Lindsay Corp (LNN) 2024 Q2 法說會逐字稿

Hello, and welcome to the Lindsay Corporation Fiscal Second Quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to hand the call to Randy Wood, President and CEO. Please go ahead.

您好，歡迎參加 Lindsay Corporation 2024 年第二季財報電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。現在我想將電話轉給總裁兼執行長蘭迪伍德 (Randy Wood)。請繼續。

Thank you, and good morning, everyone. Welcome to our fiscal 2024 second quarter earnings call. With me today is Brian Ketcham, our Chief Financial Officer. I'm pleased with the consolidated performance in Russia, the resilience of our business through the first half of this fiscal year, while market conditions in South America have temporarily impacted activity across the ag industry.

謝謝大家，大家早安。歡迎參加我們的 2024 財年第二季財報電話會議。今天和我在一起的是我們的財務長 Brian Ketcham。我對俄羅斯的綜合業績以及本財年上半年我們業務的彈性感到滿意，而南美洲的市場狀況暫時影響了整個農業產業的活動。

The performance of our North American irrigation business continues to be supported by steady demand amid tempered grower sentiment. Additionally, in our infrastructure business, the continued mix shift towards leasing for our leading Road Zipper System is delivering meaningful margin expansion overall, and I'm encouraged by our ability to execute operationally and strategically in order to drive profitability across the organization as well as the actions we've taken to navigate suboptimal market conditions in some regions.

在種植者情緒低迷的情況下，我們北美灌溉業務的表現繼續受到穩定需求的支撐。此外，在我們的基礎設施業務中，我們領先的Road Zipper 系統持續轉向租賃，整體上實現了有意義的利潤成長，我對我們在營運和策略上執行的能力感到鼓舞，以推動整個組織的盈利能力以及我們為因應某些地區次優市場狀況所採取的行動。

In North America, our irrigation business saw comparable whole goods demand versus the second quarter of last year, which was largely in line with expectations and supported by the carryover impact of solid farm profits from last year, while stable demand in North American end markets has supported our year-to-date revenue results, we are approaching the back half of the year with tempered expectations.

在北美，我們的灌溉業務的整體商品需求與去年第二季度相當，這在很大程度上符合預期，並受到去年穩健農場利潤的結轉影響的支撐，而北美終端市場的穩定需求也得到了支撐。

The USDA recently released its initial 2024 net farm income projections, which were significantly below initial market forecasts and expectations. While this has the potential to negatively impact farmer sentiment and the deployment of investment for new equipment in the near term, it's still very early in the season.

美國農業部最近發布了 2024 年農業淨收入初步預測，該預測大大低於最初的市場預測和預期。雖然這有可能在短期內對農民的情緒和新設備的投資部署產生負面影響，但現在仍處於本季的早期階段。

Moving to international irrigation, where we continue to see softening of demand. In particular, the Brazilian market has experienced reduced grower profitability, limited access to financing and constrained investment capacity. While we're facing a challenging external operating environment in Brazil in the near term, we're still very confident in the mid to long-term opportunities in this market.

轉向國際灌溉，我們繼續看到需求疲軟。尤其是巴西市場，種植者獲利能力下降，融資管道有限，投資能力也受到限制。儘管短期內我們在巴西面臨充滿挑戰的外部經營環境，但我們對該市場的中長期機會仍然充滿信心。

Ongoing droughts in Sao Paulo, Mato Grosso do Sul and parent up have increased state-level support for irrigation and with low penetration levels and the ability to support up to three cross per year. These markets will continue to grow.

聖保羅、南馬托格羅索州持續的乾旱增加了州級對灌溉的支持，但滲透率較低，每年最多只能支持三個雜交種。這些市場將持續成長。

Moving to infrastructure, as I mentioned in my opening remarks, our overall profitability continues to benefit from the strong growth of our Road Zipper System leasing business an encouraging indicator as we move forward. Despite revenue that was comparable to the prior year period, we captured meaningful margin improvement that Brian will touch on later. We expect continued growth in our Road Zipper lease revenue in the back half of this year as we move into the heart of the road construction season, coupled with a strong backlog and sales pipeline for the overall infrastructure business.

至於基礎設施，正如我在開場白中提到的，我們的整體盈利能力繼續受益於 Road Zipper 系統租賃業務的強勁增長，這是我們前進過程中令人鼓舞的指標。儘管收入與去年同期相當，但我們還是發現了利潤率的顯著改善，布萊恩稍後會談到這一點。隨著我們進入道路建設季節的中心，加上整個基礎設施業務的積壓和銷售管道強勁，我們預計今年下半年我們的 Road Zipper 租賃收入將持續成長。

Additionally, as we mentioned in prior calls, we expect our infrastructure business to benefit over time as U.S. infrastructure spending ramps up and as part of the infrastructure investments and Jobs Act. We've only recently begun to see that dynamic play out. We believe that we're in the early innings of a multiyear growth trajectory for infrastructure spending domestically Turning to innovation and technology. As we announced yesterday, we've agreed to acquire a 49.9% interest in pencil instruments with an option to acquire the remainder of the Company in the future. Vessel is a leading developer and distributor of in-field monitoring solutions for agricultural markets.

