MTW - Earnings call transcript Q4 2017 | The Manitowoc Company, Inc.

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Operator

Good day, everyone, and welcome to this Manitowoc Company Q4 2017 Earnings Conference 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. everyone. morning, Good The fourth to year call review release. to outlook, And XXXX Manitowoc performance company's evening's last quarter outlined full and the as welcome in conference our business XXXX be the Antoniuk, David President Barry Conducting Vice will Pennypacker, and Officer, Senior Officer. Chief Financial Chief President and and Executive call of presentation, Today's slide be in website. which webcast includes the our found can a Investor Relations section

slides these reference throughout will remarks. the We prepared

request queue I that to reserve time questions-and-answers would We Please to like Slide remarks. and opportunity return to everyone turn limit will follow-up sure be X. questions. an one you after for ask questions to your and our their has to to a to 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 any materially company's However, or latest actual the to of does information, turn events differ The obligation the could statement, SEC other in more any revise I'll not or results that, And implied you, filings. from Manitowoc to among described of Company one factors other undertake projections over new Barry. circumstances. with the future a as call to now or whether update result forward-looking any

Barry Pennypacker

welcome, and Ion, Thanks, everyone.

Manitowoc NOC and Friday, in an a two This three take yard our family about Before Pennsylvania. accident involving accident quality our to occurred I injured moment the to tragic talk I last like members life Grove, others. would proceed the tragic crane of Shady that took test XXX at

involved families accident and that prototype profound And NOC crawler configuration field. shock of out hearts with have the this The affected caused. crane XXX All has by their released been to crane to test event. our the heartbreaking not share and a sadness has a go been the this employees who us

are and all officials. the comprehensive investigation government a internal performing actively are cooperating into accident We with

As time, possible. comment the finalized yet has seriously as Manitowoc we the fact question that at call one configurations. made operate of bottom were this make the released is prototype Due the we to the to however, mistake will cranes to that very cause not as of that fleet cannot accident investigation with this of get we equipment safety XXX the are configuration and the soon been a and of no and in the on the approved to yet convinced field our entire market NOC safe takes be

slide quarter board. improvement to I to please year-over-year very results our which quarter significant across like turn would discuss am showed fourth proud the X. our Now performance. of I fourth

make Our admire global results that trust. in becoming that the continuing progress and we demonstrate company customers crane our are of type to

delivered year, Manitowoc were that extend demonstrated sell operational and the X% over point full cash the XXX-basis also ability part our in For we to of revenue, decline driven million. to excellent improvements call. the mentioned colleagues flow improvement all significant agile of cranes despite India in Operating improvement. as improvement EBITDA due a a in our adjusted a for story our with was cancelled they’ve a through success I Manitowoc quarter This $XXX was third with implementation be all to at nearly appreciation continued we destined during The my Way.

increasing end however in confidence, We challenges also seen markets. improving see other of our traditions markets in reflecting we have some some key

up the -- strategy the pronounced the customers quarter provided used ramp crane points of channel more to of market stabilize but need the wins fourth in market distribution solid The with to intensified values, to demand demand. execute half contributing bright spring remarks. the out be continues primarily continue continued stronger orders secure we our orders with advantage in reflecting latter half of utilization of an XXXX competitive us in products. in as construction season regards The respective under continue anticipated this an of rental the the on Western a growth for most very be be to but significant to new resulted prepared benefits beginning we to million. a Demand intake our to comps. sentiment that growth positioning fleets give continue increased anticipation end the take few will low We with Positive their indicative order Rental trend. more customer in well with Europe. later our the environment. as With of firming, to in color I increased than segment values of may tower modernize of spread growth quarter rates spot showed Americas campaign first fourth upward in quarter XXX market winter of confidence features data you be in indications but levels, another market and strategy was increase to our pressure upcoming

on be broad-based the to us customer remain continues to will upcoming results. that, by the and turn David this far in as projects And further signs the for a and international with recovery In other demand seen many delayed driving market quarter due orders call see in large Europe, East, continue commercial itself cautious yet US region. in we to sustainable is see to of market We a period. over our an crane peak to our transform of this inflection the markets. with bottom We pull A I in to infrastructure, it the recovery eventual through we sentiment of Middle residential in While in ongoing structural back and outlook in Australia, in see we the rebound challenges believe changes below crane if evidenced off financial the is albeit investment quarter’s increased as levels. our our along over the base. the talk most mining dynamic the

