Good day everyone, and welcome to this Manitowoc Company Q1 2016 Earnings Conference 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 of Marketing and Investor Relations. Please go ahead. Ion Warner - Vice President, Marketing & Investor Relations, The Manitowoc Company, Inc.: Good morning, everyone and welcome to Manitowoc's first quarter 2016 earnings conference call. We're glad you can join us today. With me today is Barry Pennypacker, our President and Chief Executive Officer; and Carl Laurino, Senior Vice President and Chief Financial Officer. On today's call, we will provide details of our first quarter 2016 performance as well as our full-year business outlook. Following our prepared remarks, we will be joined by Aaron Ravenscroft and Larry Weyers, Executive Vice Presidents of the company. For anyone who is not able to listen to today's call, a recorded version will be available later this morning. Please visit the Investor Relations section of our website at www.manitowoc.com to access the replay. Before we begin, I would like to review our Safe Harbor statement. This call is taking place on May 5, 2016. During today's call, forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 will be made during each speaker's remarks and our question-and-answer session. Such statements are 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 projections due to one or more of the factors explained in Manitowoc's filings with the Securities and Exchange Commission, which are also available on our website. The Manitowoc Company does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result…

Thank you. We'll go first to Steven Fisher of UBS.

Thanks. Good morning. Barry L. Pennypacker - President, Chief Executive Officer & Director: Good morning. Carl J. Laurino - Chief Financial Officer & Senior Vice President: Good morning.

In some of your filings, you laid out a three-year to five-year cost savings plan, aiming at achieving more than $200 million in cost. Can you just maybe flush out your latest thoughts on how those savings could be achieved in the first three years and maybe how quickly you think you could get the double-digit margins if the crane markets don't really pick up much from here? Barry L. Pennypacker - President, Chief Executive Officer & Director: It's an excellent question, and I'll answer it the best that I can. One of the issues that the company has and I think it's well understood is our global footprint. When you compare that to world-class companies of the types of products that we manufacture, we have too much and I think that is going to lead to a substantial portion of the goal that we have stated forward. We have a substantial opportunity with regards to productivity. As we implement the principles of The Manitowoc Way, I think a third of the number will come from productivity that we will exist and be evident in all of our plans. And I think a substantial portion of the balance is going to come from productivity in our sourcing activities. We have been talking about sourcing for a long time, but I think we've got the horses in place now to ensure that the numbers that we are talking about from a savings perspective are in fact going to hit the bottom line. So as we continue to progress, I think you can imagine that a third of this could come from sourcing, a third of this could come from productivity and a third of this could come from structural reductions.

And so I mean are you thinking of this as even possible in 2017 to have double digits or is that more likely a 2018 timeframe? Barry L. Pennypacker - President, Chief Executive Officer & Director: No. We are going to target 150 basis points to 200 basis points a year. We're not going to do anything that's going to affect our ability, should the market come back quicker than what we anticipated. We want to make sure that we maintain the agility in our manufacturing operations that are necessary to handle a potential pickup as well as at the same time ensure that we're taking the structural costs out that are necessary.

Okay. Then just a quick question on the balance sheet. What is your expectation for where you will be on cash in the second quarter? I mean, is there any particular cash usage in Q2 you are aware off and maybe how quickly do you think you can delever the business for the most part? Barry L. Pennypacker - President, Chief Executive Officer & Director: Well, one of the things that – I said I was generally pleased with the performance in the first quarter. One of the things I was not pleased with was our inventory. We are focusing on that dramatically throughout the balance of the year. And I think that's going to prove to be a substantial portion of our increased cash flow, as we progress through the year. I will let Carl add a little more color. Carl J. Laurino - Chief Financial Officer & Senior Vice President: Yes, Steven, if you look at the historic pattern for Manitowoc, we do tend to be users of working capital in the first half of the year and harvesters in the second half. We don't expect that to change. It's typically most pronounced in terms of our cash generation in the fourth quarter. So I am not going to peg a specific cash number for you, but obviously that's going to depend a little bit on the demand levels and the timing of getting units shipped throughout the factories, but we don't see anything, and Barry's comment certainly stands, relative to trying to generate additional working capital efficiency as an ongoing initiative, I think, will enable us to perform reasonably well from a cash generation standpoint in the second quarter.

