Applied Industrial Technologies Inc (AIT) 2024 Q2 法說會逐字稿

Welcome to the Fiscal 2024 Second Quarter Earnings Call for Applied Industrial Technologies. My name is Rob, and I will be your operator for today's call. (Operator Instructions) Please note that this conference is being recorded. I will now turn the call over to Ryan Cieslak, Director of Investor, Milind and Treasury. Ryan, you may begin.

歡迎參加 2024 財年第二季應用工業技術收益電話會議。我叫羅布，我是今天電話的接線生。 （操作員說明）請注意，本次會議正在錄製中。我現在將把電話轉給 Milind 和財務部投資者總監 Ryan Cieslak。瑞安，你可以開始了。

Okay, thanks, Rob.

好的，謝謝，羅布。

And good morning to everyone on the call this morning, we issued our earnings release and supplemental investor deck detailing our second quarter results. Both of these documents are available in the Investor Relations section of applied.com.

今天早上參加電話會議的各位大家早安，我們發布了收益報告和補充投資者資料，詳細介紹了我們第二季度的業績。這兩份文件均可在 Applied.com 的投資者關係部分取得。

Before we begin, just a reminder, I will discuss our business outlook and make forward-looking statements. All forward-looking statements are based on current expectations, subject to certain risks and uncertainties, including those detailed in our SEC filings and actual results may differ materially from those expressed in the forward-looking statements. The Company undertakes no obligation to update publicly or revise any forward looking statement. In addition, the conference call will use non-GAAP financial measures, which are subject to the qualifications referenced in those documents. Our speakers today include Neil Schrimsher, Applied's President and Chief Executive Officer; and Dave Wells, our Chief Financial Officer. So with that, I'll turn it over to Neil.

在我們開始之前，謹提醒您，我將討論我們的業務前景並做出前瞻性陳述。所有前瞻性陳述均基於當前預期，並受到某些風險和不確定性的影響，包括我們向SEC 文件中詳細說明的風險和不確定性，實際結果可能與前瞻性陳述中表達的結果有重大差異。本公司不承擔公開更新或修改任何前瞻性聲明的義務。此外，電話會議將使用非公認會計原則財務衡量標準，這些衡量標準須遵守這些文件中引用的資格。今天的演講者包括應用材料公司總裁兼執行長 Neil Schrimsher；以及我們的財務長戴夫威爾斯 (Dave Wells)。那麼，我會把它交給尼爾。

Thanks, Ryan, and good morning, everyone. We appreciate you joining us. As usual, I'll begin with some perspective and highlights on the key drivers of our results, including an update on industry conditions as well as expectations going forward. Dave will follow with more detail on the quarter's financials and provide additional color on our outlook and guidance, and then I'll close with some final thoughts.

謝謝瑞安，大家早安。我們感謝您加入我們。像往常一樣，我將從一些觀點和重點介紹我們業績的關鍵驅動因素，包括行業狀況的最新情況以及未來的預期。戴夫將詳細介紹本季度的財務狀況，並對我們的前景和指導提供更多信息，然後我將提出一些最終想法。

Overall, our team continues to execute at a high level, which was apparent in the second quarter, considering ongoing normalization in industrial activity. Industry-wide Of note, sales exceeded our expectations and held relatively firm over the prior year on an organic basis, despite facing our most difficult quarterly growth comparison of the year. This was with continuing muted demand within the technology sector.

總體而言，考慮到工業活動的持續正常化，我們的團隊繼續保持高水準執行，這一點在第二季就很明顯。全行業值得注意的是，儘管我們面臨今年最困難的季度成長比較，但銷售額超出了我們的預期，並且在有機基礎上與前一年相比保持相對堅挺。這是由於技術領域的需求持續低迷。

As we highlighted last quarter. Nonetheless, we sustained margin expansion and earnings growth. Against this backdrop, part of this performance reflects normalizing Lifeco expense that is providing a clearer view of our underlying margin progress and earnings profile as well as sustained operational execution and lower interest expense results include some temporary mix headwinds, which Dave will discuss in more detail in a moment, as well as ongoing investments supporting our growth potential moving forward.

正如我們上季度所強調的。儘管如此，我們仍保持了利潤率擴張和獲利成長。在此背景下，這一業績在一定程度上反映了Lifeco 費用的正常化，這使我們能夠更清晰地了解我們的基本利潤率進展和盈利狀況，以及持續的營運執行和較低的利息支出結果，包括一些暫時的混合阻力，戴夫將更詳細地討論這些阻力以及支持我們未來成長潛力的持續投資。

In addition, we generated solid cash flow during the quarter. That puts us on track for a record cash generation year. This is inclusive of ongoing investment in working capital year to date as we continue to support our growth opportunities. While strong cash flow has always been a hallmark of our business, we believe our cash generation potential has been enhanced by our expanding margin profile, ongoing efficiency gains and working capital initiatives.

此外，我們在本季產生了穩定的現金流。這使我們有望迎來創紀錄的現金產生年。這包括今年迄今對營運資金的持續投資，因為我們將繼續支持我們的成長機會。雖然強勁的現金流一直是我們業務的標誌，但我們相信，我們不斷擴大的利潤率、持續的效率提升和營運資本計劃增強了我們的現金產生潛力。

This positive trend that's augmenting our growth capacity and capital deployment opportunities moving forward. This was demonstrated in the second quarter where we started to buy back some of our shares. We also announced a 6% increase in our dividend this morning, and we have ongoing scope for additional buybacks for the remainder of fiscal 2024 based on our current cash position and the intrinsic value across our company long term.

這種積極的趨勢正在增強我們的成長能力和未來的資本部署機會。這在第二季就得到了證明，我們開始回購一些股票。今天早上我們也宣布將股利增加 6%，並且根據我們目前的現金狀況和公司長期的內在價值，我們在 2024 財年剩餘時間內有持續額外回購的空間。

In addition, our M&A pipeline and related due diligence activity continues to increase. We remain disciplined and tailored with our approach, but see a productive backdrop that should accelerate M&A activity in the coming quarters.

此外，我們的併購管道和相關盡職調查活動持續增加。我們仍然遵守紀律並根據我們的方法進行定制，但看到了一個富有成效的背景，應該會在未來幾個季度加速併購活動。

As it relates to the underlying operating environment. We continue to see normalization in customer activity across areas of our business as end markets recalibrate around stabilizing supply chains and higher interest rates. This has presented a more muted growth environment near term, which is consistent with broader macro indicators, including year-over-year contraction in US industrial production during the second quarter as well as sub 50 PMI readings.

因為它涉及到底層的運作環境。隨著終端市場圍繞穩定供應鏈和更高的利率進行重新調整，我們繼續看到我們業務領域的客戶活動正常化。這使得近期的成長環境更加溫和，這與更廣泛的宏觀指標一致，包括第二季度美國工業生產同比收縮以及低於 50 的 PMI 讀數。

The past 14 months, combined with difficult prior year comparisons, we saw slightly more mixed trends out of our top 30 in markets during the quarter, where 18 generated positive sales growth year over year compared to 22 last quarter. Growth was most favorable across food and beverage, mining, refining, pulp and paper and transportation verticals during the quarter, offset by declines in areas such as machinery, energy and rubber and plastics.

過去 14 個月，加上與去年同期的艱難比較，我們在本季前 30 個市場中看到了稍微複雜的趨勢，其中 18 個市場實現了同比正銷售增長，而上季度有 22 個市場。本季食品和飲料、採礦、煉油、紙漿和造紙以及運輸垂直行業的成長最為有利，但被機械、能源、橡膠和塑膠等領域的下滑所抵消。

In addition, we continue to face a headwind from reduced activity across the technology sector, which we estimate negatively impacted year-over-year organic growth by over 100 basis points in the quarter, including over 400 basis points within our Engineered Solutions segment. Similar to last quarter, the technology sector has adversely impacted our year-over-year sales performance the past four consecutive quarters at this point.

