Atmus Filtration Technologies Inc (ATMU) 2024 Q1 法說會逐字稿

Hello, and thank you for standing by. At this time, I would like to welcome everyone to Atmus Filtration Technologies' first quarter 2024 earnings call. (Operator Instructions) I would now like to turn the conference over to Todd Chirillo, Executive Director of Investor Relations. Please go ahead.

您好，感謝您的支持。此時此刻，我謹歡迎大家參加 Atmus Filtration Technologies 的 2024 年第一季財報電話會議。（操作員指示）我現在想將會議轉交給投資者關係執行董事 Todd Chirillo。請繼續。

Thank you, operator. Good morning, everyone and welcome to the Atmus Filtration Technologies first quarter 2024 earnings call. On the call today, we have Steph Disher, Chief Executive Officer; and Jack Kienzler, Chief Financial Officer.

謝謝你，接線生。大家早安，歡迎參加 Atmus Filtration Technologies 2024 年第一季財報電話會議。今天的電話會議由執行長 Steph Disher 主持。和財務長傑克金茨勒。

Certain information presented today will be forward-looking and involve risks and uncertainties that could materially affect expected results. Please refer to our slides on our website for the disclosure of the risks that could affect our results and for a reconciliation of any non-GAAP measures referred to on our call. For additional information, please see our SEC filings and the Investor Relations pages available on our website at atmus.com.

今天提供的某些資訊將具有前瞻性，涉及可能對預期結果產生重大影響的風險和不確定性。請參閱我們網站上的幻燈片，以了解可能影響我們結果的風險揭露以及我們電話會議中提到的任何非公認會計原則措施的協調。如需了解更多信息，請參閱我們的 SEC 文件以及我們網站 atmus.com 上的投資者關係頁面。

Now I'll turn the call over to Steph.

現在我將把電話轉給史蒂芬。

Thank you, Todd, and good morning, everyone. We delivered strong performance in the first quarter. On the call today, I’ll provide an update on our performance in the quarter. Our outlook for the year and provide some comments on delivery of our growth strategy. Jack will then provide additional details regarding our financial performance. Before I discuss the quarterly performance, I’d like to acknowledge the significant milestone of Atmus becoming a fully independent company on March 18.

謝謝托德，大家早安。我們在第一季取得了強勁的業績。在今天的電話會議上，我將提供本季業績的最新情況。我們對今年的展望並對我們的成長策略的實施提供了一些評論。然後，傑克將提供有關我們財務業績的更多詳細資訊。在討論季度業績之前，我想承認 Atmus 於 3 月 18 日成為一家完全獨立的公司，這是一個重要的里程碑。

On February 14, Cummins announced an exchange offer, whereby Cummins shareholders could exchange all or a portion of Cummins common stock for shares of Atmus. Investors showed significant interest in the offer with the transaction approximately 12 times oversubscribed. The divestiture of Atmus shares by Cummins was completed on March 18 and resulted in the full separation of Atmus. With the successful completion of the exchange offer, all former Cummins appointed Directors have resigned from the Atmus Board of Directors and two new independent directors, Diego Donoso, and Stuart Taylor have been appointed to the Board.

2 月 14 日，康明斯宣布了一項交換要約，康明斯股東可以將全部或部分康明斯普通股換成 Atmus 股票。投資者對此次要約表現出了濃厚的興趣，該交易獲得了約 12 倍的超額認購。康明斯對 Atmus 股份的剝離已於 3 月 18 日完成，導致 Atmus 完全分離。隨著交換要約的成功完成，所有前康明斯任命的董事均已辭去Atmus 董事會職務，兩名新的獨立董事迭戈·多諾索(Diego Donoso) 和斯圖爾特·泰勒(Stuart Taylor) 已被任命為董事會成員。

A majority of the Atmus Board of Directors is now independent, and I'm excited to be working with the Board, as we continue to accelerate growth and deliver long-term value for our shareholders. Now let's turn to the first quarter financial results and our current outlook for 2024.

Atmus 董事會的大多數成員現在都是獨立的，我很高興能與董事會合作，因為我們將繼續加速成長並為股東創造長期價值。現在讓我們來看看第一季的財務表現和我們目前對 2024 年的展望。

We delivered strong financial performance in the first quarter. Sales were $427 million compared to $419 million during the same period last year, an increase of approximately 2%. Adjusted EBITDA in the first quarter was $80 million or 18.8% compared to $79 million or 18.8% in the prior period. Adjusted EBITDA for the quarter excludes $6 million of one-time stand-alone costs and $4 million for the same period last year. Adjusted earnings per share was $0.60 in the first quarter of 2024 and adjusted free cash flow was negative $13 million. Adjusted free cash flow excludes $6 million of one-time separation-related items.

我們在第一季取得了強勁的財務表現。銷售額為 4.27 億美元，較去年同期的 4.19 億美元成長約 2%。第一季調整後 EBITDA 為 8,000 萬美元，即 18.8%，而上一季調整後 EBITDA 為 7,900 萬美元，即 18.8%。本季調整後 EBITDA 不包括 600 萬美元的一次性獨立成本和去年同期的 400 萬美元。2024 年第一季調整後每股收益為 0.60 美元，調整後自由現金流為負 1,300 萬美元。調整後的自由現金流不包括 600 萬美元的一次性離職相關項目。

Now let me provide some insight into our global market. As expected, we saw softer freight activity during the first quarter. However, our continued market share gains are offsetting some of the market weakness. Demand in the first-fit markets has started to show signs of slowness in the US, in India markets remain robust, while in China, the market continues to fall short of expectations.

現在讓我提供一些對我們全球市場的見解。正如預期的那樣，我們看到第一季貨運活動疲軟。然而，我們持續的市佔率成長正在抵消一些市場疲軟。美國首批適配市場的需求已開始顯示出放緩跡象，印度市場依然強勁，而中國市場繼續低於預期。

Looking ahead to our outlook for global markets, I will start with aftermarket for both on-highway and off-highway. In North America, we saw the cash freight index down 5% in the first quarter compared to the prior year. The rate of decline slowed through the quarter with the month of March down 3.6% year-over-year. While we are expecting year-over-year freight activity to gradually improve through the balance of the year, we are still experiencing year-over-year declines and have not yet seen positive freight activity compared to the prior period.

展望我們對全球市場的展望，我將從公路和非公路的售後市場開始。在北美，我們看到第一季現金貨運指數比去年同期下降了 5%。本季下降速度放緩，3 月年減 3.6%。雖然我們預計今年剩餘的貨運活動將逐步改善，但與去年同期相比，貨運活動仍然出現同比下降，並且尚未看到積極的貨運活動。

In global off-highway markets, we continue to see strength in North American construction for both residential and non-residential construction, partially aided by government infrastructure spending. Economic conditions in Europe continue to be depressed with weakness in construction activity. And in the Asia Pacific region, we are seeing low utilization rates across a number of our key end-markets.

