Helios Technologies Inc (HLIO) 2024 Q2 法說會逐字稿

Greetings, and welcome to the Helios Technologies second quarter 2024 financial results. (Operator Instructions)

您好，歡迎閱讀 Helios Technologies 2024 年第二季財務業績。（操作員說明）

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tania Almond, Vice President of Investor Relations and Corporate Communications for Helios.

提醒一下，本次會議正在錄製中。現在我很高興向您介紹主持人，塔尼亞·阿爾蒙德 (Tania Almond)，Helios 投資者關係和企業傳播副總裁。

Thank you, Ms. Almond. You may begin.

謝謝你，阿爾蒙德女士。你可以開始了。

Thank you, operator, and good day everyone. Welcome to the Helios Technologies second quarter 2024 financial results conference call. We issued a press release announcing our results yesterday afternoon. If you do not have that release, it is available on our website at hlio.com. You will also find slides there that will accompany our conversation today.

謝謝您，接線生，祝大家有美好的一天。歡迎參加 Helios Technologies 2024 年第二季財務業績電話會議。我們昨天下午發布了一份新聞稿，宣布了我們的結果。如果您沒有該版本，可以在我們的網站 hlio.com 上取得。您還可以在那裡找到伴隨我們今天談話的幻燈片。

On the line with me is Sean Bagan, Interim President, Chief Executive Officer and Chief Financial Officer. Sean will review our second quarter results along with our outlook for 2024. We will then open the call to your questions.

和我一起在線的是臨時總裁、執行長兼財務長 Sean Bagan。Sean 將回顧我們第二季的業績以及我們對 2024 年的展望。然後我們將開始電話詢問您的問題。

If you turn to Slide 2, you will find our Safe Harbor statement. As you may be aware, we will make some forward-looking statements during this presentation and the Q&A session. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from those presented today. These risks and uncertainties, and other factors have been provided in our 10-K filing as well as our upcoming 10- Q to be filed with the Securities and Exchange Commission. You can find these documents on our website or at sec.gov.

如果您翻到投影片 2，您會找到我們的安全港聲明。如您所知，我們將在本次演示和問答環節中做出一些前瞻性陳述。這些陳述適用於受風險和不確定性以及可能導致實際結果與今天呈現的結果有重大差異的其他因素影響的未來事件。這些風險和不確定性以及其他因素已在我們的 10-K 文件以及即將向美國證券交易委員會提交的 10-Q 文件中提供。您可以在我們的網站或 sec.gov 上找到這些文件。

I'll also point out that during today's call, we will discuss some non-GAAP financial measures which we believe are useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of comparable GAAP with non-GAAP measures in the tables that accompany today's slides. Please reference Slide 3 now.

我還要指出，在今天的電話會議中，我們將討論一些我們認為有助於評估我們績效的非公認會計準則財務指標。您不應孤立地考慮此附加資訊的呈現，也不應將其視為根據 GAAP 準備的結果的替代品。我們在今天的投影片隨附的表格中提供了可比較 GAAP 與非 GAAP 指標的調整表。現在請參考投影片 3。

With that, it's my pleasure to turn the call over to Sean.

至此，我很高興將電話轉給肖恩。

Thanks, Tania, and thank you all for joining us as I provide an update on Helio's second quarter results and outlook for the remainder of fiscal 2024.

謝謝 Tania，也謝謝大家加入我們，我將提供 Helio 第二季業績的最新資訊以及 2024 財年剩餘時間的展望。

Given recent events. I am currently serving as Interim President and CEO, in addition to my CFO responsibilities. As we announced last week, the change in leadership was a result of an internal investigation and subsequent findings of that investigation. I am humbled and energized to be leading the Helios team during this period of transition.

鑑於最近發生的事件。除了財務長的職責外，我目前還擔任臨時總裁兼執行長。正如我們上周宣布的那樣，領導層的變動是內部調查和後續調查結果的結果。在這個過渡時期領導 Helios 團隊，我感到謙卑和充滿活力。

I am fortunate to have a talented management team alongside me, including our Presidents, Matteo Arduini, our EMEA Hydraulics Leader; Rick Martich, our Americas Hydraulics Leader along with leading Global Operations and System Sales, and Lee Wichlacz, our Electronics Segment leader. In addition to the presidents, I have a strong team working with me at the corporate level, who have all been invaluable.

我很幸運能擁有一支才華洋溢的管理團隊，包括我們的總裁 Matteo Arduini、我們的 EMEA 液壓主管；我們的美洲液壓領導者以及全球營運和系統銷售領導者 Rick Martich 和我們的電子部門領導者 Lee Wichlacz。除了總裁之外，我還有一支在公司層面與我合作的強大團隊，他們都是無價之寶。

As a leadership team we are unified and focused on what we need to accomplish. We are supported by our Board of Directors, including Philippe Lemaitre with his expanded role from Chairman to Executive Chairman of the Board.

作為一個領導團隊，我們團結一致，專注於我們需要完成的任務。我們得到了董事會的支持，其中包括 Philippe Lemaitre，他的職責從董事會主席擴大為執行主席。

With the situation now behind us, I am really pleased with how the Helios team has responded by maintaining their focus on executing our plans, serving our customers, and supporting employee development.

現在的情況已經過去，我對 Helios 團隊的反應非常滿意，他們繼續專注於執行我們的計劃、服務客戶和支援員工發展。

While a search for a permanent CEO gets underway, we remain committed to our strategy as an integrated operating enterprise, delivering value and differentiation through our highly engineered mission critical hydraulics and electronics products, services and system solutions.

在尋找永久執行長的同時，我們仍然致力於作為綜合營運企業的策略，透過我們精心設計的關鍵任務液壓和電子產品、服務和系統解決方案提供價值和差異化。

Foremost, we are staying incredibly close to our customers. Our relationships are built around the engineering expertise we bring to help them solve their most complex problems, including increased efficiency, energy savings, higher productivity and/or electrification, along with achieving smaller fit and form factors.

最重要的是，我們與客戶保持著極為密切的關係。我們的關係建立在我們提供的工程專業知識的基礎上，幫助他們解決最複雜的問題，包括提高效率、節省能源、提高生產率和/或電氣化，以及實現更小的尺寸和外形尺寸。

Regardless of where we are in a market cycle, the fact that we are sitting at the intersection of hydraulics and electronics enables us to help customers do more with less, always adding value for them. Our strategy to organize ourselves and serve in the region, for the region also allows us to efficiently satisfy customer demands globally.

無論我們處於市場週期的哪個階段，我們正處於液壓和電子的交叉點，這一事實使我們能夠幫助客戶用更少的資源做更多的事情，並始終為他們增加價值。我們在該地區組織起來、服務該地區的策略也使我們能夠有效地滿足全球客戶的需求。

It is also worth highlighting that we are encouraged by the early interest of our Cygnus Reach software solution providing remote support for IoT smart devices. With its patented protection, it can be a market disruptor and differentiator for those customers that are looking for that first-mover advantage.

另外值得強調的是，我們對 Cygnus Reach 軟體解決方案的早期興趣感到鼓舞，該解決方案為物聯網智慧型裝置提供遠端支援。憑藉其專利保護，對於那些尋求先發優勢的客戶來說，它可以成為市場顛覆者和差異化因素。

Our results in the second quarter validate the strength of the Helios team and model. Consistent with the first quarter results, our Balboa Water Group recovery outpaced our sales expectations, which resulted in beating our second quarter sales guidance with our other businesses executing in line with our expectations.

我們第二季的結果驗證了Helios團隊和模型的實力。與第一季的業績一致，我們的巴爾博亞水務集團的復甦超出了我們的銷售預期，這導致我們的第二季銷售指引超出了我們的預期，而我們的其他業務的執行情況也符合我們的預期。

As we have talked about in the past, while very healthy, the Balboa business operates at a lower than company average margin level. Their outperformance therefore impacts mix. Though we were still able to generate a second quarter sequential step up in our adjusted EBITDA margins due to our incrementals from favorable volume.

