Nordson Corp (NDSN) 2024 Q2 法說會逐字稿

Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Nordson Corporation Second Quarter Fiscal Year 2024 Conference Call. (Operator Instructions).

謝謝你的支持。我叫艾瑞克，今天我將擔任你們的會議操作員。此時，我謹歡迎大家參加諾信公司 2024 財年第二季電話會議。 （操作員說明）。

Thank you. I would now like to turn the call over to Lara Mahoney. Please go ahead.

謝謝。我現在想把電話轉給拉拉馬奧尼 (Lara Mahoney)。請繼續。

Thank you. Good morning. This is Lara Mahoney, Vice President of Investor Relations and Corporate Communications. I'm here with Sundaram Nagarajan, our President and CEO; and Stephen Shamrock, Chief Accounting Officer. We welcome you to our conference call today, Tuesday, May 21, to report Nordson's fiscal 2024 second quarter results.

謝謝。早安.我是拉拉‧馬奧尼 (Lara Mahoney)，投資者關係與企業傳播副總裁。我和我們的總裁兼執行長 Sundaram Nagarajan 一起來到這裡。和首席會計官史蒂芬·沙姆洛克。歡迎您參加今天（5 月 21 日星期二）的電話會議，報告 Nordson 2024 財年第二季業績。

You can find both our press release as well as our webcast slide presentation that we will refer to during today's call on our website at www.nordson.com/investors. This conference call is being broadcast live on our investor website and will be available there for 30 days. There will be a telephone replay of the conference call available until Tuesday, May 28, 2024. During this conference call, we will make references to non-GAAP financial metrics. We've provided a reconciliation of these metrics to the most comparable GAAP metrics in the press release issued yesterday.

您可以在我們的網站 www.nordson.com/investors 上找到我們的新聞稿以及我們將在今天的電話會議期間參考的網路廣播幻燈片簡報。本次電話會議將在我們的投資者網站上進行現場直播，並將持續 30 天。 2024 年 5 月 28 日星期二之前，我們將提供電話會議的電話重播。我們在昨天發布的新聞稿中提供了這些指標與最具可比性的 GAAP 指標的調整表。

Before we begin, please refer to Slide 2 of our presentation, where we note that certain statements regarding our future performance that are made during this call may be forward-looking based upon Nordson's current expectations. These statements may involve a number of risks, uncertainties and other factors as discussed in the company's filings with the Securities and Exchange Commission that could cause actual results to materially differ.

在我們開始之前，請參閱我們簡報的幻燈片 2，其中我們注意到，根據諾信當前的預期，本次電話會議期間做出的有關我們未來業績的某些陳述可能具有前瞻性。這些陳述可能涉及公司向美國證券交易委員會提交的文件中討論的許多風險、不確定性和其他因素，可能導致實際結果有重大差異。

Moving to today's agenda on Slide 3, Naga will discuss second quarter highlights. He will then turn the call over to Steve to review sales and earnings performance for the total company and the 3 business segments. Steve will also discuss the balance sheet and cash flow. Naga will then share a high-level commentary about our end markets and provide an update on the fiscal 2024 full year and third quarter guidance. We will then be happy to take your questions.

轉到今天幻燈片 3 上的議程，Naga 將討論第二季度的亮點。然後，他會將電話轉給史蒂夫，以審查整個公司和 3 個業務部門的銷售和獲利績效。史蒂夫還將討論資產負債表和現金流。然後，Naga 將分享有關我們終端市場的高級評論，並提供 2024 財年全年和第三季度指導的最新資訊。我們將很樂意回答您的問題。

With that, I'll turn the call over to Naga.

這樣，我就把電話轉給 Naga。

Good morning, everyone. Thank you for joining Nordson's fiscal 2024 second quarter conference call.

大家，早安。感謝您參加諾信 2024 財年第二季電話會議。

Before we begin, I would like to welcome Dan Hopgood, our new Executive Vice President and Chief Financial Officer to Nordson. Dan started with us yesterday. He brings more than 25 years of financial and operational expertise to the CFO role. Prior to joining Nordson, he held roles of increasing responsibility at Eaton Corporation, a $23 billion multinational power management company. Most recently, he served as Eaton's Controller and Chief Accounting Officer. As I got to know Dan, I was impressed with this robust financial experience, his time as an operational leader, and his passion for developing talent. Today, he will be listening in, and we look forward to introducing him to all of you in the coming months starting at the KeyBanc Industrials and Basic Materials Conference in Boston next week.

在我們開始之前，我謹歡迎我們新任執行副總裁兼財務長 Dan Hopgood 加入 Nordson。丹昨天開始和我們一起。他為 CFO 職位帶來了超過 25 年的財務和營運專業知識。在加入 Nordson 之前，他在伊頓政府（一家價值 230 億美元的跨國電力管理公司）擔任過越來越重要的職位。最近，他擔任伊頓公司的財務總監和首席會計官。當我認識 Dan 時，他豐富的財務經驗、作為營運領導者的經歷以及他對人才培養的熱情給我留下了深刻的印象。今天，他將聆聽，我們期待在下週於波士頓舉行的 KeyBanc 工業和基礎材料會議上開始的未來幾個月內向大家介紹他。

Now let's shift into our second quarter earnings results on Slide 5. At the outset, I would like to recognize the dedicated Nordson team who have leveraged the NBS Next Growth Framework to deliver solid second quarter results. Sales of $651 million were within our second quarter guidance range. Growth was driven by the ARAG acquisition as well as strong performance in our industrial coatings and fluid solutions product lines, which offset continued weakness in our electronics product lines.

現在讓我們轉向幻燈片 5 上的第二季度盈利結果。 6.51 億美元的銷售額在我們第二季的指導範圍內。成長是由 ARAG 收購以及我們的工業塗料和流體解決方案產品線的強勁表現所推動的，這抵消了我們電子產品線的持續疲軟。

In addition, our focus on top customers and differentiated products improved product mix. This focus and strategically adjusting costs led to improvements in gross margins and top-quartile EBITDA margin of 31%. In the quarter, we delivered adjusted earnings per share of $2.34, which was at the top end of our EPS guidance for the quarter.

此外，我們對頂級客戶和差異化產品的關注改善了產品結構。這種專注和策略性成本調整導致毛利率提高，EBITDA 利潤率達到 31%。本季度，我們的調整後每股收益為 2.34 美元，處於本季 EPS 指引的上限。

Finally, I'd like to highlight our second quarter free cash flow of $108 million, which was 92% of net income. We continue to convert earnings into cash flow and use this cash flow to retire nearly $100 million of debt within the quarter. I'll speak more about the enterprise performance in a few moments.

最後，我想強調我們第二季的自由現金流為 1.08 億美元，佔淨利潤的 92%。我們繼續將收益轉化為現金流，並利用該現金流在本季償還近 1 億美元的債務。稍後我將詳細討論企業績效。

But first, I'll turn the call over to Steve to provide a detailed perspective on our financial results for the quarter.

但首先，我將把電話轉給史蒂夫，以提供有關我們本季財務表現的詳細觀點。

Thank you, Naga, and good morning to everyone. On Slide #6, you'll see second quarter fiscal 2024 sales were $651 million, a slight increase to the prior year's second quarter sales of $650 million. This was driven by a favorable 5% benefit from the ARAG acquisition, partially offset by an organic sales decrease of 4% and an unfavorable foreign exchange impact of 1%. As Naga referenced, strength in our industrial coating systems and fluid solutions product lines were offset by ongoing weakness in our electronics product lines.

謝謝你，娜迦，祝大家早安。在第 6 張投影片上，您將看到 2024 財年第二季銷售額為 6.51 億美元，比去年第二季 6.5 億美元的銷售額略有成長。這是由 ARAG 收購帶來的 5% 的有利收益推動的，但部分被 4% 的有機銷售額下降和 1% 的不利外匯影響所抵消。正如 Naga 所提到的，我們的工業塗料系統和流體解決方案產品線的優勢被我們電子產品線的持續疲軟所抵消。

Gross profit performance was strong in the second quarter. We delivered gross profit margins in excess of 56%, an approximately 200 basis point improvement over the prior year. Deploying our NBS Next Growth Framework, we are focusing on top products driving a favorable product mix and product simplification efforts to improve manufacturing efficiency. We also remain disciplined on managing our cost structure and taking actions where necessary. EBITDA adjusted for special items in both periods totaled $203 million, or 31% of sales, which was consistent with the prior year. Improved gross margins were offset by higher selling and administrative costs, attributable primarily to the addition of ARAG.

