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, 1997 [_] 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. ------------------------------------------------------- (Exact name of registrant as specified in its charter) Wisconsin 39-0448110 ------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 500 South 16th Street, Manitowoc, Wisconsin 54220 --------------------------------------------------------- (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 31, 1998, of the registrant's Common Stock held by non-affiliates of the registrant was $559,777,782 based on the $33.72 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 31, 1998, the most recent practicable date, was 17,273,618. DOCUMENTS INCORPORATED BY REFERENCE Portions of registrant's Annual Report to Shareholders for the period ended December 31, 1997 (the "1997 Annual Report"), are incorporated by reference into Parts I and II of this report. Portions of the registrant's Proxy Statement for the Annual Meeting of Shareholders dated March 16, 1998 (the "1998 Proxy Statement"), are incorporated by reference in Part III of this report. See Index to Exhibits. PART I ----------- Item 1. Business -------- GENERAL - -------- 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 and refrigeration products for the foodservice, lodging, convenience store and healthcare markets; (b) the design and manufacture of cranes and related products which are used by the energy, construction, mining and other industries; and (c) marine vessel repair. 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 a boom truck crane operation in Georgetown, Texas. 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", "Summary of Significant Accounting Policies -- Research and Development" and Note 15 to Consolidated Financial Statements on pages 20-23, 24-25, 30, and 36, respectively, of the 1997 Annual Report, which are incorporated herein by reference. PRODUCTS AND SERVICES - --------------------- Foodservice - --------------- 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, as well as reach-in and walk-in refrigerators and freezers. 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 of 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. Manitowoc Ice, Inc. was certified in 1995 as meeting ISO-9001 quality standards - the highest international rating for quality management systems. 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. ("Shannon"). Shannon is a manufacturer of commercial refrigerators, freezers and related products, ranging from small under-counter units to 300,000 square foot refrigerated warehouses. Among its wide range of products, Shannon is best known for its foamed-in-place walk-in refrigeration units, wood rail walk-in units, refrigerated food-prep tables, reach-in refrigerator/freezers and modular refrigeration systems. Shannon supplies walk-in refrigerator/freezers to many of the leading restaurant and grocery chains in the United States. For additional information on the acquisitions, see Note 10 to Consolidated Financial Statements on page 34 of the 1997 Annual Report, which is incorporated herein by reference. In December 1997, the Company sold Tonka, its wood-rail walk-in refrigerator/freezers manufacturer in Greeneville, TN. 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 Carribbean, 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, 1997 and 1996 were not significant. Cranes and Related Products - --------------------------- The Company designs and manufactures a diversified line of crawler, truck, fixed-base mounted, and hydraulically-powered cranes, which are sold under the "Manitowoc", "Manitex", and "West- Manitowoc, Inc." names for use by the energy, construction, mining, pulp and paper, and other industries. 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, as well as being more productive in a number of applications. Six models, along with various attachments, have been introduced to-date with lifting capacities ranging from 65 to 1,500 U.S. tons. 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 fiscal 1994, the Company launched a completely new business unit - West-Manitowoc. Its primary target is the smaller, independent contractors and rental-fleet customers who need smaller, less complicated, easily transportable, and more versatile cranes that meet the needs of a broad range of users. To serve this growing market, 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 will further broaden 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. In February 1994, the Company acquired the assets of Femco Machine Co. Femco Machine Co. 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 announced the sale of 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. In fiscal 1993, the Company sold two previously owned sales subsidiaries located in Davie, Florida and Charlotte, North Carolina. 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 15 to Consolidated Financial Statements on page 36 of the 1997 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, 1997 approximates $149.1 million, as compared with $136.0 million a year earlier. The increase is primarily due to the continued positive customer acceptance of the Company's Model-888 and Model-777 cranes. Marine - --------- 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 cargo systems. To reduce seasonality, the Marine Group has begun to perform non-marine industrial repair during the summer months. 