Applied Industrial Technologies Inc (AIT) 2024 Q4 法說會逐字稿

Ladies and gentlemen, welcome to the Fiscal 2024 fourth quarter earnings call for Applied Industrial Technologies. My name is Abby, and I'll be your operator for today's call. (Operator Instructions) Please note that this conference is being recorded.

女士們、先生們，歡迎參加 Applied Industrial Technologies 2024 財年第四季財報電話會議。我叫艾比，我將擔任您今天通話的接線生。 （操作員說明）請注意，本次會議正在錄製中。

I will now turn the call over to Ryan Cieslak, Director of Investor Relations and treasury. Ryan, you may begin.

我現在將把電話轉給投資者關係和財務總監 Ryan Cieslak。瑞安，你可以開始了。

Okay. Thanks, Abby, and good morning to everyone on the call. This morning, we issued our earnings release in supplemental investor deck detailing our fourth quarter results, both of these documents are available in the Investor Relations section of applied.com.

好的。謝謝艾比，祝所有參加電話會議的人早安。今天早上，我們在補充投資者平台上發布了收益報告，詳細介紹了我們第四季度的業績，這些文件都可以在 Applied.com 的投資者關係部分找到。

Before we begin, just a reminder, we'll discuss our business outlook and make forward-looking statements. Our forward-looking statements are based on current expectations, subject to certain risks and uncertainties, including those detailed in our SEC filings, actual results may differ materially from those expressed in the forward-looking statements.

在開始之前，謹提醒您，我們將討論我們的業務前景並做出前瞻性陳述。我們的前瞻性陳述是基於目前的預期，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。

The company undertakes no obligation to update publicly or revise any forward looking statements. 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.

該公司不承擔公開更新或修改任何前瞻性陳述的義務。此外，電話會議將使用非公認會計準則財務衡量標準，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 和我們的財務長 Dave Wells。

And with that, I'll turn it over to Neil.

有了這個，我會把它交給尼爾。

Thanks, Ryan. And good morning, everyone. We appreciate you joining us. 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 fiscal 2025 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。我將首先介紹我們業績的關鍵驅動因素的一些觀點和重點，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，並為我們的 2025 財年指導提供更多信息，然後我將提出一些最終想法。

So first, I'd like to acknowledge and thank our Applied team for their hard work and consistent execution throughout fiscal 2024. While we faced a more mixed end market backdrop, during the year. That commitment to our strategy and relentlessly serving our customers is standing out across the industry and strengthening our long-term potential.

首先，我要感謝我們的應用團隊在 2024 財年的辛勤工作和一致執行。這種對我們策略的承諾和不懈地為客戶服務在整個行業中脫穎而出，並增強了我們的長期潛力。

It's an honor to be part of this team as we work together as one applied to achieve our commitments now and fully capture the tremendous opportunity we see ahead for the company.

我很榮幸成為這個團隊的一員，我們共同努力實現我們現在的承諾，並充分抓住我們為公司看到的巨大機會。

Overall, the strength of our team and strategy was apparent, in our fourth quarter, we delivered double-digit earnings growth on strong execution, positive margin momentum and cost control. This more than offset weaker than expected end market demand as the quarter played out, which I'll touch on more shortly.

總體而言，我們的團隊和策略的實力是顯而易見的，在第四季度，我們憑藉強勁的執行力、積極的利潤勢頭和成本控制實現了兩位數的盈利增長。這足以抵消本季結束時終端市場需求弱於預期的影響，我很快就會談到這一點。

As it relates to our margin performance, it was very encouraging and to another solid year of progress in expanding our margin profile with gross margins close to 31% and EBITDA margins exceeding 13% for the first time. While lower LIFO expense provided some benefit in the quarter, it's important to note, LIFO expense is normalizing from record levels in prior years.

由於這與我們的利潤率表現相關，這是非常令人鼓舞的，也是我們在擴大利潤率方面取得的又一個堅實進展，毛利率接近 31%，EBITDA 利潤率首次超過 13%。雖然較低的後進先出費用為本季帶來了一些好處，但值得注意的是，後進先出費用正在從前幾年的創紀錄水平正常化。

Additionally, when excluding LIFO expense, both gross margins and EBITDA margins expanded nicely over prior year levels, in the quarter. We saw benefits from several areas, including strong channel execution, favorable mix across our Engineered Solutions segment.

此外，當排除後進先出費用時，本季毛利率和 EBITDA 利潤率均較上年水準大幅成長。我們看到了多個領域的好處，包括強大的通路執行力、整個工程解決方案部門的有利組合。

Core EBITDA margins approached 16% in the quarter, as well as variable expense adjustments and cost control inherent to our model and operating discipline. For the full year, we expanded gross margins by nearly 70 basis points and EBITDA margins by approximately 50 basis points, both reaching new highs.

本季核心 EBITDA 利潤率接近 16%，以及我們的模型和營運紀律固有的可變費用調整和成本控制。全年毛利率成長近70個基點，EBITDA利潤率成長約50個基點，均創歷史新高。

When looking back to fiscal 2017, which is when we began implementing various initiatives around our current strategy, gross margins have increased nearly 150 basis points while EBITDA margins have expanded over 400 basis points.

回顧 2017 財年，也就是我們開始圍繞當前策略實施各種措施時，毛利率成長了近 150 個基點，而 EBITDA 利潤率則增加了 400 個基點以上。

Overall, these results provide further evidence of the benefits of our strategy and ongoing evolution as well as the margin improvement potential ahead as we continue to leverage our differentiated industry position and internal initiatives.

總體而言，這些結果進一步證明了我們的策略和持續發展的好處，以及隨著我們繼續利用我們差異化的產業地位和內部舉措，未來的利潤率改善潛力。

This includes ongoing mix tailwinds long term as we expand our solutions portfolio and grow our local account base as well as continued benefits from technology investments, analytics, increased scale and an enhanced organic growth profile.

這包括隨著我們擴大解決方案組合併擴大本地客戶群而帶來的長期持續混合順風，以及技術投資、分析、規模擴大和有機成長狀況增強帶來的持續收益。

As it relates to sales trends, consistent with broader industrial data points in recent months, we saw additional moderation in the end market demand as the quarter played out. This result -- resulted in organic daily sales declining 2% over the prior year, compared to 8.7% increase in the third quarter.

由於它與銷售趨勢相關，與近幾個月更廣泛的工業數據點一致，我們看到隨著本季的結束，終端市場需求進一步放緩。這一結果導致每日有機銷售額比去年同期下降 2%，而第三季則成長 8.7%。

The year-over-year trend improved some in June on a firm finish to the month and an easier comparison. Similar to last quarter, trends were bifurcated with sales declines primarily concentrated in the fluid power operations of our Engineered Solutions segment, where equipment OEMs continue to work through excess fluid power component inventory.

6 月的同比趨勢有所改善，因為該月的收尾較為穩固且比較更容易。與上季類似，銷售下降的趨勢主要集中在我們的工程解決方案部門的流體動力業務中，設備原始設備製造商繼續透過過剩的流體動力組件庫存來解決問題。

Sales within our MRO focused areas of our business, including service center and flow control operations held in better, with related sales up slightly year-over-year. As a reminder, MRO related sales represent approximately 70% of our overall business.

