Lindsay Corporation (LNN) 2026 Q2 法說會逐字稿

(audio in progress) to Mr. Randy Wood, President and CEO. Please go ahead, sir.

（音訊進行中）交給總裁兼執行長 Randy Wood 先生。先生，請開始。

Thank you, and good morning, everyone. Welcome to our fiscal 2026 second-quarter earnings call. With me today is Sam Hinrichsen, our Chief Financial Officer. Before commenting on our quarterly results, I'd like to address recent developments related to the conflict in the Middle East. We are closely monitoring the situation with our top priority remaining the safety of our employees and partners in the region.

謝謝，各位早安。歡迎參加我們 2026 會計年度第二季財報電話會議。今天與我一同出席的是我們的財務長 Sam Hinrichsen。在評論本季業績之前，我想先談談近期與中東衝突相關的最新發展。我們正密切關注情勢，而我們的首要任務仍是確保在該地區員工與合作夥伴的安全。

The MENA market has been a strong source of growth for our International Irrigation business and deliveries tied to our most recent project are meaningful to our revenue. The project remains on schedule, and our supply chains are currently operating without disruption. Any future risk will depend on the duration of the conflict and the potential for broader geographic impact. At this time, we remain well positioned to continue supporting our customers and dealers across the region.

中東及北非（MENA）市場一直是我們國際灌溉業務的重要成長來源，而與我們最新專案相關的交付對營收具有相當意義。該專案仍按進度推進，我們的供應鏈目前運作未受干擾。未來任何風險將取決於衝突持續時間，以及是否可能擴大至更廣泛的地理範圍。目前，我們仍具備良好條件，能持續支援該地區的客戶與經銷商。

Turning to our second-quarter results. I'm very proud of our team's execution. Despite continued external headwinds in the agriculture industry, including trade uncertainty, higher input costs, and weakening sentiment, our team demonstrated strong operational discipline. We remain focused on the levers within our control, particularly pricing, cost management, and operational efficiency while continuing to invest strategically to position the business for long-term growth.

接著談第二季業績。我為團隊的執行力感到非常自豪。儘管農業產業仍面臨外部逆風，包括貿易不確定性、投入成本上升以及信心轉弱，我們的團隊展現了強勁的營運紀律。我們仍專注於可控的槓桿，特別是定價、成本管理與營運效率，同時持續進行策略性投資，以使業務具備長期成長的定位。

In North America, our Irrigation business customers continued to delay large capital purchases given current farm economics, which, as expected, resulted in lower unit sales volumes in the quarter. Demand remained soft, consistent with what we outlined last quarter. In our International business, revenues were flat to slightly down year over year, driven by lower sales volumes in Brazil and the timing of project revenue in the MENA region.

在北美，由於目前農場經濟狀況，我們灌溉業務的客戶持續延後大型資本支出採購，這也如預期導致本季單位銷售量下滑。需求依然疲弱，與我們上季所說一致。在國際業務方面，營收年對年持平至小幅下滑，主要受巴西銷售量下降以及 MENA 地區專案營收認列時點影響。

In Brazil, high interest rates and limited access to credit continue to constrain growers' ability to finance capital equipment purchases. Additionally, local market feedback suggests the 2026 crop plan expected to be released in July will include lower financing rates than the prior year. As a result, many customers are taking a wait-and-see approach.

在巴西，高利率與信貸取得受限持續限制種植戶為資本設備採購融資的能力。此外，當地市場回饋顯示，預計於 7 月公布的 2026 作物計畫將包含較前一年更低的融資利率。因此，許多客戶採取觀望態度。

Our Infrastructure segment performance reflects the expected impact of a difficult comparison to the prior year, which included the delivery of a $20 million Road Zipper project, which we did not expect to repeat. Excluding the Road Zipper project, our Infrastructure business grew 6%, led by higher sales in road safety products.

我們基礎建設事業部的表現反映了與前一年艱難比較所帶來的預期影響；前一年包含交付一個 2,000 萬美元的 Road Zipper 專案，而我們原本就不預期會重複發生。若排除 Road Zipper 專案，我們的基礎建設業務成長 6%，主要由道路安全產品銷售增加所帶動。

Turning to market outlook. As we mentioned last quarter, we expect softer market conditions to persist in the near term in North America. While customer quotations are down slightly versus prior year, we are not seeing the traditional pickup in spring order volume. Current market indicators, including input costs and overall farm profitability suggests the current trough environment will continue until there's greater clarity around trade impacts, profitability, and resolution in the Middle East.

接著談市場展望。如同我們上季提到的，我們預期北美短期內較疲弱的市場狀況仍將持續。雖然客戶報價相較去年略有下降，但我們並未看到傳統上春季訂單量的回升。目前市場指標（包括投入成本與整體農場獲利能力）顯示，當前的谷底環境將持續，直到貿易影響、獲利情況以及中東局勢解決出現更明確的方向。

In our international markets, we remain encouraged by the overall outlook for future growth, particularly in regions focused on improving food security and water resource management. Near-term recovery in Brazil will depend on grower response to the new crop plan and the availability of attractive financing. While we will closely monitor customer sentiment at the Agri Show later this month, we do not expect any meaningful market recovery until the new crop plan is released in July. We remain optimistic in Brazil and continue to see a compelling long-term secular growth opportunity in that market.

