CSW Industrials Inc (CSW) 2023 Q4 法說會逐字稿

Greetings, and welcome to CSW Industrials Fourth Quarter and Full Year Fiscal 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加 CSW Industrials 2023 財年第四季度和全年收益電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

At this time, I'd like to turn the conference over to your host, Alexa Huerta. Thank you. You may begin.

現在，我想將會議交給主持人 Alexa Huerta。謝謝。你可以開始了。

Thank you, Rob. Good morning, everyone, and welcome to the CSW Industrials Fiscal 2023 Fourth Quarter Earnings Call. Joining me today is Joseph Armes, Chairman, Chief Executive Officer and President of CSW Industrials; and James Perry, Executive Vice President and Chief Financial Officer. We issued our earnings release presentation and Form 10-K prior to the market's opening today, which are available on the Investor portion of our website at www.cswindustrials.com. This call is being webcast and information on accessing the replay is included in the earnings release.

謝謝你，羅布。大家早上好，歡迎參加 CSW Industrials 2023 財年第四季度收益電話會議。今天與我一起出席的是 CSW Industrials 董事長、首席執行官兼總裁 Joseph Armes；和執行副總裁兼首席財務官詹姆斯·佩里。我們在今天開盤前發布了收益報告和 10-K 表格，可在我們網站 www.cswinduscials.com 的投資者部分獲取。該電話會議正在網絡直播，有關訪問重播的信息包含在收益發布中。

During this call, we will make forward-looking statements. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Actual results could materially differ because of factors discussed today in our earnings release, in the comments made during this call as well as the risk factors identified in our annual report on Form 10-K and other filings with the SEC. We do not undertake any duty to update any forward-looking statements.

在本次電話會議中，我們將做出前瞻性陳述。這些陳述基於當前的預期和假設，受到各種風險和不確定性的影響。由於我們今天在財報中討論的因素、本次電話會議中發表的評論以及我們在 10-K 表格年度報告和向 SEC 提交的其他文件中確定的風險因素，實際結果可能會存在重大差異。我們不承擔更新任何前瞻性陳述的責任。

I will now turn the call over to Joe.

我現在將把電話轉給喬。

Thank you, Alexa. Good morning, and thank you for joining our fiscal fourth quarter conference call. I'm pleased to report that in fiscal 2023, we continued our successful track record of delivering exceptional performance. Our commitment to treat our employees well, to serve our customers well and to manage our supply chains effectively drove exactly the kind of growth in revenues and profitability that we had hoped for.

謝謝你，亞歷克斯。早上好，感謝您參加我們的第四財季電話會議。我很高興地向大家報告，在 2023 財年，我們繼續保持了提供卓越績效的成功記錄。我們致力於善待我們的員工，為我們的客戶提供良好的服務，並有效地管理我們的供應鏈，這正是我們所希望的收入和盈利能力的增長。

Fiscal 2023 represented another record year of revenue EBITDA and earnings per share. Today, we reported record revenue of $758 million, 21% growth over the prior year. Organic growth represented 15.3% of the total growth with the balance coming from our recent acquisitions, all of which are reported in our Contractor Solutions segment. EBITDA reached a record $174 million or 31% growth over the prior fiscal year.

2023 財年的 EBITDA 收入和每股收益再創新高。今天，我們公佈了創紀錄的收入 7.58 億美元，比上一年增長 21%。有機增長佔總增長的 15.3%，其餘部分來自我們最近的收購，所有這些都在我們的承包商解決方案部門中報告。 EBITDA 達到創紀錄的 1.74 億美元，比上一財年增長 31%。

Finally, our record EPS was $6.20, an increase of 41% compared to $4.39 as adjusted in the prior fiscal year. These record results are attributable to our diversified business model, disciplined capital allocation and commitment to operational excellence which drove impressive operating leverage despite global and financial market uncertainties.

最後，我們創紀錄的每股收益為 6.20 美元，與上一財年調整後的 4.39 美元相比增長了 41%。這些創紀錄的業績歸功於我們多元化的業務模式、嚴格的資本配置和對卓越運營的承諾，儘管全球和金融市場存在不確定性，但這些因素仍推動了令人印象深刻的運營槓桿。

As compared to the prior year, sales increased in all 3 segments, driven by positive pricing actions and growth from our acquisitions. Our Contractor Solutions segment achieved record sales of $514 million, including record HVAC/R end market sales of $418 million an $83 million or 25% increase in our HVAC/R sales, including organic growth of $51 million despite a slight decline in unit volume.

與上一年相比，在積極的定價行動和收購增長的推動下，所有三個細分市場的銷售額均有所增長。我們的承包商解決方案部門實現了創紀錄的銷售額 5.14 億美元，其中 HVAC/R 終端市場銷售額創紀錄地達到了 4.18 億美元，HVAC/R 銷售額增長了 8300 萬美元，即 25%，其中儘管銷量略有下降，但有機增長了 5100 萬美元。

Our contractor solutions team deserves recognition for exceeding our expectations again this year while successfully integrating multiple acquisitions and managing significant challenges presented by inflation and supply chain constraints. I want to congratulate and thank Don Sullivan and his team, including Jeff Underwood, the segment's Senior Vice President for sales and marketing for their extraordinary performance in fiscal 2023.

我們的承包商解決方案團隊今年再次超出了我們的預期，同時成功整合了多項收購併應對了通貨膨脹和供應鏈限制帶來的重大挑戰，值得認可。我要祝賀並感謝 Don Sullivan 及其團隊（包括該部門負責銷售和營銷的高級副總裁 Jeff Underwood）在 2023 財年的出色表現。

In recognition of this team's hard work, I'm pleased to share that we were recently named Supplier of the Year by Johnstone Supply, which is their only external vendor award that is given each year.

為了表彰該團隊的辛勤工作，我很高興與大家分享，我們最近被 Johnstone Supply 評為年度供應商，這是他們每年頒發的唯一外部供應商獎項。

Our Engineered Building Solutions segment grew by $7 million or 7%. Scott Stratton and his team effectively promoted existing and newly developed products and maintained market share gains due to competitive lead times successfully overcoming the commercial construction end market decline during our fiscal 2021 and 2022.

我們的工程建築解決方案部門增長了 700 萬美元，即 7%。 Scott Stratton 和他的團隊有效地推廣了現有和新開發的產品，並由於具有競爭力的交貨時間成功克服了 2021 財年和 2022 財年商業建築終端市場的下滑而保持了市場份額的增長。

As a result of the EBS team's productive commercial efforts, this segment's backlog as of the end of 2023 achieved an all-time high and then reached another all-time high by the end of April, signaling a tailwind into fiscal 2024.

由於 EBS 團隊富有成效的商業努力，截至 2023 年底，該細分市場的積壓訂單創下歷史新高，並在 4 月底再創歷史新高，標誌著 2024 財年的順風順水。

Our Specialized Reliability Solutions segment achieved record revenue of $147 million, which represents $31 million of organic revenue growth or 27% and as demand strengthened in all end markets served and commercial and operational execution improved significantly.

我們的專業可靠性解決方案部門實現了創紀錄的 1.47 億美元收入，這意味著有機收入增長了 3100 萬美元，即 27%，而且隨著所服務的所有終端市場的需求增強以及商業和運營執行力顯著改善。

In fact, segment revenue in the current fiscal year exceeded fiscal 2021 by an impressive 88% or $69 million. Since Mark Bass joined CSWI in June of 2021, he and his team have enhanced our competitive position within the marketplace, and have strategically addressed the demand for our market-leading, highly specialized products. On the heels of this solid execution in fiscal 2023, we remain confident in our ability to achieve further growth and strong margins in fiscal 2024.

