Kadant Inc (KAI) 2023 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Fourth Quarter 2023 Kadant Earnings Conference Call. (Operator Instructions) Again, please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加凱登 2023 年第四季財報電話會議。 （操作員指示）再次請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your first speaker today, Michael McKenney, Executive Vice President and CFO. Please go ahead.

現在我想將會議交給今天的第一位發言人，執行副總裁兼財務長 Michael McKenney。請繼續。

Thank you, Victor.

謝謝你，維克多。

Good morning, everyone, and welcome to Kadant's Fourth Quarter and Full Year 2023 Earnings Call. With me on the call today is Jeff Powell, our President and Chief Executive Officer.

大家早安，歡迎參加凱登 2023 年第四季和全年財報電話會議。今天與我一起參加電話會議的是我們的總裁兼執行長傑夫鮑威爾 (Jeff Powell)。

Before we begin, let me read our safe harbor statement. Various remarks that we may make today about Kadant's future plans and expectations, financial and operating results and prospects are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results to differ materially from these forward-looking statements as a result of various important factors, including those outlined at the beginning of our slide presentation and those discussed under the heading Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2022, and subsequent filings with the Securities and Exchange Commission.

在開始之前，讓我先閱讀我們的安全港聲明。我們今天可能就凱登的未來計劃和預期、財務和經營業績及前景發表的各種言論均為前瞻性陳述，旨在遵守1995 年《私人證券訴訟改革法案》中的安全港條款。這些前瞻性陳述受已知和未知的風險和不確定性可能導致我們的實際結果與這些前瞻性陳述存在重大差異，原因是各種重要因素，包括我們幻燈片演示開頭概述的因素以及我們年度報告中風險因素標題下討論的因素截至 2022 年 12 月 31 日的財政年度的 10-K 表格報告以及隨後向美國證券交易委員會提交的文件。

In addition, any forward-looking statements we make during this webcast represent our views and estimates only as of today. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views or estimates change.

此外，我們在本次網路廣播中所做的任何前瞻性陳述僅代表我們截至今天的觀點和估計。雖然我們可能選擇在未來某個時候更新前瞻性陳述，但我們特別聲明不承擔任何這樣做的義務，即使我們的觀點或估計發生變化。

During this webcast, we will refer to some non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is contained in our fourth quarter and full year earnings press release and the slides presented on the webcast and discussed in the conference call, which are available in the Investors section of our website at www.kadant.com.

在本次網路廣播中，我們將提及一些非公認會計準則財務指標。這些非公認會計準則衡量指標並非依照公認會計原則制定。非 GAAP 財務指標與最直接可比較的 GAAP 指標的對帳包含在我們的第四季度和全年收益新聞稿以及網路廣播中展示並在電話會議中討論的幻燈片中，這些內容可以在我們的網站為www.kadant.com。

Finally, I wanted to note that when we refer to GAAP earnings per share or EPS and adjusted EPS on this call, we are referring to each of these measures as calculated on a diluted basis.

最後，我想指出的是，當我們在本次電話會議中提及公認會計原則每股收益或每股收益和調整後每股收益時，我們指的是稀釋基礎上計算的每項指標。

With that, I'll turn the call over to Jeff Powell, who will give you an update on Kadant's business and future prospects. Following Jeff's remarks, I'll give an overview of our financial results for the quarter and the year, and we will then have a Q&A session. Jeff?

接下來，我會將電話轉給傑夫鮑威爾 (Jeff Powell)，他將為您介紹凱登業務和未來前景的最新情況。在傑夫的演講之後，我將概述我們本季和本年度的財務業績，然後我們將進行問答環節。傑夫？

Thanks, Mike. Hello, everyone. Thank you for joining us this morning to review our fourth quarter and full year results and discuss our business outlook for 2024.

謝謝，麥克。大家好。感謝您今天早上加入我們，回顧我們第四季和全年的業績，並討論我們 2024 年的業務前景。

I'm pleased to report the fourth quarter was a solid finish to a record-setting year for Kadant. Despite the slowdown in overall manufacturing activity and continued macroeconomic headwinds in many regions, we had another well-executed quarter. This led to solid adjusted EBITDA performance and excellent cash flow in the fourth quarter.

我很高興地向大家報告，第四季為凱登創紀錄的一年畫上了圓滿的句點。儘管整體製造業活動放緩且許多地區的宏觀經濟逆風持續，但我們又度過了一個表現良好的季度。這導致了第四季度穩健的調整後 EBITDA 業績和出色的現金流。

Organic bookings were steady in the fourth quarter with solid demand, as we delivered on our mission to provide technologies and engineered solutions that help our customers operate more efficiently. At the end of 2023, we were honored to, once again, be named by Newsweek Magazine as one of America's most responsible companies. This marks the fourth consecutive year of being included on this list, and it is rewarding to be recognized for our efforts in this area. With that, I would like to review our Q4 financial performance.

第四季的有機預訂穩定，需求強勁，因為我們履行了提供技術和工程解決方案以幫助客戶更有效率運作的使命。 2023 年底，我們很榮幸再次被《新聞週刊》雜誌評為美國最負責任的公司之一。這標誌著我們連續第四年被列入名單，我們在這一領域的努力得到認可是值得的。在此，我想回顧一下我們第四季的財務表現。

Fourth quarter performance overall was solid and better than expected in several areas. Q4 revenue and adjusted EPS were both up 3% compared to the same period last year, while bookings were comparable with the prior year period. Although a large portion of our Q4 revenue was from capital shipments, excellent execution resulted in an adjusted EBITDA margin of 20.3%.

第四季的整體表現穩健，在多個領域都優於預期。第四季營收和調整後每股盈餘均較去年同期成長 3%，預訂量與去年同期相當。儘管我們第四季營收的很大一部分來自資本出貨，但出色的執行力使調整後的 EBITDA 利潤率為 20.3%。

I'm particularly pleased with our operating cash flow, which was the second highest in our company history at $59 million. Our fourth quarter earnings performance contributed to exceptional full year financial results, which I will review next on Slide 7.

我對我們的營運現金流感到特別滿意，達到 5900 萬美元，是我們公司歷史上第二高的。我們第四季的獲利表現為全年出色的財務表現做出了貢獻，我將在接下來的幻燈片 7 中回顧這一點。

The record demand we experienced in the first quarter of 2023 provides an excellent start to the year and contributing to our record-setting revenue performance for the full year. Adjusted EPS increased 9% to a record $10.04, exceeding the prior record set last year at $9.24 per share. Our full year adjusted EBITDA was a record $201 million and a record 21% of revenue. Our strategic focus on improving our margin performance continues to deliver results, and we are pleased with the progress of ongoing initiatives to grow our businesses.

我們在 2023 年第一季經歷的創紀錄的需求為今年提供了良好的開端，並為我們創紀錄的全年收入表現做出了貢獻。調整後每股收益成長 9%，達到創紀錄的 10.04 美元，超過去年創下的每股 9.24 美元的紀錄。我們全年調整後 EBITDA 達到創紀錄的 2.01 億美元，佔營收的 21%。我們對提高利潤表現的策略重點持續取得成果，我們對持續發展業務的舉措所取得的進展感到高興。

Our workforce around the globe deserve tremendous credit for these results as they performed exceptionally well throughout the year. I'm extremely proud of our employees for the innovative work they have done and continue to do to serve our customers.

這些成果值得我們全球員工的高度讚揚，因為他們全年表現異常出色。我為我們的員工感到非常自豪，他們已經完成並將繼續為我們的客戶提供創新工作。

Next, I'd like to review our performance in our 3 operating segments. I'll begin with our Flow Control segment.

接下來，我想回顧一下我們在 3 個營運部門的表現。我將從流量控制部分開始。

Q4 revenue declined 4% to $87 million compared to the then record fourth quarter of 2022. Aftermarket parts revenue was up slightly compared to the prior period and made up 68% of total revenue. Product mix within both parts and capital negatively affected gross margin, and this led to an adjusted EBITDA margin of 27% in the fourth quarter. Bookings were up 8% compared to the same period last year. This strong finish to the year positions us well entering 2024. We believe the fundamental drivers of end markets remain healthy, though business activity continues to be influenced by geopolitical and macroeconomic challenges around the globe.

與當時創紀錄的 2022 年第四季相比，第四季營收下降了 4%，至 8,700 萬美元。售後零件收入與上一時期相比略有增長，佔總收入的 68%。零件和資本內的產品組合對毛利率產生了負面影響，這導致第四季度調整後的 EBITDA 利潤率為 27%。與去年同期相比，預訂量增加了 8%。今年的強勁收官為我們進入 2024 年奠定了良好的基礎。我們相信，儘管商業活動繼續受到全球地緣政治和宏觀經濟挑戰的影響，但終端市場的基本驅動力仍然健康。

Turning now to our Industrial Processing segment. Our performance in the fourth quarter was solid, despite the softening in some of our core end markets. Revenue declined 3% compared to the same period last year, due largely to fewer capital shipments of our stock prep equipment used to process recycled fiber. Aftermarket parts revenue, however, was up 5% and represented 64% of total revenue in the fourth quarter. Adjusted EBITDA margin declined 110 basis points compared to the prior year, but remained strong at 23.8% of revenue. This decline was largely attributed to a decrease in operating leverage associated with lower capital revenue.

