Good morning, everyone, and welcome to the Manitowoc conference call to review the company's second 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 & Presentations. We will reserve time for questions and answers after our prepared remarks. I would like to request that you limit your questions to one and a follow-up and return to the queue to ensure everyone has an opportunity to ask their questions. Please turn to Slide 2. Please note our safe harbor statement in the material provided for this call. During today's call, forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, are made based on the company's current assessment of its markets and other factors that affect its business. However, actual results could differ materially from any implied or actual projections due to one or more of the factors, among others, described in the company's latest SEC filings. The Manitowoc Company does not undertake any obligation to update or revise any forward-looking 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.

Thank you, Ion, and good morning, everyone. Please move to Slide 3. Before jumping into my update on the crane market, I would like to provide some color from our Crane Days event in May. First and foremost, it was a very successful event with over 850 customers and dealers visiting our Shady Grove campus. We hosted attendees from 18 countries and showcased 35 cranes garnering excellent feedback. It takes an enormous team effort to pull one of these events off, a huge thank you to the team involved and a big thank you to our customers and dealers that showed up in force. Although there was plenty of banter regarding the next six months around the impact of the presidential election cycle, I had multiple customers tell me that they see a wave of infrastructure work on the horizon in the U.S. and they expect a strong market for the next several years. While not reflected in all the public data, crane professionals are actively quoting projects for roadwork, bridges, rail, power generation, and power transmission. And of course, everyone is seeing incredible momentum to build data centers to support the AI boom. These centers will consume massive amounts of electricity, and people see this as a potential second leg of demand. Unfortunately, however, we haven't started to see this good news translate into orders yet. The current operating environment remains very challenging around the world. For sure, the geopolitical environment and high interest rates are taking their toll, and elections around the world have created even greater uncertainty. Consequently, customers are slow to move forward on orders. In addition, issues such as part shortages and shipping vessel disruptions have improved since the peak of the COVID era, but they surely haven't gone away. To recap the second quarter, orders were down 22% year-over-year, and total backlog ended the period at a still strong $836 million. Please turn to Slide 4. Starting with the market overview, in the Americas, the mobile crane industry remains solid with good utilization. Many of the big crane rental houses are talking about buying new equipment, and our quote logs are very strong. Nevertheless, this positive momentum hasn't yet resulted in customer purchasing activity. First, many customers are struggling to find crane operators. I had multiple customers tell me recently that they can't grow their fleets until they can find additional operators. Second, we, as well as our dealers, have seen an abnormally large number of requests for RPOs or rent-to-purchase deals. I speculate that folks are hesitant to lock in the current interest rates with the expectations that rates will decline. As I've stated many times, the crane industry always slows down as we approach a U.S. election. We clearly saw this in our orders during the second quarter, and I expect to see more of the same in the third quarter. Moving to dealer inventory, current levels in the U.S. are mixed. Rough terrain and all-terrain cranes have been at the high end of the range for several quarters. On the other hand, boom truck dealer inventory is at low levels. In conclusion, crane operators are clearly gaining confidence in the business, and interest in ordering new cranes is strong. At this point, however, we need to get through the election, and any reduction in interest rates would help. It sure feels like a crane renaissance, particularly in the U.S., is just around the corner. Turning to Europe, it was a tough second quarter, as if the Ukrainian situation wasn't enough upheaval in the region, snap elections and a general concern for previous coalition governments in the U.K., France, and Germany have led to more uncertainty. Starting with mobile cranes, although orders were surprisingly light during the period, crane activity at large crane rental houses remained strong. Similar to the U.S. situation, everyone is talking about large infrastructure projects for energy and rail. While the local daily crane activity has been okay, the continued slowdown in residential and non-residential construction markets, combined with an unclear political environment and higher interest rates, are making it harder for smaller crane rental houses to make purchasing decisions as they look forward. In terms of the European tower crane market, I'm hopeful that we're at the bottom. New crane orders were down 21% year-over-year, and adjusted EBITDA was roughly a $14 million headwind in the quarter. Looking forward, I don't expect any major news in the third quarter, given the nature of the summer months in Europe. The fourth quarter should give us some indication of what 2025 will look like. My gut says that the best we can hope for is a slow recovery. In the Middle East, although there's been some negative reports in the press on project postponements, quoting activity remains extremely high, particularly in Saudi Arabia. Orders were slightly up year-over-year. While many pundits are skeptical of Saudi's current cash flow, we need to keep in mind the immense scope of Saudi Vision 2030. Even if Saudi adjusts projects over time to address its cash flow situation, it's important to keep in mind that projects like Trojena are underway, and the 2029 Asia Winter Games are only a couple of years away. Moreover, Trojena is more than just a ski hill. It's multiple massive projects of which the centerpiece is a 2.8-kilometer man-made lake that requires building three large dams. The main dam will be 145 meters high and 475 meters long. This is a huge engineering feat. In addition, luxury companies such as Raffles Hotels and The Ritz Carlton have begun to make commitments to build accommodations. The transformation of Saudi will surely have its ups and downs, but it's underway and happening. Moving to Asia Pacific, I recently returned from a two-week visit to the region. The local China market remains very muted without much new news to report, and this continues to overshadow the region. In addition, delays in South Korean semiconductor facilities and commercial construction projects throughout Southeast Asia have contributed to the regional slowdown. It was good, however, to see that Vietnam and Hong Kong are starting to turn the corner, and I'm optimistic that the South Korean market will begin to turn in 2025. In Australia, customer sentiment is very similar to the U.S. Crane activity is good, and excitement is starting to grow around the 2032 Olympics. Customers are slow to place orders as they juggle high interest rates and wage inflation. Please turn to Slide 5. The most exciting news from my trip to Asia was our China team's progress on our large tower crane strategy. From a product standpoint, we've sold 14 MCT 1105s, which was the first large crane that we launched last year. We've erected the prototype MCT 2205, which is currently being tested, and I saw several prototype components for the MCR 815, which will be erected in the fourth quarter. Manufacturing these massive cranes, the team has held several Kaizens, including our annual global Kaizen to increase our physical capacity and improve our overall productivity. A big thank you to my team. On the left side of this slide, you can see some pictures of the area in the factory where we retrofitted the plant to meet the lifting requirements for the big cranes. On the right is a picture from our recent global Kaizen, which was focused on improving our flow, kitting, and material presentation to increase our output. Turning to our aftermarket business, it continues to do well considering the softness in the global tower crane market, which underscores that our strategy is working. Our non-new machine sales in the second quarter were $147 million, only slightly down year-over-year. During the quarter, I visited our MGX, Phoenix, and Salt Lake City branches and I was extremely impressed by how these teams are servicing customers such as the local mines through superior build service support. A big thank you to our branch managers and their teams. I think this is a good point to summarize where we sit for the balance of the year. Orders were lower than anticipated in the second quarter, and I expect order levels to remain depressed until we get through the U.S. election. After weighing the lower demand with our elevated inventory, we adjusted our build schedule to support our year-end free cash flow target. Although this decision will negatively impact our short-term financial performance, which was reflected in our updated guidance, it will better position us as we enter 2025. With that, I'll turn it over to Brian.

