Good day, everyone. And welcome to The Manitowoc Third Quarter Earnings Conference Call. Today’s call is being recorded. And at this time, for opening remarks and introductions, I would like to turn the call over to Ion Warner, Vice President, Marketing and Investor Relations. Please go ahead.

Thank you, and good morning, everyone. And welcome to The Manitowoc conference call to review the Company’s third quarter 2019 performance and 2019 full-year business outlook, as outlined in last evening’s press release. With me today are Barry Pennypacker, President and Chief Executive Officer; and David Antoniuk, Senior 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 & 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 two. Before we begin, 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 statement, whether as a result of new information, future events, or other circumstances. And with that I will now turn the call over to Barry.

Thanks, Ion, and welcome, everyone. We once again delivered a strong quarter, using the sound principles of The Manitowoc Way. We generated $43 million of adjusted EBITDA, an increase of $12 million on flat revenue, which was primarily driven by strong operational performance. This marks the 10th consecutive quarter of year-over-year adjusted EBITDA margin improvement. Free cash flow generation of $25 million was solid as well, representing a significant improvement compared to last year. As you are aware, last quarter, we committed to reducing our inventory by $80 million by year-end. And I’m happy to say we are on track to achieve this goal. The hard work and dedication of our employees delivered these results, and I couldn't be more proud. I am also happy to say that Manitowoc tightened the range of our 2019 guidance and increased earnings despite lower anticipated revenue. And now, let's focus on orders. Last quarter, we discussed a broader softness in global markets due to trade disputes and other macroeconomic factors. These conditions have persisted in the third quarter, resulting in orders which were short of a prior year level. The Americas led the overall decline due in part to our strong bookings in the prior year of new product introductions that carried over from Crane Days. Our year-over-year decline was broad-based across all product lines. For the first time in a long while, South America is showing signs of life, which has continued into our October bookings. In EURAF, the reduction was not nearly as dramatic, and was concentrated in one particular product line within towers in Germany. On the plus side, Benelux, Spain, Portugal and Italy showed growth. In MEAP, the Asia Pac region of our business performed very well. However, the Middle East continues to be an area of focus for improvement. As our orders indicate, we are in a slowing environment. During the quarter, we began the process of aligning our production levels with current demand and are prepared to adequately react to market conditions in a positive or negative because as you are aware, this business can turn very quickly. Dealer inventory across all markets is properly aligned with current market expectations. Market feedback from our key customers as it still remains a high level of utilization of key equipment, but very few are talking about fleet expansion due to all the factors that have been discussed ad nauseam. With that, I'll turn the call over to David to walk us through our financial results in more detail as well as provide color on our updated full-year guidance.

Thanks, Barry, and good morning, everyone. Let's move to slide three. Net sales were $448 million for the quarter, essentially flat year-over-year on a currency-adjusted basis, net sales for the quarter were $457 million, an increase of $7 million or 2% year-over-year. The Americas segment continued to perform well as sales increased 12% year-over-year, driven by higher shipments primarily for the expansion of our customers’ rental fleets. In EURAF net sales declined 9%, 5% on a currency neutral basis. This decline was primarily due to reduced shipments to the commercial construction and market. The MEAP segment net sales declined $13 million on a currency neutral basis, primarily due to reduced shipments to the Middle East. Our execution on the items within our control was excellent, as we expanded adjusted operating margins by 280 basis points to 7.6% with strong contributions from favorable price realization and cost reductions throughout the business. Our adjusted EBITDA in the quarter was $43 million versus $31 million in the prior year, a 40% increase on essentially flat revenue. Interest expense in the quarter totaled $7 million, compared to $10 million in the prior year. The overall effective interest rate in the quarter was 9%, compared to 12% in the prior year, reflecting the benefit of the refinancing of our debt and lower average borrowings in the quarter. GAAP net income was $18 million or $0.51 per diluted share, as compared to $12 million or $0.32 per diluted share in the prior year. Adjusted net income for the quarter was $19 million or $0.54 per diluted share, an improvement of $12 million or $0.34 per diluted share, compared to the third quarter of 2018. Cash flows provided by operating activities on a GAAP basis were $38 million, compared to adjusted cash flows from operating activities of $8 million last year. This was mainly driven by improved management of our working capital in the quarter. As of September 30th, our total liquidity was $354 million with no borrowings outstanding on our ABL revolver. The net debt to adjusted EBITDA ratio was a healthy 1.6 times. Our ABL capacity coupled with a low net debt ratio provides us with ample liquidity to execute on our growth strategies while meeting ongoing operational tax requirements. Turning to slide four, please refer to our updated 2019 full-year guidance. To highlight the most notable items, we have decreased our revenue guidance from 1,850 million to 1,880 million, which represents a year-over-year change of approximately flat to up 2%; and increased our adjusted EBITDA guidance to $145 million to $160 million, which represents a year-over-year increase of approximately 25% to 38%. This guidance assumes normal seasonality, which will adversely affect the fourth quarter results due to higher sales of used equipment, a lower percentage of aftermarket business, and lower production hours. With that, I will now turn the call back to Barry.