事實上，本財年的部門收入比 2021 財年高出 88%，即 6900 萬美元，令人印象深刻。自 Mark Ba​​ss 於 2021 年 6 月加入 CSWI 以來，他和他的團隊增強了我們在市場中的競爭地位，並戰略性地滿足了對我們市場領先、高度專業化產品的需求。繼 2023 財年的穩健執行之後，我們對在 2024 財年實現進一步增長和強勁利潤率的能力仍然充滿信心。

During the last fiscal year, we executed on all aspects of our capital allocation strategy, investing $58 million in acquisitions, including Falcon, Cover Guard and AC Guard as well as $14 million in capital expenditures. We returned an aggregate of $46 million of cash to our shareholders through our share repurchase program and dividends. Subsequent to fiscal year-end, the Board approved a 12% increase in our quarterly dividend to $0.19 per share, signaling our confidence in the business and in our ability to generate cash.

在上一財年，我們執行了資本配置策略的各個方面，投資了 5800 萬美元用於收購，包括 Falcon、Cover Guard 和 AC Guard，以及 1400 萬美元的資本支出。我們通過股票回購計劃和股息向股東返還了總計 4600 萬美元的現金。財政年度結束後，董事會批准將我們的季度股息增加 12% 至每股 0.19 美元，這表明我們對業務和產生現金的能力充滿信心。

On the M&A front, I'm pleased to report that all of our acquisitions during fiscal 2023 are progressing well. I'm impressed with the efficient integration of all of our acquisitions. And our ability to offer these new products to our broad base of distribution customers, adding vitality to our portfolio of products. Our M&A strategy remains active with many of the best ideas and opportunities generated organically from within our organization.

在併購方面，我很高興地報告，我們 2023 財年的所有收購均進展順利。我們所有收購的高效整合給我留下了深刻的印象。我們有能力向廣泛的分銷客戶群提供這些新產品，為我們的產品組合增添活力。我們的併購戰略仍然活躍，許多最好的想法和機會都是從我們的組織內部有機產生的。

Our capital allocation decisions remain focused on maximizing shareholder value on a risk-adjusted returns basis. This disciplined approach favors our current platforms, serving the same customers and end markets through our extensive distribution channels. Inorganic growth remains a key strategic initiative and we continue to maintain an active pipeline of acquisition opportunities. The strength of our balance sheet and access to capital provides ample capacity to act decisively and quickly on acquisitions as opportunities arise.

我們的資本配置決策仍然側重於在風險調整回報的基礎上實現股東價值最大化。這種嚴格的方法有利於我們當前的平台，通過我們廣泛的分銷渠道為相同的客戶和終端市場提供服務。無機增長仍然是一項關鍵的戰略舉措，我們繼續保持積極的收購機會渠道。我們的資產負債表實力和資本獲取能力提供了充足的能力，可以在機會出現時果斷、迅速地採取收購行動。

Each quarter, we provide an update on our commitment to treat our employees well. This quarter, I would like to focus on our pay-for-performance culture. For fiscal year 2023, our Board of Directors has once again approved annual performance bonus and profit sharing incentive payments.

每個季度，我們都會更新我們善待員工的承諾。本季度，我想重點關注我們的績效工資文化。對於 2023 財年，我們的董事會再次批准了年度績效獎金和利潤分享激勵付款。

As we have reported previously, all domestic employees are eligible participants in our employee stock ownership plan, or ESOP, which results in direct alignment of interest with our shareholders. Our profit sharing programs in fiscal 2023 included an 8% ESOP contribution, plus a 3% discretionary 401(k) contribution which is in addition to our standard 401(k) participant match of 6%.

正如我們之前報導的，所有國內員工都有資格參與我們的員工持股計劃（ESOP），這使得我們的利益與股東直接一致。我們在 2023 財年的利潤分享計劃包括 8% 的 ESOP 捐款，加上 3% 的酌情 401(k) 捐款，這是在我們 6% 的標準 401(k) 參與者匹配之外的。

Of note, our 401(k) plan also boast a 96% participation rate which is significantly higher than the recognized industry benchmark. Providing for a safe, secure and dignified retirement along with aligning interest with our employees through our competitive profit-sharing programs are some of the ways we strive to be an employer of choice, attracting and retaining quality talent.

值得注意的是，我們的 401(k) 計劃還擁有 96% 的參與率，遠高於公認的行業基準。提供安全、有保障和有尊嚴的退休生活，並通過具有競爭力的利潤分享計劃與員工的利益保持一致，是我們努力成為首選雇主、吸引和留住優質人才的一些方式。

In fact, as a result of maintaining a consistent focus on our employee-centric culture, we continue to exceed industry standards and retention rates. Recently, approximately 79% of our employees participated in our fiscal 2023 engagement survey conducted through Great Place to Work, which showed that our engagement scores remain high, and we were pleased to announce in January of this year that we received The Great Place to Work certification.

事實上，由於始終堅持以員工為中心的文化，我們不斷超越行業標準和保留率。最近，我們約 79% 的員工參與了通過 Great Place to Work 進行的 2023 財年敬業度調查，這表明我們的敬業度得分仍然很高，我們很高興在今年 1 月宣布，我們獲得了 Great Place to Work 的敬業度調查認證。

Our products remain in high demand and our team is working diligently to treat our employees well, serve our customers well and manage our supply chains effectively. And I truly believe that our collective efforts have positioned the company for long-term sustainable growth and profitability.

我們的產品需求量仍然很大，我們的團隊正在努力工作，善待我們的員工，為我們的客戶提供良好的服務，並有效地管理我們的供應鏈。我堅信，我們的集體努力使公司實現了長期可持續增長和盈利。

At this time, I'll turn the call over to James for a closer look at our results.

此時，我會將電話轉給詹姆斯，以便仔細查看我們的結果。

Thank you, Joe, and good morning, everyone. Our consolidated revenue during fiscal fourth quarter 2023 was $196 million, a 13% increase compared to the prior year period. Consolidated gross profit in the fiscal fourth quarter was $85 million, representing 18% growth with the incremental profit resulting predominantly from pricing initiatives and the multiple acquisitions that we made during the year.

謝謝你，喬，大家早上好。 2023 財年第四季度我們的合併收入為 1.96 億美元，比上年同期增長 13%。第四財季的綜合毛利潤為 8500 萬美元，增長 18%，增量利潤主要來自定價舉措和我們在這一年中進行的多次收購。

Gross profit margin was 44% as compared to 42% in the prior year period. The gross profit margin increase resulted predominantly from positive pricing actions across our 3 segments. The operating expense margin, defined as operating expense as a percentage of revenue was 23%, an improvement of 180 basis points compared to the prior year period.

毛利率為 44%，去年同期為 42%。毛利率的增長主要歸功於我們三個部門的積極定價行動。營業費用利潤率（定義為營業費用佔收入的百分比）為 23%，比上年同期提高了 180 個基點。

Fiscal fourth quarter EBITDA increased 33% to $49 million as compared to the prior year period. Our EBITDA margin was 25% as compared to 21% in the prior year fourth quarter, with the improvement due primarily to the higher gross profit margin and discipline around operating expenses.

第四財季 EBITDA 較上年同期增長 33%，達到 4,900 萬美元。我們的 EBITDA 利潤率為 25%，而去年第四季度為 21%，這一改善主要是由於更高的毛利率和運營費用方面的紀律。

Reported net income attributable to CSWI the fiscal 2023 4th quarter increased to $27 million or $1.74 per diluted share compared to $18 million or $1.17 in the prior year period.

報告稱，2023 財年第四季度歸屬於 CSWI 的淨利潤增至 2700 萬美元，即稀釋後每股收益 1.74 美元，而上年同期為 1800 萬美元，即每股稀釋收益 1.17 美元。

Now I will transition to a discussion of our segments. Our Contractor Solutions segment with $134 million of revenue, accounted for 68% of our consolidated total and delivered $14 million or 11% of growth as compared to the prior year quarter. Comprised of organic revenue growth of $9 million and inorganic growth of $4 million from our recent acquisitions. Quarterly segment EBITDA was $43 million, a 32% margin. Compared to $35 million, a 29% margin in the prior year period. This margin growth is a testament to the disciplined pricing actions and strong operating management in the segment.