正如我們過去談到的，雖然巴爾博亞業務非常健康，但其營運利潤率低於公司平均值。因此，他們的出色表現會影響組合。儘管由於銷售良好，我們的調整後 EBITDA 利潤率在第二季度仍然能夠實現連續成長。

During the second quarter, we amended our credit agreement with our debt market lenders. The syndication process yielded a $100 million oversubscribed position, indicative of the strong support and relationship we have with our bank partners. I am grateful to the existing lenders that are choosing to grow with us, including our lead left arranger, PNC Bank, who executed our refinancing flawlessly. The other existing banks all received named agented roles and stepped up their commit and hold levels.

在第二季度，我們修改了與債務市場貸款人的信貸協議。銀團融資過程產生了 1 億美元的超額認購，這表明我們與銀行合作夥伴的大力支持和關係。我感謝選擇與我們一起成長的現有貸方，包括我們的主要左安排人 PNC 銀行，他們完美地執行了我們的再融資。其他現有銀行都獲得了指定代理角色，並提高了承諾和持有水準。

Additionally, we targeted adding specific new lenders to round out what is now a stronger and deeper bank group that optimizes our capital structure in the near-term, but more importantly is strategically aligned to support the growth we are aspiring to achieve.

此外，我們的目標是增加特定的新貸款機構，以完善現在更強大、更深入的銀行集團，從而在短期內優化我們的資本結構，但更重要的是在策略上保持一致，以支持我們渴望實現的成長。

In addition to upsizing our revolver by $100 million, we also extended debt maturities out to June 2029 and reduced our borrowing spreads. These enhancements equate to improved earnings, cash flow and available liquidity as compared to our refinanced credit agreement. We are fortunate to have assembled a formidable lender group and we value their support immensely.

除了將我們的左輪手槍規模擴大 1 億美元外，我們還將債務期限延長至 2029 年 6 月，並降低了借貸利差。與我們的再融資信貸協議相比，這些增強功能相當於收益、現金流量和可用流動性的改善。我們很幸運能夠組建一個強大的貸方團隊，我們非常重視他們的支持。

We are operating through the uncertain timing of when markets will rebound with actions to focus on the controllables in response to sustained macroeconomic and industry headwinds. These headwinds include compounding inflation, lowered PMI readings, and the well-documented agriculture cycle weakness. In addition, a prolonged cycle with elevated interest rates has contributed to weakening consumer confidence, especially for larger discretionary purchases.

我們正面臨市場何時反彈的不確定時機，並採取行動專注於可控因素，以應對持續的宏觀經濟和產業逆風。這些不利因素包括複合通膨、PMI 讀數下降以及有據可查的農業週期疲軟。此外，升息週期延長也削弱了消費者信心，尤其是較大規模的可自由支配購買。

As a result, the industries we supply have seen lower demand in several of our end markets. All of our largest public company customers across various industries are projecting fiscal year sales contractions implied in their own fiscal year guidance. While the second quarter started off strong, we saw declines in demand in the latter part of the quarter, leading into the start of the third quarter. We have moderated our outlook accordingly.

因此，我們供應的產業在幾個終端市場的需求下降。我們各行業的所有最大的上市公司客戶都在各自的財年指導中預測了財年銷售收縮。雖然第二季開局強勁，但我們看到該季後半段需求下降，導致第三季初。我們相應地調整了我們的前景。

While we still could achieve some growth at the upper end of our range, we have adjusted our sales guidance for the second half of the year. There were several factors that contributed to our decision. Our end markets, specifically agriculture and recreational have been most impacted. This has directly affected our Faster fluid conveyance technologies business and our Enovation Controls displays and controllers business.

雖然我們仍然可以在區間上限實現一些成長，但我們調整了下半年的銷售指導。有幾個因素促成了我們的決定。我們的終端市場，特別是農業和娛樂業，受到的影響最大。這直接影響了我們的 Faster 流體輸送技術業務以及 Enovation Controls 顯示器和控制器業務。

Both Faster and Enovation mix higher towards OEM direct sales. When these OEMs are experiencing their own declining sales and pushing out production schedules, this tests our ability to grow.

Faster 和 Enovation 都比較傾向 OEM 直銷。當這些原始設備製造商的銷量下降並推遲生產計劃時，這考驗著我們的成長能力。

Notably though, our diversification into niche applications and newer markets outside of our core portfolio has been helping to offset some of the pressure we are seeing in our base business. Despite the challenging macro environment, the operational improvements we have made in the business are helping to mitigate the unabsorbed overhead from volume reductions.

但值得注意的是，我們在核心產品組合之外向利基應用和新市場的多元化一直有助於抵消我們在基礎業務中看到的一些壓力。儘管宏觀環境充滿挑戰，但我們在業務中所做的營運改善正在幫助減輕銷售減少帶來的未吸收費用。

With the systems and processes we've implemented over the past year, we've improved our forecasting and visibility. This allows us to identify early indicators, adjust costs more quickly, and ultimately deliver more consistently on our financial guidance. We have the business positioned to still drive margin improvement over last year, partially because of these enhancements.

透過我們在過去一年中實施的系統和流程，我們提高了預測和可見性。這使我們能夠識別早期指標，更快地調整成本，並最終更一致地提供我們的財務指導。我們的業務仍將推動利潤率比去年有所改善，部分原因是這些增強。

Let me switch gears here to review our financials in greater detail, starting with our second quarter results that can be found on Slides 4 through 8. Sales came in at $220 million, exceeding our expectations as health and wellness experienced growth while industrial and mobile were relatively flat and agriculture and recreational had continued sequential weakness. Net-net, both of our operating segments were up sequentially with Electronics leading the way.

讓我在這裡換個主題，更詳細地回顧我們的財務狀況，從投影片 4 到 8 中的第二季業績開始。銷售額達到 2.2 億美元，超出了我們的預期，因為健康和保健經歷了增長，而工業和移動相對平穩，農業和娛樂持續疲軟。Net-net，我們的兩個營運部門均連續上升，其中電子業務領先。

From a geographic perspective, we were up sequentially in APAC 10% and the Americas up 3% while relatively unchanged in EMEA. Compared with last year, we experienced nice growth in APAC of 12% against a softer comparable, with a decline of 11% in EMEA and down 5% in the Americas, reflecting challenging end market conditions in those two regions.

從地理角度來看，亞太地區較上季成長了 10%，美洲成長了 3%，而歐洲、中東和非洲地區則相對不變。與去年相比，我們在亞太地區實現了 12% 的良好成長，而歐洲、中東和非洲地區下降了 11%，美洲下降了 5%，反映出這兩個地區的終端市場條件充滿挑戰。

Gross margin expanded 40 basis points compared with the first quarter. The realignments made last year in our Centers of Excellence have started hitting their rhythm. They have positioned us well as we expect to sustain our margin improvements even during a pressured sales environment.

毛利率較第一季擴大40個基點。去年我們的卓越中心進行的調整已經開始步入正軌。他們為我們提供了有利的定位，因為我們期望即使在銷售環境壓力下也能維持利潤率的提高。

Year-over-year, gross profit declined $5.2 million and gross margin contracted 120 basis points to 32.1%. We are working to return to the mid to high-30% range for gross margin over time. As you know, volume is a major contributor for us that increases fixed cost utilization. Non-GAAP adjusted operating margin of 16.4% in the quarter was nearly 200 basis points above the trailing quarter.

毛利年減 520 萬美元，毛利率收縮 120 個基點至 32.1%。隨著時間的推移，我們正在努力將毛利率恢復到 30% 的中高水準。如您所知，銷售量是我們提高固定成本利用率的主要貢獻者。本季非 GAAP 調整後營業利益率為 16.4%，較上一季高出近 200 個基點。

While we still have a way to go, the sequential operating leverage clearly demonstrates how our SEA cost control efforts, combined with expanded gross margin translate directly to earnings improvement.

