(MSM) 2024 Q1 法說會逐字稿

Good morning, and welcome to the MSC Industrial Supply Fiscal 2024 First Quarter Conference Call. (Operator Instructions) Please note that 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.

早上好，歡迎參加 MSC 工業供應 2024 財年第一季電話會議。 （操作員說明）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 first quarter fiscal 2024 earnings call. Erik Gershwind, our Chief Executive Officer; and Kristen Actis-Grande, our Chief Financial Officer, are both on the call with me today.

謝謝大家，大家早安。歡迎參加我們的 2024 財年第一季財報電話會議。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。

During today's call, we will refer to various financial data in the earnings presentation and operational statistics that accompany our comments, both of which can be found on our Investor Relations web page.

在今天的電話會議中，我們將參考收益演示中的各種財務數據和評論中附帶的營運統計數據，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 earnings 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，其摘要位於收益簡報的幻燈片 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.

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。

I will now turn the call over to Erik.

我現在將把電話轉給埃里克。

Thanks, Ryan. Good morning, everybody, and thank you for joining us today. I'll begin by wishing everyone a happy and a healthy new year.

謝謝，瑞安。大家早安，感謝您今天加入我們。首先我祝福大家新年快樂、身體健康。

As we look back on the first quarter of our fiscal 2024, which is the first step in our next mission-critical chapter, the headline that comes to mind is strong execution in a challenging environment. On today's call, I'll provide more color on both our execution and the environment. Kristen will then give more specifics on our financial results and expectations for the year. And I'll then wrap things up before we open up the call for questions.

當我們回顧 2024 財年第一季時，這是我們下一個關鍵任務章節的第一步，我們想到的標題是在充滿挑戰的環境中的強有力的執行力。在今天的電話會議上，我將提供有關我們的執行和環境的更多資訊。然後克里斯汀將詳細介紹我們今年的財務表現和預期。然後，在我們開始提問之前，我將總結一下事情。

I'll now begin with the environment. On our last call, which was midway through October, we described the sequential softening in demand that began in September. The causes included reduced spending due to sustained high interest rates, the ripple effects of the UAW strikes, inventory burn-down and an overall caution among our customer base. Following our call, we experienced an even softer back half of October resulting in another sequential step down in our growth rate. At the time of our last call, which, again, was roughly halfway through our fiscal month, we estimated October sales growth of 1% to 2% over prior year.

我現在從環境開始。在十月中旬的最後一次電話會議上，我們描述了從九月開始的需求連續疲軟。原因包括持續高利率導致支出減少、UAW罷工的連鎖反應、庫存消耗以及我們客戶群的整體謹慎態度。在我們的電話會議之後，我們經歷了 10 月下半月的更加疲軟，導致我們的成長率再次連續下降。在我們最後一次電話會議時，也就是我們財月的一半左右，我們預計 10 月的銷售額將比去年同期成長 1% 到 2%。

As you can see on the op stats, we ended the month down over 1%. Which demonstrates just how soft demand was in the back half of October versus our expectation. That softness carried into November, and as you can see on the op stats, into December as well. The root causes were largely the same as identified last quarter, along with belt-tightening and inventory burn-down heading into the holidays at calendar year-end.

正如您在營運統計數據中看到的那樣，我們月底下跌了 1% 以上。這表明 10 月下旬的需求與我們的預期相比是多麼疲軟。這種疲軟狀態一直持續到 11 月，正如您在營運統計數據中看到的那樣，這種疲軟狀態也持續到 12 月。根本原因與上季度確定的基本相同，以及年底假期前的緊縮開支和庫存消耗。

While the UAW situation did resolve itself, most of our customers were slow to bring spending back online due to high finished goods inventories. December was compounded by a slightly higher-than-normal holiday shutdown schedule, which is typical when demand is soft. All of this has been evidenced in IP readings, distributor surveys, and most acutely, in metalworking-related end markets as demonstrated by recent MBI readings.

雖然UAW的情況確實得到了解決，但由於成品庫存較高，我們的大多數客戶恢復支出的速度很慢。 12 月的情況更加複雜，假期停工計劃略高於正常水平，這在需求疲軟時很常見。所有這些都在 IP 讀數、分銷商調查中得到了證明，最明顯的是在金屬加工相關的終端市場中，如最近的 MBI 讀數所證明的那樣。

As we look ahead to calendar 2024, the outlook on the ground from customers, suppliers and our own sales team is more encouraging, particularly after the first calendar quarter. End-user demand, while light, has remained fairly stable. We've not seen the precipitous drop that many had feared. We're hearing that automotive-related customers should ramp up early in calendar 2024. At the same time, stronger end markets like aerospace and defense should remain strong. In addition, the prospect for stable or even lower interest rates is giving customers more confidence in future capital spending. All of this bodes well for a more positive view of the back half of our fiscal 2024 and into fiscal 2025.

當我們展望 2024 年時，客戶、供應商和我們自己的銷售團隊的實際前景更加令人鼓舞，尤其是在第一季之後。終端用戶需求雖然較少，但仍相當穩定。我們並沒有看到許多人擔心的急劇下降。我們聽說汽車相關客戶應該會在 2024 年年初增加。與此同時，航空航太和國防等更強大的終端市場應該會保持強勁。此外，穩定甚至更低利率的前景也讓客戶對未來的資本支出更有信心。所有這些都預示著我們對 2024 財年下半年和 2025 財年的看法會更加正面。

With respect to pricing, the environment has remained stable. We did see some select supplier cost increases, which go into effect early in calendar '24. As a result, we'll be taking a small price increase during our fiscal Q2 to pass these along.

在價格方面，環境保持穩定。我們確實看到一些選定的供應商成本增加，這在 24 日曆年初生效。因此，我們將在第二財季小幅漲價來傳遞這些影響。

I'll now turn to our execution. I am pleased with our team's ability to remain focused on what's within our control and to make progress in any market scenario. Focused execution has been a theme for the past 3 years with progress spanning our strategic growth pillars, our productivity initiatives and now our sustainability efforts as well. As this progress continues, it sets us up for a strong rebound when the macro environment improves and it makes for a better world in which to operate.

現在我要談談我們的處決。我很高興我們的團隊能夠繼續專注於我們控制範圍內的事情，並在任何市場情況下取得進展。過去三年來，聚焦執行一直是一個主題，我們的策略成長支柱、生產力計劃以及現在的永續發展努力都取得了進展。隨著這一進展的持續，當宏觀環境改善時，我們將實現強勁反彈，並創造一個更美好的營運世界。

I'll show you what this looks like on the next few slides, and I'll start with our sustainability progress on Slide 5. In December, we just reaffirmed MSC's commitment to environmental, social and governance principles with the release of our 2023 ESG Report. Within this document, we demonstrate how MSC is enabling a better world and a better tomorrow.

我將在接下來的幾張投影片中向您展示這是什麼樣的，我將在幻燈片5 上從我們的可持續發展進展開始。12 月，我們剛剛發布了2023 年ESG，重申了MSC對環境、社會和治理原則的承諾報告。在本文檔中，我們展示了 MSC 如何打造更美好的世界和更美好的明天。

For example, we've recycled over 20,000 pounds of carbide since 2021 through our regrind services. And we've recycled 1,500 tons of corrugated packaging just in 2023 at our CFCs. We're also creating a better world by providing sustainable products and services to our customers as we reached over 20,000 environmentally preferred products within our offering.

例如，自 2021 年以來，我們透過再研磨服務回收了超過 20,000 磅硬質合金。光是 2023 年，我們的 CFC 就回收了 1,500 噸瓦楞包裝。我們也透過為客戶提供永續的產品和服務來創造一個更美好的世界，我們的產品範圍已達到 20,000 多種環保產品。

Additionally, our metalworking solutions enabled customers to reduce electricity consumption by 32 million kilowatt-hours during the fiscal year.

此外，我們的金屬加工解決方案使客戶在本財年減少了 3,200 萬千瓦時的電力消耗。

On the social and governance front, as you're aware, we strengthened MSC's corporate governance practices through the elimination of our dual-class share structure. But we did more than that. Our community relations program is a vibrant part of our culture. We support many not-for-profits across the country, examples of which can be found in our ESG report.

在社會和治理方面，如您所知，我們透過消除雙層股權結構加強了 MSC 的公司治理實踐。但我們做的還不只這些。我們的社區關係計劃是我們文化中充滿活力的一部分。我們支持全國各地的許多非營利組織，我們的 ESG 報告中可以找到相關範例。

In summary, we're proud of our ESG achievements in fiscal '23 and we're focused on building on this momentum in fiscal '24.

總之，我們對 23 財年的 ESG 成就感到自豪，並致力於在 24 財年繼續保持這一勢頭。

I'll now turn to progress on the 3 strategic pillars we outlined for this next mission-critical chapter: maintaining momentum of existing growth drivers, adding a couple of new elements to our growth formula and driving further profit improvements through 3 productivity initiatives. I'll now take you through performance against each of these.

