Enpro Inc (NPO) 2025 Q1 法說會逐字稿

Greetings, and welcome to the Enpro Q1 2025 earnings conference call and webcast. (Operator Instructions). As a reminder, this conference is being recorded.

大家好，歡迎參加 Enpro 2025 年第一季財報電話會議和網路廣播。（操作員指令）。提醒一下，本次會議正在錄製中。

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

現在我很高興將會議交給投資人關係副總裁 James Gentile。請繼續，詹姆斯。

Thanks, Kevin, and good morning, everyone. Welcome to Enpro's first-quarter 2025 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. With me today is Eric Vaillancourt, our President and Chief Executive Officer; and Joe Bruderek, Executive Vice President and Chief Financial Officer.

謝謝，凱文，大家早安。歡迎參加 Enpro 2025 年第一季財報電話會議。我要提醒您，我們的電話會議將在 enpro.com 上進行網路直播，您可以在那裡找到伴隨此次電話會議的簡報。今天與我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。

During today's call, we will reference a number of non-GAAP financial measures. Tables reconciling the historical non-GAAP measures to the comparable GAAP measures are included in the appendix to the presentation materials.

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。將歷史非 GAAP 指標與可比較 GAAP 指標進行調整的表格包含在簡報資料的附錄中。

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. Also note during the call that we will be providing full-year 2025 guidance, which excludes unforeseen impacts from these risks and uncertainties. We do not undertake any obligation to update these forward-looking statements.

此外，友情提醒，我們在這次電話會議上發表的聲明並非歷史事實，而是前瞻性的。這些聲明涉及許多風險和不確定性，包括我們向美國證券交易委員會提交的文件中所描述的風險和不確定性。另請注意，在電話會議中，我們將提供 2025 年全年指導，其中不包括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陳述的任何義務。

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 your interest in Enpro as we discuss our latest quarterly results, along with an update on strategic initiatives and our current views for 2025. Before we discuss the quarter, I would like to recognize our colleagues across Enpro who are energized and focused on providing critical products and solutions to our customers while displaying discipline and agility and continuing to deliver exceptional commercial and financial results.

謝謝，詹姆斯，大家早安。感謝您對 Enpro 的關注，我們將討論最新的季度業績、策略舉措的最新情況以及我們對 2025 年的當前看法。在我們討論本季之前，我想表彰 Enpro 的同事，他們充滿活力，專注於為客戶提供關鍵產品和解決方案，同時表現出紀律性和敏捷性，並繼續提供卓越的商業和財務業績。

At Enpro, one of our overarching philosophies is the dual bottom line, which is our belief that outstanding financial performance and personal development are intertwined in such a way that one does not happen without the other. Consistent with this belief, we invest significant time and effort to develop strategic, agile leaders with a high degree of awareness and business acumen that thrive in a variety of economic environments.

在 Enpro，我們的首要理念之一是雙重底線，即我們相信出色的財務表現和個人發展是相互交織的，缺一不可。基於這個信念，我們投入了大量的時間和精力來培養具有高度意識和商業敏銳度的策略性、敏捷性的領導者，能夠在各種經濟環境中蓬勃發展。

We have clarity on the elements of our business that we can control and show agility in pulling these levers of control to drive strong execution when economic uncertainty arises only to emerge stronger on the other side. Our people are the cornerstone of our efforts to drive Enpro to new heights as we encourage our colleagues to accelerate personal and profitable growth in Enpro 3.0, the next phase of our value-creating strategy launched earlier this year. We are excited and well positioned to continue demonstrating Enpro's growth capabilities and durable business model as we move forward.

我們清楚地了解我們能夠控制的業務要素，並在經濟出現不確定性時靈活地拉動這些控制槓桿來推動強有力的執行，從而在另一方面變得更加強大。我們的員工是我們推動 Enpro 邁向新高度的基石，我們鼓勵同事在 Enpro 3.0 中加速個人和獲利成長，Enpro 3.0 是我們今年稍早啟動的價值創造策略的下一階段。我們很高興並已做好準備，在未來的發展中繼續展示 Enpro 的成長能力和持久的商業模式。

Now on to our first-quarter performance. After my overview, Joe will provide a more detailed discussion of our quarterly results and perspectives underpinning our current outlook for 2025. The first-quarter report highlights continuing outperformance in Sealing Technologies and year-on-year revenue growth in AST. We grew organic sales 6% in the first quarter with strong execution, driving operational leverage and year-on-year earnings growth. In Sealing Technologies, organic sales increased 4.5%, driven by strength in aerospace, general industrial, and food and pharma markets, offset by continued weakness in commercial vehicle OEM demand.

現在來談談我們第一季的業績。在我概述之後，喬將更詳細地討論我們的季度業績以及我們對 2025 年當前展望的觀點。第一季報告強調了密封技術業務的持續優異表現以及 AST 業務收入的同比增長。我們在第一季實現了 6% 的有機銷售額成長，這得益於強大的執行力、營運槓桿和同比盈利的成長。密封技術部門有機銷售額增長 4.5%，這得益於航空航天、一般工業以及食品和製藥市場的強勁增長，但被商用車 OEM 需求的持續疲軟所抵消。

Adjusted segment EBITDA margins exceeded 32%. Continuous improvement initiatives, favorable pricing and mix also contributed to another strong quarter in Sealing. In line with our long-term strategy, we continue to invest in organic growth opportunities in areas where we have clear applied engineering and technological differentiation while pursuing capability expansions through acquisitions that meet our rigorous strategic and financial criteria. We are driving market share gains and accelerating sales in aerospace markets with technological innovation and differentiated applied engineering expertise.

