APi Group Corp (APG) 2024 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the APA Group's Second Quarter 2024 financial results conference call. All participants are now in a listen only mode until the question and answer session. Please note that this call is being recorded. I will be standing by should you need any assistance. I will now turn the call over to Adam. He, Vice President of Investor Relations at APi Group. Please go ahead.

早安，女士們、先生們，歡迎參加 APA 集團 2024 年第二季財務業績電話會議。所有參與者現在都處於只聽模式，直到問答環節。請注意，此通話正在錄音。如果您需要任何幫助，我將隨時待命。我現在會把電話轉給亞當。他是APi集團投資者關係副總裁。請繼續。

Thank you. Good morning, everyone, and thank you for joining our second quarter 2024 earnings conference call. Joining me on the call today are Russ Becker, our President and CEO, Kevin Crum, our Executive Vice President and Chief Financial Officer, and Sir Martin Franklin and Jim Lillie, our Board co-chairs.

謝謝。大家早安，感謝您參加我們的 2024 年第二季財報電話會議。今天與我一起參加電話會議的有我們的總裁兼執行長 Russ Becker、我們的執行副總裁兼財務長 Kevin Crum、以及我們的董事會聯席主席 Martin Franklin 爵士和 Jim Lillie。

Before we begin, I would like to remind you that certain statements in the company's earnings press release announcement and on this call are forward-looking statements, which are based on expectations, intentions and projections regarding the Company's future performance, anticipated events or trends and other matters that are not historical facts.

在我們開始之前，我想提醒您，公司收益新聞稿公告和本次電話會議中的某些陳述均為前瞻性陳述，這些陳述基於對公司未來業績、預期事件或趨勢的預期、意圖和預測，以及其他不屬於歷史事實的事項。

These statements are not a guarantee of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements in our press release and filings with the SEC we detail material risks that may cause our future results to differ from our expectations.

這些陳述不是對未來業績的保證，並受到已知和未知的風險、不確定性和其他因素的影響，這些因素可能導致實際結果與我們的新聞稿和向美國證券交易委員會提交的文件中此類前瞻性陳述明示或暗示的結果存在重大差異我們詳細說明了可能導致我們未來結果與預期不同的重大風險。

Our statements are as of today, August first, and we undertake no obligation to update any forward-looking statements we may make, except as required by law.

我們的聲明截至今天（8 月 1 日），我們沒有義務更新我們可能做出的任何前瞻性聲明，除非法律要求。

As a reminder, we have posted a presentation detailing our second quarter financial performance on the Investor Relations page of our website. Our comments today will also include non-GAAP financial measure measures and other operating key metrics. The reconciliation of and other information regarding these items can be found in our press release and our presentation. Now my pleasure to turn the call over to Russ.

謹此提醒，我們已在網站的投資者關係頁面上發布了詳細介紹第二季度財務業績的簡報。我們今天的評論還將包括非公認會計準則財務衡量指標和其他營運關鍵指標。有關這些項目的核對和其他資訊可以在我們的新聞稿和簡報中找到。現在我很高興將電話轉給拉斯。

Thank you, and good morning, everyone. Thank you for taking the time to join our call this morning. Before getting into the results. I wanted to thank our 29,000 leaders for their hard work and dedication to APA. The safety, health, and well-being of each of our leaders remains our number one value. We continue to prioritize investing in the men and women in the field as human beings and aim to provide each of them with training, leadership, development and advancement opportunities at APA, our field leaders have careers not just a job.

謝謝大家，大家早安。感謝您今天早上抽出時間參加我們的電話會議。在進入結果之前。我要感謝我們 29,000 名領導者的辛勤工作和對 APA 的奉獻。我們每位領導人的安全、健康和福祉仍然是我們的首要價值觀。我們繼續優先投資於該領域的男性和女性作為人類，並旨在為他們每個人提供 APA 的培訓、領導力、發展和晉昇機會，我們的領域領導者擁有職業而不僅僅是一份工作。

We prioritize this investment because we recognize that our success happens only when our branches in field leaders are successful. This commitment is one of the foundational principles we believe will continue to enhance shareholder value.

我們優先考慮這項投資，因為我們認識到，只有當我們的領域領導者分支機構取得成功時，我們才會成功。這項承諾是我們相信將繼續提高股東價值的基本原則之一。

We remain committed to our long term 1360 80 value-creation targets. We believe these will lead to outsized investor returns through 2025 and beyond. As a reminder, these include the following adjusted EBITDA margin of 13% or more in 2025. Long-term organic revenue growth above the industry average long-term revenues of 60% from inspection, service and monitoring and long-term adjusted free cash flow conversion of 80%, as I mentioned, often with both and both investors and our team.

我們仍然致力於實現 1360 80 價值創造的長期目標。我們相信，這些將在 2025 年及以後為投資者帶來巨額回報。提醒一下，其中包括 2025 年調整後 EBITDA 利潤率為 13% 或以上。正如我所提到的，長期有機收入成長高於行業平均水平，來自檢查、服務和監控的長期收入為60%，長期調整後的自由現金流轉換為80%，通常與投資者和我們的團隊共同實現。

We are relentlessly focused on driving this strategy with a specific focus of achieving 13% plus adjusted EBITDA margins by 2025, which we remain confident in achieving to be clear, we view 13% as our next checkpoint will not the ending destination in a long-term margin expansion journey as we move closer to the achievement of this goal, we expect to plan an investor update on our new targets and opportunities in early 2025.

我們堅持不懈地致力於推動這項策略，具體目標是到 2025 年實現 13% 加上調整後的 EBITDA 利潤率，我們仍然有信心實現這一目標。我們預計將在2025 年初向投資者通報我們的新目標和機會。

During today's call, I will begin my remarks by briefly commenting on our second quarter results as well as our continued progress towards delivering on our stated strategic goals in a macro environment that continues to be volatile. I will then touch on our recent M&A activity and our focus on long-term organic growth.

在今天的電話會議上，我將首先簡要評論我們第二季度的業績，以及我們在持續波動的宏觀環境中實現既定戰略目標的持續進展。然後我將談談我們最近的併購活動以及我們對長期有機成長的關注。

Before turning the call over to Kevin, who will walk through our financial results and guidance in more detail. Turning to the second quarter, APA delivered strong results by executing our strategy, focused on margin expansion and free cash flow generation. We achieved record second quarter adjusted EBITDA dollars and margin as well as record adjusted free cash flow dollars and conversion in an evolving macro environment.

在將電話轉給凱文之前，他將更詳細地介紹我們的財務表現和指導。談到第二季度，APA 透過執行我們的策略，專注於利潤擴張和自由現金流生成，取得了強勁的業績。我們在不斷變化的宏觀環境中實現了第二季度調整後 EBITDA 美元和利潤率的創紀錄水平，以及調整後自由現金流美元和轉換率的創紀錄水平。

Net revenues declined by approximately 2% in the quarter compared to 7% plus growth in the prior year period. As we've discussed over the past year, we have been strategically slowing revenue growth to focus on more profitable projects.

本季淨收入下降約 2%，而去年同期淨收入成長 7% 以上。正如我們在過去一年中討論的那樣，我們一直在策略性地減緩收入成長，以專注於利潤更高的項目。

The team has done an excellent job with this initiative, particularly in our international HVAC and specialty services businesses. This quarter, a combination of federal funding, funding, permitting and some customer delays contributed to the reduction in project revenue.

團隊在這項舉措方面做得非常出色，特別是在我們的國際暖通空調和專業服務業務方面。本季度，聯邦資金、資金、許可和一些客戶延遲等因素共同導致了專案收入的減少。

We believe these delays are temporary timing shifts, not cancellations, and we expect the impacted revenue to still contribute to our full year 2024 revenue in a meaningful way with nearly all of the planned revenue slowing and project delays behind us, our teams are focused on healthy organic growth in the back half of this year and in 2025, I've said before that backlog would not be a great indicator of the momentum in our business while we double down on our disciplined customer and project selection initiatives.

我們認為這些延遲是暫時的時間變化，而不是取消，我們預計受影響的收入仍將以有意義的方式為我們2024 年全年收入做出貢獻，幾乎所有計劃收入放緩和項目延遲都已過去，我們的團隊專注於今年下半年和 2025 年的健康有機增長，我之前說過，在我們加倍嚴格遵守客戶和項目選擇計劃的同時，積壓訂單並不能很好地表明我們業務的發展勢頭。

And while we don't plan to provide backlog commentary on a regular basis. I wanted to share that at the end of the second quarter, our backlog was up 500 million versus the end of the year and much healthier from an expected profitability perspective. The work the team has done in transforming our backlog and reaccelerating its growth gives me confidence in the direction we are heading as a business.

雖然我們不打算定期提供積壓評論。我想分享的是，到第二季末，我們的積壓訂單比年底增加了 5 億，從預期獲利能力的角度來看，情況要健康得多。團隊在轉變我們的積壓工作並重新加速其成長方面所做的工作讓我對我們作為一家企業的發展方向充滿信心。

I'm pleased to report that US Life Safety once again led the way from a growth perspective, where we had a record quarter of inspection revenue driven by continued double-digit organic growth, which we have achieved for 16 straight quarters. This is critical as these inspection revenues drive recurring, higher-margin service revenues and help APA make progress towards our 60% target for inspection service and monitoring revenues.

