Griffon Corp (GFF) 2024 Q1 法說會逐字稿

Greetings. Welcome to the Griffon Corporation Fiscal First Quarter 2024 Earnings Conference Call. (Operator Instructions) Please note, this conference is being recorded. I would now like to turn the conference over to Brian Harris, Chief Financial Officer. Thank you. You may begin.

問候。歡迎參加 Griffon Corporation 2024 年第一季財報電話會議。 （操作員說明）請注意，本次會議正在錄製中。我現在想將會議交給財務長布萊恩哈里斯 (Brian Harris)。謝謝。你可以開始了。

Thank you. Good morning. It's my pleasure to welcome everybody to Griffon Corporation's First Quarter Fiscal 2024 Earnings Call. Joining me for this morning's call is Ron Kramer, Griffon's Chairman and Chief Executive Officer. Our press release was issued earlier this morning and is available on our website. Today's call is being recorded, and the replay instructions are included in our earnings release.

謝謝。早安.我很高興歡迎大家參加 Griffon Corporation 2024 年第一季財報電話會議。與我一起參加今天早上電話會議的是 Griffon 董事長兼執行長 Ron Kramer。我們的新聞稿於今天早上早些時候發布，可在我們的網站上查看。今天的電話會議正在錄音，重播說明包含在我們的財報中。

Our comments will include forward-looking statements about Griffon's performance. These statements are subject to risks and uncertainties that can change as the world changes. Please see the cautionary statements in today's press release and in our SEC filings. Finally, some of today's remarks, we'll adjust for items that affect comparability between periods. These items are explained in our non-GAAP reconciliations included in our press release.

我們的評論將包括有關 Griffon 業績的前瞻性陳述。這些陳述存在風險和不確定性，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和我們向 SEC 提交的文件中的警告聲明。最後，今天的一些評論，我們將對影響期間之間可比性的項目進行調整。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。

With that, I'll turn the call over to Rob.

這樣，我就把電話轉給羅布。

Thanks, Brian. Good morning, everyone, and thanks for joining us. Fiscal 2024 is off to a good start with the first quarter highlighted by strong free cash flow of $133 million, continued solid operating performance at Home & Building Products and improved profitability at Consumer and Professional Products. we are well positioned to meet our financial targets for the year.

謝謝，布萊恩。大家早安，感謝您加入我們。 2024 財年第一季開局良好，自由現金流強勁，達到 1.33 億美元，家居和建築產品業務持續穩健的營運業績，以及消費和專業產品業務盈利能力的提高。我們完全有能力實現今年的財務目標。

For the quarter, Home & Building Products or HBP, revenue and EBITDA were consistent with the prior year. Revenue benefited from favorable price and mix and increased customer orders, offset by reduced year-over-year volume due to the elevated sectional door backlog we had in the prior year.

本季度，家居與建築產品（HBP）、營收和 EBITDA 與上年持平。收入受益於有利的價格和產品組合以及客戶訂單的增加，但由於上一年的分段門積壓量增加而導致同比銷量減少，抵消了這一影響。

Turning to the Consumer and Professional Products segment, or CPP. First quarter revenue decreased 2%, primarily due to decreased volume, driven by reduced customer demand in North America. CPP improved EBITDA by $7 million in the quarter, driven by decreased North American production costs. I'm very pleased to tell you that our previously announced initiative to expand CPP's global sourcing strategy remains on schedule and within budget. Since May 2023, when we announced the initiative, operations have ceased at the 4 identified wood mills and all of the affected U.S. manufacturing facilities, except one.

轉向消費和專業產品領域（CPP）。第一季營收下降 2%，主要是因為北美客戶需求減少導致銷售下降。由於北美生產成本下降，CPP 本季 EBITDA 提高了 700 萬美元。我很高興地告訴您，我們先前宣布的擴大 CPP 全球採購策略的舉措仍然按計劃進行並在預算範圍內。自 2023 年 5 月我們宣布此措施以來，已確定的 4 家木材廠和所有受影響的美國製造工廠（1 家除外）均已停止運作。

We expect operations at the remaining affected manufacturing facility in Grantsville, Maryland to conclude by March 2024. These actions will reduce our manufacturing footprint by over 1.2 million square feet. As we've emphasized before, the global sourcing expansion with AMES is a key element of our strategy to improve the margins of CPP. We will continue to provide updates throughout the year as we achieve additional milestones.

