Alamo Group Inc (ALG) 2023 Q1 法說會逐字稿

Greetings, and welcome to the Alamo Group Inc. First Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) It is now my pleasure to introduce your host, Edward Rizzuti, Vice President, General Counsel and Secretary. You may begin, sir.

問候，歡迎來到 Alamo Group Inc. 2023 年第一季度電話會議。此時，所有參與者都處於只聽模式。正式介紹後將進行簡短的問答環節。 （操作員說明）現在我很高興向您介紹主持人、副總裁、總法律顧問兼秘書 Edward Rizzuti。你可以開始了，先生。

Thank you. By now, you should have all received a copy of the press release. However, if anyone is missing a copy and would like to receive one, please contact us at (212) 827-3746, and we will send you a release and make sure you're on the company's distribution list. There will be a replay of the call, which will begin one hour after the call and run for one week. The replay can be accessed by dialing (844) 512-2921 with the passcode 13738073. Additionally, the call is being webcast on the company's website at www.alamo-group.com, and a replay will be available for 60 days.

謝謝。到目前為止，你們應該都收到了一份新聞稿。但是，如果有人遺失一份副本並希望收到一份，請致電 (212) 827-3746 與我們聯繫，我們將向您發送一份聲明並確保您在公司的分發名單上。通話重播將在通話後一小時開始，持續一周。可以通過撥打 (844) 512-2921 使用密碼 13738073 收聽重播。此外，該電話會議正在公司網站 www.alamo-group.com 上進行網絡直播，重播將持續 60 天。

On the line with me today are Jeff Leonard, President and Chief Executive Officer; Richard Wehrle, Executive Vice President, Chief Financial Officer and Treasurer; and Dan Malone, Executive Vice President and Chief Sustainability Officer. Management will make some opening remarks, and then we'll open up the line for your questions.

今天和我一起在線的是總裁兼首席執行官 Jeff Leonard； Richard Wehrle，執行副總裁、首席財務官兼財務主管；執行副總裁兼首席可持續發展官 Dan Malone。管理層將發表一些開場白，然後我們將開通您的問題熱線。

During the call today, management may reference certain non-GAAP numbers in their remarks. Reconciliations of these non-GAAP results to applicable GAAP numbers are included in the attachments to our earnings release.

在今天的電話會議中，管理層可能會在他們的評論中引用某些非 GAAP 數字。這些非 GAAP 結果與適用的 GAAP 數字的對賬包含在我們的收益發布的附件中。

Before turning the call over to Jeff, I'd like to make a few comments about forward-looking statements. We will be making forward-looking statements today that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause the company's actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following: adverse economic conditions, which could lead to a reduction in overall market demand, supply chain disruptions, labor constraints, competition, weather, seasonality, currency-related issues, geopolitical issues and other risk factors listed from time to time in the company's SEC reports.

在將電話轉給 Jeff 之前，我想就前瞻性陳述發表一些評論。我們今天將根據 1995 年私人證券訴訟改革法案的安全港條款作出前瞻性陳述。前瞻性陳述涉及已知和未知的風險和不確定性，可能導致公司未來期間的實際結果與預測結果存在重大差異。可能導致實際結果出現重大差異的因素包括：不利的經濟狀況可能導致整體市場需求減少、供應鏈中斷、勞動力限制、競爭、天氣、季節性、貨幣相關問題、地緣政治問題以及公司 SEC 報告中不時列出的其他風險因素。

The company does not undertake any obligation to update the information contained herein, which speaks only as of this date.

公司不承擔任何更新此處包含的信息的義務，這些信息僅在該日期有效。

I would now like to introduce Jeff Leonard. Jeff, please go ahead.

我現在想介紹傑夫倫納德。傑夫，請繼續。

Thank you, Ed. We want to thank all of you for joining us today. Richard will begin our call with a review of our financial results for the first quarter 2023. I will then provide additional comments on the results. Following our formal remarks, we look forward to taking your questions. So Richard, please go ahead.

謝謝你，埃德。我們要感謝大家今天加入我們。理查德將首先審查我們 2023 年第一季度的財務業績。然後我將對結果提供更多評論。在我們的正式發言之後，我們期待著回答您的問題。所以理查德，請繼續。

Thanks, Jeff, and good morning, everyone. Alamo Group's first quarter 2023 close with another solid performance that produced record net sales and net income. This was driven by a strong demand for our products in what remain -- remains a dynamic operating climate.

謝謝，傑夫，大家早上好。 Alamo Group 在 2023 年第一季度結束時又取得了強勁的業績，產生了創紀錄的淨銷售額和淨收入。這是由於對我們產品的強勁需求所推動的——仍然是一個充滿活力的經營環境。

First quarter consolidated net sales for 2023 were $411.8 million, an increase of 14% compared to $362 million in the first quarter of last year. 2023 net sales were negatively impacted just over 2% by currency translation compared to the same time last year as the U.S. dollar continued to strengthen as it did throughout all of 2022.

2023 年第一季度的綜合淨銷售額為 4.118 億美元，比去年第一季度的 3.62 億美元增長 14%。與去年同期相比，2023 年淨銷售額受到貨幣換算的負面影響略高於 2%，因為美元在 2022 年全年都在持續走強。

Gross margin dollars in the quarter improved compared to the first quarter of 2020 -- gross margin dollars in the quarter improved compared to the first quarter of 2022 by $25.9 million as it did -- as did gross margin percentage, which was up 340 basis points. Both increases were due to price initiatives taken early in 2022, as well as improved manufacturing efficiencies.

與 2020 年第一季度相比，本季度的毛利率有所提高——與 2022 年第一季度相比，本季度的毛利率提高了 2590 萬美元——毛利率也是如此，上升了 340 個基點.這兩項增長都是由於 2022 年初採取的價格舉措以及製造效率的提高。

We experienced improvement in the supply chain as deliveries of inbound inventory were more dependable throughout the quarter. This enabled the company to manufacture its products on a more consistent basis, which in turn allowed for better absorption of manufacturing costs.

我們經歷了供應鏈的改善，因為整個季度入庫庫存的交付更加可靠。這使公司能夠在更一致的基礎上製造其產品，從而可以更好地吸收製造成本。

As a percentage of sales, operating expenses for the first quarter of 2023 came in at just over 15% compared to almost 16% during the same time last year. This, along with improved supply chain, more favorable pricing and higher manufacturing efficiencies led to an operating income for 2023 of $49.0 million, just shy of 12% of sales compared to $29.1 million, or 8%, of sales in the first quarter of 2022, an increase of 390 basis points.

