Steven Khail – Director, IR Glen Tellock – Chairman, President and CEO Eric Etchart – SVP; President & General Manager, Manitowoc Cranes Carl Laurino – SVP and CFO Robert Hund – SVP; President – Manitowoc Foodservice.

Charles Brady – BMO Capital Markets Seth Weber – RBC Capital Markets Andrew Kaplowitz – Barclays Capital Schon Williams – BB&T Capital Markets Andrew Buscaglia – Credit Suisse Ted Grace – Susquehanna Financial Group Mircea Dobre – Robert W. Baird Jerry Revich – Goldman Sachs & Company Eli Lustgarten – LongBow Research Nicole DeBlase – Morgan Stanley.

Please stand by we are about to begin. Good day, everyone and welcome to today’s Manitowoc Company, Incorporated First Quarter 2014 Earnings Conference Call. Today’s call is being recorded. At this time I would like to turn the conference to Mr. Khail. Please go ahead, sir..

Good morning, everyone, and thank you for joining Manitowoc’s first quarter earnings conference call. Participating in today’s call will be Glen Tellock, our Chairman and Chief Executive Officer; Carl Laurino, Senior Vice President and Chief Financial Officer; and Eric Etchart, President of Manitowoc Cranes.

Glen will open today’s call by providing some introductory remarks about our quarterly results and business outlook. Following that Eric will comment on our Crane segment results for the first quarter as well as sharing his longer term goals and strategies.

Then Carl will discuss our financial results for the first quarter from an enterprise and segment perspective. Following these prepared remarks we will be joined by Bob Hund, President of Manitowoc Foodservice for our question-and-answer session.

For anyone who is not able to listen to today’s entire call an archived version of this call will be available later this morning. Please visit the Investor Relations section of our corporate website at www.manitowoc.com to access the replay. Before Glen begins his commentary I would like to review our Safe Harbor statement.

This call is taking place on May 2, 2014. During the course of 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 during 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 of new information, future events or other circumstances. With that, I’ll now turn the call over to Glen..

Thanks, Steve, and good morning, everyone. Our first quarter results played out essentially in line with our expectations as we were able to leverage our competitive advantages and benefit from the substantial investments we have made across the Manitowoc enterprise.

In addition, our performance demonstrates the underlying strength of our core business and our ability to adapt to changing conditions reiterating confidence in our full year 2014 outlook. Let briefly touch on each segment in a little more detail. Foodservice reported sales growth of 9% for the first quarter.

This year-over-year increase was driven by continuing progress in North America, substantial growth in EME as well as increasing opportunities in Asia.

Highlighting the positive performance was continued traction with our new grill and oven technologies, the ongoing success with our Koolaire ice machines, and our successfully blended beverage equipment roll-out in EME.

In addition, KitchenCare our aftermarket service and support solutions for Foodservice was officially launched and promises to be a strong contributor to this segment’s performance.

Overall our growth is a testament to our diverse product offerings across the globe as well as our ability to leverage existing customer relationship affording us opportunities to continue demonstrating long-term growth.

During the quarter we also generated improved margins driven largely by our manufacturing initiatives discussed last year, which have increased production efficiency and produced a streamlined cost structure in the Foodservice segment. We have also taken steps aimed at enhancing our customer relationships.

As a result we are supporting their needs with a holistic portfolio of products and services with enhanced speed and efficiency.

Our support includes developing new products that deliver incremental value to our customers, maintaining our focus on Lean improvements and product cost take outs strengthening ties with our customers as well as pursuing opportunities within KitchenCare.

Overall we believe our focus on customer intimacy, synergistic solutions and leveraging our global scale will further drive margin expansion as the year progresses. Turning to our Crane segment first quarter sales declined 14% due to the lower level of backlog at the start of the year, coupled with customer-related project delays.

Correspondingly our Crane segment experienced a year-over-year margin decline as a result of the lower sales volume. That said we experienced good levels of activity in the America’s region coupled with ongoing Tower Crane growth in the Middle East.

Overall we remain encouraged by the opportunities for our Crane segment and are confident in our full year outlook. This is supported by our tremendous showing at ConExpo which once again demonstrated the importance of innovation to our customers and to the construction industry. Eric will provide more detail in the Crane segment momentarily.

Looking forward we are positioning the enterprise for long-term growth. First, we remain at the forefront of product innovation in Crane and Foodservice.

For example, in Foodservice we will be launching new products spanning all of our hot and cold categories throughout 2014, some of which we will showcase at the upcoming National Restaurant Association show validating the strength and competitive advantages within our product lines.

In Crane, the recent introduction of our patented variable position counterweight or VPC crawler crane technology at ConExpo was a resounding success which will positively affect 2015 and beyond. Second, we continue to invest in our global manufacturing initiatives with the ongoing enhancement and rightsizing of our global manufacturing footprint.

These efforts not only improve the class structure of the business but also enhance customer service and accelerate our product development processes. Third, the ongoing implementation of Operation Excellence and quality initiatives remains a key priority for 2014.

These initiatives include sourcing, lean, reliability and organization efficiency gains which should generate over $80 million of gross savings for the full year. And lastly, we remain focused on continuing to improve our capital structure.