此外，正如我們在先前的電話會議中提到的，隨著美國基礎設施支出的增加以及作為基礎設施投資和就業法案的一部分，我們預計我們的基礎設施業務將隨著時間的推移而受益。我們最近才開始看到這種動態的發揮。我們相信，我們正處於國內基礎設施支出轉向創新和技術的多年成長軌跡的早期階段。正如我們昨天所宣布的，我們已同意收購鉛筆工具 49.9% 的權益，並可選擇在未來收購該公司的剩餘股份。 Vessel 是農業市場現場監控解決方案的領先開發商和經銷商。

The company deploys software and IoT hardware, including weather stations and environmental sensors, supporting agricultural decision-making, including pest and disease control, crop management and irrigation management. We believe this relationship further highlights our commitment to providing world-class water management solutions to growers around the globe. Our combined platforms and integrated technologies will allow users to monitor and adjust irrigation operations based on key atmospheric conditions while also enhancing overall predictive analytics capabilities. This further strengthens our digital water management portfolio, allowing us to reach a broader set of customers and service providers globally.

該公司部署軟體和物聯網硬體，包括氣象站和環境感測器，支援農業決策，包括病蟲害控制、作物管理和灌溉管理。我們相信這種關係進一步凸顯了我們為全球種植者提供世界一流的水管理解決方案的承諾。我們的組合平台和整合技術將使用戶能夠根據關鍵大氣條件監控和調整灌溉作業，同時增強整體預測分析能力。這進一步加強了我們的數位水管理產品組合，使我們能夠在全球範圍內接觸到更廣泛的客戶和服務提供者。

Lastly, I'd like to address our recent announcement to expand and modernize our manufacturing facilities in January we announced our commitment to invest more than $50 million over the next two years to implement state-of-the-art technology that will greatly benefit our global operations. Our strategic plans for the modernization of our facilities include the implementation of industry, 4.0 technologies, data connectivity analytics, artificial intelligence and the addition of automation and robotics.

最後，我想談談我們最近宣布的擴大和現代化我們的製造設施的消息，在一月份我們宣布承諾在未來兩年內投資超過5000 萬美元來實施最先進的技術，這將極大地有利於我們的生產設施。我們的設施現代化戰略計劃包括實施工業、4.0 技術、數據連接分析、人工智慧以及自動化和機器人技術。

Our renovated facility will also house new equipment and the latest advancements in galvanizing, our core process for manufacturing, mechanized irrigation systems and road safety products. Additionally, we'll be expanding our Lindsay Nebraska facility by 40,000 square feet to allow for increased manufacturing capacity and capabilities and metal forming. This investment is the largest in our company's history, and I look forward to updating you as we invest further into operational excellence and innovation. I'd like to turn the call over to Brian to discuss our second quarter financial results. Brian?

我們翻新後的工廠也將配備新設備和鍍鋅的最新進展，鍍鋅是我們的核心製造流程、機械化灌溉系統和道路安全產品。此外，我們還將把 Lindsay Nebraska 工廠擴建 40,000 平方英尺，以提高製造能力和金屬成型能力。這項投資是我們公司史上最大的一筆投資，隨著我們進一步投資於卓越營運和創新，我期待著向您通報最新情況。我想將電話轉給布萊恩，討論我們第二季的財務表現。布萊恩？

Thank you, Randy, and good morning, everyone. consolidated revenues for the second quarter of fiscal 2024 were $151.5 million, a decrease of 9% compared to $166.2 million in the prior year. The decrease resulted from lower Irrigation Segment revenues as infrastructure revenues were comparable to the prior year second quarter. Net earnings for the quarter were $18.1 million or $1.64 per diluted share compared to net earnings of $18.1 million or $1.63 per diluted share in the prior year. The impact of lower revenues and lower operating income was favorably offset by an increase in other income and a lower effective tax rate compared to the prior year second quarter.

謝謝你，蘭迪，大家早安。 2024 財年第二季合併營收為 1.515 億美元，較去年同期的 1.662 億美元下降 9%。下降的原因是灌溉部門收入下降，因為基礎設施收入與去年第二季相當。本季淨利為 1,810 萬美元，即稀釋後每股收益 1.64 美元，而上一年淨利為 1,810 萬美元，即稀釋後每股收益 1.63 美元。與去年第二季相比，其他收入的增加和有效稅率的降低有利地抵消了收入下降和營業收入下降的影響。

Other income benefited from increased interest income and favorable foreign currency translation results compared to the prior year second quarter and income tax expense for the quarter was reduced by the realization of a onetime tax benefit of $1.1 million in Brazil.

與去年第二季相比，其他收入受益於利息收入的增加和有利的外幣換算結果，並且由於巴西實現了 110 萬美元的一次性稅收優惠，該季度的所得稅費用有所減少。

Turning to our segment results, irrigation segment revenues for the quarter were $133 million, a decrease of 10% compared to $147.8 million in the prior year. North America irrigation revenues of $82.8 million decreased 8% compared to $90.4 million in the prior year second quarter.