2023 年第一季度營業費用佔銷售額的百分比略高於 15%，而去年同期為近 16%。再加上供應鏈的改善、更優惠的定價和更高的製造效率，2023 年營業收入為 4900 萬美元，僅佔銷售額的 12%，而 2022 年第一季度為 2910 萬美元，佔銷售額的 8% ，增加了 390 個基點。

Consolidated net income for the first quarter of 2023 was $33.4 million, or $2.79, per diluted share, an increase of 80% versus net income of $18.5 million, or $1.55, per diluted share for the first quarter of 2022.

2023 年第一季度的綜合淨收入為 3340 萬美元，即每股攤薄收益 2.79 美元，比 2022 年第一季度的淨收入 1850 萬美元，即每股攤薄收益 1.55 美元增長 80%。

Our continued efforts to control both costs and expenses also supported the increase in profitability.

我們持續努力控製成本和費用也支持盈利能力的提高。

Vegetation Management division had an excellent first quarter for 2023 as markets remained strong. First quarter 2023 net sales were $256.4 million, an increase of 16% compared to $221 million for the first quarter of 2022. Higher sales of Forestry, tree care and agricultural and governmental mowing products in both North America and Europe led the way for the division.

由於市場依然強勁，植被管理部門在 2023 年第一季度表現出色。 2023 年第一季度淨銷售額為 2.564 億美元，與 2022 年第一季度的 2.21 億美元相比增長 16%。北美和歐洲林業、樹木護理以及農業和政府割草產品的銷售額增長引領該部門.

Despite labor constraints, margin improved primarily due to increased net price realization and productivity improvements.

儘管存在勞動力限制，但利潤率有所提高，這主要歸功於淨價格實現的增加和生產率的提高。

Operating income for the first quarter of 2023 for this division was $36.5 million, that's up 99% versus $18.3 million for the same period of 2022.

該部門 2023 年第一季度的營業收入為 3650 萬美元，與 2022 年同期的 1830 萬美元相比增長了 99%。

Industrial Equipment division net sales in the first quarter of 2023 were $155.3 million, up 10%, compared to $141 million for the first quarter of 2022. This was due to a solid performance of sweeper and debris collectors and, to a lesser extent, improved net sales in the division's excavator and vacuum truck and snow product lines.

工業設備部門 2023 年第一季度的淨銷售額為 1.553 億美元，增長 10%，而 2022 年第一季度為 1.41 億美元。這是由於掃地機和垃圾收集器的強勁表現，並且在較小程度上有所改善該部門的挖掘機和真空卡車以及雪地產品線的淨銷售額。

Truck chassis and other component part delivery showed incremental improvement this quarter which in turn drove the improved manufacturing efficiencies, although still not at our expected levels. Operating income in the first quarter of 2023 was $12.5 million compared to $10.8 million for the first quarter of 2022, an increase of 16%.

卡車底盤和其他零部件交付在本季度顯示出逐步改善，這反過來又推動了製造效率的提高，儘管仍未達到我們的預期水平。與 2022 年第一季度的 1080 萬美元相比，2023 年第一季度的營業收入為 1250 萬美元，增長 16%。

The company's backlog at the end of the first quarter of 2023 came in at $995 million. This was an increase of just over 8% compared to backlog at the end of the first quarter of 2022. This backlog position should continue to support higher sales and profits for the balance of 2023.

該公司在 2023 年第一季度末的積壓訂單為 9.95 億美元。與 2022 年第一季度末的積壓量相比，增長略高於 8%。這一積壓量應會繼續支持 2023 年剩餘時間的更高銷售額和利潤。

Turning to a few additional financial items for the first quarter of 2023. Our balance sheet continues to remain strong.

轉向 2023 年第一季度的一些額外財務項目。我們的資產負債表繼續保持強勁。

Working capital increased $90 million to $641 million in the first quarter of 2023 from $551 million in the first quarter of 2022. The increase in working capital resulted primarily from higher cash levels and accounts receivable, which were up almost 23% from a year ago on solid sales volume. We continue to be very pleased with receivables with no major issues on collections and incoming cash remained steady.

2023 年第一季度，營運資金從 2022 年第一季度的 5.51 億美元增加 9000 萬美元至 6.41 億美元。營運資金的增加主要是由於現金水平和應收賬款增加，較上年同期增長近 23%穩固的銷量。我們繼續對應收賬款感到非常滿意，收款方面沒有重大問題，收入現金保持穩定。

Inventory was up $7 million compared to the first quarter of 2022. 2023 inventory figures include material and labor cost inflation from 2022. Without this inflation, we reduced inventory quantities year-over-year. This reduction in inventory volume allowed us to reflect a small decrease in debt level, which in turn lowered our leverage ratio to 1.7%.

與 2022 年第一季度相比，庫存增加了 700 萬美元。2023 年的庫存數據包括從 2022 年開始的材料和人工成本通脹。沒有這種通脹，我們同比減少了庫存數量。庫存量的減少使我們能夠反映出債務水平的小幅下降，這反過來又將我們的槓桿率降低至 1.7%。

Finally, the company's trailing 12 months EBITDA was a record $216 million, up 10% compared to the end of 2022.

最後，該公司過去 12 個月的 EBITDA 達到創紀錄的 2.16 億美元，比 2022 年底增長 10%。

For 2023, cash flow should remain strong as our focus on the balance sheet will continue to reduce both inventory and debt levels. Increase in consolidated profits for 2023 will continue to be extremely important as we will continue to be disciplined in controlling costs and expenses. We will also adjust prices as needed based on changes in material transportation costs in order to maintain our target margins. We're also focused on further improving supply chain performance to help reduce amounts -- the amount of the inventory we hold in work in process.

到 2023 年，現金流應該會保持強勁，因為我們對資產負債表的關注將繼續降低庫存和債務水平。 2023 年綜合利潤的增長將繼續極為重要，因為我們將繼續嚴格控製成本和費用。我們還將根據材料運輸成本的變化按需調整價格，以維持我們的目標利潤率。我們還專注於進一步提高供應鏈績效，以幫助減少數量——我們持有的在製品庫存量。

Our biggest challenge will be in meeting the heightened demand for our products throughout the company. We will diligently monitor supply chain issues and labor shortages, which remain dynamic, along with inflation and monetary policy actions, and will react accordingly.

我們最大的挑戰將是滿足整個公司對我們產品日益增長的需求。我們將密切關注供應鏈問題和勞動力短缺問題，這些問題仍然存在，以及通貨膨脹和貨幣政策行動，並將做出相應的反應。

We're pleased that our Board recently approved our regular quarterly dividend of $0.22 per share for the second quarter of 2023.