To conclude, we are confident in our capabilities to enhance our market leadership position and we remain on track to deliver on 2014 strategic and operational initiatives.

We are committed to leveraging our core competencies and strengths to drive our performance including new product introductions, industry leading aftermarket services and solutions and operational excellence initiatives in the face of persistent macro-economic pressures. With that I’ll turn the call to Eric for a discussion on our Crane segment.

Eric?.

Thank you, Glen and good morning, everyone. Our Crane performed as expected during the first quarter in light of soft overall market conditions and choppy demand in emerging markets. We remain on track with our strategies, the investment that we made in the past few years as well as our short-term and long-term objectives.

As Glen mentioned earlier in the call we experienced a good level of activity in the America’s despite customer related project delays triggered by the unusually cold winter weather.

Overall we believe trends in the region are positive and as we see increased customer optimism we anticipate a greater level of activity as we move throughout the year and into 2015. We have also seen greater demand from Asia and the Middle East and to some extent Europe driven by the activity in Germany and in the UK.

The European driven improvement is an indication that the worst is now behind us in this region. In Brazil activity remained slow. However our recent investment in rough-terrain crane production helped us maintain and grow our market share leadership in the region and positions us well to take advantage when the market improves.

Our Passo Fundo factory also enhanced our ability to serve other Latin American countries. The highlight for the first quarter was our recent participation at ConExpo.

Our interaction and engagement with customers during the show centered on several of our company wide strategic initiatives, including the new standards of innovation and technology that our products are creating in the market.

In fact we introduced 10 new products that will greatly improve customer’s job site efficiency, operating cost and profitability. A key contributor during the event was the introduction of our patented VPC crawler crane technology.

Strong orders for the VPC crawlers coupled with orders for various Potain Tower cranes and Grove mobile cranes drove order rate to its highest levels since before the recession, further supporting our belief that the market is beginning to rebound.

Last year we communicated that we believe crawler cranes had reached an inflection point in North America. Our ability to launch these new VPC products as the market continues to improve should provide significant benefits for Manitowoc and our customers as we look ahead.

Moving on from a product line perspective Tower cranes activity continues to recover, driven by a greater number of projects in the Middle East, sustained demand in Asia and improving conditions in North America and emerging markets, most notably in India despite a weak economy and upcoming elections.

We have seen some substantial order in in the Middle East which supports our belief that Tower crane activity in these regions is likely to see solid demand. We are also seeing improved global demand for all-terrain cranes while rough-terrain cranes experienced ongoing market challenges in the first quarter.

We also experienced continuing success with Manitowoc Crane Care given our strategic investment in this unique aftermarket product support solution for nearly a decade. Overall Crane Care remains a key differentiator of product support across the construction industry and a meaningful source of profitability for our crane business.

To update you on strategic initiatives our continued focus on lean manufacturing and for achieving initiatives drove solid operational efficiency. We have also completed our internal reorganization which included several cost reduction initiatives, improvement in our global product coordination and enhancements to our world class customer service.

While this process has taken a considerable amount of time and effort I am pleased with our team’s progress as we are better positioned for sustainable long term success. We also completed another go-live in our Project One ERP global deployment with our Italian factory now online.

Looking towards the balance of 2014 we remain confident in our Cranes business and our full year expectations given the uneven demand across product lines in regions we will remain committed to controlling what we can and enhancing our profitability in the segment.

I will now turn the call over to Carl to discuss our detailed first quarter financial results.

Carl?.

Thanks Eric and good morning everyone. We reported net sales for the first quarter of $850 million which is a decrease of 5% from a year ago. This top line performance resulted from a 9% increase in Foodservice and a 14% decrease in Crane sales.

The GAAP net loss for the first quarter was $8.8 million or $0.06 per diluted share versus earnings of $10.4 million or $0.08 per diluted share in the first quarter of 2013.

Excluding special items the adjusted earnings from continuing operations was $23.7 million or $0.17 per diluted share in the first quarter of 2013 versus adjusted earnings of $14.6 million or $0.11 per diluted share in the first quarter of 2013.

During the first quarter cash used for continuing operations was $265 million versus $103 million in the prior year quarter driven by working capital requirements to support both segments.

For the remainder of 2014 we will emphasize achieving our cash flow targets as we continue to prioritize debt repayment and also funding our growth and process improvement initiatives.

We expect the pace of our debt reduction to be similar to the seasonal pattern in prior years, meaning that the bulk of our debt reduction will occur in the fourth quarter. Turning to our segment results, Foodservice sales in the first quarter of 2014 totaled $383 million, up 9% from a year ago.

First quarter 2014 operating earnings in Foodservice were $57.9 million. Operating margin of 15.1% were 110 basis points higher than the prior year quarter. The first quarter Foodservice margin comparison was driven primarily by new products and advances realized from ongoing investments in key manufacturing strategies.

Moving to the Crane segment, first quarter sales totaled $467 million, a year-over-year decrease of 14%. Overall Crane segment operating earnings in the first quarter were $22.6 million versus $34.9 million last year. This resulted in a first quarter crane segment operating margin of 4.8%, down 160 basis points.

