Kennametal Inc (KMT) 2022 Q4 法說會逐字稿

Good morning. I would like to welcome everyone to Kennametal's Fourth Quarter Fiscal 2022 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

早上好。我想歡迎大家參加 Kennametal 的 2022 財年第四季度收益電話會議。 （操作員說明）請注意，此事件正在記錄中。

I would now like to turn the conference to Kelly Boyer, Vice President of Investor Relations. Please go ahead.

我現在想把會議轉給投資者關係副總裁 Kelly Boyer。請繼續。

Thank you, operator. Welcome, everyone, and thank you for joining us to review Kennametal's Fourth Quarter and Fiscal 2022 Results. Yesterday evening, we issued our earnings press release and posted our presentation slides on our website. We will be referring to that slide deck on today's call.

謝謝你，接線員。歡迎大家，並感謝您加入我們審查 Kennametal 的第四季度和 2022 財年業績。昨天晚上，我們發布了我們的收益新聞稿，並在我們的網站上發布了我們的演示幻燈片。我們將在今天的電話會議中提到該幻燈片。

I'm Kelly Boyer, Vice President of Investor Relations. Joining me on the call today are Chris Rossi, President and Chief Executive Officer; and Pat Watson, Vice President and Chief Financial Officer. After Chris and Pat's prepared remarks, we will open the line for questions.

我是投資者關係副總裁 Kelly Boyer。今天和我一起參加電話會議的是總裁兼首席執行官 Chris Rossi；以及副總裁兼首席財務官 Pat Watson。在 Chris 和 Pat 準備好發言後，我們將打開電話提問。

At this time, I would like to direct your attention to our forward-looking disclosure statement. Today's discussion contains comments that constitute forward-looking statements and, as such, involve a number of assumptions, risks and uncertainties that could cause the company's actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements. These risk factors and uncertainties are detailed in Kennametal's SEC filings.

此時，我想請您注意我們的前瞻性披露聲明。今天的討論包含構成前瞻性陳述的評論，因此涉及許多假設、風險和不確定性，可能導致公司的實際結果、業績或成就與此類前瞻性陳述中表達或暗示的內容存在重大差異.這些風險因素和不確定性在 Kennametal 提交給美國證券交易委員會的文件中有詳細說明。

In addition, we will be discussing non-GAAP financial measures today. Reconciliations to GAAP financial measures that we believe are most directly comparable can be found at the back of the slide deck and on our Form 8-K on our website.

此外，我們今天將討論非 GAAP 財務指標。可以在幻燈片背面和我們網站上的 8-K 表格中找到我們認為最直接可比的 GAAP 財務指標的對賬。

And with that, I'll turn the call over to Chris.

有了這個，我會把電話轉給克里斯。

Thank you, Kelly. Good morning, everyone, and thanks for joining the call today. Before we get started, I'd like to recognize Pat Watson. This is his first call as our new Chief Financial Officer. Of course, many of you already know Pat from his most recent role as VP and Corporate Controller. And I've had the pleasure of working closely with him since I joined the company. I know he'll do a fantastic job for us as CFO.

謝謝你，凱利。大家早上好，感謝您今天加入電話會議。在我們開始之前，我想認識一下 Pat Watson。這是他作為我們新任首席財務官的第一個電話。當然，你們中的許多人已經認識了 Pat 最近擔任副總裁和公司財務總監的職務。自從我加入公司以來，我很高興與他密切合作。我知道他作為首席財務官會為我們出色地完成工作。

In his tenure at Kennametal, he's made significant contributions to the organization. He has held leadership roles that span from global finance and acquisitions to supply chain. And most importantly, his extensive knowledge of the company will continue to be instrumental in supporting our strategy to improve profitability and grow the company. Pat, welcome.

在 Kennametal 任職期間，他為該組織做出了重大貢獻。他曾擔任過從全球金融和收購到供應鏈的領導職務。最重要的是，他對公司的廣泛了解將繼續有助於支持我們提高盈利能力和發展公司的戰略。帕特，歡迎。

Thank you, Chris, and good morning, everyone. I'm excited to be named CFO at this pivotal time for Kennametal. We've had tremendous success transforming the company over the last several years, and I believe that there is significant potential for growth and margin expansion in our future, too. I'm excited by our potential, and I look forward to meeting many of you on the call today in person over the coming months.

謝謝你，克里斯，大家早上好。在肯納金屬的關鍵時刻，我很高興被任命為首席財務官。在過去的幾年裡，我們在公司轉型方面取得了巨大的成功，我相信我們未來也有巨大的增長和利潤率擴張潛力。我對我們的潛力感到興奮，我期待著在接下來的幾個月裡在今天的電話會議上與你們中的許多人會面。

Okay. Thanks, Pat. For today's call, I'm going to start with a review of the year, followed by an overview of the fourth quarter and our growth road map for our fiscal year '23 and beyond, including some examples of recent customer wins. From there, Pat will review the quarterly financial results and our outlook. And finally, I'll make some comments regarding our cash allocation strategy before opening the line for questions.

好的。謝謝，帕特。對於今天的電話會議，我將從回顧年度開始，然後概述第四季度和我們 23 財年及以後的增長路線圖，包括最近贏得客戶的一些例子。從那裡，帕特將審查季度財務業績和我們的前景。最後，在開始提問之前，我將對我們的現金分配策略發表一些評論。

Beginning on Slide 2. Fiscal year '22 was a very good year as we continue to transform the company. Sales were up 9% on organic growth of 11%, reflecting recovery in our end markets, pricing for value and to cover inflation and acceleration in our growth initiatives. Infrastructure reported 14% organic sales growth and metal cutting, 9%. All regions had positive growth with the Americas leading at 16%, EMEA at 10% and Asia Pacific at 2%.

從幻燈片 2 開始。22 財年是非常好的一年，因為我們繼續改造公司。銷售額增長 9%，有機增長 11%，反映了我們終端市場的複蘇、價值定價以及通脹和我們增長計劃的加速。基礎設施報告有機銷售增長 14%，金屬切削增長 9%。所有地區均實現正增長，其中美洲領先 16%，歐洲、中東和非洲地區為 10%，亞太地區為 2%。

Operating leverage was particularly strong year-over-year, reflecting success achieved in both our commercial and operational excellence initiatives. Adjusted operating margin increased 340 basis points year-over-year, a significant improvement, especially given the challenges, which included continuing supply chain issues, COVID-related lockdowns and absenteeism, the Ukraine conflict, high inflation and the effect of $25 million of temporary cost actions in the first half of fiscal year '21.

運營槓桿同比特別強勁，反映了我們在商業和運營卓越計劃中取得的成功。調整後的營業利潤率同比增長 340 個基點，這是一個顯著的改善，尤其是考慮到挑戰，其中包括持續的供應鏈問題、與 COVID 相關的封鎖和曠工、烏克蘭衝突、高通脹以及 2500 萬美元臨時措施的影響'21 財年上半年的成本行動。

Free operating cash flow for the year was $85 million, dampened by a higher cost of inventory and strategically holding additional safety stock to mitigate the effects of supply chain disruptions on our customers. In summary, we feel very good about delivering a solid year. We nimbly managed through many challenges, drove performance improvements and continue to advance our strategic initiatives.

該年度的自由經營現金流為 8500 萬美元，受庫存成本增加和戰略性地持有額外的安全庫存以減輕供應鏈中斷對我們客戶的影響的影響。總而言之，我們對實現穩健的一年感到非常滿意。我們靈活地應對了許多挑戰，推動了績效改進，並繼續推進我們的戰略計劃。

Let's turn to Slide 3 to review the Q4 results. We ended the year with sales up 3% to $530 million in Q4, which was at the top of our outlook range despite the effect of the lockdown in China and our exit from Russia. Together, these amounted to approximately $14 million in the quarter.

