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 September 30, 1996
-------------------------
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 South 16th Street, Manitowoc, Wisconsin 54220
------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(414) 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 September 30, 1996, the most recent
practicable date, was 11,511,357.
PART I. FINANCIAL INFORMATION
------------------------------------------
Item 1. Financial Statements
- ------------------------------
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Consolidated Statements of Earnings
For the Third Quarter of Calendar Years 1996 and 1995
(Unaudited)
(In thousands, except per-share and average shares data)
QUARTER ENDED YEAR-TO-DATE
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Sales $132,042 $80,088 $385,360 $231,476
Costs And Expenses:
Cost of goods sold 95,264 62,077 282,054 176,343
Engineering, selling and
administrative expenses 20,652 12,635 60,924 37,633
-------- -------- -------- --------
Total 115,916 74,712 342,978 213,976
Earnings From Operations 16,126 5,376 42,382 17,500
Other Income (Expense):
Interest Expense (2,294) (291) (7,313) (1,010)
Interest and dividend income 240 (43) 358 4
Other income 152 653 317 647
-------- -------- -------- --------
Total (1,902) 319 (6,638) (359)
-------- -------- -------- --------
Earnings Before Taxes
On Income 14,224 5,695 35,744 17,141
Provision For Taxes On Income 5,690 2,105 14,298 6,397
-------- -------- -------- --------
Net Earnings $ 8,534 $ 3,590 $ 21,446 $ 10,744
-------- -------- -------- --------
Net Earnings Per Share $ .74 $ .31 $ 1.86 $ .93
Dividends Per Share $ .17 $ .17 $ .50 $ .50
Average Shares Outstanding 11,511,357 11,511,357 11,511,357 11,511,357
See accompanying notes which are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Consolidated Balance Sheets
As of September 30, 1996 and December 31, 1995
(In thousands, except share data)
- ASSETS -
Unaudited Audited
Sept. 30, Dec. 31,
1996 1995
---------- -----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 27,812 $ 15,077
Marketable securities 1,640 1,558
Accounts receivable 55,295 51,011
Inventories 44,266 52,928
Prepaid expenses and other 1,428 3,451
Future income tax benefits 10,743 11,120
--------- ----------
Total current assets 141,184 135,145
Intangible assets 89,948 92,433
Other assets 14,089 9,663
Property, plant and equipment:
At cost 189,043 188,755
Less accumulated depreciation (103,284) (101,081)
--------- ----------
Property, plant and equipment-net 85,759 87,674
--------- ----------
TOTAL $ 330,980 $ 324,915
--------- ----------
-LIABILITIES AND STOCKHOLDERS' EQUITY-
Current Liabilities:
Accounts payable and accrued expenses $ 76,578 $ 66,028
Current portion of long-term debt 31,955 10,089
Short term borrowings 0 26,807
Income taxes payable 6,883 1,503
Product warranties 8,859 6,496
--------- ---------
Total current liabilities 124,275 110,923
Non-Current Liabilities:
Long-term debt less current portion 79,265 101,180
Product warranties 3,756 4,199
Post-retirement health benefits obligations 19,490 19,190
Other 6,778 7,762
--------- ---------
Total non-current liabilities 109,289 132,331
--------- ---------
Stockholders' Equity:
Common stock (16,331,770 and 10,887,847
shares issued) 163 109
Additional paid-in capital 31,061 31,115
Cumulative foreign currency translation
adjustments (415) (479)
Retained earnings 148,109 132,418
Treasury stock at cost(4,820,413
and 3,213,379 shares) (81,502) (81,502)
--------- ---------
Total stockholders' equity 97,416 81,661
--------- ---------
TOTAL $ 330,980 $ 324,915
--------- ---------
See accompanying notes which are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1996 and 1995
(In thousands)
(Unaudited)
Sept. 30, 1996 Sept. 30, 1995
-------------- -------------
<S> <C> <C>
Cash Flows From Operations:
Net earnings $ 21,446 $ 10,744
Non-cash adjustments to income:
Depreciation and amortization 8,656 4,729
Deferred income taxes (3,726) (1,857)
Gain on sale of fixed assets (31) (987)
Changes in operating assets and liabilities:
Accounts receivable (4,284) (12,712)
Inventories 8,662 (1,985)
Other current assets 2,024 1,465
Current liabilities 18,296 9,049
Non-current liabilities (599) 1,620
Deferred income (528) (2,199)
Non-current asset (324) (234)
--------- ---------
Net cash provided by operations 49,592 7,633
Cash Flows From Investing:
Sale (purchase) of temporary
investments - net (82) 8,866
Proceeds from sale of property,
plant, and equipment 1,343 3,702
Capital expenditures (5,558) (17,375)
--------- ---------
Net cash used for investing (4,297) (4,807)
Cash Flows From Financing:
Dividends paid (5,756) (5,756)
Proceeds from long-term borrowings 15,000 0
Payments on long-term borrowings (15,049) 0
Change in short-term borrowings - net (26,807) 9,701
--------- ---------
Net cash provided by (used for)
financing (32,612) 3,945
Effect of exchange rate changes on cash 52 54
--------- ---------
Net increase in cash and
cash equivalents 12,735 6,825
Balance at beginning of year 15,077 4,118
--------- ---------
Balance at end of period $ 27,812 $ 10,943
--------- ---------
Supplemental cash flow information:
Interest paid $ 2,526 $ 992
Income taxes paid 11,594 4,823
See accompanying notes which are an integral part of these statements.