至於我們的部門業績，本季度灌溉部門收入為 1.33 億美元，比前一年的 1.478 億美元下降了 10%。北美灌溉收入為 8,280 萬美元，較去年第二季的 9,040 萬美元下降 8%。

Most of the decrease resulted from lower sales of replacement parts, along with slightly lower average selling prices and the impact of a less favorable mix of shorter machines compared to the prior year second quarter. Sales of replacement parts in the prior year included a substantial number of modem and RTU upgrades connected to the sunsetting of 3G coverage that did not repeat this year.

下降的主要原因是替換零件銷量下降，平均售價略有下降，以及與去年第二季相比較短的機器組合較不利的影響。去年更換零件的銷售包括大量調變解調器和 RTU 升級，這些升級與 3G 覆蓋範圍的結束有關，但今年沒有重複。

While overall selling prices in North America remained relatively stable during the quarter, we did see selective competitive discounting in some regions that we responded to. The impact of these revenue decreases was partially offset by moderately higher unit sales volume compared to the prior year second quarter in international irrigation markets. Revenues of $50.2 million decreased 13% compared revenues of $57.4 million in the prior year second quarter.

雖然本季北美的整體銷售價格保持相對穩定，但我們確實在我們回應的一些地區看到了選擇性的競爭性折扣。與去年第二季相比，國際灌溉市場的單位銷售量略有上升，部分抵消了這些收入下降的影響。營收為 5,020 萬美元，與去年第二季的 5,740 萬美元相比下降了 13%。

This decrease resulted primarily from lower revenues in Brazil and other Latin American markets compared to the prior year. While the impact of increases and decreases in other markets mainly offset one another in Brazil, a 20% drop in cash. Soybean prices from December to February, coupled with lowered yield expectations, is negatively impacting the outlook for grower profitability and available liquidity as growers are indicating an unwillingness to sell their crops at current price levels.

這一下降主要是由於巴西和其他拉丁美洲市場的收入較上年下降。而其他市場增減的影響主要在巴西相互抵消，現金下降了20%。 12 月至 2 月的大豆價格，加上產量預期下降，對種植者盈利能力和可用流動性的前景產生負面影響，因為種植者表示不願意以當前價格水平出售作物。

The situation is also resulting in a more constrained credit environment, which is also limiting investment in irrigation equipment in the near term, irrigation segment. Operating income for the quarter was $25.6 million, a decrease of 22% compared to the prior year, and operating margin was 19.3% of sales compared to 22.2% of sales in the prior year.

這種情況也導致信貸環境更加受限，這也限制了近期灌溉設備（灌溉領域）的投資。該季度營業收入為 2,560 萬美元，較上年同期下降 22%，營業利潤率為銷售額的 19.3%，而去年同期為 22.2%。

Lower operating income and upper operating margin resulted primarily from lower revenues and the resulting impact from deleverage of fixed operating expenses. Infrastructure revenues for the quarter were $18.5 million and were comparable overall to the prior year, an increase in Road Zipper System lease revenues was offset by lower Road Zipper system project sales and lower sales of road safety products compared to the prior year second quarter Infrastructure segment operating income for the quarter was $3.5 million, an increase of 74% compared to $2 million in the prior year.

營業收入下降和營業利益率上升主要是因為收入下降以及固定營業費用去槓桿化所產生的影響。本季基礎設施收入為 1,850 萬美元，整體與去年同期相當，與去年同期相比，Road Zipper 系統租賃收入的增長被 Road Zipper 系統項目銷售額的下降和道路安全產品銷售額的下降所抵消。季度營業收入為350 萬美元，比上年同期的200 萬美元成長74%。

Infrastructure operating margin for the quarter was 19% of sales compared to 10.9% of sales in the prior year. The increase in operating income and operating margin resulted from a more favorable margin mix of revenues with higher Road Zipper System lease revenues compared to the prior year second quarter.

本季基礎設施營運利潤率的 19%，而前一年為銷售額的 10.9%。營業收入和營業利潤率的增加是由於與去年第二季相比，更有利的收入利潤組合以及更高的 Road Zipper System 租賃收入。

Turning to the balance sheet and liquidity, our total available liquidity at the end of the second quarter was $200.6 million, which includes $150.6 million in cash, cash equivalents and marketable securities and $50 million available under our revolving credit facility. Year to date, cash generated from operating activities has increased compared to the prior year.

談到資產負債表和流動性，第二季末我們的可用流動性總額為2.006 億美元，其中包括1.506 億美元的現金、現金等價物和有價證券，以及我們的循環信貸額度下的5000 萬美元。年初至今，經營活動產生的現金較前一年增加。

However, our fee free cash flow is being impacted by the increase in capital spending relating to the investments being made in our Lindsay, Nebraska operation. Our balance sheet remains strong and with ample access to liquid capital resources, we continue to be well positioned to execute our capital allocation strategy to create enhanced and sustained value for our shareholders.