此外，我們繼續面臨整個科技產業活動減少的不利影響，我們估計這對本季的同比有機成長產生了超過 100 個基點的負面影響，其中包括我們的工程解決方案部門的 400 多個基點。與上季類似，科技業目前已連續四個季度對我們的年比銷售業績產生了不利影響。

That said, sales tied to this key end market have stabilized and related orders were up over 10% sequentially in the second quarter prior year comparisons also ease moving forward. And so while uncertainty remains, these dynamics make us increasingly constructive on this key growth vertical, including the positive impact it can have on our underlying year-over-year sales performance as we progress through the second half of fiscal 2024 and into fiscal 2025. We also continue to see positive momentum across many areas of our business in the US.

儘管如此，與此關鍵終端市場相關的銷售已經穩定，第二季相關訂單較上季成長超過 10%，與去年同期相比也有所緩解。因此，儘管不確定性仍然存在，但這些動態使我們對這一關鍵的垂直增長越來越具有建設性，包括隨著我們從2024 財年下半年到2025 財年的進展，它可能對我們的基本同比銷售業績產生正面影響。我們在美國的許多業務領域也繼續看到積極的勢頭。

This includes sustained growth across our service center and our flow control operations as well as core industrial and mobile Fluid Power business during the quarter related sales across these areas on a combined basis were up by a low single digit percent over the prior year during the quarter and up over 25% on a two year stack basis.

這包括本季我們的服務中心和流量控制業務以及核心工業和行動流體動力業務的持續成長，這些領域的相關銷售額在本季度比上年同期增長了較低的個位數百分比兩年累計增長超過25%。

Within our Service Center segment, we saw strong growth across larger national accounts and fluid power aftermarket sales during the quarter. Our sales initiatives continue to drive new growth opportunities as we leverage technology investments to streamline sales processes and enhance our use of analytics within our service center network.

在我們的服務中心部門，我們看到本季更大的國民帳戶和流體動力售後市場銷售的強勁成長。我們的銷售計劃繼續推動新的成長機會，因為我們利用技術投資來簡化銷售流程並增強我們在服務中心網路中對分析的使用。

Utilization of our proprietary sales management tools continues to increase which is driving greater account penetration, market intelligence and speed to market around new growth opportunities. In addition, our Service Center segment is exposed to more secular and company-specific tailwinds today than in prior cycles, providing a greater level of sales support in the current muted industrial environment, as well as representing a powerful growth multiplier has underlying industrial activity reaccelerate within our Engineered Solutions segment, our mobile and industrial fluid power OEM and Engineered Solutions sales continue to benefit from a healthy backlog with related sales up by mid single digit percent over the prior year during the quarter.

我們專有的銷售管理工具的利用率不斷提高，這正在推動更大的客戶滲透率、市場情報和圍繞新增長機會的上市速度。此外，與先前的周期相比，我們的服務中心部門今天面臨著更多長期和特定於公司的有利因素，在當前低迷的工業環境中提供了更大水平的銷售支持，並代表了強大的增長乘數，使潛在的工業活動重新加速在我們的工程解決方案部門中，我們的移動和工業流體動力OEM 和工程解決方案銷售繼續受益於良好的積壓，本季度相關銷售額比上年同期增長了中個位數百分比。

Underlying demand in this area of our business remains relatively firm with related orders up sequentially from the first quarter. Our technical and engineering capabilities are in greater demand from mid-tier OEMs as they face rapid innovation and accelerate integration of advanced features into their equipment. In addition, we're integral to our customers' sustainability initiatives from enhancing the overall efficiency and lifecycle of hydraulic systems and power units to helping design it and integrate new electrification features within Fluid Power Systems.

我們該業務領域的基礎需求仍相對堅挺，相關訂單較第一季連續增加。中型原始設備製造商對我們的技術和工程能力提出了更高的要求，因為他們面臨快速創新並加速將先進功能整合到其設備中。此外，我們是客戶永續發展計畫不可或缺的一部分，從提高液壓系統和動力裝置的整體效率和生命週期，到幫助設計液壓系統和動力裝置並將新的電氣化功能整合到流體動力系統中。

Further capital spending on process infrastructure remains firm across our flow control operations, new business tied to our customers' decarbonization and energy transition efforts remains high with related orders on a strong trajectory heading into the second half of our year.

在我們的流量控制業務中，流程基礎設施的進一步資本支出仍然保持堅挺，與客戶脫碳和能源轉型努力相關的新業務仍然很高，相關訂單進入下半年的勢頭強勁。

As the largest distributor of Process Flow Control solutions in the US, we are uniquely positioned to support our customers' decarbonization initiatives. This includes providing technical support for the configuration, assembly and testing of process systems for carbon capture and storage, as well as producing alternative fuel sources.

作為美國最大的製程流量控制解決方案經銷商，我們在支援客戶的脫碳計劃方面擁有獨特的優勢。這包括為碳捕獲和儲存製程系統的配置、組裝和測試以及生產替代燃料源提供技術支援。

We did see some modest slowing in everyday MRO activity across our flow control operations late in the quarter, though, we believe this was primarily related to temporary and seasonal factors. Further, we remain positive on our underlying fundamentals and strategic growth initiatives across our automation business. While automation sales declined over the prior year during the quarter, as expected, part of this reflects a very tough comparison from a record second quarter of system shipments last year.

我們確實看到本季末整個流量控制業務的日常 MRO 活動略有放緩，但我們認為這主要與臨時和季節性因素有關。此外，我們對整個自動化業務的基本面和策略成長計畫保持樂觀。儘管正如預期的那樣，本季自動化銷售額較上年有所下降，但這在一定程度上反映出與去年第二季創紀錄的系統出貨量的對比非常艱難。

That said, sales were up by mid teen percent on a sequential basis, order trends are improving and comparisons get easier in the second half. Supply chain headwinds in this area of our business are improving as well, potentially augmenting system shipment activity moving forward.

也就是說，銷售額較上月成長了百分之十左右，訂單趨勢正在改善，下半年的比較也變得更加容易。我們這一業務領域的供應鏈逆風也在改善，可能會增加系統運輸活動的發展。

In addition, customer interest in our advanced automation solutions remains positive with our sales funnel and presales engineering activity remaining active, including greater cross-selling opportunities developing at some of our top national service center customers. We're also making progress expanding our automation footprint and growth capacity moving forward. This includes ongoing progress with our greenfield initiatives, a facility expansion in the Pacific Northwest and an active M&A pipeline focused on targets across North America.

此外，客戶對我們先進的自動化解決方案的興趣仍然積極，我們的銷售漏斗和售前工程活動仍然活躍，包括在我們的一些頂級全國服務中心客戶中開發更多的交叉銷售機會。我們在擴大自動化足跡和未來成長能力方面也取得了進展。這包括我們的綠地計劃的持續進展、太平洋西北地區的設施擴建以及專注於北美目標的積極併購管道。

Overall, we've worked extensively over the past five years to establish our automation platform with leading engineering and application expertise across next-generation technologies that have a significant and growing addressable market. We've developed strategic supplier relationships and brought together top engineering, talent and leadership that have solidified our market position as a preeminent value-added distributor and solutions provider in this advanced area of industrial technology. We look forward to seeing this business scale further over the next couple of years and become increasingly accretive to our consolidated organic growth and margin profile.