現在，我將談談我們為下一個關鍵任務章節概述的3 個策略支柱的進展：保持現有成長動力的勢頭，在我們的成長公式中添加一些新元素，並透過3 項生產力舉措進一步推動利潤提高。現在我將帶您了解每一個的表現。

First, on Slide 6, maintaining momentum on existing growth drivers. We continued gaining traction in the public sector with high single-digit growth during the quarter. We saw a similar level of growth in our CCSG business, which primarily consists of Class C consumable products, and we did so despite a softening demand environment.

首先，在投影片 6 上，保持現有成長動力的動能。我們在公共部門繼續獲得關注，本季實現了高個位數成長。我們的 CCSG 業務（主要由 C 類消耗品組成）也實現了類似水準的成長，儘管需求環境疲軟，但我們還是做到了這一點。

Metalworking, while soft due to manufacturing conditions, made important strides for future progress with the formal launch of the MachiningCloud relationship, extending our reach to tooling engineers who are configuring new machining jobs. Despite our metalworking market leadership, we continue to see ample opportunities to expand in various regions across North America.

金屬加工雖然因製造條件而較為軟弱，但隨著 MachiningCloud 關係的正式啟動，我們為未來的進步邁出了重要的一步，將我們的業務範圍擴大到了正在配置新加工作業的模具工程師。儘管我們在金屬加工市場處於領先地位，但我們仍然看到北美各個地區有充足的擴張機會。

Most significant was our solutions performance. During the quarter, we achieved vending signings growth of more than 25%, while our installed base grew 10% year-over-year. For In-Plants, we achieved a record rate in signings and grew our program count by more than 35% compared to prior year. It's also worth noting that VMI installations were up year-over-year in the low teens as well. These numbers are indicative of market share gains and bode well for our future growth outlook. As a reminder, signings take roughly 3 months to convert to revenue generation depending upon the solution and the size of the win. As a result, the costs associated with these wins occur before the revenues do.

最重要的是我們的解決方案效能。本季度，我們的自動販賣機簽約量成長超過 25%，安裝量較去年同期成長 10%。對於廠內項目，我們的簽約率創歷史新高，項目數量比去年增加了 35% 以上。另外值得注意的是，VMI 安裝量也較去年同期增加了 10% 以下。這些數字顯示市場佔有率的成長，對我們未來的成長前景來說是個好兆頭。提醒一下，簽約大約需要 3 個月才能轉化為收入，具體取決於解決方案和勝利的規模。因此，與這些勝利相關的成本先於收入發生。

I'll now discuss progress on the 2 new elements to our growth formula, which are shown on Slide 7. First is reenergizing our core customer growth. On the last call, I highlighted 2 foundational priorities for unlocking the growth: realigning our public-facing web pricing and implementing the new product discovery functionality on our website.

我現在將討論我們的成長公式的 2 個新要素的進展情況，如投影片 7 所示。首先是重新激發我們的核心客戶成長。在上次電話會議上，我強調了釋放成長的兩個基本優先事項：重新調整我們面向公眾的網路定價以及在我們的網站上實施新產品發現功能。

With respect to pricing, our goal is to provide market competitive prices to smaller core customers while remaining roughly gross margin-neutral through better discounting disciplines. We are currently 30% of the way through the realignment, and we're on track to achieve that goal.

在定價方面，我們的目標是向規模較小的核心客戶提供具有市場競爭力的價格，同時透過更好的折扣規則保持毛利率大致中性。目前，我們的調整已完成 30%，並且有望實現這一目標。

In addition, we're seeing encouraging early indicators such as improved web conversion rates and more favorable levels of growth compared to non-piloted SKUs. We plan to complete the balance of the portfolio by the end of our fiscal second quarter.

此外，我們也看到了令人鼓舞的早期指標，例如與非試點 SKU 相比，網路轉換率有所提高，成長水準更為有利。我們計劃在第二財季末完成投資組合的平衡。

With respect to the new product discovery platform, it's now in market in the form of a pilot program and will be fully deployed before the end of our fiscal second quarter. Early indicators are also promising for search. We're watching conversion rates and other performance measures carefully, and we're pleased with what we're seeing.

至於新產品發現平台，它現已以試點計畫的形式推出市場，並將在第二財季結束前全面部署。早期指標對於搜尋也很有希望。我們正在仔細觀察轉換率和其他績效指標，我們對所看到的結果感到滿意。

More exciting is what's yet to come in the following quarters as we build on the base functionality being launched now with significant enhancements such as new table views and schematics, customer self-service analytics and AI-driven personalization. We will more aggressively market the pricing and the web improvements in the back half of our fiscal year after both projects are complete.

更令人興奮的是接下來幾季即將發生的事情，因為我們在現在推出的基本功能的基礎上進行了重大增強，例如新的表格視圖和示意圖、客戶自助服務分析和人工智慧驅動的個性化。在這兩個項目完成後，我們將在本財年後半段更積極地推銷定價和網路改進。

The other new element to our growth strategy is building on our OEM fastener foundation of AIS and Tower. We plan to do so by capitalizing on the cross-selling blueprint that we've proven out with CCSG. While we're still in the early innings, initial indications are promising with the build-out of a large funnel and several early wins. These efforts will allow us to significantly expand our share of wallet across our customers.

我們成長策略的另一個新要素是建立在我們的 AIS 和 Tower 的 OEM 緊固件基礎上。我們計劃利用我們已與 CCSG 驗證的交叉銷售藍圖來實現這一目標。雖然我們仍處於早期階段，但隨著大漏斗的建立和幾場早期勝利的初步跡像是有希望的。這些努力將使我們能夠顯著擴大我們在客戶中的錢包份額。

I'll now touch on our third mission-critical priority, improving profitability through productivity. And here, we highlighted 3 initiatives: improving category management, accelerating supply chain efficiencies and upgrading our digital core systems and business processes.

我現在將談談我們的第三個關鍵任務優先事項，即透過生產力提高獲利能力。在這裡，我們重點介紹了三項舉措：改善品類管理、提高供應鏈效率以及升級我們的數位核心系統和業務流程。

Our category management efforts, which include line reviews, portfolio optimization and product mix and margin management, helped us to exceed our first quarter gross margin expectations. As you may recall, we shared on the last call that gross margins for the year should be flat to slightly down versus fiscal 2023's 41.0%. We also felt that Q1 and Q2 would be the most challenging due to the worst of the price/cost dynamics. So we were pleased to come out of the gate strong at 41.2%, which provides some potential upside for the year.

我們的品類管理工作，包括產品線審查、產品組合最佳化、產品組合和利潤管理，幫助我們超越了第一季的毛利率預期。您可能還記得，我們​​在上次電話會議上表示，與 2023 財年的 41.0% 相比，今年的毛利率應該持平甚至略有下降。我們也認為，由於價格/成本動態最差，第一季和第二季將最具挑戰性。因此，我們很高興能夠以 41.2% 的強勁表​​現實現這一目標，這為今年提供了一些潛在的上漲空間。

Supply chain improvements are noteworthy and are just getting started. Martina has built a strong team with a mix of existing MSC performers and some new talent from the outside. This team is bringing a fresh perspective to many areas within supply chain.

供應鏈的改進值得注意，而且才剛開始。 Martina 建立了一支強大的團隊，其中包括現有的 MSC 表演者和一些外部新人才。該團隊為供應鏈中的許多領域帶來了全新的視野。

During Q1, we saw improvements in freight expenses, both in absolute terms and as a percentage of revenues, and in inventory efficiency as inventory levels dropped $17 million despite end-of-calendar year buying for rebate opportunities. We anticipate more improvements to come as the team is conducting a thorough review of our supply chain end to end.

在第一季度，我們看到貨運費用（無論是絕對值還是佔收入的百分比）都有所改善，庫存效率也有所改善，儘管在日曆年末為了獲得回扣機會而進行了採購，但庫存水平下降了1700 萬美元。隨著團隊對我們的供應鏈進行端到端的徹底審查，我們預計會出現更多改進。

Finally, with respect to our digital core systems upgrade, the project is on time and on budget. We expect to launch sometime around the end of fiscal 2025, which will unlock further productivity gains across the order-to-cash and procure-to-pay value streams.

最後，關於我們的數位核心系統升級，該專案按時且符合預算。我們預計將在 2025 財年末左右推出，這將進一步提高訂單到現金和採購到付款價值流的生產力。

All in all, despite the subdued growth rate in our fiscal first quarter, our execution remains at high levels and supports future profitable growth.

總而言之，儘管我們第一財季的成長率較低，但我們的執行力仍保持在高水平，並支持未來的獲利成長。

I'll now pass things over to Kristen to discuss our first quarter performance and annual outlook in greater detail.

我現在將把事情交給克里斯汀，更詳細地討論我們第一季的業績和年度展望。

Thank you, Erik, and good morning, everyone. Please turn to Slide 8 where you can see key metrics for the fiscal first quarter on both a reported and adjusted basis.

謝謝你，艾瑞克，大家早安。請參閱投影片 8，您可以在其中查看第一個財季報告和調整後的關鍵指標。

Fiscal first quarter sales of $954 million declined 0.4% year-over-year with the same number of business days in both periods. The year-over-year decline was mainly driven by lower volumes due to the demand softness experienced in the second half of the quarter that Erik mentioned earlier. This was partially offset by ongoing momentum in our mission-critical growth drivers as well as more modest tailwinds from price and acquisitions. Foreign exchange was also a slight top line benefit to the tune of 30 basis points.

