MSC Industrial Direct Co Inc (MSM) 2023 Q4 法說會逐字稿

Good day, and welcome to the MSC Industrial Supply Fiscal 2023 Fourth Quarter and Full Year Conference Call.

美好的一天，歡迎參加 MSC 工業供應 2023 財年第四季和全年電話會議。

(Operator Instructions)

（操作員說明）

Please note today's event is being recorded. I would now like to turn the conference over to Ryan Mills, Head of Investor Relations. Please go ahead.

請注意今天的活動正在錄製中。我現在想將會議交給投資者關係主管 Ryan Mills。請繼續。

Thank you, and good morning, everyone. Welcome to our fourth quarter Fiscal 2023 and full year earnings call. Erik Gershwind, our Chief Executive Officer; and Kristen Actis-Grande, our Chief Financial Officer, are both on the call with me today. During today's call, we will refer to various financial and management data in the presentation slides that accompany our comments as well as our operational statistics, both of which can be found on our Investor Relations web page.

謝謝大家，大家早安。歡迎參加我們的 2023 財年第四季和全年財報電話會議。艾瑞克‧格甚溫德 (Erik Gershwind)，我們的執行長；我們的財務長 Kristen Actis-Grande 今天都與我通話。在今天的電話會議中，我們將參考簡報投影片中的各種財務和管理數據以及我們的評論以及我們的營運統計數據，這兩者都可以在我們的投資者關係網頁上找到。

Let me reference our safe harbor statement, a summary of which is on Slide 2 of the accompanying presentation. Our comments on this call as well as the supplemental information we are providing on the website, contain forward-looking statements within the meaning of the U.S. securities laws. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these statements. Information about these risks is noted in our earnings press release and our other SEC filings.

讓我參考一下我們的安全港聲明，其摘要位於隨附簡報的幻燈片 2 中。我們對本次電話會議的評論以及我們在網站上提供的補充資訊包含美國證券法含義內的前瞻性陳述。這些前瞻性陳述涉及風險和不確定性，可能導致實際結果與這些陳述預期的結果有重大差異。有關這些風險的資訊已在我們的收益新聞稿和其他 SEC 文件中註明。

In addition, during this call, we may refer to certain adjusted financial results, which are non-GAAP measures. Please refer to the GAAP versus non-GAAP reconciliations in our presentation or on our website, which contain the reconciliations of the adjusted financial measures to the most directly comparable GAAP measures. I now turn the call over to Erik.

此外，在本次電話會議中，我們可能會參考某些調整後的財務業績，這些都是非公認會計原則衡量標準。請參閱我們的簡報或網站上的 GAAP 與非 GAAP 調整表，其中包含調整後的財務指標與最直接可比較的 GAAP 指標的調整表。我現在把電話轉給埃里克。

Thank you, Ryan. Good morning, everyone, and thanks for joining us today. On today's call, I'll reflect on where we are by recapping our fiscal 2023 performance and our 3-year mission-critical achievements. I'll then pivot to where we're going by outlining the next chapter of MSC's mission-critical playbook. Finally, I'll provide color on the current environment and outlook. Kristen will then provide more specifics on our fiscal fourth quarter financial performance and our initial expectations for fiscal 2024. I'll wrap things up, and we'll open up the line for questions.

謝謝你，瑞安。大家早安，感謝您今天加入我們。在今天的電話會議上，我將回顧 2023 財年的表現和 3 年的關鍵任務成就，反思我們的現況。然後，我將透過概述 MSC 關鍵任務手冊的下一章來轉向我們的目標。最後，我將提供當前環境和前景的顏色。然後，克里斯汀將提供有關我們第四財季財務業績以及我們對 2024 財年的初步預期的更多具體資訊。我將總結所有內容，然後我們將開放提問熱線。

Before I dig into our annual performance, I'd like to thank our shareholders for their continued support. Earlier this month, we announced the completion of our share reclassification agreement and elimination of our dual-class share structure. This was voted heavily in favor by our shareholders and makes MSC shares a more attractive investment as it broadens our scope of potential investors, enhances our corporate governance practices by limiting the Jacobson and Gershwind family's voting power, to 15% of shares outstanding, transitions us to a majority standard for any election of directors that is not a contested election and replaces the 2/3 voting rule for certain significant transactions with a simple majority voting standard.

在深入了解我們的年度表現之前，我要感謝股東的持續支持。本月早些時候，我們宣布完成股票重新分類協議並取消雙層股權結構。這得到了我們股東的大力支持，使MSC 股票成為更具吸引力的投資，因為它擴大了我們潛在投資者的範圍，透過將Jacobson 和Gershwind 家族的投票權限制在已發行股票的15% 來增強我們的公司治理實踐，使我們實現轉型對於任何非競爭性選舉的董事選舉，採用多數標準，並用簡單多數投票標準取代某些重大交易的 2/3 投票規則。

Additionally, we'll add another independent board member with the selection process getting underway in short order. Lastly, it remains our intention to offset dilution from the transaction and Kristen will discuss that later on in more detail. I'll now move on to our recent results.

此外，我們將新增另一位獨立董事會成員，選拔過程將很快開始。最後，我們仍然打算抵消交易帶來的稀釋，克里斯汀將在稍後更詳細地討論這一點。現在我將繼續討論我們最近的結果。

As you can see on Slide 4, we continue the trend of meaningfully outpacing the IP index in our fiscal fourth quarter. Average daily sales improved 9.3% year-over-year compared to flat growth for the IP index. Zooming out from the quarter and looking at our fiscal year 2023 on Slide 5, we achieved average daily sales growth of 11.2%, which was over 1,000 basis points above the IP index. As a result, we achieved a nice milestone with annual sales exceeding $4 billion for the first time in company history.

正如您在投影片 4 中看到的，我們在第四財季繼續顯著超過智慧財產權指數的趨勢。與 IP 指數持平成長相比，日均銷售額年增 9.3%。將季度範圍縮小到投影片 5 上的 2023 財年，我們實現了 11.2% 的日均銷售額成長，比 IP 指數高出了 1,000 個基點。結果，我們實現了一個美好的里程碑，年銷售額在公司歷史上首次超過 40 億美元。

Moving to profitability for the fiscal year. Our gross margin of 41% was down 120 basis points year-over-year, largely driven by headwinds related to customer mix and acquisitions, in particular, the outsized effect of the large public sector purchases. However, due to strong operating expense leverage, our operating margin was 12.1% and 12.6% on an adjusted basis, which was only a decline of 60 basis points and 30 basis points, respectively, year-over-year.

本財年轉向獲利。我們的毛利率為 41%，年減 120 個基點，這主要是由於與客戶組合和收購相關的不利因素，特別是大型公共部門採購的巨大影響。然而，由於營運費用槓桿強勁，調整後的營運利潤率為 12.1% 和 12.6%，年比分別僅下降 60 個基點和 30 個基點。

I'll now spend a few minutes on Slide 6 by illustrating our successful execution of the mission-critical priorities. As many of you recall, our mission-critical program was based on 5 growth initiatives. And here, we showcased our performance across each on a 3-year compound annual growth rate or CAGR basis. One, Solidify Metalworking. Metalworking related sales produced a 3-year CAGR of roughly 9%. And beyond the numbers, we strengthened our metalworking position, by adding new technologies and capabilities such as MSC MillMax and tool regrinding services; two, leverage portfolio strengths or what I commonly refer to as selling the portfolio, which focused on increasing share of wallet through adjacent product categories.

現在，我將在投影片 6 上花幾分鐘來說明我們成功執行了關鍵任務優先事項。正如你們許多人所記得的那樣，我們的關鍵任務計劃是基於 5 項成長計劃。在這裡，我們以 3 年複合年增長率或 CAGR 為基礎展示了我們在各個方面的表現。一、鞏固金工。金屬加工相關銷售的 3 年複合年增長率約為 9%。除了數字之外，我們還透過增加 MSC MillMax 和工具重磨服務等新技術和能力，鞏固了我們的金屬加工地位；第二，利用投資組合的優勢，或我通常所說的銷售投資組合，其重點是透過相鄰產品類別增加錢包份額。

This includes Class C consumable product sales, which improved roughly 9% on a 3-year CAGR. Of note, Class C consumable product momentum continued in our fiscal Q4 as we sustained our recent double-digit growth trend; three, expand solutions, which was primarily geared towards vending and implants.

其中包括 C 類消耗品銷售，其 3 年複合年增長率提高了約 9%。值得注意的是，C 類消耗品產品的動能在第四財季持續維持，我們維持了近期兩位數的成長趨勢；第三，擴展解決方案，主要針對自動販賣機和植入。

Our vending installed base has grown 10% over a 3-year CAGR, while implant sales produced a strong 3-year CAGR of roughly 35%. As a reminder, we achieved record quarterly implant signings during our fiscal third quarter and maintained a strong signing rate in the fourth quarter. Looking forward, we expect strong signings to remain a trend across both solutions; four, digital with a particular focus on e-commerce.

我們的自動販賣機安裝量在 3 年複合年增長率中增長了 10%，而植入物銷售的 3 年複合年增長率強勁，約為 35%。提醒一下，我們在第三財季實現了創紀錄的季度植入簽約量，並在第四季度保持了強勁的簽約率。展望未來，我們預計這兩種解決方案的強勁簽約仍將是一種趨勢；四是數位化，特別是電子商務。

E-commerce sales improved roughly 9% on a 3-year CAGR, and we see plenty of room for continued improvement. This is especially the case for our core customers, which I'll touch on in a moment. Five, diversified customers and end markets with a particular focus on the public sector. Public sector sales grew at roughly 7% CAGR and despite a high starting point in fiscal '20 due to COVID-19-driven demand.

電子商務銷售額的 3 年複合年增長率成長了約 9%，我們認為還有很大的持續改善空間。對於我們的核心客戶來說尤其如此，我稍後會談到這一點。第五，多元化的客戶和終端市場，特別關注公共部門。儘管由於 COVID-19 驅動的需求，20 財年起點較高，但公共部門銷售額的複合年增長率約為 7%。

Recent performance in the public sector was particularly strong with fiscal '23 growth of over 45% and over 20% even without the public sector large orders that occurred in the prior 2 quarters. Execution of our growth initiatives enabled us to meet or exceed all of our long-term targets associated with the program, which can be found on Slide 7. This includes compound average daily sales growth of 7.7% over the 3-year period, which was over 500 basis points above the IP index and ahead of our 400 basis point target.

