Kimball Electronics Inc (KE) 2024 Q2 法說會逐字稿

Good morning, ladies and gentlemen. Welcome to the Kimball Electronics second-quarter fiscal 2024 earnings conference call. My name is Drew, and I'll be the facilitator for today's call. (Operator Instructions)

早安，女士們，先生們。歡迎參加 Kimball Electronics 2024 財年第二季財報電話會議。我叫德魯，我將擔任今天電話會議的主持人。（操作員說明）

At this time, I would like to turn the call over to Andy Regrut, Vice President, Investor Relations. Mr. Regrut, you may begin.

現在，我想將電話轉給投資者關係副總裁安迪·雷格魯特 (Andy Regrut)。雷格魯特先生，您可以開始了。

Thank you, operator, and good morning, everyone. Welcome to our second-quarter conference call. With me here today is Ric Phillips, our Chief Executive Officer; and Jana Croom, Chief Financial Officer.

謝謝接線員，大家早安。歡迎參加我們的第二季電話會議。今天和我在一起的是我們的執行長里克·菲利普斯 (Ric Phillips)；和財務長 Jana Croom。

We issued a press release yesterday afternoon with our results for the second quarter of fiscal 2024. To accompany today's call, a presentation has been posted to the Investor Relations page on our company website.

我們昨天下午發布了一份新聞稿，公佈了 2024 財年第二季的業績。為了配合今天的電話會議，我們公司網站的投資者關係頁面上發布了一份簡報。

Before we get started, I'd like to remind you that we will be making forward-looking statements that involve risk and uncertainty and are subject to our Safe Harbor provisions, as stated in our press release and SEC filings, and that actual results can differ materially from the forward-looking statements. Reconciliations of GAAP to non-GAAP amounts are available in our press release.

在我們開始之前，我想提醒您，我們將做出涉及風險和不確定性的前瞻性陳述，並受到我們的安全港條款的約束，如我們的新聞稿和 SEC 文件中所述，實際結果可以與前瞻性陳述有重大差異。我們的新聞稿中提供了 GAAP 與非 GAAP 金額的調整表。

One other housekeeping item to mention, starting this quarter, we have added a page of other financial metrics to the press release, which includes depreciation and amortization, stock-based compensation, cash conversion days, and open orders for the relevant periods. These additional disclosures are in line with our commitment to providing you with enhanced transparency into our business operations and key performance metrics.

另一個需要提及的內務事項是，從本季度開始，我們在新聞稿中添加了一頁其他財務指標，其中包括折舊和攤銷、基於股票的薪酬、現金轉換天數以及相關期間的未結訂單。這些額外的揭露符合我們為您提供更高的業務營運和關鍵績效指標透明度的承諾。

This morning, Ric will start the call with a few opening comments. Jana will review the financial results for the quarter and updated guidance for fiscal 2024, and Ric will complete our prepared remarks before taking your questions.

今天早上，里克將以一些開場白開始電話會議。Jana 將審查本季的財務業績和 2024 財年的最新指引，而 Ric 將在回答您的問題之前完成我們準備好的發言。

I'll now turn the call over to Ric.

我現在將電話轉給里克。

Thanks, Andy, and good morning, everyone.

謝謝安迪，大家早安。

As we expected, the second quarter of fiscal 2024 was hard fought, with our team navigating a challenging operating environment. Global macro headwinds, including pressure from elevated levels of inflation, higher interest rates, and geopolitical uncertainties, have persisted, and the consumer is pulling back. The markets we serve are experiencing demand softening, and our customers are changing production schedules and delivery date requirements.

正如我們預期的那樣，2024 財年第二季是一場艱苦的戰鬥，我們的團隊在充滿挑戰的營運環境中度過。全球宏觀不利因素，包括通膨水準上升、利率上升和地緣政治不確定性帶來的壓力持續存在，消費者正在縮減開支。我們服務的市場正在經歷需求疲軟，我們的客戶正在改變生產計劃和交貨日期要求。

Sales in Q2 declined compared to the same period last year, with manufacturing output in the quarter being reduced to meet the lower demand as our customers work through elevated inventory levels. Margins, on the other hand, remained stable, thanks in part to proactive measures taken to align our cost structure with slowing sales. We expect industry-wide pressures for the remainder of fiscal 2024 and have updated our guidance for sales and operating income for the full year to align with these trends.

第二季的銷售額與去年同期相比有所下降，本季的製造業產出減少，以滿足客戶因庫存水準升高而導致的需求下降。另一方面，利潤率保持穩定，部分原因是我們採取了積極措施，使我們的成本結構與銷售放緩保持一致。我們預計 2024 財年剩餘時間內全行業將面臨壓力，並更新了全年銷售和營業收入指引，以適應這些趨勢。

Based on what we know today, it seems likely the macro environment will remain challenging for some time. Despite this near-term choppiness, we did not change our guidance for capital expenditures in fiscal 2024, as we continue to invest in long-term growth opportunities. With a strong funnel of new business, supported by favorable industry megatrends, we're deploying a balanced capital allocation strategy focused on driving organic growth, global expansion, and long-lasting customer relationships.

根據我們今天所知，宏觀環境可能在一段時間內仍將充滿挑戰。儘管近期出現波動，但我們沒有改變 2024 財年資本支出的指導，因為我們繼續投資於長期成長機會。憑藉強大的新業務管道，在有利的行業大趨勢的支持下，我們正在部署平衡的資本配置策略，專注於推動有機成長、全球擴張和持久的客戶關係。

Turning back to the results for the second quarter. Net sales totaled $421 million, a 4% decrease compared to the second quarter of last year. From a geographical perspective, the top line was strong in North America, up low double digits, with particularly good results in our industrial vertical market, offset by declines in Asia and Europe. The decline in Asia occurred in Thailand, which was heavily impacted by our major medical customer that is involved in an FDA recall, while Europe appears to be a region of the world where the general economic slowdown is more significant compared to other areas of the globe.

