Graco Inc (GGG) 2025 Q2 法說會逐字稿

Good morning, and welcome to the second quarter conference call for Graco Inc. If you wish to access the replay for this call, you may do so by visiting the company 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 questions and answers after the opening remarks from management.

早上好，歡迎參加 Graco 公司第二季電話會議。如果您想觀看本次電話會議的重播，請造訪公司網站 www.graco.com。 Graco 的 PowerPoint 幻燈片簡報中提供了更多信息，可在網路直播播放器中下載。應公司的要求，我們將在管理層致開幕詞後開放會議問答環節。

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 purposes of the safe harbor provisions of the Private Securities Litigation Reform Act. Actual results may differ materially from those indicated as a result of various risk factors, including those identified in Item 1A of the company's 2024 Annual Report on Form 10-K and in Item 1A of the company's most recent 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 obligation to update these statements in light of new information or future events.

在這次電話會議中，管理層可能會對未來的期望、計劃和前景發表各種評論。這些言論構成《私人證券訴訟改革法案》安全港條款所指的前瞻性聲明。由於各種風險因素，實際結果可能與所示的結果有重大差異，包括公司 2024 年 10-K 表年度報告第 1A 項和公司最新 10-Q 表季度報告第 1A 項中確定的風險因素。這些報告可在公司網站 www.graco.com 和美國證券交易委員會網站 www.sec.gov 上查閱。前瞻性陳述反映管理階層目前的觀點，且僅代表截至陳述時的觀點。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。

I will now turn the conference over to Chris Knutson, Vice President, Controller and Chief Accounting Officer.

現在，我將會議交給副總裁、財務主管兼首席會計官 Chris 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.

大家早安，感謝你們參加我們的電話會議。今天我和馬克希漢 (Mark Sheahan) 和大衛洛 (David Lowe) 一起來到這裡。我將簡要概述我們的季度業績，然後將電話轉給馬克以獲得更多評論。

Yesterday, Graco reported second quarter sales of $572 million, an increase of 3% from the second quarter of last year. Excluding acquisitions, which contributed 6% growth, sales declined 3%. Currency translation had no effect in the quarter.

昨日，Graco 公佈第二季銷售額為 5.72 億美元，較去年第二季成長 3%。不計收購貢獻了 6% 的成長，銷售額下降了 3%。貨幣換算對本季沒有影響。

Reported net earnings decreased 4% to $128 million or $0.76 per diluted share. Excluding the impact of excess tax benefits from stock option exercises, adjusted non-GAAP net earnings were $127 million or $0.75 per diluted share, a decrease of 3%.

報告淨收益下降 4% 至 1.28 億美元或每股 0.76 美元。不包括股票選擇權行使的超額稅收優惠的影響，調整後的非公認會計準則淨利潤為 1.27 億美元，即每股攤薄收益 0.75 美元，下降 3%。

The gross margin rate decreased 200 basis points in the quarter. The impact of acquisitions accounted for nearly 80 basis points of the decline, which will continue for the remainder of the year. In addition, tariffs increased $4 million in the quarter, resulting in an additional 80 basis point decline. Price realization was not enough to offset higher product costs resulting from lower factory volume, tariffs, and unfavorable channel and product mix in the quarter.

本季毛利率下降了200個基點。收購的影響佔了下降的近80個基點，而這種影響將在今年剩餘時間內持續下去。此外，本季關稅增加了 400 萬美元，導致額外下降 80 個基點。價格實現不足以抵消本季工廠產量下降、關稅以及通路和產品組合不利導致的產品成本上升。

Operating expenses increased 2% in the quarter, driven by incremental expenses from acquisitions of $9 million or 7%. Excluding expenses of acquired operations, operating expenses declined $7 million or 5% on savings from the One Graco initiative, lower sales and earnings-based incentives, and timing of stock-based compensation expense.

本季營運費用成長 2%，主要由於收購費用增加 900 萬美元（成長 7%）。不計入收購業務的費用，由於「一個 Graco」計劃帶來的節省、較低的銷售額和基於收益的激勵措施以及股票薪酬費用的時間安排，營運費用下降了 700 萬美元或 5%。

Operating earnings decreased $4 million or 2% during the quarter due to decreased factory volume and the effect of tariffs. Operating earnings as a percent of sales were 28% for the quarter or 1 percentage point lower than the same period last year.

由於工廠產量下降和關稅的影響，本季營業收入減少 400 萬美元，即 2%。本季營業利潤佔銷售額的百分比為 28%，比去年同期下降 1 個百分點。

Contractor segment operating margin rate for the quarter was 26% compared to 31% for the same quarter last year, a decline of 5 percentage points. The acquisition of COROB decreased the contractor operating margin rate by 2 percentage points, with the remaining decline due primarily to higher tariffs and lower factory volume.

本季承包商部門營業利潤率為 26%，而去年同期為 31%，下降了 5 個百分點。收購 COROB 使承包商的營業利潤率下降了 2 個百分點，其餘下降主要歸因於關稅提高和工廠產量下降。

Interest and other decreased $3 million in the quarter. The volatility of the US dollar, especially against European currencies, resulted in exchange losses on net liabilities of certain foreign operations of approximately $5 million for the quarter, which we don't expect to continue. The adjusted effective tax rate was 20%, which is consistent with our expected full year tax rate of approximately 19.5% to 20.5% on an as-adjusted basis.

本季利息和其他費用減少了 300 萬美元。美元的波動，尤其是對歐洲貨幣的波動，導致本季某些海外業務的淨負債出現約 500 萬美元的匯兌損失，我們預計這種情況不會持續下去。調整後的有效稅率為 20%，與我們預期的全年稅率（調整後）約 19.5% 至 20.5% 一致。

Cash provided by operations totaled $308 million for the year, an increase of $50 million or 19%. Improved inventory management from consolidating operations under One Graco and lower sales and earnings-based incentive payments drove the increase.

全年經營活動提供的現金總額為 3.08 億美元，增加 5,000 萬美元，即 19%。透過整合One Graco旗下的業務，庫存管理得到改善，銷售額和基於收益的獎勵金減少，推動了成長。

Cash flow from operations less capital expenditures increased $93 million or 51% for the year-to-date. Cash provided by operations as a percentage of adjusted net earnings was 144% for the quarter and 125% for the year-to-date.

今年迄今為止，經營活動現金流減去資本支出增加了 9,300 萬美元，增幅為 51%。本季經營活動提供的現金佔調整後淨收益的百分比為 144%，年初至今為 125%。

Significant year-to-date uses of cash include share repurchases of 4.4 million shares totaling $361 million, dividends of $92 million, and capital expenditures of $30 million. These cash uses were offset by share issuances of $25 million.

今年迄今的重大現金用途包括回購 440 萬股，總額 3.61 億美元、派發股息 9,200 萬美元以及資本支出 3,000 萬美元。這些現金用途被 2,500 萬美元的股票發行所抵銷。

A few comments as we look forward to the rest of the year. Based on current exchange rates, assuming the same volumes, mix of products, and mix of business by currency as in 2024, movement in foreign currencies would have a 1% favorable impact on net sales and no impact on net earnings for the full year. Unallocated corporate expenses are projected to be $37 million to $40 million for the full year. And finally, we expect capital expenditures to be approximately $60 million to $70 million in 2025.

展望今年剩餘的時間，我們想發表一些評論。根據當前匯率，假設交易量、產品組合和按貨幣劃分的業務組合與 2024 年相同，外幣變動將對淨銷售額產生 1% 的有利影響，而不會對全年淨收益產生影響。預計全年未分配的公司支出為 3,700 萬至 4,000 萬美元。最後，我們預計 2025 年的資本支出約為 6,000 萬至 7,000 萬美元。

I'll now turn the call over to Mark for further segment and regional commentary.

現在我將把電話轉給馬克，讓他發表進一步的專題和地區評論。

Thank you, Chris. Good morning, everyone. All my comments will be on an organic constant currency basis.

