Manitowoc Company Inc. (NYSE: NYSE:MTW), a leading global manufacturer of cranes and lifting solutions, reported mixed results in its third-quarter earnings call on November 2, 2024. The company faced a challenging market environment, with a significant downturn in the U.S. and European markets, leading to a 20% drop in orders year-over-year.
Despite these challenges, Manitowoc's strategic initiatives and a focus on non-new machine sales, which grew by 9%, provide a silver lining for future growth. The company also completed a noteworthy debt refinancing, which included an increase in its ABL credit facility and the issuance of new bonds, reflecting improved market confidence.
Key Takeaways
- Manitowoc's Q3 orders were down 20% year-over-year to $425 million, with a backlog of $742 million.
- Net sales were flat at $525 million, while non-new machine sales increased by 9%.
- The company completed significant debt refinancing, increasing its ABL credit facility and issuing new bonds.
- Operational improvements were made through initiatives like "The Manitowoc Way" and CRANES+50 strategy.
- The long-term outlook is positive, with an anticipated market recovery supported by aging crane fleets and infrastructure projects.
- Cash flow concerns were raised with $53 million used in free cash flow for the quarter.
Company Outlook
- Management anticipates full-year results at the lower end of their adjusted EBITDA guidance.
- The company aims to reduce its net leverage ratio below 3 times by year-end.
- Ongoing election-related uncertainties in the U.S. and political stalemates in Europe pose challenges.
- Despite current conditions, the company is optimistic about future growth driven by infrastructure investments.
Bearish Highlights
- A $40 million sales shortfall in the U.S. due to election uncertainties and rising interest rates.
- European market faced a 30% year-over-year drop in mobile crane orders.
- Adjusted EBITDA decreased by 21% to $26 million.
- A high inventory level of $770 million could indicate overstocking issues.
Bullish Highlights
- Debt refinancing efforts show enhanced market confidence and reduced credit risk.
- Positive long-term market outlook due to aging crane fleets and upcoming infrastructure projects.
- Increased borrowing capacity and extended maturity of credit facilities demonstrate financial stability.
- Non-new machine sales growth indicates a strong secondary market for used cranes.
Misses
- The company used $44 million in operating activities, leading to a significant free cash flow usage.
- The cash balance stood at $23 million, with total liquidity at $222 million, indicating potential liquidity constraints.
- Management needs to generate approximately $130 million in free cash flow in Q4 to meet the low end of their target range.
Q&A Highlights
- CEO Aaron Ravenscroft commented on the impact of U.S. steel tariffs and potential benefits of new tariffs.
- CFO Brian Regan discussed the need for improved cash collections and reduced cash CapEx to achieve Q4 free cash flow targets.
- Margins are expected to remain flat in Q4, with continued pressure in the upcoming quarters.
- An uptick in quoting activity suggests a potential rebound in demand despite a slight decrease in orders for October.
Manitowoc's third-quarter earnings call underscored the company's resilience in the face of market adversities. While the near-term outlook reflects caution due to macroeconomic and political factors, the company's strategic initiatives and market position may pave the way for recovery as global conditions stabilize. Investors and stakeholders can access a replay of the conference call on Manitowoc's website for further insights.
InvestingPro Insights
Manitowoc Company Inc. (NYSE: MTW) faces a complex financial landscape, as revealed by recent InvestingPro data and tips. The company's market capitalization stands at $329.4 million, reflecting its position in the industrial machinery sector. Despite the challenges highlighted in the earnings call, InvestingPro data shows that Manitowoc's revenue for the last twelve months as of Q3 2024 was $2.18 billion, with a gross profit margin of 17.4%.
An InvestingPro Tip indicates that Manitowoc is "quickly burning through cash," which aligns with the article's mention of $53 million used in free cash flow for the quarter. This cash burn rate is a critical concern, especially given the company's need to generate approximately $130 million in free cash flow in Q4 to meet the low end of their target range.
Another relevant InvestingPro Tip suggests that Manitowoc "operates with a significant debt burden." This insight adds context to the company's recent debt refinancing efforts mentioned in the article, which included increasing its ABL credit facility and issuing new bonds. While these actions demonstrate market confidence, they also underscore the ongoing challenge of managing the company's debt load.
