Azek Company Inc (AZEK) 2023 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen. Welcome to The AZEK Company Second Quarter 2023 Earnings Conference Call. (Operator Instructions) Please be advised that this call is being recorded. (Operator Instructions)

女士們、先生們，下午好。歡迎參加 AZEK 公司 2023 年第二季度收益電話會議。 （操作員說明）請注意，此通話正在錄音。 （操作員說明）

And now at this time, I would like to turn the call over to Mr. Eric Robinson, VP of Investor Relations. Please go ahead, sir.

現在這個時候，我想把電話轉給投資者關係副總裁埃里克羅賓遜先生。請繼續，先生。

Thank you, and good afternoon, everyone. We issued our earnings press release and a supplemental earnings presentation this afternoon to the Investor Relations portion of our website at investors.azekco.com. The earnings press release was also furnished via 8-K on the SEC's website. I'm joined today by Jesse Singh, our Chief Executive Officer; and Peter Clifford, our Chief Financial Officer.

謝謝大家，大家下午好。今天下午，我們在 Investors.azekco.com 網站的投資者關係部分發布了收益新聞稿和補充收益介紹。收益新聞稿還通過 SEC 網站上的 8-K 提供。今天我們的首席執行官傑西·辛格 (Jesse Singh) 也加入了我的行列。以及我們的首席財務官 Peter Clifford。

I would like to remind everyone that during this call, we may make certain statements that constitute forward-looking statements within the meaning of the federal securities laws, including remarks about future expectations, beliefs, estimates, forecasts, plans and prospects. Such statements are subject to a variety of risks and uncertainties as described in our periodic reports filed with the Securities and Exchange Commission that could cause actual results to differ materially. We do not undertake any duty to update such forward-looking statements.

我想提醒大家，在這次電話會議中，我們可能會做出某些構成聯邦證券法含義內的前瞻性陳述的陳述，包括有關未來預期、信念、估計、預測、計劃和前景的言論。此類陳述受到我們向美國證券交易委員會提交的定期報告中所述的各種風險和不確定性的影響，可能導致實際結果存在重大差異。我們不承擔更新此類前瞻性陳述的任何責任。

Additionally, during today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating our performance. These non-GAAP measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations of such non-GAAP measures can be found in our earnings press release, which is posted on our website.

此外，在今天的電話會議中，我們將討論非公認會計原則財務指標，我們相信這些指標有助於評估我們的業績。這些非公認會計原則措施不應被孤立考慮，也不應替代根據公認會計原則準備的結果。此類非公認會計原則措施的調節可以在我們網站上發布的收益新聞稿中找到。

Now let me turn the call over to AZEK's CEO, Jesse Singh.

現在讓我將電話轉給 AZEK 首席執行官傑西·辛格 (Jesse Singh)。

Good afternoon, and thank you for joining us. The AZEK team delivered financial results modestly ahead of our guidance for the fiscal second quarter of 2023, driven by steady residential end market demand, disciplined operational management and an ongoing execution of our initiatives.

下午好，感謝您加入我們。在穩定的住宅終端市場需求、嚴格的運營管理和持續執行我們的計劃的推動下，AZEK 團隊的財務業績略高於我們對 2023 年第二財季的指導。

I am very proud of the team as we navigate the year and lay the foundation for strong performance for years to come. Our team continues to execute our strategy and further strengthen our industry-leading presence across the U.S. and Canada. We are on track to deliver against our strategic initiatives, including driving accelerated material conversion and growth through new product development and channel expansion.

我為我們的團隊感到非常自豪，因為我們度過了這一年，並為未來幾年的強勁表現奠定了基礎。我們的團隊將繼續執行我們的戰略，並進一步加強我們在美國和加拿大的行業領先地位。我們有望實現我們的戰略舉措，包括通過新產品開發和渠道擴張來加速材料轉化和增長。

We continue to be excited by the opportunities within our approximately $14 billion core market as well as the potential for growth in our adjacencies. We are confident in our growth strategy, supported by the long-term trends of wood conversion, outdoor living and demographic shifts, increasing the need for housing combined with our proven ability to drive growth through innovation and other initiatives.

我們繼續對價值約 140 億美元的核心市場中的機遇以及周邊地區的增長潛力感到興奮。我們對我們的增長戰略充滿信心，木材加工、戶外生活和人口結構變化等長期趨勢的支持，住房需求的增加，加上我們通過創新和其他舉措推動增長的成熟能力。

In the second quarter of 2023, we generated $377.7 million of net sales and $72.8 million of adjusted EBITDA, and we increased our operating cash flow by approximately $94 million year-over-year to $56.7 million in the fiscal second quarter. As we expected, our Q2 margins improved sequentially versus Q1, driven by modestly improved production volumes and the team's focus on cost savings initiatives. Disciplined operational execution resulted in a nearly $50 million reduction in AZEK balance sheet inventory from the close of fiscal 2022 to the second quarter fiscal 2023.

2023 年第二季度，我們實現了 3.777 億美元的淨銷售額和 7280 萬美元的調整後 EBITDA，第二財季的運營現金流同比增加了約 9400 萬美元，達到 5670 萬美元。正如我們預期的那樣，由於產量適度提高以及團隊對成本節約計劃的關注，我們第二季度的利潤率比第一季度連續提高。從 2022 財年結束到 2023 財年第二季度，嚴格的運營執行導致 AZEK 資產負債表庫存減少了近 5000 萬美元。

As we progress through this year and into fiscal 2024, we will continue to focus on free cash flow generation via working capital initiatives and a disciplined approach to capital expenditures after the heavy investment period over the last few years. During the quarter, we saw relatively stable demand from our residential business with sell-through coming in modestly above our assumptions. As a reminder, sell-through is the metric of what is sold into our dealer base from our distributors and is a key indicator of end market demand for our products.

隨著今年和 2024 財年的進展，在過去幾年的大量投資時期之後，我們將繼續專注於通過營運資本計劃和嚴格的資本支出方法來產生自由現金流。本季度，我們的住宅業務需求相對穩定，銷量略高於我們的假設。提醒一下，銷量是衡量我們的分銷商向我們的經銷商群銷售的產品的指標，也是終端市場對我們產品需求的關鍵指標。

As we expected, our residential channel partners purchased less than last year with certain dealer partners taking a more conservative approach. This was partially offset by the initial impact of our shelf gain highlighted on the last call. Residential channel inventory levels are below last year and approximately 15% below the 2017 to 2019 historical average days on hand. We continue to believe that the channel inventory correction in our residential segment is behind us, and we are well positioned for the second half of 2023.

正如我們預期的那樣，我們的住宅渠道合作夥伴的採購量低於去年，某些經銷商合作夥伴採取了更為保守的做法。這部分被上次電話會議上強調的貨架增加的初步影響所抵消。住宅渠道庫存水平低於去年，比 2017 年至 2019 年曆史平均庫存天數低約 15%。我們仍然相信住宅領域的渠道庫存調整已經過去，我們為 2023 年下半年做好了準備。

In addition to managing both internal and external inventory more effectively, we were able to deliver high service levels and are in continuous dialogue with our channel partners to ensure we are getting product to our customers where needed.

除了更有效地管理內部和外部庫存之外，我們還能夠提供高水平的服務，並與渠道合作夥伴持續對話，以確保我們能夠向需要的客戶提供產品。

On the commercial side, as we indicated last quarter, we've seen a more challenging environment resulting from a combination of channel destocking and softer demand in certain commercial end markets, which we expect will be a headwind versus our original planning assumptions. Overall, we remain confident in our ability to deliver against the adjusted EBITDA range of $250 million to $265 million outlined in our fiscal 2023 planning assumptions as we expand margins in the second half of the year. In combination with an increased focus on operating cash and lower capital investments, we expect to create meaningful free cash flow in fiscal 2023.

在商業方面，正如我們上季度指出的那樣，由於渠道去庫存和某些商業終端市場的需求疲軟，我們看到了更具挑戰性的環境，我們預計這將是我們最初規劃假設的阻力。總體而言，隨著下半年利潤率的擴大，我們對 2023 財年規劃假設中概述的 2.5 億至 2.65 億美元的調整後 EBITDA 範圍的交付能力仍然充滿信心。結合更加關注運營現金和減少資本投資，我們預計將在 2023 財年創造有意義的自由現金流。

Turning to an update on our strategic initiatives. The launch of AZEK's 2023 new products, including our new on-trend colors in our premium TimberTech decking and new solutions in our composite and aluminum railing collections, have all been well received by our customers, and we are excited about the uptake we have seen to date. Additionally, we are excited about this year's introduction of our TimberTech outdoor furniture collection, a premium product produced from high-performance materials by our commercial division and fabricated in our Scranton, Pennsylvania facility.

轉向我們戰略舉措的最新情況。 AZEK 2023 年新產品的推出，包括優質 TimberTech 地板中的新流行顏色以及復合材料和鋁製欄杆系列中的新解決方案，均受到客戶的好評，我們對所看到的採用感到興奮迄今為止。此外，我們對今年推出的 TimberTech 戶外家具系列感到非常興奮，這是一種由我們的商業部門採用高性能材料生產並在賓夕法尼亞州斯克蘭頓工廠製造的優質產品。

These new product introductions collectively are a strong complement to our deck, rail pergolas and accessories platform offered through our TimberTech, StruXure, Ultralox and INTEX brands and positions us to drive incremental growth in our core markets and access additional adjacencies in outdoor living.

這些新產品的推出總體上是對我們通過 TimberTech、StruXure、Ultralox 和 INTEX 品牌提供的甲板、軌道涼棚和配件平台的有力補充，使我們能夠推動核心市場的增量增長，並進入戶外生活的其他領域。

In Exteriors, we continue to see steady demand and performance across our exterior trim and value-added solutions. Our Exteriors business, which tends to have a larger mix of residential new construction projects versus decking has continued to deliver solid results driven by new business wins, new products like our Captivate Pre-finished Trim and siding and downstream wood conversion.