總體而言，我們在過去五年中進行了廣泛的工作，建立了我們的自動化平台，該平台具有跨下一代技術的領先工程和應用專業知識，這些技術擁有重要且不斷增長的潛在市場。我們建立了策略供應商關係，匯集了頂尖的工程技術、人才和領導力，鞏固了我們作為這一先進工業技術領域卓越的增值分銷商和解決方案提供商的市場地位。我們期待看到這項業務在未來幾年進一步擴大規模，並日益促進我們的綜合有機成長和利潤狀況。

Overall, the business overall, the progress we continue to make across our core operations and emerging solutions remains encouraging, particularly when considering ongoing inflationary pressures. We believe part of this reflects structurally higher inflation across the industrial sector as the industry faces technical labor constraints required technology investments and sustainability initiatives, reshoring activity and required infrastructure investments will also remain key considerations for inflation moving forward. These dynamics are apparent in the ongoing supplier price increases.

總體而言，整體業務、我們在核心業務和新興解決方案方面繼續取得的進展仍然令人鼓舞，特別是考慮到持續的通膨壓力。我們認為，這部分反映了整個工業部門的結構性通膨上升，因為該行業面臨技術勞動力限制，需要技術投資和永續發展舉措，回流活動和所需的基礎設施投資也將仍然是未來通膨的關鍵考慮因素。這些動態在持續的供應商價格上漲中顯而易見。

We continue to manage through while having moderated from heightened levels seen the last two years, the overall number and magnitude of supplier price updates year to date remains elevated compared to historical levels.

我們繼續應對過去兩年的高水平，但今年迄今為止供應商價格更新的總數和幅度仍高於歷史水平。

As always, we remain strategic with our approach as we recognize the important role we play in the critical areas of the industrial supply chain. This includes helping our customers mitigate inflationary pressures by delivering value added solutions and reducing their owning and operating expenses as well as by leveraging our scale and leading technical capabilities to help drive and monetize their growth potential within an increasingly technical and labor constrained industrial complex. Our value proposition is more relevant than ever across the industrial channel, and our Applied team continues to stand out with our top-tier execution and service at this time, I'll turn the call over to Dave for additional detail on our financial results and outlook.

像往常一樣，我們認識到我們在工業供應鏈關鍵領域發揮的重要作用，因此我們始終保持策略性的態度。這包括透過提供增值解決方案、減少客戶的擁有和營運費用，以及利用我們的規模和領先的技術能力，幫助客戶減輕通膨壓力，在技術和勞動力日益受限的工業綜合體中幫助推動和貨幣化他們的成長潛力。我們的價值主張在整個工業管道中比以往任何時候都更加重要，我們的應用團隊目前繼續憑藉我們的頂級執行和服務脫穎而出，我將把電話轉給戴夫，了解有關我們財務業績的更多詳細訊息和外表。

Thanks, Neil. Just as a reminder, consistent with prior quarters, we have posted a quarterly supplemental investor presentation to our Investor site for your additional reference as we recap our most recent quarter performance.

謝謝，尼爾。謹此提醒，與前幾季一樣，我們已在投資者網站上發布了季度補充投資者演示文稿，供您在回顧最近季度業績時提供額外參考。

Turning now to details of our financial performance in the quarter, consolidated sales increased 1.6% over the prior year quarter. Acquisitions contributed 140 basis points, and foreign currency translation had a positive 30 basis points impact.

現在來看看我們本季財務業績的詳細信息，綜合銷售額比去年同期增長了 1.6%。收購貢獻了 140 個基點，外幣折算產生了 30 個基點的正面影響。

The number of selling days in the quarter was consistent year over year. Net of these factors, sales declined a modest 0.1% on an organic basis as it relates to pricing. We estimate the contribution of product pricing had year-over-year sales growth was in the low single digits for the quarter and slightly below last quarter.

該季度的銷售天數與去年同期持平。扣除這些因素後，與定價相關的銷售有機下降了 0.1%。我們估計產品定價對本季銷售年增率的貢獻為低個位數，略低於上季。

Turning now to sales performance by segment, as highlighted on slides 7 and 8 of the presentation. Sales in our Service Center segment increased 1.4% year over year on an organic basis when excluding a 1.6% positive impact from acquisitions and 8.4% positive impact from foreign currency translation growth was strongest across our US service center network and MSS consumables business partially offset by more muted sales trends across our International Operations segment, operating income increased 6% over the prior year, while segment operating margin of 12.5% was up 28 basis points year over year.

現在轉向按細分市場劃分的銷售業績，如簡報投影片 7 和 8 所強調的。排除收購帶來的1.6% 正面影響和外幣換算成長帶來的8.4% 正面影響，我們服務中心部門的銷售額有機年增1.4%，這在我們的美國服務中心網絡中最為強勁，MSS 消耗品業務部分被我們的國際營運部門的銷售趨勢更加疲弱，營業收入比上年增長了 6%，而部門營業利潤率為 12.5%，同比增長 28 個基點。

Within our Engineered Solutions segment, sales decreased 2% over the prior year quarter. This includes a positive one point of growth from acquisitions on organic basis, segment sales decreased 3% year over year, which was largely in line with our expectations.

在我們的工程解決方案部門，銷售額比去年同期下降了 2%。其中包括有機收購帶來的正面成長，部門銷售額較去年同期下降 3%，這在很大程度上符合我們的預期。

As mentioned earlier and highlighted last quarter, segment growth continues to be adversely impacted by current technology end-market demand, which negatively impacted the year-over-year change in segment sales by approximately 400 basis points in the quarter, consistent with the last quarter's impact. In addition, sales within our automation operations declined over the prior year.

正如前面提到的和上季度強調的那樣，該細分市場的成長繼續受到當前技術終端市場需求的不利影響，這對本季細分市場銷售額的同比變化產生了約400 個基點的負面影響，與上一季的情況一致影響。此外，我們自動化業務的銷售額比前一年有所下降。

On an organic basis, the decline was in line with our expectation and partially reflects more normalized sales of engineered solutions this year following outsized shipping activity last December. That said, automation sales were up sequentially during the quarter, and we're seeing encouraging order trends out of a strategic growth area, reduced sales across the technology sector and our automation operations were partially offset by sustained growth across our industrial and off-highway mobile Fluid Power Solutions and our Process Flow Control operations segment operating income declined approximately 1% over the prior year, while segment operating margin of 14.7% was up 16 basis points from prior year levels.

從有機角度來看，下降符合我們的預期，部分反映了繼去年 12 月的大規模運輸活動之後，今年工程解決方案的銷售更加正常化。也就是說，本季自動化銷售額持續成長，我們看到策略成長領域的訂單趨勢令人鼓舞，整個技術部門的銷售額減少，我們的自動化業務部分被工業和非公路領域的持續成長所抵消移動流體動力解決方案和製程流量控制業務部門的營業收入比上年下降約1%，而該部門的營業利潤率為14.7%，比上年水準上升16 個基點。

Moving gross margin performance, as highlighted on page 9 of the deck, gross margin of 29.4% increased 34 basis points compared to the prior year level of 29.1% during the quarter, we recognized life or expense of $3.4 million compared to $8.9 million in the prior year quarter. This net life tailwind had a favorable 51 basis point year-over-year impact on gross margins during the quarter.

行動毛利率表現，如簡報第9 頁所強調的，本季毛利率為29.4%，與去年同期的29.1% 相比，成長了34 個基點，我們確認了340 萬美元的壽命或費用，而上一季的毛利率為890 萬美元。上一季度。這個淨壽險利好因素對該季度的毛利率產生了 51 個基點的有利影響。

Normalizing labor expense is directly in line with our expectations following abnormally high levels over the past several years, driven by the broader inflationary backdrop. In addition, we estimate gross margins in the second quarter include 20 to 30 basis points of unfavorable mix impact compared to prior-year levels.

