MTW - Earnings call transcript Q2 2021 | The Manitowoc Company, Inc.

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Operator

Good day, everyone, and welcome to Manitowoc Company Second Quarter 2021 Earnings Call. Today's call is being recorded. 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, sir.

Ion Warner

Good morning, everyone, and welcome to the Manitowoc conference call to review the company's second quarter 2021 financial performance and business update, as outlined in last evening's press release. today Dave Ravenscroft, and Antoniuk, Officer. call Executive and Chief the and Officer Executive on are President Aaron Chief Financial Participating Vice President webcast Events and be which Relations Today's of Presentations. slide the section under in Investor can website our a includes found presentation,

would opportunity questions to reserve I an to the everyone ask a and for call. return one this queue Please slide prepared time that to turn has request will provided material our two. and answers and to We our their questions. Please you the for ensure in after Safe to questions remarks. like limit your to statement Harbor follow-up note

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

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

Aaron Ravenscroft

performance has challenges a proud pandemic. big extremely performed. everyone. supply a several I second great Thank To you, a cyber and COVID-XX morning, team continuing quarter. how of to on in team Ian, We spite and the incident disruptions, slide the of which Please of included financial chain three. to strong like move our good a impact begin, I congratulate delivered security would am

acquisition announced a than results, we in the expected to our better addition over In decade. financial first

a continues mature. we growth-oriented Manitowoc's for to culture I'm excellence how to company, pivot excited see to As

able and finally great As and person all was States team members in It Grove, of was meet manufacturing to of the Led Typically to to improvements accelerate. to services flow to our in been XX multiple struggle past productivity, during in internal Standard the I improvements and supplier. the the the continues France McMurdy, Shady processes the campus; they've supplier in as impressed In years the for and bending, implementation value our and as cutting, continues fabrication Grove Shady stream. Portugal. schedules. levels production was inventory laser struggling able over months, safety, by is accomplish quarter, meet restrictions suppliers our TPM, piece Work, inventory their one changes in-house operational in Way shared Five dramatic with with best. to United drive Manitowoc to Tom our that ago, and ease the they've such team and one are was welding of Using made delivery Grove, Shady our they Europe this SMED, turns I visit on-time this observe machining, facilities today, delivery. by manage a COVID - our

shop everything restaurants. quality, impressive planning. in planning, called from resulted on floor The old years our Jean France, implementing organized has Charlieu kitting easy the shop welding of has the is led cycle an to fabricate for ago, [ph], set leading the the loved and making the move his system four turnaround They've star XX% in times. location the Charlieu how five an this also team a France. automated my for I'm lean to on production facilities. And one and team school to is paper, implemented and over internal pivots, team TPM. but in digitalizing of team of has to Moving be should took the an reduction Luc cleanliness warehouse which our kitchens most maintenance standard rivals Piveteau

to During I literally standing the I what the and me on in of quality ready cells an iPad before my behind manager done. the was quality visit, help pressed button one realized I'd

In cutting this are that addition, tubes. in significant project fully up most costs, material jig benefit welding handling time creation and of to our complete the inventory tubes to The automating used process is is of for on team the reduce save kits fabrication.

standard run to how Way a basis. a culture of has on Manitowoc For done to job [indiscernible] facility communicate on the the phenomenal effectively setting daily the

invested in expand Baltar, Lastly, to $X recently, few visited I the manufacturing and most we've throughout million over Portugal, facility years our where the last footprint.

of consolidated into our Portugal Baltar. operations been have All in

of we've reduced our manufacturing cranes created transitioned the models this led that revamped on culture top-slewing and important, launched the Through This factory like the Way. larger but while XXX it XXX. equally team MDT of crane from power the recently has we XXX, Manitowoc implementation safety Moulins focusing [indiscernible] Baltar by process, capacity Moulins the addition, completely our facility. In the and cost, a few to smaller has recently manufacture transition has

all intrigued dynamics better, the that COVID the our regions, Please XX% situation quarters team the that the the in slewing four. Overall, by market, acceleration say the of the rewarding create to now by the cycle strength in the experienced a operators cabinets. with a frankly, reducing major the to lockdowns flow the all with top the to of European Through made one overhead be aback saw COVID a trolley replaced with is time With team orders rebound. to impressive XX%. the facility big tower flow And I cranes by market how $XXX This job the We market. assembly to strength of for Way. Manitowoc one as a for timing in piece the taken has This a Before couldn't line second from next the was remain pulled assembly organization quarter, challenged has hit, and bad It's done. one-piece congratulation in part fair slide most crane of looks. end markets last and in cab Kaizen, station of it's very well I million large A with been how the is our cell number see electronic of team a system. mechanism. this I the the we the although to few continued. by move fashion,

tower six Our been last as the or it's crane business region strong is five as in in the years.

