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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 fiscal year ended December 31, 1998
[_] 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: (920) 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)
Common Stock Purchase Rights
Securities Registered Pursuant to Section 12(g) of the Act:
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. [ X ]
The Aggregate Market Value on January 29, 1999, of the registrant's
Common Stock held by non-affiliates of the registrant was $658,746,165
based on the $39.88 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 January 29, 1999 the most recent practicable date, was 17,305,525.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of registrant's Annual Report to Shareholders for the period
ended December 31, 1998 (the "1998 Annual Report"), are incorporated by
reference into Parts I and II of this report. Portions of the registrant's
Proxy Statement, to be prepared and filed for the Annual Meeting of
Shareholders, dated March 15, 1999 (the "1999 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, ice/beverage dispensers and refrigeration products for the
foodservice, lodging, convenience store, healthcare and the soft-drink
bottling and dispensing industries; (b) the design and manufacture of
cranes and related products which are used by the energy, construction,
mining and other industries; and (c) ship-repair, conversion, and new
construction services for the maritime industry. The Company currently
operates a large-crane manufacturing facility and an ice machine and reach-
in refrigerator/freezer manufacturing facility in Manitowoc, Wisconsin; six
refrigeration products facilities located in Tennessee, Nevada, and
Wisconsin; an ice/beverage dispenser manufacturing facility in Indiana; a
dispensing valve manufacturing facility in Oregon; ship repair yards in
Sturgeon Bay, Wisconsin and Toledo and Cleveland, Ohio; a crane re-
manufacturing facility in Bauxite, Arkansas; a crane replacement parts
manufacturing facility in Punxsutawney, Pennsylvania and Pompano Beach,
Florida; and boom truck crane operations in Georgetown, Texas and York,
Pennsylvania.
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", "Eleven-Year Financial Summary and
Business Segment Information", Note 1 - "Research and Development" and Note
16 to Consolidated Financial Statements on pages 24-29, 30-31, 37, and 42,
respectively, of the 1998 Annual Report, which are 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/beverage
dispensers, and related accessories including water filtration systems,
reach-in and walk-in refrigerators and freezers, refrigerated undercounters
and food prep tables, private label residential refrigerator/freezers,
post-mix beverage dispensing valves, compressor racks and modular
refrigeration systems. Serving the needs of foodservice, lodging,
hospitality, 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 Ice, Inc. Offering
daily production capacities from 160 to 1,890 pounds, Manitowoc ice
machines are complemented by storage bins with capacities from 150 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. All units feature patented, top-mount, drop-in refrigeration
modules that operate with environmentally friendly HFC refrigerants.
In September 1997, Manitowoc Ice, Inc. introduced its new Q-Series
model. The new models set an industry standard for aesthetic design and
incorporate plastic and stainless steel components for added durability and
corrosion resistance. In addition, all "Q" models use environmentally
friendly refrigerants. Previously during 1996, Manitowoc Ice, Inc.
introduced the J-Series ice-cube machines that feature a single evaporator
rather than two that were used in earlier models. This improves
reliability, simplifies maintenance, and reduces operating cost. All J-
Series models also feature HFC refrigerants and the patented self-cleaning
system, which cleans and sanitizes our ice machines at a flip of a switch.
An automated self-cleaning system is also available as an option.
On January 8, 1999, the company completed its acquisition of
Purchasing Support Group (PSG). PSG is a systems integrator, with
nationwide distribution of backroom equipment and support system
components. It serves the beverage needs of restaurants, convenience
stores and other outlets. PSG operates in the Northeast and Atlantic Coast
regions, as well as in portions of Arizona, California, Florida, Georgia
and Nevada. This acquisition is expected to improve the distribution of
Manitowoc's beverage dispensing equipment and open new markets.
On September 9, 1998, Manitowoc acquired a 50% ownership interest in
Fabbrica Apparecchiatture per Produzione di Ghiaccia S.r.L. (F.A.G.), and
an option to purchase an additional 30% ownership over the next five years.