This year-over-year decline was a function of lower sales volumes but was partially offset by ongoing operational efficiency improvements. Crane backlog at quarter end was $842 million, an increase of $267 million from the prior year quarter. For the first quarter new orders totaled $733 million, which represented a book-to-bill ratio of 1.6 times.

Overall new orders during the quarter increased 29% year-over-year, reflecting the positive showing at the recent ConExpo trade show. Approximately 26% of the backlog will benefit 2015 and later, with less than 10% extending beyond 2015. To conclude let me reiterate our full year 2014 outlook.

As noted in yesterday’s press release we are affirming our guidance for 2014. For the full year we expect mid-single digit revenue gains in the Foodservice and modest revenue growth in Cranes. We expect operating margins in Foodservice will approach a high-teens level while Cranes generate a high single-digit operating margin.

Capital expenditures and interest expense in 2014 will approximate $90 million and $100 million respectively. We anticipate total leverage will decline to below three times debt-to-EBITDA which is well below half of the peak leverage experienced in 2010. Finally we expect the full year effective tax rate to be in the mid to high 20% range.

With that I return the call to Glen for his closing comments..

Thanks Carl. We continue to have great confidence in our business and the strategies we’re implementing across the entire Manitowoc Enterprise.

Overall the growth we experienced in our Foodservice segment during the quarter coupled with our very successful showing at ConExpo in March underscores the strength of our offerings as well as the level of innovation we bring to our customers.

While we expect global economic growth to continue to be somewhat uncertain and challenged, our proven track record to manage the company in any market environment will further position Manitowoc for greater value creation and competitive success as we move ahead. This concludes our prepared remarks for today.

April we will now begin our question-and-answer session..

Thank you. (Operator Instructions). And we’ll first hear from Charlie Brady of BMO Capital Markets..

Thanks, good morning guys..

Good morning Charlie..

With respect to the crane you called out the amount of backlog that’s going to be in 2015 and beyond which is not something you normally do and I guess I’m just trying to understand, is that a function of your customers coming in at ConExpo and ordering and saying give it to me on this date or is a function of the mix has shifted so the lead times on building these cranes more crawlers more towers is just stretching the lead time out a little bit?.

Yeah Charlie obviously good question. The real, I would say desire to put the backlog out there past 2015 or the 12 months period is we thought it would be a disservice if we didn’t do it that way because of the strength of the orders and I would say most of it, almost all of it is the crawlers.

And given the fact that this is arguably the best new product introduction I think we’ve had some years since 1991 I think it’s two things; one people love the technology, they understand what it’s going to do to their business.

And two, when you look at the distribution of the customers around the world there are capacity constraints as to how much you can do. And the reason we pointed out 2015 is the product has to come back to Manitowoc. We are going to finish testing it and that kind of thing.

So really the full production on this doesn’t start until may be late, late fourth quarter but more I would say probably more realistically the first quarter of 2015.

But I think it shows the strength of the confidence in this product by our customers and some of them did say that, if you have – I mean we had one customers had upwards of double digit number of these, they are not going to take them all in 2015, they want them spread over four five quarters.

That’s why we put it out there to say, hey it’s relevant and it shows you the confidence that people have in that crawler backlog which is already is kind of the late comer to the party on expansion of the industry. So that’s why we did it that way and it’s mainly on the VTC technology cranes..

Thanks it’s helpful.

And just as a follow up, can you talk about what’s driving the strength in Towers in the Middle East? I mean that’s an area the world that last peaked that there is considerable crane activity going on, what’s driving that currently?.

Go ahead Eric..

Yeah, Charlie the Middle East is in fact is really rebounding very, very strong for us. So there are different things, I mean Saudi Arabia is playing a big role in that region.

So I mean last year we didn’t see a lot of projects but this year we’ve seen – started probably the end of last year we are seeing a lot of mega projects where it’s the expansion of Medina or the university that’s coming, the metro – we have a lot of infrastructure projects that are taking place in Saudi Arabia.

But it’s not only Saudi Arabia it’s a UAE, obviously the 20-20 World Expo is driving the confidence and Abu Dhabi they have this master plan for 2030. So you have a kind of very changing situation in the Middle East.

If you had up Qatar finally we’ve seen the business in Qatar moving up finally I would say in Q4, 2013 but now we see a lot of projects coming up out of Qatar. And you had Kuwait and Oman and Iraq. So that’s really give us a confidence with the amount of projects that really it’s rebounding.

And if you have read that we have our President in Jebel Ali with our own team but historically we have a very strong distributor in that region that has been performing very well. And then we can offer cranes from Europe but also from China from our wholly-owned factory in Zhangjiagang.

If you put that together that puts the Manitowoc franchise in a very good position in this rebounding situations with towers..

Thank you..

And next we’ll hear from Seth Weber of RBC Capital Markets..

Hey good morning everybody. I just wanted to go back again to this reclassification of the orders and the backlog. I guess my first question is, is this a unique situation, have you – you’ve had obviously the launches in the past.

I mean have you done this type of thing in the past where you’ve had taken order for something but the order is shipping for more than a year out? And then I guess my kind of related question is, are you taking deposits or how are vetting these orders to make sure that they are good and that they are sticky?.

