UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the year ended December 31, 1995
[_] 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.
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(Exact name of registrant as specified in its charter)
Wisconsin 39-0448110
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
500 South 16th Street, Manitowoc, Wisconsin 54220
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (414) 684-4410
Securities Registered Pursuant to Section 12(b) of the Act:
Common Stock, $.01 Par Value New York Stock Exchange
(Title of Each Class)(Name of Each Exchange on Which Registered)
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock Purchase Rights
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 [ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. ( )
The Aggregate Market Value on February 29, 1996, of the
registrant's Common Stock held by non-affiliates of the registrant was
$237,935,168, based on the $31.81 per share average of high and low
sale prices on that date.
The number of shares outstanding of the registrant's Common Stock
as of February 29, 1996, the most recent practicable date, was
7,674,468.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of registrant's Annual Report to Shareholders for the
period ended December 31, 1995 (the 1995 "Annual Report"), are
incorporated by reference into Parts I and II of this report.
Portions of the registrant's Proxy Statement for the Annual Meeting of
Shareholders dated April 2, 1996 (the "1996 Proxy Statement"), are
incorporated by reference in Part III of this report.
See Index to Exhibits.
PART I
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Item 1. Business
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GENERAL
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The Manitowoc Company, Inc. (the "Company" or "Manitowoc"), a
Wisconsin corporation, is a diversified, capital goods manufacturer
headquartered in Manitowoc, Wisconsin. Founded in 1902, the Company
is principally engaged in: a) the design and manufacture of commercial
ice machines and refrigeration products for the foodservice, lodging,
convenience store and healthcare markets; (b) the design and
manufacture of cranes and related products which are used by the
energy, construction, mining and other industries; and (c) marine
vessel repair. The Company currently operates a large-crane
manufacturing facility and an ice machine and reach-in
refrigerator/freezer manufacturing facility in Manitowoc, Wisconsin;
nine refrigeration products facilities located in Tennessee, Iowa and
Wisconsin; ship repair yards in Sturgeon Bay, Wisconsin and Toledo and
Cleveland, Ohio; an overhead-crane factory in Big Bend, Wisconsin; a
crane re-manufacturing facility in Bauxite, Arkansas; a crane
replacement parts manufacturing facility in Punxsutawney, Pennsylvania
and Pompano Beach, Florida; and a boom truck and pedestal crane
operation in Georgetown, Texas.
For information relating to the Company's lines of business and
industry segments, see "Management's Discussion and Analysis of
Results of Operations and Financial Condition", "Ten-Year Financial
Summary and Business Segment Information", "Summary of Significant
Accounting Policies -- Research and Development" and Note 13 to
Consolidated Financial Statements on pages 18-21, 22-23, 28 and 32,
respectively, of the 1995 Annual Report, which are incorporated herein
by reference.
On August 9, 1994, the Board of Directors changed the Company's
fiscal year from the Saturday nearest to June 30 of each calendar year
to December 31 of each calendar year. Such change in fiscal years
resulted in a transition period from July 3, 1994 through December 31,
1994. For further information concerning the transition period see
"Summary of Significant Accounting Policies--Fiscal Year" on page 28
of the 1995 Annual Report, which is incorporated herein by reference.
PRODUCTS AND SERVICES
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Foodservice
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The Foodservice Products business segment designs, manufactures,
and markets commercial ice cube machines, ice storage bins, ice cube
dispensers, and related accessories including water filtration
systems, as well as reach-in and walk-in refrigerators and freezers.
Serving the needs of foodservice, lodging, convenience store, and
healthcare operations worldwide, the Company has captured a leading
percentage of the commercial ice cube machine, reach-in and walk-in
refrigerator market.
Several models of automatic ice cube making and dispensing
machines are designed, manufactured and marketed by Manitowoc
Equipment Works. Offering daily production capacities from 160 to
1,890 pounds, Manitowoc ice machines are complemented by storage bins
with capacities from 220 to 760 pounds; countertop ice and beverage
dispensers with capacities to 160 pounds; floor-standing ice
dispensers with capacities to 180 pounds; and optional accessories
such as water filters and ice baggers. The reach-in refrigerators and
freezers are available in one, two or three-door models that provide
gross storage capacities of 23.1, 47.8 and 73.7 cubic feet,
respectively.
Effective December 1, 1995, the Company completed the purchase 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. Shannon is the primary or sole
supplier of walk-in refrigerator/freezers to many of the leading
restaurant and grocery chains in the United States. See Note 8 to
Consolidated Financial Statements on page 31 of the 1995 Annual
Report, which is incorporated herein by reference.
The acquisition of The Shannon Group, Inc. has made foodservice
equipment the Company's largest business segment. Prior to the
acquisition, foodservice represented 35% of the Company's total sales.
On a calendar 1995 pro forma basis, Shannon and Manitowoc Equipment
Works account for 54% of the Company's sales and 84% of the segment
operating earnings.
In fiscal 1993, the foodservice products group introduced a new
line of ice machines that use an environmentally enlightened
refrigerant. The "B-Series" includes ten models which are
complemented by seven ice storage bins. For added customer
convenience, the "B" models also feature standard self-cleaning and
optional automatic-cleaning systems that improve reliability while
simplifying maintenance.
The Company also introduced in 1993 the industry's first reach-in
cooler that uses an environmentally enlightened refrigerant. In
addition, our foodservice group received a U.S. patent covering the
drop-in refrigeration units for its reach-in cabinets.
During 1995, Manitowoc Equipment Works was certified as meeting
ISO-9001 quality standards - the highest international rating for
quality management systems.
The Company completed arrangements with a joint-venture partner,
Hangzhou Household Electric Appliance Industrial Corporation, to
produce ice machines in China during calendar 1995. The joint-venture
factory has begun production of the Company's new model I-25 ice
machine. The I-25 produces 30 pounds of ice per day. It was
developed to meet the needs of customers in overseas markets that do
not require the 160 to 1,890 pound daily outputs of the standard ice
making models.
The Foodservice Products business segment sales are made from the
Company's inventory and sold worldwide through independent wholesale
distributors, chain accounts, and government agencies. The
distribution network now extends to 80 distributors in 70 countries
within Western Europe, the Far East, the Middle East, the Near East,
Latin America, North America, the Carribbean, and Africa. A new
distribution facility in Rotterdam, Holland, has enabled the Company
to increase sales of ice and refrigerated foodservice equipment by more
than 50% in Europe in 1995.
Since sales are made from the Company's inventory, orders are
generally filled within 24 to 48 hours. The backlog for unfilled
orders for Foodservice Products at December 31, 1995 and 1994 were not
significant.
Cranes and Related Products
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The Company designs and manufactures a diversified line of
crawler, truck, fixed-base mounted, overhead and hydraulically-powered
cranes, which are sold under the "Manitowoc", "Manitex", "Orley
Meyer", and "West-Manitowoc, Inc." names for use by the energy,
construction, mining, pulp and paper, and other industries. Many of
the Company's customers purchase one crane together with several
options to permit use of the crane in various lifting applications and
other operations. Various crane models combined with available
options have lifting capacities ranging from approximately 10 to 1,500
U.S. tons and excavating capacities ranging from 3 to 15 cubic yards.
The Company has developed a line of hydraulically-driven,
electronically-controlled M-Series crawler cranes. M-Series cranes
are easier to transport, operate and maintain, as well as being more
productive in a number of applications. Six models, along with
various attachments, have been introduced to-date with lifting
capacities ranging from 65 to 1,500 U.S. tons.
In July 1995, the Company's large-crane operation completed a
plant consolidation to a single site within Manitowoc, Wisconsin in
order to streamline the manufacturing process. The consolidation has
reduced production costs, shortened the cycle from order to shipment,
and has made it easier to respond to shifts in market demand.
During 1995, Manitowoc Engineering introduced the Model-888.
The 888 is a lattice boom crawler crane with a lifting capacity of 230
U.S. tons. Because of its innovative design, the 888 will self-
assemble and be ready to work on a jobsite in as little as one hour.
Other cranes of similar size and configuration take many more hours to
assemble before they can be put to work.
The Company also performs machining, fabricating and assembly
subcontract work utilizing crane manufacturing facilities. The
Company also has a remanufacturing facility in Bauxite, Arkansas which
buys older cranes for remanufacture and rebuilds and sells the
finished units through the distribution channels mentioned below.
Customer owned cranes are also remanufactured at this facility.
In fiscal 1994, the Company launched a completely new business
unit - West-Manitowoc. Its prime target is the smaller, independent
contractors and rental-fleet customers who need smaller, less
complicated, easily transportable, and more versatile cranes that meet
the needs of a broad range of users.
To serve this growing market, West-Manitowoc has developed a new
line of value-priced cranes with those characteristics. The first of
these, the 90-ton lifting capacity West-100 cranes, has successfully
captured a large portion of the rental market for self-erecting
cranes.
As West-Manitowoc introduces additional models in the 50 to 130-
ton range, Manitowoc Engineering will phase out production of small M-
Series models and concentrate solely on high-end cranes for customers
with specialized needs.
In February 1994, the Company acquired the assets of Femco
Machine Co. Femco Machine Co. is a manufacturer of parts for cranes,
draglines, and other heavy equipment. Femco is located in
Punxsutawney, Pennsylvania and Pompano Beach, Florida.
Femco and Manitowoc Re-Manufacturing together form the
Aftermarket Group. These companies rebuild and remanufacture used
cranes, both Manitowoc and non-Manitowoc units, for owners who want to
add value to their existing cranes. Femco's existing South Florida
operation is ideally positioned to serve the large Latin American
market where used cranes are the order of the day.
In February, 1996, the Company announced the sale of Orley Meyer,
the Wisconsin-based unit which produced overhead cranes of up to 50-
ton capacity. Although Orley Meyer was a profitable and well-run
operation, its product line was outside the Company's core business
interests.
The Company's cranes and related products are sold throughout
North America and foreign countries by independent distributors, and
by Company- owned sales subsidiaries located in Mokena, Illinois;
Benicia, California; and Northampton, England. During calendar 1995,
the Company sold sales subsidiaries in Long Island City, New York;
LaMirada, California; Seattle, Washington; and Chur, Switzerland. In
fiscal 1993, the Company sold two previously owned sales subsidiaries
located in Davie, Florida and Charlotte, North Carolina.
Distributors generally do not carry inventories of new cranes,
except for the smaller truck cranes. Most distributors maintain
service facilities and inventories of replacement parts. Company
employed service representatives usually assist customers in the
initial set-up of new cranes.
The Company does not generally provide financing for either its
independent distributors or their customers; however, dealers
frequently assist customers in arranging financing and may accept used
cranes as partial payment on the sale of new cranes.
See Note 13 to Consolidated Financial Statements on page 32 of
the 1995 Annual Report with respect to export sales, which is
incorporated herein by reference. Such sales are usually made to the
Company's foreign subsidiaries or independent distributors, in
addition to sales made to domestic customers for foreign delivery.
Foreign sales are made on Letter of Credit or similar terms.
The year-end backlog of crane products includes orders which have
been placed on a production schedule, and those orders which the
Company has accepted and which are expected to be shipped and billed
during the next fiscal year. The backlog of unfilled orders for
cranes and related products at December 31, 1995 approximates $85.8
million, as compared with $18.7 million a year earlier. The increase
is primarily due to the positive customer acceptance of the Company's
new Model-888 crane.
Marine
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The Company had been a shipbuilder since its inception in 1902.
For almost seven decades, all shipbuilding operations were conducted
in Manitowoc, Wisconsin. Two adjoining shipyards in Sturgeon Bay,
Wisconsin, were acquired in 1968 and 1970, and all shipbuilding
activities were transferred to those facilities.
In March, 1988, the Company announced that, due to the continued
decline in the U.S. shipbuilding industry, it would no longer pursue
new ship construction contracts and would restructure its shipbuilding
subsidiary to be more competitive on ship conversions and repair work.
In January, 1992, the Company acquired substantially all the
assets of Merce Industries, Inc. Merce Industries, Inc. operated the
ship repair facility owned by the Port Authority of Toledo, Ohio, and
similar operations in Cleveland, Ohio. Included with the acquisition
was the assumption of a lease agreement with the Port Authority for
the ship repair facilities.
The Marine Group (made up of Bay Shipbuilding Co., Toledo
Shiprepair Co., and Cleveland Shiprepair Co.) dry-docks and services
commercial vessels of all sizes, including 1,000-foot super carriers,
the largest vessels sailing the Great Lakes. The Marine Group's
capabilities include planned and emergency maintenance, vessel
inspections, five-year surveys, conversions, repowering, and
retrofitting plus repair service for hulls, turbines, boilers,
propulsion systems and cargo systems. To reduce seasonality, the
Marine Group has begun to perform non-marine industrial repair during
the summer months.
The year-end backlog for the marine segment includes repair and
maintenance work presently scheduled at the shipyard which will be
completed in the next fiscal year. At December 31, 1995 the backlog
approximates $21.2 million, compared to $7.1 million one year ago.
Raw Materials and Supplies
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The primary raw material used by the Company is structural and
rolled steel, which is purchased from various domestic sources. The
Company also purchases engines and electrical equipment and other
semi- and fully-processed materials. It is the policy of the Company
to maintain, wherever possible, alternate sources of supply for its
important materials and parts. The Company maintains inventories of
steel and other purchased material.
Patents, Trademarks, Licenses
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The Company owns a number of United States and foreign patents
pertaining to the crane and foodservice products, and has presently
pending applications for patents in the United States and foreign
countries. In addition, the Company has various registered and
unregistered trademarks and licenses which are of material importance
to the Company's business.
Seasonality
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Typically, the second calendar quarter represents the Company's
best quarter in all of the business segments. Since the summer brings
along warmer weather, there is an increase in the use of ice machines.
As a result, distributors are building inventories for the increased
demand. In the cranes and related products segment, summer also
represents the main construction season. Customers require new
machines, parts, and service prior to such season. With respect to the
Marine segment, the Great Lakes shipping industry's sailing season is
normally May through November. Thus, barring any emergency
groundings, the majority of repair and maintenance work is performed
during the winter months. Accordingly, the work is typically
completed during the second calendar quarter of the year.
Competition
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All of the Company's products are sold in highly competitive
markets. Competition is at all levels, including price, service and
product performance.
Within the ice machine division, there are several manufacturers
with whom the Company competes. The primary competitors include
Scotsman Industries (tradename Scotsman and Crystal Tips), Prospect
Heights, Illinois; Welbilt Company (tradename Ice-O-Matic), New Hyde
Park, New York; and Hoshizaki American, Inc. (tradename Hoshizaki),
Peachtree City, Georgia. As noted earlier, the Company is the
leading, low-cost, producer of ice machines.
