The Manitowoc Company (MTW) Q4 2013 earnings summary

Executive summary

• FY2013 net sales rose 3.4% YoY to $4.05B; operating earnings from continuing operations increased to $364.4M from $296.9M.

• Net earnings attributable to shareholders were $141.8M, or diluted EPS of $1.05, versus $101.7M and $0.76 in 2012.

Financial highlights

• Gross profit increased 8.4% to $1,021.8M; gross margin expanded to 25.2% from 24.1%, reflecting pricing and manufacturing cost reductions.

• Continuing-operations earnings were $189.1M; reported net earnings included $18.8M of discontinued-operations losses and a $2.7M loss on sale.

• Operating cash flow rose to $323.1M from $162.4M, supported by profitability and working-capital improvement, including accounts-receivable collections.

• Interest expense declined to $128.4M from $135.6M, primarily due to debt reduction; the effective tax rate was 16.0%, including favorable reserve releases.

Outlook and guidance

• 2014 plan: modest growth in both segments, with emphasis on margin improvement, operational efficiency, cost control, and continued debt repayment.

• Foodservice revenue expected to grow in the mid-single digits with improved operating margins; Crane revenue expected to rise modestly, with operating margin in the high-single digits.

• 2014 expectations: capital expenditures ~$90M, depreciation and amortization ~$120M, interest expense ~$100M, deferred financing fees ~$8M, and effective tax rate in the mid-to-high 20% range.