謝謝你，克里斯。大家早安。我的所有評論都將以有機恆定貨幣為基礎。

Overall sales were up 3% in the second quarter, including a 6% contribution from COROB, offsetting an organic revenue decline of 3%. Contractor accounted for more than 80% of the organic revenue decline in the quarter, with the Americas being especially weak when compared to last year's strong second quarter. EMEA and Asia Pacific grew in all segments, including the semiconductor market, and in China, which were depressed for most of last year.

第二季整體銷售額成長 3%，其中 COROB 貢獻了 6%，抵消了有機收入 3% 的下降。承包商佔本季有機收入下降的 80% 以上，與去年第二季的強勁表現相比，美洲地區的表現尤其疲軟。歐洲、中東和非洲地區以及亞太地區的所有領域均實現了成長，包括半導體市場，而中國市場在去年大部分時間都處於低迷狀態。

The current trade environment is still uncertain, causing many end-users to delay project decisions and take a wait-and-see approach until trade negotiations and the tariff landscape is clear. During the quarter, incremental costs related to tariffs were about $4 million, affecting EPS by $0.02.

當前的貿易環境仍然不確定，導致許多最終用戶推遲專案決策並採取觀望態度，直到貿易談判和關稅格局明朗為止。本季度，與關稅相關的增量成本約為 400 萬美元，影響每股收益 0.02 美元。

To offset the impact from tariffs, we have announced targeted price increases beginning in September. These pricing actions are focused on key markets and geographies most impacted by tariffs and are in addition to our normal beginning of the year price increases. We expect that these pricing adjustments along with our mitigation efforts of product redesign and secondary vendor sourcing will offset most of the full year impact from tariffs as they exist today.

為了抵消關稅的影響，我們宣布從 9 月開始有針對性地提高價格。這些定價行動主要針對受關稅影響最大的關鍵市場和地區，也是我們年初正常漲價的補充。我們預計，這些價格調整以及我們在產品重新設計和二級供應商採購方面的緩解措施將抵消目前關稅對全年的大部分影響。

Incoming order activity remained steady during the quarter compared to the full year and consistent with billing activity as backlogs are still at normal levels across all segments. The past six weeks, rates have also been consistent with the full year run rate.

與全年相比，本季的訂單活動保持穩定，並且與帳單活動一致，因為所有部門的積壓訂單仍處於正常水平。過去六週，利率也與全年利率一致。

The home center DIY channel has been our biggest challenge in the first half of the year, down low double digits. However, the current six-week run rate has stabilized and exceeds the run rate of the second half of last year.

家居中心DIY通路是我們上半年面臨的最大挑戰，銷售額下降了兩位數。不過，目前六週的運行率已經穩定下來，並且超過了去年下半年的運行率。

Now turning to some commentary on our segments and regions. Contractor segment sales declined 5% in the quarter. North America was soft in core markets as contractors delayed new investments due to ongoing housing affordability issues and a smaller project pipeline. The home center channel struggled from reduced foot traffic and reduced DIY demand in the Americas versus last year's second quarter and year-to-date -- than year-end results -- year-to-date results. This quarter was the most challenging comparable for Contractor as the second quarter of 2024 had channel fill related to significant new product launches resulting from delays which we discussed last year. We are expecting a stronger second half with easier comparisons, the effect of our pricing actions, and our upcoming new product releases.

現在來談談對我們的細分市場和地區的一些評論。承包商部門銷售額本季下降了 5%。由於持續存在的住房負擔能力問題以及專案儲備規模較小，承包商推遲了新投資，因此北美核心市場表現疲軟。與去年第二季和今年迄今的業績相比，家居中心通路因美洲客流量減少和 DIY 需求下降而陷入困境——與年終業績相比——與今年迄今的業績相比。本季度對承包商來說是最具挑戰性的季度，因為 2024 年第二季度的通路填充與重大新產品發布有關，而這些新產品的發布是由於我們去年討論過的延遲。我們預計下半年業績會更加強勁，比較起來會更加容易，我們的定價行動會產生影響，而且我們即將發布新產品。

The Industrial segment declined 1%, with growth in EMEA and Asia Pacific not enough to offset a decline in the Americas. Powder finishing systems sales were strong with increased quoting activity and improved performance in the Americas and Asia Pacific regions. This increase was not enough to offset -- to fully offset declines in the other Industrial product categories in the Americas.

工業部門下降了 1%，歐洲、中東和非洲地區以及亞太地區的成長不足以抵消美洲地區的下降。粉末塗裝系統銷售強勁，美洲和亞太地區的報價活動增加，業績改善。這一增長不足以完全抵消美洲其他工業產品類別的下滑。

In several markets, end-users are cautious and waiting to see the result of ongoing trade negotiations. Quoting activity worldwide is still strong, but we expect end-user caution will continue until greater clarity exists in the global trade environment.

在多個市場，最終用戶都持謹慎態度，等待正在進行的交易談判的結果。全球範圍內的報價活動依然強勁，但我們預計最終用戶的謹慎態度將持續下去，直到全球貿易環境變得更加明朗。

Last week, we announced the acquisition of Color Service, a global manufacturer of specialized automatic precision dosing systems for powders and liquids. Known for their expertise in gravimetric dosing technology, the company delivers precise weight-based material measurements that improve consistency and efficiency in production across various industries, including textiles, rubber, cosmetics, plastics, and food. Headquartered in Italy, Color Service employs approximately 140 people worldwide and an annual revenue of EUR34 million in 2024. We expect the transaction to close in the third quarter, and the business will be part of our Gema Powder Division, which is part of the Industrial segment.

上週，我們宣布收購 Color Service，一家專門生產粉末和液體自動精密配料系統的全球製造商。該公司以其在重量計量技術方面的專業知識而聞名，提供精確的基於重量的材料測量，可提高紡織品、橡膠、化妝品、塑膠和食品等各個行業的生產一致性和效率。Color Service 總部位於義大利，在全球擁有約 140 名員工，2024 年年收入為 3,400 萬歐元。我們預計該交易將於第三季完成，該業務將成為我們工業部門下屬的金馬粉體部門的一部分。

Expansion Markets were down 3% for the second quarter as the positive momentum in the semiconductor market, which we started seeing at the end of last year, continued in the quarter. However, this was offset by a decline in the environmental business.

擴張市場在第二季度下降了 3%，因為我們從去年年底開始看到的半導體市場的積極勢頭在本季度得以延續。然而，這被環境業務的下滑所抵消。

Moving on to our outlook. Despite headwinds from uncertain global trade environment and the soft North American construction market, which led to our organic revenue decline in the quarter, on a full year basis, our organic revenue was flat. Our consistent incoming order rates, combined with pricing actions and an easier comparable in the Contractor, gives us confidence as we enter the back half of the year. Accordingly, we are keeping our 2025 revenue guidance of low single-digit sales on an organic constant currency basis.

繼續我們的展望。儘管全球貿易環境不確定以及北美建築市場疲軟導致我們本季的有機收入下降，但從全年來看，我們的有機收入持平。我們穩定的訂單量，加上定價行動以及承包商更容易的可比性，讓我們在進入下半年時充滿信心。因此，我們維持 2025 年收入預期，即以有機固定匯率計算的低個位數銷售額。

That concludes our prepared remarks. Shannon, we're ready for questions.

我們的準備好的演講到此結束。香農，我們準備好回答問題了。

(Operator Instructions) Deane Dray, RBC Capital Markets.

（操作員指示） Deane Dray，RBC 資本市場。

Can we start with the price increase announcement? And this is far from being as seismic as it was back in 2022 when you did the first time ever intra-year price increase, and this one seems certainly warranted given the tariff pressures. Can you just -- how is this price increase different? Can you size it? And anything about the implementation? And is this all price? Any surcharges? And any color there would be great.

我們可以從漲價公告開始嗎？這與 2022 年首次年內漲價時相比，影響遠不及，而且考慮到關稅壓力，這次提價似乎是合理的。你能不能──這次漲價有什麼不同？你能確定尺寸嗎？還有什麼實施的情況嗎？這就是全部的價格嗎？有附加費嗎？任何顏色都很棒。

Yes. Great. Thanks for the question. I think when we spoke last, we said we wanted to be patient when it came to what we wanted to do with respect to the tariffs. And as things played out, I think that patience was smart, because the overall impact got less and less as facts came out and things got clarified.

