Masonite International Corp (DOOR) 2023 Q2 法說會逐字稿

Welcome to Masonite's Second Quarter 2023 Earnings Conference Call. (Operator Instructions) Please note that this conference call is being recorded. I would now like to turn the call over to Rich Leland, Vice President, Finance and Treasurer.

歡迎參加 Masonite 2023 年第二季度收益電話會議。 （操作員說明）請注意，本次電話會議正在錄音。我現在想將電話轉給財務副總裁兼財務主管 Rich Leland。

Thank you, and good morning, everyone. We appreciate you joining us for today's call. With me here this morning are Howard Heckes, President and Chief Executive Officer; and Russ Tiejema, Executive Vice President and Chief Financial Officer. Also joining us today for Q&A is Chris Ball, our President of Global Residential. We issued a press release and earnings presentation yesterday reporting our second quarter 2023 financial results. These documents are available on our website at masonite.com.

謝謝大家，大家早上好。我們感謝您參加今天的電話會議。今天早上和我在一起的有總裁兼首席執行官霍華德·赫克斯 (Howard Heckes)；以及執行副總裁兼首席財務官 Russ Tiejema。今天參加我們問答的還有我們的全球住宅總裁 Chris Ball。我們昨天發布了新聞稿和收益報告，報告了 2023 年第二季度的財務業績。這些文件可在我們的網站 masonite.com 上獲取。

Before we begin, let me remind you that this call will include forward-looking statements. Each forward-looking statement contained in this call is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears in the section entitled Forward-Looking Statements in the press release we issued yesterday.

在我們開始之前，讓我提醒您，本次電話會議將包含前瞻性陳述。本次電話會議中包含的每項前瞻性陳述都存在風險和不確定性，可能導致實際結果與此類陳述中的預測存在重大差異。有關這些因素的更多信息請參見我們昨天發布的新聞稿中標題為“前瞻性陳述”的部分。

More information about risks can be found under the heading Risk Factors in Masonite's most recently filed annual report on Form 10-K and our subsequent Form 10-Q, which are available at sec.gov and at masonite.com.

有關風險的更多信息，請參閱 Masonite 最近提交的表格 10-K 年度報告和後續表格 10-Q 中的風險因素標題，這些報告可在 sec.gov 和 masonite.com 上獲取。

The forward-looking statements in this call speak only as of today, and we undertake no obligation to update or revise any of these statements. Our earnings release and today's discussion include certain non-GAAP financial measures. Please refer to the reconciliations which are in the press release and the appendix of the earnings presentation.

本次電話會議中的前瞻性陳述僅代表今天的情況，我們不承擔更新或修改任何這些陳述的義務。我們的收益發布和今天的討論包括某些非公認會計準則財務指標。請參閱新聞稿和收益報告附錄中的調節表。

Our agenda for today's call includes a business overview from Howard, followed by a review of the second quarter results from Russ, and then Howard will provide some closing remarks and we'll begin a question-and-answer session. And with that, let me turn the call over to Howard.

我們今天電話會議的議程包括霍華德的業務概述，然後是拉斯對第二季度業績的回顧，然後霍華德將發表一些結束語，我們將開始問答環節。接下來，讓我把電話轉給霍華德。

Thanks, Rich. Good morning, and welcome, everyone. Beginning on Slide 4, I'm pleased to report that Masonite delivered strong financial results in the second quarter, executing effectively against a mixed macro backdrop while making continued progress on key strategic initiatives. Net sales in the quarter were $742 million, down 3% year-over-year as macroeconomic conditions continue to suppress demand in our end markets. However, adjusted EBITDA of $118 million was equivalent to last year despite lower volumes, with margins improving 50 basis points to 16% due in large part to the ongoing execution of our 2023 playbook initiatives.

謝謝，里奇。早上好，歡迎大家。從幻燈片 4 開始，我很高興地報告，Masonite 在第二季度取得了強勁的財務業績，在復雜的宏觀背景下有效執行，同時在關鍵戰略舉措上不斷取得進展。由於宏觀經濟狀況繼續抑制終端市場的需求，本季度淨銷售額為 7.42 億美元，同比下降 3%。然而，儘管銷量有所下降，調整後的EBITDA 仍達到1.18 億美元，與去年持平，利潤率提高了50 個基點，達到16%，這在很大程度上要歸功於我們2023 年劇本計劃的持續執行。

Year-to-date operating cash flow hit a record high $218 million for the 6 months ending in June, thanks to the outstanding work our teams are doing to optimize working capital levels across the company. As noted in the press release issued yesterday, we are excited to announce that we will host a virtual Investor Day on September 19 to discuss the growth opportunities we are targeting over the next several years, the execution of our Doors That Do More strategy and our long-term financial objectives for value creation. I encourage you to add this event to your calendar and refer to our press release for details on how to register.

截至 6 月的 6 個月裡，年初至今的運營現金流創下了 2.18 億美元的歷史新高，這要歸功於我們的團隊為優化整個公司的營運資本水平所做的出色工作。正如昨天發布的新聞稿中所指出的，我們很高興地宣布，我們將於9 月19 日舉辦虛擬投資者日，討論我們未來幾年的目標增長機會、Doors That Do More 戰略的執行以及我們的戰略。創造價值的長期財務目標。我鼓勵您將此活動添加到您的日曆中，並參閱我們的新聞稿以了解有關如何註冊的詳細信息。

Moving to the business and operations highlights for the quarter. As expected, we saw weaker demand in Q2 compared to last year due to double-digit declines in both housing starts and RRR activity. During the quarter, we were encouraged to see early signs of an uptick in U.S. new home construction. While the scale and durability of this trend is still to be determined, we believe first half volume trends are likely to continue throughout the year, with new construction-related demand stronger than we originally expected, offset by softer-than-expected demand in RRR, resulting in volumes down low to mid-teens for the year.