現在轉向我們的工業加工領域。儘管我們的一些核心終端市場疲軟，但我們第四季的業績仍然穩健。與去年同期相比，收入下降了 3%，這主要是由於我們用於加工再生纖維的庫存準備設備的資本出貨量減少。然而，售後零件收入成長了 5%，佔第四季總收入的 64%。調整後 EBITDA 利潤率較前一年下降 110 個基點，但仍保持強勁，佔營收的 23.8%。這一下降主要歸因於資本收入下降導致營運槓桿下降。

Looking ahead to 2024, we expect demand in this segment to shift towards aftermarket parts versus capital, particularly with the addition of our recently announced acquisition of Key Knife. Key Knife is a manufacturer of engineered knife systems used in various wood processing applications. More than 90% of its revenue is aftermarket parts. And addition of Key Knife to our Industrial Processing segment is expected to further strengthen our aftermarket position in this segment.

展望 2024 年，我們預計該細分市場的需求將轉向售後零件而非資本，特別是在我們最近宣布收購 Key Knife 的情況下。 Key Knife 是一家生產用於各種木材加工應用的工程刀具系統的製造商。其90%以上的收入來自售後零件。將 Key Knife 添加到我們的工業加工領域預計將進一步加強我們在該領域的售後市場地位。

In our Material Handling segment, revenue increased 27% in the fourth quarter to a record $64 million. Strong bookings in the first half of the year contributed to this record-setting performance. Capital equipment revenue was exceptionally strong and represented 55% of total revenue in the quarter, led by our conveying product line.

在我們的物料搬運部門，第四季營收成長了 27%，達到創紀錄的 6,400 萬美元。上半年強勁的預訂量促成了這項創紀錄的業績。在我們的輸送產品線的帶動下，資本設備收入異常強勁，佔本季總收入的 55%。

Despite the large portion of revenue attributed to capital business, we achieved excellent operating leverage and adjusted EBITDA margin increased 350 basis points to 22.1% in the fourth quarter. The integration of KWS Manufacturing acquired a few weeks ago is underway and progressing well. We are pleased to have this leading manufacturer of screw conveyors and related equipment in part of Kadant.

儘管大部分收入來自資本業務，但我們實現了出色的營運槓桿，第四季度調整後 EBITDA 利潤率增長了 350 個基點，達到 22.1%。幾週前收購的 KWS Manufacturing 的整合正在進行中，進展順利。我們很高興凱登擁有這家領先的螺旋輸送機及相關設備製造商。

Looking ahead to 2024, we believe this segment will continue to see good business activity, particularly as new infrastructure projects are executed and demand for Kadant-made equipment remained strong.

展望 2024 年，我們相信該細分市場將繼續出現良好的業務活動，特別是隨著新基礎設施項目的實施以及對凱登製造設備的需求仍然強勁。

As we look ahead to the first quarter of 2024 and the full year, ongoing project activity is healthy, and demand has been solid as we entered the year. That said, we are seeing continuing economic uncertainty around the globe and expect demand in 2024 to be similar to 2023. Our strong backlog and ability to generate robust cash flows have us well positioned to capitalize on opportunities that may emerge as the year unfolds, and we expect to deliver a solid financial performance again this year.

展望 2024 年第一季和全年，正在進行的專案活動狀況良好，進入今年以來需求也一直穩定。也就是說，我們看到全球經濟持續存在不確定性，預計 2024 年的需求將與 2023 年類似。我們強大的積壓訂單和產生強勁現金流的能力使我們能夠充分利用今年可能出現的機會，並且我們預計今年將再次實現穩健的財務表現。

I'd now like to pass the call over to Mike for his review of our financial performance and outlook for 2024.

我現在想將電話轉接給 Mike，請他回顧我們的財務表現和 2024 年的前景。

Thank you, Jeff.

謝謝你，傑夫。

I'll start with some key financial metrics from our fourth quarter.

我將從第四季度的一些關鍵財務指標開始。

Gross margin decreased 40 basis points to 42.7% in the fourth quarter '23 compared to 43.1% in the fourth quarter '22, due primarily to lower margins achieved on capital projects at our Industrial Processing and Flow Control segments. Our overall percentage of parts and consumables revenue was 60% of total revenue in both the fourth quarters of '23 and '22.

23 年第四季的毛利率下降了40 個基點，至42.7%，而22 年第四季的毛利率為43.1%，這主要是由於我們的工業加工和流量控制部門的資本項目實現的利潤率較低。在 2023 年和 22 年第四季度，我們的零件和消耗品收入的總體百分比均為總收入的 60%。

As a percentage of revenue, SG&A expenses increased to 25.1% in the fourth quarter of '23 compared to 24.5% in the prior year period. SG&A expenses were $59.8 million in the fourth quarter of '23, increasing $3 million or 5% compared to $56.8 million in the fourth quarter of '22. The fourth quarter of '23 included a $0.9 million unfavorable foreign currency translation effect and an increase of $1.3 million of acquisition costs and a decrease of $0.8 million in indemnification asset reversals compared to the fourth quarter of '22. Excluding these items, SG&A expense increased $1.6 million or 3%, primarily due to increased selling-related costs.

2023 年第四季度，SG&A 費用佔營收的百分比增至 25.1%，去年同期為 24.5%。 2023 年第四季的 SG&A 費用為 5,980 萬美元，與 22 年第四季的 5,680 萬美元相比增加了 300 萬美元，即 5%。與 2022 年第四季相比，2023 年第四季包括 90 萬美元的不利外幣換算影響、採購成本增加 130 萬美元以及賠償資產沖銷減少 80 萬美元。不包括這些項目，SG&A 費用增加了 160 萬美元，即 3%，主要是由於銷售相關成本增加。

Our GAAP EPS increased 4% to $2.33 in the fourth quarter compared to $2.23 in the fourth quarter '22, and our adjusted EPS was up 3% to $2.41 from $2.33. Our fourth quarter '23 adjusted EPS of $2.41 exceeded the high end of our guidance range by $0.29 due to higher-than-anticipated aftermarket revenue, especially at our Industrial Processing and Flow Control segments. We had record operating cash flow and adjusted EBITDA in '23, which I will cover on the next slide. For the full year '23, gross margins increased 40 basis points to 43.5% compared to 43.1% in '22, due to higher margins achieved on our aftermarket products, especially at our Material Handling segment.

我們第四季的 GAAP 每股盈餘從 2022 年第四季的 2.23 美元成長了 4%，達到 2.33 美元，調整後的每股盈餘從 2.33 美元成長了 3%，達到 2.41 美元。由於售後市場收入高於預期，特別是在我們的工業加工和流量控制領域，我們的 23 年第四季度調整後每股收益為 2.41 美元，比我們指導範圍的上限高出了 0.29 美元。我們在 23 年實現了創紀錄的營運現金流和調整後的 EBITDA，我將在下一張投影片中介紹這一點。 23 年全年，毛利率比 22 年的 43.1% 成長了 40 個基點，達到 43.5%，這是由於我們的售後產品（尤其是物料搬運領域）實現了更高的利潤率。

Our percentage of parts and consumables revenue was 62% in '23 compared to 63% in '22. As a percentage of revenue, SG&A expenses decreased to 24.7% in '23 compared to 24.8% in '22. SG&A expenses were $236.3 million in '23, increasing $11.9 million or 5%, compared to $224 million in '22. Excluding a decrease of $1.2 million of expense from indemnification asset reversals, SG&A expenses were up $13.1 million or 6% compared to '22, primarily due to annual wage increases as well as incremental travel and consulting costs.

我們的零件和消耗品收入百分比在 23 年為 62%，而在 22 年為 63%。 SG&A 費用佔收入的百分比從 22 年的 24.8% 下降到 23 年的 24.7%。 2023 年的 SG&A 費用為 2.363 億美元，與 2022 年的 2.24 億美元相比，增加了 1,190 萬美元，即 5%。不包括因賠償資產沖銷而減少的 120 萬美元費用，SG&A 費用與 22 年相比增加了 1,310 萬美元，即 6%，這主要是由於年度工資上漲以及增量差旅和諮詢成本。

Our GAAP EPS was $9.90 in '23, down 4% compared to $10.35 in '22, which included $1.30 gain on the sale of the Chinese facility. Our adjusted EPS was a record $10.04, up 9% compared to $9.24 last year. Aside from being a record, our adjusted EPS also exceeded the 5-year target of $8 to $9 a share we set back at the beginning of 2019.

我們 23 年的 GAAP 每股收益為 9.90 美元，比 22 年的 10.35 美元下降了 4%，其中包括出售中國工廠帶來的 1.30 美元收益。調整後每股收益達到創紀錄的 10.04 美元，比去年的 9.24 美元增加 9%。除了創紀錄之外，我們調整後的每股盈餘也超過了我們在 2019 年初設定的每股 8 至 9 美元的 5 年目標。

In the fourth quarter of '23, adjusted EBITDA decreased 2% to $48.5 million or 20.3% of revenue compared to $49.5 million or 21.3% of revenue in the fourth quarter '22. Our Material Handling segment had a record adjusted EBITDA in the fourth quarter '23 and a notable 350-basis-point improvement in adjusted EBITDA margins compared to the prior year. This was offset by the performance in our other segments.

