Second-Half Downturn and Gehl Acquisition Affects Manitou Results

Manitou’s 2008 results were negatively affected by the second-half business downturn and its U.S. $311 million acquisition of Gehl Co. Net sales for 2008, including Gehl from Nov. 1, totaled €1.278 billion (about U.S. $1.682 billion), a 1.4-percent year-over-year increase. Gehl’s contribution to sales for the last two months of 2008 was €20 million (about U.S. $26.5 million), partially offsetting the €24 million negative impact in exchange rate fluctuations.

Operating profit before goodwill impairment totaled €97 million (about U.S. $128.6 million), a gross margin of 7.6 percent. For the first half of 2008, Manitou achieved a 10.5-percent margin with €76 million operating profit, in line with 2007 levels. Business conditions and the Gehl acquisition affected the operating margin for the second half.

Manitou’s net profit for 2008 was €4 million (about U.S. $5.3 million) after a €52 million in goodwill impairment related to Gehl. Net profit before goodwill impairment decreased by 35.2 percent to €56 million.

Manitou predicts a decline in consolidated sales in 2009, with a possible 40-percent drop in Gehl’s sales. The company is pursuing discussions with its banking partners in the United States and Europe to secure Gehl’s financing. It is also negotiating with Gehl’s bankers as a result of breaches in banking covenants that could result in Gehl being forced to seek bankruptcy protection.

Manitou has established a strategy plan up to 2011 to enable it to weather the crisis and preserve its capacity to finance its business when the recovery occurs. Manitou said it would improve cash-flow generation and reduce net debt by almost $150 million by the end of 2009.