Manitowo (MTW)

Q2 2010 Earnings Call

July 28, 2010 10:00 am ET

Executives

Mike Kachmer - Senior Vice President and President of Manitowoc Foodservice Group

Eric Etchart - Senior Vice President and President of Manitowoc Crane Group

Carl Laurino - Chief Financial Officer and Senior Vice President

Steven Khail - Director of Investor Relations & Corporate Communications

Glen Tellock - Chairman, Chief Executive Officer and President

Analysts

Ann Duignan - JP Morgan Chase & Co

Henry Kirn - UBS Investment Bank

Nicole Deblase - Deutsche Bank

Seth Weber - RBC Capital Markets Corporation

Charles Brady - BMO Capital Markets U.S.

Robert Wertheimer - Morgan Stanley

Robert McCarthy - Robert W. Baird & Co. Incorporated

Meredith Taylor - Barclays Capital

Ben Elias - Sterne Agee & Leach Inc.

David Wells - Avondale Partners

Joel Tiss - Lehman Brothers

Presentation

Operator

Good day, everyone, and welcome to the Manitowoc Co. Inc. Second Quarter Earnings Conference Call. [Operator Instructions] At this time, for opening remarks and introductions, I would like to turn the call over to Mr. Khail. Please go ahead, sir.

Steven Khail

Good morning, everyone, and thank you for joining Manitowoc's Second Quarter Earnings Conference Call. Participating in today's call will be Glen Tellock, our Chairman and Chief Executive Officer; Carl Laurino, Senior Vice President and Chief Financial Officer; and Mike Kachmer, President of Manitowoc Foodservice.

Glen will open today's call by providing an overview of our quarterly results and business outlook. Carl will then discuss our financial results for the second quarter in greater detail. Mike Kachmer is our guest speaker this quarter, and he will offer insights into the market conditions for our Foodservice segment and we'll also discuss the 2010 National Restaurant Show. Following our prepared remarks, we will be joined Eric Etchart, President of Manitowoc Cranes, who will participate in our usual question-and-answer session.

For anyone who is not able to listen to today's entire call, an archived version of this call will be available later this morning. Please visit the Investor Relations section of our corporate website at www.manitowoc.com to access the replay. Before Glen begins his commentary, I would like to review our Safe Harbor statement.

This call is taking place on July 28, 2010. During the course of today's call, forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, will be made during each speaker's remarks and during our question-and-answer session. Such statements are based on the company's current assessment of its markets and other factors that affect its business. However, actual results could differ materially from any implied projections due to one or more of the factors explained in Manitowoc's filings with the Securities and Exchange Commission, which are also available on our website.

The company does not undertake any obligation to publicly update, or revise any forward-looking statements, whether as a result of new information, future events or other circumstances.

With that, I'll now turn the call over to Glen.

Glen Tellock

Thanks, Steve, and good morning, everyone. Yesterday, we reported second quarter results that were consistent with our expectations, in spite of the many external challenges resulting from the prolonged weakness in the global economy.

The operating environment during the second quarter was largely a continuation of prior quarters, with signs of further stabilization in more mature markets complemented by a sustained demand in emerging geographies. While these improvements are encouraging, given the market volatility of the past several months, we are mindful of the uncertainties and remain focused on those factors that are within our control.

During the second quarter, we made further progress against our three near-term strategic priorities, and we believe our fundamental to protecting and enhancing our leadership position in both of our businesses. First, we made great strides toward our goal of smoothly integrating our Foodservice businesses. As we move forward with this market-leading business, our dedicated focus on innovative technologies and new products has created organic growth opportunities with new and existing customers globally.

We also continue to leverage various economies of scale, which include operational cost reduction, lean initiatives, as well as procurement savings. Secondly, even with the significant challenges that the economic environment continues to post for our Crane segment, we continue to invest in operational efficiency improvements and lean manufacturing principles.

In addition, we remain focused on emerging market opportunities, building on our previous investments in China, India, Middle East and Latin America. Our success in achieving these initiatives is illustrated by the improvement we reported in the second quarter operating margins for this segment.

We are confident that the hard work we've put in over the last several quarters will pay dividends as the economy improves and this segment returns to growth. And finally, prudently managing our cash position and optimizing cash generation, remain essential as we reduce leverage, improve our overall financial health and position the company for long-term growth and success. We will continue to make this a priority for the balance of the year.

As we look at our segment performance for the second quarter, Foodservice posted strong performance once again, and we continue to extend our global leadership position in this business. We have a very positive outlook for Foodservice and are encouraged by the top and bottom line benefits that continue to emerge from the Enodis acquisition and our ongoing integration work.

Our sustained focus on innovation and the breadth of our product offerings are not only key advantages but they're also points of differentiation that make us a vital partner in our customer success. The combination of our product offering, existing relationships and the global footprint has afforded us significant opportunities for further growth in international markets.

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