Acuity Brands Inc (AYI) 2023 Q2 法說會逐字稿

Good morning, and welcome to the Acuity Brands Fiscal 2023 Second Quarter Earnings Call. (Operator Instructions) Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Charlotte McLaughlin, Vice President of Investor Relations. Charlotte, please go ahead.

早上好，歡迎來到 Acuity Brands 2023 財年第二季度財報電話會議。 （操作員說明）請注意，今天的會議正在錄製中。我現在想把會議交給投資者關係副總裁 Charlotte McLaughlin。夏洛特，請繼續。

Thank you, Liz. Good morning, and welcome to the Acuity Brands Fiscal 2023 Second Quarter Earnings Call. As a reminder, some of our comments today may be forward-looking statements based on our management's beliefs and assumptions and information currently available to our management at this time. These beliefs are subject to known and unknown risks and uncertainties, many of which may be beyond our control, including those detailed in our periodic SEC filings. Please note that our company's actual results may differ materially from those anticipated, and we undertake no obligation to update these results.

謝謝你，麗茲。早上好，歡迎來到 Acuity Brands 2023 財年第二季度財報電話會議。提醒一下，我們今天的一些評論可能是基於我們管理層的信念和假設以及我們管理層目前可獲得的信息的前瞻性陳述。這些信念受到已知和未知的風險和不確定性的影響，其中許多可能超出我們的控制範圍，包括我們定期向美國證券交易委員會提交的文件中詳述的那些。請注意，我們公司的實際結果可能與預期存在重大差異，我們不承擔更新這些結果的義務。

Reconciliations of certain non-GAAP financial metrics with their corresponding GAAP measures are available in our 2023 second quarter earnings release, which is available on our Investor Relations website at www.investors.acuitybrands.com.

某些非 GAAP 財務指標與其相應的 GAAP 措施的對賬可在我們的 2023 年第二季度收益報告中找到，該報告可在我們的投資者關係網站 www.investors.acuitybrands.com 上查閱。

With me this morning is Neil Ashe, our Chairman, President and Chief Executive Officer, who will provide an update on our strategy and our fiscal second quarter highlights and Karen Holcom, our Senior Vice President and Chief Financial Officer, who will walk us through our fiscal second quarter financial performance. There will be an opportunity for Q&A at the end of this call. (Operator Instructions) We are webcasting today's conference call live.

今天早上和我在一起的是我們的董事長、總裁兼首席執行官尼爾·阿什，他將介紹我們的戰略和第二財季亮點的最新情況，我們的高級副總裁兼首席財務官凱倫·霍爾科姆將向我們介紹我們的財年第二季度財務業績。本次電話會議結束時將有機會進行問答。 （操作員說明）我們正在網絡直播今天的電話會議。

Thank you for your interest in Acuity Brands. I will now turn the call over to Neil Ashe.

感謝您對 Acuity Brands 的關注。我現在將電話轉給 Neil Ashe。

Thank you, Charlotte. Good morning, and welcome to all of you joining us on this call. We delivered solid performance again in the second quarter of fiscal '23. We grew sales in both our lighting and spaces businesses, expanded adjusted operating profit and grew adjusted diluted earnings per share. We generated strong cash flow from operations and created permanent value for shareholders through share repurchases.

謝謝你，夏洛特。早上好，歡迎大家加入我們的電話會議。我們在 23 財年第二季度再次取得了穩健的業績。我們在照明和空間業務方面實現了銷售額增長，擴大了調整後的營業利潤並增加了調整後的攤薄每股收益。我們從運營中產生了強勁的現金流，並通過股票回購為股東創造了永久價值。

Both our lighting and spaces businesses delivered solid revenue while improving adjusted operating profit. In the Acuity Brands, lighting and Lighting Controls business, our strategy of increasing product vitality and service levels continue to differentiate us in the market.

我們的照明和空間業務都實現了可觀的收入，同時提高了調整後的營業利潤。在 Acuity 品牌、照明和照明控制業務中，我們提高產品活力和服務水平的戰略繼續使我們在市場上脫穎而出。

A few weeks ago, we hosted our annual sales conference in Atlanta, NEXT 23. It was a great event, where we brought together our network of independent sales agents and shared our strategic vision for ABL and introduced new products. I'd like to take a minute to describe our independent sales network.

幾週前，我們在亞特蘭大舉辦了年度銷售會議 NEXT 23。這是一次很棒的活動，我們匯集了我們的獨立銷售代理網絡，分享了我們對 ABL 的戰略願景並介紹了新產品。我想花點時間介紹一下我們的獨立銷售網絡。

Stated simply, we have the best agency network in the industry. To give you an idea of their scope, we have about 80 agents in North America, and they have about 50 employees per agency. In other words, we have over 4,000 local sales and sales support people working for us every day throughout North America.

簡而言之，我們擁有業內最好的代理網絡。為了讓您了解他們的範圍，我們在北美有大約 80 個代理商，每個代理商大約有 50 名員工。換句話說，我們在北美每天有 4,000 多名本地銷售和銷售支持人員為我們工作。

While our agents are independent, they are exclusive to us for key controls and do not represent the other majors. They are generally the largest in their market, and we are their most important partner.

雖然我們的代理人是獨立的，但他們是我們專有的關鍵控制權，不代表其他專業。他們通常是他們所在市場中最大的，而我們是他們最重要的合作夥伴。

Our partnership works very well. With our product vitality and service efforts, we make products that deserve to be chosen and our independent sales agents ensure that they are chosen.