在外飾方面，我們繼續看到外飾和增值解決方案的需求和性能穩定。我們的外飾業務往往擁有更多的住宅新建項目與裝飾項目，在新業務勝利、新產品（如 Captivate 預製裝飾和壁板以及下游木材轉換）的推動下，繼續取得穩健的業績。

Overall, our residential sales and marketing initiatives include ongoing downstream market conversion and the successful execution of the Pro and Retail channel wins we highlighted earlier this year. New shelf space positions will continue to ramp up over the next few quarters and support our ongoing efforts to generate above-market growth, wood conversion and expansion through new products.

總體而言，我們的住宅銷售和營銷舉措包括持續的下游市場轉換以及我們今年早些時候強調的專業和零售渠道勝利的成功執行。新的貨架空間位置將在未來幾個季度繼續增加，並支持我們不斷努力通過新產品實現高於市場的增長、木材轉換和擴張。

During the quarter, we continued our progress on increasing the use of recycled materials in our products, including increasing the amount of recycle in our Advanced PVC decking and achieving certain milestones as we move to a lower-cost formulation for our CAP composite decking. We are also nearing the completion of our capacity expansion investment in our Return Polymers PVC recycling plant in Ashland, Ohio. This will roughly triple our PVC recycling capacity since Return Polymers joined The AZEK team in January of 2020. These investments are key enablers to support the recycled content expansion of our Advanced PVC decking and exteriors products and long-term recycling and margin objectives.

本季度，我們在增加產品中回收材料的使用方面繼續取得進展，包括增加高級 PVC 地板的回收量，並在我們轉向採用更低成本的 CAP 複合地板配方時實現了某些里程碑。我們還即將完成位於俄亥俄州阿什蘭的 Return Polymers PVC 回收工廠的產能擴張投資。自 Return Polymers 於 2020 年 1 月加入 AZEK 團隊以來，這將使我們的 PVC 回收能力大致增加兩倍。這些投資是支持我們高級 PVC 地板和外飾產品的回收含量擴展以及長期回收和利潤目標的關鍵推動因素。

The AZEK Company once again was recognized for a number of awards in the quarter that highlight our leadership in the industry. First, The AZEK Company received 2 sustainable Product of the Year awards in the 2023 Green Builder survey, 1 for our TimberTech Advanced PVC decking and 1 for AZEK Captivate Pre-Finished Siding and Trim. These independent awards validate our consistent and ongoing investment in R&D to launch new product innovations that provide unique benefits to our customers and are more environmentally sustainable.

AZEK 公司在本季度再次榮獲多項獎項，凸顯了我們在行業中的領導地位。首先，AZEK 公司在 2023 年綠色建築商調查中獲得了 2 項年度可持續產品獎，其中 1 項為我們的 TimberTech Advanced PVC 地板，1 項為 AZEK Captivate 預成品壁板和裝飾。這些獨立獎項驗證了我們在研發方面持續不斷的投資，以推出新產品創新，為我們的客戶提供獨特的優勢，並且更具環境可持續性。

In addition, our proprietary TimberTech Advanced PVC decking was named a winner in the prestigious 2023 Sustainable Innovation Awards by Good Housekeeping. We are excited to be recognized by Good Housekeeping to institute panel of lab professionals and sustainability experts who evaluated our products on rigorous criteria, including energy and water reduction, recycle content, recyclability and more. Judges were also impressed by TimberTech Advanced PVC decking's exceptional durability, stunning aesthetics and remarkable sustainability features.

此外，我們專有的 TimberTech Advanced PVC 地板榮獲 Good Housekeeping 著名的 2023 年可持續創新獎。我們很高興獲得 Good Housekeeping 的認可，成立由實驗室專業人員和可持續發展專家組成的小組，他們按照嚴格的標準評估我們的產品，包括能源和水的減少、回收內容、可回收性等。 TimberTech Advanced PVC 地板卓越的耐用性、令人驚嘆的美觀性和卓越的可持續性特徵也給評委留下了深刻的印象。

Finally, we were also named the #1 brand in composite decking by House Beautiful. These awards illustrate the positive momentum that our brand awareness has experienced over the last few years as validated by multiple third parties, including Zonda's recent 2023 builder brand new study report. Our progress is a reflection of the tremendous efforts of The AZEK team. And I would like to thank them all for their commitment to our purpose of revolutionizing outdoor living to create a more sustainable future.

最後，我們還被 House Beautiful 評為複合地板第一品牌。這些獎項表明我們的品牌知名度在過去幾年中經歷了積極的勢頭，並得到了多個第三方的驗證，包括 Zonda 最近的 2023 年建築商品牌新研究報告。我們的進步是 The AZEK 團隊巨大努力的體現。我要感謝他們所有人對我們徹底改變戶外生活以創造更可持續的未來這一目標的承諾。

Moving to outlook. Let me provide some perspective on what we're seeing from our demand indicators in our residential business. As we move into the core of our season, we continually monitor external and internal data points to understand sentiment and potential demand shifts. Key digital metrics show sustained interest in the category. Outdoor living and composite material popularity are supporting material conversion away from wood.

轉向展望。讓我就我們從住宅業務的需求指標中看到的情況提供一些看法。當我們進入季節的核心時，我們不斷監控外部和內部數據點，以了解情緒和潛在的需求變化。關鍵數字指標顯示了對該類別的持續興趣。戶外生活和復合材料的流行正在支持材料從木材的轉變。

AZEK continues to exhibit consistent consumer engagement with website leads and samples showing healthy year-over-year growth within the quarter. Consistent with prior quarters, we again surveyed our pro contractor and dealer bases to understand sentiment and downstream demand. Overall conditions remain largely unchanged with contractor backlogs at approximately 8 weeks in this quarter's survey.

AZEK 繼續展現出消費者對網站線索和样本的持續參與度，顯示本季度實現了健康的同比增長。與前幾個季度一致，我們再次調查了我們的專業承包商和經銷商基地，以了解情緒和下游需求。總體情況基本保持不變，本季度的調查顯示承包商積壓時間約為 8 週。

Contractors have noted that the current backlog level remains modestly higher than the pre-pandemic average backlog. Consistent with prior surveys, contractors are expecting modest revenue growth and cite both labor shortages and economic uncertainty as the biggest pain points. Our dealer survey saw similar sentiment with our dealers expecting modest revenue growth in 2023. AZEK dealers rated both current and expected future business conditions and project demand at slightly above average.

承包商指出，目前的積壓水平仍略高於大流行前的平均積壓水平。與之前的調查一致，承包商預計收入將適度增長，並將勞動力短缺和經濟不確定性視為最大的痛點。我們的經銷商調查顯示了類似的情緒，我們的經銷商預計 2023 年收入將適度增長。AZEK 經銷商對當前和預期的未來業務狀況以及項目需求的評級略高於平均水平。

These survey results are supportive of the steady demand we've seen so far in our residential business. We feel it's prudent to balance the constructive sentiment with a cautious view of the back half of the year in our plan given continued market and economic uncertainty and the fact that we're early in the season.

這些調查結果支持了我們迄今為止在住宅業務中看到的穩定需求。鑑於市場和經濟的持續不確定性以及我們正處於季節初期，我們認為在我們的計劃中平衡建設性情緒與對今年下半年的謹慎看法是謹慎的做法。

While our residential sell-through volume trends have been modestly better to date, our commercial segment is experiencing some incremental challenges around channel destocking and softness across certain end markets. The channel destocking, as we signaled last quarter, is primarily concentrated in certain end markets and is consistent with the broader industrial market.

雖然迄今為止我們的住宅銷量趨勢略有好轉，但我們的商業部門正在經歷一些圍繞渠道去庫存和某些終端市場疲軟的挑戰。正如我們上季度所暗示的那樣，渠道去庫存主要集中在某些終端市場，並且與更廣泛的工業市場一致。

As a reminder, our commercial business grew nearly 40% year-over-year in fiscal 2022 and continues to deliver attractive margins, which we have worked to improve dramatically over the past 2 years. We believe that this business can operate at or above 20% segment adjusted EBITDA margin, and we are confident that once we are through the destocking that this business will return to normalized growth in 2024, given its strong leadership positions in its respective markets.

需要提醒的是，我們的商業業務在 2022 財年同比增長了近 40%，並繼續提供具有吸引力的利潤率，我們在過去 2 年裡一直致力於大幅提高利潤率。我們相信，該業務的部門調整後 EBITDA 利潤率可以達到或超過 20%，而且我們有信心，一旦我們完成去庫存，鑑於該業務在各自市場的強大領導地位，該業務將在 2024 年恢復正常增長。

We expect the commercial business headwind versus our original planning assumptions to be approximately $15 million of segment adjusted EBITDA for the fiscal year. We are also targeting incremental balance sheet inventory reductions as part of our focus on working capital.

與我們最初的計劃假設相比，我們預計本財年商業業務的逆風約為 1500 萬美元的部門調整後 EBITDA。我們還致力於減少資產負債表庫存，作為我們關注營運資本的一部分。

As a reminder, our original planning assumption call for a $40 million reduction in inventory, and we exceeded this target in Q2 by reducing nearly $50 million of inventory versus the end of fiscal 2022. We see an opportunity to further reduce our current balance sheet inventory by an additional $5 million to $10 million resulting in modest incremental costs, which are factored into our outlook.