現在我將討論我們的部分。我們的承包商解決方案部門的收入為 1.34 億美元，占我們合併總額的 68%，與去年同期相比增長了 1400 萬美元，即增長 11%。其中包括我們最近收購帶來的 900 萬美元的有機收入增長和 400 萬美元的無機收入增長。季度 EBITDA 為 4,300 萬美元，利潤率為 32%。與去年同期的 3500 萬美元相比，利潤率提高了 29%。這種利潤增長證明了該領域嚴格的定價行為和強大的運營管理。

Our Engineered Building Solutions segment revenue grew to $25 million, a 5% increase compared to $24 million in the prior year period. EBITDA was $3.1 million or 12% of fiscal 2023 4th quarter revenue, a 43% increase from $2.2 million or 9% of fiscal 2022 4th quarter revenue. As a favorable project mix, this further supported by a reduction in operating expenses.

我們的工程建築解決方案部門收入增長至 2500 萬美元，比上年同期的 2400 萬美元增長 5%。 EBITDA 為 310 萬美元，佔 2023 財年第四季度收入的 12%，比 220 萬美元（佔 2022 財年第四季度收入的 9%）增長了 43%。作為有利的項目組合，運營費用的減少進一步支持了這一點。

Bidding and booking trends continue to demonstrate strength as our year-to-date bookings and backlog increased by approximately 24% and 36%, respectively, as compared to the prior year period. As of the end of the fiscal 2023 4th quarter, our book-to-bill ratio for the trailing 4 quarters in this segment improved to 1.2:1, leading to a record backlog.

投標和預訂趨勢繼續表現強勁，今年迄今的預訂量和積壓訂單量較上年同期分別增加了約 24% 和 36%。截至 2023 財年第四季度末，我們該領域過去 4 個季度的訂單出貨比改善至 1.2:1，導致積壓創歷史新高。

Our Specialized Reliability Solutions segment posted organic revenue growth of $8 million or 25% due to incremental sales volumes from both our legacy Whitmore business and the Shell Whitmore joint venture. Along with pricing actions that continue to provide tailwinds. Segment EBITDA and EBITDA margin improved significantly to $8.2 million and 21% in the fiscal 2023 4th quarter compared to $5.3 million and 17% in the prior year period. This represented an impressive EBITDA growth of 55%.

由於我們的傳統惠特莫爾業務和殼牌惠特莫爾合資企業的銷量不斷增加，我們的專業可靠性解決方案部門的有機收入增長了 800 萬美元，即 25%。加上繼續提供順風的定價行動。 2023 財年第四季度，該部門的 EBITDA 和 EBITDA 利潤率大幅提高至 820 萬美元和 21%，而去年同期為 530 萬美元和 17%。這意味著 EBITDA 增長了 55%，令人印象深刻。

Turning now to our fiscal full year results. We achieved a record consolidated revenue of $758 million, representing 21% growth as compared to fiscal 2022, with all segments reporting organic growth.

現在轉向我們的全年財政業績。我們實現了創紀錄的合併收入 7.58 億美元，與 2022 財年相比增長了 21%，所有部門均實現了有機增長。

Consolidated gross profit in the current year was $318 million, representing 24% growth with the incremental profit resulting predominantly from pricing initiatives and the multiple acquisitions that we made during the year. Gross profit margin of 42% was on par with the adjusted gross profit from the prior year.

本年度綜合毛利潤為 3.18 億美元，增長 24%，增量利潤主要來自定價舉措和我們年內進行的多項收購。毛利率為42%，與上年調整後毛利潤持平。

Despite the inflation in acquisitions, the operating expense margin of 24% showed an improvement of 170 basis points compared to the prior year period, demonstrating the discipline and effectiveness in our management of operating expenses.

儘管收購價格上漲，但 24% 的運營費用利潤率比去年同期提高了 170 個基點，這表明我們在運營費用管理方面的紀律性和有效性。

In the current year, we reported a 31% increase in EBITDA to a record $174 million, equating to a margin of 23% as compared to an adjusted $133 million and 21% in the prior year. These results translated into record EPS of $6.20 an increase of 41% compared to an adjusted $4.39 in the prior year.

今年，我們的 EBITDA 增長了 31%，達到創紀錄的 1.74 億美元，相當於上一年調整後的 1.33 億美元和 21% 的利潤率為 23%。這些結果轉化為創紀錄的每股收益 6.20 美元，與上一年調整後的 4.39 美元相比增長了 41%。

Our Contractor Solutions segment with $514 million of revenue accounted for 68% of our consolidated total and delivered $97 million or 23% growth. This was comprised of organic growth of $61 million and inorganic growth of $36 million from our acquisitions. Segment EBITDA increased 24% to $153 million, a 30% margin compared to $124 million and a margin of 30% in the prior year.

我們的承包商解決方案部門收入為 5.14 億美元，占我們合併總收入的 68%，並實現了 9700 萬美元或 23% 的增長。其中包括 6100 萬美元的有機增長和收購帶來的 3600 萬美元的無機增長。部門 EBITDA 增長了 24%，達到 1.53 億美元，與上一年的 1.24 億美元和 30% 利潤率相比，利潤率提高了 30%。

Continuing to our Engineered Building Solutions segment, which accounted for approximately 14% of our consolidated total with $104 million of revenue in the current fiscal year. This reflected a 7% increase over the prior year. Segment EBITDA was $14 million, a margin of 14% and an improvement from segment EBITDA of $13 million and a margin of 13% in the prior year period.

繼續我們的工程建築解決方案部門，該部門約占我們合併總額的 14%，本財年收入為 1.04 億美元。這比上一年增長了 7%。分部 EBITDA 為 1,400 萬美元，利潤率為 14%，較去年同期的 1,300 萬美元分部 EBITDA 和 13% 有所改善。

Our Specialized Reliability Solutions segment posted impressive organic revenue growth of 27% or $31 million due to incremental sales volumes driven by strengthening in market dynamics, price initiatives and increased volumes through the Shell Whitmore joint venture. Segment EBITDA and EBITDA margin improved to $26 million and 18% compared to $15 million and 13% in the prior year.

我們的專業可靠性解決方案部門的有機收入增長了 27%，即 3100 萬美元，這是由於市場動態增強、價格舉措以及通過殼牌惠特莫爾合資企業增加銷量所推動的銷量增加。部門 EBITDA 和 EBITDA 利潤率分別從上一年的 1500 萬美元和 13% 提高至 2600 萬美元和 18%。

On our fiscal 2023 1st quarter call, we affirmed our commitment to strong free cash flow generation, prudent working capital management and maintaining sufficient liquidity to support our strategic objectives. We ended the fiscal 2023 year with $18 million of cash and reported cash flow from operations of $121 million, a 76% increase over the prior year. This was due to increased profit and improved management of working capital as compared to the prior year.

在 2023 財年第一季度電話會議上，我們重申了對強勁自由現金流產生、審慎營運資本管理和保持充足流動性以支持我們戰略目標的承諾。 2023 財年結束時，我們擁有 1800 萬美元現金，運營現金流為 1.21 億美元，比上一年增長 76%。這是由於與上一年相比利潤增加和營運資金管理改善。

For the year, our free cash flow defined as cash flow from operations less capital expenditures, was $108 million or $6.91 per share as compared to $53 million and $3.38 per share in the fiscal 2022. Our free cash flow conversion rate, defined as free cash flow as a percentage of net income was 111% in fiscal 2023, an improvement from the conversion rate of 79% in the prior year.

今年，我們的自由現金流（定義為運營現金流減去資本支出）為 1.08 億美元，即每股 6.91 美元，而 2022 財年為 5300 萬美元，每股為 3.38 美元。我們的自由現金流轉換率，定義為自由現金2023 財年，流量占淨利潤的百分比為 111%，較上一年的 79% 的轉化率有所提高。

At fiscal year-end, we had $253 million of borrowings outstanding under our $500 million revolving credit facility, which resulted in borrowing capacity of $247 million. This resulted in a leverage ratio in accordance with our credit facility of approximately 1.3x debt to EBITDA, well within our stated range of 1x to 3x. This provides us with ample liquidity and flexibility to execute on our organic and inorganic strategic initiatives.

