Kennametal Inc (KMT) 2023 Q3 法說會逐字稿

Good morning. I would like to welcome everyone to Kennametal's Third Quarter Fiscal 2023 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded.

早上好。歡迎大家參加肯納金屬 2023 財年第三季度收益電話會議。 （操作員說明）請注意此事件正在被記錄。

I would now like to turn the conference over to Michael Pici, Vice President of Investor Relations. Please go ahead.

現在我想將會議交給投資者關係副總裁邁克爾·皮奇 (Michael Pici)。請繼續。

Thank you, operator. Welcome everyone, and thank you for joining us to review Kennametal's third quarter fiscal 2023 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 throughout today's call. I'm Michael Pici, 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.

謝謝你，接線員。歡迎大家，並感謝您與我們一起回顧肯納金屬 2023 財年第三季度的業績。昨天晚上，我們發布了收益新聞稿，並在我們的網站上發布了演示幻燈片。我們將在今天的電話會議中提到該幻燈片。我是邁克爾·皮奇 (Michael Pici)，投資者關係副總裁。今天和我一起參加電話會議的是總裁兼首席執行官克里斯·羅西 (Chris Rossi)；副總裁兼首席財務官帕特·沃森 (Pat Watson)。在克里斯和帕特准備好發言後，我們將開放提問熱線。

At this time, I'd like to direct your attention to our forward-looking disclosure statement. Today's discussions contain 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 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，這些假設、風險和不確定性可能導致公司的實際結果、業績或成就與此類陳述中表達或暗示的結果、業績或成就存在重大差異。這些風險因素和不確定性在肯納金屬向 SEC 提交的文件中有詳細說明。

In addition, we will be discussing non-GAAP financial measures on the call 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，我們將在今天的電話會議上討論非公認會計準則財務指標。我們認為最直接可比的 GAAP 財務指標的調節表可以在幻燈片後面和我們網站上的 8-K 表格中找到。

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

這樣，我會將電話轉給克里斯。

Thank you, Mike. Good morning and thank you for joining us. I'll start the call today with a review of the quarter and a few recent customer wins, as well as an example of the industry-leading innovations we're bringing to market. Then Pat will cover the quarterly financial results, as well as the outlook. Finally, I'll make some summary comments and then open the call for questions.

謝謝你，邁克。早上好，感謝您加入我們。我將在今天的電話會議開始時回顧本季度和最近贏得的一些客戶，以及我們向市場推出的行業領先創新的示例。然後帕特將介紹季度財務業績以及前景。最後，我將做一些總結性評論，然後開始提問。

Beginning on Slide 2 in the presentation. In the quarter, we delivered year-over-year organic sales growth and continued the successful advancement of our strategic initiatives, while navigating various macroeconomic headwinds. Those headwinds included high inflation, foreign exchange and a slower reopening in China post the COVID-related disruptions in the prior quarter. Sales increased year-over-year at 8% organically with favorable business days of 1%, offset by negative foreign exchange of 4%. At the segment level, Metal Cutting grew 10% and Infrastructure grew 5%. As expected, price continues to be a significant part of the sales increase and is one of the strategic levers we are using to offset inflation. Additionally, we experienced strong volume growth driven by Metal Cutting, which was towards the high end of the volume range that was provided on our last call. Sequentially, sales grew 8% driven by increased volume and lower FX headwinds this quarter.

從演示文稿中的幻燈片 2 開始。本季度，我們實現了同比有機銷售增長，並繼續成功推進我們的戰略舉措，同時克服了各種宏觀經濟不利因素。這些不利因素包括高通脹、外匯以及上一季度因新冠疫情造成的干擾後中國經濟重新開放速度放緩。銷售額同比有機增長 8%，有利營業日 1%，被 4% 的負外匯所抵消。在細分市場層面，金屬切削增長 10%，基礎設施增長 5%。正如預期的那樣，價格仍然是銷售增長的重要組成部分，也是我們用來抵消通貨膨脹的戰略槓桿之一。此外，我們在金屬切削的推動下實現了強勁的銷量增長，接近我們上次電話會議中提供的銷量範圍的高端。隨後，在本季度銷量增加和外匯不利因素減少的推動下，銷售額增長了 8%。

On a constant currency basis, EMEA posted 14% growth, which included a negative 150 basis point effect due to our Russia exit, and the Americas grew 8% driven by Aerospace, General Engineering, Energy and Transportation end markets. Asia Pacific reported 1% growth reflecting a slower recovery from COVID disruptions in China, as well as lower Transportation and Energy end market demand.

按固定匯率計算，歐洲、中東和非洲地區增長了 14%，其中包括由於退出俄羅斯而產生的 150 個基點的負效應，美洲地區在航空航天、通用工程、能源和運輸終端市場的推動下增長了 8%。亞太地區增長 1%，反映出中國從新冠肺炎疫情中斷中復甦的速度較慢，以及運輸和能源終端市場需求下降。

By end market, Aerospace reported 25% growth, Energy and General Engineering grew 9%, Transportation grew 5% and earthworks grew 1%. Overall, we expect our end markets to remain resilient for the balance of our fiscal year. Of course, we recognize that there are still risks in the global economy. However, as I've said several times before, we believe we are well positioned in all our end markets, despite these uncertainties and challenges. In Aerospace, although aircraft build rates are still well below pre-pandemic levels, we continue to gain greater share of wallet, which positions us well for continued growth as build rates improve. In Energy, we have seen improvement as oil and gas customers, inventory management actions stabilized versus last quarter. Based on customer feedback, we're optimistic that a long-term growth trend is underway. In addition, our products and solutions serve both renewables and traditional energy markets, which positions us well to benefit from increased demand in both. We expect General Engineering to remain steady despite some moderation in industrial production as we reach new customers through our digital customer experience platform. Transportation increased mid-single digits this quarter with strong growth in both the Americas and EMEA, while we experienced lower demand in Asia Pacific. We anticipate this end market to strengthen as supply chains improve and China reopens. Remember, we maintain a leading position in both, traditional and emerging transportation applications and will benefit from the technical and market leadership positions we're establishing in tooling for hybrid and electric vehicles to take advantage of this mega trend.

按終端市場來看，航空航天增長 25%，能源和通用工程增長 9%，運輸增長 5%，土方工程增長 1%。總體而言，我們預計我們的終端市場在本財年的剩餘時間內將保持彈性。當然，我們也認識到全球經濟仍然存在風險。然而，正如我之前多次說過的那樣，儘管存在這些不確定性和挑戰，我們相信我們在所有終端市場都處於有利地位。在航空航天領域，儘管飛機建造率仍遠低於大流行前的水平，但我們繼續獲得更大的錢包份額，這使我們能夠隨著建造率的提高而持續增長。在能源方面，隨著石油和天然氣客戶的庫存管理行動與上季度相比趨於穩定，我們看到了改善。根據客戶反饋，我們樂觀地認為長期增長趨勢正在發生。此外，我們的產品和解決方案服務於可再生能源和傳統能源市場，這使我們能夠從這兩個市場不斷增長的需求中受益。儘管工業生產有所放緩，但隨著我們通過數字客戶體驗平台接觸新客戶，我們預計通用工程將保持穩定。本季度運輸業務增長了中個位數，美洲和歐洲、中東和非洲地區均出現強勁增長，而亞太地區的需求則有所下降。我們預計，隨著供應鏈的改善和中國的重新開放，這一終端市場將會走強。請記住，我們在傳統和新興交通應用領域均保持領先地位，並將受益於我們在混合動力和電動汽車工具領域建立的技術和市場領導地位，以利用這一大趨勢。

And finally, earthworks continues to benefit from strong underground mining activities in Asia Pacific and modest growth in EMEA. In the Americas, we anticipate future opportunities from increased government spending on infrastructure projects, including trenching for Internet, electric grid expansion and for road rehabilitation as these funds begin to work through the federal, state and local procurement processes. Customers we spoke with at CONEXPO indicated that the flow of funds process does take time, but remain confident in the growth potential from this bill. So, while there are still some uncertainties in the current macro environment, we're working to ensure that we perform well in all scenarios. Right now, we feel good about the underlying long-term growth drivers and potential in our end markets, and we believe we are well positioned in each.