在國際市場方面，我們仍對未來整體成長前景感到鼓舞，特別是在致力提升糧食安全與水資源管理的地區。巴西短期復甦將取決於種植戶對新作物計畫的反應，以及是否能取得具吸引力的融資。雖然我們將密切關注本月稍晚 Agri Show 上的客戶情緒，但在 7 月新作物計畫公布之前，我們不預期市場會有任何顯著復甦。我們對巴西仍保持樂觀，並持續看好該市場具備引人注目的長期結構性成長機會。

Within our Infrastructure segment, we continue to see opportunities develop across the portfolio and the Road Zipper sales funnel remains strong. We do see opportunities for continued growth in road safety products, which has provided solid support to our results this year. During the quarter, we introduced two new products at the American Traffic Safety Services Association Trade Show. The AlphaGuard channeling device delivers speed, strength and flexibility, allowing it to be used in both emergency applications as well as everyday use.

在基礎建設事業部方面，我們持續看到整體產品組合中有機會逐步成形，而 Road Zipper 的銷售漏斗仍然強勁。我們也看到道路安全產品仍有持續成長的機會，並在今年為我們的業績提供了穩健支撐。本季我們在 American Traffic Safety Services Association Trade Show 上推出兩項新產品。AlphaGuard 導流裝置兼具速度、強度與彈性，可用於緊急應用以及日常使用。

The Road Runner is a breakthrough truck mouthed attenuator that prioritizes speed of deployment and unmatched durability. The introduction of these new road safety solutions highlights our investment in innovation and the growing demand for efficient and safe roadway solutions. I'd like to now turn the call over to Sam to discuss our fiscal second-quarter financial results. Sam?

Road Runner 是一款突破性的卡車載式緩撞器，優先強調快速部署與無與倫比的耐用性。這些新道路安全解決方案的推出，凸顯我們對創新的投資，以及市場對高效率且安全的道路解決方案日益增加的需求。接下來我想把電話交給 Sam，請他說明我們 2026 會計年度第二季的財務結果。Sam？

Thank you, Randy, and good morning, everyone. Total revenues for the second quarter of fiscal 2026 were $157.7 million, a decrease of 16% compared to $187.1 million in the prior year. Decline in our consolidated top line was driven by lower revenues in both of our segments. The year-over-year decrease in the Infrastructure business reflects the absence of the $20 million Road Zipper project that was delivered in the prior year, which, as Randy mentioned, we did not expect to repeat.

謝謝你，Randy，各位早安。2026 會計年度第二季總營收為 1.577 億美元，較去年同期的 1.871 億美元下降 16%。合併營收年對年下滑，主要由兩個事業部營收皆下降所致。基礎建設業務的年對年下滑反映去年同期交付的 2,000 萬美元 Road Zipper 專案本期未再出現；如 Randy 所提，我們原本就不預期會重複。

Operating income for the second quarter was $13 million compared to $32.1 million in the prior year, and operating margin was 8.3% of sales compared to 17.2% of sales last year. Decrease in operating income was driven by lower revenues, with the most significant driver being the previously mentioned lower Road Zipper project revenues.

第二季營業利益為 1,300 萬美元，去年同期為 3,210 萬美元；營業利益率為銷售額的 8.3%，去年為 17.2%。營業利益下降主要由營收降低所致，其中最重要的因素是前述 Road Zipper 專案營收減少。

Net earnings for the quarter were $12.0 million or $1.15 per diluted share compared to $26.6 million or $2.44 per diluted share in the prior year. The year-over-year decrease on net earnings reflected the impact of lower operating income and a higher effective tax rate.

本季淨利為 1,200 萬美元，或稀釋後每股盈餘 1.15 美元；去年同期為 2,660 萬美元，或稀釋後每股盈餘 2.44 美元。淨利年對年下降反映營業利益降低以及有效稅率上升的影響。

Turning to operating segment results. Irrigation segment revenues for the second quarter, were $141.2 million, a decrease of 5% compared to the $148.1 million in the prior year. Results were largely in line with our expectations against the backdrop of a continued challenging agricultural environment. North America Irrigation revenues were $71 million, down 8% from the previous year, as lower unit sales volume was partially offset by higher average selling prices. Demand in North America continued to be impacted by low commodity prices and overall temperate pharma sentiment.

接著說明各營運事業部結果。灌溉事業部第二季營收為 1.412 億美元，較去年同期的 1.481 億美元下降 5%。在農業環境持續具挑戰的背景下，結果大致符合我們的預期。北美灌溉營收為 7,100 萬美元，較去年下降 8%；較低的單位銷售量部分被較高的平均售價所抵銷。北美需求持續受到低商品價格以及整體溫和的農業情緒影響。

International Irrigation revenues were $70.2 million compared to $71 million in the prior year. The marginal decrease was driven by lower sales volume in Brazil at MENA project timing which was partially offset by growth in other international markets. Irrigation segment operating income for the quarter was $19.5 million compared to $27.4 million in the prior year, and operating margin represented 13.8% of sales compared to 18.5% of sales last year. The compression in operating income was mainly a result of lower sales volume in North America, and favorable regional mix and the impact of fixed cost deleverage.