在全球非公路市場，我們持續看到北美住宅和非住宅建築的強勁勢頭，部分得益於政府基礎設施支出。由於建築活動疲軟，歐洲經濟狀況持續低迷。在亞太地區，我們發現許多主要終端市場的利用率較低。

Overall, we expect aftermarket for on-highway and off-highway to be flat to up 2% during the year, down slightly from our previous guidance of flat to up 3%. Let us turn to our first-fit markets. In the US, we are anticipating declines to primarily impact the second half of 2024. We are modestly raising our outlook for US heavy-duty truck to be down 7% to 12% for the full year. From our previous guidance of down 10% to 15%. In medium-duty truck, our outlook remains unchanged at flat to down 5%.

總體而言，我們預計年內公路和非公路售後市場將持平至成長 2%，略低於我們先前持平至成長 3% 的指引。讓我們轉向最適合的市場。在美國，我們預計下降將主要影響 2024 年下半年。我們適度上調美國重型卡車全年銷量下降 7% 至 12% 的預期。從我們之前的指導值下降 10% 到 15%。在中型卡車方面，我們的前景保持持平至下降 5% 不變。

In China, we expect weakness to persist and demand for trucks in India is expected to remain robust, driven by strong on-highway performance. While the outlook for our markets is mixed, we continue to execute on our growth plans and expand our market share in both aftermarket and first-fit. Our revenue guidance is unchanged at down 1% to up 3%, with global sales in the range of $1.61 billion to $1.675 billion. We expect continued strong operational performance and to deliver adjusted EBITDA margins of 18.25% to 19.25%, unchanged from prior guidance.

在中國，我們預計疲軟將持續，而在強勁的公路表現的推動下，印度對卡車的需求預計將保持強勁。儘管我們的市場前景好壞參半，但我們將繼續執行我們的成長計劃，並擴大我們在售後市場和首次安裝市場的市場份額。我們的營收指引維持下降 1% 至成長 3% 不變，全球銷售額在 16.1 億美元至 16.75 億美元之間。我們預計營運業績將持續強勁，調整後的 EBITDA 利潤率為 18.25% 至 19.25%，與先前的指引持平。

Additionally, adjusted EPS is unchanged from our prior outlook and anticipated to be in a range of $2.10 to $2.35. As we have separated from Cummins, we have incurred separation costs and cash impacts associated with establishing a stand-alone company. These costs and cash flows are onetime in nature. We want to be transparent and highlight those items to enable a clear understanding of the ongoing performance and cash generation of our business. In relation to cash flow outlook, I want to highlight a onetime cash outflow, which is estimated to be $30 million in 2024. This impact arises as a result of a change in working capital.

此外，調整後每股收益與我們先前的預期相同，預計在 2.10 美元至 2.35 美元之間。由於我們與康明斯分離，我們產生了與建立獨立公司相關的分離成本和現金影響。這些成本和現金流本質上是一次性的。我們希望保持透明並突出顯示這些項目，以便清楚地了解我們業務的持續績效和現金產生。關於現金流前景，我想強調一次性現金流出，預計 2024 年將達到 3,000 萬美元。這種影響是由於營運資金的變動而產生的。

Cummins previously processed our payroll on our behalf, and we received 60 day terms. As we transition to managing our own payroll directly, this cash will flow innately upon payment to employees. Now I would like to take a moment to share the progress we have made on implementing our growth strategy. As a reminder, there are four pillars of our growth strategy.

康明斯之前代表我們處理了薪資單，我們收到了 60 天的期限。當我們過渡到直接管理自己的薪資單時，這些現金將自然地在向員工付款時流動。現在我想花點時間分享我們在實施成長策略方面的進展。提醒一下，我們的成長策略有四大支柱。

Our first pillar is to grow share in first step. We are a leader in fuel filtration and crankcase ventilation products, and we are focused on growing this leadership position with global OEM customers. We are winning with the winners and have continued to secure Cummins new vehicle platforms, we are also accelerating growth with other leading global OEMs.

我們的第一個支柱是第一步增加份額。我們是燃油過濾和曲軸箱通風產品的領導者，我們致力於在全球 OEM 客戶中鞏固這一領導地位。我們與贏家一起共贏，並繼續確保康明斯新車平台的安全，我們也與其他全球領先的原始設備製造商一起加速成長。

We have recently won the fuel filtration business of a global OEM for their European and North American business, and we are actively pursuing new customers who were out of reach to us as part of Cummins. Our second and third pillar are interrelated and focus on accelerating profitable growth in the aftermarket and transforming our supply chain.

我們最近贏得了一家全球 OEM 的歐洲和北美業務的燃油過濾業務，我們正在積極尋找康明斯無法接觸到的新客戶。我們的第二和第三個支柱是相互關聯的，重點是加速售後市場的獲利成長和供應鏈轉型。

We are relentlessly focused on our customers and providing the right product when and where it is needed. Our agility allows us to continue gaining share in the aftermarket with our world-class Fleetguard products. As a key component of our agility is the continued transformation of our global distribution capabilities to provide our customers with industry-leading product availability. Earlier this year, we inaugurated our southern distribution center near Dallas, Texas, and we recently opened our newest distribution facility in Singapore.

我們堅持不懈地以客戶為中心，並在需要的時間和地點提供合適的產品。我們的敏捷性使我們能夠憑藉世界一流的弗列加產品繼續贏得售後市場份額。我們敏捷性的關鍵組成部分是我們全球分銷能力的持續轉型，以便為我們的客戶提供業界領先的產品可用性。今年早些時候，我們在德州達拉斯附近開設了南部配送中心，最近在新加坡開設了最新的配送中心。

We now have coverage for over 80% of our volume being distributed through dedicated Atmus warehouse facilities. We are on track to establish additional centers in Europe throughout 2024. We are also focused on driving efficiencies through our purchasing organization and investing in automation in our manufacturing operations. These focus areas will support continued reduction of our operating costs. We have demonstrated delivery of our transformation initiatives through expansion of our adjusted EBITDA margin 300 basis points during 2023.

現在，我們 80% 以上的貨量都是透過專門的 Atmus 倉庫設施進行配送的。我們預計在 2024 年在歐洲建立更多中心。我們也致力於透過採購組織提高效率並投資於製造業務的自動化。這些重點領域將支持我們持續降低營運成本。我們透過在 2023 年期間將調整後的 EBITDA 利潤率擴大 300 個基點，展示了我們的轉型計劃的交付。

Our guidance for 2024 reflects continued momentum, as we execute on our strategy. Our fourth pillar is to expand into industrial filtration markets. We intend to pursue this growth inorganically, and we see a strong pipeline of opportunities, which our team is continuously evaluating. We will take a disciplined programmatic approach with a focus on creating long-term shareholder value.

我們對 2024 年的指導反映了我們執行策略時的持續動能。我們的第四個支柱是擴展到工業過濾市場。我們打算以無機方式追求這種成長，我們看到了一系列強大的機會，我們的團隊正在不斷評估這些機會。我們將採取嚴格的規劃方法，重點在於創造長期股東價值。

Our capital allocation priorities will continue to reflect our focus on growing our business, both organically and inorganically. We are also assessing our approach to returning cash to shareholders now that we are an independent company. I am proud of our Atmus team, who delivered another strong quarter of performance. As a fully independent company, we will accelerate our growth strategy as we move through 2024.