This Milan, Italy-based company produces Icetronic and Compact brand ice
makers and private label machines, with capacities between 22-132 pounds
per day. The acquisition gives Manitowoc a manufacturing base in Europe
and broadens its product offering to include smaller models, which are more
appropriate for European and developing markets.
On October 31, 1997, the Company acquired substantially all of the net
assets and business of SerVend International, Inc. ("SerVend") from SerVend
and its affiliate, Fischer Enterprises, Ltd. SerVend is one of the world's
largest manufacturers of ice/beverage dispensers and dispensing valves for
the soft drink industry. Its customers include many of the major quick-
service restaurant chains, convenience stores, and soft-drink bottlers in
the nation. SerVend is headquartered in Sellersburg, Indiana. It has one
manufacturing facility in Sellersburg and another in Portland, Oregon, and
employs about 300 persons.
Effective December 1, 1995, the Company completed the purchase of The
Shannon Group, Inc. The companies acquired in the acquisition were Kolpak,
McCall, Tonka and Kolpak Manufacturing Co. In December 1997, the Company
sold Tonka, its wood-rail walk-in refrigerator/freezers manufacturer in
Greeneville, TN. Kolpak and McCall are manufacturers of commercial
refrigerators, freezers and related products, ranging from small under-
counter units to 300,000 square foot refrigerated warehouses. Among their
wide range of products, Kolpak and McCall are best known for their foamed-
in-place walk-in refrigeration units, refrigerated food-prep tables, reach-
in refrigerator/freezers and modular refrigeration systems. Kolpak and
McCall supply walk-in and reach-in refrigerator/freezers to many of the
leading restaurant and grocery chains in the United States. Kolpak
Manufacturing Co. produces the General Electric line of Monogram
residential refrigerator/freezers.
For additional information on acquisitions, see Note 11 to
Consolidated Financial Statements on page 40 of the 1998 Annual Report,
which is incorporated herein by reference.
Since 1995, the Company has had an arrangement with a joint-venture
partner, Hangzhou Household Electric Appliance Industrial Corporation, to
produce ice machines in China. The joint-venture factory produces the
Company's new model QM-20 ice machine. The QM-20 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 Caribbean, and Africa. A new distribution facility in
Rotterdam, Holland has enabled the Company to increase sales of ice and
refrigerated foodservice equipment in Europe.
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, 1998 and 1997 were not
significant.
Cranes and Related Products
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The Company designs and manufactures a diversified line of crawler and
truck-mounted lattice boom cranes, hydraulically powered telescopic boom
trucks, rough-terrain forklifts, and material handling equipment, which
are sold under the "Manitowoc", "Manitex", "USTC", and "West-Manitowoc"
names for use by the energy, construction, mining, pulp and paper, and
other industries. The Company also specializes in crane rebuilding and
remanufacturing services, aftermarket replacement parts for
cranes and excavators and industrial repair and rebuilding services for
metal-forming, scrapyard and recycling equipment, which are sold under the
"Femco" name. 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, and are being more productive in
a number of applications. Six models, along with various attachments, have
been introduced with lifting capacities ranging from 65 to 1,500 U.S.
tons.
In 1998, Manitowoc Cranes introduced the 220-ton 777T lattice boom
truck crane which is roadable in all 50 states. This truck-mounted crane
can be driven to virtually any jobsite, be erected without the aid of an
assist crane, and be ready to work in a matter of hours.
In 1997, Manitowoc Cranes introduced the Model-777 lattice-boom
crawler crane that offers a lifting capacity between approximately 175 and
200 U.S. tons. One of the 777's more unique features is its boom hoist,
which consists of two double-acting hydraulic cylinders that connect its
moving mast to the rotating bed. Using hydraulic cylinders to control the
boom angle increases boom-raising speed, reduces maintenance, and
simplifies machinery layout, compared with the commonly used drum-type boom
hoist.
During 1996, Manitowoc Cranes 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.
Manitowoc introduced two innovative attachments for the highly
successful Model 888 during 1996. The 888 RINGER is a 45-foot diameter
attachment that boosts the 888's nominal capacity to 660 U.S. tons. For
long-reach applications, the 888 can also be rigged with a luffing-jib
attachment that delivers a 105,500-pound maximum capacity and allows the
888 to operate with a maximum combination of 370 feet of boom and luffing
jib.