國際灌溉營收為 7,020 萬美元，去年同期為 7,100 萬美元。小幅下降主要由巴西銷售量降低及 MENA 專案認列時點所致，但部分被其他國際市場的成長所抵銷。灌溉事業部本季營業利益為 1,950 萬美元，去年同期為 2,740 萬美元；營業利益率為銷售額的 13.8%，去年為 18.5%。營業利益率下滑主要是北美銷售量降低、區域組合較不利，以及固定成本去槓桿化的影響。

In our Infrastructure segment, revenues for the second quarter were $16.5 million compared to $38.9 million in the prior year. As expected, the year-over-year decrease was attributable to the absence of the $20 million Road Zipper project that was delivered in the prior year period. Excluding the Road Zipper project, revenues were up 6%, driven by continued growth in road safety products.

在基礎建設事業部方面，第二季營收為 1,650 萬美元，去年同期為 3,890 萬美元。如預期，年對年下降可歸因於去年同期交付的 2,000 萬美元 Road Zipper 專案本期未再出現。若排除 Road Zipper 專案，營收成長 6%，主要由道路安全產品持續成長所帶動。

Infrastructure operating income for the quarter was $1.2 million, down compared to $13.3 million in the prior year, and operating margin was 7.1% of sales compared to 34.1% of sales in the prior year. The decrease in operating income and margin was mainly driven by lower Road Zipper project revenues, which resulted in less favorable mix.

本季基礎建設業務的營運收入為120萬美元，較去年同期的1,330萬美元下降；營運利潤率為銷售額的7.1%，相較去年同期為銷售額的34.1%。營運收入與利潤率的下滑主要是由於Road Zipper專案營收較低，導致產品組合較不利。

Turning to the balance sheet and liquidity. At the end of the second quarter, our total available liquidity was $236.1 million, which includes $186.1 million in cash and cash equivalents and $50 million available under our current revolving credit facility. During the quarter, we continued to execute against our capital allocation priorities. We turned cash to shareholders by completing $25 million of share repurchases and made progress on key strategic investments. We remain confident in the strength of our balance sheet and our ability to continue investing in the business to support future growth and drive productivity while returning capital to shareholders.

接著談資產負債表與流動性。截至第二季末，我們的可用總流動性為2.361億美元，其中包括1.861億美元的現金及約當現金，以及在現行循環信用額度下可動用的5,000萬美元。本季期間，我們持續依照資本配置優先順序執行。我們透過完成2,500萬美元的庫藏股回購將現金回饋股東，並在關鍵策略性投資上取得進展。我們對資產負債表的穩健性，以及在回饋股東資本的同時，持續投資業務以支持未來成長並提升生產力的能力，仍然充滿信心。

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

以上是我的發言。接下來我將把電話會議交給接線員，開始回答各位的提問。

(Operator Instructions) Nathan Jones, Stifel.

(接線員指示) Stifel的Nathan Jones。

I guess I'll just start with margins. The Irrigation margins were a bit low even on the volume that we had there, I think -- the incrementals are over 100%, not a big number on the revenue change. Can you just talk about what the inputs there? Maybe some more color on the soft margin in Irrigation, if you're seeing any increased pricing pressure from competitors? Or just what's going on there, please?

我想我先從利潤率談起。灌溉業務的利潤率即使在目前的出貨量下也偏低，我認為——增量利潤率超過100%，但營收變動的金額不大。你們能談談那裡的投入因素是什麼嗎？也請再多補充一些灌溉業務利潤率偏弱的原因，是否看到競爭對手帶來更大的定價壓力？或者那邊到底發生了什麼，麻煩說明一下？

Sure, Nathan. So if you think about the volume drop, particularly in North America year over year, coming from an even lower base from last year, that will continue to drive fixed cost deleverage. So that's the main driver of that margin compression. Regional mix was slightly unfavorable due to the fact that we shipped more internationally. But I would also just say the margin pressure from the overall competitive environment from input price inflation really globally has impacted margins. But it's really a combination of those factors.

當然可以，Nathan。如果你看出貨量下滑，特別是北美地區年對年下滑，而且是從去年更低的基期再往下，這會持續造成固定成本無法有效分攤（固定成本去槓桿）。這是利潤率被壓縮的主要原因。由於我們國際出貨較多，區域組合略為不利。但我也想說，整體競爭環境下的投入成本通膨，幾乎在全球範圍內都對利潤率造成影響。所以基本上是這些因素的綜合結果。

You mentioned the competitive environment there. Are you saying more intense price competition from competitors as the volume is fairly low here?

你提到那裡的競爭環境。你的意思是，在目前出貨量相當低的情況下，競爭對手之間的價格競爭變得更激烈嗎？

Nathan, this is Randy. I'll take that one. And I think what you generally see in these soft markets, there's more propensity maybe from the smaller privately held family businesses, whether it's in North America, Western Europe, you certainly see a more competitive environment kind of ratchets up the pricing intensity. We would still say a rational pricing environment in general, and our approach is very strategic. So we might want to identify specific customer relationships that we know we have to protect. We're not going to use pricing as a method to drive market share increases. We certainly want to preserve the quality of the business. But for us, it's a strategic approach. But certainly, when volumes are tight, you do see that competitiveness ratchet up.