David Antoniuk

good Thanks, everyone. Barry. morning, And

to Let’s move X. slide

an quarter Our line fourth to $XXX orders our XXXX. was orders totaled million and adjusted quarter quarter Fourth the expectations year compared our EBITDA with million, of increase $XXX XXXX with of of in consistent XX% guidance. in fourth full

year-over-year crane increase by orders. significant terrain in driven and improvements was tower, all crawler Our

foreign Europe, approximately Moreover, the a of our significant U.S. amount Within exchange impact this impacted to orders favorably orders by were X% our changes volume and represented stocking XXXX. also accordingly rates. dealers, our in may for due in currency order orders

was the prior-year. in shipped scheduled backlog of over XX December of our to backlog first half XXX XXXX. year-end be up Our is also million of over XX% substantially Currently the

shipments tower billion, fourth-quarter for U.S. all million cranes in was net costs of dealers portion our U.S. favorably broad-based foreign net Europe and approximately the European from U.S. The SG&A also primarily than increased newly short-term both orders during was above year to million impacted the by year-over-year in TMSXXXX-X $XX to The due year primarily crane taking primarily model increase benefit was year-over-year shipments by recorded our currency the a or rates. million to most primarily XX% compensation or X.X the primarily significant for boom compared of approximately were prior-year. of European and may unfavorable fourth in although incurred fourth sales foreign employee in nearly driven in and totaled cranes were our for truck impacted crawler XXXX. the of shipments. X% in or billion The the driven cost million X% XXX across cranes we headcount products. a sales with exchange decrease was XX sales were adjusted net related term reductions million along to from oversight. to year. incentive net by represented fourth year-over-year professional X% changes costs shipments and $X to the approximately our cost in by and and Adjusting primarily was rates. partially incurred Full-year the terrain crane quarter a XXXX XXX were previously by improvement million crane year-over-year as than net decreased higher fees Net lower in ago. our million due of totaled The all foreign The by to year-over-year driven sales SG&A to orders million full-year regard of stocking and Europe Full-year of in increased customers. changes tower an XXXX million impact changes from this introduced XXXX due reduction fourth XXXX. from in tower from was particularly shipments quarter was costs U.S. the currency the rates. truck-mounted not XXXX. fourth currency X.X increased shipments exchange quarter million, which The lower due increase western discretionary exchange impacted into was was approximately and improvements lower XX With in were lower $XX U.S. Full-year was levels. increase the costs. previous of compensation favorably XX compensation incentive translation. cost the increased I units account orders, approximately XXX by the expectations reductions higher SG&A increase sales costs increased the quarter year, X% XX% For when order offset net orders for higher items which noted prior In And in short and in these consulting sales The in which than currency X incentive XXXX earned foreign increase is quarter favorably

cost year-over-year impacted the FX compensation in due lower addition, to X% to approximately exchange foreign for short-term and In controls. SG&A were rates cost unfavorably XX% rates. due SG&A headcount and currency full-year costs were incentive primarily cost approximately changes lower, by Adjusting

for X Grove, fourth During our restructuring for Americas to incurred related million the region of million and of severance plant was costs. relocation which we quarter Pennsylvania Shady expenses the X

primarily related globally. severance was the related costs Another were and Restructuring full-year to primarily severance. were Fundo of facilities well which Manitowoc to Wisconsin million X closures as million the cost XX Brazil Passo foreign for as

X.X% positive EBITDA Our or fourth basis sales, Full-year a quarter million $XX for million the standalone a over the consecutive of crane becoming adjusted an fourth points non-GAAP since of of company. quarter compared XXX loss $XX This was to million XXXX increase EBITDA million $XX adjusted respectively. quarter non-GAAP $X in adjusted Manitowoc’s was XXXX marks and of third XXXX. EBITDA

$XX per quarter operations Our $X.XX of net income approximately million. million discrete tax from quarter benefits $XX of XXXX fourth fourth for was or diluted The included share. the continuing results

and for fourth the in totaled $X quarter net loss operations $X.XX Excluding charges items discrete tax the or after Tax our notably $X from continuing million quarter discrete expense share. was per million. restructuring items, adjusted diluted mentioned

was operations for anticipated diluted tax $X.XX than from our well higher Although, adjusted $XX discrete continuing our the was income tax full-year $X.XX charges negatively $XX expense Full-year quarter tax diluted for continuing restructuring was expense impacted year and per certain share guidance. per share. fourth excluding expectations earnings share, our and net from $X.XX, and million by per or quarter fourth diluted net was operations items, million loss or our the below

under of I tax previously net the inclusion approximately comprised in the on million estimate was benefit operating significant require of we and provisions a the to legislation tax related a report tax reform tax and the U.S. in approximately our tax will of transition U.S. the recorded repatriation million. corporate completed $X an believe of quarter, As a benefits $XXX of allowance fourth France reduction reversal us discrete million to dean valuation the related reform, to items; This rate. benefit due provisional of tax mentioned, the benefit two income primarily $XX tax, losses We million. the taxable income $XX

related have sufficient anticipate net and transition not because tax inclusion, income to losses offset a expense. we fully cash However, we tax do this operating incurring

and legislation. $XX to Additionally, a as is are U.S. in to first under our tax anticipated, reform December the U.S. full quarter $XXX in net expenses total letters to XX, of was asset million of XXXX revolver our Due million, was expense regarding related end hand complexity are resulting valuation May. of base guidance availability at evaluating transition under total year-end $XXX credit. of XXXX. Cash earnings regard outstanding financial we With in statements million since the no XX currently we’ll tax we tax during the and at of tax as there $XXX related tax $XXX income XXXX expense as on call the liquidity million liquidity provide current impact U.S. full-year December no XXXX our to million, to allowance to reform, of our in compared income the year significant