回到第二季的業績。淨銷售額總計 4.21 億美元，比去年第二季下降 4%。從地理角度來看，北美地區的營收強勁，實現了兩位數的低點成長，我們的工業垂直市場的業績特別好，但被亞洲和歐洲的下滑所抵消。亞洲的下滑發生在泰國，該地區受到 FDA 召回事件的主要醫療客戶的嚴重影響，而歐洲似乎是世界上總體經濟放緩比全球其他地區更為嚴重的地區。

One vertical market, industrial, posted year-over-year growth in the quarter, with net sales totaling $113 million, a 7% increase compared to Q2 last year, and 27% of total company sales. The strength this quarter was concentrated in charging systems, climate control, and public safety products.

工業這個垂直市場在本季實現年增，淨銷售額總計 1.13 億美元，比去年第二季成長 7%，占公司總銷售額的 27%。本季的優勢集中在充電系統、氣候控制和公共安全產品。

We frequently refer to our industrial business as green and clean. And in some respects, we're our own best customer. With products that reduce environmental impacts, promote energy efficiency, safety, carbon neutrality, and responsible use of natural resources, we specialize in heating and cooling systems, factory automation, optical inspection, electronic locking devices, and charging stations.

我們經常將我們的工業業務稱為綠色和清潔。在某些方面，我們是我們自己最好的客戶。我們的產品能夠減少環境影響，促進能源效率、安全、碳中和和負責任地使用自然資源，我們專注於加熱和冷卻系統、工廠自動化、光學檢查、電子鎖定設備和充電站。

Next is automotive, where Q2 sales totaled $200 million, a 2% decrease compared to the second quarter of fiscal 2023, and 47% of total company sales. The decline this quarter was driven by weakening demand in Europe, partially offset by incremental strength in China. Longer term, we continue to see a strong runway for growth in the automotive vertical, driven by the industry trend toward incorporating more electronic content to vehicles, specifically in steering and braking systems. Our proven expertise manufacturing safety-critical products that meet the stringent regulatory requirements of the industry ideally positions us to support further advancements in these systems.

其次是汽車領域，第二季銷售額總計 2 億美元，比 2023 財年第二季下降 2%，占公司總銷售額的 47%。本季的下降是由歐洲需求疲軟推動的，但部分被中國的增量成長所抵消。從長遠來看，在將更多電子內容融入車輛（特別是轉向和煞車系統）的行業趨勢的推動下，我們繼續看到汽車垂直領域的強勁成長。我們在製造滿足行業嚴格監管要求的安全關鍵產品方面擁有成熟的專業知識，這使我們能夠支持這些系統的進一步發展。

As a reminder, most of our automotive business is currently in steering and braking, and it doesn't matter what's under the hood, whether it be an internal combustion engine, electric motor, or a hybrid of the two. Essentially, the architectures are the same for these vehicles, which is important as consumer preferences and adoption rates evolve and the industry transitions toward EVs.

提醒一下，我們的大部分汽車業務目前都集中在轉向和煞車方面，無論引擎蓋下是什麼，無論是內燃機、電動馬達還是兩者的混合動力，都不重要。從本質上講，這些車輛的架構是相同的，隨著消費者偏好和採用率的發展以及產業向電動車的過渡，這一點非常重要。

Finally, medical, with net sales of $108 million, a 14% decrease compared to Q2 last year, and 26% of total company sales. This result was in line with our expectations. As I alluded to earlier, our annual guidance reflects a $100 million reduction in sales with a major customer in this vertical, partially offset by growth in other programs. We expect these growth opportunities to continue to emerge as the population ages, access and affordability to healthcare increases, medical devices get smaller in size and require higher levels of precision and accuracy, and connected drug delivery systems become more common.

最後是醫療，淨銷售額為 1.08 億美元，比去年第二季下降 14%，占公司總銷售額的 26%。這個結果符合我們的預期。正如我之前提到的，我們的年度指導反映了該垂直領域主要客戶的銷售額減少了 1 億美元，部分被其他計劃的成長所抵消。我們預計，隨著人口老化、醫療保健的可及性和可負擔性的提高、醫療設備的尺寸變得更小並且需要更高水平的精度和準確度以及互聯的藥物輸送系統變得更加普遍，這些成長機會將持續出現。

Our manufacturing capabilities extend beyond electronics and printed circuit board assemblies and include, but are not limited to, operations involving precision injected molded plastics, complete device assembly for drug delivery systems, and sterilization and cold chain management. The business development team focuses on leveraging these capabilities with higher level assemblies, or HLAs, which, as a category, represent an opportunity for more value-added content.

我們的製造能力超出了電子和印刷電路板組件的範圍，包括但不限於涉及精密注射成型塑膠、藥物輸送系統的完整設備組裝以及滅菌和冷鏈管理的操作。業務開發團隊專注於利用更高層級的程式集（HLA）來利用這些功能，HLA 作為一個類別，代表了更多增值內容的機會。

So in summary, a solid quarter in a difficult operating environment and an updated outlook for fiscal 2024.

總而言之，在艱難的營運環境中，該季度表現穩健，並且更新了 2024 財年的展望。

I'll now turn the call over to Jana to provide more details on the financial results for Q2 and review our guidance for the full year. Jana?

我現在將把電話轉給 Jana，提供有關第二季度財務業績的更多詳細信息，並回顧我們全年的指導。賈娜？

Thank you, and good morning, everyone.

謝謝大家，大家早安。

As Ric highlighted, net sales in Q2 were $421.2 million, a 4% decrease compared to the second quarter of fiscal 2023. Foreign exchange had a 1% favorable impact on consolidated sales year over year.

正如 Ric 所強調的那樣，第二季的淨銷售額為 4.212 億美元，比 2023 財年第二季下降 4%。外匯對綜合銷售額較去年同期產生了 1% 的有利影響。

The gross margin rate in Q2 was 8.2%, a 40-basis-point improvement compared to the same period last year, with the increase being driven by a favorable product mix and lower material costs compared to 12 months ago when we were dealing with global shortages impacting the electronics industry. We are also aligning our costs to the current macro environment.

第二季毛利率為 8.2%，較去年同期提高 40 個基點，與 12 個月前我們處理全球業務時相比，良好的產品結構和較低的材料成本推動了毛利率的增長。短缺影響了電子業。我們也會根據當前的宏觀環境調整成本。

Adjusted selling and administrative expense in the second quarter were $17.3 million, compared to last year's adjusted Q2 results of $16.4 million, with the increase being driven by a $2 million allowance for credit losses. Although the customer associated with this charge is not in bankruptcy, we determined it was appropriate to consider the age of the outstanding amount, the credit worthiness and payment history of the customer, and the timing of expected payments. As a percentage of sales, adjusted selling and administrative expenses were 4.1% or 40 basis points higher than the second quarter of last year.

