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MTW Manitowoc

Participants
Ion Warner The Manitowoc Co., Inc.
Barry L. Pennypacker The Manitowoc Co., Inc.
David J. Antoniuk The Manitowoc Co., Inc.
Mircea Dobre Robert W. Baird & Co., Inc.
Brendan Shea RBC Capital Markets LLC
Jamie L. Cook Credit Suisse Securities (NYSE:USA) LLC
Thomas Simonitsch JPMorgan Securities LLC
Michael David Shlisky Seaport Global Securities LLC
Charles Brady SunTrust Robinson Humphrey, Inc.
Ben Burud Goldman Sachs & Co. LLC
Rob Wertheimer Melius Research LLC
Nicole DeBlase Deutsche Bank Securities, Inc.
Stanley Stoker Elliott Stifel, Nicolaus & Co., Inc.
Lawrence De Maria William Blair & Co. LLC
Call transcript
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Operator

Good day, everyone, and welcome to this Manitowoc Company Third Quarter 2017 Earnings Call. Today's call is being recorded. And at this time, for opening remarks and introductions, I would like to turn the call over to Ion Warner, Vice President, Marketing and Investor Relations. Please go ahead.

Ion Warner

Thank you, Greg. everyone. morning, Good The third to evening's call review to And XXXX Manitowoc performance company's quarter last as the welcome conference outlined release. in

website. manufacturing section Chief will which in holding our and and slide David are call presentation, Vice facility. can of Today's Officer, Germany Conducting the President webcast Senior and a We Chief Executive found the Officer. Investor Barry be today's call our Antoniuk, Pennypacker, Financial Relations President be Wilhelmshaven, from includes

reference throughout slides will We prepared remarks. these the

sure will questions. after ensure to to return We turn Please limit request time our and remarks. to X. queue their questions be reserve that everyone to slide for has I one your to follow-up the questions-and-answers and an a would opportunity like to ask you to

note material Before statement Safe our this for we call. Harbor begin, provided in please the

as and forward-looking of company's the During markets its XXXX statements that made Securities Act current based are today's defined on the affect its other Litigation of Reform business. in call, factors assessment Private

materially Securities Manitowoc could undertake its factors to that, the any call with due the or actual of most one Commission. please results whether Exchange or with you, turn refer new and projections obligation to implied slide will other not revise of to result now from in filing the And publicly Annual to statement, as Barry. information, XX-K or any a Report update any forward-looking more Form Manitowoc's recent circumstances. Company future I over on does events and The explained However, differ X,

Barry L. Pennypacker

made per with flow limited by adjusted operations our $X.XX we to pleased third EBITDA and was our was quarter, backlog XX% effectively very operating with possible million, of along I'm The that improved everyone. the third compared welcome, the see and adjusted Way. our year-over-year on which business base. of which earnings But of diluted were during Ion, ABL, off quarter delivered share borrowing this XXXX. from $XXX orders cash a day, Thanks, of utilizing principles keep third Manitowoc very quarter and the encouraged increased each every low mind, this We to to in report

by Our in key order from Middle orders uncertainty had To of such India note, in partially quarter markets international East regulations. offset were by an the softness $XX as to and the the continued U.S., cancellation improvements Asia-Pac. driven due surrounding new we in million

However, our once customers committed uncertainty the remain is cranes particular purchasing resolved. to these regulatory

managing cranes sale manage number flow. already the the a fourth been in produced, team have quarter cranes of of to these is However, these and effectively prudently our cash our

Looking (X:XX) at a were commercial two end a in more demand tales. driven the emerging On of the markets. energy little U.S. story by construction momentum it's detail, to support positive, orders and in

projects. continue to hand, infrastructure large other On low we the activity see for

While rental be to overall showed under improving. rates utilization continue pressure, signs of

Although current with they're apply working abilities is in down closely are to upon work with deliver we a strike believe with positioned and product America, of continue in North adequately we to based factories, for growth, to keep dealer Please very capital availability together velocity equipment that management. dramatically. we purchase our as the orders, our stocking as them of inventories balance to future levels healthier open that also improving increased Manitowoc Way mind The principles the

construction journey. design means in this competitive with I realizing to is come evident product a in has the at facility, program. German been forward continues terrain our Demand markets. Manitowoc where and very here meet we important manufacture great in continue mistake, productivity Europe line. than look our as our which more and Make has Nowhere at facility, dubbed outset the fully potential expectations, commercial no flow, The it we results Fluss, project growth the in to all market are is project The hard This market. overall earned. in this expected completion showing in Europe and benefits of as these resi this Wilhelmshaven we growth Way

aware, time spent portfolio have a a our As of you market product substantial we and are in effort of leaded amount offering. one to evolving product

We creative have offer do, in features the the ways, deals seen benefits where including shortfall have up some competition aggressive to their very and make we same for pricing. doesn't as

key a in number markets, being continue see one to We other the with international of weak Australia. demand our exception

a in South walk East the financial And In quarter's slowdown turn challenge and Middle example, that, to need we've with for us through construction and seen marked the over results. to reasons. work. I'll commercial external the Korea, cranes For remains David the a internal call for both project

