UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
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OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-11978
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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)
(920) 684-4410
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(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes ( X ) No ( )
The number of shares outstanding of the Registrant's common stock,
$.01 par value, as of September 30, 1997, the most recent practicable date,
was 17,295,025.
PART I. FINANCIAL INFORMATION
--------------------------------
Item 1. Financial Statements
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<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Consolidated Statements of Earnings
For the Quarter and Nine Months Ended Calendar Years 1998 and 1997
(Unaudited)
(In thousands, except per-share and average shares data)
QUARTER ENDED YEAR-TO-DATE
-------------- -------------
Sept. 30 Sept. 30 Sept. 30 Sept. 30
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $ 184,023 $ 133,935 $ 527,061 $ 394,961
Costs And Expenses:
Cost of goods sold 130,743 96,581 377,215 283,770
Engineering, selling and
administrative expenses 26,314 20,826 77,702 62,641
------- ------- ------- -------
Total 157,057 117,407 454,917 346,411
Earnings From Operations 26,966 16,528 72,144 48,550
Other Income (Expense):
Interest expense (2,091) (1,512) (7,357) (4,244)
Interest and dividend income 22 145 61 226
Other income (expense) (869) (49) (1,698) (202)
-------- ------- -------- --------
Total (2,938) (1,416) (8,994) (4,220)
-------- ------- -------- --------
Earnings Before Taxes On Income 24,028 15,112 63,150 44,330
Provision For Taxes On Income 8,825 5,591 23,202 16,402
-------- -------- -------- --------
Net Earnings $ 15,203 $ 9,521 $ 39,948 $ 27,928
-------- -------- -------- --------
Net Earnings Per Share - Basic $.88 $.55 $2.31 $1.62
Net Earnings Per Share - Diluted $.87 $ .55 $2.29 $1.61
Dividends Per Share $.11 $ .11 $ .33 $ .33
Average Shares Outstanding - Basic 17,292,684 17,267,035 17,284,228 17,267,035
Average Shares Outstanding - Diluted 17,396,850 17,448,741 17,432,015 17,395,914
See accompanying notes which are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Consolidated Balance Sheets
As of September 30, 1998 and December 31, 1997
(In thousands, except share data)
-ASSETS-
Unaudited Audited
Sept. 30 Dec. 31
1998 1997
------------ ----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 9,787 $ 11,888
Marketable securities 1,806 1,741
Accounts receivable 80,521 59,237
Inventories 70,450 54,701
Prepaid expenses and other 1,510 2,662
Future income tax benefits 15,287 15,287
--------- ---------
Total current assets 179,361 145,516
Intangible Assets - Net 145,856 146,983
Other Assets 13,884 12,678
Property, Plant and Equipment:
At cost 206,757 202,831
Less accumulated depreciation (115,349) (111,640)
--------- ---------
Property, plant and equipment-net 91,408 91,191
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TOTAL $430,509 $396,368
--------- ---------
-LIABILITIES AND STOCKHOLDERS' EQUITY-
Current Liabilities:
Accounts payable and accrued expenses $116,478 $ 96,540
Current portion of long-term debt 14,696 15,400
Short-term borrowings 3,100 49,100
Product warranties 12,120 9,772
--------- --------
Total current liabilities 146,394 170,812
Non-current Liabilities:
Long-term debt, less current portion 91,293 66,359
Product warranties 4,962 4,955
Post-retirement health benefits obligations 19,923 19,699
Other 4,861 5,925
-------- --------
Total non-current liabilities 121,039 96,938
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Stockholders' Equity:
Common stock (24,497,655 shares
issued at both dates) 245 245
Additional paid-in capital 31,021 30,980
Cumulative foreign currency
translation adjustments (102) (192)
Retained earnings 213,202 179,088
Treasury stock at cost (7,202,630 and
7,230,620 shares, respectively) (81,290) (81,503)
-------- --------
Total stockholders' equity 163,076 128,618
-------- --------
TOTAL $430,509 $396,368
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See accompanying notes which are an integral part of these statements.