第二季調整後的銷售和管理費用為 1,730 萬美元，而去年第二季調整後的業績為 1,640 萬美元，成長是由 200 萬美元的信貸損失準備金推動的。儘管與此費用相關的客戶並未破產，但我們認為考慮未償還金額的期限、客戶的信用度和付款歷史以及預期付款的時間是適當的。調整後的銷售和管理費用佔銷售額的百分比為 4.1%，比去年第二季高出 40 個基點。

Adjusted operating income for the second quarter was $17.1 million, or 4% of net sales, which compares to last year's adjusted results of $17.8 million, or 4.1% of net sales.

第二季調整後營業收入為 1,710 萬美元，佔淨銷售額的 4%，而去年調整後的表現為 1,780 萬美元，佔淨銷售額的 4.1%。

Other income and expense was expense of $5.3 million, compared to expense of $3.3 million last year. The increase was the result of higher interest expense year over year, a product of our elevated debt levels and the current interest rate environment. The effective tax rate was 26.5% in the second quarter, compared to 24.5% in Q2 of fiscal 2023.

其他收入和支出為 530 萬美元，去年為 330 萬美元。這一增長是由於利息支出逐年增加的結果，這是我們債務水準上升和當前利率環境的產物。第二季的有效稅率為 26.5%，而 2023 財年第二季的有效稅率為 24.5%。

Adjusted net income in the second quarter of fiscal 2024 was $8.3 million, or $0.33 per diluted share, compared to adjusted net income in Q2 of last year of $11 million, or $0.44 per diluted share.

2024 財年第二季調整後淨利為 830 萬美元，即稀釋後每股 0.33 美元，而去年第二季調整後淨利為 1,100 萬美元，即稀釋後每股 0.44 美元。

Turning now to the balance sheet. Cash and cash equivalents at December 31, 2023 were $39.9 million, and cash flow used by operating activities in the quarter was $30.7 million. Cash conversion days were 117 days, compared to 97 days in the second quarter of fiscal 2023 and 103 days last quarter.

現在轉向資產負債表。截至 2023 年 12 月 31 日的現金及現金等價物為 3,990 萬美元，本季經營活動使用的現金流量為 3,070 萬美元。現金轉換天數為 117 天，而 2023 財年第二季為 97 天，上季為 103 天。

As a reminder, we have started including customer advances in our CCD calculations. The results for fiscal 2023 reflect this change. The increase in CCD this quarter, compared with Q2 in the prior year, was driven by an increase in days sales outstanding and contract asset days and a reduction in accounts payable days. In addition to a focus on inventory, we are also looking to significantly improve our cash conversion days as we more actively and aggressively manage its components.

提醒一下，我們已開始將客戶預付款納入我們的 CCD 計算中。2023 財年的業績反映了這項變化。與去年第二季相比，本季 CCD 的成長是由於應收帳款天數和合約資產天數的增加以及應付帳款天數的減少。除了專注於庫存之外，我們還希望透過更積極主動地管理其組件來顯著提高現金週轉天數。

Inventory ended the quarter at $455.7 million, compared to $487.5 million at the end of Q2 in fiscal 2023 and $482 million last quarter. We expect this number to continue to decline as we work with customers to rightsize inventory to match the current demand outlook.

本季末庫存為 4.557 億美元，而 2023 財年第二季末的庫存為 4.875 億美元，上季為 4.82 億美元。我們預計，隨著我們與客戶合作調整庫存規模以適應當前的需求前景，這一數字將繼續下降。

Capital expenditures in the second quarter were $13.2 million, supporting organic growth, maintenance requirements, and investments in automation and efficiency.

第二季的資本支出為 1,320 萬美元，用於支援有機成長、維護需求以及自動化和效率投資。

Borrowings on our credit facility at December 31, 2023 were $321.8 million, compared to $273.5 million a year ago and $296.7 million at the end of Q1. Our short-term liquidity available, represented as cash and cash equivalents, plus the unused amount of our credit facility, totaled $105.7 million at the end of the second quarter.

截至 2023 年 12 月 31 日，我們的信貸額度借款為 3.218 億美元，而一年前為 2.735 億美元，第一季末為 2.967 億美元。截至第二季末，我們可用的短期流動性（以現金和現金等價物表示）加上未使用的信貸額度總計為 1.057 億美元。

It is important to note that on January 5, 2024, we amended our short-term credit facility to provide additional domestic liquidity for investments needed to meet working capital and other operating needs. The amendment increased the borrowing limit to $100 million from $50 million and changes the maturity date to January 3, 2025 from February 2, 2024.

值得注意的是，我們在 2024 年 1 月 5 日修改了短期信貸安排，為滿足營運資金和其他營運需求所需的投資提供額外的國內流動性。該修正案將借款限額從 5,000 萬美元提高到 1 億美元，並將到期日從 2024 年 2 月 2 日改為 2025 年 1 月 3 日。

There were no shares repurchased in the second quarter of fiscal 2024. Since October 2015, under our Board-authorized share repurchase program, a total of $88.8 million has been returned to our shareholders by purchasing 5.8 million shares of our common stock. We have $11.2 million remaining on the repurchase program.

2024財年第二季沒有回購股票。自 2015 年 10 月以來，根據董事會授權的股票回購計劃，透過購買 580 萬股普通股，總共向股東返還了 8,880 萬美元。我們的回購計畫還剩 1,120 萬美元。

As Ric highlighted, we are updating our guidance for fiscal year 2024, with net sales now expected to decline 2% to 4% versus fiscal 2023, which compares to our previous guidance of flat with the prior year. Operating income is estimated to be in the range of 4.2% to 4.6% of net sales, compared to our previous estimate of flat with the prior year. The guidance for capital expenditures did not change, with a range of $70 million to $80 million.

正如 Ric 所強調的那樣，我們正在更新 2024 財年的指導，目前預計淨銷售額將比 2023 財年下降 2% 至 4%，而我們之前的指導與上一年持平。預計營業收入佔淨銷售額的 4.2% 至 4.6%，而我們先前的估計與上年持平。資本支出指引沒有變化，範圍為 7,000 萬美元至 8,000 萬美元。

I'll now turn the call back over to Ric.

