Armstrong World Industries Inc (AWI) 2023 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Second Quarter 2023 Armstrong World Industries Earnings Conference Call.

美好的一天，感謝您的支持。歡迎參加阿姆斯壯世界工業公司 2023 年第二季度收益電話會議。

(Operator Instructions)

（操作員說明）

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Theresa Womble, VP of Investor Relations and Corporate Communication. Please go ahead.

請注意，今天的會議正在錄製中。現在我想將會議交給今天的演講者，投資者關係和企業傳播副總裁 Theresa Womble。請繼續。

Thank you, and welcome everyone to our call this morning. Today, we have Vic Grizzle, our CEO; and Chris Calzaretta, our CFO, to discuss Armstrong World Industries second quarter 2023 results and rest of year outlook. To accompany these remarks, we have provided a presentation that is available on the Investors section of the Armstrong World Industries website.

謝謝您，歡迎大家今天早上來參加我們的電話會議。今天，我們有我們的首席執行官維克·格里茲爾 (Vic Grizzle)；和我們的首席財務官 Chris Calzaretta 討論阿姆斯壯世界工業公司 2023 年第二季度業績和今年剩餘時間的展望。為了配合這些評論，我們在阿姆斯特朗世界工業網站的投資者部分提供了一份演示文稿。

Our discussion of operating and financial performance will include non-GAAP financial measures within the meaning of the SEC Reg G. A reconciliation of these measures with the most appropriate comparable GAAP measure is included in the earnings press release and in the appendix of the presentation issued this morning. Both of these are available on our Investor Relations website.

我們對運營和財務業績的討論將包括 SEC Reg G 含義內的非 GAAP 財務指標。這些指標與最合適的可比 GAAP 指標的對賬包含在收益新聞稿和發布的演示文稿的附錄中今天早上。這些都可以在我們的投資者關係網站上找到。

During the call, we will be making forward-looking statements that represent our view of our financial and operational performance as of today's date, July 25, 2023. These statements involve risks and uncertainties that may differ materially from those implied or expected. We provide a detailed discussion of the risks and uncertainties in our SEC filings, including the 10-Q filed earlier this morning. We undertake no obligation to update any forward-looking statement beyond what is required by applicable securities law. Now I will turn the call over to Vic.

在電話會議期間，我們將做出前瞻性聲明，代表我們對截至今天（2023 年7 月25 日）的財務和運營業績的看法。這些聲明涉及的風險和不確定性可能與暗示或預期存在重大差異。我們在 SEC 文件中詳細討論了風險和不確定性，包括今天早上提交的 10-Q。我們不承擔更新任何超出適用證券法要求的前瞻性聲明的義務。現在我將把電話轉給維克。

Thank you, Theresa, and good morning, everyone, and welcome to our earnings call. We have lots of exciting things going on at the company, including a strong quarter of execution and the acquisition of BOK Modern, which we announced yesterday. So let's jump right in. On a total company basis, we generated 10% year-over-year adjusted EBITDA growth on 1% net sales growth in the quarter, despite soft market conditions and continued economic uncertainty.

謝謝特蕾莎，大家早上好，歡迎參加我們的財報電話會議。我們公司發生了許多令人興奮的事情，包括強勁的季度執行力以及我們昨天宣布的對 BOK Modern 的收購。因此，讓我們直接開始吧。儘管市場狀況疲軟且經濟持續存在不確定性，但就公司整體而言，本季度調整後 EBITDA 同比增長 10%，淨銷售額增長 1%。

These results helped increase our year-to-date adjusted free cash flow to $103 million, a 60% increase from 2022 results. Both the Mineral Fiber and Architectural Specialties segments contributed to the strong earnings and free cash flow growth, and both segments delivered meaningful EBITDA margin expansion. These are solid results, and I'm pleased with how our team is executing thus far in 2023, managing softer market conditions while increasing profitability and continuing to deliver on our growth initiatives.

這些結果幫助我們將年初至今的調整後自由現金流增加至 1.03 億美元，比 2022 年的結果增長了 60%。礦物纖維和建築專業部門都為強勁的盈利和自由現金流增長做出了貢獻，並且這兩個部門都實現了有意義的 EBITDA 利潤率擴張。這些都是堅實的成果，我對我們的團隊在 2023 年迄今為止的執行情況感到滿意，管理疲軟的市場條件，同時提高盈利能力並繼續實現我們的增長計劃。

In our Mineral Fiber segment, sales ended the quarter is essentially flat to 2022 levels. Strong AUV performance of 7% offset a decline in sales volumes. As mentioned on our first quarter call, we expected market demand to be softer versus prior year, and we had highlighted first quarter restocking activity in the home centers that would begin reversing out in the second quarter.

在我們的礦物纖維領域，本季度末的銷售額基本上與 2022 年的水平持平。 AUV 7% 的強勁表現抵消了銷量的下降。正如我們在第一季度電話會議中提到的，我們預計市場需求將比去年同期疲軟，並且我們強調了家居中心第一季度的補貨活動，該活動將在第二季度開始逆轉。

Also, you may remember, the second quarter last year was impacted by the unusual timing of our July 1 price increase versus our typical August timing. Overall, we believe that sequentially underlying market demand was modestly soft than the -- softer than the first quarter. Relevant indicators for our primary sectors were mixed overall in the quarter. Dodge bidding activity softened, ABI declined but remained in positive territory, office vacancies continued to rise but at a slower pace and commercial leasing activity improved in the quarter for the first time in 4 quarters.

此外，您可能還記得，去年第二季度受到我們 7 月 1 日漲價時間與 8 月典型時間不同尋常的影響。總體而言，我們認為基本市場需求連續比第一季度溫和疲軟。本季度主要行業相關指標總體好壞參半。道奇投標活動減弱，ABI 下降，但仍處於正值區間，寫字樓空置率繼續上升，但增速放緩，商業租賃活動在本季度出現四個季度以來的首次改善。

And now that we've begun the second half, on the ground sentiment, it has slightly improved with verticals like transportation, healthcare and education remaining active, partially offsetting soft replacement activity and tenant improvement work in the office vertical. The fact that we sell into a variety of verticals is important for us. The office vertical, which has been the most challenged area, represents about 30% of our sales, similar to the education vertical, followed by healthcare, retail and transportation.

現在我們已經開始下半年，就地面情緒而言，隨著交通、醫療保健和教育等垂直行業保持活躍，市場情緒略有改善，部分抵消了辦公垂直領域的軟更換活動和租戶改善工作。事實上，我們向各種垂直領域銷售產品對我們來說很重要。辦公垂直領域是最具挑戰性的領域，約占我們銷售額的 30%，與教育垂直領域類似，其次是醫療保健、零售和運輸。

They rarely move up or down at the same rate. And this has helped cushion our business from cyclical swings, and we believe that it positions us well in this current environment. Another highlight of the quarter was our Mineral Fiber AUV performance of 7%. This result was driven primarily by like-for-like pricing. As often -- as we've often noted, our ability to consistently achieve price is an important part of our value creation model.

它們很少以相同的速度向上或向下移動。這有助於緩沖我們的業務免受週期性波動的影響，我們相信這使我們在當前環境中處於有利地位。本季度的另一個亮點是我們的礦物纖維 AUV 表現達到 7%。這一結果主要是由同類定價推動的。正如我們經常指出的那樣，我們持續實現價格的能力是我們價值創造模型的重要組成部分。

We've captured our normal price realization for the increase that we announced earlier in 2023, and it has helped offset the inflation on raw materials we're experiencing. Our industry-leading value proposition enabled by the work of our sales team staying close to our customers and the efforts by our plants and customer service teams to maintain our best-in-class service levels and our new product innovation have all contributed to our consistent ability to earn our prices in the marketplace.

我們已經實現了 2023 年早些時候宣布的漲價的正常價格實現，這有助於抵消我們正在經歷的原材料通脹。我們行業領先的價值主張得益於我們的銷售團隊與客戶的緊密聯繫、我們的工廠和客戶服務團隊為保持一流服務水平和新產品創新所做的努力，這些都有助於我們始終如一在市場上賺取我們的價格的能力。

I'd also like to highlight that our healthy spaces and digital growth initiatives were a positive contributor to Mineral Fiber sales in the quarter. Sales growth in our Health zone product line continued at elevated levels, and our sales through our online marketplace, Kanopi, doubled from 2022 levels. Both of these helped offset some of the negative impacts from the overall lower market activity.

我還想強調，我們的健康空間和數字增長計劃為本季度礦物纖維銷售做出了積極貢獻。我們的健康區產品線的銷售增長繼續保持在較高水平，我們通過在線市場 Kanopi 的銷售額比 2022 年的水平翻了一番。這兩者都有助於抵消整體市場活動較低帶來的一些負面影響。

Another highlight for the Mineral Fiber segment is that our plants did very well with delivering productivity gains despite lower volumes in the quarter. The great work by our plant teams demonstrates another of the core value creators for Armstrong, which is operational excellence in all parts of the cycle. Our ability to consistently generate manufacturing productivity while maintaining best-in-class quality and service throughout our network contributed to Mineral Fiber margin expansion this quarter and has been a hallmark of our company's success.

礦物纖維部門的另一個亮點是，儘管本季度產量較低，但我們的工廠在提高生產率方面表現出色。我們工廠團隊的出色工作展示了阿姆斯特朗的另一個核心價值創造者，即在整個週期的各個部分的卓越運營。我們能夠持續提高製造生產力，同時在整個網絡中保持一流的質量和服務，這有助於本季度礦物纖維利潤率的擴大，這也是我們公司成功的標誌。

These efforts, along with our continued growth in AUV, helped push Mineral Fiber quarterly adjusted EBITDA margin above 40% for the first time since 2021.