Thanks, Aaron, and good morning, everyone. Please move to Slide 6. During the period, we had orders of $428 million, a decrease of 22% from a year ago, bringing our June 30th backlog to $836 million. The lower order intake was primarily in our Americas and European businesses. While mid-term and long-term customer sentiment remains high, the prolonged higher interest rate environment and the political uncertainty around the world has negatively impacted the near-term demand. Net sales in the quarter were $562 million, a decrease of 7% from a year ago. As it relates to our expectation going into the quarter, we missed our net sales significantly. This was driven by four major items: number one, part shortages; number two, logistics and vessel disruptions; number three, a variety of customer financing issues; and number four, lower-than-expected demand for certain products. Our non-new machine sales were $147 million during the quarter, slightly down year-over-year. This was a great accomplishment considering the European tower crane market is at 2009 levels. After adjusting for charges related to the EPA legal matter, SG&A as a percentage of sales was 14%, up 120 basis points year-over-year. This was primarily driven by lower sales in the period. Our adjusted EBITDA for the second quarter was $36 million. The adjusted EBITDA margin was 6.4%, a decrease of 360 basis points from the prior year. European tower crane business continues to be the major headwind with the year-over-year impact to adjusted EBITDA of $14 million. Our GAAP diluted income per share in the quarter was $0.04. On an adjusted basis, diluted income per share was $0.25, a decrease of $0.50 year-over-year. Please turn to Slide 7. Net working capital ended the quarter at $517 million, 24% as a percentage of trailing 12-month sales. The main driver for our increase in working capital continues to be inventory, driven primarily by the sales miss in the second quarter. As Aaron mentioned, we reduced our 2024 build schedule, which will take effect in the second half and help us achieve our year-end inventory target. Moving to cash flows, we generated $11 million of cash from operating activities during the quarter. Capital expenditures were $13 million, of which $6 million was for our rental fleet. During the quarter, we repurchased roughly 478,000 shares for $6 million. In the second half, we will opportunistically look to repurchase additional shares while managing our leverage. We have $29 million remaining under our current authorization. Our cash balance was $38 million and total liquidity was $226 million at the end of the quarter, relatively unchanged from the first quarter. Our net leverage ratio was 2.8 times, which is a reflection of the lower trailing 12-month EBITDA and the higher working capital. As it relates to our debt, our high-yield notes are due in April 2026. While we can't provide specifics, we continue to evaluate our options. Please move to Slide 8. When we set our budget, we expected difficult comparisons in the first half as a result of the slowdown in our European tower crane business. We also assumed a slight rebound in this part of the business in the second half and expected strong mobile demand throughout the year. At this time, it's pretty clear that the European tower crane business will remain at low levels the remainder of the year. In addition, mobile crane orders across our segments have tempered. As such, we've adjusted our full year 2024 guidance: net sales of $2.175 billion to $2.25 billion; adjusted EBITDA of $125 million to $140 million; adjusted diluted earnings per share of $0.45 to $0.90; free cash flows of $30 million to $50 million. With that, I will now turn the call back to Aaron.