雖然我們還有很長的路要走，但連續的營運槓桿清楚地表明我們的東南亞成本控制努力，加上毛利率的擴大，如何直接轉化為獲利改善。

The 190-basis point sequential improvement in adjusted EBITDA gets us back into the 20-percentile margin range and reflects the impact of our focused efforts to deliver profitable sequential sales growth with disciplined spending.

調整後 EBITDA 連續改善 190 個基點，使我們回到 20% 的利潤率範圍，反映了我們透過嚴格的支出，集中努力實現盈利連續銷售成長的影響。

Year-over-year, we are comping up against last year's best quarter. Our effective tax rate in the second quarter was 23% and is the result of regional mix within different tax jurisdictions. Diluted EPS was $0.41 and diluted non-GAAP EPS was $0.64 in the quarter and compared with the first quarter they grew 46% and 21%, respectively.

與去年同期相比，我們正在與去年最好的季度進行比較。我們第二季的有效稅率為 23%，這是不同稅收管轄區內區域組合的結果。本季稀釋後每股收益為 0.41 美元，非 GAAP 稀釋後每股收益為 0.64 美元，與第一季相比分別成長了 46% 和 21%。

Starting on Slide 9, I'll give more color by segment. Hydraulics financial results improved over the trailing period demonstrating positive operating leverage. While sales were up 2% over the trailing period, operating income grew 10%. Compared with the prior year, sales were down 4% with softness across several end markets and against a challenging comparable. Sales declined in agriculture, mobile, and industrial end markets. Foreign exchange had an $800,000 unfavorable impact on segment sales.

從幻燈片 9 開始，我將逐段提供更多顏色。液壓部門的財務表現在過去一段時間內有所改善，顯示出積極的經營槓桿。過去一段時間銷售額成長了 2%，營業收入成長了 10%。與前一年相比，由於多個終端市場的疲軟以及具有挑戰性的可比較市場，銷售額下降了 4%。農業、行動和工業終端市場的銷售額下降。外匯對部門銷售造成了 80 萬美元的不利影響。

Sequentially, gross profit increased $400,000, or 1%, and gross margin contracted 50 basis points reflecting mix. Gross profit declined $4.8 million year-over-year resulting in gross margin contraction of 180 basis points primarily due to fixed cost absorption on lower volume and higher labor costs. SEA expenses were down $1.7 million or 7% compared with the prior year period. We saw favorable results in the quarter due to lower labor and benefit costs. We have also targeted SEA cost control initiatives to better match the current demand environment and help streamline our businesses.

隨後，毛利增加了 40 萬美元，即 1%，毛利率收縮了 50 個基點，反映了混合因素。毛利年減 480 萬美元，導致毛利率收縮 180 個基點，主要是由於產量減少和勞動成本上升導致固定成本吸收。SEA 費用與去年同期相比減少了 170 萬美元，即 7%。由於勞動力和福利成本下降，我們在本季看到了良好的業績。我們還制定了有針對性的 SEA 成本控制計劃，以更好地適應當前的需求環境並幫助簡化我們的業務。

Please turn to Slide 10, and we'll discuss the Electronics segment. Sequentially, the Electronics segment expanded $4.6 million, or 7%, driven by strong double-digit growth in health and wellness, consistent with the first quarter performance. Year-over-year, Electronics sales declined by $1 million, or 1%. Continued strength in health and wellness mostly offset the declines in industrial, mobile and recreational markets. Acquisitions contributed $1.2 million in sales in the second quarter. Foreign exchange was a $100,000 negative impact.

請轉到投影片 10，我們將討論電子部分。隨後，在健康和保健領域強勁的兩位數成長的推動下，電子業務成長了 460 萬美元，即 7%，與第一季的業績一致。電子產品銷售額年減 100 萬美元，即 1%。健康和保健領域的持續強勁大部分抵消了工業、行動和娛樂市場的下滑。第二季收購貢獻了 120 萬美元的銷售額。外匯帶來了10萬美元的負面影響。

Sequentially, Electronics gross profit took a nice step up by $3 million, or 13%, and gross margin expanded 200 basis points driven primarily by volume growth, operational focus on efficiencies and facility footprint optimizations. Gross margin was 34.6% and only declined by 10 basis points year-over-year.

隨後，電子產品毛利大幅增加 300 萬美元，即 13%，毛利率擴大了 200 個基點，這主要是由於銷售成長、營運重點關注效率和設施佔地面積優化。毛利率為34.6%，較去年同期僅下降10個基點。

The sequential sales and gross profit growth drove solid operating leverage in the segment. Compared with the first quarter of 2024, operating income grew $3.2 million or 45% and margin expanded 370 basis points. This further demonstrates the incrementals that can flow through our business model as the volume returns.

銷售額和毛利的連續成長推動了該部門穩健的營運槓桿。與 2024 年第一季相比，營業收入成長 320 萬美元，即 45%，利潤率擴大 370 個基點。這進一步證明了隨著銷售量的回升，我們的商業模式可以產生增量。

SEA expenses were down 1% compared with the trailing first quarter and up 9% with last year. We did not close the i3PD acquisition until the end of May, so the year ago period did not have it fully loaded into the compare.

SEA 費用較去年第一季下降 1%，較去年增長 9%。我們直到 5 月底才完成 i3PD 的收購，因此去年同期並未將其完全納入比較。

Please turn to Slide 11 for a review of our cash flow. We have continued to improve our cash conversion cycle. We generated cash from operations of $33.8 million, up 30% over the second quarter of last year and up 90% compared with the first quarter of this year. We continued to reduce inventory which is down 4% since the beginning of the year.

請參閱投影片 11 來回顧我們的現金流。我們持續改善現金週轉週期。我們的營運現金為 3,380 萬美元，比去年第二季成長 30%，比今年第一季成長 90%。我們繼續減少庫存，自年初以來減少了 4%。

This is a meaningful part of our efforts to improve our cash conversion cycle as we step through the balance of the year. Capital expenditures in the quarter were $8.1 million, or 3.7% of sales. Spending is focused on investments in machines, tooling and the EMEA footprint optimization.

這是我們在今年餘下時間改善現金轉換週期的努力的一個有意義的部分。本季資本支出為 810 萬美元，佔銷售額的 3.7%。支出主要用於機器、工具和歐洲、中東和非洲地區足跡優化的投資。

Turning to Slide 12, at the end of the second quarter, cash and cash equivalents were $45 million, and we had $308 million available on our expanded revolver. Total debt was down 4% or $22 million, from the end of 2023 and has shown steady declines over the last four quarters, bringing our net debt leverage ratio down to three times.

轉向幻燈片 12，第二季末，現金和現金等價物為 4500 萬美元，我們擴大的左輪手槍有 3.08 億美元的可用資金。總債務較 2023 年底下降了 4%，即 2,200 萬美元，並且在過去四個季度中穩步下降，使我們的淨債務槓桿率降至三倍。

I already covered our refinancing which gives us confidence in our financial position. We are driving our teams to accelerate our cash generation efforts and ultimately reduce debt further. We are proud of our 27 year record of dividend payments that we will continue to prioritize from a capital allocation perspective.

我已經介紹了我們的再融資，這讓我們對我們的財務狀況充滿信心。我們正在推動我們的團隊加速現金生成工作，並最終進一步減少債務。我們對 27 年的股息支付記錄感到自豪，我們將繼續從資本配置的角度優先考慮這項記錄。

Turning to Slides 13 to 14, as I mentioned, given the macro conditions resulting in lower order demand our perspective on the second half of the year is more cautious and we are adjusting our outlook for 2024 accordingly. In addition, our revised guidance reflects the operational actions we have undertaken to streamline our operating costs.