是的。偉大的。謝謝你的提問。我想，我們上次談話時說過，在處理關稅問題時，我們希望保持耐心。隨著事情的發展，我認為耐心是明智的，因為隨著事實的浮出水面和事情的澄清，整體影響越來越小。

So nonetheless, we did start to see some of the impact hitting us, and we were also watching what was happening in the end-markets that we participate in and seeing what's happening with a number of the competitors who are also raising prices. So that gave us the opportunity and the confidence to know that we could also do the same thing.

儘管如此，我們確實開始看到一些影響對我們產生的影響，我們也在關注我們所參與的終端市場發生的情況，並觀察一些競爭對手也在提高價格的情況。這給了我們機會和信心，讓我們知道我們也可以做同樣的事情。

We are not doing anything other than trying to offset the pressure that we've got in our P&L. I'd characterize the increases as targeted and targeted at the geographies and the areas where we're seeing the most input cost pain. And also, I'd characterize them as sort of low single-digit type increases in a few select areas within the business that will offset the tariff pressure that we see for the rest of the year, provided that the landscape stays the way that it is.

除了試圖抵消損益表中的壓力之外，我們沒有做任何其他事情。我認為這些增長是有針對性的，並且針對的是我們看到投入成本損失最大的地區和區域。此外，我認為，在業務的幾個特定領域，這些成長將是一種低個位數成長，如果情況維持現狀，這將抵消我們在今年剩餘時間看到的關稅壓力。

That's really helpful. And then for David, free cash flow was one of the bright spots in the quarter just in terms of conversion. Was there anything -- any one-timers in there at all? Or just what do you attribute the strength of the conversion this quarter?

這真的很有幫助。對大衛來說，就轉換而言，自由現金流是本季的亮點之一。那裡面有什麼東西──任何一次性的東西嗎？或者您認為本季轉換的力道是什麼？

Well, thank you. We called that out because we thought it was a pretty solid sign as to the cash generation capacity of the company. So thanks for asking the question.

好的，謝謝你。我們之所以指出這一點，是因為我們認為這是該公司現金創造能力的相當可靠的訊號。感謝您提出這個問題。

I would say our attention to inventory continues to contribute to what you really started to see last year with a focus on improving turns, which are less than world-class in the industrial sphere, and it was another good quarter there. And of course, certain aspects of our One Graco initiative contributes a greater efficiency, a focus on expanding centers of excellence, which will make our manufacturing operation over time more efficient. Also in small steps are helping our cash conversion.

我想說，我們對庫存的關注繼續促成了你去年真正開始看到的結果，重點是提高週轉率，這在工業領域並不屬於世界一流水平，而且這又是一個好季度。當然，我們的「一個 Graco」計畫的某些方面有助於提高效率，專注於擴大卓越中心，這將使我們的製造營運隨著時間的推移更加高效。我們也採取了一些小措施來幫助我們的現金轉換。

So I'd like to think that what we saw here is not one time. Of course, our business does have a seasonal component, the Contractor side of it. So we haven't done anything about that. But we feel very good about the future cash generation capacity of the company.

所以我想我們在這裡看到的並不是一次性的事情。當然，我們的業務確實有季節性成分，即承包商方面。所以我們對此沒有採取任何措施。但我們對公司未來的現金創造能力非常有信心。

That's great. Just to clarify, when you say better progress in inventory, what's interesting this quarter, we've seen a number of companies actually adding inventory either through a prebuy or some buffer inventory to kind of smooth out with all the tariff noise. But you're actually making progress in reducing inventory?

那太棒了。需要澄清的是，當您說庫存進展更好時，本季有趣的是，我們看到許多公司實際上透過預購或一些緩衝庫存來增加庫存，以消除所有關稅噪音。但你們在減少庫存方面確實取得了進展嗎？

Yes. I mean, we took -- I mean, again, there are some things that we absolutely need to have, and we've been aggressive where we needed to be aggressive on the sourcing side. But overall, to some degree, we sort of significantly expanded the raw material that we were carrying from the whole sourcing escapade of a couple of years ago. And for the most part, we've been comfortable working that down to what would probably you would say is more normalized levels because we've got more confidence in our supply chain.

是的。我的意思是，我們採取了——我的意思是，再說一次，有些東西我們絕對需要擁有，而且我們在採購方面一直很積極，我們需要積極主動。但整體而言，從某種程度上來說，我們大大擴展了幾年前整個採購過程中所攜帶的原料。在大多數情況下，我們可以輕鬆地將其降低到您可能認為更正常的水平，因為我們對我們的供應鏈更有信心。

Mike Halloran, Baird.

麥克·哈洛倫，貝爾德。

This is [Paz] on for Mike. I wanted to follow up on the Color Service acquisition. Could you maybe tell us a little bit about how the acquisition came about? You mentioned in the press release that it opened up new opportunities. Can you maybe discuss the opportunity and how you see it fitting into the portfolio with a little more color, please?

我是 [Paz]，為 Mike 服務。我想跟進 Color Service 收購事宜。您能否向我們簡單介紹一下此次收購的緣由？您在新聞稿中提到，它開闢了新的機會。您能否更詳細地討論一下這個機會以及您認為它如何融入投資組合？

Yes, Paz. Thanks for the question. So actually, a few years ago when we started to think more about external growth in addition to our organic initiatives, we really challenged our teams to take a look not only at their existing portfolios, but other adjacent technologies that might be interesting to them.

是的，帕茲。謝謝你的提問。因此，實際上，幾年前，當我們除了考慮內部發展計劃之外，還開始更多地考慮外部增長時，我們確實要求我們的團隊不僅要關注他們現有的產品組合，還要關注他們可能感興趣的其他相鄰技術。

And our Powder team, led by Claudio Merengo at the Gema group, they really did a nice job of looking at some opportunities that aren't necessarily powder paint but technologies that they understand. And they really surface this area as a potential target area for us. So that led to some discussions with the ownership and ultimately resulted in the acquisition.

我們的粉末團隊由 Gema 集團的 Claudio Merengo 領導，他們確實很好地發現了一些機會，這些機會不一定是粉末塗料，而是他們了解的技術。他們確實將這個區域列為我們的潛在目標區域。因此，這引發了與所有權的一些討論，並最終促成了收購。

What we like about it is the growth rates have been pretty good, this business, maybe slightly better than what we've seen in the legacy Graco businesses, at least over the last five years. It's technology that we understand. It's dosing, it's measuring. It's gravimetric measuring, which we understand and we know about.

我們喜歡它的原因是它的成長率相當不錯，這項業務可能比我們在過去五年中看到的傳統 Graco 業務略好一些。這是我們了解的技術。這是劑量，這是測量。這是重量測量，我們了解並且知道它。

The location is good for us because it's closely located to our SAT business in Italy. And the leadership team of SAT will actually be working very closely with Color Services' leadership team to make sure that we capitalize on any integration possibilities, opportunities to help them with operations, production, be more efficient. So it was really a combination of a lot of different things that caused us to get excited about this.

這個位置對我們來說很有利，因為它靠近我們在義大利的 SAT 業務。SAT 的領導團隊實際上將與 Color Services 的領導團隊密切合作，以確保我們利用任何整合的可能性和機會來幫助他們提高營運和生產效率。所以，這其實是很多不同因素的結合，讓我們對此感到興奮。

They have some big customers, too, which is nice. They're involved with all the tire manufacturers, they get involved in the textile industry, cosmetics. So it does broaden out our portfolio a little bit beyond what we have seen in the past.

他們也有一些大客戶，這很好。他們與所有輪胎製造商都有業務往來，也涉足紡織業和化妝品業。因此，它確實擴大了我們的投資組合，使其比過去有所突破。

Great. No, that's helpful. And then if we switch gears a little bit, if we look at your core kind of construction markets, what are you looking for to feel like your customers are gaining more confidence, particularly in the DIY and home center area where maybe US consumers have been a little bit stressed and housing market has been tight? At this point, what do you think is the green shoot that is necessary to get some of these projects moving?

