UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
----------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------ ------------
Commission File Number 1-11978
----------
The Manitowoc Company, Inc.
---------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-0448110
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
700 E. Magnolia Avenue, Suite B, Manitowoc, Wisconsin 54220
---------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(414) 684-4410
---------------------------------------------------------------
(Registrant's telephone number, including area code)
The former fiscal year-end of the Registrant was the Saturday which
fell upon or was nearest to June 30 of each calendar year. The new
fiscal year-end of the Registrant is December 31 of each calendar
year. A transition report on Form 10-Q will be filed by the
Registrant covering the transition period from July 3, 1994 through
December 31, 1994.
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes ( X ) No ( )
The number of shares outstanding of the Registrant's common
stock, $.01 par value, as of October 31, 1994, the most recent
practicable date, was 7,673,725.
PART I. FINANCIAL INFORMATION
-------------------------------
Item 1. Financial Statements
- -----------------------------
THE MANITOWOC COMPANY, INC.
Consolidated Statement of Earnings
For the Quarter Ended September 30, 1994 and the 13 Weeks Ended October 2, 1993
(Unaudited)
(In thousands, except per-share data)
September 30, 1994 October 2, 1993
------------------ ---------------
Net Sales $ 66,039 $ 61,056
Costs And Expenses:
Cost of goods sold 47,719 44,280
Engineering, selling and
administrative expenses 12,231 10,742
--------- --------
Total 59,950 55,022
Earnings From Operations 6,089 6,034
Other Income (Expense):
Interest and dividend income 206 456
Other income (expense) (66) 38
--------- --------
Total 140 494
--------- --------
Earnings Before Taxes On Income 6,229 6,528
Provision For Taxes On Income 2,429 2,440
--------- --------
Net Earnings $ 3,800 $ 4,088
--------- --------
Net Earnings Per Share $ .49 $ .45
Dividends Per Share $ .25 $ .25
Average Shares Outstanding 7,816,570 9,126,327
<FN>
See accompanying notes which are an integral part of these statements.
THE MANITOWOC COMPANY, INC.
Consolidated Balance Sheet
September 30, 1994 and July 2, 1994
(In thousands, except per-share data)
-ASSETS-
(Unaudited) (Audited)
September 30, 1994 July 2, 1994
------------------ ------------
Current Assets:
Cash and cash equivalents $ 5,935 $ 15,094
Marketable securities 19,705 15,008
Accounts receivable 34,544 42,589
Inventories 31,981 31,240
Prepaid expenses and other 2,863 2,956
Future income tax benefits 10,770 10,770
--------- ---------
Total current assets 105,798 117,657
Intangibles and other-net 4,540 4,859
Property, plant and equipment:
At cost 181,325 179,011
Less accumulated depreciation (117,092) (115,679)
--------- ---------
Property, plant and equipment-net 64,233 63,332
--------- ---------
TOTAL $ 174,571 $ 185,848
--------- ---------
-LIABILITIES AND STOCKHOLDERS' EQUITY-
Current Liabilities:
Accounts payable and accrued expenses $ 53,640 $ 53,784
Income taxes payable 2,419 4,859
Product warranties 5,222 4,967
--------- ---------
Total current liabilities 61,281 63,610
Non-Current Liabilities:
Product warranties 3,129 3,129
Deferred income taxes 1,344 1,310
Deferred employee expenses 17,821 17,688
Deferred income 3,237 3,811
Other 1,991 2,441
--------- ---------
Total non-current liabilities 27,522 28,379
--------- ---------
Stockholders' Equity:
Common stock (10,887,847 shares
issued at both dates) 109 109
Additional paid-in capital 31,115 31,115
Cumulative foreign currency
translation adjustments (268) (410)
Retained earnings 136,314 134,433
Treasury stock at cost (3,214,122 and
2,805,000 shares) (81,502) (71,388)
--------- ---------
Total stockholders' equity 85,768 93,859
--------- ---------
TOTAL $ 174,571 $185,848
--------- ---------
<FN>
See accompanying notes which are an integral part of these statements.
THE MANITOWOC COMPANY, INC.