In addition, Manitowoc Cranes plans to introduce the Model 21000 in
1999. The Model 21000 is the largest mobile crane Manitowoc Cranes has
ever built with a capacity of 1,000 U.S. tons.
To serve the growing market of the smaller independent contractors and
rental-fleet customers who need smaller, less complicated, easily
transportable, and more versatile cranes, West-Manitowoc has developed a
new line of value-priced cranes with those characteristics. The first of
these, the 100-ton lifting capacity Model-222 crane, formerly known as the
West-100, has successfully captured a large portion of the rental market
for self-erecting cranes. During 1997, West-Manitowoc introduced the
222EX, a self-erecting crawler crane that will serve the specialized needs
of bridge and foundation contractors. West further broadened its product
line in 1998 by introducing the Model-111, a 65-ton crawler crane designed
to serve the varied demands of the general construction market. During
1998, West-Manitowoc was consolidated into Manitowoc Cranes.
During 1998, Manitex introduced its new Model 22101S boom truck, which
is the highest capacity boom truck ever mounted on a single rear-axle
chassis, and the 38-ton Model 38100S boom truck, which is the highest
capacity boom truck in the Manitex "S" series fleet.
Femco Machine Co., acquired in 1994, 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, located in Bauxite, Arkansas,
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 sold 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, and Northampton,
England. In July, 1996, the Company sold its sales subsidiary in Benicia,
California. During calendar 1995, the Company sold its sales subsidiaries
in Long Island City, New York; LaMirada, California; Seattle, Washington;
and Chur, Switzerland.
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 16 to Consolidated Financial Statements on page 42 of the
1998 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
year. The backlog of unfilled orders for cranes and related products at
December 31, 1998 approximated $144.1 million, as compared with $149.1
million a year earlier. The decrease is primarily due to the faster order
fill rates achieved during 1998, which meant the backlog was being worked
off more quickly than in previous years.
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 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. (BSC), 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 automated cargo/ballasting
systems. To reduce seasonality, the Marine Group has begun to perform non-
marine industrial repair during the summer months.
During 1998, BSC was awarded a contract to build a twin-hull, ocean-
going tank barge for use by Mobil Oil Corporation. Scheduled to enter
service in early 2000, this 140,000-barrel barge will haul grade A refined
petroleum products, including gasoline, jet fuel, and distillates, to major
metropolitan markets along the Eastern Seaboard and Hudson River.
During 1997, BSC took on the project of converting a bulk carrier, the
J. L. Mauthe, into a tug/barge configuration. This conversion was
completed in January 1998. In 1996, BSC completed construction of a self-
unloading cement barge for a Great Lakes customer. BSC intends to pursue
these types of projects with other Great Lakes customers.
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 year. At December 31, 1998, the backlog approximated
$9.1 million (not including construction projects), compared to $7.9
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 its 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.
While the Company believes its ownership of this intellectual property is
adequately protected in customary fashions under applicable law, no single
patent, trademark or license is critical to the company's overall business.
Seasonality
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Typically, the second 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
build inventories during the second quarter 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 in
advance of that 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 and the work is typically
completed during the first and second 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. The Company is the leading, low-cost, producer of ice machines in
North America.
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; Masterbilt, New Albany,
Mississippi; and American Panel, Ocala, Florida. The Company is one of the
leading producers of small undercounter refrigeration units and large
refrigerated warehouses as well as a supplier of walk-in
refrigerator/freezers to many of the leading restaurant and grocery chains
in the United States.
Competitors within the beverage dispenser/dispensing valves market
include IMI Cornelius, Anoka, Minnesota, and Lancer Corporation, San
Antonio, Texas. The Company is one of the leading suppliers of fountain
equipment and dispensing valves used by soft-drink bottlers.
With respect to crawler cranes, there are numerous domestic and
foreign manufacturers of cranes with whom the Company competes, including
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; Hitachi Construction Machinery Co., Ltd., Tokyo,
Japan; and Terex Corporation, Westport, Connecticut. Within the market the
Company serves, lattice boom crawler cranes with lifting capacities greater
than 150 tons, Manitowoc is a world leader of this equipment.