轉向投影片 13 至 14，正如我所提到的，鑑於宏觀條件導致訂單需求下降，我們對下半年的看法更加謹慎，我們正在相應調整 2024 年的前景。此外，我們修訂後的指導反映了我們為簡化營運成本而採取的營運行動。

The top line adjustments reflect a more challenging environment than we, or some of our industries, expected this year. I am pleased with the teams' ability to identify actions to offset the margin impact of the volume pressure and still have line of sight to potential top line growth at the upper end of our range in this environment.

營收調整反映了比我們或我們的一些行業今年預期更具挑戰性的環境。我很高興團隊能夠採取行動來抵消銷售壓力對利潤率的影響，並且在這種環境下仍然能夠看到我們範圍上限的潛在收入成長。

As shown, we are now moderating second half sales expectations which implies flat to up 3% compared to the prior year period. This equates to a full year sales range of down 1% to up 1%, or $825 to $840 million. Despite the sales moderation, we are maintaining our adjusted EBITDA margin guidance, which is in the range of 19.5% to 21.0%. We have adjusted diluted non-GAAP earnings per share to be in the range of $2.25 to $2.45, with the potential growth over last year at the higher end of the range.

如圖所示，我們現在正在調整下半年的銷售預期，這意味著與去年同期相比持平至成長 3%。這相當於全年銷售額下降 1% 到成長 1%，即 825 美元到 8.4 億美元。儘管銷售放緩，我們仍維持調整後的 EBITDA 利潤率指引，即 19.5% 至 21.0% 的範圍內。我們已將稀釋後的非公認會計原則每股收益調整為 2.25 美元至 2.45 美元，較去年的潛在成長處於該範圍的高端。

We are basing our sales adjustments on many inputs. Our external resources, whether our own OEM customer's production and sales expectations or industry market associations including NFPA, all point toward the softening order demand we are experiencing. This is causing us to moderate sales expectations for the Hydraulics segment.

我們的銷售調整是基於許多投入。我們的外部資源，無論是我們自己的 OEM 客戶的生產和銷售預期，還是包括 NFPA 在內的行業市場協會，都表明我們正在經歷訂單需求的疲軟。這導致我們降低了液壓部門的銷售預期。

We are not able to offset the Hydraulics segment weakness with additional growth in Electronics as the OEMs there are signaling softness due to sustained higher interest rates, limiting consumer demand for spas, boats, and recreational products.

我們無法透過電子產品的額外成長來抵消液壓部門的疲軟，因為由於利率持續走高，原始設備製造商表現疲軟，限制了消費者對水療、船舶和娛樂產品的需求。

We have calibrated CapEx projects, and will continue to drive working capital efficiencies to improve our cash generation during the balance of the year. Given the change in volume expectations, it has, and will take us time to flush through working capital. We still expect our leverage ratio to come down in the second half of the year as we strengthen our returns and realize the benefits of our working capital initiatives.

我們已經調整了資本支出項目，並將繼續提高營運資本效率，以改善我們在今年剩餘時間內的現金產生能力。考慮到數量預期的變化，我們已經並將需要時間來沖刷營運資金。我們仍然預計，隨著我們加強回報並實現營運資本計畫的好處，我們的槓桿率將在下半年下降。

Our third quarter estimate for sales is in the range of $192 million to $200 million. Even with a sequential step down in sales, we expect our efforts to improve efficiencies combined with cost adjustments will enable us to deliver adjusted EBITDA margin in the range of 20% to 21% for the third quarter. You can find the other modeling line items in the supplemental slides.

我們第三季的銷售額預計在 1.92 億美元至 2 億美元之間。即使銷售額連續下降，我們預計，我們提高效率的努力與成本調整相結合，將使我們第三季的調整後 EBITDA 利潤率達到 20% 至 21%。您可以在補充幻燈片中找到其他建模訂單項目。

Slide 14 provides some understanding of where we see our market and operational drivers by segment.

幻燈片 14 提供了我們對市場和細分市場營運驅動因素的一些了解。

Looking to Slide 15, I will speak to the progress we are making against the financial priorities we laid out at the beginning of the year for 2024. As we entered the year, we committed to driving sequential improvement in the first half, followed by second half year-over-year profitable sales growth.

看投影片 15，我將談談我們在年初制定的 2024 年財務優先事項方面所取得的進展。進入今年，我們致力於推動上半年的環比改善，隨後實現下半年獲利銷售的年成長。

We feel very good about what the team has accomplished to-date, focused on execution and driving consistent and predictable performance. The second quarter's sequential top line growth, expanding margins, and disciplined working capital management validate the adjustments we have made in the business are yielding positive outcomes.

我們對團隊迄今為止所取得的成就感到非常滿意，他們專注於執行並推動一致和可預測的績效。第二季的營收連續成長、利潤率不斷擴大以及嚴格的營運資本管理證明我們在業務中所做的調整正在產生積極的結果。

For the third consecutive quarter, the Helios team delivered financial results that met or slightly beat our guidance. For the fourth consecutive quarter we applied cash generated from operations and reduced our debt. We are strengthening the underlying financial discipline and structure of Helios. Our goal is to elevate the returns on our investments over time and build on the positive momentum we have delivered over the past several quarters.

Helios 團隊連續第三個季度交付的財務表現達到或略高於我們的指引。我們連續第四個季度運用營運產生的現金並減少了債務。我們正在加強 Helios 的基礎財務紀律和結構。我們的目標是隨著時間的推移提高我們的投資回報，並在過去幾季所帶來的積極勢頭的基礎上再接再厲。

As we embark on the second half of the year, we are confident we can continue navigating the choppy markets thanks to our diversification across geographies, end markets, and customers. As a reminder, we do not have a single customer that comprises more than 5% of our total company sales volume.

當我們進入下半年時，由於我們在地理、終端市場和客戶方面的多元化，我們有信心能夠繼續在動盪的市場中航行。需要提醒的是，我們沒有一個客戶的銷售量占公司總銷售量的 5% 以上。

We will continue to closely manage our controllables as we have made great strides in streamlining operations and preserving important R&D investments. We know that staying on the gas with innovation is key to emerging as a stronger company when our end markets stabilize. We will emerge from this market cycle stronger with great earnings power and a healthy balance sheet, positioning Helios to deliver stronger shareholder returns.

我們將繼續密切管理我們的可控因素，因為我們在簡化營運和保留重要研發投資方面取得了巨大進步。我們知道，當我們的終端市場穩定下來時，保持創新動力是成為更強大公司的關鍵。我們將以強大的獲利能力和健康的資產負債表從這個市場週期中脫穎而出，使 Helios 能夠提供更強勁的股東回報。

In conclusion, I want to extend a heartfelt thank you to the thousands of dedicated employees worldwide who are tirelessly committed to serving our customers day in and day out. They are the lifeblood of our culture and organization. I am incredibly honored and committed to leading the ongoing execution of our strategy while building upon the positive momentum we are generating throughout our organization. The future is bright for Helios, and we are excited to deliver on our second half commitments.

最後，我要向全球數以千計的敬業員工致以衷心的感謝，他們日復一日地孜孜不倦地致力於為我們的客戶提供服務。他們是我們文化和組織的命脈。我非常榮幸並致力於領導我們策略的持續執行，同時鞏固我們在整個組織中產生的積極勢頭。Helios 的未來是光明的，我們很高興能夠兌現下半年的承諾。

Lastly, thank you to all our customers, suppliers, shareholders and other stakeholders. Your partnership and support fuels our journey and drives our enthusiasm as we execute our transformation into a value creating, integrated operating company.

最後，感謝我們所有的客戶、供應商、股東和其他利害關係人。您的合作夥伴關係和支持將推動我們的旅程，並激發我們的熱情，幫助我們轉型為創造價值的綜合營運公司。

With that, let's open the lines for Q&A please.

