Signs of stability in Manitowoc's second quarter

29 July 2010

Glen Tellock, Manitowoc's chairman and chief executive officer.

Glen Tellock, Manitowoc's chairman and chief executive officer.

The Manitowoc Company reported sales of $876.5 million for the second quarter of 2010, down 12.4% from US$1 billion in the second quarter of 2009. The company attributed the sales decrease to a 31% decline in crane segment sales, partially offset by an 11% increase in food service segment sales.

"Despite the prolonged challenges presented by the state of the global economy, we maintained our focus on executing against our goals during the second quarter of 2010. As a result, we were able to deliver results consistent with our expectations," said Glen Tellock, Manitowoc's chairman and chief executive officer.

"Emerging markets continue to be encouraging for both of our businesses. While some recent positive indicators suggest a stabilization in certain mature markets, we remain guarded as we move into the second half of 2010. At the same time, we continue to drive the operational efficiencies, process improvements, and cost reduction initiatives we implemented last year, which should provide enhanced profitability as demand strengthens across our business," Tellock continued.

Tellock said balance sheet improvements continue to be a key area of focus for the company's management team, along with the prudent management of cash flow and near- and long-term debt reduction.

Second-quarter 2010 net sales in the crane segment were $451.6 million, down 31% from $652.3 million in the second quarter of 2009. Second-quarter 2010 sales were up 23% from first-quarter 2010 sales of $366.8 million.

Crane segment operating earnings for the second quarter of 2010 decreased to $38.6 million from $49.5 million in the same period last year. Operating earnings were up $34.1 million from the first quarter of 2010, due primarily to higher volumes, product mix, and favorable receivable collection activity, the company said.

Crane segment backlog totaled $531 million as of June 30, 2010, a decrease of 13.4% from the $613 million backlog at March 31, 2010. The decrease in backlog during the second quarter was due to higher shipment activity, currency impact, and a sizable order removed from backlog due to persistent financing challenges in the current credit markets, the company said.

"The second-quarter crane segment results illustrate the continuing challenges of the current economic environment in which we operate," Tellock said. "However, our focus on operational improvements and execution drove a notable improvement in operating margins during the quarter, which helped offset the weakness in global demand.

"Similar to prior quarters, emerging markets such as Asia, Latin America, and the Middle East demonstrated positive signs of improvement, while demand in the developed economies of North America and Europe continues to be weak. While we have seen modest improvements in utilization rates and significant reductions in dealer inventories in developed markets, rental rates continue to be soft," Tellock added.

For the full-year 2010, the company forecasts its foodservice segment revenues will improve modestly over 2009 results; full-year foodservice segment operating margins should exceed those of 2009; year-over-year declines in crane segment revenues should be significantly lower than the decline experienced in 2009; crane segment revenues in the second half of 2010 should be higher than the second half of 2009; and, full-year crane segment operating margins will be above the 3.5% trough margins that were experienced in 2003.


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