Thanks, Brian. Please turn to Slide 9. Entering the year, we knew that 2024 would be an uphill battle, particularly after a great 2023. While the year hasn't played out as expected, I'm very encouraged by the resilience of our non-new machine sales and the growing positive sentiment in many of our core markets. And although we haven't seen the European tower crane business turn the corner yet, as John Templeton said, bull markets are born on pessimism and grow on skepticism. Regardless, Manitowoc is a significantly better company today than when we became a standalone crane company eight years ago. The Manitowoc Way combined with our CRANES+50 strategy has transformed the company and we are still in the early innings of the game. I would remind everyone that since we launched CRANES+50, we've grown our higher margin, less cyclical aftermarket business by 34%. By any standard, that's a great accomplishment and puts us in a much better position to drive shareholder value long-term. With that, I'll open it up to questions.

Thank you. Your first question comes from the line of Steve Volkmann with Jefferies. Your line is open.

Good morning, guys. Thank you for taking the question. So, kind of interesting sort of near-term, long-term dichotomy here because it feels like things really sort of zigzagged on you in the quarter here. So I guess my first question is, what really changed in the last 90 days that really moved this so aggressively? And the second thing is, Aaron, it feels like you're actually more optimistic on sort of the out-years, and I'm curious what's pivoted there that's made you kind of more optimistic if I'm reading your tone right?

We continue to see significant opportunities in large infrastructure projects. Recently, a $2.2 billion bill for power transmission was announced, which highlights the potential in that sector. Conversations with our dealers in the northeastern states indicate that they foresee work in power transmission for the next decade. Major builders are finally beginning to emerge, and these large projects will lead to increased crane activity. We remain optimistic long-term, and it's encouraging to hear that crane operators are starting to notice this activity, which hasn't been prevalent until now. However, in the short term, the business has slowed down since May and remains subdued. Our July orders totaled $121 million, which reflects that trend. Additionally, recent developments in the U.S. election and interest rate discussions have negatively impacted short-term confidence, making it difficult for people to commit to new orders.

