With two polar-opposite businesses to handle, things can't be very easy for Manitowoc (NYSE: MTW). Although the company has managed to beat Street estimates in the past few quarters, there are some areas where it might be losing out.

Two factors in particular seem to be big concerns and could hinder Manitowoc's future growth.

Need to look East
One drawback for Manitowoc is Europe, which is one of its biggest markets. It alone accounts for nearly 22% of the company's total sales. Clearly, with Europe struggling, low demand from the region could plague Manitowoc for a long time. What makes things tougher is its overdependence on developed markets.

Sales from North America and Europe accounted for more than 70% of Manitowoc's total sales last year. Compare this with Caterpillar (NYSE: CAT), which derives 40% of its revenues from developing countries in Latin America and Asia/Pacific. To unlock the real potential of the construction business, Manitowoc needs to work hard to increase its presence in Asia, which is emerging as a hot spot for construction activity. The region contributes only 10% to the company's sales. While Caterpillar is charging ahead with new facilities and tie-ups in emerging economies such as China, Manitowoc hasn't been as aggressive in these markets. One critical reason seems to be its financial position.

Need to buck up
Heavy debt, low cash balances, and net losses sum it up. Manitowoc's total debt-to-equity ratio is at a whopping 401.2% and its interest coverage is a mere 1.4 times. For a total debt of $1.89 billion, Manitowoc's cash and equivalents is just $68.6 million, while unlevered free cash flow is at $211 million. Its operating (earnings before interest and tax) margin has been languishing at about 6%.

Because of such high leverage, there is little scope for Manitowoc to go ahead with expansion programs or return value to its shareholders. It sports a return on equity of just 4.4% and a meager 0.5% dividend yield.

The Foolish bottom line
Although Manitowoc has mentioned debt reduction and growth initiatives as its priorities for this year, we'll have to see how effectively it balances these things. Competition is tight, but opportunities are plenty. Manitowoc needs to pull up its socks to become an all-around package.

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