這些努力，加上我們 AUV 的持續增長，幫助 Mineral Fiber 季度調整後 EBITDA 利潤率自 2021 年以來首次超過 40%。

Now moving on to Architectural Specialties. Sales for this segment accelerated from first quarter results and were up 6% from a strong 2022 level. We continue to see good activity in verticals like transportation, healthcare and education. Our order intake for the quarter in Architectural Specialties reached a historical high in the quarter. Importantly, we're also driving EBITDA growth and margin expansion in this important growth segment. We're now seeing the benefits from the investments that we've made in the businesses where we've acquired and are achieving the expected operating leverage on increased sales volumes.

現在轉向建築專業。該細分市場的銷售額較第一季度業績有所增長，較 2022 年的強勁水平增長 6%。我們繼續看到交通、醫療保健和教育等垂直領域的良好活動。我們本季度建築專業的訂單量達到了本季度的歷史最高水平。重要的是，我們還在推動這一重要增長領域的 EBITDA 增長和利潤率擴張。我們現在看到了我們在收購的業務中進行的投資所帶來的好處，並且正在通過增加銷量實現預期的運營槓桿。

Last, before I turn it over to Chris, I would like to briefly illustrate how our investments across the segments work together to deliver value for our customers and grow our business through a successful project involving a hospital that we recently completed in Colorado. This was a sizable project with typical complexities that required many different solution types to achieve the design intent of the architect. The project began with the architect employing the use of project works, our preconstruction and design service platform. The architect was able to input the project requirements and develop a layout in project works that enable the multiple iterations to optimize the design intent and cost and do it quickly and efficiently.

最後，在我將其交給克里斯之前，我想簡要說明一下我們跨部門的投資如何協同工作，為我們的客戶創造價值，並通過我們最近在科羅拉多州完成的一家醫院的成功項目來發展我們的業務。這是一個具有典型複雜性的大型項目，需要許多不同的解決方案類型才能實現架構師的設計意圖。該項目始於建築師使用項目工程、我們的預製和設計服務平台。建築師能夠輸入項目要求並在項目工作中開發佈局，從而能夠通過多次迭代來優化設計意圖和成本，并快速高效地完成。

This project ultimately required a mix of 28 different Armstrong products across both our segments. This included sustained smooth wide acoustical tile, including our Health zone products, as well as a variety of grid and Architectural Specialty products, including our metalworks blades. The project ended up being a very strong specification for AWI since no other single manufacturer could offer the complete suite of products digitally enabled by our proprietary design platform.

該項目最終需要混合我們兩個細分市場的 28 種不同的阿姆斯壯產品。這包括持續光滑的寬隔音瓷磚，包括我們的健康區產品，以及各種網格和建築專業產品，包括我們的金屬製品葉片。該項目最終成為 AWI 的一個非常強大的規範，因為沒有其他製造商可以提供由我們專有設計平台實現的數字化全套產品。

This is a great example of how valuable the breadth of our portfolio of products and our innovative services can be for our customers, making it easier for architects to specify more Armstrong products in more spaces, leading to stronger specifications and greater AUV growth.

這是一個很好的例子，說明我們的產品組合和創新服務的廣度對我們的客戶來說是多麼有價值，使建築師可以更輕鬆地在更多空間中指定更多阿姆斯壯產品，從而實現更嚴格的規格和更大的AUV 增長。

Now I'll pause and turn it over to Chris for some more details on our financials. Chris?

現在我將暫停並將其轉交給克里斯，以獲取有關我們財務狀況的更多詳細信息。克里斯？

Thanks, Vic, and good morning to everyone on the call. As a reminder, throughout my remarks, I'll be referring to the slides available on our website, and Slide 3, which details the basis of the presentation. On Slide 6, we discuss our quarterly Mineral Fiber segment results. Mineral Fiber sales were essentially unchanged from the prior year as AUV growth of 7% was offset by lower volumes. AUV performance this quarter was driven by like-for-like pricing, while mix was essentially flat, with positive product mix being offset by timing-related channel mix headwinds.

謝謝維克，祝所有參加電話會議的人早上好。提醒一下，在我的整個發言中，我將參考我們網站上提供的幻燈片以及幻燈片 3，其中詳細介紹了演示文稿的基礎。在幻燈片 6 上，我們討論了礦物纖維部門的季度業績。礦物纖維銷售額與上年基本持平，7% 的 AUV 增長被銷量下降所抵消。本季度 AUV 的業績受到同類定價的推動，而產品組合基本持平，積極的產品組合被與時間相關的渠道組合逆風所抵消。

Our Q2 Mineral Fiber AUV result gives us confidence that we are on track to deliver above-average historical performance for the full year. The decrease in volume during the quarter was driven primarily by softer market demand and to a lesser extent, the timing of year-over-year announced price increases and the resulting impact on sales that Vic mentioned earlier, in addition to the expected weaker home center sales from inventory build that we noted in our April call.

我們第二季度礦物纖維 AUV 結果讓我們充滿信心，我們有望實現全年高於平均水平的歷史業績。本季度銷量下降的主要原因是市場需求疲軟，其次是宣布的同比價格上漲的時間以及維克之前提到的由此對銷售造成的影響，此外還有預期的家居中心疲軟我們在四月份的電話會議中註意到庫存增加帶來的銷售。

Mineral Fiber segment adjusted EBITDA grew by $6 million or 7% and adjusted EBITDA margin expanded by 260 basis points as compared to the prior year. AUV fall-through was above historic levels and a key driver in expanding EBITDA margin. WAVE equity earnings were also favorable as compared to the prior year, driven by price over inflation. Our Mineral Fiber plants continued to execute well in the quarter and delivered meaningful productivity gains ahead of their targets.

與上一年相比，礦物纖維部門調整後 EBITDA 增長了 600 萬美元，即 7%，調整後 EBITDA 利潤率擴大了 260 個基點。 AUV 的跌幅高於歷史水平，是擴大 EBITDA 利潤率的關鍵驅動力。受物價超過通脹的推動，WAVE 股票收益也較上年有利。我們的礦物纖維工廠在本季度繼續表現良好，並提前實現了有意義的生產力提升，超出了目標。

Partially offsetting these gains were headwinds from lower volumes and higher input costs. While we experienced energy and freight cost deflation versus the prior year, raw materials remain inflationary. SG&A in the quarter was essentially unchanged versus the prior year as modest increases in selling expense in support of our digital initiatives were partially offset by the benefits from our previously announced cost savings initiatives.

銷量下降和投入成本上升帶來的不利因素部分抵消了這些收益。儘管與上一年相比，我們經歷了能源和貨運成本通縮，但原材料仍然處於通貨膨脹狀態。本季度的銷售費用、行政管理費用與上一年相比基本沒有變化，因為支持我們數字計劃的銷售費用小幅增長被我們之前宣布的成本節約計劃帶來的好處所部分抵消。

On Slide 7, we discuss our Architectural Specialties, or AS, segment results. With sales growth across most product categories, the rate of growth in the quarter improved sequentially from Q1 and is a better reflection of the growth we expect to see for the full year. We continue to see strong transportation bidding activity and are keeping a close eye on order intake and backlogs. We're particularly pleased with the order intake and backlog levels for our metal products, which are up -- which are both up more than 20% versus the same time last year.

在幻燈片 7 上，我們討論了建築專業（AS）細分結果。隨著大多數產品類別的銷售增長，本季度的增長率比第一季度連續提高，更好地反映了我們預計全年的增長。我們繼續看到強勁的運輸招標活動，並密切關注訂單量和積壓情況。我們對金屬產品的訂單量和積壓量均有所上升感到特別滿意，與去年同期相比均增長了 20% 以上。

This activity supports our excitement and investment in this growing category through our recently announced acquisition of BOK Modern for initial cash consideration of about $14 million. Vic will share some additional thoughts on this acquisition in a few minutes. AS adjusted EBITDA margin took a step up in Q2, both sequentially and versus the prior year period, expanding 360 basis points versus the prior year through operating leverage on increased sales. We continue to leverage SG&A as we grow and expand EBITDA margins in this segment.

通過我們最近宣布以約 1400 萬美元的初始現金收購 BOK Modern，這項活動支持了我們對這一不斷增長的類別的興奮和投資。 Vic 將在幾分鐘內分享有關此次收購的一些其他想法。第二季度調整後 EBITDA 利潤率環比和上年同期均有所上升，通過增加銷售的經營槓桿，比上年同期擴大了 360 個基點。隨著我們在該領域的增長和擴大 EBITDA 利潤率，我們將繼續利用 SG&A。

Slide 8 shows our second quarter consolidated company metrics, where we -- where benefits from improved AUV, WAVE equity earnings and lower manufacturing costs more than offset headwinds from lower volumes, increases in input costs and higher SG&A expenses. Consolidated adjusted EBITDA margin expanded 260 basis points with adjusted EBITDA up 10%. Adjusted diluted net earnings per share increased 7% versus the prior year, and adjusted free cash flow increased $28 million or 64% versus the prior year.

幻燈片8 顯示了我們第二季度的綜合公司指標，其中我們受益於AUV、WAVE 股本收益的改善和製造成本的降低，遠遠抵消了銷量下降、投入成本增加和SG&A 費用增加帶來的不利影響。合併調整後 EBITDA 利潤率擴大 260 個基點，調整後 EBITDA 增長 10%。調整後稀釋每股淨利潤比上年增長 7%，調整後自由現金流比上年增長 2800 萬美元，即 64%。

Slide 9 highlights our consolidated company metrics through the first 6 months of the year, where we grew adjusted EBITDA by 10% and expanded margins 130 basis points. These strong results reflect the execution, operational efficiency and cost control discipline of the entire AWI team, despite market headwinds. Adjusted diluted net earnings per share increased 9% versus the prior year period, and adjusted free cash flow increased about $40 million or 60% versus the prior year.

