Core & Main Inc (CNM) 2022 Q4 法說會逐字稿

Welcome to the Core & Main Fourth Quarter 2022 Earnings Call. My name is Harry, and I'll be coordinating your call today. (Operator Instructions) And I would now like to hand over to Robyn Bradbury to begin the presentation.

歡迎來到 2022 年第四季度核心與主要收益電話會議。我叫哈利，今天我會協調你的來電。 （操作員說明）現在我想請 Robyn Bradbury 開始演示。

Thank you. Good morning, everyone. This is Robyn Bradbury, Vice President of Finance and Investor Relations for Core & Main. Core & Main is a leader in advancing reliable infrastructure with local service nationwide. We are thrilled to have you join us this morning for our fourth quarter earnings call. I am joined today by Steve LeClair, our Chief Executive Officer; and Mark Witkowski, our Chief Financial Officer. Steve will lead today's call with a review of our fiscal 2022 execution highlights, followed by a discussion on our growth strategy. Mark will then discuss our financial results and fiscal 2023 outlook, followed by a Q&A. We will conclude the call with Steve's closing remarks.

謝謝。大家，早安。我是 Core & Main 的財務和投資者關係副總裁 Robyn Bradbury。 Core & Main 是在全國范圍內通過本地服務推進可靠基礎設施的領導者。我們很高興您今天早上加入我們的第四季度財報電話會議。今天，我們的首席執行官史蒂夫·勒克萊爾 (Steve LeClair) 加入了我的行列；和我們的首席財務官 Mark Witkowski。史蒂夫將主持今天的電話會議，回顧我們 2022 財年的執行要點，然後討論我們的增長戰略。然後，馬克將討論我們的財務業績和 2023 財年展望，然後進行問答。我們將以史蒂夫的結束語結束電話會議。

We issued our fourth quarter and full year earnings press release this morning and posted a presentation to the Investor Relations section of our website. As a reminder, our press release, presentation and the statements made during this call include forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include the factors set forth in our earnings press release and in our filings with the Securities and Exchange Commission.

我們今天上午發布了第四季度和全年收益新聞稿，並在我們網站的投資者關係部分發布了一份演示文稿。提醒一下，我們的新聞稿、演示文稿和本次電話會議期間發表的聲明包括前瞻性聲明。這些陳述受風險和不確定因素的影響，可能導致實際結果與我們的預期和預測存在重大差異。此類風險和不確定性包括我們的收益新聞稿和我們向美國證券交易委員會提交的文件中規定的因素。

Additionally, we will discuss certain non-GAAP financial measures, which we believe are useful to assess the operating results of our business. A reconciliation of these measures can be found in our earnings press release and in the appendix of our Investor Presentation.

此外，我們將討論某些非 GAAP 財務指標，我們認為這些指標有助於評估我們業務的經營業績。這些措施的協調可以在我們的收益新聞稿和我們的投資者介紹的附錄中找到。

Thank you for your interest in Core & Main. I will now turn the call over to Chief Executive Officer, Steve LeClair.

感謝您對 Core & Main 的關注。我現在將把電話轉給首席執行官史蒂夫勒克萊爾。

Thanks, Robyn. Good morning, everyone. Thank you for joining us today. We're excited to share our results with you.

謝謝，羅賓。大家，早安。感謝您今天加入我們。我們很高興與您分享我們的成果。

Starting on Page 5 of the presentation, fiscal 2022 was an impressive year for Core & Main. We achieved a record $6.7 billion of net sales, which was 33% higher than last year and 83% higher than fiscal 2020. Our ability to grow the business over the last several years is a testament to the investments we've made, our ability to execute with agility and our associates' relentless focus on our customers. Our teams executed at a high level to deliver these results, while improving our operating capabilities and solidifying our platform for growth.

從演示文稿的第 5 頁開始，2022 財年對 Core & Main 來說是令人印象深刻的一年。我們實現了創紀錄的 67 億美元淨銷售額，比去年增長 33%，比 2020 財年增長 83%。我們在過去幾年發展業務的能力證明了我們所做的投資、我們的能力敏捷執行，我們的員工不懈地關注我們的客戶。我們的團隊以高水平執行以交付這些成果，同時提高了我們的運營能力並鞏固了我們的增長平台。

We made tremendous progress on our organic growth strategy and margin initiatives in fiscal 2022. Our product and customer initiatives produced solid results throughout the year. We've continued to accelerate the adoption of new products in our industry, like fusible HDPE solutions to our Water Works customers, fabrication and kitting assemblies for fire protection contractors and advanced stormwater management and erosion control systems. We've also increased our share with strategic accounts, who typically lead large projects that require greater technical expertise and specialized procurement needs. The combination of these products and customer initiatives delivered consistent above-market growth and share gains during the year.

我們在 2022 財年的有機增長戰略和利潤計劃方面取得了巨大進展。我們的產品和客戶計劃在全年取得了可觀的成果。我們繼續加速在我們的行業中採用新產品，例如為我們的自來水廠客戶提供的可熔 HDPE 解決方案、為消防承包商提供的製造和配套組件以及先進的雨水管理和侵蝕控制系統。我們還增加了與戰略客戶的份額，他們通常領導需要更多技術專長和專業採購需求的大型項目。這些產品和客戶計劃的結合在這一年中實現了持續高於市場的增長和份額增長。

We are an industry leader, yet we estimate we have only 17% share of a very fragmented $40 billion addressable market. Accordingly, our future growth opportunity remains significant, and we have identified several priority markets where we believe we are underpenetrated. We have been successful at expanding in various markets by having the ability to pursue greenfield expansion or M&A opportunities.

我們是行業領導者，但我們估計在價值 400 億美元的非常分散的潛在市場中，我們僅佔 17% 的份額。因此，我們未來的增長機會仍然很大，我們已經確定了幾個我們認為滲透不足的優先市場。我們有能力尋求綠地擴張或併購機會，從而成功地在各個市場擴張。

We opened 3 new locations in underserved markets in fiscal 2022, growing our footprint to approximately 320 branches across the United States and building on our commitment to make our products and expertise more accessible nationwide. Over the last 5 years, we've opened 15 new locations, all of which continue to mature and offer additional growth opportunities. We have the ability to efficiently open new branches in attractive markets due to our size and scale, talent pool and advanced training program.

2022 財年，我們在服務欠缺的市場開設了 3 個新地點，將我們的足跡擴大到全美約 320 家分支機構，並履行我們的承諾，讓我們的產品和專業知識在全國范圍內更容易獲得。在過去的 5 年裡，我們開設了 15 個新地點，所有這些地點都在不斷成熟並提供額外的增長機會。由於我們的規模和規模、人才庫和高級培訓計劃，我們有能力在有吸引力的市場中有效地開設新的分支機構。

In addition to our organic growth, we also welcomed 8 new companies to Core & Main during and subsequent to the year with approximately $175 million of historical annualized net sales. These businesses have talented teams; strong customer relationships; and in certain cases, they brought us new capabilities or provided opportunities for growth in adjacent markets. With a strong balance sheet and experienced integration team and the reputation of the acquirer of choice in our industry, we remain well positioned to grow sustainably through acquisitions.

除了我們的有機增長外，我們還在這一年和之後迎來了 8 家新公司加入 Core & Main，歷史年淨銷售額約為 1.75 億美元。這些企業擁有才華橫溢的團隊；強大的客戶關係；在某些情況下，它們為我們帶來了新的能力或為鄰近市場的增長提供了機會。憑藉強大的資產負債表和經驗豐富的整合團隊以及我們行業首選收購方的聲譽，我們仍然處於有利地位，可以通過收購實現可持續發展。

We have deployed over $800 million of capital through M&A since 2016 to enhance our geographic footprint, bolster our product lines, enter adjacent markets and acquire key talent. While these businesses are highly integrated into our business model, we estimate that this group of acquisitions generated over $1 billion of sales in 2022 and over $200 million of adjusted EBITDA. This is a testament to the significant value we gain from M&A, and it reflects tremendous synergy improvement.

自 2016 年以來，我們已通過併購部署了超過 8 億美元的資金，以擴大我們的地理足跡、加強我們的產品線、進入鄰近市場並獲得關鍵人才。雖然這些業務高度整合到我們的業務模型中，但我們估計這組收購在 2022 年產生了超過 10 億美元的銷售額和超過 2 億美元的調整後 EBITDA。這證明了我們從併購中獲得的巨大價值，也反映了協同效應的巨大提升。

We generate synergistic value from the business we acquired through our favorable purchasing advantages, fixed cost leverage, facility optimization, preferred and often restrictive access to products, regional and national sales initiative resources and a scalable IT platform. We have completed several acquisitions where we extended our product lines into their offerings, thereby expanding our overall sales opportunity. We've also acquired businesses that provided access to new products and technologies. And we were able to pull those products through to our nationwide branch network. Over the past several years, these synergies have been a key driver of our growth and profitability.

我們通過有利的採購優勢、固定成本槓桿、設施優化、首選且通常受限的產品訪問、區域和國家銷售計劃資源以及可擴展的 IT 平台，從我們收購的業務中產生協同價值。我們已經完成了幾項收購，將我們的產品線擴展到他們的產品中，從而擴大了我們的整體銷售機會。我們還收購了提供新產品和新技術訪問權限的企業。我們能夠將這些產品引入我們遍布全國的分支網絡。在過去的幾年裡，這些協同效應一直是我們增長和盈利的關鍵驅動力。

As we look ahead, our M&A pipeline remains very active. We expect to continue adding strong businesses to the Core & Main family throughout 2023 and beyond.

展望未來，我們的併購管道仍然非常活躍。我們希望在 2023 年及以後繼續為 Core & Main 家族增加強大的業務。

On the gross margin side, we continue to build out a highly scalable assortment of private-label brands and products used throughout the water, wastewater, geosynthetics and fire protection industries. These products typically yield gross margins that exceed our core products by 1.5 to 2x. We ended the year with private label representing approximately 2% of our total COGS, with opportunity for it to grow to 10% to 15% over the next several years. We believe our direct sourcing capabilities, brand recognition and diversified domestic and international supplier relationships will continue to create cost advantages and improve product availability in the future. Our private label efforts are focused on a wide array of spend on ancillary products that support our customers' projects, but not the highly specified products from our key supplier partners.

在毛利率方面，我們繼續打造一系列高度可擴展的自有品牌和產品，用於整個水、廢水、土工合成材料和消防行業。這些產品的毛利率通常是我們核心產品的 1.5 到 2 倍。今年結束時，自有品牌占我們總銷貨成本的大約 2%，並有機會在未來幾年內增長到 10% 到 15%。我們相信，我們的直接採購能力、品牌知名度和多元化的國內外供應商關係將在未來繼續創造成本優勢並提高產品可用性。我們的自有品牌努力側重於支持客戶項目的輔助產品的廣泛支出，而不是來自我們主要供應商合作夥伴的高度指定的產品。

We've also made great progress in optimizing system-wide pricing through IT enhancements and data-driven analysis, which enables us to identify pricing opportunities and mitigate the impact from rapid cost changes. We expect these initiatives and others to contribute positively to our gross margin in the years to come.

