Griffon Corp (GFF) 2023 Q3 法說會逐字稿

Good morning, and welcome to the Griffon Corporation Fiscal Third Quarter 2023 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Brian Harris, CFO. Please go ahead.

早上好，歡迎參加 Griffon Corporation 2023 年第三季度財報電話會議。 （操作員說明）請注意，正在記錄此事件。我現在想將會議交給首席財務官布萊恩·哈里斯 (Brian Harris)。請繼續。

Thank you, Devi. Good morning, everyone. With me on the call is Ron Kramer, our Chairman and Chief Executive Officer. The call is being recorded and will be available for playback, the details of which are in our press release issued earlier today. As in the past, our comments will include forward-looking statements about the company's performance based on our views of Griffon's businesses and the environments in which they operate. Such statements are subject to inherent risks and uncertainties that can change as the world changes. Please see the cautionary statements in today's press release and in our various Securities and Exchange Commission filings. Finally, from today's remarks we'll adjust for those items that affect comparability between reporting periods. These items are explained in our non-GAAP reconciliations included in our press release. Now I'll turn the call over to Ron.

謝謝你，德維。大家，早安。與我一起參加電話會議的是我們的董事長兼首席執行官羅恩·克萊默 (Ron Kramer)。通話正在錄音，並將可供回放，詳細信息請參閱我們今天早些時候發布的新聞稿。與過去一樣，我們的評論將包括基於我們對 Griffon 業務及其運營環境的看法而對公司業績做出的前瞻性陳述。此類陳述存在固有風險和不確定性，這些風險和不確定性可能會隨著世界的變化而變化。請參閱今天的新聞稿以及我們向證券交易委員會提交的各種文件中的警告聲明。最後，根據今天的評論，我們將對影響報告期間之間可比性的那些項目進行調整。這些項目在我們的新聞稿中包含的非公認會計原則調節中進行了解釋。現在我將把電話轉給羅恩。

Thanks, Brian. Good morning, everyone, and thank you for joining us. As you can see from our third quarter results, Griffon's financial performance continues to exceed expectations. Our results were driven by the outstanding performance of our Home & Building Products, HBP segment, which continued to see year-over-year growth in commercial volume. Residential volume decreased as expected year-over-year as backlog levels normalized. HBP at favorable price and mix across all products and channels. HBP's performance is supported by increased investment in business development for both residential and commercial, following 2 years of reduced sales and marketing activity due to elevated backlog and long lead times. HBP continues to invest in productivity and innovation to further drive growth. Clopay has fundamentally raised the bar for performance expectations.

謝謝，布萊恩。大家早上好，感謝您加入我們。從我們第三季度的業績中可以看出，Griffon 的財務業績繼續超出預期。我們的業績得益於家居和建築產品 HBP 部門的出色表現，該部門的商業銷量繼續同比增長。隨著積壓水平正常化，住宅成交量同比下降。 HBP 以優惠的價格混合所有產品和渠道。 HBP 的業績得益於住宅和商業業務開發投資的增加，此前兩年，由於積壓訂單增加和交貨時間長，銷售和營銷活動減少。 HBP 繼續投資於生產力和創新，以進一步推動增長。 Clopay 從根本上提高了績效預期的標準。

Turning to the Consumer and Professional Products segment. CPP's results continue to reflect challenging market conditions. All channels and geographies were affected by reduced consumer demand and elevated customer inventory levels. As we announced last quarter, we addressed the impact of these market conditions on certain U.S. product lines. CPP is expanding its global sourcing strategy to include long-handled tools, material handling and wood storage and organizational product lines that are currently manufactured and sold in the U.S. market. By utilizing an asset-light structure, CPP's U.S. operations will be better positioned to serve customers with a more flexible and cost-effective global sourcing model.

轉向消費和專業產品領域。 CPP 的業績繼續反映出充滿挑戰的市場狀況。所有渠道和地區都受到消費者需求減少和客戶庫存水平上升的影響。正如我們上季度宣布的那樣，我們解決了這些市場狀況對某些美國產品線的影響。 CPP 正在擴大其全球採購戰略，以涵蓋目前在美國市場製造和銷售的長柄工具、物料搬運和木材存儲以及組織產品線。通過利用輕資產結構，CPP 的美國業務將能夠更好地以更靈活、更具成本效益的全球採購模式為客戶提供服務。

The global sourcing project is off to a solid start and remains on schedule and within budget. Specifically, there's been significant progress on our higher profile work streams around plant closures and ramping up suppliers. We'll provide more detail on our year-end earnings call in November.

全球採購項目已經有了一個良好的開端，並且仍按計劃進行並在預算之內。具體來說，我們在關閉工廠和增加供應商方面的更高調的工作流程取得了重大進展。我們將在 11 月份的年終收益電話會議上提供更多詳細信息。

Turning to capital allocation. During the quarter, we announced actions to enhance shareholder value that included a 25% increase to our regular quarterly dividend, raising it to $0.125 and a $200 million increase to our share repurchase program that brought the total authorization to $258 million.