第一財季銷售額為 9.54 億美元，年減 0.4%，兩期間的工作天數相同。年比下降的主要原因是埃里克之前提到的第二季下半年需求疲軟導致銷售下降。這在一定程度上被我們關鍵任務成長驅動力的持續勢頭以及價格和收購帶來的溫和推動所抵消。外匯交易也略微帶來了 30 個基點的收益。

By customer type, we experienced 9% growth in the public sector as we continued to further penetrate that portion of the market. Sales to National Account customers improved 4% compared to the prior year period, while core and other customers declined approximately 5% year-over-year. As it relates to National Accounts and core customer base, impact from the UAW strike and acute demand softness in metalworking-related end markets at quarter end were the primary drivers to the step-down.

按客戶類型劃分，隨著我們繼續進一步滲透公共部門市場，我們實現了 9% 的成長。國民帳戶客戶的銷售額年增 4%，而核心客戶和其他客戶較去年同期下降約 5%。由於與國民帳戶和核心客戶群相關，全美汽車工人聯合會罷工的影響以及季度末金屬加工相關終端市場的需求急劇疲軟是導致此次降級的主要因素。

From a solutions standpoint, we continued to take share during the quarter. In vending, Q1 average daily sales improved 5% year-over-year and represented approximately 17% of total company net sales, an improvement of roughly 80 basis points compared to the prior year.

從解決方案的角度來看，我們在本季度繼續佔據份額。在自動販賣機領域，第一季日均銷售額年增 5%，約占公司總淨銷售額的 17%，比上年提高約 80 個基點。

Sales through our In-Plant program continued growing in the double-digit range with 10% growth and improved more than 200 basis points year-over-year to 15% of total sales.

透過我們的廠內計畫實現的銷售額持續以兩位數成長，成長率為 10%，年增 200 個基點，佔總銷售額的 15%。

Signing rates across both solutions remained healthy during the quarter, especially in, In-Plants where we achieved quarterly signings at a record rate.

本季度，這兩種解決方案的簽約率保持健康，尤其是在工廠內，我們以創紀錄的速度實現了季度簽約。

Moving on to profitability for the quarter. Our gross margin of 41.2% declined 30 basis points year-over-year. As expected, price/cost was a larger drag on margin during the quarter, which will be the case for 2Q before leveling off in the second half of the year. That said, I am pleased with our gross margin countermeasures, which offset the majority of price/cost headwinds during the quarter.

轉向本季的獲利能力。我們的毛利率為 41.2%，較去年同期下降 30 個基點。正如預期的那樣，價格/成本對本季利潤率的拖累較大，第二季的情況也是如此，然後在下半年趨於平穩。也就是說，我對我們的毛利率對策感到滿意，這些對策抵消了本季的大部分價格/成本不利因素。

Reported operating expenses during the quarter were approximately $291 million, up $11 million year-over-year. On an adjusted basis, operating expenses were approximately $289 million, up $10 million year-over-year. Combined with sales being essentially flat year-over-year, this resulted in adjusted operating expenses increasing roughly 115 basis points as a percentage of sales. This step-up in operating expenses was largely driven by elevated costs associated with our strategic investments of roughly $10 million.

該季度報告的營運費用約為 2.91 億美元，年增 1,100 萬美元。調整後的營運費用約為 2.89 億美元，年增 1,000 萬美元。再加上銷售額比去年同期基本持平，導致調整後的營運費用佔銷售額的百分比增加了約 115 個基點。營運費用的增加主要是由於與我們約 1000 萬美元的戰略投資相關的成本上升所致。

To give some perspective, more than half of this investment was associated with payroll-related costs to support In-Plant growth, web price realignment initiatives and upgrades to our digital core. Outside of costs associated with strategic investments, payroll and payroll-related costs were up primarily due to merit and higher health care costs, which were largely offset by productivity.

從某個角度來看，這項投資的一半以上與工資相關成本有關，以支持廠內成長、網路價格調整計畫以及我們的數位核心升級。除了與策略性投資相關的成本之外，工資和工資相關成本的上升主要是由於績效和醫療保健成本的上升，而這在很大程度上被生產力所抵消。

On a sequential basis, Q1 adjusted operating expenses were roughly flat with Q4 levels. Revenues were down in the neighborhood of $50 million sequentially after backing out the nonrecurring public sector orders, which came with very little operating expense.

從環比來看，第一季調整後的營運費用與第四季的水平大致相當。在取消非經常性公共部門訂單後，收入較上季下降了約 5,000 萬美元，而這些訂單帶來的營運費用很少。

All else being equal, one would have expected Q1 operating expenses to flex down by a few million dollars. The gap and the reason they did not was primarily the investments I just described which support solutions growth, web price realignment initiatives and upgrades to our digital core. We are pressing on with those investments because of our confidence in their ability to create long-term value for stakeholders and our constructive outlook for the back half of the fiscal year, which I will describe in just a bit.

在其他條件相同的情況下，人們預計第一季的營運支出將減少數百萬美元。差距和他們沒有這樣做的原因主要是我剛才描述的投資，這些投資支持解決方案增長、網路價格調整計劃以及我們數位核心的升級。我們正在加緊進行這些投資，因為我們對它們為利益相關者創造長期價值的能力充滿信心，並且我們對本財年後半段的建設性前景充滿信心，我將對此進行簡要描述。

Reported operating margin was 10.6% compared to 12.1% in the prior year period. On an adjusted basis, operating margin of 10.9% declined 140 basis points compared to the prior year. The year-over-year decline was primarily due to the previously mentioned step-up in operating expenses combined with lower sales volumes.

報告營業利益率為 10.6%，去年同期為 12.1%。調整後的營業利益率為 10.9%，較前一年下降 140 個基點。年比下降主要是由於前面提到的營運費用增加以及銷售下降。

GAAP earnings per share was $1.22 compared to $1.45 in the prior year period. On an adjusted basis, EPS was $1.25 versus $1.48 in the prior year.

GAAP 每股收益為 1.22 美元，去年同期為 1.45 美元。調整後每股收益為 1.25 美元，前一年為 1.48 美元。

Turning to Slide 9 to review our balance sheet and cash flow performance. We continued to maintain a healthy balance sheet with net debt of approximately $513 million, representing 0.94x EBITDA. Share repurchases during the quarter to offset share reclassification dilution was the largest contributor to the sequential increase in net debt.

轉向投影片 9 回顧我們的資產負債表和現金流表現。我們繼續維持健康的資產負債表，淨債務約 5.13 億美元，相當於 EBITDA 的 0.94 倍。本季為抵銷股票重新分類稀釋而進行的股票回購是淨債務較上季增加的最大貢獻者。

We made progress on our working capital during the quarter, including roughly $17 million in inventory reductions. This resulted in first quarter operating cash flow conversion of 117%, keeping us on track to achieve our target of greater than 125% for the full year.

本季我們的營運資金取得了進展，其中包括約 1700 萬美元的庫存削減。這導致第一季營運現金流轉換率為 117%，使我們有望實現全年超過 125% 的目標。

Capital expenditures during the quarter of $18 million declined approximately $7 million year-over-year. Together, this drove free cash flow generation of approximately $63 million compared to $51 million in the prior year.

本季資本支出為 1800 萬美元，年減約 700 萬美元。這總共推動自由現金流產生約 6,300 萬美元，而前一年為 5,100 萬美元。

The strength of our balance sheet and cash generation supports our capital allocation priorities shown on Slide 10. As you can see, our decision to deprioritize special dividends continues creating significant room for strategic optionality, such as the investments currently being made this fiscal year. Looking forward, this will likely gravitate towards other organic investment opportunities bolt-on M&A with a focus on metalworking and OEM fasteners and further deployment to shareholders.

我們的資產負債表和現金產生能力支援投影片10 所示的資本配置優先事項。如您所見，我們取消特別股息優先順序的決定繼續為策略選擇創造了巨大的空間，例如本財年目前正在進行的投資。展望未來，這可能會吸引其他有機投資機會的補充併購，重點是金屬加工和 OEM 緊固件，並進一步部署給股東。

As it relates to the ordinary dividend, we will target moderate and consistent increases.

由於涉及普通股息，我們的目標是適度且持續的成長。

Moving to Slide 11 for an update on our repurchasing efforts. I am pleased to announce that we repurchased all the dilution from the share reclassification, which was approximately 1.9 million shares. This was achieved by approximately 1.4 million shares repurchased during the first quarter following the 650,000 shares repurchased in fiscal Q4. With this buyback initiative complete, we have approximately 2.4 million shares remaining on our current authorization.

請前往投影片 11，以了解我們回購工作的最新情況。我很高興地宣布，我們回購了股份重新分類帶來的所有稀釋股份，約 190 萬股。這是繼第四財季回購 65 萬股股票後，第一季回購約 140 萬股股票實現的。此次回購計畫完成後，我們目前的授權剩餘約 240 萬股。

Looking forward, we will look to offset annual stock-based compensation dilution and look for windows of opportunity to be more aggressive.