Asia, lagging. although slowed the months. However, is must demand, during crane the In European strong has recovery summer continue see of to market that mobile say China I the still we

infrastructure cranes results good and Finally, with the in overall the Americas, the years. positive any and bill the government may We ended quarter for the backlog to we remain of post coming will XXX demand improving provide globally. a first that continues the for tailwind business pass about million

Before Relations on the make I homepage. Dave, like is our call our latest handing which to aware you to Report, Investor would Corporate available over of Sustainability

significant to strides last Dave? I'll the further made strategy Way. With to Dave details integrating we've year, [ph] our with and our on The pass into that, Over it our EST results. provide it system operating Manitowoc financial

Dave Antoniuk

Thanks, Aaron and morning, good everyone.

five. slide to move Let's

of driven up Our exacerbated period and customer segments, to currency or increase basis, $XXX strong million to orders a indicates by and impact than significant market the regions. in the all markets Seasonally, COVID. $XXX first million second were Orders due from million. year. quarter, orders same momentum due last by Sequentially, in of second $XXX orders all was within quarter demand of by decline higher and our order neutral improved prior million, the improved On to the each improving XXX%, QX compared an totaled year's which in come conditions India steady quarter lower orders the Europe our typically [ph]. $XX Americas in in region,

shippable up backlog neutral basis. our on a currency was year ship to segments Backlog increased Compared million XX The or the a we is increase a over sales an over of year-over-year combination favorably Net a the of COVID prior year-end, foreign $XXX neutral June in backlog backlog to and from in changes the the sales quarter low the increased year as in coupled million higher were from across XX% rates. with basis, mentioned X% of resulted of XX%. impact. the the challenges second currency million, year. the by XXX with prior from and quarter in exchange Our year Aaron, up Notwithstanding abnormally achieved XX% XX% net $XXX a up scheduled within sales XX% quarter by impacted and on all currency XX% ago. a increase entering result

reportable increases All sales. segments of our in reported

of year-over-year. amount the This increased Second million of $X write-off related of included receivable venture quarter costs. and from a ES&A other to joint cost our acquisition-related Chinese note XXXX the $XX divestiture by million expenses

unfavorable with were expenses higher $XX expense increase by Excluding these foreign rates. coupled compensation EG&A items, adjusted short-term million currency the primarily incentive driven exchange in

of $XX volumes EBITDA product were adjusted year-over-year million and a quarter Our main second Higher $XX the increased drivers increase. year-over-year. the favorable for mix million the

In the our addition, flow on achieved we sales. incremental through XX%

As second favorable to improved basis of over fixed improved product profound X.X%, performance, will EBITDA on and higher have mix, input half which prior were mainly the of These costs due over adjusted a percentage a XXX a costs, to higher our leveraging of points sales, increase This volume. gains an partly year. margin impact our by was manufacturing sales results. the offset

expenditures second million level quarter increased XXXX. half the the compared of prior to reflecting of higher $X the $XX Second million depreciation capital year, of in

quarter second $X million, certain Our was provision non-US in income the by and in was income for taxes driven jurisdictions.

the As jurisdictions. countries, for income to therefore, and are allowances in pre-tax not expense in offset related and a profitable losses tax certain Manitowoc has tax available reminder, countries established valuation pre-tax those

share On the $X.XX per improved $X.XX diluted GAAP from of in Our per adjusted prior quarter $X.XX. earnings year. the earnings share basis, diluted by was an