轉向資本配置。本季度，我們宣布了提高股東價值的行動，包括將定期季度股息增加 25%，達到 0.125 美元，以及將股票回購計劃增加 2 億美元，使授權總額達到 2.58 億美元。

Earlier today, the Griffon Board authorized a $0.125 per share dividend payable on September 14, 2023, to shareholders of record on August 23. This marks the 48th consecutive quarterly dividend to shareholders, which has grown at an annualized compound rate of 17.6% since we initiated dividends in 2012.

今天早些時候，Griffon 董事會授權於2023 年9 月14 日向8 月23 日登記在冊的股東派發每股0.125 美元的股息。這標誌著連續第48 次向股東發放季度股息，自我們成立以來，該股息的年化複合率已達到17.6%。 2012年開始派息。

During this quarter, we repurchased 2.5 million shares or approximately 4.4% of our outstanding shares for $85 million at an average price of $33.58 per share. At June 30, $173 million remained under the share repurchase authorization. We continue to believe there is a significant disconnect between Griffon's share price and the intrinsic value of our businesses, and we will remain active and opportunistic with our share repurchases.

本季度，我們以 8500 萬美元的價格回購了 250 萬股股票，約佔已發行股票的 4.4%，平均價格為每股 33.58 美元。截至 6 月 30 日，股票回購授權仍有 1.73 億美元。我們仍然認為 Griffon 的股價與我們業務的內在價值之間存在顯著脫節，我們將繼續積極和機會主義地回購股票。

Turning to our guidance for the year. Based on our third quarter performance and our expectations for the fourth quarter, we are again raising our full year guidance. We now expect segment adjusted EBITDA to be $550 million compared to previous guidance of at least $525 million. In summary, these capital allocation actions and the fiscal 2023 guidance raise reflects the confidence Griffon's Board and management has in our strategic plan and outlook, as well as demonstrate our commitment to enhancing both immediate and long-term value to our shareholders.

轉向我們今年的指導。根據我們第三季度的業績和對第四季度的預期，我們再次提高了全年指導。我們現在預計部門調整後 EBITDA 將為 5.5 億美元，而之前的指導至少為 5.25 億美元。總之，這些資本配置行動和 2023 財年指導方針的提高反映了 Griffon 董事會和管理層對我們的戰略計劃和前景的信心，並表明我們致力於提高股東的短期和長期價值。

I'll turn it over to Brian for the financial update.

我會將其交給布萊恩以獲取最新財務信息。

Thank you, Ron. I'll start by discussing our third quarter consolidated performance on a continuing basis. Revenue of $683 million decreased by 11% and adjusted EBITDA before unallocated amounts were $153 million, increased by 3%, both in comparison to the prior year quarter with a margin of 22.3%, an increase of 300 basis points.

謝謝你，羅恩。我將首先持續討論我們第三季度的綜合業績。收入為 6.83 億美元，下降 11%，調整後未分配金額前的 EBITDA 為 1.53 億美元，增長 3%，與去年同期相比，利潤率為 22.3%，增長 300 個基點。

Gross profit on a GAAP basis for the quarter was $275 million compared to $261 million in the prior year quarter. Excluding items that affect comparability from the current and prior periods, gross profit was $276 million in the current quarter, increasing 4% over the prior year quarter. Gross margin increased by 580 basis points to 40.4%.

按 GAAP 計算，本季度毛利潤為 2.75 億美元，去年同期毛利潤為 2.61 億美元。排除影響當期和前期可比性的項目，本季度毛利潤為 2.76 億美元，比去年同期增長 4%。毛利率增長 580 個基點至 40.4%。

Third quarter GAAP selling, general and administrative expenses were $172 million compared to $157 million in the prior year. Excluding adjusting items from both periods, selling, general and administrative expenses were $155 million, representing 22.7% of revenue compared to the prior year of $151 million or 19.6% of revenue.

第三季度 GAAP 銷售、一般和管理費用為 1.72 億美元，而上年同期為 1.57 億美元。排除這兩個時期的調整項目，銷售、一般和管理費用為 1.55 億美元，佔收入的 22.7%，而上一年為 1.51 億美元，佔收入的 19.6%。

Third quarter GAAP income from continuing operations was $49 million or $0.90 per share compared to the prior year period income of $53 million or $0.98 per share. Excluding all items that affect comparability from both periods, current quarter adjusted net income from continuing operations was $70 million or $1.29 per share compared to the prior year of $66 million or $1.23 per share.

第三季度持續經營業務的 GAAP 收入為 4900 萬美元，即每股 0.90 美元，而上年同期收入為 5300 萬美元，即每股 0.98 美元。排除影響兩個時期可比性的所有項目，本季度持續經營業務調整後淨利潤為 7000 萬美元，即每股 1.29 美元，而上一年為 6600 萬美元，即每股 1.23 美元。

Corporate and unallocated expenses, excluding depreciation, were $14 million in the quarter compared to $13.4 million in the prior year. Our normalized effective tax rate, excluding adjusted items for the quarter was 28.1% and 28.6% for the year-to-date period.