The Price to Book ratio of 0.54, as reported by InvestingPro, suggests that the stock may be undervalued relative to its book value. This could be of interest to value investors, especially in light of the company's long-term positive outlook mentioned in the article, which is based on anticipated market recovery and infrastructure projects.
It's worth noting that InvestingPro offers 10 additional tips for Manitowoc, providing a more comprehensive analysis for investors seeking deeper insights into the company's financial health and market position.
Full transcript - Manitowoc Company Inc (MTW) Q3 2024:
Operator: Good morning. My name is Sara and I will be your conference operator today. At this time, I would like to welcome everyone to the Manitowoc Third Quarter 2024 Earnings Conference Call. I will 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 third quarter 2024 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 question. 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, describing the company's latest SEC filings. The Manitowoc Company does not undertake any obligation to update or revise any forward-looking statement whether as a 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 move to Slide 3. A year ago I stated that 2024 would be predicated on two major factors: number one, whether European governments would address the escalating housing crisis; and number two, how resilient business activity would be in the face of the US election. Starting with Europe. It was great to see the European Central Bank reduce their interest rates with back-to-back cuts in September and October. However, this is probably not enough and it will take time to impact our business. The governments in France and Germany remain at a stalemate after the recent elections and no fiscal action has been taken to address the well-publicized housing shortages. Moving to the US market. Although it seems like a lifetime ago, it's only been five months since our Crane (NYSE:CR) Days event where customer sentiment was very positive. Unfortunately, this positive attitude evaporated, as we entered the summer months and the presidential election started to heat up. In fact during the third quarter, we missed our book and ship sales target by more than $40 million. As threat poses, as American Standard used to say; when it's light, you can't see the dark and when it's dark, you can't see the light. Given that we are only 5 days from the US election, there's plenty of uncertainty in our near-term outlook. So as I go through each region, I think it is important to contrast the current discouraging tone to the favorable long-term outlook. Starting with the Americas. Even though demand for new cranes has been slow, the overall attitude of the crane industry can best be described as cautiously optimistic. Although utilization slowed a bit during the summer months, it has still been pretty resilient. As a general statement, dealer inventory in total is okay, but it's a little more complicated when I dig into the details. While there are areas where inventory is light, feedback from this channel suggests that high levels of RPO activity is weighing on the balance sheet of many of our dealers. At the core, however most folks in the US are sitting on the sidelines waiting for further interest rate cuts and to see the outcome of the election. Nevertheless, the Infrastructure and CHIPS bills are still in the early innings. In addition, the average age of cranes at most large rental houses is greater than 15 years. Clearly, crane fleets continue to age and we believe the replacement cycle is inevitable. Turning to Europe. The situation is similar as they also grapple with political uncertainty. The third quarter was seasonably slow, which is typical, but trends throughout the industry remains quite negative. In the tower crane market while we did see an uptick in orders during the quarter, none of the major crane rental houses are signaling a near-term rebound. The general tone is that we are bouncing along the bottom and we will continue to do so until there is some sort of stimulus, whether it be government intervention to address the housing shortages or an end to the conflict in Ukraine. Similarly, the overall view of the mobile crane market is fairly muted with customers remaining very quiet over the summer months. Orders were down nearly 30% year-over-year in the third quarter. On a more positive note, looking over the long-term, there are a lot of crane rental fleets, both mobiles and towers, that are long in the tooth. Additionally, we see more large infrastructure projects on the horizon like offshore wind and nuclear work that requires newer cranes. And of course there is a significant housing shortage in almost every country in Europe. We have started to see interest rates decline. And at some point, all of these trends will provide the tailwind required for a rebound in the tower crane market as well as a robust mobile crane market. In the Middle East, the market remains very strong. Saudi projects continue to move forward and Dubai expects to nearly double its population by 2040, which is driving residential construction activity. At the same