過去幾年，在更廣泛的通膨背景的推動下，勞動力支出出現異常高水平，勞動力支出正常化直接符合我們的預期。此外，我們預計第二季的毛利率與去年同期相比將受到 20 至 30 個基點的不利組合影響。

This primarily reflects lower Engineered Solutions segment sales as well as strong national account sales growth and a lower mix of automation engineered solutions compared to the prior year. Overall, we continue to manage broader inflationary dynamics well, through our ongoing focus on various gross margin countermeasures and initiatives, including enhanced analytics, freight expense management and channel execution.

這主要反映了工程解決方案部門銷售額的下降以及國民帳戶銷售成長的強勁以及與前一年相比自動化工程解決方案組合的減少。整體而言，透過持續關注各種毛利率對策和舉措，包括增強分析、運費管理和通路執行，我們繼續良好地管理更廣泛的通膨動態。

As it relates to operating cost, selling, distribution and administrative expenses increased 3.5% compared to prior year levels. Sg&a expense was 18.8% of sales during the quarter, up from 18.4% during the prior year quarter on an organic constant currency basis, SG&A expense was up approximately 1% over the prior year period. We had some modest deleveraging in the quarter as expected, given the muted sales growth we saw. So we continue to manage costs well as we balance expense controls against our growth initiatives and constructive outlook as well as face ongoing inflationary pressures.

由於與營運成本相關，銷售、分銷和管理費用比上年水準增加了 3.5%。以固定匯率有機計算，SG&A 費用佔本季銷售額的 18.8%，高於去年同期的 18.4%，SG&A 費用比去年同期成長約 1%。鑑於我們看到的銷售成長乏力，本季我們按照預期進行了一些適度的去槓桿化。因此，我們將繼續妥善管理成本，平衡開支控制與成長計畫和建設性前景，並應對持續的通膨壓力。

SG&A expense this quarter also includes higher deferred compensation costs. As a reminder, fluctuations of deferred compensation costs in SG&A are primarily driven by market values of investments tied to our nonqualified deferred compensation plan there a corresponding offset to these fluctuations in other income and expense, which we report below operating income. This offset in the quarter was a $2.9 million gain reported in other income.

本季的銷售、管理及行政費用還包括較高的遞延補償成本。需要提醒的是，SG&A 遞延薪酬成本的波動主要是由與我們的不合格遞延薪酬計劃相關的投資市場價值驅動的，其他收入和費用的波動相應抵消，我們將其報告在營業收入下方。本季的這筆抵銷額是其他收入中報告的 290 萬美元收益。

So overall factory for these dynamics, we are holding underlying operating costs relatively flat, highlighting a solid performance and execution combined with gross margin management and lower life expense reported EBITDA increased 4.2% over prior year levels during the quarter, while EBITDA margin of 12.1% increased 31 basis points year over year.

因此，就這些動態而言，整個工廠的基本營運成本保持相對平穩，突出了穩健的業績和執行力，加上毛利率管理和較低的壽命費用，報告的EBITDA 在本季度比去年同期水平增長了4.2%，而EBITDA 利潤率為12.1%年增31個基點。

We also continued to benefit from lower net interest expense, which was down over $4 million from the prior year and primarily reflects reduced debt levels and greater interest income from higher cash balances and investment yields. Taken together, adjusted earnings per share of $2.24 was up over 9% from prior year levels. As highlighted in our press release, adjusted EPS in the quarter excludes a tax benefit of $3 million or $0.08 per share, resulting from the release of deferred tax valuation allowance within our Mexico operations.

我們也繼續受益於較低的淨利息支出，比前一年減少了 400 萬美元以上，主要反映了債務水準的降低以及現金餘額和投資收益率增加帶來的利息收入的增加。總而言之，調整後每股收益為 2.24 美元，比去年同期成長 9% 以上。正如我們在新聞稿中所強調的，本季度調整後每股收益不包括300 萬美元或每股0.08 美元的稅收優惠，這是由於我們墨西哥業務中遞延稅項估值津貼的釋放而產生的。

Moving to our cash flow performance. Cash generated from operating activities during the second quarter was $101.8 million, while free cash flow totaled $96.2 million or 109% of adjusted net income compared to the prior year. Free cash was up over 73% and it had a record second quarter level, reflecting higher earnings, stabilizing working capital investment and ongoing working capital initiatives.

轉向我們的現金流表現。第二季經營活動產生的現金為 1.018 億美元，自由現金流總計 9,620 萬美元，佔調整後淨利的 109%。自由現金成長超過 73%，第二季創歷史新高，反映出收益增加、營運資本投資穩定以及持續的營運資本計畫。

From a balance sheet perspective, we ended December with approximately $413 million of cash on hand and net leverage at 0.3 times EBITDA, which is below the prior level of 1.0 times. Our balance sheet is in strong position to support our capital deployment initiatives.

從資產負債表的角度來看，截至 12 月，我們手​​頭現金約為 4.13 億美元，淨槓桿率為 EBITDA 的 0.3 倍，低於之前 1.0 倍的水平。我們的資產負債表處於有利地位，可以支持我們的資本部署計劃。

Moving forward as well as enhanced returns for all stakeholders.

為所有利害關係人不斷前進並提高回報。

Our capital deployment priorities remain consistent with organic growth and acquisitions, our primary focus areas. In addition, our strong cash generation is allowing us to deploy capital in other areas, including share repurchases. During the second quarter, we repurchased 63,000 shares for approximately $11 million.

我們的資本部署優先事項與我們的主要關注領域有機成長和收購保持一致。此外，我們強大的現金產生能力使我們能夠將資本部署到其他領域，包括股票回購。第二季度，我們以約 1,100 萬美元的價格回購了 63,000 股股票。

Turning now to our outlook. As indicated in today's press release and detailed on page 11 of our presentation. We have updated full year fiscal 2024 guidance to reflect second quarter earnings performance and our current second half outlook.

現在轉向我們的展望。正如今天的新聞稿所述以及我們簡報第 11 頁的詳細資訊。我們更新了 2024 財年全年指引，以反映第二季的獲利表現和我們目前的下半年前景。

We also expect lower net interest expense, partially offset by higher depreciation and amortization expense assumptions. Specifically, we now project adjusted EPS in the range of $9.35 to $9.70 per share based on sales growth of 1% to 3%, including a 1% to 2% organic growth assumption as well as EBITDA margins up 12.1% to 12.3%.

我們也預期淨利息支出將下降，但折舊和攤提費用假設的上升將部分抵銷這種影響。具體來說，我們現在預計，基於1% 至3% 的銷售成長，包括1% 至2% 的自然成長假設以及EBITDA 利潤率成長12.1% 至12.3%，調整後每股收益將在9.35 美元至9.70美元之間。

Previously, our guidance assumed EPS of $9.25 to $9.80, sales growth of 1% to 4%, and EBITDA margins of 12% to 12.3%. Our sales outlook continues to take into consideration economic uncertainty and assumes underlying industrial activity continues to gradually moderate near term. In addition, based on sales trends in January, we project fiscal third quarter organic sales to be flat to down by low single digit percent over the prior year quarter.

此前，我們的指導假設每股收益為 9.25 美元至 9.80 美元，銷售額增長 1% 至 4%，EBITDA 利潤率為 12% 至 12.3%。我們的銷售前景繼續考慮經濟不確定性，並假設基本工業活動近期繼續逐漸放緩。此外，根據 1 月的銷售趨勢，我們預計第三財季的有機銷售額將與去年同期持平或下降低個位數百分比。

Our updated guidance assumes the year-over-year technology vertical headwinds persist for the balance of the year, and sales growth in our automation operations remains relatively muted near-term, considering ongoing uncertainty around the cadence of shipment timing overall, while we remain constructive on our setup moving forward.