公共部門最近的表現尤其強勁，23 財年的成長超過 45%，即使公部門沒有前兩季的大訂單，成長也超過 20%。執行我們的成長計畫使我們能夠達到或超過與該計畫相關的所有長期目標，這些目標可以在投影片 7 中找到。這包括 3 年期間複合平均日銷售額成長 7.7%，這是比IP指數高出500多個基點，超出我們400個基點的目標。

And this growth drove strong returns, allowing us to meet our goal of a high-teens return on invested capital. Fiscal '23 ROIC came in at 18.6%. Progress was driven by greater than $100 million in cost savings, also exceeding our target and helped to produce a 220 basis point reduction in adjusted operating expense as a percentage of sales over the 3-year period. I'm pleased with the execution of our mission-critical program. And I'd like to thank all of our 7,000-plus associates for their efforts.

這種成長帶來了強勁的回報，使我們能夠實現高雙位數投資資本回報率的目標。 23 財年的投資報酬率為 18.6%。這項進展是由超過 1 億美元的成本節省推動的，也超出了我們的目標，並幫助調整後的營運費用在 3 年期間佔銷售額的百分比減少了 220 個基點。我對我們關鍵任務計畫的執行感到滿意。我要感謝我們所有 7,000 多名員工的努力。

However, we're not stopping here, and we're not satisfied. We aspire to continuously improve and to take MSC to new heights. So with that, let's move on to Slide 8 for a look at the direction we're heading. The next chapter in our mission-critical journey is anchored in 3 pillars, which I'll now describe in more detail.

然而，我們並沒有就此止步，我們也不滿足。我們渴望不斷改進並將 MSC 推向新的高度。那麼，讓我們繼續看幻燈片 8，看看我們前進的方向。我們關鍵任務之旅的下一章以三大支柱為基礎，我現在將更詳細地描述它們。

Our first pillar will be to maintain momentum on the 5 existing growth drivers that I just described. And this includes maximizing the impact of our large account program. Over the past 3 years, we've built up a significant backlog of large account signings including meaningful implant agreements in fiscal '23, scaling these new wins to their full potential run rate represents significant latent revenue growth.

我們的第一個支柱是保持我剛剛描述的 5 個現有成長動力的勢頭。這包括最大限度地發揮我們大客戶計劃的影響。在過去的3 年裡，我們積壓了大量的大客戶簽約，包括在23 財年達成的有意義的植入協議，將這些新的勝利擴大到其全部潛在運行率意味著顯著的潛在收入增長。

Our second pillar will be to add a couple of significant and new elements to our growth equation to further our performance. First, we will reenergize core customer growth. Over the past 3 years, most of our growth initiatives were focused on larger customers through penetration of high-touch services. In other words, we outperformed our growth over IP target without generating outperformance from the largest part of our customer base, the core customer. Our next mission-critical chapter calls for an acceleration in growth of the core customer, and we're making several critical investments in order to make this happen.

我們的第二個支柱將是在我們的成長方程式中添加一些重要的新元素，以進一步提高我們的表現。首先，我們將重振核心客戶成長。在過去的三年裡，我們的大部分成長計畫都集中在透過高接觸服務的滲透來吸引更大的客戶。換句話說，我們超越了 IP 成長目標，而我們最大的客戶群（核心客戶）卻沒有表現出色。我們的下一個關鍵任務章節要求加速核心客戶的成長，為了實現這一目標，我們正在進行多項關鍵投資。

We're improving pricing effectiveness, upgrading our e-commerce platform and product discovery functions, and we're investing in AI-based digital capabilities to improve our marketing effectiveness. Not only do we think this effort will improve our growth formula, but that it will also serve as a margin tailwind because our core customers are associated with gross margins that are higher than company average.

我們正在提高定價效率，升級我們的電子商務平台和產品發現功能，我們正在投資基於人工智慧的數位功能，以提高我們的行銷效率。我們認為這項努力不僅將改善我們的成長公式，而且還將成為利潤率的推動力，因為我們的核心客戶的毛利率高於公司平均水平。

Second, we'll increase our focus on OEM Fasteners. We have 2 strong businesses now in AIS and tower fasteners that form a solid foundation to build from. We have a cross-selling blueprint that was developed and proven out with CCSG. And so we will take that blueprint and apply it to the OEM Fastener space.

其次，我們將更加關注 OEM 緊固件。我們現在在 AIS 和塔式緊固件領域擁有兩項強大的業務，為我們的發展奠定了堅實的基礎。我們有一個交叉銷售藍圖，該藍圖是由 CCSG 開發並驗證的。因此，我們將採用該藍圖並將其應用於 OEM 緊固件領域。

And though OEM sales are currently well under 5% of company revenues, we see significant potential to scale the business. We will begin implementing our proven process throughout fiscal '24 and expect to see the benefits accrue in fiscal '25 and beyond. Our third pillar will be to drive productivity improvements that continue reducing operating expenses as a percentage of sales and increasing ROIC. During the past 3 years, we built momentum by developing a productivity mindset across the company.

儘管 OEM 銷售額目前遠低於公司收入的 5%，但我們看到了擴大業務的巨大潛力。我們將在整個 24 財年開始實施我們經過驗證的流程，並期望在 25 財年及以後看到收益的累積。我們的第三個支柱將是推動生產力提高，繼續降低營運費用佔銷售額的百分比並提高投資回報率。在過去的三年裡，我們透過在整個公司範圍內培養生產力思維來建立動力。

We reduced adjusted operating expense to sales ratio by over 200 basis points by capitalizing on low-hanging fruit, and making some bold moves, such as reshaping our branch footprint. We see plenty of room for further improvement. And so our third pillar of the next chapter of mission-critical incorporates several new initiatives to accomplish these improvements. We will leverage investments in advanced analytics to improve supply chain performance. in areas such as freight efficiency, network performance and more.

透過利用唾手可得的成果，並採取一些大膽措施（例如重塑分行佈局），我們將調整後的營運費用與銷售比率降低了 200 多個基點。我們看到還有很大的進一步改進的空間。因此，我們下一章關鍵任務的第三個支柱包含了幾項新措施來實現這些改進。我們將利用高階分析的投資來提高供應鏈績效。在貨運效率、網路效能等領域。

We'll build on recent momentum with category line reviews and continuously optimized product and supplier portfolios, and manage mix to improve profitability, and we will attack our order-to-cash and procure-to-pay processes in a way that we've not done before. We will upgrade our digital core systems and reengineer our order-to-cash and procure-to-pay value streams in order to unlock productivity in both operating expenses and in working capital, such as inventory and accounts receivable.

我們將透過類別線審查和不斷優化的產品和供應商組合來鞏固最近的勢頭，並管理組合以提高盈利能力，並且我們將以我們已經採用的方式攻擊我們的訂單到現金和採購到付款流程。以前沒有做過。我們將升級我們的數位核心系統，並重新設計我們的訂單到現金和採購到付款的價值流，以釋放營運費用和營運資本（例如庫存和應收帳款）的生產力。

Looking beyond fiscal '24, we see an exciting setup unfolding. As we leverage these new initiatives, we target 400 basis points or more of growth above the IP index and 20% incremental margins over the cycle. This yields a clear path to achieve adjusted operating margins in the mid-teens and ROIC in the 20% range over the longer term. I'll now turn to the more immediate and discuss the current macro environment and near-term trends.

展望 24 財年之後，我們看到令人興奮的格局正在展開。當我們利用這些新措施時，我們的目標是比 IP 指數成長 400 個基點或更多，並在整個週期中實現 20% 的增量利潤。這為在較長時期內實現調整後營業利潤率達到 10%左右以及投資回報率達到 20% 範圍內提供了一條清晰的道路。我現在將轉向更直接的話題，討論當前的宏觀環境和近期趨勢。

On our last earnings call, I described the tone on the ground as one of leveling, which was largely the case through our fiscal fourth quarter. However, we experienced a deceleration in our average daily sales in September. A portion of this was expected as the public sector capital purchases wound down at the end of our Q4 so no surprise there.

在我們上次的財報電話會議上，我將當前的基調描述為“平衡”，這在我們第四財季的情況基本上是這樣的。然而，我們 9 月的日均銷售額出現了減速。其中一部分是預期的，因為公共部門的資本購買在第四季度末逐漸減少，所以這並不奇怪。

However, the sequential step-down went beyond this and was indicative of further softening. The softening trend is also not surprising given IP readings, sentiment survey results and macro news as companies and consumers deal with the effects of sustained higher interest rates and recessionary fears. However, Conversations with our sales team suggests that we were more acutely impacted in September and October by the extended reach of the UAW strikes.

然而，連續的降級超出了這一範圍，並表明經濟進一步軟化。考慮到IP數據、情緒調查結果和宏觀新聞，隨著企業和消費者應對持續高利率和衰退擔憂的影響，這種疲軟趨勢也不足為奇。然而，與我們銷售團隊的對話表明，我們在 9 月和 10 月受到 UAW 罷工範圍擴大的影響更為嚴重。

While we have some direct exposure, this headwind is magnified when accounting for our indirect exposure, including job shops and machine shops, many of whom service the auto industry. We've since received a steady flow of reports of customers clamping down on spend and taking temporary breaks from production. We see this evidence in a sequential step down of our sales into auto-related end markets in early Q1 that is considerably larger than what happened in the rest of our business.

雖然我們有一些直接風險，但考慮到我們的間接風險（包括加工車間和機械車間，其中許多為汽車行業提供服務），這種不利因素會被放大。此後，我們不斷收到有關客戶削減支出並暫時停止生產的報告。我們在第一季初汽車相關終端市場的銷售額連續下降中看到了這一證據，其幅度比我們其他業務的下降幅度要大得多。

This led to September average daily sales growing 1.3% over prior year or down 8% on a sequential basis. Looking to October, the reach of the automotive strikes has widened, and as a result, with roughly halfway through our fiscal month, we're estimating October net sales to be up 1% to 2% over prior year, which implies flat sequential performance from September levels. We estimate the impact of the UAW strike on September and October average daily sales to be in the low single-digit range. And while we expect these challenges to continue throughout our fiscal first quarter, these headwinds are temporary. In fact, history tells us that during times of extended softness with customers, there's often a bounce back to some degree when normal conditions restore. In the meantime, it presents an opportunity for us to take market share from the local distributors who make up the majority of our market.

