Alamo Group Inc (ALG) 2023 Q2 法說會逐字稿

Good morning ladies and gentlemen and welcome to the Alamo Group Inc Second Quarter 2023 Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. (Operator Instructions) This call is being recorded on Thursday, August 3, 2023.

女士們、先生們早上好，歡迎參加 Alamo Group Inc 2023 年第二季度電話會議。此時，所有線路都處於只聽模式。演講結束後，我們將進行問答環節。 （操作員說明）此通話錄音時間為 2023 年 8 月 3 日星期四。

I would now like to turn the conference over to Edward Rizzuti, Executive Vice President, General Counsel, and Secretary. Please go ahead.

我現在將會議交給執行副總裁、總法律顧問兼秘書愛德華·裡祖蒂 (Edward Rizzuti)。請繼續。

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 1-844-512-2921 with the passcode 97441743. 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。到現在為止，你們應該都收到了新聞稿的副本。但是，如果有人丟失了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授權書，並確保您在公司的分發列表中。電話會議將進行重播，重播將於電話會議後一小時開始，持續一周。可以通過撥打 1-844-512-2921（密碼 97441743）觀看重播。此外，該電話會議正在公司網站 www.alamo-group.com 上進行網絡直播，重播將在 60 天內提供。

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 will 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傑夫·倫納德 (Jeff Leonard)； Richard Wehrle，執行副總裁、首席財務官兼財務主管；以及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，然後我們將開放您的提問熱線。

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，管理層可能會在講話中引用某些非公認會計準則數據。這些非 GAAP 結果與適用的 GAAP 數據的對賬包含在我們收益發布的附件中。

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; market demand, COVID-19 impacts including operational and supply chain disruptions, competition, weather, seasonality, currency-related issues, geopolitical issues, and other risk factors listed from time-to-time in the company's SEC reports. The company does not undertake any obligation to update the information contained herein which speaks only as of this date.

在將電話轉給傑夫之前，我想對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》的安全港條款做出前瞻性陳述。前瞻性陳述涉及已知和未知的風險和不確定性，這些風險和不確定性可能導致公司未來期間的實際業績發生變化。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如下：市場需求、COVID-19 影響，包括運營和供應鏈中斷、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。公司不承擔更新本文所含信息的任何義務，這些信息僅代表截至目前的情況。

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

現在我想介紹傑夫·倫納德，傑夫。請繼續。

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

謝謝你，艾德。我們要感謝大家今天加入我們的電話會議。 Rich 將在我們的電話會議開始時回顧我們 2023 年第二季度的財務業績。然後我將對結果提供更多評論。在我們正式發言之後，我們期待回答您的問題。

So Richard, please go ahead.

理查德，請繼續。

Thanks Jeff and good morning everyone.

謝謝杰夫，大家早上好。

Alamo Group's second quarter 2023 closed with an excellent performance that produced record net sales and net income driven by strong demand for our products. Second quarter consolidated net sales were $440.7 million, an increase of 11% compared to $396.2 million in the second quarter of last year. Gross margin dollars in the quarter improved compared to the second quarter of 2022 by $18.4 million as the gross margin percent which was up 160 basis points. Both margin dollars and percentage increases were from high volume and price initiatives we began in early 2022 along with productivity gains. We continue to experience improvements in our supply chain as we saw more consistent deliveries throughout the quarter.

Alamo 集團 2023 年第二季度表現出色，在對我們產品的強勁需求推動下，淨銷售額和淨利潤創歷史新高。第二季度合併淨銷售額為 4.407 億美元，比去年第二季度的 3.962 億美元增長 11%。與 2022 年第二季度相比，本季度的毛利率提高了 1840 萬美元，毛利率提高了 160 個基點。利潤率和百分比增長均來自我們於 2022 年初開始的大量銷量和價格舉措以及生產率的提高。我們的供應鏈繼續得到改善，整個季度的交付更加一致。

Operating income for the second quarter came in at $54.4 million versus $40.9 million in the second quarter of 2022, an increase of 33%. Operating income as a percent of sales was 12.3% for the second quarter of 2023 versus 10.3% for the same quarter last year, an increase of 2%. Consolidated net income for the second quarter was $36.4 million or $3.03 per diluted share, an increase of 27% versus net income of $28.5 million or $2.39 per diluted share for the second quarter of 2022. Our continued efforts to control both cost and expenses helped support the increase in profitability despite a dynamic operating environment.

第二季度營業收入為 5440 萬美元，較 2022 年第二季度的 4090 萬美元增長 33%。 2023 年第二季度營業收入佔銷售額的百分比為 12.3%，而去年同期為 10.3%，增長了 2%。第二季度合併淨利潤為3640 萬美元，即稀釋後每股收益3.03 美元，較2022 年第二季度淨利潤2850 萬美元，即稀釋後每股收益2.39 美元增長27%。我們持續努力控製成本和費用，幫助支持儘管經營環境充滿活力，但盈利能力仍有所提高。

The Vegetation Management Division once again delivered solid results in the second quarter of 2023. Net income was $261.3 million, an increase of 3% compared to $255 million for the second quarter of 2022. Strong sales of forestry and tree care and governmental mowing products in North America, UK. and Europe led the way for this division. Despite labor shortages and to a lesser extent supply chain disruptions, margins improved primarily due to increase in net price realization and improvements in operating efficiency. Operating income for the second quarter in this division was $35.6 million, up 8% versus $32.8 million for the same period in 2022.

植被管理部門在 2023 年第二季度再次取得了穩健的業績。淨利潤為 2.613 億美元，比 2022 年第二季度的 2.55 億美元增長了 3%。林業和樹木護理以及政府割草產品的銷售強勁北美、英國。歐洲在這一領域處於領先地位。儘管存在勞動力短缺以及較小程度的供應鏈中斷，但利潤率的提高主要是由於淨價格實現的增加和運營效率的提高。該部門第二季度的營業收入為 3560 萬美元，比 2022 年同期的 3280 萬美元增長 8%。

In the Industrial Equipment Division, net sales in the second quarter were $179.3 million, up 27% compared to $141.2 million for the second quarter of 2022. This was due to a solid performance across all product lines, particularly vacuum trucks, sweepers, tree collectors and snow removal equipment. While truck chassis deliveries showed improvement in the quarter, other component parts shortages continued to impact the division's operations which constrained efficiencies along, although not as significant in previous quarters. This resulted in a significant rise in their operating income in the second quarter for 2023 of $18.8 million compared to $8.1 million for the second quarter of 2022, an increase of 132%.

在工業設備部門，第二季度的淨銷售額為1.793 億美元，比2022 年第二季度的1.412 億美元增長27%。這是由於所有產品線的穩健表現，特別是真空卡車、清掃機、樹木收集器和除雪設備。雖然卡車底盤交付量在本季度有所改善，但其他零部件短缺繼續影響該部門的運營，從而限制了效率，儘管沒有前幾個季度那麼嚴重。這導致他們 2023 年第二季度的營業收入大幅增長 1880 萬美元，而 2022 年第二季度為 810 萬美元，增長了 132%。

Consolidated net sales for the company were a record for the six months of 2023, coming in at $852.5 million, up 12% compared to $758.2 million for the first six months of 2022. Strong demand for our products in both divisions, along with positive impacts of pricing initiatives and improved supply chain and productivity were the main drivers of the increase. Six month gross margin for 2023 was up over $33 million versus the first six months of 2022, an increase of 48%. The margin percentage was up 240 basis points, as we experienced improved supply chain conditions, which led to higher efficiencies and improved capacity utilization. Operating income for the first six months of 2023 was $103.4 million or 12.1% of sales compared to the same period in 2022 which was $70 million or 9.2% of sales, almost a 300 basis point increase. Net income for the first six months of 2023 was $69.7 million or $5.82 per diluted share, also a record versus net income of $46.9 million or $3.94 per diluted share for the first six months of 2022, an increase of 48%.

