Q4 2020 Manitowoc Company Inc Earnings Call
Yes.
Non.
[music].
Please standby.
Good day, everyone and welcome to the Manitowoc Company fourth quarter 2020 earnings 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 Sir.
Good morning, everyone and welcome to the Manitowoc Conference call to review the company's fourth quarter 2020 financial performance and business update as outlined in last evening's press release participating on the call are Aaron Ravenscroft, President and Chief Executive Officer, and David <unk> Executive Vice.
Rice, President and Chief Financial Officer.
Today's webcast includes a slide presentation, which can be found in the Investor Relations section of our website under events and presentations.
We will reserve time for questions and answers after our prepared remarks.
I would like to ask 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.
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 1095 are made based on the company's current assessment of its markets and other factors that affect its business.
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 statements.
Other the result of new information future events or other circumstances and with that I will now turn the call over to Eric.
Thank you Ian and good morning, everyone. Please turn to slide three.
To start I would like to thank the Manitowoc team for a job well done 2020 was an extremely challenging year at the onset of the COVID-19 pandemic, we identified three key priorities one ensure the health and safety of our team to maintain the strength of our balance sheet and three positioning the company for long term growth.
I'm very proud of how the team managed through these unprecedented times and how well we executed on these three priorities.
First with regards to safety, we continue to see low incidence of Covid cases throughout our operations. In addition.
We achieved the lowest recordable injury rate in the history of the company. The recordable rate was one three for <unk>.
Secondly, we ended the year with a strong balance sheet, we have $120 million of cash and over $400 million of liquidity.
And thirdly, we strengthened our foundation for future growth in the face of the pandemic, we continue to develop the future leaders of our organization.
During the year of approximately 200 frontline Supervisors completed a 12 months' leadership program that covered safety leadership skills and lean.
We also kicked off a mentoring program for our key female leaders, which has already resulted in a few promotions.
Our lean journey continued in 2020 with almost 900 entries in our global Manitowoc way lessons learned competition.
There were many deserving submissions, but are willing to <unk>, Germany facility took home the price the <unk>.
Team is in the middle of a multi year initiative to improve production flow on the campus. During 2020. The team developed a robotic measuring device that proved to be a major breakthrough in our boom assembly process and cleared the path for us to make further progress on several other elements of this initiative.
In addition, this year, we rolled out the Manitowoc way CEO award to recognize the team member who exemplify that not just lean thinking but lean action.
I would like to recognize Salim Ahmad test filled supervisor and Williams.
So in self engineered systems convert manual boom cable drama alignment on the test sales to an electronic process. During assembly. Thank you and congratulation selling this type of behavior embodies our values and culture within the Manitowoc way business system.
Turning to the financials our performance during the fourth quarter exceeded our expectations.
Taking a closer look it's really a tale of two stories.
Our profitability for the fourth quarter was significantly better than our forecast primarily due to a favorable product mix, we had higher than anticipated book and ship demand for our tower cranes in Europe.
<unk> also has the added benefit of higher factory absorption and those related sites.
However, while our orders and backlog exceeded our forecast they were heavily influenced by a couple of sizable crawler orders and favorable exchange rates and.
In terms of our balance sheet, we reached our second half target to reduce inventory by $80 million on a currency neutral basis.
With that I'll pass the todays to provide more color from the financial results and after which time I will conclude with some comments on our outlook.
Thanks, Aaron and good morning, everyone, let's move to slide for.
Our fourth quarter orders totaled $509 million an increase.
Of 8% compared to $472 million of orders last year on a currency neutral basis, Q4 orders were up $22 million or 5%.
As Aaron previously mentioned the increase in orders was primarily driven by a couple of larger total orders in the U S.
Our 2020, ending backlog of $543 million was up 14% over the prior year and up 10% on a currency neutral basis.
The increase in backlog was mainly due to the increased crawler crane orders and the timing of shipments in Q4.