on previous of during availability quarters the due $XX million the approximately which the conversion base fourth from lowered ABL availability lower to last in quarter, total mainly calculated. our which is year, Our inventory asset is

continued While our seasonal operations a $XXX benefit we adequate, continuing see million we neutral Total operating believe Full-year flows fourth availability the match the the in inventory working to were on cash flows or of provided than a neutral is a working in primarily million currency generation. double the our team’s a cash year-over-year will operating to capital decreased from revolver XXX was we activities activities manage as inventory. to availability cash XXXX. effectively accounted of an reduction currency demand. led inventory XXXX, of and basis, in reduction year-over-year. net were million our operations $XX of from in the XX On the of XX increase of from efforts for quarter build the cash quarter Of capital flows the $XX reduction, million better nearly XX% XXXX. fourth driven by million continuing total million quarter Cash

we’ve to full months. changing the our improvements providing reflect Turning year to achieved are macroeconomic with the environment XX guidance we last slide along over XXXX the X, operational

turn to is Our I depreciation million follows. of back expenditures With adjusted approximately and $XX million call Barry. to year $XX $XX a guidance $XX million; as to $XXX XXXX million; approximately of of full million. EBITDA capital approximately will that, the Non-GAAP

Barry Pennypacker

David. Thanks,

has XXXX year a X, transition be Moving of to to Manitowoc. proven at slide

on continuing are control. to improvements things solid that the we make steady focusing We by can financial

terrain in not benefits the in but that see markets restructuring full efforts rough we crawler able utilize track of actions until Our US broad-based on the are sustainable are we and unlock to our end a all cranes. recovery

thought market current still going While the of leverage cost end capacity restructuring the the our at to put, to did when market. we significantly we we produce it not we demand, are flood US. fixed the reduced get enough in have we align advantage our is not or full model would with full take Simply to

In discipline to commoditize our addition, maintaining products. are moving and price on we our

does the will we fully market not in rebound of benefits that confident US. are We restructuring it will our reap full efforts but until the the

key actively to our executing on are manage. these Additionally, realities that a competitors; margin have tightening growth, are strategic price supply challenges, velocity. priorities steel differentiate from innovation we expansion, chain we increases with Despite focused to Manitowoc our four and

engine the customers, strategic As now, is you drives know by The and and Manitowoc value Way key improvement the our employees. of our stakeholders, add being strategies that shareholders our initiatives encompasses for the the values those our growth foundation is and continuous core and

margin Turning expansion. to

continues, the innovation are in benefits it to manufacturing our a initiatives, structure leverage of journey market growth eventual maximize executing are Americas, reduction In to operating advantage manufacturing we continue shared our New In investing of by we we and to As cost we drive our the capacity double-digit and making crane recovery. streamlining progress allow margins, realize our if encouraged York, in take and the us trend, full which relocation. growth all improvements will capacity. continue fully crawler the to our to

of have robotic facility, combined machine the simplifying our customers’ As evolution our quickly implement and a to our improved we great demand. the flow in Europe capacity I and started among link They to our done operations, our by multiple velocity have German area are team of quarter, spoke about fabrication plants increase job has boom realigning of the welding. manufacturing. the factories reallocating At last

reducing to for demand times all lead All increasing cranes. meet enabling terrain of are us these

growth. is strategy next Our

Manitowoc execution know, process operational Way creating and you of processes all The excellence. these is about deliver good to As

these manage that products. on to growth concepts. We're on investment pursue market. two embedding know I growth We process on to the Manitowoc. to market need the you and key in key I above systemic to initiatives strategic the to part will tangible with companies standardized potential premium organization transition our make continue through priority have refer targets our beginning that the excited grow translating engaged This to fronts. sustainably focused to great about the to into at of is and of to we of Recently transformation shift well-known update a in I'm can a us ways to aiding progress grow currently what predictably as growth. must opportunities the new a previously the continued operational on community places a We We as the and operationalize this continue of us is firm communicated. a to approach. process now grow organically margin We these work key find expansion Manitowoc. strategic we a organizational those establishing

priority third strategic is innovation. Our key

key new of of process. customer our of One voice Manitowoc missions is in product development

in new investment over in from became the the of Our company. standalone fourth be introduced coming we a received revenue products new customers since by well products continue XX% crane to quarter, with our

XXX all quarter, [ph] For design example, an our in and position modifications way have been to using we the XXX-ton highest will ton we crane later Manitowoc class. the able performing to introduce maintain crane upgraded make with this the tools terrain our significant

June. and firsthand days continued customers our investment innovation, in the results and will dealers and our Grove Our of witness crane this Shady

we to base. customers to to products plan As new continue that introduce our assure delight

in way The nature operating investors these the Manitowoc velocity. need. structure our increase culture to be and Our fourth our result meaning have long to local organizational approach priority cross-functional in feet that we provide strategic goes continue Also, way to improving hard best of to the the is velocity. more that of is find way a of types

us effectively allows tool. First this as implement deployment to more a priority management change is

rather as Roughly have we the these focused Manitowoc successful to results. kept functions. us created independent the entire term the market. move the more and months and safety, agile. implement has future. both operations allowing such India the in XS, made all fabrication and TPM, closing Through progress to created in team improved our the locations which to us this execution in six significant manufactures, financial XX has our Manitowoc of flow for India in allows in manufacturers we our of on way of China, of just performance. exactly did it capacity Second, implemented we locations ago in long in fabrications angles more resulted improved Asian have downturn dramatically We localization on strategy In we leaner our to China making our eye in more a and