我很高興地向大家報告，從成長的角度來看，美國生命安全部門再次處於領先地位，在持續兩位數的有機增長的推動下，我們的檢查收入創下了創紀錄的季度記錄，我們已經連續16 個季度實現了這一增長。這一點至關重要，因為這些檢查收入推動了經常性、利潤率更高的服務收入，並幫助 APA 朝著我們 60% 的檢查服務和監控收入目標取得進展。

In line with our strategic initiatives, we continued to see strong year-over-year improvements in adjusted gross margin and adjusted EBITDA margin in the second quarter of 340 and 190 basis points, respectively. I am pleased with the leadership team's ongoing commitment to driving gross margin improvements through the following pricing, improved inspection service and monitoring revenue mix, disciplined customer and project selection, shelf value capture procurement systems and scale, accretive M&A, and selective business priorities. And as I like to say, we can always just better.

根據我們的策略舉措，我們繼續看到第二季調整後毛利率和調整後 EBITDA 利潤率較去年同期強勁改善，分別為 340 和 190 個基點。我對領導團隊持續致力於透過以下定價、改進的檢驗服務和監控收入組合、嚴格的客戶和項目選擇、貨架價值捕獲採購系統和規模、增值併購以及選擇性業務優先事項來推動毛利率提高感到高興。正如我想說的，我們總是可以做得更好。

International Life Safety business continues to show steady progress with another quarter of organic growth, which that business has achieved in each quarter since the acquisition even as we challenged the team to be intentional about targeting only work that is additive to achieving our 2025 adjusted EBITDA margin target.

國際生命安全業務繼續呈現穩步進展，又一個季度實現有機增長，自收購以來，該業務每個季度都實現了有機增長，儘管我們要求團隊有意只針對有助於實現2025 年調整後EBITDA 利潤率的工作目標。

Additionally, the CAD125 million of value capture plan, which is another key contributor to our 13% or more target remains on track. During the second quarter, we crossed the 50% mark in terms of realizing the savings from our $125 million value capture target and have taken actions associated with approximately $90 million of run rate savings, APA's consistently strong financial results speak to the direction we are heading in and the strength of the company's recurring revenue services focused business model as well as the discipline of the organization and its leadership team.

此外，1.25 億加元的價值獲取計劃是我們 13% 或更多目標的另一個關鍵貢獻者，該計劃仍在按計劃進行。在第二季度，我們在實現1.25 億美元價值獲取目標的節省方面突破了50% 大關，並採取了與運行率節省約9,000 萬美元相關的行動，APA 一貫強勁的財務業績表明了我們前進的方向公司以經常性收入服務為中心的業務模式的實力以及組織及其領導團隊的紀律。

Moving on to M&A, we closed on the acquisition of elevated facility services in early June, and it has been rewarding welcoming the team to APA. We remain excited for the opportunity to build onto the elevated platform and become a leader in the elevator and escalator service market.

接下來是併購，我們在 6 月初完成了高級設施服務的收購，歡迎團隊加入 APA 是值得的。我們仍然對有機會在高架平台上進行建造並成為電梯和自動扶梯服務市場的領導者感到興奮。

In addition to elevated, our bolt-on M&A strategy continues to progress through the second quarter, we have closed six bolt-on acquisitions with an average EBITDA multiple of approximately five times. The markets we operate in are highly fragmented, and the team remains focused on identifying the most attractive opportunities within our robust M&A pipeline.

除了提高之外，我們的補強併購策略在第二季度繼續取得進展，我們已經完成了六項補強收購，平均 EBITDA 倍數約為五倍。我們經營的市場高度分散，團隊仍然專注於在我們強大的併購管道中尋找最具吸引力的機會。

Our free cash flow generation and EBITDA growth in the first half of the year gives us confidence in our ability to reduce net leverage below our target of approximately 2.5 times by the end of the year.

上半年我們的自由現金流產生和 EBITDA 成長使我們對到年底將淨槓桿率降低至約 2.5 倍目標以下的能力充滿信心。

While we continued to execute our M&A strategy with expected adjusted free cash flow of over 600 million in 2024. We remain committed to our capital allocation priorities, which remain as follows deleveraging to our net leverage target of 2.5 times adjusted EBITDA, growing our business through executing our M&A strategy and finally, repurchasing our shares as an update and reflective of the share repurchase activity undertaken in the first six months of 2024 API.

同時我們繼續執行併購策略，預計2024年調整後自由現金流將超過6億。我們仍然致力於我們的資本配置優先事項，具體如下：去槓桿化，達到調整後EBITDA 2.5 倍的淨槓桿目標，透過執行併購策略來發展我們的業務，最後，回購我們的股票，作為更新併反映所進行的股票回購活動2024 年 API 的前六個月。

Has approximately $400 million remaining under our share repurchase authorization of the 1 billion authorization from February of 2024 in summary, while we remain focused on building on the execution of our strategy in the back half of the year, I am proud of our team and how we delivered on our commitments and produced record EBITDA and free cash flow so far in 2024.

總而言之，從 2024 年 2 月起，我們的股票回購授權還剩約 4 億美元，授權金額為 10 億美元，雖然我們仍然專注於下半年策略的執行，但我為我們的團隊以及如何我們兌現了我們的承諾，並在2024 年實現了創紀錄的EBITDA 和自由現金流。

I would now like to hand the call over to Kevin to discuss our financial results and guidance in more detail. Kevin?

我現在想將電話轉交給凱文，更詳細地討論我們的財務表現和指導。凱文？

Thanks, Ross. Good morning. Everyone. reported revenues for the three months ended June 30th, 2024, or 1.73 billion, a decline of 2.3% from 1.77 billion in the prior year period. Organic decline of 3.1% against a comparison of 7.6% growth in Q2 2023 was driven by disciplined customer project selection and project delays in our specialty segment.

謝謝，羅斯。早安.每個人。截至 2024 年 6 月 30 日的三個月營收為 17.3 億美元，較去年同期的 17.7 億美元下降 2.3%。與 2023 年第二季 7.6% 的成長相比，有機下降 3.1%，這是由於嚴格的客戶專案選擇和我們專業領域的專案延遲造成的。

The result of this was a 9% organic decline in project revenues. This was partially offset by organic growth of 2.4% and services revenue. Adjusted gross margin for the three months ended June 30, 2024, grew to 31.7%, representing a 340 basis point increase compared to the prior year period, driven by price increases, outsized growth in higher-margin services revenue as well as a significant margin expansion in both service and project revenues across both segments.

其結果是專案收入有機下降 9%。這被 2.4% 的有機成長和服務收入部分抵消。截至 2024 年 6 月 30 日止三個月的調整後毛利率增長至 31.7%，較上年同期增長 340 個基點，主要受到價格上漲、高利潤服務收入大幅增長以及顯著利潤率的推動兩個部門的服務和項目收入均有所擴大。

Adjusted EBITDA increased by 13.8% for the three months ended June 30, 2024, with adjusted EBITDA margin coming in at 13.4%, representing a 190 basis point increase compared to the prior year period, primarily due to the increase in adjusted gross margins, partially offset by lower fixed cost absorption driven by lower revenues.

截至 2024 年 6 月 30 日止三個月，調整後 EBITDA 成長 13.8%，調整後 EBITDA 利潤率為 13.4%，較上年同期成長 190 個基點，主要是由於調整後毛利率增加，部分原因是收入下降導致的固定成本吸收下降所抵銷。

Adjusted diluted earnings per share for the second quarter was $0.49 per share, representing an $0.08 per share or 20% increase compared to the prior year period. The increase was driven by strong margin expansion in safety services and decreased interest expense, partially offset by higher adjusted diluted weighted average shares outstanding.

第二季調整後稀釋每股收益為每股 0.49 美元，較去年同期成長 0.08 美元，成長 20%。這一增長是由安全服務利潤率強勁擴張和利息支出減少所推動的，但部分被調整後稀釋加權平均流通股的增加所抵消。

I will now discuss our results in more detail Facility Services Safety Services reported revenues for the three months ended June 30th, 2024, increased by 4.4% to 1.28 billion compared to $1.23 billion in the prior year period. Organic growth of 1.5% compared to organic growth of 7.3% in Q2 2023 was driven by strength in US Life Safety, where we once again posted double digit inspection growth and 8% organic growth in inspection service and monitoring revenues.

我現在將更詳細地討論我們的結果設施服務安全服務報告的截至 2024 年 6 月 30 日的三個月的收入與去年同期的 12.3 億美元相比增長了 4.4%，達到 12.8 億美元。與2023 年第二季7.3% 的有機成長相比，有機成長1.5% 是由美國生命安全業務的強勁推動的，我們再次公佈了兩位數的檢查增長以及檢查服務和監控收入的8% 有機增長。

This was partially offset by a double digit decline in Asia-Pac revenues driven by disciplined customer and project selection and by planned customer attrition in our international business. Adjusted gross margin for the three months ended June 30, 2024 was 35.3%, representing a 290 basis point increase compared to the prior year period, driven by price increases, improved business mix of inspection, service and monitoring revenue, as well as significant margin expansion in both service and project revenues.

