Graco Inc (GGG) 2024 Q3 法說會逐字稿

Good morning, and welcome to the Third Quarter Conference Call for Graco Inc. If you wish to ask access the replay for this call, you may do so by visiting the Company's website at www.graco.com. Graco has additional information available in a PowerPoint slide presentation, which is available as part of the webcast player. At the request of the Company, we will open the conference up for question and answers after opening remarks from management. During this call, various remarks may be made by management about their expectations, plans and prospects for the future. These remarks constitute forward-looking statements for the purpose of the Safe Harbor provisions of the Private Security Litigation Reform Act. Actual results may differ materially from those indicated as a result of various risk factors, including those identified in Item one a. of the company's 2023 Annual Report on Form 10 K and in Item one a. of the Company's most recently quarterly report on Form 10 Q. These reports are available on the Company's website at www.graco.com and the SEC's website at www.SEC.gov. Forward-looking statements reflect management's current views and speak only as of the time they are made. The Company undertakes no obligations to update these statements in light of new information or future events. I will now turn the conference over to Christopher Knutson, Executive Vice President, Corporate Controller.

早上好，歡迎參加 Graco Inc. 第三季電話會議。 Graco 在 PowerPoint 幻燈片簡報中提供了更多信息，該簡報作為網路廣播播放器的一部分提供。應公司要求，我們將在管理層致詞後開放會議進行問答。在這次電話會議中，管理層可能會就他們對未來的期望、計劃和前景發表各種言論。這些言論構成《私人安全訴訟改革法案》安全港條款中的前瞻性聲明。由於各種風險因素（包括第 1 a 項中確定的風險因素），實際結果可能與所示結果有重大差異。公司 2023 年年度報告的表格 10 K 和第一項 a 中的內容。本公司最新季度報告的表格 10 Q。前瞻性陳述反映了管理階層目前的觀點，並且僅代表其做出時的情況。本公司不承擔根據新資訊或未來事件更新這些聲明的義務。我現在將會議交給執行副總裁兼公司財務總監克里斯托弗·克努森 (Christopher Knutson)。

Good morning, everyone, and thank you for joining our call. I’m here today with Mark Sheahan and David Lowe. I will provide a brief overview of our quarterly results before turning the call over to Mark for additional commentary. Yesterday, Graco reported third-quarter sales of $519 million, a decrease of 4% from the same quarter last year. Reported and adjusted net earnings decreased 8% to $122 million or $0.71 per diluted share. Excluding the impact of excess tax benefits from stock option exercises, the impairment charge and contingent consideration adjustment recorded in the third quarter of 2023, adjusted non-GAAP net earnings per share decreased 7%. The effect of currency translation had no significant impact on sales or net earnings for the quarter, the gross margin rate increased 50 basis points in the quarter. Realized pricing was more than enough to offset sales volume declines occurring in all segments. While product costs were lower for the first nine months of the year, they were a headwind in the quarter as our production volumes primarily in contractor have decline. We expect these headwinds to continue for the remainder of the year. Total operating expenses increased $9 million or 7% in the quarter, mainly due to new product development spending, growth initiatives and other corporate items, including the relocation to a new distribution center. Reductions in volume and earnings based expenses of $3 million, partially offset this increase. Gross margin rate improvement was unable to offset lower sales volumes and increased expenses during the quarter, resulting in an operating margin rate of 28%, a decline of 2% points from the same period last year. The Process segment operating margin rate decreased 4% points to 27% due to the impacts of higher spending and decreased volumes compared to the third quarter last year. Interest and other benefits increased $4 million during the quarter, driven primarily by lower interest expense at our long-term debt was repaid in 2023 in addition to increased interest income on cash held. The adjusted effective tax rate was 19%, which is consistent with our expected full-year tax rate of approximately 19.5% to 20.5% on an as-adjusted basis. Cash provided by operations totaled $436 million for the year, a decrease of $55 million from last year, driven mostly by inventory purchases related to new product launches, timing of estimated tax payments and lower net earnings. Cash provided by operations as a percent of reported net earnings is 116% for the year. Significant year to date uses of cash included repurchases of 399,000 shares for $31 million, dividends of $129 million and capital expenditures of $93 million, of which $60 million related to facility expansion projects. These cash uses were offset by share issuances of $45 million. A few comments as we look forward to the remainder of the year. Based on current exchange rates, assuming the same volumes, mix of products and mix of business by currency as in 2023, movement in foreign currencies would have no impact on net sales or net earnings for the full year. Our full year estimates for unallocated corporate expense and capital expenditures remain unchanged and can be found in the conference call slide deck on Page 10. Finally, effective January first, 2025, we will move to a global customer centric operating structure with four business divisions, Industrial, Powder, Expansion markets and Contractor. At that time, our regional teams, which previously operated independently, will be integrated into the business divisions. The current Industrial and Lubrication Equipment divisions, along with the Process Transfer equipment business that is part of the Process division, will be combined to form the new global Industrial division. The Powder division, which is currently structured as a global business, will continue to operate as it does today and will combine with the Industrial division to form the Industrial reporting segment. The new Expansion markets division will focus on driving inorganic growth in new or adjacent markets. Our existing environmental, semiconductor, high pressure valves and electric motors businesses, together with select future ventures and acquisitions will reside within this newly formed division and reporting segment. The contractor division will be restructured to serve the needs of our global customers and will remain unchanged as a reporting segment relative to prior periods. We will report financial results under these new segments for the first quarter of 2025. We will provide recast segment financial information in connection with our fourth quarter earnings release as supplemental information. I'll now turn the call over to Mark for further segment and regional commentary.

大家早安，感謝您加入我們的通話。今天我和馬克希恩 (Mark Sheahan) 和大衛洛 (David Lowe) 一起來到這裡。在將電話轉給馬克以獲取更多評論之前，我將簡要概述我們的季度業績。昨天，固瑞克公佈第三季銷售額為 5.19 億美元，較去年同期下降 4%。報告和調整後淨利潤下降 8%，至 1.22 億美元，即稀釋後每股收益 0.71 美元。不計入2023年第三季記錄的股票選擇權行使超額稅優惠、減損費用和或有對價調整的影響，調整後的非公認會計原則每股淨利下降7%。貨幣換算的影響對該季度的銷售額或淨利潤沒有重大影響，該季度的毛利率上升了50個基點。實現的定價足以抵銷所有細分市場的銷售下降。雖然今年前九個月的產品成本較低，但由於我們主要由承包商生產的產量下降，因此在本季成為了不利因素。我們預計這些不利因素將在今年剩餘時間內持續存在。本季總營運支出增加了 900 萬美元，即 7%，主要是由於新產品開發支出、成長計劃和其他公司項目（包括搬遷到新的配送中心）。銷量和基於收益的支出減少了 300 萬美元，部分抵消了這一增長。毛利率改善無法抵銷本季銷售下降和費用增加，導致營業利潤率為 28%，較去年同期下降 2 個百分點。與去年第三季相比，由於支出增加和銷售減少的影響，流程部門的營業利潤率下降了 4 個百分點，至 27%。本季利息和其他福利增加了 400 萬美元，主要是由於我們於 2023 年償還的長期債務的利息支出減少，以及持有現金的利息收入增加。調整後的有效稅率為19%，與我們預期的調整後的全年稅率約19.5%至20.5%一致。今年營運提供的現金總額為 4.36 億美元，比去年減少 5,500 萬美元，主要是由於與新產品發布相關的庫存採購、預計納稅時間和淨利潤下降。全年營運提供的現金佔報告淨利的百分比為 116%。年初至今的大量現金使用包括以 3,100 萬美元回購 399,000 股股票、1.29 億美元股息和 9,300 萬美元資本支出，其中 6,000 萬美元與設施擴建項目有關。這些現金使用量被 4,500 萬美元的股票發行所抵銷。我們期待今年剩餘時間的一些評論。根據目前匯率，假設按貨幣劃分的銷售量、產品組合和業務組合與 2023 年相同，外幣變動不會對全年淨銷售額或淨利產生影響。我們對未分配企業費用和資本支出的全年預估保持不變，可以在第 10 頁的電話會議幻燈片中找到。最後，自 2025 年 1 月 1 日起，我們將轉向以全球客戶為中心的營運結構，擁有四個業務部門：工業部門、粉末部門、擴張市場部門和承包商部門。屆時，我們先前獨立運作的區域團隊將併入業務部門。目前的工業和潤滑設備部門，以及屬於製程部門一部分的製程傳輸設備業務，將合併形成新的全球工業部門。粉末部門目前的結構為全球業務，將繼續以目前的方式運營，並將與工業部門合併形成工業報告部門。新的市場拓展部門將專注於推動新市場或鄰近市場的無機成長。我們現有的環境、半導體、高壓閥門和電動馬達業務以及選定的未來合資和收購將屬於這個新成立的部門和報告部門。承包商部門將進行重組，以滿足全球客戶的需求，並將作為報告分部與前期相比保持不變。我們將報告 2025 年第一季這些新細分市場的財務表現。我們將提供與第四季度收益發布相關的重新調整的部門財務資訊作為補充資訊。我現在將把電話轉給馬克，以獲取進一步的細分和區域評論。