我們還在通過 IT 增強和數據驅動分析優化全系統定價方面取得了很大進展，這使我們能夠識別定價機會並減輕快速成本變化的影響。我們預計這些舉措和其他舉措將在未來幾年為我們的毛利率做出積極貢獻。

Turning to our productivity initiatives. We made strategic investments during the year aimed at improving our customer experience while making our teams more efficient, thereby driving organic growth and improving SG&A leverage. In addition to our technology-driven initiatives, we now have a dedicated strategic operations team who partners with our field to develop and implement operational best practices across the company. Not only do these solutions improve our efficiency to help drive EBITDA growth and EBITDA margin expansion, they also improve customer service through better communication and responsiveness with our customers. We are excited about increasing the capacity and efficiency of our branches, and we see continued improvement ahead.

轉向我們的生產力舉措。我們在這一年中進行了戰略投資，旨在改善我們的客戶體驗，同時提高我們團隊的效率，從而推動有機增長並提高 SG&A 槓桿率。除了我們的技術驅動計劃外，我們現在還有一個專門的戰略運營團隊，他們與我們的領域合作，在整個公司範圍內開發和實施運營最佳實踐。這些解決方案不僅提高了我們的效率以幫助推動 EBITDA 增長和 EBITDA 利潤率的增長，它們還通過更好地與客戶溝通和響應來改善客戶服務。我們對提高分支機構的容量和效率感到興奮，並且我們看到未來會持續改進。

As a leading specialty distributor that provides products, services and solutions with the national footprint, we also have an excellent balance across our offering and geographies. Our strategy to fill in existing product lines and geographies, both organically and through acquisitions, reinforces this balance over time. Our end-market mix, broad product portfolio and vast geographic footprint offers us multiple avenues to grow and more ways to create value for our customers and suppliers while providing resiliency in softer markets.

作為領先的專業分銷商，在全國范圍內提供產品、服務和解決方案，我們在我們的產品和地域之間也取得了很好的平衡。我們通過有機和收購來填補現有產品線和地域的戰略隨著時間的推移加強了這種平衡。我們的終端市場組合、廣泛的產品組合和廣闊的地理足跡為我們提供了多種增長途徑和更多方式來為我們的客戶和供應商創造價值，同時在疲軟的市場中提供彈性。

I have great confidence in our ability to operate this business and outperform in any economic environment. The resilience of our municipal end market, including the nondiscretionary repair and replacement nature of our business, our ability to generate strong cash flow even in weaker economic environment, sets us apart. While we expect a more challenging residential end market compared to where it has been performing in recent years, we have multiple levers to pull for continued growth. We have seen pricing stabilize and remain elevated for several months across our municipal pipe products. We expect to see continued inflation in other product categories.

我對我們經營這項業務並在任何經濟環境中表現出色的能力充滿信心。我們市政終端市場的彈性，包括我們業務的非全權維修和更換性質，我們即使在較弱的經濟環境中也能產生強勁現金流的能力，使我們與眾不同。雖然我們預計住宅終端市場與近年來的表現相比更具挑戰性，但我們有多種槓桿來推動持續增長。我們已經看到市政管道產品的價格穩定並在幾個月內保持高位。我們預計其他產品類別將持續通貨膨脹。

Overall, we don't expect a notable impact from pricing in fiscal 2023, either positive or negative. As we move into fiscal 2023, we'll continue executing on our growth and margin expansion strategies.

總體而言，我們預計 2023 財年的定價不會產生顯著影響，無論是積極的還是消極的。隨著我們進入 2023 財年，我們將繼續執行我們的增長和利潤擴張戰略。

Turning to Page 6, you can see our strong track record of performance over the last 5 years, with annual sales growth averaging approximately 20%, including 300 basis points above-market growth and 600 basis points of EBITDA margin expansion. We've done this while investing heavily in our teams and in new systems and technologies to develop the foundation for Core & Main. We remain confident in our ability to gain market share and drive profitable growth over the long term.

翻到第 6 頁，您可以看到我們過去 5 年的良好業績記錄，年銷售額平均增長約 20%，包括高於市場增長 300 個基點和 600 個基點的 EBITDA 利潤率擴張。我們在這樣做的同時大力投資於我們的團隊以及新系統和技術以開發 Core & Main 的基礎。我們對我們獲得市場份額和推動長期盈利增長的能力充滿信心。

On Page 7, we've outlined our value-creation targets. Historically, our end market volumes have grown from low to mid-single-digit range annually, and we had grown in excess of the market by at least 2 to 3 percentage points. We drive above-market growth through the execution of our product and customer initiatives, growth in underpenetrated geographies, the addition of key sales talent and local share gains.

在第 7 頁，我們概述了我們的價值創造目標。從歷史上看，我們的終端市場銷量每年從低個位數增長到中等個位數範圍，並且我們的增長超過市場至少 2 到 3 個百分點。我們通過執行我們的產品和客戶計劃、在滲透率低的地區實現增長、增加關鍵銷售人才和增加本地份額來推動高於市場的增長。

M&A is also central to our growth strategy. We have a robust pipeline and a proven playbook we utilize in pursuing and executing acquisitions. Our acquisitions have historically delivered 2 to 5 percentage points of sales growth annually, and we are confident in our ability to deliver similar results over the long term. We complement our sales growth with margin expansion initiatives, fixed cost leverage and productivity gains, which has allowed us to grow our profitability 1.3 to 1.5x faster than our sales. Because of our fixed cost structure, we naturally gain operating leverage as we grow, often having significant capacity to expand within our existing buildings, yards and delivery fleet.

併購也是我們增長戰略的核心。我們擁有強大的管道和經過驗證的劇本，我們在追求和執行收購時使用。從歷史上看，我們的收購每年帶來 2 到 5 個百分點的銷售額增長，我們相信我們有能力在長期內實現類似的結果。我們通過利潤擴張計劃、固定成本槓桿和生產力提升來補充我們的銷售增長，這使我們的盈利能力增長速度比我們的銷售速度快 1.3 到 1.5 倍。由於我們的固定成本結構，隨著我們的成長，我們自然會獲得經營槓桿，通常有很大的能力在我們現有的建築物、庭院和送貨車隊內進行擴展。

Our margin expansion initiatives include private label, category management, pricing analytics and productivity and innovation, in addition to margin enhancement from accretive M&A, are expected to continue driving sustainable margin improvement in the years to come.

我們的利潤率擴張舉措包括自有品牌、品類管理、定價分析以及生產力和創新，以及通過增持性併購提高利潤率，預計將在未來幾年繼續推動可持續的利潤率改善。

Lastly, we have a track record of strong operating cash flow due to the low capital requirements of our business and our effective working capital management. We expect to convert between 55% and 65% of our adjusted EBITDA into operating cash flow, providing ample liquidity to fund our growth strategies while returning capital to shareholders.

最後，由於我們業務的低資本需求和有效的營運資本管理，我們擁有強勁的經營現金流記錄。我們預計將 55% 至 65% 的調整後 EBITDA 轉化為運營現金流，提供充足的流動性來為我們的增長戰略提供資金，同時向股東返還資本。

On Page 8, we outline the secular growth trends that underpin each of our end markets. Municipal demand has exhibited steady growth over the long term due to the critical and immediate need to replace aged water infrastructure. However, due to limited available funding over the last decade, the pace of investment has significantly lagged the need for investment. In recent years, access to capital, increased water utility rate and necessity have increased municipal investment in water, and we expect these trends to continue for the foreseeable future. Each year, billions of gallons of treated water is lost through the United States due to our aging water infrastructure.

在第 8 頁，我們概述了支撐我們每個終端市場的長期增長趨勢。由於迫切需要更換老化的供水基礎設施，市政需求在長期內呈現穩定增長。然而，由於過去十年可用資金有限，投資步伐明顯滯後於投資需求。近年來，獲得資金、提高水利用率和必要性增加了市政對水的投資，我們預計這些趨勢在可預見的未來將持續下去。由於我們的供水基礎設施老化，每年有數十億加侖的處理過的水在美國流失。

Our secular focus on water, coupled with the commitment from our associates to advance reliable infrastructure helps mitigate these challenges over time. Our exposure to the resilient municipal end market positions us well to outperform the broader market in the event of a deeper short-term decline in residential lot development.

我們長期以來對水的關注，加上我們的員工對推進可靠基礎設施的承諾，隨著時間的推移有助於緩解這些挑戰。我們對彈性市政終端市場的敞口使我們能夠在住宅地塊開發短期下滑更深的情況下跑贏大盤。

We also believe we can capitalize on the anticipated long-term growth in residential and nonresidential development, both of which remain below long-term historical averages and are expected to benefit from population growth; the historical underbuild of housing versus household formations; demographic population shifts; the need for commercial, institutional, industrial and other nonresidential development to support population growth. Our nonresidential end market consists of a balanced mix of project types, including commercial buildings, healthcare facilities, schools, industrial complexes and less cyclical road and bridge rehabilitation projects, which provide stability through the ups and downs of economic cycles. Our broad exposure to the nonresidential end market generally provides stability as demand for these projects can happen on different cycles.

我們還相信，我們可以利用住宅和非住宅開發的預期長期增長，兩者均低於長期歷史平均水平，預計將受益於人口增長；歷史上住房建設不足與家庭結構的對比；人口變化；需要商業、機構、工業和其他非住宅發展來支持人口增長。我們的非住宅終端市場由均衡的項目類型組合組成，包括商業建築、醫療設施、學校、工業園區和周期性較低的道路和橋樑修復項目，這些項目在經濟周期的起伏中提供穩定性。我們對非住宅終端市場的廣泛接觸通常會提供穩定性，因為對這些項目的需求可能會在不同的周期發生。

Our residential exposure, which is just over 20% of net sales, is nearly all new land development, and supply developed loss is at a historically low level. As such, we believe that continued lot development will be critical to support long-term housing supply needs.

我們的住宅敞口僅占淨銷售額的 20% 以上，幾乎全部是新土地開發，供應開發損失處於歷史低位。因此，我們認為持續的土地開發對於支持長期住房供應需求至關重要。

Turning to Page 9. Our end markets are backed by critical investment in the U.S. infrastructure from the Infrastructure Investment and Jobs Act, which we estimate to be an addressable product sales opportunity exceeding $15 billion. In the coming years, we expect funding associated with the build to have a core focus on the upgrade, repair and replacement of municipal water systems. We are positioned to capitalize on this significant opportunity. We also anticipate that the $110 billion of funding earmarked for road and bridge work will be a tailwind for our nonresidential end market as we will have opportunity to sell our storm drainage products on these projects, including geosynthetics and erosion control.

