The Manitowoc Company (MTW) Q4 2011 earnings summary

Executive summary

• FY2011 net sales rose 19.4% YoY to $3,651.9M; operating earnings from continuing operations were $221.9M, versus $207.2M in 2010.

• Net loss attributable to shareholders was $10.5M, while continuing-operations earnings attributable to shareholders were $28.0M, or $0.21 per diluted share.

• Crane demand strengthened and backlog expanded; Foodservice also grew, while higher material and labor costs pressured gross margin.

Financial highlights

• Net sales increased to $3,651.9M from $3,141.7M; gross profit rose to $838.0M from $766.1M.

• Gross margin was 22.9%, down from 24.4% in 2010; higher material and labor costs weighed on both segments.

• Operating earnings from continuing operations were $221.9M; interest expense declined to $146.7M from $175.0M after refinancing and debt reduction.

• Cash from operations fell to $15.6M from $209.3M, primarily on working-capital needs as receivables and inventory rose with higher sales.

• Adjusted for the $34.6M after-tax loss on the Kysor/Warren sale, continuing-operations earnings attributable to shareholders were $28.0M.

Outlook and guidance

• 2012 Crane revenue was expected to increase 10–15% YoY, with operating margins improving 30–40% versus 2011.

• 2012 Foodservice revenue was expected to grow in the high-single-digit range, with operating margins increasing 10–15% versus 2011.

• 2012 targets included ~$80M capex, ~$120M depreciation and amortization, $150–200M debt reduction, and $25–30M lower interest expense.

• Forecasting remained challenging amid mixed industry views; growth plans depended on continued recovery and execution of operational and product initiatives.