最後，土方工程繼續受益於亞太地區強勁的地下採礦活動和歐洲、中東和非洲地區的適度增長。在美洲，隨著這些資金開始通過聯邦、州和地方採購流程發揮作用，我們預計政府在基礎設施項目上增加支出將帶來未來的機遇，包括互聯網挖溝、電網擴建和道路修復。我們在 CONEXPO 上採訪的客戶表示，資金流動過程確實需要時間，但對該法案的增長潛力仍然充滿信心。因此，儘管當前宏觀環境仍存在一些不確定性，但我們正在努力確保我們在所有情況下都有良好表現。目前，我們對終端市場潛在的長期增長動力和潛力感到滿意，並且相信我們在每個市場都處於有利地位。

Turning now to profitability in the quarter. As mentioned earlier, price was a significant portion of the year-over-year sales increase and the pricing actions taken in both business segments substantially covered all forms of inflation on a dollar basis. Metal Cuttings volume came through at the expected operating leverage and operating margins increased year-over-year despite the muting effects of foreign exchange. The Infrastructure segment accounts for the change in company operating margins year-over-year. As I mentioned last quarter, we intentionally extended the shutdowns of powder production into January. As a result of these actions, and as anticipated this quarter, we experienced under-absorption in the Infrastructure segment. This action enabled us to lower inventory levels and take advantage of an improving supply chain. We continue to expect Infrastructure margins to significantly improve in the fourth quarter, reaching a level that is approximately equal to the first quarter. Pat will go into more detail on Metal Cutting and Infrastructure margins in his section.

現在轉向本季度的盈利能力。如前所述，價格是同比銷售額增長的重要組成部分，兩個業務部門採取的定價行動基本上涵蓋了以美元計的所有形式的通貨膨脹。儘管外匯影響不大，但金屬切屑量仍達到了預期的運營槓桿，運營利潤率仍同比增長。基礎設施部門導致了公司營業利潤率的同比變化。正如我上個季度提到的，我們有意將粉末生產的停工期延長至一月份。由於這些行動，正如本季度預期的那樣，我們在基礎設施領域經歷了吸收不足的情況。這一行動使我們能夠降低庫存水平並利用不斷改善的供應鏈。我們繼續預計第四季度基礎設施利潤率將顯著改善，達到與第一季度大致持平的水平。帕特將在他的部分中詳細介紹金屬切削和基礎設施利潤。

Well, let me just say that in general, we certainly have opportunities ahead for even greater margin improvement. Company-wide, we remain focused on driving improved profitability through operational excellence by improving manufacturing and business process productivity and fixed costs, and through optimizing investments in commercial excellence and technology to target our highest return growth initiatives.

好吧，我只想說，總的來說，我們肯定有機會進一步提高利潤率。在全公司範圍內，我們仍然專注於通過卓越運營來提高盈利能力，通過提高製造和業務流程生產力和固定成本，並通過優化對商業卓越和技術的投資來實現我們最高回報的增長計劃。

Operating expense as a percentage of sales was slightly higher compared to prior year at 21.1% this quarter. Adjusted EPS declined to $0.39 compared to $0.47 in the prior year quarter, with the decline largely driven by the factors I discussed. Free operating cash flow this quarter increased significantly to $56 million from $13 million in the prior year quarter despite a year-over-year increase in primary working capital, driven mainly by higher raw material costs and safety stock. And finally, we continued the share repurchase program this quarter with $7 million of shares bought back, bringing the total amount repurchased since the beginning of the program to $123 million. Our share repurchase program reflects the confidence we have in our ability to execute our strategic initiatives for long-term value creation, despite quarterly macroeconomic headwinds and uncertainties.

本季度運營費用佔銷售額的百分比略高於去年同期，為 21.1%。調整後每股收益下降至 0.39 美元，而去年同期為 0.47 美元，下降主要是由我討論的因素推動的。儘管主要營運資金同比增加，主要是由於原材料成本和安全庫存增加，但本季度的自由運營現金流從去年同期的 1300 萬美元大幅增加至 5600 萬美元。最後，我們本季度繼續實施股票回購計劃，回購了 700 萬美元的股票，使自該計劃開始以來的回購總額達到 1.23 億美元。我們的股票回購計劃反映了我們對執行長期價值創造戰略舉措的能力充滿信心，儘管季度宏觀經濟存在阻力和不確定性。

Now, let's turn to Slide 3 to review some recent commercial wins that resulted from successful execution of our growth road map. I want to highlight a key win in power generation within our Infrastructure business. We gained a larger share of wallet by developing a custom wear component solution with superior performance, which enabled us to command a premium for our solution. Next is an Aerospace win. We secured an initial order providing tooling for a commercial engine manufacturer that is building a new facility overseas. We provided a solution that exceeded the customer's delivery expectations.

現在，讓我們轉向幻燈片 3，回顧一下最近因成功執行我們的增長路線圖而取得的一些商業勝利。我想強調我們基礎設施業務中發電方面的關鍵勝利。通過開發具有卓越性能的定制磨損組件解決方案，我們贏得了更大的錢包份額，這使我們能夠為我們的解決方案贏得溢價。接下來是航空航天的勝利。我們獲得了一份初始訂單，為一家正在海外建設新工廠的商用發動機製造商提供工具。我們提供了超出客戶交付期望的解決方案。

Turning now to EV. We received preferred supplier status with an Asian EV OEM for tooling associated with braking systems. Winning preferred status positions us well to increase market share in the region and in the growing EV end market.

現在轉向電動汽車。我們獲得了一家亞洲電動汽車原始設備製造商的製動系統相關工具的首選供應商地位。贏得優先地位使我們能夠很好地增加該地區和不斷增長的電動汽車終端市場的市場份額。

In our Metal Cutting business, we delivered a full solution package for a leading manufacturer of steel components in the oil and gas industry, displacing a competitor's products. This solution resulted in a 300% performance improvement for the customer. And finally, we provided a solution in the mining industry, using our additive manufacturing capabilities. We leveraged our proprietary process to develop wear-resistant nozzles that direct high pressure, high flow water and solids to aid in underground mining activities. We provided an upgrade from a steel solution to tungsten carbide with no additional tooling required and reduced customer lead times. These are just some examples of wins that demonstrate our ability to gain share with both existing and new customers.

