Kennametal Inc (KMT) 2024 Q3 法說會逐字稿

Good morning. I would like to welcome everyone to Kennametal's third quarter fiscal 2024 earnings conference call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Mr. Michael Pici, Vice President of Investor Relations.

早安.我歡迎大家參加肯納金屬 2024 財年第三季財報電話會議。 （操作員說明）請注意此事件正在被記錄。我現在將會議交給投資者關係副總裁 Michael Pici 先生主持。

Please go ahead.

請繼續。

Thank you, operator, and welcome, everyone, and thank you for joining us to review Kennametal's Third Quarter Fiscal 2024 results this morning, 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 am Michael Pizzi, Vice President of Investor Relations. Joining me on the call today are Christopher Rossi, President and Chief Executive Officer; Pat Watson, Vice President and Chief Financial Officer; Sanjay Chowbey, Vice President and President of metal cutting and Franklin Cardenas, Vice President and President of Infrastructure. After Kris impact prepared remarks, we will open the line for questions.

謝謝運營商，歡迎大家，感謝您今天早上與我們一起回顧肯納金屬 2024 年第三季度財報，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。我是麥可‧皮齊 (Michael Pizzi)，投資人關係副總裁。今天和我一起參加電話會議的還有總裁兼執行長克里斯多福‧羅西 (Christopher Rossi)；帕特‧沃森，副總裁兼財務長； Sanjay Chowbey，副總裁兼金屬切割總裁；Franklin Cardenas，副總裁兼基礎設施總裁。在克里斯準備好發言後，我們將開放提問熱線。

At this time, I'd like to direct your attention to our forward-looking disclosure statements. 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 statements. These risk factors and uncertainties are detailed in Kennametal's SEC filings. 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 eight K on our website.

此時，我想請您注意我們的前瞻性揭露聲明。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、業績或成就與此類陳述中表達或暗示的結果、業績或成就有重大差異。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。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較的 GAAP 財務指標的調整表可以在投影片的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 you, Chris.

克里斯，我會把電話轉給你。

Thanks, Mike. Good morning and thank you for joining us. I'll start the call today with a review of the quarter and some end market commentary as well as an example of the industry-leading innovation we are bringing to market. Then Pat will cover the quarterly financial results as well as the fiscal year '24 outlook.

謝謝，麥克。早安，感謝您加入我們。我將在今天的電話會議開始時回顧本季和一些終端市場評論，以及我們向市場推出的行業領先創新的範例。然後帕特將介紹季度財務業績以及 24 財年展望。

Finally, I'll make some summary comments and then open the call for questions.

最後，我將做一些總結性評論，然後開始提問。

Beginning on Slide 3. For the quarter, sales decreased 4% year over year with organic decline of 2% unfavorable business days of 1% and unfavorable currency exchange and 1% price was offset by volume declines and product mix. At the segment level, organic growth was flat at 0% in metal cutting and declined 5% in infrastructure. On a constant currency basis, the Media posted 0% growth. Asia Pacific sales declined 1% in the Americas declined 5%.

從幻燈片 3 開始。在細分市場層面，金屬切削領域的有機成長持平於 0%，基礎建設領域則下降 5%。以固定匯率計算，媒體的成長率為 0%。亞太地區銷售額下降 1%，美洲下降 5%。

Moving to our end markets, aerospace and defense grew 10%. Transportation was flat at 0%. General engineering declined 2%, earthworks declined 5% and energy declined 14%. These results are in line with what we expected and noted on our previous earnings call. Let me take a moment to provide some color on end markets year over year.

轉向我們的終端市場，航空航太和國防成長了 10%。交通運輸持平於 0%。一般工程下降 2%，土方工程下降 5%，能源下降 14%。這些結果符合我們的預期並在先前的財報電話會議上指出。讓我花一點時間來提供一些關於終端市場逐年變化的資訊。

In aerospace and defense, sales increased 10% year over year. Metal Cutting grew 9% and infrastructure grew 13% both segments benefited from continued execution of our growth initiatives and market strength in aerospace, transportation was flat at 0% this quarter due to continued strength in EMEA, which was driven by EV and hybrid project wins offset by a decline in the Americas due to prior year project wins that did not repeat.

在航空航太和國防領域，銷售額較去年同期成長10%。金屬切割成長了9%，基礎設施成長了13%，這兩個領域都受益於我們的成長計畫的持續執行以及航空航太、運輸領域的市場強勁，本季由於歐洲、中東和非洲地區的持續強勁成長（電動車和混合動力項目的推動），運輸業務成長持平於0%美洲地區由於上一年贏得的項目沒有重複而下降，抵消了這一下降。

General engineering declined 2% versus prior year due to lower industrial production in EMEA and the Americas that affected both segments. Earthworks declined 5% during the quarter, primarily due to lower mining activity in China, energy declined 14% primarily in oil and gas as a result of 20% decline year over year in US land-based rig counts and wind energy project delays in Asia.

由於歐洲、中東和非洲和美洲的工業生產下降影響了這兩個領域，通用工程較前一年下降了 2%。本季土方工程下降 5%，主要是由於中國採礦活動減少；能源下降 14%，主要是石油和天然氣領域，原因是美國陸上鑽機數量年減 20%，以及亞洲風能工程延遲。

Turning now to profitability. In the quarter. Adjusted EBITDA declined 150 basis points, primarily due to lower sales and production volumes, higher wages and general inflation, unfavorable foreign exchange and the continued effect of unfavorable timing of pricing compared to raw material costs in the infrastructure segment. These were partially offset by higher price realization in the Metal Coatings segment and restructuring savings of approximately $6 million Metal Coatings.

現在轉向獲利能力。在本季度。調整後 EBITDA 下降 150 個基點，主要是由於銷售和產量下降、工資上漲和總體通膨、不利的外匯以及基礎設施領域與原材料成本相比不利的定價時機的持續影響。這些部分被金屬塗料部門更高的價格實現和約 600 萬美元的金屬塗料重組節省所抵消。

Adjusted operating margins decreased 230 basis points year over year, driven by lower sales and production volumes, higher wages and general inflation and a property sale gain in the prior year. These items were partially offset by higher price realization and restructuring savings of approximately $5 million. Infrastructure segment's adjusted operating margins decreased 100 basis points year over year, primarily due to lower sales volumes, higher wages and general inflation and the unfavorable timing of pricing compared to raw material costs.

由於銷售量和產量下降、薪資上漲、整體通膨以及上一年房地產銷售成長，調整後營業利潤率年減 230 個基點。這些項目被較高的價格實現和約 500 萬美元的重組節省所部分抵消。基礎設施部門調整後的營業利潤率年減100個基點，主要是由於銷售下降、薪資上漲和整體通膨以及與原物料成本相比不利的定價時機。

These factors were partially offset by restructuring savings of approximately $1 million. Adjusted EPS decreased to $0.30 compared to $0.39 in the prior year quarter. Free operating cash flow year to date was $84 million up from $60 million in the prior year. The increase in free operating cash flow was driven primarily by working capital changes, including improved inventory levels, partially offset by higher capital expenditures and lower net income.

這些因素被約 100 萬美元的重組節省部分抵消。調整後每股收益從去年同期的 0.39 美元降至 0.30 美元。今年迄今的自由經營現金流為 8,400 萬美元，高於去年的 6,000 萬美元。自由經營現金流的增加主要是由營運資本變動推動的，包括庫存水準的改善，但部分被資本支出增加和淨利潤下降所抵銷。

And finally, we continued the share repurchase program this quarter with $15 million of shares bought back, bringing the total amount repurchased to $178 million. Our share repurchase program reflects the confidence we have in our ability to execute our strategy for long-term value creation despite quarterly macro economic headwinds.