Okay. All right. Thanks. Anything to call out sort of on competitive dynamics or price cost? Any headwinds there we should know about?

Yeah. I mean, out of Asia Pac and in the Middle East where we compete with the Chinese, that definitely has gotten more aggressive. So, there's been a little bit of price compression. In terms of the normal western markets, I wouldn't say anything's changed.

Yeah. I'd say just it was nice to see the Bank of Japan raise interest rates and then the yen strengthened a bit, but it's still pretty high. So, from a competitive standpoint, that's definitely still impacting us.

All right. Thank you, guys.

Thanks, Steve.

Your next question comes from the line of Mig Dobre with Baird. Your line is open.

Good morning, Mig.

Hi, Mig.

Thank you for addressing my question. I apologize for my voice as I am not feeling well. I would like to understand the production adjustments for the latter half of the year, specifically comparing the third and fourth quarters. Is there a more significant impact in one quarter over the other? Additionally, how should we assess the margins? Thank you.

Q3 is typically our weakest quarter, and I expect that trend to continue, particularly in Europe, where the tower crane business remains sluggish. As a result, Q3 will likely generate lower revenue and margins compared to Q4, which historically tends to be stronger. From a timing perspective, I anticipate that Q4 will show higher revenue and higher margins than Q3. While we don’t provide specific quarterly guidance, this is the general expectation.

Okay. To follow up on Steve's questions about the long-term outlook, I want to challenge that a bit. If we consider what we've experienced in 2023 and moving into 2024, this period has seen some of the highest levels of activity in non-residential construction in the U.S. The manufacturing sector has significantly grown due to mega projects. Additionally, public spending on streets and highways in 2023 has been very strong. However, we are now seeing a deceleration in 2024, and the trends indicate lower levels of activity ahead. I'm curious about two things: First, why haven't we seen a stronger level of orders for cranes despite the robust construction activity? Secondly, how confident can we be that we will see a further increase in demand from current levels? Thank you.

First of all, in relation to commercial construction, if you look back to 2016 and 2017, it increased by 20%. At the same time, crane orders were relatively flat, indicating a weak period for us. We received many inquiries during that time about the level of activity. There's no strong correlation between the crane business and non-residential segments. We can see that the current data is unfavorable, unlike before when it was more favorable. The lack of stronger demand can largely be attributed to the interest rate environment we've seen over the past year. Looking ahead, there are still many significant projects that have yet to be carried out, and the permitting process for these large projects is taking an extensive amount of time. Additionally, the average fleet age among major crane rental firms still sits in the mid-teens, which needs to be addressed eventually.

We've previously mentioned that our customers make purchases based on confidence. During the quarter, we hosted Crane Days, and the overall sentiment was very positive. As Aaron noted, we met with a customer in the northeast who expressed significant enthusiasm regarding their projects and the demand they foresee. While we can analyze various data points, as Aaron pointed out, we have not observed a correlation between our order rates and that data; it's primarily about customer confidence, which appears to be quite strong.

Okay. Thank you very much, and good luck.

Thanks, Mig.

Your next question comes from the line of Jerry Revich with Goldman Sachs. Your line is open.

Good morning, Jerry.

Hi, Jerry.

Hi. This is Clay filling in for Jerry. I have a quick question about the rent to purchase options. How do those rates compare to normal levels? Additionally, what are the usual conversion rates for rent to purchase? It would be interesting to see if current levels are higher than normal and whether we could improve conversions after the election or if interest rates change.

Yeah. That's much more anecdotal in terms of having data to specifically answer your question. But in I mean, in a normal course, there's certain crane rental houses that just like to do RPOs as part of their financing. So that normal has changed where you've got a lot of folks who normally just buy the cranes are actually asking for RPOs. I'd say it's a discussion that comes up almost every single day or single orders.

Yeah. Even with some of our dealers, we know that...

Yeah. That they do RPOs as well. Yeah.

We believe that customers are hesitant to make purchases if they think interest rates will decrease, and indications suggest that rates may indeed be falling. Therefore, I expect that after the election, there will be an increase in purchases rather than rent-to-own options.

