Core & Main Inc (CNM) 2024 Q3 法說會逐字稿

Hello and welcome to the Core & Main Q3 2024 earnings call. My name is Alex and I'll be coordinating the call today. (Operator Instructions) And I hand it over to your host, Robyn Bradbury to begin. Please go ahead.

您好，歡迎參加 2024 年第三季 Core & Main 收益電話會議。我叫亞歷克斯，今天我將負責協調這場電話會議。(操作員指示) 現在我將節目交給主持人 Robyn Bradbury 開始。請繼續。

Thank you. Good morning, everyone. This is Robyn Bradbury, Senior Vice President of Finance and Investor Relations for Core & Main . We are happy to have you join us this morning for our fiscal 2024 third quarter earnings call.

謝謝。大家早安。我是 Core & Main 財務與投資者關係資深副總裁 Robyn Bradbury。我們很高興您今天上午參加我們的 2024 財年第三季財報電話會議。

I am joined today by Stephen LeClair, our chair and Chief Executive Officer and Mark Witkowski, our Chief Financial Officer. Steve will lead today's call with a business update and an overview of our recent acquisitions. Mark will then discuss our third quarter financial results and updated fiscal 2024 outlook followed by a Q&A session. We will conclude the call with Steve's closing remarks.

今天與我一起出席的還有我們的董事長兼執行長 Stephen LeClair 和財務長 Mark Witkowski。史蒂夫將在今天的電話會議上介紹業務最新進展以及我們最近的收購情況。然後，馬克將討論我們的第三季財務業績和更新的 2024 財年展望，隨後進行問答環節。我們將以史蒂夫的結束語結束本次通話。

We issued our earnings press release this morning and posted the presentation to the Investor Relations section of our website, our press release presentation and the statements made during this call may 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.

我們今天早上發布了我們的收益新聞稿，並將該簡報發佈到我們網站的投資者關係部分，我們的新聞稿簡報和本次電話會議期間的聲明可能包括前瞻性陳述。這些聲明受風險和不確定性的影響，可能導致實際結果與我們的預期和預測有重大差異。

Such risks and uncertainties include the factors set forth in our earnings press release and in our filings with the Securities and Exchange Commission. We will also discuss certain non-GAAP financial measures which we believe are useful in assessing 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.

這些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列出的因素。我們也將討論某些非公認會計準則財務指標，我們認為這些指標對評估我們業務的經營績效很有用。這些措施的對帳可以在我們的收益新聞稿和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 chair and Chief Executive Officer Stephen LeClair.

感謝您對 Core & Main 的關注。現在我將電話轉給董事長兼執行長 Stephen LeClair。

Thanks Rob and good morning everyone. Thank you for joining us today for our fiscal 2024 third quarter earnings call. Our team delivered strong performance with record quarterly sales of over $2 billion and adjusted EBITDA of $277 million. We have once again shown that Core & Main can grow in any environment.

謝謝 Rob，大家早安。感謝您今天參加我們的 2024 財年第三季財報電話會議。我們的團隊表現強勁，季度銷售額創下超過 20 億美元的紀錄，調整後 EBITDA 達到 2.77 億美元。我們再次證明 Core & Main 可以在任何環境中成長。

Our ongoing focus on driving organic market share gains combined with our disciplined approach to M&A enable us to achieve nearly 12% sales growth in the third quarter. We will discuss our results in more detail later in our prepared remarks. But first, I'll begin on page 5 of the presentation with some emerging themes in the water sector.

我們持續專注於推動有機市場份額的成長，並結合我們對併購的嚴謹態度，使我們在第三季度實現了近 12% 的銷售成長。我們將在稍後的準備好的評論中更詳細地討論我們的結果。但首先，我將從簡報的第 5 頁開始討論水產業的一些新興主題。

The United States continues to face a growing disparity between water supply and demand driven by a combination of environmental, demographic, and economic factors. Groundwater reserves are being depleted at a rapid pace, especially in agricultural areas rely on the irrigation. Aging water infrastructure compounds the problem as leaks and inefficiencies lead to significant losses in a resource that is becoming increasingly scarce. Together these factors create a challenging situation for maintaining reliable water supply.

受環境、人口和經濟等多種因素影響，美國水資源供需矛盾持續擴大。地下水儲量正迅速枯竭，尤其是在依賴灌溉的農業地區。老化的水利基礎設施使問題更加嚴重，因為洩漏和效率低下導致日益稀缺的資源嚴重損失。這些因素共同使得維持可靠的供水面臨嚴峻挑戰。

At the same time, demand for water is surging. Population growth is driving higher consumption levels for municipal and domestic use. Economic development including energy production and expanding industrialization also requires vast amounts of water.

與此同時，對水的需求也在激增。人口成長推動了市政和家庭消費水準的提高。能源生產和工業化擴張等經濟發展也需要大量的水。

Meanwhile, agriculture which accounts for approximately 70% of freshwater used in the US continues to consume large quantities to meet the demands of a growing population. Without significant efforts to improve water conservation and repair and upgrade aging infrastructure, the GAAP between water supply and demand will continue to widen. Addressing the widening GAAP requires bold investments in modernizing and expanding water infrastructure. In the infrastructure investment and Jobs Act provides a critical opportunity to do so.

同時，農業占美國淡水使用量的約 70%，但仍持續消耗大量淡水以滿足不斷增長的人口的需求。如果不大力改善水資源保護並修復和升級老化的基礎設施，水資源供應和需求之間的 GAAP 差距將繼續擴大。解決日益擴大的 GAAP 問題需要對水利基礎設施的現代化和擴建進行大膽投資。《基礎設施投資和就業法案》為此提供了重要機會。

The Act allocates billions of dollars to improve water systems across the US funding projects to repair aging pipelines, upgrade treatment facilities and develop technologies for water reuse and recycling. These investments which we expect will continue to receive bipartisan support are crucial for enhancing efficiency and reducing water loss ensuring that every drop counts in a time of increasing scarcity.

該法案撥款數十億美元用於改善美國各地的供水系統，資助修復老化管道、升級處理設施和開發水再利用和循環利用技術的項目。我們預計這些投資將繼續得到兩黨的支持，它們對於提高效率和減少水資源損失至關重要，確保在水資源日益匱乏的時期每一滴水都得到充分利用。

With our extensive product and service portfolio spanning water, wastewater storm drainage and fire protection systems, Core & Main is well positioned to play an important role in meeting the growing demand for infrastructure upgrades and supporting the development of resilient future ready water systems.

Core & Main 擁有涵蓋水、廢水雨水排放和消防系統的廣泛產品和服務組合，能夠在滿足日益增長的基礎設施升級需求和支援開發面向未來的彈性供水系統方面發揮重要作用。

Turning now to our end markets in the third quarter, the residential end market was modestly positive and there continues to be significant pent up demand for new housing in the US. If mortgage rates come down and affordability improves, we expect to see stronger levels of residential construction activity as homebuyers re-enter the market. Unlocking demand that has been accumulating over the past few years. The non-residential and market remains stable and our backlog and bidding activity continue to grow.

現在來看看第三季的終端市場，住宅終端市場表現溫和積極，美國對新房屋的需求仍然很大。如果抵押貸款利率下降且負擔能力提高，隨著購屋者重新進入市場，我們預計住宅建築活動將更加活躍。釋放過去幾年累積的需求。非住宅市場保持穩定，我們的積壓訂單和競標活動持續成長。

This momentum, strengthens our confidence in our outlook. Municipal repair and replacement activity continues to be resilient and we are pleased to see an increase in new project starts from the second quarter. We are also beginning to see more projects funded by the infrastructure investment and Jobs Act signalling a positive trajectory for investments in municipal water infrastructure in 2025 and beyond.

這種勢頭增強了我們對前景的信心。市政維修和更換活動持續保持彈性，我們很高興看到第二季新工程開工數量增加。我們也開始看到更多由基礎設施投資和就業法案資助的項目，這表明 2025 年及以後市政水利基礎設施投資將呈現積極的軌跡。

Each of our end markets benefit from secular growth trends that are expected to continue over the long term. Municipal demand which represents over 40% of our business has demonstrated steady growth historically due to the critical need to replace aged water infrastructure. With better access to capital, higher water utility rates and federal funding on the horizon, we expect this market to grow steadily for the foreseeable future.

我們的每個終端市場都受益於預期長期持續的長期成長趨勢。市政需求占我們業務的 40% 以上，由於迫切需要更換老化的水利基礎設施，歷史上一直呈現穩定成長。隨著資本管道的改善、水費的提高和聯邦政府資金的到位，我們預計這個市場在可預見的未來將穩定成長。

Residential and non-residential construction activity remain below long term historical averages when adjusting for population growth and both end markets are poised to benefit from demographic shifts, population growth, a shortage of buildable lots for new homes in the need for nonpresidential infrastructure to support the expansion of suburban and rural communities.

經人口增長調整後，住宅和非住宅建築活動仍低於長期歷史平均水平，並且兩個終端市場都將受益於人口結構變化、人口增長、新房可建地塊短缺以及對非總統基礎設施的需求以支持郊區和農村社區的擴張。

Moving to our operations. Our facilities in the southeast were up and running again shortly after e Hurricane Helene and Milton passed and they suffered minimal damage. Hurricanes can be disrupted to our operations in the short term, but they can create medium and long term tailwinds for our business. In the short term, shipments slow down as products are not able to be brought onto the job sites due to the destruction, flooding, and ground saturation and many of our customers are focused on the recovery efforts.

轉向我們的營運。颶風海倫和米爾頓過後不久，我們位於東南部的設施就恢復了運行，而且受到的損壞很小。颶風可能會在短期內擾亂我們的運營，但從中長期來看，它可以為我們的業務帶來利好。短期內，由於破壞、洪水和地面飽和導致產品無法運送到工作現場，而且我們的許多客戶都專注於恢復工作，因此運輸速度會放緩。

Over the medium term, we typically see a favourable impact from critical infrastructure repairs and over the long term, new projects and regulations are designed and constructed to handle higher volumes of storm water. Our associates in Florida and Carolinas are safe and accounted for the many had their lives disrupted. We continue to offer support to those who need assistance.

從中期來看，我們通常會看到關鍵基礎設施修復的有利影響；從長遠來看，新的項目和法規的設計和建造將會處理大量的雨水。我們在佛羅裡達州和卡羅來納州的同事很安全，許多人的生活受到了乾擾。我們將繼續向需要幫助的人提供支援。

Our product customer and geographic expansion initiatives continue to outpace core and market growth highlighted by the 24% growth we achieved in meter sales during the quarter and supplemented by our execution water and wastewater treatment plant projects. Last quarter, we talked about our position as one of the nation's leading providers of advanced metering solutions and the value proposition we bring to our municipal customers.