Nathan，我是Randy。這題我來回答。我認為一般在這種疲弱的市場，你通常會看到一些規模較小、私人持有的家族企業，不論是在北美或西歐，競爭環境會更激烈，定價競爭的強度也會被推升。但整體而言，我們仍會說這是一個理性的定價環境，而我們的做法非常策略性。因此我們可能會鎖定某些我們知道必須維護的特定客戶關係。我們不會把降價當作提升市占率的方法。我們當然希望維持業務品質。對我們而言，這是一種策略性做法。但確實，當出貨量吃緊時，你會看到競爭性被推升。

Okay, thanks for that. And just one on the MENA project. I think you manufactured that in Turkey. You said that it's on schedule at the moment. Do you expect it to stay that way? Or do you -- does it stretch out? Does the war in Iran kind of delay any potential contract awards in that area as people wait and see how things are going to play out there? Just any you can give us on that?

好的，謝謝你的說明。另外想問一題關於MENA專案。我記得你們是在土耳其製造的。你說目前進度如期。你們預期會維持這樣嗎？還是會拉長？伊朗的戰爭是否會讓該地區一些潛在合約授予延後，因為大家在觀望事態發展？就這點你們能提供任何資訊嗎？

Yeah. You have to hit on a couple of things. And we would say, certainly, there could be short-term delays in some of the other business in the region, whether it's project business or just regular retail business. I think everybody in the region is kind of on the edge of their seats waiting to see what happened. And specific to the MENA project, we're delivering now a lot depends on the length of the conflict. And if this is another three to four weeks out to six weeks, and our view would be everything looks to be on track. We've confirmed with our logistics providers. We've confirmed with our supply chain on the inbound side.

是的。你提到了幾個面向。我們會說，該地區其他業務在短期內確實可能出現延遲，不論是專案型業務或一般零售業務。我想該地區的每個人都在屏息以待，想看看會發生什麼事。就MENA專案而言，我們目前正在交付，很多取決於衝突持續的時間。如果只是再延續三到四週、最多到六週，我們的看法是整體仍然如期進行。我們已與物流服務商確認。也已與我們供應鏈的上游（進料端）確認。

For us, it looks safe. And as predicted and as projected, provided this is not a prolonged conflict. If this goes months or several quarters, then we may have a different answer for you. But right now, based on what we see and the communication we've had with all of our suppliers, things look to be on track and proceeding as planned.

就我們而言，看起來是安全的。而且如同預期與規劃，只要這不是一場長期衝突。如果拖到數個月或好幾個季度，那我們可能會給你不同的答案。但就目前而言，根據我們所看到的情況，以及我們與所有供應商的溝通，事情看起來仍在軌道上，並按計畫推進。

Ryan Connors, Northcoast Research.

Northcoast Research的Ryan Connors。

Good morning. Yeah, I wanted to actually go back and revisit the topic on pricing, because if I'm reading in the press release, you actually mentioned higher average selling prices as an offsetting tailwind on to some of the headwinds in Irrigation. So I'm reading that the pricing was actually positive. So I just wanted to kind of see -- should I interpret then the comments a minute ago, to say that you're holding up on your price and maybe walking away from some business where you feel it's not business you feel is priced appropriately?

早安。我想回頭再談一下定價這個主題，因為如果我閱讀新聞稿，你們其實提到較高的平均銷售價格，作為抵消灌溉業務部分逆風的正面因素。所以我理解定價其實是正向的。我想確認一下——那我是否可以把你們剛才的評論解讀為：你們在價格上仍然撐得住，並且可能會放棄一些你們認為定價不夠合理的業務？

I would say, yes, we certainly have a walkaway [plan] on anything, Ryan, whether it's a project sale or just a retail sale. But I think there's always two parts to the equation. I think pricing year over year was favorable, but you have to factor cost into it as well. And cost, in our view, exceeded the pricing opportunities we were able to get in the market, and that's resulting in the margin compression that you're seeing a portion of it.

我會說，是的，Ryan，我們確實對任何業務都有「可放棄」的[計畫]，不論是專案銷售或一般零售銷售。但我認為這個等式永遠有兩個部分。我認為年對年來看，定價是有利的，但你也必須把成本因素納入考量。而在我們看來，成本上升超過了我們在市場上能取得的定價空間，這也導致你所看到的利潤率壓縮，其中一部分原因就在這裡。

Got it. Okay. Got it. And then one more on Irrigation and then a quick one on Infrastructure. Been a lot of talk about significant shifting of acreage from corn to soybeans in North America given the economics. Does that impact you at all? Or are you sort of indifferent between those two?