Thank you, David. As we look ahead, we are mindful of the uncertain market conditions that exist. So, rest assured, our commitment to drive innovation and velocity through all of our businesses processes, remains steadfast. The introduction of new products, productivity initiatives and cost controls will continue to position us to navigate these uncertain times, while ensuring positive returns to our shareholders and investing in future growth and innovation. Recently, we completed a review of our new product pipeline and came away very pleased with the progress we are making in developing products that incorporate the voice of customer. I am confident that our innovation strategy is well-positioned to deliver highly productive cranes to our customers. Five of these new products will be introduced at the ConExpo Trade Show in Las Vegas next March. As we continue on our lean journey, our investments to increase velocity are delivering productivity improvements. Last week, at our Niella, Italy factory, I witnessed substantial improvement in throughput. Gone are the days of batch production. The investment that we have talked about in the past has resulted in significant increase in the number of cranes produced per shift with less manpower. The team remains focused on continuous improvement, and I'm very proud of the progress they have made. Our journey continues to evolve. And now, I'd like to comment on our M&A activity. We remain very optimistic about our ability to continue to reposition Manitowoc as the type of company that can deliver superior returns to our shareholders throughout the cycle. Our balance between organic and inorganic growth is healthy. While our pipeline remains robust for acquisitions, we're being extremely disciplined in our approach, none are imminent, but we remain focused on delivering growth that continues to add to our recurring revenue, while ensuring our internal stringent criteria are met. To summarize, we delivered solid results in the third quarter, including positive operating cash flow. In response to a slowing crane cycle, our strong execution, proactive cost control, and investment in productivity actions underscore how we manage our business. Throughout the business cycle, we remain focused on driving productivity, efficiency and cost reduction actions. With the stronger foundation in place, we are confident our strategy works and will continue to provide returns to our shareholders throughout the cycle. With that, operator, I'll turn it back to you. You can open up the line for questions.

Thank you. [Operator instructions] We can now take the first question from Seth Weber of RBC Capital Markets. Please go ahead.

Nice job on the margins here in the quarter. I wanted to ask, I know you're not talking to next year yet. But, can you just, from a high level, talk about whether you think margins can continue to expand next year in a scenario where revenues are down potentially double digits? Thanks.

Seth, that’s always our goal. A lot of it I think depends on mix. We have done what I would call a fantastic job of aligning our breakeven point to where we believe the bottom of the market could be. We have continual opportunity to manage our SG&A. But, you should also realize that we remain resolute on continuing to expand our margins irregardless of what tries to happen to us from a market perspective.

Was there anything in the mix here in the third quarter that was particularly helpful to you? And maybe, can you just talk to your expectations for production in the fourth quarter versus kind of where we were in the third quarter? Thanks.

From a mix standpoint, I think we were pretty much where we've been historically in the third quarter. We have some Americas mobile mix that tends to rear its head in the third quarter, which helps us in some regards. And towers was pretty much where we expected it to be. So, from a mix perspective, maybe a little helpful from the Americas. Otherwise, I would say, we’re pretty much where we historically have been. As far as the fourth quarter is concerned, yes, of course, we began aligning our production in the third quarter with what you're anticipating demand to be. And we will continue to monitor that and adjust that as our order rates indicate.