我們更新後的指引假設，同比技術垂直逆風在今年餘下時間裡持續存在，考慮到整體出貨時間節奏的持續不確定性，我們的自動化業務的銷售增長近期仍相對溫和，但我們仍保持建設性態度關於我們前進的設定。

Considering the easier prior-year comparisons and sustained benefits from our internal initiatives, we believe it remains prudent to take a balanced approach to our near-term outlook, any more definitive signs of a positive inflection in macro conditions and underlying industrial activity.

考慮到與去年相比更容易以及我們內部舉措帶來的持續收益，我們認為，對我們的近期前景、宏觀狀況和基礎工業活動出現積極變化的任何更明確的跡象，採取平衡的態度仍然是謹慎的。

Lastly, from a margin perspective, we expect third quarter gross margins to increase slightly sequentially and third quarter EBITDA margins to be flat to up slightly over the prior year. These assumptions take into account potential expense deleveraging near term on modest organic sales declines as well as ongoing inflationary headwinds, growth investments in our annual merit increase, which is effective January 1, offset by lower life expense compared to the prior year. We are also assuming mix headwinds persist to some degree in the third quarter, but start to subside into the fourth quarter.

最後，從利潤率角度來看，我們預計第三季毛利率將環比小幅成長，第三季 EBITDA 利潤率將與去年同期持平或略有上升。這些假設考慮到近期因有機銷售小幅下降以及持續的通膨逆風而導致的潛在去槓桿化費用、我們年度績效增長中的增長投資（自1 月1 日起生效），但與上一年相比較低的人壽費用所抵銷。我們也假設第三季混合阻力在一定程度上持續存在，但到第四季開始消退。

With that, I will now turn the call back over to Neil for some final comments.

現在，我將把電話轉回給尼爾，徵求一些最終意見。

Thanks, Dave. So to wrap up, I'm proud of the Applied team and our performance through the first half of fiscal 2024 for delivering on our commitments and making strong progress towards that towards our interim financial objectives of $5.5 billion of revenue and 13% EBITDA margins.

謝謝，戴夫。總而言之，我對應用材料公司團隊以及我們在2024 財年上半年的表現感到自豪，因為他們兌現了我們的承諾，並在實現55 億美元收入和13% EBITDA 利潤率的中期財務目標方面取得了強勁進展。

Near term, we expect the underlying demand environment to remain muted as customers settle into the new year and operate at a steady pace, pending a more defined direction on the economy. This is partially reflected in January sales trending down an estimated low single digit percent on an organic basis over the prior year.

短期內，我們預計隨著客戶進入新的一年並穩定運營，潛在需求環境將保持低迷，等待更明確的經濟方向。這在一定程度上反映在 1 月銷售額較上一年有機下降估計較低的個位數百分比。

I would note this is against an over 20% prior year comparison as we experienced higher than normal scheduled maintenance activity and capital spending from our service center customers last January and weather is also having a negative year-over-year impact on January to date sales. That said, I remain constructive on our setup moving forward, given the potential for reaccelerating sales and earnings growth as the second half of fiscal 2024 plays out and into fiscal 2025, this considers several positive dynamics, including prior year comparisons becoming less difficult, particularly particular across our operations tied to the technology vertical.

我要指出的是，這與去年同期相比超過20%，因為去年1 月份我們的服務中心客戶的定期維護活動和資本支出高於正常水平，而且天氣也對1 月份迄今為止的銷售產生了同比負面影響。儘管如此，鑑於隨著2024 財年下半年和2025 財年的到來，銷售和盈利增長有可能重新加速，我對我們未來的設置仍然持建設性態度，這考慮到了一些積極的動態，包括與上一年的比較變得不那麼困難，特別是特別是我們與垂直技術相關的業務。

We also believe break-fix activity could reaccelerate across our service center network into the spring and summer as production schedules ramp back up following the recent operational reset and some deferred maintenance activity over the past several quarters, incremental infrastructure spending and related stimulus should further support our sales momentum with many of our top 30 in markets tied either directly or indirectly to this megatrend.

我們還認為，隨著最近的營運重置和過去幾季的一些推遲維護活動後生產計劃的恢復，整個服務中心網路的故障修復活動可能會在春季和夏季重新加速，增量基礎設施支出和相關刺激措施應進一步支持我們在前 30 名市場中的許多銷售動能直接或間接與這一大趨勢相關。

In addition, we expect technical MRO and capital spending requirements to remain heightened as customers modernize equipment and expand production facilities to meet a multiyear secular growth cycle across North America. That's just beginning. We see many powerful forces influencing this trend, including greater evidence of re-shoring to North America over the past year, age in First Industrial Infrastructure and strategic actions to reduce energy consumption across industrial capacity, our technical domain expertise and access to Core Industrial Equipment puts us in a leading position to help customers manage through these operational requirements. We also continue to invest to support our long term growth.

此外，我們預計，隨著客戶對設備進行現代化改造並擴大生產設施以滿足北美地區多年的長期成長週期，技術 MRO 和資本支出需求將繼續提高。這才剛開始。我們看到許多強大的力量影響著這一趨勢，包括過去一年回流到北美的更多證據、第一工業基礎設施的老化和減少整個工業產能能源消耗的戰略行動、我們的技術領域專業知識和核心工業設備的取得使我們在幫助客戶管理這些營運要求方面處於領先地位。我們也繼續投資以支持我們的長期成長。

This includes expanding facilities in our Engineered Solutions segment to position for meaningful growth potential we see across the technology sector and our scaling automation operations. In addition, we're making investments in advanced machining, lot offerings and engineering talent in our fluid power operations. Other examples include investments in underlying business intelligence systems, which are driving faster and more streamlined access to data and more robust business capabilities that align with our suppliers and customers' growing service expectations.

這包括擴大我們的工程解決方案部門的設施，以實現我們在整個技術領域和擴展自動化業務中看到的有意義的成長潛力。此外，我們還在流體動力業務中對先進加工、批次產品和工程人才進行投資。其他例子包括對底層商業智慧系統的投資，這些系統正在推動更快、更簡化的資料存取和更強大的業務功能，以滿足我們的供應商和客戶不斷增長的服務期望。

Lastly, we continue to augment our local technical market approach with investments in digital and e-commerce channel capabilities, including targeted updates to Applied.com that will go live in the coming months.

最後，我們繼續透過對數位和電子商務通路能力的投資來增強我們的本地技術市場方法，包括對 Applied.com 進行有針對性的更新，該更新將在未來幾個月內上線。

Overall, these are just some of the examples of the ongoing investments we're pursuing to strengthen our industry position, extend our ability to generate outsized organic growth and continue to enhance our returns on capital long term. We look forward to showcasing this potential in the quarters and years to come as always, we thank you for your continued support. And with that, we'll open up the lines for your questions.

總體而言，這些只是我們正在進行的投資的一些例子，這些投資旨在加強我們的行業地位，擴大我們實現超大規模有機成長的能力，並繼續提高我們的長期資本回報率。我們期待在未來的季度和幾年中一如既往地展示這種潛力，我們感謝您的持續支持。至此，我們將開放您的提問專線。

(Operator Instructions) David Manthey, Baird.

（操作員說明）David Manthey，Baird。

Thank you.

謝謝。

Good morning, guys.

早上好傢伙。

Morning.