我們預計馬裡蘭州格蘭茨維爾其餘受影響的製造工廠的運作將於 2024 年 3 月結束。這些行動將使我們的製造佔地面積減少超過 120 萬平方英尺。正如我們先前強調的，透過 AMES 進行全球採購擴張是我們提高 CPP 利潤率策略的關鍵要素。隨著我們實現更多里程碑，我們將繼續全年提供更新。

Turning to our capital allocation. In November, we announced a $200 million increase to our share repurchase authorization, bringing the total authorization to $262 million at that time. During the first quarter, we repurchased 1.6 million shares totaling $70 million or an average of $42.61 per share. At December 31, $238 million remained under the repurchase authorization. Since April 2023 and through December, we've repurchased 5.8 million shares at an average price of $38.15 for a total of $220 million. These repurchases have reduced Griffon's outstanding shares by 10.1% relative to total shares outstanding at the end of the second quarter of fiscal 2023.

轉向我們的資本配置。 11月，我們宣布將股票回購授權增加2億美元，使當時的授權總額達到2.62億美元。第一季度，我們回購了 160 萬股股票，總價值 7,000 萬美元，平均每股 42.61 美元。截至12月31日，回購授權仍有2.38億美元。自 2023 年 4 月到 12 月，我們以平均價格 38.15 美元回購了 580 萬股股票，總金額達 2.2 億美元。這些回購使 Griffon 的流通股相對於 2023 財年第二季末的流通股總數減少了 10.1%。

Also yesterday, the Griffon Board authorized a regularly quarterly dividend of $0.15 per share payable on March 21 to shareholders of record on February 29, marking the 50th consecutive quarterly dividend to our shareholders. Our dividend has grown at an annualized compounded rate of 18% since we initiated dividends in 2012. These actions reflect the strength and the resiliency of our businesses as well as continued confidence in our strategic plan and outlook.

同樣在昨天，Griffon 董事會授權於 3 月 21 日向 2 月 29 日登記在冊的股東定期派發每股 0.15 美元的季度股息，這是我們連續第 50 個季度向股東派發股息。自 2012 年開始派息以來，我們的股息以 18% 的年複合成長率成長。這些行動反映了我們業務的實力和彈性，以及對我們策略計畫和前景的持續信心。

I'll turn it over to Brian for more details on the financials.

我會將其交給布萊恩以獲取有關財務狀況的更多詳細資訊。

Thank you, Ron. First quarter revenue of $643 million decreased by 1% and adjusted EBITDA before unallocated amounts of $130 million increased by 6%, both in comparison to the prior year quarter. EBITDA margin before unallocated was 20.3%, an increase of approximately 140 basis points. Gross profit on a GAAP basis for the quarter was $237 million compared to $234 million in the prior year quarter, excluding items that affect comparability from the current to prior year period. Gross profit was $248 million in the current quarter compared to $234 million in the prior year.

謝謝你，羅恩。第一季營收為 6.43 億美元，與去年同期相比下降 1%，未分配金額前的調整後 EBITDA 為 1.3 億美元，成長 6%。未分配前的 EBITDA 利潤率為 20.3%，增加約 140 個基點。以 GAAP 計算，本季毛利為 2.37 億美元，去年同期毛利為 2.34 億美元，不包括影響本期與去年同期可比較的項目。本季毛利為 2.48 億美元，去年同期毛利為 2.34 億美元。

Normalized gross margin increased year-over-year by 260 basis points to 38.6%. First quarter GAAP selling, general and administrative expenses were $153 million, consistent with the prior year. Excluding adjusting items from both periods, SG&A expenses were $147 million or 22.9% of revenue compared to the prior year of $143 million or 22% of revenue. First quarter GAAP net income was $42 million or $0.82 per share compared to $49 million in the prior year quarter or $0.88 per share. Again, excluding all items that affect comparability from both periods, current quarter adjusted net income was $55 million or $1.07 per share compared to the prior year of $47 million or $0.86 per share.

