Brady Corp (BRC) 2024 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to Brady Corporation's second-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 Brady Corporation 2024 年第二季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

I would now like to turn the conference over to Ann Thornton, CFO and Treasurer of Brady Corporation. Please go ahead.

現在我想將會議交給 Brady Corporation 財務長兼財務主管 Ann Thornton。請繼續。

Thank you. Good morning, and welcome to the Brady Corporation fiscal 2024 second-quarter earnings conference call. The slides for this morning's call are located on our website at www.bradycorp.com/investors. We will begin our prepared remarks on slide number 3.

謝謝。早安，歡迎參加 Brady Corporation 2024 財年第二季財報電話會議。今天早上電話會議的幻燈片位於我們的網站 www.bradycorp.com/investors 上。我們將從第 3 號幻燈片開始我們準備好的評論。

Please note that during this call, we may make comments about forward-looking information. Words such as expect, will, may, believe, forecast, and anticipate are just a few examples of words identifying forward-looking statements. It's important to note that forward-looking information is subject to various risk factors and uncertainties which could significantly impact expected results. Risk factors were noted in our news release this morning and in Brady's fiscal 2023 Form 10-K, which was filed with the SEC in September.

請注意，在此次電話會議期間，我們可能會對前瞻性資訊發表評論。期望、將、可能、相信、預測和預期等詞語只是識別前瞻性陳述的幾個例子。值得注意的是，前瞻性資訊受到各種風險因素和不確定性的影響，可能會嚴重影響預期結果。我們今天早上的新聞稿和 Brady 於 9 月向 SEC 提交的 2023 財年 10-K 表格中都提到了風險因素。

Also, please note that this teleconference is copyrighted by Brady Corporation and may not be rebroadcast without the consent of Brady. We will be recording this call and broadcasting it on the internet. As such, your participation in the Q&A session will constitute your consent to being recorded.

另請注意，本次電話會議的版權歸 Brady Corporation 所有，未經 Brady 同意不得轉播。我們將錄製這次通話並在網路上廣播。因此，您參與問答環節即表示您同意被記錄。

I'll now turn the call over to Brady's President and Chief Executive Officer, Russell Shaller. Russell?

我現在將把電話轉交給布雷迪總裁兼執行長 Russell Shaller。拉塞爾？

Thanks, Ann, and thank you, all, for joining us today.

謝謝安，謝謝大家今天加入我們。

We released our 2024 second-quarter financial results this morning, and I'm pleased to report another quarter of organic sales growth and improved profit. This quarter, we increased our gross profit margin to 50.2%. We improved our pre-tax earnings by 15.1%, and we grew our non-GAAP earnings per share by 14.8%. These results wouldn't be possible without the hard work and dedication of our entire global team.

我們今天早上發布了 2024 年第二季財務業績，我很高興地報告又一個季度的有機銷售成長和利潤改善。本季度，我們的毛利率提高至 50.2%。我們的稅前收益提高了 15.1%，非 GAAP 每股收益增加了 14.8%。如果沒有我們整個全球團隊的辛勤工作和奉獻精神，這些成果是不可能實現的。

I'm incredibly proud of the effort the team has put in to ensure the success of our regional reorganization, which became effective at this time last year. The progress we've made and the opportunities we've identified continue to excite and motivate me every single day. It has absolutely contributed to our improved earnings and cash flow, and just as importantly, it's creating an environment, where we're encouraging our teams to think differently about what they do every day, which, to me, is the best part.

我對團隊為確保我們的區域重組成功而付出的努力感到無比自豪，該重組於去年此時生效。我們所取得的進步和我們發現的機會每天都繼續讓我興奮和激勵。它絕對為我們改善收入和現金流作出了貢獻，同樣重要的是，它創造了一個環境，​​鼓勵我們的團隊以不同的方式思考他們每天所做的事情，對我來說，這是最好的部分。

Combining our businesses within our regions has brought our teams together, it's cultivating more innovative thoughts, and we're all working together better than ever. This quarter, we once again grew earnings per share, while increasing our investment in both research and development and our sales force.

合併我們區域內的業務使我們的團隊聚集在一起，培養了更多的創新思想，我們比以往任何時候都更好地合作。本季度，我們再次增加了每股收益，同時增加了對研發和銷售團隊的投資。

We increased our R&D spend by nearly 10% in the second quarter, and we added a number of new salespeople throughout our global business. We have some exciting new products set to launch over the next several quarters and a strong future pipeline of innovative new products, which are essential to drive sales growth over the long term.

第二季我們的研發支出增加了近 10%，我們在全球業務中增加了一些新的銷售人員。我們將在未來幾季推出一些令人興奮的新產品，以及未來強大的創新新產品系列，這對於推動長期銷售成長至關重要。

I'll now turn the call over to Ann to provide more details on our financial results. Ann?

我現在將把電話轉給安，以提供有關我們財務業績的更多詳細資訊。安？

Thank you, Russell.

謝謝你，拉塞爾。

We grew organic sales 1.6% this quarter, while once again improving our gross profit margin and our overall profitability. This resulted in GAAP EPS of $0.90 per share, which was up 18.4% compared to the second quarter of last year. Non-GAAP EPS, which is calculated as our GAAP EPS, excluding the after-tax impact of amortization expense, was $0.93 per share this quarter, which was up 14.8% compared to the second quarter of last year.

本季我們的有機銷售額成長了 1.6%，同時再次提高了我們的毛利率和整體獲利能力。這使得 GAAP 每股收益達到 0.90 美元，比去年第二季成長 18.4%。非 GAAP 每股盈餘（以我們的 GAAP 每股盈餘計算，不含攤銷費用的稅後影響）本季為每股 0.93 美元，比去年第二季成長 14.8%。

Our Americas and Asia region grew organic sales 1.2% and increased segment profit by 9.3% compared to last year's second quarter. And our Europe and Australia region grew organic sales 2.5% and increased segment profit by 11.9% compared to last year's second quarter. We're executing extremely well in Europe despite a macro environment with minimal growth.