Thank you, Chris, and good morning, everyone. I'd like to begin by discussing our recent announcements. In September, we announced our one Graco initiative focused on driving global growth, greater profitability and operational efficiencies. Starting in 2025, Graco will adopt a new global structure with the commercial focus, enabling our sales, marketing and engineering teams to focus squarely on revenue growth. This new customer centric approach focuses on segments with similar needs, helping us scale more easily as we grow and enhance our customer experience. The strategy builds on the success of our powder coating business and aligns well with the integration of protective coatings and spray foam businesses into the contractor division a few years ago. The new structure also strengthens our ability to pursue M&A opportunities through both our legacy divisions and the newly created Expansion Markets division, enabling us to target significant acquisitions in current and adjacent markets. As we establish our new market oriented global structure over the coming months, I have full confidence in our experienced leadership team and dedicated employees to navigate this change successfully. During the quarter, we also announced the acquisitions of PCT systems and Corob. PCT systems, which provides mega Sonic and ultrasonic wet cleaning systems complements our existing high purity chemical delivery equipment used in semiconductor and electronics production. Although the PCT acquisition closed during the quarter, it did not have a material impact on quarterly results. We also reached a definitive agreement to acquire Corob a global leader in high tech dispensing and mixing solutions for paints and coatings. This acquisition enhances our strong position in the growing paint and coating machinery manufacturing category within the contractor division, while expanding our global manufacturing footprint. We expect the Corob acquisition to close in the fourth quarter, and the combined annual revenue of these acquisitions is nearly $130 million. Were very optimistic about these opportunities and confident in our ability to leverage the complementary strengths of these businesses to drive growth and create value for our customers and shareholders. Moving on to our financial performance, all of my comments will be on an organic constant currency basis. Sales in the third quarter were down 4%, with declines in all segments except Industrial, which was flat. Industrial finishing system sales in the Americas and EMEA offset steep declines in Asia Pacific, especially China. Declines continued in the Process segment with weakness noted in the semiconductor and mining markets. New product introductions in the contractor segment have been well received and global protective coatings markets are strong. The decrease in China revenue across the industrial and process segments accounted for more than 90% of the overall revenue decline in the quarter and over 60% year to date. This represents broad-based weakness and overcapacity across key end markets, including automotive, batteries, solar, semiconductor and electronics. Incoming order rates in the third quarter continued to be difficult worldwide all major product categories, with the exception of our Powder Finishing business, saw order rates declined compared to the second quarter of this year. Weak demand continued in the Asia Pacific region, especially in China. These reductions have been consistent throughout the year. Demand in North America also softened during the quarter impacting all segments. In contrast, over the past six weeks, our consolidated global incoming order rates have shown improvement compared to the same period last year, experiencing 11% growth. This double-digit increase is primarily driven by both the industrial and process segments. While this is a relatively short time period, it gives us optimism for the remainder of the year. Now turning to some commentary on our segments. Contractor sales were down 1% in the third quarter. Protective Coatings grew across all regions, but it wasn't enough to offset softness in the pro paint and home center channels. Asia Pacific was a bright spot as the container market showed continued improvement after minimal activity last year. Response to new products continues to be favorably received and inventory levels within the channel are considered normal. We have additional new products targeted to be launched prior to the end of the year, which should also have some positive impact for the fourth quarter. Industrial sales were flat in the quarter as strong finishing system sales in both North America and EMEA were offset by heavy declines in Asia Pacific. Revenue in the Americas was higher for the second quarter in a row led by the timing of finishing system sales, along with increased activity across the liquid finishing and sealants and adhesive businesses. The team remains positive as quoting activity remains stable. However, CapEx investments are being delayed as end users are taking a wait-and-see approach. Moving on to the process segment, sales were down 12% compared to the same quarter last year, primarily due to continued weakness in the semiconductor and mining markets, along with a slowdown in vehicle service business. The decline in sales volume is the primary driver of the decrease in profitability with decremental margins of nearly 60% for the quarter. Moving on to our outlook. Overall conditions remain challenging as we continue to experience soft demand trends in many of our core markets. Were encouraged by the increased order activity so far in the fourth quarter and we have confidence in our new product lineup. However, it's still too early to know if these order rates will continue to the end of the year. As a result, we're maintaining our full year revenue guide of low single digit decline on an organic constant currency basis. That concludes our prepared remarks. Operator, we're ready for questions.