The list of competitors for the refrigeration products line
include Beverage Air, Spartanburg, South Carolina; The Delfield
Company, Mt. Pleasant, Michigan; Traulsen & Company, Inc., College
Point, New York; True Food Service Company, O'Fallon, Missouri;
Hobart, Inc., Troy, Ohio; Elliot-Williams Co., Inc., Indianapolis,
Indiana; Hussman Corporation, Bridgeton, Missouri; ThermoKool, Laurel,
Mississippi; Masterbilt, New Albany, Mississippi; W. A. Brown,
Salisbury, Nebraska; and American Panel, Ocala, Florida. The Company
is the leading producer of small undercounter refrigeration units and
large refrigerated warehouses as well as the primary or sole supplier
of walk-in refrigerator/freezers to many of the leading restaurant and
grocery chains in the United States.
With respect to crawler cranes, there are numerous domestic and
foreign manufacturers of cranes with whom the Company competes,
including American Crane Corporation, Wilmington, North Carolina; Link
Belt Construction Equipment Co., a subsidiary of Sumitomo Corporation,
Tokyo, Japan; Kobelco, Kobe Steel, Ltd., Tokyo, Japan; Mannesmann
Demag Baumaschinen, Zweibrucken, West Germany; Liebherr-Werk Ehingen
GMBH, Ehingen, West Germany; and Hitachi Construction Machinery Co.,
Ltd., Tokyo, Japan. Within the market the Company serves, lattice
boom crawler cranes with lifting capacities greater than 125 tons,
Manitowoc is a world leader of this equipment.
The competitors within the boom truck crane market include
Simon-R.O. Corp., Olathe, Kansas; National Crane, Waverly, Nebraska;
and JLG, McConnellsburg, Pennsylvania. The Company believes that its
current output of boom truck cranes ranks third among its competitors.
In the ship repair operation, the Company is one of three
operational shipyards on the Great Lakes capable of drydocking and
servicing 1000 foot Great Lakes bulk carriers; the others are Erie
Marine Enterprises, Erie, Pennsylvania, and Port Weller Dry Docks, St.
Catherines, Ontario, Canada. There are two other shipyards on the
Great Lakes, Fraser Shipyards, Inc., Superior, Wisconsin, and H.
Hansen Industries, Toledo, Ohio, with whom the Company competes for
drydocking and servicing smaller Great Lakes vessels. The Company
also competes with many smaller firms which perform top side repair
work during the winter lay-up period. In addition, there are
shipyards on the East, West and Gulf Coasts capable of converting and
reconstructing vessels of sizes that can enter the Great Lakes through
the St. Lawrence Seaway and the Wellen Canal. There are also
shipyards on the inland rivers capable of servicing smaller,
specialized vessels which the Company is capable of servicing.
Employee Relations
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The Company employs approximately 3,200 persons, of whom about
510 are salaried. The number of employees increased during calendar
1995 as a result of the Shannon acquisition. The Shannon Group, Inc.
currently employs 1,300 persons, with approximately 200 salaried.
The Company has labor agreements with 20 union locals. There
have been no work stoppages during the three years ended December 31,
1995.
Item 2. PROPERTIES
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Owned
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The Company owns foodservice manufacturing facilities located in
Manitowoc, Wisconsin; River Falls, Wisconsin; Mason City, Iowa;
Parsons, Tennessee; and Scotts Hill, Tennessee.
Manitowoc Equipment Works' production of ice machines and reach-
ins are housed in a recently expanded 368,000 square foot facility in
Manitowoc, Wisconsin. The 128,000 square foot addition was completed
during 1995 and permitted both ice machines and reach-ins to be
manufactured in the same facility.
The acquisition of The Shannon Group, Inc. included four
manufacturing facilities located in Parsons, Tennessee; River Falls,
Wisconsin; Mason City, Iowa and Scotts Hill, Tennessee. The Parsons
and River Falls facilities have approximately 212,000 and 133,000
square feet of manufacturing and office space, respectively. The
Mason City and Scotts Hill plants each have about 40,000 square feet
of manufacturing space.
Cranes and related products are manufactured at plant locations
in Manitowoc, Wisconsin; Georgetown, Texas; Bauxite, Arkansas; and
Punxsutawney, Pennsylvania. During 1995, the crane operations in
Manitowoc completed a move from the original plant located in the
central city to the existing South Works facility. South Works'
construction was completed in 1978 and is comprised of approximately
265,000 square feet of manufacturing and office space located on 76
acres. The original plant, which includes approximately 600,000
square feet of manufacturing and office space, is currently being held
for sale.
Femco Machine Co. consists of three manufacturing and office
facilities in Punxsutawney. These facilities have approximately
71,000 square feet and are located on approximately 34 acres. A
similar facility in nearby Hawthorn, Pennsylvania was sold in
November, 1995.
In 1993, the boomtruck crane operations were moved to Georgetown,
Texas. The Company purchased an existing manufacturing and office
facility totaling approximately 175,000 square feet. Previously, this
operation consisted of manufacturing and office facilities located in
McAllen, Texas, and a fabrication plant located in Reynosa, Mexico.
In June, 1987, the Company purchased an existing 20,000 square
foot facility in Bauxite, Arkansas, for the remanufacturing of used
cranes. This facility began operations in fiscal 1988.
The Company's shipyard in Sturgeon Bay, Wisconsin, consists of
approximately 55 acres of waterfront property. Four of those acres,
which connect two operating areas of the shipyard, are leased under a
long term ground lease. There is approximately 295,000 square feet of
enclosed manufacturing and office space. Facilities at the shipyard
include a 140 by 1,158 foot graving dock, the largest on the Great
Lakes. In addition, there is a 250 foot graving dock, and a 600 foot
floating drydock.
Additional properties consist primarily of a crane sales office
and warehouse facility located in Northampton, England. Sales offices
in Long Island City, New York and Seattle, Washington were sold during
the fourth quarter of 1995.
Leased
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The Company leases three manufacturing facilities for the
foodservice division including 90,000 square feet in Selmer,
Tennessee; 50,000 square feet in Greenville, Tennessee and 38,500
square feet in Bethel Springs, Tennessee. The Company also leases
approximately 11,000 square feet of office space for The Shannon
Group, Inc. in Brentwood, Tennessee. In addition, the Company leases
sales offices and warehouse facilities for cranes and related products
in Big Bend, Wisconsin; Mokena, Illinois; and Benicia, California.
Facilities are also leased in Pompano Beach, Florida for parts
manufacturing and crane re-manufacturing. Furthermore, the Company
leases the shipyard facilities at Toledo and Cleveland, Ohio for the
marine segment. These facilities include waterfront land, buildings,
and 800-foot and 550-foot graving docks.
Item 3. LEGAL PROCEEDINGS
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The information required by this item is incorporated by
reference from Note 10 to Consolidated Financial Statements on Page
31 of the 1995 Annual Report.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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No matters were submitted to security holders for a vote during
the fourth quarter of the Company's fiscal year ended December 31,
1995.
Executive Officers of the Registrant
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Each of the following officers of the Company has been elected to a
renewable one-year term by the Board of Directors. The information
presented is as of March 26, 1996.
<TABLE>
<CAPTION>
Position With Principal Position
Name Age The Registrant Held Since
- -------------- ---- ---------------------------- ------------------
<S> <C> <C> <C>
Fred M. Butler 60 President & CEO 1990
Robert K. Silva 67 Executive Vice President & COO 1994
Robert R. Friedl 41 Vice President & CFO 1992
Thomas G. Musial 44 Vice President-Human Resources 1995
Philip D. Keener 45 Treasurer 1990
E. Dean Flynn 55 Secretary 1993
</TABLE>
Fred M. Butler was elected President & Chief Executive Officer on July
17, 1990, and previously served as Senior Vice President and Chief
Operating Officer from March 31, 1989. He joined the Company as
Manager of Administration in September, 1988. Prior to such date, Mr.
Butler was employed by Tyger Construction Co., Inc., a subsidiary of
Guy F. Atkinson Company, as President and Senior Vice President.
Robert K. Silva was elected Executive Vice President and Chief
Operating Officer of the corporation on July 8, 1994, and previously
served as Vice President from May 4, 1992, and as President and
General Manager of the Manitowoc Equipment Works ("MEW"), a division
of The Manitowoc Company, Inc. He joined the Company in 1979 as
National Sales Manager and held various positions with MEW. Prior to
joining the Company, he was Vice President at Follett Corporation.
Robert R. Friedl was elected Vice President and Chief Financial
Officer on May 4, 1992, and previously served as Vice President-
Finance from August 14, 1990. He joined the Company as Assistant
Treasurer on April 18, 1988. Prior to joining Manitowoc, he served as
Chief Financial Officer with Coradian Corp.; was co-founder, Vice
President of Finance and Treasurer of Telecom North, Inc.; and Tax
Manager for Nankin, Schnoll & Co., S.C..
Thomas G. Musial was elected Vice President-Human Resources on January
31, 1995. Previously, he served as Manager of Human Resources from
January 18, 1987; and as Personnel/Industrial Relations Specialist
from August 2, 1976.
Philip D. Keener was elected Treasurer on November 13, 1990. He
joined the Company on October 1, 1990. Prior to that, Mr. Keener was
employed by Farley Industries, Inc. as Assistant Treasurer.
E. Dean Flynn was elected Secretary on February 2, 1993 and previously
served as Assistant Corporate Secretary from November 2, 1987; as
Manager of Corporate Insurance from January, 1990; and as Legal
Assistant from January 16, 1985. Prior to that, he served the Wabco
division of Dresser Industries, Inc. in numerous managerial positions
for 23 years, departing as manager of legal affairs in 1985.
PART II
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Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
--------------------------------------------------
The information required by this item is incorporated by reference
from "Quarterly Common Stock Price Range", "Ten-Year Financial
Summary and Business Segment Information," "Supplemental Quarterly
Financial Information (Unaudited)", and "Investor Information", on
pages 1, 22-23, 33 and 37 of the 1995 Annual Report.
Item 6. SELECTED FINANCIAL DATA
-----------------------
The information required by this item is incorporated by reference
from "Ten-Year Financial Summary and Business Segment Information" on
pages 22-23 of the 1995 Annual Report.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
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The information required by this item is incorporated by reference
from "Management's Discussion and Analysis of Results of Operations
and Financial Condition" on pages 18-21 of the 1995 Annual Report.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------
The financial statements required by this item are incorporated by
reference from pages 24-33 of the 1995 Annual Report. Supplementary
financial information is incorporated by reference from "Supplemental
Quarterly Financial Information (Unaudited)" on page 33 of the 1995
Annual Report. See also the reports of the former independent public
accountants included as part of Item 14 of this report and
incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
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None.
PART III
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Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------
The information required by this item is incorporated by reference
from "Compliance with Section 16(a) of the Exchange Act" on page 3 of
the 1996 Proxy Statement and from "Election of Directors" on pages 3-
4 of the 1996 Proxy Statement. See also "Executive Officers of the
Registrant" in Part I hereof, which is incorporated herein by
reference.
Item 11. EXECUTIVE COMPENSATION
----------------------
The information required by this item is incorporated by reference
from "Compensation of Directors", "Executive Compensation",
"Contingent Employment Agreements", and "Supplemental Retirement
Agreements" on pages 5-8 and 13 of the 1996 Proxy Statement.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
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The information required by this item is incorporated by reference
from "Ownership of Securities" on pages 2-3 of the 1996 Proxy
Statement.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
None.
PART IV
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Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
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(a) Documents filed as part of this Report.
(1) Financial Statements:
The following Consolidated Financial Statements are filed as
part of this report under Item 8, "Financial Statements and
Supplementary Data":
Report of Independent Public Accountants on fiscal year ended
December 31, 1995 and transition period ended December 31, 1994
Financial Statements
Report of Former Independent Public Accountants on fiscal
years ended July 2, 1994 and July 3, 1993 Financial
Statements
Consolidated Statements of Earnings for the periods ended
December 31, 1995, December 31, 1994, July 2, 1994 and July 3,
1993.
Consolidated Balance Sheets as of December 31, 1995 and
December 31, 1994.
Consolidated Statements of Cash Flows for the periods ended
December 31, 1995, December 31, 1994, July 2, 1994 and July 3,
1993.
Consolidated Statements of Stockholders' Equity for the
periods ended December 31, 1995, December 31, 1994, July 2,
1994 and July 3, 1993.
Summary of Significant Accounting Policies.
Notes to Consolidated Financial Statements.
(2) Financial Statement Schedules:
Financial Statement Schedules for the year ended December 31,
1995, transition period ended December 31, 1994, and fiscal
years ended July 2, 1994 and July 3, 1993:
<TABLE>
<CAPTION>
Filed
Schedule Description Herewith
-------- ----------- ---------
<S> <C> <C>
II Valuation and Qualifying Accounts X
Report of Independent Public
Accountants on fiscal year
ended December 31, 1995 and
transition period ended
December 31, 1994 Financial
Statement Schedules X
Report of Former Independent
Public Accountants on fiscal
years ended July 2, 1994 and
July 3, 1993 Financial Statement
Schedules X
</TABLE>
All other financial statement schedules not listed have been
omitted since the required information is included in the
consolidated financial statements or the notes thereto, or is not
applicable or required under rules of Regulation S-X.
(b) Reports on Form 8-K:
During the fourth quarter of calendar 1995, a report on Form 8-K
dated as of October 11, 1995 was filed indicating that as a result of
an inability of the parties to agree on certain terms of a definitive
purchase agreement, the letter of intent for the purchase by the
Company of The Shannon Group, Inc. was terminated by its terms.
A second report on Form 8-K dated as of October 25, 1995 was
filed stating that on October 24, 1995 the Company entered into a
definitive agreement to acquire 100% ownership of The Shannon Group,
Inc.
A third report on Form 8-K dated as of December 1, 1995 was filed
stating that the Company had completed its purchase of the outstanding
common stock of The Shannon Group, Inc.
After the fourth quarter end, Amendment No. 1 to the Form 8-K
dated as of December 1, 1995 was filed to provide the following
historical financial statements of The Shannon Group, Inc. as well as
the following pro forma statements of the Company reflecting the
acquisition of The Shannon Group, Inc. pursuant to paragraphs (a)(4)
and (b)(2) of Item 7 of Form 8-K:
1. Audited consolidated financial statements of The Shannon
Group, Inc. and Subsidiary:
Report of Independent Accountants
Consolidated Balance Sheets as of December 31, 1994 and 1993
Consolidated Statements of Operations for the Years Ended
December 31, 1994, 1993 and 1992
Consolidated Statements of Changes in Shareholders' Equity
for the Years Ended December 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1994, 1993 and 1992
Note to Consolidated Financial Statements
2. Unaudited interim consolidated financial statements of The
Shannon Group, Inc. and Subsidiary:
Consolidated Condensed Statements of Operations for the
Three and Nine Months Ended September 30, 1995 and 1994
Consolidated Condensed Balance Sheet at September 30, 1995
Consolidated Condensed Statements of Cash Flows for the Nine
Months Ended September 30, 1995 and 1994
Notes to Unaudited Interim Financial Data
3. Unaudited pro forma consolidated condensed financial
statements of The Manitowoc Company, Inc.:
Introduction
Pro Forma Consolidated Condensed Statements of Operations
for the Year Ended December 31, 1994
Pro Forma Consolidated Condensed Balance Sheet
as of September 30, 1995
Pro Forma Consolidated Condensed Statement of
Operations for the Nine Months Ended September 30, 1995
Notes to Pro Forma Consolidated Condensed Financial Statements
(c) Exhibits:
See Index to Exhibits immediately following the signature page of
this report, which is incorporated herein by reference.