調整後分部 EBITDA 利潤率超過 32%。持續的改善措施、優惠的定價和產品組合也促成了密封業務再創佳績。按照我們的長期策略，我們將繼續在具有明顯應用工程和技術差異化的領域投資有機成長機會，同時透過符合我們嚴格的策略和財務標準的收購來擴大能力。我們正透過技術創新和差異化的應用工程專業知識來推動市場份額的成長並加速航空航太市場的銷售。

In the commercial vehicle market, new products are helping stabilize sales and improved mix during this period of weaker demand for trailers. We continue to encourage imagination and are investing in adjacent market development opportunities that leverage our market-leading strengths.

在商用車市場，在拖車需求疲軟的時期，新產品有助於穩定銷售並改善產品組合。我們繼續鼓勵想像力，並投資於利用我們市場領先優勢的鄰近市場開發機會。

Additionally, the segment's aftermarket positioning provides stability during periods of economic or geopolitical uncertainty. Two-thirds of the segment serves the aftermarket with critical solutions qualified to safeguard a wide range of customer processes and we expect this segment to perform well in a variety of economic environments.

此外，該部門的售後市場定位在經濟或地緣政治不確定時期提供了穩定性。該部門的三分之二服務於售後市場，提供關鍵解決方案，以保護廣泛的客戶流程，我們預計該部門將在各種經濟環境中表現良好。

In the Advanced Surface Technologies segment, sales increased 9.1% year over year driven by double-digit revenue growth in Precision Cleaning Solutions and optical coatings and filters, more than offsetting still choppy semiconductor capital equipment spending. Despite expenses to support growth initiatives, operating leverage drove a nearly 19% improvement in adjusted segment EBITDA to a margin rate of around 22%.

在先進表面技術部門，銷售額年增 9.1%，這得益於精密清潔解決方案、光學塗層和濾光片兩位數的收入成長，足以抵消仍然波動的半導體資本設備支出。儘管支援成長計畫的費用很高，但經營槓桿推動調整後分部 EBITDA 提高了近 19%，利潤率達到 22% 左右。

Our targeted growth investments in the segment are developing nicely and our operational improvement initiatives position the AST segment well for future outperformance and our eventual overall market recovery. We continue to be pleased with the overall segment's performance during this prolonged period of weakness in semiconductor capital equipment spending as we lean into our best growth opportunities, investing in areas where we have strong technological advantages and differentiated capabilities.

我們在該領域的目標成長投資進展順利，我們的營運改善措施為 AST 領域未來的優異表現和最終的整體市場復甦奠定了良好的基礎。在半導體資本設備支出長期疲軟的時期，我們繼續對整個部門的表現感到滿意，因為我們傾向於最佳的成長機會，投資於我們擁有強大技術優勢和差異化能力的領域。

Total company adjusted EBITDA increased over 16% on the 6% increase in sales with margins expanding to 24.8% this quarter. Our balance sheet remains in excellent shape, providing us ample flexibility to execute on our value-creating strategy.

本季度，公司調整後 EBITDA 總額隨著銷售額成長 6% 而成長超過 16%，利潤率擴大至 24.8%。我們的資產負債表仍然保持良好狀態，為我們執行價值創造策略提供了充足的靈活性。

Before I hand the call over to Joe, I'd like to take a few minutes to discuss our direct tariff exposures. With respect to direct impact to our businesses, we believe our exposure to be minimal and manageable. Like others, we will continue to monitor potential secondary impacts that tariffs could have on the broader macroeconomic environment.

在我將電話交給喬之前，我想花幾分鐘時間討論我們的直接關稅風險。對於對我們業務的直接影響，我們認為影響很小且可控。與其他人一樣，我們將繼續監測關稅可能對更廣泛的宏觀經濟環境產生的潛在次要影響。

Most of our production is in region for region, and our supply chain teams have secured diversified raw material sources to support operations for the rest of the year. Our supply chain teams have demonstrated their discipline time and time again in a variety of challenging environments, and we are grateful for their continued agile execution during this period of macroeconomic and geopolitical uncertainty.

我們的大部分生產都是在特定區域進行的，我們的供應鏈團隊已經確保了多樣化的原材料來源，以支持今年剩餘時間的運作。我們的供應鏈團隊在各種充滿挑戰的環境中一次又一次地展示了他們的紀律性，我們感謝他們在宏觀經濟和地緣政治不確定時期繼續保持敏捷的執行力。

Their performance is reflective of our entire team's continued focus on our core values of safety, excellence and respect as we empower technology with purpose. I want to thank all of our colleagues for their dedication and commitment to our business, our values and our customers that continue to allow us to differentiate ourselves with excellent performance and build upon our market leadership.

他們的表現反映了我們整個團隊在有目的地賦予技術力量的同時，繼續關注我們的核心價值：安全、卓越和尊重。我要感謝所有同事對我們的業務、價值觀和客戶的奉獻和承諾，這讓我們能夠繼續以優異的表現脫穎而出，並鞏固我們的市場領導地位。

Joe?

喬？

Thank you, Eric, and good morning, everyone. We started 2025 with strong results and consistent execution despite the currently dynamic macroeconomic environment. In the first quarter, sales of $273.2 million increased more than 6% driven by continued strong performance in the Sealing Technologies segment and a 9.1% increase in AST.