2023 年第四季，調整後 EBITDA 下降 2%，至 4,850 萬美元，佔營收的 20.3%，而 22 年第四季為 4,950 萬美元，佔營收的 21.3%。我們的物料搬運部門在 2023 年第四季的調整後 EBITDA 創歷史新高，與前一年相比，調整後 EBITDA 利潤率顯著提高了 350 個基點。這被我們其他部門的業績所抵銷。

As you can see on the slide, our annual adjusted EBITDA has grown significantly compared to 2019, up 58%. For the full year, adjusted EBITDA was a record $201.3 million and a record 21% of revenue in '23 compared to adjusted EBITDA of $189.1 million or 20.9% of revenue in '22.

正如您在幻燈片中看到的，我們的年度調整後 EBITDA 與 2019 年相比顯著增長，增長了 58%。就全年而言，調整後的 EBITDA 為創紀錄的 2.013 億美元，佔 23 年收入的 21%，而 22 年調整後的 EBITDA 為 1.891 億美元，佔收入的 20.9%。

Our Material Handling segment had record adjusted EBITDA of $53.6 million in '23 and a 210-basis-point improvement in adjusted EBITDA margins compared to the prior year. Our Flow Control segment also had record adjusted EBITDA of $105 million in '23 and a record 28.9% adjusted EBITDA margin.

2023 年，我們的物料搬運部門調整後 EBITDA 達到創紀錄的 5,360 萬美元，與前一年相比，調整後 EBITDA 利潤率提高了 210 個基點。我們的流量控制部門在 2023 年的調整後 EBITDA 達到創紀錄的 1.05 億美元，調整後 EBITDA 利潤率也創紀錄的 28.9%。

Adjusted EBITDA is an important metric for us. We set a 5-year target for adjusted EBITDA margin of 20% back at the beginning of 2019, and I'm happy to see that we've exceeded this target with a record 21% in '23. Our adjusted EBITDA margin has increased 300 basis points since 2019, due in large part to contributions from subsidiaries participating in our 80/20 program. This program provides revenue growth through a highly focused sales approach and profitability improvements as a result of dynamic pricing and streamlining product offerings. Once adopted, subsidiaries continue to follow the 80/20 program yielding incremental benefits the longer they have followed the tenets of the program. Average adjusted EBITDA margin for subsidiaries under the program have consistently exceeded our other subsidiaries. Over 50% of our revenue is from subsidiaries currently under or starting our 80/20 program.

調整後 EBITDA 對我們來說是一個重要指標。我們在 2019 年初設定了調整後 EBITDA 利潤率 20% 的 5 年目標，我很高興看到我們在 2023 年以創紀錄的 21% 超過了這一目標。自 2019 年以來，我們調整後的 EBITDA 利潤率增加了 300 個基點，這在很大程度上要歸功於參與我們 80/20 計畫的子公司的貢獻。該計劃透過高度集中的銷售方式實現收入成長，並透過動態定價和簡化產品供應提高獲利能力。一旦採用，子公司將繼續遵循 80/20 計劃，遵循該計劃原則的時間越長，就會產生增量效益。該計劃下子公司的平均調整後 EBITDA 利潤率一直超過我們的其他子公司。我們超過 50% 的收入來自目前正在執行或正在啟動 80/20 計畫的子公司。

One of the highlights for the fourth quarter and full year was our operating cash flow, which increased 68% to $59.2 million in the fourth quarter of '23 compared to $35.2 million in the fourth quarter '22. For the full year, operating cash flow was a record $165.5 million, up $62.9 million or 61% from '22. We also had strong free cash flow, increasing 114% to $49.5 million in the fourth quarter '23 and increasing 80% to $133.7 million for full year '23.

第四季和全年的亮點之一是我們的營運現金流，23 年第四季成長了 68%，達到 5,920 萬美元，而 22 年第四季為 3,520 萬美元。全年營運現金流達到創紀錄的 1.655 億美元，比 2020 年增加 6,290 萬美元，成長 61%。我們也擁有強勁的自由現金流，23 年第四季成長 114% 至 4,950 萬美元，23 年全年成長 80% 至 1.337 億美元。

We had several notable nonoperating uses of cash in the fourth quarter of '23. We repaid $22.1 million of debt and paid $9.8 million for capital expenditures and a $3.4 million dividend on our common stock. For the full year, we repaid $94 million of our debt and paid $31.9 million for capital expenditures, which included a $7.4 million for our facility project in China.

2023 年第四季我們有幾項值得注意的非經營性現金使用情況。我們償還了 2,210 萬美元的債務，支付了 980 萬美元的資本支出以及 340 萬美元的普通股股息。全年，我們償還了 9,400 萬美元的債務，並支付了 3,190 萬美元的資本支出，其中包括用於中國設施項目的 740 萬美元。

Let me turn to our EPS results for the quarter. In the fourth quarter of '23, GAAP earnings per share was $2.33 and adjusted EPS was $2.41. The $0.08 difference relates to $0.10 of acquisition costs, $0.05 of other income and $0.01 of relocation costs, both related to the facility project in China and $0.02 of restructuring costs. $0.05 of other income is associated with cash received for remaining assets of the old facility.

讓我談談本季的每股盈餘結果。 2023 年第四季度，GAAP 每股收益為 2.33 美元，調整後每股收益為 2.41 美元。 0.08 美元的差異涉及 0.10 美元的購買成本、0.05 美元的其他收入和 0.01 美元的搬遷成本，兩者均與中國的設施項目有關，以及 0.02 美元的重組成本。 0.05 美元的其他收入與舊設施剩餘資產收到的現金有關。

In the fourth quarter of '22, GAAP earnings per share was $2.23 and adjusted EPS was $2.33. The $0.10 difference relates to $0.09 of impairment and restructuring costs and $0.01 of acquisition costs. The increase of $0.08 in adjusted EPS in the fourth quarter '23 compared to the fourth quarter '22 consists of the following: $0.17 due to higher revenue, $0.09 due to a lower recurring tax rate and $0.05 due to lower interest expense. These increases were partially offset by $0.17 in higher operating expenses, $0.05 due to lower gross margin and $0.01 due to higher weighted average shares outstanding. The $0.09 impact from the lower recurring tax rate was due to a slightly higher tax rate in '22 related to the timing of certain incentive compensation payments.

2022 年第四季度，GAAP 每股收益為 2.23 美元，調整後每股收益為 2.33 美元。 0.10 美元的差異涉及 0.09 美元的減損和重組成本以及 0.01 美元的收購成本。與22 年第四季相比，23 年第四季調整後每股盈餘增加了0.08 美元，其中包括：由於收入增加而增加0.17 美元，由於經常性稅率降低而增加0.09 美元，以及由於利息費用減少而增加0.05 美元。這些增長被營運費用增加 0.17 美元、毛利率下降導致的 0.05 美元以及加權平均流通股增加導致的 0.01 美元部分抵消。較低的經常性稅率帶來 0.09 美元的影響是由於 22 年與某些激勵補償支付時間相關的稅率略高。

Collectively, including all the categories I just mentioned, was a favorable foreign currency translation effect of $0.03 in the fourth quarter '23 compared to the fourth quarter of last year due to the weakening of the U.S. dollar.

總的來說，包括我剛才提到的所有類別在內，由於美元疲軟，23 年第四季與去年第四季相比，有利的外幣換算效應為 0.03 美元。

Now turning to our EPS results for the full year on Slide 17. We reported GAAP earnings per share of $9.90 in '23 and our adjusted EPS was $10.04. The $0.14 difference relates to $0.10 of acquisition costs, $0.05 of other income and $0.05 of relocation costs, both related to the facility project in China and $0.04 of restructuring costs.

現在轉向幻燈片 17 上的全年每股收益結果。我們報告 23 年的 GAAP 每股收益為 9.90 美元，調整後的每股收益為 10.04 美元。 0.14 美元的差異涉及 0.10 美元的購買成本、0.05 美元的其他收入和 0.05 美元的搬遷成本，兩者均與中國的設施項目有關，以及 0.04 美元的重組成本。

We reported GAAP earnings per share of $10.35 in '22, and our adjusted EPS was $9.24. The $1.11 difference relates to $1.30 gain on sale related to one of our Chinese facilities, impairment and restructuring costs of $0.11 and acquisition-related costs of $0.08. The increase of $0.80 in adjusted EPS from '22 to '23 consists of the following: $1.41 from higher revenue, $0.26 from higher gross margins, $0.08 from a lower recurring tax rate and $0.01 from lower noncontrolling interest. These increases were partially offset by $0.86 from higher operating expenses, $0.07 from higher interest expense and $0.03 due to higher weighted average shares outstanding. Collectively, including all the categories I just mentioned, was an unfavorable foreign currency translation effect of $0.09 in '23 compared to '22.

