Materion Corp (MTRN) 2024 Q2 法說會逐字稿

Greetings. Welcome to the Materion second quarter 2024 earnings conference call.

問候。歡迎參加 Materion 2024 年第二季財報電話會議。

(Operator Instructions) Please note, this conference is being recorded.

（操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to your host, Kyle Kelleher, Director of Investor Relations and Corporate FP&A. Kyle, you may begin.

我現在將會議交給東道主凱爾·凱萊赫 (Kyle Kelleher)，他是投資者關係和企業 FP&A 總監。凱爾，你可以開始了。

Good morning, and thank you for joining us on our second quarter 2024 earnings conference call. This is Kyle Kelleher, Director, Investor Relations and Corporate FP&A. Before we begin our remarks this morning, I would like to point out that we have posted materials on the company's website that we will reference as part of today's review of the quarterly results. You can also access the materials through the download feature on the earnings call webcast link.

早安，感謝您參加我們的 2024 年第二季財報電話會議。我是凱爾·凱萊赫 (Kyle Kelleher)，投資者關係和企業 FP&A 總監。在我們今天早上開始發言之前，我想指出，我們已經在公司網站上發布了資料，我們將在今天的季度業績審查中引用這些資料。您也可以透過財報電話會議網路廣播連結上的下載功能存取這些資料。

With me today is Jugal Vijayvargiya, President and Chief Executive Officer; and Shelly Chadwick, Vice President and Chief Financial Officer. Our format for today's call is as follows: Jugal will provide opening comments on the quarter. Following Jugal, Shelly will review the detailed financial results for the quarter in addition to discussing our expectations for the second half of 2024. We will then open up the call for questions.

今天與我在一起的是總裁兼執行長 Jugal Vijayvargiya；副總裁兼財務長雪莉‧查德威克 (Shelly Chadwick)。我們今天的電話會議格式如下：Jugal 將提供有關本季的開場評論。繼 Jugal 之後，Shelly 將回顧本季的詳細財務業績，並討論我們對 2024 年下半年的預期。然後我們將開放提問。

Let me remind investors that any forward-looking statements made in the presentation, including those in the outlook section and during the question-and-answer portion are based on current expectations. The company's actual performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors. Those factors are listed in the earnings press release we issued yesterday afternoon.

讓我提醒投資者，簡報中所做的任何前瞻性陳述，包括展望部分和問答部分中的前瞻性陳述均基於當前預期。由於多種因素，公司的實際業績可能與前瞻性陳述預期的業績有重大差異。這些因素列在我們昨天下午發布的收益新聞稿中。

Additionally, comments regarding earnings before interest, taxes, depreciation, depletion and amortization, net income and earnings per share reflect the adjusted GAAP numbers shown in Attachments 428 in yesterday's press release. The adjustments are made in the prior year period for comparative purposes and remove special items, noncash charges and certain discrete income tax adjustments.

此外，有關息稅前利潤、折舊、消耗和攤銷、淨利潤和每股收益的評論反映了昨天新聞稿附件 428 中顯示的調整後的 GAAP 數據。這些調整是出於比較目的在上一年期間進行的，並刪除了特殊項目、非現金費用和某些離散所得稅調整。

And now I'll turn the call over to Jugal for his comments.

現在我將把電話轉給朱加爾徵求他的意見。

Thanks, Kyle, and welcome, everyone. It's nice to be with you today to discuss our record second quarter performance as well as our outlook for the second half of the year.

謝謝凱爾，歡迎大家。很高興今天與您一起討論我們創紀錄的第二季業績以及我們對下半年的展望。

After a challenging start to the year, I am pleased to share that Materion is back on track, delivering record results again in the second quarter. Top line improvements coming mainly from organic initiatives, combined with our focus on strong operational performance and cost management led to the highest quarterly EBITDA in the history of our company.

在經歷了今年充滿挑戰的開局之後，我很高興地告訴大家，Materion 已重回正軌，在第二季度再次取得創紀錄的業績。營收的改善主要來自有機舉措，再加上我們對強勁營運績效和成本管理的關注，導致我們公司歷史上最高的季度 EBITDA。

I'm especially proud of our team for achieving these strong results while continuing to secure several new business wins and customer partnerships that will seal the pipeline for long-term sustainable growth.

我對我們的團隊取得這些強勁成果感到特別自豪，同時繼續贏得多項新業務和客戶合作夥伴關係，這將為長期可持續成長奠定基礎。

Value-added sales were a second quarter record, up 4% year-over-year, largely driven by strength in aerospace and defense and consumer electronics, in addition to a gradual semiconductor rebound now starting to flow through to our order books. The operational challenges we faced in the first quarter have largely been mitigated, and we're seeing the impact of the targeted cost improvement initiatives, enhancing our bottom line as we outperformed our midterm margin target of 20% for the third time in the last 5 quarters.

第二季增值銷售額創歷史新高，年增 4%，這主要是由航空航太、國防和消費性電子產品的強勁推動，此外半導體的逐步反彈現已開始影響我們的訂單。我們在第一季面臨的營運挑戰已在很大程度上得到緩解，我們看到了有針對性的成本改進計劃的影響，提高了我們的利潤，因為我們在過去5 年中第三次超過了20 % 的中期利潤率目標宿舍。

While we're seeing softer demand across select markets, including industrial and automotive, the momentum we're building across other large markets like aerospace and defense, combined with our operational initiatives and targeted cost management continues to drive strong performance. With new partnerships and business wins in aerospace and defense, we are demonstrating once again the ability of our products and technologies to drive solutions for some of our customers' most demanding technical challenges.

雖然我們看到工業和汽車等特定市場的需求疲軟，但我們在航空航太和國防等其他大型市場建立的勢頭，加上我們的營運計劃和有針對性的成本管理，繼續推動強勁的業績。憑藉在航空航太和國防領域的新合作夥伴關係和業務勝利，我們再次證明我們的產品和技術有能力為客戶最苛刻的技術挑戰提供解決方案。

In aerospace and defense, our customers are developing new products and applications that require the highest level of performance reliability in the harshest conditions. The criticality of our materials to these applications is affirmed through rising demand for our products as well as customer investments to secure the supply of these key materials. I am pleased to announce that a leading aerospace and defense customer has agreed to invest approximately $10 million in new capacity and capabilities at one of our existing sites in support of their growing demand.

在航空航太和國防領域，我們的客戶正在開發新產品和應用，這些產品和應用在最惡劣的條件下需要最高水準的性能可靠性。我們的產品需求不斷增長，以及客戶為確保這些關鍵材料的供應而進行的投資，證實了我們的材料對這些應用的重要性。我很高興地宣布，一家領先的航空航太和國防客戶已同意在我們現有的一個工廠投資約 1000 萬美元用於新產能和能力，以滿足他們不斷增長的需求。

The growth of commercial space is driving new opportunities for us as Materion remains uniquely suited to serve the needs of this expanding market. Our reputation as an innovative and reliable supplier for highly visible space projects like the James Webb Space Telescope have paved the way for opportunities to support the next generation of applications.

商業空間的成長為我們帶來了新的機遇，因為 Materion 仍然能夠獨特地滿足這個不斷擴大的市場的需求。我們作為詹姆斯韋伯太空望遠鏡等高度可見的太空項目的創新和可靠供應商而享有盛譽，為支持下一代應用的機會鋪平了道路。

In the second quarter, we secured a $150 million multiyear agreement to supply critical materials for space propulsion systems. This announcement follows 4 previously announced orders over the past 18 months, further solidifying our position as a long-term key partner for this important customer.

第二季度，我們達成了一項價值 1.5 億美元的多年協議，為太空推進系統供應關鍵材料。此公告是在過去 18 個月內發布的 4 份訂單之後發布的，進一步鞏固了我們作為該重要客戶的長期關鍵合作夥伴的地位。

Defense continues to be a growing market for us as advances in technology drive new government initiatives and modernization programs around the world. So far this year, we've received approximately $60 million of new orders in this market with potential for significant upside in future years as these programs gain traction. The pace of incoming orders from defense is at roughly twice the pace we saw last year.

隨著技術進步推動世界各地新的政府舉措和現代化計劃，國防仍然是我們不斷增長的市場。今年到目前為止，我們已經在這個市場上收到了大約 6000 萬美元的新訂單，隨著這些計劃的普及，未來幾年我們將有可能出現顯著的增長。國防的訂單數量大約是去年的兩倍。

In the second quarter, semiconductor recovery drove single-digit increases in both sequential and year-over-year comparisons for VA sales, mostly driven by growth in logic and memory applications. Although the pace of recovery for semi is looking to be slower than anticipated, we expect to see growth in the second half as we're seeing a pickup in order rates for the remainder of the year.