標準化毛利率年增 260 個基點至 38.6%。第一季 GAAP 銷售、一般和管理費用為 1.53 億美元，與前一年持平。排除這兩個時期的調整項目，SG&A 費用為 1.47 億美元，佔營收的 22.9%，而前一年為 1.43 億美元，佔營收的 22%。第一季 GAAP 淨利為 4,200 萬美元，即每股 0.82 美元，而去年同期淨利為 4,900 萬美元，即每股 0.88 美元。同樣，排除影響兩個時期可比性的所有項目，本季調整後淨利潤為 5500 萬美元，即每股 1.07 美元，而上一年為 4700 萬美元，即每股 0.86 美元。

Corporate and unallocated expenses, excluding depreciation in the quarter were $13.9 million, consistent with the prior year. Net capital expenditures were $13.5 million in the first quarter compared to a benefit of $7.1 million in the prior year quarter. Depreciation and amortization totaled $14.8 million for the first quarter compared to $17.1 million in the prior year quarter. Regarding our segment performance. As Ron mentioned earlier, revenue for Home & Building Products was consistent with the prior year quarter, reflecting improved customer orders as well as favorable pricing and mix of 4%, offset by the prior year volume benefit from elevated backlog.

本季公司和未分配費用（不包括折舊）為 1,390 萬美元，與去年同期持平。第一季淨資本支出為 1,350 萬美元，而去年同期淨資本支出為 710 萬美元。第一季折舊和攤銷總額為 1,480 萬美元，而去年同期為 1,710 萬美元。關於我們的分部表現。正如 Ron 之前提到的，家居和建築產品的收入與去年同期一致，反映出客戶訂單的增加以及有利的定價和 4% 的組合，但被去年積壓增加帶來的銷售收益所抵消。

Adjusted EBITDA was consistent with the prior year quarter with the effects of reduced volume and increased labor and distribution costs being offset by reduced material costs and favorable price and mix. Consumer and Professional Products revenue decreased 2% from the prior year quarter to $247 million due to decreased volume driven by reduced customer demand in North America and CPP's adjusted EBITDA increased by $7.3 million from the prior year quarter to $5.5 million, primarily due to the smaller North American manufacturing footprint and reduced production costs, which will more than offset the effects of reduced revenue.

調整後的 EBITDA 與去年同期一致，銷售減少以及勞動力和分銷成本增加的影響被材料成本降低以及有利的價格和組合所抵消。消費者和專業產品收入較上年同期下降2%，至2.47 億美元，原因是北美客戶需求減少導致銷售下降，而CPP 調整後的EBITDA 較上年同期增加730 萬美元，至550 萬美元，這主要是由於北美製造足跡和生產成本降低，這將足以抵消收入減少的影響。

Regarding our balance sheet liquidity as of December 31, 2023, we had net debt of $1.3 billion and net debt-to-EBITDA leverage of 2.5x as calculated based on our debt covenants, which is 2/10 of a turn better than the 2.7x leverage at the end of last year's first quarter. Our net debt and leverage decreased slightly from our year-end September 2023, even after returning $70 million to shareholders via stock buybacks in the quarter. In fiscal 2024 -- our fiscal 2024 guidance provided in November 2023 remains unchanged at $2.6 billion of revenue and $525 million in segment adjusted EBITDA, which excludes unallocated costs and certain other charges that affect comparability and free cash flow exceeding net income for the year.

截至2023 年12 月31 日，我們的資產負債表流動性方面，我們的淨債務為13 億美元，根據我們的債務契約計算，淨債務與EBITDA 的槓桿率為2.5 倍，比2.7 倍好2/ 10. x 去年第一季末的槓桿率。即使本季透過股票回購向股東返還 7,000 萬美元後，我們的淨債務和槓桿率仍較 2023 年 9 月止略有下降。在2024 財年，我們在2023 年11 月提供的2024 財年指引保持不變，收入為26 億美元，部門調整後EBITDA 為5.25 億美元，其中不包括未分配成本和影響可比性以及超過當年淨利潤的自由現金流的某些其他費用。

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

現在我會把電話轉回給羅恩。

Thanks, Brian. As I said upfront, 2024 is off to a good start with strong free cash flow, continued solid operating performance at HBP and improved profitability at CPP. These results reinforce the confidence of Griffon's Board and management in our outlook and strategic plan. We'll continue to use our strong operating performance and free cash flow to drive a capital allocation strategy that delivers long-term value for our shareholders. This strategy will continue to include investing in our businesses, opportunistically repurchasing shares and reducing debt. Before we turn to Q&A, I'd like to recognize the dedication and efforts of our management and employees around the world and their contributions to our success.