我們很高興董事會最近批准了 2023 年第二季度每股 0.22 美元的定期季度股息。

With that, I will turn the call back over to Jeff.

有了這個，我會把電話轉回傑夫。

Thank you, Richard. I'd like to offer my personal thanks to everyone who's joined our conference call today. We were certainly pleased with the strong first quarter results we reported today, and I'm exceptionally proud of our teams who made them possible. .

謝謝你，理查德。我想對今天參加我們電話會議的每一個人表示感謝。我們對今天公佈的第一季度強勁業績感到非常滿意，我為我們的團隊感到非常自豪，是他們讓這些成為可能。 .

As we had anticipated, healthy markets and a modest but notable improvement in the performance of our supply chain drove our quarterly sales above the $400 million mark for the first time in company history.

正如我們所預料的那樣，健康的市場和我們供應鏈績效的適度但顯著的改善推動我們的季度銷售額在公司歷史上首次超過 4 億美元大關。

Sales were up nicely across both company operating divisions as previously past due supplier parts began to arrive in quantities that allowed us to increase the pace of our shipments with superb support from our key suppliers, manufacturing flow improved in our larger operations, resulting in better efficiencies.

公司兩個運營部門的銷售額都出現了很好的增長，因為之前逾期的供應商零件開始大量到貨，這使我們能夠在主要供應商的大力支持下加快出貨速度，我們更大的業務中的製造流程得到改善，從而提高了效率.

We've commented on previous calls about our confidence in the price quality of our backlog, and this was evident in our first quarter results. Gross margin improved 30% or 340 basis points compared to the first quarter of 2022, as improved pricing and supplier performance allowed more and better quality backlog to convert to sales.

我們對之前關於我們對積壓訂單價格質量的信心的電話發表了評論，這在我們第一季度的業績中很明顯。與 2022 年第一季度相比，毛利率提高了 30% 或 340 個基點，這是因為定價和供應商績效的改善使得更多更好質量的積壓訂單轉化為銷售。

Concurrently, our teams continue to keep tight control over costs and our expenses expressed as a percentage of sales were down slightly. The combination of higher sales, better pricing, improved efficiency and strict cost discipline drove operating income to 11.9% of sales. We were obviously pleased that operating income is approaching the upgraded target of 12% that we established at the start of 2022 and and this was achieved in the company's normally weaker first quarter.

同時，我們的團隊繼續嚴格控製成本，我們的支出佔銷售額的百分比略有下降。更高的銷售額、更好的定價、更高的效率和嚴格的成本控制相結合，將營業收入推高至銷售額的 11.9%。我們顯然很高興營業收入正在接近我們在 2022 年初設定的 12% 的升級目標，而且這是在公司通常較弱的第一季度實現的。

After tax, company first quarter earnings of $33.4 million were slightly more than 80% higher than the first quarter of 2022. The changes to our manufacturing strategy that we initiated in 2021 also contributed to our first quarter results.

稅後，公司第一季度收益為 3340 萬美元，比 2022 年第一季度略高 80% 以上。我們在 2021 年啟動的製造戰略變化也對我們的第一季度業績做出了貢獻。

As we reported earlier, we closed one of our U.S. snow removal facilities in December 2022 after consolidating the work performed there to a larger sister facility, and we began to see the benefits of that this quarter.

正如我們之前報導的那樣，我們在將在那裡進行的工作整合到一個更大的姊妹設施後，於 2022 年 12 月關閉了我們在美國的一個除雪設施，我們在本季度開始看到它的好處。

We continue to focus on facility consolidations to reduce costs and improve capacity utilization.

我們繼續專注於設施整合，以降低成本並提高產能利用率。

We're also working steadily on transferring production of our flagship products as close to the market as possible to reduce shipping time and cost and improve working capital turnover.

我們還在穩步努力將我們的旗艦產品的生產轉移到盡可能靠近市場的地方，以減少運輸時間和成本，並提高營運資金周轉率。

Our Vegetation Management division had another outstanding quarter. Compared to the first quarter of 2022, sales were up 16% and operating income improved by over $18 million, an impressive increase of over 99%. Sales in every region and product category increased nicely except for Brazil, where sales were a bit lower as several large contracts were completed.

我們的植被管理部門有另一個出色的季度。與 2022 年第一季度相比，銷售額增長了 16%，營業收入增加了超過 1800 萬美元，增幅超過 99%。每個地區和產品類別的銷售額都有很好的增長，但巴西除外，由於完成了幾項大型合同，巴西的銷售額略有下降。

Industrial Equipment division sales were up over 10% compared to the first quarter of 2022. The division sales of excavators, vacuum trucks, sweepers and debris collectors benefited from the improvement in supply chain performance. Although volume allocations remain in effect, first quarter truck chassis receipts were up more than 20% from the first quarter a year ago and were up nearly 50% from the fourth quarter of 2022. This improvement was achieved through close cooperation with our chassis supply partners and supported by our efforts last year to diversify chassis sourcing.

與 2022 年第一季度相比，工業設備部門的銷售額增長了 10% 以上。挖掘機、吸塵車、清掃車和垃圾收集器的部門銷售額受益於供應鏈績效的改善。儘管銷量分配仍然有效，但第一季度卡車底盤的收貨量比一年前的第一季度增長了 20% 以上，比 2022 年第四季度增長了近 50%。這一改善是通過與我們的底盤供應合作夥伴的密切合作實現的並得到我們去年努力使底盤採購多樣化的支持。

With the leverage of higher sales, better pricing and improved capacity utilization, the division's operating income increased by over 16% compared to the first quarter of 2022.

憑藉更高的銷售額、更好的定價和更高的產能利用率，該部門的營業收入與 2022 年第一季度相比增長了 16% 以上。

I would now like to offer a few observations about conditions in our major markets in the first quarter and the outlook for the remainder of 2023.

現在，我想就第一季度我們主要市場的狀況以及 2023 年剩餘時間的前景發表一些看法。

As we reported in the press release, first quarter order bookings declined 17% compared to the same period of 2022. This decline was confined to Vegetation Management as order bookings in the Industrial Equipment division were up compared to the first quarter of 2022.

正如我們在新聞稿中報導的那樣，第一季度的訂單預訂量與 2022 年同期相比下降了 17%。這種下降僅限於植被管理，因為工業設備部門的訂單預訂量與 2022 年第一季度相比有所增加。

Orders for Forestry and tree care products were lower year-over-year in the first quarter, however, this was largely due to a challenging comparison period as we have reported exceptionally high order intake in this segment during the first quarter of 2022. We experienced a moderate slowing of orders for tractor-mounted mowers and related tillage equipment in the farm and ranch segment in North America. This decline was not unexpected.