這被亞太地區收入兩位數的下降所部分抵消，這是由於嚴格的客戶和專案選擇以及我們國際業務中的計劃客戶流失所致。截至2024年6月30日止三個月的調整後毛利率為35.3%，較上年同期增長290個基點，主要受到價格上漲、檢查、服務和監控收入業務組合改善以及顯著利潤率的推動服務和項目收入的擴大。

Adjusted EBITDA increased by 26.4% for the three months ended June 30, 2024, and adjusted EBITDA margin was 15.7%, representing a 270 basis point increase compared to the prior year period. This was primarily due to the increase in adjusted gross margins and was partially offset by headwinds from operating costs, which grew faster than revenues I will now discuss our results in more detail for specialty services.

截至 2024 年 6 月 30 日止三個月，調整後 EBITDA 成長 26.4%，調整後 EBITDA 利潤率為 15.7%，較上年同期成長 270 個基點。這主要是由於調整後毛利率的增加，並部分被營運成本的不利因素所抵消，營運成本的成長速度快於收入，我現在將更詳細地討論我們在專業服務方面的結果。

Specialty Services reported revenues for the three months ended June 30, 2024, decreased by 18.4% to 453 million compared to $555 million in the prior year period. Organic revenue declined 15.3% against a comparison of 7.7% growth in Q2 2023, driven by a 21% decline in project revenues due to our ongoing efforts regarding disciplined project selection as well as a combination of federal funding delays, permitting delays and customer delays.

專業服務報告稱，截至 2024 年 6 月 30 日的三個月收入下降 18.4%，至 4.53 億美元，去年同期為 5.55 億美元。與2023 年第二季度7.7% 的成長相比，有機收入下降了15.3%，這是由於我們在嚴格的專案選擇方面持續努力以及聯邦資金延遲、許可延遲和客戶延遲的綜合影響，專案收入下降了21%。

Service revenues were down 10% due to the exited customer relationship discussed last quarter. Adjusted for this customer service revenues were essentially flat in the quarter. Adjusted gross margins for the three months ended June 30, 2024 was 21.4%, representing a 230 basis point increase compared to the prior year period, driven by disciplined customer and project selection, driving solid margin expansion in project and service revenues.

由於上季討論的客戶關係退出，服務收入下降了 10%。經此調整後，本季客戶服務收入基本持平。截至2024 年6 月30 日止三個月的調整後毛利率為21.4%，較上年同期成長230 個基點，這得益於嚴格的客戶和專案選擇，推動專案和服務收入的利潤率穩步增長。

Adjusted EBITDA decreased by 10.1% for the three months ended June 30, 2024, due to lower revenues and adjusted EBITDA margin was 13.7%, representing a 130 basis point increase compared to the prior year period, primarily due to the increase in adjusted gross margins, partially offset by lower fixed cost absorption.

截至 2024 年 6 月 30 日止三個月，由於收入下降，調整後 EBITDA 下降 10.1%，調整後 EBITDA 利潤率為 13.7%，較上年同期增加 130 個基點，主要是由於調整後毛利率增加，部分被較低的固定成本吸收所抵銷。

I'll now touch on cash flows. We continue to focus on driving free cash flow conversion improvements year over year, and I'm pleased with the progress to date in 2024 for the three months ended June 30, 2020, for adjusted free cash flow came in at $122 million, reflecting an improvement of $31 million versus the prior year.

我現在要談談現金流。我們繼續專注於逐年推動自由現金流轉換的改善，我對 2024 年截至 2020 年 6 月 30 日止三個月的進展感到滿意，調整後的自由現金流為 1.22 億美元，反映了與前一年相比增加了3100 萬美元。

And adjusted free cash flow conversion of 53% for this. For the first six months of the year, we increased adjusted free cash flow conversion by 43 million compared to the prior year period. Free cash flow generation has been and continues to be a priority across all of APA.

並為此調整了 53% 的自由現金流轉換。今年前六個月，調整後自由現金流比去年同期增加了 4,300 萬人。自由現金流的產生一直是並將繼續成為所有 APA 的首要任務。

And our performance in the first half of the year positions us well to deliver on our 2024 guidance of approximately 70% adjusted free cash flow conversion, representing an adjusted free cash flow delivery of over 600 million at the midpoint of our updated adjusted EBITDA guide.

我們上半年的業績使我們能夠很好地實現2024 年調整後自由現金流轉換率約70% 的指導，這意味著按照我們更新後的調整後EBITDA 指南的中位數計算，調整後自由現金流交付超過6 億美元。

At the end of Q2, our net debt to adjusted EBITDA ratio was approximately 2.7 times, taking into account the elevated acquisition and second quarter financing activities as a reminder, the back half of the calendar year is seasonally our strongest adjusted free cash flow generation.

在第二季末，我們的淨負債與調整後EBITDA 的比率約為2.7 倍，考慮到收購和第二季融資活動的增加，提醒一下，日曆年的後半段是我們季節性最強的調整後自由現金流產生。

But we expect that trend to continue this year with second half free cash flow, allowing us to continue deleveraging to below our stated long-term net leverage target of 2.5 times by year end. And I will now discuss our guidance for Q3 and full year 2024. We continue to expect full year reported net revenues of 7.15 to $7.35 billion at current currency expectations with the pushout of certain projects driven by funding, permitting and other related delays.

但我們預計今年下半年自由現金流將繼續保持這一趨勢，使我們能夠繼續去槓桿化，到年底低於我們既定的長期淨槓桿目標2.5倍。我現在將討論我們對第三季和 2024 年全年的指導。我們繼續預計，由於資金、許可和其他相關延誤推動某些項目的推出，按當前匯率預期，全年報告淨收入將達到 7.15 至 73.5 億美元。

As discussed by Ross, our current view is that the full year revenue will be closer to the low end of our guidance. Having said that, we remain confident in the margin profile and performance of the business, which is why we have brought up the bottom end of our adjusted EBITDA range by $10 million. This is reflected in our narrowed full year adjusted EBITDA guide of 855 to $915 million and represents adjusted EBITDA growth of approximately 13% to 17% on a fixed currency basis.

正如羅斯所討論的，我們目前的觀點是全年收入將接近我們指導的下限。話雖如此，我們對業務的利潤率和業績仍然充滿信心，這就是為什麼我們將調整後 EBITDA 範圍的下限上調了 1000 萬美元。這反映在我們將全年調整後 EBITDA 指南縮小至 855 美元至 9.15 億美元中，以固定貨幣計算，調整後 EBITDA 成長約 13% 至 17%。

In terms of Q3, we expect reported net revenues of 1.86 to $1.91 billion the guidance represents reported net revenue growth of 4% to 7%, an organic net revenue growth of 2% to 5%, and we expect Q3 adjusted EBITDA of 240 to $250 million, which represents adjusted EBITDA growth of approximately 7% to 12% on a fixed currency basis.

就第三季而言，我們預計報告淨收入為1.86 至19.1 億美元，該指引代表報告淨收入增長4% 至7%，有機淨收入增長2% 至5%，我們預計第三季度調整後EBITDA為2.4 至2.5 億美元，以固定貨幣計算，調整後 EBITDA 成長約 7% 至 12%。

For 2024, we anticipate full year interest expense to be approximately 145 million, depreciation to be approximately $80 million. Capital expenditures to be approximately 95 million, and our adjusted effective tax rate to be approximately 23%. We expect our adjusted diluted average share count for the year to be approximately $279 million.

2024 年，我們預計全年利息支出約為 1.45 億美元，折舊約為 8,000 萬美元。資本支出約 9,500 萬美元，調整後的有效稅率約為 23%。我們預計今年調整後的稀釋後平均股數約為 2.79 億美元。

As overall, we are pleased with the team's execution of our strategy in an evolving macro environment during the second quarter and first half of 2024. I look forward to sharing more updates on our progress as we move throughout the year.

總體而言，我們對團隊在 2024 年第二季和上半年不斷變化的宏觀環境中執行我們的策略感到滿意。我期待著分享我們全年進展的更多最新資訊。

I'll now turn the call back over to Rex.

我現在會把電話轉回雷克斯。

Thanks, Kevin. As you've heard, EPI. delivered strong financial results in the second quarter and first half of the year. The business continues to perform well with record adjusted EBITDA margin and free cash flow generation. I'm confident in our leaders' ability to generate continued momentum in the business build on historically strong execution, consistently drive margin expansion and return to historical levels of organic growth in the back half of the year and into 2025.

謝謝，凱文。正如您所聽說的，EPI。第二季和上半年的財務表現表現強勁。該業務繼續表現良好，調整後的 EBITDA 利潤率和自由現金流創歷史新高。我相信我們的領導者有能力在歷史上強勁的執行力基礎上產生持續的業務動力，持續推動利潤率擴張，並在今年下半年和 2025 年恢復有機增長的歷史水平。

We believe we can create sustainable shareholder value by focusing on our 1360 80 long-term value creation targets. And we feel confident in our ability to achieve our 13% or more adjusted EBITDA margin target in 2025.

我們相信，透過專注於 1360 80 長期價值創造目標，我們可以創造可持續的股東價值。我們對在 2025 年實現 13% 或更高的調整後 EBITDA 利潤率目標充滿信心。

With that, I would now like to turn the call back over to the operator and open the call up for Q&A.