在我們的金屬切削業務中，我們為石油和天然氣行業領先的鋼部件製造商提供了完整的解決方案包，取代了競爭對手的產品。該解決方案為客戶帶來了 300% 的性能提升。最後，我們利用我們的增材製造能力為採礦業提供了解決方案。我們利用專有工藝開發耐磨噴嘴，引導高壓、高流量的水和固體，以幫助地下採礦活動。我們提供了從鋼解決方案到碳化鎢的升級，無需額外的工具，並縮短了客戶的交貨時間。這些只是一些成功的例子，證明了我們有能力贏得現有和新客戶的份額。

Now on Slide 4, I'd like to highlight an example of how innovation continues to drive enhanced product offerings to our customers. This slide shows our new KENGold turning inserts. Simply put, this product is our gold standard insert for general purpose turning applications. We developed an innovative proprietary coating technology, which has been enabled by our investment in modernization that deliver significantly improved wear performance over previous insert grades, while also making it easier for customers to identify where it maximize edge usage. The improved thermal, abrasion and shipping resistance that KENGold delivers, enables our customers to increase productivity, improve quality and lower overall production costs. This product is ideal for use in many of our target applications such as shafts, rings, flanges and bearings for electric vehicles and for turning applications in General Engineering.

現在，在幻燈片 4 上，我想重點介紹一個示例，說明創新如何繼續為我們的客戶提供增強的產品。這張幻燈片展示了我們的新型 KENGold 車削刀片。簡而言之，該產品是我們用於通用車削應用的黃金標準刀片。我們開發了一種創新的專有塗層技術，該技術是通過我們對現代化的投資實現的，與以前的刀片牌號相比，該技術顯著提高了磨損性能，同時也使客戶更容易確定在哪裡最大限度地利用邊緣。 KENGold 提供的改進的耐熱性、耐磨性和耐運輸性使我們的客戶能夠提高生產力、提高質量並降低總體生產成本。該產品非常適合用於我們的許多目標應用，例如電動汽車的軸、環、法蘭和軸承以及通用工程中的車削應用。

Now, let me turn the call over to Pat, who will review the third quarter financial performance and the outlook.

現在，讓我把電話轉給帕特，他將回顧第三季度的財務業績和前景。

Thank you, Chris, and good morning, everyone. I will begin on Slide 5 with a review for Q3 operating results. Before I begin, please note that, like last quarter, we did not record any non-GAAP adjustments this quarter. Therefore, adjusted numbers are not presented for the current quarter and for today's discussion, year-over-year comparisons will be against the prior year's adjusted results. The quarter's results show that we continue to execute our initiatives in the face of continued headwinds from inflation, foreign exchange and the lingering effects of COVID disruptions in China. Sales increased by 5% year-over-year, with 8% organic growth and favorable workdays of 1%, partially offset by headwinds from foreign currency of 4%. As Chris pointed out, price remains a large portion of the sales increase.

謝謝你，克里斯，大家早上好。我將從幻燈片 5 開始回顧第三季度的運營業績。在開始之前，請注意，與上季度一樣，我們本季度沒有記錄任何非 GAAP 調整。因此，本季度的調整後數據並未列出，而在今天的討論中，同比比較將與上一年的調整後結果進行比較。本季度的業績表明，面對通脹、外匯以及中國新冠疫情造成的持續影響帶來的持續阻力，我們繼續執行我們的舉措。銷售額同比增長 5%，有機增長 8%，有利的工作日增長 1%，部分被 4% 的外匯阻力所抵消。正如克里斯指出的那樣，價格仍然是銷量增長的很大一部分。

On a sequential basis from Q2, sales growth of 8% was above our normal Q2 to Q3 seasonal pattern of up 3% to 4%, driven by increased volume and more favorable foreign exchange. Operating expense as a percentage of sales increased 40 basis points year-over-year to 21.1%. Adjusted EBITDA and operating margins were 15.7% and 9.8%, respectively, versus 18.3% and 11.4% in the prior year quarter. The year-over-year decrease in operating margin was mainly due to the following factors. As discussed last quarter, we were aggressively raising prices in the prior year ahead of experiencing the full effect of higher tungsten prices. Starting in Q2, for the Infrastructure segment, however, the favorability of price over material cost is negligible, as raw material costs reflecting the current market price is flowing through the P&L. Approximately 3/4 of our metallurgical material costs are in the Infrastructure segment. We expect raw material costs to be relatively steady for the balance of fiscal year. As in prior quarters, higher pricing substantially offset higher raw material, wage and general inflation in the quarter. As mentioned on our Q2 call, we decided to extend the planned shutdowns of our powder production operations into January, resulting in approximately $5 million of unfavorable absorption in the Infrastructure segment this quarter, consistent with last quarter. This decision enabled us to reduce inventory levels and take advantage of improving supply chain conditions.

從第二季度開始，銷售額環比增長 8%，高於第二季度至第三季度正常的季節性增長 3% 至 4%，這主要得益於銷量增加和更有利的外匯。運營費用佔銷售額的百分比同比增長 40 個基點，達到 21.1%。調整後 EBITDA 和營業利潤率分別為 15.7% 和 9.8%，去年同期為 18.3% 和 11.4%。營業利潤率同比下降主要是由於以下因素。正如上季度所討論的，在經歷鎢價上漲的全面影響之前，我們在上一年大幅提高了價格。然而，從第二季度開始，對於基礎設施領域，價格相對於材料成本的有利程度可以忽略不計，因為反映當前市場價格的原材料成本正在流經損益表。我們約 3/4 的冶金材料成本發生在基礎設施領域。我們預計本財年剩餘時間原材料成本將相對穩定。與前幾個季度一樣，較高的定價大幅抵消了本季度原材料、工資和總體通脹的上升。正如我們在第二季度電話會議中提到的，我們決定將粉末生產業務的計劃關閉時間延長至 1 月份，導致本季度基礎設施部門吸收了約 500 萬美元的不利資金，與上季度一致。這一決定使我們能夠降低庫存水平並利用供應鏈條件的改善。

Lastly, foreign exchange headwinds from the strong U.S. dollar were $3 million. Effective tax rate decreased year-over-year to 24.4%, primarily due to geographical mix. Earnings per share were $0.39 in the quarter versus adjusted EPS of $0.47 in the prior year period. The main drivers of our EPS performance are highlighted on the bridge on Slide 6. The year-over-year effect of operations this quarter was negative $0.04, which includes a negative $0.05 effect from under-absorption. You can also clearly see the effects of the tax rate, foreign exchange and the reduction in pension income on EPS, with taxes contributing positive $0.02 and currency and reduced pension income each contributing negative $0.03. Please note that, our U.S. pension plan remains overfunded and the change in pension income is non-cash and is driven by market factors. This change in assumptions is affecting each quarter this fiscal year. Foreign exchange is expected to remain a year-over-year headwind, although, based on recent spot rates, the year-over-year headwind is expected to decline in Q4.

最後，強勢美元帶來的外匯阻力為 300 萬美元。有效稅率同比下降至 24.4%，主要由於地域結構的影響。本季度每股收益為 0.39 美元，而去年同期調整後每股收益為 0.47 美元。我們 EPS 業績的主要驅動因素在幻燈片 6 的橋上突出顯示。本季度運營的同比影響為負 0.04 美元，其中包括吸收不足帶來的負 0.05 美元影響。您還可以清楚地看到稅率、外彙和養老金收入減少對 EPS 的影響，稅收貢獻正 0.02 美元，貨幣和養老金收入減少各貢獻負 0.03 美元。請注意，我們的美國養老金計劃仍然資金過剩，養老金收入的變化是非現金的，是由市場因素驅動的。這種假設的變化正在影響本財年的每個季度。預計外匯仍將是同比逆風，但根據近期即期匯率，同比逆風預計將在第四季度有所減弱。

Slide 7 and 8, detail the performance of our segments this quarter. Reported Metal Cutting sales were up compared to the prior year quarter, with 10% organic growth and business days of 1%, partially offset by a foreign currency headwind of 5%. We achieved growth in the Americas and EMEA regions in all end markets on a constant currency basis. By region, the Americas led at 16%, followed by EMEA at 11%, while Asia Pacific was a negative 3%. America's year-over-year growth this quarter was driven by the execution of our growth initiatives in Aerospace and the continued broad and resilient demand across all end markets. EMEA's year-over-year performance reflects growth driven by execution on our strategic initiatives and broadly favorable end market conditions. Asia Pacific's growth, as Chris noted, was negatively affected by a slow recovery from COVID-related disruptions in China.