Great. Thanks, guys. Barry L. Pennypacker - President, Chief Executive Officer & Director: You're welcome.

We'll go next to Mike Shlisky from Seaport Global.

Good morning, guys. Barry L. Pennypacker - President, Chief Executive Officer & Director: Good morning. Mike. Carl J. Laurino - Chief Financial Officer & Senior Vice President: Good morning.

So, could give us maybe just a bit more detail about Crane Care in the quarter because maybe just tell us if you can give us what percentage of sales that was and what percentage of sales of the operating profit as well, if it all possible? Barry L. Pennypacker - President, Chief Executive Officer & Director: Well, I can answer the first part, but not the second part. The first part is, our Crane Care mix in the quarter is consistent with what we've reported in the past, 16.5%. And we vary quarter-to-quarter, but between 16% and 18%. But overall, I think the 16% to 17% range is where we ended up. And as you know, I think I've talked about, as time goes on, to have a critical activity internally to figure out how we can capitalize on that wonderful asset that we have in the marketplace to get that up north of 25% of our overall revenue.

Okay. Great. Another question was on the backlog. I think last quarter you had mentioned there was a pretty big military order that was sort of pending. Was it in the last quarter's backlog, is it in this quarter's backlog or will it be in the backlog shortly? Barry L. Pennypacker - President, Chief Executive Officer & Director: It's not in the quarter this backlog. I am hoping the next time we talk to be able to update that.

All right. Thanks, Barry. Barry L. Pennypacker - President, Chief Executive Officer & Director: You're welcome, Mike.

We go next to Jerry Revich of Goldman Sachs. Jerry Revich - Goldman Sachs & Co.: Hi, good morning everyone. Barry L. Pennypacker - President, Chief Executive Officer & Director: Good morning, Jerry. Carl J. Laurino - Chief Financial Officer & Senior Vice President: Good morning, Jerry. Jerry Revich - Goldman Sachs & Co.: Barry, can you please comment on your Lean initiatives, which of your facilities globally are furthest along to where you would like them to be? And just frame out for us what type of cycle time reduction do you think is feasible and relative to that three-year to five-year time horizon, how quickly do you think the Lean initiatives can play out? Barry L. Pennypacker - President, Chief Executive Officer & Director: The Lean initiatives, really we're in preschool and we want to get to a doctor degree in the next four years to five years. We are starting in our largest global facility in Shady Grove, Pennsylvania. I think you heard me mention that we're starting with a summit there of The Manitowoc Way in early June. And that is how we kick off in a manufacturing operation the Lean initiatives. We go there for a week. We sit in the conference room for an hour, learn the tool, then we go to the shop floor and we practice it for four hours, and then we go back to the shop, then we go back to the conference room, we learn the next tool for an hour and then we got to the shop floor and we practice it again. This is the way that you get buy-in. This is the way that you get people to fully understand. You could sit in the conference room and talk to your blue in the face about…

We'll go next to Seth Weber of RBC Capital Markets.

Hey, good morning, everybody, and best wishes to Carl. I'm wondering if you can help us with – a little bit with going back to Steve's question on the cost savings. Just on the cadence, the $20 million that you're splitting COGS and SG&A, and then the $18 million, how much of that did you recognize in the first quarter and how should we think about that kind of rolling in through the year if it's possible to give us any help there? Barry L. Pennypacker - President, Chief Executive Officer & Director: It's in the rounding in the first quarter and it will be phased in over the next three quarters as Carl, I think, had alluded to in his prepared remarks. Do you have anything else you'd like to add to that? Carl J. Laurino - Chief Financial Officer & Senior Vice President: That's good.

Yes, sir. Okay. I must have missed that in the prepared. So there was nothing really then in the first quarter of that $38 million? Barry L. Pennypacker - President, Chief Executive Officer & Director: In the rounding.

Okay. And I guess separately, can you just talk to us how you're thinking about material cost going forward, if you've see anything on an increase, for example, on high tensile steel, how you're calibrating your margin thoughts around that? Barry L. Pennypacker - President, Chief Executive Officer & Director: Yeah, I mean high tensile steel, there's a few mills in the world that make that; however, we do purchase a substantial portion of the production that comes out of those mills and we are working very diligently to ensure that we have the cost in place in order to achieve the types of margins that we're communicating. We know and I think everyone knows that there hasn't been the same types of reduction in material costs with those high-strength steels that we utilize, but we still have some leverage. And we're utilizing that, and I think as time goes on, we'll continue to update you on what we believe our expectations are for materials globally.