我們的 MRO 業務重點領域（包括服務中心和流量控制業務）的銷售狀況較好，相關銷售額較去年同期略有成長。提醒一下，MRO 相關銷售額約占我們整體業務的 70%。

That said, MRO billing activity was more mixed compared to last quarter as customers conservatively managed maintenance spending within the uncertain business environment. This bifurcated demand backdrop is evident when looking at our top 30 end markets were 14 generated positive sales growth year-over-year, compared to 15 last quarter.

儘管如此，與上季相比，MRO 計費活動更加複雜，因為客戶在不確定的商業環境中保守地管理維護支出。從我們的前 30 個終端市場來看，這種兩極化的需求背景顯而易見，其中 14 個終端市場實現了同比正銷售成長，而上季有 15 個終端市場。

We're still seeing decent growth across areas such as food and beverage, metals, transportation, refining and mining. This was offset by declines in machinery, energy, pulp and paper, fabricated metals, rubber and plastics and utilities.

我們仍然看到食品和飲料、金屬、運輸、煉油和採礦等領域的良好成長。這被機械、能源、紙漿和造紙、金屬製品、橡膠和塑膠以及公用事業的下降所抵消。

Muted demand trends have sustained into fiscal -- into early fiscal 2025, with organic sales through mid August trending down a mid single digit percent compared to prior year levels. We would point out early first quarter trends are always difficult to gauge given seasonal slowness in the summer and some normalization following our year end.

需求低迷的趨勢持續到 2025 財年初期，截至 8 月中旬的有機銷售額與去年同期相比呈現中個位數下降趨勢。我們要指出的是，鑑於夏季的季節性放緩以及年底後的一些正常化，第一季初的趨勢總是很難衡量。

Also, July started off relatively slow but improved as the month progressed with the back half finishing flat compared to prior year levels, including a strong finish in the last week. So the demand backdrop remains choppy, which we believe reflects impact from higher interest rates and uncertainty around the upcoming US election.

此外，7 月開局相對緩慢，但隨著月份的進展有所改善，後半段收盤與去年水平持平，包括上週的強勁收盤。因此，需求背景仍然波動，我們認為這反映了利率上升和即將到來的美國選舉不確定性的影響。

This is resulting in customers conservatively managing production schedules and taking a more methodical approach to capital project spending near term, it will be important to see how the latter part of the first quarter shapes up, including activity in September, which is typically a better gauge for underlying demand as production schedules normalize following summer breaks and related plant shutdown.

這導致客戶保守地管理生產計劃，並在近期對資本項目支出採取更有條理的方法，重要的是要了解第一季後期的情況，包括 9 月的活動，這通常是一個更好的衡量標準隨著暑假和相關工廠停工後生產計畫恢復正常，潛在需求將得到滿足。

Looking more into each of our segments, sales in our Service Center segment declined modestly over the prior year, on an organic daily basis, year-over-year trends held relatively steady through the quarter, but sequential trends were below normal seasonal patterns.

更深入研究我們的每個細分市場，我們的服務中心細分市場的銷售額比前一年略有下降，按每日有機計算，整個季度的同比趨勢保持相對穩定，但連續趨勢低於正常的季節性模式。

Sales were softer across our local account base and within our consumables MSS business, partially offset by ongoing growth across larger national accounts in Fluid Power aftermarket sales. Technical break fix demand, which represents about half our service center sales held relatively steady during the quarter, as broader production activity it was consistent at a more normalized pace.

我們的本地客戶群和消耗品 MSS 業務的銷售疲軟，部分被更大的全國客戶流體動力售後市場銷售的持續成長所抵消。技術故障修復需求（約占我們服務中心銷售額的一半）在本季度保持相對穩定，因為更廣泛的生產活動以更正常化的速度保持一致。

This aligns with the US industrial capacity utilization readings during the quarter, including increases in May and June. On the other hand spending on general MRO and capital maintenance projects was more mixed as we saw customers tighten controls and operational expenses and defer capital spending.

這與本季美國工業產能利用率讀數一致，包括五月和六月的成長。另一方面，由於我們看到客戶加強控制和營運支出並推遲資本支出，一般 MRO 和資本維護項目的支出更加複雜。

That said, relative to broader market indicators and benchmarks. Our service center operations continue to show outperformance, as well as more resilient growth profile compared to prior cycles. It's important to note that the segment grew 8% organically on a two year stack basis during the quarter and 29% on a three year stack basis, which we believe highlights top-tier industry growth over a multiyear period.

也就是說，相對於更廣泛的市場指標和基準。與先前的周期相比，我們的服務中心營運持續表現出優異的業績以及更具彈性的成長態勢。值得注意的是，該細分市場在本季度的兩年疊加基礎上有機增長了 8%，在三年疊加基礎上有機增長了 29%，我們認為這突顯了多年來頂級行業的增長。

Overall, our service center team continues to benefit from a strong industry position, service capabilities and ongoing sales force initiatives as well as greater cross-selling opportunities. We're also seeing incremental growth through our digital channels, including EDI and applied.com, where related sales increased approximately 9% during fiscal 2024 and including over 6% in the fourth quarter. Combined with ongoing talent initiatives and our local service capabilities, we continue to capture new growth opportunities across both legacy and emerging end markets.

總體而言，我們的服務中心團隊繼續受益於強大的行業地位、服務能力和持續的銷售人員計劃以及更多的交叉銷售機會。我們也看到透過我們的數位管道（包括 EDI 和 Applied.com）實現增量成長，其中相關銷售額在 2024 財年增長了約 9%，其中第四季度增長超過 6%。結合持續的人才計畫和我們的本地服務能力，我們繼續在傳統和新興終端市場中捕捉新的成長機會。

Within our Engineered Solutions segment, sales declined 4.6% on an organic daily basis compared to the prior year, primarily reflecting ongoing softness across our fluid power operations. As mentioned earlier, and consistent with last quarter, most of the weakness in Fluid Power is tied to reduced shipments of off-highway mobile, OEM components and systems.

在我們的工程解決方案部門，與前一年相比，每日銷售額下降了 4.6%，主要反映了我們流體動力業務的持續疲軟。如前所述，與上季一致，流體動力領域的大部分疲軟與非公路移動、OEM 組件和系統的出貨量減少有關。

We estimate fluid power off-highway mobile sales represent about 20% of segment sales or 7% of total sales. We expect the off-highway market to remain somewhat muted for another quarter or so, as OEM customers continue to work through excess inventory.

我們估計流體動力非公路行動裝置銷售額約佔細分市場銷售額的 20% 或總銷售額的 7%。我們預計非公路市場在接下來的一個季度左右將保持一定程度的低迷，因為原始設備製造商客戶將繼續處理過剩的庫存。

However, we remain constructive on the growth trajectory developing in this core area of fluid power, given our leading market position and capabilities serving growing industry trends tied to machinery, automation, power management, electronic control, integration, connectivity and electrification.

