The Manitowoc Company, Inc. (NYSE:MTW) Q4 2023 Earnings Call Transcript

The Manitowoc Company, Inc. (NYSE:MTW) Q4 2023 Earnings Call Transcript February 15, 2024

The Manitowoc Company, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning. My name is Krista and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Manitowoc Earnings Conference Call. I will now turn the call to Ion Warner, senior Vice President, Marketing and Investor Relations. You may begin your conference. Please proceed.

Ion Warner: Good morning, everyone and welcome to The Manitowoc conference call to review the company’s fourth quarter and full-year 2023 financial performance, and business update as outlined in last evening’s press release. Participating on the call today are Aaron Ravenscroft, President and Chief Executive Officer and Brian Regan, Executive Vice President and Chief Financial Officer. Today’s webcast includes a slide presentation, which can be found in the Investor Relations section of our website under events and presentations. we will reserve time for questions and answers after our prepared remarks. I would like to request that you limit your questions to one and a follow-up, and return to the queue to ensure everyone has an opportunity to ask their questions.

please turn to slide 2. Please note our Safe Harbor statement in the material provided for this call during today’s call forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 are made based on the company’s current assessment of its markets and other factors that affect its business. However, actual results could differ materially from any implied or actual projections due to one or more of the factors among others described in the company’s latest SEC filings. The Manitowoc company does not undertake any obligation to update or revise any forward-looking statements, whether the result of new information, future events or other circumstances. and with that, I will now turn the call over to Aaron.

Aaron Ravenscroft: Thank you, Ion and good morning, everyone. Please turn to slide 3. As I look back over the last 12 months, I’m very pleased with the performance delivered by The Manitowoc team. While the specific challenges seem to ebb and flow without a doubt, 2023 was just as tough as the previous few years, although inflation seems to be mostly behind us at this point. The team worked diligently throughout the year to mitigate cost increases from our suppliers while continuing to push for the appropriate price increases. From a demand perspective, the European tower crane market was even softer than we anticipated. And fortunately, the mobile crane market, particularly in the U.S. proved to be far more resilient, considering the interest rate increases that we’ve seen.

Consequently, our team had their work cut out for them. Their hard work in achieving these results often goes unnoticed on these calls, but without their willingness to go above and beyond our performance would not be possible. Thank you to the team. For the full year, we generated slightly above $2.2 billion in sales, $175 million in adjusted EBITDA, a 23% increase year-over-year, and our adjusted EBITDA margins expanded 90 basis points to 7.9%, which is a great result when you take into account the unfavorable mix that we faced. Non-new machine sales for 2023 were $613 million, a 12% increase. Please turn to slide 4. turning our attention to The Manitowoc way, I am extremely proud of the team’s results. First and foremost, in terms of safety, we ended the year with an RIR or recordable incident rate of 1.01.

Our goal remains zero injuries, but nevertheless, it is worth noting that this is our best result in the company’s history. I attribute these results to an increased focus on interactive observations. This is essentially a structured on the job safety dialogue between supervisors and our shop floor team aimed at discussing safe and unsafe behaviors. Our interactive observations increased 70% year-over-year to 17,000 in 2023. In addition, we continue to aggressively pursue environmentally related kaizen. As a result, our waste to landfill improved 30% and our scope 1 and 2 greenhouse gas emissions intensity improved by almost 9% compared to 2022. The paint value stream at our Charlieu factory in France won our CEO Manitowoc way Award this year for the best environmental lessons learned.

Among several improvements, the team developed a digital monitoring tool to optimize scheduling to eliminate bottlenecks in the shop last line and paint workstations. The team was able to increase the capacity of the paint line by 44% while reducing the carbon footprint by 435 tons of CO2 per year, that’s equal to an annual usage of 100 gasoline powered cars. This is the power of The Manitowoc way. Actually, I would like to recognize three other award winners this year. [indiscernible] at our Charlieu factory won the Leadership Award for his work on the electromechanical value stream. I mentioned some of his achievements on the previous call. Over the last couple of years, [indiscernible]has become a real lean guru and I’ve enjoyed watching him grow as a leader.

