Ascent Industries Co (ACNT) 2022 Q2 法說會逐字稿

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Synalloy's financial results for the second quarter ended June 30, 2022.

大家下午好，感謝大家參加今天的電話會議，討論 Synalloy 截至 2022 年 6 月 30 日的第二季度財務業績。

Joining us today are Synalloy's Executive Chairman of the Board, Ben Rosenzweig; President and CEO, Chris Hutter; CFO, Aaron Tam; and the company's outside Investor Relations adviser, Cody Cree. Following their remarks, we'll open the call for your questions. (Operator Instructions)

今天加入我們的是 Synalloy 董事會執行主席 Ben Rosenzweig；總裁兼執行長克里斯·哈特；財務長譚詠麟；以及該公司的外部投資者關係顧問科迪·克里(Cody Cree)。在他們發表講話後，我們將開始電話詢問您的問題。 （操作員說明）

Before we go further, I would like to turn the call over to Cody Cree as he reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

在我們進一步討論之前，我想將電話轉給 Cody Cree，他正在閱讀該公司 1995 年《私人證券訴訟改革法案》含義內的安全港聲明，該聲明提供了有關前瞻性聲明的重要警告。科迪，請繼續。

Thanks, Daniel.

謝謝，丹尼爾。

Before we continue, I'd like to remind all participants that the discussion today may contain certain forward-looking statements pursuant to the safe harbor provisions of the federal securities laws. These statements are based on information currently available to us and are subject to various risks and uncertainties that could cause actual results to differ materially. Synalloy advises all those listening to this call to review the latest 10-Q and 10-K posted on its website for a summary of these risks and uncertainties. Synalloy does not undertake the responsibility to update any forward-looking statements.

在我們繼續之前，我想提醒所有參與者，根據聯邦證券法的安全港條款，今天的討論可能包含某些前瞻性陳述。這些陳述基於我們目前掌握的信息，並受到各種風險和不確定性的影響，可能導致實際結果出現重大差異。 Synalloy 建議所有收聽本次電話會議的人員查看其網站上發布的最新 10-Q 和 10-K，以總結這些風險和不確定性。 Synalloy 不承擔更新任何前瞻性陳述的責任。

Further, the discussion today may include non-GAAP measures. In accordance with Regulation G, the company has reconciled these amounts back to the closest GAAP-based measurement. The reconciliations can be found in the earnings press release issued today and posted on the Investors section of the company's website at synalloy.com. Please note that this call is available for a replay via a webcast link that is also posted on the Investors section of the company's website.

此外，今天的討論可能包括非公認會計準則措施。根據 G 條例，該公司已將這些金額調整回最接近的基於 GAAP 的衡量標準。這些調節表可以在今天發布的收益新聞稿中找到，並發佈在公司網站 synalloy.com 的投資者部分。請注意，該電話會議可透過網路廣播連結重播，該連結也發佈在公司網站的投資者部分。

With that, I would like to turn the call over to Synalloy's Executive Chairman of the Board, Ben Rosenzweig. Ben, over to you.

說到這裡，我想將電話轉給 Synalloy 董事會執行主席 Ben Rosenzweig。本，交給你了。

Thank you, Cody, and good afternoon, everyone.

謝謝你，科迪，大家下午好。

Coming off a record start to the year, we're reporting another strong quarter, our fifth consecutive one of year-over-year growth in net sales, net income and adjusted EBITDA as well as a third consecutive quarter of record net income. I want to thank our dedicated employees whose hard work has continued to transform this company into a leading provider of tubular products and specialty chemicals.

繼今年創紀錄的開局之後，我們報告了又一個強勁的季度，淨銷售額、淨利潤和調整後 EBITDA 連續第五個季度同比增長，淨利潤連續第三個季度創歷史新高。我要感謝我們敬業的員工，他們的辛勤工作不斷將公司轉變為管材產品和特殊化學品的領先供應商。

As we look to the future, to better align the company to the transformed vision and goals we've implemented over the past 18 months, we're officially rebranding to Ascent Industries Co., effective tomorrow, August 10. If you haven't seen them yet, I encourage you to check out our new logo and brand videos. They're very exciting. But most importantly, they capture the spirit of our team and the incredible work they do.