然而，鑑於我們領先的市場地位和服務於機械、自動化、電力管理、電子控制、整合、連接和電氣化等不斷增長的行業趨勢的能力，我們對流體動力這一核心領域的增長軌跡仍持建設性態度。

The pace of required innovation across off-highway mobile equipment is accelerating faster than ever, given these secular trends and the growing focus on safety, skilled labor constraints and sustainability. Our strategies and teams are aligned to support thousands of specialized OEMs, engineer design and integrate these advanced features into their equipment with world-class technologies from top fluid power suppliers.

鑑於這些長期趨勢以及對安全、熟練勞動力限制和永續性的日益關注，非公路移動設備所需的創新步伐比以往任何時候都更快。我們的策略和團隊一致支援數以千計的專業原始設備製造商、工程師設計並將這些先進功能整合到他們的設備中，並採用頂級流體動力供應商的世界一流技術。

In addition, the demand for stationary fluid power systems across industrial focused end markets remained steady and should continue to positively develop in coming years given various tailwinds. This includes required investments focused on updating aging manufacturing equipment, including enhancing the efficiency and lifecycle of hydraulic systems, power units, filtration systems and hydraulic presses.

此外，以工業為重點的終端市場對固定式流體動力系統的需求保持穩定，並且考慮到各種有利因素，未來幾年應該會繼續積極發展。這包括所需的投資，重點是更新老化的製造設備，包括提高液壓系統、動力裝置、過濾系統和液壓機的效率和生命週期。

During the quarter, the Engineered Solutions segment was also pressured by ongoing sales decline across the technology vertical, which we estimate negatively impacted segment organic sales growth by approximately 100 basis points.

本季度，工程解決方案部門也受到整個技術垂直領域持續銷售下滑的壓力，我們估計這對部門有機銷售成長產生了約 100 個基點的負面影響。

This vertical has been a headwind on the segment for nearly six quarters, but we see positive signs developing. As a reminder, our focus in this vertical provides various fluid conveyance, pneumatic process control and automation solutions to production supply chains and infrastructure across semiconductor and electronics manufacturing as well as data center facilities.

近六個季度以來，這一垂直領域一直是該領域的逆風，但我們看到了積極的跡象正在發展。提醒一下，我們在這一垂直領域的重點是為半導體和電子製造以及資料中心設施的生產供應鏈和基礎設施提供各種流體輸送、氣動過程控制和自動化解決方案。

Recent indicators suggest demand for semiconductors and related fabrication equipment could begin to recover in fiscal 2025, following an extended downturn for more than a year, with commentary from related customers increasingly positive. We're also positioned to benefit from ongoing growth across data center infrastructure, including providing various Flow Control and robotic solutions for server cooling, material handling and technical maintenance.

最近的指標表明，在經歷了一年多的持續低迷之後，對半導體和相關製造設備的需求可能會在 2025 財年開始復甦，相關客戶的評論也越來越積極。我們還可以從資料中心基礎設施的持續成長中受益，包括為伺服器冷卻、材料處理和技術維護提供各種流量控制和機器人解決方案。

Some of these trends in the technology sector are poised to benefit our automation operations as well. During the quarter, automation sales declined organically by mid single digit percent, but increased 7% sequentially. Our automation business funnel remains high and demand signals from several high-profile end market verticals suggest billing and shipment activity could pick up soon.

科技領域的一些趨勢也將有利於我們的自動化營運。本季度，自動化銷售額有機下降了個位數百分比，但環比成長了 7%。我們的自動化業務管道仍然很高，來自幾個備受矚目的終端市場垂直市場的需求訊號表明計費和發貨活動可能很快就會回升。

We're also in a great position given our expanding automation footprint and network capacity, including greenfield initiatives, a recent facility expansion in the Pacific Northwest and our May 2024 acquisition of Grupo Kopar. Within our flow control operations, which represent about 45% of our Engineered Solutions segment, sales increased by a low single digit percent over the prior year.

鑑於我們不斷擴大的自動化足跡和網路容量，包括綠地計劃、最近在太平洋西北地區的設施擴建以及我們 2024 年 5 月收購 Grupo Kopar，我們也處於有利地位。在我們的流量控制業務（約占我們工程解決方案部門的 45%）中，銷售額比上一年增長了較低的個位數百分比。

Consistent with prior quarters, our flow control operations are benefiting from new business tied to customers' decarbonization and energy transition efforts, including supporting process systems used for carbon capture utilization and storage as well as producing alternative fuel sources.

與前幾季一致，我們的流量控制業務受益於與客戶脫碳和能源轉型工作相關的新業務，包括支援用於碳捕獲利用和儲存以及生產替代燃料來源的製程系統。

We see -- we continue to see a solid pipeline developing around this industrial megatrend that should directly benefit our leading flow control operations for many years. We're also benefiting from new business tied to data center growth tailwinds across the US, including providing valve and inspection solutions in support of liquid processing. The data center end market was a nice incremental contribution to our flow control sales growth in fiscal 2024, and we see additional growth opportunities developing moving forward.

我們看到——我們繼續看到圍繞這一工業大趨勢發展的堅實管道，這將直接使我們多年來領先的流量控制業務受益。我們也受惠於與美國各地資料中心成長順風相關的新業務，包括提供支援液體處理的閥門和檢查解決方案。資料中心終端市場對我們 2024 財年的流量控制銷售成長做出了很好的增量貢獻，我們看到未來還會出現更多成長機會。

I'm also encouraged by the segment's margin performance in the quarter with EBITDA margins up nearly 100 basis points over the prior year, and EBITDA growing nearly 5% year-over-year, despite the sales decline. The performance partially reflects a stronger mix of Engineered Solutions sales growing during the quarter, as well as benefits from ongoing pricing and margin initiatives. Our Grupo Kopar acquisition also had a modest positive mix impact to the segment gross margins, and we look forward to seeing additional contributions moving forward as they fully onboard.

我也對該部門本季的利潤率表現感到鼓舞，儘管銷售額下降，但 EBITDA 利潤率比上年增長了近 100 個基點，且 EBITDA 同比增長了近 5%。這一業績在一定程度上反映了本季度工程解決方案銷售的強勁增長，以及持續的定價和利潤計劃帶來的好處。我們對 Grupo Kopar 的收購也對該部門的毛利率產生了適度的積極綜合影響，我們期待看到他們全面加入後做出更多貢獻。

Overall, the segment's margin performance highlights the positive tailwind. We expect to persist long term as we continue to scale the segment and grow our position across engineered solutions and systems.

總體而言，該部門的利潤率表現凸顯了積極的推動力。隨著我們繼續擴大該細分市場並提高我們在工程解決方案和系統中的地位，我們希望能夠長期堅持下去。

Lastly, we had another record year of cash generation in fiscal 2024, and we accelerated capital deployment with over $250 million spent on organic investments, acquisitions, share buybacks, dividends and debt repayment over the past five years, we deployed over $1 billion in capital towards these areas. During the last three years, we deployed nearly $70 million in CapEx, which represents a nearly 30% increase compared to the prior three year period.

最後，我們在2024 財年創造了另一個創紀錄的現金生成年，我們加速了資本部署，在過去五年中，我們在有機投資、收購、股票回購、股息和債務償還上花費了超過2.5億美元，部署了超過10 億美元的資本向這些領域。在過去三年中，我們部署了近 7,000 萬美元的資本支出，與前三年相比成長了近 30%。

This includes investments in technology, distribution centers, advanced equipment, supporting our technical capabilities and facility expansions tied to our technology vertical and automation operations. Our system investments have enhanced our working capital management and inventory sourcing, both of which will remain key to our ability to gain share and service customers, while optimizing our investment in inventories to effectively do so.