展望未來，我們將尋求抵銷年度股票薪酬稀釋，並尋找更積極進取的機會之窗。

Turning to Slide 12. We are maintaining our outlook for the fiscal year despite the slow start. As a reminder, this entails average daily sales growth of 0% to 5% and adjusted operating margin in the range of 12% to 12.8%.

轉向投影片 12。儘管開局緩慢，但我們仍維持對本財年的展望。需要提醒的是，這需要日均銷售額成長 0% 至 5%，調整後的營業利潤率在 12% 至 12.8% 範圍內。

I would like to provide additional color on the expected cadence of our performance for the remainder of the fiscal year. Starting with revenues. The midpoint of our outlook assumes that average daily sales improved meaningfully as we move through the back half of the fiscal year. This expectation is based on the following assumptions: first, improving macroeconomic conditions beginning in early calendar 2024, as Erik described earlier; second, the recent surge in solution signings continued to produce a growth tailwind as it takes roughly 3 months to convert to revenue generation depending on the solution and the size of the win; third, our strategic investments, such as the pricing realignment and new web search platform will begin yielding benefits as we move through the back half of the fiscal year.

我想對本財年剩餘時間的預期業績節奏提供更多說明。從收入開始。我們的展望中點假設，隨著本財年後半段的到來，日均銷售額顯著改善。這項預期基於以下假設：首先，正如艾瑞克之前所述，宏觀經濟狀況從 2024 年初開始改善；其次，最近解決方案簽約的激增繼續產生成長動力，因為根據解決方案和獲勝的規模，大約需要 3 個月的時間才能轉化為收入；第三，我們的策略性投資，例如定價調整和新的網路搜尋平台，將在本財年下半年開始產生效益。

On the profitability side, our gross margin performance during the quarter was better than expected and at a rate higher than our annual assumptions. We expect second quarter gross margin to be similar to the first quarter with some potential upside later in the fiscal year, given easing price/cost headwinds, increasing contributions from category line reviews and the small pricing actions during fiscal 2Q.

在獲利能力方面，我們本季的毛利率表現優於預期，並且高於我們的年度假設。我們預計第二季的毛利率將與第一季相似，並考慮到價格/成本阻力的緩解、類別線審查的貢獻增加以及第二財季的小規模定價行動，本財年稍後的毛利率可能會出現一些上漲。

As it relates to adjusted operating expenses, we expect to see the typical seasonal lift in dollar terms for Q2 related to the timing of merit increases. From there, we would expect any step-up in adjusted operating expenses to be more modest with the increases being driven by variable costs associated with volumes as strategic investments begin to ease. As a result, we would expect to see strong operating leverage in Q3 and Q4.

由於它與調整後的營運費用相關，我們預計第二季以美元計算的典型季節性成長與績效成長的時間相關。從那時起，隨著策略性投資開始放鬆，我們預計調整後的營運費用的任何成長都將更加溫和，因為成長是由與銷售相關的可變成本推動的。因此，我們預計第三季和第四季的營運槓桿將強勁。

With that, I will now turn the call back over to Erik for closing remarks before we open the line for Q&A.

現在，在我們打開問答線路之前，我現在將把電話轉回給埃里克進行結束語。

Thank you, Kristen. I'm proud of our team's execution in a challenging environment during the fiscal first quarter. We demonstrated high levels of performance throughout our previous 3-year mission-critical journey, and that is carrying into this next chapter. We're focused on maintaining momentum on existing initiatives, investing into new ones that will accelerate performance and creating new productivity levers to drive margin expansion. The work we are doing now will yield dividends, particularly as macro conditions improve. Our Board and our management team are confident in our people, our plan and our future.

謝謝你，克里斯汀。我對我們團隊在第一財季充滿挑戰的環境中的執行力感到自豪。我們在之前 3 年的關鍵任務之旅中展示了高水準的績效，並將在下一章中延續這一點。我們專注於保持現有計劃的勢頭，投資於能夠提高績效的新計劃，並創造新的生產力槓桿來推動利潤率擴張。我們現在所做的工作將產生紅利，特別是隨著宏觀條件的改善。我們的董事會和管理團隊對我們的員工、我們的計劃和我們的未來充滿信心。

I'll close by thanking our entire team of 7,000-plus associates for their hard work and commitment to our mission. And we'll now open up the line for questions.

最後，我要感謝我們整個團隊的 7,000 多名員工的辛勤工作和對我們使命的承諾。現在我們將開放提問熱線。

(Operator Instructions) Today's first question comes from Tommy Moll with Stephens.

（操作員說明）今天的第一個問題來自 Tommy Moll 和 Stephens。

I wanted to start on the demand environment, and you've both provided some helpful context on how you see the year shaping up and improving as we go forward. But there were 2 points I wanted to circle back on, first is just on the macro improving as we get into the first calendar quarter. Any additional insight you can provide there on what you're seeing or assuming.

我想從需求環境開始，你們都提供了一些有用的背景信息，說明你們如何看待這一年的發展和改進。但我想回顧兩點，首先是隨著我們進入第一季度，宏觀經濟正在改善。您可以在那裡提供有關您所看到或假設的任何其他見解。

And then the related point, you've describe some of the benefits from strategic investments in the second half. You've got a slide today that provided a lot of positive early updates. But what confidence or visibility do you have that when you continue to lean in there that will really move the needle in terms of the ADS?

然後是相關的一點，您描述了下半年策略投資的一些好處。今天的幻燈片提供了許多積極的早期更新。但是，當您繼續努力時，您有什麼信心或可見度可以真正推動 ADS 的發展？

Hey, Tommy, it's Erik. So I'll actually take both. So let me start with the demand environment, and you heard in the prepared remarks what we've seen over the past 3 months or so, particularly since the call. And really, in speaking to customers, you've got a few things going on. Certainly, high interest rates catching up with the industrial economy in terms of lower capital spending and we saw that evidenced in some acute softness in certain of our product lines that would be more akin to a capital type purchase, very typical.

嘿，湯米，我是艾瑞克。所以我實際上會兩者都採用。因此，讓我從需求環境開始，您在準備好的演講中聽到了我們在過去 3 個月左右的時間裡看到的情況，特別是自電話會議以來。事實上，在與客戶交談時，你會發現一些事情。當然，高利率在資本支出下降方面趕上了工業經濟，我們看到我們的某些產品線的嚴重疲軟證明了這一點，這更類似於資本類型的購買，非常典型。

The second thing, certainly, the UAW situation, which, while the situation itself resolved itself, our customers were slow to come back online.

第二件事當然是 UAW 的情況，雖然情況本身已經解決，但我們的客戶恢復在線的速度很慢。

And then the third factor, the closer we got to the end of the year, the calendar year, the more we saw what we described as belt-tightening and inventory burn. Again, pretty typical in a slow environment that customers would use end of the year to take more than typical time off. So you saw that in our December numbers.

第三個因素，越接近年底，即歷年，我們就越會看到我們所說的勒緊褲腰帶和庫存燃燒。同樣，在緩慢的環境中，客戶會利用年底的時間來獲得比通常情況更多的休假，這是很典型的。所以你在我們 12 月的數據中看到了這一點。

As we look forward, what informs our outlook is pretty much the same process that we go through on a normal basis: we'll look at macro indicators, look at what's going on around us and then lean heavily on what we hear on the ground. And what we hear on the ground is from our customers, from our sales team who are interfacing with our customers every day and from our supplier community.

展望未來，影響我們前景的過程與我們通常經歷的過程幾乎相同：我們將專注於宏觀指標，專注於我們周圍正在發生的事情，然後嚴重依賴我們在實地聽到的消息。我們在現場聽到的消息來自我們的客戶、每天與客戶打交道的銷售團隊以及我們的供應商社群。

And I would say, in general, a couple of things. One is we would expect that part of what happened at the year-end here with the belt tightening, the holiday schedule and the burn down, that sort of falls off as we move into the calendar year. But as -- particularly what we're hearing on the ground as we move past the first month or 2 of the calendar year that with interest rates stable, hopefully coming down, confidence is building among our customer base. And again, we're hearing this from our reps, our customers and our suppliers. All of that feeds into, you look to the back half of our fiscal year and into '25, what seems like a more encouraging constructive environment.

總的來說，我想說幾件事。一是我們預計年底發生的部分事情，包括勒緊褲腰帶、假期安排和燒錢，隨著我們進入日曆年，這種情況會減少。但是，特別是當我們在日曆年的第一個月或第二個月過去時，我們在實地聽到的消息是，隨著利率穩定並有望下降，我們的客戶群正在建立信心。我們再次從我們的代表、客戶和供應商那裡聽到了這一點。所有這些都會影響到我們財政年度的後半段和 25 年，這似乎是一個更令人鼓舞的建設性環境。

So that would be the first thing I'd say on the demand side, Tommy. And yes, you're right. If you look at our framework for the back half of the year, certainly, it's back end-loaded now given the way the slow start we came out of the gate. So some of that is environment and then some of that is initiatives, and that was the second part of your question.