我們的合作夥伴關係運作良好。以我們的產品活力和服務努力，我們做出值得選擇的產品，我們的獨立銷售代理確保他們被選擇。

Product vitality is driving success across our portfolio, and during NEXT 23, we introduced several new products. I want to highlight a couple here. The first was the new nLight AIR System Input Device. This is an indoor controller that can be used in multiple spaces, including office, commercial and retail. The device converts analog outputs to wireless broadcast to control intelligent luminaires. This reduces the need for complex wiring solutions during installation and reduces the associated cost for the customer.

產品活力正在推動我們的產品組合取得成功，在 NEXT 23 期間，我們推出了幾款新產品。我想在這裡強調一對。第一個是新的 nLight AIR 系統輸入設備。這是一款室內控制器，可用於多種空間，包括辦公室、商業和零售。該設備將模擬輸出轉換為無線廣播以控制智能燈具。這減少了安裝過程中對複雜佈線解決方案的需求，並降低了客戶的相關成本。

The second was the nLight AIR rPOD Micro. This is a battery-powered wall switch that can be used as a traditional wall switch or as a remote, providing control from anywhere within a build space. This is a really exciting extension of the technology and an elegant response to our customers' need for flexibility.

第二個是 nLight AIR rPOD Micro。這是一款電池供電的牆壁開關，可用作傳統的牆壁開關或遙控器，可從建築空間內的任何地方進行控制。這是一項真正令人興奮的技術擴展，也是對我們客戶對靈活性的需求的優雅回應。

These and other products continue to gain market attention. This quarter, several of our architectural lighting brands, A-Light, Eureka and Luminis, won a total of eight Good Design Awards from the Chicago Athenaeum, which recognizes products and industry leaders in design and manufacturing that have chartered new directions for innovation.

這些和其他產品繼續獲得市場關注。本季度，我們的幾個建築照明品牌 A-Light、Eureka 和 Luminis 共獲得了芝加哥雅典娜神廟頒發的八項優秀設計獎，該獎項旨在表彰設計和製造領域的產品和行業領導者，為創新開闢了新的方向。

Now moving to our Intelligent Spaces Group. The spaces team continued to perform well, delivering another quarter of solid sales and operating profit growth, driven by the continued success of Distech. Distech is winning because we have the best digital control solutions in the market. It's technology is open protocol, which means you can connect our controller to most new or existing systems in a build space, giving our customers significant flexibility.

現在轉到我們的智能空間組。在 Distech 持續成功的推動下，空間團隊繼續表現良好，實現了又一個季度的穩健銷售和營業利潤增長。 Distech 之所以獲勝，是因為我們擁有市場上最好的數字控制解決方案。它的技術是開放協議，這意味著您可以將我們的控制器連接到構建空間中的大多數新系統或現有系統，從而為我們的客戶提供極大的靈活性。

We are also winning because Distech goes to market through independent system integrators. We are continually curating the highest quality network of SIs in each market in which we compete.

我們也取得了成功，因為 Distech 通過獨立的系統集成商進入市場。我們不斷在我們競爭的每個市場中策劃最高質量的 SI 網絡。

Our focus is on expanding the addressable market for Distech, which we have started to do in two ways. The first is geographic, as we mentioned last quarter. Today, we sell our controls primarily in the U.S., Canada and France, and we are expanding our presence in the U.K. and in the future in Asia. As we enter new markets, we are identifying and recruiting the highest-quality SIs as our partners.

我們的重點是擴大 Distech 的潛在市場，我們已經開始以兩種方式開展這項工作。正如我們上個季度提到的，第一個是地理因素。今天，我們主要在美國、加拿大和法國銷售我們的控件，並且我們正在擴大我們在英國的業務，並在未來擴展到亞洲。當我們進入新市場時，我們正在確定並招募最優質的 SI 作為我們的合作夥伴。

Second, we believe that any control that is currently mechanical or analog will become digital over time. So we are increasing what we can control and build spaces. This will provide us a second vector for continued growth.

其次，我們相信，隨著時間的推移，任何目前是機械或模擬的控制都將變成數字化的。所以我們正在增加我們可以控制和建造空間的東西。這將為我們提供第二個持續增長的載體。

Finally, I also joined our spaces team at the AHR Expo in Atlanta, where HVACR professionals gathered to share ideas and to showcase technology. It was great to hear firsthand from the SIs there, how differentiated our Distech and Atrius products are.

最後，我還在亞特蘭大的 AHR 博覽會上加入了我們的空間團隊，HVACR 專業人士聚集在那里分享想法和展示技術。很高興從那裡的 SI 那裡聽到第一手資料，了解我們的 Distech 和 Atrius 產品有多麼與眾不同。

Now looking to the rest of fiscal 2023. We've been intentional around our product vitality and service efforts and how we operate the business. We have demonstrated our ability to manage price and cost, both in our go-to-market efforts and in our operations. Today, we are in greater control of the things we can control than we have ever been.

現在展望 2023 財年的剩餘時間。我們一直在關注我們的產品活力和服務工作以及我們的業務運營方式。我們已經展示了我們在進入市場的努力和我們的運營中管理價格和成本的能力。今天，我們比以往任何時候都更能控制我們能控制的事情。

As you know, there are meaningful changes in the economic climate. During the quarter, we began to see a slowing in the order rate for our project business, while we continue to work through our extended backlog. We believe that the slower order rate is driven by the lead time compression that we discussed last quarter and now the changing C&I lending environment.

如您所知，經濟環境發生了有意義的變化。在本季度，我們開始看到項目業務的訂單率放緩，同時我們繼續處理長期積壓的訂單。我們認為，較慢的訂單率是由我們上個季度討論的交貨時間壓縮和現在不斷變化的 C&I 貸款環境驅動的。

At the same time, our Contractor Select business continued to be strong. We will continue our focus on end markets and identifying new ways to grow.

