Manitowoc Posts A Net Loss

The Manitowoc Company, Inc. (MTW: 10.85 -0.42 -3.73%) reported a net loss of 7 cents per share for the fourth quarter of 2009, compared to the Zacks Consensus Estimate of a net profit of 3 cents per share and prior-year earnings of 46 cents per share.

Revenue in the quarter declined 31.1% to $838.7 million from $1,216.6 million in the fourth quarter of 2008. The year-over-year decline in sales was primarily driven by lower volumes in the Crane segment. The Foodservice segment benefited from the acquisition of Enodis plc.

The Crane segment’s sales fell 49.1% to $480.2 million in the quarter from $943.6 million in the fourth quarter of 2008, as a weak global crane market led to depressed sales across product lines.

As of December 31, 2009, the Crane segment backlog stood at $573 million, which was down 14.1% from a backlog of $667 million at the end of third quarter. However, the company said that there was stabilization in the form of net positive order flow. Though it does not see a recovery in the U.S. or European markets, Manitowoc is witnessing growth in Asia, Latin America, Africa and the Middle East.

The Foodservice segment posted net sales of $358.5 million for the fourth quarter of 2009 compared to $273.0 million in fourth quarter of 2008. The year-over-year increase in segment sales was a result of Enodis acquisition on October 27, 2008.

The acquisition of the British kitchen equipment maker Enodis Plc has strengthened Manitowoc’s position significantly in the Foodservice business. Apart from expanding its cold-side businesses, the company gained entry into two major new market segments (hot foodservice and food retail equipment) through this acquisition.

In addition, the company expects to realize more than $80 million in savings and revenue synergies by 2011. It realized over $35 million of integration synergies in 2009.

Despite lower sales and operating earnings, the company continued to focus on improving its cash flows through working-capital reductions. Manitowoc generated $339.5 million in cash flow from operations and reduced debt by $475 million during 2009.

In total, the company repaid approximately $775 million of debt since the completion of Enodis acquisition. The company expects to further reduce its debt by at least $200 million in 2010.