</TABLE>
<TABLE>
<CAPTION>
THE MANITOWOC COMPANY, INC.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1998 and 1997
(In thousands)
(Unaudited)
Sept. 30, 1998 Sept. 30, 1997
-------------- -------------
<S> <C> <C>
Cash Flows From Operations:
Net earnings $ 39,948 $ 27,928
Non-cash adjustments to income:
Depreciation and amortization 10,453 8,363
Deferred financing fees 298 225
Deferred income taxes 0 63
Gain on sale of fixed assets 835 157
Changes in operating assets and liabilities:
Accounts receivable (21,284) (1,418)
Inventories (15,749) (12,639)
Other current assets 1,152 72
Current liabilities 22,332 (83)
Non-current liabilities (1,063) (986)
Deferred income 224 434
Non-current assets (3,864) (59)
-------- --------
Net cash provided by operations 33,282 22,057
Cash Flows From Investing:
Purchase of temporary investments - net (65) (154)
Proceeds from sale of property, plant,
and equipment 1,291 70
Capital expenditures (9,282) (9,047)
-------- --------
Net cash used for investing (8,056) (9,131)
Cash Flows From Financing:
Dividends paid (5,834) (5,780)
Treasury stock issued 254 0
Proceeds from long-term borrowings 50,000 0
Payments on long-term borrowings (75,770) (8,301)
Change in short-term borrowings - net 4,000 0
-------- --------
Net cash used for financing (27,350) (14,081)
Effect of Exchange Rate Changes on Cash 23 (65)
-------- --------
Net increase (decrease) in cash and
cash equivalents (2,101) (1,220)
Balance at beginning of period 11,888 14,364
-------- --------
Balance at end of period $ 9,787 $ 13,144
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Supplemental cash flow information:
Interest paid $ 6,476 $ 4,969
Income taxes paid $ 27,848 $ 17,029
See accompanying notes which are an integral part of these statements.
</TABLE>
THE MANITOWOC COMPANY, INC.
Notes to Unaudited Consolidated Financial Statements
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Note 1.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments, representing
normal recurring accruals, necessary to present fairly the results of
operations for the quarter and nine months ended September 30, 1998 and
1997, the financial position at September 30, 1998, and the changes in
the cash flows for the nine months ended September 30, 1998 and 1997.
The interim results are not necessarily indicative of results for a full
year and do not contain information included in the Company's annual
consolidated financial statements and notes for the year ended December
31, 1997.
Note 2.
The components of inventory at September 30, 1998 and December 31, 1997
are summarized as follows (dollars in thousands):
<TABLE>
<CAPTION>
September 30 December 31,
1998 1997
------------- ------------
<S> <C> <C>
Components:
Raw materials $ 28,804 $ 25,881
Work-in-process 23,588 22,331
Finished goods 40,357 27,972
---------- ---------
Total inventories at FIFO costs 92,749 76,184
Excess of FIFO costs
over LIFO value (22,299) (21,483)
--------- ---------
Total inventories $ 70,450 $ 54,701
--------- ---------
</TABLE>
Inventory is carried at lower of cost or market using the first-in,
first-out (FIFO) method for 46% and 60% of total inventory at September
30, 1998 and December 31, 1997, respectively. The remainder of the
inventory is costed using the last-in, first-out (LIFO) method.
Note 3.
The United States Environmental Protection Agency ("EPA") has
identified the company as a potentially responsible party ("PRP")
under the Comprehensive Environmental Response Compensation and
Liability Act ("CERCLA"), liable for the costs associated with
investigating and cleaning up contamination at the Lemberger Landfill
Superfund Site (the "Site") near Manitowoc, Wisconsin.
Approximately 150 PRP's have been identified as having shipped
substances to the Site. Eleven of the potentially responsible parties
have formed a group (the Lemberger Site Remediation Group, or LSRG) and
have successfully negotiated with the EPA and the Wisconsin Department
of Natural Resources to settle the potential liability at the Site and
fund the cleanup.
Recent estimates indicate that the total cost to clean up the Site could
be as high as $30 million, however, the ultimate allocation of costs for
the Site are not yet final. Although liability is joint and several,
the company's percentage share of liability is estimated to be 11% of
the total cleanup costs. To date, the company has expensed $3.3 million
in connection with this matter. There were no expenses incurred for the
years ended December 31, 1997 and 1998. The company expensed $0.2
million for each of the years ended December 31, 1996 and 1995.
Remediation work at the Site has been completed, with only long-term
pumping and treating of ground water and Site maintenance remaining.