轉向本季度的業務和運營亮點。正如預期的那樣，由於新屋開工和存款準備金率活動均出現兩位數下降，我們看到第二季度的需求較去年疲軟。在本季度，我們欣喜地看到美國新房建設增長的早期跡象。雖然這一趨勢的規模和持久性仍有待確定，但我們認為上半年的成交量趨勢可能會持續全年，新建築相關的需求強於我們最初的預期，但被存款準備金率的需求疲軟所抵消，導致今年的銷量下降到十幾歲左右。

As the industry moves through this economic cycle, we remain laser focused on taking action to optimize our performance based on factors within our control. Price cost management is one of these important levers that we are using to preserve margins in a soft market to effectively coil the spring for accelerating margin growth when demand strengthens. Our global sourcing team is aggressively pursuing cost reductions on freight and raw materials to help offset ongoing inflation in overhead wages and benefits.

隨著行業經歷這個經濟周期，我們仍然專注於根據我們控制範圍內的因素採取行動來優化我們的業績。價格成本管理是我們用來在疲軟的市場中保持利潤的重要槓桿之一，以便在需求增強時有效地推動利潤加速增長。我們的全球採購團隊正在積極尋求降低貨運和原材料成本，以幫助抵消間接工資和福利的持續通脹。

In addition, I'm pleased to report that we are also on track to capture the cost benefits from our previously announced restructuring actions and the Endura integration synergies that we projected at the beginning of the year. Speaking of Endura, the business delivered an excellent quarter with margins improving year-over-year. The team is doing an outstanding job, and we remain confident in the value this acquisition would bring to both our customers and our investors.

此外，我很高興地報告，我們也有望從之前宣布的重組行動和年初預計的 Endura 整合協同效應中獲得成本效益。說到 Endura，該業務季度表現出色，利潤率同比有所提高。該團隊的工作非常出色，我們對此次收購將為我們的客戶和投資者帶來的價值充滿信心。

We continue to optimize our manufacturing footprint in North American Residential business with the closure of another legacy plant, our second this year, and the opening of a new hybrid facility in Texas. These moves reflect our ongoing strategy to modernize and reshape our network to deliver a superior level of service that differentiates us in the market. I'll talk about this in more detail in just a moment. Overall, we're very happy with the performance in the quarter. We improved margins, we generated formidable cash flows to fund our capital allocation priorities, and we remain confident in our ability to deliver our full year outlook.

我們繼續優化我們在北美住宅業務的製造足跡，關閉了另一家遺留工廠（今年是我們的第二家），並在德克薩斯州開設了一家新的混合工廠。這些舉措反映了我們正在進行的戰略，即現代化和重塑我們的網絡，以提供卓越的服務水平，使我們在市場上脫穎而出。我稍後會更詳細地討論這個問題。總的來說，我們對本季度的表現非常滿意。我們提高了利潤率，產生了巨大的現金流來為我們的資本配置優先事項提供資金，並且我們對實現全年前景的能力仍然充滿信心。

Now let's turn to Slide 5. Earlier this year, we presented our 2023 playbook, which includes a number of margin opportunities and growth initiatives as outlined here on the left side of the slide. We currently have projects underway throughout the company that address all parts of this playbook. But today, I'd like to highlight one of our significant growth initiatives centered on enhancing value for our customers with superior service.

現在讓我們轉向幻燈片 5。今年早些時候，我們展示了 2023 年行動手冊，其中包括幻燈片左側概述的許多利潤機會和增長計劃。目前，我們整個公司正在進行一些項目，以解決本手冊的所有部分。但今天，我想強調我們的一項重大增長計劃，其重點是通過優質服務為客戶提高價值。

During the quarter, we opened a new hybrid production and distribution center in the Dallas Metropolitan Area. This facility was launched in collaboration with channel partners as a result of joint business planning focused on optimizing our collective supply chain. Consistent and reliable supply is one of our strategic pillars and an area where we continue to raise the bar. In addition to pre-hanging and finishing doors at this site for the retail channel, we are leveraging the space to pilot a new make-the-stock program for the wholesale channel. This program will allow us to fill orders for full pallets of high-moving SKUs in just 3 days. This is less than half the time it would take to fulfill a request through the traditional make-to-order process.

本季度，我們在達拉斯都會區開設了一個新的混合生產和分銷中心。該設施是與渠道合作夥伴合作推出的，是專注於優化我們集體供應鏈的聯合業務規劃的結果。持續可靠的供應是我們的戰略支柱之一，也是我們不斷提高標準的領域。除了在此站點為零售渠道預掛和整理門外，我們還利用該空間為批發渠道試點新的庫存計劃。該計劃將使我們能夠在短短 3 天內完成滿托盤高流動 SKU 的訂單。這還不到通過傳統按訂單流程滿足請求所需時間的一半。

This hybrid facility and new Quick Ship program is a great example of how we are leveraging supply chain optimization to improve service and using strategic investments in reliable supply to create win-win opportunities together with our channel partners. Dallas and the South Central region are high-growth housing markets and an ideal place for both Masonite and our channel partners to benefit from these capabilities. My congratulations go out to the sales and operations teams who have brought this project to life, and my sincere appreciation to our business partners who are embracing and benefiting from our Doors That Do More strategy.

這種混合設施和新的快速運輸計劃是我們如何利用供應鏈優化來改善服務以及如何利用可靠供應方面的戰略投資與渠道合作夥伴一起創造雙贏機會的一個很好的例子。達拉斯和中南部地區是高增長的房地產市場，也是 Masonite 和我們的渠道合作夥伴從這些功能中受益的理想場所。我祝賀銷售和運營團隊使這個項目成為現實，並對我們的業務合作夥伴表示誠摯的感謝，他們接受我們的“Doors That Do More”戰略並從中受益。

I'm pleased with the progress we're making on all of our growth initiatives, and I look forward to discussing them with you in more detail at our upcoming Investor Day. Now I'd like to turn the call over to Russ to provide more details on our second quarter financial performance. Russ?

我對我們所有增長計劃所取得的進展感到高興，我期待著在即將到來的投資者日與您更詳細地討論這些計劃。現在我想將電話轉給 Russ，以提供有關我們第二季度財務業績的更多詳細信息。拉斯？

Thanks, Howard, and good morning, everyone. Let's turn to Slide 7 and start with a review of our consolidated financial results. Second quarter net sales were $742 million, down 3% from last year. In line with our original expectations, we saw a 15% decrease in volume as well as a combined 2% decrease from unfavorable foreign exchange and component sales. These were partially offset by an 8% benefit from the Endura acquisition and a 6% increase in AUP. The volume decline continues to reflect soft end market demand in our North American and U.K. residential markets.