幻燈片 7 和 8 詳細介紹了本季度我們各部門的業績。報告的金屬切削銷售額與去年同期相比有所增長，有機增長 10%，工作日增長 1%，部分被 5% 的外匯逆風所抵消。我們在美洲和歐洲、中東和非洲地區的所有終端市場均實現了按固定匯率計算的增長。按地區劃分，美洲佔 16% 的份額領先，其次是歐洲、中東和非洲 (EMEA)，佔 11%，而亞太地區則下降了 3%。美國本季度的同比增長得益於我們在航空航天領域的增長計劃的執行以及所有終端市場持續廣泛且富有彈性的需求。歐洲、中東和非洲地區的同比業績反映了我們戰略舉措執行和普遍有利的終端市場條件推動的增長。正如克里斯指出的那樣，亞太地區的增長受到了中國從新冠疫情相關中斷中緩慢復甦的負面影響。

Looking at sales by end market. Aerospace sales grew 25% year-over-year as we continue to win new business, a result of our focused execution on our strategic initiatives in this end market. General Engineering grew 11% year-over-year with the strongest growth in Americas and EMEA. Energy grew 7% this quarter, as the customer year-end inventory rebalancing activities we experienced last quarter subsided. And lastly, Transportation grew 5% year-over-year, benefiting from improved customer supply chains and hybrid EV business in the Americas and EMEA, somewhat offset by weaker conditions in Asia Pacific. Metal cutting achieved its best operating margin post-COVID with operating margin of 13.1% despite an approximately 30 basis point headwind from the strong U.S. dollar. And through our focus on growth and operational excellence, we are positioning ourselves for further margin expansion. Pricing, volume growth and productivity offset cost increases.

查看終端市場的銷售情況。隨著我們繼續贏得新業務，航空航天銷售額同比增長 25%，這是我們專注於執行該終端市場戰略舉措的結果。通用工程業務同比增長 11%，其中美洲和歐洲、中東和非洲地區增長最為強勁。由於我們上季度經歷的客戶年終庫存重新平衡活動有所減弱，能源本季度增長了 7%。最後，交通運輸業務同比增長 5%，受益於美洲和歐洲、中東和非洲客戶供應鍊和混合動力電動汽車業務的改善，但在一定程度上被亞太地區疲軟的狀況所抵消。儘管美元走強帶來約 30 個基點的阻力，但金屬切削業務仍實現了新冠疫情后的最佳營業利潤率，營業利潤率為 13.1%。通過專注於增長和卓越運營，我們正在為進一步擴大利潤率做好準備。定價、產量增長和生產率抵消了成本增加。

Turning to Slide 8 for Infrastructure. Organic sales increased by 5% year-over-year, partially offset by foreign exchange headwinds of 3%. Regionally, EMEA grew 24%, followed by Asia Pacific at 7%. Americas sales were flat, primarily due to a customer who in-sourced production which we previously disclosed, as well as timing of project orders.

轉向幻燈片 8 的基礎設施。有機銷售額同比增長 5%，部分被 3% 的外匯不利因素抵消。從地區來看，歐洲、中東和非洲地區增長了 24%，其次是亞太地區，增長了 7%。美洲銷售額持平，主要是由於我們之前披露的一位客戶內包生產以及項目訂單的時間安排。

Looking at sales by end market. Energy grew 10%, General Engineering grew 5% and earthworks grew 1%. The strength in Energy was driven mainly by improvement in the U.S. oil and gas market as indicated by U.S. rig counts up approximately 20% year-over-year from Q3 '22 to Q3 FY '23. As Chris noted earlier, the prior quarter customer destocking actions stabilized this quarter. Earthworks saw growth in Asia Pacific, driven mainly by underground mining, while growth in EMEA was unfavorably affected by mine flooding in South Africa, and sales in the Americas were negatively impacted by order timing. Lastly, General Engineering was driven mainly by project orders in EMEA, offset by lower demand in the Americas from a customer in-sourcing I just mentioned and timing of project orders.

查看終端市場的銷售情況。能源增長 10%，通用工程增長 5%，土方工程增長 1%。能源股的強勁增長主要得益於美國石油和天然氣市場的改善，從 22 年第三季度到 23 財年第三季度美國鑽機數量同比增長約 20%。正如克里斯早些時候指出的，上一季度的客戶去庫存行動在本季度趨於穩定。 Earthworks 在亞太地區的增長主要受到地下採礦的推動，而歐洲、中東和非洲地區的增長受到南非礦井洪水的不利影響，而美洲的銷售則受到訂單時間的負面影響。最後，通用工程主要受到歐洲、中東和非洲地區項目訂單的推動，但被我剛才提到的客戶內包和項目訂單時間安排所導致的美洲需求下降所抵消。

Operating margin declined year-over-year to 4.8%, primarily due to two factors. First, as discussed earlier on the call, the favorability of price over material costs we have been experiencing is now negligible as raw material costs, reflecting the current market costs are now flowing through the P&L. Again, we expect raw material costs to be relatively steady for the balance of the fiscal year. Second significant factor affecting the margin this quarter was the previously discussed powder plant shutdown that was extended into January. We did, as anticipated, experienced under-absorption this quarter, which helped us lower inventory levels as the supply chain continues to normalize. We continue to expect operating margin will return to approximately Q1 FY '23 level in Q4. This expected improvement in profit margin is driven by increased sales volume, primarily from the seasonal uptick in construction and more favorable absorption in our powder operations. The force majeure we previously discussed remains in effect, but we do not expect to incur disruption costs in Q4.

營業利潤率同比下降至 4.8%，主要歸因於兩個因素。首先，正如之前在電話會議上討論的那樣，我們所經歷的價格相對於材料成本的有利性現在可以忽略不計，因為原材料成本，反映了當前的市場成本現在正在流經損益表。同樣，我們預計本財年剩餘時間的原材料成本將相對穩定。影響本季度利潤率的第二個重要因素是之前討論的粉末工廠停工期延長至一月份。正如預期的那樣，本季度我們確實經歷了吸收不足的情況，這有助於我們隨著供應鏈繼續正常化而降低庫存水平。我們繼續預計營業利潤率將在第 4 季度恢復到 23 財年第 1 季度左右的水平。利潤率的預期改善是由銷量增加推動的，這主要是由於建築的季節性增長以及我們粉末業務的更有利吸收。我們之前討論的不可抗力仍然有效，但我們預計第四季度不會產生中斷成本。

Now, turning to Slide 9 to review our free operating cash flow and balance sheet. Our third quarter free operating cash flow increased to $56 million from $13 million in the prior year quarter. On a dollar basis, year-over-year, primary working capital increased to $712 million, reflecting mainly higher raw material costs and year-over-year higher safety stock associated with extended supply chains. On a percentage of sales basis, primary working capital increased to 32.9%. We expect inventory levels to decrease again in the fourth quarter as we continue to manage inventory levels down, now as our supply chain continues to improve.

