Enpro Inc (NPO) 2024 Q2 法說會逐字稿

Hello and welcome to the Enpro Q2 2024 Earnings Conference Call and Webcast. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加 Enpro 2024 年第二季財報電話會議及網路廣播。（操作員指示）謹此提醒，本次會議正在錄製中。

It's now my pleasure to turn the call over to James Gentile, Vice President, Investor Relations. Please go ahead, James.

現在我很高興將電話轉給投資人關係副總裁 James Gentile。請繼續，詹姆斯。

Thank you and good morning, everyone. Welcome to Enpro's second quarter 2024 earnings conference call. I will remind you that our call is being webcast at enpro.com, where you can find the presentation that accompanies this call.

謝謝大家，早安。歡迎參加 Enpro 2024 年第二季財報電話會議。我想提醒您，我們的電話會議正在 enpro.com 上進行網路直播，您可以在其中找到本次電話會議附帶的簡報。

With me today is Eric Vaillancourt, our President and Chief Executive Officer and Joe Bruderek, Executive Vice President and Chief Financial Officer. During today's call, we will reference a number of non-GAAP financial measures.

今天與我在一起的有我們的總裁兼執行長 Eric Vaillancourt 和執行副總裁兼財務長 Joe Bruderek。在今天的電話會議中，我們將參考一些非公認會計準則財務指標。

Tables reconciling the historical non-GAAP measures to the comparable GAAP measures are included in the appendix to the presentation materials. Also, a friendly reminder that we will be making statements on this call that are not historical facts and that are considered forward-looking in nature. These statements involve a number of risks and uncertainties, including those described in our filings with the SEC.

演示資料的附錄中包含將歷史非 GAAP 衡量標準與可比較 GAAP 衡量標準進行核對的表格。另外，友好提醒我們，我們將在這次電話會議上發表的聲明不是歷史事實，而是前瞻性的。這些聲明涉及許多風險和不確定性，包括我們向 SEC 提交的文件中所述的風險和不確定性。

Also note that during this call, we will be providing full-year 2024 guidance, which excludes unforeseen impacts from these risks and uncertainties. We do not undertake any obligation to update these forward-looking statements.

另請注意，在本次電話會議期間，我們將提供 2024 年全年指導，其中排除了這些風險和不確定性帶來的不可預見的影響。我們不承擔更新這些前瞻性聲明的任何義務。

It is now my pleasure to turn the call over to Eric Vaillancourt, our President and Chief Executive Officer. Eric?

現在我很高興將電話轉給我們的總裁兼執行長 Eric Vaillancourt。艾瑞克？

Thanks, James and good morning, everyone. Thank you for joining us today as we review our results for the second quarter and provide an update that includes the narrowing of our outlook for full-year 2024. We performed well in the second quarter with strong profitability in the Sealing Technologies segment, and sequential improvement in both sales and adjusted segment EBITDA in Advanced Surface Technologies.

謝謝詹姆斯，大家早安。感謝您今天加入我們，我們將回顧第二季的業績並提供更新，其中包括縮小 2024 年全年展望。我們在第二季度表現良好，密封技術領域的獲利能力強勁，先進表面技術領域的銷售額和調整後的 EBITDA 也連續改善。

Consolidated adjusted EBITDA margins exceeded 27% for the first time. We are pleased with the team's agility this quarter as profitability shined even as soft demand persists in certain areas of the business.

合併調整後 EBITDA 利潤率首次超過 27%。我們對團隊本季的敏捷性感到滿意，因為即使某些業務領域的需求持續疲軟，獲利能力仍表現出色。

Again, this quarter, our people worked very hard to achieve these results that demonstrate the compelling balance inherent in the Enpro portfolio and our ability to execute well on a variety of macroeconomic scenarios. We would like to thank our 3,500 colleagues across the company for their outstanding contributions and commitment to the company's ongoing performance.

本季度，我們的員工再次非常努力地取得了這些成果，這些成果證明了 Enpro 投資組合固有的令人信服的平衡以及我們在各種宏觀經濟情景下良好執行的能力。我們要感謝公司 3,500 名同事對公司持續績效的傑出貢獻和承諾。

Now, onto the second quarter performance. After my review, I will turn the call over to Joe for a more detailed discussion of our results and our outlook for the balance of 2024. Operating performance in the Sealing Technologies segment was excellent during the second quarter.

現在，進入第二季的業績。經過審核後，我會將電話轉給 Joe，以便更詳細地討論我們的業績以及 2024 年剩餘時間的展望。第二季密封技術部門的營運表現非常出色。

At AST, we delivered sequential improvement in both sales and adjusted segment EBITDA. While the semiconductor market remains soft, particularly for the semiconductor capital equipment, we have seen pockets of continued growth in the beginnings of recovery. We continue to believe the low point of AST segment performance is behind us.

