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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.
Seth Weber RBC Capital Markets LLC
Clifford F. Ransom II Ransom Research, Inc.
Charles Brady SunTrust Robinson Humphrey, Inc.
Stephen Edward Volkmann Jefferies LLC
Jamie L. Cook Credit Suisse Securities (NYSE:USA) LLC
Jerry Revich Goldman Sachs & Co. LLC
Ann P. Duignan JPMorgan Securities LLC
Rob Wertheimer Melius Research LLC
Stanley Stoker Elliott Stifel, Nicolaus & Co., Inc.
Larry T. De Maria William Blair & Co. LLC
Call transcript
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Operator

Good day, everyone, and welcome to The Manitowoc Third Quarter 2018 Earnings Conference Call. Today's conference is being recorded. At this time, for opening remarks and introduction, I would like to turn today's call over to Ion Warner, Vice President, Marketing and Investor Relations. Please go ahead, sir.

Ion Warner

Thank you. welcome third Manitowoc outlined quarter evening's release. and review call in everyone, press company's the XXXX morning, to conference The to last Good performance, as Executive be and President Financial Officer. President Conducting Senior Chief Barry call David Antoniuk, will and the Chief Officer; and Vice Pennypacker, Today's a which slide can the found in webcast Relations section includes Investor of presentation, be our website.

reference remarks. prepared slides the throughout these We will

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

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

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

due materially company's However, or latest actual the update does differ The the could SEC in more not results implied filings. from obligation Manitowoc to among described to any of Company one factors others undertake projections any refer other or of new or Barry you, a revise as with I circumstances. now X, slide result And call forward-looking that, events, future any over to and information, statement, please will to the whether turn

Barry L. Pennypacker

bit executing ask strategy a every and employees day are each costs improvement. We come our difficult marks been to Thanks, and These Well, percentage the team. did a for EBITDA of adjusted quarter effectively quarter they another profitable of results has quarter environment, operational reflect $XX Ion, XXXX, ability excellent over everyone. to I little our Manitowoc supply year-over-year make by million, our This chain day work sixth better third which welcome, Manitowoc delivered to here. and it. up of performance X,XXX the growth. in we EBITDA consecutive our while manage XX%

continues to rise team that show results challenge. for our Our the

each one stronger, three quarter agile, them future every forward their and Orders for company a we positively during our continue I and new more we deliver look are well as our momentum profitable than products, of to were together. America. accomplishments and respond superior We the thank cost to year-over-year, years see ago. as primarily in commitment to Customers performance, of which North total XX% increased ownership. lower as continuing

project continues investment I North As mentioned, momentum North work to in in year-over-year with drove continued and construction. utilization American energy to well of major improve, growth, upstream completions crane environment most gas and America replacement the The continuing commercial with underway oil demand. and drive

to India. Pac continues show demand, increased primarily in Asia

was However, the the Middle describe by offset this as weakness would In stable. Europe, generally market in East. continued I

regions, growth all while global well, Our increasing to extremely perform business showing across continues delivering margins. aftermarket

feedback on for sales cranes improvement. be States of a Asia grew primarily and field. quarter, markets, including rental to by reflecting Pac that in continues in Our India. XX% showing Market increased and the is growing China, working favorable, rental net utilization driven demand U.S. fact are year-over-year number the the the also strong, rates United Australia,

swift offset took lowest to continued all cost, and the at secure Our we that key and possible working headwinds as equipment increases markets the revenue are with materials inventory actions spoke is is and to cost up, the find stable, about continue to opportunities effectively manufacturers pricing needs input which manage while for growth we capital provides channel for experiencing. We I these in actions. Last our we quarter future.

having any to production of. shut we Additionally, chain lines the our team supply navigate delay any or proud are has been constrained able something without shipments, to extremely down environment

at moderated persistent, cost appear real time are least these commodity prices have being. to challenges for and While the

are we that, and over business and competitive tough turn overall David I'll a And to our to our the the working It's supply financial walk on profitability. chain customers to with effect partners with through quarter's it. the results. call reduce face Let's us

David J. Antoniuk

everyone. and good Thanks, morning, Barry,

to slide X. move Let's

quarter million, quarter the placed third of million orders an increase that Included in are stocking approximately of campaign. quarter XXXX. were over XX% winter orders totaled quarter fourth Our orders of $XXX third the during $XX typically third towers

$X year-over-year. in items, new In United products impacted was were orders changes and orders primarily orders for were rates. driven in these States. markets market in energy construction end unfavorably in XX% and foreign commercial to the the addition, in approximately the Adjusting The by increase million exchange currency quarter by favorable conditions due up