幻燈片 9 重點介紹了今年前 6 個月我們的綜合公司指標，其中調整後 EBITDA 增長了 10%，利潤率擴大了 130 個基點。這些強勁的業績反映了整個 AWI 團隊的執行力、運營效率和成本控制紀律，儘管市場存在阻力。調整後的稀釋每股淨利潤比上年同期增長 9%，調整後的自由現金流比上年增長約 4000 萬美元，即 60%。

Slide 10 shows our year-to-date adjusted free cash flow performance versus the prior year. The increase was driven by working capital improvement, primarily in inventory and receivables and an increase in WAVE dividends. This was partially offset by higher CapEx and higher cash interest. We are proud of this year-over-year improvement through the first half of the year and remain focused on driving full year free cash flow growth to fund all of our capital allocation priorities. Recall that our first capital allocation priority is to invest in our business where we see the highest returns.

幻燈片 10 顯示了我們今年迄今調整後的自由現金流表現與上一年的比較。這一增長是由營運資本改善（主要是庫存和應收賬款）以及 WAVE 股息增加推動的。這被較高的資本支出和較高的現金利息部分抵消。我們對今年上半年的同比改善感到自豪，並繼續致力於推動全年自由現金流增長，為我們所有的資本配置優先事項提供資金。回想一下，我們的資本配置首要任務是投資於回報率最高的業務。

Next, we target strategic acquisitions such as BOK Modern that offer unique specifiable attributes and capabilities that leverage the strengths of our business.

接下來，我們的目標是戰略收購，例如 BOK Modern，它們提供獨特的可指定屬性和能力，可充分利用我們的業務優勢。

Last, we seek to return excess cash to shareholders. In the second quarter, we repurchased $30 million of shares. And since the inception of the share repurchase program in 2016, we have repurchased a total of 13.2 million shares for about $908 million. We ended the second quarter with $292 million remaining under the existing authorization. Last week, we announced an increase in our existing share repurchase program, adding an additional $500 million to the authorization and extending the program through 2026. This decision reflects confidence in our ability to generate adjusted free cash flow and our commitment to fund all of our capital allocation priorities to create long-term shareholder value.

最後，我們尋求將多餘的現金返還給股東。第二季度，我們回購了 3000 萬美元的股票。自 2016 年股票回購計劃啟動以來，我們已回購了總計 1,320 萬股股票，耗資約 9.08 億美元。截至第二季度末，我們的現有授權餘額為 2.92 億美元。上週，我們宣布增加現有的股票回購計劃，在授權基礎上額外增加5 億美元，並將該計劃延長至2026 年。這一決定反映了我們對產生調整後自由現金流的能力的信心，以及我們為所有公司提供資金的承諾。資本配置優先考慮創造長期股東價值。

Slide 11 shows our full year guidance. Improved visibility for the second half of the year has removed the worst-case market downturn scenario from our expectations. And as such, we are modestly updating our full year 2023 guidance for sales, adjusted EBITDA and adjusted diluted EPS. And as I just mentioned, with the expectation of continued strong cash flow generation, we are raising the midpoint of our adjusted free cash flow guidance with an updated range of $240 million to $250 million, with a midpoint free cash flow margin of about 19%.

幻燈片 11 顯示了我們的全年指導。下半年能見度的改善已經消除了我們預期的最​​壞的市場低迷情況。因此，我們正在適度更新 2023 年全年銷售指引、調整後 EBITDA 和調整後稀釋每股收益。正如我剛才提到的，由於預計現金流將持續強勁，我們正在提高調整後的自由現金流指導的中點，更新範圍為2.4 億美元至2.5 億美元，自由現金流中點利潤率約為19 % 。

Looking ahead, recall that in the second half of 2023, we will be lapping a period of lower SG&A incentive compensation in the prior year as well as continuing investments to support our digital initiatives in the current year. Additional assumptions are available in the appendix to this presentation.

展望未來，請回想一下，在 2023 年下半年，我們將經歷上一年較低的 SG&A 激勵薪酬時期，並繼續投資以支持今年的數字計劃。本演示文稿的附錄中提供了其他假設。

And now I'll turn it back to Vic for some additional thoughts before we take your questions.

現在，在回答您的問題之前，我將把它轉回給維克，以徵求一些額外的想法。

Thank you, Chris. At the halfway point in the year, I'm pleased with where we are, and I believe we are well positioned to deliver on our outlook for 2023. The resiliency of our AUV growth, our productivity gains and now the meaningful contributions from our digital and healthy spaces initiatives when we need them the most in a weaker market environment are clearly shining through.

謝謝你，克里斯。今年已過半，我對我們的現狀感到滿意，我相信我們有能力實現 2023 年的前景。我們的 AUV 增長的彈性、生產力的提高以及現在我們的數字化的有意義的貢獻在市場疲軟的環境下，我們最需要的健康空間舉措顯然正在發揮作用。

Our digital initiatives are on track to be EBITDA positive for the second half of the year. And as of yesterday, sales through Kanopi have already surpassed total 2022 sales results. Our healthy spaces' products are also gaining traction with sales up over 20% on a year-to-date basis, and we're pleased with the regulatory support they are gaining.

我們的數字化舉措有望在今年下半年實現 EBITDA 正值。截至昨天，Kanopi 的銷售額已超過 2022 年的總銷售額。我們的健康空間產品也越來越受歡迎，今年迄今為止的銷售額增長了 20% 以上，我們對它們獲得的監管支持感到高興。

Many of you may have read about the 2 new bills lawmakers are bringing forward in New York City that would require the city to create standards to measure, monitor and report and enforce air quality inside schools and municipal buildings. These are bills that have been in the works since the pandemic. But due to the Canadian wildfires and the impact on air quality inside buildings, these bills have been accelerated.

你們中的許多人可能已經讀過立法者在紐約市提出的兩項新法案，這些法案要求該市製定標準來測量、監測、報告和執行學校和市政建築內的空氣質量。這些法案自大流行以來一直在醞釀之中。但由於加拿大山火以及對建築物內空氣質量的影響，這些賬單已經加速。

These proposals follow recently updated guidance on ventilation in buildings from the Center for Disease Control and Prevention and adopted by ASHRAE that the air and spaces be changed 5 times per hour to help reduce the number of pathogens in the air. These are all positive trends that support our healthy spaces growth initiative and the role ceilings can play in creating healthy spaces.

這些建議遵循疾病控制與預防中心最近更新的建築物通風指南，並由 ASHRAE 採用，每小時更換空氣和空間 5 次，以幫助減少空氣中病原體的數量。這些都是積極的趨勢，支持我們的健康空間增長計劃，以及天花板在創造健康空間中可以發揮的作用。

Overall, I attribute our year-to-date results to two things: Number one, our team's strong execution being demonstrated through the up and the down cycles; and number two, the resiliency of our business' core attributes, namely our strong market position in this uniquely attractive ceiling and wall category, our best-in-class exclusive distribution partners, our ability to deliver consistent AUV growth and our proven ability to achieve consistent annual manufacturing productivity gains, all contributed to the extraordinary resilience of our company and our ability to expand margins and deliver free cash flow growth in all parts of a normal cycle.

總的來說，我將我們今年迄今為止的業績歸因於兩件事：第一，我們團隊的強大執行力在上升和下降週期中得到了體現；第二，我們業務核心屬性的彈性，即我們在這個獨特有吸引力的天花板和牆壁類別中的強大市場地位、我們一流的獨家分銷合作夥伴、我們實現AUV 持續增長的能力以及我們經過驗證的實現目標的能力持續的年度製造生產率提高，所有這些都有助於我們公司的非凡彈性以及我們在正常週期的各個部分擴大利潤和實現自由現金流增長的能力。

This resilience and the resulting free cash flow growth allows for the deployment of free cash flow for both direct return to our shareholders as well as on the growth initiatives and complementary acquisitions that deliver profitable growth. Just last week, as Chris mentioned, our Board of Directors approved a $500 million increase to the share repurchase authorization, a shared confidence in our ability to sustain strong free cash flow into the future. And our acquisitions continue to help us build the broadest portfolio of specialty architectural solutions in the industry and importantly, get Armstrong solutions into more projects and into more spaces.

這種彈性和由此產生的自由現金流增長允許部署自由現金流，以直接回報我們的股東，以及實現盈利增長的增長計劃和補充收購。就在上週，正如克里斯提到的，我們的董事會批准了將股票回購授權增加 5 億美元，這表明我們對未來維持強勁自由現金流的能力充滿信心。我們的收購繼續幫助我們構建業內最廣泛的專業建築解決方案組合，更重要的是，將阿姆斯壯解決方案引入更多項目和更多空間。

And our latest acquisition, BOK Modern we announced yesterday does exactly that. BOK is a growing and profitable business focused on the design and engineering of architectural metal solutions for a wide variety of applications that are a natural extension of what we're doing in Architectural Specialties. Their solutions have patented designs that deliver project efficiency benefits by reducing material usage and installation. The work they do will help us respond to the desire among architects and designers to have a seamless flow between the interior and exterior look of a building.

我們昨天宣布的最新收購 BOK Modern 正是這樣做的。 BOK 是一家不斷成長且盈利的企業，專注於為各種應用設計和工程建築金屬解決方案，這是我們在建築專業領域所做工作的自然延伸。他們的解決方案擁有專利設計，可通過減少材料使用和安裝來提高項目效率。他們所做的工作將幫助我們滿足建築師和設計師的願望，即在建築物的內部和外部外觀之間實現無縫流動。

Additionally, their facades and rainscreens not only add aesthetic interest but they also reduce the energy load of the building by deflecting solar heat. This will be an increasingly desired design attribute as the embodied carbon and emissions of buildings becomes more and more in focus. We're pleased to welcome them to the AWI family, and we have every confidence that we will be able to leverage our platform to accelerate their growth and increase their profitability.