Okay, thanks. And then, maybe just a quick follow-up for Dave. You commented on the inventory reduction being on track. Can you just talk about the used crane market in general and what you're seeing? I know, part of that reduction is used cranes. Can you just frame what you're seeing out there in the used crane market? Thanks.

So, I think generally speaking, prices have been fairly stable in the used crane market right now. We don't anticipate any changes and our guidance doesn’t anticipate any changes to that. So, it’s steady as she goes within that market.

Our next question comes from Mig Dobre of Baird. Please go ahead.

I also have a quick question for Dave. How do you think about free cash flow in the context of your updated guidance?

So, I think, generally speaking, Mig, we're looking at generating $60 million in Q4.

Okay. That’s helpful. And then, I'm also wondering, from a order’s perspective, I know there is a little bit of seasonality in the fourth quarter, you normally see a bit of an uptick sequentially, but there a lot of crosscurrents in the market. So, can you maybe level set expectations for us? Should we expect the normal seasonality here or are you thinking, I don't know, maybe a little bit?

Well, I think, I don't suspect sequential weakness. In fact, we disclosed October, and our October orders were in line with what we would have expected from prior years. So, I'm pleased to see that October kind of had a slight uptick. And, I mentioned some of the regions in my prepared remarks where, in fact that were being held. I mean, we -- there was a time when South America was a very substantial portion of the revenue of this company. And for the last four years since I've been here, it's been virtually nonexistent. But, in the last couple of months, we're seeing some uptick there. So, that's very positive for us. So, I think, there are still a lot of our customers are in the wait and see mode. As I mentioned I've talked to a number of them over the course of the last month that their equipment is out working, they're continuing to think about investment, but a lot of it depends on what the temperature is out of Washington, DC.

Okay. Barry, just to clarify on your October comments, were you saying that October was basically in line order-wise where you were in 2018, or am I misunderstanding?

Correct. That's correct.

I mean, the fourth quarter of a ‘18, that was a very nice order intake quarter. So, I mean, at least in theory that would be kind of a tough time. So, that's good news...

It's got very tough comp. But, as I said, I remain encouraged that we're doing all the right things. And we’ll see where it ends up at December 31.

Okay. Last question for me. As we're thinking about ConExpo, I know that trade show is a big deal for you guys. How should we think about the new product introduction over there in terms of the potential order that -- impact that I might have on orders? And there is also an expense associated with this that we have to follow -- to put through margin. So, can you can you help us out in modeling that?

Yes. ConExpo SG&A hit will be $3 million. It's pretty consistent. That's usually what our impact is. The new products that we're introducing this year, I think will in fact well exceed that in margin because these five cranes are continued evolution of the product line. I don't want to give too many away. But, I think there's going to be as much excitement at ConExpo with our new products as there has been at particularly like Crane Days a year ago -- over a year ago now.

Thank you. And I move to our next, Jerry Revich of Goldman Sachs. Please go ahead.

Hi. Good morning, everyone. This is Ben Burud on for Jerry. Your 4Q implied EBITDA guidance ranges from about $19 million to $34 million. And you mentioned earlier your normal seasonality, but when we apply what we're modeling to 4Q EBITDA, that implies 4Q EBITDA around let’s say $40 million. Can you step us through how you arrived at that 4Q range? Is there general conservatism baked into the number or are there some timing related items that we should be made aware of?

Yes. I mean, I think, we articulated a couple of the key points. There is going to be -- as a percentage, there is going to be lower aftermarket business, both in dollars and percentage. There is going to be higher used equipment sales, which are sold at much lower levels than typical equipment. And we are going to have a slowdown in the manufacturing where we have less hours within the manufacturing facilities, particularly in the mobile facilities than we did in Q3. So, understand what your items are. I think that generally speaking we looked at where we're going to be, and the midpoint gives us somewhere about $27 million of EBITDA. So, we feel pretty good, attaining the numbers we put out there. Ben, the other thing I'll is that we -- there is a reason we don't give quarterly guidance, right? Because a crane sale or few crane sales that move out from quarter-to-quarter, really impact what those quarter's results are. We had some good mix, as Barry indicated, with the Americas in the quarter. So, that plays into as well. So, we look at our guidance as attaining a year result versus looking at it on a quarter-by-quarter specific basis.