第二季度，半導體復甦推動 VA 銷售額環比和同比均實現個位數成長，這主要是由邏輯和記憶體應用的成長所推動的。儘管半成品的復甦速度似乎慢於預期，但我們預計下半年會成長，因為我們看到今年剩餘時間的訂單率有所回升。

As the rebound occurs, we're expanding our capabilities to serve customers who are rapidly innovating to power advancements in support of rapid digitization and the shift towards artificial intelligence. The expansion of our portfolio to include ALD or Atomic Layer Deposition products is allowing us to support the production of the most sophisticated semiconductor products. This quarter, we were pleased to receive an overall excellent supplier award from a leading ALD customer. Our team has collaborated with this customer to innovate multiple ALD materials, which will see expansion, the rapid growth of AI and the increasing demand for the most complex chips.

隨著經濟反彈，我們正在擴大我們的能力，為那些快速創新的客戶提供服務，以推動技術進步，支援快速數位化和向人工智慧的轉變。我們的產品組合擴展到 ALD 或原子層沉積產品，使我們能夠支援最複雜的半導體產品的生產。本季度，我們很高興獲得一家領先的 ALD 客戶頒發的整體優秀供應商獎。我們的團隊與該客戶合作創新了多種 ALD 材料，這些材料將迎來擴展、人工智慧的快速增長以及對最複雜晶片的需求不斷增長。

Another source of meaningful growth from Materion has been the important Precision Clad Strip project that we started in 2020. Together with funding from the customer, we built a new state-of-the-art facility to produce higher volumes of product in support of the global rollout of their next-generation products.

Materion 有意義的成長的另一個來源是我們於 2020 年啟動的重要精密複合帶材專案。在客戶的資助下，我們建造了一座新的最先進的設施，以生產更多的產品，以支持其下一代產品的全球推出。

Today, we are pleased to be able to share that the customer who invested with us is Philip Morris International. Our Precision Clad Strip is used in PMI's heat-not-burn consumables for the IQOS ILUMA, a smoke-free product that heats tobacco instead of burning it. It is an alternative for adult smokers who would otherwise continue to smoke that is gaining popularity in Europe and Japan.

今天，我們很高興能夠告訴大家，與我們一起投資的客戶是菲利普莫里斯國際公司。我們的精密複合帶用於 PMI 的 IQOS ILUMA 加熱不燃燒耗材，IQOS ILUMA 是一種無菸產品，可加熱菸草而不是燃燒菸草。對於那些會繼續吸煙的成年吸煙者來說，這是一種替代方案，在歐洲和日本越來越受歡迎。

This business win has created a unique avenue to further diversify our portfolio, enabling us to continue to deliver strong performance even as some large markets have experienced softness in recent months. We are proud of our team's ability to work with the customer in support of this application to successfully ramp up a new production facility to meet the customers' needs.

這項業務勝利為我們的投資組合進一步多元化創造了獨特的途徑，使我們能夠在近幾個月一些大型市場經歷疲軟的情況下繼續提供強勁的業績。我們為我們的團隊能夠與客戶合作支援此應用程式、成功建立新的生產設施以滿足客戶的需求而感到自豪。

These many examples demonstrate the power of the Materion strategy, which is grounded in our team's ability to harness our advanced materials expertise to create solutions that enable our customers' breakthrough solutions. Our focus on our customers' needs across our diverse portfolio is helping us to navigate short-term headwinds across some end markets while also building our pipeline to ensure long-term organic outgrowth.

這些例子證明了 Materion 策略的力量，該策略的基礎是我們的團隊有能力利用我們先進的材料專業知識來創建解決方案，使我們的客戶能夠實現突破性的解決方案。我們對多元化產品組合中客戶需求的關注有助於我們應對一些終端市場的短期阻力，同時也建立我們的管道以確保長期有機成長。

With a laser focus on operational excellence and maintaining the benefits of the structural cost improvements we've put in place, we are positioning ourselves for strong earnings growth throughout the balance of the year. While we are taking down the top end of our guidance range to reflect a softer end market environment, we are well positioned to deliver another record year for Materion.

透過高度關注卓越營運並維持我們已實施的結構性成本改進的好處，我們將在今年餘下的時間裡實現強勁的獲利成長。雖然我們降低了指導範圍的上限以反映較疲軟的終端市場環境，但我們已做好充分準備，為 Materion 創造另一個創紀錄的年份。

Now let me turn the call over to Shelly to cover more details on the financials.

現在讓我把電話轉給雪莉，介紹更多有關財務的細節。

Thanks, Jugal, and good morning, everyone. During my comments, I will reference the slides posted on our website yesterday afternoon, starting on Slide 10.

謝謝朱加爾，大家早安。在我的評論中，我將參考昨天下午在我們網站上發布的幻燈片，從幻燈片 10 開始。

In the second quarter, value-added sales, which exclude the impact of pass-through precious metal costs, were a second quarter record at $279.8 million, up 4% from prior year. This increase was driven by continued strength in aerospace and defense, gradual improvement in semiconductor and growth in Precision Clad Strip, which we have now reclassified from other to consumer electronics given today's announcement.

第二季度，排除貴金屬轉嫁成本影響的加值銷售額創第二季紀錄，達 2.798 億美元，比去年同期成長 4%。這一增長是由航空航天和國防領域的持續強勁、半導體的逐步改進以及精密複合帶材的增長推動的，鑑於今天的公告，我們現已將其從其他產品重新分類為消費電子產品。

This year-over-year increase was slightly offset by weakness in the industrial, automotive and energy end markets. When looking at earnings per share, we delivered record Q2 adjusted earnings of $1.42 million, up 3% from prior year.

這一同比增長被工業、汽車和能源終端市場的疲軟略微抵消。在每股盈餘方面，我們第二季調整後盈餘創歷史新高，達到 142 萬美元，比去年同期成長 3%。

Moving to Slide 11. Adjusted EBITDA in the quarter was $57.8 million or 20.7% of value-added sales, up 4% from the prior year and a record for any quarter. As Jugal commented, we're very pleased to have once again delivered margins above our midterm target of 20%. This year-over-year increase was driven by higher volumes, improving operational performance and continued cost management. These drivers helped offset some weaker price mix.

轉到投影片 11。本季調整後 EBITDA 為 5,780 萬美元，佔增值銷售額的 20.7%，比上年增長 4%，創下任何季度的記錄。正如 Jugal 所說，我們很高興再次實現高於 20% 中期目標的利潤率。這一同比增長是由銷售增加、營運績效改善和持續成本管理所推動的。這些驅動因素幫助抵消了一些較弱的價格組合。

Moving to Slide 12. Let me now review second quarter performance by business segment. Starting with Performance Materials. Value-added sales were $173.1 million, up 4% compared to prior year. This year-over-year increase was driven largely by strength in aerospace and defense and consumer electronics, partially offset by weakness in the industrial, automotive and energy end markets.

轉到投影片 12。現在讓我按業務部門回顧第二季的業績。從高性能材料開始。增值銷售額為 1.731 億美元，比上年增長 4%。這一同比增長主要是由航空航太、國防和消費性電子產品的強勁推動，部分被工業、汽車和能源終端市場的疲軟所抵消。

EBITDA, excluding special items, was $43.1 million or 24.9% of value-added sales, down 6% compared to the prior year period. This decrease was driven largely by unfavorable price mix, the carry forward impact of the Q1 operational challenges and a lower recorded benefit from the manufacturers' production credit, continued strong cost management partially offset the decrease.

扣除特殊項目的 EBITDA 為 4,310 萬美元，佔增值銷售額的 24.9%，比去年同期下降 6%。這一下降主要是由於不利的價格組合、第一季營運挑戰的結轉影響以及製造商生產信貸的記錄效益較低，持續強勁的成本管理部分抵消了下降。

Moving to the outlook. We expect aerospace and defense to remain strong throughout the balance of 2024 with a slightly weaker outlook across the industrial and automotive end markets and the impact of the previously discussed second half inventory correction for Precision Clad Strip. We also expect strong operational performance as we move past the impact of the Q1 operational challenges.