翻到第 9 頁。我們的終端市場得到了基礎設施投資和就業法案對美國基礎設施的關鍵投資的支持，我們估計這是一個超過 150 億美元的可尋址產品銷售機會。在未來幾年，我們預計與建設相關的資金將重點放在市政供水系統的升級、維修和更換上。我們準備好利用這一重要機會。我們還預計，專用於道路和橋樑工程的 1100 億美元資金將成為我們非住宅終端市場的順風車，因為我們將有機會在這些項目上銷售我們的雨水排放產品，包括土工合成材料和侵蝕控制。

The first wave of funding has been allocated to state revolving funds, where municipalities can apply for the grants or loans. We are also seeing some allocation of funds. And while not material at this point, it is encouraging to see. There are over 55,000 municipalities across the U.S., some of which lack the knowledge and resources to apply for the funding, which could delay the process in getting it into the hands of the municipalities. We expect to play a key role in assisting municipalities to obtain this funding to help advance reliable infrastructure in the communities we serve. Once funds are awarded and allocated, municipalities will build them into their fiscal budgets. At that point, we'll begin to see it flow into our end markets, likely in the second half of 2023.

第一波資金已分配給國家循環基金，市政當局可以在其中申請贈款或貸款。我們也看到了一些資金分配。雖然在這一點上並不重要，但令人鼓舞的是看到了。美國有超過 55,000 個城市，其中一些城市缺乏申請資金的知識和資源，這可能會延遲將資金交到城市手中的過程。我們希望在協助市政當局獲得這筆資金以幫助推進我們所服務社區的可靠基礎設施方面發揮關鍵作用。一旦資金被授予和分配，市政當局會將其納入財政預算。到那時，我們將開始看到它流入我們的終端市場，很可能是在 2023 年下半年。

As I wrap up my prepared remarks, I want to share that I'm extremely proud to see our vision of advancing reliable infrastructure realized through the achievement of our growth strategies. Our teams have worked diligently to transform Core & Main into an industry leader that can be relied on to consistently deliver local knowledge, local experience and local service nationwide. We remain confident in our ability to navigate challenging market conditions, outperform the market and continue to grow the business, both organically and through M&A.

在結束我準備好的發言時，我想分享一下，我非常自豪地看到我們通過實現我們的增長戰略實現了推進可靠基礎設施的願景。我們的團隊努力工作，將 Core & Main 轉變為行業領導者，值得信賴，始終如一地在全國范圍內提供本地知識、本地經驗和本地服務。我們仍然相信我們有能力駕馭充滿挑戰的市場條件，跑贏市場，並通過有機和併購繼續發展業務。

Now I'll turn the call over to our Chief Financial Officer, Mark Witkowski, to discuss our financial results and fiscal 2023 outlook. Go ahead, Mark.

現在，我將把電話轉給我們的首席財務官 Mark Witkowski，討論我們的財務業績和 2023 財年展望。來吧，馬克。

Thanks, Steve. I'll begin on Pages 11 and 12 with highlights of our fourth quarter and full year results. For the fourth quarter, we reported net sales of nearly $1.4 billion, an increase of 10% compared with the prior year period with approximately 3 points of growth from acquisitions. Our organic growth was due to higher selling prices as we passed along rising material costs, partially offset by mid-single-digit volume decline.

謝謝，史蒂夫。我將從第 11 頁和第 12 頁開始重點介紹我們的第四季度和全年業績。第四季度，我們報告的淨銷售額接近 14 億美元，與去年同期相比增長 10%，收購增長約 3 個百分點。我們的有機增長是由於我們傳遞了不斷上漲的材料成本而提高了銷售價格，部分被中等個位數的銷量下降所抵消。

During the quarter, we benefited from higher selling prices compared with the prior year. Sequentially, we saw prices stabilize even as supply chains continue to improve. While prices have remained at elevated levels to date, we are beginning to see the price contribution moderate as we anniversary the increases from a year ago.

在本季度，我們受益於與去年同期相比更高的銷售價格。因此，即使供應鏈繼續改善，我們也看到價格趨於穩定。雖然迄今為止價格一直保持在較高水平，但隨著我們對一年前的漲幅進行週年紀念，我們開始看到價格貢獻有所緩和。

Organic volume declined by approximately 5% in the fourth quarter due to strong multiyear comps. We anticipated and were impacted by normal seasonality this year, and we also experienced more typical weather conditions compared with the prior year. Our results in the quarter were also impacted by a softening residential end market, as land and lot development slowed in response to higher interest rates, with developers continuing to scale down projects. Considering the strong volumes we have experienced in the past 2 years, both nonresidential and municipal markets continue to show strength.

由於強勁的多年競爭，有機銷量在第四季度下降了約 5%。我們預計今年會受到正常季節性因素的影響，而且與去年相比，我們還經歷了更典型的天氣狀況。我們在本季度的業績也受到住宅終端市場疲軟的影響，因為土地和土地開發因利率上升而放緩，開發商繼續縮減項目規模。考慮到我們在過去 2 年經歷的強勁交易量，非住宅和市政市場繼續表現強勁。

We delivered gross margins of 27.1% for the quarter, which were up 90 basis points from the prior year period. Our gross margin performance was driven by utilization of low-cost inventory, the execution of our margin enhancement initiatives, accretive acquisitions and a favorable mix benefit.

我們本季度的毛利率為 27.1%，比去年同期上升 90 個基點。我們的毛利率表現受到低成本庫存的利用、我們的利潤率提高計劃的執行、增值收購和有利的組合效益的推動。

SG&A as a percentage of net sales in the fourth quarter increased 80 basis points to 15.5%. The increase primarily reflects the impact of higher variable compensation, acquisitions, cost inflation and increased operating expenses to support our growth. Our SG&A as a percent of net sales is typically higher in the first and fourth quarters due to the seasonality of our sales and fixed cost structure.

第四季度 SG&A 占淨銷售額的百分比增長 80 個基點至 15.5%。這一增長主要反映了為支持我們的增長而增加的可變薪酬、收購、成本通脹和增加的運營費用的影響。由於我們銷售的季節性和固定成本結構，我們的 SG&A 占淨銷售額的百分比在第一季度和第四季度通常較高。

We recorded $84 million of net income in the fourth quarter compared with $79 million in the prior year period. The increase was primarily due to higher operating income, partially offset by higher interest expense and the provision for income taxes.

我們在第四季度錄得 8400 萬美元的淨收入，而去年同期為 7900 萬美元。這一增長主要是由於較高的營業收入，部分被較高的利息支出和所得稅撥備所抵消。

Adjusted EBITDA increased approximately 9% to $164 million compared with $151 million in the prior year. Adjusted EBITDA margin decreased 20 basis points to 11.9% due to cost inflation, higher operating expenses to support our growth and lower sales volume.

調整後的 EBITDA 增長約 9% 至 1.64 億美元，而去年同期為 1.51 億美元。調整後的 EBITDA 利潤率下降 20 個基點至 11.9%，原因是成本上漲、支持我們增長的運營費用增加以及銷量下降。

Turning to the full year performance on Page 12. Net sales grew 33% to $6.7 billion for fiscal 2022. The increase was due to higher selling prices from passing along rising material costs; mid-single-digit volume growth, driven by market share gains; and approximately 3 percentage points of contribution from acquisitions. We estimate that end-market volumes were broadly flat for the year, underpinned by low single-digit volume growth in our municipal end market, mid-single-digit volume growth in our nonresidential end market, offset by low double-digit volume declines in residential lot development. We outperformed our end markets and achieved share gains from the execution of our product, customer and geographic expansion initiatives; the addition of key sales talent; and strong operating performance during a period of supply chain challenges. We continue to accelerate the adoption of new products in our industry such as smart meter solutions, fusible HDPE products and services, fire protection, fabrication and kitting assemblies and stormwater management systems.

轉到第 12 頁的全年業績。2022 財年的淨銷售額增長 33%，達到 67 億美元。這一增長是由於材料成本上漲導致銷售價格上漲；在市場份額增長的推動下，銷量實現中個位數增長；約 3 個百分點的貢獻來自收購。我們估計，今年的終端市場銷量基本持平，這主要得益於市政終端市場的低個位數銷量增長、非住宅終端市場的中等個位數銷量增長，但被低兩位數的銷量下降所抵消住宅區開發。我們的表現優於我們的終端市場，並通過執行我們的產品、客戶和地域擴張計劃實現了份額增長；增加關鍵銷售人才；以及在供應鏈挑戰時期的強勁運營表現。我們繼續加快新產品在我們行業中的採用，例如智能儀表解決方案、可熔 HDPE 產品和服務、消防、製造和配套組件以及雨水管理系統。

We've also increased our share with strategic accounts who typically pursue large projects that require greater technical expertise and specialized procurement needs like the new construction and rehabilitation of water and wastewater treatment facilities. We estimate that these initiatives drove over 300 basis points of above-market growth in fiscal '22, despite the considerable share gains we achieved and have maintained since last year.

我們還增加了與戰略客戶的份額，這些客戶通常從事需要更多技術專長和專業採購需求的大型項目，例如水和廢水處理設施的新建和修復。我們估計這些舉措在 22 財年推動了超過 300 個基點的高於市場的增長，儘管我們取得了可觀的份額增長並自去年以來一直保持不變。

Gross profit for fiscal '22 increased 40% to approximately $1.8 billion, and gross profit margin increased 140 basis points to 27%. The increase was primarily driven by utilization of low-cost inventory, the execution of our margin enhancement initiatives, accretive acquisitions and a favorable mix benefit. Given the benefit from our inventory investments and the favorable pricing environment, we estimate that roughly 100 to 150 basis points of our 2022 gross margins may be temporary in nature and could reset once supply chains and costs fully normalize. However, we expect continued improvement from our gross margin initiatives, which will help reduce the potential reset in gross margin rate.

22 財年的毛利潤增長 40% 至約 18 億美元，毛利率增長 140 個基點至 27%。增長的主要原因是低成本庫存的利用、我們提高利潤率計劃的執行、增值收購和有利的組合效益。鑑於我們的庫存投資和有利的定價環境帶來的好處，我們估計 2022 年毛利率的大約 100 到 150 個基點可能是暫時的，一旦供應鍊和成本完全正常化可能會重置。然而，我們預計我們的毛利率舉措將持續改善，這將有助於降低毛利率的潛在重置。

Selling, general and administrative expenses for fiscal '22 increased 23% to $880 million, while SG&A as a percentage of net sales improved 110 basis points to 13.2%. The improvement in SG&A as a percentage of net sales is due to fixed cost leverage on the increase in net sales, partially offset by $127 million increase in personnel expenses, which was primarily driven by higher variable compensation costs and increased headcount. In addition, distribution facility and other operating costs increased due to higher volume and inflation.

22 財年的銷售、一般和行政費用增長了 23%，達到 8.8 億美元，而 SG&A 占淨銷售額的百分比提高了 110 個基點，達到 13.2%。 SG&A 占淨銷售額百分比的提高是由於固定成本對淨銷售額增長的影響，部分被人事費用增加 1.27 億美元所抵消，這主要是由於可變薪酬成本增加和員工人數增加所致。此外，由於銷量增加和通貨膨脹，分銷設施和其他運營成本也有所增加。

Interest expense for fiscal 2022 was $66 million compared with $98 million in the prior year. The decrease was due to lower debt levels compared with the prior year, partially offset by higher interest rates on the unhedged portion of our senior term loan.