The remaining estimated liability for this matter, included in other
current and noncurrent liabilities at September 30, 1998 is $1.1
million.
As of September 30, 1998, 24 product-related lawsuits were pending. Of
these, one occurred between 1985 and 1990 when the company was
completely self-insured. The remaining lawsuits occurred subsequent to
June 1, 1990, since which time the company has had insurance coverages
ranging from a $5.5 million self-insured retention with a $10.0 million
limit on the insurer's contribution in 1990, to the current $1.0 million
self-insured retention and $16.0 million limit on the insurer's
contribution.
Product liability reserves at September 30, 1998 are $8.9 million; $3.8
million is reserved specifically for the 24 cases referenced above, and
$5.1 million is reserved for incurred but not reported claims. These
reserves were estimated using actuarial methods. The highest current
reserve for a non-insured claim is $25,000, and $.8 million for an
insured claim. Based on the company's experience in defending itself
against product liability claims, management believes the current
reserves are adequate for estimated settlements on aggregate self-
insured claims.
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. Presently, there is no
reliable means to estimate the amount of any such potential changes.
The company is also involved in various other legal actions arising in
the normal course of business. After taking into consideration legal
counsel's evaluation of such actions, in the opinion of management,
ultimate resolution is not expected to have a material adverse effect on
the consolidated financial statements.
Note 4.
During the fourth quarter of 1996, the company's decision to consolidate
and close its walk-in refrigeration plants located in Iowa and Tennessee
resulted in a $1.2 million charge to earnings in the Foodservice
segment. The charge includes a write-down to the estimated net
realizable values of the assets being abandoned and takes into
consideration future holding costs and costs related to the sale of the
properties. For the nine months ended September 30, 1998, $0.1 million
was charged against the reserve, with $12,000 charged to the reserve
during the third quarter of 1998. During the third quarter and first
nine months of 1997, $50,000 and $0.1 million were charged against the
reserve, respectively.
Assets currently held for sale include land and improvements, buildings,
and certain machinery and equipment at the "Peninsula facility"
located in Manitowoc, Wisconsin. The current carrying value of these
assets, and the assets mentioned above, determined through independent
appraisals, is approximately $3.6 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. These reserves also include
estimates for potential environmental liabilities on the Peninsula
location. During the years ended December 31, 1997, 1996 and 1995,
$35,000, $1.1 million and $0.6 million were paid and charged against
these reserves, respectively. For the third quarter and first nine
months of 1998 there were no charges against the reserve.
Note 5.
On May 19, 1997, the company`s board of directors authorized a three-
for-two stock split of the company's common stock in the form of a 50-
percent stock dividend payable on June 30, 1997 to shareholders of
record on June 2, 1997. As a result of the stock split, a total of
5,755,679 shares were issued. All references in the financial
statements to average number of common shares outstanding and related
earnings per share amounts, market prices per share of common stock, and
stock option plan data have been restated to reflect the split. The
company also split its common stock on a 3-for-2 basis on July 2, 1996.
Note 6.
The following is a reconciliation of the average shares outstanding used
to compute basic and diluted earnings per share. There is no earnings
impact for the assumed conversions of the stock options in each of the
quarters.
<TABLE>
<CAPTION>
Quarter Ended September 30 Nine Months Ended September 30
------------------------ --------------------------
1998 1997 1998 1997
---------------- --------------- --------------- --------------
Per Share Per Share Per Share Per Share
Shares Amount Shares Amount Shares Amount Shares Amount
----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Basic EPS 17,292,684 $.88 17,267,035 $.55 17,284,228 $2.31 17,267,035 $1.62
Effect of Dilutive
Securities- Stock
Options 104,166 181,706 147,787 128,879
--------- --------- --------- ---------
Diluted EPS 17,396,850 $.87 17,448,741 $.55 17,432,015 $2.29 17,395,914 $1.61
--------- --------- --------- ---------
</TABLE>
Note 7.
During February 1998, the FASB issued SFAS No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits," which
revises disclosures about pension and other postretirement benefit
plans. This Statement is effective for the Company's 1998 financial
statements, and restatement of disclosures for earlier years provided
for comparative purposes will be required unless the information is not
readily available. The company is currently evaluating the extent to
which its financial statements will be affected by SFAS No. 132.