本季度公司和未分配費用（不包括折舊）為 1,400 萬美元，而上年同期為 1,340 萬美元。剔除調整項目後，本季度的標準化有效稅率為 28.1%，年初至今為 28.6%。

Net capital expenditures were $8 million in the third quarter compared to $11 million in the prior year quarter. Depreciation and amortization totaled $15.7 million for the third quarter compared to $17.7 million in the prior year.

第三季度淨資本支出為 800 萬美元，去年同期為 1100 萬美元。第三季度折舊和攤銷總額為 1,570 萬美元，而去年同期為 1,770 萬美元。

Regarding our segment performance, revenue for Home & Building Products decreased 1% over the prior year quarter, driven by reduced residential volume, partially offset by increased commercial volume and favorable mix and pricing for both commercial and residential products.

就我們的部門業績而言，住宅和建築產品的收入比去年同期下降了 1%，這是由於住宅銷量減少，但部分被商業銷量增加以及商業和住宅產品的有利組合和定價所抵消。

Adjusted EBITDA increased 12% compared to the prior year quarter, driven by reduced material costs, partially offset by increased costs for labor, advertising and marketing.

調整後的 EBITDA 與去年同期相比增長了 12%，這主要得益於材料成本的下降，但部分被勞動力、廣告和營銷成本的增加所抵消。

Consumer and Professional Products revenue decreased 22% from the prior year. The reduction in revenue was primarily attributable to reduced volume across all channels and geographies, driven by soft consumer demand and elevated customer inventory levels, and customer supplier diversification in the U.S.

消費品和專業產品收入較上年下降 22%。收入減少的主要原因是美國消費者需求疲軟、客戶庫存水平上升以及客戶供應商多元化，導致所有渠道和地區的銷量減少。

CPP adjusted EBITDA decreased from the prior year by 36%, primarily due to the unfavorable impact of reduced volume and revenue, and its related impact on manufacturing and overhead absorption. These items are partially offset by reduced discretionary spending and improved Hunter Fan performance.

CPP 調整後 EBITDA 較上年下降 36%，主要是由於銷量和收入減少的不利影響，及其對製造和管理費用吸收的相關影響。這些項目被可自由支配支出的減少和獵人粉絲績效的改善所部分抵消。

In our second quarter earnings release on May 3, we announced that CPP is expanding its global sourcing strategy for products manufactured and sold in the U.S. to address evolving market conditions. Utilizing an asset-light model enables CPP to continue providing high-quality products, strengthening its competitive positioning and leveraging industry-leading service and distribution that our customers and consumers expect. Further, these actions position CPP to achieve target EBITDA margin of 15% and generate substantial additional value to our shareholders.

在 5 月 3 日發布的第二季度財報中，我們宣布 CPP 正在擴大其在美國製造和銷售的產品的全球採購戰略，以應對不斷變化的市場狀況。利用輕資產模式使 CPP 能夠繼續提供高質量的產品，增強其競爭地位，並利用我們的客戶和消費者期望的行業領先的服務和分銷。此外，這些行動使 CPP 能夠實現 15% 的 EBITDA 利潤率目標，並為我們的股東創造可觀的附加價值。

There have been no changes in expected charges, and we'll continue to expect the project to be completed by the end of calendar '24. In the quarter ended June 30, CPP incurred pretax cash charges of $3.9 million related to the expansion of its global sourcing strategy.

預期費用沒有變化，我們繼續預計該項目將在 24 月底完成。截至 6 月 30 日的季度，CPP 因擴大其全球採購戰略而產生了 390 萬美元的稅前現金費用。

Regarding our balance sheet and liquidity. As of June 30, 2023, we had net debt of $1.4 billion and net debt-to-EBITDA leverage of 2.6x as calculated based on our debt covenants compared to $1.3 billion of net debt and 2.5x leverage in the previous quarter, and $1.5 billion of net debt and 2.9x leverage at September '22 fiscal year-end.

關於我們的資產負債表和流動性。截至2023 年6 月30 日，我們的淨債務為14 億美元，根據我們的債務契約計算，淨債務與EBITDA 槓桿率為2.6 倍，而上一季度的淨債務為13 億美元，槓桿率為2.5倍，而上一季度的槓桿率為1.5 倍。截至 2022 年 9 月財年末，淨債務為 10 億美元，槓桿率為 2.9 倍。

I want to highlight that we remain essentially leverage neutral relative to the prior quarter even after returning $100 million in shareholder capital via a special dividend in May and $85 million in stock buybacks over the course of the third quarter.

我想強調的是，即使在5 月份通過特別股息返還了1 億美元的股東資本，並在第三季度回購了8500 萬美元的股票後，我們相對於上一季度的槓桿率基本上保持中性。

Regarding our 2023 guidance, given our strong year-to-date financial performance and our expectations for current segment trends to continue through the fourth quarter, we are raising our guidance for full year segment adjusted EBITDA to $550 million from the previous guidance of $525 million. This EBITDA guidance excludes unallocated costs of $56 million, charges related to the strategic review process of approximately $22 million and AMES's global sourcing expansion charges. In addition, we now expect depreciation to be $45 million versus prior guidance of $50 million and capital expenditures to be $40 million versus $50 million prior.

