19.10.2016

Preliminary numbers from Manitowoc

Manitowoc has issued a preliminary set of numbers for the third quarter as the final results have not yet been completed.

Total revenues for the quarter were approximately $350 million roughly 20 percent down on the same period last year. while it expects to make a loss of around $134 million, compared to a loss last year of $30 million, this years numbers will include a $77 million write off “certain software assets” along with restructuring costs relating to the relocation of crawler and tower crane manufacturing operations.

These estimates would take the year to date revenues to around $1.24 billion, or around six percent below last year’s numbers. Which were themselves down 20 percent on the year before. The total year to date loss looks to be in the region of $220 million. The company plans to release its nine month results on November first.

Chief executive Barry Pennypacker said: “Orders and backlog for the company declined double digits during the third quarter, and these trends have continued into the fourth quarter. Subsequently, we’ve significantly reduced our production build schedules for mobile products to reflect these lower incoming order rates. In addition, we are accelerating the relocation of the Manitowoc crawler production to Shady Grove, taking additional headcount reductions, reducing other non-employee costs, and temporarily shutting-down certain mobile production lines during the fourth quarter. While this will negatively affect gross profits for the balance of the year, we believe it will put us in a better position to manage cash flow in the current environment.”

“In spite of on-going challenges in the crane market, the company has made excellent progress on its cost initiatives while it continues to invest in new products and product improvement initiatives. Although the current business environment remains difficult, we are confident in our long-term strategy, targeting double-digit operating margins by 2020.”

Vertikal Comment

Hard to comment on this information, apart from saying it does not look at all good, particularly on the order intake front, which we assume most affects the Rough Terrain and truck mounted/boom truck lines. The numbers do howwever mask some good things happening on the All Terrain product development front, and in the tower crane business.

The company will have a major task on its hands however to pull things back from this steep decline, while it is still going through such major restructuring exercise. It is probably looking to get rid of all the bad news and costs etc…. this year, preparing a clean slate, in preparation for a better year in 2017. Until then hold tight,

This is the classic strategy of new chief executive in a turnaround situation.