展望未來，為了更好地使公司與我們在過去 18 個月中實施的轉變願景和目標保持一致，我們將正式更名為 Ascent Industries Co.，於明天（8 月 10 日）生效。還沒見過它們，我鼓勵您查看我們的新徽標和品牌影片。他們非常令人興奮。但最重要的是，他們體現了我們團隊的精神和他們所做的令人難以置信的工作。

We needed to do a better job of supporting the efforts of our employees, and it was clear that the old corporate name and lack of a cohesive brand identity was setting them back in their commercial efforts. I want to publicly make the point that we've been making in private for some time now, this is not a "metals" company. We're a precision manufacturer of mission-critical products used across diverse and growing end markets. Stainless steel is a primary input in our manufacturing process, we do not simply sell a commodity. We're not a steel mill. We're not a distributor of basic steel or metal products.

我們需要更好地支持員工的努力，很明顯，舊的公司名稱和缺乏凝聚力的品牌標誌正在阻礙他們的商業努力。我想公開表明我們私下已經有一段時間的觀點了，這不是一家「金屬」公司。我們是一家精密製造商，生產用於多元化和不斷增長的終端市場的關鍵任務產品。不銹鋼是我們製造過程中的主要投入，我們不只是銷售商品。我們不是鋼鐵廠。我們不是基本鋼鐵或金屬產品的經銷商。

I'm hopeful that the new branding can help us make that point to all of our stakeholders. We'll be going to market as 1 unified company with 2 distinct business segments. Within the Tubular Products segment, we'll continue to utilize the powerful brands we have like SPT, BRISMET and ASTI, and they will all be part of Ascent Tubular Products. Every employee will be a member of the Ascent team rather than of a company bought by legacy Synalloy. The excitement is real, and we see both tangible financial and nonfinancial benefits to the rebrand that will return many multiples of the upfront investment.

我希望新的品牌能夠幫助我們向所有利害關係人傳達這一點。我們將作為一家擁有 2 個不同業務部門的統一公司進行行銷。在管狀產品領域，我們將繼續利用我們擁有的強大品牌，如 SPT、BRISM​​ET 和 ASTI，它們都將成為 Ascent Tubular Products 的一部分。每位員工將成為 Ascent 團隊的成員，而不是被遺留 Synalloy 收購的公司的成員。這種興奮是真實的，我們看到了品牌重塑帶來的實際的財務和非財務效益，這將帶來數倍於前期投資的回報。

Again, I'd encourage you all to visit our new website at www.ascentco.com, our YouTube channel, by searching for Ascent Industries Co., and our LinkedIn page.

我再次鼓勵大家透過搜尋 Ascent Industries Co. 和我們的 LinkedIn 頁面來造訪我們的新網站 www.ascentco.com、我們的 YouTube 頻道。

As we continue to expand our platform and reach, our capital allocation priorities remain the same. In the current market environment, we remain hopeful that we're on the cusp of finding more value than we've seen in the recent past in deals across both segments that we operate in. I probably don't need to keep saying it since it's fairly evident, but we'll stay disciplined and not reach for something that isn't a great fit. We have ample liquidity available and will be focused on finding organizations with technical manufacturing capabilities that can help us drive new and improved processes and bring higher value-add products to our mix. Additionally, with our One Team mentality, it's important that the companies we evaluate are able to operate cohesively in our portfolio and provide cross-functional work capabilities to our segments.

隨著我們繼續擴大我們的平台和覆蓋範圍，我們的資本配置優先事項保持不變。在當前的市場環境下，我們仍然希望我們能夠在我們經營的兩個細分市場的交易中找到比最近看到的更多的價值。但我們會保持紀律，不會追求不適合的東西。我們擁有充足的流動資金，並將專注於尋找具有技術製造能力的組織，這些組織可以幫助我們推動新的和改進的流程，並為我們的產品組合帶來更高附加價值的產品。此外，憑藉我們的團隊精神，重要的是我們評估的公司能夠在我們的投資組合中團結一致地運營，並為我們的細分市場提供跨職能的工作能力。

In terms of other uses of capital, I recognize I've been a bit more guarded in the past about our potential share repurchase plans. I'll be unequivocal now. I believe our stock to be meaningfully undervalued across all measures, and we plan to decisively buy back stock in the open market at these levels. So I don't -- while reducing the liquidity of our shares, the returns on repurchases far exceed almost any other actionable use of capital. And when I assess our capital allocation options, we feel good about our near-term cash generation, in addition to our significant borrowing capacity, enabling us to continue to pursue accretive acquisitions in meaningful size and scale even after repurchasing our own stock. Obviously, we'll continuously reassess as new information becomes available to us, but I wanted to share my thinking with you as we stand today.