然而，我們的免費現金流受到內布拉斯加州林賽業務投資相關的資本支出增加的影響。我們的資產負債表仍然強勁，並且擁有充足的流動資本資源，我們將繼續處於有利地位來執行我們的資本配置策略，為股東創造更高和持續的價值。

This concludes my remarks. And at this time, I'll turn the call over to the operator to take your questions.

我的發言到此結束。此時，我會將電話轉接給接線生回答您的問題。

(Operator Instructions) Ryan Connors, Northcoast Research.

（操作員說明）Ryan Connors，Northcoast Research。

Good morning. Thanks for taking my questions. Some got a few of the first is some you made some comments regarding pricing, had some softness there. And can you elaborate on that at all, Randy, in terms of either quantification or any additional color you can give us on where that is and the magnitude of that and how you expect how that's trended kind of as we move into the third quarter here?

早安.感謝您回答我的問題。有些人首先得到了一些建議，有些人對定價發表了一些評論，那裡有些軟弱。蘭迪，您能否從量化或任何其他方面詳細說明這一點，您可以向我們提供具體情況、嚴重程度以及您對進入第三季度時的趨勢的預期？

Yes, Ryan, this is Brian Ketcham.

是的，瑞安，我是布萊恩凱查姆。

I'll take that one. As I mentioned in my remarks, I think what we've seen during the quarter is I'd say it's more regional and some selective discounting that we've seen and when it affects protecting our market share, we've we've said before that we'll protect our market share and match that on a as-needed basis. But I would say overall, we haven't reduced our overall prices.

我會接受那個。正如我在演講中提到的，我認為我們在本季度看到的是，我們看到的是更多的區域性和選擇性折扣，當它影響到保護我們的市場份額時，我們已經說過在此之前，我們將保護我們的市場份額並根據需要進行配對。但我想說，總的來說，我們沒有降低整體價格。

Our general prices remain steady. I would say looking outside the US and in Brazil with the softness that we've seen in that market, I would say competitive pricing pressures there have probably been while they have been more significant than what we've seen in the US, but I would say in the US. I'm wondering when you look at just the North America margins, I'd say a minimal impact overall on the revenue.

我們的整體價格保持穩定。我想說的是，看看美國以外和巴西市場的疲軟情況，我想說，那裡可能存在競爭性定價壓力，雖然它們比我們在美國看到的更為重要，但我認為會說在美國。我想知道當你只看北美的利潤率時，我會說對整體收入的影響很小。

Got it. Okay I appreciate that, Brian. And then another one on the P&L there. The gross margin really held up pretty well here. I think despite we're stacking two years of double-digit negative revenue declines. Now it seems like the gross margins have held up pretty well. What's the view there is are we sort of at a new normal? I know you've done some some things on the manufacturing side, efficiencies and so forth. Is this sort of a new level that we're going to be at kind of irregardless of what happens in the top line revenue situation going forward?

知道了。好的，我很感激，布萊恩。然後是損益表上的另一項。這裡的毛利率確實保持得很好。我認為儘管我們已經連續兩年出現兩位數的負收入下降。現在看來毛利率維持得很好。我們對新常態有何看法？我知道你們在製造、效率等方面做了一些事情。無論未來的營收情況如何，我們都會達到這樣的新境界嗎？

Yes, I'd say when you look at overall, obviously, there's some benefit that we got from the infrastructure side on North America irrigation gross margins. I would say, were at or even slightly above last year through in the second quarter. I think where we're seeing some of the gross margin pressures in international with the decline that we've seen in volume, particularly in Brazil. That's having as a deleverage impact there. But I think some of the things that we've done over the last couple of years with from a price management standpoint as well as just operational efficiencies that we've gained both in the US and internationally.

是的，我想說，當你從整體上看時，顯然，我們從基礎設施方面獲得了北美灌溉毛利率的一些好處。我想說的是，第二季的業績與去年同期持平，甚至略高於去年。我認為，隨著銷售量的下降，我們在國際市場上看到了一些毛利率壓力，特別是在巴西。這會產生去槓桿化影響。但我認為，從價格管理的角度來看，我們過去幾年所做的一些事情以及我們在美國和國際上獲得的營運效率。

I think to your point, I think we we do feel like we've got a more stable gross margin environment going forward that it's sustainable. Obviously, you're going to have the impact of.

我認為就你的觀點而言，我認為我們確實覺得我們未來有一個更穩定的毛利率環境，這是可持續的。顯然，你將會受到影響。

Yes, the volume leverage and deleverage, and you're not at the present time. I think pricing is holding up raw material costs. If anything, have stabilized the last couple of months. Steel has softened just a bit, but we view raw materials to be stable going forward. So I think that supports where we're at from a margin level.

是的，成交量槓桿和去槓桿化，而你現在還沒有。我認為定價正在支撐原物料成本。如果有的話，那就是過去幾個月已經穩定下來。鋼鐵略為走軟，但我們認為原料未來將保持穩定。所以我認為這從利潤水準上支持了我們的現狀。

Got it. And then one last one, if I could. A smaller item on the P&L. But I was a little surprised to see R&D it declined year over year by almost 15% and dipped below $4 million for the first time in a while, because I know that's an area that you've been focused on on the Precision Technology side. And what are we to read into that? Was that is that just some some efficiencies like some synergies from field wise or why would we be seeing a decline there?