我現在將把電話轉回給里克。

Thanks, Jana. Before we open the lines for questions, I'd like to recognize our team for, once again, being honored by CIRCUITS ASSEMBLY Service Excellence Awards. In November, we achieved the highest overall customer ratings in the categories of dependability and timely delivery, technology, value for the price, and manufacturing quality. These awards are based solely on direct customer input.

謝謝，賈娜。在開始提問之前，我想先對我們的團隊再次榮獲電路組裝卓越服務獎表示認可。11 月份，我們在可靠性和及時交貨、技術、價格價值和製造品質等方面獲得了最高的整體客戶評級。這些獎項完全基於客戶的直接輸入。

I am very proud of our team's consistent focus on building long-term relationships with our customers, regardless of whether they are new or customers we've worked with for a decade or more. They consistently recognize the Kimball team, our culture, and a common set of priorities that allowed us to continuously improve and keep our promises.

我為我們的團隊始終致力於與客戶建立長期關係感到非常自豪，無論他們是新客戶還是與我們合作了十年或更長時間的客戶。他們始終認可 Kimball 團隊、我們的文化以及一套共同的優先事項，使我們能夠不斷改進並信守承諾。

I'd like to congratulate and thank our team worldwide for receiving this recognition. We are winning together the Kimball way, and I'm excited about what's ahead for our company.

我謹祝賀並感謝我們的全球團隊獲得這項認可。我們正在以金博爾的方式共同獲勝，我對我們公司的未來感到興奮。

(Operator Instructions) Derek Soderberg, Cantor Fitzgerald.

（操作員說明）德里克·索德伯格、坎托·菲茨杰拉德。

Good morning, everyone. Thanks for taking the questions. I wanted to just touch on the current environment by end market. It seems like industrial has pockets of strength, medical is tracking as expected. Can you talk a bit about where the incremental weakness is coming from by end market that is leading to the revision in the outlook? I would imagine you're feeling some of the impact of the UAE strike. Is the incremental weakness you expect for this year largely in automotive, or really, is it broad-based?

大家，早安。感謝您提出問題。我想談談終端市場的當前環境。看起來工業有一定的實力，醫療也如預期的。您能否談談終端市場的增量疲軟導致前景修正的原因？我想您一定感受到了阿聯酋罷工的影響。您預計今年的增量疲軟主要是在汽車領域，還是實際上是廣泛的？

Hey. Good morning, Derek, and thank you for the question.

嘿。早安，德里克，謝謝你的提問。

So let's start off with medical because that is probably the cleanest and easiest to understand. Medical is tracking exactly as we expected, which is we're going to see a $100 million decline come through related to one large customer, offset by some new product launches that we have in roughly the $50 million range. And so that one is going exactly as expected.

因此，讓我們從醫學開始，因為這可能是最乾淨、最容易理解的。醫療產業的發展完全符合我們的預期，即我們將看到與一個大客戶相關的 1 億美元的下降，但被我們推出的一些大約 5000 萬美元範圍內的新產品所抵消。所以一切都完全按照預期進行。

Industrial, we are seeing significant weakness in Europe, particularly related to the smart metering product line. It is being offset by growth that we're seeing in North America, specifically related to charging stations and also some benefit that we're seeing come through in the HVAC market.

工業方面，我們看到歐洲市場顯著疲軟，尤其是與智慧計量產品線相關的疲軟。它被我們在北美看到的成長所抵消，特別是與充電站相關的成長，以及我們在暖通空調市場看到的一些好處。

Automotive is really a mixed bag because what we're seeing is softening in the European market. I will tell you, Europe, across the board, is just really tough right now. And if you're looking at, generally speaking, where the decline is coming from, it is very clearly Europe.

汽車產業確實是一個魚龍混雜的產業，因為我們看到歐洲市場正在疲軟。我會告訴你，整個歐洲現在都非常艱難。一般來說，如果你看一下下降的來源，那麼很明顯是歐洲。

Automotive in North America is holding in relatively flat. We saw minor disruptions as a result of the UAW strike. We don't anticipate seeing any more disruption come through for the remainder of the fiscal year. And in China, we also had some nice pockets of strength in the automotive business.

北美汽車業的表現相對穩定。我們看到 UAW 罷工造成了輕微的干擾。我們預計本財年剩餘時間內不會再出現任何干擾。在中國，我們在汽車業務方面也擁有一些不錯的實力。

Got it. And just on -- go ahead.

知道了。就這樣——繼續吧。

(inaudible) our mix in North America, but in China, those sales have been really strong.

（聽不清楚）我們在北美的產品組合，但在中國，這些銷售非常強勁。

Got it. And is any of the weakness in Europe? I know you obviously have operations in Poland you just expanded. In the prepared remarks, you mentioned some geopolitical uncertainty. You've got a conflict in the Red Sea there. Shipping rates are up. I'm wondering if that played a quantifiable impact to how you're thinking about the rest of this year. And if that's not the case, I guess, Jana, what are you seeing in the outquarters leading to the lower operating income guidance?

知道了。歐洲有什麼弱點嗎？我知道你們顯然在波蘭有業務，剛剛擴大了業務。在準備好的發言中，你提到了一些地緣政治的不確定性。那裡在紅海發生了衝突。運費上漲。我想知道這是否對您對今年剩餘時間的看法產生了可量化的影響。如果情況並非如此，我想，賈娜，您在季度中看到了什麼導致營業收入指導降低？

So we have seen disruptions in the Red Sea. We actually ended up sending letters to all of our customers related to that impact. It's incumbent upon us as suppliers to be able to ship and distribute products to the customers who are actively waiting on it. So we are doing our best to find alternative opportunities for freight.

所以我們看到了紅海的混亂。實際上，我們最終向所有客戶發送了與該影響相關的信件。作為供應商，我們有責任向積極等待的客戶運送和分發產品。因此，我們正在盡最大努力尋找貨運的替代機會。

I'm not going to blame it on shipping in the Red Sea, though. What you are really seeing now is a true slowdown in Europe. A lot of it has to do with what we saw in '22 and '23. And if you'll notice, we took out the language of push-out as we had described it last year, relative to customers pushing out demand.

