Brian Regan: Yes. I mean I think, as you know, mix is a huge component for us. So $20 million, we narrowed it down and we raised the bottom end $10 million this quarter. So yes, I think we feel comfortable that, that $20 million is a reasonable range on the $50 million of revenue spread based on the mix changes. And as Aaron pointed out, there’s still a lot of uncertainty around vessels going into the fourth quarter. So that’s contributing to some of the concern or guiding to the low end on our free cash flow numbers.
Aaron Ravenscroft: I mean, we essentially have no backlog in tower crane business so we just hand them out.
Brian Regan: Yes. And that contributes — that’s one of our highest margin businesses, especially when you consider the underutilization that’s happening currently.
Mig Dobre: From a price/cost standpoint or really all the other items that you guys have to manage on the cost side, how are you looking? And what’s been happening here through the year? Is that positive? Because I’m presuming it’s positive. Price/cost gap starting to narrow? Is that a factor into in Q4? Or is it just mix?
Aaron Ravenscroft: Yes, I would say that has no impact on the fourth quarter. You might comment on cost price but it’s generally normalized. And it’s interesting because sort of the conversations have shifted. Now the conversations are more about, in fact, this dollar is so strong and we have competitors coming from areas where they have weak currency like the yen where the tower crane business is feel super competitive because of demand low and aggressive Chinese competition in places like Middle East. So as I say, I think we’re past that now for the most part. And we’re back to having more normal conversations around how do we tell us so we get prices up.
Operator: Your next question comes from the line of Tami Zakaria of JPMorgan.
Unidentified Analyst: This is Chaya [ph] on for Tami. For our first question, can you provide a little bit more color on your backlog? And maybe if you could talk about how they’re trending by region or by product?
Brian Regan: Yes. As we mentioned, the majority of our backlog is in the U.S. So that hasn’t changed from last quarter. And we don’t give backlog product by region.
Unidentified Analyst: Okay. Got it. And then just a quick follow-up. What are the key areas where you continue to see most cost inflation?
Aaron Ravenscroft: In terms of most cost inflation, I mean labor is still a challenge and a concern, especially with some of the news you’ve seen in the United States.
Brian Regan: So we see it through a lot of the fabricated parts where our suppliers are adding value and labor plays into that. So that’s still the biggest piece.
Aaron Ravenscroft: I think the other thing I’d add is that a lot of folks look at the normal steel pricing on Bloomberg and say, “Hey, it’s way down.” The biggest challenge that we have is a lot of our steel is really high end. High-strength steel that comes from a couple of specialty suppliers in Europe. And right now, they’ve got a lot of demand because of everyone building military equipment. And we have not seen those prices go down the way you’ve seen flat steel go.
Operator: We have a follow-up question from the line of Mig Dobre of Baird.
Mig Dobre: I got to say, you guys are very tight on enforcing the one question and one follow-up. So I got back in the queue because I had a couple more. So, I — given the way you’re talking about the fourth quarter guide and the implied margin, right and I appreciate the fact that the tower cranes’ backlog is extremely low, as you said. What’s the implication here for margin in the front half of ’24, right? Because the comparisons, it would strike me as being relatively difficult versus 2023.
Brian Regan: Yes. I think that’s a very fair comment. I mean that’s our concern about ’24 is that the comps in the first half related to towers and then how does the U.S. hold up.