知道了。如果可以的話，還有最後一張。損益表上較小的項目。但令我有點驚訝的是，研發費用年減了近 15%，並且一段時間以來首次跌破 400 萬美元，因為我知道這是精密技術方面一直關注的領域。我們對此有何解讀？這是否只是一些效率的提高，例如來自現場的協同效應，或者為什麼我們會看到那裡的效率下降？

Yes, good morning, Ryan. This is Randy. I'll take that one and there isn't any substantial shifts setting obviously, we're being cautious with spending, but in areas of technology and innovation, in particular, we continue to invest. So what you see there is really just timing and not a strategic shift or drop in big picture spending. We have a lot of testing expenses in the infrastructure business that hit when we conduct those tests. So it's size really, again, just timing.

是的，早安，瑞安。這是蘭迪。我會採取這一點，顯然沒有任何重大變化，我們對支出持謹慎態度，但特別是在技術和創新領域，我們繼續投資。因此，您所看到的實際上只是時間安排，而不是策略轉變或整體支出下降。當我們進行這些測試時，我們在基礎設施業務方面有很多測試費用。所以，再次強調，它的大小確實只是時間問題。

Got it.

知道了。

Thanks for your time.

謝謝你的時間。

Thanks.

謝謝。

(Operator Instructions) Brian Drab, William Blair.

（操作員說明）Brian Drab、William Blair。

Good morning. This is Tyler Hutin for Brian. Thanks for taking my question. It was mentioned that about $20 million worth of orders in your backlog now expected to be fulfilled within the next 12 months. Just wondering what those online orders are mostly related to?

早安.我是布萊恩·泰勒·胡廷 (Tyler Hutin)。感謝您提出我的問題。有人提到，您積壓的訂單中價值約 2000 萬美元的訂單預計將在未來 12 個月內完成。只是想知道這些線上訂單主要與什麼相關？

Yes, I'd say the increase year over year and that some categories roughly $15 million, and that is primarily related to a multiyear lease that we've signed on the first side, the renewal of a lease that we've had in Texas in terms of multiyear thinking been what's driving the lower sales of road safety products in the international market. And that's really, you know, again in Europe being the winter months on things like weather can impact the timing of that. We did see an increase in the U.S. and again supported by additional federal funding in U.S. road construction. We expect to see road safety products grow in the US, but that I would say, more or less in Europe in the quarter, it was more timing and weather related.

是的，我想說的是逐年增長，某些類別大約為 1500 萬美元，這主要與我們在第一方簽署的多年租約有關，即我們在德克薩斯州的租約續約從多年的思考來看，這是導致國際市場上道路安全產品銷售下降的原因。這確實是，你知道，在歐洲，冬季的天氣等因素可能會影響這段時間。我們確實看到美國的成長，並再次得到美國道路建設額外聯邦資金的支持。我們預計道路安全產品將在美國成長，但我想說，本季的歐洲或多或少與時間和天氣有關。

Got it. And just a couple of more honest, than the timing of Road Zipper system projects are part of that do you just have any details on how that pipeline is evolving?

知道了。更誠實的一點是，Road Zipper 系統專案的時間表是其中的一部分，您是否了解該管道如何發展的任何細節？

Yeah, I do think as we've moved into the fiscal year now, we do have a improved line of sight to projects moving forward in that funnel. And we do feel good that we'll see some projects recognized in fiscal 2024, most likely in Q4 at this point. And I think timing will dictate how much of that gets into our fiscal 2024 versus how much spills into 2025. But as Randy mentioned in his comments, we feel good about the growth prospects for this year, but also the next few years based on our project sales funnel.

是的，我確實認為，隨著我們現在進入本財年，我們對在該頻道中推進的專案確實有了更好的視野。我們確實感到高興的是，我們將看到一些項目在 2024 財年得到認可，很可能是在第四季度。我認為時機將決定其中有多少進入我們的2024 財年，以及有多少溢出到2025 年。年的成長前景也感到樂觀。

Thank you. And then lastly, just in a tough environment, kind of following on the previous question. So you had operating margin above 14% in the quarter, probably pretty same percentage of finished the fiscal year, about 14% despite some of the near term headwinds in domestic and international irrigation.

謝謝。最後，在一個艱難的環境中，繼續前一個問題。因此，本季的營業利潤率超過 14%，可能與本財年結束時的百分比相當，約為 14%，儘管近期國內和國際灌溉面臨一些阻力。

Thank you.

謝謝。

I'm not sure I caught the question completely, Tyler.

我不確定我是否完全理解了這個問題，泰勒。

Sorry, I'm just wondering, do you think you'll likely finish above 14% for operating margin in the fiscal year kind of in line with the 5-year average targets?