早晨。

So typical execution in a tough environment, should we assume that the upside versus the downside of your guidance range is mostly based on timing and the magnitude of macro outcomes here? Because Dave, you you mentioned in the outlook that you're assuming the industrial market continues to moderate in the near term and you cited weakness in January, which is consistent with what we're hearing from others. But from approximately, when does your guidance assume that the macro bottoms out and starts to improve here?

那麼，在艱難環境下的典型執行，我們是否應該假設您的指導範圍的上行與下行主要取決於宏觀結果的時機和幅度？因為戴夫，您在展望中提到您假設工業市場在短期內繼續溫和，並且您提到了 1 月份的疲軟，這與我們從其他人那裡聽到的情況一致。但從大約什麼時候開始，您的指導假設宏觀經濟觸底並開始改善？

Yes, we'd say your Q3 here again, you tend to bleed down low single digits to flat figure because that does assume that that continued moderation.

是的，我們會再次在這裡提到第三季度，您傾向於將低個位數降至持平，因為這確實假設持續放緩。

I think we've got some things we think about secular tailwinds and some of the other drivers as well as some opportunities in terms of shipment timing that are still somewhat unclear on the automation side, I'd say we'd start to see kind of assume a further recovery in Q4, but obviously continue to be very optimistic for our position, the secular tailwinds that are paying us and the opportunities in front of us as we move into our fiscal 25.

我認為我們已經考慮了一些關於長期順風和其他一些驅動因素的事情，以及在發貨時間方面的一些機會，這些機會在自動化方面仍然有些不清楚，我想說我們會開始看到善良假設第四季度會進一步復甦，但顯然我們仍然對我們的狀況、為我們帶來回報的長期順風以及進入25 財年時我們面前的機會非常樂觀。

Okay. And then could you tell us what the revenues are so variable distributors and following lower in the second quarter and have Windows about as expected for you that those were about as expected and that added about 140 basis points of growth to service their site. But as we've indicated in the script.

好的。然後您能否告訴我們，經銷商的收入變化如此之大，並且在第二季度有所下降，Windows 與您的預期大致相同，並且為他們的網站服務增加了約 140 個基點的增長。但正如我們在劇本中指出的那樣。

Okay. And then on the following up on the can you talk about the source of other income at $2.9 million and how we should think about modeling ahead?

好的。接下來，您能否談談 290 萬美元的其他收入來源以及我們應該如何考慮未來的建模？

Yeah, here again, that's where the offset that you're seeing to the hit we would have taken in SG&A. in terms of that deferred comp, the the impact of fluctuations in the investments related to our deferred comp plan. So a net neutral from the overall P&L standpoint. But you're a good guy in other income, a hit to SG&A.

是的，這就是您所看到的對我們在 SG&A 中所承受的打擊的抵消。就遞延補償而言，與我們的遞延補償計畫相關的投資波動的影響。因此，從整體損益表的角度來看，淨中性。但你的其他收入不錯，SG&A 也不錯。

So here again, you start to normalize that SG&A spend award the year, the organic view of the world and then strip out some of that noise, which is not operational spend essentially flat. So we are paying and that's all driven by your changes in investment returns on that deferred comp plans and what should happen next quarter?

因此，在這裡，您再次開始將年度 SG&A 支出獎勵正常化，即對世界的有機看法，然後剔除一些噪音，這些噪音基本上不是營運支出持平的。因此，我們正在付款，這一切都是由您的遞延補償計劃的投資回報變化所驅動的，下個季度會發生什麼？

Yes, I can say that obviously, it depends on what happens to the market, largely market driven in terms of the impact of plus or down. It can go either way obviously, but once again, a net neutral to the P&L.

是的，我可以說，顯然，這取決於市場會發生什麼，主要是由市場驅動的上漲或下跌的影響。顯然，它可以朝任何方向發展，但再一次，損益表呈現淨中性。

Okay. I'll get back in queue.

好的。我會回到隊列中。

Thanks.

謝謝。

(Operator Instructions) Christopher Dankert, Loop Capital.

（操作員指令）Christopher Dankert，Loop Capital。

Hey, morning, guys. Thanks for taking the question. But I guess first off, as we're looking into the back half of the fiscal year here. Are you expecting the sales growth to be fairly similar to kind of service center sales growth in the back half? And I assume that's part of why that mix headwind improved sequentially in the third quarter?

嘿，早上好，夥計們。感謝您提出問題。但我想首先，因為我們正在研究本財年的後半段。您是否預期下半年的銷售成長與服務中心的銷售成長相當相似？我認為這就是為什麼第三季混合逆風連續改善的部分原因？

Yeah, we would expect the gap to close in the second half and be more similar that we could see the service centers be above, but perhaps the rate of improvement and the engineered solutions will be higher in the back half.

是的，我們預計差距會在下半年縮小，並且與我們可以看到上面的服務中心更加相似，但也許下半年的改善率和工程解決方案會更高。

Got it. That's helpful. And then I think the improvement that you guys have given on the third quarter a little bit softer than I think I would expecting, particularly with seasonality in your favor, if it remains that, that technology piece is still driving some of the caution or is it broader than just technology here?

知道了。這很有幫助。然後，我認為你們在第三季度所做的改進比我想像的要軟一些，特別是在季節性對你們有利的情況下，如果仍然如此，那麼該技術仍然會引起一些謹慎，或者是它比這裡的技術更廣泛嗎？

And I think one, we want to take a prudent approach as we come into it right mindful of January, but it's early still in the month on that side. And just our view on market assumptions for the second half as earlier would be kind of the low single digits and the market conditions down with that improving as we get into the fourth quarter in the side.

我認為，我們希望在進入一月份時採取謹慎的態度，但現在還處於這個月的早期。我們對下半年市場假設的看法與之前一樣是低個位數，隨著我們進入第四季度，市場狀況會隨著情況的改善而下降。

So really it's a it's a prudent approach as we go through obviously, we're going to be working initiatives to be better and it makes makes sense. Makes sense. And maybe just last for me, you cited some of the internal sales initiatives and growth opportunities.

所以，這確實是一種謹慎的做法，因為我們顯然會採取措施，以求做得更好，這是有道理的。說得通。也許最後對我來說，您引用了一些內部銷售計劃和成長機會。

Obviously you were aware of automation, somebody, iPad technology, people, anything else you'd call out that it's going to be as soon as that's exciting in terms of internal sales initiatives and kind of what you're looking at internally to kind of to square a little bit here. And I think that really go across the across the business. I think the work in the service center on sales process use of data.

顯然，你知道自動化、某人、iPad 技術、人員，以及任何其他你會提到的東西，只要在內部銷售計劃方面令人興奮，以及你在內部關注的東西，它就會成為現實。在這裡稍微平方一點。我認為這確實貫穿整個行業。我認為服務中心的工作主要是銷售過程中資料的使用。

The execution of that side is very positive. They are bringing the cross-selling potential of the engineered solutions really in Fluid Power & Flow Control. And now the ramping opportunity that we have in automation is positive for the service centers for our customers in Engineered Solutions and then some of the things we touched on in fluid power, not the biggest impact in the next quarter, but we will see more advanced solutions. We will see more electrification, making those investments in engineering capabilities and facilities that can help with technology throughput.

那一方的執行力非常積極。他們真正將工程解決方案的交叉銷售潛力帶入流體動力和流量控制領域。現在，我們在自動化方面擁有的不斷增長的機會對於工程解決方案中的客戶服務中心來說是積極的，然後是我們在流體動力方面涉及的一些事情，這不是下個季度影響最大的事情，但我們將看到更先進的解決方案。我們將看到更多的電氣化，對有助於提高技術吞吐量的工程能力和設施進行投資。

That's going to be positive. And then the work that we have in our expanded facility in the Pacific Northwest around automation and some of that build-uout of the capabilities will play well for us, we believe, as we conclude this fiscal year, but really into the setup for fiscal 25 and beyond.