偉大的。不，這很有幫助。然後，如果我們稍微轉換一下主題，看看您的核心建築市場，您希望透過什麼讓您的客戶獲得更多的信心，特別是在 DIY 和家居中心領域，美國消費者可能已經感到有點壓力，而房地產市場也一直很緊張？目前，您認為推動這些項目向前發展的必要條件是什麼？

Well, it's got to be affordability, right? Obviously, a rate reduction would help quite a bit as long as the prices don't go up when the rates go down. Unfortunately, when the rates went up, the prices really didn't go down as you would have expected them. So affordability is still the biggest challenge I see in the new construction market that we have. And that impacts activity. Obviously, it also impacts our spray foam business to a certain extent because a lot of the new builds are using that technology in there.

嗯，它必須是可以承受的，對吧？顯然，只要利率下降時價格不上漲，降低利率就會有很大幫助。不幸的是，當利率上漲時，價格並沒有像你預期的那樣下降。因此，我認為負擔能力仍然是我們新建築市場面臨的最大挑戰。這會影響活動。顯然，這也在一定程度上影響了我們的噴塗泡沫業務，因為許多新建築都使用了該技術。

So I think any major shift in affordability would be very much appreciative. I know it's on the radar. We've read a lot of different reports and we've been listening to some of the commentary coming out of Washington. So I think that they know that this is an issue. There are still a number of people that are locked in at low mortgage rates and they just can't move even though they would like to move. So if you look at the number of homes being sold this year and last year, it's extremely low compared to what you would expect in a normal economic environment in a country the size of the United States. So there's quite a bit of pent-up demand, I would say, that is yet to be unleashed, hopefully, once the affordability gets a little bit in better shape.

因此我認為，負擔能力的任何重大轉變都將受到高度讚賞。我知道它在雷達上。我們閱讀了很多不同的報道，也聽取了一些來自華盛頓的評論。所以我認為他們知道這是一個問題。仍有許多人被低抵押貸款利率困住，儘管他們想搬家，但就是搬不出去。因此，如果你看看今年和去年售出的房屋數量，你會發現與美國這樣大小的國家在正常經濟環境下的預期相比，這個數量極低。因此，我想說，有相當多被壓抑的需求尚未被釋放，希望一旦負擔能力稍微好轉，這些需求就會被釋放。

Saree Boroditsky, Jefferies.

薩裡‧博羅迪茨基 (Saree Boroditsky)，傑弗里斯 (Jefferies)。

Maybe just first, building on the price increase. I believe the last time you did a midyear price increase, you took less price in the following year. So would you think about something similar as you think about 2026? And then do you take any more pricing on the Industrial side versus Contractor given the more consumer focus?

也許只是先提高價格。我相信，上次你們在年中漲價後，第二年的價格就會降低。那麼，當您思考 2026 年時，您會考慮類似的事情嗎？那麼，考慮到更多地關註消費者，您是否會對工業方面和承包商方面採取更多的定價？

Yes. I think that we would expect that we'll have a normal price increase at the beginning of next year, to answer the first question.

是的。我認為我們預計明年年初價格將正常上漲，這是回答第一個問題。

And in terms of where we targeted, how we targeted, both groups participated in the price increase at different levels both Contractor and Industrial, and Expansion Markets, I should add. This was something that we did across all of our business units.

就我們的目標市場和目標方式而言，我應該補充的是，兩個群體都參與了不同層次的價格上漲，包括承包商、工業和擴張市場。這是我們所有業務部門都會做的事情。

And then maybe going on about the uncertainty that you're seeing, but some of the other markets, could you provide some more detail on what you're seeing from customer spending by end-market in the Industrial segment? And do you expect any changes from some of the incentives with the One Big Beautiful Bill?

然後也許您可以繼續談論您所看到的不確定性，但是對於其他一些市場，您能否提供一些有關工業領域終端市場客戶支出的更多細節？您是否預期《一項偉大的美麗法案》中的一些激勵措施會有什麼改變？

I think the latter question is, big picture, long-term clarity on tax rates, favorable treatment on investments and related things in manufacturing, will, over time, be a real positive for Graco. Reshoring, onshoring, relocation is good for our business.

我認為後一個問題是，從總體來看，長期明確的稅率、對投資和製造業相關事項的優惠待遇，隨著時間的推移，將對 Graco 產生真正的積極影響。回流、在岸生產和遷移對我們的業務有利。

I would say that if you're -- the first part of your question, we could talk at length, but just to give you a flavor that our teams -- I'll touch on a couple of specific markets. But pipelines are good, quotations active. Some end-users are more willing to pull the trigger when there is this cloud of uncertainty, that Mark talked about, than others.

我想說的是，如果你——你的問題的第一部分，我們可以詳細談談，但只是為了讓你了解我們的團隊——我將談論幾個特定的市場。但管道狀況良好，報價活躍。正如馬克所說，當存在不確定性時，一些最終用戶比其他用戶更願意採取行動。

If I had to generalize on a global basis, I mean, certainly markets that at the moment have some positive momentum and then some that are a little bit softer. The automotive OEM market is positive, especially the area around EV where battery activity has improved, at least recently. They tend to be large orders, so the business is lumpy.

如果我必須從全球範圍來概括的話，我的意思是，目前肯定有一些市場具有一些積極的勢頭，而有些市場則稍微疲軟一些。汽車 OEM 市場表現積極，尤其是電動車領域，至少最近電池活動有所改善。這些訂單往往是大訂單，因此業務不穩定。

Also, the automotive component supplier market is strong, especially in the Asia Pacific market. Our vehicle service business, the dealer lubrication business, has been strong. And Mark touched on the strength of powder equipment. That shows up in the architectural profile market, agricultural equipment and also other automotive components. So we see markets being active and people pulling the pin.

此外，汽車零件供應商市場強勁，尤其是亞太市場。我們的汽車服務業務、經銷商潤滑業務一直表現強勁。馬克談到了粉末設備的強度。這體現在建築型材市場、農業設備以及其他汽車零件市場。因此，我們看到市場活躍，人們開始採取行動。

I would say the slower areas, reflecting what we know about the business, there are regional differences. But solar here in North America is quite soft. The transportation market, especially the truck OEMs really have been significantly slower than we have seen. Mining, which affects our lubrication product line, we've seen a slowdown with the large customers that sell equipment to the big mines. Aerospace has sort of entered a soft patch. And no surprise, in light of the Contractor discussion we had, markets like window and door and wood products are soft.

我想說的是，較慢的地區反映了我們對業務的了解，存在著地區差異。但北美的太陽能相當弱。運輸市場，尤其是卡車原始設備製造商的發展確實比我們所看到的要慢得多。採礦業影響了我們的潤滑產品線，我們發現向大型礦場銷售設備的大客戶的業務有所放緩。航空航太業已進入疲軟期。毫不奇怪，根據我們與承包商的討論，門窗和木製品等市場表現疲軟。

So I would just say that, with all that good color that David provided, you got some ups, you got some downs. But in net-net terms, it's a pretty flat environment, and there's still a lot of caution out there amongst our end-users that wanting a little bit more clarity around what the trade landscape is going to look like. And I think once that gets cleaned up, there is a potential that there's some projects that get released and there's some pent-up demand in the pipeline, is what our teams are telling us.

所以我只想說，大衛提供了這麼多精彩的色彩，有起有落。但從淨值來看，這是一個相當平穩的環境，我們的最終用戶仍然有很多謹慎情緒，他們希望更清楚地了解貿易格局將會是什麼樣子。我認為，一旦這些問題得到解決，就有可能有一些項目被發布，並且一些被壓抑的需求正在醞釀中，這就是我們的團隊告訴我們的。

Jeff Hammond, KeyBanc Capital Markets.

KeyBanc 資本市場公司的 Jeff Hammond。

Just on the guide, holding the low single-digit growth, you were kind of flat in the first half. I'm just wondering what informs kind of the better second half. Is it comps? Is it this next bite of the apple on price? Is it order trends getting better? Just what gives you confidence you see the uptick?