Okay. I guess on the other side of that, can you just talk about the pricing environment for new cranes that you're seeing, that you saw at bauma or just kind of from an industry perspective, what's the appetite out there for pricing? Barry L. Pennypacker - President, Chief Executive Officer & Director: I think it depends where you are at. At bauma for the new tower cranes that we introduced, price was not talked about as an issue. For the GMK5250Ls that we booked where we had the innovation with the driveline retarder being able to improve the maneuverability of the crane in certain situations, price was not an issue. When you move to the Middle East, then you're trying to sell RTs against yen-denominated product lines, price becomes a discussion. But we have put discipline in place that ensures that we're not going to reduce our margins to the point where we're giving away cranes. That discipline in pricing is being instituted in the business and I think will, over time, yield well for us. But I still go back to my earlier comments that say that when I'm talking to our customers in North America about our Grove and Manitowoc brands, the question of price does not come up. The issues that we've talked about in the past and things that we have to fix with our product development and things we have to fix with our overall manufacturing processes to ensure, as I said, that we're giving them the best product in the world to sell.

Appreciate it. Thank you very much. Barry L. Pennypacker - President, Chief Executive Officer & Director: You're welcome. Carl J. Laurino - Chief Financial Officer & Senior Vice President: Thanks, Seth.

We'll go next to Mig Dobre of Baird. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): Thank you. Good morning, everyone. Barry L. Pennypacker - President, Chief Executive Officer & Director: Good morning. Carl J. Laurino - Chief Financial Officer & Senior Vice President: Hi, Mig. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): Barry, maybe going back to questions around the demand environment. So if I look at your guidance in 2015, in 2015 revenue ran about 15% ahead of the company's bookings as you burned through some backlog, and it looks to me like your bookings are still sort of stuck in the same range as 2015, so keeping flat revenue for this year would either imply higher bookings or a little more backlog burn. I'm trying to figure out how you're thinking about the mix between the two as the year progresses and what your visibility is around this. Barry L. Pennypacker - President, Chief Executive Officer & Director: Well, keep in mind, my entire approach has been that – I've spoken about two words since I've been here, innovation and velocity. And as we increase our velocity through our plants, which we are working extremely hard to do, you're going to see our backlog come down. So I'm anticipating that in the latter part of the year as we become more nimble in our manufacturing processes, I'm anticipating a backlog burn and a backlog reduction, which is normal in a company that's transitioning itself to a Lean enterprise, because as we are able to take down our overall lead times, particularly in this environment, it becomes a competitive advantage. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): Okay. I appreciate that. And then maybe a question for Carl. Carl, can…

We'll go next to Charley Brady of SunTrust Robinson Humphrey.

Hey. Thanks. Good morning, guys. Barry L. Pennypacker - President, Chief Executive Officer & Director: Good morning. Barry L. Pennypacker - President, Chief Executive Officer & Director: Good morning, Charley.

Just want to circle back and focus on the orders again, and a little bit kind of tag on to Mig's question. I get the backlog burn, the backlog is $502 million. Can you give us some sense – you talked about towers being up, you talked about bauma being better than it was three years ago, which I was pretty depressed at bauma three years ago. I guess I'm really trying to wrap my head around, you've got your shoes for $1.8 billion plus revenues, your $500 million backlog sounds like backlogs got to be ticking up pretty meaningfully, particularly in Q3 and Q4, given ship times. And I'm just trying to really understand the metrics and the mechanics of what your expectation on order growth is, looking out for the next couple of quarters? Barry L. Pennypacker - President, Chief Executive Officer & Director: Yeah, I mean I'm not looking for a substantial order growth. I know there are some things that we're talking with customers about that are going to hit in the second half, so if you look at our order rate, you multiply it by four and you take $150 million out of backlog, you're at $1.8 billion.