這將是積極的。然後，我們相信，在我們結束本財年時，我們在西北太平洋地區擴大的設施中圍繞自動化和一些能力建設所做的工作將對我們發揮良好作用，但真正進入財政年度的設置25歲及以上。

Understood. Thanks, for the color there really appreciated it.

明白了。謝謝，對於顏色真的很欣賞。

Doctors to the January comps at the call it one, we're about 20% prior January. So as you think about the context of that low single digits year to date are gateway protection.

醫生們在一月份的比較中稱其為“1”，我們在一月之前的比例約為 20%。因此，當您考慮今年迄今為止的低個位數的背景時，就是網關保護。

Got it. And I appreciate that for sure. Well, thank you. I'll jump back in line here.

知道了。我對此表示讚賞。嗯，謝謝。我會回到這裡排隊。

(Operator Instructions) Ken Newman, KeyBanc.

（操作員說明）Ken Newman，KeyBanc。

I'm wondering at Morgan Stanley on the back of that last question from Chris here on January. I'm just curious, any color on how the cadence of monthly sales comps from last year are kind of progressing. We ended the quarter at 20% plus share in January, but we see it pretty it will step down in that month in any outcome starting in February with a brush driven number?

我對摩根士丹利一月份克里斯提出的最後一個問題感到好奇。我只是很好奇，從去年開始每月銷售比較的節奏有什麼進展。我們一月份的季度末份額為 20% 以上，但我們認為，從 2 月開始，從刷數驅動的數字來看，該月的任何結果都會下降？

I'd say directionally, I think it would go up roughly February of a 15% type mid 10s type increase last year and March still double digit on that side. So but that would be the kind of the step down or at that cadence. And you can, I guess, take it into the fourth quarter as we really start to see the comps become becoming more easy stuff, right, that makes sense.

我想說的是，我認為 2 月的漲幅大約是去年 10 年代中期 15% 的水平，而 3 月的漲幅仍然是兩位數。所以，但這就是那種下降或以這種節奏。我想，你可以把它帶到第四季度，因為我們真正開始看到比賽變得更加簡單，對吧，這是有道理的。

So I mean, it may be a question here is I guess I'm trying to make the comment around technology versus the guide for Q2 right?, if I remember correctly, you kind of mentioned it failed in PACR. 10s sequentially. Sounds like the orders now are stabilizing here or more stabilizing in Q2, but you still expect that to be a headwind here.

所以我的意思是，這可能是一個問題，我想我正在嘗試圍繞技術與第二季度的指南進行評論，對嗎？如果我沒記錯的話，你提到它在 PACR 中失敗了。連續10秒。聽起來現在的訂單正在穩定，或者在第二季度更加穩定，但您仍然預計這將是一個阻力。

Maybe help me square that that comment a little bit and then and also some color that you could get on we are in technology. Are you seeing that base improve in it in the semiconductor side of that data center, consumer electronics? Any help there would be great.

也許幫我糾正這個評論，然後還有一些你可以在我們技術領域得到的顏色。您是否看到資料中心、消費性電子產品的半導體的基礎有所改善？任何幫助都會很棒。

Sure. So when you think about it right, we talk about the magnitude of the headwind. Total business the 100 basis points or in the Engineered Solutions segment, which is where a predominant amount of the activity would be the 400 basis points in that side, just as we look ahead at the cycle of some of those projects are activity and release. We think that trend can continue and could continue in the current quarter.

當然。因此，當你思考正確時，我們會談論逆風的大小。總業務量為 100 個基點或在工程解決方案領域，其中活動的主要量將是該側的 400 個基點，正如我們展望其中一些項目的周期是活動和發布一樣。我們認為這種趨勢可以持續，並且可能會在本季度繼續下去。

This third quarter as we go along. If we look back at past cycles, I think typically of Q4 and maybe five quarters in that side. So we take that as a positive. So it can we take this a positive influence, some relief coming. Obviously, the comparisons will get a little easier in that as well to help in the second half. Look at it today, probably more start to be a fourth quarter impact.

隨著我們的進展，第三季。如果我們回顧過去的週期，我通常會想到第四季度，也許還有五個季度。所以我們認為這是積極的。所以我們可以採取正面的影響，緩解一些壓力。顯然，比較會變得更容易一些，這也會對下半年有所幫助。從今天來看，可能更多地開始受到第四季度的影響。

And then as we go into 25 and so on, places that maybe are playing one would be to support wafer fab equipment and some of those producers and providers. Obviously, we can be a little bit ahead of that activity, but I think most are projecting that a reacceleration to occur late in this calendar year or into 25. And so we could get a little earlier there. And then we've been active from a data warehouse and cooling systems and material movement and some of those projects.

然後，當我們進入 25 個等等時，可能發揮作用的地方將是支援晶圓廠設備以及其中一些生產商和提供者。顯然，我們可以提前一點，但我認為大多數人都預測，經濟將在今年晚些時候或 25 年內重新加速。因此，我們可以提前一點。然後我們一直積極參與資料倉儲、冷卻系統、物料移動以及其中一些專案。

I would expect that to continue. But I think that the pace of some of that implementation has been a little uneven, and we'll probably see more of that coming and either potentially in our fourth quarter of this fiscal year or as we get into our 25.

我希望這種情況能夠持續下去。但我認為其中一些實施的步伐有點不平衡，我們可能會看到更多的實施，可能是在本財年第四季度，或是進入第 25 個季度。

As we said, we were encouraged, though in the quarter regarding the sequential increase is the result of both in order rates and shipments on the automation side of the business. You have just a very difficult comparison that masked some of that in the prior year.

正如我們所說，我們受到了鼓舞，儘管本季度的環比增長是訂單率和業務自動化方面發貨量的結果。你有一個非常困難的比較，掩蓋了前一年的一些情況。

So on a two-year stack basis, probably double digits organically in that business in the most recent quarter

因此，在兩年堆疊的基礎上，最近一個季度該業務的有機成長可能達到兩位數

Right now, I think that and a one more for me obviously, the balance sheet is essentially unlevered, and it sounds like you guys are still open for business as it relates to M&A here.

現在，我認為，對我來說顯然還有一個，資產負債表基本上是無槓桿的，而且聽起來你們仍然在營業，因為它與這裡的併購有關。

Maybe any color on the pipeline? What's your take on potentially tapping the balance sheet or the share repurchases, even more oppose deal to delay.

也許管道上有任何顏色？您對可能利用資產負債表或股票回購有何看法，甚至更反對延後交易。

So we are active from an M&A standpoint to our priorities that we're consistent on and from the engineered solutions. So across Fluid Power & Flow Control and automation, much like we did in the last quarter and the nice bolt-on to the service center. So we'll continue to look and be active there as well. And we'd expect more M&A activity this fiscal year as we go into '25 on the site. And we're active in share repurchase. We would expect that to continue this fiscal year, a dividend increase that we just announced and some of the things that we may file there.

因此，從併購的角度來看，我們積極關注我們在工程解決方案和工程解決方案上保持一致的優先事項。因此，在流體動力和流量控制以及自動化方面，就像我們在上個季度所做的那樣，以及對服務中心的良好補充。因此，我們將繼續在那裡尋找並積極活動。隨著網站進入 25 年，我們預計本財年將有更多併購活動。我們積極參與股票回購。我們預計本財年將繼續如此，我們剛剛宣布的股息增加以及我們可能會在那裡提交的一些內容。

It's not outsized in the amount, but we have more growth investments and that can support our organic that we think will be favorable as we go into '25 and beyond. And so we'll look to continue.