與此同時，我們的承包商精選業務繼續保持強勁勢頭。我們將繼續關注終端市場並確定新的增長方式。

As we deal with these changing market conditions, our focus is on generating profits and turning those profits into cash. We are continuing to manage the price/cost relationship and we'll continue to generate strong cash flow.

在應對這些不斷變化的市場條件時，我們的重點是創造利潤並將這些利潤轉化為現金。我們將繼續管理價格/成本關係，我們將繼續產生強勁的現金流。

In closing, we entered the second half of fiscal '23 with our strategy unchanged. We are in control of what we can control, and we are confident in our ability to adapt to the changing market conditions and requirements of our customers.

最後，我們以不變的戰略進入了 23 財年的下半年。我們控制著我們能控制的東西，我們對適應不斷變化的市場條件和客戶要求的能力充滿信心。

Now I'll turn the call over to Karen, who will update you on our second quarter performance.

現在我會把電話轉給凱倫，她會向您介紹我們第二季度的表現。

Thank you, Neil. We delivered a solid performance in the second quarter of 2023. Sales in both businesses grew, delivering improved adjusted operating profit and margins and adjusted diluted EPS. We generated strong cash flow from operations and continued to allocate capital effectively.

謝謝你，尼爾。我們在 2023 年第二季度取得了穩健的業績。兩項業務的銷售額均有所增長，從而提高了調整後的營業利潤和利潤率以及調整後的攤薄每股收益。我們從運營中產生了強勁的現金流，並繼續有效地配置資本。

In the second quarter, we generated net sales of $944 million, which is 4% higher than the prior year. This was largely due to price with both the ABL and ISG businesses contributing to the growth during the quarter. Operating profit in the second quarter was $112 million and adjusted operating profit increased $10 million to $132 million from the prior year. Adjusted operating profit margin improved 50 basis points over the prior year to 14%. The improvement in adjusted operating profit and adjusted operating profit margin was a result of the increase in gross profit performance as we successfully managed price and cost.

第二季度，我們實現了 9.44 億美元的淨銷售額，比上年增長 4%。這主要是由於 ABL 和 ISG 業務的價格對本季度的增長做出了貢獻。第二季度營業利潤為 1.12 億美元，調整後營業利潤較上年同期增加 1000 萬美元至 1.32 億美元。調整後的營業利潤率比上年提高 50 個基點，達到 14%。調整後營業利潤和調整後營業利潤率的改善是由於我們成功地管理了價格和成本，毛利潤表現有所提高。

Finally, we continued to grow adjusted diluted earnings per share. Our diluted earnings per share of $2.57 was an increase of $0.44 or 21% year-over-year while our adjusted diluted earnings per share of $3.06 increased $0.49 or 19% over the prior year. The growth in adjusted diluted earnings per share was primarily due to higher operating profit and lower shares outstanding due to the share repurchases.

最後，我們繼續增加調整後的稀釋後每股收益。我們的攤薄後每股收益為 2.57 美元，同比增長 0.44 美元或 21%，而調整後的攤薄後每股收益為 3.06 美元，同比增長 0.49 美元或 19%。調整後攤薄每股收益的增長主要是由於營業利潤增加和股票回購導致流通股減少。

Moving to our segment performance review. ABL, net sales grew to $891 million, an increase of 3% compared with the prior year. This increase was primarily driven by higher year-over-year sales in our independent sales network, the direct sales network and the retail channel.

轉到我們的部門績效審查。 ABL，淨銷售額增長至 8.91 億美元，比上年增長 3%。這一增長主要是由於我們的獨立銷售網絡、直銷網絡和零售渠道的銷售額同比增長所致。

As Neil mentioned, the order rate related to our project business slowed during the quarter, However, our Contractor Select business targeted at distributors and retail continued to grow.

正如 Neil 所提到的，與我們的項目業務相關的訂單率在本季度放緩，但是，我們針對分銷商和零售的承包商選擇業務繼續增長。

ABL's operating profit was $124 million, an increase of 6% versus the prior year with ABL adjusted operating profit at $133 million, an increase of 5% versus the prior year. The adjusted operating profit margin was 15%, which was 30 basis points better than last year. The improvement was a result of our ability to manage price and cost.

ABL 的營業利潤為 1.24 億美元，比上年增長 6%，ABL 調整後的營業利潤為 1.33 億美元，比上年增長 5%。調整後的營業利潤率為 15%，比去年高出 30 個基點。改進是我們管理價格和成本的能力的結果。

Now moving to ISG. The spaces segment continued to perform well with another good quarter of net sales growth and improved adjusted operating profit. Sales in the second quarter of 2023 were $58 million, an increase of $8 million or 16% versus the prior year, primarily as a result of the growth in Distech. During the quarter, both Distech and Atrius delivered growth across new and existing customers.

現在轉向 ISG。空間部門繼續表現良好，淨銷售額又實現了良好的季度增長，調整後的營業利潤也有所改善。 2023 年第二季度的銷售額為 5800 萬美元，比上年增長 800 萬美元或 16%，這主要是由於 Distech 的增長。本季度，Distech 和 Atrius 都實現了新老客戶的增長。

Operating profit in the second quarter of 2023 increased to approximately $6 million this quarter, with ISG adjusted operating profit at $11 million.

本季度 2023 年第二季度營業利潤增至約 600 萬美元，ISG 調整後營業利潤為 1100 萬美元。

Now I want to expand on our cash flow performance. We generated $306 million of cash flow from operating activities for the first 6 months of fiscal 2023, an increase of $179 million over the prior year's first half, driven largely by improvements in working capital. Last year, we invested in inventory in order to support our growth as well as insulate our production facilities from inconsistent supply availability with the intention of working down that inventory over several quarters, which we have done. We are now down 16 inventory days from the peak in February of 2022, and we have brought inventory levels down by over $50 million sequentially from the first quarter of fiscal 2023. We also invested $36 million in capital expenditures and $124 million to repurchase approximately 700,000 shares during the first half of fiscal 2023.