與去年第二季相比，我們的美洲和亞洲地區有機銷售額成長了 1.2%，部門利潤成長了 9.3%。與去年第二季相比，我們的歐洲和澳洲地區有機銷售額成長了 2.5%，部門利潤成長了 11.9%。儘管宏觀環境成長微乎其微，但我們在歐洲的執行情況非常好。

We continue to integrate our businesses and identify opportunities to grow sales with existing customers, as well as to convert new customers to our high-performance solutions.

我們繼續整合我們的業務，尋找與現有客戶增加銷售的機會，並將新客戶轉化為我們的高效能解決方案。

Our key financial takeaways this quarter are continued organic revenue growth despite slowing against macroeconomic trends, non-GAAP EPS growth of 14.8%, significant improvement in gross profit margin, and a continued commitment to return funds to our shareholders.

我們本季的主要財務要點是，儘管宏觀經濟趨勢放緩，但有機收入持續增長、非公認會計原則每股收益增長 14.8%、毛利率顯著改善，以及繼續致力於向股東返還資金。

Now, we'll turn to slide number 4 for our quarterly sales trends. Organic sales grew 1.6%, and foreign currency translation increased sales 0.8% this quarter, while the impact of divestitures reduced sales by 3.5%, resulting in a total sales decline of 1.1%.

現在，我們將轉向第四張投影片，了解我們的季度銷售趨勢。本季有機銷售額成長 1.6%，外幣換算銷售額成長 0.8%，而資產剝離的影響使銷售額減少 3.5%，導致總銷售額下降 1.1%。

Slide number 5 outlines our quarterly gross margin trending. Our gross profit margin improved by 220 basis points to 50.2%, compared to 48% in the second quarter of last year. This significant improvement in our gross profit margin was the result of several factors, with the primary being favorable product mix.

第 5 張投影片概述了我們的季度毛利率趨勢。我們的毛利率提高了 220 個基點，達到 50.2%，而去年第二季為 48%。我們毛利率的顯著改善是多種因素的結果，其中最主要的是有利的產品組合。

Turning to slide number 6, you'll find our SG&A expense trending. SG&A was $91.3 million this quarter, compared to $92.3 million in the second quarter of last year. As a percent of sales, SG&A was consistent with last year at 28.3%. We're funding additional selling resources while reducing overall SG&A expenses through ongoing efficiency initiatives throughout our global businesses.

翻到第 6 張投影片，您會發現我們的 SG&A 支出趨勢。本季的 SG&A 為 9,130​​ 萬美元，去年第二季為 9,230 萬美元。SG&A 佔銷售額的百分比與去年持平，為 28.3%。我們正在為額外的銷售資源提供資金，同時透過我們全球業務中持續的效率措施來減少整體銷售、管理和行政費用。

Slide number 7 details our investments in research and development. This quarter, we once again increased our investment in R&D from $15.4 million to $16.8 million, which was 5.2% of sales. We're fully committed to our R&D efforts, and we have several innovative new products planned for launch in the second half of this fiscal year.

第 7 號投影片詳細介紹了我們在研發方面的投資。本季度，我們再次將研發投入從1,540萬美元增加到1,680萬美元，佔銷售額的5.2%。我們全力致力於研發工作，並計劃在本財年下半年推出多種創新新產品。

Moving to slide number 8, you'll find our pre-tax earnings, which increased 15.1% on a GAAP basis from $48.5 million to $55.8 million in the second quarter. Excluding amortization from both periods, pre-tax earnings increased 12.4% on a non-GAAP basis from $51.8 million to $58.2 million.

轉到第 8 張投影片，您會發現我們的稅前收益是根據 GAAP 計算，第二季從 4850 萬美元增長到 5580 萬美元，增長了 15.1%。不計兩個時期的攤銷，以非 GAAP 計算，稅前收益從 5,180 萬美元增加到 5,820 萬美元，成長了 12.4%。

Slide number 9 details earnings and EPS. Our trend of increasing earnings on a quarter-over-quarter basis continued this quarter. Our GAAP EPS increased by 18.4%, and excluding the after-tax impact of amortization from both periods, our second-quarter non-GAAP EPS increased 14.8% compared to last year.

第 9 號投影片詳細介紹了收益和每股盈餘。本季我們持續保持獲利環比成長的趨勢。我們的 GAAP 每股盈餘成長了 18.4%，排除兩個時期攤銷的稅後影響，我們第二季的非 GAAP 每股盈餘與去年相比成長了 14.8%。

Turning to slide number 10, you'll find a summary of our cash generation. Operating cash flow increased from $29.4 million in the second quarter of last year to $36.1 million this quarter. Capital expenditures increased this quarter because we purchased one of our facilities that we previously leased, resulting in negative free cash flow due to this one-time purchase. We have been looking forward to closing this transaction because it secures a primary manufacturing location for us for the long term.

翻到第 10 張投影片，您會發現我們現金產生的摘要。營運現金流從去年第二季的 2,940 萬美元增至本季的 3,610 萬美元。本季資本支出增加，因為我們購買了先前租賃的一項設施，導致這筆一次性購買導致自由現金流為負。我們一直期待著完成這項交易，因為它為我們提供了長期的主要生產基地。

On slide number 11, you'll find the impact that our consistently strong cash generation has had on our balance sheet. We're currently in a net cash position of $95.8 million. So even with returning over $19 million to our shareholders in the form of dividends and share buybacks this quarter, the facility purchase, and reducing our debt, we are still in a net cash position. This gives us an incredible amount of flexibility in our capital allocation decisions.