讓我們轉到幻燈片 3 來回顧第四季度的結果。今年第四季度，我們的銷售額增長了 3%，達到 5.3 億美元，儘管受到中國封鎖和我們退出俄羅斯的影響，但仍處於我們展望範圍的頂部。本季度這些總額總計約為 1400 萬美元。

The underlying organic growth rate was 7% year-over-year, offset by a 4% FX headwind from the strong U.S. dollar. On a year-over-year basis, all regions and end markets grew with aerospace, energy and earthworks posting double-digit increases and general engineering and transportation in the mid-single digits.

基本有機增長率為 7%，被強勢美元帶來的 4% 的外匯逆風所抵消。與去年同期相比，所有地區和終端市場均實現增長，航空航天、能源和土方工程實現兩位數增長，通用工程和運輸實現中個位數增長。

It's important to note that pricing represented a large amount of the sales increase in the quarter as we've been adjusting prices to mitigate the effects of higher inflation and based on the value delivered to customers.

值得注意的是，定價代表了本季度銷售額的很大一部分增長，因為我們一直在調整價格以減輕通脹上升的影響，並根據交付給客戶的價值。

As we've discussed on previous earnings calls, the underlying operating leverage of the business is masked when price covering cost becomes a large portion of the year-over-year sales change. So as expected, operating leverage in the fourth quarter was lower than the yearly average.

正如我們在之前的財報電話會議上所討論的那樣，當價格覆蓋成本成為同比銷售變化的很大一部分時，該業務的基本運營槓桿被掩蓋了。因此，正如預期的那樣，第四季度的經營槓桿低於年度平均水平。

Accordingly, Q4 adjusted EBITDA margin was relatively flat this quarter compared to the prior year at 19.1%, with net price offsetting raw material costs, operational excellence initiatives, higher volume and lower incentive compensation, mostly mitigating higher manufacturing costs, including costs from depreciation, COVID-19 absenteeism, supply chain constraints and FX. Free operating cash flow was $52 million for the quarter and adjusted EPS was flat year-over-year at $0.53.

因此，本季度第四季度調整後的 EBITDA 利潤率與去年同期相比相對持平，為 19.1%，淨價格抵消了原材料成本、卓越運營計劃、更高的產量和更低的激勵薪酬，主要緩解了更高的製造成本，包括折舊成本， COVID-19 缺勤、供應鏈限制和外匯。本季度自由經營現金流為 5200 萬美元，調整後每股收益與去年同期持平，為 0.53 美元。

Now I'd like to take a minute to reflect on our margin improvement over the last several years. Slide 4 compares the EBITDA margin in fiscal year '16, which was before we embarked on our transformation journey versus fiscal year '22. The sales in these 2 years were approximately the same, but margins now are 660 basis points higher. Thanks to the structural cost savings achieved from simplification/modernization and the additional benefits from our operational and commercial excellence initiatives in fiscal year '22. This is a significant accomplishment for the company and our teams with more margin expansion potential to come as volumes increase.

現在，我想花一點時間來回顧一下過去幾年我們的利潤率改善情況。幻燈片 4 比較了 '16 財年的 EBITDA 利潤率，這是在我們開始轉型之旅之前與 '22 財年相比。這兩年的銷售額大致相同，但現在利潤率高出 660 個基點。得益於簡化/現代化帶來的結構性成本節約，以及我們在 22 財年的運營和商業卓越計劃帶來的額外收益。這對於公司和我們的團隊來說是一項重大成就，隨著銷量的增加，我們的利潤增長潛力將更大。

As you know, modernization streamlined a lot of factory processes. For example, consider a factory that had 12 presses run by 12 operators before modernizing. Today, that same factory has 3 presses run by just 1 operator. Now in a lower volume environment, perhaps only 2 of the 3 presses are currently running. But as volume increases, third press will also be used an increase in productivity on higher volume without adding any capital or labor. Beyond these volume-related simplification/modernization benefits, our operational excellence initiatives such as Smart Factory will also drive further margin expansion and continued improvements in customer service levels.

如您所知，現代化簡化了許多工廠流程。例如，假設一家工廠在進行現代化改造之前擁有由 12 名操作員運行的 12 台印刷機。今天，同一家工廠只有 1 名操作員運行 3 台印刷機。現在在較低音量的環境中，3 台印刷機中可能只有 2 台目前正在運行。但隨著產量的增加，第三台印刷機也將用於在不增加任何資本或勞動力的情況下提高產量。除了這些與數量相關的簡化/現代化優勢之外，我們的智能工廠等卓越運營計劃還將推動利潤進一步擴大和客戶服務水平的持續改進。

This improved operational performance, combined with our commercial excellence initiatives is positioning us to win in our targeted end markets and applications. At its core, commercial excellence is about efficiently driving growth with new and existing customers. We're focused on flawless execution, using data to inform our commercial decisions and value-based pricing to get paid for the value we deliver to our customers.

這種改進的運營績效，再加上我們的商業卓越計劃，使我們能夠在目標終端市場和應用中獲勝。就其核心而言，卓越商業是關於有效地推動新客戶和現有客戶的增長。我們專注於完美執行，使用數據為我們的商業決策和基於價值的定價提供信息，從而為我們為客戶提供的價值獲得報酬。

So our extensive work to simplify our products and structure, modernize our factories and the early-stage results from commercial and operational excellence are driving increased profitability and set us up well to deliver on our growth road map, which is shown on Slide 5.

因此，我們在簡化產品和結構、實現工廠現代化以及商業和運營卓越的早期成果方面所做的大量工作正在推動盈利能力的提高，並使我們能夠很好地實現我們的增長路線圖，如幻燈片 5 所示。

This is a new slide that lays out the mega-trends, share gain initiatives and other growth areas that are positioning us for continued commercial success. Kennametal has long held a leadership position through innovative products and best-in-class customer support.

這是一張新幻燈片，列出了大趨勢、分享收益計劃和其他增長領域，這些領域使我們能夠持續取得商業成功。 Kennametal 長期以來一直通過創新產品和一流的客戶支持保持領先地位。

Now as I discussed, thanks to our modernization investments and ongoing operational excellence initiatives, we're in an even stronger position to drive improved customer service and greater productivity. And combined with our commercial excellence initiatives, we're driving a larger share of wallet with existing and new customers.

正如我所討論的，由於我們的現代化投資和持續的卓越運營計劃，我們在推動改進客戶服務和提高生產力方面處於更有利的地位。結合我們的商業卓越計劃，我們正在為現有客戶和新客戶爭取更大份額的錢包。

In addition to grow in our current base business in this way, there are several mega-trends that are well aligned with our technical expertise and market exposure. For example, we're a leader in EV, aerospace, wind energy and fossil fuel markets, and we'll continue to provide customers with products that provide productivity improvements in each of these growth areas. And for our many ESG-focused customers, we have solutions that will increase productivity while decreasing energy and resource consumption.

除了以這種方式增長我們當前的基礎業務之外，還有幾個大趨勢與我們的技術專長和市場曝光度非常吻合。例如，我們是電動汽車、航空航天、風能和化石燃料市場的領導者，我們將繼續為客戶提供能夠提高每個增長領域生產力的產品。對於我們許多關注 ESG 的客戶，我們的解決方案可以提高生產力，同時降低能源和資源消耗。

We're also focused on segments of our end markets and application spaces that we've historically underserved. Here's an example. We're cost-effectively extending our reach, especially with small to medium-sized customers through digital customer targeting and our digital customer experience platform.

我們還專注於我們歷來服務不足的終端市場和應用領域。這是一個例子。我們正在通過數字客戶定位和我們的數字客戶體驗平台經濟高效地擴展我們的業務範圍，尤其是針對中小型客戶。

Also, there are certain applications, including medical, micro parts and fit for purpose that we're expanding our product portfolio to serve through our existing channels. Similarly, we continue to gain share with aerospace customers, where we still have a relatively low share and in EV applications where we've established an early leadership position.