關於我們的2023 年指引，鑑於我們年初至今的強勁財務業績以及我們對當前細分市場趨勢將持續到第四季度的預期，我們將全年細分市場調整後EBITDA 的指引從之前的5.25 億美元指引上調至5.5 億美元。本 EBITDA 指引不包括 5600 萬美元的未分配成本、約 2200 萬美元的戰略審查流程相關費用以及 AMES 的全球採購擴張費用。此外，我們現在預計折舊為 4,500 萬美元，之前指導為 5,000 萬美元，資本支出為 4,000 萬美元，之前指導為 5,000 萬美元。

Other guidance remains unchanged for 2023, including revenue of $2.7 billion free cash flow to exceed net income, amortization of $22 million, interest expense of $103 million and a normalized tax rate of approximately 29%.

2023 年的其他指導保持不變，包括收入 27 億美元的自由現金流超過淨利潤、攤銷 2200 萬美元、利息支出 1.03 億美元以及約 29% 的標準化稅率。

Now I'll turn the call back over to Ron.

現在我會把電話轉回給羅恩。

Thanks, Brian. Before we turn to questions, I want to highlight this morning, Griffon announced that it amended and restated its revolving credit facility to increase the size of that facility to $500 million from $400 million, and extended the maturity to March of 2028 from March of 2025. The closing of our new credit facility continues to provide us with financial and operating flexibility that will support our working capital requirements and positions us to grow our company and further enhance shareholder value.

謝謝，布萊恩。在我們開始提問之前，我想強調一下，今天早上，Griffon 宣布修改並重申了其循環信貸安排，將該安排的規模從4 億美元增加到5 億美元，並將期限從2025 年3 月延長至2028 年3 月新信貸安排的完成繼續為我們提供財務和運營靈活性，這將支持我們的營運資金需求，並使我們能夠發展公司並進一步提高股東價值。

Also, I want to acknowledge the effort and commitment the employees and management teams of our businesses continue to demonstrate. It's because of them that we maintain industry-leading levels of product, quality and customer service and our brands remain highly sought after and are leaders in their categories.

此外，我還要感謝我們企業的員工和管理團隊不斷表現出的努力和承諾。正是因為他們，我們的產品、質量和客戶服務才保持行業領先水平，我們的品牌仍然備受追捧，並且是同類產品中的領導者。

Our Home & Building Products segment continues to perform well and sees long-term tailwinds for the business, driven by healthy demand for our commercial products and from the historically resilient residential repair and remodel market. We remain excited about the prospects for our Consumer and Professional Products segment. Globally, CPP is addressing the current consumer market environment on rationalizing its cost structure and leveraging its global sourcing capability to realize our goal of 15% EBITDA margins.

在對我們的商業產品的健康需求以及歷史上具有彈性的住宅維修和改造市場的推動下，我們的家居和建築產品部門繼續表現良好，並看到業務的長期推動力。我們對消費和專業產品領域的前景仍然感到興奮。在全球範圍內，CPP 正在應對當前的消費市場環境，優化其成本結構，並利用其全球採購能力來實現 15% EBITDA 利潤率的目標。

Griffon's Board and management remain very confident in our outlook and strategic plan. We will continue to use the strong operating performance of our business and its free cash flow to deliver long-term value to our shareholders. Even with our impressive results year-to-date, we continue to believe the best is yet to come. Operator, we'll take any questions.

Griffon 的董事會和管理層對我們的前景和戰略計劃仍然充滿信心。我們將繼續利用我們業務強勁的經營業績及其自由現金流為股東創造長期價值。儘管我們今年迄今取得了令人印象深刻的業績，但我們仍然相信最好的尚未到來。接線員，我們會回答任何問題。

(Operator Instructions) The first question is from Bob Labick with CJS Securities.

（操作員說明）第一個問題來自 CJS 證券的 Bob Labick。

It's actually Lee Jagoda for Bob this morning. So can we start with the doors business and maybe talk about the visibility in demand across the residential and commercial business? And then just as a follow-up to that, maybe talk about the progress and potential synergies you see integrating Clopay to the existing commercial dealer network.

今天早上鮑勃實際上是李·賈戈達。那麼我們可以從門業務開始，也許可以談談住宅和商業業務的需求可見性嗎？然後，作為後續行動，也許可以談談您看到的將 Clopay 集成到現有商業經銷商網絡的進展和潛在的協同效應。

Sure. So as far as visibility, we continue to expect good commercial demand. We have benefited greatly by converting historical CornellCookson dealers to use Clopay commercial sectional product, and that has been very successful and will be ongoing for the foreseeable future. On the residential side, we have -- from a unit sales standpoint, we have difficult comps until we get through the first half of fiscal '24 because of our historical backlog during the prior period -- the period this year. And going forward, we expect orders to improve as we have invested more in marketing to recapture the market share that was partially lost while we had high backlog.