轉向展望。我們預計航空航太和國防產業將在 2024 年餘下時間保持強勁，而工業和汽車終端市場的前景略有減弱，以及先前討論的精密複合帶材下半年庫存調整的影響。隨著我們克服第一季營運挑戰的影響，我們也預計會有強勁的營運表現。

Next, turning to Electronic Materials on Slide 13. Value-added sales were $81.1 million, up 5% year-on-year and sequentially, driven by the gradual semiconductor market recovery. The energy market remains suppressed with smart glass sales down due to softness in the non-residential construction market.

接下來，轉向投影片 13 上的電子材料。在半導體市場逐步復甦的推動下，增值銷售額為 8,110 萬美元，年增 5%，季增 5%。由於非住宅建築市場疲軟，智慧玻璃銷售下降，能源市場仍受到抑制。

EBITDA, excluding special items, was $17.1 million or 21.1% of value-added sales in the quarter, delivering the highest margin profile since the second quarter of 2022. This increase was driven by higher volume and the impact of the cost improvement initiatives, both of which are strong contributors to the 230 basis points of margin expansion year-on-year and 240 basis points sequentially. As we look out to the rest of the year, we expect the semiconductor market recovery to continue, but at a slower pace than previously expected.

不包括特殊項目的 EBITDA 為 1,710 萬美元，佔本季增值銷售額的 21.1%，實現 2022 年第二季以來的最高利潤率。這一增長是由銷量增加和成本改善舉措的影響推動的，兩者都是利潤率同比增長 230 個基點和環比增長 240 個基點的重要貢獻者。展望今年剩餘時間，我們預期半導體市場復甦將持續，但速度將慢於先前的預期。

Turning to the Precision Optics segment on Slide 14. Value-added sales were $25.6 million, up 2% compared to the prior year. This increase was driven by market strength in aerospace, life sciences and consumer electronics, slightly offset by some defense order timing. EBITDA, excluding special items was $2.1 million or 8.2% of value-added sales. This decrease year-over-year was largely driven by operational challenges combined with an unfavorable mix.

前往幻燈片 14 上的精密光學部分。增值銷售額為 2,560 萬美元，較上年成長 2%。這一成長是由航空航天、生命科學和消費性電子產品的市場強勁推動的，但被一些國防訂單時間略有抵消。扣除特殊項目的 EBITDA 為 210 萬美元，佔增值銷售額的 8.2%。年比下降的主要原因是營運挑戰和不利的組合。

Despite the year-over-year decline, this business saw sequential improvement driven by higher volume and strong cost management. Looking out to the second half of 2024, we expect a step-up in margin performance as we improve operational performance and continue to drive targeted cost improvement initiatives across the business.

儘管同比下降，但在銷量增加和強大的成本管理的推動下，該業務實現了環比改善。展望 2024 年下半年，隨著我們改善營運績效並繼續推動整個業務有針對性的成本改進計劃，我們預計利潤率將有所提升。

Moving now to cash, debt and liquidity on Slide 15. We ended the quarter with a net debt position of approximately $468 million and approximately $106 million of available capacity on the company's existing credit facility. Our leverage at 2.2x remains just slightly below the midpoint of our target range. We expect to generate strong cash flow in the back half of the year, bringing our leverage below 2x by year-end.

現在轉向幻燈片 15 上的現金、債務和流動性。截至本季末，我們的淨債務部位約為 4.68 億美元，公司現有信貸額度的可用能力約為 1.06 億美元。我們的槓桿率為 2.2 倍，仍略低於我們目標範圍的中點。我們預計下半年將產生強勁的現金流，到年底我們的槓桿率將降至 2 倍以下。

Lastly, let me transition to Slide 16 and address the full year outlook. Since the first quarter earnings call, the outlook for semiconductor, automotive and industrial end market has softened. Despite the lower end market demand, we remain confident in our ability to execute and deliver another year of record results by delivering on our organic initiatives and continuing to drive operational and cost improvements throughout the company. With the softer end market demand in mind, we are lowering the top end of our guide, revising our range from $5.60 to $5.90 for the full year adjusted earnings per share, an increase of 2% from prior year at the midpoint.

最後，讓我轉到幻燈片 16 並談談全年展望。自第一季財報電話會議以來，半導體、汽車和工業終端市場的前景已經疲軟。儘管低端市場需求較低，但我們仍然對透過實施我們的有機計劃並繼續推動整個公司的營運和成本改進來執行和交付又一年創紀錄業績的能力充滿信心。考慮到終端市場需求疲軟，我們降低了指導上限，將全年調整後每股收益範圍從 5.60 美元修改為 5.90 美元，較上年中位數增長 2%。

This concludes our prepared remarks. We will now open the line for questions.

我們準備好的演講到此結束。我們現在將開通提問熱線。

Thank you. (Operator Instructions)

謝謝。（操作員說明）

Daniel Moore, CJS Securities.

丹尼爾·摩爾，CJS 證券。

Thank you. Good morning Jugal. Good morning Shelly.I appreciate the color.

謝謝。早上好，朱加爾。早安，雪莉。

Good morning, Dan.

早上好，丹。

Good morning.

早安.

Maybe just give you the opportunity to kind of elaborate on what you're seeing in the marketplace, looking at the balance of the year, just talk about any more color on the recovery in semi slightly slower than expected, not a surprise given what we've seen there. But any meaningful change in the outlook for kind of memory versus logic and where you're seeing that recovery maybe push out to the right a bit?

也許只是給你機會詳細說明你在市場上看到的情況，看看今年的平衡情況，只是談論半成品復甦的任何更多色彩，稍微慢於預期，考慮到我們的情況，這並不奇怪在那裡見過。但是，記憶與邏輯的前景是否有任何有意義的變化，以及您認為復甦可能會向右推一點？

Yeah. Dan, the markets have certainly been choppy, as you know. And we talked about the semi business in our last call, and we indicated that we expected Q1 to be the low point with some recovery into Q2 and then a little bit more incremental in Q3 and then a little bit more of a step-up in Q4.

是的。丹，正如你所知，市場確實波動很大。我們在上次電話會議中談到了半成品業務，我們表示，我們預計第一季將是低點，第二季將有所復甦，然後第三季會出現更多增量，然後第二季會出現更多增量Q4。

I would say the general trend is still there, and that's what we are seeing with our order rates. Clearly, it's led by the logic and memory devices, and we're hearing about it from all the semi customers, as well as, I think, just in the marketplace. But I would say the pace of recovery is probably a bit muted from the time that we spoke one quarter. So, we still expect the recovery just a bit less, I think, and going into Q3 and Q4. And that's how we've sort of revised our thinking and the guide change from the top end that we made.

我想說整體趨勢仍然存在，這就是我們在訂單率中看到的情況。顯然，它是由邏輯和儲存設備主導的，我們從所有半導體客戶以及我認為只是在市場上聽到了它。但我想說，自從我們談論一個季度以來，復甦的步伐可能有點緩慢。因此，我認為，我們仍然預計第三季和第四季的復甦會稍微少一些。這就是我們如何修改我們的想法以及我們所做的高端指南的變更。

When you look at the other markets, industrial continues to be challenged, housing starts, non-res construction continues to be challenged. So the recovery on industrial, I would say, is a bit slower than what we had anticipated. Automotive production has been revised. In fact, if you look at the latest IHS data, it indicates about a 2% down from the beginning of the year.

當你看看其他市場時，工業繼續受到挑戰，住房開工、非資源建設繼續受到挑戰。因此，我想說，工業的復甦比我們的預期慢一些。汽車產量已修訂。事實上，如果你看一下最新的 IHS 數據，你會發現比年初下降了約 2%。

Europe is expected to be-- and we have a lot of business with European automakers expected to be down 6% now year-over-year versus the 2% that I think it was at the beginning of the year. The rig count continues to be challenged. In fact, less than 800 is the number for the rig count. It continues to be challenged there.

歐洲預計將——我們與歐洲汽車製造商的大量業務預計將同比下降 6%，而我認為今年年初的下降幅度為 2%。鑽機數量持續受到挑戰。事實上，鑽機數量還不到800台。它在那裡繼續受到挑戰。

What's exciting for us is, I think, the number of new initiatives our team has been able to drive to help offset many of these choppy conditions, and I would say, really tough conditions in some of the markets. When you look at the work our team has done on space, the number of initiatives that they've been able to do, we announced it today, as you know, a large order for that. The number of initiatives on the defense side with the opportunities and organic opportunities there.