此外，還有某些應用，包括醫療、微型零件和適合我們正在擴展我們的產品組合以通過我們現有渠道提供服務的目的。同樣，我們繼續在航空航天客戶中獲得份額，在這些客戶中我們的份額仍然相對較低，並且在我們已經確立了早期領導地位的電動汽車應用中。

Finally, we have the opportunity to supplement our organic growth initiatives through acquisitions. Of course, we'll be disciplined and prudent in this pursuit, staying within our core areas of expertise. The targets will likely be bolt-on size and in regions, end markets or applications that were underserving.

最後，我們有機會通過收購來補充我們的有機增長計劃。當然，我們將在這一追求中保持紀律和謹慎，保持在我們的核心專業領域內。目標可能是附加規模以及服務不足的地區、終端市場或應用程序。

So that's a high-level view of our growth road map. And now we can turn to Slide 6 for some recent commercial wins that give us confidence in our ability to deliver this road map. As I mentioned, we're a leader in innovative tooling in the electric vehicle space. In this quarter, we secured our first major win with a supplier to an EV commercial van manufacturer in Europe. This new win was driven by the success of our innovative products designed specifically for electric vehicles that we've already demonstrated with other customers.

這是我們增長路線圖的高級視圖。現在我們可以轉向幻燈片 6，了解最近的一些商業勝利，這讓我們對我們交付此路線圖的能力充滿信心。正如我所提到的，我們是電動汽車領域創新工具的領導者。在本季度，我們與一家歐洲電動商用貨車製造商的供應商取得了第一次重大勝利。這一新的勝利是由我們專門為電動汽車設計的創新產品的成功推動的，我們已經向其他客戶展示了這些產品。

Another success story this quarter was with a tool manufacturer that is diversifying into the semiconductor space. They need a supplier with expertise in high metal renewable rates, tight tolerances and thin-walled machining, which is a difficult operation. This is a great example of how our technical and application engineering know-how benefits customers and positions us to win in challenging applications.

本季度的另一個成功案例是一家工具製造商正在向半導體領域進軍。他們需要一家在高金屬再生率、嚴格公差和薄壁加工方面具有專業知識的供應商，這是一項困難的操作。這是一個很好的例子，說明我們的技術和應用工程專業知識如何使客戶受益，並使我們在具有挑戰性的應用中獲勝。

Another major win this quarter was with a large aerospace customer that was on-shoring titanium parts manufacturing. In this instance, we provide tooling that significantly improved their productivity by reducing cycle time, 40% and tooling costs 50%. In the energy space, we continue to win with extrusion machining manufacturers applying our proprietary designs and consistent manufacturing techniques. These wins are opening doors for more opportunities globally.

本季度的另一項重大勝利是與一家大型航空航天客戶合作，該客戶在岸上生產鈦零件。在這種情況下，我們提供的工具通過減少 40% 的周期時間和 50% 的工具成本來顯著提高他們的生產力。在能源領域，我們繼續贏得應用我們專有設計和一致製造技術的擠壓加工製造商的青睞。這些勝利為全球更多機會打開了大門。

And finally, you may have seen GE Additive's press release earlier this quarter announcing we've joined their beta partner program, leveraging our proprietary material expertise for serial production on GE's Binder Jet system. This partnership is further evidence of our leadership position in tungsten carbides additive manufacturing. Again, these are specific examples of recent wins that align with our growth road map and serve to highlight our customer-focused innovation capabilities.

最後，您可能已經看到 GE Additive 本季度早些時候發布的新聞稿，宣布我們已加入他們的測試合作夥伴計劃，利用我們專有的材料專業知識在 GE 的 Binder Jet 系統上進行批量生產。這種夥伴關係進一步證明了我們在碳化鎢增材製造方面的領先地位。同樣，這些都是最近取得勝利的具體例子，與我們的增長路線圖相一致，並有助於突出我們以客戶為中心的創新能力。

And with that, let me turn the call over to Pat, who will discuss the quarterly results and outlook in more detail.

有了這個，讓我把電話轉給帕特，他將更詳細地討論季度業績和前景。

Thank you, Chris, and good morning again, everyone. Let me begin on Slide 7 with a review of our fourth quarter operating results on both a reported and an adjusted basis. We continue to successfully execute our initiatives during the quarter in the face of headwinds from inflation, lockdowns in China and foreign exchange.

謝謝你，克里斯，大家早上好。讓我從幻燈片 7 開始，回顧我們在報告和調整後的第四季度經營業績。面對通脹、中國封鎖和外匯等不利因素，我們在本季度繼續成功執行我們的舉措。

For the quarter, sales of $530 million improved 3% year-over-year and 7% on an organic basis from $560 million in the fourth quarter of last year. As a result of a strong U.S. dollar, foreign currency had a significant negative effect of 4% on sales and there was no effect due to business days.

本季度銷售額為 5.3 億美元，同比增長 3%，有機增長 7%，而去年第四季度為 5.6 億美元。由於美元走強，外幣對銷售額產生了 4% 的顯著負面影響，但由於工作日沒有影響。

Adjusted operating expenses decreased year-over-year to $102 million or 19.3% of sales. Adjusted EBITDA margin was relatively flat at 19.1% versus 19.2% in the prior year quarter. Maintaining our margin in this inflationary environment is a reflection of our focus on pricing for value and tight cost control.

調整後的運營費用同比下降至 1.02 億美元，佔銷售額的 19.3%。調整後的 EBITDA 利潤率相對持平，為 19.1%，而去年同期為 19.2%。在這種通脹環境中保持我們的利潤率反映了我們對價值定價和嚴格成本控制的關注。

For a bit of perspective, prior to the completion of simplification/modernization, the last time EBITDA margin exceeded 19% was during the third and fourth quarters of FY '19 when quarterly sales exceeded $600 million. This is another validation point of the structural cost improvements we have made over the last few years.

從某種角度來看，在完成簡化/現代化之前，EBITDA 利潤率上一次超過 19% 是在 19 財年的第三和第四季度，當時季度銷售額超過 6 億美元。這是我們在過去幾年中所做的結構成本改進的另一個驗證點。

The adjusted effective tax rate in the quarter was 27.6%, a more normalized level than the previous year due to higher pretax income this quarter. We reported GAAP earnings per share of $0.50 versus $0.41 in the prior year period. On an adjusted basis, EPS was $0.53, the same as in the prior year quarter. The main drivers of our adjusted EPS performance are highlighted on the bridge on Slide 8. The effect of operations this quarter amounted to approximately $0.05. This reflects price offsetting raw material cost increases, operational excellence initiatives, volumes and lower incentive compensation, mostly mitigating higher manufacturing costs, including costs from depreciation, COVID-related absenteeism and supply chain constraints. Taxes and currency both amounted to $0.03 this quarter. Detailed full year results and a full year EPS bridge can be found on Pages 17 and 18 in the appendix.

本季度調整後的有效稅率為 27.6%，由於本季度稅前收入較高，比上年更加正常化水平。我們報告的 GAAP 每股收益為 0.50 美元，而去年同期為 0.41 美元。經調整後，每股收益為 0.53 美元，與去年同期相同。我們調整後的每股收益表現的主要驅動因素在幻燈片 8 的橋上突出顯示。本季度運營的影響約為 0.05 美元。這反映了價格抵消原材料成本增加、卓越運營計劃、數量和較低的激勵薪酬，主要是降低了較高的製造成本，包括折舊成本、與 COVID 相關的缺勤和供應鏈限制。本季度稅收和貨幣均為 0.03 美元。詳細的全年業績和全年 EPS 橋樑可在附錄的第 17 頁和第 18 頁找到。

Slides 9 and 10 detail the favorable performance and continuing progress we have achieved in our segments this quarter. Metal cutting sales increased 7% organically. FX affected sales by a negative 6% in the quarter, and there was no effect from business days. The Americas and EMEA posted year-over-year sales increases, with the Americas increasing at 12% and EMEA at 6%. Asia Pacific declined by 1% due in large part to the COVID-19 lockdowns, which lasted approximately 2/3 of the quarter.