我們的資本配置優先事項將繼續反映我們對有機和無機業務成長的關注。既然我們是一家獨立公司，我們還在評估向股東返還現金的方法。我為我們的 Atmus 團隊感到自豪，他們在本季度又取得了強勁的業績。作為一家完全獨立的公司，我們將在 2024 年加快我們的成長策略。

Now I will turn the call over to Jack who will discuss our financial results in more detail.

現在我將把電話轉給傑克，他將更詳細地討論我們的財務表現。

Thank you, Steph, and good morning everyone. We continued to deliver strong financial performance in the first quarter. Sales were $427 million compared to $419 million during the same period last year, an increase of approximately 2%. The increase in sales was primarily driven by pricing of approximately 2% and the favorable impact of currency, partially offset by a modest decrease in volume as market share gains continued to counterbalance challenging conditions across many of our markets.

謝謝你，史蒂芬，大家早安。第一季我們持續實現強勁的財務業績。銷售額為 4.27 億美元，較去年同期的 4.19 億美元成長約 2%。銷售額的成長主要是由約 2% 的定價和貨幣的有利影響推動的，但由於市場份額的成長繼續抵消了我們許多市場的挑戰性條件，銷售的小幅下降部分抵消了銷售額的成長。

Gross margin for the first quarter was $112 million, an increase of $2 million compared to the first quarter of 2023. In addition to pricing, we also benefited from lower commodities which more than offset the impact of higher freight and manufacturing costs, along with lower volumes. Selling, administrative and research expenses for the first quarter were $53 million, an increase of $5 million over the same period in the prior year. The increase was primarily driven by higher people-related and consulting costs, as we continue to stand up our team and separate our functions from Cummins.

第一季毛利率為1.12億美元，較2023年第一季增加200萬美元。除了定價之外，我們還受益於商品價格的下降，這足以抵消運費和製造成本上升以及銷售下降的影響。第一季的銷售、管理和研究費用為 5,300 萬美元，比上年同期增加 500 萬美元。這一成長主要是由於人員相關成本和諮詢成本的增加，因為我們繼續組建我們的團隊並將我們的職能從康明斯中分離出來。

Joint venture income was $10 million in the first quarter, an increase of $2 million from 2023, primarily due to strong performance at our joint venture in India. This resulted in adjusted EBITDA in the first quarter of $80 million or 18.8% compared to $79 million or 18.8% in the prior period. Adjusted EBITDA for the quarter excludes $6 million of one-time stand-alone costs and excludes $4 million for the same period last year.

第一季合資企業營收為 1,000 萬美元，比 2023 年增加 200 萬美元，這主要歸功於我們在印度的合資企業的強勁業績。這導致第一季調整後 EBITDA 為 8,000 萬美元，即 18.8%，而上一季為 7,900 萬美元，即 18.8%。本季調整後 EBITDA 不包括 600 萬美元的一次性獨立成本，也不包括去年同期的 400 萬美元。

We believe these costs will be in a range of $10 million to $20 million in 2024, an increase from our prior guidance of $5 million to $15 million. These one-time costs primarily related to the establishment of functions previously co-mingled with Cummins, such as information technologies, distribution centers and human resources.

我們認為，到 2024 年，這些成本將在 1,000 萬美元至 2,000 萬美元之間，比我們先前指導的 500 萬美元至 1,500 萬美元有所增加。這些一次性成本主要與建立先前與康明斯混合的職能有關，例如資訊科技、配送中心和人力資源。

Adjusted earnings per share was $0.60 in the first quarter of 2024 compared to $0.67 last year. The decrease was primarily due to higher interest expense incurred from debt issued at our IPO in May of 2023. Adjusted free cash flow was negative $13 million this quarter compared to $37 million in the prior year. The higher cash usage was primarily related to increased working capital requirements and the payment of incentive compensation for strong performance achieved in 2023.

2024 年第一季調整後每股收益為 0.60 美元，而去年為 0.67 美元。減少的主要原因是我們 2023 年 5 月 IPO 發行的債務所產生的利息費用增加。本季調整後自由現金流為負 1,300 萬美元，去年同期為 3,700 萬美元。現金使用量增加主要與營運資金需求增加以及 2023 年取得的強勁業績支付激勵薪酬有關。

Free cash flow has been adjusted at $3 million for capital expenditures related to our separation from Cummins compared to $1 million in the previous year. As Steph mentioned earlier in the call, we are also adjusting free cash flow for working capital inefficiencies associated with the move from intercompany settlement terms with Cummins to stand-alone practices. In the first quarter, this adjustment is $3 million and relates to Cummins processing payroll on our behalf prior to the full separation and we reimburse them on 60-day terms consistent with historical practices.

由於與康明斯分離相關的資本支出，自由現金流已調整為 300 萬美元，而前一年為 100 萬美元。正如史蒂芬之前在電話會議中提到的那樣，我們還在調整自由現金流，以應對因從與康明斯的公司間結算條款轉向獨立做法而導致的營運資金效率低下。第一季的調整金額為 300 萬美元，與完全離職前康明斯代表我們處理工資相關，我們按照歷史慣例按 60 天期限償還工資。

As we take over the payroll process, these cash obligations are funded as incurred. We expect these inefficiencies to impact us through the end of the third quarter of this year. The effective tax rate for the first quarter of 2024 was 22% compared to 23.7% in 2023. The decrease was driven by a change in the mix of earnings between US and foreign operations. Now let us turn to the continued strength of our balance sheet.

當我們接管薪資流程時，這些現金義務將在發生時提供資金。我們預計這些低效率問題將在今年第三季末對我們產生影響。2024 年第一季的有效稅率為 22%，而 2023 年為 23.7%。這一下降是由於美國和外國業務之間的獲利結構發生變化所致。現在讓我們轉向資產負債表的持續強勢。

We ended the quarter with $149 million of cash on hand, combined with the full availability of our $400 million revolving credit facility, we have $549 million of available liquidity. Our cash position and continued strong performance during the first quarter of 2024 has resulted in a net debt to adjusted EBITDA ratio of 1.5 times for the trailing 12 months ended March 31. Our balance sheet provides us with operational flexibility as we focus on value creation, and delivering total shareholder value by deploying capital for continued organic growth and strategic inorganic initiatives.

截至本季末，我們手頭現金為 1.49 億美元，再加上 4 億美元循環信貸額度已全部可用，我們擁有 5.49 億美元的可用流動資金。我們的現金狀況和 2024 年第一季持續強勁的業績導致截至 3 月 31 日的過去 12 個月的淨債務與調整後 EBITDA 比率為 1.5 倍。我們的資產負債表為我們提供了營運靈活性，因為我們專注於價值創造，並透過部署資本實現持續有機成長和策略性無機措施來實現股東總價值​​。

In closing, I want to thank our global team for their hard work and dedication as we begin our first year as a fully independent company. I am looking forward to continuing our momentum and delivering on our strategy throughout the year.