我認為，令我們興奮的是，我們的團隊已經能夠推動許多新舉措，以幫助抵消許多這些不穩定的條件，我想說的是，某些市場的條件確實很艱難。當你看到我們的團隊在太空方面所做的工作以及他們能夠執行的舉措數量時，我們今天宣布了這一點，正如你所知，這是一個大訂單。防守方的主動行動數量以及那裡的機會和有機機會。

And then even in the other markets, the number of organic initiatives that I think our teams have continued to drive to help offset, I mean, delivering a 4% year-over-year growth here in Q2. And then I would expect that we will continue to have growth going into Q3 and Q4 on a combined company basis. So certainly, a choppy situation right now, I think, in the market, but very pleased with the level of effort and results our team is doing on a number of fronts organically to help offset.

即使在其他市場，我認為我們的團隊繼續推動的有機舉措數量也有助於抵消，我的意思是，第二季度實現了 4% 的同比增長。然後我預計我們將在合併後的公司基礎上繼續實現第三季和第四季的成長。當然，我認為，目前市場形勢動盪不安，但我們的團隊在許多方面為幫助抵消影響而付出的努力和取得的成果非常滿意。

Helpful. I missed the first couple of minutes prepared remarks, so I apologize, but I wonder if you could give a little bit more detail on the new Precision Clad Strip project could that lead to more additional customer opportunities, may be size, the scale of sort of the opportunity set and what, if any, CapEx might be needed to set up a facility. It sounds like you'd be setting up a dedicated facility, if I'm not mistaken. So any color on that opportunity would be really interesting and helpful.

有幫助。我錯過了前幾分鐘準備好的發言，所以我很抱歉，但我想知道您是否可以提供有關新精密複合帶材項目的更多詳細信息，這是否會帶來更多額外的客戶機會，可能是尺寸、規模等機會集以及建立設施可能需要的資本支出（如果有）。如果我沒記錯的話，聽起來你會建立一個專門的設施。因此，這個機會的任何顏色都會非常有趣且有幫助。

Yeah. So on Precision Clad, I mean, as we have spoken over many quarters now, we've been in the Precision Clad business for a number of years. We've supported various markets. I go back to the 2020-time frame when we announced that we had a customer that wanted to work with us to buy a lot more of the Precision Clad than what we were capacities to do.

是的。因此，關於 Precision Clad，我的意思是，正如我們在許多季度中所說的那樣，我們已經從事 Precision Clad 業務很多年了。我們支持各種市場。我回到 2020 年的時間框架，當時我們宣布有一位客戶希望與我們合作購買比我們能力更多的 Precision Clad。

We worked with a customer to put a facility in place and that facility today, we're mentioning is in Reading, Pennsylvania area, Leesport, Pennsylvania, we put that facility in place in combination with the customer as they invested roughly about $120 million to help fund that facility.

我們與客戶合作建立了一個設施，今天我們提到的設施位於賓夕法尼亞州 Leesport 的雷丁地區，我們與客戶一起將該設施建立到位，因為他們投資了大約 1.2 億美元來幫助資助該設施。

We're very pleased to work with them. And I think it's been a fantastic relationship. And today, we announced that, that customer is Philip Morris International, who is using our product and their IQOS ILUMA product. So I would ask you, and of course, others to look at that information. It's a product that's gaining popularity in Europe and Japan, and they continue to do a global rollout.

我們非常高興與他們合作。我認為這是一種非常棒的關係。今天，我們宣布該客戶是菲利普莫里斯國際公司，他正在使用我們的產品和他們的 IQOS ILUMA 產品。所以我會請你，當然還有其他人查看這些資訊。該產品在歐洲和日本越來越受歡迎，並且繼續在全球推廣。

Now with that said, we are always working on this particular product segment and trying to gain more customers in automotive segment and consumer electronics and clean energy and others. So we have a number of new initiatives that we continue to work on.

話雖如此，我們一直致力於這個特定的產品領域，並努力在汽車領域、消費性電子產品和清潔能源等領域贏得更多客戶。因此，我們有許多新措施正在繼續努力。

On Precision Clad. I mean we're one of very few, I would say, a really capable Precision Clad Strip suppliers in the world. So we continue to do that, and we will. We will continue to pursue other customers. And if additional capacity is needed, we'll put additional capacity in either in the Leesport facility, which is the new facility or our existing facility, where we have been doing Precision Clad for many years prior to this new project that's come on board.

在精密覆層上。我想說的是，我們是世界上極少數真正有能力的精密複合帶材供應商。所以我們會繼續這樣做，而且我們會這樣做。我們將繼續爭取其他客戶。如果需要額外的產能，我們將在 Leesport 工廠（新工廠）或我們現有的工廠（在這個新項目上線之前，我們已經在現有工廠進行 Precision Clad 多年）增加產能。

Excellent. Look forward to hearing more. And lastly, maybe just Shelly, with 2 quarters remaining, I appreciate the update on guide. Any sense of the cadence of revised profitability guidance. Q4 historically is your strongest quarter? Is that how you see this year shaping up as well?

出色的。期待聽到更多。最後，也許只有雪莉，還剩兩個季度，我很欣賞指南的更新。對修訂獲利指引的節奏有任何感覺。第四季是史上最強勁的季度嗎？您認為今年的情況也是如此嗎？

Yeah. That is how we see it. We expect that Q3, from a profitability perspective, is probably going to look a lot like Q3 of last year. We do expect some of the markets where we've seen some inventory correction to start to come back. Jugal mentioned the non-res construction. We think that sprinkler business will start to see some orders there in Q3. Automotive, we've seen maybe an overcorrection there. We expect that business to start to come back in the back half.

是的。我們就是這樣看的。我們預計，從獲利角度來看，第三季可能會與去年第三季非常相似。我們確實預計一些庫存調整的市場將開始回升。Jugal提到了非res建設。我們認為噴水滅火業務將在第三季開始看到一些訂單。在汽車領域，我們可能看到了過度修正。我們預計該業務將在下半年開始復甦。

So we'll move past the impact of the operational challenges we saw in Q1, starting in Q3. And we do expect the volumes to be up even higher in Q4. So you will see the strongest quarter of the year being Q4 and really by a meaningful step with the combination of kind of the higher volume, the better operational performance and then that normal sort of seasonality we sometimes see with markets like defense.

因此，我們將從第三季開始克服第一季看到的營運挑戰的影響。我們確實預計第四季的銷量會更高。因此，你會看到今年最強勁的季度是第四季度，這實際上是一個有意義的一步，結合了更高的交易量、更好的營運績效以及我們有時在國防等市場看到的正常季節性。

Thank you.

謝謝。

Mike Harrison, Seaport Research Partners.

麥克·哈里森，海港研究夥伴。

Hi, good morning.

嗨，早安。

Good morning.

早安.

Good morning, Mike.

早上好，麥克。

I was hoping that we could talk a little bit more about the operational issues that impacted Q1, and it sounds like maybe there was still some lingering impact in both Performance Materials and Precision Optics in the second quarter. Any help you can provide on quantifying the impact of those 2 segments in Q2 would be appreciated. And then I guess I just want to understand do you guys feel like those operational issues are completely resolved in both segments at this point? Or could there be some further headwinds as we look into the second half?

我希望我們能夠更多地討論影響第一季的營運問題，聽起來第二季度高性能材料和精密光學可能仍然存在一些揮之不去的影響。如果您能在量化第二季這兩個細分市場的影響方面提供任何幫助，我們將不勝感激。然後我想我只是想了解你們是否覺得這些營運問題在這一點上已經在這兩個領域完全解決了？或者，當我們展望下半年時，是否還會出現一些進一步的阻力？

Yeah, I'll start with that one, Mike. So in Performance Materials is where we saw the main operational issues. And as you know, a big part of that business is vertically integrated. And so, to see operational challenges work through that system takes a little bit of time. We are seeing marked improvement there. So I don't think we have concerns over the operations in Performance Materials. Where you see some of that impact still coming through in Q2 is really normal amortization of variances.

是的，我將從那個開始，麥克。因此，在高性能材料中，我們看到了主要的營運問題。如您所知，該業務的很大一部分是垂直整合的。因此，要看到該系統解決營運挑戰需要一點時間。我們看到那裡有顯著的改善。因此，我認為我們並不擔心高性能材料業務的運作。您會看到第二季度仍然存在一些影響，這實際上是正常的方差攤銷。

On the optics side, we did see some continued operational challenge in Q2. But the team thinks they really got that figured out and expect better performance in Q3 and for the back half of the year.

在光學方面，我們確實在第二季度看到了一些持續的營運挑戰。但球隊認為他們確實已經弄清楚了這一點，並期望在第三季和今年下半年有更好的表現。

All right. And then just in terms of the Philip Morris application, any further update on their rollout plans and how their inventory management is going to impact volumes and also the Phase II start-up in the second half? Just trying to get a better sense of how we should think about the volume and the earnings headwind from PMI in the Performance Materials segment as we're comparing the second half to what you guys did last year?