我們的產品客戶和地理擴張計畫持續超過核心和市場成長，其中突出的是本季我們實現的儀表銷售額成長 24%，並輔以我們執行的水和廢水處理廠專案。上個季度，我們討論了我們作為全國領先的先進計量解決方案提供者之一的地位以及我們為市政客戶帶來的價值主張。

You're also a leading provider of engineered products that are found within water and wastewater treatment plants. We have historically focused on the connections that bring water and sewer utilities to and from treatment plants and their customers. But these treatment plant projects provide us with a substantial opportunity to expand inside the fence, selling a wider variety of specialty valves and equipment.

您也是水和廢水處理廠工程產品的領先供應商。我們歷來專注於水和污水處理設施與處理廠及其客戶的連接。但這些處理廠專案為我們提供了在圍欄內擴張的巨大機會，銷售更多種類的專用閥門和設備。

We have continued to invest in key talent that understands the unique specifications for treatment plants, has the knowledge to navigate the complex funding processes they follow. These investments coupled with our partnerships with national contractors who specialize in these projects have been key to our growth.

我們一直在投資於了解處理廠的獨特規格、擁有處理其所遵循的複雜融資流程的知識的關鍵人才。這些投資加上我們與專門從事這些專案的國家承包商的合作關係是我們成長的關鍵。

We also opened new locations in Hayden, Idaho and Chattanooga, Tennessee during and after the quarter, expanding our geographic reach and allowing us to better serve our waterworks customers in key markets. Each time we add a new location, we had key talent enhance our value proposition giving us the opportunity to earn market share. Our team is actively evaluating a pipeline of priority markets to expand into and we have plans to open more locations over the next several quarters.

我們還在本季和之後在愛達荷州海登和田納西州查塔努加開設了新店，擴大了我們的地理覆蓋範圍，使我們能夠更好地服務於主要市場的水務客戶。每當我們增加一個新地點時，我們都會讓關鍵人才來提升我們的價值主張，從而讓我們有機會贏得市場份額。我們的團隊正在積極評估擴展的優先市場管道，並計劃在接下來的幾季開設更多門市。

We expanded gross margins by 20 basis points sequentially from the second quarter through the success of our initiatives. We have done a tremendous job structurally enhancing gross margins over the years through the addition and expansion of our private label strategy, driving synergies through M&A and optimizing the way we source and price our products.

由於我們採取的措施取得成功，從第二季起，我們的毛利率連續提高了 20 個基點。多年來，我們透過增加和擴展自有品牌策略、透過併購推動協同效應以及優化產品採購和定價方式，在結構上提高了毛利率，取得了巨大的成就。

We have been very transparent about the temporary gross margin tailwinds we've experienced over the past two years and our expectation for gross margin normalization . As we communicated last quarter, we expected that gross margins have normalized providing a solid baseline for us to build upon moving forward. We generated robust operating cash flow of $260 million during the quarter and our disciplined approach to capital allocation further demonstrates our commitment to growth and creating value for shareholders.

我們對過去兩年經歷的暫時毛利率順風以及對毛利率正常化的預期一直非常透明。正如我們上個季度所傳達的那樣，我們預計毛利率已經正常化，為我們未來的發展奠定了堅實的基礎。我們在本季度創造了 2.6 億美元的強勁營運現金流，我們嚴謹的資本配置方法進一步表明了我們致力於成長和為股東創造價值的承諾。

We completed five acquisitions during and after the quarter to expand our presence in key geographies, gain access to new product lines and add key talent. We also deployed $100 million to repurchase and retire nearly 2.5 million shares under our share repurchase program.

我們在本季及之後完成了五次收購，以擴大我們在主要地區的影響力、獲得新的產品線並增加關鍵人才。我們也根據股票回購計畫投入 1 億美元回購並註銷近 250 萬股股票。

We operate an asset light model which has allowed us to convert between 60% to 70% of our adjusted EBITDA into operating cash flow historically. We expect to maintain that same level of operating cash flow generation going forward, resulting in significant available capital that we will reinvest back into the business and return to shareholders.

我們採用輕資產模式，歷史上，這使得我們能夠將 60% 至 70% 的調整後 EBITDA 轉化為營運現金流。我們預期未來經營現金流的產生將維持相同的水平，從而產生大量可用資本，我們將把這些資本重新投資到業務中並返還給股東。

Turning to acquisitions. We highlighted the acquisition of HM Pipe Products grow green solutions and green equipment company in our second quarter call in September. We completed two more acquisitions since then including Eastcom Associates and ARGCO Northeast. Eastcom Associates is a distributor of utility protection equipment with a single location in New Jersey.

轉向收購。我們在 9 月的第二季電話會議上重點介紹了對 HM Pipe Products 發展綠色解決方案和綠色設備公司進行收購的情況。此後，我們又完成了兩次收購，包括 Eastcom Associates 和 ARGCO Northeast。Eastcom Associates 是一家公用事業保護設備經銷商，在新澤西州設有辦事處。

Since 1,972 the Eastcom team has provided exceptional service to surveyors and contractors across 13 states by offering damage prevention equipment, training, and services. They have a strong reputation for their commitment to being dependable partner and we are excited to welcome them to the Core & Main family. ARGCO Northeast is the single branch distributor of fire protection products and services operating in New Jersey. They have become a trusted partner to the customers they serve, delivering top quality fire protection products and outstanding support.

自 1,972 年以來，Eastcom 團隊透過提供損害預防設備、培訓和服務，為 13 個州的測量員和承包商提供了卓越的服務。他們因致力於成為值得信賴的合作夥伴而享有盛譽，我們很高興歡迎他們加入 Core & Main 大家庭。ARGCO Northeast 是新澤西州唯一的消防產品和服務分銷商。他們已經成為其服務客戶值得信賴的合作夥伴，提供最優質的消防產品和出色的支援。

They mirror our own level of commitment to customers here at Core & Main , we look forward to partnering with them to further our customer success. On a combined basis, the five acquisitions we completed during and after the quarter generate roughly $150 million in annualized net sales. In year-to-date, we have now completed 10 acquisitions with combined annualized net sales of approximately $620 million.

它們體現了我們 Core & Main 對客戶的承諾水平，我們期待與他們合作，進一步幫助客戶取得成功。總體而言，我們在本季及之後完成的五次收購產生了約 1.5 億美元的年化淨銷售額。今年迄今為止，我們已完成 10 項收購，總計年淨銷售額約 6.2 億美元。

Integrating new businesses is a complex process that involves aligning diverse systems, operations, and cultures to create one cohesive organization. Our integration process is well defined, scalable, and highly flexible based on the needs of each acquisition. With an experienced team, deep relationships with high performing companies and a reputation as the acquirer of choice in our industry will remain well positioned to grow through acquisitions for many years to come.

整合新業務是一個複雜的過程，涉及協調不同的系統、營運和文化以創建一個有凝聚力的組織。我們的整合流程定義明確、可擴展且根據每次收購的需求具有高度靈活性。憑藉經驗豐富的團隊、與高績效公司的深厚關係以及作為行業首選收購者的聲譽，我們將在未來許多年內繼續透過收購保持良好的發展勢頭。

Lastly, I'll wrap up my prepared remarks with our key investment highlights and what makes Core & Main an exceptional business. Core & Main stands out as an industry leader in a large and growing $39 billion addressable market. We are one of only two national distributors competing in our space with the remainder of the market served by hundreds of other local and regional distributors.

最後，我將以我們主要的投資亮點以及 Core & Main 成為卓越企業的原因來總結我的準備好的演講。Core & Main 在規模龐大且不斷成長的 390 億美元潛在市場中脫穎而出，成為產業領導者。我們是在這個領域競爭的僅有的兩家全國性分銷商之一，其餘市場由數百家其他地方和地區分銷商提供服務。

Our local presence and expertise are backed by national scale. We can utilize our size and resources to capitalize on new growth opportunities, strengthen our competitive edge, deliver even better products and services that support our customers. As I mentioned earlier, the end markets we serve are supported by secular tailwinds including the undersupply of housing relative to population growth and household formations, the critical need to repair and upgrade municipal water systems and a growing focus on water sustainability.

我們的本地影響力和專業知識有全國規模的支持。我們可以利用我們的規模和資源來抓住新的成長機會，增強我們的競爭優勢，提供更好的產品和服務來支持我們的客戶。正如我之前提到的，我們服務的終端市場受到長期順風的支持，包括相對於人口增長和家庭形成而言的住房供應不足、修復和升級市政供水系統的迫切需要以及對水可持續性的日益關注。

We have multiple levers to drive organic growth including investments in greenfield, the addition new sales talent, our ability to drive the adoption of new products throughout the industry and our relentless focus on proving our value proposition at the local level. We also have multiple levers to drive sustainable margin expansion including the expansion of our private label portfolio, optimizing the way we source and price our products and driving operational efficiencies throughout our vast distribution network.

我們擁有多種槓桿來推動有機成長，包括對綠地的投資、增加新的銷售人才、推動整個行業採用新產品的能力以及堅持不懈地專注於在當地證明我們的價值主張。我們也擁有多種槓桿來推動永續利潤率擴大，包括擴大我們的自有品牌組合，優化我們的產品採購和定價方式，以及提高我們龐大分銷網絡的營運效率。

Our ability to identify, execute and integrate acquisitions has been a cornerstone of our success enabling us to expand our capabilities, increase market share and deliver synergies across our network. Core & Main is not just a distributor. We differentiate ourselves through a comprehensive portfolio of product and service offerings enhanced by proprietary technology tools that streamline workflows, improve efficiency, and deliver a superior experience to our customers.

我們識別、執行和整合收購的能力是我們成功的基石，使我們能夠擴大能力、增加市場份額並在整個網路內實現協同效應。Core & Main 不僅僅是一家經銷商。我們透過全面的產品和服務組合實現差異化，並透過專有技術工具增強這些產品和服務，從而簡化工作流程、提高效率並為客戶提供卓越的體驗。

We are a trusted source to our customers because of our operational excellence across all products, services, and markets. Very rarely do our customers come to us with a list of materials. Instead, they come to us with a project idea or engineered drawing and we bring those projects to life by converting them into comprehensive material project plans.

由於我們在所有產品、服務和市場中都擁有卓越的運營，因此我們是客戶值得信賴的選擇。我們的客戶很少會帶著材料清單來找我們。相反，他們帶著項目構想或工程圖來找我們，我們將其轉化為全面的材料項目計劃，從而將這些項目變為現實。

Our geographic footprint and reach to local communities is also essential to our suppliers as we have a large and highly knowledgeable sales force with boots on the ground and the ability to reach our fragmented customer base. With a resilient financial profile characterized by strong cash flow generation, disciplined capital allocation and attractive return characteristics. Core & Main is well positioned to create and deliver value for shareholders, while fulfilling its mission to advance reliable infrastructure across the communities we serve. Before I turn it over to mark, I want to take a moment to reflect on the past few quarters.