最後，我們本季繼續實施股票回購計劃，回購了 1,500 萬美元的股票，使回購總額達到 1.78 億美元。我們的股票回購計畫反映了我們對執行長期價值創造策略的能力充滿信心，儘管季度宏觀經濟不利。

Regarding the full year outlook as we discussed in detail last quarter, our outlook for the full year is largely informed by forecasts of specific market drivers, and those remain generally unchanged for the balance of the year. Pat will provide more details on the outlook in his section.

關於我們上季度詳細討論的全年展望，我們對全年的展望很大程度上取決於對特定市場驅動因素的預測，而這些驅動因素在今年餘下的時間裡總體上保持不變。帕特將在他的部分中提供有關前景的更多詳細資訊。

Now on Slide 4, I'd like to highlight an example of our innovation advantage continues to deliver enhanced product offerings to our customers.

現在，在投影片 4 上，我想強調一個例子，說明我們的創新優勢持續為客戶提供增強的產品。

This slide shows our new universal turning grade with Ken gold technology from our metal cutting portfolio. This new turning grade offers longer to life faster cutting speeds and enhanced reliability across a broad range of aerospace, defense, transportation, medical equipment and general engineering applications. Notably, this new turning gray is the fifth product launch for turning applications that leverage our state of the art, Ken gold coding and certain manufacturing capabilities that were enabled by modernization. And they are a great example of how we're no longer forced to play defense due to antiquated manufacturing capabilities. But instead we are now playing offense with new products to drive growth that outpaces the market.

這張投影片展示了我們金屬切割產品組合中採用 Ken gold 技術的新型通用車削材質。這種新型車削材質可在航空航太、國防、運輸、醫療設備和通用工程應用領域提供更長的使用壽命、更快的切割速度和更高的可靠性。值得注意的是，這款新的車削灰色是針對車削應用推出的第五款產品，這些產品利用了我們最先進的肯金編碼和現代化帶來的某些製造能力。它們是一個很好的例子，說明我們不再因為過時的製造能力而被迫採取防禦措施。但相反，我們現在正在積極開發新產品，以推動超過市場的成長。

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，他將回顧第三季的財務表現和前景。

Thank you, Chris, and good morning, everyone. I will begin on Slide 5 with a review of the Q3 operating results. The quarter's results show that we continued to execute our initiatives in the face of soft market conditions. Sales were down 4% year over year with an organic decline 2% fewer workdays of 1% and unfavorable currency exchange of 1%.

謝謝你，克里斯，大家早安。我將從投影片 5 開始回顧第三季的營運表現。本季的業績表明，面對疲軟的市場狀況，我們繼續執行我們的舉措。銷售額年減 4%，有機下降 2%，工作日減少 1%，不利的貨幣兌換減少 1%。

Sales performance this quarter was in line with the expectations we previously provided. Operating expense as a percentage of sales was flat year-over-year at 21.1%. Adjusted EBITDA and operating margins were 14.2% and 8.1% respectively, versus 15.7% and 9.8% in the prior year quarter.

本季的銷售業績符合我們先前提供的預期。營運費用佔銷售額的百分比與去年同期持平，為 21.1%。調整後 EBITDA 和營業利潤率分別為 14.2% 和 8.1%，去年同期為 15.7% 和 9.8%。

During the quarter, we realized approximately $6 million of savings from the previously announced restructuring program. We remain on pace to achieve run-rate savings of $35 million annually by the end of FY24. The adjusted effective tax rate increased year over year to 26.5%, primarily driven by unfavorable geographical mix, partially offset by favorable return to provision adjustment.

本季度，我們從先前宣布的重組計劃中節省了約 600 萬美元。我們仍將繼續努力，爭取在 2024 財政年度結束前每年節省 3,500 萬美元的營運費用。調整後的有效稅率同比上升至26.5%，主要是由於不利的地域組合推動的，但部分被有利的撥備調整回報所抵消。

Adjusted earnings per share were $0.30 in the quarter versus EPS of $0.39 in the prior year period. The main drivers of our EPS performance are highlighted on the bridge on Slide 6. Year over year, effective operations this quarter was negative $0.07. This reflects lower sales and production volumes and higher wage and general inflation in both businesses and unfavorable price in raw material timing and infrastructure. These items were partially offset by higher prices in metal cutting and restructuring savings in both businesses. You can also see the effects of the tax rate, foreign exchange and lower share count on EPS.

本季調整後每股收益為 0.30 美元，去年同期每股收益為 0.39 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。這反映了兩個企業的銷售和產量下降、工資上漲和普遍通膨，以及原物料時機和基礎設施價格不利。這些項目被金屬切削價格上漲和兩項業務重組節省部分抵消。您還可以看到稅率、外匯和較低股數對每股盈餘的影響。

Slides 7 and 8 detail the performance of our segments this quarter reported metal cutting sales were down 2% compared to the prior year quarter with flat organic sales and an unfavorable foreign currency effect of 1% and unfavorable Workdays of 1% by region. On a constant currency basis, sales in EMEA were flat with the Americas and Asia Pacific each down 1%. Amir year over year. Performance reflects growth driven by transportation and aerospace and defense, offset by general engineering in the Americas, we continued to execute our growth initiatives in aerospace and defense and in general engineering growth in these end markets were more than offset by lower sales in transportation and energy in Asia Pacific, sales growth in India was more than offset by market conditions in China and a few other smaller markets.

投影片7 和8 詳細介紹了本季我們各部門的業績，報告顯示，金屬切削銷售額與去年同期相比下降了2%，有機銷售額持平，按地區劃分，不利的外匯影響為1%，不利的工作日為1%。以固定匯率計算，歐洲、中東和非洲地區的銷售額持平，美洲和亞太地區各下降 1%。阿米爾年復一年。業績反映了運輸、航空航太和國防推動的成長，但被美洲的通用工程所抵消，我們繼續執行航空航太和國防以及通用工程領域的成長計劃，這些終端市場的成長被運輸和能源銷售額的下降所抵銷在亞太地區，印度的銷售成長被中國和其他一些較小市場的市場狀況所抵銷。

Looking at sales by end market, Aerospace and Defense grew 9% year over year as our strategic initiatives continue to drive results in this end market, general engineering declined 2% year over year with modest growth in the Americas and Asia Pacific, offset by lower sales in Amea. Energy declined 8% this quarter with the majority of effect in the Americas coming from continued slow conditions in oil and gas and in Asia Pacific from wind power project delays. And lastly, sales and transportation were flat with EV and hybrid project wins and overall strength in Amea offset by project sales in the prior year that did not repeat in the Americas.

從終端市場來看，由於我們的策略措施持續推動該終端市場的業績，航空航太和國防年增9%，通用工程年減2%，美洲和亞太地區略有成長，但被較低的銷售額所抵銷Amea 的銷售。本季能源下降 8%，其中美洲的大部分影響來自石油和天然氣的持續低迷，而亞太地區的影響則來自風電工程的延誤。最後，銷售和運輸持平，因為電動車和混合動力項目的贏得以及美洲地區的整體實力被上一年的項目銷售所抵消，而這種情況在美洲沒有重複。

Metal Cutting adjusted operating margin of 10.8%, decreased 230 basis points year over year as lower sales and production volumes, higher wages and general inflation and a gain on a property sale of approximately $1 million in the prior year period that did not repeat were partially offset by higher price and restructuring savings of approximately $5 million. We will continue to align variable costs to production levels over the next several months.