就資本的其他用途而言，我認識到過去我對我們潛在的股票回購計劃更加謹慎。我現在就明確表態。我認為，從所有衡量標準來看，我們的股票都被嚴重低估，我們計劃在公開市場上果斷回購這些水準的股票。所以我不認為——在減少我們股票的流動性的同時，回購的回報遠遠超過幾乎任何其他可操作的資本用途。當我評估我們的資本配置選項時，除了我們龐大的借貸能力之外，我們對我們的短期現金產生能力感到滿意，這使我們即使在回購自己的股票後也能夠繼續進行有意義的規模和規模的增值收購。顯然，隨著新資訊的出現，我們將不斷重新評估，但我想與您分享我們今天的想法。

Other than the stock price, I generally remain pleased with what we're accomplishing. We've continued to make progress in our transformation journey over these past 18 months. We're solidifying our commercial sales strategy, finding new routes to market, optimizing our footprint and promoting cross-functional work processes to drive incremental margin. While we have achieved several milestones for the first half of 2022, there's still much work ahead of us, and we remain focused on driving long-term value for our shareholders.

除了股價之外，我總體上對我們所取得的成就感到滿意。在過去 18 個月裡，我們的轉型之旅不斷取得進展。我們正在鞏固我們的商業銷售策略，尋找新的市場路線，優化我們的足跡並促進跨職能工作流程，以提高利潤率。儘管我們在 2022 年上半年實現了多個里程碑，但我們仍有許多工作要做，我們仍然專注於為股東創造長期價值。

Now I'd like to pass the call over to Chris to provide greater details on our operations across both segments, but I'll be available later on to answer any questions. Chris, over to you.

現在我想將電話轉接給克里斯，以提供有關我們在這兩個部門的運營的更多詳細信息，但我稍後會回答任何問題。克里斯，交給你了。

Thanks, Ben, and thank you all for joining today's call.

謝謝本，也謝謝大家參加今天的電話會議。

As mentioned earlier, our momentum continued in the second quarter, resulting in another strong quarter of growth and record results. I want to take a moment to reemphasize what Ben said regarding the rebrand of what's historically been known as our metals segment to its new name of Ascent Tubular Products. While we have a deep history in production of stainless steel, nickel alloy and coated pipe and tubular products as well as the processing and distribution of heavy wall seamless products, our capabilities and unique products are better represented with our refresh brand. Behind the scenes, there are significantly more to our products.

如前所述，我們的勢頭在第二季度持續，導致又一個強勁的季度成長和創紀錄的業績。我想花點時間再次強調 Ben 所說的關於將歷史上稱為我們金屬部門的品牌更名為 Ascent Tubular Products 的新名稱。雖然我們在不銹鋼、鎳合金和塗層管材產品的生產以及厚壁無縫產品的加工和分銷方面擁有悠久的歷史，但我們的能力和獨特產品透過我們的更新品牌得到了更好的體現。在幕後，我們的產品還有更多意義。

When you think about Ascent Tubular products, envision a company that is a producer of fluid transfer products. Our products focus on liquid or gas transportation, and example applications include municipal water projects, oxygen production facilities, food and beverage manufacturing, pharmaceutical, household goods and chemical production, just to name a few. The brand also signifies our position in the industry as the leading domestic producer of anti-corrosion tubular products rather than a raw material or traditional metals company.

當您想到 Ascent Tubular 產品時，請想像一家流體輸送產品生產商的公司。我們的產品專注於液體或氣體運輸，範例應用包括市政供水項目、制氧設施、食品和飲料製造、製藥、家庭用品和化學品生產等。該品牌也標誌著我們作為國內領先的防腐管材生產商而不是原材料或傳統金屬公司在行業中的地位。

You will also see this change reflected in a new industry code that reflects our industry and segments outside of what I would say has been an incorrect classification for years. That said, we will no longer be paired against basic material steel companies.