$XXX of Currently, is over September the of backlog basis. on backlog the XX% Our XX% FX-adjusted XXXX. over XX%, year scheduled XX million, $XXX our by up end ship an to million prior of QX or and was

the all Third net quarter year. and Asia our increase sale offset basis points or venture, million XX% of due from increase $X $XX year-over-year United regions rates. an year-over-year increase input adjustment increased rose the to Pacific increase or cost driven the Gross and year. in XXXX mainly a team well of as as foreign ago costs, The XX% the $X the to were higher million XXX long-term by of $XX GAAP a million non-cash related X.X%. to year-over-year. basis, which primarily a receivable operating year income FX-adjusted changes profit Dong prior than $XXX increased margins on regions. improved Yue. The customers operating delivered in adjusted joint shipments The quarter from SG&A XX%, million, $XX sales in million note Chinese the due increased a unfavorable to is million On prior year over sales million, income improved the by million prior $X to on Manitowoc million $XX our basis, were across On $X an net quarter, sales the of by increased of exchange and was in $XX million, volumes, third the partly States to and XX%, by basis. is an

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

EBITDA quarter consecutive dollar consecutive quarter marks year-over-year percentage this mentioned, increase. EBITDA adjusted fifth in of growth sixth year-over-year of the Barry the and As

expenses, other non-cash was due million pension $X year. were Our increase $X million, million. charge last net, than was settlement approximately of to higher The a which $X

to will During of an a the off third benefit for taxes, quarter, purchase valuation in we release into result regard entered attributes. lower million, million income balance to benefit definitive insurance of transferred annuity to we a on which benefit PBGC sheet of agreement company premium recorded the UK partial pension $XX a $XX With on a taxes in contracts, forward. our million related which with $XX third the allowance of obligations group and a going discrete of also our quarter tax included approximately

to income of year quarter expense million approximately fourth $X of discrete tax a million, full Our items. approximately guidance $XX tax to expense to excluding equates million million $X $XX

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

in items, operations press per release, $X last special for $X.XX share. continuing as the night's Excluding income adjusted diluted our outlined was million, quarter or

of as $XX Cash $XXX liquidity notes on XX, XXXX. XXXX. to hand the the $XX As options notes million of to end million, and quarter to million February the increase $XXX total senior would compared our an September we refinance XXXX. also our was September million, of million secured as was XX, of from at of like that the refinancing anticipate in are point all $XXX out I reviewing September

non-GAAP flow to Cash restrictive ones covenants on program. were by used is the receivable cash provided that from for flexibility. on and GAAP $XX a million structure operating by goal a expense, activities the for comparable with Our flows while optimize our basis allow reduce X% securitization quarter the adjusting basis our a when more $XXX million, and improvement accounts interest capital period replacing were current activities operating

generating on what Manitowoc focus large tools a has sales capital decrease results. XX.X%. been improving The historically to as mitigated points able is the has cash increased. working basis volumes Our been have capital of of measurable We've as This by of year-over-year use to approximately percent using XXX working a Way

of year is expenses approximately X, billion million; XXXX depreciation as slide revenue to restructuring EBITDA of $XXX follows: full of $XX $XXX to $X.XXX to our adjusted approximately approximately Turning $X.X billion; million; non-GAAP guidance of million will now I approximately approximately and to million; $XX tax call million expense million; With income the items. $XX to $XX of to of that, $XX discrete turn capital Barry. expenditures $XX approximately million back million, excluding

Barry L. Pennypacker

you, Thank David.

slide Moving X. to

was capitalizing improve. on moving quarter an performance, ability into and quarter, third continuing navigating demand Exiting our chain customer sentiment significant increasing The and QX, where challenges. to both demonstrated we supply improving we deliver see to continuing QX while important financial one

we to than effectively this, at manage elements to to of a reminder, margin P&L did quarter. environment, comp. expect priorities: true an we momentum a operational focus The margin higher commitments relentless a rigor, this orders XXXX. improvements, with improved strong Way. spite as expansion, innovation, the deliver process entering QX hand expansion, our very to with on executing Manitowoc strategic returns backlog continuously our XXXX maintaining of The while However, steep on we still our entering delivering is growth, principles keep in velocity. all task We're key shareholder our committed face In our and of was on Starting especially inflationary four using price by our

and the to of the the saw important momentum The services. here part have on performance with on of aftermarket seen encouraging also initiatives grow and better parts over aftermarket focus growth to from is We of than and clearly business. around margin coming efforts we the first reflective our strategy higher this half the year,

will anticipate to of capital debt is David happening efficient As XXXX. in February paramount in an provide our and currently flexibility We manner. earlier, re-syndicating us mentioned additional this deploy

Middle is so of as significant strategic here our we revenue. much a ago, sit our many a revenue; growth. East years is next priority today, the Our represented portion smaller of Not piece

I to by East, can trip During recent pent-up starts the Middle once demand the be to unlock we my potential there encouraged realized. was

our partners to as with We closely are working inevitably to Manitowoc growth. the market crane ensure new is turns well-represented channel this company that

come. is ordered, to value to this that the has for to innovation, that Customer more our Oil introduced report Basin the National to cranes new where am differentiated response continue we Crane our expectations crane priority many International providing strategic third Show. exceeded by the tractor-mount several lead Permian we XX-ton pleased with Our with I at products customers. industry add