謝謝，布萊恩。正如我之前所說，2024 年是一個良好的開端，強勁的自由現金流、HBP 持續穩健的營運績效以及 CPP 獲利能力的提升。這些結果增強了 Griffon 董事會和管理層對我們的前景和戰略計劃的信心。我們將繼續利用強勁的經營業績和自由現金流來推動資本配置策略，為股東帶來長期價值。這項策略將繼續包括投資我們的業務、伺機回購股票和減少債務。在我們進行問答之前，我想對我們的管理層和世界各地的員工的奉獻和努力以及他們對我們成功的貢獻表示認可。

Operator, we'll take any questions.

接線員，我們會回答任何問題。

(Operator Instructions) Our first questions come from the line of Joe Ahlersmeyer with Deutsche Bank.

（操作員說明）我們的第一個問題來自德意志銀行的 Joe Ahlersmeyer。

Great update. Congratulations on the strong start here. Yes. I wonder if we could dig into the improvement in the customer orders within HBP for a bit. Just any color you can offer between residential and commercial trends? And then any thoughts maybe on the second quarter HBP sales potential if those order trends give you just a little bit more visibility into the quarter ahead here?

很棒的更新。恭喜您在這裡取得了良好的開端。是的。我想知道我們是否可以深入研究一下 HBP 內客戶訂單的改善情況。您可以在住宅和商業趨勢之間提供任何顏色嗎？如果這些訂單趨勢能讓您對接下來的季度有更多的了解，那麼對第二季 HBP 銷售潛力有什麼想法嗎？

Sure. So the order trends are being driven mostly by the residential side. We don't have the prior year backlog overhang, which allows our lead times to be normalized and it helped us with our orders, plus we have been investing in marketing and believe we are taking market share. As far as the second quarter, we still have the backlog -- elevated backlog overhang from the prior year. And we are now expecting to be back to normal seasonality which our second quarter is our low point of the year, basically driven by Midwest and Northeast weather. And we expect this year's volume to be down for those 2 reasons.

當然。因此，訂單趨勢主要是由住宅方面推動的。我們沒有上一年的積壓，這使得我們的交貨時間正常化，並幫助我們處理訂單，而且我們一直在行銷方面進行投資，並相信我們正在佔據市場份額。就第二季而言，我們仍然有積壓——比去年同期增加。我們現在預計將恢復到正常的季節性，第二季度是今年的最低點，主要是由中西部和東北部的天氣推動的。我們預計今年的銷售量將因這兩個原因而下降。

Understood. Also it kind of looks like in the quarter, maybe price mix is where you came in a little bit ahead of your sales expectations for HBP, seems to have also aided the margin here. Just maybe an update on your thinking around the 30% plus for the year, maybe more of an emphasis on the plus now the way I'm thinking about it?

明白了。另外，在本季看起來，也許價格組合比您對 HBP 的銷售預期稍高一些，似乎也有助於提高利潤率。也許只是更新一下您對今年 30% 以上的想法，也許現在更強調我現在的想法？

We're still comfortable in looking at this and confirming that 30% margins or target for the year.

我們仍然願意考慮這一點並確認 30% 的利潤率或今年的目標。

Our next questions come from the line of Bob Labick with CJS Securities.

我們的下一個問題來自 CJS 證券的 Bob Labick。

Congratulations on a good start to the year. I just want to kind of stick with doors for a second. And you're showing success in share gains. You just mentioned the share gains in residential as you now can fulfill the backlog down a little bit. But you're also showing gains in commercial as you're expanding the Clopay sectional doors into CornellCookson dealers. Just give us an update on how far along you are with that process and where you think that can go going forward? .

