Oct. 29, 2009 (PR Newswire) -- MANITOWOC, Wis., Oct. 29 /PRNewswire-FirstCall/ -- The Manitowoc Company, Inc. (NYSE: MTW) today reported sales of $881.5 million for the third quarter of 2009, down 20 percent from $1,106.8 million in the third quarter of 2008. The sales decrease was due primarily to a 52 percent decline in crane sales, partially offset by the additional revenues related to the acquisition of Enodis plc in October 2008.

On a GAAP basis, the company reported a loss of $17.7 million, or $0.14 per diluted share for the quarter, versus a net loss of $26.1 million, or $0.20 per share in the third quarter of 2008. Both periods included unusual items. Excluding unusual items, the adjusted loss from continuing operations was $4.9 million, or $0.04 per share, for the third quarter of 2009, versus similarly adjusted earnings of $92.7 million, or $0.71 per share in the third quarter of 2008. A reconciliation of GAAP earnings to earnings from continuing operations before special items is provided later in this press release.

"Despite lower sales and operating earnings, cash flow improved as a result of working-capital reductions, operational improvements, and cost reductions that we have implemented over the past year," said Glen E. Tellock, Manitowoc's chairman and chief executive officer. "Our cash flow from operations of $198 million during the third quarter enabled further progress toward our aggressive debt reduction goals. Thus far in 2009, we have reduced our debt by $262 million.

"We continue to focus on strengthening the business during this challenging economic decline. Our top priorities are to reduce debt, flawlessly integrate our Foodservice business, and restructure our Crane operations for recovery. We have had considerable success in all three areas, so we are well positioned to resume our long-term growth trends as the world economy improves."

Foodservice Segment Results

In the Foodservice segment, third-quarter 2009 net sales increased to $402.0 million from $115.8 million in the third quarter of 2008 and from $382.5 million in the second quarter of 2009. The year-over-year increase was related to the acquisition of Enodis. On a pro-forma basis, Foodservice revenues decreased 23 percent in the third quarter of 2009 from $519.1 million in the third quarter of 2008.

Foodservice operating earnings for the third quarter of 2009 were $58.9 million, up from $18.4 million in the same period in 2008, and $46.4 million in the second quarter of 2009. This resulted in Foodservice segment operating margins of 14.7%, a significant increase from 12.1% in the second quarter. The sequential-quarter margin improvement was due primarily to the substantial progress being made in the Enodis integration and overall cost control measures. Year-to-date, the Foodservice segment has realized more than $26 million of integration synergies, which we now believe will reach as much as $34 million for the full year.

"Our Foodservice operating margins continue to improve as the integration activity progresses," said Tellock. "In addition, new product innovations have resulted in a number of contract wins, spanning our beverage equipment, food retail refrigeration, and cooking systems. Innovative products will play a major role in driving our future success, and we are making significant progress toward this goal across all major product lines."

Crane Segment Results

Third-quarter 2009 net sales in the Crane segment were $479.5 million, down 52 percent from $991.0 million in the third quarter of the prior year. On a sequential-quarter basis, sales were down 26 percent from $652.3 million during the second quarter of 2009. Crane segment operating earnings for the third quarter of 2009 decreased to $20.8 million from $139.0 million in the same period last year, and $49.5 million in the second quarter of 2009. As is typically the case, the Crane segment's third-quarter margin decline is impacted by the European holidays.

Crane segment backlog totaled $667 million at September 30, 2009, a decrease of 26 percent from the $901 million backlog at June 30, 2009. However, the company has seen stabilization in the form of net positive order flow. This positive trend started in March, continued to increase over the succeeding six months, and is expected to continue into the fourth quarter, as well as the first quarter of next year.

"During the first half of 2009, crane sales still benefited from the very strong backlog on our books prior to the extreme cyclical downturn that developed rapidly in the fourth quarter of 2008," said Tellock. "It is typical for both the size and the duration of the backlog to diminish as demand wanes since the factories are not operating as close to their capacity. As a result, the percentage of our orders versus revenues has increased from 18 percent in the first quarter to over 50 percent in the third quarter.

"While improvement in the U.S. and European markets is not expected in the near term, there are pockets of growth in Asia, Latin America, Africa, and the Middle East. Going forward, Manitowoc should benefit from the global restructuring that we have been implementing over the past year, as well as our position in emerging markets that are leading the economic recovery."

Cash Flow/Debt Reduction

Cash flow from operations in the third quarter of $198 million enabled Manitowoc to continue making progress in its debt reduction objective. Total debt was reduced by approximately $140 million in the quarter. With year-to-date debt reduction of $262 million, Manitowoc continues to target full-year debt reduction of $450 million.

GAAP Reconciliation

In this release, the company refers to various non-GAAP measures. We believe that these measures are helpful to investors in assessing the company's ongoing performance of its underlying businesses before the impact of special items. In addition, these non-GAAP measures provide a comparison to commonly used financial metrics within the professional investing community which do not include special items.