Please turn to slide 5. For the first time, we created an award to recognize the implementation of The Manitowoc Way at our growing service locations. Our Ankeny, Iowa location won the Inaugural Award for a mobile station that they developed to complete dielectric testing on booms in the field. Previously, we had to lift the 250-pound device under the back of a flatbed truck, which wasn’t very safe. It was pretty clumsy to use and it didn’t look very professional. Now, the service technicians can simply pull the device to a crane in the field, well done to the team. Please turn to slide 6. and finally, the crawler crane value stream and Shady Grove won the award for the best kaizen. In fact, a couple of investors helped us in the early stages of this project.

In the previous process, we welded large boom inserts as one unit, building scaffolding around the part as it got larger. With the application of a little ingenuity and some elbow grease, the team made the process progressive in nature and now we weld the unit as sections. Imagine making subassemblies that are welded into the final part. This has significantly improved our safety and quality, putting our welders in a much better ergonomic position to weld apart. and as a result, improving productivity by eliminating 750 hours for the process. Great job by the team and congratulations. Please move to slide 7. turning our attention to the market. We generated orders of $476 million during the quarter and our backlog ended the year at $917 million.

While the order rate was down significantly from the anomaly of the fourth quarter of 2022, this was still a good showing, considering how slow the European tower crane market has been. on a regional basis, the Americas remains pretty steady, dealer inventory levels remain reasonable. Utilization rates and crane operators have been strong and rental rates have held. I believe that our boom truck business is in a great position for 2024. While I expect our All-Terrain and rough terrain demand to be relatively steady, even though dealer inventory is a tad heavier than we’d like. given the impending fallout from the commercial real estate market, I expect tower crane demand to be anemic. Although this market is pretty small in the Americas. in Europe, it’s a tale of two halves.

Demand for tower cranes is very, very slow. Looking at the latest housing permit data on a trailing 12-month basis, France is down 24% and Germany is down 28%. Rental rates in France for top sewing cranes have been under a lot of pressure. In addition, dealer inventory for self-directing cranes in Germany remains very high. On the other hand, demand for mobile cranes in Europe continues to hold up. Rental rates definitely inched up with the inflation and the large rental houses are well utilized and actively refreshing their fleets. Turning to the Middle East, the overall market remains robust, but we expect Turkey to be a headwind. in the aftermath of the devastating earthquakes last February, demand surged to support the three reconstruction of the areas affected.

nationally, we don’t expect this to repeat. The activity in Saudi Arabia, however continues to move forward. Not surprisingly, given the complexity and enormous scale of these projects, we have seen a few delays, but nothing to create concern. During my visit to the region in December, everyone had the same story, with the 2029 Asian Winter Games, the World Expo coming in 2030 and the World Cup in 2034; all of the major projects that have been revealed must be executed except for the line project in the own. As for the line, this continues to have high visibility with the Crown Prince and is moving forward, but we have reached a stage, where they’re grappling with how to perform so many extreme engineering feats. As a final word on Saudi, I highly recommend that you research the Six Flags Qiddiya Project.

This is one of the most impressive construction sites that I’ve ever visited. Potain cranes are being utilized to build the world’s largest and fastest roller coaster. The park is expected to open in late 2024. Construction in the era will continue well into the next decade as they build a Formula 1 racetrack and a soccer stadium, as well as the necessary accommodations. And finally, I’d like to briefly comment on Asia Pacific. After my visit in January, I felt the situation in China’s construction market is even more dire than described in the news. There are lots of cranes in the air still, but you don’t see many cranes moving on the job sites, which translates to projects being suspended. The local construction market is in a depression and I don’t think anyone knows when this will turn.

while our China revenue is immaterial on a consolidated basis, the bigger concern that I have is the level of intensity, in which Chinese manufacturers continue to expand globally. outside of China, we are starting to build momentum in Hong Kong and Singapore, South Korea similar to Europe, large commercial construction has slowed impacting tower cranes, but the heavier infrastructure markets will continue to support global crane demand. And finally, Australia continues to hold up. As long as the Australian dollar stays above $0.60 to the Euro, I expect crane demand to be solid. With that, I’ll pass it over to Brian to walk you through the financials before I close with an update on our strategy.

Brian Regan: Thanks, Aaron and good morning, everyone. Please move to slide 8. As a reminder, we entered the fourth quarter with difficult year-over-year comparables and expected unfavorable mix due to the softness in the European tower crane market. This held true and the fourth quarter results were in line with our expectations. turning to orders. During the fourth quarter, we had orders of $476 million, a decrease of 33% from a year ago. Foreign currency favorably impacted orders by $9 million. Our December 31st backlog was $917 million, a year-over-year decrease of 13% and was favorably impacted by $9 million from changes in foreign currency exchange rates. Net sales in the fourth quarter were $596 million and decreased 4% from a year ago.