此外，它們的外牆和防雨屏不僅增加了美觀性，而且還通過偏轉太陽熱量來減少建築物的能源負荷。隨著建築物的碳和排放越來越受到關注，這將成為越來越受歡迎的設計屬性。我們很高興歡迎他們加入 AWI 大家庭，並且我們完全有信心能夠利用我們的平台來加速他們的發展並提高他們的盈利能力。

We're excited about the momentum overall in Architectural Specialties. Our expanding portfolio truly distinguishes us from our peers in terms of being a single source provider for complex projects, such as those in the transportation vertical, and we continue to see increasing bidding activity for airport projects. This increase in demand has been fueled by the recent infrastructure bill, which includes $5 billion in spending, specifically for airports.

我們對建築專業的整體發展勢頭感到興奮。我們不斷擴大的產品組合使我們真正區別於同行，因為我們是複雜項目（例如運輸垂直領域的項目）的單一來源提供商，而且我們繼續看到機場項目的招標活動不斷增加。最近的基礎設施法案推動了需求的增長，其中包括 50 億美元的支出，特別是機場支出。

We've previously discussed our significant win at the Pittsburgh airport. But recently, we've also been awarded jobs at the Seattle-Tacoma airport and the airport in El Paso. And to date, we're tracking at least 200 more airport projects, ranging from new terminals at JFK in New York and Chicago's O'Hare to work in Nashville, Orlando and Jacksonville, just to name a few. These opportunities are growing and often involve a wide range of materials from mineral fiber, wood, metal and more of Armstrong's complete portfolio.

我們之前已經討論過我們在匹茲堡機場取得的重大勝利。但最近，我們還獲得了西雅圖-塔科馬機場和埃爾帕索機場的工作機會。迄今為止，我們正在跟踪至少 200 個以上的機場項目，從紐約肯尼迪機場和芝加哥奧黑爾機場的新航站樓到納什維爾、奧蘭多和傑克遜維爾的工程，僅舉幾例。這些機會正在不斷增加，並且通常涉及礦物纖維、木材、金屬以及阿姆斯特朗完整產品組合中的多種材料。

Given the scale and complexity of these projects and now Armstrong's size and capabilities, we expect a tailwind from transportation to last beyond 2026. I think it's fair to say that 5 years ago, we wouldn't have been able to compete for these types of projects. We wouldn't have had the right portfolio or the capability to do it. With the capabilities that we've added now with our unmatched scale, we are well positioned to capture the opportunity in front of us.

考慮到這些項目的規模和復雜性，以及現在阿姆斯特朗的規模和能力，我們預計運輸業的推動力將持續到2026 年之後。我認為可以公平地說，5 年前，我們無法在這些類型的項目上進行競爭項目。我們不會有合適的投資組合或能力來做到這一點。憑藉我們現在所增加的能力和無與倫比的規模，我們已做好充分準備來抓住擺在我們面前的機會。

With that, we'll be happy to take your questions.

這樣，我們將很樂意回答您的問題。

(Operator Instructions)

（操作員說明）

Our first question comes from the line of Keith Hughes with Truist Securities.

我們的第一個問題來自 Truist Securities 的 Keith Hughes。

A question on input costs. The lowest number we -- negative, but the lowest number we've seen since '21 on Mineral Fiber. Could you talk about what you're expecting in the second half of the year and what costs are moving in the right direction and what are still in the wrong?

關於投入成本的問題。我們的最低數字是負數，但這是自 21 年以來我們在礦物纖維上看到的最低數字。您能否談談您對下半年的預期以及哪些成本正在朝著正確的方向發展，哪些仍然是錯誤的？

Sure. Chris, do you want to take that?

當然。克里斯，你想接受這個嗎？

Yes. Okay. So on the input cost side, we saw effectively, we were flat on total input costs in the second quarter. What we're seeing is continued inflation on the raw material side with some offsetting benefits from energy and freight. I think in the back half, we'll continue to see that inflationary pressure on the raw side and some continued moderation in deflation on the energy and freight side.

是的。好的。因此，在投入成本方面，我們有效地看到，第二季度的總投入成本持平。我們看到的是原材料方面的持續通脹，能源和貨運帶來的一些好處抵消了。我認為在下半年，我們將繼續看到原材料方面的通脹壓力以及能源和貨運方面通貨緊縮的持續緩和。

So all up, all in, we're looking at for the year, call it high single-digit inflation on raws and on total input costs in the low single-digit inflation range for the year. So continued back half pressure on raws with continued deflationary benefits in energy.

因此，總而言之，我們正在展望今年，稱其為今年原材料的高個位數通脹，以及今年低個位數通脹範圍內的總投入成本。因此，隨著能源持續通貨緊縮的好處，原材料繼續承受一半壓力。

Okay. And just a question on demand. You've highlighted some of the trends in the prepared comments. In terms of the guidance for volume in Mineral Fiber, low to mid-single-digit declines, do you expect office to get worse in the second half of the year? Or what's kind of baked into that number?

好的。只是按需提問。您在準備好的評論中強調了一些趨勢。就礦物纖維的銷量指引而言，低至中個位數的下降，您預計下半年辦公室情況會變得更糟嗎？或者這個數字包含了什麼？

Yes. What we've we highlighted, as you noted, Keith, there's some good activity still out there in some of the other verticals. Office, we're still expecting to be softer in the back half than we saw in the first half. This is based on a couple of things. We -- remember in the back half of last year, we were tracking bidding activity, in particular in this segment, and it turned negative in the third quarter and fourth quarter last year.

是的。我們強調的，正如您所指出的，基思，在其他一些垂直領域仍然存在一些良好的活動。辦公室，我們仍然預計後半段會比上半段更加疲軟。這是基於以下幾點。我們記得在去年下半年，我們一直在跟踪投標活動，特別是在這一領域，但去年第三季度和第四季度出現了負數。

So that's informing a little bit of the pipeline of activity that's going to come mature in the back half of this year. And the expectation that economic activity overall continues to weaken in the back half. Now it's less bad if you want to say it that way than what we initially expected. But vacancy rates continue to increase in office, although at a slower rate and supports, I think, a softer office segment in the back half.

因此，這為今年下半年將成熟的活動渠道提供了一些信息。以及下半年經濟活動整體繼續走弱的預期。現在，如果你想這樣說的話，情況比我們最初預期的要好一些。但寫字樓空置率繼續上升，儘管速度較慢，我認為這支撐了後半部分寫字樓市場的疲軟。

Our next question comes from the line of Garik Shmois with Loop Capital Markets.

我們的下一個問題來自 Loop Capital Markets 的 Garik Shmois。

I just wanted to follow up on the last question with respect to office and some of the verticals you highlighted. Are you -- just to be clear, are you seeing a weakening in the office demand environment at this point? Or has that stabilized? And I wanted to ask you highlighted strength in airports and the projects that you're bidding and you're servicing currently. Should we assume that the volume from the airport and transportation bidding work, is that largely going to benefit Architectural Specialties? I just wanted to be clear on that.

我只是想跟進有關辦公室的最後一個問題以及您強調的一些垂直領域。澄清一下，您是否認為目前辦公需求環境正在減弱？或者已經穩定下來了？我想問您重點介紹一下機場以及您目前正在投標和服務的項目的實力。我們是否應該假設機場和交通招標工作的數量在很大程度上有利於建築專業？我只是想澄清這一點。

Yes. Let me add to the to comment on office because the things that I described in my previous answer really around some of those leading indicators around projects, major renovation and new construction, and we have good visibility from those leading indicators, at least as an indicator. The part of it that we experienced last year and we're continuing to experience is that discretionary part of the market, smaller renovation work. We refer to a lot of times is our flow business that kind of just shows up through distribution, cash and carry counters.

是的。讓我補充一下對辦公室的評論，因為我在之前的回答中描述的事情實際上圍繞著項目、重大改造和新建的一些領先指標，並且我們從這些領先指標中獲得了良好的可見性，至少作為一個指標。我們去年經歷過並且我們將繼續經歷的部分是市場的自由裁量部分，較小的翻新工程。我們很多時候提到的是我們的流動業務，這種業務只是通過分銷、現金和結轉櫃檯出現。

There's a lot less visibility there, and there's a high level of discretion there. So as we expect the lack of clarity to exist into the back half of the year, I think, around interest rates and around the depth of the landing that we're expecting as an economy, I think as long as those remain or exist with lack of clarity, I think we're going to get a hold back on those discretionary type of jobs.

那裡的能見度要低得多，而且那裡的自由裁量權很高。因此，當我們預計今年下半年將存在缺乏明確性的情況時，我認為，圍繞利率和我們預期的經濟著陸深度，我認為只要這些仍然存在或存在，由於缺乏明確性，我認為我們將限制那些可自由支配的工作。

We've been experiencing that, and I think that we should expect to continue to experience that in the back half. Now it does seem like we've experienced the depth or the -- not the depth, but the worst of it. But our guidance is built around an expectation that this could continue to drift a little bit lower before it gets better, and that's what we're expecting in the back half.

我們已經經歷過這種情況，我認為我們應該期望在後半場繼續經歷這種情況。現在看來我們確實經歷了深度，或者說——不是深度，而是最糟糕的情況。但我們的指導是基於這樣的預期：在情況好轉之前，這一數字可能會繼續稍微走低，這就是我們對後半段的預期。

Your question around transportation is a good one that yes, the majority -- you can imagine the surface area and the amount of square footage that goes into these large airport projects, the majority of that is Architectural Specialties, and that's where we see a large benefit is on the Architectural Specialties side. With that said, there's a lot of Mineral Fiber that goes into these spaces as well.