金屬切削調整後的營業利潤率為10.8%，年減230 個基點，原因是銷量和產量下降、工資上漲和總體通膨以及上一年期間房地產銷售收益約100 萬美元（未重複）部分被部分抵消。在接下來的幾個月裡，我們將繼續根據生產水準調整變動成本。

Turning to Slide 8 for infrastructure. Reported infrastructure sales were down 7% year over year due to negative organic sales of 5% and unfavorable foreign exchange and fewer business days of one percentage. Regionally, on a constant currency basis, the US sales increased by 1%. Asia Pacific declined 2% and America sales declined 9%.

轉向幻燈片 8 了解基礎設施。報告的基礎設施銷售額年減 7%，原因是有機銷售額下降 5%、外匯不利以及工作日減少 1%。從地區來看，以固定匯率計算，美國銷售額成長了 1%。亞太地區銷量下降 2%，美洲銷量下降 9%。

Looking at sales by end market. On a constant currency basis, aerospace and defense sales increased 13%, driven by market growth and executing on our growth initiatives. General engineering declined 2% due to lower industrial activity year over year and or inventory sales in the prior year, partially offset by ceramics growth in EMEA and Asia-Pacific for earthworks declined 5% due to lower underground mining in China and the lower sales of snowplow blades in the Americas from a milder winter. And lastly, energy declined 16%, mainly in Americas due to lower US land rig counts and drilling activity.

按終端市場劃分的銷售情形。以固定匯率計算，在市場成長和執行我們的成長計畫的推動下，航空航太和國防銷售額成長了 13%。由於工業活動年減和/或前一年的庫存銷售下降，通用工程下降了2%，部分被歐洲、中東和非洲和亞太地區土方工程陶瓷增長下降5% 所抵消，原因是中國地下開採減少以及陶瓷產品銷售下降美洲的掃雪機刀片擺脫了溫和的冬季。最後，能源下降了 16%，主要是由於美國陸地鑽機數量和鑽探活動減少而導緻美洲。

Adjusted operating margin declined year over year to 3.8%, primarily due to a few factors. First, lower sales volume, primarily in the energy and earthwork end markets, higher wages and general inflation and unfavorable price raw material timing. These headwinds were partially offset by restructuring savings of approximately $1 million.

調整後營業利潤率年減至 3.8%，這主要是由於幾個因素造成的。首先，銷售量下降（主要是在能源和土方工程終端市場）、薪資上漲和整體通膨以及原物料價格不利的時機。這些不利因素被約 100 萬美元的重組節省部分抵消。

As we discussed last quarter, provided the tungsten prices remain relatively steady as they have Q3 was the last quarter we expected to experience unfavorable price raw material effects. Accordingly, we continue to expect infrastructure's fourth quarter margins to be approximately at the same level as last year's fourth quarter.

正如我們上季度所討論的，如果鎢價保持相對穩定，那麼第三季度是我們預計將經歷不利的原材料價格影響的最後一個季度。因此，我們繼續預計基礎設施第四季的利潤率將與去年第四季大致持平。

Now turning to Slide 9 to review our free operating cash flow and balance sheet. Our year to date free operating cash flow increased to $84 million from $60 million in the prior year. Increase in free operating cash flow was driven primarily by working capital changes, including improved inventory levels, partially offset by higher capital expenditures and lower net income compared to the prior year period. Primary working capital this quarter was down from the prior year. The Company continues to focus on optimizing inventory levels and remains focused on driving improved working capital.

現在轉向投影片 9 來回顧我們的自由營運現金流和資產負債表。年初至今，我們的自由營運現金流從前一年的 6,000 萬美元增加到 8,400 萬美元。自由經營現金流的增加主要是由營運資本變動推動的，包括庫存水準的改善，但與去年同期相比，資本支出增加和淨利減少部分抵銷了這一變化。本季主要營運資本較上年下降。公司繼續專注於優化庫存水平，並繼續致力於改善營運資金。

On a dollar basis, year-over-year, primary working capital decreased to $658 million, down from $712 million at the end of the third quarter of fiscal '23. On a percentage of sales basis, primary working capital decreased to 32.7% year to date, net capital expenditures increased to $79 million compared to $66 million in the prior year.

以美元計算，主要營運資本年減至 6.58 億美元，低於 23 財年第三季末的 7.12 億美元。以銷售額百分比計算，年初至今主要營運資本下降至 32.7%，淨資本支出從前一年的 6,600 萬美元增加到 7,900 萬美元。

In total, we returned $31 million to shareholders through our share repurchase and dividend programs under our $200 million share repurchase program that ends in June. We bought $15 million of shares in Q3 for a total of $178 million or 6.5 million shares, representing approximately 8% of outstanding shares. Since the inception of the program, we had no activity under the new $200 million three-year share repurchase program authorized by our Board in February. 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 confidence in our ability to execute our strategy to drive growth and margin improvements. Indeed, to maintain a healthy balance sheet and debt maturity profile. At quarter end, we had combined cash and revolver availability of approximately $785 million and were well within our financial covenant. Full balance sheet can be found on slide 15 in the appendix.

根據 6 月結束的 2 億美元股票回購計劃，我們透過股票回購和股利計劃總共向股東返還了 3,100 萬美元。我們在第三季購買了 1,500 萬美元的股票，總計 1.78 億美元，即 650 萬股，約佔已發行股票的 8%。自該計劃啟動以來，我們沒有根據董事會 2 月批准的新的 2 億美元三年股票回購計畫開展任何活動。自 50 多年前成為上市公司以來，我們每季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成長和利潤改善策略的能力的信心。事實上，要保持健康的資產負債表和債務到期狀況。截至季末，我們的現金和左輪手槍可用總量約為 7.85 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投影片 15 找到。

Turning to slide 10, regarding our full year outlook. Since we are now in the fourth quarter, we are narrowing our sales and EPS outlook, we now expect FY24 sales to be between $2.03 billion and $2.05 billion, with volume ranging from negative 4% to negative 3% net price realization of approximately 2% with our inflationary pricing actions, partially offset by lower prices for customers with index pricing due to higher material content and a neutral effect from foreign exchange, however, reflected in the annual outlook is an anticipated fourth quarter foreign exchange headwind of approximately 1% year over year. Our adjusted EPS outlook is now $1.40 to $1.55.

轉向幻燈片 10，關於我們的全年展望。由於現在正處於第四季度，我們正在縮小銷售額和每股收益的預期，我們現在預計2024 財年銷售額將在20.3 億美元至20.5 億美元之間，銷量範圍從負4% 到負3%淨價實現約為2%由於我們的通膨定價行動，部分被因材料含量較高和外匯的中性影響而採用指數定價的客戶的較低價格所抵消，但是，年度展望中反映出預計第四季度外匯逆風年減約1%年。我們調整後的每股盈餘前景目前為 1.40 美元至 1.55 美元。

The last notable change to our outlook is an increase in our free operating cash flow to be greater than 125% of adjusted net income up from greater than 100%. The other elements of our outlook shown on this slide are unchanged from the prior quarter. And with that, I'll turn it back over to Chris.