謝謝霍華德，大家早上好。讓我們轉向幻燈片 7，首先回顧一下我們的綜合財務業績。第二季度淨銷售額為 7.42 億美元，比去年下降 3%。與我們最初的預期一致，我們看到銷量下降了 15%，而且不利的外彙和零部件銷售導致銷量合計下降了 2%。這些被收購 Endura 帶來的 8% 收益和 AUP 6% 的增長部分抵消。銷量下降繼續反映了北美和英國住宅市場的軟終端市場需求。

Year-over-year gross profit decreased just 1% to $178 million, but gross margin improved 40 basis points to 24% on strong execution of our cost management initiatives. Selling, general and administration expenses were $99 million, up 9% year-over-year due to the addition of SG&A from Endura. Second quarter net income was $48 million compared to $59 million, decrease was driven by higher non-EBITDA costs, including increased depreciation and amortization, higher interest expense and costs associated with previously announced restructuring plans, all partially offset by lower income tax expense.

毛利潤同比僅下降 1%，至 1.78 億美元，但由於我們大力執行成本管理計劃，毛利率提高了 40 個基點，達到 24%。由於 Endura 的 SG&A 費用增加，銷售、一般和管理費用為 9900 萬美元，同比增長 9%。第二季度淨利潤為4800 萬美元，而去年同期為5900 萬美元，下降的原因是非EBITDA 成本增加，包括折舊和攤銷增加、利息支出以及與先前宣布的重組計劃相關的成本增加，所有這些都被較低的所得稅費用部分抵消。

Diluted earnings per share in the quarter were $2.16 compared to $2.58 last year. Adjusted earnings per share, which exclude restructuring costs, were $2.30. Adjusted EBITDA was $118 million, consistent with last year. Adjusted EBITDA margin, however, improved 50 basis points, which like gross margin was driven by excellent cost management. On the right-hand side of the slide is more detail on factors that contributed to the solid delivery of adjusted EBITDA in the quarter. The combined benefit of volume and AUP remained favorable as carryover price and positive mix was enough to offset volume declines.

本季度稀釋後每股收益為 2.16 美元，去年同期為 2.58 美元。調整後每股收益（不包括重組成本）為 2.30 美元。調整後 EBITDA 為 1.18 億美元，與去年一致。然而，調整後的 EBITDA 利潤率提高了 50 個基點，這與毛利率一樣是由出色的成本管理推動的。幻燈片右側更詳細地介紹了有助於本季度調整後 EBITDA 穩健交付的因素。成交量和 AUP 的綜合效益仍然有利，因為結轉價格和積極的組合足以抵消成交量的下降。

Material costs overall remained slightly unfavorable, despite reductions in the inbound freight. Factory and distribution costs also had a net negative impact on adjusted EBITDA in Q2 as cost management and continuous improvement initiatives only partially offset the substantial impact of volume deleveraging and wage and benefit inflation. Our operations team remains keenly focused on implementing further actions where possible to align costs with current production volumes. SG&A had a positive impact on adjusted EBITDA, primarily driven by savings from our restructuring actions.

儘管入境運費減少，但材料成本總體仍略有不利。工廠和分銷成本也對第二季度調整後 EBITDA 產生了淨負面影響，因為成本管理和持續改進舉措僅部分抵消了數量去槓桿化以及工資和福利通脹的實質性影響。我們的運營團隊仍然熱衷於盡可能採取進一步行動，使成本與當前產量保持一致。 SG&A 對調整後 EBITDA 產生了積極影響，這主要是由於我們重組行動帶來的節省。

You will see on the acquisition line that Endura contributed about $10 million to our consolidated results. As Howard mentioned, the Endura team delivered a strong second quarter. Despite experiencing similar end market softness that impacted our core North American Residential business, Endura delivered an adjusted EBITDA margin in the mid-teens, up 50 basis points year-on-year due to cost management and steady progress on unlocking synergies.

您將在收購線上看到 Endura 為我們的綜合業績貢獻了約 1000 萬美元。正如霍華德提到的，Endura 團隊在第二節表現強勁。儘管經歷了類似的終端市場疲軟影響了我們的核心北美住宅業務，但由於成本管理和釋放協同效應的穩步進展，Endura 的調整後 EBITDA 利潤率達到了十幾歲，同比增長了 50 個基點。

Moving on to Slide 8, let's look at highlights from the North American Residential segment. Second quarter net sales were $585 million. This 4% year-over-year decrease was driven by an 18% decline in volume and a combined 1% decrease from unfavorable foreign exchange and lower component sales, partially offset by 5% AUP growth and a 10% lift from the Endura acquisition. Constrained end market demand and customer inventory adjustments largely accounted for the volume decline this quarter, with the balance attributable to our purposeful decisions to prioritize margin over unit volume.

轉到幻燈片 8，讓我們看看北美住宅領域的亮點。第二季度淨銷售額為 5.85 億美元。同比下降 4% 的原因是銷量下降 18%，以及不利的外彙和零部件銷售下降導致銷量下降 1%，但部分被 5% 的 AUP 增長和收購 Endura 帶來的 10% 的增長所抵消。終端市場需求受限和客戶庫存調整在很大程度上導致了本季度銷量下降，而平衡可歸因於我們有目的地決定將利潤優先於單位銷量。

Adjusted EBITDA in the quarter was $118 million, down 6% from last year. Adjusted EBITDA margin remained above 20% despite dilution from Endura as our 2023 playbook initiatives fully offset the impact of meaningfully lower volumes. Endura delivered great results in the quarter. The team is slightly ahead of plan in delivering the expected $8 million in annualized synergies and then continue to focus on maintaining their customer service and product innovation edge in the market.