第一季度林業和樹木護理產品的訂單同比下降，但這主要是由於比較期充滿挑戰，因為我們報告說 2022 年第一季度該領域的訂單量異常高。我們經歷了北美農場和牧場部分拖拉機式割草機和相關耕作設備的訂單適度放緩。這種下降並不意外。

The Association of Equipment Manufacturers report for the first quarter showed that shipments of tractors less than 100-horsepower were down nearly 18% compared to the first quarter of 2022.

設備製造商協會第一季度報告顯示，與 2022 年第一季度相比，100 馬力以下拖拉機的出貨量下降了近 18%。

Agricultural equipment dealer inventories are returning to pre-pandemic levels as unit shipments have increased due to better supply chain performance. The pace of both shipments and new orders is returning to a more normal cadence as pandemic-related distortions dissipate.

由於供應鏈績效改善，單位出貨量增加，農業設備經銷商庫存正在恢復到大流行前的水平。隨著與大流行相關的扭曲消失，出貨和新訂單的速度正在恢復到更正常的節奏。

More positively, however, sales of our Vegetation Management equipment to governmental agencies were historically strong and order bookings were up compared to the first quarter of last year. Quoting activity in this sector also remains brisk in both North America and Europe.

然而，更積極的是，我們向政府機構銷售的植被管理設備歷來強勁，訂單預訂量與去年第一季度相比有所增加。該行業的報價活動在北美和歐洲也依然活躍。

Finally, although this division's end of first quarter backlog of almost $518 million is down about 15% year-over-year, it remains significantly elevated by historical standards and the first quarter of '22 comparison was exceptional.

最後，儘管該部門第一季度末積壓的近 5.18 億美元同比下降約 15%，但與歷史標準相比仍然顯著提高，22 年第一季度的比較非常出色。

Industrial Equipment division orders received were higher in the first quarter compared to the first quarter of 2022. The increase was driven mostly by stronger activity in our street sweeper and debris collector products. As I pointed out previously, the Industrial Equipment division has been more significantly impacted by supply chain shortages over the past year.

與 2022 年第一季度相比，第一季度工業設備部門收到的訂單更高。這一增長主要是由於我們的街道清掃機和垃圾收集器產品的活躍度更高。正如我之前指出的那樣，工業設備部門在過去一年中受到供應鏈短缺的影響更為顯著。

We expect that improving chassis delivery volumes and other supply chain performance gains will see sales growth in this division accelerate for the next several quarters and margins should improve further. As this division's activities are more heavily weighted toward governmental customers, we expect good market momentum to continue for the remainder of 2023. This division's end of first quarter order backlog of almost $477 million was 55% higher than the same point in 2022, clearly illustrating the constrained chassis delivery allocations had on its top line growth.

我們預計底盤交付量的提高和其他供應鏈績效的提高將使該部門的銷售在接下來的幾個季度加速增長，利潤率應該會進一步提高。由於該部門的活動更側重於政府客戶，我們預計良好的市場勢頭將在 2023 年剩餘時間內持續。該部門第一季度末的訂單積壓近 4.77 億美元，比 2022 年同期高出 55%，清楚地表明受限的底盤交付分配使其收入增長。

We're also pleased to report that at the recent CONEXPO show in Las Vegas, we unveiled our first fully electric and electric hybrid business of our core products. We were encouraged by the very warm reception of these new, more environmentally friended products received from fleet operators and equipment dealers in attendance.

我們也很高興地報告，在最近於拉斯維加斯舉行的 CONEXPO 展會上，我們推出了我們核心產品的第一個全電動和電動混合動力業務。與會的車隊運營商和設備經銷商對這些新的、更環保的產品的熱烈歡迎讓我們深受鼓舞。

We will release our fourth annual corporate sustainability report in the next few days. In the report, you will see the clear progress we're making toward the achievement of our ESG targets. We hope you'll take the time to download and read the report.

我們將在未來幾天發布第四份年度企業可持續發展報告。在報告中，您將看到我們在實現 ESG 目標方面取得的明顯進展。我們希望您能花時間下載並閱讀該報告。

In summary, we were very pleased with the robust results we have reported today and anticipate that the company will continue to perform at a high level for the next few quarters and for the full year 2023. Our expectations are supported by the sustained strength and quality of our order backlog, improving supply chain performance, rising efficiencies and our commitment to persistent spending discipline.

總而言之，我們對今天公佈的強勁業績感到非常滿意，並預計公司將在未來幾個季度和 2023 年全年繼續保持高水平表現。我們的預期得到了持續實力和質量的支持我們的訂單積壓、改善供應鏈績效、提高效率以及我們對持續支出紀律的承諾。

Uncertainty in our operating environment is evident, however, higher and potentially still rising interest rates are concerning, and we're, therefore, somewhat more cautious about the longer-term outlook for 2024 and beyond.

我們的經營環境的不確定性是顯而易見的，但是，更高且可能仍在上升的利率令人擔憂，因此，我們對 2024 年及以後的長期前景更加謹慎。

I would lastly like to thank our employees, our dealers, our suppliers, customers and financial stakeholders for their continued support for the company.

最後，我要感謝我們的員工、我們的經銷商、我們的供應商、客戶和財務利益相關者對公司的持續支持。

This concludes our prepared remarks. We're now ready to take your questions. Operator, please go ahead.

我們準備好的發言到此結束。我們現在準備好回答您的問題了。接線員，請繼續。

(Operator Instructions) Our first question comes from Mike Shlisky with D.A. Davidson.

（操作員說明）我們的第一個問題來自 D.A. 的 Mike Shlisky。戴維森。

In the first quarter here, you essentially hit the 12% operating margin. You're very, very close to it. That target is very much in view here. Just looking back to history, though Q2 and Q3 are typically higher margin quarters than Q1 are, as you've alluded to on the seasonality of your business. I just want to make sure, is that still the case here in 2023? And is there a good shot then that you can actually make 12% or higher operating margin for the year?

在這裡的第一季度，您基本上達到了 12% 的營業利潤率。你非常非常接近它。這個目標在這裡非常重要。回顧歷史，儘管第二季度和第三季度的利潤率通常高於第一季度，正如您提到的業務季節性。我只是想確定一下，2023 年這裡仍然是這種情況嗎？是否有機會讓您今年實際賺取 12% 或更高的營業利潤率？

Yes, Mike. Thanks for the call and nice to talk to you again. I do believe that's the case, Mike. Q2 and Q3 are normally better for spare parts in our business, and that tends to blend in a better margin. So I'm not going to say I'm 100% confident, but I'm confident we should be knocking on the [door] 12% for the next couple of quarters.