$X have in generated from Capital resulting $XX of flow amounted free end. and $XXX million of ended to Moving prior to and in $X with in compared million operating the in of $XX flow up cash flat cash cash spending $XX $X March XX Year-to-date, balance the cash million, from generated liquidity, our quarter the we cash million, balance with of year. activities to free million of quarter a the year use a million. million quarter we

as June Our of XX, borrowings with total on $XXX our ABL. outstanding was million no liquidity,

the Without of million discussed during with a to be we would as times combination the acquisition facility. $XXX cash As at hand contribution, utilizing considering of our of benefit the X.X is fund EBITDA and debt our our acquisition July business ABL the the purchase leverage call June the crane net incremental plan XX, H&E on price. on availability XX of H&E

million $XX tax approximately business six, capital X.XXX Moving $X.XXX billion; expense, other interest half to million pending to Equipment million; we excludes Services the approximately acquisition $XX excluding as items; income discrete adjusted $XX $XX million, million H&E by costs of full $XX guidance. million impact associated further approximately the we slide approximately of is to to to second have input guidance $XXX cranes billion regard Please approximately million. to the any With $XXX year $XX depreciation, EBITDA, year, will note impacted $XX follows; and that million; be expense, million; XXXX and and pressures. of with reinstated the revenue, to inflationary continuation rising approximately expenditures,

We of price levels unprecedented but costs anticipate have will remainder we the the that not do these implemented XXXX. for increases, rising actions input of fully offset

I In the new is that, May, increases are summarize, To pre-COVID to investment the salary employees Aaron. normalizing continue in to in activity our programs. back to our to we turn expenses we accelerate development second will US-based and addition, half, provided ES&A call travel levels. normalizing With now product in

Aaron Ravenscroft

work I and challenges, remain be And aftermarket Number business new business. we America. you, three, return skilled transition. XXXX our a Europe. in build in our growth number and one, in to our out chain Number slide rental This North a to inflationary our expand all China four normal grow to year labor tower supply remains Thank Nevertheless, Belton our Please shortages. pressure road Number calls, as new strategic and four, In terrains. two, accelerate committed said business through crane crane initiatives. seven. activities tower development short-term aftermarket of past case, deal ongoing COVID-XX, with we Dave. our from move would and product

our our rent slide crane announcement service, Manitowoc XXX network, is business the has obtain a executing The us platform sales, month's this to a service strategy. Moving Grove, of world. new for when are and long-term product branches crane acquisition to years result similar team before service years largest such option. the a car technicians approximately balance. customer a is variety arrangements, rents sales of the XX eight. few members, grow and regarding used the as the of two are crane through had one a an group of the Through our course, lease perfect for a as a how which acquisition, then and provides financing questions would in five purchasing purchase not outstanding to or options An including a folks parts, as of competing is Last RPOs example which to last our we case. acquisition a strong Manitowoc individual about in of this customers, absolutely business. H&E's we is growth how will often buyout RPO execute call, This acquisition. the to with This On referred our

more assist and financing more their move fleet goal customers machines to with manage Our is and to iron. effectively ultimately help more greater sell options

our about remains improvements in for talked the the our locations. growth culture. While already strategy long-term significant Way the Manitowoc made I've fuel manufacturing being our is focused,

begun manufacturing. outside lean have expand use We the of additionally techniques to of

how acquisition, management processes, integration we back our utilized call project crane we [ph]. assets utilize Manitowoc the team are tool flow Way lean And annual diagrams to legal Europe. office, HR of proxy to tower due we process our administrative statement. our teams using our diligence that the in ATEs a will draft aspects we our and During And further and optimize improve

short-term commitment being about an to said, financial margins, of improvement. half will gears our particularly Difficulty]. unwavering [Technical inflation second chain I the Difficulty] disruptions, have optimistic to am We the cranes year. supply Switching in continuous [Technical That performance,

is impacting of of in our spending million per discretionary approximately quarter, prices last steel primarily second logistics for million are over communicated ton, $XX headwind per $XXXX XX-year we steel, and which transportation, XX of year-over-year average half. well metric cost ton. trading the reminder, now Commodity and approximately ahead As metric $XXX

rise. for ocean and continues transportation freight to costs, As land

from be times. to XXXX. the example, increases Russia cost For the cranes These four of shipping China in increased cost of has half unavoidable will second