了解。好的。了解。接著還有一題關於灌溉，然後再快速問一題關於基礎建設。近期很多人談到，基於經濟性考量，北美耕地面積正顯著從玉米轉向大豆。這對你們有任何影響嗎？還是你們對這兩者其實沒有太大差別？

I think we're largely indifferent in terms of what it means for direct machine sales, whether a customer grows one or the other in our regions. It's -- and there's a need for irrigation. It really doesn't matter. We'll apply both in the same way. But that the bigger macro market impact could start to shift acres, could start to impact price, could start to impact farmer profitability. So right now, you see a small decrease in corn, a slight increase in soybeans.

我認為就直接設備銷售而言，客戶在我們的區域種哪一種作物，我們大致上是中性的。因為——灌溉的需求仍然存在。其實並不重要。我們對兩者的應用方式都一樣。但更大的總體市場影響可能會開始改變種植面積，可能會開始影響價格，可能會開始影響農民的獲利能力。所以目前你看到玉米小幅下降，大豆略為增加。

If you look historically, I mean, the June report is going to give us better data. Generally, we see corn acres increase between now and June and then soybean acres decreased. So I think a lot of the customers that we've talked to are kind of locked in on their inputs and their planting intentions. I don't know that there'll be a lot of significant shifts between now and when they get into the fields. But either way, from a direct sales perspective, no impact, but we will watch how it impacts the macro and the pricing on those commodities. So that could start to move the needle one way or the other.

如果從歷史來看，我的意思是，6月的報告會給我們更好的數據。一般而言，我們看到玉米種植面積在現在到6月之間會增加，而大豆種植面積會減少。所以我認為我們接觸過的許多客戶，在投入品與種植意向上都已大致定案。我不確定在現在到他們真正下田之前，會有很多重大的變動。但不管怎樣，從直接銷售的角度來看沒有影響，不過我們會觀察它如何影響總體環境以及這些商品的定價。因此，這可能會讓情勢往某個方向或另一個方向開始出現變化。

Got it. Very helpful. And then lastly, on Infrastructure. It did seem that to us, the deleveraging on the margins did kind of catch us by surprise in Infrastructure. Is there anything special that's dragging that down in the quarter? Or is that -- is this sort of the margin run rate that we should think about when we don't have the Road Zipper project of scale flowing through?

了解。非常有幫助。最後，關於基礎建設。我們覺得基礎建設業務的利潤率去槓桿化似乎有點出乎我們意料。這一季是否有什麼特殊因素在拖累？或者說——當沒有像 Road Zipper 這種規模的專案貢獻時，這就是我們應該預期的利潤率運行水準嗎？

So if you think about the Road Zipper data, of course, just the sheer magnitude is the biggest single driver for the margin compression. And frankly, cost absorption, deleverage is a big chunk of this if you're taking that significant product out of the results compared to last year. If you think about the Road Safety Products business, that's doing really well. That business is the smaller piece, of course, of our overall Infrastructure business. So even that growth is a partial offset, but it can't offer the full impact from the Road Zipper project.

如果你看 Road Zipper 的數據，當然，單就量體規模而言，它是造成利潤率壓縮的最大單一驅動因素。坦白說，成本吸收不足、去槓桿化占了很大一部分，因為相較去年，你把那麼大量的產品從業績中拿掉了。如果你看道路安全產品（Road Safety Products）業務，那表現非常好。當然，那在我們整體基礎建設業務中是較小的一塊。所以即便那部分成長能部分抵消，但無法完全彌補 Road Zipper 專案帶來的影響。

So if you think about the other components in Infrastructure, there are what I would call non-Road Zipper project components, they will continue to impact results. So there are more components than just road safety products and Road Zipper. So as you think of margin profile, of course, in the essence of a big project, it's going to be closer to what we've seen right now.

如果你看基礎建設的其他組成，我會稱之為非 Road Zipper 專案的組成部分，它們仍會持續影響業績。所以不只有道路安全產品和 Road Zipper，還有更多組成。因此在思考利潤率輪廓時，當缺少大型專案時，利潤率就會更接近我們目前看到的水準。

Got it. Okay. And I sneak one more in. If -- on the -- any update quickly on the Nebraska capital investments, where we're at there and what the margin impacts for not only '26, but as we move to FY27?

了解。好的。我再插問一個。關於內布拉斯加州的資本投資，有沒有快速更新一下目前進度，以及對不僅是'26、而且我們邁向FY27時的利潤率影響？

Yeah. I can say from a time line perspective, the weather was very cooperative in support of this winter. So our tube mill is up and running and turned over to full production. Construction of the new galvanizing facility is on track, on plan, and we would expect that to come online near the end of the calendar year, sometime in the first portion of our fiscal 2027 year.

有。就時程而言，今年冬天的天氣非常配合，對專案推進很有利。所以我們的製管機組（tube mill）已經啟動運轉，並已移交至全面量產。新的鍍鋅設施建造按進度、按計畫推進，我們預期會在曆年年底附近上線，也就是在我們2027財年初期的某個時間點。

In terms of the depreciation impact, the efficiency gains, I think we've been pretty consistent that initially, it does appear that a lot of those efficiency gains we're going to have are going to be eaten up by the incremental depreciation that we're going to see on that investment and really for us to get the leverage and growth and profitability out of the investment, we are going to have to see some market recovery to support that. So to me, the similar answers we provided over previous quarters and no significant shifts in project timing.