所以這將是我在需求方面要說的第一件事，湯米。是的，你是對的。如果你看看我們今年下半年的框架，當然，考慮到我們起步緩慢，它現在是後端加載的。所以其中一些是環境，然後一些是舉措，這是你問題的第二部分。

With respect to the initiatives, I'd sort of break it into 2 pieces as we did in the prepared remarks on the slide. The first tranche is the stuff that's already been in motion that's maintaining momentum on existing growth drivers. So that would -- particularly what we call out there is the solutions performance where we have seen a nice step-up in the growth rate of some of these growth drivers. And as Kristen mentioned, we see a lag somewhere plus or minus 3 months from the time that we get a new signing, whether it's a vending or In-Plant, to the time that we start to see meaningful revenue contribution. So that would be one of the things that gives us confidence.

關於這些舉措，我會將其分成兩部分，就像我們在投影片上準備好的評論中所做的那樣。第一部分是已經在運作的東西，可以維持現有成長動力的動力。因此，特別是我們所說的解決方案效能，我們已經看到其中一些成長驅動因素的成長率有了很好的提升。正如 Kristen 所提到的，從我們獲得新簽約（無論是自動販賣機還是廠內簽約）到我們開始看到有意義的收入貢獻，我們發現存在正負 3 個月的延遲。所以這將是給我們信心的事情之一。

And then the other is the newer growth initiatives, and particularly the 2 foundational elements that we highlighted directed at reenergizing the core customer. What I'd say on both is while it's still relatively early stages on both particularly on the web pricing realignment, we do have enough experience there under our belt to feel pretty good about the metrics that we're seeing and that it's doing what it's expected to do. So certainly, that factors into our constructive outlook for the back half of the year as well.

另一個是新的成長計劃，特別是我們強調的旨在重新激發核心客戶活力的兩個基本要素。我想說的是，雖然兩者都還處於相對早期的階段，特別是在網絡定價調整方面，但我們確實擁有足夠的經驗，對我們所看到的指標以及它正在做的事情感到非常滿意。會做。當然，這也影響了我們對今年下半年的建設性展望。

That's all helpful. And for my second question, I wanted to follow up on gross margins. Kristen, maybe to just make sure that I heard you correctly and then give you an opportunity to give any additional insight here, but what I think I heard you say first quarter was better than you had expected. Second quarter should be roughly similar to first quarter in terms of the margin rate. And then second half versus second quarter potentially higher.

這很有幫助。對於第二個問題，我想跟進毛利率。克里斯汀，也許只是為了確保我正確地聽到了你的聲音，然後給你一個機會在這裡提供任何額外的見解，但我想我聽到你說第一季比你預期的要好。就利潤率而言，第二季應與第一季大致相似。然後下半年與第二季度相比可能會更高。

So if you could just step us through all those, make sure we're tight and then any of the drivers you'd like to call out would be helpful as well.

因此，如果您能指導我們完成所有這些工作，確保我們關係緊張，那麼您想要呼叫的任何驅動程式也會有所幫助。

Yes. Sure, Tommy. So I'll start with Q1. And to your point, we were definitely pleased with where we saw gross margin land in the first quarter. I'll break it down on a year-over-year basis. So we did see a sizable headwind from price/cost as expected. That was offset by a combination of things, the largest being the gross margin countermeasures that we've been working on. So think about things here like inventory efficiency driving improvements in our variances, rebates influencing favorable product mix and then we also started to get a bit of benefit from the category line reviews in Q1.

是的。當然，湯米。所以我將從 Q1 開始。就您而言，我們對第一季毛利率的下降感到非常滿意。我將逐年分解它。因此，正如預期的那樣，我們確實看到了價格/成本方面的巨大阻力。這被多種因素所抵消，其中最大的是我們一直在研究的毛利率對策。因此，想想這裡的事情，例如庫存效率推動了我們差異的改善，折扣影響了有利的產品組合，然後我們也開始從第一季的品類線審查中獲得一些好處。

Then as we think about Q2, to your point, expecting that to be roughly flattish; a slight easing in price/cost into Q2, but not really notable until the second half. And then as we think about the second half, in addition to price/cost easing, we see additional benefit from category line reviews coming online in the second half and that's really -- the combination of those things is really what's giving us confidence in gross margins for the full year and that's what you're hearing reflected in our tones being -- in our tones feeling a little bit more bullish about that for the year.

然後，當我們考慮第二季時，就您的觀點而言，預計第二季將大致持平；第二季價格/成本略有下降，但直到下半年才真正顯著。然後，當我們考慮下半年時，除了價格/成本放鬆之外，我們還看到下半年上線的類別線評論帶來的額外好處，這些因素的結合確實給了我們對毛利率的信心。全年的利潤率，這就是你從我們的語氣中聽到的反映——我們的語氣對今年的利潤率感到更加樂觀。

And our next question today comes from Ken Newman with KeyBanc Capital Markets.

今天我們的下一個問題來自 KeyBanc Capital Markets 的 Ken Newman。

Sorry if I missed this in the prepared remarks, but I'm curious if you could just quantify what the UAW headwind was to ADS this quarter. I think you mentioned last quarter it was a low single-digit impact, and any color you have on how we think about that volume normalizing here into the second fiscal quarter.

很抱歉，如果我在準備好的評論中錯過了這一點，但我很好奇您是否可以量化本季 UAW 對 ADS 的不利影響。我想你在上個季度提到這是一個較低的個位數影響，以及你對我們如何看待第二財季銷售正常化的看法。

Yes, Ken. So the first quarter impact from UAW, hard to precisely pinpoint it, but what we did, similar to what we had looked at in the Q4 call when we shared what we're seeing in September, we're really looking at the end markets that we know are either directly auto-related or are kind of adjacent to auto. So things like primary metal, fabricated metals, places where we see machine shops and job shops selling into. And when you look at the growth rate that we saw in those end markets kind of relative to the broader business, I'd size the impact at kind of the high end of low single digits and that would be both on a sequential and a year-over-year basis.

是的，肯。因此，很難準確指出 UAW 第一季的影響，但我們所做的，與我們在第四季度電話會議中分享 9 月份所看到的情況時所看到的類似，我們確實在關注終端市場我們知道這些要么直接與auto 相關，要么與auto 相鄰。所以像是原生金屬、金屬製品、我們看到機械車間和加工車間銷售的地方。當你看看我們在這些終端市場中看到的相對於更廣泛業務的增長率時，我會在低個位數的高端範圍內衡量影響的大小，這將是連續的和一年的影響-同比基礎上。

Okay. And maybe just a clarification there -- go ahead.

好的。也許只是澄清一下——繼續吧。

Sorry. Go ahead, Ken.

對不起。來吧，肯。

Yes. Maybe if you could just -- also just talk a little bit about the normalizing cadence here into 2Q.

是的。也許如果您可以 - 也可以談談第二季度的正常化節奏。

Yes. So we had originally indicated an early 2Q pickup related to UAW when we did the guidance, Ken. And while we were pleased that we saw the strike resolved earlier than we had expected, we really didn't see a snapback at all in the customer base. A lot of that, our understanding, is it has to do with the high inventory positions and a resulting inventory burn-down at the end of the calendar year.

是的。因此，當我們進行指導時，Ken，我們最初表示與 UAW 有關的第二季早期回升。雖然我們很高興看到罷工比我們預期的更早得到解決，但我們確實沒有看到客戶群回升。據我們了解，這很大程度上與高庫存狀況以及由此導致的年底庫存消耗有關。

So what we're hearing on the ground from our customers and from the field, from our suppliers that we expect that to start to improve in calendar Q1. Not sure how much of it is immediate in January or maybe kind of second half of calendar Q1, but that's definitely -- that improvement is definitely contemplated in our full year guidance.

因此，我們從客戶、現場、供應商那裡聽到的消息表明，我們預計這種情況將在第一季開始改善。不確定有多少是在一月份或第一季下半年立即發生的，但這是肯定的——我們的全年指導中肯定考慮到了這種改進。

Okay. And then just my clarification question there is, is there any good way to parse out how much of auto is at the core customer versus the National Account because, obviously, the core customer is where you're kind of seeing the big volume headwind here this quarter.

好的。然後我要澄清的問題是，有沒有什麼好的方法可以分析出汽車在核心客戶與國民帳戶中的比例，因為很明顯，核心客戶是你在這裡看到巨大銷售逆風的地方本季度。

There's not a great way to do it. I mean, generally, what I'd say is we see a lot of our core customers map into fabricated metals, primary metals and machinery and equipment. So what I would probably feel confident saying core is more weighted in those end markets than National Accounts, but there's no perfect kind of rule of thumb as to how I think about that.