Net sales in the fourth quarter of $430 million were in line with our expectations and decreased $33 million or 7% from a year ago.
A decline in the Americas segment was partly offset by stronger results in the year F. <unk> segment's net sales were favorably impacted by approximately 4% from changes in foreign currency exchange rates.
Our adjusted EBITDA for the fourth quarter was $34 million, an increase of approximately 11% year over year, a favorable product mix, along with reduced discretionary spending allowed us to exceed the prior year and our expectations for the quarter as a percentage of sales adjusted EBITDA margin improved to seven 9% an improvement of 100.
20 basis points over the prior year.
During the fourth quarter, we incurred approximately $1 million of restructuring expenses predominantly related to severance cost in India and Europe.
Our GAAP diluted earnings per share in the quarter was five.
On an adjusted basis diluted earnings per share declined 16 from the prior year to <unk> 19 per diluted share.
Higher income tax expense due to our jurisdictional mix and the impact from net foreign currency losses were the main contributors for the year over year decrease in adjusted diluted earnings per share, partly offset by improved operating income.
Moving to liquidity, we generated $36 million of cash from operating activities in the quarter on a currency neutral basis, we achieved our inventory reduction target of $80 million in the second half of the year.
Most of this improvement occurred in Q4, which was the main source of our cash flow generation in the quarter.
Year over year, our cash flow from operating activities declined due to the timing of collections on accounts receivable. We ended the year with a cash balance of $129 million a.
A decline of approximately $70 million year over year. However, our total liquidity remained strong at $412 million with no borrowings outstanding on our ABL.
Now I will recap the financial results for the full year.
Orders total roughly one 5 billion down to $127 million or 8% from the prior year.
Foreign currency exchange rates benefited 2020 orders by approximately 1%.
Lower orders in the Americas, and Europe segments were partly offset by gains in the <unk> segment.
Our net sales for the year total approximately $1 4 billion or 21% decrease from 2019 and were positively impacted by $12 million or 1% due to favorable changes in foreign currency exchange rates.
The year over year decrease was primarily attributable to entering the year with a lower shippable backlog coupled with the reduction in demand related to the COVID-19 pandemic.
Our adjusted EBITDA declined $74 million or <unk>, 47% from the prior year, resulting in a 19% decremental margin on nearly $400 million of less revenue.
This better than expected flow through result is a testament to the efforts of our team members throughout the world. During these unprecedented times.
We were able to limit our discretionary spending while continuing to invest in our new product development and growth strategies. Congratulations for the team for a job well done.
Our full year 2020, adjusted net loss was $12 million compared to net income of $67 million in 2019.
Adjusted diluted net loss per share of <unk> 35 was impacted by approximately <unk> <unk> from our first quarter share repurchases as mentioned previously we suspended our share repurchase program during Q1, and we do not anticipate repurchasing additional shares in 2021.
Full year cash flow from operating activities for use of $35 million, primarily driven by the timing of accounts receivable collections and a net loss recorded in the year as I. Previously mentioned, we ended the year with ample liquidity and a strong balance sheet with that I will now turn the call back to Eric Thank you Dave.
Let's please move to slide five.
Turning our focus for 2021 I see this as a year of transition one step forward one step back.
Overall, we believe that we're beyond the economic trough brought on by the COVID-19 pandemic, we expect the recovery to be choppy. The recently enacted stimulus packages by many countries and the rollout of the COVID-19 vaccines are all favorable developments.
However, there is still a long way to go to get back to normal and Unfortunately some of these actions will have unintended consequences first.
First and foremost while economic stimulus packages are essential for the recovery fiscal spending has a tendency to create inflation and we are already seeing this in steel pricing.
Moreover, in heavy debt burden that this has created in the United States has resulted in a weaker dollar.
Given the speed at which both these variables are changing I am concerned and we will see a dislocation in the market, which will create a short term cost challenge for us.