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, 1997 the backlog approximates $7.9 million, compared to $5.9 million one year ago. Raw Materials and Supplies - --------------------------- 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 - ----------------------------- 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. Seasonality - -------------- 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 are building inventories 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 prior to such 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 - ------------ 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; Hobart, Inc., Troy, Ohio; Elliot-Williams Co., Inc., Indianapolis, Indiana; Hussman Corporation, Bridgeton, Missouri; ThermoKool, Laurel, Mississippi; Masterbilt, New Albany, Mississippi; W. A. Brown, Salisbury, Nebraska; 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; Lancer, San Antonio, Texas; and Booth/Crystal Tips, Dallas, 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 American Crane Corporation, Wilmington, North Carolina; 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; and Hitachi Construction Machinery Co., Ltd., Tokyo, Japan. Within the market the Company serves, lattice boom crawler cranes with lifting capacities greater than 125 tons, Manitowoc is a world leader of this equipment. The competitors within the boom truck crane market include Simon-R.O. Corp., Olathe, Kansas; National Crane, Waverly, Nebraska; and JLG, McConnellsburg, 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 three operational shipyards on the Great Lakes capable of drydocking and servicing 1000 foot Great Lakes bulk carriers; the others are Erie Marine Enterprises, Erie, Pennsylvania, and Port Weller Dry Docks, St. Catherines, Ontario, Canada. 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. Employee Relations - ------------------- The Company employs approximately 3,000 persons, of whom about 590 are salaried. The number of employees is consistent with the prior year. The Company has labor agreements with 20 union locals. There have been no work stoppages during the three years ended December 31, 1997. Item 2. PROPERTIES ----------- Owned - --------- 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 1996, the Company closed the Mason City facility and consolidated the manufacturing with the previously leased facility in Greeneville, Tennessee. The Mason City plant is 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; 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 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 three 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 boomtruck 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. 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 - --------- 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. Item 3. LEGAL PROCEEDINGS ------------------ The information required by this item is incorporated by reference from Note 12 to Consolidated Financial Statements on Page 35 of the 1997 Annual Report. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ----------------------------------------------------- No matters were submitted to security holders for a vote during the fourth quarter of the Company's fiscal year ended December 31, 1997. Executive Officers of the Registrant - ------------------------------------- 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, 1998. <TABLE> <CAPTION> Principal Position With Position Name Age The Registrant Held Since --------- ----- -------------- ----------- <S> <C> <C> <C> Fred M. Butler 62 President & CEO 1990 Robert R. Friedl 43 Senior Vice President & CFO 1996 Thomas G. Musial 46 Vice President- Human Resources 1995 Philip L. FitzGerald 51 Vice President- International Business Development 1997 Philip D. Keener 46 Treasurer 1990 E. Dean Flynn 56 Secretary 1993 </TABLE> Fred M. Butler, 62, president and chief executive officer of The Manitowoc Company, Inc. since 1990. Previously senior vice-president and chief operating officer (1989); and manager of administration (1988). Prior to joining Manitowoc, Mr. Butler served Guy F. Atkinson Co., and its subsidiaries, for 29 years in numerous managerial and executive positions. Robert R. Friedl, 43, 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, 46, vice president human resources since 1995. Previously, manager of human resources (1987) and personnel/industrial relations specialist (1976). Phil FitzGerald, 51, vice president international business development since 1997. Previously, general manager of The Shannon Group (1996). Prior to joining Manitowoc, Mr. FitzGerald served as president of Bridgestone/Firestone Manufacturing Co.; vice president of manufacturing of Bridgestone U.S.A.; and international operations manager for Fort Howard Corporation. Philip D. Keener, 46, treasurer since 1990. Prior to joining Manitowoc, Mr. Keener served as assistant treasurer of Farley Industries, Inc., and in various financial capacities at Northwest Industries, Inc. E. Dean Flynn, 56, 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 24-25, 38, and back cover, respectively, of the 1997 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 24-25 of the 1997 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 20-23 of the 1997 Annual Report. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA --------------------------------------------- The financial statements required by this item are incorporated by reference from pages 26-29 of the 1997 Annual Report. Supplementary financial information is incorporated by reference from "Supplemental Quarterly Financial Information (Unaudited)" on page 38 of the 1997 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 "Section 16(a) Beneficial Ownership Reporting Compliance" on page 4 of the 1998 Proxy Statement and from "Election of Directors" on pages 4-5 of the 1998 Proxy Statement. 