第二季毛利表現強勁。我們的毛利率超過 56%，比上年提高約 200 個基點。在部署我們的國家統計局下一步成長框架時，我們專注於頂級產品，推動有利的產品組合和產品簡化工作，以提高製造效率。我們也嚴格管理成本結構並在必要時採取行動。兩個時期的特殊項目調整後的 EBITDA 總計為 2.03 億美元，佔銷售額的 31%，與前一年持平。毛利率的提高被銷售和管理成本的增加所抵消，這主要是由於增加了 ARAG。

Looking at nonoperating expenses, net interest expense increased $9 million associated with higher debt levels and increased interest rates. Other expenses net decreased $1 million, primarily related to lower foreign exchange losses compared to the prior year. Tax expense was $31 million, for an effective tax rate of 21% in the quarter, which is in line with the prior year rate and our guidance range for 2024.

從營業外支出來看，由於債務水準上升和利率上升，淨利息支出增加了 900 萬美元。其他費用淨減少 100 萬美元，主要與去年相比外匯損失減少有關。本季稅務費用為 3,100 萬美元，有效稅率為 21%，與上年稅率和我們 2024 年的指導範圍一致。

Net income in the quarter totaled $118 million or $2.05 per share. Adjusted earnings per share, excluding $2 million of nonrecurring cost reduction actions and amortization of acquisition-related intangibles of $19 million, totaled $2.34 per share, a 4% decrease from the prior year adjusted earnings per share amount of $2.45. The decrease in earnings was driven primarily by higher interest expense due to the ARAG acquisition.

該季度淨利潤總計 1.18 億美元，即每股 2.05 美元。調整後每股收益（不包括 200 萬美元的非經常性成本削減行動和 1,900 萬美元收購相關無形資產攤銷）總計為每股 2.34 美元，比上年調整後每股收益 2.45 美元下降 4%。收益下降的主要原因是收購 ARAG 導致利息支出增加。

Now let's turn to Slide 7 through 9 to review the second quarter 2024 segment performance. Industrial Precision Solutions sales of $367 million increased 9% compared to the prior year second quarter, driven by the ARAG acquisition, as well as increased sales in our industrial coating systems and packaging product lines. Organic sales increased 2% over the prior year second quarter, continuing to build upon a record fiscal 2023 for the segment, partially offset by an unfavorable foreign exchange impact of 1%. This segment has now delivered organic growth in 12 of the last 14 quarters.

現在讓我們轉向投影片 7 至 9 來回顧 2024 年第二季的細分市場表現。受 ARAG 收購以及工業塗層系統和包裝產品線銷售額成長的推動，工業精密解決方案銷售額為 3.67 億美元，較去年第二季成長 9%。第二季有機銷售額比去年同期成長 2%，繼續在 2023 財年創紀錄的基礎上繼續發展，但部分被 1% 的不利外匯影響所抵消。該細分市場在過去 14 個季度中的 12 個季度中實現了有機成長。

EBITDA was $132 million in the second quarter or 36% of sales, an increase of 11% compared to the prior year EBITDA of $119 million. The increase in EBITDA was driven primarily by the ARAG acquisition, plus organic sales growth and gross margin improvement in the base business. It's also worth highlighting that this quarter marks 13 out of 14 consecutive quarters of EBITDA growth.

第二季 EBITDA 為 1.32 億美元，佔銷售額的 36%，比去年同期的 1.19 億美元增加了 11%。 EBITDA 的成長主要得益於 ARAG 收購，以及基礎業務的有機銷售成長和毛利率改善。另外值得強調的是，本季是 EBITDA 連續 14 個季度成長中的 13 個季度。

On Slide 8, you'll see Medical and Fluid Solutions sales of $169 million increased 2% compared to the prior year second quarter, driven by modest growth in fluid and medical interventional solutions product lines. This was partially offset by lower sales in our medical fluid components product lines versus last year. Despite the year-over-year decrease, we did see a modest increase in the medical fluid component sales sequentially. Second quarter EBITDA was $63 million or 37% of sales, which was flat to the prior year EBITDA of $63 million, which excluded $1.5 million of special items for cost reduction actions. This segment has now delivered EBITDA margins greater than 35% in 13 of the last 14 quarters.

在投影片 8 上，您將看到醫療和流體解決方案銷售額為 1.69 億美元，與去年第二季度相比增長 2%，這主要得益於流體和醫療介入解決方案產品線的適度增長。與去年相比，我們的醫用流體組件產品線的銷售額下降部分抵消了這一影響。儘管同比下降，但我們確實看到醫用液體組件銷售額連續小幅增長。第二季 EBITDA 為 6,300 萬美元，佔銷售額的 37%，與去年同期 6,300 萬美元的 EBITDA 持平，其中不包括 150 萬美元的成本削減行動特殊項目。該部門目前在過去 14 個季度中的 13 個季度中實現了 EBITDA 利潤率超過 35%。

Turning to Slide 9, you'll see Advanced Technology Solutions sales were $115 million, a 22% decrease compared to the prior year second quarter. The decrease in sales was driven by continued weakness across the segment, primarily related to products serving electronics end markets. Second quarter EBITDA was $24 million or 21% of sales, which trailed the prior year second quarter EBITDA of $32 million, which excluded special items of $2 million related to cost reduction actions in both periods. While the reduction in EBITDA was tied to the overall decrease in volume, favorable mix and cost reduction actions contributed to 22% decremental margins. This is well ahead of our decremental target of approximately 55%.

翻到投影片 9，您會看到先進技術解決方案的銷售額為 1.15 億美元，與去年第二季相比下降了 22%。銷售額下降的原因是該領域的持續疲軟，主要與服務電子終端市場的產品有關。第二季 EBITDA 為 2,400 萬美元，佔銷售額的 21%，落後於去年第二季 3,200 萬美元的 EBITDA，其中不包括與兩個時期的成本削減行動相關的 200 萬美元特殊項目。雖然 EBITDA 的減少與銷售整體下降有關，但有利的組合和成本削減行動導致利潤率下降了 22%。這遠遠超出了我們約 55% 的遞減目標。

Finally, turning to the balance sheet and cash flow on Slide 10. At the end of the second quarter, we had cash of $125 million, and net debt was $1.4 billion, resulting in a leverage ratio of 1.7x based on the trailing 12 months EBITDA. We continue to have significant available borrowing capacity, pursue organic and inorganic growth opportunities.

最後，轉向幻燈片 10 上的資產負債表和現金流。銷前利潤。我們繼續擁有大量可用借貸能力，尋求有機和無機成長機會。

Free cash flow was $108 million or a 92% conversion rate on net income. We strategically deployed this strong cash flow in the quarter. We repaid $100 million of revolver debt and paid $39 million in dividends during the quarter. For modeling purposes for the full fiscal year, assume an estimated effective tax rate of 20% to 22%, capital expenditures of approximately $40 million to $50 million, and net interest expense of $74 million to $77 million. In summary, we delivered another strong financial performance in the second quarter, in line with our expectations.

自由現金流為 1.08 億美元，淨利潤轉換率為 92%。我們在本季策略性地部署了這一強勁的現金流。我們在本季償還了 1 億美元的循環債務並支付了 3,900 萬美元的股息。為了對整個財年進行建模，假設估計有效稅率為 20% 至 22%，資本支出約為 4,000 萬至 5,000 萬美元，淨利息支出為 7,400 萬至 7,700 萬美元。總而言之，我們在第二季再次實現了強勁的財務業績，符合我們的預期。

We'll now move to Slide 11, and I'll turn the call back to Naga.