</TABLE>
THE MANITOWOC COMPANY, INC.
Notes to Unaudited Consolidated Financial Statements
For the Nine Months Ended September 30, 1996 and 1995
(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 for the quarter and nine
months ended September 30, 1996 and 1995, the financial
position at September 30, 1996 and the changes in the cash
flows for the nine months ended September 30, 1996 and 1995.
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, 1995.
Note 2.
<TABLE>
<CAPTION>
The components of inventory at September 30, 1996 and
December 31, 1995 are summarized as follows (dollars in
thousands):
Sept. 30, Dec. 31,
1996 1995
----------- -----------
<S> <C> <C>
Components:
Raw materials $ 27,438 $ 22,809
Work-in-process 16,200 18,868
Finished goods 21,755 31,711
--------- ---------
Total inventories at
FIFO costs 65,393 73,388
Excess of FIFO costs
over LIFO value (21,127) (20,460)
--------- ---------
Total inventories $ 44,266 $ 52,928
</TABLE>
Inventory is carried at lower of cost or market using the
first-in, first-out (FIFO) method for 59% and 60% of total
inventory at September 30, 1996 and December 31, 1995,
respectively. The remainder of the inventory is costed
using the last-in, first-out (LIFO) method.
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.
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 $30 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 11% of the
total cleanup costs.
In connection with this matter, the Company expensed $0.2
million, $1.6 million, $0.5 million, and $.9 million for the
year ended December 31, 1995, and fiscal years 1994, 1993,
and 1992 respectively, for its estimated portion of the
cleanup costs. There were no expenses incurred during the
nine months ended September 30, 1996.
As of September 30, 1996, 30 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 $16.0 million limit on
the insurer's contribution.
Product liability reserves at September 30, 1996 are $6.7
million; $2.8 million reserved specifically for the 30 cases
referenced above, and $3.9 million for incurred but not
reported claims. These reserves were estimated using
actuarial methods. 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.
It is always possible that the estimates for environmental
remediation and product liability costs may change in the
near future based upon new information which could arise.
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.
In the transition period ended December 31, 1994, resulting
from the Company's change in fiscal year-end, the Company's
decision to consolidate large-crane manufacturing to a
single site resulted in a $14 million pre-tax charge to
earnings in the cranes and related products segment. The
charge included a $9.4 million write-down of the facility
being abandoned and estimated holding costs of $4.6 million
while the site is being marketed. The estimate for future
holding costs of the facility may change in the future.
The 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,
determined through independent appraisals, is approximately
$3 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, insurance, and demolition costs for various
buildings. Future holding costs also include estimates for
various environmental studies on the Peninsula location. To
date, $1.5 million has been paid and charged against these
reserves, including $0.9 million during the nine months
ended September 30, 1996. There were no payments charged
against the reserve during the third quarter of 1996.
Note 5.
On December 1, 1995, the Company completed the purchase of
the outstanding common stock of The Shannon Group, Inc.