提醒一下，我們最初的計劃假設要求減少 4000 萬美元的庫存，而我們在第二季度超出了這一目標，與 2022 財年末相比減少了近 5000 萬美元的庫存。我們看到了進一步減少當前資產負債表庫存的機會額外增加 500 萬至 1000 萬美元，導致適度的增量成本，這已納入我們的展望中。

In summary, our cost reduction and recycling initiatives are on track. We've experienced modestly better results in the residential segment and are more challenged in our commercial market than we initially assumed. Taken together, we have multiple levers to achieve our full year planning assumptions of 2023 adjusted EBITDA in the range of $250 million to $265 million and remain confident in our execution capability.

總之，我們的成本降低和回收計劃正在步入正軌。我們在住宅市場取得了稍微好一些的業績，但在商業市場面臨的挑戰比我們最初想像的要大。總而言之，我們擁有多種槓桿來實現 2023 年調整後 EBITDA 在 2.5 億至 2.65 億美元範圍內的全年規劃假設，並對我們的執行能力保持信心。

From a sequential progression in the back half of the year, we continue to expect adjusted EBITDA margin improvement through the balance of fiscal 2023, including year-over-year adjusted EBITDA margin expansion in the fiscal third and fourth quarters as we realize the benefits of sourcing initiatives sequential volume improvements and cost down recycle programs within our results.

從今年下半年的連續進展來看，我們繼續預計 2023 財年的調整後 EBITDA 利潤率將有所改善，包括第三財季和第四季度的調整後 EBITDA 利潤率同比擴張，因為我們意識到我們的成果包括採購計劃的連續產量改進和成本降低迴收計劃。

I will now turn the call over to Pete to provide some additional context on our financial results and outlook.

我現在將把電話轉給皮特，以提供有關我們財務業績和前景的更多背景信息。

Thanks, Jesse, and good afternoon, everyone. As Eric highlighted at the beginning of the call, we have uploaded a supplemental earnings presentation on the Investor Relations portion of our website.

謝謝杰西，大家下午好。正如埃里克在電話會議開始時強調的那樣，我們已在網站的投資者關係部分上傳了補充收益演示文稿。

Before we get into the second quarter results, I wanted to provide some color on the operating environment during the quarter. From a macro perspective, we are seeing a more constructive environment in our residential business year-to-date while experiencing a more challenging environment for our Commercial segment.

在我們公佈第二季度業績之前，我想提供一些有關本季度運營環境的信息。從宏觀角度來看，今年迄今為止，我們的住宅業務面臨著更具建設性的環境，而商業業務則面臨著更具挑戰性的環境。

Residential sell-through demand continues to be modestly better than our original assumptions. Residential channel inventory is at levels that are well below 2017 to 2019 average days on hand. And as a reminder, we intentionally worked with our channel partners to manage the inventory entering the system ahead of the building season in a very disciplined way.

住宅銷售需求繼續略好於我們最初的假設。住宅渠道庫存水平遠低於 2017 年至 2019 年平均庫存天數。提醒一下，我們特意與渠道合作夥伴合作，以非常嚴格的方式管理建築季節之前進入系統的庫存。

From an operating perspective, our focal points continue to be managing our conversion costs to match the lower production while maintaining high service levels. Production volume levels were down 33% year-over-year in the quarter. We managed our way through the final planned production trough at early 2Q and started to see production levels increase sequentially late in 2Q '23.

從運營角度來看，我們的重點繼續是管理我們的轉換成本，以適應較低的產量，同時保持高服務水平。本季度產量水平同比下降 33%。我們在第二季度初成功度過了最終計劃的生產低谷，並在 2023 年第二季度末開始看到生產水平連續增加。

As we communicated previously, we said post completion of the channel inventory reductions in 4Q '22 and 1Q '23 that we would pivot in 2Q '23 to reduce our own inventory on the balance sheet, which we did in a meaningful way during the quarter. On the commodities front, key raw materials have stabilized around our original planning assumptions. For the second quarter of 2023, we saw net sales of $377.7 million, which was modestly above our guidance expectations.

正如我們之前溝通的那樣，我們表示，在 22 年第 4 季度和 23 年第 1 季度完成渠道庫存削減後，我們將在 23 年第 2 季度轉向減少資產負債表上的庫存，我們在本季度以有意義的方式做到了這一點。在大宗商品方面，主要原材料已穩定在我們最初的計劃假設附近。 2023 年第二季度，我們的淨銷售額為 3.777 億美元，略高於我們的指導預期。

Net sales declined 4.7% year-over-year. The second quarter included a volume decline of approximately $58 million partially offset by positive contributions from carryover pricing in the high single-digit range and carryover from M&A. 2Q '23 gross profit decreased by $14 million or 12% year-over-year to $108.2 million. 2Q '23 adjusted gross profit decreased by $13 million or 9% year-over-year to $130.7 million. The adjusted gross profit decline was in line with the decline in net sales and higher decremental margins from the lower production levels. And as we previously mentioned, we see the bulk of our underutilization behind us.

淨銷售額同比下降 4.7%。第二季度銷量下降約 5800 萬美元，部分被高個位數範圍的結轉定價和併購結轉的積極貢獻所抵消。 2023 年第二季度毛利潤同比下降 1,400 萬美元，即 12%，至 1.082 億美元。 2023 年第二季度調整後毛利潤同比下降 1,300 萬美元，即 9%，至 1.307 億美元。調整後毛利潤的下降與淨銷售額的下降以及生產水平下降導致的利潤率下降一致。正如我們之前提到的，我們看到大部分未充分利用的情況已經過去。

Selling, general and administrative expenses increased by $3.6 million to $74.5 million. The bulk of the year-over-year increase was driven by SG&A contribution from recent M&A and increased marketing investments. Adjusted EBITDA for the second quarter was $72.8 million, ahead of our guidance driven by the sales outperformance and compares to $90.9 million in the prior year. The primary driver of the year-over-year change in adjusted EBITDA was the sales volume declines in both production and net sales levels. Net income for the quarter was $16.3 million or $0.11 per share. Adjusted net income for the quarter was $27 million or adjusted diluted EPS of $0.18 per share.

銷售、一般和管理費用增加 360 萬美元，達到 7,450 萬美元。同比增長的大部分是由最近的併購和營銷投資增加帶來的SG&A貢獻推動的。第二季度調整後 EBITDA 為 7,280 萬美元，高於我們因銷售業績出色而製定的指引，而上年同期為 9,090 萬美元。調整後 EBITDA 同比變化的主要驅動因素是產量和淨銷售額水平的銷量下降。該季度淨利潤為 1,630 萬美元，即每股 0.11 美元。該季度調整後淨利潤為 2700 萬美元，調整後攤薄每股收益為 0.18 美元。

Now turning to the segment results. Residential net sales for the quarter were $342 million, down 2.4% year-over-year driven by the previously mentioned volume declines partially offset by positive pricing and M&A contribution. Our volume decline was driven by the combination of lower unit sell-through volume as expected, and the intentional management of channel inventory heading into the season. Residential adjusted EBITDA for the quarter came in at $80.4 million, which was down approximately 18% year-over-year.

現在轉向細分結果。本季度住宅淨銷售額為 3.42 億美元，同比下降 2.4%，原因是前面提到的銷量下降被積極的定價和併購貢獻部分抵消。我們的銷量下降是由於單位銷量的下降（如預期）以及進入季節時對渠道庫存的有意管理共同推動的。本季度住宅調整後 EBITDA 為 8040 萬美元，同比下降約 18%。

Commercial segment net sales for the quarter were $35.6 million, down 22.5% year-over-year. As expected and articulated last quarter, we saw channel destocking in our Vycom business and softness in some of our end markets. We expect channel destocking in this segment to continue through the fourth quarter of 2023.

該季度商業部門淨銷售額為 3560 萬美元，同比下降 22.5%。正如上季度所預期和闡明的那樣，我們看到 Vycom 業務的渠道去庫存以及一些終端市場的疲軟。我們預計該細分市場的渠道去庫存將持續到 2023 年第四季度。

Commercial segment adjusted EBITDA for the quarter came in at $7.8 million, a decrease of $900,000 year-over-year. Importantly, the business continues to benefit from the structural improvements made over the last 6 to 8 quarters as we continue to hold our segment adjusted EBITDA margin rates at or above our 20%-plus target.

本季度商業部門調整後 EBITDA 為 780 萬美元，同比減少 90 萬美元。重要的是，隨著我們繼續將部門調整後的 EBITDA 利潤率保持在或高於 20% 以上的目標，該業務繼續受益於過去 6 至 8 個季度的結構性改進。

From a balance sheet perspective and cash flow perspective, we ended the quarter with cash and cash equivalents of $126.3 million and approximately $147.2 million available for future borrowings and under our revolving credit facility. Working capital, defined as inventory plus AR minus AP was $351.8 million. We ended the quarter with gross debt of $675.8 million which included $78.8 million of finance leases.

從資產負債表和現金流的角度來看，本季度結束時，我們的現金和現金等價物為 1.263 億美元，並且根據我們的循環信貸額度可用於未來借款約 1.472 億美元。營運資金（定義為庫存加 AR 減去 AP）為 3.518 億美元。截至本季度末，我們的總債務為 6.758 億美元，其中包括 7880 萬美元的融資租賃。

Net debt was $549.6 million, and our net leverage ratio stood at 2.3x at the end of the second quarter. Net cash from operating activities was $56.7 million during the quarter versus negative cash used in operating activities of $36.9 million in the prior year period.

淨債務為 5.496 億美元，第二季度末我們的淨槓桿率為 2.3 倍。本季度經營活動產生的現金淨額為 5,670 萬美元，而去年同期經營活動使用的現金為負額 3,690 萬美元。

Capital expenditures for the quarter were approximately $17 million, down $31.7 million versus the prior year period. Overall, free cash flow in the first 6 months of the fiscal year was up $197 million year-over-year.