REPORT OF FORMER INDEPENDENT PUBLIC ACCOUNTANTS
To The Manitowoc Company, Inc.:
We have audited the consolidated balance sheets of The Manitowoc
Company, Inc. (a Wisconsin corporation) as of July 2, 1994 and July 3,
1993, and the related statements of earnings, stockholders' equity and
cash flows for the fiscal years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of The
Manitowoc Company, Inc. as of July 2, 1994 and July 3, 1993, and the
results of its operations and its cash flows for the years then ended
in conformity with generally accepted accounting principles.
As explained in the Summary of Significant Accounting Policies of the
Consolidated Financial Statements, effective June 28, 1992, the
Company changed its method of accounting for retiree health care
benefits and income taxes.
/s/ Arthur Andersen LLP
-------------------------
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
July 28, 1994
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors and Stockholders
The Manitowoc Company, Inc. and Subsidiaries
Our report on the consolidated financial statements of The Manitowoc
Company, Inc. and Subsidiaries has been incorporated by reference in
the Form 10-K from page 33 of the 1995 Annual Report of The Manitowoc
Company, Inc. In connection with our audits of such financial
statements, we have also audited the related consolidated financial
statement schedule listed in the index on page 12 of this Form 10-K.
In our opinion, the consolidated financial statement schedule referred
to above, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly, in all
material respects, the information required to be included therein.
Milwaukee, Wisconsin /s/ Coopers & Lybrand L.L.P.
February 6, 1996
REPORT OF FORMER INDEPENDENT PUBLIC ACCOUNTANTS
ON SUPPLEMENTARY SCHEDULES
We have audited in accordance with generally accepted auditing
standards, the financial statements included in The Manitowoc Company,
Inc.'s annual report to shareholders incorporated by reference in this
Form 10-K, and have issued our report thereon dated July 28, 1994.
Our audit was made for the purpose of forming an opinion on those
statements taken as a whole. The schedule listed in Item 14(a)(2) are
the responsibility of the Company's management and are presented for
purposes of complying with the Securities and Exchange Commission's
rules and are not part of the basic financial statements. These
schedules have been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion,
fairly state in all material respects the financial data required to
be set forth therein in relation to the basic financial statements
taken as a whole.
/s/ Arthur Andersen LLP
--------------------------
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
July 28, 1994.
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
AND SUBSIDIARIES
SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS
FOR THE FISCAL YEARS ENDED JULY 3, 1993, JULY 2, 1994,
TRANSITION PERIOD ENDED DECEMBER 31, 1994,
AND CALENDAR YEAR ENDED DECEMBER 31, 1995
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND END OF
DESCRIPTION OF PERIOD EXPENSES DEDUCTIONS PERIOD
------------ ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
YEAR ENDED JULY 3, 1993:
Allowance for doubtful accounts $ 383,594 $ 453,993 $ (30,385) $ 807,202
YEAR ENDED JULY 2, 1994:
Allowance for doubtful accounts $ 807,202 $ 702,079 $ (732,536) $ 776,745
PERIOD ENDED DECEMBER 31, 1994:
Allowance for doubtful accounts $ 776,745 $ 419,442 $ -- $ 1,196,317
YEAR ENDED DECEMBER 31, 1995:
Allowance for doubtful accounts $ 1,196,317 $ 283,843 $ (114,804) $ 1,365,356
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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:
Dated: March 29, 1996
THE MANITOWOC COMPANY, INC.
By: /s/ Fred M. Butler
----------------------------------
Fred M. Butler
President & Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons
constituting a majority of the Board of Directors on behalf of the
registrant and in the capacities and on the dates indicated:
/s/ Fred M. Butler March 29, 1996
- -----------------------------------------
Fred M. Butler, President & CEO, Director
/s/ Robert K. Silva March 29, 1996
- -----------------------------------------
Robert K. Silva, Executive Vice President
& COO, Director
/s/ Robert R. Friedl March 29, 1996
- -----------------------------------------
Robert R. Friedl, Vice President & CFO
/s/ Gilbert F. Rankin, Jr. March 29, 1996
- -----------------------------------------
Gilbert F. Rankin, Jr., Director
/s/ George T. McCoy March 29, 1996
- -----------------------------------------
George T. McCoy, Director
/s/ Guido R. Rahr, Jr. March 29, 1996
- -----------------------------------------
Guido R. Rahr, Jr., Director
March 29, 1996
- -----------------------------------------
James P. McCann, Director
March 29, 1996
- -----------------------------------------
Dean H. Anderson, Director
March 29, 1996
- -----------------------------------------
Robert S. Throop, Director
THE MANITOWOC COMPANY, INC.
ANNUAL REPORT ON FORM 10-K
FOR THE CALENDAR YEAR ENDED DECEMBER 31, 1995
INDEX TO EXHIBITS
Exhibit Filed
No. Description Herewith
- ------- ----------- ---------
2.1 (a) * Stock Purchase Agreement dated as of October 24, 1995,
for the acquisition of The Shannon Group, Inc. by The
Manitowoc Company, Inc. (filed as Exhibit 2 to the
Company's Report on Form 8-K, dated as of October 25,
1995 and incorporated herein by reference).
2.1 (b) * First Amendment to Stock Purchase Agreement, dated as
of December 1, 1995, for the acquisition of The Shannon
Group, Inc. by The Manitowoc Company, Inc. (filed as
Exhibit 2.2 to the Company's Report on Form 8-K, dated
as of December 1, 1995 and incorporated herein by
reference).
3.1 Amended and Restated Articles of Incorporation as
amended on November 5, 1984 (filed as Exhibit 3(a) to
the Company's Annual Report on Form 10-K for the fiscal
year ended June 29, 1985 and incorporated herein by
reference).
3.2 Restated By-Laws (as amended through May 22, 1995)
including amendment to Article II changing the date of
the annual meeting (filed as Exhibit 3.2 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1995 and incorporated herein by
reference).
4.1(a) Rights Agreement dated September 5, 1986 between the
Registrant and Morgan Shareholder Services Trust
Company (filed as Exhibit 4 to the Company's Annual
Report on Form 10-K for the fiscal year ended June 28,
1986 and incorporated herein by reference).
4.1(b) First amendment to Rights Agreement dated August 12,
1988 (filed as Exhibit 1 to the Company's Report on
Form 8-K dated August 26, 1988 and incorporated herein
by reference).
4.2 Credit Agreement, dated as of December 1, 1995, among The
Manitowoc Company, Inc., as Borrower, certain subsidiaries
from time to time parties thereto, as Guarantors, the
several Lenders, and NationsBank, N.A., as Agent (filed as
Exhibit 4.1 to the Company's Report on Form 8-K dated as of
December 1, 1995 and incorporated herein by reference).
4.3 Security and Pledge Agreement, dated as of December 1,
1995, among The Manitowoc Company, Inc., certain of its
subsidiaries and NationsBank, N.A. (filed as Exhibit
4.2 to the Company's Report on Form 8-K dated as of
December 1, 1995 and incorporated herein by reference).
4.4 Articles III, V, and VIII of the Amended and Restated
Articles of Incorporation (see Exhibit 3.1 above).
10.1(a) ** The Manitowoc Company, Inc. Deferred Compensation Plan
effective August 20, 1993 (the "Deferred Compensation
Plan") (filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-8 filed June 23,
1993 (Registration No. 33-65316) and incorporated
herein by reference).
10.1(b) ** Amendment to Deferred Compensation Plan adopted by the
Board of Directors on April 26, 1994 (filed as Exhibit
10.1(b) to the Company's Annual Report on Form 10-K for
the fiscal year ended July 2, 1994 and incorporated
herein by reference).
10.2 ** The Manitowoc Company, Inc. Management Incentive
Compensation Plan (Economic Value Added (EVA) Bonus Plan)
effective July 4, 1993, and as amended May 22, 1995 (filed
as Exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1995 and incorporated
herein by reference).
10.3 ** Form of Contingent Employment Agreement between the
Company and Messrs. Butler, Flynn, Friedl, Keener,
Musial and Silva, and certain other employees of the
Company (filed as Exhibit 10(c)to the Company's Annual
Report on Form 10-K for the fiscal year ended July 1,
1989 and incorporated herein by reference).
10.4 ** Form of Indemnity Agreement between the Company and
each of the directors, executive officers and certain
other employees of the Company (filed as Exhibit 10(d)
to the Company's Annual Report on Form 10-K for the
fiscal year ended July 1, 1989 and incorporated herein
by reference).
10.5 ** Supplemental Retirement Agreement between Fred M. Butler
and the Company dated March 15, 1993 (filed as Exhibit
10(e) to the Company's Annual Report on Form 10-K for the
fiscal year ended July 3, 1993 and incorporated herein
by reference).
10.6 ** Supplemental Retirement Agreement between Robert K. Silva
and the Company dated January 2, 1995 (filed as Exhibit
10 to the Company's Report on Form 10-Q for the transition
period ended December 31, 1994 and incorporated herein by
reference).
10.7 * The Manitowoc Company, Inc. 1995 Stock Plan (filed as
Appendix A to the Company's Proxy Statement dated April 2,
1996 for its 1996 Annual Meeting of Stockholders and
incorporated herein by reference).
13 Portions of the 1995 Annual Report to Shareholders of The X
Manitowoc Company, Inc. incorporated by reference into
this Report on Form 10-K.
21 Subsidiaries of The Manitowoc Company, Inc. X
23.1 Consent of Coopers & Lybrand L.L.P., the Company's
Independent Public Accountants. X
23.2 Consent of Arthur Andersen LLP the Company's Former
Independent Public Accountants. X
27 Financial Data Schedule. 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.
** Management contracts and executive compensation plans and
arrangements required to be filed as exhibits pursuant to Item 14(c)
of Form 10-K.
<TABLE>
<CAPTION>
PORTIONS OF THE 1995 ANNUAL REPORT TO SHAREHOLDERS
OF THE MANITOWOC COMPANY, INC. INCORPORATED
BY REFERENCE
QUARTERLY COMMON STOCK PRICE RANGE
Year Ended Transition Period Ended Year Ended Year Ended
December 31, 1995 December 31, 1994 July 2, 1994 July 3, 1993
------------------- ----------------------- -------------------- ---------------------
High Low Close High Low Close High Low Close High Low Close
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1st Quarter $25.00 $21.00 $24.88 $27.00 $24.00 $27.00 $33.25 $30.38 $31.50 $23.50 $19.00 $23.13
2nd Quarter 28.88 24.88 28.88 26.88 21.50 21.63 33.13 31.00 32.25 27.50 22.50 26.00
3rd Quarter 30.00 26.88 29.63 -- -- -- 32.38 27.75 27.75 29.50 24.88 28.00
4th Quarter 30.63 28.13 30.63 -- -- -- 28.25 24.88 25.13 32.50 27.75 32.25
</TABLE>
The company's common stock is traded on the New York Stock Exchange.
Prior to May 27, 1993, the stock was traded over-the-counter on the NASDAQ
National Market System.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations for the Period Ended December 31, 1995,
Transition Period Ended December 31, 1994 and Fiscal Years Ended July
2, 1994 and July 3, 1993.
The Manitowoc Company and its subsidiaries manufacture and distribute
products as well as provide customer support services to a broad range
of capital goods markets, both domestically and internationally.
These markets include: foodservice equipment for restaurants, hotels,
and other institutions; cranes for commercial construction and cargo
handling; and ship-repair, construction, and conversion, primarily for
Great Lakes and inland waterway carriers. Acquisitions and corporate
restructuring have significantly affected these operating segments in
terms of sales, earnings, economic value-added (EVA(TM)), and their
relative operational and financial importance to the company going
forward. Additional information on these business segments is
presented on pages 6 through 17.
On August 9, 1994, the board of directors changed the company's
fiscal year-end from the Saturday nearest to June 30 of each calendar
year to December 31 of each calendar year. Such change in fiscal
years resulted in a transition period from July 3, 1994 through
December 31, 1994. Results of operations for the transition period
are presented in the company's consolidated financial statements in
this Annual Report.
This Management's Discussion and Analysis, as well as certain
other parts of this Annual Report, 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, including, among others, the following factors for
each of the company's three businesses: Foodservice - demographic
changes affecting the number of women in the workforce and the growth
in population and household incomes; serving large restaurant chains
as they expand their global operations; specialty foodservice market
growth; and the demand for equipment suitable for small kiosk-type
locations; Cranes and Related Products - innovative product
development acceptance by the market; the cyclical nature of the
construction industry; growth in the world market for heavy cranes;
competitive pricing pressures for heavy cranes; and the demand for
used equipment in developing economies; Marine - shipping volume
fluctuations based on performance of the steel industry; five-year
drydocking schedule; and reducing seasonality through non-marine
repair work.
Market Conditions
North American economic conditions for all three of the company's
business segments improved in 1995 compared with fiscal 1994. The
company believes that continued growth in the restaurant industry,
particularly among high volume chains; expansion of fast food
franchises into non-traditional locations such as automobile service
stations; growth in health care facilities; and continued recovery in
the hotel and lodging industry were primary contributors to higher
foodservice equipment demand in nearly all market areas in North
American during 1995.
With the notable exception of its truck-mounted telescopic cranes
and the introduction of its newest self-erecting, lattice-boom crawler
crane, the Model 888, an anemic market in heavy construction equipment
continues to moderate growth for most crane and related products units
of the company. Despite the well documented need for a rebuilding of
America's infrastructure- which could drive a recovery of this
business segment - federal, state, and local funding for much needed
projects was limited in 1995, as it has been for the past several
years.
Near capacity utilization of U.S. and Canadian maritime fleets on
the Great Lakes, reflecting the general economic strength of the heavy
industry and manufacturing sectors of the economy in 1995, provided
strong demand for ship repair and scheduled fleet maintenance at the
company's facilities in Toledo and Cleveland, Ohio and Sturgeon Bay,
Wisconsin.
Non-U.S. sales showed improvement during 1995. The Pacific Rim
continues to drive sales of refrigeration equipment outside the U.S.
Strong hotel and chain restaurant demand for refrigeration and ice-
making equipment could well continue through the end of the decade.