現在我們將轉到投影片 11，我會將電話轉回給 Naga。

Thanks, Steve. I also want to commend the business for delivering strong operating performance under a challenging demand environment in some of our segments. This is a testament to how NBS Next is becoming the way we run our business. I want to spend a few minutes talking about our end markets and the changes we are seeing as we move into the second half of fiscal 2024.

謝謝，史蒂夫。我還想讚揚該業務在一些細分市場充滿挑戰的需求環境下實現了強勁的經營業績。這證明了 NBS Next 如何成為我們經營業務的方式。我想花幾分鐘時間談談我們的終端市場以及我們在進入 2024 財年下半年時所看到的變化。

Starting with Industrial Precision Solutions segment. We continue to see steadiness in industrial and consumer nondurable end markets. After 2 years of record growth, our full year guidance implies IPS, excluding ARAG, is about flat to slightly up versus prior year. And while the ARAG integration continues to go well, we cannot ignore the impact of weakening agricultural end market conditions. Despite the weakening of this particular agricultural cycle, which is causing customers to pause spending and work through inventory, we are undeterred in our belief that precision agriculture is a high-growth end market, and this cycle is temporary in nature.

從工業精密解決方案部門開始。我們繼續看到工業和消費非耐用品終端市場保持穩定。經過兩年創紀錄的成長後，我們的全年指引意味著 IPS（不包括 ARAG）與上年持平或略有上升。雖然ARAG整合繼續順利進行，但我們不能忽視農業終端市場狀況疲軟的影響。儘管這個特定農業週期的減弱導致客戶暫停支出並處理庫存，但我們堅信精準農業是一個高成長的終端市場，而這個週期本質上是暫時的。

Based on the past 9 months of integration, we remain excited about ARAG's differentiated technology and value proposition that would help customers boost crop yields while sustainably reducing the expensive usage of fertilizers and chemicals.

基於過去 9 個月的整合，我們對 ARAG 的差異化技術和價值主張仍然感到興奮，這些技術和價值主張將幫助客戶提高作物產量，同時持續減少昂貴的化肥和化學品的使用。

Within our Medical and Fluid Solutions segment, we are continuing to see modest order entry pickup in our fluid components business, which is returning to growth following last year's biopharma destocking. Similarly, our fluid solutions product lines, which have exposure to the electronics cycle, are turning positive. Our medical interventional solution product lines, which grew double digits in fiscal 2023 driven by the trends in minimally invasive therapies and the aging of population, we have tough comparisons in the second half of the year.

在我們的醫療和流體解決方案領域，我們的流體組件業務的訂單量繼續小幅回升，該業務在去年生物製藥去庫存後正在恢復成長。同樣，我們涉足電子產業的流體解決方案產品線也正在轉好。我們的醫療介入解決方案產品線在微創治療趨勢和人口老化的推動下，在2023財年實現了兩位數成長，下半年我們進行了艱難的比較。

In the ATS segment, we continue to see positive early indicators of the electronics cycle inflection. But we're not seeing order entry pick up that would support the implied ramp in our prior second half guidance. Keeping in mind the semiconductor subsegment, Nordson's applications are largely positioned at the back end of the manufacturing process with a focus on advanced packaging of semiconductor chips. Currently, investments are being made in the front end of the semiconductor manufacturing process related to fabrication and processing of silicon wafers. As production shifts towards converting their wafers to individual chips and advanced packaging of these chips, customers will invest in Nordson electronics dispense and test and inspection technology. Overall, we will benefit from the increasing demand for chips in support of AI, automotive electronics, onshoring, CHIPS Act and more.

在 ATS 領域，我們持續看到電子週期拐點的正面早期指標。但我們沒有看到訂單輸入回升，這將支持我們先前下半年指引中隱含的成長。考慮到半導體細分市場，諾信的應用主要定位於製造流程的後端，重點是半導體晶片的先進封裝。目前，投資正在與矽晶圓的製造和加工相關的半導體製造過程的前端進行。隨著生產轉向將晶圓轉換為單一晶片以及這些晶片的先進封裝，客戶將投資諾信電子點膠以及測試和檢驗技術。總體而言，我們將受益於支援人工智慧、汽車電子、在岸外包、CHIPS 法案等領域對晶片不斷增長的需求。

While our test and inspection businesses are positioned to improve the yields and ensure quality of these critical and expensive chips, our X-ray business, which experienced double-digit growth in fiscal 2023, is dealing with challenging comparisons in the second half of the year. Our ATS leaders continue to do an excellent job of implementing the NBS Next Growth Framework and positioning themselves for future growth. This includes positioning operations closer to the customer, introducing differentiated new products, and making strategic cost adjustments. ATS ability to outperform the decremental targets again this quarter is a testament to this work.

雖然我們的測試和檢驗業務旨在提高這些關鍵且昂貴的晶片的產量並確保其質量，但我們的X 射線業務在2023 財年實現了兩位數的增長，但在下半年面臨著具有挑戰性的比較。我們的 ATS 領導者繼續出色地實施 NBS 下一步成長框架，並為未來的成長做好定位。這包括將營運定位為更貼近客戶、推出差異化的新產品以及進行策略成本調整。 ATS 本季再次超越遞減目標的能力證明了這項工作。

Turning now to our outlook on Slide 12. We enter the third quarter with approximately $700 million in backlog. This backlog remains concentrated in our systems businesses, while customer order entry patterns have returned to historical norms in the rest of the businesses. Based on the current visibility I just shared and order entry trends, we are updating our previously issued full year revenue guidance in the range of flat to up 2% over record fiscal 2023. Full year fiscal 2024 earnings are forecasted to be in the range of down 5% to down 1% per diluted share.

現在轉向我們對幻燈片 12 的展望。這種積壓仍然集中在我們的系統業務中，而其他業務中的客戶訂單輸入模式已恢復到歷史正常水平。根據我剛剛分享的當前可見性和訂單輸入趨勢，我們正在更新先前發布的全年收入指引，與創紀錄的 2023 財年持平至增長 2%。下降5% 至1%。

This full year guidance assumes a neutral impact from FX rates and the ARAG acquisition contributing approximately 3.5% growth at the midpoint of our guidance. Investors should keep in mind that we anniversary the acquisitive growth impact of ARAG in the fiscal fourth quarter. For the third quarter of fiscal 2024, sales are forecasted to be in the range of $645 million to $670 million, with adjusted earnings in the range of $2.25 to $2.40 per diluted share. Third quarter guidance considers weaker electronics and agriculture end markets.

本全年指引假設匯率影響呈中性，且 ARAG 收購對我們指引的中點貢獻了約 3.5% 的成長。投資者應該記住，我們正在慶祝 ARAG 在第四財季的收購成長影響。 2024財年第三季的銷售額預計在6.45億美元至6.7億美元之間，調整後每股攤薄收益在2.25美元至2.40美元之間。第三季指引考慮了電子和農業終端市場的疲軟。

Even as we face more challenging market conditions, Nordson's core strengths remain a diversified portfolio close to the customer business model, high level of recurring revenue, NBS Next Growth Framework, and a commitment to innovation. All of this positions Nordson well to deliver long-term Ascend strategy goals. As always, I want to thank our customers, shareholders and the Nordson team for your continued support.

即使我們面臨更具挑戰性的市場條件，諾信的核心優勢仍然是貼近客戶業務模式的多元化產品組合、高水準的經常性收入、NBS Next Growth Framework 以及對創新的承諾。所有這些都使諾信能夠很好地實現長期的奧升德戰略目標。一如既往，我要感謝我們的客戶、股東和諾信團隊的持續支持。

With that, we will pause, and Steve and I will take your questions.

說到這裡，我們將暫停，史蒂夫和我將回答你們的問題。

(Operator Instructions) Your first question comes from the line of Mike Halloran with Baird.