抱歉，我只是想知道，您認為本財年營業利潤率可能會達到 14% 以上，與 5 年平均目標一致嗎？

Yes. I mean, I think there's a quarter to quarter. There's definitely seasonality in our fourth quarter being our lowest in the in the US. So, I think we feel good about where we're at from a margin standpoint. I think that the impact of some of the volume decreases that we've seen, particularly in Brazil will have an impact on US and based on our ability to react to that from a spending standpoint, I mean our objective is to protect our operating margins. But I think we're we feel like we've done a pretty good job up to this point.

是的。我的意思是，我認為有一個季度到另一個季度。我們第四季的季節性肯定是美國最低的。因此，我認為從利潤率的角度來看，我們對目前的狀況感覺良好。我認為我們所看到的一些銷量下降的影響，特別是在巴西，將對美國產生影響，並且基於我們從支出角度對此做出反應的能力，我的意思是我們的目標是保護我們的營業利潤率。但我認為我們感覺到目前為止我們已經做得很好了。

Okay. Thank you.

好的。謝謝。

And I'll pass it along

我會把它傳遞下去

(Operator Instructions) Jon Braatz, Kansas City Capital.

（操作員說明）Jon Braatz，堪薩斯市首府。

Morning, Randy.

早安，蘭迪。

Good morning, Bryan.

早安，布萊恩。

Morning Jon.

早安，喬恩。

Randy, on a $50 million investment that you're making in your facility? Obviously, you've done a good job over the past couple of years and improving margins and manufacture manufacturing margins. Incrementally. What will that $50 million get you in the years ahead.

蘭迪，您在設施上投資了 5000 萬美元嗎？顯然，您在過去幾年中做得很好，提高了利潤率和製造利潤率。逐漸地。未來幾年，這 5000 萬美元會為你帶來什麼？

I think there's a few interesting areas that we've talked about. Obviously, we detailed some new facilities really connected to capacity and capabilities where we're making some big investments, modernizing galvanizing, our increasing automation, robotics, improving material flow. And in the end, we think this is really going to position us to react faster and maybe more efficiently than we have in the past to market demand, whether that's up or down and some of the new industry, 4.0 technologies that monitor the production equipment and the way I like to think about it.

我認為我們討論了一些有趣的領域。顯然，我們詳細介紹了一些與產能和能力真正相關的新設施，我們正在這些設施中進行一些重大投資，實現鍍鋅現代化，提高自動化程度，機器人技術，改善物料流程。最後，我們認為這確實將使我們能夠比過去更快、更有效地對市場需求做出反應，無論市場需求是上升還是下降，以及一些監控生產設備的新行業、4.0 技術以及我喜歡的思考方式。

We're really taking FieldNET and FieldNET Advisor and the tools that we've developed for our customers. And we're leveraging those similar types of technologies inside of our factory. So we'll have better monitoring of machine performance, stay ahead of maintenance, those types of things. And of course, we're always very mindful have any opportunity to improve safety for the employees.

我們確實採用了 FieldNET 和 FieldNET Advisor 以及我們為客戶開發的工具。我們正在工廠內部利用這些類似的技術。因此，我們將更好地監控機器性能，提前進行維護等。當然，我們始終非常注意有任何機會來提高員工的安全。

So I think that flexibility and automation, the modernization, leveraging some new capabilities in both data and production equipment that we're excited about the investments. And I can tell you we had a wonderful groundbreaking ceremony last week and the people inside that facility there are they're pretty energized and excited about it, too.

因此，我認為靈活性和自動化、現代化、利用數據和生產設備中的一些新功能，我們對這些投資感到興奮。我可以告訴你，我們上週舉行了一場精彩的奠基儀式，設施內的人們也對此充滿活力和興奮。

So Randy, it is, let's say, over the cycle your margin and that facility is tax with this $50 million investment.

蘭迪，比方說，在整個週期中，您的利潤和該設施是對這 5000 萬美元投資徵稅的。

What do you think you can?

你覺得你能做什麼？

How much do you think you could improve that margin over the cycle.

您認為在整個週期中您可以將利潤率提高多少？

And John, this is Brian. I'll jump in on that one. I think what it does in the near term as it gives us that ability to flex up and flex down without really having to add or remove a lot of labor sometime in. So that's a big part of it. I think I would view it as more on the near term being more stabilizing for margins. I mean, obviously you're going to have an increase in depreciation that offset some of the the productivity savings that we have.

約翰，這是布萊恩。我會加入其中。我認為它在短期內會起到什麼作用，因為它使我們能夠向上和向下彎曲，而無需在某個時候真正增加或減少大量勞動力。我想我會認為短期內利潤率會更穩定。我的意思是，很明顯，折舊將會增加，從而抵消了我們所節省的一些生產力。

But I think as you, let's say demand increases significantly, like I did a couple of years ago, our ability to flex up, we should be able to pick up some margin just because of the yes, less reliance on having to go out and find labor with training in Nebraska is difficult with the low unemployment rate.

但我認為，就像你一樣，假設需求顯著增加，就像我幾年前所做的那樣，我們的彈性能力，我們應該能夠獲得一些利潤，只是因為是的，減少了對外出的依賴，由於失業率較低，在內布拉斯加州尋找經過培訓的勞動力很困難。

Okay.