In March 1998, the AICPA issued SOP 98-1, "Accounting For the Costs of
Computer Software Developed or Obtained for Internal Use," which
specifies the accounting treatment provided to computer software costs
depending upon the type of costs incurred. This Statement is effective
for the company's 1999 financial statements. Restatement of prior years
will not be required. The company does not believe that the adoption of
this Statement will have a significant impact on its financial position
or results of operations.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which requires that an entity
recognize derivative instruments, including certain derivative
instruments embedded in other contracts as either assets or liabilities,
and measure those instruments at fair value. This Statement is
effective for the Company's fiscal year 2000 first quarter financial
statements. Restatement of prior years will not be required. The
Company is currently evaluating the extent to which its financial
statements will be affected by SFAS No. 133.
Note 8.
On April 2, 1998, the company privately placed, with Prudential
Insurance Company, $50 million principal amount of the company's Series
A Senior Notes (the "Notes"). The company used the proceeds from the
sale of the Notes to pay down borrowings under the current term loan.
The Notes are unsecured and bear interest at the fixed annual rate of
6.54%. The Notes mature in 12 years, and require principal payments
beginning in the eighth year after issuance, resulting in an average
life of ten years. The agreement between the company and Prudential
Insurance Company pursuant to which the Notes were issued (the "Note
Agreement") includes covenants which require the company to maintain
certain debt ratios and certain levels of net worth. These covenants
are no more restrictive than covenants made by the company in connection
with certain other credit facilities. Under the terms of the Note
Agreement, the company may offer additional senior notes to Prudential
Insurance Company up to a maximum principal amount of $25 million,
although Prudential Insurance Company is not obligated to purchase any
additional notes.
Note. 9
On September 22, 1998, the company issued a press release announcing it had
signed an agreement to purchase the assets of USTC, Inc., a wholly owned
subsidiary of UK-based Powerscreen International PLC.
Located in York, Pennsylvania, USTC builds three proprietary product lines,
including boom trucks, rough terrain forklifts, and other types of material-
handling equipment. USTC was formed in 1996 when Powerscreen purchased the
boom truck product line formerly built by JLG. Presently, the USTC product
line includes nine models of boom trucks offering capacities from 10 to 32
tons and tip heights to 170 feet. USTC has approximately 200 employees and
had consolidated sales exceeding $30 million for its fiscal year ending March
31, 1998.
The company plans to finance the purchase with a combination of short- and
long-term debt. The estimated price includes cash in the mid-$40 million
range plus the assumption of trade debt. Closing is contingent upon government
approval and approval by Powerscreen's shareholders. The transaction is
anticipated to close in late October to early November.
On September 9, the company announced the agreement to acquire a fifty percent
ownership stake in an Italian ice-machine manufacturer Fabricca
Apparecchiatture per la Produzione di Ghiacco S.r.l. (FAG) of Milan, Italy, in
a cash transaction.
FAG produces Icetronic and Compact brand icemakers as well as private label
ice machines in capacities ranging from 10 to 60 kilos (22 to 132 pounds) of
ice per day. This is the size range most popular in Europe and in other world
markets where ice usage is significantly less than in North America.
Under terms of the Agreement, the company has an option to purchase an
additional thirty percent of the shares over five years.
Note 10.
Many currently installed computer systems and software products are coded to
accept only two digit entries in the date code field (i.e., "98" for
"1998"), and will need to be modified or upgraded to accept four digit
entries in order to distinguish 21st century codes (i.e., "2002") from 20th
century dates (i.e., "1902"). As a result, in less than two years, the
computer systems and/or software used by many companies will need to be
upgraded to comply with the "Year 2000" requirements. Significant
uncertainty exists concerning the potential effects associated with such
compliance.
In 1996, Manitowoc began to assess and design a plan to resolve Year 2000
compliance issues potentially affecting the company, both with respect to
internal systems and systems on which the Manitowoc's major vendors,
suppliers, and distributors are reliant. To date, a comprehensive review has
been conducted of Manitowoc's systems and software to identify applications
that could be affected by the Year 2000 issue, and an implementation plan to
resolve potential problems, has been developed. Manitowoc is currently in the
process of converting, modifying, and upgrading its systems and software to
Year 2000 compliant systems and software, as necessary. Manitowoc believes
many of its systems and much of its software are currently Year 2000
compliant, and is engaged in tests and diagnostic procedures to verify such
compliance. In September 1998, the company hired a consulting firm to review
systems and software. Results of this audit were extremely favorable and
actions are currently being taken in response to certain concerns that were
presented. Manitowoc has incurred approximately $4.0 million in costs to
upgrade its systems, including Year 2000 issues. Manitowoc estimates costs
associated with scheduled system upgrades for the remainder of 1998 and 1999
will approximate $0.5 million, including upgrades to address Year 2000
compliance issues. The company anticipates that it will be able to achieve
Year 2000 compliance by the end of 1999 with respect to internal systems and
software, and does not currently anticipate any material disruption in its
business operations to achieve this goal.