這導致 9 月日均銷售額比去年同期成長 1.3%，較上季下降 8%。展望 10 月份，汽車罷工的影響範圍已經擴大，因此，在我們的財政月大約過半時，我們預計 10 月份的淨銷售額將比去年同期增長 1% 至 2%，這意味著連續業績表現持平從9 月份的水平來看。我們估計 UAW 罷工對 9 月和 10 月每日平均銷售額的影響將在較低的個位數範圍內。雖然我們預計這些挑戰將在整個第一財季持續存在，但這些阻力是暫時的。事實上，歷史告訴我們，在客戶長期疲軟的時期，當正常情況恢復時，通常會出現某種程度的反彈。同時，它為我們提供了從占我們市場大部分的當地經銷商手中奪取市場份額的機會。

Before I turn things to Kristen, I'd like to acknowledge the efforts of our entire team. During our first mission-critical chapter, we sharpened our focus, increased the intensity inside of the company and improved our agility. All of those are on display right now. We came out of the gates in fiscal '24 with lower revenue growth than we would like, but I've been pleased with how the team has rallied in response. We are moving aggressively to capture market share that we believe will allow us to power through a softer environment.

在我把事情交給克里斯汀之前，我想感謝我們整個團隊的努力。在我們的第一個關鍵任務章節中，我們集中了注意力，增加了公司內部的強度並提高了我們的敏捷性。所有這些現在都在展出。我們在 24 財年走出大門時，營收成長低於我們的預期，但我對團隊的團結應對感到滿意。我們正在積極採取行動，以奪取市場份額，我們相信這將使我們能夠在疲軟的環境中發揮作用。

For instance, in the month of September, Vending signings were up 57% over prior year and VMI signings, which are largely attributable to our Class C business were up 25%. Implant signings also maintained recent momentum. All of this bodes well for future growth prospects as these signings get stood up. With respect to profitability, we've taken several gross margin initiatives that were already in flight and look to accelerate near-term returns. These include discounting disciplines and a focus on moving product mix to our most profitable supplier partners. On the expense front, we've moved swiftly to reduce discretionary spending and moderate headcount. We're also embedding a continual improvement mindset across the company, such that all 7,000 plus of our associates are empowered to identify and act on productivity improvements. All of these actions will strengthen our ability to navigate through the previously discussed environment and drive profitable growth. I'll now turn things over to Kristen.

例如，9 月份，自動販賣機簽約量比去年同期成長了 57%，VMI 簽約量（主要歸功於我們的 C 類業務）成長了 25%。植入簽約也保持了近期的勢頭。隨著這些簽約的落實，所有這些都預示著未來的成長前景。在獲利能力方面，我們已經採取了幾項已經在實施的毛利率舉措，並希望加快短期回報。其中包括折扣規則以及專注於將產品組合轉移給我們最賺錢的供應商合作夥伴。在費用方面，我們迅速採取行動，減少可自由支配支出並適度裁員。我們也在整個公司內植入持續改善的理念，使我們所有 7,000 多名員工都有權確定生產力改善並採取行動。所有這些行動都將增強我們應對先前討論的環境並推動獲利成長的能力。我現在把事情交給克莉絲汀。

Thank you, Erik, and good morning, everyone. Please turn to Slide 9, where you can see key metrics for the fiscal fourth quarter on both a reported and adjusted basis. Before I dive into our results for the quarter, public sector growth was again particularly strong this quarter. This was partially due to greater-than-expected small capital purchase orders from the contract win discussed during our third quarter call, that fall below normal public sector margins. Digging into the details of our fourth quarter performance, momentum across growth initiatives resulted in continued share gains and strong cash generation.

謝謝你，艾瑞克，大家早安。請參閱投影片 9，您可以在其中查看第四財季報告和調整後的關鍵指標。在我深入了解本季的業績之前，本季公共部門的成長再次特別強勁。這部分是由於我們在第三季電話會議中討論的合約贏得的小額資本購買訂單超出了預期，低於正常的公共部門利潤率。深入研究我們第四季業績的細節，各種成長計畫的勢頭帶來了持續的股票收益和強勁的現金產生。

Fiscal fourth quarter sales of $1.035 billion improved 1.3% year-over-year. Our year-over-year improvement was driven by continued volume growth, more modest pricing benefits as we lap prior year actions and a 150 basis point benefit from acquisitions, partially offset by 5 fewer selling days. On an average daily basis, we experienced year-over-year growth of 9.3% and outpace to the Industrial Production Index by approximately 900 basis points, continuing the trend of significant above-market growth.

第四財季銷售額為 10.35 億美元，較去年同期成長 1.3%。我們的年比改善是由持續的銷售成長、較上一年的行動帶來的更溫和的定價收益以及收購帶來的 150 個基點收益推動的，但部分被銷售天數減少 5 個所抵消。日均成長 9.3%，超過工業生產指數約 900 個基點，延續了顯著高於市場成長的趨勢。

By customer type, on a year-over-year average daily sales basis, public sector sales increased over 60% while national accounts and core customers improved mid-single digits and low single digits, respectively. Looking at our sales through the lens of our mission-critical growth drivers, we continued making strong progress. In metalworking, we continued seeing growth driven by our ability to provide customers outsized savings and value through our best-in-class technical expertise, product breadth and service levels.

依客戶類型劃分，以日均銷售額較去年同期計算，公共部門銷售額成長超過 60%，國民帳戶和核心客戶分別實現中個位數和低個位數成長。從我們的關鍵任務成長驅動力的角度來看我們的銷售，我們繼續取得強勁進展。在金屬加工領域，我們透過一流的技術專長、產品範圍和服務水準為客戶提供巨大的節省和價值，從而持續推動成長。

These competitive differentiators, combined with our 150-plus metalworking experts, places at the spindle with customers and has us well positioned to further penetrate high-growth end markets and address customer needs associated with the skilled labor shortage in North America manufacturing. Within our vending and implant offerings, we continue capturing share and experiencing favorable levels of growth.

這些競爭優勢與我們 150 多名金屬加工專家相結合，成為客戶的核心，使我們能夠進一步滲透高成長的終端市場，並滿足與北美製造業熟練勞動力短缺相關的客戶需求。在我們的自動販賣機和置入產品中，我們繼續佔領市場份額並實現良好的成長水平。

In vending, Q4 average daily sales improved slightly more than 9% year-over-year and represented roughly 16% of total company net sales, in line with the prior year. Implant signings remained strong at a rate modestly below last quarter's high watermark and sales improved approximately 13% year-over-year. As a percentage of total company net sales, implant revenue represented 13%, an improvement of roughly 110 basis points year-over-year. It's worth noting that both of these solutions would have accounted for a higher portion of total company net sales excluding the outsized public sector growth. In e-commerce, we experienced mid-single-digit growth year-over-year.

在自動販賣機領域，第四季日均銷售額年比略高於 9%，約占公司總淨銷售額的 16%，與前一年持平。植入物簽約量依然強勁，略低於上季的高點線，銷售額年增約 13%。植入物收入占公司總淨銷售額的百分比為 13%，較去年同期提高約 110 個基點。值得注意的是，排除公共部門的大幅成長，這兩種解決方案在公司總淨銷售額中所佔的比例較高。在電子商務方面，我們經歷了中個位數的年成長。

Sequentially, related sales improved slightly to 61% of total company revenue, but was down year-over-year largely due to the outsized public sector growth that transacts through different channels. Looking forward, we expect improvement in our e-commerce sales particularly through mscdirect.com as we start rolling out enhanced capabilities, including improved search and navigation functions.

隨後，相關銷售額略有上升，占公司總收入的 61%，但年減，主要原因是透過不同管道進行交易的公共部門成長過快。展望未來，隨著我們開始推出增強功能（包括改進的搜尋和導航功能），我們預計電子商務銷售將有所改善，尤其是透過 mscdirect.com。

Across our other 2 initiatives, we continued making strong progress in selling the portfolio to increase share of wallet, which is primarily our Class C consumables, ADS growth was in the low teens. Progress on our diversification initiative also continued with public sector growth in excess of 60%, representing 13% of sales, which is an improvement of 500 basis points year-over-year.

在我們的其他兩項舉措中，我們在銷售投資組合以增加錢包份額（主要是我們的 C 類消耗品）方面繼續取得強勁進展，ADS 成長處於較低水平。我們的多元化措施也持續取得進展，公共部門成長超過 60%，佔銷售額的 13%，較去年同期提高 500 個基點。

It's worth mentioning that even excluding the small capital purchases, public sector growth was north of 20%. Lastly, and as Erik mentioned, we successfully completed the first chapter of our mission-critical programs. However, we expect to maintain this momentum in fiscal 2024 and beyond. Looking ahead, this will help us mitigate impacts from the temporary market challenges we currently face that I'll speak to later on. Moving on to profitability for the quarter.

值得一提的是，即使排除小額資本購買，公共部門的成長也超過了 20%。最後，正如艾瑞克所提到的，我們成功完成了關鍵任務計畫的第一章。然而，我們預計在 2024 財年及以後將保持這一勢頭。展望未來，這將幫助我們減輕目前面臨的臨時市場挑戰的影響，我稍後將談到這些挑戰。轉向本季的獲利能力。

Our gross margin of 40.5% was down 140 basis points year-over-year. The year-over-year decline was largely driven by a 130 basis point mix headwind primarily due to the specific products sold in association with the previously discussed public sector contract win, which was below typical public sector margins. Looking forward, we don't expect these lower margin sales to have a meaningful impact in fiscal '24.

我們的毛利率為 40.5%，年減 140 個基點。同比下降主要是由 130 個基點的混合逆風推動的，這主要是由於與之前討論的公共部門合約贏得相關的特定產品的銷售，該合約的利潤低於典型的公共部門利潤。展望未來，我們預計這些較低利潤的銷售不會對 24 財年產生有意義的影響。

As expected, price/cost was a larger drag on margins this quarter driven by the combination of more modest pricing benefits and higher cost inventories working through the P&L. However, this was completely offset by combined benefits of other items such as rebates and other cost of goods sold adjustments.

如預期的那樣，價格/成本對本季利潤率的拖累更大，這是由於定價優勢更溫和以及損益表中庫存成本更高。然而，這完全被其他項目的綜合效益所抵消，例如回扣和其他銷售商品成本調整。

Reported operating expenses in the quarter were approximately $299 million and up $9 million year-over-year. On an adjusted basis, operating expenses were approximately $289 million, a slight decrease of $0.5 million. This represents a decline in adjusted operating expense as a percentage of revenue of 40 basis points year-over-year to 27.9% of sales. The reduction in adjusted operating expense was primarily due to one less selling week year-over-year. Excluding the difference in business days, adjusted operating expenses would have increased year-over-year.

該季度報告的營運費用約為 2.99 億美元，年增 900 萬美元。經調整後，營運費用約2.89億美元，略有減少50萬美元。這意味著調整後的營運費用佔收入的比例年減 40 個基點，降至銷售額的 27.9%。調整後營運費用的減少主要是因為銷售周同比減少。排除工作日差異，調整後的營運費用將比去年同期增加。

This increase was primarily driven by variable selling expenses tied to higher volume, labor costs, digital investment and increased health care costs, which remain at the elevated level we experienced in fiscal Q3. This was partially offset by lower freight expense as well as mission-critical savings of approximately $3 million bringing total programming savings to $102 million, slightly above our stated 3-year target.