我們公佈的 2022 年 GAAP 每股收益為 10.35 美元，調整後每股收益為 9.24 美元。 1.11 美元的差異與我們在中國的一項設施相關的 1.30 美元銷售收益、0.11 美元的減損和重組成本以及 0.08 美元的收購相關成本有關。從22 年到23 年，調整後每股收益增加了0.80 美元，其中包括：1.41 美元來自更高的收入，0.26 美元來自更高的毛利率，0.08 美元來自較低的經常性稅率，0.01 美元來自較低的非控制權益。這些增長被營運費用增加 0.86 美元、利息費用增加 0.07 美元和加權平均已發行股票增加 0.03 美元部分抵消。總的來說，包括我剛才提到的所有類別，與 22 年相比，23 年的不利外幣換算影響為 0.09 美元。

Now let's turn to our liquidity metrics on Slide 18. Our cash conversion days, calculated by taking days in receivables plus days in inventory and subtracting days in accounts payable, was 130 at the end of the fourth quarter '23, down from 138 at the end of the third quarter of '23, but up from 126 days at the end of '22. The sequential decrease in cash conversion days was principally driven by a lower number of days in inventory.

現在讓我們轉向投影片18 上的流動性指標。我們的現金轉換天數（透過應收帳款天數加上庫存天數並減去應付帳款天數計算）在2023 年第四季末為130 天，低於 2019 年第四季末的 138 天。23 年第三季末的天數，但高於 22 年末的 126 天。現金轉換天數較上季下降主要是由於庫存天數減少所致。

Working capital as a percentage of revenue decreased to 12.8% in the fourth quarter '23 compared to 15.4% in the third quarter '23 and 13.9% in the fourth quarter '22. Net debt, that is debt less cash, at the end of '23 was $4.4 million, the lowest level since 2017, representing a decrease of $117 million compared to net debt of $121.4 million at the end of '22.

營運資本佔收入的百分比在第四季'23下降至12.8%，而第三季'23為15.4%，第四季'22為13.9%。截至 2023 年末的淨債務（即債務減去現金）為 440 萬美元，為 2017 年以來的最低水平，與 22 年底的淨債務 1.214 億美元相比減少了 1.17 億美元。

Our interest expense increased 30% to $8.4 million in '23 compared to $6.5 million in '22 due to an increase in borrowing rates. Our leverage ratio, calculated as defined in our credit agreement, decreased to a very low 0.27 at the end of '23 compared to 0.74 at the end of '22. After our recent acquisitions, our borrowing capacity is $71 million available under our revolving credit facility and an additional $200 million of uncommitted borrowing capacity.

由於借款利率上升，我們的利息支出在 23 年增加了 30%，達到 840 萬美元，而 22 年為 650 萬美元。我們的槓桿率（按照信貸協議中的定義計算）從 2022 年底的 0.74 降至 23 年底的 0.27。在我們最近的收購之後，我們的循環信貸額度下的可用借款能力為 7,100 萬美元，另外還有 2 億美元的未承諾借款能力。

Now I'll review our guidance for '24. We expect to achieve records in a number of key metrics in '24, including revenue, cash flow and adjusted EBITDA. Our earnings performance in '24 will be affected by increased borrowing costs and noncash intangible amortization expense associated with our recently announced acquisitions. As we look beyond '24, the increased borrowing costs will continue to decrease as we have demonstrated our proven track record of paying down debt.

現在我將回顧 24 世紀的指導。我們預計 24 年的多項關鍵指標將創歷史新高，包括收入、現金流量和調整後 EBITDA。我們 24 年的獲利表現將受到與我們最近宣布的收購相關的借貸成本和非現金無形攤銷費用增加的影響。當我們展望 24 年後，增加的借貸成本將繼續下降，因為我們已經證明了我們償還債務的良好記錄。

For the full year, our revenue guidance is $1.04 billion to $1.065 billion, that is $1.04 billion to $1.065 billion, and our adjusted diluted EPS guidance is $9.75 to $10.05, which excludes $0.20 related to the amortization of acquired profit and inventory and backlog.

對於全年，我們的收入指引為10.4 億美元至10.65 億美元，即10.4 億美元至10.65 億美元，調整後的稀釋後每股收益指引為9.75 美元至10.05 美元，其中不包括與已獲利和庫存及積壓攤銷相關的0.20 美元。

Looking at our quarterly revenue and EPS performance for '24, we expect the first quarter will be the weakest quarter of the year due to the timing of capital projects, and the second half of the year will be stronger than the first half as a result. Our revenue guidance for the first quarter of '24 is $238 million to $246 million and our adjusted diluted EPS guidance for the first quarter is $1.90 to $2, which excludes $0.14 related to the amortization of acquired profit and inventory and backlog. I should caution here, there could be some variability in our quarterly results due to several factors, including the variability of order flow and the timing of capital shipments.

看看我們 24 年的季度營收和每股盈餘表現，由於資本項目的時機，我們預計第一季將是今年最弱的季度，因此下半年將強於上半年。我們對2024 年第一季的營收指引為2.38 億美元至2.46 億美元，我們對第一季度調整後稀釋後每股收益指引為1.90 美元至2 美元，其中不包括與已獲利攤銷以及庫存和積壓訂單相關的0.14 美元。我應該在這裡提醒大家，由於多種因素，包括訂單流的變化和資本發貨時間的變化，我們的季度業績可能會出現一些變化。

Guidance includes our acquisitions of Key Knife and KWS, which we completed in January. Aside from the impact of intangible amortization, there is a negative impact in the initial post-acquisition period associated with the amortization of profit in inventory and acquired backlog as these amounts are reflected in the income statement when the underlying order is fulfilled and inventory shipped to the customer. Our GAAP and adjusted EPS guidance include our initial estimates of purchase accounting adjustments, which are subject to change as we review and finalize the valuation work for these acquisitions.

指導包括我們在一月完成的對 Key Knife 和 KWS 的收購。除了無形攤銷的影響外，收購後的初始期間還存在與庫存和收購積壓的利潤攤銷相關的負面影響，因為這些金額在履行基礎訂單並將庫存運往損益表時反映在損益表中。客戶。我們公認的會計準則和調整後每股盈餘指引包括我們對收購會計調整的初步估計，隨著我們審查和最終確定這些收購的估值工作，這些估計可能會改變。

I'd like to give some additional metrics on our EPS guidance. We borrowed $230 million in January for the acquisitions of Key Knife and KWS. We'll work diligently throughout '24 to pay down that debt. As a result of the borrowings, we project our interest expense will increase by approximately $0.70 over '23. In addition, Key Knife and KWS transactions have significant amounts of recurring noncash intangible amortization expense, which is reducing our EPS guidance by approximately $0.50 in '24. While the noncash intangible amortization does have a significant impact on EPS, it will not impact our cash flow or EBITDA for '24.

我想就我們的每股盈餘指引提供一些額外的指標。我們一月借了 2.3 億美元用於收購 Key Knife 和 KWS。我們將在整個 24 年努力償還債務。由於借款，我們預計利息支出將比 2023 年增加約 0.70 美元。此外，Key Knife 和 KWS 交易有大量經常性非現金無形攤銷費用，這使我們 2024 年的 EPS 指導減少了約 0.50 美元。雖然非現金無形攤銷確實對每股盈餘產生重大影響，但它不會影響我們 24 年的現金流量或 EBITDA。

'24 guidance includes a favorable foreign currency translation impact of approximately $11.6 million on revenue and $0.15 on adjusted EPS due to the weakening of the U.S. dollar. We anticipate gross margins for '24 will be approximately 43.5% to 44.5%. As a percentage of revenue, we anticipate SG&A will be approximately 25.5% to 26.2%, and R&D expense will be approximately 1.3% to 1.4% of revenue in '24.

'24 的指導包括由於美元疲軟而對收入產生約 1160 萬美元的有利外幣換算影響以及對調整後每股收益產生 0.15 美元的有利影響。我們預計 24 年毛利率約為 43.5% 至 44.5%。作為收入的百分比，我們預計 2024 年銷售及管理費用將約為收入的 25.5% 至 26.2%，研發費用將約為收入的 1.3% 至 1.4%。

We anticipate net interest expense of approximately $18 million to $18.5 million, and we expect our recurring tax rate will be approximately 26.5% to 27.5% in '24. We expect depreciation and amortization will be approximately $46 million to $48 million in '24, and we anticipate CapEx spending in '24 will be approximately $29 million to $31 million, which includes $2 million related to the final payments on our facility project in China.

我們預計淨利息支出約為 1,800 萬至 1,850 萬美元，我們預計 24 年的經常性稅率約為 26.5% 至 27.5%。我們預計2024 年的折舊和攤銷將約為4,600 萬至4,800 萬美元，我們預計24 年的資本支出將約為2,900 萬至3,100 萬美元，其中包括與我們在中國的設施項目的最終付款相關的200 萬美元。

Approximately 15% of the CapEx spending in '24 relates to final payments for CapEx projects approved in '23. We were a little bit above our normal CapEx as a percent of revenue metric as we continue to invest in automation projects and upgrades to our manufacturing capabilities.

'24 年資本支出支出的大約 15% 與 '23 年批准的資本支出項目的最終付款有關。隨著我們繼續投資自動化項目和升級我們的製造能力，我們的資本支出佔收入指標的百分比略高於正常水平。

That concludes my review of the financials, and I will now turn the call back over to Victor for our Q&A session. Victor?