現在我想擴大我們的現金流量表現。 2023 財年前 6 個月，我們從經營活動中產生了 3.06 億美元的現金流，比上年上半年增加了 1.79 億美元，這主要是由於營運資金的改善。去年，我們投資於庫存以支持我們的增長，並使我們的生產設施免受供應可用性不一致的影響，目的是在幾個季度內減少庫存，我們已經做到了。我們現在的庫存天數比 2022 年 2 月的峰值減少了 16 個，而且從 2023 財年第一季度開始，我們的庫存水平連續下降了 5000 萬美元以上。我們還投入了 3600 萬美元的資本支出和 1.24 億美元來回購大約 700,000 2023 財年上半年的股票。

As we said before, our capital allocation priorities remain the same. We have invested for growth in our current businesses through R&D and CapEx. We've expanded our platform through acquisitions as evidenced by the purchase of OPTOTRONIC in our lighting business. We've maintained our dividend and we've created a permanent shareholder value through over $1.1 billion of share repurchases since the fourth quarter of fiscal 2020, which was funded by our organic cash flow generation.

正如我們之前所說，我們的資本配置重點保持不變。我們通過研發和資本支出投資於當前業務的增長。我們通過收購擴展了我們的平台，在我們的照明業務中購買 OPTOTRONIC 就是證明。自 2020 財年第四季度以來，我們維持了股息，並通過超過 11 億美元的股票回購創造了永久的股東價值，這是由我們產生的有機現金流提供資金的。

Before I turn the call to the operator for questions, I want to summarize our performance. We continued to deliver solid performance in the second quarter of 2023. We grew sales in both our lighting and spaces businesses, we improved adjusted operating profit and margins, and grew adjusted diluted earnings per share. We generated strong cash flow from operations and created a permanent value for shareholders through share repurchases. Our guidance provided for fiscal 2023 remains unchanged, and we are continuing to focus on what we can control and position ourselves to quickly adapt to changing market conditions.

在我將電話轉給接線員提問之前，我想總結一下我們的表現。我們在 2023 年第二季度繼續取得穩健的業績。我們的照明和空間業務的銷售額均有所增長，我們提高了調整後的營業利潤和利潤率，並增加了調整後的攤薄每股收益。我們從運營中產生了強勁的現金流，並通過股票回購為股東創造了永久價值。我們為 2023 財年提供的指引保持不變，我們將繼續關注我們可以控制和定位的內容，以快速適應不斷變化的市場條件。

Thank you for joining us today. I will now pass you over to the operator to take your questions.

感謝您今天加入我們。我現在將您轉交給接線員回答您的問題。

Thank you. Our first question comes from Tim Wojs at Baird.

謝謝。我們的第一個問題來自 Baird 的 Tim Wojs。

Nice job on the quarter. Maybe just kind of starting off on the sales side. Just wondering if you can maybe add a little bit of color on kind of what you're seeing on the order rate front that you alluded to and just how those orders maybe trended through the quarter, both on a project basis and in distribution? And then how do you think we should maybe think about the back half of the year from a revenue perspective, just given some of the slowing you talked about?

本季度幹得好。也許只是從銷售方面開始。只是想知道您是否可以在您提到的訂單率方面添加一些顏色，以及這些訂單在本季度的趨勢如何，無論是在項目基礎上還是在分配方面？然後你認為我們應該如何從收入的角度考慮下半年，只是考慮到你談到的一些放緩？

Yes. So Karen, why don't I start and you add anything at the end. So the big picture, let's break down kind of the lighting business into several component parts. We'll focus on the projects through C&I. And that's where we started to see some of the softening in the order rate.

是的。凱倫，為什麼我不開始，你在最後添加任何內容。所以總的來說，讓我們把照明業務分解成幾個組成部分。我們將通過 C&I 專注於項目。這就是我們開始看到訂單率有所下降的地方。

We think that is related to two things, Tim. The first is the compression of the lead times as we started to introduce last quarter. The -- for context, those lead times now are down about -- are running currently down about 30% from where they were at the peak, which was in the fourth quarter of fiscal 2022. So that -- as you see those compressing, obviously, there's projects that would have been ordered later that have already been ordered.

蒂姆，我們認為這與兩件事有關。首先是我們上個季度開始推出時交貨時間的壓縮。 - 就上下文而言，這些交貨時間現在已經下降了大約 - 目前比 2022 財年第四季度的峰值下降了約 30%。所以 - 正如你所看到的那樣，顯然，有些項目本來可以稍後訂購，但已經訂購了。

Second, on the distributor side, there's two ways to think about the distributors. The first is where they're managing that project business. So obviously, that's correlated to that project business. That's where we referred to the stock and flow last quarter. The second is around inventory that they purchased for resale, which is largely our Contractor Select portfolio. That portfolio grew in excess of where the rest of the business.

其次，在分銷商方面，有兩種方式來考慮分銷商。第一個是他們管理項目業務的地方。很明顯，這與該項目業務相關。這就是我們上個季度提到存量和流量的地方。第二個是圍繞他們為轉售而購買的庫存，這主要是我們的承包商精選產品組合。該投資組合的增長超過了其他業務。

So as we look forward, we think the market is presenting us with mixed signals. Obviously, there's some economic turmoil. The C&I lending rate, federal loan survey would indicate that there's fairly significant tightening on the C&I side, which we -- which gives us pause. At the same time, we're -- the parts of our business, like Contractor Select that are around everyday products are performing really well.