我們前景的最後一個顯著變化是我們的自由經營現金流從調整後淨利潤的 100% 以上增加至 125% 以上。這張投影片中顯示的我們展望的其他要素與上一季相比沒有變化。有了這個，我會把它轉回給克里斯。

Thanks for turning to Slide 11. Let me take a few minutes to summarize. Although macro conditions remain a headwind in the short term, the global megatrends that should drive market growth over the long term remain intact. We have successfully navigated similar macro headwinds before and we'll stay focused on what we can control to improve margins and drive share gain throughout the economic cycle. As you know, I announced my decision to retire effective May 31. I've been fortunate to lead a strong team of employees dedicated to improving the company and continuously improving our ability to serve customers through simplification and modernization.

感謝您翻到投影片 11。儘管宏觀環境在短期內仍是不利因素，但從長遠來看，推動市場成長的全球大趨勢仍然完好無損。我們之前已經成功地應對了類似的宏觀逆風，我們將繼續專注於我們可以控制的因素，以提高利潤率並推動整個經濟週期的份額成長。如您所知，我宣布了從 5 月 31 日起退休的決定。

We've streamlined the organization and improve sales effectiveness, improve customer service, make our factories more efficient and enabled the development of new products. We successfully navigated the challenges of COVID and embarked on a cultural transformation to drive accountability across the enterprise for gaining share and improving profitability. I'm exceptionally proud of the work our teams have done to make Kennametal stronger over the last seven years.

我們精簡了組織，提高了銷售效率，改善了客戶服務，使我們的工廠更有效率，並促進了新產品的開發。我們成功應對了新冠疫情的挑戰，並開始了文化轉型，以推動整個企業的問責制，從而獲得份額並提高盈利能力。我對我們的團隊在過去七年中為使肯納金屬變得更加強大所做的工作感到非常自豪。

Finally, I'm especially proud to turn leadership of the Company over to my chosen successor Sanjay shall be. I'm confident the company will continue to improve under his very capable leadership.

最後，我特別自豪地將公司的領導權移交給我選定的繼任者桑傑 (Sanjay)。我相信公司將在他非常有能力的領導下繼續進步。

Sanjay, is there anything you'd like to add?

桑傑，您還有什麼要補充的嗎？

I would Chris, first on behalf of all of us at Kennametal.

我首先代表肯納金屬公司的所有人，請克里斯發言。

Let me just say thank you for everything you have done for the Company over the last seven years. I also want to personally thank you for your support and coaching, especially during this transition period.

讓我對您過去七年來為公司所做的一切表示感謝。我也想親自感謝您的支持和指導，特別是在這個過渡時期。

Now a quick update from my side. Over the last couple of months, I have continued to run metal cutting along with taking time to learn more about the infrastructure business and the enterprise as a whole.

現在我這邊進行快速更新。在過去的幾個月裡，我繼續從事金屬切割工作，同時花時間了解更多基礎設施業務和整個企業。

Looking ahead, we'll work on the following top three priorities while living our values of safety, respect, integrity and accountability.

展望未來，我們將致力於以下三大優先事項，同時實踐我們的安全、尊重、誠信和問責價值。

First above market growth through innovation advantage, best in class customer service and commercial excellence. Second, margin expansion through operational excellence and applying lean principles. And third, executing a balanced capital allocation strategy.

透過創新優勢、一流的客戶服務和卓越的商業表現，率先超越市場成長。其次，透過卓越營運和應用精實原則來擴大利潤。第三，執行平衡的資本配置策略。

In closing, I'm really excited to step into the CEO role on June first, and I'm looking forward to connecting with all of you in August to cover our full year results and fiscal '25 outlook.

最後，我很高興能夠在 6 月 1 日就任首席執行官，我期待在 8 月份與大家聯繫，介紹我們的全年業績和 25 財年展望。

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

謝謝桑傑。那麼，接線員，請開通提問線路。

(Operator Instructions) Steve Volkmann, Jefferies.

（操作員說明）Steve Volkmann，Jefferies。

Morning, Steve, there perhaps you're muted, Mr. Volker,

早安，史蒂夫，沃克先生，你可能靜音了，

We'll move on to our next question from Ms. Angel Castillo, Morgan Stanley.

我們將繼續回答摩根士丹利 Angel Castillo 女士提出的下一個問題。

Thanks for taking my question. And Chris, it's been a pleasure working with you and wish you all the best. And Sanjay looking forward to working with you going forward.

感謝您提出我的問題。克里斯，很高興與您合作，並祝您一切順利。 Sanjay 期待與您繼續合作。

So maybe just to dive into a little bit more of kind of the outlook and what you're seeing on the surface and the fundamentals are the quarter kind of shook out as you expected, but it looks like the mix of it in terms of end markets might have been a little bit different on. Can you just walk through the major end markets and maybe some of the pivots or changes that you've seen in terms of the underlying trends in the third quarter? And then maybe you kind of bolster that with some of the underlying trends that you're seeing thus far in the fourth quarter across those end markets?

因此，也許只是深入了解前景，以及您在表面和基本面上看到的情況，本季的基本面如您所預期的那樣發生了變化，但看起來像是最終的混合結果市場可能會有所不同。您能否簡單介紹一下主要的終端市場，以及您在第三季的基本趨勢方面看到的一些關鍵點或變化？然後，也許您可以透過第四季度迄今為止在這些終端市場看到的一些基本趨勢來支持這一點？

Yes, sure. Let me start with a metal cutting. First um, we we had expected general engineering to be flat with industrial activity remains soft in the Americas and EMEA.

是的，當然。讓我從金屬切削開始。首先，我們預期通用工程將持平，美洲和歐洲、中東和非洲的工業活動仍然疲軟。

And then Asia Pacific sequentially, the IPI.s, they were they were going to they were going to slightly improve. And that's that's basically what we saw bill rates on aerospace, they deteriorated slightly, I think because of the quality issues that one of the major OEMs had in energy was pretty much flat. The rig count was up was flat. And then as we said on our prepared remarks, it was down year over year. But if I look at Q3 to Q4 sequentially, I'd still say general engineering, again, relatively flat Americas in Amea And Asia Pacific would be improving. So that's driven primarily by by India. And then also China, there's a normal seasonality that we would see there that would drive some improvement.

然後亞太地區的 IPI.s 將會略有改善。這基本上就是我們在航空航太領域看到的帳單費率，它們略有惡化，我認為是因為主要原始設備製造商之一在能源領域遇到的品質問題幾乎持平。鑽機數量成長持平。正如我們在準備好的發言中所說，它逐年下降。但如果我按順序查看第三季度到第四季度，我仍然會說通用工程，同樣，相對平坦的美洲、美洲和亞太地區將會有所改善。所以這主要是由印度推動的。然後是中國，我們會看到正常的季節性因素會推動一些改善。

Aerospace. That segment continues to improve and be strong, but it is dependent on the production issues stabilizing for for one of the major OEMs, but generally that the long-term trends for that are still very positive.

航天。該細分市場持續改善並保持強勁，但這取決於主要原始設備製造商之一的生產問題是否穩定，但總體而言，長期趨勢仍然非常積極。

Energy, we expect, again to be flat the rig count in Q4 is expected to go up a couple of rigs, but essentially Angel is pretty much flat. And then Powergen remained stable in Amea And Asia Pacific for transportation. We think that Americas is going to continue to improve again sequentially due to strike recovery and also seasonality. Amir will probably be flat and Asia Pacific will improve also due to seasonality buying gold into infrastructure. I would say that the quarter played out about what we said.