該季度的資本支出約為 1700 萬美元，比去年同期減少 3170 萬美元。總體而言，本財年前 6 個月的自由現金流同比增加 1.97 億美元。

As we communicated previously, we expect to accelerate our share repurchase activity in the second half of the year. We expect free cash flows to continue to expand in the second half of the year as we enter the seasonally strong cash-generating quarters while continuing to drive working capital efficiencies.

正如我們之前所傳達的，我們預計下半年將加速股票回購活動。我們預計，隨著我們進入季節性強勁的現金產生季度，下半年自由現金流將繼續擴大，同時繼續提高營運資本效率。

As a reminder, the remaining authorization under our share repurchase program is approximately $311 million. We expect to deploy capital opportunistically while being mindful of our long-term net leverage ratio target in the 2 to 2.5x range.

謹此提醒，我們的股票回購計劃剩餘授權約為 3.11 億美元。我們預計會機會性地配置資本，同時注意我們在 2 至 2.5 倍範圍內的長期淨槓桿率目標。

As we turn to the outlook, let me provide some context and color on what we are seeing and assuming for the balance of the fiscal year. Year-to-date, we've experienced slightly better results in the residential segment in a more challenged commercial market than what we assumed in our planning assumptions.

當我們談到前景時，讓我就我們對本財年餘額的觀察和假設提供一些背景和色彩。今年迄今為止，在面臨更大挑戰的商業市場中，我們在住宅領域的業績比我們在規劃假設中的假設略好。

As Jesse mentioned, we now expect our commercial business to be pressured by approximately $15 million on a segment adjusted EBITDA basis from our planning assumption profile. It is important to provide some context on our commercial business performance expected for the year. First, we expect the channel destocking to be completed by the end of 4Q '23.

正如傑西提到的，根據我們的規劃假設情況，我們現在預計我們的商業業務將面臨約 1500 萬美元的壓力，按部門調整後的 EBITDA 計算。提供有關我們今年預期商業業務業績的一些背景信息非常重要。首先，我們預計渠道去庫存將於 23 年第四季度末完成。

Second, we expect approximately half of the sales impact to be driven by channel destocking. Third, of the $15 million of commercial segment EBITDA pressure, approximately $10 million plus is expected in the third and fourth quarters of the fiscal year. Finally, even with channel destocking and associated impact to the P&L, we are confident that the hard work that we've done on the business will allow us to hold our full year segment EBITDA margins at or above 20%.

其次，我們預計大約一半的銷售影響將由渠道去庫存推動。第三，在商業部門 1500 萬美元的 EBITDA 壓力中，預計本財年第三和第四季度將增加約 1000 萬美元。最後，即使渠道去庫存以及對損益表產生相關影響，我們仍然相信，我們在業務上所做的努力將使我們能夠將全年部門 EBITDA 利潤率保持在 20% 或以上。

We expect the remainder of the business to offset the commercial pressure, and we are reaffirming our full year planning assumption of 2023 adjusted EBITDA range between $250 million to $265 million. As we have previously communicated, we expect to see healthy margins in the second half of the year with the third quarter margins accretive to 2Q '23 from the prior year, and we expect to see fourth quarter margins accretive to 3Q '23 from the prior year. Our margin drivers remain raw material costs, improved production volumes and cost down programs.

我們預計其餘業務將抵消商業壓力，並且我們重申 2023 年調整後 EBITDA 範圍在 2.5 億至 2.65 億美元之間的全年規劃假設。正如我們之前所傳達的，我們預計今年下半年將實現健康的利潤率，第三季度的利潤率將比上年同期增加到 2023 年第二季度，我們預計第四季度的利潤率將比上年同期增加到 23 年第三季度年。我們的利潤驅動因素仍然是原材料成本、產量提高和成本降低計劃。

Additionally, relevant full year planning assumptions include: one, we are expecting a 3Q '23 volume decline, which will be offset with positive volume growth in 4Q '23 as we lapped the prior year channel destock. And two, we expect strong free cash flow generation, driven by a return to more traditional CapEx levels in the range between $70 million and $80 million as well as progress against our targeted reductions in inventory. Additionally, planning assumption context is also available in our supplemental earnings presentation.

此外，相關的全年計劃假設包括：第一，我們預計 23 年第 3 季度銷量下降，這將被 23 年第 4 季度銷量正增長所抵消，因為我們已經完成了上一年的渠道去庫存。第二，我們預計將產生強勁的自由現金流，這是由回歸到 7000 萬美元至 8000 萬美元範圍內的更傳統的資本支出水平以及我們的庫存削減目標取得進展所推動的。此外，我們的補充收益報告中還提供了計劃假設背景。

Before we turn to our fiscal third quarter guidance, I wanted to provide context for the operating environment we expect in the quarter. As a reminder, 3Q is historically the beginning of the building season. At present, channel inventory levels at the end of March are lower than the 2017 to 2019 average days on hand.

在我們轉向第三財季指導之前，我想介紹一下我們預期的本季度運營環境的背景。提醒一下，從歷史上看，第三季度是建築季節的開始。目前，3月底渠道庫存水平低於2017年至2019年平均庫存天數。

We are in constant communication with our distribution partners to ensure that the market has the product needed for the season. We are confident that our current lead times will allow us to service any incremental customer demand. As Jesse mentioned upfront, contractor backlogs remained consistent with the prior quarter at roughly 8 weeks. And both our contractor and dealer sentiment remain above average and were consistent with the prior quarter survey. These factors are balanced by continued macroeconomic uncertainty.

我們與分銷合作夥伴不斷溝通，以確保市場擁有當季所需的產品。我們相信，我們目前的交貨時間將使我們能夠滿足任何增量的客戶需求。正如 Jesse 之前提到的，承包商積壓訂單與上一季度保持一致，約為 8 週。我們的承包商和經銷商的信心仍然高於平均水平，並且與上一季度的調查結果一致。這些因素被持續的宏觀經濟不確定性所平衡。

Additional context for our 3Q '23 guidance includes production levels have stabilized in the back half of '23. We expect production levels to be in line with demand in the second half of the fiscal year. Key raw materials and commodity projections continue to be in line with our planning assumptions, and we anticipate $30 million of net benefit in the second half of 2023 as lower cost inventory flows through our balance sheet.

我們 23 年第三季度指導的其他背景包括生產水平在 23 年下半年趨於穩定。我們預計本財年下半年的生產水平將與需求保持一致。主要原材料和大宗商品預測繼續符合我們的規劃假設，隨著成本較低的庫存流經我們的資產負債表，我們預計 2023 年下半年將實現 3000 萬美元的淨利潤。

We are comfortable that underutilization has fully flowed through in the first half of the year for labor and overhead. Cash conversion and working capital improvements remain a priority for us in the second half of the year. With all this in mind, for 3Q '23, we expect consolidated net sales between $358 million to $378 million, and we expect adjusted EBITDA between $81 million and $89 million.

我們感到欣慰的是，今年上半年勞動力和管理費用的利用率不足已經完全消失。現金轉換和營運資本改善仍然是我們下半年的首要任務。考慮到所有這些，我們預計 23 年第三季度的綜合淨銷售額將在 3.58 億美元至 3.78 億美元之間，調整後的 EBITDA 將在 8100 萬美元至 8900 萬美元之間。

With that, I'll now turn the call back to Jesse for closing remarks.

現在，我將把電話轉回給傑西，讓他作結束語。

Thanks, Pete. I would like to take a moment to again recognize and thank our dedicated team members, channel and supplier partners and contractors that support The AZEK Company. Thank you for your commitment and your contribution to the results this quarter.

謝謝，皮特。我想再次感謝我們敬業的團隊成員、渠道和供應商合作夥伴以及支持 The AZEK 公司的承包商。感謝您的承諾以及對本季度業績的貢獻。

We are in an excellent position to outperform the market in an uncertain environment and realize the margin benefits of our sourcing and recycling initiatives through the balance of the year. Our focused working capital improvements and expected meaningful free cash flow generation during the second half of the fiscal year put us in a great position from a cash perspective. The fundamentals of our business are strong as is our confidence in the long-term growth, material conversion and margin expansion opportunity. We have a clear strategy and AZEK-specific initiatives to drive above-market growth.

我們處於有利位置，可以在不確定的環境中跑贏市場，並在今年餘下時間實現我們的採購和回收計劃的利潤效益。我們重點改善營運資本，並預計在本財年下半年產生有意義的自由現金流，這使我們從現金角度處於有利地位。我們業務的基本面十分強勁，我們對長期增長、材料轉換和利潤擴張機會充滿信心。我們有明確的戰略和針對 AZEK 的具體舉措來推動高於市場的增長。

With that, operator, please open the line for questions.

那麼，接線員，請開通提問線路。

(Operator Instructions) Again, we'll take our first question this afternoon from Tim Wojs of Baird.

（操作員說明）今天下午我們將再次回答來自 Baird 的 Tim Wojs 的第一個問題。

Maybe just as you kind of look at the back half of the year, Jesse, I know it's the 2 quarters so far kind of your shoulder quarters. But I guess what would you need to see or what do you want to see to kind of give you confidence that the kind of above trend demand that you've seen over the last -- not above trend above -- demand that's better than you thought kind of initially over the last 2 quarters can kind of show through in the back half of the year?

也許就像你回顧今年下半年一樣，傑西，我知道這是迄今為止你肩膀上的兩個季度。但我猜你需要看到什麼，或者你想要看到什麼，才能讓你相信你過去看到的那種高於趨勢的需求——而不是高於趨勢的需求——比你更好的需求您認為過去兩個季度的情況可以在今年下半年體現出來嗎？

Yes. Thanks for the question, Tim. From what we see now, as we made commentary on the call, we're planning on very modest improvements from our planning assumption. And as your question implies, we're being conservative in our view relative to the back half of the year. I think for us, we just need -- we need to continue to see the season hold as it's progressing right now.