謝謝你，克里斯，大家早安。我想先討論一下我們最近發布的公告。9 月份，我們宣布了一項 Graco 計劃，重點是推動全球成長、提高獲利能力和營運效率。從 2025 年開始，固瑞克將採用新的以商業為重點的全球結構，使我們的銷售、行銷和工程團隊能夠專注於收入成長。這種新的以客戶為中心的方法專注於具有類似需求的細分市場，幫助我們在發展過程中更輕鬆地擴展並增強客戶體驗。該策略建立在我們粉末塗料業務的成功基礎上，並與幾年前將防護塗料和噴塗泡沫業務整合到承包商部門的計劃相一致。新結構還增強了我們透過傳統部門和新創建的擴展市場部門尋求併購機會的能力，使我們能夠在當前和鄰近市場進行重大收購。隨著我們在未來幾個月建立新的以市場為導向的全球結構，我對我們經驗豐富的領導團隊和敬業的員工成功駕馭這項變革充滿信心。本季度，我們也宣布收購 PCT Systems 和 Corob。PCT 系統提供大型聲波和超音波濕式清洗系統，補充了我們現有的半導體和電子產品生產的高純度化學品輸送設備。儘管PCT收購在本季完成，但並未對季度業績產生重大影響。我們也達成了收購 Corob 的最終協議，Corob 是油漆和塗料高科技分配和混合解決方案的全球領導者。此次收購增強了我們在承包商部門不斷增長的油漆和塗裝機械製造類別中的強勢地位，同時擴大了我們的全球製造足跡。我們預計對 Corob 的收購將在第四季度完成，這些收購的年收入總計將接近 1.3 億美元。我們對這些機會非常樂觀，並對我們利用這些業務的互補優勢來推動成長並為客戶和股東創造價值的能力充滿信心。談到我們的財務業績，我的所有評論都將基於有機的恆定貨幣基礎。第三季銷售額下降 4%，除工業部門持平外，所有部門均下降。美洲和歐洲、中東和非洲地區的工業塗飾系統銷售額抵消了亞太地區（尤其是中國）的急劇下降。製程領域持續下滑，其中半導體和採礦市場表現疲軟。承包商領域推出的新產品受到好評，全球防護塗料市場強勁。整個工業和流程領域的中國收入下降佔本季總收入下降的 90% 以上，而今年迄今則佔 60% 以上。這代表了汽車、電池、太陽能、半導體和電子產品等關鍵終端市場的普遍疲軟和產能過剩。第三季的新訂單率持續困難，除我們的粉末精加工業務外，全球所有主要產品類別的新訂單率均較今年第二季有所下降。亞太地區需求持續疲軟，尤其是中國。這些減少全年都是一致的。本季北美的需求也疲軟，影響到所有細分市場。相較之下，在過去六週內，我們的綜合全球接單率與去年同期相比有所改善，成長了 11%。這種兩位數的成長主要是由工業和加工領域所推動的。雖然這是一個相對較短的時期，但它讓我們對今年剩餘時間感到樂觀。現在轉向對我們的部分的一些評論。第三季承包商銷售額下降 1%。防護塗料在所有地區都有成長，但這不足以抵消專業塗料和家居中心通路的疲軟。亞太地區是一個亮點，貨櫃市場在去年的活動很少之後表現出持續改善。對新產品的反應繼續受到好評，渠道內的庫存水準被認為是正常的。我們還有其他新產品計劃在年底前推出，這也應該會對第四季產生一些正面影響。本季工業銷售持平，因為北美和歐洲、中東和非洲地區強勁的印後系統銷售被亞太地區的大幅下滑所抵銷。美洲地區的營收連續第二季成長，主要得益於塗飾系統銷售時機，以及液體塗飾、密封劑和黏合劑業務活動的增加。由於報價活動保持穩定，團隊保持積極態度。然而，由於最終用戶採取觀望態度，資本支出投資正被推遲。轉向流程領域，銷售額與去年同期相比下降了 12%，主要是由於半導體和採礦市場持續疲軟，以及汽車服務業務放緩。銷量下降是獲利能力下降的主要原因，本季利潤率下降了近 60%。繼續我們的展望。由於我們的許多核心市場繼續經歷需求疲軟的趨勢，整體情況仍然充滿挑戰。第四季迄今訂單活動的增加令我們感到鼓舞，我們對我們的新產品陣容充滿信心。然而，現在判斷這些訂單率是否會持續到年底還為時過早。因此，我們在有機固定貨幣基礎上維持了較低個位數下降的全年收入指南。我們準備好的演講到此結束。接線員，我們準備好回答問題了。

Thank you. The question and answer session will begin at this time. (Operator Instructions) Hi. First question is going to come from the line of Deane Dray with RBC Capital Markets. Please proceed.

謝謝。問答環節此時開始。（操作員說明）嗨。第一個問題將來自加拿大皇家銀行資本市場部的迪恩德雷 (Deane Dray)。請繼續。

Thank you. Good morning, everyone. Maybe we could start with the usual tour by end market and by region. Obviously more of a focus on APAC that 90% data point where the shortfall was. That's kind of what's going on there. Ground level. I do notice, there's no change in the traffic light chart, you're already at red lights in APAC for industrial and process. So maybe start with that tour end market and region and where the surprises were.

謝謝。大家早安。也許我們可以從通常的終端市場和地區巡迴開始。顯然，人們更關注亞太地區，90% 的數據都指出了不足之處。這就是那裡正在發生的事情。地面水平。我確實注意到，交通號誌圖表沒有變化，在亞太地區的工業和加工領域，您已經遇到了紅燈。因此，也許可以從巡迴終端市場和地區以及驚喜所在開始。

Yeah we were red and couldn’t make it any more red and it’s been flashing that way for awhile for us. China sales, we wanted to highlight that because we really do feel like that has been the main area where our businesses experienced the softness this year, again the Q3 China sales were down about $10 million for industrial and process. And the total AP sales were down $11.2 million. So really all of the decline is coming in those two camps within China and kind of the same story on a year-to-date basis. If you look across the end markets there, for sure, automotive is down compared to last year. The construction area is actually up a little bit for us because of what we've got going on in the container industry, so CED actually grew, which was nice to see. But really all of the other big markets in China, whether it's mining, battery production, solar, electronics they're all experiencing headwinds this year compared to what we've had in the past. Positively in Japan seems to be doing pretty well, Korea is hanging in there, and we're also seeing growth in India. So it really is kind of a China story. I think we need to get through the end of the year here. And then hopefully we can grow off of a lower base there.

是的，我們是紅色的，而且不能再讓它變得更紅了，而且它對我們來說已經這樣閃爍了一段時間了。中國銷售，我們想強調這一點，因為我們確實覺得這是我們業務今年經歷疲軟的主要領域，第三季度中國工業和加工領域的銷售額再次下降了約 1000 萬美元。AP 總銷售額下降了 1,120 萬美元。因此，實際上所有的下降都發生在中國境內的這兩個陣營，從今年迄今來看，情況大致相同。如果你縱觀那裡的終端市場，可以肯定的是，汽車產業與去年相比有所下降。由於貨櫃行業的發展，我們的建築面積實際上有所增加，所以 CED 實際上有所增長，這是很高興看到的。但實際上，中國所有其他大型市場，無論是採礦、電池生產、太陽能、電子產品，與過去相比，今年都遇到了阻力。從積極的方面來看，日本的表現似乎相當不錯，韓國也堅持不懈，我們也看到印度的成長。所以這確實是一個中國故事。我認為我們需要在這裡度過今年年底。然後希望我們能夠在較低的基礎上成長。

And how about the other regions

其他地區又如何呢

Europe is hanging in there pretty well across really across all of the different product categories. We had decent activity in industrial, process and contractor. So on an overall basis, while our revenues were down compared to a year ago. Kind of that low single digit decline really doesn't cause us a whole lot of concern. We did see nice activity in North America, really driven by some of the larger projects that we had on the finishing systems side of the business that freed up in the quarter that we're able to deliver and get customer recognition for. So I would probably characterize as the North America market seems decent, Europe ok and Asia-Pacific market has been really challenging for us.

歐洲在所有不同的產品類別中都表現得很好。我們在工業、加工和承包商方面有不錯的活動。因此，總體而言，雖然我們的收入與一年前相比有所下降。這種低個位數的下降確實不會引起我們太多的擔憂。我們確實在北美看到了不錯的活動，這實際上是由我們在業務的整理系統方面進行的一些較大項目推動的，這些項目在本季度釋放了我們能夠交付並獲得客戶認可的資源。因此，我可能會認為北美市場似乎不錯，歐洲市場還不錯，而亞太市場對我們來說確實具有挑戰性。

That's good and U.S.?

那很好，美國呢？

Yes. I mean, North America really is primarily U.S.

是的。我的意思是，北美實際上主要是美國

on that, I would say in talking with our teams here in here in North America, they've called out over recent months good activity in defense. Solar market, interestingly here in North America, which is soft in Asia, despite the challenges in the industry aerospace, electronics and even automotive in both the legacy in the EV manufacturers are pretty good markets for us.

關於這一點，我想說的是，在與我們北美團隊的交談中，他們稱讚近幾個月來的防守活動良好。有趣的是，太陽能市場在北美，在亞洲卻很疲軟，儘管航空航太、電子甚至汽車產業都面臨挑戰，電動車製造商的傳統對我們來說都是很好的市場。

Good. And then just as a follow up Mark, you and I talked about this at our RBC Industrials Conference a few weeks ago, just the genesis of the re-segmentation. The why now how did you land in these four categories and from is it still too early to talk about where and how the growth can be? You'd see some sort of improvement? And just where and how would you be measuring those benefits?