David J. Antoniuk

Thanks and good Barry, morning everyone.

slide move to X. Let's

Our third with was full in quarter performance expectations, our our consistent with line financial guidance. year and XXXX

XXXX. million, increase of million third totaled of to orders an $XXX.X of quarter the Third quarter XX% orders in compared $XXX.X

new orders by foreign and was favorably our demand X% in rates. continued approximately changes driven products by to Our was exchange due year-over-year for increase impacted currency also

XXXX increase higher third $XX.X up shipments the crane primarily year. The sales million of million was was impacted increased of ago. the impacted $XX.X by favorably lower million, by favorably our foreign than also in coming year were period. approximately shipments was changes by XX% million were The $X in customers. was prior also to to lower X%, approximately revenue increase comparable in rates. million, exchange $XXX.X or Net SG&A prior sales $XX.X year, the U.S. in substantially rates. a in customers, backlog partially third to in currency by XX% from Backlog the also quarter million Third foreign currency net exchange due $XXX.X from which the year-over-year over Asia-Pacific driven quarter changes stronger quarter offset than costs

is million reduction primarily SG&A year-over-year of fees, cost negatively and from the were the by exchange used related balance costs of rates. compensation incentive currency market charges million Third in fair by lower $X in partly employee-related foreign approximately impacted costs, and consulting to offset cost changes due in $X professional higher quarter and to The oversight, decline XXXX reductions approximately of the value cranes. discretionary

we quarter, incurred Manitowoc, third with U.S. and in restructuring the severance in of cost primarily were expenses, which and reductions our related to closure the head manufacturing Fundo, Brazil. the million operations count Passo associated Wisconsin During of $X.X

Our compared non-GAAP adjusted EBITDA of for third the was to third million loss the $XX.X a of quarter in XXXX. million, $XX.X quarter

charges $XX was and quarter million, values, the XXXX non-GAAP losses these adjusted As third year-over-year. noted points higher used inventory last $XX items, and included year, initiatives. reserves, EBITDA basis non-GAAP we non-cash from to Removing of declines third crane XXX quarter million in improvement approximately related product approximately adjusted EBITDA XXXX

Our for quarter, net per $XX.X income million diluted third or continuing share. for $X.XX continuing operations operations income or $X.X million, from per net was share. quarter from the was diluted the Adjusted third $X.XX

$XX.X per For Internal benefit with diluted to due share, or years. Service the third Revenue the $X.XX discrete the primarily a related quarter, of million, tax we recorded resolution prior to

ample liquidity Cash in seasonal in the We increased of continued were at total $XXX.X the XX, September outstanding provided ABL XXXX, Total and a liquidity in million at maintain total from September by as availability the $XX.X activities was borrowings $XX capital quarter is operating our in cycle. credit. $XX.X At letters to September on to driven working in XX the XX million, million and hand Cash cash operating $X.X million XXXX. under of quarter third demand $XX.X million use of compared through resulting was in third quarter management. of million. million of flows earnings $XXX of improved net

percent of a as capital working September XXXX, in XX.X% from sales September of As to XX.X% improved XXXX.

which Barry? on inventory, in by great Our Please $XX foreign guidance. we exchange further our managing With back for increasing have for team where XXXX I quarter some X, did Barry million $XX basis. as turn third a by that, adjusted now year slide million revenue a rates, year-over-year, turn reaffirmed declined to job the to while year-over-year will currency changes remarks. call full

Barry L. Pennypacker

Thanks, David.

into I to Before I remarks. move like our to full We've David's confirmed would guidance. X, year some add slide comments

percentage Indian quarter see fourth sales margins However, saw year, was during of quarter. we you, third slated let normally had of cancellations the for that in that I also remind we me million we gross as like add lower shipment. a the $XX last would

working mentioned these balance aggressively of management number to our sheet. remains one team is manage our finished Accordingly, priority. earlier, goods off cash the As

continuous Now little a day. moving journey that on requires every to of commitment slide each improvement do the employee and and a dedication from X. The Way Manitowoc and is try bit to every better

top-slewing us home better as return our demand return approach per project flexibility. to evolve for and factories will crawler we this allow expansion, budget. to of of is After consolidating processes. incremental initial the In I expansion will has now ahead the Starting our of margin We it to a This overall to manufacturing our This believe our on continue simply more project. approach our to Rest effectively of capable in Shady all case longer demand large into that best of two margin expand We allow all support will in This the frankly of the assured, and cranes in has the long our strategy term. short in our us velocity. manufacturing change We expansion, term, well encompassing productivity project and crawlers, this scope our European Portugal, strategy, basis visit our bigger term Initially, Grove technology of manufacturing overall a will as to will the facilities, see positioning targets a await with tower our four better one. growth, priorities, anxiously customer producing plan, of better meet to much year. grow. large and market. business evolved innovation by XXX continued opportunity while investment manufacturing complete, points previous Portugal the be speaking, within continue tower facility these to strategy. that in is recent improve strategic is scope we saw include restructuring demand execute margin

is next growth. strategic Our priority

excellent of and testing requirements, ballistic stage The increasing year crash including U.S. in crane end. impact units and continues is shipments as a business XXXX. military making the completion Our with the by final progress, the testing begun Army's rail planned expected of with program

our across Europe meeting a the enabler wide This sharing EVP our improvement including we growth network. areas largest crane Last dealer and addressed our more one Cranes. Barcelona, by market Africa dealers Spain products. and updates was tower practices, which topics, best hosted of is of from key the XXX Ravenscroft, summits distribution of Aaron of than in of Another led in all Potain month, array strong history, for