沒有一個很好的方法來做到這一點。我的意思是，總的來說，我想說的是，我們看到很多核心客戶都涉足金屬加工、原生金屬以及機械和設備。因此，我可能會自信地說，核心在這些終端市場中的權重比國民經濟計算更大，但對於我如何看待這一點，沒有完美的經驗法則。

Got it. That's helpful. My second question here is I think your prior guide suggested, call it, 1 to 2 points of price in fiscal '24. It sounds like you're expecting another price increase here into the second quarter. Just high level, is there any real change to the pricing outlook as we think about the top line? And how do you think about the contributions to price and price/cost as we just move through the year? Obviously, the back half will be a little bit easier on the price/cost side.

知道了。這很有幫助。我的第二個問題是，我認為您之前的指南建議，稱之為 24 財年 1 到 2 個點的價格。聽起來您預計第二季價格會再次上漲。只是高層，當我們考慮營收時，定價前景是否有任何真正的變化？在我們剛度過這一年的時候，您如何看待價格和價格/成本的貢獻？顯然，後半部在價格/成本方面會更容易一些。

Yes. So I think we will see a very slight improvement in price expectations for the year, Ken. Like within that 1- to 2-point range that we gave for the contribution to growth from price, I'd say we're feeling more comfortable in the upper end of that range because of the pricing action that Erik had discussed here in calendar Q2 and that is one of the things within price/cost that's giving us more confidence in pushing up and being a bit more bullish on the gross margin projection for the year.

是的。因此，我認為今年的價格預期將略有改善，肯。就像我們為價格對成長的貢獻給出的 1 到 2 點範圍內一樣，我想說，由於埃里克在日曆中討論的定價行為，我們在該範圍的上限感覺更舒服第二季度，這是價格/成本範圍內的因素之一，這讓我們更有信心推高今年的毛利率預測，並對今年的毛利率預測更加樂觀。

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

今天我們的下一個問題來自傑弗里斯的史蒂芬·福克曼。

Sorry to be a little bit annoying with the short-term question here. But Kristen, you gave some sequential thoughts around how the year progresses but you didn't really comment on second quarter sales relative to first. Usually, that's kind of flattish, but I know you have a bunch of growth kind of initiatives that maybe start to kick in? Just any thoughts on sort of how the year progresses on the top line.

抱歉，這裡的短期問題有點煩人。但是克里斯汀，您對今年的進展給出了一些連續的想法，但您並沒有真正評論第二季度相對於第一季的銷售額。通常，這有點平淡，但我知道你們有很多成長型的舉措可能會開始發揮作用？只是對今年營收進展的任何想法。

Yes, Steve, I'll take that one. So for the second quarter, what I'd say, if you look at the ops stat, you'll see that December, we were below our historical month-over-month decline, which is typically about 8% from November to December. So we're off to a slower start in the second quarter. And I'd say it's driven by the things Erik highlighted in his prepared remarks, particularly the extended shutdowns and the clamping down in spend that we really saw accelerate in December.

是的，史蒂夫，我要那個。因此，對於第二季度，我想說的是，如果您查看營運統計數據，您會發現 12 月我們的環比跌幅低於歷史水平，11 月至 12 月的跌幅通常約為 8%。因此，我們在第二季的開局會較慢。我想說，這是由埃里克在他準備好的演講中強調的事情推動的，特別是我們在 12 月確實看到了加速的延長停工和支出限制。

Historically, if you look at Q1 to Q2 ADS sequentially, we are down slightly. And then I think given what we saw in December, it's likely that, that would be the case. But I'll say it's really too early to tell at this point. It really depends how fast that ramp comes back online in early calendar Q1. Like this time last year, we saw a sort of a surprising dynamic with December and then we saw a really nice snapback in January.

從歷史上看，如果你按順序查看第一季到第二季的 ADS，我們會略有下降。然後我認為考慮到我們 12 月所看到的情況，情況很可能就是這樣。但我想說，現在判斷還太早。這實際上取決於第一季初期恢復上線的速度。就像去年的這個時候一樣，我們在 12 月看到了一種令人驚訝的動態，然後我們在 1 月看到了非常好的反彈。

So how quickly that comes online is probably the biggest variable at this point. And we don't know exactly what that's going to look like. What is in our control when we look forward is the growth that we can drive, particularly in the second half, tied to the strategic initiatives. We're very optimistic about that. And then obviously, any tailwind we're getting from macro, the earlier that starts the better.

因此，上線速度有多快可能是目前最大的變數。我們並不確切知道那會是什麼樣子。當我們展望未來時，我們能控制的是我們能夠推動的成長，特別是在下半年，與策略性舉措相關。我們對此非常樂觀。顯然，我們從宏觀經濟中獲得的任何順風車，越早開始越好。

Okay. Great. And then sort of longer term, is there any way to ballpark I don't know, maybe on an ADS basis or something, the kind of business wins that you think you have for the second half so that we can get some sort of comfort in how that progresses?

好的。偉大的。然後從長遠來看，有沒有什麼方法可以讓我不知道，也許是在 ADS 的基礎上或其他什麼，你認為下半年會取得什麼樣的業務勝利，這樣我們就可以得到某種安慰進展如何？

I wouldn't size it specifically, Steve. What I can -- what I'll give you color to maybe when we look at the strategic initiative progress in the second half and how we pressure test that internally, we're basically looking at all of what I kind of call our core growth initiatives, our existing growth initiatives and one inflection opportunity we see there.

我不會具體確定它的大小，史蒂夫。當我們審視下半年的戰略計劃進展以及我們如何在內部對其進行壓力測試時，我可以為您提供一些信息，我們基本上正在關注我所謂的核心增長的所有內容舉措、我們現有的增長舉措以及我們在那裡看到的一個轉折機會。

So we are pressure testing the wins that we already have, the growth that we expect in our largest customers, what inclusion opportunities we see that could come online. And then we're looking at where we think public sector sales will sustain and then where like our Class B sales will sustain.

因此，我們正在對我們已經取得的勝利、我們對最大客戶的預期成長以及我們看到的可能出現的包容性機會進行壓力測試。然後我們正在研究我們認為公共部門的銷售將在哪裡持續，然後我們的 B 類銷售將在哪裡持續。

So we're pressure-checking all of that. And then within the newer things that Erik touched on in the prepared remarks, like what kind of benefit do we think we'll see from the web enhancements or the list price repositioning, what we're really looking at is a range of outcomes, particularly in the core customer segment and how quickly we could see an inflection in that slice of the business.

所以我們正在對所有這些進行壓力檢查。然後，在艾瑞克在準備好的發言中談到的新事物中，例如我們認為我們將從網路增強或標價重新定位中看到什麼樣的好處，我們真正關注的是一系列結果，特別是在核心客戶群中，以及我們能多快看到該業務領域的變化。

And so obviously, we went into the pilots with some assumptions on what that would look like, and we're proving those things out through the pilots. So it's still early days, but we are reassured by what we're seeing. We're happy with how the pilots are going and that's giving us confidence in the second half.

顯然，我們在進行試點時對它的外觀做出了一些假設，我們正在通過試點來證明這些事情。所以現在還為時過早，但我們對所看到的感到放心。我們對飛行員的表現感到滿意，這讓我們對下半年充滿信心。

Okay. Fair enough. We'll see how that goes.

好的。很公平。我們會看看情況如何。

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

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

I guess to kind of pull the thread on that last question a little bit more here, is it too early to give us a glimpse of kind of what level of sales acceleration you're seeing on those repriced SKUs versus those that haven't been repriced yet?

我想在這裡稍微稍微討論一下最後一個問題，現在讓我們了解一下重新定價的 SKU 與那些尚未重新定價的 SKU 相比，銷售加速程度如何還為時過早。重新定價了嗎？

I would say, so look, as Kristen described and maybe just zooming out for a second, looking what we're seeing now versus back half, obviously, when you do the math on what has to happen to ADS and growth rates in the back half, it's a significant step-up. I think you're looking at sort of 3 buckets: one is economic improvement; two is the existing -- overlaying the existing growth drivers, which do have a proven path to them in terms of In-Plant and vending and their contribution to growth; and then three, what you're hitting at now, which is some of the newer ones.

我想說，所以看，正如克里斯汀所描述的那樣，也許只是縮小一秒鐘，看看我們現在所看到的與後半部分相比，顯然，當你對ADS 和後面的增長率進行數學計算時一半，這是一個重大的進步。我認為你關注的是三個面向：一是經濟改善；二是經濟改善。二是現有的－覆蓋現有的成長動力，這些成長動力在店內和自動販賣機及其對成長的貢獻方面確實有行之有效的途徑；然後第三個，你現在正在做的事情，這是一些較新的事情。

I would say, look, on the web price realignment, we're 30% of the way through the process. It's -- look, it's still, I would say, a bit early. And I say it's a bit early, Chris, particularly because one thing I did want to highlight, we really weren't expecting -- I mentioned in the prepared remarks that until we're through the entire offering, we're not really marketing this actively to customers because it's hard to market a pricing realignment for some SKUs and not others. And so the expectation out of the gate wasn't to see a massive lift. I think in the early going, the hypothesis we were proving out here was particularly around the ability to be margin-neutral, which has proven out.