就折舊影響與效率提升而言，我想我們一直很一致地表示：一開始看起來，我們將取得的許多效率增益，會被這項投資帶來的新增折舊所抵消；而要讓我們從這項投資中取得槓桿、成長與獲利能力，我們必須看到市場復甦來支撐。所以對我而言，這與我們前幾季提供的答案類似，專案時程沒有重大變動。

Brett Kearney, American Rebirth Opportunity.

Brett Kearney，American Rebirth Opportunity。

I think you've done a good job discussing the status of your Middle East, North Africa project in the context of the current environment. Obviously, you guys are on top of risks that can materialize there. But I wanted to talk about potentially on the opportunity side. About four years ago, today when we saw -- the Russia-Ukraine conflict materialize. Subsequent to that was when you guys ultimately were able to experience a number of these international food security projects.

我認為你們在目前環境下，已經很清楚地說明了中東、北非專案的狀態。顯然，你們也掌握了那邊可能出現的風險。但我想談談可能的機會面。大約四年前，也就是今天左右，當我們看到俄烏衝突爆發時——之後你們最終得以承接並經歷了多個國際糧食安全專案。

Now this one has a different texture. It's not in the global grain production region, primarily centered on fertilizers. But as you look 12, 24 months from now, how are you seeing potential additional waves of food security projects in, call it, Africa, Central, South, and Southeast Asia and your ability to potentially capture opportunities that might arise there?

現在這次的情況質地不同。它不在全球穀物生產區域，主要集中在肥料。但當你們展望12到24個月後，你們如何看待在非洲、中亞、南亞與東南亞等地，可能出現的額外一波波糧食安全專案，以及你們捕捉這些潛在機會的能力？

Yeah. I think it's an interesting observation, Brett. And you're right. If you go back to 2022, when the Russia-Ukraine conflict hit, we did see a surge in energy prices. We saw corresponding surge in commodity prices. And I think we hit on one big difference this time around is that Iran is not a big grain producer. They're not a big exporter of grains. And I think that's one thing that probably changes the model going forward just a little bit.

是的。我覺得這個觀察很有意思，Brett。你說得對。如果回到2022年，當俄烏衝突爆發時，我們確實看到能源價格飆升。也看到商品價格相應上漲。而我認為這次的一個重大差異是，伊朗不是主要的穀物生產國。他們也不是主要的穀物出口國。我想這一點可能會讓未來的模式稍微有所不同。

Certainly, the fuel cost, the fertilizer cost going through the Strait of Hormuz, that certainly has some short-term impact. Long term, it really depends how long this thing goes. And if we're still talking about it, and we're still dealing with the conflict 12 to 24 months from now, I think a lot of things can change. But in the near term, I don't know that this changes our long-term view of this market. We are still going to see some of the same countries interested in investing in food security, investing in GDP diversification for their local economies.

當然，燃料成本、肥料成本經由荷姆茲海峽運輸，短期內確實會有一些影響。長期來看，真的取決於這件事會持續多久。如果在12到24個月後我們還在談這件事、仍在處理衝突，我認為很多事情都可能改變。但就近期而言，我不認為這會改變我們對這個市場的長期看法。我們仍會看到一些相同的國家有興趣投資糧食安全、投資GDP多元化，以支持其本地經濟。

So again, it comes back to duration. And right now, our plan would be faster resolution over the next several weeks, not something that's going to last several quarters for us. And we're still active in the region, still able to run the facility, keep our people safe, and I guess that bodes well for us competitively in the region as well.

所以再說一次，關鍵在於持續時間。而目前我們的規劃是假設在接下來幾週內會更快解決，而不是會持續好幾季的情況。我們仍在該地區積極運作，仍能營運設施、確保人員安全，而我想這也有利於我們在該地區的競爭地位。

Trevor Sahr, William Blair.

Trevor Sahr，William Blair。

I just wanted to ask quickly on Brazil, maybe just some more thoughts there, how the outlook might have changed throughout the quarter. And Randy, you mentioned that the upcoming crop plan in July, I believe you said it is expected to have lower interest rates for ag equipment. Is that something that's just expected? Or is that a hard guarantee? Like how can we think about Brazil in the second half of your fiscal year here?

我想快速問一下巴西，或許請再多分享一些想法：本季期間展望是否有任何變化。另外，Randy，你提到7月即將公布的作物計畫（crop plan），我記得你說預期農業設備的利率會更低。這只是市場預期嗎？還是有硬性保證？我們該如何看待你們本財年下半年的巴西市場？

Sure. And I'll maybe start by saying long-term Brazil is still a very attractive market. Low penetration in terms of irrigation, three caps a year really accelerates the payback. So we're still very, very bullish on Brazil. And what we're dealing with in the near term is credit, and that's been the narrative for the past several quarters.