Lean witnessed fourth continues our red and implementation of from is our using and month, implementation strategic material I highlight on to principles using France, our existing requirements opportunity non-value-added system. in of material feed installation priority This get the velocity. reviewed to Lean In by Last Manitowoc of a to provide operations The lighting expansion System. in rid Moulins, Way. Europe. the Our our strides work process operations line journey in Progress a kits green, via Andon of cells used proactive the is highly visual I key amber, side a assembly of

to our is amber assembly out, red a As replenish need an the the also operator from to India electronic inventory. and to is time the logistics just-in-time the to warehouse This signal stock automatically enough signal with Manitowoc Chakan, maintaining assembly the prior the forklift The truck the material. directly to team to recognize to approach facility cell alert or of a commitment for additional activated, principles provides I'd of of Way. stock like while the continued their transmitted

there, may a recall, increase profitability facility market in resulting The great their in output, accomplishment. in newly growing relocated India. return to team you a continues is to As our this key

long-term closing on our for continue we While that markets we in cost perspective, focused and the challenges business. us a our XXXX. from for our we next XXXX, well ahead for remain outlook know have planning of to the are We year out positive in along a and are

to trade products and more increased for demand, agile in As a In policy XXX the continue that will company, provide our while been global dealing we closing, continually uncertainties. a stand-alone providing services more and than with crane customers leader the we've years, solutions. costs lifting

a value. and our customers, delivering trusted dealers our exceptional partner are for of choice We

I shareholder returns. confident vision, providing our we while that, everything operator, delivering do, will for velocity line With questions. are open long-term and up the We innovation in in

Operator

Capital time, At this you. RBC to with for floor open be like Markets. Seth our first Thank question questions. we'd like the will Looks from Weber

Seth Weber

good morning, everybody. Hey,

Barry L. Pennypacker

Seth. morning, Good

David J. Antoniuk

Good morning, Seth.

Seth Weber

of going the just from forward to costs is quarter, us then of the Thanks. understand I'm much kind and calibrate fourth – to trying that still? you square get reflection perspective the XQ and to third the think, covering early into help how just are margin in that. you discussion. Barry, next higher part expect I Can your year Or where said trying I'm quarter. price/cost here to XQ just a we headwind Morning. up you Do in decline of you – here are worse from that of price/cost the a

Barry L. Pennypacker

we be and we As the half in call, for conference somewhere of the the second steel $XX said year. around second the expected quarter million tariffs to

Our the We've were understand pricing and we do quarter and we run rate, offset stab forward. going looking going to that. our needed in happen in reflective at that perspective think experience with that third our particular was to giving able these and exactly taken to a what from to is is that what XXXX current we of price we're customers a areas

Seth Weber

Okay.

to more third, was way negative Is clear, Just be an fourth about to to like but is to the so quarter be than that it more the offset, quarter think right fourth be going quarter third it? is negative. so sounds going

David J. Antoniuk

is Seth, a Dave. So, this

second tends be around quarter. have quarters. our first historically, third been fourth and to quarters our best So, the quarter The

anticipated headwinds. is being cost product we've have QX higher do the lot say driving of in that and as sales well. quarter. than a issues, QX. that lower I'd fourth in that are is mix other in headwinds So We nominally a But the they there quarter mix cost are the

Seth Weber

Sure.

then Okay. XX% year, of to? the for like you. helpful, could you're just this on in XXXX, we're margin next headwinds That's do north a this feel incremental And be talking including David. margin cost you about should business thinking what be that incremental the Thank as

David J. Antoniuk

Yeah. a great question. Seth, that's

items, are coming that uncertainties around lot our on finalized elaborate questionable not deal identify we XXXX time. However, of There we and and those until plan going yet. this I'm XXXX at to with haven't

Barry L. Pennypacker

math is a we're a bottom it's to revenue have though, shortfall a And going not would have we're think cost year this right? so. a I assumption, take it's cost that and the What to math price a I we're the expectations where team a say, line are have intense exhibited to the from has for And assumption, and is we're prior and Yeah, necessarily assumption. over you where to last pretty out have XXXX, years doing to going And lives when be at look we three fact. our need to successful a going come going cost, management game, assumption, what game, we reduction. has in

Seth Weber

Sure.

any Can Okay. a you the ask be can in just just will backlog? color The Maybe do you this the if on it mix backlog, mix I accretive way. different XXXX point? give us to feel at

David J. Antoniuk

in mentioned, QX. that's Well, at look is point you as ship this of right, and Seth, when at ship to the months, backlog in majority the going XX% six I over most this vast of in our stuff time, going to

most order going talking our had would of two, year. of not XXXX had intake throughout that I about say if say increases portion you on we've So, had that increases price backlog, have I'd certain at the small when you're a look has the that the overall things. three, it's impact. revenue price But to products

Barry L. Pennypacker

we're Grove though, planning up this look projecting, year-after-year. significant I the a so we it's have our affect of when levels. currently in with. back and our on in is significant result of you to proven somewhere just in as projecting that to XXXX, able management we're make what But key mix what, we XX% stronger coming historical Seth, mix. market still significant our we hours can't team I And fact expecting would change us of volume key see not not to what recovery the positively our that's what change production, would at a The has for in is Based increased in a have add, our it And that's think, else. get a we key, do where to deal quarter-after-quarter, business. that Shady we're

Seth Weber

much, Perfect. the very color. Thank you guys. Appreciate

Barry L. Pennypacker

You're welcome.