Got it. And on that point, when we think about the next six months order cadences with ConExpo being in March, is there any chance that orders are pushed out into 1Q from 4Q, just to make sure we're modeling it accurately, based on seasonality?

Yes, I mean, absolutely, because quite frankly -- and I’ve been very transparent about this. Customers love to come to the booth, love to shake your hand and love to celebrate with a glass of champagne their order for the year. So, absolutely, I would expect that if there are large orders that some of our dealer network are planning to place, they will in fact bring them in hand to ConExpo.

Got it. And finally, pricing has been a great tailwind for you guys in recent quarters, particularly in aftermarket. Can you just give us an idea about what's been supporting that improvement? And if there's any difference in pricing strength on the aftermarket side across your different regional markets?

Yes. I mean, aftermarket is always strong. I mean, we use a very sophisticated program to analyze our aftermarket pricing to aid us in that. So, I'm very happy with that. I also think some of the recent consolidation that's happened in the industry is helping to stabilize pricing. We've already seen the effects of that, some of that in Europe, which is really a positive for us going forward.

Awesome. Thank you.

You're very welcome.

Thank you. We'll now move to our next question, it comes from Ann Duignan from J.P. Morgan. Please go ahead.

Good morning. This is Tom Simonitsch on for Ann.

Yes. Hi, Tom.

Hi. Just following up on the price cost question there. On your low-cost country sourcing, how much of the incremental benefit of that initiative do you expect will be realized this year versus 2020 and beyond?

It will be more in 2020 and beyond.

Okay. And then, just looking at European orders, I think you noted a slowdown in Germany, and you previously highlighted France as a weak spot. Can you just provide some more color on those markets in particular?

Yes. I think, Germany exhibited much lower strength than France. We hope that some of that is just seasonal and starting vacations and extending vacations little longer than what has historically been the case. But, France is doing okay from -- performing right at our expectations. If you heard in the prepared remarks, what's interesting is that countries like Italy and Portugal and Spain are in fact starting to return to growth, which is something that is very much appreciated by us, but somewhat surprising. And we’re just going to have to continue to monitor as we go forward.

And just lastly for me on the inventory reduction, last quarter, you detailed those three initiatives. Could you maybe just quantify the contribution of those three initiatives towards the $80 million target?

I think, generally speaking, when we look at where we are today and the balance sheet, we reduced inventory by $30 million. We have plans in place that have been developed by the team, to get another $50 million at inventory. And we’ve historically reduced our inventory levels in the fourth quarter significantly. The team still meets weekly. We have identified target areas for the inventory reduction. And quite honestly, we feel very good about our ability to attain that reduction in Q4.

And I move to our next question, comes from Steven Fisher of UBS. Please go ahead.

On the cash flow, it was a nice positive quarter, but could have been even really stronger without that $59 million payable headwind. I don’t know if I missed it. But, could you talk a little bit about what drove that and what the potential is to see that reverse.

Yes, sure. That’s a good question. So, I think, generally speaking, when you look at Q3, we have a reduction in our overall payables within the organization. And that’s what I will see is due to seasonality, and that's associated with a number of items in Europe. As you know, we have Germany and France plant shutdowns in there. I think, there are really two main factors. Number one is that in the U.S. we brought in less materials, which resulted in a lower overall quarter over quarter payables level. And then with Europe because we had extended shutdown particular in France, what we ended up doing is we ended up bringing materially in July, which would then be payable in September. So, those bills were paid in accordance with our vendors’ terms. And that resulted in a decline as well. It’s something that we watch closely, we look at the days. And I would expect that our days are going to be back to normal in the fourth quarter.

So, embedded in your $60 million of cash flow for Q4, is that a combination of benefit from both inventory and payables?