Lifestyle changes in the Asia-Pacific markets, some of which are
beginning to mirror cultural preferences in the U.S. for frozen and
refrigerated products, are contributing to strong growth trends for
our restaurant products in these markets. Our strategic alliance and
partnership with Hangzhou Household Electric Appliances in the
People's Republic of China anticipated these trends and should add
measurably to our international presence and position in the Asian
markets. Our new distribution center in Rotterdam, Holland, helped
increase ice machine sales by 50% in Europe in 1995 despite the
market's less than robust economic picture. Although European
industry sales of cranes continued at the depressed levels of the past
several years, and Asia proved highly competitive, sales of
refurbished crane products into less developed countries proved
encouraging and may become another factor driving replacement orders
domestically. Marine repair and maintenance remains primarily a
domestic source of revenue although the North American Free Trade
Agreement has provided increased potential service access to the large
fleet of Canadian vessels sailing the Great Lakes.
The North American general economy continued strong in 1995 and,
in our opinion, could likely remain as such for most of 1996, at least
through this year's U.S. elections. Continued economic strength,
coupled with related gains in corporate profits and strong employment
growth, stimulated spending on durable goods in 1995. We participated
in this growth. The year proved one in which the economy provided a
solid base for increased sales in both the company's foodservice and
marine operations during 1995.
The company anticipates its acquisition of The Shannon Group,
Inc., (Shannon), a manufacturer of commercial refrigerators, freezers,
and related products, in December 1995 will strengthen its future.
The most obvious expected effects will be a stronger market position
within the foodservice industry and a decided shift in the company's
product mix favoring the foodservice equipment industry. Shannon's
impact on revenue and earnings is expected to reduce the historically
cyclical nature of our company.
Financial Goals
In our last annual report, which reported on fiscal year ended July 2,
1994, we stated weak demand, competitive pricing, and less than
optimal asset utilization had caused lower sales levels and unstable
earnings. The root of the problem had been with us for a long time.
To correct the situation, we aggressively initiated the EVA concept
into company operations and established a number of short-term
measures to more properly size our operating units to match their
business potential. Longer term, we set our focus on improved
quality, reduced costs, and greater responsiveness to customer needs.
These efforts were continued into calendar 1995 with positive results.
The product of such efforts has been substantial 1995 sales, earnings,
and EVA growth in all segments.
Operating Results
The following table illustrates the relationship between various
components of operations, stated as a percent of net sales, for the
year ended December 31, 1995, the transition period ended December 31,
1994, and fiscal years ended July 2, 1994 and July 3, 1993.
<TABLE>
<CAPTION>
Transition
Year Period Fiscal Year Fiscal Year
Ended Ended Ended Ended
Dec. 31, Dec. 31, July 2, July 3,
Percent of Net Sales 1995 1994 1994 1993
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales 100.0 100.0 100.0 100.0
- -----------------------------------------------------------------------------------------
Cost of sales 75.9 74.7 75.3 80.0
- -----------------------------------------------------------------------------------------
Gross profit 24.1 25.3 24.7 20.0
- -----------------------------------------------------------------------------------------
Engineering, selling &
administrative expenses 16.7 20.8 17.0 15.8
- -----------------------------------------------------------------------------------------
Plant relocation costs NA 11.3 NA 1.2
- -----------------------------------------------------------------------------------------
Operating income (loss) 7.4 (6.8) 7.7 3.0
- -----------------------------------------------------------------------------------------
Interest and other 0.0 0.1 0.5 0.2
- -----------------------------------------------------------------------------------------
Earnings (loss) before taxes
& other items 7.4 (6.7) 8.2 3.2
- -----------------------------------------------------------------------------------------
Income taxes (benefit) 2.7 (2.6) 3.1 0.9
- -----------------------------------------------------------------------------------------
Net earnings (loss) before
cumulative effect of change
in accounting principle 4.7 (4.1) 5.1 2.3
- -----------------------------------------------------------------------------------------
Cumulative effect of change
in accounting principle NA NA NA (3.7)
- -----------------------------------------------------------------------------------------
Net earnings (loss) 4.7 (4.1) 5.1 (1.4)
- -----------------------------------------------------------------------------------------
</TABLE>
During calendar 1995, The Manitowoc Company's consolidated net sales
rose 13.7% to $313 million when compared with net sales of $275.4
million for the full fiscal year 1994. The increase in net sales can
be attributed to a 22.2% increase in foodservice equipment sales, an
8.7% increase in crane sales, and a 13.5% increase in marine division
sales. The rebound in sales can be attributed primarily to: (1)
increased demand for ice machines both domestically and internationally;
(2) continued sales strength in boom trucks, along with marked
improvements in productivity and increased shipments at the Manitex plant;
(3) the acquisition of Shannon; (4) strong growth in the crane parts and
refurbishing markets, served by our Aftermarket Group; (5) the start-up
of production and shipment of West-Manitowoc crawler cranes; and (6) greater
demand for marine repair and scheduled maintenance on Great Lakes vessels.
Net sales for the transition period totaled $123.9 million, a
decline of 3.8% from the first half of fiscal 1994. Even though
foodservice sales increased 10% from the comparable period in the
prior year due to favorable market conditions, this was offset by a
sales decrease of 10% in cranes and related products and a 13%
decrease in marine segment sales. The sales decline in cranes and
related products was primarily related to the soft market for heavy-
lift cranes at our large-crane division. The decrease in marine sales
was the result of fewer drydockings and lower volumes of emergency
repair work.
During fiscal 1994, The Manitowoc Company's consolidated sales
were down slightly to $275.4 million from $278.6 million in 1993. The
1% decrease in 1994 sales was caused by a 13% decline in crane sales,
which was not fully offset by a 14% increase in foodservice sales, and
a 40% increase in marine sales.
Overall, the 1995 gross margin percentage was 24.1%, down
slightly from the 24.7% reported for fiscal 1994 but still
substantially higher than the 20.0% reported in fiscal 1993. The
gross margin in 1995 was affected by the $2.8 million cost of
consolidating Manitowoc Engineering Company's crawler crane
manufacturing facilities. The margin in fiscal 1993 was adversely
affected by a $9.7 million crane inventory charge and a $4.3 million
crane product liability settlement. Gross margin percentages were
25.3% and 25.2% for the transition period and the comparable prior
year period, respectively.
Engineering, selling and administrative expenses in 1995 were
$52.3 million, up from the $46.8 million reported for fiscal 1994
because of the acquisition of Femco Machine Co. (Femco) in February
1994 and Shannon in December 1995, and increased marketing and product
development efforts. However, on a percentage basis, these expenses
were in line with the recent past. In fiscal 1993, these expenses
stood at $44.1 million, or 15.8% of net sales.
Engineering, selling, and administrative expenses increased from
$21.8 million in the 26 weeks ended January 1, 1994 to $25.8 million
for the transition period ended December 31, 1994. The increase is
the result of our Femco acquisition, six months of expenses for West-
Manitowoc at December 31, 1994 versus three months for January 1,
1994, and additional costs related to the development of foreign
offices.
In the transition period ended December 31, 1994, the company's
decision to consolidate its large-crane manufacturing to a single site
resulted in a $14 million charge to operating 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 facility is being marketed. (See Note 9 of
the Notes to Consolidated Financial Statements).
Operating earnings in 1995 rose in each business segment for a
combined 9.8% improvement over those of fiscal 1994. Earnings from
operations in 1995 were $23.2 million compared with operating earnings
of $21.1 million in fiscal 1994. In fiscal 1993, operating earnings
stood at $11.6 million before plant consolidation charges. In fiscal
1993, the company also adopted Statement of Financial Accounting
Standards ("SFAS") No. 106, "Employer's Accounting For
Postretirement Benefits Other Than Pensions," and SFAS No. 109,
"Accounting For Income Taxes," effective June 28, 1992. The
cumulative effect of adopting these statements was recorded as a
charge to earnings in fiscal 1993 of $8.0 million and $2.2 million for
SFAS Nos. 106 and 109, respectively.
The loss from operations for the transition period was $8.5
million compared to earnings from operations of $10.6 million for the
comparable period in the prior year. Without the plant consolidation,
operating earnings as a percentage of revenues for the transition
period would have been 4.5% compared to 8.2% in the comparable prior
period. The decrease was attributed to the increase in engineering,
selling, and administrative expenses.
The effective income tax rate for calendar 1995 was 37.0%, down
from the 37.8% in fiscal 1994 and up from the 29.3% effective rate in
fiscal 1993. The decrease in the effective tax rate, calendar 1995
versus fiscal 1994, was due primarily to the utilization of foreign
tax credits. The lower rate in fiscal 1993 reflected the utilization
of state loss and credit carryforwards generated in a corporate
restructuring in 1990. The effective income tax rate for the
transition period was 39.0% compared to 37.6% for the comparable
period ended January 1, 1994.
Net earnings increased to $14.6 million, or $1.90 per share, in
calendar 1995. Net earnings were up only slightly from the $14.0
million reported in fiscal 1994, while earnings per share were up
18.1% due to the reduction in shares outstanding. The company
reported a loss of $3.9 million, or $0.40 per share, in fiscal 1993.
The weighted average number of shares outstanding totaled 7.7 million
during calendar 1995 and 8.7 million in fiscal 1994. The weighted
average number of shares outstanding in fiscal 1993 was 9.7 million
shares. The earnings decline in 1993 was due to crane inventory
charges, a crane product liability settlement, Manitex relocation
expenses, and the implementation of SFAS 106 and SFAS 109.
The net loss for the transition period was $5.1 million, or 66
cents per share, compared with net earnings of $7.2 million, or 79
cents per share, for the comparable period in the prior year. Without
the plant consolidation charge, earnings for the transition period
would have been $3.5 million, or 45 cents per share. The weighted
average number of shares outstanding were 7.7 million and 9.0 million
during the transition period and the comparable prior year period,
respectively.
Foodservice
Foodservice products revenues accounted for 36.3% of total
company sales in 1995, rising 22.1% to $113.9 million. Net sales in
fiscal 1994 and 1993 were $93.2 million and $81.4 million,
respectively. With the acquisition of Shannon for cash effective
December 1, 1995, Manitowoc added one of the leading manufacturers of
commercial refrigeration equipment to its foodservice group. While
this addition had minimal impact in calendar 1995, it will make
foodservice Manitowoc's largest business segment and have a
significant positive impact on the company going forward - both in
terms of sales and earnings. Based on the synergy between the two
companies, significant growth opportunities are anticipated for this
segment. Nineteen ninety-five also saw the formation of a joint
partnership with Hangzhou Household Electric Appliance Industrial
Corporation to supply ice machines to China and the Pacific Rim. We
anticipate that the foodservice business will continue to expand,
driven by growth in kiosk locations, the ongoing consolidation from
single location restaurants to chain operations, and the expansion of
chains into less developed markets outside the United States.
The fiscal 1994 increase in foodservice products revenues from
fiscal 1993 is due to steady growth in reach-in refrigerator and
freezer sales, a generally improving North American ice machine
market, and continued success of the new B-models introduced during
the second quarter of fiscal 1993.
Operating earnings in the foodservice segment grew 5.1% in
calendar 1995 to $22.7 million from $21.6 million in fiscal 1994.
Operating earnings were $18.3 million in fiscal 1993. Foodservice
equipment sales and services accounted for 76% of the company's total
operating earnings from its three business segments in 1995.
Operating margins declined in 1995 due to increases in ice machine
material costs (primarily copper) and the acquisition of Shannon.
Operating earnings in the foodservice segment jumped to $21.6 million
in fiscal 1994, compared to $18.3 million in fiscal 1993 on
continually increasing revenues. Operating margins have held steady
at about 23% during these periods.
As the foodservice segment benefited from increased demand for
ice machines, sales for the transition period of $45.0 million
increased 10.2% over the same period in the prior year. However,
operating earnings of $9.4 million grew only 7.4% in the transition
period, from $8.8 million, in the comparable prior year period. This
was the result of costs associated with a plant expansion project and
production line moves made to increase manufacturing efficiencies.
Cranes & Related Products
Cranes and related products sales rose in calendar 1995 compared
to fiscal 1994 and accounted for 54.2% of total company sales. Net
sales for this business segment in calendar 1995 were $169.9 million,
an 8.7% increase over the $156.3 million in fiscal 1994. Crane sales
were $178.6 million in fiscal 1993. The 1995 increase in revenues
over fiscal 1994 was largely due to the increase in Manitex sales,
attributable to the significant increase in productivity following the
consolidation during fiscal 1993, and the acquisition of Femco in
1994. West-Manitowoc has successfully captured a large portion of the
rental market for small self-erecting cranes, and has also made a
strong contribution to the increase in 1995 revenues. Partially
offsetting these increases was a 25% drop in large crawler crane
shipments, reflecting weak demand and the cyclical nature of that
business. The decline in revenues in fiscal 1994 from fiscal 1993 was
largely caused by a decline in large crawler crane orders. This
decline was experienced at our large crawler crane manufacturer and
our company-owned dealerships.
Backlogs for all crane products at the end of calendar 1995, and
fiscal years 1994 and 1993 were $85.8 million, $26.9 million, and
$57.7 million, respectively.
The quality and durability of Manitowoc cranes has created a high
demand for used equipment in third world countries and developing
economies where import tariffs on used equipment are much lower than
on new equipment. The Aftermarket Group (Femco and Manitowoc Re-
Manufacturing) provides access to these foreign markets. A strong
resale market for used cranes makes it more attractive for new
equipment buyers to upgrade their fleet with the most technically
advanced and efficient cranes available. Sales and service for
refurbished cranes and draglines as well as aftermarket sales for non-
Manitowoc parts increased in calendar 1995 compared to fiscal 1994.
Crane segment operating earnings in calendar 1995 were $3.2
million, or 11% of the company's total segment operating income,
compared to $2.3 million in fiscal 1994 and a loss of $2.0 million in
fiscal 1993. Fiscal 1994 operating margins were adversely affected by
losses in the truck-mounted crane and company-owned dealership
businesses, as well as costs incurred in the formation and start-up of
West-Manitowoc. The 1993 loss included a $9.7 million charge for
inventory write downs, and $4.3 million for a product liability
settlement.
Sales and operating earnings for cranes and related products for
the transition period were $71.0 million and $0.9 million,
respectively. Sales and operating earnings were $78.9 million and
$3.1 million, respectively, for the comparable period in the prior
year. Sales and operating earnings increases at our boom-truck
facility and the acquisition of Femco did not offset the declines at
our large-crane company. The declines at the large-crane company were
attributable to the soft market for heavy-lift cranes. The backlog
for cranes and related products at December 31, 1994 was $18.7
million, compared to $33.3 million at the end of the comparable prior
year period.
Marine
Marine segment sales in calendar 1995 rose 13.5% to $29.5
million, compared to $26.0 million in fiscal 1994 and $18.5 million in
fiscal 1993. Marine sales represented 9.4% of the company's total
sales for 1995. The acquisition of the Toledo and Cleveland ship-
repair operations at the end of 1992 added $9.4 million to sales
during fiscal 1993. A very active Great Lakes fleet has spurred
demand for ship repair, maintenance, and conversion services as well
as resulting in more casualty work. Manitowoc's marine segment is the
leading provider of ship repair, maintenance, and conversion services
on the Great Lakes.