是的，邁克。感謝您的來電，很高興再次與您交談。我確實相信是這樣，邁克。對於我們業務中的備件來說，第二季度和第三季度通常更好，而且往往會帶來更好的利潤率。所以我不會說我有 100% 的信心，但我相信我們應該在接下來的幾個季度敲開 [門] 12%。

Great. And I guess I would want to ask if you do get to 12%, how sustainable is that? Or do you have a next goal in mind? When I look at one of your top peers they're already -- they've already exceeded 12%. You're not too far behind, and I think you actually beat them on margin this past quarter from an EBITDA perspective. I'd be curious if you think you could perhaps reach some of those peer margins, which are a few hundred basis points above 12% in the near future, barring a large economic meltdown or something like that?

偉大的。我想我想問的是，如果你真的達到 12%，這有多可持續？或者你有下一個目標嗎？當我查看您的一位頂級同行時，他們已經 - 他們已經超過 12%。你並沒有落後太多，而且我認為從 EBITDA 的角度來看，你在過去一個季度的利潤率實際上超過了他們。我很好奇你是否認為你可能會達到其中一些同行利潤率，在不久的將來比 12% 高出幾百個基點，除非出現大規模的經濟崩潰或類似的情況？

I think, Mike, as I always say, when we sustainably hit 12% over a couple of quarters, then we'll reset our aspirations a little bit higher. This is a continuous improvement company. And once we hit the mark consistently, then we set it higher. When that will be, I can't say for sure. As I said in the call, I'm a little worried about where interest rates are going and what that might impact on dealer behaviors as we head into 2024. Having said that, our efficiencies are still rising. Our operations in great shape, and our bigger units are performing exceptionally well. So I think you could look for a further discussion about targets from us in the back half of this year.

我想，邁克，正如我一直說的那樣，當我們在幾個季度內持續達到 12% 時，我們就會重新設定更高的目標。這是一家持續改進的公司。一旦我們始終如一地達到目標，我們就會將其設置得更高。那是什麼時候，我不能肯定地說。正如我在電話中所說，我有點擔心利率走向以及在我們進入 2024 年時這可能對經銷商行為產生什麼影響。話雖如此，我們的效率仍在提高。我們的運營狀況良好，我們更大的部門表現異常出色。所以我認為你可以在今年下半年尋求我們對目標的進一步討論。

Okay. A follow-up on your comment there, you just made, Jeff, on the 2024 trends. Are those comments very much meant towards the private sector customers that you're working with? Or is it everything? I'm kind of curious whether there you've got the backlog in Industrial or in both segments (inaudible) 2024 regardless of the broader environment, maybe secondly, whether you think that government's got to build a bit more staying power, if you will, in 2024?

好的。傑夫，您剛剛就 2024 年的趨勢發表了評論。這些評論是否非常針對與您合作的私營部門客戶？還是一切？我很好奇，無論更廣泛的環境如何，2024 年工業領域或兩個領域（聽不清）是否有積壓，也許其次，你是否認為政府必須建立更多的持久力，如果你願意的話, 2024 年？

Yes. I would say these comments toward 2024 are more confined to private customers. The governmental sector remains in great shape, Mike. And everything I read about the state of governmental finances at the state, municipal and county levels is very optimistic and [blunt.] And the order book inside the Industrial Equipment division from governmental customers reflects that. So I think the Industrial division will have a nice strong running in 2024. I think in Vegetation Management, the only real significant concern at this point is Ag and Ag is cycling down a little bit, at least at the low end. I was interested in watching the earnings reports out of the big Ag OEMs, and they're still commenting about the strength in Ag, and I see that, but I think that's more in the larger row-crop farms. At least that's what CNH commented this morning in their earnings release that I got a chance to look at.

是的。我想說這些對 2024 年的評論更多地局限於私人客戶。政府部門保持良好狀態，邁克。我讀到的有關州、市和縣各級政府財政狀況的所有信息都非常樂觀和 [直率]。政府客戶的工業設備部門內部訂單反映了這一點。因此，我認為工業部門將在 2024 年表現強勁。我認為在植被管理方面，目前唯一真正重要的擔憂是 Ag 和 Ag 正在循環下降一點，至少在低端是這樣。我有興趣觀看大型 Ag 原始設備製造商的收益報告，他們仍在評論 Ag 的實力，我看到了，但我認為這更多的是在較大的行作物農場。至少這是 CNH 今天早上在他們的收益發布中評論的，我有機會看到。

Got it. Maybe one last one for me. You did mention it in your prepared comments, but just some thoughts on the acquisition pipeline. Any interesting targets out there? What you're working on? How you might look to pay for something if you can't (inaudible) size, et cetera, would be appreciated.

知道了。也許最後一個給我。您確實在準備好的評論中提到了它，但只是對收購渠道的一些想法。那裡有什麼有趣的目標嗎？你在做什麼？如果您不能（聽不清）尺寸等等，您可能會如何為某物付款，我們將不勝感激。

Our pipeline is looking robust at the moment, Mike, and we're in a position of -- we're trying to stay close to our strategy, to be clear, be a little less opportunistic and really focus on the areas of the business we want to grow. But the pipeline looks encouraging, and our balance sheet continues to improve, which makes doing a little bit larger deal easier for us and certainly more strategic for us over time. So it's looking good at the moment.

我們的管道目前看起來很強大，邁克，我們處於 - 我們正在努力保持接近我們的戰略，明確一點，減少機會主義並真正專注於業務領域我們想要成長。但管道看起來令人鼓舞，我們的資產負債表繼續改善，這使得我們更容易做一些更大的交易，並且隨著時間的推移對我們來說當然更具戰略意義。所以目前看起來不錯。

Our next question comes from Greg Burns with Sidoti & Company.

我們的下一個問題來自 Sidoti & Company 的 Greg Burns。

Just wanted to get your view on like the historic performance of the Ag market, and I'm thinking more in terms of like how the cycles typically run, how many years peak to trough, you might see? Because I know there was a number of years where it's kind of flattish. We've been in kind of this up-cycle for the last couple of years, and it seems like it's softening now. So -- do you just have any historical perspective on kind of the Ag market cycle?

只是想了解您對 Ag 市場歷史表現的看法，我更多地考慮週期通常如何運行，您可能會看到多少年的高峰到低谷？因為我知道有很多年它有點平淡。在過去的幾年裡，我們一直處於這種上升週期中，現在似乎正在減弱。那麼——你對農業市場週期有什麼歷史看法嗎？

What I would say, Greg, is the normal cycle in the ag business is 4 to 5 years for the kinds of products that we produce. I think we are at the late stage of that. Having said that, the whole cycle was distorted by the pandemic and the backlog in our Ag business still remains historically high, not as high as they were, but historically high. If you go back even to prepandemic levels, they're significantly higher. So I think we are going to see this kind of a peaking of the -- tipping of the peaks, cutting off the peaks and filling in the valleys a little bit. So what I'm trying to say is I think the size will remain as it is normally, but I think the highs and lows will be more attracted -- more close to each other. Still on the dips a little bit.