time, the Chinese competition in the region is intense. In terms of mobile cranes, Chinese competitors are aggressive with inventory and payment terms. In fact one Chinese manufacturer alone has stocked several hundred cranes in Saudi. Fortunately, in terms of tower cranes while the competition is tough, we are in a much stronger position. Our engineering teams continue to launch new machines for this market and our long-term dealer partner, NFT, has the world's biggest fleet of large tower cranes and they are best-in-class for the application engineering required for such large projects. Moving to Asia Pacific. The prolonged economic stagnation in China is overshadowing the entire region. Similar to the Middle East, Chinese manufacturers are heavily discounting their machines throughout Asia to keep their factories running. In South Korea, the market has been stalled by Samsung (KS:005930)'s recent decision to delay its Fab 5 expansion and overall sentiment has been very cautious. Year-to-date, our machine orders in South Korea are down over 50%. Lastly, Australia seems to be following the same pattern, as North America with demand slowing during the summer months. Here too we've started to see interest rates come down, which should help buoy the crane market. Please turn to Slide 4. We remain focused on what we can control, which means continuous improvement through The Manitowoc Way, and the ongoing execution of our CRANES+50 strategy. Starting with The Manitowoc Way, I recently visited our factory in Wilhelmshaven, Germany where we manufacture our all-terrain cranes. I'm super proud of the team, they just keep getting better and better. On this slide, we have highlighted two exciting improvements. First on the left; through kitting, we've simplified the fabrication of our booms. By kitting all of our raw material and using what the team calls a Christmas tree, they significantly simplify the material management thus reducing material flow by 93%, which is equivalent to 70 miles of forklift traffic per year. The color of each Christmas tree relates to a specific crane model. The one shown in the picture is for the GMK6300. And this is delivered to the boom fabrication line, the operators have everything they need so they don't have to chase parts and the supervisor can easily tell which booms are in process. Second, on the right is a picture of Eddie Kale with a test device that he created at home. Eddie is a long-time employee who assembles superstructures. His prior job at the plant was to fit the superstructure on the truck portion of the crane and during this process, Eddie observed that there was always a lot of troubleshooting to ensure the electrical components between the superstructure and the chassis communicate properly. In his new position, he moved one step earlier in the process and is assembling the superstructure. Eddie designed and programmed the simple test box to confirm all electrical connections during the superstructure assembly rather than punting a problem to the next assembly process. This saves the team a huge amount of time and aggravation. Thank you very much, Eddie. Closing with CRANES+50, our non-new machine sales for the third quarter were $169 million, up 9% year-over-year. A couple of points to highlight. First, I'd like to spotlight our mobile efforts in the UK. One of our four breakthrough initiatives is to reinvigorate our all-terrain product line to grow our aftermarket business. Since launching several new machines over the past couple of years, the team has fully capitalized on our expanded range with several nice customer wins. To support these cranes in the field, we've added six service technicians in the U.K. bringing the total to 15 and we've opened a second service center in Barnsley to better support our customers in Northern England, Scotland and Wales. Next, I would like to recognize the progress that we've made at MGX. If you recall, when we acquired the crane business of H&E Equipment, we had a couple of branches that were co-located. We are currently in the process of moving into new stand-alone locations in Baton Rouge and in Phoenix. These new branches are larger and give us more capacity to grow our service work in these markets. A big thank you to the H&E team. They have been great partners throughout this transition. In addition, MGX has embarked on its first major Manitowoc Way journey to improve productivity. Currently, we are conducting a Kaizen to more effectively rebuild Manitowoc crawler cranes. In the old days, we rebuilt cranes more on an ad hoc basis without standard work procedures and by relying on individual skill levels. Moving forward, we are creating detailed work sequences and breaking down the bill of materials to support each work segment. This allows us to create specific material kits delivered on a just-in-time basis for each segment in the workshop. The team understands that the faster and more cost effective we become at these rebuilds, the more competitive we will be in generating more projects like this. This is a groundbreaking Kaizen for our MGX sites and I'm looking forward to continued progress on this lean journey. With that, I'll turn it over to Brian.