在 AST，我們的銷售額和調整後的部門 EBITDA 均實現了連續改善。雖然半導體市場仍然疲軟，特別是半導體資本設備，但我們在復甦之初看到了持續成長的情況。我們仍然相信 AST 細分市場業績的低點已經過去。

In Sealing Technologies, adjusted segment EBITDA margin exceeded 35%. Strength in nuclear and aerospace, as well as strategic pricing actions and the contribution from AMI more than offset weakness in commercial vehicle OEM and Asian industrial markets.

在密封技術領域，調整後的部門 EBITDA 利潤率超過 35%。核能和航空航太領域的實力、戰略定價行動以及 AMI 的貢獻足以抵消商用車 OEM 和亞洲工業市場的疲軟。

Food and pharma sales increased during Q2, although demand remains choppy, particularly in Europe. Favorable mix, cost controls, supply chain effectiveness were also contributing factors to the record quarterly results in this segment. Our continued positive momentum and profitability in the Sealing Technologies reflects the underlying strength of this segment.

儘管需求仍然波動，尤其是在歐洲，但第二季食品和藥品銷售額有所成長。有利的組合、成本控制、供應鏈效率也是該領域創紀錄季度業績的因素。我們在密封技術領域持續的積極勢頭和盈利能力反映了該領域的潛在實力。

Our focus on applied engineering differentiation, compelling aftermarket characteristics, incremental investments in organic growth and continuous improvement opportunities, has created a foundation for profitable growth. Additionally, we continue to pursue strategic opportunities in adjacent markets that build upon our core competencies in safeguarding critical environments.

我們對應用工程差異化、引人注目的售後市場特徵、有機成長的增量投資和持續改進機會的關注，為獲利成長奠定了基礎。此外，我們繼續在鄰近市場尋求策略機會，這些機會建立在我們保護關鍵環境的核心能力之上。

We are very pleased with the performance of the Sealing Technologies segment and our outlook remains constructive. In the Advanced Surface Technologies segment, revenue declined 12% year-over-year, adjusted segment EBITDA margins up 21.7%, improved 160 basis points sequentially. Strategic growth investments and operational improvement initiatives proceed as we continue to position AST for long-term growth.

我們對密封技術部門的表現非常滿意，我們的前景仍然具有建設性。在先進表面技術領域，營收年減 12%，調整後的部門 EBITDA 利潤率成長 21.7%，季增 160 個基點。隨著我們繼續將 AST 定位於長期成長，策略性成長投資和營運改善計劃仍在繼續。

Areas of continued growth such as in our precision cleaning business and a brighter outlook for both our coating and refurbishment solutions, and certain critical end-chamber tools gives us confidence that the AST segment will grow sequentially for the remainder of 2024.

我們的精密清潔業務等持續成長的領域以及我們的塗層和翻新解決方案以及某些關鍵端室工具的光明前景使我們相信 AST 細分市場將在 2024 年剩餘時間內持續成長。

Long-term, we are focused on executing our multi-year strategy to drive growth in AST's attractive markets with key capacity expansions and efficiency improvements that showcase our technological and process advantages that provide our customers with essential value in the semiconductor supply chain.

從長遠來看，我們致力於執行我們的多年策略，透過關鍵的產能擴張和效率改進來推動AST 有吸引力的市場的成長，從而展示我們的技術和流程優勢，為我們的客戶在半導體供應鏈中提供重要的價值。

Our balance sheet remains in excellent shape as we continue to pursue a variety of growth opportunities, both organically and through strategic acquisitions. We are pleased with our second quarter and our first-half performances despite well understood macro headwinds. We expect strong execution and disciplined capital allocation to continue as we drive our value-creating strategy forward. Joe?

我們的資產負債表保持良好狀態，我們繼續透過有機成長和策略收購尋求各種成長機會。儘管存在眾所周知的宏觀阻力，但我們對第二季和上半年的表現感到滿意。我們預計，隨著我們推動價值創造策略的發展，強而有力的執行力和嚴格的資本配置將持續下去。喬？

Thank you, Eric and good morning, everyone. Let's now go into the details of our second-quarter performance. In the second quarter, sales of $271.9 million decreased 1.8%, compared to the prior year and organic sales declined 5%, driven primarily by lower results in AST segment due to ongoing softness in semiconductor. Second-quarter adjusted EBITDA of $74 million increased 14%, compared to the prior-year period.

謝謝你，艾瑞克，大家早安。現在讓我們詳細了解第二季的業績。第二季銷售額為 2.719 億美元，較上年同期下降 1.8%，有機銷售額下降 5%，主要是由於半導體持續疲軟導致 AST 部門業績下降。第二季調整後 EBITDA 為 7,400 萬美元，與去年同期相比成長 14%。

Adjusted EBITDA margin of 27.2%, increased 380 basis points. Favorable mix, strategic pricing, lower corporate expenses and continuous improvement initiatives offset soft demand in certain markets, while other markets experienced resiliency and growth.