在第 11 號投影片上，您會發現我們持續強勁的現金產生能力對我們的資產負債表產生的影響。我們目前的淨現金部位為 9,580 萬美元。因此，即使本季以股息和股票回購、設施購買和減少債務的形式向股東返還超過 1,900 萬美元，我們仍然處於淨現金狀況。這為我們的資本配置決策提供了令人難以置信的靈活性。

Our approach to capital allocation remains consistent, which is to first use our cash to fully fund organic sales and efficiency opportunities. This includes investing in new product development, sales-generating resources, capability-enhancing capital expenditures, as well as automation-focused CapEx. We will continue to deploy capital to productivity and sales growth opportunities throughout the economic cycle.

我們的資本配置方法保持一致，即首先使用我們的現金為有機銷售和效率機會提供充分資金。這包括投資新產品開發、銷售產生資源、能力增強資本支出以及以自動化為重點的資本支出。我們將繼續在整個經濟週期中將資本配置到生產力和銷售成長機會。

Next, we focus on consistently increasing our dividend. This fiscal year, we announced our 38th consecutive annual increase in our dividends.

接下來，我們專注於持續增加股利。本財年，我們宣布連續 38 年增加股利。

After fully funding our organic investments and our dividend, we then deploy our cash in a disciplined manner for either acquisitions where we have clear synergies or for opportunistic share buybacks when we see a disconnect between our intrinsic value and our trading price.

在為我們的有機投資和股息提供充足資金後，我們會以嚴格的方式部署現金，用於具有明顯協同效應的收購，或者當我們看到我們的內在價值與交易價格之間存在脫節時進行機會性股票回購。

Our incredibly strong balance sheet puts us in a position to execute additional growth opportunities through our R&D investments and sales resources, to acquire companies strategically when the synergies are clear and the price is right, and to return funds to our shareholders through dividends and share buybacks.

我們極其強大的資產負債表使我們能夠透過研發投資和銷售資源實現額外的成長機會，在協同效應明顯且價格合適時策略性收購公司，並透過股息和股票回購將資金返還給股東。

On slide number 12, you'll find our fiscal 2024 guidance. We are increasing the bottom end of our full-year fiscal 2024 EPS guidance range of $3.70 to $3.95 on a GAAP basis and of $3.85 to $4.10 on a non-GAAP basis to our new range of $3.80 to $3.95 on a GAAP basis and $3.95 to $4.10 on a non-GAAP basis. Our outlook is based upon January 31 foreign currency exchange rates, and it assumes continued economic expansion. Macroeconomic conditions do continue to slow in certain end markets and parts of Europe. So we now expect that organic sales growth will be in the low single-digits for the full fiscal year 2024.

在第 12 號投影片上，您將找到我們的 2024 財政年度指南。我們將2024 財年全年EPS 指導範圍的下限（以GAAP 計算的3.70 美元至3.95 美元，以非GAAP 計算的3.85 美元至4.10 美元）提高到新的範圍（按GAAP 計算的3.80 美元至3.95 美元，以GAAP 計算的3.95 美元至3.95 美元）。以非 GAAP 計算為 4.10 美元。我們的展望是基於 1 月 31 日的外幣匯率，並假設經濟持續擴張。某些終端市場和歐洲部分地區的宏觀經濟狀況確實持續放緩。因此，我們現在預計 2024 年整個財年的有機銷售成長將處於低個位數。

The other elements of our guidance remain consistent, with an income tax rate of approximately 22%, depreciation and amortization of approximately $30 million to $32 million, and capital expenditures of approximately $75 million, which is inclusive of approximately $55 million of CapEx for the purchase of the previously leased facility which I mentioned, as well as the buildout of a new facility which will allow us to combine the two leased locations into one owned location.

我們指導的其他要素保持一致，所得稅稅率約為 22%，折舊和攤銷約為 3000 萬至 3200 萬美元，資本支出約為 7500 萬美元，其中包括約 5500 萬美元的購買資本支出我提到的先前租賃的設施，以及新設施的建設，這將使我們能夠將兩個租賃地點合併為一個自有地點。

Potential risks to our guidance, among others, include potential strengthening of the US dollar, inflationary pressures that we're unable to offset in a timely enough manner, or an overall slowdown in economic activity.

我們的指引面臨的潛在風險包括美元可能走強、我們無法及時抵銷的通膨壓力或經濟活動整體放緩。

I'll now turn the call back over to Russell to cover our regional results and to provide some closing thoughts before Q&A. Russell?

現在，我將把電話轉回拉塞爾，介紹我們的地區結果，並在問答之前提供一些結束語。拉塞爾？

Thanks, Ann.

謝謝，安。

Our Americas and Asia regional results are detailed on slide 13. Sales were $211.6 million this quarter, and organic sales growth was 1.2%. The impact of divestitures reduced sales by 5.1% in the region, and the result, including the impact of foreign currency, was a total sales decline of 3.8%. We were able to grow consistently in our major product lines and end markets despite some weakness we're seeing in industrial automation, as well as project delays.

我們的美洲和亞洲區域結果詳見投影片 13。本季銷售額為 2.116 億美元，有機銷售額成長 1.2%。資產剝離的影響使該地區的銷售額減少了 5.1%，加上外匯的影響，總銷售額下降了 3.8%。儘管我們在工業自動化方面看到了一些弱點以及專案延遲，但我們能夠在主要產品線和終端市場上持續成長。

Our core business is performing well. The area where we saw some weakness was in our healthcare identification product line, which declined in the quarter. The impact of lower reimbursement rates for healthcare providers, coupled with a decrease in overall hospital admissions, continues to reduce demand for our identification products in the healthcare segment. We're analyzing our product offering, and we have some new products in development that we're looking forward to launching in the next few quarters to mitigate this trend.

我們的核心業務表現良好。我們看到一些弱點的領域是我們的醫療保健識別產品線，該產品線在本季度有所下降。醫療保健提供者報銷率降低的影響，加上整體住院人數的減少，繼續減少了醫療保健領域對我們的識別產品的需求。我們正在分析我們的產品供應，並且我們正在開發一些新產品，我們期待在未來幾季推出，以緩解這一趨勢。

Outside of healthcare, growth was excellent throughout our remaining key product areas, as our identification and safety solutions did well for the quarter. Our business in Asia turned the corner on growth and recovered nicely in the second quarter, with 5.1% organic sales growth.

