Manitowoc reports fourth quarter loss
By D.Ann Shiffler02 February 2017
The Manitowoc Company reported fourth-quarter 2016 net sales of $378.2 million versus $543.1 million in the fourth quarter of 2015. Manitowoc reported a net loss of $33.4 million in the fourth-quarter 2016 versus net income of $43.5 million in the fourth-quarter 2015.
“During the fourth-quarter we experienced demand levels consistent with prior year trends with sequential improvement in revenue as well as incoming orders,” said Barry L. Pennypacker, president and CEO. “Our mobile orders in the Americas and the Middle East were affected by continued low rental rates, weakness in used equipment prices and continued low oil prices. Our tower crane business continued to perform as expected, mainly attributable to positive market sentiment in Europe complemented by our new product introductions. While the global crane market continues to be dynamic, we remain cautiously optimistic about the long-term market fundamentals.”
Pennypacker continued: “Our management team delivered a substantial improvement in operational working capital in the quarter which allowed us to completely pay down our outstanding revolver balance. This would not have been possible without the structured approach that ‘The Manitowoc Way’ provides for operational excellence. As a result, we saw a significant improvement in our net debt position during the quarter.”
He said the company remains committed to achieving its long-term goals of double-digit operating margins by 2020 as well as “investing appropriately for market growth, continuing to be a market leader in innovation and increasing the velocity in all our business processes. Executing on these strategic priorities will enable us to be the market leader in lifting technology as judged by our customers, shareholders and employees.”
The year-over-year decrease was primarily due to continued weak demand for the Company’s products in North America and the Middle East, which was partially offset by year-over-year growth in the European market, mainly due to continued strength in residential and commercial construction trends and new product introductions, the company said.
GAAP operating loss for the fourth-quarter 2016 was ($23.8) million, compared to ($13.9) million in the fourth-quarter 2015. The fourth-quarter 2016 GAAP operating loss includes $6.3 million of restructuring costs mainly related to plant relocation and severance expenses.
Backlog totaled $323.8 million at December 31, 2016, down from the third-quarter 2016 backlog of $353.6 million. Fourth-quarter 2016 orders of $348.3 million were lower by $76.2 million or 18 percent compared to the fourth-quarter 2015 but up sequentially by $38.4 million or 12 percent. The year-over-year order decline is due to weaker North American and Middle East demand, partially offset by growth in Western Europe, according to the company.
Net cash flow from continuing operating activities in the fourth-quarter 2016 was $57.8 million, compared to $51.3 million from fourth-quarter 2015. Fourth-quarter capital expenditures totaled $11.1 million as compared to $23.0 million in the fourth-quarter 2015.
The Company’s cash totaled $69.9 million at December 31, 2016, an increase of $27.0 million from the end of the third quarter 2016. This increase was primarily driven by a reduction in operating working capital during the fourth quarter, mainly related to inventory. In the fourth quarter, the Company completely paid down its previously outstanding revolver balance of $20 million through improved working capital management.