截至本財年末，我們的 5 億美元循環信貸額度下尚未償還的借款為 2.53 億美元，因此借款能力為 2.47 億美元。根據我們的信貸安排，這導致槓桿率約為 EBITDA 債務的 1.3 倍，完全在我們規定的 1 倍至 3 倍範圍內。這為我們提供了充足的流動性和靈活性來執行我們的有機和無機戰略舉措。

In early February of this calendar year, we entered into an interest rate swap which fixes the SOFR portion of the first $100 million of our revolver borrowings at 3.85% through May of 2026. This compares favorably to the current comparable base rate of over 5.2% in settles monthly. This swap extends to the current expiration of our revolver in May of 2027.

今年 2 月初，我們簽訂了利率互換協議，到 2026 年 5 月，我們的前 1 億美元循環貸款的 SOFR 部分固定為 3.85%。這與當前超過 5.2% 的可比基本利率相比是有利的每月結算。此次互換延續到我們左輪手槍目前的到期日期（2027 年 5 月）。

This fiscal year, we invested $58 million of acquisition capital. We returned $36 million to shareholders via share repurchase, reducing our share count by approximately 336,000 shares. We did not repurchase any shares under our program during the fiscal fourth quarter. We have $100 million outstanding on our current share repurchase program at the end of the year.

本財年，我們投入了 5800 萬美元的收購資金。我們通過股票回購向股東返還 3,600 萬美元，減少了約 336,000 股。在第四財季，我們沒有根據計劃回購任何股票。截至年底，我們目前的股票回購計劃尚有 1 億美元未償還。

As part of our broad capital allocation strategy, we remain committed to opportunistic market repurchases guided by our intrinsic value-based model. We have 15.5 million shares outstanding, approximately the same total as when we went public over 7 years ago. This is impressive given that we have approximately tripled our EBITDA since that time and have used our shares in acquisitions and in our equity compensation programs. But have we purchased a similar number of shares to what we have used.

作為我們廣泛資本配置策略的一部分，我們仍然致力於以內在價值為基礎的模型指導下的機會性市場回購。我們有 1550 萬股流通股，與 7 年前上市時的數量大致相同。鑑於自那時以來我們的 EBITDA 大約增加了兩倍，並且在收購和股權補償計劃中使用了我們的股份，這一點令人印象深刻。但是我們購買的股票數量是否與我們使用的股票數量相似？

The company's effective tax rate for fiscal 2023 was 23.3% on a GAAP basis, which aligns with the company's previous expectation of 23% to 24% as discussed during our fiscal 2023 3rd quarter call. We currently expect a tax rate of approximately 25% for fiscal 2024.

按 GAAP 計算，該公司 2023 財年的有效稅率為 23.3%，這與我們在 2023 財年第三季度電話會議中討論的公司之前預期的 23% 至 24% 一致。我們目前預計 2024 財年的稅率約為 25%。

As we look to fiscal 2024, we expect to have revenue growth across all 3 segments and at the consolidated level, which, when coupled with meaningful operating leverage, will result in solid year-over-year EBITDA and EPS growth.

展望 2024 財年，我們預計所有 3 個細分市場和合併層面的收入都會增長，再加上有意義的運營槓桿，將帶來穩健的 EBITDA 和 EPS 同比增長。

As we look at our cadence of earnings over the 4 quarters, we expect our normal seasonality with the fiscal third quarter ending in December being the lowest level of earnings. With higher interest rates than last year, we expect our interest expense in the first 2 quarters will be higher than the prior year periods. And the year-over-year comparison for that line item for the back half of the fiscal year will depend on our outstanding level of debt.

當我們審視 4 個季度的盈利節奏時，我們預計我們的正常季節性，即 12 月結束的第三財季的盈利水平是最低的。由於利率高於去年，我們預計前兩個季度的利息支出將高於去年同期。本財年後半段該項目的同比比較將取決於我們的未償債務水平。

Our operating teams have done a great job maintaining the pricing that we achieved during the rapid inflation in the last several quarters. As we have seen reductions in the cost of certain inputs, including ocean freight, this leads to higher margin potential.

我們的運營團隊在維持過去幾個季度快速通脹期間實現的定價方面做得非常出色。由於我們已經看到某些投入成本的降低，包括海運，這導致了更高的利潤潛力。

We will continue to keep a close eye on our costs and are confident in our ability to achieve the profitability and margins that we and our shareholders have come to expect.

我們將繼續密切關注我們的成本，並對我們實現我們和股東所期望的盈利能力和利潤率的能力充滿信心。

As we look at our 3 operating segments, we expect revenue and profit growth in our Contractor Solutions segment to continue outpacing the categories we serve, driven by the pricing actions we have taken and maintaining as well as adding new customers and selling more of our products to existing customers. While expectations as reported by the public HVAC/R OEM companies or for unit volumes to decline this year, our team is committed to deliver top and bottom line growth through strong commercial and operational execution.

當我們審視我們的 3 個運營部門時，我們預計承包商解決方案部門的收入和利潤增長將繼續超過我們所服務的類別，這得益於我們採取的定價行動和維護以及增加新客戶和銷售更多產品給現有客戶。儘管上市 HVAC/R OEM 公司預計今年的銷量將下降，但我們的團隊致力於通過強大的商業和運營執行力實現營收和利潤的增長。

With the Engineered Building Solutions backlog at all-time highs, our team is focused on execution and expect to outperform the construction end market while growing revenue and improving margins. Our specialized Reliability Solutions segment expects to deliver another year of top line growth, although at a slower rate than the exceptional growth over the last 2 years, returning to our historical GDP plus growth norms while expanding the strong improved margins we achieved in fiscal 2023.

隨著工程建築解決方案積壓量達到歷史最高水平，我們的團隊專注於執行，並期望在增加收入和提高利潤的同時超越建築終端市場。我們專業的可靠性解決方案部門預計將在新的一年實現營收增長，儘管增速低於過去兩年的超常增長，恢復到歷史 GDP 加增長標準，同時擴大我們在 2023 財年實現的強勁利潤率增長。

Before I turn the call back to Joe, I'd like to offer an enthusiastic welcome to our new Vice President of Investor Relations and Treasurer, Alexa Huerta, who started with CSW just this week and opened our call today. Alexa brings a tremendous background of financial and IR experience to us, and I look forward to introducing her to our investment community in the coming days, weeks and months as we meet with you.

在我把電話轉回給 Joe 之前，我想對我們新任投資者關係副總裁兼財務主管 Alexa Huerta 表示熱烈歡迎，她於本周剛剛開始與 CSW 合作，並於今天開始了我們的電話會議。 Alexa 為我們帶來了豐富的金融和投資者關係經驗背景，我期待著在未來幾天、幾周和幾個月與您見面時將她介紹給我們的投資社區。

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

現在，我將把電話轉回給喬，讓他作結束語。

Thank you, James. As we conclude on fiscal year and begin another, I want to take a moment to mention a few metrics with a longer-term perspective. Our revenue compound annual growth rate for fiscal years 2018 through 2023 was 18%. Our adjusted EBITDA CAGR was 22% with an adjusted EBITDA margin during this period of 22%. And our adjusted EPS CAGR was 24%. Revenue growth, of course, has included acquisitions, and we would expect to continue to grow inorganically through acquisitions, thereby supplementing our organic growth. All of this has resulted in a total shareholder return of 377% since we went public in the fall of 2015, creating tremendous value for all of our shareholders.

謝謝你，詹姆斯。當我們結束財政年度並開始另一個財政年度時，我想花點時間從長遠角度提及一些指標。 2018 至 2023 財年我們的收入複合年增長率為 18%。我們調整後的 EBITDA 複合年增長率為 22%，調整後的 EBITDA 利潤率為 22%。我們調整後的每股收益複合年增長率為 24%。當然，收入增長包括收購，我們預計將繼續通過收購實現無機增長，從而補充我們的有機增長。自2015年秋季上市以來，所有這些使我們的股東總回報率達到377%，為所有股東創造了巨大的價值。

As we look ahead, we believe that our attractive and diverse end market exposure, strong customer relationships, enviable distribution channels, best-in-class products with hard-earned reputation for quality, and innovation and a healthy balance sheet to execute on growth opportunities gives us every reason to be enthusiastic about fiscal 2024.