Manitowoc long-term our growth fuel our is for the strategy culture. the focused, While Way remains

to Sorry taking The is which about has team the input actions pricing increased offset serve will that. adjust to significant costs. and

However, versus act. of we we difficult price is increases crane it's active will pressure, and predict experienced crane remain competitive fully It's effectively cost increases. tough we between market on extent delay when pricing when these The a and inflationary experience realize balancing deals. to a the

of full-year through XX% our expected, will is This strong due had my the to way saying can adjusted be you achieved EBITDA expected we deduce have dynamics In normal that time in basis than Dave second our margins to from guidance, exciting not it's an is our As to the Manitowoc. be be as annual at XX% earnings our we revenue flow outlined. closing, but of on a will discussed. tighter, half have

that growth crane of please line in for operator, face Although challenges the execution on we questions. With is demand will will supply in are the next the enterprise. quarters, our long-term on mode couple serious and upswing we value the our strategy, chain drive full which open

Operator

Volkmann from Jefferies. first [Operator you. We question the Instructions] at Stephen take Thank

Stephen Volkmann

wonder morning, you quarter tell, Good it price actually was did is more to but supplier this in I Great. Aaron, constraints, your cost a mentioned limit or of everybody. the that issue? production hard

Aaron Ravenscroft

number. ship a it's a supply the to chain combination. disruptions quarter, did where say wasn't able second but weren't huge have I'd cranes, we it in few of terms a we In some

bigger challenges second the half. think I are the in

Stephen Volkmann

Okay.

are in sort you half? the of actual so weigh expecting issues And second have shipments to supplier on

Aaron Ravenscroft

whack-a-mole Yeah, able today challenges on it's game with the manage. we've difficulty with semiconductor to the been a mean, comfortable we've I what issues. The very is of been

Stephen Volkmann

Understood.

it normalizes have the Are you those again. And more the of cost really or don't through have? through that on the increases a a sufficient is costs, just put you've I are if this to that sense sort then like And when XXXX price sounds so, great mean, of price putting are now, cover inflation normal of year? known we price kind Okay.

Aaron Ravenscroft

I think to is XXXX or normalized, more rise. as tough I say hope continue to costs that so but Yeah, prices it's

we the good of now, timing pricing our right the where is, half just feel the backlog. of second I is really have the As about in difficulty

Stephen Volkmann

of the said shifts And Okay. much know year? next end? how before I you in XX% year that backlog

Aaron Ravenscroft

end, year By Steve.

Stephen Volkmann

it end, year Super. okay. pass by on. XX% I will

Aaron Ravenscroft

Steve. Thanks,

Operator

take [Operator from the will Dobre Baird. next Instructions] We Mig at question

Aaron Ravenscroft

Mig. morning, Good

Mig Dobre

you Good for question. taking the Thank morning.

this on increases you quarter and the a component, for little the normal figure of larger. it things last drag you maybe at steel-related about XX million I kind salary time like much And So, way just can a but $XX more sounds million cost, cost talked the us the back clarification is, give like this larger, maybe the how the sense it coming is discretionary into like. is business, understood

at costs freight have, things figure, and looking that this forth. so like you and on incremental I'm confirm so other really So any and might

this maybe back understand a on margins in to better little half. So, the the help

Aaron Ravenscroft

Okay.

the government million, you So it. the describe with of through XX basically one-time we That's didn't and were some some the by of that's let's that benefits year outlaid because manage start costs easy other the of last one, COVID. to have the exactly benefits how

sort levels. are back to those normal of So,

really terms we the second we'd the the in see did million, bit much I We moved in to of than we impact the would impact did the half. quarter. second have okay that here of $XX In a some say that thought We is, expected. quarter, better all but difference it's second

they would third time in XX third really really second additional the in development it's then baked costs quarter; don't some last new for SG&A I additional second, say start some half. costs, the and weighted over of and talked fourth heavily in we until And fourth and kick have to in terms initiatives quarter. head we that product our million the more I about would that, thought So today, the to