The year-over-year decrease was primarily driven by softness in our European tower crane business. This impact was partially offset by global pricing efforts and product mix in the Americas. Net sales were favorably impacted $9 million from changes in foreign currency. SG&A expenses were $88 million, which included a $10 million charge related to a legal matter with the U.S. Environmental Protection Agency. Excluding the impact of this charge, SG&A expenses as a percentage of sales were 13% relatively flat year-over-year. Foreign currency unfavorably impacted SG&A expenses by $2 million year-over-year. Our adjusted EBITDA for the fourth quarter was $37 million, a decrease of 29% year-over-year. The adjusted EBITDA margin was 6.1%, a decrease of 220 basis points over the prior year, primarily due to the unfavorable product mix.

Our provision for income taxes in the quarter was $6 million. As a reminder, we have tax valuation allowances established for certain countries and therefore losses in those countries are not available to offset income tax expense in profitable jurisdictions. Our GAAP diluted loss per share in the quarter was $0.23. on an adjusted basis, diluted income per share was $0.09, a decrease of $0.65 from the prior year. Looking at the full year, our 2023 orders totaled $2.82 billion, relatively flat year-over-year. On a currency neutral basis, orders decreased $32 million. Net sales for the full year were $2.228 billion, a 10% increase over the prior year. The increase was primarily due to the progress made on our CRANES+50 strategy, the impact of higher crane volume in the Americas and MEAP partially offset by lower tower crane sales in EURAF.

Adjusted EBITDA for the full year was $175 million, an increase of 23% year-over-year. as a percentage of sales, the adjusted EBITDA margin increased 90 basis points over the prior year to 7.9%. Our GAAP diluted income per share for the full year was $1.09. on an adjusted basis, diluted income per share was $1.52, a 43% increase from the prior year. Please turn to slide 9. on our Q3 earnings call, we targeted a $70 million reduction to our inventory over the last three months of the year. on a currency neutral basis, we reduced our inventory by $68 million, slightly short of that target. on a year-over-year basis, net working capital as a percentage of sales increased 90 basis points to 21%. This was primarily driven by higher finished goods inventory.

Some of this was a consequence of our higher production levels, but we still have more work to do on finished goods. Moving to cash flows. We generated $63 million of cash from operating activities during the year. Our generation of operating cash flows was negatively impacted by the timing of shipments during the fourth quarter. Capital expenditures were $77 million, of which approximately $23 million was for strategic growth in our rental fleet. We ended the year with a cash balance of $34 million. Total outstanding borrowings under the ABL decreased $20 million during the year, leaving $60 million outstanding. Our net leverage ratio was 1.9 times as of December 31st, 2023, well under the targeted three times and total liquidity was $280 million.

Please turn to slide 10. as we look ahead to 2024, we entered the year with a strong backlog in the Americas, but expect ongoing softness in the European tower crane market. The impact of this unfavorable mix is reflected in our outlook. Our 2024 guidance is as follows: net sales of $2.275 billion to $2.375 billion, adjusted EBITDA of $150 million to $180 million, depreciation and amortization of $63 million to $67 million, interest expense of $32 million to $34 million, provision for income tax expense of $18 million to $22 million, adjusted diluted earnings per share of $0.95 to $1.55; capital expenditures of $60 million, of which $25 million relates to rental fleet growth; free cash flows of $30 million to $60 million. With that, I will now turn the call back to Aaron.

Aaron Ravenscroft: Thank you, Brian. Entering 2023, we expect [indiscernible] to look a lot like 2022 and overall it was much better. As we enter 2024, we anticipate global demand for mobile cranes to be strong. Unfortunately, however, we’ll face difficult comparisons in the first half of ongoing softness in the European tower crane business. This dynamic is reflected in our 2024 expectations. Please turn to slide 11. the Rocky Road Recovery since the COVID pandemic continues and we await demand from the U.S. infrastructure bill. in the meantime, we remain committed to our CRANES+50 journey to reduce our cyclicality and increase our margins by growing our aftermarket. We recently refreshed our strategy with a few tweaks and I thought it was appropriate to provide an update on our four breakthrough initiatives.