Consolidated Statement of Cash Flows
For the Quarter Ended September 30, 1994 and the 13 Weeks Ended October 2, 1993
(In thousands, except per-share data)
(Unaudited)
September 30, 1994 October 2, 1993
------------------ ----------------
Cash Flows From Operations:
Net earnings $ 3,800 $ 4,088
Non-cash adjustments to income:
Depreciation and amortization 1,783 1,426
Deferred income taxes 34 44
Changes in operating assets and liabilities:
Accounts receivable 8,045 9,504
Refundable income taxes 0 2,165
Inventory (741) 2,475
Other current assets 93 0
Current liabilities (8,378) (6,628)
Non-current liabilities (317) 400
Deferred income (574) (576)
Non-current assets 293 180
---------- ----------
Net cash provided by operations 4,038 13,078
Cash Flows From Investing:
Purchase of temporary investments - net (4,697) (18,257)
Capital expenditures (2,572) (766)
---------- ----------
Net cash used for investing (7,269) (19,023)
Cash Flows From Financing:
Dividends paid (1,920) (2,280)
Proceeds from revolving line of credit - net 6,000 0
Treasury stock purchases (10,114) (2,558)
---------- ----------
Net cash used for financing (6,034) (4,839)
Effect of exchange rate changes on cash 106 (7)
---------- ----------
Net decrease in cash and cash equivalents (9,159) (10,791)
Balance at beginning of year 15,094 37,347
---------- ----------
Balance at end of period $ 5,935 $ 26,556
---------- ----------
Supplemental Cash Flow Information:
Interest paid $ 70 $ 32
Income taxes paid $ 4,790 $ 205
<FN>
See accompanying notes which are an integral part of these statements.
THE MANITOWOC COMPANY, INC.
Notes to Unaudited Consolidated Financial Statements
For the Quarter Ended September 30, 1994 and the 13 Weeks Ended October 2, 1993
(Unaudited)
Note 1.
In August 1994, the Board of Directors approved a change in
the Company's fiscal year-end to December 31. In the
opinion of management, the accompanying unaudited condensed
financial statements contain all adjustments, representing
normal recurring accruals, necessary to present fairly the
results of operations for the quarter ended September 30,
1994 and the thirteen weeks ended October 2, 1993, the
financial position at September 30, 1994 and the changes in
the cash flows for the quarter ended September 30, 1994 and
the thirteen weeks ended October 2, 1993. The interim
results are not necessarily indicative of results for a full
year and do not contain information included in the
Company's annual consolidated financial statements and
notes.
Note 2.
The components of inventory at September 30, 1994 and July
2, 1994 are summarized as follows (in thousands):
September 30, 1994 July 2, 1994
------------------ -------------
Components:
Raw materials $ 11,063 $ 11,275
Work-in-process 21,144 19,463
Finished goods 20,159 20,787
--------- --------
Total inventories at FIFO costs 52,366 51,525
Excess of FIFO costs
over LIFO value (20,385) (20,285)
--------- --------
Total inventories $ 31,981 $ 31,240
Inventory is carried at lower of cost or market using the
first-in, first-out (FIFO) method for 64% and 61% of total
inventory for September 30, 1994 and July 2, 1994,
respectively. The remainder of the inventory is costed
using the last-in, first-out (LIFO) method.
At September 30, 1994 and July 2, 1994, the FIFO cost of
finished goods held for lease was $44 and $249,
respectively. The cost of this inventory is amortized to
cost of sales as a percentage of lease revenues.
Note 3.
On September 8, 1992, the Board of Directors authorized the
Company to repurchase up to 1.5 million shares of its common
stock. In addition, on January 11, 1994 and February 1,
1994, the Board of Directors authorized the repurchase of an
additional 500,000 and 1,000,000 shares, respectively. Such
repurchases will be in open market or privately negotiated
purchases, as the Company may determine from time to time.
As of September 30, 1994, a total of 2,647,122 shares were
purchased pursuant to these authorizations.
Note 4.
The United States Environmental Protection Agency ("EPA")
has identified the Company as a potentially responsible
party ("PRP") under the Comprehensive Environmental Response
Compensation and Liability Act ("CERCLA"), liable for the
costs associated with investigating and cleaning up
contamination at the Lemberger Landfill Superfund Site ("the
Site") near Manitowoc, Wisconsin.
Eleven of the potentially responsible parties have formed a
group (the Lemberger Site Remediation Group, or "LSRG") and
have successfully negotiated with the EPA and Wisconsin
Department of Natural Resources to settle the potential
liability at the Site and fund the cleanup. Approximately
150 PRP's have been identified as having shipped substances
to the Site.
Recent estimates indicate that the total cost to clean up
the Site could be as high as $25 million, however, the
ultimate remediation methods and appropriate allocation of
costs for the Site are not yet final.
Although liability is joint and several, the Company's
percentage share of liability is estimated to be 5% of the
total cleanup costs, but could increase to 15% if no
participation agreements are made between the LSRG and any
other PRP's.
In connection with this matter, the Company expensed $3.0
million in prior years for its estimated portion of the
cleanup costs. In addition, the Company has notified its
insurance carrier requesting reimbursement of incurred and
future costs at the Site. Settlement of this claim is
uncertain; a recent Wisconsin Supreme Court decision did not
require an insurer to pay similar costs. Any recoveries
from the insurance carrier will be recognized when received.
The Company is involved in various other legal actions
arising in the normal course of business. After taking into
consideration legal counsel's evaluation of such actions, in
the opinion of management, ultimate resolution is not
expected to have a material adverse effect on the
consolidated financial statements.