現在，轉向幻燈片 9 來回顧我們的自由運營現金流和資產負債表。我們第三季度的自由運營現金流從去年同期的 1300 萬美元增加到 5600 萬美元。按美元計算，主要營運資本同比增加至 7.12 億美元，主要反映了原材料成本上升以及與供應鏈延伸相關的安全庫存同比增加。按銷售額百分比計算，主要營運資金增加至 32.9%。我們預計第四季度庫存水平將再次下降，因為我們繼續管理庫存水平，現在我們的供應鏈不斷改善。

Net capital expenditures were $18 million compared to $22 million in the prior year quarter. In total, we returned approximately $23 million to shareholders through our share repurchase and dividend programs. We repurchased $7 million of shares in Q3 for a total of $123 million or 4 million shares, representing approximately 5% of outstanding shares since the inception of the program. And, as we have every quarter since becoming a public company over 50 years ago, we paid a dividend to our shareholders. Our commitment to returning cash to shareholders reflects our confidence in our ability execute our strategy to drive growth and margin improvement. We continue to maintain a healthy balance sheet and debt maturity profile. At quarter end, we had combined cash and revolver availability of approximately $731 million and we're well within our financial covenants. The full balance sheet can be found on Slide 14 in the appendix.

淨資本支出為 1800 萬美元，去年同期為 2200 萬美元。通過股票回購和股息計劃，我們總共向股東返還了約 2300 萬美元。我們在第三季度回購了 700 萬美元的股票，回購總額為 1.23 億美元，即 400 萬股，約佔該計劃啟動以來已發行股票的 5%。而且，自從 50 多年前成為上市公司以來，我們每個季度都會向股東支付股息。我們向股東返還現金的承諾反映了我們對執行推動增長和利潤改善戰略的能力的信心。我們繼續保持健康的資產負債表和債務到期狀況。截至季度末，我們的現金和左輪手槍可用總量約為 7.31 億美元，完全符合我們的財務契約。完整的資產負債表可以在附錄的幻燈片 14 中找到。

Turning to Slide 10 regarding our full year outlook. We are raising the low-end of our FY '23 outlook. We expect sales in FY '23 to be between 2.07 and $2.1 billion, with volume up 1% to 2%, price realization of approximately 7% and a headwind from foreign exchange of approximately $100 million. This sales outlook assumes that demand in China improves throughout the fourth quarter, and foreign exchange is sequentially neutral. On a full year basis, we expect to offset raw material, wage and general cost increases on a dollar basis. A $100 million foreign exchange sales headwind is expected to translate into approximately $20 million on an operating income basis. Lower pension income will be a headwind each quarter for a total of $14 million for the year. Depreciation and amortization is expected to be approximately $135 million, and we now expect interest expense of approximately $28 million and an effective tax rate of approximately 24%. We're also raising our outlook for adjusted EPS. We expect adjusted EPS in the range of $1.50 to $1.70. On the cash side, for the full year outlook for capital expenditures is approximately $100 million and the outlook for primary working capital is unchanged at 31% to 33%. Taken together, we continue to expect free operating cash flow at approximately 100% of adjusted net income in line with our long-term target.

請參閱幻燈片 10，了解我們的全年展望。我們正在上調 23 財年展望的下限。我們預計 23 財年的銷售額將在 2.07 至 21 億美元之間，銷量增長 1% 至 2%，價格實現約 7%，外匯阻力約 1 億美元。該銷售前景假設中國的需求在整個第四季度有所改善，並且外匯連續保持中性。就全年而言，我們預計將抵消原材料、工資和一般成本增加（按美元計算）。 1 億美元的外匯銷售逆風預計將轉化為約 2000 萬美元的營業收入。養老金收入下降將成為每個季度的不利因素，全年養老金收入總額將減少 1,400 萬美元。折舊和攤銷預計約為 1.35 億美元，我們現在預計利息支出約為 2800 萬美元，有效稅率約為 24%。我們還上調了調整後每股收益的預期。我們預計調整後每股收益在 1.50 美元至 1.70 美元之間。在現金方面，全年資本支出前景約為 1 億美元，主要營運資本前景保持在 31% 至 33% 不變。總而言之，我們繼續預計自由經營現金流約為調整後淨利潤的 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，我會把它轉回給克里斯。

Thanks, Pat. Turning to Slide 11, let me take a few minutes to summarize. Overall, we're pleased with our organic growth and strong free operating cash flow in the quarter. Although the operating environment remains challenging, we're encouraged by the continued resiliency of our end markets and the improvements we're seeing in the supply of materials, which allows us to draw down safety stocks. And we look forward to continued margin improvement in Q4 as we benefit from the inventory reduction actions we took in Q3.

謝謝，帕特。轉到幻燈片 11，讓我花幾分鐘時間進行總結。總體而言，我們對本季度的有機增長和強勁的自由運營現金流感到滿意。儘管經營環境仍然充滿挑戰，但我們對終端市場的持續彈性以及我們在材料供應方面看到的改善感到鼓舞，這使我們能夠減少安全庫存。我們期待第四季度的利潤率持續改善，因為我們受益於第三季度採取的庫存減少行動。

Looking beyond fiscal year '23, we're encouraged by our market position. We're poised to benefit from the mega trends affecting our end markets and the opportunity we have to extract even greater operational efficiency from our modernized plants and our ongoing focus on optimizing for growth, our investments in commercial excellence and technology. And we're confident in our ability to continue to return cash to shareholders, while investing in our strategic initiatives for growth and profitability improvement.

展望 23 財年之後，我們的市場地位令我們深受鼓舞。我們準備從影響我們終端市場的大趨勢中受益，我們有機會從我們的現代化工廠中獲得更高的運營效率，我們持續關注優化增長，我們對商業卓越和技術的投資。我們對繼續向股東返還現金的能力充滿信心，同時投資於我們的戰略舉措以實現增長和盈利能力的提高。

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

那麼，接線員，請開通提問線路。

(Operator Instructions) Our first question comes from Julian Mitchell from Barclays.

（操作員說明）我們的第一個問題來自巴克萊銀行的 Julian Mitchell。

I just wanted to home in for a second on the Metal Cutting margins. So a good sort of operating leverage, I think 45% year-on-year in the third quarter. I just wanted to check, is this sort of the guide implying that steps up a bit in the fourth quarter? So you're getting a sort of mid-teens operating margin in Metal Cutting in Q4. And then as we think about the year ahead, is that sort of mid-40s incremental margin in Metal Cutting a sort of a good placeholder?

我只是想重點關註一下金屬切削利潤。因此，我認為第三季度的運營槓桿率同比為 45%，這是一個很好的運營槓桿。我只是想檢查一下，這種指南是否暗示第四季度會有所進步？因此，第四季度金屬切削業務的營業利潤率為十幾歲左右。然後，當我們思考未來的一年時，金屬切削領域 40 年代中期的增量利潤是否是一個很好的佔位符？

Yes. So, a couple of things to think about there. Obviously, as we think about FY '24, we're going through our annual planning process now. And so, that's something obviously we'll update you on when we get to our call in August. As we think about the margin performance of the Metal Cutting segment in the fourth quarter, as we look, I'll say sequentially Q3 to Q4 and normally, we would see a slight uptick in volume, Q2 to -- excuse me, Q3 to Q4. Obviously, that will lever. And as we've talked about before, Metal Cutting generated leverage is a little bit above where our normal run rate is on a consolidated basis. So, we'd expect with volume coming through slightly higher margin performance.