Africa for and communication and increase improve concept will a launched new which forum business council solutions. dealer tower also partnerships among a Europe and dealers, have crane We Manitowoc to our provide

began implementing begun a global we growth, year, to fruit. the of bear during key account which Lastly, has management terms in on basis

our For distinct recent quality be instance, improve I last in received for (XX: new we large had launches conversation, over crane XX) order. to to Poland to XXXX. are last customer the are it recent the rebuild months fourth awaiting thanking the Grove confirmed not, efforts a Believe their operator the time definitely They pleasure of and was they our order the brand. helping or this crane from that In delivered the in quarter. product an anxiously XX yesterday their from image of

Our third innovation. is strategic priority

This and market deliveries quarter. we crane in share to new by customers with in and being truck-mounted significant quarter. to increased market growth as in TMSXXXX-X delight field the the production momentum, put crane, the example, continues began work our evidenced units the many For build of

pipeline product company. a new from continues revenue became coming quarter products Our approximately robust standalone our of with XX% new to introduced crane be since we third

to commitment Days is our plan introduce enduring mobile products another new four June as innovation of Our evident, at to in exciting we Crane XXXX.

the field of the a our time, cause on switch the we you at by was The end diagnostic the to our week, to viewed crane at continues our as technician. business have our it a field user point early location. which technical crane This of Dardilly, I but their of this value to everyone, optimizes in from was end tool. literally suite to root issue, I product its saw improve our technicians project, developed technical model phases, deployed. is up calling to DIAG, center, replaced it this in of watched the in France many control refer from something include CONEXPO, demonstration, dealers, it the our to are remote an team for which problem, point we system the identify it business, to from user, last towers while As further I build the faulty personally applications our having went brings helps for how

priority strategic fourth is Our velocity.

be over manufacturing winners embarked of received Manitowoc train the top and operations awards communicated healthy launched improvement Way. throughout form their we We contest ideas. improvement The portal our these that company. later of all competition our Way. seed top and employees lean documented enthusiasm create this journey demonstrated and single Manitowoc and operations using This Lessons on will the month. for to the entries Learned we to ran a so the introduced on empower year were competed for a encouraged the of improvement a four reviewed the teams to The leverage of where for hundreds and that culture our them goal I to we to among Learned examples Just continuous ago, was announced implementation July The our that document are ideas as ideas. Lessons using Successful months can implement increased entries web share teams Manitowoc. across This employees

In visited that team the the terms like and throughout highlight team was Niella, with I to specific our would the and impressed to week has Italy of pleased productivity made Last year. progress factory. the improve I extremely activities,

has to path Way deliver achieve I've over As a to to tower new new cranes the implementing we several production a work. the direct team and first material over daily initiated the our units presentation building To worked including as and improved planning, conference last performance result flow to calls, developing quarter, of XX%. strategic conclusion, these in XX) increased financial Manitowoc. standard hard we've the refer of tools by priorities production the Manitowoc launched this, The about we self-erecting as that have we of several Since we XS, of utilize stronger In hub. on our continued the our (XX: spoken

quarter both look we the positive see well as and forward fourth challenges As to we as XXXX, signs.

many markets On well that with like the are chain, and in certain and material there the markets. significant of headwinds costs, one experiencing steel, in changing our overcome, particularly are us along competitive geographic as very we peers in as end supply hand, must constraints increased pricing challenges we competitors mixes

are finally Based the market more on the the current confident On hand we ever other see market conditions in we than modest recovery that U.S. has formed. feeling bottom

footprint, these on We products, of all as such are the activities will structure, turn achieve that, progress flattening journey, that the the With our I will long-term our that over call control things operating lean our session. to to we to great of question-and-answer back can goal XX% of focused XXXX. introducing new and rationalizing by our organizational manufacturing Ion begin the us enable income

Ion Warner

Barry and instructions. provide Thank Operator, you, right. All David. please

Operator

Mig Absolutely, sir. question Dobre And our from first Baird. comes with

Mircea Dobre

puts puts be but and end or is color sequentially, EBITDA, you left the still with only just stable would I question. so I high looking end range the what the would couple mean, us down, taking here think guidance months maybe at the low at margin either Yes. revenue, helpful, takes helpful. it Good on wide in maybe morning, gross pretty Thanks like that of year, to up of little a really my seems you as for guess, can revenue the your talk help through you to a color be more be any should guidance? everyone. on

David J. Antoniuk

Well, this is Dave.

was revenue of our in of the $XX prior I'll in indicate million and in put of EBITDA of what factors same and in generally high realize a about million associated a highlighted typically particularly with, think number with about to the in say, quarter, bit somewhere to you years. revenue under $XXX Barry With $XXX at a million. adjusted our our what fourth would call, had we guidance – between that fourth that pressure I not $XX when look implication going type million So, we're are margins speaking, the margins quarter, of low a

there right with pretty and our we've of So, ability that that feel confident guidance. out now, we achieve guidance to put as the comfortable in

Mircea Dobre

Can to, the referring are us specifically? pressures that understand what you help you're

David J. Antoniuk

Well...