我想說，看，在網路價格調整方面，我們已經完成了 30% 的過程。我想說，你看，現在還太早。我說現在有點早，克里斯，特別是因為我確實想強調的一件事，我們確實沒有預料到 - 我在準備好的評論中提到，在我們完成整個產品之前，我們並不是真正的營銷積極向客戶推銷這一點，因為很難針對某些SKU 而不是其他SKU 進行定價調整。因此，一開始的期望並不是看到巨大的提升。我認為在早期，我們在這裡證明的假設特別是關於保證金中性的能力，這一點已經被證明了。

So I think the fact that we're actually seeing a discrepancy in performance and it's a couple of areas. One is just, in general, the SKUs that have been touched versus the ones that haven't, I would call that a modest difference but a difference. It's a difference. And the second thing being some more operational metrics like web conversion rates, which just give us a sense as to how customers are responding to the changes when they see them. So I would say the results that we're seeing now are encouraging, but still relatively small compared to where we anticipate them going once we actively market this in the back half of the year.

所以我認為事實上我們確實看到了性能上的差異，這是在幾個方面。一個是，一般來說，已觸及的 SKU 與未觸及的 SKU，我認為這是一個適度的差異，但卻是一個差異。這是有差別的。第二件事是一些更多的營運指標，例如網路轉換率，這讓我們了解客戶在看到變化時如何回應。因此，我想說，我們現在看到的結果令人鼓舞，但與我們在今年下半年積極行銷後的預期相比，仍然相對較小。

The other thing, Chris, I would say is we're not hinging the entire back half on this initiative by itself because our expectation is this pricing, combined with the product discovery on the web, will take time and will continue building. So it's a combination, the back half improvement that we need to see and that we're assuming in our outlook is based on all 3 of those factors I mentioned: economy plus current growth drivers that have been accelerating plus these new ones that then build as we move through '24 into '25.

克里斯，我想說的另一件事是，我們不會將整個後半部分都依賴於這一舉措本身，因為我們的期望是，這個定價與網絡上的產品發現相結合，需要時間並將繼續建設。因此，這是一個組合，我們需要看到後半段的改善，並且我們在展望中假設基於我提到的所有 3 個因素：經濟加上目前正在加速的成長動力加上這些新的成長動力當我們從24 歲進入25 歲的時候。

Got it. That's really helpful. And then just touching on the profitability improvement kind of opportunity wrapped up in mission-critical here. I know we're getting away from, I suppose, the dollar targets, but maybe you can just kind of walk us through some of the initiatives on the profitability improvement piece there and just kind of the confidence level in driving SG&A leverage that's kind of hitting the incremental margin target nearer term?

知道了。這真的很有幫助。然後只是談談這裡關鍵任務中包含的獲利能力提高機會。我知道我們正在遠離美元目標，但也許你可以引導我們了解一些有關獲利能力改善的舉措，以及推動 SG&A 槓桿的信心水平近期能否達到增量利潤目標？

Yes, Chris, so in the prepared remarks, we hit on 3 in terms of the productivity. And what I would say is mission-critical 1.0, so the last 3 years, was capitalizing on some of the low-hanging fruit that we saw and that led into the productivity target. I would say we feel at least as good as we did for the last round, as we do for this round in terms of productivity. It's just -- it's different kinds of stuff.

是的，克里斯，所以在準備好的演講中，我們在生產力方面找到了 3。我想說的是關鍵任務 1.0，所以在過去 3 年裡，我們利用了我們看到的一些容易實現的成果，並實現了生產力目標。我想說，就生產力而言，我們的感覺至少與上一輪一樣好，就像本輪一樣。只是──這是不同種類的東西。

And so the 3 anchors are, number one is category management. So the category management improvements, we hit on over the last few quarters, we've talked about line reviews. But line reviews are really just one tactic in what is a bigger objective here to improve category management performance and excellence. And we mentioned a few of the other factors like looking at margin and mix management and portfolio optimization, kind of all feed into category management.

所以這三個支柱是，第一個是品類管理。因此，我們在過去幾季中偶然發現了品類管理的改進，我們討論了產品線審查。但線路評審其實只是一種策略，其更大的目標是提高品類管理績效和卓越性。我們提到了一些其他因素，例如考慮利潤和組合管理以及投資組合最佳化，這些因素都融入了品類管理。

Most of the benefit we're going to see there is going to be on the gross margin line more so than the OpEx line. And look, I mean, obviously, it was one quarter, Q1, but we were encouraged because we had telegraphed Q1 was kind of the depths of the price/cost negativity based upon timing and our average costing. So the fact that we could come out of the gate strong as we did, we felt good about it and we track back to category management. So I think that one you're going to see play out on the gross margin line for the most part.

我們將看到的大部分好處將更多地體現在毛利率上，而不是營運支出上。看，我的意思是，顯然，這是第一季的一個季度，但我們受到了鼓舞，因為我們已經電報第一季度是基於時間和我們的平均成本的價格/成本負值的深度。因此，事實上，我們能夠像我們一樣強大地走出大門，我們對此感覺良好，並且我們追溯到品類管理。因此，我認為您將看到這一點在很大程度上會影響毛利率。

The second one is the supply chain area. And it's long been a strength of MSC's, particularly in the spot buy arena, supply chain that is. And what I'm excited about is the team that Martina has assembled that's now taking just a fresh look, and it's a combination of some people that have been here a long time and know the ropes at MSC with some new people bringing fresh thinking and fresh ideas. And we had 2 data points on the supply chain front this quarter, freight expense as a percent of sales that came down, as it should, given rates, but we saw a nice improvement there. And then the second being inventory efficiency.

第二個是供應鏈領域。長期以來，這一直是 MSC 的優勢，尤其是在現貨採購領域，也就是供應鏈領域。讓我感到興奮的是，Martina 組建的團隊現在煥然一新，它是由一些在 MSC 工作了很長時間、熟悉 MSC 的人與一些帶來新思維和新知識的新人組成的。新鮮的想法。本季我們在供應鏈方面有兩個數據點，運費佔銷售額的百分比有所下降，考慮到費率，這是應該的，但我們看到了一個不錯的改善。第二個是庫存效率。

I think you're going to see more from us in the quarters to come on the supply chain front. I mentioned the team is really doing an end-to-end look at everything from how we're operating inside the buildings to how we move things across the buildings. So that would be the second one.

我認為您將在接下來的幾個季度看到我們在供應鏈方面的更多成果。我提到過，團隊實際上正在對一切進行端到端的研究，從我們如何在建築物內操作到如何在建築物之間移動物品。所以這將是第二個。

And then third, this digital core, the systems project, which is really beyond the systems project, it's going to unlock for us we mentioned order-to-cash and procure-to-pay, which are 2 of the just the core value streams, how things move through MSC that there's a lot to unlock there. That one will be in the later stages of this next chapter. I mentioned that the launch of the new system will be sometime around the end of fiscal '25. So that will be a fiscal '26 event.

第三，這個數字核心，系統項目，它確實超出了系統項目的範圍，它將為我們解鎖我們提到的訂單到現金和採購到付款，這是兩個核心價值流，事情如何通過MSC 進行，那裡有很多東西需要解鎖。這個將在下一章的後期階段進行。我提到新系統將在 25 財年末左右推出。因此，這將是 26 財年的一項活動。

For the back half of '24 and '25, you can expect category management to influence gross margin and supply chain on the OpEx line.

在 24 世紀和 25 世紀的後半段，您可以預期品類管理將影響營運支出線上的毛利率和供應鏈。

And our next question comes from David Manthey with Baird.

我們的下一個問題來自 David Manthey 和 Baird。

Happy New Year.

新年快樂。

Happy New Year, Dave.

新年快樂，戴夫。

First off, could you give us your mindset on head count for fiscal '24?

首先，您能否告訴我們您對 24 財年員工人數的看法？

Yes. Sure, Dave. What we've talked about so far is we saw the softening beginning last quarter and that we were going to temper hiring. And that's essentially what you saw from us in the first quarter. So if you look, head count in total is up. More than 100% of the increase came in sales. So the rest of the business head count and support functions head count was actually down, up in sales.

是的。當然，戴夫。到目前為止，我們所討論的是，我們看到上個季度開始出現疲軟，並且我們將減少招募。這基本上就是您在第一季從我們身上看到的情況。所以如果你看的話，總人數增加了。超過100%的成長來自於銷售額。因此，其餘業務人員和支援職能部門的人員數量實際上有所下降，而銷售額卻有所上升。

And being up in sales is really a function of 2 things. One was supporting the growth in the vending and the In-Plant signings specifically. As you can imagine, the more of those we have, the more support there is. So we view that as a good thing. And the second was some other select, basically investment, opportunities on the front end of the business to drive growth. The rest of the business was down.

銷售額的上升實際上取決於兩件事。其中之一是特別支持自動販賣機和廠內簽約的成長。正如您可以想像的那樣，我們擁有的人越多，支持就越多。所以我們認為這是一件好事。第二個是業務前端的其他一些精選機會，基本上是投資機會，以推動成長。其餘業務均出現下滑。

I would say the MO we're following right now, Dave, is reflective of the environment in which we are operating. So we're viewing the current step-down in growth as fairly shallow and fairly temporary as evidenced by our outlook for the back half of the year. And so we're taking an approach to head count that's moderating. And certainly, I think you'll continue to see that temper but not a dramatic drop. I think if we were operating in a different sort of environment, you'd see a different playbook.