That is correct.

Okay, thanks. And then, in terms of the North American market, can you just maybe give a little bit more color on sort what you’re seeing in the flow of business and orders by production type and end market over the last few months, between the non-res and infrastructure industrial et cetera? That would be helpful. Thanks.

Yes. I mean, we're still seeing non-res expansion, albeit at a lower rate, particularly on the West Coast. The West Coast has been very, very strong in the tower business in particular. So, a little pause in that in the third quarter, but I think that will end up reversing itself. Continue to see -- with the state infrastructure bills that are out there, we're continuing to see our RTs in particular being introduced into that area. We're also seeing nice lift from the introduction of our 100-ton crawler crane that's manufactured here in the U.S. That's definitely being positioned 100% at infrastructure. If there was one area in North America where I'd say we saw somewhat of a decline in a particular area, I would say it’s at the wellhead with our AT production?

Thank you. We’ll now move to our next question which comes from Jamie Cook of Credit Suisse. Please go ahead.

Most of my questions have been answered. But I guess, just Barry, you’ve been talking about M&A on and off now for some period of time. So, can you just give some color on sort of how close you are to doing something, given the markets are a little softer broadly across the industrial landscape, are multiple starting to become more attractive, and is this sort of like an opportunity we could see, I guess, in the I know next six to nine months?

I would say that your observation about multiple contraction is right on the money. People are coming, in my opinion, back into the realm of what I would consider the opportunity for us to make acquisitions in an accretive nature. We have a number of limitations in our credit agreement, but we have made I think absolute great progress in the amount of conversations and further work that we're doing with our pipeline. And to be perfectly honest, I would say I would be very surprised that if in the next nine months we don't have an acquisition completed.

Okay. And then, I guess, I understand sort of the doom and gloom out there. But, the crane cycle’s been one of those or crane equipment’s been one of those markets that have been the only sort of industrial market that has remained fairly depressed since the financial crisis, I guess. And so, is there something structural that you think is going on there? And assuming we got China trade war resolved, how would you think about sort of the pace of recovery as that happened? Thank you.

Yes. That's a very good question. In fact, let me just give you a little background here. If I look at the crane business at Manitowoc, from 2007 through 2015, prior to us becoming a standalone crane company. And if I took the high year out, which would have been 2009 and the low year out, and I averaged all those years of revenue, it comes roughly $2.4 billion. If I average the revenue from 2016 to 2019 with our implied guidance for the year, that revenue is $1.725 billion, overall, on average, a 30% reduction. Now, at some point in time, and I wish I could pinpoint, that 30% reduction has got to come back to fruition, because when you look at the amount of activity that's in the economy, compared to the years that I just mentioned, it’s much higher. So, at some point in time, and I wish, Jamie, I could -- wish I could put my finger on exactly when that point is. We're going to get back to the days where are over $2 billion in revenue in our core business. And you can do very simple math to see what that incremental between the average of 1.7 and $2 billion, what the incrementals would mean to us, based on all the work that we've done from a cost structure standpoint. We are a completely different profiled company at $2 billion in revenue, than we are at average $1.7 billion. So, I don't know when that day is, but I certainly am anxiously awaiting and looking forward to the opportunity to demonstrate to everyone what this Company's potential is, with that type of revenue.

Okay.

I hope that answers your question.

Yes, that does. I appreciate the color. Thank you.

You're welcome.

Thanks you. We will now take our next question from Stephen Volkmann of Jefferies. Please go ahead.

Hi. Good morning, guys. Most of my have been done as well. But, Dave, I think, you said something price being positive relative to sort of the margin performance in the quarter. And I'm just curious if you have any broader commentary around pricing. And as orders kind of are harder to come by, is pricing also getting harder to come by. And then, I'll just glime on with the fact that there has been obviously some change in the competitive dynamic or ownership around some of your competitors, and is anything happening there relative to kind of pricing or aggressiveness of competition in the market? And I will leave it there.