Brian Regan: Thanks, Aaron, and good morning, everyone. Please move to Slide 5. I'd like to start by thanking my team for the hard work associated with the refinancing of our debt. Great job team. During the quarter, we completed the refinancing of our debt by: first, amending our ABL credit facility to increase our borrowing capacity from $275 million to $325 million and extending the tenure to 2029; and second, we refinanced our bonds that were due in 2026 by issuing new $300 million notes at 9.25% due October 2031. It is important to note that the credit risk portion of the interest rate went down almost a full point since we last financed in 2019. This is a good sign that the debt market appreciates the heavy lifting done on our strategy to reduce the cyclicality and improve our margins by focusing on the recurring higher margin aftermarket side of the business. Turning to our results. During the quarter we had orders of $425 million, a decrease of 20% compared to a year ago. The year-over-year decrease was primarily driven by the Americas where we saw order intake down 28% year-over-year as the US presidential election and interest rates continue to weigh on demand. We ended the quarter with a backlog of $742 million. Net sales in the third quarter were $525 million, flat versus the prior year. However, as Aaron mentioned, we missed our book and ship target by over $40 million in the Americas. Non-new machine sales increased 9% year-over-year to $169 million. The increase was primarily driven by used crane sales, which if you recall, lagged during the first half. From a trailing 12-month perspective, non-new machine sales reached $618 million, reflecting great progress by the team on our CRANES+50 strategy. After adjusting for charges related to a legal matter with the EPA, SG&A expenses as a percentage of sales were 15%, flat year-over-year. Our adjusted EBITDA for the quarter was $26 million, a decrease of 21% year-over-year. Our European towers business drove roughly half of this decline. Adjusted EBITDA margin was 5%, a decrease of 140 basis points over the prior year. Product mix was the primary driver for this lower margin. Please move to Slide 6. Net working capital ended the quarter at $579 million and is elevated due to higher inventory as a result of the miss in the book and ship sales. As mentioned on the last call, we reduced our 2024 build schedules with the impact on inventory expected to be seen in Q4. Moving to cash flows. We used $44 million of cash from operating activities in the quarter, primarily driven by the increase in working capital and acceleration of our semiannual interest payment related to the debt refinancing. Capital expenditures were $9 million, of which $3 million was for the rental fleet. As a result, our free cash flow was a use of $53 million in the quarter. At September 30, our cash balance was $23 million and total liquidity was $222 million. Our net leverage ratio was 3.4 times. With the planned reduction in inventory, we expect to be below our targeted 3 times by year-end. Given our performance in the third quarter, we expect full year results to come in at the low end of our adjusted EBITDA guidance. This assumes $50 million in new machines book and ship sales, which is not a big number in a normal environment. As you would expect, a lot of uncertainty surrounds the U.S. election and how customers will behave during the remainder of the year. As a reminder, accelerated depreciation for tax purposes drops from 60% in 2024 to 40% in 2025, which could also stimulate year-end crane demand and cash collection. As it relates to cash, we need approximately $130 million of free cash flow to hit the low end of our guidance. While we have a line of sight to get there, it will take some items moving in our favor to hit it. With that, I will now turn the call back to Aaron.
Aaron Ravenscroft: Thanks, Brian. Please turn to Slide 7. I have to say 2024 has felt like deja vu. During the third quarter, it became evident the construction industry is distracted by the election and 2024 is unfolding very much like 2016. Mark Twain once said, history doesn't repeat itself, but it does rhyme. During the second quarter of 2016, we heard a lot of positive customer sentiment at the bauma trade show in Germany. But as the U.S. election approached that year, the favorable sentiment faded and orders waned. This year has been very similar. In spite of great positivity that we heard from our customers at Crane Days, order intake slowed dramatically as we entered the summer months. On this slide, you can see that the sharp decline in orders leading up to the 2016 presidential election quickly reversed in November. To me, this is the million-dollar question as we consider the remainder of 2024 and the first half of 2025. Will orders pop after the election on Tuesday? I guess time will tell just how wise Mark Twain was. At Manitowoc, we remain committed to focusing on what we can control. Our top priority is safety followed by strengthening our balance sheet to ensure that our net leverage is below our target of 3 times. To achieve this, we are focused on reducing our inventory and increasing cash generation during the fourth quarter. Additionally, we've adjusted our first quarter 2025 build schedules to minimize the inventory rebound that we seasonally see as we begin a new year. Fortunately, with the terms of our new ABL credit facility, our liquidity is a strong $222 million. While we remain very tactical in managing our cash, we are also resolute in our efforts to grow our aftermarket and non-new machine sales. We've recently opened several new branch locations and we have plans for a few more next year. Strategically, increasing the number of locations and service technicians is vital to driving our non-new machine sales and enhancing long-term shareholder value. In closing, despite the headwinds mentioned earlier, we see glimmers of optimism. Interest rates are declining around the world, the monies from the Infrastructure and CHIP Bills are beginning to flow in earnest, the Middle East remains strong, crane fleets are aging to historic levels and we continue to grow our service footprint and launch new cranes. Manitowoc is well-positioned to execute our CRANES+50 strategy and deliver shareholder value. With that, I'll open it up for questions.