調整後 EBITDA 利潤率為 27.2%，增加 380 個基點。有利的組合、策略定價、較低的企業開支和持續改進措施抵消了某些市場的疲軟需求，而其他市場則經歷了彈性和成長。

Growth initiatives on new products and key capacity expansions continued, along with ongoing continuous improvement discipline and supply chain efficiency. Corporate expense of $10.5 million in the second quarter of 2024 was down from $15.6 million a year ago. Last year, corporate expense was unfavorably impacted by approximately $4 million due to mark-to-market valuation of awards under long-term equity incentive plans, compared to a favorable impact of approximately $1 million in the current quarter.

新產品和關鍵產能擴張的成長計畫仍在繼續，同時不斷改善紀律和供應鏈效率。2024 年第二季的企業支出為 1,050 萬美元，低於一年前的 1,560 萬美元。去年，由於長期股權激勵計畫下的獎勵按市值計價，公司費用受到約 400 萬美元的不利影響，而本季則受到約 100 萬美元的有利影響。

In 2023, we made changes to the structure of incentive plans that will mitigate the volatility of corporate expenses due to share price performance for the remainder of this year and eliminate variability thereafter. Adjusted diluted earnings per share of $2.08 increased almost 14%, largely driven by the factors that drove the adjusted EBITDA improvement year-on-year.

2023年，我們對激勵計畫的結構進行了更改，這將減輕今年剩餘時間因股價表現而導致的公司費用的波動性，並消除此後的波動性。調整後稀釋每股收益為 2.08 美元，成長近 14%，這主要是由推動調整後 EBITDA 同比改善的因素推動的。

Moving to a discussion of segment performance. Sealing Technologies sales of $184 million increased over 4% and organic sales were essentially flat. Strength in nuclear and aerospace markets, the contribution from AMI, strategic pricing actions and improved sales in food and pharma offset steep declines in commercial vehicle OEM revenue and soft general industrial demand in Asia.

接下來討論分部績效。Sealing Technologies 銷售額達到 1.84 億美元，成長超過 4%，有機銷售額基本上持平。核能和航空航太市場的強勁、AMI 的貢獻、戰略定價行動以及食品和製藥銷售的改善抵消了商用車 OEM 收入的急劇下降和亞洲一般工業需求的疲軟。

Our aftermarket positions in this segment continue to show stability as the critical nature of our innovative products and solutions differentiate. For the second quarter, adjusted segment EBITDA increased more than 16%. Strategic pricing, supply chain gains, the contribution from AMI, improved aftermarket mix and 80-20 discipline drove the segment's profit growth during the period.

由於我們創新產品和解決方案的關鍵性質與眾不同，我們在該領域的售後市場地位繼續保持穩定。第二季度，調整後的部門 EBITDA 成長超過 16%。策略定價、供應鏈收益、AMI 的貢獻、改善的售後市場組合和 80-20 紀律推動了該部門在此期間的利潤成長。

Adjusted segment EBITDA margin was 35.5% in the second quarter, up 360 basis points. For the first half of 2024, Sealing delivered adjusted segment EBITDA margins above 33%. As we have said since the beginning of the year, we expect to return to normal seasonal patterns in the segment this year, where we generally see the strongest first half.

第二季調整後的部門 EBITDA 利潤率為 35.5%，上升 360 個基點。2024 年上半年，Sealing 的調整後部門 EBITDA 利潤率超過 33%。正如我們自今年年初以來所說，我們預計今年該細分市場將恢復正常的季節性模式，我們通常會看到上半年最強勁的表現。

That said, underlying demand remains firm in our domestic and European general industrial markets. New products like Auto-Torq in our commercial vehicle market and new platform wins in commercial aerospace are incremental drivers for the segment's future performance. We also expect continued strength in our space exploration and sustainable power generation markets. We are excited about the various levers our team will pull to profitably grow the transformed Sealing technologies segment.

儘管如此，我們的國內和歐洲一般工業市場的潛在需求仍然強勁。我們的商用車市場中的 Auto-Torq 等新產品以及商業航空航太領域的新平台勝利是該細分市場未來表現的增量驅動力。我們也預期太空探索和永續發電市場將繼續保持強勁勢頭。我們對我們的團隊將利用各種槓桿來實現轉型後的密封技術領域的獲利成長感到興奮。

Turning now to AST. Second quarter sales of $88.1 million were down around 12% year-over-year and up modestly on a sequential basis. While soft semiconductor capital equipment spending persisted during the second quarter, we saw continued growth in certain areas, such as our precision cleaning solutions business, supporting leading edge nodes.

現在轉向 AST。第二季銷售額為 8,810 萬美元，年減約 12%，較上季小幅成長。雖然軟半導體資本設備支出在第二季度持續成長，但我們看到某些領域持續成長，例如支援領先節點的精密清潔解決方案業務。

Additionally, we saw more consistent signs of recovery in advanced coatings and refurbishment solutions as the second quarter progressed. Market forecast from a variety of sources suggest that while the overall semiconductor market is in a strong secular growth position long term. the timing and magnitude of an overall recovery in capital equipment spending continues to evolve and move to the right.