這樣，我現在想將通話轉回給接線員並打開通話進行問答。

Thank you. We will now begin the question and answer session. (Operator Instructions)

謝謝。我們現在開始問答環節。（操作員說明）

Kathryn Thompson, Thompson Research Group.

凱瑟琳·湯普森，湯普森研究小組。

Hi. Thank you for taking my questions today. Just to get kicked off, you discussed project delays impacting the top line for the quarter. If you have feedback in the field from CareKey context has been that projects are seeing some delays but not cancellations.

你好。感謝您今天回答我的問題。首先，您討論了影響本季收入的項目延遲。如果您從 CareKey 獲得現場回饋，則表示專案出現了一些延誤，但沒有取消。

Could you give more color on whether these projects are just delays or cancellations? In addition, could you discuss what you're seeing in the back half of the year? Essentially, what gives you confidence for that full year guidance. Thank you.

您能否進一步說明這些項目是否只是延後或取消？另外，您能談談下半年的情況嗎？從本質上講，是什麼讓您對全年指導充滿信心。謝謝。

Thanks, Catherine, and thank you for your continued support and great question. And I just I want to start by level setting with everyone that we are not a project's first company and we are focused on growing our services business, and that's why we're comfortable beginning our we were comfortable with beginning our work on customer and project selection last summer to build a healthier book of business for some context on the quarter on the delays were a mix of funding, permitting and scope changes, pushing back the anticipated start times for certain projects across the business.

謝謝凱瑟琳，謝謝您持續的支持和很好的問題。我只是想先向大家介紹一下，我們不是專案的第一家公司，我們專注於發展我們的服務業務，這就是為什麼我們很樂意開始我們的客戶和專案工作去年夏天，我們選擇在本季度的某在一些背景下建立更健康的業務記錄，其中涉及資金、許可和範圍的變化，從而推遲了整個業務中某些項目的預期啟動時間。

But none of these projects are cancellations and in most cases, the issues causing the delays have been resolved and up. But we feel like we're about 90 days behind where we expected to be, and that's why Kevin commented that we are tracking towards the low end of our full year guide for revenue.

但這些項目都沒有被取消，而且在大多數情況下，導致延誤的問題都已經解決。但我們感覺我們比預期落後了大約 90 天，這就是為什麼凱文評論說我們正在接近全年收入指南的低端。

And regarding confidence, I mean, we have really good confidence. I can feel like the business is in a really good place today as we move into the back half of the year as we work our way through some of the some of these delays, our backlog is growing. And I mentioned in my remarks that it's increased by more than 500 million since the start of the year.

關於信心，我的意思是，我們非常有信心。我覺得今天的業務狀況非常好，隨著我們進入下半年，我們正在努力解決其中一些延誤，我們的積壓訂單正在增加。我在演講中提到，今年以來增加了5億多。

And the best part about it is it's healthier. And so some of the customer attrition and some of the work that we've had to do to raise pricing and make sure that we're working for the right clients. I mean, sometimes that's hard and in some of those changes are hard, but I feel like our team and our businesses really, really manage their way through that.

它最好的部分是它更健康。因此，一些客戶流失以及我們必須做的一些工作來提高定價並確保我們為正確的客戶服務。我的意思是，有時這很困難，在某些變化中也很困難，但我覺得我們的團隊和我們的企業確實能夠成功地度過難關。

And sometimes when you have some of these delays, you still you end up still trying to manage what are you going to do with the people in the field leaders that you would utilize on those existing projects and it makes it tough, makes it more challenging to navigate those waters. And I feel like, like I said, our team has done a really good job.

有時，當你遇到一些延誤時，你最終仍然試圖管理你將在現有專案中利用的現場領導者的人員做什麼，這使得事情變得困難，變得更具挑戰性航行這些水域。正如我所說，我覺得我們的團隊做得非常好。

So I feel like for growing momentum as we as we are heading into the quarter, and into the back half of the year. We're just sitting a little bit a little bit behind where we thought we would be last time we talked.

因此，隨著我們進入本季和下半年，我感覺勢頭會不斷增強。我們只是坐在上次談話的位置後面一點點。

So I know Kevin would you add anything to that?

所以我知道凱文你會補充什麼嗎？

Sure. Yes, hey, good morning, Catherine. First thing I would say, as Adam pointed out, I actually misspoke on the call. We brought up the bottom end of our EBITDA range to EUR85 million. And I think I said 8.5 million on the call.

當然。是的，嘿，早安，凱瑟琳。首先我要說的是，正如亞當指出的那樣，我實際上在電話中說錯了。我們將 EBITDA 範圍的下限提高至 8,500 萬歐元。我想我在電話中說的是 850 萬。

So apologies for that. But our bottom end of our range is $85 million. Our current range is 85 to 95 on that, Russ talked about momentum in our business. I would say, Tom, even in Q2 as we missed on or off our the midpoint of our guide from a revenue standpoint, we overdelivered at margins.

所以對此表示歉意。但我們的範圍的下限是 8500 萬美元。我們目前的評分範圍是 85 到 95，Russ 談到了我們業務的發展勢頭。湯姆，我想說，即使在第二季度，從收入的角度來看，我們錯過了指南的中點，但我們的利潤率還是超額交付的。

Our margins continue to hang in there and perform really well. And that's what gives us confidence even as we move into the third quarter here. And we're going to be able to continue to sort of drive margin expansion year on year and sort of outsized performance with respect to margins. Some of the elements that helped us in the second quarter, Kathryn, were the work we did do and we closed out.

我們的利潤率持續保持不變，而且表現得非常好。即使我們進入第三季度，這也給了我們信心。我們將能夠繼續推動利潤率逐年擴張，並在利潤率方面取得超額業績。凱瑟琳，第二季對我們有幫助的一些因素是我們所做的工作和我們結束的工作。

We closed out at higher margins than expectations. So the content the teams continue to execute on even on what we expect to be higher margin project work, they're executing above expectations also from a cost standpoint, our international team has done a really good job continuing to manage costs and accelerating their value capture as they've moved through the years.

我們的收盤利潤率高於預期。因此，即使我們期望利潤率更高的專案工作，團隊也會繼續執行內容，從成本的角度來看，他們的執行也超出了預期，我們的國際團隊在繼續管理成本和加速其價值方面做得非常好捕捉他們多年來的成長歷程。

That's been favorable, and we expect that to continue. And then we did see favorable business mix impacts that margins on just due to the service growing at a higher rate than our project business. And as our projects business ramps up in the third quarter, we would expect that margin impact to be favorable as well as we move into the back half of the year.

這是有利的，我們預計這種情況會持續下去。然後，我們確實看到了有利的業務組合對利潤率的影響，因為服務的成長速度高於我們的專案業務。隨著我們的專案業務在第三季度增加，我們預計利潤率的影響將是有利的，並且我們將進入今年下半年。

So all in, as Mike said, we feel good about margins and our ability to execute in the back half of the year as well.

因此，正如麥克所說，總而言之，我們對利潤率和下半年的執行能力感到滿意。

Frankly, as my follow-up question on free cash flow free cash flow generation and is seeing an acceleration of that in the back half of the year. As you indicated in today's commentary, balancing where we are from your net debt level along with M&A. Could you give us an update just in terms of your uses of cash as we focus on the back half of the year? Thanks very much.

坦白說，作為我關於自由現金流的後續問題，自由現金流的產生在今年下半年出現了加速。正如您在今天的評論中指出的那樣，透過淨債務水準和併購來平衡我們的狀況。由於我們關注的是下半年，您能否向我們介紹您的現金使用情況？非常感謝。

Yes, so just additional color on free cash flow delivery. Just as a reminder, you know, in a normal year, we're going to deliver somewhere between 20% to 30% of our full year cash flow conversion due to that due to seasonality in the first half. And we're going to deliver some 70% to 80% of our free cash flow in the back half of the year.

是的，所以只是在自由現金流交付上添加額外的色彩。提醒一下，您知道，在正常年份，由於上半年的季節性因素，我們將實現全年現金流量轉換的 20% 至 30% 之間。我們將在今年下半年交付約 70% 到 80% 的自由現金流。

And that's the expectation this year as we move through the year. Delivering is still a priority as it has been, and we're going to do that as we continue to reduce our leverage from where it is today to $0.07, I'd have to five, but after that, M&A remains a priority.

這就是我們今年的期望。一如既往，交付仍然是優先事項，隨著我們繼續將槓桿從現在的水平降低到 0.07 美元，我們將這樣做，我必須減少到 5 美元，但在那之後，併購仍然是優先事項。

We've closed, as Ross said, on six bolt-on transactions in the first half of the year, plus elevated spend north of 600 million. And we still have plans, as we've said, to continue to invest in our back or our pipeline and continue to do bolt-on transactions as we move through the back half of the year.

正如羅斯所說，今年上半年我們已經完成了六筆補充交易，支出增加了 6 億美元以上。正如我們所說，我們仍然有計劃繼續投資我們的後備或管道，並在今年下半年繼續進行補充交易。

Great. Thanks very much.

偉大的。非常感謝。

Thank you.

謝謝。

Andy Kaplowitz, Citigroup.

安迪‧卡普洛維茨，花旗集團。

Good morning, everyone.