Operator: Thank you. [Operator Instructions] Your first question comes from the line of Jerry Revich with Goldman Sachs (NYSE:GS). Your line is open.
Aaron Ravenscroft: Hi, Jerry.
Brian Regan: Good morning Jerry.
Clay Williams: Hi, this is Clay on for Jerry. Just one question for me. Can you provide some color on the potential for margin improvement when volumes return given the productivity improvements you've outlined in this quarter and some of the prior quarters?
Aaron Ravenscroft: Yes, that's a complicated one to answer just because it depends a lot on the mix. So if you look at the tower crane business given that it's at its bottom, the contribution margins are going to be great in that business as we move forward. Brian, do you have anything?
Brian Regan: Yes. I think we need that volume as well because as we talked about, we've reduced our build plans and that's impacted our flow-through negatively. So both from a tower standpoint as well as a mobile standpoint as we get our inventory right.
Clay Williams: Thanks. And just as a follow-up. How has the -- on the non-new machine sales, how has the parts performance been as a part of that? Thanks.
Aaron Ravenscroft: Yes, parts has been good. I mean actually the thing that's pleased me the most with respect to our non-new machine sales is our MGX business continues to grow. It was up nicely year-over-year, which is mostly parts and service. And the European tower crane business even though the whole goods business is down dramatically, we were actually up in the quarter. So that's a good sign that our strategy is working.
Brian Regan: Yes. And I mentioned in the prepared remarks that used was a little bit heavier during the quarter, which definitely impacts our margin flowing through that side of the business.
Clay Williams: Thanks, I appreciate it.
Operator: Your next question comes from the line of Mircea Dobre with Baird.
Joseph Grabowski: Hi, good morning guys. Actually it's Joe on for Mic this morning.
Aaron Ravenscroft: Hi, Joe.
Joseph Grabowski: Hi, good morning. So my first question, you're highlighting election uncertainty. That makes perfect sense. Do you think that there is an outcome of the election that would help more than other outcomes or is it just moving from uncertainty to more clarity?
Aaron Ravenscroft: Yes, that's a tough question to answer. Put me on the line like that, Joe. I mean I think if you look back at that 2016 bump, that was driven by Trump's win. I mean the industry is very conservative I would say. So if I'm being completely honest, I think that a Trump outcome is the best for the crane industry.
Joseph Grabowski: Yes. No, that makes sense. And my next question would be and you touched upon this a little bit in your prepared remarks, but what series of events would have to happen to get the European tower crane jump started again? And again you touched upon some of these, but maybe kind of expand upon what would need to happen to get that market going?
Aaron Ravenscroft: Yes. I mean from my perspective, we're at the bottom. Year-over-year we were better in the third quarter in terms of orders. Fourth quarter is a little bit different, bit more difficult comps. We get into next year every quarter I would call easy comps. So to me, that's the first step sort of the basis of it. I think any work that any one of the countries would do in Europe to help the housing shortage would go a long way. But I mean inventories are low, people dialed back even on the rental fleets. I feel like we're at the bottom. We just think it will slowly build back over the next 12 months. It may not happen in the fourth quarter now or the first quarter. But I think when you look at the second half of next year and you start to set yourself up for 2026, we'll start to see some action. The other thing I'd say is Germany has had an election in September so anything could happen in terms of their geopolitical environment if they're not able to hold the coalition for the current government. That can move things faster too.
Joseph Grabowski: Got it, okay. Thanks for the color.
Aaron Ravenscroft: I mean, I watch the interest rates, we watch housing permits and we keep an eye on all these geopolitical. I think as a basis though, the industry is at its bottom and it's going to build from here.
Joseph Grabowski: Understood. And maybe if I can sneak in one more quick one. You guys mentioned $130 million of free cash flow in the fourth quarter to hit the low end of the free cash flow range. I guess what other levers would have to be pulled to get close to that number?
Brian Regan: Yes. We're looking to bring down cash CapEx a little bit, but also a lot of it is going to be dependent upon that book and ship rate and whether or not we're able to get those units out the door and then it's going to come down to cash collection by the end of the year. The cash flow versus it sitting in AR I'm less concerned about. If we've got an elevated AR at the end of the year and we missed our cash, I feel a whole lot better than if it's sitting in inventory obviously. We've brought the build plans down enough. So when I look at the $770 million in inventory that we've got sitting on the balance sheet at September, we've got enough inventory to sell. So I think we've got that line of sight, but it's all going to come down to what the book and ship rate is.