Secondly, manitowoc benefit from substantial cost containment actions during 2020 that will not repeat in 2021 between our discretionary spending restrictions bonus program costs, social planning benefits and increases in insurance costs, we will easily see more than existing million dollars cost headwind.
Thirdly.
With the increase in crawlers are mix shifting towards lower margin products and we continue to suffer from low production levels and our German factory.
Where we manufacture all terrain cranes.
Please move to slide six.
We continue to invest in our future we have earmarked $50 million of Capex to further expand our European tower Crane rental fleet in 2021, we continue to scale up our Chinese to operating business that serves the belt and road regions.
We are accelerating our product development programs and our all terrain product line, which we will showcase a bomber and 2022.
And we continue to pursue acquisitions these growth initiatives require more investment and we've made over the last couple of years, but we are confident that these strategic initiatives will fuel our future growth as the train industry rebounds and.
In closing the current economic environment is extremely dynamic in terms of demand and costs.
Therefore, we will not provide specific financial guidance for 2021.
Directionally, we believe that our revenue will be up modestly, but there are some clear indicators that we will see margin pressure from cost headwinds and product mix, while we are investing in future.
2021 will be a year of transition.
With that operator, please open the line for questions.
Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute option is turned off to allow your signal for each of our equipment.
Please limit yourself to one question and one follow up once again, everyone that is star one on your telephone.
We will take our first question from Ann Duignan with Jpmorgan.
Good morning.
<unk>.
Could you walk us through any turning to other detail or any quantification that being chipped the headwinds that you're facing.
All things being equal net material cost and prices stay where they're at today, how much went back cost channel incremental dollars.
How is the weakening dollar.
From the impact to quantitatively and then.
Favorable product mix, if you can just walk through in more detail where prior year thinking.
When we.
Thanks, Dave I think the real the real complex part here is we're dealing with several variables and trying to project where they go in the future when they've moved so much in the last four weeks. So we're.
Not in a good position to really quantify it in terms of the steel pricing situation.
Right now.
Obviously theres some dislocation is.
Demand is outpacing supply our hope is that supply comes back on and pricing starts to plateau a lot like what we saw in 2017.
Tough for us to.
To give you a good number of where we think that having only been off a strong as it's been for for five weeks.
Some of those other items when it goes it's the same case scenario, Dave you want to just provide a little color on the issues of foreign currency.
And while we do benefit from the translation of currency at all for it also increases the cost of our products imported from Europe and sold into the U S. And Unfortunately, there is always a lag in pricing.
And catching up to the currency fluctuations, particularly in an extremely competitive products like our all terrain business. So from a short term perspective currency does become a headwind for us relative to those products that we bring into the U S.
Okay and highlights Don asked about pricing, but I think you touched on there.
My follow up would be.
I can share growth initiatives.
Can you explain.
Your thinking on the scale up.
And your China Tower Crane business.
How do you determine whether that's a good return on invested capital I mean, it's a hugely competitive market debt. They end of the day there is very little differentiation one claim.
<unk> steel anoro as per <unk>.
Chinese let's say, so how do you differentiate yourself in China.
Why you shouldn't that states debate, that's a good investment.
Yes, so firstly.
Net tower Crane market in China is the largest tower free market in the world to make 30000 or 40000 tower cranes, a year, so huge market opportunity, but also that as a platform of how we really compete in places like the Middle East Asia Pac South America as well.
Beyond just China.
In terms of return on investment I mean, <unk> is a well known brand locally we found that the rental houses are all very interested for us to get into a competitive position.
Revenue should we have long term strategically speaking for locally through our history is that we historically.
Quickly had moved old legacy product lines to China.
And basically so that would make the old legacy stuff in China reduce the cost.
Basically over the last two years, we reinvigorated our engineering locally and we've been producing what I would call our Asian specify cranes for those local markets. So we can be competitive.
This ongoing game of.
Not only do we have to be price competitive, but we're also getting our call it value engineering.
It is aligned with making sure that our specs for where they need to be to be competitive so for us, it's a great opportunity for growth and we see.