幻燈片 9 和 10 詳細介紹了本季度我們在各部門取得的良好業績和持續進展。金屬切削銷售額有機增長 7%。本季度外匯對銷售額的影響為負 6%，工作日沒有影響。美洲和歐洲、中東和非洲地區的銷售額同比增長，美洲增長 12%，歐洲、中東和非洲地區增長 6%。亞太地區下降了 1%，這在很大程度上是由於 COVID-19 封鎖持續了大約本季度的 2/3。

From an end market perspective, on a year-over-year basis, strength in demand is broad-based. Aerospace led again this quarter with strong double-digit growth of 21%. Energy was up 9%, followed by general engineering, up 6% and transportation at 4% despite ongoing supply chain challenges.

從終端市場的角度來看，與去年同期相比，需求強勁是基礎廣泛的。航空航天在本季度以 21% 的強勁兩位數增長再次領先。儘管供應鏈面臨持續挑戰，但能源增長 9%，其次是通用工程，增長 6%，運輸增長 4%。

Adjusted operating margin decreased slightly to 40 basis points year-over-year to 11.3% compared to 11.7% in the prior year quarter. Price offsetting raw material cost increases, operational excellence initiatives, volume and lower incentive compensation, mostly mitigated higher manufacturing costs, including costs from depreciation, COVID-19 absenteeism, supply chain constraints and FX.

調整後的營業利潤率同比小幅下降至 40 個基點至 11.3%，而去年同期為 11.7%。價格抵消了原材料成本的增加、卓越運營計劃、數量和較低的激勵補償，主要緩解了較高的製造成本，包括折舊、COVID-19 缺勤、供應鏈限制和外匯造成的成本。

Turning to Infrastructure on Slide 10. Organic sales increased 7% year-over-year in the quarter with FX a negative 2% effect and no effect due to business days. All regions grew with the largest increase year-over-year in Asia Pacific at 9%, the Americas at 7% and EMEA at 5%. All end markets were positive, with energy and earthworks up double digits at 12% and 10%, respectively, and general engineering up 1%.

在幻燈片 10 上轉向基礎設施。本季度有機銷售額同比增長 7%，外匯影響為負 2%，由於工作日沒有影響。所有地區的同比增幅最大的是亞太地區，為 9%，美洲為 7%，歐洲、中東和非洲地區為 5%。所有終端市場都是積極的，能源和土方工程分別增長了 12% 和 10% 的兩位數，通用工程增長了 1%。

Adjusted operating margin decreased slightly by 50 basis points to 14% from 14.5% in the prior year quarter. Reduced incentive compensation and the benefits from operational excellence initiatives partially mitigated manufacturing performance challenges due mainly from supply chain constraints and inflation. Price continues to cover raw material cost increases on a dollar basis.

調整後的營業利潤率從去年同期的 14.5% 小幅下降 50 個基點至 14%。減少激勵薪酬和卓越運營計劃帶來的好處部分緩解了主要由供應鏈限制和通貨膨脹造成的製造績效挑戰。價格繼續覆蓋以美元計算的原材料成本增加。

Now turning to Slide 11 to review our balance sheet and free operating cash flow. We continue to maintain a strong liquidity position, healthy balance sheet and debt maturity profile. During the quarter, we amended and extended our $700 million revolver, pushing the maturity out 5 years and removing the interest coverage covenant.

現在轉到幻燈片 11，查看我們的資產負債表和自由經營現金流。我們繼續保持強勁的流動性狀況、健康的資產負債表和債務到期狀況。在本季度，我們修改並延長了 7 億美元的左輪手槍，將到期期限延長了 5 年，並取消了利息保障契約。

At fiscal year-end, we had combined cash and revolver availability of approximately $767 million. Primary working capital increased year-over-year to $638 million due mainly to increases in inventory, partially offset by higher payables. As Chris mentioned, the increase in inventory was due mainly to higher raw material costs and a strategic decision to increase safety stocks of both raw materials and finished goods to meet customer needs in the current challenging supply chain environment.

在財政年度末，我們的現金和左輪手槍可用性合計約為 7.67 億美元。主要營運資金同比增加至 6.38 億美元，主要是由於庫存增加，部分被較高的應付賬款抵消。正如 Chris 所說，庫存增加主要是由於原材料成本上升以及在當前充滿挑戰的供應鏈環境中增加原材料和成品的安全庫存以滿足客戶需求的戰略決策。

On a percentage of sales basis, primary working capital decreased to 31.2%. Our fourth quarter free operating cash flow was $52 million, down from $65 million in the prior year quarter due mainly to higher inventory and higher capital spending. Net capital expenditures for the quarter were $37 million, an increase of $7 million from the prior year, bringing the total net capital spending for the year to $96 million.

按銷售額百分比計算，主要營運資金下降至 31.2%。我們第四季度的自由經營現金流為 5200 萬美元，低於去年同期的 6500 萬美元，主要是由於庫存增加和資本支出增加。本季度的淨資本支出為 3700 萬美元，比上年增加 700 萬美元，使本年度的總淨資本支出達到 9600 萬美元。

Capital was slightly lower than expected in the quarter mainly due to supply chain constraints and the associated challenges with equipment delivery. While we continue to invest in the business, we also continue to return cash to the shareholders. We paid a dividend of $17 million in the quarter and continued to execute our $200 million share repurchase program. In the quarter, $35 million of shares were repurchased, bringing the total to $85 million for the year. A full balance sheet can be found on Slide 19 in the appendix.

本季度資本略低於預期，主要是由於供應鏈限制和設備交付的相關挑戰。在我們繼續投資業務的同時，我們也繼續向股東返還現金。我們在本季度支付了 1700 萬美元的股息，並繼續執行 2 億美元的股票回購計劃。本季度，回購了 3500 萬美元的股票，使全年總額達到 8500 萬美元。完整的資產負債表可在附錄的幻燈片 19 中找到。

Now let's turn to Slide 12 and review the outlook. Starting with the first quarter, we expect sales to be in the range of $480 million to $500 million. At the midpoint, this implies a sequential decline of approximately 7.5%, slightly better than the normal seasonality of negative 8% to 10%.

現在讓我們轉到幻燈片 12 並回顧一下前景。從第一季度開始，我們預計銷售額將在 4.8 億美元至 5 億美元之間。在中點，這意味著連續下降約 7.5%，略好於負 8% 至 10% 的正常季節性。

As a reminder, we normally see a sequential drop in Q4 to Q1 due to the seasonality of the construction business and infrastructure and the summer holiday season in EMEA. FX is expected to be approximately a $30 million year-over-year revenue headwind in the quarter and a corresponding approximate $6 million operating income headwind.

提醒一下，由於建築業務和基礎設施的季節性以及歐洲、中東和非洲地區的暑假季節，我們通常會看到第四季度至第一季度的連續下降。 FX 預計在本季度將帶來約 3000 萬美元的同比收入逆風和相應的約 600 萬美元的營業收入逆風。

At the midpoint of this sales outlook, we have assumed there will be no significant change in the supply chain challenges in transportation. We have assumed that demand will not be adversely affected from further lockdown associated with COVID-19. And lastly, we are planning for the typical EMEA first quarter extended vacation and summer shutdowns for our customers.