Calendar 1995 witnessed a 64% increase in marine segment
operating earnings versus fiscal 1994. The marine segment reported
operating earnings of $4.0 million, or 13.4% of total company segment
operating income during 1995, up from $2.4 million in fiscal 1994 and
$0.6 million in fiscal 1993. The increase in earnings over this
three-year period reflects higher revenues and a more favorable
product mix.
Sales for the transition period were $8.0 million compared to
$9.1 million for the same period last year. In addition, a net loss
of $0.8 million in the transition period compares to earnings of $1.1
million for the comparable period last year. Fewer drydockings and
less emergency repair work than was performed in the prior year
contributed to this shortfall.
Liquidity & Capital Resources
Cash flows from operations in calendar 1995 were $16.4 million
compared to $37.0 million in fiscal 1994 and $62.7 million in fiscal
1993. Cash flows in 1994 and 1993 included $21.1 million and $45.5
million, respectively, from reductions in working capital, primarily
in the crane segment. Working capital decreased $6.8 million during
the transition period due to a seasonal inventory buildup of ice-cube
machines. The principle uses of cash in calendar 1995 were the
payment of dividends of $7.7 million and capital expenditures of $19.2
million, which included $13.6 million to consolidate and modernize the
manufacturing operations of our large crawler crane company and $3.0
million to complete the expansion of our ice machine and reach-in
refrigerator/freezer facility.
Cash and marketable securities were $16.6 million at December 31,
1995 as compared to $16.2 million at December 31, 1994. Since
September 8, 1992, the board of directors has authorized the company
to repurchase a total of 3 million shares of common stock. During
calendar 1995, the company did not repurchase any shares. During
fiscal 1994, the company repurchased 1.1 million shares of its common
stock through open market purchases at an average cost of $29 per
share. At the end of the 1995, 354,000 shares remained under
authorization for repurchase.
On December 1, 1995, the company purchased The Shannon Group.
The aggregate consideration paid by the company for Shannon was $127
million which is net of cash acquired of $651,000, 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. At December 31, 1995, short-term borrowings include $7.0
million which was outstanding under the revolving loan portion of the
Credit Agreement. (See Note 5 and Note 8 of the Notes to Consolidated
Financial Statements).
Inventories stood at $52.9 million at the end of 1995, including
the $10.5 million of inventories acquired with Shannon. The balance
of the $16.1 million increase in inventories during 1995 was caused by
the increase in production at our large crawler crane company.
The company expects that current cash reserves 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 capital expenditures.
Contingencies
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 the 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 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 $0.2
million, $1.6 million, and $0.5 million for the year ended December
31, 1995, and fiscal years 1994 and 1993, respectively, for its
estimated portion of the cleanup costs. There were no expenses
incurred during the transition period ended December 31, 1994.
<TABLE>
<CAPTION>
Ten-Year Financial Summary & Business Segment Information
(Thousands of dollars, except shares and per share data)
Pro Forma Transition FISCAL YEARS
Calendar Calendar Calendar ----------------------------------------
1995 1994(2) 1994(2) 1994 1993 1992
--------- -------- -------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
NET SALES
Foodservice $113,814 $ 97,321 $ 44,996 $ 93,171 $ 81,424 $ 74,175
Cranes & related products 169,866 148,355 70,958 156,253 178,630 155,743
Marine 29,469 24,782 7,952 25,956 18,504 16,471
- ---------------------------- ------- ------- -------- ------- ------- -------
Total $313,149 $270,458 $123,906 $275,380 $278,558 $246,389
- ---------------------------- ------- ------- -------- ------- ------- -------
Gross margin 75,470 $ 66,769 $ 31,302 $ 67,924 $ 55,785 $ 54,443
- ---------------------------- ------- ------- -------- ------- ------- -------
EARNINGS (LOSS) FROM OPERATIONS
Foodservice $ 22,729 $ 22,286 $ 9,426 $ 21,637 $ 18,311 $ 17,585
Cranes & related products 3,179 17 870 2,275 (1,961) (850)
Marine 4,024 516 (799) 2,447 593 278
General corporate (6,780) (6,832) (3,981) (5,274) (5,296) (6,545)
Plant relocation costs -- (14,000) (14,000) -- (3,300) --
- ---------------------------- ------- ------- -------- ------- ------- -------
Total 23,152 1,987 (8,484) 21,085 8,347 10,468
- ---------------------------- ------- ------- -------- ------- ------- -------
Other income (expense) - net (32) 768 169 1,494 582 1,104
- ---------------------------- ------- ------- -------- ------- ------- -------
Earnings (loss) before taxes
on income 23,120 2,755 (8,315) 22,579 8,929 11,572
Accounting changes -- -- -- -- (10,214) --
Provision (benefit) for taxes
on income 8,551 960 (3,243) 8,536 2,612 3,315
- ---------------------------- ------- ------- -------- ------- ------- -------
Net earnings (loss) $ 14,569 $ 1,795 $ (5,072) $ 14,043 $ (3,897) $ 8,257
- ---------------------------- ------- ------- -------- ------- ------- -------
OTHER FINANCIAL INFORMATION
Cash from operations $ 16,367 $ 13,821 $ (330) $ 36,995 $ 62,700 $ 28,250
- ---------------------------- ------- ------- -------- ------- ------- -------
Invested capital (monthly averages):
Foodservice $ 32,696 $ 24,734 $ 21,979 $ 25,662 $ 26,503 $ 23,555
Cranes & related products 85,082 80,619 81,800 86,288 112,120 137,839
Marine 9,579 12,691 11,201 13,953 17,497 16,879
General corporate 12,409 4,248 4,818 4,052 2,581 2,025
- ---------------------------- ------- ------- -------- ------- ------- -------
Total $139,766 $122,292 $119,798 $129,955 $158,701 $180,298
- ---------------------------- ------- ------- -------- ------- ------- -------
IDENTIFIABLE ASSETS
Foodservice $ 90,126 $ 27,828 $ 27,828 $ 31,460 $ 29,526 $ 25,608
Cranes & related products 109,118 88,068 88,068 93,823 105,750 138,416
Marine 11,369 13,233 13,233 16,726 16,720 19,253
General corporate 114,302 30,336 30,336 43,839 56,015 41,829
- ---------------------------- ------- ------- -------- ------- ------- -------
Total $324,915 $159,465 $159,465 $185,848 $208,011 $225,106
- ---------------------------- ------- ------- -------- ------- ------- -------
LONG-TERM OBLIGATION
Long-term debt $101,180 $ -- $ -- $ -- $ -- $ --
- ---------------------------- ------- ------- -------- ------- ------- -------
DEPRECIATION
Foodservice $ 1,606 $ 1,364 $ 703 $ 1,320 $ 1,187 $ 1,090
Cranes & related products 4,162 4,639 2,288 4,211 3,875 4,053
Marine 608 658 316 681 756 785
General corporate 80 91 46 61 44 196
- ---------------------------- ------- ------- -------- ------- ------- -------
Total $ 6,456 $ 6,752 $ 3,353 $ 6,273 $ 5,862 $ 6,124
- ---------------------------- ------- ------- -------- ------- ------- -------
CAPITAL EXPENDITURES
Foodservice $ 4,568 $ 4,929 $ 3,011 $ 2,300 $ 2,152 $ 1,099
Cranes & related products 14,252 4,214 528 3,120 8,648 4,047
Marine 383 145 109 (492) (463) 500
General corporate (1) 6 419 82 414 (39) (508)
- ---------------------------- ------- ------- -------- ------- ------- -------
Total $ 19,209 $ 9,707 $ 3,730 $ 5,342 $ 10,298 $ 5,138
- ---------------------------- ------- ------- -------- ------- ------- -------
PER SHARE
Net earnings (loss) $ 1.90 $ .22 $ (.66) $ 1.61 $ (.40) $ .80
Dividends 1.00 1.00 .50 1.00 1.00 1.00
Stockholders' equity 10.64 9.78 9.78 11.61 13.06 16.04
- ---------------------------- ------- ------- -------- ------- ------- -------
Average shares outstanding 7,674,471 8,101,025 7,745,221 8,736,594 9,759,387 10,320,847
- ---------------------------- ------- ------- -------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
Ten-Year Financial Summary & Business Segment Information
(Thousands of dollars, except shares and per share data)
FISCAL YEARS
----------------------------------------------------------------------------------
1991 1990 1989 1988 1987
------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
NET SALES
Foodservice $ 73,944 $ 74,612 $ 74,431 $ 72,986 $ 72,501
Cranes & related products 147,554 117,464 102,430 81,593 46,571
Marine 14,689 33,752 23,735 17,710 103,995
- ---------------------------- ------- ------- -------- ------- -------
Total $236,187 $225,828 $200,596 $172,289 $223,067
- ---------------------------- ------- ------- -------- ------- -------
Gross margin $ 58,062 $ 54,366 $ 50,860 $ 37,033 $ 29,921
- ---------------------------- ------- ------- -------- ------- -------
EARNINGS (LOSS) FROM OPERATIONS
Foodservice $ 17,364 $ 19,387 $ 18,468 $ 17,203 $ 17,910
Cranes & related products 7,602 5,490 3,454 (1,974) 4,532
Marine (973) 6,497 3,416 (15,921) (9,693)
General corporate (5,734) (6,094) (5,623) (4,744) (3,628)
Plant relocation costs -- -- -- -- --
- ---------------------------- ------- ------- -------- ------- -------
Total 18,259 25,280 19,715 (5,436) 9,121
- ---------------------------- ------- ------- -------- ------- -------
Other income (expense) - net 2,233 5,077 4,527 4,187 7,510
- ---------------------------- ------- ------- -------- ------- -------
Earnings (loss) before taxes on income 20,492 30,357 24,242 (1,249) 16,631
Accounting changes -- -- -- -- --
Provision (benefit) for taxes in income 5,060 9,327 7,344 (1,341) 4,868
- ---------------------------- ------- ------- -------- ------- -------
Net earnings (loss) $ 15,432 $ 21,030 $ 16,898 $ 92 $ 11,763
- ---------------------------- ------- ------- -------- ------- -------
OTHER FINANCIAL INFORMATION
Cash from operations $ 6,472 $ 14,210 $ (5,278) $ 3,658 $(33,833)
- ---------------------------- ------- ------- -------- ------- -------
Invested capital (monthly averages):
Foodservice $ 25,099 $ 19,018 $ 22,859 $ 21,940 $ 16,427
Cranes & related products 133,777 118,097 99,147 76,335 77,382
Marine 14,621 16,206 28,600 18,894 26,122
General corporate 3,051 6,314 7,656 14,151 4,227
- ---------------------------- ------- ------- -------- ------- -------
Total $176,548 $159,635 $158,262 $131,320 $124,158
- ---------------------------- ------- ------- -------- ------- -------
IDENTIFIABLE ASSETS
Foodservice $ 28,019 $ 24,168 $ 26,074 $ 27,449 $ 33,486
Cranes & related products 136,995 115,804 96,623 75,217 61,306
Marine 18,009 22,683 32,451 24,049 41,366
General corporate 35,983 50,143 61,966 82,374 94,628
- ---------------------------- ------- ------- -------- ------- -------
Total $219,006 $212,798 $217,114 $209,089 $230,786
- ---------------------------- ------- ------- -------- ------- -------
LONG-TERM OBLIGATION
Long-term debt $ -- $ -- $ -- $ -- $ --
- ---------------------------- ------- ------- -------- ------- -------
DEPRECIATION
Foodservice $ 812 $ 657 $ 771 $ 785 $ 817
Cranes & related products 3,691 2,895 2,953 3,000 2,972
Marine 792 748 465 2,362 2,600
General corporate 234 431 380 327 303
- ---------------------------- ------- ------- -------- ------- -------
Total $ 5,529 $ 4,731 $ 4,569 $ 6,474 $ 6,692
- ---------------------------- ------- ------- -------- ------- -------
CAPITAL EXPENDITURES
Foodservice $ 2,797 $ 748 $ (169) $ 229 $ 201
Cranes & related products 6,347 3,130 2,225 2,264 2,580
Marine 113 197 108 1 112
General corporate (1) (2,955) 70 586 317 86
- ---------------------------- ------- ------- -------- ------- -------
Total $ 6,302 $ 4,145 $ 2,750 $ 2,811 $ 2,979
- ---------------------------- ------- ------- -------- ------- -------
PER SHARE
Net earnings (loss) $ 1.50 $ 2.04 $ 1.64 $ .01 $ 1.08
Dividends 1.00 2.00 .80 .80 .80
Stockholders' equity 16.20 15.66 15.63 14.86 15.70
- ---------------------------- ------- ------- -------- ------- -------
Average shares outstanding 10,320,994 10,321,249 10,335,066 10,630,104 10,870,357
- ---------------------------- ------- ------- -------- ------- -------
<FN>
(1) During 1991, certain assets were transferred from general corporate to the cranes and related products segment.
(2) The company changed its year-end to December 31, effective with the period ended December 31, 1994 (transition period).
The prior fiscal year-end was the Saturday nearest to June 30. The Pro Forma information related to the calendar year
ended December 31, 1994 is a compilation of the calendar quarterly data for 1994 and is unaudited.
</FN>
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF EARNINGS
(Thousands of dollars, except per share and average shares data)
For The Periods Ended
---------------------------------------------------------
Transition
Dec. 31, Dec. 31, July 2, July 3,
1995 1994 1994 1993
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
EARNINGS
Net Sales $313,149 $123,906 $ 275,380 $ 278,558
--------- --------- --------- ---------
Costs and expenses:
Cost of sales 237,679 92,604 207,456 222,773
Engineering, selling, and
administrative expenses 52,318 25,786 46,839 44,138
Plant relocation costs -- 14,000 -- 3,300
--------- --------- --------- ---------
Total costs and expenses 289,997 132,390 254,295 270,211
--------- --------- --------- ---------
Earnings(loss) from operations 23,152 (8,484) 21,085 8,347
Interest expense (1,865) (187) (263) (174)
Interest and dividend income 47 333 1,697 1,502
Other 1,786 23 60 (746)
--------- --------- --------- ---------
Earnings(loss) before taxes on
income and cumulative effect
of accounting changes 23,120 (8,315) 22,579 8,929
Provision (benefit) for
taxes on income 8,551 (3,243) 8,536 2,612
--------- --------- --------- ---------
Earnings(loss) before cumulative
effect of accounting changes 14,569 (5,072) 14,043 6,317
Cumulative effect of changes in
accounting for postretirement
medical benefits and income
taxes, net of income tax -- -- -- (10,214)
--------- --------- --------- ---------
Net earnings (loss) $ 14,569 $ ( 5,072) $ 14,043 $ (3,897)
--------- --------- --------- ---------
PER SHARE DATA
Net earnings (loss)
before cumulative effect
of accounting changes $ 1.90 $ (.66) $ 1.61 $ .65
Cumulative effect of
accounting changes -- -- -- (1.05)
--------- --------- --------- ---------
Net earnings (loss) $ 1.90 $ (.66) $ 1.61 $ (.40)
--------- --------- --------- ---------
AVERAGE SHARES OUTSTANDING 7,674,471 7,745,221 8,736,594 9,759,387
--------- --------- --------- ---------
<FN>
The accompanying summary of significant accounting policies and notes
to the consolidated financial statements are an integral part of these
statements.