是的。因此，有幾件事需要考慮。顯然，當我們考慮 24 財年時，我們現在正在經歷年度規劃流程。因此，顯然我們會在 8 月份接到電話會議時向您通報最新情況。當我們考慮第四季度金屬切削部門的利潤率表現時，我會依次說第三季度到第四季度，通常情況下，我們會看到銷量略有上升，第二季度到——對不起，第三季度到Q4。顯然，這將發揮槓桿作用。正如我們之前討論過的，金屬切削產生的槓桿率略高於我們的正常運行率（合併後的水平）。因此，我們預計銷量會通過略高的利潤率表現實現。

Yes. And that's a higher margin -- operating margin sequentially, I suppose. Yes. That makes sense. And then just my second quick one would be, I wondered what you're seeing in terms of sort of distributor behavior, any customers or channel partners kind of looking to slow down orders or destock a little bit in the last couple of months? Has there been any change in customer behavior in the Americas, in particular? And then on China, as you said, it's a below plan recovery to date. I think in areas like Transportation, you're assuming an improvement, understandably. So maybe any more color on kind of what you're seeing real time in China, please?

是的。我想，這是一個更高的利潤率——營業利潤率。是的。這就說得通了。然後我的第二個快速問題是，我想知道您在分銷商行為方面看到了什麼，是否有任何客戶或渠道合作夥伴希望在過去幾個月內放慢訂單或稍微減少庫存？特別是美洲地區的客戶行為是否發生了變化？至於中國，正如您所說，迄今為止的複蘇低於計劃。我認為在交通等領域，你假設有所改善，這是可以理解的。那麼，請對您在中國實時看到的情況提供更多的顏色，好嗎？

Yes. I would say, Julian, on the Metal Cutting side, ever since we came out of the pandemic, the distributors have been really pretty cautious about just how much inventory they had. So, for example, if they're supporting aerospace customers, they tend to be adding inventory there because they want to make sure that they can serve those customers and there's also a pretty good trajectory on growth there. But those that are serving more general engineering, I think they've been cautious. So we're not really seeing a destocking, but I don't think, Julian, we ever really saw a restocking, if you will.

是的。朱利安，我想說，在金屬切削方面，自從我們走出大流行以來，分銷商對於他們的庫存量一直非常謹慎。因此，舉例來說，如果他們支持航空航天客戶，他們往往會在那裡增加庫存，因為他們希望確保能夠為這些客戶提供服務，並且那裡也有相當好的增長軌跡。但那些服務於更通用工程的人，我認為他們一直很謹慎。所以我們並沒有真正看到庫存減少，但我認為，朱利安，如果你願意的話，我們曾經真正看到過庫存補充。

And then I think we've talked about on the Infrastructure side, we did see oil and gas customers and even some of the construction customers taking some inventory reduction actions as the supply chain problems start to abate, they needed less safety stock and less stock. So, there's kind of been adjustments throughout the whole supply chain in that regard.

然後我想我們已經討論了基礎設施方面，我們確實看到石油和天然氣客戶，甚至一些建築客戶隨著供應鏈問題開始緩解而採取了一些庫存減少行動，他們需要更少的安全庫存和更少的庫存。因此，整個供應鏈在這方面都進行了調整。

As it relates to China, yes, Transportation is, as we know, we have a lot of exposure to Transportation, especially in Metal Cutting, the recovery has been slower, and I think that's -- in our mind, that's been driven by actually reduction in demand for the sale of cars over there. That is expected to begin to improve, but we have to watch that one, Julian.

就中國而言，是的，交通運輸，正如我們所知，我們對交通運輸有很多接觸，特別是在金屬切削領域，復甦速度較慢，我認為，在我們看來，這是由實際上推動的那裡的汽車銷售需求減少。預計這種情況會開始改善，但我們必須注意這一點，朱利安。

Our next question comes from Dillon Cumming from Morgan Stanley.

我們的下一個問題來自摩根士丹利的狄龍·卡明。

I realize this is probably a bit more of a difficult one to answer. But just kind of curious if you had any kind of data points or feedback from your kind of distribution channel around impacts from the tighter financing environment, maybe there's a lot of concern out there with regards to the potential impacts on the broader industrial complex, but just curious, that's the sentiment you're hearing from your customers as well.

我意識到這可能是一個更難回答的問題。但只是有點好奇，如果您有任何類型的數據點或來自您的分銷渠道的關於融資環境收緊的影響的反饋，也許人們對更廣泛的工業綜合體的潛在影響有很多擔憂，但是只是好奇，這也是您從客戶那裡聽到的觀點。

Yes. We haven't really heard very much from our distributors or our smaller customers, if you will, about the potential banking crisis. So, it's nothing that has -- that we've seen. We keep an eye on it and we're monitoring the situation. We do have a lot of our customers are actually quite small. And certainly, the deposit limits that they would have in any banks are probably covered by the FDIC and those kind of thing. So, we think that there's not going to be much of an effect, but it is something that we have to watch.

是的。如果你願意的話，我們還沒有從我們的分銷商或小客戶那裡真正聽到太多有關潛在銀行危機的信息。所以，我們沒有看到任何東西。我們密切關注並監控事態發展。我們確實有很多客戶，實際上規模很小。當然，他們在任何銀行的存款限額可能都由 FDIC 之類的東西涵蓋。因此，我們認為不會產生太大影響，但我們必須關注。

Okay. That's clear. And then just one question on kind of broader price cost and pricing trends. I think, Pat, you mentioned in your prepared remarks that you were expecting a bit less of a benefit from overall price cost positivity as we move through the end of the year here. How are you guys thinking about pricing going into next fiscal year? I mean, are you planning to put through further price increases? Do you feel like we're hitting upper bound? Any color on how that progression should progress into next year would be helpful.

好的。很清楚。然後是一個關於更廣泛的價格成本和定價趨勢的問題。我想，帕特，您在準備好的發言中提到，隨著今年年底的到來，您預計整體價格成本正性帶來的好處會減少一些。你們如何考慮下一財年的定價？我的意思是，您打算進一步提價嗎？你覺得我們已經達到上限了嗎？任何有關明年進展如何進展的顏色都會有所幫助。

Yes. I mean, as we think about pricing going ahead into next year, obviously, we'll just talk about strategically as we think about pricing, we're committed to making sure that we price for the value of the product, number 1. Number 2 being mindful of the environment we're in and the inflation that we see in the business from a cost perspective, being sure that we're pricing, not just for value, but the cost that's going into the product. So, again, as we kind of complete our FY '24 planning process here and get a good grip on what the cost inflation in the business will be, we will make sure that we have pricing actions across both businesses that are in place, that are responsive to, again, the value proposition of the product and the cost structure that we think we'll be having.

是的。我的意思是，當我們考慮明年的定價時，顯然，當我們考慮定價時，我們只會從戰略上進行討論，我們致力於確保我們的定價符合產品的價值，第一。數字2 從成本角度考慮我們所處的環境以及我們在業務中看到的通貨膨脹，確保我們定價時不僅考慮價值，還考慮產品的成本。因此，當我們在這裡完成 24 財年規劃流程並充分掌握業務成本通脹情況時，我們將確保我們在兩個業務中都採取了適當的定價行動，再次，我們對產品的價值主張和我們認為我們將擁有的成本結構做出了反應。

The next question comes from Joe Ritchie from Goldman Sachs.