因此，當我們展望未來時，我們認為市場向我們發出了喜憂參半的信號。顯然，存在一些經濟動盪。 C&I 貸款利率、聯邦貸款調查表明，C&I 方面有相當大的緊縮，我們 - 這讓我們停下來。與此同時，我們——我們業務的一部分，比如圍繞日常產品的承包商選擇，表現非常好。

So net-net, we are -- as we said, we're positioned to respond to whatever it delivers us -- the market delivers us. And as Karen indicated, we feel good with kind of where we are from a current projections perspective.

因此，net-net，我們是——正如我們所說，我們有能力響應它提供給我們的任何東西——市場提供給我們。正如 Karen 所指出的，從當前的預測角度來看，我們對自己所處的位置感到滿意。

Okay. Okay. And then just, I guess, on the margins within the quarter. Just wondered if there's a way to kind of break down some of the sequential improvement because normally, you'd see kind of a seasonal kind of step-down in margins from Q1 to Q2. And so I'm just kind of wondering kind of what drove the step up and as you think about seasonality in the back half of the year. I mean, do you see that kind of normal kind of Q3, Q4 kind of margin step-up that you've seen historically as well?

好的。好的。然後，我猜，就在本季度的利潤率上。只是想知道是否有一種方法可以打破一些連續的改進，因為通常情況下，你會看到從第一季度到第二季度的利潤率出現季節性下降。因此，我只是想知道是什麼推動了這一步伐，以及您考慮下半年的季節性。我的意思是，您是否看到過您在歷史上也看到過的那種正常的 Q3、Q4 利潤率提升？

So the margin performance at the gross margin level was delivered by managing price and some increasing favorability on the input cost front. So obviously, we've got a -- we've taken a much more strategic approach to pricing, we believe, and that is -- our Contractor Select portfolio is aggressively positioned right product, right place, right price, and we're purposeful about that.

因此，毛利率水平的利潤率表現是通過管理價格和在投入成本方面不斷增加的青睞來實現的。很明顯，我們有一個 - 我們採取了更具戰略性的定價方法，我們相信，那就是 - 我們的承包商選擇產品組合積極定位正確的產品，正確的地點，正確的價格，我們是有目的的。

On the project side, we have the ability to choose the projects that we want to take so we can strategically manage price there. And we're starting to see favorability on the input cost side. So that's -- we're obviously very aggressively managing that, and that should be the trend going forward for the rest of the year.

在項目方面，我們有能力選擇我們想要進行的項目，因此我們可以在那裡進行戰略性的價格管理。我們開始看到投入成本方面的優勢。這就是 - 我們顯然非常積極地管理它，這應該是今年剩餘時間的趨勢。

Our next question comes from Ryan Merkel with William Blair.

我們的下一個問題來自 Ryan Merkel 和 William Blair。

First off, can you speak to the risk of channel destocking later this year? Any view on if the channel has too much inventory out there?

首先，你能談談今年晚些時候渠道去庫存的風險嗎？關於渠道是否有太多庫存的看法？

Yes. So not surprisingly, we get this question a lot. So let me kind of break it, as I did in the first question, break it down into its component parts. So -- and specifically, now we're talking about the electrical distributors. So there's two parts to their business. There are -- there is the project business, which they're staging and storing for delivery to job sites that's basically kind of a fee-for-service business. And then there's -- so they own inventory for that, but that's attributed to existing projects. As we said last quarter, we think there was more inventory in their system because of that, and that will work its way out as the projects are executed.

是的。所以毫不奇怪，我們經常收到這個問題。所以讓我把它分解一下，就像我在第一個問題中所做的那樣，將它分解成它的組成部分。所以——具體來說，現在我們談論的是配電商。所以他們的業務分為兩個部分。有—有項目業務，他們正在暫存和存儲項目業務，以便交付到工作地點，這基本上是一種按服務收費的業務。然後是 - 所以他們擁有庫存，但這歸因於現有項目。正如我們上個季度所說，我們認為他們的系統中有更多的庫存因此，隨著項目的執行，這將逐漸消失。

The second is the inventory that they buy for resell, which is our Contractor Select portfolio. We continue to see, as I indicated earlier in the comments, we continue to see strong volume there. So that short lead time, high turns kind of inventory and that's performing pretty well.

第二個是他們為轉售而購買的庫存，這是我們的承包商選擇組合。我們繼續看到，正如我之前在評論中指出的那樣，我們繼續看到那裡的交易量強勁。因此，交貨時間短，庫存周轉率高，而且表現非常好。

Digging in deeper to the channel, which is -- which would -- which is a different perspective is our OEM business, where obviously, we -- you can see in the disaggregated revenue that, that business was down year-over-year. We do think that, that is a combination of a few things that our customers burning off inventory that they bought earlier, which is destocking and then a couple of other things.

深入挖掘渠道，這是 - 這將 - 這是我們的 OEM 業務的不同視角，顯然，我們 - 你可以在分類收入中看到，該業務同比下降。我們確實認為，這是我們的客戶消耗掉他們之前購買的庫存的一些東西的組合，這是去庫存，然後是其他一些東西。

So net-net, the -- if we're talking about the distributors, they are -- our Contractor Select portfolio continues to turn over, which would imply that their inventories are fine.

因此，net-net，如果我們談論的是分銷商，他們是 - 我們的 Contractor Select 投資組合繼續周轉，這意味著他們的庫存很好。

Got it. That's helpful. And then my second question, in some of the channel work that we've done, we heard about shortages of switchgear and then also a positive outlook for infrastructure work. Can you just comment on those two items, please?