Mig Dobre

I'm then guess can here when X% the guidance, as, call you say, looking follow up, just of of environment sort it, my margin on, is this it, if billion is the I and Okay. $XX $X.X million offset revenue. a I current cost treat is implied at factor of the the just of shy let's Well,

of $X.X that And goal? what's your to billion margins closer do was you. to strategy forward that double-digit that to still on of do for business path that back we outlined your going predecessor, you else And sized EBITDA So about how to deliver is that to relative your progress by to the there a margin the $X.X Thank kind to target? to get Aaron, is think this getting actually kind us what there? billion,

Aaron Ravenscroft

Yeah.

sales So do my quite real old view, we objective is $X.X we we to got get we're business. my Are to but, business our EBITDA the program drive can we overall billion, the our mean, is grow new really how it drive do in money me, service, the EBITDA. sure we've and the we was of going Mig, little XX to means and trying And product that's while to To more how number. so value called, same XX% a by invest how that get the up getting developments frankly? grow real is the how I SG&A, XX, do that to

we to So a the number. path same continue have that get add? XX% anything on more do to little probably Dave, you we to volume need but

Mig Dobre

Go ahead.

Dave Antoniuk

Mig. ahead, Go

Mig Dobre

still this or in do generate efficiency, Well, that consolidating been that way me, to you're get needing you're different to to altered past. in I'm done it's you've for in endorsing need us because if guys to framework the like has target that investments really it the sound to understand order past going facilities, or used if trying whatever to done something doesn't through whether you've else the target, business, you're that in to or have by the the you

to want just clarify So this.

Aaron Ravenscroft

get a we Well, want by there while won't able just I day, cutting hit forever. you for to be the hit could it costs, don't because number to

the you and order mean, real the back we long have engineering term cut prototypes SG&A value the that's cut back when So, business. the for drive best and altering got business of business, I to don't look could and sure, in at but think thing I back

continue step in we future to a is we view to of manage our costs little take I'd a our and but more hard product don't to my back terms development. invest guess, work I the make So, in like sure

Mig Dobre

you. Thank enough. fair Okay,

Aaron Ravenscroft

Thanks, Mig.

Operator

Sachs. The next Jerry Revich comes Goldman at question from

Ashok Sivamohan

details Hi, on field Ashok provide on the you for you're by capacity utilization this cranes is for in I'm wondering Jerry Revich. seeing Sivamohan for region? what if can any

Aaron Ravenscroft

we normalized typically tail States, don't for talk to cranes it's pick But Yeah, is to constructions that more it so new I starting sort to up utilization is being terrains. months. I natural summer, of into it all because I is the business. on it feel Europe tower But through utilization. terms conservative just players, two step again, levels sort that's And Europe, I'd back, the driving if United I of Asia-Pac, operators it's always in the really think seen little I see where in good; the some the think good the and pretty don't continues in summertime good look, up picks in get recently which Korea region. But say jumping about back strong, the get it's combination have utilization has strong, manage them by two of think muted while balance are In and really total, last about a of more halves interest is machines, crane where going. is in to on the been where year the their you why sheet, overall China, we've about big this super then you a in which large

Ashok Sivamohan

sort and how of Okay. if in orders, just can evolved? terms on of wondering what I'm any you throughout the provide the cadence then color the was that And quarter,

Aaron Ravenscroft

it Yeah, surprisingly that month month one weak. wasn't was surprisingly pretty one large throughout quarter. was that the consistent was say There or I'd

Ashok Sivamohan

Okay. Thank you.

Aaron Ravenscroft

Thank you.

Operator

from The Duignan Ann comes Morgan. JP next at question

Aaron Ravenscroft

morning, Good Ann.

Ann Duignan

fundamentals strength little down And China color in your in fundamentals? how that Good of? little the a months, expand a we to tower aware particular with in own cranes and slowing will Europe, bit self-help Europe much trying is then could versus expand greatly that can guess that should your seeing comments you again, anything is morning. just you provide And appreciated. the on last of that Maybe be your be I two slow on both you're bit. Any on

Aaron Ravenscroft

Yep.

self in It because become So taking the I almost crane just has tower problematic we're scheduled help. the business, build mean, it's slots.