謝謝你，艾瑞克，大家早安。儘管當前宏觀經濟環境充滿活力，但我們仍以強勁的業績和持續的執行力開啟了 2025 年。第一季度，銷售額達 2.732 億美元，成長超過 6%，這得益於密封技術部門持續強勁的表現以及 AST 成長 9.1%。

First-quarter adjusted EBITDA of $67.8 million increased more than 16% compared to the prior year period. Total company adjusted EBITDA margin of 24.8% expanded 210 basis points year over year. Volume growth in both segments, favorable mix, and cost controls drove operating leverage, offset in part by expenses tied to growth investments.

第一季調整後的 EBITDA 為 6,780 萬美元，較去年同期成長 16% 以上。公司調整後 EBITDA 利潤率為 24.8%，較去年同期成長 210 個基點。兩個部門的銷售成長、良好的產品組合和成本控制推動了營運槓桿，但與成長投資相關的費用部分抵消了這種影響。

Corporate expenses of $11.3 million in the first quarter of 2025 decreased from $12.2 million a year ago, with lower restructuring costs and professional fees, the primary drivers of the reduction. Adjusted diluted earnings per share of $1.90 increased 21%, driven by the factors behind adjusted EBITDA growth year over year.

2025 年第一季的公司支出為 1,130 萬美元，低於去年同期的 1,220 萬美元，重組成本和專業費用的降低是支出減少的主要推動因素。調整後每股攤薄收益為 1.90 美元，成長 21%，這得益於調整後 EBITDA 年成長的因素。

Moving to a discussion of segment performance. Sealing Technologies sales increased 4.7% to $179.6 million. Strength in aerospace, general industrial, and food and pharma more than offset continued weakness in commercial vehicle OEM demand and still tepid sales in Asia. Strong positions in diverse markets drove year-over-year sales growth in Sealing against the prior quarter that included a stronger commercial vehicle OEM demand. The weakness in that market, which continues today, was more pronounced for us in the second half of 2024.

轉向對細分市場表現的討論。密封技術銷售額成長 4.7%，達到 1.796 億美元。航空航太、一般工業以及食品和製藥行業的強勁表現足以抵消商用車原始設備製造商需求的持續疲軟以及亞洲市場銷售仍然低迷的影響。多元化市場的強勢地位推動了密封件銷售額與上一季相比實現同比增長，其中包括商用車 OEM 需求的增強。該市場的疲軟狀態一直持續到今天，並且在 2024 年下半年對我們來說更加明顯。

For the first quarter, adjusted segment EBITDA increased nearly 11%. Favorable mix and higher volume, strategic pricing, 80/20, and cost discipline all contributed to the operating leverage realized on the almost 5% increase in sales. Adjusted segment EBITDA margin this quarter at 32.7% remained above 30% for the fifth consecutive quarter.

第一季度，調整後部門 EBITDA 成長近 11%。良好的產品組合、更高的銷售量、策略定價、80/20 和成本控制均有助於實現營業槓桿，從而實現近 5% 的銷售成長。本季調整後分部 EBITDA 利潤率為 32.7%，連續第五個季度維持在 30% 以上。

Turning now to Advanced Surface Technologies. We are pleased with the segment's return to growth, with first-quarter sales increasing more than 9% to almost $94 million. While overall semiconductor capital equipment spending remains choppy, as Eric mentioned, we saw double-digit growth in our precision cleaning solutions and optical coatings and filter revenue. We continue to believe the low point of AST sales experienced in the first quarter of last year is behind us.

現在轉向先進表面技術。我們對該部門恢復成長感到高興，第一季銷售額成長超過 9%，達到近 9,400 萬美元。正如 Eric 所提到的，雖然整體半導體資本設備支出仍然波動，但我們的精密清潔解決方案、光學塗層和過濾器收入實現了兩位數成長。我們仍然相信，去年第一季 AST 銷售的低谷已經過去。

For the first quarter, adjusted segment EBITDA increased 18.5% versus the prior year period. Adjusted segment EBITDA margin expanded 180 basis points to 21.9%. Operating leverage on higher sales growth, favorable mix and cost reductions were offset in part by increased expenses tied to growth initiatives.

第一季度，調整後部門 EBITDA 較去年同期成長 18.5%。調整後分部 EBITDA 利潤率擴大 180 個基點至 21.9%。更高的銷售成長、良好的產品組合和成本削減帶來的營運槓桿作用，被與成長計畫相關的費用增加部分抵銷。

Continue to make targeted growth investments in areas where we have the strongest competitive advantages while reducing costs and implementing our continuous improvement playbooks to drive enhanced profitability and achieve our longer-term goals for AST segment performance.

繼續在我們具有最強競爭優勢的領域進行有針對性的成長投資，同時降低成本並實施我們的持續改進方案，以提高盈利能力並實現 AST 部門業績的長期目標。

Turning to the balance sheet and cash flow. Our balance sheet remains strong, and we have ample financial flexibility to execute on our long-term organic growth initiatives and consider select acquisitions that fit our rigorous strategic and financial objectives.

轉向資產負債表和現金流。我們的資產負債表仍然強勁，我們擁有充足的財務靈活性來執行我們的長期有機成長計劃，並考慮符合我們嚴格的策略和財務目標的特定收購。

Subsequent to quarter end, on April 9, 2025, Enpro amended its existing credit agreement. The amended credit agreement provides a revolving credit facility of up to $800 million, which will mature in 2030, offering us more financial capacity to execute on our strategic growth initiatives. This facility replaces a previously undrawn $400 million revolver and the term loan with an outstanding balance of $287 million, which were set to mature in 2026.