此外，隨著第二季的進展，我們看到先進塗料和翻新解決方案出現了更一致的復甦跡象。來自各種來源的市場預測表明，雖然整體半導體市場長期處於強勁的長期成長狀態。資本設備支出整體復甦的時機和幅度持續演變並向右移動。

In the second quarter, adjusted segment EBITDA decreased around 20% year-on-year. Adjusted segment EBITDA margin was 21.7%, down from last year, but up 160 basis points sequentially. The volume decline was the primary driver of the year-over-year reduction in profitability. Throughout the downturn, we have invested in targeted capacity expansions that will position AST well as the semiconductor market resumes the growth trajectory.

第二季度，調整後的分部 EBITDA 年減約 20%。調整後的分部 EBITDA 利潤率為 21.7%，比去年有所下降，但比上一季增加了 160 個基點。銷量下降是獲利能力較去年同期下降的主要原因。在整個經濟低迷時期，我們投資了有針對性的產能擴張，這將使 AST 在半導體市場恢復成長軌跡時處於有利地位。

In addition, we are pursuing a number of continuous improvement and optimization initiatives that will better position the segment long-term. Overall, we are pleased with the AST segment's performance through a challenging market environment. The segment has consistently maintained adjusted segment EBITDA margins in excess of 20% during the slowdown.

此外，我們正在實施一系列持續改進和優化舉措，以更好地長期定位該細分市場。總體而言，我們對 AST 細分市場在充滿挑戰的市場環境中的表現感到滿意。在經濟放緩期間，該部門調整後的 EBITDA 利潤率始終保持在 20% 以上。

Turning to the balance sheet and cash flow. Our net leverage ratio following our purchase of AMI in January stands at approximately two times trailing 12-month adjusted EBITDA. Free cash flow in the first half of 2024 was $35.5 million, down from $66.5 million last year.

轉向資產負債表和現金流量。1 月購買 AMI 後，我們的淨槓桿比率約為過去 12 個月調整後 EBITDA 的兩倍。2024 年上半年的自由現金流為 3,550 萬美元，低於去年的 6,650 萬美元。

Timing of working capital and to a lesser extent, higher cash tax payments; compared to last year, were the primary drivers of the year-over-year reduction. For the year, we continue to expect free cash flow to exceed $100 million. When we started the year, we expected capital expenditures to approximate $60 million. Some of this growth spending will push into next year based on supplier lead times and delivery schedules. We continue to be excited about our pipeline of organic growth opportunities as we invest to drive long-term high-margin growth.

營運資金的時機以及較小程度的更高的現金稅支付；與去年相比，這是年減的主要驅動因素。今年，我們繼續預期自由現金流將超過 1 億美元。年初時，我們預計資本支出約為 6,000 萬美元。根據供應商的交貨時間和交貨時間表，部分成長支出將推遲到明年。當我們投資推動長期高利潤成長時，我們繼續對我們的有機成長機會感到興奮。

We have strong financial flexibility to execute our strategic initiatives, both organically and through acquisitions that broaden our capabilities, while returning capital to shareholders. In the second quarter, we paid a $0.30 per share quarterly dividend with year-to-date payments totaling $12.7 million. In a steady state, assuming no acquisition activity in the second half, we expect to exit 2024 at a net leverage ratio around 1.6 times.

我們擁有強大的財務靈活性，可以透過有機方式和透過收購擴大我們的能力來執行我們的策略舉措，同時向股東返還資本。第二季度，我們支付了每股 0.30 美元的季度股息，年初至今支付總額為 1,270 萬美元。在穩定狀態下，假設下半年沒有收購活動，我們預期 2024 年退出時的淨槓桿率約為 1.6 倍。

Moving now to our current view of guidance. Taking into consideration all the factors that we know at this time, we are narrowing our full-year 2024 earnings guidance ranges and we also now expect total Enpro sales to be approximately flat compared to 2023 versus our previous revenue guidance of low-to-mid single-digit growth.

現在轉向我們當前的指導觀點。考慮到我們目前所知的所有因素，我們正在縮小 2024 年全年盈利指導範圍，我們現在還預計 Enpro 總銷售額將與 2023 年大致持平，而我們之前的收入指導為中低端個位數增長。

The primary factor in adjusting our sales view is the magnitude of the expected recovery in semiconductor capital equipment in the back half. We now expect adjusted EBITDA of between $260 million to $270 million and adjusted diluted earnings per share to range from $7 to $7.60 versus our previous view of $260 million to $280 million and $7 to $7.80 respectively.

調整我們銷售觀點的主要因素是下半年半導體資本設備的預期復甦幅度。我們目前預計調整後 EBITDA 為 2.6 億至 2.7 億美元，調整後攤薄每股收益為 7 至 7.60 美元，而我們先前預期的分別為 2.6 億至 2.8 億美元和 7 至 7.80 美元。

The normalized tax rate used to calculate adjusted diluted earnings per share remains at 25% and shares outstanding approximate $21 million. In AST, we expect sequential improvement in the back half, driven by continued growth in our advanced node cleaning business, a better outlook for coatings and refurbishment, and some demand improvement for certain critical in chamber tools.