您還將看到這一變化反映在新的行業代碼中，該代碼反映了我們的行業和細分市場，超出了我所說的多年來一直不正確的分類。也就是說，我們將不再與基本材料鋼鐵公司配對。

Looking at our second quarter results for this segment. We continue to experience market tailwinds allowing us to drive competitive pricing and higher-than-expected margins. Our strategic priorities have always been to drive operational efficiencies and processes to succeed in all parts of our dynamic market cycle. The work we've accomplished by diversifying our supply chain and controlling variable costs across our facilities has put us in a better position to drive incremental margin gains and maintain our profitability through a shifting environment.

看看我們該部門第二季的業績。我們繼續經歷市場順風，使我們能夠推動有競爭力的定價和高於預期的利潤率。我們的策略重點始終是提高營運效率和流程，以在動態市場週期的各個方面取得成功。我們透過供應鏈多元化和控制整個設施的可變成本所完成的工作使我們能夠在不斷變化的環境中推動增量利潤增長並保持盈利能力。

As we begin to see pricing stabilization in the back half of the year, our supply chain will play an integral role in enabling us to maintain our margin targets while lessening our working capital requirements, and the work we've accomplished this quarter has put us in a good position to do so.

隨著我們在今年下半年開始看到價格穩定，我們的供應鏈將發揮不可或缺的作用，使我們能夠維持利潤目標，同時減少我們的營運資金需求，我們本季完成的工作使我們能夠處於這樣做的有利位置。

We also continue to make progress with our safety initiatives. We've finished the month of May and June with 0 recordable incidents and have come a long way since we first began overhauling our safety measures. By introducing and practicing a culture rooted in worker safety, we are dedicated to creating a better work environment for our employees, which directly leads to improved productivity and a more favorable hiring environment.

我們也持續在安全措施方面取得進展。 5 月和 6 月，我們已完成了 0 起可記錄事件，並且自從我們首次開始徹底改革安全措施以來，我們已經取得了長足的進步。透過引入和實踐一種植根於工人安全的文化，我們致力於為員工創造更好的工作環境，從而直接提高生產力和更有利的招募環境。

Looking forward, our near-term operational priorities are focused on closely managing our inventory amid a dynamic pricing environment, growing our business development efforts and finalizing our automation projects. We continue to transition towards a manufacturing model that prioritizes booking on hand versus inventory on hand. A large function of this ties directly to our commercial efforts as we have made meaningful inroads in our OEM and project sales initiatives, which naturally tend to more discrete projects with higher volumes and a more predictable production schedule.

展望未來，我們的近期營運重點是在動態定價環境中密切管理庫存、加強業務開發並完成自動化專案。我們繼續向優先考慮現有預訂而不是現有庫存的製造模式過渡。這在很大程度上與我們的商業努力直接相關，因為我們在OEM 和專案銷售計劃方面取得了有意義的進展，這些計劃自然傾向於具有更高產量和更可預測的生產計劃的更離散的專案.

This is critical to our success especially in the current market cycle where we see fluctuations in material costs and surcharges. Our focus on OEM and project sales efforts is beginning to bear fruit and the outcome has been an average in approximate 1,000 basis point gross margin enhancement over our distribution route to market. These sales tend to be what we call batch-based and are highly technical sales in nature. As we continue to expand our efforts in this space, we look forward to updating you in future quarters on how this progresses.

這對我們的成功至關重要，尤其是在當前的市場週期中，我們看到材料成本和附加費的波動。我們對 OEM 和專案銷售工作的關注已開始取得成果，我們的市場分銷路線的毛利率平均提高了約 1,000 個基點。這些銷售往往是我們所謂的大量銷售，本質上是技術性很強的銷售。隨著我們繼續擴大在這一領域的努力，我們期待在未來幾季向您通報進展。

We also have several large automation projects in our pipeline that we will work to finalize over the next few quarters. Our capital expenditure strategy prioritizes our investments in automation and technology, and again, we will provide updates as these progress.

我們還有幾個大型自動化專案正在籌備中，我們將在接下來的幾季內努力完成這些專案。我們的資本支出策略優先考慮對自動化和技術的投資，並且我們將再次隨著這些進展提供更新。

At the beginning of the year, we communicated our expectation that pricing will begin to normalize in the back half of 2022. We continue to see signs of that stabilization at least through quarter 3, and we believe the work we've done and the strategy we're continuing to execute is setting up tubular for success into the near future.