當然。因此，就能見度而言，我們繼續預計良好的商業需求。通過將歷史悠久的 CornellCookson 經銷商轉變為使用 Clopay 商業分段產品，我們受益匪淺，而且這一舉措非常成功，並且在可預見的未來將持續下去。在住宅方面，從單位銷售的角度來看，由於我們在上一時期（今年）的歷史積壓，在我們度過 24 財年上半年之前，我們的業績比較困難。展望未來，我們預計訂單將會改善，因為我們在營銷方面投入了更多資金，以奪回因積壓較多而部分失去的市場份額。

Got it. And then on the CPP side, maybe are there any initial findings from your global sourcing initiatives that you're trying to implement in the U.S.? And how does that -- how does your existing global sourcing infrastructure benefit the push towards the U.S. global sourcing?

知道了。然後，在 CPP 方面，您嘗試在美國實施的全球採購計劃是否有任何初步發現？您現有的全球採購基礎設施如何有利於推動美國的全球採購？

Sure. So we're early in the process. But so far, we see this being as successful as we expected. We'll update you more in November. As far as our capability that we already have regarding sourcing, we already source partially in the U.S. to begin with, and Australia and the U.K., and we're leveraging that supplier network to use -- we're leveraging that supplier network to source for the U.S. product lines that we're converting.

當然。所以我們還處於這個過程的早期。但到目前為止，我們看到這正如我們預期的那樣成功。我們將在 11 月向您提供更多最新信息。就我們已經具備的採購能力而言，我們已經開始在美國、澳大利亞和英國進行部分採購，並且我們正在利用該供應商網絡來進行採購對於我們正在轉換的美國產品線。

The next question is from Tim Wojs with Baird.

下一個問題是 Tim Wojs 和 Baird 提出的。

Maybe just on the HBP business. So on the pricing side, could you maybe talk to what you're seeing there? I think there's maybe the worry out there that the industry needs to give back some level of pricing. And I guess I'm just curious what you're seeing, how you kind of respond to that? And as we look at next year, just anything to think about pricing mix or kind of raw materials in HBP.

也許只是關於 HBP 業務。那麼在定價方面，您能談談您在那裡看到的情況嗎？我認為人們可能擔心該行業需要回饋一定程度的定價。我想我只是好奇你所看到的，你對此有何反應？當我們展望明年時，我們會考慮 HBP 的定價組合或原材料種類。

Sure. So as far as raw materials, the market will dictate mostly how that occurs going forward. So I'm just sort of going with your questions backwards. As far as pricing, we are priced in line with the market. We continue to expect good mix as we go forward. We're constantly coming up with new products, innovative products in both commercial and residential side. And I refer you to our margins year-to-date regarding the strength of the pricing in our business.

當然。因此，就原材料而言，市場將主要決定未來如何發生。所以我只是倒著回答你的問題。至於定價，我們的定價是與市場一致的。我們繼續期待未來的良好組合。我們不斷推出新產品，商業和住宅方面的創新產品。我請您參考我們今年迄今為止的利潤率，了解我們業務定價的強度。

And Tim, it's Ron. I'll just add to it. We're the market leader, and we have the premium product, premium service, the best dealer network, and we see ourselves taking market share and have no worries about pricing.

蒂姆，是羅恩。我就補充一下吧。我們是市場領導者，我們擁有優質的產品、優質的服務、最好的經銷商網絡，我們看到自己正在佔據市場份額，並且不用擔心定價。

Okay. Okay. Very good. And then just -- you outlined some longer-term margin targets in Home and Building Products that I think we're in the mid- to high 20% range. But the business is still operating really low at 33% margins this quarter and last, and the last couple of quarters. And I just -- when you look at steel down, you look at MDI down and maybe other inputs are actually a bit more favorable. So just, I guess, can you maybe just kind of walk me through the difference there? And if I'm thinking if there's anything there that I should think differently about because if anything, I almost think that margins have scope to maybe even move higher.

好的。好的。非常好。然後，您概述了家居和建築產品的一些長期利潤目標，我認為我們處於 20% 的中高範圍內。但本季度、上季度以及最後幾個季度，該業務的運營利潤率仍然很低，僅為 33%。我只是——當你看到鋼鐵價格下降時，你會看到 MDI 下降，也許其他投入實際上更有利一些。所以，我想，你能告訴我其中的區別嗎？如果我在想是否有什麼地方我應該以不同的方式思考，因為如果有的話，我幾乎認為利潤率有可能甚至更高的空間。

So as far as those, the outlook for margins that we posted that is a long-term view and considers the cycle. Currently, we aren't seeing pressure on margin, and the business is doing very well. We were just being perhaps a little conservative and considering what could potentially happen in the future, but nothing is visible yet.