Seth, I’ll take this and I’ll have Carl add some color to it if there anything. But with respect to the past, yeah if you go to before 2009 when even though we had deposits and lot of the backlog eroded when markets crashed in 2009 and 2010. Since then even with new product reduction it’s never been material.

And I think if you go back before, if you go into 2006, ‘7 and ‘8 there is always a lot of talk that everybody wanted to talk about core shadow backlog.

We put a light on the shadow is really we are trying to do because I think it’s before the backlogs were such that it was strong enough to say here is what we have and some people we believed and that’s why really went to twelve months.

You didn’t know if some people were just putting in production slots or if it really was that legitimate backlog and I think that was always the question you have when you out to 14, 15 months. And so that’s why we always did that way.

Now because of the fact that and since 2009 it’s never been material or it’s never been that significant, that’s why we decided to do this time to show the strength of the crawlers which have the longest lead time anyway of any other products that would get you out pass that.

And I think again now with respect to deposits we do have a significant amount of deposits for these cranes because of the acceptance of this new products and people’s rental fleets in businesses. So that hopefully that answers your question and Carl I don’t know did I miss anything on there..

I would just say specific delivery dates is one criterion that would use as well as underwritten finance is another criteria that we scrutinize. And the other comment that I would make is if you go back to the Bauma Trade Show in the second quarter April of 2013, this was not relevant.

We didn’t really have anything material that extended beyond twelve months..

Okay, so just going back to the deposits is it, I mean how should we think about it, is it like a 10% kind of number?.

Yeah I think that’s – that’s a ball park about what it is..

Ball park. Okay and do you think it’s fair – I mean do you get the sense that some of these orders may have siphoned off for a customer who would have otherwise ordered a regular crawler crane that would have hit in twelve months but decided to not order that product and instead take the VPC.

Did you get the sense that there is any of that happening?.

Well I think anytime we have a new product introduction you worry about the cannibalization of the current product you have. But I would say when you look at the 18000 or you look at the 2250 which are the two that are been replaced, I mean there are some customers that are saying hey, can I continue to get that.

You know it’s – the 2250 has been a work horse in our stable for a long, long time and there were comments at ConExpo saying hey I hope you keep the 2250.

So I don’t know that it’s been significant what we look in our plan for 2014, when we put it together last year, we assumed here so many 18000s or so, here is the 2250, here is the 999s knowing that some people still like that crane we have the ability to continue to make it.

And so that’s why we talk about the late production of 2014 or early 2015 for the new VPCs. So there is going to be a little bit of canalization but I think it’s not significant in the sense..

It’s Eric I agree. But I just want to add one thing Seth, back to those orders I mean we have firm orders with down payment but if you look at the orders there they are the ENT, they are rental houses and you add up some distributors but distributors have already kind of retail as well. So I think they are fairly strong orders..

Okay, thank you if – can I slide one more in? Is there any way to quantify these project delays what you talked about? And are they going to – do you expect them to slide though the second quarter or is that just getting pushed out further?.

That’s a good question.

When you talk about weather delays and especially cold weather I guess the question is if it gets warm does that mean it’s better? I think the – I don’t know that we can quantify it other than the fact that it’s mostly obviously North America when you sit and talk to your dealer base and – coming off a dealer meeting that they just had in Chicago earlier this week, it’s a matter of when they can get in and continue to start some of these things.

And in the Midwest look it’s still not very nice weather wise, but I think the rest of the United States I think that kind of makes itself through the second and third quarter and I think it works its way through by then..

Okay. Thank you very much..

My add is up the call at obviously the top line was not exactly what we had planned so it’s for the reasons we talked about and we are reiterating our full year guidance so we do think it comes back..

Okay. Thank you very much guys..

Next we’ll hear from Andrew Kaplowitz of Barclays..

Hey good morning guys. Glen or Eric you obviously had a good crane order quarter in 1Q after a good quarter in 4Q. But now you are going through your seasonally slower period in 2Q and 3Q and especially after ConExpo.

Do you think there is enough demand out there to grow your crane backlog during the seasonally slower time of year, I will just start with that?.

Well, I think you don’t want to hear this as an answer, but I will give it. It depends.

I think what we have Andy is and we hear this a lot, whether it’s in North America, whether it’s in Europe or even I wouldn’t say so much China but I would say other parts of Asia or even South America is I think this is an unusual year because what’s – I will take South America for instance just been there, you have the elections down there.

People are waiting to see what happens in Argentina, people are waiting to see what happens in Chile. They had the election but now the person, the lady that’s the President, she talks about what some of her plans are but there is no specific. So the people are waiting on that.

If you go through all parts of the world and election seem to be playing a big part. India is another example of where we see this. So I think there is an opportunity for some of that to happen.

So I think a lot of the people that we talk to and we go it’s not a matter of if, it’s matter of when? And I think some of that plays out here in North America when you go to the parts of the southwest or the Gulf Coast.

What’s going to happen politically here in the United States, lot of money on the side lines and people want to put it to use but again that’s why I say it depends but I feel good about where we are sitting today in our crane segment, because we have those opportunities, the tower crane business believe or not picking up a little bit in North America.