2022 財年的利息支出為 6600 萬美元，上年為 9800 萬美元。減少的原因是與上一年相比債務水平較低，部分被我們高級定期貸款未對沖部分的較高利率所抵消。

Income tax expense for fiscal 2022 was $128 million compared with $51 million in the prior year, reflecting effective tax rates of 18.1% and 18.5%, respectively. The increase in taxes was a result of higher pretax income.

2022 財年的所得稅費用為 1.28 億美元，上年為 5100 萬美元，有效稅率分別為 18.1% 和 18.5%。稅收增加是稅前收入增加的結果。

Net income for fiscal 2022 increased 158% to $581 million. The increase was primarily due to higher operating income, lower interest expense and the absence of 2 IPO-related charges in the prior year, partially offset by the increase in income taxes.

2022 財年的淨收入增長 158% 至 5.81 億美元。這一增長主要是由於更高的營業收入、更低的利息支出以及上一年沒有 2 項與 IPO 相關的費用，部分被所得稅的增加所抵消。

Adjusted EBITDA for fiscal '22 increased 55% to $935 million, and adjusted EBITDA margin improved 200 basis points due to our strong net sales growth, gross margin expansion and leveraging our cost structure and the increase in net sales.

22 財年調整後的 EBITDA 增長了 55% 至 9.35 億美元，調整後的 EBITDA 利潤率提高了 200 個基點，這歸功於我們強勁的淨銷售額增長、毛利率擴張以及利用我們的成本結構和淨銷售額的增長。

Turning to our cash flow and balance sheet performance on Page 13. We delivered $307 million of operating cash flow in the fourth quarter. We take a disciplined approach to cash generation, and it is an important quality of our business model. As we've discussed over the last several quarters, we continue to invest in inventory to ensure we have the best levels of availability for our customers during a period of supply chain challenges. Additionally, our receivables have grown as a result of our strong sales growth. This working capital investment has supported our growth over the last year and has generated record returns.

轉到第 13 頁的現金流和資產負債表表現。我們在第四季度交付了 3.07 億美元的運營現金流。我們採取紀律嚴明的方式來產生現金，這是我們商業模式的一個重要品質。正如我們在過去幾個季度討論的那樣，我們繼續投資於庫存，以確保在供應鏈挑戰期間為客戶提供最佳水平的可用性。此外，由於我們強勁的銷售增長，我們的應收賬款也有所增加。這項營運資金投資支持了我們去年的增長，並產生了創紀錄的回報。

We generated over $400 million of operating cash flow in fiscal 2022, which reflects a 43% conversion from adjusted EBITDA. We expect continued improvements in operating cash flow as we work to optimize our inventory levels.

我們在 2022 財年產生了超過 4 億美元的運營現金流，這反映了 43% 的調整後 EBITDA 轉換。隨著我們努力優化庫存水平，我們預計經營現金流會持續改善。

At the end of the year, we had over $1.4 billion of liquidity, consisting of $177 million of cash and cash equivalents and $1.2 billion of excess availability under our Senior ABL Credit Facility. Our net debt leverage at the end of the year was 1.4x, representing an improvement of 1.1x from the end of fiscal 2021.

到年底，我們擁有超過 14 億美元的流動資金，其中包括 1.77 億美元的現金和現金等價物，以及 12 億美元的高級 ABL 信貸安排下的超額可用資金。我們年底的淨債務槓桿率為 1.4 倍，比 2021 財年末提高了 1.1 倍。

We maintain our cash and cash equivalents according to a conservative banking policy that requires diversification across a variety of highly rated financial institutions. Our ABL credit facility is also diversified across various financial institutions with no individual bank making up more than 10% of our available credit line. While we don't anticipate any significant impact from the recent events in the banking sector, we will continue to monitor the situation closely.

我們根據保守的銀行政策維護我們的現金和現金等價物，該政策要求在各種高評級金融機構中實現多元化。我們的 ABL 信貸額度也在各種金融機構中多樣化，沒有一家銀行占我們可用信貸額度的 10% 以上。雖然我們預計近期發生在銀行業的事件不會產生任何重大影響，但我們將繼續密切關注形勢。

Now I'll cover our outlook for fiscal '23 on Page 14. As you know, we are operating in a more challenging economic environment as we head into fiscal 2023. Accordingly, we anticipate softer demand compared to last year, which is reflected in our guidance. We expect net sales to range from $6.5 billion to $6.9 billion, representing year-over-year growth ranging from up 3% to down 3%. This assumes soft market volumes due to anticipated double-digit volume decline in residential lot development, partially offset by strength in municipal repair and replacement activity and a stable nonresidential end market.

現在，我將在第 14 頁介紹我們對 23 財年的展望。如您所知，隨著我們進入 2023 財年，我們將在更具挑戰性的經濟環境中運營。因此，我們預計與去年相比需求會疲軟，這反映在我們的指導。我們預計淨銷售額在 65 億美元至 69 億美元之間，同比增長 3% 至下降 3%。這是假設由於住宅地塊開發的預期兩位數下降導致市場銷量疲軟，部分被市政維修和更換活動的強勁以及穩定的非住宅終端市場所抵消。

Our value-creation formula remains firmly intact. We expect to achieve 2 to 3 points of sales growth from the execution of our product and customer initiatives, growth in underpenetrated geographies and the addition of key sales talent and share gains. We are also in a position to maintain, if not accelerate, our pace of M&A activity. We have significant balance sheet flexibility supported by strong cash flows, a robust pipeline of opportunities and a proven integration playbook. We expect 2 points of sales growth in fiscal 2023 from acquisitions that have already closed.

我們的價值創造公式仍然完好無損。我們預計通過執行我們的產品和客戶計劃、滲透率低的地區的增長以及關鍵銷售人才和份額收益的增加，實現 2 到 3 個百分點的銷售增長。我們也能夠保持（如果不是加快的話）我們的併購活動步伐。我們擁有強大的現金流、強大的機會管道和行之有效的整合策略支持的顯著資產負債表靈活性。我們預計 2023 財年已經完成的收購將使銷售額增長 2 個百分點。

Regarding material costs, there are reasons to believe that pricing from our products may sustain at higher levels due to the long-term demand characteristics of our end markets and the restricted supply of many of the products we distribute. As such, we expect contribution from higher selling prices to be roughly flat for the full year.

關於材料成本，有理由相信，由於我們終端市場的長期需求特徵以及我們經銷的許多產品的供應受限，我們產品的定價可能會維持在較高水平。因此，我們預計全年銷售價格上漲的貢獻將大致持平。

Roughly 2/3 of our sales are from products that are highly specified at the local level. The cost of these products have historically been very sticky, and we have been successful in passing along the rising material costs through higher prices. We expect to hold on to the recent price increases from these products, and we may even experience additional price increases through 2023 as suppliers continue to catch up with their rising costs. The remainder of our sales primarily includes municipal pipe products, many of which are specific to our industry with limited alternatives, thereby likely providing more stability versus pipe products that can be utilized across multiple industries. We will continue to monitor the cost of our municipal pipe products closely, but we have been pleased to see the cost of these products remain firm at higher levels over the past few quarters.

我們大約 2/3 的銷售額來自當地高度指定的產品。這些產品的成本在歷史上一直非常粘，我們已經成功地通過更高的價格轉嫁了不斷上漲的材料成本。我們預計這些產品最近的價格上漲將保持不變，我們甚至可能會在 2023 年之前經歷額外的價格上漲，因為供應商將繼續追趕其不斷上漲的成本。我們的其餘銷售主要包括市政管道產品，其中許多產品是我們行業特有的，替代品有限，因此與可跨多個行業使用的管道產品相比，可能會提供更高的穩定性。我們將繼續密切監控市政管道產品的成本，但我們很高興看到這些產品的成本在過去幾個季度保持在較高水平。

We expect our gross margin to normalize in fiscal 2023 by 100 to 150 basis points without the benefit from inventory investments ahead of rapid inflation. However, we will mitigate the impact of this through our margin expansion initiatives and productivity gains, which has allowed us to consistently grow profitability 30% to 50% faster than our sales.

我們預計我們的毛利率將在 2023 財年正常化 100 至 150 個基點，而無需在快速通脹之前從庫存投資中獲益。然而，我們將通過我們的利潤擴張計劃和生產力提升來減輕這種影響，這使我們能夠以比銷售額快 30% 至 50% 的速度持續增長盈利能力。

Taken all together, we expect fiscal 2023 adjusted EBITDA to be in the range of $785 million to $865 million, providing a new foundation for continued EBITDA margin improvement over the long term. We anticipate an effective tax rate of 18% to 20% in fiscal 2023. Keep in mind that our effective tax rate will increase if our continuing limited partners exit their position over time, since more income will be allocated to Core & Main, Inc. However, we expect our total cash tax distributions to reduce over the same time frame as we shift partnership distributions to corporate taxes and realize additional favorable tax attributes.

總而言之，我們預計 2023 財年調整後的 EBITDA 將在 7.85 億美元至 8.65 億美元之間，為長期持續改善 EBITDA 利潤率提供新的基礎。我們預計 2023 財年的有效稅率為 18% 至 20%。請記住，如果我們的持續有限合夥人隨著時間的推移退出職位，我們的有效稅率將會增加，因為更多收入將分配給 Core & Main, Inc.。然而，我們預計我們的總現金稅分配將在同一時間段內減少，因為我們將合夥分配轉移到公司稅並實現額外的優惠稅收屬性。

Regarding cash flow, we expect to convert 80% to 100% of our adjusted EBITDA into operating cash flow in fiscal 2023 as we optimize our inventory balances throughout the year. If our supply chains continue to improve, we intend to reduce inventory to the extent we can maintain service levels with our customers.

在現金流方面，隨著我們全年優化庫存餘額，我們預計在 2023 財年將 80% 至 100% 的調整後 EBITDA 轉化為運營現金流。如果我們的供應鏈繼續改善，我們打算減少庫存，以維持我們對客戶的服務水平。

I'll wrap up on Page 15 with a discussion of our capital allocation priorities. We expect to generate significant cash flow in 2023 and beyond given the tremendous growth and profitability we have achieved. Our primary capital allocation priority remains to invest in the growth of the business, both organically and through acquisition, but we expect to have excess capital available to deploy, which we intend to return to shareholders.

我將在第 15 頁結束討論我們的資本分配優先事項。鑑於我們取得的巨大增長和盈利能力，我們預計將在 2023 年及以後產生可觀的現金流。我們的主要資本分配優先事項仍然是通過有機和收購來投資於業務增長，但我們希望有多餘的資本可供部署，我們打算將這些資本返還給股東。

We are adding dividends as a potential future form of capital return alongside share repurchases as we consider the strength of our cash flows and our desire for a balanced approach. We will continue to evaluate these priorities while maintaining our financial strength and flexibility.