就這些而言，我們發布的利潤率前景是長期觀點並考慮了周期。目前，我們沒有看到利潤壓力，業務表現非常好。我們可能只是有點保守，考慮了未來可能發生的事情，但目前還沒有什麼可見的。

The next question is from Julio Romero with Sidoti & Company.

下一個問題來自 Sidoti & Company 的 Julio Romero。

Great. I wanted to piggy back on Lee's question earlier about HBP and converting the CornellCookson dealers. You guys mentioned you've been successful with those conversions. Could you expand on that a little bit? Maybe give us what's a common pushback from those dealers or a common rebuttal? And how do you kind of overcome that?

偉大的。我想藉用 Lee 之前提出的關於 HBP 和改變 CornellCookson 經銷商的問題。你們提到你們在這些轉化方面取得了成功。你能稍微擴展一下嗎？也許可以告訴我們這些經銷商的常見阻力或常見反駁是什麼？你如何克服這個問題？

Sure. Actually, it's the opposite. We have dealers lining up to be converted. We are being thoughtful in bringing on new customers to make sure that we service them at a high level of service that they should and expect and that we've been able to provide our other dealers. So this is really a matter of thoughtfully and carefully converting dealers one by one, training, making sure they understand our products, making sure the systems are working. And so far, it's been a success and we continue to expect it will be successful.

當然。事實上，事實恰恰相反。我們有經銷商排隊等待轉換。我們在吸引新客戶方面非常周到，以確保我們為他們提供他們應該和期望的高水平服務，並且我們已經能夠為其他經銷商提供服務。因此，這實際上是一個深思熟慮、仔細地對經銷商進行逐一轉換、培訓、確保他們了解我們的產品、確保系統正常運行的問題。到目前為止，它是成功的，我們繼續期望它會成功。

Got it. That's very helpful. And then on CPP, you mentioned you're seeing significant progress on ramping up suppliers for the global sourcing strategy. What do lead times turn into with the global sourcing strategy compared to previously?

知道了。這非常有幫助。然後在 CPP 上，您提到您在增加全球採購戰略供應商方面看到了重大進展。與以前相比，全球採購策略的交貨時間會變成什麼樣子？

I assume you mean getting things into our distribution centers from wherever we're sourcing from. Those lead times will change. But we are used to dealing with that because we currently source roughly 20% to 30% of what we sell in the U.S. So that will be in our calculus to make sure we have A, inventory on hand at adequate levels to service our customers in the way they did service before; and B, we understand the timing that it will take to get product and we'll be ensuring that we have our orders on a timely basis to get the product.

我猜你的意思是把東西從我們採購的地方運到我們的配送中心。這些交貨時間將會改變。但我們已經習慣了處理這個問題，因為我們目前在美國銷售的產品大約有20% 到30% 是從美國採購的。因此，我們會計算這一點，以確保我們手頭有足夠的庫存來為我們的客戶提供服務。他們以前提供服務的方式； B，我們了解獲取產品所需的時間，並且我們將確保及時收到訂單以獲取產品。

The next question is from Trey Grooms with Stephens Inc.

下一個問題來自 Stephens Inc. 的 Trey Grooms。

This is Noah Merkousko on for Trey. Maybe switching gears here over to CPP. Just on the demand outlook there. I mean, I know you've called out there continues to be a weak consumer, it sounds like pretty globally there and inventories remain high. Again, just any kind of forward-looking expectations as we think about demand for that segment and when you believe inventories in the channel might be rightsized?

我是諾亞·默庫斯科（Noah Merkousko），替補特雷。也許這裡要切換到 CPP。只是關於那裡的需求前景。我的意思是，我知道您已經指出消費者仍然疲軟，聽起來全球範圍內都很疲軟，而且庫存仍然很高。再說一遍，當我們考慮該細分市場的需求以及您認為渠道中的庫存可能會適當調整時，是否有任何前瞻性預期？

Sure. We expect it to take time. We're talking multiple quarters. It's hard to know exactly when. There's other factors such as weather that could change the calculus. But we are looking -- '24 is going to look from a consumer standpoint, similar I think to '23, and it's going to take most of '24 to normalize inventory at most for most products and locations.

當然。我們預計這需要時間。我們正在談論多個季度。很難確切知道什麼時候。還有其他因素（例如天氣）可能會改變微積分。但我們正在尋找 - 24 將從消費者的角度來看，我認為與 23 類似，並且需要 24 的大部分時間才能使大多數產品和地點的庫存正常化。

Yes. And we view this as positioning the company for the long run, and there will be a recovery in those products. We'll be a more efficient manufacturer, designer, sourcer. And the 15% EBITDA target that we have out there, we believe we'll achieve beyond the fiscal '24 year.

是的。我們認為這是公司的長期定位，這些產品將會復蘇。我們將成為更高效的製造商、設計師、採購商。我們相信我們將在 24 財年之後實現 15% 的 EBITDA 目標。

Got it. That makes sense. Then on the HBP business, you mentioned you're a market leader. Can you help us understand what the market structure looks like? How many players there are and how concentrated it is at the top? And maybe you mentioned regaining market share and investing in more marketing now. Maybe if you could just help quantify what that looks like?

