UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
--------------------
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)
500 So. 16th Street, Manitowoc, Wisconsin 54220
- --- ---------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(920) 684-4410
------------------------------------------------------------------
(Registrant's telephone number, including area code)
(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 April 30, 1999, the most recent practicable date, was
25,964,700.
PART I. FINANCIAL INFORMATION
----------------------------------------------------------
Item 1. Financial Statements
- --------------------------------------
THE MANITOWOC COMPANY, INC.
Consolidated Statements of Earnings
For the First Quarter of Calendar Years 1999 and 1998
(Unaudited)
(In thousands, except per-share and average shares data)
March 31, 1999 March 31, 1998
----------------------- ---------------------
Net Sales $ 184,189 $ 154,139
Costs And Expenses:
Cost of goods sold 131,629 110,667
Engineering, selling and
administrative expenses 29,910 25,887
----------- ---------
Total 161,539 136,554
Earnings From Operations 22,650 17,585
Other Income (Expense):
Interest expense (2,708) (2,408)
Interest and dividend income 72 (9)
Other expense (290) (348)
------------ ---------
Total (2,926) (2,765)
------------ ---------
Earnings Before Taxes
On Income 19,724 14,820
Provision For Taxes On Income 7,296 5,483
------------ ---------
Net Earnings $ 12,428 $ 9,337
------------ ---------
Net Earnings Per Share - Basic $ .48 $ .36
Net Earnings Per Share - Diluted $ .47 $ .36
Dividends Per Share $ .075 $ .075
Average Shares Outstanding - Basic 25,962,372 25,911,848
Average Shares Outstanding - Diluted 26,166,099 26,175,801
See accompanying notes which are an integral part of these statements.
THE MANITOWOC COMPANY, INC.
Consolidated Balance Sheets
As of March 31, 1999 and December 31, 1998
(Unaudited)
(In thousands, except share data)
-ASSETS-
March 31, 1999 Dec. 31, 1998
Current Assets: ------------------------------------
Cash and cash equivalents $ 14,250 $ 10,582
Marketable securities 1,858 1,834
Accounts receivable 86,205 69,504
Inventories 85,271 81,978
Prepaid expenses and other 1,483 5,297
Future income tax benefits 21,682 21,682
------------- ------------
Total current assets 210,749 190,877
Intangibles assets-net 215,297 184,926
Other assets 15,790 11,628
Property, plant and equipment:
At cost 213,679 211,360
Less accumulated depreciation (119,260) (117,777)
--------- ---------
Property, plant and equipment-net 94,419 93,583
--------- ---------
TOTAL $ 536,255 $ 481,014
--------- ---------
-LIABILITIES AND STOCKHOLDERS' EQUITY-
Current Liabilities:
Accounts payable and accrued expenses $ 131,708 $123,534
Current portion of long-term debt 6,256 10,968
Short term borrowings 60,000 48,500
Product warranties 15,142 15,110
--------- ---------
Total current liabilities 213,106 198,112
Non-Current Liabilities:
Long-term debt, less current portion 109,824 79,834
Product warranties 4,589 4,723
Postretirement health benefits obligations 19,805 19,705
Other 6,070 6,088
--------- ---------
Total non-current liabilities 140,288 110,350
--------- ---------
Stockholders' Equity:
Common stock (36,746,483 shares issued at both dates) 245 245
Additional paid-in capital 31,041 31,029
Accumulated other comprehensive income (382) (212)
Retained earnings 233,167 222,687
Treasury stock at cost (10,781,783 and
10,789,616 shares) (81,210) (81,197)
--------- ---------
Total stockholders' equity 182,861 172,552
--------- ---------
TOTAL $ 536,255 $ 481,014
--------- ---------
See accompanying notes which are an integral part of these statements.
THE MANITOWOC COMPANY, INC.
