The Manitowoc Company Inc. has announced record revenues for the first quarter ended March 31, 2002. Net sales increased 31 percent to $301.3 million, from $229.4 million for the same period in 2001. Earnings were $9.0 million, or $0.36 per diluted share, excluding a non-recurring charge, compared with $9.9 million, or $0.40 per diluted share, in the first quarter of 2001. Including the charge of $3.9 million for costs to consolidate the Multiplex beverage equipment operation, first-quarter 2002 net earnings were $6.6 million, or $0.27 per diluted share.
The non-recurring charge covers the anticipated costs associated with closing the Multiplex facility in St. Louis, Missouri, and moving its operations into other manufacturing facilities within the company. The consolidation was made possible by the implementation of demand flow manufacturing throughout Manitowoc’s foodservice operations, which freed up valuable manufacturing floor space. The consolidation will enable the company to leverage the core competencies in its ice and beverage operations, speed new-product development and significantly reduce costs. Excluding the charge, earnings for the quarter were in line with analysts’ consensus estimates.
”In the short term, our earnings and EVA have been negatively affected by the consolidation within our beverage operations,’ said Terry D. Growcock, Manitowoc’s president and chief executive officer. ”However, these initiatives will benefit our long-term results. Our increased revenues and proven ability to generate significant cash flow year after year point to the strength of our diversified business model, our growing market shares, and the strength of our management team.’
First-quarter highlights include:
* Record Q1 revenues resulting from the acquisition of Potain and continued strength in the marine business;
* The announcement of a definitive agreement to acquire Grove Worldwide;
* The launch of the first crane product jointly developed by Manitowoc and Potain;
* The overall success achieved by Manitowoc’s Crane Group at the ConExpo trade show; and
* Margin improvements within all three segments due to cost reductions and consolidation efforts.
Business Segment Results
Net sales from the Crane segment increased 75 percent to $147.7 million, and operating earnings increased 18 percent to $13.5 million. Excluding Potain, crane sales and operating earnings declined 9.3 percent and 11.3 percent, respectively, compared to year-ago levels, while margins remained flat.
Once again, the Crane segment was affected by a strong dollar and pricing pressures; however, the company’s boom-truck business posted improved performance as a result of its plant consolidation. In addition, Manitowoc and Potain launched their first jointly designed product -- the Model S282 -- which was well received at the ConExpo trade show last month. As a result, the Crane segment backlog stood at $81.5 million at quarter end.
The Foodservice segment recorded a 1.7 percent decline in earnings on a 1.5 percent increase in sales for the first quarter. Results were heavily influenced by the costs associated with the introduction and ramp up in production for a new line of energy-efficient, private-label residential refrigerators built by Diversified Refrigeration (DRI). DRI accounted for all of the quarter’s sales increase. Without DRI, sales in the Foodservice segment were flat compared to last year, while operating earnings were up 14.5 percent.
Manitowoc’s Marine segment reported strong first-quarter results as sales increased 16 percent to $50.9 million, while operating earnings grew nearly 30 percent to $5.9 million. Margins climbed to 11.7 percent compared with 10.4 percent one year ago, despite a weak winter repair season. Quotation activity remains brisk as vessel operators are taking steps to comply with OPA ’90 legislation. These shipbuilding projects should offset a weaker demand for ship repairs by our traditional Great Lakes customers.
Other first-quarter financial highlights included a near breakeven in cash from operations. This is particularly noteworthy as the first quarter was expected to be a significant net use of cash due to soft market conditions, new-product introductions, and the seasonality of our businesses. Cash from operations for the full year is still projected to exceed $100 million. EVA in the quarter was a negative $0.9 million, compared with positive $2.3 million one year ago. This decline was primarily attributed to Potain’s seasonally slow first quarter. Excluding Potain’s results, EVA would have increased 36 percent to $3.2 million for the quarter. Depreciation and amortization for the quarter totaled $7.1 million, while the company’s effective tax rate was 39.0 percent.
Earnings Guidance
”Although we remain cautious in light of the current economic environment, we are reiterating our 2002 guidance given earlier this year. We believe the current First Call estimate range of $2.35 to $2.60 is reasonable. In the meantime, we are continuing to position our businesses to excel when the economy recovers by investing in new-product development and operational excellence,’ concluded Growcock.
For more information, visit www.manitowoc.com.