這一增長主要是由與銷售增加、勞動力成本、數位投資和醫療保健成本增加相關的可變銷售費用所推動的，這些費用仍處於我們在第三財季經歷的較高水平。這部分被較低的運費以及約 300 萬美元的關鍵任務節省所抵消，使總規劃節省達到 1.02 億美元，略高於我們規定的 3 年目標。

Reported operating margin was 11.4% compared to 14.1% in the prior year period. On an adjusted basis, operating margin of 12.6% was in line with expectations and declined 100 basis points compared to the prior year. The year-over-year decline was primarily driven by the 140 basis point reduction in gross margins with a partial offset from the 40 basis point improvement in adjusted operating expenses as a percent of sales.

報告營業利益率為 11.4%，去年同期為 14.1%。調整後營業利益率為12.6%，符合預期，較前一年下降100個基點。年比下降主要是由於毛利率下降 140 個基點，部分抵消了調整後營運費用佔銷售額百分比增加 40 個基點的影響。

We reported GAAP earnings per share of $1.56 compared to $1.86 in the prior year period. On an adjusted basis, EPS was $1.64 versus $1.79 in the prior year. Turning to Slide 10 to review our balance sheet and cash flow performance. We continue to maintain a healthy balance sheet with net debt of approximately $404 million, representing 0.72x EBITDA.

我們公佈的 GAAP 每股收益為 1.56 美元，去年同期為 1.86 美元。調整後每股收益為 1.64 美元，前一年為 1.79 美元。請參閱投影片 10 回顧我們的資產負債表和現金流量表現。我們繼續維持健康的資產負債表，淨債務約 4.04 億美元，相當於 EBITDA 的 0.72 倍。

We have a strong liquidity position with $50 million of cash on hand and approximately $550 million currently available on our revolving credit facility. Looking forward, our balance sheet strength and cash flow generation strongly support both our capital allocation strategy and near-term intentions to offset dilution from the share reclassification, which I will speak to momentarily.

我們擁有強大的流動性頭寸，手頭現金為 5000 萬美元，循環信貸額度目前約為 5.5 億美元。展望未來，我們的資產負債表實力和現金流生成有力地支持了我們的資本配置策略和抵消股票重新分類帶來的稀釋的近期意圖，我將立即談到這一點。

Additionally, we had strong operating cash flow generation during the quarter of 152% and 204% for the full year, well above our greater than 100% target. Capital expenditures totaled $28 million during the quarter and approximately $92 million for the full year. Together, this resulted in strong free cash flow generation of approximately $607 million for the full year, an increase of over $420 million year-over-year.

此外，我們在本季度實現了強勁的營運現金流生成，全年實現了 152% 和 204%，遠高於我們超過 100% 的目標。本季資本支出總額為 2,800 萬美元，全年資本支出約 9,200 萬美元。總之，全年自由現金流量強勁，約 6.07 億美元，較去年同期成長超過 4.2 億美元。

Moving to our capital allocation priorities on Slide 11. Our decision to deprioritize special dividends creates significant room for strategic optionality. Looking forward, this will likely be geared towards organic investment both on M&A opportunities and further deployment to shareholders. As it relates to the ordinary dividend, we will target modest and consistent increases as seen by the recent 5% increase.

在投影片 11 上前往我們的資本配置優先事項。我們決定取消特別股息的優先順序，為策略選擇創造了巨大的空間。展望未來，這可能會面向併購機會的有機投資以及對股東的進一步部署。由於與普通股息相關，我們的目標是適度且持續的成長，正如最近 5% 的成長所示。

As I previously mentioned, share repurchases will remain in the pecking order of our capital allocation strategy. Given our intentions to offset dilution from the share reclassification. We detailed our expectations for buybacks in fiscal '24 for modeling purposes on Slide 12. The dilution of shares from the reclassification was approximately $1.9 million. We repurchased approximately 645,000 shares during the fourth quarter and an additional 205,000 in the current quarter as of October 13, leaving approximately 1.1 million shares remaining to fully offset dilution.

正如我之前提到的，股票回購仍將保留在我們的資本配置策略中。鑑於我們打算抵消股票重新分類造成的稀釋。我們在投影片 12 上詳細說明了對 24 財年回購的預期，以進行建模。重新分類帶來的股票稀釋約為 190 萬美元。截至 10 月 13 日，我們在第四季度回購了約 645,000 股股票，並在本季度額外回購了 205,000 股，剩餘約 110 萬股股票用於完全抵銷稀釋。

As a reminder, we expect to repurchase the remaining shares by fiscal '24 year-end. Looking forward, after completing this buyback initiative, we will have approximately 2.4 million shares remaining on our current authorization. And at a minimum, we will look to offset annual stock-based compensation dilution. Now moving to our initial fiscal 2024 outlook on Slide 13, we expect average daily sales to improve approximately 2.5% at the midpoint with a range of flat to up 5%.

提醒一下，我們預計在 24 財年末回購剩餘股份。展望未來，完成本次回購計畫後，我們目前的授權將剩餘約 240 萬股。至少，我們將尋求抵消年度股票薪酬稀釋。現在轉向投影片 13 中我們對 2024 財年的初步展望，我們預計日均銷售額中位數將成長約 2.5%，成長範圍為持平至成長 5%。

This includes an approximately 160 basis point year-over-year headwind from nonrepeating public sector sales. Underlying assumptions within our sales outlook include more normalized pricing benefits year-over-year. As it relates to the current market challenges, our outlook assumes the IP index remains roughly flat, consistent with recent readings and that headwinds related to the UAW strike will begin to alleviate in early fiscal 2Q or before calendar year-end.

其中包括來自非重複性公共部門銷售的同比約 160 個基點的逆風。我們銷售前景的基本假設包括年比更標準化的定價優勢。由於它與當前的市場挑戰有關，我們的前景假設 IP 指數保持大致持平，與最近的數據一致，並且與 UAW 罷工相關的阻力將在第二財季初期或年底之前開始緩解。

Lastly, as a reminder, we have the same amount of business days year-over-year throughout the fiscal year. Within the sales outlook, we expect adjusted operating margins to be in the range of 12% to 12.8% or down 60 to up 20 basis points year-over-year. This reflects lower volume and more challenging price cost expectations in the first half of the fiscal year. However, for the full year, we expect to offset a good portion of these negative factors through category line review savings, other gross margin countermeasures and a roughly 50 basis point gross margin mix benefit from non-repeating public sector sales.

最後，提醒一下，我們整個財年的營業日數與去年同期相同。在銷售前景中，我們預計調整後的營業利潤率將在 12% 至 12.8% 之間，即年減 60 至上升 20 個基點。這反映出本財年上半年銷售下降和價格成本預期更具挑戰性。然而，就全年而言，我們預計將透過類別線審查節省、其他毛利率對策以及非重複公共部門銷售帶來的約 50 個基點的毛利率組合收益來抵消大部分負面因素。

The combined effect of these items are expected to result in gross margin for the full year being flat to slightly down year-over-year. Depreciation and amortization costs are expected to fall in the range of $85 million to $95 million, with the increase representing a margin headwind of 30 to 50 basis points year-over-year. This largely reflects the investments made in technologies and digital capabilities as well as continued growth in vending.

這些項目的綜合影響預計將導致全年毛利率同比持平或略有下降。折舊和攤銷成本預計將下降 8,500 萬至 9,500 萬美元，增幅意味著利潤率同比下降 30 至 50 個基點。這在很大程度上反映了對技術和數位能力的投資以及自動販賣機業務的持續成長。

Other underlying assumptions include an interest and other expense of $40 million to $50 million CapEx, including implementation cost for cloud computing arrangements of $120 million to $130 million, and a tax rate between 25% and 25.5%. Additionally, we expect strong operating cash flow generation to continue in fiscal 2024 and to be greater than 125% of net income. I will now provide some additional detail on our expectations for the first quarter and quarterly cadence throughout the fiscal year.

其他基本假設包括 4,000 萬至 5,000 萬美元的利息和其他費用，其中包括 1.2 億至 1.3 億美元的雲端運算安排實施成本，以及 25% 至 25.5% 之間的稅率。此外，我們預計 2024 財年將繼續產生強勁的營運現金流，並將超過淨利潤的 125%。我現在將提供一些關於我們對第一季和整個財年季度節奏的預期的更多細節。

With respect to revenues on a sequential basis, we historically experienced low single-digit improvements in our 1Q ADS rate compared to 4Q, which isn't expected to be the case in fiscal '24. This is primarily due to the previously discussed market challenges as well as an approximately $30 million headwind related to non-repeating public sector small capital purchases. As a result of these factors, we expect average daily sales in the first quarter to be down sequentially in the low single-digit range and up slightly year-over-year.

就環比收入而言，與第四季相比，我們第一季的美國存託憑證率歷來有較低的個位數改善，但預計 24 財年不會出現這種情況。這主要是由於先前討論的市場挑戰以及與非重複公共部門小額資本購買相關的約 3000 萬美元的阻力。由於這些因素，我們預計第一季的日均銷售額將連續下降，在較低的個位數範圍內，但比去年同期略有上升。

Looking beyond the first quarter, we expect to slightly outpace historical sequential patterns in 2Q with stronger sequential performance in the second half. Under this scenario, we assume the previously discussed market challenges begin alleviating in early 2Q. With respect to gross margin, we expect the first quarter to tick up sequentially because of the removal of the public sector large order noise.

展望第一季之後，我們預計第二季的環比業績將略高於歷史環比模式，下半年的環比業績將更加強勁。在這種情況下，我們假設先前討論的市場挑戰在第二季初開始緩解。就毛利率而言，由於公共部門大訂單噪音的消除，我們預計第一季將環比上升。

That said, the first and second fiscal quarters are likely our most challenging due to negative price cost. As we move through the year, that gap should ease due to the cycling of our inventory and the benefits of category line reviews and other gross margin countermeasures. Finally, with respect to operating expenses, Q1 will see a sequential step-up in D&A and incentive compensation expense. That sequential step-up will not repeat itself to nearly the same degree in the following quarters of fiscal '24.