我對財務狀況的回顧到此結束，現在我將把電話轉回維克多進行問答環節。勝利者？

(Operator Instructions) Our first question will come from the line of Gary Prestopino from Barrington Research.

（操作員說明）我們的第一個問題將來自 Barrington Research 的 Gary Prestopino。

Just want to go over some of the puts and takes on your outlook in 2024. What you're basically saying is that the capital part of your business will be sluggish in the first half, and then you're anticipating that to come back in the second half. Is that a good read on...

只是想回顧一下您對 2024 年前景的一些看跌期權和看跌期權。您基本上是說，您的業務的資本部分將在上半年表現疲軟，然後您預計會在 2024 年捲土重來。下半場。讀起來好不好...

Yes, Gary. Yes, that's a good read. We expect capital activity to pick up here in the second quarter and be stronger in the back half.

是的，加里。是的，這是一本好書。我們預計資本活動將在第二季回升，並在下半年更加強勁。

And what's driving that thought process? Or are you seeing any empirical evidence in terms of orders or anything that back half of the year, we're going to see that pick up?

是什麼推動了這個思考過程？或者您是否看到任何訂單方面的經驗證據或任何下半年我們將看到訂單回升的證據？

Yes. I think there's a -- I hear there's a fairly strong kind of activity, quoting these projects tend to be -- take a little longer to develop. And so there's a lot of back and forth between our engineers and our customers. And so there's a fair amount of discussion that's going on. I would just say the time from quote to booking the order is a little longer than normal. And I think that's essentially because of the kind of the general economic uncertainties out there. People are really trying to guess when the Fed is going to start reducing rates. There's a lot of pent-up demand in many of our markets. And so our customers are trying to get ready for that. And it's really just a bit of a guessing game on how quickly they pull the trigger to start making investments to get ready for what they expect to be an increase in demand.

是的。我認為有一種——我聽說有一種相當強烈的活動，引用這些項目往往——需要更長的時間來開發。因此，我們的工程師和客戶之間存在著大量的來回交流。因此，正在進行大量的討論。我只想說從報價到預訂訂單的時間比正常情況要長一些。我認為這主要是因為總體經濟的不確定性。人們確實在猜測聯準會何時開始降息。我們的許多市場都有大量被壓抑的需求。因此，我們的客戶正在努力為此做好準備。這實際上只是一個猜謎遊戲，他們以多快的速度開始進行投資，為他們預期的需求成長做好準備。

So a fair amount of a lot of project activity, a lot of quoting, a lot going on. It's just that people are a little slower to actually book the order as they're trying to gauge kind of the pace of the recovery.

因此，有大量的專案活動、大量的引用、大量的進展。只是人們實際預訂訂單的速度有點慢，因為他們試圖衡量復甦的速度。

Right. As I look at your guidance, I mean, the 2 acquisitions, I think what did they add about on an annualized basis, $110 million of sales. Is that about right if you get a full year run rate?

正確的。當我查看您的指導時，我的意思是，這兩次收購，我想它們按年化計算增加了什麼，1.1 億美元的銷售額。如果你得到全年運行率，這對嗎？

Yes. I would -- I think that's a decent marker, Gary. The caveat to that, as I mentioned, the KWS transaction didn't close until 3 weeks in the first quarter here.

是的。我會——我認為這是一個不錯的標記，加里。需要注意的是，正如我所提到的，KWS 交易直到第一季 3 週後才完成。

Right. No, I understand that, puts and takes there. But I mean, if you add that number into what you actually did, looking at rather de minimis growth in sales this year, and I just want to make sure I'm understanding this right, that that's really more or less a function on the capital side of the business?

正確的。不，我明白，放在那裡。但我的意思是，如果你把這個數字加到你實際做的事情中，看看今年銷售額的微乎其微的增長，我只是想確保我理解正確，這實際上或多或少是一個函數業務的資本方面？

Yes, yes. That's -- that's correct. Yes, organically, when we take out the $11.6 million of FX and revenue, it would be down about 2% in revenue, organic.

是的是的。那是——那是正確的。是的，從有機角度來看，當我們除去 1,160 萬美元的外匯和收入時，有機收入將下降約 2%。

Okay. And I'll just say real quick.

好的。我只想說得很快。

Sorry, go ahead, Jeff. I'm sorry.

抱歉，請繼續，傑夫。對不起。

I was just going to say the challenge we have, and this is -- it's more challenging, obviously, at the first of the year and kind of forecasting what's going to happen then as the quarters progress. But I would say this year, it's particularly challenging because there is a lot of uncertainty, right? Everybody is trying -- even the Fed from -- it seems like from week to week, their position on the economy changes. And so for us, as you know, Gary, we're a fairly conservative organization and certainly, the beginning of the year, we tried to be pretty cautious. And we're just trying to get a little -- to get better visibility on kind of the timing of some of this activity. And it's just challenging when you're coming out of a slower period.

我只是想說我們面臨的挑戰，顯然，在今年年初，隨著季度的進展，預測將會發生什麼，這顯然更具挑戰性。但我想說今年特別具有挑戰性，因為有很多不確定性，對嗎？每個人都在努力——甚至包括聯準會——似乎每週他們對經濟的立場都在改變。因此，對我們來說，正如你所知，加里，我們是一個相當保守的組織，當然，在今年年初，我們試圖非常謹慎。我們只是想更了解某些活動的時間安排。當你走出緩慢時期時，這只是一個挑戰。

No, I get that. I just wanted to make sure. I was confirming it. And then just some of the other figures that you guys talked about, especially Mike, you said $18 million to $18.5 million of net interest expense for this year?

不，我明白了。我只是想確定一下。我正在確認這一點。然後是你們談到的其他一些數字，特別是麥克，你們說今年的淨利息支出為 1800 萬至 1850 萬美元？

Yes. Well, just interest expense, purely interest expense.

是的。嗯，只是利息支出，純粹的利息支出。

Okay. So that's $18 million to $18.5 million of interest. And then you said D&A is going to run to $46 million to $48 million, right?

好的。這就是 1800 萬至 1850 萬美元的利息。然後你說 D&A 將達到 4600 萬至 4800 萬美元，對吧？

Yes, that's correct, Gary.

是的，沒錯，加里。

And what was your CapEx this year? I didn't see that in the -- in any of the releases, or maybe I missed it. Did you mention that?

今年您的資本支出是多少？我在任何版本中都沒有看到這一點，或者也許我錯過了。你有提到嗎？

Yes, 1 second. We're at essentially $32 million.

是的，1秒。我們的資金約為 3200 萬美元。

And our next question will come from the line of Kurt Yinger from D.A. Davidson.

我們的下一個問題將來自 D.A. 的 Kurt Yiner。戴維森。

Great. I just want to follow up on one of the prior questions in terms of the strengthening in the back half of the year and -- is that a situation where you feel like you need to see improving capital equipment bookings over the next couple of quarters in order for that kind of sales improvement to materialize? Or based on the bookings activity that you've seen in Q4 and what you're expecting for Q1, any further improvements could actually be a source of upside to what you're kind of assuming for the full year? How should we kind of think about those booking trends? And what that means for the back half performance?

偉大的。我只想跟進有關今年下半年的加強方面的先前問題之一 - 在這種情況下，您認為您需要在接下來的幾個季度看到資本設備預訂的改善為了實現這種銷售改善？或者根據您在第四季度看到的預訂活動以及您對第一季的預期，任何進一步的改進實際上都可能成為您對全年的假設的上行來源？我們應該如何看待這些預訂趨勢？這對於後半場的表現意味著什麼？

Yes. You are right on your first assumption, Kurt. It really is predicated on us seeing strengthening in the capital bookings as we go forward.

是的。你的第一個假設是正確的，庫爾特。這實際上是基於我們在前進過程中看到資本預訂的加強。

Okay. Got it. And then one of kind of the bright spots this year, I think, has been parts and consumables. And it's had a steady performance despite some choppiness in some of the end markets, containerboard being kind of a big one.

好的。知道了。我認為，今年的亮點之一是零件和消耗品。儘管一些終端市場出現一些波動，但它的表現仍然穩定，其中箱板紙是一個很大的市場。

I mean we haven't yet seen a lot of those trends really improved very much. Is there any concern that that could catch up and start to weigh on parts and consumables going forward? Or do you expect the solid performance in 2023 sets you up pretty well for 2024 as well?

我的意思是，我們還沒有看到很多趨勢真正得到很大改善。是否有人擔心這可能會趕上並開始對未來的零件和消耗品造成壓力？還是您預期 2023 年的穩健表現也會為 2024 年做好準備？

It's interesting. When you think of our parts, of course, it's through the -- all of our businesses have it. But in particular, we're expecting a big recovery on the containerboard side this year. So they think containerboard was probably flat last year, and it was down for the first time, demand, I'm talking about was down for the first time in a very long time in '22. But they're forecasting containerboard demand increased 4.3% this year. Tissue to be up 4% this year and then even '25, 3.8% for tissue and 3.7% containerboard. So we're really expecting to see a recovery on that side of the business.