除醫療保健之外，我們其餘的關鍵產品領域均實現了出色的成長，因為我們的識別和安全解決方案在本季度表現良好。我們在亞洲的業務在第二季度實現了 5.1% 的有機銷售成長，並實現了良好的成長。

We grew sales throughout the region, with mid-single digit growth in China, along with another incredibly strong quarter in India, where we saw just over 21% sales growth. Our business in India has been a clear growth leader in our Asia business for several years, so we're excited about the future in India.

我們整個地區的銷售額都在成長，其中中國實現了中個位數的成長，而印度的另一個季度也表現強勁，銷售額成長略高於 21%。多年來，我們在印度的業務在亞洲業務中一直處於明顯的成長領先地位，因此我們對印度的未來感到興奮。

Segment profit in Americas and Asia increased 9.3% to $43.9 million, and segment profitability improved from 18.3% of sales to 20.7% of sales this quarter. Our continued improvement in gross profit margin resulted in this significant increase in segment profit.

美洲和亞洲部門利潤成長 9.3%，達到 4,390 萬美元，本季部門獲利能力從銷售額的 18.3% 提高到銷售額的 20.7%。我們毛利率的持續改善導致分部利潤大幅增加。

Slide 14 details the performance of our Europe and Australia region. Sales were $111 million this quarter, organic sales growth was 2.5%, and foreign currency increased sales by 2% for a total growth of 4.5%. Despite slowing economic conditions in Europe, we were still able to grow well above GDP in our key geographies and end markets through our focus on use cases that require a specialized solution, which is absolutely ideal for Brady products.

投影片 14 詳細介紹了我們歐洲和澳洲地區的表現。本季銷售額為 1.11 億美元，有機銷售額成長 2.5%，外幣銷售額成長 2%，總成長 4.5%。儘管歐洲經濟狀況放緩，但透過專注於需要專門解決方案的用例，我們仍然能夠在關鍵地區和終端市場實現遠高於 GDP 的成長，這對於 Brady 產品來說絕對是理想的選擇。

Organic growth in Europe was 2.3%, and organic growth in Australia was 3.7% in the quarter. Our organic sales growth resulted in solid increase in segment profit for the quarter from $13.5 million to $15.1 million. And as a percentage of sales, segment profit increased from 12.7% to 13.6%. Although we're facing cost pressures, we were able to more than offset them through operational efficiencies and targeted price increases.

本季歐洲有機成長率為 2.3%，澳洲有機成長率為 3.7%。我們的有機銷售成長導致該季度的部門利潤從 1,350 萬美元穩步增長至 1,510 萬美元。分部利潤佔銷售額的百分比從 12.7% 增至 13.6%。儘管我們面臨成本壓力，但我們能夠透過提高營運效率和有針對性的價格上漲來抵消這些壓力。

We continue to integrate our businesses in Europe, in particular, and the opportunities to grow sales with current customers, as well as provide solutions for new customers, continue to be identified by our team. I'm really proud of the progress we've made. Our execution in Europe and Australia has been incredibly strong. We had another great quarter and first half of the year, and I'm definitely looking forward to finishing the second half of the year on a high note as well.

我們繼續整合我們在歐洲的業務，特別是我們的團隊繼續尋找與現有客戶增加銷售額以及為新客戶提供解決方案的機會。我對我們所取得的進步感到非常自豪。我們在歐洲和澳洲的執行力非常強大。我們又度過了一個美好的季度和上半年，我也絕對期待以高調結束今年下半年。

With that, we'd like to start the Q&A. Operator, would you please provide instructions to our listeners?

至此，我們開始問答。接線員，請您向我們的聽眾指示好嗎？

(Operator Instructions) Steve Ferazani, Sidoti.

（操作員說明）Steve Ferazani，Sidoti。

Thanks. Good morning, Russell, and thanks for the detail on the call. I wanted to start by asking about the guidance because I know when you issued it, you expected the high end of EPS was achievable if you hit the high end of your sales guidance. So we've seen you now go to the lower end, but you're raising the low end of guidance and not moving the high end. So I guess what I'm trying to -- how to square the two, what else is going right to enable you to move the guidance to the higher end, as sales clearly are not growing at the same pace?

謝謝。早上好，拉塞爾，感謝您在電話中提供的詳細資訊。我想先詢問指導意見，因為我知道當您發布指導意見時，您預計如果達到銷售指導意見的上限，則可以實現每股收益的上限。因此，我們看到您現在走向了較低端，但您正在提高指導的低端，而不是移動高端。因此，我想我正在嘗試做的事情 - 如何使兩者相一致，還有什麼是正確的，可以使您將指導推向更高的水平，因為銷售顯然沒有以相同的速度增長？

Yeah. So there's a couple of things going on. The areas that are a little bit weaker in terms of sales growth, fortunately, are our least profitable businesses, and the ones that continue to be growing quite nicely and actually are at plan or above plan are more profitable businesses.

是的。所以有一些事情正在發生。幸運的是，銷售成長稍弱的領域是我們利潤最低的業務，而那些持續良好成長且實際達到或高於計畫的領域是利潤較高的業務。

So the consequence of which, you're seeing some of that in the improvement in our gross margin, is that we feel comfortable with the range and the adjustment that we've made. Again, all things being equal, if we look at how we performed in the first two quarters and then project that into the next two, that has a lot to do with why we feel we could nudge it even though the top line wasn't quite there.

因此，您可以看到我們毛利率的一些改善，即我們對我們所做的範圍和調整感到滿意。同樣，在所有條件相同的情況下，如果我們看看我們在前兩個季度的表現，然後將其投射到接下來的兩個季度，這與為什麼我們認為我們可以推動它有很大關係，即使頂線不是就在那裡。

So it's a geographic and products mix is what you're saying or other costs you're taking out?