現在，讓我們開始問答環節。

Thank you. We will now be conducting your question and answer session. (Operator Instructions)

謝謝。我們現在將進行問答環節。（操作員說明）

Jeff Hammond, KeyBanc Capital Markets.

Jeff Hammond，KeyBanc 資本市場。

Hey, good morning. This is David Tarantino on for Jeff.

嘿，早安。我是大衛·塔倫提諾為傑夫配音。

Hi, David.

嗨，大衛。

David.

大衛.

Maybe just to start out, could you share any updated thoughts on the CEO transition, including some color on that ongoing search process and what the expected timeframe is?

也許首先，您能否分享一下關於執行長過渡的任何最新想法，包括正在進行的搜尋過程的一些資訊以及預期的時間範圍？

Sure. Hi David, good morning. Thanks for the question. So our Board will be conducting a search, as we disclosed, and utilizing a leading search firm. They will be considering both internal and external candidates. But certainly my focus right now is executing on the strategy of the business, keeping the business focused. As I highlighted in the prepared remarks, we've got a very talented management team supported by our Regional Presidents and corporate staff. So we're confident we'll get through this transition period and come out stronger on the backside.

當然。嗨大衛，早安。謝謝你的提問。因此，正如我們所揭露的，我們的董事會將利用一家領先的獵人頭公司進行獵人頭。他們將考慮內部和外部候選人。但當然，我現在的重點是執行業務策略，保持業務重點。正如我在準備好的演講中所強調的那樣，我們擁有一支非常有才華的管理團隊，並得到區域總裁和公司員工的支持。因此，我們有信心度過這個過渡期，並在背面變得更強大。

Okay, great. And maybe, could you give us some color on what's informing the reiterated margin outlook, particularly what drives margins to be relatively unchanged in the second half versus the first, despite what is a seasonal drop in sales, and maybe kind of a softer than expected end market backdrop than a couple of months ago?

好的，太好了。也許，您能否給我們一些關於重申的利潤前景的信息，特別是是什麼導致下半年的利潤率與上半年相比相對不變，儘管銷售出現季節性下降，而且可能比預期要軟一些終端市場背景與幾個月前相比如何？

Yes, sure. So I think you've seen the sequential step up that we've experienced from the back half of last year, as a lot of the work we did last year, whether it was capital expenditure related expansions or focus on efficiencies come to fruition this year. We've seen those benefits in the first half.

是的，當然。因此，我認為您已經看到了我們從去年下半年開始經歷的連續步驟，因為我們去年所做的許多工作，無論是與資本支出相關的擴張還是對效率的關注，都取得了成果年。我們在上半年已經看到了這些好處。

We talked about the disruption last year with our manifold center of Excellence in Daman, where we expanded that facility, nearly doubled it, and moved all that production from Sarasota up there, really starting to see that hit its run rate. And we -- some of the metrics we look at are kind of the past due backlog on orders and such.

去年，我們在達曼的多方面卓越中心討論了這次中斷，我們在那裡擴建了該設施，幾乎將其規模擴大了一倍，並將所有生產從薩拉索塔轉移到那裡，真正開始看到它的運行率受到影響。我們 - 我們關注的一些指標是逾期積壓的訂單等。

And we really worked that down to a normalized level and so gotten rid of a lot of the inefficiencies we experienced last year. As we get to the back half, certainly think some of the cost actions we have taken will continue to provide that benefit. We expect to maintain our margin profile on the gross profit margins and get more leverage out of our operating expenses. So overall, the mix should be a little bit favorable as well and continue just to focus on margin improvement quarter-in, quarter-out.

我們確實將其降低到了正常水平，從而擺脫了去年我們經歷的許多低效率問題。當我們進入後半部分時，我們肯定會認為我們採取的一些成本行動將繼續提供這種好處。我們預計將維持毛利率水平，並從營運支出中獲得更多槓桿。因此，總體而言，這種組合也應該有點有利，並繼續專注於逐季提高利潤率。

Okay, great. Thank you. I'll pass it on.

好的，太好了。謝謝。我會把它傳遞下去。

Thanks, David.

謝謝，大衛。

(Operator Instructions)

（操作員說明）

Nathan Jones, Stifel.

內森瓊斯，斯蒂菲爾。

Good morning. This is Adam Farley for Nathan.

早安.這是內森的亞當法利。

Hi Adam.

嗨亞當。

I wanted to follow up on your comments about having potential line of sight to the top end of your sales guidance. What areas could lead to the upper end of revenue guidance range?

我想跟進您關於銷售指南頂端的潛在視線的評論。哪些領域可能導致收入指導範圍的上限？

So if I look at it by business, I'll just kind of go around our Hydraulics and Electronics segment. But from a Hydraulics perspective, what we keep an eye on, our largest business on Hydraulics is those distributor inventory levels, and we've seen them kind of operate in the same range for the last three quarters, not necessarily elevated, not necessarily low. So fairly consistent and that part of the Hydraulic segment drove significant increases year-over-year in the first half, and we expect that to continue in the back half.

因此，如果我從業務角度來看，我會關注我們的液壓和電子部門。但從液壓的角度來看，我們在液壓方面最大的業務是經銷商的庫存水平，我們看到它們在過去三個季度的運行範圍大致相同，不一定高，也不一定低。相當一致，液壓領域的這一部分在上半年推動了同比顯著增長，我們預計這種情況將在下半年繼續下去。

On the flip side, over in Europe, with our faster business heavily concentrated to ag, we have experienced year-over-year declines and expect that to continue into the back half as we have great line of sight with our large OEM customers that provide long range indicative orders that get locked as they get closer to the current quarter.

另一方面，在歐洲，由於我們更快的業務主要集中在農業領域，我們經歷了同比下降，並預計這種情況將持續到下半年，因為我們與大型 OEM 客戶有良好的視線，這些客戶提供長期指示性訂單在接近當前季度時被鎖定。

But given the outlook there, that's what would lead us to drop in some of the Hydraulics guidance in the back half. On the Electronics side, you have the innovation controls business that's more indexed to that rec marine customer and similar to the faster OEMs, we get good indicative orders, but we've seen them continue to have weakness.

但考慮到那裡的前景，這將導致我們在後半段放棄一些液壓指導。在電子方面，創新控制業務更多地針對船舶客戶，與速度更快的原始設備製造商類似，我們獲得了良好的指示性訂單，但我們看到他們仍然存在弱點。

On the Balboa side, the health and wellness seen a nice recovery there. We know we are comping up against a lower period coming out of COVID but continues to drive year-over-year growth.

在巴爾博亞一側，健康狀況得到了很好的恢復。我們知道，我們正在應對新冠疫情帶來的較低時期，但仍將繼續推動年成長。

So what could change, to get to the answer to your question, I think with interest rates that certainly could help stimulate some end market demand that would help give OEMs more confidence to build and as they raise their production schedules, that would increase purchase orders by the end of the year for us. But as we took down our second-half guidance, we factored that in considering where our current order rates are at.

那麼，為了回答你的問題，我認為利率肯定會有助於刺激一些終端市場需求，這將有助於讓原始設備製造商更有信心進行生產，並且隨著他們提高生產計劃，這將增加採購訂單，那麼會發生什麼變化呢？但當我們取消下半年指引時，我們在考慮當前訂單率時考慮了這一點。

So we think we're balanced with our updated guidance, but could have the opportunity. And then the last piece I would highlight is geographically, we're seeing real strength and recovery out of the APAC region. And so if that pace continues that could be another opportunity to get to that upper end.

因此，我們認為我們與更新的指導保持平衡，但可能有機會。我要強調的最後一點是地理上的，我們看到亞太地區的真正實力和復甦。因此，如果這種速度繼續下去，這可能是另一個達到高端的機會。

All right, thank you. That's really helpful. And then I just wanted to shift gears related to capacity additions. Are all your capacity additions complete now? And what progress has been made on generating incremental wins to full capacity?