格雷格，我要說的是，對於我們生產的各種產品，農業業務的正常週期是 4 到 5 年。我認為我們處於後期階段。話雖如此，整個週期都被大流行扭曲了，我們 Ag 業務的積壓仍然處於歷史高位，雖然沒有以前那麼高，但處於歷史高位。如果你回到大流行前的水平，它們會高得多。所以我認為我們將看到這種高峰 - 高峰的傾斜，切斷高峰並稍微填充山谷。所以我想說的是，我認為規模將保持正常，但我認為高點和低點會更吸引——彼此更接近。仍然在逢低一點點。

That makes sense. And then on the Forestry and tree care side of the business, what are the main demand drivers that we could look to, to kind of monitor the health of that segment of your business?

這就說得通了。然後在業務的林業和樹木護理方面，我們可以關注的主要需求驅動因素是什麼，以監測您業務的這一部分的健康狀況？

I think the most important one for our business in Forestry is the price of wood pellets. That's a very significant driver for the bigger machines that more bar producers that are used in recycling wood and producing pellets. Housing starts is a more subtle indicator, but it's there for sure. And wood pellets have trended down a little bit recently. We've been watching that fairly closely. But I think the more important takeaway from my remarks on the conference call about our Forestry business is in the first quarter of 2022, we looked over $100 million of orders in that one quarter. So the comparison period was just astronomical. So I was trying to be clear that people shouldn't overreact to that.

我認為對我們林業業務來說最重要的是木屑顆粒的價格。對於用於回收木材和生產顆粒的更多棒材生產商來說，這是更大機器的一個非常重要的驅動力。房屋開工是一個更微妙的指標，但它確實存在。木屑顆粒最近呈下降趨勢。我們一直在密切關注這一點。但我認為，從我在電話會議上關於我們林業業務的評論中，更重要的收穫是在 2022 年第一季度，我們在那個季度看到了超過 1 億美元的訂單。所以比較期只是天文數字。所以我試圖明確表示人們不應該對此反應過度。

We just had a very exceptional period a year ago, and we don't ever -- I don't think ever in history is more or come anywhere close to $100 million a quarter except for that one time. So our Forestry business remains in really good shape. And if you go back and you map the bookings history month by month and quarter by quarter for that business, it's very difficult to see a clear cycle. It's a lot of spikes up and down right? We're still learning it, to be candid with you. But the people in the business that have been with us for a long time said, look, it is difficult to spot these because the buying behaviors get a little distorted because these machines are so long lived.

一年前我們剛剛度過了一個非常特殊的時期，而且我們從來沒有——我認為歷史上沒有比這更多或接近每季度 1 億美元的，除了那一次。因此，我們的林業業務保持良好狀態。而且，如果您返回並按月和按季度繪製該業務的預訂歷史記錄，則很難看到清晰的周期。上下有很多尖峰，對嗎？我們仍在學習，坦率地說。但長期與我們合作的業內人士表示，看，很難發現這些，因為這些機器壽命太長，購買行為有點扭曲。

So the distortions come when you introduce new technology or where there's a breakthrough that might accelerate the obsolescence of some of the machines in the field. And there was some of that. We have introduced some new products in 2021 that really took up nicely for us.

因此，當您引入新技術或出現可能加速該領域某些機器過時的突破時，就會出現扭曲。還有一些。我們在 2021 年推出了一些新產品，這些產品對我們來說真的很受歡迎。

Okay. I guess with that commentary on the order bookings, have you seen any change since the end of the quarter? Can you maybe update us on kind of the first part of this quarter, how the order bookings have trended?

好的。我想通過對訂單預訂的評論，您是否看到自本季度末以來有任何變化？您能否向我們介紹本季度第一部分的情況，訂單預訂趨勢如何？

Yes. They've trended fairly consistently what we've reported for the first quarter, Greg. We haven't noticed a significant change from what I've reported here today in the month of April. So things are kind of steady as it goes at the moment. I think what we are starting to see though is more dealer caution. The inventories in the Ag side of the business are back to where they were pre-pandemic or very close to that. Having said that, they weren't exceptionally high pre-pandemic. So we're not alarmed about it at all.

是的。格雷格，他們的趨勢與我們第一季度報告的趨勢相當一致。與我今天 4 月份在這里報告的情況相比，我們沒有註意到重大變化。所以目前情況有點穩定。我認為我們開始看到的是經銷商更加謹慎。該業務的 Ag 方面的庫存已恢復到大流行前或非常接近的水平。話雖如此，它們在大流行前並不是特別高。所以我們一點也不擔心。

But I think with rising interest rates, dealers begin to pay a lot more attention to their balance sheets. So we're watching the payables closely. We've seen a few less people taking up the prepayment discounts, early payment discounts and so on, which are a bit cautionary indicators for us.

但我認為隨著利率上升，交易商開始更加關注他們的資產負債表。所以我們正在密切關注應付賬款。我們已經看到很少有人接受預付款折扣、提前付款折扣等，這對我們來說是一個警示指標。

So while I'm not overly concerned, we're definitely keeping our eye on the ball and that I could just being careful about what we do, how much we produce and our inventories altogether.

因此，雖然我並不過分擔心，但我們肯定會密切關注球，我可以對我們所做的事情、我們生產的數量和我們的庫存保持謹慎。

Our next question comes from Tim Moore with EF Hutton.

我們的下一個問題來自 Tim Moore 和 EF Hutton。

Nice job on stringing together two consecutive quarters of strong sales and robust gross margin expansion. It's nice to see the orders and backlog holding up. Yes. It's really nice to see the orders and backlog holding up for visibility.

將連續兩個季度的強勁銷售和強勁的毛利率擴張聯繫在一起做得很好。很高興看到訂單和積壓的訂單。是的。很高興看到訂單和積壓的訂單保持可見性。

The first question, I just want to dive into the supply chain and under-absorption of manufacturing efficiencies. Has that -- it seems like that improved a lot, I guess, maybe since February. And do you think it won't be much of a gross margin drag as you look out past June?