For the margins in the business. So I think it's just.
Just a great opportunity for us.
Okay I'll leave it there in the interest of time and get back in queue. Thank you.
Thanks, Dan.
Take our next question from Stephen Volkmann with Jefferies. Please go ahead.
Hi, good morning, guys.
Our next day.
Can you give us any more detail on these crawler crane orders it sounds like they were meaningful, but maybe youre not expecting that to really be a harbinger of anything more to come in.
A thought large crawlers are good for the margin mix. So I don't know when they get shipped but just any more details there.
Yes so.
The crawler Crane business from the United States is as low as it's been in 10 years. So when we get a couple of these orders in our big ticket item.
Numbers big ways.
In terms of the margin.
Basically over the last 10 years, especially as the dollar has remained strong must not period, our pricing has been relatively constant. So this is some of the new challenges we face.
Hey.
Somehow the euro the strengthening euro.
For the challenge for Us from short term it doesn't scenario, where it could be a big benefit services.
In the long term as pricing adjusted accordingly.
In our local market.
So in terms of a trend fourth quarter was fantastic.
I think we've seen one orders so far this year I mean, it's so lumpy that it's tough to say that if it's a full on China I do think that over the next three or four years.
The market will start to turn back up.
Since our channel Okay.
And then what do you hear from the large rental guys in the U S specifically because.
I assume you have lots of conversations with them what are you hearing relative to things like utilization and fleet age.
We've seen some other rental type equipment were.
Capex is bounce back I think faster than people expected just what's the tone of those types of customers.
Yes, so I would say that the smaller rental houses are more active in the current environment I mean, the large rental houses it's really spotty in my talk about utilization I've talked to a few large townhouses for their utilization rates has been a big challenge for them in the short term.
If you look down in the oil patch.
<unk> right now so I think it depends on where you look around the country and what the utilization is but I think on a whole utilization is pretty soft.
Being said the one thing that I always hear from from our customers is the model. This year may be tough and they may not be spending on capex for the fleets continue to get older and older and older. So at some point.
We're going to have to re fleet.
Okay I appreciate it I'll pass it on thanks.
Steve.
Our next question comes from Jamie Cook with Credit Suisse.
Morning, Jamie.
Hi, Good morning, I guess two questions one following up on Steve's question on that debt.
Order strength.
Tie to crawlers or is there any way you could help us understand what the orders would have looked like.
Sort of ex that and ex the crawler helped so on a normalized basis and how youre thinking about net order trends in the remaining quarters and then I guess my second question is I think you said you expect top line growth for 2021, sorry to be modestly positive.
Are there any sort of market outgrowth opportunities embedded in that forecast or is that more of what you think the industry should do.
Yes, so for the crawler states just to give you a feel I mean, we took a $15 million order with just a couple of days left in the year.
Extremely lumpy that's only a couple of cranes. So those could have easily shifted into the first quarter. If I look at our January owners.
For sort of in line with where we expected to be even a little bit down versus last year, but January is always a slow month.
So it's.
I think at least in the short term we've seen we've done a lot of the credit orders that we would've expected in the first and second quarter.
In terms of our overall outlook and our modest growth I think some of that's just the second quarter was sold.
Slow last year that we had some easy comparisons.
It really helped drive the debt.
I wouldn't say, there's any specific market.
What's really driving that.
Okay.
Any market outgrowth in your forecast for 2021 that could no. Perfect example, like David mentioned in the Middle East was pretty strong for us in the fourth quarter.
I wouldn't call it systemic I mean, the powertrain business offsetting the mobile Crane business has been really flow for the last five years, there's nothing that's systemic thats driving and it's just we've seen some large projects break free and we have minimum Atlanta couple of those orders and we've got a couple more coming.
It's nothing that I would say systemic that I could see sort of throughout the whole year moving call a turn.
Yes, I think Europe's got a total winds are going to wait and see what happens with the vaccine in Europe for you really going to feel because.