Manitowoc has begun the process of making inquiries and gathering information
regarding Year 2000 compliance exposures faced by its principal vendors and
suppliers and its major dealers and distributors. Manitowoc has insufficient
information at this time to fully assess the degree to which such vendors,
suppliers, dealers, and distributors have addressed or are addressing Year
2000 compliance issues, and to fully evaluate the risk of disruption to
operations that those businesses might face relating to Year 2000 compliance
issues. A review of Year 2000 compliance for certain major vendors is planned
for 1999. However, no major part or critical operation of any segment of
Manitowoc's business is reliant on a single source for raw materials,
supplies, or services, and Manitowoc has multiple distribution channels for
most of its products. In the event information presently being gathered
indicates that certain vendors, suppliers, or distributors will not be Year
2000 compliant, we believe we will be able to find cost-competitive,
alternative sources for raw materials, supplies, and services necessary to
continue production and distribution.
Nonetheless, given the inherent uncertainty of the scope of the Year 2000
compliance issue worldwide and the various levels of severity and catastrophe
that have been predicted by numerous "experts" and commentators, there can
be no absolute assurance that we will be able to identify all Year 2000
compliance risks faced by Manitowoc, or that all of our contingency plans will
assure uninterrupted business operations across the millennium.
Note 11.
Certain reclassifications have been made to the financial statements of
prior years to conform to the presentation for 1997.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations for the Quarter and Nine Months Ended
September 30, 1998 and 1997.
- ------------------------------------------------------------
Net sales and earnings from operations by business segment for the quarter
and nine months ended September 30, 1998 and 1997 are shown below (in
thousands):
<TABLE>
<CAPTION>
QUARTER ENDED YEAR-TO-DATE
------------------------ ----------------------
Sept. 30 Sept. 30 Sept. 30 Sept. 30
1998 1997 1998 1997
-------- ------- --------- -------
<S> <C> <C> <C> <C>
NET SALES:
Foodservice products $90,564 $ 67,099 $244,801 $185,549
Cranes and related products 84,858 60,292 247,195 180,501
Marine 8,601 6,544 35,065 28,911
-------- -------- -------- --------
Total $184,023 $133,935 $527,061 $394,961
-------- -------- -------- --------
EARNINGS (LOSS) FROM OPERATIONS:
Foodservice products $ 16,804 $ 11,905 $ 41,747 $ 29,518
Cranes and related products 12,762 6,892 35,452 23,322
Marine 858 544 5,914 4,451
General corporate expense (2,286) (2,033) (7,454) (6,401)
Amortization (1,172) (780) (3,515) (2,340)
-------- ------- --------- --------
Total $ 26,966 $ 16,528 $ 72,144 $ 48,550
-------- ------- -------- --------
</TABLE>
Net earnings for the three months ended September 30, 1998 were $15.2 million,
or 87 cents per diluted share, compared with earnings of $9.5 million, or
55 cents per diluted share in the same three month period in 1997. It was the
twelfth consecutive quarter in which the company has had improved year-over-
year quarterly earnings.
Net sales for the period totaled $184 million, up from $134 million in the same
quarter of 1997.
Net earnings for the nine months ended September 30, 1998 were $39.9 million,
or $2.29 per diluted share, up 42 percent from the same nine-month period in
1997, when the company had net earnings of $27.9 million, or $1.61 per diluted
share.
Net sales for the period totaled $527.1 million, up 33 percent from the same
nine-month period in 1997 when sales were $395.0 million.
Revenues and operating earnings for both the three- and nine-month periods
were higher for each of the company's three business segments.