Operator

Thank will be Ransom Research. question you. Clifford Ransom with The from

Clifford F. Ransom II

gents. morning, Good

Barry L. Pennypacker

Cliff. morning, Good

Clifford F. Ransom II

do number this I've back, companies. look at of you transition a you When watched of kind any

Manitowoc the that of transformation with the years you've we there three over full other anything the kind next about five same than of Or different out for is business? the this crane timetable should businesses Lean to So, done? look

Barry L. Pennypacker

principles are work, principles is difference only The of new customer of things the bigger. standard the are difference. is of are Cliff, principles difference driving same. deployment, the the much much the here The only principles when that remain products to the That's The principles the the behavior our comes only of bigger. XS, product development, same. policy it all

Clifford F. Ransom II

follow-up Just a as question.

still You pretty Hoshin, that that working you fit? Is the first? When where a or priority are you have other high capital a do at to elevated looking things number. does sales

Barry L. Pennypacker

Well, believe much at basis I business. very continuing working think levels, manages historical are of globally inventory, effects capital the pretty group improvements and make to on there. we definitely conscious David's our are we our daily But of me, look we a in

let So bit I'll more. comment him a little

David J. Antoniuk

Yeah.

think other So, set That one a turn a perhaps the turn you're in than our that the we shipments fully benchmark that is is quarter. in expectations by of is inventory. our for things working turns one Cliff, From the tied receivable year. standpoint, I'd improve money the I capital rather quick we up of timing each the X.X And of aware everybody. that have

to drive better has our So organization. relative the that within say belief that can capital changed management and would that improve in nothing cash inventory, continue I to working we will

Clifford F. Ransom II

very gentlemen. you much, Thank

Barry L. Pennypacker

welcome, You're Cliff.

Operator

SunTrust. will Brady next question Our with be from Charlie

Charles Brady

Hey, morning, Good guys. thanks.

Barry L. Pennypacker

Charlie. morning, Good

Charles Brady

the kind gauge relative conservatism tough orders to a a us markets got you're comp, guess what is into for kind there the ago that also pretty you've way you're given pick-up expectation, you even guess, some in of the I of level coming I'm like you've products but got that out, quarter. end the trying a and built new of a go comp, a a year looks in And trend into what's of seeing. like Hey, it that I'm then some to just for QX if wondering maybe of sounds on causing could third your that, of kind it towers, and, pull-forward of $XX a second against I comment just tough you're million through the want the that. talk that came obviously, on just from just up to about commentary, your

Barry L. Pennypacker

in winter towers opportunity in the business of quarter, the orders, for campaign which season Yeah. comes The the get place line around. season placed in order in is which we an history winter their based has that spring And basically when campaign, fourth been to spring at called And they for they shipped. get the the is our customers priority the the comes the what's on when the orders winter the company for do around, campaign.

Europe, our of a decided need areas the timeframe of year. March he he serves next dealers in of in he in increases cranes tower One in wanted largest Europe ahead, to for that in get all the because sees, that

and that line. so in be quarter So normally to I'm first we he our now, came to you can us the I give in order give said, going you that fourth

entire the our why reason And that's question So do your customer was... decided other to that.

David J. Antoniuk

Conservatism...

Charles Brady

kind the... (XX:XX:XX) of Yeah. how maybe

Barry L. Pennypacker

it. an for it, out we've very going we looked were to quarter when every were order, margin there you a very take to I are very our at will comes the And margin with mean, got there's an good as do fighting if but conservative. orders. have say October booking We our you orders there of October have order. orders tough I we that will had in always now, And good, we're that tell we're I no Conservatism, that fact. we a comp in But order in to XXXX. of matter it pleased always, not the very always, fourth

Charles Brady

hear. to good that's Yeah,

Just and you've me would revenue, then I – flat on to standpoint, you the on over of down a one taken sequentially down goes? percent a QX continue to expect the as expect that more months. would that revenue administrative of selling we year-over-year nicely or look past we engineering, expenses, XX for as of percent the revenue percent basis from guess, sort of

David J. Antoniuk

little down bit a basis, year-over-year Charlie. a I on think

Charles Brady

you. Great. Thank

Barry L. Pennypacker

You're welcome.