好的。然後，作為後續馬克，你和我在幾週前的加拿大皇家銀行工業會議上討論了這個問題，即重新細分的起源。為什麼現在你是如何進入這四個類別的？你會看到某種改進嗎？您將在哪裡以及如何衡量這些收益？

Yes. So I think the genesis was really this spring when our team got together and looked at some of the data and really figured out that we weren't growing as much organically as we thought that we could. And we felt like some of the structural barriers that we have put up as a team and the silos by creating divisions that have their own factories and their own marketing teams and their own engineering teams and approaching our channel partners individually versus trying to leverage as a one, Graco approach was really what we started with. We commissioned a group of leaders that were not direct reports of mine, but these were our high potential people within multiple business and regional units to take a look at the structure and come back with some recommendations. And after a few iterations with my team as well as the Board of Directors really landed on the one, Graco will approach. I think it will result in some efficiencies just in terms of our ability to target customers with the entire product line versus on a division-by-division basis. And will also up reorient us a little bit more towards looking at the key customer constituencies and a number of our business units. It's interesting because the end users, the customers in process, industrial and LED in a lot of cases are very similar. You go into a factory in your dealing with the guys that’s actually running the machine. You're dealing with the factory manager. You're dealing with an engineer, you're dealing with procurement people and being able to go in with a one Graco approach with the full product line, we think is going to have a lot of value versus having multiple teams interact with those that with those customers as well. So it's not going to flip a switch overnight. And as I think I told, you no, structure is perfect, but we really do believe that after running the current playbook for more than 20 years, it was time to take a fresh approach. And we're all excited about the prospects that the one Graco will have.

是的。所以我認為起源實際上是在今年春天，當時我們的團隊聚集在一起，查看了一些數據，並真正發現我們並沒有像我們想像的那樣有機地增長。我們覺得我們作為一個團隊和筒倉設置了一些結構性障礙，透過創建擁有自己的工廠、自己的行銷團隊和自己的工程團隊的部門，並單獨與我們的通路合作夥伴接觸，而不是試圖作為一個整體來利用。我們委託了一組領導者，他們不是我的直接下屬，但他們是我們多個業務和區域部門中的高潛力人員，他們來檢查結構並提出一些建議。經過我的團隊和董事會的幾次反覆討論，最終確定了這一目標，固瑞克將會接洽。我認為，與逐部門相比，我們透過整個產品線瞄準客戶的能力會提高一些效率。並且也將重新調整我們的方向，更專注於關鍵客戶群和我們的一些業務部門。這很有趣，因為在很多情況下，最終用戶、流程、工業和 LED 領域的客戶都非常相似。你走進一家工廠，與實際操作機器的人打交道。你正在和工廠經理打交道。您正在與一名工程師打交道，您正在與採購人員打交道，並且能夠採用單一固瑞克方法來處理整個產品線，我們認為與讓多個團隊與那些團隊進行互動相比，這將具有很大的價值以及那些客戶。因此，它不會在一夜之間翻轉開關。正如我想我所說的，不，結構是完美的，但我們確實相信，在運行當前的劇本 20 多年之後，是時候採取新的方法了。我們都對 Graco 的前景感到興奮。

Yes, that's great color and best of luck. Thank you.

是的，那是很棒的顏色，祝你好運。謝謝。

Thanks.

謝謝。

One moment for our next question. Our next question comes from the line of Michael Halloran with Baird & Co., Inc. Your line is open. Please go ahead.

請稍等一下我們的下一個問題。我們的下一個問題來自 Baird & Co., Inc. 的 Michael Halloran 專線。請繼續。

Good morning, everyone. So couple of questions. Just kind of following up on last. You know it at the end of the day, the seems more the restructuring you're doing here seems more like a driver for growth in the past. You've talked about tenants that 5.5% kind of growth, maybe adding 5% kind of growth last cycle being able to maybe add an incremental point of growth to that. Is that really with the goal here is from a loose quantification? And then secondarily, is there a margin benefit that you think you're going to drive from this as well with how you're moving things around globally?

大家早安。有幾個問題。只是最後的跟進。歸根結底，您在這裡所做的重組似乎更像是過去的成長動力。您談到了租戶的 5.5% 成長，也許上個週期增加 5% 的成長，可能會增加一個增量點。這裡的目標真的是來自鬆散的量化嗎？其次，您認為您將透過在全球範圍內開展業務來獲得利潤收益嗎？

Yes, for sure. Growth is the driver behind this. Again, as I said, our team got together and we look at the numbers that we felt like we could just do a better job. And so that was kind of the genesis of this change that we're going through. I guess the other piece that I didn't mention is that we also created a new group called expansion markets that will be not only managing some of the businesses that we've acquired over the last few years, but will also be looking for adjacent markets that are near those businesses and new sandboxes that we might potentially play in and as a company, I really felt like we didn't have anybody at Graco that was focused on that. And I think that there are other areas outside of our current businesses that we can play in on the M&A front. And so we'll be doing some work there as well, I think gives us maybe a better chance at being able to put points on the board from an M&A standpoint. Our divisions are still going to look at the stuff that they have always looked at. Our pipelines look pretty good there, but having that group, looking at those things, I think is going to be a change compared to what we've had in the past. In terms of efficiencies, yes, there will be some I think for now what we're doing is we're working through the details of what the new structures are going to look like. We're going to hit the ground running on January first that I think we'll be ready to talk about efficiencies and what we have expect to see after we're done with the work most likely when we make our year-end announcement and talk with you guys at that point, we don't have specifics yet that I'm comfortable sharing with you, but we are looking to drive both top line and bottom line growth with some of these moves.

是的，當然。成長是背後的驅動力。正如我所說，我們的團隊再次聚集在一起，查看我們認為可以做得更好的數字。這就是我們正在經歷的這種變化的起源。我想我沒有提到的另一件事是，我們還創建了一個名為「擴張市場」的新小組，該小組不僅將管理我們在過去幾年中收購的一些業務，而且還將尋找鄰近的業務。我認為，除了我們目前的業務之外，我們還可以在併購方面涉足其他領域。因此，我們也會在那裡做一些工作，我認為這可能給我們一個更好的機會，讓我們能夠從併購的角度在董事會上提出觀點。我們的部門仍然會關注他們一直在關注的東西。我們的管道在那裡看起來相當不錯，但是有了這個團隊，看看這些事情，我認為與我們過去的情況相比將會發生變化。就效率而言，是的，我認為目前我們正在做的是研究新結構的細節。我們將在一月份開始工作，我認為我們將準備好討論效率以及我們在完成工作後最有可能在發布年終公告時所期望看到的內容，到那時與你們交談，我們還沒有具體細節，我願意與你們分享，但我們希望透過其中一些措施來推動營收和利潤的成長。

Makes sense. And then kind of a two fold question here. First, you know, obviously we're late in the year here. So your guidance you can kind of get some implied growth for the fourth quarter here, but it's a pretty wide range. So the first question is basically, are we talking about a fourth quarter growth rate than is similar to this low single digit guidance for the full year? And then related, could you just put what's going on with the backlog in the orders in context and help us understand how that's flowing through things as it sits here?

有道理。然後這裡有一個雙重問題。首先，你知道，顯然我們今年已經太晚了。因此，您的指導可以在此處獲得第四季度的一些隱含增長，但範圍相當廣泛。因此，第一個問題基本上是，我們談論的第四季成長率是否與全年的低個位數指引類似？然後相關的是，您能否將訂單中的積壓情況放在上下文中，並幫助我們了解它是如何在此處流動的？

Yeah, I think the guide is pretty consistent with what we've had now for a couple of quarters. I guess where we're targeting the low single digit constant currency revenue decline. So you guys can do the math on that, but I think it would play out that that's likely what you're going to see in Q4, what we saw in Q3 and kind of the year to date number as well. We have experienced quite a bit of backlog reduction. I remember in our backlog was $450 million and now it’s $230 so we’re at the point where we’re back to I call it a normal business for the Graco , mostly book and ship with a couple of exceptions, one being our powder coating business where we do have some backlog there. And then our are some of our longer term projects in the industrial side as well. But in terms of where we're at on backlog, I think we're at a point now where we should expect to see this number kind of hang in there going forward, barring any kind of crazy stuff like we had a couple of years ago where everybody was placing all kinds of orders. So it does create some headwind for us as you know, I'm sure when you look at 2023 versus 2024, that backlog came down in 2023, it's come down in 2024, but not quite as much as we look at 2024 and a 2025. If we're assuming that were at normal levels, we won't have this built-in reduction in backlog. So we factor all that into the guide that we give you guys were comfortable with it at this point, and we hope that we're able to hit it by the end of the year. And then as we get to 2025, obviously, we'll update our outlook that point.