我們預計能源將再次持平，第四季度的鑽機數量預計將增加一些，但本質上 Angel 幾乎持平。然後Powergen在Amea和亞太地區的運輸保持穩定。我們認為，由於罷工恢復和季節性因素，美洲將繼續繼續改善。阿米爾的情況可能會持平，而亞太地區的情況也會有所改善，這也是由於季節性購買黃金用於基礎建設所致。我想說的是，本季的表現符合我們所說的。

My comments that I made for metal cutting and general engineering will be the same for infrastructure. And energy, as I said, was flat with the rig counts being stable and then our customer sentiment in terms of outlook for energy in North America anyway, as they seem to have been done with their completed their inventory adjustments and we think things will pretty much be flat for for the fourth quarter and mining that activity was lower than we expected and was driven primarily by lower coal demand in the US, largely due to the milder winter and on a slower China recovery. And then in construction that followed the normal seasonal pattern. Pat mentioned the snow blades that were down slightly due to the mild winter.

我對金屬切割和通用工程的評論對於基礎設施也是一樣的。正如我所說，能源持平，鑽機數量穩定，然後我們的客戶對北美能源前景的看法無論如何，因為他們似乎已經完成了庫存調整，我們認為情況會很好第四季度的情況基本持平，採礦活動低於我們的預期，主要是由於美國煤炭需求下降，而這主要是由於冬季氣候溫和以及中國復甦放緩所致。然後按照正常的季節性模式進行施工。帕特提到，由於暖冬，雪片略有下降。

If I look at infrastructure going forward, again, general engineering, same comments apply to as we have with Metal Coatings, basically flat with some continued strength in India driving growth in Asia Pacific. Energy, as I said, will probably be flat Q3 to Q4. Mining is expected to sort of stabilize at the current levels on in general, there are softer market conditions in China and China. And in terms of the thermal coal, you'll the milder winter, obviously created an excess supply of coal. So that will probably will also probably continue to be a bit of a headwind. And then construction, we expect that to follow the normal seasonal pattern except in China, again, due to the lower economic activity, looks like construction is slowing down a little bit.

如果我再看看未來的基礎設施，一般工程，同樣的評論也適用於我們對金屬塗料的看法，基本上持平，印度的一些持續實力推動了亞太地區的成長。正如我所說，能源第三季到第四季可能會持平。總體而言，由於中國和中國的市場狀況較為疲軟，預計採礦業將穩定在當前水準。而就動力煤而言，今年的暖冬，顯然造成了煤炭供應過剩。因此，這也可能繼續成為一個阻力。然後，我們預計建築施工將遵循正常的季節性模式（中國除外），同樣，由於經濟活動較低，建築施工似乎略有放緩。

And I'm going to ask you, I think, Angel, thanks

我想我要問你，天使，謝謝

I appreciate now that that's very thorough and helpful, thank you. And maybe switching over to the stronger free operating cash flow that you talked about. Can you just maybe give us a bit of a sense of what you're kind of expecting there in terms of maybe some of the absolute value and then the use of that cash in terms of the buyback, what kind of cadence should we anticipate in terms of potential for buybacks in the following quarters? And do you kind of expect that to pick up from current levels given where the stock prices or how are you kind of seeing that?

我現在很感激這是非常徹底和有幫助的，謝謝。也許會轉向你談到的更強勁的自由營運現金流。您能否讓我們了解一下您對某些絕對價值的期望，然後在回購方面使用該現金，我們應該預期什麼樣的節奏接下來幾季回購的潛力如何？考慮到股價，您是否預計這一點會從當前水準回升，或者您對此有何看法？

Yes, Joe, a couple of thoughts just overall on free operating cash flow development, as you know, our strongest quarters from a cash flow perspective, our Q3 and Q4, we would expect that to be the case here as well, an FY24, no, from a capital structuring perspective in the way we have thought about our share repurchase program. It has been always at a minimum to offset the dilution that comes from management compensation programs as well as to opportunistically buy back shares when we've got the cash and when it's appropriate, given other potential calls on cash like no bolt-on M&A and the like, as well as we think about our cash position, I'll say going throughout the year as we close out Q4, always on our mind is the fact that as we enter into the new fiscal year and normally our worst cash flow quarter is Q1, right?

是的，喬，關於自由經營現金流發展的一些總體想法，如您所知，從現金流角度來看，我們最強勁的季度，我們的第三季度和第四季度，我們預計這裡也是如此， 2024 財年，不，從資本結構的角度來看，我們考慮我們的股票回購計畫。考慮到其他潛在的現金需求，例如沒有補充性併購和類似的，以及我們考慮我們的現金狀況，我會說，在我們結束第四季度時，我們始終想到的是這樣一個事實：當我們進入新的財政年度和通常是我們現金流最差的季度時是Q1，對嗎？

And so those are always thoughts that are on our mind in terms of how we size in at the share repurchase program. Obviously, as well, we are going to be concluding here our first repurchase repurchase program of $200 million that will terminate here at the end of the fiscal year and our Board's already authorized the second tranche of that repurchase program starting in February, an additional three year $200 million repurchase program that we all get started on the future here as well. So we remain committed to returning cash to shareholders. We're working on that balanced capital allocation strategy.

因此，當我們如何參與股票回購計畫時，這些始終是我們腦海中的想法。顯然，我們也將在這裡完成我們的第一個2 億美元的回購計劃，該計劃將在本財年結束時終止，並且我們的董事會已經批准了從2 月份開始的第二筆回購計劃，另外還有3 筆回購計劃。因此，我們仍然致力於向股東返還現金。我們正在製定平衡的資本配置策略。

Very helpful. Thank you.

很有幫助。謝謝。

(Operator Instructions) Julian Mitchell, Barclays.

（操作員指示）朱利安·米切爾，巴克萊銀行。

Hi, good morning, and I wish you all the best, Chris, and thanks for the all the help down the years and maybe and just to start off with the question perhaps on that price sort of raws dynamic. I understand it was a headwind in the third quarter year on year should be a tailwind. I think right now in the fourth quarter into early next year. So I just wondered perhaps, Pat, if you could sort of flesh that out a little bit, what kind of tailwind, particularly the infrastructure segment should get in Q4 from from tungsten and any sort of way of sizing the effect into the first half of next year?

你好，早安，克里斯，我祝你一切順利，感謝你多年來的所有幫助，也許只是從價格動態的問題開始。我知道這是第三季的逆風，年比應該是順風。我認為現在是第四季到明年初。所以我只是想知道，帕特，你是否可以稍微具體一點，什麼樣的順風，特別是基礎設施領域應該在第四季度從鎢中獲得什麼樣的順風，以及任何一種將影響調整到上半年的方式明年？

So as we think about the growth of the general dynamics here in that infrastructure segment, we do see price lead raw material costs a little bit. That's what drives part of this dynamic for us as we move from in Q1 into Q2, we did see a sequential headwind of about [$13 million] at the enterprise level. That was predominantly in the infrastructure segment as we move from Q2 to Q3. That headwind was basically, I'll say, equal in size. And then as we get into Q4, we'll see that headwind abate.