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 1999 and 1998
(In thousands)
(Unaudited)
March 31, 1999 March 31, 1998
---------------------------------------
Cash Flows From Operations:
Net earnings $ 12,428 $ 9,337
Non-cash adjustments to income:
Depreciation and amortization 4,009 3,436
Deferred financing fees 141 88
Loss on sale of fixed assets 190 27
Changes in operating assets and liabilities:
Accounts receivable (11,501) (22,861)
Inventories 1,681 (18,286)
Other current assets 3,859 945
Current liabilities 2,723 7,107
Non-current liabilities 80 (211)
Non-current assets (4,419) (791)
---------- ----------
Net cash provided by (used for) operations 9,191 (21,209)
Cash Flows From Investing:
Purchase of temporary investments - net (24) (14)
Business acquisition (37,662) --
Proceeds from sale of property, plant,
and equipment 538 218
Capital expenditures (3,206) (4,224)
---------- ----------
Net cash used for investing (40,354) (4,020)
Cash Flows From Financing:
Dividends paid (1,947) (1,944)
Treasury stock issued -- 97
Proceeds (payments) on long-term borrowings 25,278 (3,998)
Change in short-term borrowings-net 11,500 29,900
---------- ----------
Net cash provided by financing 34,831 24,055
Effect of exchange rate changes on cash -- 8
---------- ----------
Net increase (decrease) in cash
and cash equivalents 3,668 (1,166)
Balance at beginning of period 10,582 11,888
---------- ----------
Balance at end of period $ 14,250 $ 10,722
---------- ----------
Supplemental cash flow information:
Interest paid $ 2,207 $ 2,291
Income taxes paid $ 2,252 $ 3,766
See accompanying notes which are an integral part of these statements.
THE MANITOWOC COMPANY, INC.
Consolidated Statements of Comprehensive Income
For the Three Months Ended March 31, 1999 and 1998
(In thousands)
(Unaudited)
March 31, 1999 March 31, 1998
-------------------- -------------------
Net earnings $ 12,428 $ 9,337
Other comprehensive income:
Foreign currency translation
adjustments (170) 302
------------ -----------
Comprehensive income $ 12,258 $ 9,639
------------ -----------
See accompanying notes which are an integral part of these statements.
THE MANITOWOC COMPANY, INC.
Notes to Unaudited Consolidated Financial Statements
For the Three Months Ended March 31, 1999 and March 31, 1998
(Unaudited)
Note 1. 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, cash flows and comprehensive
income for the quarters ended March 31, 1999 and 1998 and the
financial position at March 31, 1999. 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 for the year ended December 31,
1998. It is suggested that these financial statements be read in
conjunction with financial statements and the notes thereto
included in the Company's latest annual report.
Note 2. The components of inventory at March 31, 1999 and December 31,
1998 are summarized as follows (dollars in thousands):
March 31, 1999 Dec. 31, 1998
------------------------------------
Components:
Raw materials $ 38,233 $ 32,564
Work-in-process 25,672 27,882
Finished goods 42,457 42,304
--------- --------
Total inventories at FIFO costs 106,352 102,750
Excess of FIFO costs
over LIFO value (21,081) (20,772)
--------- --------
Total inventories $ 85,271 $ 81,978
Inventory is carried at lower of cost or market using the first-in, first-
out (FIFO) method for 57% and 58% of total inventory at March 31, 1999 and
December 31, 1998, respectively. The remainder of the inventory is costed
using the lower of the last-in, first-out (LIFO) method or market.
Note 3. 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.
Approximately 150 PRP's have been identified as having shipped substances
to the Site. 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 the Wisconsin Department of Natural Resources
to settle the potential liability at the Site and fund the cleanup.
Recent estimates indicate that the total cost to clean up the Site could be
as high as $30 million, however, the ultimate 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 11% of the total
cleanup costs. Prior to December 31, 1996, the Company accrued $3.3
million in connection with this matter. There were no expenses incurred
for the quarters ended March 31, 1999 and 1998. Remediation work at the
Site has been completed, with only long-term pumping and treating of ground
water and Site maintenance remaining. The remaining estimated liability
for this matter, included in other current and noncurrent liabilities at
March 31, 1998, is $1.1 million.
As of March 31, 1999, 26 product-related lawsuits were pending. Of these,
two 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 $25.0 million limit on the insurer's contribution.