我們的地理覆蓋範圍和對當地社區的影響力對於我們的供應商來說也至關重要，因為我們擁有一支龐大且知識淵博的銷售隊伍，他們腳踏實地，能夠接觸到我們分散的客戶群。具有強勁的財務狀況，特點是強勁的現金流產生、嚴格的資本配置和有吸引力的回報特徵。Core & Main 致力於為股東創造和提供價值，同時履行其為我們服務的社區提供可靠基礎設施的使命。在將其交給馬克之前，我想花點時間回顧過去幾個季度。

Our teams have had to navigate several challenges and distractions from dynamic market conditions to unprecedented weather events and other external factors beyond our control. Our teams consistently rose to the occasion demonstrating focus, agility, resilience, and commitment. Their continued ability to adapt, collaborate, focus on our customers, and drive results speaks volumes about the strength of our culture and the dedication of our people.

我們的團隊必須應對各種挑戰和乾擾，包括動態的市場條件、前所未有的天氣事件以及其他我們無法控制的外部因素。我們的團隊始終不負眾望，展現出專注、敏捷、堅韌和奉獻的精神。他們持續的適應、協作、關注客戶和推動成果的能力充分說明了我們文化的力量和員工的奉獻精神。

Thank you for your ongoing support. I look forward to what we will accomplish in the years ahead. Go ahead, Mark.

感謝您一直以來的支持。我期待著我們在未來幾年裡能夠取得成就。繼續吧，馬克。

Thanks Steve. I'd also like to extend my thanks to our teams for their hard work in delivering another record quarter. We grew net sales approximately 12% in the third quarter to $2.04 billion. As Steve mentioned, this was the highest level of quarterly sales in the company history.

謝謝史蒂夫。我也要向我們的團隊表示感謝，感謝他們的辛勤工作，創造了另一個創紀錄的季度。第三季度，我們的淨銷售額成長了約 12%，達到 20.4 億美元。正如史蒂夫所說，這是公司歷史上季度銷售額的最高水平。

Acquisitions contributed about 9% of our sales growth and organic volumes were up mid-single digits due to a rebound of municipal project starts and more favourable weather conditions which allowed our customers to resume some of the projects that were deferred last quarter.

收購貢獻了我們銷售額成長的約 9%，由於市政項目開工量反彈且天氣條件更加有利，我們的客戶得以恢復上個季度推遲的一些項目，有機銷量增長了中等個位數。

As anticipated pricing remains stable on a sequential basis. Gross margins for the quarter finished at 26.6% compared with 27% in the prior year, a difference of approximately 40 basis points. During our second quarter call in September, we communicated our expectation that gross margin normalization had run its course and that we would be in a position to expand gross margin sequentially through the execution of our initiatives.

正如預期的那樣，價格保持連續穩定。本季毛利率為 26.6%，去年同期為 27%，相差約 40 個基點。在九月的第二季電話會議上，我們表達了我們的預期，即毛利率正常化已經完成，並且我們將能夠透過執行我們的計劃逐步提高毛利率。

Our teams delivered on that delivering strong execution to expand gross margins by 20 basis points from the second quarter. Selling general and administrative expenses increased 14% in the third quarter to $274 million. The year-over-year increase in both SG&A and SG&A as a percentage of net sales primarily reflects the impact of acquisitions. Interest expense in the third quarter was $36 million compared with $20 million in the prior year.

我們的團隊實現了這一目標，並憑藉強大的執行力將毛利率從第二季度提高了 20 個基點。第三季銷售一般及行政開支增加 14% 至 2.74 億美元。銷售、一般及行政費用以及銷售、一般及行政費用佔淨銷售額的百分比的同比增長主要反映了收購的影響。第三季的利息支出為 3,600 萬美元，去年同期的利息支出為 2,000 萬美元。

The increase was primarily due to the addition of the $750 million term loan due 2031 and higher borrowings under our senior ABL credit facility. The provision for income taxes in the third quarter was $47 million compared with $39 million in the prior year and our effective tax rates were 25.1% and 19.8%, respectively.

成長的主要原因是增加了 2031 年到期的 7.5 億美元定期貸款，以及高級 ABL 信貸安排下的借款增加。第三季的所得稅準備金為 4,700 萬美元，而去年同期為 3,900 萬美元，我們的有效稅率分別為 25.1% 和 19.8%。

This quarter's effective tax rate reflects a more normalized ongoing rate and the increase over the prior year period was primarily due to exchanges of partnership interest in conjunction with secondary offerings and the repurchase transactions we completed in fiscal 2023. We recorded $140 million in net income in the third quarter compared with $158 million in the prior year.

本季的有效稅率反映了更正常化的持續稅率，與去年同期相比的成長主要是由於與二次發行相關的合作權益交換以及我們在 2023 財年完成的回購交易。我們第三季的淨收入為 1.4 億美元，而去年同期為 1.58 億美元。

The decrease in net income was primarily due to higher SG&A and amortization expenses and an increase in interest expense. Diluted earnings per share increased approximately 6% in the third quarter to $0.69. The increase in diluted earnings per share was due to lower share counts following the share repurchase transactions executed throughout fiscal years, 2023 and 2024 partially offset by a decline in net income.

淨收入減少主要是因為銷售、一般及行政費用和攤銷費用增加以及利息支出增加。第三季每股攤薄收益成長約 6% 至 0.69 美元。每股攤薄收益的增加是由於 2023 和 2024 財年執行的股票回購交易導致股票數量減少，但淨收入的下降部分抵消了這一影響。

Adjusted EBITDA in the third quarter increased approximately 7% to $277 million. Adjusted EBITDA margins decrease 60 basis points year-over-year to 13.6% reflecting a 50 basis point sequential improvement from the second quarter.

第三季調整後 EBITDA 成長約 7% 至 2.77 億美元。調整後的 EBITDA 利潤率年減 60 個基點至 13.6%，較第二季較上季提高 50 個基點。

Moving to our balance sheet and cash flow, we ended the quarter with net debt of approximately $2.4 billion and our net debt leverage was 2.7 times. Total liquidity was $1 billion consisting of $10 million of cash and the remaining amount being excess availability under our ABL revolver.

至於我們的資產負債表和現金流，本季末我們的淨債務約為 24 億美元，淨債務槓桿為 2.7 倍。總流動資金為 10 億美元，其中包括 1000 萬美元現金，剩餘金額為我們的 ABL 循環信貸下的超額可用金額。

We generated $260 million of operating cash flow during the quarter reflecting over 90% conversion from adjusted EBITA. We continue to strategically allocate our cash flow and our capital allocation priorities remain unchanged with investments and growth being our top priority.

我們在本季創造了 2.6 億美元的營運現金流，其中調整後 EBITA 轉換率超過 90%。我們繼續策略性地分配我們的現金流，我們的資本配置重點保持不變，投資和成長是我們的首要任務。

This year, we have completed 10 acquisitions and we continue to have a healthy pipeline. Our second priority is returning capital to shareholders and in the third quarter, we deployed $100 million to repurchase and retire 2.46 million shares under our share repurchase program. This brings our year-to-date share repurchases to $121 million and 2.89 million shares in total.

今年，我們完成了 10 次收購，並且繼續保持健康的收購態勢。我們的第二要務是向股東返還資本，第三季度，我們根據股票回購計畫部署了 1 億美元回購和註銷 246 萬股股票。這使得我們今年迄今的股票回購總額達到 1.21 億美元、289 萬股。

As of today, approximately $379 million remains under our existing share repurchase authorization. Before we head to Q&A, I'll wrap up my prepared remarks with a discussion our updated outlook for fiscal 2024 and a framework to consider for fiscal 2025.

截至今天，我們現有的股票回購授權金額仍約為 3.79 億美元。在我們進入問答環節之前，我將總結我的準備好的發言，討論我們對 2024 財年的最新展望以及 2025 財年的考慮框架。

The municipal repair and replacement portion of our business remains resilient and we continue to expect that our end markets will be stable for the remainder of fiscal 2024. We expect the pricing environment to remain sequentially stable and we believe our gross margins will sustain at current levels through the fourth quarter. But three quarters of the year behind us and considering our recent acquisitions, current backlogs, and order trends, we are raising our full year estimates for net sales and adjusted EBITDA.

我們業務的市政維修和更換部分依然保持彈性，我們繼續預期我們的終端市場在 2024 財年剩餘時間內將保持穩定。我們預計定價環境將保持連續穩定，並且我們相信我們的毛利率將在第四季度維持在當前水準。但今年已經過去了三個季度，考慮到我們最近的收購、當前的積壓訂單和訂單趨勢，我們上調了全年淨銷售額和調整後 EBITDA 的預期。

We now expect net sales to range from $7.35 billion to $7.45 billion and we expect adjusted EBITDA but that range from $915 million to $935 million. This will mark our 15 consecutive year of positive sales growth averaging approximately 10% annually over that period. The consistency of this growth would not be possible without our resilient business model, the diversified end market mix we've developed over the years, the targeted investments we are making to support and execute our growth initiatives and the expertise and dedication of our associates.

我們現在預計淨銷售額將在 73.5 億美元至 74.5 億美元之間，而我們預計調整後的 EBITDA 將在 9.15 億美元至 9.35 億美元之間。這將標誌著我們連續第 15 年實現銷售額正成長，在此期間，年均成長率約為 10%。如果沒有我們富有彈性的商業模式、多年來開發的多元化終端市場組合、為支持和執行成長計劃而進行的有針對性的投資以及我們員工的專業知識和奉獻精神，這種持續的成長是不可能實現的。

As we look beyond this year, our growth algorithm remains firmly intact. We plan to provide our outlook for fiscal 2025 during next quarter's earnings call. However, as we sit here today, we generally expect end market volumes will be positive next year depending on broader economic conditions including the effect of interest rate movements and progress on federal infrastructure funding. We are committed to driving 2 to 4 points of organic above market growth through the execution of our product, customer, and geographic expansion initiatives.

展望今年之後，我們的成長演算法依然牢固不變。我們計劃在下個季度的財報電話會議上提供 2025 財年的展望。然而，今天我們普遍預計，明年終端市場交易量將呈現正成長，這取決於更廣泛的經濟狀況，包括利率變動的影響和聯邦基礎設施融資的進展。我們致力於透過實施產品、客戶和地理擴展計劃，推動高於市場 2 至 4 個百分點的有機成長。

In terms of M&A we anticipate 2 points of growth from acquisitions that have already closed so far this year. We maintain a strong pipeline of acquisition opportunities and expect to remain acquisitive as we progress through the rest of this year and into next year. We're optimistic about our ability to achieve 30 to 50 basis points of adjusted EBITDA margin expansion annually through the execution of our initiatives and we will strive to do this while producing strong operating cash flow at a rate of 60% to 70% of adjusted EBITDA on an ongoing basis.