The competitors within the boom truck crane market include Terex
Corporation, Westport, Conneticut, and Grove Crane, Shady Grove,
Pennsylvania. The Company believes that its current output of boom truck
cranes ranks second among its competitors.
In the ship repair operation, the Company is one of two operational
shipyards on the Great Lakes capable of drydocking and servicing 1000 foot
Great Lakes bulk carriers; the other is Erie Marine Enterprises, Erie,
Pennsylvania. 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.
For additional information regarding the company's competition, see
"Company Overview" on pages 6-7 of the 1998 Annual Report, which is
incorporated herein by reference.
Employee Relations
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The Company employs approximately 3,300 persons, of whom about 600 are
salaried. The number of employees is consistent with the prior year.
The Company has labor agreements with 17 union locals. There have
been no work stoppages during the three years ended December 31, 1998.
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; Parsons, Tennessee;
Sellersburg, Indiana; Mason City, Iowa; and Scotts Hill, Tennessee.
Manitowoc Ice, Inc.'s production of ice machines and reach-in coolers
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. In
1998, the company closed the Scotts Hill facility and consolidated the
warehousing into its Parsons, Tennessee facility. In 1996, the Company
closed the Mason City facility and consolidated the manufacturing with the
previously leased facility in Greeneville, Tennessee. The Mason City and
Scotts Hill plants are currently held for sale.
SerVend International, Inc. has approximately 140,000 square feet of
manufacturing and office space located in Sellersburg, Indiana.
Cranes and related products are manufactured at plant locations in
Manitowoc, Wisconsin; Georgetown, Texas; York, Pennsylvania; 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 consolidate all its activities at 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.
The Punxsutawney operations consist of two manufacturing and office
facilities operated as Femco Machine Co. 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 Manitex boom truck 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.
The USTC manufacturing and office facility, acquired in November 1998,
has approximately 110,000 square feet and is located on approximately 17
acres in York, Pennsylvania.
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 approximately 90,000 square feet in Selmer, Tennessee;
150,000 square feet in Sparks, Nevada; and 5,000 square feet in Portland,
Oregon. The Company also leases office space in Franklin, Tennessee. In
addition, the Company leases sales offices and warehouse facilities for
cranes and related products in Mokena, Illinois. 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.
The acquisition of PSG included four leased distribution facilities in
Roanoke, Virginia; Liphonia, Georgia; Glendale, California; and East
Granby, Connecticut.
Item 3. LEGAL PROCEEDINGS
---------------------------------
The information required by this item is incorporated by reference
from Note 13 to Consolidated Financial Statements on pages 40-41 of the
1998 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, 1998.
Executive Officers of the Registrant
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Each of the following officers of the Company has been elected to a one-
year term by the Board of Directors. The information presented is as of
January 31, 1999.
Position With Principal Position
Name Age The Registrant Held Since
----------- ------ -------------------- ------------------
Terry D. Growcock 53 President & CEO 1998
Robert R. Friedl 44 Senior Vice President & CFO 1996
Thomas G. Musial 47 Vice President - Human Resources 1995
Glen E. Tellock 37 Vice President - Finance 1998
and Treasurer
E. Dean Flynn 57 Secretary 1993
Terry D. Growcock, 53, president and chief executive officer since 1998.
Previously, president and general manager of Manitowoc Ice, Inc. (1996);
also executive vice president of Manitowoc Equipment Works (1994). Prior
to joining Manitowoc, Mr. Growcock served in numerous management and
executive positions with Siebe plc and United Technologies.
Robert R. Friedl, 44, senior vice president and chief financial officer
since 1996. Previously, vice president and chief financial officer (1992),
vice president of finance (1990), and assistant treasurer (1988). Prior to
joining Manitowoc, Mr. Friedl served as chief financial officer with
Coradian Corp.; was co-founder, vice president of finance, and treasurer of
Telecom North, Inc.
Thomas G. Musial, 47, vice president human resources since 1995.
Previously, manager of human resources (1987) and personnel/industrial
relations specialist (1976).