第一個問題，我只想深入探討供應鍊和製造效率的不足。有沒有——我猜這似乎有了很大改善，也許從 2 月開始。展望 6 月之後，您認為這不會拖累毛利率嗎？

I think we're going to see further improvements in the margins, particularly in Industrial because the supply chain is beginning to clear up there. It's improved really significantly. But having moved away from the immediate crisis in chassis, that is dissipating. We're still struggling with things like oil coolers and hydraulics and other components. And again, it's better, but it's not where it needs to be by any stretch of the imagination. But I do expect the margins in industrial are going to improve for the next couple of quarters. And we're pretty optimistic about the way those are going to shape up for the balance of this year.

我認為我們將看到利潤率進一步提高，特別是在工業領域，因為那裡的供應鏈開始清理。它確實得到了顯著改善。但在擺脫了底盤的直接危機之後，這種情況正在消散。我們仍在努力解決油冷卻器、液壓系統和其他組件等問題。再一次，它更好，但它不是任何想像所需要的地方。但我確實預計未來幾個季度工業利潤率將會提高。我們對今年餘下時間的形成方式非常樂觀。

Great. That's a helpful color. What actions are you, maybe, taking to deal with the labor shortages to meet the heightened demand? And is there anything else can maybe due there?

偉大的。這是一種有用的顏色。您可能正在採取什麼行動來應對勞動力短缺以滿足日益增長的需求？那裡還有什麼可以到期的嗎？

That hasn't been as big an issue for us in Q1. That's beginning to dissipate. Our hiring rates have been improving. We've been focusing more on things like apprenticeship programs and preparing (inaudible), bringing in unskilled people and training to work in our plants. So I don't think that's really going to be too much of a constraint as we go into Q2 and Q3. Our bigger plants and Ag still have some shortages. But at the moment, with the Ag business where it is, if we can stay ahead of that at the peak of the market, I'm pretty satisfied with it. Beyond that, we continue to invest very heavily in robotics and automation. And if you go and visit our bigger factories and I will be doing some point soon, you would see that firsthand.

在第一季度，這對我們來說並不是什麼大問題。那開始消散。我們的招聘率一直在提高。我們一直更加關注學徒計劃和準備（聽不清）、引進非熟練人員和培訓在我們的工廠工作等事情。所以我認為當我們進入第二季度和第三季度時，這真的不會成為太多的限制。我們較大的工廠和 Ag 仍然存在一些短缺。但目前，鑑於 Ag 業務的現狀，如果我們能夠在市場高峰期保持領先地位，我對此非常滿意。除此之外，我們繼續大力投資機器人技術和自動化。如果你去參觀我們更大的工廠，我很快就會做一些事情，你會親眼看到。

Great. That's helpful color. And what about just how quickly can you maybe add one or two manufacturing plants to -- in Europe to increase the penetration of maybe mowers and sweepers while also saving on the transportation costs from the U.S. to Europe?

偉大的。這是有用的顏色。你能以多快的速度在歐洲增加一兩個製造工廠，以增加割草機和清掃機的普及率，同時節省從美國到歐洲的運輸成本呢？

Yes, very, very interesting and timely question. We just finished a board meeting and we're discussing the expansion of several of our plants in Europe and some of them quite significant. So those are in planning stages, and we expect to initiate those projects later this year, in both U.K. and France specifically.

是的，非常非常有趣和及時的問題。我們剛剛結束了一次董事會會議，我們正在討論我們在歐洲的幾家工廠的擴張，其中一些非常重要。所以這些都處於規劃階段，我們希望在今年晚些時候啟動這些項目，特別是在英國和法國。

Great. That's helpful. And just related to CONEXPO and just electrification in general, how soon can maybe some of the prototypes convert to commercial success? I believe you were working on an electric street sweeper that can maybe operate 4 or 5 hours on a battery instead of diesel. Is there anything that you expect to launch that could be out by the end of the year or early next year?

偉大的。這很有幫助。與 CONEXPO 和一般電氣化有關，一些原型可能多久才能轉化為商業成功？我相信您正在研究一種電動街道清掃機，它可以使用電池而不是柴油運行 4 或 5 小時。有什麼你希望在今年年底或明年初推出的東西嗎？

Our launch time isn't limited by ourselves. It's limited by the availability of the electrified chassis. So that fully electric street sweeper, we showed at CONEXPO got overwhelmingly positive feedback and lots of people are ready to take those machines. But we literally got the second chassis off the assembly line. So as our suppliers can ramp up the manufacturing capacity of the chassis, we'll accelerate the introduction -- full commercial introduction of those products in the market. But from our end, we're ready, we can go at any time.

我們的發佈時間不受我們自己的限制。它受到電氣化底盤可用性的限制。因此，我們在 CONEXPO 上展示的全電動掃路車獲得了壓倒性的積極反饋，很多人都準備好使用這些機器了。但我們確實讓第二個底盤下線了。因此，隨著我們的供應商可以提高底盤的製造能力，我們將加快引進——將這些產品完全商業化地引入市場。但從我們這邊來說，我們已經準備好了，我們可以隨時出發。

Great. And my last question maybe it's a 2-parter maybe for Richard. Obviously, things with pricing and cost for transportation and the surcharges that you've been doing were a bit of a catch-up and freight might be coming down a little bit. Are any of those kind of surcharges rolling off on the transportation side?

偉大的。我的最後一個問題可能是 Richard 的 2 人。顯然，定價和運輸成本以及你一直在做的附加費有點趕上了，運費可能會下降一點。運輸方面是否會徵收此類附加費？

And just for Rich, just around free cash flow and working capital, do you expect any one-off drags on working capital when you look at the June or September quarters that might curtail free cash flow? Because it seems, without that, you might be on track for at least $80 million, $85 million in free cash flow this year. I was just wondering if there was anything odd coming up in the next couple of quarters? .

就 Rich 而言，就自由現金流和營運資本而言，當您查看可能會減少自由現金流的 6 月或 9 月季度時，您是否預計任何一次性拖累營運資本？因為看起來，如果沒有它，你今年可能有望獲得至少 8000 萬、8500 萬美元的自由現金流。我只是想知道接下來的幾個季度是否會出現什麼奇怪的事情？ .

Yes. For your second question, no. Nothing odd that we're staring at here that caused an issue with that. So I do not feel that's a problem at all.

是的。對於你的第二個問題，沒有。沒有什麼奇怪的是我們盯著這裡引起了問題。所以我覺得這根本不是問題。

What about the surcharge question?

附加費問題呢？

On the surcharges piece, we've dropped some surcharges where we've -- when we do invoices to customers, we've not adjusted the price, but when we had so many price increases last year, when it comes so quick, we started doing surcharge, we pulled some of those off as costs have diminished related to freight and whatnot.