（操作員說明）您的第一個問題來自 Mike Halloran 和 Baird 的線路。

A couple of questions here. Naga, maybe you could just talk to what's assumed in guidance as you work through the year from an end market recovery. I certainly understand the electronics piece and the ag piece. You look at the implied fourth quarter ramp, it's still probably a little above seasonality. So wondering if you still have some of those systems and projects hitting in the fourth quarter or if that's been pushed to next year. And thoughts about any sustainability of the packaging piece and how you think the biopharma is going to recover. So basically, just maybe lay out how you think the end markets track as we work through the remainder of the year and what's assumed in guidance.

這裡有幾個問題。 Naga，也許您可以談談指導中的假設，因為您全年都會從終端市場復甦中恢復過來。我當然了解電子產品和農業產品。你看看第四季隱含的成長，它可能仍然略高於季節性。因此，想知道您是否仍有一些系統和專案在第四季度啟動，或者是否已推遲到明年。以及對包裝件可持續性的想法以及您認為生物製藥將如何復甦。所以基本上，也許只是列出您認為我們在今年剩餘時間終端市場的走勢以及指導中的假設。

Yes. Let's get started with IPS. The guide is really -- maybe start with the first 2 big hits and then we'll go through the end markets, Mike. So the first -- the 2 factors which you highlighted is that we're not seeing the pickup in orders for electronic systems that we had expected with the implied second half ramp. So that's number one. Number two is the agriculture cycle is having a greater impact on ARAG than our own expectation. So timing is just -- there is not enough time here to achieve the ramp we had originally expected.

是的。讓我們開始使用 IPS。該指南確實是——也許從前兩個熱門產品開始，然後我們將進入終端市場，邁克。因此，您強調的第一個因素是，我們沒有看到電子系統訂單的回升，正如我們預期的下半年的成長一樣。所以這是第一。第二，農業週期對 ARAG 的影響比我們自己的預期更大。所以時機只是——沒有足夠的時間來實現我們最初預期的斜坡。

In terms of end markets, if you think about IPS, non-ARAG, our expectation is going to be flat to slight growth following record 2 years. In terms of -- ARAG continues to contribute to the growth of the business. In terms of ATS, certainly, the growths are below our long-term growth rates. We're not seeing the pickup as we talked about. In terms of Medical Fluid Solutions, our expectation is that our fluid components business will be slightly up. Our fluid solutions business would also be slightly up offset by tough comps on the interventional components. So in summary, we're going to have IPS flat to slightly up, ATS down, MFS returning to growth slightly.

就終端市場而言，如果考慮 IPS、非 ARAG，我們的預期將是在創紀錄的 2 年後持平或略有成長。就 ARAG 而言，它繼續為業務成長做出貢獻。就 ATS 而言，當然，成長低於我們的長期成長率。我們並沒有看到我們所說的皮卡。在醫用流體解決方案方面，我們預計我們的流體組件業務將略有成長。我們的流體解決方案業務也將因介入組件的強勁競爭而略有成長。總而言之，我們將看到 IPS 持平或略有上升，ATS 下降，MFS 略有恢復成長。

So following up on that then, are you assuming any sort of pickup in some of those stressed markets or any sort of backlog let out in any of those stressed markets in the fourth quarter? In other words, just trying to understand how derisked some of those stressed points are in the guidance as we work through the rest of the year?

那麼接下來，您是否假設一些壓力市場會出現任何形式的回升，或者第四季度這些壓力市場中的任何一個市場會出現任何形式的積壓？換句話說，只是想了解在我們今年剩餘時間的工作中，指南中的一些強調點的風險有多大？

Yes. What I'll tell you is that if you think about our fourth quarter is -- does not require electronics to come back, does not expect ARAG to come back. So if you think about those 2 stressed markets. But what is expected, though, is sequential continued improvement in both these markets. So we saw that in second quarter, both electronics -- ATS is sequentially up and so that's our expectation.

是的。我要告訴你的是，如果你想想我們第四季的情況——不需要電子產品回來，也不期望 ARAG 回來。因此，如果您考慮這兩個壓力重重的市場。但預計這兩個市場將持續改善。所以我們看到，在第二季度，兩種電子產品——ATS 都連續上漲，這就是我們的預期。

So in other words, the sequentials from here are relatively stable versus a normal sequential pattern in your mind in those markets?

換句話說，與您心目中這些市場的正常序列模式相比，這裡的序列相對穩定？

Yes. What we're seeing is order entry -- yes, go ahead, Steve. Maybe provide some more...

是的。我們看到的是訂單輸入——是的，繼續，史蒂夫。也許提供更多...

No, I was going to say, Mike, that I think you're spot on there, because if you also look at sequential growth, we had 11% growth last year from Q3 to Q4. And our midpoint basically implies around 8% growth this year. So Q4 is usually seasonally our strongest quarter. So I think that aligns with how we're thinking about it.

不，我想說的是，麥克，我認為你說得對，因為如果你也看看環比成長，我們去年從第三季到第四季成長了 11%。我們的中點基本上意味著今年的成長率約為 8%。因此，第四季通常是我們季節性最強的季度。所以我認為這與我們的想法是一致的。

Your next question comes from the line of Saree Boroditsky with Jefferies.

你的下一個問題來自 Saree Boroditsky 和 ​​Jefferies 的對話。

This is James on for Saree. I just wanted to kind of follow up on the ARAG. So can you kind of provide more color on kind of increased pressure? Because I thought you guys said that you guys have got high recurring revenue here. And kind of when do you expect to see an inflection point in the ag market?

這是詹姆斯在紗麗上的表演。我只是想跟進 ARAG 的情況。那麼你能在壓力增加的情況下提供更多的顏色嗎？因為我以為你們說你們在這裡獲得了很高的經常性收入。您預計農業市場什麼時候會出現轉折點？

In general, this market is expected to be down this year. And we expect this turnaround sometime in '25, but we're not really giving any guidance on '25. So difficult to tell you exactly when that will happen. But our guidance does not imply any pickup in ag, agriculture markets this year.

總體而言，預計今年該市場將下跌。我們預計在 25 年某個時候會出現這種轉變，但我們並沒有真正在 25 年提供任何指導。很難準確地告訴你什麼時候會發生。但我們的指導並不意味著今年農業市場出現任何回升。

Got it. And I kind of wanted to follow up on the -- like the strong gross margin performance here despite like flat revenue growth. So how should we think about like gross margin for the remainder of the year?

知道了。我有點想跟進——比如儘管收入成長持平，但毛利率表現強勁。那我們該如何考慮今年剩餘時間的毛利率呢？

Yes. Yes. No. So what I would tell you, and that really kind of ties back to our, what I would call, very strong Q2 performance, right? Basically, from a sales standpoint with Q2, we came in really where we expected from a sales standpoint. We came in with $651 million of sales in Q2. And that was -- when we gave the guidance for Q2, we assumed currency neutral. So if you add back about a $5 million unfavorable impact of FX, we basically came in spot on near the midpoint of our guidance. And we actually were at the high end of our guidance in Q2 because of the gross margin performance that you referenced there.

是的。是的。不。基本上，從第二季的銷售角度來看，我們確實達到了我們的期望。第二季我們的銷售額為 6.51 億美元。那就是——當我們給出第二季的指導時，我們假設貨幣中性。因此，如果再加上外匯帶來的約 500 萬美元的不利影響，我們基本上就達到了指導值的中點附近。由於您提到的毛利率表現，我們實際上處於第二季度指引的高端。

And the way I would think about that is we really had a strong performance in margins for a number of factors in Q2, right? We had a very strong mix. I would tell you in Q2, whether it was parts versus sales, that was very strong, we had good customer mix, and even mix within product lines, and also had -- we referenced in our earlier comments manufacturing efficiencies and cost controls.

我的想法是，在第二季的許多因素中，我們的利潤率確實表現強勁，對嗎？我們有一個非常強大的組合。我會在第二季告訴你，無論是零件還是銷售，都非常強勁，我們擁有良好的客戶組合，甚至在產品線內進行混合，而且我們在之前的評論中提到了製造效率和成本控制。

How I would think about gross margins going forward, I think I mentioned this on a previous call, we're not focused on gross margin expansion. Our long-term focus is really to maintain the gross margins that we have. So I do think what you saw in Q2 was a favorable mix than normal. So that's how I would think about that going forward. I wouldn't expect as favorable of a mix in the balance of the year.