好的。

Okay, Brian, but less than two years ago, you you a relationship with them, Pelzel, am I pronouncing that correctly also?

好吧，布萊恩，但不到兩年前，你和他們有關係，佩爾澤爾，我的發音也正確嗎？

Yes.

是的。

Okay what have you seen in these past two years that resulted in you guys taking a 49.9% investment. What have you seen that that has encouraged you?

好吧，過去兩年你們看到了什麼，導致你們獲得了 49.9% 的投資。您看到了什麼讓您受到鼓舞？

Yes, I'll take that one, John. This is Randy. And that relationship actually has been formalized within the last year. So it's still relatively early. But when you look at kind of the synergies of being able to move their hardware and software services through our channel, they're a global company. We're a global company, but we don't overlap in a lot of those areas.

是的，我要那個，約翰。這是蘭迪。這種關係實際上在去年就已經正式確定。所以現在還比較早。但當你看看能夠透過我們的管道移動他們的硬體和軟體服務的協同效應時，你會發現他們是一家全球性公司。我們是一家全球性公司，但我們在許多領域都沒有重疊。

So we do see some immediate opportunities to help both companies. And I think the exciting part it's really about the data of data and the digital opportunities that the acquisition the investment creates. And we can improve tools like FieldNET Advisor, using input from field sensors, we can expand data analytics and the models that we have to provide better water management and guidance. And they've got over 80,000 installed devices around the world. And that creates some tremendous revenue opportunities for annual recurring revenue, I and the broader integration with the FieldNET platform.

因此，我們確實看到了一些可以幫助兩家公司的直接機會。我認為令人興奮的部分實際上是關於數據的數據以及收購投資創造的數位機會。我們可以改進 FieldNET Advisor 等工具，利用現場感測器的輸入，我們可以擴展資料分析和模型，以提供更好的水管理和指導。他們在全球安裝了超過 80,000 台設備。這為年度經常性收入以及與 FieldNET 平台更廣泛的整合創造了一些巨大的收入機會。

So we feel we've got a great company, great founder and ownership. And now we're really going to hit the ground running.

所以我們覺得我們擁有一家偉大的公司、偉大的創辦人和所有權。現在我們真的要開始行動了。

Brian, I assume it's going to be accounted for as an equity investment?

布萊恩，我認為它將被視為股權投資？

Yes, that's correct.

對，那是正確的。

Okay thank you.

好的謝謝。

(Operator Instructions) Brett Kearney, American Rebirth Opportunity Partners.

（操作員說明）Brett Kearney，美國重生機會夥伴。

Hi, Randy.

嗨，蘭迪。

Brian, Alicia and good morning. Thanks for taking my question.

布萊恩、艾莉西亞，早安。感謝您提出我的問題。

A revenue breadth, I guess I just had a follow-up on the pencil, our instruments on the agreement.

從收入的角度來看，我想我剛剛跟進了鉛筆、我們的協議工具。

Congratulations on seems like a great way to deepen the partnership there.

恭喜您，這似乎是加深合作關係的好方法。

I'm just curious, geographically, those 80,000 installed devices they have, would you say, given where they're based more on geared towards Europe, I had an opportunity, obviously, Lindsay, strong globally, but more you're able to bring them into your existing relationships, North America, Brazil and they have some customers maybe you're not as well penetrated on European regions?

我只是好奇，從地理位置上看，他們擁有的80,000 個已安裝設備，你會說，考慮到他們的基地更多地面向歐洲，我有機會，顯然，林賽，在全球範圍內都很強大，但你能夠更多地將他們帶入您現有的關係中，北美、巴西，他們有一些客戶，也許您在歐洲地區的滲透率還不夠？

Yes, I think their footprint, I would say is weighted in Europe. But when you look at the map there everywhere. And there are involved a little more in the specialty crops, our orchards vineyards, fruits and nuts, those types of things. So we see them maybe in different areas of North America than our current footprint, but their equipment or technology, the ability to integrate with FieldNET Advisor and then the other digital platforms we are we think we can take them everywhere in the world with this brand.

是的，我認為他們的足跡主要集中在歐洲。但當你看地圖時，到處都是。特種作物、我們的果園、葡萄園、水果和堅果等也涉及更多。因此，我們看到他們可能在北美的不同地區，而不是我們目前的足跡，但他們的設備或技術，與FieldNET Advisor 整合的能力，以及我們的其他數位平台，我們認為我們可以透過這個品牌將他們帶到世界各地。

Excellent.

出色的。

Very helpful.

很有幫助。

Thank you, Randy.

謝謝你，蘭迪。

(Operator Instructions) Nathan Jones, Stifel.

（操作員說明）Nathan Jones，Stifel。

Good morning.

早安.

This is Adam Farley on for Nathan.

我是亞當法利 (Adam Farley) 替補內森 (Nathan)。

I wanted to start on Brazil.

我想從巴西開始。

What does your expectation for the Brazilian market over the near term, should we expect Brazil to it get incrementally worse?