我們將股息作為一種潛在的未來資本回報形式與股票回購一起增加，因為我們考慮到我們現金流的實力和我們對平衡方法的渴望。我們將繼續評估這些優先事項，同時保持我們的財務實力和靈活性。

In closing, we have a resilient business model and a leadership team capable of quickly adjusting the changes in the market. We are strategically positioned with multiple paths of sustainable growth. We remain focused on executing at a high level to deliver value to our customers, suppliers, communities and shareholders.

最後，我們擁有彈性的商業模式和能夠快速調整市場變化的領導團隊。我們在戰略上定位於多種可持續增長路徑。我們仍然專注於高水平執行，為我們的客戶、供應商、社區和股東創造價值。

At this time, I'd like to open it up for questions.

這時，我想打開它來提問。

(Operator Instructions) Our first question today is from the line of Jamie Cook of Credit Suisse.

（操作員說明）我們今天的第一個問題來自瑞士信貸的傑米庫克。

I guess 2 questions. Understanding in your guide, you're talking about sort of a stable nonres market. Can you sort of talk to risk that you see in terms of the nonres sector and what's happening on the local banking side, just like the risk there and where the offsets would be if nonres starts to deteriorate? And then my second question, you're sitting with a very strong balance sheet, potentially going into a downturn. Can you speak to your appetite for the size of the acquisitions? And how much you'd be willing to lever up? I'm just wondering if there's an opportunity to do sort of a larger deal versus the more niche acquisitions you've done more recently.

我猜2個問題。在您的指南中了解到，您正在談論一種穩定的非資源市場。你能談談你在非資源部門看到的風險以及當地銀行方面正在發生的事情，就像那裡的風險以及如果非資源開始惡化時抵消的地方嗎？然後是我的第二個問題，你的資產負債表非常強勁，可能會陷入低迷。你能談談你對收購規模的胃口嗎？你願意提高多少？我只是想知道是否有機會做一筆更大的交易，而不是你最近完成的更多利基收購。

Okay. Thanks, Jamie. Yes, regarding nonresidential, I'd share with you a couple of things. Number one, we deal with this a lot on the upfront when it comes to land development for commercial construction. So we have a pretty good line of sight into our bidding activity and the starts activity on that side. And then as the buildings progress, we have a good line of sight into the finish phase of that when we get into our fire protection and products installed. So as we look through our backlog and we look through our bidding activity, we're really comfortable with what we're seeing in terms of the strength of the bidding activity and the strength of the backlog to really remain firm through '23.

好的。謝謝，傑米。是的，關於非住宅，我想和你分享一些事情。第一，當涉及到商業建設的土地開發時，我們會提前處理很多事情。因此，我們對投標活動和那邊的啟動活動有很好的了解。然後隨著建築物的進展，當我們進入消防和安裝產品時，我們可以很好地看到它的完成階段。因此，當我們查看我們的積壓訂單並查看我們的投標活動時，我們對我們所看到的投標活動的強度和積壓的強度在 23 年之前真正保持穩定感到非常滿意。

When you look at the M&A piece, we really believe we're in a spot right now, the ability to accelerate some of the M&A activity. We're obviously very prudent about what we do, and we look at a lot of deals out there. The pipeline is as strong as it's ever been. And we continue to see opportunity there as we look at not only the product expansion opportunities that we've had with geosynthetics, but also the bolt-on activities.

當您查看併購件時，我們真的相信我們現在處於一個位置，有能力加速一些併購活動。我們顯然對我們所做的事情非常謹慎，並且我們看到了很多交易。管道一如既往地堅固。我們繼續在那裡看到機會，因為我們不僅著眼於我們在土工合成材料方面的產品擴展機會，而且還著眼於螺栓固定活動。

As far as levering up, we've been able to really utilize a lot of our own operating cash flow at this point to do so. So as Mark shared with you in terms of our capital allocation priorities, we believe we can really sustain a lot of the organic growth, the M&A, and we do have options for excess cash as well and the different allocation opportunities there.

就槓桿而言，此時我們已經能夠真正利用我們自己的大量運營現金流來做到這一點。因此，正如馬克在我們的資本分配優先事項方面與您分享的那樣，我們相信我們真的可以維持大量的有機增長、併購，我們確實也有過剩現金的選擇以及那裡的不同分配機會。

Our next question is from the line of Kathryn Thompson of Thompson Research.

我們的下一個問題來自 Thompson Research 的 Kathryn Thompson。

And I appreciate the detail that you gave in the prepared commentary. Just a clarification on your EBITDA margin guidance and getting back to normalization, how much of that decline is really more related to volume versus price, outsized pricing gains or other factors that we may not take into account, for instance, mix?

我很欣賞你在準備好的評論中提供的細節。只是澄清一下你的 EBITDA 利潤率指導並恢復正常化，這種下降有多少實際上與數量與價格、超額定價收益或我們可能沒有考慮的其他因素有關，例如，混合？

Yes, Kathryn, thanks for the question. As you look at our guidance for the EBITDA margin at the midpoint, we're down about 170 basis points off of where we finished in fiscal 2022. I would attribute most of that really to the gross margin normalization that we're anticipating to happen in 2023. I think from a pricing and a volume standpoint, we think those are ultimately going to hold fairly firm next year. So we'll see a little bit of cost inflation come through on the SG&A side. So there's a little bit pressure there. But it really, we believe, provide the new foundation for where we're going to grow off of and really get us back to that kind of value-creation target of 1.3 to 1.5x operating leverage that we've been able to deliver consistently historically.

是的，凱瑟琳，謝謝你的提問。當您查看我們對中點 EBITDA 利潤率的指導時，我們比 2022 財年結束時下降了約 170 個基點。我將其中大部分歸因於我們預期發生的毛利率正常化2023 年。我認為從定價和數量的角度來看，我們認為這些最終將在明年保持相當穩定。因此，我們將看到 SG&A 方面出現一些成本通脹。所以那裡有一點壓力。但我們相信，它確實為我們的發展提供了新的基礎，並真正讓我們回到了我們能夠始終如一地實現的 1.3 至 1.5 倍運營槓桿的價值創造目標歷史上。

Okay. And then a consistent question we are getting from not just public companies, but the many private companies that we speak to on a regular basis is that there's so much volatility in the market and how do you forecast. And I guess the question I posed you that is posed to me often, which is what are the metrics given the volatility in the market that you are relying on most in making that prediction? And how has that changed and really understanding the why behind these metrics.

好的。然後，我們不僅從上市公司，而且從我們定期與之交談的許多私營公司那裡得到一個一致的問題，那就是市場波動太大，你如何預測。我想我經常向你提出的問題是，考慮到市場的波動性，你在做出預測時最依賴的指標是什麼？以及它是如何改變的，並真正理解了這些指標背後的原因。

Kathryn, I'd share with you a couple of things that we have internally that we evaluate is we have a number of indicators, including our backlog, the geographic location of where this backlog is, and you follow that up with all the bidding activity that we see. And so we feel like we've got a really good line of sight into the different end market sectors, the geographies in our ability to forecast as we go forward. The biggest unpredictability we had in the past has always been the pricing piece. Now as that is stabilizing, we believe that we're in a much better basis right now to forecast going forward.

凱瑟琳，我想和你分享一些我們內部評估的事情，我們有很多指標，包括我們的積壓，這個積壓的地理位置，你在所有的投標活動中跟進我們看到的。因此，我們覺得我們對不同的終端市場領域有很好的洞察力，在我們前進的過程中我們有能力預測的地域。我們過去最大的不可預測性一直是定價部分。現在，隨著這種情況趨於穩定，我們相信我們現在處於更好的基礎上來預測未來。

Our next question is from the line of Mike Dahl of RBC Capital Markets.

我們的下一個問題來自 RBC Capital Markets 的 Mike Dahl。

Just a follow-up on the current dynamics around end markets and some of the recent banking stress. I guess twofold, local and regional banks do play a large role in land development as well as in the resi sector as well as nonresi. So maybe could you articulate a bit more, when you say double-digit declines in lot development, maybe quantify that a little. But then on the non-resi piece, I appreciate the bidding is still healthy today. Historically, do you have a good way of tracking? I assume you track your win rate, but do you have a good way of tracking project fallout in terms of where kind of a bid ultimately doesn't even translate to a project moving forward? And how are you -- how do you evaluate that looking forward?

只是跟進終端市場的當前動態和最近的一些銀行業壓力。我想雙重的地方和區域銀行確實在土地開發以及 resi 部門和 nonresi 中發揮了重要作用。因此，當您說批次開發出現兩位數的下降時，也許您可以更清楚地表達一下，也許可以稍微量化一下。但在非電阻部分，我很欣賞今天的出價仍然健康。從歷史上看，你有好的追踪方式嗎？我假設您跟踪您的中標率，但是您是否有一種好的方法來跟踪項目的後果，即哪種投標最終甚至不會轉化為向前推進的項目？你怎麼樣 - 你如何評價這種展望？

Yes. I'd share with you, as we look at the bid activity, certainly, we look at win rate. We look at the ability for open jobs. If you can imagine a lot of these -- the work that we do is project related. And so the release of materials and the release of the credit lines that we have with the businesses are certainly tracked pretty closely as we go through here. It's kind of a complex lean rights type situation on how we look at the credit piece.

是的。我會與您分享，當我們查看投標活動時，當然，我們會查看中標率。我們看的是空缺職位的能力。如果您能想像很多這些——我們所做的工作與項目相關。因此，當我們在這裡進行時，材料的發布和我們與企業的信貸額度的發布肯定會得到非常密切的跟踪。關於我們如何看待信用部分，這是一種複雜的精益權利類型情況。

So we do follow that. We do have a good line of sight. We are pretty quick at being able to adjust down on that and to be able to get real-time information as well as what we're seeing on the forward-looking and then certainly in the backlog. So it's too early to tell exactly what type of indirect impact, some of the banking failures are going to have and the crisis it's going to have with our customers up to this point. Certainly, we don't have any direct impact to our business. And as we look at the customer impact, that's kind of yet to be determined, but we do have pretty good indicators to start assessing that as it starts to play out, if it plays out.

所以我們確實遵循這一點。我們確實有很好的視線。我們很快就能夠對此進行調整，並能夠獲得實時信息以及我們在前瞻性和積壓工作中看到的信息。因此，現在就準確判斷會產生何種類型的間接影響、一些銀行倒閉以及我們的客戶將面臨的危機還為時過早。當然，我們對我們的業務沒有任何直接影響。當我們查看客戶影響時，這還有待確定，但我們確實有很好的指標來開始評估它是否開始發揮作用，如果它發揮作用的話。

Okay. That's helpful. And then secondly, just on the pricing assumptions, it seems like you still exited the year and kind of a go on a mid-double-digit range on price, which, presumably, given your comments so far about price remaining elevated, there's some carryover impact, at least to start this year. So maybe help us understand kind of the trajectory of pricing as you go through the year to get to the flat estimate? Or is this just kind of being conservative on how the back half plays out? Because it seems like you're flowing through the entire -- you're kind of thinking in your gross margin side, that prices really normalize, but then there should be some tailwinds at the start of the year. So just the puts and takes around that.

