Manitowoc Reports Financial Results for 2008, Announces Layoffs

January 30, 2009 – The Manitowoc Company Inc., Manitowoc, Wis., reported sales of $1.22 billion for the fourth quarter of 2008, a 16-percent increase from $1.05 billion in the fourth quarter of 2007. Results for the quarter were a net loss of $36.5 million, or a loss of $0.28 per share, versus earnings of $99.2 million, or $0.76 per share in the fourth quarter of the prior year. The earnings decline was due to the acquisition of Enodis plc, partially offset by the gain on the divestiture of the marine segment, both of which were completed during the fourth quarter of 2008. The company reported its best year for cranes, but the company will be reducing its workforce by about 22 percent because of a reduction in crane backlog. The cuts will take place in France, Portugal, China, India, and the Shady Grove, Pa., facility.

Excluding the impacts of the Enodis acquisition, the gain on sale of the marine segment, the early extinguishment of debt, and a restructuring charge taken in the crane segment, earnings from continuing operations for the quarter were $66.5 million, or $0.51 per share, versus $96.1 million, or $0.74 per share, in the fourth quarter of 2007. A reconciliation of GAAP earnings to earnings from continuing operations before special items for the three months and 12 months ended December 31, 2008 and 2007 is included later in this release.

 

For the full year 2008, sales were $4.50 billion, a 22-percent increase from $3.68 billion in 2007. Net earnings for 2008 were $174 million, or $1.32 per share, versus $336.7 million, or $2.64 per share in the prior year. Excluding the special items described in the reconciliation below, earnings from continuing operations for 2008 were $407.4 million, or $3.10 per share, versus $341.1 million, or $2.68 per share in 2007. This shortfall compared to prior guidance is due to the after tax impact of the crane restructuring charge taken in December 2008.

 

"This has been a transformational year for Manitowoc," said Glen Tellock, president and CEO. "We are successfully executing our long-term strategy of building market-leadership positions in our two core markets: cranes and commercial foodservice equipment. In addition, we have divested our marine segment and are now focusing all resources and management efforts on expanding our competitive position within our two remaining segments.

 

"Like most companies, we are feeling the impact of the global economic slowdown. We have taken appropriate actions and we will make additional changes to our businesses as market dynamics continue to unfold in 2009. We intend to build on our leadership positions during this slowdown and emerge as an even stronger competitor."

 

Fourth-quarter 2008 net sales in the crane segment were $943.6 million, essentially flat with net sales of $945.5 million in the prior year. Crane segment operating earnings for the fourth quarter of 2008 decreased to $114.9 million from $141.7 million in the same period last year. Crane segment backlog totaled $1.9 billion at December 31, 2008, a decrease of 34 percent from the $2.9 billion backlog at December 31, 2007.

 

"As we stated in our January 8 announcement, we are experiencing a weakening demand in the Crane segment, and we estimate a decline in crane sales of approximately 20 percent in 2009," said Tellock. "Although demand for lighter lift capacity cranes has softened globally, demand for higher capacity cranes in the U.S. and Asia remains relatively stable. However, demand in Europe and the Middle East has weakened considerably compared to the peak we experienced in the first half of 2008."

 

The company discussed the results during an investor conference call yesterday. A replay of the conference call will be available at the same location on the website at www.manitowoc.com.