你關於交通的問題是一個很好的問題，是的，大多數 - 你可以想像這些大型機場項目的表面積和平方英尺的數量，其中大部分是建築專業，這就是我們看到的大型機場好處是在建築專業方面。話雖如此，這些空間中也含有大量礦物纖維。

And so leveraging our entire portfolio is a significant advantage for us in the specification process to get all the spaces covered, including Mineral Fiber in these jobs. But I think your premise to your question is correct that this is primarily a benefit for the Architectural Specialty business.

因此，利用我們的整個產品組合對於我們在規範流程中覆蓋所有空間（包括這些工作中的礦物纖維）而言是一個顯著優勢。但我認為你的問題的前提是正確的，這主要是對建築專業業務的好處。

Great. I wanted to follow up on pricing. And if you have any thoughts on your ability to get pricing moving forward, given some of the choppiness in the end markets? And any color around your plans here in the second half of the year.

偉大的。我想跟進定價。考慮到終端市場的一些波動，您對推動定價的能力有什麼想法嗎？以及下半年你的計劃的任何顏色。

Yes. I would point you to the second quarter just to start off with that because we -- it's a pretty choppy quarter, a lot of ins and outs, base period noise and so forth, market did get softer. And as we alluded to, the majority of our AUV growth was like-for-like pricing. So I think that's a good signal of confidence that even in these kind of conditions, we're going to continue to price ahead of inflation.

是的。我想向您指出第二季度，因為我們——這是一個相當波動的季度，有很多來龍去脈、基期噪音等等，市場確實變得更加疲軟。正如我們提到的，我們的 AUV 增長大部分來自同類定價。因此，我認為這是一個很好的信心信號，即使在這種情況下，我們也將繼續在通脹之前定價。

And as Chris outlined, going into the back half, we still expect some raw material inflation, and we'll be pricing into that to make sure that we continue to expand margins.

正如克里斯概述的那樣，進入下半年，我們仍然預計會出現一些原材料通脹，我們將對此進行定價，以確保我們繼續擴大利潤率。

Our next question comes from the line of Kathryn Thompson with Thompson Research Group.

我們的下一個問題來自湯普森研究小組的凱瑟琳·湯普森。

I wanted just to clarify on your guidance today. So with AUV up 7% quarter implied that volume is down as much versus expected down mid-single digit. And when you flow that into the implied guidance, it appears that Mineral Fiber volumes are going to be down low single digits to mid-single digits versus more (inaudible) mid-single digits.

我今天只想澄清一下您的指導。因此，季度 AUV 上漲 7% 意味著成交量下降，而預期則下降了中個位數。當您將其納入隱含指導時，礦物纖維的銷量似乎將下降到低個位數到中個位數，而不是更多（聽不清）中個位數。

You got just through your stairstep in terms of expectations for Mineral Fiber volumes as we head into the back half of the year based on what's in your pipeline? And any type of expectation you may have beyond that?

當我們進入今年下半年時，根據您的管道中的產品，您剛剛完成了對礦物纖維產量的預期嗎？除此之外，您可能還有什麼期望？

Do you want to take that?

你想接受嗎？

Yes, Kathryn. So in terms of the back half of the year relative to Mineral Fiber volume, we're looking at volume down in the, call it, high mid-single-digit range in the second half of the year. And as Vic mentioned, the backdrop and the overall uncertainty tied to the macroeconomic still exists. So cautious as we approach the back half of the year, really monitoring the market. As we noted in our guidance, that improvement in volume was really due to the fact that we removed our worst-case market scenario and took that off the table.

是的，凱瑟琳。因此，就今年下半年相對於礦物纖維的銷量而言，我們預計今年下半年的銷量將下降到中高個位數範圍。正如維克所提到的，與宏觀經濟相關的背景和總體不確定性仍然存在。當我們接近下半年時，我們非常謹慎，真正監控市場。正如我們在指導中指出的那樣，成交量的改善實際上是由於我們消除了最壞情況的市場情景並將其排除在外。

But that being said, still a lot of uncertainty as we head into the back half here. And I'd just say on AUV, continue to point to the above-average Mineral Fiber AUV growth and continued focus on expanding margins in Mineral Fiber. And you can see with our updated assumptions there, we took our Mineral Fiber EBITDA margin up with that revision.

但話雖這麼說，當我們進入後半段時，仍然存在很多不確定性。我只想說，關於 AUV，繼續指出礦物纖維 AUV 的增長高於平均水平，並繼續關注擴大礦物纖維的利潤率。您可以看到，通過我們更新的假設，我們通過該修訂提高了礦物纖維 EBITDA 利潤率。

Yes. And then shifting to WAVE, really wanting to understand if there are any meaningful differences between your Mineral Fiber volume trends and your WAVE volumes, coupled with your overall -- we are seeing -- you benefited from lower steel cost, but where you also see steel trending as related to those WAVE earnings for the remainder of the year?

是的。然後轉向WAVE，真的想了解您的礦物纖維產量趨勢和WAVE 產量之間是否存在任何有意義的差異，再加上您的整體- 我們看到- 您受益於較低的鋼鐵成本，但您也看到鋼鐵趨勢與今年剩餘時間的 WAVE 收益相關嗎？

Yes. On the WAVE, Kathryn, we sell it as a package, right? So we really -- it kind of follows each other very closely. So WAVE volume and Mineral Fiber volume should be pretty well linked. There's some base period noise given coming out of the pandemic that have moved that around a little bit. But I think the general assumption is going to be right more times than not that these kind of follow and track each other very closely.

是的。凱瑟琳，在 WAVE 上，我們將其打包出售，對嗎？所以我們真的非常密切地關注彼此。因此，WAVE 音量和礦物纖維音量應該有很好的聯繫。大流行帶來的一些基期噪音使這一情況有所改變。但我認為一般的假設在很多時候都是正確的，即這些人會非常密切地跟踪和跟踪彼此。

Our next question comes from the line of Philip Ng with Jefferies.

我們的下一個問題來自 Philip Ng 和 Jefferies 的對話。

Vic, I guess, you mentioned how your bidding activity helped inform your view on the demand outlook this year. So curious, how is that progressing so far this year? And do you have enough visibility -- call, visibility to have a view of the second half of this year is a trough in Mineral Fiber volumes? Or could we see another step down in 2024?

維克，我想，您提到了您的投標活動如何幫助您了解今年的需求前景。很好奇，今年到目前為止進展如何？您是否有足夠的可見性——打電話，有足夠的可見性來了解今年下半年礦物纖維產量的低谷嗎？或者我們會在 2024 年看到進一步的降級嗎？

Yes. So Phil, the bidding activity I'm referencing is the Dodge bidding activity that we track on a quarter-to-quarter basis, and I was referencing that Dodge bidding activity in the back half of last year. And this -- if you remember, and I think this is where you're referencing. In the first quarter, after the third quarter and the fourth quarter turned negative and the Dodge bidding activity results, the first quarter was surprisingly positive, just ever so slightly positive.

是的。菲爾，我指的投標活動是我們每季度跟踪的道奇投標活動，我指的是去年下半年的道奇投標活動。如果你還記得的話，我想這就是你所指的地方。在第一季度，繼第三季度和第四季度轉為負值以及道奇投標活動結果之後，第一季度的表現出人意料地為正，只是略顯積極。

And I noted that as being noteworthy, but we weren't overweighting that because you can get some quarter-to-quarter noise in there. In the second quarter, that Dodge bidding activity turned negative again. But what was interesting when I tried to compare kind of the rate and pace of this Dodge bidding activity trend and then the back half, if you look at it at a half, it was more negative than what we saw in the first half.

我注意到這一點值得注意，但我們並沒有過度重視這一點，因為你可以在那裡得到一些季度與季度的噪音。第二季度，道奇競標活動再次轉為負值。但有趣的是，當我試圖比較道奇競價活動趨勢和後半段的速度和節奏時，如果你從上半段來看，它比我們在上半段看到的更為負面。

So to say it maybe better the first half this year, the level of negativity decelerated and improved the rate and pace of the softness. So I'm not sure exactly what that means in terms of a trough to get to the second part of your question. I think the jury is still out, I think, on the timing of the depth of the economic activity overall. So I'll stop short of forecasting that.

因此，今年上半年的情況可能會更好，負面情緒水平有所放緩，疲軟的速度和步伐有所改善。所以我不確定這對於進入你問題的第二部分的低谷到底意味著什麼。我認為，對於整體經濟活動深度的時間安排，目前還沒有定論。所以我將停止預測這一點。

But certainly, I think in the back half, we feel like it's going to be a bit softer than what we've experienced in the first half as informed and consistent, I think, with some of the leading indicators that we're referencing. And then where it goes from there, I think we have to wait and see as we get into the third and fourth quarter further.

但當然，我認為在後半段，我們感覺會比我們在上半年經歷的情況要溫和一些，我認為，與我們引用的一些領先指標相比，情況更加明智且一致。然後，當我們進一步進入第三和第四季度時，我認為我們必須拭目以待。

Okay. That's helpful. And then given a soft demand backdrop, I mean, the ability to grow EBITDA is quite impressive, Vic. The team has done a great job on the AUV side. I was quite impressed by the SG&A in manufacturing line, especially from the Mineral Fiber side. Can you expand on what's driving some of that upside there? Is that level contribution sustainable as we look out into the back half of this year? And is there more to do, I guess, perhaps in 2024?

好的。這很有幫助。然後，考慮到需求疲軟的背景，我的意思是，增加 EBITDA 的能力相當令人印象深刻，Vic。該團隊在AUV方面做得非常出色。生產線的 SG&A 給我留下了深刻的印象，尤其是礦物纖維方面。您能詳細說明一下是什麼推動了這一趨勢的發展嗎？展望今年下半年，這一水平的貢獻是否可持續？我想，也許到 2024 年還有更多工作要做嗎？

Do you want to take this, Chris?