We growth as market are positioned improve. now well continue to conditions capture to

in By market continue of market our and customers organizational bringing desire, that the new control. to manufacturing that flatten structure. its focused great is we early customer a flexible we the While recovery products can focused on stages be things a to capacity

very nicely Ion up We to and for turn a answer begin XXXX. back I start good session. With will are it set to in question that the

Ion Warner

please thank now. Alright, provide David. and you instructions Operator Barry

Operator

go Credit Instructions] Jamie will to first with We Suisse. [Operator Cook

Themis Davris

is Jamie. for on Good morning. the actually on This for Themis

orders, question order mean, Just in on we I a your saw results. very strong numbers

subsequent can was So, to much and stocking and that should mentioned how you due that driven quarter the then maybe a on the in throughout underlying maybe you trends order of January? the And sequential how in talk tax actions we in Americas see sentiment to a demand? versus much by quarters pull-backing on orders and of basis? user reform to real expect And

Barry Pennypacker

they're the apart With I only break distribution sentiment Americas definitely bases improving. question, bit Washington continuous used it off is and crane see here shot starting take see bottom, try They’re in at. starting We’ll are little me to utilization steady in a improving, but have to of that our regards a time let starting an bill. to talk about they're pieces. the in see is infrastructure prices coming into that that Well, for

the types that we tell the provide for now built that section a positive is providing in at country where strategic it's dealer time not particular pretty that are us ability that network. orders it's our the of States into see either, a the are broad to and productivity our And in All based it’s in driving we United I cycle that those quarter, - things look increase when of just improvements our demand the given there sentiment one coming flat products of our for you we have market. and in received even an can advantages innovation

the order happy look was a was And going tempo where I a quarter I if at in line, broad would that orders pretty it was in orders they XXXX throughout say far December, get say pretty in So, throughout the brush be. it to throughout I in, trending where quarter, their the put would thought were in everyone stick are and the even that it we our quarter. thus not to

So, all signs. good

Themis Davris

assumptions to know. top-line just on in of this guide to you help implied just anyway. guidance your provide any like year-over-year margins? I’m to operating then on us expansion you in about Great. sort based trying Good profitability It figure we follow-up the my chose profitability. should think your guys margins And of terms can how incremental looks what not but and out time, are

David Antoniuk

Right.

look where model, think we at the ended take if $XX the I in midpoint - midpoint this $XXX million. So, to year million, we our I versus $XX up you guidance, we're should million at from with think

of you give improvement good would basic indication that that to. committed So we're our

Themis Davris

maybe Are digit we increase digit the single in double looking for or top-line?

Barry Pennypacker

orders originally we be, that deliver of to it we're that of don't revenue guidance a quarter whatever guidance were we off happens frankly, the which reason but we its following where midpoint this a will know did back in guidance. While may little deliver for and why we our revenue, we lower at higher, sure fourth I the reason with we year’s just If to that. that you than revenue deliver guidance. you point for a we If revenue midpoint for can want be correlation. I trend to orders - try above and get know but go higher, a is quarter history at the to the going this quite we fact. of is, as zero and is million, there's that of fact still look make came be give didn't our a company expect, I revenue then our what what $XXX we it, have yet, higher, know if if there

So, going for be me at that this it’s position I revenue in this just But our right do, a is say know point to going now. guys. be when I be to to don’t range, where you certainly tell in I to will

Operator

next Steve to Jefferies. with go We’ll Volkmann

Steve Volkmann

Hi, clarification a dealer you were good times quarter be much how would normal the just of Order in a mentioned your morning. May quick what orders that? stocking fourth of because for couple be of and magnitude, commentary.

Barry Pennypacker

orders Well going the give. lion’s not business are we good in as some very, retailed. I will you large customers But users. share. I orders the end those not and for I it’s tell But to mentioned very our not They to had tower directly am will stock. We exact had also our definitely percentage, that and that be go

from difficult very number retailed them frankly quite have and exact of it some some their because customers the So, of get placed the have been them order, is it’s haven’t. to when changed

said They’re those as pretty I they’re -- I tell would not am I you -- category, So by are orders. particular in one but broad-based. encouraged they that

have a that crane in as seeing this been So of am that guys that starting. old, I they’re as have business years shows who confidence many me some these

Steve Volkmann

been just margin outset the enough. Fair volume of Barry, you then yet. push kind more to at of really question. And the to Okay, benefits time able the haven’t one alright. you that mentioned on get

of margin sense for to order see expansion haven’t said quite shown are just seen XXXX thinking margin hoped And would you do you is can haven’t am about you trying that I think we you much eventually. for, to how you margin so, magnitude to relative you And expansion, have that? expansion. -- you as about there Will get think think of I a as an