I think there is still way behind in terms of where they thought they would be.
Okay. Thank you I appreciate it.
Thanks, Jamie.
We will take our next question from Jerry Revich with Goldman Sachs.
Good morning, John Good morning, everyone.
Hello, Good morning.
Good morning, Gary can talk about.
Hello can you hear me okay.
Yes.
Okay, sorry about that good morning.
I'm wondering if you could just talk about.
The pricing on a spot basis today.
I appreciate the comments, what's in backlog growth, obviously price, creating empire in steel, but I would imagine it's a pretty transparent market. So.
Other cost headwinds that we're talking about.
I would presume pricing for those new bids for maybe you could you share.
NIM on those prior comments, if you don't mind.
Yes, I'd say it looks almost identical to what we saw in 2017, we've got the charts that we track when it would be long on coil and they're up call. It 25 ish percent last couple of weeks.
That's all public data out there to find.
I think what's tricky for US also to nail down on how this all plays out as this game of what we've purchased so typically for instance in the United States, We've purchased larger blocks and we've got more protection. If we look out let's say six months.
We're in Europe, we have shorter contracts.
And in terms of the pricing that you are quoting new customers I would imagine that's taking new account move on the spot market.
Sales for the commentary.
Earlier about there being away from just unclear.
Yes, I wish we could change prices that fast I mean that some of my remarks for us and I think there's a dislocation in the market because youre going to have these adjustments same thing for instance in the United States any product that's coming in from Europe. Eventually, it's going to have to be adjusted relative to the strength of the euro but that doesn't happen overnight plus we've got what we have in our backlog.
Those prices don't often changed materially changed and.
A lot of these projects in this environment.
The negotiated so.
I do expect that as this thing holds up we've already started talking about price increases internally.
There is a bit of a process to get it out into the field.
So hopefully if we follow the same trends that we saw in 2017 will start to see steel come.
Come down and moderate and then it's much more manageable.
Okay.
In the quarter really strong margin performance by the team and in your prepared remarks, you spoke about.
Dollar and other factors that appear to be continuing.
Can you just talk about why we should expect.
You folks to be in a better cost position given your overweight.
<unk> exposure versus the competition for.
I appreciate the comments from the European products.
On a net basis.
You're still at advantage versus imports coming from outside of Europe for components and products.
Yeah, So Jerry I'll take that so I think generally speaking we did get the added benefit of Av.
Really favorable product mix in Q4, and some of the products that generated what I'll say is the.
This revenue that was in excess of our anticipations were products that generated really good margins and you couple that with.
Still the.
I'll say restrictions or low level of SG&A spending couple those two together and that those who really were the main drivers of our better than expected results in Q4.
On the long run I don't think I don't think we'll see those types of margins into 2021.
Yes, the thing I would add for us.
There is a serious dislocation in the marketplace right now with respect to supply and demand Murphy clerks, whether it be steel.
If you look at China Free for instance, this is a perfect example of something that's popped up over the last couple of weeks.
If I look at what it costs us to ship behind from China to Singapore.
I don't know six or eight weeks ago to cost $25000 and today, It's 63 Gram then.
That's all because theres a shortage for containers for export.
So you see these sort of things sort of pop up and then they go away and then of course, there's this domino effect outpacing the supply chain for in the case of steel so.
Theres plenty of headwinds for all of its out there to manage through the share is.
And as everyone starts to come back online.
I appreciate the color. Thanks.
We will take our next question from Michael <unk> with Colliers security.
Good morning, Mike.
Hey, good morning, guys.
Can we maybe go back to one of your earlier answers perhaps.
Questions.
Some of the conditions based on end market can you tell us how things from Boeing and maybe how utilities for infrastructure versus oil and gas are there any big big standout positive or negative side here.
Yes. So the standout is the wind business, that's really where we're seeing strength in the crawler cranes.
Oil and gas, even though oil prices continue to inch up we really haven't seen any drastic changes that will take some time because it's we've.