好的。這很有幫助。然後其次，僅根據定價假設，您似乎仍然退出了這一年並且價格在兩位數的中間範圍內繼續，據推測，鑑於您到目前為止對價格保持高位的評論，有一些結轉影響，至少要從今年開始。因此，也許可以幫助我們了解您在一年中達到固定估計時的定價軌跡？或者這只是對後半場的表現持保守態度？因為看起來你正在經歷整個過程——你在考慮毛利率方面，價格真的正常化了，但年初應該會有一些順風。所以只是 puts 和 takes 周圍。

Yes. Sure, Mike. Thanks for the question. Yes, you're right. As we wrapped up 2022, we did have some still year-over-year pricing benefits in there in the low double-digit range. As we move into Q1 and certainly into Q2, you look back to last year, we really started to see some of that acceleration of price happens. So we do expect that price to moderate fairly quickly as we get into 2022 -- or sorry, 2023. In particular, in the first quarter, we'll probably see a little price benefit, and then that's going to stabilize pretty quickly as we get into Q2 and Q3 as we anniversary those increases from a year ago.

是的。當然，邁克。謝謝你的問題。你是對的。當我們結束 2022 年時，我們確實在較低的兩位數範圍內仍然有一些同比定價優勢。當我們進入第一季度，當然也進入第二季度時，回顧去年，我們確實開始看到價格加速上漲。因此，我們確實預計，隨著我們進入 2022 年——或者抱歉，2023 年，價格會迅速回落。特別是在第一季度，我們可能會看到一點價格收益，然後隨著我們的到來，價格將很快穩定下來進入第二季度和第三季度，因為我們紀念一年前的增長。

I'd say the gross margin normalization is really more the cost side catching up more so than any kind of price declines or anything. Obviously, we could see some risk with certain product categories. But frankly, on some of our non-pipe categories, we're still seeing some price increases come through, though not necessarily at the same magnitude or frequency that we saw last year. So that's what gives us the confidence that we'll see that kind of price really stabilize as we get to kind of midyear, and that's kind of how we see it playing out at this point.

我想說毛利率正常化實際上更多的是成本方面的追趕，而不是任何形式的價格下跌或任何事情。顯然，我們可以看到某些產品類別存在一些風險。但坦率地說，在我們的一些非管道類別中，我們仍然看到一些價格上漲，儘管幅度或頻率不一定與去年相同。所以這就是讓我們有信心在年中時看到這種價格真正穩定下來的原因，這就是我們目前看到的情況。

Our next question is from the line of David Manthey of Baird.

我們的下一個問題來自 Baird 的 David Manthey。

The Water Works segment of HD Supply, obviously, had a pretty rough period of time from the peak in '06 through '09. I was just wondering, Steve, if you could just compare and contrast the company then versus now and give us some comfort around cyclicality and what we might expect during the -- whatever is to come here.

顯然，HD Supply 的 Water Works 部分從 06 年的高峰期到 09 年經歷了一段相當艱難的時期。我只是想知道，史蒂夫，你是否可以將當時的公司與現在的公司進行比較和對比，並讓我們對周期性以及我們在此期間可能期待的事情有所安慰 - 無論發生什麼。

Yes. Sure, David. If you go back to that time period back in '08 and '09, the business end-market exposure was significantly different at that point. It was roughly about 50% residential. So a lot of the lot development and everything else that happened back then. That's where this business was exposed to fairly significantly, a lot less exposure in municipal and certainly in nonresidential. We tried to -- and have diversified the business significantly since then.

是的。當然，大衛。如果你回到 08 年和 09 年的那個時期，那時候的企業終端市場風險有很大不同。它大約有 50% 是住宅。所以很多地段的發展以及當時發生的一切。這就是這項業務受到相當大的影響的地方，在市政和非住宅方面的風險要小得多。我們試圖——並且從那時起就使業務顯著多元化。

The other thing I'd share with you is back then, the reason the recovery took so long, particularly in the residential piece for us where we get into land development, was there were a number and a big and a significant amount of, I'd say, developed property that was not built on. And so that lasted for years before any new land development happened and new infrastructure was put in the ground. As residential started to improve in 2010, '11 and '12, they were utilizing a lot of the predeveloped lots that were out there. So we're certainly not experiencing that now. The exposure we have is significantly less. It's about 22% today is residential in terms of land development. And if you look at kind of the available lots that are out there, land development is still a key shortage item. And these builders are still working on land development, still working on acquiring land as we get through this period here with the interest rates and everything else. So the business has diversified into municipal much more heavily. We've been able to add a lot more adjacent products into there.

我要與您分享的另一件事是當時，復甦花了這麼長時間的原因，特別是在我們進入土地開發的住宅區，有很多，而且數量很大，我'說，開發的財產不是建立在上面的。因此，在任何新的土地開發和新的基礎設施投入使用之前，這種情況持續了數年。隨著住宅在 2010 年、11 年和 12 年開始改善，他們正在利用那裡的許多預先開發的地塊。所以我們現在肯定不會遇到這種情況。我們的曝光率要低得多。就土地開發而言，今天大約有 22% 是住宅。而且，如果您查看可用地段的種類，就會發現土地開發仍然是一個關鍵的短缺項目。這些建築商仍在致力於土地開發，仍在努力獲得土地，因為我們在這裡度過了利率和其他一切的時期。因此，該業務已更加多元化地進入市政。我們已經能夠向其中添加更多相鄰產品。

We talk about some of our meter business that we have grown significantly in this space and become a leader in that, also with high-density polyethylene and fusible HDPE, some of those areas have helped us to diversify the business and bring in other product alternatives into that industry. So we're in a much different spot right now, many more levers to grow much more diversified in terms of our end markets since then.

我們談到我們的一些儀表業務，我們在這個領域取得了顯著增長，並成為該領域的領導者，還有高密度聚乙烯和易熔 HDPE，其中一些領域幫助我們實現了業務多元化，並引入了其他產品替代品進入那個行業。因此，我們現在處於一個截然不同的位置，從那時起，我們的終端市場有了更多的槓桿來變得更加多元化。

And second, on this landscape and construction acquisition, just 2 locations in Chicago, I think, that serves 15 states. And it sounds like they manufacture (inaudible) and geosynthetics. I'm wondering is this some kind of a backward integration, product access type acquisition? And I think we can back into $60 million in revs, is there something different about that profit model we should know about? Just more detail on that deal in particular would be helpful.

其次，在這次景觀和建築收購中，我認為芝加哥只有 2 個地點，服務於 15 個州。聽起來他們製造（聽不清）和土工合成材料。我想知道這是某種向後集成、產品訪問類型的收購嗎？而且我認為我們可以重新獲得 6000 萬美元的收益，我們應該了解這種盈利模式有什麼不同嗎？特別是關於該交易的更多詳細信息將會有所幫助。

Sure. It's 2 locations up there, but I'd almost consider it, if you're trying to estimate relative size, about 1 location would be equivalent of what we typically would do. And then we have gotten into geosynthetics and light fabrication. And we've been able to utilize that, if you look at some of the acquisitions we've done in the last few years. We started with a small geosynthetics branch in Indiana. We have since built our presence with a number of acquisitions up and down the Eastern Seaboard, out into the West Coast with California and then have organically opened a few other locations as well as we utilize those products to be able to pull through our branches and continue to serve existing customers through their other channels. So we see it as a margin accretive opportunity to continue to add value into our existing customer base and (inaudible).

當然。上面有 2 個位置，但我幾乎會考慮它，如果你想估計相對大小，大約 1 個位置相當於我們通常會做的。然後我們進入了土工合成材料和輕型製造領域。如果你看一下我們在過去幾年進行的一些收購，我們就能夠利用這一點。我們從印第安納州的一個小型土工合成材料分支機構開始。從那以後，我們通過在東海岸上下的一系列收購建立了我們的存在，進入加利福尼亞州的西海岸，然後有機地開設了其他幾個地點，我們利用這些產品能夠通過我們的分支機構和繼續通過其他渠道為現有客戶提供服務。因此，我們將其視為一個增加利潤的機會，可以繼續為我們現有的客戶群和（聽不清）增加價值。

Our next question is from the line of Nigel Coe of Wolfe Research.

我們的下一個問題來自 Wolfe Research 的 Nigel Coe。

I just want to go back to the margin guidance for 2023. And I think, Mark, you might have mentioned that the -- that most of the price cost sort of normalization occurs in the next sort of 12 months. So just wondering if the 12.4% midpoint guide, is that a good base for 2024? And are we now at a normal base of 12.4%?

我只想回到 2023 年的利潤率指導。我想，馬克，你可能已經提到——大部分價格成本的正常化發生在接下來的 12 個月內。所以只是想知道 12.4% 的中點指南是否是 2024 年的良好基礎？我們現在是否處於 12.4% 的正常基數？

Yes, Nigel. That's how we're thinking about it right now. Expect some of that normalization to start happening as we get into Q1 and Q2 and probably the biggest headwind in Q3 going into 2023. But really feel like at that midpoint, we'll be able to get back to our typical kind of value-creation growth off of that 12.4% EBITDA margin at the midpoint.

是的，奈傑爾。這就是我們現在正在考慮的方式。預計隨著我們進入第一季度和第二季度，並且可能是進入 2023 年第三季度的最大逆風，這種正常化會開始發生。但真的感覺在那個中點，我們將能夠回到我們典型的價值創造中點 12.4% 的 EBITDA 利潤率增長。

Okay. That's great. And then obviously, a lot of free cash flow in your guide for next year, roughly $7 million of free cash flow. You mentioned the dividend. I'm just wondering what the thinking is around the potential dividend next year. Would that be a relatively modest dividend? I mean, any thoughts around that? And then just to understand your thought process on deployments, would you expect to deploy the bulk of that $7 million in either M&A, buybacks and dividends?

好的。那太棒了。然後很明顯，你明年的指南中有很多自由現金流，大約 700 萬美元的自由現金流。你提到了股息。我只是想知道明年的潛在紅利是怎麼想的。那會是一個相對適度的股息嗎？我的意思是，有什麼想法嗎？然後，為了了解您對部署的思考過程，您是否希望將這 700 萬美元中的大部分用於併購、回購和股息？

Yes. Thanks, Nigel. The capital allocation is really a function of the cash flow. As you mentioned, we've been able to generate and really our confidence in it going forward for the long haul. So we'll still have organic growth and M&A as our key growth priorities. And as we mentioned, we think we can continue to do those at least at the level that we've done historically. But given the cash flow that we expect to generate, we really feel like we can balance that and return some capital to shareholders through either share repurchases, which could take various forms and potentially a modest dividend. So that's how we're thinking about it right now. We'll go through and assess those alternatives and try to optimize those returns to the shareholder base.

是的。謝謝，奈傑爾。資本配置實際上是現金流的函數。正如您所提到的，我們已經能夠產生並真正相信它會長期發展。因此，我們仍將有機增長和併購作為我們的主要增長重點。正如我們所提到的，我們認為我們至少可以在歷史上所做的水平上繼續做這些事情。但考慮到我們預期產生的現金流，我們真的覺得我們可以平衡這一點，並通過股票回購將一些資本返還給股東，這可以採取各種形式，並可能帶來適度的股息。這就是我們現在正在考慮的方式。我們將仔細研究並評估這些替代方案，並嘗試優化這些對股東基礎的回報。

But right now, debt reduction is a priority?