Barry Pennypacker

expansion much above the margin prior will see You in guidance year. line a our margin has increasing but XXX-basis what improvement points been,

that year. We US. back if remarks, as come this two need operating historical them crawler I the don’t need us to the they will I substantial really RT and not US is exceed XX% Then truly in still -- we back, substantial, to come prepared increase come we in highs, but said particular to back for the even even definitely volume to a recovery see margins. very those broad-brush overall historical a in of which segments will our highs for in But

Operator

JPMorgan. to go Duignan We’ll next Ann with

Ann Duignan

comments of year rather good lot seasonality delivery your through bit for or may be Hi, the than of half profitable should back you of we spring about you this could the consider just one us quarters be backlog seasonality walk may given your or Barry, morning. front half. be will just a the a would four of little -- skewed to in you, just each the of could expect profitability, you to be

Barry Pennypacker

will to as the have quarter the on. increases it's you we I skewed to don't goes in it's it have past be exhibited think be going very first what substantial come think pretty a low consistent going and off with year I where

Ann Duignan

clarify, expect was profit in Sorry going to you QX or you should in performance just I take we to do thereafter? solid in ask maybe deliver then normal to QX strong a and seasonality loss

Barry Pennypacker

seasonality We XXXX. the different to the seen for understand that any to point than based issues have in exactly seasonality I where be what I what we expect are don’t XXXX are past the trying but to can get on

Ann Duignan

a follow just then And up.

inflation very talked CL you and call I about talked cost QX chain competitive the constrains. about On pricing about you think slight you talked

-- each chain you it expand Could some 'XX? on again constrains quarter this to of I think in opening like goals alluded your three remarks. through your of growth

Barry Pennypacker

the at of are know business are situation increasing. all prices, it steel buying exactly happening our you exact the in prices same has steel on. what's as look But competition If I steel going of you

was talked I supply about primarily some as that as you shifting happens but regard they activities its the higher in the on offset would tighter. expect us fabrications, price. fully the for same I labor So, of large will large year know broad-based inflationary this have it recovery like into the discipline the third are enter these with we itself becoming expecting chain have we hydraulic, that it what I and amount think heavier quarter unfortunately things With construction equipment, to to fabrications content in and of

production the we automation from another evaluating one are those our and remarks we the last can in over that advantage of years. few prepared moving plant are So, some where we alluded to take I of we implemented to have as

large that fabrications constraint that are we pieces in Manitowoc for got we that’s that So that we system to make supply way we supply up we order utilize don’t want in our to base in go got but have tools to with use that, have becoming some and of a a a place in free factories capacity. help their same the our and

Ann Duignan

And pricing?

David Antoniuk

pricing the in from opportunities. four the still perspective. that U.S. cranes competitive changed competitive Germany us that’s much. pocketed our terrain in I all mean very would East manufacturer is a Europe okay. pricing where to Europe a Middle particularly is existent all the Yes, continue think it's in very area. not see But we of to I competitor's say hasn’t I

and we continue through model to continue invested that to got to we our we the capital the our cycle. that products return customers grow principals completely utilize innovation and we that as do for If the strategy. the So, change will continue introduce and

Operator

We’ll Mike Shlisky Seaport go Global. with next to

Mike Shlisky

Yes, good morning.

categories. sounds just on U.S. ask your good fourth the like it pretty about across comments during the that business to want that So, was you said quarter, it most I

of I crane the guess some include So, heavier that category. would

of older couple recent some just kind had heavy last [ph] margins the most maybe -- the implemented has kind as man what of us you walk so the the far shipments So, could the gross shipments? of you color if give on been your years, from maybe how give of over to crane away quantification well us to

Barry Pennypacker

and up in trucks look addition we Yeah, aftermarket the our it's the I'll well. I that it's I industrial we're what of the continue more to that at say about, -- in I talking the really, Mike, the say, going margins would trucks as our cranes mean, that when not with change, boom push and to larger generally year-over-year

that where beat it's the crawlers some referring we the to, think, So, to we a in U.S. other death that that's as come models that are items from in fully The restructuring we think we're and I saying that larger talking not that by can help the more I are back that Mike, market generating that I that that infrastructure spending really the make business. efforts to utilize models it's put primarily volume need really really you're about, larger

Mike Shlisky

then anytime going mean, sounds secondly, of is last the there? And the for that to cranes want last customer that the being had like quarter, marketed, to fact market started the I XXXX ask it about quarter, resolved they back were come is India soon, most now Okay. whole to in you I guess that look I and but [indiscernible] kind issues by those at of may in

Barry Pennypacker

is, end customer answer to our that these these our The the yes, -- by for effort and and that have I it know amount we know fact resolved. a this also cranes try We we that time. needs of in second a They’re of change think that No. quarter. customer get not need resolved takes substantial know the legislation India, anything cranes, there’s to

Operator

Capital Weber We’ll Markets. go next with RBC to Seth

Seth Weber

Good morning.

first I at right? I operating what margins want earlier, clarify I heard year-to-year. say I Is to basis just did in points that XXXX you XXX think Barry, up least So, think

Barry Pennypacker

correct. is That correct. That’s

Seth Weber

a of give been utilization if that. a idea and that's some like from region of and maybe at a us of Can capacity moves you're restructuring, has possible? There you lot at point, this where Great. things by lot plant

Barry Pennypacker

that you know probably imply U.S. go mean, the envision we mean as we doing And I ways do, U.S. plants they're from big I in the exactly what extremely can them low to are still us extremely and low are in even it's making happy. my XXX,XXX comments mean, our closed extremely square-foot absorbing -- Europe, we to we in facility, that I though that

Seth Weber

Okay.

would you so at the this say point? below US So, is XX%

Barry Pennypacker

Yes.