克里斯，你想接受這個嗎？

Yes, Phil. So yes, on the manufacturing side, we expect to see probably continued productivity in the back half. We had a really strong productivity performance in the fourth quarter. So we're going to be lapping that in Q4 on the manufacturing side. So we expect a strong Q3, a little bit of flattishness in Q4.

是的，菲爾。所以，是的，在製造方面，我們預計下半年生產力可能會持續。第四季度我們的生產力表現非常強勁。因此，我們將在第四季度在製造方面進行研磨。因此，我們預計第三季度將表現強勁，第四季度則略有平淡。

On the overall, call it, SG&A., just remember, we had some timing items in the back half of the year. As I noted in my script, we were lapping some adjustments that were made in the back half of 2022. So expect to see us to continue to invest in our initiatives as we finish out the year, but we'll be very mindful of the rate and pace of our discretionary spend and investments given the overall play out of the economy and the volume.

總的來說，稱之為 SG&A。，請記住，我們在今年下半年有一些計時項目。正如我在腳本中指出的那樣，我們正在對 2022 年下半年進行的一些調整進行調整。因此，預計我們會在今年結束時繼續投資於我們的舉措，但我們會非常注意考慮到經濟和體量的整體表現，我們可自由支配支出和投資的比率和步伐。

Yes, Chris, is there more you guys could do potentially in 2024 on the productivity side if demand remains weak?

是的，Chris，如果需求仍然疲弱，2024 年你們在生產力方面還有更多可能做的事情嗎？

Yes, I'll stop short of commenting on 2024, but we look at productivity every year and continue to try and drive productivity improvement year in and year out, and that's part of what we've talked about in terms of our overall productivity goal of 3% improvement on adjusted COGS in Mineral Fiber.

是的，我不會對 2024 年發表評論，但我們每年都會關註生產力，並繼續年復一年地努力推動生產力提高，這是我們在總體生產力目標方面討論的一部分礦物纖維調整後的COGS 提高了3%。

And specifically to the back half, yes, there's more to go here. We -- our teams are really focused on -- have really good line of sight projects that they're working on. So we're not done. I think, really good progress in the first half of this year, but the team is not finished. We've got some more to do in the back half.

特別是後半部分，是的，這裡還有更多內容。我們——我們的團隊真正專注於——他們正在從事非常好的視線項目。所以我們還沒有完成。我認為，今年上半年確實取得了很好的進展，但團隊還沒有完成。下半場我們還有更多事情要做。

Our next question comes from the line of Susan Maklari with Goldman Sachs.

我們的下一個問題來自高盛的 Susan Maklari。

My first question is, Vic, you mentioned that you're seeing an overall improvement in the projects that are coming through for Architectural Specialties, just the mix there that's moving higher for you. Can you talk about the sustainability of that trend? And what that will mean for the cadence at which you can continue to see an improved margin in that segment as you target that 20% or low 20-plus percent range?

我的第一個問題是，維克，你提到你看到建築專業項目的整體改進，只是那裡的組合對你來說正在進步。您能談談這種趨勢的可持續性嗎？當您的目標是 20% 或 20% 以上的範圍時，這對於您可以繼續看到該細分市場利潤率提高的節奏意味著什麼？

Yes. I mean we're -- as you know, we've been on this journey to improve the overall EBITDA margin in that business to what would be a really world-class level of greater than 20% and get to that level. We were there before the pandemic as you'll remember, and we're working our way to get back there, bringing some of our newer acquisitions along the way.

是的。我的意思是，正如您所知，我們一直在努力將該業務的整體 EBITDA 利潤率提高到超過 20% 的真正世界級水平，並達到這個水平。正如您所記得的那樣，我們在大流行之前就在那裡，並且我們正在努力回到那裡，一路上帶來了一些新收購的產品。

And what's getting -- we had a 200 basis points improvement in that EBITDA margin last year. We're on track with a terrific performance in the second quarter on that to get back -- or to gain another 200-plus basis points of improvement this year. So we're well on our way to being there next year at that 20% EBITDA level.

結果是——去年我們的 EBITDA 利潤率提高了 200 個基點。我們有望在第二季度取得出色的業績，從而實現這一目標，或者說今年將再獲得 200 多個基點的改進。因此，我們明年將有望達到 20% 的 EBITDA 水平。

And what's driving that, Susan, is really a combination of really good operating leverage on the investments that we made. Remember, that was one of the headwinds is that we invested ahead of growth that put some burden on the business and we had to grow into those investments and get really good operating leverage. And that was -- that's probably been a major driver of it so far, and there's still more to go as we continue to get tailwinds from some of these larger projects like transportation, as we continue to do a better job on specifications so we can continue to take share in this category.

蘇珊，推動這一趨勢的實際上是我們所做投資的良好運營槓桿的結合。請記住，逆風之一是我們在增長之前進行投資，這給業務帶來了一些負擔，我們必須擴大這些投資並獲得真正良好的運營槓桿。到目前為止，這可能是它的主要驅動力，隨著我們繼續從交通等一些大型項目中獲得順風，我們將繼續在規範方面做得更好，這樣我們就可以做更多的事情繼續在這一類別中佔據份額。

There's volume opportunities to continue to grow. That's going to continue our operating leverage part of that equation. So again, we're confident. I think the team is focused on this. We're demonstrating to ourselves we can get this good operating leverage. We're doing a good job on pricing these projects with this new operating model in mind. So we have confidence that we're going to continue to march toward that this year and into next year.

銷量有繼續增長的機會。這將繼續我們的運營槓桿部分。所以，我們再次充滿信心。我認為團隊正在關注這一點。我們正在向自己證明我們可以獲得這種良好的運營槓桿。考慮到這種新的運營模式，我們在為這些項目定價方面做得很好。因此，我們有信心今年和明年將繼續朝著這個目標邁進。

Okay. And then following up on that a bit. It was good to see you back in the M&A market in July with BOK closing in there. As you think about capital allocation, what are you seeing in terms of the M&A pipeline? And I know that you also increased your repurchase authorization. So how are you thinking about the balance between the different uses and how that could come together?

好的。然後跟進一下。很高興看到您在 7 月份重返併購市場，其中 BOK 收盤。當您考慮資本配置時，您對併購渠道有何看法？而且我知道你們還增加了回購授權。那麼您如何考慮不同用途之間的平衡以及如何將其結合在一起？

Yes. We're really pleased with the BOK Modern acquisition. It's a great fit for our business. The leaders are staying on with us, which is a huge plus, they're very talented designers. It's going to be a great add to an extension of our business, too. So I'm really, really pleased with that. And I would just say we never left the acquisitions or the business development game. This has been the first in a while, so I understand that. But we're actively involved in this.

是的。我們對 BOK Modern 的收購感到非常滿意。這非常適合我們的業務。領導者們繼續留在我們身邊，這是一個巨大的優勢，他們是非常有才華的設計師。這也將成為我們業務擴展的一個重要補充。所以我對此真的非常非常滿意。我只想說，我們從未離開過收購或業務發展遊戲。這是一段時間以來的第一次，所以我理解這一點。但我們正在積極參與其中。

We still think this is a great use of our cash to accelerate our penetration into the specialty segment, especially at a 20% EBITDA level and higher ROICs. So I think this is -- it's our number two priority after, as Chris outlined, our number one priority using our free cash is to get -- is to invest back into this high ROIC business of ours. But secondly, using acquisitions and cash to bolt on more and more capabilities to make us even stronger in the marketplace and more valuable to our customers.

我們仍然認為，這是對我們現金的一個很好的利用，可以加速我們對專業領域的滲透，特別是在 20% 的 EBITDA 水平和更高的 ROIC 的情況下。所以我認為這是我們的第二要務，正如克里斯概述的那樣，我們使用我們的自由現金的第一要務是重新投資於我們的高投資回報率業務。其次，利用收購和現金來增強越來越多的能力，使我們在市場上更加強大，對客戶來說更有價值。

And then third, with the authorization, we have even more headroom here to continue to buy back our shares and support a growth dividend. So no change. As you're probably hearing, Susan, no change in our priorities in terms of our cash flow. I think there's just now that we're coming out of our July meeting, which we typically review with our Board, our 3-year strategic plan, I think there's a lot of confidence coming out of that room with the strategy we have in place and the projected cash flows that we can continue to do all 3 of these priorities.

第三，獲得授權後，我們有更多的空間來繼續回購我們的股票並支持增長股息。所以沒有改變。蘇珊，正如您可能聽到的那樣，我們在現金流方面的優先事項沒有變化。我認為我們剛剛結束 7 月份的會議，我們通常會與董事會一起審查我們的 3 年戰略計劃，我認為會議室裡對我們制定的戰略充滿信心以及我們可以繼續完成所有這三個優先事項的預計現金流量。

And again, a very -- we understand fortunate position with this business to be able to do all 3 of those capital allocation priorities given our strong free cash flow capability.

再說一次，我們了解這項業務的幸運之處在於，鑑於我們強大的自由現金流能力，能夠完成所有這三個資本配置優先事項。

Our next question comes from the line of Adam Baumgarten with Zelman & Associates.

我們的下一個問題來自 Adam Baumgarten 和 Zelman & Associates。

I think earlier in the year, you guys talked about a return to a more normal price increase cadence of usually February and August. Is there an August Mineral Fiber price increase out there in the market?

我想今年早些時候，你們談到了恢復到通常二月和八月的更正常的價格上漲節奏。市場上八月份礦物纖維價格是否上漲？

Yes, there is.

就在這裡。

Okay. Got it. And the magnitude, if you could share that?