所以這是一個地理和產品組合，還是你要扣除的其他成本？

Like any good manufacturer, there's always slight areas that we can improve operational efficiency, and we continue to do so. But an awful lot of it has to do with the mix and the fact that our higher-margin businesses are outperforming our lower-margin business.

就像任何優秀的製造商一樣，我們總是有一些地方可以提高營運效率，我們將繼續這樣做。但這在很大程度上與組合有關，而且與我們的高利潤業務表現優於低利潤業務有關。

Okay. On the sales number this quarter, the 5% impact on that regional on divestiture, the only one I recall is premises, which was last March, and was not having that big of an impact. Can you give a little -- touch a little bit on that line?

好的。就本季的銷售數據而言，剝離對該地區的 5% 影響，我記得的唯一一個是房產，那是去年 3 月的事，影響並不大。你能在這條線上稍微觸摸一下嗎？

Yeah. So we also divested another small business which really wasn't a good fit with our portfolio. It's called Personnel Concepts; again, not a significant growth vector for us and, as I said, when I took over as CEO almost two years ago, is that we're going to look at our portfolio and decide what businesses really fit with us on an ongoing future basis. And on that -- both the Access Control and the Personnel Concepts just didn't really fit our business, and we thought there were better ways for our portfolio to move forward.

是的。因此，我們也剝離了另一家與我們的投資組合不太相符的小企業。這就是所謂的「人員概念」；再說一次，這對我們來說不是一個重要的成長向量，正如我在大約兩年前接任執行長時所說的那樣，我們將審視我們的投資組合，並在未來持續的基礎上決定哪些業務真正適合我們。在這一點上，存取控制和人員概念都不太適合我們的業務，我們認為有更好的方法來推動我們的產品組合向前發展。

And that acquisition did close last quarter, Steve, the second one -- the one that was just mentioned. But the total impact to the financials was immaterial. But we are -- we call out our organic sales growth and then the impact of divestitures now, so that's where you're seeing it this quarter.

那次收購確實在上個季度完成了，史蒂夫，第二次收購——就是剛才提到的收購。但對財務的整體影響並不重大。但我們 - 我們強調了我們的有機銷售成長，然後是現在資產剝離的影響，所以這就是您本季度看到的情況。

Okay. How much is taking out these lower-performing businesses contributing to margin? Because I don't recall you ever doing above 50% gross margin in the seasonally slower Q2 before, and that was a very strong number.

好的。剔除這些業績不佳的業務對利潤率的貢獻有多大？因為我不記得你們之前在季節性放緩的第二季度毛利率曾經達到 50% 以上，而這是一個非常強勁的數字。

Yeah. So ironically, the business we divested, Personnel Concepts, was a high gross margin. It was also a high-sales overhead business. So the net profit wasn't a big deal.

是的。諷刺的是，我們剝離的業務——人事概念——的毛利率很高。這也是一項高銷售額管理費用的業務。所以淨利並不是什麼大問題。

Yeah. I think as I've kind of spoke to in prior calls, that 50% gross margin, we feel, is a good place for us with our product mix as it stands right now. And I think that is a reasonable target, given your current inflationary conditions and our cost structure. So I'm looking to see more of that in the future.

是的。我認為，正如我在之前的電話中談到的那樣，我們認為 50% 的毛利率對於我們目前的產品組合來說是一個很好的目標。考慮到當前的通膨狀況和我們的成本結構，我認為這是一個合理的目標。所以我希望在未來看到更多這樣的事。

And if I go -- just one more in terms of obviously a full-year strong cash flow number, you're in great shape moving forward. What's the pipeline looking like? How developed is it at this point? Where are you on M&A?

如果我去的話——就全年強勁的現金流量而言，再多一個，你就處於良好的前進狀態。管道是什麼樣的？目前發展到什麼程度呢？您在併購方面處於什麼位置？

On M&A? Okay. So yeah, we have a clear idea of what we're looking for in terms of M&A. There aren't a tremendous number of properties. I think, again, as I've said before, if anybody is surprised at something we buy, then we've made a mistake. These have to be clear, either direct or adjacent, businesses that are additives to our overall strategy. So anything that we do or make in this space will be in the identification of products, people, and things, which is really the core of our business.

關於併購？好的。所以，是的，我們清楚地知道我們在併購方面尋求什麼。沒有大量的財產。我想，正如我之前所說，如果有人對我們購買的東西感到驚訝，那麼我們就犯了一個錯誤。這些業務必須是明確的，無論是直接的還是相鄰的，都是我們整體策略的補充。因此，我們在這個領域所做的任何事情都將是對產品、人和事物的識別，這確實是我們業務的核心。

So not a tremendous number of properties. I will say that the valuations are getting to a point where we feel much more comfortable than we did even a year ago. So we've always said, with Brady, we want to be good stewards of our cash. And it's -- sometimes, the best use of our cash is to buy back our own shares, and sometimes, the best is to look to an acquisition.

所以沒有大量的財產。我想說的是，估值已經達到了一個讓我們感覺比一年前舒服得多的程度。因此，我們一直對布雷迪說，我們希望成為我們現金的好管家。有時，我們現金的最佳用途是回購我們自己的股票，有時，最好的用途是尋求收購。

Okay. Thanks, Russell. Thanks, Ann.

好的。謝謝，拉塞爾。謝謝，安。

Keith Housum, Northcoast Research.

Keith Housum，北海岸研究中心。

Good morning, guys. Hey, Russell, as we look at the Americas growth, obviously, this is the one that's probably the weight around your neck, how much of that growth or the performance was impacted by PDC this quarter? I know, as you guys said, it declined. But can you give us a little bit of context of the size of that decline?