在此銷售前景的中點，我們假設運輸中的供應鏈挑戰不會發生重大變化。我們假設與 COVID-19 相關的進一步封鎖不會對需求產生不利影響。最後，我們正在為我們的客戶計劃典型的 EMEA 第一季度延長假期和夏季停工。

Assuming our current market outlook, we expect adjusted operating income to be a minimum of $45 million, reflecting the inflationary environment that we are in. We expect our pricing actions of approximately $30 million to offset raw material, salary, and general inflation on a dollar basis.

假設我們目前的市場前景，我們預計調整後的營業收入至少為 4500 萬美元，這反映了我們所處的通貨膨脹環境。我們預計我們的定價行動約為 3000 萬美元，以抵消原材料、工資和一般通貨膨脹基礎。

Pension income remains positive, unlike most companies, but is expected to decline approximately $4 million due to lower return assumptions for our primary U.S. pension portfolio. It is important to note that our primary U.S. pension plan remains overfunded with no cash contributions expected to be needed.

與大多數公司不同，養老金收入仍然為正，但由於我們的主要美國養老金投資組合的回報假設較低，預計將下降約 400 萬美元。值得注意的是，我們的主要美國養老金計劃仍然資金過剩，預計不需要現金供款。

The adjusted effective tax rate is expected to be in the range of 26% to 28%, and depreciation and amortization will increase $3 million to $4 million year-over-year. Lastly, we expect free operating cash flow to be neutral, slightly better than the normal seasonal pattern.

調整後的有效稅率預計在26%至28%之間，折舊和攤銷將同比增加300萬至400萬美元。最後，我們預計自由經營現金流為中性，略好於正常的季節性模式。

For the full year outlook, let's turn to Slide 13. Visibility, particularly in the second half remains limited, but it is our assumption that underlying demand will continue to improve, albeit at a low rate. Energy, aerospace and earthworks are likely to lead our end markets and transportation is expected to continue to be challenged by supply chain constraints. General engineering will be affected by transportation and the general economy.

對於全年展望，讓我們轉向幻燈片 13。可見性，尤其是下半年，仍然有限，但我們假設潛在需求將繼續改善，儘管速度較低。能源、航空航天和土方工程可能會引領我們的終端市場，預計運輸將繼續受到供應鏈限制的挑戰。一般工程會受到交通和一般經濟的影響。

With regard to the quarterly sequence, we expect our sales to approximate the normal sequential growth patterns throughout the year. We have also assumed that the Ukraine conflict will continue to affect our customers, mainly in Europe, but that the availability and price of natural gas will not materially affect our business.

關於季度序列，我們預計我們的銷售額將接近全年的正常連續增長模式。我們還假設烏克蘭衝突將繼續影響我們的客戶，主要是歐洲客戶，但天然氣的供應和價格不會對我們的業務產生重大影響。

Also, as Chris mentioned, in this highly inflationary environment, the underlying operating leverage of the business is masked by significant price increases that are offsetting cost inflation on a dollar basis.

此外，正如克里斯所提到的，在這種高度通脹的環境中，企業的基本經營槓桿被顯著的價格上漲所掩蓋，這些價格上漲抵消了以美元計算的成本通脹。

Moving on to other variables for the full year. We expect an adjusted effective tax rate of 26% to 28%. Depreciation and amortization is expected to increase $15 million to $20 million year-over-year to a range of $140 million to $145 million. Pension income for the full year is expected to drop by approximately $14 million due to the lower return assumptions on the portfolio. Capital expenditures will be in the range of $100 million to $120 million since supply chain disruption and logistical constraints are expected to continue in the near term. Over the long term, we still expect the capital investment needs will be approximately $120 million per year.

繼續討論全年的其他變量。我們預計調整後的有效稅率為 26% 至 28%。折舊和攤銷預計將同比增加 1500 萬至 2000 萬美元，達到 1.4 億至 1.45 億美元的範圍。由於投資組合的回報假設較低，預計全年的養老金收入將減少約 1400 萬美元。由於供應鏈中斷和物流限制預計將在短期內繼續存在，資本支出將在 1 億美元至 1.2 億美元之間。從長遠來看，我們仍預計每年的資本投資需求約為 1.2 億美元。

Primary working capital is expected to be between 31% and 33% this year, reflecting our higher inventory strategies to mitigate supply chain risk. Together, these assumptions and forecasts are expected to translate to free operating cash flow generation of approximately 100% of adjusted net income, in line with our long-term target.

今年的主要營運資金預計將在 31% 至 33% 之間，這反映了我們為降低供應鏈風險而採取的更高庫存策略。總之，這些假設和預測預計將轉化為自由經營現金流產生，約佔調整後淨收入的 100%，符合我們的長期目標。

And with that, I'll turn it back over to Chris.

有了這個，我會把它交給克里斯。

Thanks, Pat. Please turn to Slide 14 for a summary of our capital allocation approach. On the left-hand table, you can see the capital allocation for fiscal year '16 through fiscal year '21. Many of you know this allocation approach quite well. Dividends have been a consistent method by which we return cash to shareholders. And I should note that we maintain the dividend throughout the downturn, which many companies were unable to do. But for the most part, our capital allocation during these years was focused on simplifying the company and modernizing our facilities. And in fact, we invested an incremental $300 million in CapEx and $200 million in cash restructuring costs during this time frame.

謝謝，帕特。請轉到幻燈片 14，了解我們的資本分配方法的摘要。在左側表格中，您可以看到從 '16 財年到 '21 財年的資本分配。你們中的許多人都非常了解這種分配方法。股息一直是我們向股東返還現金的一貫方法。而且我應該指出，我們在整個經濟低迷時期保持股息，這是許多公司無法做到的。但在大多數情況下，這些年來我們的資本配置主要集中在簡化公司和使我們的設施現代化。事實上，我們在這段時間內增加了 3 億美元的資本支出和 2 億美元的現金重組成本。

As I mentioned earlier, this capital allocation approach has served us well with margins increasing 660 basis points on approximately the same revenue level.

正如我之前提到的，這種資本分配方法對我們很有幫助，在大致相同的收入水平上，利潤率增加了 660 個基點。

Now that the simplification/modernization capital investments and restructuring are behind us, combined with our strong balance sheet and cash flow, we are executing on the capital allocation strategy shown in the right-hand table. There are 3 fundamental priorities here, capital investments, returning cash to shareholders and acquisitions.

現在簡化/現代化的資本投資和重組已經過去，再加上我們強大的資產負債表和現金流，我們正在執行右表所示的資本配置策略。這裡有 3 個基本優先事項，資本投資、向股東返還現金和收購。

Capital investments will continue to focus on keeping our modernized facility state-of-the-art, driving further productivity and customer service improvements and advancing our digital customer experience platform. We will also remain committed to returning cash to shareholders through a quarterly dividend and continuation of our stock repurchase program.

資本投資將繼續專注於使我們的現代化設施保持最先進的水平，進一步提高生產力和客戶服務，並推進我們的數字客戶體驗平台。我們還將繼續致力於通過季度股息和繼續我們的股票回購計劃向股東返還現金。

Finally, acquisitions, which we see as a strategic lever to accelerate growth in core areas of expertise and underserved regions, end markets and applications. Importantly, this capital allocation strategy works hand in hand with our growth road map and taken together, these reinforce our ability to invest in the company or growth.

最後，收購，我們將其視為加速核心專業領域和服務欠缺地區、終端市場和應用增長的戰略槓桿。重要的是，這種資本配置策略與我們的增長路線圖密切相關，並結合在一起，增強了我們投資公司或增長的能力。

Now please turn to Slide 15 for a brief summary before we open the call for questions. We had a great year in fiscal year '22, and I'd like to take this opportunity to congratulate the entire Kennametal team on the results. In fiscal year '23, we expect the end market recovery to continue, but visibility remains limited. Regardless, we've proven our ability to operate successfully in an uncertain macro environment. We'll continue to focus on the things we can control and executing our growth road map through our commercial and operational excellence initiatives.

