Nearly $52m of interest payments, a $36.8m hit due to changes in accounting for goodwill and a $25.5m write-off on the sale of Manitowoc Boom Trucks contributed to Manitowoc Company Inc making a net loss in 2002.
A host of special items as the company reorganises turned what would have been $49.2m net profit for the year to 31 December 2002 into a loss of $20.5m.
Other special items in the results announced on 10 February included a $7.7m provision for restructuring the crane operations Fourth quarter sales for the cranes-to-ice machines group were up 46% to $400.4m, primarily due to the addition of Grove during the year. Full year sales for the group were up 34% to $1.41bn.
Crane operations contributed sales of $724.2m for the year, compared with $453.2m in 2001. In the fourth quarter, crane sales were up 70% to $233.0m, up from $137.2m in 2001.
Manitowoc Crane Group’s order backlog stood at $133.8m at year-end.
Profitability of the crane segment was down a little for the year, and significantly in the fourth quarter. Operating profit from cranes for the full year – before amortisation and restructuring charges – fell from 2001’s $64.3m to $61.0m. Fourth quarter earnings in 2002 were $8.2m, compared with $17.7m in fourth quarter 2001.
‘The economy and certain of our markets have been a challenge,’ said group chairman and chief executive officer Terry Growcock. ‘We are experiencing some pressure in our Crane segment. However, our Foodservice and Marine segments achieved both revenue and operating earnings increases.’
He added: ‘Declining demand for crawler cranes adversely affected earnings and operating margins throughout the fourth quarter. Worldwide demand for tower cranes and other lifting solutions remained strong. This somewhat offset the crawler crane decline and showed the strength of our strategy to create both geographic and product diversity. As we move into 2003, we will continue to align our crane businesses to take advantage of cross-selling opportunities as well as purchasing, operations, and distribution efficiencies. We are well on our way to achieving our goal to create one unified, world-class crane organisation to serve customers efficiently around the world.’
Looking ahead, Growcock said: ‘We believe that 2003 will begin slowly and improve modestly in the second half. We expect that the same economic and market issues that affected the construction and crane industry in 2002 will persist in 2003.’
Justifying the relative lack of benefit accruing from major acquisitions, Growcock said: ‘Over the past two years, Manitowoc has invested approximately $575m in the acquisitions of Potain and Grove. Since that time, demand, particularly for US crawler crane applications, has softened. This has not diminished the strategic advantages we’ve attained from these acquisitions.
The group’s results failed to meet the forecasts of Wall Street analysts and the shares fell to below $20, roughly half the price they were when the Grove deal concluded last year.