這包括對技術、配送中心、先進設備的投資，支援我們與技術垂直和自動化營運相關的技術能力和設施擴展。我們的系統投資增強了我們的營運資金管理和庫存採購，這兩者仍然是我們獲得份額和服務客戶的能力的關鍵，同時優化我們的庫存投資以有效地做到這一點。

As it relates to M&A, we've made five acquisitions over the past year, including two bolt-on transactions we announced today in total machine solutions and Stanley Proctor, both companies bring strong technical knowledge and service capabilities and aligned supplier relationships in the regional markets that will enhance our competitive position.

就併購而言，我們在過去一年中進行了五次收購，包括今天宣布的整體機器解決方案和Stanley Proctor 方面的兩項補充交易，兩家公司都帶來了強大的技術知識和服務能力，並在該地區建立了一致的供應商關係市場，這將增強我們的競爭地位。

Of note, TMS will supplement our service center growth potential in the US upper northeast with local customer focus and capabilities across the food and beverage vertical. Stanley Proctor will join our fluid power network and brings specialization and capabilities in the design and assembly of hydraulic power units as well as fluid power rebuild and repair services.

值得注意的是，TMS 將以本地客戶為中心以及食品和飲料垂直領域的能力來補充我們在美國東北部北部的服務中心的成長潛力。 Stanley Proctor 將加入我們的流體動力網絡，並帶來液壓動力裝置設計和組裝以及流體動力重建和維修服務方面的專業知識和能力。

M&A remains a top capital allocation priority in fiscal 2025, our pipeline is active with varying size targets across both segments and focused on enhancing our technical differentiation in value added service capabilities.

併購仍然是 2025 財年資本配置的首要優先事項，我們的管道在兩個領域都處於活躍狀態，目標規模各異，並專注於增強我們在增值服務能力方面的技術差異化。

We were also active in share repurchases in fiscal 2024, acquiring nearly 400,000 shares for $73 million with over $460 million cash on our balance sheet and our attractive cash flow potential as well as over [1 million] shares remaining on our authorization. We see ongoing scope for share repurchases moving forward, considering valuation on our long-term growth potential and our enhanced margin profile, we will also remain focused on growing our ordinary dividend moving forward.

我們也在2024 財年積極進行股票回購，以7,300 萬美元的價格收購了近400,000 股股票，我們的資產負債表上有超過4.6 億美元的現金，我們的現金流潛力具有吸引力，我們的授權中剩餘超過[100 萬] 股。我們認為未來股票回購的空間將會持續擴大，考慮到對我們長期成長潛力的估值和我們提高的利潤率狀況，我們也將繼續專注於增加我們的普通股利。

Overall, our balance sheet and cash generation potential provides significant firepower and flexibility to further scale our business and accelerate stakeholder returns in fiscal 2025 regardless of near term end markets. This presents a compelling component of our long-term value creation potential, when considering industry wide frac fragmentation required investments to support evolving customer demands in differentiated industry position and related M&A opportunities. As always, we will remain maintained our disciplined returns-based approach and be transparent on capital allocation priorities as they develop.

總體而言，無論近期終端市場如何，我們的資產負債表和現金生成潛力都提供了強大的火力和靈活性，可進一步擴大我們的業務規模並加快利益相關者在 2025 財年的回報。考慮到行業範圍內的壓裂破碎化所需的投資，以支持差異化行業地位和相關併購機會中不斷變化的客戶需求，這代表了我們長期價值創造潛力的一個引人注目的組成部分。一如既往，我們將繼續維持嚴格的基於回報的方法，並在資本配置優先事項發展時保持透明。

Lastly, before I turn it over to Dave. I'd like to take a moment to thank every stakeholder of this great organization. From our customers, associates, suppliers to other business partners, communities and shareholders. We value your ongoing support and commitment to our journey.

最後，在我把它交給戴夫之前。我想花點時間感謝這個偉大組織的每一位利害關係人。從我們的客戶、同事、供應商到其他業務夥伴、社群和股東。我們重視您對我們旅程的持續支持和承諾。

We've accomplished a great deal together in the past five years. This includes EBITDA and adjusted EPS compounded annual growth of 11% and 17%, respectively. EBITDA margin expansion of nearly 300 basis points, more than $1.3 billion in free cash generation and a meaningful increase in our returns on capital.

在過去的五年裡，我們共同取得了許多成就。其中 EBITDA 和調整後每股盈餘複合年增長率分別為 11% 和 17%。 EBITDA 利潤率成長近 300 個基點，自由現金產生超過 13 億美元，資本報酬率顯著提高。

That said, in many ways, we feel like we're just getting started with the significant opportunity we see ahead and that we're planning for which we believe will further compound our recent success into even greater value creation in coming years.

也就是說，從很多方面來說，我們覺得我們剛開始利用我們所看到的未來​​重大機遇，我們正在計劃，我們相信這將進一步鞏固我們最近的成功，在未來幾年創造更大的價值。

So at this time, I'll turn the call over to Dave for additional detail on our financial results and outlook.

因此，此時，我會將電話轉給戴夫，以獲取有關我們財務業績和前景的更多詳細資訊。

Thanks, Neil. Just as a reminder, as in prior quarters, we have posted a supplemental quarterly investor presentation to our Investor site for your additional reference. We hope you will find this useful as we recap our most recent quarter performance and initial fiscal 2025 guidance.

謝謝，尼爾。提醒一下，與前幾季一樣，我們已在投資者網站上發布了補充季度投資者演示文稿，供您額外參考。我們希望您在我們回顧最近一個季度的業績和 2025 財年初步指導時會發現這很有用。

Turning now to details of our financial performance in the quarter, consolidated sales increased 0.2% over the prior year quarter, acquisitions contributed 150 basis points, while the difference in selling days had a positive 80 basis points impact. This was partially offset by negative 10 basis points impact from foreign currency translation.

現在轉向我們本季度財務業績的詳細信息，綜合銷售額比去年同期增長 0.2%，收購貢獻了 150 個基點，而銷售天數的差異產生了 80 個基點的積極影響。這被外幣換算造成的 10 個基點的負面影響部分抵消。

Netting these factors sales decreased 2% year-over-year on an organic daily basis. As it relates to pricing, we estimate the contribution of product pricing on year-over-year sales growth was in the low single digits for the quarter and slightly below last quarter.

扣除這些因素後，銷售額以每日有機率年減 2%。由於與定價相關，我們估計本季產品定價對年比銷售成長的貢獻為低個位數，略低於上季。

Turning now to sales performance by segment, as highlighted on slides seven and eight of the presentation. Sales in our Service Center segment decreased 0.7% year-over-year on an organic daily basis when excluding a 1.2% positive impact from acquisitions. The positive 0.8% impact from the difference in selling days and a negative 10 basis points impact from foreign currency translation.