Operator

you. Thank

will Volkmann next be Our question Jefferies. with from Steve

Stephen Edward Volkmann

guys. morning, Good Hey.

Barry L. Pennypacker

Good morning, Steve.

David J. Antoniuk

Good morning.

Stephen Edward Volkmann

XX% to about I whatever this side, look your sort about increases cost is things may. these of question of that's and incremental sort underlying not margin side the way, just think lean to margins. sort and other savings of And cost wanted But sort come may of little normally, we back normal to margin at how fine. the try it think of you if on a I bridge for efforts XX% then that's potential about I days, bit, so think and to I the and like like one on the to

way about curious, I'm lean the about should relative margin. I to impact to what kind A, your improvement think a operational So, to and I is reasonable I'm way just secondarily, it; if and of that's to guess, you think a effort much having if be think assuming and there that's on trying how measure

Barry L. Pennypacker

of not. could measure. gauge thought produce It's the particular difficult to that the very we to particularly where takes we're constantly that way hours but those hours use to like internal we be, we see say want and product, we And amount we're a all order that I'd to But reducing. in we have measurements it to

philosophy and continue every floor have quarter what tell those we exhibit From think we I The margin from we'll do still our reduce to and Way, to in it shop of I'll to be And all able our opportunities single to a we're take whether do XS from to comes we it of on Chakan, therefore do the we the an increases, able on, whatever have defer do need it. a Kaizen it's the or accounts Shady in factory coming in coming event India on from in it department, and Grove from or we it that's is want this facility whether fabrication is But established improve being whether is the that's day really from on than whether important comes how comes after that is operating we've comes we So Manitowoc out, a receivable, must that go improvement. fact that that to it's we that to offset stream after fact is all day And And and do. to perspective, day. and less everyone done, continuous you where after philosophy a culture overall happening David, to lot operations or it the and look but on. on and I cost. our from and see value at the hours could day happening is a

Stephen Edward Volkmann

Okay. this, long make Fair crawlers. Thanks. I relative that apologize anymore I you've Barry, enough. kind And but indicators any if, I wonder if missed seen lead to of you optimistic

Barry L. Pennypacker

particularly that Utilization the that's good, indicator. to a say good to competitive continues I'll Win make to is that in market leading command we very, the price about should give very, able they our customers order that we're and technology have we're The them one very a sure this crawlers, be thing a that command to and pretty U.S. it's high in offering advantages particular believe the that in intended market. we

Stephen Edward Volkmann

Thank you. Okay.

Barry L. Pennypacker

very welcome. You're

Operator

Thank you.

Credit Our will Jamie LLC I next Suisse. guess, - Jamie Suisse Credit with Cook Good be Hi. few Securities questions. question (USA) L. morning. Cook from

to your that go Can regions with and headwind you're whether lot the And Gulf like sort any in conversations projects petrochemical that's on order about how thinking also October issues chain in that, that you should of on being trends what talk And side, and FID, when Thanks. give you of not sort the driving XXXX? a customers last were as just of were numbers on some you Coast then projects? increases sort with a energy us in and particular supply you're of well be XXXX, having then color improving about talked positive. think the around my question, You or can specifically? expected the as the LNG big to

Barry L. Pennypacker

with chain effectively. to are how this prowess matter I you a them with operational Supply got enough has headwind. of demonstrated deal that always issues team think a them. deal it's And It's

that I supply I it the I taking was of accomplishment, is now. and think to and their that, we along. in and I here, due nor been hundreds us base to a company shut chain of you a that our goes of you're million onboard in load, remarks not think year prepared south, back strategy internally, a with the of good, line what, mean base be that's doggone to came I a are had able going the load. people, we going When goes and did them which good my company and they're to And that them, a guess want have. the said That's we better a when shipment, chain our went in And these into I XX-step paying to it doing had millions they're you When with of we'll production us, you and consultant I I I need dollars guarantee our here we said, costs $XX third in them that pretty level so the single fired do and market they're to language that when did did with that down they're we by tell to foreign be you philosophy, was parts like to know suppliers you customers, and back what the dividends market save give with way this quarter. to and guarantee second in satisfy if was the partner that you the you suppliers? we've able times business, Well, hire themselves million down, instead to it to the And run. I talk from services of keep order strategy get actually business, partnered meeting doing if is them, continue I to our what, – able to people moving your used job this taking this supply $XX it the we suppliers process. to and the overall them them. on we is care think opportunity a it's moving day given and When the best worth miss invest

David J. Antoniuk

take me let Jamie, Yeah. your two questions. first

to mentioned, with a So as in good Barry order was October, QX, say trends that regard I the will for month us.

caveat order of I'll lowest within our quarter as the percentage quarter in is that by at book. order the looking However, book, that a our that saying

pockets still wind their facets, And dealing into be European with the by there's the Our at the driven be coming year, regard side are in of sector, those world. what sentiment in in determined. sector, we're wind of to it's to say comp been versus to orders or our talked customers, off it be conversations November/December those winter of U.S. resi in sentiment yet and that of all with when whether as the look say With are kicks European of really the in part most is timeframe. energy the the And last think We've outside And and November/December. really I to our commercial you the as going I'll the within in the have campaign ongoing. energy side businesses. customers construction in goes, I how they'd the will – XXXX of from it. that it orders side going far

Asia well. been good reasonably Pacific has as

basis. we together We're that do XXXX we an will end of all up. determining midst ongoing those think have conversations the on So in where putting and

Credit Jamie where you. queue. in in Cook LLC Suisse be back say just L. on we'll think we I'll Securities tuned (USA) Thank get Okay. stay - So I'd XXXX.