今年年初，我們表達了我們的預期，即定價將在 2022 年下半年開始正常化。 ，為不久的將來的成功建立管網。

Moving to our Specialty Chemicals segment. Much like in Tubular, we are rebranding our segment to Ascent Chemicals as a reflection of who we are and where we are heading. As a specialty chemicals manufacturer providing best-in-class solutions to our customers operating in over 15 different industries, we are committed to expanding our footprint through organic growth and value-accretive acquisitions while developing our research capabilities to yield new high-value products and production capabilities.

轉向我們的特種化學品部門。就像在 Tubular 一樣，我們正在將我們的部門重新命名為 Ascent Chemicals，以反映我們是誰以及我們的發展方向。作為一家特種化學品製造商，為超過15 個不同行業的客戶提供一流的解決方案，我們致力於透過有機成長和增值收購來擴大我們的足跡，同時發展我們的研究能力，以生產新的高價值產品和生產能力。

Throughout the quarter, we were able to capitalize on the efforts of John Zuppo and his team to drive better-than-expected bottom line results. Owing to our specialized products and the amount of R&D and customization we provide for our customers, our Specialty Chemicals business benefits from stability during market cycles, allowing us to grow in a more steady and linear fashion. We continued our upward trajectory during the quarter by bolstering our sales teams, integrating our facilities to promote cross-function work process and growing our footprint and capacity across our sites.

在整個季度中，我們能夠利用約翰祖波 (John Zuppo) 和他的團隊的努力來實現好於預期的底線結果。由於我們的專業產品以及我們為客戶提供的大量研發和客製化服務，我們的特種化學品業務受益於市場週期的穩定性，使我們能夠以更穩定和線性的方式成長。透過加強我們的銷售團隊、整合我們的設施以促進跨職能工作流程以及擴大我們在各個站點的足跡和產能，我們在本季度繼續保持上升勢頭。

Our commercial development for Specialty Chemicals was one of our highlights of the quarter. We successfully recruited key industry talent and continued to finalize our commercial team reorganization plan as a means to unlock further value. This past quarter, we were also able to lock down 3 new core customers at our Virginia site. And with our strengthened sales team, we expect our sales pipeline to grow in the foreseeable future.

我們特種化學品的商業發展是本季的亮點之一。我們成功招募了產業關鍵人才，並持續敲定商業團隊重組計劃，以釋放更多價值。上個季度，我們還在維吉尼亞工廠鎖定了 3 位新核心客戶。隨著我們銷售團隊的加強，我們預計我們的銷售管道在可預見的未來將會成長。

Our sales, technical and operations teams have also continued to integrate from separate companies into 1 unified business. This is integral to promoting more efficient work processes and will lead to more accurate production planning, reduced off-quality products and improve our on-time delivery rates. As we establish ourselves as Ascent Chemicals, a larger and more diversified manufacturer of specialty chemicals, it is crucial that we consistently deliver best-in-class products and services on time and in a reliable manner. The further integration of our teams will enhance our ability to effectively do so.

我們的銷售、技術和營運團隊也繼續從獨立的公司整合為一個統一的業務部門。這對於促進更有效率的工作流程至關重要，並將帶來更準確的生產計劃、減少不合格產品並提高我們的準時交貨率。當我們將 Ascent Chemicals 打造成一家規模更大、更加多元化的特種化學品製造商時，我們始終如一地按時、可靠地提供一流的產品和服務至關重要。我們團隊的進一步整合將增強我們有效實現這一目標的能力。

With our sites now more fully integrated, we are constantly evaluating our product mix and ensuring that we are manufacturing the right product at the right site. As I mentioned before, reducing off-quality products and improving our overall reliability remains one of our highest priorities. This is an area where we can squeeze incremental margins out of our manufacturing process alongside our automation efforts, which brings me to our next point.

隨著我們的工廠現在更加完全集成，我們不斷評估我們的產品組合，並確保我們在正確的工廠生產正確的產品。正如我之前提到的，減少劣質產品和提高整體可靠性仍然是我們的首要任務之一。在這個領域，我們可以在自動化工作的同時，從製造過程中擠出增量利潤，這讓我想到了下一點。

We have continuously invested in and implemented our automation initiatives and expect benefits to begin materializing to our bottom line in the coming quarters. In fact, our focus in the second half of the year will be on our equipment upgrades at our Virginia site as well as some low-cost growth projects in South Carolina to diversify into personal care products and further into specialty chemical capabilities. Stay tuned for more updates on this front.