("Shannon"). Shannon is a manufacturer of commercial
refrigerators, freezers and related products, ranging from
small under-counter units to 300,000 square foot
refrigerated warehouses. Among its wide range of products,
Shannon is best known for its foamed-in-place walk-in
refrigeration units, wood rail walk-in units, refrigerated
food-prep tables, reach-in refrigerator/freezers and modular
refrigeration systems.
The aggregate consideration paid by the Company for Shannon
was $127.0 million, which is net of cash acquired of $0.7
million, and which includes an amount due to a seller of
$19.8 million which was paid in January, 1996, direct
acquisition costs of $2.7 million, and other assumed
liabilities of $1.3 million. The transaction was financed
through credit facilities provided under a Credit Agreement
dated December 1, 1995.
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 value of the
assets acquired and the liabilities assumed. The
preliminary estimate of the excess of the cost over the fair
value of net assets acquired is $88.3 million, and is being
amortized over 32 years. The results of operations since
the date of acquisition are included in the Consolidated
Statements of Earnings.
Note 6.
On June 14, 1996, the company announced a three-for-two
stock split in the form of a 50-percent stock dividend which
was effective July 2 to shareholders of record on June 25.
Adjusting for the split, the company now has approximately
11.5 million shares outstanding. As a result of the stock
split, all earnings and dividend per share amounts and
average shares outstanding, appearing herein, have been
retroactively adjusted to give effect of the stock split.
Note 7.
Certain reclassifications have been made to the financial
statements of prior years to conform to the presentation for
1996.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations for the Quarter and Nine Months Ended September
30, 1996 and 1995.
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
Net sales and earnings from operations by business segment for the
quarter and nine months ended September 30, 1996 and 1995 are shown
below (in thousands):
QUARTER ENDED YEAR-TO-DATE
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1996 1995 1996 1995
-------- --------- -------- -----------
<S> <C> <C> <C> <C>
NET SALES:
Foodservice products $ 67,194 $ 29,781 $187,320 $ 85,295
Cranes & related products 53,997 45,787 156,499 120,073
Marine 10,851 4,520 41,541 26,108
-------- -------- -------- --------
Total $132,042 $ 80,088 $385,360 $231,476
EARNINGS (LOSS) FROM OPERATIONS:
Foodservice products $ 10,904 $ 6,771 $ 29,168 $ 18,858
Cranes and related products 6,506 829 14,909 (1,045)
Marine 1,369 (347) 6,170 4,727
General corporate expense (1,903) (1,877) (5,615) (5,040)
Amortization (750) 0 (2,250) 0
-------- -------- -------- --------
Total $ 16,126 $ 5,376 $ 42,382 $ 17,500
</TABLE>
Net sales for the quarter ended September 30, 1996, were $132.0
million, up 65% from $80.1 million for the third quarter of 1995. Net
earnings were $8.5 million, or 74 cents per share, compared with $3.6
million, equal to 31 cents per share, earned in the third quarter of
1995, an increase of 137%. This represents the fourth consecutive
quarter in which the company has shown an improvement in year-over-
year quarterly earnings.
For the first nine months, net sales increased 66% to $385.4 million
in 1996 from $231.5 million in 1995. Earnings for the same period in
1996 were double those of 1995 - $21.4 million and $1.86 per share,
compared with $10.7 million and 93 cents per share.
Cranes and related products sales for the third quarter increased 18%
over the same period last year. Operating earnings were $6.5 million
and $14.9 million for the third quarter and first nine months of 1996,
respectively, compared to quarterly earnings of $0.8 million and a
year-to-date loss of $1.0 million for 1995. Every unit within the
crane segment has contributed to the gain. In addition to continued
productivity improvements during the quarter, the crane segment
continues to benefit from the introduction of new crane models and a
good boom-truck market. As of September 30, 1996, the backlog of
unfilled crane segment orders stood at a record $145 million.
Sales and operating earnings for the foodservice products segment were
$67.2 million and $10.9 million, respectively, for the third quarter
of 1996, compared to $29.8 million and $6.8 million for 1995. The
gain in sales was due largely to the addition of refrigeration
equipment sales by the Kolpak, Tonka and McCall units. Comparable ice
machine and reach-in sales by Manitowoc Equipment Works (MEW) were 5%
higher than those of the third quarter in 1995. The on-going
introduction of the first CFC-free ice cube machines bodes well for
continuing the recent gains in market share. 1996 year-to-date sales
and earnings were $187.3 million and $29.2 million, respectively,
versus $85.3 million and $18.9 million, respectively, for the nine
months ended September 30, 1996.