不過，我不會將其歸咎於紅海航運。你現在真正看到的是歐洲真正的經濟放緩。這很大程度上與我們在 22 年和 23 年看到的情況有關。如果您注意到的話，我們刪除了去年描述的「推出」語言，即相對於客戶推出需求的說法。

This feels more like -- took on a lot of inventory. There was a shortage and scarcity of product availability. They took as much as they could from us. And now, they're sitting on a lot of inventory that they've got to work through. And so we know that that will correct itself over time. But what it's causing is just some temporal near-term choppiness, as they've got to get that inventory pushed through to the end market. And then we resume what I would refer to as a normal steady-state cadence of growth.

這感覺更像是——承擔了大量庫存。產品供應短缺。他們從我們這裡拿走了盡可能多的東西。現在，他們有大量庫存需要處理。所以我們知道，隨著時間的推移，這種情況會自行修正。但它造成的只是一些暫時的近期波動，因為他們必須將庫存推向終端市場。然後我們恢復我所說的正常穩態成長節奏。

Our CCO likens it to the toilet paper debacle of COVID 2021, where there was a scarcity of toilet paper. Everybody ran out and bought as much as they could. And then you have to work through your toilet paper supply, and then you get back to a steady-state growth period.

我們的 CCO 將其比作 2021 年新冠疫情期間的衛生紙危機，當時廁紙短缺。大家都跑出去，買多少就買多少。然後你必須解決衛生紙的供應問題，然後你就會回到穩定的成長期。

Yeah. Well, I appreciate the detail. If I could just squeeze one more in. Ric, you mentioned some strengths in North America around industrial. You did mention clean and green, some HVAC charging stations, it seems like. That's a growing opportunity for you guys. Is there any way for Kimball to play in the manufacturing tax credits tied to the Inflation Reduction Act? Would you have to reshift manufacturing to Jasper for that? Is that a real opportunity for you guys?

是的。嗯，我很欣賞這個細節。如果我能再擠一個進去就好了。里克，您提到了北美在工業方面的一些優勢。您確實提到了清潔和綠色，一些暖通空調充電站，似乎是這樣。這對你們來說是一個不斷增長的機會。金博爾有什麼辦法可以參與《通貨膨脹削減法案》相關的製造業稅收抵免嗎？為此，您是否必須將製造轉移到賈斯珀？這對你們來說是一個真正的機會嗎？

It's certainly something that we talk about, yes. We see and we like the strength in North America around those areas. We're proud, as you know, of our North American manufacturing network. And we have customers that want to talk to us about it all the time. So it's certainly an opportunity that we're continuing to explore and could be upside.

這當然是我們談論的事情，是的。我們看到並且喜歡北美在這些領域的實力。如您所知，我們對我們的北美製造網路感到自豪。我們的客戶一直想與我們討論這個問題。因此，這無疑是一個我們正在繼續探索的機會，並且可能會帶來好處。

Awesome. Really appreciate it. Thanks.

驚人的。真的很感激。謝謝。

Griffin Boss, B. Riley.

格里芬·博斯，B·萊利。

Hi, Ric, Jana. Thanks for taking my questions. So first, on the working capital front, we saw material step up in day sales outstanding in the quarter. Just curious what your expectations are going forward for this year and then longer term as it relates to receivables.

嗨，瑞克，賈娜。感謝您回答我的問題。首先，在營運資金方面，我們看到本季的每日銷售額大幅增加。只是好奇您對今年以及與應收帳款相關的長期期望是什麼。

And so I'll take that question regarding risk, Griffin. We have a lot of work to do here, and it's in partnership with our customers because, as you know, we were ordering according to the demands our customer placed on us, and it was [NCMR]. So everything we ordered 52 weeks ago, 39 weeks ago, 26 weeks ago is showing up. And as the demand forecast is moving out from us, that inventory is continuing to build.

因此，格里芬，我將回答有關風險的問題。我們在這裡有很多工作要做，這是與我們的客戶合作的，因為如您所知，我們是根據客戶對我們提出的要求進行訂購的，而且這是[NCMR]。所以我們 52 週前、39 週前、26 週前訂購的所有東西都會顯示出來。隨著需求預測的變化，庫存正在持續增加。

We're working through it with customers in a variety of ways. So some of it is going to be cash deposits from customers. Some of it is going to be consignment of inventory for customers. Some of it is carrying charges on the inventory, although my preference right now is not carrying charges. It's cash, which, as you know, in this type of environment is king.

我們正在透過多種方式與客戶合作解決這個問題。因此，其中一部分將是客戶的現金存款。其中一些將用於為客戶寄售庫存。其中一些會在庫存中產生費用，儘管我現在更喜歡不產生費用。如你所知，現金在這種環境下才是王道。

I would expect that our DSO and our PDSOH need to come down. As I previously said, it's a pendulum that swings too far. And so we really got to work on the aging of our receivables and get that more in line with our contractual agreements with our customers. Working capital is a laser focus right now. And so it's relieving the inventory, but seeing it all the way through to the end, which is the impact that it would have on our balance sheet in terms of debt relief.

我預計我們的 DSO 和 PDSOH 需要下降。正如我之前所說，這是一個擺動得太遠的鐘擺。因此，我們確實需要努力解決應收帳款的帳齡問題，並使其更符合我們與客戶的合約協議。營運資金是目前的焦點。因此，它正在釋放庫存，但從頭到尾，這就是它在債務減免方面對我們的資產負債表產生的影響。

Got it. Okay, thanks, Jana, for the color there. And then -- so just turning to medical, I understand obviously the fiscal year '24 guide accounts for the $100 million reduction in sales related to that FDA recall of the major medical customer. So can you just remind us, I'm not sure if you said it in the past, when you expect that recall to be remediated. Does the program start to hit the top line again in 1Q '25, or is it later in 2025, or do you not have that visibility?