Operator

Thank you.

be with from Goldman question Our Jerry next Sachs. Revich will

Jerry Revich

Yes, hi. Good morning, everyone.

Barry L. Pennypacker

Jerry. Good morning,

Jerry Revich

in or that could about you if your bids ago. years wondering running folks on that win talk have compares how place you one are rates where and two to I'm

just refresh, product had tracking? that the sense us the you for a how give Now can share broad is you've

Barry L. Pennypacker

not provide we those in our not base to in we participating up in share. doing Yeah, targeted we in share lose well; pleased is We're our a gain we're margins shareholder shares. with our share. share areas cost we where areas margins to – targeted In we're share very to that our right, where need standard that order gaining can't then share get to if to be the losing areas return, are the and

adopted called not market that's We that's internally we something share a growth. profitable have share is profitable not growth want. saying Market

Jerry Revich

context? you profitable you just some give areas context the can that gains? more for crawlers Is ago? I Barry, moment your Manitowoc. have us tower area comment guess, give more you're share us really and cranes where historically behind a been just Can And, more achieving

Barry L. Pennypacker

share cranes continue globally. to Tower gain

been past, those, the the growth States, has features the produced largest the With We on targeted is able in Europe showing competitive well. as regards to we're be we bottom areas to do facility really such We continue gains market. going China, where fight I that to very to advantage, just to number XXX-ton our But with and the to Grove fight in quality over crawlers, which We're as doing the the our competitive that area. in towers. to us able share the stable. who Shady market, be a it's of share market of the back particularly offer been extremely we in share haven't benefits we're give our think from that products, high making, that's of for competitive that competitor investments advantage one I and the globally. with some see to day, the ability with to. targeted that is It I advent forth is serve be of cranes like we'd going number the Pac really in we're we're and as think very that the to with the one line where and targeted Asia to market, a in but MLCXXX competition. all able that being well We've market a every we that to and which going particular like the class. in able being also in the as a And crawlers to MLCXXX, share have to see well competitive one producing think markets we've particularly in continue continues United

Jerry Revich

have timing your supply the Where on Tier do lead your you rough reduce (XX:XX:XX)? ago? would to for sense expand Barry, us And, major a from chain can two Can years work just your you helped how suppliers been has time X Where now? discussion. that give one Okay. stand

Barry L. Pennypacker

today lot did a Well, we're two year than we product or more a producing ago.

that for our instance, work, of frame means a a Germany. standard be time. so who use supplier, not have that. days tied doing we takt they're And product they've our And day upper. ability half it plan that we in frames, which complicated means try as we the operations, That some we to in for and an from grow we every knows them Wilhelmshaven of like the that to we concept and to days, particularly to don't us to need supplies vary us every that. starting into three a need And continue them we supporting we a takt an a than gives to and called time try any a operate three And schedule firm half cadence XX volume. and and outstanding and give job been more make We

Jerry Revich

Okay. Thank you.

Barry L. Pennypacker

Very welcome.

Operator

Thank you.

with will question Duignan from be next JPMorgan. Our Ann

Ann P. Duignan

morning. Good Hi. It's Ann Duignan.

Barry L. Pennypacker

Good morning, Ann.

David J. Antoniuk

Ann. Good morning,

Ann P. Duignan

back decrementals Good how morning. in Barry, you to chain concerned means that about and down-cycle. it then should a and supply under-absorption, be decrementals I up-cycle management, wanted But will and frame comment then have in suppliers that Manitowoc downturn? to down-cycle in a a your go in we – – do an I I worse committing to appreciate

Barry L. Pennypacker

money. to can past. What our at go make shouldn't. to that we're we've we been that's that something not so we is able down, you have No, in do bottom, the adjust means as base we cost when the And

cost in as to But important our to stakeholders order that. I've as go maintain accordingly. have that and sure our invest have have been with we we commitments they're the one to adjust them, years are suppliers when of suppliers, that that to make down, the key to base us – we last it's we business. The means for a internally to we're in been XX structure practicing out to I've have philosophy yes, So, in which take sometimes going we we ability cost and to make them, work

David J. Antoniuk

just other this organization, in five have an through commitments look the have of profitable one Yeah. add organization. downturn. Ann, process a of certain be I at made decline I years Obviously, event that. That's within item at XXXX. think we continuous that some ongoing you to we levels sales the we had would When to

and the in that obviously, that happen, case, do particular that to in for we So, we we place lever plan plans if were worse, can have some contingency with.