</FN>
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(Thousands of dollars, except shares data)
As of December 31,
------------------------
1995 1994
---- ----
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 15,077 $ 4,118
Marketable securities 1,558 12,045
Accounts receivable, less
allowances of $1,365 and $1,196 51,011 29,500
Inventories 52,928 36,793
Prepaid expenses and other 3,451 2,882
Future income tax benefits 11,120 11,200
--------- ---------
Total current assets 135,145 96,538
--------- ---------
Intangible assets - net 92,433 2,844
Other assets 9,663 8,799
Property, plant and equipment - net 87,674 51,284
--------- ---------
Total assets $ 324,915 $ 159,465
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 10,089 $ --
Accounts payable and accrued expenses 66,028 43,864
Short-term borrowings 26,807 3,999
Income taxes payable 1,503 699
Product warranties 6,496 5,502
--------- ---------
Total current liabilities 110,923 54,064
--------- ---------
NON-CURRENT LIABILITIES
Long-term debt, less current portion 101,180 --
Product warranties 4,199 2,944
Postretirement health benefits obligation 19,190 18,190
Other liabilities 7,762 9,210
--------- ---------
Total non-current liabilities 132,331 30,344
--------- ---------
Commitments and contingencies -- --
--------- ---------
STOCKHOLDERS' EQUITY
Common stock (10,887,847 shares
issued in both years) 109 109
Preferred stock -- --
Additional paid-in capital 31,115 31,115
Cumulative foreign currency
translation adjustments (479) (188)
Retained earnings 132,418 125,523
Treasury stock, at cost (81,502) (81,502)
--------- ---------
Total stockholders' equity 81,661 75,057
--------- ---------
Total liabilities and
stockholders' equity $ 324,915 $ 159,465
--------- ---------
<FN>
The accompanying summary of significant accounting policies and notes
to the consolidated financial statements are an integral part of these
balance sheets.
</FN>
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of dollars)
For The Periods Ended
------------------------------------------------
Transition
Dec. 31, Dec. 31, July 2, July 3,
1995 1994 1994 1993
CASH FLOWS FROM OPERATIONS --------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net earnings (loss) $ 14,569 $ (5,072) $ 14,043 $ (3,897)
Adjustments to reconcile
net cash from operations:
Depreciation and amortization 6,801 3,426 6,401 6,048
Deferred income taxes (815) (6,219) (2,976) (1,449)
Accounting changes -- -- -- 10,214
Plant relocation costs -- 14,000 -- 3,300
Gain on sale of property,
plant, and equipment (1,964) -- -- --
Changes in operating assets and
liabilities excluding effects
of business acquisitions:
Accounts receivable (843) 13,089 9,352 7,259
Inventories (5,913) (5,553) 6,438 30,660
Other current assets 999 74 3,592 (3,403)
Current liabilities 4,015 (14,373) 1,723 11,023
Non-current liabilities (1,052) (387) (1,285) 2,342
Non-current assets 570 685 (293) 603
--------- --------- --------- ---------
Net cash provided by
(used in) operations 16,367 (330) 36,995 62,700
--------- --------- --------- ---------
CASH FLOWS FROM INVESTING
Sale (purchase) of
marketable securities - net 10,487 2,963 (3,520) (5,994)
Capital expenditures (19,209) (3,730) (5,342) (10,298)
Business acquisitions -
net of cash acquired (105,944) -- (10,685) --
Proceeds from sale of property,
plant and equipment 5,656 -- -- --
--------- --------- --------- ---------
Net cash used for investing (109,010) (767) (19,547) (16,292)
--------- --------- --------- ---------
CASH FLOWS FROM FINANCING
Dividends paid (7,674) (3,838) (8,688) (9,762)
Proceeds from long-term
borrowings 110,000 -- -- --
Proceeds from short-term
borrowings - net 3,001 3,999 -- --
Treasury stock purchases -- (10,114) (31,091) (30,518)
Debt acquisition costs (1,687) -- -- --
--------- --------- --------- --------
Net cash provided by
(used for) financing 103,640 (9,953) (39,779) (40,280)
--------- --------- --------- ---------
Effect of exchange rate
changes on cash (38) 74 77 (686)
--------- --------- --------- ---------
Net change in cash and
cash equivalents 10,959 (10,976) (22,254) 5,442
--------- --------- --------- ---------
Balance at beginning of year 4,118 15,094 37,348 31,906
--------- --------- --------- ---------
Balance at end of year $ 15,077 $ 4,118 $ 15,094 $ 37,348
--------- --------- --------- ---------
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 1,163 $ 157 $ 192 $ 45
--------- --------- --------- ---------
Income taxes paid $ 7,929 $ 6,901 $ 6,895 $ 8,076
--------- --------- --------- ---------
<FN>
The accompanying summary of significant accounting policies and notes
to the consolidated financial statements are an integral part of these
statements.
</FN>
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Thousands of dollars, except shares and per share data)
For The Periods Ended
---------------------------------------------------
Transition
Dec. 31, Dec. 31, July 2, July 3,
1995 1994 1994 1993
-------- ----------- -------- --------
<S> <C> <C> <C> <C>
COMMON STOCK - SHARES OUTSTANDING
Balance at beginning
of period 7,674,475 8,082,847 9,146,501 10,320,847
Treasury stock purchases (7) (408,372) (1,063,654) (1,174,346)
---------- ---------- ---------- ----------
Balance at end of period 7,674,468 7,674,475 8,082,847 9,146,501
---------- ---------- ---------- ----------
COMMON STOCK - PAR VALUE
Balance at beginning
of period $ 109 $ 109 $ 109 $ 109
---------- ---------- ---------- ----------
Balance at end of period $ 109 $ 109 $ 109 $ 109
---------- ---------- ---------- ----------
ADDITIONAL PAID-IN CAPITAL
Balance at beginning
of period $ 31,115 $ 31,115 $ 31,115 $ 31,115
---------- ---------- ---------- ----------
Balance at end of period $ 31,115 $ 31,115 $ 31,115 $ 31,115
---------- ---------- ---------- ----------
CUMULATIVE FOREIGN CURRENCY
TRANSLATION ADJUSTMENTS
Balance at beginning
of period $ (188) $ (410) $ (569) $ 1,399
Foreign currency
translation adjustment (291) 222 159 (1,968)
---------- ---------- ---------- ----------
Balance at end of period $ (479) $ (188) $ (410) $ (569)
---------- ---------- ---------- ----------
RETAINED EARNINGS
Balance at beginning
of period $ 125,523 $ 134,433 $ 129,078 $ 142,737
Net earnings (loss) 14,569 (5,072) 14,043 (3,897)
Cash dividends * (7,674) (3,838) (8,688) (9,762)
---------- ---------- ---------- ----------
Balance at end of period $ 132,418 $ 125,523 $ 134,433 $ 129,078
---------- ---------- ---------- ----------
TREASURY STOCK
Balance at beginning
of period $ (81,502) $ (71,388) $ (40,297) $ (9,779)
Treasury stock purchases -- (10,114) (31,091) (30,518)
---------- ---------- ---------- ----------
Balance at end of period $ (81,502) $ (81,502) $ (71,388) $ (40,297)
---------- ---------- ---------- ----------
<FN>
* Cash dividends per share were $1.00 per share in all periods
except the transition period in which the dividend was $.50 per share.
The accompanying summary of significant accounting policies and notes
to the consolidated financial statements are an integral part of these
statements.
</FN>
</TABLE>
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Thousands of dollars, except per share data)
BASIS OF PRESENTATION
The financial statements of The Manitowoc Company, Inc. ("the
company") have been prepared in accordance with generally
accepted accounting principles, which require management to make
estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses for the periods
presented. They also affect the disclosures of contingencies.
Actual results could differ from those estimates.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the
company and its wholly owned domestic and non-U.S. subsidiaries.
Significant intercompany balances and transactions have been
eliminated.
FISCAL YEAR
The company changed its fiscal year from a fiscal year ending on
the Saturday nearest June 30 to a fiscal year ending on December
31, effective for the period ending December 31, 1994. The
Consolidated Statement of Earnings, the Consolidated Statement of
Cash Flows, and the Consolidated Statement of Stockholders'
Equity for the period from July 3, 1994 to December 31, 1994
(Transition Period) are also presented in the financial
statements.
INVENTORIES
Inventories are stated at the lower of cost or market as
described in Note 3. Advance payments from customers are netted
against inventories to the extent of related accumulated costs.
Advance payments netted against inventories at December 31, 1995
and 1994 were $5,985 and $267, respectively. Advance payments
received in excess of related costs on uncompleted contracts are
classified as accrued expenses.
REVENUE RECOGNITION
Revenues and expenses in all business segments are generally
recognized upon shipment or completion of service provided.
However, revenues and costs on contracts for long-term projects
are recognized on the percentage-of-completion method, commencing
when work has progressed to a state where estimates are
reasonably accurate. These estimates are reviewed and revised
periodically throughout the lives of the contracts, and
adjustments to income resulting from such revisions are recorded
in the accounting period in which the revisions are made.
Estimated losses on such contracts are recognized in full when
they are identified.
FOREIGN CURRENCY TRANSLATION
The financial statements of the company's non-U.S. subsidiaries
are translated using the current exchange rate for assets and
liabilities and the weighted average exchange rate for the year
for income statement items. Resulting translation adjustments
are recorded directly to a separate component of stockholders'
equity.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is depreciated over the estimated
useful lives of the assets using the straight-line depreciation
method for all property acquired after June 29, 1991. Property
acquired prior to June 30, 1991, is depreciated using the sum-of-
the-years-digits method.
INTANGIBLE ASSETS
Intangible assets consist primarily of costs in excess of net
assets of businesses acquired (See Note 8). Intangible assets
are amortized using the straight line basis over their estimated
beneficial lives, not to exceed 40 years. Subsequent to an
acquisition, the company continually evaluates whether later
events and circumstances have occurred that indicate the
remaining estimated useful life of intangibles may warrant
revision or that the remaining balance of intangibles may not be
recoverable. When factors indicate that intangibles should be
evaluated for possible impairment, the company uses an estimate
of the related business' discounted net cash flows over the
remaining life of the intangibles in measuring whether the
intangibles are recoverable. Intangible assets at December 31,
1995 and 1994 of $92,433 and $2,844, respectively, are net of
accumulated amortization of $1,939 and $1,364, respectively.
The company is required to adopt Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets" in 1996. The adoption of this
statement is not expected to have a material affect on the
financial statements.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts reported in the consolidated balance sheets
for cash and cash equivalents, accounts receivable, accounts
payable and short-term borrowings approximate fair value due to
the immediate short-term maturity of these financial instruments.
The carrying amount reported for long-term debt approximates fair
value since the underlying instrument bears interest at a
variable rate that reprices frequently.
INCOME TAXES
The company utilizes the liability method to recognize deferred
tax assets and liabilities for the expected future income tax
consequences of events that have been recognized in the company's
financial statements. Under this method, deferred tax assets and
liabilities are determined based on the temporary differences
between financial statement carrying amounts and the tax basis of
assets and liabilities using enacted tax rates in effect in the
years in which the temporary differences are expected to reverse.
The cumulative effect of changing to the liability method at the
beginning of fiscal year 1993 was $2,240, or $.23 per share.
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The expected cost of postretirement health care benefits is
recorded during the years that the employees render service. The
cumulative effect of changing to this method at the beginning of
fiscal 1993 was a one-time, non-cash charge of $13,073 ($7,974
net of tax, or $.82 per share).
RESEARCH AND DEVELOPMENT
Research and development costs are charged to expense as incurred
and amount to $3,110 in 1995, $1,323 for the transition period
ended December 31, 1994, and, $2,439, and $2,209 in fiscal years
1994 and 1993, respectively.
NET EARNINGS PER COMMON SHARE
Net earnings per common share is based on weighted average shares
outstanding during each year.
CASH EQUIVALENTS
All short-term investments purchased with an original maturity of
three months or less are considered cash equivalents.
RECLASSIFICATIONS
Certain reclassifications have been made to the financial
statements of prior periods to conform to the presentation for
1995.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands of dollars, except shares and per share data)
1
______________________________________________________________________
PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
Property, plant and equipment is summarized at December 31 as follows:
1995 1994
---- ----
<S> <C> <C>
Land $ 2,883 $ 3,583
Buildings 46,194 42,721
Drydocks and dock fronts 21,743 21,660
Machinery, equipment and tooling 114,800 77,705
Construction in progress 3,135 5,677
-------- --------
Total cost 188,755 151,346
Less accumulated depreciation (101,081) (100,062)
-------- --------
Property, plant and equipment - net $ 87,674 $ 51,284
-------- --------
</TABLE>
2
_________________________________________________________________
MARKETABLE SECURITIES
Effective July 3, 1994, the company adopted SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities." The effect
of adopting this new statement was not material. Marketable
securities at December 31, 1995 include $1.6 million of securities
which are available for sale. Marketable securities at December 31,
1994 include $8.0 million of investments in treasury bills which were
held until maturity in 1995 and $4.0 million of equity securities
which are available for sale. For both types of investments, at
December 31, 1995 and 1994, the difference between fair market value
and cost was not material.
3
________________________________________________________________
INVENTORIES
<TABLE>
<CAPTION>
The components of inventories are summarized at December 31 as
follows:
1995 1994
---- ----
<S> <C> <C>
Components:
Raw materials $ 22,809 $ 13,150
Work-in-process 18,868 14,659
Finished goods 31,711 28,758
--------- ---------
Total inventories at FIFO cost 73,388 56,567
Excess of FIFO cost over LIFO value (20,460) (19,774)
--------- ---------
Total inventories $ 52,928 $ 36,793
--------- ---------
</TABLE>
Inventory is carried at lower of cost or market using the first-in,
first-out (FIFO) method for 60% and 50% of total inventory for 1995
and 1994, respectively. The remainder of the inventory is costed
using the last-in, first-out (LIFO) method.
Inventory quantity reductions during fiscal 1994 resulted in lower
cost of goods sold computed under the LIFO method due to lower costs
prevailing in prior periods. The increase in net earnings for fiscal
1994 due to such inventory reductions was $1,726.