好的。知道了。如果您能分享一下其規模嗎？

Sure, sure. It's 7%. Sorry, to make sure I get the right number out of, yes, 7%, we were successful in that February price increase. We're in the marketplace with the August price increase, get back to this normal cadence with our distribution partners in particular. So yes, again, as we -- as you know, last year's price increases were much bigger, right? We want to get back to our normal cadence and then price these -- or size these price increases in relation to the level of inflation that we're seeing to make sure that we cover inflation and we're able to expand our margins. So yes, the August one has been communicated.

一定一定。是7%。抱歉，為了確保我得到正確的數字，是的，7%，我們在 2 月份的提價中取得了成功。隨著八月份的價格上漲，我們進入了市場，特別是與我們的分銷合作夥伴恢復了正常的節奏。所以，是的，正如你所知，去年的價格漲幅要大得多，對嗎？我們希望回到正常的節奏，然後對這些產品進行定價，或者根據我們所看到的通貨膨脹水平來確定這些價格上漲的規模，以確保我們能夠覆蓋通貨膨脹並能夠擴大我們的利潤。所以是的，八月的通知已經傳達了。

Got it. And then if I just look at the revenue growth guidance, you maintained the midpoint, but you did pick up Mineral Fiber volumes modestly and you do have over 5 months of the BOK acquisition. Is there maybe a modest offset to those tailwinds?

知道了。然後，如果我只看收入增長指引，你會發現，你維持了中點，但你確實適度增加了礦物纖維產量，而且你確實有超過 5 個月的 BOK 收購時間。這些順風可能會得到適度的抵消嗎？

Yes. No, I mean I think as I outlined earlier, the range was contemplated in assessing multiple potential scenarios. So as we look towards the back half of the year, I just continue to point to the uncertainty associated with the broader macroeconomic environment and continue to drive AUV performance for the year and looking to expand margins in connection with that. So that's kind of how we're looking at the second half and the implied volume down high mid-single digits in the second half.

是的。不，我的意思是，正如我之前概述的那樣，這個範圍是在評估多種潛在情況時考慮的。因此，當我們展望今年下半年時，我只是繼續指出與更廣泛的宏觀經濟環境相關的不確定性，並繼續推動 AUV 今年的業績，並尋求擴大與此相關的利潤率。這就是我們對下半年的看法，以及下半年隱含交易量下降到中個位數的情況。

Our next question comes from the line of Stephen Kim with Evercore.

我們的下一個問題來自 Stephen Kim 和 Evercore 的對話。

I wanted to follow up on Arc Spec in the -- in particularly the acquisition pipeline. But you look at BOK Modern and it seems like they do a lot on the exteriors of buildings. And I was curious as to whether you could talk about whether you see an opportunity there to maybe get a little bit bigger on in terms of exterior versus interior opportunities?

我想跟進 Arc Spec，尤其是採集管道。但你看看 BOK Modern，你會發現他們在建築物的外部做了很多工作。我很好奇你是否可以談談你是否看到了一個機會，可以在外部與內部機會方面取得更大的發展？

And then also, could you describe a little bit when you look at that business -- sorry, not the BOK Modern business, but the Architectural Specialties segment overall, has the mix of product that you manufacture versus source, has that changed over time? And do you expect it to?

另外，您能否描述一下您對該業務的看法——抱歉，不是 BOK 現代業務，而是整個建築專業領域，您製造的產品與採購的產品的組合是否隨著時間的推移而發生了變化？你希望如此嗎？

Yes. So Stephen, let me take the BOK question in particular, and the fit. I think it's important to take a step back and recognize what we've been doing in Architectural Specialties over the last 10 years is, when we acquire these companies, we're acquiring capabilities that allow us to participate in more spaces in a commercial building.

是的。斯蒂芬，讓我特別談談 BOK 問題和契合度。我認為重要的是退後一步，認識到過去 10 年我們在建築專業領域所做的事情是，當我們收購這些公司時，我們正在獲得使我們能夠參與商業建築中更多空間的能力。

For example, when we -- way back, and you'll remember this when we bought Tectum, that moved us to the wall space with a very unique product. And so it really gave us a platform to expand our wall business beyond the ceiling plane. Similarly, when we bought ACGI, ACGI had terrific products for the walls. They had microperforations that allowed these products to go on the walls.

例如，當我們——很久以前，你會記得當我們購買 Tectum 時，我們把我們帶到了帶有非常獨特產品的牆壁空間。因此，它確實為我們提供了一個平台，將我們的牆壁業務擴展到天花板平面之外。同樣，當我們購買 ACGI 時，ACGI 有很棒的牆壁產品。它們有微孔，可以讓這些產品貼在牆上。

So our capabilities have been through these acquisitions have allowed us to extend our business to new spaces. And when I think about the BOK deal, it's very similar. They have very unique metal design capability that are not structural in nature, that extend us into a new space on the building, which is in the exterior building, primarily for driving sustainability solutions.

因此，通過這些收購，我們的能力使我們能夠將業務擴展到新的領域。當我想到韓國銀行的交易時，它非常相似。他們擁有非常獨特的金屬設計能力，本質上不是結構性的，它將我們擴展到建築物的新空間，即外部建築，主要用於推動可持續發展解決方案。

So it's a real natural fit with our metal business overall in terms of capabilities. And with their design expertise and their creative problem-solving on the exteriors, it extends our reach into that exterior space, if you will, an additional space in a commercial building. So I'd say we're going to continue to pursue these spaces just like we have with -- from ceilings to walls. We're going to continue to pursue these as we have success in demonstrating our ability to win in those spaces, leveraging these capabilities.

因此，就能力而言，它與我們的金屬業務整體非常契合。憑藉他們的設計專業知識和對外部問題的創造性解決，它將我們的觸角延伸到了外部空間，如果你願意的話，可以是商業建築中的額外空間。所以我想說，我們將繼續追求這些空間，就像我們所做的那樣——從天花板到牆壁。我們將繼續追求這些目標，因為我們已經成功地展示了我們利用這些能力在這些領域獲勝的能力。

Overall, as a mix, you're getting to our supply chain. And as you know, we have a hybrid, make sell, buy sell model. We don't make everything that we sell and have specified in the marketplace. That mix is evolved over time around that 50% in and out type of level and proportionality. And again, as we buy companies, it kind of moves and then we continue to flex in our third-party network.

總體而言，作為一個組合，您將進入我們的供應鏈。如您所知，我們有混合的生產銷售、購買銷售模式。我們並不生產我們在市場上銷售和指定的所有產品。這種混合隨著時間的推移圍繞著 50% 的進出類型的水平和比例而演變。再說一遍，當我們購買公司時，它會發生變化，然後我們繼續在我們的第三方網絡中靈活運用。

With this BOK acquisition, we're going to continue to leverage their third-party network as well as opportunities to move some of this new business into some of our existing factories to optimize the supply chain around the capacity inside being able to flex with this high growth into our third-party network. So we're committed to that. Stephen, it's kind of a long-winded answer, but it's -- we're committed to that hybrid, make sell, buy sell model. It's evolved over time, but it's not far from the 50-50 in any given period.

通過此次 BOK 收購，我們將繼續利用他們的第三方網絡以及將部分新業務轉移到我們現有工廠的機會，以圍繞內部產能優化供應鏈，從而能夠靈活應對這一挑戰我們的第三方網絡的高速增長。所以我們致力於此。斯蒂芬，這是一個冗長的答案，但它是 - 我們致力於混合，製造銷售，購買銷售模式。它隨著時間的推移而演變，但在任何特定時期都離 50-50 不遠。

Got you. That's helpful. Can you quantify the opportunity -- the broader opportunity or the size of the market for these sort of decorative exterior-type products versus what we generally would think of as sort of more interior-type opportunities that Arc Spec has historically targeted? And then also, can you give us a sense for -- I think you mentioned that there would be an impact from a lower incentive comp -- you had lower incentive compensation kind of coming last year.

明白你了。這很有幫助。您能否量化機會——此類裝飾性外部類型產品的更廣泛機會或市場規模與我們通常認為的 Arc Spec 歷史上定位的更多內部類型機會相比？然後，您能否讓我們了解一下——我想您提到過較低的激勵薪酬會產生影響——去年您的激勵薪酬較低。

I think in the back half, I can't remember whether it was third, fourth quarter, can you just sort of remind us sort of how that's going to affect things as we go forward over the next couple of quarters?

我想在後半段，我不記得是第三季度還是第四季度，你能提醒我們這將如何影響我們接下來幾個季度的進展嗎？

Yes, Stephen, this is Chris. I'll take that last question first. So yes, we saw the benefit in 2022. So my point in looking at and kind of modeling out SG&A is that we're going to be lapping that tailwind in the back half of '23. So as you think about SG&A progression, that was just one thing to kind of remind everyone about.

是的，斯蒂芬，這是克里斯。我先回答最後一個問題。所以，是的，我們在 2022 年看到了好處。因此，我在研究 SG&A 並對其進行建模時的觀點是，我們將在 23 年後半段順風順水。因此，當您考慮 SG&A 進展時，這只是需要提醒大家的一件事。

Yes, Stephen, on the first -- the sizing the opportunity, I think, right now, we're going to stick to the incrementality of this new space as we go with this new acquisition. And then maybe over time, this will become clearer for everybody. It's obviously -- I mean, you could pick any numbers, right? So I'd rather not get into that at this point. But it's incremental to our existing business, and we're excited about that.

是的，斯蒂芬，首先，我認為，在確定機會大小時，我們將在進行這項新收購時堅持這一新領域的增量。也許隨著時間的推移，這一點對每個人來說都會變得更加清晰。很明顯——我的意思是，你可以選擇任何數字，對吧？所以我現在不想討論這個問題。但這是我們現有業務的增量，我們對此感到興奮。

Our next question comes from the line of John Lovallo with UBS.