Third quarter sales in the Marine segment were $10.9 million, compared
with $4.5 million recorded during the third quarter last year. Keying
this quarter's earnings was a self-unloading cement barge which was
delivered at a better margin than originally forecast. Earnings for
the quarter stood at $1.4 million compared to an operating loss of
$0.3 million during the same period last year. In addition, shipping
activity on the Great Lakes continues at a high level, which is a
positive indicator for this part of the business.
The company continues to generate strong positive cash flow. At the
end of the quarter, the company had no revolving debt against its
credit lines. Indebtedness under the six-year term facility stood at
$111 million, including the current portion. During the quarter, the
total indebtedness decreased by $10 million.
Financial Condition at September 30, 1996
- ------------------------------------------
The Company's financial condition remains strong. Cash and marketable
securities of $29.4 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, costs
associated with the plant consolidation, and capital expenditures.
This Management's Discussion and Analysis, as well as certain other
parts of this Report on Form 10-Q, contain forward looking statements
that involve a number of risks and uncertainties. Such statements are
based on management's current expectations. The company cautions that
such statements are further qualified by important factors that could
cause actual results to differ materially from those in the forward
looking statements.
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: On August 7, 1996, the Company
filed a Current Report on Form 8-K reporting, pursuant
to Item 5 of such Form, the August 5, 1996 declaration
by the Company's Board of Directors of a dividend
distribution of one Right for each outstanding share of
Common Stock, par value $0.01 per share, of the Company
to shareholders of record at the close of business on
September 19, 1996.
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
President and
Chief Executive Officer
/s/ Robert R. Friedl
----------------------------
Robert R. Friedl
Senior Vice President and
Chief Financial Officer
/s/ E. Dean Flynn
----------------------------
E. Dean Flynn
Secretary
October 31, 1996
THE MANITOWOC COMPANY, INC.
EXHIBIT INDEX
TO FORM 10-Q
FOR QUARTERLY PERIOD ENDED
September 30, 1996
Exhibit Filed
No Description Herewith
- ------ --------------------------- ------------
4 First Amendment to Credit Agreement,
dated as of September 30, 1996 X
27 Financial Data Schedule X
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of September
30, 1996 (the "First Amendment") to that Credit Agreement referenced
below is by and among THE MANITOWOC COMPANY, INC., a Wisconsin
corporation (the "Borrower"); THE GUARANTORS THEREUNDER being
identified on the signature pages hereto (as referenced and defined in
the Credit Agreement, the "Guarantors"), the Lenders and Co-Agent
identified therein and NATIONSBANK, N.A., as Agent. Terms used but
not otherwise defined herein shall have the meanings provided in the
Credit Agreement referenced below.
W I T N E S S E T H :
WHEREAS, the Lenders established a $180 million credit facility
in favor of the Borrower pursuant to the terms of that Credit
Agreement dated as of December 1, 1995 (as amended and modified, the
"Credit Agreement") among the Borrower, certain of its Subsidiaries,
as guarantors, the Lenders and Co-Agent identified therein, and
NationsBank, N.A., as Agent;
WHEREAS, the Borrower has proposed making a $30 million
prepayment on the Term Loan and has requested in connection therewith,
among other things, adjustment of the amortization schedule relating
to the Term Loan, increase in the Revolving Committed Amount,
adjustment of the pricing and financial covenants and modification of
the restrictions on acquisitions;
WHEREAS, the Lenders have agreed to the requested modifications
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good
and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
A. The Credit Agreement is amended in the following respects.
1. The reference to "Section 8.5(b)" in the definition of
"Pro Forma Basis" in Section 1.1 is amended and modified to refer
instead to "Section 8.4(c)".
2. The Revolving Committed Amount as referenced and defined
in Section 2.1(a) shall be increased simultaneously with the
prepayment on the Term Loan on the date hereof from "FIFTY-FIVE
MILLION DOLLARS ($55,000,000)" to SIXTY-TWO MILLION FIVE HUNDRED
THOUSAND DOLLARS ($62,500,000) and thereafter shall be simultaneously
increased again at the time of the additional prepayment of the Term
Loan on October 8, 1996 to "EIGHTY-FIVE MILLION DOLLARS
($85,000,000)".