該公司 2023 年前六個月的綜合淨銷售額創歷史新高，達到 8.525 億美元，比 2022 年前六個月的 7.582 億美元增長 12%。兩個部門對我們產品的強勁需求以及積極影響定價舉措的改進以及供應鍊和生產力的改善是增長的主要驅動力。 2023 年 6 個月毛利率較 2022 年前 6 個月增長 48%，超過 3,300 萬美元。由於供應鏈狀況改善，效率提高，產能利用率提高，利潤率上升了 240 個基點。 2023 年前 6 個月的營業收入為 1.034 億美元，佔銷售額的 12.1%，而 2022 年同期為 7000 萬美元，佔銷售額的 9.2%，增長了近 300 個基點。 2023 年前6 個月的淨利潤為6,970 萬美元，即稀釋後每股收益5.82 美元，同樣創歷史新高，而2022 年前6 個月的淨利潤為4,690 萬美元，即稀釋後每股收益3.94美元，增長48%。

Six months 2023 net sales for the Vegetation Management division were $517.8 million compared to $476 million for 2022, up 9%. The division experienced robust demand in all product categories, particularly in forestry, tree care, land clearing agricultural and governmental mowing in North America, UK and Europe. Six month 2023 operating income was $72.1 million, up 41% versus $51.1 million for the prior year. Labor shortages and currency translation effects negatively impacted the first half of 2023 in this division. For the first six months of 2023, net sales for the Industrial Equipment Division were $334.7 million compared to $282.2 million for the first six months of 2022, a 19% increase. Sales of vacuum trucks, sweepers, debris collectors and snow removal led the way with modest support from excavators. Six month 2023 operating income was $31.3 million versus $18.9 million for the first six months of 2022, an increase of 66%. This division's results continued to be impacted negatively by supply chain disruptions, although improved from the last few quarters, as well as labor shortages and some currency translation effects. The Company's backlog at the end of the second quarter of 2023 came in at just over $891 million. This is slightly down compared to the backlog at the end of the second quarter for 2022, which was $894 million.

植被管理部門 2023 年 6 個月的淨銷售額為 5.178 億美元，而 2022 年為 4.76 億美元，增長 9%。該部門在所有產品類別中都經歷了強勁的需求，特別是北美、英國和歐洲的林業、樹木護理、土地清理農業和政府割草。 2023 年六個月營業收入為 7210 萬美元，比上一年的 5110 萬美元增長 41%。勞動力短缺和貨幣換算影響對該部門 2023 年上半年產生了負面影響。 2023 年前六個月，工業設備部門的淨銷售額為 3.347 億美元，而 2022 年前六個月為 2.822 億美元，增長 19%。在挖掘機的適度支持下，吸塵車、掃地機、碎片收集器和除雪機的銷售一路領先。 2023 年六個月營業收入為 3130 萬美元，而 2022 年前六個月營業收入為 1890 萬美元，增長 66%。該部門的業績繼續受到供應鏈中斷（儘管較過去幾個季度有所改善）以及勞動力短缺和一些貨幣換算影響的負面影響。截至 2023 年第二季度末，該公司的積壓訂單略高於 8.91 億美元。與 2022 年第二季度末的 8.94 億美元積壓訂單相比，略有下降。

Turning to a few additional financial items for the end of the second quarter. Our balance sheet continues to remain strong. Working capital increased $120 million to $657 million from $537 million at the end of the second quarter. The increase in working capital resulted mainly from higher accounts receivable and to a lesser extent, inventory. Accounts receivable were $379 million, that's up 23% from a year ago from solid sales volume. We continue to be extremely pleased with receivables, with no major issues on collections and incoming cash continues to remain steady. Inventory was up $16 million compared to June of 2022, work in process was a major part of that increase is up $6 million compared due to several large orders that we were not able to ship at the end of the quarter of the second quarter. Also we received a high volume of tractors and chassis into inventory towards the trail end of June of this past month. Material cost inflation drove the bulk of the year-over-year increase as well and we were pleased the quantities had come in, had come down slightly in locations within both divisions. During the second quarter as expected, we reduced our debt level on our credit facility by almost $25 million.

轉向第二季度末的一些額外財務項目。我們的資產負債表繼續保持強勁。營運資金從第二季度末的 5.37 億美元增加到 6.57 億美元，增加了 1.2 億美元。營運資金的增加主要是由於應收賬款增加以及庫存增加所致。應收賬款為 3.79 億美元，較去年同期增長 23%，銷量穩定。我們對應收賬款仍然非常滿意，收款方面沒有出現重大問題，並且收到的現金繼續保持穩定。與 2022 年 6 月相比，庫存增加了 1600 萬美元，其中半成品增加了 600 萬美元，這是由於我們在第二季度末無法發貨的幾筆大訂單。此外，我們在上個月六月底的庫存中收到了大量拖拉機和底盤。材料成本通脹也推動了同比增長的大部分，我們很高興兩個部門內的數量有所增加，並且略有下降。正如預期的那樣，第二季度我們的信貸額度債務水平減少了近 2500 萬美元。

Finally, the company's trailing 12 months EBITDA was a record coming in at just over $230 million, up 18% compared to calendar 2022. For the balance of 2023, cash flow should remain strong as our focus on balance sheet will continue to reduce both inventory and debt levels. Increased consolidated profits for 2023 will remain extremely important. We also will remain disciplined in controlling costs and expenses, as inflation continues to put pressure on our margins. We'll also adjust prices as needed based on changes in material and transportation costs in order to maintain our target margins. We are also focusing on further improving supply chain performance to help reduce the amount of inventory we hold in work in process. Our biggest challenge will continue to be meeting the heightened demand for our products throughout the company given current supply chain constraints and labor shortages.

最後，該公司過去12 個月的EBITDA 創歷史新高，略高於2.3 億美元，與2022 年相比增長了18%。對於2023 年的剩餘時間，現金流應該保持強勁，因為我們對資產負債表的關注將繼續減少庫存和債務水平。 2023 年綜合利潤的增加仍然極其重要。由於通貨膨脹繼續給我們的利潤帶來壓力，我們還將繼續嚴格控製成本和費用。我們還將根據材料和運輸成本的變化根據需要調整價格，以維持我們的目標利潤率。我們還致力於進一步改善供應鏈績效，以幫助減少我們在製品中的庫存量。鑑於當前的供應鏈限制和勞動力短缺，我們最大的挑戰將繼續是滿足整個公司對我們產品不斷增長的需求。

We are pleased that our Board recently approved a 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。

So in summary, few key takeaways from the second quarter that are extremely important. Sales up 11%, which in turn translated into a 33% increase in operating income, coming in at 12.3% of sales and a 27% increase in earnings per share.

總而言之，第二季度的一些關鍵要點非常重要。銷售額增長 11%，營業收入增長 33%，佔銷售額的 12.3%，每股收益增長 27%。

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

這樣，我會將電話轉回給傑夫。

Thank you, Richard. I'd like to express my personal thanks to everyone who has joined our call today.

謝謝你，理查德。我想向今天加入我們電話會議的所有人表示我個人的感謝。

We were very pleased that in the second quarter our teams once again set new all-time company records for quarterly sales and net income as we had anticipated lower material cost inflation and a further improvement in the performance of our supply chain helped to increase sales, stabilize our manufacturing cadence and improved operating margins. Sales improved across both of our operating divisions and consolidated sales were up over 11% compared to the second quarter of 2022. Our teams again did an excellent job, keeping our operating expenses under tight control. Operating expenses although 9% higher than the first quarter declined nearly 30 basis points as a percentage of sales. With this solid cost discipline, we were able to achieve excellent leverage on the higher top line.