也就是說，由於負價格成本，第一和第二財季可能是我們最具挑戰性的。隨著這一年的推移，由於我們的庫存循環以及品類審查和其他毛利率對策的好處，這種差距應該會縮小。最後，就營運費用而言，第一季的 D&A 和激勵薪資費用將連續增加。在 24 財年接下來的幾個季度中，這種連續的升級不會以幾乎相同的程度重複。

Additionally, our profitability as the year progresses, will be supported by the swift actions Erik previously outlined in response to the soft start to the fiscal year. This will come in the form of clamping down on discretionary spending, taking a hard look at key expense areas like freight and other productivity initiatives and executing on several gross margin actions, including the category line reviews. With that, I will turn the call back over to Erik for closing remarks before we open the line for Q&A.

此外，隨著時間的推移，我們的盈利能力將得到埃里克先前為應對本財年軟啟動而概述的迅速行動的支持。這將採取以下形式：限制可自由支配支出，認真審視貨運和其他生產力計劃等關鍵支出領域，並執行多項毛利率行動，包括品類線審查。這樣，在我們打開問答線路之前，我會將電話轉回給埃里克進行結束語。

Thank you, Kristen. Fiscal '23 was a monumental year for MSC as we strengthened our corporate governance, successfully closed the first chapter of our mission-critical journey and surpassed $4 billion in annual sales for the first time in company history. I'd like to thank our entire team for their hard work in making this possible. Looking ahead, we will leverage the muscle memory gain from the past 3 years to further strengthen MSC's performance.

謝謝你，克里斯汀。 23 財年對 MSC 來說是具有里程碑意義的一年，我們加強了公司治理，成功完成了關鍵任務之旅的第一章，並在公司歷史上首次突破了 40 億美元的年銷售額。我要感謝我們整個團隊為實現這一目標所做的辛勤工作。展望未來，我們將利用過去3年獲得的肌肉記憶來進一步增強MSC的表現。

Regardless of the macro environment as we enter fiscal '24, we will remain focused on harnessing our momentum, adding new levers of growth and productivity initiatives and executing what is in our control. Thank you again to our entire team, and we'll now open up the line for questions.

無論我們進入 24 財年的宏觀環境如何，我們都將繼續專注於利用我們的勢頭，增加新的成長槓桿和生產力計劃，並執行我們控制範圍內的事情。再次感謝我們整個團隊，我們現在將開放提問熱線。

(Operator Instructions)

（操作員說明）

First question comes from David Manthey with Baird.

第一個問題來自 David Manthey 和 Baird。

Yes. Thanks for the color on margin progression as we look year-to-year. But I'm hoping you can bridge us a little more clearly from fiscal '23 to '24 gross margin. We're starting at 41 even. You said 50 basis points due to the non-repeating public sector contract win. I think the last time we did a line review something like 50 basis points. So I'm thinking you probably are getting at 100 basis points of good guys there on the gross margin. What are the 100 or more basis points of offset that leads you to believe gross margin will be flat to down next year?

是的。感謝我們逐年觀察利潤率進展的顏色。但我希望您能更清楚地為我們介紹 23 財年到 24 財年的毛利率。我們甚至從 41 開始。你說50個基點是因為非重複的公共部門合約獲勝。我認為上次我們進行了 50 個基點的線路審查。所以我認為你的毛利率可能比好人高出 100 個基點。多少 100 個或更多基點的抵消使您相信明年毛利率將持平甚至下降？

Yes. So you've got the tailwind on the purifiers right, Dave. That's definitely one piece of it. And then the second thing I'd point out is on the category line reviews, I'm not sure I'd go quite as high as the range that you gave. But there is a reasonable expectation, of course, that's helping to offset some of the price cost headwind that we've been experiencing and we'll continue to experience. So if you're starting at 40.5, let's just say you build that up to 41 as a kind of revised starting point for simplicity. I think then you could expect let's just say, somewhere between maybe 50 to 70 on the category line review benefit and then your headwind would be in your price cost spread, and that would get you back down to roughly flattish. Now we alluded to kind of the countermeasures in the script that Erik was talking to.

是的。所以，戴夫，淨化器對你來說是有利的。這絕對是其中的一部分。然後我要指出的第二件事是關於類別線評論，我不確定我是否會達到您給出的範圍那麼高。但當然，有一個合理的預期，這有助於抵消我們已經經歷過並將繼續經歷的一些價格成本逆風。因此，如果您從 40.5 開始，那麼為了簡單起見，您將其建構成 41 作為修改後的起點。我認為，那麼你可以預期，我們可以說，品類審查收益可能在 50 到 70 之間，然後你的阻力將出現在你的價格成本價差中，這會讓你回到大致持平的狀態。現在我們提到了艾瑞克正在談論的劇本中的對策。

So obviously, there's a lot of things we're doing within gross margin, both in terms of transactional price cost, but also trying to affect other things in the kind of the other cost of goods sold accounts via countermeasures, but that's kind of the color I'd give you on kind of simple building blocks to get back to the roughly flattish guidance on the GM rate.

顯然，我們在毛利率範圍內做了很多事情，無論是在交易價格成本方面，還是試圖透過對策影響其他銷售成本帳戶中的其他事情，但這就是我會給你一些簡單的構建模組，以回到大致平坦的GM 率指導。

Shouldn't the -- you're starting from 40.5 but shouldn't we start from 41.0 if we're adding back this 50 basis points for the government business?

不應該——你從 40.5 開始，但如果我們為政府業務加回這 50 個基點，我們不應該從 41.0 開始嗎？

Yes. Yes, that's what I did. So go from 40.5 then put back on 50 bps for the government business, so that would take you to 41.0. And then depending on how you want to assume category line reviews go, I think we've communicated that we hope to do at least as good as in prior reviews. So that be about $20 million I'd say, obviously, we're hoping to do better than that. So depending on how you want to layer that in, I would put in 50 to 70 on category line reviews if I'm kind of being conservative, that would get you up to 41.5 to 41.7. And then to drop you back down to 41 flat, that's where your price cost headwind comes in.

是的。是的，我就是這麼做的。因此，從 40.5 開始，然後為政府業務放回 50 個基點，這樣您就會達到 41.0。然後，根據您希望如何假設類別線評論的進行，我認為我們已經傳達了我們希望至少與之前的評論一樣好。所以我想說，顯然我們希望做得更好，大約是 2000 萬美元。因此，根據您想要如何分層，如果我比較保守的話，我會在類別線評論中放入 50 到 70 分，這將使您達到 41.5 到 41.7。然後你的價格又會降到 41 平，這就是你的價格成本逆風出現的地方。

Okay. All right. We can follow up on that. And then on the overall sales growth outlook here, including the 400 basis points of share gain, if you take out the unusual government sales and acquisitions, it still seems like you're assuming industrial recession in most cases here.

好的。好的。我們可以跟進此事。然後，就整體銷售成長前景而言，包括 400 個基點的份額成長，如果剔除不尋常的政府銷售和收購，在大多數情況下，您似乎仍然假設工業衰退。

So first question is, is that the case? Are you looking at flatness to down in terms of IP for '24 as a base case? And then second, Erik, you mentioned a bounce back in auto-related sales following a period of slowness. Is that your assumption in the second quarter of fiscal '24.

那麼第一個問題是，是這樣嗎？您是否正在考慮將 24 世紀的 IP 平坦化作為基本案例？其次，埃里克，您提到汽車相關銷售在經歷一段時期的放緩後出現反彈。這是您對 24 財年第二季的假設嗎？

Yes, Dave. So on the revenue front, what I'd say is basically what we're assuming, and I think Kristen alluded to this in going through the framework is a roughly flat IP through the year. The reason revenues are where there are is you have 2 things. One is, as you mentioned, it's about a 150 basis point headwind for nonrecurring public sector orders. So if you take the midpoint of our guidance at 250, there's another 150 basis points or so for nonrecurring orders. The other thing I'd say is it's also in recognition, Dave, we're coming out of the gate slow slower than we otherwise would have because of the UAW situation.

是的，戴夫。因此，在收入方面，我想說的基本上就是我們的假設，我認為克里斯汀在介紹框架時提到了這一點，即全年 IP 大致持平。收入之所以如此，是因為你有兩件事。一是，正如您所提到的，對於非經常性公共部門訂單來說，這大約是 150 個基點的逆風。因此，如果您採用我們指導值的中點 250，則非經常性訂單還有 150 個基點左右。我要說的另一件事是，戴夫，這也是對我們的認可，由於 UAW 的情況，我們走出大門的速度比原本要慢。

And in the prepared remarks, we talked about low single digits in terms of points to growth impact. So September and October, October we're a little more than halfway through here. But September, we have under our belt and half of October are going to be lower than the midpoint. So that is factoring into our equation. In terms of bounce back, that is not factored in. So what we are assuming is that the UAW situation release itself before the end of the calendar year. And that things restore to more of a neutral or flat IP situation, it does not account for any big bounce back that certainly could happen.

在準備好的發言中，我們談到了對成長影響的低個位數。所以九月和十月，十月我們已經過半了。但是九月，我們已經掌握了，十月的一半將低於中點。所以這是我們的等式中的一個因素。就反彈而言，這並沒有被考慮在內。所以我們假設UAW的情況會在今年年底前自行緩解。而且事情恢復到更多中立或平坦的智慧財產權狀況，這並不能解釋肯定可能發生的任何大幅反彈。

And our next question today comes from Steve Volkmann with Jefferies.

今天我們的下一個問題來自 Jefferies 的 Steve Volkmann。

Erik, you talked about the deceleration in September and October. It sounded to me like maybe half of that was due to UAW issues and the other half was sort of more general. Any more color you can give us on sort of the non-UAW drivers?

埃里克，您談到了九月和十月的減速。在我看來，其中一半可能是由於 UAW 問題造成的，另一半則更為普遍。對於非 UAW 司機，您還能提供我們更多的資訊嗎？

Yes, Steve, certainly, I'll take a shot here and then Kristen can chime in to fill in any dots here. But certainly, if you look and you go Q4 to September, the Q4 and even August, at the 9% growth number, it's certainly a big drop. I think one thing just to sort of walk you growth rate from where we were tracking Q4 to Q1, you have a couple of things going on. So one, certainly, the non-repeating public sector orders were about 3 points of that.

是的，史蒂夫，當然，我會在這裡嘗試一下，然後克里斯汀可以插話來填補這裡的任何點。但當然，如果你看看第四季到九月、第四季甚至八月，成長率為 9%，這肯定是一個很大的下降。我認為，為了了解從第四季到第一季的成長率，有幾件事正在發生。因此，當然，不重複的公共部門訂單約佔其中的 3 個百分點。

So that brings you down to about 6%. There is a bit of a timing on the lapping of an acquisition, it's 0.5 point or so. But basically, you're looking at somewhere in the 5%, 5.5% range without those factors down to what's in the 13% range for September and something similar what we're projecting for October. Of that, what we were saying is in the low single-digit range, you could add back for UAW.