知道了。這就說得通了。然後在 HBP 業務上，您提到您是市場領導者。您能幫助我們了解市場結構是什麼樣的嗎？有多少名球員以及高層的集中程度如何？也許您提到現在要重新獲得市場份額並投資於更多營銷。也許你能幫忙量化一下它是什麼樣子？

Sure. So as far as the market, there's 4 large players that make up about 75% of the market, approximately. So pretty consolidated at that level. As far as the marketing, yes. So while we had increased backlog, some of our customers understandably if they wanted a door faster than we were able to provide it went to other providers. That was a matter of not wanting to wait, not necessarily that they wanted the other products. So now that our backlogs have normalized, and we can meet our customers' demand typically in approximately 2 weeks. We are regaining that market share and the investment in marketing to allow people to know about our new products and our capability to provide them those products timely is being helpful.

當然。就市場而言，有 4 家大型企業，約佔市場的 75%。在那個級別上非常鞏固。就營銷而言，是的。因此，雖然我們的積壓數量有所增加，但如果我們的一些客戶想要比我們能夠提供的更快的門，他們就會轉向其他提供商，這是可以理解的。這是一個不想等待的問題，不一定是他們想要其他產品。現在我們的積壓已經正常化，我們通常可以在大約兩週內滿足客戶的需求。我們正在重新獲得市場份額，並在營銷方面進行投資，讓人們了解我們的新產品，而我們及時向他們提供這些產品的能力是有幫助的。

The next question is from Sam Darkatsh with Raymond James.

下一個問題是 Sam Darkatsh 和 Raymond James 提出的。

Most of my questions have been asked and answered. Just a couple of follow-ups on prior inquiries. I think we talked a lot about garage doors within HBP, but could you talk a little bit more about what CornellCookson specific profitability looks like today versus pre-pandemic and where that is versus the overall HBP margin level? Just trying to get a sense of the sustainability there versus the garage door business.

我的大部分問題都已被提出並得到解答。只是對先前詢問的一些後續行動。我想我們在 HBP 內部討論了很多關於車庫門的問題，但您能否多談談 CornellCookson 今天與大流行前相比的具體盈利能力，以及與 HBP 整體利潤水平相比的情況？只是想了解一下那裡與車庫門業務的可持續性。

Sure. So I'll take you back when we purchased CornellCookson. It was approximately a 9% business on $200 million of revenue. There was -- we knew we had a lot of opportunity there and a lot of work to get there in integrating that with Clopay, and I mentioned the conversion of dealers to our commercial sectional products. All of those have contributed to a much stronger business. Currently, on balance, our commercial margins are similar to our residential margins. It varies by product, but on balance, they're similar.

當然。所以我會帶你回顧一下我們購買康奈爾庫克森的時候。該業務的收入約為 9%，收入為 2 億美元。我們知道我們在那裡有很多機會，並且需要做很多工作才能將其與 Clopay 集成，我提到了經銷商向我們的商業部門產品的轉變。所有這些都為我們的業務變得更加強大做出了貢獻。目前，總的來說，我們的商業利潤率與住宅利潤率相似。它因產品而異，但總的來說，它們是相似的。

And we continue to see very nice growth in the commercial business and believe that, that's going to continue.

我們繼續看到商業業務的良好增長，並相信這種情況將持續下去。

This is not my follow-up question. So don't cut me off this yet, but do you think the sustainability of the CornellCookson margins are similar to that of garage doors? I mean there's never to our knowledge ever been a price cut in resi garage doors but you figure rolling steel doors might be a little bit more commodity sensitive with pricing. So could you give us a sense of how you compare and contrast the margin sensitivity or sustainability with commercial versus resi?

這不是我的後續問題。所以先別打斷我，但你認為康奈爾庫克森利潤率的可持續性與車庫門的可持續性相似嗎？我的意思是，據我們所知，Resi 車庫門從未降價過，但您認為捲鋼門可能對定價對商品更加敏感。那麼您能否讓我們了解一下您如何比較和對比商業與 Resi 的利潤敏感性或可持續性？

Yes, they're a bit of a different model. So on the commercial side, it's -- I'll call it job at a time where you're going out and bidding with a full suite of products and services along with dealers to get those jobs done. So though the product itself is of excellent quality and sought after by those who are purchasing it, it's our capability to not only build quality doors but to get them there on time, get them installed properly and having a full suite of products that gives us a leading edge in getting those jobs. So it's more one at a time, and those are bid -- so the pricing may adjust as each bid goes. But our overall capability gives us strength.