根據指導，維持較低的個位數成長，上半年基本上持平。我只是想知道什麼能預示下半場會更好。是 comps 嗎？這是價格上的下一個利好嗎？訂單趨勢是否變得更好？是什麼讓您有信心看到上漲？

Yes, I think it's all those things. I think we probably said some of them, or at least I did in my script. But we do have the price that will kick in, in September, that will be helpful. When we look at the run rates, they've been fairly consistent for a short-cycle business. You always get some volatility that pops in and out. But generally speaking, we feel pretty good about the incoming order rates. And then comparing those to what we saw in the back half of last year, that's how we really got to the numbers that we are comfortable with.

是的，我認為是所有這些。我想我們可能說過其中一些，或者至少我在我的劇本中說過。但我們確實有一個將於九月生效的價格，這將會很有幫助。當我們查看運行率時，我們發現對於短週期業務來說，它們的運行率相當穩定。你總是會遇到一些突然出現和消失的波動。但整體來說，我們對訂單率感覺還不錯。然後將其與去年下半年看到的情況進行比較，我們才真正得到了令我們滿意的數字。

Again, do I like a low single digit? No. I mean I'd like to see a lot more. But given the fact that we're flat and we've had some of this turbulence in the first half of the year, I think that we feel reasonably confident that we can get to the guide by the end of the year.

再說了，我喜歡低個位數嗎？不。我的意思是我希望看到更多。但考慮到我們目前的狀況以及上半年遇到的一些動盪，我認為我們有信心在年底前達到預期目標。

Okay. And then along with the strong free cash flow, you guys have really stepped up buyback. Just a little more color on how you're thinking big picture about capital allocation and maybe taking a more aggressive approach both buybacks and deals here going forward.

好的。然後，隨著強勁的自由現金流，你們確實加強了回購力道。稍微詳細介紹一下您如何思考資本配置的大局，以及未來可能採取更積極的方式進行回購和交易。

Okay. Well, I think -- okay, I'll take a shot at that. I think you make a good point that it's really, with the cash flow that we have from operations, our business model is an and, not an or. And our first choice continues to be investing in the business, investing in new technology, because that's how we think in these business-to-business niche markets that we participate in, that's how you win.

好的。嗯，我想——好的，我會嘗試看看。我認為你說得對，實際上，從我們運營中獲得的現金流來看，我們的商業模式是一個“和”，而不是“或”。我們的首選仍然是投資業務、投資新技術，因為我們認為，在我們所參與的這些 B2B 利基市場中，這就是取勝之道。

We've been -- we like our operations. We invest aggressively in state-of-the-art automation, machine tools and such. And we, in my 30 years here, that's not an aspect of our business model that we have ever stinted on.

我們一直——我們喜歡我們的營運。我們積極投資最先進的自動化、工具機等。在我在這裡工作的 30 年裡，我們從來沒有吝惜過這方面的商業模式。

As far as transactions, M&A goes, I think the last year has been instructive, that we started the process three years ago, a disciplined process, step-by-step, sometimes slow to get off the ground, but over the last nine months, we've committed to well over $300 million to deals. And as you know, we have the dry powder to do more. And there continue to be transactions in the works that we are excited about.

就交易和併購而言，我認為去年是很有啟發性的，我們三年前就開始了這個過程，這是一個有紀律的過程，一步一步來，有時進展緩慢，但在過去的九個月裡，我們已經承諾在交易中投入超過 3 億美元。正如你們所知，我們有足夠的實力做更多的事情。我們對於正在進行的交易感到興奮。

And yes, we talk about our stock repurchase activity as being opportunistic. That's the approach that we've taken over the long, long cycle, and we think it's been successful, and we put over $360 million to work.

是的，我們將股票回購活動視為機會主義行為。這是我們長期以來採取的方法，我們認為它是成功的，我們為此投入了超過 3.6 億美元。

I think that what will determine the future level of that activity is what we see in the market. We really do like buying when the market is less enchanted with the prospect of companies that serve cyclical markets. And from '08, '09 to 2015 to 2020 to 2022, we've stepped up when we've had that opportunity.

我認為，市場表現將決定未來該活動的水平。當市場對服務週期性市場的公司的前景不那麼著迷時，我們確實喜歡買入。從 2008 年、2009 年到 2015 年、2020 年、2022 年，只要有機會，我們就會加緊努力。

Brad Hewitt, Wolfe Research.

布拉德休伊特（Brad Hewitt），沃爾夫研究公司。

So one of your significant customers and contractors pointed to an outlook for a low single-digit decline in paint stores volume in 2025. I know it's not entirely apples-to-apples, but curious how that compares to your contractor market volume expectations for the year. And how much visibility do you have to return to positive organic growth in Contractor in the second half of the year?

因此，您的一位重要客戶和承包商指出，2025 年油漆店銷售將出現個位數的低幅下降。我知道這並不完全是同類的，但我很好奇這與您對今年承包商市場銷售的預期相比如何。您對承包商下半年恢復正有機成長有多大的把握？

Yes, I'd have to probably peel the onion back a little bit to give you a good answer to the first question, not having all the details in front of me. But what we did with our business is we really tried to look at it globally and holistically, and we looked at the different product categories. And Pro Paint is one of them, but we also have a DIY base. We also have a spray foam product line. We have protective coatings equipment.

是的，我可能必須稍微剝開一點洋蔥才能給你第一個問題的一個很好的答案，因為我面前沒有所有的細節。但我們對待業務的方式是真正嘗試從全局和整體的角度看待它，並研究不同的產品類別。Pro Paint 就是其中之一，但我們也有 DIY 基礎。我們還有噴塗泡沫產品線。我們有保護塗層設備。

And these are global businesses. So looking at the order rates and looking at the activity in the end-users in the markets, we put our forecast together for the remainder of the year. Also knowing that the back half of our year last year wasn't robust, so we may have had an easier comparison than the company that you're referencing.

這些都是全球性企業。因此，透過查看訂單率和市場中最終用戶的活動，我們對今年剩餘時間做出了預測。另外，由於我們去年下半年的業績並不強勁，因此與您所提到的公司相比，我們可能更容易進行比較。

For us, targeting and projecting and predicting the future is always a big challenge given the short-cycle nature of our business. But the markets are -- they're not in bad shape. There's still activity out there. Painters are still buying equipment. Equipment breaks all the time. There's decent activity, it's just not robust activity.

對我們來說，鑑於我們業務的短週期性質，瞄準、規劃和預測未來始終是一個巨大的挑戰。但市場狀況還不算糟。那裡仍有活動。畫家們仍在購買設備。設備時常發生故障。活動還不錯，但不夠活躍。

And I think the earlier question that I got on what we're looking for in terms of a green shoot, it's really, once the affordability gets a little bit better, there will be more project activity, more people are going to be moving out of their homes into new homes, that creates a lot of remodeling activity. It's really trying to pinpoint exactly when that's going to happen. We're probably not the best at being able to do that. But all in all, I mean, we feel pretty confident in the guide that we're giving.

我認為我之前提出的關於我們在綠色發展方面所尋求什麼的問題實際上是，一旦負擔能力有所改善，就會有更多的項目活動，更多的人會從他們的家搬進新家，從而產生大量的改造活動。它實際上試圖精確地指出這件事何時會發生。我們可能並不是最擅長做到這一點的。但總而言之，我們對我們提供的指南非常有信心。

Yes. I would just add that I think that channel partner that you're talking about a couple of times described their business environment as choppy. And I think that's exactly how we would define it. They do a good job of splitting out key markets, including their consumer DIY space, which they cited as being particularly slow, also the auto refinish market and the wood products markets.

是的。我只想補充一點，我認為您幾次談到的通路夥伴都表示他們的商業環境不穩定。我認為這正是我們定義它的方式。他們很好地劃分了關鍵市場，包括他們認為特別緩慢的消費者 DIY 領域、汽車修補漆市場和木製品市場。

Where they talk about things being slow, we would tend to agree. Where they talk about seeing some pockets of strength, for example, in the protective coatings market, equipment market, in our particular space, we would also agree. It's one of the challenges when you serve as many markets as we do to try to roll it all up when, as you've seen for the first six months of the year, you're right at the water line.