早上好傢伙。嘿，Russell，當我們觀察美洲的成長時，顯然，這可能是您最頭痛的問題，本季的成長或業績有多少受到 PDC 的影響？我知道，正如你們所說，它下降了。但您能給我們一些有關下降幅度的背景資訊嗎？

Yeah. I’m going to say, everything that the identification group did well, the PDC kind of took away from, which is unfortunate, particularly given the size of PDC compared to the rest of that business. I do think that some of the things that happens were a combination of cyclical and some stocking trends we see with some of our distributors. I don't foresee that level of headwinds in the next couple of quarters.

是的。我想說的是，識別小組做得很好的一切，PDC 都被剝奪了，這是不幸的，特別是考慮到 PDC 與其他業務相比的規模。我確實認為發生的一些事情是週期性和我們在一些分銷商身上看到的一些庫存趨勢的結合。我預計未來幾季不會出現這種程度的阻力。

I think more importantly, because we get the question about business, like why do you have it, I think we have a good idea of where we can take the business in the next couple of years. It's still very much a work in progress. It has been not a great performer at Brady for several years. But I think with our integrated business of merging the America business together, it gives them some additional strength and we're relooking at both their product portfolio and some of their go-to-market strategies where they can take -- where they can benefit from a larger organization.

我認為更重要的是，因為我們收到了有關業務的問題，例如你為什麼擁有它，我認為我們很清楚未來幾年可以將業務帶到哪裡。這仍然是一項正在進行的工作。多年來，它在布雷迪的表現一直不佳。但我認為，透過我們將美國業務合併在一起的綜合業務，這給了他們一些額外的優勢，我們正在重新審視他們的產品組合和他們可以採取的一些進入市場策略——他們可以從中受益來自更大的組織。

Sure. I appreciate that. Remind me in terms of your end markets, how much of your sales are driven by OpEx spending, some more of a consumable, versus capital expenditure driven?

當然。我很感激。請提醒我，就您的終端市場而言，您的銷售額有多少是由營運支出（更多是消耗品）驅動的，而不是由資本支出驅動的？

Yeah. We probably don't break that down into that kind of resolution. But --

是的。我們可能不會將其分解為這樣的決議。但--

I asked that question regarding CapEx or OpEx-driven sales. Russell just started to answer the question, and it went out.

我問了有關資本支出或營運支出驅動的銷售的問題。拉塞爾剛開始回答問題，問題就消失了。

Yeah, I apologize for that. I guess there's a national cell phone problem right now. And I gave a great answer, but I'll repeat that out.

是的，我為此道歉。我猜現在全國的手機都出了問題。我給了一個很好的答案，但我會重複一遍。

So if you look at Brady's businesses, we have really three different, I'll call it, consumables or fixed hardware. And I think it's probably a better way of thinking about or looking at our business. A significant portion of our company is in the MRO space, where we do safety and facility ID locks, what have you. And those products, I'll call them semi-consumable because they're not intended to last forever. They might have -- they might last a couple of years. They might last less than that. And so that gets a regular refresh rate with our customers because most of our customers will continue to buy from us as they redo their facilities and what have you.

因此，如果你看看布雷迪的業務，我們實際上有三種不同的，我稱之為消耗品或固定硬體。我認為這可能是思考或審視我們業務的更好方式。我們公司的很大一部分是在 MRO 領域，我們在那裡做安全和設施 ID 鎖，等等。這些產品，我將它們稱為半消耗品，因為它們並不打算永遠持續下去。它們可能會持續幾年。它們的壽命可能不會那麼長。因此，我們的客戶會定期更新，因為我們的大多數客戶在重做他們的設施和您擁有的東西時將繼續從我們這裡購買。

Then you get to our printer consumables, which makes up the next significant part of the business. And of course, those get used on a regular basis. They're essentially the razor blade that goes with our razor, which is the last part, our printer and printer sales. And the printers tend to last, depending on the use case, something between three and seven years for the refresh.

然後是我們的印表機耗材，它構成了業務的下一個重要部分。當然，這些會定期使用。它們本質上是與我們的剃須刀配套的剃須刀刀片，這是最後一部分，我們的印表機和印表機銷售。根據使用情況，印表機通常可以使用三到七年進行更新。

So while our products are durable, none of them are really intended, nor do they last forever. So there's -- again, depending on the category, you get a pretty regular refresh rate in our business. And so that's how we look at it. Hopefully, that answers your questions kind of healthy.

因此，雖然我們的產品很耐用，但它們都不是真正的設計目的，也不是永遠耐用的。因此，再次強調，根據類別，您在我們的業務中會獲得相當規律的刷新率。這就是我們的看法。希望這能健康地回答你的問題。

Yeah, it does. It helps to frame it up. I appreciate that. I guess final question for me. It's been several years now. We've been hearing the excitement around R&D, and it always feels like the growth coming at the next step is the next step. I guess, help translate that excitement to the numbers that we're seeing. Do we see that we're close to acceleration of growth? I mean, what gives you the confidence that the R&D is producing what you need to do or will do it?

是的，確實如此。它有助於將其框架化。我很感激。我想我的最後一個問題。到現在已經好幾年了。我們一直聽到圍繞著研發的興奮，總覺得下一步的成長就是下一步。我想，請幫助將這種興奮轉化為我們所看到的數字。我們是否看到我們已接近加速成長？我的意思是，是什麼讓您有信心研發正在生產您需要做或將會做的事情？

Yeah. So there's probably two things that I want to say about the R&D. The first is, we are in a long journey for us. When we devote money to R&D, it takes roughly three years to develop a new printer, a little bit less if we're refreshing. And so we have a number of new product launches in the next few quarters. I'm super excited about them, but it does take time.

是的。關於研發，我可能想說兩件事。首先，我們正處於一個漫長的旅程中。當我們投入資金進行研發時，開發一台新印表機大約需要三年時間，如果我們更新的話，時間會少一點。因此，我們將在接下來的幾季推出許多新產品。我對它們感到非常興奮，但這確實需要時間。

And like a lot of industrial products, which you're also seeing, is they're slower adoption. It's not like an iPhone, where the new generation of iPhone pops out and everybody runs to the store and buys them. These have a very regular cycle. We typically see, and again, depending on the product category, peak revenue of something between four to five years after product is launched. So much different cycle than you'd see in a consumer product.

