03.08.2004

Manitowoc Crane sales up 24 percent in first half

The Manitowoc Company has reported strong increases in sales and earnings for the quarter ended June 30, 2004. Net sales increased 27 percent to $526.2 million, from $413.8 million during the same period last year. Net earnings were $15.3 million, up twelve-fold from earnings of $1.3 million, for the same period in 2003.

For the half year Sales revenues for the group were $938 million up 21 percent on last years $774 million. Net income for this same period jumped to $21.5 million from $6.5 million an increase of 330 percent.

Earnings from continuing operations were $14.8 million, compared with $5.6 million, 2003. Exceptional items primarily related to restructuring and plant consolidations in the Crane segment had a major impact on the second quarter’s results in 2003, while exceptionals this year so far are minimal.

Crane sales were $331.8 million for the quarter, increasing 34 percent from $246.9 million for the same period last year. Operating earnings for the quarter nearly doubled to $18.0 million, from $9.3 million last year. This strong earnings performance was due, according to the company, to improved global market penetration and increased demand in a number of international markets for mobile telescopic cranes, tower cranes, and boom trucks, which offset weak demand for crawler cranes in North America.

As of June 30, total crane backlog was $331 million, twice last years level of $165 million.

Crane sales for the six months were $583 million a rise of 24 percent from the first half of 2003. Operating income for the same period rose by 65 percent to $28 million.

"Global demand for our broader crane product offering continues to improve, especially in parts of Europe, Asia, and Australia," said Terry D. Growcock, Manitowoc's chairman and chief executive officer. "and our recent acquisitions have contributed to positive EVA in the Crane segment despite the still challenging crawler crane markets. It's clear that our acquisitions as well as our restructuring and consolidation efforts are making a difference. Our global market penetration and broader product line has enabled us to deliver improved earnings despite continued softness in the U.S. crawler crane market and significant increases in raw material prices."

Manitowoc also took the opportunity with their results announcement to state a few core objectives, two relating to Cranes are:

-Increase crane sales and market penetration globally. Manitowoc's
Strong crane performance during the quarter indicates that it’s expanded
Product line, new-product development, global distribution, and product
support strategies are taking hold. Additionally, alliances with partners such as Kobelco and Shuttlelift help to further expand core product offerings globally

-Integrate crane operations. Manitowoc has completed the integration of its Potain and Grove acquisitions, as well as its consolidation and restructuring efforts to improve its cost structure by $36 million. In addition, the company completed its divestitures of certain non-core operations, including the aerial work platform business. In the future, the company will focus on continued sales and marketing efforts to penetrate its expanded markets with its broader product line

Vertikal Comment

While a strong performance was expected from Manitowoc, given the global economic recovery, strong demand in China and an improving crane market. The strength of the growth will surprise many in the industry, If Manitowoc can maintain this performance in the second half and order intake would seem to support it, it will put them up with Liebherr in global crane market share terms and well ahead of Terex who had been closing on them.