季度結束後，即 2025 年 4 月 9 日，Enpro 修改了其現有的信貸協議。修訂後的信貸協議提供了高達 8 億美元的循環信貸額度，將於 2030 年到期，為我們提供更多財務能力來執行我們的策略成長計畫。該貸款將取代先前未提取的 4 億美元循環信貸和未償餘額為 2.87 億美元的定期貸款，這些貸款原定於 2026 年到期。

As of May 1, 2025, corporate debt totaled $580 million, composed of the $350 million senior notes maturing in late 2026 and $230 million on our new revolving credit facility that matures in 2030. Reflecting the use of cash to partially fund the repayment of the term loans, our cash balance approximates $193 million as of May 1. Our net leverage ratio following these moves is currently 1.5 times trailing 12-month EBITDA as of March 31.

截至 2025 年 5 月 1 日，公司債務總額為 5.8 億美元，其中包括 2026 年底到期的 3.5 億美元優先票據和 2030 年到期的 2.3 億美元新循環信貸額度。考慮到使用現金部分償還定期貸款，截至 5 月 1 日，我們的現金餘額約為 1.93 億美元。在採取這些措施後，我們的淨槓桿率目前為截至 3 月 31 日的過去 12 個月 EBITDA 的 1.5 倍。

Free cash flow in the first quarter was $11.6 million, driven by strong operating performance during a seasonal period where cash from operations is typically used. We continue to expect capital expenditures to be around $50 million this year as we invest in future growth opportunities across the company at accretive margin and return thresholds.

第一季的自由現金流為 1,160 萬美元，這得益於通常使用經營現金的季節性期間強勁的經營業績。我們繼續預計今年的資本支出將在 5000 萬美元左右，因為我們將以增值利潤和回報門檻投資整個公司的未來成長機會。

Finally, our strong balance sheet and cash generation provide us with ample liquidity to make these investments while continuing to return capital to shareholders. In the first quarter, we paid a $0.31 per share quarterly dividend totaling $6.6 million. We also have an outstanding $50 million share repurchase authorization expiring in October 2026.

最後，我們強勁的資產負債表和現金產生能力為我們提供了充足的流動性來進行這些投資，同時繼續向股東返還資本。第一季度，我們支付了每股 0.31 美元的季度股息，總計 660 萬美元。我們還有一項未償還的 5,000 萬美元股票回購授權，將於 2026 年 10 月到期。

Moving on to guidance. We maintain our total year 2025 guidance issued in mid-February and continue to expect total Enpro sales growth to be in the low- to mid-single-digit range, adjusted EBITDA between $262 million to $277 million and adjusted diluted earnings per share to range from $7 to $7.70. The normalized tax rate used to calculate adjusted diluted earnings per share remains at 25% and fully diluted shares outstanding are $21.2 million.

繼續指導。我們維持2月中旬發布的2025年全年業績指引，並繼續預計Enpro的銷售額增長將保持在低至中等個位數區間，調整後EBITDA將在2.62億美元至2.77億美元之間，調整後稀釋每股收益將在7美元至7.70美元之間。用於計算調整後稀釋每股盈餘的標準稅率仍為25%，完全稀釋流通股數為2,120萬美元。

As discussed, with respect to the recently announced tariffs, we believe any direct cost impact to be minimal and manageable. And at this time, we are not seeing broad demand impacts on our business. Our maintained guidance contemplates a range of economic outcomes in the back half.

正如討論的那樣，就最近宣布的關稅而言，我們認為任何直接成本影響都是微小且可控的。目前，我們還沒有看到需求對我們的業務產生廣泛的影響。我們維持的指導方針考慮了下半年的一系列經濟結果。

In Sealing Technologies, shorter cycle order patterns remained solid into our seasonally strong second quarter. Last year's Q2 was a challenging comparison, especially with its adjusted segment EBITDA margin being at the high watermark of 35.5%.

在密封技術方面，較短週期訂單模式在我們季節性強勁的第二季保持穩固。與去年第二季相比，該公司的調整後分部 EBITDA 利潤率達到了 35.5% 的高位，這相當具有挑戰性。

We are encouraged by positive order momentum in certain shorter-cycle product lines such as general industrial and food and pharma that we expect to drive improved sales performance in Sealing Technology sequentially into the second quarter, while not contemplating a recovery in our commercial vehicle markets for the balance of this year.

我們對某些短週期產品線（如一般工業、食品和製藥）的積極訂單勢頭感到鼓舞，我們預計這些訂單將推動密封技術在第二季度的銷售業績連續改善，同時不考慮今年剩餘時間商用車市場的復甦。

Demand for longer cycle backlog-driven solutions, such as in commercial aerospace, space exploration, and sustainable power generation is growing nicely and contributes to our confidence for continued strong performance in the segment moving forward. Finally, we expect Sealing segment profitability to remain towards the high end of our previously communicated target range of 30%, plus or minus 250 basis points for the year.

商業航空航太、太空探索和永續發電等領域對更長週期積壓驅動解決方案的需求正在良好增長，這增強了我們對該領域未來繼續保持強勁表現的信心。最後，我們預計密封部門的獲利能力將保持在我們先前公佈的 30% 目標範圍的高端，全年獲利能力上下浮動 250 個基點。

In the Advanced Service Technologies segment, we continue to see growth in our advanced node cleaning business and positive demand signals in our optical coatings and filter business. We expect choppiness to persist in product lines tied to semiconductor capital equipment spending. We continue to expect AST revenue growth in the mid- to high-single-digit range for 2025, and we expect adjusted segment EBITDA margin to remain above [20%] (sic, see presentation slide 3, "25%") for the year.