但眼下，減債是當務之急？

Not currently given where our leverage is. We're pretty comfortable where we are, at 1.4x. We'd be comfortable going up to 2 to 3x, depending on what opportunities are available for us. But right now, I think the opportunities we have for growth and return of capital present better return capabilities.

目前沒有給出我們的槓桿在哪裡。我們在 1.4 倍的位置上感到很舒服。根據我們可用的機會，我們可以輕鬆地提高 2 到 3 倍。但現在，我認為我們擁有的增長和資本回報機會提供了更好的回報能力。

The next question today is from the line of Joe Ritchie of Goldman Sachs.

今天的下一個問題來自高盛的 Joe Ritchie。

This is Vivek Srivastava on for Joe. My question is -- my first question is on the total addressable market. It was interesting to see your TAM from the point of IPO, which was around $27 billion, is now around $40 billion. Can you talk about what are the factors driving the increased TAM? How much of it is due to pricing? And where have you gained market share, because even your market share is higher now in this market? And if you are #1 in the market share now.

我是喬的 Vivek Srivastava。我的問題是——我的第一個問題是關於整個潛在市場。有趣的是，從 IPO 開始，您的 TAM 約為 270 億美元，現在約為 400 億美元。您能談談推動 TAM 增加的因素是什麼嗎？其中有多少是由於定價？你在哪裡獲得了市場份額，因為即使你的市場份額現在在這個市場上也更高？如果您現在在市場份額中排名第一。

Yes. Thanks for the question. Yes, if you look at the addressable market, I'd say the primary factor for that growth over that period has been the increase in prices that we've seen. As we talked about, the end market for '22 was relatively flat given the softer residential environment we experienced in particular in the back half of '22. And we've continued to take share gains while we've seen that market expand. And that's come through various forms. Obviously, the acquisitions that we've done, expansion into the erosion control, geosynthetic space, the local share gains. We believe we've taken a lot of share primarily in these local markets by having access to products and then expanding the products that we've got available for our customers. And then our sales initiatives with our strategic accounts, in particular, has allowed us to take some nice share gains over this period. So those are the main factors and continue to strive towards being the primary leader in this space.

是的。謝謝你的問題。是的，如果你看一下潛在市場，我會說那個時期增長的主要因素是我們看到的價格上漲。正如我們所說，考慮到我們在 22 年下半年經歷的較軟的住宅環境，22 年的終端市場相對平穩。在我們看到市場擴大的同時，我們繼續獲得份額收益。這是通過各種形式實現的。顯然，我們已經完成的收購，擴展到侵蝕控制、土工合成空間，本地份額收益。我們相信，通過獲得產品然後擴展我們為客戶提供的產品，我們主要在這些本地市場上佔據了很多份額。然後，我們與戰略客戶的銷售計劃，特別是讓我們在此期間獲得了一些不錯的份額收益。因此，這些是主要因素，並繼續努力成為該領域的主要領導者。

That's helpful. And maybe just jumping on to your nonresidential exposure. Can you share how much of your nonres -- I think 39% of your sales is nonres. How much of it is more institution exposed versus more commercial exposed? Because really, what we're trying to size is the lending risk is probably more on the commercial side, suggest any color on how much of that is specifically commercial.

這很有幫助。也許只是跳到你的非住宅曝光。你能分享一下你有多少非資源——我認為你 39% 的銷售額是非資源的。其中有多少是更多的機構暴露與更多的商業暴露？因為實際上，我們試圖確定的是貸款風險可能更多地出現在商業方面，建議使用任何顏色來說明其中有多少是專門用於商業的。

Yes. We've got a pretty balanced mix in the nonresidential end market. Some areas, obviously, commercial is part of it. Institutional spend is in there, some industrial that we've seen a lot of good growth as well with warehouse data centers. Also in nonresi, we have some multifamily exposure we put in there as well as some very, I'd say, noncyclical road and bridge work. So a lot of our storm drainage product that goes into road construction sits in our nonresidential end market. So it's pretty well diversified across the board, which is one of the primary reasons why we think that, that market is going to hold and be pretty stable into '23, despite some of the headwinds that we know are out there.

是的。我們在非住宅終端市場的組合相當均衡。有些地區，顯然，商業是其中的一部分。機構支出在那裡，一些我們已經看到很多良好增長的工業以及倉庫數據中心。同樣在 nonresi，我們在那裡進行了一些多家庭風險敞口，以及一些非週期性的道路和橋樑工程。因此，我們用於道路建設的許多雨水排放產品都位於我們的非住宅終端市場。因此，它在各個方面都非常多元化，這是我們認為該市場將保持穩定並進入 23 年的主要原因之一，儘管我們知道存在一些不利因素。

And the next question is from the line of Anthony Pettinari of Citi.

下一個問題來自花旗銀行的 Anthony Pettinari。

This is Asher Sohnen on for Anthony. I wanted to just clarify what I think I heard a response to another question. Just in terms of the cadence of sort of EBITDA margin, if you're guiding for maybe 150 to 200 basis points decline on the full year, I think I heard maybe 3Q was where the year-over-year decline start to really pick up. Is that correct?

這是安東尼的 Asher Sohnen。我只想澄清我認為我聽到的對另一個問題的回應。就 EBITDA 利潤率的節奏而言，如果你指導全年可能下降 150 到 200 個基點，我想我聽說也許第三季度是同比下降開始真正回升的地方.那是對的嗎？

Well, I think as you look at the comps related to 2022, that was one of our higher EBITDA margin quarters, was Q3. But I think as you think about the cadence of that reset really starting in Q1, into Q2, and then the bigger headwind just given the comp is Q3. So if that helps a little to just kind of think about the cadence as that plays out in '23.

好吧，我認為當您查看與 2022 年相關的公司時，這是我們較高的 EBITDA 利潤率季度之一，即第三季度。但我認為，當你考慮重置的節奏時，真正從第一季度開始，進入第二季度，然後更大的逆風就是第三季度。因此，如果這對考慮 23 年播放的節奏有一點幫助的話。

No, that's really helpful. And my second question is you guided to, I think, 80% to 100% sort of operating cash flow conversion in '23, which is obviously higher than your long-term 55% to 65% target. So I'm just wondering, what's driving that delta? Is that just a reversal of some inventory investments you made? And then longer term, is there any opportunity to kind of maybe sustain these high levels of cash conversion?

不，這真的很有幫助。我的第二個問題是，我認為你在 23 年指導了 80% 到 100% 的運營現金流轉換，這顯然高於你 55% 到 65% 的長期目標。所以我只是想知道，是什麼推動了這個三角洲？這只是您所做的一些庫存投資的逆轉嗎？然後從長遠來看，是否有機會維持這些高水平的現金轉換？

Yes, you're right. On the operating cash flow relative to our long-term target, we do expect that to be higher in '23, and that's primarily due to the inventory optimization that we expect to occur beginning in Q1 and into the selling season. So inventory is the biggest part of it. Receivables have been in good shape, good quality receivable base. And that's really the main factor there. I'd say longer term, is there opportunity? That's something that we'll continue to evaluate as we get our inventory rightsized and optimizing into '23. But I'd say that 55% to 65% is still a good target to think about long term.

你是對的。關於相對於我們長期目標的運營現金流，我們確實預計 23 年會更高，這主要是由於我們預計從第一季度開始到銷售季節會發生庫存優化。所以庫存是其中最大的部分。應收賬款狀況良好，應收賬款基礎質量較好。這確實是那裡的主要因素。我會說長期，有機會嗎？這是我們將繼續評估的內容，因為我們將我們的庫存合理化並優化到 23 年。但我想說，從長遠來看，55% 到 65% 仍然是一個不錯的目標。

The next question today is from the line of Matthew Bouley of Barclays.

今天的下一個問題來自巴克萊銀行的 Matthew Bouley。

You have Elizabeth Langan for Matt today. Just kind of looking at your guide for fiscal 2023, the commentary you gave around pricing was really helpful. But I was wondering if you could speak to maybe like your embedded expectations for like the path of demand through the year and maybe like how that plays with volume, like the implications for volume? And if you could break that out maybe first half, second half, that would be helpful.

馬特今天有請伊麗莎白·蘭根。看看你的 2023 財年指南，你對定價的評論真的很有幫助。但我想知道你是否可以談談你對全年需求路徑的內在期望，以及它如何影響交易量，比如對交易量的影響？如果你能把它分解出來，也許是上半場，下半場，那會很有幫助。

Yes. I would say in terms of the cadence for volume, again, just kind of looking back to 2022, in terms of where we had really difficult comps, meaning really strong performance last year, Q1 was probably one of our stronger year-over-year volume quarters. So comping against that this year, I think it's going to be a difficult hurdle to hit. So as you just think about kind of year-over-year cadence, I'd say, Q1, expecting a little softer relative to where we've been in '22, and then kind of getting back on the normal kind of seasonal increases into Q2 and Q3, like we've had in the past. And then Q4, again, will be a typical seasonal quarter sequentially from Q3 to Q4. I would typically expect that to ramp down.

是的。我想說的是，就銷量的節奏而言，再次回顧一下 2022 年，就我們真正困難的地方而言，這意味著去年的表現非常強勁，第一季度可能是我們同比增長最快的一年卷宿舍。因此，與今年相比，我認為這將是一個難以逾越的障礙。因此，當您考慮某種年復一年的節奏時，我會說，第一季度，相對於我們在 22 年的情況，預計會有所緩和，然後恢復正常的季節性增長進入第二季度和第三季度，就像我們過去一樣。然後，第四季度將再次成為從第三季度到第四季度的典型季節性季度。我通常希望它會下降。

Okay. And then on nonres, as we're kind of seeing like larger projects roll through the channel and onshoring trends, how are you thinking about those opportunities? And could you maybe touch on your ability to work with contractors and provide value-added services? And if there are any verticals that are -- you think that you're specifically advantaged to serve within those?

好的。然後在非資源方面，正如我們看到的那樣，更大的項目正在通過渠道和外包趨勢滾動，您如何看待這些機會？您能否談談您與承包商合作並提供增值服務的能力？如果有任何垂直領域——你認為你在其中服務特別有利嗎？

Sure, Elizabeth. I think when you look at some of the trends that have been happening here with onshoring, certainly, industrial and manufacturing growth has been really strong for us. And when we look at our -- particularly our fire protection products, one of the value add we do there is really working with the designers and the engineers on prefabbing and kitting a lot of the fire protection assemblies so that they can be put on, on site and assembled on site rather than fabricated on site. And so our ability to be able to do that and respond quickly for construction needs has been really second to none. And we've handled projects as large as full stadiums down to smaller warehouses, et cetera. So I think that's an area where we feel really well positioned to be able to capitalize that over the medium and long term, for sure.