3. The principal balance outstanding on the Term Loan as of
the date hereof is ONE HUNDRED SEVENTEEN MILLION FIVE HUNDRED THOUSAND
DOLLARS ($117,500,000). The Borrower has made prepayment on the Term
Loan on the date hereof in the amount of SEVEN MILLION FIVE HUNDRED
THOUSAND DOLLARS ($7,500,000) and given notice of its intent to make
an additional prepayment of TWENTY-TWO MILLION FIVE HUNDRED THOUSAND
DOLLARS ($22,500,000) on October 8, 1996. Upon the making of such
prepayments the amortization schedule for repayment of the remaining
principal amount of the Term Loan (being $87,500,000) shall be payable
as follows:
Payment Date Amount
--------------------- --------------
December 31, 1996 $ 1,134,757.00
March 31, 1997 $ 2,743,794.25
June 30, 1997 $ 2,743,794.25
September 30, 1997 $ 2,743,794.25
December 31, 1997 $ 2,743,794.25
March 31, 1998 $ 3,727,836.75
June 30, 1998 $ 3,727,836.75
September 30, 1998 $ 3,727,836.75
December 31, 1998 $ 3,727,836.75
March 31, 1999 $ 4,711,879.25
June 30, 1999 $ 4,711,879.25
September 30, 1999 $ 4,711,879.25
December 31, 1999 $ 4,711,879.25
March 31, 2000 $ 4,711,879.25
June 30, 2000 $ 4,711,879.25
September 30, 2000 $ 4,711,879.25
December 31, 2000 $ 4,711,879.25
March 31, 2001 $ 5,695,921.25
June 30, 2001 $ 5,695,921.25
September 30, 2001 $ 5,695,921.25
December 31, 2001 $ 5,695,921.25
--------------
$87,500,000.00
4. The last sentence of Section 3.3(c) is amended to read
as follows:
"Amounts prepaid on the Term Loan shall be applied to, and serve
to reduce, the remaining scheduled principal payments pro rata,
and may not be reborrowed."
5. Section 7.9(b) relating to the Consolidated Funded Debt
Ratio is amended to read as follows:
"(b) Consolidated Funded Debt Ratio. There shall be maintained
as of the end of each fiscal quarter to occur during the periods
shown below a Consolidated Funded Debt Ratio of not greater than:
Period
------
From the date of the First Amendment 3.50:1.0
(being September 30, 1996)
through December 30, 1996
December 31, 1996 through 3.25:1.0
December 30, 1997
December 31, 1997 and thereafter 2.75:1.0"
6. Subsection (b) of Section 8.4 is amended and a new
subsection (c) is added to read as follows:
(b) enter into any transaction of merger or consolidation,
provided, however, that so long as no Default or Event of Default
would be directly or indirectly caused as a result thereof,
(i) a Domestic Subsidiary may merge or consolidate
with another Domestic Subsidiary, provided that (A) the
Borrower shall be the surviving entity if it is a party
thereto and (B) a Domestic Credit Party will be the
surviving entity if it is a party thereto or such surviving
Subsidiary becomes a Domestic Credit Party pursuant to the
terms of Section 7.10(a) immediately after the consummation
of such merger or consolidation;
(ii) a Foreign Subsidiary may merge or consolidate
with any other Foreign Subsidiary;
(iii) a Foreign Subsidiary may merge or consolidate
with a Domestic Subsidiary, provided that the Domestic
Subsidiary shall be the surviving entity and the applicable
conditions set forth in Section 7.10 are complied with in
connection therewith; and
(iv) a Subsidiary may merge or consolidate with any
Person that is not a Subsidiary, provided that the
applicable conditions set forth in Section 7.10 and Section
8.4(c) are complied with in connection with such acquisition
by merger or consolidation.
As used herein: "Domestic Subsidiary" means any Subsidiary which
is incorporated or organized under the laws of any State of the
United States or the District of Columbia; "Foreign Subsidiary"
means any Subsidiary which is not a Domestic Subsidiary; and
"Domestic Credit Party" means any Credit Party which is
incorporated or organized under the laws of any State of the
United States or the District of Columbia.