因此，當我們考慮基礎設施領域整體動態的成長時，我們確實看到價格領先於原物料成本。當我們從第一季進入第二季時，這就是推動我們這一動態的部分原因，我們確實在企業層面看到了約 [1300 萬美元] 的連續逆風。當我們從第二季進入第三季時，這主要是在基礎設施領域。我想說，這種逆風的大小基本上是相等的。然後，當我們進入第四季時，我們會看到逆風減弱。

Right. And so at this point in time, in Q4, I'll say we're simply pricing on the same level. The cost is flowing through the P&L again in general, as we think about how that structurally works for us, we and we have visibility also into the cost structure going forward from a tungsten perspective about two quarters. And as we've seen tungsten prices here over, I'd say the last 45 days or so our recent low up again from about 45 days ago, sitting around [312, 313] per MTU. Most recently last week were about [332, 333] so we have seen a little bit of an uptick in the cost of tungsten. As that I'll say, continues at that level. We'll see that we can book it as time moves on, we'll get more and more stability into the cost structure into the I'll say at this point in time, the second quarter, more or less of of FY25. And so that's kind of where we're at right now.

正確的。因此，在第四季度的這個時間點，我會說我們只是在同一水平上定價。總體而言，成本再次流經損益表，當我們思考這在結構上如何為我們發揮作用時，我們也可以從鎢的角度了解未來兩個季度的成本結構。正如我們在這裡看到的鎢價一樣，我想說的是，在過去 45 天左右的時間裡，我們最近的低點再次從大約 45 天前上漲，約為每 MTU [312, 313]。上週最近的價格約為 [332, 333]，因此我們看到鎢的成本略有上升。正如我要說的，繼續保持這個水平。我們會看到，隨著時間的推移，我們可以預訂它，我會說，在這個時間點，第二季度，或多或少的 25 財年，我們的成本結構將變得越來越穩定。這就是我們現在所處的情況。

Thanks very much. And then just my second question, you've talked about demand a little bit already, and I just wanted to follow up on that. So I think China is an area where clearly your you took down the outlook a little bit. I just wondered, sort of beyond China, have you seen any change in demand patents, particularly in areas like general engineering in the last couple of months or your business selling into kind of, say, off-highway machinery OEMs?

非常感謝。接下來是我的第二個問題，您已經談到了一些需求，我只想跟進這一點。因此，我認為中國是一個明顯降低了前景的地區。我只是想知道，在中國之外，您是否看到需求專利有任何變化，特別是在過去幾個月的通用工程領域，或者您的業務向非公路機械原始設備製造商等領域銷售？

Yes, it seems like listening to other companies in the last two or three weeks, there has been some softness in orders or sales in those types of markets. Just wondered if you'd seen a similar pattern or else outside China, things have actually been very steady for you.

是的，在過去兩三週內聽其他公司的說法，這些類型市場的訂單或銷售出現了一些疲軟。只是想知道您是否見過類似的模式，或者在中國以外的地方，情況實際上對您來說非常穩定。

Yes, I think in general, general engineering, for example, if you look at if you look at the Eurozone. And I think that PMI has been below [50] now Juliana for like 21-months and it's up for the last several months. It's just kind of been bouncing just below the [50] mark and between I think [45 50]. So it hasn't really changed much. And the same thing with the with the US as we seem to be in this mode where it's it's in contraction territory, but it's kind of it's kind of stabilizing at about the same level of Now recently, if you look at April IPIS. for industrial production, which is a good, good metric for general engineering, and it ticked up a little bit in April, but we've seen that happen before. So I don't I don't know that we can call it a trend, but we still see at least through the fourth quarter. I think things are sort of stable at these. It may be softer levels is how it how I characterize it.

是的，我認為一般來說，一般工程，例如，如果你看看歐元區。我認為 PMI 已經連續 21 個月低於 [50]，現在朱莉安娜，並且在過去幾個月裡一直在上升。它只是在 [50] 標記下方和我認為 [45 50] 之間反彈。所以它並沒有真正改變太多。美國的情況也是如此，我們似乎處於這種模式，它處於收縮區域，但如果你看看 4 月的 IPIS，它會穩定在與最近相同的水平。對於工業生產來說，這對於一般工程來說是一個很好的指標，並且在 4 月略有上升，但我們之前已經看到這種情況發生。所以我不知道我們可以稱之為趨勢，但我們至少仍然看到第四季。我認為事情在這些方面已經穩定了。我對它的描述可能是更柔和的水平。

That's helpful.

這很有幫助。

Thanks very much.

非常感謝。

(Operator Instructions) Tami Zakaria, JPMorgan

（操作員指示）Tami Zakaria，摩根大通

Hi, good morning. Thank you. So much. And Chris, thanks for all the help and wish you the best of luck, and welcome aboard to Sanjay.

早安.謝謝。非常。克里斯，感謝您提供的所有幫助，祝您好運，歡迎加入 Sanjay。

So my first question is around modeling. Can you remind us is the fourth quarter, similar from a warranty perspective, year over year, we have a different compare.

所以我的第一個問題是關於建模的。您能提醒我們的是第四季度，從保固角度來看類似，與去年同期相比，我們有不同的比較。

You know, from a Workday perspective, it is fractionally higher.

你知道，從工作日的角度來看，這個數字要高一些。

I don't think it's even a full day for Workday.

我認為這甚至不是工作日的一整天。

Got it. Okay.

知道了。好的。

Up there is just, you know, embedded in that obviously, we've had I'll say, for the most part, an Easter holiday shift where Easter was more of a third quarter phenomena for us this year in the Americas and Europe and last in the prior year would have been a fourth quarter phenomenon.

你知道，顯然，我們已經經歷了復活節假期的轉變，我想說，在很大程度上，復活節假期對我們今年在美洲和歐洲來說更像是第三季的現象，去年的最後一次現像是第四季的現象。

Got it. That's very helpful. And my second question is around aerospace and defense. I think one of the major OEMs, I just had a new an investigation opened on a different aircraft model. How this is more from a medium to long-term perspective. How are you thinking about build rates over the next few years? Do you expect aerospace and defense to grow nicely over the next few years? And also, can you comment on the mix between commercial aero versus defense within your portfolio?

知道了。這非常有幫助。我的第二個問題是關於航空航天和國防的。我認為主要的原始設備製造商之一，我剛剛對不同的飛機型號進行了新的調查。這更多是從中長期角度來看的。您如何看待未來幾年的建設速度？您預計航空航太和國防領域在未來幾年會出現良好成長嗎？另外，您能否評論一下您的產品組合中商業航空與國防之間的組合？

Yes. I would say on the commercial versus defense, it's mostly mostly commercial, but there is a portion that is certainly defense related and we are low our view for for aerospace and the commercial air production long term is that the demand is demand is solid. If you look at the major OEMs, yes, there's there's quality issues which we think got, of course, we are certainly on inhibiting demand in the short term, and we've kind of reflected that in our Q4 forecast. But even if you look at the other major OEMs, there are still they're still constrained by supply chain. And we know that that supply chain because we're also active in that those both suppliers are actively working on improving increasing production.

是的。我想說的是，在商業與國防方面，它主要是商業性的，但有一部分肯定與國防有關，我們對航空航天和商業空氣生產的長期看法是，需求是穩定的。如果你看看主要的原始設備製造商，是的，我們認為存在品質問題，當然，我們肯定會在短期內抑制需求，我們已經在第四季度的預測中反映了這一點。但即使你看看其他主要的原始設備製造商，他們仍然受到供應鏈的限制。我們知道該供應鏈，因為我們也很活躍，因為這兩家供應商都在積極致力於提高產量。

So I think it's just a matter of time where the supply chain will no longer be a constraint, especially when you were talking about in the mid in the midterm timing. But the demand is very solid. There's definitely a need for more aircraft. And so we feel we feel very good about that. But we are there are some constraints right now that are holding things back. And I still think I don't believe production build rates are still what they were prior to the of the pandemic.