在併購方面，我們預計今年迄今已完成的收購將帶來 2 個點的成長。我們擁有強大的收購機會，並期望在今年剩餘時間和明年繼續保持收購動能。我們對透過執行計劃每年實現 30 至 50 個基點的調整後 EBITDA 利潤率擴張的能力充滿信心，我們將努力實現這一目標，同時持續以 60% 至 70% 的調整後 EBITDA 率產生強勁的經營現金流。

We will continue deploying capital on initiatives that will drive above market growth including executing on our M&A pipeline and delivering on our organic growth initiatives. We will maintain significant liquidity and balance sheet flexibility to continue driving shareholder value through share repurchases or dividends.

我們將繼續部署資本用於推動超越市場成長的計劃，包括執行我們的併購計劃和實現我們的有機成長計劃。我們將保持充足的流動性和資產負債表彈性，以繼續透過股票回購或股利來推動股東價值。

We have demonstrated that our business model is resilient and we can deliver strong results in any environment. We're looking forward to a strong finish of the year and helping our customers build more reliable infrastructure. At this time, I'd like to open it up for questions.

我們已經證明，我們的商業模式具有彈性，我們可以在任何環境下取得強勁的業績。我們期待今年能夠取得圓滿成功，並幫助我們的客戶建立更可靠的基礎設施。現在，我想開始回答大家的提問。

Thank you. (Operator Instructions) Kathryn Thompson, Thompson Research Group.

謝謝。（操作員指示）凱瑟琳湯普森，湯普森研究小組。

Oh, great. Thank you for taking my questions today. This first is just on, focusing on end markets in good first focus on the municipal end market in particular. You have current expectations for up low single digits for 2024 and not that we're necessarily looking for '25 guidance, but any thoughts on kind of the pace and momentum going into next year with large amounts of [IID] money still to be spent and municipalities granted are generally steadier versus in markets, but there could be some unique tail winds helping with that and market. And if you could have just a similar commentary on the non res market too, I guess the same backdrop. Thank you.

噢，太好了。感謝您今天回答我的問題。首先，重點關注終端市場，特別是市政終端市場。您目前預計 2024 年的成長幅度將達到個位數，但我們不一定在尋求 25 年的指引，但對於明年的速度和勢頭，您有何看法？如果您對非房地產市場也有類似的評論，我想背景是一樣的。謝謝。

Hey, thanks Kathryn for the question. Yeah, we saw really pretty stable and modest growth in municipal through the quarter and we saw the bidding activity and backlog continue to improve, really feel encouraged by what we're seeing. IAJ funds are starting to become a little bit more prominent out there.

嘿，感謝凱瑟琳提出這個問題。是的，我們看到本季市政工程確實相當穩定且適度的成長，我們看到競標活動和積壓訂單繼續改善，我們對所看到的情況感到鼓舞。IAJ 基金開始變得更加引人注目。

So we're seeing a number of projects that are really hitting the, going from drawing, the drawing table to ultimately being executed in projects which we think we will start delivering in 2025 and these projects vary from, what I would call large diameter bigger projects to some of the lead replacement pipes, which can be smaller dollars and a little less material for us. But it's good to start seeing those funds starting to flow through.

因此，我們看到許多項目都真正達到了預期目標，從繪圖到最終實施，我們認為這些項目將在 2025 年開始交付，這些項目各不相同，從我所說的大直徑大型項目到一些鉛替換管道，這些項目對我們來說可能花費較少的錢，所需的材料也較少。但看到這些資金開始流入是件好事。

So we're encouraged by what we're seeing with municipal very much in line with what we were anticipating along those lines. Non-residential has been good for us as well too. So we've certainly seen, roads and bridges and some of those areas continue to be strong. A lot of the big mega projects continue to be robust as we've seen some of the localized areas there in terms of our fire protection activity and along with underground work in those areas.

因此，我們對市政貸款的現狀感到鼓舞，它與我們的預期非常一致。非住宅對我們來說也很好。因此，我們確實看到，道路、橋樑和一些地區繼續保持強勁。許多大型專案繼續保持強勁勢頭，因為我們已經看到一些局部區域的消防活動以及這些區域的地下工程。

So those things have really helped pull through a lot of the storm drainage materials and in some of those products as well. So we'll continue to see that, non-residential. We talk about multi family, still struggling and still down, but that was anticipated. So overall, we're encouraged by what we're seeing in the end markets as we get into the fourth quarter and then start '25.

這些東西確實有助於輸送大量的雨水排水材料以及一些產品。因此，我們將繼續看到非住宅領域。我們談論的是多家庭問題，儘管它們仍然在苦苦掙扎，仍然處於低迷狀態，但這是預料之中的。因此總體而言，隨著我們進入第四季並開始進入25年，我們對終端市場的表現感到鼓舞。

So just stepping back and forth with, is it a fair test meant to say that momentum is generally better versus declining as you head into the next year?

因此，只是來回走動，這是一個公平的測試嗎，意味著進入下一年，勢頭總體上是更好的，而不是下降的？

It's stable. Yeah, definitely stable and we're definitely seeing some really good pockets particularly at municipal starting to gain some traction.

它很穩定。是的，絕對穩定，而且我們確實看到一些非常好的領域，特別是市政領域開始獲得一些關注。

Okay. And want to follow up just on the guidance raise, just clarification if I missed this in prepared commentary, apologies on my end. But in terms of the raise, how much was driven by acquisitions by the beat in the quarter or just a little bit better expectations. Just any color you can give just in terms of the breakout between those three buckets. Thank you.

好的。並且想要跟進指導意見的提高，如果我在準備好的評論中錯過了這一點，請澄清一下，我深感抱歉。但就加薪而言，有多少是受本季收購的推動，還是只是略好於預期？就這三個桶之間的區分而言，您可以給出任何顏色。謝謝。

Yeah, thanks, Kathryn. This is Mark. I appreciate the question. In terms of the guidance raise that we had, I'd say that was primarily due to the acquisitions that we closed subsequent to the last quarter's call. So we did have those acquisitions close and we added those to the guide. I'd say we had a little bit better beat than our internal expectations and roll that through into the guide as well. And, obviously, you heard Steve's comments about the outlook and how we're feeling about the balance of the year gave us confidence to roll that through and then a little bit more given the optimism on the end markets.

是的，謝謝，凱瑟琳。這是馬克。我很感謝你提出這個問題。就我們預期的上調而言，我認為這主要是由於我們在上個季度的電話會議之後完成的收購。因此，我們確實完成了這些收購，並將其添加到指南中。我想說，我們的業績比內部預期要好一些，這一點也寫入了指南中。顯然，您聽到了史蒂夫對前景的評論，以及我們對今年平衡的感受，這給了我們信心，讓我們有信心實現這一目標，而且考慮到終端市場的樂觀情緒，我們會有更多信心。

All right. Thank you so much.

好的。太感謝了。

Thanks Kathryn.

謝謝凱瑟琳。

Dave Manthey, Baird.

戴夫·曼西，貝爾德。

Yeah. Thank you. Good morning, everyone. First question it just feels like as we look into fiscal '25 it is feeling more like a normal year relative to your growth algorithm on slide 12. Could you just as you think about that, are there any unusual year-to-year factors on either growth or margin enhancement that we should consider as we look to model the next fiscal year?

是的。謝謝。大家早安。第一個問題，當我們回顧 25 財年時，感覺相對於投影片 12 上的成長演算法來說，它更像是一個正常年份。您能否想想，在規劃下一個財年時，是否存在一些對成長或利潤率提高有影響的不同尋常的年度因素需要我們考慮？

Yeah, thanks Dave. Yeah. In terms of '25 I think you're right on. That's how we're thinking about it at this point, obviously, still a little early yet, but definitely looking forward to a more typical year as we think about the end markets. We think those are going to be slightly positive as we sit here today. Good execution across the board on our initiatives that we've had this year. And I feel like that's going to play into next year really, really nicely into that 2 to 4 points of above market growth.

是的，謝謝戴夫。是的。就’25’而言，我認為你是對的。這就是我們目前的想法，顯然，現在還為時過早，但當我們考慮終端市場時，我們肯定會期待一個更典型的年份。我們認為，就我們今天所處的情況而言，這些將會略有正面意義。我們今年的各項措施都得到了良好的執行。我覺得這將在明年真正發揮良好作用，實現高出市場 2 到 4 個百分點的成長。

From a, let's say, an operating margin standpoint, fully expect to deliver on our commitment of adding 30 to 50 basis points operating margin next year and we've got some good momentum. You saw us increase gross margins sequentially from Q2 to Q3. And you know, in addition to that, our SG&A rate improved sequentially from last quarter as well. So, got some good momentum here going into the fourth quarter and you know, like what we're seeing so far for the markets in '25.

從營業利潤率的角度來看，我們完全有望兌現明年增加 30 至 50 個基點的營業利潤率的承諾，而且我們已經獲得了良好的發展勢頭。您看到我們的毛利率從第二季到第三季連續增加。你知道，除此之外，我們的銷售、一般及行政開支率也比上一季有所改善。因此，進入第四季度，這裡有一些良好的勢頭，就像我們迄今為止在 25 年的市場中看到的那樣。

Okay. And then second, a little bit more broad here. Obviously, we've been getting a lot of questions on Presidential policy and that sort of thing. Could you talk about both labour conditions and tariffs? I would assume labour just given the technical nature of your customers workforce, you probably don't have much in the way of immigration policy change risk there. But you could you take immigration policy change risk there. But could you talk about that? And then tariffs just if you could address the percentage of COGS that comes from Canada, Mexico, or other outside US?

好的。其次，這裡稍微寬泛一點。顯然，我們收到了許多有關總統政策和諸如此類的問題。能談談勞動條件和關稅嗎？我認為，僅考慮到您的客戶勞動力的技術性質，您可能不會面臨太多的移民政策變化風險。但你可以承擔移民政策改變的風險。但你能談談這個嗎？那麼，如果您能解決來自加拿大、墨西哥或美國以外地區的銷貨成本百分比問題，那麼關稅呢？

Yeah, Dave, really hard to predict what would happen in terms of a labour situation over there. If you -- my best guess is that we wouldn't see much of a change at all for the type of contractors that we're dealing with here. In regards to the tariffs, generally we view tariffs as a neutral to positive type impact for our business. Very little of our product. Most, the vast majority of our product is assembled and produced here in the United States less than 15% comes in as import and for our direct import that we do ourselves, it's less than 2%.