We're going to get our rental houses to get their utilization up from you really see some actions so.
I would say utilities has been strong.
The transmission work that's out there.
Utility nice move assets.
I think that pretty much covers for the main markets in United States.
Okay great.
And my other question was about some other final points on the cash flow for 2021.
Just quickly I guess can you maybe just tell US is there a capex outlook that we should be looking at and then secondly are there any important goals you've got for 2021 for inventories all from Florida working capital.
Yeah, So Mike we're not providing guidance, however, I will say that we.
We are targeting positive cash flow from operating activities at this point in time, and I think depending on where we end up we can flex up our capex for flex down our capex, but.
Right now I can't give you a hard dollars just because of the uncertainty that exists, but regardless we are targeting positive CFO.
And then the inventories.
Okay.
That's helpful.
Couple of them I expect.
Thank you and take the order.
On the inventory side, there's a couple pieces to really think about and work on and one is FX, so and actually drove up our inventories and about 20 million Bucks just to put it into perspective, so where that goes and we'll have an effect on our inventory is.
I think that our inventory for us is a little bit higher than where we'd like it. So we want to keep on working that down. So that's an opportunity for us and then we have our normal seasonality that we will manage through where we normally increase inventory in the beginning of the or and then moving worked it down second half of the year. So.
There are some puts and takes.
Got it alright to Russia, there I'll pass it along thank you.
No problem. Thank you.
As a reminder, everyone that is star one to ask a question we'll take our next question from Mig <unk> with Baird.
Hey, good morning, everyone.
Alright.
Yes, good morning.
Going back to thinking through debt.
Cost dynamic.
My recollection.
Is that.
Account for better than 2000 for some of your Cogs I think thats bad debt I got from Barry.
Couple of years back.
But correct me if I'm wrong on that but then just structurally as we're thinking about margin for 'twenty one.
Probably fair to say that margins are going to be pressured in the back half.
'twenty, one probably lower year over year.
Is it a fair.
Fair expectation for us to have that margin up year over year in the front half for the year.
Thinking about Q1 typically.
I would imagine debt.
Some of these inflationary items are not impacting Q1 as much as maybe you are getting.
In Q2 and from a price point.
Yes, I think Thats, a fair statement with respect to the first quarter.
But we always have we have our own little seasonality the way our.
Our margins move I mean, I think probably the better way of big long enhanced net relative relative to the decremental margins that might be so I think we make and when we look at it we've always we've always kind of articulated and we did better this year that on the downside, we looked at 25% to 30% Decrementals.
On the upside 2025, but.
From a seasonality typically Q1 is lower than our Q2, when we're going to do better in Q2, I believe as well.
The first the first half.
We should be up slightly maybe.
In that regard to answer your question.
But it's a wait and see I mean, we do have a reasonably good backlog coverage for the first half for the year.
Right.
Barry.
<unk> as a percentage of Cogs.
I remember that correctly, better a little better than planned performance.
Yes, I mean.
That's a number that we have Barry provided we typically it varies by product line is of course, obviously, depending on the new.
When we look at material for us, but obviously theres a lot of stealing our products right and even in some of our parks and this is where it gets tricky is yes, we're seeing it.
As I already have suppliers, who on increasing prices other than our own still effectiveness for the domino effect kicks in.
Sure.
And then.
Maybe my final question here and you've talked about from timing issues around.
For the Super Bowl.
Collection.
I would like maybe a little more detail on that.
And given the way you're thinking about the business.
The top line revenue for 'twenty, one should we expect.
To continue to build inventory.
Raw materials or components ahead of some of these price increases.
Or in both a constant from mobile and inventory that will be.
And for the cash flow.
Okay.
Yes, so thanks for that so with regard to receivables I would say if we went back to year end 2019, we had a perfect storm on collections everything everything kind of fell into place I would say better than better than normal and I think that in 2020 at the end of the year. We were we were just pretty much average when it came to our collections.