好的。然後就菲利普莫里斯公司的申請而言，他們的推出計劃以及他們的庫存管理將如何影響下半年的銷售和第二階段啟動有任何進一步的更新嗎？當我們將下半年與你們去年的表現進行比較時，只是想更好地了解我們應該如何看待高性能材料領域 PMI 的銷量和盈利逆風？

Yeah. So Mike, as we indicated, I think, in the last call that second half of the year, we expected inventory correction based on the inventory management things that the customer is going through. And I would say it's in line with what we reviewed last time. So really no change from our assumptions on that inventory correction and management in the back half of the year. Yes, same as our commentary, I think from a quarter ago.

是的。因此，麥克，正如我們所指出的，我認為，在今年下半年的最後一次電話會議中，我們預計根據客戶正在經歷的庫存管理事情進行庫存修正。我想說這與我們上次評論的內容一致。因此，我們對下半年庫存調整和管理的假設確實沒有改變。是的，與我們的評論相同，我想是從一個季度前開始的。

As we look at our Phase II, of course, we've been working on Phase II and our team has done a tremendous job of getting -- continuing to make progress on getting the equipment qualified. We've indicated that, that equipment would be ready really at the beginning of the year, and we would expect to start using it and start to ramp that into the '25 time frame.

當然，當我們看到第二階段時，我們一直在致力於第二階段，我們的團隊已經做了巨大的工作，繼續在設備合格方面取得進展。我們已經表示，該設備將在今年年初真正準備就緒，我們預計將開始使用它，並開始在 25 年的時間範圍內開始使用。

Of course, we will work with the customer on the level of volumes that they expect. So it's one thing to, of course, have the capacity for Phase 1 and Phase 2, and it's important that we can do that. And then in terms of the actual orders and deliveries, those we will just continue to work with the customer on what level of inventory correction do they want to continue to work through or new orders that they want to place, what level of new orders that they want to place, and I would expect that to continue to then get ramped over time.

當然，我們將按照客戶期望的數量水準與客戶合作。因此，擁有第一階段和第二階段的能力當然是一回事，而且我們能夠做到這一點很重要。然後就實際訂單和交付而言，我們將繼續與客戶合作，了解他們希望繼續進行什麼級別的庫存調整或他們想要下的新訂單，需要什麼級別的新訂單。種情況會隨著時間的推移而持續增加。

So I think we're very well positioned to be able to support the customer as they continue to move forward on the global rollout. And just like we have, I mean, we'll follow the lead on the order patterns and requirements that they have as we get closer to the end of this year and have a better understanding of the requirements for next year.

因此，我認為我們處於非常有利的位置，能夠在客戶繼續推進全球推廣的過程中為他們提供支援。就像我們一樣，我的意思是，當我們接近今年年底時，我們將遵循他們的訂單模式和要求，並對明年的要求有更好的了解。

All right. And then on Electronic Materials, the gross margin number has moved around a little bit in the past several quarters, kind of anywhere from the mid-20s to the mid-30s Q2 was 33.5%. And as you noted, kind of a higher watermark for overall EBITDA margin for that segment.

好的。然後在電子材料方面，毛利率數字在過去幾季中略有波動，從 1920 年代中期到 1930 年代中期，第二季為 33.5%。正如您所指出的，該細分市場的整體 EBITDA 利潤率較高。

Do you see that 33% or 34% gross margin level at a sustainable level that maybe you can build on as volumes recover? Or should we think about maybe some mix factors or any other factors that could maybe lead gross margin to be a little bit softer in Electronic Materials over time.

您認為 33% 或 34% 的毛利率水準是否處於可持續水平，隨著銷量的恢復，您是否可以在此基礎上繼續發展？或者我們是否應該考慮一些混合因素或任何其他因素，這些因素可能會導致電子材料的毛利率隨著時間的推移而稍微疲軟。

Yeah. No, great question. And we're really proud of the work that the team has done in Electronic Materials to kind of rightsize their cost structure, while they've had some softer volumes, it's given them a chance to really focus on operations and make sure that we've got the right organizational setup there.

是的。不，很好的問題。我們對團隊在電子材料領域所做的工作感到非常自豪，他們在某種程度上調整了他們的成本結構，雖然他們的銷量有所下降，但這讓他們有機會真正專注於運營並確保我們“那裡有正確的組織設置。

That really has helped prop up gross margins as we kind of move through the downturn, and now we're starting to see things pick back up slightly. There is a mix impact within EM based on their product mix and whatnot. But we do think that the progress we've seen should be sustainable as the volumes start to come back and that, that will be great for our bottom-line margins going forward.

當我們走出低迷時期時，這確實有助於支撐毛利率，現在我們開始看到情況略有回升。新興市場內部存在基於其產品組合等的混合影響。但我們確實認為，隨著銷量開始回升，我們所看到的進展應該是可持續的，這對我們未來的利潤率來說將是巨大的。

Thank you. (Operator Instructions)

謝謝。（操作員說明）

David Silver, CL King.

大衛·西爾弗，CL·金。

Yeah. Hi, good morning. Thank you.

是的。嗨，早安。謝謝。

Good morning.

早安.

Good morning.

早安.

Good morning, happy tuesday. I'm going to preface my remarks by stipulating. I've been jumping around amongst 3 calls. So my apologies if I'm making you repeat yourself.

早安，週二快樂。我將透過規定來作為我的發言的序言。我一直在 3 通電話之間跳來跳去。如果我讓你重複一遍的話，我深感抱歉。

The first place I'd like to start would be with the new $150 million contract for Critical Materials for space propulsion. I've been following your company for a few years, and I really don't recall a new piece of business of that scale. So correct me if I'm wrong or whatnot. But how long has it been since there was an order of that size that you've disclosed?

我想先從價值 1.5 億美元的太空推進關鍵材料新合約開始。我關注你們公司好幾年了，我真的不記得有這麼規模的新業務。所以如果我錯了或什麼的請糾正我。但自從您披露如此規模的訂單以來，已經有多久了？

Yeah. I think, David, first of all, I'm very pleased with the work that the team has done. This is our fifth order actually with this customer. We've announced 4 orders with this customer more of, I would say, smaller chunks of orders. This order here is a multiyear contract now. What we had been announcing is almost in a way, you could say almost kind of like spot orders where we get an order for one or 2 quarters, and we supply. This gives us, I think, a multiyear long-term sustainable revenue stream with the customer, and we're very, very pleased with that.

是的。大衛，我想，首先，我對團隊所做的工作感到非常滿意。實際上，這是我們與該客戶的第五份訂單。我們已經宣布了與該客戶的 4 個訂單，我想說的是，更多的是較小的訂單。這裡的訂單現在是一份多年期合約。我們所宣布的幾乎在某種程度上，你可以說幾乎有點像現貨訂單，我們收到一兩個季度的訂單，然後我們供應。我認為，這為我們與客戶提供了多年的長期可持續收入來源，我們對此非常非常滿意。

When you put the other 4 orders that we have announced along with this one, it's in the neighborhood of around $220 million of business between the last 18 months and then, of course, the go-forward $150 million contract that we announced today. Very pleased with that with I think the work our team has done.

當你把我們宣布的其他 4 個訂單與這個訂單放在一起時，過去 18 個月之間的業務量約為 2.2 億美元，當然還有我們今天宣布的 1.5 億美元的遠期合約。我對我們團隊所做的工作感到非常滿意。

With regard to the size of the orders, obviously, you know about the Precision Clad program, which today, we announced as the PMI International program. And that, of course, has been a very large, meaningful business for us, and we're very, very pleased with how that turned out. But in addition to that, certainly, the space contract is one that is a very meaningful program for us. So these types of businesses, for us, I think we're doing everything we can to make sure that we're getting larger, more sustainable type of contracts. So we can have a little more surety in our revenue stream, and I hope that we can continue to do that.

關於訂單規模，顯然，您知道 Precision Clad 計劃，今天我們宣布該計劃為 PMI 國際計劃。當然，這對我們來說是一項非常龐大、有意義的業務，我們對結果非常非常滿意。但除此之外，當然，太空合約對我們來說是一個非常有意義的項目。因此，對我們來說，這些類型的企業，我認為我們正在盡一切努力確保我們獲得更大、更永續的合約類型。這樣我們就可以對我們的收入來源有更多的確定性，我希望我們能夠繼續這樣做。

Okay. And then maybe just a quick follow-up on that. But should I assume that this large order compared to, I think you said the 4 other smaller ones, is it essentially the same? In other words, they're asking for maybe more material or they're willing to commit for a longer period. But your role or the company's role hasn't really changed much? Or is this -- does this represent maybe, I don't know, an evolution where the current contract encompasses some additional, I don't know, either cross-selling or bundling or technology included.