4
___________________________________________________________________
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
<TABLE>
<CAPTION>
Accounts payable and accrued expenses are summarized at December 31 as
follows:
1995 1994
---- ----
<S> <C> <C>
Trade accounts payable $ 29,221 $ 13,339
Vacation accrual 3,427 3,116
Profit sharing 7,857 3,108
Product liability 6,188 7,947
Miscellaneous accrued expenses 19,335 16,354
-------- --------
Total $ 66,028 $ 43,864
-------- --------
</TABLE>
5
____________________________________________________________________
DEBT
<TABLE>
<CAPTION>
Long-term debt at December 31, 1995 consists of the following (there
was no long-term debt at December 31, 1994):
<S> <C>
Term loan payable $110,000
Capital lease obligations 1,269
--------
111,269
Less current portion 10,089
--------
$101,180
========
</TABLE>
The company entered into a Credit Agreement ("Agreement") on December
1, 1995 with a group of banks which provides for maximum borrowings of
$125 million under a term loan and a maximum of $55 million in
revolving loans to fund the purchase of The Shannon Group, Inc. (See
Note 8). The Agreement includes covenants which require the
maintenance of various debt and net worth ratios, and limit the amount
of capital expenditures. Annual commitment fees during 1995 were .25%
on the unused portion of the available credit. Borrowings under the
Agreement bear interest at a rate equal to the sum of a base rate plus
an applicable percentage, as defined. 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. The interest rate for the term and
revolving loans at December 31, 1995 was 7.19%. Payments of principal
and interest for the term loan are due quarterly through December 31,
2001. Borrowings under the Agreement are collateralized by receivables
and inventories of the company and substantially all of the common
stock of its subsidiaries.
Capital lease obligations relate to the company's obligations on three
property leases for industrial property located in the State of
Tennessee. These obligations are due in monthly or annual installments
including principal and interest at rates varying from 5% to 18.3%.
These obligations mature at various dates through 2012.
<TABLE>
<CAPTION>
The aggregate scheduled maturities of long-term debt in subsequent
years are as follows:
<S> <C>
1996 $ 10,089
1997 15,095
1998 20,098
1999 25,101
2000 25,105
Thereafter 15,781
---------
$111,269
=========
</TABLE>
At December 31, 1995, short-term borrowings include $7,000 which was
outstanding under the revolving loan portion of the Agreement. The
revolving loans are due on December 31, 2001. The company intends to
pay these borrowings during 1996. Short-term borrowings also include
$19,807 due to the seller of The Shannon Group, Inc. which was paid in
January, 1996 (see Note 8.)
6
___________________________________________________________________
INCOME TAXES
<TABLE>
<CAPTION>
Components of earnings before income taxes and the cumulative effect
of accounting changes for the following periods are as follows:
Transition
Period
Dec. 31, Dec. 31, July 2, July 3,
1995 1994 1994 1993
-------- --------- -------- --------
<S> <C> <C> <C> <C>
Earnings before income taxes:
Domestic $ 22,273 $ (8,861) $ 22,089 $ 8,348
Foreign 847 546 490 581
-------- -------- -------- --------
TOTAL $ 23,120 $ (8,315) $ 22,579 $ 8,929
-------- -------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
Provision (benefit) for taxes on income before the cumulative effect
of accounting changes are as follows:
Transition
Period
Dec. 31, Dec. 31, July 2, July 3,
1995 1994 1994 1993
-------- --------- -------- --------
<S> <C> <C> <C> <C>
Current:
Federal $ 8,093 $ 1,972 $ 9,138 $ 2,812
State 1,105 716 2,358 821
Foreign 168 288 16 428
-------- -------- -------- --------
Total current 9,366 2,976 11,512 4,061
-------- -------- -------- --------
Deferred:
Federal and state (815) (6,036) (3,120) (1,138)
Foreign -- (183) 144 (311)
-------- -------- -------- --------
Total deferred (815) (6,219) (2,976) (1,449)
-------- -------- -------- --------
Provision (benefit) for
taxes on income $ 8,551 $ (3,243) $ 8,536 $ 2,612
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Federal income tax at statutory rates and the provision (benefit) for
income taxes as reported are reconciled as follows:
Transition
Period
Dec. 31, Dec. 31, July 2, July 3,
1995 1994 1994 1993
-------- --------- -------- --------
<S> <C> <C> <C> <C>
Federal income tax at
statutory rate $ 8,092 $ (2,910) $ 7,903 $ 3,036
State income taxes, net of federal
income tax benefit 1,137 (420) 1,140 656
Investment tax credit -- (699) (96) (144)
Tax-exempt FSC income (373) (236) (515) (355)
Adjustments to prior years' income
tax accruals (132) 884 -- --
Realization of state net operating
and general business credit
carryforwards -- -- -- (477)
Other (173) 138 104 (104)
-------- -------- -------- --------
Provision (benefit) for taxes
on income $ 8,551 $ (3,243) $ 8,536 $ 2,612
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
The deferred income tax accounts reflect the impact of temporary
differences between the basis of assets and liabilities for financial
reporting purposes and their related basis as measured by income tax
regulations. A summary of the deferred income tax accounts at
December 31 is as follows:
1995 1994
-------- ---------
<S> <C> <C>
Current deferred tax assets:
Inventories $ 485 $ 1,655
Accounts receivable 692 440
Product warranty reserves 2,252 2,208
Product liability reserves 2,413 2,934
Environmental reserves 238 1,035
Customer profit sharing reserves 527 253
Other employee related benefits
and allowances 2,706 1,291
Other 1,807 1,384
-------- --------
Future income tax benefits,
current $ 11,120 $ 11,200
======== ========
Non-current deferred tax assets
(liabilities):
Property, plant and equipment $(10,340) $ (4,859)
Postretirement benefits
other than pensions 7,581 7,295
Severance benefits 1,014 837
Provisions for long-term
product warranty reserves 1,412 1,182
Long-term environmental reserves 740 201
Net operating loss carryforwards 2,428 --
Other (9) (177)
-------- --------
Net future income tax
benefits, non-current $ 2,826 $ 4,479
======== ========
</TABLE>
The company does not provide for taxes which would be payable if
undistributed earnings of foreign subsidiaries or its foreign
affiliate were remitted because the company either considers these
earnings to be invested for an indefinite period or anticipates that
when such earnings are distributed, the U.S. income taxes payable
would be substantially offset by foreign tax credits.
7
______________________________________________________________________
STOCKHOLDERS' EQUITY
Authorized capitalization consists of 35,000,000 shares of $.01 par
value common stock and 3,500,000 shares of $.01 par value preferred
stock. None of the preferred shares have been issued. Pursuant to a
Rights Agreement dated September 5, 1986, each common share carries
with it a Right to purchase additional stock. The Rights are not
currently exercisable and cannot be separated from the shares unless
certain specified events occur, including the acquisition of 20% or
more of the common stock by a person or group, or the commencement of
a tender offer for 30% or more of the common stock. In the event a
person or group actually acquires 30% or more of the common stock, or
if the company is merged with an acquiring person, each Right permits
the holder to purchase for $45 common stock having a market value of
$90. The Rights expire on September 19, 1996, and may be redeemed by
the company for $.05 per Right (in cash or stock) under certain
circumstances.
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 December 31, 1995, a total of 2,646,379 treasury
shares were purchased pursuant to these authorizations.
Subject to shareholder approval, the company's board of directors
approved a stock option plan for key employees in 1995. The company
is required to adopt the pro-forma disclosure requirements of SFAS No.
123, "Accounting for Stock Based Compensation," in 1996. The
company will account for its stock option plan under the provisions of
Accounting Principles Board Opinion No. 25.
8
__________________________________________________________________
ACQUISITIONS
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
$127,020 which is net of cash acquired of $651, and which includes an
amount due to a seller of $19,807 which was paid in January, 1996,
direct acquisition costs of $2,671, and other assumed liabilities of
$1,269. The transaction was financed through credit facilities
provided under the Credit Agreement dated December 1, 1995 (See Note
5).
The purchase price paid to the Shannon stockholders is subject to
post-closing adjustments based upon levels of working capital and 1995
gross profit as defined in the Stock Purchase Agreement
("Agreement"). The amount of the working capital adjustment is not
yet known. No earnout payment is anticipated based upon the gross
profit results of Shannon for the specified period.
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 $88,331, and is
being amortized over 32 years.
The results of operations of Shannon subsequent to the date of
acquisition are included in the Consolidated Statement of Earnings.
<TABLE>
<CAPTION>
The following unaudited information presents on a pro forma basis, the
acquisition as if it had occurred at the beginning of the period
indicated:
Year Ended Transition Period
Dec. 31, Dec. 31,
1995 1994
------------- ----------------
<S> <C> <C>
Net sales $ 436,114 $ 186,230
---------- ----------
Net earnings (loss) $ 14,983 $ (4,155)
---------- ----------
Net earnings (loss) per common share $ 1.95 $ (.54)
---------- ----------
</TABLE>
During fiscal year 1994, the company acquired the assets of Femco
Machine Co. for $10,685 in cash. Femco is a manufacturer of parts for
cranes, draglines, and other heavy equipment. The acquisition was
recorded using the purchase method of accounting. The excess of the
cost over the fair value of net assets acquired of $1,849 is being
amortized over 25 years.
Femco's results of operations subsequent to the date of acquisition
are included in the Consolidated Statements of Earnings. Pro forma
results of operations are not presented as the amounts do not
significantly differ from historical results of the company.
9
_____________________________________________________________________
PLANT CONSOLIDATION
In the transition period ended December 31, 1994, the company's
decision to consolidate its large-crane manufacturing to a single site
resulted in a $14 million 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 facility is being marketed. It is reasonably
possible that 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. During
the year ended December 31, 1995, $641 was paid and charged against
these reserves.
During 1995, additional costs of $2.8 million were expensed as
incurred and include items such as moving and relocation, engineering,
and severance. No additional costs are expected to be incurred
related to these items.
10
__________________________________________________________________
CONTINGENCIES
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 the 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 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 $0.2 million,
$1.6 million, and $0.5 million for the year ended December 31, 1995,
and fiscal years 1994 and 1993, respectively, for its estimated
portion of the cleanup costs. There were no expenses incurred during
the transition period ended December 31, 1994.
As of December 31, 1995, 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 December 31, 1995 are $6.2 million; $2.9
million reserved specifically for the 30 cases referenced above, and
$3.3 million for incurred but not reported claims. These reserves
were estimated using actuarial methods. The highest current reserve
for a non-insured claim is $0.2 million, and $1.0 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.
It is reasonably possible that the estimates for environmental
remediation and product liability costs may change in the near future
based upon new information which may 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.
11
___________________________________________________________________
RETIREMENT AND HEALTH CARE PLANS
The company provides retirement benefits through noncontributory
deferred profit sharing plans covering substantially all employees.
Company contributions to the plans are based upon formulas contained
in such plans. The company also has a defined contribution plan in
which the company matches 25% of participant contributions up to a
maximum of 5% of a participant's compensation. Total costs incurred
were $4,657 in 1995, $2,165 for the transition period, and for fiscal
years 1994 and 1993, $4,981, and $4,896, respectively.
The company maintains an employee benefit trust through which group
health benefits are funded. The cost of group health benefits was
$4,351 in 1995, $2,505 in the transition period, $4,790 in 1994, and
$4,450 in 1993.
The company also provides certain health care benefits for eligible
retired employees. Substantially all of the company's domestic
employees hired before January 1, 1990, may become eligible for these
benefits if they reach a normal retirement age while working for the
company and satisfy certain years of service requirements.
<TABLE>
<CAPTION>
The components of the periodic postretirement health benefit cost for
the following periods are as follows:
Transition
Period
Dec. 31 Dec. 31, July 2, July 3,
1995 1994 1994 1993
------ ------- ------ ------
<S> <C> <C> <C> <C>
Service cost - benefits earned
during the year $ 323 $ 147 $ 230 $ 237
Interest cost on accumulated
postretirement health
benefit obligation 1,393 694 1,279 1,282
------- ------- ------- --------
Net periodic postretirement
health benefit cost $ 1,716 $ 841 $ 1,509 $ 1,519
------- ------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
The components of the accumulated periodic postretirement health
benefit obligation at December 31, 1995 and 1994 are as follows:
1995 1994
-------- ---------
<S> <C> <C>
Retirees $ 10,920 $ 10,733
Active participants 7,952 7,223
Unrecognized gain 318 234
-------- --------
Accumulated postretirement
health benefit
obligation $ 19,190 $ 18,190
-------- --------
</TABLE>
The health care cost trend rate assumed in the determination of the
accumulated postretirement benefit obligation begins at 11.0% in 1993,
decreases 1.0% per year to 5.0% for 1999, and remains at that level
thereafter. Increasing the assumed medical trend rates by one
percentage point in each year would increase the accumulated
postretirement health benefit obligation by $2,408 at December 31,
1995 and the aggregate of the service and interest cost components of
net periodic postretirement health benefit cost by $277 for 1995.
The discount rate used in determining the accumulated postretirement
health benefit obligation for 1995 is 7.25% compounded annually and
8.0% compounded annually for all other periods. The plan is unfunded.
It is reasonably possible that the estimate for future retirement and
health care costs may change in the near future based upon changes in
the health care environment or changes in interest rates which may
arise.
12
___________________________________________________________________
LEASES
In February 1992, the company entered into a sale/leaseback
arrangement covering substantially all of its crawler crane and boom
truck crane rental fleets. The leaseback agreements for the fleet
cover terms of 5 and 7 years and are being accounted for as operating
leases. The gains on the sales of the fleet inventory were deferred
and are being recognized over the term of the leases or at the time
the inventory is otherwise sold to third parties.
The company leases various other property, plant and equipment. Terms
of the leases vary, but generally require the company to pay property
taxes, insurance premiums, and maintenance costs associated with the
leased property.
Rental expense attributable to operating leases, including the
sale/leaseback arrangements, was $7,232 in 1995, $3,724 in the
transition period, $7,816 in 1994, and $7,480 in 1993. Total minimum
rental obligations under noncancelable operating leases, as of
December 31, 1995, aggregated $29,412 and were payable as follows:
1996 $6,696 1999 $2,432
1997 $5,561 2000 $1,708
1998 $3,904 Thereafter $9,111
13
___________________________________________________________________
BUSINESS INFORMATION
The company's business units, which consist of Foodservice Equipment
("Foodservice"), Cranes and Related Products ("Cranes"), and Marine
Operations ("Marine"), operate in both domestic and international
markets.
Foodservice products consist primarily of commercial ice cube
machines, dispensers and related accessories, as well as commercial
refrigerators, and freezers. Foodservice distributes its products
primarily in the U.S. Foodservice products serve the lodging,
restaurant, healthcare, and convenience store markets which are
impacted by demographic changes and business cycles.
Cranes' products consist primarily of crawler and truck-mounted
lattice boom and hydraulic cranes and excavators which serve the
construction, energy, and mining industries. Cranes distributes its
products worldwide, primarily in the U.S., Southeast Asia, Middle East
and Europe. Cranes' operations are tied most closely to energy and
infrastructure projects throughout the world.