是的。謝謝你的提問，蒂姆。從我們現在看到的情況來看，當我們對電話會議發表評論時，我們計劃對我們的規劃假設進行非常適度的改進。正如你的問題所暗示的那樣，我們對今年下半年的看法持保守態度。我認為對我們來說，我們只需要——我們需要繼續看到賽季的進展，因為它現在正在進展。

We feel really good about what our contractors and dealers are telling us about their backlogs, what they see on the ground. So the communication is positive. We just need to see that positive momentum, consistently convert to revenue. And we are hopeful, but it's early in the season. And as such, we want to see a few more cards.

我們對承包商和經銷商告訴我們的積壓訂單以及他們在現場看到的情況感到非常滿意。所以溝通是積極的。我們只需要看到這種積極的勢頭，不斷轉化為收入。我們充滿希望，但現在還處於賽季初期。因此，我們希望看到更多的牌。

Okay. That's great. And then maybe just a second one, just as you think about kind of deflation on an annualized basis? I mean it sounds like you're kind of collapsing a little bit around that kind of $50 million annualized number, Pete. Is that the right message?

好的。那太棒了。然後也許只是第二個，就像你考慮年化通貨緊縮的情況一樣？我的意思是，皮特，聽上去你對於 5000 萬美元的年化數字有點崩潰了。這是正確的信息嗎？

Yes. If you remember in our last call, the November CDIs were a little bit more optimistic, and we thought we might have a little bit of upside. The more recent CDIs have kind of fallen back and really just support our original planning assumptions. So we feel passionate about our ability to be able to deliver the $50 million of total deflation and the $30 million of P&L impact in '23.

是的。如果您還記得在我們上次的電話會議中，11 月份的 CDI 稍微樂觀一些，我們認為我們可能會有一點上行空間。最近的 CDI 有所回落，實際上只是支持我們最初的規劃假設。因此，我們對能夠在 23 年實現 5000 萬美元的總通貨緊縮和 3000 萬美元的損益影響的能力充滿熱情。

I think just an added comment, Tim. Part of our focus on bringing our own inventories down is it puts us in a position if and when there is additional raw material opportunity that we're in a better position to realize that faster to the bottom line. And so what we're doing relative to inventory is very conscious to make sure that we're in a good position to take advantage of any additional opportunities, not only this year, but as we move into '24.

我想只是補充一下，蒂姆。我們專注於降低庫存的部分原因是，如果有額外的原材料機會，我們就能更好地更快地實現盈利。因此，我們在庫存方面所做的事情是非常有意識的，以確保我們處於有利地位，可以利用任何額外的機會，不僅是今年，而且在我們進入 24 世紀時也是如此。

We go next now to Keith Hughes with Truist Securities.

接下來我們請教 Truist 證券公司的基思·休斯 (Keith Hughes)。

Question for the -- on the third quarter guidance, what kind of pricing are you expecting -- year-over-year pricing are you expecting in the residential segment?

關於第三季度指導的問題，您預計住宅領域的同比定價是什麼樣的？

Yes, Keith, this is Peter. As you know, our kind of last price increase was taken in May. So we've really only got a partial quarter. So you should think of it as kind of low single digits from a price realization perspective.

是的，基思，這是彼得。如您所知，我們上次提價是在五月份。所以我們實際上只有部分季度。因此，從價格實現的角度來看，您應該將其視為較低的個位數。

And then in the fourth quarter, would that basically get flat at that point?

然後到了第四季度，情況會基本持平嗎？

Yes.

是的。

Okay. And how much in terms of acquisitions, how much would that add to the quarter?

好的。就收購而言，這會給本季度帶來多少增量？

Third quarter is really kind of the main lapping. So it's about $6 million is how you could think of it.

第三季度確實是主要的研磨。所以你可以想像大約是 600 萬美元。

$6 million. Okay. And we really seem to be heading towards some growth in the fourth quarter based on where your guidance is trending in residential. If that's correct, is that going to be restock, do you think, is that going to be actually sell-through of the contract? Or what's your 6-month outlook on that topic?

600萬美元。好的。根據您對住宅領域的指導趨勢，我們似乎確實會在第四季度實現一些增長。如果這是正確的，那麼是否會重新進貨，您認為這是否會真正實現合同的售罄？或者您對該主題的 6 個月展望如何？

Yes. Keith, as you remember, we actually took down or tore down inventory last year in the fourth quarter. So that's the main driver. But I think also relevant, as Jesse said, look, in fairness, as we look to see more of the cards realistically, if we're going to see any strength in the residential demand, that's almost certainly going to show up in the fourth quarter.

是的。基思，正如你所記得的，我們實際上在去年第四季度減少或拆除了庫存。這就是主要驅動力。但我認為也相關，正如傑西所說，公平地說，當我們希望看到更多現實的卡片時，如果我們要看到住宅需求的任何強勁，那幾乎肯定會在第四季度出現四分之一。

Yes. The key here -- Keith, on that, I think the key here, as Pete pointed out, is we're not -- as we move to the implied guide for the fourth quarter, we're not assuming any kind of sell-through growth. What we're assuming is modestly better than our initial 10% down volume that we talked about. And so that's what we mean about seeing additional cards is, we need to see how the sell-through holds up and where we ultimately end up. But the current guide -- the current implied guide is really that inventory refill plus or a modest improvement on our assumptions.

是的。這裡的關鍵 - 基思，我認為這裡的關鍵，正如皮特指出的那樣，我們不是 - 當我們轉向第四季度的隱含指南時，我們不會假設任何形式的銷售 -通過成長。我們假設的情況比我們最初討論的 10% 的下跌量要好一些。這就是我們看到更多卡牌的意思，我們需要看看銷售情況如何以及我們最終的結果。但當前的指導——當前隱含的指導實際上是庫存補充加上或對我們的假設的適度改進。

And we'll take our next question now from Matthew Bouley of Barclays.

現在我們將回答巴克萊銀行的 Matthew Bouley 提出的下一個問題。

So I think I heard you say that in commercial, the $15 million full year impact, you're saying that $10 million of that would occur in the second half, but that you still expect margins of 20% for the full year. So I guess, implying a sort of meaningful top line decline in the second half in commercial. So I guess, I'm just asking if you can put a finer point on that. Sort of where do you expect commercial revenues year-over-year in Q3 and Q4 relative to resi?

所以我想我聽到你說，在商業領域，全年影響 1500 萬美元，你是說其中 1000 萬美元將發生在下半年，但你仍然預計全年利潤率為 20%。所以我想，這意味著下半年商業收入會出現某種有意義的下降。所以我想，我只是問你是否可以對此提出更具體的觀點。您預計第三季度和第四季度的商業收入相對於 Resi 來說是多少？

What I think I would say, Matt, is for the full year, how we're thinking about the business in the guidance here is top line down about 20% for the full year and the bottom line down about 20% for the full year.

馬特，我想說的是，我們在指導中如何看待全年的業務，全年營收下降約 20%，淨利潤下降約 20% 。

Okay. Got it. That's helpful. And then so I guess putting the math together, it seems like you're assuming that residential earnings in the second half are roughly similar to how you were previously thinking. And please correct me if I'm wrong there. But just given some of the trends year-to-date have been a little bit better than your expectations, at least in terms of sell-through, maybe you're pushing forward on recycling. Is there any other pieces of the bridge pluses or minuses that are kind of keeping you from lifting that residential outlook?

好的。知道了。這很有幫助。然後，我想將數學放在一起，似乎您假設下半年的住宅收入與您之前的想法大致相似。如果我錯了，請糾正我。但考慮到今年迄今為止的一些趨勢比您的預期要好一些，至少在銷售方面，也許您正在推動回收利用。這座橋的其他優點或缺點是否會阻礙您提升住宅前景？

Yes. I mean, I wish there was a less boring story, but as we've kind of said, look, we feel like the pricing picture is nearly identical to what we thought. Deflation is nearly identical to what we thought. We're past the first half kind of onetime costs of the underutilization. This is really a story of the markets modestly better on the residential side, coupled with some initiatives, offsetting volume softness that's really the bulk of it driven by destocking on the commercial side. So it's a story of volume being a bit better on residential and covering, in essence, some softness on the commercial side.

是的。我的意思是，我希望有一個不那麼無聊的故事，但正如我們所說，看，我們覺得定價情況幾乎與我們的想法相同。通貨緊縮與我們的想像幾乎相同。我們已經度過了上半年因未充分利用而產生的一次性成本。這實際上是住宅市場略有好轉的故事，再加上一些舉措，抵消了銷量疲軟的影響，而銷量疲軟實際上主要是由商業方面的去庫存推動的。因此，這是一個關於住宅成交量有所改善的故事，本質上覆蓋了商業方面的一些疲軟。

We'll take our next question now from Michael Rehaut at JPMorgan.

我們現在將回答摩根大通的 Michael Rehaut 提出的下一個問題。

I wanted to first just kind of zero in on -- as you -- within residential, as you kind of move this year through a lot of the different types of comparisons that create a bit of noise, and you're actually looking at a POS backdrop that's a lot more stable. Assuming -- and it's obviously a big assumption, but assuming '24 you're looking at a kind of similar backdrop and the economy doesn't fall off. Everything else equal, I mean is it reasonable to assume that residential will get back to a more normalized growth cadence? And specifically, just kind of thinking about share gains here, either composite over wood or even your own efforts within the industry to gain share within composites.