我們非常高興的是，在第二季度，我們的團隊再次創下了公司季度銷售額和淨利潤的新紀錄，因為我們預計材料成本通脹較低，並且供應鏈績效的進一步改善有助於增加銷售額，穩定我們的製造節奏並提高運營利潤率。我們兩個運營部門的銷售額均有所改善，綜合銷售額與 2022 年第二季度相比增長了 11% 以上。我們的團隊再次表現出色，嚴格控制了運營費用。運營費用雖然比第一季度高出 9%，但佔銷售額的百分比卻下降了近 30 個基點。憑藉這種嚴格的成本控制，我們能夠在更高的收入上實現卓越的槓桿作用。

The operating margin in the second quarter was 12.3% of sales, an improvement of 200 basis points versus the prior year. Second quarter net interest and currency translation costs were 114% higher than the prior year. Despite these headwinds, net income improved nearly 28% versus the second quarter of 2022. Net income also improved 9% compared to the first quarter of this year that had also established a sales and earnings record at the time. This strong second quarter performance has resulted in a consolidated operating margin slightly above our 12% target for the first six months of 2023.

第二季度營業利潤率為銷售額的 12.3%，比去年同期提高了 200 個基點。第二季度淨利息和貨幣換算成本比去年同期高出 114%。儘管存在這些不利因素，淨利潤仍比 2022 年第二季度增長了近 28%。與今年第一季度相比，淨利潤也增長了 9%，當時也創下了銷售和盈利記錄。第二季度的強勁表現使得綜合營業利潤率略高於我們 2023 年前六個月 12% 的目標。

In aggregates, our markets continued to display strength during the quarter and activity remains strong in most areas. Part sales during the quarter were somewhat lower than we had anticipated due to the impact of the extended drought in many parts of North America and Europe. Some market segments began to come under pressure this quarter due to rising channel inventory and the effect of higher interest rates. Second quarter bookings declined approximately 9% compared to the prior year, although backlog was essentially unchanged compared to the second quarter of 2022. Our governmental markets continued to display significant strength across all geographic markets and product lines. Orders received from municipalities and contractors to serve them improved and inquiry activity remains at historically elevated levels.

總體而言，本季度我們的市場繼續表現強勁，大多數地區的活動依然強勁。由於北美和歐洲許多地區持續乾旱的影響，本季度的零部件銷售額略低於我們的預期。由於渠道庫存上升和利率上升的影響，部分細分市場本季度開始面臨壓力。儘管積壓訂單與2022 年第二季度相比基本沒有變化，但第二季度的預訂量與去年同期相比下降了約9%。我們的政府市場在所有地域市場和產品線中繼續展現出顯著的實力。從市政當局和承包商收到的為其提供服務的訂單有所改善，詢價活動仍處於歷史最高水平。

Our Vegetation Management division produced strong results again in the second quarter. Sales were modestly higher, however, operating income was up 8.5% compared to the second quarter of 2022, reflecting better pricing and improved manufacturing efficiencies. Order bookings of $150 million in the quarter declined 18% from the same period of 2022. As we had anticipated the division's forestry, tree care North American hobby farm and ranch segments experienced softer activity during the quarter. We received some order cancellations, primarily for mulching equipment and other land clearing equipment partly due to the ongoing shortage of tool carriers relative to the mulching heads in dealer inventories and also to the elimination of certain speculative orders. Increasing dealer caution toward rising inventories was evident in the face of rising interest rates. Also as expected, activity slowed in the North American hobby farm and ranch segment as channel inventories reached levels that many dealers are not comfortable with given higher and still rising financing costs. To combat this, we offered our dealers retail incentives during the second quarter. These were successful and helped to reduce inventory in the channel and improved collections in the quarter. Sales of this division's products to governmental customers continued at a brisk pace in North America, Brazil, Europe, United Kingdom and Australia. North American governmental demand for tractor-mounted mowing equipment remained at record levels. Vegetation Management Division backlog at the end of the quarter was $416 million, down 32% from the same period of 2022, in line with our expectations. On balance, we were very pleased that despite these headwinds the Vegetation Management Division produced excellent results again and the division's backlog remains at a historically elevated level.

我們的植被管理部門在第二季度再次取得了強勁的業績。然而，銷售額小幅增長，​​營業收入較 2022 年第二季度增長 8.5%，反映出更好的定價和更高的製造效率。本季度的訂單預訂量為 1.5 億美元，較 2022 年同期下降 18%。正如我們預期的那樣，該部門的林業、樹木護理、北美業餘農場和牧場部門在本季度的活動較為疲軟。我們收到了一些訂單取消，主要是覆蓋設備和其他土地清理設備，部分原因是經銷商庫存中相對於覆蓋頭而言工具架持續短缺，以及某些投機訂單的取消。面對利率上升，經銷商對庫存增加的謹慎態度顯而易見。同樣如預期，北美休閒農場和牧場領域的活動放緩，因為渠道庫存達到了許多經銷商不滿意的水平，因為融資成本較高且仍在上升。為了解決這個問題，我們在第二季度向經銷商提供零售激勵措施。這些措施取得了成功，有助於減少渠道庫存並改善本季度的收貨情況。該部門的產品繼續快速向北美、巴西、歐洲、英國和澳大利亞的政府客戶銷售。北美政府對拖拉機割草設備的需求仍保持在創紀錄的水平。截至本季度末，植被管理部門積壓訂單為 4.16 億美元，較 2022 年同期下降 32%，符合我們的預期。總的來說，我們非常高興的是，儘管存在這些不利因素，植被管理部門再次取得了優異的成績，並且該部門的積壓訂單仍處於歷史最高水平。

Our Industrial Equipment Division also had an excellent second quarter. This division's sales for the quarter were up 27% compared to the same period of 2022. Operating income was up 132% compared to the second quarter of 2022. With improvement in supply chain performance and higher truck chassis receipts driving improved efficiencies, this division produced stronger results with operating income above 10% and again in line with our expectations. The division received new orders valued at $175 million during the second quarter while bookings in this division were flat compared to the prior year, this was lower than expected due to order timing issue. Orders for the division's major product lines improved, most notably excavators and vacuum trucks. Our governmental customers and the specially contractors that serve them continued to invest in upgrading their maintenance fleets and we believe that we're beginning to see incremental benefit and certain product lines from demand stimulated by the Infrastructure Bill. Most of our Industrial Equipment dealers do not carry an appreciable inventory of our products beyond the central product demonstrators and they have therefore not been impacted to the same extent by higher costs associated with rising interest rates. Industrial Equipment division backlog of $475 million, an increase of nearly $130 million or 38% compared to the same period of 2022. The increase was driven primarily by sharply higher orders for its vacuum trucks and excavators, partly offset by slightly lower sales of sweepers and snow removal equipment.

我們的工業設備部門第二季度也表現出色。該部門本季度的銷售額與2022 年同期相比增長了27%。與2022 年第二季度相比，營業收入增長了132%。隨著供應鏈績效的改善和卡車底盤收入的增加推動了效率的提高，該部門生產了營業收入超過 10%，業績更加強勁，再次符合我們的預期。該部門第二季度收到價值 1.75 億美元的新訂單，而該部門的預訂量與去年同期持平，由於訂單時間問題，這一數字低於預期。該部門主要產品線的訂單有所增加，尤其是挖掘機和真空卡車。我們的政府客戶和為他們服務的專門承包商繼續投資升級他們的維護車隊，我們相信我們開始看到基礎設施法案刺激的需求帶來的增量效益和某些產品線。我們的大多數工業設備經銷商在中央產品展示中心之外沒有大量的產品庫存，因此他們沒有受到與利率上升相關的更高成本的相同程度的影響。工業設備部門積壓訂單為4.75 億美元，與2022 年同期相比增加了近1.3 億美元，即38%。這一增長主要是由於其真空卡車和挖掘機訂單大幅增加，部分被清掃機和挖掘機銷售額略有下降所抵消。除雪設備。

Looking ahead, we continue to like how our company is positioned. Our order backlog of $891 million remains very robust and the sequential decline in order backlog in our Vegetation Management division was actually less than we'd anticipated. Recent indicators show the hobby farm and ranch segment stabilizing as farmer sentiment is rising and the AEM recently reported that June US sales of small tractors less than 40-horsepower ticked upward for the first time this year. The strong activity in the governmental markets supported by moderating inflation and improving supply chain performance provides confidence that we will continue to perform well for the balance of this year. We expect that our Vegetation Management Division will continue to perform at a high level, although with more moderate sales growth. Our Industrial Equipment division is expected to continue to expand both sales and margin in the second half of the year as supply chain improvements allow it to accelerate shipments and drive efficiencies higher.