And so I think there is that, and when people get past ConExpo and they get into their summer months I think people are going to see when you get past the weather that we are talking about people are going to start putting those jobs in the play and I think there is a lot more bidding that comes out.

So I don’t use the word hopeful because hope is not a strategy, but I think I am confident that there are lot of projects that we will be putting to play in the next 12 and 18 months..

May be India the dealer inventory and you know that we track this on a weekly basis here in North America, but that’s a great indication.

And the dealer inventory was I would say a little high when we enter the January, February and even March and because of our project were delayed the retail activity has obviously taken a headwind, but just in the last two to three week we received obviously the dealer inventory depleting and of course we have to see that continues, but that was an encouraging sign that it’s now just about at that level, so we see the retail activity and the RPO also is kind of encouraging because returning to sales typically with a high rate.

I mean we are talking to our dealers earlier in the week as we have mentioned, 70% or 80% the RPO turns into sales that’s kind of indicate also the level of confidence. So if we continue to see that trend I would say yes we should see more activities..

Eric we are two months really after ConExpo you didn’t see a big fall off in activity after ConExpo, did you like you know sort of go-forward at ConExpo as you mentioned?.

No, we did not..

Okay, and then just how much of an inflection are you really seeing in your European tower business. Your competitor yesterday talked about a much better business there. We know you are very underutilized in that French factory I think that’s a big opportunity.

So maybe you can talk about that a little bit, the level of improvement you have seen at that particular factory, in that particular area?.

Okay, my comment related to Europe is not specifically tower crane related it was also mobile crane related.

But however a lot of cranes that we are producing there for sure they will – the French factory are going to benefit from the order intake that we have seen in North America because this is one product line getting tractions and typically in U.S. we are talking about big [inaudible] cranes, so big cranes.

So obviously this French factory are benefitting from this.

But specifically the operation is the tower crane business in Europe, I think it’s good in Germany, it’s good in Switzerland, it’s really picking up the UK, it’s bad in France, the rental rates are terrible and housing would not exceed probably 350,000 whereas the [inaudible] will be exceeding 500,000 but is not materializing.

So we continue to struggle definitely in France and Italy and Spain which were great tower cranes markets.

But I would say that we have seen more orders coming from the countries that I indicated before and the French factory for the absorption of [Cote] will benefit from the increased business as I said in North America and also for the increased business that we are seeing in the Middle East because we can – we are serving these markets with the French factory and the Chinese factories..

But Andy the other thing from – we talk a lot about the operational excellence initiatives.

This is the area where at the beginning of 2013 spent a lot of time, you’ll recall in the last upturn we had three locations in France and that was consolidated to two at the same time leaned out many of the areas of the factory in Charlieu or Moulins and brought many of the activities that we had outsourced back in-house.

And so I think when you look at it the factory is lot different today than it was five years ago. So while yes it’s underutilized the costs are lot less.

So I think that’s where we have a lot of confidence that when that market picks up a little bit you have the benefit of the absorption but at the same time we are in a pretty good state of mind right now in those factories at a lower level of activity..

That’s correct. And then last Andy one of the factories we see the plant for – we proposed the mechanism that we shipped for the cranes we produce in China as well and that activities is fairly strong right now, given the uptick in demand for the cranes manufactured in China..

Thank you guys..

Next we will hear from Schon Williams of BB&T Capital Markets..

Hi, good morning..

Hey, Schon..

I wanted to maybe start on Foodservice here, margins showing some nice improvement on a year-over-year basis, but I mean year ago levels were impacted by the consolidation, by couple of million dollars, I am just wondering kind of an apples-to-apples basis, I would have maybe expected more expansion, given how robust the sales growth has been.

Can you just talk about where we are in terms of the gains on some of the restructuring, are we still early innings, is there more to come and kind of what should we expect as we move throughout the year?.

I will start with that and Bob if you have any comments.

Schon the answer is obviously the expectations for the improvements we expect given the manufacturing changes that we have made are inherent in our guidance to get to that near high teen level and as I would describe it, I would say that’s going certainly when you look at it from a year-over-year perspective it’s going to be skewed to the first three quarters of the year given the success we had late last year in completing those activities.

As you know we did have that unusual item that you referenced in the fourth quarter as well but the expectation is that it will kind of continue to take – particularly this quarter and next quarter..

I would add to that Schon some of the activities that you are talking about we have mentioned some of the things that get to the $80 million that are whether they are lean initiatives or organizational initiatives those are going to benefit mostly the back half of this year.

They do not impact much the first half of this year and those remain on track.

The other thing I think you know whether in our comments or in the release we talked about really the growth at food service been in new products for the margin improvement from new products and the manufacturing initiatives we stay away from the mix because when you look at the overall mix, some of the positives were offset by some of the negatives.

So mix really didn’t benefit us much in the first quarter. Going forward that can have a better opportunity but we didn’t see much in the products mix standpoint in the first quarter..

Thanks, that’s helpful and then maybe question for Carl, interest expense a bit lower than what I expected in the quarter and then the run rate that we are at in the first quarter seems to be below where you guys are guiding for the full of the $100 million.