好的，謝謝。這真的很有幫助。然後我只想改變與產能增加相關的方向。您現在所有的容量增加都完成了嗎？在全力實現增量勝利方面取得了哪些進展？

Sorry, can you repeat the end of that question, Adam?

抱歉，亞當，你能重複這個問題的結尾嗎？

Yes. Has there been any progress made on generating incremental wins to fill the capacity additions?

是的。在產生增量勝利以填補產能增加方面是否取得了任何進展？

Got it. Incremental wins. Sorry, just didn't come through. So from an overall footprint perspective, nearly all are complete. I would say the remaining one would be over in Europe at our faster facility, it's less about adding significant amount of capacity, it's more about efficiency and optimizing our overall footprint within Europe.

知道了。增量勝利。抱歉，剛剛沒通過。因此，從整體足跡的角度來看，幾乎所有內容都是完整的。我想說，剩下的一項將在歐洲更快的工廠完成，這不是關於增加大量產能，而是更多關於效率和優化我們在歐洲的整體足跡。

So the ones we undertook last year within the Americas, particularly here with the Daman addition, and then also with our Tijuana facility down in Mexico, are fully complete and running. So in terms of filling up that additional capacity, the teams are aggressively pursuing new markets, expanding with existing customers as we look for system solution opportunities, whether that's within a segment.

因此，我們去年在美洲的工作，特別是達曼工廠的擴建，以及我們在墨西哥的蒂華納工廠的工作，已經完全完成並正在運作。因此，在填補額外產能方面，團隊正在積極尋求新市場，在我們尋找系統解決方案機會（無論是在某個細分市場內）的同時，擴大現有客戶的規模。

So a subsystem solution within Electronics or a subsystem solution within Hydraulics, meaning we're bringing together existing products within the portfolio, or collectively bringing them all together for a full system solution.

因此，電子系統中的子系統解決方案或液壓系統中的子系統解決方案，意味著我們將產品組合中的現有產品整合在一起，或將它們全部整合在一起形成完整的系統解決方案。

All of those opportunities are still in play, and we continue to increase that funnel of opportunities. From a diversification perspective, we've talked about commercial food services in the past. We do have incremental revenue that will be coming in, in the back half related to that market, that will be insignificant. But as we get into next year creates a significant growth opportunity for us, given the amount of potential customers we're working with on solutions there.

所有這些機會仍然存在，我們將繼續增加機會管道。從多元化的角度來看，我們過去曾討論過商業餐飲服務。我們確實會有增量收入，在與該市場相關的後半段，這將是微不足道的。但隨著我們進入明年，考慮到我們正在與那裡的解決方案合作的潛在客戶數量，這為我們創造了重大的成長機會。

And then finally, I would highlight some of the niche markets that we are in, provide a bit of a diversification for us and an opportunity to continue to grow, whether that's geographically for the markets or customers that we serve. And just to highlight a few of them, mining applications, forestry, pharmaceutical, dental, medical devices, aerospace and entertainment. So those are the ones that could potentially fill up some of that capacity.

最後，我要強調我們所處的一些利基市場，為我們提供一點多元化和持續成長的機會，無論是在地理上對於我們服務的市場還是客戶。這裡僅強調其中的幾個：採礦應用、林業、製藥、牙科、醫療設備、航空航太和娛樂。因此，這些可能會填補部分產能。

That's great. Thank you for taking my questions.

那太棒了。感謝您回答我的問題。

Thanks, Adam.

謝謝，亞當。

Chris Moore, CJS Securities

克里斯摩爾，CJS 證券

Hey, good morning, guys. Thanks for taking a few questions. I hope I won't ask any that are asked already. I had some phone issues. Maybe just thank you for kind of giving the Q3 pieces in the guide. Can you just provide a little more detail on the flow between Q3 and Q4 and the biggest wildcards?

嘿，早上好，夥計們。感謝您提出幾個問題。我希望我不會問任何已經被問過的問題。我遇到了一些電話問題。也許只是感謝您在指南中提供了 Q3 部分。您能否提供有關第三季度和第四季度之間的流程以及最大通配符的更多詳細資訊？

Hi, Chris. Sure. So yeah, implied in our prepared remarks were a guidance range of $192 million to $200 million for Q3. We would expect that Q3 and Q4 could end up looking very similar. However, want to preserve the opportunity for those -- per the earlier question, some of the incremental opportunities.

嗨，克里斯。當然。所以，是的，我們準備好的評論中暗示了第三季 1.92 億美元至 2 億美元的指導範圍。我們預計第三季和第四季最終可能會非常相似。然而，想要為那些人保留機會——根據先前的問題，一些增量機會。

So we're trying to really, as we have been in the past couple quarters, be very specific in where we see it. And we have great line of sight in the current quarter. Many of our customers, as we've talked about, the large OEMs, give us long range forecasts. But then there are the other businesses where they're -- where they're shorter cycle from an order perspective, so we don't have as much visibility.

因此，正如我們在過去幾個季度所做的那樣，我們正在努力非常具體地了解我們所看到的情況。我們在本季有很好的視野。正如我們所討論的，我們的許多客戶（大型原始設備製造商）都為我們提供了長期預測。但還有其他業務——從訂單的角度來看，它們的周期較短，所以我們沒有那麼多的可見性。

So like with our health and wellness, that has been really strong in the first half and overachieved, our expectations, typically get kind of four to six week of firm orders there. And as we head into the back half of the year, we know seasonality wise that Balboa business typically trails off in the fourth quarter. But there could be an opportunity there for the current strength that we experienced in the first half to sustain.

因此，就像我們的健康和保健一樣，上半年表現非常強勁，並且超出了我們的預期，通常會在那裡獲得四到六週的確定訂單。當我們進入今年下半年時，我們知道從季節性角度來看，巴爾博亞業務通常會在第四季度放緩。但我們可能有機會維持上半場目前的強勢。

And then even with our largest business on Hydraulics, as you all know, our lead times are very strong. We did get a little behind past due through that Center of Excellence transition last year with Daman, but we really have worked through that entire backlog. And so that's one differentiation, competitive advantage we have is our ability to fulfill orders quicker. And so that will -- and we see that with the distributor inventory levels not carrying as much inventory. So that could provide a nice opportunity as well.

眾所周知，即使我們擁有最大的液壓業務，我們的交貨時間也非常長。去年，透過達曼的卓越中心過渡，我們確實有點落後了，但我們確實已經完成了整個積壓工作。因此，我們擁有的差異化競爭優勢之一是我們更快履行訂單的能力。因此，我們看到分銷商的庫存水準不會有那麼多庫存。所以這也可以提供一個很好的機會。

Got it. Very helpful. I didn't hear much talk in terms of the big system sales that you're working on with the OEMs. Just fair to say that those are still progressing nicely?

知道了。非常有幫助。我沒有聽到太多關於你們與原始設備製造商合作的大型系統銷售的討論。公平地說，這些進展仍然順利嗎？

Yes, I would characterize it that any system sale we've ever alluded to or spoke to are still in play. It's just very long cycle. And me coming from that OEM space, there's various stages that they come in. And when we're pursuing a large one, that is displacing different suppliers. If you think across a manifold, a valve, a coupler, a controller, a display, even adding in our Cigna software on the backside, that's a pretty drastic change that you're displacing many different suppliers.

是的，我想說的是，我們曾經提到或談到的任何系統銷售仍在進行中。只是周期很長。我來自 OEM 領域，他們處於不同的階段。當我們追求大型供應商時，就會取代不同的供應商。如果您考慮歧管、閥門、耦合器、控制器、顯示器，甚至在背面添加我們的 Cigna 軟體，那麼這將是一個相當巨大的變化，您將取代許多不同的供應商。

So whether it's very upfront in the stage of product planning, product validation, working with engineers from the potential customer, to then getting into the bill of materials and productions and pre-productions, and validating to actually us getting a purchase order and then putting into production, that's a long cycle, multi years.