您對近期巴西市場的預期是什麼？

In our view, Adam, Brazil's are tricky and the short term and some of the factors that you know, Brian mentioned in his notes, we view that all of those really as being short term headwinds in that market, whether this year was tricky, depending on whether you are in the north or the south that was too wet to dry. And but a lot of what we see, again, it is very short term.

在我們看來，亞當，巴西的情況很棘手，布萊恩在他的筆記中提到，短期和你知道的一些因素，我們認為所有這些確實是該市場的短期阻力，無論今年是否棘手，取決於你是在北方還是在太濕而無法乾燥的南方。但我們所看到的很多都是非常短期的。

So when we look at mid to long-term outlook for that market. It's still, in our view going to be one of the significant growth markets in the world and just their ability to generate three crops. We've met with a lot of state officials here in Omaha over the past several months. We've got other visits planned for the next couple of weeks.

因此，當我們審視該市場的中長期前景時。我們認為，它仍然是世界上重要的成長市場之一，並且有能力生產三種作物。過去幾個月，我們在奧馬哈會見了許多州官員。我們還計劃在接下來的幾週內進行其他訪問。

And when you see the amount of land that they have. Most of these, these large ag production states are less than 2% less than 4% penetrated with irrigation. So we do see more interest from state local governments and certainly continue to have support from federal government there. So we do have we made a lot of investments in Brazil. Some of our strongest team members are there and we're bullish on Brazil in the long term, just navigating kind of the short-term headwinds up right now.

當你看到他們擁有的土地數量。其中大多數大型農業生產州的灌溉滲透率不到 2%，不到 4%。因此，我們確實看到州地方政府有更多的興趣，並且肯定會繼續得到聯邦政府的支持。所以我們確實在巴西進行了大量投資。我們有一些最強大的團隊成員在那裡，從長遠來看，我們看好巴西，只是目前正在克服短期的逆風。

Thank you for that color. You're maybe looking outside of Brazil, could you give us an update on On Demand fundamentals for the markets outside of Brazil and South America and maybe also the international project funnel?

謝謝你的那個顏色。您可能正在關注巴西以外的地區，您能否向我們介紹巴西和南美洲以外市場的點播基本面以及國際專案管道的最新情況？

Sure. And then we comment on Brazil and South America because they really are the big movers. Now when you have big needle movers.

當然。然後我們評論巴西和南美，因為它們確實是大推動者。現在當你有大的針動器。

Now when you look at international revenues and when you look around the rest of the world, there's a lot of puts and takes and nothing that's up significantly. Nothing that's down significantly. But a lot of the other markets kind of offset the minor ups and downs.

現在，當你觀察國際收入以及世界其他地區時，你會發現有很多看跌期權，但沒有什麼顯著增長。沒有什麼明顯下降的。但許多其他市場在一定程度上抵消了小幅波動。

The project demand that in our view is still very strong, both the near and the long term. And when we talk about project activity, we're talking about specific pieces of land specific purchasers, specific designs that are being worked on and depending on which project we talk about. Middle East, obviously is very strong Eastern Europe, Northern and sub-Saharan Africa. Some of those we're actively quoting along with P&R several competitors, depending on where we are in the world.

我們認為，無論是短期還是長期，該專案的需求仍然非常強勁。當我們談論專案活動時，我們談論的是特定的土地特定買家、正在進行的特定設計以及取決於我們談論的專案。中東，顯然是非常強大的東歐、北部和撒哈拉以南非洲。其中一些是我們與 P&R 的幾個競爭對手一起積極引用的，這取決於我們在世界上的位置。

Some of those we're working through confirmed letters of credits and arranging financing and delivery details, same disclaimer as always on those. That timing is really tough to predict, but we do like what we see in the project funnel and both short and long-term project activity.

其中一些我們正在處理已確認的信用證並安排融資和交付細節，與往常一樣的免責聲明。這個時間確實很難預測，但我們確實喜歡我們在專案漏斗以及短期和長期專案活動中看到的情況。

Thank you for taking my questions.

感謝您回答我的問題。

Thanks Adam.

謝謝亞當。

Thank you. This concludes our question and answer session. I would like to turn the call back over to Randy Wood for closing remarks.

謝謝。我們的問答環節到此結束。我想將電話轉回給蘭迪·伍德，讓其致閉幕詞。

We'll thank you all for joining us today. We're very pleased with our results year to date, and I want to thank our global team for all their efforts and accomplishments despite a tempered near-term outlook in a few of our international irrigation markets, we remain optimistic about the Company's long-term prospects. We appreciate your interest in Lenzing and look forward to updating you on our continued progress following the close of our fiscal 2024 third quarter. Thanks for joining us.

我們將感謝大家今天加入我們。我們對今年迄今為止的業績感到非常滿意，我要感謝我們的全球團隊的所有努力和成就，儘管我們的一些國際灌溉市場的近期前景不佳，但我們仍然對公司的長期前景持樂觀態度。前景。我們感謝您對蘭精的興趣，並期待在 2024 財年第三季結束後向您通報我們的持續進展。感謝您加入我們。

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。現在您可以斷開線路。