展望未來，我們相信，我們具有吸引力且多樣化的終端市場曝光度、牢固的客戶關係、令人羨慕的分銷渠道、具有來之不易的質量聲譽的一流產品、創新和健康的資產負債表，可以抓住增長機會讓我們有充分的理由對 2024 財年充滿熱情。

And as always, I would like to close by thanking all my colleagues here at CSWI, who collectively own 3.5% of CSWI through our employee stock ownership plan as well as all of our shareholders for their continued interest and support of our company.

與往常一樣，我要感謝 CSWI 的所有同事，他們通過我們的員工持股計劃總共擁有 CSWI 3.5% 的股份，並感謝所有股東對我們公司的持續關注和支持。

With that, operator, we're now ready to take questions.

接線員，我們現在準備好回答問題了。

(Operator Instructions) Our first question comes from Jon Tanwanteng with CJS Securities. Please proceed with your question.

（操作員指令）我們的第一個問題來自 CJS 證券的 Jon Tanwanteng。請繼續你的問題。

Joe or James, I just wanted to get a little bit of clarification. I think in the press release, you expected margin growth in each of the 3 segments going forward. Is that kind of a directional guidance for fiscal '24? And is that off of the 23% EBITDA margins you did for the year in '23?

喬或詹姆斯，我只是想得到一點澄清。我認為在新聞稿中，您預計未來三個細分市場的利潤率都會增長。這是 24 財年的方向性指導嗎？這是否超出了您 23 年 23% 的 EBITDA 利潤率？

John, this is Joe. Thanks for being on the call today. We have a long history of not providing guidance unless there's some correction that needs to be made or some misperception in the market. So this is very, very conceptual. But our commitment has always been to outpace the top line growth for the markets we serve and then to always grow profits faster than revenue. So that -- that's all the guide we're willing to give at this point. James, do you want to add anything to that?

約翰，這是喬。感謝您今天接聽電話。長期以來，我們一直不提供指導，除非需要進行一些修正或市場存在一些誤解。所以這是非常非常概念化的。但我們的承諾始終是超越我們所服務的市場的收入增長，然後始終使利潤增長快於收入增長。這就是我們目前願意提供的所有指南。詹姆斯，你想補充什麼嗎？

I'll get it, yes. Yes, we wanted be clear that we do expect to grow revenue across the segments in my remarks and grow the margin. We've seen some nice momentum from a couple of years ago. As you all know, John, we've done a great job in our businesses, keeping up with inflation through pricing. And you took a bit of a margin hit there for a year or so as we were kind of catching up to that given the math, as we've talked about quite a bit. But we've kind of turned that corner and now we've started expanding margins, again, and we expect that momentum to continue.

我會得到它，是的。是的，我們想明確表示，我們確實希望在我的講話中增加各個部門的收入並增加利潤。我們從幾年前就看到了一些良好的勢頭。約翰，眾所周知，我們的業務做得很好，通過定價跟上了通貨膨脹的步伐。在一年左右的時間裡，你的利潤率受到了一些影響，因為我們已經在數學上追上了這一點，正如我們已經討論過的那樣。但我們已經扭轉了局面，現在我們再次開始擴大利潤率，我們預計這種勢頭將繼續下去。

Okay. Great. That's helpful. Can you just talk about the macro assumptions underlying your outlook as we go forward I know several economists and then other firms have called for a recession. There's obviously the risk of default coming. What are the thoughts on how broader demand could affect your business and if you're planning for that at all?

好的。偉大的。這很有幫助。您能談談您展望未來的宏觀假設嗎？我認識幾位經濟學家，然後其他公司也呼籲經濟衰退。顯然存在違約風險。對於更廣泛的需求將如何影響您的業務有何想法？您是否正在為此做好計劃？

Sure, John. We always keep an eye on that, obviously. The best thing is not necessarily TV and newspapers, but talking to our customers and suppliers and understand on the ground and our commercial and operating teams do a tremendous job of that across the segments. We continue to see nice demand. Orders have been good the last few months across the board. You look at contractor solutions. We talked about kind of the public OEMs and those companies in that HVAC space, are looking for unit volume slowdown this year.

當然，約翰。顯然，我們一直在關注這一點。最好的事情不一定是電視和報紙，而是與我們的客戶和供應商交談並了解實地情況，我們的商業和運營團隊在各個領域都做了巨大的工作。我們繼續看到良好的需求。過去幾個月的訂單情況總體良好。您查看承包商的解決方案。我們談到了一些公共原始設備製造商和暖通空調領域的公司，今年的銷量預計會放緩。

You're coming off a couple of years of pretty tough comps. You had tremendous couple of years of unit volume growth, so that's expected. We expect to outperform that. They've generally talked about single to high -- mid- to high single-digit declines, and we expect to outperform that on a unit volume perspective. And then as I said, grow revenue through the pricing we have and other methods and certainly grow profit at a higher rate.

你已經經歷了幾年相當艱難的比賽。幾年來單位銷量大幅增長，這是意料之中的。我們預計會超越這一點。他們通常談論的是個位數到高——中到高個位數的下降，我們預計從單位數量的角度來看，其表現會優於這一下降。然後，正如我所說，通過我們現有的定價和其他方法來增加收入，當然也會以更高的速度增加利潤。

So you're seeing a little bit of headwind there. One thing you're seeing is existing home sales have slowed down a bit because people don't want to give up their good mortgage rates they have. We've seen that anecdotally lately, there's some good numbers and new housing starts. But the good thing about our business is we're not as tied to the OEM market.

所以你會看到一些逆風。你看到的一件事是，現有房屋銷售有所放緩，因為人們不想放棄他們擁有的良好抵押貸款利率。我們最近看到一些軼事，有一些不錯的數字和新的住房開工。但我們業務的好處是我們不那麼依賴 OEM 市場。

So whether it's a repair or maintenance or replacement or a new HVAC unit, our products are going into that, and we're continuing to penetrate with the acquisitions we've made into having more -- the water heater, more of the HVAC system and those type of things in the home. You look at Engineered Building Solutions, we've really worked hard, Scott and his commercial team pinpointing those areas that do have opportunity. Institutional construction is important to us, our hospitals or airports or education that are less dependent on equity returns and those type of things, a little less dependent on interest rates.

因此，無論是維修、維護、更換還是新的 HVAC 裝置，我們的產品都會涉足這一領域，並且我們將繼續通過收購進行滲透，以擁有更多產品——熱水器、更多的 HVAC 系統以及家裡的那些東西。你看看工程建築解決方案，我們真的很努力，斯科特和他的商業團隊指出了那些確實有機會的領域。制度建設對我們來說很重要，我們的醫院、機場或教育較少依賴於股權回報和此類事物，較少依賴於利率。

Multifamily, especially in Canada continues to be a nice place for us with our Greco business up in Ontario. So we continue to focus on those bright spots and been able to grow backlog as a result, and we'll continue to lean into those areas and be sure that we're going after the right sectors.

多戶住宅，尤其是在加拿大，對我們來說仍然是一個好地方，因為我們的 Greco 業務位於安大略省。因此，我們繼續關注這些亮點，並因此增加了積壓訂單，我們將繼續專注於這些領域，並確保我們追求正確的領域。

The Specialized Reliability solutions, again, Mark and his commercial team and operating team have done a great job doing the exact same thing, leaning into those energy markets.

專業可靠性解決方案再次，馬克和他的商業團隊和運營團隊在做同樣的事情上做得很好，專注於這些能源市場。

Our joint venture with Shell continues to gain momentum in the rail and mining sector in North America. The team has made some international strides where they see opportunities across the globe. So I would tell you that while we always have an eye out on the macro economy, we're metro micro focused, and our businesses have done a great job shifting our commercial efforts and our production efforts on those areas that have the most opportunity for growth.