當他們談論事情進展緩慢時，我們傾向於同意這一點。當他們談到看到一些優勢領域時，例如在防護塗料市場、設備市場以及我們的特定領域，我們也會同意。當你像我們一樣服務於眾多市場時，面臨的挑戰之一就是試圖將所有業務整合起來，正如你在今年前六個月看到的那樣，你正處於水線之上。

But I would agree with everything that's been said about from the current order rate all the way through to the things that we are doing in the second half of the year. And let's hope for some increasingly -- increasing clarity on trade-related uncertainty, should help us achieve our projected outlook.

但我同意關於從當前訂單率一直到我們下半年要做的事情的所有內容。讓我們希望，貿易相關不確定性的日益明朗化，能幫助我們實現預期的前景。

Okay. That's helpful. And then as it relates to the 1% to 2% revenue hedge for the year related to China, I noticed you guys took that out of the slides, but it's still in the 10-Q. Is it fair to think the base case expectation there is for closer to a 1% headwind or maybe even less given the year-to-date results and the rollback in the China tariffs?

好的。這很有幫助。然後，由於它與今年與中國相關的 1% 至 2% 的收入對沖有關，我注意到你們把它從幻燈片中刪除了，但它仍然在 10-Q 中。考慮到今年迄今的業績和中國關稅的下調，是否可以認為基本預期的逆風接近 1% 甚至更低？

I would say that for us, the China market has come back. This is Chris, by the way. And we took out the hedge as part of our outlook. I think it's still in the 10-Q as part of one of our risk factors, to let everybody know that, hey, this is kind of our exposure that we have there. But we have seen activity within the China market pick up, particularly in the Powder coating space. And despite the tariffs, we are optimistic that, coming off of a pretty low year, that we're going to have growth there.

我想說，對我們來說，中國市場已經回歸了。順便說一下，這是克里斯。我們將對沖作為我們展望的一部分。我認為它仍然是 10-Q 中的風險因素之一，以便讓每個人都知道，嘿，這是我們在那裡面臨的風險。但我們看到中國市場活動正在回暖，特別是在粉末塗料領域。儘管存在關稅，但我們仍然樂觀地認為，在經歷了相當低迷的一年之後，我們的銷售額將實現成長。

Matt Summerville, D.A. Davidson.

馬特·薩默維爾、地方檢察官戴維森。

I want to just talk a little bit more about M&A. You're talking about your second deal in the last, call it, nine months or so for you guys. Is this -- Mark, do you feel like you've finally been able to establish Graco as a company that has an M&A pipeline and funnel and team in place that you can really become more of a compounder -- of an inorganic compounder of capital? And to that point, can you maybe speak to the actionability you see looking ahead, average deal size, things like that?

我想再多談一點有關併購的事情。你們談論的是過去九個月左右你們達成的第二筆交易。這是——馬克，你是否覺得你終於能夠將 Graco 打造成一家擁有併購管道、漏斗和團隊的公司，從而能夠真正成為資本的複合者——無機複合者？至此，您能否談談您看到的未來的可操作性、平均交易規模等？

Yes. Thanks for the question, Matt. As I've been pretty transparent on this for quite a while, we really felt as a management team that we needed to create an infrastructure and an awareness that, while our organic growth is great, we have this -- we have a nice opportunity to add to that with good strategic acquisitions.

是的。謝謝你的提問，馬特。由於我在這個問題上已經相當透明了很長一段時間，我們真的覺得，作為一個管理團隊，我們需要創建一個基礎設施和意識，雖然我們的有機增長很好，但我們有這個——我們有一個很好的機會，通過良好的戰略收購來增加這一點。

And we really had to build the pipeline up from scratch. I think I've said this, if I'm repeating myself to you, I apologize. But I could have asked any of our leaders for their M&A target list when I got this job, and they would have given me on list, but there was no detail behind it. So now we've got really good pipelines with companies that we believe would be good strategic fits for Graco. We've talked to the owners. We understand why they fit. We have opportunities in terms of being able to make them better organizationally.

我們確實必須從頭開始建立管道。我想我已經說過了，如果我重複了自己的話，我深感抱歉。但當我得到這份工作時，我可以向我們的任何領導者詢問他們的併購目標清單，他們也會給我一份清單，但沒有提供任何細節。因此，現在我們已經與一些我們認為對 Graco 具有良好策略契合度的公司建立了良好的合作關係。我們已經和業主談過了。我們明白為什麼它們適合。我們有機會在組織上使他們變得更好。

And I think that with respect to what's happening in the market right now, I think that the pricing has gotten a little bit better compared to what it would have been back in '21 when I became CEO.

我認為，就目前市場的情況而言，與 2021 年我擔任執行長時相比，定價已經有所改善。

So the other thing that's happened here is we've gained some really confident people within our organization that feel like we can drive value in these businesses beyond just operational synergy value. We think that there's customers that we share in common where we can get some leverage. We also believe that our footprint, our global footprint, gives us some opportunities to maybe make some of these businesses bigger and more profitable than what they are.

因此，這裡發生的另一件事是，我們在組織內獲得了一些真正自信的人，他們覺得我們可以為這些業務帶來不僅僅是營運協同價值的價值。我們認為，我們擁有共同的客戶，我們可以從中獲得一些優勢。我們也相信，我們的足跡，我們的全球足跡，為我們提供了一些機會，也許可以讓其中一些業務變得比現在更大、更有利可圖。

And I think we've built up some real competency within the Graco organization to be able to not only identify but to integrate these acquisitions fairly seamlessly. And the owners, I think, are pleased with what they've seen at least in the short term here.

我認為，我們在 Graco 組織內部已經建立了一些真正的能力，不僅能夠識別這些收購，而且能夠相當無縫地整合這些收購。我認為，業主們對他們在這裡看到的至少是短期內的情況感到滿意。

So I like what I see. The pipeline looks great. There are activities happening even as we speak. You never know what's going to happen, but I feel like our chances to be able to add on inorganic growth to the organic growth machine that we have at Graco are really pretty good.

所以我喜歡我所看到的。管道看起來很棒。就在我們說話的同時，有些活動也正在發生。你永遠不知道會發生什麼，但我覺得我們在 Graco 的有機增長機器上再添加無機增長的機會真的很大。

And then just as a follow-up, in realizing with Expansion Markets, it doesn't take all that much in absolute revenue dollars to move the organic pendulum one way or the other. But I guess I'm a little bit surprised that I would have thought the environmental business would maybe be a bit more steady for Graco. So can you talk about what maybe drove the rollover there and if you're seeing any wavering on the semiconductor side of the business? It sounds like you're not, but I just want to put a finer point on that.

然後作為後續行動，在實現擴展市場時，並不需要花費太多的絕對收入來推動有機鐘擺向某個方向移動。但我想我有點驚訝，我原以為環境業務對於 Graco 來說可能會更穩定一些。那麼，您能否談談是什麼原因導致了這一轉變，以及您是否看到半導體業務方面出現任何動搖？聽起來你不是，但我只是想更詳細地說明這一點。

Yes. I mean when you're looking at 13 weeks, it's always a little bit dangerous. So we did hear that there may have been some federal money that got tied up after the first quarter with respect to some of the environmental policies that are being talked about in Washington compared to what may have been talked about previously.

是的。我的意思是，當你考慮 13 週的時候，總是有點危險。因此，我們確實聽說，與之前討論的情況相比，第一季之後可能有一些聯邦資金被用於華盛頓正在討論的一些環境政策。

I'm not that well-educated on that particular topic, but I think that could have been a factor there. And we really don't think that long term, anything is going to change in that category. It is a 13-week time period, so there's always a little bit of volatility that's going on there.