最後，我要感謝我們的全球團隊在我們作為完全獨立公司的第一年開始時的辛勤工作和奉獻精神。我期待著全年繼續保持我們的勢頭並實現我們的戰略。

Now we will take your questions.

現在我們將回答您的問題。

(Operator Instructions) Rob Mason, Baird.

（操作員說明）Rob Mason，Baird。

Tami Zakaria, J.P. Morgan.

塔米·扎卡里亞，摩根大通。

Hi, good morning. Thank you so much. So the share gain you mentioned in the quarter, can you provide some color? Is that on the OE side or aftermarket side? Is it through coming from new customers or increase in share of wallet gains? Any color on the share gain comments you made?

早安.太感謝了。那麼您提到的本季的份額增長，您能提供一些資訊嗎？是在原廠設備方面還是在售後市場方面？是來自新客戶還是錢包收益份額的增加？您對分享收益的評論有什麼看法嗎？

Hi, Tami. Good morning. Thanks for the question. I would say that the share gains are primarily coming in the aftermarket that our share gains there in the aftermarket more than offset any headwinds we saw in market conditions. So that's primarily where we've seen the share gain.

嗨，塔米。早安.謝謝你的提問。我想說，份額的成長主要來自售後市場，我們在售後市場的份額成長足以抵消我們在市場條件下看到的任何不利因素。這就是我們看到份額成長的主要原因。

Got it. That's helpful. And then my second question is, can you comment on whether you see any opportunity for your current products, especially in the coolant side to be used in the data center end-market in light of the liquid cooling technology that these data centers require?

知道了。這很有幫助。我的第二個問題是，根據資料中心所需的液體冷卻技術，您能否評論一下您目前的產品是否有機會，特別是在資料中心終端市場使用的冷卻劑方面？

Yeah. So I guess, Tami, to answer your question broadly, we certainly see opportunity for growth. I think this week, on their call, Cummins talked about the significant growth in the power gen markets strongly linked to data centers.

是的。所以我想，塔米，要廣泛地回答你的問題，我們當然看到了成長的機會。我認為康明斯在本週的電話會議上談到了與資料中心密切相關的發電市場的顯著成長。

Certainly, we have product opportunities, both filtration and coolant opportunities across that market. And if we see it as a strong growth market, I think I would just say that many of those applications are standby applications. We saw direct drive as much recurring revenue opportunities. But certainly, we see strong tailwinds in that market that we will avail ourselves of in both our filtration product range and coolant.

當然，我們在該市場上有產品機會，包括過濾和冷卻劑機會。如果我們將其視為一個強勁成長的市場，我想我會說其中許多應用程式都是備用應用程式。我們看到了直接驅動和經常性收入機會。但可以肯定的是，我們看到了該市場的強勁推動力，我們將在過濾產品系列和冷卻劑方面利用這一優勢。

Got it. Thank you so much.

知道了。太感謝了。

Rob Mason, Baird.

羅布梅森，貝爾德。

Yeah, can you hear me?

是的，你聽得到我說話嗎？

Yeah. Hi, Rob. Good morning.

是的。嗨，羅布。早安.

Hi. Sorry about that. I'm just curious how the first quarter may have compared to your internal plan. I know you don't provide formal first or quarterly guidance, but I was just curious how it compared to internal plan and if there's any thoughts you can maybe give us on how you think about seasonality as we start into the second quarter.

你好。對於那個很抱歉。我只是好奇第一季與你們的內部計劃相比如何。我知道您沒有提供正式的第一季或季度指導，但我只是很好奇它與內部計劃相比如何，以及您是否可以在進入第二季度時向我們提供您對季節性的看法。

Absolutely. Thanks, Rob. So firstly, I would say slightly ahead of expectations on our first quarter mostly driven by our market share gains in the aftermarket that I spoke about. I'd say our price expectations were broadly in line, market expectations overall broadly in line, but certainly, I think slightly ahead because of the share growth in aftermarket would be how I would encapsulate the first quarter.

絕對地。謝謝，羅布。首先，我想說，我們第一季的業績略高於預期，這主要是由於我們在售後市場的市佔率成長所致。我想說，我們的價格預期大致一致，市場預期總體大致一致，但當然，我認為稍微領先，因為售後市場的份額增長將是我對第一季的概括。

As we look ahead, I've given a bit of an outline to the markets and how I see 2024 playing out. I'll just start with first-fit markets for a moment. Really the only change since our last guidance is the increase in our guidance on the heavy-duty truck in the US markets, aligned with where our customers are seeing it really, but it moved up from down 10% to 15% up to down 7% to 12% with a midpoint of 9.5%. So that's really the only change in the first-fit market. I would say we see that impact of declining markets in first fit really starting to impact in the second half. It's a little earlier than that in Europe, but we've got less exposure on first-fit markets in Europe.

展望未來，我對市場進行了一些概述，並闡述了我對 2024 年的看法。我先從最適合的市場開始。事實上，自我們上次指導以來唯一的變化是我們對美國市場重型卡車的指導增加了，這與我們客戶的真實看法一致，但它從下降 10% 上升到 15%，最高下降 7 % 至12 %，中點為9.5%。所以這確實是首次適配市場的唯一變化。我想說的是，我們看到市場首次下滑的影響真正開始在下半年產生影響。比歐洲早一點，但我們在歐洲的優先市場上的曝光較少。

And so that's the first-fit side. If I turn to aftermarket, I talked about -- this is predominantly -- I guess, the US is a heavy market for us in this regard. I talked about the cash freight index through the first quarter, down 5% year over year. We certainly saw that moderate throughout the quarter and the March month was down more like 3%. So we are certainly seeing freight activity starting to improve year over year, and the comparables in the second half of the year, as you know, on aftermarket because of the significant destocking through 2023 are much lower for us.

這是最適合的一面。如果我轉向售後市場，我談到——這主要是——我想，在這方面，美國對我們來說是一個重要的市場。我談到第一季的現金貨運指數年減了5%。我們確實看到整個季度的情況溫和，3 月下降了 3% 左右。因此，我們肯定會看到貨運活動開始逐年改善，正如您所知，由於 2023 年之前大幅去庫存，下半年的可比價格對我們來說要低得多。

That's helpful. Just as a follow-up, I noticed there was a revision to the separation cost outlook for the year. How are you thinking about -- as we go through this year, completing all those activities or what might extend beyond 2024 -- just maybe the reason the cost went up this year?

這很有幫助。作為後續行動，我注意到對今年的離職成本前景進行了修訂。您如何看待——當我們經歷今年時，完成所有這些活動或可能延續到 2024 年之後的活動——這可能是今年成本上漲的原因？

Yeah. Thanks, Rob. I'll just give some context about the overall separation, where we are on that journey and what we see ahead of us. And then I'll let Jack talk to the sequential story and expense on cost separation costs. So I just -- it's been a significant unstacking as we step out of Cummins.