starting with our European tower crane business, although we have not landed any acquisitions, we continue to grow our rental fleet as an avenue in generating rental income, building our used sales efforts and increasing our service work. During 2023, we increased our fleet from 124 units to 149 units. In terms of acquisitions, we’ve been inactive in this space; but unfortunately, the dynamic nature of the market has made it difficult to land the deal. Moving to the next breakthrough. we adjusted our Belt and Road initiative to emphasize our efforts in the Middle East. During 2023, we launched two tower crane models to support this rapidly-growing region, the first of which can be found at the Six Flags construction site in Saudi. In addition, we are investing approximately $3 million in our China factory to improve our capability and throughput to manufacture large tower cranes.

Concurrently, we are developing three large capacity models that will serve the Middle East and will also be a good fit for Hong Kong and Singapore. Our third breakthrough initiative is to expand our aftermarket in North America. Growing 2023, we started Greenfield locations in Denver, Kansas City and Aiken, South Carolina, and we added 22 field service techs. To accelerate the efficiency of our new service technicians, we launched a quick start training program to fast track the development of proficient revenue-producing technicians while maintaining a path to certified master technician. Currently, we have roughly 70 students enrolled in this program. Our acquisitions of an H&E’s crane business and Aspen have proven to be extremely successful.

and now, we are in the process of increasing our market share in core territories while seeking additional opportunities to expand. As important, we are focused on increasing our boom truck market share by leveraging the synergies between MGX’s geographic reach and aspen’s upfit capabilities. Lastly, we started to transition our All-Terrain initiative to be more aftermarket-oriented. Since we began this initiative, we launched five models and we have more in the hopper. New product development will always be a never-ending journey in the All-Terrain business; but now that we have a fresh lineup of cranes, we need to accelerate the aftermarket growth in this space. Within Europe, we are learning to become more flexible and agile with our customers in terms of aftermarket support.

during 2023, we added 15 field service techs and hired three parts and service sales managers. In addition, after a successful trial period in 2023, we have begun to proactively offer maintenance agreements. And finally, our Manitowoc Way team has been kaizening our service facilities in mining field Germany to increase capacity to rebuild cranes. The All-Terrain crane initiative is truly global in scope. For example, in Latin America, we sold 10 used ATs during 2023. These units were trade-ins from Europe. On one hand, this helps us on strategic deals with key accounts in Europe. On the other hand, this helps us compete with Chinese competitors in South America while growing the local population of our cranes. This in turn drives future parts and service sales.

concurrently, we nearly doubled our field service techs during 2023 and added a location in Peru to serve local mining customers. We have a long way to go in this endeavor, but I’m really pleased with the progress that we’ve made. Please turn to slide 12. During our last analyst call, we restated our financial ambitions, resetting our targets to reflect the gains that we’ve made in the last couple of years. Today, I’d like to draw your attention to a new metric that we are emphasizing, ROIC. While we continue to drive for margin expansion, we felt that this metric also helps emphasize effective capital allocation. Please turn to slide 13. As you can see by the historical chart, it’s been a long journey since 2016 and it’s a great achievement to end 2023 with a return of 11.2%.

Our long-term goal is 15%. globally, the economy has been on an uneven road since 2020. but at Manitowoc, we continue to execute our long-term strategy to reduce our cyclicality and increase our margins by growing our aftermarket. I remain optimistic about the crane market long-term. Europe has a huge need for housing. Saudi vision 2030 is in full swing and the U.S. infrastructure bill is poised to generate demand. This is exactly the kind of economic backdrop that the industry needs to refresh the aging crane population around the world. With that, operator, please open the line for questions.

Operator: [Operator Instructions] Your first question comes from the line of Jay Revich from Goldman Sachs. Your line is open.

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Q&A Session

Brian Regan: Good morning, Jay.

Aaron Ravenscroft: Hey Jay.

Unidentified Analyst: Hi, this is Adam on for Jerry. Thanks for taking my question.

Aaron Ravenscroft: Yes.

Brian Regan: Yes.

Unidentified Analyst: I was wondering if you could just talk about where labor hours per unit stand today compared to the levels you were seeing pre-COVID. and if they do normalize to historical levels, how much of a margin tailing could that mean for your business?

Aaron Ravenscroft: I’m not sure I understand your question, Adam. Is it cost of labor?