我如何看待未來的毛利率，我想我在之前的電話會議中提到過這一點，我們並不關注毛利率的擴張。我們的長期重點實際上是維持我們現有的毛利率。所以我確實認為你在第二季度看到的情況比正常情況更有利。這就是我對未來的看法。我預計今年餘下的時間不會出現如此有利的組合。

Your next question comes from the line of Matt Summerville with D.A. Davidson.

你的下一個問題來自 Matt Summerville 和 D.A.戴維森。

Just a question on ARAG. I remember back to when you did the call as it related to the acquisition. We seem pretty convinced that this business would be less impacted by a down ag cycle. And clearly, that's not the case here. So what I guess have you learned over the last couple of quarters about ARAG and how indeed tied to the cycle that business seemingly is? And to that point, you mentioned inventory destocking. I assume that's at the OEM level, but correct me if I'm wrong. How long do you think that destock lasts?

只是關於 ARAG 的問題。我記得你打電話的時候，因為它跟收購有關。我們似乎非常確信這項業務受農業下行週期的影響較小。顯然，這裡的情況並非如此。那麼，我猜您在過去幾季中對 ARAG 有了哪些了解，以及與業務看似的周期確實有怎樣的聯繫？就此而言，您提到了庫存去庫存。我認為這是 OEM 級別的，但如果我錯了，請糾正我。您認為去庫存會持續多久？

Yes. You're right, Matt, in that our expectations that this business would have been less muted because of the precision ag exposure certainly did not play out the way our expectations were. But look, what is really important to remember is we still like the technology. We like the people we have added to the organization. Certainly, a very interesting end market. If you look at expectations of some of the OEMs, the precision ag itself is down or expected to be down 20%, 25%. So even if you think about our expectations with precision ag is going to continue to grow through the cycle, that has not worked out the way it is.

是的。你是對的，馬特，我們的預期是，由於精密農業的曝光，這項業務會不會那麼平靜，這當然沒有像我們的預期那樣發揮作用。但看，真正重要的是要記住我們仍然喜歡這項技術。我們喜歡我們添加到組織中的人員。當然，這是一個非常有趣的終端市場。如果你看看一些原始設備製造商的預期，精密農業本身就會下降或預期下降20%、25%。因此，即使你考慮到我們對精密農業的期望將在整個週期中繼續增長，但事實並非如此。

In terms of inventory destocking, remember, 40% of this business is aftermarket parts. And those aftermarket parts go through distribution. They're not direct sale. So they don't go through the OEM, they go through a distributor. And there is some level of inventory destocking that is going on in ARAG.

在庫存去庫存方面，請記住，該業務的 40% 是售後零件。這些售後零件會經過分銷。他們不是直銷的。因此，他們不是透過 OEM，而是透過經銷商。 ARAG 正在進行一定程度的庫存去化。

Got it. With respect to -- you mentioned kind of last conference call the canary businesses, and I mean that in a positive way with respect to electronics, showing some signs of life. Are you concerned that maybe those are no longer good leading indicators for a broader upturn in the electronics side? And could you maybe just put a finer point on how those businesses -- those canary businesses, if you will, performed in the second quarter and how inbound order activity has been looking there?

知道了。關於——你提到了上次電話會議上的金絲雀業務，我的意思是，對於電子產品來說，這是一種積極的方式，顯示出一些生命跡象。您是否擔心這些可能不再是電子產業更廣泛好轉的良好領先指標？您能否更詳細地說明這些業務（如果您願意的話）在第二季的表現以及入庫訂單活動的情況如何？

Yes. Both the businesses continue to strengthen in the trends that we mentioned in our first quarter. So we're continuing -- we remain convinced both those are very good leading indicators. And the reason I'll tell you is those are 2 separate indicators. For example, the one we talked about was the UV lamp business is a niche product line in one of our businesses. That is in the front end of the semiconductor process where we sell to large machine builders. That continues to strengthen, the forecasts have actually increased. That lines up with what you see front-end semiconductors growing nicely. So you see that. But you also see on finished electronic products, you're continuing to see greater usage of existing lines. So this is the consumables from EFD. Those continue to strengthen. So both those are still strong.

是的。這兩項業務都按照我們在第一季提到的趨勢繼續加強。因此，我們將繼續下去——我們仍然相信這兩個指標都是非常好的領先指標。我要告訴你的原因是，這是兩個獨立的指標。比如說我們剛才講的紫外線燈業務，是我們其中一個業務中的一個利基產品線。這是我們向大型機器製造商銷售的半導體製程的前端。這種情況繼續加強，預測實際上有所增加。這與您所看到的前端半導體的良好增長相符。所以你看到了。但您也可以看到，在成品電子產品上，現有生產線的使用率不斷提高。這是 EFD 的消耗品。這些繼續加強。所以這兩個仍然很強。

I think what it is not getting translated is that you would immediately see a system business pick up. And that's the translation that is getting delayed. We're not concerned that this is -- this doesn't indicate that the cycle is going to turn. It is more an uncertainty in this CapEx spend in electronics that we are seeing. So it is more related to the CapEx investment rather than does the cycle has not turned on that. So hopefully, that helps you.

我認為它沒有被翻譯的是你會立即看到系統業務的回升。這就是翻譯被延遲的原因。我們並不擔心這並不表示週期將會發生轉變。我們看到的電子產品資本支出更多的是不確定性。因此，這與資本支出投資有關，而不是週期是否尚未開啟。希望這對您有所幫助。

Your next question comes from the line of Christopher Glynn with Oppenheimer.

你的下一個問題來自克里斯多福·格林和奧本海默的對話。

Yes. I wanted to follow up on a little different cross-section for the electronics cycle. I'm curious if you could speak directly to the differences you're seeing in electronics processing versus T&I broadly. And then if any, interesting nuances in the different test and inspection modalities.

是的。我想跟進電子週期的一些不同的橫截面。我很好奇您是否可以直接談談您在電子加工與運輸與工業方面看到的差異。然後，如果有的話，不同測試和檢查方式中有趣的細微差別。

Okay. All right. I think if you -- let's just first start with EPS and T&I. EPS systems continue to be, in the quarter, continue to be lower in line with the ATS levels, right? So down 20% or so. And in the T&I business, I'll remind you that last year we had some significant growth in those businesses. So what we are facing on our X-ray business is a tough comp.

好的。好的。我想如果你——讓我們先從 EPS 和 T&I 開始。 EPS 系統在本季繼續低於 ATS 水平，對嗎？所以下降了20%左右。在 T&I 業務中，我要提醒您，去年我們在這些業務中取得了一些顯著成長。因此，我們的 X 射線業務面臨嚴峻的競爭。

Among the other T&I business, on our optical business, we have our sensors that go into the front end of the market, we just call it WaferSense product line, that is continuing to grow nicely. It is a small part of the business, but it is growing nicely. The acoustic test and inspection part of the business is also growing, which is more on the front end and on some new memory applications. The optical side, the parts are fine, the systems are behind. So we fundamentally still believe the test and inspection business will be lower declines when compared to our dispense business. What you've got mixed in there is some tough comps in our X-ray business.

在其他T&I業務中，在我們的光學業務中，我們的感測器進入了市場的前端，我們稱之為WaferSense產品線，它正在繼續良好的成長。雖然它只佔業務的一小部分，但發展勢頭良好。聲學測試和檢驗部分的業務也在成長，更多的是在前端和一些新的記憶體應用上。光學方面，零件很好，系統落後。因此，我們從根本上仍然相信，與我們的分配業務相比，測試和檢驗業務的下降幅度將會更低。我們的 X 光業務中存在一些艱難的競爭。

In all of these cases, the teams are doing an incredible job doing 3 things. One, they are certainly strengthening their delivery and quality performances. They are moving manufacturing closer to our customers. So we have got a new manufacturing and distribution location coming up in India to support our electronic customers who are shifting focus into India. Third, we have very exciting new products that are being released by our test and inspection business. Our new MXI line products are well received in the marketplace. We've got a new updated software for our AXI business that is hitting the market. And in our dispense business, you certainly see our Vantage product as well as a new coating product lines, again, all hitting the market. So we're using this time to really position the business for growth.