Seth Weber

more talked I maybe, X. else last have kind might alluding aftermarket thinking What think trying I be should don't part of it I'm that growth about as move just just know history know missed peripheral you've envisioning the how growth this sorry, of sort to? to the year commentary then this And kind this, or about product? next you're we this of it Is I over about of you're Okay. initiative, Is the around process. Barry, markets?

Barry Pennypacker

lot here, implement that Cranes about for and and mean, we're are XX Manitowoc tools what we've President order the months The that of results and Manitowoc awful all I that talked going since get of Way, the to the an processes externally. When Manitowoc in type I've communicating ensure last at talked we've to Cranes look been we about you we

different a us I of just process shows astounded months we in I get order with something trying what out a excellence grow implementing the of our will, growth, have how effort. operationalize a utilize in originally to So, that ways exhibiting you And particular mean said structured With prepared not very, what type company, operationally absolutely market in we're company in to approach. highly we're our starting and X to thought. regards program that And to structured. and am take as mentioned rates targeting last you're the process And these by approach just very I strategic salespeople we I to that found this had when remarks. I that as we're it, the into currently regards as process-oriented growth can nearly are is, operational this is are we in substantially, X to growth of we if not growth. all segments markets focused

very very, I'm encouraged by So, this.

for in process-oriented As need our know, way strategic company we very growth. I we we felt order and you success, that us the just once operationalize continue around process can, to we're best this people, have to

Seth Weber

if Sorry are so areas are that missed, on? -- two what you I what are focused these sorry

Barry Pennypacker

will a Give I months more us tell few you. then

Seth Weber

about? separate you it’s the talked initiative But Okay. from after-market

Barry Pennypacker

our well. Absolutely. and continues all. it priorities, It's alive one strategic addition initiative aftermarket to of and The is on. in This is

Seth Weber

And will capital it is require just investment capital, using? this or

Barry Pennypacker

it’s just no, and No, process. tools new using

Operator

to with next go Steven UBS. We’ll Fisher

Steven Fisher

good of and target to the crane I in it of by But XXXX, markets. how know about gauge case know is XXX shape on Thanks, the up will If path around recovery that are getting confidence the XX% probably the you depend margins base in said could basis some the there? for your you least thinking I points get message I morning. just XX%. gap at Barry that to still to just XXXX but still

be about you just would helpful. So, could talk if that

Barry Pennypacker

XXX% I that committed still. to are we mean

capacity we As and a well question-and-answer order this operating have in to the to to the that target. in mentioned number going it's you when to are I times remarks as I difficult be said are U.S. as at during levels that prepared of session extremely we get

hockey do in studying going at of market two to forever. these our I particular by that it's back rebound, lows in stick proverbial And sentiment lines that be major historical know positive this as we two However, going not to area. to continue be those those comes the that business are and areas product

you 'XX crawler our that. volume at crane target base we that look together large improvement expansion. But of based when And was of 'XX on volume, in are your our nice are as in see remember base to was all we where put when margin growing long such continue our We portion the XXX back a you of what when have revenue from -- points with basis revenue. businesses key away

are but part and market helping we that those areas other recovery which areas in was need our assumption. we original areas supplementing because some with to are quite we frankly is growing are the Now of going in

Steven Fisher

to CONEXPO question couple could comps the as just the stocking could S orders about well. directionally thinking you in maybe quarters obviously back the the frame the orders because a and of that then down? quarter. that in come be you just the And Are think in to if next first you have

Barry Pennypacker

Down fourth quarter… from

Steven Fisher

either or year-over-year, And from both?

Barry Pennypacker

them Yes, close the be we first from at to I the have CONEXPO. I without shot -- end definitely a to fourth quarter down think expect did the what we in but pretty quarter

Steven Fisher

or number? CONEXPO absolute Without you that something adjusting that is number are

Barry Pennypacker

that’s no, No, absolute no number.

Steven Fisher

CONEXPO this year. it. got

Operator

next to go will SunTrust Brady with We Robinson Charlie Humphrey.