展望未來，我們仍然看好我們公司的定位。我們 8.91 億美元的積壓訂單仍然非常強勁，而且我們的植被管理部門積壓訂單的連續下降實際上低於我們的預期。最近的指標顯示，隨著農民情緒的上升，業餘愛好農場和牧場市場趨於穩定，AEM 最近報告稱，6 月份美國 40 馬力以下小型拖拉機的銷量今年首次出現增長。在通脹放緩和供應鏈績效改善的支持下，政府市場的強勁活動使我們有信心在今年餘下的時間裡繼續表現良好。我們預計我們的植被管理部門將繼續保持高水平的業績，儘管銷售增長較為溫和。我們的工業設備部門預計將在今年下半年繼續擴大銷售額和利潤，因為供應鏈的改善使其能夠加速發貨並提高效率。

Beyond 2023, uncertainty remains. It's not yet clear whether the US economy will achieve a soft landing or a further interest rate hikes will be required. As we've noted today, higher interest rates are now clearly causing dealers to react more cautiously.

2023 年之後，不確定性依然存在。目前尚不清楚美國經濟是否會實現軟著陸，或者是否需要進一步加息。正如我們今天所指出的，利率上升顯然導致經銷商的反應更加謹慎。

Before closing my remarks today, I'd like to thank our customers, dealers, suppliers, our thousands of exceptional employees and our financial stakeholders for their continued support for the company.

在結束今天的發言之前，我要感謝我們的客戶、經銷商、供應商、數千名優秀員工以及我們的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。接線員，請繼續。

Thank you. Ladies and gentlemen we will now begin the question-and-answer session. (Operator Instructions) First question comes from Chris Moore at CJS Securities.

謝謝。女士們、先生們，我們現在開始問答環節。 （操作員指令）第一個問題來自 CJS 證券的 Chris Moore。

Maybe, we will just start with backlog pricing. Backlog was $1 billion or so in April, down to $890 million, pricing look very favorable in April for at least a couple of quarters. How are you looking at this point?

也許，我們會從積壓定價開始。 4 月份的積壓訂單約為 10 億美元，降至 8.9 億美元，4 月份的定價看起來非常有利，至少在幾個季度內如此。您如何看待這一點？

I think the pricing in the backlog is still in great shape, Chris. I'm really not concerned about, but the buildup of inventory in the channel is occurring faster than I had thought it at would end of Q1. And we were getting some requests for help from the dealers to move that channel inventory forward to retail sales. And so we did implement some incentives to achieve that. But that hasn't really directly impacted the margin and the backlog at all. And from an Industrial Equipment division point of view, the margin and backlog remains outstanding. There is really not been any new price pressure on that side of our business at all.

克里斯，我認為積壓訂單中的定價仍然很好。我真的並不擔心，但渠道中庫存的積累速度比我在第一季度末的預期要快。我們收到了經銷商的一些幫助請求，要求將渠道庫存轉移到零售銷售。因此，我們確實實施了一些激勵措施來實現這一目標。但這並沒有真正直接影響利潤和積壓訂單。從工業設備部門的角度來看，利潤率和積壓訂單仍然突出。我們的業務方面確實沒有任何新的價格壓力。

Chris, this is Richard. I think also too we are feeling a little bit of pressure, especially in the Vegetation Management side of the business because they are seeing costs, material costs are starting to drop a little bit. So I think some of the pricing that we're going to have going forward into the new orders that we've taken that division, we will just probably drop-off some surcharges that we have in there, but still maintain our overall net price that we've been charging.

克里斯，這是理查德。我認為我們也感受到了一點壓力，特別是在植被管理方面的業務，因為他們看到成本、材料成本開始略有下降。因此，我認為我們將在該部門的新訂單中採用一些定價，我們可能會取消其中的一些附加費，但仍保持我們的整體淨價我們一直在充電。

And Chris, one more thing I'd add to that it for what it's worth. I mean if you look at where we are from a dealer perspective with higher pricing that's been implemented over the last couple of years, it means effectively, while they have the same amount of space on their balance sheet expressed in dollar terms, it means fewer units that they can afford to have in the channel, as interest rates rise. So that's the caution I'm referring to. The higher prices don't necessarily mean more dollars of space on the balance sheet for many of our dealers, especially as the financing costs go up. So I think that's what we're seeing. And that was really confined to the hobby farm and ranch segment by the way. That's the only segment where we experienced any of that pressure.

克里斯，我還要補充一件事，因為它是有價值的。我的意思是，如果你從經銷商的角度來看我們的處境，過去幾年實施的定價較高，這意味著有效，雖然他們的資產負債表上以美元計算的空間相同，但這意味著更少隨著利率上升，他們可以在渠道中購買的單位。這就是我所說的謹慎。對於我們的許多經銷商來說，較高的價格並不一定意味著資產負債表上有更多的空間，尤其是在融資成本上升的情況下。所以我認為這就是我們所看到的。順便說一句，這實際上僅限於業餘愛好農場和牧場領域。這是我們唯一經歷過這種壓力的部分。

Got it. How are you looking at Morbark at this point in time. With interest rates rising, you talked a little bit about potentially some challenges that could make demand there a little bit less certain, maybe just kind of talk about how you're seeing Morbark now for the rest of the year?

知道了。此時此刻你如何看待莫巴克？隨著利率上升，您談到了一些潛在的挑戰，這些挑戰可能會使那裡的需求變得不那麼確定，也許只是談談您對莫巴克今年剩餘時間的看法？

Morbark's order book is holding up pretty well, Chris. I've been pleased with that along the way. I think that the combination of higher interest rates and a slowing housing market are beginning to have a bite on their business, although it hasn't materialized in our numbers yet. I don't really have any evidence of that. But when housing starts slow and consumption of lumber falls, it means less branches to be shred it to make mulch to make pellets at the end of the day. So the cost of feedstock for pellets rises and that's a negative indicator for that business going forward and we are starting to see a little bit of that. But overall, Morbark is in great shape there, operations are stabilizing there, net margins are actually improving at the moment. So we think we're in a great position. And I don't have any incremental concern with that business compared to where we were at the end of the first quarter, just to be crystal clear.

克里斯，莫巴克的訂單保持得很好。一路走來我對此很滿意。我認為，利率上升和房地產市場放緩的結合正開始對他們的業務產生影響，儘管這一點尚未在我們的數據中體現出來。我確實沒有任何證據證明這一點。但是，當房屋開工緩慢且木材消耗量下降時，這意味著一天結束時需要切碎來製作覆蓋物和顆粒的樹枝會減少。因此，顆粒原料成本上升，這對該業務的未來發展是一個負面指標，我們開始看到一些這種情況。但總體而言，莫巴克在那裡狀況良好，運營穩定，目前淨利潤率實際上正在改善。所以我們認為我們處於有利地位。與第一季度末相比，我對該業務沒有任何增量擔憂，只是需要澄清一下。

And maybe just last one shift gears to operating margins. 12.3% this quarter even though parts weren't quite as good as you thought they are going to be. We're estimating north of 12% again in Q3. What are the puts and takes and trying to gauge the likelihood of Q4 being able to generate operating margins in the 12% range.