Brian Regan: or is it efficiency what…

Unidentified Analyst: Yes. just labor hours today, compared to pre-COVID levels. Where are they versus historical levels?

Aaron Ravenscroft: I don’t think it’s — I don’t think it’s applicable, because there’s so many, so much mix of hours depending on the machines that we’re making.

Brian Regan: Yes. we’re, I mean — we’re always looking to improve our efficiency throughout the plant and — but I’m not sure we’ve ever given that level of granularity from an hours per unit perspective.

Unidentified Analyst: Got it. And then can you just update us on your aftermarket performance? Any signs of destocking and parts of the business, where you sell through dealers?

Brian Regan: No, I mean, the aftermarket business has been good. We’ve got some strong goals for this year. Some of it, I think, will start to flatten out, because we had such strong growth the last couple years. but as we said on the call, those service techs we’ve added and we view those as a path to continue to grow the revenue. but I haven’t — we haven’t seen any major destocking.

Unidentified Analyst: And then last one from me, with supply chain performance continuing to normalize, could decremental margins be relatively muted as improved productivity offsets lower volumes?

Aaron Ravenscroft: I think, in the mobile business, yes, in the Americas. But when you look at what’s hitting us in the faces, the — and what we’ve been talking about is the tower crane business in Europe. So, that’s a pretty significant impact to us in ’24 and that’s what’s reflected in our guidance.

Unidentified Analyst: Great. Thanks so much.

Operator: Your next question comes from the line of Mig Dobre from Baird. Please go ahead.

Aaron Ravenscroft: Good morning, Mig.

Unidentified Analyst: Hey, good morning. Good morning, guys. Hey, it’s actually Joe on for Mig this morning. Good morning.

Aaron Ravenscroft: Good morning, Joe.

Brian Regan: How are you doing, Joe?

Unidentified Analyst: Hey, good morning. Doing well, thanks. I had a couple of questions around guidance. At the midpoint, your guidance assumes net sales of 4%, but EBITDA margin down 80 basis points. I know you mentioned unfavorable mix, but can you talk about any other year-over-year margin headwinds in the guidance?

Brian Regan: The biggest piece of it all is the decline in the EU tower crane business. So, it’s not just mix in terms of standard margin, but it’s also under absorption at those factories.

Aaron Ravenscroft: Yes. and you saw it really in Q4, I mean, our margin in Q4 was 6.1%. The implied midpoint is at 7.1%, so obviously better than what we saw in Q4, so — but as Aaron mentioned, it’s really that tower crane mix.

Unidentified Analyst: Yes, okay. Makes sense. And then any thoughts on quarterly cadence for sales and EBITDA through the year?

Aaron Ravenscroft: Yes. I mean, we generally see Q3 as our lowest quarter. Q1 from a comparable perspective, the first half in particular was stronger for tower cranes last year. And we’re not — that headwind is really impacting us in the first half Q1 in particular. So, Q1 and Q2 from a comp standpoint will definitely be worse. And then Q3-Q4 should normalize.

Unidentified Analyst: Got it. Okay. And then maybe, one more any assumptions around crane sales versus non-crane sales in the guidance?

Brian Regan: We don’t give that level of granularity. but as Aaron mentioned, we do have an expectation that we’ll continue to grow the non-new machine sales.

Unidentified Analyst: Okay. All right. Good luck, guys. Thanks.

Aaron Ravenscroft: Thanks, Joe.

Operator: Your next question comes from the line of Seth Weber from Wells Fargo. Please go ahead.

Aaron Ravenscroft: Good morning, Seth.

Larry Stavitski: Hi guys. This is — good morning. This is Larry on for Seth this morning. How are you, guys?

Aaron Ravenscroft: Hey, Larry. How are you doing?

Larry Stavitski: Good. I’m doing great. Thanks for taking the questions. I just wanted to ask about orders in January after the light fourth quarter, what you guys are seeing. obviously, orders were down 33%. You did have a comp issue, but I was just wondering how they’re trending in January so far?

Aaron Ravenscroft: Yes. January was a good month, so we were just shy of $200 million. So, I think we’re continuing on the same path that we’ve been on for the last several quarters.

Larry Stavitski: Okay, great. Now obviously, you guys have been calling out the EU tower, headwinds from the tower market. What are you guys looking for to kind of look for a bottom or maybe, any kinds of — any kinds of firming up there?