當然，伊麗莎白。我認為，當你看一下在岸外包這裡發生的一些趨勢時，當然，工業和製造業的增長對我們來說非常強勁。當我們審視我們的——尤其是我們的消防產品時，我們所做的其中一項增值就是與設計師和工程師一起預製和裝配許多消防組件，以便可以安裝它們，在現場並在現場組裝，而不是在現場製造。因此，我們能夠做到這一點并快速響應建築需求的能力確實是首屈一指的。我們處理過的項目大到完整的體育場，小到倉庫等等。所以我認為這是一個我們感覺非常有能力在中長期內利用它的領域，當然。

Our next question is from the line of Pat Baumann of JPMorgan.

我們的下一個問題來自摩根大通的 Pat Baumann。

Just had a couple here. On Slide 9, can we walk through how you went about building up the TAMs for these different buckets? And then how that translates to your company? I guess, should we assume share that's in line with that 15% to 20%, that you -- I think you said 17% on one of the earlier slides and then spread that out over 5-or-so years? Or is there a reason to believe it will be kind of above or below that type of a share? And I know that's a long question, but I think you said none of this is assumed yet for '23? Maybe just kind of flesh out what's holding it up?

剛剛有一對夫婦在這裡。在幻燈片 9 上，我們能否介紹一下您是如何為這些不同的存儲桶構建 TAM 的？那麼這對您的公司有何影響？我想，我們是否應該假設份額與 15% 到 20% 一致，你 - 我認為你在之前的一張幻燈片中說了 17%，然後將其分散到 5 年左右？或者是否有理由相信它會高於或低於該類型的股票？我知道這是一個很長的問題，但我想你說過 23 年還沒有假設這些？也許只是有點充實是什麼阻礙了它？

Pat, thanks for the question. Yes, as you look at the infrastructure bill, we basically look at that spend and how much of that is material component that we would distribute. And then obviously, as you mentioned, then applying our share to that, I would say the one difference is, as you think about some of these projects, they tend to be fairly large scale, and we're one of the best positioned to capture those benefits. So we do feel like there's opportunity to get more than our fair share of those types of projects as you think about it.

帕特，謝謝你的提問。是的，當您查看基礎設施法案時，我們基本上會查看該支出以及其中有多少是我們將分配的物質組成部分。然後很明顯，正如你提到的，然後將我們的份額應用到這一點上，我想說的一個區別是，當你考慮其中一些項目時，它們的規模往往相當大，而我們是最有能力的項目之一抓住那些好處。因此，我們確實覺得有機會獲得比您認為的這些類型的項目更多的公平份額。

And then as it relates to timing, Steve mentioned we have seen some beginnings to that -- those funds starting to flow, which has been encouraging to see. We wish we had seen more, I'd say, at this stage. So that's what's pushed us more maybe towards the back half of '23 before we really start seeing the incremental benefit here. I'd say we are feeling better about the supply chain starting to free up. So that could be an opportunity to potentially accelerate some of this if we see more of those funds starting to get applied for. And then, yes, I think over a period of 5 to 7 years as those projects, depending on the size and the scale, actually get deployed is a reasonable time frame to think about that opportunity.

然後就時間而言，史蒂夫提到我們已經看到了一些開始——這些資金開始流動，這令人鼓舞。我想說，我們希望在這個階段看到更多。因此，在我們真正開始在這裡看到增量收益之前，這可能將我們推向了 23 世紀的後半段。我想說的是，我們對供應鏈開始自由化感覺好多了。因此，如果我們看到更多此類資金開始申請，這可能是一個加速其中一些的機會。然後，是的，我認為在 5 到 7 年的時間裡，根據規模和規模，實際部署這些項目是考慮這個機會的合理時間框架。

How much is incremental, do you think, in terms of -- versus like current market? Like is some of this just kind of funding from different sources as opposed to like incremental projects? Or is there a way to think about the incremental nature of this stuff coming through?

您認為，與當前市場相比，增量有多少？就像其中一些只是來自不同來源的資金，而不是增量項目？或者有沒有辦法考慮這些東西的增量性質？

Yes. We still believe it's incremental. We've indicated in the past, we do think it could accelerate our municipal end market by 1 to 2 points of growth over this period. So there is incremental funding here. There's -- through a lot of the either state revolving funds or specific grants for this type of work, so we're still confident that we could see an acceleration of that municipal end market due to this funding.

是的。我們仍然相信它是漸進的。我們過去曾表示，我們確實認為它可以在此期間將我們的市政終端市場加速 1 到 2 個百分點的增長。所以這裡有增量資金。有 - 通過大量國家循環基金或針對此類工作的特定贈款，因此我們仍然相信，由於這筆資金，我們可以看到市政終端市場的加速發展。

Great. And then on pricing. Last year, I think you've pointed 32% of your sales were commodity-priced product, I think you called it. Can you remind us what that is now, kind of what's embedded in those numbers? Like what type of product is in there? And how much price did that see in '22? And kind of what gives you confidence that this bucket of products will be able to kind of sustain pricing if commodity costs come down?

偉大的。然後是定價。去年，我認為您指出 32% 的銷售額是商品定價產品，我想您是這樣稱呼的。你能提醒我們現在是什麼嗎，這些數字中嵌入了什麼？比如那裡有什麼類型的產品？ 22 年的價格是多少？是什麼讓你相信如果商品成本下降，這批產品將能夠維持定價？

Yes, Pat. So what I would say is we've got about 2/3 of our revenue is based on products that are highly specified at the local level, and price is very sticky. And that's an element of this business that gives us a lot of confidence about the stability of pricing.

是的，帕特。所以我要說的是，我們大約 2/3 的收入來自當地高度指定的產品，而且價格非常粘。這是這項業務的一個要素，讓我們對定價的穩定性充滿信心。

Then I'd say there's less than 5% or so of our product that really tracks more towards underlying commodities. And those would be things like copper, pipe, steel pipe that's used in our fire protection product line. Those pipe products are widely distributed to various industries, so they tend to be much more cyclical.

然後我會說我們的產品中只有不到 5% 左右真正追踪更多基礎商品。這些就是我們的消防產品線中使用的銅管、管道、鋼管之類的東西。這些管道產品廣泛分佈於各個行業，因此它們往往更具週期性。

The balance of it then, so call it 25% to 30%, is our municipal pipe products, which include PVC pipe, municipal ductile iron pipe is in that category. Those types of pipe products are very specific to this sector and don't tend to move as cyclical as those copper and steel pipe. And we've been very encouraged to see the pricing on those products be fairly stable here over the last few quarters, even despite the supply chains improving in those categories. So those are areas that do have some risks, so we'll watch them closely. But that's how we're thinking about it. And the stability that we've seen recently is really what's driving that confidence going into '23.

那麼剩下的25%到30%就是我們的市政管道產品，包括PVC管，市政球墨鑄鐵管就屬於這一類。這些類型的管道產品非常針對該行業，不像那些銅管和鋼管那樣具有周期性。我們很高興看到過去幾個季度這些產品的定價相當穩定，儘管這些類別的供應鏈有所改善。所以這些領域確實存在一些風險，所以我們會密切關注它們。但這就是我們考慮的方式。我們最近看到的穩定性真正推動了進入 23 世紀的信心。

And as you think about those buckets, and thanks for the color, are you expecting like flattish pricing in all those buckets? Are you expecting maybe the more specified bucket, that's 2/3 of sales, to be up a little bit and the rest to be down a little bit? Any color on that?

當你想到這些桶時，感謝顏色，你是否期望所有這些桶的定價都持平？您是否期望更具體的桶，即銷售額的 2/3，會上升一點，而其餘部分會下降一點？上面有顏色嗎？

Yes. The way we think about it is these non-pipe products, we're typically supplying a solution to our customers. So we're typically not just providing PVC pipe or ductile iron pipe. It's part of a package, where we're selling valves, fittings, hydrants, so really a full solution. And we're anticipating that, that project that we're selling, the pricing is going to be stable overall for 2023. There could be some puts and takes in certain product categories. But overall, we think that pricing is going to be stable as we sell projects.

是的。我們考慮的方式是這些非管道產品，我們通常為客戶提供解決方案。所以我們通常不只是提供 PVC 管或球墨鑄鐵管。它是一個包的一部分，我們在那裡銷售閥門、配件、消防栓，所以真的是一個完整的解決方案。我們預計，我們正在出售的那個項目，到 2023 年，定價將總體穩定。某些產品類別可能會有一些看跌期權。但總的來說，我們認為在我們出售項目時定價會保持穩定。

Okay. Great. And then one last one for me. Any kind of parameters that you could provide, given that we're almost through March, in terms of like first quarter sales or margins? Any color would be helpful, I think, in modeling for everybody.

好的。偉大的。然後最後一張給我。考慮到我們快到 3 月了，您可以提供任何類型的參數，例如第一季度銷售額或利潤率？我認為任何顏色都有助於為每個人建模。

Yes, sure. I think as we've anticipated, the first quarter is kind of coming in as expected with some of the softness in the residential end market in particular. So I think from a volume standpoint, there's going to be some pressure in Q1. We did see some sequential gross margin reduction from Q3 to Q4 of '22. I expect we'll continue to see that into Q1 and Q2 of 2023 as that kind of gross margin normalizes, as we've talked about. So those are probably the key pieces to think about as we get into the first quarter of 2023.

是的，當然。我認為正如我們所預期的那樣，第一季度有點像預期的那樣，尤其是住宅終端市場的一些疲軟。所以我認為從數量的角度來看，第一季度會有一些壓力。從 22 年的第三季度到第四季度，我們確實看到了一些連續的毛利率下降。正如我們所討論的那樣，我預計我們將在 2023 年第一季度和第二季度繼續看到這種毛利率正常化。因此，這些可能是我們進入 2023 年第一季度時要考慮的關鍵問題。

I'm afraid we have no time left for any further questions. So it would be my pleasure to hand back to Steve LeClair for his closing remarks.

恐怕我們沒有時間再提問了。因此，我很高興將結束語交還給 Steve LeClair。

Thank you all again for joining us today. It was a pleasure to have you on the call. Fiscal 2022 was an outstanding year for Core & Main. We are well positioned to build on our positive momentum, and we have a strong outlook for fiscal 2023. We are confident that our strategy will drive further value creation as we continue to execute on our growth strategies and deliver on our capital deployment model. We have a tremendous amount of opportunity ahead of us, and we are well positioned to execute on those opportunities. Thank you for your interest in Core & Main. Operator, that concludes our call.

再次感謝大家今天加入我們。很高興你能接聽電話。 2022 財年對 Core & Main 來說是傑出的一年。我們已做好充分準備，在積極勢頭的基礎上再接再厲，我們對 2023 財年前景看好。我們相信，隨著我們繼續執行我們的增長戰略並實現我們的資本部署模式，我們的戰略將進一步推動價值創造。我們面前有大量的機會，我們有能力抓住這些機會。感謝您對 Core & Main 的關注。接線員，結束我們的通話。

Thank you, everyone, for joining. This concludes the call, and you may now disconnect your lines.

謝謝大家的加入。通話結束，您現在可以斷開線路。