it there's to several demand good the down up, the strength the off from so economic for is excavators you So In that years, really last information the pick pulling of of points, the one that I'd if starting construction, in indicators that's business. instance, it at lots been look is back different it's really market but France, were had now points the and of couple are I we XX%. China, of heard think

to that when across confirmed in seems happening, checked team felt too and has versus different that it, a down. too, Chinese points between seen I've so get data that prop the also be the yet. I but when construction surprised the it have grapevine, you action delay it tower takes slowed to crane seems I've they my has Now, China we overall you it's up couple that but heard help it slowed haven't there's and down and the government wouldn't always that through a know

Ann Duignan

Okay.

that from or - what your you're with the others, more your like comments what hearing as seeing you're China? field So China actually to are Is equipment in opposed anecdotal on in

Aaron Ravenscroft

is and more share, say issue we behavior issue conservative. But effective, change some haven't balance been The we've I'd seen such making not more that we're mean, managing sheet. paid is we much. as so little we around have our the where of we a upfront and get have that sure and receivables our I protecting that we see Yeah, low it

I for the that real. have are rumors So the hear have good sources I which data I think we of some points

Ann Duignan

are always guess, anyway. real, I Rumors

margin? at your that all double-digit follow the get to have question, achieve around from improving revenue to like it mind a target feel now currently? order is up would double-digit totally here you do have you just that business dependent Just or you to on on a as where's the in Or in altering head margin

Aaron Ravenscroft

problematic $X as [Technical I Yeah, Difficulty]. felt normalized had always we decent good us. But If This as is we costing pricing targeted. is mix that mean, is for billion and any.

Operator

to Ms. another question. would you like

Ann Duignan

lost I think we him.

Aaron Ravenscroft

I sorry, am Ann. think I lost we

Ann Duignan

Can you hear me?

Aaron Ravenscroft

Yep.

Ann Duignan

can't - lost actually. we I - you I like

Aaron Ravenscroft

Can you hear us?

Ann Duignan

hear can We you now.

Operator

hear you. Yes, can I

Aaron Ravenscroft

answer was, I so of normalized target situation. question, that for - we're Okay, challenge Mix always to what Ann, any have this - as $X think is the and to billion good number costing I pricing assume my that your we to to XX%. back is a

Ann Duignan

I I'll Thanks. appreciate comments. line. get back in Okay, the

Aaron Ravenscroft

Ann. Thanks,

Operator

Credit from question comes Suisse. The Jamie next Cook at

Jamie Cook

the I Hi, talk or reflects what about reacting One, guess put increases? good they're usually increases to price say. and of whereas is guess morning. questions. I positive slightly guys price sound guess, that backlog just percent just of the the sort balanced I And two very your you're can then you about downbeat, I the markets, through market, how what Aaron, for you, would you you

another how So can year they're your talking to of market? you see of about directionally, you're optimistic we the you Are talk Thanks. sort XXXX, as just growth? could customers about that thinking

Aaron Ravenscroft

the the implemented answering we pricing. on first, I difficulty question in that the way have So that that pricing, just is

actually for So, in when inflation sure business, three the not you and you increases. be too always instance, tower the crane make done price of want the far do ahead to we've because price you're measured increases,

especially cover entire in pretty some us back I got good, in impact increases quarter, looking customers, of H&E it's in the what, to orders earlier pike too. needed they're talk price positivity, the of Europe. tough steel the coming have that with think think question, Bauma With down some the year. we answer to pretty you I yeah, we've to that the don't positive particularly because respect mode, I acquisition for forward when increases, the I feel Really know So to of in half right to next things the fourth direction. And good my moving a at

Jamie Cook

the market increases? the price is the accepting competition Is following? And

Aaron Ravenscroft

and yes say I'd yes. Yeah,

Jamie Cook

Thank you. Okay, great.

Aaron Ravenscroft

Thank you.

Operator

Jefferies. at next Stephen The Volkmann question comes from

Dave Antoniuk

Steve. Hi,

Stephen Volkmann

for the Thanks follow taking guys. up. Hey

business Just the to how the quarter? parts service a one, and was quick in

Aaron Ravenscroft

up Yeah, basis, that say so, I a on XX% would year-to-date we're Steve, year-over-year.