該季度調整後 EBITDA 為 1.18 億美元，較去年下降 6%。儘管受到 Endura 的稀釋，調整後的 EBITDA 利潤率仍保持在 20% 以上，因為我們的 2023 年劇本計劃完全抵消了銷量大幅下降的影響。 Endura 在本季度取得了出色的業績。該團隊略超前地實現了預期 800 萬美元的年化協同效應，然後繼續專注於保持其在市場上的客戶服務和產品創新優勢。

During the quarter, we also began the nationwide rollout of our Masonite Performance Door System at retail. This best-in-class exterior fiberglass door system uses patented Endura components and is 64% better at keeping air and water out than the leading competitor. This is the second nationwide retail product introduction this year, following on our Barn Door launch in Q1 and is a great example of how we are executing on our strategy to drive product leadership and mix shift in the North American Residential market.

在本季度，我們還開始在全國零售業推出 Masonite 高性能門系統。這款一流的外部玻璃纖維門系統採用獲得專利的 Endura 組件，在阻止空氣和水進入方面比領先競爭對手高出 64%。這是繼第一季度推出穀倉門之後，今年在全國范圍內推出的第二個零售產品，也是我們如何執行戰略以推動北美住宅市場的產品領先地位和組合轉變的一個很好的例子。

Now turning to Slide 9 and our Europe segment. Net sales of $66 million, were down 11% year-over-year, driven by a 9% decrease in volume and a 2% decrease in component sales. Adjusted EBITDA was $3 million in the quarter with an adjusted EBITDA margin of 4%. Margin was down year-over-year primarily due to volume deleveraging, particularly in the higher-margin exterior door business. In Europe, we do most of our business in the U.K. market, which continues to experience high single-digit inflation and steadily rising interest rates. Our sales decline there was generally reflective of overall market dynamics. New home completions were down 11% in the quarter with RRR activity tracking down 9% for the full year.

現在轉向幻燈片 9 和我們的歐洲部分。淨銷售額為 6600 萬美元，同比下降 11%，原因是銷量下降 9%，零部件銷售額下降 2%。本季度調整後 EBITDA 為 300 萬美元，調整後 EBITDA 利潤率為 4%。利潤率同比下降主要是由於銷量去槓桿化，特別是在利潤率較高的外門業務中。在歐洲，我們的大部分業務在英國市場開展，該市場繼續經歷高單位數通脹和穩步上升的利率。我們在那裡的銷售額下降通常反映了整體市場動態。本季度新房竣工量下降 11%，全年存款準備金率活動下降 9%。

We took some limited price increases in Europe in July to offset inflation on material costs, wages and benefits and overhead, and we continue to carefully manage price cost. The housing and RRR markets are both forecasted to grow modestly in 2024 as consumer confidence and the cost of living stabilizes. In the meantime, our sales and marketing teams are focused on a new wave of customer engagement activities aimed at improving Masonite's share of wallet and offsetting current overall market softness where possible.

7月份，我們在歐洲進行了一些有限的價格上漲，以抵消材料成本、工資和福利以及管理費用的通貨膨脹，並且我們繼續謹慎管理價格成本。隨著消費者信心和生活成本的穩定，預計住房和存款準備金市場將在 2024 年溫和增長。與此同時，我們的銷售和營銷團隊專注於新一波的客戶參與活動，旨在提高 Masonite 的錢包份額，並儘可能抵消當前整體市場疲軟的影響。

Moving to Slide 10 and the Architectural segment. Net sales increased 16% year-over-year to $88 million, driven by a 24% increase in AUP, partially offset by a 5% decrease from lower component sales and a 3% decrease in volume. Adjusted EBITDA was $7 million in the quarter, up from breakeven in the prior year and up $2 million sequentially from Q1 2023, driven by carryover price and a particularly favorable mix of high AUP project work in the quarter.

轉到幻燈片 10 和建築部分。受 AUP 增長 24% 的推動，淨銷售額同比增長 16% 至 8800 萬美元，但部分被零部件銷售額下降 5% 的下降和銷量下降 3% 所抵消。本季度調整後EBITDA 為700 萬美元，高於上一年的盈虧平衡點，較2023 年第一季度連續增長200 萬美元，這主要是受到結轉價格和本季度高AUP 項目工作特別有利的組合的推動。

Overall, this business continues to benefit from the hard work that the team has done to manage price cost, stabilize our supply chain and optimize our processes to drive both efficiencies and customer service improvements.

總體而言，該業務繼續受益於團隊在管理價格成本、穩定供應鍊和優化流程以提高效率和改善客戶服務方面所做的辛勤工作。

In Q1, we announced the initiation of a formal review of strategic alternatives for the Architectural segment, and that review remains in progress. A number of outside parties have expressed interest in acquiring the business and divestiture remains an option for us. We will continue to keep you informed as we move forward through this process.

在第一季度，我們宣布開始對建築部門的戰略替代方案進行正式審查，該審查仍在進行中。許多外部人士都表示有興趣收購該業務，而剝離仍然是我們的一個選擇。在我們推進這一過程的過程中，我們將繼續向您通報情況。

Let's turn now to Slide 11 for a summary of our liquidity and cash flow performance. At quarter end, our total available liquidity was $637 million, including $317 million in unrestricted cash. Net debt was $788 million, resulting in a net debt to adjusted EBITDA leverage ratio of 1.8x on a trailing 12-month basis, down from 2.1x at the end of the first quarter. Cash provided by operations was $218 million through the end of the second quarter compared to $34 million in the same period of 2022. As Howard noted earlier, the significantly higher cash generation is being driven principally by strong execution of our enterprise-wide working capital reduction program. Year-to-date, capital expenditures of approximately $58 million continue to track with our full year outlook.

現在讓我們轉向幻燈片 11，總結我們的流動性和現金流表現。截至季度末，我們的可用流動資金總額為 6.37 億美元，其中包括 3.17 億美元的非限制性現金。淨債務為 7.88 億美元，導致過去 12 個月淨債務與調整後 EBITDA 槓桿比率為 1.8 倍，低於第一季度末的 2.1 倍。截至第二季度末，運營提供的現金為 2.18 億美元，而 2022 年同期為 3,400 萬美元。正如霍華德之前指出的，現金產生量顯著增加主要是由於我們企業範圍內營運資本削減的強有力執行程序。年初至今，約 5800 萬美元的資本支出繼續符合我們的全年展望。

Year-to-date free cash flow was $160 million, positioning us well to achieve or surpass the upper end of our outlook for the full year. During the second quarter, Masonite repurchased approximately 159,000 shares of stock for $14 million at an average price of $90.58. We also repaid $9 million of long-term debt in the quarter, in line with the amortization required under our Term Loan A. And with that, I'll turn the call back to Howard for closing comments.