(c) purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) (i) all or any
portion of the capital stock or securities of any other person or
(ii) purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) all or any
substantial part of the property of any other person or except
(A) where the aggregate cost (including all cash paid,
seller financing provided, debt assumed and stock
transferred in respect thereof) of any such individual
acquisition shall not exceed $25,000,000;
(B) where the aggregate cost (including all cash paid,
seller financing provided, debt assumed and stock
transferred in respect thereof) of all such acquisitions
shall not exceed $50,000,000 in any calendar year;
(C) if such acquisition is of the capital stock or
securities of a Person, such Person shall (after giving
effect to such acquisition of capital stock or securities)
be a Subsidiary of the purchaser; and
(D) no Default or Event of Default would exist after
giving effect to any such acquisition on a Pro Forma Basis.
6. Schedule 2.1(a) is amended as attached to reflect the
increase in Revolving Commitments.
7. Schedule 2.1(d) is amended as attached to reflect the
modification in pricing under the definition of "Applicable
Percentage."
B. The Credit Parties hereby represent and warrant that:
(a) the representations and warranties made and contained
in the Credit Agreement (other than those which expressly relate
to a prior period and after taking into account any changes
permitted or contemplated or not prohibited by the Credit
Agreement) are true and correct in all material respects as of
the date of this First Amendment; and
(b) no Default or Event of Default exists and is continuing
under the Credit Agreement as of the date of this First Amendment.
C. This First Amendment shall be effective upon receipt by the
Agent of the following in form and substance satisfactory to the
Lenders:
(a) Executed Documents. This First Amendment executed by
each of the Credit Parties and each of the Lenders and executed
copies of the Amended and Restated Revolving Notes reflecting the
increase in Revolving Commitments.
(b) Legal Opinion. Legal opinions of counsel to the Credit
Parties regarding the enforceability of this First Amendment and the
promissory notes executed in connection herewith.
(c) Other Information. Such other information and
documents as the Administrative Agent may reasonably request.
D. The Borrower will execute such additional documents as are
reasonably requested by the Agent to reflect the terms and conditions
of this First Amendment.
E. Except as modified hereby, all of the terms and provisions
of the Credit Agreement (and Exhibits) remain in full force and
effect.
F. The Borrower agrees to pay all reasonable costs and expenses
in connection with the preparation, execution and delivery of this
First Amendment, including without limitation, the reasonable fees and
expenses of the Agent's legal counsel.
G. This First Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original and it shall not be necessary in making proof of
this First Amendment to produce or account for more than one such
counterpart.
H. This First Amendment and the Credit Agreement, as amended
hereby, shall be deemed to be contracts made under, and for all
purposes shall be construed in accordance with the laws of the State
of North Carolina.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this First Amendment to be duly executed and delivered
as of the date and year first above written.
BORROWER:
THE MANITOWOC COMPANY, INC.
a Wisconsin corporation
By: /s/ Phil Keener
_________________________
Name: Phil Keener
Title: Treasurer
GUARANTORS:
MANITOWOC MEC, INC.,
a Nevada corporation
MANITEX, INC.,
a Texas corporation
FEMCO MACHINE COMPANY, INC.,
a Nevada corporation
WEST-MANITOWOC, INC.,
a Wisconsin corporation
MANITOWOC-FORSYTHE CORP.,
a New York corporation
NORTH CENTRAL CRANE & EXCAVATOR
SALES CORP.,
a Nevada corporation
MANITOWOC WESTERN COMPANY, INC.,
a Wisconsin corporation
THE SHANNON GROUP, INC.,
a Delaware corporation
MANITOWOC RE-MANUFACTURING, INC.,
a Wisconsin corporation
KOLPAK MANUFACTURING COMPANY,