好的。然後也許只是對此進行快速跟進。但我是否應該假設這個大訂單與您所說的其他 4 個較小的訂單相比，本質上是相同的嗎？換句話說，他們可能會要求更多的材料，或者他們願意承諾更長的時間。但你的角色或公司的角色並沒有太大的改變？或者是——我不知道，這是否代表著一種演變，當前的合約包含了一些額外的，我不知道的，要么是交叉銷售，要么是捆綁銷售，要么是技術。

So first order to the fifth order. Is there kind of a development or an evolution in your role there? Or is it -- should I think of it as just a larger version of the previous four orders?

所以第一階到第五階。你在那裡的角色有什麼發展或演變嗎？或者我應該將其視為前四個訂單的放大版本嗎？

Yeah. Well, first of all, I mean, we've been a great, I think, partner, I hope with this customer and the customer, I think, has confidence in us, and that's why they are reaching out and wanting to work with us and now on a multiyear program.

是的。嗯，首先，我的意思是，我認為我們是一個偉大的合作夥伴，我希望與這個客戶和客戶對我們有信心，這就是為什麼他們伸出援手並希望與我們合作我們現在正在進行一個多年期計劃。

It is essentially, like you said, the same product that we've been supplying in the prior 4 orders. It's a matter of just really cementing our relationship with them on a more longer-term basis so that we're not looking at on a more spot order, order-by-order type of situation. It allows us to do, of course, much better planning, make sure we have the right capacity, capability, workforce and then continue to drive improvements, operational improvements, efficiency improvements so that we're able to provide them with a better product and better value, frankly, over time. So I think this is just, again, a great testament to the relationship that our teams have developed with the customer.

正如您所說，它本質上與我們在前 4 個訂單中供應的產品相同。問題是要在更長期的基礎上真正鞏固我們與他們的關係，這樣我們就不會看到更多的現貨訂單、逐個訂單的情況。當然，它使我們能夠做更好的規劃，確保我們擁有合適的能力、能力和勞動力，然後繼續推動改進、運營改進、效率提高，以便我們能夠為他們提供更好的產品和坦率地說，隨著時間的推移，價值會更高。因此，我認為這再次證明了我們的團隊與客戶建立的關係。

Got it. Thank you for that. I'd like to switch over to Electronic Materials for 1 or 2. But I was happy to see that despite the -- as you put it, a slower than anticipated pace of recovery in that area. The revenues grew both year-over-year and sequentially as did the operating income, and there's been a lot of margin improvement over that time as well.

知道了。謝謝你。我想轉學到電子材料 1 或 2。但我很高興看到，儘管正如你所說，該領域的復甦速度比預期慢。收入同比和環比增長，營業收入也增長，並且在此期間利潤率也有了很大的提高。

I'm thinking about your expansion projects that are underway at Newton and Milwaukee. Has the timing of when those projects would be completed and enter start-up. Has the timing of that changed with the change in your thinking about the pace of end market recovery in that area? Or is it the case where the customers that you had envisioned to be the major off takers for that new capacity? Are they lined up? Or should we push back maybe the start-up or the contribution from those investments a little bit further in to the right, I guess, as someone else said.

我正在考慮牛頓和密爾瓦基正在進行的擴建項目。確定這些項目何時完成並啟動。隨著您對該領域終端市場復甦步伐的看法的變化，時間安排是否也改變了？或者您所設想的客戶是否是新產能的主要承購商？他們在排隊嗎？或者，我想，正如其他人所說，我們是否應該將新創公司或這些投資的貢獻向後推一點。

No, I think in general, as we've talked about in earlier quarters, I mean, those projects, I think, are on track. And in fact, as we have indicated in earlier discussions, the bit of a slowdown in the semiconductor market actually give us an opportunity to put those projects in place in a more efficient and more meaningful way.

不，我認為總的來說，正如我們在前幾季所討論的那樣，我的意思是，我認為這些項目正在步入正軌。事實上，正如我們在先前的討論中所指出的，半導體市場的放緩實際上讓我們有機會以更有效率、更有意義的方式實施這些專案。

As you know, when the market was at its peak, I mean, we hardly had a time to get other things done. So I think it's allowed us to put those projects in place. I would say, by and large, I mean, the projects are on track. I think as the market recovers, which we've kind of indicated perhaps a little bit more of a recovery in Q4 and then into '25, I think we'll be well positioned to take advantage of those projects.

如您所知，當市場處於頂峰時，我的意思是，我們幾乎沒有時間完成其他事情。所以我認為這使我們能夠將這些項目落實到位。我想說，總的來說，我的意思是，這些項目正在步入正軌。我認為，隨著市場的復甦，我們已經表明，第四季度可能會出現更多復甦，然後進入 25 年，我認為我們將處於有利地位，可以利用這些項目。

In Milwaukee, as you highlighted, I mean, we mentioned it in the call earlier today, but I'm very pleased with the supplier award, the recognition from a leading ALD customer, which is exactly the type of capacity that, that new facility is having. So I think as ALD continues to grow we are well positioned to be able to do that. And the fact that our team has developed a great relationship to receive this award, I think, is again a testament of the work.

在密爾瓦基，正如您所強調的，我的意思是，我們在今天早些時候的電話會議中提到了這一點，但我對供應商獎項感到非常滿意，這是一家領先的ALD 客戶的認可，這正是該新設施的產能類型正在擁有。因此，我認為隨著 ALD 的不斷發展，我們完全有能力做到這一點。我認為，我們的團隊已經建立了良好的關係來獲得這個獎項，這一事實再次證明了我們的工作。

And when you look at our Newton facility and the additional projects that we have going on there, that really serves the logic and memory market is the main market that area serves for the semiconductor side. And that area is the one that has started the recovery. So we would expect that the recovery will continue and then into '25 so that the projects we have would be adding value to that ramp-up.

當你看到我們的牛頓工廠以及我們在那裡正在進行的其他項目時，你會發現真正服務於邏輯和記憶體市場的是該領域服務於半導體方面的主要市場。該地區是已經開始復甦的地區。因此，我們預計復甦將持續到 25 年，以便我們擁有的項目將為這一增長增加價值。

Okay. Great. Maybe just a question for Shelly, I guess, on capital expenditures. But when I looked at the relevant slide in the deck here, and I'm sorry, I'm fiddling with it here. I think it might be 16, sorry. But I was just wondering, has the total CapEx spend moved down a little bit in the last 90 days or so? And if so, or if there's been a shift in the emphasis there, I mean, what has changed, I guess, in your CapEx projections for the current year? And I guess that feeds in a little bit to what I was asking Jugal, about maybe the timing of the Electronic Materials programs.

好的。偉大的。我想，也許這只是雪莉的一個關於資本支出的問題。但是當我在這裡查看幻燈片中的相關幻燈片時，我很抱歉，我在這裡擺弄它。我想可能是16，抱歉。但我只是想知道，在過去 90 天左右的時間裡，總資本支出是否有下降？如果是這樣，或者如果重點發生了變化，我的意思是，我猜您今年的資本支出預測發生了什麼變化？我想這有點符合我向 Jugal 詢問的問題，也許是關於電子材料專案的時間安排。

Yeah. Good question. So it is down a little bit, but I would say it's probably 2 different factors. I mean, one, of course, as the CFO, I'm very focused on cash generation and making sure that we're being prudent with our debt paydown while we're investing for growth. So we have not delayed any growth-related projects. The other side of that is a specific piece that we're working on in Performance Materials, which you used to see on this page, extrusion press. That's just been pushed out a quarter or 2 while we're doing more engineering to get ready for that. So that's another piece of kind of the tick down.

是的。好問題。所以它下降了一點，但我想說這可能是兩個不同的因素。我的意思是，當然，作為首席財務官，我非常關注現金生成，並確保我們在投資成長的同時謹慎償還債務。所以我們沒有推遲任何與成長相關的項目。另一方面是我們在高性能材料領域正在研究的一個特定部分，您曾經在本頁上看到過，即擠壓機。這只是被推遲了一兩個季度，而我們正在做更多的工程來為此做好準備。所以這是另一種下降。

Okay. Very good. Thank you for that. And I guess the last question would be one about, I guess, the Q1 to Q2 margin progression. I mean, to me, that was one of the more eye-catching developments, I guess, in your quarterly release. And I'm just wondering if in addressing the issues that led to the inefficiencies in the first quarter.