大家早安。

And I know are good.

我知道都很好。

Are you Russ moves you can talk about the overall macro environment that you see obviously, the leading indicators are all over the place in nonres construction, but your backlog, as you said, is growing. So can you talk about the verticals that are driving that growth and update us specifically on what you're seeing in the data center market, where how APT is playing in that market?

你是拉斯的舉動嗎，你可以談談你顯然看到的整體宏觀環境，非資源建設的領先指標遍布各處，但正如你所說，你的積壓正在增長。那麼，您能否談談推動這一成長的垂直產業，並向我們具體介紹您在資料中心市場中看到的情況以及 APT 在該市場中的表現？

Yes, there was data center market obviously is an end market that we're very active in screening and every place every place you look, you're, you know, more and more about some of the opportunities in data centers. And again, our focus is leading on the inspection and service side of the data centers. And we want our inspection and service relationships will lead to our project related work on.

是的，資料中心市場顯然是一個我們非常積極篩選的終端市場，你看到的每一個地方，你都知道，越來越多地了解資料中心的一些機會。再說一遍，我們的重點是資料中心的檢查和服務方面。我們希望我們的檢查和服務關係能促進我們專案相關工作的發展。

And there's, you know, there's been just countless. It's like opportunity after opportunity in the space. One thing I would do to just level set a little bit is that when you think about a data center expansion. As you know, we're focused on the fire life safety piece of that expansion project opportunity, which is going to be significantly smaller than the same mechanical and electrical packages in those data center projects are probably north of 80% mechanical HVAC and electrical and the of the HVC. or the life safety opportunities are smaller.

你知道，這樣的例子數不勝數。這就像這個領域一個又一個的機會。我會做的一件事就是當你考慮到資料中心擴充功能時。如您所知，我們將重點放在該擴建項目機會中的消防生命安全部分，該項目將比這些數據中心項目中的相同機械和電氣套件小得多，這些項目可能超過80% 的機械HVAC 和電氣和電氣設備。或生命安全機會較小。

We're also seeing really robust opportunities in the semiconductor space, you know, advanced manufacturing, which would include pharma as well as you know, the electric on electric vehicles slash battery space on the healthcare remains really robust. And in some instances on for specific businesses of ours, we're seeing opportunities in the aviation space as well as in the sports and entertainment space.

我們還在半導體領域看到了真正強勁的機會，你知道，先進製造，其中包括製藥業，電動車的電動車削減了醫療保健領域的電池空間，仍然非常強勁。在某些情況下，對於我們的特定業務，我們在航空領域以及體育和娛樂領域看到了機會。

So for us and maybe you could talk about the confidence you have as organic revenue growth does remain a little light that you continue to offset lower growth at higher margin. And Kevin talked about it a little bit, but it's still a value capture actually trending higher than that one 25 that you previously gave us. And then maybe the new 500 million of backlog that you mentioned, Russ, is that coming in at materially higher margins and you read?

因此，對於我們來說，也許您可以談談您的信心，因為有機收入成長確實仍然有點輕微，您將繼續以更高的利潤率抵消較低的成長。Kevin 對此進行了一些討論，但它仍然是一種價值捕獲，實際上趨勢高於您之前給我們的 25。然後，Russ，您提到的新的 5 億積壓訂單是否會以更高的利潤率出現，您讀過嗎？

So Andy, it's amazing how you wrap like three or four questions into one.

安迪，你如何將三、四個問題合併為一個，真是太神奇了。

Pretty good at that?

很擅長嗎？

Yes, that's good. That's the cagey veteran. And you know, I would say, well, I mean, I in my remarks, I talked about margins. I talked about the 13% margin as well as our target for 2025. And that's obviously the goal that we stated.

是的，那很好。這就是那位謹慎的老兵。你知道，我會說，嗯，我的意思是，我在演講中談到了利潤率。我談到了 13% 的利潤率以及我們 2025 年的目標。這顯然就是我們所說的目標。

And I also said that we think that we can continue to expand from there. And so I feel really good about, you know, the opportunities in front of us as we kind of continue to grind through the course of this year. So we've shown that we can grow and expand our margins, and we will continue to grow on and expand our margins on as we as we work our way through the back half the of the $500 million of the increased backlog is without question healthier on and when you look at it, you know, it's like hard.

我還說過，我們認為我們可以從那裡繼續擴張。因此，我對擺在我們面前的機會感到非常滿意，因為我們今年將繼續努力。因此，我們已經證明我們可以成長和擴大我們的利潤率，並且隨著我們努力度過後半段，我們將繼續增長和擴大我們的利潤率，增加的 5 億美元積壓訂單無疑會更加健康。看到它時，你知道，這很難。

It would be hard for me to tell you that there's, you know, build 200, 50 basis points of margin improvement and enter whatever, you know, directionally, that would probably be somewhat correct. But for us, it varies by business. And so the mix is important in what that backlog looks like. But it's without question, it's much healthier. And I feel like I missed one of your three could [Chubb] how it sort of what's going on there?

我很難告訴你，你知道，建立 200、50 個基點的利潤率改善，並輸入任何你知道的方向，這可能會有點正確。但對我們來說，它因業務而異。因此，這種組合對於積壓的情況很重要。但毫無疑問，它更健康。我覺得我錯過了你們三個中的一個 [Chubb] 那裡發生了什麼事？

Yes. Well, we're not going to raise the value capture targets. The one 25. I mean, we're on track with that and we have plans in place on two to deliver that. And we feel good about where we're at. I'm you know, I mean, we track it and we need to continue to track it on my brain is kind of like we're more getting to business as usual and, you know, mode in that business and focusing on growth.

是的。好吧，我們不會提高價值獲取目標。那個25.我的意思是，我們正在朝著這個目標邁進，我們已經制定了兩個計劃來實現這一目標。我們對自己所處的位置感覺良好。我是你知道的，我的意思是，我們跟踪它，我們需要繼續在我的大腦中跟踪它，就像我們更多地像往常一樣開展業務，你知道，在該業務中模式並專注於增長。

And we just had have had a board meeting and we had a number of our international leaders here and with some of the work that our international sales leaders done, you know, kind of transforming his sales team and everything else you sitting by me. So I'm just kind of I'm having a little bit of fun with it, too, but I and the work that they're doing to transform our sales team and starting to lead with service and inspection work.

我們剛剛召開了一次董事會會議，我們有一些國際領導人在這裡，我們的國際銷售領導人所做的一些工作，你知道，有點改變他的銷售團隊和你坐在我身邊的其他一切。所以我只是覺得我也有一點樂趣，但我和他們正在做的工作是改造我們的銷售團隊，並開始領導服務和檢查工作。

You know, in the markets that they serve, I mean we're going to really start to feel the field, the rewards of that work really as we move into the first parts of next year. So I'm really excited about it. And I feel like we're in a really good place with Chubb in our international business just in general as it relates to integrating them.

你知道，在他們服務的市場中，我的意思是，當我們進入明年上半年時，我們將真正開始感受到這個領域，真正感受到這項工作的回報。所以我對此感到非常興奮。我覺得我們在國際業務中與 Chubb 的合作非常好，因為這與整合它們有關。

Appreciate all the color.

欣賞所有的顏色。

Julian Mitchell, Barclays.

朱利安米切爾，巴克萊銀行。

Good morning. This is a Jack Petrie on for Julian Mitchell and the implied Q4 EBITDA is up slightly sequentially versus historically being sequentially down. Can you explain what assumptions macro drivers are driving the difference versus prior seasonality?

早安.這是朱利安米切爾的傑克皮特里，隱含的第四季度 EBITDA 比歷史上連續下降的情況略有上升。您能否解釋哪些宏觀驅動因素導致了與先前季節性的差異？

Yes, sure. Hi. This is Kevin. I'll take that. The primary driver of that this year is the fact that we expect our project business to accelerate in the back half of the year off sort of the numbers that Russ referenced earlier. And so our expectation would be that our growth rate in projects accelerates in the back half of the year.

是的，當然。你好。這是凱文.我會接受的。今年的主要動力是，我們預計我們的專案業務將在今年下半年加速，超出 Russ 之前提到的數字。因此，我們的預期是，今年下半年我們的專案成長率將會加快。

Traditionally, Tom, in our projects flatten out or slightly down Q3 to Q4, but we this year we're expecting our projects business on with the backlog coming on that Russ reference to actually sequentially step up. So that's the largest driver in it. We also expect margin expansion in the back half of the year, but that traditionally and that's going to happen year in and year out. So it's really the acceleration of the project business.

湯姆，傳統上，我們的專案在第三季到第四季會趨於平穩或略有下降，但今年我們預計我們的專案業務會繼續進行，而 Russ 提到的積壓工作實際上會依次增加。所以這是其中最大的驅動力。我們也預期下半年利潤率會擴大，但傳統上這種情況會年復一年地發生。所以這確實是專案業務的加速。

Thank you. And just a quick follow-up margins are solid in both segments. You mentioned earlier raising the margin targets in early 2025. How should we think about that by segment?