也許只有最後一項轉變了營業利潤率。本季度增長 12.3%，儘管零件並不像您想像的那麼好。我們預計第三季度的增長率將再次超過 12%。看跌期權和看跌期權是多少，並嘗試評估第四季度能夠產生 12% 範圍內營業利潤率的可能性。

Well, I think you can go back to the fourth. This is Richard. Sorry, Chris, if you go back to the fourth quarter of last year, we generated I think 11.7% operating income in the fourth quarter. So I think it's definitely doable. I think one thing that happened here in the second quarter, we shipped an extremely high volume of units and I think that mix actually pulled that margin. We were at 27.3% for the first quarter and we are 26.8% here. So I think overall, we're still pleased with the margins that we've got. And as Jeff mentioned the parts were just slightly down than what we had anticipated because of some of the drought that's been going on. But I think third quarter is another good quarter here for our part sales and same thing for our units. We still got plenty of units out there to put out and to kind of finish-off again. I think the fourth quarter will have a little bit of a different split, will have more units going out because parts start to drop-off after about the middle of October.

好吧，我想你可以回到第四個。這是理查德.抱歉，克里斯，如果你回顧一下去年第四季度，我想我們第四季度的營業收入為 11.7%。所以我認為這絕對是可行的。我認為第二季度發生的一件事是，我們出貨量非常大，我認為這種組合實際上拉動了利潤。第一季度我們的比例為 27.3%，本季度為 26.8%。所以我認為總的來說，我們仍然對我們所擁有的利潤感到滿意。正如傑夫提到的，由於持續的干旱，部分產量略低於我們的預期。但我認為第三季度對於我們的零件銷售來說是另一個好季度，對於我們的單位來說也是如此。我們仍然有很多單位可以推出並再次完成。我認為第四季度會有一些不同的劃分，將會有更多的單位出去，因為零件在十月中旬左右開始下降。

Yeah, a couple of more on pieces of the pie on the table for you, Chris. In the third quarter, we start to see the parts activity in snow removal. The pre-season snow removal parts ordering starts to pick-up, so that's potentially a bullish indicator. And as I've said for some time, I think the Industrial Equipment division will continue to gain momentum. You remember, we've had a number of discussions about the margins in Industrial Equipment be inherently lower than what they were in Vegetation Management and I think I have reminded the audience several times that if you go back historically, Industrial Equipment division margins were very much on par with where Vegetation Management has been operating. And I think that gap will continue to close. So I'm confident we can sustain this 12% level for the rest of this year based on what I see right now.

是的，克里斯，還有一些關於你的餡餅的事情。第三季度，我們開始看到除雪方面的部分活動。季前除雪零件訂單開始增加，因此這可能是一個看漲指標。正如我一段時間以來所說的那樣，我認為工業設備部門將繼續獲得發展勢頭。您還記得嗎，我們已經就工業設備的利潤率本質上低於植被管理的利潤率進行了多次討論，我想我已經多次提醒觀眾，如果您回顧歷史，工業設備部門的利潤率非常低。與植被管理運營的地方非常相似。我認為這種差距將繼續縮小。因此，根據我目前的情況，我相信我們能夠在今年剩餘時間內維持 12% 的水平。

The next question comes from Mike Shlisky from D.A. Davidson.

下一個問題來自 D.A. 的 Mike Shlisky。戴維森。

Maybe I will follow-up your comments there, Jeff, maybe ask 2 quick follow-ups from what you just mentioned in your last answer there. I'll start with the kind of the positive feeling on Industrial and maybe less positive on some of the Vegetation. I guess net-net, do you feel like the infrastructure bill and sort of off the grass types of applications are more than offsetting what you're seeing on the farm right now, I mean on the whole, do you feel better this quarter compared to last quarter about how things are kind of looking here.

也許我會跟進你的評論，傑夫，也許會根據你剛剛在上一個答案中提到的內容詢問 2 個快速後續行動。我將從對工業的積極感覺開始，對某些植被的感覺可能不太積極。我想 net-net，您是否覺得基礎設施賬單和一些草外類型的應用程序足以抵消您現在在農場看到的情況，我的意思是，總的來說，您本季度感覺更好嗎？到上個季度了解這裡的情況如何。

I do. Mike, I wouldn't say -- historically, higher than it was a quarter ago, but I still feel very good about our position, Mike and I think Vegetation Management can hold its position. That's what I expect. I still think we'll see modest sales growth out of that division in Q3. I don't expect their margins to erode. We haven't seen the full impact of their pre-season yet, I think we're going to see that here very shortly. The early indicators were very positive for that this year, better than I was expecting to be candid with you. So we think the vegetation Management division will largely hold the line on their current position. And I think Industrial continued to gain pace momentum, expanding margin, all the things we've been talking about for some time. So the other thing to consider here is our snow removal backlog has never been where it is, it's at an all-time record high by far and we've had an excellent early preseason there with regard to truck builds and orders for trucks, and I think we're going to see the same thing in parts of this year. So I'm expecting a pretty good season for our snow removal business and that's bullish for Q3, and especially for Q4. So net-net, yeah, I still think we've got a little bit of running room here to continue to do a little bit better.

我願意。邁克，我不會說——從歷史上看，比一個季度前要高，但我仍然對我們的地位感覺很好，邁克和我認為植被管理可以保持其地位。這就是我所期望的。我仍然認為我們將在第三季度看到該部門的銷售額適度增長。我預計他們的利潤不會受到侵蝕。我們還沒有看到他們季前賽的全部影響，我想我們很快就會在這裡看到。今年的早期指標非常積極，比我坦白對你們的預期要好。因此，我們認為植被管理部門將在很大程度上維持目前的立場。我認為工業繼續保持增長勢頭，擴大利潤率，所有這些都是我們一段時間以來一直在談論的事情。因此，這裡要考慮的另一件事是，我們的除雪積壓從未達到現在的水平，到目前為止，它處於歷史最高紀錄，並且我們在卡車製造和卡車訂單方面度過了出色的早期季前賽，並且我認為今年的部分時間我們會看到同樣的情況。因此，我預計我們的除雪業務將迎來一個相當好的季節，這對第三季度，尤其是第四季度來說是樂觀的。所以，是的，我仍然認為我們還有一點運行空間，可以繼續做得更好。

I want to follow-up on that answer as well real quick on the snow business. I think I saw some very -- perhaps the orders weren't as good as they were in the past quarter. I'm wondering if that's more a function of, you're already full for the year and you want to take a lot more orders or is there some deeper (technical difficulty).

我想盡快跟進這個答案以及雪地業務。我想我看到了一些非常——也許訂單不如上個季度的好。我想知道這是否更多是因為，你今年已經滿了，你想接受更多的訂單，或者是否有一些更深層次的（技術難度）。

No, it's not really terribly complicated, Mike. A year ago, would be to $30 million single order in snow removal in the second quarter. And I've always taught our Board that hey, the second quarter is the doldrums snow removal. It's the off-season, nobody is ordering, nobody is talking about ordering and last year we had an unusually strong second quarter and snow removal and I believe I commented about that at the time. So we had an interesting comparable there. But no, our position in snow removal is very good, strong, bullish. The chassis situation is getting much better at the moment, much better, which means we're able to allocate more chassis to snow removal to support continued growth. So I'm expecting a very good season and I would tell you our snow removal team is very optimistic about where they're positioned right now.