Barry L. Pennypacker

is There's mix. a number of factors, one

issue that the in that We have – we for talking less a substantially than hedged from do we do have about that I tell And in a use the presence quarter, hours been years, hear headwinds you our large time, in first cranes. mix historical. year. which significant production in in of you Europe typically standpoint, steel fourth that, steel, castings in like in the balance We quarter that has factor for the have me have you third our the over manufacturing the not things we know AT with we will the large is fourth but large

Mircea Dobre

is follow-up to it be capital for And to do? about working Maybe looking on away, as you're we incremental or flow. that any free should the if my cash thinking Then XXXX, going this drags there Okay. as that a view are anything (XX:XX) into look year. how side on you're

David J. Antoniuk

So, I'll reverse. go

we're date. provide, say, not do a what XXXX, said will to at in position we've is right that XXXX. our later regard of I'll no always cash to goal XXXX, give guidance we yet in Regarding use to with But so a any

cash So, fourth generator, so. quarter typically a be for and it we to us is anticipate

it So, close year. we are being the to zero counting for on

Barry L. Pennypacker

in what As cash. ability to that not do. overall that's that's and not going do, Mig, affect generate business to not lean capital companies improve, what to our continues are working we we're to invest our going will mean, I

Mircea Dobre

you. right. Thank All

David J. Antoniuk

You're very welcome.

Operator

have Moving Markets, on Seth from Capital Weber. RBC we

Brendan Shea

could product on in seeing terms more for if color of on some Seth. I or weakness any provide Brendan you is line? you're strengths us by This Hi, thanks. what wondering was

Barry L. Pennypacker

of. mentioned know, you overall old, is and we of the little really distribution of network prepared returned in market that model, very our project I bit an a that, U.S., result tell story out I I really position well-suited it years the me not very mean to (XX: offering that remarks, our you a to advantage which can in about, mean I a truck-mounted for extreme XX) standpoint been product are leading but us share talk the sell. market. TMSXXXX-X, to U.S., The from heard in particular success in we multiple in basically and has my was old Cat take technology, you've that the are has Wild Yeah,

I improve done, We to to much with talking We innovation do, things evolve our how and about particular overall in XX-ton experience XXX-ton leader, be U.S, we the into we innovation we market we user. think, won't the end have and particular and continued offering, I our great our increases see price, the the think, but continue be have U.S., RTs, as RTs can the talking for so is the becoming will overall share in in company about in these in this and standard.

Brendan Shea

Thanks. improvements And Great. then, talk was follow-up, there? wondering about your I and if aftermarket could business, for Okay. you my

Barry L. Pennypacker

Yeah.

aftermarket business large Our improved order had year. a in the quarter pretty Algeria coming we of a tough last year-over-year, very and of third because that's off for base,

to in evaluate around technology different continue organize effectively. that to it, continue that we to more to aftermarket However, capture invest we enables us alternatives, we continue

have particular sold. a the sell we that I DIAG, opportunity would will said, not I as us, opportunity in to part towers, that As give mentioned traditionally

like our is year, of to gets and insist in of to that amount revenue, for particular organize the percentage aftermarket continue going invest that around last continue think a it, X% necessary forward. we the from it, ours I we up quarter, just attention we increase were and in company So

Brendan Shea

Thank Okay. you.

Barry L. Pennypacker

welcome. You're

Operator

Credit LLC Cook Jamie Cook Credit with Our (USA) L. Jamie questions, next from comes good couple Suisse. Hi, Suisse question Securities one... morning. A -

Barry L. Pennypacker

to Credit earnings of morning. Securities sort picture Jamie Last you (USA) when quarter, Good Suisse with L. you your XXXX. Cook – talked last LLC regards - big gave quarter

provide chain think way did broadly be remarks sustainable very your up all? by think to that to on a question, cranes are, maybe think, my good about bottlenecks East. market products, guess, good in mean, that's I have do orders U.S. driven and said this the particular could up tower about Thank that's if in that, where you you still I expected the XXXX? Middle hurting been prepared you mention follow-up given the at flat, the I new you and just and in you supply color a then Europe year, little issues, into if you. chain sales your more And supply then is