我想首先像你一樣，在住宅領域進行零投入，因為你今年經歷了許多不同類型的比較，這些比較產生了一些噪音，而你實際上正在尋找一個POS後台就穩定多了。假設——這顯然是一個很大的假設，但假設 24 年你看到的是一種類似的背景，而且經濟不會衰退。在其他條件相同的情況下，我的意思是，假設住宅將恢復到更加正常化的增長節奏是否合理？具體來說，只需考慮一下這裡的份額收益，無論是複合材料還是木材，甚至是您自己在行業內為獲得複合材料份額而做出的努力。

Yes. I would say, Mike, is it's way too early. We're about halfway through the year in '23. So it's way too early to give any kind of commentary on '23. I would just anchor back to what we talked about, which is we feel really good about our initiatives this year -- both on the top and bottom line this year. We've had some really nice momentum against those initiatives.

是的。我想說，邁克，現在還太早嗎？ 23 年已經過半了。所以現在對 23 做出任何評論還為時過早。我只想回到我們所討論的內容，那就是我們對今年的舉措感到非常滿意——無論是今年的營收還是淨利潤。我們在反對這些舉措方面取得了一些非常好的勢頭。

When you have -- when you have either product launches or shelf gains or even margin initiatives when they hit within the year, you get the benefit rolling into the following year. And so it's difficult to really handicap the market and the environment next year, and it wouldn't be prudent to do so. But we feel really good about our ability to execute the initiatives we talked about to drive above-market growth. And we think we're really well positioned as -- and we continue to position ourselves so that we can continue to take advantage of the opportunities that we see near the tail end of this year into next year. And an example of that is we are not waiting to draw down our inventory, we're taking steps to be prudent on that inventory drawdown when and where we see opportunity. And we believe that gives us more opportunity as we move into '24 to really realize what might be available to us.

當你在一年內推出產品或增加貨架，甚至增加利潤時，你就能將收益延續到下一年。因此，明年很難真正阻礙市場和環境，而且這樣做也不謹慎。但我們對執行我們所討論的推動高於市場增長的舉措的能力感到非常滿意。我們認為我們確實處於有利位置，並且我們將繼續定位自己，以便我們能夠繼續利用我們在今年年底到明年看到的機會。一個例子是，我們不會等待減少庫存，而是在看到機會時採取謹慎的庫存減少措施。我們相信，當我們進入 24 世紀時，這給了我們更多的機會來真正認識到我們可以得到什麼。

Right. No, no, understood. I think secondly, Pete, you kind of referred to the fact that you're going to be in a better position in the back half of the year from a share repurchase standpoint. Any type of guardrails you might offer up in terms of degree of magnitude in terms of the amount of capital that you might have at your disposal in that area. Obviously, last year, you did a little more than $80 million of share repurchase, and it's going to be a pretty good free cash flow year this year. So any thoughts around how to frame the potential for share repurchase in the back half?

正確的。不不不，明白了。其次，我認為，皮特，您提到了這樣一個事實，即從股票回購的角度來看，您將在今年下半年處於更好的位置。您可能會提供任何類型的護欄，其程度取決於您在該領域可能擁有的資本數量。顯然，去年你們回購了略高於 8000 萬美元的股票，今年將是自由現金流相當不錯的一年。那麼對於如何確定下半年股票回購的潛力有什麼想法嗎？

Mike, this is Peter. To your point, look, I think our guardrail has historically been a desire to want to stay within our leverage ratio targets 2 to 2.5x. And just with that said, given our EBITDA expansion in the back half of the year, it would suggest we can at least do as much as we did last year, possibly more and probably still stay modestly below the 2.5x.

邁克，這是彼得。就你的觀點而言，我認為我們的護欄歷來都是希望將槓桿率保持在 2 至 2.5 倍的目標範圍內。話雖如此，考慮到今年下半年我們的 EBITDA 擴張，這表明我們至少可以做到與去年一樣多，甚至可能更多，並且可能仍略低於 2.5 倍。

Okay. And that's 2 to 2.5x on a debt to capital, not -- I'm sorry, debt-to-EBITDA, not net debt-to-EBITDA, correct?

好的。這是債務與資本之比的 2 到 2.5 倍，不是——抱歉，是債務與 EBITDA 之比，而不是淨債務與 EBITDA 之比，對嗎？

Yes, correct.

是，對的。

We go next now to Philip Ng at Jefferies.

接下來我們請傑富瑞 (Jefferies) 的 Philip Ng 發言。

Jesse, it'd be helpful if you give a little more color on how sell-through demand progressed through the quarter into April? I know it's coming a little better, but any more specific color would be helpful. You did mention that your channel partners are still having pretty low inventory. Have you started seeing them come back and restock? And if things are stronger, can you build enough, I guess, to meet that demand this decking season?

傑西，如果您能更詳細地說明本季度到四月份的銷售需求進展情況，會有幫助嗎？我知道它會好一點，但任何更具體的顏色都會有幫助。您確實提到您的渠道合作夥伴的庫存仍然很低。您是否開始看到他們回來補貨？如果事情變得更強大，我猜你能建造足夠的東西來滿足這個裝飾季的需求嗎？

Yes. As we -- on the latter point, as we talked about -- we have a large amount of capacity, and we are appropriately ramping production in each of our areas. So we're well set up the best we've ever been to be able to meet any incremental demand above and beyond, not only what we've guided to, but above and beyond any conversations of upside that we may have had with our partners relative to sell-through demand.

是的。正如我們所談到的，關於後一點，我們擁有大量產能，並且我們正在適當提高每個領域的產量。因此，我們已經做好了有史以來最好的準備，能夠滿足任何超出我們指導的增量需求，而且超出我們可能與我們進行的任何積極對話。與銷售需求相關的合作夥伴。

I'm not going to parse out month by month. I would say that, in general, if you look across the time period of, let's call it, year-to-date. In general, things have been relatively consistent as we look across that time frame. Now you're naturally going to ask a question because it's been published in a number of different areas. How have we seen weather, et cetera. I would say that certainly, some geographies have seen an impact of kind of timing and weather and those kinds of things. But in general, in our case, they have been offset by strength in other geographies. And so as we look at things in totality, we've seen pretty steady sell-through growth with timing, geography, kinds of variations. But in general, we feel really good. And that continues as we stand here today.

我不會逐月分析。我想說的是，一般來說，如果你回顧一下今年迄今為止的時間段。總的來說，從我們觀察的時間範圍來看，情況相對一致。現在您自然會問一個問題，因為它已在許多不同的領域發布。我們如何看待天氣等等。我想說，當然，某些地區已經看到了時間和天氣等因素的影響。但總的來說，就我們而言，它們已被其他地區的實力所抵消。因此，當我們從整體上看待事物時，我們發現銷售量的增長相當穩定，並且隨著時間、地理位置和各種變化而變化。但總的來說，我們感覺非常好。當我們今天站在這裡時，這種情況仍在繼續。

Super. And from a margin standpoint, perhaps for you, Pete, I think implicitly implies that EBITDA margin in the back half or probably going to be in the mid-20% range. Is that something we could build off when we look out to 2024? Just because historically, there's not a ton of movement through the year. The first half was certainly very noisy. So can we work off the back half? And if there's growth, would there be leverage to that? How should we think about looking out to 2024 from a margin standpoint?

極好的。從利潤率的角度來看，也許對你來說，Pete，我認為這隱含著 EBITDA 利潤率在後半段或可能在 20% 左右的範圍內。當我們展望 2024 年時，這是我們可以構建的東西嗎？只是因為從歷史上看，一年中沒有大量的變動。上半場確實非常吵鬧。那麼我們可以把後半部分處理掉嗎？如果有增長，是否會有槓桿作用？從利潤率的角度來看，我們應該如何看待 2024 年？

Yes. I mean here, what I would say, Phil, is -- look, again, as Jesse stated on, I think we want to avoid sort of '24 guidance. But what I think I would say is similar to last year, I think we can be transparent about what we see as sort of the items that kind of carry over to next year that give us comfort or confidence. So obviously, we've already talked about the $20 million of carryover deflation. Obviously, we don't have the unusual or the first half of '23 reoccurring next year. We're not going to have the 1Q '23 channel inventory reduction in sales. We should be seeing more closely a full year of our low-density impact on our cap composites. So there's a number of things out there that we're confident that we can build on next year, but I think we want to get closer to year-end before we start giving folks the right jump off.

是的。我的意思是，菲爾，我想說的是——再看一下，正如傑西所說，我認為我們希望避免某種“24 小時指導”。但我想我想說的是與去年類似，我認為我們可以對我們所看到的那些可以延續到明年給我們帶來安慰或信心的項目保持透明。顯然，我們已經討論過 2000 萬美元的結轉通貨緊縮。顯然，明年我們不會再出現 23 年上半年的不尋常情況。我們不會在 23 年第一季度的銷售中減少渠道庫存。我們應該更仔細地觀察一整年的低密度對我們的蓋複合材料的影響。因此，我們有信心明年可以在很多事情的基礎上再接再厲，但我認為我們希望在接近年底的時候才能開始為人們提供正確的起點。

But Pete, was it right that we should think about not a lot of volatility in the margins through the year, typically?

但是皮特，我們通常應該考慮全年利潤率不會有太大波動，這對嗎？

Yes. Other than 1Q, that's our kind of seasonal low. So 1Q tends to be our lowest kind of gross margin quarter. And then to your point, I think there's a lot more sustainability to Q3, 4Q typically.

是的。除第一季度外，這是我們的季節性低點。因此，第一季度往往是我們毛利率最低的季度。然後就你的觀點而言，我認為第三季度、第四季度通常具有更多的可持續性。

We go next now to Ryan Merkel at William Blair.

接下來我們請來威廉·布萊爾的瑞安·默克爾。

I wanted to go back to commercial. Can you just talk about some of the drivers of the sudden slowdown? And then how do we -- how did you ring fence sort of the $15 million change to guidance?