謝謝。只需快速跟進，這兩個細分市場的利潤率就很穩定。您之前提到在 2025 年初提高利潤率目標。我們應該如何按細分來考慮？

Well, I mean, number one, we're not going to tell you where we're going to raise targets until we need to deliver on our 2025 goals first, and then we will share kind of where we're going. But directionally, we expect every piece of our business to continue to improve and expand our markets and up.

嗯，我的意思是，第一，在我們需要先實現 2025 年目標之前，我們不會告訴您我們將在哪裡提高目標，然後我們將分享我們的發展方向。但從方向上來說，我們期望我們的每項業務都能繼續改善和擴大我們的市場。

And as you know, nobody sort of speed gets a reprieve and the expectations are that everybody will continue to grow, and we want to make sure that we're taking advantage of our higher margin businesses, obviously. But when you look across our portfolio of companies on every single one of them has opportunities to improve and to be better.

如您所知，沒有人能獲得速度上的緩和，並且期望每個人都將繼續成長，顯然我們希望確保我們能夠利用我們利潤率較高的業務。但當你瀏覽我們的公司組合時，你會發現每個公司都有機會改進並變得更好。

And that's the expectation, and we'll clearly lay that out early next year.

這就是我們的期望，我們將在明年初明確提出這一點。

Understood. Thank you for the questions.

明白了。謝謝你的提問。

Thank you.

謝謝。

Heather Balsky, Bank of America.

希瑟‧巴爾斯基，美國銀行。

And this is [Andi Murdo] on for Heather Balsky. Good morning. And I'm wondering if you could give us some color on what you're seeing in pricing. Are you getting any pushback and how does that factor into your second half Okay.

這是希瑟·巴爾斯基的[安迪·默多]。早安.我想知道您能否給我們一些關於您在定價中看到的情況的資訊。你是否遇到任何阻力？

And Kevin, I'll take that. So the short answer is we have continued our pricing focus, especially on the service side of our business. We see year in and year out we're on pushing pricing campaigns that drive margin expansion on the service side of the business.

凱文，我接受。因此，簡短的回答是我們繼續專注於定價，特別是在我們業務的服務方面。我們年復一年地推動定價活動，以推動業務服務的利潤成長。

Our teams have done a great job. It looks different as you work around the world but generally they've across our service businesses, especially in the life safety space. Our teams have continued to push pricing on it in the way that it drives margin expansion on that side of the business. We are always in dialogue with our customers around that. But I would say at this point, our customers continue to appreciate the value we bring our pricing continues to work, and we expect that to continue through the back half of this year.

我們的團隊做得很好。當你在世界各地工作時，情況看起來會有所不同，但通常他們都涉及我們的服務業務，尤其是在生命安全領域。我們的團隊繼續推動定價，以推動業務利潤率的擴張。我們始終圍繞著這一點與客戶進行對話。但我想說，在這一點上，我們的客戶繼續欣賞我們帶來的價值，我們的定價繼續發揮作用，我們預計這種情況將持續到今年下半年。

Thank you.

謝謝。

Jonathan E. Tanwanteng, CJS Securities.

Jonathan E. Tanwanteng，CJS 證券。

Hi, good morning and really nice job with the margin guys. I was wondering if you could talk more about the delays. Was there any specific end market or commonality between them? Or was it several independent headwinds that coincidentally in Q2? And then beyond that, what is the risk of further push-outs at this point?

嗨，早上好，和保證金人員一起做得非常好。我想知道你是否可以更多地談談延誤的問題。它們之間有什麼特定的終端市場或共同點嗎？還是第二季巧合的幾個獨立的逆風？除此之外，目前進一步推出的風險是什麼？

Well, I mean, I would say to answer your question, it's kind of across every aspect of it. You know, like I was I'm just reflecting on your question. You know, like we had a and permitting delay was a large project opportunity with one of our infrastructure customers on kind of in the north east on that's been resolved.

嗯，我的意思是，我想說回答你的問題，它涉及到它的各個方面。你知道，就像我一樣，我只是在思考你的問題。你知道，就像我們有一個大型專案機會，允許延遲，我們的一個基礎設施客戶位於東北部，這個問題已經解決了。

And we're actually on the site we had a actually a utility client of ours that had kind of a start and a stop to come to one of their arm beyond work programs that on we have an MSA with and that those issues are kind of been resolved. And we expect to have to have boots on the ground here in the month of August.

事實上，我們在網站上有一個我們的公用事業客戶，除了我們有 MSA 的工作計劃外，他們還有一個開始和停止的手臂，這些問題有點像已解決。我們預計八月必須親自上陣。

And so that's been resolved. We have a North American Safety client to you know, on a project opportunity is making some changes with there. General contractors, which has slowed down some of the forward movement that we had some delays in our Asian business, you know, which is in the fire and security space.

這樣就解決了。你知道，我們有一個北美安全客戶，在一個專案機會中正在進行一些改變。總承包商，這減緩了我們亞洲業務的一些進展，你知道，這是在消防和安全領域。

So it's kind of it's been a little bit of everything, John I don't think anyone necessarily one aspect has been 100% in immune from it, and that is just good. It's clearly why one of the reasons that we're so focused on growing our businesses business from an inspection service and monitoring first focus so that the lumpiness associated with some of your project work doesn't have an impact on the business and the results of the business.

所以這有點是所有事情的一部分，約翰，我認為沒有人一定在某個方面 100% 免受它的影響，這很好。顯然，這就是為什麼我們如此專注於從檢查服務和監控第一個重點來發展我們的業務的原因之一，以便與您的一些專案工作相關的混亂不會對業務和結果產生影響業務。

So I mean, that's the that's the most important thing about our strategy and what differentiates for us from some of our from some of the folks that we get compared to from time to time.

所以我的意思是，這是我們策略中最重要的事情，也是我們與我們不時被比較的一些人的不同之處。

Okay, fair enough. Thank you. And then just regarding the backlog, and I know that getting away from your inspection and services focus, but just what end markets drove the backlog increase and how much of that was from the US acquisitions?

好吧，很公平。謝謝。然後就積壓而言，我知道遠離您的檢查和服務重點，但是到底哪些終端市場推動了積壓增加，其中有多少來自美國的收購？

Our I mean, not a lot has been driven by the by the acquisition on our maybe approximately 10% of it on maybe a little bit more from the acquisition, but not much more than that on. And I'm thinking about elevated. I mean, remember that north of 70% of their of their revenue comes from service inspections, repair, maintenance and really they're not doing so to speak, new construction and their project related work is modernization and update upgrades on existing on Elevators into an existing facility.

我的意思是，收購帶來的影響並不大，大約有 10% 是由收購推動的，但也僅止於此。我正在考慮提升。我的意思是，請記住，他們 70% 的收入來自服務檢查、維修、維護，實際上他們並沒有這樣做，新建築及其項目相關工作是對現有電梯進行現代化和更新升級現有設施。

So one could almost argue that that service work as well, but that's kind of their version of project work, I would say that has come in on that increased backlog is coming in the rates right space. You know, I probably when I was talking about end markets.

因此，人們幾乎可能會說，服務工作也是如此，但這就是他們的專案工作版本，我想說的是，隨著積壓工作的增加，在正確的空間內出現了這種情況。你知道，我可能在談論終端市場時。

And one thing I didn't talk about, you know, the infrastructure space and some of the opportunities that we're seeing coming in specifically in the infrastructure space on, you know, there's a lot of opportunity there, but we're seeing tremendous amount of activity in data. We're seeing a tremendous amount of activity in the semiconductor space.

我沒有談論一件事，你知道，基礎設施領域以及我們看到的一些機會，特別是在基礎設施領域，你知道，那裡有很多機會，但我們看到大量的數據活動。我們看到半導體領域有大量的活動。

And, you know, we're starting to see some increase in the, you know, warehouse distribution center space that's been lagging, but you're starting to see some increased activity there. I think people are anticipating interest rate cuts on. But so you're seeing some more activity there. But the health care remains robust with a lot of opportunities as well.

而且，你知道，我們開始看到一直落後的倉庫配送中心空間增加，但你開始看到那裡的活動增加。我認為人們正在期待降息。但你會看到那裡有更多的活動。但醫療保健仍然強勁，也有很多機會。

So really, the end markets I talked about the only one I really missed was kind of the infrastructure space.

所以說真的，我談到的終端市場我唯一真正錯過的是基礎設施領域。

Great. Thank you.

偉大的。謝謝。

Thanks, Jason.

謝謝，傑森。

Stephanie Moore, Jefferies.

史蒂芬妮·摩爾，杰弗里斯。

Hi, good morning. Thank you. May our starting. I'm doing well. Thank you. Maybe just starting on the M&A front, kind of a two-part question within that, can you kind of talk about your and desired source of funding to source to fund M&A deals going forward? And then also your appetite for doing potentially larger deals, maybe a similar size as elevated deal or maybe even larger, especially if the transaction would accelerate your reoccurring revenue targets and or margin profile targets, et cetera? Thank you.

嗨，早安。謝謝。願我們的出發。我做得很好。謝謝。也許只是從併購方面開始，其中有一個由兩部分組成的問題，您能否談談您和期望的資金來源，以便為未來的併購交易提供資金來源？然後，您是否有興趣進行潛在的更大交易，可能與提升交易的規模相似，甚至可能更大，特別是如果交易會加速您的經常性收入目標和/或利潤率目標等？謝謝。

I didn't really catch the first part of your question. Stephanie, but the second half of the question regarding, you know, other transactions, the size of elevated pit was the right fit. And I would say feel like that would be something that would be digestible for us on I think we would have some interest.