Let me start off little bit from the broader market perspective, and then David can get into more of the specifics. I will say that I'm very pleased with the amount of discipline that exists in the market currently. As I said earlier, I think some of the consolidation that's taken place has helped that. And I don't see any reason why that doesn't continue into the future. So, from a pricing perspective, I would say, even though there's a bit of pause in the order rates, the major manufacturers have been what I would call, disciplined in the approach. And David, I’ll turn it over to you for more color.

Yes. So, Steve, I think that, what we’ve seen recently is that when you look at different areas, some of the areas that have been historically at low levels of pricing have seen price increases, and that's throughout what I’ll say all the competitors within that particular area. Certain areas are better than others. We’ve obviously talked about the Americas and some of the actions that we’ve taken there. The Middle East, obviously a bit harder, South America bit harder as well. But, for the most part, I'd say, it’s steady as she goes for right now. And the pricing actions have been sticking. And we think that's good for the industry.

Great. That's helpful. I appreciate. Thanks.

You're welcome.

Our next question comes from Mike Shlisky of Dougherty & Company. Please go ahead.

So, I wanted to follow up to your answer to Jamie's question earlier about the average business you did prior to 2018, and since then. I think for a good portion of that decade or so, prior to the spinoff, you had much higher market share and in ‘16 and since you’re kind of -- you kind of started the period at the lowest point of share in certain key categories. So, my question is, I mean, it sounds like part of the ramp back to that 2 billion might be some share improvement over the next couple of years. So, could you give any comments for us as to perhaps this year so far how has your share trended in certain in key heavier categories, if you will?

In areas where we have invested in technology, our share has returned to historical highs.

In every single category?

In areas of the business where we have dedicated new product development, take our truck claims for experience, we lost, I’m not going to tell you how many basis points, but I can’t even say if there is bps because it’s percentage points, but it’s a lot of basis points. We’re back to historical highs because we invested in the new TMS9000, which carried on a TMS500, which will carry on to the TMS new that we’ll be introducing in the next six months. So, where we have -- your historical perspective is absolutely correct. But today, sitting here in November of 2019, we are a much different company than when we were in January of 2016. Not only from a market share standpoint, but overall from a competitive standpoint, overall from a technology standpoint, overall from an aftermarket and response at this standpoint. So, you cannot, in my opinion, draw a conclusion that the revenue degradation of 30% over that period is due to market share less. That is false.

Okay. That is good to hear. I also wanted to ask, it wasn’t really discussed much yet on the call about the crane carrying parts efforts you’ve been doing. Can you tell us as to how that’s gone this year and whether there is more to go in 2020 you think?

Yes. Mike, I think that’s a continual process. We continue to make strides when looking at fill rates then quicker response time and overall profitability of our parts business. So, I’d say that we're very pleased with the 2019 outcome. And we believe that 2020 is going to deliver more the same.

Our next question comes from Mig Dobre of Baird. Please go ahead.

Hey. Thank you for taking my follow-up. I have a quick question on backlog. And I'm wondering how you're thinking about the minimal levels of backlog that you need in order to be able to do proper production planning, essentially -- depending on how orders progress, is there a particular amount that you have in mind to where you're adjusting production to make sure you don't go -- you don't erode the backlog past at certain point?

So, Mig, it's a great question. I mean, obviously, when you look at our backlog today, we are at $467 million at this point in time. I think, our low point, when you look at year-end was 2016, when we were at $324 million. I generally say that we're going to wait and see how our Q4 orders come. You kind of have an idea where our revenues, our top line revenues going to be. So, we don't anticipate being anywhere near the 2016 low. But obviously, if the trend continues, we can react conversely. If there is pickup in orders in there, we have the ability to react and ramp up as quickly as we need. So, I think, it's good in the sense that we have levers to pull whether we go up or down in that regard.

Right. I mean, look, we’ll see exactly where the fourth quarter shakes out order wise. But, stating the obvious, your backlog has been coming down and your revenues are year-to-date have ran well ahead of orders. So, you're not providing 2020 guidance. But, is it fair to basically say that we should be thinking that revenues in 20 are probably going to end up being somewhere close to where 2019 orders were, given what's happened to backlog?