Product liability reserves at March 31, 1999 are $9.3 million; $4.1 million
reserved specifically for the 38 cases referenced above, and $5.2 million
for incurred but not reported claims. These reserves were estimated using
actuarial methods. The highest current reserve for a non-insured claim is
insignificant, and $0.8 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. Any recoveries from
insurance carriers are dependent upon the legal sufficiency of claims and
the solvency of insurance carriers.
It is reasonably possible that the estimates for environmental remediation
and product liability costs may change in the near future based upon new
information that may arise. Presently, there is no reliable means to
estimate the amount of any such potential changes.
The Company is also 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.
Note 4. During the fourth quarter of 1996, the Company's decision to
consolidate and close walk-in refrigeration plants located in
Iowa and Tennessee resulted in a $1.2 million charge to earnings
in the Foodservice segment. The charge includes a write-down to
the estimated net realizable values of the assets being abandoned
and takes into consideration future holding costs and costs
related to the sale of the properties. During the first quarter
of 1999, charges against the reserve were insignificant. During
the first quarter of 1998, $0.1 million was charged against the
reserve.
Assets currently held for sale include land and improvements, buildings,
and certain machinery and equipment at the "Peninsula facility" located in
Manitowoc, Wisconsin. The current carrying value of these assets, and the
assets mentioned above, as well as other insignificant assets, determined
through independent appraisals, is approximately $3.8 million and is
included in other assets. The future holding costs, included in accounts
payable and accrued expenses and in other non-current liabilities, consist
primarily of utilities, security, maintenance, property taxes, and
insurance. These reserves also include estimates for potential
environmental liabilities on the Peninsula location. For the first quarters
of 1999 and 1998, the charges against the reserve were insignificant.
Note 5. On February 17, 1999, the Company's board of directors authorized
a 3-for-2 stock split of the Company's shares in the form of a
50% stock dividend payable April 1, 1999 to shareholders of
record on March 1, 1999. As a result of the stock split
8,654,900 shares were issued. All references in these financial
statements to average number of shares outstanding, earnings per
share amounts, and market prices per share of common stock have
been restated to reflect the split. The Company also split its
common stock on a 3-for-2 basis on June 30, 1997 and July 2,
1996.
Note 6. The following is a reconciliation of the average shares
outstanding used to compute basic and diluted earnings per share.
There is no earnings impact for the assumed conversions of the
stock options in each of the quarters.
Quarter Ended March 31
----------------------------------------------------------------------
1999 1998
----------------------------------------------------------------
Per Share Per Share
Shares Amount Shares Amount
Basic earnings per share 25,962,372 $ .48 25,911,848 $ .36
Effect of dilutive securities stock options 203,727 263,953
Diluted earnings per share 26,166,099 $ .47 26,175,801 $ .36
Note 7. On January 11, 1999, the Company acquired all of the issued and
outstanding shares of Purchasing Support Group (PSG). The new
operation, renamed Manitowoc Beverage Systems, Inc. (MBS), a
four-member beverage service organization, will provide full-
service parts, components, and dispenser systems support to
bottlers in the beverage industry. MBS is made up of companies
that have been serving soft-drink bottling operations throughout
the United States since the 1960's with a variety of equipment
services for beverage dispensing systems. MBS operates in the
Northeast, Atlantic Coast, Southeast, Central, and Western United
States.
The aggregate consideration paid by the Company for the issued
and outstanding shares of PSG was $42,854 which is net of cash
acquired of $732 and includes direct acquisition costs of $394
and assumed liabilities of $5,192. The acquisition was financed
through the Company's existing credit facility. The purchase
price for PSG is subject to a post-closing adjustment based upon
net worth as set forth in the Purchase and Sale Agreement. The
Company has not recorded any adjustment to the purchase price
based upon the post-closing adjustment as of March 31, 1999.
The acquisition has been recorded using the purchase method of accounting.
The cost of the acquisition has been allocated on the basis of the
estimated fair values of the assets acquired and the liabilities assumed.
The preliminary estimate of the excess of the cost over the fair value of
the net assets acquired is $32,141 and is being amortized over 40 years.
The results of MBS's operations subsequent to the date of acquisition are
included in the Consolidated Statements of Earnings for the quarter ended
March 31, 1999.