當然。我先說長期來看，巴西仍然是一個非常有吸引力的市場。灌溉滲透率低，一年三作確實能大幅加快投資回收。所以我們對巴西仍然非常、非常看多。而我們短期面臨的是信貸問題，這也是過去幾季一直以來的主軸。

The feedback that we've got locally, I would say in Brazil, nothing is guaranteed. This is an election year, which can sometimes change and shift timing on some of the things that are shared verbally in the markets. But that crop plan last year was about 12.5%. And this year, the projections are it's going to be well under that. And how far under that, no guarantees until the plan is released.

我們在當地收到的回饋是，我會說在巴西沒有任何事情是有保證的。今年是選舉年，有時候會改變或影響市場上口頭分享的一些事項的時點。不過去年的作物計畫大約是12.5%。而今年的預測是會明顯低於那個水準。至於會低多少，在計畫正式公布前都沒有保證。

We are seeing some market movement in interest rates there. I think the [select rate] nationally was just lowered by 0.25 point just within the last couple of weeks. So there is indications locally that financing rates are going to come down. And when customers see that, they kind of wait and customers might think I could use a pivot today. But you know what, I can put a pivot on my next crop. If I can get a better interest rate, my payback is going to be much better.

我們看到那邊利率出現一些市場波動。我認為全國的[選擇利率]就在過去幾週內剛下調了0.25個百分點。因此，當地已有跡象顯示融資利率將會下行。而當客戶看到這點時，他們往往會先觀望，客戶可能會想：我今天可以用一套樞軸灌溉系統。但你知道嗎，我也可以把樞軸灌溉系統放到下一季作物再裝。如果我能拿到更好的利率，我的回收效益就會好很多。

So the environment we're in, there's no certainty, but the prevailing attitude locally is rates are going to get better, and that's got customers sitting on the sidelines. We did mention in our prepared comments, the Agri Show is the end of this month, and that generally is the largest show. It's a selling show where dealers and customers are working on designs, putting quotations together. So we're very anxious to see what customer sentiment is like at that show. I suspect we could come out of that with some very good feedback on customers ready to reenter the market. But until that crop plan is released and that money and funding is available in July, we could be in the same position through our third quarter that we've been in our second quarter.

所以在我們所處的環境中，沒有確定性，但當地普遍的態度是利率會變得更好，這讓客戶選擇在場邊觀望。我們在事先準備的發言中也提到，Agri Show 在本月底舉行，而那通常是規模最大的展會。那是一個銷售型展會，經銷商與客戶會一起討論設計、整理報價。因此，我們非常期待看看在那個展會上客戶情緒如何。我猜我們可能會從那裡帶回一些非常好的回饋，顯示客戶已準備好重新進入市場。但在作物計畫公布、以及7月資金與融資到位之前，我們第三季可能仍會處於與第二季相同的狀況。

That's great. Very helpful there. Finally, I just wanted to add quickly on gross margin. I wanted to see if there was anything you wanted to call out besides weaker top-line performance that resulted in the margin hit this quarter. And then additionally, any more clarity you can provide on margin for the latest international irrigation project would be helpful as well.

太好了。這些資訊非常有幫助。最後，我想快速補充一下毛利率。我想確認一下，除了營收表現較弱導致本季毛利率受壓之外，是否還有其他你們想特別點出的因素。另外，若能就最新的國際灌溉專案的毛利率提供更多釐清，也會很有幫助。

As far as overall gross margins are concerned, again, the fixed cost deleverage at these current demand levels, that is a key driver. You think about the international mix, we don't expect that mix to fundamentally change in the second half compared to where we were in Q2. And of course, there's risk from an input price perspective and the timing of pricing actions. You think about the Iran situation, that is a fluid situation, if it drags on, if it has continued impact from an input price perspective, there could be challenges there. But I think those are the key drivers there. And -- sorry, what was your second question, the outlook for the second half?

就整體毛利率而言，再次強調，在目前需求水準下固定成本的去槓桿（固定成本攤提不足）是關鍵驅動因素。談到國際業務組合，我們預期下半年相較於第二季不會出現根本性的變化。當然，從投入成本角度以及定價措施時點來看仍存在風險。再看伊朗局勢，那是個變動中的情況；如果拖延、並且持續從投入成本角度產生影響，可能會帶來一些挑戰。但我認為這些就是主要驅動因素。還有——抱歉，你的第二個問題是什麼？是下半年的展望嗎？

Yeah. Any comment on the second half? And then maybe if there's any update or more clarity on the margin of the MENA international project?

對。對下半年有任何評論嗎？另外，MENA 國際專案的毛利率是否有任何更新或更清楚的說明？

Yeah. Again, for the second half based on what Randy discussed, the overall outlook for for specifically North America and Brazil is not a big change versus Q2. So we'd expect, especially the cost deleverage to continue. From a MENA project perspective, again, we're executing the project according to plan. Those margins are comparable to the previous-year project. Of course, there are timing differences as we ramp up the project. But there's really no change there compared to what we have discussed before.

好的。再說下半年，依照 Randy 的說法，特別是北美與巴西的整體展望，相較於第二季沒有太大變化。因此我們預期，尤其是成本去槓桿的情況會持續。就 MENA 專案而言，我們仍按計畫執行該專案。那些毛利率與前一年度的專案相當。當然，隨著我們逐步拉升專案進度，時點上會有差異。但相較於我們先前討論的內容，基本上沒有變化。

Jon Braatz, Kansas City Capital.