就像您也看到的許多工業產品一樣，它們的採用速度較慢。它不像iPhone，新一代iPhone一出現，大家就跑到商店去買。這些都有一個非常規律的周期。我們通常會再次看到，根據產品類別，產品推出後四到五年內會出現收入高峰。與您在消費產品中看到的周期有很大不同。

At the same point, I think our R&D has absolutely had an effect and our new products that had an effect in terms of our ability to price, our ability to not be commoditized, and our ability to maintain our gross margins and return on capital. So you are seeing those things come to play because, at the same time, in some of our more commoditized products or even the ones we divested, are just not part of the story anymore.

同時，我認為我們的研發絕對產生了影響，我們的新產品對我們的定價能力、我們不被商品化的能力以及我們維持毛利率和資本回報率的能力產生了影響。所以你看到這些事情開始發揮作用，因為同時，在我們的一些更商品化的產品甚至我們剝離的產品中，它們不再是故事的一部分。

So will you see explosive growth from any of our product introductions? No, that's not really the way Brady works. But we are absolutely looking for them to nudge the needle on our overall growth and profitability, which I think you're already seeing.

那麼您會看到我們推出的任何產品爆炸性成長嗎？不，這並不是布雷迪的工作方式。但我們絕對希望他們能夠推動我們的整體成長和獲利能力，我想你們已經看到了。

Okay. All right. Thanks, Russell. Appreciate it.

好的。好的。謝謝，拉塞爾。欣賞它。

[Keshen Keller], Bank of America.

[Keshen Keller]，美國銀行。

Hi, guys. Good morning. Thanks for taking my questions. I just wanted to get back to the organic growth guidance for the year. So for the back half year, can we kind of expect continued low single-digit growth on that end? And I guess, what gives you confidence in your revised guidance, particularly as your comps on organic growth get a little bit tougher in the back half of the year here?

嗨，大家好。早安.感謝您回答我的問題。我只是想回到今年的有機成長指導。那麼，對於下半年，我們是否可以預期持續的低個位數成長？我想，是什麼讓您對修訂後的指導充滿信心，特別是在今年下半年有機成長的比較變得更加艱難的情況下？

Yeah. Obviously, we don't have a magic crystal ball, but we work closely with our customers, and we have literally thousands of touch points with through our distributors and our direct sales. I think the past few quarters of the economy has been interesting, with a lot of people originally predicting a recession which doesn't seem to have happened in a lot of our regions and countries. But at the same time, I think there's some murky investments and demands, and then of course, you have the US election, which also might give some people pause.

是的。顯然，我們沒有神奇的水晶球，但我們與客戶密切合作，並且透過我們的分銷商和直銷，我們實際上擁有數千個接觸點。我認為過去幾季的經濟狀況很有趣，很多人最初預測經濟衰退，但我們許多地區和國家似乎並沒有發生經濟衰退。但同時，我認為存在一些模糊的投資和需求，當然，還有美國大選，這也可能會讓一些人猶豫不決。

But when we put all of this together, I look at what has happened in the industrial space and some of the other companies which are reporting significant declines in year-over-year sales, something that we are not seeing. In fact, again, because of the breadth of our offering, we're seeing, I think, a much stronger comparison than a lot of the other companies that are similar.

但當我們把所有這些放在一起時，我會看看工業領域和其他一些公司所發生的情況，這些公司的銷售額同比大幅下降，這是我們沒有看到的。事實上，由於我們產品的廣泛性，我認為我們看到的比較比許多其他類似的公司要強得多。

I don't think anybody's quite like Brady but are in similar products and similar product categories. So you take all these factors into account, we felt comfortable with our guidance, and so we're barring something new. I think we're going to be good for the second half.

我認為沒有人與布雷迪相似，但他們的產品和產品類別相似。因此，考慮到所有這些因素，我們對我們的指導感到滿意，因此我們禁止一些新的東西。我認為我們下半場會表現出色。

Okay, makes sense. And just trying to peel back a little bit more, I guess, now that we're almost two months into the quarter here. Are you able to comment at all just what you're seeing quarter to date in terms of demand across your end markets or regions?

好吧，有道理。我想，現在我們已經進入本季近兩個月了，我只是想再剝離一點。您能否對本季迄今為止您的終端市場或地區的需求情況發表評論？

Yeah. So I would say December, for us, was weak. And we are not 100% certain if it wasn't some distributor rebalancing and what have you, but January, for us, ended very well. And so if January is predicted, the two months together, well, I would say we're just okay. But if January is predictive of the future, we feel very, very good.

是的。所以我想說，12 月對我們來說是疲軟的。我們不能 100% 確定這是否是經銷商的重新平衡以及其他原因，但一月對我們來說結束得很好。因此，如果預計一月，這兩個月在一起，那麼，我會說我們還不錯。但如果一月預示著未來，我們感覺非常非常好。

Okay, makes sense. And in terms of just adding sales-generating resources, is there any anything else you're doing to that end besides just adding additional headcount across your regions?

好吧，有道理。就增加銷售產生資源而言，除了在整個地區增加額外的員工人數之外，您還為此做了什麼其他事情嗎？

Yeah. So I'm going to take out some of my closing comments. We are actually, and I think like everybody else, looking at new sales tools, how to automate our sales tool. We certainly have some experiments with generative AI, which is both fascinating, interesting, and occasionally confusing, depending on the answer that it comes up.