Stephen Volkmann

good. Okay,

think about first have I were the only that. if quarter, actually you right, X% in I

a So, acceleration. good that's

Aaron Ravenscroft

a we quarter. had Yeah, good

Stephen Volkmann

then And great. to questions, I here. we're had I a round Okay, two big guess on Aaron, couple since already of picture

where been there The I thing whipsawing something. for cost chance, of impact that first myself. the you industries this of of have one and are of chance some is industry right, I'm us like, problem, balancing around, gets way seeing now? right consolidates kind sort for, this it this dating over don't whole years people really has are think, better. price But this better lots all is, that or as have because XX feels such time, or there maybe Any escalators any de-escalators

Aaron Ravenscroft

that's some steel. that transmissions a doesn't for for question. tough I business I one be us. better aren't the tremendous think it of look gut is our of mean, we crane think the volumes engines get in we challenges My I Well, whether at or says, it or when you have the suppliers have,

gets guess. hard that So, believe it much Dave, thinking? what better, I to your it's are

Stephen Volkmann

Okay.

Dave Antoniuk

would agree. Yeah. I Yeah,

Stephen Volkmann

the and the very you But And another various of very guys maybe then is I kind inventory, been pieces Okay. manufacturing that, you've obviously, of big question. in on evil, lean and of that and view focused all know Aaron, picture right. world

parts a kind best whether can having pendulum a in one inventory piece whatever do I has And And possible you all this and so And tap little flow this a far wonder or the it's a just low do fill could orders. and sort we competitive middle inventory, environment of hour. that. advantage little environment, rate in too sort our of it's the be inventory hour more if a of this, in swung actually perhaps back in stuff, real interest little little But we to and means of like terms managing really that to bit. fact, can minimize by a

Aaron Ravenscroft

think we we the pulled that disadvantage, for a goal exactly how we've My our manage of to I the the fourth because what at in fourth quarter. next a factories, love that off beginning ourselves put Steve, on to mean, where the try particularly my and because we January changed that like the question, times I'd year quarter. lot I an because head in as dive that's and we a of be number. to believe of inventory little I bit is will this our typically, inventory is February, at strong. year And end far

it But So maybe we say year in exactly what like I'd on to of a to you it. a like increase with we're I'm add spot front said. XXX normally five bit. this under I'd and that

get having of beginning into with finished units competitive the and some very for position. having goods, we to I think more the would and the respect beneficial as in pipeline some year be more our us

Stephen Volkmann

Awesome, thank you.

Aaron Ravenscroft

Thanks, Steve.

Operator

next DeMaria comes Larry from at The William Blair. question

Larry DeMaria

morning, Good everybody. Thanks.

Aaron Ravenscroft

morning, Good Larry.

Larry DeMaria

obviously in there crane expect a build everything. the it the volume maybe as on seems normalize channel, follow be could that up to next the Wanted higher year is It inventory question. tight change in you Do like categories? some supply first of

Aaron Ravenscroft

year, about tell it's And I'd is say early next what to good dealer too I inventory now in think. our right coming is out shape.

Larry DeMaria

tight. not Okay, so it's super

And understand, with last Okay. the But too, of can't to market, price in towards forward orders. or strong, clearly put can't to a going engineered high making why question, you're so have obviously, we not strong or especially second power little a And, think cost you back is in surcharges guys go like that - kind products, secondly, struggled of and put bit the surcharges? said, that's put then, I putting strong in in half. escalators but or is if you in guess and the it's competition escalators super Obviously, indicated quality, beneficial, more. balance the maybe about highly shift you you

Aaron Ravenscroft

say. There our I backlog. wouldn't our never customers. businesses by will be would the replace accepted competitive It that Yeah,

the think issue is biggest - I

Larry DeMaria

Going How we forward, about forward? going can see contracts? escalator

Aaron Ravenscroft

and you course in But the normal the is X that we've not situation, million do try on things might business, know years when orders and going to protect We come have someone some - able that's that that it to be it million, usually longer of X we'd have tried some an costs - do order buy want different but difficulty place ourselves. to to a two $X to things contain goes million. in to in crane, you're you

Larry DeMaria

Thank All All Okay. you. right. right.

Aaron Ravenscroft

Larry. Thanks,

Operator

Fisher at comes UBS. The from next question Steven

Steven Fisher

morning, Good Hi. guys.

Aaron Ravenscroft

morning, Good Steve.