現在，在我們開始提問之前，請轉到幻燈片 15 進行簡要總結。我們在 22 財年度過了美好的一年，我想藉此機會祝賀整個 Kennametal 團隊取得的成果。在 23 財年，我們預計終端市場將繼續復甦，但能見度仍然有限。無論如何，我們已經證明了我們在不確定的宏觀環境中成功運作的能力。我們將繼續專注於我們可以控制的事情，並通過我們的商業和運營卓越計劃來執行我們的增長路線圖。

And with that, operator, please open the line for questions.

有了這個，接線員，請打開問題線。

(Operator Instructions) Today's first question comes from Stephen Volkmann of Jefferies.

（操作員說明）今天的第一個問題來自 Jefferies 的 Stephen Volkmann。

If we could just lead off, Chris, can you just talk a little bit about the supply chain issues that you're seeing? And I'm curious if you can kind of delineate between what's impacting Kennametal directly and what is more indirect with respect to kind of your customers?

如果我們可以開始，克里斯，你能談談你看到的供應鏈問題嗎？我很好奇您是否可以在直接影響肯納金屬的因素和對您的客戶類型更間接的因素之間進行描述？

Sure, Steve. I would say that in general, the effects of the supply chain have been greater on our customers than also it manifests itself in a situation where they have -- they seem to have a lot of backlog and -- but they're constrained by how much they can produce. So that consequently holds back our revenue from what I think it would be higher if those supply chain constraints go away.

當然，史蒂夫。我想說的是，總的來說，供應鏈對我們客戶的影響比它在他們所擁有的情況下表現出來的影響更大——他們似乎有很多積壓，而且——但他們受到如何他們可以生產很多東西。因此，如果這些供應鏈限制消失，我認為這會阻礙我們的收入。

That being said, we do, especially in the infrastructure business, we have some forgings and castings and those type of things. But so far, Steve, we've worked our way through those type of supply chain constraints. So again, mostly the effect, Steve, is on the customers.

話雖如此，我們確實，特別是在基礎設施業務中，我們有一些鍛件和鑄件以及那些類型的東西。但到目前為止，史蒂夫，我們已經克服了這些類型的供應鏈限制。所以，史蒂夫，主要是影響客戶。

Of course, as you know, in transportation, that's what's really holding transportation back seems to be plenty of demand, but they're highly constrained because of the chip issue and then they had the Ukraine conflict with wiring harnesses and those type of things.

當然，如您所知，在運輸方面，真正阻礙運輸的似乎是大量需求，但由於芯片問題，他們受到了高度限制，然後他們在烏克蘭與線束之類的事情發生了衝突。

Okay. Great. And then maybe just a quick follow-up. You guys have said numerous times that you're sort of covering inflation costs with price on a dollar basis. But I'm wondering how you look at that longer term because obviously, if we're in an inflationary environment and this sort of continues, then covering it on a dollar basis is going to be kind of margin dilutive in perpetuity perhaps. So I'm wondering how this kind of plays out over time. Is there an opportunity to actually kind of recapture the margin as well as the dollars?

好的。偉大的。然後也許只是一個快速的跟進。你們已經多次說過，你們是以美元為基礎的價格來彌補通貨膨脹成本。但我想知道你如何看待這個長期的，因為顯然，如果我們處於通脹環境中並且這種情況持續下去，那麼以美元為基礎覆蓋它可能會永久稀釋保證金。所以我想知道隨著時間的推移這種情況會如何發展。是否有機會真正奪回利潤和美元？

Well, I think, Steve, first of all, I hope this high inflation is not in perpetuity, right? So we'll see what happens with the globe. But I think on the midterm, as you know, our long-term targets, they were predicated on a typical inflationary environment. So the current inflationary environment, as you correctly pointed out, when you do the math, we'll lower the margins with price just covering the inflationary effect.

好吧，我認為，史蒂夫，首先，我希望這種高通脹不會永遠存在，對吧？所以我們將看看地球會發生什麼。但我認為在中期，如你所知，我們的長期目標是基於典型的通脹環境。因此，正如您正確指出的那樣，當前的通貨膨脹環境，當您進行數學計算時，我們將降低利潤率，價格僅涵蓋通貨膨脹效應。

But that being said, and what we try to help you with, especially in the first quarter in terms of your modeling is we can still be confident in saying that the underlying operating leverage of the business that we would expect from the simplification/modernization investments, when there's actually a volume increase that equals piece volume to plants, we still feel very good that, that will lever at our typical -- in the typical range that I think many of the analysts on the phone are using something around 50%. So we're going to continue to try to provide you information so you can sort through that. But the underlying operating leverage still is within the business.

但話雖如此，我們試圖幫助您，特別是在第一季度就您的建模而言，我們仍然可以自信地說，我們期望從簡化/現代化投資中獲得的業務潛在運營槓桿，當實際上增加的數量等於工廠的單件數量時，我們仍然感覺非常好，這將在我們的典型範圍內發揮作用——在我認為電話中的許多分析師使用大約 50% 的典型範圍內。因此，我們將繼續嘗試為您提供信息，以便您對其進行分類。但潛在的經營槓桿仍然在企業內部。

Now the other thing is on pricing, we always are pricing for value. And we're going to continue to do that. And while we've been on that journey for a little while, I think there's still some more opportunity there. So that could help us eat into the effect of the math, Steve, but that's the way I'm thinking about it.

現在另一件事是定價，我們總是為價值定價。我們將繼續這樣做。雖然我們已經在這段旅程中走了一段時間，但我認為那裡還有更多的機會。所以這可以幫助我們理解數學的影響，史蒂夫，但我就是這麼想的。

And our next question today comes from Joe Ritchie at Goldman Sachs.

我們今天的下一個問題來自高盛的喬·里奇。

Congratulations, Pat, on the new opportunity. I look forward to working with you. So can you maybe just kind of start by just -- you guys have given a lot of good details on some of the puts and takes for 2023. Can you maybe just give us a little bit more on just like how you expect the cadence of the year to go? And if you could provide any commentary, particularly around like tungsten pricing, how that's impacting the business today and how you would expect it to impact that going forward, that would be helpful.

恭喜帕特，有了新的機會。我期待著與您合作。所以你能不能從剛剛開始——你們已經提供了很多關於 2023 年的一些看跌期權的很好的細節。你能不能給我們更多一點，就像你期望的節奏一樣一年去？如果你能提供任何評論，特別是像鎢定價這樣的評論，這將如何影響今天的業務，以及你預計它將如何影響未來，那將是有幫助的。

Yes. I think the cadence in terms of revenue, we expect to follow the normal sequential pattern, Joe. And if you listen to Pat in his opening remarks, that's based on a view or an outlook of the year that's sort of flat to maybe some growth, right?

是的。我認為就收入而言的節奏，我們希望遵循正常的順序模式，喬。如果你聽帕特在他的開場白中說的話，那是基於一種觀點或對今年的展望，這種觀點或展望有點平淡，可能會有一些增長，對吧？

So we're assuming, for example, that transportation is sort of flattish, and we're not expecting any major improvement in their supply chain constraints. But they are working on the problem, and it is expected to get better. So that could be an opportunity in terms of doing something with revenue that's higher than the sequentials. We also know that energy continues to be strong. And then same thing with aerospace, that continues to recover.

因此，我們假設，例如，運輸有點平淡，我們預計他們的供應鏈限制不會有任何重大改善。但是他們正在解決這個問題，並且預計會變得更好。因此，就收入高於連續收入的情況而言，這可能是一個機會。我們也知道，能源繼續強勁。航空航天也是如此，它繼續恢復。

The other -- the real question is, is general engineering, and that's certainly affected by transportation. But we've kind of tried to assume that it linked to sort of the general manufacturing indices, which are tied to GDP and those kind of things. And so, we're assuming that is still kind of flat. If you look at a lot of the manufacturing indices, they have moderated, but they're still in positive territory.