Glen E. Tellock, 37, vice president of finance and treasurer since 1998.
Previously, Mr. Tellock served as corporate controller of the company
(1992) and director of accounting (1991). Prior to joining Manitowoc, Mr.
Tellock served as financial planning manager with the Denver Post
Corporation, and as an audit manager for Ernst & Whinney.
E. Dean Flynn, 57, secretary since 1993. Previously, manager of corporate
insurance (1990); assistant corporate secretary (1987); and legal assistant
(1985). Formerly 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
-----------
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
------------------------------------------------------------
The information required by this item is incorporated by reference from
"Eleven-Year Financial Summary and Business Segment Information,"
"Quarterly Common Stock Price Range," "Supplemental Quarterly Financial
Information (Unaudited)," and "Investor Information," on pages 30-31, 44
and back cover, respectively, of the 1998 Annual Report.
Item 6. SELECTED FINANCIAL DATA
------------------------------------------
The information required by this item is incorporated by reference from
"Eleven-Year Financial Summary and Business Segment Information" on pages
30-31 of the 1998 Annual Report.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------------------------------
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 24-29 of the 1998 Annual Report.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
--------------------------------------------------------------
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 24-29 of the 1998 Annual Report.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
------------------------------------------------------------
The financial statements required by this item are incorporated by
reference from pages 32-43 of the 1998 Annual Report. Supplementary
financial information is incorporated by reference from "Supplemental
Quarterly Financial Information (Unaudited)" on page 44 of the 1998 Annual
Report.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
---------------------------------------------------------
None.
PART III
------------
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-----------------------------------------------------------
The information required by this item is incorporated by reference from the
sections of the 1999 Proxy Statement captioned "Section 16(a) Beneficial
Ownership Reporting Compliance" and "Election of Directors". 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
the sections of the 1999 Proxy Statement captioned "Compensation of
Directors", "Executive Compensation", "Contingent Employment Agreements",
and "F. M. Butler Supplemental Retirement Agreement".
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
-------------------------------------------------------------
The information required by this item is incorporated by reference from the
section of the 1999 Proxy Statement captioned "Ownership of Securities".
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
------------------------------------------------------------
None.
PART IV
------------
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
-------------------------------------------------------------
(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 years ended December 31, 1998,
1997, and 1996 Financial Statements.
Consolidated Statements of Earnings for the years ended December 31, 1998,
1997, and 1996.
Consolidated Balance Sheets as of December 31, 1998 and 1997.
Consolidated Statements of Cash Flows for the years ended December 31,
1998, 1997, and 1996.
Consolidated Statements of Stockholders' Equity and Comprehensive Income
for the years ended December 31, 1998, 1997 and 1996
Notes to Consolidated Financial Statements.
(2) Financial Statement Schedules:
Financial Statement Schedules for the years ended December 31, 1998,
1997, and 1996.
Filed
Schedule Description Herewith
-------- ------------------------------ ----------
II Valuation and Qualifying Accounts X
Report of Independent Accountants
on years ended December 31, 1998,
1997, and 1996 Financial Statement
Schedule X
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:
None
(c) Exhibits:
See Index to Exhibits immediately following the signature page of
this report, which is incorporated herein by reference.
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors and Stockholders
The Manitowoc Company, Inc.
Our report on the consolidated financial statements of The Manitowoc
Company, Inc. and Subsidiaries has been incorporated by reference in this
Form 10-K from page 43 of the 1998 Annual Report of The Manitowoc Company,
Inc. and Subsidiaries. In connection with our audits of such financial
statements, we have also audited the related consolidated financial
statement schedule listed in Item 14(a)(2) 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.
/s/ PricewaterhouseCoopers LLP
January 26, 1999 -----------------------------------
PRICEWATERHOUSECOOPERS LLP
THE MANITOWOC COMPANY, INC.
