The Manitowoc Company, Inc. announced its results for the third quarter ended September 30, 2002, posting a 36 percent increase in revenue to $409.9 million compared to $301.0 million for the same period last year. Earnings rose 18 percent to $14.7 million or $0.57 per diluted share. This compares to $12.4 million or $0.51 per diluted share for the third quarter of 2001. The company also reported strong cash flow of $51.8 million for the quarter.
“While lower crane sales dampened our earnings during the quarter, our Foodservice and Marine segments posted results in-line with our expectations,” said Terry D. Growcock, Manitowoc’s chairman and chief executive officer.
“Our double-digit increases in sales, earnings, and cash flow demonstrate the strength of our diversified business model and strong management.”
For the first nine months of 2002, net sales increased 28 percent to a record $1.1 billion, from $828.6 million for the same period in 2001. Earnings before the extraordinary loss and cumulative effect of change in accounting principle, excluding a charge taken during the first quarter of 2002 for closure and consolidation costs associated with Multiplex, were $43.8 million, or $1.73 per diluted share, compared to $40.2 million, or $1.64 per diluted share, in 2001.
“Manitowoc continues to post record sales on a year-over-year basis,” added Growcock. “While the majority of that gain is due to the acquisition of Potain and Grove, it is also important to note that we are gaining market share in all segments and, as a result, are seeing internal growth in many of our existing operations.”
For the third quarter, net sales for the Crane segment
increased 54 percent to $234.7 million, and operating earnings increased 4 percent to $20.1 million, as compared to the third quarter of 2001. Excluding results from Grove, crane sales and earnings decreased approximately 12 percent and 29 percent, respectively, due to declining demand for
crawler cranes. Demand for tower cranes and boom trucks, on the other hand, remained stable. Manitowoc’s new 660-U.S. ton capacity Model 18000 will ship during the fourth
quarter, and its new Model 1015 foundation crane is already in the marketplace. Including Grove, Crane segment backlog stood at $139 million as of September 30, 2002. Excluding Grove, the backlog was $67 million as compared to $82 million at the end of the second quarter. Sales in the Marine segment increased 21 percent to $54.2 million, while operating earnings decreased approximately 16 percent to $4.2 million. Operating margins decreased approximately 3 percentage points due to the absence of higher margin repair work in the quarter. “While the higher-margin repair market has been slow for most of the year, we are projecting a modest pickup as we enter the winter season,” stated Growcock. “We currently have three 1,000-ft. vessels scheduled for winter drydocking and repair, compared with only one last year, so we expect somewhat better margins in the fourth quarter of 2002 and the first quarter of 2003.”
Manitowoc generated strong cash from operations of $51.8 million during the third quarter, compared with $42.8 million one year ago, due to a continued focus on working capital management in spite of the third quarter downturn in the crawler crane business. “The third quarter is a strong cash generation period, and we are well on our way to reaching our goal of $100 million in cash flow for the year 2002,” commented Growcock.
The company generated $420,000 in EVA compared with $5.2 million in the same period last year. As expected, negative EVA contributions from both Potain and Grove offset EVA gains in Foodservice, Marine, and other Crane segment businesses. During the quarter, Manitowoc reduced its revolving credit facility balance by $11 million, in spite of using $25 million to complete the Grove transaction. The company’s debt-to-capital ratio of approximately 67 percent is equal to the level at June 30, 2002.