我們不斷投資並實施我們的自動化計劃，並期望在未來幾季開始為我們的利潤帶來收益。事實上，我們下半年的重點將是維吉尼亞州工廠的設備升級以及南卡羅來納州的一些低成本成長項目，以實現個人護理產品多元化，並進一步發展特種化學品能力。請繼續關注這方面的更多更新。

Overall, our Specialty Chemicals segment recorded a great quarter, and we look to continue our stable growth through the back half of the year. We believe this segment is well positioned to execute on the goals we've set for ourselves. We look to be the industry leader in the manufacturing of our specialty chemical products through a robust sales pipeline, efficient work process and identifying value-additive acquisition opportunities, with strong research and development capabilities to enhance our overall product mix.

總體而言，我們的特種化學品業務季度表現出色，我們希望在今年下半年繼續保持穩定成長。我們相信該部門處於有利地位，可以實現我們為自己設定的目標。我們希望透過強大的銷售管道、高效的工作流程和識別增值收購機會，成為特種化學品製造領域的行業領導者，並憑藉強大的研發能力來增強我們的整體產品組合。

In both segments, we're extremely proud of what our teams were able to accomplish throughout this quarter. Our core operations and team strategy continue to improve, and we firmly believe our company is poised to establish Ascent as a premier industrial manufacturer of both tubular products and specialty chemicals.

在這兩個領域，我們對我們的團隊在本季所取得的成就感到非常自豪。我們的核心業務和團隊策略不斷改進，我們堅信我們公司已準備好將 Ascent 打造成管材產品和特種化學品的一流工業製造商。

I'd like to now turn it over to our CFO, Aaron Tam, to walk through our second quarter financial results in more detail, then I'll return to answer any questions you may have. Aaron, the floor is yours.

我現在想把它交給我們的財務長譚詠麟，更詳細地介紹我們第二季的財務業績，然後我會回來回答您可能有的任何問題。亞倫，地板是你的。

Thank you, Chris, and good afternoon, everyone.

謝謝克里斯，大家下午好。

For the second quarter financial results, net sales increased by 40% from $83.1 million to $116.2 million compared to the prior year period. The increase was primarily attributable to the competitive pricing increases made across both of our business segments, while also benefiting from a deliberate product mix shift towards higher average selling price and higher margin products.

第二季財務業績顯示，淨銷售額較上年同期成長 40%，從 8,310 萬美元增至 1.162 億美元。這一成長主要歸因於我們兩個業務部門的競爭性定價成長，同時也受益於產品組合向更高平均售價和更高利潤產品的有意轉變。

Also, it's important to note that our net sales included $8.4 million in DanChem sales that weren't in the prior year resulting in a nearly 30% organic growth rate.

此外，值得注意的是，我們的淨銷售額包括 840 萬美元的 DanChem 銷售額，這在上一年中並不存在，因此有機成長率接近 30%。

Gross profit increased 48% to $20.9 million compared to $14.1 million in the second quarter of 2021, while gross margin increased 100 basis points to 18% from 17% in the prior year period. The improvement in both gross profit and gross margin was primarily attributable to increased selling prices and the previously mentioned mix shifts as well as a more diversified supplier base, offsetting the impact of increased raw material costs, freight costs, repairs, maintenance and supplies expenses.

與 2021 年第二季的 1,410 萬美元相比，毛利成長了 48%，達到 2,090 萬美元，毛利率從去年同期的 17% 成長了 100 個基點，達到 18%。毛利和毛利率的改善主要歸因於銷售價格的上漲和前面提到的組合轉變以及供應商基礎更加多元化，抵消了原材料成本、運費、維修、保養和供應費用增加的影響。

Net income in the second quarter increased significantly to $11.1 million or $1.06 per diluted earnings per share compared to a net income of $2.9 million or $0.31 diluted earnings per share for the second quarter of 2021. The increase was primarily driven by the aforementioned strong sales and gross profit performance.