Sales for the foodservice products segment were $90.6 million for the third
quarter of 1998, compared to $67.1 million in 1997. Operating margin rose to
18.6 percent, compared with 17.7 percent a year earlier. Third quarter 1998
results were buoyed by the positive market reception of the recently introduced
"Q" Series ice machines, synergism resulting from the acquisition of SerVend
International, and the warmer than normal summer in much of the nation.
Year-to-date sales and earnings were $244.8 million and $41.7 million,
respectively.
In September, the company acquired a 50 percent interest in Fabbrica
Apparecchiatture per la Produzione di Ghiacciao S.r.l. (FAG), a small Italian
ice-machine manufacturer, as a stepping stone toward a growing manufacturing
base in Europe.
Cranes and related products sales for the third quarter were $84.9 million,
compared with sales of $60.3 million for the same period last year. Third
quarter operating margin in the crane segment rose to 15 percent, compared with
11.4 percent in the same period in 1997. Year-to-date sales and operating
earnings were $247.2 million and $35.5 million, respectively, compared with
$180.5 million and $23.3 million for the same period in 1997.
Despite heavy shipments during the third quarter, the company's backlog of
unfilled orders of $155 million remains well ahead of last year's third
quarter level, and is near its all-time high. The newly introduced crane
platforms, the 777T and model 21000, are receiving enthusiastic market
acceptance.
Year-to-date sales and earnings for the marine segment were $35.1 million and
$5.9 million, respectively, compared with sales and earnings of $28.9 million
and $4.5 million. This segment shows signs of continuing growth on top of its
current strong performance.
Tax rates for the quarter just ended, the prior-year quarter, and the prior
quarter held steady at about 37 percent.
Operations continue to generate significant cash flow. In the most recent
quarter, the company had cash flow of $22.4 million, compared with $15.7
million in the third quarter of last year. This has allowed the company to
reduce debt by $21.8 million since the first of the year.
Financial Condition at September 30, 1998
- ----------------------------------------------
The Company's financial condition remains strong. Cash and marketable
securities of $11.6 million and future cash flows from operations are adequate
to meet the Company's liquidity requirements for the foreseeable future,
including payments for long-term debt, costs associated with the plant
consolidation, and capital expenditures.
This report on Form 10-Q includes forward-looking statements based on
management's current expectations. Reference is made in particular to the
description of the company's plans and objectives for future operations,
assumptions underlying such plans and objectives and other forward-looking
statements in this report. Such forward-looking statements generally are
identifiable by words such as "believes," "intends," "estimates," "expects" and
similar expressions.
These statements involve a number of risks and uncertainties and must be
qualified by factors that could cause results to be materially different from
what is presented here. This includes the following factors for each business:
Foodservice Equipment - demographic changes affecting the number of women in the
workforce, general population growth, and household income; serving large
restaurant chains as they expand their global operations; specialty foodservice
market growth; and the demand for equipment for small kiosk-type locations.
Cranes and Related Products - market acceptance of innovative products;
cyclicality in the construction industry; growth in the world market for heavy
cranes; demand for used equipment in developing countries. Marine - shipping
volume fluctuations based on performance of the steel industry; five-year dry-
docking schedule; reducing seasonality through non-marine repair work.
PART II. OTHER INFORMATION
- -------------------------------
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------
(a) Exhibits: See exhibit index following the signatures on this
Report, which is incorporated herein by reference.
(b) Reports on Form 8-K: During the third quarter ended September
30, a report on Form 8-K dated as of September 22, 1998 was filed
stating that the Company issued a press release announcing that it
entered into an agreement to acquire the operations and assets of
USTC, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE MANITOWOC COMPANY, INC.
(Registrant)
/s/ Terry D. Growcock
---------------------------------
Terry D. Growcock
President and
Chief Executive Officer
/s/ Robert R. Friedl
---------------------------------
Robert R. Friedl
Senior Vice President and
Chief Financial Officer
/s/ E. Dean Flynn
---------------------------------
E. Dean Flynn
Secretary
October 27, 1998
THE MANITOWOC COMPANY, INC.
EXHIBIT INDEX
TO FORM 10-Q
FOR QUARTERLY PERIOD ENDED
September 30, 1998
Exhibit Filed
No Description Herewith
- --------- ------------------------------------ -------------
27 Financial Data Schedule X
<TABLE> <S> <C>
<ARTICLE> 5
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