On April 9, 1999, the Company acquired all of the issued and outstanding
shares of Kyees Aluminum, Inc., a leading supplier of cooling components
for the major suppliers of fountain soft drink beverage dispensers, for
$25,700 in cash. Kyees' aluminum "cold plates" are a key component used to
chill soft drink beverages in dispensing equipment. Located in La Mirada,
California, Kyees is a technology leader in manufacturing cold plate
equipment, in both quality and engineering design. The acquisition of
Kyees was financed through the Company's existing credit facility.
Note 8. On April 6, 1999, the Company amended and restated its existing
Credit Agreement (Agreement), with a group of banks in order to
increase the amount of funds available and to extend the
termination date to April 6, 2004. The amended and restated
Agreement provides for maximum borrowings of $300 million under
revolving loans and a letter of credit subfacility.
The Agreement includes covenants the most restrictive of which
require the maintenance of various debt and net worth ratios. An
annual commitment fee, calculated based upon the Company's
consolidated leverage ratio as defined by the Agreement, is due
on the unused portion of the facility quarterly. Borrowings
under the Agreement bear interest at a rate equal to the sum of a
base rate, or a Eurodollar rate, at the option of the Company,
plus an applicable percentage, as defined by the Agreement. The
base rate is equal to the greater of the Federal Funds rate in
effect on such day plus .5% or the prime rate in effect on such
day. Borrowings under the Agreement are not collateralized.
Note 9. The Company determines its segments based upon the internal
organization that is used by management to make operating
decisions and assess performance. Based upon this approach, the
Company has three reportable segments: Foodservice Equipment
(Foodservice), Cranes and Related Products (Cranes), and Marine
Operations (Marine).
Information about reportable segments and a reconciliation of total segment
sales and profits to the consolidated totals for the quarters ending March
31, 1999 and 1998 are summarized in Item 2, "Management's Discussion and
Analysis of Financial Condition and Results of Operations", to this report
on Form 10-Q. As of March 31, 1999 and December 31, 1998, the total assets
by segment were as follows:
March 31, 1999 Dec. 31, 1998
------------------- -----------------
Foodservice $305,673 $254,506
Cranes 175,837 178,470
Marine 11,276 7,023
General corporate 43,469 41,015
----------- -----------
Total $536,255 $481,014
Note 10. Certain reclassifications have been made to the financial
statements of prior periods to conform to the presentation for
1999.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations for the Quarters Ended March 31, 1999 and March 31,
1998
- ---------------------------------------------------------------------------
Net sales and earnings from operations by business segment for the quarter
ended March 31, 1999 and 1998 are shown below (in thousands):
March 31, 1999 March 31, 1998
------------------------------------------
NET SALES:
Foodservice equipment $ 84,289 $ 67,007
Cranes and related products 89,430 76,192
Marine 10,470 10,940
----------- ---------
Total $ 184,189 $154,139
EARNINGS (LOSS) FROM OPERATIONS:
Foodservice equipment $ 11,773 9,316
Cranes and related products 13,277 9,762
Marine 2,312 2,305
General corporate expense (2,992) (2,626)
Amortization (1,720) (1,172)
----------- ---------
Total 22,650 17,585
OTHER INCOME (EXPENSE) - NET (2,926) (2,765)
----------- ---------
EARNINGS BEFORE TAXES ON INCOME $ 19,724 $ 14,820
First quarter net earnings were $12.4 million, equal to 47 cents per share
(diluted), up 33% from the prior-year quarter when the company earned $9.3
million, or 36 cents per share (diluted). Net sales for the first three
months of 1999 totaled $184.2 million, compared with $154.1 million during
the same period the year before, an increase of 20%. The Company's crane
and foodservice equipment segments drove sales and earnings growth for the
quarter. Approximately half of the improvement in sales was driven by the
addition of USTC and MBS in the third quarter of 1998 and in the first
quarter of 1999, respectively. The remaining sales growth was due
primarily to increased volumes in the foodservice segment and the Company's
large crane operation. Most of the improvement in operating earnings for
the quarter was volume related and due to productivity gains in the
Company's large crane, boomtruck, walk-in and reach-in
refrigerator/freezer, and beverage dispenser operations, while the
remaining improvement was due to the Company's new acquisitions.