知道了。這很有幫助。然後是我的第二個問題，在我們所做的一些渠道工作中，我們聽說了開關設備短缺的問題，然後也聽說了基礎設施工作的積極前景。請您就這兩項發表評論好嗎？

Yes, I'll start on switchgear and then Karen can talk about the infrastructure. So on the switchgear, that's largely what's holding up the stage in store orders. So the switchgear lead times continue to be far in excess of what the lighting lead times are, for example. So that's why these projects are kind of inconsistently executing. And I believe that the consensus is that, that won't improve until kind of later in the calendar year.

是的，我將從開關設備開始，然後 Karen 可以談談基礎設施。因此，在開關設備上，這在很大程度上是支撐商店訂單的主要因素。因此，例如，開關設備的交貨時間繼續遠遠超過照明的交貨時間。這就是為什麼這些項目執行不一致的原因。而且我相信共識是，直到日曆年晚些時候才會有所改善。

And then on infrastructure, Ryan, as we've said before, we do think this is a place of opportunity for us, and we are starting to see some green shoots in the infrastructure projects. But it's still pretty early. We're going to continue to position ourselves for -- to be on project specifications, which will eventually turn into bids and then orders down the road.

然後在基礎設施方面，Ryan，正如我們之前所說，我們確實認為這對我們來說是一個機會之地，我們開始在基礎設施項目中看到一些萌芽。但現在還很早。我們將繼續根據項目規格定位自己，最終將變成投標，然後在路上下訂單。

Our next question comes from Joe O'Dea with Wells Fargo.

我們的下一個問題來自富國銀行的 Joe O'Dea。

I wanted to start on revenue mix and trying to kind of understand your views on the percent of revenue that's most exposed to credit availability and interest rates. So I think about the exposure as being roughly 50% kind of new construction, 50% renovation. I think you're roughly 20% kind of Contractor Select. And so trying to think as you're talking about some of the projects and what you're seeing in terms of maybe evidence of some slowdown in ordering. Just what part of the portfolio, what part of the revenue you think is maybe most exposed to some of these slowing trends?

我想從收入組合開始，並試圖了解您對最容易受到信貸可用性和利率影響的收入百分比的看法。所以我認為曝光率大約是 50% 的新建築，50% 的翻新。我認為您大約有 20% 的選擇承包商。因此，當你談論一些項目時，試著想想你所看到的可能是訂單放緩的證據。您認為投資組合的哪一部分，收入的哪一部分最容易受到這些放緩趨勢的影響？

Yes. Thanks, Joe. The -- as we've said pretty consistently, obviously, we get to these projects through multiple different channels, which you see in our disaggregated revenue around C&I and our direct, which is -- which would be the two most.

是的。謝謝，喬。正如我們一直以來所說的那樣，很明顯，我們通過多種不同的渠道進入這些項目，你可以在我們圍繞 C&I 的分類收入和我們的直接收入中看到，這將是兩個最多的。

In terms of end markets, they obviously vary in different ways. So the infrastructure government dollar projects are not going to be impacted by this. The educational market impacts are not going to be impacted by this. But some of the others obviously are.

就終端市場而言，它們顯然以不同的方式存在差異。因此基礎設施政府的美元項目不會受此影響。教育市場的影響不會受此影響。但其他一些顯然是。

We don't have a perfect quantification of that for you. And we're not sure that we have a perfect crystal ball on how this is going to play out. So the process -- the C&I project business would be the big bucket that would be most impacted by this. And of that business, it's probably half of that business that's -- that would be most impacted by this. Those are just round numbers.

我們沒有為您提供完美的量化。而且我們不確定我們是否對這將如何發揮作用有一個完美的水晶球。因此，流程——C&I 項目業務將是受此影響最大的大桶。在該業務中，它可能是該業務的一半 - 受此影響最大。這些只是整數。

Got it. Okay. And then can you expand a little bit on cost coming down and the degree to which -- that you're seeing that in component costs. How much of that is, as supply chain eases, there's just smoother operations and that enables some costs coming down? How much of that is you sort of be more proactive at the negotiating table? And then given the recent move up in steel, how you're thinking about the durability of some of those costs coming down?

知道了。好的。然後你能不能稍微擴展一下成本下降以及你在組件成本中看到的程度。其中有多少是隨著供應鏈的放鬆，運營更加順暢，從而降低了一些成本？您在談判桌上更加積極主動的程度有多少？然後鑑於最近鋼鐵價格上漲，您如何看待其中一些成本下降的持久性？

Yes. So we have been very intentional about our managing of input costs going forward. So first of all, on the component side, those -- the electronic components, those prices are not changing much. In fact, their prices and terms are largely staying the same. Beyond that, we've been intentional about what we're sourcing, who we're sourcing it from on all of the other inputs. We feel really good now about our ability to manage those going forward.

是的。因此，我們一直非常有意管理未來的投入成本。所以首先，在組件方面，那些 - 電子組件，那些價格沒有太大變化。事實上，他們的價格和條款基本保持不變。除此之外，我們一直有意識地考慮我們採購的是什麼，我們從誰那裡採購所有其他輸入。我們現在對我們管理未來的能力感覺非常好。

You highlighted steel. We've improved our steel sourcing fairly significantly. Another one we've called out is transport costs, which have come down. And we're now working towards designing our products so that our products are designed so that it's easier to source at the appropriate levels. So the combination of all of those things, we think, positions us with some durability going forward on the input cost side.

你強調了鋼鐵。我們已經相當顯著地改善了我們的鋼材採購。另一個我們提到的是運輸成本，它已經下降了。我們現在正在努力設計我們的產品，以便我們的產品設計得更容易在適當的水平上採購。因此，我們認為，所有這些因素的結合使我們在投入成本方面具有一定的耐久性。

Our next question comes from the line of Chris Snyder with UBS.