這真有趣。當然，當您想到我們的零件時，我們所有的業務都擁有它。但特別是，我們預計今年箱板紙方面將大幅復甦。因此，他們認為箱板紙去年可能持平，這是第一次下降，我所說的需求在 22 年很長一段時間以來首次下降。但他們預測今年箱板紙需求將成長 4.3%。生活用紙今年將上漲 4%，甚至 25 年也將上漲，生活用紙上漲 3.8%，箱板紙上漲 3.7%。因此，我們確實希望看到這方面的業務復甦。

And I would say also on the wood processing side, things have slowed down. Of course, housing starts were, I think, about 1.46 last month, but permits were about 1.5. So we are starting to see some improvement there. And certainly, if interest rates start to come down, there's tremendous pent-up demand for housing. And we have a lot of activity going on with our customers, a lot of discussions about projects. They're really trying to get ready for what they think will be a pretty robust improvement in the market demand once interest rates start to decline. So I think it's our belief that the parts business actually could continue to strengthen throughout the year, assuming things go as most economists are currently forecasting.

我想說的是，在木材加工方面，事情也已經放緩。當然，我認為上個月的新屋開工率約為 1.46，但許可證約為 1.5。所以我們開始看到一些改進。當然，如果利率開始下降，就會出現巨大的被壓抑的房屋需求。我們與客戶進行了許多活動，進行了許多有關專案的討論。他們確實在努力做好準備，他們認為一旦利率開始下降，市場需求將會出現相當強勁的改善。因此，我認為我們相信，假設事情按照大多數經濟學家目前的預測發展，零件業務實際上可以在全年繼續增強。

Right. Okay. And I guess sticking with the wood piece, I mean there was a lot of capacity added. And to your point, I think there's a lot of optimism that demand is going to continue to improve. But at the same time, some of that new capacity is being absorbed. I guess as you think about your capital equipment, how important is new greenfield facilities and new capacity versus just better utilization at existing facilities in terms of the overall kind of sales and demand picture for wood processing?

正確的。好的。我想堅持使用木塊，我的意思是增加了很多容量。就您的觀點而言，我認為人們對需求將繼續改善持樂觀態度。但同時，一些新產能正在被吸收。我想當您考慮您的資本設備時，就木材加工的整體銷售和需求情況而言，新的新建設施和新產能與現有設施的更好利用有多重要？

Yes. I think there's both. And of course, because we're global, and we have an extremely high market share, globally, it varies. So if you look at North America, it may be more just upgrading tired equipment. The average age of a lot of the equipment out there is pretty old. And so there's just upgrading.

是的。我認為兩者都有。當然，因為我們是全球性的，而且我們在全球範圍內擁有極高的市場份額，所以情況會有所不同。所以如果你看看北美，可能更多的只是升級疲憊的設備。許多設備的平均年齡相當老舊。所以只有升級。

But then there's a lot of new greenfields going on in Asia, in particular. Our stranding guys are very busy in Asia. A lot of projects, a lot of activity. We booked another order in China a few weeks ago. And then you've got the situation in Russia. A lot of product came out of Russia. And of course, that's got to be replaced now. So we're seeing activity in Europe and in particularly, in Scandinavia area as they start to invest to offset the lost supply out of Russia.

但特別是在亞洲，還有很多新的開發案正在開發中。我們的滯留人員在亞洲非常忙碌。很多項目，很多活動。幾週前我們在中國預訂了另一個訂單。然後就是俄羅斯的情況。許多產品來自俄羅斯。當然，現在必須更換。因此，我們看到歐洲，特別是斯堪的納維亞地區的活動，因為他們開始投資以抵消俄羅斯供應的損失。

So the wood side, it really depends on the region you're looking at. But I would say the activity level right now is as high as it was before the pandemic for us with the tired equipment out there. And frankly, more and more, in particular, on the stranding side, more and more products using stranded material. That's held up extremely well for us, and demand still looks quite good.

因此，木材方面，這實際上取決於您所關注的區域。但我想說，對我們來說，現在的活動水平與大流行之前一樣高，因為那裡的設備已經很疲憊了。坦白說，越來越多的產品，特別是在絞合方面，使用絞合材料的產品越來越多。這對我們來說非常好，需求看起來仍然相當不錯。

Got it. And then just my last one, I guess, bigger picture. You're coming off 2 of kind of your strongest organic growth years in '21 and '22. This past year was still very solid as well. I mean where do you think the business is from kind of a cyclical standpoint entering '24? And I guess is there anything that's changed in terms of how you think about the organic growth profile of the business longer term relative to what you've kind of outlined in the past?

知道了。然後是我的最後一個，我想，更大的圖像。您將在 21 年和 22 年經歷有機成長最強的 2 年。過去的一年也仍然非常穩健。我的意思是，從進入 24 世紀的周期性角度來看，您認為該業務處於什麼位置？我想，相對於您過去概述的內容，您對業務長期有機成長狀況的看法是否有任何變化？

Well, we had -- as you know, we had tremendous organic growth from, say, kind of '18, '19 on. It was -- we were -- I think 7.5%?

嗯，正如你所知，我們從 18 年、19 年開始實現了巨大的有機成長。我想是──我們是──7.5%？

Yes.

是的。

About 7.5% organic growth for several years, which is substantially higher than global GDP. So we would never budget and assume that was going to be the case, say, for the next 5 years.

連續幾年有機成長約7.5%，大幅高於全球GDP。因此，我們永遠不會制定預算並假設未來五年都會出現這種情況。

But I would tell you, when I look at our 3 sectors, the Material Handling side, I think, is in a good position. The money that's going to be spent on both the infrastructure bill and the CHIPS Act is just starting to flow. And so we think that our Material Handling sector will benefit from that.

但我想告訴你，當我審視我們的 3 個部門時，我認為物料搬運方面處於有利位置。用於基礎設施法案和 CHIPS 法案的資金才剛開始流動。因此，我們認為我們的物料搬運行業將從中受益。

The billing side has been quite strong in Europe and in the U.S. from a recycling standpoint. On the paper side, we just talked about the fact that operating rates from operating rates really bottomed out, we think, in '23, globally, running at about 79%, is forecasted to get back into the mid-80s over the next couple of years. So we expect kind of some recovery growth in that market.

從回收的角度來看，歐洲和美國的計費方面相當強勁。在紙面方面，我們剛剛談到了這樣一個事實，即開工率確實觸底，我們認為，在 23 年，全球開工率約為 79%，預計在接下來的幾年內將回到 80 年代中期年。因此，我們預計該市場會出現一些復甦成長。

And the Flow Control has always been very steady. It just is a very stable, steady business. The guys always do a great job in finding new end markets. Our biggest market -- right, our biggest sector right now is our industrial sector. It's bigger than all of our others. So I mean there's a lot of industrial markets out there that we're taking our products to.

而且流量控制一直很穩定。這是一項非常穩定的業務。這些人在尋找新的終端市場方面總是做得很好。我們最大的市場—對，我們現在最大的部門是我們的產業部門。它比我們其他的都大。所以我的意思是，我們正在將我們的產品推向許多工業市場。

So we think the next few years, assuming that something doesn't happen, (inaudible) event doesn't happen, we think that growth actually should be pretty solid in the next few years. But we've got to see that start to materialize, I think, this year, as the year progresses.

因此，我們認為未來幾年，假設某些事情沒有發生，（聽不清楚）事件沒有發生，我們認為未來幾年的成長其實應該相當穩健。但我認為，隨著時間的推移，我們必須看到這一點在今年開始實現。

Our next question will come from the line of Larry De Maria from William Blair.

我們的下一個問題將來自威廉布萊爾的拉里·德·瑪麗亞。

Just a few quick sort of clarifications. I know it's not unusual, but it was a little bit bigger for the second half than first half. Can you give us kind of order of magnitude second half versus first half? And secondly, maybe you could talk to the financial flexibilities you have after the recent deals. And just the M&A pipeline if we're out of the market for a while or if it's still relatively healthy?

只是一些快速的澄清。我知道這並不罕見，但下半場的情況比上半場大一些。您能否告訴我們下半年與上半年的數量級？其次，也許你可以談談最近的交易後你所擁有的財務彈性。如果我們退出市場一段時間或仍然相對健康，那麼只有併購管道嗎？

On the split first half, second half, Larry, I'd say there's about a 5% delta there.

拉里，在上半場和下半場的比賽中，我想說那裡大約有 5% 的增量。

Yes.

是的。

And then on the -- I would say on the activity side, we're still quite busy. There's still -- our corporate development people, I think have said that there's still a tremendous amount of deal flow out there. Our balance sheet, even though we took on a little bit of debt for these most recent acquisitions, our balance sheet is still pretty strong. We think we have good capacity left. So we're full speed ahead. We won't be slowing down even though we just did a couple of transactions.

然後在活動方面，我想說，我們仍然很忙。我認為我們的企業發展人員仍然說過，那裡仍然有大量的交易流。我們的資產負債表，儘管我們為最近的收購承擔了一些債務，但我們的資產負債表仍然相當強勁。我們認為我們還有足夠的產能。所以我們正在全速前進。即使我們只做了幾筆交易，我們也不會放慢速度。

As you know, we're always looking for opportunities that are good strategic fits at a fair value, and that can be challenging from time to time. But our corporate people were very busy, and we've got the capacity. And frankly, our current debt agreements were put in place when we were smaller. So if we needed to free up those at higher levels, we could easily do that, and we'll do that if needed as we go out and pursue opportunities. So we're full speed ahead on looking at opportunities.