Charlie Brady

get for? level volume the to need of us Can you in be of utilization you kind you levels does of at need your to Can up be remind it what margin volumes. obviously not where Shady added utilization what because at capacity to to and just Grove aiming try -- tell us is maybe capacity the kind you that where are to

Barry Pennypacker

work north not you exact that The get it don’t an I try that. that today. XX. that but where exhibited. of above is I and not near will. number have just me But just get where on it's calculated, know think it can go I is near well it clarify if peak it's to answer have said under we has above we that Charlie to We'll all Well it to And needs you is let today levels still we

Charlie Brady

Great.

better particularly in shakeout understand in on want guidance, revenue trying challenged of where a a you for question -- the maybe function up, to a lack you the is visibility I’m just or a here. or sometimes, XXXX there it’s other understand go for stuff a XXXX it sort off to I forward the just follow-up is able being in format visibility CONEXPO sounds you give then a going to with some me some had of influx of market think pull XXXX? dealer getting to though, past, lack square more visibility, for and market, we as even just in range the of in tough stuff you the large a sense comp orders that some it I is thereof. year not and then QX and the I’m back strikes So, the trying and ago, is and but following guidance bottom provided year coming of interest things from got have the the and the level,

Barry Pennypacker

the face utilization some where things growth, have a has fourth of I I is range, to what worth know, recovery have tendency and some the I for have Europe, me which do, change expectations been broad-based increases are has mean, crane in that paper there have booked it. anyone you above one annualize written said say set. and a that’s it we well it but that but that you my Well, that let’s revenue you is imagination quarter the U.S. have Charlie, modest it you on on the imminent. in the sense wouldn't been look given because you of market heard the was there said or was I been that it’s at when no or I what mean, in guys could XXXX the by and in

So, isn’t I to then said, than goes I expectations our our to from midpoint. to know our we'll order to a update to recovers going up thing go see And I’m from a perspective that pass cost to it if midpoint midpoint going signs and isn't down - down, is but recovery, and was, revenue perspective above have this that in what do until, just broad-based I a our faster revenue as I go meet going you. think

Charles Brady

your… And

Barry Pennypacker

numbers We good. me anything. are very we trying give asking know don't to to like to transparent. give something you that You’re and that I hide you we're want we're not It's have,

Charles Brady

I’m appreciate mean -- I cut think do. I mean back. want that’s one all I -- Yes, don’t we wants bogus no that I get there numbers it And has just to I that. out Are to sounds am all that’s understand. sense a trying standpoint, been I than visibility a capital you… different and maybe [ph] the trying historically get like, from to then it

Barry Pennypacker

Yeah, yeah.

absolutely I correct. that’s think

absolutely correct. correct. think I that’s Absolutely

Charles Brady

revenues your implied guidance Does half have only year-on-year? up

David Antoniuk

Yes, Charlie.

what XXX is to our the of always revenue and side a the orders we consider we're said With year-over-year to to the what basis already we know XXX -- and twofold. have together stream. going go of of don't at we're live don't the going revenue we side that what are by points is improvement say is, but on orders Number on minimum that put is I'll one, half So, what scenario, in points basis latter guidance know our have on we many to those we side, that. -- a basis we've best-case going how what to the guidance have we year are just

play sales to second the the we're yet if and all a into the within the to a orders that turning going say year I us, of with and what channels year how cautious the to the we're determined rentals to or will as there, then putting we truly half or products visibility not, U.S. dynamics market, by So be, into the sure first flooding of not it's quite these is group. half see little how are whether of market which out dealers be within is we’re why into the that user going

Operator

Dobre go with Mig Baird. next We’ll

Mig Dobre

Good morning. order you. horse beat going am thank Yes, some I to more. the

on you’ve So, I but quarter had -- years. order the three and I understand quarter, best stocking this comments the seasonally and in look of at all if But that.

the end that thinking truly all new that’s gotten these is markets asking. we’re there why to too that it understand I stocking about what to So, way am better, the I has there’s inventory it dynamic happening, in Because a why is reason channel, the is be things little behind is getting that are in you’ve trying product? matter the Is it it. am XXXX

Barry Pennypacker

the all It’s above. think I all of it’s of the above.

last result Our over two course having demand that the the think a customers of as they some to happened a are higher the pent-up stymied sentiment there’s going that be investment of that’s years.

point markets to of pockets some would that are see. like are inflection there fundamentally but the everyone think that haven’t improving had I

think I it that’s is -- so, that. And

the be think that that is making without when I is this have supply market, in turn sure it is for mean to it and deserting going supply. is to dealer want thing required for a people when to network the doesn’t recovery. queue I end there anticipation is

Mig Dobre

half am in Then Barry off than than Okay, meant and your said revenue, this kind I am stocking fourth of that less the quarter. you for which XXX fair way million is But are out. be me would I orders enough. the about if help mark, less

billion orders X.XX done XXXX. in of You’ve

is by but million, XXX So, let’s XXX backlog million up it your not get XXX down call million.

able looks So, into converting to Why by any your revenue on business without should at wrong? be like XXXX. backlog billion I a X.X of net me in basis improvement you least to am it

Barry Pennypacker

saying not wrong. are am you I

Mig Dobre

Okay, all look you. I fair enough. for. That’s Thank

Operator

to with next Deutsche Nicole go We’ll DeBlase Bank.

Nicole DeBlase

Hi, morning, yes, thanks. Good guys.

kind possible. So, that the to like horse again, going I explored as much we’ve to as of I am beat order not feel try

So SG&A a I should us on specific just of thinking ones. think or XXXX? cognizant items. SG&A with of we some backing a XXXX year-on-year couple am How helped basis in about nitpicky out that you about one-time

Barry Pennypacker

to I the in Yes, XXX XXX be somewhere think range. we’ll

Nicole DeBlase

The And is Have prices one really I from on increased guess to helpful. a market we to whole like that see Okay. thing guys That’s or that’s talk oil and continue pretty Barry. Thanks, low? activity about still order gas didn’t lot. move crude you all at started then end that higher.