不，這並不是非常複雜，邁克。一年前，第二季度的除雪單筆訂單金額為 3000 萬美元。我一直告訴我們的董事會，嘿，第二季度是低迷的除雪期。現在是淡季，沒有人訂購，沒有人談論訂購，去年我們的第二季度和除雪異常強勁，我相信我當時對此發表了評論。所以我們在那裡進行了一個有趣的比較。但不，我們在除雪方面的地位非常好、強勁、看漲。目前底盤情況正在好轉，好得多，這意味著我們能夠分配更多底盤用於除雪，以支持持續增長。所以我期待一個非常好的季節，我會告訴你我們的除雪團隊對他們現在的位置非常樂觀。

Mike, one other thing to add to Jeff's comments here with some of this loosening that we're talking about here on the chassis, specifically in the Industrial Equipment division, our guys have -- we'd already negotiated a consignment agreement with one of our major suppliers for the freight, I mean for the chassis. We actually also were able to negotiate another consignment and another chassis company. So we've got large increases. They are allocating to us as we go forward here. And having that on consignment is going to be extremely helpful for us from an inventory standpoint because we'll be able to consume the unit, ship it, invoice it and then record the actual receipt of that chassis. So that's a really positive thing for us going forward.

邁克，在傑夫的評論中要補充的另一件事是我們在這裡討論的底盤上的一些鬆動，特別是在工業設備部門，我們的人已經與其中之一談判了一項寄售協議我們主要的貨運供應商，我指的是底盤供應商。實際上，我們還能夠協商另一批貨物和另一家底盤公司。所以我們有大幅增長。當我們在這裡前進時，他們正在分配給我們。從庫存的角度來看，寄售對我們來說非常有幫助，因為我們將能夠消耗該設備、運輸它、開具發票，然後記錄該底盤的實際收貨。所以這對我們前進來說是一件非常積極的事情。

And then turning to your margin commentary. You've got this 5% plus despite some of the headwinds on chassis supply chain and I was kind of wondering if you got, if this is the right time to talk about a new little higher target going forward.

然後轉向你的保證金評論。儘管底盤供應鏈存在一些阻力，但你還是實現了 5% 以上的目標，我想知道現在是否是談論未來更高一點的新目標的合適時機。

Mike, I knew you were going to ask me that. We're still discussing that. But I've said consistently, once we get 3, 4 quarters, rather be 4, consistently operating at 12%, I'll re-establish a new target, and I'm going to stick by that for the moment. I still think the uncertainty, just general uncertainty out in the business environment at the moment doesn't really warrant that today. But having said that, I still think we can sustain this 12% and maybe even widen the gap a little bit more yet. As I said, Industrial is still gaining momentum. And if you go back a few years, Industrial was a 12% margin business all day long. If you go back pre-pandemic. So I'm very confident we're going to get there.

邁克，我知道你會問我這個。我們還在討論這個問題。但我一直說過，一旦我們獲得 3、4 個季度，而不是 4 個季度，持續以 12% 的速度運營，我將重新制定一個新目標，並且暫時堅持這一目標。我仍然認為，目前商業環境中的不確定性，只是普遍的不確定性，並不能真正保證今天的情況。但話雖如此，我仍然認為我們可以維持這個 12%，甚至可能進一步擴大差距。正如我所說，工業仍在增長勢頭。如果你回到幾年前，工業行業整天都是利潤率為 12% 的行業。如果你回到大流行前。所以我非常有信心我們能夠實現這一目標。

And then the other very bullish signal is that our receipts of chassis is rising very, very nicely at the moment. We've actually been receiving chassis in excess of our allocation from at least 2 of the suppliers that we deal with. And so I think that Industrial would be able to ramp up sales a little bit faster in the remainder of the year. And as I said, we're looking forward to a really good snow removal season.

另一個非常樂觀的信號是，我們的底盤收入目前正在非常非常好的增長。實際上，我們從至少 2 家與我們有業務往來的供應商那裡收到的底盤超出了我們的分配範圍。因此，我認為工業將能夠在今年剩餘時間內更快地提高銷售額。正如我所說，我們期待著一個非常好的除雪季節。

And one last thing I want to point out just by way of a reminder. We have heavily restructured our snow removal group to lower its operating cost threshold. So its cost structure and is a much better position than it was a year ago. So that's another thing that I think is going to be accretive from our point of view. So we feel good about where we sit, Mike and continue to and you know me, I'm a continuous improvement guy. As soon as we've been hitting that 12% for about a year, we will set new targets going forward. That's obvious.

我想指出的最後一件事只是為了提醒一下。我們對除雪團隊進行了大規模重組，以降低其運營成本門檻。因此，它的成本結構和地位比一年前要好得多。所以從我們的角度來看，這是另一件我認為會增值的事情。所以我們對我們所處的位置感覺良好，邁克，並且繼續，你知道我，我是一個不斷進步的人。一旦我們達到 12% 大約一年，我們就會設定新的目標。這是顯而易見的。

If I can throw one more question in there. You mentioned the ranching business having a little bit of tough time with drought and so forth hobby farms, ranch and so forth. Do you feel okay about sort of the small part of your business that does large, row crop, the corn, soybean folks (inaudible) et cetera.

如果我可以再提出一個問題。您提到牧場業因乾旱而遇到了一些困難，諸如愛好農場、牧場等。您對您的一小部分從事大中耕作物、玉米、大豆（聽不清）等的業務感到滿意嗎？

Yeah, I do Mike, because I think I commented that the AEM tractor retail numbers for June actually ticked up in the under 40-horsepower category and we haven't seen that for quite some time. And I actually think farmers are starting to see that things might be a little better than they thought even net-net of the drought because of the war in Ukraine unfortunate from a farming point of view is getting worse, not better. So I think that's maybe a bit of a help there. The negative I think we've just seen this bubble in the hobby farm and ranch segment because of the pandemic when lots of people like me went out and bought a few acres and bottom them over to work those acres at the end of the day and I think that was a bubble and probably is not repeatable. It is a great bubble, I mean we've enjoyed that benefit a lot. But that tends to impact the small mowers, the single spindles which are lower margin product relative to our bigger flex wings, which is really our core competence. So I'm not overly concerned about it at the moment, but we are watching it a lot. The main issue in the hobby farm and ranch was the rapid faster build of dealer inventory than what we had anticipated.

是的，邁克，因為我想我評論過 AEM 拖拉機 6 月份的零售數據實際上在 40 馬力以下類別中有所增加，而我們已經有一段時間沒有看到這種情況了。事實上，我認為農民們開始意識到，情況可能比他們想像的要好一些，甚至連乾旱都沒有發生，因為不幸的是，從農業的角度來看，烏克蘭戰爭正在變得更糟，而不是更好。所以我認為這可能會有所幫助。消極的一面是，我認為我們剛剛在業餘愛好農場和牧場領域看到了這種泡沫，因為大流行，當時很多像我這樣的人出去買了幾英畝土地，然後在一天結束時將它們壓平，以便在這些土地上工作，我認為那是一個泡沫，可能是不可重複的。這是一個巨大的泡沫，我的意思是我們非常享受這種好處。但這往往會影響小型割草機，與我們更大的柔性翼相比，單軸產品的利潤率較低，而這確實是我們的核心競爭力。所以我現在並不太關心它，但我們正在密切關注它。業餘愛好農場和牧場的主要問題是經銷商庫存的增長速度比我們預期的要快。

A quarter ago I think I commented we were back to pre-pandemic levels and we felt comfortable with that and that was a true statement then, it's true. What's changed is dealers are just not willing to inventory as much because of the rising interest rates. And I think a lot of OEMs like us are competing for space on the dealers balance sheets at the moment. So that's the dynamic that potentially has changed in that segment. But we did some incentives this quarter as I mentioned that drove our marketing costs up a little bit, which probably won't repeat, at least not the same degree that really helped to clear a lot of that channel inventory out and the replenishment orders have been very positive since then. So I'm pleased with the direction of that.