我沒有真正明白你問題的第一部分。史蒂芬妮，但是問題的後半部分涉及其他交易，高架坑的大小是合適的。我想說的是，這對我們來說是可以理解的，因為我認為我們會有一些興趣。

It's got an it's got to fit kind of the profile that we'd be looking for with a high element of recurring revenue and inspection service monitoring and the margin profile would have to be accretive on. You know, obviously we'd have to be able to acquire the business at the right price regarding larger than that, um, you know, I mean you can never say no to anything, but I don't know that that's where our attention is sitting right now.

它必須符合我們所尋求的那種具有經常性收入和檢查服務監控的高要素的配置文件，並且利潤配置文件必須不斷增加。你知道，顯然我們必須能夠以合適的價格收購比這更大的業務，嗯，你知道，我的意思是你永遠不能拒絕任何事情，但我不知道這就是我們的注意力所在現在正坐著。

On the reality of this, we're really focused on integrating elevated and bringing their team into the API. family and making that a positive journey for them on, you know, that we had actually a couple of their key business leaders at our at our Board meeting. They got a chance to present on being on their business and yesterday and one of one of their leaders called us their forever home.

事實上，我們真正專注於整合提升並將他們的團隊引入 API。你知道，我們的董事會會議上實際上有他們的幾位關鍵業務領導人。他們有機會介紹自己的業務，昨天，他們的一位領導者稱我們為他們永遠的家。

And that really stuck with me. And I think that we owe them all them, you know, the right level of effort to really truly make this a forever home so that they feel good about where it's at and up. But we do have a keen interest in continuing to expand in that space.

這真的讓我難以忘懷。我認為我們欠他們所有人，你知道，付出適當的努力，真正讓這裡成為一個永遠的家，讓他們對這裡的現狀和未來感到滿意。但我們確實對繼續拓展該領域抱持濃厚的興趣。

And Kevin, I'll handle the first half of your question because I can hear you.

凱文，我會處理你問題的前半部分，因為我能聽到你的聲音。

Yes, Stephanie, good morning. On funding our bolt-on campaign year in and year out our campaign is going to be aligned with our ability to funded through free cash flow growth. That's sort of how we tackled it this year in that town and expect us to tackle it in years to come. We will produce enough cash flow, and we'll prioritize it on to make sure that we're able to do the bolt-on M&A that we plan on in any given year?

是的，史蒂芬妮，早安。在年復一年地為我們的補充活動提供資金時，我們的活動將與我們透過自由現金流成長提供資金的能力保持一致。這就是我們今年在鎮上解決這個問題的方式，並希望我們在未來幾年能夠解決這個問題。我們將產生足夠的現金流，我們將優先考慮它，以確保我們能夠在任何特定年份進行我們計劃的補充併購？

Yes. I mean, Kevin and the big the reality of it is by this tuck-in market, you know, like we spent $100 million last year and we've said that we're going to accelerate that in the course of this year. And we still have, you know, we still have half a year to go, but directionally it will be north. It will be, you know, in excess of two times of what we spent in last year.

是的。我的意思是，凱文和它的大現實是透過這個tuck-in市場，你知道，就像我們去年花了1億美元，我們已經說過我們將在今年加速這一進程。我們還有，你知道，我們還有半年的時間，但方向是往北。你知道，這將是我們去年支出的兩倍多。

And we continued we plan to continue that drumbeat and our pipeline of the right bolt-on opportunities is really robust. And we feel really good about the businesses that we're acquiring and the teams of people that we're bringing into the APS family. It's an it's our M&A team is doing a great job.

我們繼續計劃繼續這種鼓動，我們的正確補充機會管道非常強勁。我們對我們正在收購的業務以及我們引入 APS 大家庭的團隊感到非常滿意。我們的併購團隊做得很好。

Understood. And then maybe just following up on some of the margin questions that have been asked thus far and kind of well, I get asked this, but you're clearly, I think, you know, margin improvement. It remains an ongoing on priority this year and obviously into next year, as you noted, can you talk about how much of the margin expansion opportunity is predicated on kind of the rebound in organic growth versus how much can you still achieve just based on kind of self-help initiatives and synergies and the likes of kind of other tailwinds that you have think you fail to exist?

明白了。然後，也許只是跟進迄今為止提出的一些利潤率問題，我被問到了這一點，但我認為，你知道，利潤率顯然有所改善。正如您所指出的，它仍然是今年的持續優先事項，顯然是明年的優先事項，您能否談談利潤率擴張機會有多少是基於有機增長的反彈，而僅基於有機增長的反彈您仍然可以實現多少目標自助舉措和協同作用以及您認為自己無法存在的其他順風之類的東西？

Certainly. So if you look at just to level set over the last eight quarters, the back half of last year, we expanded gross margins on over 200 basis points first half of this year or over 300 basis points. The levers that we've been pulling on there. We've been talking about a mix which is driving higher growth and a higher percentage of overall revenues from inspection, service, and monitoring.

當然。因此，如果你只看過去八個季度（去年下半年）設定的水平，我們今年上半年的毛利率擴大了 200 多個基點，或超過 300 個基點。我們一直在拉動的槓桿。我們一直在談論一種組合，它可以推動更高的成長以及來自檢查、服務和監控的總收入的更高比例。

That's going to be a driver that's going to continue to have an impact for years to come. We talk about pricing on the service side of the business. That's going to be a driver that has an impact on margin expansive pricing that's going to have an impact as we move into 2025 and beyond.

這將成為未來幾年繼續產生影響的驅動力。我們討論業務服務方面的定價。這將成為影響利潤擴張定價的一個驅動因素，隨著我們進入 2025 年及以後，這種定價也會產生影響。

I'll say some of the impacts that have been driving the significant expansion we've seen over the last eight quarters like material costs coming down and the impact that's had on both is a headwind on the way up and the tailwind on the way down.

我想說的是，過去八個季度我們看到的推動顯著擴張的一些影響，例如材料成本下降，對兩者的影響是上升時的逆風和下降時的順風。

That will obviously subside. Also, we took we tackled a lot of this backlog work and disciplined customer and project selection started last year. So the improvement in the health of the backlog has been significant. As we've moved over the last for quarters, we're obviously going to stay focused on the project side of our business and improving margins there, but that impact would subside as well.

這顯然會消退。此外，我們從去年開始處理了大量積壓工作，並進行了嚴格的客戶和專案選擇。因此，積壓的健康狀況得到了顯著的改善。隨著我們過去幾季的發展，我們顯然將繼續專注於業務的專案方面並提高利潤率，但這種影響也會消退。

But it's really pricing continued service mix. And as we move into future years, our ability to continue to scale our operations to drive productivity isn't going to be sort of the new driver we're going to be focused on. And that too will have margin impacts as we move into 2025 and beyond.

但這確實是對持續服務組合的定價。隨著我們進入未來幾年，我們繼續擴大業務規模以提高生產力的能力不會成為我們要關注的新驅動因素。當我們進入 2025 年及以後時，這也會對利潤率產生影響。

Josh Chan, UBS.

喬許陳，瑞銀。

Good morning, Russ, and Kevin. Thanks for taking my question. I was wondering if you could give us the service versus project breakdown within the safety segment and then kind of focusing on the service side of things, which I think probably in a mid-single digit range. Is that the right piece of safety service growth going forward in your mind?

早上好，拉斯和凱文。感謝您提出我的問題。我想知道您是否可以向我們提供安全領域內的服務與專案細分，然後專注於服務方面，我認為這可能在中個位數範圍內。您認為這是安全服務發展的正確方向嗎？

Yes, Josh, I'll take that. So in the first half of the year, if you think about it that way. Our service business on the safety side continue to perform at mid-single digits. Our international team, as well as our North America team, has stayed focused on that we've continued to have some good results and we expect that mid-single digit growth rate to improve as we move into the back half of the year.

是的，喬什，我會接受的。所以在今年上半年，如果你這麼想的話。我們在安全方面的服務業務持續保持中個位數的表現。我們的國際團隊以及北美團隊一直專注於我們繼續取得一些良好的成果，我們預計隨著進入今年下半年，中個位數的成長率將會改善。

Project side on the other hand, we talked about the work the international team has been doing. That was a drag on the safety segment in the first half of the year. But as we move into the back half of the year. We expect that to improve as well and expect to see growth in the projects business on the safety side of our business as well.

另一方面，我們談到了專案方面國際團隊一直在做的工作。這對今年上半年的安全部門造成了拖累。但隨著我們進入今年下半年。我們預計這一情況也會得到改善，並預期我們業務的安全方面的專案業務也會有所成長。

Craig, and thanks for that color. And kind of dovetailing on that. And as that project business reaccelerates, how do you think about balancing that? And third, the margin benefit that you've gotten from mix in the most recent quarters. How should we think about margins as that mix maybe benefit maybe potentially lessens?