如您所知，我們一直在尋找具有良好策略契合度且價值合理的機會，但有時可能具有挑戰性。但我們公司的人員非常忙碌，我們有能力。坦白說，我們目前的債務協議是在我們規模較小時制定的。因此，如果我們需要釋放更高級別的人員，我們可以輕鬆做到這一點，並且在我們出去尋找機會時如果需要的話我們會這樣做。因此，我們正全速尋找機會。

Okay. Sounds good. And then now shifting gears a little bit. I know you obviously talked about this a bit already but curious about kind of the order expectation from here and how we've done so far. It's a little bit odd to talk about, I don't know, the strength in capital equipment term it will get orders restored in 4Q and solid demand, but there's some certainty keeping the outlook down seems overly conservative.

好的。聽起來不錯。然後現在稍微改一下。我知道您顯然已經談論過這一點，但對這裡的訂單期望以及我們迄今為止的表現感到好奇。談論資本設備的實力有點奇怪，我不知道，它將在第四季度恢復訂單和穩定的需求，但有一些確定性使前景保持低迷似乎過於保守。

So can you discuss why this isn't overly conservative, considering the comments and the print you just did? Maybe what areas of the end markets are showing you the weakness and order expectations from here, which -- if they could stay flattish or not?

那麼，考慮到您剛剛發表的評論和印刷品，您能否討論為什麼這不是過於保守？也許終端市場的哪些領域向您展示了疲軟和訂單預期，如果它們能夠保持持平的話？

Yes. I would say, Gary.

是的。我想說，加里。

I pointed to Mike and said you can handle this one, Mike.

我指著麥克說，麥克，你能處理好這個。

The biggest thing that we're looking at is capital, capital order flow, and seeing that we get some traction and get some firmness there. That's the biggest thing that we're waiting to get some clarity on.

我們關注的最重要的事情是資本、資本訂單流，並看到我們在那裡獲得了一些牽引力並獲得了一些穩固性。這是我們等待澄清的最重要的事情。

Our guys are very busy. As I mentioned, project discussions and activities are actually pretty strong. But the time to close is lengthened. I think as our customers are, again, trying to gauge how quickly rates come down and demand starts to pick up. And so because those discussions are taking longer than normal, it obviously introduces added degree of cost on our part.

我們的人很忙。正如我所提到的，專案討論和活動實際上非常活躍。但關閉的時間延長了。我認為，我們的客戶再次試圖衡量利率下降和需求開始回升的速度。因此，由於這些討論花費的時間比平時要長，這顯然會增加我們的成本。

And anything on the order expectations from here? And have we done so far this year? I assume, obviously, capital has been slow.

對這裡的訂單有什麼期望嗎？今年到目前為止我們做到了嗎？顯然，我認為資本成長緩慢。

Yes. I mean I think right now, things are as expected. Right now as we look through last week, demand is kind of on track with where we would expect it to be.

是的。我的意思是我認為現在一切都如預期的那樣。現在，當我們回顧上週時，需求在某種程度上符合我們的預期。

Okay. So is it safe to say that given the comments on the pipeline and the time to close, it's a little longer, I mean those potential orders don't go away, right? They either hit in the second half or they get pushed out to next year. Is that fair to say? Or ultimately...

好的。那麼可以肯定地說，考慮到對管道的評論和關閉時間，它有點長，我的意思是那些潛在的訂單不會消失，對吧？他們要么在下半場發揮出色，要么被推遲到明年。這麼說公平嗎？或者最終...

Exactly. It's very, very seldom that a project gets canceled. We had one canceled, a big project canceled I think back at '22, I think it was. We had a project canceled. But it's very unusual for that. You're exactly right. They typically just get -- they get delayed.

確切地。項目被取消的情況非常非常少。我們取消了一個項目，一個大項目取消了，我想是在 22 年的時候，我想確實是這樣。我們取消了一個項目。但這是很不尋常的。你說得完全正確。他們通常只是——他們被延誤了。

These are -- these big projects are quite lengthy from a board review standpoint anyway. And so once they get to that point, they normally don't disappear forever. It's just a question of timing on them. And so -- and that's what has introduced the level of caution that we have is we just don't know where the timing is going to be next quarter or third quarter or fourth quarter, the customers just aren't quite sure yet.

無論如何，從董事會審查的角度來看，這些大型項目相當漫長。因此，一旦達到這一點，它們通常不會永遠消失。這只是他們的時間問題。因此，這就是我們所持謹慎態度的原因，我們只是不知道下個季度、第三季或第四季的時間安排，客戶還不太確定。

Okay. Fair enough. Last quick question. Parts and consumables and flow and industrial process, given the mothballing that we've seen, is it like -- does it matter it's just around overall volume and parts and consumables? Are you more or less guided up, whereas capital is guided down? Is that a fair way to think about it?

好的。很公平。最後一個快速問題。考慮到我們所看到的封存情況，零件和消耗品以及流程和工業流程是否只是圍繞總體積、零件和消耗品重要？你或多或少被引導向上，而資本則被引導向下？這是一個公平的思考方式嗎？

Yes. I mean what happens is, as you know, we operate in almost every paper mill in the world. And I know some people get hung up when they hear about a closure. And we never like to hear about closures, but I just mentioned overall demand is forecasted.

是的。我的意思是，正如您所知，我們在世界上幾乎每家造紙廠都有業務。我知道有些人聽到關閉的訊息後會掛斷電話。我們從來不喜歡聽到關閉的消息，但我剛剛提到了總體需求是預測的。

If you look at total paper demand, in '24, globally, it's supposed to be up 3.3%, and it grows every year. So what happens is they just shift that to other more efficient mills, and we're there, too. So we just picked the business up in 1 mill versus the other. And so we don't get nearly as hung up on a mill closure announcement here or there. As long as overall demand continues to grow, we're going to be there to get our fair share of that.

如果你看一下 24 年全球紙張總需求，預計會成長 3.3%，而且每年都在成長。因此，他們只是將其轉移到其他更有效率的工廠，而我們也在那裡。因此，我們只是選擇了一家工廠的業務，而不是另一家工廠。因此，我們不會對工廠關閉的公告那麼著迷。只要整體需求持續成長，我們就會在那裡獲得公平的份額。

(Operator Instructions) Our next question will come from the line of Walter Liptak from Seaport Research.

（操作員說明）我們的下一個問題將來自 Seaport Research 的 Walter Liptak。

Good end to your year. Wanted to try one on the Flow Control bookings, the plus 8.4%. I wonder if you could just give us some incremental color. Was that parts related? Was that capital projects? Maybe regionally, where the orders were coming from?

為你的一年畫上一個美好的句點。想嘗試流量控制預訂，加8.4%。我想知道你是否可以給我們一些增量的顏色。那部分相關嗎？那是資本項目嗎？也許從區域來看，訂單來自哪裡？

I'm looking for my schedule here on that. It was really -- we had -- it was both in parts and capital, but capital and Flow Control was quite strong in the fourth quarter. Actually, in December, we closed some nice projects. So I'd say that bookings beat was really led by capital and flow control.

我正在尋找我的日程安排。這確實是 - 我們有 - 它既包括零件也包括資本，但第四季度的資本和流量控制相當強勁。事實上，在 12 月份，我們關閉了一些不錯的項目。所以我想說，預訂量的成長其實是由資本和流量控制主導的。

Okay. Great. And is -- you think that's the start of a trend? Is there some follow-through? People are drawing down inventory, I think, and being cautious into the end of the year. But it sounds like its buck the trend a little bit.

好的。偉大的。您認為這是趨勢的開始嗎？有後續嗎？我認為人們正在減少庫存，並且在年底前保持謹慎。但聽起來有點逆潮流而行。

Yes, it did, Walt, but I happened to know that we had our -- the projects that came through those capital projects, they were on our board for '24. So the orders were a little bit early.

是的，確實如此，沃爾特，但我碰巧知道我們有我們的——透過這些資本項目實現的項目，它們在 24 年就加入了我們的董事會。所以訂單有點早了。

Okay. Okay. That helps. And then I wonder, as you kind of alluded to this in some of the other questions. Last year, this time, you were getting that big 42-mile conveyor project in Material Handling. And that probably has already shipped now. That's probably already through your process. But I wonder if it's something you've got more in the funnel that are some of these bigger Material Handling projects. Is that right?

好的。好的。這有幫助。然後我想知道，正如您在其他一些問題中提到的那樣。去年的這個時候，您獲得了物料搬運領域的 42 英里大型輸送機專案。現在可能已經出貨了。這可能已經完成了您的流程。但我想知道您的漏斗中是否有更多的東西是一些更大的物料搬運項目。是對的嗎？

Well, on the large project that we booked in the first quarter, Walt, you're correct, most of that shift of that $12 million, there's still, I think, about $2 million to go. And a good chunk of that actually went in the fourth quarter, which is why you saw their revenue and other metrics margin and EBITDA were so good because we had excellent -- on the EBITDA front, we had excellent operating leverage there.