是的，我認為該指南與我們幾個季度以來的情況非常一致。我猜我們的目標是維持低個位數的恆定貨幣收入下降。所以你們可以對此進行數學計算，但我認為這很可能是您在第四季度看到的，我們在第三季度看到的，以及今年迄今為止的數字。我們已經經歷了相當多的積壓減少。我記得我們的積壓訂單是 4.5 億美元，現在是 230 美元，所以我們現在回到了我稱之為 Graco 的正常業務的地步，主要是預訂和發貨，有幾個例外，其中之一是我們的粉末塗料業務，我們確實有一些積壓。然後我們還有一些工業方面的長期專案。但就我們的積壓情況而言，我認為我們現在應該期望看到這個數字在未來保持不變，除非出現任何像我們幾年前那樣瘋狂的事情以前每個人都在下各種各樣的訂單。因此，正如您所知，這確實給我們帶來了一些阻力，我確信當您比較2023 年和2024 年時，積壓訂單會在2023 年下降，在2024 年下降，但不如我們在2024 年和2025年看到的那麼多。如果我們假設處於正常水平，我們就不會減少積壓。因此，我們將所有這些因素都納入了我們提供給你們的指南中，大家對此感到滿意，我們希望我們能夠在今年年底之前實現這一目標。顯然，到了 2025 年，我們將更新我們的展望。

Thanks, Mark. Appreciate it.

謝謝，馬克。欣賞它。

Thank you. And one moment for our next question. Next question is going to come from the line of Saree Boroditsky with Jefferies. Your line is open. Please go ahead.

謝謝。請稍等一下我們的下一個問題。下一個問題將來自 Saree Boroditsky 和 ​​Jefferies 的線。您的線路已開通。請繼續。

Hi, good morning . And the gross margin performance was really strong in the quarter up year over year despite the lower volumes. Can you just talk about the contribution of price cost or other productivity drivers that help offset that lower factory volumes?

嗨，早安。儘管銷量較低，但本季的毛利率表現確實比去年同期強勁。您能否談談價格成本或其他生產力驅動因素有助於抵消工廠產量下降的影響？

Well, I think at this is David. I think the starting point is certainly the effectiveness we've had in realized pricing really now for two full years because we did our interim adjustments, I think in the middle of 2022 and one of the consistencies and our favorable price cost relationship since has been what we've achieved and pricing. Admittedly, the increases we saw in the second half of 2022 and all of 2023 were a bit more dramatic than what we're seeing today. But it's been consistent and it's been consistent across all business units and regions. And so I think pricing has been the hero. In terms of the cost structure, and Chris can correct me if I am straying a bit. Input costs have leveled out, but they certainly have not declined to levels that we saw in any meaningful way in periods prior to 2020, 2021 and in earlier periods. So we are working with a higher cost structure, both for input cost, labor and on the energy and other things. But we're covering those. I think a may be more recent development that has an impact on us is some less ability to absorb all of factory overhead because of the decline in unit volumes that we touched on in our opening comments. But with that said, the overall price cost has remained positive

好吧，我想這就是大衛。我認為起點肯定是我們在整整兩年內實現定價的有效性，因為我們進行了中期調整，我認為在 2022 年中期，一致性和我們有利的價格成本關係之一是我們所取得的成就和定價。誠然，我們在 2022 年下半年和 2023 年全年看到的成長比我們今天看到的要戲劇性一些。但它是一致的，而且在所有業務部門和地區都是一致的。所以我認為定價一直都是主角。就成本結構而言，如果我有一點偏離，克里斯可以糾正我。投入成本已經趨於平穩，但肯定沒有下降到我們在 2020 年、2021 年之前以及更早時期看到的任何有意義的水平。因此，我們正在採用更高的成本結構，無論是投入成本、勞動力或能源和其他方面。但我們正在涵蓋這些。我認為，最近對我們產生影響的一個發展可能是，由於我們在開場評論中提到的單位產量下降，吸收所有工廠間接費用的能力有所下降。但話雖如此，整體價格成本仍為正

I'm pretty happy with the factory performance, given the fact that we've had volume declines actually have the margins go up. I would say that we are locked and loaded from a production standpoint and our ability to react when volumes do pick up. We feel like the businesses is in great shape. And once we get the volume growth the leverage is going to be really nice to see.

我對工廠的表現非常滿意，因為我們的銷售下降實際上利潤率上升了。我想說，從生產的角度來看，我們已經鎖定並加載，並且我們在產量確實增加時做出反應的能力。我們覺得企業狀況良好。一旦我們實現銷售成長，槓桿作用將會非常明顯。

You mentioned incoming orders over the last six weeks, I believe 11% and with growth in industrial and process. Could you just kind of dive into that a bit. What markets or regions are driving us? And then as you think about North America industrials, you mentioned the timing of finishing sales. It just seems at odds with commentary on the CapEx pause. Could you just help us understand what's driving the strong demand brand?

您提到過去六週收到的訂單，我認為增長了 11%，並且工業和加工領域出現了增長。能稍微深入一下嗎？哪些市場或地區正在推動我們？然後，當您想到北美工業品時，您提到了完成銷售的時間。這似乎與資本支出暫停的評論不一致。您能否幫助我們了解是什麼推動了品牌的強勁需求？

Yes. I think the growth in orders over the last six weeks, again, pretty short time period have been broad-based with the exception of Asia, which is still challenging to us. So and we want to just point out that it was mostly in the Industrial and Process segments, which have been the ones that have been really creamed this year when it comes to the declines that we've seen in that in that particular region. So I wouldn't read too much into it other than we thought it was an interesting data point to share with you. We want to be as transparent as possible and hopefully give you a little bit more confidence in our full year revenue guide of down low single digits for the full year. When it comes to the North America industrial business, we did we were able to recognize some larger project activity that was previously booked after customer sign-off, particularly in the in the Powder industry. And so that really did help drive growth. If you were to sort of strip that out, you would probably see something similar in North America, industrial, what we're seeing in Europe from a total demand standpoint, it that's helpful.

是的。我認為過去六週的訂單增長在相當短的時間內是廣泛的，但亞洲除外，這對我們來說仍然是一個挑戰。因此，我們只想指出，主要是在工業和加工領域，當談到我們在該特定地區看到的下降時，這些領域今年確實受到了嚴重影響。因此，除了我們認為這是一個值得與您分享的有趣數據點之外，我不會對其進行過多解讀。我們希望盡可能透明，並希望讓您對我們的全年收入指南更有信心，全年收入指南將下降到低個位數。當涉及北美工業業務時，我們確實能夠識別出一些先前在客戶簽字後預訂的較大項目活動，特別是在粉末行業。這確實有助於推動成長。如果你要剔除這一點，你可能會在北美看到類似的情況，從總需求的角度來看，我們在歐洲看到的情況，這很有幫助。

Appreciate the color. Thank you.

欣賞顏色。謝謝。

Yes,

是的，

thank you. And one moment for our next question. Next question is going to come from the line of Matthew Summerville with D.A. Davidson. Your line is open. Please go ahead.

謝謝。請稍等一下我們的下一個問題。下一個問題將來自 Matthew Summerville 和 D.A.戴維森。您的線路已開通。請繼續。

Thanks. Within the Process business, it looks like the decrementals have been worsening on a year-to-date basis. Is there some something else that may be falling off there when you look at sequentially how that business performed? Just help me understand a little bit of both puts and takes from the top and bottom line.