在所有這些情況下，團隊在三件事上都做了令人難以置信的工作。第一，他們確實正在加強交付和品質績效。他們正在使製造更接近我們的客戶。因此，我們在印度建立了一個新的製造和分銷地點，以支持我們將重點轉移到印度的電子客戶。第三，我們的測試和檢驗業務正在發布非常令人興奮的新產品。我們的新 MXI 系列產品在市場上廣受好評。我們為 AXI 業務推出了一款新的更新軟體，現已上市。在我們的分配業務中，您肯定會看到我們的 Vantage 產品以及新的塗料產品線再次推出市場。因此，我們正在利用這段時間來真正定位業務以實現成長。

Great. And then a similar one in IPS, I'm wondering if you could go into the state of phasing of demand and comparisons for the polymer and adhesives, general assembly pieces. I think coatings stood out as maybe the strongest piece in the quarter for non-ARAG IPS.

偉大的。然後是 IPS 中的類似情況，我想知道您是否可以進入需求階段以及聚合物和黏合劑、通用裝配件的比較狀態。我認為塗料可能是本季非 ARAG IPS 中最強的部分。

Yes. Our coatings business is doing an incredible market demand and really delivering on the growth opportunities. So we're very happy about the performance there. If you think about our adhesive business, in general, 12 out of 13 quarters or 12 out of 14 quarters, we have been growing. So pretty strong growth. Our expectation is still, as we finish the year, we would be flat to slightly up. So that is in a good spot. Particularly our packaging part of our business is doing incredibly well.

是的。我們的塗料業務正在滿足令人難以置信的市場需求，並真正實現了成長機會。所以我們對那裡的表現非常滿意。如果你想想我們的黏合劑業務，一般來說，13 個季度中有 12 個季度或 14 個季度中有 12 個季度我們一直在成長。如此強勁的成長。我們的預期仍然是，到今年結束時，我們的業績將持平或略有上升。所以這是一個好地方。特別是我們業務的包裝部分做得非常好。

If you think about our plastics business, again, you had record growth in those businesses for the last 2 years. And this year, they would face some tough comp. And so that will be slightly lower. We don't talk about sales by individual divisions. But generally speaking, what I will tell you is our plastic business is slightly lower than their record last 2 years, right? So hopefully, that gives you enough color around the different businesses.

如果您再考慮一下我們的塑膠業務，您會發現這些業務在過去兩年中實現了創紀錄的成長。今年，他們將面臨一些艱難的比賽。所以這個數字會稍微低一點。我們不談論各部門的銷售額。但總的來說，我要告訴你的是，我們的塑膠業務比他們過去兩年的記錄略低，對吧？希望這能讓你對不同的業務有足夠的了解。

Yes. Terrific. Thank you, Naga.

是的。了不起。謝謝你，娜迦。

And one last thing I would add in our adhesive business. Certainly, parts are significantly up when compared to our system businesses. This is some of the -- this is one of the reasons when we talk -- when Steve talks about sales mix, certainly, this was very helpful.

我要在我們的黏合劑業務中添加最後一件事。當然，與我們的系統業務相比，零件的數量顯著增加。這是一些——這是我們談論的原因之一——當史蒂夫談論銷售組合時，當然，這非常有幫助。

Yes, you're saying less system sales in the quarter was sort of neutralized by really strong recurring revenue growth?

是的，您是說本季系統銷售額的減少被真正強勁的經常性收入成長所抵消？

Yes. Recurring revenue growth.

是的。經常性收入增長。

(Operator Instructions) Your next question comes from the line of Chris Dankert with Loop Capital.

（操作員說明）您的下一個問題來自 Loop Capital 的 Chris Dankert。

I guess just return to ARAG for a moment. Given that agriculture markets kind of come off peak here, is there any risk around the expected synergies for that deal? And maybe just how do we think about the cost structure of that business in the context of the current slowdown here?

我想暫時回到 ARAG 吧。鑑於農業市場已脫離高峰，該交易的預期綜效是否有任何風險？也許在當前經濟放緩的背景下，我們如何考慮該業務的成本結構？

Yes. I think there are -- if you remember, when we acquired ARAG, this is a complete new division for the company. Hence, there were no cost synergies baked into our valuation model. It was mostly based on our ability to continue to grow with the market. Clearly, with the market being down and our own expectations that it wouldn't follow the market, not panning out the way we had expected, certainly puts the sales part of our plan behind.

是的。我認為，如果您還記得，當我們收購 ARAG 時，這是公司的一個全新部門。因此，我們的估值模型中沒有考慮成本綜效。這主要是基於我們繼續隨市場成長的能力。顯然，隨著市場的下滑，我們自己的預期是它不會跟隨市場，不會按照我們預期的方式發展，這肯定會讓我們計劃的銷售部分落後。

But I'd still remind you, great technology, great end market with precision agriculture, long-term solid growth opportunities for us as a company, market leader in Europe, market leader in South America, 2 big geographies. Certainly, we have opportunities as we think about North America, we fully acknowledge that our existing competitors who do a nice job in North America, but we do believe that is an opportunity for us to continue to think about it.

但我仍然要提醒您，偉大的技術、精準農業的巨大終端市場、我們作為一家公司、歐洲市場領導者、南美市場領導者以及兩大地區的長期穩定成長機會。當然，當我們考慮北美時，我們有機會，我們完全承認我們現有的競爭對手在北美做得很好，但我們確實相信這是我們繼續思考的機會。

I think that was just kind of my -- the crux of my question. When you brought it on board, there was no -- the expectation of a slowdown. There was no cost side to the economics there, I guess. Has that -- it doesn't sound like that has changed. It sounds like we're just going to kind of manage through -- we're not contemplating any sort of adjustment to decrementals on that business.

我認為這就是我的問題的癥結所在。當你把它納入考慮時，並沒有放緩的預期。我猜，那裡的經濟學沒有成本方面的因素。有沒有——聽起來好像沒有改變。聽起來我們只是要進行管理——我們不會考慮對該業務的減量進行任何形式的調整。

No. This -- if you think about this business, even with the reduction in revenue, their profit margins are north of the company's margins.

不，如果你考慮這項業務，即使收入減少，他們的利潤率仍高於公司的利潤率。

Got it. Got it. Perfect. And I think just for my follow-up, on the electronic side of the business, particularly on the electronic processing within ATS, the short hand, at least for me, has always kind of that's the handset cycle. Is there anything else that's kind of weighing down that business right now beyond handsets or is that still kind of the main driver there?

知道了。知道了。完美的。我認為就我的後續工作而言，在業務的電子方面，特別是在 ATS 內的電子處理方面，至少對我而言，速記始終是手機週期。除了手機之外，目前還有其他因素對該業務造成壓力嗎？

Yes. Chris, I mean over the last 4, 5 years, we certainly have moved away from the handset as an important driver in that business. Handset is still a small part of the business. But really, semiconductor advanced packaging is where this business is growing, and in components such as camera modules and things like that. Automotive electronics also has become a bigger part of the business. So it's no longer just a handset business. It is semiconductor, automotive electronics, and a small handset presence still.

是的。克里斯，我的意思是，在過去的四、五年裡，我們確實不再將手機作為這項業務的重要驅動力。手機仍然只佔該業務的一小部分。但實際上，半導體先進封裝是該業務成長的領域，包括相機模組等組件。汽車電子也已成為該業務的重要組成部分。因此，它不再只是手機業務。它仍然是半導體、汽車電子和小型手機的存在。

Your next question comes from the line of Walter Liptak with Seaport Research.

您的下一個問題來自 Seaport Research 的 Walter Liptak。

And yes, I just want to try a couple of follow-ups on ARAG. You talked about the market in Europe, Latin America. Are all the markets getting picked the same way by the cycle?