Ann P. Duignan

color, you mentioned little the – switching on supplier in I prepared slide pent-up appreciate your just I then the do empathize with a some over in might And or or bit, Middle relationship Okay. you gears East. is remarks opposite pent-up mentioned in you Can demand X and management. Middle in some the about rolling regions the to East? talk demand opposed you where the East Middle in that think as some be there countries the perhaps demand

Barry L. Pennypacker

are I future. three a say, to I ago say, – in Bahrain lot of time demand. can but a amount just got go are where There that you that's the that Dubai there and was East, would – I whether lot tell spent look weeks Dubai, – in fine. back doing still that is would investment at Dhabi, Dubai is from significant I in is is and Saudi is being not where When the I East Middle pent-up stick at. Abu I at sky Abu the really haven't happening in – tower Middle than shake for the – in funded Saudi cranes and more Arabia, you a pent-up been looked mean, demand in Dhabi, I a there there of can the are is Dubai. I projects is there of you

Ann P. Duignan

any any do there? political sales as but the practices I business think how know you, an or more maybe events And question do recent Saudi not over make that of of opportunity? to to ask you change about fair difficult in it a does that

Barry L. Pennypacker

that a dealers have pulling of Yemen is is sucking prior good is us once be of them talk resolve for of has to going is our up freed mean, to very lot a tell of one war, out to I the couple it's that intent there The infrastructure. very the the substantial standing anticipated the that with from actions. touch another really Kanoo And course, war I that to country. through business. everyone trigger. We dealer. of capital that to be much They're itself resources in That They is political longest years is really amount Saudis. ended, going the a of

Ann P. Duignan

it. appreciate I get Thanks. Actually color. helpful I'll in that's back Okay, line.

Barry L. Pennypacker

you. Thank

Operator

Thank you.

from Our next question will be Steven with Fisher UBS.

Unknown Speaker

Steve. for on (XX:XX:XX) Nick is This guys. Hi,

Barry L. Pennypacker

Nick Hey, (XX:XX:XX).

Unknown Speaker

question. quick a had Just

here timeframe should expected the terrains thinking really drivers, So, for if demand replacement and rough about crawlers? changes nothing be from how we

Barry L. Pennypacker

while of are that that's answer auction good terrains, not highly to But the around and the �� wish now. I with many that And indicative RTs working, recover. for plans and believe our auction. going confidence. are continue There's a think in out growth heading we But lot is fact plan. of been I down. going for could any basins, replacement opportunities in activity that they're the in RTs utilized basins. XXXX, is to to RTs Rough There I are a that the see a our require and that ones oil substantial in producing great areas, we as to in are increase not for of we those lot anticipating, the are price

XXXX, we're from demand anticipating concerned, new demand MLCXXX. a crawler the as our crawler introduction of of it is lot fact comes of from of far product lot As a the

Unknown Speaker

That's... Great. Okay.

Barry L. Pennypacker

XXXX. (XX:XX:XX) demand increased for crawler

Unknown Speaker

I Okay, you is competitors showing in out great. overall your before, about then guess, new trajectories increase there then, some – just on we regional sales have a any XX% sale. at of there and growth from difference helpful. of here? piggyback, crane question I Jerry's about That's there in meaningful I look And is mean, guess, to your XX%

see if just to not. different I seeing just and regions So or benefits they're in wanted try

Barry L. Pennypacker

of if stronger I But very that prepared to others, competitor saying have for any in the are now. have sales. Americas business the I seen remarks that areas is But our handle an your to in anyway, tried me. think that's right us are increase not unbelievable of strong which XX% than crane in question I

Unknown Speaker

right. sorry, distributors? a more maybe All the I'm not competitor,

Barry L. Pennypacker

I fantastic is into an doing oil public pretty projecting of in I hot I think fourth we're next the good area the in particular particular, Yeah. that's and where well. sales they're mean, the beginning who's company, had crane some and it's it's sales of for gas, think That and reflected in a one and that a of year. our extremely dealer very and quarter part dealers

Unknown Speaker

last I'm mentioned just And a by All thing had clarify. margins to one believe then, sorry, (XX:XX:XX) previously right. of XXXX. XX% guys I you so Great. target

crawlers? with then assuming just just we could you come rough just that square, reach is EBITDA And that margin? terrains or to target so want don't And EBIT back,

Barry L. Pennypacker

of remember, in That level That's difficult I beginning to very, RTs. was happen. we're That the actions doesn't of means back there's today at RTs – not that rest we looked a climb are goal into to at not have it just operating means I very that hill do order giving giving below that, crane and when to up. is having assured, we taken that account. mean substantially take up mean, the the But got business. make it's other steeper and that XXXX, without in you we're to on margins long-term in double-digit our to

Unknown Speaker

Okay. I guys. got. all Thanks, Great. That's

Operator

Thank you.