知道了。好的，謝謝賈娜提供的顏色。然後，就醫療而言，我顯然明白 24 財年指南說明了與 FDA 召回主要醫療客戶相關的 1 億美元銷售額減少的原因。那麼，您能否提醒我們一下，我不確定您過去是否說過，當您希望該召回得到補救時。該計劃是否會在 25 年第一季再次達到頂線，還是在 2025 年晚些時候，或者您沒有這種可見性？

Yeah, we really don't. What we've tried to be, Griffin, is really conservative about that. As I think we've said before, we continue to have a great relationship with that customer. We're discussing multiple opportunities at any point in time, and we stand ready to support. But we've tried to be really conservative and not build that into our expectations.

是的，我們真的不知道。格里芬，我們在這方面努力做到的確實是保守的。正如我之前所說，我們繼續與該客戶保持良好的關係。我們隨時討論多種機會，並隨時準備提供支援。但我們試圖做到真正保守，不將其納入我們的期望中。

One point on medical outside of that customer that you can probably do the back math on, but as Jana said, we're really on expectations overall and haven't changed those expectations for 2024. And our medical growth in Q2 would have been high-single to low-double digits outside of that reduction from that one customer.

關於該客戶以外的醫療問題，您可能可以進行反算，但正如 Jana 所說，我們確實符合整體預期，並且沒有改變對 2024 年的預期。如果不考慮該客戶的減少，我們第二季的醫療成長將是高個位數到低兩位數。

So we are making progress. We continue to see wins coming in, and we're really optimistic about medical long term. But to directly answer your question, we've not built in any expectations related to that program restarting.

所以我們正在取得進展。我們繼續看到勝利的到來，我們對醫療的長期發展非常樂觀。但為了直接回答你的問題，我們沒有建立與該程式重新啟動相關的任何期望。

Okay. All right, fair enough. Well, thanks for the color. I appreciate you guys taking my questions.

好的。好吧，很公平。嗯，謝謝你的顏色。我很感謝你們回答我的問題。

Jaeson Schmidt, Lake Street.

傑森‧施密特，湖街。

Hey, guys. Thanks for taking my questions. Understanding that there have been push outs here, just given the macro, but just curious if you're seeing any issues with decommits or cancellations within your backlog.

大家好。感謝您回答我的問題。了解這裡已經推出了，只是給出了宏，但只是好奇您是否在積壓工作中看到任何與退役或取消有關的問題。

We have seen, yes, decommits and cancellations come through with our backlog, which, as you know, is not usual in this business. Normally, you've got firm orders. You've got volume. You can see it out far away.

是的，我們已經看到，我們的積壓工作導致了退役和取消，正如您所知，這在這個行業並不常見。通常情況下，你已經收到了確定的訂單。你有音量。你可以在很遠的地方看到它。

Now, they haven't been huge, and they have been geographically focused. But we've actually seen them. A good example is Europe Industrial, where we saw significant shifts that were quite honestly unexpected. And so we work with the customer on what that looks like, and we partner through it.

現在，它們的規模並不大，而且在地理上也很集中。但我們確實見過他們。歐洲工業就是一個很好的例子，我們看到了確實出乎意料的重大轉變。因此，我們與客戶一起研究這個問題，並透過它進行合作。

It's really interesting because we've had a solid ramp of new program launches and NPIs, where we're seeing some of the softening come through. Our existing programs that have been in places for years, where we're seeing decommits, cancels, and some push outs.

這真的很有趣，因為我們的新專案啟動和 NPI 穩步增加，但我們看到了一些軟化的情況。我們現有的專案已經實施多年，但我們看到了一些專案的退役、取消和一些專案的退出。

Okay, that's really helpful color. And then just following up on that, I know you just gave the example of industrial, but are those decommits or cancellations concentrated in one of your segments, or is it pretty broad-based?

好吧，這個顏色真的很有用。然後跟進這一點，我知道您剛剛舉了工業的例子，但這些退休或取消是否集中在您的某個細分市場，還是基礎相當廣泛？

Medical is actually tracking really well. And so it's strange to us because one of our peers highlighted medical as a softening vertical for them. For us, that's actually going exceptionally well.

醫療實際上追蹤得非常好。所以這對我們來說很奇怪，因為我們的一位同行強調醫療對他們來說是一個軟化的垂直領域。對我們來說，這實際上進展得非常順利。

Industrial is really where we're seeing more of softening and struggle. And so I think it depends on and each vertical where you play in your customer mix. But that's it for us. Some softening in European automotive, again, that's really a result of just the economy and what they're experiencing there. North America is chugging along that section.

工業確實是我們看到更多軟化和掙扎的地方。因此，我認為這取決於您在客戶組合中所扮演的每個垂直領域。但對我們來說就是這樣。歐洲汽車業的一些疲軟，這實際上是經濟及其所經歷的結果。北美正沿著那段路緩慢前進。

Got you. And then just last one for me, and I'll jump back in the queue, with all the dynamics across your business and maybe some mixed shifts here and there, at a high level, how should we think about gross margin through the remainder of calendar '24?

明白你了。然後是我的最後一個，我將跳回到隊列中，考慮到整個業務的所有動態，也許還有一些混合的變化，在高水平上，我們應該如何考慮剩下的毛利率日曆'24？

Yeah, that is a great question. We're working through product mix for the remainder of the year right now and really understanding where our materials and labor costs are going to shake out as a percentage of net sales.

是的，這是一個很好的問題。我們現在正在研究今年剩餘時間的產品組合，並真正了解我們的材料和勞動力成本將在淨銷售額中所佔的比例。

If you look at our guidance range for the full fiscal year of 4.2% to 4.6%, what that tells you is our gross margin is going to be somewhere in the range of where you've seen it for the last two quarters. And that mid-8%-ish level, we're certainly going to do everything that we can to bolster it in terms of cost containment and alignment.

如果您查看我們整個財年 4.2% 至 4.6% 的指導範圍，您會發現我們的毛利率將處於過去兩個季度的範圍內。對於 8% 左右的水平，我們肯定會盡一切努力在成本控制和協調方面加強它。

And then I know you didn't ask about SG&A, but laser focus there, reducing all the costs where we can and where appropriate without sacrificing long-term growth. We just got to hunker down and get through it. That's the bottom line.

然後我知道你沒有問SG＆A，而是雷射聚焦於此，在不犧牲長期增長的情況下，盡可能降低所有成本。我們只需沉下心來度過難關。這是底線。

Okay. No, I really appreciate all that color. Thanks a lot, guys.