下一個問題來自高盛的喬·里奇。

Can you -- I want to just understand China maybe a little bit further. I know that you guys have talked about EV being a big opportunity for you guys going forward. I'm just curious, just in China, are you typically selling into Western OEMs? Are you selling into the Chinese OEMs? Just help us understand your penetration of the EV market in China.

你能——我想進一步了解中國嗎？我知道你們已經談到電動汽車對你們來說是一個巨大的機遇。我只是好奇，在中國，你們通常向西方原始設備製造商銷售產品嗎？您是否向中國 OEM 廠商銷售產品？請幫助我們了解您在中國電動汽車市場的滲透率。

Yes. We're selling into both, but it's interesting, Joe, that the traditional OEMs are recognizing them with this EV that a lot of the Chinese players are, they are the ones to watch out for. And so, while we're selling into both, we have a strategic focus on the new -- I'll call the new players that are important for EV and even hybrids going forward. So, we have to tackle both. We feel like we're in a good position on both, but the traditional OEMs, if you will, they're going to see some competition from the Chinese.

是的。我們正在銷售這兩種產品，但有趣的是，喬，傳統原始設備製造商正在通過這款電動汽車認識到他們，許多中國參與者都是如此，他們是值得警惕的。因此，在我們銷售這兩個產品的同時，我們的戰略重點是新的——我將稱這些新參與者對電動汽車甚至混合動力汽車的未來很重要。因此，我們必須解決這兩個問題。我們覺得我們在這兩方面都處於有利地位，但傳統的原始設備製造商（如果你願意的話）他們將看到來自中國製造商的一些競爭。

Okay. Great. That's helpful. And, I guess, maybe just my follow-on question and thinking about Infrastructure specifically, you talked about the powder production shutdown. Is that continuing at all into the fourth quarter? It sounds like that's done at this point, but you also made a comment around inventory levels continuing to be reduced into 4Q as well. So, I just want to make sure I square those 2 things.

好的。偉大的。這很有幫助。而且，我想，也許只是我的後續問題並具體考慮基礎設施，您談到了粉末生產關閉。這種情況會持續到第四季度嗎？聽起來現在已經完成了，但您還就第四季度的庫存水平繼續減少發表了評論。所以，我只是想確保我把這兩件事擺平了。

Yes. I think the inventory question was more about from our customers' perspective and they had taken some significant actions in Q2 and Q3 and that situation seems to have stabilized. We don't expect -- that the powder plants are running in the fourth quarter. So, we're not having to make an adjustment there. So, I think I answered both parts of your question, but let me know if I didn't.

是的。我認為庫存問題更多地是從我們客戶的角度來看的，他們在第二季度和第三季度採取了一些重大行動，這種情況似乎已經穩定下來。我們預計粉末工廠不會在第四季度投入運行。因此，我們不必在那裡進行調整。所以，我想我回答了你問題的兩個部分，但如果我沒有回答，請告訴我。

Yes. No, no, that's perfect. Maybe I'll just ask one more, just longer-term question. You guys talked about KENGold and highlighted at this quarter. I'm just curious like how long had that particular range of products been in development. And it seems like there's some really good opportunity here. I just want to understand the opportunity a little bit better.

是的。不不不，這樣就完美了。也許我會再問一個更長期的問題。你們談論了 KENGold，並在本季度重點介紹了這一點。我只是好奇該特定係列的產品開發了多長時間。這裡似乎有一些非常好的機會。我只是想更好地了解這個機會。

Yes. It's been in the works for a while, and like a lot of the product innovations that our technology team have come up with, we were limited primarily by our ability to produce the product. The precision which you have to place these coatings in the case of KENGold required modern equipment and actually new processes. And so, Joe, what really enabled the release of that product was the completion of the modernization at some of our insert facilities. So, I would say, in this case, it was modernization that was a pacing item. And we expect there is more of that to come because one of the major reasons to modernize was, not only to improve our cost and our quality and delivery performance, but it was also to enable our innovation folks to bring to market some of the great products they got, and KENGold is a great example of that.

是的。它已經進行了一段時間，就像我們的技術團隊提出的許多產品創新一樣，我們主要受到產品生產能力的限制。在 KENGold 上放置這些塗層的精度需要現代化的設備和新的工藝。所以，喬，真正促成該產品發布的是我們一些插入設施的現代化的完成。所以，我想說，在這種情況下，現代化是一個節奏項目。我們預計還會有更多這樣的事情發生，因為現代化的主要原因之一不僅是提高我們的成本、質量和交付性能，而且還使我們的創新人員能夠將一些偉大的產品推向市場。他們獲得的產品，KENGold 就是一個很好的例子。

The next question comes from Tami Zakaria from JPMorgan.

下一個問題來自摩根大通的塔米·扎卡里亞。

Most of my questions have actually already been asked. I just have a couple of quick ones, and I'm sorry if you already disclosed it. But do we know what price versus volume growth was in each segment in the most recent quarter that you just reported?

我的大部分問題實際上已經被問過。我只有幾個快速的，如果你已經透露了，我很抱歉。但我們是否知道您剛剛報告的最近一個季度每個細分市場的價格與銷量增長情況如何？

Yes. We -- as we talked about in the prepared remarks, as well as the press release, we've had strong price realization across both businesses. From a volume perspective, we did see volume growth in Metal Cutting on a year-over-year basis and we had a slight negative volume in the Infrastructure segment in the quarter.

是的。正如我們在準備好的發言以及新聞稿中所談到的，我們的兩項業務都實現了強勁的價格實現。從銷量角度來看，我們確實看到金屬切削領域的銷量同比增長，而本季度基礎設施領域的銷量略有負值。

Got it. And as we look into the fourth quarter, do you expect volume to be positive in both segments?

知道了。當我們展望第四季度時，您預計這兩個細分市場的銷量都會呈正值嗎？

Yes. Overall, volume will be positive in both segments as we go into the fourth quarter on a year-over-year basis, as well as sequentially.

是的。總體而言，當我們進入第四季度時，這兩個細分市場的銷量將同比以及連續增長。

The next question comes from Steve Barger from KeyBanc Capital Markets.

下一個問題來自 KeyBanc Capital Markets 的 Steve Barger。

Happy to hear your commentary around continued end market resilience. Can you square that up with ISM being sub-50 for 6 months and the Metalworking index having been sub-50 for 6 of the last 7 months? I think in the past, your organic growth has tracked those to some degree. Do you think there's anything about your mix or this cycle that suggests that could decouple going forward?

很高興聽到您對終端市場持續彈性的評論。您能否將其與 ISM 連續 6 個月低於 50 以及金屬加工指數在過去 7 個月中有 6 個月低於 50 進行比較？我認為在過去，你的有機增長在某種程度上已經追隨了這些。你認為你的組合或這個週期有什麼跡象表明未來可能會脫鉤嗎？

Yes. I think it's -- maybe it's particular to this cycle, in that, with all the supply chain constraints a lot of our customers had, they built huge backlogs. And so, even coming out of the pandemic, many of them have never returned to pre-pandemic production levels. So, they've got that backlog. So, normally, Steve, if you to have that type of -- those indices are below 50, we would probably start to see a little softening in our business more than we've seen. So we've used the word resilience, in that, there's an expectation that that might happen, but it really hasn't shown yet. And my theory is that, a lot of our customers are operating with large backlogs and it never really, because of whether it be labor shortages, chip shortages or other supply chain constraints, never really ramped their production back up to pre-COVID levels in many of the markets that we're at.