Just can you help me understand you know what’s going on there?.

I would say the refinanced cadence of that because of GAAP treatment of the swap that we had in place that goes to the interest expenses line. So probably similar level to what you modeled in the balance of the year.

We would expect an uptick just on that basis near about those roughly $8 million that benefited the interest expenses line in the first quarter a little more than that. That won’t recur and I would say also the 100 million probably is a bit conservative I would expect that end the year with level starting with the ninth..

All right, thank you guys..

Jim – I am sorry, Jamie Cook, Crédit Suisse..

Hi, guys, this is actually Andrew Buscaglia on behalf of Jamie.

So just going back to Crane I mean at this point if you exclude the portion that’s coming in ‘15 it would seem that your visibility is a little bit or actually the question is I guess, would say your visibility is a little more limited than you would expect at this point of the year after ConExpo?.

No, I am not sure, I am not sure I would draw conclusion. But to understand your question you are saying that visibility on the remaining product lines other than crawlers that’s the way I took your question.

Is that right it?.

Yeah, visibility I guess and specifically for ‘14?.

No, I think when you look at it, the rest of the backlog isn’t that’s why you have 70 some percent which doesn’t extend past there. So I mean I think that if you go, as I said earlier if you go back to post three session that’s what it’s been ever since. So I think it’s pretty consistent with what you have seen in the last four or five years..

Okay. And then just a little more color on in terms of your profitability that’s in your backlog.

I mean margins were maybe a bit lower then you are thinking this quarter but what are you seeing in terms of those ramping over the few quarters and then when do you really expect the improvement to flow through that backlog?.

Well, I think the incremental margins will be very much a second half of the year story in Crane, that’s where we are really going to be able to get our guidance level that we talked about. It going to be more skewed, given the nature of the orders we have received and some of the efficiency improvements that we are putting in on an ongoing basis.

It’s going a really second-half of the year margin improvement story to a much greater in Crane..

Okay, okay.

So Q2 you probably think will be more in line with what we saw in Q1?.

Tough comp in Q2 given we did have a pretty strong benefit from the material cost in Q2 of 2013 that we wouldn’t expect to recur..

Okay, all right, thanks guys..

Ted Grace of Susquehanna..

Hi, guys.

How are you doing?.

Good, Ted..

Great. The first thing I was hoping to ask is the incremental color on the orders in the backlog is helpful.

I know that you said that 26% of the backlog is delivered in ‘15 or beyond and if we are playing some number and try to estimate what the next 12 months deliveries in backlog are would it be fair to say those orders in the quarter were something on the order like $540 million..

I would say if you just want the number for the 12 months it’s not much different than any picture of this. Obviously the first quarter tends to be a lower top line quarter just by you know the seasonality of the business and if we are going to put a message out there for 12 months it would be 24%..

Okay, something in the $540 range for forward 12 months..

I guess the leverage..

And so I know that you said that 1Q largely in line with plan, is that also true of kind of is called the legacy order rates that you have got or legacy orders you got in Crane?.

I can take this. The order intake that has been a little shy of expectations but business [are in the] crane product line. I mean business we won that that probably struggles right now and again I mean it’s I think I am hopeful that the situation will improve in North America but the utilization is pretty high on this product line in the U.S.

However the rental rates still struggles to get some traction. So one of the issue and as we move to the Middle East and Asia obviously the Japanese competition is very aggressive benefiting from the yen. So that’s one of the product line that we are little bit nervous but again it’s mitigated by what we see on the other product lines..

Okay. And then Eric maybe you can just elaborate I think Glen mentioned he had the dealer meeting recently. Maybe can you just share with us kind of the highlights which you are hearing from your U.S.

dealer base?.

Yeah, the highlight is they see a lot of work coming. It’s as Glen said it’s more a matter of when this is going happen but we see a lot of work coming in the U.S. Again they – I mentioned RPO but a good indication when you RPO your cranes and you see that you have a 70% or 80% turns into sales, that’s really a very good one.

When you see that kind of commitment on the order of large crawlers that obviously is a sign of confidence and what they see also is before the rent houses are trying to more purchase on specific need projects and the owners now seems to be looking ahead and planning purchasing based on probably on anticipated future needs.

So in the win there expectation that we see a short uptick also on [inaudible]. Overall I mean that’s why we have this positive feeling here in the U.S..

I think another comment that was made to me from someone that attended was the dealers – it’s just, it’s lumpy you know they’ll go to two or three weeks and the activity is a bit slow and all of the sudden the next thing you know you have anywhere from five to 11 orders on different product lines.

So I mean that’s the key for us is how do we maintain the flexibility to keep – because that’s what happened ever since 2009. The people don’t want to commit long-term but when these projects break it’s all about availability in certain instances. So it’s business as usual but to Eric’s point the outlook is pretty darn good..

That’s really helpful. So the second thing I was hoping to ask is a good question of Bob. Bob great job on the sales number, they are up 9%.

Is there any way you can help us understand what was the contribution from the new products to grill the new site machines and the blended comp either it’s rose that 9%, was it four points attributable to new product, just really get a sense for how those products are doing?.