好的。不，我真的很欣賞這種顏色。非常感謝，夥計們。

One thing I will note that Jaeson didn't ask about, but I would like to say on the open mic, it was a very thoughtful decision by the leadership team to align cost to the current environment. What we have told you is we're not going to talk about bifurcated or stair-stepped or we're not going to have any of those conversations anymore, where we just take the absorption and don't respond. We really felt like it was incumbent upon us to make the decision to control the cost where we could and not just let the margins slide into the abyss. And so we are working significantly on that.

我要指出的一件事是 Jaeson 沒有問過，但我想在開放麥克風上說，領導團隊根據當前環境調整成本是一個非常深思熟慮的決定。我們已經告訴你的是，我們不會談論分叉或階梯式的問題，或者我們不會再進行任何此類對話，我們只是全神貫注，不予回應。我們真的覺得我們有責任做出盡可能控製成本的決定，而不是讓利潤滑入深淵。因此，我們正在這方面進行大量工作。

Anja Soderstrom, Sidoti.

安雅·索德斯特羅姆，西多蒂。

Hi, and thank you for taking my questions. So I have some follow-ups on the question. So in terms of the medical customer where they're remediating a product, are you exclusive with that customer on that product? Or could you be working if this was going to be prolonged and the competitor is taking share, so you're going to be able to work with the competitors on that?

您好，感謝您回答我的問題。所以我對這個問題有一些後續行動。那麼，對於正在修復產品的醫療客戶而言，您是否對該客戶具有該產品的排他性？或者，如果這種情況持續很長時間並且競爭對手正在搶佔份額，那麼您是否可以繼續工作，這樣您就可以與競爭對手合作？

Yeah, we do have other customers in the oxygen and ventilator business who we are working with and are seeing an increase in intake. So yes, we do work across that part of the business with multiple companies.

是的，我們確實有氧氣和呼吸機業務的其他客戶正在與我們合作，並且他們的攝入量有所增加。所以，是的，我們確實與多家公司合作進行這部分業務。

Okay, thank you. And Jana, you were talking about the weakness in Europe, and you mentioned the inventory adjustments there. Is that mainly the reason for the weakness there, or do you also see a broader economical weakness?

好的謝謝。Jana，您談到了歐洲的疲軟，並提到了那裡的庫存調整。這是經濟疲軟的主要原因，還是您也看到了更廣泛的經濟疲軟？

It's broader economical weakness. The broader economical weakness is just exasperating the inventory challenge. We are seeing some [time] coming out in the near future, but we're getting data daily.

這是更廣泛的經濟疲軟。更廣泛的經濟疲軟只會加劇庫存挑戰。我們預計不久的將來會出現一些[時間]，但我們每天都會取得數據。

Okay, thank you. And one last one is related to the taxes and the revenue mix. As North America was doing better than the other regions, I noticed the taxes are higher. Should we expect those to continue to be higher as North America might continue to be stronger, or how should we think about the taxes going forward?

好的謝謝。最後一個與稅收和收入組合有關。由於北美的表現比其他地區更好，我注意到稅收更高。隨著北美可能繼續走強，我們是否應該預期這些數字會繼續走高，或者我們應該如何考慮未來的稅收？

Yeah, and you nailed it. The tax rate is really a direct impact. It's just the mix of where sales are coming through geographically. We expect to control that as much as we can through tax arbitrage and opportunity, but I would say an effective tax rate in the mid-20%s is what you should expect. So somewhere in that 24% to 26% range.

是的，你成功了。稅率確實有直接影響。這只是銷售地域分佈的組合。我們希望透過稅收套利和機會盡可能地控制這一點，但我想說 20% 左右的有效稅率是你應該期望的。所以在 24% 到 26% 的範圍內。

Okay, great. Thank you. That was all for me.

好的，太好了。謝謝。這就是我的全部。

(Operator instructions) Tim Moore, EF Hutton.

（操作員說明）Tim Moore，EF Hutton。

Jana, thanks for adding the open orders amount to the press release going forward. So I was wondering maybe just on the backlog, open orders, you mentioned EV chargers. We've got the HVAC climate control, the public safety. But can you, Ric, maybe just highlight any other areas that are going well? I remember last time what the towing systems for EV trucks and SUVs to not drain the battery. If you could just maybe shed light on anything else that's growing pretty good or you're seeing pretty good interest in orders.

Jana，感謝您在未來的新聞稿中添加未結訂單金額。所以我想知道也許只是在積壓訂單、未結訂單方面，您提到了電動車充電器。我們有暖通空調氣候控制和公共安全。但里克，你能否強調一下其他進展順利的領域？我記得上次電動卡車和 SUV 的牽引系統不會耗盡電池。如果您能透露其他成長良好的事情，或者您看到訂單非常感興趣的話。

Yeah, so you nailed a lot of it. We're seeing, in terms of charging station, new medical customers, that's going well. Automotive, North America steering and braking is going really well. Also, automotive in China is going well for us. We've got some new products and program launches that we're going to see there that are encouraging and exciting, offset by just some inventory that we've got to work through and the softening in Europe.

是的，所以你釘了很多東西。我們看到，就充電站而言，新的醫療客戶進展順利。汽車、北美地區的轉向和煞車進展非常順利。此外，中國的汽車業對我們來說進展順利。我們將在那裡看到一些令人鼓舞和令人興奮的新產品和計劃發布，但被我們必須處理的一些庫存和歐洲的疲軟所抵消。

Great. That's helpful. Just shifting gears maybe, I'd love to hear maybe what Ric's appetite and your appetite is for M&A. Is there still willingness maybe to do medical as the priority near term? I know you've got the corporate development team in place. Has anything changed around that for your kind of appetite and potential timing?

偉大的。這很有幫助。也許只是換個方向，我很想聽聽里克和你對併購的興趣。近期是否仍願意將醫療列為優先事項？我知道你們已經組建了企業開發團隊。您的胃口和潛在時機是否改變了？

Yeah, I think our thinking probably hasn't shifted significantly of late, Tim. It's obviously something we never ignore, and we continue to monitor opportunities. We do see a really healthy funnel, as Jana mentioned. And as we look forward in the outyears, the lead time on wins, we see some really nice wins. We like the places that we're playing. And so we think the organic growth opportunities are really robust.