Thanks. And as a separately, how big of an impact were the part shortages you called out in the quarter, and what could a non-new machine sales have been assuming a normal supply?

Yeah. I'd say, I listed out about the four different impacts to our quarter based on where we forecasted. And when you look at across book-to-bill, commercial, logistics and execution with part shortages being part of execution, it's about 25, 25, 25, 25. So, it's sort of even and our internal miss during the quarter was just under $100 million.

Thanks. I'll pass it on.

Your next question comes from the line of Steven Fisher with UBS. Your line is open.

Good morning, Steve.

Thanks. Good morning. Just to follow-up on the last question there about some of the parts shortages and other operational challenges that you mentioned. What kind of visibility do you have to any improvements in those areas?

Yes, managing commercial items and financing is an ongoing challenge due to the high cost of assets, and it seems to be getting more difficult. I expect this situation will continue for the rest of the year as we work to ensure all necessary paperwork is in order, especially since banks are requesting more information than before. Regarding part shortages, we still face the same issues as we did a year ago. For instance, with the GMK, there are 6,000 parts, and it only takes one missing part to halt the crane's operation.

And we're still seeing for certain for our boom trucks, some chassis issues and things like that. So that's an area where demand has continued to be strong, yet there's issues with parts and chassis.

Okay. That's helpful. And then just a couple of quick clarifications. Did you have any order cancellations or deferrals during the quarter? And from a pricing perspective, are you expecting any pricing declines year-over-year in the second half of the year? Thank you.

We had one crane that was canceled, but I wouldn’t say that’s unusual. It happens occasionally, so I’m not too worried about cancellations. Regarding pricing, I believe we will remain aggressive in our competition with the Chinese market, but I do not anticipate any decline in our core product lines in the West in the near term.

Terrific. Thank you very much.

Thanks, Steve.

Your next question comes from the line of Tami Zakaria of JPMorgan. Your line is open.

Good morning, Tami.

Hi, Tami.

Hi, good morning. I have two quick questions. First, I recall you mentioned last year that cranes are now over 20% more expensive due to cost inflation, compounded by the increase in interest rates. This cost burden seems to have dampened demand compared to crane prices before the pandemic. Could you provide an update on current pricing, including financing costs for cranes? Specifically, I would like to understand what level of rate cuts might be needed for demand for cranes to pick up again.

Yeah. I mean, I would say it hasn't really changed from a pricing standpoint. I mean, I have to do the math. I mean, you had 0% to 1% interest rates couple years back, and now you're talking 5%, 6%. So...

Yeah. I'd have to go back to when we actually set it and update the model, but, like, over the last year, I mean, you could look at what interest rates have done and do the math. But I think part of it is just that expectation that interest rates are going to come down. So, why would you do it? I mean, when we talked about the U.S. in particular, we were surprised to see order rates stay as strong as they were because of those interest rates and because of those dynamics.

And I think the much bigger issue we have right now is certainty. I mean, the election has turned into the election situation, and the war is continuing in Ukraine and the Middle East. So, until we get some certainty around those items and even the interest rates, we don't really know where we're headed. So...

Got it. That's helpful. And then, the other question is, non-new machine sales, I think I heard you say it was down a bit in the second quarter. How did that trend versus your original expectation? And do you expect non-new machine sales to stay down for the rest of the year?

Yeah. I think we're pretty proud of where we are from a non-new machine sales perspective, in particular with the tower crane business where it is. They're definitely down in tower cranes, but not as far down as where you'd expect it relative to where the new machines are. So, I think it's around where we expected a little bit shorter really based on some timing on some used machines, but year-over-year, the down is really related to our towers business.

Understood. Thank you.

Thanks, Tami.

Thank you. Before we conclude today's call, please note that a replay of our second quarter 2024 conference call will be available later this morning by accessing the Investor Relations section of our website at manitowoc.com. Thank you for everyone for joining us today and for your continuing interest in The Manitowoc Company. We look forward to speaking with you again next quarter.

This concludes today's conference call. You may now disconnect.