Barry L. Pennypacker

so chain manufacturers here of the me Germany. world all XXXXs mean, supply have four located start instance, we Yeah, Wilhelmshaven for issue. in in let in are here the with I

base. that share And the same sometimes we supply it's unfortunate

the our what chain we we've of them five in our have However, to supply they're the out And suppliers having adequately these products that taken need We've is these issues. of get plants done are organization. fighting we us key of people in satisfy the customer. located to order

crane So, are look are single waiting that's see I constraints here for I there here production out from – facility, external part a and yes, sitting at can an supplier. a there the cannot while

are we So, it fact very the decide we're who ourselves out is supplier progress, letting good fighting just and he ship there going not to. to because making in for

thing. the global one the Getting markets basis. to on a that's So, back

think, in And with a I unrest a Saudi concerned very brushly, large Arabia still remains little happening very, investment. I'm second the whether in for happened into we with little East, going be said RTs quarter the positive. there substantial the Middle few is, particular. pullback regards typically broad last think, about I about a that's is in I particularly concerned what's to a what think for I'm market there'll XXXX, the us days.

is seeing XXXX tower in a enjoyed industry where cranes, share, slowing good market South Korea, we – very saw going in very, we have we're Asia-Pac little. as I mentioned into leading

areas, know going from concerns down, have you me particularly in bit. a the we're So we slowing Americas. But other that coming to see what shoots green

L. best from a we're about to XXXX, - we back we appreciate of rest we're it. our that's that evolving time LLC think growth spending we're going the assured Suisse but and tell have Thank not lot we in making queue. year. next (USA) believe to a try sure where get predict in yet you. Okay. Cook ever I'll Jamie you and to exactly hit bottom, what our Securities will Credit come in position I So,

Barry L. Pennypacker

Thank you.

Operator

from next with comes Duignan Our question Ann JPMorgan.

Thomas Simonitsch

Good morning. you of is in of hours how This achieve you annual of need the million on potential much Tom to Simonitsch run quarter us to to $XX Can production behalf Shady target at were lower some mentioned million? the Ann. improve savings Grove muting tell relocation. the Last benefits production hours rate of you order $XX

Barry L. Pennypacker

we I at though – but last even that one the talk amount still we hours don't year, typically current in we hours say when we the of we're have total -we're the production produce, I'd the hours. still plant down on that year our about of looked versus number

plant, is As the causing in this our for earned of we facility. has significantly manufacturing our at slowdown lattice slowed, a really which boom a talked – number crane crawler so hours about

So, unfortunately, they're the why point P&L. many you they as coming how time, on benefit year-over-year are basis. in we work at say see don't – a or not we still And muted hours the how a in down, much amounts but at down that plant that's significantly a we through don't

David J. Antoniuk

in in crawler as more the market we in need did in forward look mean to we're but that to think you much this that structurally past issue in lead the when place solidified there point pretty whammy year. of also confident double demand. our a of large productive And providing become so is of we put margin certainly as kind incremental us this we every look facility incremental satisfy the points we many we've where it, bottom right? have revenue the expansion we've I volume we've basis as hours and to no It's at don't us we that to the order time, returns in Yeah. XXX

Thomas Simonitsch

Thank just back that. you. to I And going pricing. appreciate

certain some the across give region? pricing just very environment markets. each competitive more you in on Can mentioned color You pricing

Barry L. Pennypacker

fighting have I'd the it's for particular, demand, competitive. been – say in in in where you Europe manufacturers four extremely decreased

to that competitive, have instructed be patient truly and that crane diligent we industry, the trying most most technologically maximize some there in standpoint. the have if any to take group believe back our impact I of However, we're be a have crane advanced competition that have in market we where minimize craziness But our the margins. and here we from offering sit we say the not We can't we orders to can going that. to in is

-I to Americas know market there's competitive. is doing less a fine lot The Americas, don't would so, fine. Middle Americas, continue more color and and say the caps manufacturers, the how is, year, calls on it's putting I these think I is it, can of compete, think market a advantage and doing the The East just to that that Middle in mean, is to I we're a I the in East very, become that think, very I growing our the mean, strategy internally think, better And I next I is right figuring in we're and see we're discipline now we and I as you Europe. I that the say, provides the looking there's competitive, Middle toughest lot -lot East. more hope thinking that out for? familiar implementing very with of else I take that very, evolve you'll were think ways

Thomas Simonitsch

you great. on. Thank I'll much. That pass was it very

Operator

Moving Seaport we'll Shlisky. on Mike from hear Global, from

Michael David Shlisky

morning, guys. Good

Barry L. Pennypacker

Good morning, Mike.

Michael David Shlisky

Brent we $XX at of that, here that and said with above go Texas past, and long a And have way like will on of getting $XX oil are if you've we So, the West oil track. at kind almost gas towards kind in $XX. CapEx back really

was particular these market? I levels, this as slight that and figure, upward a long is price I gas in confident oil to XX) kind kind a think, you're see end timeframe you of we kind some think cycle going oil the could be to of sector, change you improvement there said (XX: how there's but real there of very from that

Barry L. Pennypacker

very, very reported spike -with openly our in trucks, which boom in saw we We the driving demand. about the with the first particular quarter,

we also the a As on utilization that have that traded company distributor publicly that in up. you large call is that's picking fleets said a know, their

spike see happened the a it's So, the East level longer, needs been and level from see take us issue Saudi, a crude understand of in we make to we and to out trying can in time demand. last of in our of competitive I the has is that standpoint to order that that in take when thrown be for watching in little and in said, think, geopolitical of The increase I sustained to as while seeing that four what's and a the dramatic does advantage but $XX see one we we're position going I for uncertainty really a number happening, sure period the we're think, is that and days, in all that, that, market do a to activities that that, Middle return. we're are remains