年初至今的自由現金流為 1.6 億美元，這使我們能夠很好地實現或超越全年預期的上限。第二季度，Masonite 以 1400 萬美元的價格回購了約 159,000 股股票，平均價格為 90.58 美元。我們還在本季度償還了 900 萬美元的長期債務，符合我們的定期貸款 A 要求的攤銷。這樣，我將把電話轉回霍華德以徵求結案評論。

Thanks, Russ. In summary, I'm very pleased with our financial results for the quarter and with the great work our teams are doing to prioritize and deliver improvements throughout our business. Execution of our 2023 playbook is effectively supporting margins and enhancing our long-term competitive position with an optimized manufacturing footprint, deeper engagement with our channel partners and expanded consumer access to our best-in-class products.

謝謝，拉斯。總之，我對本季度的財務業績以及我們的團隊在確定整個業務的優先順序和實現改進方面所做的出色工作感到非常滿意。我們 2023 年戰略的執行通過優化製造足跡、與渠道合作夥伴更深入的接觸以及擴大消費者對我們一流產品的接觸範圍，有效地支持了利潤並增強了我們的長期競爭地位。

And there's more to come. We continue to invest in our Doors That Do More initiatives to fuel growth, differentiation and category leadership, and we look forward to sharing updates with you about continued enhancements to our business in future quarters. Right now, demand in our end markets is constrained but consistent with our original outlook, and we remain confident in the medium- and long-term secular tailwinds that underpin demand for our products.

還有更多的事情即將發生。我們繼續投資於“Doors That Do More”計劃，以推動增長、差異化和品類領導地位，我們期待與您分享有關未來幾個季度我們業務持續增強的最新信息。目前，我們終端市場的需求受到限制，但與我們最初的前景一致，我們對支撐我們產品需求的中長期長期有利因素仍然充滿信心。

Our solid first half gives us confidence in the full year financial outlook initially shared with you in February. As we work through the back half of the year, we expect that end market performance will continue to depend heavily on the macroeconomic environment, but we believe that our 2023 playbook positions Masonite for optimal performance in both this year and next. We are taking advantage of a significant opportunity to rightsize our working capital and year-to-date have delivered the highest level of cash flow since Masonite became a public company in 2013.

上半年的穩健表現讓我們對 2 月份最初與您分享的全年財務前景充滿信心。在今年下半年，我們預計終端市場表現將繼續在很大程度上取決於宏觀經濟環境，但我們相信，我們的 2023 年策略將使 Masonite 在今年和明年都能實現最佳表現。我們正在利用一個重要的機會來調整我們的營運資本，今年迄今為止，我們已經實現了自 2013 年 Masonite 成為上市公司以來最高水平的現金流。

Finally, we hope that you'll join us for our 2023 Investor Day scheduled for September 19, where Russ and I will be joined by other Masonite leaders to give you deeper insights into our business, our strategy and our plans for growth over the next several years. Now I'd like to open the call to your questions. Operator?

最後，我們希望您能參加我們定於9 月19 日舉行的2023 年投資者日，屆時我和Russ 以及其他Masonite 領導者將與您一起，讓您更深入地了解我們的業務、我們的戰略以及我們未來的增長計劃幾年。現在我想開始回答大家的問題。操作員？

(Operator Instructions) Our first question comes from the line of Trey Grooms with Stephens.

（操作員說明）我們的第一個問題來自 Trey Grooms 和 Stephens 的線路。

First, I wanted to kind of touch on the volume trends. Howard, I think, you mentioned first half volume trends should continue through the balance of the year. With the uptick that we've seen in some of the single-family housing start data and also some of the more positive commentary we've been hearing from homebuilders, at what point would you guys expect to see a benefit from that or maybe an uptick in your volumes going into single-family?

首先，我想談談成交量趨勢。霍華德，我認為，您提到上半年的銷量趨勢應該會持續到今年的剩餘時間。隨著我們在一些單戶住房開工數據中看到的上升，以及我們從房屋建築商那裡聽到的一些更積極的評論，你們預計在什麼時候會從中受益，或者可能是您的單戶住宅數量有所增加嗎？

Yes, Trey, this is Howard. Great question. We're certainly encouraged by the recent uptick in U.S. single-family housing starts. It's a positive trend. And as we've said many times, the midterm and long-term secular tailwinds for demand for our products are strong. It's a matter of pegging when that's going to hit, right? Keep in mind that in the first half, single-family housing starts were down 21%, and there's more doors in a single-family home than in a multifamily home. And so we need that single-family home to uptick, as you said. So that's an encouraging sign.

是的，特雷，這是霍華德。很好的問題。最近美國單戶住宅開工量的上升無疑令我們感到鼓舞。這是一個積極的趨勢。正如我們多次說過的，我們產品需求的中長期長期推動力強勁。這是一個確定何時發生的問題，對嗎？請記住，上半年，單戶住宅開工量下降了 21%，而且單戶住宅的門數比多戶住宅的門數還要多。因此，正如您所說，我們需要單戶住宅的發展。所以這是一個令人鼓舞的跡象。

The flip side of that is we think RRR is going to be weaker than we had originally projected but consistent with what we saw in the first half. So when I said we expect second half volumes to be consistent, it's sort of that new home construction's better than we expected going into the year, and that will be strengthened by single-family starts certainly, and RRR slightly worse than we expected going into the year. So volume is really very consistent with how we expected the year to play out.