Aaron Ravenscroft: Yes. I mean the first thing we’re looking at is just the regulatory environment and what we’re seeing from the governments and stimulus. So, Germany made some moves a couple of months back, but it really hasn’t hit the construction market. So, we continue to track the permits, although that’s lagging data. And then of course, within the business, we track everyone’s utilization. So, I think when we look at all those pieces right now, there’s not a whole lot of visibility for the first half. I mean, a lot of projects do start in sort of march, April, may timeframe. I’d say that all of the major players have what they need for those projects for the most part. And then — so the next, I mean, to me, the next big sign’s really going to come into probably September-ish timeframe.

Because the summer always slows down. There’s not a whole lot of activity in France and Germany in particular in August. So, September is when things start to come back on and we’ve got our normal winter campaign.

Brian Regan: And I’d just say, just adding to that from a longer-term standpoint, I mean, I think we’re excited that there are housing shortages all across Europe. So, from a long-term standpoint, I think the business is good for us. It’s just when it’s going to come back.

Larry Stavitski: Got it. Thanks a lot for your time, guys.

Brian Regan: Thank you.

Operator: Your next question comes from the line of Tami Zakaria from Manitowoc. Please go ahead. Your line is open.

Aaron Ravenscroft: Good morning, Tami.

Unidentified Analyst: Hi, this is Alex.

Aaron Ravenscroft: Good morning, Alex.

Unidentified Analyst: Hi, this is Alex on for Tami. Thank you for taking the question. Hey, I was wondering if you could provide further color on sort of price and cost for 2024, given current conditions and power demand I’m assuming continued added pressure from Chinese competition in the Middle East. The Japanese yen remains the week at 1.50 and the cost side, so do you expect labor and elevated high strength yield prices to remain a challenge for 2024?

Brian Regan: Okay. So, talking about price to cost, I’d say we’ve — the answer is yes and no, in terms of normalization, we’ve sort of gone back to normal, let’s say. but I think you pointed out many of the key points there. So, in the United States, when you’ve got competitors shipping in, when the Yen’s 1.50, there’s going to put competitive pressure out there, as well as steel prices. I mean, the reality is the current tariffs on steel are not favorable for U.S. manufacturers. You got steel in Europe is one third less than it is in the United States. So yes, I’d say that within the U.S., there’s some, there’s still pretty competitive as competitive it’s been. And so until the strong dollar starts to turn the other way, I think we’ll continue to have that pressure.

In Europe, it’s more just about demand, given that demand is so low for tower cranes. But I wouldn’t say there’s anything irrational there. And in terms of Chinese competition, that’s I’d say mostly in the, in the Middle East and Asia-Pac for us. And it’s been tough, but in most instances, either folks are willing to take Chinese or they’re not. And if they’re not, then it’s our normal sort of competitive advantage. There are competitive situations. in terms of headwinds, so I think labor has flattened out. I mean we took a lot of actions last year relative to what our labor rates were. And in terms of steel, I don’t think much really changes. I mean, we still have this dynamic, where the U.S. with the current tariff situation is at a disadvantage to all the other major regions for manufacturers.

Aaron Ravenscroft: I’d say the labor inflation normalizes, there’s still some, but…

Brian Regan: Yes.

Aaron Ravenscroft: It’s normal going into ’24.

Unidentified Analyst: Okay, thanks. that’s super helpful. And just a quick follow-up, I’m just curious, just sort of when we look at back at 2023, were there any share shifts in your view, either geographically or product wise that would be noteworthy?

Brian Regan: No, not dramatic. I mean, team’s done a great job with the mobile cranes in Europe with some of the new product launches we had, nothing dramatic. but we had some gains there in the United States, I’d say it’s all pretty steady.

Unidentified Analyst: Okay, understood. Thank you so much. I’ll pass it on.

Brian Regan: Thank you.

Operator: [Operator Instructions] And there are no further questions at this time. Mr. Warner, I’d turn the call back over to you.

Ion Warner: Thank you. Before we conclude today’s call, please note that a replay of our fourth quarter 2023 conference call will be available later this morning by accessing the Investor Relations section of our website at manitowoc.com. Thank you, everyone for joining us today and for your continuing interest in The Manitowoc Company. We look forward to speaking with you again, next quarter.

Operator: This concludes today’s conference call. Thank you for your participation and you may now disconnect.