現在轉向按細分市場劃分的銷售業績，如簡報第七和第八張投影片中所強調的。排除收購帶來的 1.2% 的正面影響，服務中心部門的銷售額按日有機率比去年同期下降 0.7%。銷售天數差異帶來 0.8% 的正影響，外幣換算帶來 10 個基點的負影響。

On a sequential basis, segment sales per day decreased 0.5% from fiscal third quarter 2024, which was below normal seasonal patterns, so primarily reflecting April and May trends. From a vertical market standpoint, softer demand in this segment was primarily concentrated across machinery, fabricated metals, aggregates and energy.

與 2024 財年第三季相比，分部每日銷售額較上季下降 0.5%，低於正常的季節性模式，因此主要反映了 4 月和 5 月的趨勢。從垂直市場的角度來看，該領域需求疲軟主要集中在機械、金屬製品、骨材和能源領域。

We continued to see positive sales growth across national accounts, while international sales were also positive year-over-year. This was offset by softer trends across local accounts and our maintenance supplies and consumables business. Segment EBITDA increased 16% over the prior year, while EBITDA segment -- EBITDA margin of 14.6% was up 190 basis points year-over-year, which includes a favorable 80 basis points impact from lower LIFO expense.

我們繼續看到國民帳戶的銷售正成長，而國際銷售也較去年同期成長。這被本地客戶以及我們的維護用品和消耗品業務的疲軟趨勢所抵消。該部門的 EBITDA 比上年增長了 16%，而 EBITDA 部門的 EBITDA 利潤率為 14.6%，同比增長了 190 個基點，其中包括後進先出費用降低帶來的 80 個基點的有利影響。

Within our Engineered Solutions segment sales decreased 1.8% over the prior year quarter, this includes a positive 200 basis points of growth from acquisitions and organic daily basis, accounting for the difference in selling days, segment sales decreased 4.6% year-over-year.

在我們的工程解決方案部門中，銷售額比去年同期下降了 1.8%，其中包括收購和日常有機增長 200 個基點，考慮到銷售天數的差異，部門銷售額同比下降了 4.6%。

The year-over-year decline was primarily driven by a high single digit percent decline in fluid power and to a lesser extent, a mid-single digit percent decline in automation. This was partially offset by low single digit growth across our process flow control operations. Segment EBITDA increased approximately 5% over the prior year. By segment, EBITDA margin of 15.7% was up 95 basis points from prior year levels, inclusive of a favorable 30 basis points impact from lower LIFO expense.

年比下降主要是由於流體動力領域的高個位數下降以及自動化領域中個位數的下降所致。這部分被我們的流程控制操作的低個位數成長所抵銷。部門 EBITDA 較上年增長約 5%。按部門劃分，EBITDA 利潤率為 15.7%，比上年水準成長 95 個基點，其中包括後進先出費用下降帶來的 30 個基點的有利影響。

Moving to gross margin performance, as highlighted on page nine of the deck, gross margin of 30.7% increased 146 basis points compared to the prior year level of 29.2%. During the quarter, we recognized LIFO expense of $0.3 million compared to $8.1 million in the prior year quarter and $4.8 billion last quarter.

至於毛利率表現，正如演示文稿第九頁所強調的那樣，毛利率為 30.7%，與上一年 29.2% 的水平相比，增加了 146 個基點。本季，我們確認後進先出費用為 30 萬美元，去年同期為 810 萬美元，上季為 48 億美元。

LIFO expense continues to normalize from record levels in recent years. We saw additional moderation in the fourth quarter, primarily related to more balanced inventory purchases and a nominal layer liquidation benefit in the quarter, driven by reductions in various product categories to align with current demand levels as well as easing supplier price increases over the past year, as we previously highlighted.

後進先出費用從近年來的創紀錄水準繼續正常化。我們在第四季度看到了進一步的放緩，主要與更平衡的庫存採購和本季度的名義層清算收益有關，這是由於各種產品類別的減少以適應當前的需求水平以及過去一年供應商價格上漲的放緩所推動的，正如我們之前強調的那樣。

This net LIFO tailwind had a favorable 67 basis points year-over-year impact on gross margins. Excluding this LIFO impact, we still generated solid gross margin expansion in the quarter, despite ongoing mix headwinds tied to lower sales across our Engineered Solutions segment and local accounts.

這種淨後進先出的順勢對毛利率產生了同比 67 個基點的有利影響。排除後進先出的影響，儘管我們的工程解決方案部門和本地客戶的銷售額下降導致持續的混合阻力，但我們在本季度仍然實現了穩健的毛利率擴張。

Underlying performance reflects strong channel execution, a greater mix of solution sales, effective freight management and ongoing margin initiatives. We estimate price cost was relatively neutral to the quarter's performance. As it relates to our operating costs, selling distribution and administrative expenses increased 2.4% compared to prior year levels. SD&A expense was 18.7% of sales during the quarter, up from 18.3% during the prior year quarter, but down compared to the last quarter.

基本績效反映了強大的通路執行力、更廣泛的解決方案銷售組合、有效的貨運管理和持續的利潤計劃。我們估計價格成本對於本季的業績來說相對中性。由於與我們的營運成本相關，銷售分銷和管理費用比去年水準增加了 2.4%。 SD&A 費用佔本季銷售額的 18.7%，高於去年同期的 18.3%，但與上一季相比有所下降。

On an organic constant currency basis, SD&A expense was down 0.2% over the prior year period. The team showed strong execution in controlling costs in the quarter against the muted demand backdrop, despite ongoing inflationary headwinds, we also benefit from ongoing efficiency gains and reduced variable expense, a lower sales, which helped balance higher associated costs, the ongoing inflationary pressures and growth positioning as we focus on a pending demand reacceleration and strategic growth investments.

以有機固定匯率計算，SD&A 費用比去年同期下降 0.2%。在需求疲軟的背景下，團隊在本季度控製成本方面表現出了強大的執行力，儘管通膨持續存在阻力，但我們也受益於持續的效率提升和可變費用的減少、銷售額的下降，這有助於平衡更高的相關成本、持續的通膨壓力和成長定位，因為我們專注於待定需求的重新加速和策略性成長投資。

Overall, our cost management, combined with favorable gross margin expansion resulted in reported EBITDA increasing 9.6% year-over-year during the quarter, while EBITDA margin of 13.2% increased 113 basis points year-over-year and nearly 140 basis points sequentially.

總體而言，我們的成本管理加上有利的毛利率擴張，導致本季報告的 EBITDA 較去年同期成長 9.6%，而 EBITDA 利潤率為 13.2%，較去年同期成長 113 個基點，較上季成長近 140 個基點。

On a full year basis, for fiscal 2024, EBITDA increased 5.5% compared to a 1.5% sales increase. Our EBITDA margin was up 47 basis points below the operating income line, we also continue to benefit from reduced debt levels and greater interest income from higher cash balances and investment yields, combined with a slightly higher tax rate relative to prior levels, reeported earnings per share of $2.64 increased 12.6% from prior year levels. On a full year basis for fiscal 2024, adjusted EPS of $9.75 increased 11.4%. Our fourth consecutive year of double-digit EPS growth.