我對這個特定主題不太了解，但我認為這可能是其中一個因素。我們確實不認為從長遠來看該類別會發生任何變化。這是一個為期 13 週的時間段，因此總是會發生一些波動。

Semi, we feel pretty good about. I think they might have a tough comp in the fourth quarter. But other than that, activity is good. As you know, there's all kinds of fabs being talked about globally, whether you're in Europe or here in the US, and we think we've got a good chance of getting some of that business. So it feels much better than it did 18 months ago when we had big backlogs but not much orders. Now we've got reasonable backlogs and orders are coming in. So I feel good about that for the rest of the year.

我們對 Semi 感覺很好。我認為他們在第四節可能會面臨艱難的比賽。但除此之外，活動還是不錯的。如您所知，全球都在談論各種各樣的晶圓廠，無論您是在歐洲還是在美國，我們認為我們很有機會獲得一些這樣的業務。因此，感覺比 18 個月前好多了，當時我們有大量積壓訂單但訂單不多。現在，我們的積壓訂單量合理，訂單也正在湧入。所以我對此在今年餘下的時間裡感到很滿意。

Andrew Buscaglia, BNP Paribas Exane.

安德魯·巴斯卡利亞 (Andrew Buscaglia)，法國巴黎銀行 Exane。

I just want to get your thoughts on incremental margins this year, just given you had that reorganization realignment, you have pricing coming through. So I guess what's an incremental margin for you guys look like, even just like sounds like 1% to 2% volume growth is the bogey here into the back half?

我只是想了解您對今年增量利潤的看法，考慮到您進行了重組，定價也已確定。所以我想你們的增量利潤率是什麼樣的，即使只是聽起來像 1% 到 2% 的銷售成長是後半段的預期目標？

I think, Andrew, when we think about our incremental margins, if we can get growth across all of our groups, it always varies with the highest incrementals coming out of the industrial group. So if more growth comes out of there, we're going to get a little bit better. But I think probably in that mid- to low 30s is really where our -- where we typically average from an incremental margin.

安德魯，我認為，當我們考慮增量利潤時，如果我們所有的集團都能實現成長，那麼工業集團的增量總是最大的。因此，如果那裡出現更多增長，我們的情況就會好一些。但我認為，我們的平均增量利潤率很可能在 35% 左右。

Yes. Okay. And then I wanted to get a little bit more color on the comment you made in Contractor around home centers. Obviously, that probably affects your DIY area. But what -- how do you see that playing out? I would imagine that's something that wouldn't change overnight.

是的。好的。然後，我想更詳細地了解您在“家庭中心周圍的承包商”中所做的評論。顯然，這可能會影響您的 DIY 區域。但是—您認為結果會如何？我想這不是一夕之間就能改變的事。

Yes, I don't think it's going to change overnight. The only data point that we wanted to share with you guys is that, yes, it's been tough year-to-date. But if we look at the last six weeks of incoming orders, they've actually stabilized and they're actually maybe a little bit better than what we saw during the same period last year in the second half. So maybe we've seen the worst of it.

是的，我不認為它會在一夜之間改變。我們想與大家分享的唯一數據點是，是的，今年到目前為止情況很艱難。但如果我們看一下過去六週的訂單情況，就會發現它們實際上已經穩定下來，而且可能比去年下半年同期的情況要好一些。所以也許我們已經看到了最糟糕的情況。

It has been difficult, I would say, for the last couple of years. We referenced foot traffic just because I know that the large home centers have been talking about that for quite some time. And I think -- I believe that a lot of the DIY activity that goes through those channels on the paint side is tied to remodeling activity and new houses that are being acquired by people where they have to do some cleanup or fix up before they sell the house, the new owner comes in and they want to change the color of the paint or whatever they do.

我想說，過去幾年一直很困難。我們提到人流量只是因為我知道大型家居中心已經談論這個問題很長一段時間了。我認為——我相信透過這些管道在油漆方面進行的許多 DIY 活動都與改造活動和人們購買的新房有關，他們在出售房子之前必須進行一些清理或修繕，新主人搬進來後他們想改變油漆的顏色或其他什麼。

So I really do believe, again, going back to the earlier comments, if we can get some traction on housing, affordability, turnover, sales and purchases of new homes, I think the DIY market is going to come back. There hasn't been any real changes competitively or anything like that that we're concerned about.

所以我確實相信，再次回到先前的評論，如果我們能夠在住房、負擔能力、營業額、新房銷售和購買方面取得一些進展，我認為 DIY 市場將會復甦。我們所擔心的競爭方面或類似的事情並沒有任何真正的變化。

And what I would just add is when that business comes back as our most experienced, most focused merchandisers in terms of our channel lineup, they're not famous for carrying a lot of extra inventory. And so the uptick that Mark is talking about that will eventually come should flow through to us pretty quickly.

我想補充的是，當這些業務回歸時，作為我們通路陣容中最有經驗、最專注的銷售商，他們並不以擁有大量額外庫存而聞名。因此，馬克所說的最終會出現的上升趨勢應該很快就會傳達給我們。

David, if I could ask one more. I know we're in a -- you guys are embarking on more acquisitive period, which is great. But how do you balance that with your very high return on invested capital? I think some investors may worry being more acquisitive could bring that number down. So what are your return hurdles you're focused on? And how do you think about that?

大衛，如果我可以再問一個問題。我知道我們正處於一個——你們正進入更具收購性的時期，這很好。但是，您如何平衡這一點和極高的投資報酬率呢？我認為一些投資者可能會擔心更多的收購可能會降低這個數字。那麼，您關注的回報障礙是什麼？您對此有何看法？

Well, our starting point is we look for businesses, even if they're in adjacent markets, that have the characteristics that we like in our businesses. And I mean even the most recent one that we announced a couple of weeks ago is a good example. This is a niche market. This is a niche market that serves some major industrial spaces. The business has a significant amount of recurring revenue like most of our businesses. The applications that our products are used for are pretty essential in the process of these different manufacturing environments.

嗯，我們的出發點是尋找具有我們喜歡的業務特徵的企業，即使它們位於相鄰的市場。我的意思是，即使我們幾週前宣布的最新舉措也是一個很好的例子。這是一個利基市場。這是一個服務於一些主要工業領域的利基市場。與我們的大多數業務一樣，該業務擁有大量經常性收入。在這些不同的製造環境過程中，我們的產品所適用的應用非常重要。

All of that says that in a business-to-business world, if you're developing the right products with the right technology and getting them to the market, and they create value for your customers, it will translate well to the way we like to go to market and drive a value proposition that we can make money on. And I think that we keep those things in mind, that those are the characteristics that cover most of our markets and help us generate a pretty healthy return.

所有這些都表明，在企業對企業的世界中，如果您使用正確的技術開發正確的產品並將其推向市場，並且它們為您的客戶創造價值，那麼它將很好地轉化為我們喜歡的進入市場的方式並推動我們可以從中賺錢的價值主張。我認為我們會牢記這些事情，這些特點涵蓋了我們的大多數市場，並幫助我們獲得相當可觀的回報。

Mark also touched on valuations. That's the other thing to this whole process. The one thing the buyer can control is the price they're willing to pay. And when we see valuations for businesses that have slipped a little bit in the recent years, and we can do the kinds of things that we think we can do, invest in the business, expand their manufacturing capacity, help them expand their global footprint and so forth, the right price with the right niche market, we think can create value for the shareholders.

馬克也談到了估值。這是整個過程的另一件事。買家唯一可以控制的就是他們願意支付的價格。當我們看到近年來企業估值略有下滑時，我們可以採取我們認為可以採取的措施，對企業進行投資，擴大其製造能力，幫助他們擴大全球影響力等等，以合適的價格和合適的利基市場，我們認為可以為股東創造價值。

Joe Ritchie, Goldman Sachs.

高盛的喬·里奇。

So I want to go back to just the timing of the pricing announcement. I'm curious, are you -- did you decide to wait until September, to wait for the moratorium to potentially become permanent? And then just maybe just any color you can give on the initial discussions that you've had with your customers on being able to affect the pricing increase.