謝謝。在流程業務中，今年迄今的衰退似乎一直在惡化。當您按順序查看該業務的表現時，是否還有其他一些因素可能會下降？請幫助我從頂線和底線了解一些看跌期權和索取期權。

Matt, this is Chris. Looking at that business, the decremental have been tough for the whole year. I would say what we do see within that business in particular is when we do see volumes fall off in almost all of the factory locations, it really does impact the decrementals pretty hard across the board. Earlier in the year, we may have had some benefits from one of our factories having volume, which could have offset some of the costs and some of the other locations. But what we're seeing now is pretty broad-based across all of the different business units, which is driving that decremental margin.

馬特，這是克里斯。從該業務來看，全年的減量都很艱難。我想說的是，我們在該業務中確實看到的是，當我們確實看到幾乎所有工廠地點的銷量下降時，它確實對全面的減量產生了相當大的影響。今年早些時候，我們可能從我們的一家工廠的產量中獲得了一些好處，這可以抵消一些成本和其他一些工廠的成本。但我們現在看到的情況在所有不同的業務部門中都非常廣泛，這導致了利潤率的下降。

Yes. I think the only thing I would add is that as we've kind of rolled the year here a little bit, we have seen a little bit more weaker activity in our lubrication businesses, which are really nicely profitable. And so when I look at like Q1, Q2 versus Q3 the revenues there who have come down a little bit sequentially through those quarters. The other big one obviously is the semiconductor business, which is way down from year ago, but the bookings are starting to pick up there as anticipated with the with the pickup that everyone's predicting for 2025.

是的。我想我唯一要補充的是，隨著我們將這一年推後了一些，我們發現我們的潤滑業務的活動稍微疲軟了一些，而這些業務的利潤確實很高。因此，當我查看第一季、第二季和第三季時，這些季度的收入連續下降了一點。另一個重要的領域顯然是半導體業務，該業務較去年同期大幅下降，但該業務的預訂量開始按預期回升，每個人都預測 2025 年將出現回升。

I should leave well enough along that all add that the two points Mark mentioned also ties once again into the whole Asia Pacific arena, where semiconductor where there's a lot of activity in region and the ongoing softness there has been no secret and is pretty dramatic. And in the lubrication space, the mining markets, not just in China, but even in the Southeast, Asia are a significant portion of that business. So when those markets are soft, I'd say, especially in region, you see that flow through the process segment.

我應該留下足夠多的內容，所有補充說，馬克提到的兩點也再次與整個亞太地區聯繫在一起，該地區的半導體領域有很多活動，而且持續的疲軟已經不是什麼秘密，而且非常引人注目。在潤滑領域，採礦市場不僅在中國，甚至在東南亞和亞洲也是該業務的重要組成部分。因此，我想說，當這些市場疲軟時，尤其是在該地區，您會看到流程部分的流動。

Got it. And then just as a follow up I’m wondering if you can talk about Corob for a moment. What is historical organic growth rate of that business look like and what is their US presence today? And how are you thinking about being able to leverage your sort of big box relationships here, just generically, call them to maybe bring Cororb presence to the market or lift their presence in the local market? Thank you.

知道了。作為後續行動，我想知道您是否可以談談 Corob。該業務的歷史有機成長率是多少？您如何考慮能夠利用您在這裡的大型關係，只是一般性地打電話給他們，也許可以將 Cororb 帶到市場或提升他們在當地市場的存在？謝謝。

Yes, I appreciate the question. Given that we haven't closed the deal, I'm a little bit limited in what I can say but what I will say, okay. Here's what I like about the business. Number one, we understand the technology its metering, it's mixing, it's tinting. It's stuff that Graco knows how to do pretty well. We also do like the overlap on the customers. Some of their big customers are Graco customers. I think their presence outside of North America is much bigger than it is in North America. And we are hopeful that they can help us out in the Asia-Pacific region with some of the contacts they have like Asian Paints and that we can potentially leverage our good relationships at the home center customers that we have and the other larger professional channel customers that we have as well. So I think there are some revenue synergies there that we are hopeful to get. In terms of their growth, historically it's kind of been in that low to mid single digits. So it's not too dissimilar from what Graco has in terms of organic growth through a cycle. So I think that we feel we feel pretty good about that. Lastly, what I'll say is that they have really good production in Italy and they also have a footprint in India, production-wise that we like. And that is an area that we've thought about expanding into for Graco to expand our presence in India from a production standpoint, given the activity that's happening there. So this gives us a footprint immediately to do that and to experiment with it, it's a little bit lower risk than if we had planted a flag somewhere or did that on our own. So I think we're excited about that as well.

是的，我很欣賞這個問題。鑑於我們還沒有完成交易，我能說的有點有限，但我會說的，好吧。這就是我喜歡這個行業的地方。第一，我們了解計量、混合、著色等技術。Graco 非常清楚如何做好這些事情。我們也確實喜歡客戶的重疊。他們的一些大客戶是 Graco 客戶。我認為他們在北美以外的存在比在北美大得多。我們希望他們能夠透過亞洲塗料等人脈關係幫助我們在亞太地區擺脫困境，並且我們可以利用我們在家居中心客戶和其他大型專業渠道客戶中的良好關係我們也有。因此，我認為我們希望能夠實現一些收入協同效應。就其成長而言，歷史上一直處於中低個位數。因此，就循環有機成長而言，它與 Graco 的情況並沒有太大不同。所以我認為我們對此感覺很好。最後，我要說的是，他們在義大利擁有非常好的生產，並且在印度也有足跡，從生產角度來看，我們很喜歡。考慮到那裡正在發生的活動，從生產的角度來看，這是我們考慮讓 Graco 進入的一個領域，以擴大我們在印度的業務。因此，這為我們提供了立即執行此操作並進行實驗的足跡，這比我們在某個地方插上一面旗幟或自己做這件事的風險要低一些。所以我認為我們也對此感到興奮。

Great. Thanks, Mark. Thank you.

偉大的。謝謝，馬克。謝謝。

And one moment for our next question. Our next question comes from the line of Jeffrey Hammond with KeyBanc Capital Markets. Your line is open. Please go ahead.

請稍等一下我們的下一個問題。我們的下一個問題來自 KeyBanc Capital Markets 的 Jeffrey Hammond。您的線路已開通。請繼續。

Hey, good morning, guys. Just I'm wondering, I guess as you talk to customers and you take kind of the last six weeks of orders, anything that sticks out that starts to feel better and kind of gets you out of this rut. I think you mentioned Asia still particularly challenged, but just any any kind of green shoots?

嘿，早上好，夥計們。只是我想知道，我想當你與客戶交談並接受過去六週的訂單時，任何突出的事情都會開始讓你感覺更好並讓你擺脫這種困境。我想你提到亞洲仍然面臨特別的挑戰，但有任何一種萌芽嗎？

Yes. I think that there's obviously a lot of uncertainty out there these days and not anything you guys don't know with all these wars going and elections and other things. So I think that there's still a fairly cautious mindset when it comes to our channel partners and end users when they're thinking about making capital type of investments. So again, we thought the data point was interesting. I do think that we're starting to anniversary maybe some of the comps that we've had over the last couple of years. As I mentioned earlier, our backlogs now are kind of at levels where you would have expected them to be on a normalized basis. And so as those backlogs have come down, obviously, customers start to reorder. And hopefully, we've seen sort of a bottoming out here and we can start to see some improvement off of what been a couple of tough years.