用於計算調整後稀釋每股盈餘的標準化稅率仍為 25%，流通股約 2,100 萬美元。在 AST 方面，我們預計下半年將持續改善，這得益於我們的先進節點清潔業務的持續成長、塗層和翻新的更好前景以及某些關鍵腔室工具的需求改善。

In Sealing Technologies, we continue to see firm demand in certain shorter-cycle product lines and a return to normal seasonality in the segment, where the first half is slightly stronger than the second half. We continue to see strong backlog and positive mix that will help offset the continued weakness in commercial vehicle OEM demand.

在密封技術領域，我們繼續看到某些短週期產品線的需求強勁，並且該領域恢復到正常的季節性，上半年略強於下半年。我們繼續看到強勁的積壓和積極的組合，這將有助於抵消商用車原始設備製造商需求的持續疲軟。

I will now turn the call back to Eric for closing comments.

我現在將把電話轉回埃里克以徵求結束意見。

Thanks, Joe. We are delighted to have reported strong profitability in the face of demand weakness in certain of our markets.

謝謝，喬。我們很高興在某些市場需求疲軟的情況下實現了強勁的獲利能力。

Our balanced portfolio generates attractive margins and cash flow returns with several opportunities to advance our strategy and drive long-term high-margin growth. Every day, we deliver critical leading-edge solutions for our customers that safeguard critical environments and applications that meaningfully impact our lives. Thank you again, for joining us today. There is no better time to be a part of Enpro.

我們平衡的投資組合產生了有吸引力的利潤和現金流回報，並有許多機會推進我們的策略並推動長期高利潤成長。我們每天都為客戶提供關鍵的前沿解決方案，以保護對我們的生活產生重大影響的關鍵環境和應用程式。再次感謝您今天加入我們。現在是加入 Enpro 的最佳時機。

We will now welcome your questions.

我們現在歡迎您提出問題。

Thank you. We'll now be conducting a question-and-answer session. (Operator Instructions)

謝謝。我們現在將進行問答環節。（操作員說明）

Steve Ferazani, Sidoti & Co.

史蒂夫費拉扎尼 (Steve Ferazani)，Sidoti & Co.

Good morning, Eric, Joe. Appreciate all the detail on the call. First, I want to ask about the strength on the Sealing margins. Obviously, I mean, you noted some of your end markets are challenged, yet you still are generating you're still expanding those margins.

早安，埃里克，喬。欣賞通話中的所有細節。首先，我想問一下密封邊緣的強度。顯然，我的意思是，您注意到您的一些終端市場面臨挑戰，但您仍然在擴大這些利潤。

So, the question really is, how sustainable is that? How much of that is mix that may revert? Can you maintain pricing in this environment? And in general, are there some sustainable cost cuts that came in there as well? I know it's kind of a big broad question. but --

所以，真正的問題是，這有多可持續？其中有多少是可以恢復的混合？在這種環境下你能維持定價嗎？總的來說，是否也有一些可持續的成本削減？我知道這是一個很大的廣泛問題。但--

Thanks, Steve. I'll give you a big broad answer. The answer is, we execute very, very well on a variety of ways. We expect to hold on to price. We had some supply chain savings. Our mix and volume are very good. You see our commercial vehicle OEM sales are down. but the mix shift has been typically from 60/40 aftermarket OEM to about 70-30 right now.

謝謝，史蒂夫。我會給你一個廣泛的答案。答案是，我們在各種方面都執行得非常非常好。我們預計將維持價格不變。我們節省了一些供應鏈費用。我們的組合和音量都非常好。您會看到我們的商用車 OEM 銷量下降了。但現在的混合轉變通常是從 60/40 售後市場 OEM 轉變為約 70-30。

So, with much better aftermarket margins, it's propping up that commercial vehicle business. We have strong businesses that perform well in a variety of environments and it's really is just really good execution. Our focus on aftermarket sales continues to drive the way.

因此，憑藉更好的售後市場利潤，它正在支撐商用車業務。我們擁有在各種環境中表現良好的強大業務，這確實是非常好的執行力。我們對售後市場銷售的關注繼續推動這一趨勢。

Yes, I'll add Steve. We performed extremely well as you noted in the second quarter in Sealing with margins at 35%. We think we're sustainably in that 30% plus or minus a little bit range. Second quarter has historically been our strongest quarter.

是的，我會添加史蒂夫。正如您在第二季密封業務中所指出的那樣，我們的業績非常好，利潤率為 35%。我們認為我們可持續地處於 30% 左右的範圍內。從歷史上看，第二季是我們最強勁的季度。

We talked about the seasonality, where the second half will be slightly softer than the first half and that will come with slightly lower margins. But in general, we feel really good about the execution that our teams are delivering and we think we're sustainably in that 30% plus or minus range for Sealing margins.

我們談到了季節性，下半年的情況將比上半年略顯疲軟，因此利潤率也會略低。但總的來說，我們對我們團隊所提供的執行力感到非常滿意，我們認為我們的 Sealing 利潤率可持續保持在 30% 的正負範圍內。

Can you give a sense of how much new products might be contributing? I know you've been pretty excited about Auto-Torq and I'm assuming you get better pricing on some of these. Is that meaningful contribution, or is it given the size of that whole market not necessarily that material?