第二季的淨利潤大幅成長至1,110 萬美元，即稀釋後每股收益1.06 美元，而2021 年第二季的淨利潤為290 萬美元，即稀釋後每股收益0.31 美元。由上述強勁的銷售和毛利表現。

The second quarter of 2022 also included a $0.2 million benefit of net income from the acquisition of DanChem. This is a pretty clean net income number without much noise from meaningful nonrecurring items or benefits.

2022 年第二季還包括收購 DanChem 帶來的 20 萬美元淨利收益。這是一個相當乾淨的淨利潤數字，沒有太多來自有意義的非經常性項目或福利的噪音。

Adjusted EBITDA in the second quarter increased by 58% to $15.5 million from $9.8 million in the year-ago quarter and adjusted EBITDA margin improved 160 basis points to 13.3% from 11.7% in the year ago quarter. For reference, DanChem contributed $0.8 million in adjusted EBITDA for the second quarter of 2022.

第二季調整後 EBITDA 成長 58%，從去年同期的 980 萬美元增至 1,550 萬美元，調整後 EBITDA 利潤率從去年同期的 11.7% 提高 160 個基點至 13.3%。作為參考，DanChem 在 2022 年第二季的調整後 EBITDA 中貢獻了 80 萬美元。

Lastly, looking at our liquidity position as of June 30, 2022, total debt was $68.3 million compared to $70.4 million as of December 31, 2021. And as of June 30, 2022, we had $41.2 million of borrowing capacity under our revolving credit facility compared to $39.4 million as of December 31, 2021.

最後，看看我們截至2022 年6 月30 日的流動性狀況，總債務為6,830 萬美元，而截至2021 年12 月31 日為7,040 萬美元。下的借款能力為4,120 萬美元截至 2021 年 12 月 31 日，這一數字為 3,940 萬美元。

With that, I'll now turn it back over to Daniel and the operator for Q&A.

現在，我將把它轉回給丹尼爾和接線員進行問答。

(Operator Instructions) Our first question comes from [David Sigfried].

（操作員說明）我們的第一個問題來自[David Sigfried]。

Congratulations on a strong quarter.

恭喜季度表現強勁。

Thanks, David.

謝謝，大衛。

So I know the team has done a lot of work the last 18 months to get the company where it is right now. So you're convinced that the benefits to rebrand far outweigh the costs of doing so?

所以我知道團隊在過去 18 個月做了很多工作，才讓公司達到現在的水平。那麼您確信品牌重塑的好處遠遠超過這樣做的成本嗎？

Absolutely. The costs weren't that significant. So it's -- the rebrand was something that's been needed, in my opinion, for years. The internal feeling of the business was extremely secular in terms of I'm part of this, I'm part of this, I'm part of this. We don't know what Synalloy is. And now we're all one team, we're all one name. So it's been extremely well received within the business.

絕對地。成本並沒有那麼大。所以，在我看來，品牌重塑是多年來一直需要的事情。公司的內部感覺非常世俗，因為我是其中的一部分，而我是其中的一部分，而我是其中的一部分。我們不知道 Synalloy 是什麼。現在我們都是一個團隊，我們都是同一個名字。因此，它在業內非常受歡迎。

I noticed last year, you revenue composition was 80% tubular, 20% chemical. But this quarter, it was 75% tubular, 25% chemical. So is that a trend that, over time, we can expect that to continue, chemicals becoming a larger component?

我注意到去年，你們的收入組成是 80% 管材，20% 化學品。但本季度，75% 是管材，25% 是化學產品。那麼，隨著時間的推移，我們可以預期這種趨勢會持續下去，化學物質將成為更大的組成部分嗎？

That is obviously DanChem is contributing to that shift of percentage and as we continue to look to expand our Specialty Chemicals business, you would see that, the pipe, change a little bit.

顯然，DanChem 正在促成這一百分比的轉變，隨著我們繼續尋求擴大我們的特殊化學品業務，您會看到管道發生了一些變化。

Got it. Now there's been pretty strong demand, I think, on the specialty pipe and tube side. And then we got the jobs, $55 billion related to the water infrastructure bill. So do you see that as a back step to keeping a healthy backlog in both segments into 2023?