金額並不算大，但我們有更多的成長投資，這可以支持我們的有機成長，我們認為這在我們進入 25 年及以後將是有利的。因此，我們將繼續努力。

So we're we're not eligible where we're aware of where we're at. We'll continue to work on the growth opportunities that we have acquisitions and organic growth into that side. And and return money to the shareholders via the share repurchase and dividend.

因此，我們不符合資格，因為我們知道自己所處的位置。我們將繼續努力利用我們在這方面的收購和有機成長的成長機會。並透過股票回購和股利將資金返還給股東。

Excellent. Thanks.

出色的。謝謝。

(Operator Instructions) David Manthey, Baird.

（操作員說明）David Manthey，Baird。

Yes, thanks for taking a few more questions here on what our MSS revenues today and of those sales, what percentage is delivered via vending technology?

是的，感謝您在此提出幾個問題，了解我們的 MSS 今天的收入以及這些銷售額中，透過自動販賣機技術交付的百分比是多少？

We've not disclosed discretely, Dave. The kind of the relative contribution of MSSR.? Yes, there is a component that business that does the does the the vending machine piece of the equation. I'm certainly a profitable business for us. One that's accretive from the mix standpoint and a nice complement to the position you've got the one-stop shopping we provide across the other industrial solutions. So we can be all to customers. So but nonetheless, this business we like you do not talk separately and that that disclose what the revenue contribution is there.

我們沒有單獨透露，戴夫。 MSSR的相對貢獻是怎麼樣的？是的，有一個組件可以完成自動販賣機的業務。我對我們來說無疑是一門有利可圖的生意。從混合的角度來看，這是一種增值，也是我們在其他工業解決方案中提供的一站式購物的絕佳補充。所以我們可以一切為客戶服務。因此，儘管如此，我們希望您不要單獨談論這項業務，並且披露其收入貢獻。

Okay fair enough. What percentage of Yes. Segment sales would you say are capital investments versus expense items for your customers? I know there's a number of different verticals within s and there's probably different expense capital dynamics there?

好吧，很公平。是的百分比是多少。您認為分部銷售是資本投資還是顧客的費用項目？我知道 s 內有許多不同的垂直領域，並且那裡可能有不同的費用資本動態？

Yes, that's probably another one just for pure CapEx. I don't think we've I talked about individually. I would say that it is going to be lower in our Service Center segment. And then I think the places that it would show up for us would be around Flow Control in some of those projects and then perhaps around the automation systems and less in fluid power, given some of that work is supporting OEMs and their equipment that they are taking forward to the marketplace and that so that those are the places I'd say overall, Dave, my view is there's not such a capital project reliance or input into the business that impacts it through. And the service centers are really heavily across the Engineered Solutions side of the business.

是的，這可能是另一種純粹的資本支出。我想我們沒有單獨談論過。我想說的是，我們的服務中心部分的價格將會較低。然後我認為它會向我們展示的地方將圍繞其中一些項目中的流量控制，然後可能圍繞自動化系統，而不是流體動力，因為其中一些工作是支持原始設備製造商及其設備戴夫，我的觀點是，沒有這樣的資本項目依賴或對業務的投入來影響它。服務中心確實在業務的工程解決方案方面佔很大比重。

Okay, thanks for that. And then last question on inflationary pressures, and I hope this is understandable. But when you think about the ratio between your COGS inflation and the sort of potential benefits there? And then on the SD&A inflation that you're experiencing and the negatives there, is there any significant difference in that?

好的，謝謝。最後一個問題是關於通膨壓力，我希望這是可以理解的。但是，當您考慮 COGS 通膨與潛在收益之間的比率時呢？然後，關於您正在經歷的 SD&A 通貨膨脹以及那裡的負面影響，這之間有什麼顯著差異嗎？

What I would call spread between those two things just meaning are the inflationary pressures that you're experiencing as a company more intense, less intense or the same as they were relative to the inflationary pressures that you're enjoying, I guess on the top line, I mean, surveying answer it a couple of ways or in a few areas of the consideration.

我所說的這兩件事之間的傳播只是意味著你作為一家公司所經歷的通膨壓力更強烈，不那麼強烈或與你所享受的通膨壓力相同，我想在頂部我的意思是，調查可以透過幾種方式或在幾個考慮的領域來回答這個問題。

I think overall in the quarter I think we've touched on right from a price cost standpoint and please, right, slightly slightly positive in that side. I think across our business and the operating teams, we're very mindful on the inflationary inputs to our operating side of the business and how we help ourselves in use of technology and other tools and shared services and such that can help us and the investments that we talk about are really going to be in engineering talent and forward-facing resources that can help with customers and customer solutions into that side.

我認為，總的來說，在本季度，我們從價格成本的角度來看，我們已經觸及了正確的方向，請在這方面稍微積極一些。我認為，在我們的業務和營運團隊中，我們非常關注業務運營方面的通膨投入，以及我們如何幫助自己使用技術和其他工具以及共享服務等，從而幫助我們和投資我們談論的實際上是工程人才和前瞻性資源，可以幫助客戶和客戶解決方案進入這方面。

So I think overall, we are doing an effective job at the price pricing to value and recognizing the importance of our solutions, especially at either an engineered solution or at the break-fix time and with that. We're also, as we shared on our SG&A results, doing a nice job of cost containment. It's showing up in some different areas of that kind of cost stack. But I'd say all in all, we're mindful of that. We see it coming and are working on the appropriate offsets.

因此，我認為總的來說，我們在定價方面做得很好，並認識到我們解決方案的重要性，特別是在工程解決方案或故障修復時間以及隨之而來的情況下。正如我們在 SG&A 結果中分享的那樣，我們在成本控制方面也做得很好。它出現在這種成本堆疊的一些不同領域。但我想說的是，總而言之，我們注意到這一點。我們預見了這一點，並正在努力採取適當的抵消措施。

I'd just remind you to Dave, at times, we don't see a bit of a lag in terms of when you see that read through as price realization specifically, especially as it pertains to some of the activity with some of our larger national accounts where where there are those contractual arrangements that we've got vendor agreements because they want to participate with us in that business to absorb. And there's other mechanism. So that deal we're still able to grow margins during those inflationary periods, even during a time where we're not able to pass on a price increases.

我只是提醒你戴夫，有時，當你看到具體的價格實現時，我們並沒有看到一點滯後，特別是當它涉及我們一些較大的活動時國民賬戶中存在我們與供應商協議的合同安排，因為他們希望與我們一起參與該業務以吸收。還有其他機制。因此，即使在我們無法轉嫁價格上漲的時期，我們仍然能夠在通貨膨脹時期增加利潤。

So there's other mechanisms not coming through as price day one, but where you'd see that offset on before you were able to pass those price increases on. So may not be a one for one in terms of when it's top-line read through versus the impact on COGS and SD&A.

因此，還有其他機制在價格第一天沒有實現，但在你能夠將這些價格上漲傳遞出去之前，你會看到這種抵消。因此，就何時閱讀頂線以及對 COGS 和 SD&A 的影響而言，可能不是一對一的。

Got it. All right. Thanks, guys.

知道了。好的。多謝你們。

At this time, I'm showing we have no further questions. I will now turn the call over to Mr. Schrimsher for any closing remarks.

此時，我表明我們沒有其他問題了。我現在將把電話轉交給施里姆舍先生，請他發表結束語。

I just want to thank everyone for joining us today, and we look forward to talking with you throughout the quarter.

我只想感謝大家今天加入我們，我們期待在整個季度與您交談。

And thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

謝謝你。女士們、先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。