是的，我認為我們的想法最近可能沒有重大變化，提姆。顯然，我們永遠不會忽視這一點，並且我們將繼續監控機會。正如賈娜所提到的，我們確實看到了一個非常健康的漏斗。當我們展望未來，勝利的領先時間時，我們看到了一些非常好的勝利。我們喜歡我們比賽的地方。因此，我們認為有機成長機會非常強勁。

And as Jana said, we also are working on the balance sheet to free up and create flexibility for the future. So I wouldn't say we're ever out of the game, but we're really focused organically right now, and we think that's the right place given the balance sheet and given the opportunities that are coming our way.

正如賈娜所說，我們也在製定資產負債表，為未來釋放空間並創造靈活性。所以我不會說我們已經退出遊戲，但我們現在確實專注於有機的，考慮到資產負債表和即將到來的機會，我們認為這是正確的地方。

Yeah, Tim, if you were in CSD, it would be one of our customers deciding that they don't want to produce a particular program or book of business and they want us to take on the higher level assembly, and they're going to drop out that business, and we're going to take it over. And in some cases, the current macroeconomic environment is interesting because it causes our customers to evaluate their own margin improvement opportunity and ways that we can partner with them to solve that. So if you were to see us do something on that front, it would be in that vein.

是的，Tim，如果你在 CSD，我們的一位客戶會決定他們不想製作特定的程式或業務手冊，他們希望我們承擔更高級別的組裝工作，他們會放棄該業務，我們將接管它。在某些情況下，當前的宏觀經濟環境很有趣，因為它使我們的客戶評估他們自己的利潤改善機會以及我們可以與他們合作解決這個問題的方法。因此，如果你看到我們在這方面做一些事情，那就是這樣的。

Jana, you beat me to it. That was exactly going to be my next point. That's why I was asking the question because I know I've talked with you and Ric about that before. You've actually had some customers come to you. I mean, I don't know if they've been proposing it themselves, but it would seem like you have a lot of organic or hybrid opportunities in the medical front, with taking some work off other people's plate where it's not a big focus for them because they might have higher markets and businesses that they care about or allocating capital to. That's good.

賈娜，你比我先一步。這正是我的下一點。這就是我問這個問題的原因，因為我知道我之前已經與你和里克討論過這個問題。實際上已經有一些客戶來找你了。我的意思是，我不知道他們是否自己提出了這個建議，但在醫療領域似乎有很多有機或混合的機會，可以從其他人的工作中分擔一些工作，而這並不是一個重點對他們來說，因為他們可能擁有他們關心或分配資本的更高市場和業務。那挺好的。

And I just got one last question. Regarding your Investor Day, I think you might be doing one this year. Do you still plan on maybe laying out the dollar amount range and maybe the rough timing of global capital expenditures for plan expansion, cadence by year? Or is that maybe on hold a little bit due to the macro slowdown? And do you have any rough range of when maybe your Investor Day might be? Is it going to be this spring?

我剛剛得到最後一個問題。關於您的投資者日，我認為您今年可能會舉辦一個。您是否仍計劃列出計劃擴展的美元金額範圍以及全球資本支出的大致時間安排以及每年的節奏？還是由於宏觀經濟放緩而可能暫時擱置？您是否大致確定了投資者日的時間範圍？會是今年春天嗎？

So the Investor Day wouldn't be this spring. If we were going to do the Investor Day, it would be this fall. And the only reason for that is we need more data. And so as we continue to look at FY25, '26, and beyond, we really need the market to settle out and to see where we're shaking out in terms of our growth trajectory.

所以投資者日不會是今年春天。如果我們要舉辦投資者日，那就是今年秋天。唯一的原因是我們需要更多數據。因此，當我們繼續展望 25 財年、26 財年及以後時，我們確實需要市場穩定下來，看看我們的成長軌跡正在改變。

In terms of growth expansions, internally, we certainly have a blueprint and a strategic plan for future expansions. Quite honestly, Tim, if I were to come out to you right now and tell you that I'm expanding another region of the world, you would not be happy with me.

在成長擴張方面，我們內部當然有未來擴張的藍圖和策略計畫。老實說，提姆，如果我現在出來告訴你我正在向世界的另一個地區擴張，你不會對我感到滿意。

That's what I was asking. I'm glad it got moved out.

這就是我想問的。我很高興它被搬走了。

So yeah, well, again, certainly we have that strategic plan and we've put a lot of effort into it. We also recognize that in this current environment, what we've got has to work harder before we add on to it in the future.

所以，是的，我們當然有這個戰略計劃，我們為此付出了很多努力。我們也認識到，在當前的環境下，我們必須更加努力地工作，然後才能在未來進行補充。

Great. That's really what I want to hear. I'm glad it's not going to be in the next month. Yeah. No, it makes sense. Just wait it out. It happens to a lot of other companies. You're not the first one in this boat, and slowdown is pretty much globally now in some pockets, so that's really great.

偉大的。這確實是我想聽到的。我很高興它不會在下個月發生。是的。不，這是有道理的。等一下吧。很多其他公司也發生過這種情況。你不是第一個登上這艘船的人，現在全球範圍內的一些地區都在放緩，所以這真的很棒。

I'm looking forward to the Investor Day in the fall or whenever it is, and I'm glad it's not next month. So thanks a lot, and that's it for my questions.

我期待著秋季或任何時候的投資者日，我很高興不是下個月。非常感謝，這就是我的問題。

Thanks, Tim.

謝謝，蒂姆。

Everybody good on your end, Tim?

大家都好，提姆？

Yes, we had our first child born yesterday afternoon, a baby boy, and mom's doing well and so is the baby. Thanks for asking.

是的，我們的第一個孩子昨天下午出生了，是個男嬰，媽媽狀況很好，寶寶也很好。謝謝你的詢問。

Congratulations. Wonderful.

恭喜。精彩的。

Congratulations.

恭喜。

Thanks, Jana, Ric, and Andy. Take care.

謝謝賈娜、瑞克和安迪。小心。

All the best.

一切順利。

Thank you, everyone. That concludes today's Q&A portion of the call. (Operator Instructions)

謝謝大家。今天電話會議的問答部分到此結束。（操作員說明）

Thank you, everyone. That concludes today's call.

謝謝大家。今天的電話會議到此結束。