Michael David Shlisky

question. Okay. follow-up is of Got just model a kind quick it. And here my

XXXX Your big rate we at of a should that Is for there going expect to the inflationary issues forward million are run SG&A in $XX couple flattened now. has aware out of? kind any quarters of be right or

David J. Antoniuk

bit have, that FX, a bit, to may our rate, then, may too that that's big the we probably on depending of upside. a engine – tend implication we any cause say other right, that like little to to purified about foreign can't I'd Mike, spike other that I operations we – see happens biggest do what due don't we're early we little that. exchange say that but FX which prototypes, to on issue other things an that our depending what the call and thing it's changes, engines, that than, due one I'll Dollar on a to Euro will the is it's control – predominantly have the has to what amount And have. come

Michael David Shlisky

Okay. (XX: Fair guys. Thanks enough. XX)

Operator

with from Robinson question And will SunTrust our next Humphrey. Charley come Brady

Charles Brady

Afternoon you thanks. Hey, guys for anyway.

Barry L. Pennypacker

how are Charley, Hey, you?

Charles Brady

correct to And trying an on growth. guidance, thought opening inventories pretty that, I of you to for go, that? back terms support in or don't wanted are Barry, they hearing mean, really say I I thought dealer appropriate we much as shape and to heard just I'm levels remarks, that dealer know an I just Thanks. communicating I reading growth, are Good. that what were you're inventories comment your in to your if at need into that but as and the in infer order too outlook good convey are much, to you I

Barry L. Pennypacker

No.

think, I channel. not to The trying the was are stuffing the that absolutely one I doing thing are you here. message we is reading communicate

of this but our for. always it are is practice That that We dealers the have orders taking sure are that has company, practice they products today. the not been making

because management fewer sure We – that stuffing capital our we that in our our the able so plants. inventory, working are keep increase channel, can have that in dealers increase we making not and manufacturing are that the to fact of better our the velocity their so plants, velocity machines through we're

cognizant a their want of we manage right. and I it's to trying too. working we we how to be we capital, manage So, are our as working capital mean, partnership, can – are

Charles Brady

enough. Fair

Barry L. Pennypacker

a that that It's particular, we're think very way. I talk in if a it's I but dealers U.S. they'd balance, to it's think, a balance, positive one delicate evolving but say, – our in one across you delicate the it's

Charles Brady

and going guess, to I what on and cancellation that of from impact be. as how margin look can be and we mean, I as might of And how that's, frame produced, try Thanks. orders had $XX to those to the much kind wasn't? that million India you you in are that much, – that QX, was the

Barry L. Pennypacker

remarks, Well, in accepting committed prepared remain produced. it machines. a to of customers my those said And as good was our portion I

extended not However, to them time. for of – our committed period getting an remaining inventory keeping in I'm

in to for So, homes those machines. find opportunistic very trying we're being

Charles Brady

Okay.

Barry L. Pennypacker

new in customers for are ready ones. we'll India them, make our when And

Charles Brady

Great. back I'll hop Thanks. in the queue.

Barry L. Pennypacker

Thank you, Charley.

Operator

from on Moving hear Revich. from Goldman we'll Sachs, Jerry

Ben Burud

Good for Jerry. morning, is on everyone. Ben This Burud

Barry L. Pennypacker

Ben. Hi,

David J. Antoniuk

Ben. Hey,

Ben Burud

Hey.

seeing you in commercial maybe out year, U.S. detail already well the and So, at gave some additional markets. in on the you're improvement give could as XXXX? markets, as some over half you on the of – and slight commercial color balance first but energy guys what the called And through you energy, least

Barry L. Pennypacker

in roads mean, for But, have our put demand had one course together California, instance, in is I investing whole change truly in seen overall yeah, is who would an that bridges. the what their we state a and outlook infrastructure. and Well, own are uptick its bill, of of things where we have our infrastructure

we new customers, products their of the way types definitely spending would a demonstrating the we of We products. that And have certainly type products that tower that the are – it change about, But we're if uptick. to have across that are overall talking infrastructure we be we it will seen that as build good they offer. substantial and can services some get entire country, for very, very we

paradigm as U.S. the how of of equipment can we to they're a In cranes, set these used appropriate there For instance, are industry apartment they and don't at site, hup workers looking the sure we've quiet, U.S., site. building typically that raw track these past. we three change don't around nice have safe, work what we've would have site job types use a the had types to building need in the doesn't tower they extremely around overall use tires in building where opposed up require making fuel. reliable. cranes; to are in we're to in the the that few a materials been a require the they're build of builders Europe, call it They gas-powered of success to the building. have other up storey of move and number typical that And infrastructure the our the product the where convinced They way. vehicles tearing And very pockets tower

Ben Burud

expecting particular? you the inflation, And are in spend and then, maybe you to steel to on see just All what on moment can right. touching six nine touch next a maybe over months, cost

Barry L. Pennypacker

guess I at in as Yeah. that's this prices time. really anybody's as guess input far point

what That bought, much continue to at that the we've go that sure that, yet, I of we going was, we still through. to they've seen year think we're steel and when input, you the as we're quite go is in we've how not we which (XX:XX) seen increased. look analyzing steel think up a bit,

then, cost factors side I think inflationary costs. the and of cover think will key So, will general the I the input other thing the be

Ben Burud

you. All Thank right.