a Tennessee corporation
MANITOWOC EQUIPMENT WORKS, INC.,
a Nevada corporation
MANITOWOC NEVADA, INC.,
a Nevada corporation
By: /s/ Phil Keener
______________________________
Name: Phil Keener
Title: Treasurer
for each of the foregoing
LENDERS:
NATIONSBANK, N.A.,
in its capacity as Agent and as a
Lender
By: /s/ Stephen K Foutch
_______________________________
Title: Vice President
BANK OF AMERICA ILLINOIS
in its capacity as Co-Agent and as
Lender
By: /s/ Rob Ritter
_______________________________
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ John Malloy
_______________________________
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Richard Marquez
_______________________________
Title: Vice President
FLEET BANK
By: /s/ Juan M. Csillagi
_______________________________
Title: Senior Vice President
THE NORTHERN TRUST COMPANY
By: /s/ Julie Wigdale
_______________________________
Title: Vice-President
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD. CHICAGO BRANCH
By: /s/ John R. Carley
_______________________________
Title: Vice President and
Deputy General Manager
THE BANK OF NEW YORK
By: /s/ Richard A. Raffetto
_______________________________
Title: Assistant Vice President
ASSOCIATED BANK LAKESHORE NATIONAL
ASSOCIATION
By:/s/ Scott Yeoman
_______________________________
Title: Senior Vice President
<TABLE>
<CAPTION>
Schedule 2.1(a)
Schedule of Lenders and
Commitments
Revolving Revolving LOC LOC Term Loan Term Loan
Committed Commitment Committed Commitment Committed Committed
Lender Amount Percentage Amount Percentage Amount Percentage
- ---------------- -------------- ------------ ------------ ----------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
NationsBank, N.A. $14,166,666.95 16.666667% $1,666,666.67 16.666667% $20,833,833.34 16.666667%
Bank of America, $14,166,666.95 16.666667% $1,666,666.67 16.666667% $20,833,833.34 16.666667%
Illinois
The Bank of Nova $ 9,444,443.50 11.11111% $1,111,111.11 11.11111% $13,888,888.89 11.11111%
Scotia
The First $ 9,444,444.50 11.11111% $1,111,111.11 11.11111% $13,888,888.89 11.11111%
National Bank of
Chicago
Fleet Bank $ 9,444,444.50 11.11111% $1,111,111.11 11.11111% $13,888,888.89 11.11111%
The Northern $ 9,444,444.50 11.11111% $1,111,111.11 11.11111% $13,888,888.89 11.11111%
Trust Company
The Long-Term $ 7,083,330.50 8.33333% $ 833,333.33 8.33333% $10,416,666.67 8.33333%
Credit Bank of
Japan, Ltd.
Chicago Branch
The Bank of New $ 7,083,333.50 8.33333% $ 833,333.33 8.33333% $10,416,666.67 8.33333%
York
Associated $ 4,722,222.00 5.55556% $ 555,555.56 5.55556% $ 6,944,444.45 5.55556%
Bank
Lakeshore,
N.A.
-------------- --------- ------------- ---------- -------------- --------
$85,000,000.00 100.00000% $10,000,000.00 100.00000% $125,000,000 100.00000%
</TABLE>
<TABLE>
<CAPTION>
Schedule 2.1(d)
Applicable Percentage
Applicable Applicable Applicable
Percentage Percentage Percentage
for for for
Base Rate Loans Eurodollar Loans Commitment Fee
and
Letter of Credit Fee
----------------- --------------------- ----------------
Pricing Consolidated
Level Funded Debt Ratio Interest Coverage Ratio Interest Coverage Ratio
----- -----------------
=>3.0:1.0 <3.0:1.0 =>3.0:1.0 <3.0:1.0
--------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
V =>3.0:1.0 0% .250% 1.250% 1.500% .375%
IV <3.0:1.0 but =>2.5:1.0 0% .250% 1.000% 1.250% .250%
III <2.5:1.0 but =>2.0:1.0 0% .250% .750% 1.000% .225%
II <2.0:1.0 but =>1.5:1.0 0% .250% .625% .875% .1875%
I <1.5:1.0 0% .250% .500% .750% .150%
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 27812
<SECURITIES> 1640
<RECEIVABLES> 57054
<ALLOWANCES> 1759
<INVENTORY> 44266
<CURRENT-ASSETS> 141184
<PP&E> 189043
<DEPRECIATION> 103284
<TOTAL-ASSETS> 330980
<CURRENT-LIABILITIES> 124275
<BONDS> 0
0
0
<COMMON> 163
<OTHER-SE> 97253
<TOTAL-LIABILITY-AND-EQUITY> 330980
<SALES> 385360
<TOTAL-REVENUES> 385360
<CGS> 282054
<TOTAL-COSTS> 342978
<OTHER-EXPENSES> (675)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7313
<INCOME-PRETAX> 35744
<INCOME-TAX> 14298
<INCOME-CONTINUING> 21446
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21446
<EPS-PRIMARY> 1.86
<EPS-DILUTED> 1.86
</TABLE>