好的。非常好。謝謝你。我想最後一個問題是關於第一季到第二季的利潤率進展。我的意思是，對我來說，我想這是你們季度發布中最引人注目的進展之一。我只是想知道是否解決了導致第一季效率低下的問題。

First of all, congratulations for kind of addressing that so quickly. But I'm just wondering, I mean, to have your thoughts about the target level, 20%, I guess, was your intermediate level, you've exceeded that a few times now. I mean, should we be thinking that there's going to be some upside to that midterm target that you seem to have reached ahead of schedule?

首先，恭喜您如此迅速地解決了這個問題。但我只是想知道，我的意思是，想知道您對目標水平的看法，我想，20% 是您的中間水平，您現在已經超過了幾次。我的意思是，我們是否應該認為您似乎已經提前實現的中期目標會有一些上升空間？

Well, first of all, thanks for recognizing that, and we'll definitely pass that on to the team for, I think, the great work that they did in the first quarter to kind of help recover and then get us back on track here in the second quarter with record results, the highest EBITDA level of any quarter that we've had. So we'll definitely pass that on.

好吧，首先，感謝您認識到這一點，我認為我們肯定會將其傳遞給團隊，因為他們在第一季度所做的出色工作有助於恢復，然後讓我們回到正軌第二季度的業績創歷史新高，是我們有史以來最高的EBITDA 水準。所以我們一定會傳承下去。

This is the third quarter in the last 5 where we have been north of 20% EBITDA margins. We've also highlighted in our remarks that we expect the back half of this year to be north of 20% EBITDA margins. And yes, then I think where we go, David, in '25, we'll obviously be talking about that later this year and early into next year. But our goal is the same. We want to make sure that we can, on a sustainable basis, deliver north of 20% EBITDA margins. And certainly, we can do more, then we'll definitely be talking about that.

這是過去 5 個季度中我們第三個季度 EBITDA 利潤率超過 20%。我們也在評論中強調，預計今年下半年 EBITDA 利潤率將超過 20%。是的，那麼我想我們會去哪裡，大衛，在 25 年，我們顯然會在今年晚些時候和明年初討論這個問題。但我們的目標是一樣的。我們希望確保能夠在可持續的基礎上實現 20% 以上的 EBITDA 利潤率。當然，我們可以做更多，然後我們肯定會談論這個。

Okay. Great. And I forgot to add that you're accomplishing this -- less than robust demand environment as you've articulated. And that's it for me. I apologize for those (cater shadow need for the questions). I am just happy, I asked the right questions, to the right company, jumping around on too many calls this morning.

好的。偉大的。我忘了補充一點，您正在實現這一目標——正如您所闡述的那樣，需求環境不那麼強勁。對我來說就是這樣。我為那些人道歉（滿足影子對問題的需要）。我很高興，我向正確的公司提出了正確的問題，今天早上接聽了太多的電話。

Thanks David.

謝謝大衛。

Thanks.

謝謝。

I appreciate it.

我很感激。

Thank you.

謝謝。

Phil Gibbs, KeyBanc Capital Markets.

Phil Gibbs，KeyBanc 資本市場。

Hey, good morning.

嘿，早安。

Good morning, Philip.

早安，菲利普。

Good morning

早安

I noticed in your slide deck, you had some nice incremental business wins within propulsion and then also just generally defense. Are those orders expected to ship over the next 6 to 18 months? And how should we think about that? I wouldn't think you'd be able to cater to all of those in the back half?

我注意到在你的幻燈片中，你在推進方面取得了一些不錯的增量業務勝利，然後也只是整體防禦。這些訂單預計會在未來 6 到 18 個月內出貨嗎？我們該如何思考這個問題？我認為你無法滿足後半段的所有需求？

Yeah. No, they are clearly not all in the back half, right? So let me start with roughly $60 million of orders that we have had on defense. First of all, by the way, I just want to highlight what a wonderful job our team has done in terms of securing these orders. A couple of things that I think that are important.

是的。不，他們顯然不都是在後半區吧？讓我從我們在國防領域獲得的大約 6000 萬美元的訂單開始。首先，順便說一句，我只想強調我們的團隊在確保這些訂單方面所做的出色工作。我認為有幾件事很重要。

One is we're starting to have more and more of our defense orders from outside the U.S. or global. I think that's been a very important part of the work that our team has been doing. So a sizable portion of that $60 million is actually outside.

一是我們開始收到越來越多來自美國以外或全球的國防訂單。我認為這是我們團隊一直在做的工作中非常重要的一部分。因此，這 6000 萬美元中很大一部分實際上是外部的。

The second is, that this is $60 million for the first 2 quarters of the year. All of last year, we had $60 million of new defense orders. So we're roughly on pace to be about 2x the value of defense orders this year than what we secured last year. So the team has done certainly a very nice job with that. We would expect those to ship a bit of it here in the back half of this year, but then really into '25. And typically, as you know, Phil, defense orders do tend to be in the 1 to 2-year time frame. So we would expect that to happen.

第二個是，今年前兩季的資金為 6,000 萬美元。去年全年，我們收到了價值 6,000 萬美元的新國防訂單。因此，我們今年的國防訂單價值約為去年的兩倍。所以團隊在這方面確實做得非常好。我們預計他們會在今年下半年運送一些產品，但真正到了 25 年。菲爾，正如您所知，通常情況下，防禦令往往會持續 1 到 2 年的時間範圍。所以我們預計這種情況會發生。

With regard to the space and the propulsion orders, we also indicated that this is a fifth order from this customer. So the first 4 were the spot orders, but now this is a multiyear contract that we have. So this is a 2, 3, 4-year type of a multiyear type of a contract. And so we would expect -- right now I'm going to say, still finishing up, delivering to the orders that we had already. We're finishing those up. And this new award will go into effect once we finish delivering the last -- the 4 contracts that we had once we finished delivering that, this will go into effect and then will last on a multiyear basis.

關於空間和推進訂單，我們也表示這是該客戶的第五份訂單。所以前 4 個是現貨訂單，但現在這是我們擁有的多年合約。因此，這是多年合約中的 2 年、3 年、4 年期類型。所以我們預計 - 現在我要說的是，仍在完成，交付我們已經收到的訂單。我們正在完成這些工作。這個新合約將在我們完成最後一份合約交付後生效，即我們完成交付後的 4 份合同，這將生效，然後將持續多年。

Thank you. And then generically, on your backlog, can you give us an idea about how your overall backlog looks right now relative to the end of '23 or end of first quarter, just so we've got an idea of the visibility that you may have?

謝謝。然後，一般來說，在您的積壓工作中，您能否向我們介紹一下您目前相對於 23 年底或第一季末的整體積壓工作情況，以便我們了解您可能擁有的可見性？

Yeah. So look, I mean, the backlog it's kind of a mixed bag, as you can imagine, right? I mean there are certain markets where the backlog is improving. I mean we indicated, for example, on semi, our backlog is improving because we are starting to see a bit more of an order pattern on semi, as you can imagine, on space and defense. Our backlog is improving. But there are certain areas like automotive and industrial and couple a very challenged area, our backlog is certainly a bit more challenged.

是的。所以你看，我的意思是，積壓的訂單是一個混合體，正如你可以想像的，對吧？我的意思是，某些市場的積壓情況正在改善。我的意思是，我們表示，例如，在半成品方面，我們的積壓訂單正在改善，因為我們開始在半成品方面看到更多的訂單模式，正如你可以想像的那樣，在太空和國防方面。我們的積壓工作正在改善。但在某些領域，例如汽車和工業，以及一些非常具有挑戰性的領域，我們的積壓工作肯定會面臨更大的挑戰。

So it's a mixed bag for -- we've got some areas where the backlog is improving quite a bit, and then fortunately, other areas where it's now. I would say, on an overall basis, the backlog at a material level is moving in the right direction. So incremental moves from quarter-to-quarter, and I hope we can continue that into Q3 and then more of a larger step move in Q4 as that is particularly in the semi market and the beryllium-nickel for industrial market, et cetera, that we would expect a much more of a pickup on the backlog in the fourth quarter.

