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July 28, 2005

Manitowoc marine segment disappoints

The Manitowoc Company (NYSE: MTW) yesterday reported record net sales and earnings for the second quarter ended June 30, 2005. Net sales increased 17 percent to $616.8 million, from $526.2 million during the second quarter of 2004. But the results from the company's marine activities were called "disappointing" by Chairman and CEO Terry D. Growcock.

Net sales at the marine segment for the second quarter of 2005 were $63.4 million, essentially unchanged from $63.5 million during the second quarter of 2004. The marine segment generated an operating loss of $2.7 million during the second quarter of 2005, compared with operating earnings of $2.7 million during the second quarter of 2004.

"The disappointing results from the marine segment were directly related to three specific projects," said Growcock. "Two of these projects have left our shipyards, and the third is scheduled for departure next week. Although poor results for the quarter were anticipated, the size of the loss was exacerbated by process inefficiencies incurred in order to meet a delivery schedule and by rework required on all three projects. Going forward, the scheduling and composition of the marine backlog will enable Manitowoc to put the right projects in the right yards." Growcock explained.

"The marine management team has identified and is correcting the processes that negatively affected profitability during the first half of 2005," said Growcock. "Marine's future is considerably brighter with our strong position in the Littoral Combat Ship program for the Navy and the substantial market for new and converted OPA 90-compliant vessels."

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