是的。我認為，也許這是這個週期所特有的，因為我們的許多客戶都受到供應鏈的限制，他們積壓了大量訂單。因此，即使擺脫了大流行，他們中的許多人也從未恢復到大流行前的生產水平。所以，他們有積壓的訂單。所以，通常情況下，史蒂夫，如果你的指數低於 50，我們可能會開始看到我們的業務比我們之前看到的更加疲軟。所以我們使用了“彈性”這個詞，因為人們期望這種情況可能會發生，但它實際上還沒有表現出來。我的理論是，我們的許多客戶都面臨大量積壓，但由於勞動力短缺、芯片短缺或其他供應鏈限制，他們的產量從未真正恢復到新冠疫情前的水平。我們所在的許多市場。

Yes. That makes sense. I think that's a good theory. Price is running, maybe 4x ahead of volume this year. So, if inflation moderates next year, will you be able to drive incremental price based on the value proposition? And given your commercial excellence initiatives, do you just have a general algorithm for your growth versus the market?

是的。這就說得通了。我認為這是一個很好的理論。價格正在上漲，今年可能是成交量的四倍。那麼，如果明年通脹放緩，您是否能夠根據價值主張推動價格增量？鑑於您的商業卓越計劃，您是否有一個針對市場增長的通用算法？

Yes, in terms of price, I think Pat said it, we're always trying to price versus value. Now, in the case of the high inflationary environment, we also had to factor that in and all our competitors did the same. But if we return to a more normal inflationary environment, we really don't have to necessarily change anything because we're already sort of pricing based on value. And so, we'll continue to do that and that's actually a business process you have to have. It's a discipline with the salespeople. It's an education. And so, we've been at this now for several years prior to the hyperinflation. So, we'll continue to push price as much as we can. Recognizing it's a competitive environment, but you do have to sell value and we're getting much better at than we were even a few years ago.

是的，就價格而言，我想帕特說過，我們總是試圖將價格與價值進行比較。現在，在高通脹環境的情況下，我們也必須考慮到這一點，我們所有的競爭對手也這樣做了。但如果我們回到更正常的通脹環境，我們實際上不必改變任何東西，因為我們已經在基於價值定價。因此，我們將繼續這樣做，這實際上是您必須擁有的業務流程。這是銷售人員的紀律。這是一種教育。因此，在惡性通貨膨脹之前我們已經這樣做了好幾年了。因此，我們將繼續盡可能地推高價格。認識到這是一個競爭激烈的環境，但你確實必須出售價值，而且我們比幾年前做得更好。

Sorry, what was the second part of your question?

抱歉，您問題的第二部分是什麼？

You've done a lot on commercial excellence over the past couple of years. Do you have an internal kind of algorithm or expectation for what your organic growth should look like relative to whatever the market does in an up cycle or a down cycle?

過去幾年裡，您在商業卓越方面做了很多工作。對於相對於市場在上升週期或下降週期中的表現而言，您的有機增長應該是什麼樣子，您是否有一種內部算法或期望？

Yes. I would say, in general, we don't -- for competitive reasons, I don't want to give you the target, but we -- our expectation is that, if the market is expanding, we're gaining share and we're growing faster. And that's the way we compensate our sales force and our business leader executives is, it's not enough just to ride the market up or ride the market down, we expect you to do better than the market.

是的。我想說，總的來說，我們不會 - 出於競爭原因，我不想給你目標，但我們 - 我們的期望是，如果市場正在擴大，我們就會獲得份額，並且我們增長得更快。這就是我們補償銷售人員和業務領導者的方式，僅僅推動市場上漲或下跌是不夠的，我們希望你比市場做得更好。

How do you define the market for them? Is it based on the Metalworking index or something like that?

您如何為他們定義市場？是基於金屬加工指數還是類似的東西？

Yes. It can be -- unfortunately, in this business, you have to use several indices. It kind of depends on where you are in the world. But if you take, for example, a country like Germany, there is a lot of metal cutting companies that report their metal cutting revenues into an association and the association then gives you what the metal cutting market is and you can compare yourself to how you grow there. You can do something a little bit similar to that in the U.S. and other countries. So, we have to have several metrics, but those are the kinds of things that we looked at that tell us directionally, are we gaining share. And then beyond that, you can also look at, with specific customers, you have a good sense for how much metal cutting business that they're buying in total versus what you're actually getting. And so, we can also set entitlement models and targets based on specific customers and say, "Hey, we should have x percent of these people's business and we only have y". So, that's how we set the targets.

是的。不幸的是，在這個行業中，您必須使用多個索引。這在某種程度上取決於你在世界的哪個地方。但如果你以像德國這樣的國家為例，有很多金屬切削公司將他們的金屬切削收入報告給一個協會，然後該協會會告訴你金屬切削市場是什麼，你可以將自己與你的公司進行比較。在那裡生長。你可以做一些與美國和其他國家類似的事情。因此，我們必須有幾個指標，但我們所關注的這些指標可以直接告訴我們，我們是否正在獲得份額。除此之外，您還可以針對特定客戶進行觀察，了解他們總共購買了多少金屬切削業務以及您實際獲得的業務量。因此，我們還可以根據特定客戶設置權利模型和目標，並說：“嘿，我們應該擁有這些人業務的 x%，而我們只有 y”。這就是我們設定目標的方式。

This concludes our question-and-answer session. I would like to turn the conference back to Chris Rossi for closing remarks.

我們的問答環節到此結束。我想請克里斯·羅西 (Chris Rossi) 致閉幕詞。

Thanks, operator, and thanks, everyone, for joining the call today. The results this quarter reinforce our ability to advance our strategic initiatives and secure market-leading positions, and I'm really very confident we'll deliver our full year outlook.

謝謝接線員，也謝謝大家今天加入通話。本季度的業績增強了我們推進戰略舉措和確保市場領先地位的能力，我非常有信心我們將實現全年展望。

Finally, we look forward to speaking with you next quarter, and I also hope that you'll be able to join us at our upcoming Investor Day on September 8 at the New York Stock Exchange. More details about that event will be forthcoming from Mike. We're excited for you to hear from our executive management team as we share our growth and innovation plans and provide an update on our long-term targets that really reflect where we're taking the company.

最後，我們期待下個季度與您交談，我也希望您能夠參加我們即將於 9 月 8 日在紐約證券交易所舉行的投資者日活動。有關該活動的更多詳細信息將由邁克提供。我們很高興您能聽到我們執行管理團隊的聲音，我們分享了我們的增長和創新計劃，並提供了我們長期目標的最新信息，這些目標真正反映了我們對公司的發展方向。

As always, appreciate your interest and support. Don't hesitate to reach out to Mike, if you have any questions. Everyone, have a great day. Thanks.

一如既往，感謝您的關注和支持。如果您有任何疑問，請隨時聯繫邁克。大家，祝你有美好的一天。謝謝。

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 8013976, then the pound or hash symbol. You will be asked to record your name and company.

該活動的重播將在結束後大約 1 小時提供。要觀看重播，您可以撥打美國境內免費電話 (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 8013976，然後輸入井號或井號。您將被要求記錄您的姓名和公司。

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

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。