是的。謝謝，羅布。我將簡單介紹整體分離的背景、我們在這段旅程中所處的位置以及我們對未來的看法。然後我會讓傑克談談連續的故事和成本分離成本的費用。所以我只是——當我們走出康明斯時，這是一次重大的清理工作。

Obviously, the IPO in May of 2023, we completed the full separation from an ownership perspective just here in the quarter. And we have a number of transition service agreements in place with Cummins to continue to provide a level of services.

顯然，2023 年 5 月的 IPO，我們在本季就完成了從所有權角度的完全分離。我們與康明斯簽訂了多項過渡服務協議，以繼續提供一定程度的服務。

The original approach to those services was that I would run no longer than 24 months from IPO. We are about 55% of the way through those transition services agreements or winding them off, if you like. A significant amount of that happened in the first quarter of 2024. And we expect to be majorly done through by the end of 2024 effectively.

最初提供這些服務的方法是，我的任期不會超過 IPO 後的 24 個月。如果您願意的話，我們已經完成了這些過渡服務協議的大約 55% 或將其終止。其中很大一部分發生在 2024 年第一季。我們預計到 2024 年底將主要有效完成。

I'll let Jack just talk to what drove the revision for the 2024 cost and the timing of this.

我會讓 Jack 談談推動 2024 年成本修訂的原因以及修訂的時間安排。

Yeah. Thanks, Steph. In terms of the revision, it's really pulsed by timing of certain projects, Rob, in this case, largely associated with IT systems and ensuring we are balancing -- switching the go-live on those systems with risk mitigation. And obviously, there is a cost settlement there, but I want to make sure we get the transition right in order to optimize the business moving forward.

是的。謝謝，史蒂芬。就修訂而言，它實際上是由某些項目的時間安排決定的，Rob，在這種情況下，很大程度上與IT 系統相關，並確保我們保持平衡- 通過降低風險來切換這些系統的上線。顯然，那裡有一個成本結算，但我想確保我們得到正確的過渡，以優化未來的業務。

In terms of sequential move, as you noted, it was $6 million in the first quarter, which I would just say indicates that the majority of the anticipated 2024 expenses were incurred in that first quarter, and we should see a moderation or a tapering as we move sequentially through the year. And again, from a comparison standpoint, the one-time costs that we incurred last year were about $29 million, and that compares to the range here of $10 million to $20 million, which coincides I would say largely with the progress of 55% that Steph highlighted. We do anticipate to be substantially through that by the end of 2024 with really one more distribution center to go inside of 2025.

就連續變動而言，正如您所指出的，第一季為600 萬美元，我想說的是，這表明2024 年預期費用的大部分都是在第一季產生的，我們應該看到適度或逐漸減少我們在一年中按順序移動。再次，從比較的角度來看，我們去年產生的一次性成本約為 2900 萬美元，而這裡的範圍為 1000 萬至 2000 萬美元，我想說這很大程度上與 55% 的進度相吻合。史蒂芬強調。我們確實預計到 2024 年底將基本完成這項任務，並在 2025 年內再開設一個配送中心。

Very good. Thank you.

非常好。謝謝。

Thanks, Rob.

謝謝，羅布。

Jerry Revich, Goldman Sachs.

傑瑞·雷維奇，高盛。

Hi. Yes. Good morning, everyone.

你好。是的。大家，早安。

Good morning, Jeff.

早安，傑夫。

I wonder if I can probably get an update on the M&A landscape. You folks are coming up on a year as a public company, and I'm wondering what's the range of M&A opportunities for you folks over the next, call it, 12 months to 18 months in terms of how much capital you expect to put to work and what that might look like based on your pipeline as you sit here today?

我想知道我是否可以獲得有關併購情況的最新資訊。你們即將成為一家上市公司，我想知道你們接下來的併購機會範圍是多少，稱之為 12 個月到 18 個月，就你們期望投入多少資本而言工作以及根據您今天坐在這裡的管道可能會是什麼樣子？

Thanks, Jerry. As you know, an important part of our strategy is expanding into industrial filtration markets. We have an established team that are working that significantly. We've conducted all of our analysis of those markets where we see the opportunity, obviously attractive market for us and the opportunity for us to have a compelling and winning proposition.

謝謝，傑瑞。如您所知，我們策略的一個重要部分是擴展到工業過濾市場。我們擁有一支成熟的團隊，正在積極開展工作。我們對那些我們看到機會的市場進行了所有分析，這些市場對我們來說顯然很有吸引力，有機會讓我們擁有令人信服且獲勝的主張。

We're assessing a strong pipeline of targets. Our team are continuously assessing that as we speak. We've worked through assessment on a number of those and have decided not to proceed with the numbers so far. And really, as always, with M&A, difficult to predict exactly when that opportunity will present itself. The way I see this playing out is consistent with what I've discussed previously. It is really a programmatic approach to acquisitions around that $100 million, $150 million acquisition price, I guess in terms of the capital outlay for each transaction really important that we get the right first step underway.

我們正在評估一系列強大的目標。正如我們所說，我們的團隊正在不斷評估這一點。我們已經對其中一些進行了評估，並決定到目前為止不繼續處理這些數字。事實上，與往常一樣，對於併購，很難準確預測機會何時會出現。我對這種情況的看法與我之前討論的一致。這實際上是一種程序化的收購方式，收購價格約為 1 億美元、1.5 億美元，我想就每筆交易的資本支出而言，這對我們邁出正確的第一步非常重要。

And that at a cadence going forward, you could see us doing one to two, a year as we build out our footprint in industrial filtration. So that's the landscape, as I see it; nothing to report specifically yet. We are working through a strong pipeline of targets very focused on balancing, pivoting our company into attractive growth markets, whilst balancing strong returns to shareholders.

未來，隨著我們在工業過濾領域的發展，您可以看到我們每年做一到兩次。這就是我所看到的風景；目前尚無具體報告。我們正在努力實現一系列強大的目標，這些目標非常注重平衡，將我們的公司轉向有吸引力的成長市場，同時平衡股東的豐厚回報。

Okay. Super. And then as we think about what 2027 US regulations could mean for your business, you have good visibility on engine platforms at this point. Can you talk about the range of content increases that you expect to see on the new specifications?

好的。極好的。然後，當我們思考 2027 年美國法規對您的業務可能意味著什麼時，您此時對引擎平台有很好的了解。您能談談您期望在新規範中看到的內容增加範圍嗎？

And then part of the warranty program that's essentially going to be included, it will be a five-year type warranty on the entire engine platform. So to what extent could you see higher market share as a result of that essentially extended warranty on every truck.

然後，保固計劃的一部分本質上將包括在內，這將是整個引擎平台的五年保固。那麼，由於每輛卡車基本上都延長了保固期，您可以在多大程度上看到更高的市場份額。

Yeah. Thanks, Jerry. I think we are a leader in fuel filtration and crankcase ventilation. We're certainly actively pursuing all opportunities ahead of us to move on to new platforms. And as we look to the change in 2027 emissions, that's been a big focus for our sales team, our OE sales team. We've secured those platforms with Cummins.