另一個——真正的問題是，通用工程，這肯定會受到交通的影響。但我們有點試圖假設它與某種一般製造業指數相關，這些指數與 GDP 等相關。所以，我們假設它仍然是平的。如果您查看許多製造業指數，它們已經放緩，但仍處於正值區域。

So our feeling is that things could actually get better based on our underlying assumption that we're going to simply follow the normal seasonal trend, right? And then your next question was what? I'm sorry. Can you tell -- can you repeat it?

所以我們的感覺是，基於我們將簡單地遵循正常的季節性趨勢的基本假設，事情實際上會變得更好，對吧？然後你的下一個問題是什麼？對不起。你能告訴——你能重複一遍嗎？

Sure. Yes, no problem. Just the impact of tungsten, what impact that's having on your business today? I know that you tend to benefit in a rising tungsten environment, but then there is some margin pressure as tungsten starts to come down. So just curious to see how that's expected to impact 2023.

當然。是沒有問題。就鎢的影響而言，它對您今天的業務有何影響？我知道您往往會在鎢價上漲的環境中受益，但隨著鎢價開始下跌，您會面臨一些利潤壓力。所以很想知道這對 2023 年有何影響。

Yes. So given our outlook, what I basically said is that volumes will be sort of flat to maybe slightly increasing. And in that environment, we expect the tungsten prices to be stable. But you are right, if volume does dramatically reduce, that's when -- especially in infrastructure or the APT price comes down, there is an adjustment in prices that we have to factor in. But we're not expecting that to be the case in FY '23, but you've got the right modeling thought process in your head.

是的。因此，鑑於我們的前景，我基本上所說的是交易量將持平或略有增加。在這種環境下，我們預計鎢價將保持穩定。但你是對的，如果數量確實大幅減少，那就是——尤其是在基礎設施或 APT 價格下降時，我們必須考慮價格調整。但我們預計不會出現這種情況23 財年，但您的腦海中已經有了正確的建模思維過程。

And then the other [impact] was frankly, I think we took a lot of the inventory increase was just purely on the paying for higher material costs which was driven by the tungsten.

然後另一個[影響]坦率地說，我認為我們採取了很多庫存增加純粹是為了支付由鎢驅動的更高的材料成本。

If I could sneak one more in, just -- so kind of like a flat volume environment, clearly, you guys have made a lot of improvements behind the scenes and you've referenced some of those on the modernization initiatives. How do you think about then like the -- I know there's not a perfect way to measure drop-through in a flat environment. But how do you think of like the potential margin improvement that we should still see in a flat environment as we head into next year?

如果我可以再偷偷摸摸一下，就 - 有點像一個扁平體積的環境，很明顯，你們在幕後做了很多改進，你們已經參考了一些關於現代化計劃的改進。你怎麼想然後像 - 我知道在平坦的環境中沒有一種完美的方法來測量直通。但是，您如何看待我們在進入明年的平穩環境中仍應看到的潛在利潤率改善？

Yes. I think -- I guess what I would tell our investors is that we're -- we clearly, based on our modernization investments will benefit as higher piece volume runs through the factory. But your question is in a scenario where that's just kind of flat. And so that's one of the reasons why we teed up this operational excellence initiative we've been talking about is there -- we still are expecting our plans to drive productivity even in flat volume, year-over-year. That's just what good companies do.

是的。我認為 - 我想我會告訴我們的投資者的是，我們 - 我們顯然，基於我們的現代化投資將受益於更高的單件產量通過工廠運行。但你的問題是在一個有點平淡的情況下。因此，這就是我們啟動我們一直在談論的這項卓越運營計劃的原因之一——我們仍然期待我們的計劃能夠提高生產力，即使是同比持平。這正是好公司所做的。

And now that we've got a modernized footprint, we've got sort of a good baseline to build off of that. So our expectation is we're still going to drive productivity improvement. And as I mentioned, we'll try to -- as we go through the year, we'll try to highlight that. But given the high inflation and the price covering inflation, that tends to dampen the math. So we're going to try -- we'll try to sort that out for you, Joe. But there is an expectation that we drive improved margins even in a flat environment.

現在我們有了一個現代化的足跡，我們有了一個很好的基線來建立它。所以我們的期望是我們仍然會推動生產力的提高。正如我所提到的，我們會努力——隨著這一年的過去，我們會努力強調這一點。但考慮到高通脹和覆蓋通脹的價格，這往往會抑制數學。所以我們會嘗試——我們會嘗試為你解決這個問題，喬。但是，即使在平坦的環境中，我們也有望提高利潤率。

And our next question today comes from Julian Mitchell of Barclays.

我們今天的下一個問題來自巴克萊銀行的朱利安·米切爾。

I look forward to working more with you, Pat. In terms of, I guess, my first question, really on that margin point. So in the current or first fiscal quarter, you've got sort of flat to slightly up volumes year-on-year, operating margin down year-on-year, maybe 100, 150 bps. So just trying to understand, in light of your previous comment around trying to sort of work to get margins up. If we do see that sort of similar very low single-digit volume growth for the year as a whole, like you're seeing in Q1, when do you think the margins might be able to turn up year-on-year based on current sort of price initiatives and the cost outlook?

我期待著與你更多地合作，帕特。我想，就我的第一個問題而言，真的是在那個邊緣點上。因此，在當前或第一財季，銷量同比持平或略有上升，營業利潤率同比下降，可能下降 100、150 個基點。因此，根據您之前關於嘗試通過工作來提高利潤率的評論，只是想了解一下。如果我們確實看到全年類似的非常低的個位數增長，就像你在第一季度看到的那樣，你認為利潤率何時能夠根據當前的同比增長什麼樣的價格舉措和成本前景？

Yes. I think when we look at that outlook, Julian, because there's so many moving pieces here, one of the big ones is obviously we've taken pricing actions and the timing of which those begin to flow through the P&L, along with our assumptions on covering inflation, it's not an exact science as to how the costs are going to roll in. We feel that pretty good on an annualized basis. The price will cover the inflation on a dollar basis. But in any given quarter, where we exactly are in that process is -- has some risk to it. And I think, frankly, that as we did the roll-up from the various segments, there might be a little conservatism in there in terms of where we're going to be on that curve. That will just be natural balance.

是的。朱利安，我認為當我們看到這種前景時，因為這裡有很多變動因素，其中一個重要因素顯然是我們已經採取了定價行動以及這些行動開始流經損益表的時間，以及我們對涵蓋通貨膨脹，這並不是關於成本將如何滾動的精確科學。我們認為按年計算相當不錯。價格將以美元為基礎覆蓋通貨膨脹。但是在任何給定的季度，我們在這個過程中的確切位置 - 都有一些風險。坦率地說，我認為，當我們從各個部分進行匯總時，就我們將在該曲線上的位置而言，可能存在一些保守主義。那將是自然的平衡。

And then I think the -- I think as I talked about the revenue, I think we're being pretty conservative on where we are with revenue. And I think the strength of our end markets are there, but there are some issues on a regional basis, like just how quickly China will recover from all their lockdowns. And then, of course, everyone is watching Europe to see what will happen there.

然後我認為 - 我認為當我談到收入時，我認為我們在收入方面非常保守。而且我認為我們終端市場的實力是存在的，但是在區域基礎上存在一些問題，例如中國將多快從所有封鎖中恢復過來。然後，當然，每個人都在關注歐洲，看看那裡會發生什麼。

So I think there's some potential versus what the outlook would say in terms of driving higher margins. It's just naturally, Julian, there's so many moving pieces that I think our guys, frankly, might be a little bit conservative because some of the stuff they just don't know. We're in a little bit of a different environment than we've ever operated before.