是的。我認為這些天顯然存在著許多不確定性，而且隨著戰爭、選舉和其他事情的進行，你們並不是不知道任何事情。因此，我認為，當我們的通路合作夥伴和最終用戶考慮進行資本類型的投資時，他們仍然保持相當謹慎的心態。所以，我們再次認為這個數據點很有趣。我確實認為我們即將開始週年紀念，也許是我們過去幾年的一些比較。正如我之前提到的，我們的積壓訂單現在達到了您預期的標準化水準。因此，隨著積壓訂單的減少，客戶顯然開始重新訂購。希望我們已經看到了某種程度的觸底反彈，並且我們可以開始看到過去幾年艱難時期的一些改善。

I guess I would add that Mark touched on the fact that the six weeks is not a very long, very long period, and this is more anecdotal. But just in conversation just in a recent conversation, taking a look at our EMEA space businesses that have been okay thus far this year, for example, on the protective coating part of the contractor business, especially the portion of the markets that serves energy and some of the support infrastructure in the Middle East has remained strong. We have been seeing my expectations as somebody who's based in Europe years ago always is a little low on the industrial side, but there has been a fairly steady drumbeat of regular business, including the automotive markets. And finally, even in the process space, which has been struggling a bit there has been some recent order activity that is more encouraging than what we have seen earlier in the year.

我想我要補充一點，馬克談到了這樣一個事實：六週並不是一個非常非常長的時期，這更多的是軼事。但就在最近的一次談話中，我們來看看今年迄今為止表現良好的歐洲、中東和非洲航太業務，例如，承包商業務的保護塗層部分，特別是服務於能源和能源的市場部分。一些支援基礎設施仍然強勁。我們一直看到我的期望，因為幾年前住在歐洲的人在工業方面總是有點低，但包括汽車市場在內的常規業務一直相當穩定。最後，即使在一直陷入困境的流程領域，最近的一些訂單活動也比我們今年早些時候看到的更令人鼓舞。

Okay. And then just I appreciate the color on the one Graco and the new segment. But if we look maybe a more technical on the segment changes, can you just walk through sounds like contractors unchanged and then we're moving a business or two from process into the industrials. Is it that simple.

好的。然後我欣賞 Graco 和新部分的顏色。但是，如果我們對細分市場的變化進行更技術性的研究，您是否可以簡單地聽一下承包商不變的聲音，然後我們將一兩個業務從流程轉移到工業領域。真有那麼簡單嗎。

I think the way that you look at it, the way that it is today, Jeff, we have our industrial division and our power division. They'll still stay in the Industrial Group we will move our lubrication and a portion of our Process division into that industrial group and the remaining business, will break out and create the expansion markets area, which is the semiconductor, the high pressure valves and the environmental businesses.

我認為傑夫，按照你的看法，今天的情況，我們有我們的工業部門和我們的電力部門。他們仍將留在工業集團，我們將把我們的潤滑和部分製程部門轉移到該工業集團，其餘業務將突破並創建擴展市場領域，即半導體、高壓閥門和環保企業。

Yes, the only the only comment I'll make, Jeff, is that yes, for sure, it's just exactly as Chris described.

是的，傑夫，我唯一要說的就是，是的，當然，這正如克里斯所描述的那樣。

But historically, we've operated our regions on a matrix basis where they had a separate P&L and they would make decisions based on what they thought was best for the region. We’re moving into global structures where our industrial business will now manage a global P&L and they'll be able to make those decisions based on the opportunities they see. The same thing on the contractor side were kind of knocking down the matrixes, and we're going to be running global businesses, which we're excited about. It's worked really well for us with GEMA, and we think that moving to that approach with Graco will be beneficial as well.

但從歷史上看，我們在矩陣的基礎上運作我們的地區，他們有單獨的損益表，他們會根據他們認為最適合該地區的決策做出決策。我們正在進入全球結構，我們的工業業務現在將管理全球損益表，他們將能夠根據他們看到的機會做出這些決策。承包商方面的同樣的事情有點打破矩陣，我們將經營全球業務，我們對此感到興奮。它對我們與 GEMA 的合作非常有效，我們認為與固瑞克一起採用這種方法也將是有益的。

And maybe just last one on M&A pipeline behind the two deals, and would you expect that particularly more focus is going to be in this expansion markets? Or do you think you're still looking pretty broad-based?

也許只是這兩筆交易背後的併購管道的最後一筆，您是否認為這個擴張市場將得到特別更多的關注？還是你認為你的基礎仍然相當廣泛？

Well, our pipeline that we have has been built up historically by the divisions. So if I look at the pipeline, I've got about 100 companies in there that we are talking to and active. I kind of ones that we would consider acquiring if they became available. And so we have good momentum there. And I think the market is a little more favorable today than it was a year ago. And so I'm hopeful that we will see some activity coming from that pipeline that we've already got. Expansion markets to the extent that we've got businesses already there, they have names in the pipeline that they will pursue. But in addition to that, we're also going to challenge that group, by doing more research outside of our existing markets and find some spaces that maybe our divisions have looked at and see if there's opportunities for Graco or to expand into those as well. We don't have any targets. But I do feel really good about the fact that now we're going to have a group that is charged with that kind of a responsibility beyond just looking at things that are really closely adjacent to us.

嗯，我們的管道在歷史上是由各部門建立的。因此，如果我查看管道，我會發現大約有 100 家公司正在與我們交談並處於活躍狀態。如果有的話我們會考慮購買。所以我們在那裡有良好的勢頭。我認為今天的市場比一年前更有利一些。因此，我希望我們能夠看到我們已經擁有的管道中出現一些活動。市場擴張到我們已經有業務的程度，他們已經有了他們將要追求的名字。但除此之外，我們還將透過在現有市場之外進行更多研究來挑戰該群體，並找到我們部門可能已經研究過的一些空間，看看固瑞克是否有機會或也可以擴展到這些領域。我們沒有任何目標。但我確實感到非常高興，因為現在我們將有一個團隊承擔起這種責任，而不僅僅是專注於與我們密切相關的事情。

Okay. Appreciate it. Mark.

好的。欣賞它。標記。

Thank you. And one moment for our next question. Next question is going to come from the line of Andrew Buscagalia with BNP Paribas. Your line is open. Please go ahead.

謝謝。請稍等一下我們的下一個問題。下一個問題將來自法國巴黎銀行的安德魯·布斯卡爾加里亞 (Andrew Buscagalia)。您的線路已開通。請繼續。

I wanted to touch on within contractor, you got these new products with new product cycle rolling out. We haven't seen much acceptance from it yet. It seems like you're saying you're there's more products coming out of Q4. Is that informing our guide that you guys maintaining your guidance? Do you see anything in your orders that you see greater sales in that area?

我想談談承包商內部，隨著新產品週期的推出，你得到了這些新產品。我們還沒有看到它得到太多的接受。您似乎是在說第四季將推出更多產品。這是在通知我們的導遊你們維持你們的指導嗎？您在訂單中是否發現該地區銷售額增加？

Well, I think we've done really well with our new products. So I would say that they've driven a lot of incremental revenue in a market that's not been great. So I mean, if you look at the macro factors in the housing market in North America, for example, there's still flashing kind of red yellow signs. And the fact that were we were flat through the first six months in Contractor and were flat in Q3 I think it's been fairly consistent. It's always hard for us to know exactly what would our revenue have been if we didn't have the new products but we all feel like if we didn't have those new products, you would see different numbers than what we've reported. As we get into Q4, I think it's not going to be like a big step change. We are excited about some of the products that are coming out in Q4, but I don't know that they're going to have a meaningful impact over a 13 week time period. And yes, that definitely did inform our decision on what we wanted to do for the guide for the full year. Okay.

嗯，我認為我們的新產品做得非常好。所以我想說，他們在一個不太好的市場中帶來了大量的增量收入。所以我的意思是，如果你看看北美房地產市場的宏觀因素，例如，仍然有閃爍的紅黃色跡象。事實上，我們在承包商的前六個月持平，並且在第三季度持平，我認為這是相當一致的。我們總是很難確切地知道如果我們沒有新產品的話我們的收入會是多少，但我們都覺得如果我們沒有這些新產品，你會看到與我們報告的數字不同的數字。當我們進入第四季度時，我認為這不會是一個很大的變化。我們對第四季度推出的一些產品感到興奮，但我不知道它們是否會在 13 週的時間內產生有意義的影響。是的，這確實影響了我們對全年指南的決定。好的。

Yes. Hey, Mark, you're talking more about the interesting kind of M&A Are we really looking into like brand new end market you don't play and yet that are maybe not less correlated with what you guys do or is it a brand-new product real-world that you're trying to get into that seems like a slight change versus the past.