是的，戴夫，真的很難預測那邊的勞動力狀況會發生什麼事。如果你——我最好的猜測是，對於我們在這裡打交道的承包商類型，我們不會看到太大的變化。關於關稅，我們一般認為關稅對我們的業務產生中性到正面的影響。我們的產品非常少。我們的大多數產品都是在美國組裝和生產的，不到 15％ 是透過進口獲得的，而我們自己直接進口的，不到 2％。

So we generally don't see a huge impact from the tariffs. And if anything, it's, as we said, neutral to positive as we look at that going into this new administration.

因此，我們總體上不會看到關稅帶來巨大影響。而且如果有的話，正如我們所說的，當我們展望新政府時，它是中性到積極的。

Nigel Coe, Wolfe Research.

奈傑爾·科（Nigel Coe），沃爾夫研究公司。

Thanks. Good morning and Mark, I think you've just given 2025 guidance. So thanks for that. But yeah, so just taking a step back to 3Q, sales come in quite a bit better than what you expected. So I'm just curious, what drove the upside to your expectations and any thoughts on how much of the 2Q projects that were impacted by the weather came in and benefited 3Q?

謝謝。早安，馬克，我想你剛剛給了 2025 年的指導。非常感謝。但是，是的，回顧第三季度，銷售額比你預期的要好得多。所以我只是好奇，是什麼推動了您的預期，以及您認為第二季受天氣影響的專案有多少對第三季有益？

Yeah, thanks Nigel. In terms of the quarter, I would say it came in slightly better than our internal expectations. Obviously, we had a decent beat to consensus on the top line and EBITDA margins. But we were expecting a better construction cycle here in Q3 relative to the impacts that we saw in Q2. So we did see some of that release and into Q3, but it really got us back on trends that we're expecting and really we're expecting to see throughout the quarter.

是的，謝謝奈傑爾。就本季而言，我認為其業績略優於我們的內部預期。顯然，我們的營業收入和 EBITDA 利潤率超出預期。但相對於第二季的影響，我們預期第三季的建設週期會更好。因此，我們確實在第三季度看到了一些發布，但它確實讓我們回到了我們所預期的趨勢，我們確實期望在整個季度看到這種趨勢。

Gross margins came in nicely, like I mentioned, sequentially, we were expecting some improvement there, but, that probably came in slightly better as well than what we were expecting. So overall, we were pleased to see us get back on the trend lines that we expected to be for really this year outside of the impacts that we saw in Q2. Some of those projects, I'd say some of those projects have all released through there's probably a little bit more that we would expect in Q4, just depending on, how late the construction season goes, in particular in some of these northern geographies. So overall feel good with the performance in the quarter.

毛利率成長良好，正如我之前提到的，我們預計會有所改善，但實際上可能比我們預期的要好一些。因此總體而言，我們很高興看到，除了第二季的影響之外，我們又回到了今年預期的趨勢線上。其中一些項目，我想說其中一些項目已經全部發布，可能會比我們預期的第四季度多一點，這取決於施工季節有多晚，特別是在一些北部地區。因此總體來說，我對本季的表現感覺良好。

Great, thanks, Mark. And then on pricing, you comment sequentially stable into the fourth quarter. I'm curious, any perspectives on '25? Are we getting beyond now the fire protection price deflation reservation? And if you could maybe comment on the PVC pipes pricing environment, that's obviously a hot topic right now.

太好了，謝謝，馬克。然後關於定價，您評論說第四季度定價將保持穩定。我很好奇，對 '25 有什麼看法？我們現在已經超越消防產品價格通貨緊縮的界線了嗎？如果您可以對 PVC 管道定價環境進行評論，這顯然是目前的熱門話題。

Yeah, I'd say overall, as we sit here today, we're expecting really a neutral impact in 2025 with the pricing, I'd say no really significant contributors either positively or negatively for 2025. I'd say on the steel pipe side, we've seen that decline throughout 2024. We do think it kind of bottomed out in Q3. We start to see some momentum there, but we will have a headwind there as we get into the early part of the year.

是的，我想說總的來說，就我們今天所處的情況而言，我們預計 2025 年的定價影響實際上是中性的，我認為 2025 年不會出現真正重大的正面或負面影響。我想說，就鋼管方面而言，我們已經看到了整個 2024 年的下降趨勢。我們確實認為它在第三季已經觸底。我們開始看到一些發展勢頭，但是，進入年初，我們就會面臨阻力。

PVC again, less than 15% of our business, but has been relatively stable here throughout 2024. And, no real expectations for significant movement going into next year as we sit here today. So hopefully we got the steel pipe side on the fire protection behind us. And we're seeing some other good information coming in from various suppliers, good trends, and a lot of these product categories. So that's kind of what leads us to believe at this point that, neutral is a good estimate at this point for 20.

同樣，PVC 占我們業務的比重不到 15%，但在整個 2024 年一直相對穩定。而且，就我們今天所處的情況來看，我們對明年不會有重大變化並沒有真正的預期。所以我們希望鋼管側面的防火措施能夠落實。我們也看到來自各個供應商的一些其他好消息、良好的趨勢以及許多這樣的產品類別。因此，這在某種程度上使我們目前相信，對於 20 來說，中性是一個不錯的估計。

Mike Dahl, RBC Capital Markets.

加拿大皇家銀行資本市場 (RBC Capital Markets) 的 Mike Dahl。

Hi, thanks for taking my questions. I want to stick with the pricing environment for my first one. Obviously as Nigel said, it's a hot topic right now. Some of your -- some users of pipe, some suppliers of pipe, they do well, while pricing seems like it may not have gone significantly on the Muni side yet. I think there are still some comments out in the industry about expectations for a continued decline. So I think your comments probably stand out as a little bit different there Mark. So maybe you guys can give a little more color, specifically on the Muni side on what you're seeing, what you're hearing, what gives you the confidence that might be more stable through next year.

你好，謝謝你回答我的問題。我想堅持我的第一個定價環境。顯然，正如奈傑爾所說，這是現在的熱門話題。你們中的一些人——一些管道用戶、一些管道供應商，他們做得很好，但在市政債券方面的定價似乎還沒有顯著下降。我認為，業內仍然存在一些關於預期下滑持續的評論。因此，我認為你的評論可能與馬克有些不同。所以也許你們可以提供更多細節，特別是在市政債券方面，你們看到什麼，聽到什麼，什麼讓你們有信心明年可能會更加穩定。

Yeah, my good question. Obviously, a lot of attention on PVC, but I want to talk a little bit about what when we talk about stable pricing, what that really means for us. So most of our sales are project based. So our customers really are looking for us for a full suite of products associated to complete a project. So within that, there are numerous different product categories. Well beyond PVC pipe and so pricing itself is really based on a lot of different factors whether it's demand and competition in the local market, the complexity of the project, local specifications, and the price for which we procured the product.

是的，我問得好。顯然，人們對 PVC 給予了極大關注，但我想稍微談談當我們談論穩定定價時，這對我們真正意味著什麼。因此我們的大部分銷售都是基於項目的。因此，我們的客戶確實希望我們提供一整套與完成專案相關的產品。其中，有許多不同的產品類別。除了 PVC 管道之外，定價本身實際上還取決於許多不同的因素，無論是當地市場的需求和競爭、項目的複雜性、當地的規格以及我們採購產品的價格。

So when we talk about stable pricing, we're talking about stabilization across a lot of those different product categories. A lot of the different value that we can add into these projects in regards to the project management, the delivery, the quality of service, et cetera. And so when we talk about when we're seeing stable pricing environment, that's what we're talking about.

因此，當我們談論穩定定價時，我們談論的是許多不同產品類別的穩定。在專案管理、交付、服務品質等方面，我們可以為這些專案添加許多不同的價值。因此，當我們談論看到穩定的定價環境時，這就是我們所談論的。

As Mark mentioned less than 15% of our product is PVC related and many projects don't even have PVC associated with it. We're already starting to see -- most of our manufacturers are seeing increases in their cost. So we're already starting to see price increases for many different product categories coming in now for '25. So that's what gives us confidence right now for about a stable pricing environment.

正如馬克所提到的，我們的產品中不到 15% 與 PVC 相關，許多項目甚至與 PVC 無關。我們已經開始看到——我們的大多數製造商都面臨成本增加的情況。因此，我們已經開始看到25年許多不同產品類別的價格上漲。所以這就是我們現在對穩定的定價環境充滿信心的原因。

Okay. Yeah, that's really helpful. And I think that's the nuance we were looking for and that it's important for people to understand in terms of multi product jobs, service orientation and put it at a job level with stability. I guess the second question, you spent some time talking about the water treatment initiatives and obviously, that's part of a broader portfolio of growth initiatives that are building into your year above market growth expectations.

好的。是的，這確實很有幫助。我認為這就是我們所尋找的細微差別，對於人們來說，從多產品工作、服務導向的角度來理解這一點很重要，並將其置於穩定的工作水平上。我想第二個問題是，您花了一些時間談論水處理計劃，顯然，這是更廣泛的增長計劃的一部分，這些計劃在今年的增長超出了市場的增長預期。

Can you just give us there have been a couple different adjacency expansions help us kind of frame up like the opportunity and kind of a near and medium term as you think about some of the big ones like treatment plans like what's that specifically contributing to eager expectations around the '25 [gross]

您能否給我們舉幾個例子，看看是否存在一些不同的相鄰擴展，以幫助我們確定機會以及近期和中期機會，例如您考慮一些重大問題，例如治療計劃，這些計劃具體促成了人們對 25 年的熱切期望。

Yeah, we won't break that out specifically. But what I share with you is that over the last 10 years, we've really been building our capabilities in this space. It is very long cycle type work. A lot of the projects that are being executed now were ones that were, really, we're working on five plus years ago where we've gone through a lot of the design work initially with a lot of these contractors to help design and optimize the material flow to these projects. And these projects will carry on for generally have a duration for us once they're starting into the execution for multi years.

是的，我們不會具體闡述這一點。但我與你們分享的是，在過去的十年裡，我們確實一直在這領域建立我們的能力。這是一項週期非常長的工作。許多現在正在執行的項目實際上都是我們五年前就開始進行的項目，我們最初與許多承包商一起進行了大量設計工作，以幫助設計和優化這些項目的物料流。這些項目一旦開始執行，通常就會持續數年。

So that's why we like this business. It's one of those areas we've been able to invest in because we've got a long view on the industry, getting access to the products associated with this. These are specialty type products, specialty line products, all of them require special access and we've been able to build that capability over the last decade. And so we'll continue to see a lot of growth in that as the population expands and water treatment and wastewater facilities continue to expand and new ones being developed and designed, we're right there in the forefront of these things and have a long pipeline ahead of us for projects to execute on.