這樣你的比例就會降到 6% 左右。採集的研磨有一點時間限制，大約是 0.5 個點。但基本上，你會看到 5%、5.5% 範圍內的某個地方，如果不考慮這些因素，9 月的成長率會下降到 13% 的範圍，與我們對 10 月的預測類似。其中，我們所說的是低個位數範圍，您可以為 UAW 加回。

So yes, I think you're back of the envelope on saying about the sequential step down about half and half is a reasonable ballpark, meaning half related to UAW and then certainly a little bit of softening, which isn't surprising to us, given what's going on at all of the macro indices.

所以，是的，我認為你說的連續降級大約一半是一個合理的大概，這意味著一半與 UAW 有關，然後肯定有一點軟化，這對我們來說並不奇怪，考慮到所有宏觀指數的情況。

Right. And just any sort of end markets or themes to call out in terms of that slowing non-UAW slowing? Is that a...

正確的。就非 UAW 放緩而言，是否有任何類型的終端市場或主題值得關注？那是不是一個...

I would -- I'm sorry to interrupt you, but I would call it general slowing. The real interesting thing here is it's hard to find a bright line between what's auto related and what's not. And what I mean by that is we have some direct auto exposure. The bigger issue for MSC, of course, is what would be coded as a machine shop, a fab shop, a lot of -- there's a portion of their business that is auto related.

我會——很抱歉打斷你，但我將其稱為總體放緩。這裡真正有趣的是，很難在與汽車相關的內容和無關的內容之間找到明確的界線。我的意思是我們有一些直接的自動曝光。當然，對於 MSC 來說，更大的問題是什麼會被編碼為機械車間、工廠車間等等——他們的部分業務與汽車相關。

So there's tentacles to the strike that extend beyond just the direct SIC codes if you'd look at auto. But more broadly, I would say general softening. You certainly do have some pockets of strength still like aerospace, of course, but more general softening, again, I think, consistent with what we've been tracking with the IP and the sentiment readings.

因此，如果你看看汽車，那麼罷工的觸角不僅限於直接的 SIC 代碼。但更廣泛地說，我想說的是普遍軟化。當然，你確實仍然有一些實力，例如航空航天，但我認為，更普遍的軟化，與我們一直在追蹤智慧財產權和情緒讀數的情況一致。

Got it. Okay. And then just a quick follow-up. Kristen, are you assuming that gross price is positive in '24?

知道了。好的。然後進行快速跟進。克里斯汀，您是否認為 24 年總價格為正？

Yes, gross price will be positive in '24, Steve. I'd assume about 1 to 2 points of growth from price in '24.

是的，24 年總價格將為正值，史蒂夫。我假設 24 年的價格將增加約 1 到 2 個百分點。

And our next question today comes from Tommy Moll with Stephens Inc.

今天我們的下一個問題來自 Stephens Inc. 的湯米·莫爾 (Tommy Moll)。

One follow-up on the '24 discussion we've been having. Kristen, I think I heard you say in terms of volumes, you expect them lower. I think that was a first half comment, but I just want to make sure that we've got the right time frame there.

這是我們 24 年討論的後續行動。克里斯汀，我想我聽到你說就數量而言，你期望它們更低。我認為這是前半部分的評論，但我只是想確保我們有正確的時間框架。

Yes, you heard that right, Tommy. Lower in the first half, of course, Q1, we kind of talked about here with what's going on with the UAW and the general industrial softening and then the expectation that UAW alleviates in early Q2.

是的，你沒聽錯，湯米。當然，第一季上半年較低，我們在這裡討論了 UAW 的情況和整體工業疲軟，以及 UAW 在第二季初有所緩解的預期。

So what I would -- how I would think about kind of what changes first half to second half then is UAW headwind goes away. And then we also have, as we talked about in the prepared remarks, 2 key things coming online that drive growth in the second half. One is some changes that we're making around our pricing strategy. And then the second is, of course, the changes we're making to the e-commerce platform, and both of those are intended to really reenergize the growth rate in the core customer space, which has been lagging the growth rate we've seen for the broader company overall.

所以我會——我會如何思考上半場和下半場的變化，然後是 UAW 的逆風消失了。正如我們在準備好的發言中談到的，我們還有兩件關鍵的事情即將上線，推動下半年的成長。一是我們圍繞定價策略做出的一些改變。當然，第二個是我們對電子商務平台所做的改變，這兩項改變都是為了真正重振核心客戶領域的成長率，而核心客戶領域的成長率一直落後於我們先前的成長率。對於更廣泛的公司整體而言。

So that is -- that, along with just the change in the macro piece drive sequential improvement in the second half. We've got a bunch of other growth initiatives that we're working on. I'd say there's a runway on the large account wins that we've had in the past year, particularly in the second half of '23 that provide upside through out the year. But those are a few things that I would point to that create the inflection first half to second half that we're expecting.

所以，加上宏觀層面的變化，推動了下半年的持續改善。我們正在製定一系列其他成長計劃。我想說的是，我們在過去一年中贏得了大客戶，特別是在 23 年下半年，這為全年帶來了上行空間。但我要指出的一些事情創造了我們所期望的上半場到下半場的變化。

That's helpful. I also wanted to follow up on auto. If you have these numbers, it would be great if you could provide them just what you estimate your direct and indirect exposures are just in terms of percent of revenue? And just any more anecdotes you can give where you may be able to discern it. It's more just general customer caution. So maybe not directly "strike impacted" but more just a sentiment headwind in that ecosystem that you've seen manifest.

這很有幫助。我還想跟進汽車。如果您有這些數字，如果您能提供您估計的直接和間接風險佔收入百分比的數據，那就太好了？您還可以提供更多您可能能夠辨別的軼事。這更多只是一般客戶的謹慎。因此，也許不是直接“罷工影響”，而更多只是您所看到的生態系統中的情緒逆風。

Yes. Sure, Tommy. So to answer your first question, direct exposure, roughly in the range of 10%, maybe a little bit under 10%. Indirect exposure, as I mentioned, tough to get our arms around specifically, but certainly, it would take that number up considerably when we were referring to kind of MSC's bread and butter of machine shops, fab shops and job shops.

是的。當然，湯米。因此，回答你的第一個問題，直接暴露，大約在 10% 的範圍內，可能略低於 10%。正如我所提到的，間接暴露很難讓我們具體了解，但可以肯定的是，當我們指的是 MSC 的機械車間、製造車間和加工車間的麵包和黃油時，這個數字會大大增加。

So that's in terms of the first part. In terms of the color I'd provide. I mean, we stay pretty close to the ground with our sales force. And we're getting regular reports and some of the reports are temporary halts in production, which would be sort of a more direct example of what we're talking about due to a strike either at a customer or a customer of a customer.

這就是第一部分的內容。就我提供的顏色而言。我的意思是，我們的銷售團隊非常貼近實際。我們正在收到定期報告，其中一些報告是生產暫時停止，這將是我們所討論的由於客戶或客戶的客戶罷工而導致的更直接的例子。

And then the other is, as you said, there are customers who are further down in the chain in the auto supply chain who are expressing more caution and are just clamping down on spending. And we have examples of that where some of our vending customers that's basically buy only what you need. And so we're seeing a lot of the -- almost like what we described in the MSC world of clamping down on discretionary spending, we're seeing the same thing at a lot of our customers.

另一方面，正如您所說，汽車供應鏈下游的一些客戶表現出更謹慎的態度，只是在限制支出。我們有這樣的例子，我們的一些自動販賣客戶基本上只購買你需要的東西。因此，我們看到了很多——幾乎就像我們在 MSC 世界中所描述的那樣，限制了可自由支配的支出，我們在許多客戶身上也看到了同樣的情況。

And our next question today comes from Ken Newman at KeyBanc.

今天我們的下一個問題來自 KeyBanc 的 Ken Newman。

The touch back on to the UAW stuff a little bit more here. Obviously, you're assuming that strike alleviate by the end of the calendar year. I'm just curious just how much visibility do you have there in terms of what gives you comfort in making that assumption? And obviously, the range in the guidance is a bit wide for this coming year. So at the lower end, what are you kind of assuming in terms of a potential impact if that strike lasts a little bit longer than you anticipated?

這裡再談 UAW 的內容。顯然，您假設罷工在日曆年年底之前會有所緩解。我只是好奇你有多少知名度可以讓你放心地做出這樣的假設？顯然，明年的指導範圍有點寬。那麼，從低端來看，如果罷工持續時間比您預期的要長一點，您對潛在影響有何假設？

Well, Ken, what I'd say is you could see, I mean, we're tracking towards the lower end of the range through September and our estimate for October, right? So that gives you a feel for if this were to continue, what would have to be the case for the lower end. We're kind of in it now. And look, we had to make some assumptions.

嗯，肯，我想說的是，你可以看到，我的意思是，我們正在追踪整個 9 月份範圍的下限以及我們對 10 月份的估計，對嗎？因此，這可以讓您感受到如果這種情況繼續下去，低端市場的情況會如何。我們現在已經陷入其中了。看，我們必須做一些假設。

Our visibility is somewhat narrow as you limited like all of us, as you suggested, that's why the range is slightly larger. But look, I think the punchline is if this were extended, you're seeing what it's doing now. But certainly, to the extent this alleviates itself at some point, there is a lift to come. And then as we were talking with Dave earlier, if there were a bounce in response, more of a lift. And obviously, in the meantime, all the while can, we're focused on share capture.

正如您所建議的，我們的能見度有點窄，因為您像我們所有人一樣受到限制，這就是範圍稍大的原因。但你看，我認為重點是，如果延長這一期限，你會看到它現在正在做什麼。但可以肯定的是，只要這種情況在某個時刻得到緩解，就會出現提振。然後，當我們早些時候與戴夫交談時，如果響應出現反彈，則更多的是提升。顯然，與此同時，我們始終專注於份額捕獲。

And so I was encouraged while we can only control so much, I was encouraged right out of the gates in September despite the lower growth our sales team's execution was strong. So vending signings up over 50%. VMI signing is up over 25%. Those are the things that Kristen mentioned sort of a build in back half some of the initiatives coming online in addition to some of the bigger programs, just better execution in a tough environment when local distributors are vulnerable gives us confidence because all of those signings will lead to new agreements, which lead to revenue as we move along the fiscal.