從全年來看，2024 財年的 EBITDA 成長了 5.5%，而銷售額則成長了 1.5%。我們的EBITDA 利潤率比營業收入線低47 個基點，我們也繼續受益於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，再加上相對於之前水準略高的稅率，報告的每股收益2.64 美元的份額比去年水準增加了 12.6%。以 2024 財年全年為基礎，調整後每股收益為 9.75 美元，成長 11.4%。我們的每股盈餘連續第四年達到兩位數成長。

Moving to our cash flow performance, cash generated from operating activities during the fourth quarter was $119.2 million, while free cash flow totaled $111.7 million or 108% of net income. For the full year, we generated free cash of $346.5 million, which was up 9% from the prior year, a record high despite greater working capital investment during the year, reflecting sustained earnings growth. Our enhanced margin profile and ongoing progress on working capital initiatives.

轉向我們的現金流表現，第四季經營活動產生的現金為 1.192 億美元，而自由現金流總計 1.117 億美元，佔淨利潤的 108%。全年，我們產生了 3.465 億美元的自由現金，比上年增長 9%，儘管年內營運資本投資增加，但仍創歷史新高，反映出盈利持續增長。我們提高了利潤率，並在營運資本計畫方面持續取得進展。

From a balance sheet perspective, we ended June with approximately $461 million of cash on hand and net leverage at 0.2 times EBITDA, which is below the prior level of 0.5 times and down slightly from 0.3 times last quarter.

從資產負債表的角度來看，截至 6 月份，我們手頭現金約為 4.61 億美元，淨槓桿率為 EBITDA 的 0.2 倍，低於之前 0.5 倍的水平，且較上季度的 0.3 倍略有下降。

Our balance sheet is in a solid position to support our capital deployment initiatives moving forward as well as enhanced returns for all stakeholders.

我們的資產負債表處於穩固的地位，可以支持我們的資本部署計劃向前發展，並為所有利益相關者提高回報。

During the quarter, we repurchased approximately 235,000 shares for $44.5 billion, bringing the full year fiscal 2024 total share repurchases to 398,000 shares, $473 million.

本季度，我們以 445 億美元的價格回購了約 235,000 股股票，使 2024 財年全年股票回購總額達到 398,000 股，即 4.73 億美元。

I will turn now to our outlook, which is detailed on page 12 of the presentation, we are establishing full year fiscal 2025 guidance, including EPS in the range of $9.20 to $9.95 based on assumptions for total sales of down 2.5% to up 2.5%, including down four to up 1% on an organic daily basis as well as EBITDA margins of 12.1% to 12.3%.

我現在將轉向我們的展望，該展望在演示文稿第12 頁中有詳細介紹，我們正在製定2025 財年全年指導，包括基於總銷售額下降2.5% 至增長2.5% 的假設，每股收益在9.20 美元至9.95 美元之間，包括每日自然成長率下降 4% 至上升 1%，以及 EBITDA 利潤率 12.1% 至 12.3%。

Our outlook takes into consideration sales trends through mid August, increased economic uncertainty, continuing strategic growth investments. At the midpoint of guidance, we're assuming ongoing moderation in broader market demand through the first half of the year as customers continue to normalize production levels and manage through current business uncertainty, resume market demand stabilizes in the back half of the year, combined with easing comparisons to the year. The midpoint of guidance assumes sales decline year-over-year through the first half of the year stabilized in the third quarter and return to growth in the fourth quarter.

我們的展望考慮了截至 8 月中旬的銷售趨勢、經濟不確定性的增加以及持續的策略性成長投資。在指導中點，我們假設今年上半年更廣泛的市場需求持續放緩，因為客戶繼續使生產水平正常化並應對當前的業務不確定性，下半年市場需求恢復穩定，綜合與當年相比有所緩和。指導中點假設上半年銷售額年減在第三季趨於穩定，並在第四季恢復成長。

In addition, based on quarter-to-date sales trends through mid-August, we currently project fiscal first quarter organic sales to decline by mid-single digit percentage over the prior year quarter. From a margin and cost perspective, we assume ongoing inflationary pressures, albeit at a more modest level than fiscal 2024.

此外，根據截至 8 月中旬的季度至今的銷售趨勢，我們目前預計第一財季的有機銷售額將比去年同期下降中個位數百分比。從利潤和成本的角度來看，我們假設通膨壓力持續存在，儘管其水準比 2024 財年更為溫和。

We also expect some margin headwinds near term, reflecting expense deleveraging and sales declines as we evaluate the direction of end-market demand and position the business for a reacceleration in coming quarters. As such, our guidance assumes EBITDA margins declined slightly on a full year basis, pending further transparency on broader economic conditions, our near term growth trajectory and LIFO expense trends.

我們也預期近期利潤率會出現一些阻力，反映出費用去槓桿化和銷售額下降，因為我們評估終端市場需求的方向並為未來幾季的業務重新加速做好準備。因此，我們的指導假設 EBITDA 利潤率全年略有下降，有待更廣泛的經濟狀況、我們的近期成長軌跡和後進先出費用趨勢的進一步透明度。

Lastly, from a cash generation perspective, we expect another solid year of free cash flow performance given easier working capital investment in the front half of the year. In addition, we expect ongoing organic investments, supporting our growth strategy and value proposition, technology investments and supply chain with capital expenditures targeted in the $28 million to $30 million range for fiscal 2025.

最後，從現金產生的角度來看，鑑於今年上半年營運資本投資更加寬鬆，我們預期自由現金流表現將會強勁。此外，我們預計將持續進行有機投資，以支持我們的成長策略和價值主張、技術投資和供應鏈，2025 財年的資本支出目標為 2,800 萬至 3,000 萬美元。

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, fiscal 2024 was another meaningful year for Applied, we executed well within a slower demand environment while positioning the company for long-term success through several acquisitions and internal growth investments.

謝謝，戴夫。總而言之，2024 財年對於應用材料公司來說又是有意義的一年，我們在需求放緩的環境中表現出色，同時透過多次收購和內部成長投資使公司取得長期成功。

We entered fiscal 2025 with strong conviction in our potential while focused on executing and managing through a muted end market backdrop. Near term, we expect customers will continue to conservatively manage operational and capital spending near term amid ongoing business and economic uncertainty.

進入 2025 財年，我們對自己的潛力充滿信心，同時專注於在終端市場低迷的背景下執行和管理。短期內，我們預計在持續的業務和經濟不確定性的情況下，客戶將繼續保守地管理近期的營運和資本支出。

As such, we're taking a prudent approach to our initial guidance pending additional clarity on the direction, a broader macro and industrial activity. Ultimately, we believe near term slowness will be shortened duration, and we're positioning the business accordingly through ongoing investments and growth initiatives.

因此，在方向、更廣泛的宏觀和工業活動進一步明確之前，我們對初步指導採取謹慎的態度。最終，我們相信近期經濟放緩的持續時間將會縮短，我們將透過持續的投資和成長計畫來相應地定位業務。

In addition, our track record shows we know how to operate in any environment with various self-help opportunities, active cost controls and operational discipline that provide support if a softer demand backdrop prolongs.

此外，我們的業績記錄表明，我們知道如何在任何環境下運營，並提供各種自助機會、積極的成本控制和營運紀律，以便在需求疲軟的背景持續下去時提供支援。

That said, we see several potential catalysts on the horizon, including a possible reacceleration in US industrial production following subdued activity the past 18 months. This appears reasonable when considering structural tailwinds positively impacting US manufacturing activity and a greater level of deferred maintenance over the past several quarters.