在先進服務技術領域，我們繼續看到先進節點清潔業務的成長以及光學塗層和濾光片業務的積極需求訊號。我們預計與半導體資本設備支出相關的產品線將持續波動。我們繼續預期 2025 年 AST 營收成長率將達到中高個位數，並且我們預期調整後的分部 EBITDA 利潤率將保持在 [20%] 以上（原文如此，請參閱簡報投影片 3，「25%」）。

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

現在我將把電話轉回給 Eric 進行最後發言。

Thank you, Joe. We are excited to demonstrate our strength and agility as we embark on accelerating the personal and profitable growth of our colleagues and our company in the next phase of our value-creating strategy, Enpro 3.0. Thank you all for your interest in Enpro. We look forward to updating you in early August when we report results for the second quarter.

謝謝你，喬。我們非常高興能夠在價值創造策略 Enpro 3.0 的下一階段，展現我們的優勢和敏捷性，加速我們員工和公司的個人和獲利成長。感謝大家對 Enpro 的關注。我們期待在八月初報告第二季業績時向您通報最新情況。

We now welcome your questions.

現在我們歡迎您提問。

(Operator Instructions) Jeff Hammond, KeyBanc Capital Markets.

（操作員指示）Jeff Hammond，KeyBanc 資本市場。

I'm just wondering if you can put some numbers around your comment that the tariffs are minimal and manageable. And then any kind of pricing actions you've undertaken for that, I guess, minimal headwind?

我只是想知道您是否可以用一些數字來支持您的評論，即關稅是最低且可控的。那麼，您為此採取了哪些定價措施，我想，阻力是否最小？

Yeah, Jeff, I can give you some color anyways. We say minimal or manageable because most of our products are in region for region. When you look at our export versus import, we import very little in comparison to others perhaps. If you look at the products we import from China, it's really one product that's bearings that are used in our trailer manufacturing and our commercial vehicle business. And we've already been agile in securing other production. We can get it in Spain or India as an example.

是的，傑夫，無論如何我都可以給你一些顏色。我們說最低限度或可管理，因為我們的大多數產品都是按地區銷售的。當你比較我們的出口與進口時，你會發現與其他國家相比，我們的進口量可能非常少。如果你看一下我們從中國進口的產品，你會發現其中一個產品就是用於我們的拖車製造和商用車業務的軸承。我們已經迅速確保了其他產品的生產。例如，我們可以在西班牙或印度獲得它。

So our supply chain is very agile. We go back to as the times during COVID. We went through significant challenges at that point. And if you remember during our conference calls then, we never once pointed to that impacting our results. So we have a very, very good team that has a lot of agility, moves product rapidly to secure pricing that meets our customers' demand in these critical applications. We don't have the flexibility of substituting necessarily cheaper prices. So we have to be agile and our teams are excellent.

所以我們的供應鏈非常靈活。我們回到了新冠疫情期間的時代。那時我們經歷了重大挑戰。如果您還記得，當時在我們的電話會議中，我們從來沒有指出這會影響我們的結果。因此，我們擁有一支非常優秀的團隊，他們非常靈活，能夠快速生產產品，確保價格滿足客戶在這些關鍵應用上的需求。我們沒有彈性來取代必然更便宜的價格。所以我們必須敏捷，我們的團隊非常優秀。

So if you look at our North American exposure, it's Canada and Mexico, which have both been exempted by the tariffs. the products that we produce and ship cross-border. So there's very little impact there. So when you look around the region around the world, we have very, very little exposure to -- really, to tariffs in general in the primary, let me say, in the primary products and services that we do. Where we're exposed potentially is just in the greater macroeconomic conditions that we can't predict. But when we say minimal on manageable, very confident that we can perform well in this environment with tariffs.

因此，如果你看看我們在北美的業務，你會發現加拿大和墨西哥都已免關稅。我們生產和跨境運輸的產品。因此，其影響很小。因此，當你環顧世界各地時，你會發現，我們受到關稅的影響非常小——實際上，在我們生產的初級產品和服務中，基本上是受到關稅影響很小。我們可能面臨的只是我們無法預測的宏觀經濟條件。但是，當我們說最低限度的可控時，我們非常有信心我們可以在這種關稅環境下表現良好。

Okay. Great. And then I understand the guidance is unchanged. Are there any end markets that you're feeling particularly better or worse about versus, say, 90 days ago?

好的。偉大的。然後我了解到指導意見沒有改變。與 90 天前相比，您對哪些終端市場的感覺特別好或特別差？

I feel equally good about basically all of the markets at this point. For me personally, commercial vehicle is basically what we expected. So it's less than last year, the commercial vehicle OEM demand. But if you look at ton miles, which is where I always anchor, it's less than 1% difference. I think right now, we're currently forecasting about a 0.4% decline. So basically flat, and that's consistent with last year.

目前我對基本上所有的市場都同樣感到樂觀。就我個人而言，商用車基本上符合我們的期望。因此，商用車 OEM 需求低於去年。但如果你以噸英里計算，也就是我經常停泊的地方，差異不到 1%。我認為目前我們預測下降幅度約為 0.4%。所以基本持平，與去年一致。

And again, we have some innovation there as well that I think will help that business. And so I'm still excited about the businesses. When you look at our semiconductor business, still choppy and aerospace and space is doing strong, food and pharma, recovering nicely. And energy is also doing well. And again, we have a very strong aftermarket and recurring revenue that kind of insulates us from a lot of that. So I still feel good about that.

而且，我們也有一些創新，我認為這將有助於該業務。因此我仍然對這些業務感到興奮。看看我們的半導體業務，它仍然不穩定，而航空航天業務表現強勁，食品和製藥業務則復甦良好。能源領域也表現良好。而且，我們擁有非常強大的售後市場和經常性收入，這使得我們免受許多此類影響。所以我對此仍然感覺很好。

Yeah, Jeff, just overall, I mean, demand environment has been pretty good so far, right? And we talked about our guidance range. And if you were to contemplate the demand environment staying like it is now, that would bring the range of assumptions for the outcomes on the demand side. If we see things softening a little bit, you could bring the bottom half of our range into play.