在附加費方面，我們已經降低了一些附加費——當我們向客戶開具發票時，我們沒有調整價格，但是當我們去年漲價如此之快時，我們開始收取附加費，我們取消了其中一些附加費，因為與運費等相關的成本已經減少。

So I think -- overall, I think we're in pretty good shape there. We're not any really major issues. Again, a major piece of this is our backlog pricing is excellent. So I think we're managing that as we go through. And so when we do get requests to try to reduce some cost, it's going to be first thing we do is to take off the surcharge.

所以我認為 - 總的來說，我認為我們在那裡的狀況非常好。我們不是什麼大問題。同樣，其中一個主要部分是我們的積壓定價非常好。所以我認為我們正在管理它。因此，當我們確實收到嘗試降低某些成本的請求時，我們要做的第一件事就是取消附加費。

And I think the other part of your question was specifically regarding the surcharges we receive on inbound or outbound shipments from shippers. And we've not seen substantive relief on those yet, to be clear. I think we've got to see a consistent, sustained fall in fuel prices before we're going to see those surcharges start to fade, just to peak there.

我認為您問題的另一部分具體是關於我們從托運人處收到的進出港貨物的附加費。需要明確的是，我們還沒有看到這些方面的實質性緩解。我認為，在我們看到這些附加費開始消退並達到頂峰之前，我們必須看到燃油價格持續持續下跌。

(Operator Instructions) Our next question comes from Chris Moore with CJS Securities.

（操作員說明）我們的下一個問題來自 CJS 證券公司的 Chris Moore。

So it sounds like backlog pricing was strong after Q4. It's continued on a kind of from a relative strength perspective, is the pricing on Vegetation or Industrial, much different?

因此，聽起來積壓定價在第四季度之後很強勁。從相對強度的角度來看，它繼續在某種程度上，植被或工業的定價有很大不同嗎？

No. Actually, not. The margins are very close across the 2 divisions at the moment, and we expect to stay that way for a bit. What will change it eventually is the softening in the Ag side. And I think that we will see that start to come down and some pricing pressures start to emerge in Ag. I believe as we head into 2024, I don't think we're going to see it much yet in 2023. But at the moment, the two divisions are neck to neck in terms of the margin.

不，實際上，不是。目前這兩個部門的利潤率非常接近，我們預計會保持這種狀態一段時間。最終會改變它的是銀面的軟化。而且我認為我們會看到這種情況開始下降，並且一些定價壓力開始出現在 Ag 中。我相信當我們進入 2024 年時，我認為我們不會在 2023 年看到太多。但目前，這兩個部門在利潤率方面並駕齊驅。

Got it. Yes, that's what I was asking on the margin side. It sounds like the Industrial margins can tick up through '23 that 14% level, which obviously Q2 and Q3 are more parts, looks like it could be sustainable for Vegetation for the rest of '23. So Industrial then likely to keep moving into '24 and then we'll just see what happens on the Vegetation side on the margins?

知道了。是的，這就是我在保證金方面的要求。聽起來工業利潤率可以上升到 23 年 14% 的水平，這顯然是第二季度和第三季度的更多部分，看起來它在 23 年剩餘時間裡對植被來說是可持續的。那麼 Industrial 可能會繼續進入 24 世紀，然後我們將看看邊緣的 Vegetation 方面會發生什麼？

Right. I think so, Chris, because on the Industrial side, we've still got some efficiencies that are lagging. They're not where they need to be because as I said, the truck chassis situation is much better. I think I commented specifically chassis proceeds were about 20% to a year ago. But we're not out of the woods with regard to that yet at all. And that's why the backlog just keeps building at such an extraordinary rate. We didn't anticipate the backlog would go quite as high as it did in Industrial. So it's a nice problem to have. But better pricing should stay in place in the Industrial division for some time to come because governmental agencies really don't renegotiate contracts at all. So that the margin that we have in the backlog in Industrial should be quite durable as it flows out into revenue.

正確的。我認為是的，克里斯，因為在工業方面，我們仍然有一些落後的效率。他們不在他們需要的地方，因為正如我所說，卡車底盤的情況要好得多。我想我特別評論過底盤收益大約是一年前的 20%。但我們還沒有完全擺脫困境。這就是積壓工作以如此驚人的速度不斷增加的原因。我們沒有預料到積壓會像工業一樣高。所以這是一個很好的問題。但更好的定價應該在未來一段時間內在工業部門保持不變，因為政府機構實際上根本不會重新談判合同。因此，我們在工業積壓訂單中的利潤在流入收入時應該相當持久。

Got it. Very helpful. And just on the EV side, I know that's a bit in the future. But from a margin perspective, on the hybrid or on the electric, you expect them to be kind of a parity in terms of current equipment? Or is there any premium that might be gained there?

知道了。很有幫助。就電動汽車而言，我知道那是未來的事。但從利潤率的角度來看，在混合動力或電動方面，您希望它們在當前設備方面具有同等水平？或者是否有任何可能在那裡獲得的溢價？

Yes, I do believe there will be a premium. And more interestingly, Chris, I think we're going to see cost advantages over time as the cost of these electrical components come down. In many ways, an electrified product is easier to assemble than one that's built up of hydraulics and pneumatics and other things, the complexity is lower actually. And so generally, that should translate into less assembly hours over time. So we've been studying that a lot, trying to see where our costs might go. And the initial feedback from those studies was very encouraging about the rate at which we can assemble electrified products compared to their traditional counterparts.

是的，我確實相信會有溢價。更有趣的是，克里斯，我認為隨著這些電氣元件成本的下降，我們將隨著時間的推移看到成本優勢。在許多方面，電氣化產品比由液壓和氣動等其他東西組成的產品更容易組裝，實際上複雜性更低。所以一般來說，隨著時間的推移，這應該會轉化為更少的裝配時間。所以我們一直在研究很多，試圖看看我們的成本可能會花在哪裡。與傳統產品相比，這些研究的初步反饋非常令人鼓舞，我們可以組裝電氣化產品的速度。

There are no further questions at this time. So we are closing our question-and-answer session. Now I would like to turn the floor back over to the management for closing comments.

目前沒有其他問題。因此，我們將結束問答環節。現在我想將發言權交還給管理層以徵求結束意見。

Okay. Thank you. I'd like to thank everyone who's joined us on the call today, and thank you for the excellent questions that were presented by the analysts. We look forward to speaking with all of you on our second quarter conference call in August. Until then, take care and stay safe.

好的。謝謝。我要感謝今天加入我們電話會議的每一個人，並感謝分析師提出的出色問題。我們期待在八月份的第二季度電話會議上與大家交談。在那之前，請保重並保持安全。

That concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。