儘管如此，我們仍看到一些潛在的催化劑即將出現，包括美國工業生產在過去 18 個月的低迷活動後可能重新加速。考慮到結構性因素對美國製造業活動的正面影響以及過去幾季更大程度的延期維護，這似乎是合理的。

In addition, tailwinds should emerge in coming quarters as the Fed begins easing interest rates and we move beyond election uncertainty while demand across our technology vertical and automation operations is poised to rebound following over a year of reduced activity, combined with easing comparisons in our M&A pipeline, we see a path for year-over-year sales trends to gradually improve through fiscal 2025 and potentially accelerate into the back half of the year.

此外，隨著聯準會開始放寬利率，我們將擺脫選舉的不確定性，而在一年多的活動減少之後，我們的技術垂直和自動化業務的需求有望反彈，再加上我們的併購比較寬鬆，未來幾季應該會出現順風車我們認為，到 2025 財年，年比銷售趨勢將逐步改善，並可能在今年下半年加速。

We also remain favorably positioned to benefit from various secular mega trends developing across the North American industrial market. This includes localizing and reshoring supply chains required infrastructure investments, equipment modernization on aged industrial assets and the build-out and maintenance of systems used for decarbonization.

我們也保持有利的地位，可以從北美工業市場發展的各種長期大趨勢中受益。這包括本地化和回流供應鏈所需的基礎設施投資、老化工業資產的設備現代化以及用於脫碳的系統的建設和維護。

We believe our North America focus and comprehensive portfolio of technical solutions, including motion control, fluid power, specialty flow control and automation solutions will play a critical role in supporting these growth tailwinds.

我們相信，我們對北美的關注和全面的技術解決方案組合（包括運動控制、流體動力、特殊流量控制和自動化解決方案）將在支持這些成長順風方面發揮關鍵作用。

Further through our ongoing growth development initiatives, we are actively evaluating new business opportunities to expand our solution and service capabilities. While we remain focused on serving markets with products and solutions, close to our core, we believe greater scale and certain existing capabilities in -- investing in near adjacencies could meaningfully strengthen our competitive position, organic growth and margin profile.

此外，透過我們持續的成長發展計劃，我們正在積極評估新的商機，以擴展我們的解決方案和服務能力。雖然我們仍然專注於為市場提供接近我們核心的產品和解決方案，但我們相信，擴大規模和某些現有能力——投資鄰近地區可以有意義地增強我們的競爭地位、有機成長和利潤狀況。

This includes ongoing investments in our digital channel shop and belting services and IoT offering across our service center network. We also continue to evaluate service and support offerings in automation as customer requirements expand and aftermarket opportunities begin to emerge across our focus areas.

這包括對我們的數位通路商店以及整個服務中心網路的傳送帶服務和物聯網產品的持續投資。隨著客戶需求的擴大以及我們重點領域開始出現的售後市場機會，我們也將繼續評估自動化領域的服務和支援產品。

Considering these dynamics as well as fiscal 2024 margin performance and nearly $2 billion of current balance sheet capacity, we are increasingly confident in the opportunity developing beyond our intermediate intermediate term objectives of $5.5 billion in sales and 13% EBITDA margins. We'll look to provide additional color on our next financial objectives as we receive greater clarity on the broader macro backdrop post the US election and make further progress.

考慮到這些動態以及 2024 財年的利潤率表現和近 20 億美元的當前資產負債表容量，我們對超越 55 億美元銷售額和 13% EBITDA 利潤率的中期目標的機會越來越有信心。隨著我們對美國大選後更廣泛的宏觀背景更加清晰並取得進一步進展，我們將尋求為我們的下一個財務目標提供更多的資訊。

Overall, our track record over the past five years highlights the power of our strategy and value-creation potential, and we are extremely motivated and engaged based on what we believe lies ahead.

整體而言，我們過去五年的業績記錄凸顯了我們策略的力量和價值創造潛力，我們對未來的信念充滿動力和投入。

As always, we thank you for your continued support and with that, we'll open up the lines for your questions.

一如既往，我們感謝您一直以來的支持，因此，我們將開通熱線回答您的問題。

(Operator Instructions) Kenneth Newman, KeyBanc.

（操作員說明）Kenneth Newman，KeyBanc。

Hey, good morning, guys. So if I missed it, but I think in the past you would you have what was embedded at the midpoint of your guidance, your expectations for the macro outlook, whether it be industrial production or capacity utilization. Did you guys mention what's embedded there at the midpoint today? And if not, could you could you please provide that?

嘿，早上好，夥計們。因此，如果我錯過了它，但我認為在過去，您會了解指導中點的內容，即您對宏觀前景的預期，無論是工業生產還是產能利用率。你們有沒有提到今天中點嵌入的內容？如果沒有，您能提供一下嗎？

I'll start. I'd say for us right at the midpoint assumes first half declines my mid single digit organically in the second half increase low single digit organically. And then as we think about it from a market assumption standpoint, it would assume mid-single digit market declines at the low end and low single digit market declines at the high end of our guidance.

我開始吧。我想說的是，對我們來說，在中點，假設上半年有機地下降我的中個位數，下半年有機地增加低個位數。然後，當我們從市場假設的角度考慮時，假設市場在我們指導的低端出現中個位數的下跌，在我們指導的高端出現低個位數的市場下跌。

Okay. That's helpful. And then for my follow-up, and obviously a lot of puts and takes here on the margins going forward into the into the first quarter. Obviously, you had really good margin performance in Engineered Solutions despite the weaker organic demand. Just how resilient. Can engineering margins be relative to 4Q on what seems like a pretty muted growth here, (inaudible) 4Q to 1Q?

好的。這很有幫助。然後是我的後續行動，顯然在第一季的邊緣有很多看跌期權和賣出期權。顯然，儘管有機需求較弱，但工程解決方案的利潤表現確實不錯。多麼有彈性。工程利潤率是否可以相對於第四季（第四季到第一季）成長相當緩慢？

So maybe I'll talk about it overall from a margin standpoint and what would be in probably the implied or the first quarter type guidance is that we think gross margins could be down sequentially from the fourth quarter and I obviously printed results and we show the LIFO good improvement in to the activity, but with mix and potentially some lower sales on the Engineered Solutions side, that's where we would think would impact those margins sequentially in the side?

因此，也許我會從利潤率的角度整體討論這個問題，可能隱含的或第一季度類型的指導是，我們認為毛利率可能會從第四季度開始連續下降，我顯然打印了結果，我們展示了後進先出對活動有良好的改善，但由於工程解決方案方面的混合和潛在的銷售額下降，我們認為這會依次影響這些利潤率？

Yeah, I'd add we're very optimistic about the performance, the Engineered Solutions segment, margins contribution in the most recent quarter and what that does demonstrate is the ongoing evolution towards more value add, which continues to improve that margin profile as we move forward. So as we really see that business rebound, that's going to contribute nicely to the overall AIT gross margin performance and EBITDA margins (multiple speakers)

是的，我想補充一點，我們對最近一個季度的業績、工程解決方案部門、利潤貢獻非常樂觀，這確實表明了向更多附加價值的持續發展，這將繼續改善我們的利潤狀況前進。因此，當我們真正看到業務反彈時，這將對 AIT 的整體毛利率表現和 EBITDA 利潤率做出巨大貢獻（多位發言者）

As we move through the year, -- then as we move through the years of the year, we see the potential local accounts in all accelerate or pickup into the side as well as others. That will be mix positive or mix accretive across technology and automation.