是的。謝謝，傑瑞。我認為我們是燃油過濾和曲軸箱通風的領導者。當然，我們正在積極尋求擺在我們面前的所有機會，以轉向新的平台。當我們展望 2027 年排放量的變化時，這一直是我們的銷售團隊、我們的原配設備銷售團隊關注的重點。我們已經透過康明斯確保了這些平台的安全。

And as you would expect, without going into all the specific details of this rising emissions regulations, gives rise to more significant content for filtration products because of the complexity that's required in those filtration needs. So we certainly see that with the 2027 platforms that we're on, and we've had really strong wins in the fuel filtration and crankcase ventilation space.

正如您所期望的，在不深入探討這項不斷提高的排放法規的所有具體細節的情況下，由於這些過濾需求所需的複雜性，過濾產品會產生更重要的內容。因此，我們當然可以看到，透過我們所處的 2027 年平台，我們在燃油過濾和曲軸箱通風領域取得了巨大的勝利。

In terms of your question about warranty and ownership, we see a very high aftermarket retention in that first [INO]. So certainly, the way I would have you think about this is as we see extended periods of warranty, I would expect our aftermarket capture to extend would be the trend I would see associated with that.

關於您關於保固和所有權的問題，我們發現售後市場的保留率非常高[伊諾]。因此，當然，我希望您考慮這一點的方式是，當我們看到延長的保固期時，我預計我們的售後市場佔領將延長，這將是我所看到的與之相關的趨勢。

Thank you.

謝謝。

Joseph O'Dea, Wells Fargo.

約瑟夫‧奧戴，富國銀行。

Hi, good morning everyone. Just wanted to touch on the aftermarket share gains and talk about your approach to that a little bit. I would think in terms of like-for-like replacement, the incumbent has the natural advantage. And so when you're gaining share in the aftermarket, what efforts have been going on there, whether that's introducing new products to more broadly compete what you're doing on the pricing side? And any quantification of how much share you think you're picking up.

嗨，大家早安。只是想談談售後市場份額的成長並談談您對此的方法。我認為在同類替代方面，現任者有天然的優勢。因此，當您在售後市場上獲得份額時，您在售後市場上做了哪些努力，是否是推出新產品以更廣泛地與您在定價方面所做的事情進行競爭？以及您認為自己獲得的份額的任何量化。

Yes. So I would say there is a number of things driving aftermarket share. And as you think about our strategy of accelerating profitable growth in the aftermarket, that pillar, it has a number of focus areas underneath that we've been very disciplined in working on. And we're starting to see those many initiatives, I would say, come to fruition. And so the first is just making sure we've got a highly capable distribution network that is very focused on aftermarket customers and having product availability where we need it.

是的。所以我想說，有很多因素可以推動售後市場份額的成長。當你想到我們加速售後市場利潤成長的策略時，這個支柱，它有許多重點領域，我們一直在非常自律地致力於這些領域。我想說，我們開始看到這些措施取得了成果。因此，第一件事就是確保我們擁有一個非常專注於售後市場客戶的強大分銷網絡，並在我們需要的地方提供產品。

I think I've mentioned this several times before. Previously, our distribution centers were intermingled with Cummins supply chain management. Cummins is predominantly our first-fit market. And so that meant we weren't focusing on our customers in the right way in terms of their availability needs in product.

我想我之前已經多次提到這一點。此前，我們的配送中心與康明斯供應鏈管理混合在一起。康明斯主要是我們的首選市場。因此，這意味著我們沒有以正確的方式關注客戶對產品的可用性需求。

And we've just been able to capture gains because that's actually our customers prefer to have our products. It was just we weren't putting it where they needed it to be. So that's been a big part of driving our share gain. It's been predominantly in the US, I would say, but also we've seen that across other markets across the world.

我們之所以能夠獲得收益，是因為實際上我們的客戶更喜歡我們的產品。只是我們沒有把它放在他們需要的地方。所以這是推動我們份額成長的一個重要部分。我想說，這種情況主要發生在美國，但我們在世界其他市場也看到了這種情況。

So that's the first thing I would say is seeing that come to life. This strategy of winning with the winners and partnered with those that are successful in growing their share. I would say that's playing out in our market share gains in aftermarket as well.

所以我要說的第一件事就是看到它變成現實。這種與贏家共贏並與那些成功擴大份額的人合作的策略。我想說，這也反映在我們售後市場市佔率的成長。

So we see that we're partnered with those that are really capturing share as well, and we are seeing the flow-on benefits of that. In addition, I would say there's a number of other initiatives that we've been pushing on the aftermarket front. We have revamped our branding and marketing around our Fleetguard brand, starting to see that in the filtration science capability that we have that competitors are not able to match.

因此，我們看到我們與那些真正抓住份額的人合作，並且我們看到了由此帶來的持續好處。此外，我想說的是，我們一直在售後市場方面推行許多其他措施。我們圍繞著弗列加品牌改進了品牌和行銷，開始發現我們擁有的過濾科學能力是競爭對手無法比擬的。

And we're starting to see the benefits of that flowing through as awareness increases across our aftermarket. So I wouldn't point to one thing ever in aftermarket. This is about doing a lot of things well. But I was to link it to where is most of it coming from, it's really tailoring that distribution and availability network to drive outcomes for our customers.

隨著售後市場意識的提高，我們開始看到這種好處。所以我不會指出售後市場上的任何一件事。這是要做好很多事情。但我要把它與大部分的來源聯繫起來，它實際上是在定制分銷和可用性網絡，以推動我們客戶的成果。

I appreciate all the details. And then also just wanted to ask on the aftermarket outlook for the year. It seems like the quarter trended in line, maybe even better than anticipated. But if you can comment on that and what aftermarket revenues did for you in the quarter? And then in terms of what you are seeing rest of year that would lead you to think that maybe it's a point lower than what you previously had in terms of the outlook.

我很欣賞所有的細節。然後也只是想問今年的售後前景。該季度的趨勢似乎一致，甚至可能比預期更好。但您能否對此發表評論以及本季售後市場收入為您帶來了什麼？然後，就您今年剩餘時間所看到的情況而言，這會讓您認為這可能比您之前的前景要低一些。

Yes. So I guess without laboring -- I think the quarter in aftermarket was stronger than we expected, largely due to the share gains that I talked about. As we look ahead to the market outlook, we really are, I guess, relying pretty heavily on the external market source of the cash freight index. We've seen that's a pretty reliable source for us as a predictor of the US market and correlated pretty closely with our aftermarket revenues.

是的。所以我想，不用費力——我認為售後市場的季度比我們預期的要強，這主要是由於我談到的股票收益。當我們展望市場前景時，我認為我們確實非常依賴現金運價指數的外部市場來源。我們發現，這對我們來說是一個非常可靠的來源，可以作為美國市場的預測指標，並且與我們的售後市場收入密切相關。

So as we see freight activity increase, we tend to see our aftermarket revenues follow that. And so the cash freight index have revised down their outlook for the year, a slightly softer Q2 and a slightly softer Q4 is the way that played out from memory. I think Q2 will be interesting to watch here.