這就是我們喜歡這項業務的原因。這是我們能夠投資的領域之一，因為我們對這個行業有長遠的眼光，並且能夠獲得與此相關的產品。這些都是特種產品、特種線產品，所有這些都需要特殊途徑，而且我們在過去十年中已經能夠建立這種能力。因此，隨著人口的增長、水處理和廢水處理設施的不斷擴大以及新設施的開發和設計，我們將繼續看到大量的增長，我們在這些事情上處於領先地位，並且面前有長長的項目要執行。

Sam Reid, Wells Fargo.

富國銀行的薩姆·里德。

I wanted to ask if you could rank order and perhaps greater detail, the building blocks behind the sequential improvement in gross margin. And I know you've already touched on some of these, but maybe just put a finer point on any benefits from acquisition accretion versus some of your self-help initiatives like strategic sourcing and private label. And then apologies if I missed. But do you have an update on where private label this as a percent of COGS? Is it still at 2% or was there an increase in Q3 versus Q2?

我想問您是否可以對毛利率連續提升背後的基礎進行排序並更詳細地說明。我知道您已經談到其中的一些內容，但也許您能更詳細地闡述一下收購累積帶來的好處以及您的一些自助舉措，例如策略採購和自有品牌。如果我錯過了，請原諒。但是，您是否有關於自有品牌在 COGS 中所佔百分比的最新資訊？它仍然保持在 2% 嗎，或者第三季度相對於第二季度是否有所增加？

Yeah, thanks Sam. I'll take that one. In terms of the sequential improvement in gross margins, you saw we increased about 20 basis points since last quarter. I'd say in terms of the ranking there, the first and foremost was just strategic sourcing and some of the optimization work that we've done there made a lot of really good progress on that throughout the year and then probably ranked private label.

是的，謝謝薩姆。我要那個。就毛利率的連續改善而言，您會發現我們自上個季度以來增加了約 20 個基點。我想說，就那裡的排名而言，首先也是最重要的是戰略採購，我們在那裡所做的一些優化工作在全年取得了很多非常好的進展，然後可能是自有品牌的排名。

Second was a good contributor and we continue to make really good progress there. I'd say we're kind of in the range of 2% to 3% of COGS on private label. We've advanced that pretty well since we updated that figure last and we'll be providing some more detail on that in terms of how we wrap up the full year from a private label standpoint. And obviously expectations about where we think that can go. But I'd rank them there, sourcing optimization and private label. No real acquisition contribution sequentially. There we did have some benefit year-over-year from an M&A standpoint of gross margins but not a significant contributor sequentially.

第二位是一位出色的貢獻者，我們在那裡繼續取得良好的進展。我認為我們的自有品牌銷貨成本大約在 2% 到 3% 之間。自從我們上次更新該數據以來，我們在這方面取得了很大的進步，我們將從自有品牌的角度提供有關如何總結全年業績的更多細節。顯然，我們對它的進展抱持著期待。但我會將它們排在那裡，採購優化和自有品牌。連續沒有實際收購貢獻。從併購的角度來看，我們的毛利率確實比去年同期有所成長，但環比成長並不顯著。

Now that helps and then to follow up on the election question, another broad horn here. Any signs of, interest in onshoring given some of the policies of the incoming administration, some of the things they're looking to incentivize. And if we were to see, those large on type projects emerge, any sense as to when those projects would start to benefit your P&L specifically.

現在這有幫助，然後繼續討論選舉問題，這裡是另一個廣泛的問題。考慮到新政府的一些政策以及他們希望激勵的一些措施，是否有任何跡象表明企業對在岸外包感興趣？如果我們看到那些大型專案出現，那麼這些專案何時會開始對您的損益表產生具體益處呢？

Yeah. Sam, really way early innings on this one to really understand what our manufacturers sentiment would be about on shoring. I will share with you that the vast majority of our manufacturers are on shore today. It'll be interesting to see if there's other components or etcetera that they're looking at it may be on shoring, but it's hard to tell. We, I mean, we're just weeks into this thing and those cycles tend to take a little bit of planning on our manufacturer standpoint to do that. So, we'll see how that plays out, maybe have a little bit more color for you on the next quarter.

是的。薩姆，我們很早就開始了解我們的製造商對支撐的看法。我要告訴大家的是，今天我們絕大多數製造商都在岸上。看看他們是否正在考慮其他組件或等等，可能會很有趣，但很難說。我的意思是，我們才剛開始做這件事幾週，從製造商的角度來看，這些週期往往需要一點規劃才能做到這一點。因此，我們將觀察事態如何發展，也許下個季度會為您帶來更多細節。

Patrick Baumann, JPMorgan.

摩根大通的派崔克‧鮑曼 (Patrick Baumann)。

Hi, good morning. Thanks for taking my questions. Appreciate the 25m market and marketing pricing cost. I just (technical difficulty) you talk about what's been allocated out of that? I think it was $55 billion of funding for water. From IJ like what's still to come? Why it's been so slow to develop and kind of what's the upside to that low single digit growth rate when this comes ?

嗨，早安。感謝您回答我的問題。了解25米市場和行銷定價成本。我只是 (技術難度) 您說說已經分配了什麼嗎？我認為這是 550 億美元的水資源資助。從 IJ 來看還有什麼後續消息？為什麼發展這麼慢，當這種情況出現時，這種低個位數成長率有什麼好處？？

And then on non res. If you could comment on if you have exposure to data center development, what that might be and could that be a meaningful tell when for that non res market for you or not really just curious what you do from a data center perspective?

然後是非 res。如果您能評論一下您是否接觸過資料中心開發，那可能是什麼，這是否可以為非房地產市場提供一個有意義的啟示，或者只是好奇您從資料中心的角度做了什麼？

Yeah, thanks Pat. I appreciate the questions. I'll try to tick through those. But, on the IIJ funding, we still haven't seen a majority of that get down to the state level, the federal allocation there really needs to be pushed down and allocated into those state revolving funds. And then that's when the local municipalities can go in and access those funds. So there's still a lot more funding there to be allocated. But like, like Steve mentioned earlier, we are really optimistic with some of the movement we saw in particular this quarter with a lot more projects being bid and applied for funding there.

是的，謝謝帕特。我很感謝你們提出這些問題。我將盡力完成這些。但是，就 IIJ 資金而言，我們仍然沒有看到大部分資金流向州一級，那裡的聯邦撥款確實需要下放並分配到那些州循環基金中。然後地方市政當局就可以進入並使用這些資金。因此，還有大量資金可供分配。但是，就像史蒂夫之前提到的那樣，我們對本季看到的一些動向感到非常樂觀，那裡有更多項目正在競標和申請資金。

So I do expect that that momentum to continue and be it tail end for us as we get into 2025 as it relates to mega projects and data centers, I'd say we participate significantly in those. We've seen a lot of those projects all around the country. We participate in a lot of ways. Initially, with all of the infrastructure needed for water, sewer, storm drainage, there's a pretty significant amount of infrastructure that goes in and then, in some cases, there's a fire protection product that's addressable for us in those facilities.

因此，我確實希望這種勢頭能夠持續下去，並且當我們進入 2025 年時，它將是我們與大型專案和資料中心相關的尾聲，我想說我們會積極參與其中。我們在全國各地看到了很多這樣的計畫。我們以多種方式參與。最初，對於水、下水道、雨水排放等所有需要的基礎設施來說，有相當多的基礎設施需要投入，然後，在某些情況下，這些設施中需要我們提供的防火產品。

But that's been a good area of momentum that we've seen in the non-resi space and we'll continue to participate in those. We continue to see more and more of those pop up throughout the country and we're well positioned to capture that growth.

但我們發現非住宅領域發展勢頭良好，我們將繼續參與其中。我們不斷看到全國各地出現越來越多的這類企業，我們已準備好抓住這一成長機會。

On the $55 billion of funding from [IJ] is it like is 10% of that been allocated 20%? Do you have any sense of numbers? Is it 50% like how much is any sense on how much has been allocated so far?

在 [IJ] 提供的 550 億美元資金中，是否分配了 10% 或 20%？你有數字意識嗎？到目前為止已分配了多少，50% 是否合理？

Our best sense of that in terms of how much has been allocated roughly about a third of it at this point. So, still a lot of room there for additional funding group.

我們對此的最佳判斷是，目前已分配了大約三分之一。因此，對於額外的融資團體來說，仍然有很大的空間。

Okay. And then on the acquisition side my second question. You've now done a couple of deals for these I guess, distributors of instruments that utility locating the damage prevention equipment, that sort of thing. Can you provide a bit more color on these like what's the opportunity here to scale this across the network? Is this higher margin product set? Any more color you provide? I think it was green equipment and then the e-comm, the income that you talked about today.

好的。然後是關於收購方面的我的第二個問題。我想，你現在已經做了一些交易，分銷用於定位損害預防設備的儀器，諸如此類。您能否更詳細地介紹這些問題，例如，有哪些機會可以將其擴展到整個網路？這是利潤率較高的產品嗎？您還提供其他顏色嗎？我認為是綠色設備，然後是電子商務，也就是您今天談到的收入。

Yeah. Patrick, both of those are really good businesses in regards to doing a lot of the utility servicing type areas with line detection and things along those lines. We think now we cover a good number of states with getting access to that product, which is something that our, all of our customers are pulling through at this point. They've been buying it from other sources, we believe we can add a lot of value in this, and continue to do that.

是的。派崔克，這兩家公司都是非常好的公司，它們在許多公用事業服務領域都從事線路檢測和類似業務。我們認為，現在我們的產品已經涵蓋了相當多的州，這是我們所有客戶目前都在努力實現的目標。他們一直在從其他來源購買，我們相信我們可以從中增加很多價值，並繼續這樣做。

In the big scheme of things, it's probably not, something that we view as a multi-billion dollar market by any means, but it is a great complementary offering to what we're already serving and providing to our municipal customers across the board. And these utility detection devices are fairly technologically advanced, you can get into radar and different types of things that are just really useful right now as these municipalities are looking to locate services that quite frankly have been. You know, buried for 60 to 70 years, and help facilitate a lot of the replacement of the product and the pipe that's in there.

從總體來看，這可能不是一個我們認為的數十億美元的市場，但它是我們目前為市政客戶提供的服務和產品的一個很好的補充。這些公用設施檢測設備技術相當先進，可以使用雷達和不同類型的設備，這些東西現在真的很有用，因為這些市政當局正在尋找已經存在的服務。您知道，埋藏 60 到 70 年，有助於促進大量產品和管道的更換。

Joe Ritchie, Goldman Sachs.