Okay. Fair enough. On the $18 million in SG&A, you talked the other $18 million comes out, can you flush out a little bit what the $18 million is consisting of, where the savings comes from? Barry L. Pennypacker - President, Chief Executive Officer & Director: It's primarily reduction in force. Its actions are just taken to streamline the organization.

Okay. And that's beyond what's in the $20 million that comes out of COGS and SG&A, correct? Barry L. Pennypacker - President, Chief Executive Officer & Director: Correct.

Okay, thanks. Barry L. Pennypacker - President, Chief Executive Officer & Director: You're welcome.

We'll go next to Jamie Cook of Credit Suisse. Jamie L. Cook - Credit Suisse Securities (USA) LLC (Broker): Hi, good morning. I guess a couple of clarifications. Your forecast for revenues is more optimistic relative to some of your peers. I'm just wondering was there any way you could help me characterize your view of what the market demand for crane should be relative to whether this is more of a market share story for Manitowoc in 2016? Then outside of that military order that you talked about last quarter, that hasn't hit yet, but it was sort of like a one-time help. Is there anything else that's sort of a larger one-time order that gives you confidence in your revenue forecasts? And then my second just follow-up question, the 150 bps to 200 bps a year in margin improvement in Crane, I just want to clarify that what does that assume in revenue, does that assume a flat revenue environment? Thank you. Barry L. Pennypacker - President, Chief Executive Officer & Director: You're welcome. Good question. I'll answer your last one first. Yes, it assumes the flat revenue environment. Jamie L. Cook - Credit Suisse Securities (USA) LLC (Broker): Okay. Barry L. Pennypacker - President, Chief Executive Officer & Director: That's the only thing that I can assume right now. Jamie L. Cook - Credit Suisse Securities (USA) LLC (Broker): Okay. Barry L. Pennypacker - President, Chief Executive Officer & Director: Until we see the dynamics of the rental market change, until we see the dynamics of utilization change particularly in North America, I've got to assume that I need to get to that double-digit margin with flat revenue. Jamie L. Cook - Credit Suisse Securities (USA) LLC (Broker): Okay. That's helpful. Barry L. Pennypacker - President, Chief…

We will go next to Ann Duignan of JPMorgan.

Hi. Good morning, everyone. Barry L. Pennypacker - President, Chief Executive Officer & Director: Good morning, Ann. Carl J. Laurino - Chief Financial Officer & Senior Vice President: Good morning.

Just clarification on exactly that topic. If the guidance includes restructuring, but you don't know yet how much that's going to be, why don't we take... Barry L. Pennypacker - President, Chief Executive Officer & Director: Then I have to offset it, don't I?

Or why don't we take guidance off the table until we know how much restructuring we're going to do? Barry L. Pennypacker - President, Chief Executive Officer & Director: Well, I think it's very clear that I pay as I go. So if I've given you 4% operating margin for the year on flat revenue, then if I take $20 million in restructuring, that I got to cover it.

Okay. That's fair. Barry L. Pennypacker - President, Chief Executive Officer & Director: I don't know what else to say.

Well, it's just when you don't know how much you're going to spend yet, that's interesting, but I guess... Barry L. Pennypacker - President, Chief Executive Officer & Director: But you know how much we're going to target from an operating earnings perspective, correct?

Yeah, yeah. Absolutely. Barry L. Pennypacker - President, Chief Executive Officer & Director: So, if I spend $20 million or I spend $2 million or I spend $600 million, what difference does it make for this year?

It might make a difference on timing if you do it early and you get time to cover it. Anyway my real question was really around bauma and I am curious just given how new you are to the organization, what kind of lingering impressions do you take away from bauma about the business, about Manitowoc in particular, any key learnings that you take away from the show. Barry L. Pennypacker - President, Chief Executive Officer & Director: Yeah. I think when you look at what we were able to present there and for us to position ourselves as an innovation leader in the industry and to have the booth centered around how we're helping our customers increase their return on capital, I was extremely pleased with the organization and what we put forth. And I will tell you that the competition in some cases has noticed. And we're seeing some activities in the market that are atypical for some of our competition. So I think we hit a homerun.

Okay. That's helpful. And just... Barry L. Pennypacker - President, Chief Executive Officer & Director: I wish the market was better, but I think with what we were able to put forth and the current market conditions and the feedback that I've gotten from customers globally, I think it was a homerun.

