Strong cranes segment bolsters Manitowoc’s sales in Q2
The Manitowoc Company, Manitowoc, Wis., reported sales of $1.0 billion for the second quarter of 2012, an increase of 5.9 percent compared to sales of $949.8 million in the second quarter of 2011. The sales increase was driven by a 10.1 percent increase in crane segment sales (15.8 percent at consistent currency translation rates), coupled with a slight increase in foodservice segment sales.
“Strong operating leverage drove further margin expansion during the second quarter as initiatives to drive operational efficiency continued to bear fruit. Moreover, year-over-year sales growth of 10 percent in cranes coupled with the successful reception of new and existing foodservice products at the National Restaurant Show validate the strength of our offerings and underscore the significant competitive advantage created by delivering high-quality, innovative products,” said Glen Tellock, Manitowoc’s chairman and CEO. “Despite the slowing global growth environment and some market-specific headwinds, we remain confident in our updated 2012 outlook and will continue to support our strategic initiatives to position the business for long-term growth and success.”
Crane Segment Results
Second-quarter 2012 net sales in the crane segment were $610.7 million, up from $554.8 million in the second quarter of 2011, driven primarily by continued growth in the Americas region, as well as sustained demand in most emerging markets. The 10.1 percent sales growth was achieved in spite of a negative $32 million impact from currency exchange.
Crane segment operating earnings for the second quarter of 2012 were $48.0 million, up 47.7 percent compared to $32.5 million in the same period last year. This resulted in an operating margin of 7.9 percent for the second quarter of 2012, up from 5.9 percent in the same period in 2011. The year-over-year increase in margin was due to leverage of the higher sales volume and operational efficiencies that were partially offset by material cost increases, incremental engineering expense, plus costs associated with the startup of the new manufacturing facility in Brazil and ERP deployments in France, Brazil, and Crane Care. Crane segment backlog totaled $944 million as of June 30, 2012, a 13 percent increase from $839 million in the prior-year quarter. Second-quarter 2012 orders of $629 million were 7.0 percent higher than the second quarter of 2011.
“We maintained solid momentum during the second quarter in our Crane segment, experiencing strong order intake, a growing backlog, and further margin expansion. Similar to the previous quarter, the Americas and most emerging markets demonstrated positive momentum, while demand in Europe and China remained challenging,” Tellock explained. “In addition, we saw varied demand levels across our product categories, with large rough-terrain cranes, all-terrain cranes, and boom trucks contributing positively to the second-quarter performance, while crawlers and tower cranes experienced modest demand. Overall, the level of activity we have experienced in the first half of this year supports our assertion that 2012 will be a year of sustained growth.”
For the full-year 2012, Manitowoc expects:
■ Crane revenue – 10 to 15% year-over-year growth
■ Crane operating earnings – 30 to 40% year-over-year increase
■ Foodservice revenue – mid single-digit percentage growth, (previously high single digits)
■ Foodservice operating earnings – 10 to 15% year-over-year increase
■ Capital expenditures – approximately $80 million
■ Depreciation & amortization – approximately $120 million
■ Interest expense – range of $125 to $130 million, (previously $116 to $121 million)
■ Amortization of deferred financing fees – approximately $10 million
■ Debt reduction – target of $150 to $200 million, which is expected to reduce total leverage by more than one turn