隨著這一年的過去，我們看到潛在的本地帳戶以及其他帳戶都在加速或回升。這將在技術和自動化方面產生積極的混合或混合增值。

Got it. Yeah. That was getting my clarifying question there is, does the incremental margins in engineered solutions look like legacy growth numbers or better, just given all the cost outs that you've had there?

知道了。是的。這引起了我的澄清問題，考慮到您在那裡的所有成本支出，工程解決方案的增量利潤是否看起來像傳統的成長數字或更好？

I would say, -- the starting point I would say would be similar. Obviously, we have initiatives going forward, that's going to help them further accelerate in those continue to be in process for us.

我想說，－－我想說的出發點是相似的。顯然，我們有一些前進的舉措，這將幫助他們進一步加速我們繼續進行的工作。

Got it. Thanks for the time.

知道了。謝謝你的時間。

(Operator Instructions) Chris Dankert, Loop Capital.

（操作員說明）Chris Dankert，Loop Capital。

Good morning, guys. Thanks for taking the questions. But I guess maybe if we could stay on the cost side of the equation here, really nice margin performance in the quarter. I guess how much of that was maybe discrete actions versus just pulling the reins back on some of the discretionary costs. Maybe just if you could give us some additional color, I kind of think about your SD&A in the quarter here.

早安，夥計們。感謝您提出問題。但我想，如果我們能夠留在等式的成本方面，本季的利潤率表現確實不錯。我猜想其中有多少可能是離散的行動，而不是只控制一些可自由支配的成本。也許您能給我們一些額外的信息，我想一下您本季的 SD&A。

So as I think about it in the fourth quarter, I think it shows kind of the resiliency of the model and is there's a sales activity or some reductions in the area, what fluctuates as we think about it from an incentive side, we can think about temps requirements on overtime in those other areas.

因此，當我在第四季度思考時，我認為它顯示了該模型的彈性，該地區是否有銷售活動或一些減少，當我們從激勵方面考慮時，會發生什麼波動，我們可以認為關於其他領域的臨時工加班要求。

And so with 30% of the cost stack basically variable. We saw that nice adjustment and fluctuation in the side, and we've demonstrated those capabilities in the model. And so as we look going forward, we would expect those to continue to contribute into the first quarter and really the first half.

因此，30% 的成本堆疊基本上是可變的。我們看到了側面的良好調整和波動，並且我們已經在模型中展示了這些功能。因此，當我們展望未來時，我們預計這些將繼續為第一季乃至上半年做出貢獻。

Got it. Understood. And then maybe to zoom out a little bit. We've been talking about two major drivers, reshoring recapitalization. What have you I guess, and it seems like a lot of customers are just kind of hitting pause into the back half of the year here?

知道了。明白了。然後可能會縮小一點。我們一直在談論兩個主要驅動因素：資本回流。我猜你有什麼想法，似乎很多客戶都在今年下半年暫停？

Or is there any way to quantify how many of these projects are a high level conceptual stuff that you are talking about versus actual kind of shovel ready stuff that could move forward more quickly in the first half of calendar 25?

或者有沒有什麼方法可以量化這些項目中有多少是您正在談論的高級概念性項目，以及有多少是可以在 25 日曆上半段更快推進的實際項目？

Well, a few things there. So I would say from a reshoring standpoint, and I think one of the best ongoing indicators now would be the industrial manufacturing capacity at the Federal Reserve shows right, and it's been up the last 26 months, a longest expansion that they've had in over 20 years. So tells me the activity continues at a high rate. It's sustainable.

嗯，有一些事情。因此，我想說，從回流的角度來看，我認為現在最好的持續指標之一是聯準會的工業製造能力，它在過去26 個月裡一直在增長，這是他們有史以來最長的擴張。所以告訴我活動繼續以很高的速度進行。這是可持續的。

I think even from 2022 to now, it's up 2.5%. And so that's going to create more opportunities for our service center side of the business. And then our work with the teams as we see infrastructure projects planning around technology spend and that infrastructure that's coming and that we see in data centers and localization in chips manufacturing does continue on.

我認為即使從 2022 年到現在，它也上漲了 2.5%。因此，這將為我們的服務中心業務創造更多機會。然後，當我們看到圍繞技術支出進行基礎設施項目規劃時，我們與團隊的合作以及即將到來的基礎設施以及我們在數據中心和晶片製造本地化中看到的基礎設施確實仍在繼續。

And so we just think we have customers near term responding to rates and some economic uncertainty, basically tightening belts and deferring. I'm not making large material changes in dialogue with them as they look for or beyond into the start of calendar year, our fiscal second half, I think many are more optimistic on their type of activity that's going to be going on. And obviously, we're going to be well positioned and prepared to help them execute those projects.

因此，我們認為客戶近期會對利率和一些經濟不確定性做出反應，基本上是勒緊褲腰帶並推遲。我不會在與他們的對話中做出重大的實質改變，因為他們期待或超出日曆年的開始，即我們的下半年財政，我認為許多人對他們將要進行的活動類型更加樂觀。顯然，我們將做好充分準備，幫助他們執行這些專案。

Understood. Thanks for the color there. And if you're maybe just indulge one more housekeeping one and forgive if I missed it, but any comment on just kind of the margin profile of TMS or selling Proctor and kind of how that impacts the business from a from a margin perspective?

明白了。感謝那裡的顏色。如果您可能只是想再享受家務服務，請原諒我錯過了它，但是對 TMS 的利潤狀況或出售 Proctor 以及從利潤角度來看這對業務有何影響有任何評論嗎？

I would say similar would be the look in that.

我想說的是類似的外觀。

Perfect. Well, thanks so much and best of luck in fiscal '25 here, guys.

完美的。好吧，非常感謝，祝各位在 25 財年好運。

Thanks, Chris.

謝謝，克里斯。

And at this time, we have no further questions. I will now turn the call back over to Mr. Schrimsher for any closing remarks.

此時，我們沒有其他問題了。現在，我將把電話轉回給施里姆舍先生，讓他發表結束語。

Thank you very much. We have some away in holiday at this time a year, but we appreciate you joining us. We know and look forward to connecting with many in the upcoming quarter. So again, thanks for being with us today for the ongoing support, and we look forward to talking with many of you in the coming days. Thank you.

非常感謝。我們每年的這個時候都會有一些假期，但我們感謝您加入我們。我們知道並期待在下個季度與許多人建立聯繫。再次感謝您今天對我們的持續支持，我們期待在未來幾天與您中的許多人交談。謝謝。

And ladies and gentlemen, this concludes today's conference, and we thank you for your participation. You may now disconnect.

女士們、先生們，今天的會議到此結束，我們感謝你們的參與。您現在可以斷開連線。