是的，它們的模型有點不同。因此，在商業方面，我將其稱為“工作”，即您出去與經銷商一起競標全套產品和服務，以完成這些工作。因此，儘管產品本身質量優良並受到購買者的追捧，但我們不僅有能力製造優質門，而且有能力按時將其送達、正確安裝並擁有全套產品，這使我們能夠在獲得這些工作方面具有領先優勢。所以一次會有多個，而且這些都是出價的——所以定價可能會隨著每次出價的進行而調整。但我們的整體能力給了我們力量。

And then here's my actual follow-up question. So this is fine-tuning what Tim was asking earlier around pricing, both what you're seeing and prospectively in HBP. I guess it looks like in the quarter that pricing for HBP on a 2-year stack moderated a little bit sequentially from last quarter. Now that's price mix. So I'm not sure if that's actually like-for-like. But are you seeing price degradation or price pressure in HBP sequentially? And if not, what might explain the little bit of the softness on a 2-year stack.

這是我實際的後續問題。因此，這對 Tim 之前詢問的定價進行了微調，包括您在 HBP 中看到的和預期的定價。我猜想，在本季度，兩年期 HBP 的定價與上季度相比略有下降。現在這就是價格組合。所以我不確定這是否真的是一樣的。但您是否看到 HBP 的價格連續下降或面臨價格壓力？如果不是，那麼如何解釋 2 年籌碼中的一點疲軟。

Yes. So year-over-year price mix continues to be good. What you're really seeing is less price, more mix and pricing has remained relatively stable. There's always a mix element to that, but it's remained stable. By the way, back on the commercial, I forgot to mention that commercial products have a much higher component of waiver than residential products as part of the consideration of what I was talking about.

是的。因此，同比價格組合仍然良好。你真正看到的是價格更低，產品組合更多，而且價格保持相對穩定。其中總是存在混合元素，但它保持穩定。順便說一句，回到商業產品，我忘了提及，作為考慮我所討論內容的一部分，商業產品的豁免成分比住宅產品高得多。

(Operator Instructions) The next question is from Justin Bergner with Gabelli Funds.

（操作員說明）下一個問題來自 Gabelli Funds 的 Justin Bergner。

One 2-part just a clarification question, then one follow-up. I noticed the Hunter margins were really strong this quarter, close to 30%. Any comment there? And then the other clarification question was just regarding the repurchases. It was $85 million, but I think there's like a $98 million purchase of shares for treasury number in the cash flow statement. So just trying to reconcile those 2.

一個由兩部分組成的問題只是一個澄清問題，然後是一個後續問題。我注意到 Hunter 本季度的利潤率非常高，接近 30%。有什麼意見嗎？然後另一個澄清問題只是關於回購。這是 8500 萬美元，但我認為現金流量表中的財務編號大約有 9800 萬美元購買股票。所以只是試圖協調這兩個。

Sure. On the repurchases, there can be some elements of vestings that affect that number. I believe that's the difference between the true repurchases and the vesting netting of shares when they vest. On the Hunter margins, last year, the -- Hunter is seasonal. Generally, Q3 and Q4 generally the stronger times of the year. Last year was burdened with significant freight costs that we did not have this year is the major driver there.

當然。在回購方面，歸屬的某些因素可能會影響該數字。我認為這就是真正的回購和股票歸屬時的歸屬淨額之間的區別。在獵人邊緣，去年，獵人是季節性的。一般來說，第三季度和第四季度通常是一年中最強的時期。去年我們承受了巨大的貨運成本，而今年我們沒有這樣做，這是那裡的主要驅動因素。

Okay. So are those margins sort of sustainable at this level? I mean, that high 20s? Or is there something unusual that sort of help them this quarter?

好的。那麼，在這個水平上，這些利潤率是否可持續呢？我的意思是，那麼高20歲？或者這個季度有什麼不尋常的事情對他們有幫助嗎？

For this period of the year, those margins are not abnormal. Over the entire year, you're talking plus a 20% give or take margin business.

就今年這個時期而言，這些利潤率並不異常。在全年中，您所說的是加上 20% 的給予或接受保證金業務。

Got you. And then my follow-up, just on the commercial HBP business. Some companies in the industrial space are talking about a weakening sort of market for warehouse-related demand. Are you seeing that come through or maybe looking out a quarter or 2? And are you in the later innings of this dealer switch for CornellCookson dealers to pick up Clopay section? Or you would say you're more early to middle innings?

明白你了。然後是我的後續行動，只是關於商業 HBP 業務。工業領域的一些公司正在談論倉庫相關需求市場的疲軟。您是否看到了這一點，或者可能期待一兩個季度的實現？您是否在該經銷商切換到 CornellCookson 經銷商的後幾局中選擇 Clopay 部分？或者你會說你更早到中局？

No, we're in the middle innings for the switch. As far as demand, we are continuing to see strong demand for our products in the space.

不，我們正處於轉換的中局。就需求而言，我們繼續看到該領域對我們產品的強勁需求。

This concludes the question-and-answer session. I would like to turn the conference back over to Ron Kramer for any closing remarks.

問答環節到此結束。我想將會議轉回羅恩·克萊默（Ron Kramer）發表閉幕詞。

Thank you. Be well. We look forward to speaking to you in November.

謝謝。祝你一切順利。我們期待在 11 月與您交談。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。