另一方面，我們認為存款準備金率將低於我們最初的預測，但與我們上半年看到的情況一致。因此，當我說我們預計下半年銷量將保持一致時，新房建設量將好於我們今年的預期，而且單戶住宅的開工肯定會加強這一點，而存款準備金率略差於我們今年的預期那一年。因此，成交量確實與我們對今年的預期非常一致。

It's just a matter, as I said, Trey, of at what time is that going to flip for us, third, late third, fourth quarter, first quarter next year, a little difficult to peg. But we think the playbook is right to allow us to deliver optimal performance, and we're very confident in the long-term tailwinds.

正如我所說，特雷，這只是我們什麼時候會發生的問題，第三季度、第三季度末、第四季度、明年第一季度，有點難以確定。但我們認為這個策略是正確的，可以讓我們提供最佳的性能，並且我們對長期的順風車非常有信心。

Got it. And then I think maybe you touched on it just a little bit, but any color you could give us kind of on the -- your thoughts on the channel inventory levels out there as we're kind of progressing into maybe the seasonal slower period, but also ahead of what maybe could be a better demand picture next spring?

知道了。然後我想也許你只是觸及了一點點，但是你可以給我們任何顏色——你對渠道庫存水平的想法，因為我們可能正在進入季節性放緩時期，但也要提前考慮明年春天可能會出現更好的需求情況？

I'll let Chris take that one. Yes, Chris is closest to that, so go ahead, Chris.

我會讓克里斯拿那個。是的，克里斯最接近這個目標，所以繼續吧，克里斯。

Yes. All right, thanks. So Trey, on that one, just as a reminder, our business is pretty evenly split between the RRR side as well as new construction. On the new construction side, which is mostly our wholesale business and services that, we see the inventory position is relatively balanced. Obviously, there's some green shoots happening in the near term here. But as we look forward and we look at where we're sitting at today, we think we're in a very good position to provide that reliable supply and make sure that we're able to capture that demand as it returns, as Howard discussed.

是的。好的，謝謝。特雷（Trey），在此提醒一下，我們的業務在存款準備金（RRR）方面和新建築方面相當均勻地分配。在新建築方面，主要是我們的批發業務和服務，我們看到庫存狀況相對平衡。顯然，短期內將會出現一些新芽。但當我們展望未來並審視我們今天所處的位置時，我們認為我們處於非常有利的位置，可以提供可靠的供應，並確保我們能夠在需求回歸時抓住需求，正如霍華德所說討論過。

On RRR side, which is more of the retail side of the business, we haven't seen a correction. There has been, obviously, a weaker trend on RRR than what we had expected coming into the year. But as you look at our back half guide, we've contemplated some inventory correction potentially happening. So we still think kind of back to the earlier comments, the year is largely playing out as expected and we think that our guide reflects that.

在存款準備金方面，更多的是零售方面的業務，我們還沒有看到調整。顯然，存款準備金率的趨勢比我們今年的預期要弱。但當您查看我們的後半部分指南時，我們已經考慮到可能會發生一些庫存調整。因此，我們仍然回顧之前的評論，這一年基本上按照預期進行，我們認為我們的指南反映了這一點。

Got it. That's super helpful. I'll pass it on and look forward to hearing from you guys in September.

知道了。這非常有幫助。我會把它轉達並期待九月份收到你們的消息。

Our next question comes from the line of Steven Ramsey with Thompson Research Group.

我們的下一個問題來自湯普森研究小組的史蒂文拉姆齊。

Maybe to follow on the RRR outlook being lowered a bit, can you talk to order of magnitude there and if that's solely from the retail channel or if that includes any wholesale?

也許隨著存款準備金率前景的下調，您能談談下調的幅度嗎？這是否僅來自零售渠道，還是包括任何批發渠道？

Yes, Steven, good question. The primary RRR business is driven through our retail channel. Of course, wholesalers participate in that channel as well, but they're more focused on new construction. And when we say worse, we're talking about worse than the projections we had to start the year. So we're not expecting RRR to get any worse than it is now. It's just slightly worse than it was.

是的，史蒂文，好問題。主要存款準備金業務是通過我們的零售渠道推動的。當然，批發商也參與該渠道，但他們更關注新建工程。當我們說更糟糕時，我們談論的是比我們年初的預測更糟糕的情況。因此，我們預計存款準備金率不會比現在更差。只是比原來差了一點而已。

So remember, we said that we thought new construction would be down 20%, and we thought RRR would be down high single digits. And what we found is that new construction is sort of down now mid-teens and RRR is down maybe low double digits. So the flip -- and our business is slightly skewed towards RRR. So it flipped a little bit in how that mix is playing out, but generally, that means volume is as we expected. So this isn't a big meaningful shift but there is a flip between RRR and new construction.

所以請記住，我們說過我們認為新開工建設將下降 20%，我們認為存款準備金率將下降高個位數。我們發現，新建築現在下降了十幾歲左右，存款準備金率可能下降了兩位數。因此，情況正好相反，我們的業務稍微偏向存款準備金率。因此，混音的播放方式發生了一些變化，但總的來說，這意味著音量符合我們的預期。因此，這並不是一個有意義的重大轉變，但存款準備金率和新建築之間存在翻轉。

Okay, helpful. And then on the Texas facility, which I'm sure more of this will be fleshed out at the investor event, but a couple of questions there on, are you projecting margin out of the plant to be well in excess of the legacy plant it is replacing? Could you walk through the components order of magnitude of that difference? And ultimately, are volumes expected to be well in excess of the plant it is replacing?

好的，有幫助。然後是德克薩斯州的工廠，我確信更多的內容將在投資者活動中得到充實，但有幾個問題，你預計工廠的利潤率是否會遠遠超過傳統工廠？正在更換？您能詳細說明一下差異的組成部分嗎？最終，預計產量是否會遠遠超過其所取代的工廠？

Yes, Steven, it's Russ. I'll take that one. I wouldn't necessarily think about this facility as focused on a financial or margin play necessarily as focused on a service play, right? It's a hybrid facility that has the ability to both hold inventory to execute on this make-the-stock program that we've talked about with some of our key channel partners in that region as well as do door fabrication work that could be absorbed from other sites.