因此，我認為供應鏈不再成為限制只是時間問題，特別是當你談到中期時機時。但需求非常強勁。肯定需要更多飛機。所以我們對此感覺非常好。但我們現在有一些限制因素阻礙了我們的發展。我仍然認為我不相信生產建設率仍然是大流行之前的水平。

Got it. Thank you so much.

知道了。太感謝了。

(Operator Instructions) Steve Barger, KeyBanc.

（操作員說明）Steve Barger，KeyBanc。

This is [Christian Zyla] for Steve Barger. Thank you for taking the questions.

我是史蒂夫·巴格的[克里斯蒂安·齊拉]。感謝您提出問題。

And we just like to echo previous comments. It's been a pleasure working with you, Chris, and we look forward to working with you, Sanjay. And first question, I know you guys continue to focus on your commercial excellence and product innovations. Can you just give us some idea of how the new product contributions relate to growth and then production upcycle. How much do you think you would outgrow the market given your efforts on these fronts?

我們只是想回應之前的評論。克里斯，很高興與您合作，桑傑，我們期待與您合作。第一個問題，我知道你們繼續專注於商業卓越和產品創新。您能否給我們一些關於新產品貢獻與成長以及生產升級週期之間的關係的想法？鑑於您在這些方面的努力，您認為您的成長速度會超過市場多少？

Yes, I think it's a really good question because as I talked about in my opening remarks, prior to modernization, I think it was fair to say that we were on we were lagging off in terms of our ability to release new products and position ourselves to take share. And that's now changed with modernization. I the example I gave in my prepared remarks, were the fifth product innovation that's been released on since modernization. That's just done this and this coating area, that's not all products, of course. But I think if we look back prior to modernization, it may have been it may have been seven or eight years before we had released anything along those lines because we simply lack the manufacturing capability to to make this new these new products with this new coating technology.

是的，我認為這是一個非常好的問題，因為正如我在開場白中談到的，在現代化之前，我認為可以公平地說，我們在發布新產品和定位自己的能力方面落後了分享。現在隨著現代化的發展，這種情況已經改變了。我在準備好的發言中舉的例子是現代化以來發布的第五個產品創新。這只是完成了這個和這個塗層區域，當然這不是所有產品。但我認為，如果我們回顧現代化之前的情況，我們可能已經過了七、八年才發布類似的產品，因為我們根本缺乏製造能力來製造帶有這種新塗層的新產品技術。

So for me, it's very it's very significant that we are we finished this modernization of sort of 2022. We're leveraging the success of these examples. And so most of that growth is still ahead of us. If you look at the adoption rate and how people are looking at these new products, they feel they feel very good about it. But clearly, that's a change from where we were before modernization, where we were we were not releasing new products as quickly.

因此，對我來說，我們在 2022 年完成了現代化，這一點非常非常重要。因此，大部分成長仍遙遙領先。如果你看看採用率以及人們如何看待這些新產品，你會發現他們對此感覺非常好。但顯然，這與現代化之前的情況相比發生了變化，我們沒有那麼快地發布新產品。

So it is our innovation advantage is very key to driving share gain. It is one of the major levers we have along with, of course, customer service levels, and that's also improved through modernization because typically before we are we were challenged in terms of consistency and quality before modernization and also our I think our on-time performance and our ability to respond within the proper lead times was also constrained. So we feel very good about it is a major driver. And we haven't we haven't differentiated, Christian in terms of how much of how much of the driver of it of share gain. That is other other than I would say it's a big, big piece of it. And then I would comment on our Investor Day that we plan on getting a 1% to 2% growth from the markets based on long-term megatrends, we used about 2% of growth from price, and that's pretty consistent with what we've done historically. And then the share gain, again driven off as one of the big levers on innovation, that's also 1% to 2% over the long term.

因此，我們的創新優勢對於推動份額成長非常關鍵。當然，這是我們擁有的主要槓桿之一，當然還有客戶服務水平，這也透過現代化得到了改善，因為通常在現代化之前，我們在一致性和品質方面面臨著挑戰​​，而且我認為我們的準時性也受到了挑戰。所以我們感覺非常好，這是一個主要驅動力。我們還沒有區分基督教的份額成長的驅動因素有多少。這與我所說的不同，這是其中很大一部分。然後我會在投資者日評論說，我們計劃根據長期大趨勢從市場獲得 1% 到 2% 的增長，我們使用了大約 2% 的價格增長，這與我們的預測非常一致。然後，份額收益再次成為創新的重要槓桿之一，從長期來看，份額收益也是 1% 到 2%。

Great. Very helpful. Thanks for that color. If I could just follow up on that, which markets do your innovation wins allow you to take share and or I guess, do they enable upside to the range that your margins seem like they've been in for the past few years?

偉大的。很有幫助。謝謝那個顏色。如果我能跟進一下，您的創新贏得了哪些市場，讓您能夠獲得份額，或者我猜，它們是否可以使您的利潤率上升到過去幾年的水平？

Yes, I think they are feeling that maybe the example that I gave in my prepared remarks, if you noticed that had a broad range of applications. So it's we do customize some tools that are specific, for example, example may be more on titanium machining that happens in aerospace more than anywhere else. But for the most part, a lot of these prospects, while they may be, are designed with a specific application, for example, in aerospace in mind, they have broad application across many industries. So that's a good thing about our products as they have broad application.

是的，我認為他們覺得也許我在準備好的發言中給出的例子有廣泛的應用。因此，我們確實定制了一些特定的工具，例如，可能更多地用於航空航天領域比其他地方更多的鈦加工。但在大多數情況下，許多這些前景雖然可能是針對特定應用而設計的，例如在航空航太領域，但它們在許多行業都有廣泛的應用。因此，這是我們產品的一個優點，因為它們具有廣泛的應用。

There was another part to your question, Christian, but I forgot what it was.

克里斯蒂安，你的問題還有另一部分，但我忘了那是什麼。

Can you repeat it?

你能重複一下嗎？

Just on the if the product innovation wins enable upside to the range that your margins seem like they've been in over the past two years.

只要產品創新的勝利能讓您的利潤率在過去兩年內達到一定的範圍即可。

Thank you for sure, yes, I think that on the innovations apply to them to sort of higher end of challenging applications and those applications we price for value anyway. So as long as we've now been focused on that element of commercial excellence. I don't know that they're going to drive necessarily improved margins that process, but they are an enabler to winning new business and having the opportunity to make the higher margins on those type of products anyway. And then they also apply to us in our Fit for more fit for purpose type applications and those help to improve our competitiveness. I'm not sure that there's necessarily a specific specific group that it's going to necessarily drive more margin improvement specifically because they're using over such a broad application of across our end markets.

當然感謝您，是的，我認為這些創新適用於具有挑戰性的高端應用程序，以及我們無論如何定價的應用程式。因此，只要我們現在專注於商業卓越的要素。我不知道他們是否會推動這個過程必然提高利潤，但他們是贏得新業務的推動者，無論如何都有機會在這些類型的產品上獲得更高的利潤。然後他們也在我們的 Fit 中向我們申請更適合目的類型的應用程序，這些應用程序有助於提高我們的競爭力。我不確定是否一定有一個特定的特定群體，它一定會推動更多的利潤率提高，特別是因為他們在我們的終端市場中使用如此廣泛的應用。

Thanks, again.

再次感謝。

(Operator Instructions) Michael Feniger, Bank of America.