Steven Fisher

this on your market What's or for I haven't what this could and next happening one but you year and earlier missed if the already? up there so? about morning. expectations also what factor Just does go, are that over market covered and been follow quoting curious gas in tell it what important where and sure you you're seeing for Good mix. Not an I I'm demand if oil here. historically guess has

Aaron Ravenscroft

for longest into was just oil ago traded that up. the is two feedback they down weeks I add get punished sounds into keeps the market. it been so have creeping slowly in time, And the people the if Yeah, like time, oil rigs and companies every - patch publicly

So business, general it's creep that person because continue and folks cycle. going from course, people at and you've demand, normal and But the talked with tone they restrictive. then, interesting, to I dislocation up feel just in it's oil I've it's you and to been a that of talked have to, up, another to some the point, this end yesterday got

what there as in hearing that demand. creep our I and actually pressure And that and be the that's for much contacts? So gas good our oil up and from continue I'm will prices against newspapers, customers will to our is think

Steven Fisher

Are a side production the you high prices? on of either quoting process derivative as larger actually the maybe on or on industry side, seeing oil

Aaron Ravenscroft

math saw to mean good it's and dealers doesn't a to And talked that but kicked at good that couple tentative it off were so. and pull that really they're still doing there down the But looking a they it's quoting. are yet. the yet, of our there trigger some sign folks I

Steven Fisher

it. Got

Okay. Very helpful. you. Thank

Aaron Ravenscroft

Thanks.

Operator

question the from Baird. [Operator Instructions] We Mig next Dobre at take would

Mig Dobre

follow Hey, up. for thanks the

to you're is we and third clarify your quarter than third more, this the seasonality or, how think backlog it see the I stronger is guidance at a quarter? Just of still the little half, where revenue looking for fourth versus mean, about kind different normal as the back fourth the do that sequentially should we deliveries year? know, scheduled I don't

Aaron Ravenscroft

some the is shutdowns. holidays I driven of it mean, by August with the Yeah,

I same. think the follow So, it'll

Mig Dobre

perspective, Okay, a fourth can margin us what's like in third. you quarter, your third stronger fourth And embedded sense, a give quarter the then from the guidance? so versus than

Dave Antoniuk

QX from gave I it's kind anticipate of it's a things, to the the only do of to Yeah, because and that qX, between in a say, we're of going bit have quarterly margins, everything, the We that so, the are going not to could QX. I impact for on to why we just chain - and speaking, add QX, because which the the that. two. throughout but way And the extent. going in Mig, flow say a we what through be that year. I'd a be because impacting We're the higher see is to to of going a say equally I supply year, moving said, some amount backlog costs wouldn't of of Aaron being margin think target bit higher I'd and the through significant remainder be of issues to we comment going generally difference

Mig Dobre

the third, I the was gets be as in to just wondering the through thinking the materials Yeah, if cost P&L. to I actually mean, that's might headwind somehow flowing fourth the quarter how tougher relative what

Dave Antoniuk

a bit. A bit, say would right. I

Mig Dobre

quarter as is that of there as start we Are similar 'XX? or reason think or is the last XXXX issues, pretty any we for about going my slow, things to that think to coming these me question is, should get fourth then lapping - is base pricing Because in quarter? I'm through, better XXXX, of thinking the first

Dave Antoniuk

yet. pretty Yeah, were this I'd it that think I so - sort only say we time out had frame we and about when never it's visibility played it and talking - is February good of hasn't plateaued

even We good early any tell. to think have I yet. it's too to consider of XXXX indicators don't So

Mig Dobre

Okay, thank you.

Dave Antoniuk

Mig. Thanks,

Operator

no It turn appears Warner, further call time. Mr. this questions any the closing to back additional I'd to for there or you are at like remarks.

Ion Warner

morning note hearing the website Before - XXXX be forward joining at today you. call, investor with and to please The we quarter Company. you the speaking for replay Thank your from everyone for that concludes later of will continuing conference this next www.manitowoc.com. quarter. today's you section look us call of our accessing We relations our Manitowoc available second by Thank

Operator

for Thank This you concludes your participation. today's call.

now may You disconnect.

The Manitowoc Company, Inc. (MTW) 6 Aug 212021 Q2 Earnings call transcript