Strong 4Q for Manitowoc
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Manitowoc Company, Inc.
reported fourth-quarter 2012 adjusted earnings from continuing
operations of 27 cents per share, beating the Zacks Consensus
Estimate of 24 cents and exceeding the prior-year quarter's
earnings of 14 cents per share. The year-over-year increase was
attributable to the release of an $11.6 million reserve as a
result of a favorable tax audit outcome.
On a reported basis, earnings from continuing operations were
$34.5 million or 26 cents per share compared with the prior-year
quarter's earnings of $14.9 million or 11 cents per share.
Manitowoc, which is among the prominent players in the
construction machinery industry along with
Deere & Company
, reported adjusted earnings from continuing operation of 78
cents per share for 2012, a significant rise of 110% from the
year-ago adjusted earnings of 37 cents. The results beat the
Zacks Consensus Estimate of 74 cents. On a reported basis,
earnings were 76 cents per share compared with a loss of 8 cents
posted in 2011.
Total revenues were $1.1 billion in the reported quarter, up 10%
year over year. It was ahead of the Zacks Consensus Estimate of
$1.08 billion. The year-over-year rise is mainly due to an
increase in Crane and Food Service segment sales.
Revenues for the full year increased 8.5% to $3.9 billion from
$3.6 billion in 2011, meeting the Zacks Consensus Estimate.
Cost of sales increased 7.6% to $883.9 million in the fourth
quarter from $821.3 million in the year-ago quarter. Gross profit
improved 19.3% year over year to $246.5 million. Consequently,
gross margin expanded 180 basis points (bps) to 21.8% in the
Engineering, selling and administrative expenses went up 9.1%
year over year to $154.5 million. Operating profit rose 36% to
$74.4 million. Operating margin increased 130 bps to 6.6% in the
Revenues in the Crane and related products segment increased
11.6% year over year to $767.2 million in the reported quarter
due to strong activity in the American region, as well as higher
demand in emerging markets. This rise was partly offset by a
negative impact from currency exchange. The segment's operating
income rose 45% year over year to $56.3 million in the fourth
quarter, primarily due to higher sales volume and operational
Foodservice Equipment segment revenues were $363.2 million in the
quarter compared with $340.3 million in the prior-year quarter.
The improvement was mainly due to growth across all geographies,
continued traction of new products, and engaged channel partners.
The segment's operating income rose 12% year over year to $50.3
million in the fourth quarter.
Backlog in the Crane segment was $756 million as of Dec 31, 2012,
versus $761 million as of Dec 31, 2011. Total orders were $544
million for the fourth quarter, 19% lower than the prior-year
Cash and temporary investments increased 6.7% year-over-year to
$76.1 million at the end of 2012. Long-term debt was $1.73
billion as of Dec 31, 2012, a 4.6% year-over-year decrease.
Debt-to-capitalization ratio reduced to 75% as of Dec 31, 2012,
from 79% as of Dec 31, 2011.
Cash flow from operating activities was $233.2 million in the
quarter versus $197.9 million in the prior-year quarter. Capital
expenditure was $22.7 million in the quarter compared with $32.6
million in the year-ago quarter.
Outlook for 2013
For full-year 2013, the company expects crane revenues to grow in
a high single-digit clip, while foodservice revenues are expected
to grow in a low single-digit clip. The company expects a high
single-digit improvement in operating margins in the Crane
segment and mid-teens gains in the foodservice segment.
Capital expenditure has been projected to be $100 million for the
year. Depreciation and amortization has been predicted to be $115
million for 2013. Interest expenses are expected to be $125
million while debt reduction has been targeted to exceed $200
The recent divestiture of Jackson Ware Washing business to
Hoshizaki USA Holdings, Inc. will strengthen the company's core
commercial foodservice business. This will enable Manitowoc to
direct resources in a manner to obtain strategic initiatives and
drive profitable growth.
Crane demand is expected to soar, benefited by the new highway
bill which leads to increased spending in construction
activities. Margins in the Foodservice segment are expected to
improve significantly in 2013, driven by the introduction of new
Manitowoc retains a short-term Zacks Rank #3 (Hold).