 Source: Manitowoc Company Copyright(C) 2010 Associated Equipment Distributors. All Rights Reserved. | ||||||
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