恭喜今年有一個好的開始。我只是想在門上待一會兒。您在股票收益方面也取得了成功。您剛才提到了住宅領域的份額收益，因為您現在可以稍微減少一點積壓的訂單。但當您將 Clopay 分段門擴展到 CornellCookson 經銷商時，您也顯示出商業收益。請告訴我們您的最新進展，以及您認為流程的進展如何？ 。

So we're still in relatively early days in that process, and that will continue for quite some time. We're getting very good take and our dealers are pleased with the product and having more expanded offering through us.

因此，我們仍處於該過程的相對早期階段，並且這種情況將持續相當長的一段時間。我們得到了很好的認可，我們的經銷商對我們的產品感到滿意，並透過我們提供了更多的產品。

Okay. Great. And then on CPP, noted, I guess, a little softness in North American demand. Can you just expand on that? What areas were soft? And was it sell-in? Or is it sell-through from the consumer? And what are you hearing from your large customers in CPP for their outlook for the spring season that we're coming into?

好的。偉大的。然後就 CPP 而言，我認為北美需求略有疲軟。能擴展一下嗎？哪些區域是軟的？是賣出去的嗎？還是來自消費者的銷售？您從 CPP 的大客戶那裡聽到了他們對即將到來的春季的展望？

Sure. So for the spring season, as of now, we're just assuming normalized weather compared to last year, which wasn't very -- the weather was not very good. The consumer still seems to be weak and there's still elevated inventory at most of our customers, which is the main driver for the reduced demand.

當然。因此，對於春季來說，到目前為止，我們只是假設天氣與去年相比正常化，這並不是很好——天氣不是很好。消費者似乎仍然疲軟，我們大多數客戶的庫存仍然增加，這是需求減少的主要驅動因素。

Our next questions come from the line of Robert Schultz with Baird.

我們的下一個問題來自羅伯特·舒爾茨和貝爾德的對話。

I was just thinking about HBP and the cadence for the rest of the year. How should we think about lapping the rest of the backlog conversion as we look through '24?

我只是在想 HBP 和今年剩餘時間的節奏。當我們回顧 24 年時，我們應該如何考慮完成剩餘的待辦事項轉換？

Sure. So we normalize at the end of last year's second quarter, that would be March 23. So the second half of the year will be more of an apples-to-apples comparison. We've made investments in marketing, as I mentioned earlier, and we expect volume to improve year-over-year in the second half.

當然。因此，我們在去年第二季末（即 3 月 23 日）實現正常化。因此，下半年將更多地進行同類比較。正如我之前提到的，我們在行銷方面進行了投資，我們預計下半年銷售量將比去年同期有所改善。

Got it. And then how are we thinking about buybacks for the rest of the year?

知道了。那我們如何考慮今年剩餘時間的回購呢？

We'll continue to be opportunistic, and we continue to think our stock is a compelling value.

我們將繼續保持機會主義，我們仍然認為我們的股票具有令人信服的價值。

Our next questions come from the line of Trey Grooms with Stephens.

我們的下一個問題來自特雷·格魯姆斯和史蒂芬斯的對話。

Congrats on the really nice results. So first, I guess on -- I want to touch on the free cash flow. I mean you guys are putting up very strong free cash flow. And Brian, could you maybe touch on how you're thinking about free cash flow for the year. I think the current guide is for it to exceed net income, but any update there? And anything for us to be aware of as far as unusual items or any changes to the cadence in what we typically see for -- as far as free cash flow is concerned?

恭喜你取得了非常好的結果。首先，我想談談自由現金流。我的意思是你們提供了非常強烈的自由現金流。 Brian，您能否談談您對今年自由現金流的看法。我認為目前的指南是讓它超過淨利潤，但是有什麼更新嗎？就自由現金流而言，就不尋常的項目或我們通常看到的節奏的任何變化而言，我們需要注意什麼？

Sure. So generally, our second quarter will be a cash usage period. We still believe that will be better than net income for the year. It does include all our CapEx, including the Troy expansion project and any CapEx related to the expansion into global sourcing as well as any other costs related to the expansion to global sourcing. So cash flow will pretty much be in the cadence that we've seen historically with the second half being strong.

