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In a statement, chairman and chief executive officer, Glen Tellock said, "Despite lower sales and operating earnings, cash flow improved as a result of working-capital reductions, operational improvements, and cost reductions that we have implemented over the past year. Our cash flow from operations of $198 million during the third quarter enabled further progress toward our aggressive debt reduction goals. Thus far in 2009, we have reduced our debt by $262 million."
Third Quarter Results
The Manitowoc, Wisconsin-based company posted a net loss of $17.7 million, or $0.14 per share for the third quarter, narrower than $26.1 million, or $0.20 per share in the prior-year quarter. Loss from continuing operations for the quarter narrowed to $13.2 million or $0.10 per share, compared to a loss of $37.7 million or $0.29 per share in the year-ago quarter.
The results for the latest quarter primarily include $8.3 million or $0.06 per share of restructuring charges, while the year-ago quarter included $128.9 million or $0.99 per share of loss on currency hedges related to the company's acquisition of British restaurant-equipment maker Enodis Plc in October 2008.
Excluding unusual items, adjusted loss from continuing operations for the quarter was $4.9 million or $0.04 per share, compared to adjusted earnings of $92.7 million, or $0.71 per share in the year-ago quarter.
On average, fourteen analysts polled by Thomson Reuters expected the company to earn $0.08 per share for the third quarter. Analysts' estimate typically excludes special items.
Net sales for the quarter dropped 20% to $881.5 million from $1.11 billion in the same quarter last year, and missed analysts' consensus estimate of $934.36 million. The decline in sales was attributable to a 52% drop in crane sales, partially offset by the additional revenues related to the acquisition of Enodis.
Segmental Details
The company operates in two core segments, the cranes and commercial foodservice equipment. Earlier, the company sold its marine segment, effective December 2008, for about $120 million.
Crane and related products sales plunged 52% to $479.5 million from the year-ago quarter's $991.0 million. Segment operating earnings dropped to $20.8 million from $139.0 million last year. As of the end of the third quarter, crane segment backlog totaled $667 million, down 26% from $901 million at the end of the year-ago quarter.
Sales for foodservice equipments soared to $402.0 million from $115.8 million a year ago, primarily due to acquisition of Enodis. On a pro-forma basis, foodservice revenues decreased 23%. Segment operating earnings were $58.9 million, up from $18.4 million in the same quarter last year, and operating margins increased 260 basis points to 14.1%. The company noted that foodservice integration is on track, and synergies are pacing ahead of schedule.
Other Metrics
Operating earnings for the third quarter plunged to $47.6 million from $140.6 million in the same quarter last year, and gross profit was $201.5 million, down from $243.7 million in the prior-year quarter.
Engineering, selling and administrative expenses grew to $132.7 million from $98.7 million in the comparable quarter a year ago, while cost of sales was $680.0 million, down from $863.1 million in the year-ago quarter. The prior-year results also included a loss on currency hedges of $198.4 million.
Nine-Month Highlights
For the nine-month period, the company reported a net loss of $692.0 million or $5.31 per share, compared to net earnings of $210.4 million or $1.60 per share in the prior-year period. Loss from continuing operations for the period were $633.1 million or $4.86 per share, compared to earnings of $178.7 million or $1.36 per share in the year-ago period.
Excluding special items, net earnings from continuing operations plunged to $42.9 million or $0.33 per share from $309.1 million or $2.35 per share in the comparable period a year ago.
Net sales for the year-to-date period declined to $2.94 billion from $3.29 billion in the same period last year.
Looking Ahead.........
"We continue to focus on strengthening the business during this challenging economic decline. Our top priorities are to reduce debt, flawlessly integrate our foodservice business, and restructure our Crane operations for recovery. We have had considerable success in all three areas, so we are well positioned to resume our long-term growth trends as the world economy improves," Tellock added.
The company also reaffirmed its full-year debt reduction target of $450 million.
Stock Quote
MTW closed Thursday's regular trading session at $10.45, up $0.99 or 10.47% on a volume of 8.64 million shares, higher than the three-month average volume of 6.16 million shares. However, in the after hours trading, the stock lost $0.75 or 7.18% to $9.70. In the past 52-week period, the stock has been trading in a broad range of $2.34 to $12.24.
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