知道了。我認為，現在特種管道和管材方面的需求相當強勁。然後我們得到了工作機會，與水基礎設施法案相關的 550 億美元。那麼，您是否認為這是在 2023 年保持這兩個細分市場健康積壓的倒退一步？

Yes. I mean our backlog is extremely robust. It's continued to be robust. And I would say the only mix that we're seeing from a shift is we're seeing -- the distribution route to market, which is supplying distributors, that tends to change as surcharges and pricing fluctuates. They're obviously looking to get the lowest cost material for their inventory position.

是的。我的意思是我們的積壓訂單非常強。它繼續保持強勁。我想說的是，我們從轉變中看到的唯一組合是——向分銷商供貨的市場分銷路線，往往會隨著附加費和價格的波動而變化。他們顯然希望為其庫存狀況獲得成本最低的材料。

And we've put an extreme amount of effort into shifting our approach to market by chasing the end-user projects, which we can really control the demand of that. We're not relying on a distributor to tell us when they want to buy a product. So that has significantly picked up over the past 6 months.

我們付出了巨大的努力，透過追逐最終用戶專案來改變我們的市場方式，我們可以真正控制其需求。我們不依賴經銷商告訴我們他們何時想要購買產品。因此，這一數字在過去 6 個月中顯著回升。

And that's what I referred to as batch projects, and that could be anywhere from $100,000 project to multiple millions of projects for infrastructure, water, methane, whatever type of utility project we're producing product for. So -- and again, that's got a completely different margin profile, which is we want to chase that also.

這就是我所說的批量項目，可以是從 10 萬美元的項目到數百萬個基礎設施、水、甲烷項目，以及我們為其生產產品的任何類型的公用事業項目。所以，再說一遍，這有一個完全不同的利潤狀況，這也是我們想要追求的。

Okay, good.

好的，很好。

We are having success in that space.

我們在這個領域取得了成功。

Good. And thank you for your statement on the stock price and possible stock repurchases. I think for investors who've been here for years, I think that would be appropriate considering the results that you've been putting out the last 4, 5 quarters.

好的。感謝您對股價和可能的股票回購的聲明。我認為對於已經在這裡工作多年的投資者來說，考慮到你們過去四、五個季度公佈的結果，我認為這是合適的。

Stock price where it's at is a complete joke. So I mean, I think part of it relates to when you search Synalloy as a ticker, it comes up under a completely wrong peer set. I mean that's -- and we talk about this daily on -- we're not even comped against the -- to comp us against the Cleveland-Cliffs is ludicrous.

目前的股價完全是個笑話。所以我的意思是，我認為其中一部分與當你搜尋 Synalloy 作為股票代碼時有關，它出現在完全錯誤的對等集下。我的意思是，我們每天都在談論這一點，我們甚至沒有與克利夫蘭懸崖競爭，這是荒謬的。

So even look at Northwest Pipe is trading at $31. I mean they've got more net debt, less earnings and a lower revenue and profile than we do, so -- and a market cap of $300-plus million. So it's just -- it's frustrating for many people within the organization, but we're doing what we can to remain steadfast on, again, delivering quarter after quarter of solid results, bringing the right team, building the right team, trying to be prudent with our decisions and invest in things that we think will be most accretive for shareholders, so...

因此，即使看看 Northwest Pipe，其交易價格也為 31 美元。我的意思是，與我們相比，他們的淨債務更多，收益更少，收入和形像也更低，因此，他們的市值為 3 億多美元。所以這對組織內的許多人來說是令人沮喪的，但我們正在盡我們所能，再次堅定不移地交付季度又季度的可靠成果，帶來合適的團隊，建立合適的團隊，努力成為謹慎對待我們的決策，並投資於我們認為對股東最有利的事情，所以......

I appreciate that input.

我很欣賞這種投入。

I appreciate it. Thanks again for being such a long-term committed investor in us.

我很感激。再次感謝您成為我們如此長期的堅定投資者。

(Operator Instructions) At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Hutter for closing remarks.

（操作員說明） 至此，我們的問答環節就結束了。我現在想將電話轉回給哈特先生，讓其致閉幕詞。

Thank you, Daniel. I'd like to thank everyone for listening today, and we look forward to speaking with you again when we report our third quarter 2022 results. Have a great day.

謝謝你，丹尼爾。我要感謝大家今天的聆聽，我們期待在報告 2022 年第三季業績時再次與您交談。祝你有美好的一天。

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

女士們、先生們，今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。