因此，無論是在產品規劃、產品驗證、與潛在客戶的工程師合作、進入物料清單、生產和預生產階段，還是驗證我們實際獲得採購訂單，然後將其投入使用，是否非常前期投入生產，這是一個很長的周期，需要很多年。

But in addition to the ones we've spoken about, there are many new ones we are pursuing as well, and we are firmly committed. We think that's a significant value creator, a value proposition that we bring that no one else does from an electro hydraulics perspective, that really will help drive value and growth for us in the longer term.

但除了我們已經談到的那些之外，我們還正在追求許多新的目標，並且我們堅定地致力於這一目標。我們認為這是一個重要的價值創造者，從電動液壓的角度來看，我們帶來的價值主張是其他人無法做到的，從長遠來看，這確實有助於推動我們的價值和成長。

Got it. Helpful. On that front I know there's kind of a fixed timeline to some of this stuff. But in terms of the current market environment, ag still saw off lots of economic uncertainty. Does that likely -- does the backdrop likely or potentially accelerate these system deals as they're looking at companies looking to further drive competitive positioning? Or does it more likely slow the process because of so much uncertainty?

知道了。有幫助。在這方面，我知道其中一些事情有固定的時間表。但就當前市場環境而言，農業仍面臨許多經濟不確定性。當他們正在尋找希望進一步推動競爭地位的公司時，這種背景是否可能或可能加速這些系統交易？還是因為存在如此多的不確定性，它更有可能減慢進程？

Well, that's where we would like to believe and think, and that's why we try and bring these solutions to those customers even before these OEMs may even know the full capability of what we offer.

嗯，這就是我們願意相信和思考的地方，這就是為什麼我們甚至在這些原始設備製造商知道我們提供的產品的全部功能之前就嘗試將這些解決方案提供給這些客戶。

And so potentially could accelerate it, typically our annual production launches, and you got to hit that cycle. And that obviously varies by industry, by market, but potentially could be something that would accelerate because it is a clear differentiator for those OEMs, the solution we provide.

因此，可能會加速它，通常是我們的年度產品發布，你必須達到這個週期。這顯然因行業、市場而異，但可能會加速發展，因為對於那些原始設備製造商來說，我們提供的解決方案是一個明顯的差異化因素。

Got it. I will leave it there. I appreciate it, guys.

知道了。我會把它留在那裡。我很感激，夥計們。

Thanks, Chris.

謝謝，克里斯。

Thanks, Chris.

謝謝，克里斯。

Thanks, Chris.

謝謝，克里斯。

Jon Braatz, Oppenheimer.

喬恩·布拉茨，奧本海默。

Good morning, Sean. Tania.

早安，肖恩。塔妮亞.

Morning, Jon.

早安，喬恩。

Hi, Jon.

嗨，喬恩。

Sean, are you making any labor force adjustments? And I'm thinking in particular, maybe at Faster, the ag cycle is down, and sometimes these ag cycles aren't one year phenomenon, they can be two, three year cycles. And so has there been any adjustments in the labor force, maybe beyond attrition? And is that something that would be contemplated?

Sean，你們有勞動力調整嗎？我特別在想，也許在更快，農業週期下降了，有時這些農業週期不是一年現象，它們可能是兩年、三年的週期。那麼勞動力是否有任何調整（也許超出了自然減員的範圍）？這是值得考慮的事嗎？

Yes. So, Jon, thanks for the question. So with respect to Faster, not only are we focused on the labor and attrition, we haven't taken any significant layoff, but we are taking the opportunity, particularly through the summer holiday period and planning for the holiday period at the end of the year, to reduce production levels.

是的。所以，喬恩，謝謝你的提問。因此，就Faster而言，我們不僅關注勞動力和人員流失，我們沒有進行任何重大裁員，而且我們正在抓住機會，特別是在暑假期間，併計劃年底的假期。

The other lever we have with the Faster business is in-source versus outsourcing of different manufacturing processes. So we're bringing more of it in-house, which allows us to flex up and down, obviously our production levels and absorb our costs more efficiently, but also on the periods of upswings allows us to ramp quicker as well when we do outsource.

我們對更快業務的另一個槓桿是不同製造流程的內源與外包。因此，我們將更多的產品引入內部，這使我們能夠上下靈活調整生產水平，更有效地吸收成本，而且在經濟成長時期，當我們進行外包時，我們也可以更快地提升產能。

So we've got a few things under our control. And what I would highlight is our Faster business, led by Matteo Arduino, does a remarkable job navigating those changes in end markets and those cycles, but he also has done a nice job to diversify away from being so reliant on ag. And so there are other pockets that are performing well for that Faster business and particularly our Faster business overseas from the EMEA perspective.

所以我們已經控制了一些事情。我要強調的是，由 Matteo Arduino 領導的 Faster 業務在應對終端市場和週期的變化方面做得非常出色，而且他在實現多元化、擺脫對農業的依賴方面也做得很好。因此，還有其他領域在 Faster 業務方面表現良好，特別是從歐洲、中東和非洲 (EMEA) 的角度來看，我們在海外的 Faster 業務表現良好。

So the Asia Pacific region, our Brazil business, our Americas business are actually performing pretty strong that are helping offset some of that weakness. So overall, the levers that they have and the automation that we've invested in over there has really helped maintain the margins.

因此，亞太地區、我們的巴西業務和美洲業務實際上表現相當強勁，這有助於抵消一些弱點。總的來說，他們擁有的槓桿作用和我們在那裡投資的自動化確實有助於維持利潤。

Okay, thank you. And secondly, the health and well -- as you pointed out, the health and wellness market has been pretty good the first half of the year, and obviously it has exposure to the consumer. Are you surprised in regard to its strength and how do you see that unfolding as we go forward beyond maybe the seasonal decline that we typically see?

好的，謝謝。其次，健康和保健——正如您所指出的，今年上半年健康和保健市場表現相當不錯，顯然它與消費者有接觸。您對它的實力感到驚訝嗎？

Yes, that's a great question because I would say no, I'm not surprised at where it's at. From a perspective -- to put it in perspective, where we're operating right now for the first half provided nice growth year-over-year, but the comparable is very soft. And even the first half run rate isn't back to kind of pre-acquisition levels. So it has opportunity to run.

是的，這是一個很好的問題，因為我會說不，我對它的位置並不感到驚訝。從一個角度來看，我們上半年的營運情況比去年同期成長良好，但可比較的情況非常疲軟。甚至上半年的運轉率也沒有回到收購前的水準。所以它有機會運行。

Now it ran significantly throughout COVID, more than doubled. So we're coming off of softer comps, but from a year-over-year, it's nice growth. Where I'm also encouraged is we had announced a strategic alliance with WaterGuru, which gets us into a new segment of product to distribute. And we already have our first OEM that's committed to that solution.

現在，它在整個新冠疫情期間顯著增長，增長了一倍多。因此，我們的業績比較疲軟，但從同比來看，這是一個不錯的成長。讓我感到鼓舞的是，我們宣布與 WaterGuru 結成策略聯盟，這使我們進入了一個新的產品分銷領域。我們已經擁有第一個致力於該解決方案的 OEM。

And so just as a reminder, it's monitoring of chemicals and water temperature and such, and it's integrated into our Balboa app with our -- so customers can see and view all the key indicators for the performance of their spa. And over time, we'll get into the treatment and the chemical side. So it's a significant green shoot for us of a piece of that market that we have never played in before. So very confident that we'll continue to drive growth and get that back to a more normalized level.

提醒一下，它正在監測化學品和水溫等，並且它與我們的 Balboa 應用程式整合在一起，以便客戶可以看到並查看水療中心性能的所有關鍵指標。隨著時間的推移，我們將進入治療和化學方面。因此，這對我們來說是一個重要的新芽，我們以前從未涉足過這個市場。我們非常有信心繼續推動成長並將其恢復到更正常化的水平。

Okay, Sean, thank you very much.