當然。所以一般來說，我們第二季將會是現金使用期。我們仍然相信這將好於今年的淨利潤。它確實包括我們所有的資本支出，包括特洛伊擴張項目和與全球採購擴張相關的任何資本支出，以及與全球採購擴張相關的任何其他成本。因此，現金流將幾乎按照我們歷史上看到的節奏，下半年將強勁。

But even with those investments you're talking about here, your -- the expectation for free cash flow to be -- to exceed net income is -- it includes those unique items. Is that correct?

但即使有了你在這裡談論的這些投資，你對自由現金流的預期也會超過淨收入，它也包括那些獨特的項目。那是對的嗎？

That is correct.

那是對的。

Great. Great. And I guess on CPP. The improved profitability there was pretty impressive, and it sounds like your global sourcing strategy is on track and within budget. It's clearly moving along nicely. Is there any update on how we should think about kind of the cadence of getting to your targets in the coming quarters in your goals around the sourcing and what that could mean for margins?

偉大的。偉大的。我猜是在 CPP 上。獲利能力的提高非常令人印象深刻，而且聽起來您的全球採購策略正在步入正軌並且在預算之內。顯然進展順利。關於我們應該如何考慮在未來幾季實現採購目標的節奏以及這對利潤率意味著什麼，有什麼最新消息嗎？

Yes. So for this year, we still expect modest improvement in CPP's EBITDA. Keep in mind that this year, most of the products we're selling in North America is product that we built and is still at that higher cost as well as the fact that our customers' current inventory that we expect it to be normalizing somewhat into the back half of the year is still elevated. So the cadence remains, we'll see improved margin in '25. And by the time we get to '26, we expect to be across all of CPP at our 15% EBITDA margin goal.

是的。因此，今年，我們仍然預計 CPP 的 EBITDA 將略有改善。請記住，今年，我們在北美銷售的大多數產品都是我們製造的產品，而且成本仍然較高，我們預計客戶當前的庫存將在一定程度上正常化。下半年仍處於高位。因此，節奏仍然存在，我們將在 25 年看到利潤率的提高。到 26 年，我們預計整個 CPP 的 EBITDA 利潤率目標將達到 15%。

Our next questions come from the line of Julio Romero with Sidoti.

我們的下一個問題來自胡里奧·羅梅羅和西多蒂的線路。

I wanted to ask about CPP, if you could speak to price mix in the quarter and if that was flat or up or down year-over-year?

我想問 CPP，您是否可以談談本季的價格組合，以及與去年同期相比持平、上升還是下降？

Yes. There really was no significant impact from price and mix, pretty much flat. That's right.

是的。價格和組合確實沒有產生重大影響，幾乎持平。這是正確的。

Okay. Understood. And then as Troy mentioned earlier, it sounds like CPP is going well, the cost outs are going well. Are the benefits of those cost-outs kind of flowing through the P&L a little bit earlier than you expected? Or are they kind of right on track to your expectations?

好的。明白了。正如特洛伊之前提到的，聽起來 CPP 進展順利，成本支出也進展順利。這些成本支出的收益是否比您預期的要早一點流入損益表？還是他們符合您的期望？

They're generally on track. We started to see some benefit as we close some of the facilities, and that will continue to bleed at modest levels through the remainder of this year, and we'll really see the step up next year as we're more into the project and have more sourced inventory as part of our sales.

他們一般都在正軌上。當我們關閉一些設施時，我們開始看到一些好處，並且在今年剩餘時間裡，這種好處將繼續以適度的水平流失，隨著我們更加投入該項目，明年我們將真正看到這一進步。作為我們銷售的一部分，有更多的採購庫存。

Our next questions come from the line of Sam Darkatsh with Raymond James.

我們的下一個問題來自 Sam Darkatsh 和 Raymond James。

Terrific start to the year, especially with the difficult operating environment. My first would be, I mean, I guess, virtually all of the major residential window and door manufacturers have recently announced low to mid-single-digit price increases earlier this year for the first time in a little while. And I guess, dealers in the channel are also indicating the same for the garage door industry as well. What's prompting the move? Is it more sticky like labor and conversion rates? Or is it more cyclical like input cost inflation? And when do you see this hitting the HBP P&L? And I've got a follow-up also.