我想回到商業領域。您能談談導致經濟突然放緩的一些驅動因素嗎？然後我們如何——你是如何對 1500 萬美元的指導進行修改的？

Yes. I'll take a very high level. Our commercial business participates in a lot of markets. And in looking at the inventory in their channel, I think we mentioned on the last call, that we were seeing some slowdown in some expected destock. And I think we specifically made commentary on the last call that as we see some more positives on the residential side that we might need that to offset some of the destocking that might occur on the commercial side.

是的。我會採取非常高的水平。我們的商業業務參與很多市場。在查看他們渠道中的庫存時，我認為我們在上次電話會議中提到，我們看到一些預期的去庫存有所放緩。我認為我們在上次電話會議中特別發表了評論，因為我們看到住宅方面有更多的積極因素，我們可能需要抵消商業方面可能發生的一些去庫存。

I think all you're hearing today is we're able to get much more specific data on it. It's not unusual in certain markets and some commercial markets where you can now get a better assessment of whether or not there is excess and what that excess is. And I think what we saw is as we move through the second quarter, our channel partners and in some cases, the OEMs that use our products, basically either being impacted by their end markets or realizing that they have enough production for a period of time and then communicating the specifics of what the ramifications are to us. So we signaled it on the last call, and I think we sized it on this call.

我想你們今天聽到的只是我們能夠獲得更多具體數據。這在某些市場和一些商業市場中並不罕見，您現在可以更好地評估是否存在過剩以及過剩是什麼。我認為，隨著第二季度的進展，我們的渠道合作夥伴以及在某些情況下使用我們產品的原始設備製造商基本上要么受到終端市場的影響，要么意識到他們在一段時間內有足夠的產量然後向我們傳達具體影響。所以我們在上次通話中發出了信號，我想我們在這次通話中確定了它的大小。

So Pete, with that, let me turn it over to you on the ring fence conversation.

皮特，接下來，讓我把圍牆談話轉給你。

Yes. No. I think, Ryan, what gives us comfort, as Jesse said, look, this wasn't just a conversation with our channel partners. We really tried to get down to end users and the OEMs to understand inventory in the total system, not just in the channel and really did a lot of work to kind of parse out demand versus channel destocking. So this is the best information we have and the team got exceptionally granular and their view to kind of get us to where we're at right now.

是的。不。我認為，瑞安，什麼讓我們感到安慰，正如傑西所說，看，這不僅僅是與我們的渠道合作夥伴的對話。我們確實嘗試深入了解最終用戶和原始設備製造商，以了解整個系統中的庫存，而不僅僅是渠道中的庫存，並且確實做了很多工作來解析需求與渠道庫存減少。所以這是我們擁有的最好的信息，團隊的信息非常細緻，他們的觀點讓我們達到了現在的水平。

Okay. That's helpful. And then looking at Exteriors, I know it sounds like things are pretty good there, but what's the risk of a destock and Exteriors at some point in the near future?

好的。這很有幫助。然後看看外觀，我知道聽起來情況相當不錯，但是在不久的將來某個時候去庫存和外觀的風險是什麼？

Yes. Exteriors, their inventory -- correction, if you will, first was modest. And you have to look at the dynamics of that business. We really didn't have an inability to supply the volume. We were always able to supply the volume over the last 3 years. And as such, there was modest inventory build, and that inventory build was really corrected a year ago. And so we have been operating with our Exteriors business for well over 6 months, effectively from the beginning of the fiscal year with our Exteriors business really reflecting the actual demand.

是的。外觀，他們的庫存——修正，如果你願意的話，首先是適度的。你必須關注該業務的動態。我們確實沒有能力供應大量的產品。在過去的三年裡，我們始終能夠供應大量的產品。因此，庫存增加量不大，而且庫存增加在一年前就得到了真正的糾正。因此，從本財年開始，我們的外飾業務已經運營了 6 個多月，我們的外飾業務真正反映了實際需求。

And I think that business has done a terrific job of continuing to service customers and continuing to gain share against wood through our new products, and that's really put us in a position where in that business, we believe that we can point to some clear areas where we are outgrowing the market. And as a reminder, that business does have some modest exposure to new construction and through our initiatives. So far, we've been able to offset any kind of weakness we've seen in our -- in particular, our production, new construction part of the portfolio.

我認為該業務在繼續為客戶提供服務並通過我們的新產品繼續獲得木材市場份額方面做得非常出色，這確實使我們在該業務中處於有利位置，我們相信我們可以指出一些明確的領域我們的增長速度超過了市場。提醒一下，該企業確實對新建築和我們的舉措有一定的了解。到目前為止，我們已經能夠抵消我們在投資組合的生產、新建部分中看到的任何弱點。

We'll take our next question now from Susan Maklari at Goldman Sachs.

我們現在將回答高盛 (Goldman Sachs) 的蘇珊·馬克拉里 (Susan Maklari) 提出的下一個問題。

My first question is, can you talk a little bit about mix? Have you seen any changes to that as we're going into the season? And I guess if there are any changes, are there implications there as you think about the price and how that will flow-through in the next couple of quarters?

我的第一個問題是，你能談談混音嗎？當我們進入這個賽季時，你看到了什麼變化嗎？我想如果有任何變化，當你考慮價格以及未來幾個季度的價格變化時，是否會產生影響？

Yes. Just on the price side, as Pete highlighted, we feel really good about where we stand relative to price and everything that we are putting in our assumptions is pretty consistent with how we view things at the beginning of the year. Relative to mix, it's an area that we're always probing. And I think in our case, in some of our specific product areas, the mix we have, we've sustained in certain cases, where we have picked up incremental position or incremental share in areas where we were unable to participate over the last few years.

是的。正如皮特所強調的那樣，就價格而言，我們對我們相對於價格的立場感到非常滿意，並且我們假設的所有內容都與我們在年初的看法非常一致。相對於混合，這是我們一直在探索的一個領域。我認為就我們的情況而言，在我們的一些特定產品領域，我們在某些​​情況下維持了我們所擁有的組合，在過去幾年我們無法參與的領域，我們已經獲得了增量地位或增量份額年。

In certain cases, those would be at more the good part of the portfolio. So the way we -- from what we can see right now from a mix standpoint, the mix is, in general, holding and some of the incremental that we gained is having a modest impact on our mix. But right now, our premium products continue to be premium products and the opportunity that we see is one that we're just taking advantage of in other segments.

在某些情況下，這些將是投資組合中更重要的部分。因此，從我們現在從混合的角度來看，混合的方式總體上是穩定的，並且我們獲得的一些增量對我們的混合產生了適度的影響。但目前，我們的優質產品仍然是優質產品，我們看到的機會只是我們在其他領域利用的機會。

Okay. That's helpful. And then following up, you've talked to the Residential business growing at an 8% to 10% rate over time. As you think about where the business will be as you exit '23 and think about '24, do you think that you can get back to that 8% to 10% next year? And is that still a good rate to think about over the longer term?

好的。這很有幫助。接下來，您談到住宅業務隨著時間的推移以 8% 到 10% 的速度增長。當您思考 23 年退出並考慮 24 年時業務將走向何方時，您認為明年可以恢復到 8% 到 10% 嗎？從長遠來看，這仍然是一個值得考慮的好利率嗎？

Yes. I think certainly, it's a good rate to think about over the longer term. What underpins that number that we highlighted a year ago during Investor Day and Analyst Day is roughly a low to mid-single-digit R&R growth rate. And I think if you look at estimates right now for R&R in '23, they are negative. And we're building on top of that.

是的。我認為，從長遠來看，這是一個不錯的利率。我們一年前在投資者日和分析師日強調的這一數字的基礎是大致低至中個位數的 R&R 增長率。我認為如果你看看現在對 23 年 R&R 的估計，它們是負面的。我們正在在此基礎上進行構建。

I think as we move into '24, we certainly believe that if R&R returns back to the normal growth rate, we'll have an opportunity with our initiatives to outgrow the underlying R&R market at the levels we talked about. So once again, the way to think of it for us in a more normalized environment is we would certainly want to target, call it, 4% to 5% above the underlying R&R growth rate. And everything that we're seeing our new products, our new execution, our new opportunities that we've had this year, I think, put us in a good position to be able to deliver that.

我認為，隨著我們進入 24 年，我們當然相信，如果 R&R 恢復到正常增長率，我們將有機會通過我們的舉措，以我們討論的水平超越基礎 R&R 市場。因此，在更加正常化的環境中，我們的思考方式是，我們肯定希望將目標定為高於基本 R&R 增長率 4% 至 5%。我認為，我們今年所看到的新產品、新執行、新機會使我們處於有利地位，能夠實現這一目標。

We go next now to John Lovallo at Bank of America.

接下來我們請聽美國銀行的約翰·洛瓦洛 (John Lovallo)。

This is actually [Spencer Kaufman] on for John. Maybe just the first one, based on your 3Q guide and the full year guide for EBITDA, it implied a pretty similar EBITDA in both the third and fourth quarter. I was hoping you could just help us through some of the puts and takes there and also just the timing of the $30 million of those cost savings?

這實際上是[斯賓塞·考夫曼]為約翰做的。也許只是第一個，根據您的第三季度指南和全年 EBITDA 指南，它意味著第三季度和第四季度的 EBITDA 非常相似。我希望您能幫助我們完成一些看跌期權和看跌期權，以及節省 3000 萬美元成本的時機？

Yes. This is Peter. Look, the split on the deflation is fairly balanced between the third and fourth quarter, again, the drivers are still consistent with last quarter and how to think about the back half of the year. The 3 pieces are, again, deflation. Second one is the kind of nonrecurring underutilization and accounting change at the first half of the year, coupled with additional volume in the back half of the year. It's purely driven by the seasonality of the third and fourth quarter. I mean those are the 3 elements, and they're still completely intact.

