The Manitowoc Company, Inc. (NYSE: MTW) reported sales of $876.5 million for the second quarter of 2010, down 12.4 percent from $1.0 billion in the second quarter of 2009. The sales decrease was due primarily to a 31 percent decline in Crane segment sales, partially offset by an 11 percent increase in Foodservice segment sales.
On a GAAP basis, the company reported earnings of $14.1 million, or $0.11 per diluted share, for the quarter versus a net loss of $12.3 million, or $0.09 per share, in the second quarter of 2009. Both periods included special items. Excluding special items, the adjusted earnings from continuing operations were $15.7 million, or $0.12 per share, for the second quarter of 2010, versus adjusted earnings of $29.9 million, or $0.23 per share, in the second quarter of 2009. A reconciliation of GAAP net earnings to net earnings before special items is provided later in this press release.
Foodservice Segment Results
Second-quarter 2010 net sales in the Foodservice segment were $424.9 million versus $382.5 million in the second quarter of 2009. Second-quarter 2010 results were driven by a continued focus on innovation, the introduction of new products, and strengthening demand in certain end markets and geographies.
Foodservice operating earnings for the second quarter of 2010 were $56.9 million, versus $46.4 million in the second quarter of 2009. This resulted in Foodservice segment operating margins of 13.4 percent for the second quarter of 2010, up from 12.1 percent in the same period in 2009. The year-over-year margin improvement was primarily due to a favorable product mix and ongoing integration synergies.
Crane Segment Results
Second-quarter 2010 net sales in the Crane segment were $451.6 million, down 31 percent from $652.3 million in the second quarter of 2009. Second-quarter 2010 sales were up 23 percent from first-quarter 2010 sales of $366.8 million.
Crane segment operating earnings for the second quarter of 2010 decreased to $38.6 million from $49.5 million in the same period last year. Operating earnings were up $34.1 million from the first quarter of 2010, due primarily to higher volumes, product mix, and favorable receivable collection activity. This resulted in Crane segment operating margins of 8.6 percent for the second quarter of 2010, up from 7.6 percent in the same period in 2009, and up from 1.2 percent in the first quarter of 2010.
Crane segment backlog totaled $531 million as of June 30, 2010, a decrease of 13.4 percent from the $613 million backlog at March 31, 2010. The decrease in backlog during the second quarter was due to higher shipment activity, currency impact, and a sizable order removed from backlog due to persistent financing challenges in the current credit markets.
Cash Flow/Debt Reduction
Cash flow provided by operations in the second quarter of 2010 was $83.0 million. Second-quarter operating cash flow compared to prior periods was impacted by a change in the structure of the company’s accounts receivable securitization facility. As a result, the company was able to classify year-to-date cash inflows from this facility as an operating activity instead of a financing activity as in the first quarter. This new accounting guidance did not require the company to restate 2009 cash flow results and therefore year-to-date cash flows in both periods are now comparable. Year-to-date cash from operations in 2010 was $12.9 million versus negative $17.9 million for the same period in 2009.
Tags: Financial, The Manitowoc Company
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