是的，我只是想在 ARAG 上嘗試一些後續行動。您談到了歐洲、拉丁美洲的市場。所有市場的周期選擇方式都是一樣的嗎？

Yes. If you look at some of the market reports that are out there, pretty much across the world, the market cycle seems to be in the down 20% to 25%. And that is North America, that is Europe, that is South America. And even precision ag, which was typically a growth engine.

是的。如果你看一下世界各地的一些市場報告，你會發現市場週期似乎處於下降 20% 到 25% 的階段。那是北美，那是歐洲，那是南美。甚至還有精密農業，它通常是成長引擎。

Okay. And the follow-up is that, the precision ag market, is -- what's different about this cycle? The precision ag is slowing as it's related to destocking or something?

好的。後續的問題是，精準農業市場－這個週期有什麼不同？精密農業正在放緩，因為它與去庫存或其他什麼有關？

I think there is some amount of destocking, but that is also -- we are -- I'd tell you, our knowledge of agriculture when compared to our knowledge of electronics or industrial nondurable is sort of -- obviously, we've been in this business for a short period of time, so our knowledge is not as deep as we would have in other end markets. But our understanding is that there is some amount of destocking, but there is certainly some hesitancy in investing in large implements even. And so that is what you're seeing, is that reduction in OEM. And this is unique because, as we looked at this business and evaluated it, one of the things we were -- we did a lot of work around is to understand the relationship between cycle in this business' performance. And this seems a little bit unique when compared to their prior performance.

我認為存在一定程度的去庫存，但這也是——我們——我會告訴你，與我們對電子或工業非耐用品的知識相比，我們對農業的了解是——顯然，我們一直在我們從事這項業務的時間很短，因此我們的知識不像其他終端市場那樣深入。但我們的理解是，庫存減少，但即使是投資大型機具，也肯定會有些猶豫。這就是你所看到的，原始設備製造商的減少。這是獨一無二的，因為當我們研究並評估這項業務時，我們做了大量工作，就是了解該業務績效週期之間的關係。與他們之前的表現相比，這似乎有點獨特。

So we're still figuring it out, but I will tell you that it is impacting us more than we had expected. And it is impacting us, and that's what our current situation is. And we still like the products. We still like the people. We're still working on continuing to integrate the business, which is going really well. And I think that's kind of where we are at with ARAG.

所以我們仍在解決這個問題，但我會告訴你，它對我們的影響超出了我們的預期。它正在影響我們，這就是我們目前的情況。我們仍然喜歡這些產品。我們還是喜歡這裡的人。我們仍在努力繼續整合業務，進展非常順利。我認為這就是我們與 ARAG 的處境。

Okay. Great. And just as the -- I guess a follow-up question, is the electronics part of the business, you mentioned that there's a timing issue between the front end and the back end. Can you help educate us just how long is that? Is it measured in months or years? How should we think of that?

好的。偉大的。正如我想的一個後續問題是業務的電子部分，您提到前端和後端之間存在時序問題。您能幫我們了解一下這有多長嗎？是以月還是年來衡量的？我們該如何看待這一點？

Yes. We don't -- by now, right, look, based on our expectations in the first quarter, we had expected that this would follow quickly or thereafter. That has not happened. So our guidance doesn't imply a significant pickup in electronic market for the rest of the year. And as we approach 2025, we'll be in a better place to provide you more color as to when it might actually pick up. But I think what is important to remember is that we have derisked our outlook for electronics for the rest of the year.

是的。到目前為止，我們還沒有看到，根據我們對第一季的預期，我們預計這會很快或之後發生。但那並沒有發生。因此，我們的指導並不意味著今年剩餘時間電子市場將大幅回升。隨著 2025 年的臨近，我們將處於一個更好的位置，為您提供更多關於它何時可能真正回升的信息。但我認為重要的是要記住，我們已經對今年剩餘時間的電子產品前景進行了風險評估。

Your next question comes from the line of Andrew Buscaglia with BNP Paribas.

您的下一個問題來自法國巴黎銀行的安德魯·巴斯卡利亞 (Andrew Buscaglia)。

I wanted to go back to the ATS segment. Just given the nature of Nordson having a more direct sales model gives investors a lot of confidence in what you guys are saying. But what is it that these customers are saying to you that's making it so difficult to predict when the spend is going to move forward?

我想回到 ATS 部分。鑑於諾信擁有更直接的銷售模式的性質，投資者對你們所說的話充滿信心。但這些客戶對您說的話是什麼讓您很難預測支出何時會繼續前進？

Yes. I think it's a great question, Andrew. What I will tell you is that none of the projects we are working on with our customers, that somebody come to us and said, look, this is all off the table, it is canceled. That is not the case. We continue to work with our customers on projects and opportunities as they bring on new technologies for AI, as they bring on more technologies for much smaller, much more complicated chips than we have.

是的。我認為這是一個很好的問題，安德魯。我要告訴你的是，我們正在與客戶合作的專案中，沒有一個是有人來找我們說，看，這一切都不可行了，它被取消了。事實並非如此。我們將繼續與客戶合作進行專案和機遇，因為他們為人工智慧帶來了新技術，為比我們更小、更複雜的晶片帶來了更多技術。

So that work, the project work, continues. But what it has not translated is, from that project work into system orders, it has not translated yet, nor have people completely canceled projects either, right? So we are sort of in this middle time, call it uncertainty. I can only talk to you about what we're seeing in terms of customer sort of actions rather than what is the broader trend here. There seems to be a reluctance in translating work that they're doing into systems sales or systems orders, right? We continue to do well on our parts, but there seems to be some reluctance, and I'm -- and not exactly understand the core reasons as to why our customers have reluctance, but there is reluctance.

因此，這項工作、專案工作仍在繼續。但它沒有翻譯的是，從那個項目工作到系統訂單，它還沒有翻譯，也沒有人完全取消項目，對嗎？所以我們正處於這個中間時期，稱之為不確定性。我只能與您討論我們在客戶行為方面所看到的情況，而不是這裡更廣泛的趨勢。他們似乎不願意將他們正在做的工作轉化為系統銷售或系統訂單，對吧？我們在我們的部分繼續做得很好，但似乎有些不情願，我並不完全理解為什麼我們的客戶不情願的核心原因，但確實有不情願。

Maybe to dig in a little bit deeper, regionally, is there something unusual going on? Like is one region worse than the other? And I'm thinking China here. I don't know. What are you seeing by geography, I guess?

也許更深入地挖掘一下，從區域來看，是否有任何不尋常的事情發生？例如一個地區比另一個地區差嗎？我在這裡想到的是中國。我不知道。我猜你從地理上看到了什麼？

Yes. We're not seeing significantly different behavior from geography, geography. We still -- we work with all of the major semiconductor manufacturers. There are -- it's not like -- obviously, we continue to sequentially grow. Sequentially, we have better order entry. So it is not like we're continuing to decline or we are not -- we're just flat in the bottom. We're starting to come out. It is just not as fast as we had hoped.

是的。我們沒有看到與地理位置有顯著不同的行為。我們仍然與所有主要半導體製造商合作。顯然，我們正在繼續增長。因此，我們有更好的訂單輸入。因此，我們並不是繼續下滑，也不是沒有——我們只是底部持平。我們開始出來了。只是沒有我們希望的那麼快。

I think that is probably what we need to take away, is that our reduction in guidance is mainly because we had a far steeper implied ramp in our second half, that's not happening. And that is not happening because the orders we are getting are not at the same rate as we had hoped. It is at a little flatter rate than we had hoped for. And we don't see a whole lot of difference in regions.

我認為這可能是我們需要帶走的，我們減少指導主要是因為我們在下半年有一個更陡峭的隱含斜坡，但這種情況並沒有發生。但這並沒有發生，因為我們收到的訂單速度與我們希望的不一樣。它的速度比我們希望的要平一些。我們沒有看到地區之間有很大差異。

Clearly, when compared to last year, activity in Asia has picked up, that we can tell you, right? Certainly, Southeast Asia is better than China for us, and that's just for us. Certainly, our automotive electronics customers in Mexico are significantly better for us. Europe is okay. So that's, broadly, that's how we think about the ATS business.