我想說，戴夫，我們現在遵循的 MO 反映了我們運營的環境。因此，我們認為當前的成長放緩相當淺且相當暫時，正如我們對今年下半年的展望所證明的那樣。因此，我們正在採取一種控制員工人數的方法。當然，我認為你會繼續看到這種脾氣，但不會急劇下降。我認為如果我們在不同的環境中運營，你會看到不同的劇本。

Got it. And then could you discuss your thoughts on growth versus IP this quarter? And related to that, you clearly are expecting some economic improvement as you move through the year. But does your outlook also assume that you can reestablish 400 basis points of outgrowth later this fiscal year?

知道了。那麼您能否討論一下您對本季成長與智慧財產權的看法？與此相關的是，您顯然預計今年經濟會有所改善。但您的展望是否也假設您可以在本財年稍後重新建立 400 個基點的成長？

Yes, Dave, that is certainly -- yes. The short answer is yes. And definitely, we saw it compress here. From everything we can see, Dave, we don't see a change in relative market share position in terms of what's behind the compression and growth relative to IP. And a lot of it was a function of some spend contraction, some inventory burn, things beyond just output that disproportionately affected us. So the short answer is yes, our expectation and our focus is still on outgrowing IP by at least 400 bps.

是的，戴夫，那當然是——是的。簡短的回答是肯定的。當然，我們在這裡看到了它的壓縮。 Dave，從我們所看到的一切來看，就相對於 IP 的壓縮和成長背後的原因而言，我們沒有看到相對市場份額地位發生變化。其中很大一部分是由於支出收縮、庫存消耗以及產出以外的因素對我們造成了不成比例的影響。所以簡短的回答是肯定的，我們的期望和重點仍然是超過 IP 至少 400 個基點。

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

今天我們的下一個問題來自摩根大通的派崔克鮑曼。

Just on the web pricing realignment, can you talk program and what it entails? And the reason I'm asking is I just remember in the past you had some pilot programs. You had done 4 things like sales force changes you had made, and then when it rolled out more broadly the impacts were different than what you had seen on the pilot. So just wanted to check your confidence on the accuracy of the read on the sales lift and the neutral margins versus the control group.

就網路定價調整而言，您能談談計劃及其含義嗎？我問的原因是我只記得過去你們有過一些試點計畫。您已經做了四件事，例如您所做的銷售人員變動，然後當它更廣泛地推出時，其影響與您在試點中看到的影響不同。因此，我只是想檢查一下您對銷售提升和中性利潤與對照組的讀數準確性的信心。

Yes, Pat, sure. So what I would tell you is -- so first of all, what we're doing, the goal is to present -- we've had web pricing for a while. But for customers that don't interact with us often and have a structured discount program, there's cases where those aren't competitive. So the goal is to create a market competitive price for any customer that wants to come to us. So that's the objective.

是的，帕特，當然。所以我要告訴你的是 - 首先，我們正在做的事情，目標是展示 - 我們已經進行網路定價有一段時間了。但對於不經常與我們互動且有結構化折扣計劃的客戶來說，在某些情況下這些計劃不具競爭力。因此，我們的目標是為任何想要來找我們的客戶創造具有市場競爭力的價格。這就是目標。

I mentioned we're 30% of the way through it, and I think where you're going is how accurate a read is the 30%. Look, I think it's pretty good. It's not 100% for sure. So there's still -- it's certainly -- is there uncertainty? Of course, but I would say that in terms of the degree to which we're managing this project, the rigor that we're bringing is really sound. So this sits with Martina and her team. I can tell you that we're getting -- Kristen mentioned some expenses related to that. Most of that is getting some outside in expertise from folks who have -- are specialists in this. But our team is met with a combination of our own team and some help managing this on a daily standup basis. So the visibility, the transparency is really high. And so my confidence is high.

我提到我們已經完成了 30%，我認為你要考慮的是 30% 的讀數有多準確。看看吧，我覺得還不錯。這不是100%肯定的。所以仍然存在——這是肯定的——是否存在不確定性？當然，但我想說，就我們管理這個專案的程度而言，我們所帶來的嚴謹性確實是合理的。這就是瑪蒂娜和她的團隊的職責。我可以告訴你，克里斯汀提到了一些與此相關的費用。其中大部分是從這方面的專家那裡獲得一些外部專業知識。但我們的團隊遇到了我們自己的團隊的組合，以及一些人在日常站立的基礎上幫助管理這個問題。所以能見度、透明度真的很高。所以我的信心很高。

And so what percentage of the business is actually going off at the printed web price these days?

那麼現在有多少比例的業務實際上以印刷網路價格進行銷售呢？

It's still a relatively low percentage, but it's not something that we -- you could imagine competitively sensitive. It's not something we share publicly.

這仍然是一個相對較低的百分比，但它不是我們——你可以想像的競爭敏感的東西。這不是我們公開分享的東西。

In terms of the price changes on the 30% of the SKUs, was it -- timing-wise, did that happen late in the first quarter? And is the net price on those SKUs negative after the changes? Are there an equal -- or is there like an equal number of SKU price increases and decreases?

就 30% 的 SKU 的價格變化而言，從時間上來說，是在第一季末發生的嗎？更改後這些 SKU 的淨價是否為負值？ SKU 價格上漲和下跌的數量是否相等？

So what I would say is, yes, it happened a little more than halfway through our fiscal first quarter. And in terms of -- there was a balance. So you can imagine there were some prices that went down, some went up. I would say there were more that went down than went up. But along with that came -- in the past, if the pricing were higher, our salespeople, our inside salespeople, would really have to jump through hoops for the customers. So along with that came some discounting guardrails and that's how you get to a margin-neutral outcome.

所以我想說的是，是的，這件事發生在我們第一季過半的時候。就——而言，存在著平衡。所以你可以想像有一些價格下降了，有些價格上漲了。我想說的是，下跌的數量多於上漲的數量。但隨之而來的是——在過去，如果定價更高，我們的銷售人員，我們的內部銷售人員，真的必須為客戶排除萬難。因此，隨之而來的是一些折扣護欄，這就是你如何獲得利潤中立的結果。

Got it. Okay. And then it seems like given the 1% to 2% price outlook that you're maintaining and seems like tracking favorably, too, there isn't much drag from this initiative that you expect and then there also isn't much deflation coming through. It seems like maybe you could provide some color on are there any product categories where you're seeing customers push back on pricing at all? Or is it basically just kind of a stable outlook and some further pockets of cost increases?

知道了。好的。然後，考慮到您所維持的 1% 至 2% 的價格前景，並且似乎跟踪情況也不錯，您預期的這一舉措不會產生太大的阻力，而且也不會出現太大的通貨緊縮。看來您可以提供一些信息，說明是否有任何產品類別您看到客戶根本不接受定價？或者它基本上只是一種穩定的前景和一些進一步的成本增加？

Yes. Sorry to interrupt you. I would describe in the environment and the word I used in the prepared remarks are stable. It's been unusual in our history to see meaningful price deflation on our products. And I would say we're not seeing it now. If anything, there's more going up than anything, but it's relatively stable. I mean the price increase is not going to be a major event, but we did want to share it as noteworthy because I think any concern about price deflation we're not seeing it.

是的。抱歉打擾你了。我會描述環境，並且我在準備好的評論中使用的單字是穩定的。我們的產品價格大幅下降，這在我們的歷史上是不尋常的。我想說我們現在還沒有看到它。如果有什麼不同的話，那就是上漲幅度最大，但相對穩定。我的意思是，價格上漲不會成為重大事件，但我們確實想將其作為值得注意的事情來分享，因為我認為我們沒有看到任何對價格通貨緊縮的擔憂。

In terms of the price drag from the web pricing initiative, again, our goal for the whole program, beginning with the first tranche, was roughly margin-neutral. So what that means is any drag from where there were more prices down coming up gets buffered by improvements to discounting disciplines we made, and that's what we saw.

就網路定價措施對價格的拖累而言，我們對整個計畫的目標，從第一部分開始，大致是利潤中立的。因此，這意味著價格進一步下跌帶來的任何拖累都可以透過我們制定的折扣規則的改進來緩衝，這就是我們所看到的。

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

謝謝。女士們、先生們，我們的問答環節到此結束。我想把會議轉回瑞安米爾斯做閉幕詞。

Thank you for your time and interest this morning. As a reminder, our 2Q fiscal '24 earnings call date is set for March 28. We look forward to seeing you in person at conferences and other investor events in the coming months. Again, thank you for your time. This now concludes our call.

感謝您今天早上的時間和興趣。謹此提醒，我們的 24 財年第二季財報電話會議日期定於 3 月 28 日。我們期待在未來幾個月的會議和其他投資者活動中見到您。再次感謝您抽出時間。我們的通話到此結束。

Thank you. Ladies and gentlemen, you may now disconnect your lines, and have a wonderful day.

謝謝。女士們先生們，現在您可以斷開線路，祝您有美好的一天。