AND SUBSIDIARIES
SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997, AND 1998
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND END OF
DESCRIPTION OF YEAR EXPENSES DEDUCTIONS(1) YEAR
---------------------- ------------ ------------ ------------- --------------
YEAR ENDED DECEMBER 31, 1996:
Allowance for doubtful accounts $ 1,365,356 $ 322,837 $ (711,986) $ 976,207
YEAR ENDED DECEMBER 31, 1997:
Allowance for doubtful accounts $ 976,207 $1,479,633 $ (573,985) $ 1,881,855
YEAR ENDED DECEMBER 31, 1998:
Allowance for doubtful accounts $ 1,881,855 $ 481,924 $ (707,839) $ 1,655,940
(1) Deductions represent bad debts written-off, net of recoveries.
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 1, 1999
THE MANITOWOC COMPANY, INC.
By: /s/ Terry D. Growcock
--------------------------------------
Terry D. Growcock
President & Chief Executive Officer
By: /s/ Robert R. Friedl
---------------------------------------
Robert R. Friedl
Senior Vice President and Chief Financial
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/ Terry D. Growcock March 1, 1999
- -------------------------------------------
Terry D. Growcock, President & CEO, Director
/s/ Robert R. Friedl March 1, 1999
- -------------------------------------------
Robert R. Friedl, Senior Vice President & CFO
/s/ Gilbert F. Rankin, Jr. March 1, 1999
- -------------------------------------------
Gilbert F. Rankin, Jr., Director
/s/ George T. McCoy March 1, 1999
- -------------------------------------------
George T. McCoy, Director
/s/ Guido R. Rahr, Jr. March 1, 1999
- -------------------------------------------
Guido R. Rahr, Jr., Director
March 1, 1999
- -------------------------------------------
James P. McCann, Director
March 1, 1999
- -------------------------------------------
Dean H. Anderson, Director
March 1, 1999
- -------------------------------------------
Robert S. Throop, Director
March 1, 1999
- -------------------------------------------
Robert C. Stift, Director
THE MANITOWOC COMPANY, INC.
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1998
INDEX TO EXHIBITS
Filed
Exhibit 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).
2.2 * Purchase and Sale Agreement dated as of October 1,
1997, for the acquisition of SerVend International,
Inc. by The Manitowoc Company, Inc. (filed as Exhibit
2.1 to the Company's Report on Form 8-K, dated as of
October 31, 1997 and incorporated herein by
reference).
2.3 Purchase and Sale Agreement dated as of September 22,
1998, for the acquisition of USTC, Inc. by The
Manitowoc Company, Inc. (filed as Exhibit 2 to the
Company's Report on Form 8-K dated as of September 22,
1998 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 Rights Agreement dated August 5, 1996 between the
Registrant and First Chicago Trust Company of New York
(filed as Exhibit 4 to the Company's current Report on
Form 8-K filed on August 5, 1996 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).
4.5 Credit Agreement dated as of October 31, 1997, 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 October 31, 1997 and
incorporated herein by reference).
4.6 Credit Agreement dated as of April 2, 1998, among The
Manitowoc Company, Inc., as Borrower and Prudential
Insurance Company (filed as Exhibit 4 to the Company's
Report on Form 10-Q, dated as of March 31, 1998 and
incorporated herein by reference).
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 February 18, 1997.
10.2 ** The Manitowoc Company, Inc. Management Incentive
Compensation Plan (Economic Value Added (EVA) Bonus
Plan) effective July 4, 1993, and as amended February
15, 1999. X
10.3 ** Form of Contingent Employment Agreement between the
Company and Messrs. Butler, Flynn, Friedl, Keener,
Musial, Growcock, Shaw, Schad, Tellock 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(a) ** 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).
10.6(b) ** Restatement to clarify Mr. Silva's Supplemental
Retirement Agreement dated March 31, 1997.
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).
11 Statement regarding computation of basic and diluted
earnings per share (see Note 8 to the 1998
Consolidated Financial Statements included herein). X
13 Portions of the 1998 Annual Report to Shareholders of
The Manitowoc Company, Inc. incorporated by reference
into this Report on Form 10-K. X
20 Press release dated February 17, 1999 regarding
declaration of a 3-for-2 stock split. X
21 Subsidiaries of The Manitowoc Company, Inc. X
23.1 Consent of PricewaterhouseCoopers L.L.P., the
Company's 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.