（操作員指示）Michael Feniger，美國銀行。

Hey, gentlemen, thanks for taking my question. I'm just curious, I appreciate obviously, the guide for the fourth quarter seasonally, when you're heading to your next fiscal year, I think sales are typically down a certain range quarter over quarter. On just based on the current environment today, should we expect that normal seasonality heading into next year pushing better the normal seasonality? Or are there still kind of headwinds that would make us feel like that normal seasonality might have a little bit more pressure than we look at in prior years?

嘿，先生們，感謝您提出我的問題。我只是很好奇，我顯然很欣賞第四季度的季節性指南，當你進入下一個財政年度時，我認為銷售額通常會逐季度下降一定範圍。僅根據當前的環境，我們是否應該預期明年的正常季節性會推動正常季節性的改善？或者是否仍然存在某種逆風，讓我們覺得正常的季節性可能比我們前幾年看到的壓力更大一些？

Yes. Obviously, I'll I'll start off by saying, Mike, that we're in the planning process right now for FY25.

是的。顯然，麥克，我首先要說的是，我們現在正在製定 2025 財年的規劃過程。

Right. But just a couple of things to think about.

正確的。但有幾件事需要考慮。

I'll say no, to answer your question from a sales perspective, going into Q1 as well as just some cost structure items to think about relative to '25 as well. First off, we would see and our expectations on normal seasonality going from Q4 to Q1 would be down about 8% to 10%. And so that would be our normal expectations beyond that.

我會說不，從銷售角度回答你的問題，進入第一季以及一些相對於 25 年的成本結構項目。首先，我們對第四季到第一季正常季節性的預期將下降約 8% 至 10%。因此，這將是我們超出此範圍的正常期望。

As we just think about the framework, I'll say for FY25. It is a couple of things I just touch on. Number one is, and we talked about this a little bit earlier on the call would be raw material costs where tungsten sits today. It is slightly upfront from the lows, again, as we continue to have stability in that tungsten price. And that would be a favorable thing as we think about the price raw phenomena going into the first half of FY25?

當我們只考慮框架時，我會說 25 財年。這是我剛剛談到的幾件事。第一個是，我們早些時候在電話會議上討論過這一點，即鎢目前所處的原材料成本。由於鎢價持續保持穩定，價格再次略高於低點。當我們考慮 25 財年上半年的價格原始現象時，這將是一件有利的事情嗎？

Yes. So the second thing in terms of just the the overall cost structure of things, we've been working on is obviously we've got our existing restructuring program that's out there that we intend to hit a run rate here of $35 million on an annual basis at the end of the year, you'll see some some, I'll call it, rollover benefit as we move from '24 to '25 as we achieve that full rate throughout FY25 but again, we're right in the in the planning process. Now management team is digging into all the money, all the market and cost phenomena, and we'll report back to you with a holistic outlook on FY25 and about 90 days.

是的。因此，就整體成本結構而言，我們一直在努力的第二件事顯然是，我們已經制定了現有的重組計劃，我們打算將每年的運行率達到 3500 萬美元。當我們從「24」轉向「25」時，您會看到一些，我稱之為滾動收益，因為我們在整個25 財年實現了全額利率，但我們再次處於領先地位規劃過程。現在，管理團隊正在深入研究所有資金、所有市場和成本現象，我們將向您報告 25 財年和約 90 天的整體前景。

Great. And just on metal cutting the flow during the quarter, the [230] bps of margin margin degradation. I believe there was a one-time gain on the prior year. Just wanted to flesh it out. Was the decremental margin on your your I think it was flat organic growth. There was that in line with kind of what you guys were thinking? Just trying to understand what you guys saw in that quarter. How would you kind of think about it in terms of your sensitivity to volumes?

偉大的。僅就本季的金屬切削流量而言，利潤率下降了 [230] 個基點。我相信上一年有一次性收益。只是想充實它。我認為這是有機成長持平。這符合你們的想法嗎？只是想了解你們在那個季度看到了什麼。就您對交易量的敏感度而言，您會如何看待它？

Yes, I think the first thing, certainly there was about $1 million gain in the prior year in the metal cutting business that was related to a property sale that did not repeat, right? So you got to factor that in.

是的，我認為第一件事，上一年金屬切削業務肯定有大約 100 萬美元的收益，這與一次沒有重複的房地產銷售有關，對嗎？所以你必須考慮到這一點。

I think the other thing, as we think about margins and decrementals in terms of the quarter, right.

我認為另一件事是，當我們考慮本季的利潤率和減額時，是正確的。

Two things. Number one is, you know, yes, your comments in terms of the total sales changes factor, but don't forget in there there's there's positive price embedded in the quarter as well.

兩件事情。第一是，您知道，是的，您對總銷售額變化因素的評論，但不要忘記該季度也包含積極的價格。

And as you think about the price realization in the quarter, that would imply volumes obviously being negative?

當您考慮本季的價格實現時，這是否意味著銷售量明顯為負？

Well, I'd say that the other piece of that volume being negative in terms of what's happening in Q3, in particular, from a decremental perspective is going into Q3. We saw a slowdown in markets in December timeframe, and that's just simply cause us to react to what that demand is in the quarter and, you know, reset production and adjust the cost structure of those things that simply don't happen instantaneously. They happen over time as we put the actions in place to constrain the cost relative to where volume demand is from an end-market perspective and production as well.

好吧，我想說的是，就第三季發生的情況而言，該卷的另一部分是負面的，特別是從遞減的角度來看，即將進入第三季。我們在 12 月的時間範圍內看到市場放緩，這只是讓我們對本季的需求做出反應，並且重置生產並調整那些根本不會立即發生的事情的成本結構。隨著時間的推移，當我們採取行動限制相對於終端市場和生產的需求量的成本時，它們就會發生。

Great. And I'll just if I could have one more skews more in there, just the stable the commentary in general engineering, the stable at softer levels. I'm just curious, do you are you guys is your inventory levels with your customers, your customer inventory levels, are they reflective of that stable or softer levels? Do they have a little bit more progress to go on? Any any color on that would be helpful.

偉大的。如果我能在那裡再多一點傾斜的話，我會的，只是一般工程中的評論的穩定，在較軟水平上的穩定。我只是好奇，你們與客戶的庫存水平，你們的客戶庫存水平，是否反映了穩定或疲軟的水平？他們還有更多進步嗎？任何顏色都會有幫助。

Thanks.

謝謝。

Yes, I would say that the the customers have in terms of destocking, they were already very cautious about how much inventory they are holding anyway. And I think they still maintain that. So I would say that their current stocking levels reflect them that forecast that I provided an outlook on the on the conditions. So no more no significant destocking that we're looking at to be ahead of us. And then I think they're also cautious on the restocking, and they'll probably need to see some up some demand signals before they get into that mode.

是的，我想說的是，客戶在去庫存方面，他們已經對自己持有的庫存量非常謹慎了。我認為他們仍然堅持這一點。所以我想說，他們目前的庫存水準反映了他們對我所提供的展望的預測。因此，我們預計不會再出現大幅去庫存的情況。然後我認為他們對補貨也持謹慎態度，他們可能需要在進入這種模式之前看到一些需求訊號。

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

我們的問答環節到此結束。我想將會議轉回克里斯·羅西先生發表閉幕詞。

Thanks, operator, and thanks, everyone, for joining the call today. As always, I appreciate your interest and support and please don't hesitate to reach out to Mike if you have any questions. Have a great day. Thanks.

謝謝接線員，也謝謝大家今天加入通話。一如既往，我感謝您的興趣和支持，如果您有任何疑問，請隨時與麥克聯繫。祝你有美好的一天。謝謝。

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