是的。因此，我將刪除一些結束語。實際上，我認為和其他人一樣，我們正在尋找新的銷售工具，以及如何自動化我們的銷售工具。我們當然有一些關於生成人工智慧的實驗，這既令人著迷，又有趣，但有時也會令人困惑，這取決於它得出的答案。

But I can see absolutely, in terms of investment for Brady, that sales augmentation tool. Because whenever you have a portfolio of thousands of different SKUs, one of the most important things we can do and help our customers is getting them to the right SKU quickly in a knowledgeable way. And I see the large language models and what have you as having a great opportunity to improve our interaction with our customers.

但就布雷迪的投資而言，我絕對可以看到這種銷售增強工具。因為每當您擁有數千個不同 SKU 的產品組合時，我們可以做並幫助客戶的最重要的事情之一就是以專業的方式讓他們快速找到正確的 SKU。我看到大型語言模型以及您擁有的絕佳機會來改善我們與客戶的互動。

Got it. And just last one for me, are you able to provide any just update on the industrial track and trace and what, I guess, are the next mile markers or targets that we can be looking for over the next couple of quarters here?

知道了。對我來說，最後一個問題是，您能否提供有關工業追蹤和追蹤的任何最新信息，我想，我們在接下來的幾個季度中可以尋找的下一英里標記或目標是什麼？

Yeah. I'm sure it hasn't been lost on you. A couple of the big companies in the space had a pretty bad quarter last quarter in the year-over-year comps. We're definitely seeing some slowdown and some push out of projects for us because it's a much smaller percentage of our revenue. It wasn't a tremendous headwind. And it actually, I think, is good for us because we have some product launches coming up in the next few quarters.

是的。我確信你還沒有迷失它。該領域的幾家大公司上個季度的年比業績相當糟糕。我們肯定會看到一些放緩和一些項目的退出，因為它占我們收入的比例要小得多。這並不是一個巨大的逆風。我認為實際上這對我們有好處，因為我們將在接下來的幾季推出一些產品。

I do believe that the long-term trend of the industrial automation is fantastic, particularly with labor rates and labor availability. But right now, if there's a little bit of pause and adoption with some of the end users, that actually works to our advantage as we get the rest of our portfolio shored up.

我確實相信工業自動化的長期趨勢是非常棒的，特別是在勞動力價格和勞動力可用性方面。但現在，如果一些最終用戶有一點暫停和採用，這實際上對我們有利，因為我們的投資組合的其餘部分得到了支撐。

Okay. Thank you.

好的。謝謝。

Thank you. And I'm showing no further questions in the queue at this time. I will now turn the call back over to Mr. Russell Shaller for closing remarks.

謝謝。目前我在隊列中沒有顯示任何其他問題。現在，我將把電話轉回拉塞爾·沙勒先生，讓其致閉幕詞。

Thanks, everyone, and thanks for your time today. Again, we apologize about the brief interruption that we had.

謝謝大家，也謝謝你們今天抽出時間。我們再次對短暫的中斷表示歉意。

But I do want to end with saying that our first half of 2024 was strong. We're executing our initiatives. I am incredibly pleased with the results of our regional reorganization that we put into place last year. We've made progress -- we've actually made more progress than I would have hoped on bringing the teams together, and we continue to identify opportunities to improve every single day.

但我最後想說的是，我們 2024 年上半年表現強勁。我們正在執行我們的措施。我對我們去年實施的區域重組的結果感到非常滿意。我們已經取得了進步——實際上，我們取得的進步比我希望將團隊聚集在一起所取得的進步還要多，而且我們每天都在繼續尋找改進的機會。

Our financial position is also incredibly strong, and our balance sheet provides us with flexibility to continue to invest in our existing businesses through R&D and sales resources, to remain committed to our dividend, and to execute opportunistic share buybacks, as well as M&A. Our cash generation gives us the ability to fund all of our capital allocations priority simultaneously, which is exactly what we'll do in order to generate shareholder value over the long term.

我們的財務狀況也非常強勁，我們的資產負債表為我們提供了靈活性，可以透過研發和銷售資源繼續投資現有業務，繼續致力於派息，並執行機會性股票回購以及併購。我們的現金產生使我們能夠同時為所有資本分配優先事項提供資金，而這正是我們為了長期創造股東價值而要做的事情。

I've been consistently impressed with Brady's ability to adapt to ever-changing macroeconomic environments and technologies. And as I commented during the questions, certainly, generative AI will impact Brady, our customers, and the types of solutions that we offer in the future. I'm personally excited with several of our trial efforts, which I believe will enable Brady to better serve our customers in the future.

布雷迪適應不斷變化的宏觀經濟環境和技術的能力一直給我留下了深刻的印象。正如我在提問中所評論的那樣，生成式人工智慧肯定會影響 Brady、我們的客戶以及我們未來提供的解決方案類型。我個人對我們的幾項試驗工作感到興奮，我相信這將使 Brady 將來能夠更好地為我們的客戶服務。

Our priorities remain consistent, which are: to continue to invest and grow our organic sales; to further develop our product offering and ensure we have innovative roadmap of new products in our pipeline; to execute operational efficiencies; to increase profitability; and to effectively deploy our capital to drive long-term shareholder value through organic investments, acquisitions, and returning funds to our shareholders through dividends and share buybacks.

我們的優先事項保持一致，即：繼續投資並增加我們的有機銷售；進一步開發我們的產品，並確保我們的管道中有新產品的創新路線圖；提高營運效率；提高盈利能力；有效部署我們的資本，透過有機投資、收購以及透過股利和股票回購向股東返還資金來推動長期股東價值。

The macroeconomics can present challenges, but I know that we have the right team in place to meet these challenges and deliver for our shareholders. Thank you for your time this morning and for your interest in Brady.

宏觀經濟可能會帶來挑戰，但我知道我們擁有合適的團隊來應對這些挑戰並為我們的股東帶來回報。感謝您今天早上抽出時間以及對布雷迪的興趣。

Operator, you may disconnect the call.

接線員，您可以掛斷電話了。

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.

女士們、先生們，今天的會議到此結束。感謝您的參與。您現在可以斷開連線。