是的。嘿，馬克，你更多地談論了有趣的併購類型，我們是否真的正在研究你不參與的全新終端市場，但這可能與你們所做的事情相關性並不低，或者它是一個全新的市場您試圖進入的產品現實世界與過去相比似乎略有變化。

There is a change, and we'll see how it unfolds here. But I mean, yes, there's a lot of fluid handling opportunities in markets that Graco doesn't play in and that we've got a lot of expertise there that we can bring. We've got great engineers. We know how to manufacture stuff. We've got a global footprint. We have customers that have some of those needs that we don't really address today. So we'll be challenging our teams to run the numbers, look at the opportunities and see if there's anything for us there that we haven't really looked at in the past.

有一個變化，我們將在這裡看到它是如何展開的。但我的意思是，是的，固瑞克沒有涉足的市場中有很多流體處理機會，而我們可以在那裡帶來很多專業知識。我們有優秀的工程師。我們知道如何製造東西。我們的足跡遍及全球。我們的客戶有一些我們目前尚未真正滿足的需求。因此，我們將挑戰我們的團隊來計算數字，尋找機會，看看是否有我們過去沒有真正考慮過的東西。

Thank you.

謝謝。

Thank you. (Operator instructions). Our next question is going to come from the line of Walter Liptak with Seaport Global Securities LLC. Your line is open. Please go ahead.

謝謝。（操作員說明）。我們的下一個問題將來自 Seaport Global Securities LLC 的 Walter Liptak。您的線路已開通。請繼續。

Hi, thanks. Good morning, everyone. So wanted to ask a follow-up on China. You talked about the industrial and process having some headwinds in the $10 million some falloff in industrial and process. So I guess the question, what do we what are we thinking about like with their quoting and their funnels? What does it take to get the China business. Are we looking for macro things like the government stimulus that's going on? Or how should we think about sort of them near term outlook?

你好，謝謝。大家早安。所以想詢問有關中國的後續情況。您談到工業和加工行業在 1000 萬美元的損失中遇到了一些阻力。所以我想問題是，我們對他們的引用和管道的想法是什麼？獲得中國業務需要什麼？我們是否正在尋找諸如政府刺激措施之類的宏觀因素？或者我們應該如何考慮其中的近期前景？

Yes. I think there's been a little bit of overcapacity built over there in the last couple of years. So I think there's some catch up that's going on. As I look at what's happening in our end markets is really kind of across the board and most of the big ones. It’s not like it's limited to any one particular thing. If you look at semiconductor that down, automotive was down batteries down. I do feel like over the last few years, they've built a lot of capacity, What's going to change hopefully, at some point we get to equilibrium level. And then business conditions are a little bit better for us in China, but we've had over the last 12 months or so. I don't think that the stimulus is going to have a meaningful impact in the short term. We'll see what happens, but we certainly haven't seen that so far in our results.

是的。我認為過去幾年那裡出現了一些產能過剩。所以我認為正在發生一些追趕。當我觀察我們的終端市場所發生的事情時，確實是全面的，而且是大多數大型市場。它並不局限於任何一件特定的事情。如果你看看半導體的下降，汽車的電池下降。我確實覺得在過去的幾年裡，他們已經建立了很多能力，希望能夠改變什麼，在某個時候我們達到平衡水平。然後，我們在中國的商業狀況稍微好一點，但在過去 12 個月左右的時間裡，情況一直如此。我認為刺激措施不會在短期內產生有意義的影響。我們會看看會發生什麼，但到目前為止我們還沒有在結果中看到這一點。

Okay, great. It's been a couple of quarters that we've been talking about China now. So that is going to be more of the same you think until we get easier comps in the back half of next year or were known to the comps get easier?

好的，太好了。我們已經有幾個季度一直在談論中國了。那麼，在我們在明年下半年獲得更容易的比賽之前，或者知道比賽變得更容易之前，你認為這會更加相同嗎？

Well, I would say that on the comment about overcapacity is right and here's where you have to go from I think generalizing about the economy to specific markets. As an old industrial guy I'm hopeful that there's still going to be lots of interesting investments. I believe this in battery, electric vehicle and some of the traditional markets where we've been. There are certain markets, for example, the construction sector that would suggest there could be a downturn that could go on for quite a while. If you believe some of the reports that have come out in recent months where you have millions of units that have been constructed that are empty. And I think that could play, that's going to take more than a liquidity program to drive the kind of confidence, confidence that our sort of end users are going to need to make big investments in that space.

嗯，我想說的是，關於產能過剩的評論是正確的，我認為這就是你必須從對經濟的概括到特定市場的地方。作為一個老工業人，我希望仍然會有很多有趣的投資。我相信電池、電動車和我們去過的一些傳統市場都是如此。某些市場，例如建築業，可能會出現持續相當長一段時間的低迷。如果您相信最近幾個月發布的一些報告，其中有數百萬已建成的單位是空的。我認為這可能會發揮作用，這需要的不僅僅是流動性計劃來增強我們的最終用戶需要在該領域進行大量投資的信心。

Okay, great. And then on the on the new segmentation and was great focused on growth. Can you give us an idea of what the expansion markets with the growth rate you think might look like?

好的，太好了。然後是新的細分市場，並且非常注重成長。能為我們介紹一下您認為的擴張市場的成長率嗎？

Well, the organic growth of those segments isn't going to be vastly different from the organic growth than, Graco , there's a little more volatility in there with the semiconductor that you'll see from quarter to quarter. But again, the trends there right now that to be pretty favorable. The real, you know, piece that I can't answer is the inorganic side. And hopefully, again, the team does work that's going to take time. We're going to be disciplined when it comes up, deploying our capital. But over time, we're hopeful that that will become a more meaningful piece of the overall Graco equation.

嗯，這些細分市場的有機成長不會與 Graco 的有機成長有太大不同，半導體領域的波動性會更大一些，你會在每個季度看到。但同樣，目前的趨勢非常有利。你知道，我無法回答的真正問題是無機方面。再次希望團隊能夠完成需要時間的工作。當它出現時，我們將遵守紀律，部署我們的資本。但隨著時間的推移，我們希望這將成為整個固瑞克方程式中更有意義的一部分。

Okay, great. And as you've gone through this process, could there be divestitures that shake out from it? Are you feeling pretty good about all the P & L that are with your business?

好的，太好了。當你經歷了這個過程時，是否會出現資產剝離的情況？您對您的業務的所有損益感覺良好嗎？

We like what we got, but obviously, our team will be looking at all different opportunities and what makes sense. And right now, there's and there's no obvious things that we think we need to get rid of.

我們喜歡我們所得到的，但顯然，我們的團隊將尋找所有不同的機會和有意義的東西。現在，我們認為沒有任何明顯的東西需要擺脫。

Okay. Thanks You.

好的。感謝您。

Thank you. If there are no further questions, I will turn the conference over to Mark Sheahan.

謝謝。如果沒有其他問題，我將把會議轉交給馬克·希恩。

All right. Well, that wraps it up for today. Appreciate everybody dialing in this morning and look forward to seeing you here in Q4 and during next quarter's call.

好的。好了，今天的內容就到此為止了。感謝今天早上撥通電話的每個人，並期待在第四季度和下一季的電話會議中見到您。

Thank you all for participating and have a nice day. All parties may now disconnect.

感謝大家的參與並祝您有美好的一天。所有各方現在都可以斷開連接。