The Manitowoc Company, Inc.reported sales of $732.2 million for the first quarter of 2011, up 7.0 percent from $684.4 million in the first quarter of 2010. The sales increase was the result of a 6.9 percent increase in Foodservice segment sales, coupled with a 7.1 percent increase in Crane segment sales. On a GAAP basis, the company reported a loss of $52.4 million, or $0.40 per diluted share, in the first quarter versus a net loss of $23.2 million, or $0.18 per diluted share, in the first quarter of 2010. Both periods included special items. Excluding special items, the adjusted net loss from continuing operations was $13.5 million, or $0.10 per diluted share, in the first quarter of 2011, versus an adjusted net loss of $12.9 million, or $0.10 per diluted share, in the first quarter of 2010. First-quarter 2011 results included a negative $0.04 per share impact from GAAP impairment of net operating losses generated in certain foreign jurisdictions.
Special items in the first quarter of 2011 were primarily comprised of tax expense from the sale of Kysor/Warren in January. A reconciliation of GAAP net earnings to net earnings before special items is provided later in this press release.
Glen E. Tellock, Manitowoc’s chairman and chief executive officer said, “Continued momentum in the first quarter provides us with increasing confidence that we have appropriately positioned our businesses for growth as the global economy recovers. During the quarter, we had very successful showings at two industry trade shows, ConExpo and NAFEM, which underscored the strength of our offerings, as well as the level of innovation we bring to our customers. In addition to our unwavering investments in new product development throughout the downturn, we have also continued to make improvements in our operations through LEAN initiatives, technology improvements, and facility consolidations, which should drive enhanced profitability long-term as volumes continue to increase.”
“We are very confident in our future and we will continue to focus our efforts on future growth and improving profitability. In addition to our operational initiatives, we are also refinancing our senior secured credit facilities to further improve the strength and flexibility of our capital structure. The closing of the new credit agreement is scheduled for early May, and is likely to result in interest rate reductions of at least 200 basis points on average for our senior credit facility. Throughout the remainder of the year, we will continue to diligently manage working capital as we balance our debt reduction priorities with necessary investments to support our strategic initiatives, take advantage of improving end market demand, and position the business for long-term growth and success.”
Crane Segment Results
First-quarter 2011 net sales in the Crane segment were $392.8 million, up 7.1 percent from $366.8 million in the first quarter of 2010 driven primarily by growth in our Americas region and our Crane Care business. First-quarter Crane revenues were also impacted by delivery disruptions, primarily due to Tier IV engine challenges, which have now been resolved.
Crane segment operating earnings for the first quarter of 2011 increased to $12.5 million from $4.5 million in the same period last year. This resulted in a Crane segment operating margin of 3.2 percent for the first quarter of 2011, up from 1.2 percent in the same period in 2010 due to the volume increase, but were constrained by input cost increases and the reinstatement of certain employee benefits previously reduced or discontinued.
Crane segment backlog totaled $800 million as of March 31, 2011, an increase of 40 percent from the $572 million backlog at December 31, 2010. The increase in backlog resulted from continued strength in demand.
“First-quarter performance for our Crane segment reflected a continuation of the strong order rates from the fourth quarter. Orders were particularly strong in the Americas, which benefited from a very successful ConExpo show in March. While economic conditions in parts of Europe continue to be challenging, the first-quarter performance reaffirms our view that 2010 was the trough year for this segment and provides us with greater confidence in our full-year 2011 outlook,” continued Tellock. “We continue to believe that 2011 will be a transition year, with uneven demand levels and increasing commodity costs creating certain challenges. However, we’re pleased with our current position and believe we are in an excellent position to drive year-over-year growth in 2011 and beyond.”
Foodservice Segment Results
First-quarter 2011 net sales in the Foodservice segment were up 6.9 percent to $339.4 million versus $317.6 million in the first quarter of 2010. The year-over-year increase was due to improving market conditions in most regions, as well as the introduction of new products and continued geographic penetration outpacing the market.
Foodservice operating earnings for the first quarter of 2011 were $41.2 million, versus $46.6 million in the first quarter of 2010. This resulted in a Foodservice segment operating margin of 12.1 percent for the first quarter of 2011, down from 14.7 percent in the prior year period. The year-over-year decline in margin was largely due to difficult comparables resulting from a major product roll-out in the first quarter of 2010, coupled with our investments in various emerging markets to support customer growth initiatives.
“First-quarter results in our Foodservice segment were strong once again, as new product successes and continuing improvements in demand in North America and other emerging markets drove our fourth consecutive year-over-year quarterly sales increase. The positive feedback we received at NAFEM provided further validation of our strategy as customers realize the value of our full product offering and the benefits of our solution-based approach to new products and services. We are excited about the growth opportunities we anticipate for this segment through the remainder of the year as we continue to introduce new products and seek to expand our leadership position within the industry,” said Tellock.
Cash Flow
Cash flow used for operating activities of continuing operations in the first quarter of 2011 was $136.9 million. Use of cash in the first semester of the year is consistent with the normal seasonal pattern for the company; particularly when the business is expanding. Cash outflow used for investing activities during the quarter included $7.6 million for capital expenditures, which was entirely offset by a cash inflow of $143.6 million from the sale of Kysor/Warren.
About The Manitowoc Company, Inc.
The Manitowoc Company, Inc. is a multi-industry, capital goods manufacturer with nearly 100 manufacturing, distribution, service, and/or office facilities in 26 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.