是的。這是彼得。看，第三季度和第四季度通貨緊縮的分配相當平衡，驅動因素仍然與上季度一致，以及如何看待下半年。這三塊又是通貨緊縮。第二個是上半年的非經常性利用不足和會計變化，加上下半年的額外交易量。這純粹是由第三季度和第四季度的季節性因素推動的。我的意思是，這就是三個要素，而且它們仍然完好無損。

Okay. Understood. And earlier, you mentioned that channel inventory levels are about 15% below average levels from 2017 and 2019. I mean do you think that we could get back to those levels over the next 12 months or so? And kind of what would need to happen to get there?

好的。明白了。早些時候，您提到渠道庫存水平比 2017 年和 2019 年的平均水平低約 15%。我的意思是，您認為我們可以在未來 12 個月左右恢復到這些水平嗎？到達那裡需要發生什麼？

Yes. I -- first off, I think from our vantage point, having a more conservative amount of inventory in the channel is a good thing at this point in time. When you're dealing with the potential for uncertainty or the potential, I'm not saying it will manifest itself, but when you're dealing with the potential for some market uncertainty, I think our key objective was to derisk both our own inventory and inventory in the channel, derisk our future results by getting our inventory in a good spot.

是的。首先，我認為從我們的角度來看，目前渠道中擁有更保守的庫存量是一件好事。當你處理潛在的不確定性或潛力時，我並不是說它會自行顯現，但是當你處理某些市場不確定性的可能性時，我認為我們的主要目標是降低我們自己的庫存風險和渠道中的庫存，通過將我們的庫存放在一個好的位置來降低我們未來業績的風險。

I think what the channel ultimately carries where it ends up, I think will be an outcome of where we see the confidence in where we see the opportunity. Clearly, if sell-through comes in above our conservative estimates, there'll need to be some additional inventory in the channel and that -- but that would still allow us to operate on lower days on hand.

我認為這個渠道最終承載的是什麼，我認為這將是我們對機會充滿信心的結果。顯然，如果銷售量高於我們保守的估計，渠道中將需要一些額外的庫存，但這仍然允許我們在手頭上的天數較少的情況下進行運營。

So it's a good position to be in now. It was a good position to be in at the end of Q2. And as we move through the year, where we end up. We're assuming a conservative end to channel inventory at the end of Q4. And what's appropriate will really be based on how we see the future market.

所以現在處於一個很好的位置。在第二季度末，這是一個很好的位置。當我們度過這一年時，我們的結局是什麼。我們保守地假設第四季度末將結束渠道庫存。什麼是合適的實際上取決於我們如何看待未來市場。

Okay. And if I could just follow up on that quickly, Jesse. I mean it's -- you just kind of think about all the capacity that the big 3 have added over the last few years. Does the channel need the same amount of inventory as before, given they could probably get it quicker now? Or how should we think about that piece?

好的。如果我能盡快跟進的話，傑西。我的意思是——你只需想想三大巨頭在過去幾年裡增加的所有產能。鑑於他們現在可以更快地獲得庫存，該渠道是否需要與以前相同數量的庫存？或者說我們應該如何看待那件作品？

I think from -- I'm not going to speak to the other folks. As I look at our own business, I think we're in a better position ourselves to carry less inventory ourselves because historically, we have not had enough capacity to always fulfill demand in season. As such, we've had to be heavier on inventory. I think with the capacity adds we've had now that we've already made, it puts a position to be able to manage our own working capital very much more effectively. And it allows us to service our customers more effectively. And I think each customer has their own model relative to how they service their customers and they'll determine what the right inventory level is for them. I think at a minimum, it sets ourselves up to be able to operate with lower working capital.

我想——我不會和其他人說話。當我審視我們自己的業務時，我認為我們自己處於一個更好的位置，可以減少自己的庫存，因為從歷史上看，我們沒有足夠的能力來始終滿足季節性需求。因此，我們不得不增加庫存。我認為，隨著我們現在已經增加的產能，它使我們能夠更有效地管理我們自己的營運資金。它使我們能夠更有效地為客戶提供服務。我認為每個客戶都有自己的與如何為客戶提供服務相關的模型，他們將確定適合他們的庫存水平。我認為至少，它使我們能夠以較低的營運資金進行運營。

And ladies and gentlemen, we have time for one more question this afternoon. We'll take that now from Kurt Yinger at Davidson.

女士們、先生們，今天下午我們還有時間再問一個問題。我們現在將從戴維森公司的庫爾特·英格那裡得到這一點。

I just wanted to go back on the full year guide. It wasn't sort of clear to me what's kind of embedded at this stage because it doesn't sound like you've necessarily come off the original residential volume planning assumptions, and that's some of the conservatism you've referenced. But you also believe you can kind of offset the downside in commercial. So can you just maybe help me square those 2 things.

我只是想回顧一下全年指南。我不清楚現階段嵌入了什麼，因為聽起來您不一定脫離最初的住宅容量規劃假設，這就是您提到的一些保守主義。但你也相信你可以抵消商業方面的不利影響。那麼你能幫我解決這兩件事嗎？

Yes, Kurt, this is Peter. Look, the easiest way to think about it is as we said at the beginning of the year, our original planning assumptions were for kind of sell-through unit volume closer to [10%]. What's embedded in the residential view right now is probably low single digits improvement on that down 10% . So that's the $40 million that we're covering on the commercial side. And as Jesse mentioned, look, we're -- we're looking for more cards in the season. And if the demand environment is a bit better, you're likely to see that upside surface in the fourth quarter results.

是的，庫爾特，這是彼得。看，最簡單的思考方式是，正如我們在年初所說，我們最初的計劃假設是銷量接近 [10%]。目前住宅觀點中所包含的內容可能是比下降 10% 低個位數的改善。這就是我們在商業方面投入的 4000 萬美元。正如傑西提到的，看，我們正在尋找本賽季更多的牌。如果需求環境好一點，您可能會在第四季度的業績中看到積極的一面。

Got it. Makes perfect sense. And then just lastly, in terms of the recycling opportunities, could you maybe just give us a few mile markers to watch for over maybe the next year or so in terms of continuing to increase recycled PVC utilization, maybe some formulation changes on the wood plastic composite side. And are there any big hurdles that you still need to clear to kind of get there?

知道了。很有道理。最後，就回收機會而言，您能否給我們一些里程標記，以便在未來一年左右的時間裡繼續增加回收 PVC 的利用率，也許對木塑料進行一些配方變化複合面。為了實現這一目標，您是否還需要克服任何重大障礙？

Let me start at a high level. Relative to wood plastic as we've talked about, we're shifting our formulation from a mix of half high-density polyethylene to half low-density polyethylene. And we're in process of doing that, we're staging it appropriately. And so our expectations now barring any delays and we've used our extra capacity to get there is -- that's something that would be a positive shift in the portfolio as we move into '24.

讓我從高層次開始。相對於我們所討論的木塑料，我們正在將配方從一半高密度聚乙烯的混合物轉變為一半低密度聚乙烯的混合物。我們正在這樣做，我們正在適當地安排它。因此，我們現在的期望是，除非有任何延誤，而且我們已經利用我們的額外能力來實現這一目標——隨著我們進入 24 年，這將是投資組合的積極轉變。

And then I think as we've highlighted, both on our Exteriors business and on our Deck and Rail business, we see incremental opportunity to increase the percentage of recycled PVC used almost on a quarterly basis. And so for us, that falls into the bucket of incremental improvement, and we would expect that to continue. It's embedded in some of the -- our performance over the last couple of years. And we would expect that to be embedded in the performance as we move into '24.

然後我認為，正如我們所強調的，無論是在我們的外飾業務還是在我們的甲板和鐵路業務上，我們都看到了幾乎每季度增加再生 PVC 使用百分比的增量機會。因此，對我們來說，這屬於漸進式改進的範疇，我們希望這種情況能夠持續下去。它嵌入在我們過去幾年的一些表現中。我們預計，隨著我們進入 24 年，這一點將被嵌入到性能中。

Just one clarifying point. Pete mentioned low single-digit improvement. And I just wanted to make sure that -- as we talk about sell-through that, that comes across clearly where we were assuming close to double-digit negatives on sell-through. And we are seeing modest incremental improvement off the low -- or off the double digits. You should then read, we're now assuming kind of mid- to high single-digit sell-through declines.

只是澄清一點。皮特提到了低個位數的改進。我只是想確保——當我們談論銷售率時，我們假設銷售率接近兩位數的負數，這一點很清楚。我們看到，從低點或兩位數開始，出現了適度的增量改善。然後您應該讀一下，我們現在假設銷量會出現中高個位數的下降。

Thank you. And ladies and gentlemen, that is all the time we have for questions today. Mr. Singh, I'd like to turn things back to you for any closing or concluding remarks.

謝謝。女士們、先生們，這就是我們今天提問的時間了。辛格先生，我想請您發表結束語或結束語。

Thank you all for joining the call this evening. We look forward to having many discussions over the next days and weeks. And thank you again. We'll chat with you soon.

感謝大家參加今晚的電話會議。我們期待在接下來的幾天和幾週內進行多次討論。再次感謝您。我們很快就會和你聊天。

Thank you, Mr. Singh. Ladies and gentlemen, that will conclude The AZEK Company Second Quarter 2023 Earnings Call. Again, I would like to thank you all so much for joining us and wish you all a great remainder of your day. Goodbye.

謝謝你，辛格先生。女士們、先生們，AZEK 公司 2023 年第二季度財報電話會議到此結束。我再次非常感謝大家加入我們，並祝大家度過愉快的一天。再見。