因此，當我們看到貨運活動增加時，我們往往會看到我們的售後市場收入也會增加。因此，現金貨運指數下調了今年的預期，第二季和第四季略有疲軟，這就是記憶中的情況。我認為第二季度在這裡觀看會很有趣。

And as we monitor our guidance and outlook for the future, then we see Q2 hopefully move freight activity more into positive territory year over year. And so that will be an important sign for us as we look to the health of the aftermarket throughout the rest of 2024.

當我們監控未來的指導和展望時，我們預計第二季度貨運活動預計將逐年進入積極的區域。因此，當我們展望 2024 年剩餘時間售後市場的健康狀況時，這對我們來說將是一個重要的跡象。

Thank you.

謝謝。

Bobby Brooks, Northland Securities.

鮑比布魯克斯，北國證券。

Hey, good morning, guys. Thanks for taking my question. So just trying to starting with switching it up and wanted to talk about the first fit could you discuss how share gains within the first-fit market have progressed now that we are almost one year post the initial split off from Cummins.

嘿，早上好，夥計們。感謝您提出我的問題。因此，只是嘗試從轉換開始，並想談談首次適配，您能否討論一下首次適配市場的份額增長是如何進展的，因為我們與康明斯最初分拆已近一年了。

I know, Steph, you mentioned in your prepared remarks. Maybe talk about that road map of winning that contract or maybe more just broadly, have you felt you've made inroads with those larger OEMs who previously weren't used to be got in the first bid production because they looked at it as helping a competitor. Were some maybe still not willing to engage pre-share exchange since that ownership? And I'm sorry to interrupt, but you could go ahead.

我知道，史蒂芬，你在準備好的發言中提到過。也許談談贏得合約的路線圖，或者更廣泛地說，您是否覺得您已經與那些以前不習慣參與首次投標生產的大型原始設備製造商取得了進展，因為他們認為這有助於幫助競爭者。自從擁有所有權後，有些人可能仍然不願意進行股份預交換嗎？很抱歉打斷您，但您可以繼續。

No. Thank you, Bobby, for the question. I appreciate it. Firstly, I’d call out, as you noted in my prepared remarks, obviously, it is always tricky to work out how I give you a sense of this in advance, whilst managing commercially sensitive information. So I'll do my best to straddle that. I will emphasize where we are seeing wins here is where we have clear technology advantage.

不。謝謝你，鮑比，提出這個問題。我很感激。首先，我要指出，正如您在我準備好的發言中指出的那樣，顯然，在管理商業敏感資訊的同時，如何讓您提前了解這一點總是很棘手的。所以我會盡我最大的努力來跨越這一點。我要強調的是，我們在這裡看到的勝利是我們擁有明顯的技術優勢的地方。

And so on the fuel filtration side, on the crankcase ventilation side, we are seeing more and more wins with our customers on that first-fit side beyond Cummins. And so I referenced one that we've won recently that has driven gains for us in the North American market and in Europe. So that's been a great win here.

因此，在燃油過濾方面，在曲軸箱通風方面，我們看到我們的客戶在康明斯之外的第一適應方面取得了越來越多的勝利。因此，我提到了我們最近贏得的一場勝利，它為我們在北美市場和歐洲市場帶來了收益。所以這是一場偉大的勝利。

And then I would say we've made really good progress with the initial discussions with other target growth customers. And I'd say they're not only US based, but also in other parts of the world, we are making very good progress. We have invested consciously and deliberately in our sales team to increase the resources there, focused on [canvasing] and winning this business.

然後我想說，透過與其他目標成長客戶的初步討論，我們已經取得了非常好的進展。我想說，他們不僅在美國，而且在世界其他地區，我們都取得了非常好的進展。我們有意識地、有意識地對我們的銷售團隊進行投資，以增加那裡的資源，專注於[遊說]並贏得這項業務。

And so hopefully, as we move ahead here, I'll be able to see the profits of that effort and also be able to share those with you, probably not in advance of them, unfortunately.

因此，希望當我們在這裡前進時，我將能夠看到這項努力的利潤，並能夠與你們分享這些利潤，不幸的是，可能不會提前。

Yes. No, I can definitely appreciate how that works. And thank you for the color. And maybe just sticking with that, obviously with my discussions with investors, one of the things that I think people are most interested in and positive on with Atmus is just your high aftermarket exposures.

是的。不，我絕對可以理解這是如何運作的。謝謝你的顏色。也許只是堅持這一點，顯然在我與投資者的討論中，我認為人們對 Atmus 最感興趣和最積極的事情之一就是你的高售後市場風險。

But to flip that back to the first fit, am I right in thinking that you could make notable new first-fit wins while keeping that 80% aftermarket weighting, like winning new first-fit job doesn't necessarily mean your aftermarket exposure drops to, I don't know, say, 70%, 60%, you can still win to make notable wins while keeping that high aftermarket exposure?

但是，將其翻轉回首次適配，我的想法是否正確，您可以在保持80% 的售後市場權重的同時，取得顯著的新的首次適配勝利，就像贏得新的首次適配工作並不一定意味著您的售後市場風險下降到，我不知道，比如說，70%、60%，你仍然可以贏得顯著的勝利，同時保持較高的售後市場曝光度嗎？

Yes. We certainly see that flywheel impact. I'd just make a couple of comments on that. We are very focused in our first-fit activity that we're doing that where we have a technology advantage where that also drive further aftermarket growth.

是的。我們當然看到了飛輪的影響。我只想對此發表幾點評論。我們非常專注於我們的首次組裝活動，我們正在這樣做，我們擁有技術優勢，這也推動了售後市場的進一步成長。

We already have a significant installed vehicle base which continues to grow our aftermarket naturally anyway from the installed base that is out there. So I think that 80:20 is about the right mix for our business. And certainly, whilst we are looking to grow both sides of that, I think the mix holds.

我們已經擁有一個重要的已安裝車輛基地，無論如何，我們的售後市場都會從現有的已安裝基地中自然地繼續成長。所以我認為 80:20 對我們的業務來說是正確的組合。當然，雖然我們希望雙方都得到發展，但我認為這種組合是有效的。

Terrific. That's awesome. And then maybe just last question for me is -- so in my view, one of the most exciting part of that in the stores being able to reinvest in the business after years of being a Cummins cash [talent]. I mean, you've previously talked about some exciting reinvestment initiatives such as the fully automated manufacturing line in your France facility. So could you just maybe discuss and curious to hear Jack's thoughts on this as well. But you just discuss maybe early learning that specifically and maybe more broadly, how the overall reinvestment programs have progressed versus expectations? And just generally, any early learnings from them.