高盛的喬·里奇。

Thanks, good morning, everyone. So I just want to maybe start by squaring your comments on organic growth. It seems like volumes are up, call it 4% to 5% this quarter. I know you have an extra week in the fourth quarter and it seems like the volumes x the 53 week. I think your guidance is implying slightly down. I just want to make sure I have that straight and if so anything you guys want to call out there.

謝謝，大家早安。因此，我可能首先想回答你對有機成長的評論。看起來交易量有所上升，本季成長了 4% 到 5%。我知道你在第四季有一周的額外時間，而且看起來就像是第 53 週的交易量。我認為你的指導暗示略有下降。我只是想確保我已經弄清楚了這一點，如果還有什麼你們想說的嗎？

Yeah, Joe you're pretty close on that in terms of the, mid, I'd say mid-single digit volume growth for the quarter. I'd say expectations that we've got embedded in the guide for Q4. Obviously, it's a much more of a seasonal quarter for us. So I'd say, more in the light, kind of call it neutral to slightly positive volumes in the fourth quarter. And then, obviously, depending on the seasonal impacts that we see that could move around a little bit the 53 week. That'll be worth somewhere in the 6 to 8 points of revenue growth in the quarter. So you get a little extra benefit there with the extra week.

是的，喬，就本季的中位數銷售成長而言，你的預測非常接近這個數字。我想說我們已經在第四季的指南中嵌入了這些期望。顯然，對我們來說，這是一個更具季節性的季度。因此，我認為，從更樂觀的角度來看，第四季的交易量可以稱之為中性到略微正成長。然後，顯然，這取決於我們看到的季節性影響，這可能會在 53 週內略有波動。這意味著本季的營收將成長 6 到 8 個百分點。因此，您可以透過額外的一周獲得一些額外的好處。

Okay, great. That's helpful, Mark. And then Steve maybe going back to your comments from earlier around the delay. You typically see when there's their storm related activity and the uptick that you see in your business, I guess from all of the other related issues that we've seen, this year. I mean, would you start to expect to see maybe some improvement or some bump in your business in the early parts of 2025, does that start to come in? Maybe even this quarter? Just any thoughts around that would be helpful.

好的，太好了。這很有幫助，馬克。然後史蒂夫也許會回顧你之前關於延遲的評論。您通常會看到，當發生與風暴相關的活動時，您的業務就會出現上升趨勢，我想，從我們今年看到的所有其他相關問題來看。我的意思是，您是否會開始預期在 2025 年初看到您的業務可能會出現一些改善或提升，這些會開始出現嗎？也許是本季？任何關於此的想法都會有幫助。

Yeah, we definitely could see something coming into '25. What I share with you is that in Q2, the weather related incidents we had were incredibly pervasive from Texas all the way up into Wisconsin, all the way up north into the upper Midwest. And that obviously had a huge impact on us in the second quarter. If you look at kind of what happened really in this third quarter with the hurricanes, the back to back hurricanes with Hilton, Helene, and Milton both of those were fairly localized and obviously caused a pause in some construction related activity that was happening there.

是的，我們確實可以看到 25 年將發生的事情。我想告訴大家的是，在第二季度，我們所遇到的與天氣有關的事件非常普遍，從德州一直延伸到威斯康辛州，再向北延伸到中西部北部。這顯然對我們第二季產生了巨大的影響。如果你看一下第三季颶風的實際情況，你會發現希爾頓、海倫和米爾頓這兩次接連的颶風都是局部性的，顯然導致那裡一些正在進行的建築相關活動暫停。

You know, we'll continue to see that evolve and stuff to release into the fourth quarter. And then in the medium and longer term, what we generally see are much more robust replacement of water and storm drainage systems across those areas that were impacted. Some of them were completely wiped out in the Carolinas and that's going to be a total rebuild in those areas for many of the utilities out there. So we'll continue to see some of that move into 2025 for sure.

你知道，我們將繼續看到它的發展和在第四季度發布的內容。從中期和長期來看，我們通常會看到受影響地區的供水和雨水排水系統得到更強大的替換。卡羅來納州的一些設施被徹底摧毀，這些地區的許多公共設施將需要徹底重建。因此，我們肯定會在 2025 年繼續看到這些變化。

Keith Hughes, Truist Securities.

基斯·休斯（Keith Hughes），Truist Securities。

Two questions. First on the unit. So we talked about this in several calls, but it was a pretty notable turnaround from the negative numbers you had in the second quarter. Would there any region that you would call out that was particularly strong during the period or any specific end user market around that third quarter number?

兩個問題。首先關於單位。因此，我們在幾次電話會議中討論了這個問題，但與第二季的負數相比，這是一個相當明顯的轉變。您能指出在此期間表現特別強勁的地區嗎？

Yes, thanks, Keith. In terms of the regions, I would say, the area that we were impacted by last quarter was really up and down through the central part of the US and in the third quarter, we definitely saw a construction resume in that area. So that was, really good to see for those parts of the country where they weren't able to complete a lot of that underground construction in Q2. So we did see that come back nicely.

是的，謝謝，基斯。就地區而言，我想說，上個季度對我們影響最大的地區實際上是美國中部地區，而在第三季度，我們確實看到該地區的建築業恢復了。因此，對於那些第二季未能完成大量地下建設的地區來說，這確實是個好消息。因此我們確實看到結果良好。

I'd say municipal also rebounded. We were pleased to see some of the starts get back online with the activity that we were expecting. It was a little tricky for us to call that last quarter and we're really pleased with how that came in the third quarter. Really resi and non-resi. I'd say both kind of came in, fairly stable and in line with what our expectations were. So those are the private areas that I'd highlight and call out.

我想說市政債也出現反彈。我們很高興地看到一些項目重新上線，並恢復了我們期待的活動。對我們來說，上個季度的業績有點難以預測，但我們對第三季的業績感到非常滿意。確實是 resi 和非 resi。我想說，兩種結果都相當穩定，符合我們的預期。所以這些是我想要強調和指出的私人領域。

Okay. And this has been referred to by several callers, but some of your suppliers have been receiving [subpoenas] around antitrust issues. Have you received or you party to any of this [subpoena] activity?

好的。有幾個來電者提到了這一點，但你們的一些供應商一直在收到有關反壟斷問題的傳票。您是否收到過或參與過任何此類[傳票]活動？

No, we have not received any subpoenas, anything along those lines and just to reiterate, we are not named as a defendant in any of those cases. We won't comment on anything regarding any of our suppliers and in terms of the activity that's happened and we hold by our statements that we made last quarter.

不，我們沒有收到任何傳票或類似的東西，而且重申一下，我們沒有被列為任何案件的被告。我們不會對任何有關我們的供應商以及已發生的活動發表評論，我們堅持我們上個季度所發表的聲明。

Anthony Pettinari, Citi .

安東尼·佩蒂納裡（Anthony Pettinari）。

Hi, good morning. I was wondering if you could talk a little bit about how the M&A pipeline looks in general for '25. And are you seeing any kind of increased competition for targets or maybe new potential buyers or valuations that maybe are less reasonable than you've seen in the past? And then just generally with net leverage 2.7 times, healthy, but a bit above the two times that you talked about at the Investor Day. Just wondering if you talk about, what level of leverage you're willing to go to and just how we should think about that maybe next year.

嗨，早安。我想知道您是否可以談談 25 年的併購管道整體情況。您是否發現目標公司的競爭加劇，或者出現了新的潛在買家，又或者估值不如過去那麼合理？總體而言，淨槓桿率為 2.7 倍，處於健康水平，但略高於您在投資者日談到的兩倍。只是想知道您是否願意談論，您願意採用什麼程度的槓桿，以及我們明年應該如何考慮這個問題。

Yeah, Anthony, I'll talk about the M&A pipeline. So, really everything that we've looked at so far this year and our pipeline that we got going into next year continues to remain very strong. Many cases that we're looking at these have been sole sourced deals that we've been working with directly with owners along those lines. We pride ourselves in being the acquirer of choice in this space. The multiples that we're looking at are right in line with traditionally what we have continued to execute on for the last several years.

是的，安東尼，我將談論併購通路。所以，實際上，我們今年迄今為止關注的所有事情以及我們明年的計劃仍然保持強勁。我們正在研究的許多案例都是單一來源的交易，我們一直直接與業主合作。我們很榮幸能成為該領域的首選收購者。我們所關注的倍數與我們過去幾年一直執行的傳統倍數一致。

So really don't see much change in that the pipeline has been robust as you saw this year and we've already executed 10 deals so far this year, continue to see a robust pipeline going into 2025 and would expect the same. Mark do you want to talk a little bit about leverage?

因此，實際上並沒有看到太大的變化，正如您今年所看到的，渠道一直很強勁，今年到目前為止我們已經執行了 10 筆交易，繼續看到強勁的渠道進入 2025 年，並​​且預計也會如此。馬克，你想談談槓桿嗎？

Yeah, Anthony. In terms of leverage, we're going to continue to maintain a conservative balance sheet with pretty significant liquidity throughout, we're obviously expecting to generate a pretty good amount right over $250 million of cash in the fourth quarter. So I believe we'll have ample capacity to continue on our M&A strategy, continue a balanced approach to capital allocation with, potential share repurchases and that sort of thing while maintaining leverage in a very reasonable line. And we laid out a target somewhere 1.5 to 3 turns for debt leverage and very confident we're going to stay within that guidance that we had put out.

是的，安東尼。在槓桿方面，我們將繼續維持保守的資產負債表，並始終保持相當可觀的流動性，我們顯然預計第四季度將產生相當可觀的超過 2.5 億美元的現金。因此，我相信我們有足夠的能力繼續執行我們的併購策略，繼續採取平衡的資本配置方式，進行潛在的股票回購等，同時將槓桿率保持在非常合理的水平。我們設定的債務槓桿目標為 1.5 到 3 倍，我們非常有信心我們會遵循我們所製定的指導方針。

Great. And then I just want to follow up. I mean, a lot of your M&A has been kind of about expanding the product offering, but I was just curious. Is there any kind of geographic white space or a region that you're looking to that you're looking to enter that are worth noting?

偉大的。然後我只是想跟進一下。我的意思是，你們的許多併購都是為了擴大產品供應，但我只是好奇。您是否正在尋找某種值得關注的地理空白領域或區域？

Yeah, the fill in areas that we've had, we continue to find great opportunities out there, we've done a number of bolt on acquisitions this year, we strengthened our positions in Arizona and Nevada even in Texas and some of these other areas. So there continues to be a lot of robust areas in these local markets to continue to do that. We also added in HM pipe products in Canada and so we continue to look at the map and where we're at and continue to find opportunities.