我們的下一個問題來自瑞銀集團的約翰·洛瓦洛 (John Lovallo)。

The first one here is how are you thinking about Mineral Fiber mix in the second half? I mean it seems like it may have been a bit below expectations in the first half. So just curious if this is timing and do you expect improvement as we move into the second half?

第一個是您如何看待下半年的礦物纖維組合？我的意思是，上半年的業績似乎有點低於預期。所以只是好奇這是否是時機，您期望在我們進入下半年時有所改善嗎？

Yes. Let me start, and I'll let Chris add some color. Mix -- our mix up has been a very important part of our overall AUV growth story over many years now, right, because the industry wants to naturally mix up every time it does a renovation, it puts new stuff in. And as long as you're innovating into that design curve, you're pulling the latest and greatest products that drives a positive product mix.

是的。讓我開始吧，我會讓克里斯添加一些顏色。混合——多年來，我們的混合一直是我們整體 AUV 增長故事的一個非常重要的部分，對吧，因為該行業希望每次進行翻新時都能自然地混合，它會放入新的東西。你正在沿著這條設計曲線進行創新，你正在推出最新、最好的產品，從而推動積極的產品組合。

And our mix continues to be -- our product mix, John, continues to be positive and has remained positive even through the downturn. So the one thing that happens in the mix that we end up talking a lot about is the mix between channels, right, that can -- which is very timing related because the patterns in these channels can be slightly different depending on inventory builds and so forth. And we end up talking about that a lot.

我們的產品組合仍然是——約翰，我們的產品組合仍然是積極的，即使在經濟低迷時期也仍然保持著積極的態度。因此，我們最終討論的混合中發生的一件事是渠道之間的混合，對，這可以 - 這與時間非常相關，因為這些渠道中的模式可能會略有不同，具體取決於庫存建設，所以向前。我們最終談論了很多。

So it's one of those things that's more difficult to forecast, frankly, because, as you know, customers in a quarter, if they decide to build inventory, we're going to support that, and that can outsize that channel in the quarter, especially if it's a lower AUV channel. So it's one of the harder things to forecast, just to be honest with you, and that's probably some of the variability that you're alluding to. So with that context, let me just -- because Chris is...

坦率地說，這是更難預測的事情之一，因為正如你所知，一個季度的客戶如果決定建立庫存，我們將支持這一點，這可能會在該季度擴大該渠道的規模，特別是如果它是較低的AUV 通道。因此，老實說，這是更難預測的事情之一，這可能是您提到的一些可變性。因此，在這樣的背景下，讓我——因為克里斯是……

Yes, additionally add just a little more color on the timing element of it. You saw kind of the timing in the first quarter and then again in the second quarter. So it just speaks to the variability and the challenge in forecasting that element of AUV. But again, just highlighting our AUV guide for the year at being above-average Mineral Fiber AUV growth is really what we've incorporated here in terms of our full year revised guidance.

是的，另外在它的計時元素上添加一點顏色。你在第一季度看到了一些時機，然後在第二季度又看到了時機。因此，它只是說明了預測 AUV 要素的可變性和挑戰。但再次強調，我們今年的 AUV 指南高於平均礦物纖維 AUV 增長，這實際上是我們在全年修訂指南中納入的內容。

Okay. That makes sense. I guess what I'm trying to kind of wrap my head around here is that if you look at the full year Mineral Fiber adjusted EBITDA margin outlook of 37.5%, it's about, call it, 300 basis points below the second quarter result of 40.4%. It just seems like that's unusually wide looking historically. So just trying to figure out what's sort of driving that?

好的。這就說得通了。我想我在這裡想表達的是，如果你看看全年礦物纖維調整後的 EBITDA 利潤率前景為 37.5%，那麼大約比第二季度的 40.4% 低 300 個基點%。從歷史上看，這似乎異常廣泛。那麼只是想弄清楚是什麼推動了這一點？

I think it's the level of uncertainty in the back half actually, John. I think we're still keeping some wide ranges where we think it's appropriate, just given some of the lack of visibility in some of these areas. But I think we're managing the business on the -- to grow our AUV and to make sure that, that falls through to expand margins in the Mineral Fiber business. I think that's what you're seeing so far. I think that's what you can expect in the second half.

我認為這實際上是後半段的不確定性，約翰。我認為我們仍然在我們認為合適的地方保留了一些廣泛的範圍，只是考慮到其中一些領域缺乏可見性。但我認為我們正在管理業務——發展我們的 AUV，並確保這一點能夠擴大礦物纖維業務的利潤。我想這就是你目前所看到的。我認為這就是下半場你可以期待的。

Our next question comes from the line of Rafe Jadrosich with Bank of America.

我們的下一個問題來自美國銀行 Rafe Jadrosich 的電話。

Just a follow-up on the Mineral Fiber AUV. Just what does the guidance imply for realization on that August price hike? And then what's sort of been the acceptance of the channel and the installers on pricing, just kind of given the softer environment that's out there?

只是礦物纖維 AUV 的後續產品。該指導意見對於實現 8 月份的價格上漲意味著什麼？那麼，考慮到目前較為疲軟的環境，渠道和安裝商對定價的接受程度如何？

Yes, I'd say -- Rafe, this is Chris. The expected realization is really in line with our historical price realization. So no change there and nothing really to speak about in terms of receptivity in -- with our channel partners.

是的，我會說——拉夫，這是克里斯。預期實現確實與我們的歷史價格實現一致。因此，我們的渠道合作夥伴在接受度方面沒有任何變化，也沒有什麼真正值得談論的。

Got it. Okay. And then as we think of the Mineral Fiber volume guidance for the second half of the year, obviously, you kind of raised the high end of the target now down low to mid-single digits to mid-single digits. Like what's the kind of specific thing that changed that kind of gave you comps? Like where are you getting more visibility that's giving you the confidence to sort of increase that?

知道了。好的。然後，當我們考慮今年下半年的礦物纖維產量指導時，顯然，您將目標的上限提高到低至中個位數到中個位數。比如是什麼具體的事情改變了你的補償？比如你在哪裡獲得了更多的知名度，讓你有信心提高知名度？

And then can you just talk about the cadence between 3Q and 4Q on a year-over-year basis, like you have a much easier comp in the fourth quarter, but I think that the outlook has kind of softened through the year. Just how should we think about that in the back half?

然後你能談談第三季度和第四季度之間同比的節奏嗎，就像第四季度的情況要容易得多，但我認為這一年的前景有所減弱。只是我們應該如何考慮後半部分呢？

Yes, I'm going to stop short of giving quarterly, call it, volume guidance. But I mean, I talked earlier about what we'd expect in the back half. And really just keep in mind the seasonality associated with the business with Q2 and Q3 typically the strongest quarters from a seasonality perspective. But again, a lot of uncertainty associated with, again, the back half. So I'd just point to the second half volume comments that I made of being down high mid-single digits in the second half of this year.

是的，我將不再提供季度銷量指導。但我的意思是，我之前談到了我們對後半場的期望。實際上，請記住與業務相關的季節性，從季節性角度來看，第二季度和第三季度通常是最強勁的季度。但同樣，後半場也存在很多不確定性。因此，我只想指出我對今年下半年銷量下降了中高個位數的評論。

Vic, do you want to talk more about that?

維克，你想多談談嗎？

Yes. And Rafe on the confidence or what we're seeing, we're now into the third quarter. I would say the biggest change really for us versus where we were at the beginning of the year on the back half is the on-the-ground sentiment and conversations with our customers and the activity they see some of their backlogs that are building, so they have better visibility to their backlogs, not great, but better than what we had at the beginning of the year.

是的。拉夫（Rafe）的信心或我們所看到的，我們現在進入了第三季度。我想說，與今年年初下半年相比，對我們來說最大的變化是實地情緒和與客戶的對話，以及他們看到的一些積壓訂單的活動，所以他們對積壓訂單有了更好的了解，雖然不是很好，但比我們年初的情況要好。

And that's given us some confidence that kind of the worst-case scenario that we had in the downside of our guidance wasn't likely to happen given what our customers are seeing now in terms of their activity. So I would say we're looking at all the indicators. We really triangulate a lot of different things to try to get a read on the pipeline of activity coming into the market. I would say that's probably the biggest change is what we're hearing from our customers. That's been encouraging.

這給了我們一些信心，鑑於我們的客戶現在所看到的活動情況，我們在指導意見的負面影響中遇到的最壞情況不太可能發生。所以我想說我們正在考慮所有指標。我們確實對許多不同的事情進行了三角測量，試圖了解進入市場的活動渠道。我想說，這可能是我們從客戶那裡聽到的最大的變化。這令人鼓舞。

That concludes today's question-and-answer session. At this time, I would like to turn it back to Vic Grizzle, President and CEO, for closing remarks.

今天的問答環節到此結束。現在，我想請總裁兼首席執行官維克·格里茲爾 (Vic Grizzle) 致閉幕詞。

Yes. Again, I want to thank everybody for joining our call today. Again, I think we're in a really good position for us to finish the year out and deliver on our guidance ranges. And I'm really pleased with how our teams are executing and how the resiliency of our model is coming to light and shining through. And again, we look forward to talking to you in a quarter now on a continuation of good execution and the resilience of our business model. Thank you all, and have a good week.

是的。我要再次感謝大家今天加入我們的電話會議。再說一遍，我認為我們處於非常有利的位置，可以完成今年的工作並實現我們的指導範圍。我對我們團隊的執行方式以及我們模型的彈性如何顯現和閃耀感到非常滿意。我們再次期待在一個季度內與您討論我們業務模式的良好執行力和彈性的延續。謝謝大家，祝您一周愉快。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Goodbye.

感謝您參加今天的會議。這確實結束了該程序。您現在可以斷開連接。再見。