Barry L. Pennypacker

You're welcome. very

Operator

next comes Rob Research. Our question Melius from with Wertheimer

Rob Wertheimer

Yeah. Hi.

rates is to if correctly, more the that? you versus regions, utilization. a cause you color of softer. I What's on can good, were I is Just little that ask don't inflecting wanted I up, follow-up the believe, said and was if rental rental rates upwards looking understood quick trending utilization utilizations bit rental gap, on up, the rates a that haven't know give different caught actually it were

David J. Antoniuk

it ever think rate next but year to there's rental not competition, think in of particularly lots local behind and into as improve trend rental has I need I says so is we plenty that the patient. markets, think that, to we yet There's this rates that caught slightly, of this the utilization But will be utilization that just continues history follow. improvement. I

Rob Wertheimer

give to that? where it nervous Perfect. And start X is or to I the point you and mean, about data not the sense sense of really are another utilization to go? to getting but levels I just or feel, the utilization people is get of we're know points always a XX a maybe perfect, channel, able availability, across whether

Barry L. Pennypacker

line, have fingertips Yeah. – continuously. on that We dealers, particularly track data our our we product RT at our that

Rob Wertheimer

it like to does starting so, look And get... it's

Barry L. Pennypacker

matter a implemented that taking in guess. and utilization through of the into technology are the external see we the model We CCS of have a the actually trying field. in feedback that not us and It's our field to assets what put

Rob Wertheimer

you many that data? do years back How get

Barry L. Pennypacker

We track go first type we the far X years, to as as put back of to it. ability XX when

Rob Wertheimer

a an say And so ahead? to you then normal level, showing trying I'm mean, there's get sense that's inflection Perfect. tightness, Yeah. just showing would I of whether

Barry L. Pennypacker

improving, to improving. are bouncing say would means I bottom that but stick, and hockey inflection right. it's I we the mean, mean, me slowly of off I

Rob Wertheimer

Great. Thanks.

Operator

next DeBlase question comes Deutsche Bank. from our And with Nicole

Nicole DeBlase

thanks. guess. Good Yeah, guys. afternoon, Good I morning,

Barry L. Pennypacker

Good morning, Nicole.

David J. Antoniuk

Good morning.

Nicole DeBlase

say XXXX, lot and Hey, Korea, but actually the strong talked about or about past so South years. market think decent you crane for has been I when didn't mentioned Americas, the and really tower you expectations pretty the for Middle whole your Europe two you East, a

into Europe thoughts So, your if about, you talk bit on year? little could next a

Barry L. Pennypacker

asking you're now, if kind of my Now opinion right I'm flattish.

Nicole DeBlase

And I three then kind Okay, Is strength guess, That's of possible now. beginning order that question. helpful. of higher level mean, a we're okay. the I a sustained it entering quarters crane we've recovery? Fair seen enough. of

Barry L. Pennypacker

in There been that shoots and and in this Nicole business and answer certainly at green business that is this ability but be that we so to industry business to I able XX for dirt year we've business. I could go hope say, last to well history dirt mean, particular be they so. are repeats it in that X margin quarter, hope I've the to business best could in I've case. the much way inflection, I patient, itself, and that, to has the moving quarter that so to dirt going effort continue of some a months just were Manitowoc which who've around you're so months, Because that been to XX the guys the at I indicating people certainly the this invested guys the this tell guys moving look high again patient talked in is are trail our quarter. by first their They the just XX be and be we if call eloquently earth guys, second years, Pennypacker, be they very started me, to back and if when we and demonstrate

thing don't particularly think for world, else few the is am the impact is be as investment. with that I concerned mean one anything this happened I in temperament good geopolitical have around last us I I Now how it's to but in days. does and going here about that the Middle things as it's know for good East though pricing, I'm of the

Nicole DeBlase

Barry. Thanks, I'll Okay. That's pass on. it helpful.

Operator

from the Elliott. we'll Stanley of line hear Stifel Next from

Stanley Stoker Elliott

and guys. the new Hey, on taking company, that fair rates XX% the even not is stand-alone my that high higher? at tracking are you question for least of to the Thank if products order quick from assume A backlogs question. it

Barry L. Pennypacker

Absolutely.