Okay. And just to that point, one final clarification. Where do you see the biggest downside risk to flat revenue in the next couple of years, either regionally or product application? Barry L. Pennypacker - President, Chief Executive Officer & Director: Well, I would say for sure, it's in our RT product line that is very critical to the success of the oil and gas industry. That's where I see our biggest risk.

And do you think U.S. is at a bottom, maybe Middle East has further potential downside? Barry L. Pennypacker - President, Chief Executive Officer & Director: Yeah, there's a lot of used cranes all of a sudden showing up in the Middle East at low pricing. That's a new dynamic. So we're observing that very closely. But as those cranes show up in the Middle East, on the used market they are not in the U.S., so any activity that we get as a result of pickup here will be extremely good for our business; however, I'm just not going to call that $55 to $60 oil. I don't know where that's at.

Okay. I appreciate it. Thank you. Barry L. Pennypacker - President, Chief Executive Officer & Director: You're welcome. Carl J. Laurino - Chief Financial Officer & Senior Vice President: Thanks, Ann.

We'll go next to Larry De Maria of William Blair. Larry T. De Maria - William Blair & Co. LLC: Hi, thanks. Curious strategically your guys' thoughts on the possibility of Terex and Zoomlion, the competitive dynamics obviously far from certain. Does it make sense for you guys to engage with them at all and what do you hear from customers about the potential impact in the market? Barry L. Pennypacker - President, Chief Executive Officer & Director: All I know is that I focus on our customers and what our customers are worried about is whether or not a standalone crane company with a level of debt that we had is going to be able to continue to satisfy their needs going forward. So what I've been doing is spending my time with our customers sharing our strategy for the future and ensuring them that irregardless of what happens with the merger that you had mentioned or the acquisition that you had mentioned, we're going to be a standalone crane company that is looking forward to continuing to innovate the industry and we're going to perform better than we've ever performed in the past. And that's what I promise our customers. And anything beyond that is totally out of my control. Larry T. De Maria - William Blair & Co. LLC: Okay, thanks. And then obviously you mentioned tough Middle East market, you also mentioned Crane Care a couple of times. Just curious how does Crane Care come into the discussions in some of these tougher markets where price is competitive, but is Crane Care enough of a differentiator or are they too hard to reach in some of these emerging markets? Carl J. Laurino - Chief Financial Officer & Senior Vice President: No. In some of the emerging markets, it's just too hard to reach and it takes a substantial investment to have our product verification centers available and staffed. People in the Middle East have all the ability in the world to access our Crane Care globally, but we don't have the boots on the ground in the Middle East like we have in the balance of the world in order to ensure that that's a differentiator for us. Larry T. De Maria - William Blair & Co. LLC: Okay. Thanks and best of luck, Carl. Carl J. Laurino - Chief Financial Officer & Senior Vice President: Thanks, Larry.

We'll go next to Mig Dobre of Baird. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): Yes. Thank you for taking my follow-up. And I'm sorry to go back to this restructuring issue, I'm just confused here. If I look at the way you report and I'm looking at your last schedule on a press release on a margin analysis, okay, the 2.2% operating margin that you reported excludes restructuring. Now my understanding is that your 4% margin guide is consistent with this schedule, this margin analysis which excludes restructuring. Correct me if I'm wrong. Carl J. Laurino - Chief Financial Officer & Senior Vice President: You're absolutely correct. Barry L. Pennypacker - President, Chief Executive Officer & Director: You're absolutely correct. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): So 4% excluding restructuring? Barry L. Pennypacker - President, Chief Executive Officer & Director: That's what the schedule indicates. Yes. Mig Dobre - Robert W. Baird & Co., Inc. (Broker): Very well. Thank you. Barry L. Pennypacker - President, Chief Executive Officer & Director: You are very welcome.

That does conclude our question-and-answer session. At this time, I would like to turn the call back over to Ion Warner for any additional or closing comments. Ion Warner - Vice President, Marketing & Investor Relations, The Manitowoc Company, Inc.: Thank you. Before we conclude today's call, please note that a replay of our first quarter conference call will be available later this morning. You can access the replay by visiting the Investor Relations section of our website at www.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 during our second quarter conference call. Have a good day everyone.

That does conclude our conference for today. We thank you for your participation.