Glen Tellock has resigned as Manitowoc’s chairman, president and CEO and will step down from the board of directors, Manitowoc announced, in the wake of a decline in third quarter earnings. Tellock has been with Manitowoc for 24 years.
Third quarter sales were $863.5 million, a 12.5-percent decrease compared with $986.3 million in the third quarter of 2014. The company said about 40 percent of the decline was because of unfavorable foreign currency impacts.
Manitowoc reported net income of $4.8 million in the third quarter compared with $73.1 million in the third quarter of 2014.
Manitowoc announced the appointment of Kenneth Krueger to interim chairman, president and CEO effective immediately.
“While our third quarter results for Foodservice showed solid improvement driven by our corrective actions, Cranes fell short of expectations,” Krueger said. “Consistent with the worsening global demand environment impacting the industrial sector as a whole, our shortfall during the third quarter was largely the result of weakness in tower crane demand in Asia and the Middle East, coupled with broad-cased softness in all-terrain cranes. In addition, we experienced significant delays in crawler crane shipments due to extended reliability testing and operational issues.”
Third quarter 2015 net sales in Cranes dropped 23 percent to $438.2 million, compared to $569.2 million in the third quarter of 2014. The decline was broad-based, particularly in the Middle East and Asia, which fell well short of the company’s expectations. Slower than anticipated deliveries of VPC crawler cranes exacerbated the weakness.
“Continued global economic uncertainly, coupled with the devaluation of the Chinese yuan that negatively affected the rest of the Asian markets, weighed on end-market demand in the third quarter,” Krueger said. “As we look to the remainder of 2015 and into 2016, we will focus on those aspects of the business we can control, which include executing on our operational efficiency initiatives and optimizing our cost structure, without sacrificing the innovation and quality for which Manitowoc is known.”
Krueger noted that the current cycle is different than any other in recent memory, particularly in regard to customer order patterns. “We are taking a number of aggressive actions in Cranes to offset this decline in demand, including right-sizing the business, plant rationalizations, headcount reductions, and other cost-optimization initiatives.”
Manitowoc remains on track to separate its Cranes and Foodservice businesses, which is still expected to occur during the first quarter of 2016.