Commercial foodservice equipment manufacturer,
The Manitowoc Company, Inc.
), has declared the closure of senior secured credit facilities
worth $1.05 billion.
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The credit facilities consist of a revolving facility of $500
million, Term Loan A worth $350 million and Term Loan B worth
$200 million. While Term Loan A and the revolving facility have a
five-year term maturity, Term Loan B will mature in seven years.
The new credit facilities extend the maturity dates of the
revolving credit facility and term loans from 2016 and 2017 to
2018 and 2020, respectively. The Term Loan A and revolving
facility will bear interest at LIBOR plus 2.25% or 1.25% over an
alternate base rate.
The proceeds from this new credit facilities will help the
company to redeem its 9.5% Senior Notes due 2018 after reaching
the call date in Feb 2014. In addition, the new credit facilities
and lower interest expense from the bond redemption will generate
interest savings of about $20 million in 2014.
As of Sep 30, 2013, Manitowoc had cash and temporary investments
totaling $87.2 million versus $76.1 million as of Dec 31, 2012.
Cash flow from operating activities improved substantially to
$114 million in the third quarter of 2013 from $49.7 million in
the prior-year quarter driven by cash from profitability,
partially offset by seasonal working capital requirements in both
However, for full-year 2013, Manitowoc lowered its revenue
guidance for the Crane segment from the high single-digit to mid
single-digit range. Additionally, this segment will benefit from
the introduction of new products and services.
On the other hand, Foodservice revenues are expected to rise in
modest single digits, as compared with the mid single-digit
growth projected earlier. Margins for both the Crane and
Foodservice segments are expected to improve in 2013. However,
high debt levels will continue to be a headwind.
Wisconsin-based Manitowoc is one of the world's major innovators
and manufacturers of commercial foodservice equipment. The
company is among the premier creators and providers of crawler
cranes, tower cranes and mobile cranes for the heavy construction
industry. These are complemented by industry-leading product
Currently, Manitowoc carries a Zacks Rank #4 (Sell).
However, some better-ranked stocks in the in the sector include
Alamo Group, Inc.
). While Kubota and Alamo Group carry a Zacks Rank #1 (Strong
Buy), Terex holds a Zacks Rank #2 (Buy).