Jon Braatz，Kansas City Capital。

Randy, just want to return to the capital investments you've been making back in 2024, you initiated product four to five spending $50 million on, I guess, in the Nebraska facility. And I guess I would have maybe expected a little bit of better margins in this downturn. And I guess my question is, how far along are you in beginning to accrue those a return on that investment? And are we near the -- are we going to begin to see those -- that return on investment shortly?

Randy，我想回到你們在2024年所做的資本投資；你們啟動了產品4到5，並在內布拉斯加廠投入了我想是5,000萬美元的支出。而我想，在這波景氣下行中，我原本可能會期待毛利率表現能更好一些。所以我的問題是，你們開始累積那項投資報酬的進度到哪裡了？我們是否接近——是否很快就會開始看到那——那個投資報酬？

Yeah. I think as I said earlier, Jon, we have now turned over the tube mills specifically, and that was the first tranche of the big investments. And it was designed to improve safety for our operators, improve efficiency and throughput, but also to reduce our reliance on labor. And as you know, in Lindsay, Nebraska, if we had to bring in another 100 labors to respond to some upside in demand, that would be tough, that would be a stretch. So our plan was automate the equipment so that when we do have to respond to an upswing in the market or downswing in the market, we're not taking our labor headcount up and down as we maybe have in previous history when we had more labor-intensive labor practices.

是的。Jon，我想如我先前所說，我們現在已經完成了特別是製管機（tube mills）的交付與切換，那是大型投資的第一階段。其設計目的是提升操作人員安全、提高效率與產能，同時也降低我們對人力的依賴。而如你所知，在內布拉斯加州 Lindsay，如果我們必須再增加100名人力來因應需求上行，那會很困難、會很吃緊。因此我們的計畫是將設備自動化，讓我們在必須因應市場上行或下行時，不需要像過去在勞力密集的作業方式下那樣，讓人力編制大幅上上下下。

So right now, I think I said earlier in the call, we do need to see some market recovery to get the volume leverage on that investment. That will sustain itself as we launch the new galvanizing facility in early 2027. At current volumes, it's going to be tough to generate and see those incremental margins and those returns just because of the deleverage on a big investment and the depreciation that we'll see now.

所以目前，我想我在電話會議前面也提到，我們確實需要看到市場復甦，才能在那項投資上取得量能槓桿。而當我們在2027年初啟用新的鍍鋅廠時，這種效益將會延續。在目前的出貨量下，要產生並看到那些增量毛利與投資報酬會比較困難，原因在於大型投資帶來的去槓桿效應，以及我們現在會看到的折舊。

When we get into the next up cycle as we grow and reach the peak of the market, I think that's when we're really going to be able to capitalize on it and identify it. But in the near term here, I think most of those savings are going to get diluted by the incremental impact of the depreciation.

當我們進入下一個上行循環、隨著成長並達到市場高峰時，我認為那才是我們真正能夠把握並清楚辨識其效益的時候。但就近期而言，我認為大部分的節省將會被折舊增加所帶來的額外影響所稀釋。

Okay. So basically, what remains is the galvanizing facility for 2027?

了解。所以基本上，剩下的就是2027年的鍍鋅廠？

You got it. Yeah. That one won't be turned over in this fiscal year, so we won't see that incremental depreciation until we get into Q1 of '27.

沒錯。是的。那一項在本財年不會完成交付，因此要到27年第一季我們才會看到那部分新增折舊。

And this will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Randy Wood for any closing remarks. Please go ahead.

接下來將結束問答環節。我想把電話會議交回給 Randy Wood 先生，請他做結語。請開始。

Thank you. Overall, near-term market conditions remain challenging, but we are confident in our ability to execute and position the business for long-term growth. We will continue delivering the large MENA project throughout the third and fourth quarters, while advancing planned investments in our Lindsey, Nebraska facility, including the new galvanizing operation expected to come online in early 2027.

謝謝。整體而言，短期市場狀況仍具挑戰，但我們對自身的執行能力有信心，並能讓業務為長期成長做好布局。我們將在第三季與第四季持續交付大型 MENA 專案，同時推進在內布拉斯加州 Lindsey 廠的既定投資計畫，包括預計於2027年初上線的新鍍鋅作業。

Our leadership teams remain disciplined and experienced in managing through the cycles, and we will continue to closely manage spending while aligning investments with our strategic growth priorities. In addition, we see continued opportunity in our road safety business, and we'll remain focused on introducing new products into attractive end markets. We remain committed to creating long-term value for shareholders and look forward to updating you on our third-quarter earnings call. Thanks for joining us.

我們的領導團隊在穿越景氣循環方面一向自律且經驗豐富；我們將持續嚴格管理支出，同時使投資與我們的策略性成長優先事項保持一致。此外，我們在道路安全業務上仍看到持續的機會，並將持續專注於把新產品導入具吸引力的終端市場。我們仍致力於為股東創造長期價值，並期待在第三季財報電話會議上向各位更新進展。感謝各位參與。

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

本次電話會議到此結束。感謝各位出席今天的簡報。您現在可以掛線。