是的，史蒂文，我是拉斯。我會接受那個。我不一定認為該設施專注於金融或利潤遊戲，也不一定專注於服務遊戲，對吧？這是一個混合設施，既能夠持有庫存以執行我們與該地區的一些主要渠道合作夥伴討論的庫存計劃，也能夠進行門製造工作，這些工作可以從其他網站。

It's not being absorbed necessarily from the plants that we have announced closure for. So this is more about concentrating in 1 large facility where we can more efficiently service our customers in that area with inventory that we can turn on a rapid basis. It's supporting our channel partners' growth in a key growth market. I wouldn't view this as being meaningfully accretive or dilutive from a margin point of view for Chris' NA Res business.

它不一定會從我們宣布關閉的工廠中吸收。因此，這更多的是集中在一個大型設施中，我們可以通過可以快速周轉的庫存更有效地為該地區的客戶提供服務。它支持我們的渠道合作夥伴在關鍵增長市場的增長。從利潤角度來看，我不認為這對 Chris 的 NA Res 業務具有有意義的增值或稀釋作用。

Our next question comes from the line of Tim Wojs with Baird.

我們的下一個問題來自 Tim Wojs 和 Baird 的對話。

Maybe just kind of on the pricing side. I know that you're still kind of benefiting from some of the carryover price last year, specifically in, I guess, across all the businesses. But kind of what are you seeing in the market around pricing? And how should we think kind of the back half and into '24 should kind of look from a price mix perspective?

也許只是在定價方面。我知道您仍然從去年的結轉價格中受益，特別是在所有業務中。但您對市場定價有何看法？從價格組合的角度來看，我們應該如何看待後半段和 24 世紀？

Yes. Thanks for the question, Tim. Obviously, price cost management is really an important part of our operating philosophy. We talked about it consistently for quite some time. And as I mentioned last quarter, really we protect to manage price in inflationary markets, and we protect to manage margin in deflationary times. But really, it's important to know there's no one-size-fits-all solution here. So we're managing price cost very tightly by product and by segment and by geography.

是的。謝謝你的提問，蒂姆。顯然，價格成本管理確實是我們經營理念的重要組成部分。我們持續討論了很長一段時間。正如我上個季度提到的，我們確實在通脹市場中保護管理價格，並在通貨緊縮時期保護管理利潤。但實際上，重要的是要知道這裡沒有一刀切的解決方案。因此，我們按產品、細分市場和地理位置非常嚴格地管理價格成本。

And in some cases, that means we're going to walk away from business with less strategic customers that's focus sort of solely on finding the cheapest door. So when given the choice for us between lowering our price and lowering our margins in order to retain volume, which is generally counter to that price cost philosophy, we're generally going to choose to maintain and grow our margins, which is this notion of coiling the spring for volume recovery.

在某些情況下，這意味著我們將放棄與戰略性較低的客戶開展業務，這些客戶只專注於尋找最便宜的門。因此，當我們在降低價格和降低利潤以保持銷量之間做出選擇時（這通常與價格成本理念相反），我們通常會選擇維持和增加利潤，這就是這個概念捲繞彈簧以恢復體積。

Because it's important to note that the value homeowners ascribe to doors, which is more than they're paying today in many cases, we want to capture that value for us and for our channel partners. And we think we're bringing more value through our Doors That Do More strategy, including things like the service proposition with our new hybrid facility in Texas. So it's an interesting environment, obviously, today, but we are committed to our price cost management philosophy and protecting those margins to coil the spring for when demand returns. And as we said -- as I said earlier to Trey's question, the mid- to long-term secular tailwinds for this market are going to be significant.

因為值得注意的是，房主賦予門的價值在很多情況下都超過了他們今天支付的價格，因此我們希望為我們和我們的渠道合作夥伴捕捉到這種價值。我們認為，我們正在通過“Doors That Do More”戰略帶來更多價值，包括我們在德克薩斯州的新混合設施的服務主張。因此，顯然，今天這是一個有趣的環境，但我們致力於我們的價格成本管理理念，並保護這些利潤，以便在需求恢復時捲起彈簧。正如我們所說，正如我之前對特雷的問題所說，這個市場的中長期長期順風將是巨大的。

Okay, okay. So I mean, I guess just to clarify, I mean, are you seeing like incremental price pressure in the market? Or is it just overarchingly, you want to kind of make sure that you kind of optimize price for -- by product and by segment?

好吧好吧。所以我的意思是，我想只是為了澄清一下，我的意思是，您是否看到市場上的價格壓力增加？或者只是總體而言，您想確保按產品和細分市場優化價格？

Well, you can imagine, Tim, in a cycle like this when demand is soft, we have a lot of competitors, some bigger national competitors and some smaller regional competitors. And they all choose to behave a little differently depending on the circumstances. So I think it varies a bit by sort of by customer and by region and who is there to supply them. Again, really not a one-size-fits-all.

好吧，你可以想像，蒂姆，在這樣一個需求疲軟的周期中，我們有很多競爭對手，一些較大的全國性競爭對手和一些較小的區域性競爭對手。他們都會根據具體情況選擇採取稍微不同的行為。所以我認為，根據客戶、地區以及供應商的不同，情況會有所不同。再說一遍，確實不是一刀切的。

I can't say that broadly we're seeing across the country pricing pressure, but there are certainly pockets where we have opportunities to lower our price in order to retain volume. And in those cases, we generally choose not to do that.

我不能說我們在全國范圍內都看到了價格壓力，但肯定在某些地方我們有機會降低價格以保持銷量。在這些情況下，我們通常選擇不這樣做。

Okay, okay. Understood. And then just, Russ, maybe kind of flipping to free cash flow. I mean really good performance here in the quarter. How are you kind of thinking about the free cash flow for the year? And I'm going to try to squeeze 1 more now that I think about it. But just Endura, I mean, the profit contribution there looked to be better, at least that we modeled and maybe versus expectations. So just kind of how do you expect that Endura business to kind of trend for the rest of the year?