四分之一前，我想我評論說我們回到了大流行前的水平，我們對此感到滿意，這是一個真實的聲明，這是真的。發生的變化是，由於利率上升，經銷商不願意庫存那麼多。我認為很多像我們這樣的原始設備製造商目前正在爭奪經銷商資產負債表上的空間。這就是該領域可能發生變化的動態。但正如我提到的，我們本季度做了一些激勵措施，這使我們的營銷成本上升了一點，這種情況可能不會重複，至少不會達到真正幫助清理大量渠道庫存的程度，而且補貨訂單也增加了。從那時起就非常積極。所以我對這個方向很滿意。

Mike, we also in the ag space they introduced a pre-season program that started roughly in the middle early part maybe middle of June and ran through the end of July and we were really excellent results out of that and very pleased with the new orders that we were able to get out of that. So that's going to give some additional runway for the ag space moving for the balance of this year.

邁克，我們也在農業領域推出了一項季前計劃，該計劃大約在六月中旬開始，一直持續到七月底，我們從中得到了非常出色的結果，並對新訂單非常滿意我們能夠擺脫困境。因此，這將為今年剩餘時間的農業空間提供一些額外的跑道。

The next question comes from Tim Moore at EF Hutton.

下一個問題來自 EF Hutton 的 Tim Moore。

Congratulations on the continued strong sales growth. I mean, it makes sense that the industrial orders have been up so strong past year to easily offset the Vegetation orders. I mean if you look at your backlog and it's double what it was the month before COVID start. So it's still pretty amazing. I have a multi-part question that can probably count is my complete time, Jeff, if you want to take some time on this. I know somebody just beat me to it about getting you to raise your 12% operating margin after I guess 11.9 last quarter and 12.3% this quarter, but I'm wondering, just maybe if you can talk more high level about the continued overall margin expansion drivers if the economy remains pretty steady. Specifically, I'm curious about the improved fixed cost absorption. It seems like the supply chain disruptions are starting to abate, they're not there yet. They are 2/3 of the way back to normal today, obviously the operating leverage is going to help Industrial with growth and it seems like you could get back to the 12% op margin there looking out a few years ago on the Industrial side.

祝賀銷售持續強勁增長。我的意思是，去年工業訂單增長如此強勁，輕鬆抵消了植被訂單，這是有道理的。我的意思是，如果你看看你的積壓訂單，就會發現它是新冠疫情爆發前一個月的兩倍。所以它還是相當神奇的。我有一個由多部分組成的問題，如果你想花一些時間來解決這個問題，傑夫，我的完整時間可能可以算作。我知道有人比我先一步讓你提高 12% 的營業利潤率，我猜上個季度是 11.9%，本季度是 12.3%，但我想知道，也許你能更高層地談談持續的整體利潤率如果經濟保持相當穩定的話，擴張動力。具體來說，我對固定成本吸收的改善感到好奇。供應鏈中斷似乎開始減弱，但尚未出現。今天，它們已恢復正常水平的 2/3，顯然，運營槓桿將有助於工業增長，而且從工業方面來看，您似乎可以回到幾年前 12% 的運營利潤率。

And then if you want to just talk more about the potential for facility consolidations like you already did in snow, I imagine there is an opportunity in the Northwest.

然後，如果您想更多地談論設施整合的潛力，就像您在雪地裡所做的那樣，我想西北地區有機會。

And then lastly, I think a topic that's helpful for me as investors, is your plan for kind of in-country manufacturing in Europe to minimize transportation cost in the US and trigger more sales growth there. I think you were working on a plan for that. Just curious if there's any in-country manufacturing Europe update.

最後，我認為對我作為投資者有幫助的一個話題是您在歐洲進行國內製造的計劃，以最大限度地減少美國的運輸成本並引發更多的銷售增長。我認為你正在為此制定計劃。只是好奇歐洲國內製造是否有任何更新。

In terms of the margin expansion, I am confident that Industrial will get to that 12% threshold that you brought that up. So I think we'll definitely hit that. Can't tell you what month, but it will happen.

就利潤率擴張而言，我相信工業將達到您提出的 12% 的門檻。所以我認為我們一定會實現這一點。無法告訴你哪個月，但它會發生。

In terms of our strategic initiatives, we still have plant closures in the pipeline that we're working and we continue to sell-off facilities and book gains on those along the way that we don't need any longer. So those are all positives. What's slowing that a little bit is labor. When you consolidate two facilities, you've got to add workforce in one and those two facilities are 500 miles apart, people don't move 500 miles for a job and direct manufacturing typically. So we need a little bit of help from the labor market to get back on pace in terms of the consolidation. But having said that, and we discussed that with our Board, there's still lots of potential there. Lots of opportunity there relatively near-term from our point of view. So we still have plenty in our pipeline to keep driving margins higher and to continue to refine our cost structure going forward. So that hasn't changed at all.

就我們的戰略舉措而言，我們仍在計劃關閉一些工廠，我們將繼續出售工廠，並從我們不再需要的工廠中獲得收益。所以這些都是積極的。稍微放緩的是勞動力。當你整合兩個工廠時，你必須在其中一個工廠增加勞動力，而這兩個工廠相距 500 英里，人們通常不會為了工作和直接製造而搬家 500 英里。因此，我們需要勞動力市場的一點幫助才能在整合方面恢復步伐。但話雖如此，而且我們與董事會討論過，那裡仍然有很大的潛力。從我們的角度來看，短期內存在很多機會。因此，我們仍有足夠的資源來繼續提高利潤率並繼續完善我們未來的成本結構。所以這根本沒有改變。

Having said that, we are short of manufacturing capacity in Europe to the second part of your question. And we've just been planning and actually discussing with the Board. Some significant capital expenditures in both our French operations and our UK operations that will add capacity there to allow us to accelerate the make in market initiative that we've talked about a few times. So I was very pleased with the support, we've received on those discussions and we anticipate that kicking off very shortly. So we're continuing to do our thing and that's just what I can say.

話雖如此，對於你問題的第二部分，我們在歐洲缺乏製造能力。我們剛剛與董事會進行了規劃並進行了實際討論。我們的法國業務和英國業務的一些重大資本支出將增加那裡的產能，使我們能夠加快我們已經討論過幾次的市場製造計劃。因此，我對我們在這些討論中收到的支持感到非常滿意，我們預計很快就會開始。所以我們會繼續做我們的事情，這就是我能說的。

Adding to that, Chip, if I could is as Jeff mentioned, the capital expenditures. And when you look at our cash on our balance sheet, 99% of that is international. We cannot bring that back with the exchange rates that we were and we've mentioned this before that we sent them over to. So we've actually pivoted here and what we're going to try to do is do some of these capital expenditures that are going to be pretty significant as we move forward both in France and in the UK. And by doing so, it accomplishes two things; one, they still have opportunities to increase volume there, which is great, but the second thing goes back to your last question, which is the in-country, the manufacturing, which we call make in market. We're going to start pushing that forward here because part of these capital expenditures that we're putting in place is to increase that make-in-market. All of those locations that we're going to do these CapEx is to have the right equipment in place for us to be able to do this.

除此之外，奇普，如果可以的話，正如傑夫提到的，資本支出。當你查看我們資產負債表上的現金時，你會發現其中 99% 都是國際現金。我們無法以原來的匯率將其恢復，我們之前已經提到過這一點，我們之前將其發送到那裡。因此，我們實際上已經轉向這裡，我們將嘗試做的就是進行一些資本支出，隨著我們在法國和英國的進展，這些資本支出將非常重要。通過這樣做，它完成了兩件事：第一，他們仍然有機會增加那裡的銷量，這很好，但第二件事又回到了你的最後一個問題，即國內製造，我們稱之為市場製造。我們將開始在這裡推動這一進程，因為我們投入的部分資本支出是為了增加市場製造。我們要做這些資本支出的所有地點都是為了擁有合適的設備，以便我們能夠做到這一點。

And that's still bidirectional by the way. We're just starting to introduce. Our Timberwolf timber is made in the UK into the US market. So these flows of make-in-market are going in both directions.

