The Manitowoc Company (Manitowoc, Wisconsin, U.S.) reported what it called outstanding results for the quarter ended December 31, 2006. As a result, the company's fiscal 2006 results set records for sales, earnings per share and cash generation. The company is a diversified manufacturer whose businesses include production of icemakers and foodservice appliances, as well as crane manufacturing and ship building.
For the most-recent quarter, net sales increased 32 percent to U.S. $775.2 million from $589.3 million during the fourth quarter of 2005. Reported earnings per diluted share were $0.69 for the fourth quarter of 2006 compared to $0.30 for the fourth quarter of 2005. Earnings per diluted share from continuing operations before special items for the fourth quarter of 2006 increased 188 percent to $0.69, up from $0.24 for the fourth quarter of 2005.
For the 12 months ended December 31, 2006, the company's net sales totaled $2.9 billion, an increase of more than 30 percent from fiscal 2005. Earnings per share from continuing operations before special items totaled $2.81 for the 2006 fiscal year, an increase of 134 percent from $1.20 in the prior year, and 2006 full year cash from operations totaled $294.1 million, up 176 percent from $106.7 million in 2005. All three metrics set new records and greatly exceeded prior records from the company's 104-year history. Reported GAAP earnings per diluted share were $2.65 for the full year ended December 31, 2006 compared to reported GAAP earnings per diluted share of $1.07 for the same period in 2005.
Company Chairman and CEO Terry D. Growcock credits the company's crane business with most of the growth. "Our financial and shareholder performance in 2006 is the direct result of our long-held strategy to build a global leadership position in the lifting industry," said Terry D. Growcock, Manitowoc's chairman and chief executive officer.
Foodservice fared less well but remains a strong business for the company. "Our Foodservice business encountered several headwinds during 2006 and has a clear plan for improvement in 2007. Despite the current challenges, this business provides our highest margins and is a key element of Manitowoc's future growth strategy," Growcock said.
In the Foodservice segment, fourth-quarter 2006 net sales increased 4 percent to $94.0 million from $90.8 million in the fourth quarter of last year. Operating earnings for the fourth quarter of 2006 were $9.2 million, a decrease of 16 percent from the same period in 2005. Operating profit was adversely affected by commodity cost increases, weakness in beverage equipment sales and investments in an ERP system.
"The recent decline in Foodservice segment profitability can be attributed to several factors that we will actively address in 2007," Growcock said. "Sales of beverage equipment by our Foodservice segment in the U.S. have been flat over several quarters in anticipation of a major national refresh program that is expected to commence in the second half of 2007. The consolidation of our refrigeration operations into a single plant in late 2005 should yield the anticipated operational efficiencies in 2007 as we have re-engineered that facility to scale the plant's workforce and manufacturing processes to match its new requirements. Finally, we expect to see the benefits of an ERP system that required both capital and management focus during 2006. These factors have muted the excellent performance of our ice business, which has gained North American market share during 2006 and is building on a reputation for excellence in Asia."
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