The Manitowoc Company (MTW) Q4 2012 earnings summary

Executive summary

• FY12 continuing-operations sales rose 8.5% YoY to $3,927.0M; operating earnings increased to $281.8M from $218.4M.

• Continuing-operations earnings were $92.3M versus $20.3M in 2011; diluted EPS was $0.76 versus $0.20. Net earnings attributable to shareholders were $101.7M, including discontinued operations and noncontrolling-interest effects.

Financial highlights

• Gross profit increased 13.0% to $934.4M; gross margin rose to 23.8% from 22.8%, reflecting volume, pricing, cost reductions and lean initiatives.

• Interest expense fell to $137.1M from $146.7M; debt-extinguishment loss was $6.3M versus $29.7M in 2011.

• Operating cash flow was $162.3M versus $15.6M; year-end cash and cash equivalents were $73.4M.

• Effective tax rate was 29.2%, including an $11.6M benefit from a favorable audit outcome, partly offset by $17.5M of deferred-tax valuation allowance adjustments.

Outlook and guidance

• FY13 revenue expected to grow high-single digits in Crane and mid-single digits in Foodservice; Crane operating margin expected in the high-single digits, while Foodservice margin was expected to be consistent with FY12.

• FY13 targets: capex ~$100M, depreciation and amortization ~$115M, debt reduction exceeding $200M, interest expense reduction of $10M–$15M, and effective tax rate in the mid-30% range.

• Priorities include improving margins amid slow, potentially choppy end markets; Crane planned ERP rollouts, lean initiatives and new product introductions, while Foodservice planned manufacturing consolidation and relocation for margin expansion from 2014 onward.