Marine provides ship-repair services to foreign and domestic vessels
operating on the Great Lakes. Marine serves the Great Lakes maritime
market consisting of both U.S. and Canadian fleets, inland waterway
operators, and oceangoing vessels that transit the Great Lakes and St.
Lawrence Seaway.
Information concerning the company's operations in various businesses
is presented on page 22. Export sales were approximately $61 million
in 1995, $31 million during the transition period, $57 million in
1994, and $65 million in 1993. Foreign sales, operating earnings, and
identifiable assets for 1995 are $10.3 million, $0.2 million, and
$13.3 million, respectively.
MANAGEMENT'S REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
Company management is responsible for the integrity of this annual
report's consolidated financial statements. Those statements were
prepared in accordance with generally accepted accounting principles.
Where necessary, amounts are based on judgments and estimates by
management. All financial information in this report matches the
financial statements.
The company maintains an internal accounting system designed to
provide reasonable assurance that assets are safeguarded and that
books and records reflect only authorized transactions.
To further safeguard assets, the company has established an Audit
Committee composed of directors who are neither officers nor employees
of the company. The Audit Committee is responsible for reviewing the
company's financial reports and accounting practices. The Audit
Committee meets periodically with the company's independent
accountants.
The company's independent accountants provide an objective examination
of the company's financial statements. They evaluate the company's
system of internal controls and perform tests and other procedures
necessary to express an opinion on the fairness of the presentation of
the consolidated financial statements.
/s/ Fred M. Butler /s/ Robert R. Friedl
- ------------------------------------ -------------------------
President & Chief Executive Officer Chief Financial Officer
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- ----------------------------------------
We have audited the accompanying consolidated balance sheets of The
Manitowoc Company, Inc. and Subsidiaries as of December 31, 1995 and
1994 and the related consolidated statements of earnings,
stockholders' equity, and cash flows for the year ended December 31,
1995 and the period from July 3, 1994 to December 31, 1994. These
financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits. The consolidated financial
statements of The Manitowoc Company, Inc. and Subsidiaries as of July
2, 1994 and July 3, 1993 were audited by other auditors whose reports,
dated July 28, 1994 and July 30, 1993, expressed an unqualified
opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of The Manitowoc Company, Inc. and Subsidiaries as
of December 31, 1995 and 1994, and the consolidated results of their
operations and their cash flows for the year ended December 31, 1995,
and the period from July 3, 1994 to December 31, 1994, in conformity
with generally accepted accounting principles.
As explained in the Summary of Significant Accounting Policies of the
Consolidated Financial Statements, effective June 28, 1992, the
company changed its method of accounting for retiree health care
benefits and income taxes.
Milwaukee, Wisconsin /s/ Coopers & Lybrand L.L.P.
February 6, 1996 -----------------------------
COOPERS & LYBRAND L.L.P.
<TABLE>
<CAPTION>
SUPPLEMENTAL QUARTERLY FINANCIAL INFORMATION (Unaudited)
The table below presents quarterly data for calendar years ended
December 31, 1995 and 1994
(Thousands of dollars, except per share data)
1995 1994
--------------------------------------- -----------------------------------------
First Second Third Fourth First Second Third (*) Fourth (*)
------ ------ ------ ------ ------ ------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 69,101 $ 82,287 $ 80,088 $ 81,673 $ 60,606 $ 85,946 $ 66,039 $ 57,867
Gross margin 15,919 21,204 18,011 20,336 14,405 21,062 18,320 12,982
Earnings (loss) before
cumulative effect of
accounting changes 1,768 5,386 3,590 3,825 1,600 5,267 3,800 (8,872)
Net earnings (loss) 1,768 5,386 3,590 3,825 1,600 5,267 3,800 (8,872)
Per common share:
Earnings (loss) before
cumulative effect of
accounting changes .23 .70 .47 .50 .19 .64 .49 (1.16)
Net earnings (loss) .23 .70 .47 .50 .19 .64 .49 (1.16)
Dividends .25 .25 .25 .25 .25 .25 .25 .25
<FN>
(*) The third and fourth quarter of calendar 1994 equates to the
transition period included in the Consolidated Financial Statements.
</FN>
</TABLE>
OTHER INVESTOR INFORMATION
Independent Public Accountants
- ------------------------------
Coopers & Lybrand LLP
411 East Wisconsin
Milwaukee, WI 53202
Stock Transfer Agent and Registrar
- --------------------------------
First Chicago Trust Company of New York
P. O. Box 2500
Jersey City, NJ 07303-2500
Annual Meeting - The annual meeting of Manitowoc shareholders will
be held at 9:00 a.m., CDT, Tuesday, May 7, 1996, on the third floor of
the company's corporate offices at 500 South 16th Street, Manitowoc,
WI. We encourage shareholders to participate in this meeting in
person or by proxy.
Stock Listing - Manitowoc's common stock is traded on the New York
Stock Exchange and is identified by the ticker symbol MTW. Current
trading volume, share price, dividends, and related information can be
found in the financial section of most daily newspapers.
Quarterly common stock price information for our three most recent
fiscal years can be found on page 1 of this annual report.
Manitowoc Shareholders - On December 31, 1995, 7,674,468 shares of
Manitowoc common stock were outstanding. At such date, there were
approximately 2,350 shareholders of record.
Although the majority of Manitowoc shareholders reside in Wisconsin,
other shareholders reside throughout the United States, Canada,
Mexico, and several overseas locations.
Form 10-K Report - Each year, Manitowoc files its Annual Report on
Form 10-K with the Securities and Exchange Commission. Most of the
financial information contained in that report is included in the
Annual Report to Shareholders.
A copy of Form 10-K, as filed with the Securities and Exchange
Commission for 1995, may be obtained by any shareholders, without
charge, upon written request to:
E. Dean Flynn
Secretary
The Manitowoc Company, Inc.
P. O. Box 66
Manitowoc, WI 54221-0066
Dividends - Common stock dividends are usually considered in
conjunction with quarterly meetings of Manitowoc's board of directors.
Dividend Reinvestment and Stock Purchase Plan -
The Dividend Reinvestment and Stock Purchase Plan provides a
convenient method to acquire additional shares of Manitowoc stock
through the investment of quarterly dividends. Shareholders may also
purchase shares by investing cash as often as once a month in varying
amounts from $10 up to a maximum of $60,000 each calendar year.
Participation is voluntary, and all fees associated with stock
purchases under these plans are paid for by Manitowoc.
To receive an information booklet and enrollment form, please contact
our stock transfer agent and registrar, First Chicago Trust Company of
New York.
GLOSSARY
- --------
Financial Terms
- ---------------
Backlog: Firm, unfilled orders. An indicator of future sales.
Book Value: Another term for shareholder equity, most often shown on
a per-share basis.
Cash Flow: Funds generated by a company to operate the business, make
capital investments, repay debt, pay dividends, repurchase stock, and
make acquisitions.
Cost of Capital: A weighted average of the after-tax cost of equity
and borrowed funds used to invest in operating capital for business.
Current Ratio: Current assets divided by current liabilities, an
indicator of liquidity.
Economic Value Added: Represents the growth in economic profit from
year to year.
Outsourcing: Contracting with an outside supplier to take over a
function that had been performed within the company.
Product Mix: A company that sells more than one product can have its
amount of sales vary from year to year, even when the overall number
of units sold remains the same. This occurs when multiple products
have different sales values, when a greater number of units with
higher sales values are sold in comparison to lower-priced units.
Stock Repurchase Plan: A systematic approach in which a company
repurchases its stock. The result of this action increases the
percent of ownership each remaining shareholder has in the company.
Industry Terms
- --------------
Boom Truck: A flatbed truck chassis equipped with a hydraulic crane.
A boom truck is different than a truck crane in that it can haul up to
several thousand pounds of payload on its cargo deck.
Crawler Crane: Usually refers to lattice-boom cranes that are
mounted on crawlers rather than a truck chassis. This method of
mounting significantly reduces ground bearing pressures and enables
the crane to pick-and-carry any rated load.
Five-Year Survey: Ship inspection and maintenance that must be
performed every five years to satisfy various maritime requirements of
the U.S. Coast Guard and other regulatory agencies.
Graving Dock: An in-ground concrete structure in which ships can be
constructed or repaired. Because a graving dock is equipped with
pumps and watertight gates, it can be flooded so ships can float in,
then be pumped dry so crews can work on those portions of the ship
that are normally underwater.
Kiosk: A non-traditional restaurant.
Lattice Boom: A fabricated structure usually consisting of four
chords and tubular lacings. Lattice booms are typically lighter in
weight than similar-length telescopic booms. In addition, lattice
booms generally provide higher lifting capacities than telescopic
booms in most situations.
Reach-in: A capital goods item typically found in restaurant and
convenience-store applications to store foodservice ingredients at
safekeeping temperatures prior to preparation, or for refrigerated
storage of various beverage and food items for retail sale.
Self-Unloading Vessel: Refers to the fleet of vessels operating on
the Great Lakes that are equipped with cargo-hold conveyors and cargo
discharge booms that enable these vessels to offload their bulk
cargoes, such as iron ore, coal, or cement, without requiring dockside
assist equipment.
Telescopic Boom: A boom, composed of several overlapping sections,
which can be extended or retracted like a telescope.
Walk-in: A large, custom-built, refrigerated structure often found in
restaurants that can be equipped with cooling or freezing systems for
long-term storage of foodservice items prior to preparation.
EXHIBIT 13 - APPENDIX A
<TABLE>
<CAPTION>
Cross Reference or
Graph No. Description of Graph Narrative Discussion
- --------- -------------------- ---------------------
<S> <C> <C>
1 Bar Graph of Consolidated Graph shows consolidated net
Net Sales for fiscal years sales of $236 million, $246
1991-1994 and calendar year 1995 million, $279 million, $275
million and $313 million for
fiscal 1991, 1992, 1993, 1994
and calendar 1995.
2 Bar Graph of Consolidated Graph shows consolidated gross
Gross Margins for fiscal years margins of $58 million, $54
1991-1994 and calendar year 1995 million, $56 million, $68
million and $75 million for
fiscal 1991, 1992, 1993, 1994
and calendar 1995.
3 Bar Graph of Consolidated Graph shows consolidated
Operating Earnings for fiscal years operating earnings of $18
1991-1994 and calendar year 1995 million, $10 million, $8 million,
$21 million and $23 million for
fiscal 1991, 1992, 1993, 1994
and calendar 1995.
4 Bar Graph of Consolidated Graph shows consolidated net
Net Earnings for fiscal years earnings of $15 million for
1991-1994 and calendar year 1995 fiscal 1991, $8 million for
fiscal 1992, a net loss of $4
million for fiscal 1993, and
net earnings of $14 million and
$15 million for fiscal 1994
and calendar 1995, respectively.
5 Bar Graph of Consolidated Free Graph shows consolidated free
Cash Flow for fiscal years cash flows of $6 million, $28
1991-1994 and calendar year 1995 million, $63 million, $37
million and $16 million for
fiscal 1991, 1992, 1993, 1994
and calendar 1995.
6 Bar Graph of Invested Graph shows invested capital of
Capital for fiscal years $176 million, $180 million, $159
1991-1994 and calendar year 1995 million, $130 million and $140
million for fiscal 1991, 1992,
1993, 1994 and calendar 1995.
7 Bar Graph of Consolidated Graph shows export shipments
Export Shipments for fiscal of $42 million, $41 million,
years 1991-1994 and calendar $65 million, $57 million, and
year 1995 $61 million for fiscal 1991,
1992, 1993, 1994, and calendar
1995.
8 Bar Graph of Average Shares Graph shows average shares
Outstanding for fiscal years outstanding of 10.3 million
1991-1994 and calendar year for fiscal years 1991 and 1992,
1995 9.8 million for fiscal 1993,
8.7 million for fiscal 1994 and
7.7 million for calendar 1995.
</TABLE>
EXHIBIT 21
1995 10-K
<TABLE>
<CAPTION>
LIST OF SUBSIDIARIES
JURISDICTION
SUBSIDIARY OF INCORPORATION
---------- ------------------
<S> <C>
Femco Machine Co. Nevada
Kolpak Manufacturing Company Wisconsin
Manitex, Inc. Texas
Manitowoc Engineering, Inc. Nevada
Manitowoc Equipment Works PTE, Ltd. Nevada
Manitowoc Equipment Works, Inc. Nevada
Manitowoc Europe B.V. The Netherlands
Manitowoc Europe Holdings, Ltd. England
Manitowoc Europe Limited England
Manitowoc International Sales Corp. Barbados
Manitowoc Korea Company, Ltd. Korea
Manitowoc Nevada, Inc. Nevada
Manitowoc Re-Manufacturing, Inc. Wisconsin
Manitowoc Western Company, Inc. Wisconsin
North Central Crane & Excavator Sales Corp. Nevada
The Shannon Group, Inc. Delaware
West Manitowoc, Inc. Wisconsin
</TABLE>
EXHIBIT 23.1
1995 10-K
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statements of The Manitowoc Company, Inc. on Forms S-8 (File Nos.
33-48665 and 33-65316) of our reports, which includes an explanatory
paragraph regarding the Company's changing its method of accounting
for retiree health care benefits and income taxes, dated February 6,
1996 on our audit of the consolidated financial statements and
financial statement schedule of The Manitowoc Company, Inc. and
Subsidiaries as of December 31, 1995 and 1994, and for the year ended
December 31, 1995 and the period from July 3, 1994 to December 31,
1994, which reports are incorporated by reference and included,
respectively, in this Annual Report on Form 10-K.
/s/ Coopers & Lybrand LLP
Milwaukee, Wisconsin
March 26, 1996
EXHIBIT 23.2
1995 10-K
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 10-K, into the
Company's previously filed Registration Statement Nos. 33-48665 and
33-65316.
/s/ Arthur Andersen LLP
Milwaukee, Wisconsin ARTHUR ANDERSEN LLP
March 25, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 15077
<SECURITIES> 1558
<RECEIVABLES> 52376
<ALLOWANCES> 1365
<INVENTORY> 52928
<CURRENT-ASSETS> 135145
<PP&E> 188756
<DEPRECIATION> 101081
<TOTAL-ASSETS> 324915
<CURRENT-LIABILITIES> 110923
<BONDS> 0
0
0
<COMMON> 109
<OTHER-SE> 81552
<TOTAL-LIABILITY-AND-EQUITY> 324915
<SALES> 313149
<TOTAL-REVENUES> 313149
<CGS> 237679
<TOTAL-COSTS> 289997
<OTHER-EXPENSES> (1786)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1865
<INCOME-PRETAX> 23120
<INCOME-TAX> 8551
<INCOME-CONTINUING> 14569
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14569
<EPS-PRIMARY> 1.90
<EPS-DILUTED> 1.90
</TABLE>