嗯，關於我們在第一季預訂的大型項目，Walt，你是對的，我認為 1200 萬美元的大部分轉移，還有大約 200 萬美元需要支付。其中很大一部分實際上發生在第四季度，這就是為什麼你看到他們的收入和其他指標利潤率以及 EBITDA 如此出色，因為我們在 EBITDA 方面擁有出色的營運槓桿。

Okay. That's great. And it sounds like you've got -- there's a potential for some more of these big conveyor projects in the funnel?

好的。那太棒了。聽起來您已經—漏斗中是否有可能開展更多此類大型輸送機專案？

Yes. That was the second longest in the world. So we don't -- we wouldn't expect -- although there are discussions for projects, we wouldn't expect anything soon of that magnitude. That's a pretty rare project. But generally speaking, the group has been strengthening over the last, I would say, 1.5 years. And the prospects -- if housing picks up, certainly, that's going to help them. The CHIPS Act is really a very large construction act. If you look at it, it's mainly building plants. So that's good for them as well as infrastructure.

是的。這是世界上第二長的。因此，我們不會——我們不會期望——儘管正在討論項目，但我們不會期望很快就會出現如此規模的事情。這是一個相當罕見的項目。但總的來說，在過去 1.5 年裡，該集團一直在加強。前景－如果房地產市場好轉，當然會對他們有幫助。 CHIPS 法案確實是一項非常龐大的建設法案。看了一下，主要是建造植物。所以這對他們和基礎設施都有好處。

And then the recycling side, the baler business in the U.S. continues to be very strong and as well as Europe and other parts of the world. So all other segments have -- I think, have had nice steady demand, and we expect that they'll continue to be in good shape throughout this year.

然後是回收方面，美國的打包機業務仍然非常強勁，歐洲和世界其他地區也是如此。因此，我認為所有其他細分市場都有良好穩定的需求，我們預計它們今年將繼續保持良好狀態。

Okay. Great. And maybe I'll try 1 or 2 on the 80/20. Congratulations with the profit improvement that you guys have been seeing. And I thought that you might be further along than 50% of the plants started. I wonder if you could just refresh us how many P&Ls do you have? How many P&Ls -- half of it, that half of the P&L, I guess, have started. But how many P&Ls do you have? And for 2024, do you have more that will be starting the 80/20 process?

好的。偉大的。也許我會在 80/20 上嘗試 1 或 2。祝賀你們所看到的利潤改善。我認為您可能比 50% 的工廠起步更進一步。我想知道您是否可以向我們介紹一下您有多少損益表？有多少損益——一半，我猜，損益的一半已經開始了。但你有多少損益表？對於 2024 年，您是否還有更多將啟動 80/20 流程的內容？

Yes, one -- the -- so we have around, I think, about 24 kind of companies with P&Ls, and I would say kind of half of them are in it. The thing that's impacting it now, which, frankly, is a little frustrating for us is that you really can't have an ERP project going on at the same time as 80/20 because they're both so significant in scope and the resources that they require.

是的，一個——所以我認為大約有 24 家公司有損益表，我想說其中一半都在其中。現在影響它的事情，坦白說，讓我們有點沮喪的是，你真的不能讓 ERP 專案與 80/20 同時進行，因為它們的範圍和資源都非常重要他們需要的。

And so as it turns out, what's controlling our -- some of our 80/20 implementation now is companies that are either in or getting ready to start ERP projects. It just as luck would have it, we've got companies that are end of life with the current ERP systems, where we were forced to implement new ones, and that really has delayed implementing 80/20 in some of those businesses. And so that's been something we've been wrestling with, I would say, over the last kind of 18 months trying to decide, okay, which ones can we delay the ERP project until 80/20 is finished, and which ones are we going to have to delay 80/20. And so that's really controlling some of the pace.

事實證明，現在控制我們的——我們的一些 80/20 實施是那些正在或準備啟動 ERP 專案的公司。幸運的是，我們有些公司目前的 ERP 系統已經報廢，我們被迫實施新的系統，這確實推遲了其中一些企業實施 80/20 的時間。所以這是我們一直在努力解決的問題，我想說，在過去的 18 個月裡，我們試圖決定哪些項目我們可以推遲到 80/20 完成，哪些項目我們要進行必須推遲80/20。所以這確實控制了一些節奏。

The other thing, of course, is we continue to build up our internal team, the expertise, but it also has some limitations. Just the available expertise to implement projects. So we still have -- I've been saying for some time, I think we still have probably another, say, 3 years, 4 years for this to run out, and that's, of course, not including new acquisitions. Every time you acquire a new company, then you take on a new future project. And so we have a couple of new future projects, which we just added this year. So it will never stop. But I think -- we will, I think, in 3 to 4 years, have almost all of our businesses that we currently have kind of coming out of the back end of the process.

當然，另一件事是我們繼續建立我們的內部團隊和專業知識，但它也有一些限制。只是可用的專業知識來實施專案。所以我們仍然——我已經說過一段時間了，我認為我們可能還有另外，比如說，3年、4年的時間來完成這個任務，當然，這不包括新的收購。每次你收購一家新公司，你就會承擔一個新的未來專案。因此，我們有幾個新的未來項目，這是我們今年剛剛添加的。所以它永遠不會停止。但我認為，我認為，在三到四年內，我們目前擁有的幾乎所有業務都會從流程的後端出來。

Okay. Good. Okay. Good. Maybe one last one for me, just switching gears to the pricing environment. And in 2020 -- I don't remember that there was ever any issues because your niche markets with selling price. But are you taking up prices again? Are you still seeing inflation?

好的。好的。好的。好的。也許對我來說是最後一件事，只是切換到定價環境。在 2020 年，我不記得有任何問題，因為你的利基市場和售價。但你們又要漲價了嗎？您還看到通貨膨脹嗎？

Well, I would say that a lot of the inflationary pressures we've seen in raw materials have subsided. They've improved. I would also say that with demand down somewhat, customers are very reluctant to accept big price increases. As we mentioned before, back in '21, '22, we were all just trying to get the materials from a supply chain standpoint to provide. And so it was more can you get me something and what's it going to cost us to do it. And that was a thing for us buying our raw materials.

嗯，我想說的是，我們在原料方面看到的許多通膨壓力已經消退。他們已經進步了。我還想說，隨著需求下降，客戶非常不願意接受大幅漲價。正如我們之前提到的，早在 21 年、22 年，我們都只是試圖從供應鏈的角度獲取材料來提供。所以更重要的是你能給我一些東西嗎？我們要花多少錢才能做到這一點。這對我們來說是購買原料的事情。

So things have stabilized there. And so I think we're returning back to a more normal environment from a pricing standpoint. And as you know, we -- if you look at our improvement that we've made, it's almost all been on the -- on our SG&A side. Our margins have held very steady, which is an indication of our pricing.

所以事情已經穩定下來了。因此，我認為從定價的角度來看，我們正在回到更正常的環境。如您所知，如果您看看我們所做的改進，您會發現幾乎全部都在 SG&A 方面。我們的利潤率保持非常穩定，這反映了我們的定價。

So what we've really worked hard on is reducing our kind of our operating cost, and that's really where we've gotten the improvement from reducing our internal expenses.

因此，我們真正努力的是降低我們的營運成本，而這正是我們透過減少內部開支所取得的進步。

I'm not showing any further questions in the queue. I would now like to turn it back to Jeff Powell for any closing remarks.

我不會在隊列中顯示任何其他問題。現在我想請傑夫鮑威爾發表結束語。

Thank you, Victor.

謝謝你，維克多。

So before wrapping up the call today, I just want to leave you with a few takeaways.

因此，在結束今天的通話之前，我只想給您留下一些要點。

2023 was another record-setting year for Kadant, and our employees deserve a lot of credit for achieving these results. I want to thank all our employees around the world for the commitment to serving our customers' needs. I also want to welcome our newest employees, from both Key Knife and KWS manufacturing. We're excited about the value you add to Kadant and the opportunity to build upon the successes you have achieved.

2023 年對凱登來說又是創紀錄的一年，我們的員工取得這些成果值得高度讚揚。我要感謝我們世界各地的所有員工致力於滿足客戶的需求。我還要歡迎來自 Key Knife 和 KWS 製造部門的新員工。我們對您為凱登增加的價值以及在您所取得的成功的基礎上再接再厲的機會感到興奮。

In 2024, we will continue to seek new opportunities to create value as we focus on meeting our customers' needs with innovative technologies and solutions that drive sustainable industrial processing.

2024 年，我們將繼續尋求新的機會來創造價值，專注於透過推動永續工業加工的創新技術和解決方案來滿足客戶的需求。

Lastly, our financial health is excellent, and our market positions remain strong. We look forward to delivering exceptional value for our stakeholders again in 2024.

最後，我們的財務狀況良好，市場地位依然強勁。我們期待 2024 年再次為我們的利害關係人提供卓越的價值。

With that, I want to thank you for joining the call today.

在此，我要感謝您今天加入電話會議。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。大家，祝你有美好的一天。