因此，雖然我們只能控制這麼多，但我很受鼓舞，儘管成長較低，但我們的銷售團隊的執行力很強，但在 9 月剛出大門時我就受到了鼓舞。因此自動販賣機簽約量增加了 50% 以上。 VMI 簽約量增加了 25% 以上。這些是克里斯汀提到的一些事情，除了一些更大的計劃之外，還有一些即將上線的計劃，在當地經銷商脆弱的艱難環境中更好地執行，這給了我們信心，因為所有這些簽約都將為我們帶來信心。促成新的協議，隨著我們的財政進展而產生收入。

Right. No, that makes sense. I guess, for my follow-up, kind of following up on that. I mean, you did increase the CapEx here for some of these digital investments. I think Kristen, you mentioned a decent amount of that going towards cloud computing. Can you just quantify how much of that is contemplated in the new CapEx guide? And when do you expect to see those benefits start to monetize through the income statement?

正確的。不，這是有道理的。我想，對於我的後續行動，有點後續。我的意思是，您確實增加了其中一些數位投資的資本支出。我想克里斯汀，你提到了雲端運算的很大一部分。您能否量化新的資本支出指南中考慮了多少內容？您預計什麼時候可以看到這些福利開始透過損益表貨幣化？

Yes, Ken. Happy to talk about that. So it is contemplated in the CapEx range that we gave. I would assume around $35 million of that roughly going to the digital core initiative that we talked about. And maybe let me put a little bit more color around that than we kind of went into in the prepared remarks.

是的，肯。很高興談論這個。因此，它是在我們給出的資本支出範圍內考慮的。我假設其中約 3500 萬美元將用於我們討論的數位核心計劃。也許讓我在這方面添加比我們在準備好的評論中更多的色彩。

But we really see this as being key to ongoing productivity generation and the ability to scale profitable growth once it goes live. So this is not a full-scale ERP system. Just to be clear, like we've kind of implemented parts of this along the way over the years. So our finance systems done already, PIM, web pricing, we're not putting warehouse management and scope for this. And then a little bit -- I guess a little bit more color on this, too.

但我們確實認為這是持續提高生產力以及一旦上線後擴大獲利成長能力的關鍵。所以這不是一個全面的 ERP 系統。需要明確的是，多年來我們已經實施了其中的部分內容。因此，我們的財務系統、PIM、網路定價已經完成，我們不會為此設定倉庫管理和範圍。然後一點點——我想對此也有更多的色彩。

We brought in a new CDIO last year, John Hill. He's led several of these implementations before, he's got a dedicated team that's taken us through this. So it ends up being about $35 million this year. I think a similar amount then in '25 with the program coming online towards the end of '25. I'd expect some productivity benefits to start trickling in a little bit earlier that just related to kind of the business process reengineering on order to cash and procure to pay, which is really what the system is

去年我們引進了一位新的 CDIO，約翰希爾 (John Hill)。他之前領導過幾次這樣的實施，他有一個專門的團隊帶領我們完成了這個任務。所以今年的金額約為 3500 萬美元。我認為與 25 年的金額類似，該計劃將於 25 年底上線。我預期一些生產力優勢會更早開始顯現，這與現金和採購支付的業務流程重新設計有關，這正是系統的本質

targeting. So maybe some small productivity generation in '25, but then material impact the P&L post '25. And then of course, that's when the depreciation would start to hit as well.

瞄準。因此，也許 25 年生產力會產生一些小幅成長，但隨後會對 25 年後的損益產生重大影響。當然，那時貶值也會開始發生。

And our next question today comes from Ryan Merkel with William Blair.

今天我們的下一個問題來自瑞安·默克爾和威廉·布萊爾。

Two questions. First of -- just on UAW, the impact of down low single digits, how did you quantify that? Was that the 10% direct down sort of 20%, 25% or are you including sort of the indirect impact in there as well?

兩個問題。首先，就 UAW 而言，低個位數的影響，您是如何量化的？是 10% 的直接下降還是 20%、25% 的下降，還是您也將間接影響也納入？

Yes. We're including the indirect impact in there, Ryan. So what we've tried to look at was -- the change that we've been seeing in the IP end markets in auto, transportation, primary metals and fabricated metals. And as Erik mentioned, we've got some direct exposure in auto.

是的。瑞安，我們將間接影響也包括在內。因此，我們試圖關注的是——我們在汽車、運輸、初級金屬和金屬製品等 IP 終端市場中看到的變化。正如埃里克所提到的，我們在汽車領域有一些直接的接觸。

So when we look at that one that's probably a little bit cleaner to track, although there's even some things that map in there, which aren't sort of perfect representations of our business. But primary metals and fabricated metals would be where we would look to try to gauge the impact that may be happening in the other spaces through like the job shops and the machine shops.

因此，當我們查看該內容時，追蹤可能會更清晰一些，儘管其中甚至映射了一些內容，但這些內容並不能完美地代表我們的業務。但原生金屬和金屬製品將是我們希望透過加工車間和機械車間來衡量其他空間可能發生的影響的地方。

So we're basically looking at like what normal sequential trends would look like for our sales in those spaces. And then we're looking at what the IP indices are doing to kind of triangulate against that low single-digit number that we gave.

因此，我們基本上正在研究這些領域的銷售的正常連續趨勢。然後我們會研究 IP 指數如何與我們給出的低個位數數字進行三角測量。

Okay. Am I in the right ballpark where sort of all auto is down maybe 20%?

好的。我是否處於正確的範圍內，所有汽車都下降了 20%？

I think that would be roughly in line with what we were seeing when we did the analysis, yes.

我認為這與我們進行分析時所看到的大致一致，是的。

Okay. Okay. That's helpful. And then just back to gross margins in the walk, just high level, it sounds like first half will be down year-over-year and second half up year-over-year. Is that roughly correct? And the reason being in the second half, you get benefits from the line review and then you've lapped the price cost headwind right in 3Q?

好的。好的。這很有幫助。然後回到毛利率，只是高水平，聽起來上半年將同比下降，下半年將同比上升。這大致正確嗎？原因是在下半年，您從生產線審查中受益，然後您在第三季度就克服了價格成本逆風？

Yes. Maybe let me give it sequentially, Ryan, because you get the noise from the public sector contract win in the second half. So what I would think about if you're starting with Q4 as the jump off point on the 40.5, you're going to move up slightly sequentially into Q1. I'd expect a small inflection again in Q2 and then Q2 into Q3 with the second half being roughly level. That might be a little bit of an easier way to think about it because there is a lot of noise in the year-over-year comps. Hopefully, that makes sense.

是的。也許讓我按順序給出，瑞安，因為你會從下半年公共部門合約的贏得中聽到噪音。因此，我會想到，如果您從 Q4 作為 40.5 的起點，您將按順序稍微向上移動到 Q1。我預計第二季度會再次出現小幅拐點，然後第二季度進入第三季度，下半年大致持平。這可能是一種更簡單的思考方式，因為逐年比較中有很多噪音。希望這是有道理的。

Yes, it does.

是的，它確實。

And our next question today comes from Chris Dankert with Loop Capital. Please go ahead.

今天我們的下一個問題來自 Loop Capital 的 Chris Dankert。請繼續。

On the digital launch in msc.com kind of revamp here, just any additional detail on timing? Should we still expect that before calendar year-end? And then maybe just any kind of contribution to sales growth, we should be kind of assuming in the guidance there?

關於 msc.com 的數位發布，這裡有類似的修改，有關於時間安排的任何其他細節嗎？我們還應該在年底之前期待這一點嗎？然後，也許我們應該在指導中假設對銷售成長的任何貢獻？

Yes, Chris, so the -- basically, the e-commerce improvements and the heavy lifting on this is done. So Kristen mentioned in the DNA, the impact of the P&L, the good news is the work is done. The rollout will be occurring really over the next quarter or so. So customers will begin to -- that's when the customers will begin seeing an impact. We're pretty encouraged. What I would say is it's factored in to our guidance for basically what Kristen described coming out of the gates here were slow, we expect some sequential build in part because of this UAW situation at some point, of course, normalizing, but in part because of the initiatives, and that's a piece of it.

是的，克里斯，基本上，電子商務的改進和繁重的工作已經完成。所以克里斯汀在 DNA 中提到了損益表的影響，好消息是工作已經完成。真正的推出將在下個季度左右進行。因此，客戶將開始—那時客戶將開始看到影響。我們很受鼓舞。我想說的是，它已納入我們的指導中，因為克里斯汀所描述的走出大門的速度很慢，我們預計會出現一些順序構建，部分原因是UAW 情況在某個時候正常化，但部分原因是倡議的一部分，這就是其中的一部分。

I think what we expect to happen with e-commerce is it's not going to be a light switch. This will build over time. It is one of the things though that gives us confidence beyond this year, looking at kind of with a 3-year lens, a multiyear lens. What gets us excited as we look back to the prior 3-year chapter and we achieved our growth targets or we exceeded the growth over IP without really getting the engine of our core customer growing, we think this is a big piece to it. So I don't think it will be a light switch, but I do think we're going to start seeing benefits beyond the next quarter.

我認為我們期望電子商務發生的事情是它不會是一個電燈開關。這將隨著時間的推移而建立。不過，這是讓我們對今年以外的事情充滿信心的事情之一，從三年的角度來看，多年的角度。當我們回顧先前的三年章節，我們實現了成長目標，或者我們超越了 IP 的成長，而沒有真正獲得核心客戶成長的引擎時，令我們興奮的是，我們認為這是其中的重要組成部分。所以我不認為這會是一個電燈開關，但我確實認為我們將在下個季度之後開始看到好處。

Got it. That's very helpful. And then maybe just to put a fine point on the cost front. Again, it seems like we're moving away from an absolute cost of dollars coming out of the business, that $100 million that we had in the last mission-critical program, should we now just kind of keep our eyes on hitting that 20 -- or the 20% incremental margin and think about that as kind of the target for continuous improvement going forward?

知道了。這非常有幫助。然後也許只是在成本方面提出一個要點。再說一遍，我們似乎正在擺脫業務的絕對美元成本，即我們在上一個關鍵任務計劃中的 1 億美元，現在我們是否應該專注於達到 20 - - 或者20% 的增量利潤，並將其視為未來持續改善的目標？

Yes. Chris, longer term, I would say that's a fair way to think about it '24 is going to be a bit challenging on hitting 20% incrementals because of what's happening on price cost and margins and then what's happening in terms of fixed cost and OpEx step-up.

是的。克里斯，從長遠來看，我想說這是一個公平的思考方式，因為價格成本和利潤率以及固定成本和營運支出方面的情況，24 年實現 20% 的增量會有點挑戰。升級。

So longer term, yes, I would agree with that. And then the way I would think about productivity within the year though, and maybe this sort of just helps the kind of OpEx sequencing also as we mentioned in the prepared remarks that be a step-up in Q1 on OpEx costs related to D&A and incentive compensation. I would also factor in the sequential volume change and how we gave that.