Joseph Grabowski: Sure. Okay, thanks guys. Good luck in the fourth quarter.
Brian Regan: Thank you.
Operator: Your next question comes from the line of Tami Zakaria with JPMorgan (NYSE:JPM). Your line is open.
Brian Regan: Good morning Tami.
Tami Zakaria: Good, how are you? So my question is a little backward looking actually. Can you remind us what tariffs on imports or even steel in the past impacted your business? The reason I ask, it's election season, I think tariffs are top of mind for a lot of investors. So can you sort of refresh or give us a recap of what happened last time and how you're preparing for it should that be the case again?
Aaron Ravenscroft: Yes. So I mean our biggest challenge in the past was when they put in the steel tariffs. If you look at steel prices in the United States, they're 25%, 30% higher than they are in Europe and which is even higher than Asia. So to me, that's sort of already built into our system. I mean I know that there are so many variations of this tariff discussion that's been thrown out there. I mean in fact the tariff across all of cranes would be a positive for us when you consider the challenges we have with steel prices and FX. But I have no idea what will actually be implemented. So at this point, we continue to manage our sourcing like we always have with multiple sources and we'll manage through it. But I think it's probably the opposite direction, right, because they're talking about applying tariffs to everything. I think in the end, it would actually be favorable for us because we've already taken the biggest hit with steel. Brian, what do you think?
Brian Regan: Yes. I think one of our big competitors has been seeing favorability from a currency rate in the U.S. So I think that's to me a bigger concern because they got both the benefit of the steel price as well as the currency. So I think continuing to monitor that and see what happens. And I think our U.S. interest rates are going to impact that as well as what happens in Japan. So I think that's the other big factor.
Tami Zakaria: Got it. Okay, thank you.
Operator: [Operator Instructions] Your next question comes from the line of Steven Fisher with UBS. Your line is open.
Steven Fisher: Good morning. Just wanted to ask about a follow-up on margins. And I'm not sure if your commentary on the guidance low end applies to revenues as well. I'm just trying to impute what the implied margins are for Q4. It seems like they might be pretty steady on an EBITDA basis with the margin, that 5% margin in Q3. I want to confirm if that's correct. And then just sort of thinking about should we consider sort of the bottoming of margins from here or do we think there could still be some more pressure as we go into '25 depending on how things play out?
Aaron Ravenscroft: Yes. I think in the short term -- so a big portion of our margin issues in the third quarter was related to our build schedule reductions. I mean there was some impact from towers, which was worth a couple of million bucks and we had some mix challenges. I think those mix challenges will continue in the fourth quarter as well as more absorption because we'll actually have more shutdowns in the fourth quarter to adjust our build schedules. And then looking into the first quarter, I mean we've adjusted our build schedules in the first to protect our balance sheet. So I mean I think the next two quarters will continue to be challenged on the margin side just purely for the fact that we're not driving as many hours through our shops.
Brian Regan: Your assumption that Q4 looks similar to Q3, I'd say that's pretty fair. Maybe a slight uptick, but I think relatively flat from a margin standpoint is where we're thinking about it.
Steven Fisher: Okay. That's great. And then just you gave some of the market color in the beginning. Just curious about quoting activity, particularly in the Americas. Anything that you can comment on in terms of how you've seen that in the last handful of months relative to earlier in the year? Is it still fairly active even if there's not as much ordering? What are you seeing in sort of the quoting activity?
Aaron Ravenscroft: Yes. So our orders for October will probably be less than [150] (ph). So just to give you some indication of where this past month has played out. That being said, in my normal reviews with the team, I mean I had one on Monday morning and actually some of the sales guys were saying that quoting activity picked up. So I know that's anecdotal, but to me that's a pretty good sign because the last several months have been pretty slow in terms of talking about order activity or at least quoting activity let's call it.
Steven Fisher: Right. Okay, thank you very much.
Aaron Ravenscroft: Thank you.
Operator: There are no further questions at this time. Mr. Warner, I turn the call back over to you.
Ion Warner: Thank you. Before we conclude today's call, please note that a replay of our third quarter 2024 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. You may now disconnect.
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