It has been a major contribution Ted. I think if you look at the spread across with four major roll-outs in process at the moment all contributed by new products. You know as mentioned in the remarks a good portion of the savings coming from the operational enhancements with the new product that have a major contribution.

And if you also look at it too you look the industry in total the estimates are 3.5% to 4% up, we went up 9% but a big part of that was roll-out, a big part of EME with those products as well. General market was down but because of the cold weather in the States. So you can factor that in, the new products were a major contributor for it.

Mostly in the areas of service cooking and grills, we have – is another a little bit on the roll-on soft drink area and hot holding..

Okay, that’s really helpful. And just so we can appreciate it from a modeling standpoint when did you start seeing those benefits of the new products and are we close to lapping that, are we are going to get a couple of more quarters and have "easy comps" on that basis..

Those particular roll-outs are going to be phasing out on those particular ones but then if you look at the new products and we get to NRA, you will see some of that too. We have the [inaudible] we have got Koolaire.

We saw action in grills because of the cold weather we had at the end in the year, we are starting to see that pick-up a bit, some new fire technology and then the – is still growing and then we have got later in the year some refrigeration stuff. So, we have got a pipeline that’s coming as well so as those phase out new things will come on..

Okay, great. Thank you very much guys. Best of luck for this quarter..

Thanks..

Thank you, Ted..

Next we will hear from Mircea Dobre of Robert W. Baird..

Good morning, guys..

Hi, Mircea..

I think I’m going to stick with Foodservice because we sort of be beat the Crane segment to death here. Bob I saw some work force adjustment announcements for your U.S. based workforce throughout the quarter.

And I’m wondering if maybe you can sort of remind us kind of where you are as far as what inning maybe you might be as far as consolidating some of your manufacturing footprint in that business and maybe give us a flavor as to how you’re thinking about this going forward..

Let me touch on that first Bob and then I will pass it on to you. I would say Mircea when you look at what the announcement that was made in the first part of this year was here in Manitowoc we made that announcement that we intend to or give us the ability to move some of the ice machine production to the facility in Monterrey.

And of about the 425 jobs we have in Manitowoc at the ice plant that would affect about 150 of those jobs. So that’s really what the announcement was and that would take place over, between maybe starting late this year fourth quarter of this year and into the fourth quarter of 2015. So really that’s what that announcement was about.

When you look at the manufacturing initiatives that we have throughout Foodservice and we talk again a lot about the operational excellence piece, when we acquired a notice, I think Carl will help me if I’m wrong here I mean we were upwards of almost 40 manufacturing locations, down to about 25 right now and I think I would say long term we believe that could be maybe the high teens.

So that gives you a little bit of indication where we’re at in that process. And so we’re knocking them one at a time. Everything doesn’t happen overnight but it gives us – that’s all part of that reasoning that Carl mentioned long term the margins in Foodservice being in the high teens. So Bob if you want add anything to that feel free..

Yes I guess in terms of the innings, if you look at as Glen mentioned our overall manufacturing strategy, I’d say we’re probably in the early to mid-innings. We have things to go, for instance we’ve announced we are consolidating two of our fire factories together down in the Louisiana later this year. That will eliminate one factory, broken to two.

And then the ice in Monterrey was part of our ability that we mentioned to get closer to our customers in Latin America, that area. There is a few more that will happen. We’ve got some other growth areas in the same time. So I would say we’re probably in the early to mid-innings in terms of an overall global manufacturing strategy..

That’s great. Thanks for that. And I guess sticking with food here, I’m wondering if you can give us an update as to what you’re seeing in terms of demand from China, I know that’s been a headwind for you for a while..

Go ahead, Bob..

Yes, I guess I would just start and say for the quarter our biggest growth area for us was actually in Europe. And Americas was okay, offset by the weather. China and Asia were down a bit mostly due to a little bit of a slowdown and some of the chain growth that’s there in Asia.

It still provides for us in terms of strategically, there is a lot of promise there just because the projected increase of food sales in that area and restaurants, people going out is still relatively high. So I think across the board in Asia we haven’t retreated from our more bullish stance on where we stand on Asia.

It’s just in the first quarter the chains there haven’t growth as fast as we thought they would..

Great, thanks..

And next we’ll hear from Jerry Revich of Goldman Sachs..

Hi good morning..

Hey Jerry..

I’m wondering if you can talk about the cost optimization efforts in a bit more detail in Cranes now that you’re further into the programs. How much savings have you achieved in the first quarter and just give us an update for overall the shift that you’re making that you can talk about publicly at this point..

Yes Jerry I think you’re referencing into the comments that I’ve made about the $80 million in those type savings. Again it’s the organizational piece, it’s the lean piece. I mean that’s the reliability in them. It’s a little bit similar to what we said for Foodservice with respect to the organizational changes.

You’re going to see the majority of those happening over the back half of the year. We have not given the detail of what they are between the segments and I’m not sure that that’s just because I think competitively we don’t want to.

And I think when you look at the reliability in the manufacturing measures, as I mentioned during the call what we did in Europe is those initiatives were taking place early next year. We hit the full run rate of those this year.