是的，傑夫，總的來說，到目前為止需求環境一直很好，對吧？我們討論了我們的指導範圍。如果你考慮需求環境保持現在的樣子，那麼就會對需求方面的結果產生一系列假設。如果我們看到情況有所緩和，你可以將我們範圍的下半部發揮作用。

And that's why we talked about in our guidance range that we contemplate a range of economic incomes in the back half, really. But again, we haven't seen any broad signals there yet and overall demand has been pretty firm.

這就是為什麼我們在指導範圍內討論我們實際上考慮下半年的一系列經濟收入。但同樣，我們還沒有看到任何廣泛的訊號，整體需求仍然相當強勁。

I would like to add something. Our teams are positioning with our incremental growth investments, finding opportunities to pick up share using technological and applied engineering capabilities really across the company. So the energy internally despite what may be a more difficult macroeconomic environment in the second half doesn't necessarily stop the engine of our folks producing what they want -- what they're doing and driving, maybe some outsized growth in the future in line with our long-term growth algorithms.

我想補充一點。我們的團隊正在透過增量成長投資進行定位，尋找機會利用整個公司的技術和應用工程能力來獲取市場份額。因此，儘管下半年宏觀經濟環境可能更加困難，但內部的能量並不一定會阻止我們的員工生產他們想要的東西——他們正在做的事情和推動的事情，也許未來會根據我們的長期成長演算法實現一些超額成長。

Yeah, that was my follow up on -- I mean, you guys seem really uniquely well positioned to manage tariffs. I'm wondering if you look at the competitive landscape, if there's anything -- anywhere that you think because of your positioning versus others that may have to really push price where you could start to really pick up some share?

是的，這是我的後續問題——我的意思是，你們似乎確實有管理關稅的獨特優勢。我想知道，如果您看一下競爭格局，是否有任何事情 - 您是否認為由於您的定位與其他公司相比，您可能需要真正壓低價格才能開始真正獲得一些份額？

I always think there's opportunities in these kind of uncertain environments, and that's why I spent a lot of time talking about agility and the talent development that we do. So we spend a lot of time recruiting, developing, and training what I call agile aware business leaders with a high degree of acumen. And they need to be able to perform well really in any environment.

我一直認為在這種不確定的環境中存在著機遇，這就是為什麼我花了很多時間談論敏捷性和我們所做的人才發展。因此，我們花費大量時間招募、培養和培訓具有高度敏銳度的敏捷意識商業領袖。而且他們需要能夠在任何環境下表現良好。

And I look at tariffs is just another event. If you go back now in the last four or five years, we had COVID then you had the war in Russia, Ukraine, then you have the Israel situation. The next thing we'll be talking about in a couple of years will be AI in -- there'll be another inflection point that's just going to be continuous change. And our team is going to be able to thrive in all these environments. So we spend a lot of time developing our people to do that, and I'm confident that we'll perform well.

我認為關稅只是另一個事件。如果你回顧過去的四、五年，我們經歷了新冠疫情，然後是俄羅斯和烏克蘭的戰爭，然後是以色列的局勢。幾年後我們將要討論的下一件事就是人工智慧——這將是另一個持續變化的轉折點。我們的團隊將能夠在所有這些環境中蓬勃發展。因此，我們花費大量時間培養我們的員工來做到這一點，我相信我們會表現得很好。

(Operator Instructions) Steve Ferazani, Sidoti & Company.

（操作員指示）Steve Ferazani，Sidoti & Company。

I just wanted to circle on and double check on this, Eric. The first place we might see a slowdown in some distributor destocking. You've seen no examples of that yet?

我只是想再檢查一下這個問題，艾瑞克。首先，我們可能會看到一些經銷商去庫存的速度有所放緩。您還沒有看過這樣的例子嗎？

No. We never really saw an inventory build, which is it's kind of been getting the supply chain in balance for the last year or so, and there hasn't been a big accumulation of inventory because we've been -- if you go back to the calls last year, we talked about somewhere around 50% of our business being kind of in a flat to downturn. So there wasn't a reason really to build inventory. So I haven't seen any destocking.

不。我們從未真正看到庫存增加，也就是說，在過去一年左右的時間裡，供應鏈一直在保持平衡，而且庫存也沒有大量積累，因為我們——如果你回顧去年的電話會議，我們談到大約 50% 的業務處於平穩或低迷狀態。因此，實際上沒有理由建立庫存。因此我還沒有看到任何去庫存的現象。

Okay. Perfect. Flipping over to AST, any updates on the Arizona facility?

好的。完美的。翻到 AST，有關於亞利桑那州工廠的最新消息嗎？

It's on track. We're through qualification and starting to get some early revenue for testing and getting ready to go, but all systems are go, but we're still in Phase 1 and business is still ramping.

一切進展順利。我們已經通過了資格審查，並開始獲得一些早期收入用於測試和準備，但所有系統都已啟動，但我們仍處於第一階段，業務仍在成長。

And Steve, as we talked about, right, we expect qualifications to continue for some time, right? So last quarter, we talked about early revenue in the fourth quarter, not material but symbolic and important to get our momentum started, but we expect to be in qualification mode for the majority of this year and then starting to see some revenue contribution in -- and production level volume starting towards the end of the year. Everything is on track, doing very well and seeing good signs of qualifications.

