Manitowoc softens with earnings; Cinram steadies after seesawing around; Dole sees interest

By Sara Rosenberg

New York, Feb. 3 - Manitowoc Co. Inc.'s term loan B was a little lower during Wednesday's trading session after the company announced quarterly results that fell short of expectations, and Cinram International Income Fund's term loan D was flat to better after a somewhat volatile start to the week.

Switching over to the primary market, market chatter is that Dole Food Co. Inc.'s credit facility is already being met with demand after just launching to lenders a day ago.

Manitowoc dips with numbers

Manitowoc's term loan B lost some ground in trading following the release of earnings results that showed a loss for the fourth quarter instead of the profit that people were expecting, according to a trader.

The term loan B was quoted at 99½ bid, par ¼ offered, down from 99¾ bid, par ½ offered on Tuesday, the trader said.

For the fourth quarter of 2009, Manitowoc reported a loss of $23.5 million, or $0.18 per diluted share, versus a net loss of $200.4 million, or $1.54 per share, in the previous year.

Excluding special items, adjusted earnings from continuing operations for the quarter was a loss of $9.3 million, or $0.07 per share, compared to adjusted earnings of $59.4 million, or $0.46 per share, in the fourth quarter of 2008.

Sales for the quarter were $838.7 million, down 31.1% from $1.2166 billion in the prior year. The sales decrease was due primarily to a 49.1% decline in the Crane segment, partially offset by a 31.3% increase in the Foodservice segment.

And, the company's trailing 12-month adjusted EBITDA as of Dec. 31 was $383.2 million.

Manitowoc reduces debt

Also on Wednesday, Manitowoc said that its total debt declined by more than $220 million during the fourth quarter and by about $475 million for the full year 2009.

"Our cash flow from operations was $159.5 million during the fourth quarter, enabling total debt reduction of approximately $475 million for the full year, exceeding our $450 million target," said Glen E. Tellock, chairman and chief executive officer, in a news release.

"Although we continue to be faced with a challenging business environment, we are encouraged by recently improving metrics and trends for 2010. We clearly exceeded our adjusted targets for cash flow and debt reduction, foodservice margin targets were achieved, and crane segment revenue was maintained at third-quarter levels. We also expect that 2010 will see increasing benefits from the operational efficiencies, process improvements, cost reductions, and synergies that we implemented in 2009," Tellock added.

Manitowoc amendment approved

In addition, Manitowoc revealed that on Jan. 22, it completed the amendment to its credit facility, revising certain financial covenants to increase flexibility.

However, as was previously reported, this amendment is conditioned on the issuance of a minimum of $300 million of senior unsecured notes and the use of all the net proceeds to repay term loan debt.

The company has commenced an offering to issue $400 million of senior unsecured notes and expects to complete the offering in the near term.

Manitowoc is a Manitowoc, Wis.-based manufacturer and seller of cranes and related products and foodservice equipment.

Cinram volatility ends

Cinram's term loan D was unchanged to higher on Wednesday, brining its two days of bouncing around to a close, according to traders.

The term loan D was quoted by one trader at 75 bid, 77 offered, flat on the day, and by a second trader at 76½ bid, 77½ offered, up from 76 bid, 76½ offered.

On Monday, the loan had plummeted all the way to the 67 bid, 72 offered context from the 86½ bid, 88½ offered area after the company revealed that service agreements with Warner Home Video Inc. will terminate on July 31.

Then, on Tuesday, after investors had some time to digest the news, the term loan B recouped a chunk of its losses, moving into the mid-70s area.

Cinram is a Toronto-based provider of pre-recorded multimedia products and related logistics services.

Dole nets attention

Over on the new deal front, talk is that Dole Food's $850 million seven-year term loan (BB-) is being received well by the market since launching with a bank meeting this past Tuesday, a market source told Prospect News.

The term loan is being talked at Libor plus 325 basis points to 350 bps with a 1.75% Libor floor and an original issue discount of 99.

Dole Food's $1.2 billion credit facility also includes a $350 million four-year ABL revolver tjat is talked at Libor plus 400 bps with no Libor floor.

Deutsche Bank, Bank of America and Wells Fargo are the lead banks on the deal that will be used to refinance existing term loan and ABL revolver debt and the remaining $70 million of senior notes that mature in 2011.

The refinancing is expected to reduce the company's interest expense and extend maturities - putting Dole's nearest debt maturity in 2013.

Dole is a Westlake Village, Calif.-based fruit and vegetables company.

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