Barry L. Pennypacker

welcome. You're

Operator

Wertheimer from question Melius will next Robert Research. be with Our

Rob Wertheimer

Good Hey. morning.

Barry L. Pennypacker

Hey.

Rob Wertheimer

simple. My question is pretty

clear think you October, fairly still? equity risk. of the of, a and pricing in a or chance What sort orders recession mentioned I the strong are, there some markets but were on obviously, ebbing, guys obviously, just You you do slowly spreading like? feel are market, are sort long the is that any of of mean, or climbing your a recession out that's – from I confidence contagion customers feeling we

Barry L. Pennypacker

depending it's both, think I world. in you're where at a upon combination of the

the in significant exceptions, a growth. Asia with think it's I Pac few region,

vehicles, call I all-terrain it's longer think I into term. for we U.S., think growth the environment areas our a I think well other as trucks, in crawlers boom in XXXX XXXX would And in stable. more what our other replacement and continued it's as demand. we're And areas in

Rob Wertheimer

Yeah. And I'm sorry.

and their quoting wrong markets end own Just you they've looking that are talk still like the worrying markets customers, confident, got healthy? do feel sentiment you and as still or to bidding at people

Barry L. Pennypacker

No, be them or are, positive A we'll happens one I other change by the remains what of that way a end lot today. And I of think think, course, very happens and determine, I seen day the watching about think of the – lot our of customers what country, are the will today to future. today. that sentiment the in

Rob Wertheimer

Thank Okay, great. you.

Barry L. Pennypacker

welcome. You're

Operator

Stanley will Our with next be Stifel. question Elliott from

Stanley Stoker Elliott

question, what you about level on morning, Thank a in. may of you kind me some piece of The investments quick thinking are we think February be guys. sort Good kind high cost payback when even after for A of about? investments. of fitting out those

Barry L. Pennypacker

We That's hurdle our want we that mark. internally. a one-year payback on any make investment

Stanley Stoker Elliott

at change the do EBITDA an Does all? they I debt levels, it'll mean fairly on be basis. low

Barry L. Pennypacker

would outstanding money debt that that general notes. is thought what is Yeah, that million we use Stanley, process being sense for the on $XXX it than overall to our I I the that the on makes our would think more it and anticipate evaluated. still we'll But go up had get in markets

Stanley Stoker Elliott

have then apologize. And may Perfect. I this and said you lastly,

bit domestically, of and crawlers you up, with producing here for You're have XXX-ton the you might then bauma some introductions the other XXXX? more currently little a talk about can coming

Barry L. Pennypacker

from that so purchase currently and strategic crane a to that answers that insourcing we XXX-ton reasons, We the are supplier question. due

that for far our with. I display cranes As at customers five have we least will be bauma's pleased plan new, as concerned, fully redesigned extremely think to

Stanley Stoker Elliott

I appreciate Thanks, guys. it.

Barry L. Pennypacker

You're welcome.

David J. Antoniuk

Thanks, Stanley.

Operator

question is next Our from with Company. William Maria Larry Blair De &

Larry T. De Maria

morning, Good Thanks. Hi. folks.

guys. you touched question, product new answered and on have earlier. Just the cycle's But my may this for you part of curious, obviously, strong

or last year quarter? number, sorry, I you And that wouldn't maybe can and just you're remind secondly, ship gotten but don't have the forcing or upgrades any in the two in us with? quicker. given book now, – to order curious, you door newer A how that forward the is much that you in getting how You're and much are products book the new that do new order you've have think out going of cranes the this market what's book typical – have bit

David J. Antoniuk

Yeah.

on ranges So, in of from the up second and say that depending XX%, one at what I'll shy book to anywhere XX%, I would is ship backlog just we is in the your just XX% on... said, I'd the we of say, backlog end the first the quarter, the say question, Like out time. ship part of XXXX. by XX% was in Larry, going currently point to any have And that Larry, of QX

Barry L. Pennypacker

quite to back you. the But is question first back we and for calculated get for us past us it on frankly, we'll because, backlog. the the our Let let haven't in you of part to get calculate what

Larry T. De Maria

to because that cycle, is it the getting more But Okay. those? new you're of fair business shrunk your products, of because say simply

Barry L. Pennypacker

Absolutely, absolutely.

Larry T. De Maria

okay. Yeah,

Barry L. Pennypacker

We'd business new a out out crane be did the would product. great it introduce be business and now. completely we of us of not if it's States the We United truck-mounted today for in that

Larry T. De Maria

Thank Okay. you.

Barry L. Pennypacker

welcome. Very

Operator

at I'm further you. this showing Thank in questions the queue time. no

Ion Warner

Okay. you. Thank

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

Operator

Thank you. Ladies and gentlemen, today's teleconference. this concludes

You may now disconnect.