克雷格，謝謝你的顏色。與此相吻合。隨著該專案業務重新加速，您如何考慮平衡這一點？第三，最近幾季您從混合中獲得的利潤收益。當這種組合帶來的好處可能會減少時，我們該如何考慮利潤率？

It's a good question, Phil. I think it's still going to be a benefit in Q3 and Q4 or more in any quarter where our projects business outgrows our service business, it could be a bit of a headwind. But as we look in the back half of the year with the acceleration in our service business or even into Q4. I don't see on the mix flipping on us from a projects versus service standpoint with respect to our margin expansion efforts.

這是個好問題，菲爾。我認為，在我們的專案業務成長超過我們的服務業務的任何季度，這仍然會在第三季度和第四季度或更長時間帶來好處，這可能會帶來一些阻力。但當我們展望今年下半年，甚至進入第四季時，我們的服務業務將加速成長。從專案與服務的角度來看，就我們的利潤擴張努力而言，我不認為這種組合會對我們產生影響。

Okay. Thanks for your time and good luck in the second half.

好的。感謝您抽出寶貴的時間，祝您下半場好運。

Thanks, Joe.

謝謝，喬。

Steve Tusa, JP Morgan.

史蒂夫圖薩，摩根大通。

Hi, good morning, Steve. Our not too bad. Congrats on the on the execution, definitely choppy environment out there. That's for sure. On the just see the segments. Can you just give us some color on how you expect them to come, just relative to the 2Q organic growth rates for each, how you expect them to play out for the next couple of quarters. It's obviously a pretty significant acceleration.

嗨，早上好，史蒂夫。我們的還不錯。恭喜你的執行力，那裡的環境絕對不穩定。這是肯定的。就剛剛看到的片段。您能否給我們一些關於您期望它們如何出現的信息，僅相對於每個第二季度的有機增長率，以及您期望它們在接下來的幾個季度中如何發揮作用。這顯然是一個相當顯著的加速。

Obviously, the 45 million is getting pushed and into the second half. So that helps the comps obviously, but it's a little lumpy. So maybe just a little bit of help around the framework around the organic for each of the segments in the second half.

顯然，4500 萬已經被推入下半年。所以這顯然對比賽有幫助，但有點不穩定。因此，下半年每個細分市場的自然框架可能會提供一些幫助。

Yes, Steve, hey, this is Kevin. I'll take that. I'll just break it down between safety and then our specialty segment. So safety, again, first half of the year, we saw mid-single digit service growth. We saw on this low single digit decline on the project side of the business, largely driven by the work we're doing in Asia-Pac and the international teams on disciplined customer and project selection.

是的，史蒂夫，嘿，這是凱文。我會接受的。我將把它分為安全部分和我們的專業部分。因此，在安全方面，今年上半年，我們再次看到了中個位數的服務成長。我們看到業務項目方面出現了低個位數的下降，這主要是由我們在亞太地區所做的工作以及國際團隊在嚴格的客戶和專案選擇方面所做的工作所推動的。

As we move into the second half of the year, we expect our service arm to still be in mid-single digits, but to improve sequentially from a growth rate standpoint. And we also expect the project side of the business to move from slightly down to low single digit from an organic growth standpoint.

隨著進入今年下半年，我們預計我們的服務部門仍將處於中個位數，但從成長率的角度來看將持續改善。從有機成長的角度來看，我們也預期該業務的專案方面將從小幅下降轉向低個位數。

Drivers of that will be our Asia-Pac business and our international business, which are down in the first half that we would expect Tom to be up and continue to work through sort of that new backlog that Russ talked about in the back half of the year on the specialty side of the business, our service there was it was actually up and showed organic growth in the first half of the year mid-single digits, and we would expect that to continue in the back half of the year as well.

推動這一趨勢的因素將是我們的亞太業務和國際業務，這些業務在上半年有所下降，但我們預計湯姆會崛起並繼續解決 Russ 在下半年談到的新積壓工作。 ，我們的服務實際上有所上升，並在上半年顯示出個位數的自然成長，我們預計這種情況在下半年也將持續。

Our project business was down significantly. I think we touched on it on the call on low double digit 10s. And we would expect that to improve in the back half of the year as well. And we have we expect that business for the project on the specialty business to actually get to low single digit growth as well in the back half of the year.

我們的專案業務大幅下降。我想我們在低兩位數 10 的電話會議中談到了這一點。我們預計今年下半年情況也會有所改善。我們預計，專業業務項目的業務在今年下半年實際上也將實現低個位數成長。

Okay. So like around the EBIT, you expect every segment for every quarter to be positive organic or will specialty remain negative organic in the third and then flip positive in the fourth on specialty ?

好的。因此，就像圍繞息稅前利潤一樣，您預計每個季度的每個細分市場都會出現積極的有機變化，或者專業產品在第三個季度仍保持負有機狀態，然後在第四個季度將專業產品變成正值？

Specialty should be flat to slightly up from an organic growth standpoint in the third quarter.

從第三季有機成長的角度來看，特種業務應該持平或略有上升。

Okay. That's super helpful. And then just lastly, on the acquisition on the 3% contribution for safety services. Is that should that be relatively consistent as we move through the rest of the year?

好的。這非常有幫助。最後，關於收購中 3% 的安全服務貢獻。隨著我們今年剩餘時間的推移，這是否應該相對一致？

Yes, we annualize against the elevated transaction. You think about a 3% impact.

是的，我們對增加的交易進行年度計算。你想想 3% 的影響。

Okay, great. Thanks a lot for the color.

好的，太好了。非常感謝你的顏色。

Appreciate, Steve. Thanks.

感謝，史蒂夫。謝謝。

Ashish Sabadra, RBC Capital Markets.

Ashish Sabadra，加拿大皇家銀行資本市場。

Hi, this is David Paige on for Ashish. I just had a question on the elevated acquisition and can you tell us maybe some early learnings that you have from them, some of the positive surprises on anything around and then also anything around how they're looking?

大家好，我是阿什許的大衛‧佩奇。我只是對收購的增加有疑問，您能否告訴我們您從他們那裡得到的一些早期經驗，周圍的一些積極的驚喜以及他們的外觀？

Thank you. Our -- I would say that the positives are the quality of the leadership team and maybe the depth of the leadership team from our North American home safety services segment later went on like a one week, you know, kind of tour them with their team and just came back from really raving about the quality of the people that he had the opportunity to interact with.

謝謝。我想說，積極的一面是領導團隊的素質，也許是我們北美家庭安全服務部門的領導團隊的深度，後來就像一周一樣，你知道，與他們的團隊一起參觀了他們剛剛回來，對他有機會與之互動的人們的素質讚不絕口。

And, you know, he even commented about how a young apprentice um, he showed up on one of their one of their customer sites and didn't have safety glasses on and wanted to one of their apprentices approach them and ask them to please put safety glasses on.

而且，你知道，他甚至評論了一名年輕的學徒如何出現在他們的一個客戶網站上，並且沒有戴安全眼鏡，並希望他們的一名學徒接近他們並要求他們戴上安全眼鏡。眼鏡。

So I just spoke a lot to the culture of the company and the investment that they're making in their field leaders. So I'd say that's all been really positive. I don't know that I would say that there's anything any net necessarily surprises.

所以我只是談論了很多公司的文化以及他們對領域領導者的投資。所以我想說這一切都是非常正面的。我不知道我是否會說有任何網路必然令人驚訝的事情。

You know, we bought the business from a private equity firm and I think that some of the things that you would expect when you when you know, sponsored tries to polish up the business and get ready for get it ready for sale came through and done in that, you know, I guess nobody's ever surprised by that. You might be surprised what closet it's in, but tell you other natural not really surprise.

你知道，我們從一家私募股權公司購買了該業務，我認為，當你知道贊助商試圖完善該業務並準備好出售時，你所期望的一些事情已經完成並完成了在這一點上，你知道，我想沒有人對此感到驚訝。您可能會對它在哪個壁櫥裡感到驚訝，但告訴您其他自然並不真正令人驚訝。

So I'd say it's a business as usual, and we're really fired up about the elevated team joining the EPI. family.

所以我想說一切照舊，我們對高階團隊加入 EPI 感到非常興奮。家庭。

Great. Thank you.

偉大的。謝謝。

And that concludes our Q&A session. I will now turn the conference back over to Russ Becker for closing remarks.

我們的問答環節到此結束。現在我將把會議轉回拉斯貝克爾作閉幕詞。

Thank you so much. And in closing, I would really again like to thank all of our team members for their continued support in and dedication to our business. I am truly grateful for what each and every one of you do on a daily basis and your efforts really truly are amazing.

太感謝了。最後，我真的要再次感謝我們所有團隊成員對我們業務的持續支持和奉獻。我衷心感謝你們每一個人每天所做的事情，你們的努力確實令人驚嘆。

I would also like to thank our long-term shareholders as well as those that have recently joined us for their support. And we appreciate your ownership of EPI. and look forward to updating you on our progress throughout the remainder of the year. So thank you, everybody.

我還要感謝我們的長期股東以及最近加入我們的股東的支持。我們感謝您對 EPI 的所有權。並期待向您通報我們在今年剩餘時間內取得的最新進展。所以謝謝大家。

Well, ladies and gentlemen, that concludes today's call and thank you all for joining. You may now disconnect.

女士們、先生們，今天的電話會議到此結束，感謝大家的加入。您現在可以斷開連線。