順便說一句，這仍然是雙向的。我們才剛剛開始介紹。我們的 Timberwolf 木材在英國製造並銷往美國市場。因此，這些市場製造的流動是雙向的。

(Operator Instructions) Next question comes from Felix Boeschen at Raymond James.

（操作員說明）下一個問題來自 Raymond James 的 Felix Boeschen。

I appreciate the comments on getting Industrial back to 12% margins over-time. I guess what I'm curious about, you mentioned chassis flow improving quite a bit on the call, but could you maybe comment on the magnitude of cost inefficiencies that are still running in the P&L today in that business line. What I'm trying to figure out is if those were to normalize from here, could you get to that 12% margin target within that business on the revenue base today or is it really about further volume throughput output from here.

我很欣賞關於讓工業利潤率隨著時間的推移恢復到 12% 的評論。我想我好奇的是，您在電話會議上提到底盤流量有了很大改善，但是您能否評論一下該業務線今天仍在損益表中仍然存在的成本效率低下的程度。我想弄清楚的是，如果這些從這裡開始正常化，您能否在今天的收入基礎上達到該業務中 12% 的利潤率目標，或者這實際上是關於這裡進一步的產量輸出。

Yes, we definitely feel like we can get there would hurt us probably a good point to a point and a half is the inefficiencies in the under-absorption in there. As I mentioned in my comments there that in both several couple of different locations, we had several $3 million or $4 million worth of sales that we were not able to ship out because we were still missing a few component parts to complete. If we can just get this more of a continual, it is improving. We just need this on a regular consistent basis. The net under absorption drops and all of a sudden your margin start shooting up closer to that 11.5%. So we can definitely get there, there is room for us to do this.

是的，我們確實覺得我們能到達那裡會傷害我們，可能一個好點到一個半點是那裡吸收不足的低效率。正如我在評論中提到的，在幾個不同的地點，我們有幾個價值 300 萬美元或 400 萬美元的銷售額，但我們無法發貨，因為我們仍然缺少一些零部件需要完成。如果我們能夠讓這種情況更加持續，那麼它就會有所改善。我們只需要定期、一致地做到這一點。淨吸收率下降，突然間您的利潤率開始飆升，接近 11.5%。所以我們絕對可以做到這一點，我們有空間做到這一點。

I think maybe even a little more explicit in answering that. We don't need topline to get to 12% in industrial. Just to be crystal clear. Don't need it.

我認為回答這個問題可能會更明確一些。我們不需要通過營收來達到工業領域的 12%。只是為了說得一清二楚。不需要它。

And then I know you've made some operational changes in your snow removal business and I think the idea is really to help drive profit per unit output. What I'm curious about is how much of that improvement is already in the numbers today versus what you think might still be on the comment to the back half in coming years.

然後我知道您在除雪業務中進行了一些運營變革，我認為這個想法確實有助於提高單位產量的利潤。我很好奇的是，今天的數字中已經有多少改進，而你認為​​未來幾年後半部分的評論中可能仍然存在這種改進。

It's definitely improved, because in the past we've had some issues on some warranty items in this snow, but doing this consolidation and taking some of the cost out, it definitely is at least 150% improvement where we were last year. You also have to remember Felix in the second quarter as Jeff mentioned earlier, we're not going to have a lot of opportunity to push that 10% in the snow business in the second quarter, just because it's summer time. But as we move forward into the third quarter and the fourth quarter, it's definitely on radar for us to be able to do that and with the backlog that we have and the efficiencies that we're at, it's definitely doable number as we go forward and the division is doing great and that location in that snow removal group, so.

它肯定有所改善，因為過去我們在這場雪中的某些保修項目上遇到了一些問題，但通過進行整合併消除一些成本，它肯定比去年至少提高了 150%。你還必須記住第二季度的菲利克斯，正如傑夫之前提到的，我們不會有很多機會在第二季度推動雪業務的 10%，僅僅因為現在是夏季。但隨著我們進入第三季度和第四季度，我們肯定會考慮能夠做到這一點，並且憑藉我們現有的積壓訂單和我們目前的效率，隨著我們的前進，這絕對是可行的數字該部門在除雪組中的位置做得很好，所以。

And in terms of operating margins, Felix snow removal is still one of our lower businesses in that regard with plenty of room to grow and to get to be up to the level of its peers inside the company. I think we've done the right things with the fixed cost structure and the manpower and the organizational structure of that business, it's very lean now, it's one team working hand-in-hand to gather the energy and the team is just awesome. And of course, they've got this huge backlog a really nice price truck builds in the background. So now that we're able to allocate more trucks to them, they can accelerate the deployment of that backlog into sales. So I'm looking forward to really nice seasonality snow removal for the remainder of this year and really even into the first quarter next.

就營業利潤率而言，菲利克斯除雪仍然是我們在這方面較低的業務之一，有很大的增長空間並達到公司內部同行的水平。我認為我們在固定成本結構、人力和組織結構方面做了正確的事情，現在非常精簡，這是一個團隊攜手合作，聚集能量，團隊非常棒。當然，他們有大量的積壓訂單，在後台建造了一輛價格非常優惠的卡車。因此，既然我們能夠向他們分配更多卡車，他們就可以加速將積壓的訂單部署到銷售中。因此，我期待著今年剩餘時間甚至明年第一季度的季節性除雪效果。

Got it. And then just my last one, but again with the chassis flow improving the way that it is, could you talk about the size of your rental fleet today versus maybe how you think it might shakeout in coming years. I'm just curious if it's good enough to the point where you can sort of reignite growth in that business.

知道了。然後是我的最後一個，但隨著底盤流程的改善，您能否談談今天租賃車隊的規模以及您認為未來幾年可能會發生怎樣的變化。我只是好奇它是否足夠好以至於可以重新點燃該業務的增長。

Yeah, I'll tackle that for you. I was going to bring that up anyway. So I'm glad you prompted the comment. Our vacuum truck fleet has been stable and I don't want them to just close number that's obviously commercially sensitive information, but it's been stable, it's been flat. We haven't really been able to add trucks to the fleet the way we would like. And obviously when trucks move out of that fleet in contract configuration, that's very nice margin for us, a nice margin business for us and our rental fleet utilization is already so high, we really can't push it any higher. So now with more chassis coming in, we will definitely be able to add trucks into that rental fleets and we think we can hold the utilization and that will drive higher profitability in Industrial. That's another profit improvement level.

是的，我會為你解決這個問題。無論如何我都想提出這個問題。所以我很高興你提出了這個評論。我們的真空卡車車隊一直很穩定，我不希望他們只是關閉顯然是商業敏感信息的數字，但它一直很穩定，一直持平。我們還沒有真正能夠按照我們想要的方式將卡車添加到車隊中。顯然，當卡車以合同配置從該車隊中移出時，這對我們來說是非常好的利潤，對我們來說是一個不錯的利潤業務，而且我們的租賃車隊利用率已經如此之高，我們真的不能再把它推得更高了。因此，現在隨著更多底盤的加入，我們肯定能夠將卡車添加到租賃車隊中，我們認為我們可以保持利用率，這將推動工業領域更高的盈利能力。這是另一個利潤改善水平。

Thank you. At this time there are no further questions. I will turn the call back over to management for closing comments.

謝謝。目前沒有進一步的問題。我會將電話轉回給管理層以徵求結束意見。

Thank you for joining us today. We look forward to speaking with you on our third quarter conference call in November. Thank you very much.

感謝您今天加入我們。我們期待在 11 月份的第三季度電話會議上與您交談。非常感謝。

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and we ask that you please disconnect your lines.

女士們、先生們，今天的電話會議到此結束。我們感謝您的參與，並請您斷開線路。