是的，在我們已經填補的領域中，我們繼續在那裡尋找巨大的機遇，今年我們進行了一些附加收購，我們加強了在亞利桑那州、內華達州甚至德克薩斯州和其他一些地區的地位。因此，這些本地市場仍有許多強勁領域可以繼續這樣做。我們還在加拿大增加了 HM 管道產品，因此我們繼續關注地圖和我們所在的位置並繼續尋找機會。

Some cases there's really good acquisition targets in there. And other cases, we find it a great opportunity to do the green fields that we've been rolling out as well too. So we'll look at it along those lines. A lot of space left for us to fill in, a lot of docs out there.

在某些情況下，其中確實存在很好的收購目標。在其他情況下，我們也發現這也是開展我們一直在推廣的綠地業務的絕佳機會。我們將從這個角度來看這個問題。還有很多空間需要我們填補，還有很多文件需要我們填寫。

Matthew Bouley, Barclays.

巴克萊銀行的馬修‧布萊 (Matthew Bouley)。

Good morning everyone. Thank you for taking the questions. Actually on that last point, Steve, you mentioned the greenfield. I think you opened a couple in the quarter and you mentioned that there's kind of a pipeline of priority markets going forward. So I guess what is the typical ramp time line of a Greenfield branch for you guys in terms of hitting kind of normal branch revenue and profitability? And I guess how many greenfield would you look to be opening in 2025. Thank you.

大家早安。感謝您回答這些問題。實際上，關於最後一點，史蒂夫，你提到了綠地。我覺得您在本季度開設了幾個分店，並且您提到未來將會有一系列優先市場。那我想問一下，從達到正常的分行收入和獲利能力來看，你們 Greenfield 分行的典型成長時間表是怎麼樣的呢？我猜 2025 年你會開放多少個綠地呢？謝謝。

Yeah, thanks Matthew. You know, in terms of the ramp on green fields, we're typically, I would say just from an earnings perspective, we're breaking even, within the first year and we're trying to ramp revenue to get to the typical branch size somewhere usually in years three to five. So it does take a little bit of time there to get mature in a market. But something we're very experienced in.

是的，謝謝馬修。您知道，就綠地擴張而言，我只想從盈利角度說，我們通常在第一年就實現收支平衡，並且我們試圖將收入提高到典型的分支機構規模，通常是在第 3 到第 5 年。因此，它確實需要一點時間才能在市場上成熟。但我們對此非常有經驗。

We've got a great track record for rolling those out. In terms of the pace, it's really dependent upon various factors. So we don't necessarily set a target for green fields, but it's definitely a contributor when we talk about 2 to 4 points of above market growth. It's been a contributor there and it'll continue to be a contributor as we move forward. So you should expect to see, continued announcements as we open up in new locations.

我們在推行這些計劃方面有著優異的成績。就速度而言，它確實取決於多種因素。因此，我們不一定為綠地設定目標，但當我們談論高於市場成長 2 到 4 個百分點時，它肯定是一個貢獻者。它一直是一個貢獻者，隨著我們前進，它將繼續成為一個貢獻者。因此，當我們在新地點開業時，您應該會看到持續的公告。

Okay. Thank you for that mark. And then secondly, I wanted to ask about sort of the near term margins and what that implies for 2025. I think you said gross margins should be kind of sequentially stable into the fourth quarter. I guess that implies that SG&A dollars might be flattish sequentially despite I guess lower sequential sales.

好的。謝謝你的標記。其次，我想問近期的利潤率以及這對 2025 年意味著什麼。我認為您說過毛利率在第四季應該會保持穩定。我猜這意味著儘管銷售額環比下降，但銷售、一般及行政開支可能環比持平。

I just wanted to check if that's the case and why that would be the case. But a as you get into the '25 and you talk about 30 to 50 basis points of annual EBITDA margin expansion given what's happening on SG&A right now, I mean, is the expectation for now that most of that margin expansion would be coming on the gross margin side. Thank you.

我只是想檢查是否確實如此以及為什麼會發生這種情況。但是，當你進入25年並考慮到現在銷售、一般和行政費用的情況時，你談到每年 EBITDA 利潤率擴大 30 到 50 個基點，我的意思是，目前預計大部分利潤率擴大將來自毛利率方面。謝謝。

Yeah. Matthew, in terms of the fourth quarter, you're correct that we expect about sequential gross margins into the fourth quarter. From an SG&A perspective. we'll lose a little bit of a leverage into the in the fourth quarter with the seasonal ramp down in sales. So the SG&A will be a little higher in the fourth quarter which is typical for us.

是的。馬修，就第四季而言，您說得對，我們預計第四季度的毛利率將環比增長。從銷售、一般及行政費用 (SG&A) 角度來看。隨著銷售額的季節性下降，我們在第四季會失去一點影響力。因此，第四季的銷售、一般及行政開支會略高一些，這對我們來說是正常的。

As you think about 2025, we're very committed to the 30 to 50 basis points of operating margin improvement. Now, that's going to come from, a couple of different areas, one obviously potentially gross margins and then SG&A productivity and I'd expect that, we'll be in a good position to expand both of those as we as we go into 2025. So I feel really good that we're going to get the productivity out of SG&A and continue to work on our gross margin initiatives that we played out.

展望 2025 年，我們致力於將營業利潤率提高 30 至 50 個基點。現在，這將來自幾個不同的領域，一個顯然是潛在的毛利率，然後是銷售、一般及行政開支生產率，我預計，當我們進入 2025 年時，我們將處於有利地位來擴大這兩個領域。因此，我很高興我們將從銷售、一般和行政費用中獲取生產力，並繼續致力於我們已經實施的毛利率計劃。

Got it. Thanks, Mark. Good luck guys.

知道了。謝謝，馬克。祝大家好運。

Andrew Obin, Bank of America.

美國銀行的安德魯‧奧賓 (Andrew Obin)。

Thank you. This is David Ridley Lane on for Andrew Obin. Just a quick sort of clarification question. What percentage of your revenue today is multi family? And I believe that's just to confirm that's included in your non-residential category. Correct ?

謝謝。這是安德魯·奧賓 (Andrew Obin) 的戴維·里德利·萊恩 (David Ridley Lane)。這只是一個簡單的澄清問題。您今天的收入有多少比例來自多戶家庭？我相信這只是為了確認這包含在非住宅類別中。正確的？

Yeah, that's right. David, we grew a multi-family into non-residential primarily because, we do a lot of other commercial work as well and it fits a little better into that bucket for us, but it's, I'd say less than 5% of our sales fit into that multi family. It's we do some of the obviously the water sewer, storm drainage around those facilities and then usually there's quite a bit of fire protection component in those types of projects. So that's really the what makes up the majority of that participation in that end market.

是的，沒錯。戴維，我們將多戶型住宅發展為非住宅住宅的主要原因是，我們還做了很多其他的商業工作，它對我們來說更適合這個類別，但我想說，只有不到5%的銷售額適合多戶型住宅。我們顯然會對這些設施周圍的下水道、雨水排放進行一些工程，而且通常在這些類型的項目中會有相當多的防火組件。所以這其實就是終端市場參與的主體。

Got it. And just to put a I know this has been asked before but just to put a finer point on it. So last quarter, you said you lost about $50 million of revenue from the weather. I did check this quarter, a lot drier. So did you catch up on the full $50 million in the third quarter or do you think that was less than that?

知道了。我知道這個問題之前已經有人問過了，但只是想更詳細地闡述一下。您說上個季度因天氣原因損失了約 5,000 萬美元的收入。我確實檢查過這個季度，乾燥得多。那麼，您在第三季是否已經追回了全部 5,000 萬美元，或者您認為還少於這個數字？

Well, we think, sequentially it was obviously a much better construction quarter. So we got back on to the trend lines that, that we were expecting to have for the Q3. In terms of the projects, it's always difficult to tell exactly that any of those bump ahead of other projects. But we do feel like a majority of that was that we achieved a lot of that in the quarter, there's probably some more to come yet and in Q4 or that would get pushed into 2025.

嗯，我們認為，從連續性來看，這顯然是一個好得多的建築季度。因此，我們回到了我們預計第三季的趨勢線。就專案而言，很難確切地說其中任何一個專案是否比其他專案更勝一籌。但我們確實覺得，其中大部分是我們在本季實現的，可能還會有更多目標在第四季實現，或是推遲到 2025 年。

But I think about it sequentially, it was an improvement from Q2. If you think about the benefit of its year-over- year, Q3 last year was a decent, construction quarter, generally the weather was fine. So really not as much year-over-year benefit, but obviously helped us sequentially from .

但我按順序考慮，這比第二季度有所改善。如果你考慮一下同比效益，去年第三季度是一個不錯的建築季度，整體來說天氣很好。因此，與去年同期相比，收益確實沒有那麼大，但顯然對我們有幫助。。

Got it. Thank you very much.

知道了。非常感謝。

Thank you. At this time we have no further questions. I'll hand back to Stephen LeClair for any further remarks.

謝謝。目前我們沒有其他問題。我將把進一步的評論轉交給史蒂芬·勒克萊爾 (Stephen LeClair)。

Thank you all again for joining us today. Our third quarter performance highlights our resilience, adaptability, and commitment to operational excellence. We achieved record sales and maintain strong operational performance underscoring the strength of our business model and our ability to drive growth. By combining our local expertise with our national scale and innovative product offerings, we continue to deliver exceptional value to our customers and stakeholders.

再次感謝大家今天的參與。我們的第三季業績凸顯了我們的韌性、適應性和對卓越營運的承諾。我們實現了創紀錄的銷售額並保持了強勁的營運業績，凸顯了我們的商業模式的實力和推動成長的能力。透過將我們的本地專業知識與全國規模和創新產品相結合，我們將繼續為客戶和利害關係人提供卓越的價值。

Looking ahead, we remain focused on addressing our customers' critical infrastructure needs as the nation grapples with a widening GAAP between water supply and demand. With significant federal investments on the horizon, we are well positioned to capture long term growth opportunities that exist while delivering sustainable margin expansion and value creation.

展望未來，隨著國家努力解決水資源供需差距日益擴大的問題，我們仍將專注於滿足客戶的關鍵基礎設施需求。隨著聯邦政府即將進行大規模投資，我們已準備好抓住現有的長期成長機會，同時實現可持續的利潤擴張和價值創造。

We are energized by the opportunities that lie ahead and are confident in our ability to drive meaningful progress across our strategic priorities. Thank you for your support. We look forward to building on our success in the quarters to come.

未來的機會讓我們充滿活力，我們有信心有能力推動策略重點取得有意義的進展。感謝您的支持。我們期待在未來幾季取得更大成功。

Operator that concludes our call.

接線員結束了我們的通話。

Thank you all for joining today. You may now disconnect your lines.

感謝大家今天的參加。現在您可以斷開線路了。