Foodservice equipment sales were $84.3 million for the quarter, up 26% from
the first quarter of 1998. Operating earnings increased 26% to $11.8
million, from $9.3 million in 1998. Manitowoc Ice sales and profits were up
from the first quarter of last year due to continued enthusiastic demand
for its "Q" Series Ice machines. Kolpak contributed to the increased
profits as a result of continuing strong off-season demand for its products
and improved margins over the first quarter of last year. Additionally,
SerVend contributed to the increase in earnings through strong sales
volumes in the first quarter of 1999.
First quarter sales for the Crane segment were $89.4 million, compared to
$76.2 million for 1998, an increase of 17%. Crane segment operating
earnings were $13.3 million, up 36% from the first quarter last year.
Conexpo, one of the world's largest construction equipment trade shows,
proved to be the highlight of our crane segment in the first quarter of
1999. At the end of March 1999, the crane operations posted a backlog of
more than $163 million - a record for the first quarter. In total, the
segment received orders for more than 30 cranes at the show totaling over
$25 million in sales. Manitowoc Cranes contributed the largest portion of
the increase in sales and earnings for the segment as well as the
additional revenues and earnings from USTC in the first quarter of 1999
versus the same quarter last year.
Marine segment sales and operating earnings for the first quarter were
$10.5 million and $2.3 million, respectively, compared with $10.9 million
and $2.3 million for the same period in 1998. The marine operations are
completing a very successful winter repair season for the U.S.-flagged
Great Lakes fleet. With 18 vessels docked at Sturgeon Bay and 17 vessels
wintering in Toledo and Cleveland, our shipyards serviced nearly half of
the Great Lakes fleet. Work is also beginning on the first hull sections
for the Mobil tank barge contract, which will keep our yards busy during
the traditionally slow summer months.
The effective tax rate for the comparable quarters remained unchanged at 37
percent.
Inventories and accounts receivable rose during the quarter in line with
volume increases and normal seasonal patterns.
Interest expense increased $0.3 million due to the increased debt following
the USTC and MBS acquisitions.
Financial Condition at March 31, 1999
- -----------------------------------------------
The Company's financial condition remains strong. Cash and marketable
securities of $16.1 million and future cash flows from operations are
adequate to meet the Company's liquidity requirements for the foreseeable
future, including payments for long-term debt, line of credit, and
anticipated capital expenditures of between $15-$18 million.
This report on Form 10-Q includes forward-looking statements based on
management's current expectations. Reference is made in particular to the
description of the Company's plans and objectives for future operations,
assumptions underlying such plans and objectives and other forward-looking
statements in this report. Such forward-looking statements generally are
identifiable by words such as "believes," "intends," "estimates," "expects"
and similar expressions.
These statements involve a number of risks and uncertainties and must be
qualified by factors that could cause results to be materially different
from what is presented here. This includes the following factors for each
business: Foodservice Equipment - demographic changes affecting the
number of women in the workforce, general population growth, and household
income; serving large restaurant chains as they expand their global
operations; specialty foodservice market growth; and the demand for
equipment for small kiosk-type locations. Cranes and Related Products -
market acceptance of innovative products; cyclicality in the construction
industry; growth in the world market for heavy cranes; demand for used
equipment in developing countries. Marine - shipping volume fluctuations
based on performance of the steel industry; five-year drydocking schedule;
reducing seasonality through non-marine repair work.
Year 2000 Compliance
- ----------------------------
The Year 2000 (or Y2K) issue is the result of computer systems and software
products that are coded to accept two digits rather than four in their date
code fields to define a year. A Company's computer equipment and software
devices with embedded technology that are time-sensitive may recognize a
date using "00" as the year 1900 rather than 2000. This could result in a
system failure or miscalculations causing disruptions of operations
including, among other things, a temporary inability to process
transactions, send invoices, or engage in other normal business activities.