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 "Compensation of Directors", "Executive Compensation", "Contingent Employment Agreements", and "F. M. Butler Supplemental Retirement Agreement" on pages 6 and 14 of the 1998 Proxy Statement. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ------------------------------------------------ The information required by this item is incorporated by reference from "Ownership of Securities" on pages 2-3 of the 1998 Proxy Statement. 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, 1997, 1996, and 1995 Financial Statements. Consolidated Statements of Earnings for the years ended December 31, 1997, 1996, and 1995. Consolidated Balance Sheets as of December 31, 1997 and 1996. Consolidated Statements of Cash Flows for the years ended December 31, 1997, 1996, and 1995. Consolidated Statements of Stockholders' Equity for the years ended December 31, 1997, 1996, and 1995. Summary of Significant Accounting Policies. Notes to Consolidated Financial Statements. (2) Financial Statement Schedules: Financial Statement Schedules for the years ended December 31, 1997, 1996, and 1995. Schedule Description Filed Herewith ----------- ------------ -------------- II Valuation and Qualifying Accounts X Report of Independent Public Accountants on years ended December 31, 1997, December 31, 1996, and December 31, 1995 Financial Statement Schedules 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: During the fourth quarter of calendar 1997, a report on Form 8-K dated as of October 31, 1997 was filed indicating that the Company completed the purchase of the assets of SerVend International, Inc. After the fourth quarter end, Amendment No. 1 to the Form 8-K dated as of October 31, 1997 was filed to provide the following historical financial statements of SerVend International, Inc. as well as the following pro forma statements of the Company reflecting the acquisition of SerVend International, Inc. pursuant to paragraph (a)(4) of Item 7 of Form 8-K: 1. Audited consolidated financial statements of SerVend International, Inc. and Affiliate: Report of Independent Accountants Consolidated Balance Sheet as of October 31, 1997 Consolidated Statements of Income and Retained Earnings for the Period January 1, 1997 through October 31, 1997 Consolidated Statement of Cash Flows for the Period January 1, 1997 through October 31, 1997 Notes to Consolidated Financial Statements 2. Unaudited pro forma consolidated condensed financial statements of The Manitowoc Company, Inc.: Introduction Pro Forma Consolidated Condensed Statement of Operations for the Year Ended December 31, 1996 Pro Forma Consolidated Condensed Balance Sheet as of September 30, 1997 Pro Forma Consolidated Condensed Statement of Operations for the Nine Months Ended September 30, 1997 (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 37 of the 1997 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. Milwaukee, Wisconsin /s/ Coopers & Lybrand L.L.P. January 26, 1998 -------------------------- COOPERS & LYBRAND L.L.P. <TABLE> <CAPTION> THE MANITOWOC COMPANY, INC. AND SUBSIDIARIES SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1995, 1996, AND 1997 BALANCE AT CHARGED TO BALANCE AT BEGINNING COSTS AND END OF DESCRIPTION OF YEAR EXPENSES DEDUCTIONS (1) YEAR ------------ --------- -------- ------------ ----------- <S> <C> <C> <C> <C> YEAR ENDED DECEMBER 31, 1995: Allowance for doubtful accounts $1,196,317 $ 283,843 $ (114,804) $1,365,356 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 <FN> (1) Deductions represent bad debts written-off, net of recoveries. </FN> </TABLE> 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: February 20, 1998 THE MANITOWOC COMPANY, INC. By: /s/ Fred M. Butler --------------------------------- Fred M. Butler 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/ Fred M. Butler February 20, 1998 - ----------------------------------------- Fred M. Butler, President & CEO, Director /s/ Robert R. Friedl February 20, 1998 - ----------------------------------------- Robert R. Friedl, Senior Vice President & CFO /s/ Gilbert F. Rankin, Jr. February 20, 1998 - ----------------------------------------- Gilbert F. Rankin, Jr., Director /s/ George T. McCoy February 20, 1998 - ----------------------------------------- George T. McCoy, Director /s/ Guido R. Rahr, Jr. February 20, 1998 - ----------------------------------------- Guido R. Rahr, Jr., Director February 20, 1998 - ----------------------------------------- James P. McCann, Director February 20, 1998 - ----------------------------------------- Dean H. Anderson, Director February 20, 1998 - ----------------------------------------- Robert S. Throop, Director <TABLE> <CAPTION> THE MANITOWOC COMPANY, INC. ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997 INDEX TO EXHIBITS Filed Exhibit No. Description Herewith - ---------- ----------- -------- <S> <C> <C> 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). 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). 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 18, 1997. 10.3 ** Form of Contingent Employment Agreement between the Company and Messrs. Butler, Flynn, Friedl, Keener, Musial, Bust, Growcock, Shaw, and FitzGerald, 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 7 to the 1997 Consolidated Financial Statements included herein). X 13 Portions of the 1997 Annual Report to Shareholders of The Manitowoc Company, Inc. incorporated by reference into this Report on Form 10-K. X 21 Subsidiaries of The Manitowoc Company, Inc. X 23.1 Consent of Coopers & Lybrand L.L.P., the Company's Independent Public Accountants. X 27 Financial Data Schedule. X <FN> * 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. </FN> </TABLE>