顯然，與去年相比，亞洲的活動有所回升，我們可以告訴您，對嗎？當然，東南亞對我們來說比中國好，而這只是對我們而言。當然，我們在墨西哥的汽車電子客戶對我們來說明顯更好。歐洲沒問題。總的來說，這就是我們對 ATS 業務的看法。

Your next question comes from the line of Jeff Hammond with KeyBanc Capital Markets.

您的下一個問題來自 KeyBanc Capital Markets 的 Jeff Hammond。

So just if we step back and think about capital allocation, I think you guys have kind of been on the wrong side of cycle timing around CyberOptics and ARAG now. And I'm just wondering how you think about cyclicality and timing as you kind of look at deals going forward.

因此，如果我們退後一步考慮資本配置，我認為你們現在在 Cyber​​Optics 和 ARAG 的周期時間安排上有點錯誤。我只是想知道，當您考慮未來的交易時，您如何看待週期性和時機。

Yes. I think it's a fair question, and we have spent time thinking about this. We certainly need to put that into part of our equation as we think about acquisitions and deals. But having said that, I would tell you the technology behind each of these deals are spot on for us as a company to continue to expand our portfolio of precision technologies. We certainly have short-term pressure because of the market conditions, but we believe that the long-term drivers in both these bases are pretty sound, and we like the technologies we have and the people we've added.

是的。我認為這是一個公平的問題，我們已經花了時間思考這個問題。當我們考慮收​​購和交易時，我們當然需要將其納入我們的方程式中。但話雖如此，我想告訴你，每筆交易背後的技術對於我們作為一家公司來說都是正確的，可以繼續擴大我們的精密技術組合。由於市場狀況，我們當然面臨短期壓力，但我們相信這兩個基地的長期驅動因素都相當健全，而且我們喜歡我們擁有的技術和我們增加的人員。

Finally, what I will tell you, it's not offered as an excuse, if you so will, right? But it is -- we really don't control when high-quality assets come to market. We continue to remain focused on our strategy of building strong precision technology portfolio, continue to deploy NBS Next. And we believe the long-term strategic fit of these businesses. And I know as we get past these market conditions, we're going to be incredibly happy that these are part of Nordson portfolio. So I think it's a fair question you asked, but that's what we're working on.

最後，我要告訴你的是，這不是一個藉口，如果你願意的話，對吧？但事實是——我們確實無法控制優質資產何時上市。我們繼續專注於建立強大的精密技術組合的策略，繼續部署 NBS Next。我們相信這些業務的長期策略契合。我知道，當我們克服這些市場狀況時，我們會非常高興這些產品成為諾信產品組合的一部分。所以我認為你問的問題很合理，但這就是我們正在研究的問題。

Okay. Appreciate the color there, Naga. Just on decremental margins in the second half, I mean you guys have done a pretty good job with NBS Next kind of limiting the decrementals. But I think at least in our model, initially, we had pretty severe decrementals. So just maybe how you're thinking about decrementals and holding the line.

好的。欣賞那裡的顏色，娜迦。只是在下半年的遞減幅度上，我的意思是你們在 NBS Next 方面做得很好，限制了遞減。但我認為至少在我們的模型中，最初，我們有相當嚴重的減量。所以也許你是如何思考遞減、堅持到底的。

Yes. If you think about decrementals, I think we think about decrementals inside the company mostly for our core businesses. That is probably the best apples-to-apples comparison. And if you look at our core business, apples-to-apples decrementals were pretty strong in the quarter. But if you look at the total company's, given ARAG performance where you have lower sales yet you have the full load of SG&A, your decrementals at the total company level will look skewed. But without ARAG, we had some pretty strong decrementals. And you have to find number? You're looking for a number. Sorry, Steve, you want to go ahead add?

是的。如果你考慮減員，我認為我們考慮公司內部的減員主要是為了我們的核心業務。這可能是最好的同類比較。如果你看看我們的核心業務，你會發現本季的同業遞減非常強勁。但如果你看看整個公司的業績，考慮到 ARAG 的業績，你的銷售額較低，但 SG&A 卻滿載，你在整個公司層面的減量看起來會有所偏差。但如果沒有 ARAG，我們就會出現一些相當強烈的減量。而且你必須找到號碼？您正在尋找一個號碼。抱歉，史蒂夫，您想繼續添加嗎？

Yes. No, no, I was just going to say, Jeff, what I'd also focus on, too, is just our EBITDA margins as well, right? I mean we -- I think we've been very successful in terms of generating strong EBITDA margins. I mean even Q2 was the fifth quarter in a row where we had EBITDA margins 31% or higher. And the last 3 years, we've delivered 30% or more EBITDA margins. And I think we're obviously well on our way to do that again here in 2024.

是的。不，不，我只是想說，傑夫，我也關注的是我們的 EBITDA 利潤率，對嗎？我的意思是，我認為我們在產生強勁的 EBITDA 利潤率方面非常成功。我的意思是，即使是第二季度，我們的 EBITDA 利潤率也已連續第五個季度達到 31% 或更高。過去 3 年，我們的 EBITDA 利潤率達到或超過 30%。我認為我們顯然正在順利地在 2024 年再次做到這一點。

And in the core businesses, Jeff, if you're asking for what is a target decremental, it is about 50 to 55. I would use 55 which is sort of in line with our gross margins because we want to stay invested in our precision technology innovation, we want to stay invested in our direct customer model. That is what we have done in the past and that's what we'll continue to do.

在核心業務中，傑夫，如果你問什麼是目標遞減，大約是 50 到 55。投資於我們的直接客戶模式。這就是我們過去所做的，也是我們將繼續做的。

But if you really put all of this in perspective, right? If you look at our full year, we're still -- our midpoint essentially implies a 1% growth over a record 2023. We're still expecting that we will deliver 31-plus percent EBITDA margins. We will still convert pretty strong on net income to free cash flow. In the quarter, we converted about 92%. So from an operational perspective, yes, the teams are dealing with some market conditions, but the operational performance of the company is in a pretty good place, and we continue to do that in this environment.

但如果你真的正確看待這一切，對嗎？如果你看看我們的全年情況，我們的中點基本上意味著比創紀錄的 2023 年增長 1%。我們仍將相當強勁的淨利潤轉換為自由現金流。本季度，我們的轉換率約為 92%。因此，從營運角度來看，是的，團隊正在應對一些市場狀況，但公司的營運績效處於相當好的位置，我們將在這種環境下繼續這樣做。

I will now turn the call back over to Naga for closing remarks. Please go ahead.

現在，我將把電話轉回給納加，讓其致閉幕詞。請繼續。

Our solid second quarter operating performance reflects the strength of our diversified markets, close to the customer model, differentiated precision technologies, and rigorous implementation of NBS Next Growth Framework. We remain focused on the deployment of the Ascend strategy that positions us well for long-term profitable growth. With that in mind, we are excited to announce that we will be hosting an Investor Day in New York on Thursday, October 3, 2024. We'll be sharing more information about the details of the event this summer but please save the date on your calendars for the afternoon of October 3.

我們第二季穩健的經營業績反映了我們多元化市場的實力、貼近客戶的模式、差異化的精密技術以及國家統計局下一步成長框架的嚴格實施。我們仍然專注於 Ascend 策略的部署，這為我們的長期獲利成長奠定了良好的基礎。考慮到這一點，我們很高興地宣布，我們將於 2024 年 10 月 3 日星期四在紐約舉辦投資者日活動。 3 日下午的月曆。

Again, I want to thank Nordson's employees for their commitment, which makes these results possible. Thank you for your time and attention on today's call. Have a great day.

我要再次感謝諾信員工的付出，而正是他們的付出才使得這些結果成為可能。感謝您抽出寶貴時間參加今天的電話會議。祝你有美好的一天。

Ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝大家的加入，現在可以斷開連線了。