我們的下一個問題來自瑞銀集團的 Chris Snyder。

So prior communication suggested that gross margin would step up in the back half relative to the first half. Is that still the case, just given the higher first half starting point and then some of the cycle concerns called out in the back half?

因此，之前的溝通表明，毛利率將在下半年相對於上半年上升。是否仍然如此，只是考慮到上半場起點較高，然後在後半場出現了一些週期問題？

Basically, it started to perform the way we expected to perform earlier than we expected it to perform that way. So we're not surprised by these gross margin levels.

基本上，它開始按照我們預期的方式執行，比我們預期的要早。因此，我們對這些毛利率水平並不感到驚訝。

Okay. Appreciate that. And then, Neil, I think earlier, you kind of called out taking a more strategic approach to pricing. Can you just maybe provide a little bit more color on that? And does this mean essentially a trade-off of higher gross margin maybe at the expense of volumes? Is that the right takeaway?

好的。感謝。然後，尼爾，我想早些時候，你有點呼籲採取更具戰略性的定價方法。你能不能提供更多的顏色？這是否意味著以犧牲銷量為代價來換取更高的毛利率？這是正確的外賣嗎？

Yes. Thanks, Chris. I mean, look, this is a very, very important topic. So we want to be strategic about our pricing, so we can manage the relationship between volume and margin. We believe that as the largest player in the industry, we're demonstrating pricing -- a very important strategic pricing. We compete every day on everyday products with our Contractor Select portfolio. We think that's working. Obviously, it's growing.

是的。謝謝，克里斯。我的意思是，看，這是一個非常非常重要的話題。所以我們希望對我們的定價具有戰略意義，這樣我們就可以管理銷量和利潤之間的關係。我們相信，作為行業中最大的參與者，我們正在展示定價——一個非常重要的戰略定價。我們每天都在與我們的 Contractor Select 產品組合競爭日常產品。我們認為這是有效的。顯然，它正在增長。

It's growing in the face of a couple of things. One is Asian imports. Census data suggests that Asian imports are down over 30%. Obviously, we're growing. And our portfolio is a portion of those numbers. So it's obviously differentiating. So that relationship is working. We're delivering higher value at the same -- kind of at competitive price for both the customers and margin for us.

面對一些事情，它正在增長。一種是亞洲進口。人口普查數據表明，亞洲進口下降了 30% 以上。顯然，我們正在成長。我們的投資組合是這些數字的一部分。所以它顯然是有區別的。所以這種關係正在發揮作用。我們正在以相同的方式提供更高的價值——對客戶和我們的利潤都具有競爭力的價格。

And then on the project side, it's this relationship between price and volume. So we're going to be strategic about where we take volume and we're going to continue to deliver these margin levels.

然後在項目方面，這是價格和數量之間的關係。因此，我們將在戰略上採取行動，我們將繼續提供這些利潤率水平。

I appreciate that. If I could maybe just squeeze one last one in. There's some communication earlier around potential inventory destock. Because when I look at the quarters, it seems like volumes were roughly flat year-on-year, whereas nonres activity has continued to grow quite nicely. Any way to just quantify maybe the level of destock that impacted the quarter? And then kind of maybe where are we in that destock cycle?

我很感激。如果我能把最後一個擠進去就好了。早些時候有一些關於潛在庫存去庫存的溝通。因為當我查看這些季度時，交易量似乎與去年同期大致持平，而非資源活動繼續增長得相當好。有什麼方法可以量化影響該季度的去庫存水平？然後我們在去庫存週期中可能處於什麼位置？

Yes. I mean, I think there's -- I think we've tried to answer this question kind of consistently so -- every time we've been asked it. The one thing I would just want to make sure that people appreciate is that the -- we believe that the lead time compression is part of what the destocking story is. So we don't think that there's a significant other -- there's not a significant amount of a hold-for-sale inventory in the distributors or retailers or our Contractor Select portfolio wouldn't be performing as well as it is right now. So these are projects that are in the market or in the distributors.

是的。我的意思是，我認為 - 我認為我們一直在嘗試始終如一地回答這個問題 - 每次我們被問到這個問題時。我只想確保人們欣賞的一件事是 - 我們相信提前期壓縮是去庫存故事的一部分。因此，我們認為沒有其他重要因素——分銷商或零售商中沒有大量的待售庫存，或者我們的承包商選擇投資組合的表現不會像現在這樣好。所以這些是市場上或經銷商中的項目。

Where this is impacting us, we think, the most is on this lead time compression. So that has an impact on the order rate, and that's continuing. So we expect that to continue through the -- at least through the third quarter.

我們認為，這對我們的影響最大的是交貨時間的壓縮。所以這對訂單率有影響，而且還在繼續。因此，我們預計這種情況將持續到 - 至少到第三季度。

(Operator Instructions) Our next question comes from Jeffrey Sprague with Vertical Research Partners.

（操作員說明）我們的下一個問題來自 Jeffrey Sprague 和 Vertical Research Partners。

It's Jeff Sprague. That broke up when she was introducing me. Hopefully, that was me. Just -- yes, we got you. Okay. I just want to come back to just kind of the lending environment, Neil, not to parse words here, but in your opening remarks, it actually sounded like you felt the negative impact of lending changing already in the quarter, but really, it sounds more like you're just flagging it as obviously an issue to be concerned about and the order softening was more of this compression of lead times. Can you just kind of clarify that? Are you actually seeing like tangible evidence of, for lack of a better term, a credit crunch in your end markets?