好吧好吧。明白了。然後，拉斯，也許會轉向自由現金流。我的意思是本季度的表現非常好。您如何看待今年的自由現金流？現在我想起來了，我將嘗試再擠 1 個。但我的意思是，就 Endura 而言，那裡的利潤貢獻看起來更好，至少是我們建模的，也許與預期相比。那麼，您預計 Endura 業務在今年剩餘時間內的趨勢如何？

Okay. So let me cover each of those 2 pieces in order, Tim. First of all, with respect to the cash flow performance, we are very pleased. The business is responding very well to some very purposeful initiatives that we put in place earlier this year to specifically manage working capital. And of the $160 million of free cash flow that you've seen from the business in the first half, which is it compares to a very modest use of cash in the first half last year, over $90 million of that is driven by working capital improvements.

好的。蒂姆，讓我按順序介紹這兩部分。首先，就現金流表現而言，我們非常滿意。該業務對我們今年早些時候為專門管理營運資金而採取的一些非常有目的的舉措反應良好。上半年公司的自由現金流為 1.6 億美元，與去年上半年的現金使用量非常有限相比，其中超過 9000 萬美元是由營運資本驅動的改進。

And so those strategies that I talked about, they're not just about inventory resetting to more normalized levels now the supply chains are starting to heal. It's across all areas, harmonizing our payment terms, where we strategically place inventory in the network so that we can run and still maintain very reliable service levels with leaner levels of inventory in the balance sheet and then also harmonizing our AP terms. And we think that this is a multiyear effort and with multiyear results.

因此，我談到的這些策略不僅僅是現在供應鏈開始癒合時將庫存重置到更正常化的水平。它涉及所有領域，協調我們的付款條件，我們戰略性地將庫存放置在網絡中，以便我們能夠運行並仍然保持非常可靠的服務水平，資產負債表中的庫存水平較低，然後還協調我們的AP 條款。我們認為這是一項多年的努力並取得了多年的成果。

And if I just step back and give you maybe some context around the level of improvement we've seen from a working capital ratio point of view, when our working capital peaked, call it, middle of last year, our core working capital, which we define as receivables and inventory less trade AP, so setting aside accrued expenses, it peaked at almost 25% of trailing 12-month net sales. We ended the quarter with that at roughly 21%. And we think that there's probably a pathway to trend that a little bit lower even by the time we get to the end of the year and then improve it further across '24 and '25.

如果我退一步，給你們一些關於我們從營運資本比率的角度看到的改善水平的背景信息，當我們的營運資本達到頂峰時，我們可以將其稱為去年中期我們的核心營運資本，我們將應收賬款和庫存減去貿易應付賬款定義為應收賬款和庫存，因此撇開應計費用，其峰值幾乎達到過去12 個月淨銷售額的25%。本季度結束時，這一比例約為 21%。我們認為，即使到了年底，趨勢也可能會稍微降低，然後在 24 年和 25 年進一步改善。

So that's why I commented as I did during the prepared remarks that, that progress and the strong execution the team has demonstrated, that leaves us pretty confident that we're in a position to hit or even exceed the top end of the $220 million, $250 million of free cash flow guide that we provided earlier this year.

這就是為什麼我在準備好的發言中評論道，團隊所表現出的進步和強大的執行力，讓我們非常有信心，我們有能力達到甚至超過 2.2 億美元的上限，我們今年早些時候提供了2.5 億美元的自由現金流指南。

Turning to Endura, the team is doing a really nice job, as we commented on, around managing costs in an environment where they are also seeing volume pressures that the broader North American Residential market is. And they're working very quickly on some of the synergy realization. It's running slightly ahead. Now there's some seasonality in that business also, right? So I wouldn't necessarily expect that, that business is going to deliver mid-teens margins through the balance of the year or even for the year in its entirety. But the fact that they're performing as they are in what's a really difficult macro backdrop for the North American Res business broadly is very encouraging to us.

至於 Endura，正如我們所評論的那樣，該團隊在管理成本方面做得非常好，他們也看到了更廣泛的北美住宅市場的銷量壓力。他們正在非常迅速地實現一些協同效應。它稍微領先一點。現在該行業也有一些季節性，對嗎？因此，我不一定期望該業務能夠在今年剩餘時間甚至整個一年內實現十幾歲左右的利潤率。但事實上，他們在北美房地產業務總體上非常困難的宏觀背景下的表現對我們來說非常令人鼓舞。

And longer term, we're only that much more excited about how the development routine between the door and the system evolves. And Howard made a comment the other day that stuck with me, and I've seen it myself too. It is really cool to watch how the product development teams between Endura and legacy Masonite work together because 1 was all about optimizing performance of frame components. The other was all about optimizing performance of the door slab. You put the 2 together and you're seeing light bulbs go off in new ways. And so we think that only improves the long-term value realization opportunity from this asset, particularly in the exterior door margin.

從長遠來看，我們對門和系統之間的開發例程如何演變更加興奮。霍華德那天發表的評論讓我印象深刻，我自己也看到過。觀看 Endura 和傳統 Masonite 之間的產品開發團隊如何合作真的很酷，因為 1 都是為了優化框架組件的性能。另一個是關於優化門板的性能。你把兩者放在一起，你會看到燈泡以新的方式亮起。因此，我們認為這只會提高該資產的長期價值實現機會，特別是在外門利潤方面。

Okay. Good luck on the rest of the year.

好的。祝你今年剩下的時間一切順利。

Mr. Heckes, we have no further questions at this time. I would now like to turn the floor back over to you for closing comments.

赫克斯先生，我們目前沒有其他問題。現在我想把發言權交還給您以供結束評論。

Thank you, Christine, and thank you all for joining us today. We appreciate your interest and your continued support. This concludes our call. Christine, will you please provide the replay instructions?

謝謝克里斯汀，也感謝大家今天加入我們。我們感謝您的關注和持續的支持。我們的通話到此結束。 Christine，您能提供重播說明嗎？

Thank you for joining Masonite's Second Quarter 2023 Earnings Conference Call. This conference call has been recorded. The replay may be accessed until August 23. To access the replay, please dial (877) 660-6853 in the U.S. or (201) 612-7415 outside the U.S. Enter conference ID #13739973. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

感謝您參加 Masonite 2023 年第二季度收益電話會議。本次電話會議已錄音。重播可在 8 月 23 日前觀看。要觀看重播，請在美國撥打 (877) 660-6853，在美國境外撥打 (201) 612-7415，輸入會議 ID #13739973。女士們、先生們，今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。