Manitowoc chairman, president and CEO resigns
Chief steps down in the wake of dismal Q3 results; Cranes division pledges ‘aggressive’ restructuring
Glen Tellock has resigned as Manitowoc’s chairman, president and CEO, and will also be stepping down from the board of directors as he looks to pursue other opportunities.
Tellock’s resignation came just after the company reported Q3 2015 sales (across both its cranes and other interests) of $863.5m – a 12.5% decrease from $986.3m in Q3 2014. The company said roughly 40% of the decline was due to pricing pressure exacerbated by the strength of the US dollar.
Board member Kenneth Krueger has been appointed interim chairman, president and CEO, and the board of directors has initiated a search for a CEO for Manitowoc Cranes.
Kruger commented: “Our shortfall during Q3 was largely the result of weakness in tower crane demand in Asia and the Middle East, coupled with broad-based softness in all-terrain cranes.
“In addition, we experienced significant delays in crawler crane shipments due to extended reliability testing and operational issues.”
Q3 2015 net sales in cranes were down by 23%m, lowering to $438.2m compared with $569.2m in Q3 2014. Slower than anticipated deliveries of VPC crawler cranes exacerbated the weakness.
The operating earnings from cranes in Q3 2015 were $4.3m – down from $41.6m in the same period last year. This resulted in an operating margin of 1.0% in Q3 2015 compared with 7.3% in Q3 2014.
Crane backlog totalled $631m as of September 30, also down from the Q3 2014 backlog of $716m, while Q3 2015 orders decreased to $337m from $557m in Q3 2014.
Manitowoc Cranes will now be taking aggressive actions to offset the decline in demand, including right-sizing the business, plant rationalisations, headcount reductions, and other cost optimisation.
Krueger added: “As we look to the remainder of 2015 and into 2016, we will focus on those aspects of the business we can control, without sacrificing the innovation and quality for which Manitowoc is known.
“These actions will likely result in an approximate $10m to $15m restructuring charge in Q4, and savings of approximately $135m to $145m over the next three years.
However, based on the Q3 results, Manitowoc has estimated that final 2015 revenues will be down 15% to 20% compared to 2014, with operating margins for 2015 in the low single-digits.
Krueger has been a member of the company’s Board of Directors since 2004, and most recently served as COO at mining equipment manufacturing Bucyrus International, before retiring in 2009.