我是傑夫·斯普拉格。她介紹我的時候就分手了。希望那是我。只是 - 是的，我們找到了你。好的。尼爾，我只想回到貸款環境的問題上，我不想在這里分析文字，但在你的開場白中，實際上聽起來你已經感受到貸款在本季度已經發生變化的負面影響，但實際上，聽起來更像是你只是將其標記為一個明顯需要關注的問題，而訂單軟化更多的是這種提前期的壓縮。你能澄清一下嗎？由於缺乏更好的術語，您是否真的看到了終端市場信貸緊縮的具體證據？

So thanks for the question, Jeff, and the opportunity to provide as much clarity as possible on this. The Fed C&I loan survey started to turn negative kind of last fall, basically. So that is clearly rolling through. And we're highlighting that as a new factor because the -- our data would suggest that, that will -- that is now flowing through and will continue to flow through.

感謝 Jeff 提出這個問題，並感謝有機會盡可能清楚地說明這一點。基本上，美聯儲 C&I 貸款調查從去年秋天開始轉為負面。所以這顯然是滾動的。我們強調這是一個新因素，因為——我們的數據表明，這將——現在正在流過並將繼續流過。

Does it stay the same? Obviously, we don't have a crystal ball. We all can just look at that. But the data source we're looking at as the Fed C&I loan survey. And that will impact obviously the nongovernmental pieces of it. So it won't impact education season, but it will have some effect on things going forward with the tightening.

它保持不變嗎？顯然，我們沒有水晶球。我們都可以看看那個。但我們正在尋找的數據來源是美聯儲 C&I 貸款調查。這顯然會影響其中的非政府部分。所以這不會影響教育季，但會隨著緊縮政策對未來的事情產生一些影響。

And then the second half of that is, and we've said this consistently, is that if there's higher discount rates, there'll be less projects. So -- and I think we're seeing the combination. We are collectively, as an industry, seeing the combination of these going forward. And that's -- it will be determined. We'll have to see what the Fed does to see how that plays out.

然後是下半部分，我們一直這麼說，如果貼現率更高，項目就會更少。所以 - 我認為我們正在看到這種結合。作為一個行業，我們共同看到了這些因素的結合。那就是——這將被確定。我們必須看看美聯儲做了什麼，看看結果如何。

Yes. Then I guess just kind of coming off that and just thinking about your guidance, right? What would have to happen to get us to the bottom end of the range, right? I mean if we look at kind of historical first half, second half patterns, right, unless there's an abrupt change in the economic environment, it seems like you're in the upper 1/3 of that range by historical standards. What -- I don't know if you agree with that, but what do you think would have to happen here to get you to the bottom of that range? It's a wide range with half a year to go.

是的。然後我想只是有點擺脫它，只是想著你的指導，對吧？必鬚髮生什麼才能讓我們到達範圍的底端，對嗎？我的意思是，如果我們看一下歷史上半場、下半場的模式，對，除非經濟環境發生突然變化，否則按照歷史標準，你似乎處於該範圍的上 1/3。什麼——我不知道你是否同意這一點，但你認為這裡必鬚髮生什麼才能讓你到達該範圍的底部？範圍很廣，還有半年時間。

Yes. I mean as we said, Jeff, what we're -- our intention is not to update the range throughout the year. The -- based on our performance for the first half of the year, it would imply for the rest of the year that sales will be harder to achieve, but we're demonstrating that profits are achievable. That's the bullet point summary of kind of how the rest -- we think the rest of the year plays out.

是的。我的意思是，正如我們所說，傑夫，我們的意圖是不在全年更新範圍。 - 根據我們今年上半年的表現，這意味著今年剩餘時間銷售將更難實現，但我們證明利潤是可以實現的。這是關於其餘時間的要點總結——我們認為今年餘下時間的結果如何。

Great. And maybe just one quick last one. Just on inventories. Your own inventory performance has been notable, right? You brought it down pretty dramatically. It looks like you're kind of near historical averages on days inventory. Anyhow, is there -- I mean, is there a lot of additional opportunity in your view at this point to unlock cash through further inventory liquidations? Or have we reached some kind of normalized level here?

偉大的。也許只是一個快速的最後一個。就庫存而言。您自己的庫存表現很出色，對吧？你非常戲劇性地降低了它。看起來您的庫存天數接近歷史平均水平。無論如何，我的意思是，在您看來，此時是否還有很多額外的機會通過進一步清算庫存來釋放現金？或者我們在這里達到了某種標準化水平？

I think, Jeff, for the most part, we are at a more normalized level. We're still a little bit heavy on component inventory for electronics, but it's modest compared to the decreases that we've made so far.

我認為，傑夫，在大多數情況下，我們處於更加規範化的水平。我們的電子元件庫存仍然有點沉重，但與我們迄今為止所做的減少相比，它是適度的。

And then I'd add to that, we have multiple efforts ongoing to continue to reduce that. So I think we are at historically normal levels. And I also believe that we can improve those over time.

然後我要補充一點，我們正在進行多項努力以繼續減少它。所以我認為我們處於歷史正常水平。而且我也相信我們可以隨著時間的推移改進這些。

Thank you. And I'm showing no further questions in the queue at this time. I'd like to turn the call back to Neil Ashe for any closing remarks.

謝謝。我現在不會在隊列中顯示更多問題。我想將電話轉回給 Neil Ashe 以聽取任何結束語。

Thank you. We really appreciate you joining us this morning. We're pleased with our performance so far this year. We are in control of what we can control, and we're confident about our ability to deliver no matter the market conditions on our customer requirements. So thank you for spending some time with us this quarter, and we look forward to talking to you again next quarter.

謝謝。非常感謝您今天早上加入我們。我們對今年迄今為止的表現感到滿意。我們控制著我們能控制的東西，我們有信心無論市場條件如何滿足客戶的要求，我們都有能力交付。因此，感謝您本季度與我們共度時光，我們期待下個季度再次與您交談。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。