史蒂夫，正如我們所說的，我們預計資格認證將持續一段時間，對嗎？因此，上個季度，我們談到了第四季度的早期收入，雖然不是實質性的，但具有像徵意義，對於我們開始發展勢頭很重要，但我們預計今年大部分時間都會處於資格模式，然後開始看到一些收入貢獻 - 以及從年底開始的生產水平量。一切都在按計劃進行，進展非常順利，並且看到了良好的資格跡象。

The continuous improvement efforts on AST, which you started applying last year. Are you starting to see any benefit from it? Or will we see it as top line grows?

您去年開始對 AST 進行持續改進。你開始看到它的好處了嗎？或者我們會看到它隨著營業額的成長而成長嗎？

It's just a little bit here and there. I would say it's continuous improvement, it's area breathe. So it's just a little bit all the time. And so it will continue. We're seeing a little bit, but it will never be like a step change where all of a sudden, you see this big increase all of a sudden, they'll just be consistent, a little bit wins here and there. So yeah, we are seeing some results, and we'll continue to see results. So it will be improvement over time.

這只是這裡和那裡的一點點。我想說的是，這是一種持續的改進，是一種區域的呼吸。所以一直都是只有一點點。這種情況將會持續下去。我們看到了一點變化，但它永遠不會像突然之間出現的巨大變化那樣，你會看到突然間出現如此大的增長，它們只是保持一致，偶爾會有一點點勝利。是的，我們看到了一些成果，而且我們將繼續看到成果。因此隨著時間的推移它會得到改善。

And then if I could just ask about capital allocation. Given the current environment, is M&A activity kind of freezing up a little bit? I imagine due diligence efforts have to be much more diligent given you have to check supply chains of any potential acquisition. But you can talk about one M&A? And does that mean more likelihood as you're paying down debt because, by our model, you're still going to generate a ton of cash this year?

然後我可以問一下有關資本配置的問題嗎？鑑於目前的環境，併購活動是否有些凍結？我認為盡職調查工作必須更加認真，因為你必須檢查任何潛在收購的供應鏈。但是您可以談論一次併購嗎？這是否意味著您在償還債務時更有可能獲得收益，因為根據我們的模型，您今年仍將產生大量現金？

Yeah, Steve, I mean, there's still activity out there, right? There's still processes coming. But as you said, right, given the uncertainty in the market, it has slowed a little bit, and we have to be extra diligent to make sure that we understand the current environment that everyone is operating in and the current business situation. So we're going to continue to prioritize high-quality assets and high-quality businesses that fit our strategic and financial criteria. We can be patient.

是的，史蒂夫，我的意思是，那裡仍然有活動，對吧？仍有進程正在進行。但正如您所說，鑑於市場的不確定性，它已經放緩，我們必須格外勤奮，以確保我們了解每個人目前的經營環境和當前的業務狀況。因此，我們將繼續優先考慮符合我們策略和財務標準的高品質資產和高品質業務。我們可以耐心等待。

As you said, we're generating good cash. Our balance sheet is in great working order. The new credit facility that we put in place gives us even more flexibility, right, with the revolver taking out the term loans, and we have the ability to kind of pay down debt as we have cash and preserve our overall capacity there.

正如您所說，我們正在產生良好的現金。我們的資產負債表運作良好。我們實施的新信貸安排為我們提供了更大的靈活性，透過循環信貸可以償還定期貸款，我們有能力用現金償還債務並保持我們的整體能力。

So we have even more flexibility in capital allocation going forward. We continue to prioritize organic growth and M&A from a capital allocation standpoint. We're just going to continue to be patient and extremely diligent in making sure that the areas that we're looking in our pipeline is of our quality. But that's the continued focus from a capital allocation standpoint.

因此，我們在未來的資本配置方面擁有更大的靈活性。從資本配置的角度，我們繼續優先考慮有機成長和併購。我們將繼續保持耐心並極其勤奮地確保我們在管道中尋找的領域符合我們的品質。但從資本配置的角度來看，這仍是關注的重點。

Ian Zaffino, Oppenheimer.

伊恩·扎菲諾，奧本海默。

Maybe you could help us understand the margin expansion a little bit more, especially in Sealings, how much of that was volume versus price, and maybe help us understand the pricing outlook for aerospace and general industrial in general.

也許您可以幫助我們更多地了解利潤率的擴大，特別是在密封件方面，其中有多少是數量與價格的對比，也許可以幫助我們了解航空航天和一般工業的定價前景。

I think it was more mix driven. We had great success with the strategic pricing initiatives in recent years as inflation kind of lifted all boats, if you will. But underneath that, that value pricing dynamic is really the margin driver there. I would say that if you look at the areas where we were strongest, areas like aftermarket, general industrial, aerospace with the heavy accent on space, those will generally mix our margins higher just on core volume growth. End market related, aerospace was up just over 20% for us in Sealing year over year.

我認為它更多的是混合驅動的。近年來，由於通貨膨脹，所有船隻都受益，我們的策略定價措施取得了巨大成功。但在這背後，價值定價動態才是真正的利潤驅動因素。我想說的是，如果你看看我們最強大的領域，例如售後市場、一般工業、航空航太（重點關注太空領域），這些領域通常會讓我們的利潤率僅僅因為核心銷售的成長而更高。與終端市場相關，航空航太業的密封業務年增了 20% 多一點。

In terms of general price, what you'll see now is just traditional 2% or so general price increase, and we typically do that year after year. And so we did that in January of this year, and you'll continue to see that type of thing in this environment.