I think that is an assumption that one could make. But again, I'm not willing to make that as a statement, until we see what happens in the fourth quarter. I think, we have multiple plans for next year, and all of those plans have different assumptions in those. And we’ll be in a much better position to call 2020 sitting here at December 31 than we are today.

I appreciate that. This was just sort of a mathematical question, if you would. My final question is on margin. Again, when I'm looking at my model and plugging in your guidance, it looks like you're assuming a decremental margin on EBITDA of call it low-20s or right around 20 for the fourth quarter. If one were to assume revenue decline in 2020, is this the level of decremental margin that we should be operating with or do you have something else in mind?

No. That's not the level of decremental margin you should be operating within 2020.

Can you expand on that?

Yes. I think, Mig, when you look at it, the fourth quarter is a little bit of an anomaly when it comes to the decline in your midpoint. I think, what you’re saying is that if we look -- are you looking at on a quarter-over-quarter basis where we're about $21 million down, and $4 million down on EBITDA, which is about your 20% range. I mean we've always said that when you look at decrementals within the year but I'm putting a plan together, I'm not quite sure that that would hold true for the 2020 plan at this point in time. But we’ll let you know in February.

I appreciate that. But I mean, look, if your volume is down, it's hard for margins not to feel that, that's what I'm trying to say here.

Yes. I understood…

We might as well have these expectations lined up, even though you're not providing guidance. I mean, we're going to have to come up with estimates. So, that's why I'm pushing you on.

Yes. No, I agree with you in there. When you look at the flow through of our revenue, I think that's the key consideration of where we’d be. And obviously the other alternative is to where SG&A comes out in the whole process as well.

All right. Well, thanks for the color. I'll follow up offline.

Thank you.

Thank you. And our next question comes from Larry DeMaria of William Blair. Please go ahead.

Hey. Thanks. Good morning. Two questions.

Good morning, Larry.

Good morning, guys. Obviously, you talked about pricing positive contribution. Sorry, if I missed this. But, can you talk specifically about material costs in the quarter and how that looks moving forward? And secondly, interesting analysis, you talked about the product cycles and averages and stuff. If we think about the productivity of the cranes over the last few years versus the prior period, is it possible that the productivity offset is one of the reasons for the offsets in volume and sales? I was just curious to hear your thoughts on that. Thanks.

There is no question that our new products are more competitive and more productive than others. What I would say is the limiting factor right now to market expansion is manpower. You talk to our large rental houses and the biggest issue they have with taking on new work is getting qualified crane operators to operate the equipment. So, they've become more sophisticated in their financial modeling than they may have been in another cycles, because in other cycles they may have said you know they're willing to bet on the come that that labor is going to free up. But I think, as some of these crane rental companies have become part of more sophisticated private equity firms, the discipline has in fact creeped its way in from a financial standpoint. But, overall, as I said, the number of cranes that are out there are being highly utilized, and at some point in time, and as I told Jamie, I wish I could predict when that time is, that is going to -- we’re going to return to those levels and then we will definitely be able to show everyone exactly the types of results that we've been exhibiting in the past, but also much improved.

So, you reckon, Barry, that if labor wasn't as tight as it is for those -- that orders would be higher, you'd selling a lot more right now.

There's no question in my mind that orders would be higher if labor was available. I mean, all you have to do is go down the southern part of the country and look at Louisiana and look at Texas. I mean, you've got all these large projects that are on the board to go in fact be funded and start being built. But, the absence of labor and the absence of equipment is the limiting factor at this point. And until confidence returns that we're not going to be at a trade war and that the economy is going to come to a screeching halt as a result of a certain person being elected, then I think we will see expansion again in the U.S.

That's interesting. Thank you. And then just on the material cost?

David?

So, I would say, pretty sequentially, pretty flat. Year-over-year, I think, we have some -- a bit of a benefits, but not material enough to call out.

Okay. Thanks very much. Great job and good luck.

Thank you.

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

Thank you. Before we conclude today's call, please not that a replay of our third quarter 2019 conference call will be available later this morning by accessing 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 next quarter. Have a good day, everyone.

This concludes today's call. Thank you all for your participation. You may now disconnect.