您能大概了解一下新產品可能貢獻多少嗎？我知道您對 Auto-Torq 非常感興趣，我假設您可以在其中一些產品上獲得更優惠的價格。這是有意義的貢獻，還是考慮到整個市場的規模不一定那麼重要？

It's incremental, but I wouldn't call it material.

它是漸進的，但我不會稱之為物質。

Okay, okay.

好吧，好吧。

That business will ramp up over time. We're limited by how much we can produce today. but the market is excited for the product and next year, it will be even better.

隨著時間的推移，這項業務將會增加。我們今天的生產量是有限的。但市場對該產品感到興奮，明年會更好。

Yes. And we continue to invest in future opportunities for growth in Auto-Torq. We're very pleased with early indications there. But as Eric noted, it's incremental at this point.

是的。我們將繼續投資 Auto-Torq 未來的成長機會。我們對那裡的早期跡象非常滿意。但正如埃里克指出的那樣，目前這是增量的。

I'd also like to add, we've been very successful in certain key critical components in both sustainable power generation on the nuclear and natural gas side, and also in commercial aerospace platforms and incremental kind of growth that we're seeing in space exploration.

我還想補充一點，我們在核能和天然氣方面的可持續發電以及商業航空航天平台和我們在太空中看到的增量增長方面的某些關鍵部件方面都非常成功勘探。

Are those better margin end markets?

那些利潤率較高的終端市場是嗎？

Generally, yes. And as we've kind of transformed the segment, we just want to kind of press, where we're strongest. We want to continue to invest, where we have the best advantages to kick up the growth rate a little bit and show really strong best-in-class margins. So, you got a nice order for WavePro this quarter. That's not meaningful in any ways in terms of size, but meaningful in the sense that we're getting the product accepted into the market.

一般來說，是的。當我們已經改變了這個細分市場時，我們只想在我們最強大的地方進行媒體報導。我們希望繼續投資，因為我們擁有最好的優勢，可以稍微提高成長率，並顯示出真正強勁的一流利潤率。因此，本季您獲得了一份不錯的 WavePro 訂單。就規模而言，這在任何方面都沒有意義，但從我們讓產品被市場接受的意義上來說是有意義的。

And again, the two thirds aftermarket position in this segment is a governing factor that we're super-excited about.

再說一遍，該細分市場中三分之二的售後市場地位是我們感到非常興奮的主導因素。

Excellent. If I could turn briefly to AST before I turn it over. In terms of the guidance, I mean, we've all heard some of the higher-profile earnings calls this quarter. And I know you sort of cited market sources for the -- saying the recovery might be a little bit slower to the right. But can you give a sense of specific customer conversations whether they have changed and whether the conversations have been more around timing versus the actual recovery?

出色的。如果我能在把它翻過來之前先簡單地翻一下 AST 就好了。就指導而言，我的意思是，我們都聽到了本季一些備受矚目的財報電話會議。我知道您引用了市場消息人士的說法，即右側的復甦可能會稍微慢一些。但是，您能否了解特定客戶的對話是否發生了變化，以及對話是否更多地圍繞時間而不是實際恢復進行？

I would say that if we're thinking about kind of the underlying, where we're focused is to kind of execute on where we're strongest. And I think less about customer conversations and more about kind of what's happening as the semiconductor industry has continued its recovery after almost a couple of years of pretty significant destocking. You've seen memory prices increase substantially, which is driving underlying market growth statistics for some of those external sources. But underlying capacity utilization is still light.

我想說的是，如果我們考慮某種根本原因，那麼我們關注的重點就是執行我們最擅長的地方。我較少考慮與客戶的對話，而更多地考慮隨著半導體行業在經過近幾年相當大的去庫存之後繼續復甦，正在發生的事情。您已經看到記憶體價格大幅上漲，這推動了其中一些外部來源的潛在市場成長統計數據。但潛在的產能利用率仍較低。

So, as capacity gets absorbed, semiconductor capital spending generally follows and we're seeing that pricing dynamic on units kind of drive industry statistics higher, the capacity utilization variables are still a little bit slower to recover.

因此，隨著產能被吸收，半導體資本支出通常會隨之而來，我們看到單位定價動態推動產業統計數據走高，但產能利用率變數的恢復速度仍然稍慢。

Okay.

好的。

And as I said that longer term, we have very strong positions in new platforms. We continue to invest in where we're strongest.

正如我所說，從長遠來看，我們在新平台上擁有非常強大的地位。我們繼續投資我們最擅長的領域。

Any update on --

任何更新--

The only thing we're seeing is just a little bit to the right.

我們唯一看到的就是稍微往右一點。

We're seeing some build plans a little bit to the right with customers, but that's it. Nothing out of the ordinary. It really is coming down to capacity utilization, just being a little slower.

我們看到一些建置計劃與客戶的想法有些偏差，但僅此而已。沒什麼不尋常的。這其實取決於容量利用率，只是速度慢了一點。

Fair enough. Thanks, everyone.