我們與殼牌的合資企業在北美鐵路和採礦業繼續發展勢頭強勁。該團隊在國際上取得了一些進步，他們看到了全球的機遇。所以我想告訴你們，雖然我們始終關注宏觀經濟，但我們也關注微觀經濟，我們的企業在將我們的商業努力和生產努力轉移到那些最有機會的領域方面做得非常出色。生長。

And John, this is Joe. The only thing I'd add to that, you raised the R word recession, and that is we can't predict, but we are absolutely prepared. Diversified and end markets, diversified across our product portfolio, diversified businesses, we have a really strong balance sheet, just a real strong cash generation.

約翰，這是喬。我唯一要補充的是，你提出了衰退這個詞，我們無法預測，但我們絕對做好了準備。多元化的終端市場，多元化的產品組合，多元化的業務，我們擁有非常強大的資產負債表，真正強大的現金生成能力。

And so those are the kind -- and we have a lot of consumable type products and non-discretionary. And so those are the attributes that our business has that makes us more resistant to cycles. And so certainly, what just to add to what James said, I think our business is especially resilient. And so we're prepared almost regardless of what the economic cycles are.

這些就是這樣的——我們有很多消費品類型的產品和非自由裁量的產品。因此，這些是我們的業務所具有的屬性，使我們更能抵抗週期。當然，補充一下詹姆斯所說的，我認為我們的業務特別有彈性。因此，無論經濟周期如何，我們幾乎都做好了準備。

Great. Last one for me, I'll jump back in queue. Just could you have a snapshot one, the pricing versus input spread that you have in the fiscal first quarter compared to where you were in Q4, some kind of a supplement of that? Or do you still have high-priced inventory coming through? And is that going to be a tailwind as you come off of that going forward?

偉大的。對我來說最後一個，我會插回隊列。您能否提供一個快照，即第一財季的定價與投入價差與第四季度的情況相比，作為其某種補充？或者您還有高價庫存嗎？當你繼續前進時，這會成為順風嗎？

Yes. I think if you look at the margins in each segment, as you go through the cadence of last year's earnings, you kind of see that come into fruition with the margin improvement. You had some to your point, you have a lag on inventory, especially that inventory that comes across the ocean. So that could be a couple of quarter lag.

是的。我認為，如果你看看每個細分市場的利潤率，當你回顧去年的盈利節奏時，你會發現隨著利潤率的提高，這一點正在取得成果。你有一些觀點，你的庫存存在滯後，尤其是來自大洋彼岸的庫存。所以這可能會有幾個季度的滯後。

So I think as you went through the calendar year last year and then our fiscal year late in the year, some of that was still coming through. I think most of that is through the system now. There's always some that's out there in the inventory. But generally speaking, we have a good level of inventory turns. So you would have a little bit of that, but ocean freight has been down for a while now, so that's working its way through the system. Our last round of significant price increases that were inflation-related were last summer. So we saw a few more months before we start lapping the pricing.

所以我認為，當你回顧去年的日曆年和今年晚些時候的財政年度時，其中一些仍在進行中。我認為現在大部分都是通過系統實現的。庫存中總有一些。但總體而言，我們的庫存周轉水平較高。所以你會有一點，但海運已經下降了一段時間，所以這正在通過系統發揮作用。我們上一輪與通脹相關的大幅價格上漲是在去年夏天。因此，我們在開始定價之前還需要幾個月的時間。

And then we had our usual seasonal and annual type price increases earlier this calendar year. But I think in terms of high cost inventory, there may be a little in the system, but most of that worked its way through. Thus the confidence we provided with that tailwind with margin improvement that you asked about at the beginning.

然後，我們在今年早些時候進行了通常的季節性和年度價格上漲。但我認為就高成本庫存而言，系統中可能有一點，但大部分都已經解決了。因此，我們對您一開始提到的利潤率改善的順風車提供了信心。

Our next question is from [Alex Hartman] with Sidoti & Company.

我們的下一個問題來自 Sidoti & Company 的 [Alex Hartman]。

Good morning, Joe, James and Alexa. This is Alex on for Julio Romero and congrats on the results. My first 2 questions is about operating leverage and the joint venture. Could you talk to the operating leverage that you've seen come to fruition so far? And what your expectations are going forward?

早上好，喬、詹姆斯和亞歷克斯。這是亞歷克斯（Alex）代表胡里奧·羅梅羅（Julio Romero）發言，祝賀結果。我的前兩個問題是關於經營槓桿和合資企業。您能談談您迄今為止所看到的運營槓桿嗎？您對未來有何期望？

Yes. This is James, and welcome to the call. Alex appreciate you being on. Yes, as you -- as we've talked about, we continue to pick up volume through the Shell Whitmore joint venture. It's been a nice partnership. And as we said, it would take a while to get the formulations and get the strategy together. And we're a couple of years into that, and I think we're seeing some nice momentum. You're seeing some profitability over the last few quarters, which is coming through.

是的。我是詹姆斯，歡迎致電。亞歷克斯感謝你的參與。是的，正如我們所討論的，我們繼續通過殼牌惠特莫爾合資企業增加銷量。這是一個很好的合作夥伴關係。正如我們所說，需要一段時間才能製定方案並製定戰略。我們已經這樣做了幾年了，我認為我們已經看到了一些良好的勢頭。您在過去幾個季度中看到了一些盈利能力，並且正在實現。

And we've always said that, that facility has room to grow. And the Shell joint venture has certainly helped us with the absorption and that contributes to the overall margins of the joint venture in Whitmore as we can add equipment there and add volumes to that base, then you continue to see the joint venture have good profitability opportunity through absorption of the volume.

我們總是說，該設施還有發展的空間。殼牌合資企業無疑幫助我們進行了吸收，這有助於提高惠特莫爾合資企業的整體利潤，因為我們可以在那裡添加設備並增加該基地的產量，然後您將繼續看到合資企業擁有良好的盈利機會通過吸收體積。

My second question is regarding the Contractor Solutions segment. Can you talk about how much of a driver maintaining price versus benefiting from lower cost for this quarter? And then if you can see that continuing.

我的第二個問題是關於承包商解決方案部分。您能否談談本季度司機維持價格與受益於降低成本的比例有多少？然後如果你能看到這種情況繼續下去。

Yes, sure. It's hard to quantify exactly and break it up, but maintaining price has been very important to us, and we had our kind of annual price increase during the fiscal quarter, but that's just normal as that goes through in the late winter, early spring.

是的，當然。很難準確量化並分解它，但維持價格對我們來說非常重要，我們在財政季度期間出現了年度價格上漲，但這很正常，因為這種情況發生在冬末春初。

So yes, our team has done a tremendous job of maintaining pricing where it needs to be, and we've talked about where we sit in the value chain and our ability to do that and maintain our customer base and really strengthen that. So pricing maintenance has been important. Yes, we've seen some input costs come down. The biggest we've talked about a lot the last couple of years, obviously, is the container rates, which are now down back to where we were a couple of years ago. And we rely a lot on ocean freight from our own facilities and third parties.

所以，是的，我們的團隊在維持所需的定價方面做了巨大的工作，我們已經討論了我們在價值鏈中的位置以及我們這樣做的能力，以及維護我們的客戶群並真正加強這一點的能力。因此，定價維護非常重要。是的，我們已經看到一些投入成本下降了。顯然，過去幾年我們談論最多的問題是集裝箱費率，現在已經回落到幾年前的水平。我們非常依賴我們自己的設施和第三方的海運。

So it's -- I think it really has you've hit on it well, Alex, it's been a good combination between maintaining that price and seeing costs coming down that led to margin expansion. Hard to break those out necessarily because there are so many moving parts. And each product and each kind of product category has its own dynamics. But overall, the team has really done a nice job with those 2, which obviously then adds to a really nice gross profit and with operating expense leverage adds to an even better EBITDA margin.

所以，我認為你真的很清楚，亞歷克斯，這是維持價格和看到成本下降從而導致利潤率擴張之間的一個很好的結合。很難將它們打破，因為有太多活動部件。並且每種產品、每種產品類別都有其自身的動態。但總的來說，團隊在這兩個方面確實做得很好，這顯然增加了非常好的毛利潤，並且運營費用槓桿增加了更好的 EBITDA 利潤率。

Great. And my last of 3 questions is on the financials. I think you touched on this a little bit with inventory, but would love to hear more about some of the efforts to reduce working capital and how much more runway you think you have for improvement there?