所以這是一個好壞參半的問題——我們在某些​​領域的積壓工作有了很大改善，幸運的是，其他領域現在也有這樣的情況。我想說，總體而言，物質層面的積壓正在朝著正確的方向發展。因此，每季的增量變動，我希望我們可以將這種趨勢延續到第三季度，然後在第四季度採取更大的舉措，特別是在半成品市場和工業市場的鈹鎳等領域，我們預計第四季積壓訂單將大幅增加。

Thank you. And then lastly for me, I think the slide deck also talked about a focus on cash generation in the back half of the year. The first half carried a bit more cash than we thought 3-6 months ago, let's just say, for net working capital. And I know you've got a focus to let some inventory bleed down or normalize a bit as you ship on some of these projects. Is that still the case as of right now? And how should we be thinking about cash generation and net working capital in the back half? And what kind of -- whatever you're going to say next, what gets you there?

謝謝。最後對我來說，我認為幻燈片也談到了今年下半年對現金產生的關注。上半年的現金淨營運資本比我們 3-6 個月前的預期要多一些。我知道，在交付其中一些項目時，您會專注於減少一些庫存或使其正常化。到現在為止還是這樣嗎？我們應該如何考慮後半段的現金產生和淨營運資本？不管你接下來要說什麼，是什麼讓你到達那裡？

Sure. So we didn't end Q2 with the cash generation that we were looking for. And a lot of it was timing. We do have some plans to reduce inventory that are well underway, but they're being a little bit offset by some build that we have both for the space business and also clad. So we're managing that from a timing perspective.

當然。因此，我們並沒有在第二季結束時獲得我們想要的現金產生。其中很多都是時機。我們確實有一些正在順利進行的減少庫存的計劃，但這些計劃被我們為太空業務和外套業務建造的一些建築所抵消。所以我們從時間的角度來管理這個問題。

Same with accounts payable. If you think about controlling costs and bringing costs in and trying to manage inventory that way, it's bringing down our AP a little bit as well, which, as you know, is a good guy. So as we look out at the back half of the year, stronger earnings is certainly a help, but we expect those working capital numbers to get in line as well. So to be able to bring down the debt to under 2x, where we think it should be at this point.

與應付帳款相同。如果你考慮控製成本並引入成本並嘗試以這種方式管理庫存，這也會使我們的 AP 下降一點，正如你所知，這是一個好東西。因此，當我們展望今年下半年時，強勁的獲利肯定會有所幫助，但我們預計這些營運資本數字也會保持一致。因此，能夠將債務降至 2 倍以下，這是我們認為目前應該達到的水平。

Thank you.

謝謝。

Thanks Philip.

謝謝菲利普。

Thank you.

謝謝。

Dave Storms, Stonegate.

戴夫·斯托姆斯，石門。

Morning.

早晨。

Morning.

早晨。

Morning, Dave.

早上好，戴夫。

You just on the call in the slides, you mentioned or highlighted how cost management has been a driver of the margin growth. Just curious as to how much more headroom you see here, how many more levers you have to continue having cost management be beneficial to margin expansion?

您剛剛在幻燈片中的電話會議中提到或強調了成本管理如何成為利潤成長的驅動力。只是好奇您在這裡看到了多少空間，您還需要多少槓桿才能繼續使成本管理有利於利潤率擴張？

Yeah, I'll start, and if Jugal has anything to add, you can pipe in. But I think that if we think about where we've been, we started out with some very targeted cost actions sort of waiting to see what the markets would do in semiconductors in EM, electronic internal specifically, I think we got a little bit more holistic saying, really, where do we have opportunities to improve the cost structure in this business. And so, I would say those were a bit more fulsome actions.

是的，我先開始了，如果 Jugal 有什麼要補充的，你可以提出來。但我認為，如果我們考慮一下我們的處境，我們會從一些非常有針對性的成本行動開始，等待觀察新興市場半導體市場的表現，特別是電子內部市場，我認為我們得到了更多整體來說，實際上，我們在哪裡有機會改善這項業務的成本結構。所以，我想說這些都是更過分的行為。

And now I would say we're kind of back to that targeted level. There's work going on in optics, I think we mentioned that as well. But they certainly will become more selective as we don't -- we're focused on growing the business, right? That takes investment. So I would say we've done the lion's share of what there is to do. It would be selective from here, but there'll also be investments as we look towards what's coming in the future.

現在我想說我們又回到了目標水準。光學方面的工作正在進行中，我想我們也提到了這一點。但他們肯定會變得更加挑剔，而我們卻沒有——我們專注於發展業務，對吧？這需要投資。所以我想說我們已經完成了大部分要做的事情。從這裡開始將是有選擇性的，但當我們展望未來時，也會有投資。

Very helpful. Thank you. And apologies if I missed this. Has there been any more clarity on the production tax credit?

非常有幫助。謝謝。如果我錯過了這一點，我深表歉意。生產稅收抵免是否更明確？

Yeah. No, great question. Not really. We expect that there will be final guidance still this year, and there are whispers here and there what might or might not be included. As we've said before, we think we've taken a very middle-of-the-road approach in what we are accruing for a benefit. It's a little bit less than what we were recruiting in the first half of last year. But I would say there's equal amounts upside, downside based on where that final guide lands. So we look forward to hearing that sometime in the back half.

是的。不，很好的問題。並不真地。我們預計今年仍將有最終指導意見，並且到處都有傳言可能會或可能不會包括哪些內容。正如我們之前所說，我們認為我們在獲得利益方面採取了非常中間的方法。比我們去年上半年招募的人數少了一點。但我想說的是，根據最終指南的落地情況，有同樣數量的上行和下行。所以我們期待在後半段的某個時候聽到這一點。

Also, very helpful. Thank you. And then just one more for me. I know you mentioned debt paydown as part of one of your uses for the expected increase in cash flows. I'm just curious, are you seeing anything in the M&A market that peaks your interest? Where do you think values are just put them flow of cash expected just anything along that line?

另外，非常有幫助。謝謝。然後再給我一個。我知道您提到償還債務是您預期現金流成長的用途之一。我只是很好奇，您在併購市場中是否看到了令您感興趣的事物？您認為價值只是將現金流量預期放在哪裡？

Yeah. Clearly, as we've indicated before, I mean, we're always looking at opportunities, right? I mean our door is sort of always open. But we're very, very critical in the way we look at things. We want to make sure that it's the right fit. We don't want to do M&A just for the sake of doing M&A. We want to make sure that it's got the right culture fit. It aligns with our mega trends, our portfolio that we have and that we can really drive significant value as we were doing that.

是的。顯然，正如我們之前指出的，我的意思是，我們一直在尋找機會，對吧？我的意思是我們的門總是敞開的。但我們看待事物的方式非常非常挑剔。我們要確保它合適。我們不想僅僅為了併購而併購。我們希望確保它具有正確的文化契合度。它符合我們的大趨勢、我們擁有的產品組合，並且我們在這樣做時能夠真正推動重大價值。

So we are continuously looking at that and evaluating opportunities. And certainly, if there's an opportunity for us to move forward, then we would. We have even at today's levels, I mean we have the capacity to be able to do it. But certainly, we're going to continue to improve our cash position, not only for M&A, but as we've highlighted, we want to continue to make sure that we're driving organic investments. So we'll keep doing that.

因此，我們正在不斷關注這一點並評估機會。當然，如果我們有機會前進，我們就會前進。即使在今天的水平上，我的意思是我們有能力做到這一點。但當然，我們將繼續改善我們的現金狀況，不僅是為了併購，而且正如我們所強調的，我們希望繼續確保我們正在推動有機投資。所以我們會繼續這樣做。

Very helpful. Thank you very much and good luck. And thank you.

非常有幫助。非常感謝，祝你好運。謝謝你。

Thank you.

謝謝。

Thank you.

謝謝。

Thank you. There are no other questions at this time. I would now like to hand the call back to Kyle Kelleher for closing remarks.

謝謝。目前沒有其他問題。現在我想將電話轉回給凱爾·凱萊赫（Kyle Kelleher），讓其致閉幕詞。

Thank you. This concludes our second quarter 2024 earnings call. Recorded playback of this call will be available on the company's website, materion.com. I'd like to thank you for participating on this call and your interest in Materion. I will be available for any follow-up questions, my number is 216-383-4931. Thank you again.

謝謝。我們的 2024 年第二季財報電話會議到此結束。此通話的錄音回放將在公司網站 materion.com 上提供。我要感謝您參加本次電話會議以及您對 Materion 的興趣。如果有任何後續問題，我將隨時為您解答，我的電話號碼是 216-383-4931。再次感謝您。

Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

謝謝。今天的會議到此結束，此時您可以掛斷電話了。感謝您的參與。