The Company continues to undertake various initiatives intended to ensure
its computer equipment and software will function properly with respect to
Y2K and beyond. For this purpose, the term "computer equipment and
software" includes systems commonly thought of as Information Technology
(IT) systems - including accounting, data processing and telephone systems
- - as well as those that are not commonly thought of as IT systems - such as
manufacturing equipment, Company products, alarm systems, fax machines or
other miscellaneous systems. Both IT and non-IT systems may contain
embedded technology, which complicates Y2K identification, assessment,
remediation, and testing efforts.
Based upon its identification and assessment efforts through the end of the
first quarter of 1999, the Company is in the process of converting,
modifying, and upgrading its computer equipment and software to be Y2K
compliant, as necessary. In addition, in the ordinary course of replacing
computer equipment and software, the Company attempts to get replacements
that are Y2K compliant. The Company continues to anticipate that its Y2K
identification, assessment, remediation, and testing efforts, which began
in 1996, will be complete by October 1999, and contingency plans will be
developed, as necessary, to address unforseen circumstances prior to the
end of 1999. The Company believes that these efforts will be completed
prior to any currently anticipated impact on its computer equipment and
software. It also does not anticipate any significant disruption to its
normal business operations to achieve this goal. The Company estimates
that as of March 31, 1999, it had completed about 90% of the initiatives
it believes will be necessary to fully address potential Y2K issues.
The Company has made inquiries and gathered information on the Y2K
compliance of its significant vendors, suppliers, dealers and distributors.
This was done in an attempt to determine the extent to which interfaces
with these companies are vulnerable to Y2K issues, and whether the products
and services purchased from or by these companies are Y2K compliant.
During the first quarter of 1999, the Company completed a follow-up mailing
to significant vendors, suppliers, dealers and distributors for newly
acquired companies and for those that did not initially respond, or whose
responses were deemed unsatisfactory by the Company. Although the Company
cannot assure Y2K compliance by its key suppliers, dealers, and
distributors, no major part of critical operation of any Company segment
relies on a single source for raw materials, supplies, or services, and the
Company has multiple distribution channels for most of its products.
Beginning in the second half of 1997, through March 31, 1999, the Company
has spent approximately $4.1 million to upgrade its systems, including Y2K
issues. About $0.2 million was spent in the first quarter of 1999.
Estimated additional costs for system upgrades during the last three
quarters of 1999, including addressing Y2K concerns, will approximate $0.5
million. These expenditures were and will be funded using cash flows from
operations.
The costs of the Company's Y2K conversion efforts and dates by which it
believes these efforts will be completed are based on management's best
estimates. These were developed using many assumptions regarding future
events, including continued availability of certain resources, third-party
remediation plans, and other factors. There can be no assurance that these
estimates will prove to be accurate, and actual results could differ
materially from those currently anticipated.
The Company believes that the Y2K issue will not pose significant
operational problems for it. However, if all Y2K issues are not properly
identified, or assessment, remediation, or testing are not completed for
Y2K problems that are identified, there can be no assurance that the Y2K
issue will not have a material adverse affect on the Company's
relationships with customers, vendors, distributors, and others. In
addition, there can be no assurance that the Y2K issues of other entities
will not have a material adverse impact on the Company's systems or results
of operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------------------
See Item 7A of the Company's Annual Report on Form 10-K for the year ended
December 31, 1998.
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: None.
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/ Robert R. Friedl
------------------------------------
Robert R. Friedl
Senior Vice President and
Chief Financial Officer
/s/ E. Dean Flynn
------------------------------------
E. Dean Flynn
Secretary
May 11, 1999
THE MANITOWOC COMPANY, INC.
EXHIBIT INDEX
TO FORM 10-Q
FOR QUARTERLY PERIOD ENDED
MARCH 31, 1999
Exhibit Filed
No Description Herewith
- ------- ----------- --------
4 * Amended and Restated Credit Agreement, dated X
as of April 6, 1999 among The Manitowoc Co., Inc.,
as Borrower, and Several Lenders, NationsBank, N.A,
as Agent and Fleet Bank, N.A. as Documentation
Agent
27 Financial Data Schedules X
* Pursuant to Item 601(b) (2) of Regulation S-K, the Registrant agrees to
furnish to the Securities and Exchange Commission upon request, a copy of
any unfiled exhibits or schedules to such document.