偉大的。我的最後三個問題是關於財務狀況的。我認為您在庫存方面談到了這一點，但很想了解更多有關減少營運資本的一些努力以及您認為還有多少改進空間？

Yes. This is James again. I'll tell you, I'm really proud and pleased with the team. There's been a concerted effort in all 3 components of that. With accounts receivable, the team has done a really nice job getting their teams together and focused on collections and being sure that we work with our customers to have them pay the invoices timely.

是的。這又是詹姆斯。我告訴你，我對這個團隊感到非常自豪和滿意。這三個部分都經過了共同努力。在應收賬款方面，該團隊做得非常好，讓他們的團隊聚集在一起，專注於收款，並確保我們與客戶合作，讓他們及時支付發票。

And a lot of that is on our end, being sure that we get those bills out timely and accurately and working with our customers and the relationships we have. So the team has done a nice job shaving some days off of that. You only get a point in time at the end of the quarter when you look at the balance sheet as we go through the months and the quarters we're seeing some really nice momentum there in shaving working capital dollars off by improving accounts receivable efforts across the segments.

其中很多工作都取決於我們，確保我們及時、準確地收到這些賬單，並與我們的客戶和我們擁有的關係合作。所以團隊做得很好，節省了一些時間。只有在季度末，當你查看資產負債表時，你才會得到一個時間點，因為我們經歷了幾個月和幾個季度，我們看到了通過改善應收賬款努力來削減營運資金的一些非常好的勢頭。段。

Accounts payable to, we want to treat our vendors fairly and pay the bills when we're supposed to. But where we see opportunity to extend some terms than we've been able to leverage that a little bit. And then obviously, inventory is the big piece. And we continue to hold strategic inventory in certain products that we rely on overseas production, both our own and third-party because as we've often said, things can happen with the delays and those kind of things, and we've seen what that looks like over the last couple of years.

應付賬款，我們希望公平對待我們的供應商並按時支付賬單。但當我們看到有機會延長某些條款時，我們就能夠稍微利用它。顯然，庫存是最重要的部分。我們繼續對依賴海外生產的某些產品（包括我們自己的和第三方的）持有戰略庫存，因為正如我們經常說的，延遲和此類事情可能會發生，我們已經看到了看起來是過去幾年的情況。

So holding a little more than we did before is appropriate. And obviously, you go back a few years before we acquired TRUaire we didn't have an internal operation overseas that we have now in Vietnam, which is a lot of our production in the contractor solutions space. So you're going to have more inventory. So you're not going to get all the way back to where we were pre acquisition.

所以比之前多持有一點是合適的。顯然，早在我們收購 TRUaire 之前的幾年，我們並沒有像現在在越南那樣的海外內部運營，我們的大部分生產都是在承包商解決方案領域進行的。所以你會有更多的庫存。所以你不會一直回到我們收購前的狀態。

But we continue to look strategically at where to produce our products, were to procure our products. And as we said on the last call, while our days continue to improve, there may be a little bit of improvement left, but I'm really pleased and proud of how the teams have done managing working capital, so we have those dollars in cash flow to put to work at good returns, both organically and inorganically. But at the same time, making sure, as Joe has often said that we've got the product with the type of margins that we achieve for our shareholders. in stock to sell. We don't want to be out of stock of something and miss a sale.

但我們繼續戰略性地考慮在哪裡生產我們的產品，在哪裡採購我們的產品。正如我們在上次電話會議上所說，雖然我們的日子在繼續改善，但可能還剩下一點點改善，但我對團隊管理營運資金的方式感到非常高興和自豪，所以我們有這些資金現金流可以有機地和無機地產生良好的回報。但與此同時，正如喬經常說的那樣，我們要確保我們的產品能夠為股東帶來足夠的利潤。有庫存可供出售。我們不想因為缺貨而錯過促銷活動。

Our next question is from John Tanwanteng with CJS Securities.

我們的下一個問題來自 CJS 證券的 John Tanwanteng。

Just a question on the Whitmore facility and the joint venture with Shell. Where are you in filling that capacity? And what is the margin limit for this segment if utilization continues to go up there?

只是關於惠特莫爾工廠以及與殼牌合資企業的問題。你在哪裡填補這個容量？如果利用率繼續上升，該細分市場的利潤上限是多少？

John, in terms -- we talked about -- I appreciate you asking that question. This is James. We talked about we're kind of in what we call Phase 3 of the capital expenditures. You'll see that flow through the year over the next few quarters. And then we'll have the equipment fully ramped up and get that in production over the course of the fiscal year. We'll provide updates as we go along because it will be a bit of an increase to our normal CapEx.

約翰，就我們討論過的而言，我感謝你提出這個問題。這是詹姆斯。我們談到我們正處於所謂的資本支出的第三階段。在接下來的幾個季度中，您將看到全年的流動情況。然後我們將全面啟動設備並在本財年投入生產。我們將在進展過程中提供更新，因為這將比我們的正常資本支出有所增加。

But obviously, we pay half and Shell pays half. So we'll point to that on the statement of cash flows as appropriate. So we're still on that journey. The first couple of phases are through the CapEx and we're, as I said, increasing volumes month-to-month and quarter-to-quarter. And that Phase III will allow us over the next fiscal year and even into fiscal '25, continue to ramp that up to where we expected to model this when we started that literally just over 25 months ago now.

但顯然，我們付一半，殼牌付一半。因此，我們將酌情在現金流量表上指出這一點。所以我們仍然在這個旅程中。前幾個階段是通過資本支出進行的，正如我所說，我們正在逐月和逐季度增加銷量。第三階段將使我們能夠在下一個財年，甚至進入 25 財年，繼續將其提高到我們在 25 個月前開始建模時所預期的水平。

In terms of margin potential for the segment, which is inclusive of that, we've guided to reaching 20%. As you recall very well, John, as a veteran with this, we were down in the single digits in the depth of the pandemic. We got over the 20% mark this fiscal fourth quarter and for the year, we were in the high teens. So we think seeing that margin now at or above 20% in the current fiscal year is certainly achievable. It may bounce right quarter-to-quarter, and the joint venture is an important part of that.

就該細分市場的利潤潛力而言（包含這一點），我們指導其達到 20%。約翰，你記得很清楚，作為這方面的老手，我們在大流行的嚴重程度中下降了個位數。本財年第四季度我們的增長率超過了 20%，全年增長率也達到了十幾歲。因此，我們認為本財年的利潤率達到或超過 20% 是肯定可以實現的。它可能會逐季度反彈，而合資企業是其中的重要組成部分。

Okay. Great. Could you talk a little bit more about the seasonal restocking at your HVAC and plumbing distributors. What are they buying this year compared to last year, if there's any areas of strength or weakness, whether it's mini splits or things for recent acquisitions. And I don't know if you have this kind of data, but if there's more MRO or OEM products that are being pushed through. Just help us understand the size and shape of what you're seeing this year?

好的。偉大的。您能多談談暖通空調和管道經銷商的季節性補貨嗎？與去年相比，他們今年購買了什麼，是否有任何優勢或劣勢領域，無論是小型拆分還是最近收購的東西。我不知道您是否有此類數據，但是否有更多的 MRO 或 OEM 產品正在推出。請幫助我們了解您今年所看到的物體的大小和形狀？

Yes. Sure, John. It's a great question. When you talk about inventory stocking, clearly, you've heard the OEMs and the distributors, more importantly to us, talk about the level of inventories they have. And your revenue to inventory levels were a little different than they were a couple of years ago, of course.

是的。當然，約翰。這是一個很好的問題。當您談論庫存庫存時，顯然，您已經聽到原始設備製造商和分銷商（更重要的是對我們而言）談論他們的庫存水平。當然，您的收入與庫存水平相比與幾年前略有不同。

But I think they've reached generally a nice equilibrium it sounds like. There may still be a little destocking of certain products. But we continue to see nice order volume. Just as we manage our inventory, they do as well, and they don't want to miss a sale either. They've got attractive margins like we do. So it's a really nice partnership and dynamic that we have in working together.