所以從長遠來看，是的，我同意這一點。然後我會考慮一年內的生產力，也許這種方式有助於營運支出排序，正如我們在準備好的評論中提到的那樣，這是第一季與 D&A 和激勵相關的營運支出成本的提高賠償。我也會考慮連續成交量的變化以及我們如何給出它。

But so you -- based on what we're targeting for Q1, if you infer like a midpoint on what's happened in September and October. You stepped down based on volume-related costs and OpEx. That would be offset by the step-up in D&A and incentive compensation expense. And then I would think about OpEx dollar sequencing through the year as basically being roughly flat with the exception of your volume fluctuations.

但是，根據我們第一季的目標，如果您推斷 9 月和 10 月發生的情況的中間點。您因與銷售相關的成本和營運支出而辭職。這將被 D&A 和激勵補償費用的增加所抵消。然後我會認為全年的營運支出美元排序基本上大致持平，除了交易量波動之外。

So basically, what that means is we're leveraging productivity to cover things like our merit increase, fund some of the investments? And then just to kind of size what that's worth, our merit is typically around $20 million alone each year.

所以基本上，這意味著我們正在利用生產力來支付諸如增加績效、為一些投資提供資金等事情？就其價值而言，我們每年的貢獻通常約為 2000 萬美元。

And our final question today comes from Patrick Baumann with JPMorgan.

今天我們的最後一個問題來自摩根大通的派崔克鮑曼。

First one, I guess, just a quick cleanup from the quarter. I think you said, Kristen, something about rebates and COGS adjustments offsetting price cost in the fourth quarter. What is that exactly?

我想，第一個只是本季的快速清理。克莉絲汀，我想你說過一些關於回扣和銷貨成本調整抵銷第四季價格成本的事情。那到底是什麼？

Yes. So we saw favorability in Q4, (inaudible) related to both vendor rebates and customer rebates. And then the other item that we had in there was around -- so we've been doing a lot of work. I think we've alluded to it on previous calls in terms of countermeasures on working capital and kind of composition of inventory and some of that work started to yield the benefit in Q4 in terms of requiring a lower inventory provision than we've been seeing. So that was the other thing that benefited us in Q4. And those items combined allowed us to offset the price cost headwind. So it was a meaningful contribution, and we talk about countermeasures for fiscal '24. That's the type of stuff that we're looking to as well.

是的。因此，我們在第四季度看到了與供應商回扣和客戶回扣相關的好感度（聽不清楚）。然後我們那裡的另一個項目就在附近——所以我們做了很多工作。我認為我們在先前的電話會議中就營運資金和庫存構成的對策提到了這一點，其中一些工作在第四季度開始產生效益，要求庫存撥備比我們所看到的要低。這是第四季讓我們受益的另一件事。這些項目的結合使我們能夠抵消價格成本的不利影響。所以這是一個有意義的貢獻，我們討論了 24 財年的對策。這也是我們正在尋找的東西。

What -- can you quantify what that was in terms of basis points that offset?

你能用抵銷的基點來量化什麼嗎？

Yes. So if you look at Q4 we had about 130 basis points of impact tied to the public sector contract. And then price cost was down 120 basis points, and it was totally offset by the improvements in those other cost of goods sold areas.

是的。因此，如果你看一下第四季度，我們發現與公共部門合約相關的影響約為 130 個基點。然後價格成本下降了 120 個基點，並且完全被其他銷售領域的商品成本的改善所抵消。

Super helpful. And then my follow-up, maybe for Erik, is if you could give us some more color on the pricing strategy, the changes you're making for that for the core customer like what it entails? And after you're done with this, how should we think about gross margin for this group? Can it remain above the company average by the same spread as it is today?

超有幫助。然後我的後續行動（也許是針對埃里克的）是，您是否可以為我們提供有關定價策略的更多信息，以及您為核心客戶所做的改變，例如它所需要的內容？完成此操作後，我們應該如何考慮該組的毛利率？它能否保持在公司平均值之上，且與目前的利差相同？

And can you remind us how much higher the gross margin is for core customer versus what you booked for large customers, I recall in the past, a number given in the range of like 500 to 700 basis points. But that might have been a couple of years ago, so I just wanted to confirm.

您能否提醒我們，核心客戶的毛利率比您為大客戶預訂的毛利率高出多少，我記得過去，給出的數字在 500 到 700 個基點的範圍內。但這可能是幾年前的事了，所以我只是想確認一下。

Yes, Pat, sure. So maybe I'll touch on the strategy. Kristen can follow up just on the growth differential, but I'll give you the punchline. So what we're doing here and look, our pricing strategy has always been around a list price as a jump-off point to get to a net price for our customer. We feel very good about our pricing. And first, I'd say our value proposition is a high price value prop. And we don't intend on changing that. We bring a lot of value in the way of technical expertise to our customers. We do command a premium relative to the traditional distributor that's warranted and that's not changing.

是的，帕特，當然。也許我會談談策略。克里斯汀可以跟進生長差異，但我會給你一個妙語。因此，我們在這裡所做的事情是，我們的定價策略始終圍繞著標價作為為客戶提供淨價的起點。我們對我們的定價感覺非常好。首先，我想說我們的價值主張是高物價價值支柱。我們並不打算改變這一點。我們透過技術專長為客戶帶來許多價值。相對於傳統經銷商，我們確實獲得了一定的溢價，而且這一點不會改變。

What is going to change is as we look any case where we're touching a customer consistently with a salesperson and a relationship, our pricing is competitive. What we have found, and I think we've alluded to this before that there's cases where we're not touching a customer as regularly with a salesperson. It may be a direct marketing relationship, and there are times where our pricing is not competitive.

將會發生的變化是，在我們與銷售人員和關係一致地接觸客戶的任何情況下，我們的定價都具有競爭力。我們發現了什麼，我想我們之前已經提到過，在某些情況下我們沒有像銷售人員那樣定期接觸客戶。這可能是直接行銷關係，有時我們的定價沒有競爭力。

And with that -- certainly, it's not competitive without jumping through some hoops on discounting. And so what we're looking to do is identify and isolate those cases, both in terms of SKUs and customers and make adjustments so that we're presenting out of the gate a more competitive price. The work is -- basically, this will be going out.

當然，如果不跳過一些折扣環節，它就沒有競爭力。因此，我們要做的就是從 SKU 和客戶角度識別和隔離這些情況，並進行調整，以便我們能夠提供更具競爭力的價格。這項工作基本上是要出去的。

The work most of the heavy lifting, again, is done. It will be coming in flight in the next 1 to 2 quarters. And basically, we feel we're doing this as we've modeled it out with minimal, if any, margin dilution because of the way we've structured this and the idea is just bringing a better price to the customer out of the gate. Our feeling is absolutely that along with the web improvements, this will reenergize the core customer.

大部分繁重的工作再次完成。它將在未來 1 到 2 個季度內投入使用。基本上，我們覺得我們正在這樣做，因為我們已經以最小的（如果有的話）利潤稀釋來建模，因為我們構建的方式，並且我們的想法只是為客戶帶來更好的價格。 。我們的感覺絕對是，隨著網路的改進，這將重新激發核心客戶的活力。

And you are correct, we absolutely feel that post this adjustment, the core customer gross margin will still be healthily above company average and certainly well above the growth drivers that have been driving most of the growth. So your estimate is certainly not out of the ballpark in terms of basis points.

你是對的，我們絕對認為，經過這次調整，核心客戶毛利率仍將健康地高於公司平均水平，並且肯定遠高於推動大部分成長的成長動力。因此，就基點而言，您的估計肯定不會超出範圍。

But that's one of the reasons we're excited as we move past Kristen talked about some of the challenges in the first couple of quarters, you get past the first couple of quarters of '24 into the back half into '25. This gets to be a pretty exciting picture.

但這就是我們在克里斯汀談到前幾季的一些挑戰時感到興奮的原因之一，你已經度過了24年的前幾個季度，進入了25年的後半段。這將會是一幅非常令人興奮的畫面。

Yes. So it's a good range that you gave. And the other thing I'll just -- I'll add a little color on what Erik said too, in terms of profitability of sort of the kind of customers we're talking about here, it's also lower cost to serve. So really benefits the P&L in a couple of places.

是的。所以你給的範圍很好。我還要對埃里克所說的另一件事進行一些補充，就我們在這裡討論的此類客戶的盈利能力而言，服務成本也較低。因此，在幾個方面確實有利於損益表。

So if you -- just to follow up to that, I guess that's embedded in the 1% to 2% price you mentioned earlier for the year. If you reduce the price for this group of customers in select instances, how do you maintain the same gross margin spread that, that group had in the past?

因此，如果您只是跟進這一點，我想這已包含在您今年早些時候提到的 1% 至 2% 的價格中。如果您在某些情況下降低這組客戶的價格，您如何保持該組客戶過去的毛利率差？

Yes, it will be plus or minus, Patrick. And the answer is that, in a lot of cases, it's going to be -- there's a lot of discounting that occurs when the list is high and we're not competitive out of the gate. There's a lot of discounting and oftentimes inefficient discounting that happens. So while this is going on, there's pretty tight controls around discounting disciplines because we're bringing a better price to the customer right out of the gate. And most of our modeling suggests that, that will offset one another.

是的，這將是正數或負數，派崔克。答案是，在很多情況下，當清單很高且我們一開始就沒有競爭力時，就會出現很多折扣。存在大量折扣，而且常常是效率低下的折扣。因此，在這種情況發生的同時，對折扣規則的控制相當嚴格，因為我們一開始就為客戶提供了更好的價格。我們的大多數模型表明，這將相互抵消。

Ladies and gentlemen, this concludes our question-and-answer session. I'd like to turn the conference back over to Ryan Mills for any closing remarks.

女士們先生們，我們的問答環節到此結束。我想將會議轉回給瑞安·米爾斯（Ryan Mills）做閉幕致辭。

Thank you for your time and interest this morning. As a reminder, our fiscal 2024 first quarter earnings call date is set for January 9, and we look forward to seeing you in person at the Bear & Steven's conferences in November. Thank you for joining us today. Goodbye.

感謝您今天早上的時間和興趣。謹此提醒，我們的 2024 財年第一季財報電話會議日期定於 1 月 9 日，我們期待在 11 月的 Bear & Steven 會議上與您見面。感謝您今天加入我們。再見。

Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.

謝謝。今天的電話會議到此結束。我們感謝大家參加今天的演講。您現在可以斷開線路，度過美好的一天。