As of September 30, 1994, 37 product related lawsuits were
pending. Of these, twelve occurred between 1985 and 1990
when the Company was completely self-insured. The remaining
lawsuits occurred subsequent to June 1, 1990, at which time
the Company has insurance coverages ranging from a $5.5
million self-insured retention with a $10.0 million limit on
the insurer's contribution in 1990, to the current $1.0
million self-insured retention and $16.0 million limit.
Product liability reserves at September 30, 1994 are $7.5
million; $3.8 million reserved specifically for the 37 cases
referenced above, and $3.7 million for incurred but not
reported claims. These reserves were estimated using
actuarial methods. The highest current reserve for a non-
insured claim is $.4 million, and $.9 million for an insured
claim. Based on the Company's experience in defending
itself against product liability claims, management believes
the current reserves are adequate for estimated settlements
on aggregate self-insured claims.
Note 5.
Certain reclassifications have been made to the financial
statements of the prior year to conform to the presentation
for the quarter ended September 30, 1994.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Financial Condition at September 30, 1994
- -----------------------------------------
The Company's financial condition remains strong and has not changed
materially during the past quarter. Cash and marketable securities of
$25.6 million are adequate to meet the Company's liquidity
requirements for the foreseeable future, including payments on the
line of credit and the stock repurchases authorized by the Board of
Directors.
Results of Operations for the 13 Weeks Ended September 30, 1994 and
October 2, 1993
- --------------------------------------------------------------------
Net sales and earnings from operations by business segment for the
quarter ended September 30, 1994 and the thirteen weeks ended October
2, 1993 are shown below (in thousands):
September 30, 1994 October 2, 1993
------------------ ---------------
NET SALES:
Cranes and related products $ 35,986 $ 31,959
Foodservice products 26,907 24,768
Marine 3,146 4,329
-------- -------
Total $ 66,039 $ 61,056
EARNINGS (LOSS) FROM OPERATIONS:
Cranes and related products 1,923 1,059
Foodservice products 6,356 5,984
Marine (544) 197
General corporate expense (1,646) (1,206)
-------- -------
Total $ 6,089 $ 6,034
For the three months ended September 30, 1994, consolidated sales
increased 8.2% over the comparable period a year ago. Net earnings
for the quarter were $3.8 million, or 49 cents per share compared to
$4.1 million, or 45 cents per share last year. The improved first
quarter sales were the result of increases in our boom truck and
Foodservice divisions and the acquisition of Femco Machine Company in
the third quarter of Fiscal 1994. The decline in net earnings was the
result of the return to a more normal seasonal pattern in the Marine
business and a slightly higher tax rate of 39 percent for the quarter
compared with 37 percent a year ago.
Sales and operating earnings for Cranes and Related Products increased
12.6%, and 81.7%, respectively for the first quarter compared to last
year. These improvements were the result of increased productivity at
Manitex, which increased sales 175% compared to last year when it was
experiencing shipping delays caused by its plant relocation. Also
contributing to the increase was the previously mentioned acquisition
of Femco Machine Company.
A strong domestic market in the Foodservice division has increased
sales and operating earnings 8.6% and 6.2%, respectively, compared to
the first quarter of last year. Foodservice continues to see strong
demand for their recently introduced B-series ice machines.
Sales for the Marine segment were down 27.3% compared to the
comparable period a year ago. The operating loss for the quarter was
$0.5 million compared to operating earnings of $0.2 million last year.
Last year's results were unusually high because of a ship grounding
that occurred in the first quarter. Ship repair and maintenance work
are typically lightest during the shipping season which currently
conforms to Manitowoc's first and second fiscal quarters (July-
December).
PART II. OTHER INFORMATION
-----------------------------
Item 6. Exhibits and Reports on form 8-K
---------------------------------
(a) Exhibits: See exhibit index following the signatures on
this Report, which is incorporated herein by reference.
(b) Reports on Form 8-K: During the quarter ended
September 30, 1994, a Report on Form 8-K dated August
9, 1994 was filed to report the Company's change in
fiscal year-end from the Saturday closest to June 30 of
each calendar year to December 31 of each calendar
year.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
THE MANITOWOC COMPANY, INC.
(Registrant)
/s/ Fred M. Butler
------------------------
Fred M. Butler
Chief Executive Officer
/s/ Robert R. Friedl
------------------------
Robert R. Friedl
Chief Financial Officer
/s/ E. Dean Flynn
------------------------
E. Dean Flynn
Secretary
November 10, 1994
THE MANITOWOC COMPANY, INC.
EXHIBIT INDEX
TO FORM 10-Q
FOR QUARTERLY PERIOD ENDED
SEPTEMBER 30, 1994
Exhibit Filed
No. Description Herewith
- ------- ----------- --------
27 Financial Data Schedule X