但我認為他們總體上已經達到了聽起來不錯的平衡。某些產品可能仍會有少量去庫存。但我們仍然看到不錯的訂單量。正如我們管理庫存一樣，他們也這樣做，而且他們也不想錯過促銷。他們和我們一樣擁有誘人的利潤。因此，我們的合作非常良好，充滿活力。

And again, Jeff Underwood and his commercial team, as Joe pointed out, specifically, really worked closely with our customers on a daily basis to be sure they've got what they need. And our ability now with the 7 distribution centers with RectorSeal and TRUaire combined and then Shoemaker, with their facility in Washington, we can really supply our customers what they need very quickly and very pinpointed.

正如喬所指出的，傑夫·安德伍德和他的商業團隊再次與我們的客戶每天密切合作，以確保他們獲得所需的東西。現在，我們擁有 RectorSeal 和 TRUaire 的 7 個配送中心，以及 Shoemaker 位於華盛頓的工廠，我們可以真正快速、精準地為客戶提供他們需要的東西。

In terms of the areas, I won't get overly detailed, but you mentioned many splits. I'll say you recall that last year, there -- there was some shortage on the mini split OEM side. They had some production delays. So that led to a little less mini split product demand last year. They seem like they've caught up what we've seen and heard, and so that leads to a little more for us.

就領域而言，我不會太詳細，但你提到了很多分裂。我想說你還記得去年，迷你分體式 OEM 方面出現了一些短缺。他們的生產出現了一些延誤。因此，這導致去年迷你分體產品的需求略有減少。他們似乎已經掌握了我們的所見所聞，因此這給我們帶來了更多的東西。

And that's a product area that we excel in. It's a product area where we have a lot of things that go into the installation of a mini split. And those products carry nice aggregate margins for us as we make those sales.

這是我們擅長的產品領域。在這個產品領域，我們有很多東西可以用於安裝迷你分體器。當我們進行這些銷售時，這些產品為我們帶來了不錯的總利潤。

So I'd highlight that area maybe. But I wouldn't say I'd point to anything. I wouldn't distinguish between MRO versus pure replacement or new. As you know, a lot of that is pretty fungible. Our products go into all applications. So I don't think I'd point to just repair or just replacement or just new necessarily. Our -- as we often say, we don't know exactly where it goes. But I would tell you, hopefully, that's not too early vague that we are seeing nice demand. We're seeing things as we expect, and that leads us to the confidence we provided in revenue and margin growth in that segment.

所以我可能會強調這個領域。但我不會說我會指出任何事情。我不會區分 MRO 與純替換或新的。如您所知，其中很多都是可以替代的。我們的產品適用於所有應用。所以我認為我不一定會指出只是修理或只是更換或只是新的。正如我們常說的，我們不知道它到底去了哪裡。但我希望告訴你，我們看到了良好的需求，這還不算太早。我們所看到的事情正如我們所預期的那樣，這使我們對該領域的收入和利潤增長充滿信心。

The other thing I would add, John, is part of your question really goes to mix, and we are focused on selling more of our higher-margin products. The last couple of years, just keeping up with demand, obviously, was job #1.

約翰，我要補充的另一件事是，你的問題的一部分確實很複雜，我們專注於銷售更多利潤率較高的產品。顯然，在過去的幾年裡，滿足需求是第一要務。

But in a slower growth environment, I think it's really important to focus on the higher-margin products. If we can grow those faster than the overall growth rate, mini-split has been a great example of that. Those are really great products for us and that growth being faster than the category growth, that's been a key to our success and broadening that concept throughout the company and making sure that we are highly focused on selling more of our higher-margin products, that mix will show up in our results over the course of time.

但在增長較慢的環境中，我認為專注於利潤率較高的產品非常重要。如果我們的增長速度能夠快於整體增長率，那麼迷你拆分就是一個很好的例子。這些對我們來說確實是很棒的產品，而且增長速度快於類別增長，這是我們成功的關鍵，並在整個公司範圍內擴展了這一概念，並確保我們高度專注於銷售更多利潤率更高的產品，隨著時間的推移，混合會出現在我們的結果中。

Great. And then the last one because I always have to ask, just update us on the relative attractive sense of places to deploy capital. Do you see any really good M&A opportunities right now? Or does it make more sense to be doing other things for your cash?

偉大的。然後是最後一個，因為我總是要問，請向我們介紹部署資本的相對有吸引力的地方的最新情況。您現在看到什麼真正好的併購機會嗎？或者用你的錢做其他事情更有意義嗎？

Yes, John. We appreciate you asking that. It's an important focus for us as well. Our allocation of capital philosophy has not changed, and that means we're going to do everything on a risk-adjusted returns basis. We think about our cost of capital, which has obviously gone up, interest rates up. Now we're mitigating some of that through our swap, but cost of capital has gone up, and so hurdle rates have gone up. Having said that, as you've seen in the past, our ability to buy a really attractive, accretive businesses at reasonable valuations, I think continues. We continue to see a nice active pipeline, and that continues to be a focus for us.

是的，約翰。我們感謝您提出這個問題。這對我們來說也是一個重要的焦點。我們的資本配置理念沒有改變，這意味著我們將在風險調整回報的基礎上做一切事情。我們考慮我們的資本成本，它明顯上升，利率上升。現在，我們正在通過掉期來緩解其中的一些問題，但資本成本上升了，因此最低門檻利率也上升了。話雖如此，正如您過去所看到的，我認為我們有能力以合理的估值購買真正有吸引力的、具有增值性的企業。我們繼續看到一個很好的活躍管道，這仍然是我們關注的焦點。

The hurdle rate has been raised. There's no question about that. Paying down debt on a relative basis is more attractive than it was a year or 2 ago. But acquisition growth is an important part of our strategy and continuing to leverage our distribution channels is going to be an important part of our success.

門檻率有所提高。毫無疑問。相對而言，償還債務比一兩年前更具吸引力。但收購增長是我們戰略的重要組成部分，繼續利用我們的分銷渠道將是我們成功的重要組成部分。

Our next question is from [Alex Hartman] with Sidoti & Company.

我們的下一個問題來自 Sidoti & Company 的 [Alex Hartman]。

I wanted to follow up on something you mentioned earlier. You spoke to the demand for residential HVAC. And I wanted to hear a little bit more about what you're seeing around nonresidential. Are you seeing any sort of trends today compared to 3 months ago and how you see that playing out?

我想跟進你之前提到的事情。您談到了住宅暖通空調的需求。我想听聽更多關於非住宅區的情況。與 3 個月前相比，您今天是否看到了任何趨勢？您如何看待這種趨勢？

Alex, that's a really, really small part of our business, first and foremost. And so I don't know that I would comment on that -- on those trends at this point. Really, the residential piece is the -- is by far the largest piece of our business, a handful of products that can be used in either residential or commercial and then only a very few products that really address the commercial market. So having said that, we haven't seen anything that's out of the ordinary for us. As James said, our order pattern seems normal and consistent with what we would expect. So nothing really to note there for you.

亞歷克斯，首先也是最重要的是，這只是我們業務中非常非常小的一部分。所以我不知道我現在會對此發表評論嗎？事實上，住宅產品是迄今為止我們業務中最大的部分，少數產品可用於住宅或商業，但只有極少數產品真正滿足商業市場的需求。話雖如此，我們還沒有看到任何不尋常的事情。正如詹姆斯所說，我們的訂單模式似乎很正常並且符合我們的預期。所以沒有什麼值得你注意的。

We have reached the end of the question-and-answer session. I would now like to turn the call back to management for closing comments.

我們的問答環節已經結束。我現在想將電話轉回給管理層以徵求結束意見。

Great. Thank you very much. We really appreciate everyone joining us for this conference call, and we will continue to be good stewards of your capital and look forward to speaking to you at the end of our Q1. So thank you.

偉大的。非常感謝。我們非常感謝大家參加本次電話會議，我們將繼續成為您資本的好管家，並期待在第一季度末與您交談。所以謝謝。

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

今天的會議到此結束。此時您可以斷開線路，我們感謝您的參與。