The new initiatives with respect to the PVC the reliability, those are all taking hold, it was late last year and some of this year.

But I would say as the one thing we mentioned is and I said it first right in my comments, we’re basically where we thought we would be at this point in time in the year based on our expectations other than as Carl said maybe a little bit lower on the crane sales.

But when you look at the margins, you can tell that the margins are holding in there even little better than we thought. So all of those things that we’re talking about are giving us the benefits to hit the earnings numbers, have the margins a little bit better than we thought despite the lower sales volume.

So I think that gives you an indication that those initiatives we have in place are in full force..

Okay and on the then crane order outlook, I’m wondering if you gentlemen can just talk about in broader turns what you’re seeing in Latin America.

Glen you’ve touched on it around the elections, but I’m wondering if you could just talk about what enquiry levels are like in that market broadly and talk about your expectations in bookings over the next year in that business..

So given the fact I was there last week, I am an expert on it now, but I’ll let Eric answer the question..

Yes I think I would say that we have seen Brazil really struggling right now. And I don’t think that we will see a major improvement this year but we know that we will see improvement and again our market share in Brazil is very strong in all of the products in our roster now, [inaudible] finance, which give us a tremendous company advantage there.

But Chile is low as well, much lower than last year, but this is offset by more activity in Peru, Columbia and definitely Mexico is fairly is strong for us. So that’s pretty much what we can see.

Overall we might be somewhat down in Latin America in 2014 but with the footprint we have and the product line and investment we made in this regions I think our market share will hold pretty well. And again you have some projects base where it can change overall, but again this is an important piece of our footprint..

Okay, thank you..

Eli Lustgarten, LongBow..

Good morning everyone..

Hi Eli..

Quick question, can we talk about that pricing of course around the world? I mean it sounds like some business is up. Pricing is holding and your improvements come from initiatives is that a fair statement around the world? And the second part of that is as you price the new [inaudible].

Is that the introductory price and the combination of getting deposits that will give you decent profitability, or do you expect your profitability to probably maybe 2016 to be much better than the existing product line..

Well I think when you look at any new product introduction, first off with respect to the margins on those, I mean I can assure you that when will only put our plans together, there is the understanding that we should be improving our margins on any new product introductions that we have. Now you’re exactly right.

I mean the initial ones that go out whether it’s or prototype or anything else obviously you have those start-up type things that as they get through the factory there is always those costs that are upfront, but that’s more of – that’s a variance to the standard costs and those are the initial phase and we’ll get past those.

But when you look at something at the 300 ton and 650 ton the bigger you get, I mean typically the margins are better on those. So the mix is better. Now your comment on the pricing around the world on current products I think it is holding steady.

I would say the one we see very aggressive though is on some of the Japanese product lines on the RT’s they are being very aggressive because of the exchange rate.

So I think that’s probably little more unusual than we’ve seen in the past but that’s really the only thing we’ve seen with respect to competitive pricing, that’s unusual for many of the other products..

I guess what I am getting at is I think you gave us some guidance for crane operating margins in the high single digits this year and I can understand, the volume is better and mix is better, that will happen.

If I take it out to 2015 where we start getting the new products being a more important part of the mix, it sounds like that you really can expect a next step up in margins in crane to take place until sort of the second half of ‘15 and through ‘16 because of the – the big impact of the products.

Is that fair?.

No, I don’t know that that’s necessarily true. Obviously we are not giving any guidance yet on ‘15. But I would say when I talked about – and let’s use the VTC technology for instance as a product rollout because it’s very near to us. You got to remember that we’ve talked about the shipments going out in the starting in the first quarter of 2015.

All the manufacturing variances are already going to be impacted into our variances in 2014. So I mean then you have the mix if you have the crawler picking up, you have the tower picking up, that’s arguably, those are typically the better margin products for us.

So I wouldn’t say that you can have that expectation that it’s still the back of 2015 but you can see how it can play out and it can vary depending on volumes and mix..

All right, thank you very much..

And next we’ll hear from Nicole DeBlase from Morgan Stanley..

Yeah good morning guys.

And so may be a question on just EPS seasonality and I know you guys don’t give quarterly guidance, but 2Q is normally your strongest quarter of the year and I think though that given that the crane backlog suggests a stronger second half as well as crane margins, is it fair to say that the second half of the year is probably going to see stronger EPS than 2Q?.

I think that that’s a reasonable read through..

Okay great. And then may be just taking the Foodservice question a step further. I mean Bob pointed out a number of new products that you guys have entering the market and I don’t see a reason why the market Foodservice growth was far from here.

So do you think that there is scope for potential upsides to your mid-single Foodservice guidance throughout the year?.

We are maintaining our guidance on the top line of Foodservice..

Okay. Thank you..

And that will conclude the question-and-answer session for today. Mr. Khail, I will turn the call back over to you for any additional or closing comments..

Before we conclude today’s call I’d like to remind everyone that a replay of our first quarter conference call will be available later this morning. You can access the replay by visiting the Investor Relation Section of our corporate 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 in August. Have a good day.

And once again that does conclude today’s conference. Thank you all for your participation..