因此，我認為在推動更高的利潤率方面，與前景所說的相比，存在一些潛力。很自然，朱利安，有這麼多動人的東西，坦率地說，我認為我們的人可能有點保守，因為有些東西他們只是不知道。我們所處的環境與以前的運營環境略有不同。

That's fair. But I guess the point would be, Chris, even when the margins are turning, it's sort of second half of the fiscal year is when you're likely to see margins expand. Is that fair?

這還算公平。但我想關鍵是，克里斯，即使利潤率正在轉變，在本財年的下半年，你很可能會看到利潤率擴大。這公平嗎？

Yes. I think that that would be a reasonable assumption because that's when volumes will start to -- as we said, we've sort of forecasted flat to increase in volumes, and that would happen in the second half of the year, assuming based on the assumptions that Pat had laid out.

是的。我認為這將是一個合理的假設，因為那時銷量將開始——正如我們所說，我們預測銷量會持平增加，這將在下半年發生，假設基於帕特提出的假設。

And then just a quick follow-up on the sort of the price and the cost commentary. So I think you've talked about that price tailwind of $30 million in the current quarter. Just to understand, so that -- I think you said that's covering the raw material, wage and general inflation cost. Is that right that $30 million covers all those kind of 3 cost buckets?

然後只是對價格和成本評論的快速跟進。所以我認為你已經談到了本季度 3000 萬美元的價格順風。只是為了理解，所以--我想你說的是原材料、工資和一般通貨膨脹成本。 3000 萬美元涵蓋所有這 3 個成本桶，對嗎？

And just to understand, is it apples-to-apples, when you talk about the $22 million raw material cost increase in Q4, is that just raw mats, excluding wages and general inflation? Just trying to understand those numbers a bit better.

只是為了理解，當你談到第四季度 2200 萬美元的原材料成本增加時，是否只是生墊，不包括工資和一般通貨膨脹？只是想更好地理解這些數字。

Yes, Julian. So yes, when we think about the $30 million in the first quarter, absolutely, that is covering, I'll call it, all 3 sources of inflation, material, wage and general. And yes, as we talked about the $22 million in the fourth quarter, that is purely just raw material.

是的，朱利安。所以是的，當我們考慮到第一季度的 3000 萬美元時，這絕對涵蓋了，我稱之為通脹的所有 3 個來源，即材料、工資和一般性。是的，正如我們談到第四季度的 2200 萬美元，這純粹是原材料。

And our next question today comes from Chris Dankert at Loop Capital.

我們今天的下一個問題來自 Loop Capital 的 Chris Dankert。

I guess, Chris, any thoughts of cost savings goals you're tied to kind of the Smart Factory and productivity initiatives for fiscal '23? Or just really more into offsetting wage and other manufacturing cost increases here?

我想，克里斯，您對 23 財年的智能工廠和生產力計劃相關的成本節約目標有什麼想法嗎？或者只是在這裡更多地抵消工資和其他製造成本的增加？

Yes. On the productivity, well, as we talked about, we're -- we believe that the environment and so far, the competitors' reaction to prices that we should be able to cover those 3 sources of inflation with price. So on the productivity side, we kind of look at that as what is best-in-class sort of driving productivity. And those are the expectations we set for our factories. So it's more of a goal based on what we think is -- what equals operational excellence versus we back into a cost number and so you got to go for that productivity, if that makes sense.

是的。關於生產力，好吧，正如我們所談到的，我們相信環境以及迄今為止競爭對手對價格的反應，我們應該能夠用價格覆蓋這三個通脹來源。因此，在生產力方面，我們將其視為一流的生產力驅動方式。這些是我們為工廠設定的期望。因此，它更多地是基於我們認為的目標 - 等於卓越運營而不是我們回到成本數字，所以如果有意義的話，你必須追求這種生產力。

Yes, that does make sense. Okay. And then I guess, thinking about the midpoint of margin guidance low end, midpoint, however you guys want to frame it up on the margin guidance for fiscal 1Q. I mean it's down meaningfully year-over-year. I assume tungsten and price costs are the key headwind there, but anything else you could kind of unpack in terms of the moving parts around the margin guidance?

是的，這確實有道理。好的。然後我想，考慮到利潤率指導低端的中點，中點，但是你們想在第一財季的利潤率指導上構建它。我的意思是它比去年有意義地下降了。我認為鎢和價格成本是那裡的主要不利因素，但就利潤率指導周圍的移動部分而言，您還有什麼可以解開的嗎？

Yes. I think we unpacked that the margin for the first quarter, a couple of drivers. Number one is we talk about the FX and the $60 million headwind from an operating income perspective. And then on the price piece, basically just simply offsetting the cost inflation that we have in the business. And as Chris commented a little bit earlier, there's probably a little bit of conservatism in there as well as we think about where that number sits in from the outlook perspective.

是的。我認為我們打開了第一季度的利潤，幾個司機。第一個是我們從營業收入的角度談論外彙和 6000 萬美元的逆風。然後在價格方面，基本上只是簡單地抵消了我們在業務中的成本膨脹。正如克里斯早些時候評論的那樣，那裡可能有一點保守主義，我們從前景的角度考慮這個數字的位置。

Okay. I guess trying to understand that piece though, as we look at the full year in terms of what the implication is for margin, I mean, $30 million in the first quarter for pricing, what are you kind of assuming in terms of full year price at this point just based on what you've announced, I suppose?

好的。我想我想試著理解那部分，當我們從對利潤率的影響來看全年時，我的意思是，第一季度的定價為 3000 萬美元，你對全年價格有什麼假設在這一點上只是基於你宣布的，我想？

In terms of when we think about the full year, obviously, we've given some color here for the first quarter. What we would expect over the course of the year is that it will still cover the raw material. And so you're not going to see from a margin perspective, margins expanding based on price.

就我們何時考慮全年而言，顯然，我們已經為第一季度提供了一些顏色。我們對這一年的預期是它仍將涵蓋原材料。因此，您不會從利潤率的角度看到，利潤率會根據價格擴大。

Thank you. And ladies and gentlemen, this concludes the question-and-answer session. I'd like to turn the conference back over to Chris Rossi for closing remarks.

謝謝你。女士們，先生們，問答環節到此結束。我想把會議轉回給 Chris Rossi 做閉幕詞。

Thanks, operator, and thanks, everyone, for joining the call today. As I said, we feel very good about FY '22 despite the challenging environment that we are operating in. And I'm really looking forward to FY '23. I'm confident that we're going to make great progress on our initiatives, which include executing and delivering on that growth math through our commercial and operational excellence initiatives. As always, I appreciate everyone's interest and support and reach out to Kelly, if you have any follow-up questions. Thank you.

謝謝接線員，謝謝大家今天加入電話會議。正如我所說，儘管我們所處的環境充滿挑戰，但我們對 22 財年的感覺非常好。我真的很期待 23 財年。我相信我們將在我們的計劃上取得巨大進展，其中包括通過我們的商業和運營卓越計劃執行和交付增長數學。與往常一樣，我感謝大家的興趣和支持，如果您有任何後續問題，請與凱利聯繫。謝謝你。

Thank you. A replay of this event will be available approximately 1 hour after its conclusion. To access the replay, you may dial toll free within the United States, (877) 344-7529. Outside of the United States, you may dial (412) 317-0088. You will be prompted to enter the conference ID of 865-5139 and then the pound or hash symbol. You will be asked to record your name and company.

謝謝你。此事件的重播將在結束後大約 1 小時提供。要訪問重播，您可以撥打美國境內的免費電話 (877) 344-7529。在美國境外，您可以撥打 (412) 317-0088。系統將提示您輸入會議 ID 865-5139，然後輸入井號或井號。您將被要求記錄您的姓名和公司。

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

本次會議現已結束。感謝您參加今天的演講。您現在可以斷開線路。