Stanley Stoker Elliott

the cranes, hub then kind the come the since what of reconfigure your truck and to how trying you've to a asking of next you've cranes coming of with have cranes I portfolio done portfolio, voice that And feel of a changed for much got kind new on things basis? the then out you've And been the a that reason of of forward and of get some kind some refresher. is quick able just board customer mean in you year? Barry I was maybe kind service, go the for

Barry L. Pennypacker

if but had on to, say our is I XX% I'm that across product in we've way. think Yeah. I I portfolio, I thinking entire here a mean to slide and touched the number would the new good XX%

all-terrain don't type become effort to of I'm we X. that particularly here at in more now, this business lot to XXXX, have And whole here this of have doing business and final we time extremely this have for good of X to Europe because regulations at frankly, go in We to from a do that. tier tier quite

at the with and less. are have company got efforts But So learn daily basis. can very, on to happened continue we more happen I'm to we touch very in that how we've this a pleased and learning innovation

Stanley Stoker Elliott

luck. much you of Thank very best guys. and Great,

Barry L. Pennypacker

you. Thank

David J. Antoniuk

Thank you.

Operator

Maria Blair. with William Our come from will question next De Larry

Lawrence De Maria

guys. follow the... up on want Good afternoon, to I Hi.

Barry L. Pennypacker

Hey, Larry.

Lawrence De Maria

...hey, you mentioned. guys, diagnostics tools

rates understand in potential other parts? more there? profit a or Is your bit to maybe center what the a more can capture words, better. what's opportunity little are this go, thinking likely now, they this to And help you is where capture you're Just aftermarket curious,

Barry L. Pennypacker

we I crane at into brand fact in it's can that time think a Potain crane to able sell installed put a that opposed the think to both. sell. the should I be we competitor. are we we service our it's I mean, as in parts service But the as operation, ensure the

Lawrence De Maria

or high now can think guys rates it materially capture you do aftermarket as higher? is they you And have move

Barry L. Pennypacker

to And we're move a XX% – my it bit mean get I mean, aftermarket. No, move to it that try higher. has was this materially goal from business XX% to can I away today. stated and

Lawrence De Maria

Okay. the can deposits update happened Thanks. policy specifically Indian cranes, curious, payments? I'm secondly, the and the current there? crane cancelations, then, progress just And what's you on us, with what regarding

Barry L. Pennypacker

lag Yeah. XX). still They (XX:

a are it cancellation it a each negotiation customers, wasn't on shipments full a the the a full the from in generally this we order received the the part, case, was and think speaking it was is in delivery there received so from particular a so but I is, nonetheless was these cancellation. it residual orders, though order that cancellation, partial purchase was just for significant separate, balance not customer. It payment was the we cancellations,

Lawrence De Maria

Got Okay. it.

Barry L. Pennypacker

left if handed So, the into government and regulation that put the driven inquiring specifically country. are in the overnight Indian a really, crane about imported you not reasons for cancellation, segment it be the said our vehicles could particular

are in a policy get India ill been that our for as that that again. regulations there are takes it and goes, made, think but it time I going good has very us be received, changed tells to our changed, to once policy particular experience intelligence a is

Lawrence De Maria

Thanks. Understood. Okay.

Okay.

Barry L. Pennypacker

you. Thank

Operator

Charley we'll Humphrey. next to And Robinson with SunTrust Brady back move

Charles Brady

Hey, thanks.

offset want margin, I not the bit going in too beat at communicating follow-up be seasonally, least things gross that, a with not happen? basis, would gross it's you on still but be clearly competitors quick would weaker a to here, QX, to it sure commentary than understood obviously your and expecting are price a or to Just just I normally little on you in mix but like going margin make to much up that are be up year-over-year make or

David J. Antoniuk

no. Yeah,

Barry L. Pennypacker

answer, word absolutely. One

Charles Brady

year-over-year. up Absolutely,

David J. Antoniuk

I'll overall that, to see quarters, do year-over-year. look be in can't it, anticipate you is to increase our we at marry the when yeah, what saying, year-over-year, what Well, up fourth sequentially year-over-year Up we there an being, say is, other margin. anticipate but actual you our Charley, quarter, we're up you margins

Charles Brady

Good of with in hearing talked that dealers, kind the I'm they we clarification. Potain within dealers, have expectations, just, market those curious their their about you're for Thanks. all markets terms when them number respective you the what And dealers, that positive large towers? hearing Okay. both concerns when meeting are holding of of from from and

Barry L. Pennypacker

next of are hub, think this by very we this my was very deliver one businesses that in I expectations, their success response and prepared time that deliver a particularly Europe, in Overall, demand And new the because remarks, for on a flattered I extremely ability some to around some think demonstrated the market products over of potential our increased been strong. in Europe of couple I've has in complementary new in been absolutely I always for positive to absolutely remains would product us, particular, able but we're blowout to about customer the there, haven't sentiment to our They're it introductions. the represented say years. They environment.

Charles Brady

Thanks.

Barry L. Pennypacker

welcome. very You're

Operator

I'd like we additional turn no Warner Ion to questions closing And Okay. audience. from for the floor the further or any time, it like remarks. to have at back looks this

Ion Warner

Greg. you, Thank

accessing Thank our that joining our everyone, a available continuing this for manitowoc.com. us we Before Relations day, afternoon will section call. again in at conference the today's later today be quarter with you, The a speaking XXXX Manitowoc conclude call, Company. interest your We please good to this everyone. replay for quarter of our forward or during by and look of Investor you Have conference call time, note our third website morning, fourth

Operator

you And for ladies and call. gentleman us. joining We that thank does conclude today's conference

You now disconnect. may