Barry Pennypacker

are flat. Still productive pretty is pretty of aware particularly the And the in things than that today in the you’re well U.S. wells did low, substantially dynamic is one as more the it in past.

for need in less cases. equipment a is there So, some

So, evaluating we that. are

you portfolio. business. sitting that know sure we to was I would regard well We very, is the what one our very to is utilized market can that very RTs still number and We above capacity that performing in there make to gas are well continues are and region know which prepared Manitowoc where And said product to With once muted with continue remarks putting into you Company. for tell class good continues so to particularly call is investment. were Middle the that products comes crane very, are when getting the competition, I as in I world I -- my the have the utilized it performance. that that point very to our a think as be believe oil I we the and East we the

Operator

next De Larry go Maria with to will William Blair. We

Larry De Maria

the by recall previously contributed board curious went I in in any And as if deal across obviously everything your just if that before, in A order the the recent just to deal. January it happened am if increases not it, price said is what sure of that are And inflation I secondly you shares price fourth the year? using steel for steel if you apologize inflation you are for or I before do, quarter if but using, the price what's you 'XX? new

Barry Pennypacker

and we I regards should. our put orders the much pricing we the they have where pricing fourth trending new get thought can in we in quarter. to pricing are the place put in for Well say year. And But that with didn’t are

can... Now as steel as David far inflation

David Antoniuk

I would say offset what is cost what with philosophy just back go generally that I'll input to our is price. to and

So, need what we actively look we to where at our steel requirements do are and to with we pricing. relative

not relevant as marketplace. think we as be is within changes the it's going where address it's the we So, probably how to

Larry De Maria

higher But guess? 'XX its obviously are than I you assuming

David Antoniuk

that Yes, correct. Absolutely. is

Larry De Maria

quoting categories And anything that its have seeing about quoting [indiscernible] and crawlers would or those them comment secondly, on I back to talked curious you just come if are you really or need recovery given and the any the are say like you speak rubber in to America? come seeing broad-based those the infrastructure ground if infrastructure, back? to moving the market North hit in Or the to so for you in there is with cranes

Barry Pennypacker

that someone question in I'll seeing I'm of glad increases Yes, lines. that finally both are we asked quoting say activity product those in because

future. in into in the and plus But which its But our positive. is backlog is big hasn’t orders in that very translated with the improving coming yet. back it are a So activity us itself for crawlers RTs [indiscernible] particular

Operator

will next Elliott Stifel. with Stanley to go We

Stanley Elliott

the points said or that coming on back the XXX you is the apologies are on if baking crawler that basis RTs and terms already. much margin Question of you is in I in opportunity

Barry Pennypacker

and no not did I I'm not.

Stanley Elliott

-- firming think sort improving like in markets working bit, little have improvement you Perfect. we of we And done on think what With capital coming working business. the the capital they're then of a the job looking should of nice secondly, about level about how up guys do a year? really

David Antoniuk

turns say, Yeah. ourselves That's goal. a I Stanley we’ve and a objective prided half our stated by improving turn the of would year. a been at on stated always ours inventory that, looking

a also that receivables programs well. doing And in different basis quicker that. regard on as we have underway to we’re our monetize So,

we the relationship the buy vendors how just very things. are with those And them can work we say long-term and two looking relationship. with for in partner I’d versus a closely value obviously, So, sell key at

Operator

we’ll Jeffries follow-up. go And Steve for to Volkman with

Steve Volkman

Dave, Yeah. like to cash in XXXX. just what looks ask wanted I you

you that So, just I to flush that, do out? maybe but think started just

David Antoniuk

but up cash obviously, XXXX, premature Hey, better. breakeven little we looked in doing for we would Steve, I say ended in and it’s a that, year this lot a at

So, anticipated. we we probably did better than

a working perhaps. XXXX volume So, just say on the capital away little depends relative probably taken that. it's bit from to the I’d And and it commitment

of in allow but as the generate to cash make be about is So, be no I syndicate the we're biggest that's rate our the which those. inventory know, refinance wildcard you our due $XXX can can our type notes want around, or callable get number anything get it. to comes because Cash we best in us mistake we XXXX trying that and million to when going best in that position one think we of February to is within to our to priority, hands is monetizing paramount we

anticipating in positive, to at don't point So, I'm be being time. short, I'd degree this say but going I negative. Yeah. long the can't and to I of say it’s that that see positive, we're

Steve Volkman

Great. those was I talking too. notes Yeah, about

and you thank So, that's it.

Operator

And over remarks. would session. to back the for any Ion to I conference Mr. that like closing question-and-answer concludes our turn Warner

Ion Warner

Thank you.

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

Operator

today’s thank And for conference. you concludes that We participation. your

disconnect. You may now

The Manitowoc Company, Inc. (MTW) 9 Feb 182017 Q4 Earnings call transcript