So it's just a matter of it is a pure matter of timing, it's not a matter of uncertainty which is the good news so which is it just we'll collect.
Most of that money in January.
With regard to what I'll say is the the inventory and the seasonality.
As Aaron mentioned in the first half of the year, we do grow inventories as part of our seasonal.
Trend for the construction season that takes place in the spring.
So there will be an increase there I would say that receivables are going to be less impacted it's more just in inventories. However, looking at 2021 I'd go back to say that we are targeting positive CFO way, which which will be generated true mostly our working capital.
Alright, thanks, guys.
Thank you. Thank you.
We will take our next question from Cliff ransom with Ransom research.
Good morning, guys.
<unk> talks.
A quick comment and then two quick question for a long congratulations on well on shovlin.
<unk>. It just goes to show what happens when you bring in bringing in outside talent to help a facility.
We appreciate your assistance.
Hum.
Deal.
And when you think about.
For the lesson is learned it well on the path how would you translate them.
Other <unk>.
Lance P&L, they're not necessarily doing the same.
For the same processes.
<unk> is important how long your spread debt gospel.
Yes.
It's a good point, especially in the COVID-19 world with the virtual obviously, we tried to do as much as we can on teams and we have regular reviews. So for instance, we have a person who runs.
The Manitowoc way program. He he holds regular calls and reviews with respect to all of the lessons learned leaders of each individual plant. So they are required to share lessons learned on a monthly basis with each other.
That's about.
About what you can do right now.
We've done some drone videos and share that across the organization. So people could see some of the changes we've made.
But the real key is we get out of this virus situation, we can get back to traveling because a homerun comes on we're able to move people around the world and moving from factory to factory to produce is being different guidance.
I'm Super excited our team in <unk> has done with TPM.
Right now, it's tough to get anyone to see them because they can only send pictures to each other so.
I think the only way you really get your arms around something like that is for us to send some of our other pumps from different facilities for physically see what theyre doing.
GAAP last thing going into the Gamba, Dave a question for you when you talk about.
Hey.
Collections experience contrasting 2019, and 2020, how much of that was happened stance and how much of that is applying lean thinking for back office carpet land transactional are off.
Yes, so that's a great question cliff.
I would say that when you look at how we've how we've changed over the last number of years, our processes that we've implemented it within the organization from a back office standpoint.
<unk> become more streamlined and what we've seen in <unk> 19 was a big benefit associated with that I would say that in 2020. It was more of a factor of when the shipments occurred in our ability to collect and which is why we anticipate seeing that come in early 2021, but.
The efficiency that we operate now and collecting our receivables is probably the best that it's ever been at any point in time right now.
What's your next step to make it better.
So my question.
Got it.
Thank you I am hanging you Amit.
So program for Tom.
Just on your continuous improvement the guard.
Absolutely absolutely I will say that many of our sales are finance sales and so and working with our finance partner.
We're working towards reducing the time from the from the sale of occurrence to the funding of the sale.
And in that regard we've made great strides over the last couple of years.
We have a we have a.
Our new agreement with them that just came into effect.
Past year, and we look forward to.
Continuous improvement as from an 80 20 standpoint, that's 80% of our dollars versus the 20%, which is what I'll say is normal routine collections, but the good news is that.
Continuing to get calls from people to help you and collecting.
And particularly in delinquent accounts and I'd say that we have a great relationship with our customers. We stay on top of any issues with our customers and that affords us the opportunity to make our collections within within a reasonable timeframe with agreed terms. So we're pretty happy with the way it's been it's been progressing.
Thank you.
Youre welcome Thanks for that.
And there are no further questions I'd like to turn the call back over to ion Warner for any additional or closing remarks.
Before we conclude today's call. Please note that a replay of our fourth quarter of 2020 conference call will be available later this morning by accessing the Investor Relations section of our website at Www Dot Manitowoc Dot 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.
Thank you.
And that does conclude todays presentation. Thank you for your participation and you may now disconnect.
Okay.
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