很公平。謝謝大家。

(Operator Instructions)

（操作員說明）

Ian Zaffino, Oppenheimer.

伊恩·扎菲諾，奧本海默。

Hey. good morning, guys. This is Isaac Sellhausen on for Ian. Thanks for taking all the questions. Just a follow-up on AST. Could you just touch on trends you've seen moving past the second quarter? Sounds like you've seen some improvement sequentially in a few areas that you noted.

嘿。早安，夥計們。我是艾薩克·塞爾豪森 (Isaac Sellhausen)，替補伊恩 (Ian)。感謝您提出所有問題。只是 AST 的後續行動。您能談談第二季之後的趨勢嗎？聽起來您已經在您注意到的幾個領域中連續看到了一些改進。

I guess, have things started to turn the corner yet as far as any positive inflection at the capital equipment side? I know you just commented on that. but maybe, if you could just touch on some of the growth areas that you've seen sequentially? Thanks.

我想，就資本設備方面的任何積極變化而言，事情是否已開始出現轉機？我知道你剛剛對此發表了評論。但也許，您是否可以談談您連續看到的一些成長領域？謝謝。

Our cleaning business is doing very well and adds throughout the whole cycle. So, that's grown basically every quarter. So that continues to be a source of strength. Our coatings business is starting to recover a little bit. I would call it green shoots, where we're getting some new orders here or there. We also see some of our in chamber parts picking up a little bit of momentum.

我們的清潔業務做得非常好，並且在整個週期中不斷增加。所以，基本上每季都在成長。因此，這仍然是力量的來源。我們的塗料業務開始略有復甦。我將其稱為“萌芽”，我們在這裡或那裡收到了一些新訂單。我們也看到我們的一些室內部件獲得了一點動力。

But again, it's just a gradual recovery. So, it's not a hockey stick, a little slower than we would have liked, but consistent and we're still very well positioned for long-term growth. Once we get through this recovery, I look for things to be very good.

但同樣，這只是一個逐漸的恢復。因此，這不是一根曲棍球棒，比我們希望的要慢一點，但始終如一，我們仍然處於長期增長的有利位置。一旦我們度過了這次復甦，我認為事情會變得非常好。

Okay. Understood. And then as far as the growth investments and sort of the continuous improvement initiatives that you've talked about in the segment, could you just remind us again, what those entail? And then as far as investments you've made in Asia and the US, sort of where we are with those investments as well? Thanks.

好的。明白了。至於您在該領域談到的成長投資和持續改善舉措，您能否再次提醒我們，這些意味著什麼？那麼就您在亞洲和美國的投資而言，我們在這些投資方面的進展如何？謝謝。

Well, our Arizona investment is just about ready to come online. We may even see a little bit of revenue this year, which will be earlier than expected. It won't be significant. It will be testing and ramping up, if you will. We also invested in Singapore. So, we're invested in key markets for expansion and we're well positioned there in both markets just waiting for business to take off there. In terms of continuous improvement efforts, it's really just Enpro operating system. It's just basic blocking and tackling.

好吧，我們在亞利桑那州的投資即將上線。今年我們甚至可能會看到一點收入，這會比預期要早。不會有什麼重大意義。如果你願意的話，它將進行測試和升級。我們也投資了新加坡。因此，我們在關鍵市場進行了投資以進行擴張，並且我們在這兩個市場都處於有利地位，只是等待業務起飛。就持續改進的努力而言，它實際上只是Enpro作業系統。這只是基本的攔截和攔截。

When you look at what we do in Sealing technologies, we do the same thing in AST. We just haven't owned those businesses as long. So, what you can see is that a little bit of facility consolidation. You're seeing some machining being moved around for lean activities, better utilization of people, better utilization of equipment and narrowing our footprint a little bit. So, it's a little bit of everything. It's not anything. There's a little bit of price, a little bit of supply chain savings. It's just basic good execution. And that team is getting the Enpro way, if you will and will continue to improve over time.

當你看看我們在密封技術方面所做的事情時，我們在 AST 方面做了同樣的事情。我們只是擁有這些企業的時間不長而已。所以，你可以看到一點點設施整合。您會看到一些加工被轉移以進行精益活動、更好地利用人員、更好地利用設備並稍微縮小我們的佔地面積。所以，一切都只是一點點。這不是什麼。有一點價格，一點供應鏈節省。這只是基本的良好執行力。如果您願意並且將隨著時間的推移繼續改進，那麼團隊正在採用 Enpro 方式。

Okay. Thank you very much.

好的。非常感謝。

Jeff Hammond, KeyBanc Capital Markets.

Jeff Hammond，KeyBanc 資本市場。

Hey Good morning, guys.

嘿，早上好，夥計們。

Morning, Jeff.

早安，傑夫。

Good morning.

早安.

Just I mean maybe, to put a finer point on AST sequential improvement, just should we look at 2Q to 3Q as being similar to 1Q to 2Q? Or is it a little bit stronger than that?