好的，肖恩，非常感謝你。

Thanks, Jon.

謝謝，喬恩。

Mig Dobre, Baird.

米格·多布雷，貝爾德。

Hi, good morning, Sean and Tania. It's Joe Grabowski on from Mig this morning.

嗨，早上好，肖恩和塔妮亞。今天早上，喬·格拉博夫斯基 (Joe Grabowski) 從米格 (Mig) 來報道。

Very good morning.

早安.

Hi, Joe.

嗨，喬。

Hi, good morning. Most of my questions have been answered. I did maybe have just a few more cleanup questions. You know, I guess when you talked about the declines in demand in the latter part of the quarter leading into the start of the third quarter, can you maybe talk about that a little more? Was it kind of gradual at the end of the quarter into third quarter? Was it abrupt and does it feel like demand has leveled off here early August or are things still sort of choppy?

嗨，早安。我的大部分問題都得到了解答。我可能還有一些清理問題。你知道，我想當你談到第三季開始前的季度後半段需求下降時，你能再多談談嗎？從季末到第三季是漸進的嗎？是突然的嗎？

Yes, no, I would say it was gradual. It wasn't a significant cliff drop off, more so what we did experience that last year. I would also highlight that we had seen some of the weakness in longer term orders that weren't committed that as they get closer to the second half come into that lock period, and so concentrated though, to that ag market and the recreational market more specifically.

是的，不，我想說這是漸進的。這並不是一個明顯的懸崖式下降，尤其是我們去年所經歷的情況。我還要強調的是，我們已經看到了長期訂單的一些弱點，這些訂單沒有承諾，隨著接近下半年進入鎖定期，並且如此集中，更多地集中在農業市場和娛樂市場上具體來說。

And then just with that shorter lead time on Balboa and knowing we're getting into the lower seasonality side of that health and wellness, just want to be cautious and not over commit there, not assume that our over delivery in the first half for health and wellness would continue. And so I wouldn't call it necessarily a significant surprise. It was clearly leading indicators by our public company customers.

然後，由於巴爾博亞的交貨時間較短，並且知道我們正在進入健康和保健的季節性較低的一面，只是想保持謹慎，不要過度承諾，不要假設我們在上半年的健康方面過度交付健康將繼續。所以我並不認為這一定是個重大的驚喜。這顯然是我們上市公司客戶的領先指標。

Seven of our top 20 customers are public companies and kind of seeing what they have reported and their adjustments and all calling for declines year-over-year in their fiscal year sales. So didn't catch us by surprise. But again, we think our recalibrated back half expectation, full year expectation covers the most likely scenario that we have visibility to right now.

我們的 20 大客戶中有 7 家是上市公司，他們看到了他們的報告和調整，都要求其財年銷售額同比下降。所以並沒有讓我們感到驚訝。但我們再次認為，我們重新調整的下半年預期、全年預期涵蓋了我們目前所能看到的最有可能的情況。

Got it. Okay. And then I know there's been a couple questions about the sales guidance and kind of the cadence of that guidance. I'm going to maybe take another shot at it. The midpoint of your Q3 sales guidance were sales down 3%, and then that would mean that the midpoint of your full year sales guidance, Q4 would be up 6%, and that would be the first top line growth in the last several quarters. So that Q4 kind of implied 6% growth, is that just kind of bumping into a couple of years of easier comparisons? Or is there anything maybe with the new capacity additions that would allow the Q4 growth to be in that range?

知道了。好的。然後我知道有幾個關於銷售指導和指導節奏的問題。我也許會再試一次。第三季銷售指引的中點是銷售額下降 3%，那麼這意味著第四季全年銷售指引的中點將成長 6%，這將是過去幾季的首次營收成長。那麼第四季隱含 6% 的成長，這是否只是與幾年的簡單比較相撞？或者有任何新增產能可以讓第四季的成長保持在這個範圍內？

Yes, I do believe the compare plays into that. In addition, I would highlight that the capacity expenses, as I mentioned last year, are now at run rate. So we were impacted last year by building up that backlog from our manifold Center of Excellence. And so from that perspective, Q4 was a little bit impacted last year.

是的，我確實相信比較會發揮作用。此外，我要強調的是，正如我去年提到的，容量支出目前已按運行率計算。因此，去年我們受到了來自多方面卓越中心積壓的影響。因此從這個角度來看，去年第四季受到了一些影響。

So it makes for the easier comp this year. But we -- I agree with your observation that it would be the first quarter that would provide growth. And again, given our visibility into order demands and the way the markets are performing we're confident we can drive growth in the fourth quarter.

所以這使得今年的比賽變得更加容易。但我們——我同意你的觀察，第一季將帶來成長。同樣，鑑於我們對訂單需求和市場表現方式的了解，我們有信心推動第四季的成長。

Got it. Okay, thank you. And then final question. I know we've talked about new customer wins, new end markets. I wanted to maybe ask specifically about food equipment. I know you guys had innovation, had a booth at the NRA show in Chicago in May, but I also know that Joseph had some connections to the food equipment end market. So maybe any updates you can give us around penetration into food equipment?

知道了。好的，謝謝。然後是最後一個問題。我知道我們已經討論過贏得新客戶、新終端市場。我想具體詢問有關食品設備的問題。我知道你們有創新精神，在 5 月的芝加哥 NRA 展會上有一個展位，但我也知道約瑟夫與食品設備終端市場有一些聯繫。那麼，您是否可以向我們提供有關食品設備滲透的任何最新資訊？

Yes, we're very excited about the opportunity food equipment presents. Certainly no one person is driving that. In fact, our President of our Electronics segment, Lee Wichlacz, that I referenced in the prepared remarks, spent a significant part of his career in that segment. And with his experience and the sales team's opportunities, what the funnel currently looks like for that, we're confident that's going to provide incremental growth as we get into next year. In fact, we'll generate a little bit of revenue in the back half of this year from that.

是的，我們對食品設備帶來的機會感到非常興奮。當然沒有人在推動這一點。事實上，我在準備好的發言中提到的電子部門總裁 Lee Wichlacz 在該部門度過了職業生涯的很大一部分。憑藉他的經驗和銷售團隊的機會，以及目前的漏斗情況，我們相信這將在我們進入明年時提供增量成長。事實上，我們將在今年下半年從中產生一點收入。

So a lot of focus there. We think we bring a lot of value proposition to that marketplace, particularly on the electronic side with our displays and controls, and then weaving in our Cygnus software remote platform. So in addition to the show you referenced, we are also at the Vegas CES show and got significant interest, not only food service, but other markets. that that software could be very meaningful as we get into next year as well.

所以這裡有很多焦點。我們認為我們為該市場帶來了許多價值主張，特別是在我們的顯示器和控制的電子方面，然後融入我們的 Cygnus 軟體遠端平台。因此，除了您提到的展會之外，我們還在維加斯 CES 展會上獲得了極大的興趣，不僅是食品服務，還有其他市場。當我們進入明年時，該軟體也可能非常有意義。

Got it. Okay. Thanks for taking my questions.

知道了。好的。感謝您回答我的問題。

This concludes our question-and-answer session. I would like to turn the floor back over to Tania Almond for closing comments.

我們的問答環節到此結束。我想將發言權交還給塔尼亞·阿爾蒙德以徵求結束意見。

Great. Thank you, operator, and thanks to everyone for joining us today. Feel free to reach out to me if you have any follow-up questions. Enjoy the rest of your summer. It's disappearing quickly and we'll look forward to seeing you back on the road soon. Have a great day.

偉大的。謝謝運營商，也謝謝大家今天加入我們。如果您有任何後續問題，請隨時與我聯絡。享受你剩下的夏天。它正在迅速消失，我們期待很快在路上見到您。祝你有美好的一天。

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。