就整體價格而言，您現在看到的只是傳統的 2% 左右的總體價格上漲，而且我們通常年復一年地這樣做。因此，我們在今年一月就這麼做了，在這種環境下，你將繼續看到這種事情。

To James' point, right, we are seeing good strong demand in some of our key end markets, space, aerospace, food and pharma, and they drive favorable mix. We also continue to just execute extremely well on the Sealing side, especially. So where you see margin expansion, it's our traditional playbook of continued strong cost control, operational efficiency, strong, good incremental margins on the volume and the strong leverage that we're bringing forward. So it's our continuous playbook of everything at the moment.

正如詹姆斯所說，我們看到一些主要終端市場，如太空、航空航太、食品和製藥等，需求強勁，它們推動了有利的組合。我們在密封方面的表現也特別出色。因此，當您看到利潤率擴大時，這是我們傳統的策略，即繼續強有力的成本控制、營運效率、強勁、良好的增量利潤率以及我們正在帶來的強大槓桿。所以這是我們目前所有事情的連續劇本。

Right. And not to be deemphasized is the two-thirds position in the aftermarket there, which is a qualified spec position with strong, strong market leadership.

正確的。並且不容忽視的是，該公司在售後市場佔有三分之二的份額，這是一個合格的規格地位，具有強大的市場領導地位。

Okay. Good. And then if I could just turn to AST for a sec. Are we still feeling confident in this mid-, high--single-digit growth for the year there? Are you seeing any positive indicators on the capital equipment side? And then if I could squeeze in one more, the double-digit growth in Cleaning Solutions, does that include any contributions from the Arizona facility in the first quarter?

好的。好的。然後如果我可以轉向 AST 一會兒。我們是否仍然對今年的中高個位數成長充滿信心？您是否看到資本設備方面的任何積極指標？然後，如果我可以再擠一點，清潔解決方案的兩位數成長，是否包括第一季亞利桑那州工廠的貢獻？

Yeah, we continue to expect the mid- to high-single-digit growth in AST. So I still say choppy. Do we see the OEM demand picking up? I would still say choppy. It's a little bit here, a little bit there. We are getting some commercial wins, and our pipeline is very strong and very little contribution from Arizona in the first quarter.

是的，我們繼續預期 AST 將實現中高個位數成長。所以我還是說不穩定。我們是否看到 OEM 需求正在回升？我還是會說不穩定。這裡一點，那裡一點。我們獲得了一些商業上的勝利，我們的管道非常強大，第一季來自亞利桑那州的貢獻很小。

You asked about precision cleaning. So that business is extremely strong, right? And we're positioned very well on leading-edge nodes, both in our foundation in Taiwan, but also in our facilities in California, in Milpitas, California. And we're seeing strong demand there, continued penetration into leading-edge production.

您詢問的是精密清潔。那麼這項業務非常強勁，對嗎？我們在前沿節點上佔據著非常有利的地位，不僅在我們位於台灣的基地，而且在我們位於加州米爾皮塔斯的設施中。我們看到那裡的需求強勁，並持續滲透到尖端生產領域。

And as we've talked about in the past, that business has grown through the entire cycle from the OEM side, and we just continue to be very well positioned in seeing continued penetration into leading-edge nodes there, and that's driving the growth, and that's expected to continue. Continue to outperform there. And then the other areas that we're investing behind starting to contribute towards the end of this year and feel very confident in our mid- to high-single digits overall for AST.

正如我們過去所討論過的，該業務從 OEM 方面開始在整個週期內都在增長，我們繼續處於非常有利的位置，能夠看到該業務持續滲透到尖端節點，這推動了增長，預計這種情況還將繼續。繼續在那裡表現出色。然後，我們正在投資的其他領域將在今年年底開始做出貢獻，我們對 AST 整體中高個位數的成長非常有信心。

And just longer term as well, our teams are working on new areas of growth as new platforms develop in the coming years. So you know that sometimes the qualification cycle lasts two years plus. So that work is ongoing to drive good solid top-line growth at AST over the long term. And if the market recovers, that would be great.

從長遠來看，隨著未來幾年新平台的發展，我們的團隊也將致力於新的成長領域。所以你知道有時資格認證週期會持續兩年以上。因此，這項工作正在持續進行，以推動 AST 長期實現良好且穩健的營收成長。如果市場復甦，那就太好了。

Just a little bit more color maybe to give you some timeframe, if you think about it that way. Our California facility has just recently -- should be filled up within the next year. So if you think about California, how long it took to ramp that, Arizona will start to benefit from California overflows, and we're getting close to that. Just recently added a third shift in California. So that facility will be at capacity before long.

如果你這樣想的話，也許只需要多一點顏色就可以給你一些時間框架。我們的加州工廠最近——明年內應該就會滿員。因此，如果你想想加州，需要多長時間才能實現這一目標，亞利桑那州將開始受益於加州的溢流，而我們已經接近這一目標。最近剛在加州增加了第三班次。因此該設施不久就會達到滿載狀態。

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

我們的問答環節已經結束。我想把發言權交還給詹姆斯，請他進一步發表結束語。

Thank you for your time today. We're delighted and look forward to updating you in the second quarter when we report in early August. In the meantime, we'll likely spend a lot of time with you all. Our Investor Relations calendar is quite busy in coming periods. Thank you for your interest.

感謝您今天抽出時間。我們非常高興，並期待在 8 月初報告第二季的最新情況。同時，我們可能會花很多時間與你們在一起。未來一段時間，我們的投資者關係日程將會非常繁忙。感謝您的關注。

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.

謝謝。今天的電話會議和網路直播到此結束。此時您可以斷開線路，祝您有美好的一天。我們感謝您今天的參與。