了不起。棒極了。也許對我來說最後一個問題是 - 所以在我看來，最令人興奮的部分之一是商店在成為康明斯現金多年後能夠對業務進行再投資[天賦]。我的意思是，您之前談到了一些令人興奮的再投資計劃，例如法國工廠的全自動生產線。那麼您是否也可以討論一下並想聽聽傑克對此的想法。但您只是討論了可能是早期的學習，具體來說，也許更廣泛地說，整體再投資計劃與預期相比進展如何？一般來說，從他們身上學到的任何早期經驗。

Jack, do you want to take this one?

傑克，你想拿這個嗎？

Yeah, sure. Thanks for the question, Bobby. I think absolutely one of the key initiatives for us as we move outside of the Cummins environment is to make targeted capital expenditures to increase both capacity and to accommodate growth initiatives as our sales teams engage with customers, and we work to meet their expectations.

好，當然。謝謝你的提問，鮑比。我認為，當我們走出康明斯環境時，我們的關鍵舉措之一絕對是進行有針對性的資本支出，以提高產能並適應增長計劃，因為我們的銷售團隊與客戶互動，並且我們努力滿足他們的期望。

And so you highlighted one of those, which is in our compare France facility, fully automated green cartridge line, the first fully automated line that we put in. So of course, there are some learnings there, but it's been really good to see that now come largely into full production, which has allowed us to continue to meet our customers' needs and then potentially leverage those learnings into other markets as we continue to win new business.

因此，您強調了其中一個，即我們在法國的比較工廠中的全自動綠色墨盒生產線，這是我們投入的第一條全自動生產線。當然，我們從中學到了一些東西，但很高興看到現在大部分已經投入全面生產，這使我們能夠繼續滿足客戶的需求，然後隨著我們繼續發展，有可能將這些知識應用到其他市場。新業務。

I do think the range of 2% to 3% is still largely what we are thinking from a capital expenditure standpoint to accommodate that top-line growth. But as we identify new opportunities, we'll continue to assess where we need to invest from an organic standpoint on top of all of the initiatives that we've discussed in the inorganic space.

我確實認為 2% 到 3% 的範圍在很大程度上仍然是我們從資本支出的角度考慮的，以適應營收成長。但當我們發現新的機會時，除了我們在無機領域討論的所有舉措之外，我們將繼續從有機的角度評估我們需要在哪些方面進行投資。

That’s terrific. Thank you very much, Jack and Steph. I will jump back in the queue. Thanks.

那太棒了。非常感謝你們，傑克和史蒂芬。我會跳回到隊列中。謝謝。

Thanks, Bobby.

謝謝，鮑比。

Thank, Bobby.

謝謝，鮑比。

Andrew Obin, Bank of America.

安德魯‧奧賓，美國銀行。

This is David Ridley-Lane on for Andrew. You had very good growth in the independent distributor channel last year. I wanted to just see if you could share some of the most relevant stats for you. Is this about signing up new distributors this about initiatives to grow share within the distributors? How are you getting this market share gain as that has continued here in the first quarter?

我是安德魯的大衛雷德利-萊恩。去年你們在獨立分銷商通路中取得了非常好的成長。我只是想看看您是否可以分享一些與您最相關的統計數據。這是關於簽約新經銷商還是關於增加經銷商份額的舉措？您是如何獲得第一季持續成長的市場份額的？

Yeah. Thanks, David, for the question. I would say, really, it is a bit different by different region is how I would best describe that. We see that we have got the best footprint in the US to service, in particular, our on-highway customers with our established partners today. So I would say that a very mature, established, well operating distribution network, very capable distributors. I talked about being partnered with the winners that are also growing their share and how that has a flow-on consequence in the US aftermarket.

是的。謝謝大衛提出這個問題。我想說的是，實際上，不同地區的情況略有不同，這是我最好的描述方式。我們發現，我們在美國擁有最好的足跡，可以與我們現有的合作夥伴一起為我們的公路客戶提供服務。所以我想說的是，這是一個非常成熟、成熟、運作良好的經銷網絡，也是非常有能力的經銷商。我談到了與那些也不斷擴大份額的獲勝者的合作，以及這如何對美國售後市場產生連鎖效應。

So I really think that's about doing it better largely with those customers, although there is some expansion opportunity, whereas in other markets like Latin America, for example, we really see an emphasis on expanding that network of distributors growing those consciously.

因此，我確實認為，儘管存在一些擴張機會，但主要是針對這些客戶做得更好，而在拉丁美洲等其他市場，例如，我們確實看到了對擴大經銷商網絡的重視，有意識地發展這些客戶。

And we've seen the significant benefits of that. coming through the aftermarket as well. So tailored region by region is how I would describe it to you. The way I would think about it is those where we've got mature, established capable distributors, we are really looking to be partnered with the winners and doing that really well is the focus. And then in other regions that are growth emerging regions, really looking to expand a capable distribution network quickly to support our profitable growth in the aftermarket.

我們已經看到了這樣做的顯著好處。也透過售後市場。我將如何向您描述它是按地區量身定制的。我的想法是，我們擁有成熟、有能力的經銷商，我們真的希望與獲勝者合作，並且做得很好才是重點。然後在其他新興成長地區，我們真正希望快速擴大有能力的分銷網絡，以支持我們在售後市場的獲利成長。

Thank you. And now that you are formally separated from Cummins and with an updated Board, do you have any update on the priorities for free cash flow or possible cash return to shareholders? Thank you.

謝謝。現在您已正式與康明斯分離，董事會也進行了更新，您對自由現金流或股東可能的現金回報的優先事項有什麼最新消息嗎？謝謝。

Thank you. I did make some mention of this in my prepared remarks. The way I think about our capital allocation is, first and foremost our focus is on funding our growth strategy both organically through our core markets where we still see significant growth opportunity and inorganically as we expand into industrial filtration markets.

謝謝。我在準備好的發言中確實提到了這一點。我對資本配置的看法是，首先，我們的重點是透過我們仍然看到重大成長機會的核心市場有機地為我們的成長策略提供資金，並在我們擴展到工業過濾市場時無機地為我們的成長策略提供資金。

After that, we certainly are assessing now what return to shareholders would look like, both in the form of a dividend and in share buybacks. Obviously, that's a decision for our new independent Board. So we're working through those discussions with them, and we'll be able to provide updates as and when is appropriate on returns to shareholders.

之後，我們現在肯定正在評估股東回報會是什麼樣子，無論是股利還是股票回購的形式。顯然，這是我們新的獨立董事會的決定。因此，我們正在與他們進行這些討論，我們將能夠在適當的時候提供有關股東回報的最新資訊。

Thank you very much.

非常感謝。

Thanks, David.

謝謝，大衛。

There are no further questions at this time. So I'll turn the call back over to Todd Chirillo.

目前沒有其他問題。所以我會把電話轉回給托德·奇里洛 (Todd Chirillo)。

That concludes our teleconference for today. Thank you all for participating and your continued interest. As always, the Investor Relations team will be available for questions after the call. Thank you.

我們今天的電話會議到此結束。感謝大家的參與和持續的關注。與往常一樣，投資者關係團隊將在電話會議後回答問題。謝謝。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。