今年的開局非常好，尤其是在困難的經營環境下。我的第一個想法是，我想，幾乎所有主要的住宅門窗製造商最近都宣布今年早些時候的低至中個位數價格上漲，這是一段時間內的首次。我想，通路經銷商也對車庫門產業表示同樣的看法。是什麼促使這項舉動？它是否像勞動力和轉換率一樣更具黏性？還是像投入成本通膨那樣更具週期性？什麼時候會看到 HBP 損益表受到影響？我也有後續行動。

Sure. So as far as our own business, we have had no real change in our pricing structure, except for some minor price increases on operators, which is a small part of our business. In general, we're seeing -- our expectations for the year is that input costs will be roughly flat. And if that's the case, our prices will remain steady. However, if we see increased input costs, we will react accordingly.

當然。所以就我們自己的業務而言，我們的定價結構沒有真正的變化，只是對運營商進行了一些小幅度的提價，這只是我們業務的一小部分。總的來說，我們對今年的預期是投入成本將大致相當。如果是這樣的話，我們的價格將保持穩定。然而，如果我們看到投入成本增加，我們會做出相應的反應。

Got you. And then my last question. There's obviously lots of increased attention on potential new tariffs on Chinese sourced products. Have you determined yet your new contract manufacturer partners within CPP? And how much exposure do you ultimately think that you'll have to China once the conversion is complete?

明白你了。然後是我的最後一個問題。顯然，人們越來越關注對中國產品徵收的潛在新關稅。您是否已確定 CPP 內新的合約製造商合作夥伴？您最終認為，一旦轉換完成，您將在中國擁有多少曝光？

Go ahead, Ron, sorry.

繼續吧，羅恩，抱歉。

So initially, we are going with partners that we have in China. We've been working with them for years, supporting our Australian and U.K. geographies, which are already asset-light models. Ultimately, we'll react to any changes in tariffs by considering other providers and sources across the world. And last, all our competition is generally making product in the same location.

所以最初，我們將與我們在中國的合作夥伴合作。我們多年來一直與他們合作，支持我們的澳洲和英國地區，這些地區已經是輕資產模式。最終，我們將透過考慮世界各地的其他提供者和來源來應對關稅的任何變化。最後，我們所有的競爭通常都是在同一地點生產產品。

(Operator Instructions)

（操作員說明）

Our next questions come from the line of Justin Bergner with Gabelli Funds.

我們的下一個問題來自 Gabelli Funds 的 Justin Bergner。

Very nice quarter. The capital allocation going forward, the statements seem to change a bit in the press release to one of driving a capital allocation that will deliver long-term value for our shareholders versus one that is prioritizing repurchases from the press release a quarter ago. Maybe just can you elaborate if there's been any small change in your priorities there?

非常好的季度。展望未來的資本配置，新聞稿中的聲明似乎略有變化，變成了推動資本配置，為股東帶來長期價值，而不是季度前新聞稿中優先考慮回購的內容。也許你能詳細說明一下你的優先事項是否有任何微小的變化？

No. No change.

不，沒有改變。

Okay. Great. And then my follow-up question or second question. In Home & Building Products, can you comment on how the backlog developed over the quarter? And any trends in the backlog? I know you said that orders improved.

好的。偉大的。然後是我的後續問題或第二個問題。在家居和建築產品中，您能否評論一下本季積壓的情況？積壓情況有什麼趨勢嗎？我知道你說過訂單有改善。

Generally, backlog remains at normal levels or said another way, our lead times are generally normal.

一般來說，積壓保持在正常水平，或者換句話說，我們的交貨時間總體上是正常的。

Thank you. We have now reached the end of our question-and-answer session. I would now like to turn the floor back over to Ron Kramer for closing remarks.

謝謝。我們的問答環節現在已經結束了。我現在想請 Ron Kramer 致閉幕詞。

Thank you all for joining us, and we look forward to speaking to you in May.

感謝大家加入我們，我們期待在五月與您交談。

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

謝謝。今天的電話會議到此結束。我們感謝您的參與。此時您可以斷開線路。享受你一天剩下的時間。