所以我只想回顧一下定價公告的時間。我很好奇，您是否決定等到九月，等待禁令可能成為永久性的？然後，也許您可以就與客戶進行的關於影響價格上漲的初步討論提供一些資訊。

Yes. Well, obviously, I mean, I think we wanted to wait right out of the gates just to see what might happen in the first 30 to 60 days. I think that was a smart move. We didn't put a surcharge on. We did a price increase. And we think it's fair for our channel partners to get enough of a heads up to be able to communicate what that's going to be with their customers. And that's really why we gave them enough time and have this hitting in the September time frame versus doing something immediately and causing maybe some disruption in the market.

是的。嗯，顯然，我的意思是，我想我們想等到一開始就看看前 30 到 60 天會發生什麼。我認為這是一個聰明的舉動。我們沒有收取附加費。我們提高了價格。我們認為，我們的通路合作夥伴應該獲得足夠的訊息，以便能夠向客戶傳達即將發生的事情。這就是為什麼我們給他們足夠的時間，並在 9 月的時間範圍內實施這項舉措，而不是立即採取行動，以免對市場造成一些幹擾。

Okay. So it sounds like the receptivity has been pretty good from your channel partners?

好的。那麼聽起來您的通路夥伴的接受度似乎相當不錯？

No surprises whatsoever.

沒有任何意外。

Okay. Great. And then specifically as it relates to Contractor, it's interesting like this is the area that you've gotten -- you've had the most impact from a product cost standpoint and maybe being offside on the pricing and the tariffs. So a 3-point impact this quarter, I mean, is it fair to assume that as we head into the fourth quarter, you're able to recoup a lot of that 3 points? I'm just trying to get a sense for where margins can go from here on the Contractor side.

好的。偉大的。然後具體到與承包商的關係，有趣的是，這是您所獲得的領域——從產品成本的角度來看，您產生的影響最大，並且可能在定價和關稅方面出現越位。那麼，對於本節的 3 分影響，我的意思是，是否可以公平地假設，當我們進入第四節時，你能夠收回大部分 3 分？我只是想了解承包商方面的利潤率能達到多少。

Well, if you tell me what the volume is going to be, I'll tell you what the margins are going to be. I think that there's some potential for a bit of a rebound here. It really depends on how the business holds up. What we did say during the prepared remarks was that last year's Q2 was really strong per contractor. And so when you look at the comparisons and what happened a year ago versus now in the declines, I mean, I think you need to factor that in. And then, of course, we have the COROB acquisition, which is also part of the equation as well.

好吧，如果你告訴我交易量是多少，我會告訴你利潤是多少。我認為這裡有一些反彈的潛力。這實際上取決於業務如何維持。我們在準備好的發言中確實說過，去年第二季每個承包商的表現都非常強勁。因此，當你比較一下一年前和現在的下降情況時，我認為你需要把這一點考慮進去。當然，我們還有 COROB 收購，這也是其中的一部分。

All in all, I'm pretty happy with the performance from a profitability standpoint of the company overall and our business units. I think we all get it, we all understand, we all are operating an environment that is, I would call choppy or sluggish. And we're not doing anything to damage the business, but we're also being very careful with our spending as we go through the rest of the year here.

總而言之，從整個公司和我們業務部門的獲利角度來看，我對業績感到非常滿意。我想我們都明白，我們都了解，我們都在經營一個我稱之為不穩定或遲緩的環境。我們不會做任何有損業務的事情，但在今年剩餘的時間裡，我們也會非常謹慎地控制支出。

We spent time on cash flow. You can see in the end, a big believer that cash is king and you got to make sure you're generating it, and that's something that our teams are focused on as well. All in all, I think given the environment that we're playing in, this isn't a bad year for us.

我們花時間處理現金流。最後你可以看到，我們堅信現金為王，你必須確保自己能夠產生現金，這也是我們團隊所關注的事情。總而言之，我認為考慮到我們所處的環境，今年對我們來說並不是糟糕的一年。

(Operator Instructions) Walter Liptak, Seaport Research.

（操作員指示） Walter Liptak，海港研究。

Just kind of a follow-on to the last one. As you guys are working on the One Graco, and it sounds like a theme is lowering expenses, I wonder if you could talk a little bit more about, on the cost side, I think you said costs were down $7 million, which is down 5% compared to the organic sales decline of 3%. That looks pretty good to me. And so I wonder if you could help us understand, is that -- is there a mix going on here? Or are there some benefits happening from One Graco consolidation? Or are these more like continuous improvement benefits that might be more sustainable?

這只是上一個的後續。由於你們正在致力於 One Graco，而且聽起來主題是降低開支，我想知道你們是否可以再多談一下成本方面的問題，我記得你們說過成本下降了 700 萬美元，與有機銷售額下降 3% 相比下降了 5%。我覺得這看起來很不錯。所以我想知道您是否可以幫助我們理解，這裡是否有混合情況？或者 One Graco 整合會帶來一些好處嗎？或者這些更像是可能更具永續性的持續改善效益？

Well, I'll start, and I'll let the guys chime in if I misspeak. But I think we had said that we're looking for about $16 million of reduced expenses for the full year, and I think we're on track to hit that for the full year as well. And we're tracking half the year into it. So I think you can probably just assume that we're halfway through it.

好吧，我先開始，如果我說錯了的話，我會讓大家幫忙。但我認為我們已經說過，我們希望全年減少約 1,600 萬美元的開支，而且我認為我們也有望在全年實現這一目標。我們已經追蹤了半年的時間。所以我想你可能可以假設我們已經完成一半了。

I wanted just to clarify though that we didn't do One Graco to cut costs. We really did to improve efficiencies and to make our business easier to deal with, with our customers. And I spent quite a bit of time here in the first half of the year meeting with distributors, and the feedback has been extremely positive. They are very appreciative of the fact that we've knocked down some of the silos and the barriers that we created ourselves by having separate business units. They like the fact that we're opening up our product lines. They like the fact that we have coordinated our pricing efforts across business units that were not coordinated in the past. And they like having a single point of contact within our Industrial businesses that they really didn't have before.

我只是想澄清一下，我們做 One Graco 並不是為了削減成本。我們確實做到了提高效率，讓我們與客戶的業務往來更加便捷。今年上半年我花了相當多的時間在這裡與經銷商會面，反饋非常積極。他們非常讚賞我們透過設立獨立的業務部門打破了我們自己創造的一些孤島和障礙。他們喜歡我們開放產品線這一事實。他們喜歡我們協調各業務部門的定價工作，而過去這些部門的定價工作並不協調。他們喜歡在我們的工業業務中擁有一個以前從未有過的單一聯絡點。

So you combine that with what we're doing on the operations side where we're looking at the factories and we created some complexities there as well, we announced that we're closing our Minneapolis facility and we're going to be able to move all the production into existing facilities that we already have at Graco. That should create efficiencies that haven't shown up yet in the P&L, but once we start doing that, they will. And I think having the centralized operations team managing all aspects of production has led to the inventory reductions that we highlighted earlier and led to improved cash flow as well. So it's a multifaceted approach that we're taking with One Graco. It's early days. We feel really good about it, but the signs are positive.

因此，結合我們在營運方面所做的事情，我們正在考察工廠，我們也在那裡創造了一些複雜因素，我們宣布我們將關閉明尼阿波利斯工廠，我們將能夠將所有生產轉移到我們在 Graco 已經擁有的現有設施中。這應該會產生尚未在損益表中體現的效率，但一旦我們開始這樣做，就會反映出來。我認為，集中營運團隊管理生產的各個方面已經導致了我們先前強調的庫存減少，也改善了現金流。因此，我們對“One Graco”採取了多方面的方法。現在還為時過早。我們對此感覺很好，但跡像是積極的。

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

謝謝。如果沒有其他問題，我現在將會議交給馬克希恩 (Mark Sheahan)。

Okay. Well, I appreciate everyone's participation in the call. Thank you for your time today. Have a great rest of your day.

好的。好吧，我感謝大家參與這次電話會議。感謝您今天抽出時間。祝您今天剩餘的時間過得愉快。

This concludes our conference for today. Thank you all for participating, and have a nice day. All parties may now disconnect.

今天的會議到此結束。感謝大家的參與，祝福大家有個愉快的一天。各方現在都可以斷開連線。