我只是想說，也許，為了更好地闡述 AST 順序改進，我們是否應該將 2Q 到 3Q 視為與 1Q 到 2Q 類似？或者說是比那個強一點點？

Jeff, as we talked about coming out of the first quarter, right, we expected really slight improvement second quarter over first quarter. I think we'll see a little bit more gradual than that going into the back half of the year, where we continue to see kind of mid-single-digit quarter-over-quarter improvement through the second half of the year, definitely more gradual than it looked like coming into the year, but still sequential improvement quarter-over-quarter through the rest of this year.

傑夫，正如我們談到第一季的情況一樣，我們預計第二季確實比第一季略有改善。我認為我們會看到比今年下半年更加漸進的情況，下半年我們將繼續看到中個位數的季度環比改善，絕對更多比今年看起來要緩慢，但在今年剩餘時間裡仍然逐季持續改善。

We continue to see good performance as we see our cleaning and refurbishment business moving into advanced nodes concentration there, continued strong growth through the cycle. And as Eric talked about, some of our refurbishment work and in-chamber tools are starting to pick up a little bit here and there. And again, it's just more gradual versus a strong bounce back and strong recovery in any given period.

我們繼續看到良好的業績，因為我們看到我們的清潔和翻新業務正在向那裡的先進節點集中，並在整個週期中持續強勁增長。正如埃里克所說，我們的一些翻新工作和室內工具開始有所改善。再說一次，與任何特定時期的強勁反彈和強勁復甦相比，它只是更加漸進。

Okay. That's helpful. And then just in sealing, I think we've been hearing PMI weakening and kind of softening in US short cycle. Maybe, outside of truck, it doesn't really seem like you're seeing that. Maybe, just talk about US short cycle and what you're kind of building in for the back half?

好的。這很有幫助。然後就在密封中，我認為我們已經聽到 PMI 疲軟以及美國短期週期的疲軟。也許，在卡車之外，你似乎並沒有真正看到這一點。也許，只是談談美國的短期週期以及您為後半段所做的準備？

We're not seeing that at this point, Jeff. We're building in our normal seasonality. If you look at our seasonality over time usually about 52% in the first half, 48% in the second half and that's what we're building into the model. We're still very strong in nuclear, still strong in space. So, there are some good things there, the mix and commercial vehicle is also part of it. Our demand is still pretty strong. So right now, we're just building a normal seasonality.

傑夫，我們目前還沒有看到這一點。我們正在按照正常的季節性進行建設。如果你觀察我們一段時間內的季節性，通常上半年約為 52%，下半年約為 48%，這就是我們在模型中建構的內容。我們在核方面仍然非常強大，在太空方面仍然非常強大。所以，那裡有一些好的東西，混合和商用車也是其中的一部分。我們的需求還是相當強勁的。所以現在，我們只是建立一個正常的季節性。

Yes. And I would add, we're not seeing any significant inventory destocking or stocking in any direction. Our order demand is in line with distribution and demand, and things still feel pretty firm right now as we head into the second half.

是的。我想補充一點，我們沒有看到任何重大的庫存去庫存或任何方向的庫存。我們的訂單需求與分銷和需求一致，隨著我們進入下半年，目前情況仍然相當堅挺。

Okay. And then just last one on CapEx. I think you said you thought $60 million. What do you think that number is? And I guess anything that you fall short, I'd assume, falls into '25?

好的。然後是資本支出的最後一項。我想你說過你認為 6000 萬美元。你認為這個數字是多少？我猜想，任何你未能達到的目標，我認為都會落入「25」？

Yes. I mean, we have a really strong pipeline of opportunities to invest in for an organic growth standpoint in both segments. We've talked about that this year. And heading into the year, we were executing towards the $60 million. It just looks like some of that spending may leak into next year a little bit in the magnitude of five plus or minus a little bit. And it's just timing of execution on the supply chain side and our suppliers' ability to get equipment to us at the right time.

是的。我的意思是，我們擁有非常強大的投資機會，可以在這兩個領域實現有機成長。我們今年已經討論過這個問題。進入今年，我們的目標是 6000 萬美元。看起來其中一些支出可能會以五加或減的幅度滲入明年。這只是供應鏈方面的執行時機以及我們的供應商在正確的時間向我們提供設備的能力。

So, we're still extremely committed to those projects and feel really excited about the long-term growth prospects we're investing behind. It's just timing of that spend is going to most likely leak into 2025 a little.

因此，我們仍然非常致力於這些項目，並對我們投資的長期成長前景感到非常興奮。只是這筆支出的時間很可能會稍微延後到 2025 年。

Okay. Perfect. Thanks, guys.

好的。完美的。謝謝，夥計們。

Thanks, Jeff.

謝謝，傑夫。

Thanks, Jeff.

謝謝，傑夫。

Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over to James for any further or closing comments.

謝謝。我們的問答環節已經結束。我想將發言權交還給詹姆斯，以徵求進一步或結束評論的意見。

Have a great day, everyone. Thank you for your interest.

祝大家有美好的一天。感謝您的關注。